[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
  THE EXTENDERS POLICIES: WHAT ARE THEY AND HOW SHOULD THEY CONTINUE 

                UNDER A PERMANENT SGR REPEAL LANDSCAPE?
=======================================================================



                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 9, 2014

                               __________

                           Serial No. 113-111


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov




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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania        BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                  ANNA G. ESHOO, California
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey                Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado               PETER WELCH, Vermont
MIKE POMPEO, Kansas                  BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois             PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia         JOHN A. YARMUTH, Kentucky
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          JIM MATHESON, Utah
PHIL GINGREY, Georgia                GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            JOHN BARROW, Georgia
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky                  Islands
H. MORGAN GRIFFITH, Virginia         KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida            JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     2
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     5

                               Witnesses

Glenn M. Hackbarth, J.D., Chairman, Medicare Payment Advisory 
  Commission (MEDPAC)............................................     7
    Prepared statement...........................................     9
Diane Rowland, Sc.D., Chair, Medicaid and CHIP Payment and Access 
  Commission (MACPAC)............................................    30
    Prepared statement...........................................    32
Michael Lu, M.D., M.S., M.P.H., Associate Administrator, Maternal 
  and Child Health Bureau, Health Resources and Services 
  Administration (HRSA), U.S. Department of Health and Human 
  Services.......................................................    57
    Prepared statement...........................................    59
Naomi Goldstein, Ph.D., Director, Office of Planning, Research 
  and Evaluation, Administration for Child and Families (ACF), 
  U.S. Department of Health and Human Services...................    66
    Prepared statement...........................................    68
    Answers to submitted questions...............................   223

                           Submitted Material

Statement of the American Hospital Association, submitted by Mr. 
  Burgess........................................................   102
Pallone documents................................................   110
Pitts documents..................................................   128
Statement of the Federation of American Hospitals, submitted by 
  Mr. Griffith...................................................   219


  THE EXTENDERS POLICIES: WHAT ARE THEY AND HOW SHOULD THEY CONTINUE 
                UNDER A PERMANENT SGR REPEAL LANDSCAPE?

                              ----------                              


                       THURSDAY, JANUARY 9, 2014

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Murphy, Blackburn, Gingrey, Lance, Cassidy, Griffith, 
Bilirakis, Ellmers, Pallone, Dingell, Capps, Matheson, Green, 
Barrow, Christensen, Castor, Sarbanes, and Waxman (ex officio).
    Staff present: Gary Andres, Staff Director; Noelle 
Clemente, Press Secretary; Brenda Destro, Professional Staff 
Member, Health; Brad Grantz, Policy Coordinator, Oversight and 
Investigations; Sydne Harwick, Legislative Clerk; Robert Horne, 
Professional Staff Member, Health; Katie Novaria, Professional 
Staff Member, Health; Monica Popp, Professional Staff Member, 
Health; Chris Sarley, Policy Coordinator, Environment and 
Economy; Heidi Stirrup, Health Policy Coordinator; Tom Wilbur, 
Digital Media Advisor; Ziky Ababiya, Democratic Staff 
Assistant; Amy Hall, Democratic Professional Staff Member; 
Elizabeth Letter, Democratic Assistant Press Secretary; Karen 
Lightfoot, Democratic Communications Director and Senior Policy 
Advisor; Karen Nelson, Democratic Deputy Committee Staff 
Director for Health; and Anne Morris Reid, Democratic 
Professional Staff Member.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. The subcommittee will come to order. The chair 
recognizes himself for an opening statement.
    This subcommittee has played an integral role in advancing 
a permanent repeal of the SGR and implementing a replacement 
policy for Medicare reimbursement to physicians. We reported 
out Dr. Burgess's Medicare Patient Access and Quality 
Improvement Act of 2013, H.R. 2810, by voice vote, and the full 
committee reported it out favorably by a vote of 51 to 0 last 
July.
    As we move ahead with a permanent SGR fix, we also need to 
examine the expiring Medicare/Medicaid Children's Health 
Insurance Program--CHIP--and Human Services' provisions that 
have traditionally moved with the SGR.
    The purpose of today's hearing is to look at these 
extenders and evaluate whether some of these short-term 
provisions should be made permanent and, if so, how best to 
accomplish this.
    The list of extenders includes the following: the floor on 
Geographic Adjustment, or GPCI, for physician fee schedule, 
Ambulance Transitional Increase and Annual Reimbursement 
Update; Therapy Cap Exceptions Process, Special Needs Plans, 
Medicare Reasonable Cost Contracts, National Quality Forum--
NQF; Qualifying Individual--QI program; Transitional Medical 
Assistance--TMA; Medicare Inpatient Hospital Payment Adjustment 
for Low-Volume Hospitals; Medicare-Dependent Hospital--MDA 
program; Medicaid and CHIP Express Lane Eligibility; Children's 
Performance Bonus Payments; Child Health Quality Measures, 
Outreach and Assistance for Low-Income Programs, Child Health 
Quality Measures, Family-to-Family Health Information Centers, 
Abstinence Education, Personal Responsibility Education 
Program; Health Workforce Demonstration Program; the Maternal, 
Infant, and Early Childhood Home Visiting Programs; and Special 
Diabetes Program.
    In our current budget climate, and with the Medicaid 
trustees predicting insolvency as early as 2026, hard decisions 
will have to be made. A determination that a policy should be 
made permanent must be based on data-driven analysis that 
justifies the extenders' continued existence.
    I am looking forward to hearing from our witnesses today, 
particularly MedPAC, which has come up with its own criteria 
for evaluating these provisions, which includes the effect 
possible action would have on program spending relative to 
current law, whether such action would improve beneficiaries' 
access to care and quality of care, and whether action would 
advance delivery system reform.
    This is a time for us to be very prudent, even skeptical, 
given the enormous cost of these policies and do our job on 
behalf of the taxpayers to ensure every dollar spent is 
reviewed for efficacy.
    Thank you, and I yield the remainder of my time to Dr. 
Burgess, vice chairman of the subcommittee.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    The Subcommittee will come to order.
    The Chair will recognize himself for an opening statement.
    This Subcommittee has played an integral role in advancing 
a permanent repeal of the Sustainable Growth Rate (SGR) and 
implementing a sound replacement policy for Medicare 
reimbursements to physicians.
    We reported out Dr. Burgess' Medicare Patient Access and 
Quality Improvement Act of 2013 (H.R. 2810) by voice vote, and 
the Full Committee reported it out favorably by a vote of 51 to 
0 last July.
    As we move ahead with a permanent SGR fix, we also need to 
examine the expiring Medicare, Medicaid, Children's Health 
Insurance Program (CHIP), and human services provisions that 
have traditionally moved with the SGR.
    The purpose of today's hearing is to look at these 
``extenders'' and evaluate whether some of these short-term 
provisions should be made permanent, and, if so, how best to 
accomplish this.
    The list of extenders includes the following:
     Floor on Geographic Adjustment (or GPCI) for 
Physician Fee Schedule,
     Ambulance Transitional Increase & Annual 
Reimbursement Update,
     Therapy Cap Exceptions Process,
     Special Needs Plans,
     Medicare Reasonable Cost Contracts,
     National Quality Forum (NQF),
     Qualifying Individual (QI) Program,
     Transitional Medical Assistance (TMA),
     Medicare Inpatient Hospital Payment Adjustment for 
Low-Volume Hospitals,
     Medicare-Dependent Hospital (MDH) program,
     Medicaid and CHIP Express Lane Eligibility,
     Children's Performance Bonus Payments,
     Child Health Quality Measures,
     Outreach and Assistance for Low Income Programs,
     Family-to-Family Health Information Centers,
     Abstinence Education,
     Personal Responsibility Education Program,
     Health Workforce Demonstration Program,
     The Maternal, Infant, and Early Childhood Home 
Visiting Programs, and
     Special Diabetes Program.
    In our current budget climate, and with the Medicare 
Trustees predicting insolvency as early as 2026, hard decisions 
will have to be made.
    Any determination that a policy should be made permanent 
must be based on data-driven analysis that justifies the 
extender's continued existence.
    I am looking forward to hearing from our witnesses today, 
particularly MedPAC, which has come up with its own criteria 
for evaluating these provisions, which includes the effect 
possible action would have on program spending relative to 
current law; whether such action would improve beneficiaries' 
access to care and quality of care; and whether action would 
advance delivery system reform.
    This is a time for us to be very prudent, even skeptical, 
given the enormous costs of these policies, and do our job on 
behalf of the taxpayers to ensure every dollar spent is 
reviewed for efficacy.
    Thank you, and I yield the remainder of my time to --------
----------------------------------.

    Mr. Burgess. Thank you, Mr. Chairman, and I do appreciate 
that you started your opening statement with the acknowledgment 
that the reason we are here today is because of the real 
progress that has been made on the repeal of the Sustainable 
Growth Rate formula, which has been a problem for a lot of us 
for a long time, so the cake is literally in the oven baking 
and today we are going to talk about what else may go into that 
before the process is completed.
    There are certainly a number of Medicare- and Medicaid-
related policies that every year plague providers because of 
the uncertainty that it brings to the program participation by 
provider payment each year. Not all of these policies are under 
our jurisdiction. Many are some that have proven successful but 
many of these programs are under our jurisdiction and many of 
them have proven successful such as the Special Diabetes 
programs and the Special Needs Plans. Others are essential to 
guaranteed access to care in States like Texas with large rural 
areas such as the Medicare-Dependent and Low-Volume Hospital 
programs. Still other extenders are necessary to block 
misguided policies like the Medicare therapy cuts. Capping 
rehabilitative access made no sense when it was first passed 
several years ago, and guess what? With the passage of time, 
nothing has improved. It still makes no sense. Doctors should 
be able to provide their patients with the option of therapy 
and never fear that either prior to or after surgery a patient 
will not be able to access the therapy services that they 
require.
    So certainly, Mr. Chairman, I am appreciative of the work 
that this subcommittee did in moving the SGR reform along as we 
were the initial subcommittee that passed real, meaningful 
Sustainable Growth Rate reform out of subcommittee on to full 
committee. Other jurisdictions have taken up that matter but it 
all started here with you, Mr. Chairman, and I am appreciative 
of that.
    I would also ask unanimous consent to submit the testimony 
of the American Hospital Association for the record as well, 
and yield back.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. The Chair now recognizes the ranking member of 
the subcommittee, Mr. Pallone, 5 minutes for an opening 
statement.

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

    Mr. Pallone. Thank you, Chairman Pitts.
    I am pleased we are having this hearing today to discuss 
the temporary payment policies and programs we typically 
extended every year alongside the SGR. I thank our witnesses 
also for being here today to contribute to the discussion.
    This subcommittee has an important role in reviewing and 
evaluating health care policies and the extenders provisions 
that will contribute to the health care communities' abilities 
to better serve beneficiaries under Medicare and Medicaid.
    In many ways, extenders support the health care framework 
envisioned in the Affordable Care Act. They work through 
various mechanisms to support increased access to health care 
and to encourage higher quality and more efficient patient 
care.
    In spite of all that, we move beyond the unworkable process 
of legislating extenders policies year to year. We need to set 
these policies up for success by providing a better sense of 
stability, and that is not to say that I think we should every 
provision permanently but moving towards a 3- to 5-year end 
date in some cases will better enable the subcommittee to 
conduct proper oversight and consider making changes 
periodically based on data collected over a sufficient amount 
of time.
    In addition, we look to make changes to some of these 
policies but, more importantly, as we look to offset the costs 
associated with both the SGR and extenders, we must not cost-
shift onto vulnerable patients who rely on these programs.
    I just wanted to take a moment to highlight some extenders 
and how they help our Medicare and Medicaid programs, and this 
is not an exhaustive list, but certainly they are ones that I 
would like to work to urge this committee to extend. One is the 
Qualifying Individual, or QI, program in Medicare, which 
assists certain low-income Medicare beneficiaries by covering 
the cost of their Medicare Part B premium. This program helps 
reduce financial burdens and thereby improve access to needed 
health care services for low-income Medicare beneficiaries who 
do not quality for Medicaid. In New Jersey, 40,000 people were 
able to get this needed financial assistance in 2013.
    Another is the Transitional Medical Assistance, or TMA, 
program, which allows low-income families on Medicaid to 
maintain their Medicaid coverage for up to one year when their 
income changes as a result of transitioning into employment. 
The TMA program helps keep people continuously insured, 
allowing for consistent access to primary care and prevention 
services.
    I also wanted to highlight two payment policies that we 
implemented in the ACA. The Medicaid Primary Care Physician 
Bonus Payment augments the low physician rates in Medicaid 
compared to Medicare. Research has shown that higher Medicaid 
payments increase the probability of beneficiaries having usual 
source of care and at least one visit to a doctor. This is an 
important policy that I believe should be extended because, 
unfortunately, we still need time to understand the impact of 
the program in a meaningful and empirical way. I also believe 
that there are physicians who are essential to the Medicaid 
program such as neurologists, psychiatrists and OB/GYNs that 
aren't included in the bonus payment but should be.
    We also included in the ACA performance bonuses for States 
that increased enrollment of children in Medicaid and 
streamlined enrollment procedures for Medicaid and CHIP. New 
Jersey was one of 23 States that received a bonus payment in 
2013 through this program. Minimizing barriers to enrolling in 
coverage makes a difference in how many children are enrolled 
each year and ultimately whether they receive their prevention 
services and medical care they need.
    And finally, I want to mention the Family to Family Health 
Information Centers, or F2F grant program. F2Fs assist families 
of children and youth with special health needs in making 
informed choices about health care, which in turn promotes 
improved health outcomes and more effective treatments. So F2Fs 
provide a unique service in that they are staffed by family 
members who have firsthand experience in navigating special 
needs health care services and that is why I have sponsored a 
bill, H.R. 564, to extend F2F funding through 2016 and will 
continue to advocate for its inclusion in any SGR package.
    These are just a few examples of the many extender 
provisions that we must discuss as we move forward with an SGR 
fix. I have been pleased by the recent progress made on SGR, 
Mr. Chairman, and I stand ready to work with my colleagues on 
both our committee and Ways and Means and with our Senate 
counterparts to permanently repeal and replace the SGR and 
continue these important extender provisions.
    I don't know if Ms. Capps would like my last 30 seconds. 
All right. Then I yield back, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman. Our Chair is not 
here, so the Chair recognizes the ranking member of the full 
committee, Mr. Waxman, 5 minutes for an opening statement.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman.
    My colleagues, this Congress seems to be, I hope, poised to 
eliminate the SGR and make it a program that will no longer be 
in existence so every year we don't have to go through the 
torture of trying to make sure that the harmful consequences of 
not extending it would be averted. All three committees, two in 
the House and one in the Senate, have voted--our Committee 
voted unanimously--on the SGR. I hope we can get it across the 
finish line and let us get this job done.
    The SGR issue has often served as a vehicle to address 
Medicare, Medicaid, the Children's Health Insurance Program and 
additional public health-related programs, which contain 
similar time limits. These provisions have been collectively 
referred to as extenders or extender policies. When we 
permanently repeal and replace the Medicare SGR policy, we must 
also address these associated extender policies. These policies 
seek to protect vulnerable patient populations and the 
providers and health programs that serve them, so we can't 
afford to leave them out in the cold and in jeopardy of being 
terminated.
    In Medicare, we have policies that need to be extended 
relating to therapy caps and Special Needs Plans. Those have 
been discussed; they are well known. There are six public 
health extenders, some which have a long history of bipartisan 
support, and I am generally supportive of these public health 
programs, but I do want to note my reservations about extending 
the Abstinence Only program.
    But I want to focus on the Medicaid and CHIP issues, which 
are often overlooked. Those policies help secure affordable 
coverage, boost enrollment of eligible children, and streamline 
administrative processes for States. For example, there is an 
Express Lane program. It gives States the option of relying on 
income data already in use for other federal programs, helping 
reduce bureaucracy and lower State administrative costs. This 
should be a permanent option for the States. The Transitional 
Medical Assistance and Qualified Individual programs are 
indispensable for low-income families. We must end the annual 
extender roller coaster and ensure this coverage is secure 
going forward. The CHIP bonus payments have been successful at 
getting States to adopt simplifications and find and ways to 
get people enrolled, get kids enrolled. Twenty-three States, 
more than half of them with governors who are Republicans, have 
qualified under this program. We should continue it through the 
current CHIP reauthorization. And also, I have heard a great 
deal from family doctors and pediatricians about the Medicaid 
primary care bonus. It is something that would provide 
stability and adequate payment for physicians comparable to 
what we do in Medicare, and there is no better way to assure 
access and provide an alternative to the emergency room for 
care than making sure that doctors, especially family care and 
pediatricians, will have the extra payment to allow them to see 
these patients.
    So I am glad we are holding this hearing, and I want to 
yield the balance of my time to my friend and colleague from 
California, Ms. Capps, who has a number of public health 
provisions that are in this bill that are very meritorious.
    Mrs. Capps. Thank you very much. Thank you, Waxman.
    And I want to just simply add my thanks to the chairman and 
Ranking Member Pallone for holding this very important hearing 
today.
    You know, we have had many discussions of how to move past 
the flawed SGR system, and I have frequently shared my views 
that we can't and must not ignore the important health care 
extenders, many of which have been mentioned already. These 
typically go along with SGR patch legislation, small technical 
but critical policies that make a world of difference for 
health care providers and their patients.
    I just want to stand ready to work with my colleagues on 
each of these issues, especially those that have been already 
mentioned--the Medicare therapy cap, the Medicaid primary care 
bump, the many critical Medicaid and public health care 
extenders that we are considering today, and again, thank you 
for yielding your time and also for holding the hearing today. 
Yield back.
    Mr. Pitts. The Chair thanks the gentlelady. That concludes 
the opening statements of the members.
    I would like to thank all of the witnesses for coming 
today. We have one panel. On our panel today we have Mr. Glenn 
Hackbarth, Chairman of the Medicare Payment Advisory 
Commission, MedPAC. We have Dr. Diane Rowland, Chair, Medicaid 
and CHIP Payment Access Commission, MACPAC. We have Dr. Michael 
Lu, Associate Administrator, Maternal and Child Health Bureau, 
Health Resources and Services Administration, U.S. Department 
of Health and Human Services. And finally, Dr. Naomi Goldstein, 
Director, Office of Planning, Research and Evaluation, 
Administration for Children and Families, U.S. Department of 
Health and Human Services.
    Thank you for coming. Your prepared testimony will be made 
part of the record. You will have 5 minutes to summarize your 
testimony, and that will be placed in the record.
    At this point I will recognize Mr. Hackbarth for 5 minutes 
for his summary.

  STATEMENTS OF GLENN M. HACKBARTH, J.D., CHAIRMAN, MEDICARE 
  PAYMENT ADVISORY COMMISSION (MEDPAC); DIANE ROWLAND, SC.D., 
    CHAIR, MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION 
      (MACPAC); MICHAEL LU, M.D., M.S., M.P.H., ASSOCIATE 
    ADMINISTRATOR, MATERNAL AND CHILD HEALTH BUREAU, HEALTH 
 RESOURCES AND SERVICES ADMINISTRATION (HRSA), U.S. DEPARTMENT 
   OF HEALTH AND HUMAN SERVICES; AND NAOMI GOLDSTEIN, PH.D., 
    DIRECTOR, OFFICE OF PLANNING, RESEARCH AND EVALUATION, 
ADMINISTRATION FOR CHILD AND FAMILIES (ACF), U.S. DEPARTMENT OF 
                   HEALTH AND HUMAN SERVICES

                  STATEMENT OF GLENN HACKBARTH

    Mr. Hackbarth. Thank you, Chairman Pitts, Ranking Member 
Pallone and Vice Chairman Burgess. I appreciate the opportunity 
to talk about MedPAC's recommendations on these issues.
    As the chairman noted, there is a long list of Medicare 
provisions under discussion here and it is a diverse list. I 
won't try to summarize our substantive views on those 
provisions. Instead, what I will do is describe the criteria 
that we used to evaluate provisions.
    We looked at them in two batches. First, there was a 2010 
request from the Congress focusing on some temporary Medicare 
extenders, as they are known. By definition, all of these 
provisions increase spending above the current law baseline. In 
evaluating those provisions, what we did was ask the question, 
whether there is evidence that provision in question improves 
access to care, quality of care or enhances movement towards 
new payment models.
    We also had a 2011 request from the Congress to evaluate 
various special payment provisions that apply to rural 
providers. There we used a similar test. We asked whether the 
provision in question was targeted so that it provided support 
to isolated providers necessary to assure access to care for 
Medicare beneficiaries, whether the level of the adjustment 
provided was empirically justified and whether it was designed 
to preserve some incentive for the efficient delivery of care. 
These tests that we applied are admittedly stringent tests but 
we believe that they are consistent with our statutory charge 
to make recommendations to the Congress that are designed to 
assure access to high-quality care while also minimizing the 
burden on the taxpayers.
    We think a stringent test is particularly appropriate in 
the current context of SGR repeal. As the committee well knows, 
we have been long-time advocates of SGR repeal, well over a 
decade now. We are heartened by the progress that has been made 
towards repeal and recognize an important part of the remaining 
challenge is the financing of repeal, so we think a stringent 
test on the extenders is an appropriate test in this context.
    So I welcome questions from the committee. Those are my 
summary comments.

    [The prepared statement of Mr. Hackbarth follows:]


    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Pitts. The Chair now recognizes Dr. Rowland 5 minutes 
for her summary.

                   STATEMENT OF DIANE ROWLAND

    Dr. Rowland. Thank you, Chairman Pitts, Ranking Member 
Pallone and members of the subcommittee. I am pleased to be 
here today to share MACPAC's expertise and insights as the 
committee considers extension of several legislative provisions 
affecting Medicaid and the Children's Health Insurance Program, 
CHIP.
    MACPAC was authorized in 2009 and began its work in 2010 to 
provide the Congress with analytic support on a wide range of 
Medicaid policy issues and CHIP issues. The focus of our work 
is on how to improve the efficiency, effectiveness and 
administration of Medicaid and CHIP, to reduce complexity and 
improve care for the over 60 million beneficiaries with 
Medicaid and CHIP coverage. During the coming year, we will be 
looking at the implementation of the Patient Protection and 
Affordable Care Act and the coordination of Medicaid, CHIP, and 
exchange coverage. We will be looking at children's coverage 
and the status and future of the CHIP program, at cost 
containment and payment system improvements underway in the 
States for Medicaid, at issues for high-cost, high-need 
enrollees, and on Medicaid administrative capacity. But today I 
will focus on the issues that are up for reauthorization and 
extension.
    Specifically, one of the areas the Commission has looked at 
carefully is Transitional Medical Assistance, or TMA. TMA 
provides additional months of Medicaid coverage to low-income 
parents and children who would otherwise lose coverage due to 
increased earnings and helps to promote increased participation 
in the workforce, a goal of all of us. It was originally 
limited to 4 months and has since 1990 been raised to a 6- to 
12-month period through the extenders we are discussing today. 
This provision applies to the lowest-income Medicaid 
beneficiaries who qualify under the welfare level guidelines 
and indeed helps to reduce churning between Medicaid, employer-
based coverage and uninsurance. This churn is disruptive for 
the plans that service these patients, providers and the 
government entities that process these changes as well as for 
the beneficiaries themselves. MACPAC recommends eliminating the 
sunset date for the Section 1925 TMA that allows the 6- to 12-
month coverage and also provides States with additional 
flexibility to do premium assistance as people transition from 
Medicaid to the workforce.
    We also have recommended that when States expand Medicaid 
to the new adult group under the Affordable Care Act, they be 
allowed to opt out of Transitional Medical Assistance because 
in that case there would be no gap in the coverage they would 
receive either through Medicaid under the new options or 
through subsidized exchange coverage.
    With regard to Express Lane Eligibility, we looked at ways 
in which the program can be streamlined and eligibility can be 
improved and see that the Express Lane Eligibility provides 
children with enrollment under CHIP and Medicaid with an 
express vehicle so that it eliminates some of the duplication 
that goes on in program determinations. Thirteen States have 
implemented this method of establishing eligibility, and we 
will continue to monitor the use and effectiveness of this 
approach and are in the process of reviewing the December 13th 
report by the Secretary of Health and Human Services and will 
provide our comments on that report to the Congress.
    In terms of the CHIP program and outreach and eligibility, 
we see that bonus payments have provided a strong incentive to 
the States to improve outreach and enrollment processes for 
children and now many of these strategies are required in the 
new eligibility and enrollment processes being implemented 
effective in 2014. So we will look at the potential 
restructuring of the bonus payments to try and see how those 
need to be restructured in light of the changes under the 
Affordable Care Act.
    We also strongly support developing policies that will help 
us improve the way to measure the quality of care for children 
including the requirement in the extenders to develop a core 
set of child health quality measures. There is no other way to 
really be able to compare the quality of care being provided or 
to assess it without some standardization of the methods used, 
and we know that you will be looking for us to do such 
comparisons and really strongly support having the data and 
ability to do that.
    With regard to the Qualifying Individual program and the 
Special Needs Plans, we really have been looking very carefully 
at the importance of the role that Medicaid plays as a 
wraparound for Medicare beneficiaries, especially helping the 
very lowest income to not only afford their premiums but to get 
better and more integrated care, and we will continue to try 
and work to assess ways in which we can improve the 
coordination and delivery of care for individuals who are 
dually eligible and very low income.
    So in conclusion, we will continue to keep Congress 
informed of our progress in examining these issues. We look to 
try and find ways to reduce administrative burden and 
streamline the programs as well as provide better care to the 
beneficiaries for better investment of the dollars that this 
government puts into this care.
    Thank you very much for having us today, and we look 
forward to continuing to share our work with you in the future.
    [The prepared statement of Dr. Rowland follows:]

    [GRAPHIC] [TIFF OMITTED] 

    Mr. Pitts. The Chair thanks the gentlelady and now 
recognizes Dr. Lu 5 minutes for a summary of his testimony.

                    STATEMENT OF MICHAEL LU

    Dr. Lu. Thank you, Chairman Pitts, Ranking Member Pallone 
and members of the committee. Thank you for the opportunity to 
testify today.
    HRSA focuses on improving access to health care services 
for people who are uninsured, isolated, or medically 
vulnerable. The agency collaborates with government at the 
federal, state, and local levels to improve health and achieve 
health equity through access to quality services and a skilled 
health care workforce.
    I am pleased to provide an overview and update on two of 
our programs: the Maternal, Infant, and Early Child Home 
Visiting program, which I will just refer to as the home 
visiting program, and the Family to Family program.
    The home visiting program, administered by HRSA, includes 
collaboration with Administration for Children and families, 
supports voluntary evidence-based home visiting services during 
pregnancy and to parents with young children up to age 5. 
Providers in the community work with parents who voluntarily 
sign up to participate in the program to help them build 
additional skills to care for their children and family. 
Priority populations include low-income families, teen parents, 
family with a history of drug use or of child abuse and 
neglect, families with children with developmental delays or 
disabilities, and military families.
    The strength of the overall program lies in an evidence-
based approach, decades of scientific research which shows that 
home visiting by a nurse, a social worker or early educator 
during pregnancy and in the first year of life improves 
specific child-family outcomes including prevention of child 
abuse and neglect, positive parenting, child development and 
school readiness. The benefit of home visiting for the child 
continues well into adolescence and early adulthood. For 
example, previous work in this area has shown that among 19-
year-old girls born to high-risk mothers, nurse home visiting 
during their mother's pregnancy and in their first 2 years of 
life reduce the 19-year-old's lifetime risk of arrest and 
conviction by more than 80 percent, teen pregnancy by 65 
percent, and led to reduce enrollment in Medicaid by 60 
percent.
    In addition, a number of studies indicate home visiting 
programs have a substantial return on investment. The most 
current one funded by the Pew Charitable Trust found that for 
every dollar invested in home visiting, $9.50 is returned to 
society.
    Early data collected by HRSA found that within the first 9 
months of implementation in 2012, the program provided more 
than 175,000 home visits to 35,000 parents and children in 544 
communities across the country. Preliminary data from 2013 
indicates that more than 80,000 parents and children are 
receiving home visiting services, and the program is now 
available in 650 counties across the country, which is 20 
percent of all the counties in the United States. States and 
communities are the driving force in terms of carrying out this 
program. With our support, States and communities are building 
capacity in this area and have demonstrated improved quality, 
efficiency and accountability of their home visiting programs. 
States have the flexibility to tailor their programs to serve 
the needs of their different communities and populations. 
States are able to choose from 14 evidence-based models that 
thus fit their risk communities needs capacities and resources.
    We have taken a number of steps to ensure proven 
effectiveness and accountability. HRSA and ACF provide ongoing 
technical assistance to grantees and promote dissemination of 
best practices by supporting collaborative learning across 
States. Additionally, we closely monitor States' progress. The 
data are collected on an annual basis, and by October 2014, 
States are expected to demonstrate improvement in at least four 
out of the six benchmark areas.
    Additionally, HRSA administers the Family to Family Health 
Information Center program with centers in all 50 States and 
D.C., which provides support, information, resources and 
training to families of children with special health care 
needs. These centers are staffed by parents of children with 
special health care needs. These parents provide advice and 
support and connect other parents to a larger network of 
families and professionals for information and resources. The 
centers also provide training to professionals on how to better 
support families of children with special health care needs and 
assists States in developing and implementing family center 
medical home and community system of care for these children.
    HRSA closely monitors program effectiveness. A 2012 Family 
Voices report supported by HRSA on the activities and 
accomplishments of these centers indicated that between June 
2010 and May 2011, so a 1-year period, approximately 200,000 
families and 100,000 professionals received direct assistance 
and training from these centers. Greater than 90 percent of the 
families reported being able to partner in decision-making, 
better able to navigate through services and more confident 
about getting needed services.
    I appreciate the opportunity to testify today, and I will 
be pleased to answer any questions that you may have.
    [The prepared statement of Dr. Lu follows:]

    [GRAPHIC] [TIFF OMITTED]     


    Mr. Pitts. Thank you. The Chair now recognizes Dr. 
Goldstein 5 minutes for summary of her testimony.

                  STATEMENT OF NAOMI GOLDSTEIN

    Ms. Goldstein. Thank you for the opportunity to be here 
today. I plan to speak about three programs my agency oversees 
as well as our collaboration with Dr. Lu and his colleagues on 
evaluating the home visiting program he described.
    Each of these programs uses knowledge from past research, 
and in keeping with direction from Congress, we are carrying 
out evaluations to continue to learn about effective approaches 
for meeting the goals of these programs. We aim to make our 
evaluations rigorous so the results are sound and credible and 
also relevant and useful for policymakers and practitioners.
    First, the Health Profession Opportunity Grants program 
funds training in high-demand health care professions for low-
income people. It uses a career pathways framework based on 
past research. The program has funded 32 grantees including 
five tribal organizations. Of those people completing a 
training program, over 80 percent have become employed. The 
most common training is preparation for jobs such as nursing 
assistant or orderly, short courses that can be the first step 
in a career pathway. Last year we published three reports on 
the implementation of these grants and the outcomes for 
participants. Grantees are using a range of creative 
strategies. For example, one grantee in Pennsylvania is using 
Google Hangouts for real-time tutoring in a highly rural 
service area. We plan to release additional reports this year 
and next. We are also studying how the program affects 
participants' education, employment, and earnings.
    Second, the Personal Responsibility Education program is 
designed to educate youth on both abstinence and contraception. 
The statute reserves the majority of funds for program models 
that are evidence-based or substantially so. All models must 
provide medically accurate information. HHS sponsors a 
systematic review to identify programs with evidence of 
impacts. So far, 31 program models have met the review 
criteria. We continue to learn about what works. We recently 
released a report describing State choices about program design 
and implementation such as how they define and how they reach 
target populations. Further findings from the national 
evaluation will be released over the next couple of years. We 
are also studying the impacts of four local program approaches 
to address gaps in the evidence base.
    Third, in the Abstinence Education program, States are 
encouraged to use models that are evidence-based, and again, 
all models must provide medically accurate information. In 
2007, HHS completed an evaluation of four local abstinence 
programs, which found no effects on abstaining from sex. The 
study also found no effects on the likelihood of unprotected 
sex. However, three abstinence models are among the 31 teen 
pregnancy prevention models that meet HHS evidence criteria. 
The Abstinence Education statute provides no funding for 
research and evaluation. However, HHS is supporting evaluation 
of abstinence education through some of its broad teen 
pregnancy prevention activities. For example, one Virginia 
grantee of the Personal Responsibility Education program is 
evaluating an abstinence curriculum.
    Finally, Dr. Lu mentioned our collaboration on the home 
visiting program. The statute reserves the majority of funding 
for home visiting models that meet evidence criteria. The 
statute also requires continual learning through a national 
evaluation and other activities. HHS sponsored a systematic 
review of evidence similar to the review of teen pregnancy 
prevention evidence. So far, 14 home visiting models have met 
the review criteria.
    The design of the national evaluation has been informed by 
an advisory committee of experts required by the statute. Most 
recently the committee reviewed and endorsed plans for a report 
to Congress due in March 2015. The evaluation is using a 
rigorous random assignment design to assess the effectiveness 
of the program overall and of the four home visiting models 
most commonly chosen by the grantees.
    I hope these brief descriptions convey some sense of the 
accomplishments of these programs and of our ongoing efforts to 
learn and improve.
    Thank you again for inviting me to testify. I would be 
happy to address any questions.

    [The prepared statement of Ms. Goldstein follows:]

    [GRAPHIC] [TIFF OMITTED] 

    Mr. Pitts. The chair thanks the gentlelady for her 
testimony and now we will begin questioning. I recognize myself 
for 5 minutes for that purpose.
    Mr. Hackbarth, I believe that this committee needs to be 
diligent in its spending priorities and consider every one of 
these policies carefully before deciding whether they warrant 
extension. Many constituencies are advocating for making these 
extenders permanent. In your testimony, you lay out a set of 
criteria to use when considering these extenders. Using your 
criteria, do you believe that all or the majority of these 
extenders warrant extension?
    Mr. Hackbarth. Certainly not all. I haven't done a count so 
I would be reluctant to say whether a majority are not, but we 
think many should not be extended.
    Mr. Pitts. In your opinion, based on your criteria, do you 
have a couple of programs that Congress needs to look at with a 
very critical eye as we begin this review?
    Mr. Hackbarth. Well, we just focus on the world of payment 
provisions, some of which are permanent and some of which are 
temporary and under consideration here. As I said in my opening 
comments, we did an extensive review of Medicare rural health 
issues, which was published in June 2012, I believe, and part 
of that was to examine the special payment provisions against 
the criteria I mentioned in my opening comments, namely are 
they targeted to isolated providers, are they empirically 
justified and do they retain some incentive for efficiency, and 
we found a number of those provisions to not.
    So let me focus in on one in particular. There is a 
temporary Low-Volume Adjustment in the Medicare program. This 
is a hospital payment adjustment for providers that have low 
volume. There are a couple serious problems with that 
adjustment. First of all, it is based only on Medicare 
discharges. If the issue we are trying to address is small size 
and a lack of economy of scale, the appropriate index of that 
is total discharges, not Medicare discharges. In addition to 
that, it looks to us like the magnitude of the adjustment is 
too large. And then finally, it is not directed only at 
isolated providers so hospitals that are in close proximity to, 
say, a Critical Access Hospital can qualify for the Low-Volume 
Adjustment. In fact, there are some hospitals like Sole 
Community Hospitals that can in effect double-dip, get special 
payments as Sole Community Hospitals and also low-volume 
payments as well.
    Mr. Pitts. Thank you. I want to commend you for putting 
forward the criteria you referenced in your testimony. I 
believe it will be helpful to me and others on this committee 
as we consider the extenders before us today.
    Dr. Rowland, like MedPAC, does MACPAC have a similar set of 
established criteria by which to weigh the Medicaid extenders 
that consider issues like cost and taxpayer burden against 
current benefit that the policy delivers to beneficiaries? And 
if not, how do you take into account issues of cost and other 
important considerations that MedPAC is advocating?
    Dr. Rowland. Well, we are obviously a much newer body than 
MedPAC so have begun to try to establish the criteria by which 
we would look at the various policies. One of the strongest 
criteria is, does this policy promote efficiency, effectiveness 
and reduce complexity in the programs. So we looked at these 
various extenders in terms of their role. The only area in 
which we have made strong recommendations is around 
Transitional Medical Assistance, or TMA, and we are continuing 
to look at the others both in terms of their cost but also in 
terms of their impact on beneficiaries on State administration 
and on federal dollars and spending.
    Mr. Pitts. Thank you.
    Dr. Goldstein, we only have 30 seconds, but I understand 
that ACF provides technical assistance to grantees on a number 
of issues. However, very little of that assistance includes how 
to encourage more teens to choose abstinence or sexual risk 
avoidance. Please describe the technical assistance that you 
provide on abstinence compared to other topics such as 
contraceptives.
    Ms. Goldstein. I am actually not prepared to address that 
but I will be glad to take that question back to my program 
colleagues and provide an answer for the record.
    Mr. Pitts. All right. Now, the committee published a report 
that analyzes abstinence or sexual risk avoidance programs, and 
it describes over 22 peer-reviewed studies that show 
statistically significant evidence of the positive impact of 
these programs. Are you familiar with that report?
    Ms. Goldstein. I am.
    Mr. Pitts. And have you, or would you share it with 
grantees as part of the technical assistance?
    Ms. Goldstein. Again, I will take that back to my program 
office colleagues and provide an answer for the record.
    Mr. Pitts. Thank you. I have gone over time. I now 
recognize the ranking member, Mr. Pallone, 5 minutes for 
questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I have a number of documents on the extenders that I wanted 
to ask unanimous consent to enter into the record. I am not 
going to read them all because it would take up my whole 5 
minutes but I can maybe hand you the sheet here.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pallone. Thank you.
    I had a question initially of Dr. Lu. I have been a strong 
supporter of the Family to Family Health Information Center 
program in the past and the program has helped so many families 
in my State and across the country manager their special health 
care needs, and that is why I introduced a bill that would 
extend the funding for these centers into 2016. I was also 
pleased to see the Senate went even furthering their SGR bill 
by extending the program until 2018 and included $1 million 
increase.
    So my question is, in addition to helping families with 
special health care needs, I was wondering if you could talk a 
bit more about some of the contributions that the F2F program 
has made to our overall health care system.
    Dr. Lu. As you mentioned, Congressman Pallone, these 
centers are unique in that they are staffed by parents of 
children with special health care needs, so as parents, they 
understand the challenges, the issues that other parents face. 
They know the system. They can provide advice and support and 
they can connect other parents to this larger network of 
families and professionals for support. They can help the 
families find the best health care providers. They also partner 
with providers, and in doing so they can really improve on the 
outcomes as well as cost-effectiveness of the care for a very 
vulnerable population of children.
    Mr. Pallone. I think you kind of answered my second 
question, but could you just talk a little bit more about how 
the Family to Family Health Information Center program is 
different from other HRSA programs and how the staffs are 
uniquely qualified to help families with special care needs? I 
know you kind of answered that but----
    Dr. Lu. Yes, that is right, and because it is unique in the 
sense that they are staffed by parents themselves, and in terms 
of the support, the information, the resources, the training 
that they can provide from their firsthand experience, I think 
that is irreplaceable.
    Mr. Pallone. All right.
    Mr. Chairman, the work of these Family to Family Centers 
has long been supported by members on both sides of the aisle 
so I am hopeful that the program can be continued when the 
committee addresses the extenders.
    I wanted to ask Ms. Rowland a question also about the 
CHIPRA bonus payments. CHIP enrollment performance bonuses 
established by CHIP have incentivized States to more 
effectively administer their CHIP programs as evidenced by the 
growing number of States receiving these bonuses each year. For 
the fiscal year 2009, 10 States received bonuses for a total of 
$37 million. In fiscal year 2013, 23 States received bonuses 
for a total of $307 million. So I think it is important to 
continue providing incentives to States to more effectively 
administer CHIP. In order to qualify for these bonus payments, 
States have to implement five of eight enrollment best 
practices or simplifications. While the ACA has now required 
some of these best practices, States have not uniformly adopted 
all of them, and there is a lot more work to do. Express Lane 
Eligibility, Presumptive Eligibility and 12 Months Continuous 
Enrollment are all very important for enrollment and retention 
of children in coverage, in my opinion.
    So I just wanted to ask you, wouldn't you agree that 
working to encourage States to adopt these simplifications is 
critical and that the availability of the enrollment bonus is 
in part responsible for getting States interested in adopting 
these best practices?
    Dr. Rowland. Well, I think we have learned a great deal 
about the quality of these best practices and that is why some 
of them are now required. And I think to continue to look at 
ways to encourage States to do outreach and effective 
enrollment of the eligible but not enrolled children is an 
important way to reduce the uninsurance of children. So 
certainly being able to maybe look at some other incentives to 
provide in the bonus payments that perhaps if the State chooses 
to eliminate its waiting period for CHIP, for example, that 
that would be another thing that you might want to add on to 
qualifying for the bonus payments. But I think that really 
gives you the ability to give States a true incentive to go out 
and find many of these eligible but not enrolled children, and 
we really just need to look at ways to structure those bonus 
payments so that we are trying and testing all of the ways to 
smooth and streamline enrollment.
    Mr. Pallone. Thank you.
    You know, I just wanted to mention, Mr. Chairman, currently 
the CHIP is authorized for 2015 but I believe we should extend 
the bonus payments for the life of the program, and I agree, as 
we get evidence from the ACA, we want to retool and qualify the 
threshold but for the time being to encourage States to keep 
making gains in coverage. It would make sense to keep the 
program going. And it is also true that of the States that have 
qualified, more than half are led by Republican governors, so 
this is a program that has good results in both red States and 
blue States. I hope we can continue it. Thank you, Mr. 
Chairman.
    Mr. Pitts. The Chair thanks the gentleman. I would also 
like to do what you did, and I will just give you the list. I 
have a number of letters that I would like to submit for the 
record. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. All right. The Chair recognizes the vice chair 
of the subcommittee, Dr. Burgess, 5 minutes for questions.
    Mr. Burgess. I thank the chairman.
    Dr. Rowland, let us stay on the issue of Transitional 
Medical Assistance for a moment. Now that the Affordable Care 
Act has been implemented and we are all lying in the elysian 
fields of Obamacare, is the TMA even necessary any longer?
    Dr. Rowland. Well, sir, I think it depends on what the 
option that the State chose to pursue. So certainly in the 
States that have chosen to do the expansion of coverage, there 
is a way to eliminate the gap as earnings go up because the 
coverage can be continuous. But as you know, half of the States 
have not opted to pursue the extension of eligibility for 
adults that is coming through the Affordable Care Act, and in 
those States, Transitional Medical Assistance is particularly 
important because it would enable individuals to really get the 
ability to go into the workforce.
    Mr. Burgess. I thank you for the answer. So if I understand 
you correctly, the extension of Transitional Medical Assistance 
should only be for those States that are non-participating in 
the Medicaid expansion, as is their right under the Supreme 
Court decision.
    Dr. Rowland. Well, Transitional Medical Assistance at the 
4-month level exists for all States. This is about whether it 
should be extended to the 6 to 12 months, which also provides 
States with some additional flexibility to do premium 
assistance as people transition into the workforce. So it gives 
States the ability to really move people from Medicaid into 
private insurance, and I think that is a very important aspect 
of Transitional Medical Assistance.
    Mr. Burgess. Yes, I think that was actually--I have to 
interrupt you for a minute because my time is limited. I think 
that was actually a flaw in the Affordable Care Act. We can 
talk about that. But for continuation of Transitional Medical 
Assistance, really it seems to me that that is only necessary 
in those States that did not participate in the Medicaid 
expansion, again, which was their right under a Supreme Court 
ruling.
    Dr. Rowland. Correct, except if you are concerned about the 
cost, there actually is a higher cost for the federal 
government to individuals in the States that do the transition 
to the Affordable Care Act coverage because there it is 100 
percent federal financing as opposed to the shared financing 
that goes on for Transitional Medical Assistance. So the----
    Mr. Burgess. Again, forgive me for interrupting, but that 
is a temporary state also and we all know that the FMAP for 
those States that are participating is going to have to change 
at some point in the future. There is a limit to how much money 
the Chinese will loan us for that program.
    Now, you mentioned churning, and I think that is an 
important issue and one that I don't think was ever completely 
well thought through as the Affordable Care Act was discussed 
because you are going to have people that continuously earn at 
different levels during the course of a year, and 137 percent 
of federal poverty level may sound great when we talk about it 
here in a committee or in a federal agency, but in real life, 
there are people whose income may fluctuate wildly throughout 
the course of the year. When we had the hearings on the people 
affected by the blowup of the Deepwater Horizon, we had a 
hearing down on the Gulf Coast of Louisiana. We heard from a 
shrimper who earned a fantastic amount of money during the 
month of May but the rest of the year he is flat broke. So he 
is going to transition from Medicaid into an exchange and then 
back into Medicaid. That seems terribly inefficient as a way to 
structure that. So your program prevents that from happening?
    Dr. Rowland. It would help maintain coverage throughout the 
period so that during these lapses where one month there is a 
lot of income and the next month there is less, you have 
continuous eligibility during that period so it eliminates 
having to transition and really helps managed-care plans to be 
able to more effectively provide continuous care as well as 
reduces State administrative burden.
    Mr. Burgess. Forgive me. I don't think it is our role to 
help managed-care plans.
    Dr. Lu, let me just ask you a question because in both your 
spoken and your written testimony, you talk about a study among 
19-year-olds. Their lifetime risk of arrest was significantly 
lowered. What period of time did this study comprise?
    Dr. Lu. The study, I believe, was a longitudinal follow-up 
of these children and families over a two-decade period.
    Mr. Burgess. Correct. It would have to be two decades if 
you are dealing with a population of 19-year-olds who received 
home visits during their gestations with their mothers, but you 
cite a lifetime arrest risk as being diminished. I mean, most 
of us expect to live longer than two decades when we are born, 
so how actually have you compiled those figures? Is there some 
way to project the lifetime risk of arrest or conviction at age 
19?
    Ms. Goldstein. I can speak to that. The lifetime arrest 
record that Dr. Lu referred to is as long as their life had 
been so far, so it was through the age of 19. It was not a 
projection beyond that point.
    Mr. Burgess. Very well. I thank you for clarifying that.
    Mr. Chairman, I will yield back.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the ranking member of the full committee, Mr. 
Waxman, 5 minutes for questions.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    Dr. Rowland, I want to draw your attention to a provision 
that was enacted into law this past December that I fear will 
have serious consequences for access to care in Medicaid. We 
all agree that Medicaid should not pay for care that someone 
else is liable for, and the statute has protections to ensure 
that States can recoup when other parties are liable 
financially. But for pediatric and neonatal care, for more than 
20 years the law had required States to pay promptly and chase 
other sources of payments later. This is to ensure children, 
infants and pregnant women could get access to care promptly 
with no delay. The law was changed in December to say that 
States must delay payments to those providers for up to 90 days 
while they chase other potential sources of payment. Congress 
would be outreached if anyone proposed delaying payments to 
Medicare physicians for 90 days for a service provided. I am 
concerned this change in law will have a negative impact on 
providers' willingness to participate in Medicaid and will harm 
access to care for children and infants. Could you comment on 
this?
    Dr. Rowland. Well, as you know, this committee has long 
been concerned about access to care for Medicaid beneficiaries 
and the willingness of physicians to participate in the 
program. One of the areas that MACPAC has been looking at is, 
what are the barriers that prevent more primary care and 
specialists from participating in the program, and we learned 
from that that payment delays and inability to get payments 
processed is one of the identifiable issues that doctors raise 
about why they are unwilling to participate in this program. So 
I think one really needs to look at whether such a delay in 
payment would affect the access to care that is so important 
given Medicaid's substantial role today in paying for nearly 50 
percent of all births in the country and a high share of the 
neonatal care. This is critical to look at.
    Mr. Waxman. It seems just logical, and we should expect 
that that is going to happen if we are going to delay payments 
just to delay payments when we don't it anywhere else and there 
is no reason to delay it.
    Mr. Hackbarth, last month this committee held a hearing 
where we heard from a number of stakeholders about how the 
changes to the Medicare Advantage program under the ACA were 
affecting patients, and if you listened to some of the 
testimony you would think that Medicare Advantage was withering 
on the vine and that beneficiaries are no longer able to choose 
among private plans as they had before. I would be interested 
to hear MedPAC's perspective on the current state of the 
Medicare Advantage plans. Are plans really in such dire 
straits?
    Mr. Hackbarth. Well, enrollment in Medicare Advantage 
continues to grow and last year increased about 9 percent. 
Medicare beneficiaries continue to have a large choice of 
different options. The average per county is now 10, which is 
down slightly from the year before. Just this week, the CMS 
actuaries reported that in 2012, for the population newly aging 
into the Medicare program, over 50 percent of the new Medicare 
enrollees chose a Medicare Advantage plan, which I think is a 
potentially significant milestone.
    Mr. Waxman. Let me ask you about the parity between an 
Advantage plan and Medicare fee for service. Can you tell us, 
did the Affordable Care Act set Medicare on a path to parity 
between FFS and Medicare Advantage or do you believe that 
Congress should stick to the ACA reforms and continue moving 
forward, or is there any justification for repealing these 
reforms?
    Mr. Hackbarth. We have long advocated, Mr. Waxman, going 
back more than a decade that there be financial neutrality 
between Medicare Advantage and traditional Medicare. We 
continue to believe that that is the wise course. The 
Affordable Care Act moves in that direction, and we would 
encourage Congress to stick with that course. We expected that 
with fiscal pressure resulting from the reduction in benchmarks 
that in fact plans would respond in part by lowering their 
costs if in fact the bids have fallen concurrent with 
tightening of the benchmarks. So it is evolving pretty much as 
we expected and we urge you to continue on this path.
    Mr. Waxman. I know there was a recent recommendation for 
additional changes to Medicare Advantage payments from the 
Commission. This deals with how Medicare Advantage plans 
offered by employers to retirees are priced. Could you describe 
this recommendation and why you believe it is important?
    Mr. Hackbarth. We haven't quite yet made the 
recommendation. It is up for consideration at our meeting next 
week where we will be voting on recommendations for our March 
report to Congress. The issue here is that the bidding system 
used for employer-sponsored plans is different, and there is 
basically no incentive for plans to bid low in the employer-
sponsored area, which results in higher payments for Medicare. 
So we are looking to options for using market bids that come 
from the rest of Medicare Advantage programs to set payments 
for the employer-sponsored plans that would reduce Medicare 
outlays somewhat by using those market-based bids.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the gentleman from Illinois, Mr. Shimkus, 5 minutes 
for questions.
    Mr. Shimkus. Thank you, Mr. Chairman, and welcome. It is a 
great hearing and it is important to remember extenders and of 
course tied with the SGR.
    So I have got a chart. It is the budget numbers for, I 
think if we do this right, 2012 just to keep this debate in 
perspective. And if you look at it, the budget is $3.45 
trillion. Of that, Medicare is $251 billion--no, Medicaid is 
$251 billion, Medicare is $466 billion. Those are 2012 numbers.
    So my first question is to Mr. Hackbarth and Dr. Rowland. 
We don't move any of these extenders, and they lapse. What 
happens to the solvency debate of Medicare and Medicaid? How 
much does that improve the extended life of these programs and 
how many days or months? Mr. Hackbarth?
    Mr. Hackbarth. Mr. Shimkus, I don't have in my head what 
the total spending impact of all of the various temporary 
provisions is. I don't know if my colleagues have it here. If 
not, we could get you that number.
    Mr. Shimkus. OK. But you understand where I am headed to 
with this question, I am sure.
    Dr. Rowland, do you--and I am going to go back to you in a 
minute but do you have a response to that?
    Dr. Rowland. The only estimate that we have is that the 
Congressional Budget Office has estimated that making the 
Transitional Medical Assistance provision permanent would 
reduce federal Medicaid spending.
    Mr. Shimkus. But in the billions, in the hundred billions 
or in----
    Dr. Rowland. In the $1 to $5 billion over a 5-year period.
    Mr. Shimkus. OK. So the point being is this. These 
programs, and we can debate the relevancy, in our federal 
budget, mandatory spending is driving our national debt. These 
will really hardly affect the solvency debate on both Medicare 
and Medicaid. Mr. Hackbarth, would you agree with that?
    Mr. Hackbarth. They are not large relative to these 
numbers. Another potential reference point is how do they 
compare to the cost of repealing SGR, in other words, how much 
do they add to the challenge of financing SGR repeal. That is a 
number where it looks a lot more significant relative to----
    Mr. Shimkus. Obviously, because proportional.
    Dr. Rowland?
    Dr. Rowland. Yes, these are compared to total Medicaid 
spending. These are very small, but they still represent 
obviously spending that helps----
    Mr. Shimkus. So the overall debate, which we try to raise 
all the time and I have been talking about since 1992, if we 
don't get a handle on our mandatory spending programs, they 
will end up consuming the small blue portion, which is our 
discretionary budget. We will continue to have these budget 
fights. We will continue to try to squeeze because the red 
areas are going to continue to grow unless substantial, 
significant reforms occur, which is--and we, since I have been 
here since 1996, I started talking about this in 1992, we are 
unwilling to make those tough choices to have a Medicare 
program for future generations and to have a Medicaid program. 
And I fear for the future. That is just the macro debate. I am 
glad we are having this debate, but it gives me the opportunity 
to put real numbers on the board because real numbers matter 
for our children and our children's children, and as Dr. 
Burgess said, who is subsidizing our debt, also foreign 
countries.
    Let me go then to, I represent about a third of the State 
of Illinois, pretty big area, 33 counties. I would hope in 
these evaluations that we understand distances, the importance 
of rural health care providers in 30 to 45 miles and what is 
that cutoff. So in essence, the Medicare-Dependent Hospitals 
and the Low-Volume Hospitals, I understand these reforms, but 
the importance of this debate for rural America is, there is 
nowhere else to go. They are it. And if they don't have the 
volumes, as you mentioned, to justify their existence, we need 
to figure out how to make sure that those doors stay open.
    Mr. Hackbarth. We emphatically agree, Mr. Shimkus, that we 
need to preserve access for Medicare beneficiaries that live in 
areas that are not sparsely populated. Our point, though, is 
what need to do is make sure we target our assistance to those 
isolated providers, and if we target it well, we can actually 
provide more assistance, more effective assistance than if we 
spread our available dollars loosely over a larger number of 
providers, many of whom are not necessary to assure quality 
care.
    Mr. Shimkus. And Mr. Chairman, if I could just make this 
final statement. It is not a question. But Dr. Hackbarth, you 
are only one who raised the ground ambulance extenders, and I 
think you raised the point, and I think as we look at that, 
there has to be a time frame by which we get real data and 
reevaluate that data.
    Mr. Pitts. Mr. Dingell for questions.
    Mr. Dingell. Good morning, Mr. Chairman. Thank you for your 
courtesy and for holding this hearing today. It is very 
important. And I want to thank our panel members for being 
here. I am not going to be asking questions today because I 
want to make a few observations about the urgent need to get 
SGR reform over the finish line.
    I would like to observe that SGR reform is urgently 
necessary because without it, the whole problems of Medicare 
and our taking care of health care in this country in making 
the Affordable Care Act is going to suffer terribly as will the 
people.
    Now, every year for the last decade, the Congress has 
stopped in to reverse severe cuts in reimbursements for 
physicians wisely mandated under Medicare as mandated by the 
SGR. Due to our failure to fix this fatally flawed payment 
system, doctors and other medical providers have experienced 
enormous uncertainty and have been able to plan for the future, 
and the country and medical system has suffered because of it. 
Last year the Congress made bipartisan, bicameral progress in 
repealing and replacing the SGR with a new system that provides 
stable payments for doctors in the short term and incentivizes 
them to move the alternative payment models forward in the long 
term.
    It is really a shame that we weren't able to put this in 
because of budget matters without having to address the 
question of how we are going to pay for it because it solves a 
problem that was created by some very unwise actions by the 
Congress. The legislation is going to make a significant 
contribution to the change in our efforts to provide health 
care for our people and it will award doctors for their 
performance rather than for the quantity of the work and begins 
to take steps away from the fee-for-service system, parts of 
which are so badly broken.
    I am confident that the three bills passed by this 
committee, the Ways and Means Committee, the Senate Finance 
Committee can be reconciled and sent to the President's desk 
before March 31 deadline but there are still hurdles to be 
overcome.
    I want to commend the members of the committee, the 
leadership of the committee and the other committees in the 
House and Senate for the leadership which they gave in this 
matter and for the vision and for their hard work and for the 
decency with which they worked. This hearing is an important 
contribution to resolving the problem, and I want you to take 
my commendations, Mr. Chairman, for your part in all that has 
been done, and I want you to appreciate not only what you have 
done but what others have done to bring us to this point.
    I want to observe that it would be a terrible calamity if 
we don't carry this thing across the finish line. I want to 
make it very clear that Medicare beneficiaries should not have 
their benefits reduced or cost increased to pay for the reform 
of SGR. Both sides must be willing to compromise and all 
persons must understand that the resolution of this problem 
will probably not be perfect from anybody's view but at least 
we will make progress in getting rid of something that is 
causing us vast difficulty in achieving our purposes. So our 
goals must be responsible compromise, and I have observed over 
the years, compromise is an honorable activity and it is 
something which will make this institution work.
    Second, I am very pleased that the so-called extenders and 
the policies that are traditionally considered a part of the 
short-term Medicare physician payment formula patches are the 
focus of today's hearing. You have been very perceptive in 
doing that, Mr. Chairman, and I thank you.
    I am also pleased that the Senate Finance Committee 
included many of these critical extenders in their permanent 
SGR bill. Many of the extenders provide critical benefits to 
Americans across the country, especially Medicare and Medicaid 
beneficiaries, people who have great need of these things. We 
must not forget about these critical programs as Congress moves 
forward with SGR reform. Specifically, the Qualifying 
Individual program, Transitional Medical Assistance, Express 
Lane Eligibility and CHIP bonus payment programs must not be 
allowed to expire and should be extended as part of the long-
term SGR bill. Congress should consider extending many of these 
programs on a permanent basis, given their proven track records 
and the fact that the annual SGR patch will not be available as 
a vehicle in the future.
    Furthermore, I hope that the Congress will consider 
reinstating Section 508 wage classification that expired in 
2012. I also believe that the Medicare primary care payment 
increase should be extended as well.
    In closing, I hope we can build off the momentum we 
generated last year to get a long-term SGR bill across the 
finish line while not leaving extenders beyond. I look forward 
to continue to working with you and all my colleagues, the 
leadership on this committee and the leadership in the House 
and Senate to get this bill to the President's desk before the 
March 31 deadline.
    Mr. Chairman, there are great accomplishments that have 
been made in this matter. We have taken major steps to solve a 
terrible problem which has been inhibiting responsible 
consideration of health care for the American people, and I 
hope that we don't lose this opportunity because we let some 
kind of partisan or other misfortune create difficulties for 
us.
    Again, I commend you. This is an example of how oversight 
should work, and I thank you for your leadership.
    Mr. Pitts. The Chair thanks the gentleman and thanks him 
for his leadership and cooperation on this issue of repeal and 
reform of the SGR. Thank you for the sentiments you have 
expressed, and I share those with you.
    Now the Chair recognizes the gentleman from Pennsylvania, 
Dr. Murphy, 5 minutes for questions.
    Mr. Murphy. Thank you, Mr. Chairman. I thank the panel 
here.
    Mr. Hackbarth, you have talked about a number of things 
with quality, and quality and value are of great concern to all 
of us, but I want to talk about some of the issues of 
readmission rates and also deal with some of the measures. For 
example, reports have come out from Medicare about readmission 
rates for such things as heart attack, pneumonia, hip and knee 
replacements. I don't think we have those same things on a 
pediatric level, do we, Dr. Lu or Dr. Goldstein? Do we look at 
readmission rates for pediatrics? OK.
    But on the Medicare level, what we have to be concerned 
about is that when people have a chronic illness, we know a 
small portion of folks on Medicare, for example, make up a 
large portion of the cost, particularly those with chronic 
illness. I think 90 percent of the cost is caused by chronic 
illness. And when you have a lot of chronic illness, you also 
have a 50 percent higher rate of depression. You have untreated 
depression and chronic illness, you double the cost.
    So along those lines, MedPAC has recommended new criteria 
for payment to rural hospitals. Now, under MedPAC's criteria 
recommendations, should a facility with fewer than 100 beds and 
approximately 60 percent of discharges under Medicare qualify 
for the Medicare-Dependent Hospital Payments program?
    Mr. Hackbarth. Mr. Murphy, we think that the Medicare-
Dependent Hospital program suffers from some of the issues that 
I have referred to earlier. For example, it is not targeted at 
isolated hospitals, and so a Medicare-Dependent Hospital can 
receive these higher payments, these subsidies, if you will, 
even when it is in close proximity to say, a Critical Access 
Hospital.
    Mr. Murphy. But I think some of those are in danger of 
being changed. One of my concerns with Medicare is how it does 
not pay for coordinated care. For example, Southwest Regional 
Medical Center in Greene County, Pennsylvania, used its 
Medicare-Dependent Hospital funding to provide case management 
services for patients upon discharge. So if you were to 
eliminate those payments, could it not lead to readmissions of 
patients who had trouble following their discharge orders?
    Mr. Hackbarth. Well, we absolutely share your concern about 
better care for complicated patients, many of whom have 
multiple----
    Mr. Murphy. I just want to make sure there is funding to 
help them.
    Mr. Hackbarth. Well, we don't think that this sort of 
program is the best way to attack that problem. We think that 
mechanisms like accountable care organizations where an 
organization assumes responsibility for a full range of 
conditions.
    Mr. Murphy. This hospital I am talking about is way outside 
of a 25-mile boundary from a Critical Access Hospital, and when 
I look at what is happening here--and let me go to something 
that was recently in the Baltimore Sun. They talked about 500 
patients in the State of Maryland with psychiatric problems 
account for $36.9 million a year with regard to psychiatric 
services because one of the problems that occurs is when 
someone has a psychiatric problem such as psychosis and they 
have a co-occurring symptom of that called anosognosia, which 
means they are not aware they have a problem. That also occurs, 
for example, in stroke victims who may have a right-sided 
problem in a stroke, and if the left side of their body doesn't 
work, they do not even know that the left side of the body 
doesn't work. And with psychiatric symptoms, they may not 
realize their hallucinations or delusions are not real.
    So what happens when they are discharged from a hospital, 
they stop taking their medication, and it is essential in these 
cases that there is someone who is working with them. Now, that 
is in Baltimore, but the example I am giving is hospitals in a 
very rural area. I just want to make sure we have mechanisms in 
place to look at coordinated care, and the reason for that is, 
as long as we are using measures such as readmission, 
readmission alone can't be the criteria because sometimes 
readmission is a symptom of the disorder where we are not 
maintaining that coordination. So what advice, where could we 
go with this in improving this?
    Mr. Hackbarth. Well, again, I think the clinical problem 
that you are raising is a really important one, not just for 
the individual patient but for the program. Our goal is to 
address the needs of the patient in the most effective way 
possible. We don't think that poorly targeted subsidies, some 
of the money from which might be used for good purposes, is the 
best way to deal with a systemic problem such as you have 
identified. So if we have a finite amount of money to spend, 
which we do, we need to be very careful. So one thing that has 
been done recently in post-discharge care is to create a code 
where clinicians will be paid for coordinating care post 
discharge. That is a much more targeted response to the 
clinical problem as opposed to paying more for Medicare-
Dependent Hospitals.
    Mr. Murphy. Well, let us continue to work on that together.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the gentlelady from California, Ms. Capps, 5 minutes 
for questions.
    Mrs. Capps. Thank you, Mr. Chairman, and thank you, 
witnesses, for your testimony today.
    Drs. Lu and Goldstein, the Affordable Care Act established 
several new programs that you described in your testimonies, 
the Personal Responsibility Education Program, or PREP, and 
also the Maternal, Infant, Early Childhood Home Visiting 
program, as well as the Health Workforce Demonstration 
Projection for Low-Income Individuals. I am interested in all 
of these.
    You mentioned that comprehensive evaluations are ongoing. 
From your testimonies, even as we await results of these 
comprehensive evaluations, early indications seem to me that 
these programs are successful, and importantly, they are 
grounded in sound evidence. Could you each just say a word, if 
you will, a very brief description on the successes of these 
programs thus far and how these three programs are informed by 
available evidence? Let us start with you, Dr. Lu, but also Dr. 
Rowland just for a minute each.
    Dr. Lu. I can share about the home visiting program. As I 
mentioned, the home visiting program is built on decades of 
evidence on its effectiveness, and as of 2013, we are now 
reaching and serving more than 80,000 parents and families in 
738 communities, and that is two-thirds of all the communities 
identified by the States to be in the highest risk for adverse 
health outcomes in the country.
    Mrs. Capps. Let me just turn to you, Dr. Rowland, for one 
of the other programs, if you would.
    Dr. Rowland. We mostly looked at the way in which Medicaid 
care can be coordinated and clearly have looked at the fact 
that case management and integration of services is really 
critical, especially for coordinating the care for people with 
behavioral problems.
    Mrs. Capps. OK. Dr. Lu, I was a long-time visiting nurse, 
and I know firsthand of the benefits home visiting can have on 
high-risk pregnant women, children and families, helping them 
be healthy, make healthy choices, accessing critical health 
care services and supports needed to have healthy babies. I am 
referring now to a program in my district. The San Luis Obispo 
Department of Health delivers a nurse family partnership model, 
which has shown long-term improvements in child health and 
educational achievements as well as family economic self-
sufficiency. The home visiting program supports States in 
expanding these programs and services to reduce poor birth 
outcomes, preventable childhood injuries, all the good things 
that happen along with these home visits, issues that affect 
all of us as taxpayers. So I just want to get on the record 
what is at stake if this program is not continued, Dr. Lu.
    Dr. Lu. Well, if the program is not continued, families 
will be losing services that are proven to improve maternal-
child health outcomes and have all the positive benefits on 
positive parenting, children's cognitive, social, emotional and 
language development as well as school readiness. Also, the 
investments that States and communities have made to build up 
the service systems and capacity will be lost if the program is 
not continued.
    Mrs. Capps. Right. Dr. Goldstein, in your testimony you 
mentioned that States receiving Title V funding for Abstinence 
Only Until Marriage Education programs are encouraged but not 
required to use evidence models that are medically accurate. 
This differs from the statutory requirements in PREP hat say 
these programs which teach both abstinence and contraception 
must be evidence-based and medically accurate. Could you 
elaborate on the difference in the evidentiary standards for 
these two programs?
    Ms. Goldstein. Certainly. The statutes require that 
grantees in both programs provide medically accurate 
information. The PREP program also requires that services be 
evidence-based or substantially incorporate elements of 
evidence-based programs. The Abstinence Education program does 
not have such a requirement although we have encouraged 
grantees to use evidence-based approaches, and as I noted, 
there are evidence-based models for a range of approaches to 
teen pregnancy prevention including both comprehensive sex 
education and abstinence education.
    Mrs. Capps. Thank you. I was very much involved with a 
school-based program for teen parents when I was in my 
community as a school nurse, and I have such vivid images of 
these young women and parents incredibly strong and hardworking 
but if they had had appropriate medically accurate information, 
education, empowerment, they could have delayed these 
pregnancies and they could have still been really good parents 
but they would have had time to complete their preparation for 
the future, setting up a more viable economic future for their 
families and children, and that is why I believe our 
investments in PREP are so critically important.
    I thank you again, all of you, for your testimony today, 
and I yield.
    Mrs. Ellmers [presiding]. The gentlelady yields back. I now 
call on Dr. Cassidy from Louisiana for 5 minutes.
    Mr. Cassidy. I was 15 minutes behind, so anyway. Oh, my 
gosh, Madam Chair, can I defer and come back because I was 
thinking I had two more people head of me?
    Mrs. Ellmers. OK. That would be fine. The gentleman yields 
back for a later time. Mr. Griffith from Virginia, 5 minutes.
    Mr. Griffith. Thank you, Madam Chair. I appreciate that.
    As we prepare to permanently repeal and replace the SGR, I 
believe we must also address two vital extenders, and we have 
talked about these previously in testimony today, the Medicare-
Dependent Hospital and the Low-Volume programs, which are 
critical for my constituents and my rural hospitals in 
southwest Virginia. If these programs are not extended, 
Virginia hospitals in total will lose about $10 million and 
most of the hospitals that qualify are in my district, but $10 
million in Medicare reimbursements next year at a time when 
they are already being hit hard by new costs, deep cuts to 
Medicare, other programs, and an economic crisis which is 
exacerbated by the Administration's new regulations and what 
many of us refer to us as their casualties in the war on coal. 
This combination of factors have already resulted in one of my 
rural hospitals closing in Lee County and at least eight of the 
remaining hospitals in my district benefit from these two 
essential programs. They keep the hospital doors open in some 
economically distressed areas that are pivotal to vital access 
to care for my rural constituents. I have got Smith County, 
Russell County, the Lonesome Pine Hospital in Big Stone Gap, 
and I invite you all to go see the soon-to-be-a-major-motion-
picture-based-on-the-book-of-the-same-name, Mountain View in 
Norton, Pulaski, Buchanan, Tazewell, and Wythe. These are not 
hospitals that are necessarily close to a lot of other 
hospitals.
    Mr. Hackbarth, let me go ahead and ask you something. I was 
reading your testimony, and you talked about several programs 
that were based on how many miles one hospital was away from 
another. Do you know, is that done on a map or is that done on 
road miles? And the reason that is important of course is 
because when you come from a mountainous district, if you just 
look at the flap map sitting in your office, two hospitals 
might only be 15 miles away but it might be a 45- to 50-minute 
trip.
    Mr. Hackbarth. I will have to check this, Mr. Griffith, but 
I am pretty sure that it is road miles, and my recollection is 
that the regulations also take into account unique conditions 
like mountains and difficulties and certain times of the year, 
but I will verify that and get back to you.
    Mr. Griffith. And I appreciate that because oftentimes we 
see that in the areas. People say well, yes, there is another 
pharmacy just down the road if one closes. Well----
    Mr. Hackbarth. I come from a mountainous area also.
    Mr. Griffith [continuing]. It may be just down the road but 
it might not be easy to get to.
    Knowing a little bit about my background, do you think that 
district and other districts like mine would be hurt if the 
provisions were not extended or made permanent, particularly 
talking about Medicare-Dependent Hospital and Low-Volume 
programs?
    Mr. Hackbarth. Well, I can't obviously address the 
circumstances of your district. I don't know it. But again, our 
emphasis is on maintaining access for beneficiaries in remote 
areas. I think we are in complete agreement on that. And what 
we want to do or what we urge the Congress to do is with that 
goal in mind focus the subsidies on the institutions that are 
truly necessary to provide care in isolated areas, and right 
now we are concerned that some of these provisions including 
the Medicare-Dependent Hospitals and the Low-Volume Adjustment 
are not well targeted, and I would emphasize again in 
particular the Low-Volume Adjustment is problematic because 
even if you accept the premise, which we do, that there are 
economies of scale in the hospital business, in small 
institutions, many therefore have difficulty keeping their 
costs down. The right measure of that is not just Medicare 
discharges, it is the total discharges. This adjustment is 
based on Medicare discharges alone. So a hospital that has 
relatively few Medicare discharges can get a big adjustment 
whereas a smaller institution as more of an economic problem 
doesn't get the adjustment because it is a different mix of 
public and Medicare discharges. That is not fair, in addition 
to not being----
    Mr. Griffith. And that may very well negatively impact my 
hospitals because we have a disproportionate number--based on 
the rest of the country, we have a lot of older folks that live 
in our communities. We have had some counties that have 
depopulated of mostly the younger folks and so there is a 
disproportionate number of senior citizens in a number of the 
counties that are also rural and underserved. So I look forward 
to working with you on these formulas.
    My concern is, as you might imagine, as we negotiate this, 
I don't want to lose anymore hospitals. We are hoping that we 
can replace the one that is gone but the parent company of two 
of the eight that I mentioned has announced today that they are 
looking for new ways to do things in the future and may even be 
seeking out a strategic partner because they are having some 
difficulties dealing with the new environment we are in, with 
the new laws passed in health care, with the economic situation 
in southwest Virginia and east Tennessee, and with lots of 
other things that are putting pressure on the hospitals and so 
anything that we can do as we find a better formula, that is 
great. I just don't want to see us taking away one of the items 
that is helping these hospitals survive in these small 
communities.
    Mr. Hackbarth. Well, if I could make a suggestion, the Low-
Volume Adjustment that we are discussing here today is a 
temporary provision. There is a permanent Low-Volume Adjustment 
that already exists, and we believe it is structured in a way 
that is much better targeted, and so that is the foundation to 
build on for the committee.
    Mr. Griffith. I thank you, and I yield back.
    Mrs. Ellmers. The gentleman's time is expired. The Chair 
now recognizes Mr. Green from Texas.
    Mr. Green. Thank you, Madam Chair, and I appreciate our 
panel being here. In fact, I know I met and worked with Dr. 
Hackbarth and Dr. Rowland at the Commonwealth retreat that you 
do every year, and I would encourage my colleagues to consider 
that. It is in February. Now, I have to admit, it is not the 
south of Florida this year but it is in Houston, Texas. But you 
will hear, it is bicameral, bipartisan, and bicommittee, 
because we typically in our committee don't deal with Ways and 
Means or Education and Workforce but you will have different 
members, and we can really come and problem-solve in an 
informal setting.
    The Affordable Care Act takes a number of important steps 
to broaden access to health care, especially for people who are 
working and are unable to receive employer-sponsored insurance 
or afford individual market plans. While the number of 
uninsured is already decreased, some challenges remain, and I 
want to follow up on my colleague, Dr. Burgess, talking about 
the Transitional Medical Assistance churn. That churn is due to 
a small change in income and an individual will be switched 
from being eligible for Medicaid and be eligible for now 
subsidized coverage in exchanges. Switching back and forth 
between insurance coverage can mean a change in benefits, 
participating providers and pharmacies and out-of-pocket 
expenses, not to mention the administrative paperwork for the 
State or an insurance company or a doctor's office.
    One of the programs to help reduce churning is the 
Transitional Medical Assistance, and Ms. Rowland, I understand 
that MACPAC has recommended Congress make TMA permanent in part 
because of this churn factor. Could you elaborate? And I know I 
am following up and I want to address some of Congressman 
Burgess's issues, but is that the reason because the 
recommendation from MACPAC?
    Dr. Rowland. Well, we have tried to look at how to make 
transitions between coverage smoother and more streamlined, and 
one of the ways clearly is to help the lowest-income Medicaid 
beneficiaries who qualify through the 1931 provisions, which 
are the old welfare-related categories be able to maintain 
coverage, and we have looked at the time period, and the 12-
month period really does provide for continuous coverage that 
allows them to go into the workplace and back and forth and the 
income volatility of individuals at that very low income and 
the income spectrum is very important to take into account to 
try to keep care continuous so that people don't have to end 
treatment and so that the States don't have to continually re-
administer the benefits.
    Mr. Green. Because it raises administration costs plus the 
cost to the patient.
    And Dr. Burgess talked about in States, for example, Texas 
didn't expand their Medicaid and also does not have a State 
exchange. The TMA is really important in those States to make 
sure it happens, but even States that have their own state 
exchange or use the Medicaid expansion could use transition 
assistance.
    Dr. Rowland. We believe that the Transitional Medical 
Assistance is critical in the States that have not expanded 
coverage to keep people from going to uninsurance from one 
dollar of increased income. In the States that have elected to 
go forward with the expansion, the expansion will provide for a 
way to transition from Medicaid coverage on the income side to 
either the exchange or to the new Medicaid coverage options. So 
the Commission has recommended there that we consider giving 
States the ability to opt out of TMA if they are able to assure 
that transition, and that is an issue that we will be looking 
at in the future as well.
    Mr. Green. And I know one of the concerns is a 12-month 
continuous eligibility to make sure there is not a gap in 
coverage, and I know in States like Texas, who has a 6-month 
for Medicaid and SCHIP also but Congressman Barton and I both 
have legislation to make sure that continuous coverage would be 
12 months because if you have people that are low wealth, they 
are not going to come in every 6 months, and particularly if 
they are ill, they will have that lapse in coverage and they 
will show up at one of my emergency rooms and cost much more 
than having that continuous coverage.
    The Medicaid primary care bump helps ensure that sufficient 
access to Medicaid providers as enrollment increases. The ACA 
requires States to raise their Medicaid fees to Medicare levels 
at least for family physicians, internists, pediatricians and 
primary care. Can you comment on the impact of that that lack 
of this parity between Medicare and Medicaid provider rates on 
physician participation. I know particularly because, for 
example, in Texas, TRICARE pays the lowest, Medicaid pays a 
little more and then Medicare pays more. Of course, private 
sector pays more. But to have that Medicaid and Medicare would 
help us actually have more physicians accept more Medicaid 
patients, I think.
    Dr. Rowland. Well, one of the things that the Commission 
has looked at is in fact what are the incentives for physicians 
to participate within the Medicaid program and what are the 
barriers. And clearly, low payment rates and delayed payments 
are two of the issues that prevent many of the primary care 
doctors as well as specialists especially to participate in the 
program. So I think that looking at the fees that are paid or 
the payment levels for Medicaid are a very important piece. We 
have to look at the role managed care is now playing and so we 
really need to understand more about the payment levels within 
managed care plans, and we believe that improving access to 
primary care is of course a critical part of the Medicaid 
program and one that is very important to make sure we get full 
participation there. But the----
    Mrs. Ellmers. The gentleman's time is expired.
    Mr. Green. Thank you, Madam Chair. I know we ran over time, 
but I appreciate the committee having this hearing today so 
hopefully we will come back and visit it again. Thank you.
    Mrs. Ellmers. Thank you. Now the Chair recognizes Dr. 
Gingrey for 5 minutes.
    Mr. Gingrey. Madam Chair, thank you very much. I would like 
to also thank the witnesses. One very famous person once said 
there is nothing more permanent than a temporary federal 
government program. I think that was probably President Reagan, 
but of course, it could have been my good friend, Chairman 
Emeritus Dingell. I did like what he said this morning in 
regard to SGR and the bipartisanship and all the work that has 
gone into that, and we continue to push to try to get that 
across the finish line in the next couple of months hopefully. 
I agree with him 99 percent of the time but I am not sure I 
agree completely with his remarks, don't leave the extenders 
behind.
    As I said, there is nothing more permanent than a temporary 
federal government program. Our constituents need to realize 
that one of the most important things we do other than passing 
legislation is oversight of current legislation and temporary 
programs and indeed maybe even all programs that probably 
should be looked at every 10 years, every 5 years, and say hey, 
do we need to continue to do this, is it serving its purpose or 
is it time to end this program, even if it was permanent, but 
certainly on these temporary programs like these extenders, I 
think we need to look at a lot of them and question whether or 
not we need to go forward.
    And let me then direct my question to Mr. Hackbarth. I will 
direct all my questioning to you. As an example, one such 
program, group of programs, are in the Medicare ambulance add-
ons. In reviewing the data around ambulance service 
availability in the Medicare program, what have you found? For 
instance, have you found growth in the number of providers or 
has there has been a decrease, or to put it another way, has 
there been any evidence of service inadequacy in regard to the 
ambulance program?
    Mr. Hackbarth. Yes, we found no evidence of inadequate 
service. We found on the contrary evidence of growth in 
service, both in terms of the number of trips paid for but also 
significant new entrants, a lot of private capital, some big 
private equity firms buying into the ambulance business. This 
is one area where we do not have Medicare cost reports, and one 
of the things that we do when we don't have cost report 
information is look at the market for signals. When big money, 
smart money is buying into an area, it is usually a sign that--
--
    Mr. Gingrey. So you are getting some ominous signals in 
regard to that. And I want to draw your attention to the 
ambulance extender title temporary increase for ground 
ambulance services under the Social Security Act. My office has 
been approached by a number of constituencies who want to make 
this extender permanent, and my staff confirms for me that this 
provision and its spending was never, never intended to be made 
permanent. Can you tell me, Mr. Hackbarth, if Congress intended 
this extender to be a temporary provision and do you believe 
the data supports making the policy permanent?
    Mr. Hackbarth. Dr. Gingrey, are you referring to the 2 and 
3 percent add-on payments for urban and rural ambulance 
providers?
    Mr. Gingrey. Yes.
    Mr. Hackbarth. That is a temporary provision and one that 
we don't think needs to be extended based on our analysis. We 
have suggested, however, that the rates paid for non-emergency 
transport be decreased and then use that money to fund higher 
payments for emergency transport, and the reason for that 
change is, we see a lot of this new entry that I referred to is 
really being targeted at non-emergency ambulance transport.
    Mr. Gingrey. Yes, but with urban transports accounting for 
76 percent, an increasing share of claims, and non-emergency 
ambulance transport most common in the urban areas, do you 
still believe that urban adjustments are needed?
    Mr. Hackbarth. No, we do not but we do recommend that there 
be this recalibration of the rates for emergency and non-
emergency rates.
    Mr. Gingrey. Mr. Hackbarth and all of the panelists, thank 
you. I want to yield the remaining 22 seconds to my colleague 
from Tennessee, Ms. Blackburn.
    Mrs. Blackburn. Well, I thank the gentleman for yielding, 
and since the time is so short, I will just say, reliable 
ambulance services are very important to our district. We have 
watched very closely the add-on payments. We think they are 
necessary for rural districts like mine, and the Low-Volume 
Hospital Adjustment is something for our rural hospitals we are 
very concerned about. Those are things that in my district we 
would like to see those made permanent, and with that, I yield 
back to the gentleman from Georgia.
    Mr. Gingrey. I yield back.
    Mrs. Ellmers. The gentleman yields back. The Chair 
recognizes Dr. Christensen from the Virgin Islands for 5 
minutes.
    Mrs. Christensen. Thank you, Madam Chair, and thank you all 
for being here with us this morning to discuss these important 
extenders.
    I want to follow up on Congressman Green's questioning 
about the primary care bonus. The ACA boosted payment for 
primary care services for 2 years so that it would equal the 
Medicare payment rates, and I think that is an important step, 
and I believe it is something that is worth continuing into the 
future.
    Dr. Rowland, the Commission doesn't have a recommendation 
yet on this policy, and I know there has been some concern that 
it is has been difficult to set up the payment changes, 
especially for policy, which at the moment, at least, is only 
short term, and to me, this further illustrates why important 
policies like the primary care bonus shouldn't really be 
temporary, it should be permanent. Could you comment on how the 
short-term nature of some policies can cause a disincentive for 
action?
    Dr. Rowland. Well, clearly, the 2-year period for the bump-
up in primary care payments is an important test of what the 
increase in payments will do to access to care, and that is 
something that it is too early to really evaluate but also what 
we know from programs is that it takes time to change 
incentives and so in that the short 2-year period, they really 
have not given enough incentive to many of the physicians who 
participate knowing that it may expire after 2 years. So I 
think it is very important to both look at what the effect of 
it has been, and then there has been some concern within the 
Commission about whether that payment bump limited to primary 
care physicians is really getting at some of the other gaps in 
participation, especially among specialty care, and especially 
among mental health and behavioral health providers.
    Mrs. Christensen. Yes, I would share that concern. You 
know, as you said, it is too early to really evaluate what 
impact those bonuses have had on access to care, and I am 
worried that some people would argue that we need more data 
before we decide to go forward with continuing this policy, 
which might set up a catch-22 because under current law, the 
policy will end before we might have adequate data. Given what 
we know about underpayment in Medicaid, it would seem highly 
unlikely that payment parity would cause a decrease in access 
or cause beneficiary harm. Can you comment on that?
    Dr. Rowland. Well, clearly, we do need time to look at what 
the effect of this has been but we also know that Medicaid 
payment levels have been extremely low in many areas and that 
this increase is likely to be one that will continue to be 
there for physicians and attract them, and we really need to 
look at the availability of primary care services and how to 
boost that as we try to decrease the use of emergency rooms.
    Mrs. Christensen. Dr. Goldstein, as we know, disparities 
exist in different teen population groups for sexually 
transmitted disease and teen pregnancies, so we are really 
pleased that under PREP, there is a focus on those vulnerable 
populations to reduce the incidence of both the pregnancy and 
the SDIs. Could you comment on the kinds of populations that 
PREP prioritizes and within that, what populations of States 
chosen to target?
    Ms. Goldstein. Yes, the most common targeted population 
among States is in high-risk areas that have above-average 
rates of teen birth or sexually transmitted infections. Some 
States are also focusing on specific vulnerable populations 
such as Hispanic youth, African American youth, youth in foster 
care and in the juvenile justice system.
    Mrs. Christensen. OK. And PREP specifically sets aside a 
small portion of funding to implement and evaluate innovative 
strategies in order to expand the menu of effective programs 
among the vulnerable or marginalized young people. What is the 
process for evaluating these emerging strategies and the 
associated timeline for findings?
    Ms. Goldstein. All of the grantees in the Personal 
Responsibility Education Innovation Strategies program are 
being evaluated. A few of them are included in a federal 
evaluation project, and reports on impacts are expected in 
2016. The rest of the grantees are conducting their own 
evaluations. HHS is providing technical assistance to ensure 
that these evaluations are rigorous. The evaluations are 
designed to meet the HHS evidence standards, so when they are 
finished, the results can be reviewed for evidence of 
effectiveness, and we expect the grantees' evaluations will 
have impacts in 2016 as well.
    Mrs. Christensen. Thank you. I yield back.
    Mrs. Ellmers. The gentlelady yields back. The chair 
recognizes Dr. Cassidy from Louisiana for 5 minutes.
    Mr. Cassidy. Thank you, Madam Chair.
    Mr. Hackbarth, just to follow up briefly on what Mr. Waxman 
said, in fairness, the cuts to the MA program, only 4 percent 
of them have actually been implemented so far. This is not a 
question; it is a statement. I gather the demonstration 
projects, which GAO criticized the kind of worth of, 
nonetheless have mitigated the cuts as of up to now and they 
actually don't begin to be implemented until frankly 
substantially this year and by 2019 there is estimates of 
decreased enrollment in MA plans because of this. That is not a 
question per se. It is just a kind of useful correction to Mr. 
Waxman's misleading.
    Now, next, as regards the fully integrated Medicare 
Advantage programs, I see Senate Finance only wants to continue 
those D-SNPs which are fully integrated. You make the 
recommendation that we continue all of these programs. Is that 
a fair statement?
    Mr. Hackbarth. No, we recommend continuation of the fully 
integrated, those that assume both clinical and financial 
responsibility.
    Mr. Cassidy. Got you. So if they are two-sided risk, they 
would then be allowed to continue?
    Mr. Hackbarth. Well, all Medicare Advantage plans----
    Mr. Cassidy. Are two-sided risks, right? So tell me, when 
you say fully financially integrated, what do you mean by that? 
I am sorry.
    Mr. Hackbarth. Well, that they assume under a global 
payment responsibility for providing all of the covered 
services.
    Mr. Cassidy. But from what we just said, that would be all 
of those plans, correct?
    Mr. Hackbarth. In the Medicare Advantage program, yes, they 
are by definition all assuming financial risk. The issue on D-
SNPS is, do they assume responsibility for both Medicare and 
Medicaid benefits.
    Mr. Cassidy. Correct.
    Mr. Hackbarth. And what we see is evidence that 
organizations that assume responsibility for both types of 
benefits actually can improve care and reduce costs. If those 
two are separate and there isn't that integrated 
responsibility----
    Mr. Cassidy. I see. So when you say integration, you mean 
between Medicaid and Medicare, the dual-eligible population?
    Mr. Hackbarth. Exactly.
    Mr. Cassidy. Got you. That makes sense to me. I agree with 
that, and I think that is a positive policy.
    Let me move on to the ambulances. My colleagues have 
addressed this. But when I turn one ambulance service, they 
said the growth in the non-emergency services is because 
basically they are going out, finding somebody who has had a 
hypoglycemic episode, they do a finger stick, they find their 
glucose is low, they give them sugar, if you will, of some 
sort, they wake them back up. They don't transport them; they 
leave them there. And actually they are providing some basic 
services and saving money on the ER visit, if you will. Now, 
have you been able to look globally to see, one, if this is 
true, and two, if they are providing these services, does it 
decrease the Part A amount, for example?
    Mr. Hackbarth. I don't know about the specific example that 
you have described. My understanding of the Medicare payment 
rules for ambulance is that Medicare only pays if the patient 
is transported, so in the example you describe, if the 
ambulance goes out and doesn't transport the patient anywhere, 
then I don't think it is covered under the ambulance policy at 
all.
    Mr. Cassidy. Got you. And you also mentioned the difference 
between certain geographic locations as regards the frequency 
of transport for things like end-stage renal disease.
    Mr. Hackbarth. Absolutely.
    Mr. Cassidy. That seems like that would be variable upon 
poverty rates, upon degree of MA penetration that might provide 
services.
    Mr. Hackbarth. I am sure that there are a lot of factors 
that go into that variation but the variation is----
    Mr. Cassidy. But can we understand that unless we actually 
do some sort of statistical analysis correcting for rates and 
poverty, for example----
    Mr. Hackbarth. Well, we have not tried to do any sort of 
multi-variant analysis of the variation but I would be very 
surprised if poverty alone explained the sort of variation that 
we are talking about. We are talking about 20-, 30-fold 
variation across States.
    Mr. Cassidy. I get that. I will just say, coming from a 
State in which there is high levels of poverty, some of the 
poorest regions in the country are in Louisiana, I can 
understand how your rate of poverty may be 30-fold relatively 
to a suburb in New Jersey, a rural suburb.
    Dr. Rowland, I am very intrigued by this integration of 
Medicaid and Medicare, the dual-eligible population, and I know 
that you referenced that, and you referenced that in your 
testimony. Can you give any preliminary results as to whether 
aggregating, or what are the preliminary results in terms of 
aggregating payment in terms of increasing coordination of 
care?
    Dr. Rowland. Well, clearly there are efforts at the State 
level to try to integrate Medicaid services with Medicare 
services. We also have the financial alignment demonstrations 
that are now out in the field but there are no results back 
from them. In fact, most of them are just in the process of 
being launched.
    What we have been looking at is how do you provide for 
better coordination of care, and as Mr. Hackbarth has noted, 
there is some evidence that when a plan integrates both sets of 
services, that they are more able to maintain them. We are 
particularly concerned about how to merge the behavioral health 
aspects together with the medical care in plans and have been 
looking not so much just at the dual-eligible population but at 
Medicaid's responsibility for people with disabilities, which 
includes many individuals who need that merger.
    Mr. Cassidy. If you have preliminary data on that, I would 
love it if you would share that with us.
    Dr. Rowland. We will share it with you whenever we have it.
    Mr. Cassidy. I yield back. Thank you.
    Mrs. Ellmers. The gentleman yields back. The Chair 
recognizes Mr. Matheson from Utah for 5 minutes.
    Mr. Matheson. Thank you, Madam Chair, and thanks for 
holding this hearing.
    I think we all want to have a permanent fix to the SGR 
issue, and our committee has passed out a bill last year, and 
we have had Ways and Means and Senate Finance look at this as 
well and move legislation, and I think we all desire that 
outcome of fixing this problem with SGR but it is really 
important we are having this hearing because we have to figure 
out how we are going to handle a lot of these extenders that 
have always been associated with these temporary one-time 
fixes, 12-month advances, 6-month advances, SGR. We had all of 
these extenders, and what are we going to do if we don't have 
that regular process on SGR anymore? How are we going to handle 
these? So I applaud this committee for holding the hearing 
today.
    I have heard from so many providers and patient groups 
about their concerns about specific programs in a world where 
the SGR issue has been permanently fixed, and I want to say 
that I am actually going to keep my comments pretty brief, and 
I don't even have any questions for you. I just want to raise a 
couple of quick issues and I will yield back after that.
    I do think that there are a number of these extenders that 
have been traditionally attached, as I said, to the SGR patch 
and we ought to talk about how important they are and what we 
do to fix them, critical programs like the Special Diabetes 
program, which has widespread, bipartisan support to providing 
funding for diabetes research, or the Maternal, Infant and 
Early Child Home Visiting program, which we have heard about 
earlier in this hearing. It helps provide coordinated resources 
to expectant new parents, improves newborn health and works to 
increase economic self-sufficiency. I think those are just a 
couple of examples of many of these programs in our discussion 
today which work to save money. They remove potential cuts to 
providers. They are going to maintain better access to 
beneficiaries and they provide really important services to 
certain at-risk populations.
    So I am glad we are going through regular order, Mr. 
Chairman. Again, I applaud you for holding this hearing and I 
appreciate our panel coming here today and I look forward to 
continuing to work on these extenders, and I will yield back my 
time.
    Mr. Pitts. The Chair thanks the gentleman, and with 
unanimous consent would like to enter into the record a 
statement by the Rural Hospital Coalition. Without objection, 
so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. The Chair now recognizes the gentlelady from 
North Carolina, Ms. Ellmers, for 5 minutes for questions.
    Mrs. Ellmers. Thank you, Mr. Chairman, and thank you to our 
panel today on this very important issue regarding SGR.
    Dr. Hackbarth, I have a question in relation to some of the 
situations with the 2014 CMS changes that are coming with the 
physician fee schedule. In 2013, MedPAC reported to Congress 
that ``if the same service can be safely provided in a 
different setting, a prudent purchaser should not pay more for 
that service in one setting than in another'' and then it goes 
on to discuss some of the payment variations.
    But in the 2041 CMS Medicare fee schedule, it seems to be 
doing the exact opposite. Can you expand on that and explain 
the thinking behind that?
    Mr. Hackbarth. Mrs. Ellmers, is there a particular example 
in the CMS proposed rule that you----
    Mrs. Ellmers. I am particularly concerned with oncology 
services, but certainly any of the outpatient services that can 
be provided in a hospital or outside in an outpatient setting 
or ambulatory care, the difference.
    Mr. Hackbarth. Yes. So you correctly stated what our 
principle is, which is that we shouldn't pay higher rates for 
hospitals if the same service can be safely provided in lower-
cost settings, and we are in the process of making 
recommendations to the Congress to move Medicare policy in that 
direction. We made a recommendation about evaluation and 
management services a couple years ago. At this upcoming 
meeting next week, we are looking at an additional batch of 
services, many cardiology services, for example. CMS doesn't 
always agree with our perspective on issues, and this is an 
example where I think there have been some differences of 
opinion.
    Mrs. Ellmers. OK. And too, I cited oncology services and 
some of the outpatient services but I am also concerned about 
reimbursement for some of the Medicare therapy services. Now, 
earlier--and I actually kind of crossed this off my list 
because I think you really referred to those changes coming 
more in the accountable care organizations. Is that true as far 
as the therapy cap issue?
    Mr. Hackbarth. So what we have recommended on outpatient 
therapy, we don't believe that there should be hard caps 
imposed on therapy services. That said, we do think that after 
some point, additional services should be subject to review 
before they occur, which is an approach very similar to what 
private insurers typically use in outpatient therapy.
    Mrs. Ellmers. OK. And just lastly, and this is really more 
of a comment and a question for you as well, I continue to be 
concerned about the physician reimbursement in relation to Part 
B payments through hospitals or Part A payments through 
hospitals with the upcoming CMS changes. I am afraid that with 
the trend that is moving forward that this is going to affect 
the viability of Medicare to our seniors, and I just want to 
get your reassurance if you can commit to continue to work with 
my office on making sure that MedPAC, that we work in 
conjunction to make sure that reimbursement is----
    Mr. Hackbarth. I would be happy to
    Ms. Ellmers. Thank you. Thank you, sir, and I yield back 
the remainder of my time.
    Mr. Pitts. The Chair thanks the gentlelady and now 
recognizes the gentlelady from Florida, Ms. Castor, 5 minutes 
for questions.
    Ms. Castor. Well, thank you, Mr. Chairman. I would like to 
thank you as well for organizing this hearing today and I would 
like to thank all of our witnesses for your service and 
attention to the health and well-being of American families and 
to our ability to provide health services in the most efficient 
manner.
    I think most people understand that children have a better 
chance of success in life if they are healthy and they have 
consistent access to a pediatrician and the doctor's office and 
those important checkups, and health services provided under 
Medicaid have simply been fundamental to ensure that millions 
of American children do get those vision tests, the wellness 
checkups, immunizations in a consistent fashion, whether they 
are growing up healthy or they have certain special needs.
    I want to make sure everyone is aware that in the Congress, 
we have a very active Children's Health Care Caucus. I co-chair 
the Children's Health Care Caucus with my Republican colleague, 
Representative Reichert of Washington, and with the help of the 
Children's Hospital Association, First Focus, the American 
Academy of Pediatricians and others, over the past 2 years we 
have had educational sessions on Medicaid for members and for 
professional staffers here on Capitol Hill, and I wanted to 
extend the invitation to all of my colleagues and to everyone 
in attendance today to attend those sessions, and we get into a 
lot of the detail that we are discussing here today.
    A number of members have brought up the issue of access to 
Medicaid. We know that over time there has been a real problem 
with enough providers to serve the population, and one good 
thing the Congress did a couple of years ago was to bump up the 
Medicaid reimbursement to doctors. Implementation didn't go as 
quickly as we wanted it to for primary care providers. 
Fortunately, HHS finally finished that, and we were able to 
include pediatricians and pediatric specialists, which I think 
is very important to children's health care.
    But Dr. Rowland, can you tell us the status of 
implementation across the board now that HHS has that complete? 
Have States been able to implement it?
    Dr. Rowland. Well, we think that most States have been 
moving forward with implementing it. The Commission is in the 
process of obviously looking at what can be learned from the 
State experiences and we will be going out to re-interview some 
of the States that we talked to earlier about how 
implementation has been proceeding. Unfortunately, data is 
always delayed beyond where we would like it to be. There 
aren't any specific data yet on what the impact has been on 
changes in terms of participation of physicians in the program.
    The one issue that the Commission, however, has discussed 
and raised is whether that provision needs to also be broadened 
to other providers who help provide those primary care services 
and do not fall within the definition in the statute and 
especially to look at some of the specialists that are so 
important especially where there are intense pediatric needs 
and real shortages.
    Ms. Castor. I think that is going to be a very important 
challenge for us moving forward and we should at least extend 
it now, and then based upon your data and recommendations go 
further to make sure that people are getting the care they need 
under Medicaid.
    And we all have the goal of improving the overall 
efficiency of Medicaid and the Children's Health Insurance 
Program. One tool States have to assist them towards this goal 
is the Express Lane Eligibility. This efficiency simplifies and 
streamlines the application and renewal process by allowing 
States to use eligibility information obtained from other 
income checks like the School Lunch program or SNAP, and we all 
get annoyed when government or you go to the doctor's office 
and they are asking you to fill out paperwork again and again, 
the same information, and the Express Lane Eligibility helps 
reduce that duplicative paperwork. So I understand now that 13 
States have proven to be real leaders in cutting paperwork and 
were able in doing that to reach thousands of more children and 
make sure they can get to the doctor's office.
    This sounds very promising, but 13 is still pretty low. I 
know the Commission has not formally opined on Express Lane 
Eligibility but there is promising evidence. Could you tell us 
in terms of increasing enrollment as well as reducing State 
administrative costs how effective the Express Lane Eligibility 
has been?
    Dr. Rowland. From what we can learn so far, it has been an 
effective way of shifting people from one program's eligibility 
determination process into the Medicaid program itself, so it 
has boosted enrollment in those States. It is now being looked 
at for adult eligibility in two States to try to see if under 
the waivers they have been granted through the ACA they can 
facilitate getting parents into coverage as well, and I think 
that the more we can simplify and streamline our eligibility 
processes and use electronic transfers to get more people 
covered without having to go through, as you say, reapplying, 
reapplying and reapplying, the better off both beneficiaries 
will be as well as the States that try to administer these 
programs.
    Ms. Castor. Thank you very much.
    Mr. Pitts. The Chair thanks the gentlelady and now 
recognizes the gentleman from Florida, Mr. Bilirakis, for 5 
minutes for questions.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it. 
Thanks for holding this hearing, and I want to thank the panel 
for their testimony as well.
    Mr. Hackbarth, the March 2013 MedPAC report included 
recommendations to permanently reauthorize integrated dual-
eligible Special Needs Plans which include the Fully Integrated 
Dual-Eligible Special Needs Plans and a second successful model 
for integration. In the second model, one managed-care 
organization administers a Medicaid plan and a dual-eligible 
Special Needs Plan. The same Dual-Eligible beneficiaries are 
enrolled in both plans, and integration occurs at the level of 
the managed-care organization across the two plans.
    Question. Why is it important that we retain this model in 
addition to the FIDE SNPs, and can you tell us about the 
benefits of this model and why MedPAC included a more broad 
definition of integration?
    Mr. Hackbarth. Well, the ultimate goal, as you say, is to 
get somebody to assume the responsibility for integrating 
Medicare and Medicaid both financially and clinically, and we 
allowed different paths to that because there are various types 
of issue that arise at the State level that may not make the 
fully integrated single plan model work in every State. Plans 
approached us and said that this dual plan model where the same 
beneficiary is both in the Medicare SNP and the Medicaid plan 
and they do the integration can work as well. In trying to be 
flexible, we wanted to accommodate that.
    Mr. Bilirakis. Thank you. Second question for you, sir. 
Does the current star rating system penalize Special Needs 
Plans by rating them against all Medicare Advantage plans 
rather than against the SNPs?
    Mr. Hackbarth. We have not looked specifically at that 
question. I would think the answer is probably not but again, 
we haven't studied that.
    Mr. Bilirakis. Would creating a more appropriate star 
rating system that is tailored to the specific population D-
SNPS be more representative of their quality performance and 
provide more accurate information to beneficiaries?
    Mr. Hackbarth. We can look at that. As I say, we haven't 
studied that.
    Mr. Bilirakis. When do you plan to?
    Mr. Hackbarth. We don't have any specific plans. I am 
saying we can take a look at that.
    Mr. Bilirakis. Can you please follow up with me on that?
    Mr. Hackbarth. Sure, I would be happy to do that.
    Mr. Bilirakis. I think that is very important. Thank you. I 
appreciate it very much.
    Thanks, Mr. Chairman. I yield back.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the gentleman from Virginia, Mr. Griffith, for a UC 
request.
    Mr. Griffith. Thank you, Mr. Chairman. I would ask for 
unanimous consent to submit a statement from the Federation of 
American Hospitals for their support of the rural extenders 
that I talked about.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. That concludes the questions of the members who 
are present. We will have some additional questions, the 
members will, and we will send those to you. We ask that you 
please respond promptly.
    It was a very important hearing today. Thank you for the 
testimony that you have given to the members.
    I remind members that they have 10 business days to submit 
questions for the record, and so they should submit their 
questions by the close of business on Friday, January 24th.
    The Chair thanks everyone for their attention, and without 
objection, the subcommittee is adjourned.

    [Whereupon, at 12:07 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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