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	<title> - MEDICAID OVERSIGHT: EXISTING PROBLEMS AND WAYS TO STRENGTHEN THE PROGRAM</title>
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	[House Hearing, 115 Congress]
	[From the U.S. Government Publishing Office]





	MEDICAID OVERSIGHT: EXISTING PROBLEMS AND WAYS TO STRENGTHEN THE
	PROGRAM

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

	HEARING

	BEFORE THE

	SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

	OF THE

	COMMITTEE ON ENERGY AND COMMERCE
	HOUSE OF REPRESENTATIVES

	ONE HUNDRED FIFTEENTH CONGRESS

	FIRST SESSION

	__________

	JANUARY 31, 2017

	__________

	Serial No. 115-1






	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]













	Printed for the use of the Committee on Energy and Commerce
	energycommerce.house.gov
	_______

	U.S. GOVERNMENT PUBLISHING OFFICE

	24-614 WASHINGTON : 2018
	-----------------------------------------------------------------------
	For sale by the Superintendent of Documents, U.S. Government Publishing
	Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
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	Washington, DC 20402-0001















































	COMMITTEE ON ENERGY AND COMMERCE

	GREG WALDEN, Oregon
	Chairman
	JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
	Vice Chairman Ranking Member
	FRED UPTON, Michigan BOBBY L. RUSH, Illinois
	JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
	TIM MURPHY, Pennsylvania ELIOT L. ENGEL, New York
	MICHAEL C. BURGESS, Texas GENE GREEN, Texas
	MARSHA BLACKBURN, Tennessee DIANA DeGETTE, Colorado
	STEVE SCALISE, Louisiana MICHAEL F. DOYLE, Pennsylvania
	ROBERT E. LATTA, Ohio JANICE D. SCHAKOWSKY, Illinois
	CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
	GREGG HARPER, Mississippi DORIS O. MATSUI, California
	LEONARD LANCE, New Jersey 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
	BILL JOHNSON, Ohio DAVID LOEBSACK, Iowa
	BILLY LONG, Missouri KURT SCHRADER, Oregon
	LARRY BUCSHON, Indiana JOSEPH P. KENNEDY, III,
	BILL FLORES, Texas Massachusetts
	SUSAN W. BROOKS, Indiana TONY CARDENAS, California
	MARKWAYNE MULLIN, Oklahoma RAUL RUIZ, California
	RICHARD HUDSON, North Carolina SCOTT H. PETERS, California
	CHRIS COLLINS, New York DEBBIE DINGELL, Michigan
	KEVIN CRAMER, North Dakota
	TIM WALBERG, Michigan
	MIMI WALTERS, California
	RYAN A. COSTELLO, Pennsylvania
	EARL L. ``BUDDY'' CARTER, Georgia

	Subcommittee on Oversight and Investigations

	TIM MURPHY, Pennsylvania
	Chairman
	H. MORGAN GRIFFITH, Virginia DIANA DeGETTE, Colorado
	Vice Chairman Ranking Member
	JOE BARTON, Texas JANICE D. SCHAKOWSKY, Illinois
	MICHAEL C. BURGESS, Texas KATHY CASTOR, Florida
	SUSAN W. BROOKS, Indiana PAUL TONKO, New York
	CHRIS COLLINS, New York YVETTE D. CLARKE, New York
	TIM WALBERG, Michigan RAUL RUIZ, California
	MIMI WALTERS, California SCOTT H. PETERS, California
	RYAN A. COSTELLO, Pennsylvania FRANK PALLONE, Jr., New Jersey (ex
	EARL L. ``BUDDY'' CARTER, Georgia officio)
	GREG WALDEN, Oregon (ex officio)

























	C O N T E N T S

	----------
	Page
	Hon. Tim Murphy, a Representative in Congress from the
	Commonwealth of Pennsylvania, opening statement................ 1
	Prepared statement........................................... 3
	Hon. Diana DeGette, a Representative in Congress from the state
	of Colorado, opening statement................................. 4
	Hon. Frank Pallone, Jr., a Representative in Congress from the
	State of New Jersey, opening statement......................... 6
	Hon. Greg Walden, a Representative in Congress from the State of
	Oregon, prepared statement..................................... 126

	Witnesses

	Carolyn L. Yocom, Director, Health Care, U.S. Government
	Accountability Office.......................................... 9
	Prepared statement........................................... 11
	Ann Maxwell, Assistant Inspector General, Office of Evaluation
	and Inspections, Office of Inspector General, Department of
	Health and Human Services...................................... 28
	Prepared statement........................................... 30
	Paul Howard, Senior Fellow, Director, Health Policy, The
	Manhattan Institute............................................ 43
	Prepared statement........................................... 45
	Josh Archambault, MPP, Senior Fellow, The Foundation for
	Government Accountability...................................... 62
	Prepared statement........................................... 64
	Timothy M. Westmoreland, J.D., Professor from Practice, Senior
	Scholar in Health Law, Georgetown University Law Center........ 82
	Prepared statement........................................... 84

	Submitted Material

	Subcommittee memorandum.......................................... 128


	MEDICAID OVERSIGHT: EXISTING PROBLEMS AND WAYS TO STRENGTHEN THE
	PROGRAM

	----------


	TUESDAY, JANUARY 31, 2017

	House of Representatives,
	Subcommittee on Oversight and Investigations,
	Committee on Energy and Commerce,
	Washington, DC.
	The subcommittee met, pursuant to call, at 10:00 a.m., in
	room 2123, Rayburn House Office Building, Hon. Tim Murphy
	(chairman of the subcommittee) presiding.
	Present: Representatives Murphy, Griffith, Burgess, Brooks,
	Collins, Barton, Walberg, Walters, Costello, Carter, Walden (ex
	officio), DeGette, Schakowsky, Castor, Tonko, Clarke, Ruiz,
	Peters, and Pallone (ex officio).
	Staff Present: Jennifer Barblan, Chief Counsel, O&I; Elena
	Brennan, Legislative Clerk, O&I; Paige Decker, Executive
	Assistant & Committee Clerk; Scott Dziengelski, Policy
	Coordinator, Health; Blair Ellis, Digital Coordinator/Press
	Secretary; Emily Felder, Counsel, O&I; Jay Gulshen, Legislative
	Clerk, Health; Brittany Havens, Professional Staff, O&I; Peter
	Kielty, Deputy General Counsel; Katie McKeough, Press
	Assistant; Jennifer Sherman, Press Secretary; Luke Wallwork,
	Staff Assistant; Gregory Watson, Legislative Clerk, C&T;
	Everett Winnick, Director of Information Technology; Jeff
	Carroll, Minority Staff Director; Tiffany Guarascio, Minority
	Deputy Staff Director and Chief Health Advisor; Chris Knauer,
	Minority Oversight Staff Director; Una Lee, Minority Chief
	Oversight Counsel; Miles Lichtman, Minority Staff Assistant;
	Dan Miller, Minority Staff Assistant; Jon Monger, Minority
	Counsel; Dino Papanastasiou, Minority GAO Detailee; Rachel
	Pryor, Minority Health Policy Advisor; Matt Schumacher,
	Minority Press Assistant; Andrew Souvall, Minority Director of
	Communications, Outreach and Member Services; and C.J. Young,
	Minority Press Secretary.

	OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
	CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

	Mr. Murphy. Good morning, everyone. Welcome to the newly
	refurbished--well, I want to call it the Oversight and
	Investigation Committee room, which is sometimes used by Energy
	and Commerce. What a beautiful room and it should be more
	conducive to a good hearing.
	This is the first one of the 115th Congress, so welcome
	here, and welcome to our witnesses today, and welcome back to
	my friend and colleague, Ranking Member Diana DeGette of
	Colorado.
	This is our Medicaid oversight hearing on existing problems
	and ways to strengthen the program. The subcommittee convened
	this hearing today to examine a critical component of the
	Patient Protection and Affordable Care Act, Medicaid and
	Medicaid expansion.
	As the world's largest health program, Medicaid provides
	healthcare coverage for over 70 million Americans and accounts
	for more than 15 percent of healthcare spending in the United
	States. In 2015 alone, Federal taxpayers spent over $350
	billion on Medicaid, and the costs continue to rise each year.
	According to the Congressional Budget Office, the Federal share
	of Medicaid spending is expected to rise significantly over the
	coming decade, from $371 billion in 2016 to $624 billion in
	2026, over 10 years.
	At a time when Medicaid program costs are skyrocketing, it
	makes sense to ask the question, is Medicaid adequately serving
	our most vulnerable populations? Medicaid was originally
	designed as a safety net to care for health of some of our most
	vulnerable populations: Low-income children, pregnant women,
	parents of dependent children, the elderly, individuals with
	disabilities. And for many years serving as a psychologist, I
	know I've treated many kids that without their disability
	coverage from Medicaid, it would be a struggle for them.
	But far too often, Medicaid's own rules keep it from best
	serving the families that it was designed to help. These
	restrictions surrounding Medicaid do not allow doctors and
	nurses the flexibility they need to arrive at the best outcome
	for patients. For instance, most Medicaid programs do not use
	physician-focused alternative payment models that can improve
	care and reduce costs.
	And studies show that Medicaid coverage does not
	necessarily result in better health outcomes. One often cited
	study in Oregon found that Medicaid coverage increases
	healthcare use and improves self-reported health and mental
	health, while having no effect on mortality or physical health.
	Similarly, the National Bureau of Economic Research found that
	Medicaid enrollees obtained only 20 to 40 cents of value for
	each dollar the government spends on their behalf.
	Further, reports by nonpartisan watchdogs, two of which are
	here today, show that the Medicaid program remains a target for
	waste, fraud, and abuse. Because of the size and scale of the
	program, improper payments, including payments made for people
	not eligible for Medicaid or for services that were not
	provided, are extremely high. The Government Accountability
	Office estimates Medicaid paid out over $17 billion in improper
	payments in fiscal year 2014 alone.
	For these reasons, Medicaid has been designated as a high-
	risk program by the GAO for 14 years, since 2003. And despite
	the longstanding problems in the Medicaid program, the Patient
	Protection and Affordable Care Act expanded Medicaid to a whole
	new population. In 32 states, Medicaid benefits have been
	opened up to adults under the age of 65 who make less than 133
	percent of the poverty level.
	Since open enrollment began in October 2013, roughly 11
	million individuals have signed up for Medicaid coverage under
	the new eligibility parameters. This means that the majority of
	individuals covered under ObamaCare have enrolled through the
	Medicaid program instead of purchasing private health insurance
	plans.
	The costs associated with insuring the 11 million new
	Medicaid enrollees have been far more expensive than the Obama
	administration predicted. A report released by the Department
	of Health and Human Services found that the average cost of
	expansion enrollees was nearly 50 percent higher than
	projected. Medicaid expansion enrollees cost an average of
	$6,366 in fiscal year 2015, which is 49 percent higher than the
	agency predicted the year prior.
	This means that not only are expansion enrollees expensive
	to insure, but the costs are difficult to predict. Further,
	because of the high matching rate, the Federal taxpayer is on
	the hook for the vast majority of expenses associated with new
	enrollees. Unfortunately, reports show both states and the
	Federal Government cannot effectively oversee and implement
	Medicaid expansion. The GAO found errors in Medicaid
	eligibility determinations that could lead to misspending of
	funds. Likewise, the Inspector General found troubling evidence
	that the Federal Government failed to implement requirements in
	the Patient Protection and Affordable Care Act that were
	supposed to improve program integrity and root out waste,
	fraud, and abuse.
	While we all acknowledge there are serious weaknesses and
	deficiencies in how this program operates, we also recognize
	the responsibility of the Federal Government to provide a
	safety net to the most vulnerable among us. That means ensuring
	that taxpayer dollars are spent in a way that actually improves
	health outcomes and serves the Medicaid population. We want
	this to work, not hinder services. And I hope we can, in a
	bipartisan way, support its strengths, acknowledge the
	problems, and together find some solutions.
	Tomorrow, the Health Subcommittee will discuss legislative
	solutions to strengthen Medicaid, but as we move forward with
	legislation, we must also be careful not to repeat the
	worsening problems that already exist in the program. As we
	will hear from our witnesses today, we have a lot of work to do
	and I'd like to thank our witnesses for appearing today and
	look forward to an informative discussion.
	I now turn to the ranking member Ms. DeGette for 5 minutes.
	[The prepared statement of Mr. Murphy follows:]

	Prepared statement of Hon. Tim Murphy

	The Subcommittee convenes this hearing today to examine a
	critical component of the Patient Protection and Affordable
	Care Act: Medicaid and Medicaid Expansion.
	As the world's largest health program, Medicaid provides
	health care coverage for over 70 million Americans, and
	accounts for more than 15 percent of health care spending in
	the United States.
	In 2015 alone, federal taxpayers spent over $350 billion
	dollars on Medicaid, and the costs continue to rise each year.
	According to the Congressional Budget Office, the federal share
	of Medicaid spending is expected to rise significantly over the
	coming decade, from $371 billion in 2016 to $624 billion in
	2026.
	At a time when Medicaid program costs are skyrocketing, it
	makes sense to ask the question: is Medicaid adequately serving
	our most vulnerable populations?
	Medicaid was originally designed as a safety net to care
	for the health of some of our most vulnerable populations: low-
	income children, pregnant women, parents of dependent children,
	the elderly and individuals with disabilities.
	Far too often, however, Medicaid's own rules keep it from
	best serving the families that it was designed to help. These
	restrictions surrounding Medicaid do not allow doctors and
	nurses the flexibility they need to arrive at the best outcome
	for patients. For instance, most Medicaid programs do not use
	physician-focused alternative payment models that can improve
	care and reduce costs.
	And studies show that Medicaid coverage does not
	necessarily result in better health outcomes. One often-cited
	study in Oregon found that Medicaid coverage increases health
	care use and improves self-reported health and mental health
	while having no effect on mortality or physical health.
	Similarly, the National Bureau of Economic Research found
	that Medicaid enrollees obtain only 20 to 40 cents of value for
	each dollar the government spends on their behalf.
	Further, reports by non-partisan watchdogs--two of which
	are here today--show that the Medicaid program remains a target
	for waste, fraud, and abuse. Because of the size and scale of
	the program, improper payments--including payments made for
	people not eligible for Medicaid, or for services that were not
	provided--are extremely high. The Government Accountability
	Office estimates Medicaid paid out over $17 billion in improper
	payments in fiscal year 2014 alone.
	For these reasons, Medicaid has been designated as a ``high
	risk'' program by the GAO for 14 years--since 2003. And despite
	the long-standing problems in the Medicaid program, the Patient
	Protection and Affordable Care Act expanded Medicaid to a whole
	new population. In 32 states, Medicaid benefits have been
	opened up to adults under the age of 65, who make less than 133
	percent of the poverty level.
	Since open enrollment began in October 2013, roughly 11
	million individuals have signed up for Medicaid coverage under
	the new eligibility parameters. This means that the majority of
	individuals covered under Obamacare have enrolled through the
	Medicaid program, instead of purchasing private health
	insurance plans.
	The costs associated with insuring the 11 million new
	Medicaid enrollees have been far more expensive than the Obama
	Administration predicted. A report released by the Department
	of Health and Human Services found that the average cost of
	expansion enrollees was nearly 50 percent higher than
	projected. Medicaid expansion enrollees costs an average of
	$6,366 in fiscal year 2015--which is 49 percent higher than the
	agency predicted the year prior.
	This means that not only are expansion enrollees expensive
	to insure--but the costs are difficult to predict. Further,
	because of the high matching rate, the federal taxpayer is on
	the hook for the vast majority of expenses associated with new
	enrollees.
	Unfortunately, reports show both states and the federal
	government cannot effectively oversee and implement Medicaid
	expansion. The GAO found errors in Medicaid eligibility
	determinations that could lead to misspending of funds.
	Likewise, the Inspector General found troubling evidence that
	the federal government failed to implement requirements in the
	Patient Protection and Affordable Care Act that were supposed
	to improve program integrity and root out waste, fraud, and
	abuse.
	While we all acknowledge there are serious weaknesses and
	deficiencies in how this program operates, we also recognize
	the responsibility of the federal government to provide a
	safety net to the most vulnerable among us. That means ensuring
	that taxpayer dollars are spent in a way that actually improves
	health outcomes and serves the Medicaid beneficiaries in need.
	Tomorrow, the Health Subcommittee will discuss legislative
	solutions to strengthen Medicaid. But as we move forward with
	legislation, we must also be careful not to repeat or worsen
	problems that already exist in the program. As we will hear
	from our witnesses today, we have a lot of work to do.
	I would like to thank our witnesses for appearing today,
	and look forward to an informative discussion.

	OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
	CONGRESS FROM THE STATE OF COLORADO

	Ms. DeGette. Thank you very much, Mr. Chairman. It's good
	to be back for another session of Congress.
	We have two new members on our side of the aisle on this
	subcommittee this year, and I am so happy to welcome them. Dr.
	Ruiz is here with us at the end. He's an actual emergency room
	doctor, and he'll be able to bring us so much great perspective
	on issues like this hearing and other hearings.
	And then Scott Peters, who's not here at this moment, I am
	pleased he's here. He and I comprise two-thirds of the NYU law
	graduate delegation to Congress. So I am happy we're loading up
	this committee with NYU law grads.
	I think I'd be deceiving myself if I thought that today's
	hearing was intended to actually strengthen the Medicaid
	program. Although I hope it's not so, I fear that this
	discussion about Medicaid is intended to lay the groundwork for
	drastic cuts to the program and eventually to repeal the
	Affordable Care Act's historic Medicaid expansion. So I'd like
	to talk a few minutes about the importance of this program and
	what Medicaid expansion has accomplished for the American
	people.
	Today, more than 70 million low-income Americans, including
	seniors, children, adults, and people with disabilities, have
	access to quality health care, thanks to Medicaid. And
	contrary, frankly, to what my colleagues on the other side of
	the aisle think, the Medicaid program delivers this care
	efficiently and effectively. The costs per beneficiary are
	actually substantially lower than for private insurance and
	have been growing more slowly per beneficiary.
	Numerous studies have shown that Medicaid has helped make
	millions of Americans healthier by improving access to primary
	and preventative care and by helping Americans manage and treat
	serious disease. In fact, the Medicaid program literally saves
	lives. Research published in the New England Journal of
	Medicine reported that previous expansions of Medicaid coverage
	for low-income adults in Arizona, Maine, and New York actually
	reduced deaths by 6.1 percent. The ACA's historic Medicaid
	expansion has let states build on this record of success and
	provide insurance to millions of Americans who otherwise would
	not have had access to health care.
	Last year--and we need to think about this--more than 12
	million low-income adults had healthcare coverage because of
	the Medicaid expansion. This is astonishing. And combined with
	other important provisions of the ACA, this has helped drive
	the uninsured rate to the lowest level in our country's
	history.
	It's important to note these are not people who shifted
	from private insurance to the Medicaid expansion; this is
	people who had no insurance and were using the emergency rooms
	as their primary care facilities. In Colorado, for example, the
	rate of the uninsured was cut in half since the enactment of
	the ACA and through the expansion of Medicaid.
	Now, aside from the benefits that have accrued to the
	people, Medicaid has actually resulted in tremendous savings
	for the states. Hospitals nationwide have seen their
	uncompensated care burden drop by $10.4 billion since the ACA
	became law. Denver Health Medical Center, which is in my
	district, this week reported to my office that their
	uncompensated care claims actually fell by 30 percent since
	passage of the ACA. This is real savings. And also, we know
	that Medicaid is helping people get access to vital health care
	services.
	I had a listening session last week in Denver about the
	ACA. I had 200 people show up at this listening session. And
	most of the people who told their heartrending stories talked
	about how they were employed, but they couldn't afford private
	insurance. And due to the Medicaid expansion, they now had
	mental health services. They had drug treatment and opioid
	treatment services. They had services for catastrophic
	accidents that they have had, and on and on. It got to the
	point where I literally had to take a packet of Kleenex out of
	my purse and put it on the podium, because everybody, including
	my staff and myself, were in tears listening to these stories.
	This is what the majority wants to take away and this is what
	we're talking about.
	We can all talk about eliminating waste, fraud, and abuse
	in the program. We're all for that, and I would support that
	100 percent. But taking away vital health care for so many
	millions of Americans is wrong, and we must fight against
	taking that important benefit away.
	I yield back.
	Mr. Murphy. The gentlelady yields back.
	And we don't have anybody else on our side of the aisle who
	wants to give an opening statement. I believe Mr. Walden is
	detained in a meeting and he will come back later. Perhaps over
	there.
	Mr. Pallone, do you want to be recognized for 5 minutes?
	The ranking member of the committee, Mr. Pallone, is
	recognized for 5 minutes.

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

	Mr. Pallone. Thank you. Thank you, Mr. Chairman. It's great
	to be back in our room here today. It looks really nice.
	For 7 years now, Congressional Republicans have railed
	against the Affordable Care Act with a steady drumbeat of
	repeal and replace, and for 7 years they have sabotaged
	implementation of the law. And here we are today, Republicans
	are misleading the public, in my opinion, with falsehoods that
	the law is failing, and that could not be further from the
	truth.
	The truth is, after 7 years of claiming they could do
	better, they have no plan to replace the Affordable Care Act.
	The subcommittee should be evaluating the impact that repeal
	would have on the American people and the national healthcare
	system, but instead, Republicans are holding yet another
	hearing to highlight their ongoing opposition to the law's
	Medicaid expansion, despite clear evidence that the expansion
	has made health care affordable and available for the first
	time to 12 million people nationwide.
	Tomorrow and Thursday, the committee is holding hearings on
	what Republicans consider to be the first pieces of the GOP
	healthcare replacement plan. But the fact is that none of these
	bills will prevent 30 million Americans from losing their
	healthcare coverage. None of them will reduce the chaos in the
	healthcare system that will inevitably result if Republicans
	successfully repeal the Affordable Care Act.
	The fact is, Republicans are already creating uncertainty
	and instability in the individual market. This instability will
	ultimately result in reduced consumer choice, higher premiums,
	and will endanger the health and welfare of millions of
	Americans. In other words, the Republican-made chaos in the
	healthcare system has already begun.
	And, of course, we're seeing the same thing with the
	President's immigration executive orders. I just hope that at
	some point our GOP colleagues join us against what I consider
	reckless and rash actions and oppose President Trump's actions.
	Congressional Republicans continue to ask the American
	people to trust them and they have a plan and that somehow
	everything will be OK. They've repeatedly assured the American
	public that no one will lose coverage with a Republican
	replacement plan, a claim that President Trump and his advisers
	also continue to make.
	But recently released audio at a closed-door meeting from
	the Republican retreat last week confirms that they simply have
	no plan. At that meeting, Republicans admitted that repealing
	the Affordable Care Act could eviscerate coverage for the
	roughly 20 million Americans now covered through state and
	Federal marketplaces as well as those covered under the
	Medicaid expansion. In fact, one Republican member at the
	retreat warned, and I quote: ``We'd better be sure that we're
	prepared to live with the market we've created with repeal.''
	So my Republican colleagues are also trying to claim that
	the Affordable Care Act is already collapsing under its own
	weight and that the replacement plan will, ``rescue the
	American people from ObamaCare.'' Republicans are so scared to
	own the chaos they are causing, they're trying to pretend that
	the law is imploding on its own, which could not be further
	from the truth.
	Americans today have better health coverage and health
	care, thanks to the Affordable Care Act. The law's Medicaid
	expansion has helped improve the quality, accessibility, and
	affordability of health care for millions of Americans. And my
	colleagues would be wise to consider the impact that their
	actions will have on the millions of Americans who are
	currently benefitting from the Affordable Care Act.
	If my Republican colleagues finally took their ideological
	blinders off, they would realize that the Affordable Care Act
	should not be repealed. And I say this because I don't really
	care about the ideology. The fact of the matter is that real
	people are going to be harmed if the Affordable Care Act is
	repealed, and I hope that at some point my Republican
	colleagues will admit that and that we can work together to
	improve the healthcare system.
	I yield back.
	Mr. Murphy. The gentleman yields back.
	And we'll move forward now with our witnesses. I want to
	ask unanimous consent, however, that the members' written
	opening statements be introduced into the record. And, without
	objection, the documents will be entered into the record.
	I'd now like to introduce our five witnesses for today's
	hearing.
	First up, we have Ms. Carolyn Yocom, director of health
	care at the U.S. Government Accountability Office.
	Next we welcome Ms. Ann Maxwell, Assistant Inspector
	General in the Office of Evaluation and Inspections in the U.S.
	Department of Health and Human Services, Office of Inspector
	General.
	Next, we want to welcome Mr. Paul Howard, who is a senior
	fellow and director of health policy at the Manhattan
	Institute.
	As well as Mr. Josh Archambault, senior fellow at The
	Foundation for Government Accountability.
	Last, we welcome Mr. Timothy M. Westmoreland, professor
	from practice, and senior scholar in health law at Georgetown
	University Law Center.
	Welcome all of you. Thank you to all our witnesses for
	being here today, providing testimony before the subcommittee.
	I look forward to hearing from you on this important issue.
	Now, you are aware that the committee is holding an
	investigative hearing and when doing so has the practice of
	taking the testimony under oath.
	Do any of you have any objection to testifying under oath?
	Seeing no objections, we'll move forward.
	The chair then advises you are, under the rules of the
	House Rules Committee, entitled to be advised by counsel. Do
	you desire to be advised by counsel during your testimony
	today? Seeing nothing there too.
	In that case, if you'll please rise, raise your right hand,
	I'll swear you in.
	[Witnesses sworn.]
	Mr. Murphy. Seeing all witnesses answered in the
	affirmative, you are now sworn in and under oath, subject to
	the penalties set forth in Title 18, Section 1001 of the United
	States Code.
	We're going to call upon you each to give a 5-minute
	summary of your statement.
	I don't know if they'll light up in this room yet. Is there
	some lights down there that will go on for them when they are--
	we'll see. Is there something right in front of you? Green
	means keep talking; yellow means finish up; and then red means
	stop. So we want you to keep on time.
	So Ms. Yocom, you may begin. You are recognized for 5
	minutes.

	TESTIMONY OF CAROLYN L. YOCOM, DIRECTOR, HEALTH CARE, U.S.
	GOVERNMENT ACCOUNTABILITY OFFICE; ANN MAXWELL, ASSISTANT
	INSPECTOR GENERAL, OFFICE OF EVALUATION AND INSPECTIONS, OFFICE
	OF INSPECTOR GENERAL, DEPARTMENT OF HEALTH AND HUMAN SERVICES;
	PAUL HOWARD, SENIOR FELLOW, DIRECTOR, HEALTH POLICY, THE
	MANHATTAN INSTITUTE; JOSH ARCHAMBAULT, MPP, SENIOR FELLOW, THE
	FOUNDATION FOR GOVERNMENT ACCOUNTABILITY; AND TIMOTHY M.
	WESTMORELAND, J.D., PROFESSOR FROM PRACTICE, SENIOR SCHOLAR IN
	HEALTH LAW, GEORGETOWN UNIVERSITY LAW CENTER

	TESTIMONY OF CAROLYN L. YOCOM

	Ms. Yocom. Chairman Murphy, Ranking Member DeGette, and
	members of the subcommittee, it is a pleasure to be here today
	to discuss actions needed to prevent improper payments in
	Medicaid.
	Medicaid finances health care for a diverse population,
	including children, adults, people who are elderly, or those
	with disabilities. It also offers a comprehensive set of acute
	and long-term healthcare services.
	Medicaid is one of the largest programs in the Federal
	budget and one of the largest components of State budgets as
	well. In fiscal year 2016, Medicaid covered about 70 million
	people, and Federal expenditures were projected to total about
	$363 billion. Unfortunately, over 10 percent of these
	expenditures, over $36 billion, are estimated to be improper,
	that is, made for treatments or services that were not covered
	by the program, were not medically necessary, or were never
	provided.
	The program's size and diversity make it particularly
	vulnerable to improper payments. By design, Medicaid is a
	Federal-State partnership, and states are the first line of
	defense against improper payments. The states have
	responsibility for screening providers, detecting and
	recovering overpayments, and referring suspected cases of fraud
	and abuse. At the Federal level, CMS supports and oversees
	state and program integrity efforts.
	In 2010, the Patient Protection and Affordable Care Act
	gave CMS and States additional provider and program integrity
	oversight tools. The act also provided millions of low-income
	Americans new options for obtaining health insurance coverage
	through possible expansions of Medicaid or through an exchange,
	a marketplace where eligible individuals may compare and
	purchase health insurance.
	My statement today focuses on four key Medicaid program
	integrity issues that we have identified, steps CMS has taken,
	and the related challenges that the agency and States continue
	to face.
	First, with regard to ensuring that only eligible
	individuals are enrolled in Medicaid, CMS has taken a variety
	of steps to make the Medicaid process more data-driven, yet
	gaps exist in their efforts to ensure the accuracy of Federal
	and State enrollment efforts, including enrollment for those
	who are eligible as a result of the expansion.
	As one example, we found that Federal and selected state-
	based marketplaces approved Federal health insurance coverage
	and subsidies for 9 of 12 fictitious applications made during
	the 2016 special enrollment period.
	Second, efforts to improve oversight of Medicaid managed
	care. CMS has provided states with more guidance on methods of
	identifying improper payments made to providers and has acted
	in response to our recommendations on requirements for states
	to audit managed care organizations and providing States with
	additional audit support, but further actions are needed. In
	particular, encounter data, which allow states and CMS to track
	services received by beneficiaries that are enrolled in managed
	care, are not always available, timely, or reliable.
	Third, CMS has taken steps to strengthen the screening of
	providers. There are new risk-based initiatives for overseeing
	provider checks. And these are important steps, but there are
	additional challenges that remain to ensure that the databases
	check eligibility and that states can share information with
	each other on providers who are ineligible for coverage.
	Lastly, CMS has implemented a number of policies and
	procedures aimed at minimizing duplicate coverage between
	Medicaid and the exchanges. Our work did identify some
	duplicate coverage; and since our report, CMS has started
	conducting checks on duplicate coverage and intends to perform
	these checks at least two times per coverage year. This could
	save Federal and beneficiary dollars, but CMS needs to develop
	this plan a little more broadly and make sure that they are
	assessing the sufficiency of these checks.
	In closing, Medicaid is an important source of health care
	for tens of millions of Americans. Its long-term sustainability
	is critical and requires effective Federal and state oversight.
	Chairman Murphy, Ranking Member DeGette, and members of the
	committee, this concludes my prepared statement. I'd be pleased
	to respond to questions.
	[The prepared statement of Ms. Yocom follows:]



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	Mr. Murphy. Thank you, Ms. Yocom. Now, Ms. Maxwell, you are
	recognized for 5 minutes.

	TESTIMONY OF ANN MAXWELL

	Ms. Maxwell. Thank you. Good morning, Chairman Murphy,
	Ranking Member DeGette, and other distinguished members of the
	subcommittee. Thank you for the opportunity to appear before
	you today to discuss how to protect taxpayers and Medicaid
	patients from fraud, waste, and abuse.
	I first want to give you a sense of what Medicaid fraud
	looks like. It can be very complex and include very different
	kinds of schemes. For example, in one instance, we indicted the
	owners of a network of over 30 nursing homes and assisted
	living facilities that billed for services that patients didn't
	need. In another example, we convicted a doctor for writing
	fake prescriptions for expensive drugs that were then sold on
	the black market or billed to Medicaid. It is exactly these
	type of schemes that highlight the need to protect Medicaid
	against unscrupulous providers who steal, at the expense of
	taxpayers, and put patients at risk.
	Today, I want to highlight actions that we can take to
	better protect Medicaid from these types of fraud schemes and
	other vulnerabilities facing Medicaid. State Medicaid agencies
	and the Centers for Medicare and Medicaid, known as CMS, share
	responsibility for funding as well as protecting Medicaid. And
	we recommend they focus on three straightforward program
	integrity principles: Prevent, detect, and enforce.
	First and foremost, CMS and states must prevent fraud,
	waste, and abuse. Focusing on prevention is critical and
	commonsense, but Medicaid programs sometimes fall short and end
	up chasing after providers to remove them from the program or
	to recover overpayments.
	State Medicaid agencies should know who they are doing
	business with before they give them the green light to start
	billing. To help with that, we recommend that states fully
	implement criminal background checks, conduct site visits, and
	collect accurate data about providers.
	In addition, to prevent incorrectly paying providers, we
	recommend that states learn from past administrative errors and
	proactively update their systems to prevent improper payments.
	Medicaid should only be paying the right amount for the right
	service.
	The next critical program integrity safeguard is the
	ability to detect fraud, waste, and abuse in a timely manner.
	Accurate data is an essential tool for doing this. However, as
	we've just heard and our work shows, national Medicaid data,
	including data from managed care companies, has deficiencies.
	Sophisticated data analytics exist to detect potential fraud,
	to detect patient harm, and even to target oversight, but they
	are ineffective without accurate and timely data.
	Further, without national Medicaid data, States cannot see
	the whole picture. For example, we found providers enrolled in
	one State Medicaid program that had been terminated by another
	state. But without shared data, States had no way of knowing
	this and had to find out the hard way that they had enrolled
	fraudulent and abusive providers.
	Finally, it's imperative to take swift and appropriate
	enforcement action to correct problems as well as to prevent
	future harm.
	Federal and State enforcement efforts have very high return
	on investment, yielding annual recoveries in the billions of
	dollars and imposing criminal penalties on thousands of
	wrongdoers each year. However, states face challenges in taking
	full advantage of their administrative authorities, including
	suspending provider payments and terminating providers, where
	appropriate.
	In addition, State Medicaid Fraud Control Units lack a key
	authority. Currently, these state units can investigate
	allegations of patient abuse that occur within institutions,
	but if that alleged abuse took place in a patient's home or a
	different community setting, they cannot. Medicaid patients
	receiving services in their home should have as many
	protections as those in institutions.
	In closing, our work reveals a number of opportunities to
	improve Medicaid safeguards. In particular, a heightened focus
	on the program integrity principles of prevention, detection,
	and enforcement will help protect Medicaid now and as it
	evolves. Prioritizing program integrity will ensure that
	Medicaid funds are used as intended, to provide needed
	healthcare services and long-term nursing home care for those
	who are in the most need.
	We appreciate the committee's attention to Medicaid program
	integrity. We've seen it strengthened in the last year, thanks
	to the efforts here in Congress, and we hope that our work will
	continue to be a catalyst for continued positive change. Thank
	you.
	[The prepared statement of Ms. Maxwell follows:]





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	Mr. Murphy. Thank you, Ms. Maxwell.
	Now, Mr. Howard, you are recognized for 5 minutes.

	TESTIMONY OF PAUL HOWARD

	Mr. Howard. Thank you. Thank you, Chairman Murphy, Ranking
	Member DeGette, members of the committee. I'd like to thank you
	for the opportunity to testify today about Medicaid program
	oversight and ways we might strengthen the program.
	Medicaid is undoubtedly a vital component of the Nation's
	safety net for low-income and vulnerable populations. But an
	open-ended, automatic Federal matching formula has had vast
	unintended fiscal consequences, both for the States and the
	Federal Government, often crowding out funding for other safety
	net services and supports that might have a bigger impact on
	the measured health of these populations and their prospects
	for continued economic mobility.
	As you know, Medicaid is a hybrid program that, on average,
	pays approximately 62 percent through its Federal match,
	although the upper limit is around 80 and the lowest match is
	50 percent. This encourages States to maximize the drawdown of
	Federal dollars through a number of, sometimes legally
	questionable, funding designs that my colleagues at GAO and HHS
	OIG have just mentioned. This Byzantine funding structure makes
	it extraordinarily difficult for the Federal Government to
	oversee effectively program integrity. It also encourages
	wealthier States to spend more on their programs to draw down
	more Federal dollars. In a 2010 book, Mark Pauly and John
	Grannemann highlighted that the highest quintile of States by
	income spent 90 percent more than the lowest quintile of
	States.
	When it comes to waste, fraud, and abuse, we see New York
	State, which has historically spent much more than other
	states. Even though it has only 6 percent of the Nation's
	population, it has spent approximately 11 percent of total
	Medicaid expenditures and spends 44 percent more per enrollee.
	The OIG also found that over a period of 20 years, the state
	had an improper payment rate for its state developmental
	centers, which the state was overpaid by $15 billion, simply
	because a payment structure that the state and the Federal
	Government agreed to in 1990 was never updated to reflect the
	fact that the state had, in fact, moved the disabled out of the
	developmental centers and into community supports. To the
	state's credit, Governor Cuomo in 2011 created a Medicaid
	redesign team that began to address the program and began first
	by conceding that the program delivered poor value for
	beneficiaries and taxpayers.
	Since then, through a number of far-reaching highly
	aggressive reforms, including capping most of the state's state
	spending outside of the disabled population, lowering that
	spending from 6.2 percent to 4 percent, the state has saved
	hundreds of millions of dollars, shifted an emphasis from
	institutional care to community care, and begun to address some
	of the behavioral components of poor helth that leave these
	populations using disproportionately emergency rooms.
	The right way to view our healthcare dollars is not to say
	that Medicaid has per-unit costs that are very low and, thus,
	it's more efficient. The better question to ask is, are dollars
	that we're automatically spending on Medicaid, might they be
	better purposed to other programs, either an expanded state
	income earned tax credit, supportive housing for the seriously
	mental ill, or any other support or service that might have a
	bigger impact on improving measured health outcomes.
	My colleague Oren Cass last year put out a very important
	study that noted from the period of 1975 to 2012, our spending
	on low-income supports had doubled, but that 90 percent of the
	increase had gone to health care. He estimated that if our
	median spending, either by enrollment or per enrollee, was
	nationalized, we could save as much as $100 billion annually,
	and that is money that could be placed elsewhere in other
	support programs.
	In short, we have thickened one strand of our safety net
	for low-income Americans while neglecting others. If the safety
	net feels threadbare in places, it's because we have encouraged
	the states to overspend on health care. What I'm not saying is
	that Medicaid has no value. There is clear research that shows
	that Medicaid has an extraordinary rate of return on
	investments in maternal health and child health.
	But large rigorous, randomized, controlled experiments like
	the Oregon experiment have, as the chairman said, showed no
	increase in measured health outcomes. Other studies continue to
	show that the social determinants of health have a much bigger
	impact on mortality, obesity, asthma, and mortality from
	cancers like lung cancer, than simply spending more money on
	health insurance per se.
	I'd like to suggest just a few ways we could address this
	disparity in conclusion. We should agree on broader safety net
	goals that hold the states responsible for meeting them in ways
	that are transparent both to the states and the Federal
	Government.
	We should reform the financing incentives of the program to
	ensure that we're not incentivizing states to automatically
	funnel additional Federal dollars to health care. They might
	choose to do so, but we shouldn't effectively bribe them to do
	so.
	And finally, CMS should continue to give more leeway to the
	states in programming, designing, and spending Medicaid
	dollars, including on nonhealth supports.
	I believe that these reforms would serve both conservative
	and liberal ends and should be the focus of the 115th Congress.
	Thank you very much.
	[The prepared statement of Mr. Howard follows:]
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	Mr. Murphy. Thank you, Mr. Howard.
	Mr. Archambault, you are recognized for 5 minutes.

	TESTIMONY OF JOSH ARCHAMBAULT

	Mr. Archambault. Chairman Murphy, Ranking Member DeGette,
	and members of the committee, my name is Josh Archambault and I
	work at the Foundation For Government Accountability, a think
	tank that is active in 37 States, specializing in health and
	welfare reform.
	This morning, I'd like to highlight how the ACA's Medicaid
	expansion has worsened problems for the truly needy, and I'd
	like to start with a video.
	[Video played.]
	Mr. Archambault. Sadly, Skyler's story represents just one
	of nearly 600,000 individuals currently sitting on waiting
	lists for Medicaid services. Individuals with developmental
	disabilities, traumatic brain injuries, and mental health
	disorders who are less likely to receive the needed care now
	that Medicaid has been expanded.
	The ACA expanded Medicaid to a brand new population, which
	consists largely of childless, able-bodied adults who are
	working age, and have only dimmed the hopes further for
	families like Skyler.
	But the problems go much farther beyond situations like
	hers. The Governor of Arkansas, due to expansion costs, has
	proposed nearly a billion dollars in cuts to traditional
	Medicaid, primarily from patients with expensive medical needs,
	the developmentally disabled, and the mentally ill is what he
	said.
	So why is this happening around the country? The new
	ObamaCare expansion population is awarded a higher match rate.
	This funding formula has pernicious unintended consequences.
	Let me explain it this way: If a state needs to balance its
	budget, which they all do need to every year, state officials
	have to turn to Medicaid, because it's the biggest line item,
	also growing faster than revenue. If you want to save one state
	dollar in state funds, on average, you need to cut just over $2
	from the traditional Medicaid population, the aged, the blind,
	the disabled, pregnant women, and children. But if they want to
	save that same $1 in state funds for the expansion population,
	this year they need to cut $20. I know you all can guess who
	faces cuts first, and it's heartbreaking.
	Over enrollment under ObamaCare's Medicaid expansion will
	encourage states into even deeper cuts. Data from 24 of the
	expansion states show that enrollment has been over by 110
	percent on average, more than double initial estimates. The
	cost overruns have been significant. Just to name a few,
	California found themselves 222 percent over budget; Ohio, $4.7
	billion or 87 percent over budget. These enrollment and budget
	trends mean fewer resources for the truly needy.
	Now, history could have warned us of this. Arizona and
	Maine both expanded Medicaid to the same able-bodied childless
	adult population before the ACA, and both had to take measures
	to rein in costs. Arizona had to stop a number of organ
	transplants. Maine capped enrollment, created wait lists. This
	happened even without the lopsided extra funds that follow
	expansion enrollees, which brings me to my last point, concerns
	over eligibility issues.
	FGA's work around the country has found deep systemic
	problems. First, states need to be checking eligibility far
	more frequently; and second, states need to be checking more
	data when they check eligibility. Life changes such as moving
	out of state, getting a raise, or death are going unnoticed for
	far too long, and meanwhile, states continue to cut checks to
	managed care companies for cases that no longer qualify for the
	program.
	My written testimony highlights a couple of those states
	that have had bipartisan success in tackling this waste and
	fraud, but much more is needed. Thank you.
	[The prepared statement of Mr. Archambault follows:]
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	Mr. Murphy. Thank you.
	I now recognize Mr. Westmoreland for 5 minutes.

	TESTIMONY OF TIMOTHY M. WESTMORELAND

	Mr. Westmoreland. Mr. Murphy, Ms. DeGette, and members of
	the committee--subcommittee, thank you for the invitation to
	speak today.
	I take a backseat to no one on program integrity issues in
	the Medicaid program. People who care about Federal programs
	have to work to ensure that Federal funds are well used.
	Program integrity problems are, however, not new. Military
	contractors cheated the Union Army during the Civil War. Where
	money is being spent, whether it be private, State, or Federal,
	and no matter how good the cause, there are bad actors trying
	to steal it.
	Program integrity efforts are especially important in
	Medicaid. This is because billions of dollars are at stake, as
	are the health and well-being of most vulnerable people in
	America. This importance is well illustrated by the fact that
	at the same time the ACA expanded Medicaid coverage, it also
	made significant improvements in program integrity efforts.
	But as important as combatting fraud and abuse in Medicaid
	is, policymakers should keep it in perspective. As big as they
	are, the numbers must be viewed as what they are and as a
	whole.
	First, we should be careful about our terms. Not all of
	what is labeled improper payments, in the vernacular, is fraud
	or even mistaken. Most are appropriate, but simply badly
	documented, and may even be underpayments. And the actual loss
	to the government is much smaller than it may appear. The OIG
	and the GAO footnotes in my testimony cite to this terminology.
	But, as the prepared statements of GAO and OIG witnesses at
	today's hearing have outlined, HHS has already implemented many
	efforts to address the more serious problems of program
	integrity. Some of these efforts are longstanding and some of
	them are just underway, but there are many efforts focused on
	making sure that Medicaid is spending its money well, and they
	are having an effect.
	But I am especially concerned today that policymakers often
	respond to waste, fraud, and abuse with blunt instruments aimed
	at the wrong targets. Any review of the actual Medicaid program
	dollars that were stolen or misspent will reveal that the major
	culprits are unscrupulous providers. Pharmaceutical companies
	that price gouge, equipment suppliers that don't deliver, and
	Medicaid mills of doctors, dentists, and clinics that provide
	unnecessary services if they provide services at all. But all
	too frequently, the political and legislative response is to
	institute cuts or restrictions on beneficiaries and the
	providers who actually care for them.
	There is simply nothing in the recent reviews of program
	integrity that justify the policy proposals that are now on the
	table and before this committee. Reduced/capped Federal funding
	does nothing to improve program integrity, but it does put
	coverage at risk for low-income Americans and shifts the cost
	for the most expensive services to States, localities,
	providers, and charities. This is wrong.
	Program integrity problems are meaningful only when they
	are considered in the context of the many successes of the
	Medicaid program. For example, the Medicaid expansion of the
	ACA means that 11 million people have Medicaid coverage who did
	not have it 3 years ago. The percentage of people without
	insurance in America is at an all-time low of 8.9 percent. The
	burden of uninsured care in hospitals in expansion states is
	down 39 percent, and costs to those states are commensurately
	lower.
	Rural hospitals in expansion states are at half the risk of
	closure of those in nonexpansion states. Community health
	centers are seeing 40 percent more patients. People with
	serious mental illnesses are 30 percent more likely to receive
	services in the expansion states. Services for opioid addiction
	are available to working-age adults, often for the first time.
	The Medicaid expansion of the ACA has fundamentally
	repaired a longstanding mistake in the program. People always
	had to fit into some sort of category, but this categorical
	eligibility has never made sense. Poor women need health
	insurance both before and after they have babies. Poor children
	keep needing health insurance even when they turn 19. Poor
	people with chronic illnesses need health insurance before they
	become disabled. Poor older adults need health insurance when
	they are 64, not suddenly when they are 65.
	The real problems here are poverty and uninsurance. In the
	32 states that have adopted the Medicaid expansion, where
	making this part of the insurance system finally make sense,
	and be fair for vulnerable people. Please do not turn back this
	response.
	Lincoln did not give up on the Civil War because the
	government was sold bad mules. We do not stop buying drugs
	because drugmakers charge fraudulent prices. We punish the
	wrongdoers, correct the price, and get the treatment to the
	people in need. That is what should be done here. Don't reverse
	all this progress by rationalizing that program integrity
	problems demand wholesale legislative changes in Medicaid.
	There are real babies in that bath water.
	Thank you.
	[The prepared statement of Mr. Westmoreland follows:]
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	Mr. Murphy. Thank you.
	I now recognize myself for 5 minutes of questioning.
	Ms. Yocom, your October 2015 report found gaps that limit
	CMS's ability to check for different eligibility groups. Newly
	eligible under expansion--the newly eligible under expansion
	and previously eligible are appropriately matched with Federal
	funds.
	Now, in the Federal facilitated exchange states, CMS will
	not be able to assess the accuracy of eligibility
	determinations until 2018. Does this create the potential for
	improper payments then?
	Ms. Yocom. Well, it certainly creates a lot of uncertainty
	about what is going on with eligibility and whether progress is
	being made. The decision to suspend the estimate of eligibility
	was based on trying to give States time to understand the new
	rules and the new range of matching rates that could be
	applied.
	From our perspective, though, transparency of the process
	and how it is proceeding would not be a bad thing. It would be
	good to know what's going on.
	Mr. Murphy. OK, thank you. In States that determine
	eligibility, GAO found that eight out of the nine States
	audited identified eligibility determination errors and
	improper payments associated with those errors. Are those
	errors reflected in the CMS eligibility determination error
	rate, and does CMS correct these errors, and why or why not?
	Ms. Yocom. Right now, they are not reflected in the
	eligibility rate estimates that CMS puts out. Instead, there is
	a rate that was produced a couple of years ago of 3.1 percent,
	and that's being applied until 2018.
	Mr. Murphy. Why is it applied until 2018?
	Ms. Yocom. I'm not sure of the reasoning for that year. I
	think time, I guess.
	Mr. Murphy. Was that an accurate number? You said that 1
	percent. Is that an accurate number that's being applied?
	Ms. Yocom. It's a number I believe that goes back to 2013
	or 2014.
	Mr. Murphy. Just continuing that on. So this relates to my
	next question. I've heard that CMS has put a freeze on
	measuring eligibility determinations for Medicaid. What does
	this freeze mean, and how will we will measure eligibility
	errors and improper payments?
	Ms. Yocom. It means that we're relying on an error rate
	that's about 3 or 4 years old, yes, and that we don't right now
	know what's going on with the eligibility determinations.
	Mr. Murphy. So we're using old data that's not accurate
	anymore. We're asking a question, what's the error rate? You're
	saying, we don't know, so we're going to use a number from a
	few years ago?
	Ms. Yocom. That is correct.
	Mr. Murphy. OK. Now, so if a parent asks their child, how
	did you do on your report card, and they say, got all As, it
	could be accurate, except if you're maybe dealing with a high
	school senior that you didn't ask specifically and say, I'm
	just assuming the grades I got in third grade, I'm just
	continuing to carry those over year to year, so I'm a
	valedictorian. Now, that doesn't make sense, of course, but
	you're saying the same thing applies here?
	Ms. Yocom. Yes. Right now, they are not publishing or I
	believe even calculating an improper payment rate right now.
	They are working with the states on a state-by-state basis.
	Mr. Murphy. So when people make a statement everything is
	fine, these are staying pretty stable, we just have inaccurate
	data we're working with. See, we want to fix this, but we don't
	have accurate data to help us know how big the problem is. Is
	that correct?
	Ms. Yocom. At this point, we don't know.
	Mr. Murphy. OK. Mr. Archambault, since we can't measure the
	actual eligibility improper payments due to this freeze that's
	been imposed in the past administration, let's try and get an
	idea of the types of eligibility errors and how much they cost
	the Federal Government.
	Do you have any examples from your work of improper
	eligibility determinations and how that translates to improper
	spending?
	Mr. Archambault. Sure. There's a couple of states that I
	highlight in my written testimony.
	In Illinois, in 2012, they passed a law to hire an outside
	third-party vendor to look at eligibility errors. And their
	track record has actually been quite impressive. In their first
	year, they found about 300,000 individuals who are ineligible
	for Medicaid; and in their second year, they actually found
	400,000 individuals who were ineligible for their program.
	And it runs the gamut from individuals who had passed away
	in the 1980s who were still on their program to individuals who
	were simply moving out of state, got a raise, didn't report
	that information. The State of Arkansas recently also did a
	review of their Medicaid program and found things like 43,000
	individuals who didn't live in the state who remained on their
	Medicaid program, 7,000 of who had never lived in the state.
	Mr. Murphy. Are those people who are making Medicaid
	claims, do we know?
	Mr. Archambault. So in many cases, this is why it's so
	important. As states have moved towards the managed care
	environment, it almost doesn't matter. States continue to cut a
	check to managed care companies regardless of whether those
	individuals are showing up to the doctor or not. That's why
	this is even more important now that states have moved in that
	direction.
	Mr. Murphy. So it's hundreds of thousands of people are in
	this category that they're still getting paid even though
	they're not alive, in the state, or getting care.
	Mr. Archambault. Correct. In some cases, it's just waste.
	If somebody moves and is still Medicaid eligible, we just want
	to make sure two States aren't paying two different managed
	care companies for their care. In other cases, it's outright
	fraud.
	Mr. Murphy. Do we have a total dollar value for that?
	Mr. Archambault. When you're not measuring, it's very hard
	to see. But I will say that my written testimony goes through
	and documents a number of State audits that show eligibility is
	a huge issue when it comes to applications.
	Mr. Murphy. Thank you. My time is expired.
	Ms. DeGette, 5 minutes.
	Ms. DeGette. Thank you, Mr. Chairman.
	Ms. Maxwell, you talked about the complex investigations
	that your agency is undertaking into some of these Medicaid
	fraud issues. These investigations involve large numbers of
	personnel and also technical support. Is that right? They're
	complex investigations, correct?
	Ms. Maxwell. Absolutely. We partner with the State Medicaid
	fraud control units.
	Ms. DeGette. And do you know approximately how many people
	at your agency are involved in these investigations?
	Ms. Maxwell. Well, in some respects, we all are. So even
	though the Inspector General has a cadre of inspectors, we're
	also auditors, evaluators, lawyers, and all of us contribute to
	the fraud-fighting efforts of the Inspector General's Office.
	Ms. DeGette. OK. Are you familiar with the executive order
	that President Trump issued on January 22nd, in which he said
	that, ``No vacant positions existing at noon on January 22nd,
	2017, may be filled and no new positions may be created except
	in limited circumstances''?
	Ms. Maxwell. I am familiar with that.
	Ms. DeGette. Has your agency determined will that freeze
	the hiring at your agency?
	Ms. Maxwell. Given that it's quite new, there hasn't been
	an assessment yet of how that will affect the OIG, but I can
	tell you, as you have pointed out, that the work that we do
	does rely on personnel. We use sophisticated data analytics.
	Ms. DeGette. Let me stop you then. If the personnel at your
	agency, the hiring was frozen, what would that do to your
	ongoing fraud investigations?
	Ms. Maxwell. We would need to double down and do as much as
	we could with the resources that we have.
	Ms. DeGette. Would it impact those investigations?
	Ms. Maxwell. Absolutely. We need the personnel to analyze
	the data in order to fight fraud most effectively.
	Ms. DeGette. Thank you.
	Now, I wanted to ask you a quick question, Mr. Archambault,
	and the question I wanted to ask you, you showed that really
	heartrending tape about the young girl who was on a waiting
	list for quite some length of time for the care she needed. She
	was in Arkansas, is that correct?
	Mr. Archambault. Correct.
	Ms. DeGette. And the Governors of the States decide whether
	they are going to use that money for cases like that or
	others--they decide how they're going to use the Medicaid money
	that comes to their states. Isn't that correct?
	Mr. Archambault. Within limits.
	Ms. DeGette. Yes.
	Mr. Archambault. The Federal Government sets the guidelines
	by which they have to----
	Ms. DeGette. But the Governor of Arkansas decided where
	that money would be spent and decided not to put it into that
	kind of a program. Is that right?
	Mr. Archambault. Again, the question and point that I am
	trying to make----
	Ms. DeGette. No. My question is yes or no.
	Mr. Archambault. As far as the wait list is concerned?
	Ms. DeGette. The Governor decided how to allocate that
	money. Is that correct?
	Mr. Archambault. They have funds that come in, and they can
	decide to invest in buying down a wait list.
	Ms. DeGette. And that's the Governor that decides that.
	Mr. Archambault. In a nonexpansion state, we have seen
	states buy down their wait list.
	Ms. DeGette. OK, thank you very much. Yes or no would have
	worked.
	I want to ask you, Mr. Westmoreland, a couple questions.
	Now, uncompensated care costs are what hospitals pay for
	patients that cannot pay their bills. Is that correct?
	Mr. Westmoreland. Yes.
	Ms. DeGette. Who bears the cost of uncompensated care?
	Mr. Westmoreland. It's a complicated question, but the
	direct costs are usually borne by state and municipal
	governments, because they pay for public general hospitals.
	Ms. DeGette. And then where do they get their money from?
	Mr. Westmoreland. By and large, they get their money from
	taxpayers.
	Ms. DeGette. OK. Now, I talked in my opening statement
	about how the ACA Medicaid expansion is driving uncompensated
	care costs lower. Can you briefly explain why that's correct?
	Mr. Westmoreland. Yes. If a hospital is dealing with people
	who have no source of insurance, it, by and large, can provide
	the services and then chase them down. And people oftentimes
	have no money or declare bankruptcy.
	In the instance in which they are insured, either through
	the exchanges or through the Medicaid program, then the
	hospital can turn to a third-party payer and they are no longer
	uncompensated care if they can get some payment from those
	insurances or from Medicaid.
	Ms. DeGette. OK. Now, some of the States that did not
	expand the Medicaid component of the ACA have not experienced
	as large a reduction in uncompensated care costs. Is that
	correct?
	Mr. Westmoreland. Yes.
	Ms. DeGette. And why is that?
	Mr. Westmoreland. Those states are still dealing with the
	same number of people without health insurance who are low
	income. The states who have expanded have a source to turn to,
	their Medicaid program, which is in the Medicaid expansion
	situation, largely paid for by the Federal Government.
	Ms. DeGette. Great.
	Thank you. I yield back.
	Mr. Murphy. The gentlelady yields back.
	I now recognize Mr. Barton for 5 minutes.
	Mr. Barton. Well thank you, Mr. Chairman. I am glad to be a
	part of the first oversight hearing. I'm glad we have some new
	blood on the subcommittee. We have a new doctor on the
	Democratic side. I'm glad to have him. We have Dr. Burgess on
	our side. So when the bloodletting begins, we'll have two
	doctors that can take care of us and keep us going.
	I want to focus the panel's attention on a few numbers. The
	first number is 20 trillion. The second number is 325 million.
	Our national debt is about $20 trillion, give or take a
	trillion or two. We have around 325 million Americans. If you
	divide 325 million into 20 trillion, you get about 66, 67
	thousand dollars that every American owes of the national debt.
	Our hearing memo says there's 70 million people that are
	covered by Medicaid. You subtract the 70 million people covered
	by Medicaid from 325 million citizens, it means there are 250
	million Americans that owe not only their share of the national
	debt but also the $66,000, $67,000 times 70 million that the
	Medicaid recipients owe, because, by definition, Medicaid
	recipients are below the poverty level and they can't pay it
	back.
	Those are big numbers. We're spending at the Federal level
	about $350 billion a year, and the states are adding another
	$150 billion. So we're spending about $500 billion a year to
	provide health care for low-income Americans. That may or may
	not be sustainable, but we know that we can't sustain adding
	half a trillion to a trillion dollars every year to the
	national debt.
	We all want to keep Medicaid, but we want to improve it,
	and that's what this oversight subcommittee is looking at. How
	do we improve Medicaid so that we get more bang for the buck,
	real health care to real people that need it, and yet make it
	affordable so that taxpayers who are funding it can continue to
	fund it.
	Mr. Howard, you talked about, in your opening statement, a
	little bit about New York, with 6 percent of the population,
	getting 11 percent of the Medicaid dollars. Do you want to
	explain to the subcommittee why that's so or would you like for
	me to explain it?
	Mr. Howard. Thank you, Congressman.
	There is clearly an incentive, given the open-ended Federal
	match, for wealthier states, both because of ideology and
	simply because they have a larger tax base, to draw down more
	Federal dollars. It also inhibits attempts to pursue program
	efficiency.
	When you think of a state like New York, let's say New York
	wanted to design a more efficient primary care program that
	saved a million dollars. Because of the 50 percent Federal
	match, it would have to cut spending by $2 million. So there's
	a ratchet inherent in the open-ended Federal match that tends
	to bid up state spending for the states that have the funds to
	do it, but makes it very hard to turn the ratchet around and
	correct it and find more efficient ways to deliver care. And I
	think that's a challenge facing the Nation, not just, of
	course, for Medicaid, but for private insurance and Medicare as
	well.
	In an environment where there is no incentive for providers
	to look outside the box, new ways to deliver care more
	efficiently, more cost-effectively, they simply don't pursue
	those areas.
	I think some of the changes that Governor Cuomo has
	instituted in New York, if they were done by a Republican
	administration, I think we would have heard howls of outrage;
	but because it is a Democratic administration, you capped
	spending, you ended automatic payment increases. You did a lot
	of things that are very ``progressive,'' but are really
	nonpartisan ways to improve program efficiency. And I think
	that other states and the Federal Government should look at
	ways to give states more program efficiency and better
	incentives.
	Mr. Barton. Do you think it would be appropriate to look at
	the way the formula allocates Medicaid dollars per se to try to
	harmonize it with current low-income populations across the
	Nation?
	Mr. Howard. I think that's an important tool. I think
	states would also really appreciate the opportunity to be able
	to spend Medicaid dollars on non-health-related supports that
	might actually--in terms of accessing other services--that
	might make those populations both more compliant with care and
	in better health in the long term. I think they would be very
	open to that.
	Mr. Barton. My time is about to expire. I'm going to have
	some questions for the record dealing with block-granting
	programs back to the states.
	I do want to welcome Mr. Westmoreland back to the
	committee. Nobody yet has admitted it, but at one point in
	time, he was one of the brain trusts on the minority side and
	helped Mr. Waxman and Mr. Dingell actually create the
	Affordable Care Act. And we appreciate your expertise coming
	back before the committee.
	Mr. Westmoreland. It's nice to be back in 2123.
	Mr. Barton. I yield back, Mr. Chairman.
	Mr. Murphy. We now recognize Mr. Pallone for 5 minutes.
	Mr. Pallone. Thank you, Mr. Chairman.
	My questions are to Mr. Westmoreland. Mr. Westmoreland, Mr.
	Archambault made some claims illustrated with a video regarding
	one individual's experience specifically with the Arkansas
	Medicaid program's home and community-based services waiting
	list. And I'm concerned that Mr. Archambault in his testimony
	attributed a causal relationship between Medicaid expansion and
	HCBS waiting lists and that somehow the Medicaid expansion he
	claims exacerbates or causes these waiting lists. I don't
	believe that to be true. I don't think that the facts show that
	it's true. I think the wait lists are a result of state
	decisions, and cutting or capping or block-granting Medicaid
	will only make the situation worse.
	And I like to use anecdotes. I remember a couple years ago
	I went to a conference in Houston with Mr. Green. I think Mr.
	Burgess was there too. And in between the health conference, I
	went over to the Texas Children's Hospital at the Medical
	Center, and I talked to the officials there. It was a beautiful
	place with this beautiful lobby, but literally people,
	particularly mothers with their children, were just literally
	camped out in the lobby of this place that looked like a hotel.
	And I asked, why are they all here? It was because they
	couldn't access the emergency room because there were so many
	people that they were literally waiting for hours to use the
	emergency room with their kids. So this notion that somehow the
	Medicaid expansion is causing the waiting list--I think it's
	just the opposite. I think that it's the lack of Medicaid
	expansion in these states that's causing the problems in most
	situations.
	In any case, let me just ask you some questions, Mr.
	Westmoreland. Can you provide some background on the HCBS
	waivers in the Medicaid program? Isn't it true that the
	decision to have an HCBS waiting list is a state flexibility;
	that is, they are a direct result of state choices on the
	design of their Medicaid programs and the amount of resources
	states make available to provide HCBS?
	Mr. Westmoreland. Yes. There's no restriction at the
	Federal level on how much a state may turn to HCBS instead of
	to traditional institutional services. It's a state decision.
	Mr. Pallone. So, if I can just summarize, states decide
	whether to limit their HCBS waivers to a defined number of
	slots and to create waiting lists once those slots are filled,
	and CMS allows states to increase or decrease the number of
	slots as they wish. And isn't it actually true that, in the
	case of Arkansas, the Federal Government would be willing to
	pay 69 percent of the cost of care if the state chose to
	increase the number of its slots and that, until January 1 of
	this year, the state was spending none of its own funds on the
	expansion population?
	Mr. Westmoreland. I have to admit I don't know the
	specifics of the last part of your question, but other than
	that, I would say yes. It's entirely a state decision, and
	Arkansas has made the decision of the size of the waiver.
	Mr. Pallone. And isn't it also true that 12 states and the
	District of Columbia have no waiting lists at all and that the
	overwhelming majority of those states that have no waiting
	lists have actually also expanded Medicaid?
	Mr. Westmoreland. I believe so, yes, sir.
	Mr. Pallone. Isn't it also true that the two states with
	the longest waiting lists are Texas and Florida, which have not
	expanded Medicaid--of course, I use my example, my anecdotal
	evidence there at the Children's Hospital at the Texas Medical
	Center--but these are the two states that have the longest
	waiting lists?
	Mr. Westmoreland. I know that Texas and Florida have not
	expanded. I did not know that they were the longest waiting
	lists. I know that they have waiting lists.
	Mr. Pallone. My problem is that I just think there's no
	evidence that states are choosing to expand Medicaid or keep
	their expansions at the expense of vulnerable people waiting
	for HCBS and that examining state choices on both expansion and
	HCBS waivers actually leads to a contrary conclusion. If
	anything, all the Federal expansion dollars only strengthen the
	Arkansas economy and revenues and improve the finances of
	providers by reducing uncompensated care, as has been shown in
	multiple states around the Nation. I think it just makes basic
	sense. If states expand Medicaid, they're getting 100 percent
	Federal dollars, and they have a lot more money to care for
	people; it's only going to be natural that they have more money
	to spend on people who are eligible. So this notion that
	somehow, by cutting the expansion or eliminating the expansion,
	cutting Medicaid, getting rid of Medicaid, there's no way in
	the world that that's going to help the situation with people
	who are trying to seek care. They're just going to end up in an
	emergency room. They're going to be waiting for the emergency
	room. They're not going to get preventative care. They're not
	going to see a doctor. None of it makes sense. If you wanted to
	comment.
	Mr. Westmoreland. If I may, Mr. Pallone, I'd like to
	juxtapose your comment with that of Chairman Barton, who points
	out that possibly there will be proposals to block-grant and
	cap the Federal funding. I have to say that, if the Congress
	adopts capped funding for Medicaid, we're going to see more,
	not fewer, waiting lists. Less funding and the loss of the
	individual entitlement services is exactly what's underlying
	the story in that video. And if the program is capped and
	Federal participation is limited, it will only get worse, not
	better.
	Mr. Pallone. Thank you.
	Mr. Murphy. Now I recognize the new vice chairman of the
	subcommittee, Mr. Griffith of Virginia.
	Mr. Griffith. Thank you, Mr. Chairman.
	Mr. Archambault, get out your money. Are you ready? All
	right. So my understanding of your testimony was that you were,
	in fact, saying that the states have to make choices with their
	limited resources, and that the Federal Government under the
	ACA is going to lower its Medicaid expansion money down to 90
	percent. As states find themselves with larger burdens than was
	anticipated when they expanded Medicaid, they have to make
	decisions on where it's cut. And we have created through the
	ACA--and I say ``we'' loosely because I wasn't here when they
	voted on that--but the Congress and the government created a
	situation where the states are rewarded for cutting traditional
	Medicaid, which deals mostly with children and people who are
	in greater need, and that, because of that disincentive or that
	incentive to spend it on the new folks, the newly found under
	Medicaid, under the new categories, we create the situation
	where states are having to make a decision as to whether they
	quicken the shortage on the waivers, get rid of those waivers
	as fast as they can, or whether they spend that money somewhere
	else. Was my understanding correct?
	Mr. Archambault. Correct, Congressman. There's both direct
	and indirect outcomes as related to expansion. And my point is
	that we are not fulfilling the promises to the most vulnerable
	in our society, wait list or not, but we are making new
	promises to an able-bodied population that does not qualify for
	long-term welfare benefits in any other place. And states are
	being put in a situation where they're having to make very
	tough decisions and making cuts in reimbursement rates that
	directly impact those with developmental disabilities, those in
	nursing homes. The access and quality questions that have
	surrounded Medicaid for decades will only get worse for the
	truly needy.
	Mr. Griffith. And so what you're saying is we need to pay
	attention to that, and we need to make sure that we have
	incentives that encourage people to take care of the truly
	needy and the young. And maybe we need to refigure that formula
	out. That is what you're saying?
	Mr. Archambault. Absolutely. I think as part of the repeal-
	and-replace discussion, as we're talking about changing
	Medicaid going forward, it absolutely must be on the table. And
	we would strongly recommend looking at freezing new enrollment
	in expansion states and not allowing other states to expand so
	you can address this underlying issue of refocusing programs on
	the truly needy.
	Mr. Griffith. We have a real habit of doing that.
	Mr. Howard, I want to ask you, and the reason I say ``get
	your money out'' is because I thought the $20 bill versus the
	$2 was very instructive, Mr. Archambault.
	Mr. Howard, you touched on this, but you didn't get into
	detail. We have a situation where, even in traditional
	Medicaid, we have rewarded states that play games. Virginia
	elected not to have a sick tax. That's what it was called when
	there was a proposal a number of years ago, a couple decades
	ago, to start taxing the beds of the sick so that they could
	create that money and then put it into Medicaid and then get
	matching money from the Federal Government. Even though we were
	at a fairly low match, that would have given us those $2 from
	money that we collected from sick people. But many states have
	come up with these various schemes to get money by claiming
	that they're charging more. And what they're really doing is
	creating some kind of a sick tax scheme. And shouldn't we put a
	stop to that--over time? I'm not saying we have to get rid of
	it immediately. But shouldn't we over time be trying to get rid
	of that so that everybody knows what exactly they're getting
	and not having to charge sick people money so we can get more
	money for Medicaid?
	Mr. Howard. The Federal Government has capped the amount of
	provider taxes that states are able to use, but still we're
	talking a very significant amount of money. I think the last
	estimate from GAO was about $25 billion. Many, many states use
	these provider taxes. They use enhanced payment rates for
	state-owned facilities, intergovernmental transfers to draw
	down and raise their effective Federal match.
	Mr. Griffith. And while they may be legal, there's some
	real ethical questions about that, isn't there?
	Mr. Howard. Well, it's a real issue of program efficiency,
	absolutely.
	Mr. Griffith. OK. Because I want to move on to something
	else. I heard somebody earlier say that ObamaCare wasn't
	collapsing, and that was some myth. I got to tell you: We have
	got all kinds of numbers. Twenty-five percent average increase.
	Nearly a third of U.S. counties have only one insurer. A
	trillion in new taxes. 4.7 million Americans had to change
	their healthcare plan because they got kicked off of the plan
	that they liked. All kinds of problems out there.
	But you know what I find instructive is anecdotal. It
	happened to me yesterday twice. After church, a group of us
	generally go to lunch. I try to stay out of politics at lunch,
	and a discussion broke out at the other end of the table I was
	not involved in where they were talking about, what do we do as
	we go forward? And one fellow said: Look, as a Christian, I
	don't mind paying some more money, but when my insurance rates
	for my family have gone from to $450, $500, to $1,250 a year
	and I'm getting less insurance, it's hurting my family. And
	that's a problem.
	Later that evening, at a small group gathering of different
	people, there was a big discussion about whether or not a
	family could afford to justify spending money for their
	daughter, who had the flu--several families had been ravaged by
	flu over the last couple of weeks--because they, in order to
	afford health insurance, they had gotten such a high
	deductible; it was going to cost them $75 to get Tamiflu. And
	they were debating whether or not they should do that if their
	other kids got it and what they should do as they go forward.
	These are real-life examples of how ObamaCare is, in fact,
	failing the American people.
	I yield back.
	Mr. Murphy. The gentleman yields back.
	I now recognize Ms. Castor for 5 minutes.
	Ms. Castor. Thank you, Mr. Chairman.
	Well, thank goodness for Medicaid in America, especially
	back home in Florida. 3.6 million Floridians rely on Medicaid
	for their health services. A lot of my neighbors in skilled
	nursing, Alzheimer's patients, Medicaid is the lifeline for
	these families. Not to mention, 50 percent of children in
	Florida rely on Medicaid to go see the pediatrician and get
	their checkups, along with the State Children's Health
	Insurance Program. And Florida didn't expand Medicaid, so that
	3.6 million number are really our neighbors in nursing home or
	community-based care or children or my neighbors with
	disabilities. And based upon what they tell me, Medicaid is
	working for them. It works.
	Medicaid spending growth is lower than private health
	insurance. It's lower than Medicare. That's because sometimes
	states try to get by on the cheap in paying providers. That's
	one place for reform, that we could improve access if we would
	pay our providers a little bit more and do better there.
	Medicaid is flexible. I've watched in Florida as they've moved
	to a managed care system. I have questions about that, but that
	was a decision of the state. They had all that flexibility
	under Medicaid. They've also began a change toward more home
	and community-based services to help keep older folks out of
	skilled nursing, which can be very expensive.
	But we have to remain mindful about the fiscal cost and
	fiscal responsibility. That's why, in the Affordable Care Act,
	we passed a lot of new program-integrity provisions to
	strengthen Medicaid. The most important provisions involved a
	shift from the traditional pay-and-chase model to a
	preventative approach by keeping fraudulent suppliers out of
	the program before they can commit fraud. All participating
	providers in Medicaid and CHIP programs must be screened upon
	enrollment and revalidated every 5 years. So think about that
	as you move toward repeal of the Affordable Care Act. Why would
	we want to repeal these important program-integrity provisions
	relating to Medicaid? I don't think that's the path that we all
	want to go down.
	What this is, though, I think the real fear is that this
	whole terminology of block grants and per-capita caps is simply
	a stalking horse for less care for my neighbors back in Florida
	and all Americans. For every Alzheimer's patient, for every
	child that needs to go see the pediatrician, I want folks to be
	aware of what block grants and per-capita caps means because it
	sounds good. But what that means is devastation and sabotage to
	the Medicaid program.
	Mr. Westmoreland, describe the impact on the delivery of
	healthcare services to Americans if this approach is taken,
	block grants and per-capita caps.
	Mr. Westmoreland. As I understand some of the proposals
	that are Medicaid, the basic point is to limit Federal
	participation and the state costs of running the Medicaid
	program. As healthcare costs grow over time, the states will be
	left holding the bag for those increased state costs, for
	Medicaid costs. And as changes occur in the population, as the
	baby boomer demographic enters into the population, as more and
	more services are provided for people with disabilities, as
	prescription drug costs go up, the increased cost over time
	will not be matched by the Federal Government. States will be
	left holding the bag.
	Ms. Castor. And isn't it interesting that some Republican
	Governors believe this approach will have disastrous
	consequences for their ability to care for their older
	neighbors, neighbors with disabilities, and children. For
	example, a Republican Governor from Massachusetts, in a letter
	to Congressman Kevin McCarthy, stated: We are very concerned
	that a shift to block grants or per-capita caps for Medicaid
	would remove flexibility from states as the result of reduced
	Federal funding. States would most likely make decisions based
	mainly on fiscal reasons rather than the healthcare needs of
	vulnerable populations and the stability of the insurance
	market.
	Could you elaborate a little more what this would mean? In
	my state, they may not raise taxes. That's the choice, though,
	isn't it? Raise taxes to support our neighbors or cut?
	Mr. Westmoreland. If Federal participation is limited in
	these fashions, it's the only way that would respond to Mr.
	Barton's concerns about deficit reduction. If Federal
	participation is limited in that fashion, then the states will
	have a choice either of reducing the number of people that they
	serve, cutting back and rationing the services to those people,
	or raising state and local tax.
	Ms. Castor. And, Mr. Chairman, thank you.
	I'd like to ask unanimous consent to enter into the record,
	if anyone is interested in learning more about Medicaid, March
	of Dimes and a number of experts are having a lunch-provided
	forum tomorrow--or, excuse me, Thursday, February 2, 12:30 to
	1:30, right here in Rayburn in the Sam Johnson Room, Rayburn
	2020, to learn why Medicaid matters to kids. I encourage you
	all to attend.
	Mr. Murphy. Could you send a copy over to me? Thank you.
	I now recognize Dr. Burgess for 5 minutes.
	Mr. Burgess. Thank you, Mr. Chairman.
	I want to thank our panelists for being here today. Very,
	very interesting discussion. Certainly a very timely
	discussion.
	Ms. Yocom, let me ask you, Chairman Murphy was, I think,
	directing some of his questions about improper eligibility
	determinations, and one of the things that has concerned me for
	some time is the issue of third-party liability, a Medicaid
	patient who has actually other insurance but also has Medicaid.
	And my understanding is what happens is sometimes it's hard to
	collect from the party of the first part, the commercial
	insurer. Medicaid is more straightforward, so you end up in a
	situation where the person who should be responsible for the
	bill, the insurance company who has been contracted to provide
	care for that patient, actually is inadvertently kind of let
	out of the equation because it just becomes easier to chase the
	dollars in the Medicaid system. Is that a real phenomenon?
	Ms. Yocom. It is. We did some work, I believe in part for
	your office, that took a look at third-party liability on some
	of the issues that the Medicaid program encountered. Some of
	the issues are about information systems and just being aware
	of the coverage, but then, even within that, it's about the
	interaction between the State Medicaid programs and the
	insurance companies and being able to assert the fact that they
	should be paying first.
	Mr. Burgess. So to what extent are the states able to
	address the underpayments by commercial insurers and the
	overpayments by Medicaid?
	Ms. Yocom. We did make some recommendations to CMS to
	provide additional support and data on these issues. I would
	need to check to see whether or not they had been implemented
	and a little more about the specific.
	Mr. Burgess. I'm given to understand that this is not a
	trivial problem, that there are a significant number of dollars
	involved. Is that correct?
	Ms. Yocom. Yes, yes.
	Mr. Burgess. And I think it's safe to say that it does vary
	from state to state. Some states do better than others. So you,
	if I recall correctly, back in the mid-2000s, in 2005, 2006,
	2007, you had created a list of states where the percentages of
	dollars left behind were attributed to each state. And there
	were some significant differences. I think Texas was kind of
	middle of the pack. Iowa did very well. Some other states did
	very poorly. Do I recall that correctly?
	Ms. Yocom. I believe that's right. And I think some of it
	is that the more health plans involved, I think the harder it
	can be. Some of the states that had a smaller group of insurers
	to work with I think were sometimes able to establish better
	relationships.
	Mr. Burgess. Well, it just gets to the point. I mean, that
	was a GAO report of over 10 years ago. Is this problem fixable?
	Is it worth fixing?
	Ms. Yocom. I think there have been some fixes done, but I'm
	not sure I remember well enough to tell you much more than that
	right now.
	Mr. Burgess. OK. I'll just let the subcommittee know there
	is some very insightful legislation coming on this subject, and
	I hope people will join me on that.
	Ms. Maxwell, let me to ask you: Just staying on the third-
	party liability issue, you've discussed Medicaid overpayments
	in regard to providers not reconciling credit balances with the
	state. Is that correct?
	Ms. Maxwell. That's correct.
	Mr. Burgess. So it stands to reason, since states are not
	active in tracking down third-party liability claims, they're
	aware of beneficiaries with overlapping coverage that might
	receive services that are unintentionally paid for both by
	third parties and the State Medicaid plan. Is that a reasonable
	assumption?
	Ms. Maxwell. Correct.
	Mr. Burgess. Is it possible for states to take advantage of
	in-house data like this to approach practices that might not
	have reconciled their credit balances?
	Ms. Maxwell. Yes. That's what our recommendation focuses
	on: the ability of states to identify those overpayments and
	then recover them. In the report, we identified $25 million in
	which credit balances had not been reconciled and states had
	not been able----
	Mr. Burgess. State that number again.
	Ms. Maxwell. $25 million for, I believe it was eight
	states.
	Mr. Burgess. But it is not an inconsequential number. It is
	a number worthy of our attention, even though we deal with big
	numbers up here. Mr. Barton talked about trillions of dollars
	and dazzled everybody with that. But even focusing on these
	amounts is important, is it not?
	Ms. Maxwell. Absolutely. From the Office of the Inspector
	General's perspective, every dollar counts. Every dollar that
	is overpaid or goes to a fraudulent provider means there's a
	dollar less to provide services.
	Mr. Burgess. Thank you.
	And, Mr. Chairman, I just want to point out that, as of 10
	days ago or so, the day before inauguration, we had roundtables
	with the Governors up here, both on the Senate side and the
	House side, and it was one of the most impactful days that I
	have seen up here. There was so much energy and enthusiasm on
	the part of the Governors who want reforms in their system.
	They want this to be right. They want to deliver the care to
	their citizens. There's not unanimity of opinion whether it's a
	block grant or beneficiary allotment, a lot of discussion
	around the moving parts, but I will just tell you I was very
	encouraged at the level of involvement of our Governors in this
	issue.
	Thank you. I yield back.
	Mr. Murphy. Thank you.
	I now recognize the gentleman from New York, Mr. Tonko, for
	5 minutes.
	Mr. Tonko. Thank you. Thank you, Mr. Chair, and welcome to
	our panelists.
	Mr. Archambault, I know that, in your testimony, you
	addressed the waiting list and the corresponding decline of
	services or inability of services. I know that our ranker,
	Representative Pallone, asked you a bit about this or the panel
	about it, and I just want to dig a little deeper into a claim
	that you did make where you insinuate that expanding Medicaid
	will lead to the 600,000 individuals on Medicaid waiting lists
	being less likely to receive services. First of all, can you
	explain what you mean by Medicaid waiting lists? I assume
	you're referring to the waiting list that some states maintain
	to receive home and community-based waiver services. Is that
	correct?
	Mr. Archambault. Correct.
	Mr. Tonko. So I would ask, do you know which state has the
	longest waiting list for home and community-based services?
	Mr. Archambault. It's usually related to population. You're
	going to have more people who are usually eligible for the
	program, but there's not a straight correlation that way.
	Mr. Tonko. Well, my information tells me that Texas is that
	list that has the longest waiting list. It's at some 163,000-
	plus people in 2014. And do you know how Texas' waiting list,
	of that 163,000, has been affected by the expansion of
	Medicaid?
	Mr. Archambault. The data usually is a year or two delayed,
	so it's hard to draw a direct correlation. I would just point
	out that, if we want to make sure that we're fulfilling the
	promises to the most vulnerable, I think getting lost in this
	discussion is that Medicaid is crowding out spending----
	Mr. Tonko. Well----
	Mr. Archambault [continuing]. Of all kinds, whether it's
	education, whether it's public safety or infrastructure, or the
	waiting list. I don't want to----
	Mr. Tonko. I would suggest it depends on what states are
	doing with their Medicaid program, but Texas has not expanded
	its Medicaid, so that was the answer that I would share with
	you.
	It's very interesting now that we look at some of these
	data. Mr. Archambault, do you know which state has the second
	longest waiting list for home and community-based services?
	Mr. Archambault. Again, it depends on the population by
	category, and there's no correlation between expansion or not.
	The concern is even states that have expanded also have waiting
	lists. So, for me, it's about priorities. And for state
	lawmakers, they are being put in a very tough position where
	they're not able to help families like Skylar's, and that's
	deeply concerning to me.
	Mr. Tonko. Well, Florida is the second in that list of
	Medicaid numbers, and they have not expanded with their
	Medicaid issue. And, you know, I think we can sense a pattern
	here, so we need to cut to the chase. Fully 61 percent of those
	individuals on waiting lists for home and community-based
	services live in the 19 states that have not expanded Medicaid.
	My home State of New York, one of the most populated in the
	country and one which has enthusiastically expanded Medicaid,
	maintains a waiting list of zero individuals for HCBS waiver
	services and a track record that has really begun to be very
	favorable about per-capita costs for Medicaid. So it's
	difficult for me to see the real-world correlation that is
	addressed in testimony like yours where expanding Medicaid and
	waiting lists for home--where there's a contrast or a choice
	that has to be made between expanding Medicaid or waiting lists
	that grow for home and community-based services. Do you have
	any actual evidence at all that speaks to that expansion and
	any correlation with HCBS?
	Mr. Archambault. So, again, the point is that, when you
	talk to Governors and state policymakers, they are being put in
	the position where, in Arkansas, they have been trying for
	years to address issues like families like Skylar. Now they are
	having to----
	Mr. Tonko. Just yes or no. Is there any correlation that
	you can cite? And I'll remind you: you're under oath. So is
	there any correlation that you can cite?
	Mr. Archambault. What I will say is there is no
	correlation. It's not a yes-or-no question.
	Mr. Tonko. So the answer to my question is no.
	Mr. Archambault. There is no correlation, expansion or not,
	on whether you have a wait list.
	Mr. Tonko. So, unfortunately, what we're seeing here from
	our witnesses today is a parade of alternative facts designed
	to obscure the simple truth.
	Medicaid expansion is working. It has provided health
	insurance to over 12 million people, and my colleagues on the
	other side of the aisle are engaged in a cynical attempt, I
	believe, to pit good versus good in an attempt to gut this
	program and rip health care away from millions of Americans. I
	find it unacceptable. I find it shameful, and I don't think we
	should sit quietly while people's right to health care is being
	threatened. With that, I just yield back the balance of my
	time.
	Mr. Murphy. Thank you.
	I now recognize Ms. Brooks for 5 minutes.
	Mrs. Brooks. Thank you, Mr. Chairman.
	I don't think that trying to explore waiting list questions
	and waiting list issues is an attempt to gut Medicaid. In my
	view, it's an attempt to strengthen the services and the
	ability to provide people with developmental disabilities,
	traumatic brain injuries, mental illnesses, and ensure that
	those people on these significant wait lists receive care. And
	I would like to go back to you, Mr. Archambault, with respect
	to--because I do think it's more complex than a simple yes or
	no, is there a correlation, or is there not a correlation? So
	could you please go into greater detail with respect to what
	your foundation, what you all have found with respect to the
	waiting lists, with respect to the people who are on the
	waiting lists, with respect to what the states want to do with
	the waiting lists? I'm going to let you use most of my time.
	Mr. Archambault. Sure. Thank you, Congresswoman.
	I would just say that to focus on a waiting list is a
	vacuum.
	Mrs. Brooks. I'm sorry. What do you mean by ``it's a
	vacuum''?
	Mr. Archambault. Some states have delivered care--the
	phrase that I'm sure you're all very familiar with: You've seen
	one State Medicaid program, you've seen one. Some states have
	decided to take their people that would qualify for a waiting
	list and include it into an 1115 waiver request and deliver
	services in a different way. My point is that the principles by
	which we have as a country for our safety net is that we make
	sure that a safety net program accomplishes a few things. One,
	is it targeted and tailored to the truly needy? Are we living
	up to the promises that we are making to these families and
	individuals before we make new promises?
	Mrs. Brooks. And is it fair to say that those currently on
	waiting lists in the states are the truly needy? Is there any
	dispute about that?
	Mr. Archambault. I think there would not be, and I would be
	happy to explore it, but I'm not sure how intellectual
	disabilities or mental illness would be seen as ones that we
	wouldn't want to try to help.
	Mrs. Brooks. People typically who cannot take care of
	themselves.
	Mr. Archambault. Correct----
	Mrs. Brooks. Is that correct? People who are often not
	working. Is that correct?
	Mr. Archambault. Correct.
	Mrs. Brooks. People who truly are incapable of taking care
	of them physically or mentally themselves.
	Mr. Archambault. Correct. And this was the traditional
	Medicaid population pre-ACA--was the aged, the disabled,
	pregnant women, and children--that we were trying to fulfill
	that promise to. The ACA changed that discussion.
	Mrs. Brooks. And how did the ACA change that discussion?
	Mr. Archambault. Well, expanded to a population that is the
	vast majority 82 percent childless, able-bodied adults. So,
	again, these are individuals that don't qualify for TANF. They
	don't qualify for long-term food stamps. They have not
	traditionally been a population. And what's really, really
	important for us to remember here is our goal is not to get
	people to stay on Medicaid. Ultimately, we want to make sure
	that they have better health outcomes, and I think most of us
	would agree ideally it's if they're able to work, that they're
	out in the workforce supporting themselves and on private
	insurance. And that's ultimately I think where we want to be as
	a country, and that's the discussion that we need to be having.
	Mrs. Brooks. And is it fair to say that most of the people
	who are on the waiting list who are the developmentally
	disabled, traumatic-brain-injured people, and those with
	serious mental illness are always going to be on Medicaid?
	Mr. Archambault. Correct.
	Mrs. Brooks. It's a different type of population.
	Mr. Archambault. Correct.
	Mrs. Brooks. And what has been your discussion and findings
	with the Governors with respect to how most of them would like
	to take care of this population? If there's consensus among
	Governors, what is the Governors' and the legislature's view
	with respect to this population?
	Mr. Archambault. Yes. I think there's ongoing concern by
	Governors that they're not going to be able to support these.
	Now, I will say there are exceptions to that rule, and if you
	look at the State of Kansas or the State of Maine, those
	Governors have been able to buy down their wait lists. I think
	Maine was gone from 1,700 individuals down to 200 individuals.
	Mrs. Brooks. How did they do it?
	Mr. Archambault. Well, they got some budget sanity. They
	did not expand Medicaid, and so they have been able to focus on
	eligibility, as we have talked about today, to make sure that
	their programs are truly focused on those that are the most
	needy, the aged, the blind, the disabled. And they've made that
	a priority in their states, and they've had success in buying
	down their wait lists.
	Mrs. Brooks. I think we need to continue to explore the
	states that have found ways to have little to no wait lists. I
	certainly hope today our Governor, Governor Holcomb, is
	formally submitting an application to CMS for a Medicaid waiver
	to continue our successful Healthy Indiana Plan for an
	additional 3 years. It's an outstanding program that I hope
	folks on both sides of the aisle--it is a way to save and to
	help those who truly need it. It can be replicated. I believe
	it's an incredible model that can work.
	Unfortunately, we still have a waiting list in Indiana. We
	don't want a waiting list. But I certainly hope that, with the
	new nominee to lead CMS, Seema Verma, a Hoosier, we can make
	all of Medicaid a far stronger and better program. With the
	controls in place, as a former U.S. attorney, I've worked with
	the MFCU units. We need to do more to support them. We need to
	do more to support all of these efforts to make sure that our
	truly vulnerable are protected.
	With that, I yield back.
	Mr. Murphy. OK.
	I now recognize Ms. Clarke for 5 minutes.
	Ms. Clarke. I thank you, Mr. Chairman, and I thank our
	ranking member.
	Before I get into my actual questioning, I actually want to
	respond to Mr. Howard because, as a proud New Yorker, I must
	correct the impression left by your characterization of the
	Empire State. Are you aware that the New York State's Medicaid
	Redesign Team has been a national leader in controlling costs
	and improving quality for Medicaid members? The Empire Center
	for Public Policy, self-described as a physically conservative
	think tank and government watchdog, released an analysis in
	September of 2016 that New York Medicaid spending per recipient
	has dropped from $10,684 to $8,731, or 18 percent, between 2010
	and 2014, at nearly twice the national average.
	According to the independent New York State Comptroller's
	Office, the MRT restrained total Medicaid spending growth to
	only 1.7 percent annually during the period of fiscal year 2010
	to 2013. This marks a significant reduction over the trend for
	the previous 10 years of 5.3 percent. During the same 3-year
	period, Medicaid re-enrollment grew by more than half a million
	people. Billions of dollars have been saved, and per-recipient
	spending has been slashed. In fiscal year 2014 and 2015 alone,
	a total of $16.4 billion was saved thanks to the MRT
	initiative. This track record of success led the Comptroller's
	Office to declare that MRT represents the most comprehensive
	restructuring of New York's Medicaid system since the program
	began in 1966. And we have no waiting list.
	I would like to now turn to Mr. Westmoreland. In Mr.
	Archambault's written testimony, he cited numerous concerns
	about Medicaid expansion. However, he ignores the fact that
	this program has also had a positive impact on the quality of
	life and health for millions of Americans. He also ignored the
	fact that many of the positive impacts, such as cost savings,
	from preventative medical exams and early detection and
	treatment of disease will result in future cost savings to the
	states and the Federal Government. I am a strong supporter of
	Medicaid expansion because I see the significant value of the
	program. I'm interested in improving the program and not
	destroying it.
	So, Mr. Westmoreland, Mr. Archambault claims that the
	Medicaid expansion funding threatens the truly vulnerable. Can
	you clarify why this is not the case?
	Mr. Westmoreland. I'd begin with first challenging the
	discussion, as I did in my testimony, of who's truly
	vulnerable. I want to be clear that not all people with
	disabilities, cognitive, traumatic brain injury, any of those
	discussions that have been ongoing, were traditionally eligible
	for Medicaid. It was tied to a 75-percent poverty and receipt
	of SSI, and many people whom we would all consider to be
	disabled have never been eligible for the Federal Medicaid
	program until the enactment of the ACA. So let's start with
	those people.
	Secondly, I would point out that there have been
	significant studies, economic and macroeconomic studies, some
	by business schools, some by economists, showing that states
	actually have significant budget savings and revenue gains by
	having the Medicaid expansion in their state. So I think that
	it's clear that states benefit on a financial basis and that
	their citizens benefit on their financial basis in the ways
	that I outlined in my testimony.
	Ms. Clarke. Mr. Westmoreland, both Mr. Archambault and Mr.
	Howard claimed that Medicaid expansion poses an unsustainable
	burden on state budgets. Can you clarify why this is not the
	case? Why have most states that have expanded Medicaid actually
	experienced net budgetary savings associated with the
	expansion?
	Mr. Westmoreland. Yes. Let's start with the healthcare
	expenses that, as we discussed earlier, there are fewer
	uncompensated care costs within the state. In addition to that,
	there is an influx of Federal funds into the state to pay for
	healthcare services, and those Federal funds have a
	reverberating multiplier effect in the state economy. And,
	finally, states are able to provide, as you suggested,
	preventive and early-intervention services that might not have
	been available to uninsured adults before and actually lower
	the ongoing healthcare costs for those people.
	Ms. Clarke. It is my understanding that numerous studies
	have disproven the myth that Medicaid expansion diminishes work
	incentives. Is that correct?
	Mr. Westmoreland. Yes, ma'am.
	Ms. Clarke. I yield back the balance of my time, Mr.
	Chairman.
	Mr. Murphy. Thank you.
	Now I recognize a new member to our subcommittee, the
	gentleman from Michigan, and Reverend, Mr. Tim Walberg.
	Welcome aboard here to our committee.
	Mr. Walberg. Thank you, Mr. Chairman.
	Mr. Archambault, I appreciate the safety net illustration,
	that we want to have safety nets. We don't want to have safety
	nets forever for people. I remember, I never worked over a
	safety net, but I remember working at U.S. Steel South Works
	and third helper of going out and being responsible to swing a
	sledge and take the plug out of a heat of molten steel and had
	a fall-protection strap on me. I appreciated that, but when the
	shift ended, I didn't want that strap. I wanted to move on.
	That's a laudable goal, that we find ways to make sure that
	people who truly need that safety net have it, that we make
	sure that we don't waste it on others who don't and encourage
	them to move on in a very positive way.
	I'd like to ask you for a further response from your
	testimony, and also, Ms. Maxwell, I'd like for you to comment
	after Mr. Archambault. Your testimony references some of the
	waste and fraud issues that face our Medicaid programs,
	individuals that have passed away decades ago, individuals
	using high-risk or stolen Social Security numbers, and tens of
	thousands who had moved out of state yet remained on Medicaid.
	What can we do to combat some of these problems more
	effectively?
	Mr. Archambault. So there's a number of things that we
	would recommend, and thank you, Congressman, for the question.
	The first one is allow states to check eligibility more
	frequently. Under the ACA, there was a change that states could
	only redetermine eligibility once a year unless they were given
	a reason to recheck eligibility. We have found that states that
	are able behind the scenes to access data internally within
	state government but also through third-party vendors, if
	they're able to run those on a quarterly or monthly basis,
	they're finding that these people, individuals have life
	changes, just like all of us. So, whether they move or they die
	or whether they get a significant raise, we need to make sure
	that we find that sooner rather than later. Otherwise, we're
	just wasting money, and I believe that there's bipartisan
	agreement on that, that we need to make sure. The other thing
	is that we need to make sure that the Federal databases, which
	we haven't talked a lot about, the quality of the data in those
	is quite poor. If you talk to state leaders, they will complain
	constantly about how late the data is, out of date, and it's
	not flexible enough. So making sure that states are able to
	look for dual enrollment, for example--and the Food Stamp
	program is moving in this direction. We should be doing it for
	Medicaid, just to make sure that we're not wasting money as a
	result of individuals moving across state lines.
	Mr. Walberg. Thank you.
	Ms. Maxwell, could you add to that?
	Ms. Maxwell. Thank you. I would love to. I would definitely
	echo what we just heard about the crucial need for better
	Medicaid data. Lack of data hampers the ability to understand
	these programmatic issues for policy decisions but it also
	significantly deters us in trying to find fraud, waste, and
	abuse. In addition to that impacting detection, we also need to
	think about protecting the Medicaid program from fraud ever
	happening in the first place. So again, in addition to the
	data, we would encourage CMS to continue to work with states to
	improve enhanced provider screening to make sure that providers
	that get in the program are the providers we want to get in and
	are who we want to pay.
	Mr. Walberg. Thank you.
	Mr. Archambault, an audit in Arkansas revealed more than
	43,000 individuals on Medicaid who did not live in the state,
	with nearly 7,000 having no record of ever living there. More
	than 20,000 Medicaid enrollees were also linked to high-risk
	identities, including individuals using stolen identities, fake
	Social Security numbers, et cetera. Something of interest to me
	in Michigan, has recently identified more than 7,000 lottery
	winners receiving some kind of public assistance, including
	individuals winning up to $4 million. Those jackpots are
	something that ought to encourage them not to be on Medicaid
	assistance.
	Mr. Archambault, do these individuals get approved for and
	stay enrolled in the Medicaid program, and is it the Federal
	Government or the states dropping the ball?
	Mr. Archambault. Well, Congressman, maybe a little bit of
	both, to answer that question. And I think what's really
	important here is that there are some policy changes that have
	happened. The Affordable Care Act removes an asset test for the
	Medicaid program, by and large. There's some that it still
	applies to. But as a result, these sorts of outlier cases
	admittedly, but when an individual wins $4 million, takes a
	lump-sum payment, they may not qualify that month, but the very
	next month, they would qualify for this program and can remain
	on. Let alone we're not checking for 12 months in most cases,
	so we wouldn't know. The point I'm making here is we need to
	make sure that these gaping holes that exist, we have data in
	many cases within a state government. We have data across state
	lines. And the Federal Government needs to incent states to
	say: Look, if you are doing this on a more regular basis and
	identifying fraud, you can take a little bit of that savings to
	pay for those efforts. This points to Mr. Howard's point that
	that is not the incentive that's inherent in the current
	financing structure that we have set up.
	Mr. Walberg. Thank you.
	My time has expired.
	Mr. Murphy. I now recognize Dr. Ruiz for 5 minutes.
	Mr. Ruiz. Thank you, Mr. Chairman.
	As many of you know, I grew up the son of farm workers in
	the medically underserved community of Coachella. I have seen
	firsthand what it means when a community is medically
	underserved and when they cannot access care. I can tell you
	this: If it was not for Medicaid, the Coachella Valley and
	regions like mine all across the country would not have access
	to health care that every one of us up on this dais and our
	families enjoy. If we repeal Medicaid expansion, people will
	lose healthcare coverage. They will stop seeing their doctors
	because the costs will be too high, and they will stop taking
	their lifesaving prescriptions because they are too expensive.
	In California alone, the nearly 3.5 million individuals who
	enrolled in Medicaid under the ACA expansion provision could
	lose their coverage. That's millions of families losing access
	to health care. And if we repeal Medicaid expansion,
	uncompensated costs will increase, straining our Nation's
	healthcare system, which will drive up costs for everyone
	because, you see, when people don't have health insurance, they
	don't stop getting sick. And our emergency departments do not
	turn someone away because they don't have insurance. Emergency
	physicians treat the patients, like they should. So the
	hospitals have to make up the costs. And in 2014 alone, Sutter
	Health Systems in California saw a decrease in uncompensated
	care by 45 percent in 2014. All hospitals in my district, in
	particular San Gorgonio Hospitals, have seen a drop in
	uninsured patients in the emergency department by half. So we
	need to expand Medicare even more, make it more efficient and
	more desirable for providers to see more Medicaid-insured
	patients.
	Listen, fraud is bad, and political amplification of the
	problem to wrongfully justify cutting health insurance for sick
	patients is bad. So here's the possible common ground. Here's
	what I think we can both agree on. If we start with the premise
	that we want to cover more uninsured, economically struggling
	families like the middle class and more vulnerable families,
	then we're on the same page. But if you start with the
	ideological goal to cut or end Medicaid, then you'll breed
	mistrust, and millions of people will be harmed, including the
	middle class. So the real question--and the real question, Mr.
	Howard, is, are sick and injured people getting the care they
	need? Because anything short of this is negligence. So let's
	tackle fraud so that we can expand coverage to more struggling,
	uninsured middle class families.
	So the question that I have, Ms. Yocom, if you were to
	choose one thing that you can do to combat fraud, if there's
	one action that you can take that we can make the biggest
	difference in the system, what would that be?
	Ms. Yocom. I think it's around the providers, making sure
	that we have eligible providers who are in good standing and
	that those who are not in good standing and should not be
	providing services aren't going across states to provide
	services.
	Mr. Ruiz. Thank you.
	Ms. Maxwell, the one thing, the one thing that would make
	the biggest difference?
	Ms. Maxwell. I would absolutely have to go back to the
	data. Without that sort of transparency, we cannot see what's
	happening in the program. We have a lack of data across the
	Nation and also data coming in from the managed care companies.
	Mr. Ruiz. Thank you.
	Mr. Howard, the one thing, if you had one thing that you
	can change to make the biggest difference in fraud, what would
	it be?
	Mr. Howard. In fraud in particular?
	Mr. Ruiz. Medicaid.
	Mr. Howard. Yes. Engage data transparency, as my colleague
	here on the dais was just saying. Medicaid data should be
	enclaved for all the states to look at so they can benchmark
	provider performance and engagement.
	Mr. Ruiz. Thank you.
	Mr. Westmoreland, what does the evidence suggest about how
	Medicaid expansion is making health care more affordable? Is
	there evidence, for instance, that Medicaid expansion is
	reducing patients' need to forego medical care due to costs?
	Mr. Westmoreland. Medicaid expansion is highly associated
	with a decline in personal bankruptcies. It is also associated
	with greater financial security for families who are newly
	eligible.
	Mr. Ruiz. So these are middle class families who are having
	some economic security because of the Medicaid expansion. What
	does the body of evidence say about how Medicaid expansion has
	affected patient access to primary care and preventative care?
	Mr. Westmoreland. Those beneficiaries who are newly insured
	under the Medicaid expansion have much higher rates of
	traditional sources of care, seeing primary care, and using
	preventive health services.
	Mr. Ruiz. Thank you very much.
	My closing statement is, if this is leading to increase in
	expansion for economically struggling middle class families,
	then, you know, I'm in.
	But if the ultimate goal is to create a facade and amplify
	a problem politically to then justify policies that will hurt
	the middle class and that would decrease health insurance, then
	I'm not in.
	So let's tackle fraud so that we can expand more health
	coverage to middle class families.
	Thank you very much.
	Mr. Murphy. Thank you.
	Now we're recognizing another new member of our committee
	from, I think, UCLA, former state assemblywoman, state senator,
	mayor, Congresswoman Mimi Walters of California. You're
	recognized for 5 minutes.
	Mrs. Walters. Thank you, Mr. Chairman.
	My questions will be directed to Mr. Archambault. The
	supporters argued that Medicaid expansion would increase jobs.
	Has this happened?
	Mr. Archambault. There's been a number of studies where the
	consultant predictions have been very off, whether it be
	enrollment or jobs. In particular, they are Iowa, Tennessee,
	where there were predictions of gains in hospital jobs and
	healthcare jobs as it related to expansion, and the opposite
	has actually taken place, where there has been a loss in
	healthcare jobs.
	Mrs. Walters. OK. And during the conception of the ACA,
	supporters argued that Medicaid expansion would stop hospital
	closures. Has this been the case?
	Mr. Archambault. So it certainly has not stopped hospital
	closures. In a number of states, hospitals have still closed.
	And I think it's important to realize that the supporters'
	claim that it is a silver bullet to stop closures has not been
	true. So you could list off Arizona, Massachusetts, a number of
	these states where they have expanded, and hospitals have still
	closed.
	Mrs. Walters. OK.
	And, finally, Medicaid expansion was projected to lower
	emergency room use. However, you pointed out that the evidence
	suggests that emergency room use has increased after expansion
	and that many emergency room visits by Medicaid beneficiaries
	were deemed to be avoidable. Can you explain what might have
	led to this outcome?
	Mr. Archambault. Sure. And my experience is not just
	influenced by the ACA. I live in Massachusetts and worked on
	RomneyCare and have studied RomneyCare very closely. And one of
	the things that becomes apparent is, both in the expansion
	population and the traditional Medicaid population, is folks
	are not getting coordinated care because they are showing up to
	the ERs at a much higher rate than those that are privately
	insured or even uninsured. And so, as a result, these are the
	questions that we need to ask about the effectiveness of the
	program, the quality of the care that individuals are getting.
	There's been a number of surveys looking at, how many of these
	visits are avoidable? And, unfortunately, at least in
	Massachusetts, those surveys found that 55 percent of Medicaid
	visits to the ER were unavoidable.
	Mrs. Walters. Thank you.
	I believe my time is expired.
	Mr. Murphy. I then recognize Ms. Schakowsky for 5 minutes.
	Ms. Schakowsky. Thank you, Mr. Chairman.
	The Affordable Care Act has just been a blessing for so
	many people in our country. Twelve million more Americans have
	access to health care.
	Mr. Westmoreland, Governors across the country submitted
	letters in response to Representative McCarthy's request to
	describe the impact of the ACA and the expansion of Medicaid
	within their states. I'm assuming that you've seen some of
	these letters. For the record--
	Mr. Westmoreland. Yes, ma'am.
	Ms. Schakowsky. Even some Republican Governors appeared to
	have positive things to say about the expansion of Medicaid in
	their state. For example, the letter from my home State of
	Illinois stated that our--the Governor stated that our Medicaid
	population ``now stands at 3.2 million, almost one quarter of
	the state's population,'' and it went on to urge Republican
	leaders in Congress to ``carefully consider the ramifications
	of proposed changes.'' Similarly, Governor Sandoval of Nevada
	stated in his letter to Mr. McCarthy that, ``I chose to expand
	the Medicaid program to require managed care for most enrollees
	and to implement a state-based health insurance exchange.''
	These decisions made health care accessible to many Nevadans
	who never had coverage options before.
	So, Mr. Westmoreland, can you briefly touch upon how the
	residents of states that expanded Medicaid under the ACA have
	benefited, such as Illinois and Nevada?
	Mr. Westmoreland. I'm sorry. I didn't understand the last
	part of the question.
	Ms. Schakowsky. I cited Illinois and Nevada, but can you
	briefly touch on how the residents of states that did expand
	Medicaid under the ACA have been benefited?
	Mr. Westmoreland. Let's begin with 11 million people have
	Medicaid coverage who didn't have it before, and many of those
	people are in serious need. I would point out and agree with
	you that, of the Governors who wrote to Mr. McCarthy, none of
	them requested repeal, I believe. And 16 of the states were
	governed by Republican Governors. And Ohio, Mr. Kasich, one of
	your former colleagues, I think was most passionate in
	describing not only how it has benefited the residents of Ohio
	to have services but that, indeed, he believed that it was a
	moral duty to continue to cover these people under Medicaid.
	Ms. Schakowsky. Thank you for that.
	And can you briefly touch on how--let's see, I also wanted
	to mention there are other examples, Republican-led states as
	you have said, that have had positive outcomes for their
	residents. And beyond providing healthcare benefits to an
	additional 12 million people, how has Medicaid expansion helped
	states manage their budgets? Has it had a positive impact?
	Mr. Westmoreland. As I suggested earlier, there have been
	business school studies and economic studies suggesting that
	states who have expanded Medicaid have had not only a net
	increase in Federal funds coming into the state, but they've
	also enjoyed some revenue increases because of the
	reverberating effects and providing those funds in hospitals. I
	would also point out to you that there is a long-term study to
	be done of how productivity might actually be improved by
	people having healthcare services who previously were denied
	those services.
	Ms. Schakowsky. Thank you. Some of the letters I was
	referring to seem to raise concern by Republican Governors that
	changes to the Medicaid program would produce destabilizing
	cost shifts to the states. For example, Governor Baker of
	Massachusetts in his letter to Mr. McCarthy said, ``Medicaid is
	a shared Federal-state partnership.'' Proposals that suggest
	that states may be provided with more flexibility and control
	must not result in substantial and destabilizing cost shifts to
	states.
	So is there a valid concern of a major cost shift under the
	Republican proposals you are seeing, such as proposals to
	block-grant Medicaid or impose per-capita caps on spending?
	Should states be concerned about major cost shifts?
	Mr. Archambault. States should be very concerned. The first
	question is, what level will the initial block grant and its
	formula be set at? But the major question for states to focus
	on is how the evolution, the increase of funding in the future,
	will evolve as compared with the actual cost of providing
	healthcare services to the number of people who need them. As I
	suggested earlier, states will be left holding the bag for both
	medical inflation and the number of people who have no health
	insurance.
	Ms. Schakowsky. And what about, for those that are
	receiving health care through ACA's Medicaid expansion, are
	they at risk, particularly if they block-grant the Medicaid
	program?
	Mr. Archambault. Well, first, I would suggest that my
	colleagues on this panel would point out that--suggest that
	those people should be the first to go off of the healthcare
	rolls and that they would return to traditional Medicaid
	populations as they've existed over the last 20 or 30 years, so
	I would suggest that the people who are on Medicaid expansion
	are the people who are most likely to be on the chopping block
	to begin with.
	But, secondly, I would say that, as every state, expansion
	or no expansion, experiences the growth in healthcare costs
	that is almost inevitable, looking at CBO or any other
	projections, if the states are left holding the bag and they do
	not have a guarantee of Federal funds, they're going to be
	cutting back on everyone.
	Ms. Schakowsky. Thank you.
	I yield back.
	Mr. Murphy. Thank you.
	Another new member of our committee, Mr. Costello of
	Pennsylvania. I appreciate you being here. You're recognized
	for 5 minutes.
	Mr. Costello. Thank you.
	Ms. Maxwell, if I could ask a couple of questions on HHS
	OIG, has the number of criminal investigators increased or
	decreased over the years?
	Ms. Maxwell. The number of criminal investigators
	specifically?
	Mr. Costello. Yes.
	Ms. Maxwell. I think, right now, we are below our FTE
	ceiling. We are still trying to hire more.
	Mr. Costello. How many more do you think you need to hire?
	Ms. Maxwell. Well, we would hire as many as you let us, but
	w need about 1,700 FTEs--that's where we're pegged for, the
	entire OIG.
	Mr. Costello. True or false, for every $1 expended in the
	OIG, $7.70 is returned to the Health Care Fraud and Abuse
	Control Program?
	Ms. Maxwell. That is true.
	Mr. Costello. Has that been a consistent return?
	Ms. Maxwell. As far as I know, it's been around $7, and
	it's the same thing for the Medicaid Fraud Control Units. They
	also had that similar ROI.
	Mr. Costello. You conducted a review of State Medicaid
	agencies presented with allegations of provider fraud. Did you
	find that state agencies properly suspended Medicaid payments
	to those providers?
	Ms. Maxwell. They did not make full use of those tools.
	Mr. Costello. Which is to say they did suspend all----
	Ms. Maxwell. They did not. Although, in a number of the
	cases where they did not suspend, the MFCU ultimately cleared
	the provider of wrongdoing.
	Mr. Costello. Very good. On the issue of program integrity,
	since your work has repeatedly found CMS' oversight of states
	claiming of matching dollars is inadequate to safeguard Federal
	dollars, what more could CMS be doing to ensure the integrity
	of Medicaid matching?
	Ms. Maxwell. There are a number of things along the program
	integrity principles I've outlined that we believe CMS could do
	in conjunction with the states. Given that CMS and states share
	fiscal risk, we believe they should share accountability. So,
	as I mentioned, prevention, helping states implement the
	enhanced provider screening, helping them drive down improper
	payment rates, and then, of course, the data to be able to
	understand the program and detect fraud. And more importantly,
	the data helps us home in on fraud, waste, and abuse and really
	target our oversight activities so that we can get this tricky
	balance right between trying to have really strong program
	integrity but also not put an undue burden on its providers.
	Mr. Costello. I'm going to shift this question to Mr.
	Archambault, but after he answers, anyone else feel free to
	respond, including what you just mentioned about the issue of,
	specifically, enhanced data-matching technology.
	Because it seems to me that if you have technology and you
	have data, when we're talking about the ACA change which only
	requires states to perform one check per year, knowing that we
	have the data, knowing that we're a pretty technologically
	advanced society, it would be, I think, a little bit easier to
	go about detecting ineligibility or fraud or anything of the
	sort to cut down on those who are ineligible from being
	accepted into the Medicaid program.
	Mr. Archambault, I see in your written testimony, in the
	first 10 months of operation, Pennsylvania's award-winning
	Enterprise Program Integrity Initiative identified more than
	160,000 ineligible individuals who were receiving benefits,
	including individuals who were in prison and even millionaire
	lottery winners, resulting in nearly 300 million in taxpayer
	savings.
	What can we do in order to pivot to real-time
	identification of something that doesn't seem quite right,
	rather than just relying on that one moment in time annually,
	to beef up program integrity here?
	Mr. Archambault. So I think there's a number of things that
	the Federal Government can do to enable states to do this.
	The first one is that if they are investing state dollars
	in some of these efforts, if they are able to find cases that
	are ineligible, for them to be able to keep a piece of that
	savings up front and more than they get to save now, given the
	funding formula that we have.
	The other one is let them check more frequently.
	And then the third one is to make sure that the actual data
	that the Federal Government is allowing access to is timely or
	allows states to go somewhere else to get it from a private
	vendor if the Federal Government's data is not timely enough.
	Ms. Maxwell. Yes, I would agree that the coordination and
	sharing of data is critical between the Federal and State
	governments. One area where we found a real problem is, when
	providers are enrolled, they're asked who their owners are so
	we know who we're doing business with. And, in one case, we
	found that the State Medicaid agency thought there were 63
	owners, Medicare thought there were 14 owners, and they told us
	there were 12. So, trying to coordinate this data so all the
	programs know who we're doing business with.
	In addition, we recommend that the Medicare data be
	improved so that Medicaid can actually share that and reduce
	the provider burden, in terms of letting them enroll in both
	different programs.
	Mr. Costello. That gets, Ms. Yocom, to your point about the
	duplicate eligibility issue, correct?
	Ms. Yocom. Yes, it does. And while we are a technologically
	advanced society, the Medicaid program truly is not. States'
	data systems are pretty antiquated, and there is a lot of work
	to do to get good data systems that are more flexible and more
	agile.
	Mr. Westmoreland. If I could, sir, I would also say that
	the recently published managed care organization rule provides
	for a substantial improvement in data systems. And I would ask
	this--and this committee actually accelerated the effective
	date of that with your 21st Century Cures Act.
	I would ask you to keep the MCO rule in mind as you move
	forward with the question of whether regulations will be
	withdrawn in the early part of this--in the early part of this
	administration. I think it's a valuable addition to try to be
	able to find who--I agree with all my colleagues that the data
	systems need to be improved, and I think the MCO rule does
	that.
	Mr. Costello. Thank you all for your comments.
	Mr. Murphy. Thank you.
	And now, recognizing another new member of our committee,
	the owner of Carter's Pharmacy. Is that a place where we might
	see someone like Ellie Walker and Opie serving drinks at the
	Walker's store?
	Mr. Carter. Very much so.
	Mr. Murphy. But understanding of small-town medical care,
	good to have you on board here. Buddy Carter of Georgia's First
	District.
	Mr. Carter. Thank you. Thank you, Mr. Chairman.
	And thank all of you for being here. We appreciate your
	participation.
	I want to preface my questions by apologizing if I ask you
	something you weren't prepared for. And if you don't know the
	answer, if you'll just simply tell me that you can get me the
	answer, that will be fine.
	Ms. Maxwell, I understand, looking at your bio last night,
	that you have some expertise on the 340B program.
	Ms. Maxwell. I do.
	Mr. Carter. I don't want to get into that program; however,
	I want to explain to you a situation that exists in my
	district.
	I have a hospital in my district that was participating and
	receiving moneys from the 340B program, and because they didn't
	meet the threshold, they were put out of that program. Now,
	they got back in it.
	As I understand, there are two different levels that you
	can be at, as a sole community provider and also as a
	disproportionate share.
	Ms. Maxwell. Yes. Those are both covered entities.
	Mr. Carter. OK. Well, they got back in it as a sole
	community, OK? But what the CEO is telling me is that, because
	they can't get back as a disproportionate share, that they're
	losing over $300,000 a month. Now, that is significant for
	them. I'm sure it's significant for anyone, but for this
	hospital system it's very significant.
	Now, he also is telling me that the formula that is used
	for that, that Medicaid participation, the Medicaid rate is
	also in that formula to determine whether they are a sole
	community or whether they're in the disproportionate share.
	And what I'm hearing is that those states that did not
	expand Medicaid, like the State of Georgia, that they are put
	at a disadvantage, in that we aren't eligible for that. Is that
	true? Is that the case?
	Ms. Maxwell. I'm going to have to take your offer to get
	back to you on that.
	Mr. Carter. OK.
	Ms. Maxwell. My expertise really is in the pricing of the
	340B drugs themselves and not as much in this disproportionate
	share. But I know there have been issues, and I certainly know
	there are people in our office that can answer that question,
	and we'll get back to you as soon as we can.
	Mr. Carter. OK. Well, that's fair enough.
	But my question is twofold: first of all, if that is the
	case; secondly, if that was the intention. Was that the
	intention, to penalize states that didn't expand Medicaid so
	that they couldn't receive these dollars, or was it an
	incentive to get those states to expand Medicaid?
	Ms. Maxwell. I couldn't speak to the legislative intent.
	Mr. Carter. OK. Well, please include that in your answer.
	That's one of the things----
	Ms. Maxwell. Absolutely. Will do.
	Mr. Carter. I'm going to move now to Mr. Archambault and
	ask you, the video that you showed there--now, understand, I
	spent 10 years in the Georgia State legislature, all on Health
	and Human Services, so I understand about Medicaid. And we did
	the hospital bed tax in order to draw more dollars down, as was
	brought up by one of my fellow members earlier. In fact, they
	are looking at reauthorizing that again this year. And you
	bring up a valid point about how states balance budgets,
	because, quite honestly, we did it that way, and that was one
	of the reasons why.
	But my question is about the video you showed. Now, I am a
	strong believer that Medicaid should include the aged, blind,
	and disabled. In fact, I think that if--and if you'll help me--
	that most of the costs in the Medicaid program can be
	attributed to the ABD. Would that be--and what percentage would
	that be? Seventy, 80 percent?
	Ms. Yocom, do you----
	Ms. Yocom. I think it's at least two-thirds.
	Mr. Carter. At least two-thirds?
	Ms. Yocom. Yes.
	Mr. Carter. OK. And we're all in agreement that that's most
	of it.
	But my question, Mr. Archambault, was why didn't this
	patient--why wasn't this patient eligible as disabled? It would
	seem to me like they wouldn't have had to have waited on the
	waiver.
	Mr. Archambault. So, Congressman, thank you for the
	question. And I think it is important to know that we are
	talking about a couple different things here. What we were
	talking about in particular for her, for Skylar and her mother,
	is that there are some services that she could have access to
	under these waiver programs.
	So, for Skylar, you can't just call a neighbor to babysit.
	You need to have certain skill sets to be able to be able to
	watch her, given her condition. And so this would allow access
	to those services.
	It's not that individuals are completely off of Medicaid;
	it's that we are talking about, are we providing the services
	that we have promised to individuals in a holistic manner to be
	able to take care of these most needy?
	Mr. Carter. OK. Well, understand, again, I am one who
	believes that Medicaid should be taking care of that group. And
	once you get past that, now, we can have a discussion and we
	can debate who's to be covered and who's not to be covered. But
	I honestly believe, as a healthcare professional, that they
	should be covered.
	Mr. Archambault. And, Congressman, that's my exact point,
	is that we are extending new promises to able-bodied, largely
	childless adults before fulfilling that promise.
	Mr. Carter. OK. Good. Thank you for that.
	Very quickly, I'm sorry I don't have much time, Mr. Howard,
	I just wanted to ask you, HHS now projects that newly eligible
	Medicaid patients are going to cost $6,366 per enrollee in 2015
	and that this is a 49-percent increase in what they had
	projected before. Why is that? Why are they costing more?
	Mr. Howard. Congressman, it may be because, in these new
	expansion programs, states have raised their reimbursement
	rates to providers to get these newly eligible populations in
	the system. That's my understanding.
	Mr. Carter. It would appear to me, if the--again, I get
	back to the aged, blind, and disabled. If they were already
	included, they are the most expensive. And why are they--I'm
	sorry. I know I'm running past my time. It just baffles me why
	it's gone up that much.
	Mr. Murphy. OK.
	Mr. Carter. Thank you, Mr. Chairman. I yield back.
	Mr. Murphy. OK. Thank you.
	I'm now going to recognize Mr. Collins for 5 minutes.
	Mr. Collins. Thank you, Mr. Chairman.
	I'm going to be directing this to you, Mr. Howard, but some
	background: I'm western New York, and New York, as we all know,
	is one of the highest states in Medicaid per capita spending
	and total spending. And while New York only has 6 \1/2\ percent
	of the Nation's population, it accounts for over 11 percent of
	the national Medicaid spending. And according to a 2014 report
	from Medicare and CHIP Payment and Access Commission, using
	data from 2011, New York spent 44 percent more per Medicaid
	enrollee than the national average.
	There's all kind of complex and fragmented funding streams
	that make it very difficult to provide adequate accounting
	controls for the program.
	So the question is this: In 2012, a report from the HHS
	Office of the Inspector General revealed that New York had
	systematically overbilled Federal taxpayers for Medicaid
	services for the mentally disabled for 20 years. New York State
	developmental centers, which offer treatment and housing for
	individuals with severe developmental disabilities, had
	received 1.5 million annually per resident in 2009, for a total
	of 2.3 billion. State centers were compensated at Medicaid
	payment rates 10 times higher than the Medicaid rates paid to
	comparable privately run developmental centers.
	So the simple question is, how could these overpayments go
	unnoticed for 20 years?
	Mr. Howard. Congressman, it's because there is simply no
	financial incentive for the states to go back and police their
	systems in a way that would result in a significant decrease in
	Federal funding.
	The State of New York actually settled with HHS, I believe,
	for $1.63 billion for overpayments. I think it was 2009 through
	2011. So, to some extent, the problem was remedied, but the
	reality is, as I said before, the ratchet only goes one way.
	Congresswoman Clarke pointed out earlier that Governor
	Cuomo has had quite a bit of success, which I noted in my
	testimony, in bringing down the payment rate--pardon me, for
	the growth rate for Medicaid. I think if someone who had an R
	by their name had suggested what is effectively for New York
	State a cap on growth of the most nondisabled part of the
	program, that it would be held to 30 percent effectively below
	the historical payment rate for the program, I think there
	would have been cries of poverty and that we'd be throwing
	people out of the program. Miraculously, New York State
	providers found ways to significantly decrease their spending
	by hundreds of millions of dollars.
	I think that the belief that significant flexibilities or
	block grants or per capita caps would automatically mean less
	delivery of care ignores that economists on the right and left
	center of the aisle believe there's significant opportunities
	for efficiency in health care. And until we give states better
	programmatic and financial goals to seek out that efficiency,
	we are not going to be getting the best outcome for every
	dollar we're spending on health.
	Mr. Collins. Well, being a New Yorker and bringing this up,
	I would have to say, while they apparently negotiated a
	significant settlement, it in fact did not reimburse the
	Federal Government for 20 years of egregious behavior which I
	would say was deliberate. You can't be charging 10 times the
	national average for 20 straight years and try to, you know,
	prove that this was not intentional.
	So, you know, we talk about R's and D's. I have to wonder,
	if there wasn't a D behind the President's name and a D behind
	our Governor's name, if that settlement would have come closer
	to reimbursing the U.S. taxpayers for what I think was grand
	theft auto.
	So another question about New York. Well, by the way, the
	reason I come at this the way I do, as a county executive of
	Erie County, largest upstate county, we're one of only a
	handful of states where the counties have to pay a share. And,
	by the way, on DSH and IGT for UPL, the counties pay 100
	percent of the Federal match. The state pays nothing.
	In the case of Erie County, my county, second, third,
	fourth city in the United States, city of Buffalo, 110 percent
	of our property taxes went to Medicaid. We couldn't raise
	enough property tax to even pay our county's share of Medicaid
	because of the way New York State runs this program. We had to
	supplement it with sales tax revenue. That's why I get a little
	emotional when I find out the state's been cheating for 20
	years, especially the way they handle the counties.
	But, also, as I understand it, in a 2009 report, New York
	State ranked last in affordable hospital admissions--last. So
	our outcomes are so poor. What is going on in New York? And
	we've only got 20 seconds, but----
	Mr. Howard. Just very quickly, I think there's also
	consensus that the amount of spending we put on health care
	does not automatically correlate to better outcomes. So if you
	look at a scatter plot of state spending per enrollee, it's all
	over the map, and outcomes are all over the map, because
	there's an increasing body of research that says health
	behaviors, not access to care, not insurance, dictate long-term
	health outcomes. We just need to think about health
	differently.
	Mr. Collins. And I couldn't agree more that there's no
	correlation between spending and outcome.
	Thank you very much for your testimony.
	Mr. Murphy. We now recognize the chairman of the full
	committee. Welcome back. Mr. Walden, you are recognized for 5
	minutes.
	Mr. Walden. Thank you, Mr. Chairman, and thank you for
	conducting this oversight hearing.
	I want to thank our witnesses today for your extraordinary
	testimony. It's very valuable in the work we're engaged in.
	I want to focus on data and high risk, and especially to
	both the GAO and to the HHS OIG. Because my understanding is
	for 14 years running Medicaid has been on your high-risk list
	for a problem. What's behind that? Is that because CMS does not
	collect the right data to begin with?
	Ms. Yocom. I think there's a couple of things behind it.
	One is the nature of the partnership itself, that by the time
	the Federal Government is reviewing expenditures, the
	expenditures have occurred, so that prevention-the ability is--
	--
	Mr. Walden. That's always lacking?
	Ms. Yocom [continuing]. Always challenging.
	The second piece really is about data. You simply cannot
	run a program this large when you can't tell where the money is
	going and where it has been. We need better data.
	Mr. Walden. And so have you made recommendations to CMS to
	collect better data, and have they ignored those
	recommendations? Or what's the issue there?
	Ms. Yocom. We have a report coming out in just a few days
	that might answer that question a little more fully, but I
	think Ms. Maxwell can now.
	Mr. Walden. Well, feel free to go ahead and share it today
	if----
	Ms. Maxwell. The IG has been focused on this area for quite
	some time. We have followed the evolution of the national data
	and continue to push CMS to create a deadline for when they
	think that data will be available, specifically for program
	integrity reasons.
	Mr. Walden. So one of the issues that's come up in the
	press is this issue of woodworking. Everybody's trying to count
	numbers here. And I like what you said about let's get to
	quality outcomes, but off that for a minute. So there's this
	issue of woodworking, how many people are eligible before that
	are being counted now as if they're new eligibles.
	And my question is, do we know that answer? And, second,
	are there states that are getting reimbursed at a higher rate,
	as if we were paying for newly eligibles at what would be,
	what, a 95 percent rate now, when in fact those individuals
	were actually always eligible and the state should be
	compensated at a lower rate?
	Do we know any data surrounding that, how many people are
	actually, quote/unquote, woodworking? Have states been
	reimbursed at a higher rate when they should have been
	reimbursed at a lower rate?
	Ms. Maxwell. I can't speak to the working number
	specifically. I can tell you the IG has the same question that
	you have, and we have work underway to answer that exact
	question. So are states pulling down reimbursement for eligible
	beneficiaries as if they were in the newly eligible category--
	--
	Mr. Walden. Correct.
	Ms. Maxwell [continuing]. When, instead, they should have
	been enrolled in traditional Medicaid? That work will be
	forthcoming.
	Mr. Walden. Do you have a timeline on when you think you
	may have answers for us on that?
	Ms. Maxwell. We have four states that we're looking at. The
	first two states probably in the next couple of months, and
	then the other two probably later in the year.
	Mr. Walden. Can you reveal what those four states are?
	Ms. Maxwell. I can if you give me a minute.
	Mr. Walden. OK.
	Ms. Yocom. And while she----
	Mr. Walden. Ms. Yocom?
	Ms. Yocom [continuing]. Is looking, we did issue some work
	that looked at this question, and we did identify some issues
	where it appeared that people were not accurately categorized
	by whether they received the 100-percent match or a state
	expansion match or their regular FMAP. We did identify problems
	there.
	And one of the recommendations that is still outstanding in
	this area has to do with the fact that CMS adjusted the
	eligibility differences but then did not circle back and
	correct the financing that occurred. So we think those two
	things need to be related. If you identify an eligibility
	issue--either way, if the matching rate is off, it should be
	corrected.
	Mr. Walden. Yes.
	Ms. Yocom. CMS is starting to look at that, but----
	Mr. Walden. It could be a big number. We don't know. But
	it's an important thing to get right.
	I remember I spent about 4 \1/2\, 5 years on a community
	hospital board at a time when the Federal Government decided to
	go after virtually every hospital and allege billing
	misbehavior, shall we say, going back, I don't know, 8, 9, 10
	years. And the threat to the hospitals was, we will use the
	RICO statute because you have engaged in criminal practice
	because of multiple cases.
	And it just strikes me that they were willing to do that
	there. Everybody had to settle, because nobody wanted to go
	down that path. We know the government sometimes gets it wrong,
	but, oh, we'd never go after the government with RICO.
	What is happening here with these states I guess is a
	legitimate question when we've got people that are aged, blind,
	disabled waiting to get on? Are we--and a limited resource. And
	we don't have the data. That's what you're telling me, isn't
	it?
	Ms. Maxwell. Yes. And I have the states. So we will have
	data on the four States, and they are Kentucky, California, New
	York, and Colorado.
	Mr. Walden. Kentucky, California, New York, Colorado. And
	your timeline, again, to probably conclude your analysis?
	Ms. Maxwell. The first couple will be probably be final in
	the next month or two, and then the final two will be later
	this year.
	Mr. Walden. All right.
	Ms. Maxwell. We'll be sure to let you know.
	Mr. Walden. And if we could do one thing with CMS to help
	you be able to do your job the way you want to do it, what
	would that be, Ms. Yocom?
	Ms. Maxwell. Oh, I hate to keep saying it, but it's got to
	be the data. We just absolutely need the data.
	Mr. Walden. Ms. Yocom, same?
	Ms. Yocom. Yes, I would agree.
	Mr. Walden. OK. If there are specific items related to
	data, please get those to us. I'll be happy to work with the
	incoming CMS Administrator, and we will do our best to get you
	the data. Because it's important to all of us for our
	decisionmaking. And we know we have people waiting on the list,
	can't get access to care. And we've got to get the waste and
	the fraud out. We've got to get them off this risk list.
	Thank you very much for your testimony.
	Mr. Chairman, thanks for your leadership on this.
	Mr. Murphy. The chairman yields back.
	I have one more question I want to ask Mr. Howard. And this
	relates to trying to find some other ways of saving money and
	providing more effective care within Medicaid. And it has to do
	with more alternative payment models as a way to reduce costs.
	That being physicians, providers, hospitals are paid to take
	care of the patient, as opposed to a fee for service, which is
	every time someone shows up, you bill them. It's sort of like
	paying a carpenter based upon how many nails he puts in a
	house. He'll put a lot of nails in that house.
	Whereas, an alternative payment model, whether it is making
	calls to the patient to check up on their medication, to remind
	them of their appointment, to counsel them, to keep them out of
	the emergency room, to get effective care, those sort of
	approaches.
	So I'm thinking, in linking with the Medicaid amount, HHS
	estimated the improper payments from Medicaid amounted to 30
	billion in 2015, with an error rate hovering around 10 percent.
	At the same time, studies like the Oregon Medicaid Experiment
	showed that Medicaid coverage does not necessarily result in
	better health outcomes, as we talked about before.
	So what do you think about these alternative payment models
	as a way of saying that the skin in the game is also the
	physicians and hospitals, to make sure that they are doing all
	they can to keep the patients healthy?
	Mr. Howard. Absolutely, I think that experimenting with
	these models is critical. You need the data to be able to
	understand who is the best provider. We talk a lot about waste,
	fraud, and abuse. That's certainly a big problem. But estimates
	from even people like Donald Berwick are that 20, potentially
	30 percent of care is either ineffective or wasted.
	And there are providers that we know are doing terrific
	jobs at a fraction of the cost; hospitals across the street
	from another hospital providing care more efficiently. If we
	had data transparency, we could encourage more competition
	among those across these payment models.
	Mr. Murphy. Can you get us information on how you would see
	those things worked out?
	Mr. Howard. Absolutely.
	Mr. Murphy. The committee would appreciate that.
	Ms. DeGette, do you have a followup comment?
	Ms. DeGette. I just had a couple comments, Mr. Chairman.
	The first thing is that here's something we can agree on in
	a bipartisan way, is getting you folks the data that you need.
	So I'll just echo what Mr. Walden said. Whatever specific
	suggestions you have, let us know. And, also, I'm assuming that
	you need that staffing, that if we freeze your hiring, that's
	going to be a problem.
	I just want to make a couple of comments about the Medicaid
	expansion, which is, first of all, a lot of people--I keep
	hearing people today say that we really want to make sure that
	people who have chronic and severe diseases, like the videotape
	we saw, get services, and that's absolutely true. And then
	people on the other side keep talking about able-bodied adults.
	And I would just point out that 80 percent of the people
	who are getting the Medicaid expansion are working. So, you
	know, they might be able-bodied adults, but they have jobs, and
	they were uninsured before because either their employers
	didn't offer insurance or because the insurance that they could
	get was too expensive. And so these people were going without
	health care, which, as Mr. Westmoreland and others said, that
	just increases the costs for everybody because of the costs of
	uncompensated care.
	And if there's ways--I was just talking to Mrs. Brooks
	about this. If there's ways that we can find efficiencies in
	the program--all of us are for more efficiencies, and we're for
	delivering health care in a more cost-effective way, not just
	within Medicaid but within private insurance too. And this is
	something, again, I think that we could work in a bipartisan
	way to make this happen. But just to say, well, we shouldn't
	give the Medicaid expansion because these people are, quote,
	``able-bodied'' adults is not understanding who's getting it.
	I just want to close with an email that I got from my best
	friend from South High School in Denver, Colorado. We are not
	spring chickens anymore. And here's what my friend Lori
	Dunkley--she sent this to me a couple weeks ago, without
	solicitation. She just sent it to me.
	``I just want to add my story to others you are hearing
	about the Affordable Care Act. I was laid off during the
	recession and lost a lot of my retirement stability. Then, at
	age 54, I looked for a job for 3 years without success. I had
	no health insurance. Finally, I fell back on my journalism
	skills and landed work writing for several neighborhood papers.
	This has worked out fine, but only because of getting insurance
	through the ACA. I make very modest money, and so I qualify for
	the expanded Medicaid program. What a godsend. Since I am not
	yet Medicare age but too old for the job market, I don't know
	what I'd do without this help.''
	This is the people that we're talking about. So we have to
	figure out how we're going to give health care to the 11 to 12
	million people who have gotten health care because of this
	Medicaid expansion. That's what we're talking about.
	Thank you, Mr. Chairman.
	Mr. Murphy. The gentlewoman yields back.
	And this will bring to a conclusion this hearing of the
	Subcommittee on Oversight and Investigations. I'd like to thank
	the witnesses and all members that participated in today's
	hearing.
	I remind members they have 10 business days to submit
	questions for the record, and I ask the witnesses all agree to
	respond promptly to the questions.
	Thank you so much for being here.
	And, with that, this subcommittee is adjourned.
	[Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
	[Material submitted for inclusion in the record follows:]

	Prepared statement of Hon. Greg Walden

	Thank you, Mr. Chairman. And welcome to the first E&C
	hearing of the 115th Congress. Today, we are taking a closer
	look at the Medicaid program to ensure the program is operating
	effectively, that Americans who are eligible for the program
	have access to, and actually receive, the quality care that
	they deserve, and that tax dollars are spent appropriately.
	In Fiscal Year 2015, total spending of the Medicaid program
	was $509 billion, 62 percent of that was paid for by the
	federal government. According to the Congressional Budget
	Office, the federal share of Medicaid spending is expected to
	rise significantly over the next decade.
	While Medicaid provides coverage to millions of low-income
	and disabled Americans, the program is not immune to
	challenges--including increasing costs, fraud, and errors with
	eligibility determination that result in millions of wasted
	taxpayer dollars. Meanwhile, some of America's most frail and
	needy citizens remain on waiting lists. We need to ensure that
	eligible beneficiaries of the program have access to high
	quality care, while being good stewards of hardearned taxpayer
	dollars.
	This hearing is an important part of the continued
	oversight that our committee, the Inspector General and the
	Government Accountability Office have conducted over this vast
	program.
	All of us here today agree that Medicaid is an essential
	program for the population that it serves. With Medicaid
	expansion, and the rapid growth of the program, we can't shy
	away from asking the tough questions. Program integrity and
	oversight are vital to ensure we don't get stuck in an `auto-
	pilot' spending pattern that doesn't serve the beneficiaries of
	the program by improving their overall health outcomes.
	We look forward to a productive dialogue with our witnesses
	today, to discuss the troubling findings in the reports and
	audits conducted by the GAO and HHS OIG. We also hope to
	examine the effects that Medicaid expansion has had on states'
	budgets and beneficiaries.
	Tomorrow, our Health Subcommittee will hold a hearing
	focused on solutions to fix some of the problems plaguing the
	Medicaid program. And on Thursday, our Health Subcommittee will
	examine insurance reforms. It's an important first week back in
	the hearing room as we explore ways to rebuild our health care
	system.
	I would like to thank the witnesses for testifying today
	and look forward to hearing from this distinguished panel.
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