[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




                   HELPING FAMILIES WITH NEEDED CARE:
                 MEDICAID'S CRITICAL ROLE FOR AMERICANS
                           WITH DISABILITIES

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 16, 2008

                               __________

                           Serial No. 110-79


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


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                    COMMITTEE ON ENERGY AND COMMERCE

                  JOHN D. DINGELL, Michigan, Chairman
HENRY A. WAXMAN, California         JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts        Ranking Member
RICK BOUCHER, Virginia              RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York            FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey      CLIFF STEARNS, Florida
BART GORDON, Tennessee              NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois             ED WHITFIELD, Kentucky
ANNA G. ESHOO, California           BARBARA CUBIN, Wyoming
BART STUPAK, Michigan               JOHN SHIMKUS, Illinois
ELIOT L. ENGEL, New York            HEATHER WILSON, New Mexico
ALBERT R. WYNN, Maryland            JOHN B. SHADEGG, Arizona
GENE GREEN, Texas                   CHARLES W. ``CHIP'' PICKERING, 
DIANA DeGETTE, Colorado              Mississippi
    Vice Chairman                   VITO FOSSELLA, New York
LOIS CAPPS, California              STEVE BUYER, Indiana
MIKE DOYLE, Pennsylvania            GEORGE RADANOVICH, California
JANE HARMAN, California             JOSEPH R. PITTS, Pennsylvania
TOM ALLEN, Maine                    MARY BONO, California
JAN SCHAKOWSKY, Illinois            GREG WALDEN, Oregon
HILDA L. SOLIS, California          LEE TERRY, Nebraska
CHARLES A. GONZALEZ, Texas          MIKE FERGUSON, New Jersey
JAY INSLEE, Washington              MIKE ROGERS, Michigan
TAMMY BALDWIN, Wisconsin            SUE WILKINS MYRICK, North Carolina
MIKE ROSS, Arkansas                 JOHN SULLIVAN, Oklahoma
DARLENE HOOLEY, Oregon              TIM MURPHY, Pennsylvania
ANTHONY D. WEINER, New York         MICHAEL C. BURGESS, Texas
JIM MATHESON, Utah                  MARSHA BLACKBURN, Tennessee
G.K. BUTTERFIELD, North Carolina    
CHARLIE MELANCON, Louisiana         
JOHN BARROW, Georgia                
BARON P. HILL, Indiana              

                              -------

                           Professional Staff

              Dennis B. Fitzgibbons, Chief of Staff
               Gregg A. Rothschild, Chief Counsel
                 Sharon E. Davis, Chief Clerk
             David Cavicke, Minority Staff Director

                                  (ii)




                         Subcommittee on Health

                FRANK PALLONE, Jr., New Jersey, Chairman
HENRY A. WAXMAN, California          NATHAN DEAL, Georgia,
EDOLPHUS TOWNS, New York                 Ranking Member
BART GORDON, Tennessee               RALPH M. HALL, Texas
ANNA G. ESHOO, California            BARBARA CUBIN, Wyoming
GENE GREEN, Texas                    HEATHER WILSON, New Mexico
    Vice Chairman                    JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado              STEVE BUYER, Indiana
LOIS CAPPS, California               JOSEPH R. PITTS, Pennsylvania
TOM ALLEN, Maine                     MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
ELIOT L. ENGEL, New York             SUE WILKINS MYRICK, North Carolina
JAN SCHAKOWSKY, Illinois             JOHN SULLIVAN, Oklahoma
HILDA L. SOLIS, California           TIM MURPHY, Pennsylvania
MIKE ROSS, Arkansas                  MICHAEL C. BURGESS, Texas
DARLENE HOOLEY, Oregon               MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          JOE BARTON, Texas (ex officio)
JIM MATHESON, Utah
JOHN D. DINGELL, Michigan (ex 
    officio)













                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Frank Pallone Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     1
Hon. Nathan Deal, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     3
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     4
Hon. Tim Murphy, a Representative in Congress from the State of 
  Pennsylvania, opening statement................................     5
Hon. Lois Capps, a Representative in Congress from the State of 
  California, opening statement..................................     6
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     8
    Prepared statement...........................................     9
Hon. Tammy Baldwin, a Representative in Congress from the State 
  of Wisconsin, opening statement................................    11
Hon. Jan Schakowsky, a Representative in Congress from the State 
  of Illinois, opening statement.................................    11
Hon. Darlene Hooley, a Representative in Congress from the State 
  of Oregon, opening statement...................................    13
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................    14
Hon. Hilda L. Solis, a Representative in Congress from the State 
  of California, opening statement...............................    14
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................    16
Hon. Edolphus Towns, a Representative in Congress from the State 
  of New York, prepared statement................................    18
Hon. Danny K. Davis, a Representative in Congress from the State 
  of Illinois, prepared statement................................    20

                               Witnesses

Diane Rowland, executive director, Kaiser Commission on Medicaid 
  and the Uninsured..............................................    22
    Prepared statement...........................................    25
Stephanie Thomas, national organizer, co-director, the Institute 
  for Disability Access, ADAPT...................................    43
    Prepared statement...........................................    45
Ralph Gronefeld, president and chief executive officer, Rescare..    83
    Prepared statement...........................................    85
Celine Fortin, associate executive director, the Arc of New 
  Jersey.........................................................    89
    Prepared statement...........................................    91
Aileen McCormick, president and chief executive officer, 
  Amerigroup Texas, Incorporated.................................   105
    Prepared statement...........................................   107
Julie Beckett, director of national policy, Family Voices........   125
    Prepared statement...........................................   128

                           Submitted Material

AARP, submitted statement........................................   148
Autism Speaks, submitted statement...............................   164
National Council on Independent Living, submitted statement......   169

 
      HELPING FAMILIES WITH NEEDED CARE: MEDICAID'S CRITICAL ROLE

                    FOR AMERICANS WITH DISABILITIES

                              ----------                              


                      WEDNESDAY, JANUARY 16, 2008

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:05 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Frank 
Pallone, Jr. (chairman) presiding.
    Members present: Representatives Towns, Eshoo, Green, 
Capps, Baldwin, Schakowsky, Solis, Hooley, Dingell, Deal, 
Wilson, Buyer, Pitts, Murphy and Burgess.
    Staff present: Bridgett Taylor, Purvee Kempf, Amy Hall, 
Yvette Fontenot, Hasan Sarsour, Melissa Sidman, Robert Clark, 
Erin Bzymek, Lauren Bloomberg, Brin Frazier, Brandon Clark, and 
Chad Grant.

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

    Mr. Pallone. The subcommittee hearing is called to order.
    Today we have a hearing on ``Helping Families with Needed 
Care: Medicaid's Critical Role for Americans with 
Disabilities.'' I will recognize myself initially for an 
opening statement.
    Let me begin by welcoming everyone back from our Christmas 
and New Year's break. Today we are meeting--this is actually 
our first hearing of the new year and I realize how important 
this hearing is to so many people.
    It goes without saying that today's hearing is long 
overdue. I now there are many people who are in the audience 
today who have been calling for this hearing for many months 
and even years, and I want to thank you for all the hard work 
you do to advocate on behalf of the disabilities community. 
Today's hearing is about you and your families. It is about 
ensuring you have the services and support you need to remain 
independent members of society.
    Over the years Medicare has enabled millions of Americans 
with a wide range of disabilities to live independent lives by 
providing medical care as well as specialized support and 
services, but in spite of Medicaid's success, over the past 
year the Bush administration has launched an all-out attack on 
Medicaid, issuing a constant stream of regulations that seek to 
reduce the scope and breadth of the Medicaid program, thereby 
restricting its ability to provide for disabled Americans.
    These harmful regulations would, for example, restrict 
States' ability to provide rehabilitative services including 
those designed to enable individuals with disabilities to 
improve their mental or physical capacities and remain out of 
an institution; also, eliminate the ability of schools to 
provide administrative services such as enrollment, eligibility 
counseling and referrals for Medicaid children, and most 
recently, restrict States' ability to help manage the care and 
support services that are crucial to helping Medicaid 
beneficiaries live independently.
    The combined effect of these regulations, should they be 
implemented, would be a loss of billions of dollars for State 
Medicaid programs, thereby putting in jeopardy critical 
services that millions of Medicaid beneficiaries rely upon.
    Now, fortunately, in the recently passed CHIP extension, we 
were able to put a moratorium on the school-based 
administrative and transportation services rule as well as the 
rehabilitation services regulation but that was only a 
temporary measure to halt the administration's attack. If these 
rules and regulations are eventually implemented, they will 
have a disastrous impact on our safety net system's ability to 
provide services for disabled communities across the Nation. I 
am looking forward to hearing from our witnesses today about 
exactly what the impact of these regulations would be should 
they go into effect.
    Today is not only about the administration's misguided 
policies. We also will be discussing a number of bills today 
that can have a positive impact on disabled Americans by 
strengthening Medicaid and offer alternatives to provide 
services for disabled Americans so they can remain in their 
communities. One proposal is legislation I introduced with 
Chairman Dingell and Senator Kennedy, the Community Living 
Assistance Services and Supports Act, or the CLASS Act.
    Currently, there are 10 million Americans in need of long-
term services and support, and that number is expected to 
increase to nearly 15 million by 2020. Most private-sector 
disability or long-term care insurance plans are constrained in 
the insurance protection that can offer at an affordable price 
and neither Supplemental Security Insurance nor Old Age, 
Survivor and Disability Insurance programs have any benefit 
differentials related to the extent and character of the 
disability.
    Because of this, Americans who have, or develop, severe 
functional impairments can only access coverage for vital 
services through Medicaid. These services, however, including 
housing modifications, assistive technologies, transportation 
and personal assistance services are critical to their 
independence, and this fact creates perverse incentive, forcing 
many to live in poverty and remain unemployed so that they can 
qualify for Medicaid. With Medicaid paying 50 percent of the 
cost, increased expenditures on long-term services are expected 
to add $44 billion annually to the cost of Medicaid over the 
next decade.
    And as America continues to age, we are faced with an 
impending crisis in long-term care. With the introduction of 
the CLASS Act last year, I aimed to offer a new approach that 
builds upon our existing safety net system and helps our 
elderly and disabled finance the long-term care they need to 
remain active and productive members of their communities. This 
bill offers a new alternative path. It will create a national 
insurance program to help adults who have or develop functional 
impairments to remain independent and employed, and it also 
gives individuals added choice and access to supports without 
requiring them to become impoverished to qualify.
    I think the CLASS Act is an important step in the evolution 
of public policy because it is a framework based on the 
principles of independence, choice and empowerment.
    We also are going to hear about the Community Choice Act, 
and I see a lot of the orange shirts that indicate--we know 
there is a lot of support for that. That, as you know, was 
introduced by Congressman Davis. It aims to redirect the focus 
of Medicaid services from institutions to home and community 
settings, giving eligible individuals equal access to 
community-based services as to institutional supports and 
enabling people to make their own choices about the care that 
they receive.
    And finally, I also wanted to recognize that Mrs. Capps has 
an important bill that she has introduced, the Direct Support 
Professional Fairness and Security Act, which will provide 
enhanced Federal Medicaid funding to those States that agree to 
match voluntary private direct support professional wages to 
the level of pay for comparable State employees.
    Now, as you know, this hearing is not specifically on any 
of the bills, even those these three bills obviously will be 
highlighted, and other ideas will certainly come up and we 
certainly welcome them, and I again want to commend my 
colleagues for the work on these issues and all the bills that 
they have put forward and thank the witnesses.
    I now recognize the ranking member, Mr. Deal.

  OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Deal. Thank you, Chairman Pallone, for holding this 
very important hearing today.
    The Medicaid Program serves almost 10 million individuals 
with disabilities so I am glad we are taking an opportunity to 
evaluate possible reforms to improve the care of this 
population. Additionally in 2005, Medicaid spent $120 billion 
on individuals with disabilities, so we must be mindful of the 
most effective way to administer our resources.
    For this reason, I have long been a proponent of community-
based services in Medicaid. As part of the Deficit Reduction 
Act, I supported provisions such as cash and counseling, Money 
Follows the Person, and home and community-based care service. 
These programs provide States additional options for providing 
Medicaid-covered services to beneficiaries. Many believe 
community-based care is a cost-effective method, which I agree 
with, which not only can save money but also provides better 
quality care. As someone who with my wife, we took in our 
elderly parents, my mother lost a leg and was in a wheelchair 
and we cared for them for 8-1/2 years in our own home so I am 
very well aware of the importance of being able to be care 
provided in an environment that is considered to be your home.
    For instance, some States have achieved significant savings 
by transitioning beneficiaries out of nursing home facilities 
into community programs like Money Follows the Person and we 
have a very successful program in my hometown called Randy's 
House, named after the son of a close personal friend of mine 
who was injured when he was a very small child and has been 
confined and is able to now live in an independent living 
environment with assistance, and this is the kind of program 
that I think we all need to encourage.
    I have also signed on as a cosponsor of H.R. 1621, the 
Community Choice Act, which, as you know, seeks to provide 
individuals with disabilities increased access to community-
based attendant services through the Medicaid program. I look 
forward to the testimony by our witnesses about some of the 
benefits of this legislation.
    We need to continue to pursue reforms which reverse 
Medicaid's institutional bias that has denied Americans with 
disabilities access to care in their homes. I look forward to 
the testimony of the witnesses today about ways to address this 
problem and the evaluation of some of the programs that we have 
already created.
    I thank all of you for your attendance and look forward to 
the testimony of the witnesses, and with that, Mr. Chairman, I 
yield back.
    Mr. Pallone. Thank you, Mr. Deal.
    Next we have our vice chair, the gentleman from Texas, Mr. 
Green.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman, for holding the hearing 
today on the role of Medicaid and Americans. This is a topic 
many members of our audience have been fighting for many years, 
and I am happy we are taking this important first step to 
addressing the challenges that individuals with disabilities 
face when accessing care.
    Medicaid is the primary way we finance and deliver 
community-based health and long-term services to needy children 
and adults with disabilities. Medicaid offers many services 
that are not covered under traditional employer-based or 
private insurance. For those individuals with disabilities, 
Medicaid is the only way they can access the service they need. 
In some cases, the States have the ability to deliver 
community-based services to children and individuals with 
disabilities. We hear today that many people prefer community-
based services because it offers them the opportunity to remain 
independent in their own homes. This is an important fact that 
many of us who are not disabled take for granted. For those 
individuals, having even a small amount of freedom is 
priceless.
    The issue we face with the current Medicaid system 
regarding individuals who are disabled is that they are forced 
to enter institutionalized care for a period of time before 
they can access community-based services or they are placed on 
waiting lists by States, sometimes as many as 10 years. When 
faced with this daunting choice, many people simply enter 
institutionalization which they do not want. As a cosponsor of 
the Community Choice Act, I am glad we are discussing this 
issue today. For those of us with private employer-based 
insurance, we have the ability to choose what type of care we 
want to receive, whether it is community-based or 
institutionalized. These folks spend years waiting for the type 
of care they would like to receive and most never receive or 
experience home-based and community care unless they forego 
treatment, find help to transition to home and community care.
    On a corollary, I have introduced a bill that is on a 
related topic. People with disabilities are forced to wait 2 
years after they receive a Social Security Disability award 
before they can receive Medicare benefits. Currently, Medicare 
disability waiting period is the second one people have to wait 
for. First, you have to wait months and sometimes years for 
Social Security to make a determination that you are eligible 
for disability. Then after that award you have to wait an 
additional 24 months. Now, Medicaid is typically the health 
care provider during that 24 months but I know we have had this 
bill and Senator Bingham in the Senate had this bill to lower 
that waiting period so it could be Medicare and Medicaid that 
would help people with disabilities. As a result of the 24-
month waiting period, an estimated 400,000 Americans with 
disabilities are uninsured unless they qualify for Medicaid. 
Many more are underinsured during a time when quality health 
care is most critical.
    It is hard to understand why we force these individuals who 
are most in need of treatment to wait for years before they can 
receive much needed care under Social Security, Medicare or 
Medicaid. Seniors, children and people with disabilities are 
the most vulnerable members of our society and we must work 
together to find a solution, offering those who are disabled 
the services they need and at the same time not restricting 
them to the type of care they do not want or take away their 
ability to remain productive members of our society, and again, 
Mr. Chairman, I am glad you called this hearing.
    I yield back my time.
    Mr. Pallone. Thank you.
    I recognize the gentlelady from New Mexico, Mrs. Wilson.
    Mrs. Wilson. Thank you, Mr. Chairman. I will pass and 
reserve my time.
    Mr. Pallone. The gentleman from Indiana, Mr. Buyer.
    Mr. Buyer. I pass.
    Mr. Pallone. OK. The gentleman from New York.
    Mr. Towns. I will waive.
    [The information appears at the conclusion of the hearing:]
    Mr. Pallone. The gentleman from Pennsylvania, Mr. Murphy.

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

    Mr. Murphy. Thank you, Mr. Chairman, for holding this 
important hearing for a group of Americans who too often are 
forgotten. We are here today to discuss the important role that 
Medicare plays in providing care for people with disabilities. 
It gives vital support for the 10 million individuals it 
services. This includes the elderly who have physical 
disabilities and those that suffer with mental illnesses and 
intellectual impairments.
    In my 25-plus years of practicing as a psychologist working 
with many children and families, I know firsthand the 
importance that Medicaid provides to those who struggle with 
mental retardation, autism, serious mental illness, physical 
disabilities. Over those years I have treated many starting in 
their infancy when their disabilities first began to take note. 
I worked with them as they faced a system that has been best 
characterized by barriers, bureaucracy and battles when it 
should have emphasized independence, not more dependence. It 
should have provided more support and services for self-
sufficiency and not more walls that keep people from being able 
to hold jobs or work in their communities.
    Community-based services increase people's quality of 
living but we know it is also more cost-effective and I hope to 
learn more about that today. With the thousands of patients and 
families that I have treated, I have learned that nobody gets 
better by being denied services and no disability is ever 
treated effectively by being put on a long waiting list. We 
have to have home-based care that is effective, saves money. 
Between 1999 and 2002, the average nursing home payment rose 13 
percent, but in contrast, the average cost per home-based 
patient rose just 2.2 percent. That is not effective. Medicaid 
reimburses nursing homes between $35,000 and $75,000 per 
patient per year and we hear from nursing homes that that is 
often not enough to cover their care, but even so, compare that 
to only $25,000 for the average home-based care patient per 
year. That is not effective. Texas estimated it saved between 
20 to 35 percent in State Medicaid spending, thanks to 
beneficiaries transferring out of nursing homes and into home 
care. I am pleased that Medicaid has shifted resources toward 
helping community and home-based care. The percentage of 
Medicaid funds available to these programs has doubled from 15 
percent in 1992 to 36 percent in 2004 and is probably able to 
provide more access to community services.
    With that said, I am also pleased that Three Rivers Center 
for Independent living back in the Pittsburgh area provides 
such excellent services but--my guess is that a couple are 
here--but there is more we need to be doing effectively. All of 
our hearts go out in compassion to helping those who struggle 
with the barriers of their disabilities but we must do more 
than offer our hearts. We must also work with them because many 
of them are able to provide great ideas of how we can be more 
effective as government working with people to do what Abraham 
Lincoln once reminded us that government should do that which 
people cannot do for themselves, not to increase dependency but 
to work effectively with them so that they can become more 
independent, more effective members of our community, and I 
yield back.
    Mr. Pallone. Thank you. The next is the gentlewoman from 
California, Mrs. Capps.

   OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Capps. Chairman Pallone, thank you for holding this 
very important hearing. The title of the hearing says it all. 
Medicaid provides a fundamentally critical role in the lives of 
people with disabilities and their families, and I am pleased 
to see, building on the statements of the ranking member, that 
this is such a strongly bipartisan hearing and that there are 
many issues that we agree upon.
    There are two specifically important issues that I want to 
address and hope that our witnesses will address as well. The 
first is the impact of the harmful Bush administration 
regulations that affect our ability to properly serve the 
Medicaid population. Particularly I am worried about the impact 
of the regulation regarding school-based health services. This 
is going to have a terribly negative effect on the students 
that I used to work with. Mr. Deal made a comment about his 
personal experience with this legislation. I want to mention my 
years of working as a school nurse and the many, many school 
districts across this country who have students in them 
attending classes according to the guidelines of IDEA and the 
Americans with Disabilities Act in the least restrictive 
environment. They can only do so because of critical services 
provided to them by the school district through special 
attendance. Without reimbursement for transportation and 
administrative costs, school districts will have to scramble 
for ways to provide special-needs children with necessary 
services. As the Children's Health Initiative of Santa Barbara 
puts it, schools are for many students and families the only 
gateway to health services. Furthermore, schools are an 
integral part of conducting outreach in order to enroll 
eligible students for Medicaid services. It is hard to see this 
directive as anything other than an attempt to shut these 
children out. We simply cannot allow these regulations to be 
put into place and take us so many years backwards in the 
Americans with Disabilities Act. I commend our chairman, Mr. 
Dingell, for introducing legislation to protect children's 
health in schools, and I am cosponsoring that bill.
    The other topic I want to address in my opening statement 
regards the importance of community-based care for Medicaid 
beneficiaries with disabilities and the role played by direct 
support professionals who provide that care. There is a crisis 
in workforce recruitment and retention at the same time we are 
seeing such an important shift to promoting community-based 
care. We need to be going in that direction. We need to work 
harder to recruit and retain professional staff. Medicaid plays 
a critical role in providing home and community support, yet 
without an available care-giving workforce many beneficiaries 
will suffer and are already suffering. Caregivers are so vital 
to ensuring individuals can live independently, maintain jobs 
and participate in community activities.
    Unfortunately, one of the biggest barriers to recruitment 
and retention is extremely low wages and compensation provided 
to people who perform these difficult jobs, and I have been 
working with my colleague Congressman Terry and several 
national organizations to improve this through legislation. 
Last year we introduced H.R. 1279, the Direct Support 
Professional Fairness and Security Act. The bill would provide 
funds to States to enable them to increase the wages of direct 
support professionals who care for disabled Medicaid 
beneficiaries. Maintaining a viable care-giving workforce is 
essential to our growing population of individuals living with 
disabilities. I look forward to hearing from our witnesses 
today about these dedicated professionals and the impact of 
salaries on efforts at recruitment and retention.
    I yield back.
    Mr. Pallone. The gentleman from Texas, Dr. Burgess.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman, and in the interests 
of time, I too will submit my statement for the record because 
we do have an impressive panel of witnesses to hear from.
    I would just make a couple of observations. In the late 
1990's I purchased a long-term-care policy on the advice of my 
mother, who said if I didn't buy it when I was young I would 
not be able to afford it when I was old. But one of the main 
selling points was within the State of Texas at that time were 
I to rely upon what was available from the State, the only 
option I would have would be to be placed in an institution 
should I require care for a prolonged disability whereas if I 
had private insurance, I would have the option of community-
based care or home care, and I thought that seemed like a more 
reasonable alternative, so I was grateful to sign up for that.
    I was also grateful under the direction of Chairman Deal 
when we worked on the Deficit Reduction Act that we were able 
then to extend the partnership concept to many more States 
across the country and I am looking forward to the partnership 
concept being enacted in the State of Texas and I think that 
will go a long way towards helping people who have made the 
decision to purchase their own individual disability policy to 
be able to offset the cost of that care or protect assets up to 
the limit of their disability policy, and I think that is a 
powerful too we put in the hands of States to be able to help 
them cope with the growing amount of dollars that they are 
going to have to be devoting in their Medicaid programs to the 
care of individuals who are disabled. We also must understand 
that even though the hearing is focused on community-based 
care, it does not absolve of us any responsibility for 
oversight for those individuals who do not have the option but 
must rely on institutional-based care and that is an important 
part of our congressional oversight.
    On our panel today, I am pleased to note we have two 
individuals from Texas, so I know it is going to be a good 
panel that we are going to hear from today. We have Stephanie 
Thomas, who is from Austin, Texas, and Austin is of course our 
State capital and we all love Austin, and we have Aileen 
McCormick, who is president of AmeriGroup, which is located in 
Houston, Texas, and we all know, even though I am from the 
northern part of the State, that we could not function well in 
Texas without our good friends to the south in Houston and 
Austin, so I welcome both of those witnesses and look forward 
to their testimony, and I will yield back, Mr. Chairman.
    [The prepared statment of Mr. Burgess follows:]
    
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pallone. Thank you.
    I recognize the gentlewoman from Wisconsin, Ms. Baldwin.

 OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF WISCONSIN

    Ms. Baldwin. Thank you, Mr. Chairman, and I very much 
appreciate the fact that you are holding this hearing today.
    Clearly we need to do a lot more to rebalance our system 
and the institutional bias in Medicaid, and I am an 
enthusiastic and strong supporter of the Community Choice Act. 
This bill would make community-based attendance care services 
an alterative for Medicaid beneficiaries who are 
institutionally eligible, or to put it more succinctly, the 
bill would allow Americans with significant disabilities the 
choice of living in their community among family, friends and 
other support givers rather than having to live in a nursing 
home or other institution. Now, I am proud to share that my 
home State, Wisconsin, has provide to those on Medicaid the 
option of community-based care for over 25 years. In 1981, we 
enacted a program called COP, the Community Options Program, in 
an effort to provide individuals with the option to live in the 
community. This program became an official Medicaid waiver 
program in 1987 and has been extremely popular. Unfortunately, 
though, there is a significant waiting list to get into the 
program, and when push comes to shove during State budget 
discussions, State legislators facing limited resources 
frequently turn to discretionary programs such as community-
based care as places to trim State budgets. Because 
institutional care in Medicaid is a mandatory program and 
community-based care is not, they focus on the community-based 
care. And these cuts coupled with very long waiting lists mean 
that even though we have this great program, there is still way 
too many people who are denied the choice of where to receive 
their care. The Community Choice Act would provide States with 
the financial assistance needed to once and for all end the 
institution bias in Medicaid and establish systems that provide 
services and support in the most appropriate and integrated 
setting.
    I want to thank you, Mr. Chairman, again for holding this 
hearing and allowing us the opportunity to delve much further 
into these important issues, and I also really want to thank 
and appreciate the many disability rights advocates who have 
been such great champions on this issue. Certainly there are 
many right here in this room this morning but I also know that 
many across the country are watching and participating in this 
hearing via the Internet, and your commitment to this issue is 
very inspiring to all of us and we are very glad to have you 
join us, whether in person or via the Internet.
    Thank you, Mr. Chairman, again.
    Mr. Pallone. Thank you.
    I next recognize the gentlewoman from Illinois, Ms. 
Schakowsky.

 OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you, Mr. Chairman. I am so glad that 
we are starting off the second session of the 110th Congress in 
this committee with such an important topic, the provision of 
long-term care for low-income individuals and individuals with 
disabilities.
    We have a lot to discuss today and some wonderful witnesses 
to hear from but I do want to take a moment to just recognize 
and thank all the advocates who have joined us here and around 
the country. You have worked long and hard for this day and it 
is because of you that we are here. I thank you for being here 
or listening in and thank you for your tireless work.
    While we are having this hearing in a health subcommittee, 
actually it also would be appropriate if this were a human 
rights or a civil rights hearing as well because these issues 
extend into the whole area of quality of life. I have in my 
office over my shoulder a drawing of Justin Dart, really the 
father of the independent living movement, and I want to 
recognize his wife who is here today and has carried on that 
legacy as all of you are representing today.
    As the primary source of public financing for long-term-
care services and support for low-income individuals and 
individuals with disabilities, Medicaid provides long-term care 
services and support for over 8 million non-elderly people with 
disabilities and 5 million seniors, many of whom have 
disabilities. With the increasing demands of an aging 
population, a generation which is expected to live longer than 
ever before, the ability of Medicaid to provide quality, 
appropriate long-term care services is essential. And while the 
majority of Medicaid dollars used to serve this population 
still goes to institutionalized care, there has been both a 
shift in spending and an interest in directing more of those 
dollars toward home- and community-based service. This is an 
important trend and one that as a committee we must listen to. 
Individuals with disabilities want to and deserve control over 
where and how they receive care and support services. But the 
question shouldn't be just one of institutional care versus 
community care but rather of providing the resources and 
choices that people need throughout the entire continuum of 
care so that people get the care that they need and that they 
desire. Unfortunately, what we are seeing is an administration 
that prefers to reduce the pot for all rather than expand it. 
The Olmstead decision reflected the need to provide a full 
range of choices across the continuum, and I am glad that we 
will be discussing the Community Choice Act, which I know is of 
great importance to many of my constituents.
    I would like to request, Mr. Chairman, for unanimous 
consent to include Congressman Danny Davis's statement for the 
record. He is a sponsor of this bill which would provide 
alternatives to institutions and support the momentum for 
individual choice.
    Mr. Pallone. So ordered.
    Ms. Schakowsky. Unfortunately, rather than moving in that 
direction, this administration is trying to limit those choices 
through misguided regulations. Though a number of States that 
use the Medicaid rehabilitation services option to serve people 
with mental illness has increased significantly in recent 
years, the administration has issued a regulation that would 
place serious limitations on the kinds of services allowed 
under this program effectively restricting the rehabilitation 
services available to people with mental illness. The 
administration has also issued a regulation to reduce the 
capacity of case management services for children in foster 
care and people with disabilities, services which help 
beneficiaries access needed medical, social, educational and 
other services that help them re-enter or remain a part of 
their community. And finally, I want to also mention the 
administration's efforts to terminate schools' ability to serve 
children with special needs by eliminating reimbursement for 
transportation services. These regulations are offensive and 
misguided, and I look forward to addressing them as soon as 
possible.
    Again, I want to say how grateful I am for the advocates. I 
also welcome all of our witnesses and look forward to hearing 
from them. This is an extremely important discussion that we 
will have today, and with that, I yield back, Mr. Chairman, and 
thank you very much.
    Mr. Pallone. Thank you.
    The gentlewoman from Oregon, Ms. Hooley.

 OPENING STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Ms. Hooley. Thank you, Mr. Chairman. I am very pleased the 
subcommittee is holding this hearing today. The issues 
affecting Americans with disabilities far too often remain out 
of the spotlight. Thanks to you and Chairman Dingell, we now 
have an opportunity to discuss these important issues.
    Medicaid plays a vital role for the 8 million Americans 
with disabilities enrolled in the program. Medicaid provides 
not only traditional medical care through hospitals and 
doctors' offices and nursing facilities but also equally 
important services to help those with disabilities remain and 
maintain their independence. Those latter services include 
personal care and home- and community-based services that allow 
many people with disabilities the opportunity to live in less 
restrictive settings than would be possible without assistance. 
Medicaid must provide services effectively to beneficiaries 
with a wide range of disabilities including those with 
developmental disabilities, physical disabilities and 
intellectual disabilities. In order to ensure the needs of 
beneficiaries are met, Medicaid must be flexible enough to 
adapt to groups with needs as diverse as the disabilities that 
enable them to qualify for the program.
    The Centers for Medicare and Medicaid Services have 
unfortunately taken steps recently to limit the flexibility in 
my State, Oregon, but other States as well, to meet the needs 
of people with disabilities. As a former teacher, I want to 
express my concern with the CMS rule that will eliminate 
reimbursement for school-based administration and 
transportation services. These transportation services play an 
important role in filling gaps in services to ensure children 
with disabilities can receive the same caliber of education as 
other students. School-based transportation services provided 
by Medicaid are very important but are still covered in only 
rather limited circumstances. But CMS has refused to continue 
providing even the limited range of services currently covered. 
No change to the underlying law has been made since 1988 when 
the agency began covering these services. CMS has nonetheless 
chosen to eliminate this important and narrowly tailored 
benefit for children with disabilities.
    I am also concerned with significant new limitations on 
targeted case management, which are services designed to help 
Medicaid beneficiaries transition from institutions into the 
community. The CMS interim final rule on targeted case 
management would limit beneficiaries to case management service 
of only 14 days for those who have been in an institution for 
up to 6 months. In those 14 days, a case manager may have to 
find housing, job placement, personal care services and any 
other service that may be necessary to successfully transition 
a beneficiary into the community. Such tight time constraints 
harm beneficiaries and make it more difficult for people with 
disabilities to move into less restrictive settings.
    I am anxious to hear from our witnesses about the impact 
these CMS rules will have on people with disabilities and also 
about how proposed legislation discussed today may improve 
services for those with disabilities.
    Thank you again, Mr. Chairman, for this important hearing 
and for the discussion.
    Mr. Pallone. Thank you.
    I next recognize the gentlewoman from California, Ms. 
Eshoo.

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

    Ms. Eshoo. Thank you, Mr. Chairman, for holding this 
hearing. It is encouraging to me and to all of us that the very 
first hearing that the Health Subcommittee would hold in 2008, 
the second half of the 110th Congress, is on this issue.
    We have many discussions on a whole variety of topics here, 
all of them important, but I can't help but think today is 
especially important. We have I think some of the strongest 
advocates from across the country here, and it is great to 
see--this is actually how things get done here is that people 
come here and push very, very hard, so we have to continue to 
see the orange tee shirts here. I can't help but think of what 
my father said for the better part of my life, and that is that 
there is only one class of citizenship in this country, first 
class, and if we are going to live up to that, then we are 
going to challenge the system in terms of what the recent rule 
changes that were adopted and how we strengthen Medicaid.
    Medicaid is batted around by a lot of people but no one in 
this room is going to say that it isn't important. It is the 
last lifeline. It really is what helps to keep people living a 
life of dignity that have disabilities, and so I look forward 
to working with all of my colleagues on this committee on both 
sides of the aisle. If we can spend $10 billion a month on the 
other side of the world, we can fix this.
    Mr. Pallone. Thank you.
    Next, the gentlewoman from California, Ms. Solis.

 OPENING STATEMENT OF HON. HILDA L. SOLIS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Solis. Thank you and good morning, Mr. Chairman. I want 
to thank the witnesses and especially the advocates for being 
here. You know, without you, your voices wouldn't be heard so 
you are to be commended for that. I know many of you have 
traveled from many parts of the country and I want to thank 
those especially representing the great State of California for 
being here as well.
    Many Medicaid seniors and children, as you know, face 
additional burdens including mental illness, physical 
disabilities and challenges with the foster care system. 
Consequently, individuals in our communities who have 
disabilities often need medical, social, education and other 
vital services. Individuals with disabilities have different 
physical and mental conditions and our Medicaid program should 
respect those differences instead of mandating a one size fits 
all.
    I oppose the harmful and restrictive CMS rules regarding 
Medicaid reimbursement. Instead of taking away funding, we 
should be investing in care for the uninsured, low-income 
children who are already eligible for Medicaid or the SCHIP 
program. In addition, reimbursement for transportation is 
needed to help students with special needs. I have seen 
firsthand the importance of Medi-Cal, Medicaid in California, 
and these new rules which would have a devastating effect on 
children in my district. The CMS final rule would result in a 
loss of $9 million to the Los Angeles Unified School District, 
the second largest district in the country. LA Unified would 
lose $7 million in funding to Medi-Cal administrative 
activities which include outreach, enrollment activities and 
referral to Medicaid-eligible services. LAUSD expects to lose 
about $2 million in funding for transportation services for 
children who access Medicaid services right now at our schools. 
This cut would reduce the availability of vital Medicaid 
services to the most vulnerable populations, and I have heard 
firsthand from our school that they will continue nevertheless 
to transport our students who need this care without Federal 
reimbursement but of course that means that money is going to 
have to come from somewhere else, and that is really 
unfortunate. At this time when States like California are 
facing dire economic conditions, our Federal Government has a 
responsibility to help our children.
    I am deeply concerned about the impact of CMS's regulations 
for individuals who need case management to successfully 
transition from an institution to the community. A transition 
into the community, as you know, is a very difficult and 
complex process that involves multiple people and services. Our 
providers can't wait for determinations for successful 
transition and then to be reimbursed after. In addition, if we 
truly want to support individuals to stay out of institutions, 
States should have the ability to provide rehabilitative 
services and not face additional obstacles imposed by CMS.
    I look forward to working with my colleagues on both sides 
of the aisle to remedy this situation, and I look forward to 
hearing from our witnesses today, and again, congratulations to 
the advocates. I yield back the balance of my time.
    Mr. Pallone. Thank you.
    I recognize the chairman of our full committee, Mr. 
Dingell, but I would like to point out that it was Mr. Dingell 
who has been pressing very hard that we have this hearing 
today, and so we do have to thank him for that. I recognize the 
chairman of the full committee.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Dingell. Thank you, Mr. Chairman, for your kind words 
and I commend you for this hearing, and I thank you for your 
leadership in this matter.
    I would like to begin by welcoming our visitors and guests 
today. Thank you for being with us today. I would like to 
observe that your presence is helpful and I want to observe 
that the committee is going to do its best to move forward and 
see to it that we address your concerns today. I am compelled, 
regrettably, to advise you that there are rules of decorum with 
regard to the behavior of witnesses and members of the 
committee when they are present, and that does preclude, I 
regret, applause or other signs of approval or disapproval. So 
I hope that you will feel welcome and want you to know that you 
in fact welcome. But I would ask that you observe the rules of 
the committee and that we not have applause or other signs of 
approval or disapproval because it is not in conformity with 
the rules of the House or the rules of the committee or the 
dignities that this particular institution should have.
    Having said that, our hearing today is going to focus on 
critical sources of concern and critical sources of healthcare 
for Americans living with disabilities. I refer to the Medicaid 
program. Millions of people with disabilities, seniors in 
nursing homes, children born with birth defects, children who 
are otherwise hurt, people struggling with mental illness or 
intellectual disabilities, and adults who disabilities occur 
later in life depend on Medicaid for needed services including 
services nowhere else available, especially from existing 
sources of insurance. Medicaid provides about 40 percent of the 
long-term-care services delivered in this country and covers 
nearly half of all nursing home expenditures in the United 
States, making it the Nation's largest single payer of 
healthcare, particularly in the long-term care.
    One of the challenges that we face in the country is how to 
improve access to the services in the community rather than to 
require admission to nursing homes to receive them. Those who 
receive community-based services have an improved quality of 
life and are better able to live a decent life and to do so 
near family and friends. States have taken steps to improve 
availability of community services. The Money Follows the 
Person demonstration which provides States one year of enhanced 
funding for each person to transition back into the community 
is indeed a good first step. This has been a very, very 
interesting thing but it has been unfortunate that a person 
must first live in an institution 6 months in order to be 
eligible for this transition program. It appears to be very 
counterproductive of the goals that everybody follows. The 
availability of waivers and the new State option to provide 
community- and home-based services without waiver provides 
critical tools for transition to community care but again, the 
income and resource thresholds often mean that people with 
disabilities must choose between better paid employment and 
health services that allow them to remain in the community and 
yet tens of thousands of people are on waiting lists for waiver 
places, nearly 260,000 in the year 2005, a clear indication of 
the need and the workability of these programs and the need to 
expand them.
    Unfortunately, while States have been making progress at 
transitioning individuals back into their communities, the 
administration is trying to hold this kind of progress back 
rather than to move it forward. It has proposed regulations 
that seriously curtail or eliminate the ability of people 
living in communities with disabilities to receive needed 
services. For example, limiting transition and transportation 
services for disabled children who receive health services in 
schools and restricting rehabilitation services to those with 
long-term disabilities because they may never fully recover is 
shortsighted and a source of harm for those affected by such 
regulations, and I want to repeat, the denying of long-term 
services to people with disabilities because they may never 
fully recover is, in my view, an outrageous thing which is 
indefensible in any company.
    I again thank the witnesses who are here today. Their 
testimony is going to detail the challenging task of improving 
community options for people with disabilities. Medicaid has 
given us a fine foundation but more work is needed to update 
its provisions. Again, I welcome our visitors and guests who 
are present at this hearing or watching the broadcast of these 
matters. I am pleased and I am sure all the members of the 
committee are pleased that you are here and I commend you for 
your efforts in this worthy endeavor.
    Mr. Chairman, I thank you for your kind recognition of me.
    Mr. Pallone. Thank you, Mr. Chairman, and that concludes 
the opening statements by members of the subcommittee. Other 
statements will be accepted at this point in the record.
    [The prepared statements follow:]



    
    Mr. Pallone.We will now turn to our witnesses, and we have 
one panel and you are all seated, so I want to welcome you 
first of all, and let me introduce each of the panel members 
here.
    First is Dr. Diane Rowland, who is executive director of 
the Kaiser Commission on Medicaid and the Uninsured from here 
in Washington, DC. And then to her right is Stephanie Thomas, 
who is national organizer for ADAPT and co-director of the 
Institute for Disability Access. And then we have next to her 
Mr. Ralph Gronefeld, who is present and chief executive officer 
of ResCare. He is from Kentucky. And then we have from my own 
State, Celine Fortin, who is associate executive director of 
the Arc of New Jersey from North Brunswick, New Jersey, and I 
want to particularly thank her because she was part of a 
roundtable that we had during the break in New Jersey earlier 
this week where I was trying to get an idea of how some of 
these Medicaid rules are directly impacting New Jersey. So 
thank you for being here and coming a second time for me. And 
then we have to her right is Aileen McCormick, who is president 
and chief executive officer of AmeriGroup Texas Inc. She is 
from Bellaire, Texas. And finally is Julie Beckett, who is 
director of National Policy for Family Voices and she comes 
from Cedar Rapids, Indiana--no, Iowa, Cedar Rapids, Iowa. I 
should know that after the Iowa caucus.
    Let me just mention, we have 5-minute opening statements 
from the witnesses. Those statements will be made part of the 
hearing record. Each witness may in the discretion of the 
committee submit additional brief and pertinent statements in 
writing for inclusion in the record, and I will start by 
recognizing Dr. Rowland. Thank you.

    STATEMENT OF DIANE ROWLAND, EXECUTIVE DIRECTOR, KAISER 
            COMMISSION ON MEDICAID AND THE UNINSURED

    Ms. Rowland. Thank you, Mr. Chairman and members of the 
committee. I am very pleased to join you today to discuss the 
evolution and current role of Medicaid for people with 
disabilities and the many challenges we have in meeting the 
diverse and extensive service needs of this population.
    As you well know, the Medicaid program is our Nation's 
major public health coverage program, today covering some 58 
million low-income Americans including 8 million persons with 
disabilities and 6 million low-income, frail, elderly and 
disabled Medicare beneficiaries who rely on Medicaid to fill 
Medicare's gaps. Medicaid is indeed a vital safety net for 
millions of Americans but a lifeline for many people with 
disabilities.
    Since its enactment in 1965, Medicaid has been a 
predominant source of assistance to people with disabilities. 
Over the years a national floor for eligibility and common 
definition of disability was established with the 
implementation of the Federal Supplemental Security Income cash 
assistance program in 1972. Assistance in the community and at 
home has become more available as an alternative to 
institutional care over Medicaid's history. Improvements have 
been made in the quality of care in nursing homes and 
assistance was provided to enable people with disabilities to 
return to work while retaining Medicaid coverage.
    To be covered by Medicaid, individuals must meet, however, 
both restrictive income and asset requirements and have a 
condition determined to be permanent disabling. The average 
income level for eligibility is $7,500 a year with an asset 
level of $2,000, those embodied in the SSI cash assistance 
program. As a result, Medicaid is unable to cover people at 
higher income levels. The Medicaid disability population is 
diverse with a wide range of conditions and limitations 
including children with intellectual and developmental 
disabilities such as mental retardation and autism, young 
adults with spinal cord and traumatic brain injuries, HIV/AIDS 
or serious mental illness and older people with Alzheimer's or 
severely disabling chronic diseases such as diabetes and 
pulmonary disease. The needs of people with disabilities are 
extensive and complex, requiring many types of health services 
and support that are not traditionally covered by other sources 
of insurance but needed to maintain function and in some cases 
independence. Of the $103 billion dollars in Medicaid spending 
for people with disabilities in 2004, 38 percent was for long-
term-care services, 19 percent for prescription drug coverage 
and 43 percent for medically related care, especially including 
mental health services often uncovered in other programs. 
Medicaid's strength has been its ability to provide a continuum 
of care and a wide range of supportive services.
    Although Medicaid is principally recognized as a source of 
health insurance coverage for millions of low-income children 
and parents, the program is indeed the largest source of health 
insurance and long-term care for people with disabilities. 
Seniors and people with disabilities comprise only a quarter of 
enrollees in Medicaid but account for 70 percent of all program 
spending. The average per-person cost for persons with 
disability in 2004 was $12,364 compared to less than $1,500 for 
non-disabled children and a per capita expense of less than 
$2,000 for non-disabled adults. Moreover, the concentration of 
spending is very linked to high-cost beneficiaries. High-cost 
disabled beneficiaries incurring over $25,000 a year in 
expenditures represented 2 percent of overall Medicaid 
enrollees but accounted for one quarter of all program 
spending.
    Medicaid plays a critical role in providing health services 
to people with disabilities by filling in the gaps in Medicare 
and private insurance and going beyond the medical model to 
offer a broad array of services needed by people with severe 
disabling conditions. Doctor visits and prescription drugs 
alone are insufficient to enable an individual with severe 
paralysis to get a job. Personal assistance, medical assistance 
devices, transportation and other assistive devices all covered 
by Medicaid are essential adjuncts to medical care. Extended 
eligibility for Medicaid coverage to individuals without 
requiring impoverishment can help to stimulate broader access 
to community-based care and enable people with disabilities to 
work without fear of losing the Medicaid support they need to 
function.
    One of Medicaid's biggest challenges, however, in meeting 
the needs of people with disabilities has been that there are 
differences in functional and financial eligibility criteria 
between nursing home and community-based care that has steered 
people with disabilities into institutional settings. Consumer 
demand and the Olmstead decision have helped to promote 
expanded access to home- and community-based services. Through 
home- and community-based waivers now, Medicaid is helping 
nearly 3 million people to be able to receive care in the home 
rather than in an institution setting but more options are 
needed. Some 280,000 people were on waiting lists for home- and 
community-based services in 2006. Institutionalization should 
not be the admission ticket to home-based services under 
Medicaid.
    The Medicaid experience, however, clearly demonstrates the 
importance of providing a broad range of health and long-term 
care coverage for the population with disabilities and 
documents the lack of alternative forms of assistance. 
Reformers should build on the progress that has been made in 
providing coverage and access to care for those with 
disabilities and exercise extreme caution when making changes 
that could affect the health and well-being of many of our 
Nation's poorest and most disabled citizens.
    Thank you very much.
    [The prepared statement of Ms. Rowland follows:]



    
    Mr. Pallone. Thank you, Dr. Rowland. And I didn't stop you, 
but I should remind everybody 5 minutes if you can. And next is 
Ms. Thomas.

STATEMENT OF STEPHANIE THOMAS, NATIONAL ORGANIZER, CO-DIRECTOR, 
           THE INSTITUTE FOR DISABILITY ACCESS, ADAPT

    Ms. Thomas. Thank you for the opportunity to be here. I 
appreciate also the opportunity to speak on behalf of ADAPT, a 
national grassroots disability rights organization.
    Many of ADAPT's members have done time in nursing homes and 
other institutions, basically becoming a cash crop for an 
industry that wants to draw down dollars. Living in an 8 foot 
by 8 foot room with a stranger, being told when to get up, when 
to go to bed, what and when to eat, basically your life is not 
your own. I have been told many times I would rather die than 
go back. I have never in my life heard someone say I am looking 
forward to moving into a nursing home. Those who got out did 
not get better from their disabilities; they got out, and that 
is simply it, and they now live in the community with attendant 
services. They had to fight their way to get out for the most 
part to live in the community. We know of children born with 
disabilities who have been forced away from their families and 
into institutional placements. Children belong in families, not 
in institutions. Being institutionalized by one's own choice is 
one thing but being trapped there because you have no 
alternatives is something very different. According to CMS's 
own numbers, nationally over 300,000 people in nursing homes 
alone have expressed a preference for home- and community-based 
services yet they are stuck inside. They do not even count 
those trapped in other institutions and those in the community 
scraping by as they wait year after year to move up on a 
waiting list.
    I urge you to take action. Words are great and what you 
said today was wonderful to hear but we need action. Pass H.R. 
1621, the Community Choice Act. Squarely address the 
institutional bias in long-term care. Medicaid has helped 
millions of people with disabilities of all ages to achieve 
independence, dignity and health but awareness and values of 
our Nation are changing, and as medical breakthroughs promise 
more independence, the glaring problem of the institutional 
bias grows more pronounced. Even Money Follows the Person, a 
wonderful and important new demonstration program funded in the 
DRA, requires that people have to be in an institution to get 
out and receive services. You should not have to go in to get 
out nor should you be stuck inside because people want a better 
solution.
    Our current system is backwards. Services are fragmented 
and based on disease categories and age instead of on 
functional need. The institutional bias has led to a system 
wherein institutional services are mandated and the community 
is optional for 63 percent of the Medicaid long-term-care funds 
go to institutions and just 37 percent are left for community 
services, all the community services, despite the facts of long 
waiting lists, sometimes as long as 10 years. Ironically, the 
same community services cost only about two-thirds of their 
institutional equivalent on average. We hear about the fear of 
the woodwork effect. This is an insulting term that actually 
refers to the unmet need of real live human beings. We are not 
cockroaches and this is not pest control. Forcing people to 
live and get by on nothing is neither good policy nor does it 
solve the money issue in the long run. Many States would like 
to even the playing field but the Federal entitlement to 
nursing homes alone stops them.
    The Community Choice Act would help to improve the services 
in nursing homes and other institutions as it would give them 
real competition. Over 700 organizations from across this 
Nation have signed on supporting the Community Choice Act, over 
700. The bill is based on a simple concept. It allows 
individuals eligible for services in a nursing facility, ICFMR 
or IMD the opportunity to choose instead a new alternative, 
community-based attendant services and supports. CCA makes an 
existing mandated service more flexible to meet the needs of 
those who are currently eligible for its services. You could 
even use these services in schools. It doesn't force anyone to 
move out nor does it close any facilities, as some have 
claimed. It simply gives people a choice. In addition, the 
Community Choice Act assists States to reform their long-term 
services and supports. Women take heed: the vast majority of 
people in nursing homes, over 70 percent, are women. The vast 
majority of the underpaid direct care workers are women, over 
70 percent, and the vast majority of those who provide free 
care are women. Is this issue swept under the rug completely 
because of this? I don't know, but I do know that most of you, 
men and women alike, will have to face this issue in the near 
future. I faced it when my father-in-law came to live with my 
husband and me, a diabetic who had a stroke, he stubbed his 
toe, and in the end he had to have both of his legs amputated. 
His eyesight was going and so was his memory of things like 
whether the stove was left on. Professionals urged us to put 
him in a nursing home but he lived with us with attendant 
services, but today he would be at the bottom of an over 
40,000-person waiting list. He wouldn't have reached the top 
before he passed away.
    As America grays, this issue grows larger and larger. It is 
not a question of if we will be dealing with long-term care; it 
is a question of how we will be dealing with it. Like most 
monsters under the bed, once we confront it we will find that 
it is not what we feared.
    One more thing. Even as CMS encourages the States to assist 
people who want out of nursing homes or other institutions to 
move out, a great thing, it has bizarrely decided to cut case 
management services by almost 70 percent. This assistance is 
vital. This devastating cut shows the lack of understanding in 
the reality of people's lives and it distorts priorities. You 
need to reverse this terrible decision on case management and 
reverse the overall institutional bias in Medicaid. Passing the 
Community Choice Act is an important piece in this overall 
effort, so please pass it.
    Thank you for the opportunity to speak today.
    [The prepared statement of Ms. Thomas follows:]



    
    Mr. Pallone. Thank you, Ms. Thomas. I am going to ask again 
that, everyone is running over, try to limit it to 5 minutes. 
Next is Mr. Gronefeld.

  STATEMENT OF RALPH GRONEFELD, PRESIDENT AND CHIEF EXECUTIVE 
                        OFFICER, RESCARE

    Mr. Gronefeld. Good morning, Chairman and members of the 
subcommittee. Thank you for inviting me to be here today.
    It has been our privilege to provide services to people 
with intellectual and developmental disabilities in nearly 
every setting for more than 30 years. During that time we have 
been a Medicaid paid provider and have successfully forged 
public-private partnerships in 37 States. We also operate job 
centers, workforce and one-stop services and provide home care 
to senior citizens. We are a human services company whose 
mission is to maximize independence for all populations who 
rely on us. We serve more than 65,000 people every day with 
more than 42,000 dedicated employees.
    The efforts by Congress, the administration and the States 
to rebalance the long-term-care system to more home and 
community services have led to more flexibility, individual 
control, desirable options and cost-effective services. As you 
know, Medicaid is the only funding source for services to most 
individuals with disabilities. The Medicaid budgets are 
strapped. The demand for services is exploding while at the 
same time the available workforce is shrinking.
    For years individual States have essentially been running 
pilot programs testing different waiver options. Currently 
there are hundreds of waivers spread through 50 States and yet 
in some States there remains significant deterrence to home and 
community services. States continue to fund institutional 
services at higher rates, offering cost reimbursement, room and 
board subsidies and other incentives that are not given to 
waiver services. At the same time, many of the waivers have 
become overly complex, inflexible and very expensive. As the 
cost of care rises, States have responded by limiting services, 
restricting eligibility and reducing payments. Under these 
pressures, the waiting lists have grown along with Medicaid 
budgets and services to those with disabilities who must look 
at all models of care and find the few that provide the best 
outcomes for the most people. We must move away from models 
that are ineffective and costly.
    Refining our service models is one solution but the 
greatest challenge to all services is the Nation's workforce 
crisis. We must have a competent and caring workforce. Any 
discussion of changes or improvements to Medicaid policy should 
focus on this fundamental issue. High turnover rates, low 
wages, shortage of available workers and increased demand are 
pervasive problems for families, individuals receiving services 
and the people who provide those services. Barely 10 percent of 
the 4.3 million people with intellectual and developmental 
disabilities receive Medicaid services. That 10 percent demands 
on more than 874,000 caregivers. By 2020, we will need nearly a 
million and a half workers. That is a 37 percent increase in 
need but there will be a corresponding decrease in the number 
of people available to do the jobs. Soon we won't be able to 
find the people willing to care for the individuals that we 
serve.
    One solution to the workforce crisis is the Direct Support 
Professional Fairness and Security Act, H.R. 1279, which was 
reintroduced in the 110th Congress by Representatives Lois 
Capps and Lee Terry. This bill, which now has 107 cosponsors, 
gives States a much-needed option to secure additional Federal 
Medicaid dollars for the workforce. This bill is an investment 
in a workforce that is needed to ensure the stability of home- 
and community-based services.
    Congress should also consider legislation to develop 
incentives such as training programs and career advancement 
opportunities which would enable more people to enter this 
field. Such efforts should make better use of the public 
workforce system by getting the Department of Labor to change 
its guidelines for civil employment and recognize direct 
support professional as an accepted job classification.
    We also need to address our service models to more 
effectively use our workforce. New models of care such as ones 
that use technology to provide safe, secure services with fewer 
caregivers can be the answer. An example is Rest Assured, which 
is currently being piloted in Indiana which is a public-private 
partnership between ResCare, the Wabash Center, a nonprofit 
organization, and Purdue University. It is a web-based telecare 
system that is proved to be very successful. Through this pilot 
we have found that individuals who receive remote care-giving 
services show greater satisfaction with the added independence 
they experience. Savings can be realized that would enable us 
to serve more people for the same amount of money.
    There are many people and organizations involved in 
providing services and supports to those with intellectual and 
developmental disabilities. I ask that providers been included 
in the search for solutions. The challenges I am suggesting 
today can assure the safety, security and independence for 
those we serve, simply the system, therefore it would be more 
cost-effective, standardize best practices, therefore providing 
better outcomes, and attract committed, dedicated caregivers.
    Thank you for your time today. I will be happy to answer 
questions to provide additional information.
    [The prepared statement of Mr. Gronefeld follows:]



    
    Mr. Pallone. Thank you, Mr. Gronefeld, and now Ms. Fortin.

 STATEMENT OF CELINE FORTIN, ASSOCIATE EXECUTIVE DIRECTOR, THE 
                       ARC OF NEW JERSEY

    Ms. Fortin. Good morning. I am Celine Fortin, an associate 
executive director of The Arc of New Jersey. We are New 
Jersey's oldest and largest advocacy organization for children 
and adults with intellectual and developmental disabilities and 
their families. I want to thank Chairman Pallone and the 
distinguished members of the subcommittee for recognizing the 
concerns of this most vulnerable population.
    You have received my written statement so I am only going 
to highlight two issues now: recent rule proposals made by the 
Centers for Medicare and Medicaid Services, CMS, that will have 
a potentially catastrophic impact on individuals with 
intellectual and developmental disabilities, and pending 
Federal legislation that will positively impact this 
population.
    At the outset, it is important to underscore that despite 
improvements that can be made, Medicaid works, and it is a 
critical lifeline for our country's most vulnerable 
populations. For many people with disabilities, Medicaid is the 
only source of funding that helps ensure that they can live and 
work in their own communities and avoid costly and segregated 
alternatives. With that said, we have serious concerns with 
CMS's recent proposed rule changes. First, CMS's interim final 
rule on case management goes well beyond the policies 
established by Congress in the Deficit Reduction Act of 2005. 
The Arc of New Jersey has many concerns with regards to this 
rule, which are included in my written testimony. For example, 
current Medicaid policy provides Federal reimbursement for 
States for transitional case management services for the last 
180 days of an individual's stay in an institution. This 
funding is critical to ensure that people move from 
institutions into community settings successfully. The interim 
final rule reduces reimbursement from 180 to 60 days, which is 
not even close to sufficient for these difficult transitions.
    Second, CMS's proposed rule on rehabilitative services is 
also of great concern as it creates new obstacles for Medicaid 
beneficiaries to receive medically necessary rehabilitative 
services. The proposed rule would severely harm people with 
intellectual and other developmental disabilities by 
eliminating longstanding day rehabilitation programs for many 
people with disabilities. It also imposes a discriminatory and 
arbitrary exclusion from receiving many rehabilitative services 
for many people with intellectual disabilities and related 
conditions. These services enhance the independence of people 
with disabilities and removing them is extremely problematic.
    Third, CMS published a final rule to address school-based 
services and transportation. While the final rule is attempting 
to address legitimate policy issues, we believe that it 
constitutes bad fiscal and social policy. The savings to the 
Federal coffers will be miniscule compared to the enormous 
impact on school systems which rely on appropriate Medicaid 
reimbursement to serve children with disabilities. This rule 
will likely result in greater need for Medicaid services and 
expense in the future since services not delivered to children 
can exacerbate their disability and result in more costly 
treatment in adulthood. It is important to note, however, that 
the Protecting Children's Health in Schools Act of 2007 would 
provide a commonsense solution to this dilemma without unduly 
harming school systems and students with disabilities.
    In addition, we would like to thank you, Chairman Pallone, 
for your leadership in securing a 6-month moratorium on 
rehabilitative services and school-based services 
transportation regulations. We strongly urge Congress to either 
extend this moratorium and include the case management 
regulation for at least 12 months or pass legislation to fix 
the policy changes embodied in these Medicaid regulations.
    I would now like to briefly address pending legislation 
that will positively impact people with disabilities. In 
particular, thank you to Chairman Pallone for sponsoring the 
Community Living Assistance Services and Supports Act. The 
CLASS Act creates a national insurance program to help adults 
who have or develop functional impairments so that they may 
remain independent, employed and a part of their community. 
Funded through a modest voluntary payroll deduction, the CLASS 
Act would allow individuals to access supports and services 
without requiring them to spend down their assets and become 
impoverished to qualify for Medicaid.
    A second piece of important legislation which we strongly 
support is the Community Choice Act, which emphasizes person-
centered planning and self-directed services. As you have 
heard, the Community Choice Act is a step in the right 
direction for both the Medicaid program and individuals 
requiring long-term supports.
    The Arc of New Jersey urges Congress to swiftly pass these 
two critical pieces of legislation as well as other legislation 
which I mentioned in my written statement. We look forward to 
working with you, Chairman Pallone and other members of the 
subcommittee, on these and other issues affecting individuals 
with intellectual and other developmental disabilities and 
their families.
    [The prepared statement of Ms. Fortin follows:]



    
    Mr. Pallone. Thank you. Exactly 5 minutes.
    Ms. McCormick.

 STATEMENT OF AILEEN MCCORMICK, PRESIDENT AND CHIEF EXECUTIVE 
                OFFICER, AMERIGROUP TEXAS, INC.

    Ms. McCormick. Good morning, Chairman. I appreciate the 
invitation to be here today and I am from Houston, Texas, but I 
must admit, I got there via New Jersey and specifically 
Middlesex County, where I was born and raised.
    I represent America's health insurance plans. If I may, I 
have expanded written testimony that I would like to submit for 
the record.
    Mr. Pallone. Where were you born in Middlesex County?
    Ms. McCormick. New Brunswick.
    Mr. Pallone. Oh, terrific.
    Ms. McCormick. We are here to discuss the crucial role that 
Medicaid plays in meeting the needs of people with 
disabilities. AHIP is a national trade association composed of 
1,300 health plans which provide coverage to more than 200 
million Americans. More than 300 AHIP plans bring health 
services to almost 20 million people served by Medicaid. I am 
CEO of one of those health plans, AmeriGroup Texas and 
southwest region CEO of AmeriGroup Corporation. Our company 
provides healthcare coverage to 1.7 million people in 10 States 
and the District of Columbia, all of whom are enrolled in 
Medicaid and other publicly funded programs. We have been 
working for 9 years to help Medicaid better serve people with 
disabilities through a nationally recognized program in Texas 
called Star Plus. AmeriGroup's chief executive officer, Jim 
Carlson, recently said, ``We recognize that healthcare is often 
a cause of dependency for people with disabilities. Healthcare 
should not be the end for these individuals, it should be a 
means to an end, in this case, a full, self-sufficient and 
independent life.'' Star Plus has taught us that through 
innovation and hard work, Medicaid can offer Americans with 
disabilities a full, self-sufficient and independent life.
    To explain what that really means, I want to tell you about 
Henry. Henry is 75 years old and lost everything in Hurricane 
Katrina. He relocated to Austin, where he knew no one. He had 
many major health problems including an aortic aneurysm and a 
history of seizures. When he got to Austin, he was suffering 
from dehydration and exhaustion. He was on 11 different 
prescription drugs. He was hospitalized and then went directly 
to a nursing home. Henry didn't want to be there. He wanted to 
take care of himself but he needed a little help. The expansion 
of Star Plus into Austin in February was a catalyst for that 
help. AmeriGroup service coordinators completed a detailed 
individual assessment of the kinds of services Henry needed to 
live independently. Working close with ADAPT, a wonderful 
organization and a valued partner of ours that is well 
represented here today, we helped him find and furnish an 
apartment. We connected Henry with attendant services, Meals on 
Wheels and an emergency response system to support his 
transition to the community. We again worked with ADAPT and 
made sure he saw a doctor and got his prescriptions filled when 
were faced with an obstacle from the nursing home in trying to 
get him out. The result is that 9 months after leaving a 
nursing home, Henry is living on his own and hasn't been 
admitted to hospital care once. He is living the life he wants 
to live, and Star Plus is not only working for Henry, it is 
working as well for Texas taxpayers. By helping Henry avoid 
unnecessary stays in hospitals and nursing homes, Star Plus 
saves a lot of money.
    The Texas Health and Human Service Commission has concluded 
that Star Plus sharply reduces inpatient hospital admissions 
and cuts overall healthcare costs by 6.5 percent. That is why 
after years of carefully nurturing Star Plus as a pilot program 
in Houston, the State recently expanded it to three more major 
metropolitan areas. Enrollment has more than doubled to 
153,000. Star Plus is a rarity in American healthcare, a 
program that helps people live better, healthier lives and at 
the same time saves money. It does this by tailoring the 
healthcare system to fit the needs of individuals instead of 
forcing individuals into institutions that do not offer the 
right care or services for them.
    There are other programs in other States like Star Plus but 
there are far too few of them. Star Plus is one of the oldest 
and most advanced. Others are still in various stages of 
development. We strongly urge Congress to support programs like 
this. For example, AmeriGroup has endorsed the Community Choice 
Community of 2007, House Resolution 1621. It would eliminate 
the historic bias in Medicaid, as has been discussed at length 
here, in institution-based healthcare and fund more community-
based programs like Star Plus.
    We at AHIP understand that Medicaid is not for everyone. 
Those who have adequate financial means must secure healthcare 
coverage that meets those needs. However, millions of Americans 
with disabilities cannot do this alone. As folks have said, 
Medicaid is their lifeline. We must and can make Medicaid work 
better both for Americans with disabilities who depend on it 
and for American taxpayers who finance it.
    Thank you again, Mr. Chairman. I will be happy to take 
questions.
    [The prepared statement of Ms. McCormick follows:]



    
    Mr. Pallone. Thank you, Ms. McCormick.
    And last is Ms. Beckett.

STATEMENT OF JULIE BECKETT, DIRECTOR OF NATIONAL POLICY, FAMILY 
                             VOICES

    Ms. Beckett. Thank you, Mr. Chairman and members of the 
subcommittee. My name is Julie Beckett and I am the policy 
director for Family Voices, a national grassroots organization 
of families and friends speaking on behalf of children with 
special healthcare needs and their families, but in particular, 
I am Katie Beckett's mother, and as you know, Katie was the 
first home- and community-based waiver child in 1981. She sits 
behind me today and about to turn 30 years old, scaring me to 
death, and the important part of this is that we have been 
fighting for this for almost these full 30 years, and what I 
would like to see is something actually done about providing 
home- and community-based care for individuals with 
disabilities.
    Family Voices' families include a number of individuals who 
are transitioning to the adult system of care and who are 
anxiously awaiting a life filled with work and play and active 
participation in their communities. You see, when given the 
types of services needed, many of these children and youth can 
live long and prosperous lives but access to important programs 
such as Early Periodic Screening, Diagnosis and Treatment, 
EPSDT, and special education are critical, especially at an 
early age. Life-and-death decisions depend on access to the 
necessary services required by this very vulnerable population. 
EPSDT provides the best benefit package for our children and 
youth with special healthcare needs. Frequently it is necessary 
to access Medicaid, even if a child or youth has access to 
private health insurance. Private insurance is increasingly 
unwilling to provide access to the types of care that these 
children and youth need. It is only the protection of EPSDT and 
the mandate to cover all medically necessary services that 
guarantees our children access to these necessary services. The 
Federal Medicaid program has taken steps to limit access to 
this vulnerable population by proposing dangerous regulations 
that could limit the important therapies needed to sustain 
mobility and important physical and mental and life-sustaining 
therapies that allow these children and youth to grow in their 
communities and participate actively. These therapies and 
treatments offer the hope of a better future. It also allows 
children and youth with special healthcare needs and their 
families to participate more fully in the life of their 
communities. These services allow us all to experience children 
and youth with special healthcare needs an all they are capable 
of so that we as a society define them not by their limitations 
but by their capacity for success despite their mental and 
physical limitations, and you will note there are several 
stories that I have attached to my testimony. The one about 
Shane Hafely should demonstrate the importance of these 
services.
    The Maternal and Child Health Bureau has just released the 
latest statistics from the National Child Health Survey, which 
is a random telephone interview with households across the 
United States. This survey demonstrates that increasingly these 
children rely on public health insurance because there has been 
no public outcry in response to the denial of medically 
necessary services. There also has been no law passed that 
mandates that when a physician orders treatment or services 
that are medically necessary, that those services should be 
paid for by private insurance. The Maternal and Child Health 
Bureau's goal to achieve a medical home for every child has 
eased some of these concerns as it cuts down on emergency room 
care because they now have a consistent source of care and the 
services are better organized. In fact, the Medicaid commission 
that I was honored to serve on made a recommendation that all 
individuals covered by Medicaid receive their care for ma 
regular source of care as used in the Maternal and Child Health 
Bureau's medical home model. This goal of achieving a medical 
home for every child must not be attached to complicated 
payment structures like those used in managed care. Payment 
incentives can have a negative impact and can limit care that 
should be provided. Again, this demonstrates as shown in the 
Maternal and Child Health Bureau's national survey. Children 
and youth do best when they are part of a medical home and the 
cost of care either stays or the same or decreases as families 
are financially able to provide for the extensive care needs of 
their child or youth.
    This too can apply to adult care when targeted case 
management helps access the right kinds of services necessary 
for an individual to stay in their community and actively 
participate in work. The Family Opportunity Act that was built 
on the Ticket to Work and Work Incentives legislation provides 
for families and individuals with disabilities to access a 
Medicaid buy-in program so that these families and individuals 
are employable when a company does not have to use all of their 
health benefits to pay for services that these workers may 
need. I am proud of the fact that my daughter Katie served on 
the advisory panel for several years and actively participated 
in the beneficiary summit that identified barriers young people 
with disabilities face when forced to remain on the Social 
Security program that present barriers to their work 
participation. The Medicaid buy-in programs give them hope that 
some day they may not have to rely on these outdated programs 
that restrict what individuals can do.
    The Community Choice Act approaches many of these concerns 
but families need options. Improvements in Medicaid delivery 
certainly would provide them with some choice in helping their 
children and young adults survive and prosper. It is agreed 
that it would be much more beneficial to efficiently and 
effectively manage a benefits program that helps our children 
and youth survive rather than relying solely on a cash payment 
subsidy and restrictions that limit their options. I hope that 
you will look long and hard at the final report of the Ticket 
to Work and Work Incentives advisory panel even though this 
committee does not have jurisdiction and think about the 
decisions you make that could impact its success.
    Finally, removing targeted case management from the list of 
options makes no sense nor does restricting school-based 
incentives that help special-education students achieve in 
schools, and of course it makes no sense to limit reimbursement 
for therapies that keep their bodies moving in a direction that 
keeps them able. Again, EPSDT provides for the most essential 
medically necessary services no matter where those services are 
provided. Limiting the nature of this program to simply cure 
would certainly fly in the face of Congressional intent. I 
would hope this committee would examine your options to learn 
more about what these initiatives do and the impact of 
proposals on real lives and real families.
    I have included recommendations for the Subcommittee on 
Health and I certainly hope that you will review those. Thank 
you very much.
    [The prepared statement of Ms. Beckett follows:]



    Mr. Pallone. Thank you, and we certainly will, and that 
concludes our opening statements. Now we will have questions 
from each of the Congressmen and -women.
    I am going to recognize myself for 5 minutes initially, and 
I wanted to start out by asking Ms. Rowland, some have 
advocated making Medicaid look more like private insurance, 
scaling back benefits and raising cost sharing on 
beneficiaries. Others believe in only providing a capped amount 
of money to a disabled individual and letting them contract for 
their own personal care services as maybe a better path. My 
concern is, what happens when States give people vouchers and 
send them off for managed care plans. I know that Kaiser has 
done some work on the Florida experience where unfortunately 
people with disabilities had difficulty in the counties where 
services for people with disabilities were so-called reform. So 
would you tell us about these models, whether they fit the 
needs of the vulnerable beneficiary and then tell us about the 
Florida experience. I am not necessarily trying to put a bad 
light on it but I want you to talk about these options.
    Ms. Rowland. Well, we have clearly seen that the role 
Medicaid plays for people with disabilities is very different 
than what is available through employer-based private health 
insurance or unavailable really through the individual 
insurance market where pre-existing conditions and the cost of 
coverage would keep people from coverage so that Medicaid 
really does provide for both medical care, which is what 
traditional health insurance does, and for all the kinds of 
transportation and long-term-care supports that are necessary. 
So when we look at people who have private health insurance 
coverage and have disabilities compared to those on Medicaid, 
we see that those on Medicaid are far more likely to have 
serious conditions and those with disabilities covered by 
private insurance are less disabled and more able to function 
without additional supports.
    What we have been evaluating and looking at in Florida is 
in the new capitation demonstration where in two counties, now 
extended to five, individuals are given a choice of health 
insurance managed care plans to participate in. Many of the 
people with disabilities have been included in this program and 
they tell us that they were very confused about whether they 
were even enrolled in the program. They were asked to make a 
choice of plans, and the forms they were using looked very 
similar to the forms people got on Medicare part B to choose 
for their prescription drug coverage so there was a lot of 
confusion about where to go. They got enrolled into plans, and 
when they went to their counselors found out that their 
counselors were giving them some misinformation about whether 
they could change or get out, and I think it really does point 
out that while choice of plans may be ideal, information and 
good counseling on what is available through those plans is 
critical. Moreover, in Florida, those plans have the ability to 
adapt the benefit package to live within the capitation rate so 
we are now going back to evaluate after a year whether the 
benefits promised to these individuals when they joined the 
plans were actually realized, and many of the people with 
disabilities have said that the range of services they need 
were not covered within those plans and that some of the 
doctors that they were used to seeing, some were in the plan, 
some were out of the plans, and we know for people with ongoing 
chronic illnesses and severe disabilities, maintaining 
coordinated care from the range of providers they need is 
critical.
    So we really do think one should take great caution in 
changing some of the care arrangements and we think case 
management and a broad range of community-based services is 
perhaps a better way to go than putting people into a capitated 
situation where the plan may not be able to meet their full 
needs.
    Mr. Pallone. I wanted to go to Ms. Fortin because, as you 
know, when we had our roundtable in New Jersey, you talked and 
some there talked about flexibility in the context of 
independent living arrangements versus institutionalization and 
that if there is a certain amount of flexibility, then perhaps 
that allows States and programs to get away from 
institutionalization and more towards independent living.
    Mr. Gronefeld mentioned in his testimony the need for more 
flexibility in Medicaid waiver services and I know when we had 
that roundtable, there was talk about that being a good thing, 
but other times that flexibility may come at the expense of 
beneficiary needs. In New Jersey we have this cash and 
counseling demonstration that was very successful in giving 
people a budget to manage their personal care services but the 
question is, is that good or has that been a problem? Because 
if you have vouchers like they have in Florida, the flexibility 
may actually make it more difficult to get services. So I just 
want you to talk about that in the context, the whole idea of 
flexibility versus caps and how that relates to trying to get 
people to avoid institutionalization.
    Ms. Fortin. Well, I think that we have to balance the idea 
of the flexibility with the oversight, and of course, we are 
very concerned about any system that is in place that has the 
capitation rates. Individuals with disabilities are just that: 
they are individuals and their needs are very individualized 
and we can't look at a program where it is the same for all. 
Our cash and counseling program in New Jersey is a very 
successful program. We feel that the individuals having the 
ability to direct and choose their services has allowed them to 
get the right services for the individual. We also feel that in 
many ways it can be a very cost-effective program as 
individuals are able to choose what meets their needs best. For 
some individuals with significant intellectual disabilities, we 
have some concerns about making sure that there is appropriate 
case management and oversight so that the individual is getting 
the best services that they can and the ones that properly meet 
their needs. So there is a need for a real balance in the 
program as well. But obviously as advocates for people with 
disabilities, flexibility and that whole idea of self-directed 
services is extremely important to us.
    Mr. Pallone. Thank you.
    Mr. Deal.
    Mr. Deal. Thank you, Mr. Chairman. Thanks to all of you for 
your testimony and your presence here today.
    Let us set the stage, because we have alluded to it from 
time to time. When we were working on the Deficit Reduction 
Act, then-governor of Virginia, Mark Warner, was the chairman 
of the National Governors Association, and one of the primary 
motivating forces for the DRA was that Chairman Warner made the 
statement that Medicaid was in a meltdown and he was talking 
about the pressure that was on States to come up with their 
portion of the Medicaid dollars. Now, in that context we still 
have that concern. My concern is that knowing those pressures 
are there both at the State level and at the Federal level, I 
am concerned that when I see statistics like only 15 percent of 
Medicaid enrollment is with people with disabilities, isn't 
that a significant percentage reduction from what Medicaid used 
to be in terms of covering those with disabilities? And when 
those pressures are there on these State Medicaid directors, 
aren't they sometimes put in a position of making choices that 
are not always favorable to those with disabilities? And do we 
need to have some pressure to refocus Medicaid emphasis on 
those with disabilities? I think we seem to have lost some of 
that focus.
    Ms. Thomas, am I on the right track about this, and how do 
we refocus what Medicaid initially was trying to deal with, 
which was in large part the disabled?
    Ms. Thomas. Well, I think that other people that get 
services like children are also very important and needs to be 
done but I think that by passing the Community Choice Act, you 
would allow people with disabilities to pick what they want, 
and because the services are generally less costly in the 
community, you are going to be able to serve more people. What 
happens at the State level now is that they are required to do 
the nursing home services, and I have sat in the conference 
committee rooms where they are struggling with this issue, and 
I can tell you that that mandate creates a barrier, and instead 
of being for people with disabilities or children or other what 
you might call consumers of the services, it winds up being 
about providers, and while providers are essential, if you put 
more of the choice in the hands of the individual to pick the 
kinds of services that they want, then that really helps and 
getting rid of that institutional basis is going to be a big 
step in the right direction.
    Mr. Deal. I was handed during the course of testimony here 
today the Medicaid release that was released the day before 
yesterday, I think, saying that on Friday of this week the cash 
and counseling regulations will be in the Federal Register and 
comment will be open for a 30-day period, and I think that is a 
good indication obviously they are going forward with 
implementing the cash and counseling portion of the DRA and 
trying to shift more money into that area so people can do 
things like decide who they want to hire, who they want to fire 
instead of it being some administrator or some bureaucrat 
making those decisions for them because not everybody who is 
disabled has the--doesn't have the ability to think for 
themselves. They ought to be able to make the choices when they 
want to make the choices, and I think that is in the right 
direction and I would urge all of you to comment on that as it 
opens the comment period as of Friday of this week.
    Let me though go to one thing that--as I told you, for 8-1/
2 years my wife and I cared for our family, our mother and 
father, her mother, who had Alzheimer's, and my mother, who had 
a leg amputated and was in a wheelchair. Her mother and father 
and my mother were all retired schoolteachers so therefore 
their income level, they were never Medicaid eligible but we 
faced the problem of having, how do you get people to help 
because I was up here most of the week. My wife was still an 
active schoolteacher. Trying to find qualified people, and Mr. 
Gronefeld, you mentioned--well, Ms. Thomas too mentioned the 
lack of available personnel to assist, and that is true both in 
the Medicaid setting and in the private pay setting of people 
making these choices. I often ask the question, why don't we 
have some people that are just given the basic training to 
individuals who want to work but they don't know where to go 
and nobody seems to be filling the gap but just basic training. 
It doesn't have to--they don't have to be an RN, they don't 
even have to be an LPN. They just need some basic instruction, 
because not everybody needs that degree of assistance.
    Mr. Gronefeld, what is being done to provide these people 
that we need to fill these slots?
    Mr. Gronefeld. Well, of course, the first thing is 
introduction of H.R. 1279 to provide that funding for workers. 
You know, there is a lot that can be done. One of the biggest 
issues is attracting people to this field. The 42,000 employees 
that we have at ResCare are very dedicated and hardworking and 
mission driven. We explain their job as being the toughest job 
they are ever going to love because they do appreciate what 
they do. They are very dedicated to the folks that they serve 
and that they support and they become part of their family and 
their friends, but one of the issues is the wages, and our--
what we pay in wages is limited by what we are reimbursed. In 
addition to that, there is plenty of programs available now in 
which we could attract future direct service professionals. 
However, because of the requirements within job corps centers 
which we are a contractor and workforce investment services and 
one-stop services, they don't qualify as part of our outcomes 
because of their starting wage rate. The expectation is higher 
than what the starting wage is for direct service 
professionals. So we could currently be training people in this 
field, spending dollars that already exist, that are already 
being spent, not spending any more dollars and yet attract more 
people to the field. Now, that doesn't solve the living wage 
issue. The living wage issue has to be addressed and there has 
got to be ways that we look at addressing that and there is 
many ways to do that, as I mentioned in my testimony. But at 
the end of the day I think there is a lot of people that want 
to do this work. There is a lot of caring people in the United 
States that would be more than happy to provide these services 
but they have to take care of their own families and then that 
becomes an issue.
    Mr. Pallone. Thank you.
    We next have our resident advocate for healthcare 
professionals, Mrs. Capps.
    Mrs. Capps. Thank you, Mr. Chairman.
    I want to thank you each of the witnesses for your 
excellent testimony. It is wonderful to see different stories 
to tell but on the same page. I want to divide my time between 
Ms. Fortin and Ms. Julie Beckett for my time.
    Ms. Fortin, as a nurse myself and having extensively worked 
on critical issues surrounding the nurse shortage, I am 
particularly sensitive to recruitment and retention 
difficulties faced amongst the direct support professional 
service. This is going to be a carry-on after the ranking 
member but I will put it on to you to ask you to see a 
connection between the delivery of quality services and the 
wages of direct support professionals. Help us understand the 
negative impact that low wages have on quality support and on 
the choices people with disabilities have for when and where 
they receive supports, the choices being a predominant theme. 
Just a brief answer on that, please.
    Ms. Fortin. From our experience in New Jersey with 
recruitment and retention of direct care workers reaching 
critical stages, it creates a revolving door for the direct 
care workers to work within the individuals. It affects the 
quality of care. If you have a different person coming in each 
month or each 6 months, that person has to start all over again 
to learn about the significant needs, especially for the folks 
that we work with who have intellectual disabilities. What we 
are looking at in New Jersey is, we have a statewide coalition 
for a direct professional workforce. We are looking at ways in 
which we can professionalize the career of a direct support 
professional through training, through support, and of course, 
we are very, very supportive of the Federal legislation which 
you sponsored because we can see that those funds being able to 
come into New Jersey will help to create added funds to 
compensate the direct care workers. If we are able to stop that 
revolving door of direct support professionals coming through 
the system, we are going to be able to build that base, create 
the stability, and in the long run have the funds. Right now 
just within The Arc of New Jersey, we can look at vacancy rates 
in programs anywhere from 15 to 40 percent in some of our 
residential programs. It costs thousands of dollars every time 
a direct support professional leaves and a new person has to be 
trained. We can take those funds, we can invest them in the 
salaries for the direct care workers and we can begin to catch 
up on that system.
    Mrs. Capps. Such a good response. Thank you. Just for the 
record, what is your greatest competition for qualified direct 
support personnel? Where do they go to work instead of coming 
to work for you?
    Ms. Fortin. They go into the private sector, and not 
necessarily in healthcare.
    Mrs. Capps. Right.
    Ms. Fortin. It pains me very much to hear people say how 
much they love their work but they are going to have to go work 
for a private company in things like administrative support 
just because it pays the bills and it has the benefits.
    Mrs. Capps. Some of our workforce tell me that they get 
recruited by fast food places, and that is a sad day when we 
compare ourselves with the kind of work that you do to sell 
hamburgers.
    Well, I could ask this question of any of you but I want to 
speak now to the disabilities in school. A number of years ago 
there was some controversy with Medicaid services provided to 
children with disabilities in school. Some rather unscrupulous 
consultants traveled around the country, sold States and 
schools a bill of goods with less than satisfactory results. 
This mess was fortunately straightened and things were put back 
on track. However, right after Christmas CMS put out a final 
rule that would severely restrict access to Medicaid coverage 
for certain legitimate activities and particularly specialized 
transportation for severely disabled children who receive 
medical services during the school day in school and 
administrative outreach and enrollment activities to find and 
enroll more children in our schools. Ms. Beckett and anyone who 
would want to comment on what CMS's rule would mean for 
children with disabilities, for example, a child who needed a 
respirator-equipped bus to get to school.
    Ms. Beckett. Well, thank you very much for asking that 
question. I think that the impact in particular would be on the 
types of things that children need such as the therapies and 
all of that. The transportation issue is getting them where 
they can get the best services, and the different requirements 
by different individuals, particularly young children, forces 
school districts to think about instead of serving them in 
school-based programs actually serving them at home, which then 
restricts the socialization and all the things that are 
necessary. So it is extremely important for us to look at what 
this proposal or what this implementation could possibly mean, 
and I would hope that somebody would be monitoring what the 
impact would be, particularly on school districts.
    I just was in Olwine, Iowa--it is about an hour and a half 
north of Cedar Rapids--the other night as they talked about 
closing a particular program for second graders simply because 
of the cost and the mothers who came out in droves saying how 
important it was for them not to think about this as a cost 
issue as much as to think about it as a personal issue for 
their child and that these were children who needed that kind 
of care. It is important for us to think about the types of 
administrative costs that currently schools endure to help 
provide the best special-education services they can for these 
children and their families, and in many ways, in many areas, 
that is the only thing they are qualified for.
    Mrs. Capps. Exactly.
    Ms. Beckett. They are not qualified for Medicaid, they may 
not be qualified for any other program, and it is really 
appalling that we could take that kind of a service away from 
those kinds of kids.
    Mrs. Capps. Thank you so much. In other words, the CMS 
ruling goes directly against the principles of IDEA and so we 
do need to address it, and I thank you for your answer and for 
my time.
    Mr. Pallone. Thank you. We have our other healthcare 
professional on the other side of the aisle here, Mr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman, and I want to take 
just a moment--Chairman Dingell discussed the visitors and 
guests that we have in the hearing today and, Mr. Chairman, 
with your indulgence, I want to point out we have visitors and 
guests from my district back in Texas. Marsha Gray has brought 
her history and government class with her from South Lake, 
Texas, Carroll High School. Is it Carroll High School?
    Mr. Gray. Carroll Senior.
    Mr. Burgess. Carroll Senior High. They wanted to learn and 
see what government looked like firsthand up close and 
personal, and I said it doesn't get any more up close and 
personal than the Energy and Commerce Subcommittee on Health. 
So I appreciate them traveling all the way from Texas to be 
here today and to witness the hearing that we have going on.
    Ms. Beckett, I just wanted to follow up on a point that you 
just made on the CMS rule, and that rule has been put out, the 
notice of proposed rulemaking has gone forward and now that 
rule has been finalized by CMS?
    Ms. Beckett. Yes.
    Mr. Burgess. So this is something that would take 
legislative activity on the part of the Congress to reverse 
that?
    Ms. Beckett. Well, I think there is an opportunity for you 
to address it in a hearing to begin with how the impact itself 
could--we have a current moratorium on it so we have like 6 
months to collect some information about what is going on, and 
I think that would be very helpful if we could look at what the 
impact could be on that.
    Mr. Burgess. Well, just on a structural question, and 
maybe, Mr. Chairman, I should ask you this. Things move with 
such glacial speed around here. Perhaps we could ask for 
another moratorium in the labor HHS appropriations bill when 
that comes up this summer. Is that where this came from, the 
moratorium came from in the first place?
    Ms. Beckett. Yes.
    Mr. Burgess. Mr. Chairman, are you aware, is there an 
actual proposed piece of legislation out there that will deal 
with this rule from CMS, the rule that affects the caregiver 
statute, the levels of funding. Is that correct?
    Mr. Pallone. I am not aware of anything but obviously we 
are trying to address some of these with the committee as well 
but no, I am not aware of any legislation.
    Mr. Burgess. Well, it may be a joint project the committee 
can take up as we approach the appropriation this summer so we 
can get a little bit more time to study what the actual impact 
of this will be and make certain we don't do something in a 
vacuum of knowledge which of course would never, ever happen up 
here.
    Mr. Gronefeld, I wanted to just--and probably Dr. Rowland, 
I need to involve you in this, and I am sorry I stepped out 
when you were talking to Chairman Deal about--or Ranking Member 
Deal about the inflexibility issue. You brought up the point 
and made a point of talking about the inflexibility of some of 
the waivers with which you have to deal and I mean, I will just 
tell you, not having been here that long, but looking at a 
system that provides care to some of the most vulnerable 
citizens in the United States and requires, what, 28 waivers 
for it to work properly? I mean, on the face of it, it is not a 
sound basis that we built it on. But talk to us a little bit 
more about the inflexibility of waivers that you have had to 
deal with.
    Mr. Gronefeld. Well, a lot of the inflexibility that we 
speak of does not necessarily deal with providing services. It 
deals with the administration. It deals with costs that are 
outside of actually delivering the services, the amount of time 
and effort it takes to document the services provided. We have 
seen situations where every 15 minutes a direct support 
professional has to fill out what they have done, which takes 
away from providing care. In Indiana few years ago, they 
actually reduced our rates and cut $14 million out of their 
budget but with that cut, they simplified the system and they 
were able to spend that $14 million to serve more people, and 
what I mean by that is that they went to a per diem-type system 
based on level of need, so not everybody fit in the same 
category. It wasn't a capitated type of system. But it took 
away the necessity of all the documentation, all the paperwork.
    Mr. Burgess. Let me just ask you, I don't mean to interrupt 
but I am going to run out of time. Is the move to more 
electronic record keeping, would that be an enhancement in your 
mind in that type of activity? Does anybody actually read the 
reports that are generated every 15 minutes?
    Mr. Gronefeld. Well, that would be an enhancement but to 
kind of simplify things and oversimplify things to a point, 
outcomes are about the people receiving services. Ask them and 
their families what they think. Don't read that on a piece of 
paper. They can tell you if they are receiving the quality of 
services or not, and that is what outcomes should be about.
    Mr. Burgess. Very good.
    And with the seconds I have left, Dr. Rowland, I mean, I 
have never been a big fan of capitation but tell me again what 
are the concerns you had with the capitated system that you 
were discussing?
    Ms. Rowland. Well, we were looking at the Florida reforms 
that were put into place in Broward County. Specifically, there 
was a lawsuit actually filed yesterday by some of the 
beneficiaries of that program about the fact that it is very 
difficult when you are dealing with people with severe 
disabilities to establish the right level of risk adjusted 
capitation and the way in which that program was structured, 
the health plans were given the ability to modify the benefit 
package to live within the capitated amount.
    Mr. Burgess. Let me interrupt you again. Is that because 
there wasn't a correct assessment of risk going in?
    Ms. Rowland. I think that it is a very new area of trying 
to do the assessment of risk, right, and I think the risk 
assessment was not necessarily going to match the 
beneficiaries' needs so the plans were given under the waiver 
additional discretion to modify the benefit package and several 
did but it meant that the beneficiaries felt they were not 
getting the full range of services they needed. And I think it 
just points out the very difficulty of figuring out in advance 
prospectively for some of the most disabled people exactly what 
the right capitation amount would be and calls for the need to 
have some flexible corridors around which you operate.
    Mr. Burgess. I don't disagree. Of course, that is the whole 
tentative of capitation but at the same time, a system that 
learns ought to be capable over time of making those 
adjustments so that if capitation is what the State decides 
they want to do, is there not a way----
    Mr. Pallone. Let me ask you, Doctor--I am sorry, Dr. 
Burgess, but I wanted to get one more person in before we----
    Mr. Burgess. I am going to submit that question in writing 
and I will yield back, Mr. Chairman.
    Mr. Pallone. Let me just mention to the subcommittee, we 
have I guess 8-1/2 minutes left. We are going to have a 15-
minute vote and then two 5-minute votes, so what I am going to 
ask is, Ms. Baldwin if she would go next and then we will 
recess until we come back for those votes. So I recognize Ms. 
Baldwin.
    Ms. Baldwin. Thank you very much, and I will try to be 
brief with my questioning so we can get to the Floor in a 
timely manner.
    As I said in my opening statement, I am a very strong 
supporter of the Community Choice Act and I know that ADAPT has 
been working a long time on this bill, in fact, ever since it 
was first introduced by a different name as MICASA. It is my 
understanding that in 1997 the CBO estimated that that proposal 
would cost between $13 and $25 billion but that a recent study 
published in the Journal of Aging and Social Policy found that 
the proposal would be much less costly, maybe between $1.4 to 
$3.7 billion, and I wonder, Ms. Thomas, are you familiar with 
that study and could you--are you able to explain how the 
approach of the CBO researchers and the ones who did the recent 
study differed in terms of arriving at their conclusions?
    Ms. Thomas. Yes. Basically the difference was based on the 
fact that the original CBO scoring staff was I think somewhat 
unclear about who was going to be covered and they included 
people that were not eligible because of assets or other--
because of the level of their income, and also their severity 
of disability, and that was a very big problem. And then in 
addition, that study also--that the CBO did also included 
services that are not covered under the bill and so we tried to 
clarify the language to clarify what was and wasn't covered but 
in addition, I think that the people at University of 
California San Francisco who did the study were more careful in 
their information and I think their estimation is actually a 
lot more accurate.
    Ms. Baldwin. Thank you. I think in the interests of time, I 
will hold off on any further questions.
    Mr. Deal. Mr. Chairman, could I quickly ask unanimous 
consent that the testimony of Autism First be included in the 
record. I think both sides have reviewed it. I think we need to 
hear from many in the disability community, and certainly his 
is an aspect that needs to be heard.
    Mr. Pallone. So ordered.
    Mr. Deal. Thank you.
    [The information appears at the conclusion of the hearing.]
    Mr. Pallone. And as I said, we will stand in recess until 
after these votes. I would assume that would be--I don't know--
about half an hour or so. The subcommittee stands in recess.
    [Recess.]
    Mr. Pallone. I am asking unanimous consent that the 
statement by Mr. Waxman be included in the record. Without 
objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pallone. We were going to go to Mr. Towns because he is 
the last person. I think he is in the back room. So we will do 
a second round of questions. I think it is just going to be 
myself and Mr. Deal and then we will go back to Mr. Towns as 
soon as he comes in.
    I wanted to ask--go back to Dr. Rowland again. This is with 
regard to-oh, he is back. All right. I am going to hold my 
questions until after Mr. Towns has had an opportunity. I will 
recognize the gentleman from New York.
    Mr. Towns. Thank you very much, Mr. Chairman. Let me also 
congratulate you and of course Mr. Deal for holding this 
hearing. I really, really feel that this is a very important 
topic that we are discussing. I also want to thank the 
witnesses for being here as well.
    I would like to ask Ms. Thomas a question. As you noted, 
there are many, many people with disabilities currently in 
nursing homes or other institutions that would like to instead 
live in the community. In addition, there are many others who 
are at home with an informal caregiver network who are barely 
getting by or who are going without needed services and 
supports because there is no available slots in a Medicaid 
program to serve them. Could you give me information on how 
many people are on the waiting lists for community-based 
services? I know the availability of these services has been 
increasing over time but how can we help move more people into 
the community and make certain that those in the community are 
also having their needs met? Because I think that sometimes we 
move them out without the necessary support system. So could 
you answer that, Ms. Thomas?
    Ms. Thomas. Well, it is my understanding that there is 
about 280,000 people on waiting lists for waiver services. 
About 150,000 of them are people with--who are waiting for what 
they call MRDD services. About 120,000 are waiting for aged and 
disability services, and there are about 11,000 children with 
disabilities waiting for services. And really, if we could end 
the institutional bias and the mandate for nursing homes and 
institutional services and just allow, say these are the people 
that we want to serve and we will let them choose how they get 
the services that they need. We could go a long way towards 
ending that waiting list. We would be saving money on the 
people that are in institutions and want to get out because the 
cost is about two-thirds of what it is--it is about two-thirds 
in the community for what it is in the institution so you could 
be serving three people for every two that you are serving now. 
And we would really make a big, big difference in people's 
lives. It would be much more humane, much better services.
    Mr. Towns. It is easy to say let people move to the 
community but if everyone all at once left institutions for the 
community, would we have enough affordable housing options for 
people with disabilities? Are there other pieces of the puzzle 
that we need to fit in here to ensure that we have a smooth 
transition?
    Ms. Thomas. I would love it if everyone could do it all at 
one moment and everything was--but it isn't going to happen 
like that. It is going to happen in a lot more piecemeal way, 
and one thing that is a concern to us is that the perfect 
become the enemy of the good or we wait for every piece to be 
in place before we move. But that said, there are other pieces 
that do need to happen.
    Mr. Towns. Ms. Beckett, let us switch roles just for a 
moment. What should we be doing? Let us switch roles. You are 
now a member of Congress. What should we be doing? We are 
switching roles.
    Ms. Beckett. Well, I think there are several things that 
Congress can do, I think looking into expanding the 
possibilities for individuals with disabilities. I think 
Stephanie is absolutely right, housing is a really an important 
aspect of it. Transportation is an important aspect of it. 
Instead of looking at how these people qualify, we ought to be 
looking at whether we can do more for more people to remain in 
their communities and at home. That means supporting their 
families when they are young, supporting young adults so that 
they can go to work, supporting individuals with disabilities 
so that they can live in their communities, making that 
available to them. Katie was denied access to Section 8 housing 
because she was working on an advisory panel for the Social 
Security Administration. We totally understood that. But to try 
to gain access to anything, you have got to meet this level of 
absolutely no income whatsoever to even participate. That was a 
county-based program. I mean, it is very frustrating that 
everything is so piecemeal that you can't ever put anything 
together for everybody. I think one of the things that Aileen 
mentioned was the importance of case management services or 
care coordination. Having someone who can help you work through 
the system with you and provide those kinds of services is 
extremely important. It think having that--getting attendant 
care is really important. It is a major aspect of this. You 
really have to look at the broad-based spectrum of what 
individuals with disabilities as young adults are facing out 
there and move every obstacle you possibly can that are 
barriers to try to get them into the workforce. Working with 
the private sector to talk about the importance of their 
ability to work and their willingness to work, I think 
overcoming some of those barriers. A lot of times people don't 
know how to deal with that. And Katie has been very lucky in 
the fact that she is in her own apartment. She lives in a 
building downtown. It is not ideal per se except it is close to 
public transportation, it is close to the public library. It is 
where she is going to volunteer. Getting her a job has been 
extremely difficult because she has been serving on this 
advisory panel but now that has finished and so we are facing 
where her next steps will be. Why is it so complicated and why 
is it so difficult? It is time to partner with the private 
sector. Public government needs to work with the private sector 
to come up with ways of helping individuals with disabilities 
succeed in their community, and work as a natural aspect to 
that, but if you restrict school-based funding, if you restrict 
rehabilitation services, they are not going to be able to do 
that, and that just is wrong, and special education is the 
precursor to work. It should be. It should be what gets people 
ready to go, and those kinds of services are absolutely 
necessary. Medicaid should not be restricting reimbursement for 
those kinds of things.
    Mr. Towns. Thank you. Thank you very much.
    Mr. Pallone. Thank you. We are going to have a second round 
here with just a few questions and then we are going to--then 
we will finish today. Did you have a comment?
    Ms. Beckett. Mr. Chairman, could I just add one thing? 
Earlier Congressman Burgess asked about the moratorium on 
school-based services. There is--in the final slew of things 
that went on, there was a moratorium put into the final bill 
and there is a moratorium on implementation of that regulation. 
That is a final rule but it was put on hold for 6 months.
    Mr. Pallone. Six months, yes.
    Ms. Beckett. But, if after 6 months if we don't do 
something about it, it is going to go into effect and that is 
really deadly.
    Mr. Pallone. We are very much aware of that and that is one 
of the reasons why we are having this hearing today actually.
    Ms. Beckett. I just wanted to make sure.
    Mr. Pallone. Absolutely. I just wanted to ask--oh, I am 
sorry. You are next. I am next? All right. I am next. OK.
    I wanted to ask about the CLASS Act, and I guess I would 
ask Dr. Rowland or Ms. Fortin again. Part of the reason I 
introduced the CLASS Act is because I recognized that 
utilization of long-term-care services is on the rise and is 
going to increase as the population continues to age, and I 
think many Americans are under the impression all their 
healthcare needs including long-term-care needs will be covered 
by Medicare when they are older. I know that sounds incredible 
because you are all so knowledgeable but it is true. A lot of 
people really believe that. What they don't realize is that 
Medicare doesn't really provide these types of services, only 
in limited instances, and as a result they don't plan ahead. So 
if I could ask Dr. Rowland or Ms. Fortin, could you comment on 
why it is important to get Americans to think about their long-
term needs sooner rather than later and how a voluntary opt-out 
system like the CLASS Act might work, whether you think it 
would be beneficial to achieve that goal?
    Ms. Rowland. Well, I certainly think that we are facing an 
aging issue and a disability issue that cannot be solved by 
Medicaid alone, and one of the real challenges that has always 
been there is that when we get to the kind of long-term-care 
services and supports that people need, they don't get them 
through the Medicaid program and they can only get them through 
Medicaid if they meet the most strict income and asset tests 
and therefore have to be virtually impoverished to be able to 
get any assistance. So as we look at the challenges of an aging 
society and the challenges of a society where people with 
disabilities want to live at home and in the community and not 
be forced into institutions, I think anything we can do to 
promote broader options to help improve access to these kinds 
of services at levels of income that are not so means tested as 
the Medicaid program. It is not to say that Medicaid isn't 
critical and isn't an underpinning but I think we really need 
to begin to look more broadly at how we can build some of these 
services either into a Medicare-related program or into a more 
Title--we used to call it Title 21. Title 21 is now being used 
for something else. But to really try to have a way in which 
people can early on begin to contribute toward having the 
security of a broad and long-term-care and supportive services 
set of programs to wrap around just as well as the Medicare 
medical benefits are there.
    Mr. Pallone. Thank you.
    Ms. Fortin, did you want to comment?
    Ms. Fortin. Well, we are really supportive of this because 
working with people with intellectual and developmental 
disabilities, one of the huge issues is their ability to buy 
into a long-term-care program so this would remove some of the 
biases that they might face, and again, we go back to the whole 
issue of everybody needs to worry about long-term care, whether 
it is for a family member or for themselves, eventually the 
majority of people are going to need these services in the 
future. If we can put a program in place that will reduce the 
need for the Medicaid system and also for individuals so they 
don't have to impoverish themselves in order to be eligible for 
the Medicaid system. So the CLASS Act goes a long way to meting 
several of the needs.
    Mr. Pallone. All right. Let me just finish up, and going 
back to--thank you--Ms. Beckett's point about the 6-month 
moratorium on the CMS rule that limits rehab services under 
Medicaid. Would you talk about the consequences, if you will, 
if this were to go into effect. I mean, obviously we don't want 
it to but if you would talk about that.
    Ms. Beckett. Well, I think one of the major consequences 
is, school districts in this country will be forced to choose 
between healthy kids and kids in special education. I don't 
think that is right and it is absolutely against the ideal of 
education and the importance of education in this country. I 
think in many ways what it will do is, those administrative 
costs allow for the ability for them to do some kind of care 
management in a school classroom, whether it is paying for a 
school nurse, helping to pay for a school nurse in that 
building or what is going on but I think it is really important 
for us to think about the therapies that these kids really 
need, in particular physical therapy, occupational therapy, 
speech therapy in particular. Those kinds of things will be 
restricted and we can't afford to have that happen. We really 
want our young people, our young adults to be ready to go into 
the workforce and they are not going to be ready if what we do 
is restrict those kind of reimbursements for those types of 
services.
    Mr. Pallone. OK. Thank you.
    Mr. Deal.
    Mr. Deal. I will try to be real quick. I mentioned that we 
have a private facility in my hometown that is a not-for-profit 
designed to try to assist young adults who are disabled in a 
home setting and ran into quirky rule--and I am not sure where 
it comes from, maybe some of you can tell me--that one of the 
residents was on the initial board and lived in the facility 
and apparently it violated the rules and he had to move out in 
order to stay on the board. Now, this is sort of contrary to 
what we have with public housing in which your board has to be 
made up of a certain percentage of the residents. Have any of 
you run into that before? I am still trying to track down where 
that is coming from. OK, anyway, to another issue.
    Ms. Beckett, I certainly agree with you on the employment 
side of it. I think one of the important things is to make life 
as full as possible and people with disabilities who can work 
ought to be encouraged to do so. That sort of ties in through 
the Department of Labor situation with something that Mr. 
Gronefeld mentioned earlier about the personnel and some of the 
impediments to employment there. Are there Department of Labor 
restrictions that you encounter in the employment of disabled 
people, and if so, what are they?
    Ms. Beckett. It is not really the Department of Labor 
although labor is a part of all of this. One of the--I think 
the biggest thing is the fear that they are going to lose the 
types of benefits that they need when they go to work plus it 
is also on the part of the employer, their concern about having 
to pay for the health benefits of an individual with a 
disability. Katie doesn't have a very good track record and so 
an employer looks at her as a liability as opposed to a 
positive aspect of what it is she can provide. When you are 
going up against that, that is just totally irrational, when 
you think about it.
    Mr. Deal. Well, I agree with that.
    Ms. Beckett. I think it is really important for us to make 
sure that the Department of Labor is reaching out to different 
employers and talking about--and helping them to work through 
some of the issues that people with disabilities really have 
that could be beneficial employees to them.
    Mr. Deal. We have a rehabilitation workshop in our 
community which does pay at a reduced rate but it does provide 
employment there, and I suppose they come under some kind of a 
labor standard waiver. You are saying it probably needs to be 
expanded?
    Ms. Beckett. It absolutely needs to be expanded. We have 
Goodwill in Cedar Rapids. That is not an appropriate placement 
for Katie. She really needs to be in the workforce. She has 
been a receptionist in the past. She has done--she has worked 
from the time she was 16 years old, and as a matter of fact, 
the person who hired her was the manager of a record shop. As a 
teenager, you can imagine what that meant. And she asked her if 
she would like to work for her because Katie knew all of these 
things about when releases were supposed to take place and who 
are the best artists and the whole 9 yards. Well, that is what 
we need is somebody who is not afraid of that.
    Mr. Deal. I agree.
    Ms. Beckett. And at the time, because we are in a small 
community, that is something you can overcome but over time it 
is really difficult when there is more and more fear about 
healthcare and the rise of healthcare costs. That becomes a 
real problem. Katie is now meeting with Rockwell International, 
has a new government contract. They build airplanes and do all 
that kind of stuff, communications, and they need 310 employees 
and they are meeting with Katie to talk about how they could 
hire people with disabilities and not have to worry about the 
healthcare costs because it is very difficult. Well, we have a 
wonderful Medicaid buy-in program in the State of Iowa. It is 
not overly utilized. We would like to see it utilized more. But 
it is an opportunity, and our State Medicaid director says it 
is too difficult to figure out how to do those premium things 
and all of that. If people really need Medicaid, they should be 
able to buy into the program and not have to pay the premium 
for it. So he doesn't--they don't charge premiums in the State 
of Iowa, even on a Medicaid buy-in program. So to me, those are 
the kinds of things that States can really be encouraged to do 
that would help individuals, young adults in particular, get to 
work.
    Mr. Deal. I think we all need to work on that.
    Very quickly, Mr. Chairman, if I might just ask Mr. 
Gronefeld to elaborate once again on--you say that we have 
programs in place that are trying to put people in an 
employable status and yet we have the shortage in this 
healthcare arena. Would you elaborate specifically about the 
kind of impediments that are there?
    Mr. Gronefeld. Well, there are two primary impediments. One 
is, the average wage rate that is expected in order to be a 
successful placement. Both the job corps program and programs 
under the Workforce Investment Act and TANF require specific 
wages in order to measure success of the contractors putting 
people to work. Unfortunately, the wages for direct services 
professionals are below that threshold and so that hurts the 
outcomes. And, again, as I mentioned earlier, we need to get 
those wages up and we could get a lot more people into the 
system and providing services in this field if we could remove 
some of those impediments to getting people trained and into 
the programs.
    Mr. Pallone. I just wanted to ask one question, then we 
will wrap it up. When you were talking about Katie's track 
record, do you mean in terms of services that are available to 
her? What were you referencing?
    Ms. Beckett. Well, what I was referencing is the fact that 
she was a million-dollar baby before she was 2\1/2\ years old.
    Mr. Pallone. Oh, OK.
    Ms. Beckett. So her track record is not very good when it 
comes to healthcare services and needing that healthcare. What 
a lot of people don't realize is, once I became a University of 
Iowa employee and that was in 1984, because they are a large 
group employer, they could not--they had to accept Katie as a 
part of their plan so she actually--while she has the Medicaid 
waiver and now she has a little bit of Medicare because she is 
old enough to do that, she also has private health insurance, 
and private health insurance has paid most of Katie's bills as 
opposed to Medicaid because I went to work for the University 
of Iowa. I no longer teach, and the teachers who were here 
earlier--and I have to tell you, that has been a really 
difficult situation for me. Every September I miss going to my 
classroom and I miss my kids because that is what my life 
should have been. Instead, I am here. I am thankful that I get 
to be here but it is also not my life, not the way I would have 
liked it to be, but I can't help that. I work for--everybody in 
this country anymore works for their benefits and Katie's 
benefit is that she gets to be covered by health insurance, 
private health insurance. Even though she has this wonderful 
Medicaid waiver program that is very, very helpful to her, even 
Medicaid doesn't get coverage for everything you absolutely 
need to have. But you would think she would be covered on 
everything if she has all three of those, and she is still not. 
So I just--that is what I meant by track record. When I say she 
is my million-dollar baby, I am mean she is my million-dollar 
baby. Thank you.
    Mr. Pallone. Thank you so much. Thank you, all of you. We 
really appreciate your being here today. Understand that this 
is basically a broad hearing because we wanted to her about 
some of the problems relative to these rules that might go into 
effect and also wanted to hear some comments about legislation 
but we do intend to follow up, and I would just remind 
everybody, my colleagues as well as the panel, that you may--
members are allowed to submit additional questions for the 
record within 10 days or so, so you may get some additional 
questions that we would ask you to respond to in writing.
    But again, thank you all and thank you for all the 
advocacy. I should say that in my district over the years, and 
of course Ms. Thomas, your group in particular, but everyone 
has always been very effective in bringing attention to 
disability issues ha are our district office or whenever I have 
a town meeting, I always have representatives from the 
community that show up and I think that that advocacy is really 
important, so please, I am sure you will continue to do it but 
I do want you to know that it is effective.
    And without objection, the subcommittee hearing is 
adjourned.
    [Whereupon, at 1:05 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]







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