[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]









        MEDICAID AT 50: STRENGTHENING AND SUSTAINING THE PROGRAM

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JULY 8, 2015

                               __________

                           Serial No. 114-63



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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  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
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California7
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            G.K. BUTTERFIELD, North Carolina
MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILLY LONG, Missouri                 JOSEPH P. KENNEDY, III, 
RENEE L. ELLMERS, North Carolina         Massachusetts
LARRY BUCSHON, Indiana               TONY CARDENAS, California
SUSAN W. BROOKS, Indiana             FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                             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. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     3
    Prepared statement...........................................     4
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     6
    Prepared statement...........................................     7
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, prepared statement....................    95

                               Witnesses

Vikki Wachino, Deputy Administrator and Director, Center for 
  Medicaid and CHIP Services, Centers for Medicare & Medicaid 
  Services.......................................................     8
    Prepared statement...........................................    11
    Answers to submitted questions \1\...........................   139
Carolyn L. Yocom, Director, Health Care, Government 
  Accountability Office..........................................    29
    Prepared statement...........................................    31
    Answers to submitted questions \2\...........................   140
Katherine M. Iritani, Director, Health Care, Government 
  Accountability Office \3\
    Answers to submitted questions \2\...........................   140
Anne L. Schwartz, Ph.D., Executive Director, Medicaid and CHIP 
  Payment and Access Commission..................................    49
    Prepared statement...........................................    51
    Answers to submitted questions...............................   145

                           Submitted Material

Chart, ``FY2014 Total Spending $3.5 Trillion,'' Congressional 
  Budget Office, submitted by Mr. Shimkus........................    74
Statement of 3M Company, July 8, 2015, submitted by Mr. Pitts....    96
Statement of the National Association of Chain Drug Stores, July 
  8, 2015, submitted by Mr. Pitts................................    99
Letter of July 7, 2015, from Stephen B. Calderwood, President, 
  Infectious Disease Society of America, to Mr. Pitts and Mr. 
  Green, submitted by Mr. Pitts..................................   103
Statement of the Office of Inspector General, Department of 
  Health and Human Services, July 8, 2015, submitted by Mr. Pitts   108
Article, ``Early Medicaid Expansion in Connecticut Stemmed The 
  Growth In Hospital Uncompensated Care,'' by Sayeh Nikpay, et 
  al., Health Affairs, July 2015, submitted by Mr. Pallone.......   116
Article, ``MetroHealth Care Plus: Effects Of A Prepared Safety 
  Net On Quality Of Care In A Medicaid Expansion Population,'' by 
  Randall D. Cebul, et al., Health Affairs, July 2015, submitted 
  by Mr. Pallone.................................................   127

----------
\1\ Ms. Wachino's response to submitted questions for the record has 
been retained in committee files and also is available at  http://
docs.house.gov/meetings/IF/IF14/20150708/103717/HHRG-114-IF14-Wstate-
WachinoV-20150708-SD002.pdf.
\2\ Ms. Yocom and Ms. Iritani provided a joint response to submitted 
questions for the record.
\3\ Ms. Iritani submitted a joint statement for the record with Ms. 
Yocom but did not submit an oral statement.
 
        MEDICAID AT 50: STRENGTHENING AND SUSTAINING THE PROGRAM

                              ----------                              


                        WEDNESDAY, JULY 8, 2015

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:14 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Guthrie, Barton, 
Whitfield, Shimkus, Murphy, Burgess, Blackburn, Lance, 
Griffith, Bilirakis, Long, Ellmers, Brooks, Collins, Green, 
Capps, Schakowsky, Butterfield, Castor, Sarbanes, Matsui, 
Lujan, Schrader, Kennedy, Cardenas, and Pallone (ex officio).
    Staff present: Graham Pittman, Legislative Clerk; David 
Redl, Chief Counsel, Communications and Technology; Michelle 
Rosenberg, GAO Detailee, Health; Krista Rosenthall, Counsel to 
Chairman Emeritus; Heidi Stirrup, Policy Coordinator, Health; 
Josh Trent, Professional Staff Member, Health; Traci Vitek, 
Detailee, Health; Christine Brennan, Democratic Press 
Secretary; Jeff Carroll, Democratic Staff Director; Tiffany 
Guarascio, Democratic Deputy Staff Director and Chief Health 
Advisor; Una Lee, Democratic Chief Oversight Counsel; Rachel 
Pryor, Democratic Health Policy Advisor; and Samantha Satchell, 
Democratic Policy Analyst.
    Mr. Pitts. Good morning, and welcome to this hearing, 
entitled Medicaid at 50: Strengthening and Sustaining the 
Program. Subcommittee will come to order. Chairman will 
recognize himself for an opening statement.

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

    At the end of this month, Medicaid will turn 50 years old. 
It was created as a joint Federal/State program to provide 
healthcare coverage to certain categories of low-income 
Americans. But today Medicaid is now the largest health 
insurance program in the world. Now more than 70 million 
Americans are covered by Medicaid, which is more than are 
covered by Medicare. No doubt Medicaid is a critical lifeline 
for some of our Nation's most vulnerable patients. Medicaid 
provides health care for children, pregnant mothers, the 
elderly, the blind, and the disabled. It is safe to say that 
every member of this committee wants to see a strong safety net 
program that protects the most vulnerable, regardless of how 
they feel about its recent expansion.
    But, as we all know, the current trajectory of Medicaid 
spending is problematic. In the next decade, program outlays 
are set to double. That means that, in a decade, Medicaid is 
going to cost Federal taxpayers what Medicare costs today. And 
that is not even counting the fact that the Medicaid program is 
already the fastest growing spending item in most State 
budgets. So, without Congressional intervention, Medicaid will 
continue to consume a larger and larger portion of Federal and 
State spending. This is not ideology. This is arithmetic. 
According to CBO data, by 2030, the entire Federal budget will 
be consumed with spending on mandatory entitlements and service 
on the debt.
    And this is not only a budgetary problem, though such 
levels of spending would crowd out funding for other important 
Federal and State policy priorities. This is also not only a 
fiscal problem, though CBO has warned that running up our 
national credit card could trigger financial crisis. Perhaps 
most importantly, this spending trajectory threatens the 
quality and access of care for the millions of vulnerable 
patients who depend on Medicaid.
    But reaching the breaking point is entirely preventable. 
Policymaking is about setting priorities and making choices, 
and that is why, and many of my colleagues were dismayed by 
some of what we learned at a recent Health Subcommittee hearing 
regarding some of the projects funded through waivers. With 
budgets growing, is it too radical to suggest we simply 
prioritize needed medical care over lower priority projects?
    Since 2003 Medicaid has been designated a high risk program 
by the GAO because of its size, growth, diversity programs, 
concerns about gaps, and fiscal oversight. More than a decade 
later, these issues are amplified by recent changes to the 
program. Our aging population will also increase demands on the 
program. But today Federal oversight of the program is more 
imperative than ever.
    Each administration has a responsibility, with Congress, to 
ensure that taxpayer dollars used for Medicaid are spent in a 
manner that helps our neediest citizens. Thus, I am pleased 
that we have a distinguished panel of witnesses today to help 
inform us on the challenges facing Medicaid in the coming 
decade. I am especially pleased that CMS, who was unable to 
attend--to join us for our recent hearing is here today, along 
with GAO and MACPAC.
    In order to preserve and strengthen this vital safety net 
program for the most vulnerable, I believe that Congress will 
be increasingly forced to take steps to modernize the Medicaid 
program. So we are eager to hear our witnesses' recommendations 
for ideas, and any efforts underway to enhance Medicaid program 
efficiency, reduce program costs, and improve quality.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    At the end of this month, Medicaid will turn 50 years old. 
It was created as a joint Federal/State program to provide 
healthcare coverage to certain categories of low-income 
Americans.
    But today, Medicaid is now the largest health insurance 
program in the world. Now more than 70 million Americans are 
covered by Medicaid--which is more than are covered by 
Medicare.
    No doubt, Medicaid is a critical lifeline for some of our 
Nation's most vulnerable patients. Medicaid provides health 
care for children, pregnant mothers, the elderly, the blind, 
and the disabled. It is safe to say that every member of this 
committee wants to see a strong safety net program that 
protects the most vulnerable--regardless of how they feel about 
its recent expansion.
    But as we all know, the current trajectory of Medicaid 
spending is problematic. In the next decade, program outlays 
are set to double. That means that in a decade, Medicaid is 
going to cost Federal taxpayers what Medicare costs today--and 
that's not even counting the fact that the Medicaid program is 
already the fastest growing spending item in most State 
budgets.
    So, without Congressional intervention, Medicaid will 
continue to consume a larger and larger portion of Federal and 
State spending. This is not ideology, this is arithmetic. 
According to CBO data, by 2030, the entire Federal budget will 
be consumed with spending on mandatory entitlements and service 
on the debt.
    This is not only a budgetary problem--though such levels of 
spending would crowd out funding for other important Federal 
and State policy priorities. This is also not only a fiscal 
problem--though CBO has warned that running up our national 
credit card could trigger another financial crisis. Perhaps 
most importantly, this spending trajectory threatens the 
quality and access of care for the millions of vulnerable 
patients who depend on Medicaid.
    But reaching the breaking point is entirely preventable. 
Policy-making is about setting priorities and making choices.
    That's why I and many of my colleagues were dismayed by 
some of what we learned at a recent Health Subcommittee hearing 
regarding some of the projects funded through waivers. With 
budgets growing, is it too radical to suggest we simply 
prioritize needed medical care, over lower-priority projects?
    Since 2003, Medicaid has been designated a high-risk 
program by the GAO because of its size, growth, diversity of 
programs, and concerns about gaps in fiscal oversight. More 
than a decade later, these issues are amplified by recent 
changes to the program. Our aging population will also increase 
demands on the program.
    But today, Federal oversight of the program is more 
imperative than ever. Each administration has a responsibility, 
with Congress, to ensure that taxpayer dollars used for 
Medicaid are spent in a manner that helps our neediest 
citizens.
    Thus, I am pleased that we have a distinguished panel of 
witnesses today to help inform us on the challenges facing 
Medicaid in the coming decade. I am especially pleased that 
CMS, who was unable to join us for our recent hearing, is here 
today, along with GAO and MACPAC.
    In order to preserve and strengthen this vital safety net 
program for the most vulnerable, I believe that Congress will 
be increasingly forced to take steps to modernize the Medicaid 
program. So we are eager to hear our witnesses' recommendations 
for ideas and any efforts underway to enhance Medicaid program 
efficiency, reduce program costs, and improve quality.

    Mr. Pitts. And, with that, I yield back and recognize the 
ranking member, Mr. Green, 5 minutes for his opening statement.

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

    Mr. Green. Thank you, Mr. Chairman, for holding the 
hearings, and I too want to welcome our panel. It is not very 
often that we get an all-female panel. I appreciate you all 
being here.
    The Medicaid program has served as a critical safety net 
for the American public since its creation in 1965, 50 years 
ago this month. Today, over 70 million low-income Americans 
rely on Medicaid for comprehensive and affordable health 
insurance. It is a lifeline for millions of children, pregnant 
women, people with disabilities, seniors, and low-income 
adults. Medicaid covers more than one in three children, pays 
for nearly half of all births, accounts for more than 40 
percent of the Nation's total costs for long-term care. One in 
seven Medicare beneficiaries are also Medicaid beneficiaries. 
The Medicaid accounts for a quarter of behavioral healthcare 
services.
    The Affordable Care Act expanded coverage, made 
improvements to promote program integrity, transparency, and 
advanced delivery system reform. Since the enactment of the 
Affordable Care Act, the overall rate of healthcare spending 
growth has slowed, reducing projected growth in Medicaid 
programs by hundreds of billions of dollars, according to the 
Congressional Budget Office. This is primarily due to lower 
than expected growth in costs per Medicaid enrollee.
    The need to address the growth of healthcare spending is an 
issue, we all agree. We must remain committed to building on 
the progress made by the ACA in ensuring patients have access 
to quality, affordable care, and that we are getting the best 
value for our healthcare dollars. Medicaid is an extremely 
efficient program, covering the average enrollee at a lower 
cost than most comprehensive benefits, and significantly lower 
cost sharing then private insurance. 95 percent of Medicaid 
beneficiaries report having a regular source of health care, a 
medical home in today's terms, which they consistently rate as 
highly as private insurance.
    As we examine ways to further strengthen and improve the 
program, we need to advance policies that better leverage 
dollars to pay for value, promote efficiency and transparency, 
and advance delivery system reforms, and extend innovative 
strategies within Medicaid, and across the healthcare system. 
For example, one improvement would be for the Centers of 
Medicaid and--Medicare and Medicaid Services to finalize the 
agency's proposed regulation that would better enforce the 
Medicaid's equal access provision. This provision ensures that 
care and services are available to Medicaid enrollees, and that 
providers are paid a fair Medicaid reimbursement rate.
    Another one would be the require 12 month continuous 
enrollment--eligible Medicaid and CHIP beneficiaries to address 
the issue of the churn, a concept that MACPAC has supported in 
several reports to Congress. Churn is bad for patients, 
providers, and health plans, and wastes taxpayers' dollars. I 
worked with my colleague Joe Barton for several Congresses on 
this legislation--on this issue, and I thank him for his 
leadership, on behalf of low-income Americans.
    Today we look at a broad--look at the Medicaid system, the 
past, present, and future. Throughout its 50 year history, 
Medicaid has served as an adaptable, efficient program that 
meets the healthcare needs of millions of Americans. I want to 
thank our witnesses again for their ongoing efforts and 
recommendations for additional ways to advance the program. I 
look forward to working with my colleagues on the committee to 
strengthen the program in key areas, including the enrollment 
process, delivery system reforms, managed care, data 
collection, and behavioral health.
    [The prepared statement of Mr. Green follows:]

                 Prepared statement of Hon. Gene Green

    Thank you, Mr. Chairman, for holding this hearing.
    The Medicaid program has served as a critical safety net 
for the American public since its creation in 1965, 50 years 
ago this month.
    Today, over 70 million low-income Americans rely on 
Medicaid for comprehensive, affordable health insurance.
    It is a lifeline for millions of children, pregnant women, 
people with disabilities, seniors, and low-income adults.
    Medicaid covers more than 1 in 3 children, pays for nearly 
half of all births, and accounts for more than 40 percent of 
the Nation's total costs for long-term care.
    One in seven Medicare beneficiaries is also a Medicaid 
beneficiary, and Medicaid accounts for a quarter of all 
behavioral health services.
    The Affordable Care Act expanded coverage, made 
improvements to promote program integrity and transparency, and 
advanced delivery system reform.
    Since the enactment of the Affordable Care Act, the overall 
rate of healthcare spending growth has slowed, reducing 
projected growth in the Medicaid programs by hundreds of 
billions of dollars according to the Congressional Budget 
Office.
    This is primarily due to lower than expected growth in 
costs per Medicaid enrollee.
    The need to address the growth of healthcare spending is an 
issue on which we all agree.
    We must remain committed to building on the progress made 
by the ACA, ensuring patients have access to quality, 
affordable care, and that we are getting the best value for our 
healthcare dollars.
    Medicaid is an extremely efficient program, covering the 
average enrollee at a lower cost with more comprehensive 
benefits and significantly lower cost-sharing than private 
insurance.
    Ninety-five percent of Medicaid beneficiaries report having 
a regular source of health care, which they consistently rate 
as highly as private insurance.
    As we examine ways to further strength and improve the 
program, we need to advance policies that better leverage 
dollars to pay for value, promote efficacy and transparency, 
advance delivery system reforms, and extend innovative 
strategies within Medicaid and across the healthcare system.
    For example, one improvement would be for the Centers for 
Medicare and Medicaid Services (CMS) to finalize the agency's 
proposed regulation that would better enforce the Medicaid's 
equal access provision.
    This provision ensures that care and services are available 
to Medicaid enrollees, and that providers are paid a fair 
Medicaid reimbursement rate.
    Another would be to require 12-month continuous enrollment 
for eligible Medicaid and CHIP beneficiaries to address the 
issue of ``churn,'' a concept MACPAC has supported in several 
reports to Congress.
    Churn is bad for patients, providers, and health plans, and 
wastes taxpayer dollars.
    I have worked with my colleague, Joe Barton, for several 
Congresses on legislation on this issue, and I thank him for 
his leadership on behalf of low-income Americans.
    Today, we will take a broad look at the Medicaid system: 
its past, present, and future.
    Throughout its 50-year history, Medicaid has served as an 
adaptable, efficient program that meets the healthcare needs of 
millions of Americans.
    I want to thank our witnesses for their on-going efforts 
and recommendations for additional ways to advance of the 
program.
    I look forward to working with my colleagues on the 
committee to strengthen the program in key areas, including the 
enrollment process, delivery system reforms and managed care, 
data collection, and behavioral health.
    Thank you, and I yield the balance of my time to my 
colleague from California, Congresswoman Matsui.

    Mr. Green. With that, Mr. Chairman, I would like to yield 
the balance of my time to my colleague from California, 
Congresswoman Matsui.
    Ms. Matsui. Thank you very much for yielding to me, and I 
would like to welcome our witnesses here today also. This year, 
as we know, we celebrate the 50th anniversary of both the 
Medicare and Medicaid programs, essential programs for the 
security of our Nation's seniors, people with disabilities, 
children, and families. The Affordable Care Act took vital 
steps to reforming our healthcare system by increasing coverage 
and moving toward rewarding value, instead of volume. We know 
the ACA made improvements in the private insurance market, and 
it also made improvements for public programs like Medicaid. 
Now is the time that we need to build upon those improvements, 
and keep the momentum going for our healthcare system, and for 
the millions that rely on Medicaid as an important safety net.
    Thank you, and I look forward to hearing from our witnesses 
today, and I yield time to whoever needs it.
    Mr. Green. Anyone else want 40 seconds, or--I yield back.
    Mr. Pitts. The gentleman yields back, and now the Chair 
recognizes the ranking member of the full committee, 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, Mr. Chairman. I just want to say, 
obviously, this is a very important topic. Medicaid's 50 years 
of efficient, comprehensive, and sometimes life-saving health 
coverage of our most vulnerable populations is certainly 
something that is crucial. A fiber, you know, basic fabric of 
our healthcare system.
    As Members of Congress, I believe the Government can help 
all Americans succeed, including seniors and low-income 
families, and improving and strengthening Medicaid for 
generations to come continues to be a primary goal. Medicaid 
provides more than one in three children with a chance at a 
healthy start in life, and one in seven Medicare seniors are 
also actually Medicaid seniors. In fact, the overwhelming 
majority of the 71 million current Medicaid beneficiaries are 
children, the elderly, the disabled, and pregnant women.
    We often talk about Medicaid as an entitlement program, 
though I don't believe this is true--a true reflection of the 
program. Medicaid is a bedrock safety net that ensures all 
Americans have protection against the negative economic effects 
that undisputedly come with lack of health coverage. Medicaid's 
inherent structure was designed to ensure that health coverage 
will be there for those who need it, when times are hard, jobs 
are lost, or accidents strike. And the fundamental tenet of the 
program is that it can expand and contract according to need. 
In fact, Medicaid was first proposed as part of a set of 
economic policies by President Truman.
    And the Affordable Care Act built on these same goals by 
strengthening Medicaid and expanding its coverage, and States 
that have expanded Medicaid have already realized significant 
qualitative and economic benefits as uncompensated care rates 
drop, and more people gain coverage. Meanwhile, Medicaid 
coverage lowers financial barriers to healthcare access, 
increases use of preventative care, and improves health 
outcomes. In addition, States have been successful in managing 
their Medicaid programs through broad latitude and flexibility 
to ensure access to critical healthcare services for their 
populations at low cost.
    No program is perfect. For instance, I believe that we need 
to remain vigilant on access to specialty and dental care, and 
we continue to refine transparency and evaluation of Medicaid 
waivers, and ensure that Medicaid is successfully integrated 
with Medicare in the health insurance marketplaces. We should 
think more about how to advance some of the innovations in 
delivery systems reform. The Medicaid program has some of our 
best successes, with some of the toughest to treat populations.
    Mr. Chairman, I hope to hear--to not hear more today of the 
same assaults on the Affordable Care Act or Medicaid. 
Inaccurate and ideological representation of what Medicaid is 
and who it serves I think are outdated. Instead, I believe that 
there are many policy areas in Medicaid where members on both 
the Democrat and Republican sides could share an interest, and 
I look forward to learning about ways that Congress can help to 
build on an already strong Medicaid program, refining and 
modernizing this critical safety net for the next 50 years and 
beyond.
    [The prepared statement of Mr. Pallone follows:]

             Prepared statement of Hon. Frank Pallone, Jr.

    Thank you, Mr. Chairman, for convening a hearing on this 
timely and important topic--Medicaid's 50 years of efficient, 
comprehensive, and sometimes lifesaving, health coverage of our 
most vulnerable populations. As a Member of Congress, I believe 
that Government can help all Americans succeed, including 
seniors and low-income families, and improving and 
strengthening Medicaid for generations to come continues to be 
a primary goal of mine.
    Medicaid provides more than 1 in 3 children with a chance 
at a healthy start in life. And 1 in 7 Medicare seniors are 
actually also Medicaid seniors. In fact, the overwhelming 
majority of the 71 million current Medicaid beneficiaries are 
children, the elderly, the disabled and pregnant women.
    We often talk about Medicaid as an entitlement program. 
Though I don't believe this is a true reflection of the 
program. Medicaid is a bedrock safety net that ensures all 
Americans have protection against the negative economic effects 
that undisputedly come with lack of health coverage. Medicaid's 
inherent structure was designed to ensure that health coverage 
will be there for those who need it when times are hard, jobs 
are lost, or accident strikes. The fundamental tenet of the 
program is that it can expand and contract according to need. 
In fact, Medicaid was first proposed as part of a set of 
economic policies by President Truman.
    And the Affordable Care Act built on those same goals, by 
strengthening Medicaid and expanding its coverage. States that 
have expanded Medicaid have already realized significant 
qualitative and economic benefits as uncompensated care rates 
drop and more people gain coverage. Meanwhile, Medicaid 
coverage lowers financial barriers to healthcare access, 
increases use of preventative care, and improves health 
outcomes.
    In addition, States have been successful in managing their 
Medicaid programs through broad latitude and flexibility to 
ensure access to critical healthcare services for their own 
populations at low costs.
    No program is perfect; For instance, I believe that we need 
to remain vigilant on access to specialty and dental care, 
continue to refine transparency and evaluation of Medicaid 
waivers, and ensure that Medicaid is successfully integrated 
with Medicare and the health insurance marketplaces. We should 
think more about how to advance some of the innovations in 
delivery system reform-the Medicaid program has some of our 
best successes, with some of the toughest-to-treat populations.
    Mr. Chairman, I hope to not hear more of the same assaults 
on the Affordable Care Act or Medicaid today. Inaccurate and 
ideological representations of what Medicaid is and who it 
serves are tired and outdated. Instead, I believe that there 
are many policy areas in Medicaid where members on both sides 
could share an interest. I look forward to learning about ways 
that Congress can help to build on an already strong Medicaid 
program, refining and modernizing this critical safety net for 
the next 50 years and beyond.

    Mr. Pallone. I would like to yield the 2 minutes--or the 
remainder of my time to Mr. Lujan.
    Mr. Lujan. Thank you very much, Mr. Chairman and Ranking 
Member Pallone, for scheduling this hearing. And I am glad that 
we are here, coming together to reflect on the success of this 
program as we celebrate its 50th anniversary.
    Medicaid is a critical program across the Nation, and 
especially in my home State of New Mexico, where we have had a 
53 percent increase in enrollment since we expanded Medicaid. 
This represents 240,000 additional people who have gained 
coverage as a result of the Affordable Care Act's Medicaid 
expansion in New Mexico. Behind each of these statistics are 
real stories of New Mexicans whose lives have improved because 
of Medicaid. I believe deeply in Medicaid's mission of 
improving access to health care, better health outcomes, 
greater financial security, and that we have a responsibility 
to ensure that our constituents are not only covered, but also 
receive quality care.
    I look forward to the testimony and discussion about how we 
can continue to enhance this program for the next 50 years and 
beyond, and I also have some very serious specific questions 
about New Mexico's behavioral health program, and I look 
forward to exploring those as well. So, Mr. Chairman, Ranking 
Member Pallone, I thank you for the time, and I yield back.
    Mr. Pitts. Chair thanks the gentleman. As usual, all the 
members' written opening statements will be made part of the 
record. I have a UC request and would like to submit the 
following documents for the record: statements from 3M, the 
National Association of Chain Drugstores, the Infectious 
Disease Society of America, and U.S. Department of Health and 
Human Services Office of Inspector General, HHS/OIG. Without 
objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. We have one panel today, and let me introduce 
them in the order of their presentations. First, Vikki Wachino, 
Deputy Administrator, Centers for Medicare and Medicaid 
Services, CMS, and Director of the Center for Medicaid and CHIP 
services, CMS. Then Carolyn Yocom, Director, Health Care, 
Government Accountability Office, accompanied by Katherine 
Iritani, Director of Health Care, GAO. And finally, Anne 
Schwartz, Executive Director, Medicaid and CHIP Payment and 
Access Commission, MACPAC.
    So thank you all for coming. Your written testimony will be 
made part of the record, and you will each be given 5 minutes 
to summarize your testimony. So, at this point, Ms. Wachino, 
you are recognized for 5 minutes for your summary.

STATEMENTS OF VIKKI WACHINO, DEPUTY ADMINISTRATOR AND DIRECTOR, 
 CENTER FOR MEDICAID AND CHIP SERVICES, CENTERS FOR MEDICARE & 
  MEDICAID SERVICES; CAROLYN L. YOCOM, DIRECTOR, HEALTH CARE, 
  GOVERNMENT ACCOUNTABILITY OFFICE, ACCOMPANIED BY KATHERINE 
   IRITANI, DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY 
OFFICE; AND ANNE SCHWARTZ, PH.D., EXECUTIVE DIRECTOR, MEDICAID 
             AND CHIP PAYMENT AND ACCESS COMMISSION

                   STATEMENT OF VIKKI WACHINO

    Ms. Wachino. Chairman Pitts, thank you. Ranking Member 
Green, thank you. Thank you, members of the subcommittee. I am 
happy to be with you here today to talk about the importance of 
the Medicaid program, and its success in meeting the needs of 
the low-income population over the past 50 years. Pleased to be 
joined here today by my colleagues from MACPAC and GAO, whose 
work helps us to continue to strengthen the program for the 
future.
    I am Vikki Wachino, and I will introduce myself, building 
on the chairman's introduction, as Deputy Administrator and 
Director of the Center for Medicaid and CHIP Services. Since it 
is my first appearance here before the subcommittee, I have 
served in this role since April, and really look forward to 
working with the subcommittee going forward to make the program 
as strong as possible.
    As you well know, Medicaid provides health insurance 
coverage to more than 70 million low-income Americans, and the 
beneficiaries we serve are children, low-income adults, people 
with disabilities, seniors, and pregnant women, some of 
America's most vulnerable populations. We work in partnership 
with States, and, as a partnership, both we and States have 
vital roles as program stewards in ensuring the program's 
future. Within Medicaid's structure, Medicaid provides vital 
financial support, and also significant flexibility within 
program rules that help us and States continue to improve and 
innovate in the program for the future.
    The impact and success of Medicaid coverage is clear from 
the research. Just last month researchers at the Commonwealth 
Fund found that adults covered by Medicaid coverage 
continuously for a year have very high rates of obtaining 
regular sources of care. We also know, from research released 
earlier this year, that children who are covered by Medicaid or 
CHIP earn higher wages when they grow into adults, and those 
examples make both the health and the economic impact of 
Medicaid coverage clear.
    There is a lot more we can do, though, and are doing, in 
our work with States to strengthen the program for its next 50 
years and beyond. As many of you have noted, the Affordable 
Care Act gives States the opportunity to provide Medicaid 
coverage to low-income adults in their States, at their option, 
and supported by a substantially enhanced Federal matching 
rate. 28 States and the District of Columbia have worked with 
us to provide Medicaid coverage to these low-income adults, and 
the benefits of that expansion are clear. And we are prepared 
at CMS to work with every State to develop an approach to 
expansion that works for the State, meets its specific needs, 
and meets the needs of its low-income residents as we work 
together to close the coverage gap and insure more low-income 
Americans.
    The need for modernization in our eligibility enrollment 
process was clear to us several years ago, and we have 
modernized it. We have made it substantially easier for people 
to apply using a single streamlined application, the same 
application that people applying for marketplace coverage use, 
and we have supported that with electronic verification. And as 
a result, States are able to make eligibility decisions that 
are fast, and accurate, and in close to real time.
    Another major area of our focus is delivery system reform, 
and working with States to promote innovations that achieve 
better health, and better care, at lower cost. We carry that 
work out through a variety of mechanisms. Whether it is major 
delivery system reform initiatives, like Strong Start that is 
aimed at improving prenatal and maternal health, new 
authorities, like Health Homes for people with chronic 
conditions, new models, like the State innovation models that 
help States undertake multi-payer delivery system reforms, or 
pioneering delivery system reforms through our 1115 
innovations. In addition to that, a year ago, at the 
recommendation of the Governors, we launched the Innovation 
Accelerator Program, which is designed to continue to advance 
in as many States as care to work with us, payment and delivery 
system reform.
    As has been referenced, we have proposed major advances in 
managed care. Medicaid is no longer a fee-for-service delivery 
system. Managed care is the delivery system that provides care 
to the majority of our beneficiaries, and we want to maximize 
its potential to ensure coordination and quality of care. Our 
regulations had not been updated in more than a decade, and in 
May we proposed to update them to strengthen quality, 
accountability, transparency, the beneficiary experience, and 
also to align our roles with those that work in Medicare 
Advantage and in the private market, and that rule is out for 
public comment now.
    We have been substantially advancing the ability of fragile 
seniors and people with disabilities to live in their 
communities and to self-direct their care. And underpinning all 
of these improvements are a commitment to program integrity 
that we have advanced over the past 5 years, and that span a 
range of mechanisms from reviewing States' program integrity 
programs to ensure that they are strong, to ensuring that 
States, and we, dedicate our resources and coordinate our 
resources to screen out high risk providers.
    With that I will conclude, and again thank the subcommittee 
for your interest in the Medicaid program, and to state once 
again how much I am looking forward to working with each of 
you.
    [The prepared statement of Ms. Wachino follows:]
    
    
    
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    Mr. Pitts. The Chair thanks the gentlelady. I now recognize 
Ms. Yocom, 5 minutes for your opening statement.

                 STATEMENT OF CAROLYN L. YOCOM

    Ms. Yocom. Chairman Pitts, Ranking Member Green, and 
members of the subcommittee, I am pleased to be here today with 
my colleague, Katherine Iritani, to discuss the key issues that 
are facing the Medicaid program. Today Medicaid is undergoing a 
period of transformative change as enrollment grows following 
the passage of the Patient Protection and Affordable Care Act. 
Under this Act, more than half of the States have elected to 
expand their Medicaid programs and cover low-income adults who 
were not previously eligible for the program.
    At the heart of Medicaid is a Federal/State partnership. 
Both the Federal Government and the States play important roles 
in ensuring that Medicaid is fiscally responsible and 
sustainable over time, and effective in meeting the needs of 
its population that it serves. We designated Medicaid as a 
high-risk program in 2003, and our statement highlights some of 
the significant oversight challenges that, based on our work, 
exist today.
    Our statement highlights four key issues: First, access to 
care; second, transparency and oversight; third, program 
integrity; and fourth, Federal financing. Congress and HHS have 
taken some positive steps related to these four key issues, and 
continued attention is critical to ensure that the Medicaid 
program is effective for the enrollees who rely on it, and also 
accountable to the taxpayers who pay for it. Accordingly, our 
work recommends additional steps to bolster efforts in each of 
these areas.
    First, maintaining and improving access to care is critical 
to ensuring that Medicaid operates effectively. Our analysis of 
national survey data suggests that access to care in Medicaid 
is generally comparable to that of individuals with private 
insurance. However, our work also shows that Medicaid enrollees 
can face particular challenges accessing certain types of care, 
such as mental health and dental care.
    Second, increased transparency and improved oversight can 
help improve the Medicaid program. For example, CMS lacks 
complete and reliable data about the sources of funds that 
States use to finance the non-Federal share of Medicaid, and it 
also lacks complete data on payments to providers, which 
hinders oversight. Gaps in HHS' criteria, process, and policy 
for improving State spending on demonstration projects also 
raises added questions about tens of billions of dollars in 
Federal spending.
    Third, improving program integrity can help ensure the most 
appropriate use of Medicaid funds. Improper payments are a 
significant cost to Medicaid, totaling an estimated 17.5 
billion in fiscal year 2014. Our work suggests that an 
effective Federal/State partnership is a key factor in improper 
payments and combating them, not only to oversee spending in 
both fee-for-service and managed care, but also to set 
appropriate payment rates for managed care organizations, and 
ensure that only eligible individuals and providers participate 
in Medicaid.
    Fourth, since its inception, efforts to finance the 
Medicaid program have been in odds with the cyclical nature of 
its design and operation, particularly during national economic 
downturns. We suggested that Congress consider enacting a 
Federal funding formula that would provide automatic, targeted, 
and timely assistance to States during national economic 
downturns. We have also described revisions to the current 
Federal funding formula that could more equitably allocate 
Medicaid funds to States by better accounting for each State's 
ability to finance the program.
    In conclusion, continued focus on these challenges is 
critical to ensuring that continued access to care for the tens 
of millions of Americans who are in the Medicaid program. It is 
also critical to ensuring the sustainability. Chairman Pitts, 
Ranking Member Green, and members of the subcommittee, this 
concludes our prepared statement. We would be pleased to 
respond to any questions you might have.
    [The prepared statement of Ms. Yocom follows:]
    
    
    
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    Mr. Pitts. The Chair thanks the gentlelady. And, again, as 
noted, Ms. Yocom's accompanied by Ms. Iritani, who testified 
before us a couple of weeks ago. She is back to help answer 
questions for GAO.
    The Chair now recognizes Dr. Schwartz, 5 minutes for an 
opening statement.

                 STATEMENT OF ANNE L. SCHWARTZ

    Dr. Schwartz. Good morning, Chairman Pitts, Ranking Member 
Green, and members of the Subcommittee on Health. I am Anne 
Schwartz, Executive Director of MACPAC, the Medicaid and CHIP 
Payment and Access Commission. As you know, MACPAC is a 
Congressional advisory body charged with analyzing and 
reviewing Medicaid and CHIP policies, and making 
recommendations to Congress, the Secretary of HHS, and the 
States on issues affecting these programs. Its 17 members, led 
by Chair Diane Rowland and Vice Chair Marsha Gold, are 
appointed by GAO. The insights I will share this morning 
reflect the consensus views of the Commission itself, and we 
appreciate the opportunity to share MACPAC's views as this 
committee considers the future of Medicaid.
    As others have already noted, Medicaid is a major and 
important part of the U.S. healthcare system, covering 72 
million people, and almost half of the Nation's births. It pays 
for more than 60 percent of national spending on long-term 
services and supports to frail elders and other people with 
disabilities, and it accounts for more than a quarter of 
spending on treatment for mental health and substance use 
disorders. In total, it accounts for about 15 percent of 
national health expenditures, 8.6 percent of Federal outlays, 
and 15.1 percent of State spending.
    While we often compare Medicaid's performance as a payer 
with other sources of coverage, it is important to recognize 
Medicaid's unique roles. In addition to providing health 
insurance to individuals who otherwise might not have access to 
coverage, it is also a major source of revenue for safety net 
providers serving both Medicaid beneficiaries and the 
uninsured. It covers enabling services, such as nonemergency 
transportation and translation services, which help 
beneficiaries access needed health services, and it wraps 
around other sources of coverage, including both employer 
sponsored insurance and Medicare, in its role for 10.7 million 
dually eligible beneficiaries.
    Since the early 1990s the Medicaid program has changed in 
significant ways. During this time period the country weathered 
two economic recessions, and States responded to budgetary 
pressures by undertaking modernization efforts and cost 
containment strategies. As a result, as has been noted, managed 
care has now become the dominant delivery system, with more 
than half of all beneficiaries enrolled in comprehensive risk-
based managed care arrangements, and another 20 percent 
receiving benefits through a more limited managed care 
arrangement.
    The Olmstead Decision, requiring that people with 
disabilities be served in the least restrictive environment, 
resulted in a major shift in the provision of long-term 
services and supports from nursing facilities to home and 
community-based settings. Congressional action in the 1990s 
brought in children's coverage through Medicaid and CHIP, and 
encouraged States to reach out to people who are eligible, but 
not enrolled in coverage. And, of course, more recently the 
Affordable Care Act created new dynamics not just by allowing 
States to expand coverage to certain nondisabled adults, but 
also by providing new options to States for the delivery of 
home and community-based services, and by changing eligibility 
processes to allow for one-stop shopping for individuals 
seeking healthcare coverage.
    The 20 years ahead are likely to be similarly dynamic as 
States experiment with different approaches to delivery system 
reform and payment, and seek to provide care more efficiently 
and effectively to high cost, high need individuals. Pressure 
on Federal and State budgets create challenges to ensuring the 
sustainability of the program, as well as to ensuring that 
beneficiaries have access to high value services that promote 
their health and their ability to function in their 
communities.
    MACPAC's analytic agenda for the year ahead reflects 
several of these challenges. We will extend the work published 
in our recent June report on Medicaid's role for people with 
behavioral health disorders, focusing on how to improve 
delivery of care. We will continue to focus on understanding 
the impact of value-based purchasing initiatives, and the 
extent to which these bend the cost curve and improve health.
    In the area of access, we will be determining how to 
effectively measure access and looking closely at the extent to 
which different groups of Medicaid beneficiaries are at risk of 
access barriers, and the extent to which such barriers can be 
addressed through Medicaid policy. Our analyses on the impact 
of the ACA will include, at the request of Congress, a study to 
model the impact of DSH payment cuts, and we will also consider 
how different approaches to Medicaid expansion affect 
expenditures and use of services. At the request of members of 
this committee and others in Congress, we will analyze spending 
trends and evaluate policy options to restructure the program's 
financing, and we will be moving ahead to the next chapter of 
our work on children's coverage, looking ahead before CHIP 
funding expires in fiscal year 2017.
    Finally, we will continue to highlight the importance of 
having timely and complete data for both policy analysis and 
program accountability. MACPAC has also expressed concerns 
about administrative capacity constraints that affect the 
ability of both Federal and State administrators to meet 
program requirements, provide oversight, and promote value to 
beneficiaries, and to the taxpayer.
    Again, thank you for this opportunity to share the 
Commission's work with the subcommittee, and I am happy to 
answer any questions.
    [The prepared statement of Ms. Schwartz follows:]
    
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    Mr. Pitts. The Chair thanks the gentlelady. That concludes 
the opening statements. We will begin questioning, and I will 
recognize myself for 5 minutes for that purpose.
    Ms. Wachino, the part of the Federal statute on the 1115 
waivers is very short, just four pages. So the Secretary of HHS 
has tremendous latitude under the law to fund some 
demonstration projects, while denying others. It is well known 
that some States get CMS approval for a specific proposal, 
while CMS will deny another State for a very similar proposal. 
My first question is, Are there any statutory criteria 
requiring consistency related to the Secretary's review and 
approval of demonstration projects?
    Ms. Wachino. Chairman, thank you for the question. CMS 
works with all States in the 1115 process, and outside of it, 
to develop approaches that meet the objectives of the Medicaid 
program, and take into account State-specific needs in 
surveying and meeting the needs of their low-income population. 
We approach that process consistently across States, and we 
work with each State to identify the extent to which their 
proposal meets the objectives of the program, and improves the 
health of lower/low-income residents.
    We have been very transparent in our decision-making on 
1115s. We issued transparency regulations implementing 
provisions to the Affordable Care Act several years ago, and 
have been posting all of our approval documents on medicaid.gov 
for States to see, and we welcome proposals from additional 
States, and will consider them on their merits.
    Mr. Pitts. The question was, are there any statutory 
criteria requiring consistency?
    Ms. Wachino. The statutory criterion is that a proposal 
meet the objectives of the Medicaid program.
    Mr. Pitts. Does CMS have regulations or guidance to ensure 
that it is being consistent and equitable?
    Ms. Wachino. We have guidance implementing our transparency 
requirements. Those were regulations that were implemented in 
2012. We identified, subsequent to the GAO report, broad 
criteria that we used in considering every State's waiver to 
determine whether it meets the objectives of the Medicaid 
program, and those were criteria like expanding access to 
coverage, strengthening delivery systems. So, yes, we have 
developed a set of principles by which we review 1115 
demonstrations.
    It is also important to us, though, to be able to take into 
account State-specific circumstances. States come to us with a 
wide array of proposals, and if you look across waivers you 
will see that they serve purposes as diverse as expanding 
eligibility to new populations, to providing limited benefits, 
like prescription drugs, to reforming State delivery systems.
    Mr. Pitts. Dr. Schwartz, in April several chairmen of the 
committees of jurisdiction sent you a letter requesting that 
MACPAC undertake serious and sustained analytical work to 
advise Congress about potential policies and needed financing 
reforms and incentives to ensure the sustainability of 
Medicaid. Can you please explain to the committee, in specific 
detail, how you are responding to that request, and when you--
we can expect to start seeing the results of your work?
    Dr. Schwartz. Yes. Since the Commission received the letter 
in April, we have had one public meeting in May. At that May 
meeting we presented analyses that were already underway on 
Federal and State spending trends that we are currently turning 
into a publication that should be out later this summer.
    We are now currently determining our next agenda for the 
next report cycle, bringing to fruition work on understanding 
innovative approaches that States are taking to build more 
sustainable programs. For example, the use of accountable care 
organization, bundled payments, patient-centered medical homes, 
managed long-term services and supports, and trying to look at 
these designs and see what the potential is for savings in both 
the short and the long term.
    Specifically to the items mentioned in your letter, we do 
have analyses underway to review the past work of blue ribbon 
commissions and think tanks so as not to reinvent the wheel, 
and we will use those to inform our analyses of technical and 
design issues associated with some of those proposals, as well 
as more recent approaches that have been put forward by members 
of this committee and others.
    So the letter speaks to a sustained work plan, and you can 
expect to see some of this work coming together over the course 
of the fall to inform our March and June reports, and follow-
ons after that.
    Mr. Pitts. Thank you. Ms. Wachino, has CMS determined an 
eligibility error rate for the Obamacare expansion population, 
and how does the error rate vary for those determined Medicaid 
eligible through the Federally facilitated marketplace versus 
those whom States determine eligibility?
    Ms. Wachino. Mr. Chairman, within CMS there are other parts 
of the organization that have responsibility for the error rate 
measurement. I can say that I know that we have piloted 
approaches to measuring eligibility errors with States in order 
to ensure that we are measuring eligibility effectively as we 
move to the new rules under the ACA, and we would be happy to 
get back to you with a report out for the record on what we 
know from those pilots so far.
    Mr. Pitts. Thank you. My time is expired. The Chair 
recognizes the ranking member, Mr. Green, 5 minutes for 
questions.
    Mr. Green. Thank you, Mr. Chairman. This year marks the 
50th anniversary of Medicaid. It is a vital program that is 
served as a lifeline for millions of Americans that--when they 
need it the most. It is important to recognize the successes 
that it made, innovations that are working well, and 
improvements that could be implemented. We have seen some 
outstanding success ensuring the overwhelming majority of 
Medicaid beneficiaries have access to primary care. More than 
95 percent of the Medicaid beneficiaries not only have access 
to primary care, but are satisfied with that care.
    The committee has made substantial investments in the 
Community Health Center Program, particularly when it comes to 
grant funding intended to cover the uninsured. One aspect that 
is not talked about as frequently is that of the unique role 
and intertwined nature of community health centers and 
Medicaid.
    Ms. Wachino, could CMS comment on the role that community 
health centers, and--a crucial source of primary care have 
played to bring along--about the level of success of Medicaid 
beneficiaries?
    Ms. Wachino. Thank you for the question. Community centers 
play a really vital role in serving our populations and meeting 
the needs of a diverse range of Americans, particularly focused 
on primary care. Community health centers are playing a growing 
role in meeting low-income Americans' oral healthcare needs, 
which are important to us, and we continue to work with them to 
make their payment systems as strong as possible.
    Mr. Green. OK. Thank you. And I know we still have work to 
do on--to ensure equal access to dental and specialty care. In 
particular, access to behavioral health providers is an issue 
this committee has considered, and all three of our witnesses 
know well.
    Ms. Wachino, CMS is working hard with States to promote 
innovative care delivery, integrating physical and mental 
health, or promoting oral health, as part of the comprehensive 
primary care. Can you provide the committee with a few examples 
of how CMS work on Medicaid delivery system reform is helping 
to promote access to these specialty providers?
    Ms. Wachino. Sure, I would be happy to, thank you. Through 
our Innovation Accelerator Program, which, as I mentioned 
earlier, is our new delivery system reform initiative aimed at 
providing program support to States that would like to improve 
their payment and delivery system, we identified four areas 
that were established with the input of States and stakeholders 
that were priorities of our program, substance use disorder, 
physical and behavioral health integration, community 
integration, moving away from institutional care to community 
care, and meeting the needs of complex, high cost 
beneficiaries.
    The first two I think, Ranking Member Green, are responsive 
to your question. And the area in which we have done the most 
work so far in this new program is substance use disorder, and 
we are working actively right now with seven States to help 
expand the range of providers who can provide substance use 
disorder supports, and we expect to bring a similar approach to 
physical and behavioral health to really help ensure that there 
is access to community-based mental health services for the 
people who need it.
    Mr. Green. OK. I was impressed to see provisions on 
adequate--or quality and actuarial soundness and network 
adequacy in the new Medicaid managed care regulation. Can you 
describe how, if CMS' proposed managed care regulation would be 
implemented, access to quality care would improve beneficiaries 
in the managed care?
    Ms. Wachino. Sure. I will highlight a couple of examples of 
how our new proposed rule could improve quality and actuarial 
soundness and access for our populations. With regard to 
quality, there are a number of provisions. I think one of the 
most significant is giving Medicaid beneficiaries the ability 
to understand how quality compares across plans through a new 
quality rating system, so that beneficiaries can shop, and they 
can form choices about their plan selections.
    As you referred to, Ranking Member Green, we also 
substantially have improved our approach to ensuring that plan 
rates are actuarially sound. There is a body of work reviewing 
those rates that is going on now, even in advance of the 
regulation, to really make sure that we are paying the right 
amount to ensure adequate access to Medicaid beneficiaries, and 
ensuring appropriate stewardship of funds.
    And with respect particularly to access, the proposed rule 
establishes for the first time--or proposes to establish that 
there will be State-developed network adequacy standards for 
many key services for the Medicaid population, which, given 
that, as recently as 3 years ago, nearly 60 percent of our 
beneficiaries were enrolled in managed care, I think is a 
really substantial advance in access for our program.
    Mr. Green. OK. Mr. Chairman, I have one last question for 
Ms. Schwartz. Has MACPAC looked at how changes to streamline 
eligibility have improved the continuity of care?
    Dr. Schwartz. We have not specifically analyzed that issue. 
It is one we are very interested in, and the data are not yet 
available for us to do so. And as data become available, that 
is something that we will be keeping our eye on.
    Mr. Pitts. The Chair thanks the gentleman. I recognize the 
chair emeritus of the full committee, Mr. Barton, 5 minutes for 
questions.
    Mr. Barton. Thank you, Mr. Chairman, and thank you for the 
hearing. These microphones kind of have an echo to them. I will 
be as softly as I can.
    Ms. Wachino, could you give us the status of the Texas 
request for re-approval of its 1115 waiver?
    Ms. Wachino. Yes, I can. The Texas waiver expires next 
year. I know that the State has been working on a request to 
extend that demonstration, which we approved in 2011, but they 
have not sent it to us yet. We have had some initial 
conversations with them, but are waiting for them to submit 
their full request, and look forward to working with them on 
it.
    Mr. Barton. So there have been some rumors that because 
Texas is such a red State that that application is going to be 
frowned upon. That is just rumors? There is no validity to 
that?
    Ms. Wachino. Congressman Barton, we work with all States 
through the waiver process to try to achieve the objectives of 
the Medicaid program and try to take into account State-
specific needs, and we are looking forward to reviewing with 
the State of Texas how the initial demonstration went. There 
were some areas of their programs that were new to us when we 
initially approved it. We will want to review very closely with 
them how the different provisions of the waiver are working. 
And we are looking forward to that discussion.
    Mr. Barton. With Mr. Green here, my ally, make sure we are 
bipartisan, you will----
    Mr. Green. Would you yield to me just for a minute?
    Mr. Barton. I will be happy to yield.
    Mr. Green. Even though we are a red State, we sure have a 
lot of poor people, and Medicaid is for that, whether you are 
red or blue, or----
    Mr. Barton. That is true.
    Mr. Green [continuing]. Whatever. Thank you, Joe, for your 
leadership on what we are trying to do.
    Mr. Barton. Of course, those of us that are red, in that 
sense, you know, if they would listen to us more, we would have 
less of those people. See, we would get them into where they 
didn't need to be a part of it, but that is a different 
discussion.
    So we have your word that the Texas 1115 waiver application 
is going to be fairly reviewed?
    Ms. Wachino. Again, we work with all States, you know, and 
we apply the same process to all States. We look to review the 
extent to which a waiver achieves the objectives of the 
Medicaid program and how it is advancing the health of the low-
income population in the State. And I----
    Mr. Barton. So that is a yes?
    Ms. Wachino. I know that the team in Texas is working hard, 
and we are looking forward to working with them.
    Mr. Barton. OK. I am going to take that as a yes. We are 
going to put it in the record as a yes, that it is going to be 
fairly reviewed.
    Let us look at a program, Ms.--that Ms. Castor and I are 
very supportive of, the Ace Kids Act. It would allow States to 
set up programs across State lines for special needs children, 
create a medical home in these anchor children's hospitals, 
where a parent could bring a child, and if the child qualifies, 
they get the full range of services, whatever those services 
need to be. This is a bipartisan bill. We have got--I can't 
remember how many co-sponsors, but it is well over 100. Are you 
familiar with that bill?
    Ms. Wachino. Congressman Barton, I can't say that I have 
looked at the particulars of that bill, but clearly approaches 
that advance the quality of care and coordination of care for 
children particularly are of interest to us, so I am happy to 
take a look at it, and CMS stands ready to provide any 
technical assistance to you on it.
    Mr. Barton. Well, the advocates of it, and I am an advocate 
for it, believe that it would save money for Medicaid. You 
wouldn't have to have a parent try to create their own network, 
and in some States you don't even have the type of care that 
that child needs. So it has got a lot of support, and I would 
encourage you and your staff to take a look at it, and 
hopefully, at the appropriate time, be supportive of it. And 
with that, Mr. Chairman, I yield back.
    Mr. Pitts. The Chair thanks the gentleman. I now recognize 
the gentlelady from California, Mrs. Capps, 5 minutes for 
questions.
    Mrs. Capps. Thank you, Mr. Chairman, and I appreciate the 
presence of our witnesses today, and your testimony. It is very 
appropriate that we are here during this anniversary year to 
talk about the largest source of health coverage in our 
country, Medicaid, and the Children's Health Insurance Program, 
CHIP. These programs now provide health care--or opportunities 
for health for over 70 million Americans, and I am happy that 
our committee was able to ensure that CHIP is re-authorized for 
2 more years, and I hope that we continue to actively support 
and ensure the continuation of something I have known, as a 
school nurse, as an incredibly successful program.
    As a committee, we have a responsibility to make our best 
faith effort to build upon the success of these programs. 
First, it is important to recognize how far the Medicaid 
program has come in the last 50 years. It is remarkable. 
Perhaps most notably, in the past few years, the program has 
been very much strengthened through the provisions in the 
Affordable Care Act based on the needs of our communities.
    Medicaid is a safety net, of course, for these people who 
are otherwise shut out of private insurance, either because it 
is unaffordable, or is unavailable to them. And thanks to 
Medicaid expansion in the States where they have access to it, 
the program could be there for any of us, including here, in 
this room, who fall down on our luck and needed support.
    Most people in the coverage gap are working. They are 
working poor, employed either part time or full time, but still 
living below the property line. While the promise of coverage 
is there, unfortunately, nearly four million hard-working low-
income Americans cannot receive the health coverage they need 
because they live in States that have chosen not to expand 
Medicaid, despite the economic benefits that are now 
demonstrated, well demonstrated, of doing so. However, for 
those who do have Medicaid coverage, there have been 
substantial changes to the delivery of Medicaid that aim to 
increase access, and also quality of care. I am particularly 
proud of all the progress in my home State of California made 
in the areas of patient-centered medical homes and care 
coordination.
    This has been discussed by you already in a response to a 
question, but can you talk about, Ms. Wachino, some of the 
other new and innovative delivery system reforms that you have 
seen States starting to take up, and have been working with 
States to make sure it happens?
    Ms. Wachino. Sure, I am happy to, thank you. We have a 
variety of really promising work underway with States to 
strengthen their delivery systems. And, as I said briefly in my 
oral testimony, there are many different modalities.
    Mrs. Capps. Um-hum.
    Ms. Wachino. Some States, you know, use existing State plan 
authority. States like Arkansas are taking up shared savings 
for their providers, building off of a Medicare model. Missouri 
is using our new health homes option, created under the 
Affordable Care Act, to really move forward with improvements 
for people with chronic diseases. And in Missouri we have seen 
reductions in the use of hospital care, and improvements in key 
measures, like measures of diabetes care, which are very, very 
promising.
    There are other States who have taken even more far-
reaching approaches. Oregon, under 1115 authority several years 
ago, launched coordinated care organizations, which were 
designed to be community rooted approaches to coordinating the 
entire spectrum of care for Medicaid beneficiaries and piloting 
new approaches, like using community health workers. Other 
States have created delivery system reform incentive payments 
to really propel movement forward on key payment goals. We 
approved New York last year for a new 1115 waiver, and New York 
is committed to very concrete and measurable objectives for 
increasing the number of their providers who are using value-
based payments.
    Mrs. Capps. Thank you.
    Ms. Wachino. So I think we are changing the landscape of 
Medicaid care delivery in a number of ways.
    Mrs. Capps. I don't mean to cut you off, but I think you 
could go on and on, and maybe you would like----
    Ms. Wachino. I am afraid I can, so I thank you for the 
stop.
    Mrs. Capps. You could submit any other examples you would 
like for the record, because, as we have discussed in this 
community 2 weeks ago, we have seen over 300 State flexibility 
waivers to create State solutions within the Medicaid 
framework. And that--this is an exciting time to see those come 
forward. There is substantial State flexibility. I think it is 
important to recognize this innovation and flexibility, what it 
looks like. Before considering any changes to our program, we 
must be mindful about what exactly--who will be impacted by the 
decisions that we might make, and if we are truly improving 
care, or just passing the buck to States.
    So we want to be working with you--with the different 
States with respect to persons with disabilities, seniors, and 
struggling families. Right now we know that the Medicaid 
program works. Individuals with Medicaid are more likely to 
receive preventative health care, which is cost savings, and 
less likely to have medical debt than their underinsured 
counterparts.
    Dr. Schwartz--I will have to save that question for another 
panel--another round. Thank you.
    Mr. Pitts. Or you can submit it in writing. Thank you. The 
Chair thanks the gentlelady. I now recognize the vice chair of 
the subcommittee, Mr. Guthrie, 5 minutes for questions.
    Mr. Guthrie. Hey, thank you. Thank you all for coming this 
morning. And, first, to either Ms. Yocom or Ms. Iritani, I hope 
I said that correctly, in your testimony you noted that CMS 
lacked complete and reliable data about the sources of funding 
States used to finance the non-Federal share of Medicaid, which 
can shift costs to the Federal Government. What information 
have you recommended that CMS collect, and how will having this 
information help CMS monitor the program to ensure the 
appropriate use of Federal funds?
    Ms. Iritani. Yes, we have made recommendations that CMS 
develop a data collection strategy regarding sources of funds 
that States use for financing the non-Federal share. We have 
recently surveyed States about how they are financing the non-
Federal share, and identified that States are relying more 
heavily on providers, such as through provider taxes, and local 
governments, through intergovernmental transfers, for example.
    Provider taxes, I think, doubled during the course of the 
2008 to 2012 time period that we looked at, and these can shift 
costs to the Federal Government and to providers. We think it 
is important that CMS have data needed for oversight.
    Mr. Guthrie. OK, thank you. And, Ms. Wachino, I have 
introduced a bill H.R. 1362, which would require States to 
report how they finance. I know you share that we need more 
transparency in the way States report how they finance 
Medicaid. And what actions has CMS taken in response to the GAO 
recommendations?
    Ms. Wachino. Mr. Guthrie, thank you for the question, and 
for your interest in transparency and accountability. I think 
GAO's work in this area has been very helpful, and we are 
making improvements, and continue to make more. We are looking 
much more closely at the sources, and reviewing more closely 
the sources of the non-Federal share. We are working on getting 
additional levels of data for a variety of different kinds of 
payments, and we are conducting more active oversight. We have 
also issued several forms of guidance to States, making sure 
that our rules are clear with respect to provider taxes and 
donations. So I think we are strong in this area, and continue 
to get stronger.
    Mr. Guthrie. Yes, and I used to be in State Government, 
before I got here on the Budget Committee, in Kentucky, which 
has a substantial Medicaid population. Actually one out of four 
now are on Medicaid, and so I understand that States are being 
creative because of the budget pressures they are facing, so 
that is something we all need to work together to move forward.
    And, Ms. Wachino, in your written statement you described 
numerous CMS initiatives aimed at innovation in achieving 
better health outcomes at a lower cost. And how is CMS 
assessing these--or evaluating these initiatives to determine 
if they are meeting goals?
    Ms. Wachino. A lot of these delivery system reforms are 
very important to us, and we want to know how they work for 
ourselves, as stewards of taxpayer dollars, and also to inform 
developments in other States. We are evaluating many of the 
delivery system reform improvements that we undertook with 
States through our 1115 waivers. Right now that is very 
important to us. MACPAC's also done some very helpful work in 
this area. And we also will be evaluating the effectiveness and 
results of the work we are doing through our Innovation 
Accelerator Program in areas like substance use disorder, 
promoting community integration, improving physical and 
behavioral health, and meeting the needs of complex, high cost 
populations. And, again, all of that is designed to help us, 
and to help States be smarter and better purchasers of care.
    Mr. Guthrie. Well, good. Is there some timeframe when some 
of the original--or early evaluations will come forward?
    Ms. Wachino. You know, I can get back to you on that 
question for the record.
    Mr. Guthrie. All right, thanks. And then one more. I 
understand that OIG has found significant and persistent 
compliance, payment, and fraud vulnerabilities related to the 
provision of personal care services in Medicaid, and--including 
payments for services not rendered. Has CMS taken action to 
address the OIG recommendations to improve integrity in 
personal care services?
    Ms. Wachino. Yes. Thank you for the question, and for the 
work that IG and GAO have done looking at our personal care 
services. We have taken steps to ensure the integrity of 
personal care services. We recently engaged a contractor to 
look at data and provider compliance----
    Mr. Guthrie. Um-hum.
    Ms. Wachino [continuing]. In that area. We issued a quality 
informational bulletin with respect to personal care services 
in our 1915(c), which, apologies for the jargon, are home and 
community-based services waivers. And also, as I think staff of 
this committee knows, we have made a very substantial effort in 
data systems modernization. We call it our TMSIS System, and 
that is going to provide us a level of programmatic data that 
we are very eager for, and will help our program integrity, 
program management, ability to evaluate States in a number of 
areas, including for personal care services.
    Mr. Guthrie. Thank you, my time has expired. I appreciate 
your answers. Appreciate your answers.
    Mr. Pitts. The Chair thanks the gentleman. I now recognize 
the gentlelady from Florida, Ms. Castor, 5 minutes for 
questions.
    Ms. Castor. Well, thank you, Mr. Chairman, and thank you to 
all of our witnesses for being here today to discuss Medicare 
on its 50th anniversary. You know, the passage of Medicare and 
Medicaid 50 years ago, through amendments to the Social 
Security Act, really are something to celebrate. They are 
landmark safety net laws in this country that really 
demonstrate our values. In Medicare, you work hard all of your 
life, and you retire, you are not going to fall into poverty 
because of a health condition. The same with Medicaid. Under 
Medicaid, we are not going to allow children across America, no 
matter what station they are born in in life, to suffer the 
consequences of a debilitating disability, or just being able 
to see a doctor.
    So we have something to celebrate here. And then when you 
add on the impact of the Affordable Care Act, feels like we are 
kind of out of the woods, and now we can begin to work on 
bipartisan solutions to improve it together. I think the future 
is bright so--this is also an important time for Medicaid, 
because at this point in time we are dealing with Medicaid 
expansion and delivery system reform, and that will help 
improve the lives of so many of our neighbors all across the 
country. So I look forward to hearing your thoughts on these 
transformations.
    I want to especially thank Ms. Wachino for her extensive 
work with the State of Florida over the past few months, few 
years. We had a very contentious legislative session, where we 
had Republican State Senators, and the business community, 
hospitals, clamoring for a coverage model in Medicaid 
expansion. We had a Governor who flip-flopped. He was for 
Medicaid expansion when he ran for re-election, then he changed 
after the election. He devised a budget with certain low-income 
pool monies that were--he was on notice that--just weren't 
going to happen, and you came through it very well. We still 
have challenges in Florida. I hope we can move to Medicaid 
expansion. But you stayed true to the values and the intent of 
the Medicaid program, so thank you very much.
    I would like to ask about the agency's proposed rule for 
Medicaid managed care organizations that were issued earlier 
this year. Given the growing number of Medicaid beneficiaries 
who receive care through managed care arrangements, it is 
crucial that we strengthen Federal oversight of these programs 
to ensure that Federal dollars are being spent wisely. This has 
my attention especially because a Federal Court Judge in 
Florida found that Florida's Medicaid program was in violation 
of Federal law because of low reimbursement rates, failure to 
provide prompt service and adequate service, failure to provide 
outreach services as required by the law. Then you had a 
Supreme Court Decision involving the State of Idaho that said 
that you can't--private providers cannot challenge low 
reimbursement rates. So that puts the impetus on HHS to follow 
through with oversight.
    Ms. Yocom, GAO has issued a number of recommendations to 
CMS to improve Federal oversight of the managed care rate 
setting process, is that correct? And why does this feel--why 
does GAO feel that this is necessary?
    Ms. Yocom. Well, it goes back in part to transparency 
issues, understanding where the money is going and for what 
purposes. We also did do work just recently that spoke to the 
fact that neither the Federal Government nor the States in our 
sample were actually conducting audits of Medicaid managed care 
organizations, and we recommended that that be changed, that 
CMS require States to conduct audits both to and by managed 
care organizations.
    Ms. Castor. And Ms. Wachino, do you agree?
    Ms. Wachino. I think GAO's concerns helped us really inform 
some of our thinking about our proposed rule. Ensuring 
accountability in managed care is vitally important to us 
because it is where most of our beneficiaries get their care. 
Medicaid is no longer a fee-for-service program, and managed 
care has great potential to offer care coordination and meet 
the needs of low-income Americans, but we really want it to be 
as strong as possible.
    So, to Ms. Yocom's point, part of the proposed rule does 
include greater auditing by Medicaid managed care plans. We 
have also proposed new rules with respect to provider 
enrollment to ensure that providers go through the same 
screening process when they enroll in a Medicaid managed care 
plan that they do in a fee-for-service program. And we are 
making substantial advances in the soundness of the rates that 
States pay plans.
    Ms. Castor. Yes. For example, the Federal--I will--I am 
going to submit these further questions into writing, Mr. 
Chairman, and I would also like to thank Chairman Emeritus 
Barton for raising the issue of the Ace Kids Act, and we will 
look forward to working with CMS on a medical home for children 
with complex conditions. Thank you very much. I----
    Mr. Pitts. The Chair thanks the gentlelady, and now 
recognizes the gentleman from Kentucky, Mr. Whitfield, 5 
minutes for questions.
    Mr. Whitfield. Thank you very much, and thank the four of 
you for joining us today, and we appreciate your 
responsibilities and involvement in the healthcare delivery 
system in America. As you know, or maybe you don't know, there 
are about 67 different programs in the Federal Government 
relating to climate change. And whenever--EPA has been 
particularly active in that area, and on their regulations they 
talk about some of the primary benefits relate to health care. 
Asthma conditions, premature deaths, whatever. And we know that 
Medicare, 500 billion a year, Medicaid, 330 billion a year, 
community health centers, around 5 billion a year, I don't know 
what the cost of Tricare is, but it is primarily about access 
to health care, which is vitally important.
    But one area that I have been reading more and more about 
recently that disturbs me a great deal relates to antibiotic 
resistant bacteria. And it is turning out that it is a more 
significant issue not only nationally, but internationally. And 
I read an article recently that last year alone in America 
there were 37,000 deaths relating to infections that could not 
be treated by antibiotics. And some of the experts are saying 
that that figure is much lower than reality because the 
identification system is not sophisticated enough to determine 
when someone has died because of the bacteria being resistant 
to antibiotics.
    And I have been told that 44--that hospitals in 44 States 
have had outbreaks of bacteria resistant to antibiotics. Even 
NIH, our premier research and development institute, has had 
deaths because of this issue. And I would like to know--you all 
are involved in the very core of CMS, and HHS, and CDC. Are you 
aware of some specific programs that are trying to address this 
problem that faces the American people today?
    Ms. Wachino. Congressman Whitfield, thanks for raising the 
concerns. I think that HHS shares your concern about making 
sure that people remain healthy. I would like to go back and 
consult with my colleagues, particularly in CDC, and get back 
to you for the record about what they are doing, because I 
think when it comes to things like surveillance, that is really 
a primary responsibility of theirs, with Medicaid coverage 
supporting people, when they unexpectedly fall ill, to make 
sure they get the services----
    Mr. Whitfield. But you--well, I appreciate that, because I 
tell you, I do get upset about it, because we see a plethora of 
executive orders and regulations relating to asthma, and other 
things like that, but I am not aware of one executive order or 
regulation to address this issue, and this is an issue that can 
really destroy a lot of people in this country and around the 
world. And the experts that I have heard from, the hospitals 
that I have talked to, and others, say that this is an epidemic 
that can be quite serious not only for America, but for the 
world.
    Ms. Wachino. Thank you for the concern. I am happy to go 
back and consult with our experts and circle back with you to 
provide you more information with how we are approaching it.
    Mr. Pitts. The Chair thanks the gentleman, now recognize 
the gentlelady from California, Ms. Matsui, 5 minutes for 
questions.
    Ms. Matsui. Thank you, Mr. Chairman. As we know, California 
is the forefront of innovation of many areas, not the least of 
which is health care. California was an early implementer of 
Medicaid expansion, and the first State to implement the 
delivery system reform incentive payment. As we know, Medicaid 
is a State/Federal partnership, and the ability for the State 
to implement pieces of the program as it sees fit within 
Federal guidelines is essential to its success. Of course, the 
main way that States are able to exercise this flexibility is 
through the waiver process.
    Now, just 2 weeks ago California was the first State to be 
approved for a 5-year renewal of a different waiver, for 
specialty mental health services. Previously these types of 
waivers were only allowed to be renewed in 2-year intervals, 
but the ACA changed that to allow for 5-year renewals. This is 
a huge step forward for the nearly one in six California 
adults, and one in 13 California children with mental health 
needs.
    I am also so pleased that California is also moving forward 
to apply for new community behavioral health funding in the 
Medicaid program, which will be available in the form of 
demonstration projects based on the Excellence in Mental Health 
Act that I co-authored with my colleague on this committee, 
Representative Leonard Lance. This demonstration will support 
California's efforts to integrate mental and physical health. 
This is so important, as we all know that the head is connected 
to the body, and we need to treat it that way.
    Ms. Wachino, how is a Medicaid program, especially through 
waivers and demonstration projects, making a difference in the 
mental health system?
    Ms. Wachino. Thank you for the question. We are working 
actively on supporting mental health services in a number of 
areas, and thank you for mentioning the community mental health 
services program that we released the planning grant 
announcement for just a few months ago. We were very happy to 
have that legislation. As you well know, it allows us to pilot 
approaches in partnership with health centers to advance 
community-based mental health care, and we are very much 
looking forward to seeing States apply for those grants. We 
have had a high interest level so far, and we will look forward 
to continue working with them.
    I think, in addition to that, we have a number of 
initiatives underway, and a very strong interest level from 
States in moving towards greater physical and behavioral health 
integration, and clearly community-based mental health care is 
a key part of that, and we will be working actively with 
California, and with other States, to ensure appropriate 
provision of community-based care.
    Ms. Matsui. Well, thank you. Now, Ms. Wachino, under your 
leadership CMS recently released the first major proposed 
update to Medicaid and CHIP managed care rules since 2003, and 
one of the provisions of the proposed rule would provide 
flexibility for Medicaid managed care on the so-called IMD 
exclusion, which prevents Medicaid from paying for inpatient 
mental health services and facilities with more than 16 beds. 
Can you please elaborate on that policy, and how it is intended 
to strike the right balance between the ability to provide 
inpatient services and emphasis on community-based care?
    Ms. Wachino. Thank you for the question. We have spent a 
lot of time thinking, and I know many members of Congress have 
as well, about how to ensure access to mental health services, 
particularly community mental health services, and we have 
become aware of a growing need for access to mental health 
services.
    However, we are also trying to approach it cautiously and 
are very aware of the risk that if we move too far forward, and 
too fast in moving forward, in terms of allowing Medicaid 
funding for services to adults in institutions of mental 
disease--which, as you know, Congresswoman Matsui, is 
prohibited by statute--that we would risk undermining the 
progress we have made in serving Medicaid beneficiaries in 
communities rather than institutions. So our proposed rule 
tries to strike the balance by proposing to allow States and 
plans to cover, as part of their capitation rates, short-term 
stays in institutions of mental disease.
    Ms. Matsui. OK. Thank you. Dr. Schwartz, during your 
testimony today you noted the importance of Medicaid on our 
health system safety net. I was particularly interested in your 
comment that Medicaid often acts as a wraparound insurance for 
long-term services and supports, as well as employer sponsored 
insurance and Medicare. Can you please expand on this 
wraparound role that you described in 10 seconds?
    Dr. Schwartz. Yes. I think the primary way is Medicare does 
not cover long-term services and supports, although it is the 
primary source of coverage for medical care for the elderly and 
disabled. Those services have very few sources of private 
coverage, and Medicaid plays a key role for those populations. 
It also provides wraparound services for employer-sponsored 
coverage, primarily for children with disabilities, who have 
very high costs, particularly for prescription drugs, that may 
be beyond what their parents' plans pay for.
    Ms. Matsui. OK. Thank you, and I will submit my other 
questions.
    Mr. Pitts. The Chair thanks the gentlelady. I now recognize 
the gentleman from Illinois, Mr. Shimkus, 5 minutes for 
questions.
    Mr. Shimkus. Thank you, Mr. Chairman, and welcome--we have 
two competing, as you probably heard, hearings going up and 
down, so I apologize for missing some of the testimony. But to 
my friend from Kentucky, we do have 21st century cures. Bill is 
going to be on the floor. Adapt is part of that. It is going to 
build on gain. This is on the antibiotic resistance issues, 
which we hope to get, you know, more drugs into the--or to be 
able to compete. So I do think there is a legislative response. 
I think his issue was, you know, where is the Government's 
response? So--but I just throw that out there for information.
    Ms. Wachino, in 2008, Mr. Waxman, Dingell, and Mr. Pallone 
sent a letter to GAO expressing concerns on CMS' implementation 
of its own policy on 1115s, and we have talked about these 
today, demonstrations that they be budget neutral. Years later 
those concerns are still there. GAO has found billions of 
dollars in increased costs to the Federal Government as a 
result of waivers that were not budget neutral, a concern that 
crosses party lines. Can you please explain CMS' process for 
assessing the budget neutrality of waivers, and how the CMS 
actuaries are involved in this process?
    Ms. Wachino. Sure. Our approach to budget neutrality, 
which, as you know, is designed to ensure that costs with the 
waiver are not higher----
    Mr. Shimkus. Well, the States have been making promises 
that they are going to have this new ramped up program that is 
actually going to be a savings, and we are finding out that 
they are not.
    Ms. Wachino. Yes. As we work with each State, we try to 
find a solution. As we have worked them, particularly on budget 
neutrality, we have made our 1115 waiver approval process more 
transparent. We have improved our monitoring and evaluation. 
And particularly with respect to transparency, we put all of 
our approval documents on medicaid.gov. We also, as you 
probably know, developed a template for waiver applications 
that includes a structure for budget neutrality reporting, and 
we have worked to be consistent in our approaches to budget 
neutrality across States.
    Mr. Shimkus. Wouldn't it be prudent to have you all and 
your actuaries sign off on each demonstration to ensure that it 
is budget neutral?
    Ms. Wachino. I think we have worked hard to ensure 
consistency in budget neutrality, and will continue to work 
hard.
    Mr. Shimkus. So that brings me to H.R. 2119, which is the 
bill I dropped, just to really say sign off on it. Have your 
actuaries actually sign on the dotted line, and put their 
reputation on the line that, based upon the analysis they have 
in front of them, that this is going to be--right now, yes, you 
could put all this stuff out there, but it is not a strong 
enough signal to say--because we--it is been proven it has not 
been working. I mean, we are just spending more than what the 
projected savings would be on the program.
    Let me go to one last issue, which I do have time for. If 
the staff would put the chart up? 

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    Mr. Shimkus. I talk about this all the time. CBO recently 
issued a 2015 long-term budget outlook, and has noted that, in 
a little more than a decade, all the Federal budget will be 
consumed with entitlements and service on the debt. With 
respect to Medicaid it said many State Governments will respond 
to growing costs for Medicaid by restraining payment rates to 
providers and managed care plans, limiting the services that 
they choose to cover, or tightening eligibility for those 
programs so that it serves fewer beneficiaries than it would 
have otherwise.
    This reaffirms a long-term concern of mine that our biggest 
threat to access to care for our Nation's most vulnerable is 
the budgetary pressures that States and the Federal Government 
face in financing our entitlement programs. Yet, in your 
testimony today, you did not mention the fiscal sustainability 
of the program at all. Aren't you concerned that unless we make 
changes our fiscal situation will put beneficiaries' access to 
care at risk, or do you agree with--disagree with CBO's 
warnings?
    Ms. Wachino. We are very committed to being strong fiscal 
stewards of the Medicaid program. I think Medicaid has proven 
to be a very cost-efficient program. As you saw in some of my 
colleagues' testimony----
    Mr. Shimkus. But the point is this, here--that is our 
budget.
    Ms. Wachino. Um-hum.
    Mr. Shimkus. The red is mandatory spending. One of those is 
Medicaid. And the CBO says it is going to grow, so it is going 
to keep shrinking the blue, which is the discretionary budget, 
which is all these other things we do, NIH, and all these other 
things. The CBO report also says that States--and we have seen 
this. This is not new. States, when they are in budgetary 
pressure, they start restricting access to Medicaid. Isn't that 
a threat that you ought to be mentioning when we are doing this 
let us talk about Medicaid hearing?
    Ms. Wachino. Congressman, we work, again, actively to 
ensure the sustainability of the program so that it----
    Mr. Shimkus. So what proposals are you going to provide to 
us to make this program sustainable?
    Ms. Wachino. Congressman, in the President's budget we 
proposed proposals around changing the drug rebate----
    Mr. Shimkus. And that is not in your testimony.
    Ms. Wachino. That is right. My testimony did not address 
every proposal in the President's budget, but I think it is 
important to note for the record that there are proposals with 
respect to changes for durable medical equipment, and to 
spending for prescription drugs. And we think approaches like 
that, together with our approaches to strengthening delivery 
system reforms, are the ways to ensure the sustainability of 
the program for the future.
    Mr. Shimkus. Thank you, Mr. Chairman. I will just say 
actuary changes in entitlement programs. You have to make 
actuary changes, not nibbling around the edges. And I will 
yield back my time.
    Mr. Pitts. The Chair thanks the gentleman, and now 
recognize the gentleman from New Mexico, Mr. Lujan, 5 minutes 
for questions.
    Mr. Lujan. Thank you very much, Mr. Chairman. Ms. Wachino, 
as you are aware, I have had conversations with you and with 
Secretary Burwell about concerns with the behavioral health 
system in New Mexico. At the moment is CMS concerned that New 
Mexicans enrolled in Medicaid have adequate access to 
behavioral health services?
    Ms. Wachino. Congressman, thank you for working with us and 
for your continued interest in this issue, and you know that we 
share concerns about ensuring appropriate access to behavioral 
health services in New Mexico. We have worked very closely with 
all States, including New Mexico, to ensure appropriate access 
to behavioral health care. Specifically, with respect to New 
Mexico, as you and I have discussed previously, we are working 
with the State to develop a comprehensive plan to continue and 
to ensure access. The State has provided us data, which we are 
reviewing now, and we hope to be able to report out on it soon.
    Mr. Lujan. So, Ms. Wachino, in 2013 CMS asked the State of 
New Mexico for a network development plan. Is that the plan you 
are referring to?
    Ms. Wachino. We asked them for a plan. We have actually 
taken a step back and asked them to go a little bit further 
than that, and to go review their past plans and their future 
plans, and provide to us a plan that provides us an assurance 
that there will be adequate access to mental health services 
throughout the State.
    Mr. Lujan. So in 2014 you followed up with a request 
letter, the same one that you submitted in 2013 to the State of 
New Mexico, reminding them--it says, we remind the State to 
submit a network development plan. Has that plan been submitted 
to CMS?
    Ms. Wachino. I will have to go back and check, and I could 
submit that for the record. I can tell you, Congressman, that 
we met with the State as recently as June to talk about the 
need to continue progress forward in this effort. We still have 
some additional information we are awaiting for the State, and 
we continue to work with them actively, and look forward to 
having more to report to you soon.
    Mr. Lujan. So I appreciate very much that CMS shares 
concerns. It is also stated in your 2013 letter that CMS 
continues to be concerned about the transition of behavioral 
health providers and centennial care. In 2014 the State again 
worked with the State of New Mexico to ask for some data to be 
released associated with behavioral health stakeholders.
    And there was a letter that was sent to the State of New 
Mexico in which the State of New Mexico's behavioral health 
responded to CMS, September 23, 2014. In the letter it says, 
``As we discussed in our meeting with CMS''--and I am quoting 
--``and the BHS stakeholders, HSD is anxious to share BH 
utilization data with the public, but we need to be sure that 
the data we report is accurate. We are close to confirming the 
utilization data, and within the next few weeks we expect to 
release BH utilization data for the first two quarters of 
centennial care. We understand the importance of data 
transparency.'' So it said within the next few weeks. Again, 
this letter was written September 23.
    In an article in the Albuquerque Journal, which is a local 
paper, published September 24, which is the next morning, at 
12:02 a.m.--and I know the press is good, but they can't write 
an article in a minute, so it probably was written the day 
before--the spokesperson for HSD says that the data will be 
presented to the Legislative Finance Committee today. Was 
someone not being honest with CMS when they sent this letter to 
you on September 23?
    Ms. Wachino. Congressman, we continue to work as closely as 
we can with the State to ensure adequate access to behavioral 
health services. I can go back with my staff and review what 
the State submitted, and report back to you.
    Mr. Lujan. Ms. Wachino, has CMS been receiving adequate 
data yet?
    Ms. Wachino. We have a variety of data sources from the 
State. We are comparing them to each other, and trying to 
identify trends and issues with respect to access to behavioral 
health care.
    Mr. Lujan. Did CMS receive the data that was publicly 
reported in the Albuquerque Journal, that was also shared with 
the New Mexico Legislative Finance Committee on September 24 of 
2014? Has CMS received that data?
    Ms. Wachino. Congressman Lujan, I know that we have 
received data, including data that is reported to the 
legislature from the State. As you know, many of the 
developments that you have just informed me of precede my 
tenure at CMCS, so, if I could, I would like to go back and 
examine the record with my staff who have been working on this.
    Mr. Lujan. And, Ms. Wachino, with all due respect, these 
issues were brought up with the meeting with the delegation 6 
weeks ago. This is--these are not new questions. The reason I 
am asking them in this hearing today is because we have not 
received any answers, and it is frustrating. Especially when it 
seems that the paper has more access to data than the 
delegation and CMS does, at least than what is--reporting to 
us. The way that this information came out was through a FOIA 
request through a local network of individuals that were 
concerned in New Mexico. Do--does--do members of Congress have 
to seek Freedom of Information Act requests to Federal agencies 
to get data?
    Ms. Wachino. Congressman, as we have committed to you, we 
would--we are obtaining data from the State, and we have agreed 
to make it transparent for everyone. And let me say again, we 
met with the State as recently as early June to try to ensure 
continued progress in this area, and we are going to continue 
to work with them and with you to ensure appropriate provision 
of behavioral health services in the State.
    Mr. Lujan. All right. Mr. Chairman, I--as you can see, 
there is some frustration from the delegation in the State of 
New Mexico in this issue, and it is one that we hope that we 
can continue to work with the staff and everyone that--from CMS 
that has been working with us recently. But we need to get 
these answers to questions that have been asked, and to try to 
get to the bottom of what is going on. And I certainly hope 
that you can share with us.
    I will submit into the record more questions, Mr. Chairman. 
A deadline that has been established for when this report 
were--in 2013--2014. It is now 2015. When is a deadline going 
to be established to get this report in? So I thank you, Mr. 
Chairman, for your indulgence, and I yield back.
    Mr. Pitts. The Chair thanks the gentleman, and now 
recognizes the gentleman from Pennsylvania, Dr. Murphy, 5 
minutes for questions.
    Mr. Murphy. Thank you, and good morning. I am going to 
follow up on some of the questions my colleagues and friends 
have asked from New Mexico and California, the behavioral 
thing. I know the GAO report said that behavioral health is a 
serious problem.
    Ms. Wachino, you made reference to the word progress. What 
progress is being made on the IMD exclusion issue?
    Ms. Wachino. We have been looking very carefully at this 
issue from the standpoint of wanting to ensure that there is 
appropriate access to inpatient mental health services and at 
the same time trying to arrive at an approach that doesn't 
undermine the progress that we have made----
    Mr. Murphy. That is what I am asking----
    Ms. Wachino [continuing]. Supporting people in the----
    Mr. Murphy [continuing]. What you mean by progress----
    Ms. Wachino [continuing]. Communities.
    Mr. Murphy [continuing]. Is what----
    Ms. Wachino. The most tangible sign of progress is in our 
proposed managed care rule, where we have proposed to give 
States the flexibility, and plans the flexibility, to cover, 
through their capitation rates, short-term stays in their----
    Mr. Murphy. ``Short-term'' meaning?
    Ms. Wachino. ``Short-term'' meaning--I think the standard 
is up to 15 days. I can tell you that we reviewed preliminary 
data from the Medicaid emergency psychiatric demonstration, 
which I know you are familiar with, and use that to base the 
standard for the short-term stay.
    Mr. Murphy. Some things about that have been--I am 
concerned that a short-term stay of 15 days is insufficient, 
because it may take a couple weeks to get off of one 
medication, couple weeks to get back on another one. But we 
don't--but that is different from residential care. I am 
looking at things that I think are valuable at a less than 30 
days average rate.
    But when you are looking at these issues, and helping 
States do that, are you looking at other dependent variables, 
such as suicide rates, drug overdose rates, arrests, 
incarcerations, homelessness, ER boarding costs, are any of 
those things you are looking at?
    Ms. Wachino. I think, Congressman, your question points 
to--at the end of the day we should be looking at health 
outcomes.
    Mr. Murphy. Um-hum.
    Ms. Wachino. When we fund Medicaid services, I believe that 
the evaluation of the Medicaid emergency psychiatric 
demonstration will inform our policy in this area 
significantly. We don't have evaluation results yet.
    Mr. Murphy. And I just want to make sure, as you are 
pursuing that--and this is what I want to find out, what your 
dependent variables are in your study. A recent report that was 
just--I just read from the Arkansas legislature, might want to 
look that up. It looked at States like Oregon, Georgia, Texas, 
and found that the rates--the cost of incarcerating someone 
with mental illness could be 10 times higher than the rate of 
serving them in the community.
    Obviously this would be a huge issue, especially if you 
have the revolving door of people in and out of jails, show up 
in emergency rooms, back in the community, we are not serving 
anybody well that way. I am sure you would agree. That is 
heartless, and that is--we don't do that in this country. 
Unfortunately, we do that, but it is a serious concern.
    But with regard to that, I also want to talk about 
legislation I have that this committee has been dealing with my 
legislation, Helping Families in Mental Health Crisis Act. We 
are trying to reform the whole system. And one of the ways that 
we look at this is to help--is through promoting stronger 
enforcement of mental health parity. And recently CMS proposed 
a rulemaking that would apply purely to beneficiaries served by 
Medicaid and managed care, which have far reaching positive 
implications, if complied with.
    On another area, though, I have strong concerns about the 
proposed rule's exclusion of long-term care services from 
MHPAEA, parity protections. Long-term care services, inpatient 
and community based, are critical to many individuals with 
mental health and substance abuse disorders, particularly the 
medicated CHIP population. And CMS has clear authority and 
statutory obligation to apply parity to all covered benefits 
under these programs, yet the proposed rule doesn't even define 
long-term care services, or identify the types of services that 
apply. Can you address this flaw in the proposed rule with 
regard to the definition of that?
    Ms. Wachino. As you know, the comment period on our 
proposed mental health parity rule, which we think is a very 
substantial advance in coverage of mental health services in 
the Medicaid program, just recently closed. We are reviewing 
the comments now, and I would fully expect that the question of 
whether these protections also extend to long-term services is 
something that we will receive a lot of comments on, and that 
we will actively consider as we finalize the rule.
    Mr. Murphy. Thank you. I hope--what is important to all 
these rules, in looking at behavioral health, is when--you also 
talk about progress in this issue is--I think we are also--so 
all--you have the IMD exclusion. A lot of people can't get care 
for the crisis, period. We don't want people--we don't ever 
want to bring back the asylums, but we want people to have an 
option for crisis, instead of being boarded in an emergency 
room. We have had testimony in my Oversight Committee that 
boarding would take place for hours, days, weeks, and months. 
Terrible place for a person to be strapped to a gurney as these 
things go on.
    But part of the concern also is that there are just simply 
not enough providers. Not enough psychiatrists, not enough 
clinical psychologists, not enough clinical social workers, who 
deal with the severely mentally ill. And so I am hoping that is 
also something you are looking at as well. It has an impact 
upon the reimbursement and--provision of these. As you are 
looking at working out these partnerships with States, we have 
to have ways of getting more people out there, because nothing 
is worse than telling someone, there is just no room for you, 
and there is no one to see you. I yield back.
    Mr. Pitts. The Chair thanks the gentleman. I now recognize 
the gentleman from Oregon, Mr. Schrader, 5 minutes for 
questions.
    Mr. Schrader. Thank you, Mr. Chairman, I appreciate it. Ms. 
Wachino, could you comment a little bit on Medicaid spending 
per beneficiary compared to private insurance over this past 
decade?
    Ms. Wachino. Sure. Thank you for the question. When you 
look at per capita--per beneficiary costs, Medicaid costs have 
been recently growing more slowly than the per beneficiary 
costs in private insurance. And I believe I saw in my 
colleague's testimony projections that, on a per beneficiary 
basis, Medicaid costs are expected to grow more slowly than 
private insurance. Of course, we are putting a number of tools 
in place focused on delivery system reform to ensure that we 
continue to do the best possible job of maintaining Medicaid's 
cost efficiency.
    Mr. Schrader. CBO would apparently agree with you on that. 
Ms. Yocom, just a quick comment. I--as we celebrate the 50th 
anniversary of Medicaid, the program is changing. We are moving 
past the old fee-for-service--pay for, you know a widget or a 
particular service--and going to this managed care type of 
model, where we are treating the whole patient a little bit, I 
think to answer Dr. Murphy's concerns, and others. Is GAO 
prepared to audit outcome-based results versus just how the 
money is spent?
    I mean, in our last hearing Ms. Iritani and others in GAO 
talking about how the money is spent. And certainly when you 
are just monitoring, you know, individual dollars going out, 
that is appropriate. But, as a policymaker of the 21st century, 
I would rather monitor outcomes. I am not sure I can evaluate 
the appropriateness of an expenditure, but I can evaluate 
whether or not we are getting results. Is GAO prepared to work 
along those lines?
    Ms. Yocom. We would be glad to work with you on putting 
together work in that area. We have also done some work looking 
at managed care utilization rates, and did find a wide variety 
of utilization rates across the 19 States that we looked at. 
And some of this did appear to be related to whether or not a 
beneficiary was enrolled in Medicaid for the full year versus a 
partial year.
    Mr. Schrader. All right. That will be fun to work with you 
on. I know my own State, much like I guess Kentucky, the 
Medicaid expansion--what was occurring before this was going 
on, before the ACA, and with the ACA, last year and a half we 
added 400,000 people to the Medicaid rolls. Big active outreach 
by folks in our State. We also have 25 percent of our 
population on Medicaid. It is not a--at least they have 
access--that great a portion of the population, I think.
    Ms. Wachino, pleased to see you reference Oregon's program 
in your testimony. It is a fairly innovative outcome-based 
approach, where we are trying to keep costs down. Actually, 
half of the projected rate for Medicaid growth nationally, from 
4 percent down to 2 percent, in the same time get better 
outcomes.
    I commented last year about results from a year ago, and I 
guess just recently new data came out, with emergency room 
visits down 22 percent amongst these coordinate care 
organizations that deal with mental health, hopefully dental 
health, as well as the fiscal health of the people. Short-term 
complications from diabetes down 27 percent with this 
coordinated care approach. Hospital admissions from COPD, 
chronic obstructive pulmonary disease, down 60 percent. You 
know, and that is one of the long-term cost drivers, 
unfortunately, of a lot of health care in this country, whether 
you are on Medicaid, Medicare, or private insurance. Can you 
comment a little bit on what CMS may be learning from what you 
are seeing in Oregon, and how you might evaluate future waivers 
from different States?
    Ms. Wachino. Sure. I think we will be looking very 
carefully at the results of the Oregon demonstration. And I am 
not yet familiar with the results you just shared, so thank you 
for that, and improving the population health. Oregon Committed 
is part of the 1115 waiver to very robust cost quality goals. 
And as we review the success of the waiver with them and of 
their coordinated care in serving Medicaid beneficiaries, we 
will want to look at cost, and quality, and how it is achieving 
those goals.
    Mr. Schrader. Good, good. Well, I think it is the future of 
medicine. Frankly, the future of Federal budgeting in general, 
rather than trying to dictate to different agencies or 
different providers around the country how to do things. Let us 
talk with them, share concerns about outcomes and where we are 
trying to go, monitor those and spend money there, hopefully a 
little more efficiently. With that I yield back. Thank you, Mr. 
Chairman.
    Mr. Pitts. The Chair thanks the gentleman. I now recognize 
the gentleman from New Jersey, Mr. Lance, 5 minutes for 
questions.
    Mr. Lance. Thank you very much, and good morning to you 
all. And I apologize for shuttling between two subcommittees. I 
think this is a very interesting hearing, and I want to learn 
more about Medicaid.
    To Ms. Wachino, when the program began 50 years ago, I 
assume that greater expenditures were in Medicare than 
Medicaid, is that accurate, 50 years ago?
    Ms. Wachino. Congressman, I would have to go back and look 
at the history----
    Mr. Lance. Well----
    Ms. Wachino [continuing]. To----
    Mr. Lance. Well, perhaps someone else on the panel. I 
presume at some point the line crossed, and the greater 
expenditure was on Medicaid than Medicare. Can anybody on the 
panel enlighten me on that?
    Ms. Yocom. I know that--and I attended a conference a 
couple of years ago where it was mentioned that combined 
Federal and State spending on Medicaid had just exceeded that 
of Medicare, total Medicare spending, and that would have been 
maybe a year or two ago.
    Mr. Lance. Combined Federal/State on Medicaid?
    Ms. Yocom. Correct.
    Mr. Lance. Whereas Medicare, of course, is primarily a 
Federal program. I wonder whether this was anticipated. The 
figures I have is that 70 million people utilize Medicaid, is 
that right, in this country? We have 310, 315 million people? 
Is that right? Seventy million people?
    Ms. Yocom. Yes.
    Mr. Lance. And has that increased because of the terrible 
recession? I know it increased as well because of the ACA. I am 
familiar with that, and the fact that some States have expanded 
Medicaid, and others have not, and that is a great debate in 
this country. And New Jersey is one of those States with a 
Republican Governor that expanded Medicaid. But do you think 
that the numbers have increased as well due to the fact that we 
are not in as robust economic times as we all would like?
    Ms. Yocom. We have done work looking at the effects during 
the economic downturns, and Medicaid enrollment does go up 
during an economic downturn. It also recovers--it is related to 
unemployment, of course----
    Mr. Lance. Yes.
    Ms. Yocom [continuing]. And unemployment, it tends to be a 
lagging indicator, so the recovery is also slower. And so you 
tend to get people on Medicaid more quickly, and they stay 
longer.
    Mr. Lance. Now, the unemployment rate is whatever it is, 
5.3 percent. It is lower than it was. Is there a correlation as 
well with the labor participation rate?
    Ms. Yocom. Yes, there is.
    Mr. Lance. Um-hum.
    Ms. Yocom. Yes.
    Mr. Lance. Yes. I mean, people cite the lower unemployment 
rate. I think that is half the picture. There is also a 
dramatically lower labor participation rate in this country. So 
there would be a correlation between Medicaid and the labor 
participation rate?
    Ms. Yocom. Right. Our work relied on the employment-to-
population ratio.
    Mr. Lance. Um-hum. And that is significantly lower than it 
has been in the last 50 years. Would that be an accurate 
statement?
    Ms. Yocom. I couldn't answer that.
    Mr. Lance. I think it is the lowest it has been since at 
least 1980, something like that. Thank you. Well, I want to 
learn more about this, because it is such an important part of 
the public policy of this country for the last 50 years.
    To CMS in particular, and this is a long and complicated 
question, and has lots of jargon in it, CMS has indicated the 
oversight of a program the size and scope of Medicaid requires 
robust, timely, and accurate data to ensure efficient financial 
and program performance, support policy analysis and ongoing 
improvement, identify potential fraud, waste, and abuse, and 
enable data driver decision making.
    Work conducted by the OIG in 2013 raised questions about 
the completeness and accuracy of the Transformed Medicaid 
Statistical Information System, TMSIS, data upon national 
implementation. CMS has since stated its goal of having all 
States submitting data in the TMSIS file format by 2015. Could 
you please describe the actions you are taking to ensure that 
this occurs?
    Ms. Wachino. Sure. If it helps with the jargon, 
Congressman, we call it TMSIS, and it is a data----
    Mr. Lance. TMSIS?
    Ms. Wachino. TMSIS.
    Mr. Lance. I have learned something this morning.
    Ms. Wachino. And it is CMS' investment in getting stronger, 
better, more comprehensive, and faster data, and how our 
program is working.
    Mr. Lance. Um-hum.
    Ms. Wachino. We have made substantial advances in TMSIS 
implementation this year. Our first State started submitting 
data in May, and we expect to have nearly all States submitting 
data by the end of the year. So we are moving forward and very 
eager to start sharing the data with external stakeholders for 
analysis, and using it for our own program management.
    Mr. Lance. Thank you. My time has expired, and I look 
forward to working with all of you.
    Mrs. Ellmers [presiding]. The Chair now recognizes Mr. 
Sarbanes from Maryland for 5 minutes.
    Mr. Sarbanes. Thank you, Madam Chair. Thank you all for 
your testimony. I am very interested in the money following the 
person initiative, and I wanted to hear a little bit more about 
that. When I was in private practice as a healthcare attorney, 
I had the opportunity, in Maryland, to work on a program where 
Medicaid--the Medicaid program assigned a certain number of 
slots where assisted living facilities could qualify for 
Medicaid reimbursement, which doesn't typically happen when you 
have skilled nursing care, which is covered, but doesn't extend 
into the assisted living arena.
    But the observation was there were sort of people in that 
inner section who could actually be treated in assisted living 
facilities, as opposed to going into skilled nursing, and 
could--that could be done at much less cost, and so why not try 
and explore that opportunity, potentially broaden it. And if we 
can continue to design that expansion or initiative going 
forward, it could produce tremendous savings, as well as being 
better for patients. And that can include exploring what sorts 
of treatments or reimbursement can occur in the home, right? So 
you are not even getting into institutional care of any kind.
    So I was just curious, what is the status of exploring 
this--what I consider a new frontier, particularly as the 
demographics of the wave of our seniors is coming at us full 
force?
    Ms. Wachino. Congressman, thank you for the question. We 
have spent a lot of time at CMS moving towards approaches that 
promote care--the most community-based care possible. And there 
is, as you note, a spectrum of different types of providers 
that can serve those individuals. Money Follows The Person is 
one vehicle by which we have worked with States towards that 
goal. We also have worked with them through the balancing 
incentive programs, and through their home and community-based 
service waivers.
    Currently, we have been assessing some of the things we 
have learned from our work with States through Money Follows 
The Person, and similar programs, and using it to inform our 
efforts with all States moving towards greater community 
integration, and would be happy to follow up with you on some 
of the particular things we have learned, and in particular the 
interaction with assisted living facilities.
    Mr. Sarbanes. Are you--I mean, are you seeing some real 
potential savings opportunities there?
    Ms. Wachino. I would like to look back more carefully at 
the fiscal impacts. I can say with certainty that we are seeing 
high rates of satisfaction from our beneficiaries as they move 
forward with greater community care. So we will circle back 
with you and provide evidence and impact on the cost.
    Mr. Sarbanes. I would love to get more information about 
that, and maybe collaborate with you----
    Ms. Wachino. We will follow up----
    Mr. Sarbanes [continuing]. Going forward.
    Ms. Wachino [continuing]. With you. Thank you for the 
question.
    Mr. Sarbanes. Thank you very much. I yield back my time.
    Mrs. Ellmers. The gentleman yields back. The Chair now 
recognizes Mr. Bilirakis from Florida for 5 minutes.
    Mr. Bilirakis. Thank you, Madam Chair. I appreciate you 
very much, and I want to thank you for your testimony.
    Ms. Yocom, in your statement you--for--to your report 
titled Medicaid Demonstrations, Approval Criteria and 
Documentation Needs To Show How Spending Furthers Medicaid 
Objectives, you highlight how HHS has approved questionable 
methods and assumptions for spending estimates without 
providing adequate documentation. You also mentioned HHS does 
not have explicit criteria explaining how it determines how 
spending in the demonstration program furthers Medicaid 
objectives.
    You also note their approval documents are not always clear 
on what expenditures are for, and how it will promote Medicaid 
objections--objectives. Can you talk about what recommendations 
have GAO made in this area that have not been accepted or 
implemented by HHS or CMS?
    Ms. Iritani. I will answer that question. Yes, we have made 
several recommendations to CMS around those issues that you 
point out. One is to issue criteria regarding how CMS assesses 
whether or not approved new spending under demonstrations will 
further objectives. A second is to apply that criteria in the 
documentation and make the documentation transparent. And a 
third relates to providing assurances in the documentation that 
approved spending will not duplicate other Federal funding 
sources. CMS agreed with the latter two and partially agreed 
with our recommendation to issue criteria on how they assess 
spending.
    Mr. Bilirakis. Have these recommendations been implemented, 
and then why not, Ms. Wachino?
    Ms. Wachino. We have implemented the GAO's recommendations 
with respect to ensuring our approval documents are clear with 
respect to the criteria we use, with ensuring that there is no 
duplication of Federal fundings, and ensuring that we are 
consistently and clearly articulating when we determine that a 
particular authority meets the objectives of the Medicaid 
program.
    We moved forward with that implementation, with 
implementing those policies while the report was still in 
draft, and so have worked very actively over the past several 
months to ensure that our approval documents are clear.
    Mr. Bilirakis. Ms. Yocom, what do you have to say about 
that? Do you agree?
    Ms. Yocom. I really have to defer to Ms. Iritani. She is 
the expert in this area from GAO.
    Mr. Bilirakis. Please.
    Ms. Iritani. We have not reviewed the changes that Ms. 
Wachino has said that they have made, so we would need to do 
that in order to see how they are documenting their approvals. 
That said we still feel strongly that there should be more 
transparent criteria for how they assess whether or not new 
spending will further Medicaid objectives.
    Mr. Bilirakis. OK. Please get back to our committee after a 
review of these objectives, OK? Please. I am sure most of the 
committee is interested in this, not all.
    Ms. Wachino, you probably know about Puerto Rico's 
financial challengers, which are rather severe, I am sure you 
will agree. A recent morning consult story highlighted the 
contrast in treatment that Puerto Rico receives under Federal 
healthcare programs. For example, Puerto Rico has a rather low 
spending cap on its program. Are you monitoring the rate at 
which Puerto Rico is spending its Medicaid funds, and do you 
worry it will exhaust those funds well before 2019?
    Ms. Wachino. We are looking very closely at the overall 
situation in Puerto Rico, including its Medicaid spending, very 
aware that there are a bunch of very strong concerns about the 
finances of Puerto Rico, and considering what approaches we 
might take. Last year, in approving some of their benefits, we 
offered flexibility, and they took us up on it, and--with 
respect to their administration, and we are continuing to look 
at the spending in the program, and options for assisting the 
Commonwealth.
    Mr. Bilirakis. In your estimation, will they exhaust the 
funds before 2019?
    Ms. Wachino. I would have to go back and look at that, 
Congressman, but I am happy to submit a response for the 
record.
    Mr. Bilirakis. Thank you. Ms. Wachino, CMS proposes to 
develop the Medicaid managed care quality rate system for 
managed care organizations in all States, which would 
presumably be similar to the Medicare Advantage five-star 
rating system. However, research shows that CMS' current start 
system undervalues care provided to beneficiaries with low 
socioeconomic status. This is an area of growing bipartisan 
concern. So how does CMS plan to address this issue, especially 
since all the Medicaid beneficiaries are presumably low-income?
    Ms. Wachino. Congressman, thank you for the question. Our 
proposal to implement the quality rating system is designed to 
make sure that low-income people are able to compare quality 
across plans and select plans in the same way that individuals 
in the private market and in Medicare Advantage can. We think 
that is a substantial advance in quality for our program, and 
an assist to our consumers.
    We do plan on--should we finalize the rule, which, as you 
know, is out for public comment now, we propose to have pretty 
lengthy implementation schedules, and a very substantial public 
input process so that we could identify the strengths of other 
quality rating systems, bring them to bear in ours, and make 
any needed adjustments that we need to to account, to your 
point, for the low-income nature of our populations, and the 
fact that our populations differ in some very important 
respects from those of Medicare and commercial insurers.
    Mr. Bilirakis. OK. Thank you very much, and I yield back, 
Madam Chair.
    Mrs. Ellmers. Thank you. The gentleman yields back. The 
Chair now recognizes the gentleman from California, Mr. 
Cardenas, for 5 minutes.
    Mr. Cardenas. Thank you very much, Madam Chairwoman. 
Appreciate the opportunity for us to dialogue with the 
witnesses. I just wanted to remind all of us that one of the 
main points of Medicaid was to eventually get to the point 
where we have protection or security against the economic 
effects of sickness for all Americans. In addition to that, 
President Truman, one of his statements included the line that 
talks about health security for all.
    On that note, as a result of the Affordable Care Act, our 
country currently holds the lowest rate of the uninsured in the 
history of this Nation. In 2014 alone Medicaid helped reduce 
the number of uninsured Americans from 43 million to 26 
million. Is that about right, Ms. Wachino?
    Ms. Wachino. I do know that we have made really--very 
substantial advances in reducing the uninsured rate, and it is 
an accomplishment we are very proud of.
    Mr. Cardenas. OK. Well, I would like you to take it back to 
all of the hard working folks within your department, to let 
them know how much not only do those 43, down to 26, Americans 
who now have health care appreciate all of your good hard work, 
but also at the same time that it is a vision that hopefully we 
can see in our lifetime, where we could see that 26 million go 
down to nothing. In addition to that, one of the things that I 
noticed, as a politician myself, is that many people try to use 
the word entitlement program as though it is a bad word. But 
yet, at the same time, I prefer to call it a safety net, which 
is a good thing, because it brings dignity, and actually saves 
lives for many Americans, especially hard working poor 
Americans.
    Speaking of the hard working poor, my first question goes 
to you, Dr. Schwartz. Thank you very much for your testimony 
today. One of the issues that is very important to my 
constituents is the availability of health care to all 
constituents in my district. But my district being 70 percent 
Latino, a disproportionate representation of uninsured is 
within the Latino community in my district, and around the 
country. And this is despite the fact that among these 
uninsured Latino households, 82 percent of those households are 
part of a hard working employed family.
    So we are not talking about people who choose not to work, 
we are talking about people who are the working poor, which 
it--which, in my opinion, is part of the backbone of what makes 
this country great, people willing to go to work every single 
day and be able to work for whatever meager means people are 
willing to pay them, yet at the same time they do it every 
single day, and then have to worry about whether or not 
somebody is going to get sick in their family, and if they are 
going to have a catastrophic change to their entire finances 
for maybe one or two generations to come.
    On that note, has MACPAC undertaken any work looking 
specifically at barriers to enrollment that may still exist in 
the Latino community?
    Dr. Schwartz. No, we haven't. We have done work looking at 
the experience of different minority communities in accessing 
services, and I believe Medicaid mirrors much of the rest of 
the health system in that different minority populations do 
experience higher barriers to care. And that is an area, as I 
said in my written statement, that we are interested in the 
experiences of groups within the Medicaid population, because 
they are so diverse, and how their different experience of care 
relate, and what policy solutions might be appropriate, given 
the different experiences.
    Mr. Cardenas. OK. Please keep in mind at all times that it 
is not just language barriers, cultural as well are some of the 
barriers out there.
    Ms. Wachino, what types of initiatives are underway to help 
ensure that we reach Latino and other minority communities 
where individuals may be eligible for coverage, particularly in 
the wake of Medicaid expansion?
    Ms. Wachino. Thank you for the question. I think we are 
very interested in making sure that Latino residents across the 
country get coverage. And, clearly, one way to do that is by 
taking up Medicaid expansion, as California has. We also are 
working actively to ensure that eligible Latinos, working 
families, I mean, the Latino community, enroll in coverage.
    And, frequently, that requires outreach and application 
support, so we work with programs like our navigator programs 
to make sure that people have support in applying for coverage, 
provide the information they need to to get an eligibility 
determination and enroll.
    Mr. Cardenas. OK. Thank you. Ms. Wachino, with over 25 
million low-income Americans nationwide who are unable to see a 
primary care physician, I believe telemedicine could provide an 
incredibly effective way to improve the healthcare system for 
everyone. Could you expand on the particular benefits for using 
telemedicine with dual eligibles who are unable to visit their 
doctor due to illness or immobility? And not just in rural 
areas, but also in higher populated areas as well.
    Ms. Wachino. We have moved forward with telemedicine in a 
number of states. It is an approach that a State can take to 
promote access to care without even seeking a State plan 
amendment from us. I can look at the particular use of 
telemedicine for the dual eligible population and circle back 
with you, and provide information for the record about 
specifics to that population.
    Mr. Cardenas. Thank you very much.
    Mrs. Ellmers. Thank you. The gentleman yields. The Chair 
now recognizes the gentlelady from Tennessee, Mrs. Blackburn, 
for 5 minutes.
    Mrs. Blackburn. Thank you, Madam Chairman, and I am going 
to make Mr. Pallone's day, because I am going to say TennCare, 
and talk about TennCare with you all. And I know you are very 
familiar with it, Ms. Wachino. There is a lot of frustration 
with that program, but embodied in that in part is frustration 
that some of the States who have been under the waivers for 
years, and doing the same thing for decades, have to keep 
coming back to you every 3 to 5 years for permission once 
again. So would it not make sense to start to grant the States 
a longer reprieve, and give them a longer path to certainty or 
permanence on these issues?
    Ms. Wachino. Thank you for the question, Congresswoman 
Blackburn. As you know, we work very actively with each State 
to try to develop----
    Mrs. Blackburn. This is a yes or no.
    Ms. Wachino [continuing]. For the State. We have been 
looking very actively, and I think Secretary Burwell spoke with 
the Governors about this in February, about streamlining our 
renewal process. It is very important----
    Mrs. Blackburn. OK, it is a yes or a no question.
    Ms. Wachino. I think that there are ways, and we are 
working on them now----
    Mrs. Blackburn. OK.
    Ms. Wachino [continuing]. To----
    Mrs. Blackburn. Thank you.
    Ms. Wachino [continuing]. Streamline----
    Mrs. Blackburn. Ms. Yocom----
    Ms. Wachino [continuing]. Renewals.
    Mrs. Blackburn [continuing]. You want to weigh in on that? 
No? OK. All right. Well, maybe you want to weigh in on this 
one. CMS has all these rules--and again, this comes from my 
guys at the State level--on transparency and required 
timeframes for the States when they are applying for their 
waivers, but then CMS doesn't hold themselves to this own 
standard, and sometimes it can take forever to get an answer 
from you. So should you not be held to the same standard that 
you are foisting on the States, to meet deadlines and timelines 
and to give some certainty?
    Ms. Wachino. Congresswoman, we are very committed to 
working with States quickly to evaluate waiver requests----
    Mrs. Blackburn. OK, let us pick up the pace, then.
    Ms. Wachino. May I----
    Mrs. Blackburn [continuing]. Yocom--no, ma'am. Ms. Yocom, 
you want to--or Ms. Iritani? Yes. I am just short on time. You 
can expand in----
    Ms. Wachino. I will.
    Mrs. Blackburn [continuing]. Form. Thank you. Ms. Iritani?
    Ms. Iritani. Yes, we have heard concerns from States about 
the lengthy time to get waivers----
    Mrs. Blackburn. Yes.
    Ms. Iritani [continuing]. Renewed and approved, and we have 
seen wide variation in approval times. You know, our concern is 
around the lack of standards and criteria, and we think that 
those would help bring more transparency----
    Mrs. Blackburn. So, to be more definitive, lay out a 
timeline, give the States some certainty, and maybe not make 
them come back every 3 to 5 years. That makes some sense, 
doesn't it?
    Ms. Iritani. We believe that there is more need for 
oversight----
    Mrs. Blackburn. OK.
    Ms. Iritani [continuing]. So there is the----
    Mrs. Blackburn. Let me go to a question on enrollment. 
States are required to enroll applicants who attest to being 
citizens, or to having legal immigration status, and then are 
thereby eligible for Medicaid. States receiving Federal 
matching funding for the care during this reasonable 
opportunity period. But, as a result, and I am hearing this 
from some of my State legislators, individuals who are not 
citizens or eligible permanent residents may be enrolled, and 
receiving Medicaid. So does CMS think it is appropriate for 
Federal taxpayer Medicaid dollars to be expended on individuals 
who are neither citizens nor eligible residents? Ms. Wachino?
    Ms. Wachino. Congresswoman, we think it is very important 
for us to make accurate eligibility determinations. When people 
apply for Medicaid coverage, they attest to their citizenship. 
We verify that electronically through the hub, which is a major 
advance for us in making accurate eligibility determinations. 
If someone is not able----
    Mrs. Blackburn. OK.
    Ms. Wachino [continuing]. To----
    Mrs. Blackburn. Then let me ask you this. Should we not 
withhold those benefits until such time as their--certainty and 
a verification process is completed?
    Ms. Wachino. Congresswoman, the--under the statute, 
individuals have a reasonable opportunity----
    Mrs. Blackburn. OK.
    Ms. Wachino [continuing]. Period. They attest to 
citizenship, and then we, during that period, verify it.
    Mrs. Blackburn. OK.
    Ms. Wachino. If they are found to be ineligible, they are 
determined ineligible.
    Mrs. Blackburn. OK. Let us look at billing privileges. And 
Obamacare explicitly requires that States suspend the billing 
privileges of most providers that have been terminated or 
revoked by another State, or by Medicare. However, more than 5 
years after enactment, banned providers are still receiving 
many of these Medicaid payments. So what steps is CMS taking to 
ensure, once again, that taxpayer dollars are not going to 
those that are prohibited, should be prohibited, from receiving 
this money? And are you taking steps to recoup Federal dollars 
paid to prohibited providers by State Medicaid programs?
    And, in the same vein, how are you dealing--how does CMS 
deal with companies that have been found guilty of fraud and 
should not be receiving taxpayer dollars, but they go out and 
they sell themselves so they can be renamed, and still get 
taxpayer dollars? I would like to hear from you on this, and, 
Ms. Yocom, I would also like to--Ms. Yocom, let us start with 
you, as a matter of fact.
    Ms. Yocom. Certainly. We have done work in this area, and 
we did identify, in terms of providers, issues where 
individuals who did have suspended or revoked licenses were 
receiving payments. We also have identified some providers who 
are dead who are receiving payments.
    Mrs. Blackburn. And erroneous payments amounted to how much 
last year?
    Ms. Yocom. I would have to get back----
    Mrs. Blackburn. OK.
    Ms. Yocom [continuing]. With you on that. Yes.
    Mrs. Blackburn. OK.
    Ms. Yocom. Yes.
    Mrs. Blackburn. OK. Ms. Wachino, you want to comment on 
that?
    Ms. Wachino. Yes, Congresswoman. It is very important to us 
that we ensure that the providers serving Medicaid 
beneficiaries are appropriate, both so that they get the care 
they need, and so that we are ensuring----
    Mrs. Blackburn. That is not the question that I have asked 
you. I have asked you what you are doing about it. So why don't 
you submit for the committee an answer about what you are doing 
about erroneous payments, and what you are doing about 
providers that are not eligible getting this money. I yield 
back my time.
    Mr. Green. Madam Chair, can I just have 30 seconds? Ms. 
Wachino, I understand that under law that--and California is 
the only State that expanded Medicaid to undocumented children, 
and--but they don't get the Federal match. Is that true? If it 
is a State decision?
    Ms. Wachino. I am not familiar with the particular 
circumstances in California, but Medicaid generally does not 
provide comprehensive coverage for immigrants. There is a 
limited provision for emergency care only.
    Mr. Green. OK. Thank you.
    Mrs. Ellmers. I would just ask that you provide us with the 
accurate documented material----
    Ms. Wachino. I will happy to do that----
    Mrs. Ellmers [continuing]. To the committee, since this 
issue has been raised. Thank you.
    Ms. Wachino. I will happy to do that for the record, as 
well as to respond to----
    Mrs. Ellmers. Thank you.
    Ms. Wachino [continuing]. Ms. Blackburn's question----
    Mrs. Ellmers. Thank you.
    Ms. Wachino [continuing]. About provider enrollment.
    Mrs. Ellmers. Thank you. The Chair now recognizes Mr. 
Pallone from New Jersey for 5 minutes, the ranking member of 
our committee.
    Mr. Pallone. Thank you, Madam Chairwoman. I was going to 
ask unanimous consent to include in the record two new health 
affair studies that just came out that found evidence that 
Medicaid expansion has made patients' and hospitals' bottom 
lines healthier. I think you have copies of them.
    Mrs. Ellmers. We have not had a chance to review that, so I 
reserve----
    Mr. Pallone. Let me hand them over to you, then, take a 
look.
    Mrs. Ellmers. We will consider at a later date, before the 
hearing adjourns.
    Mr. Pallone. OK, thanks. I was going to say to Ms. 
Blackburn that I hadn't--she left, but that I hadn't heard 
about TennCare so often that I actually forgot about it, but 
she brought it up again, but she is not here, so, sorry.
    All of our witnesses here today have an important and 
different perspective to share about Medicaid and its 50th 
anniversary. I wanted to ask first, Ms. Wachino, as we reflect 
on Medicaid's 50th year, what do you see as the most 
significant changes to the program from the standpoint of low-
income consumers?
    Ms. Wachino. Well, Medicaid has grown and evolved over 
time. I think some of the biggest change--we have seen over 
time its role expand for a variety of populations: coverage of 
pregnant women to ensure access to strong prenatal care and 
promote lower rates of infant mortality, expansions to coverage 
of people with chronic conditions, like HIV.
    I think if I had to choose two developments just to single 
out, the first would be the coverage of low-income children, 
that I know was led out of this committee, through both 
Medicaid expansions, and later CHIP, which really built on 
that. And if you look at the record on the impact of that 
coverage, it has clearly been a critical support for low-income 
families through thick economic times and thin.
    The second would be the coverage expansion for Medicaid to 
low-income adults under the Affordable Care Act, which I think 
really solidifies Medicaid's role as the base for a strong 
system of health coverage in the United States. And I think, as 
we work with more States to implement it, we will see that base 
firmly solidified.
    Mr. Pallone. Thank you. And then, Dr. Schwartz, MACPAC was 
formed fairly recently, but the Commissioners and MACPAC staff 
have already proven to be an invaluable resource to both sides 
of the aisle. What, in your opinion, have been some of 
Medicaid's greatest advancements?
    Dr. Schwartz. I think, to follow up on Ms. Wachino's 
comments, the program has really transformed over its lifetime 
from a program that provided medical care to a very small group 
of low-income families who were receiving cash assistance to a 
much larger program that takes a much more proactive role in 
delivery system design, in payment initiatives to improve the 
delivery of care to a broader set of populations: children, 
pregnant women, adults, and, of course, people with 
disabilities.
    I think the other is the very significant shift in the 
delivery of long-term care from institutions into homes and 
communities, allowing people with disabilities to remain in 
their homes and active in their communities.
    Mr. Pallone. Thank you. Could I just ask, Ms. Wachino, if 
you would take--I have just got about a minute and 20 seconds 
of my time. Could you just talk about CMS' work over the last 5 
years on program integrity as a result of the Affordable Care 
Act tools?
    Ms. Wachino. Yes. We take our program responsibilities very 
seriously. I participate in them. They are led out of our 
Center for Program Integrity, but we work in concert. We have 
worked actively over the last 5 years on a comprehensive 
Medicaid integrity plan. We have worked to do program integrity 
reviews of each State, because program integrity in Medicaid is 
a shared State and Federal effort. We both have 
responsibilities.
    But one of the most tangible things we have done is improve 
the process of ensuring that high risk providers do not enter 
into our programs. We have employed and worked with States on 
high risk provider screening, and we have given States access 
to the same data to screen out providers that Medicare uses. So 
I think we have made very substantial advances. I think some of 
the data you heard about earlier is from 2011, and predates 
some of our recent accomplishments.
    Mr. Pallone. All right. Thank you very much. Thank you, 
Madam Chairwoman.
    Mrs. Ellmers. Thank you to the ranking member, and, without 
objection, the documents that you provided will be submitted 
into the record.
    [The information appears at the conclusion of the hearing.]
    Mrs. Ellmers. The Chair now recognizes myself for 5 
minutes. Thank you to our panel for being here. Ms. Wachino, in 
the most recent actuarial report on the financial outlook for 
Medicaid, CMS reports that the projected annual growth rate for 
Medicaid expenditures is faster than the projection of annual 
GDP growth. The actuary noted that, ``should these trends 
continue as projected under current law, Medicaid's share of 
both Federal and State budgets would continue to expand, 
despite any other changes to the program, budget expenditures, 
or budget revenues.''
    As a representative from a State that has not expanded 
Medicaid, in North Carolina, I have two questions. Given that 
this would crowd out other important fiscal priorities for both 
State and Federal Government, don't you think that there are 
changes that need to be made to the program to alter this 
current trend?
    Ms. Wachino. Congresswoman Ellmers, thank you for the 
question. We have worked very actively to ensure that the 
program is on a sound fiscal footing----
    Mrs. Ellmers. Um-hum.
    Ms. Wachino [continuing]. Generally, and, you know, with 
respect to expansion in particular. I think we have put in 
commonsense reforms to ensure accountability of funds through--
--
    Mrs. Ellmers. Um-hum.
    Ms. Wachino [continuing]. Activities like reviewing our 
rates and ensuring that we are not overpaying for services. I 
think, in addition to that, you see from the administration 
proposals like changes to the drug rebate that are designed to 
ensure that some of the major cost drivers in our program are 
addressed. So I think we can work, and we do work, and we look 
forward to working with you for really----
    Mrs. Ellmers. Um-hum.
    Ms. Wachino [continuing]. Putting the program on a sound 
fiscal footing.
    Mrs. Ellmers. Well, thank you for that. I would like to 
ask, have these changes, or proposed changes, resulted in any 
decreases in spending up to this point?
    Ms. Wachino. We do know in some States that have embarked 
on delivery system reform that there have been reductions in 
things like hospitalizations----
    Mrs. Ellmers. Um-hum.
    Ms. Wachino [continuing]. That have resulted in cost 
savings. There are a couple of----
    Mrs. Ellmers. How many States would you say that is?
    Ms. Wachino. I think I can give you some State examples. 
The actual models used by States vary. States have significant 
flexibility in using things like health homes, the way----
    Mrs. Ellmers. Um-hum.
    Ms. Wachino [continuing]. Missouri did----
    Mrs. Ellmers. Um-hum.
    Ms. Wachino [continuing]. Where they saw improvements in 
clinical outcomes and reductions in costs.
    Mrs. Ellmers. OK.
    Ms. Wachino. So I can give you the examples of models that 
have worked.
    Mrs. Ellmers. OK. Ms. Yocom, would you like to expand on 
that as well, or comment on the same from your perspective?
    Ms. Yocom. Well, our work has focused primarily on areas 
where transparency and better data are important.
    Mrs. Ellmers. Um-hum.
    Ms. Yocom. I think some of CMS' challenges are around not 
having accurate information with which to gauge the success of 
the program, and to gauge--to fine tune--where improvements 
need to be made.
    Mrs. Ellmers. Um-hum. So you see an effort for more 
transparency and more efficiency and accuracy to be moving 
forward?
    Ms. Yocom. I think we have seen progress, particularly in 
efforts to control----
    Mrs. Ellmers. Um-hum.
    Ms. Yocom [continuing]. Improper payments. There----
    Mrs. Ellmers. So you have seen progress in that area?
    Ms. Yocom. Right.
    Mrs. Ellmers. OK. Great. Ms. Wachino, CMS authorized 
Federal Medicaid funding in five States for more than 150 State 
programs. Based on their names, many of these programs appear 
to be fully worthwhile causes. However, it is difficult to see 
how other funded programs promote Medicaid objectives. Let me 
ask just a few questions. There are a couple States--and I 
asked Ms. Iritani, when she was with us a couple of days ago--
one of these issues, the licensing fees for Oregon, how does 
that affect patient care in regard to Medicaid? Do you see that 
as a worthwhile funding issue?
    Ms. Wachino. Congresswoman, it is really important to us 
that we ensure that the spending we authorize promotes Medicaid 
objectives. As I had the opportunity to speak to earlier this 
morning, we have fully responded to many of GAO's 
recommendations, in terms of wanting to be very clear and 
straightforward in our approval documents when we determine 
that a program supports Medicaid objectives. I can't speak to 
the particulars of every program, but I do know that my staff 
has provided to the committee extensive detail on the programs 
we----
    Mrs. Ellmers. OK. Well, then, what I will just say, the 
licensing fees in Oregon, the fishermen's partnership in 
Massachusetts, and the health workforce retaining in New York, 
if I can get a response on how those actually are effective 
measures, that would be great, and I would appreciate it in 
writing. Thank you.
    Ms. Wachino. I would be happy to do----
    Mrs. Ellmers. And I will yield back, and I now recognize 
Ms. Schakowsky from Illinois for 5 minutes.
    Ms. Schakowsky. [Inaudible.]
    Ms. Wachino. Yes, thank you for the question. As you spoke 
to, Medicaid is the Nation's leading source of financing for 
long-term care in the country. We pay for 64 percent of all 
nursing home residents in the United States, and we work very 
actively with States to ensure the quality of nursing home 
care. Because these are, as you know, very frail--some of the 
Nation's frailest residents and citizens, people who could have 
limited mobility, and a lot of complex health needs. We are 
working not just to ensure quality nursing home care, but also 
ensuring that people, whenever they are able to, are able to be 
cared for at homes and in their communities, to really remain 
active participants in their communities.
    Ms. Schakowsky. I wanted to ask about that. One of the most 
important elements of long-term care has been community-based 
care, and that does allow many elderly and disabled to remain 
in their home, or in assisted living facilities, rather than in 
institutions. In recent years CMS has worked to reduce its 
reliance on institutional care and transition individuals to 
community living. In fact, as you have mentioned earlier today, 
51 percent of long-term care spending under Medicaid is spent 
on community-based services, compared to 10 years ago, when 
community-based services only made up 33 percent of spending.
    So why is it important, as you just said earlier, it--that 
community-based care be available to Medicaid beneficiaries?
    Ms. Wachino. We hear consistently from beneficiaries that 
they want to remain in their communities, they want to remain 
active, and they want to remain with their families as much as 
possible. And we are lucky to have a number of tools in the 
Medicaid program to help support that. Things like home and 
community-based waivers, and giving beneficiaries the ability 
to self-direct their care, to hire their direct service 
workers, and to fire their direct care service workers if they 
are not happy. And if you look across the States, we see nearly 
every State is moving forward with some option.
    But the proof is in the pudding, as you say, and seeing the 
equalization of spending on institutional care versus home, 
community-based care is a very major advance in modernization 
in our program, and we are going to keep at it, and move the 
needle further.
    Ms. Schakowsky. All right. And, finally, as you mentioned 
in your testimony, since the beginning of ACA's first 
enrollment period, 12.3 million people have gained coverage 
through Medicaid or CHIP. According to The Urban Institute, the 
current uninsured rate nationwide for nonelderly adults is 10 
percent down--10 percent, which is down from 17.8 percent, 
before the implementation of the ACA. Even more impressive, 
States have expanded Medicaid--that have expanded Medicaid have 
an uninsured rate of 7.5 percent compared to 14.4 percent in 
States that have not expanded Medicaid. Can you explain how 
Medicaid expansion helped to drastically reduce the uninsured 
rate?
    Ms. Wachino. Well, I think we know that many low-income 
Americans fall into the coverage gap that is created when 
States have expanded Medicaid, and one of the things that we 
can do as a country to make further advances in covering the 
uninsured, and to see even progress beyond what you have just 
described is to work with States on Medicaid expansion. And we 
are very committed to working with every State to finding an 
approach that provides its lowest-income citizens access to 
needed health care so we could start improving their quality, 
and so that those people can benefit.
    Ms. Schakowsky. It seems to me the Medicaid expansion, 
because it was so public, also helped other enrollment, that 
people became more aware of Medicaid, so I think it even went 
beyond the new population.
    Ms. Wachino. That is right. The benefits of expansion go 
beyond the newly eligible population because States that cover 
Medicaid expansion are able to convey a clear message to their 
lowest-income residents that you are eligible for coverage. And 
we know that when there is that message, eligible people come 
and enroll, and get the health care they need.
    Ms. Schakowsky. Thank you so much. I yield back.
    Mrs. Ellmers. The gentlelady yields back. And, with that, I 
think we are finishing up. I would like to thank our panel for 
being with us today. I would like to remind members that they 
have 10 business days to submit questions for the record. And I 
will say to the panel, I know there are some very, very 
specific questions that members are going to be proposing in 
written form, and we would very much like to have very specific 
answers to these questions. You know, as we are addressing 
Medicaid and Medicare issues, we have to remember that these 
are taxpayer dollars that we are spending, and so we need very 
specific answers on those questions, and in a prompt fashion, 
if you can accommodate us on that.
    I would like to also say members should submit their 
questions by the close of business Wednesday, July 22. And, 
again, thank you very much for being with us today, and to 
everyone who was here for the hearing. And I call this 
subcommittee hearing adjourned.
    [Whereupon, at 12:33 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

              Prepared statement of Hon. G.K. Butterfield

    Chairman Pitts, thank you for holding this hearing to 
commemorate the 50th anniversary of Medicaid and to discuss 
improving health care for vulnerable populations. More than one 
out of every four people in the eastern North Carolina district 
I represent live in poverty--it is one of the poorest 
Congressional districts in the country. Even more alarming is 
the fact that more than 40 percent of the children in North 
Carolina's First District live in poverty. Medicaid is 
absolutely critical to my constituents. It is especially 
important to children, since 75 percent of children who live in 
poverty in this country depend on Medicaid. The benefits of 
Medicaid cannot be overstated--more than 71 million Americans 
rely on this program.
    Democrats on this committee have done our part to 
strengthen Medicaid for millions of Americans. Many of us here 
today helped author the Affordable Care Act, which has helped 
reduce the number of uninsured Americans by 17 million due in 
large part to Federal support to expand Medicaid.
    But many States--like my home of North Carolina--have 
declined to expand Medicaid. According to the North Carolina 
Justice Center, an additional 500,000 North Carolinians would 
be eligible for Medicaid if our Governor would expand the 
program. My State's Governor has blocked more than $2.7 billion 
in Federal funds that North Carolinians have paid taxes for and 
rightly deserve. In fact, the North Carolina Justice Center 
estimates that 43,000 jobs would be created in 5 years if our 
State would expand Medicaid.
    The ACA represents the largest step forward for Medicaid 
since the program's inception. Improved transparency, 
additional safeguards against fraud and abuse, and delivery 
system reforms have benefitted constituents and saved money. 
But our work is far from done. I will continue to fight to 
expand Medicaid in each and every State.


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    Ms. Wachino's response to submitted questions for the 
record has been retained in committee files and also is 
available at  
http://docs.house.gov/meetings/IF/IF14/20150708/103717/HHRG-114-IF14-Wstate-WachinoV-20150708-SD002.pdf.


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