[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
_______
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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
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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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