[Senate Hearing 114-156]
[From the U.S. Government Publishing Office]
S. Hrg. 114-156
PRESIDENT'S FISCAL YEAR 2016
HEALTH CARE PROPOSALS
=======================================================================
HEARING
before the
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 4, 2015
__________
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COMMITTEE ON FINANCE
ORRIN G. HATCH, Utah, Chairman
CHUCK GRASSLEY, Iowa RON WYDEN, Oregon
MIKE CRAPO, Idaho CHARLES E. SCHUMER, New York
PAT ROBERTS, Kansas DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming MARIA CANTWELL, Washington
JOHN CORNYN, Texas BILL NELSON, Florida
JOHN THUNE, South Dakota ROBERT MENENDEZ, New Jersey
RICHARD BURR, North Carolina THOMAS R. CARPER, Delaware
JOHNNY ISAKSON, Georgia BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania MICHAEL F. BENNET, Colorado
DANIEL COATS, Indiana ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada MARK R. WARNER, Virginia
TIM SCOTT, South Carolina
Chris Campbell, Staff Director
Joshua Sheinkman, Democratic Staff Director
(ii)
C O N T E N T S
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OPENING STATEMENTS
Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman,
Committee on Finance........................................... 1
Wyden, Hon. Ron, a U.S. Senator from Oregon...................... 3
ADMINISTRATION WITNESS
Burwell, Hon. Sylvia Mathews, Secretary, Department of Health and
Human Services, Washington, DC................................. 6
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Brown, Hon. Sherrod:
Letters from State Governors in support of the CHIP Program.. 51
Burwell, Hon. Sylvia Mathews:
Testimony.................................................... 6
Prepared statement........................................... 171
Responses to questions from committee members................ 177
Cantwell, Hon. Maria:
``U.S. to Overhaul Medicare Payments to Doctors, Hospitals,''
by Alexander Wayne, Bloomberg, January 26, 2015............ 256
Hatch, Hon. Orrin G.:
Opening statement............................................ 1
Prepared statement........................................... 257
Wyden, Hon. Ron:
Opening statement............................................ 3
Prepared statement........................................... 259
Communication
Association for Community Affiliated Plans (ACAP)................ 261
(iii)
PRESIDENT'S FISCAL YEAR 2016
HEALTH CARE PROPOSALS
----------
WEDNESDAY, FEBRUARY 4, 2015
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 10:04
a.m., in room SD-215, Dirksen Senate Office Building, Hon.
Orrin G. Hatch (chairman of the committee) presiding.
Present: Senators Grassley, Crapo, Roberts, Cornyn, Thune,
Burr, Isakson, Portman, Toomey, Coats, Heller, Scott, Wyden,
Schumer, Stabenow, Cantwell, Nelson, Menendez, Carper, Cardin,
Brown, Bennet, Casey, and Warner.
Also present: Republican Staff: Chris Campbell, Staff
Director; Kimberly Brandt, Chief Healthcare Investigative
Counsel; and Jay Khosla, Chief Health Counsel and Policy
Director. Democratic Staff: Joshua Sheinkman, Staff Director;
Jocelyn Moore, Deputy Staff Director; Michael Evans, General
Counsel; Laura Berntsen, Senior Advisor for Health and Human
Services; Elizabeth Jurinka, Chief Health Advisor; Matt Kazan,
Health Policy Advisor; and Juan Machado, Professional Staff
Member.
OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM
UTAH, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. The committee will come to order.
Good morning. It is a pleasure to welcome everyone to
today's hearing on the fiscal year 2016 budget for the
Department of Health and Human Services, HHS.
I want to thank you, Secretary Burwell, for being here with
us today. This is your first hearing before the committee since
being confirmed, so welcome back in your official capacity. I
told you when we were talking at your confirmation hearing that
the job you now have would be a thankless one and that you were
undertaking an enormous responsibility. At that time we also
discussed three main areas that I encouraged you to focus on
during your time at HHS: responsiveness, accountability, and
independence.
I would like to talk more about each of these areas today.
Let us start with responsiveness. During your confirmation
hearing, I raised the importance of being responsive to
Congress, and to this committee in particular. You assured me
that this would be a top priority of yours as well and that
under your watch we would see a marked improvement.
In the past year, this committee has written at least 20
letters to HHS or CMS, asking questions about serious issues
such as fraud prevention, hacking of the HealthCare.gov
website, Medicaid expansion, and many others.
I understand that we have now received answers to nearly
every one of those outstanding letters just in time for your
appearance here today, with the last two responses coming just
last week. This is a great improvement over what it has been in
the past, and I appreciate the efforts being made to provide
these answers to us.
However, I hope that it will not require calling you to
testify before the committee to ensure more timely responses
going forward. If it does, then I suppose we will have to look
forward to seeing you for a hearing every 30 to 60 days, and
you do not want that. And they get worse over time! [Laughter.]
Thank you for continuing to make this a priority. Good
communication between HHS and this committee is paramount to a
good working relationship, and you understand that, I know
that.
Now, let us talk about accountability. One of the big
issues we discussed at your confirmation hearing was the
absolute need for fiscal accountability given the huge breadth
and scope of HHS's programs and budget. Overseeing them
requires constant vigilance and effective management.
When looking at the size of the budget for HHS for this
coming fiscal year, we see just how big your job really is. In
fact, the expression ``too big to fail'' does not really apply
here, as the HHS budget is so big one would argue that it is
destined to fail.
The HHS budget for fiscal year 2016 is just over a trillion
dollars. In real terms, if HHS were a country and its budget
was its GDP, it would be the 16th-largest economy in the whole
world. I think you have that chart over there that shows, where
the red arrow is, you would be the 16th-largest economy in the
world.
To put it in a more American context, the total budget of
HHS is more than double that of Walmart and five times more
than Apple. My concern is that the savings and efficiencies in
the overall HHS budget are very small when compared to the
overall spending. The President's proposed budget would save
just under $250 billion over the next decade, which sounds like
a lot, but that is only 3.8 percent of total Medicare and
Medicaid spending.
More accountability is critical here to ensure that these
programs have sufficient resources to continue to provide
benefits for years to come. On the policy front, the
administration needs to be up-front with Congress about their
contingency plans if the King v. Burwell case is not decided in
its favor.
Depending upon what happens in the Supreme Court in late
June, HHS could have to figure out how to provide services for
millions of Americans who are currently receiving tax subsidies
that enable them to pay for health insurance. I can only assume
that the agency has a plan in place for dealing with this
possibility. Now, Secretary Burwell, I hope you will share that
with us today.
That brings me to independence. For some time now, I have
been concerned about the amount of influence HHS and the
administration have over the operations and policies impacting
the entitlement programs, certainly those run by CMS.
The budget released this week indicates that spending on
just Medicare and Medicaid is expected to exceed $11 trillion
over the next decade. In fact, CMS accounts for 35 percent of
the total HHS budget. These are astonishing numbers. They also
reinforce for me something that I have long believed.
It is time to start talking about making CMS an independent
agency apart from HHS. Nearly 20 years ago, Congress passed,
and the President signed into law, the Social Security
Independence and Program Improvements Act of 1994. That law
separated the Social Security Administration from HHS and made
it an independent agency.
At that time, SSA was the largest operating division within
HHS and accounted for about 51 percent of HHS's total staff,
and more than half of HHS's total annual budget. Now, I intend
to introduce legislation to move CMS out of HHS. Whether or not
CMS becomes an independent agency is something to consider
going forward, but the accountability and transparency problems
we currently see in CMS programs cannot wait.
I hope that we can work together in the coming months on
both the Affordable Care Act and entitlement issues to create
situations and solutions that work for all Americans.
Finally, I want to note that, while there is much in the
President's budget with which I disagree, there are areas where
I think we can find common ground. For example, I appreciate
the provision in the budget that addresses the issue of over-
reliance on congregate care facilities or group homes for
children and youth in foster care. For years I have been
working to call attention to the deplorable conditions in many
of these group homes.
Recent research indicates that these group homes are
unsafe, expensive, and too often contribute to profoundly
negative outcomes for the children and youth who are placed in
them. So I look forward to working with the administration to
end the over-reliance on group homes.
Secretary Burwell, I look forward to your testimony today
and to working with you to ensure that our most vulnerable
citizens get the care they deserve. And I do appreciate how
difficult your job is and appreciate the openness with which
you have considered it with Senator Wyden, myself, and others
on this committee.
[The prepared statement of Chairman Hatch appears in the
appendix.]
The Chairman. Senator Wyden?
OPENING STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
Senator Wyden. Thank you, Mr. Chairman.
Secretary Burwell, let me start by saying that my
assessment is that you have set a new bar for Cabinet
Secretaries in terms of reaching out and trying to be
responsive. I hear about it with respect to citizens.
Apparently, you are in virtually every corner of the country
and taking your family. I can only imagine the challenge of
that.
You are getting back to Senators. I hear Senators of both
political parties, conservative, liberal, saying the Secretary
actually got back to me. I mean, it is such a quaint idea that
somebody would actually do that. Also, I understand you have
discussions either coming or already begun with Governors. My
sense is that you have really set a new bar in terms of
reaching out, and it is obviously very, very welcome.
Now, too many people in America, including millions in our
country and in my home State, feel like they are falling
behind. They just feel like, as the economy picks up steam,
they are not getting ahead. It is our job to make sure that
does not happen, and the Finance Committee has played a big
role in this. It is almost like we are having a triple header
this week. We had Mr. Koskinen in yesterday, you, and then
Secretary Lew tomorrow.
The budget obviously articulates the priorities of today,
but it also talks a lot about what our priorities are for the
future, and we are looking forward to having you lay out how
the proposal would strengthen Health and Human Services
programs, promote economic mobility, and assist our middle-
class families.
I do want to take a minute just to talk about where I
believe American health care has been, and then talk briefly
about where it is going. This year marks the 50th anniversary
of Medicare and Medicaid, and a lot has taken place since those
programs were created. The Congress came together to create the
CHIP program, the program, of course, for children, and it has
reauthorized it three times. The Congress has improved and
expanded Medicare and Medicaid.
The Affordable Care Act makes access to high-quality care
wider than ever. What I think is particularly important is, it
has signaled that America is not willing to go back to the days
when health care was for the healthy and wealthy. That is the
way it was when you could go out and clobber the people with a
preexisting condition.
Obviously, the job is not done, and so there is a twofold
challenge, in my view: first, protect the progress that has
been made, and second, clear the way for more progress in the
future. For Medicare, that means guaranteeing that the
program's benefits fully meet the needs of this era's seniors,
and the demands on Medicare are clearly very different than
they were 50 years ago.
The big-ticket Medicare costs of 2015 are no longer things
like kidney stones and broken ankles. They are chronic
conditions like cancer, diabetes, and Alzheimer's, and those
conditions are tougher and they are more costly to treat.
The HHS budget, in my view, begins to acknowledge that
reality, but clearly there is a lot more to do. Treating
chronic disease, in my view, is the future of the Medicare
program. So what is needed is a road map to efficient and
effective care for chronic disease that boldly moves away from
the outdated fee-for-service model. Patients and providers told
this committee last summer about the need to address chronic
care in a different way. There is bipartisan support for this
in Congress, and I look forward to working with you and the
administration to make that a reality.
Now, I was also thinking about the announcement last week
about precision medicine, because this too helps to provide
something of a road map for the future. Medical professionals
understand that a treatment will often affect Susan in a
different way than it affects George. And with the right
research, it is going to be possible to learn what drives those
differences and how to tailor treatments to fit an individual
patient's needs.
The precision medicine initiative that is in the
President's budget follows an innovative test program that was
really created in this committee. It was part of our
discussions. I do not see Senator Carper here. He has been very
interested in that issue. But we have another big challenge,
and the next step will be to design a payment system for this
innovative field, precision medicine, that can do so much in
the future for patients and for taxpayers.
The President's budget proposal also continues progress
made by the Affordable Care Act to reward the quality of care
rather than the quantity. The Congress can do even more by
passing bipartisan, bicameral legislation to improve the way
Medicare pays physicians, and Chairman Hatch obviously had a
lot to do with putting that proposal together.
The President's proposal also takes a vital step by
including 4 years of funding for CHIP. There are more than 10
million kids in America who get health insurance through CHIP,
including more than 75,000 in Oregon. A child who starts life
with quality health insurance has a better shot at a successful
middle-class life than a child who does not. Renewing CHIP, in
my view, is a no-brainer. Families and State agencies across
the country are waiting for the Congress to step up and act on
CHIP.
There are also steps that Congress can take to help
guarantee that our health programs remain strong for
generations to come. They are lifelines for countless
Americans, and, as a result, millions of families will never
have to choose between paying for a loved one's care and
sending kids to college. Millions of Americans will grow up
with access to quality care that keeps them healthy and out of
the emergency rooms whenever possible.
Of course it is important to remember that the Department
of Health and Human Services does a lot more than oversee
Medicare, Medicaid, and CHIP. No department plays a bigger role
in America's safety net. This committee has a long history of
working on a bipartisan basis on policies to strengthen our
Federal child welfare programs for vulnerable kids.
Just 5 months ago, the Congress enacted the Preventing Sex
Trafficking and Strengthening Families Act. The Department is
helping turn this bill from a piece of paper signed by the
President into new tools that will help States move more
vulnerable kids out of harm's way and into safer and permanent
homes.
The President's budget proposal shows that it is possible
to build on this momentum by expanding programs that keep kids
and families together and healthy, with a special focus on
getting involved early with vulnerable families. This includes
programs like home visiting, which is especially important for
first-time parents.
So, in effect, we are talking about multi-generational
supports, and those can prevent the long-term costs associated
with homelessness, abuse, neglect, and foster care. So we are
talking about the people who are trying to get ahead in a tough
economy and have just not seen the recovery make it to their
neighborhood.
Thank you for joining us here today. We have a lot of
opportunities, in my view, for working in a bipartisan fashion,
and I will have some questions, but I do want to wrap this up
by saying that, having been in public life and having worked
with a number of Secretaries, I think, at the end of the day,
there can be big differences of opinion. But the only way you
really make progress is by reaching out, and you have surely
met that test. Thank you. I look forward to working with you.
Thank you, Chairman Hatch.
The Chairman. Well, thank you, Senator.
[The prepared statement of Senator Wyden appears in the
appendix.]
The Chairman. Our witness today is Department of Health and
Human Services Secretary Sylvia Mathews Burwell. Secretary
Burwell has been leading the Department of Health and Human
Services since June of 2014. Ms. Burwell has a long history of
public-sector service, including most recently serving as
Director of the Office of Management and Budget under President
Obama.
In the Clinton administration, Ms. Burwell served as Deputy
Director of OMB, Deputy Chief of Staff to the President, Chief
of Staff to the Treasury Secretary, and Staff Director at the
National Economic Council, all of which are very important
positions. She also has extensive private-sector experience,
including serving as the president of the Walmart Foundation,
and before that as the president of the Global Development
Program at the Bill and Melinda Gates Foundation.
Ms. Burwell received her AB from Harvard University and a
BA from Oxford University, where she was a Rhodes Scholar. So
we are honored to have you here and want to thank you for being
here today. You can proceed with your opening statement.
STATEMENT OF HON. SYLVIA MATHEWS BURWELL, SECRETARY, DEPARTMENT
OF HEALTH AND HUMAN SERVICES, WASHINGTON, DC
Secretary Burwell. Thank you. Thank you, Chairman Hatch,
Ranking Member Wyden, and members of the committee, for having
me here today. I want to thank you for the opportunity to
discuss the President's budget for Health and Human Services.
I believe firmly that we all share common interests, and
therefore we have a number of opportunities to find common
ground, from preventing and treating substance abuse, to
advancing the promise of precision medicine, to building an
innovation economy and strengthening the American middle class.
The budget before you makes critical investments in health
care, science, innovation, and human services. It maintains our
responsible stewardship of the taxpayer dollar. It strengthens
our work, together with the Congress, to prepare our Nation for
key challenges at home and abroad.
For HHS, it proposes $83.8 billion in discretionary budget
authority, and this is a $4.8-billion increase that will allow
our Department to deliver impact today and lay a strong
foundation for our Nation for tomorrow. It is a fiscally
responsible budget which, in tandem with accompanying
legislative proposals, would save taxpayers an estimated $250
billion over the next decade.
In addition, it is projected to continue slowing the growth
in Medicare. It could secure $423 billion in Medicare savings
as we build a better, smarter health delivery system. In terms
of providing all Americans with access to quality, affordable
health care, it builds upon our historic progress in reducing
the number of uninsured and improving coverage for families who
already had insurance. It extends CHIP for 4 years, it covers
newly eligible adults in the 28 States plus DC that have
expanded Medicaid, and it improves access to health care for
Native Americans.
To support communities throughout the country, including
under-served communities, it invests $4.2 billion in health
centers and $14.2 billion to bolster our Nation's health care
workforce. It supports more than 15,000 National Health Service
Corps clinicians, serving nearly 60 million patients in high-
need areas. With the funding streams ending in 2016, millions
stand to lose primary care services and providers if we are not
able to take action.
To advance our common interest in building a better,
smarter, and healthier delivery system, it supports
improvements to the way care is delivered, providers are paid,
and information is distributed. On an issue for which there is
bipartisan agreement, it replaces Medicare's flawed Sustainable
Growth Rate formula and supports a long-term policy solution to
fix the SGR.
The administration supports the type of bipartisan,
bicameral efforts the Congress undertook last year. To advance
our shared vision for leading the world in science and
innovation, it increases funding for NIH by $1 billion to
advance biomedical research and behavioral research, among
other priorities.
In addition, it invests $215 million for the Precision
Medicine Initiative, a new cross-departmental effort focused on
developing treatments, diagnostics, and preventative strategies
tailored to the individual genetic characteristics of
individual patients.
To further our common interests in providing Americans with
the building blocks of healthy and productive lives, this
budget outlines an ambitious plan to make affordable, quality
child care available to working and middle-class families with
young children. It supports evidence-based interventions to
protect youth in foster care, and it invests to help older
Americans live with dignity in their homes and communities, and
to protect them from identity theft.
To keep Americans healthy, the budget strengthens our
public health infrastructure, with $975 million for domestic
and international preparedness, including critical funds to
implement the global health security agenda and its core
strategies of prevention, detection, and response.
It also invests in behavioral health services and substance
abuse prevention. It includes more than $99 million in new
funding to combat prescription opioid and heroin abuse
dependency and overdose.
Finally, as we look to leave our Department stronger, the
budget invests in our shared priorities of addressing waste,
fraud, and abuse, initiatives that are projected to yield $22
billion in gross savings for Medicare and Medicaid across the
next decade. We are also addressing our Medicare appeals
backlog with a variety of approaches.
Taken together, this budget advances our broader goals of
making a 21st-century workforce, providing Americans with the
building blocks of healthy and productive lives, and delivering
impact that allows everyone to share in the prosperity of a
growing America.
As I close, I want to assure you that I am personally
committed to responding quickly and thoughtfully to concerns
and communications from members of Congress. We have made
progress, and we can do more.
I also want to just take a moment to thank the employees of
HHS for their work on combating Ebola, for the work that they
did assisting the unaccompanied children at the border, and for
the commitment they show day in and day out, helping their
fellow Americans obtain those building blocks of healthy and
productive lives. I look forward to working closely with you to
advance our common interests for the American people.
Thank you. And with that, I am happy to take your
questions.
The Chairman. Well, thank you, Ms. Burwell.
[The prepared statement of Secretary Burwell appears in the
appendix.]
The Chairman. As you know, the Supreme Court will soon
decide the legality of IRS regulations that extend health
insurance subsidies to individuals in States with Federal
exchanges in the King v. Burwell case. The legislation itself,
the Affordable Care Act, talks only about these exchanges being
created in the States, so it is an important opinion. In my
opinion, the regulations violate the Constitution's separation
of powers by exceeding the executive branch's regulatory
authority, but we will find out what the Court says soon
enough.
At yesterday's Ways and Means hearing, Treasury Secretary
Lew repeatedly refused to say whether the administration has a
contingency plan if the Supreme Court rules against the
administration. Secretary Burwell, does the administration have
a contingency plan in case the Court invalidates premium tax
credits and penalties in States with a Federal exchange? If you
could say ``yes'' or ``no,'' I would be happy.
Secretary Burwell. Senator, right now what we believe is
that the position that we hold, and that the Justice Department
will represent for us in front of the Supreme Court, is the
correct position. We believe that, both in terms of the spirit
of the law and the intent of Congress, as well as the letter of
the law. The Justice Department will make that argument.
In terms of what we believe and what we see happening, the
idea that tax credits would be provided by the Congress for
individuals in, say, the State of New York but not the State of
New Jersey, is something that we do not believe that the
Congress intended in any way, and we believe the letter of the
law supports that.
The Chairman. There is a lot of indication that the
Congress did intend that so that it would force the States to
have to form the State exchanges rather than have the Federal
Government do it for them. So it is a big issue, and the
language is unambiguous, at least in my opinion. So I do not
know what the Court is going to do, nor do I want to overly
speculate on it. But assuming that the Court does find that the
language is unambiguous and that only State exchanges can be
formed, do you have a contingency plan?
Secretary Burwell. Right now, Mr. Chairman, what I am
focused on--I think everyone here knows that February 15th is
the end of open enrollment. And in terms of providing quality,
affordable access to health care, my deep focus right now is
ensuring--later today we will announce that there are 7.5
million people who have come in through the Federal
marketplace, in addition to the 2.4 million who have come in
through the State exchanges. Large majorities of those people
are receiving the financial assistance that is being provided.
Right now my focus is on completing and implementing the law,
which we believe is the law. That is where my focus----
The Chairman. Then the answer must be ``no,'' you do not
have a contingency plan. That is all I am asking.
Secretary Burwell. Right now what I am focused on is the
open enrollment.
The Chairman. So that means you do not have a contingency
plan. I would suggest that the administration ought to get one
just in case. It is something that seems to me you are going to
have to have because the possibility that millions of people
will need coverage when this law runs out is important.
Well, let me ask you this. Has your Department communicated
with insurers who participated in HealthCare.gov to plan for
the possibility that the subsidies could become illegal? Have
you made plans there?
Secretary Burwell. What we continue to do is work with the
insurance providers to implement the Affordable Care Act. We
are working very closely with them as part of this open
enrollment. One of our deep focuses has been the consumer. As
part of that focus with the consumer, we have been working very
closely with the insurers on making sure that we are focused on
everything from how open enrollment works to providing tax----
The Chairman. But including this--I am more concerned about
this issue right now. I am limiting my comments to this issue.
I am sure you are working with the various States in every way
you possibly can, but again, are you planning for anything if
the Court decides the other way?
Secretary Burwell. Senator, right now we are focused deeply
on those issues that I have articulated.
The Chairman. All right. All right. Well, I have to say the
insurers, to my knowledge, have not been given any guidance
about what to do if the Supreme Court invalidates subsidies
paid to them. So it is something I would hope that you will get
on top of, just as a contingency plan, to make sure that you
can handle these matters.
Now, Secretary Burwell, the ACA included more than $100
billion in appropriations. Over $1 billion of that money went
to States that willfully and negligently spent Federal funds
for development of a failed State exchange.
In your May 14, 2014 confirmation hearing before this
committee, I asked you if these States would be required to
reimburse the taxpayers. You said, ``Where the Federal
Government and taxpayers had funds misused, we need to use the
full extent of the law to get those funds back,'' and I agree
with you.
Has HHS recovered any of these funds, and do I have your
commitment that you will take action on behalf of the American
taxpayers to collect from the States the money that was, in the
opinion of almost everybody, so negligently misspent?
Secretary Burwell. At this point we have not received any
of the funds. With regard to the funds, they are made in
contracts, and we issue those to the States and then the States
issue the contracts, so our grant-making to the States is the
part that we have control over.
As part of that, though, a number of the States actually
are taking action, both in Oregon as well as in Maryland.
Efforts are being made in terms of the follow-up. The question
of what the Federal Government can get back in terms of those
funds is about whether or not, in the grant-making, that things
were done that were not in line with the terms of the grant.
Right now, our Inspector General at HHS is looking into
these issues to see if there are places where they think that
has happened.
The Chairman. All right. My time is up.
Senator Wyden?
Senator Wyden. Thank you. Thank you, Mr. Chairman.
Obviously, Madam Secretary, we are in tax filing season,
and there are lots of issues with respect to the premiums and
the credits. And obviously, Secretary Lew and Commissioner
Koskinen play a key role. But you all are involved as well. I
just have a couple of questions here.
Do you have any sense at this point of how many people
might be entitled to a refund under the law, because that is
certainly one possibility, and how many people might owe
something? Do you have any sense of numbers there? Because that
is what I am being asked.
Secretary Burwell. We do have a sense that over three-
quarters of people will just check a box. Those who have
existing insurance in terms of when they file, three-quarters
of people will just check a box.
With regard to the other category, the one that you are
referring to, which is those who have been in the marketplace
and whether or not they have under-paid or over-paid with
regard to the subsidies that they have received, we do not have
a sense, because this is the first time through. We have
consulted with our colleagues at the IRS, and, because it is
the first time through, I am sure both Commissioner Koskinen as
well as Secretary Lew have spoken to that.
Senator Wyden. What are you all doing to make sure that
this is consumer-friendly for people who are going to have to
wrestle with these issues?
Secretary Burwell. We have worked together--the Department
of Health and Human Services, the Treasury Department, and the
IRS--to make sure that we are getting information out as much
and as quickly as possible. With regard to those who will be
filing in the category that you were just describing, 91
percent of those filers use some type of software to file.
So within the software, it is incorporated just as
everything else is incorporated, and we have worked to do that.
We have been working with the tax filing organizations, whether
that is at the end of the H&R Blocks or down to the Volunteer
Income Tax Assistance Centers that I think many of you know,
which are those centers that help lower-income people.
So we are in close communication. Secretary Lew and I have
done calls with the VITA centers, Secretary Lew has done calls
with the tax preparers, and we are in constant communication,
because we want to make sure that the questions they are
getting, we understand, so that we can provide help in
answering those if we can.
Senator Wyden. Let me move on to the chronic care issue,
which, as you and I have talked about, I think is the future of
Medicare. I look back at the days when I was director of the
Gray Panthers, and we talked about broken ankles. Nobody is
talking about a broken ankle now being something that drives
Medicare's future. It is about diabetes and cancer. And you all
run a number of programs that hope to, for the future, address
the concerns of the chronically ill.
When can we expect to see some of those results? I know
that you have programs that you would like to see look at a
variety of different conditions. The challenge, of course, is
you have this horribly fragmented delivery system, and that is
one of the things legislators on this committee are trying to
change, and trying to change in a bipartisan way.
But tell me about the programs you all operate that target
the chronically ill, which I think is going to be the future
great challenge of American health care.
Secretary Burwell. With regard to the chronically ill and
the things that we do at the Department, it actually cuts
across various parts of the entire Department. There is the
work that we are doing as a payer in Medicare and Medicaid, and
we are working on innovation in that space. We are working on
innovation with the States through the State innovation model
grants, where we are granting money to a number of different
States to try innovations in terms of some of those things. In
the Medicare space, we see the work that we are doing in the
Innovation Center.
With regard to when we will know--as you all know, the
legislation gave us conditions that said you cannot decrease
quality or increase price--we are measuring those as we go
forward. I would also mention that in these areas of chronic
care, there is also the work that the CDC is doing. And some of
this is about prevention, and we think for some of these
conditions such as diabetes, heart disease, and some of those,
it is about prevention. CDC plays an important, strong role as
we go forward with that.
Senator Wyden. Let me ask you about the Precision Medicine
Initiative and, again, what we are looking at for the future. I
think this too is a key part of the future of Americans' health
care. I think for families to have confidence that, when a
loved one gets sick, their treatment is going to be targeted
and precise based on their genetic make-up, this is pretty
important. This is about as important as it gets for a family.
But if we are going to tap the potential of precision
medicine, the big payers--and your Department runs several of
those programs--Medicare and Medicaid and private insurers, are
going to need to pay for it. I know you are just getting
started in this area, but what progress are we making in terms
of setting up payment systems? That is what this committee
tried to do in the Affordable Care Act: to make sure that you
can actually get paid for tests and innovation and these kinds
of services that really help patients.
Secretary Burwell. I think that the question of payment
also gets to the announcement that I made last week. For the
first time, we as a government are committing that we have set
a goal for ourselves to change the way that we are paying in
Medicare. We have set the goal that we will have alternative
payments, payments that are based on value instead of volume.
We have set the goal for 2016 of 30 percent of those
payments, and by 2018 of 50 percent of those payments. As part
of our moving forward to alternative approaches to payment, I
think that is where we are going to try to bring in some of
that innovation.
The other thing that I think is important as we consider
cost in this space is that this type of an approach to medicine
hopefully can work for the individual, because you can treat in
ways that may not be as costly, as you were talking about in
your earlier question.
Senator Wyden. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Grassley?
Senator Grassley. Thank you, Madam Secretary, for
appearing. More importantly, I appreciate very much the
frequent phone calls; you call me and give me updates.
I only have one subject, one question at the end, but I
have a lead-in, so be patient, please. I am concerned about the
recent failure of CoOpportunity, a co-op created through the
Affordable Care Act operating in Iowa and Nebraska.
CoOpportunity was one of 23 co-ops formed under that law, and
the Federal Government loaned money to them through CMS.
As I understand it, CMS played a significant role in
overseeing the co-ops, including having ultimate authority over
setting the rules. CoOpportunity was very successful in
attracting beneficiar-ies and had the second-most covered lives
of all the 23 co-ops. It was even more successful than they had
anticipated.
In the summer, it became obvious to CoOpportunity and the
Iowa Insurance Commissioner that CoOpportunity would need
additional loans from CMS to stay in business. Both the Iowa
Insurance Commissioner and CoOpportunity frequently inquired
with CMS about their capital position and the need for
certainty ahead of open enrollment, as it was clear that a
liquidity crisis was developing. CMS knew CoOpportunity was
going to be in trouble if it did not get loans.
CoOpportunity was allowed to be in Iowa and the Nebraska
marketplace when it opened on November 15th. CMS finally let
CoOpportunity know that no further loans would be coming, right
before Christmas, and the Iowa Insurance Commissioner was
forced to take over CoOpportunity December 24th.
I am concerned about CMS's role as a regulator of
CoOpportunity, and then of all co-ops. There was about $2
billion of taxpayer money loaned that depends on the success of
the co-ops for the Federal Government to get its money back,
but CMS did not distinguish itself in its actions with
CoOpportunity.
I will have more questions for you for the record regarding
CMS's action, but my question for you today is on behalf of
Shane and Betty Bush, Milford, IA, just as an example of some
people who have real problems because of CoOpportunity's
bankruptcy. They paid their premiums and renewed their coverage
with
CoOpportunity, as they expected it to be there for them in
2014.
Unfortunately, Shane Bush had emergency surgery January
3rd. Fortunately, Mr. Bush is recovering, but the care was not
inexpensive. The Bushes have already hit their out-of-pocket
maximums for CoOpportunity. With CoOpportunity being
liquidated, the Bushes will have to find new coverage, and that
next insurer will not have to recognize the money already spent
by the Bushes in 2015. With additional expenses certain this
year, the Bushes will be out of thousands of dollars they have
already spent in 2015.
Madam Secretary, the Bushes cannot afford to pay out-of-
pocket premiums for two different plans. They are in this
situation, as I see it, because CMS ignored the warnings from
Iowa and CoOpportunity, allowing CoOpportunity to go back on
the marketplace. Now folks in Iowa and Nebraska like the Bushes
face financial consequences because of CMS's foot-dragging.
I intend to ask you further about what CMS was doing and
why, but what I want to ask you today is what responsibility
you think your Department and CMS have to people like the
Bushes. I think they had about 100,000 people whom they were
doing business with.
Secretary Burwell. With regard to the issue of the
consumer, that is our number-one priority as we work with the
State Insurance Department in Iowa, as we work through this.
And so the consumer is the number-one priority, and we are
thinking through what authorities we have and what we can do to
help support all of those consumers like the family that you
have just described.
As we have worked through this, I think as you know,
Director Tavenner has been in touch, and we look forward to
responding to the questions that you have sent us in your
letter, and any others that you add to that list. But we are
focused on the consumer.
One of the things that has happened through the evolution
of this, the co-op process, is from the legislation that was
passed and the amount, there were many, many rescissions in
terms of the amounts of money that we had to do additional
support. So at that point in time, it came down to a very
limited amount. There were rescissions; sequestration took
additional dollars; ATRA* took dollars out of these funds. We
are concerned. Right now our focus is deeply on the consumer,
so we look forward to working with the State of Iowa, which has
the main authority over this, to figure out ways that we can
help those consumers.
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* The American Taxpayer Relief Act of 2012.
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Senator Grassley. Thank you, Madam Secretary.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Stabenow?
Senator Stabenow. Thank you very much, Mr. Chairman.
Welcome, Madam Secretary, and thank you very much for the
hard work of you and your staff on a complicated, critically
important set of issues. I think we need to first underscore
the good news. The latest CBO projections show that more and
more people are finding full-time work. We want to make sure
that it is work where you can work one job and be able to care
for your family, that they are getting access to affordable
health care.
We know that fewer Americans are going into bankruptcy
because of medical crises. That is important. Tax credits are
helping people afford coverage. People who have insurance are
able to get new opportunities to get preventative care and
vaccinations, wellness visits. And frankly, folks who have been
paying into health care for a long time are finally guaranteed
they are getting what they are paying for, and they cannot get
dropped if they get sick, and they can find insurance coverage
for a preexisting condition, and so on, and so on. So, all good
news.
I would say that, because of the importance of health care
to the people of Michigan, as somebody who was around and
deeply involved in the debate on the affordability of health
care and being involved as one of the chief supporters of what
I call the affordability tax credits--in fact, at the time, the
chairman introduced me as Senator Affordability, which I carry
as a badge of honor.
But I would say, just for the record, that the
affordability tax credits are working as we drafted them, as we
intended them for all Americans, not just some Americans. And
if in fact they went away or the entire bill, the law was
repealed--we have now seen a bill introduced here in the Senate
that has been brought immediately to the floor with, I believe
we have 47 Republican co-sponsors so far. This would be serious
for families in terms of no longer having access to the
protections of affordable health care and access to health
care.
What I would like to ask you about, though, is one piece of
that that unfortunately went from being a part of the
comprehensive plan to being optional State by State, which has
undermined seniors' and families' ability to be able to get
affordable health care, and that is Medicaid.
When we put all this together, we assumed--and we know that
80 percent of the money in Medicaid is low-income seniors in
nursing homes, so we are talking about seniors in nursing
homes--that low-income seniors in nursing homes and their
families would be able to get the help under Medicaid that they
need. In Michigan, more than 500,000 people have enrolled in
the Healthy Michigan plan. I congratulate our Governor and
others who put that together. We still have time to go on this.
So, when I look around this panel, we have 11 States
represented in the Finance Committee that still have not
provided access for low-income seniors to nursing home care, or
to families and children, through the expansion of Medicaid.
I wonder if you might speak to what is happening to
families and the costs even to States, and certainly our
hospitals. I know in Michigan folks were talking about the
number of people coming to the emergency room, getting care the
most expensive way possible, rather than getting it through a
doctor and so on in a way that is better for them and contains
costs.
Could you talk about what is happening because States are
not giving access to families and seniors to health care
through Medicaid?
Secretary Burwell. I think the impacts of Medicaid
expansion have to do both with the individual as well as
economic impacts. In terms of the individual impact, in terms
of the health and financial security, yesterday when we had
folks at the White House who had written the President, there
was a woman who actually went onto the marketplace, because she
thought she would pay a fee. She went onto the marketplace,
found out actually she was not in the marketplace but was
Medicaid-eligible. She went in to see a doctor, had never had a
history of breast cancer in her family, ended up actually
having a mammogram because it is part of what is covered, and
found out that she had breast cancer. So that is for the
individual, for the individual in terms of that financial
security, the ability to pay for and have health care. So that
is for the individual.
Economically, what we see is, in the States that have
expanded Medicaid, there are fewer rural hospital closings, an
issue that is affecting a number of States across the country.
That has to do with the reduction in indigent care costs, and
that is what we do see in those States. We see anecdotal
evidence in terms of what is happening in communities where
more of the care is being paid for. So there are benefits on
the individual side in terms of financial and health security,
and then with regard to the States themselves, they are seeing
those benefits I just mentioned.
Senator Stabenow. So it is a major rural health issue.
Secretary Burwell. It is a rural health issue, but it is
also happening in urban hospitals, because generally, in some
urban areas, there is one hospital--not always--but there is
often the one hospital that tends to take care of that indigent
care. So the economics of that entity can be dramatically
affected. We know those are the direct impacts. The indirect
impacts are for everyone else in terms of premiums. When there
is less indigent care, there is less pressure on premiums for
those who are even in an employer-based system.
The Chairman. Senator Schumer? Thank you, Senator Stabenow.
Senator Schumer. Thank you. Thank you, Mr. Chairman. Thanks
for holding the hearing. And I want to thank you, Madam
Secretary, for the great job you do. You are a star.
First, ACA, despite all the naysaying, has some huge
successes. Health-care spending growth has decreased
significantly. That is huge in terms of not just health care
itself, but our budget: $600 billion dollars less through 2020.
The uninsured level is the lowest in decades: 9.5 million
insured in my State of New York. We have really done a good
job. I salute our State. Our health exchange, the New York
State of Health, has signed up 2 million people for low-cost
health coverage. Eighty percent of those enrolled said they
were previously uninsured, so it is great.
Now I have--and I appreciate the emphasis you have put on
research, early learning, and your support for CHIP. I am now
sitting in the seat where Senator Rockefeller sat for a long
time, and I am mindful of CHIP all the time.
I have two questions for you. The first is on graduate
medical education, a place where I oppose the administration
strongly and vehemently, and I cannot even understand your
logic here. The President's budget says Medicare payments to
teaching hospitals for costs of Indirect Medical Education
exceeded the actual patient care costs, and they want to
correct this imbalance by reducing the IME payments by 10
percent. That is an enormous cut: $16.3 billion.
Now, your budget proposal recognized that we have a
physician shortage, and we do. If we are going to insure more
people, we need physicians. It is one of the places that ACA
did not really do the job in terms of filling the gap of new
physicians that we need, and it sort of adds insult to injury
to now cut the payments to teaching hospitals. They are just
not going to teach as many medical students and make them
doctors if you are going to cut this.
I believe that current funding levels are critically
important to maintaining a state-of-the-art environment, not
only training doctors but training the best doctors. We do not
need a majority of our doctors to be trained overseas, but that
would be the direction in which you are headed. So it seems to
me counterproductive to attempt to train more physicians by
cutting teaching hospitals that train them. How do you
reconcile that?
Secretary Burwell. With regard to the issue of making sure
that we have enough care in the country and the specific GME
area, what we are trying to do is make sure that we balance the
needs, and our proposal also targets funding, and additional
funding, for those who go into primary care and specialties
where we have shortages.
The proposal that we are trying to craft and come forward
with is a proposal that affords us the opportunity to have
fiscal responsibility and keep the slots, but there is the
question of the payment of the slots, indirect versus direct
costs, and then we add additional funds that would help do
targeted efforts.
In addition, with regard to the broader issue, and in terms
of some of the things we do do, the National Health Service
Corps is a place where there are large investments in the
budget to try to make sure that we are supplementing primary
care. We have also proposed the extension of the Medicaid
primary care funding, so we are trying to make sure that we are
working on the health resources.
Senator Schumer. Well, I think you are robbing Peter to pay
Paul. I certainly believe in the programs you have mentioned.
They have been around for a while. They have not filled our
need. What we have proposed, a bunch of us, and it has
bipartisan support, is to increase the number of slots and
allocate half of that increase to primary care. It seems to me
a much better and tested way to go than say, well, we are
relying on these new programs which have never filled the gap.
Having said that, I just wanted you to know I am vehemently
opposed to that proposal, and I hope the administration would
reconsider, if you have not understood my language until now.
Secretary Burwell. I look forward to working with you.
Senator Schumer. On Ebola, I want to thank you. The CDC has
done a great job. We knock government all the time, and, if you
read the media the first few weeks, you would think everyone
was going to get Ebola. The number of cases here in America has
been, thankfully, few. The number of cases in the three hot-
spot countries has declined. That just did not happen by magic;
it happened by great work at the Federal, State, and local
levels.
In New York, our hospitals did an amazing job. Forty-seven
percent of the people who flew into this country from the three
Ebola countries landed at Kennedy Airport, and our city, State,
and Federal Governments all got together and made sure that we
did not have the situation that we had initially in Dallas. So
I thank you for that and for the good job you do.
But can you just tell us--I know we have put some money in,
and I worked very hard to have a provision, with the help of
many of my colleagues, that our hospitals in and around the
country would get reimbursed for the huge outlays they have had
to make. Many of them had to create anti-contamination rooms,
they had to buy equipment, they had to do training. Can you
provide us with how you plan to ensure that the Ebola treatment
centers--I care especially about the ones in New York--receive
appropriate reimbursement?
Secretary Burwell. We are working to have those funds
reimbursed. We are working to have a contractor that will help
us do that reimbursement on a hospital-by-hospital basis. In
addition, States and communities will receive other funding for
the preventative work that they did, so there are special funds
for the treatment hospitals like Bellevue, which did a
tremendous job in New York, and the others that did treat
patients around the country.
We look forward to continuing to work on this, and we are
very appreciative of the funds and want to move them as quickly
as we possibly can to get reimbursement to those treatment
hospitals and to help those hospitals that got ready and
prepared.
Senator Schumer. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Roberts?
Senator Roberts. Well, thank you, Mr. Chairman.
And, Madam Secretary, let me echo the sentiments of many
members to thank you for the job that you are doing.
During your confirmation hearing, we talked a lot about the
Affordable Care Act's Independent Payment Advisory Board. The
acronym is IPAB. Sort of reminds me of Pablum that people do
not want to eat. So anyway, IPAB.
You said, and I will paraphrase here, that you were hopeful
IPAB never needs to be used; it can only be triggered in the
window when you will serve as Secretary. Your estimate said it
will never be activated. You were hopeful that we can make sure
that IPAB never gets triggered, and we all agree.
But here we are again with a budget request where you are
acting to expand this authority to find savings. How can you
explain how you went from hoping it never had to be used to now
doubling down on IPAB and expanding the savings it must find?
Secretary Burwell. What we are trying to do is get to the
core of what IPAB was about, which is making sure that we can
work together to continue to keep the costs down in Medicare
and in the entitlement space. We are working to do that with
our proposals.
We have seen, just in the period from 2010, our Medicare
spending is $116 billion below what it was predicted to be. On
a go-forward basis, that is why we have the proposals in our
budget, to keep moving that out. The proposals that we have in
our budget extend the life of the trust fund by 5 years.
Our objective is to actually put in place specific policies
that will continue to move out that time frame, and we are
hopeful that we can work with the Congress to get those
policies enacted, to continue the entitlement savings. We have
some savings from the last years in terms of what we are
seeing, but we want to continue on a path to tight and
contained growth with regard to that spending.
Senator Roberts. Well, I think everybody wants to contain
the growth, but I do not want rationing. I am very worried
about the Independent Payment Advisory Board, the CMS
Innovation Center, the U.S. Preventative Services Task Force,
and the Patient-Centered Outcomes Research Institute, all well-
intended. I have labeled them The Four Horsemen of Regulatory
Apocalypse because of all the rationing.
Now, wait a minute. You are depending a lot on something
called a RAC, and that is a Recovery Audit Contractor. I must
tell you that when the contractors ride into town in western
Kansas, the doors shut and everybody hopes that nobody, no RAC
person, comes and knocks on the door. I think they put hospital
administrators on the rack, if you will.
I appreciate that you have included a number of proposals
in the budget to help address the appeals process, because you
go into a hospital, and they have a choice. You either pay the
fine--and contractors get gold stars if you have fines--and
then you say that is savings with regards to Medicare. It is
also rationing.
So here is the point. CMS presented a settlement offer, and
over 2,000 hospitals entered the process. Chief Administrative
Law Judge Griswold noted that, as of July last year, there were
800,000 pending appeals. My question to you: if all of these
hospitals would complete the settlement process, how many
claims would potentially be cleared from the backlog? Are we
even making a dent?
Secretary Burwell. The issue is one that I think many of
you on the committee know is one that I am deeply concerned
about, which is why we have reached out and talked about this
issue, certainly before today. With regard to how many will
come through settlement, they will not all be cleared out that
way.
The strategic approach we are taking is threefold to
address what I agree is an extremely important issue. It is an
issue about balancing those who are not--it is about program
integrity, because there are people who are not doing things
that we as taxpayers would pay for.
Senator Roberts. I understand that.
Secretary Burwell. At the same time, in dealing with the
concerns that you have articulated in terms of how it feels and
how the process is used, we are using three strategies. The
first is to use administrative tools like the one you
articulated. The second is, there is funding needed so we can
clear out the backlog. Judge Griswold and others can process
those. But it is a specialized person that we need to do that.
And then the third is, there are legislative proposals that
we believe will extend our ability to both get rid of the
backlog and prevent it in the future. We have had
conversations, especially with this committee--and we
appreciate those conversations--and we have included the seven
proposals in our budget so that we could be specific in working
with you all on how we can do that, because, to be honest, it
is going to take all three for us to get rid of that backlog.
Senator Roberts. I appreciate your response. I am not sure
that I am following you on all of the details in terms of the
specifics, and we would like to do that. I know you are
extremely busy, but we will make that inquiry. I just have to
tell you that when you have RAC contractors racing around to
the rural health care delivery system, they are not very
welcome. It seems to me they do not trust the hospital
administrator or the doctors, or the whole delivery system. In
return, these rural folks do not have any trust in government,
and that is not a good thing. So, let us work together to see
if we cannot get a better situation.
Secretary Burwell. I would like to do that and would like
to have follow-up with you on this issue.
Senator Roberts. Thank you.
The Chairman. Thank you, Senator.
Senator Cornyn?
Senator Cornyn. Good morning, Madam Secretary. On December
17th, a number of Senators sent a letter to you and to
Secretary Lew about the King v. Burwell case, and I would like
to follow up on Senator Hatch's questions because you did not
answer a single one of them about the contingency plans and
notices to people who might lose their taxpayer subsidies for
their health care.
Let me just start by asking, has HHS taken steps to inform
all current Federal exchange enrollees about the King suit and
how a ruling against the administration might affect them?
Secretary Burwell. We have not, Senator. We believe that we
are implementing the law as it is intended to be implemented,
and as we do that, that is what we were talking about with the
consumers who are entering into the marketplace.
Senator Cornyn. And my question is, if the administration
loses, have you taken steps to advise Federal enrollees about
the consequences that may apply to them as a result of the
administration losing that lawsuit?
Secretary Burwell. Right now, as I mentioned with the
chairman, what we are focused on is what we believe is our
responsibility: to implement the law as fully as we can, to
focus on the consumer experience, and we are working for that
February 15th deadline.
Senator Cornyn. And that is not an answer to my question,
Madam Secretary. You are a highly intelligent, charming person,
but you refuse to answer our questions and that, to me, does
not strike me as trying to work with Congress but rather
contempt of Congress's oversight responsibilities. So let me
just ask you, if the administration loses the King v. Burwell
case, do you plan to ask Congress for additional legislation?
Secretary Burwell. With regard to that question, we are now
at a stage where even oral arguments have not been made,
Senator, in terms of the case.
Senator Cornyn. And that is not my question. My question
is, if you lose, are you going to come to Congress and ask for
additional legislation?
Secretary Burwell. With regard to the issue of legislation
and the Affordable Care Act in its entirety, what we have
always said and what we continue to say is, with regard to
things that will improve the Act, we are open, whether that is
the recent vote for veterans--and I know that members of this
committee actually have bills that have to do with our
firefighters and that would enact into law what we have done
through administrative actions. We will work with the Congress.
How we will judge what we work on with the Congress is, does it
increase access, affordability, and----
Senator Cornyn. Madam Secretary, you are not answering my
question. My question is, if the administration loses the King
v. Burwell case, do you intend to come to Congress and ask for
additional legislation to address that decision by the Supreme
Court?
Secretary Burwell. Senator, we believe that the position we
hold is the correct position, and----
Senator Cornyn. And my question is, if you lose, if the
Supreme Court disagrees with you, will you come to Congress and
ask for additional legislation?
Secretary Burwell. Senator, what we know right now is, it
would be devastating, the effect, in terms of loss of premium,
loss of individuals. What we are focused on right now, though,
is implementing the law that we have before us, and that is our
focus for now.
Senator Cornyn. So you are going to ignore the Supreme
Court decision in July. So let me ask you this. Since you will
not answer my question about a legislative solution, do you
believe that your agency has authority to make an
administrative fix to the law?
Secretary Burwell. Senator, as I have said, what I have
focused on is, right now, the current implementation of the
law. That is a question in terms of----
Senator Cornyn. And what I am focusing on is, if the
administration loses--and so far you have refused to answer my
question, and notwithstanding your earlier statements that you
want to cooperate with Congress and this committee and you
respect our constitutional oversight responsibilities, what I
do not understand is why you continue to refuse to answer the
question.
So let me ask it again. If the administration loses in the
King v. Burwell case, do you believe you already have the
authority to make an administrative fix, or will you come to
Congress and ask for additional legislation?
Secretary Burwell. Senator, I am focused right now on
implementation. With regard to those questions, we believe that
we are right in implementing the law and that the law will
stand.
Senator Cornyn. I am asking, if you are wrong, if the
Supreme Court disagrees with you--if five members of the
Supreme Court disagree with you--do you believe you have
authority to issue an administrative fix, or do you think you
need additional legislation?
Secretary Burwell. And with regard to the answer to that,
Senator, what I am saying is, what I have been focusing on is
implementation, not on that question.
Senator Cornyn. Mr. Chairman, Secretary Burwell is a
charming person, and she is obviously intelligent, but these
hearings are absolutely no use to us if the witnesses refuse to
answer straightforward questions, which this witness has
repeatedly done. I am not sure exactly what the proper solution
is to this, Mr. Chairman, but I would like to visit with you
about that, because it seems to me that this administration
continues to parade witnesses in front of committees like this
one and to deny us a straightforward answer to a
straightforward question. That is just unacceptable.
The Chairman. Yes. Well, Senator Wyden would like to
comment on this whole matter.
Senator Wyden. Mr. Chairman, I just want to make clear what
I think today is all about. Today is about the HHS budget, this
multi-billion-dollar budget that involves millions of
Americans. That is the topic at hand. I am very interested in
working with my colleagues on the other side of the aisle on
health policy. I have shown that plenty of times, and so have
my fellow Democrats. But I think the idea this morning that we
are going to ask a witness to speculate about a court case, to
speculate about something hypothetical, and in effect have a
big debate about something, I think misses the point of the
challenge at hand.
The challenge at hand is about the budget, and I hope that
we can figure out a way over the course of the morning--we have
plenty of colleagues who still want to ask questions--to talk
about the topic that was scheduled, and that is the budget, and
not talk about hypotheticals, about something else. By the way,
this is not the Department of Justice's budget, this is the
Department of Health and Human Services'. I hope we can stay on
the budget and not get into some recitation about a parade of
hypotheticals and speculations. Thank you, Mr. Chairman.
Senator Cornyn. Mr. Chairman, if I can just respond to the
ranking member. It is the same question you have asked, Mr.
Chairman. We are not limited as Senators to what the topic of
the hearing is. We can ask questions, any questions we want,
about the agency that this witness is responsible for
administering.
To come here and repeatedly refuse to answer the questions
strikes me as nothing less than contempt of our oversight
responsibility, and it is a very, very serious matter. I am
just really, frankly, shocked that this witness would take that
position. I just find it unacceptable.
Senator Wyden. Mr. Chairman, just to continue this briefly,
to say that this witness is handling this committee with
contempt misses what members on both sides of the aisle have
been talking about for weeks. This official at HHS has reached
out to this committee, the people of this country, in an
unprecedented way, and I think arguing that because she will
not talk about hypotheticals, speculate about a court case,
means that she is handling this Congress with contempt, I just
think is way off-base.
The Chairman. Well, both Senators are entitled to their
opinion.
Let me just ask this question. Have you made any
recommendations, as the premier department that handles all
these matters that are so important to the administration, as
to how they would handle it if, as Senator Cornyn has raised,
the case goes against the administration or against the
Affordable Care Act?
Secretary Burwell. Senator, with regard to where I am now
on the issues that I am focusing on, whether it is Ebola, the
measles, or----
The Chairman. No, wait, wait, wait, wait, wait.
Secretary Burwell. I am focused right now on
implementation.
The Chairman. We got that point.
Secretary Burwell. So----
The Chairman. Look, wait a minute. These are not stupid
people up here, and you are not stupid either. Why don't you
just say that it is up to the President and the Justice
Department, and that would get you off the hook, it seems to
me.
Secretary Burwell. Right now----
The Chairman. It does not solve the problem, because you
should be recommending what should be done, because that is a
serious problem.
Secretary Burwell. With regard to, as you are clearly
articulating, the Justice Department is the next step----
The Chairman. Well, why don't you say that?
Secretary Burwell [continuing]. In terms of what the
administration is doing. The Justice Department will represent
us.
The Chairman. I get tired of bailing out you Democrats all
the time, you know? [Laughter.]
That was supposed to be humorous. I did not think it was.
[Laughter.] I thought I was being quite funny. But I have this
subtle sense of humor that sometimes does not come across.
Senator Wyden. Mr. Chairman, just to wrap this up, I do not
think the Secretary needs any bailing out. We have something
called a Judiciary Committee where they can have discussions
about speculative matters involving the Supreme Court.
The Chairman. I think----
Senator Wyden. I just hope we can handle the budget today.
The Chairman. Well, let me just say I think Senator Cornyn
is certainly within his rights. I think his comments are
accurate comments. Ms. Burwell just continues to answer that
she is not focused on this. I understand that. Then tell us who
is focused on it, because it is an important thing that can
just throw you into all kinds of turmoil, and we are concerned
about it. It is a legitimate concern of this committee. To make
a long story short, I think Senator Cornyn raised a very, very
important issue, as have I.
We will now go to--who is next? Let us go to Senator Coats.
Senator Coats. Well, first of all, I want to second what
our members have said, Madam Secretary, that your engagement
and accessibility have set a new standard, and I think we all
appreciate that. I do not know when you sleep, but I know how
active you have been and will continue to be.
Secondly, though, I wanted to second what the chairman and
Senator Cornyn and others have said, not to ask you the
question again, because I think I know what you are going to
say, but to say that we all know that this health care proposal
enacted in 2010 has been one of the most impactful pieces of
legislation ever enacted by this Congress, by any Congress, and
it affects tens of millions of Americans directly in terms of
their health care, which goes right to the essence of who we
are as human beings.
Clearly, there is a collision, potentially, coming with the
Supreme Court decision. It is probably not likely, given the
President's very clear admonitions about how he will not accept
any piece of legislation that modifies this in any significant
way through a repeal and replacement, but there is a potential
collision coming, and it would be irresponsible for the
administration not to have a plan to address that, should the
decision not come down the way you would like.
I do not have a question here, it is just a statement
affirming that it would cause great chaos and be totally, I
think, irresponsible. Somebody ought to be looking at, what do
we do if, and that is what the question here is.
Now, I want to thank you personally for your engagement
with our current Governor, Governor Pence, whom I was with this
morning. He wanted me to pass on his thanks also to you for 2
years, almost 2 years, of engagement over a request for a
waiver for the State of Indiana. Our former Governor, Governor
Daniels, put into place something called the Healthy Indiana
plan, and it was innovative, it was creative, it has been
proven to provide health care for a number of Hoosiers.
Governor Pence wanted to expand that, and there are 350,000
Hoosiers who will benefit--at minimum--from your agreement to
work with us and come to a conclusion. There are some really
innovative reforms here on traditional Medicaid, and I think
some of them are the first ever.
So I think it is important for our State to be responsible
in playing this out the best we can to prove that these
innovative solutions can be a benefit to all Medicaid
recipients. In that regard, I would just like to have your
assessment of some of the first-of-a-kind proposals that you
have agreed to that hopefully will prove their worth and can be
duplicated perhaps in other States or throughout the system:
the co-pays and the patient participation; the patient option
to choose a plan if it better meets their family needs; the
contribution to the so-called Power Plan, which is a
modification of health savings accounts; and the State's
referral process to every individual who applies for job
training and job searching through State sources.
It is all combined in this new plan, and we are pretty
excited about it, but I would like to get your thoughts on it
here, I think for the benefit of the members of the committee
and for others who are looking at ways to provide better
access, better health care at lower cost.
Secretary Burwell. I am pleased that we were able to come
to agreement and work with the Governor, and I was happy to do
that. One of the first things I did when I became Secretary was
meet with the National Governors Association to express my
willingness to work on a State-by-State basis to use the waiver
process to do two things: one, to do agreements that would be,
on a State-by-State basis, what a State needs in terms of
continuation, and moving on building on the Healthy Indiana
plan for Indiana. In other States, Utah, Tennessee, there are
other approaches that are important to those States.
The second thing is that I think what you are reflecting
is, waivers are a means by which we can try and we can test
things to find out if they are things that work and then move
to how we would scale them as a Nation if they do work.
We are looking forward to working with the Governor as he
moves to implement, and we tried to make sure that he could
implement quickly as soon as we reached agreement, and we look
forward to finding out, what are the kinds of things that we
can do better in Medicaid as a program? That effort in the
waivers is accompanied and complemented by something that the
National Governors Association asked us to do, which is State
innovation model grants.
And so, at the time that we are trying things, we are also
doing innovation in terms of payment models and helping the
States through financing the States to do that, and a number of
States have received grants. There is a first round and a
second round.
Senator Coats. Well, I know our Governor in our State and
those who have participated in this, including the health care
providers and their participation and contributions to the
program. We have a lot at stake here, and we hope to be able to
deliver to you innovative, successful solutions. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Cardin?
Senator Cardin. Well, thank you very much, Mr. Chairman.
Secretary Burwell, it is a pleasure to have you before our
committee, and thank you very much for your leadership and
service to our country in this very important role under
challenging circumstances.
I want to talk, first, about an issue that I am working on
with Senator Blunt dealing with community mental health
services. There is a challenge for people who are suffering
from severe depression or anxiety disorder getting the type of
help they need in a community setting. If they go to their
primary care physician, as many of them do, there is lack of
capacity in that office to deal with their needs. If they go to
an emergency room, it is a very inefficient way and most likely
inadequate to take care of their needs.
There have been some demonstration programs dealing with a
collaborative care model, where the primary care person can get
help from a mental health specialist so that you use better
community services to keep people healthy in their community--
less costly, better services. There are obstacles in the way
under Medicare and Medicaid for this collaborative care model,
and I just would welcome your thoughts on how we can work
together to try to expand these opportunities, removing those
obstacles and offering incentives for a collaborative care
model that will provide better services at less cost for people
who have mental illness.
Secretary Burwell. So the issue of behavioral health and
the payment for behavioral health is one of the tools that we
think we have. And working to make sure that payment occurs in
a way that is equitable with payment for other types of care is
something that we are working on, and certainly we would
welcome the opportunity to have a conversation with you, having
had conversations with Senator Stabenow as well as Senator
Blunt. So I would love to continue those conversations.
I think, as you know and have mentioned, we are also
focused on how we can do more community-based care. That
actually touches also upon the delivery system reform, which we
had a little bit of a conversation about earlier, so that we
are creating home health systems and that there is
communication between physicians, because that is sometimes one
of the missing links in behavioral health.
Senator Cardin. Well, we would be interested as to what you
can do under your authority, but if you need congressional help
particularly, let us know what obstacles need to be addressed
by Congress and how we can expedite the implementation of
better collaborative care models in our community. I appreciate
that.
As you know, I have a particular interest in NIH funding. I
was pleased to see that the President's budget did increase NIH
funding by about $1 billion. I would like to see a larger
number. The returns are incredible from what we invest, and I
think this is a bipartisan interest.
One of the centers, the Institute of Minority Health and
Health Disparities, is one that I take pride in that Congress
created under the Affordable Care Act. They received a slight
increase, from $259 million to $281 million. Can you just share
with us your commitment to NIH funding, but specifically how
you see the Institute of Minority Health and Health Disparities
functioning under your leadership?
Secretary Burwell. The issue of minority health disparities
cuts across actually the entire Department, and NIH has been an
important part of that effort. With regard to minority health
disparities, they are great in our country, and there are a
number of ways that we believe we should address them.
Working through NIH with regard to how we think about
research, and the research on the science that is creating
these disparities, is how I think about that particular piece,
as well as NIH's role in making sure that we have minorities
who are part of the system, both in terms of physicians who are
practicing in a clinical setting, but actually researchers who
are part of the process who come from these communities.
At the same time, we are focused deeply on probably the
most important thing we can do to reduce these disparities,
which is addressing the disparity in coverage. That is
something I think you know that we focus on as well.
Senator Cardin. Absolutely. If you could keep me informed
on the progress, not only at the National Institute but at the
different offices for minority health, I would appreciate that.
Lastly, let me just put on your radar screen pediatric
dental coverage. We have been watching its implementation.
Quite frankly, it has been more seamless than what we
originally were concerned about. There are more universal
policies that are being offered that handle pediatric dental
coverage rather than stand-alone plans. As you know, in
Maryland, with the loss of Deamonte Driver in 2007, it has been
a particular issue, pediatric dental care.
So I would just urge you to monitor how the private market
is working on offering coverage for pediatric dental. Since it
is a required coverage, we want to make sure that in fact it is
being taken advantage of by those who have gotten coverage
through the exchanges.
Secretary Burwell. Thank you, and we will. I had the
opportunity actually, as I was out traveling the country, to
meet with a woman who took her child to the dentist for the
first time as part of coverage.
Senator Cardin. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Cantwell?
Senator Cantwell. Thank you, Mr. Chairman.
Secretary Burwell, thank you so much. I read a Bloomberg
article that I would like to enter into the record, and the
headline was: ``U.S. to Overhaul Medicare Payments to Doctors,
Hospitals.'' So that was music to my ears. And then the first
paragraph or so said, ``The Obama administration makes historic
changes to how the U.S. pays its health care bills, aiming to
curtail the costly habit of paying hospitals and doctors
without regard to quality or effectiveness.'' Then it goes on
to say it ``. . . will tie billions of dollars in payments to
how their patients fare.'' So actually all that was a quote
from that news article I want to enter.
[The article appears in the appendix on p. 256.]
Senator Cantwell. So first of all, that is music to our
ears in the Pacific Northwest and any State that already is
making its way down the system of more efficient care that is
focused on the patient. The fact that the administration is
setting this goal of 30 percent of traditional Medicare
payments to alternative payment models by 2016 is just a
terrific goal, and 50 percent by 2018. As you know, we worked
very closely on the Medicare value-based modifier as a way to
make sure that we are focusing on quality, not on quantity.
So my question is, in the details of that 30 percent, one
of the things that we have had discussions about here is, what
does the incentive look like? I want to make sure that we are
not setting a big goal of having 30 percent shift over to that,
but having the incentives be so small that we are not really
changing behavior.
So people have talked about things like 4 percent, or a
bonus, or penalty caps, but we want to see good behavior being
rewarded and bad behavior being discouraged. So what can you
tell me about, within the 30 percent, how aggressive we can be?
Secretary Burwell. I think that there are a number of
different things that can help us get there, and some of those
are about incentives and some of those are about approaches:
bundled payments as a type of approach in terms of how we go
about doing it. There are things like the value-based approach
where you are rewarding good behavior, and, for those who do
not have that behavior, they will take a hit for doing that.
I think there are tools like that that are being used. We
are seeing that the private sector and the providers are moving
towards this care because it is better quality care and more
affordable for them. And we have received help and support, and
there has been legislation, about helping us as we are doing
Accountable Care Organizations.
There are some places where we may need additional
flexibilities as we are learning about what people react to
with regard to incentives. So that is a place specifically
where I think we would like to work with the Congress to make
sure that we are able to do that.
The other thing I would just say is that the pressures in
the private sector right now, they are also helping us, because
private-sector payers are moving in this direction, whether it
is Boeing that is partially in Seattle and how they are
negotiating their payments--those examples are making a
difference to us.
Senator Cantwell. So you think the incentives could be more
than just a few percent?
Secretary Burwell. I think the question of exactly what the
numbers are depends on which incentives you are using and how,
so I think the details here matter for a number of the
institutions. So I think it is a balance.
Senator Cantwell. Well, what I am saying is if, by 2016,
you can say that 30 percent of traditional Medicare payments
are at an alternative model, but they are only shifting 1 or 2
percent, that is not interesting to us because we are already
there. We are efficient, and we are penalized all the time for
our level of efficiency.
So we want the country to move as fast as possible to that
new model. It saves money, it is better care for the patients,
and we do not want to lose doctors in the Northwest just
because they get paid less because they are more efficient.
We hope that behind the 30-percent number are incentives
that really move people. Some of the previous discussions we
have had here of the Camp-Baucus bill--basically you are going
to move at a glacial pace. Even though you could say you had 30
percent in the new system, they would be moving so slowly you
are really just continuing to reward bad behavior.
Secretary Burwell. There is a secondary goal that I do not
think is covered in the article and that we have not had the
opportunity to discuss, and that is that any payer--so there
are really, we think, two classes of folks: folks who are
moving at the non-glacial pace, and those will be those who are
moving to full alternative payment models.
Then we also set a second goal, and that is about how the
percentage of any payment that anyone is doing would move to 85
and 90 percent over time. So we actually have set up goals that
are trying to encourage the speed in a larger group, but
accounting for the fact that there are those--and this will
probably be a conversation in rural areas and other places
where people are slower to move.
Senator Cantwell. Well, I look forward to discussing that
with you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Brown, you are up.
Senator Brown. Yes. Thank you, Mr. Chairman. And thank you,
Madam Secretary, for your focus on implementing the Affordable
Care Act and what it has meant to the literally hundreds and
hundreds of thousands of people in my State and your State of
West Virginia, your original home State of West Virginia.
I want to talk to you about the Children's Health Insurance
Program. I have spoken with Chairman Hatch about this and
Ranking Member Wyden. Chairman Hatch was one of the small
number of authors of this bill in 1997. We know what it has
meant. The uninsured rate among children in 1997 was 14
percent; today it is 7 percent. We know other things about
CHIP. We have modernized it. It works in its present form very
well today.
In my State it covers 130,000 children. Most of them are
sons and daughters of working parents, but they fall in a place
where they just were not getting health care because those
parents do not have insurance and do not have the income to
make those decisions to send their children to a family doctor
for preventive care, and other things.
I have several letters here, Mr. Chairman, if I could enter
them in the record, and I ask unanimous consent to do that.
The Chairman. Without objection.
[The letters appear in the appendix beginning on p. 51.]
Senator Brown. Thank you. These are letters from 40
Governors, including my Republican Governor John Kasich. Forty
Governors, both parties, have written to this committee to
stress how critical the current CHIP program is to their States
and the need to extend funding now rather than later.
Senator Casey and Senator Stabenow on this committee have
been particularly helpful in this effort. The majority of State
legislatures, as we know, finished their sessions within the
first few months of the year. Twenty States will adjourn in
just 3 months. More than half will have adjourned by June 1st
of this year. Congress needs to act swiftly to avoid any
disruption in children's coverage.
As you know, this bill, this law, is authorized up through
2019, but the funding runs out in September. That is the push
and the urgency for State legislatures. Just comment on, if you
would, the impact on States if we do not extend the funding of
the new CHIP, the current CHIP the way we do it now, if we do
not extend that funding soon.
Secretary Burwell. I would just reflect on my former role
as the head of OMB, as one trying to manage a situation where
you did not have predictability of funding, whether that was in
the form of a shut-down or another form. In terms of trying to
manage against that, it is very difficult to manage, especially
in the space of health care where there are contracts and
providers that must be paid.
So the urgency, what you are articulating from a management
perspective for the States, is extremely important. And I think
that is what is reflected in the letters that you have in your
hand. In terms of the conversations with the States, the States
need to have this predictability, and it is an important source
that they depend on in terms of providing health care for their
populations, especially for their vulnerable children.
Senator Brown. Thank you.
There are few things that this committee works on, a few
important major things, that have had the history of
bipartisanship that CHIP has. Again, 40 of the 50 Governors
support it. A number of people here have voted on this
legislation. Some have been around as long as I have and voted
on it in 1997. A number of them have voted for reauthorization.
It has passed this body's House and Senate overwhelmingly.
Let me shift to a second issue in my last minute and a
half: the Medicaid primary care parity provision in this year's
budget. A study published in the New England Journal of
Medicine found that parity in payment over the past 2 years has
led to an increase in appointments for Medicaid patients.
Unfortunately, the provision that authorized this parity in
payment between Medicaid and Medicare expired a month or so ago
at the end of 2014. Senator Murray and I introduced the
Insuring Access to Primary Care for Women and Children Act,
which would have extended this payment parity for 2 more years.
We were not able to enact that so far. Can you comment on the
importance of this provision in the President's fiscal year
2016 budget proposal?
Secretary Burwell. As you are reflecting, we have included
it in the President's budget, because we think it is important.
It comes down to one of the issues that we discussed a little
bit earlier, which is this question of provision of primary
care.
As we expand the number of people who are covered, making
sure that we translate access to actual care and better health
and wellness is what we are aiming to do. We believe that this
is a provision, based on the analytics that we have seen, that
can help us move forward on making sure that there is enough
care, and appropriate care.
Senator Brown. Is there a way to use the success of this
provision to help guide future conversations and policy
decisions around Medicaid payment reform in the future?
Secretary Burwell. I think all of these pieces and parts--
and whether it is the results that we see here in terms of
having people become a part of the system of providing that
care, and knowing that many people in Medicaid self-report that
they have quality care that is accessible and makes a
difference to them, that kind of step in terms of this
provision, as well as the kinds of things that Mr. Coats was
mentioning in terms of some of the reforms we are doing--I
think it is an important program. It is a cost-effective
program. We need to continue to look for the ways to make it
more effective, both in terms of the quality and the cost.
Senator Brown. Thank you, Madam Secretary.
Thank you, Mr. Chairman, very much.
The Chairman. Thank you, Senator.
Senator Heller?
Senator Heller. Mr. Chairman, thank you. I appreciate the
opportunity to have this discussion. I want to thank, also, the
Secretary for being here.
But I do want to raise a point of order, listening to the
discussion that you had with the ranking member and also with
Senator Cornyn. I guess I am a little confused. Again, as a
newer member of this panel, am I limited in the scope of
questions that I can ask witnesses?
The Chairman. No, there is no limitation. There may be some
questions raised from time to time, but no limitation.
Senator Heller. It was my understanding that if it is a
speculative question, based on the ranking member's comments,
that speculative questions are for the Judiciary Committee or
for some other committee other than this.
The Chairman. I think these questions were proper for this
committee.
Senator Wyden. Mr. Chairman, just on this point, I think it
is somewhat ironic that Senators file a brief challenging the
law on what I consider to be completely unfounded grounds, and
then demand that the Secretary explain how she plans to avert
the disaster that will occur if their brief is successful, if
they win. Now, we can sit here and debate, because I am like a
lawyer in name only. I was director of the Gray Panthers, so I
do not pretend to be a good lawyer. But I do think that we have
a huge challenge in terms of getting on top of this budget.
The Senator from Nevada is a thoughtful person, and I am
really looking forward to working with him in a bipartisan way
on these issues. I just hope this morning--what a quaint idea--
that we will focus on the topic at hand, which is the budget.
We can keep speculating and have this parade of hypotheticals.
As the chairman noted, we do not bar people from asking
questions, but I do think there is a little irony, as I noted
there.
The Chairman. Well, let me just add that these questions
are legitimate because they affect this Department more than
any other Department, and I was asking whether there are any
contingency plans. I mean, that is a normal question.
Senator Heller. Mr. Chairman, I agree with you.
The Chairman. And I understand that you may not have any
control over this at all in this administration.
Senator Heller, I will add a minute and a half to your
time.
Senator Heller. Thank you. I agree with you. I agree with
your questioning, and I also agree with Senator Cornyn's
questioning. The reason I bring it up is, we are going to have
Treasury Secretary Lew in front of us tomorrow, and if economic
models and interest rates are not all speculative, I just want
to make sure that I am not limited to the kind of questions
that I can ask the Treasury Secretary. But I will go forward.
Madam Secretary, I want to talk a little bit about the
Medicare backstop. You received a letter last week from Senator
Rubio, if you will recall that particular letter that came to
your office. I also sent a letter to your predecessor on the
same issues. As you are probably aware, the budget proposal
would reduce the bad debt payment from 65 percent to 25
percent.
Now, in Nevada we have 38 community hospitals. They handle
almost 250,000 annual admissions. There have been more than 2.7
million outpatients just last year. I am particularly concerned
for America's, and in particular Nevada's, rural hospitals,
many of which already operate on a very thin margin in order to
provide care to these patients.
So I guess, given the issue, I am troubled by the
administration's continued effort to significantly cut bad debt
payments. I am also concerned this will have a very real impact
on Nevada's hospitals and our senior population. If you would,
please, could you share your justification for this particular
policy?
Secretary Burwell. Senator, I care deeply about rural
America and these issues of rural hospitals. As I am sure you
can imagine, every time I have meetings, these are some of the
questions I ask. Overall in the budget, in terms of how we
support rural America in the areas of health care, there are a
number of investments, and whether that is the community health
centers, which disproportionately help rural America, or our
investments in health care providers for rural America, there
are a number of things that support that.
With regard to this specific question of this provision, as
we work to do something that I think you and others have said
is a priority--which is long-term change in terms of structural
reforms to entitlements so that we work on that long-term
deficit--what we have tried to do is put together a balanced
approach that both has effects on beneficiaries and has effects
on providers.
When we make the decisions and choices about what we
include, we try to do that on an analytical basis. In this
case, we are trying to be parallel to what is happening in the
private sector in terms of how they treat this issue. So we are
working to make sure that we are appropriately supporting rural
communities, a very important thing, the health care in those
communities and the economics of that.
But this is an issue that is a part of our broader approach
to making sure that we are addressing the long-term entitlement
issues, which we look forward to working on with the Congress.
If there are ideas, approaches, and specific policy changes
that others believe are better than ours with regard to the
package we have, we look forward to hearing those specifics.
Senator Heller. Thanks for the answer. I would suggest that
there is probably a real problem in some of the rural hospitals
outside of the State of Nevada, but I just want to go on
record, Mr. Chairman, that I do vehemently oppose these cuts. I
do not think it is an issue that is going to go away anytime
soon. So I remain concerned, but I hope that we can continue
the conversation at a future time.
Secretary Burwell. And I would welcome the alternatives and
ideas about how we should address these long-term entitlement
issues.
Senator Heller. Thank you. Thank you.
I have one quick question, and that has to do with the
projected savings in your budget. Last year you projected over
$414 billion over the next 10 years in savings, but this year
it has been reduced to $250 billion. Can you explain why the
proposed savings are so much less this year than compared to
last year?
Secretary Burwell. Two reasons. One is that some of the
savings, as we go year-by-year, we are getting some of the
savings in terms of the previous year, but it is also because
we have proposals in our budget. One of the proposals on the
mandatory side, which we net out so the number is a net number
instead of a gross number--the gross number still is $423
billion--but we decided that we would put in place investments.
Those investments are mainly in the area of early learning
and the idea of child care, and the idea that for working
Americans and people who are up to about 200 percent of
poverty, that it is almost $10,000 a year to have your child
cared for. If you have a child who is between zero and 3 and
you are in that income bracket, we believe we want to encourage
work and we want to encourage family. So by helping with this
child care issue, that is where the bulk of some of those
investments is made, so we made a choice.
The Chairman. All right. Thank you, Senator.
Senator Heller. Thank you.
The Chairman. Senator Bennet?
Senator Bennet. Thank you very much, Mr. Chairman. Thanks
for holding the hearing.
Madam Secretary, thank you for your responsiveness over the
last years. I appreciate very much the focus that precision
medicine has in this budget and in the President's address to
the Congress. In my home State, the University of Colorado
launched a large-scale effort last year across six hospitals,
including our children's hospital, around precision medicine. I
think we ought to do more to encourage the development of life-
saving therapies and ensure that they come to market. They are
important to both patients and the broader economy.
Senators Hatch, Burr, and I worked on expediting the
approval of these types of breakthrough therapies at FDA in
2012. Since 2012, this pathway has now successfully led, Mr.
Chairman, to 19 new breakthrough approvals, and 55 more are in
the pathway. So I wonder whether you could talk about why this
is receiving the emphasis it is in the budget and what the NIH
and FDA plan to do to collaborate with universities and the
private sector to help spur the development of these
breakthrough therapies or precision medicines.
Secretary Burwell. So in terms of the why and the emphasis
on it, as you are saying, there is a lot of energy and effort
that is already underway in the private sector. In terms of the
why, I think it is for two fundamental reasons. First, we
believe it can dramatically change how we provide health care
to individuals in this country.
The second reason is that we believe that this type of
innovation and this type of cutting-edge research should be
here at home, it should be in the United States, and that we
should make the commitment and make the funding available to
make sure we are supporting this research, because we believe
that is part of keeping our economy an innovation economy.
With regard to how the FDA and the NIH are going to work
together on these issues and work with the private sector,
first I want to express appreciation for the support that we
have received in terms of those FDA numbers that you have
given. We are moving to try to move things through faster. You
see that 19 and the 55 coming. NIH and FDA are both going to be
working together and working with the private sector.
One of the things it will mean to get the precision
medicine to work and be right is that data and information from
those entities in Colorado will be incorporated in the
thinking, and so it is going to take close partnerships. The
million-person study that we are talking about, we will be
working on closely with the institutes. We are actually getting
input on how we structure it up front, so organizations like
those that you talked about in Colorado, we look forward to
hearing from.
Senator Bennet. I think I should make two important points
just to quickly respond to that, then I have one other
question. It proves, I think--to the people around here who
say, all is lost all the time, we cannot improve anything, it
is a disaster at the FDA--that has been the go-to place for
people who want to innovate, both in the agency and outside the
agency. We ought to be doing more of that as we think about
what we are doing going forward.
Second, as you point out, this is about keeping American
jobs here and American innovation here and driving an economy
that is actually lifting the middle class. That was why we got
into that work to begin with, and it is actually working. So it
is a reminder that sometimes we can actually move beyond
rhetoric and accomplish something in a bipartisan way that has
meaningful results.
Last week, Senator Grassley and I, along with a number of
our colleagues on the Finance Committee--Senators Nelson,
Portman, and Brown--introduced the ACE Kids Act of 2015. This
bill would improve how Medicaid coordinates care for our
Nation's sickest children and seeks to reduce the burden on
families who often have to travel across State lines for their
children's care.
As you know, children who have complex medical conditions
make up roughly 6 percent of the children in Medicaid but
account for up to 40 percent of the program's costs. This issue
is especially challenging given that Medicaid is largely a
State-run program and these children often need highly
dedicated care in multiple States where certain specialists
live.
Given HHS's recent focus on alternative payment models and
the move away from fee-for-service, I just wanted to ask you
whether you had had a chance to look at that legislation,
whether your staff might be able to work with us to provide the
necessary technical assistance to get this bill over the finish
line.
Secretary Burwell. We look forward to working with you to
understand how we can address that issue that I think you are
articulating, which is, because Medicaid is State-based, how do
we make sure that that care is both high-quality and affordable
across State lines?
Senator Bennet. Thank you. Thank you, Madam Secretary.
Thank you, Mr. Chairman.
The Chairman. Well, thank you, Senator Bennet.
Senator Scott?
Senator Scott. Thank you, sir. I appreciate it very much.
Madam Secretary, it is good to see you again. I certainly
enjoyed talking to you yesterday as well, and I do appreciate
your responsiveness to the questions from Senators. You have
certainly established a positive reputation as it relates to
getting back with us. It is obvious that you care about having
a healthy relationship with Senators, and I hope my comments do
nothing to take away from that.
I will say that every dollar that we spend that we do not
have is taking money from a youngster, a young person who
cannot afford a lobbyist, a young person who cannot afford to
bear that burden, taking her future earnings without her
permission to use today and leaving her with a bill that is
utterly burdensome and a system that is broken as well.
When I think about Obamacare, I think about the fact that
it started off in 2009 at a cost of around $900 billion in the
estimate. CBO then changed that estimate to $1.8 trillion. Then
recently we have seen it go back down to about $1.35 trillion
by year 2025. It started with about 45 to 47 million Americans
uninsured. By the year 2024, according to CBO's estimates, we
will still have 31 million Americans uninsured after spending
$1.3 trillion at least, maybe $1.8 trillion, or maybe they will
change the estimate again.
At the same time, we are squeezing the health care
providers to a place where they simply cannot afford to provide
care to some of the patients who desperately need the
assistance. So having a card on the front end but having no one
to take care of you on the back end does not seem like
progress, as well as still having 31 million Americans
uninsured.
One of the reasons why I think you have had so many
questions about what happens in the King v. Burwell case is
because, when you look at the actual law itself and the
construction of the law from a financial perspective, with 31
or so changes to the law, delays to the law, we find ourselves
unprepared for a future that obviously is coming, it seems like
to me.
A couple of questions. I would like to go back to the King
v. Burwell question. You are a brilliant woman, without any
question. You have served very well. I think I voted for you
when you were up for OMB, so I have a lot of confidence in your
capabilities.
I remember the conversation that we had in the office. You
were on the MetLife board of directors. I cannot imagine a
member of a board talking to your CEO and asking him a question
about the possible scenario, maybe a probable scenario, that
there may be something that happens that will require the
company to be prepared for an outcome, a legal outcome, and the
answer is, ``I do not have a plan.'' I just do not see that as
a realistic outcome. The question I have heard over and over
again is simply, is there a contingency plan--not what is the
plan, but is there a plan?
Secretary Burwell. Senator, with regard to--and I think we
have been through this--right now in terms of this issue of
planning for a hypothetical for which there have not even been
oral arguments in front of the Supreme Court, what we are
spending time on, and what I am spending my time doing is
focusing on what I believe I am responsible for, which is
implementing the law that you all have given us as I understand
it. That is where, right now, my time is focused.
Senator Scott. So you have no margin at all to spend any
time focused on a probable outcome that could impact the
delivery system of health care in America? You have no time for
a contingency plan whatsoever?
Secretary Burwell. Right now, with regard to the issue of a
probable outcome, as I think I have said, I think we believe
that the position that we hold is a position that both
represents the letter of the law, for one--and I will let the
Justice Department articulate the reasoning around that--and we
recently wrote in the brief that we filed with regard to the
letter of the law, that certainly in the spirit of the law, the
idea that the U.S. Congress gave tax breaks to people in New
York but not people in New Jersey or other States is untenable.
We believe that in terms of the issue--you used the word
``probable.'' We believe that we are in a position that is the
right position.
Senator Scott. So section 1401 of the law specified that
people may receive a premium tax credit if they enroll through
an exchange established by the State under section 1311. So you
believe that there is no likelihood that the actual letters in
the law will have weight in the Supreme Court?
Secretary Burwell. With regard to the issue of the specific
arguments around the letter of the law, I am not a lawyer, and
I will defer to my colleagues at the Justice Department with
regard to the specifics of that, and we have filed a brief.
Senator Scott. So, no contingency plan.
Secretary Burwell. As I have said, right now what I am
focused on is what is before us now in terms of the most
important responsibility, to implement the law in a way that
serves the consumer. Between now and February 15th, that is my
deep focus.
Senator Scott. Thank you.
The Chairman. Thank you, Senator.
Senator Casey, at last you are next.
Senator Casey. Mr. Chairman, thank you very much. Secretary
Burwell, we are honored you are with us today. Let me say at
the outset that I have been in State government and the Federal
Government now for what I guess is about 18 years. I know
competence and integrity when I see it; I think you have
demonstrated that in this job, and I think you have
demonstrated that today.
I want to start with a list, and I will try to do these
quickly, because there is a lot to be positive about, not just
in your statement and in the budget presentation, but also the
impact of the ACA and other policies. Let me do this very
quickly, and then I will raise a point of contention. But I do
want to ask you about Medicaid--a couple of questions about
Medicaid.
First of all, with regard to the newly insured since ACA,
just a staggering number of Americans now are covered. I do not
have the exact number, but we are into the double-figure
millions, and that is significant. Next, the President's
proposal to extend funding for the Children's Health Insurance
Program for an additional 4 years: I was heartened and
encouraged by the proposal.
Just to give you a sense of what my State of Pennsylvania
has, right now we have, as of January, 147,464 children
enrolled. Our program is a little more than 20 years old, but I
do not know what we would do without the program. So Senator
Brown and others who have raised this issue repeatedly as I
have, we are heartened, and we just hope that your commitment
to it, the administration's commitment to CHIP, will be shared
by people in both parties.
I noted in another document the donut hole savings since
2010--meaning seniors who have to pay out of their own pocket
when they hit a prescription drug gap--the reversal of that has
meant savings of $11.5 billion, affecting more than 8 million
seniors. Eight in 10 customers in the Federal marketplace are
getting coverage for a hundred bucks when you factor in the tax
credit.
Next, funding for the National Institutes of Health: I
appreciate your commitment to increase funding for that, and I
believe that it should be bipartisan here, and I hope it will
continue to be. Early learning: I do not have time to go into
that, but I would like to note a great commitment by the
administration. Hospital readmissions are going down, literally
saving lives. According to your testimony, if you look at 2010
to 2013, hospital readmission reductions saved 50,000 lives and
$12 billion in health spending.
Child care: the commitment there is great. We will not have
time to go into that. Head Start, Early Head Start, home
visiting, rooting out waste and fraud--there is a long list of
positive investments, and I think we should not only celebrate
or note those achievements and commitments that I itemized, but
we should fight very hard here to support funding and any other
legislation to reach those goals.
I wanted to ask you, though, about Medicaid. The way I look
at Medicaid is, it is really the program for long-term care for
seniors, children, and individuals with disabilities. So
instead of thinking of the program, I try to think about who
gets the benefit of a great program. I am unalterably opposed
to any block-granting of Medicaid. It is a really bad idea, but
worse than that, it would be harmful to people.
I wanted to ask you, in light of this debate about what
happens to Medicaid, what happens to the--in our State, by one
estimate--about a quarter of a million seniors who depend upon
Medicaid for long-term care? What happens to those seniors?
What happens to the children in this country--by one estimate,
more than 30 million kids--if we go in the direction of block-
granting Medicaid?
Secretary Burwell. We believe that a block grant is
something that is harmful to those individuals because one of
two things happens: it is either harmful to the individuals or
harmful to the States in terms of if we have an economic
downturn, a change in the way care is provided.
What will happen is, without the flexibility to respond to
that, the beneficiaries will suffer. That is where the cuts
will go in terms of meeting the numbers. Either that will
happen, or it will go onto the State's balance sheet, so we
believe that is not a good approach to doing this.
As you know, we are working with States on waivers and
innovative approaches, but we believe that that is an approach
that--the reason we do not like that approach is because of the
damage it can do to beneficiaries, as well as to States,
potentially.
Senator Casey. Well, I appreciate that. I know my time is
running out. I will raise two issues and do most of it by
asking for written follow-up.
One is, children's hospital graduate medical education. We
have three hospitals that have been very dramatically impacted:
the Children's Hospital of Philadelphia, the Children's
Hospital in Pittsburgh, and St. Christopher's in Philadelphia.
I have a basic disagreement with the administration on this. We
still have the program in place. I was hoping for a much more
significant commitment beyond the $100 million. I think we are
getting great results for our kids because of that program, and
we will talk more about it.
I will submit a question on that, as well as, now that I am
out of time, the proposal regarding treatment foster care, also
known as therapeutic foster care, for giving foster parents the
kind of specialized training that they need to take care of
kids who have particular challenges. But I will do that by way
of a written question. But thank you for your testimony. Thanks
for being here and for your service.
[The questions appear in the appendix.]
Secretary Burwell. Thank you.
The Chairman. Thank you, Senator.
Senator Menendez?
Senator Menendez. Thank you, Mr. Chairman.
Thank you, Madam Secretary, for your service. I would like
to, in a very short period of time, see if we can cover four
topics: (1) the challenge of Medicaid enrollment in New Jersey;
(2) IP protections on biologics; (3) autism coverage; and (4)
the 2-midnight rule. First of all, before we go to that, I just
want to highlight a couple of key components of the President's
budget proposal that I believe are critically important for the
health and well-being of the most, in my view, important part
of the American population, and that is children.
These are the home visiting program and the CHIP program.
His budget calls for a very welcome $15 billion investment in
voluntary evidence-based home visiting, which has proven highly
successful in helping pregnant women, new mothers, and their
babies.
The budget also calls for a full extension of the CHIP
program, which has proven unmatched in extending health care to
children throughout the country. I strongly support these
programs, and I hope the committee works to extend them as soon
as possible. I look forward to working with you on that.
On the Medicaid enrollment question, there is a serious and
ongoing issue in New Jersey of an estimated 44,000 Medicaid
applications backlogged and still waiting to be processed. Now,
I believe you were in New Jersey recently. You may have heard
about this issue firsthand. Because of the backlog, people in
the State are either unsure of their coverage or are foregoing
care. It seems to me fundamentally wrong that if people are
eligible, that they are prevented from getting the health care
while their eligibility is being determined.
So when I have asked this question before, I was told that
CMS was considering measures to address it, both carrot and
stick approaches. Has CMS taken any administrative actions to
push States to clear their backlogs, and what about measures to
require States with significant application backlogs to provide
applicants with at least provisional coverage until their
application is fully completed, which is what a judge in
California ordered to be done?
Secretary Burwell. Senator, I will have to go back and
check, because my knowledge of the number--my understanding is,
we are at a much lower space from the 44,000. That is something
that I want to go check on, because my understanding is, with
regard to our 2014 backlog, that we are almost through that
backlog.
I want to come back on that specific issue because it
relates to the second part of your question. The work-around
that we have done with the State of New Jersey in using the
Federal marketplace to process things--and it is a flat file--
is the technology we are using to do that. We are through that,
and we are very close to full automation on the front end for
2015. So I think I need to make sure that our numbers----
Senator Menendez. Well, I hope that is the case. It would
be welcome news.
Secretary Burwell. Yes. If our numbers are----
Senator Menendez. But that is not my understanding----
Secretary Burwell. And so I want to go and make sure.
Senator Menendez [continuing]. In dealing with different
entities on the ground. All right.
New Jersey is home to some of the world's leading medical
researchers, who work every day to advance innovative biologic
therapies to combat disease and illness. In order to guarantee
that progress that often provides for both cost savings and
life-saving, life-enhancing drugs, we need intellectual
property protections.
I have difficulty in understanding how the administration
calls for a reduction in the patent protection for innovative,
complex biologics from 12 years to 7. When your fellow Cabinet
member, the U.S. Trade Ambassador, was here, he was telling me
that they are fighting robustly to keep the 12-year patent
exclusivity on the biologics prevailing in trade agreements.
So I do not know how he does that if we domestically are
seeking to undermine that, so have you been engaged with the
Trade Department on this particular question?
Secretary Burwell. Yes. And my understanding is that it is
not yet settled with regard to where we will be in TPP.
Senator Menendez. No, I understand that. But the question
is, if you come here and say we should reduce it from 12 to 7,
and he is negotiating with countries saying we should retain it
at 12, isn't that a fundamental flaw in our bargaining
position?
Secretary Burwell. With regard to the specifics, this is
something I will follow up on with the U.S. Trade
Representative. The administration's position is that we
believe, as reflected in our budget, that we should go to 7.
Senator Menendez. All right. Well, that is something that
we would have a real problem with.
Finally, autism coverage. When you were in your
confirmation hearing, we talked about this. I would like to
know--I am hearing from families who come to realize that their
plans lack or restrict these benefits, which is not what the
law calls for. I want to know whether HHS is doing everything
to ensure all critical autism services, including applied
behavior analysis, are in all qualified health plans. I keep
hearing from families that that is not the case.
And secondly, on the 2-midnight rule, I just want to say
this is something that Congress voted to delay for a period of
time as a result of last year's SGR bill. I do not get a sense
that much has been done with CMS and the hospitals, physicians,
and Medicare recovery contractors once the delay is lifted, in
terms of dealing with this question. Maybe you can inform the
committee.
Secretary Burwell. With regard to the 2-midnight rule, what
we would like to do is actually work with the Congress to make
sure that we can improve on that. The issue of medical
judgment, which is one that has been raised with us in terms of
the problems around that rule, is something we would like to
have a conversation about. As you stated, there are statutory
concerns, in terms of what we are doing. I think what we would
like to do is have the conversation so that we can move forward
and do it in a way that reflects medical judgment.
With regard to the autism issue, I just wanted to touch on
that briefly. What CMS has done is moved to have definitions
that will make it clearer, and hopefully that will help. I
think, as you know, the States are implementing the essential
health benefits and quality benefits. So the step we believe we
could take and did take was to try to get clearer definitions
with regard to those issues in autism.
Senator Menendez. Mr. Chairman, on the 2-midnight rule, I
will just point out that the extension that the Congress passed
ends at the end of next month. So unless we have the
wherewithal to figure out a way of moving forward, we are going
to have a problem again.
Thank you, Mr. Chairman.
The Chairman. Senator Portman? Let me see, is that right?
Senator Portman--all right.
Senator Portman. Thank you, Mr. Chairman. I appreciate it.
And, Madam Secretary, thank you for being here. Because my
colleague, Mr. Menendez, just talked about the 2-midnight rule,
I have to say that I share his concern over it. And look, I
spent time with rural hospitals back home, spent time with some
urban hospitals, and they just do not get it. It penalizes some
of our beneficiaries.
We have to come up with a common-sense way to address
hospital inpatient and observation stays. You are creating, by
promulgation of these rules--you are incentivizing behavior
that is actually going to cost us more in the end, so I hope
you will work with us on that.
I want to talk about three other things if I could,
quickly. One is substance abuse, the second is Medicare
Advantage, and the final one is the budget, since that is what
we are here to talk about.
With regard to Medicare Advantage, I have a strong concern
about the way in which there is a bias in the current way we
are evaluating the program. A little background on this:
yesterday I sent a letter to CMS, which was copied to you as
well. Senator Nelson and I, who is on this committee, co-
authored it, and we got 40 of our colleagues to sign up,
including 21 members of this committee on a bipartisan basis.
We made the very simple point that Medicare Advantage is
working. In Ohio, 38 percent of seniors are on it. More than 20
percent of those seniors, by the way, are either dual-eligibles
or other low-income seniors, so-called special needs cases. Our
satisfaction rate is 85 percent, so people like this program.
It provides them a comprehensive health care program,
integrated care, disease management that everybody talks about,
and this has been shown to lower costs and improve patient
care.
So Medicare Advantage is something that is working in my
State, and seniors like it, and yet CMS has this way that they
are evaluating the various health care programs that has a bias
with regard to our Medicare Advantage plans, in part because we
do take care of so many dual-eligibles and low-income seniors.
CMS claimed recently that it has taken steps toward
recognizing this problem through a Request for Information
analysis from MA plans that demonstrates this bias. So I would
want to bring this to your attention, but also ask you if you
have any thoughts today, quickly, on what are the agency's
plans for releasing the results of that analysis so we can see
it, so it is transparent, and for implementing a solution to
this problem.
Secretary Burwell. With regard to--we agree Medicare
Advantage is working. We believe that the changes that have
been put in place over a period of time have been effective, as
you are reflecting, whether it is the fact that 99 percent of
beneficiaries have access, or that the percentage of 4-star
plans has gone up to 67 percent, or that we have seen an
increase in the number of people enrolled. So we agree the
program is working.
With regard to the specific----
Senator Portman. Let me just say if I could, just for a
second, that people understand what you are talking about. If
you get a rating that has too few stars, then the plan can go
out of business. That happened in Ohio. We had a plan that was
serving a lot of low-income seniors that was actually run out
of business by this evaluation, so it is very important to get
the evaluation right. Sorry.
Secretary Burwell. It is important to get the evaluation
right. We appreciate the Congress's support in giving us money
to do studies on the question of the socioeconomic impact of
these measures. We are working through that, through the
analysis we have been given, and there are two places that that
is focused: one is Medicare Advantage and the other is
readmission.
But we know we cannot wait on that analysis, so we are
continuing, through CMS's regulatory process, to look at the
issues you have raised with regard to, how does the population
you serve impact these ratings?
Senator Portman. All right.
With regard to substance abuse, thank you for your
willingness to put in the budget a comprehensive look at what
is a growing problem in my State and around the country, which
is opiate addiction. Prescription drugs less so, now more
heroin, which is less expensive and causing a huge problem.
The number-one cause of death in Ohio today is heroin
overdoses. It has now surpassed traffic accidents. The
comprehensive strategy has to include prevention, it has to
include treatment, it has to include recovery, and it has to
include some new and innovative medical interventions to try to
deal with the treatment and recovery side. So I thank you for
that.
As you know, Senator Whitehouse and I have proposed
legislation to address these issues in a comprehensive way. We
would like to work with you on that. We would love your help on
that to try to get some more co-sponsors and try to get that to
the floor, but I think this is a problem that for too long we
have kind of swept under the rug, and it is time to deal with
it in a comprehensive way.
Secretary Burwell. I appreciate your leadership and have
publicly recognized that leadership as part of our thought that
this is a place where there is bipartisan energy to do this,
not just with the Congress but also with Governors as well. So,
I look forward to working with you on the areas you outlined.
Those are the areas that we believe are the right strategic
approach.
Senator Portman. Well, and I do think HHS has a unique role
to play in terms of best practices and research.
The final question is just on the budget. We have very
little time left, but the obvious problem in our budget is
health care. I remember when I left OMB, maybe when you left
OMB, you had the same reaction. People said, what is the
problem with the budget? Is it the tax system? Is it the wars
overseas? Honestly, it is health care. Health care is driving
these long-term projections that are simply unsustainable.
So I would say what I have told you before in your
nomination hearings and so on: we are looking for help. I mean,
Congress is hesitant to take on some of these issues because
they are controversial, politically difficult. I look at your
budget again and I think, you have taken health care costs over
the next 10 years from increasing 105 percent, so more than a
doubling, down to 99 percent, and you are taking credit for
that.
When I look at the changes, frankly, a lot of them are not
sustainable in my view, because they are cutting providers more
in a way that has not been sustainable in the past. I think it
would drive some providers away from providing Medicare
coverage because of the way you do it.
So my only question is, when are we going to get serious
about this? How do we get serious about it? If we do not,
obviously we are not going to be able to deal with this
historic level of debt we have. It has presented the economy,
as you know, within the next 10 years, based on the
Congressional Budget Office, with levels we have not seen since
World War II.
Secretary Burwell. With regard to the issue, I think we
have put out proposals that we believe are a way of dealing
with it in specific terms. Whether it is the proposal on
Medicare Advantage and how we are implementing certain rules or
some of the other things that your colleagues have raised on
this side--some of our colleagues raised other concerns with
our proposals. So we are proposing things that we believe, put
together, create a balanced approach that does things on the
provider side and does things on the other side.
Senator Portman. My time has expired, and we have others
who need to talk----
Secretary Burwell. What we would like to do----
Senator Portman [continuing]. But let me just make the
obvious point, which is, we are still seeing under your budget
a doubling of health care costs--and by the way, driven by a
lot of things, but one is Obamacare--and significant increases
in health care costs through that, about 62 percent of it,
according to CBO. So these are issues that we are making worse,
not better, by adding more entitlements that I hope we will get
serious about addressing.
Secretary Burwell. I do think it is important though to
reflect that, in terms of Medicare cost growth on a per capita
basis, it has been almost nearly flat in the past few years.
Senator Portman. And why do you think that is? Sorry, Mr.
Chairman. Just give me one second.
Secretary Burwell. I think that there are a number of
reasons. And this, though, gets to the point of the out-years.
We as a Nation have a baby boom generation coming through. The
number of people who are going to be on Medicare is going to be
larger. As a Nation, we are going to have to make a decision
about how we feel about that during the time in which that
group of people has to pass through.
I think we are just going to have to make a decision about,
what are we willing to do and how are we willing to think about
that in terms of the choices that we make? Those choices come
in the form of those people and the commitments that we have
made, which I think both sides of the aisle believe that we
should make good on, versus other changes.
Senator Portman. Let me just--I know I am out of time. Let
me just make the point here, again, that the Congressional
Budget Office says--not Republicans, this is not me saying
this--the main driver of that cost reduction in Medicare is
Medicare Part D.
Where we allow competition, where we have transparency,
where you have insurance companies competing for the business
of our seniors, that is not the Obamacare model--which again,
if you look at the analysis, Obamacare is responsible for 62
percent of the growth in Federal health care spending, and the
age of the population, which you just talked about, the aging
of the population is the reason for 21 percent. So we have to
get serious about looking at what is actually working.
When Marilyn Tavenner, CMS Administrator, was before this
committee, she said the actual costs on Part D are now 40
percent less than the original estimates, and this analysis by
the agency responsible for the Federal budget shows that Part D
is by far the main reason we have seen this reduction in
Medicare spending. So my time has expired, but I look forward
to continuing the conversation.
Secretary Burwell. Thank you.
Senator Thune [presiding]. Thank you, Senator Portman.
Senator Isakson?
Senator Isakson. Thank you, Senator Thune. And you were
doing great, so I did not mind you taking the time. I would
just put a little asterisk in there. Long-term entitlement
reform is really one of the keys to getting the macro problem
solved. I mean, the longer we wait in doing that, the worse it
is going to be in terms of the debt in the out-years, and I
appreciate your focus on that.
I want to take my 5 minutes to talk about the 10 minutes of
your time I took last year. I had the benefit of being on the
HELP Committee and the Finance Committee. Your confirmation
came up, so I got two bites at the apple, and I used all 10
minutes to hold your feet to the fire on the Port of Savannah
and getting it as a continuing project in the budget, until we
finalized what had been a 16-year effort.
I want to publicly thank you for doing everything that you
said you would do last year and acknowledge that, in this
year's budget submitted by the President, it is a continuing
project funded at $21 million for fiscal years 2015 and 2016.
We thank you very much for that.
Secretary Burwell. Thank you. Thank you, Senator.
Senator Isakson. Now, back to the subject at hand. As
chairman of the Veterans Committee, I had a town hall meeting
at the VA yesterday. There were four of us: the ranking members
of the House and Senate and the chairs of the House and Senate.
We spent 3 hours with over 400 employees of the VA, and we were
on a nationally televised hook-up with every VA office in the
country--340,000 employees in veterans' health care.
We found out yesterday morning, just as we were walking
into that meeting, that the President's budget would portend
that some of the Veterans Choice appropriations that were
approved in the authorization last year might be moved if the
utilization of Veterans Choice was not as great as it appeared
it was going to be.
That really bothered me a lot, because we spent a lot of
time last year debating the Veterans Choice Act, which would
give veterans who live more than 40 miles from a VA facility,
or veterans who could not get an appointment within 30 days, a
chance to go to the private sector to a Medicare-approved
physician and get the treatment that they needed. We have only
had 1 month where that bill has been in effect, and that was
the month of December, where we have the numbers.
In the month of December, of the 8.5 million veterans who
received Veterans Choice cards, 150,000 actually inquired about
an appointment. That is not enough evidence to tell you if it
is going to be over-utilized or under-utilized, but I want to
make sure the administration does not assume for some misguided
reason that Veterans Choice is not going to be what it was
expected to be when we passed it last year.
It is our one chance to see to it that we keep the promise
to our veterans, we keep the veterans' health services from
becoming such a huge organization that it is totally
mismanaged, or totally under-managed. And by the way, Secretary
McDonald is doing a phenomenal job. He is applying business
practices, he is serving without pay, he is doing everything
you would ever ask a public servant to do. But if the
administration is considering proposing cuts in Veterans Choice
in the 2-year window that we appropriated last year, we are
going to have some serious problems.
Secretary Burwell. In terms of the VA budget and those VA
issues, I would let Secretary McDonald speak to them. With
regard to our interaction with VA, we continue to work on the
areas and issues where we can. One of the most important places
for us is in the mental health space, and we continue to work
with VA.
The other place that is very important, and it does get to
the care issue, is in the Office of the National Coordinator
for Electronic Medical Records, because that is an important
part of making sure that our veterans get the care they need,
when they need it, where they need it, with the information
they need. So those are the two places we interact, but I hear
the point and will make sure that I share it with Secretary
McDonald and others in the administration.
Senator Isakson. And we want to acknowledge to the
President our appreciation that he signed the Clay Hunt
Veterans Suicide Prevention bill yesterday. It is the single
biggest problem facing us, and the VA is doing a good job of
trying to get their arms around it. We have to stay the course
and keep to the task.
Secretary Burwell. Which is where we interact in terms of
our substance abuse and mental health efforts in HHS, in terms
of working on mental health issues and supporting the VA and
our veterans in trying to work through those issues and make
sure they have the care, the prevention, and the treatment that
they need.
Senator Isakson. One last question, Mr. Chairman, if I can.
In your proposal, you talk about adopting the bicameral
agreement from last year and repealing and replacing the
Sustainable Growth Rate. Is that correct?
Secretary Burwell. What we have said is, we support this
effort of moving forward. It is in our budget. We proposed both
not letting the cuts occur as well as reforms in our budget. We
are hopeful that this can be a bipartisan effort that will
occur this year.
Senator Isakson. If I read the budget right, you assume the
cost of repealing and replacing the SGR at $44 billion? The
estimate out of CBO was $177 billion. What is the difference?
Secretary Burwell. What the difference is, is there are two
parts. When we assumed not doing the cuts, we built that into
our baseline, so it is paid for in that way. There are also
reforms that have been proposed, and the legislation that you
are referring to actually has costs, and that is the number
that you are seeing. That $44 billion is the number you are
seeing in terms of the improvements, and some of those have
costs, but in terms of the overall improvements, which is the
bigger part, which is the cliff, that is in our baseline.
Senator Isakson. Well, thank you for your service and your
time.
Secretary Burwell. Thank you.
Senator Thune. Thank you, Senator Isakson.
Secretary Burwell, a couple quick questions here. We have
nine Indian tribes in my home State of South Dakota, so we have
thousands of American Indians who depend on IHS in my State. My
staff works regularly with the Office of Congressional Affairs,
and previously officials from the Great Plains office, but
unfortunately we are finding it difficult to get timely
responses to our inquiries.
In fact, a recent example that comes to mind is the
response I received last week from the IHS to a letter that we
mailed 11 months ago. Additionally, my staff was recently
prohibited from visiting an IHS facility without clearance,
which took weeks to obtain from headquarters, which I believe
is another example of just a lack of transparency and
responsiveness.
I am wondering if you could speak to why the regional
office has been instructed to not engage in even providing
basic information to my staff or why my staff has been unable
to visit IHS facilities without prior clearance from
headquarters.
Secretary Burwell. Senator, these are both examples that, I
apologize, I do not know about. I will look into them and get
back to you. I am hopeful--I think you know in the budget there
are a number of proposals that we have with regard to IHS that
are important, and I apologize that I do not know each of your
tribes and whether they fall under direct support or not.
But there are a number of proposals for the tribes that do
receive direct support that I think are extremely important to
making sure we provide appropriate care, so I want to look into
these issues. I know your leadership on this issue, and I am
hopeful that we can work together, because I think there are
some very important things to do with regard to the quality of
care and providing that care and not cannibalizing the care
that we are providing. I will not go into that; I know you are
familiar with the----
Senator Thune. All right. Well, I appreciate that. I wanted
to hear you commit to ensuring that the communication improves
and that these inquiries get responded to in a more timely way.
Secretary Burwell. I will follow up on both of those
things.
Senator Thune. The other thing I wanted to mention with
regard to IHS is that, what we hear from providers who
participate in the IHS Purchased/Referred Care program is that
there is a frustration with the time and significant cost it
takes to process claims.
So, as a result of that, last fall my staff convened a
working group in South Dakota that included IHS, private
providers, and tribal representatives to discuss ways that we
could improve that claims administration process. As a result
of that meeting, we have a commitment from the stakeholders to
continue to discuss this issue in follow-up meetings.
But one particular area of improvement that was suggested
was to use electronic mechanisms to exchange information in the
processes, in the claims and payment processes. So in the PRC
program, claims are still being mailed in paper form back and
forth. It seems that the focus to move providers and payers to
electronic health records should include the IHS and their
relationship with private providers.
So is that something that you agree with? I mean, using a
paper claims process seems to be very antiquated, inefficient,
and ought to be changed. So would you commit to working with us
and with other stakeholders on a way that we can achieve some
program efficiencies that might include and incorporate
electronic records?
Secretary Burwell. Yes, and we would like to hear what you
are hearing. When I met with the Secretary's Tribal Advisory
Committee about these issues, one of the things that they are
raising is, as we push to have electronic medical records in
the tribes, the question of their ability to do that and on
what time table.
We would welcome the conversation, because I think it will
help with the issue you are talking about in terms of our
claims processing. They have expressed some concerns, but this
is a place where, let us see what we can do to move the ball
forward, including ways to think about assisting and helping
them with moving towards the electronic medical records,
because it will help with the other issues.
Senator Thune. All right.
Secretary Burwell. And the other thing is, though, this
does also get to predictability and funding.
Senator Thune. Right.
Secretary Burwell. Which gets to some of the other issues
in the budget in terms of those payments of claims.
Senator Thune. Right. A final point. The world of tele-
health, digital medicine, has grown by leaps and bounds in the
last few years, but it seems like the regulatory regime that
sort of governs that, particularly related to payment and use
of tele-health, has not kept pace. So the question is, what can
HHS do to evaluate the current regulatory environment and make
changes to catch up and keep up?
We have seen a lot of pioneering work done in my State with
the use of tele-medicine, but it is very, very hard to deal
with all the payment issues and some of the bureaucratic
regulatory issues that seem very outdated relative to the
technology that I think would be incredibly effective in
meeting health care needs, particularly in rural areas.
Secretary Burwell. So, one, I continue to work on these
issues and have made some progress, but I think you are right
in terms of, there is this place where we can continue to make
progress.
I think one of the ways to do that is to make this a part
of the conversation on delivery system reform, because it is a
way that we can provide greater quality care and a more
efficient way of doing it. So, I think we need to make it a
part of that.
I think the other thing is how we have the conversation
with those who are not as supportive of changes in this space
in terms of using tele-health as care. So those are the two
things. I think having it sit within delivery system reform is
important, and then the second thing is how we can work
together with those who oppose greater speed with regard to
moving it forward.
Senator Thune. Yes. All right. My time is up. Thank you,
Madam Secretary.
Senator Carper?
Secretary Burwell. Thank you.
Senator Carper. Thank you, Mr. Chairman.
Madam Secretary, great to see you. Thanks for your
leadership and your service in so many different roles for our
country. I am concerned. I am sorry I could not be here
earlier; we got bounced back and forth between three different
hearings, all of which are really terrific and important
hearings.
I am concerned about the funding cliff that is faced by our
federally qualified community health centers. We know it is a
steep cliff. I understand from the President's budget that he
calls for addressing the funding cliff with a multi-year
solution to provide stable and maybe more predictable funding
to these essential health centers.
Could you just talk about the effects of our failing to
address this funding cliff? I want to ask if we can count on
the administration's commitment, your commitment, to working
with us to make sure that health care centers receive
sufficient funding to continue their investments in care and
service to meet the needs of our communities.
Secretary Burwell. With regard to our budget, we actually
both address the funding cliff but also address that we believe
that there are greater needs. Our budget actually funds 75 new
health centers, and those are generally for under-served
communities, often rural but not always, around the country. So
our commitment is to address the funding cliff which we think
would have a very detrimental effect on those health centers.
I have traveled around the country, seen the folks who are
being served by those centers, and it is a very important part
of serving communities around the country, in terms of millions
who are receiving their care at these centers, and so a cliff
would mean a dramatic change for them.
Senator Carper. Thank you. Thanks very much.
From my earlier conversations, past conversations, you know
I am a big supporter of your ongoing efforts to move our
country's health care system away from volume-based toward
value-based payment for care. Your announcement last week to
push forward with the ambitious goal of moving, I think, nearly
all Medicare payments into these value-based arrangements by, I
think, 2018 helps, I think, solidify this promising future.
Delaware, as you know, is right beside you, and we are
grateful that our State has received a State innovation model
grant so that we can design and test payment and service
delivery models. Providers in my little State are, even at this
moment, rightly concerned about the financial implications of a
transition to value-based payment models, but they are actively
working together with State officials and across payers to
figure out how to make this shift.
Here is my question. Would you please discuss with us some
of the improvements in health care outcomes as well as cost
savings that may have already been realized in the last few
years due to value-based Medicare reimbursements and the
demonstration of new payment arrangements in various States?
Secretary Burwell. With regard to value-based payments, we
are starting to move forward, and we see that there are
providers who are receiving the benefits and rewards of those,
and there are also those providers who are in the bottom part
of what they are doing who are receiving the payment cuts, and
so we are starting to see that.
With regard to some of the models that we are using, the
alternative payment models, one of the things that we are
seeing is how Accountable Care Organizations are working, and
we are already seeing the actual financial savings in that, up
into the hundreds of millions of dollars, in terms of what we
think we can do there.
One of the things we want to do is continue--and this is
something that our budget talks about--making sure that we have
the flexibility so that, as we go, we learn and we incorporate
the things that they believe will be the right incentives.
We discussed this with Senator Cantwell when she was here,
in terms of making sure we have the right incentives to keep
people moving on that path and addressing the various kinds of
issues. As you said, they are moving, but there are concerns
that get raised.
Senator Carper. All right. Thank you.
Another issue that Tom Coburn and I, a former colleague
from Oklahoma, have talked with you and your predecessors about
ad nauseam is the improper payments. It has been on the high-
risk list for the GAO, the Government Accountability Office,
forever, and it remains there.
A number of years ago we--Dr. Coburn and I, in the Bush
administration and then in the Obama administration--focused,
focused, focused on this with GAO and started to see that
number being driven down, which is good. It is over $100
billion a year, as you know, government-wide.
This last round, we have seen some reduction in improper
payments in a variety of parts of our government, but not in
Medicare. In fact, we saw a bump-up in Medicare, and it
concerns me. If you could, just talk about that. Should we be
concerned? Are you concerned? What can you do, your Department
do, what can we do to help reverse that and get it headed back
down?
Secretary Burwell. There are a number of things that we can
do, I think, to do that. Within Medicare, in terms of A, B, C,
and D, the different parts of Medicare, we see actually some of
it continuing on the right path and some of it not, so there
are places within Medicare that we think are directionally
correct in terms of that continuing downward trend on the issue
of doing better on our program integrity.
I think in our budget, we propose funding that we think is
important to continuing these efforts. I think we also need to
work through efforts--and we have talked a little bit here
today about some of the rules and some of the regulations here
that are statutorily on hold for reasons that people have
raised issues with.
But I think what we need to do is work through those
concerns so that we can continue on the path, in terms of
making sure we are recovering those improper payments. We have
seen, I think as you know, some record returns in terms of the
issues specifically around fraud, an 8 to 1 return and a record
year in 2013 in terms of what we are getting in. We want to
continue working on that, and we do not want to be in a pay-
and-chase mode, but a more preventative mode. So those are some
of the things we are doing. The budget focuses on this
specifically in terms of some of the funding that we have asked
for.
Senator Carper. Good. Well, I think we agree it is
important to continue our efforts, and we want to be helpful.
Let us know how we can do that. Thank you.
Secretary Burwell. Thank you.
Senator Carper. And again, thanks for your service.
Secretary Burwell. Thank you.
Senator Isakson [presiding]. Secretary Burwell, I think
Senator Wyden has an additional question, if you do not mind.
Senator Wyden. Thank you, Senator Isakson. Two questions,
just very briefly. It has been a long morning, and you have
been very patient.
Madam Secretary, Senator Isakson and I, and colleagues on
both sides, have taken a special interest in Alzheimer's. As
you know, Alzheimer's is just hitting millions of American
families like a wrecking ball. What we see is families just
really being in agony because they cannot even pay for the kind
of care that they want their loved one to have.
My question is, I think it is understood that the fight
against Alzheimer's now has scores of private entities,
companies, researchers, and others, and there are some public
institutions obviously involved as well. Your Department holds
a couple of pieces of the puzzle. The research area is one.
Certainly we have been talking about chronic disease and how we
are going to come up with a coordinated system of caring for
those with chronic disease, of which Alzheimer's is right up at
the top.
But there is one question that I get asked all the time,
and it really is what I wanted to touch on today, and maybe we
are just going to begin to have this discussion. But whose job,
in your view, is it to try to put together a game plan to beat
Alzheimer's? We have this array of private and public parties,
people who are working very hard and mean well. Is there any
discussion that you know of that even focuses on who might be,
or the group of people who would be tasked with coming up with
a plan to beat this horrible scourge that is taking such a toll
on our families?
Secretary Burwell. With regard to the question of beating
it, I think you know that in this budget we have almost $3.2
billion committed to these issues, and, as you said, we are a
payer. The largest portion of that is in what we pay in
Medicare in terms of paying for the care that you mentioned. We
are the researcher, in terms of how we add to the research, and
we have increases in that that you see in NIH.
I think the question of beating it--we actually need to
make progress on the research and understanding the science so
that we can work toward that. We need to make sure that we are
helping families afford the care that they are seeking.
Then the third element actually is about how people
actually go through this process and whether you are the
individual who is suffering or the caregiver. That falls under
the Administration for Community Living. So this question of
beating it, I think, has three fundamental elements to it:
research, pay for care, as well as how you handle it.
One of the things that I think is important is that the
Administration for Community Living--and I should mention there
are also other elements of HHS that have small bits, but those
are the main ones. I think one of the places where we can focus
this year is in the White House Conference on Aging and using
that as an opportunity to bring together some of these pieces.
Within our budget, what you see is the energy that is leading
up to the increase in NIH and the increase in the ACL.
Senator Wyden. Let us do this. I know this question caught
you cold. You and I talk about a lot of stuff. I have not asked
that particular question before. I want to continue this. Maybe
the White House Conference on Aging is the place to do it, but
it just seems to me that this is something that has to be put
that way. How do you put in place a game plan to beat it?
One last question if I might, Mr. Chairman, very quickly,
and it deals with something else that this committee is tasked
with and is very important, and that is foster care. Now, as
you know, Madam Secretary, the big foster care program, I guess
it is called title IV-E, does not kick in until a child is
removed from their home. And I think you all are talking now
about some approaches to really come up with preventive
services for kids who are candidates for foster care but are
not quite there.
Senator Isakson has been incredibly patient. Why don't you
give me a brief answer, if you could, in terms of how this
might work for an individual kid? In other words, you have a
real kid, and you want to get that child, he or she, preventive
services. How do you do it?
Secretary Burwell. So right now, the question of getting
that child preventative services, what would happen at the
point at which the child is near removal, they would just end
up being removed. And what we can do is get in and provide the
support to the States and communities in providing services so
their parents, their existing family before they are removed,
could get some support.
Maybe that is respite care because the child has certain
issues, maybe that is other services that the child needs. But
what happens is, in the system now, too often the answer is,
just move the child versus, can we understand the underlying
causes?
So what we want to do is create the flexibility that
funding can be used to try to address causes and things that
could help keep the child safely in the existing setting. We
believe that can be better for the child. We want to do it
always in a safe way, but we believe we need some flexibility
to be able to do that in terms of how our funding can currently
be used.
Senator Wyden. Senator Isakson, you are going to wrap up.
Senator Isakson. Thank you, Senator Wyden. Thank you very
much, Secretary Burwell, for your appearance today. I want to
thank all the Senators who appeared and questioned today. It
has been a good hearing, I think, and a long one. Thanks for
your patience.
Any questions for the record should be submitted no later
than Wednesday, February 11th.
This hearing stands adjourned.
[Whereupon, at 12:35 p.m., the hearing was concluded.]
A P P E N D I X
Additional Material Submitted for the Record
----------
Letters Submitted by Hon. Sherrod Brown,
a U.S. Senator From Ohio
Office of the Governor State Capitol
Montgomery, Alabama 36130
Robert Bentley (334) 242-7100
Governor Fax: (334) 242-3282
State of Alabama
November 6, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
Committee on Energy and Commerce Committee on Finance
2125 Rayburn House Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
Committee on Energy and Commerce Committee on Finance
2125 Rayburn House Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
Dear Chairman Upton, Chairman Wyden, Ranking Member Waxman and Ranking
Member Hatch:
Thank you for seeking governors' input on the Children's Health
Insurance Program (CHIP). This important state-federal partnership
provides access to vital health care services for many Alabama
children, and I encourage Congress to act soon to extend CHIP for four
years.
CHIP in Alabama
As of June 2014, Alabama had 86,218 people enrolled in CHIP: 57,872
were emailed in ALL Kids (Alabama's separate CHIP) and 28,346 were
enrolled in the Medicaid portion of CHIP. Among Alabama's CHIP
enrollees, 58 percent are 12 or younger and 42 percent are 13 to 18
years of age. Also, 49 percent are white, 25 percent are black and 26
percent are Hispanic or have other racial or ethnic backgrounds. In
addition, 33 percent of our enrollees are in families with incomes of
100 to 141 percent of the federal poverty level, 43 percent are in
families with incomes of 142 to 200 percent of the poverty level and 24
percent are in families with incomes of 201 to 312 percent of the
poverty level.
Changes to CHIP as a Result of the Patient Protection and Affordable
Care Act (PPACA)
Alabama's CHIP, at the federal government's direction, moved about
23,000 children to Medicaid on January 1, 2014. Medicaid provides the
children with health care, but the care is funded by CHIP. Also,
Alabama has built a new eligibility system to meet requirements of
PPACA. The system has a rules-based engine for determining eligibility
for both Medicaid and CHIP based on modified adjusted gross incomes.
The system also interacts with the federally facilitated Market place,
the Internal Revenue Service and the Federal Data Hub. In addition,
Alabama's CHIP erased a three-month waiting period to comply with
PPACA.
Unique Benefits in Alabama's CHIP
Alabama's CHIP provides nutritional counseling and extra primary care
office visits for obese children. Also, Alabama's CHIP generally has
lower copays than other insurance plans.
CHIP Extension
Congress should extend CHIP funding for four years to provide health
care for many of our children. I ask that Congress act soon. We have
started budgeting for the 2016 fiscal year, and CHIP's funding
uncertainty complicates that task. The uncertainty of CHIP funding is
also stressful for parents trying to make sure their children have
health insurance.
Alabama does not have precise estimates of the number of children who
would be uninsured without CHIP, but the number likely would be large.
Many CHIP enrollees could have access to health insurance through a
parent's employer, but the coverage almost certainly would cost more
and might be unaffordable. Also, family coverage for policies bought on
the Marketplace likely would be out of reach for many CHIP families.
People cannot qualify for tax credits to lower the cost of Marketplace
policies if single coverage available through an employer would cost
9.5 percent or less of household income. The tax credits are
unavailable even if family coverage through an employer would cost 20
percent or more of household income. Without CHIP, many of our children
will be uninsured.
Unspent Allotments
Unspent federal allotments have not been a problem for Alabama. The
funding formula, however, may need to be adjusted to ensure that
Alabama and other states have adequate allotments to cover CHIP
spending. Without carryover funds from 2010, funding provided to
Alabama in the 2011 fiscal year would not have covered costs.
Uninsured Rate
Before CHIP, the uninsured rate for children in Alabama was 15 percent.
In 2013, the uninsured rate for children in Alabama was 8.2 percent.
That rate could fall even further if the Federal Medical Assistance
Percentage for CHIP is raised by 23 percentage points as called for by
PPACA starting in the 2016 fiscal year.
CHIP is successful. It was started to give kids access to health
insurance. There is still a need for it. Through CHIP, Congress has
provided routine care and life-saving care for our children. I ask you
to extend CHIP funding for four years, and to do it soon. Thank you for
giving me the chance to comment on this vital program. Please contact
my office if we may assist you further.
Robert Bentley
Governor
______
The State of ALASKA
GOVERNOR SEAN PARNELL
Department of Health and Social Services
office of the commissioner
Anchorage
3601 C Street, Suite 902
Anchorage, Alaska 99503-5923
Main: 907.269.7800
Fax: 907.269.0060
Juneau
350 Main Street, Suite 404
Juneau, Alaska 99801-1149
Main: 907.465.3030
October 23, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
Committee on Energy and Commerce Committee on Finance
United State House of
Representatives United States Senate
2125 Rayburn House Office Building 221 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
The Honorable Henry Waxman The Honorable Orrin Hatch
Ranking Member Ranking Member
Committee on Energy and Commerce Committee on Finance
United State House of
Representatives United States Senate
2204 Rayburn House Office Building 104 Hart Senate Office Building
Washington, DC 20515 Washington, DC 20510
Dear Congressmen Upton and Waxman and Senators Wyden and Hatch,
In response to your letter to Governor Sean Parnell, dated July 29,
2014, regarding Children's Health Insurance Program (CHIP) funding and
additional information that would be helpful as you work through the
funding extension process, please find the following response to your
questions:
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics)?
We had 10,725 children enrolled on the last day of the quarter
ending September 30, 2013.
Our eligibility standards for the program are:
- Ages 0-5: 160-203 percent of the federal poverty level
- Ages 6-18: 125-203 percent of the federal poverty level
At the State level, the Medicaid agency has demonstrated
improvement in children's quality of care as shown through the
15 children's quality measures.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
There have been no substantive changes, with the exception of
those due to modified adjusted gross income (MAGI) and the
conversion to Survey of Income and Program Participation (SIPP)
plus one percent standards required under the PPACA.
The MAGI SIPP conversion requirements are a direct impact of
PPACA, as the law requires us to include income disregarded
under prior law.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state under
CHIP that are not comparably available through your state's
exchange or through the majority of employer sponsored health plans
in your state.
The early periodic screening diagnosis and treatment (EPSDT)
comprehensive child coverage is available to all children
enrolled in Medicaid in Alaska. Therefore, the coverage
available to the CHIP population is much more comprehensive
that the coverage which is available in the Health Insurance
Marketplace. Additionally, there is no cost sharing in Alaska's
CHIP program. Some services that CHIP provides that private
insurance may not are:
- Inpatient and outpatient behavioral health services
- Vision exams and corrective lenses
- Hearing exams and hearing aids
- Physical and occupational therapy
- Services for speech, hearing and language disorders
- Durable Medical Equipment
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe CHIP
funding should be extended, what coverage (if any) do you believe
CHIP enrollees in your state would be able to obtain? How many
children covered by CHIP do you estimate would become uninsured in
the absence of CHIP?
The State of Alaska recommends that CHIP funding be extended at
least through September 30, 2019 to match the maintenance of
eligibility requirements (MOE) under the PPACA.
Alaska is an M-CHIP state. We do not have a free-standing CHIP
program, so the 10,725 enrolled children will have coverage
through September 30, 2019.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting in 2009 have
been sufficient and the formula is working appropriately? Do you
believe there is a need for Congress to further address the issue
of unspent allotments?
Yes, the CHIPRA federal funding allotment formulas and
methodologies have worked well for Alaska.
States have two years to spend their allotments so the Fiscal
Year 2015 allotment could go out through September 30, 2016. If
Congress does not extend CHIP funding, the unspent allotments
should be addressed.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component to that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of the
uninsured, and improve health outcomes for children in your state?
Yes, the federal government could assist in enrolling eligible
children by continuing to support the express lane eligibility
provision between child health and social/human service
programs, and by working to standardize the basic eligibility
requirements across all programs.
The quality improvement work under the CHIPRA children's quality
demonstration grants has been very helpful to Alaska Medicaid/
CHIP programs. We would recommend the continuation of the
children's quality improvement work.
The State of Alaska supports the CHIP program, as it gives much needed
coverage to approximately three million children nationwide. As state
earlier, the CHIP program in Alaska allows children to receive coverage
for services that private health insurance and the Exchange may not
cover.
If you need any additional information please feel free to contact me.
Sincerely, William J. Streur
Commissioner
Alaska Department of Health and Social Services
State of Arizona
Janice K. Brewer Executive
Office
Governor
November 13, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy & Commerce Committee on Finance
2125 Rayburn House Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
The Honorable Henry Waxman The Honorable Orrin Hatch
Ranking Member Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy & Commerce Committee on Finance
2322A Rayburn House Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
Dear Chairman Upton:
This letter serves as Arizona's reply to your correspondence dated July
29, 2014 regarding the Children's Health Insurance Program (CHIP).
KidsCare is Arizona's CHIP program.
1. How many individuals are served by your state's CHIP program'?
What are the characteristics of CHIP enrollees in your state
(e.g. income, health status, demographics)?
AZ Reply: KidsCare serves children in households between 133% of
the federal poverty level (FPL) to 200% FPL. Parents have a
monthly premium requirement that is assessed on a sliding seal
based on income. In general, KidsCare members are healthier
than the average Medicaid enrollee, with a per-member per-month
cost of $206.
As part of the Arizona's effort to address the fiscal challenges
associated with the Great Recession, the State froze enrollment
to KidsCare in January 2010. To mitigate the impact of that
enrollment freeze, Arizona had 1115 demonstration authority
that allowed temporary KidsCare enrollment funded by political
subdivisions. Under that demonstration, KidsCare enrollment
reached 46,761 by the end of 2013 before federal authority
expired. Subsequently, most enrolled children were transitioned
to Medicaid, white 14,000 were transitioned to the Federally
Facilitated Marketplace (Marketplace). Arizona does not have
data on the Marketplace take up rate of those 14,000. The State
agreed to provide data on the 14,000 to MACPAC (Medicaid and
CHIP Payment and Access Commission) to match with Marketplace
enrollment data, but the Marketplace declined MACPAC's request.
Currently, there are 1,945 children enrolled in KidsCare.
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act (PPACA)? How
has the implementation of PPACA impacted the way your state
administers CHIP?
AZ Reply: Arizona has not made any changes to its KidsCare
program as a result of PPACA.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and/or
benefits and/or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
AZ Reply: Arizona provides the full Medicaid benefit package to
KidsCare members. The State selected its state employee benefit
package as the benchmark for Marketplace coverage. Those
benefits align fairly closely to the Medicaid benefits package.
The Primary difference for children is non-emergency medical
transportation, which is not offered in the Marketplace. There
also are some family supports and other behavioral health
services that may not be offered on the Marketplace.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
AZ Reply: Arizona led the nation in the percentage of children
who enrolled in health care through the Marketplace with 21% of
enrollees under age 18 (compared to the national average of
6%). KidsCare has been a incredible success in Arizona and
served many families well. While there may be some differences
between the Marketplace and KidsCare, especially related to
out-of-pocket expenses and cost sharing, there is no reason to
believe that a Marketplace option cannot be structured to meet
the needs of children in this income range.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
AZ Reply: Although Arizona's example presents some unique issues,
it exemplifies the dynamic nature of health care. A five or six
year formula struggles to address shifting state needs. In one
instance, Arizona had an unspent allotment and just a couple of
years later, Arizona required an increase. Ideally, the formula
allows for greater flexibility to keep pace with state needs.
6. Over the past number of years, States have worked to reduce the
number of uninsured children. And Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of uninsured, and improve health outcomes for
children in your state?
AZ Reply: Arizona has had tremendous success in enrolling
eligible individuals through its public/private partnership
that allows community organizations, providers, faith-based
groups and others to be part of the application assistance
team. These groups are trained by the State for use of the
actual eligibility online system, know as Health-e-Arizona
Plus. Over 100 organizations have agreements with the State as
application assisters. Through those organizations, the State
has trained over 2,000 non-State employees to provide
application assistance in the community representing
organizations all across the State. Moving away from a
government-run model to one that is partnership focused has
been a success.
Sincerely,
Janice K. Brewer
Governor
CC: Senator John McCain
Senator Jeff Flake
Representative Ann Kirkpatrick
Representative Ron Barber
Representative Raul Grijalva
Representative Paul Gosar
Representative Matt Salmon
Representative David Schweikert
Representative Ed Pastor
Representative Trent Franks
Representative Kyrsten Sinema
______
ARKANSAS DEPARTMENT OF HUMAN SERVICES
Division of Medical Services
P.O. Box 1437, Slot S401 Little Rock, AR 72203-1437
501-682-8292 Fax: 501-682-1197
October 20, 2014
Fred Upton, Chairman
House Committee on Energy and Commerce
Henry A. Waxman, Ranking Member
House Committee on Energy and Commerce
Ron Wyden, Chairman
Senate Finance Committee
Orrin G. Hatch, Ranking Member
Senate Finance Committee
Congress of the United States
Washington, DC 20515
Dear Chairmen Upton and Wyden; Members Waxman and Hatch:
In response to your July 29, 2014 request for information from
governors regarding the Children's Health Insurance Program (CHIP), I
welcome this opportunity to provide information on Arkansas's
successful CHIP program (ARKids-B and Unborn Child programs) and my
thoughts regarding the future of the CHIP program.
The ARKids First program began in Arkansas in 1997. At that time, 22%
of children in Arkansas lacked health coverage. ARKids First is made up
of two programs. ARKids-A is traditional Medicaid for children and
offers low-income families a comprehensive package of benefits. ARKids-
B is funded by Title XXI (CHIP) and offers a similar benefit for
families with higher incomes. The ARKids First program has played an
important role in significantly dropping the percentage of children
without access to coverage. Currently, 80,400 children in Arkansas are
provided health coverage through the ARKids-B and Unborn Child programs
of which the majority of children covered are in the ARKids-B program.
The passage of the Patient Protection and Affordable Care Act (PPACA)
has led to changes in the administration of the ARKids-B program.
Specifically, Arkansas converted the state's existing income
eligibility standards as required by the PPACA to a Modified Adjusted
Gross Income (MAGI) equivalent standard. Additionally, as required by
PPACA, Arkansas has transferred children ages six through eighteen with
incomes above 100% of the federal poverty level (FPL) up to and
including 133% FPL from the ARKids-B program into the ARKids-A program.
ARKids-B provides coverage for vision and dental services. These
benefits have historically not been covered through the majority of
employer sponsored health plans. In the Arkansas Health Insurance
Marketplace, pediatric dental services are not required to be offered
as a part of the package of benefits along with the other essential
health benefits, if a stand-alone pediatric dental plan is offered on
the Marketplace.
As previously mentioned, the CHIP program has worked well in Arkansas.
The annual allotments have been adequate and the funding formula is
working appropriately. Thus, we do not believe there is a need for
Congress to address the issue of unspent allotments. Continuing to
provide coverage for children in Arkansas is imperative. Thus far, our
experience with the CHIP program in Arkansas has been overwhelmingly
positive and successful and has led to a dramatic reduction in the
percentage of uninsured children. Whether coverage remains to be
provided through continued funding of CHIP or via an alternate
mechanism (e.g. providing coverage through the Marketplace), ensuring
that our state's children do not lose access to coverage is critical.
Thank you for the opportunity to comment on Arkansas's experience with
the CHIP program and to provide input on this important policy debate.
Sincerely,
Dawn Stehle
Medicaid Director
______
State of California
HEALTH AND HUMAN SERVICES AGENCY
Aging Child Support Services Community Services and Development
Developmental Services
Emergency Medical Services Authority Health Care Services Managed
Health Care Public Health
Rehabilitation Social Services State Hospitals Statewide Health
Planning and Development
EDMUND G. BROWN JR.
DIANA S. DOOLEY
GOVERNOR
SECRETARY
October 30, 2014
The Honorable Fred Upton, Chairman
House Committee on Energy and Commerce
2183 Rayburn House Office Building
Washington, DC 20515
The Honorable Ron Wyden, Chairman
Senate Finance Committee
221 Dirksen Senate Office Building
Washington, DC 20510
The Honorable Orrin G. Hatch, Ranking Member
Senate Finance Committee
104 Hart Senate Office Building
Washington, DC 20510
The Honorable Henry A. Waxman, Ranking Member
House Committee on Energy and Commerce
2204 Rayburn House Office Building
Washington, DC 20515
Dear Members of the United States Congress:
I strongly encourage Congress to act early and extend the Children's
Health Insurance Program (CHIP) funding to the states beyond federal
fiscal year 2015. Since California's enactment of this program in 1997,
we have valued and relied upon federal CHIP funding to provide
comprehensive, affordable health care, mental health, and substance use
treatment coverage for children and pregnant women to ensure the best
possible health care outcomes for children and infants.
By providing coverage for low to moderate income children and pregnant
women through CHIP, cost-sharing is significantly lower than through
other subsidized coverage, such as through California's state-based
health benefit exchange, or private health plans. This ensures that
cost-sharing requirements for these children and pregnant women is not
an access barrier to care. Together, CHIP and Medi-Cal, California's
Medicaid program, have cut the rate of uninsured children in California
by half--from 10.3 percent in 2001 to 5.1 percent in 2011, according to
the California Health Interview Survey by the University of California,
Los Angeles, Center for Health Policy Research.
If federal CHIP funds are not renewed for Federal Fiscal Year 2015,
California could lose upwards of $533 million annually. Renewal of
federal CHIP funding is extraordinarily important to California's
fiscal stability and the ability to continue to offer cost-effective,
affordable coverage for children and pregnant women. California makes
every effort to maximize its federal CHIP allotments and fully expects
to do the same with the enhanced federal matching rate as part of CHIP
renewal. The enhanced federal CHIP funding supports a 23-percentage
point increase (also known as the ``CHIP bump'') in the federal match
rate for California. This is an important investment in children's
health care. The loss of such funding would put gains in children and
infants' health coverage at risk.
California recommends early approval of the extension of this funding
to ensure no lapse in the California State Fiscal Year (FY) 2015/16
budgeting process for these important programs. CHIP renewal would
encourage health coverage enrollment and positive health outcomes for
children by generating permanent efficiencies in enrollment and renewal
simplification processes, as well as improvements in the quality of
pediatric health care delivery.
Enclosed with this letter are California's responses to questions
outlined in your letter dated July 29, 2014. If you have additional
questions or would like to discuss the responses further, please
contact Mr. Toby Douglas, Director, California Department of Health
Care Services.
Sincerely,
Diana S. Dooley
Secretary
Enclosure
______
attachment
California is pleased to provide the following information to the
Congressional committees with Jurisdiction over the Children's Health
Insurance Program (CHIP) regarding the extension of funding for CHIP
beyond Federal Fiscal Year (FY) 2015.
California Background:
California has a robust CHIP program that is administered by the
Department of Health Care Services (DHCS), the single state Medicaid
agency (known as Medi-Cal in California). Prior to January 1, 2013, the
Managed Risk Medical Insurance Board (MRMIB), a state board separate
from DHCS, administered the largest component of California's CHIP,
previously known as the Healthy Families Program (HFP). HFP was
transitioned to DHCS throughout Calendar Year 2013. Under this
transition, children previously eligible for HFP, under a standalone
CHIP, became Medi-Cal eligible under a new Medicaid expansion coverage
group, known as the Optional Targeted Low Income Children's Program
(OTLICP). The other transitioned CHIP programs now administered by OHCS
are as follows:
The Medi-Cal Access Program, (previously known as the Access for
Infants and Mothers Program [AIM]) which provides comprehensive
medically necessary services to pregnant women who are above the
Medi-Cal income standard, up to and including 322 percent of the
federal poverty level (FPL). Additionally, those infants born to
women enrolled in the Medi-Cal Access Program with incomes above
266 percent (the OTLICP upper income limit) and up to and including
322 percent are also covered under this program for up to their
first two years of life.
The County Children's Health Initiative Matching (C-CHIP) Program,
historically funded solely by local county and federal funds in
three counties (San Francisco, San Mateo, and Santa Clara) that
voluntarily chose to operate a C-CHIP program, offers comprehensive
coverage to CHIP-eligible children who are above the applicable
Medi-Cal/CHIP limits up to and including 322 percent. Today, as a
result of the ACA maintenance of effort eligibility requirements,
state and local county funds are used as the non-federal share to
draw down unused federal State CHIP/Social Security Act Title XXI
funds for CHIP-eligible children in these three counties.
How many individuals does your state's CHIP serve?
As of August 30, 2014, there are approximately 1,257,500 low-income
children and pregnant women enrolled under California's CHIP programs
in which Title XXI funds are used to support medically necessary
health, mental health, and substance use disorder services. The CHIP
funded programs are:
Medicaid Expansion for Low-Income Children and Pregnant Women
Optional Targeted Low Income Children's Program
Medi-Cal Access Program for Pregnant Women and Infants
County Children's Health Initiative Matching Program
What are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics)?
The following charts provide a summary of demographic characteristics
of CHIP enrollees in California.
Chart 1: Medicaid Expansion Population
------------------------------------------------------------------------
------------------------------------------------------------------------
Children under the age of 19 Pregnant Women (Unborn Option)
FPL income level: FPL income level above 60
- Children 1-6 up to and including percent up to and including 208
142 percent percent
- Children 6-19 up to and Pregnancy-related covered
including 133 percent services
Full scope Medi-Cal coverage
------------------------------------------------------------------------
Chart 2A: CHIP Population
------------------------------------------------------------------------
Medi-Cal Access Infant-
OTLICP (Children under Linked Program
age 19 above Medi-Cal Access Program (Children under 2,
traditional Medicaid (Pregnant Women) born to mothers
income levels) enrolled in Medi-Cal
Access Program)
------------------------------------------------------------------------
FPL Income level FPL Income level FPL Income level
Infants 0-1 above 208 Above 208 percent and Income above 266
percent up to and up to and including percent up to and
including 266 percent 322 percent including 322 percent
1-6 above 142 percent
up to and including
266 percent
6-19 above 133
percent up to and
including 266 percent
------------------------------------------------------------------------
Subject to premiums No maternity Enrolled in share-of-
when FPL >150 percent insurance or have cost Medi-Cal
not to exceed the 5 health insurance with Subject to premiums
percent limit on their a high (over $500) based on income and
monthly income maternity-only household size
- $13 per child up to deductible - $13 per child up
a maximum of $39 per Total cost for to a maximum of $39
month for households enrollment = 1.5 per month for
with three or more percent of family's households with three
children adjusted annual or more children
- No copayments on household income after Native American/
covered services applying standard Alaskan Indian
Native American/ deduction Exemption
Alaskan Indian
Exemption
------------------------------------------------------------------------
Chart 2B: CHIP Population County Operated
------------------------------------------------------------------------
------------------------------------------------------------------------
Santa Clara, San Francisco and San Children under age 19
Mateo. FPL Income level
Above 266 percent and up to
and including 322 percent
Uninsured, or enrolled in
share-of-cost Medi-Cal or Medi-
Cal Access Infants Program
Subject to premiums based on
income and household size
------------------------------------------------------------------------
Santa Clara............................ $4 to $21 per child monthly
premium with maximum cost of
$63 per family per month
No copayments for
preventative services
$5 to $15 copayments for
other medical, dental and
vision services
Maximum of $250 in copayments
per family in a Benefit Year,
does not include copayments
for dental and vision services
------------------------------------------------------------------------
San Francisco.......................... $48 to $189 annual premium
based on household income and
family size
$5 and $10 copayments for
most services
------------------------------------------------------------------------
San Mateo.............................. $0 to $90 quarterly premium
based on family income
No copayment for check-ups,
immunizations, annual dental
exams, and other preventative
services
$5 to $15 copayments for most
services
------------------------------------------------------------------------
What changes has your state made to its CHIP program as a result of the
Patient Protection and Affordable Care Act (PPACA)?
To ensure achievement of the overall purpose of the PPACA, California
began with the enactment of Assembly Bill 1296 (Bonilla, Chapter 641,
Statutes of 2011), which among other things required the development of
a standardized single, accessible application form and renewal
procedures for state insurance affordability programs.
Additionally, California transitioned the State's separate CHIP
programs for children and pregnant women and their infants to DHCS
administration, beginning in 2013. This has effectively resulted in the
integration of the standalone CHIP and the Medicaid expansion under the
Medi-Cal program. The goals in the transition of children and pregnant
women to Medi-Cal under DHCS are to provide a uniform approach for
potential beneficiaries applying for and obtaining health care coverage
under applicable insurance affordability programs, to streamline
eligibility and enrollment processes, and to broadly simplify coverage
options for individuals under Medi-Cal and California's state-based
health benefit exchange.
How has the implementation of the PPACA impacted the way your state
administers CHIP?
As indicated above, the implementation of PPACA set in motion the
creation of a Medicaid expansion for children by moving from a
standalone CHIP to the movement of CHIP-eligible children under the
Medi-Cal program. This integration has allowed California the ability
to apply Medicaid cost sharing principles to CHIP-eligible children and
to make available to these children the expanded benefit package of
Medi-Cal as described in the response on covered benefits. California
also expanded coverage to children between the ages of 6 to 19 years of
age with family income up to 133 percent.
Specifically, PPACA has influenced the way in which California
administers CHIP-funded programs in the following ways:
Implemented the use of streamlined eligibility processes and
coverage options for children and adults seeking coverage under
insurance affordability programs, including CHIP, using a
federally-approved, single streamlined application.
Established a ``no wrong door'' approach for enrollment.
Individuals are first assessed for no-cost coverage under Medi-
Cal/CHIP using one intake process before moving to programs
that require cost-sharing or advanced premium tax credits. This
approach allows consumers to obtain health insurance at the
lowest cost with a streamlined application and provides the
option for families with children to shop, compare, and select
coverage under one health plan if available in their county of
residence.
Provided additional benefits and lowered costs for children at
certain income levels.
Gained overall administrative efficiencies and oversight, including
more consistency in health plan contracting processes while
increasing plan accountability for providing high-quality
services to children.
Provides the opportunity to standardize the existing administrative
appeals process for consumers for initial eligibility or
enrollment determinations and redeterminations for insurance
affordability programs both Medicaid and CHIP funded, with
procedures and timelines for hearings with the appeals entity
with continuing eligibility for beneficiaries during the
appeals process.
Achieved operational efficiencies by consolidating administrative
resources under one state agency
To the extent the following information is readily available and you
believe It is relevant, please describe the services and or benefits
and or cost sharing currently provided in your state under CHIP that
are not comparably available through your state's exchange or through
the majority of employer sponsored health plans in your state.
Benefits
All children enrolled in the Medi-Cal program funded with Title XXI and
Title XIX receive the same Medi-Cal benefits and use the same health
care delivery systems. Through Medi-Cal, CHIP-eligible children have
access to a more comprehensive coverage package at a lower cost to
families than that which is available through private or state exchange
coverage. Given the incorporation of CHIP-eligible children as a
coverage group under the state plan, the funded services includes the
comprehensive Early Periodic Screening, Diagnosis, and Treatment
(EPSDT) benefit which also has a more liberal standard for medical
necessity and has been considered the gold standard for publically
financed programs. Additionally, these children also receive dental and
vision benefits, mental health, and substance use disorder services.
Comparatively, children enrolled through Covered California or
employer-sponsored health plans receive the required ten essential
health benefits but have higher out-of-pocket expenditures.
Pregnant women in the Medi-Cal Access Program receive the minimum
essential health benefits from their health plan, which also includes
the following services:
Physician and Professional Services
Mental health and substance use disorder services including
behavioral health treatment
Preventative and wellness services; and chronic disease management
Maternity services
Hospital care
Prescription drugs
Non-emergency medical transportation services
Skilled Nursing Facility Services (91+ days) offered to pregnant
women until the end of the woman's postpartum period if
medically necessary
Pediatric services for income-eligible children including oral and
vision care
Cost-Sharing
Previously, families whose children enrolled in HFP paid a monthly
premium amount based on income and family size with the state's program
administrative vendor tracking the payments and cost sharing
requirements. Families' premiums fluctuated based on a change in income
level, much like Covered California coverage that is based on family
size. Cost-sharing for the OTLICP under Medi-Cal is based upon a flat
monthly rate established in state law. The state monitors the process
for payment of premiums and cost-sharing. As a result of the change to
premiums for children under Medi-Cal, families receive either a lower
monthly premium or none at all. Medi-Cal does not require co-payments
for children under the age of 19. These policies ensure that premiums,
co-payments, and deductibles are not a barrier for children and
pregnant women to access care. Retaining CHIP funding is critical for
achieving affordable, comprehensive coverage for low-income children
and their families.
The total cost-sharing for women enrolled in the Medi-Cal Access
Program is 1.5 percent of the family's adjusted annual household income
after applying the standard deduction. The cost sharing amount for
pregnancy and post-partum can be divided into 12 monthly installments,
but enrollees may choose to pay the entire 1.5 percent cost in one
single payment including a $50 discount.
Covered California, which is California's state-based health benefit
exchange, offers health plans with four major metal tiers: Bronze,
Silver, Gold, and Platinum. Each health plan provides minimum essential
coverage, but they differ in the cost sharing. Marketplaces also must
make available minimum coverage plans, also referred to as catastrophic
coverage plans, to people under age 30, as well as to individuals who
are exempt from the mandate to purchase coverage because they have an
affordability or hardship exemption. A minimum coverage plan covers
minimum essential coverage, but only after out-of-pocket cost sharing
reaches a high deductible that will match the level of the PPACNs
required out-of-pocket maximum. Out-of-pocket costs for Covered
California plans typically include:
Coinsurance
Co-payments or similar charges
Deductibles
In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe the
annual allotments your state has received starting in 2009 have been
sufficient and the formula is working appropriately?
California believes the annual allotments received were sufficient.
Since Federal Fiscal Years (FFY) 2011, California's CHIP expenditures
have been approximately equal to California's annual allocation.
However, current estimates of FFY 2015 and beyond show expenditures
depleting the annual allocation and all available prior year
allotments. California believes that the current safeguards for
redistribution and contingency funding will be sufficient to meet our
future funding.
California's CHIP expenditures have averaged $1.24 billion in federal
funds annually since 2006 and estimate an increase. in children covered
with the implementation of PPACA. FFY 2014 expenditures are exceeded
$1.4 billion in federal funds.
Without reauthorization, California will have several fiscal barriers:
1. Four of California's CHIP programs would lose $145 million in
federal funding annually:
a. Medi-Cal Access Program (Pregnant Women Unborn Option Coverage)
b. Medi-Cal's Expansion Program for the Unborn Child Option
c. Medi-Cal Access. Infant-linked Program
d. C-CHIP
2. The remaining California CHIP programs would require coverage
under Title XIX at a tower Federal Financial Participation and
California would lose an additional $38 million in federal
funds annually.
Additionally, the proposed PPACA Enhanced Funding for Children would
enhance the CHIP federal matching rate by 23 percentage points
beginning in October 2015. This enhancement would provide California
with an additional $578 million in federal funds annually. However, an
increase in the current allocation level would be required to maintain
this enhanced level of funding through FY 2019.
Do you believe there is a need for Congress to further address the
issue of unspent allotments?
No, California believes states are in a better position to address the
issue of unspent allotments. The current process provides State's with
the flexibility necessary given changes in health care and the economy
which impact our expenditures.
______
STATE OF COLORADO
office of the governor
136 State Capitol
Denver, Colorado 80203
Phone (303) 866-2471
Fax (303) 866-2003
John W. Hickenlooper
Governor
October 31, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
House Energy & Commerce Committee Senate Finance Committee
The Honorable Henry Waxman The Honorable Orrin Hatch
Ranking Member Ranking Member
House Energy & Commerce Committee Senate Finance Committee
Dear Congressmen:
We are grateful for the opportunity to respond to your letter regarding
continued federal funding for the Children's Health Insurance Program
(CHIP), dated July 29, 2014.
As detailed in the enclosed pages, Colorado's CHIP program--known
locally as the Child Health Plan Plus (CHP+)--is a critical component
of Colorado's commitment to ensure access to affordable and
comprehensive health insurance coverage. We are proud to have made
substantial progress in reducing the number of uninsured children in
Colorado in recent years, and CHP+ continues to be a key driver of that
success.
In light of ongoing changes to the coverage landscape due to both state
and federal health reforms, we strongly encourage Congress to continue
funding CHIP through 2019. We believe that this continued funding
period best aligns with existing CHIP policy and will provide states
the opportunity to analyze data and evaluate long-term coverage
strategies that ensure individuals and families continue to have access
to coverage and access to care.
We would be happy to provide you with any additional information about
Colorado's CHIP program. Should you have any further questions, please
reach out to our Washington, D.C. Liaison, Jena Griswold, at
202.624.5278 or jena.griswold@
state.co.us.
Regards,
John W. Hickenlooper,
Governor
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics).
Colorado's CHIP program, the Colorado Child Health Plan Plus (CHP+),
serves over 112,000 children and nearly 3,000 pregnant women living
between 133% and 250% FPL--roughly $31,000 to $58,000 for a family of
four, as detailed below. CHP+ is an HMO-model program administered by
the Colorado Department of Health Care Policy and Financing, which also
administers Colorado Medicaid and is the state's single state Medicaid
agency. Core demographics for our CHP+ population are as follows: \1\
---------------------------------------------------------------------------
\1\ Colorado Department of Health Care Policy and Financing, 2014.
Distinct Clients FY 2013-14 July 2013-June 2014
------------------------------------------------------------------------
Population Distinct Clients
------------------------------------------------------------------------
Children............................................ 112,395
Prenatal............................................ 2,853
------------------------------------------------------------------------
Total........................................... 115,248
------------------------------------------------------------------------
FY 2013-14 Distinct Client Ethnicity Distribution
------------------------------------------------------------------------
Race Children Prenatal Total
------------------------------------------------------------------------
American Indian..................... 1.82% 1.37% 1.81%
Asian............................... 2.71% 2.75% 2.71%
Black............................... 5.64% 5.46% 5.63%
Native Hawaiian/Pacific Islander.... 0.44% 0.33% 0.43%
Other............................... 7.68% 9.85% 7.73%
Other--White........................ 32.40% 49.83% 32.84%
Spanish American.................... 31.80% 21.30% 31.54%
Unknown............................. 17.52% 9.11% 17.31%
------------------------------------------------------------------------
FY 2013-14 Distinct Client Distribution by Income
------------------------------------------------------------------------
FPL Children Prenatal Total
------------------------------------------------------------------------
0%-100% FPL \2\..................... 7.97% 17.06% 8.17%
101%-150% FPL \1\................... 22.67% 12.68% 22.45%
151%-200% FPL....................... 34.47% 19.63% 34.14%
201%-205% FPL....................... 4.47% 8.31% 4.55%
206%-250% FPL....................... 22.60% 37.29% 22.92%
Blank............................... 7.83% 5.02% 7.77%
------------------------------------------------------------------------
Total........................... 100.00% 100.00% 100.00%
------------------------------------------------------------------------
---------------------------------------------------------------------------
\2\ Colorado expanded Medicaid to all individuals with incomes 0-
133% FPL in January 2014, and began to use the Modified Adjusted Gross
Income (MAGI) eligibility determination criteria in October 2013. Some
individuals in the 0-133% FPL income range are listed here because the
time period shown partially predates our MAGI implementation.
Additional detail can be found in the response to Question 2.
---------------------------------------------------------------------------
Although our actuaries have access to beneficiaries' encounter data for
rate setting purposes, Colorado does not directly collect information
on CHP+ enrollees' health status. A sample of CHP+ beneficiaries' data
provided by Colorado Access (the largest of our CHP+ carriers, with
37,000 members) indicates that 83 percent of the CHP+ insured
population visited a primary care provider in the last year.
Additionally, CHP+ children report better general health than uninsured
and Medicaid populations, but worse health than commercially insured
populations, as illustrated in the following table:
Self-Reported Health Status by Insurance Type, Children Ages 0-18, Colorado, 2013 \3\
----------------------------------------------------------------------------------------------------------------
Commercial
CHP+ Medicaid Insurance Uninsured
----------------------------------------------------------------------------------------------------------------
General Health Status
----------------------------------------------------------------------------------------------------------------
Excellent/Very Good/Good........................................ 97.0% 90.6% 98.1% 95.2%
Fair/Poor....................................................... 3.0% 9.4% 1.9% 4.8%
----------------------------------------------------------------------------------------------------------------
Oral Health Status
----------------------------------------------------------------------------------------------------------------
Excellent/Very Good/Good........................................ 87.2% 93.6% 95.7% 84.2%
Fair/Poor....................................................... 12.8% 6.4% 4.3% 15.8%
----------------------------------------------------------------------------------------------------------------
Mental Health Status
----------------------------------------------------------------------------------------------------------------
Less than 8 poor mental health days............................. 88.6% 87.5% 94.7% 87.5%
8 or more poor mental health days............................... 11.4% 12.5% 5.3% 12.5%
----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\3\ Colorado Health Institute analysis of the 2013 Colorado Health
Access Survey, 2014.
---------------------------------------------------------------------------
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Colorado has taken a measured, bipartisan approach to implementing the
Patient Protection and Affordable Care Act (ACA). In doing so, we have
built upon foundations that predate the ACA and passed bipartisan
legislation that enabled us to expand Medicaid to 133% FPL and
establish a state-based health insurance marketplace, Connect for
Health Colorado (C4HC).\4\ Pursuant to the ACA, HCPF began using
Modified Adjusted Gross Income (MAGI) methodology to calculate
eligibility for both Medicaid and CHP+. As part of that rule
implementation, both programs use a 5 percent ``income disregard'' to
assist families whose income is close to the eligibility cutoff under
MAGI methodology. As such, we determine CHP+ eligibility for children
and pregnant women if their income is less than 260% FPL.
---------------------------------------------------------------------------
\4\ Senate Bill 13-200 and Senate Bill 11-200, respectively.
Senate Bill 13-200 codified in pertinent part at 25.5-4-402.3; Senate
Bill 11-200 codified at 10-22-101, et seq.
The following table provides an overview of coverage options for
Coloradans at or below 400% FPL, as of January 2014: \5\
---------------------------------------------------------------------------
\5\ Source: Colorado Health Institute, 2014.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
We have also taken steps to limit the impact of ``churn'' across
various coverage programs to help improve continuity of care for
Colorado individuals and families. For example, in March 2014, Colorado
began providing twelve months of continuous eligibility for children in
Medicaid and CHP+, even if the family experiences a change in
circumstances that effect eligibility. This policy helps prevent lapses
in continuity of care and is in place for 28 CHIP programs
nationwide.\6\ Although this was authorized by state law that predates
the enactment or implementation of the Patient Protection and
Affordable Care Act (ACA), implementation of the ACA resulted in
changes to our financial models that enabled us to implement 12-month
continuous eligibility for children.\7\
---------------------------------------------------------------------------
\6\ Kaiser Family Foundation, State Health Facts. Accessed October
20, 2014. Available at: http://kff.org/medicaid/state-indicator/12-mo-
continuous-eligibilitymedichip/.
\7\ Colorado Health Care Affordability Act, House Bill 09-1293,
codified in pertinent part at Colo. Rev. Stat. Sec. 25.5-4-402.3.
---------------------------------------------------------------------------
3. To the extent the following is readily available and you believe it
is relevant, please describe the services and or benefits and
or cost sharing currently provided in your state under CHIP
that are not comparably available through your state's exchange
or through the majority of employer sponsored health plans in
your state.
Colorado strives to improve continuity of care, to align benefits
across Medicaid, CHP+, and qualified health plans (QHPs) purchased
through C4HC, and to ensure our system works seamlessly for families
and children. While CHP+ and private market individual insurance
coverage have very similar benefits, cost sharing differs
significantly. Specifically, average annual cost sharing in a QHP can
be roughly four times cost sharing for CHP+, even after cost sharing
reduction subsidies are accounted for.\8\ Additionally, although both
CHP+ and QHPs establish an out-of-pocket maximum, Colorado's CHP+
program establishes this maximum at 5 percent of the enrollee's income.
In contrast, the out-of-pocket maximum for QHPs is a fixed dollar
amount adjusted for low-income populations, which could be as high as
$5,200 for some CHP+ families. For additional information on
differences in benefits and cost sharing based on analysis conducted by
Wakely Consulting Group, please see Appendix A.
---------------------------------------------------------------------------
\8\ Wakely Consulting Group, ``Comparison of Benefits and Cost
Sharing in Children's Health Insurance Programs to Qualified Health
Plans,'' July 2014.
Colorado's CHP+ program has been a successful safety net coverage
program since its inception. As a testament to its success, in 2012,
advocates successfully lobbied to gain access to CHP+ for dependent
children of state employees.
4. Do you recommend that CHIP funding be extended? If so, for how long
and for budgeting and planning purposes, under what timeframe
should congress act upon an extension? If you do not believe
CHIP funding should be extended, what coverage (if any) do you
believe CHIP enrollees in your state would be able to obtain?
How many covered children by CHIP do you estimate would become
uninsured in the absence of CHIP?
We appreciate Congress' desire to assess whether federal CHIP funding
should be renewed in light of new coverage options provided by the ACA.
At the same time, we are still implementing key provisions of the ACA
that may have significant market impacts over time and alter the value
proposition for maintaining the CHP+ program. Ultimately, our goal is
to continue reducing the number of uninsured Colorado children while
ensuring that coverage options remain affordable for low-income
populations.
At this time, Colorado recommends CHIP funding be reauthorized for
another four years to align with CHIP's existing maintenance of effort
requirements. Given the current coverage opportunities available to our
CHP+ population and our commitment to maintain market stability as we
implement the ACA, we firmly believe that discontinuing federal CHIP
funding in any less than four years would eliminate CHP+ as a coverage
option for Colorado families and create a significant financial
hardship for low-income Coloradans.
In addition to providing alignment with existing CHIP policy, a four-
year funding reauthorization will enable states to monitor coverage
trends and engage stakeholders around coverage alternatives to CHIP in
the event Congress determines the CHIP program should not be
reauthorized in the future. Any long-term changes to CHIP at the
federal level are likely to necessitate program, policy, and
legislative changes at the state level for which states must be given
the opportunity to prepare.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
Since restructuring of the allotments occurred, Colorado has not
utilized the full annual allotment of CHIP funding. Current funding
levels have enabled us to achieve our CHP+ goal of providing coverage
to pregnant women and children, and the funding that remains in
Colorado's allotment provides a critical safety net for the CHP+
program, as it would provide a short-term funding source should
Congress fail to reauthorize CHIP funding in 2015.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
enrolling eligible children? What other policy changes, if any,
would help improve enrollment of eligible children, reduce the
number of the uninsured, and improve health outcomes for
children in your state?
Implementation of the ACA has enabled Colorado to provide coverage
options for nearly all children in our state. We are also proud to have
received over $157 million in CHIPRA performance bonuses since 2010 for
our efforts to insure Colorado kids. However, to continue reducing the
uninsured rate and maintaining continuity of coverage and care among
children in our state, we need to align eligibility and enrollment
policies across a broader range of social services.
Last year, Colorado launched Colorado PEAK--the Program Eligibility and
Application Kit--an online portal allowing consumers streamlined access
to and application for a variety of state benefits and services. By the
end of 2014, up to 20 programs will participate in PEAK, including
child care, nutrition, and energy assistance programs. To better serve
families in need, Congress should work with federal agencies and
willing states to align eligibility, enrollment, and renewal policies
across social support programs, including Medicaid, SNAP, TANF,
National School Nutrition Programs, the Child Care Subsidy Program, and
others. This would reduce the administrative burden on each program
and, more importantly, provide a simpler and more holistic approach for
families.
______
APPENDIX A: COLORADO CHP+/QHP BENEFIT &
COST SHARING COMPARISON
Excerpt from ``Comparison of Benefits and Cost Sharing in Children's
Health Insurance Programs to Qualified Health Plans,'' Wakely
Consulting Group, July 2014 \9\
---------------------------------------------------------------------------
\9\ Full report available at: http://www.wakely.com/wp-content/
uploads/2014/07/FINAL-CHIP-vs-QHP-Cost-Sharing-and-Benefits-Comparison-
First-Focus-July-2014.pdf.
---------------------------------------------------------------------------
Wakely Consulting Group
_______________________________________________________________________
COLORADO
The following provides a comparison of the benefits and cost sharing
provisions of plans available to low income children in the state's
Children's Health Insurance Program (CHIP) compared to what would be
available to them through the Health Insurance Exchange (assuming
enrollment as an individual in the lowest cost silver plan). This
appendix consolidates key results specific to the state. Please refer
to the body of the report for methodology, assumptions, and limitations
for each comparison.
Actuarial Value and Average Cost Sharing
The following table compares the average out of pocket costs
(copayments, deductibles and coinsurance) for children enrolled in CHIP
compared to the coverage that would be available through the Exchange
(with cost sharing reduction subsidies).
----------------------------------------------------------------------------------------------------------------
160% FPL 210% FPL
Income Level Coverage CHIP QHP CHIP QHP
----------------------------------------------------------------------------------------------------------------
Actuarial Value......................................... 97.4% 86%-88% 95.3% 72%-74%
Enrollee Average Percent of Allowed Claims.............. 2.6% 12%-14% 4.7% 26%-28%
Average Annual Cost Sharing............................. $90 $411-$480 $161 $891-$960
----------------------------------------------------------------------------------------------------------------
Out of Pocket Maximums
Member out of pocket costs are capped for coverage under both CHIP and
plans offered on the Exchange, limiting the financial exposure to
families with children who have high cost medical needs. The following
compares the maximum out of pocket costs for the CHIP plans to that of
Exchange coverage, assuming enrollment as an individual in a silver
plan. The maximum out of pocket costs for CHIP differ by state and may
be either $0 (e.g., the plan has no cost sharing), a fixed dollar
amount, or a percent of income (with premiums also included in the
maximum out of pocket amount). Where CHIP out of pocket costs are based
on a percent of income, we have assumed a family of three and
subtracted out the annual premium for one individual to get to an
estimated out of pocket maximum for use of medical services.
----------------------------------------------------------------------------------------------------------------
Plan Type of Maximum 160% FPL 210% FPL
----------------------------------------------------------------------------------------------------------------
CHIP............................................ % of income....................... $925 $1,970
QHP............................................. fixed dollar...................... $1,450 $4,750
----------------------------------------------------------------------------------------------------------------
Pediatric Dental and Vision Cost Sharing
The following highlights the cost sharing and limit differences for
pediatric dental and vision benefits. These are not explicitly
accounted for in the AV calculation, and can be material benefits for
children.
----------------------------------------------------------------------------------------------------------------
Service 160% FPL CHIP QHP 210% FPL CHIP QHP
----------------------------------------------------------------------------------------------------------------
Routine Vision Exams................ $5 copay 50% after $10 copay 50% after
deductible deductible
Eyeglasses Cost Sharing............. No copay: P$50- 50% after No copay:P$50- 50% after
$150 deductible $150 deductible
Dental Checkup Cost Sharing......... No copay 50% after No copay 50% after
deductible deductible
----------------------------------------------------------------------------------------------------------------
Benefit Coverage and Limits
The following table summarizes the coverage of core and child-specific
benefits (as outlined below) for this state.
----------------------------------------------------------------------------------------------------------------
QHPs (Based on EHB)
Type Benefit of Total CHIP Limited Not ------------------------ Not
Benefits Covered Covered Covered Limited Covered
----------------------------------------------------------------------------------------------------------------
Core........................ 11 91% 9% 0% 91% 9% 0%
Child-Specific.............. 14 36% 29% 36% 36% 29% 36%
----------------------------------------------------------------------------------------------------------------
The following table shows the coverage and limits for the core
benefits.
------------------------------------------------------------------------
CHIP EHB
Service Coverage Limits Coverage Limits
------------------------------------------------------------------------
Physician Services C C
------------------------------------------------------------------------
Clinic Services & C C
Other Ambulatory
Health Care
Services
------------------------------------------------------------------------
Laboratory & C C
Radiological
Services
------------------------------------------------------------------------
Durable Medical L$ Certain C
Equipment & Other items
Medically-PRelated Psubject
or Remedial Devices to $2,000
annual
limit
------------------------------------------------------------------------
Inpatient Services C C
------------------------------------------------------------------------
Inpatient Mental C C
Health Services
------------------------------------------------------------------------
Surgical Services C C
------------------------------------------------------------------------
Outpatient Services C C
------------------------------------------------------------------------
Outpatient Mental C C
Health Services
------------------------------------------------------------------------
Prescription Drugs C C
------------------------------------------------------------------------
Medical C C
Transportation--Eme
rgency Transport
------------------------------------------------------------------------
The following table shows the coverage and benefit limits for child-
specific benefits,
------------------------------------------------------------------------
CHIP EHB
Service Coverage Limits Coverage Limits
------------------------------------------------------------------------
Dental--Preventive & L$ $600 C
Restorative
Services
------------------------------------------------------------------------
Dental--Orthodontics U U
------------------------------------------------------------------------
Vision--Exams C C
------------------------------------------------------------------------
Vision--Corrective L$ $50/year C
Lenses
------------------------------------------------------------------------
Audiology--Exams C .......... C
------------------------------------------------------------------------
Audiology--Hearing C .......... C
Aids
------------------------------------------------------------------------
ABA Therapy U .......... LQ 550
sessions
(age 0-
8); 185
sessions
(age 9-
19) (25-
minute
session
increment
s)
------------------------------------------------------------------------
Autism--General C LQ 550
sessions
(age 0-
8); 185
sessions
(age 9-
19) (25-
minute
session
increment
s)
------------------------------------------------------------------------
Physical Therapy, LQ No limit LQ 20 visits/
Occupational (age 0-3) year (per
Therapy, and Speech 30 visits/ type of
Therapy year (per therapy)
diagnosis
, age 3+)
------------------------------------------------------------------------
Podiatry LC Routine U
foot care
not
covered
except
for
patients
with
diabetes
------------------------------------------------------------------------
Habilitation C LQ 20 visits/
year (per
type of
therapy)
------------------------------------------------------------------------
Enabling Services U U
------------------------------------------------------------------------
Medical U .......... U
Transportation--Non-
Emergency Transport
------------------------------------------------------------------------
Over-the-Counter U .......... U
Medication
------------------------------------------------------------------------
______
Dannel P. Malloy
governor
state of connecticut
210 CAPITOL AVENUE, HARTFORD, CONNECTICUT 06106
TEL (860) 566-4840 FAX (860) 524-7396 www.governor.ct.gov
[email protected]
October 30, 2014
The Honorable Ron Wyden The Honorable Fred Upton
Chairman Chairman
Committee on Finance Energy and Commerce Committee
United States Senate United States House of
Representatives
221 Dirksen Senate Office Building 2183 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
The Honorable Orrin G. Hatch The Honorable Henry Waxman
Ranking Member Ranking Member
Committee on Finance Energy and Commerce Committee
United States Senate United States House of
Representatives
104 Hart Office Building 2204 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
Dear Chairmen Wyden and Upton, and Ranking Members Hatch and Waxman:
Thank you for your letter of July 29, 2014, concerning the Children's
Health Insurance Program (CHIP). I appreciate the opportunity to
address the merits of and continued need for federal funding for this
vital program.
Connecticut has made it a priority to ensure that all of its citizens
have access to high quality and affordable health insurance.
Connecticut's state-based health insurance exchange, Access Health CT,
enrolled over 200,000 people during the first open enrollment period.
This reduced Connecticut's rate of uninsured from 7.9% in 2012 to 4%--
one of the ten largest reductions in the country. Over 80% of these new
enrollees qualified for Medicaid. Connecticut Medicaid is now serving
almost 770,000 individuals, over 2l% of the state population.
Connecticut's CHIP, which is known as HUSKY B, is an essential source
of coverage for 14,119 children under age 19. Additionally, the program
provides federal match for additional income-eligible children in
Connecticut's coverage group for children and relative caregivers,
which is known as HUSKY A. CHIP provides a broad range of preventative
care, behavioral health, and dental services that support Connecticut
children in early childhood development, school readiness and
performance, and overall well-being.
I have provided below our responses to the six questions that you
raised in your letter.
1. How many individuals are served by your state's CHIP
Program? What are the characteristics of CHIP
enrollees in your state (e.g. income, health
status, demographics)?
Connecticut is currently covering 14,119 children in CHIP/HUSKY B. The
PPACA Modified Adjusted Gross Income (MAGI) conversion increased the
maximum income eligibility limit for HUSKY B from 300% to 323% of the
Federal Poverty Level (FPL). Additionally, Connecticut permits families
with income in excess of 323% of FPL to purchase coverage via monthly
premiums. The distribution of participants across Connecticut's three
``bands'' of coverage is depicted below:
----------------------------------------------------------------------------------------------------------------
Annual income Annual income Annual out-of-
HUSKY B premium band level as % of level in dollars Premiums pocket Number of
FPL (family of four)* maximum participants
----------------------------------------------------------------------------------------------------------------
Band 1........................ 201% to 254% $47,938-$60,578 None 5% of gross 8,941
income
Band 2........................ 254% to 323% $60,579-$77,035 Maximum $30 5% of gross 4,805
for one income
child, $50
for two or
more children
per month
Band 3........................ Above 323% Above $77,035 $314 per child No cap 373
per month
----------------------------------------------------------------------------------------------------------------
* As of July 1, 2014, Connecticut's annual poverty level for a family of four is $23,850. See:
http://www.ct.gov/dss/lib/dss/PDFs/PovSMI.pdf.
This is the HUSKY B enrollment by band as reported by Xerox as of
October 1, 2014:
------------------------------------------------------------------------
Grand
Band 1 Band 2 Band 3 Total
------------------------------------------------------------------------
Total Enrollment by Premium Band 8,941 4,805 373 14,119
------------------------------------------------------------------------
HUSKY B coverage is contributing to significant improvements in health
outcomes for enrolled children. Under Connecticut's unique, self-
insured managed fee-for-service system, the following results were
achieved for calendar year 2013:
increased well-child visits in the first 15 months of life (six or
more visits) by 13.5%;
increased well-child visits in the third, fourth, fifth and sixth
year of life by 4%;
increased access to primary care practitioners for children age 12-
24 months by 4% to 99.5%;
increased access to primary care practitioners for children age 25
months to 6 years by 3% to 97%;
increased immunization rate for adolescents (Tdap/Td Total) by 7%;
increased lead screening in children by 21.5%; and
increased number and percentage of children age 3 to 19 who
received preventive dental care to 69% (HUSKY A) and 73% (HUSKY
B).
The demographics of children served by CHIP/HUSKY B are as follows:
48.2% are female and 51.8% are male;
10.1% identify as African-American;
22.5% identify as Hispanic; and
70.6% identify as Non-Hispanic White.
2. What changes has your state made to its CHIP program as
a result of the Patient Protection and Affordable
Care Act? How has the implementation of PPACA
impacted the way your state administers CHIP?
The PPACA Modified Adjusted Gross Income (MAGI) conversion increased
the maximum income eligibility limit for HUSKY B from 300 to 323% of
the Federal Poverty Level (FPL). Additionally, Connecticut availed
itself of the option to eliminate the crowd-out for coverage.
3. To the extent the following information is readily
available and you believe that it is relevant,
please describe the services and or benefit and or
cost sharing currently provided in your state under
CHIP that are not comparably available through your
state's exchange or through the majority of
employer sponsored health plans in your state.
CHIP/HUSKY B provides a much broader range of behavioral health
benefits than do exchange and employer-sponsored health plans.
Additionally, CHIP/HUSKY B covers dental services with among the best
geo-access of Medicaid programs in the country. Dental services are
only covered through the exchange through purchase of stand-alone
plans, and are typically covered by employer-sponsored health plans on
a much more limited basis. There are no monthly premiums and a
limitation on annual out-of-pocket costs of 5% of gross income in
Connecticut's Band 1 for CHIP coverage; and a modest monthly premium of
$30 for one child and $50 for two or more children, and a limitation on
annual out-of-pocket costs of 5% of gross income in Connecticut's Band
2. These modest cost-sharing obligations (low if any premium, no
deductible, limitations on out-of-pocket costs) are substantially less
than would be paid for a Connecticut Qualified Health Plan (QHP).
4. Do you recommend that CHIP funding be extended? If so,
for how long, and for budgeting and planning
purposes, under what timeframe should Congress act
upon an extension? If you do not believe that CHIP
funding should be extended, what coverage (if any)
do you believe that CHIP enrollees in your state
would be able to obtain? How many children covered
by CHIP would become uninsured in the absence of
CHIP?
CHIP funding should be made permanent. Over the course of its
existence, CHIP has proved to be a critical source of support for
hundreds of thousands of children nationwide. The current cost-sharing
arrangement between the federal government and the states represents an
appropriate balancing of interests in the health, safety, and well-
being of our children.
5. In spite of the restructuring and retargeting of
allotments that occurred in 2009, some CHIP funding
remains unspent. Do you believe the annual
allotments has received starting in 2009 have been
sufficient and the formula is working
appropriately? Do you believe there is a need for
Congress to further address the issue of unspent
allotments?
Connecticut's current CHIP expenditures are at levels that will fully
utilize an amount equal to our annual allotment of funding. This has
been the case for the past several fiscal years. That said, there is
also an ongoing balance of funds that have been carried forward from
years prior that affects the manner in which Connecticut accesses its
federal funds, resulting in a carry-forward from year to year.
To the extent that there are states that are unable to expend their
allotments, Congress could adopt a distribution methodology that
examines expenditures year over year and makes appropriate adjustments
based on demonstrated need.
6. Over the past number of years, states have worked to
reduce the number of uninsured children, and
Medicaid and CHIP have been a critical component of
that effort. Do you believe there are federal
policies that can help states do an even better job
of enrolling eligible children? What other policy
changes, if any, would help improve enrollment of
eligible children, reduce the number of uninsured,
and improve health outcomes for children in your
state?
Connecticut has been demonstrably successful though both its CHIP/HUSKY
B program and Access Health CT enrollment activities in reducing the
incidence of uninsured children in Connecticut. With respect to CHIP,
the single most effective support for enrollment and continuity of care
for children served by CHIP will be extension of federal CHIP funding.
Additionally, performance bonuses have effectively incented and
rewarded states that have (1) met their target for enrollment; and (2)
implemented at least five of eight identified policies that support
timely access to and maintenance of CHIP coverage (12-month continuous
coverage; either no asset test or simplified asset verification; no
face-to-face interview requirement; joint application and consistent
information verification processes across Medicaid and CHIP;
administrative or ex parte renewals; presumptive eligibility; express
lane eligibility; and premium assistance option). Connecticut has
qualified in Federal Fiscal Years 2011 ($5.2 million), 2012 ($3.0
million) and 2013 ($1.6 million) for CHIPRA performance bonuses. Over
and above activities related to Medicaid, Congress could support access
to and adequacy of coverage under QHPs by:
examining the incidence of families affected by the ``family
glitch'' and considering appropriate remedies;
reviewing the cost effectiveness, network adequacy and scope of
coverage of QHPs with respect to supporting the needs of
children and Families; and
providing ongoing support for the in-person assister functions that
have been funded under PPACA.
Thank you for the opportunity to share our perspective. Continued
funding for CHIP is essential. Failure to preserve CHIP funding will
jeopardize continued coverage for children in demonstrated need for
these supports and necessarily expose states to significant budget
constraints. I respectfully request that you make resolution of this
pending issue a high priority.
Sincerely,
Dannel P. Malloy,
Governor.
______
Delaware Health and Social Services
Office of the Secretary
1901 N. DUPONT HIGHWAY, NEW CASTLE, DE 19720 TELEPHONE: 302-255-9040
FAX: 302-255-4429
November 3, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
Congress of the United States Congress of the United States
Washington, DC 20515 Washington, DC 20515
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
Congress of the United States Congress of the United States
Washington, DC 20515 Washington, DC 20515
Thank you for the opportunity to comment on the Children's Health
Insurance Program (CHIP) as you consider an extension of funding beyond
FY 2015. CHIP has been an integral component of the health safety net
for children in low-income families since its enactment in 1997.
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state?
14,612 children were enrolled in Delaware's CHIP program during
State Fiscal Year 2014 (July 2013-June 2014). This represents
an unduplicated count of children who were enrolled at any
point during the year.
Demographic characteristics of the children can be found in the
tables below.
------------------------------------------------------------------------
Number Percent
------------------------------------------------------------------------
Gender:
Male.................................... 7,387 50.5%
Female.................................. 7,225 49.5%
Age:
Under 5................................. 2,677 18.3%
5-8..................................... 3,650 25.0%
9-12.................................... 3,530 24.2%
13-15................................... 2,516 17.2%
16-18................................... 2,239 15.3%
Income:
100%-150% FPL........................... 7,958 54.5%
150%-200% FPL........................... 6,654 45.5%
------------------------------------------------------------------------
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Very few substantive changes were made to the Delaware CHIP
program as a result of PPACA. CHIP and Medicaid are
administered by the same agency, the Division of Medicaid and
Medical Assistance, and CHIP offers the full range of services
covered under EPSDT. Eligibility and enrollment are integrated
and children are served by the same Managed Care Organizations
(MCOs).
Changes made as a result of PPACA include adoption of MAGI
eligibility rules and transition of children between 100%-133%
of FPL from CHIP to Medicaid. Children who transitioned to
Medicaid will no longer be subject to a monthly premium and
will now have access to the non-emergency transportation
benefit.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
Cost sharing for families of children enrolled in CHIP is very
minimal. The maximum family premium is $25 per month. There are
no additional co-pays with the exception of a $10 charge for
non-emergency visits to the emergency department. Since the
full range of EPSDT covered services is available to the CHIP
population, these children also have access to dental and
specialized services that might not be available in exchange or
employer-sponsored health plans.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
attain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
Yes, CHIP continues to provide a critical health care safety net
for children. Funding should be extended to align with the
current authorization ending in 2019. Discontinuation of
funding could result in various scenarios depending on the
structure of a state's CHIP program. Delaware administers a
combination CHIP program with both a Medicaid expansion
component and a stand-alone component.
Children enrolled in the CHIP Medicaid Expansion would continue
to receive services but the state would receive the lower
Medicaid FMAP rather than the CHIP enhanced EFMAP. The state
would be required to meet MOE requirements for the stand-alone
component. Beyond that, without an infusion of state funds,
families would need to purchase insurance through the
marketplace. This would likely present a financial burden for
some families. There is also the concern that some children
would not be eligible for marketplace coverage due to the
``family glitch'' in the affordability test.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
Annual allotments have been sufficient to cover the federal
portion of CHIP expenditures. It remains to be seen whether
states will benefit from the PPACA FMAP increase without an
extension of funding and review of the funding methodology.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of uninsured, and improved health outcomes for
children in your state?
Delaware is actively engaged in promoting health innovation and
transformation. As these efforts roll out, it will be necessary
to critically assess the roles and value of each program with
the goal of greater integration and alignment. CHIP currently
provides a critical bridge between Medicaid and the marketplace
but that need may diminish over time. It is also essential to
more seriously consider all factors which impact health
outcomes for children, including social determinants of health.
Increased coordination and alignment of eligibility policies
between federal agencies would strengthen the financial,
nutritional, housing, and social supports necessary for
children in low-income families.
Thank you,
Rita M. Langraf,
Secretary
______
STATE OF GEORGIA
office of the governor
ATLANTA 30334-0900
Nathan Deal
governor
November 20, 2014
The Honorable Ron Wyden, Chairman
Senate Finance Committee
221 Dirksen Senate Office Building
Washington, D.C. 20510
The Honorable Orrin G. Hatch, Ranking Member
Senate Finance Committee
104 Hart Senate Office Building
Washington, D.C. 20510
The Honorable Fred Upton, Chairman
House Committee on Energy and Commerce
2183 Rayburn House Office Building
Washington, D.C. 20515
The Honorable Henry A. Waxman, Ranking Member
House Committee on Energy and Commerce
2204 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairmen Wyden and Upton and Ranking Members Hatch and Waxman:
On behalf of the State of Georgia, I would like to thank you for the
opportunity to provide state-level input as Congress considers the
future of the Children's Health Insurance Program (CHIP). I am writing
to respond to the questions outlined in your July 29, 2014 letter
regarding the Children's Health Insurance Program in Georgia which is
also known as PeachCare for Kids. As a state-established program,
funded jointly between federal and state governments, your request for
input from the state of Georgia, on behalf of nearly 200,000 children
this program covers in our state, is greatly appreciated.
1. How many individuals are served by your state's CHIP program?
What are the characteristic of CHIP enrollees in your state
(e.g. income, health status, demographics)?
Response: In August 2014, 196,996 children were enrolled in the
PeachCare for Kids program. As renewals are completed monthly,
some children have been found to be eligible for the Medicaid
program, and they have been transferred to the Title XIX
program. We expect a monthly decrease of 3,000-4,000 children
until December 2014.
In terms of demographics, the following tables depict race,
gender, and household income data that you may find helpful.
Count of RACE
------------------------------------------------------------------------
Grand
F M Total
------------------------------------------------------------------------
American Indian or Alaska Native....... 107 94 201
Asian.................................. 4,519 4,736 9,255
Black or African American.............. 31,198 31,907 63,105
Hispanic or Latino..................... 14,477 15,034 29,512
Native Hawaiian or Other Pacific 56 64 120
Islander..............................
None................................... 7,974 8,115 16,089
Not Specified.......................... 77 80 157
Other.................................. 6,536 6,840 13,376
White.................................. 39,342 42,119 81,461
------------------------------------------------------------------------
Grand Total........................ 104,286 108,989 213,276
------------------------------------------------------------------------
The household income breakdown for members enrolled in the Georgia
CHIP program in June 2014 is included in the table below.
------------------------------------------------------------------------
Yearly Household Income Count
------------------------------------------------------------------------
$0-10,000.................................................... 97
$11,000-20,000............................................... 14,929
$21,000-30,000............................................... 44,448
$31,000-40,000............................................... 37,175
$41,000-50,000............................................... 17,446
$51,000-60,000............................................... 6,113
$61,000-70,000............................................... 1,452
$71,000-80,000............................................... 295
$81,000-90,000............................................... 69
$91,00 and up................................................ 59
------------------------------------------------------------------------
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Response: Georgia took several actions that were required as a
result of the Affordable Care Act (ACA). Note that these
changes required significant additional state resources and
extensive modifications to existing computer systems.
a. Georgia was required to lower premiums due to the income/
federal poverty level conversions required by the Act.
b. Georgia implemented a single application for Medicaid,
PeachCare for Kids and other public assistance programs.
Individuals wishing to apply may now apply through a single
electronic portal. Should individuals choose to apply via
paper, the paper application now used by the program is based
on the streamlined application created by the Centers for
Medicare and Medicaid Services (CMS).
c. Georgia was required to remove the requirement that families
returning to CHIP eligibility due to nonpayment of premiums pay
back past due premiums in order to be eligible for CHIP.
d. As a result of ACA, we have begun and will continue the move
of an estimated 58,000 children from CHIP to the Medicaid
program through December 31, 2014. These are children who are
between 100-133% of the federal poverty level.
e. The eligibility determination process for CHIP has been moved
to a Modified Adjusted Gross Income (MAGI) methodology. States
were required to adopt MAGI rules to determine income in order
to align with rules used for premium tax credits available
through the exchanges.
f. The CHIP program implemented a 45-day standard of promptness
for completion of applications in order to align with the
Medicaid program and comply with new regulations.
g. Consistent with Section 10203(b)(2)(D) of the Act, Georgia
modified CHIP eligibility criteria to permit enrollment of low-
income children of state employees who are otherwise eligible
under the state employees' health insurance plan.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
Response: Georgia has not completed a comparison of the services,
benefits, or cost sharing available through our CHIP program to
the exchange plans.
However, several organizations have completed reports that
include a comparison of Georgia's CHIP program to Exchange
plans.
The Robert Wood Johnson Foundation issued a report \1\ in July
2014 that was completed by Wakely Consulting Group that
included a comparison of Exchange plans available in Georgia to
the PeachCare for Kids (CHIP) program. They concluded that the
Actuarial value of Georgia's CHIP plan is 99.3% with an average
annual cost sharing of $24.00 when compared at 160% and 210% of
the FPL.
---------------------------------------------------------------------------
\1\ Wakely Consulting Group, A.B. (2014, July). Comparison of
Benefits and Cost Sharing in Children's Health Insurance Programs to
Qualified Health Plans. Retrieved August 1, 2014, from Kaiser Health
News: http://www.wakely.com/wp-content/uploads/2014/07/FlNAL-CHIP-vs-
QHP-Cost-Sharing-and-Benefits-Comparison-First-Focus-July-2014-.pdf.
The National Alliance to Adolescent Health also completed a study
\2\ that compared Georgia's plan to exchange plans. They
concluded that Georgia's CHIP coverage is much more affordable
and provides a broader set of benefits than subsidized silver
plans sold in the federal exchange. For your comparison
purposes, the premium cost per month for PeachCare for Kids
coverage is $0 to $35 for one child and a maximum of $70 for
two or more children living in the same household. There is no
cost for coverage for children under age 6. Additionally, co-
pays range from $0 to $15.00 depending on the service provided
and the age of the child. There are no copays for preventive
care services, including well child visits. Federal
requirements limit out of pocket costs for CHIP to be no more
than 5% of household income, including premiums and co-pays.
---------------------------------------------------------------------------
\2\ Fox, M.M. (2014, July). The National Alliance to Advance
Adolescent Health. Retrieved August 7, 2014, from
thenationalalliance.org:http://www.thenationalalliance.org/index.cfm.
The aforementioned studies, as previously noted, were completed
by third party organizations and their findings have not been
---------------------------------------------------------------------------
validated by the State of Georgia.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
Response: Children covered through CHIP could be enrolled in
other insurance through the federal exchange. The exchange plan
must be comparable to CHIP and be approved by the Secretary of
Health and Human Services. To date, the Secretary has not
certified such a plan. Also, the exchange is only an option if
the child's parent does not have access to affordable employer-
sponsored insurance.
Until such time that the Secretary identifies comparable plans,
the disparity between the CHIP premiums and copayments and
their impact on enrollment remains unknown. Therefore, an
estimate of the number of children that would be uninsured is
difficult to determine at this time. However, we do know that
today some families have difficulty paying the relatively low
cost-sharing for the CHIP program, and we project that
approximately 170,000 children would lose CHIP coverage in
Georgia if the program ended at this time.
The ACA required children 100%-138% of FPL to be covered by
Medicaid. This population is sometimes referred to as ``stair
step kids.'' In Georgia, these children were previously covered
under our CHIP program, PeachCare for Kids. Though this is a
mandatory expansion of Medicaid, CMS allowed states to continue
to draw the enhanced CHIP federal match for the stair step
population even though they are enrolled in Medicaid. The end
result was that moving this population to Medicaid had no cost
impact to the state.
If Congress were to discontinue the CHIP program, they would need
to either: (1) remove the requirement that Medicaid cover kids
up to 138% of FPL; or (2) continue the enhanced FMAP for the
stair step population.
Consistent with the recommendations of the Medicaid and CHIP
Payment Access Commission (MACPAC), an additional two (2) years
of funding would provide benefits which include but may not be
limited to: (1) ensuring continued access for children who may
otherwise become uninsured due to increased premiums and/or
patient co-payments; (2) providing sufficient market place
experience with exchange plans delivery of healthcare services
to children to assess comparability; and (3) give states
adequate time to prepare for the ending of the program, and to
assist with the transition of CHIP members to an exchange plan.
A critically important factor Congress should consider is need
for sufficient time for states to phase down the program and
work toward a smooth transition for these children. Therefore,
states need the earliest decision possible from Congress on the
direction of this program.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
Response: To date, the funding formula has worked appropriately
for Georgia and we do not see a need for Congress to address
the issue of unspent allotments at this time.
6. Over the past number of years, States have worked to reduce the
number of uninsured children and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of the uninsured, and improve health outcomes for
children in your state?
Response: There are several federal policy changes that would be
helpful.
A. Permit individuals to seek coverage and subsidies on the
exchange if the employer's offer of family coverage exceeds
9.5% of family income. The ACA requires that premiums for
individual coverage not exceed 9.5 percent of household income,
but there is no limit on the employee's share of premiums for
family coverage. Considering the cost of family coverage as a
percentage of family income as criteria for accessing coverage
through a subsidized plan via the exchange should be
considered. Otherwise, the cost of family coverage may cause
many to opt out of providing coverage for their children.
B. Permit federal subsidies for people with incomes below 400
percent of the federal poverty level. These subsidies are not
currently available for anyone who receives an offer of
insurance from an employer. That means workers who can't afford
employer-offered premiums for family coverage now have nowhere
to go except the Children's Health Insurance Programs (CHIP) or
Medicaid, if they qualify. Congress should consider expanding
Premium Assistance approaches to assist families in purchasing
employer-sponsored coverage for children and their parents as
an alternative to CHIP. We believe maintaining coverage as a
family unit--rather than approaches that split parents and
children--is a preferable approach and is beneficial to the
family.
C. Change Vaccines for Children (VFC) rules for CHIP to match
Medicaid rules, so that they are the same for all CHIP and
Medicaid programs. Children enrolled in a stand-alone CHIP
program are not eligible to receive VFC stock because the
children are considered insured. Children enrolled in a
Medicaid expansion CHIP model are eligible to receive VFC stock
because they are considered to be Medicaid eligible. The
current rule creates administrative and access barriers to
vaccines while disadvantaging certain states like Georgia who
have established separate CHIP programs.
Again, Georgia appreciates the opportunity to provide our thoughts on
the future direction of the CHIP program. As Congress evaluates various
options going forward, please do not hesitate to let me know if you
have any questions or concerns. For any follow up inquiries please
contact Clyde Reese, Commissioner, Department of Community Health.
Sincerely,
Nathan Deal
______
State of Hawaii
executive chambers
HONOLULU
NEIL ABERCROMBIE
GOVERNOR
October 10, 2014
The Honorable Fred Upton
The Honorable Henry A. Waxman
The Honorable Ron Wyden
The Honorable Orrin G. Hatch
2183 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Upton, Congressman Waxman, Senator Wyden, and Senator
Hatch:
This letter is in response to the questions posed regarding the
Children's Health Insurance Program (CHIP) in your July 29, 2014
letter. CHIP is an immensely valuable program for reducing the rate of
uninsured children. According to the U.S. Census Bureau Current
Population Survey 2013 Annual Social and Economic Supplement, Hawaii
had an uninsured children rate of 3.6%, one of the lowest in the
nation. CHIP, which provides health care coverage to 28,230 children in
Hawaii, plays an important role assuring access to health care for
Hawaii's children.
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics)?
As of June 2014, 28,320 children, of which 88 were blind or
disabled, benefited from Hawaii's CHIP program. The distribution of
eligible children by island of residence is 57% Oahu, 18% Hawaii,
14% Maui, 9% Kauai, and 1% Molokai/Lanai. Of the eligible children
statewide, 1% were age <1 year, 19% age 1-5 years, and 80% age 6-19
years. Distribution by household income is provided in the table.
------------------------------------------------------------------------
% FPL # %
------------------------------------------------------------------------
<150............................................ 575 2.0%
150 to <200..................................... 53 0.2%
200 to <250..................................... 21 0.1%
250 to <300..................................... 27,671 97.7%
-----------------------
Total....................................... 28,320 100.0%
------------------------------------------------------------------------
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Hawaii has implemented CHIP as a Medicaid expansion program. As
such, the two programs are fully integrated from an operational
perspective. Hawaii has implemented changes specifically required
under the ACA (e.g., provider enrollment and screening), and has
successfully implemented a new eligibility system with online
application capability and interface to the federal services data
hub. The implementation of PPACA has otherwise not impacted
Hawaii's administration of its CHIP program.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state under
CHIP that are not comparably available through your state's
exchange or through the majority of employer sponsored health plans
in your state.
Children in Hawaii covered under CHIP receive full Medicaid state
plan benefits, including EPSDT, which meet minimal essential
coverage and are comparably or more available compared to
commercial health plans available in the State. Hawaii's CHIP has
no cost sharing.
I strongly support extending the enhanced reimbursement in
Medicaid, expanding provider eligibility to other key specialties
and provider types, and extending these initiatives to all of CHIP
or at least to Medicaid expansion CHIP. Commercial health plans
reimburse providers at a higher rate. The reimbursement enhancement
to primary care providers in Medicaid has been valuable, but this
provision did not extend to CHIP. This has been challenging in
states, like Hawaii, that have implemented CHIP as a Medicaid
expansion as it has been difficult to implement the enhancement for
primary care providers but not for CHIP providers as Hawaii does
not have a separate CHIP program.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe CHIP
funding should be extended, what coverage (if any) do you believe
CHIP enrollees in your state would be able to obtain? How many
children covered by CHIP do you estimate would become uninsured in
the absence of CHIP?
No child should be without health insurance, and I strongly
recommend that CHIP funding be extended. To avoid any gap in
program continuity and provide stability to states, funding should
be established prior to expiration of the current funding and for a
period of no less than two years, preferably ten years.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting in 2009 have
been sufficient and the formula is working appropriately? Do you
believe there is a need for Congress to further address the issue
of unspent allotments?
The CHIP funding for Hawaii has been sufficient.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of
uninsured, and improve health outcomes for children in your state?
Looking at the federal funding given to health insurance exchanges
for outreach as precedent, providing 100% federal funding to states
for outreach to identify and enroll uninsured children would be
beneficial. For younger children, increased federal funding could
be made available to public health agencies to incorporate health
insurance tracking and application assistance with immunization
efforts. For school age children, schools in receipt of federal
funding could be required to verify that students have health
insurance, and schools could be required and/or given the authority
to submit an application for affordable health insurance on behalf
of an uninsured student.
Thank you for the opportunity to communicate my complete support for
continued funding for the CHIP program and for other efforts to reduce
the rate of uninsured children. If you have any questions regarding
these responses, please contact our State Medicaid Director, Dr.
Kenneth Fink.
Neil Abercrombie,
Governor, State of Hawaii
c: Patricia McManaman, (OHS, Director)
Kenneth S. Fink, MD, MGA, MPH, (DHS, MQDA)
______
The State of Idaho
C.L. ``Butch'' Otter
Governor
November 10, 2014
Congressman Fred Upton
House Committee on Energy and Commerce
2183 Rayburn House Office Building
Washington, DC 20515
Dear Congressman Upton,
Thank you for your recent letter about the Children's Health Insurance
Program (CHIP). Idaho has partnered with the Centers for Medicare and
Medicaid Services (CMS) since 1997 to provide healthcare coverage for
eligible Idaho children.
I am aware that the existing funding authority under CHIPRA for the
CHIP Program is ending, and I appreciate your inquiry seeking specifics
about our program here in Idaho. My responses are below.
(1) How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g. income, health status, demographics)?
(a) Idaho had 25,518 children enrolled in our SCHIP program as of
the end of FFY13.
(b) Idaho 's CHIP income cap is 185 percent (plus 5-percent
disregard) of the federal poverty guidelines. CHIP enrollees
are primarily Caucasian, tend to live in the largest urban
areas of Idaho and are of good health status.
(2) What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
(a) In accordance with the PPACA, Idaho changed our income and
eligibility methodology to use the Modified Adjusted Gross
Income (MAGI) basis and moved children to our Title XIX
program, effective January I, 2014.
(b) Idaho's administration of CHIP was impacted by the changes
indicated above which required extensive modifications to our
automated eligibility and claims systems. Idaho expects to
exhaust all of our CHIP allotment this year.
(3) To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
Children enrolled in Idaho's CHIP program have the same benefits as
children enrolled under the Idaho Medicaid State plan. Idaho's CHIP
program provides some benefits typically not provided through
exchange or Employer Sponsored Insurance (ESI) plans such as:
disposable medical supplies, hospice, case management for children
with special health care needs, dental care, Early Periodic
Screening Diagnosis & Treatment services (EPSDT) and enabling
services such as translation and medical transportation.
Idaho's CHIP children are subject to $3.65 copays for some, but not
all services, which is about 60 percent less than co-pays provided
through gold plans on our exchange or through ESI plans. Premiums
for CHIP children are $15 or less per month. This also is
significantly less expensive than exchange or ESI plans. CHIP
children are not subject to deductibles, out of pocket maximums or
lifetime benefit limitations, which are integral parts of exchange
and employer sponsored plans.
(4) Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what time
frame should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
Yes, I do recommend that CHIP funding be extended. Extending the
funding through 2019 as a transition period would allow for key
issues regarding the affordability and adequacy of children's
coverage on the exchange to be addressed. Provisions in the current
law that make it difficult for families to affordably maintain a
single source of coverage should be addressed. We do not have a
good estimate of the number that would become uninsured at this
time.
(5) In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
(a) Yes, the annual allotment Idaho has been receiving in recent
years has been sufficient to meet our needs.
(b) Yes. Adjusting to allow greater flexibility for states would
be a positive measure to allow states to improve management and
planning for their CHIP programs.
(6) Over the past number of years, states have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been
critical components of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of the uninsured, and improve health outcomes for
children in your state?
Yes, there are federal policy changes that could assist Idaho
families in providing health coverage for their families.
Make CHIP look like an insurance plan (rather than an entitlement
plan) by removing entitlement assurances like EPSDT and non-
emergency medical transportation.
Allow parents to have the option of choosing between premium
subsidies on the exchange or subsidies for ESI coverage. These
changes would allow families to choose a family plan through
the marketplace or ESI and would improve continuity of care for
the entire family and would avoid placing family members on
separate health plans with separate provider networks and/or
cost sharing requirements. Traditional insurance plans can do a
better job managing premium/co-pay requirements.
Thank you for the opportunity to share the specific details of Idaho's
CHIP program. If you need any additional information regarding our
program, please contact my CHIP Director, Matt Wimmer.
As Always--Idaho, ``Esto Perpetua''
CLO/tp
C.L. ``Butch'' Otter
Governor of Idaho
cc: Congressman Henry Waxman
______
State of Illinois
OFFICE OF THE GOVERNOR
Springfield, Illinois 62706
Pat Quinn
GOVERNOR
October 24, 2014
The Honorable Fred Upton
House Committee on Energy and Commerce
The Honorable Henry A. Waxman
House Committee on Energy and Commerce
The Honorable Ron Wyden
Senate Finance Committee
The Honorable Orrin G. Hatch
Senate Finance Committee
Re: Children's Health Insurance Program (CHIP)
Dear Honorable Members of Congress:
Thank you for offering this opportunity to express Illinois' strong
support for the continuation of the federal Children's Health Insurance
Program.
CHIP has played a key role in Illinois' efforts to provide health
coverage to hundreds of thousands of children and pregnant women since
the inception of our first expansion of coverage in 1998. Not only has
CHIP enabled Illinois to expand coverage to children in families with
income above our Medicaid income level, the outreach activities and
streamlined application processes resulting from CHIP have had
important spillover effects by facilitating enrollment of eligible
children in Medicaid.
The close integration of CHIP funded coverage with Medicaid coverage
has allowed Illinois to provide a safety net of health coverage to
uninsured Illinois children for more than 15 years. Illinois was one of
the first states to cover a broad demographic of uninsured children
including non-citizen children and children in families at higher
income levels. As a result of our approach, over the past five years
Illinois has received over $60 million in bonus payments under the
Children's Health Insurance Program Reauthorization Act of 2009. We
understand we are one of only nine states to receive bonus payments for
five consecutive years.
As a result of changes required by the Affordable Care Act and with
CHIP and Medicaid support, Illinois now covers children with family
income up to 318 percent of the federal poverty level guidelines.
Responses to your specific questions follow.
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g., income, demographics)?
CHIP funding contributes to Illinois' coverage of approximately 219,000
children and pregnant women as of June 30, 2014.
Illinois uses the CHIP ``unborn'' group to cover pregnant women who are
not eligible to enroll in Medicaid and their children for the first few
months of the children's lives. The unborn group included a total of
about 38,000 individuals on June 30, 2014: 12,000 pregnant women and
26,000 infants. All of these individuals live in families with income
no greater than 213 percent of the Federal Poverty Level (FPL)
guideline. They have no cost-sharing obligations for services.
Of the 181,000 children not in the unborn group, about 50 percent have
family income falling into the lowest CHIP funded plan which is our
Medicaid expansion. They have no cost sharing for services. Of the
remaining 91,000 children, about 14 percent pay modest co-payments for
most services not including well-child care and about 36 percent pay
small monthly premiums in addition to co-payments for services.
Of the 207,000 CHIP-funded children enrolled in Illinois on June 30,
2014 (including the 26,000 infants mentioned above), 25 percent are age
5 or younger, 41 percent are ages 6 through 12 and 34 percent are ages
13 through 18.
The majority of enrollees, 73 percent, live in Cook County and the five
counties neighboring Cook. About 10 percent live in the northwestern
region of the state and about 17 percent live in central and southern
Illinois.
Of those who reported their race, 48 percent self-identified as White
of whom 26 percent reported Hispanic/Latino ethnicity; 10 percent self-
identified as Black or African American of whom 2 percent reported
Hispanic/Latino ethnicity; 5 percent self-identified as Asian of whom 2
percent reported Hispanic/Latino ethnicity; fewer than 1 percent self-
identified as Hawaiian/Other Pacific Islander of whom 26 percent
reported Hispanic/Latino ethnicity; fewer than l percent self-
identified as American Indian/Alaska Native of whom 46 percent reported
Hispanic/Latino ethnicity; and 1 percent self-identified as multiracial
of whom 14 percent reported Hispanic/Latino ethnicity. Of the 35
percent of enrollees who did not answer the race question, 72 percent
reported Hispanic/Latino ethnicity. Of the total population, 12 percent
reported Hispanic/Latino Ethnicity. Eighteen percent of the population
failed to report any race or ethnicity.
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
While technically Illinois has implemented CHIP through a combination
Medicaid expansion and separate CHIP program, the ``separate'' program
is highly integrated with Medicaid and has been since its
implementation in Illinois in 1998. Largely for that reason, Illinois
had to make few changes in the administration of CHIP as a result of
enactment of the ACA. The most significant change required was the
adoption of the Modified Adjusted Gross Income or ``MAGI'' methodology
for determining eligibility. This required converting our CHIP income
standards to eliminate the state specific income disregards that we had
previously employed.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
Illinois' separate CHIP coverage is administered under the umbrella of
All Kids, our array of plans for children. For CHIP eligible children,
All Kids offers more robust benefits than those available through the
Health Insurance Marketplace and All Kids' cost sharing requirements
are more affordable.
The fundamental difference between services covered under All Kids and
services covered by the benchmark plan for qualified health plans
available through the Marketplace in Illinois is the availability of
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT)
benefits. Illinois has always offered our CHIP eligible children the
same EPSDT services required for Medicaid eligible children. EPSDT
coverage includes all screening, prevention and medically necessary
diagnostic and treatment services falling with in the federal
definition of Medicaid. EPSDT benefits include dental, vision and
hearing services. No similarly broad coverage is found within the
Marketplace benchmark plan, nor are we are aware of any comparable
coverage offered by employer-sponsored plans in Illinois.
Premium and cost sharing limits in Illinois' All Kids are much lower
than what is allowed in the Marketplace plans at equivalent income
levels. We believe the same holds for children enrolled in employer-
sponsored plans. For children in All Kids whose services are funded
with CHIP dollars, monthly premiums range from $0-40 per child with a
maximum of $80 per month for two or more children, and cost sharing for
office visits ranges from $3.90-$15 per visit. Appropriate emergency
room visits require no co-payment. On the Marketplace in 2014, the
lowest cost bronze plan in Chicago for one child has a monthly premium
of $76 per month and a$6,000 deductible. The lowest cost silver plan
has a monthly premium of $105 per month, a $6,000 deductible, and a $30
co-pay for a primary care doctor, $50 co-pay for a specialist, and $500
co-pay for an emergency room visit. Similarly, in Peoria, the lowest
cost bronze plan for one child has a monthly premium of $81 per month
with a $6,300 deductible. The lowest-cost silver plan has a premium of
$108 per month with a $3,750 deductible and a $10 co-pay for a primary
care doctor, $75 co-pay for a specialist, and $500 co-pay for an
emergency room visit.
Financial help is available on the Marketplace through premium tax
credits and cost-sharing reductions, but All Kids is less expensive.
For example, All Kids covers children in families with income up to 318
percent of the federal poverty level guidelines in Illinois. On the
Marketplace at 300 percent FPL, families are expected to contribute 9.5
percent of their household income toward the benchmark plan's premium
and no cost-sharing reductions are available. Even at 200 percent FPL
on the Marketplace, the household is expected to contribute 6.3 percent
of their household income toward the benchmark plan and, with cost-
sharing reductions, a consumer has to cover 27 percent of the cost of
benefits, on average.
Additionally, on the Marketplace, financial help is only available to
consumers without alternative minimum essential coverage (MEC). Under
IRS regulations, if an employee receives an affordable offer of
coverage from their employer and even if the dependent coverage offered
by the employer is unaffordable, all dependents are considered to have
MEC. While CMS regulations provide dependents in this situation with an
exemption from the individual responsibility penalty, the children
still need health insurance. Without CHIP financing to support All
Kids, households who face this ``family glitch'' are unlikely to have
an affordable coverage option for their children.
Two recent articles appearing in Health Affairs that document the hit
to children's coverage that would be experienced from ending CHIP
support our analysis. Abdus \1\ et al. used a carefully developed
simulation model to estimate the impact on children's coverage of these
kinds of changes (i.e. from CHIP to Marketplace) and found it would
materially reduce coverage. McMorrow \2\ et al. suggested that more
than 50 percent of children currently on CHIP would not be eligible for
the Marketplace because of parental access to other MEC. If insurance
were purchased from this other source, it would materially increase
premiums and other costs, resulting in the loss of coverage estimated
by Abdus et al.
---------------------------------------------------------------------------
\1\ Abdus, S. et al., ``Children's Health Insurance Program
Premiums Adversely Affect Enrollment Especially among Lower-income
Children,'' Health Affairs (Vol. 33, Num. 8; August, 2014), pp. 1353-
1360.
\2\ McMorrow, S. et al., ``Trade-Offs Between Public and Private
Coverage for Low-Income Children Have Implications for Future Policy
Debates,'' op. cit., pp. 1367-1374.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
---------------------------------------------------------------------------
become uninsured in the absence of CHIP?
We strongly recommend extending CHIP funding for five years. Because of
the significantly lower amount of subsidy for Marketplace plans and the
lack of any public subsidy for employer sponsored plans, we believe a
significant number of families would choose to forgo health coverage
for their children should CHIP funded All Kids coverage be eliminated.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
The allotments have been sufficient for Illinois since 2009. At this
time, we do not see a need to adjust the process for reallocating
unspent funds. However, we strongly encourage the Congress to preserve
the 23 percent increase in CHIP federal financial participation (FFP)
scheduled for 2016 and also assure that state allotments are adequate
to permit us to take full advantage of the increase in FFP.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of the uninsured, and improve health outcomes for
children in your state?
Illinois strongly recommends allowing states to use CHIP funds to cover
undocumented children through age 18. Regardless of how they came to
live in the United States, an investment in children is an investment
in the future. For this reason, we work to promote the health of all
children residing in Illinois and request federal funding to support
this goal.
In closing, I must stress that preserving the support CHIP provides to
states is critical to assuring we do not lose ground in our quest to
give all of our children the health care they need to thrive.
Sincerely,
Pat Quinn, Governor of Illinois
______
Indiana Family and Social Services Administration
Michael R. Pence, Governor
State of Indiana
Office of Medicaid Policy and Planning
MS 07, 402 W. WASHINGTON STREET, ROOM W382
INDIANAPOLIS, IN 46204-2739
December 12, 2014
The Honorable Ron Wyden The Honorable Orrin G. Hatch
Chairman Ranking Member
Senate Finance Committee Senate Finance Committee
The Honorable Fred Upton The Honorable Henry A. Waxman
Chairman Ranking Member
Energy and Commerce Committee Energy and Commerce Committee
Dear Chairman Wyden, Ranking Member Hatch, Chairman Upton, and Ranking
Member Waxman:
Indiana appreciates the opportunity to respond to your questions about
the Children's Health Insurance Program (CHIP) and health coverage for
children in our state. We applaud efforts by Congress to ensure low
income children have access to affordable, high quality health care
coverage and recognize the significant contribution of CHIP in
accomplishing this goal. In determining the appropriate course for the
CHIP program in both the short term and the long term, we recommend
that Congress address several challenges to children's coverage put in
place by the Patient Protection and Affordable Care Act (PPACA).
Many families struggle to afford health care coverage in our state
because of increased costs directly related to PPAC's changes to
insurer ratings rules. We estimate that these changes have resulted in
cost increases of 50 to 100 percent, which puts a substantial strain on
family budgets. In addition, the advance premium tax credits available
to adults through the Market place do not coordinate with the CHIP
program and separate children from their parent's health plans.
Children may receive coverage through the CHIP program or Medicaid and
their parents may receive coverage through the Marketplaces, which
means that many families must manage multiple health programs.
In addition, PPACA could create a perverse incentive for employers to
increase the cost of dependent coverage. The law requires an employer
to offer coverage that costs no more than 9.5 percent of income for the
eligible employee; however, if coverage for the employee is considered
``affordable'' then, regardless of the cost of family coverage, all
family members are disqualified from accessing the PPACA's tax credits
to purchase private family policies on the Marketplace. As long as the
cost of the employee's coverage meets the affordability test, the
employer avoids a penalty. This so-called ``family glitch'' therefore
has the potential to thwart access to subsidies designed to increase
access to health insurance.
Congress should repeal PPACA and enact legislation that offers families
more choices to enroll their children into private market coverage
instead of being forced into government health care programs. Subsidies
should create affordable health care options and be coordinated across
programs so that families have the choice of obtaining a private health
plan that covers the entire family through the Marketplace or an
employer plan, if that plan meets their needs.
If Congress continues CHIP, the program should be targeted to the
lowest income children, reflecting the bipartisan compromise approved
by Congress in 1997 that provided coverage for the neediest children
without expanding government programs into the middle class. A
continued CHIP must provide states with maximum flexibility to achieve
coordination of family coverage without federal requirements that limit
family choices and access to private market plans. Legislation should
be structured to allow states to integrate CHIP with existing Medicaid
reform models, such as our state's Healthy Indiana Plan (HIP). The HIP
program prepares individuals to move from public assistance to the
private insurance market and advances consumer-driven health care while
creating incentives for participants to obtain preventive care and
adopt healthy lifestyles.
Below, we provide responses to each of your specific questions.
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics)?
In October 2014, 74,518 individuals were enrolled in the Indiana CHIP
program. This includes both the Medicaid Expansion Program (MCHIP) and
the Separate CHIP (SCHIP) populations.
------------------------------------------------------------------------
Number Enrolled Number Enrolled
October 2013 October 2014
------------------------------------------------------------------------
Medicaid Expansion CHIP (MCHIP) 54,285 50,675
Age 0-1:157%-208% FPL *
Ages 1-5: 141%-158% FPL *
Ages 6-18: 106%-158% FPL *
------------------------------------------------------------------------
Separate CHIP (SCHIP) 26,734 23,843
Age 0-1: >208%-250% *
Ages 1-18: >158%-250% *
------------------------------------------------------------------------
Total 81,019 74,518
------------------------------------------------------------------------
* All FPL percentages represent MAGI rates effective Jan 1, 2014
The demographic analysis of the CHIP population found here applies to
the 2013 program enrollees. Nearly half of the children enrolled in
CHIP are between the ages of 6 and 12. This is because children under
age 6 are eligible for Medicaid at higher family income levels. Just
fewer than 35 percent of CHIP enrollees are teenagers, while the
remaining 17 percent are under age 6. This distribution is consistent
with observed demographics since CHIP was first implemented in Indiana.
There is a higher distribution of minorities in Indiana's CHIP program
than the overall population in Indiana for children ages 18 and
younger. Compared to the U.S. Census estimate, African-American
children (15.9% of CHIP enrollees in CY 2013) and Hispanic children
(14.3% of CHIP enrollees in CY 2013) are represented more in CHIP than
in the statewide population. Between CY 2011 and CY 2013, the
proportion of Caucasian CHIP members declined (67.5 and 65.5,
respectively). The African-American proportion increased from 14.4
percent in 2011 to 15.9 percent in 2013. The Hispanic proportion
decreased slightly from 14.8 percent in 2011 to 14.3 percent in 2013.
Other races have increased from 3.3 percent in 2011 to 4.3 percent in
2013.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Indiana operates its CHIP program in close coordination with the
Medicaid program. The changes made to the CHIP program for PPACA mirror
the overall Medicaid program changes that were required by the PPACA.
Indiana has had a single, streamlined application and eligibility
process for both Medicaid and CHIP for many years. This allowed us to
make only a few changes to the CHIP program and stay compliant with new
Federal rules. The following highlight the major changes:
The Indiana Health Coverage Programs Application was altered to
meet new PPACA requirements. This application is for all
Medicaid and CHIP program eligibility.
The financial eligibility guidelines were modified to reflect the
Modified Adjusted Gross Income (MAGI) methodology. New MAGI
adjusted FPLs for allcategories led to an adjustment of the
lowest level FPL for the SCHIP income eligibility standard.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state under
CHIP that are not comparably available through your state's
exchange or through the majority of employer sponsored health plans
in your state.
The Indiana SCHIP program requires monthly premiums and a limited set
of co-pays. Monthly premiums are set on a sliding scale based on family
income and the number of children covered. The table below details
premium charges. Co-pays are assessed for prescription drugs ($3 or $10
per prescription) and for emergency ambulance transportation ($10).
----------------------------------------------------------------------------------------------------------------
Number of Covered Children Up to 175% FPL Up to 200% FPL Up to 225% FPL Up to 250% FPL
----------------------------------------------------------------------------------------------------------------
1........................................... $22 $33 $42 $53
2 or more................................... $33 $50 $53 $70
----------------------------------------------------------------------------------------------------------------
Children in the MCHIP program are covered by full State Plan benefits.
Children in the SCHIP program have access to slightly fewer services,
including no organ transplants, no non-emergency transportation, and
limitations to physical, speech, and occupational therapy.
The Medicaid State Plan provides services beyond the standard
commercial plan and Essential Health Benefits. We do not have a
detailed comparison of SCHIP cost sharing and coverage compared to
typical exchange products or commercial cost sharing and coverage.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe CHIP
funding should be extended, what coverage (if any) do you believe
CHIP enrollees in your state would be able toobtain? How many
children covered by CHIP do you estimate would become uninsured in
the absence of CHIP?
Indiana supports efforts to ensure that children have access to
affordable health care coverage and we encourage Congress to seek
solutions to the issues outlined above. Congress should also be mindful
of the cost of these efforts, as states are already burdened by the
PPACA's many unfunded mandates. We also recommend timely action to
avoid any coverage gaps for children.
Extension of CHIP funding should be considered in the context of
addressing the current barriers to family coverage created by PPACA.
Again, we believe there is significant value in families taking
advantage of family coverage options in the private market and we
encourage those options over government programs.
Indiana is currently exploring premium assistance options to keep
parents and their children together using CHIP dollars. If CHIP funding
is extended, we believe the federal government should make it easier
for states to coordinate their CHIP programs with the Marketplace and
employer plans and eliminate problems resulting from health coverage
silos created in the Affordable Care Act. Indiana also requests that
the Maintenance of Effort provision be lifted to allow states the
flexibility to establish eligibility levels most appropriate for their
states.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting in 2009 have
been sufficient and the formula is working appropriately? Do you
believe there is a need for Congress to further address the issue
of unspent allotments?
The structure of the CHIP program provides key evidence that states can
successfully manage entitlement programs within a block grant
structure. Indiana has never exceeded the state's allotment for the
CHIP program. The funding formula has never disadvantaged Indiana or
limited our ability to cover the populations we believe are most in
need of assistance. However, we believe states should have even more
flexibility with the use of CHIP dollars--for example, in the areas of
benefit and cost-sharing design. We believe a block grant funding model
with additional flexibility could allow states to develop more
innovative Medicaid solutions like the Healthy Indiana Plan that
prepare individuals to transition off of public assistance. We
encourage Congress to look at this model for structural Medicaid
funding reform.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of the
uninsured, and improve health outcomes for children in your state?
The current policies of the CHIP program have positively impacted the
health of children in our state and have allowed us to have one of the
lowest uninsured rates for children under 200% FPL. For this income
group, Indiana's most recent uninsured rate is 10.3 percent compared to
the national average of 14.4 percent. Indiana's 10.3 percent uninsured
rate among children in families below 200 percent of the FPL places the
State as the 15th lowest uninsured rate in the country for this income
group among all states.
In conclusion, we strongly support efforts to provide health coverage
to America's children and recognize, in particular, the role the CHIP
program has in addressing the needs of low income children. We believe
that policies intended to grow the state's economy will reduce reliance
on the CHIP program and move families off public assistance programs
and into private coverage. We encourage Congress to work with states to
assess alternative private coverage sources in the new coverage
landscape lo determine the need for, and design of, the CHIP program
moving forward. If the program is continued by Congress, we believe
additional flexibility should be given to states in the administration
of the program and that assistance in the program should be targeted to
the lowest income children reflecting the bipartisan compromise
approved by Congress in 1997 that provided coverage for the neediest
children without expanding government programs into the middle class.
We look forward to working with you on this important effort.
Sincerely,
Joseph Moser
Medicaid Director
______
Iowa Department of Human Services
1305 E. Walnut Street, Des Moines, IA 50319-0114
Terry E. Branstad
Governor
Kim Reynolds
Lt. Governor
Charles M. Palmer
Director
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2125 Rayburn Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2322A Rayburn Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
Dear Chairman Upton, Ranking Member Waxman, Chairman Wyden, Ranking
Member Hatch:
The purpose of this letter is to respond to specific questions
regarding the reauthorization of the Children's Health Insurance
Program (CHIP), for which funding expires at the end of Federal Fiscal
Year 2015.
CHIP is a successful program providing affordable access to healthcare
coverage for children of the working poor. In considering CHIP
reauthorization, it is necessary to contemplate the current context of
healthcare coverage post implementation of the Patient Protection and
Affordable Care Act (PPACA). Viewed through this lens, the value of
CHIP can be less clear as new options for healthcare coverage have
emerged in a complicated patchwork of eligibility boundaries, coverage
mechanisms and subsidy levels. This has produced confusion for families
as different individual qualifications cause them to fracture across
multiple plans, each with unique coverage policies and provider
networks. The result is an overall approach to healthcare support
layered with disorder and inefficiency.
Iowa believes it is necessary to streamline and simplify eligibility
moving forward with a goal of keeping families together, as is
generally the case under private coverage. It is understood that will
take time. In the near term, CHIP funding should be extended for two
more years while that simplified course is charted. We must ensure the
stability of this coverage group, especially when considering the
implications for states regarding maintenance of effort requirements
found in PPACA.
Included are responses to the July 29, 2014, letter from congress
regarding Iowa's CHIP program. Please feel free to contact me if you
need additional information.
Sincerely,
Charles M. Palmer
Director
CMP/jl
Attachment
cc: IME, Julie Lovelady, Medicaid Director
IME, Bob Schlueter, CHIP Director
Mr. Doug Hoelscher, Office of State-Federal Relations
______
July 29, 2014 Letter from Congress CHIP Q&A
How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.,
income, health status, demographics)?
Response: Iowa's CHIP program is made up of three components: a
Medicaid expansion component, a separate CHIP component (hawk-i),
and a dental-only component (hawk-i dental-only). As of April 2014,
the number of children served by the Medicaid expansion component
was 26,781 children, the separate CHIP component (hawk-i) was
36,904 children, and the dental-only component (hawk-i dental-only)
was 3,504 children. Combining all groups brings the total to
67,189.
Within the hawk-i program, approximately 70% are at or below 200% of
the federal poverty level. The racial and ethnic breakdown of these
individuals is approximately 47% White, 5% Hispanic, 1.9% Black, 1%
Asian/Pacific Islander, and 44% unspecified.
What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Response: The biggest change was the conversion to the PPACA's MAGI
method of income determination on January 1, 2014. That
implementation has not fundamentally changed the population served.
The administration of the program also remains consistent with pre
PPACA approach, although technical details around implementing MAGI
(including the new eligibility system related to that) have
presented a number of detail operational changes.
To the extent of the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state under
CHIP that are not comparably available through your state's
exchange or through the majority of employer sponsored health plans
in your state.
Response: The benefits of the CHIP hawk-i component would be roughly
comparable to Qualified Health Plan (QHP) coverage on the federal
Marketplace, but the cost sharing would be lower in virtually all
cases. Benefits under the Medicaid expansion component would be
superior to the QHP and also include Early Periodic Screening,
Diagnosis, and Treatment (EPSDT) Program. EPSDT is the child health
component of Medicaid and basically mandates extensive coverage of
anything diagnosed in a child; this means things like glasses would
be covered under CHIP that may not be typical of marketplace or
employer-based coverage. Iowa's CHIP does not have cost sharing for
any of its benefits and service, but can include premiums up to
$40.
Do you recommend that CHIP funding be extended? If so, for how long,
and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe CHIP
funding should be extended, what coverage (if any) do you believe
CHIP enrollees in your state would be able to obtain? How many
children covered by CHIP do you estimate would become uninsured in
the absence of CHIP?
Response: We recommend that CHIP financing be extended at least two
years until alternative policy options can be fully considered. One
alternative for CHIP enrollees is subsidized coverage available
through the Marketplace. Certain policy changes will need to take
place before states can move freely in this direction.
Currently, Department of Treasury rules do not allow the children of
an employee to access federal Premium Tax Credits if the employee
is offered affordable employer-sponsored insurance. However, the
affordability test does not take into consideration the cost of
family coverage, only individual coverage. Without a change in this
policy, families that are subject to this standard would be unable
to attain affordable coverage for their children. If comparable,
affordable QHP coverage is available for families in the
Marketplace, it could be considered as an option for uninsured
children if CHIP were not continued.
In addition, the Maintenance of Effort (MOE) requirements in the
PPACA need to be modified to reflect any changes to the program. As
long as the MOE requirement remains part of federal law, we cannot
consider changes that affect CHIP. After these changes are made,
states will be able to further consider policy options regarding
the CHIP program.
In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting in 2009 have
been sufficient and the formula is working appropriately? Do you
believe there is a need for Congress to further address the issue
of unspent allotments?
Response: Federal Fiscal Year (FFY)13 and FFY14 allotments have been
adequate to fund Iowa's CHIP program. It is unclear if there will
be sufficient funding in FFY15 and beyond, to maintain Iowa's CHIP
program. PPACA directs that beginning October 1, 2015 the already
enhanced CHIP federal matching rate will increase by 23 percentage
points, bringing the average federal matching rate for CHIP to 93%.
The enhanced federal matching rate continues until September 30,
2019. This legislation would require a much larger annual allotment
in order for Iowa to maintain the CHIP program in its current form.
Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of
uninsured, and improve health outcomes for children in your state?
Response: Federal policies should streamline and simplify eligibility
policies of the various programs. CHIP, Medicaid and the Health
Insurance Marketplace have been layered, creating both unnecessary
redundancy and coverage silos. The resulting ``system'' is complex,
creates confusion and exacerbates churn as beneficiaries move
across various boundaries around age, income and other
qualifications. It is often impossible to keep families together in
a unified coverage. Policies that help the parents of children gain
coverage and stay enrolled would help to improve the penetration
rate and reduce the uninsured rate.
Once coverage is clear and secure, healthcare system transformation
efforts, such as ACO, show a great deal of promise in improving
health outcomes for both children and adults. In addition,
partnerships with groups outside of the ACO, such as public health
or outreach workers, could help to mitigate some of the gaps that
prevent individuals and families from engaging in more healthy
behaviors. Within Iowa's SIM test, the multi-payer aligned
healthcare transformation process is intended to expand across
greater segments of the population, including CHIP. This payment
structure and related reforms is pushing for improved population
health outcomes by focusing payment on value.
______
Kansas
Department of Health & Environment
Curtis State Office Building
1000 SW Jackson St., Suite 540
Topeka, KS 66612-1367
Phone: 785-296-0461
Fax: 785-368-6388
www.kdheks.gov
Robert Moser, MD, Secretary Sam Brownback,
Governor
Dear Chairmen and Ranking Members:
Thank you for your inquiry regarding the Children's Health
Insurance Program (CHIP). I agree that it is crucial that Members of
Congress seek insight and analysis on federal/state partnerships such
as CHIP. I have considered each of your questions and provided the
pertinent information and recommendations. I have included each of the
questions from your initial correspondence for reference.
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g. income,
health status, demographics)?
Concerning enrollment, 56,705 children were covered by CHIP as of
June, 2014. Age groupings are less than 1% under age 1; 18.5% for
ages 1-5; 47.4% for ages between 6 and 12; and 33.4% for teenagers.
Concerning demographics, 67.3% reside in an urban setting, 28.4%
reside in a rural county and 4.3% live in a frontier community.
51.3% were male and 48.7% were females.
Concerning income characteristics, 53.3% belong to households with
incomes less than 150% FPL, 34.3% belong to households with incomes
between 150 and 200% FPL and 12.4% belong to households with
incomes over 200% FPL.
Looking at Health Status information, claims/type of services
rendered during FY 2013 and 2014, most services are associated with
normal childhood illnesses (ear infections, flu, eye problems,
other infections and childhood injuries). The large number of
mental health services is also worth noting. Children meeting
disability criteria are generally covered under Medicaid categories
and are not covered by the CHIP program.
2. What changes has your state made to its CHIP program as a result of
the ACA? How has implementation of the ACA impacted the way your state
administers CHIP?
Kansas has always operated an integrated Medicaid/CHIP program, so
changes to CHIP have not been significant.
Kansas has implemented:
a. The new MAGI methodologies requiring the use of new household
and income requirements.
b. The new ``m-chip'' group (moving a group of children from CHIP
into Medicaid) is mandated by the ACA.
c. The new Premium payment enforcement timeline--under previous
policy, families who were delinquent on premium payments
were not eligible until they became current on payments. We
are now applying 3 months maximum non-payment penalty as
mandated by the ACA and/or associated regulations.
d. Changes in the crowd-out. Crowd out occurs when someone
voluntarily drops health insurance in order to be eligible
for CHIP. Previously, Kansas had an 8 month waiting period
from the date of voluntarily dropping coverage. As required
by ACA, Kansas changed the look-back timeframe from 8
months to 3 months.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and/or
benefits and/or cost sharing that is currently provided in your state
under CHIP that are not comparably available through your state's
exchange or through the majority of employer-sponsored health plans in
your state.
That information is as follows:
a. Cost sharing: The only cost sharing for CHIP in Kansas are
premiums (see chart below) for some higher income families.
There are no deductibles or co-pays. Here are the levels of
premium obligations:
----------------------------------------------------------------------------------------------------------------
FPL Percentage Premium Amount
----------------------------------------------------------------------------------------------------------------
167-191% $20
----------------------------------------------------------------------------------------------------------------
192-218% $30
----------------------------------------------------------------------------------------------------------------
219-242% $50
----------------------------------------------------------------------------------------------------------------
b. Benefits: As indicated under Question 2, Kansas operates an
integrated Medicaid/CHIP program. The benefit coverage is
the same between programs including the Early Periodic
Screening Diagnosis and Treatment provision. No commercial
insurance has a benefit coverage as rich as the Medicaid/
CHIP coverage.
4. Do you recommend that CHIP funding be extended? If so for how long,
and for budgeting and planning purposes, under what timeframe should
Congress act upon any extension? If you do not believe CHIP funding
should be extended, what coverage (if any) do you believe CHIP
enrollees in your state would be able to obtain? How many children
covered by CHIP do you estimate would become uninsured in the absence
of CHIP?
Yes, a 5 year extension to CHIP funding should be considered for
budgeting and planning purposes. In the absence of CHIP, the only
other options would be
employer-sponsored coverage or coverage through the Exchange.
Either option would have a less rich benefit package and higher
cost sharing. It can be assumed that most of the non-premium paying
children may become uninsured if CHIP is not extended.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe the
annual allotments your state has received starting in 2009 have been
sufficient and the formula is working appropriately? Do you believe
there is a need for Congress to further address the issue of unspent
allotments?
The annual allotment for Kansas has been sufficient. Additionally,
the State of Kansas has not lapsed on any CHIP funding allotments.
6. Over the past number of years, states have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component to that effort. Do you believe there arefederal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of
uninsured, and improve health outcomes for children in your state?
Give States more flexibility in program design allowing the States to
design program models specific to their population mix and budget
constraints.
Relax Waiver red tape and encourage agility and flexibility in
program development.
Enact federal policy addressing beneficiary overpayments that include
the ability to establish penalty periods for individuals who
haven't accurately reported information.
Allow options for repayment of overpayment, including the ability for
states to utilize federal debt set-off for repayment of medical
assistance claims attributed to beneficiary overpayments.
I appreciate the opportunity to answer your questions and provide
these recommendations on improving CHIP. If you need additional
information or have further questions, please contact me.
Sincerely,
Susan Mosier, MD, MBA, FACS
Division Director and Medicaid Director
Division of Health Care Finance
Kansas Department of Health and Environment
______
Commonwealth of Kentucky
Office of the Governor
Steven L. Beshear
Governor
700 Capitol Avenue
Suite 100
Frankfort, KY 40601
(502) 564-2611
Fax: (502) 564-2517
October 20, 2014
The Honorable Fred Upton The Honorable Henry A. Waxman
Chairman Ranking Member
Committee on Energy and Commerce Committee on Energy and Commerce
2183 Rayburn House Office Building 2204 Rayburn House Office Building
Washington, D.C. 20515 Washington, D.C. 20515
The Honorable Ron Wyden The Honorable Orrin G. Hatch
Chairman Ranking Member
Committee on Finance Committee on Finance
United States Senate United States Senate
219 Dirksen Senate Office Building 219 Dirksen Senate Office Building
Washington, D.C. 20510 Washington, D.C. 20510
Dear Chairman Upton, Chairman Wyden, Ranking Member Waxman, and Ranking
Member Hatch:
I am writing in response to your letter of July 29, 2014, seeking
state input on the Children's Health Insurance Program (CHIP).
I am incredibly proud of the work we have done to provide access to
affordable health insurance through kynect, the state's health
insurance exchange, and the national attention we have received for so
dramatically reducing our uninsured rate. However, before we began
these efforts through kynect, I worked to greatly lower our rate of
uninsured children. I strongly believe that it is shameful and
shortsighted to deny children with the health care they need and
deserve.
In 2008, I launched a plan through the Kentucky Children's Health
Insurance Program (KCHIP) to dramatically cut the number of children
without health coverage by removing barriers to enrollment, retaining
more children once they are enrolled and significantly increasing
education and outreach. The steps we took to get more eligible children
enrolled in KCHIP were fiscally responsible, economically smart, and an
unqualified success. Since the launch of our efforts, the number of
Medicaid-covered children has increased by 97,251, a 22 percent
increase, which includes an increase of 10,563 children in KCHIP. In
addition, we eliminated a six- month waiting period to enroll in KCHIP
that had been required for children whose private insurance was dropped
voluntarily and whose family income was between 150 percent and 200
percent of the federal poverty level. Finally, earlier this year, we
removed the five-year ban for lawfully present residents under the age
of 18 to enroll in KCHIP.
KCHIP has been essential to ensuring that quality health coverage
for Kentucky's children is affordable and accessible. As you know,
children with health coverage have improved health outcomes throughout
their childhood and are more likely to receive preventive care,
treatment when they are ill and for recurring illnesses; get sick less
frequently; have better attendance and performance at school; and have
parents with better attendance and performance at work. Quite simply,
KCHIP is a vital piece of the health care landscape for Kentucky's
children and I urge its immediate reauthorization.
Below are answers to your specific questions:
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g. income, health status, demographics)?
Currently, 21,159 children are enrolled in the Medicaid Expansion
portion of CHIP and 25,988 children are enrolled in the
separate portion program.
As a result of the new MAGI income calculation methodology,
children may be enrolled in KCHIP if household MAGI is at or
below 159% of the federal poverty level (FPL), and they may
enroll in the separate portion program at income levels up to
218% FPL. The previous thresholds were 150% and 200%
respectively.
Children receiving disability benefits are not generally enrolled
in KCHIP, but are eligible through programs for the disabled,
though there may be some children with disabilities who do not
qualify for disability payments that are enrolled in the
program. Generally, both KCHIP and the separate portion program
are comprised of children without disabilities.
The demographics of the combined group are below. These children
are 51.08% male and 48.92% female (table 1). More than 97% of
the children identify as non-Hispanic (table 2). Almost 60% do
not list a standard federal racial category at the time of
application, while 35% identify as white and 4.6% identify as
black (Table 3). The enrollment by age group is shown in table
4.
Table 1. KCHIP Enrollment by Gender
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
F.......................................................... 48.92%
M.......................................................... 51.08%
------------------------------------------------------------------------
Table 2. KCHIP Enrollment by Ethnicity
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Hispanic................................................... 2.23%
Non-Hispanic............................................... 97.73%
Not Listed................................................. 0.04%
------------------------------------------------------------------------
Table 3. KCHIP Enrollment by Race
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
E--Other Race or Ethnicity................................. 59.45%
0--White................................................... 35.10%
B--Black................................................... 4.62%
A--Asian or Pacific Islander............................... 0.50%
7--Not Provided............................................ 0.04%
I--American Indian or Alaskan Native....................... 0.18%
J--Native Hawaiian......................................... 0.11%
------------------------------------------------------------------------
Table 4. KCHIP Enrollment by Age Group
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
0-5........................................................ 20.95%
6-12....................................................... 43.54%
13-18...................................................... 35.51%
------------------------------------------------------------------------
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
As I mentioned above, Kentucky lifted the five-year waiting
period for lawfully residing immigrant children. We have also
added a substance use treatment benefit as a Medicaid covered
service and amended cost-sharing requirements for children.
Kentucky utilizes the existing Medicaid infrastructure to
administer KCHIP; therefore, implementation of PPACA had a
minimal impact on KCHIP, outside of the small impact of the
MAGI calculation methodology on income thresholds.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
Kynect adopted the KCHIP vision and dental benefit package, which
makes the two benefit packages more comparable. However, cost
sharing in KCHIP is limited. Kentucky does not have a monthly
premium or enrollment fee for KCHIP, while the monthly
premiums, co-payments, deductibles, and cost-sharing in kynect
are higher for families with children, depending on the income
of the family.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
CHIP funding must be extended until all Kentucky families' income
no longer necessitates the need for this assistance. It is
short-sighted to deny children health care coverage--sick
children cannot be successful students; sick children cannot
thrive in our workforce; and sick children will not lead the
happy, productive lives that they deserve. I cannot urge
strongly enough for you to continue funding for CHIP.
If a decision is made NOT to fund CHIP after FY2015, as many as
50,000 Kentucky children will lose health care coverage.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
The restructuring and retargeting of allotments in 2009 have been
adequate and sufficient for Kentucky; so far, Kentucky fully
expends its annual CHIP allocation. Congress could easily
address the issue of unspent allotments by reducing a state's
next scheduled allotment by the unspent amount. The state would
retain the unspent allotment from the previous period along
with the modified new allocation, which would ensure the state
retains the allotment necessary to maintain its CHIP program
for the new period.
6. Over the past number of years, states have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of the uninsured, and improve health outcomes for
children in your state?
KCHIP and PPACA have been instrumental in reducing the number of
uninsured in Kentucky. As mentioned in the answer to question
4, CHIP serves as a vital transition point for children who may
eventually move to a qualified health plan through kynect.
Therefore, Kentucky recommends that the federal government fix
the ``family glitch'' that exists in PPACA today. Since the
affordability test for individuals who have access to other
insurance is based on the cost of a single plan and not the
cost of a family plan, the only options currently available to
families who cannot afford the cost of a family plan through
their employer are either enrolling in CHIP or not insuring
their entire family. This unfortunate glitch must be addressed.
I greatly appreciate the opportunity to provide my perspective on
this critical program. Continued funding of this program is the right
thing to do and Congress should view it as a moral obligation.
Sincerely,
Steven L. Beshear
______
State of Maryland
Department of Health and Mental Hygiene
201 W. Preston Street Baltimore, Maryland 21201
Martin O'Malley, Governor--Anthony G. Brown, Lt. Governor--Joshua M.
Sharfstein, M.D., Secretary
September 4, 2014
The Honorable Ron Wyden The Honorable Fred Upton
Chairman Chairman
Senate Finance Committee House Energy and Commerce Committee
219 Dirksen Senate Office Bldg. 2125 Rayburn House Office Bldg.
Washington, DC 20510 Washington, DC 20515
The Honorable Orrin G. Hatch The Honorable Henry A. Waxman
Ranking Member Ranking Member
Senate Finance Committee House Energy and Commerce Committee
219 Dirksen Senate Office Bldg. 2322A Rayburn House Office Bldg.
Washington, DC 20510 Washington, DC 20515
Dear Chairman Wyden, Senator Hatch, Chairman Upton and Congressman
Waxman:
Thank you for your letter to Governor O'Malley regarding funding for
the Children's Health Insurance Program (CHIP) and to inquire about
program data and policy changes as the program moves forward. The
Governor received your letter and asked me to respond on his behalf.
Maryland operates a Medicaid expansion CHIP program called the Maryland
Children's Health Program (MCHP). MCHP provides full health benefits
for children up to age 19 who have household incomes below 300 percent
of the federal poverty level (FPL) ($71,550 for a family of four);
families between 200 percent and 300 percent FPL are required to pay a
monthly premium. Benefits are obtained through the managed care
organizations that participate in HealthChoice, Maryland's Medicaid
managed care program. Benefits include, but are not limited to: doctor
visits (well and sick care); hospitalization; lab work and tests;
dental care; vision exams and corrective lenses; hearing exams and
hearing aids; immunizations; prescription drugs; transportation to
medical appointments; mental health services; inpatient and outpatient
behavioral health services; physical and occupational therapy; services
for speech, hearing and language disorders; and durable medical
equipment.
Congress has not authorized funds for the CHIP program beyond Federal
Fiscal Year (FFY) 2015. We strongly urge Congress to reauthorize the
program and to make changes to the allotment formula to account for the
enhanced FMAP slated to begin October 1, 2015. The Patient Protection
and Affordable Care Act (PPACA) includes a provision for a 23
percentage point increase in Maryland's CHIP Federal Medical Assistance
Percentage (FMAP) match rate effective October 1, 2015 (FFY 2016),
which will enhance Maryland's FMAP from 65 percent to 88 percent. As a
result, any funds carried over from the FFY 2015 authorization will be
exhausted more quickly than in previous fiscal years. Without
additional CHIP funding, once FFY 2015 funds are depleted, MCHP
expenses will be subject to the regular Medicaid FMAP of 50 percent.
With enrollment in MCHP and MCHP Premium likely to continue to increase
due to PPACCA, this State fiscal impact has the potential to be even
more significant.
Below are answers to the specific questions you posed in your
letter:
l. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g., income, health status, demographics)?
As of July 2014, 97,158 children are enrolled in MCHP. A total of
18,262 children in MCHP are enrolled in MCHP Premium.
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
PPACA has had a modest impact on the way Maryland administers MCHP.
MCHP eligibility determinations are now based on the applicant's
modified adjusted gross income (MAGI), rather than the income disregard
and asset rules used in the past. Maryland has not seen a decrease in
enrollment due to this new eligibility determination method. PPACA has
also opened up new avenues for Maryland families to apply for MCHP.
Families can now apply for coverage by completing an application using
Maryland's Marketplace, the Maryland Health Connection, by contacting
the Maryland Health Connection Consumer Support Center, or by visiting
a Connector Entity. Individuals also continue to be able to apply at
Local Health Departments, Local Departments of Social Services, online
using the Maryland SAIL application, and by mail.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and/or
benefits and/or cost-sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer-sponsored
health plans in your state.
Individuals enrolled in MCHP are exempt from cost-sharing requirements
for all services and prescription costs. MCHP recipients also receive
the Early and Periodic Screening, Diagnostic and Treatment (EPSDT)
benefit, which provides comprehensive and preventive health care
services for children enrolled in the program. EPSDT is key to ensuring
that children and adolescents receive appropriate preventive, dental,
mental health and developmental, and specialty services.
4. Do you recommend that CHIP funding be extended? lf so, for how
long, And for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
Maryland strongly recommends that CHIP funding be extended. The State
anticipates additional funding will be required in FFY 2016. However,
for budgeting and planning purposes, an extension would ideally be
granted prior to the commencement of the State Fiscal Year 2016 on July
1, 2015.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
Through FFY 2013, Maryland has been sufficiently funded for its CHIP
expenditures, through a combination of ``rollover'' unused allotment
from its prior Federal Fiscal Years(s) and the fresh allotments for
each of its ``current'' Federal Fiscal Year(s). From most recent FFY
2014 actuals and projections, we expect to have ample allotment funding
through FFY 2014, and we are reasonably comfortable with FFY 2015
projections.
However, we are keeping a close watch on recent increased expenditure
trends due to CHIP enrollment growth (at least in part due to the
impact of PPACA), and increased participation in CHIP administrative
match due to additional claims from Maryland agencies that perform
CHIP-related eligibility and other administrative functions: the
Maryland Department of Human Resources (DHR), the Maryland Health
Benefit Exchange (MHBE), and the University of Maryland School of
Pharmacy Poison Control Center. This, in conjunction with the provision
for a 23 percentage point increase in Maryland's CHIP FMAP match rate
effective October 1, 2015 (FFY 2016), leaves us with a concern for how
expanded allotment needs will be addressed in FFY 2016 and beyond.
Maryland anticipates that the higher CHIP FMAP will result in available
federal funding being depleted more quickly than in previous FFYs.
6. Over the years, states have worked to reduce the number of
uninsured children, and Medicaid and CHIP have been a critical
component of that effort. Do you believe there are federal
policies that could help states do an even better job in
enrolling eligible children? What other policy changes, if any,
would help improve enrollment of eligible children, reduce the
number of the uninsured, and improve health outcomes for
children in your state!
In FFY 2009 under the Children's Health Insurance Program
Reauthorization Act of 2009 (CHIPRA), Congress appropriated funding
for annual CHIP performance bonuses for states that were able to
(1) increase child enrollment in Medicaid (not CHIP) by a certain
amount and (2) implement at least five out of eight specific
outreach and retention strategies that make it less difficult to
enroll and retain eligible children in Medicaid and CHIP. Maryland
was able to meet these requirements and to date, has received
nearly $86.5 million in bonus payments. This federal payment is
needed to help states maintain the increased enrollment levels that
were achieved by meeting the standards that Congress established.
Congress should continue to make these bonus payments available to
states as part of any CHIP funding renewal legislation.
Under CHIPRA, states are authorized to use eligibility information
from other programs to streamline and simplify enrollment and
renewals in Medicaid and CHIP. This process is known as Express
Lane Eligibility. Express Lane Eligibility permits states to rely
on findings, for things like income and household size, from
certain designated programs. This enables states to avoid
duplicative enrollment efforts and lowers administrative costs as a
result. Congress should renew the Express Lane Eligibility
provision.
In FFY 2016, the FMAP for CHIP will increase by 23 percentage
points, so that Maryland's FMAP will increase from 65 percent to 88
percent. The practical effect of this increase is that Maryland
will exhaust its federal allotment for MCHP more quickly. Congress
should maintain the enhanced FMAP increase and adjust the allotment
formula accordingly so that state CHIP programs have a stable,
predictable funding source.
Under current law, children enrolled in Medicaid-expansion CHIP
programs (like Maryland's) are enrolled in Medicaid but funded by
CHIP. The PPACA includes a maintenance of effort (MOE) requirement
that states maintain their Medicaid and CHIP eligibility levels for
children until September 30, 2019. When a state's CHIP funding is
exhausted, these children will continue to be enrolled in Medicaid
but will be funded at the state's regular Medicaid match rate
instead of CHIP's enhanced FMAP levels, which will require
significantly higher levels of state funding.
Thank you again for your inquiry. We look forward to working with our
partners at the federal level to maintain this valuable resource for
care that so many of Maryland's children have come to rely on. If you
have questions or need more information on Maryland's CHIP program,
please do not hesitate to contact Tricia Roddy, Director of Planning,
Office of Health Care Financing.
Sincerely,
Joshua M. Sharfstein, M.D.
Secretary
cc: The Honorable Martin O'Malley
Tricia Roddy
Toll Free 1-877-4MD-DHMH--TTY/Maryland Relay Service 1-800-735-2258
Web Site: www.dhmh.maryland.gov
______
OFFICE OF THE GOVERNOR
Commonwealth of Massachusetts
State House Boston, MA 02133
(617) 725-4000
DEVAL L. PATRICK
GOVERNOR
October 30, 2014
The Honorable Ron Wyden
Chairman, Senate Finance Committee
The Honorable Orrin G. Hatch
Ranking Member, Senate Finance Committee
The Honorable Fred Upton
Chairman, House Energy and Commerce Committee
The Honorable Henry A. Waxman
Ranking Member, House Energy and Commerce Committee
Dear Senator Wyden, Senator Hatch, Representative Upton and
Representative Waxman:
I am pleased to provide response to your letter of July 29, 2014,
regarding the operation of the Children's Health Insurance Program
(CHIP) in Massachusetts.
Massachusetts has achieved near-universal coverage thanks in part
to programs such as CHIP. Providing coverage reflects our values as a
Commonwealth and helps keep families strong and children healthy.
Massachusetts is a strong supporter of CHIP and below you will find
responses to the specific questions in your July 29, 2014 letter.
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g. income, health status, demographics)?
As of June 2014, there were 117,000 children enrolled in our CHIP
program, including over 1,200 children with disabilities. Just
over 95,000 have family income that is less than or equal to
200% of the Federal Poverty level. Of the children for whom we
have race information, less than 1% are American
Indian/Alaska Native, 2% are interracial, 9% are Asian/Pacific
Islander, 14% are Black/Non-Hispanic, 25% are Hispanic and 50%
are White.
2. What changes has your state made to its CHIP program as a result
of the
Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Massachusetts has updated our CHIP policies to align with PPACA,
including the use of Modified Adjusted Gross Income to
determine eligibility and altered the residency and
citizenship/non-citizen rules related to eligibility. We also
updated the rules for children with unpaid premiums to allow
the children to re-enroll in CHIP after a 90 day waiting
period, even if the premiums remain unpaid.
The Commonwealth has also extended the hospital presumptive
eligibility available under PPACA to individuals eligible under
the CHIP unborn child option.
While this was not required under PPACA, Massachusetts eliminated
the six month waiting period that was in place for CHIP
children with income 200% to 300% FPL who were ineligible due
to having dropped group health insurance coverage.
Along with the other coverage and eligibility changes made under
PPACA, Massachusetts replaced Healthy Start, our CHIP unborn
child option program, which provided only pregnancy related
services to pregnant women who were ineligible for the Medicaid
(MassHealth) Standard program. These women are now provided
with full MassHealth Standard benefits under CHIP.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services or
benefits and/or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
plans in your state.
Massachusetts charges premiums to CHIP children on a sliding
scale (ranging from $12 to $28 per child per month) and caps
family premiums at $84 per month, with the result that CHIP
premiums are much lower than those charged by private plans.
CHIP children are also exempted from paying premiums if they
have a parent enrolled in a Qualified Health Plan and receiving
tax credits. There is no cost sharing for any services for CHIP
children with direct coverage where private plans typically
have deductibles and charge copays for most services.
Also, our CHIP plan allows us to provide premium assistance to
enable families to enroll their children in available employer-
sponsored insurance that they would not otherwise be able to
afford. This is not an option available to families in the
exchange. Further, combined premiums and cost-sharing in our
CHIP premium assistance program cannot exceed 5% of family
income making this CHIP program too, like CHIP direct coverage,
far more affordable than coverage through an exchange or
unsubsidized employer coverage.
In addition, there are some benefits available to children in our
CHIP program that are generally not available through private
plans, including those offered through the exchange or employer
sponsored plans. The scope of benefits in our CHIP program was
designed specifically to meet the needs of children. These
benefits include eyeglasses, hearing instrument specialist
services, diversionary behavioral health services, early
intervention services, special education evaluation services,
and child-specific screening and diagnostic services. Some of
these services are of course available in private plans, but
many may not be, particularly in the employer plans that are
not subject to our state insurance laws. Our CHIP program also
provides full dental benefits for children and while these
benefits may be purchased through the exchange as separate
plans, a family purchasing dental benefits and medical benefits
receives no higher tax credit than a family purchasing only
medical benefits. Since dental coverage is not required to meet
the individual mandate, it is likely some parents may forgo
dental coverage for their children due to costs.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe that CHIP funding should be extended, what coverage (if
any) do you believe CHIP enrollees in your state would be able
to obtain? How many children covered by CHIP do you estimate
would become uninsured in the absence of CHIP?
Massachusetts strongly supports the indefinite extension of CHIP
funding as it is an integral part of ensuring that low income
children have affordable, comprehensive insurance and provides
federal financial support to states to help fund that coverage.
While children in the Medicaid expansion portion of our CHIP
program would be covered through Medicaid if CHIP funding is
not extended, the state would no longer receive CHIP enhanced
federal funding for their coverage.
Given the differences in cost sharing between our CHIP program
and private insurance plans, it is clear that children
currently enrolled in our separate CHIP program would be
negatively affected if CHIP funding is not extended. If their
families are unable to afford the premiums and copays under
private insurance, they may become uninsured. As noted above,
they may also need benefits that are not generally provided by
private insurance.
In addition, many of these families may be impacted by the
eligibility standards under the ACA for individuals who have an
offer of private insurance through their employer. These
standards only take into account the cost to purchase
individual coverage through an employer, rather than the cost
to purchase family coverage.
It is difficult to estimate the number of children who would
become uninsured if CHIP funding is not extended but, given
that over 27,000 of the children currently enrolled in our CHIP
program have family income above Medicaid levels, but at or
below 200% FPL, it is likely that a significant portion of that
population would become uninsured if CHIP funding is not
extended.
In addition, as you know, the ACA established Maintenance of
Eligibility (MOE) requirements that prohibit states, until
2019, from imposing more restrictive eligibility and enrollment
standards for children in Medicaid and CHIP. These mandates
were effective as of March 23, 2010. We believe that this
demonstrates strong legislative intent to continue CHIP program
funding until at least 2019.
5. In spite of the restructuring and reallocation of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received since
2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
The annual CHIP allotments that we have received since 2009 have
been sufficient.
6. Over the past number of years, states have worked to reduce the
number of uninsured children and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
of enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of uninsured, and improve health outcomes for
children in your state?
Massachusetts has taken advantage of the Express Lane option in
the 2009 CHIP Reauthorization bill and now uses Supplemental
Nutrition Assistance Program (SNAP) information to
automatically renew children with income up to 150% FPL. We
recommend that any CHIP funding extension include additional
administrative simplification policies to help increase the
number of eligible children in coverage.
Massachusetts also recommends that the Performance Bonus program
included in the 2009 Reauthorization bill also be included in
any funding extension. However, we recommend that the program
be modified to allow bonuses to go to states with smaller
percentages of growth but have the highest level of coverage
for children as compared to when the 2009 baseline enrollments
were calculated. The current program penalizes states: such as
Massachusetts, that have traditionally had high levels of
coverage and therefore cannot achieve the significant
percentage gains in coverage necessary to qualify for a bonus.
The quality provisions included in the 2009 CHIP Reauthorization,
including the establishment of a core set of children's health
care quality measures and the CHIPRA Quality Demonstration
grants have done much to advance the quality of care provided
to children and we hope that any extension of CHIP funding
would include a similar emphasis on quality of care. The
quality funding in CHIPRA continues to improve the value of
CHIP funded coverage and services. The investment has already
advanced work on better quality measurement in pediatrics,
spread of best practices in Patient Centered Medical Home
service delivery, and the creation of a multi-stakeholder
coalition to set improvement priorities and collaborative
approaches to improvement in pediatric health care.
Finally, Massachusetts has found federal funding to support
outreach to be extremely helpful as we try to find and enroll
the remaining 1-2% of uninsured children in the state and hope
that such funding will continue to be available in the future.
Thank you for your interest in the Commonwealth's CHIP program and
for the opportunity for us to share our strong support for
reauthorization of the CHIP program and for changes to improve and
strengthen this valuable program. Please do not hesitate to contact me
for any further information.
Sincerely,
Deval. L. Patrick
Governor
______
State of Michigan
DEPARTMENT OF COMMUNITY HEALTH
Lansing
Rick Snyder
Nick Lyon
governor
director
November 25, 2014
Mr. Fred Upton, Chairman Mr. Ron Wyden, Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
Mr. Henry A. Waxman, Ranking Member Mr. Orrin G. Hatch, Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
Dear Representatives Upton and Waxman and Senators Wyden and Hatch:
This is in response to your letter of July 29, 2014, requesting
information from Michigan regarding the Children's Health Insurance
Program (CHIP) and its possible extension. After a brief introduction,
this letter will respond to the specific questions laid out in your
letter. You will find that our input leads to a strong recommendation
that Congress reauthorize this successful program and maintain enhanced
federal match rates that encourage this vital coverage for children.
Michigan's CHIP plan combines a standalone program named MIChild and a
smaller CHIP funded Medicaid expansion that covers children above the
traditional Medicaid income limits. With these combined strategies,
Michigan currently covers close to 45,000 children and has provided
services to well over 300,000 children since the inception of the
program in 1998. Families with children on MIChild are required to
contribute a premium of $10 per month, a meaningful but very affordable
form of participation in supporting the cost of care.
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics)?
Michigan's CHIP program currently has about 45,000 children enrolled,
36,000 in the standalone MIChild program and 9,000 in a Medicaid
expansion. This expansion provides coverage to 16 to 18 year olds with
incomes between 110 and 160% for the federal poverty level. Monthly
enrollment has seen a modest increase since the implementation of
PPACA. Please see the attached chart for a detailed breakout of the
MIChild demographics for three recent months.
2. What changes has your state made to its CHIP program as a result
of the Patient Protections and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Michigan's program has not changed in design since the implementation
of PPACA. The flexibilities afforded by CHIP prior to the enactment of
the PPACA enabled Michigan to use the program's policy and
administrative processes as a template in adapting to PPACA. For
instance, Michigan was able to focus on coordination between programs
by utilizing our existing CHIP online application as a model for a
single application for all Medicaid and CHIP programs allowing us to
better coordinate results and referrals among the various programs.
3. To what extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state under
CHIP that are not comparably available through your state's
exchange or through the majority of employer sponsored health plans
in your state.
Michigan's MIChild is a standalone program based on employer coverage.
By definition, it is comparable to large employer and Qualified Health
Plan coverage on the Exchange. One key difference with the Exchange is
that MIChild assures dental coverage while it has to be separately
purchased on the Exchange, an option that may not be consistently
exercised by families.
There also are important and substantial differences between MIChild
and QHP cost sharing. Given the deductibles and copays that are built
into the QHP cost sharing structure, we are very concerned about the
impact on families of children with health conditions, especially those
with special health care needs. Per a recently published Wakely
Consulting Group analysis, cost sharing obligations for families can
accumulate to more than $1,000 per year and be a barrier to seeking
services that are needed.
The most dramatic problem will be for children in families where the
employed adult has access to affordable health insurance through their
employer but where the policy is not affordable for the family and,
hence, the children. This ``family glitch'' clearly creates a barrier
for the affected cohort of children because of the great disparity in
the cost of covering children in those families and the inability to
access subsidies through the Marketplace.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe CHIP
funding should be extended, what coverage (if any) do you believe
CHIP enrollees in your state would be able to obtain? How many
children covered by CHIP do you estimate would become uninsured in
the absence of CHIP?
The CHIP program provides an affordable health care option for families
and facilitates children's access to benefits designed with their
specific needs in mind. Current information identifies factors that
could significantly erode health coverage of children in various ways
if CHIP is not extended. Therefore, we strongly recommend that Congress
reauthorize CHIP. We believe that CHIP coverage has helped provide
valuable coverage and contributed to the health of Michigan's children.
In terms of timeframe, we would prefer action in the next month or two
as we are now in the process of formulating our fiscal year 2016
budget. The budget impact of CHIP ending, or making changes in the
state's matching rate, would shift significant costs back to Michigan.
If CHIP ended other existing programs would need to provide services to
a range of vulnerable children.
We recommend a reauthorization of at least five years so that
consistent coverage can be provided to our children. CHIP could be
changed if there are other Congressional actions that would assure
coverage of children beyond the provisions of PPACA. If that were to
occur, changes to CHIP could be made concurrently as part of a larger
legislative package.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting in 2009 have
been sufficient and the formula is working appropriately? Do you
believe there is a need for Congress to further address the issue
of unspent allotments?
The formula seems reasonable but should be able to respond more rapidly
as conditions change in a state. Michigan currently is working with CMS
to obtain needed allotment adjustments due to such changing conditions.
We are anticipating a positive resolution.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of the
uninsured, and improve health outcomes for children in your state?
With CHIP and Medicaid, Michigan has built a system that has produced
one of the lowest rates of uninsured children in the nation, about 5%
for most of the recent years. We believe that the flexibilities
afforded by CHIP have contributed to our success. While we have no
specific recommendations for additional flexibility at this time, we
are open to suggestions that contribute to improved health outcomes for
children. We stand ready to help if you or your offices need any
assistance or input on suggestions around this or other health
programs.
Thank you for this opportunity to provide input on this important
issue.
Sincerely,
Nick Lyon, Director
Michigan Department of Community Health
CAPITOL VIEW BUILDING 201 TOWNSEND STREET LANSING, MI 48913
www.michigan.gov 517-373-3740
Chart: Michigan's CHIP Demographics
----------------------------------------------------------------------------------------------------------------
May-14 June-14 July-14
-----------------------------------------------------------------------
Percent Percent Percent
Count Enrolled Count Enrolled Count Enrolled
----------------------------------------------------------------------------------------------------------------
Gender:
Female.................................. 15,478 48.5% 16,559 48.6% 17,548 48.6%
Male.................................... 16,426 51.5% 17,478 51.4% 18,547 51.4%
-----------------------------------------------------------------------
Gender Total........................ 31,904 100% 34,037 100% 36,095 100%
================================================================================================================
Age (See note below):
Under age 1............................. 163 0.5% 81 0.2% 58 0.2%
Age 1 through 4......................... 6,455 20.2% 6,979 20.5% 7,708 21.4%
Age 5 through 14........................ 18,246 57.2% 19,453 57.2% 20,438 56.6%
Age 15 through 18....................... 7,040 22.1% 7,524 22.1% 7,891 21.9%
-----------------------------------------------------------------------
Age Total........................... 31,904 100% 34,037 100% 36,095 100%
================================================================================================================
Race:
American Indian or Alaskan.............. 300 0.9% 299 0.9% 299 0.8%
Asian Indian............................ 49 0.2% 72 0.2% 101 0.3%
Black or African American............... 3,170 9.9% 3,522 10.3% 3,719 10.3%
Chinese................................. 11 0.0% 15 0.0% 18 0.0%
Filipino................................ 5 0.0% 6 0.0% 6 0.0%
Guamanian or Chamorro................... 0 0.0% 1 0.0% 1 0.0%
Hispanic................................ 1,125 3.5% 1,073 3.2% 1,053 2.9%
Japanese................................ 1 0.0% 2 0.0% 2 0.0%
Korean.................................. 6 0.0% 7 0.0% 7 0.0%
Native Hawaiian......................... 7 0.0% 10 0.0% 12 0.0%
Other Race or Multiracial............... 1,972 6.2% 1,833 5.4% 1,682 4.7%
Pacific Islander........................ 7 0.0% 15 0.0% 16 0.0%
Samoan.................................. 2 0.0% 1 0.0% 2 0.0%
Unknown................................. 2,482 7.8% 2,703 7.9% 2,943 8.2%
Unspecified............................. 70 0.2% 71 0.2% 87 0.2%
Vietnamese.............................. 3 0.0% 5 0.0% 6 0.0%
White/Caucasian......................... 22,694 71.1% 24,402 71.7% 26,141 72.4%
-----------------------------------------------------------------------
Race Total.......................... 31,904 100% 34,037 100% 36,095 100%
================================================================================================================
Ethnicity:
Chicano................................. 5 0.0% 5 0.0% 7 0.0%
Cuban................................... 5 0.0% 10 0.0% 17 0.0%
Hispanic................................ 322 1.0% 541 1.6% 811 2.2%
Mexican................................. 53 0.2% 65 0.2% 107 0.3%
Mexican American........................ 19 0.1% 26 0.1% 34 0.1%
Non-Hispanic............................ 5,676 17.8% 9,017 26.5% 11,936 33.1%
Other................................... 158 0.5% 193 0.6% 280 0.8%
Puerto Rican............................ 6 0.0% 9 0.0% 12 0.0%
Unknown Ethnicity....................... 25,660 80.4% 24,171 71.0% 22,891 63.4%
----------------------------------------------------------------------------------------------------------------
Ethnicity Total..................... 31,899 100% 34,037 100% 36,095 100%
----------------------------------------------------------------------------------------------------------------
Note: The income guideline for children under age 1 is 195 to 212% of the Federal Poverty Level (FPL). The
income guideline for other children is 160 to 212% of the FPL.
______
STATE OF MINNESOTA
Office of Governor Mark Dayton
116 Veterans Service Building 20 West 12th Street Saint Paul, MN
55155
October 8, 2014
The Honorable Fred Upton
Chairman
House Committee on Energy and Commerce
Room 2183 Rayburn House Office Building
United States House of Representatives
Washington, DC 20515
The Honorable Ron Wyden
Chairman
Senate Finance Committee
Room 221 Dirksern Senate Office Building
United States Senate
Washington, DC 20510
The Honorable Henry A. Waxman
Ranking Member
House Committee on Energy and Commerce
Room 2204 Rayburn House Office Building
United States House of Representatives
Washington, DC 20515
The Honorable Orrin G. Hatch
Ranking Member
Senate Finance Committee
Room 104 Hart Senate Office Building
United States Senate
Washington, DC 20510
Dear Senators and Congressmen:
Thank you for seeking input from governors regarding whether and
how the Children's Health Insurance Program (CHIP) should be extended
and whether any additional policy changes are needed.
Minnesota's circumstances differ from most states in the use of
CHIP funding. To explain those differences, we offer this brief summary
of the CHIP Program as it affected Minnesota. When CHIP was enacted in
1997, Minnesota had one of the lowest rates of uninsured children in
the nation. In 1995, Minnesota expanded Medicaid coverage for children
under age 21 with family income up to 275% of the federal poverty level
through a federal waiver. The laws governing CHIP prevented Minnesota
from using CHIP funds for children who were already covered under
Medicaid at this high level. Because federal law prevents us from using
the CHIP matching funds on behalf of children already covered,
Minnesota covers relatively few people under the CHIP program.
Minnesota covers two groups with CHIP funds--a small group of
infants under age two; and unborn children of mothers who are
ineligible for Medicaid.
Over the years, Minnesota has also used other authority in the CHIP
law to support special health initiatives; to cover parents via federal
waivers and more recently, the state has used its status as an
expansion state to receive enhanced federal matching for a subset of
Medicaid children. CHIP funds have helped support coverage for children
and their families and I recommend that the program continue.
In response to your more specific questions, I offer the following:
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.,
income, health status, demographics)?
Minnesota covers the following groups with CHIP funds:
Infants up to age two in the Medical Assistance (MA) Program
with income between 275% and 283% of the federal poverty level; and
Unborn children of mothers ineligible for Medicaid who have
income up to 278% of the federal poverty level.
Minnesota serves approximately 4,100 CHIP enrollees per year. In
addition, the CHIP program provides enhanced funding for children
enrolled in Medicaid.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Minnesota has no changes other than the conversion of the income
standards to the required modified adjusted gross income standards. The
most significant impact to administration is the state-based Exchange
that supports electronic application processing of Medicaid and CHIP
eligibility.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state under
CHIP that are not comparably available through your state's
exchange or through the majority of employer-sponsored health plans
in your state.
Minnesota's CHIP benefits and services are modeled after those
offered in the Medicaid program. No premiums or cost-sharing apply to
children in either the Medicaid or CHIP programs.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe CHIP
funding should be extended, what coverage (if any) do you believe
CHIP enrollees in your state would be able to obtain? How many
children covered by CHIP do you estimate would become uninsured in
the absence of CHIP?
I recommend the extension of CHIP funding. This would help us
continue to support our investment in health care coverage and continue
to reduce the rate of uninsurance. As Governor of Minnesota, I do not
plan to recommend reducing coverage for children. Extending the CHIP
program would help avoid that result.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting in 2009 have
been sufficient and the formula is working appropriately?
Do you believe there is a need for Congress to further address the
issue of unspent allotments?
In my view, greater flexibility is needed in order for states to
spend all available CHIP funding.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of the
uninsured, and improve health outcomes for children in your state?
I recommend lifting or raising the cap on special health
initiatives and other forms of child health assistance. Currently, we
are limited to 10% of CHIP program expenditures.
In summary, the CHIP program has helped Minnesota maintain its high
levels of coverage for children and maintain its high rate of insurance
coverage among children, and l hope that support continues. Please do
not hesitate to contact me if you have further questions or need
additional information.
Sincerely,
Mark Dayton
Governor
Voice: (651) 201-3400 or (800) 657-3717 Fax: (651) 797-1850 MN
Relay (800) 627-3529
Website; http://mn.gov/governor/ An Equal
Opportunity Employer
______
STATE OF NEVADA
DEPARTMENT OF HEALTH AND HUMAN SERVICES
DIVISION OF HEALTH CARE FINANCING AND POLICY
1100 E. William Street, Suite 101
Carson City, Nevada 89701
(775) 684-3800
romaine gilliland
Director
laurie squartsoff
Administrator
Brian Sandoval
Governor
October 28, 2014
Representative Henry Waxman
Ranking Member
Committee on Energy and Commerce
U.S. House of Representatives
2125 Rayburn House Office Building
Washington, DC 20515
Representative Fred Upton
Chairman
Committee on Energy and Commerce
U.S. House of Representatives
2125 Rayburn House Office Building
Washington, DC 20515
Dear Sirs:
The Nevada Division of Health Care Financing and Policy (DHCFP), the
Nevada Medicaid and Children's Health Insurance Program administrative
entity is supportive of Congress extending CHIP and CHIP funding after
the end of Federal Fiscal Year 2015. In Nevada the CHIP is a
combination program, both a Medicaid expansion program and a separate
CHIP. In both CHIP models, Nevada provides the Medicaid benefit plan
where coverage emphasize children's unique needs. The DHCFP believes
that the Nevada CHIP does provide medical coverage and care to children
who otherwise may not get care due to the high cost of premiums,
deductibles and co-payments, that are part of commercial insurance
plans, even those with subsidies available through the Heath Care
Exchange.
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state?
In State Fiscal Year 2014 (July 2013-June 2014) Nevada's CHIP
program covered 5,647 children through the Medicaid expansion program
and a monthly average of 21,316 children through the Nevada's Separate
CHIP program. The CHIP enrollees in the Medicaid expansion program,
where the state receives the CHIP federal match percentage, have income
levels up to 165% of the Federal Poverty Level for children below age 6
and have incomes up to 138% of the Federal Poverty Level for children
age 6 through 18. Historically about 60% of the Nevada Check Up
caseload has identified themselves as Hispanic and 87% of the caseload
has resided in the urban areas of Nevada and has been served in our
managed care delivery model.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
The state consolidated the CHIP and Medicaid eligibility process
into a single state Division, the Division of Welfare and Supportive
Services. Wherever possible we aligned Medicaid and CHIP policies,
including the elimination of the six month crowd out (wait time between
loss of private insurance) period for CHIP. The application process was
consolidated and electronic applications can be entered through Nevada
Health Link, the front face of the Nevada Health Insurance Exchange and
Access Nevada the Division of Welfare and Supportive Services multi
benefit application beginning November 2015.
3. Please describe the services and or benefits and or cost sharing
currently provided in your state under CHIP that are not comparably
available through your state's exchange or through the majority of
employer sponsored health plans in your state.
Nevada implements the Medicaid benefit plan which emphasizes child
wellness services. It also includes behavioral health rehabilitative
supports, dental and vision care and long term services and supports
such as private duty nursing and attendant care.
The cost for the CHIP program is significantly less than the cost
sharing on the exchange. The only cost is a quarterly premium. There
are no co-payments, deductibles, or other charges for covered services.
Premiums are determined by family size and income. Premiums are charged
per family, not per child and are paid quarterly. The premium for a
family with income up to 150% of FPL is $25 per quarter with a total
annual cost of $100, for a family with income between 150% and 175% of
FPL the premium is $50 per quarter with a total annual cost of $200 and
for a family with income between 175% and 205% of FPL the premium is
$80 per quarter with a total annual cost of $320.
For a child receiving coverage from a plan on the Health Care
Exchange, the average premium cost at an income level of 168% of FPL
would be $326 a year for medical coverage. Dental coverage would run an
additional $18-$25 dollars a month. At this FPL the co-pays, though
subsidized, would also be an additional cost. At 205% FPL, the yearly
medical premium would be $534 per year. These premiums are per child.
Children are charged individually in a family unit up to the third
child; at that point any additional children are not charged an
additional premium.
If we utilize the exchange premium payment level of $326 a year,
an estimated dental monthly premium of $20 and look at the Nevada CHIP
population as a whole we would find that the per year per person cost
of going from CHIP to the exchange would be $480.50. This includes
premiums only and does not include co-pays. The average CHIP household
size is 2.5; therefore, the annual impact per CHIP family would be
$1,201.00 plus co-pays.
4. Do you recommend that CHIP funding be extended? If so, for how long
and for budgeting and planning purposes under what timeframe should
Congress act upon an extension? How many children do you believe
would become uninsured in the absence of CHIP?
Nevada recommends that the Children's Health Insurance Program
funding be extended. It is our belief that CHIP facilitates medical
care to children in low income families. In comparing Nevada CHIP
HEDIS, The National Committee for Quality Assurance Healthcare
Effectiveness Data and Information Set, rates to Nevada Medicaid
percentiles, the CHIP program exhibits better rates, demonstrating this
receipt of medical care. Because of this level of medical care and the
success of CHIP programs we feel the CHIP program should become a
permanent program for children, continuing to allow states to operate
CHIP as a Medicaid expansion or a standalone CHIP. If Congress is
concerned about making CHIP permanent, Nevada believes CHIP should
remain funded at least until the end of the children's Maintenance of
Eligibility period in 2019. This would give the state time to
thoughtfully plan for the needs of these children.
Nevada due to the ability to spend CHIP allotments in a future
year, currently anticipates funds will be available through June of
2016. It is projected, if CHIP funding is eliminated that in State
Fiscal Year 2017 (the first state fiscal year where lack of federal
dollars to support CHIP will affect Nevada) the loss of the increased
CHIP federal match percentage will cost Nevada up to an estimated
(based on an estimated FMAP) additional $10,000,000 to cover the cost
of our Medicaid CHIP expansion children.
For those children in Nevada's Separate CHIP, it would cost Nevada
approximately (based on an estimated FMAP) $9.8 million in SGF if we
expanded Medicaid children's eligibility and covered these children in
Medicaid. To date, this possibility has not been part of Nevada's
budget discussions.
For those children in Nevada's Separate CHIP program, if the
program was eliminated without expanding Medicaid's coverage of
children, with only the option to the families to access the more
expensive coverage through the exchange, there is a potential these
children will lose their medical coverage. Nevada has no method to
determine the number of the children who would actually lose medical
coverage, but, based on caseload projections, there are expected to be
approximately 15,000 children in the Separate CHIP program that would
be at risk.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting in 2009 have
been sufficient and the formula is working appropriately? Do you
believe there is a need for Congress to further address the issue
of unspent allotments?
The funding formula has been sufficient for Nevada. Nevada
appreciates the ability to use unspent funds in a future year. This has
allowed Nevada to address the cost swings that are present in smaller
programs when a few high cost children can affect the overall program
cost.
The availability to carryover unspent funds has also provided
Nevada with the guarantee of some funding to cover ongoing costs,
possibly needed for wind down or to transition operations when, through
Congressional processes, ongoing CHIP funding has not been assured.
Historically, states have continued to operate their CHIP programs,
enrolling new children into the health care coverage, pending decisions
on continued funding of CHIP from Congress. This remains true for the
current situation. States are still operating and enrolling children
into CHIP, pending information on the continued funding of the program.
6. Over the past number of years. States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of the
uninsured, and improve health outcomes for children in your state?
Nevada has experienced a large increase in program enrollment
(Medicaid and CHIP) including children this past year. Nevada believes
this can be greatly attributed to the insurance mandate and the
increased applications received through the Health Insurance Exchange
entry point. Balance needs to be maintained between ease of application
and policy for enrolling eligible individuals. Any changes that
simplify application and enrollment processes must also be supported by
the federally required audits of individual's eligibility. When these
audits employ stricter processes than the actual enrollment process
does, states are at risk of being cited for enrolling individuals who
are not eligible.
Nevada believes program enrollment is only part of the process.
Polices and processes need to focus on developing the health care
workforce. A limited healthcare workforce will impact health care
access and outcomes. There also needs to be federal support, systems
and the companion funding, for states to implement expanded health care
outcome data gathering and measurement that can be benchmarked across
systems and states. States greatly appreciate the opportunities the
federal government provides to receive grants or increased federal
financial participation to support these activities.
Nevada appreciates the opportunity to provide our information and
insights regarding the Children's Health Insurance Program. We believe
the program has been successful in Nevada. We believe CHIP does provide
medical coverage and care to children who otherwise may not get care
due to the higher cost of commercial insurance plans, even those with
subsidies available through the Health Care Exchange.
Thank you for your interest in the Children's Health Insurance Program.
Should you require any additional information or have any other
questions lease feel free to contact Elizabeth Aiello, Deputy
Administrator.
Respectfully,
Romaine Gilliland
Director, DHHS
Laurie Squartsoff
Administrator
Cc: Honorable Brian Sandoval, Governor, Nevada
Elizabeth Aiello, Deputy Administrator, DHCFP
______
STATE OF NEW HAMPSHIRE
office of the governor
107 North Main Street, State House--Rm 208, Concord, New Hampshire
03301
Telephone (603) 271-2121 FAX (603) 271-7640
Website: http://www.nh.gov/ Email [email protected]
TDD Access: Relay NH 1-800-735-2964
Margaret Wood Hassan
governor
October 20, 2014
Congressman Fred Upton, Chair
Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, DC 20515
Dear Congressman Upton:
Thank you for seeking New Hampshire's feedback on the CHIP Medicaid
expansion program for children. We strongly support the reauthorization
of CHIP until at least 2019 to both allow sufficient time to ensure
that health plans have the ability to serve children with special and
intensive needs and to allow Congress to make the technical corrections
necessary to the Patient Protection and Affordable Care Act to allow
families to more easily access Marketplace plans.
In addition, a change in CHIP Medicaid now would unfairly penalize
New Hampshire's children and taxpayers for the state's fiscal
responsibility. Several years ago, in a change that reduced state and
federal costs, New Hampshire moved its CHIP program into Medicaid.
Failure to reauthorize would penalize New Hampshire's efficiency by
forcing it to pay more for children's health coverage than other
states.
Below you will find New Hampshire's specific responses to the
questions posed by the Ranking Members of the House Committee on Energy
and Commerce and the Senate Finance Committee on the impact the end of
Title XXI CHIP funding could mean to low- to moderate-income families.
We have also included information about the health status of children
in our CHIP population, which we think supports recent analyses by a
number of organizations that the Qualified Health Plans (QHPs) on the
Marketplace may not meet children's needs, especially our most
vulnerable children, those with special health care needs.\1\
---------------------------------------------------------------------------
\1\ The National Alliance to Advance Adolescent Health, Georgetown
University Health Policy Institute Center for Children and Families,
Wakely Consulting Group, MACPAC and the GAO.
1. How many individuals are served by your state's CHIP Program? What
are the characteristics of CHIP enrollees in your state (e.g., income,
---------------------------------------------------------------------------
health status, demographics)?
As of June 30, 2014, New Hampshire had 11,029 children in its CHIP
population; about 44 percent were adolescents (12-18 years old). NH has
a CHIP Medicaid Expansion (meaning that the CHIP population is enrolled
via the Medicaid program as opposed to a stand-alone program outside of
Medicaid) to serve these children in the 185-300 percent FPL income
group. Approximately three-quarters of these children are in the 185-
250 percent FPL income group. Previous analyses of children's health
insurance in New Hampshire showed that about half the CHIP program
population dis-enrolls each year compared to about one-quarter each of
the Medicaid and commercial populations.
These previous analyses of children's health insurance in New
Hampshire also included health status classification using a relative
clinical risk score (3M's Clinical Risk Grouping software), which
showed that among those continuously enrolled (for a year) Medicaid
children had the highest score (0.591) with the CHIP population
somewhat lower (0.549) but still 10 percent higher than commercially
insured children (0.494). Despite similar demographics to the
commercially insured children, this group had a higher prevalence rate
of mental health disorders (22.7 percent versus 14.2 percent) and about
twice the prevalence rate of asthma. The last study, released in 2013,
found a shift toward a greater level of chronic disease in CHIP
children.\2\
---------------------------------------------------------------------------
\2\ Onpoint Health Data for NH DHHS. Children's Health Insurance
Programs in New Hampshire. June 2013.
This trend is of concern and supports the need for access to a
health benefit plan that addresses the acute and chronic health care
needs of children. Despite this shift towards greater chronic
illnesses, there are positive outcomes for New Hampshire's children
enrolled in the CHIP program. On average CHIP funding allows New
Hampshire to provide health care coverage to more than 19,000 children
during the course of a year. Over the course of a year CHIP funding in
New Hampshire assures access to 46,000 physician/clinic visits
(including 6.500 for preventive care), 20,000 dental visits, 10,000
mental health visits, 2,500 emergency department visits, and 57,000
---------------------------------------------------------------------------
prescriptions filled.
As a result of this care:
The access to and use of primary care practitioners has improved
such that New Hampshire's CHIP rates were higher than both
Medicaid and the New Hampshire Commercial rates in the 2013
study.
Well-child visit rates have increased substantially with the
children enrolled in CHIP leading the way (83.9 percent)
followed by the commercial insurance (79.3 percent) and
Medicaid (73.2 percent).
Children enrolled in the CHIP program saw a significant improvement
in the rates for the appropriate testing and treatment for
ambulatory sensitive conditions (ASC) that could be treated in
a physician's office rather than in the emergency room.
(SFY2011 (88.7 percent) vs SFY2009 (80.0 percent)).
The use of inpatient hospital services for ASC (asthma,
dehydration, bacterial pneumonia, urinary tract infections and
gastroenteritis), by children enrolled in the CHIP program (1.6
per 1,000 members) are much less than children enrolled in the
Medicaid program (3.4 per 1,000 members) and equal to those
with commercial insurance.
Without the CHIP Program, New Hampshire would not have seen such
improvements. This is why it is vital that before decisions are made to
end the CHIP program, in favor of providing a health benefit through
the Marketplace, an analysis of impact on health outcomes must be
undertaken. To not look at this question is inviting a cascade of
negative, harmful, unintended outcomes for children.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers CHIP?
New Hampshire has applied the new Modified Adjusted Gross Income or
MAGI regulations as required by the PPACA to its CHIP program. The key
differences between MAGI and the former method for calculating income
is the use of a standard 5 percent income disregard and no asset test.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state under
CHIP that are not comparably available through your state's exchange or
through the majority of employer sponsored health plans in your state.
New Hampshire is a CHIP Medicaid Expansion state; children in the
CHIP population receive the Medicaid benefit package, which is a
broader set of benefits important to children and adolescents and can
often be significant to those with special health needs. There is no
cost sharing in New Hampshire Children's Medicaid. Families would face
considerably higher out-of-pocket costs for their children's health
care in a Qualified Health Plan (QHP); for lower-income families that
might be anywhere from 2.2 to 8.3 times higher than a separate CHIP
program,\3\ more so in a CHIP Medicaid Expansion state like New
Hampshire. The impact on children with special health care needs could
be devastating--some families could go from paying nothing in CHIP to
facing more than $5,000 in annual out-of-pocket costs in QHPs.\4\ Some
of these current services in New Hampshire have limited or no coverage
in Marketplace or commercial plans, e.g., dental, audiology exams and
hearing aids, non-emergent transportation and Early Periodic Screening,
Diagnosis and Treatment services. Of particular concern to children's
well-being is dental care. Families will forego dental care if it means
purchasing a stand-alone dental plan with additional premiums and cost
sharing that doesn't count toward their medical deductibles and out-of-
pocket maximum.
---------------------------------------------------------------------------
\3\ Brooks, T., Heberlein, M., Fu, J. Dismantling CHIP in Arizona:
How Losing KidsCare Impacts a Child's Health Care Costs. Georgetown
University Health Policy Institute Center for Children and Families.
May 2014.
\4\ Wakely Consulting Group. Comparison of Benefits and Cost
Sharing in Children's Health Insurance Programs to Qualified Health
Plans. July 2014.
It is too early to tell how the Marketplace plans will serve
children in New Hampshire. Several new carriers offering multiple
health plans are poised to enter the Marketplace for 2015 after only
one carrier participated in 2014. There are no plans in New Hampshire
to require any benefits beyond the Essential Health Benefits and Early
Periodic Screening, Diagnosis and Treatment (EPSDT) services as
required for individuals that are 19 and 20 years of age who are found
eligible for the NH Health Protection Program (PPACA Medicaid
---------------------------------------------------------------------------
Expansion).
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe CHIP
funding should be extended, what coverage (if any) do you believe CHIP
enrollees in your state would be able to obtain? How many children
covered by CHIP would become uninsured in the absence of CHIP?
Yes, CHIP funding should be extended through 2019 when the PPACA
Maintenance of Effort (MOE) requirements ends. New Hampshire--as a
Medicaid Expansion state--must cover this population through 2019 due
to the federal government's MOE requirement. It would be catastrophic
if New Hampshire were obligated to continue CHIP without relief from
the MOE requirement. While Medicaid funding would not run out, NH's
contribution to covering these children would increase significantly.
Cost increases would need to be offset by other Medicaid cuts at a time
when we are developing a new system of care. New Hampshire is one of
the states that would be subject to an inequitable financial impact as
states with separate CHIP programs would end those programs when CHIP
funding expired.\5\
---------------------------------------------------------------------------
\5\ MACPAC (Medicaid and CHIP Payment Access Commission). Report to
the Congress on Medicaid and CHIP. June 2014.
Congress needs to address this issue as soon as possible. New
Hampshire is building its 2016-2017 biennium budget it will be
difficult planning for an uncertain outcome that would involve
---------------------------------------------------------------------------
significant increased costs for covering these children.
During the time period Congress extends CHIP funding, it is
imperative that analyses are done regarding the benefit packages, cost
sharing and network adequacy of Marketplace plans and their impact on
the needs of low-income children. If deemed necessary, Congress should
act to revise Marketplace plan requirements for children. In
particular, PPACA's affordability test (the ``family glitch'') that
counts only the employee's cost of Employer Sponsored Insurance (ESI)
has the potential to erase many of the gains made in reducing
uninsurance among children, if CHIP funding ends and families cannot
afford ESI but are prevented from accessing subsidies in the
exchange.\6\
---------------------------------------------------------------------------
\6\ Sara Rosenbaum discusses two basic PPACA ``design flaws'' in
her Milbank Quarterly Op-Ed piece (volume 92, Issue 3, 2014):
inadequate cost-sharing help for low income families and the family
``affordability'' problem that bars families from accessing premium
subsidies for their children.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe the
annual allotments your state has received starting in 2009 have been
sufficient and the formula is working appropriately? Do you believe
there is a need for Congress to further address the issue of unspent
---------------------------------------------------------------------------
allotments?
New Hampshire has been able to work within its annual allotment due
to a July 2012 policy change that moved the children in the separate
CHIP program to the CHIP Medicaid Expansion. The cost of the separate
program was outstripping legislative appropriations and New Hampshire
came dangerously close to capping enrollment and/or instituting a wait
list for the first time in the history of its CHIP program (with CMS
approval). Moving to a CHIP Medicaid Expansion allowed NH to stay
within its legislative appropriation, continue to cover all eligible
children, provide comprehensive benefits, and maintain its low rate of
uninsured children.
Depending on what Congress does, it may not be necessary to further
address unspent allotments if CHIP funding is temporarily extended
while the critical analytical work that is needed is done.
6. Over the past number of years, states have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that can help states do an even better job of enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of
uninsured, and improve health outcomes for children in your state?
As indicated in question #4, policy changes should focus on
technical issues with the PPACA and their effect on enrollment of
children and the resulting impact on the rate of uninsurance among
children, which could erase many of the gains this nation has made in
children's coverage. If Congress intends to end CHIP funding, it should
put in place a temporary extension and focus its policy attention on
the affordability, accessibility and appropriateness of Marketplace
plans for children during an extension period.
In summary, the CHIP funding extension to 2019 will allow time for
Congress to fix the existing Marketplace technical issues that left
unattended, and in combination with not reauthorizing CHIP funding,
will prove to be catastrophic for New Hampshire families. In addition
the extension will allow time for the critical analytical work to be
done that is required to support informed decision-making by Congress
about the future of the CHIP funding. That analytic work includes, but
is not limited to:
Assessing the impact of the existing ``family glitch,'' which
could keep half of the children on CHIP from accessing
Marketplace Plans;
Ensuring that QHPs are designed to meet children's health care
needs with attention to children with special health care
needs;
Examining cost sharing in order to arrive at a family contribution
that is fair and encourages QHP enrollment and appropriate use
of health care services;
Assessing whether stand-alone dental plans and their additional
cost sharing are appropriate; and
Designing tools to help families choose the best coverage in the
Marketplace for their children.
Thank you for this opportunity to offer New Hampshire's
perspective. We recommend and request that Congress extends funding for
CHIP through 2019 and uses the time to perform the careful analyses
MACPAC and others are calling for to make certain that the cost-sharing
and benefits in Marketplace plans are affordable and appropriate for
children. It would be premature to eliminate support for this program
without understanding the impact of such action without adequate time
for states to do the necessary planning and budget adjustments.
With every good wish,
Margaret Wood Hassan
Governor
cc: Congressman Henry Waxman
Senator Ron Wyden
Senator Orrin Hatch
Senator Jeanne Shaheen
Senator Kelly Ayotte
Congresswoman Carol Shea-Porter
Congresswoman Ann Kuster
Katie Dunn, Associate Commissioner and Medicaid Director, NH DHHS
______
STATE OF NEW MEXICO
HUMAN SERVICES DEPARTMENT
MEDICAL ASSISTANCE DIVISION PO BOX 2348--SANTA FE, NM 87504 PHONE:
(505) 827-3103
FAX: (505) 827-3185
Susana Martinez, Governor
Sidonie Squier, Secretary
Julie B. Weinberg, Director
October 30, 2014
The Honorable Ron Wyden The Honorable Orrin Hatch
Chairman Ranking Member
Senate Finance Committee Senate Finance Committee
The Honorable Fred Upton The Honorable Henry Waxman
Chairman Ranking Member
House Energy & Commerce Committee House Energy & Commerce Committee
Dear Congressmen:
Thank you for your July letter to governors seeking information and
feedback about the Children's Health Insurance Program (CHIP),
including policy recommendations for the program as Congress considers
the future of CHIP and the reauthorization of funding beyond federal
fiscal year 2015. As you rightly note, both Medicaid and CHIP are
operated as state-federal partnerships, and New Mexico appreciates the
chance to offer input about imminent policy and financial
considerations. In response, we are pleased to answer your questions in
greater detail.
CHIP Enrollment Status and Demographics
New Mexico administers CHIP as an expansion of Medicaid, rather than as
a stand-alone program. While CHIP enrollees have some additional cost-
sharing responsibilities that differ from traditional Medicaid
(discussed in greater detail below), the program itself has the same
benefit package, application process and administrative structure as
children's Medicaid; and essentially operates as two separate
categories to cover children ages 0-5 and 6-18 who do not meet the
income maximums for Medicaid.
As of October 1, 2014, New Mexico covered just over 14,000 children
under CHIP--a number that has grown significantly since last January,
when New Mexico had approximately 7,500 CHIP enrollees. For children 0-
5 years-old, income eligibility for CHIP is between 240-300 percent of
the federal poverty level (FPL); and for children ages 6-18, income
eligibility is between 190-240 percent FPL. Children in families with
income below these thresholds are eligible for Medicaid.
Approximately 12 percent of CHIP enrollees are Native American, and
about 55 percent reside in rural New Mexico counties. CHIP enrollees
are generally considered a healthy population. In New Mexico, most
children who are enrolled in CHIP receive services through a managed
care organization (MCO), with the exception of Native Americans, who
may opt-into or out of managed care.
ACA-Related Changes
The most noteworthy change that New Mexico made to its CHIP program as
a result of the Patient Protection and Affordable Care Act (ACA) was
the conversion of existing CHIP income thresholds to equivalent income
limits based on the modified adjusted gross income (MAGI) methodology.
Per Section 2101(f) of the ACA, New Mexico also created a specific sub-
category of CHIP for children who lose Medicaid coverage at renewal due
to the elimination of income disregards as a result of MAGI conversion.
And, like most other Medicaid categories, CHIP is subject to the same
streamlined application and renewal processes that are required by the
ACA.
CHIP Benefits & Cost-Sharing
Since CHIP operates as an extension of Medicaid in New Mexico, the
benefits that are available to CHIP enrollees include the full gamut of
physical, behavioral, oral health, vision and Early and Periodic
Screening, Diagnosis and Testing (EPSDT) services that are provided to
the traditional Medicaid population. There are some notable benefit
differences between CHIP and the health plans that are available via
most New Mexico employers and the Health Insurance Marketplace, since
these plans generally do not include dental services, eyeglasses,
vision refraction and psychiatric residential treatment centers
comparable to CHIP. The CHIP dental benefit package is the benefit
source for stand-alone dental plan offerings available to children on
the Marketplace.
New Mexico charges co-payments to CHIP recipients, as outlined below;
------------------------------------------------------------------------
Co-Pay Item or Service
------------------------------------------------------------------------
$2..................................... Prescription drug item
(Not applied when the co-
payment for a brand-name drug
is applied.)
$3..................................... Brand-name drug
(Applied when there is a less
expensive drug available.)
$5..................................... Outpatient visit to a physician
or other practitioner, dental
visit, therapy session or
behavioral health session
$8..................................... Non-emergent use of the
emergency room
$25.................................... Inpatient hospital admission
------------------------------------------------------------------------
These co-payments are far lower than the cost-sharing provisions of
most other commercial and Marketplace health plans. New Mexico CHIP
does not charge premiums or deductibles.
Future CHIP Funding
New Mexico receives a higher federal match rate for CHIP enrollees than
it does for Title XIX Medicaid recipients, and this additional federal
funding has allowed our state to provide health insurance to children
whose families have too much income to qualify for Medicaid, but who
may have historically struggled to afford the deductibles and premiums
associated with private or employer-sponsored coverage. With the
creation of the Health Insurance Marketplace and federally subsidized
coverage options and cost-sharing reductions, private insurance is now
more affordable than when CHIP began years ago. It is interesting to
note that CHIP enrollment has increased substantially in New Mexico
since last January, the reasons for which are unclear. While a portion
of this enrollment increase may be a ``woodwork'' effect due to the
ACA's individual mandate and the related outreach and visibility of new
coverage options, the increase may also reflect that middle income
families might be forgoing private coverage to take advantage of the
greater affordability offered by CHIP.
CHIP reauthorization presents an opportunity for Congress to inventory
and streamline the wide array of coverage and affordability options
that are now available to moderate- and middle-income families. While
New Mexico currently uses the federal Marketplace platform, our state
is moving quickly toward implementation of a state-based Marketplace
for the 2016 open enrollment period. Our experience to date has been
that transitioning populations and coordinating coverage between
Medicaid and the federally facilitated Marketplace is a clunky and
challenging process; and fewer families than originally anticipated
have been able or willing to purchase coverage through the Marketplace.
Until New Mexico has a mature state-based Marketplace that can ensure a
streamlined and seamless process for families in accessing coverage,
our state believes that CHIP--and the federal funding that goes with
it--will remain an important coverage option for New Mexico families.
No discussion about CHIP funding can be held without recognizing that
all states are currently operating under the ACA's maintenance of
effort (MOE) provision, which requires the continuation of pre-ACA
Medicaid and CHIP coverage levels for children through 2019. Federal
rules for maintaining eligibility are unclear should CHIP allotments be
discontinued, and any Congressional action on CHIP funding must make
clear that the MOE provision would not apply should federal funding for
the program be reduced or disappear altogether.
CHIP Allotments
The CHIP allotment process and methodology have worked well for New
Mexico, and we don't have any specific recommendations for change.
Should you consider a new allotment process or methodology, we urge you
to keep financial stability and predictability for states at the
forefront of your deliberations. We are committed to slowing the growth
rate of health care costs while improving the quality of care,
especially in Medicaid and CHIP. Large swings in federal financial
participation can inhibit those efforts. Given that New Mexico, like
most other states, would exhaust federal CHIP allotments during fiscal
year 2016 without funding reauthorization, we may need more flexibility
and time to adjust to this funding change.
Reaching Uninsured Children
New Mexico agrees that Medicaid and CHIP have been at the frontlines of
making headway in reaching uninsured children, and this has
historically been where our state has focused much of its attention. In
addition to New Mexico's comparatively high Medicaid and CHIP income
thresholds, the state has worked hard to facilitate the easiest and
most straightforward enrollment and eligibility processes possible--
including widespread use of presumptive eligibility for children and
pregnant women, implementation of continuous eligibility for child
categories, use of administrative renewals, and automatic deeming of
newborns as Medicaid- or CHIP-eligible when born to a Medicaid-enrolled
mother. These policies have greatly aided our state in not only
enrolling uninsured children into coverage, but in facilitating greater
retention and ongoing child health improvements. Our state encourages
Congress to be innovative and flexible in thinking about how states
might continue to develop similar strategies as it works through the
CHIP reauthorization process.
In conclusion, let me thank you again for seeking consultation from the
states on this important issue. If you have any questions or need
additional information, please don't hesitate to let me know.
Sincerely,
Julie B. Weinberg, Director
Medical Assistance Division
______
State of New york
EXECUTIVE CHAMBER
Albany 12224
Andrew M. Cuomo
Governor
September 4, 2014
The Honorable Ron Wyden The Honorable Fred Upton
Chairman Chairman
Committee on Finance Energy and Commerce Committee
U.S. Senate U.S. House of Representatives
221 Dirksen Senate Office Building 2183 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
The Honorable Orrin G. Hatch The Honorable Henry Waxman
Ranking Member Ranking Member
Committee on Finance Energy and Commerce Committee
U.S. Senate U.S. House of Representatives
104 Hart Office Building 2204 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
Dear Chairmen Wyden and Upton, and Ranking Members Hatch and Waxman:
Thank you for your recent letter requesting information regarding the
Children's Health Insurance Program (CHIP). New York State's CHIP
program, Child Health Plus, has been in existence since 1990 and
successfully provides comprehensive, affordable insurance coverage to
uninsured children throughout the state,
The CHIP program has made an enormous difference in expanding health
insurance coverage in New York. When CHIP was enacted, New York had
over 800,000 uninsured children. Today, there are about 100,000
uninsured children, nearly a 90 percent decline. We appreciate your
interest in collecting information to determine if funding should be
continued beyond Federal Fiscal Year 2015. Below are responses to the
information requested in your July 29, 2014 letter:
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g., income, health status, demographics)?
New York's Child Health Plus program currently is a combination
program, meaning children ages 6 to 18 between 100% and 133% of
the Federal Poverty Level (FPL) are funded under Title XXI of
the Social Security Act through a Medicaid expansion. The
separate portion of the program provides subsidized coverage to
children from birth through age 18 that are not eligible for
Medicaid and in families with incomes under 400% of the FPL
($95,000 for a family of four). Children in families over 400%
of the FPL that are otherwise eligible for coverage may enroll
in the program at full cost.
As of July 2014, approximately 476,000 children are covered by
CHIP: 297,180 in the separate CHIP program and approximately
179,000 through the Medicaid expansion. Attached is additional
information describing the demographic characteristics of
children enrolled through the separate program, including
enrollment by poverty level, immigration status and ethnicity.
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act (PPACA)? How
has the implementation of PPACA impacted the way your state
administers CHIP?
The biggest change in the administration of the CHIP program as a
result of the PPACA is that eligibility determinations are now
being performed by the New York State of Health (NYSOH), New
York State's health insurance marketplace. NYSOH is an
integrated eligibility system for all programs available under
the Affordable Care Act, Medicaid, Child Health Plus, and
qualified health plans with and without tax credit and cost
sharing reductions. Previously, eligibility determinations for
Child Health Plus were performed by participating health plans
and Medicaid eligibility determinations by local departments of
social services.
Another significant change under the ACA is the use of Modified
Adjusted Gross Income (MAGI). Previously, the Child Health Plus
program used gross income in determining eligibility. Moving to
MAGI resulted in changes such as no longer counting child
support or worker's compensation coverage as income. In
addition, household composition rules were changed under ACA.
The household composition is now based on the tax filing
household.
Other changes have been made as a result of the ACA to more
closely align the separate CHIP program with Medicaid
eligibility rules.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
The Child Health Plus program offers subsidized health insurance
coverage to children under 400% of the FPL. There are no co-
payments or deductibles in the program. Depending on household
income, families may be responsible for a monthly premium
contribution. Family contribution levels are as follows:
<160% of the FPL.................. Free
160 to 222% FPL................... $9 per child per month/$27 per
month family maximum
223 to 250% FPL................... $15 per child per month/$45 per
month family maximum
251 to 300% FPL................... $30 per child per month/$90 per
month family maximum
301 to 350% FPL................... $45 per child per month/$135
per month family maximum
351 to 400% FPL................... $60 per child per month/$180
per month family maximum
Over 400% FPL..................... Full premium which varies by
participating health plan
Child-only policies are available through the NYSOH at a
considerably higher cost than Child Health Plus. The child-only
policies available within NYSOH have a monthly premium that
ranges from $175 to $287 per month as well as cost sharing
provisions that range from $15 to $1,500 per service depending
on the coverage level. Deductibles for these policies range
from $0 to $3,000 depending on income. As noted above, there
are no copayments or deductibles in Child Health Plus, and for
families with incomes below 400%, FPL the maximum premium
contribution is $180 per month depending on income. In New York
State, 62% of all enrollees in Child Health Plus pay less than
$9 per month.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state will be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
New York State strongly recommends that CHIP funding be extended.
We believe funding through 2019 is the appropriate length of
time for an extension. A more informed decision regarding the
continuation of the program can be made after NYSOH has had
several years of experience.
If the decision is made to not reauthorize CHIP funding, New York
believes that states need at least twelve months of lead time
in order to plan for, notify, and efficiently transition
children to other programs. If the decision is not made with
enough lead time, there is the potential that many children
covered in the program will become uninsured. Even with
sufficient lead time, we anticipate that many children may
become uninsured if CHIP were discontinued given the large cost
differential between Child Health Plus and the child-only
policies on NYSOH.
5. In spite of restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
To date, New York State has received sufficient funding to
support its Child Health Plus program through annual allotments
and expansion allotment adjustments. With the potential for
program growth under the ACA, New York anticipates there may be
a need for increased allotments in the future.
6. Over the past number of years, States have worked to reduce the
number of uninsured children and Medicaid and CHIP have been a
critical component in that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any would help improve enrollment of eligible children, reduce
the number of uninsured and improve health outcomes for
children in your state?
New York believes that performance bonuses available under the
Children's Health Insurance Program Reauthorization Act
(CHIPRA) were an effective means of increasing enrollment under
the programs. We suggest that the provision to reinstate
performance bonuses be reauthorized.
Thank you again for your consideration in reauthorizing CHIP funding.
Should you have any further questions, please feel free to contact
Judith Arnold, New York State's CHIP director and the director of the
Division of Eligibility and Marketplace Integration.
Sincerely,
Courtney Burke
Deputy Secretary for Health
Attachment
Cc: Jason Helgerson, New York State Medicaid Director
Judith Arnold, CHIP Director, New York State
We Work For the People
Performance Integrity Pride
NYS CHILD HEALTH PLUS PROGRAM
------------------------------------------------------------------------
Household Income--Federal Poverty Level Enrollment * % of Total
------------------------------------------------------------------------
<160% FPL............................... 74,165 25%
160-222% FPL............................ 109,451 37%
223-250% FPL............................ 35,664 12%
251-300% FPL............................ 36,582 12%
301-350% FPL............................ 20,709 7%
351-400% FPL............................ 11,598 4%
>400% FPL............................... 9,011 3%
-------------------------------
Grand Total............................. 297,180 100%
Total Subsidized........................ 288,169 97%
========================================================================
CITIZENSHIP
Citizen................................. 256,757 86%
Qualified Immigrant..................... 8,335 3%
Unqualified Immigrant................... 32,088 11%
-------------------------------
Total................................... 297,180 100%
========================================================================
RESIDENCE
NYC..................................... 104,276 35%
Rest of State........................... 192,904 65%
-------------------------------
Total................................... 297,180 100%
========================================================================
ETHNICITY
Asian................................... 23,157 8%
Black................................... 19,340 7%
Hispanic................................ 46,830 16%
American Indian......................... 311 0%
Pacific Islander/Hawaiian N............. 230 0%
Unknown................................. 85,668 29%
White................................... 121,644 41%
-------------------------------
Total................................... 297,180 100%
------------------------------------------------------------------------
*July 2014 Enrollment
______
North Carolina Department of Health and Human Services
Division of Medical Assistance
www.ncdhhs.gov
Tel 919-855-4100 Fax 919-733-6608
Location: 1985 Umstead Drive Kirby Building Raleigh, NC 27603
Mailing Address: 2501 Mail Service Center Raleigh, NC 27699-2501
An Equal Opportunity/Affirmative Action Employer
Pat McCrory
Governor
Aldona Z. Wos, M.D.
Ambassador (Ret.)
Secretary DHHS
Robin Gary Cummings, M.D.
Deputy Secretary for Health Services
Director, Division of Medical Assistance
November 10, 2014
The Honorable Ron Wyden The Honorable Fred Upton
Chairman Chairman
Senate Finance Committee House Energy & Commerce Committee
221 Dirksen Senate Office Building 2183 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
The Honorable Orrin Hatch The Honorable Henry Waxman
Ranking Member Ranking Member
Senate Finance Committee House Energy & Commerce Committee
104 Hart Senate Office Building 2204 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
Dear Chairman Wyden, Ranking Member Hatch, Chairman Upton and Ranking
Member Waxman:
On behalf of Governor Pat McCrory, I am responding to your recent
letter asking for North Carolina's input on the Children's Health
Insurance Program (CHIP). We have provided detailed responses and data
that may assist in your discussions on CHIP reauthorization.
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g. income, health status, demographics)?
North Carolina has four groups of children funded under Title XXI of
the Social Security Act, the Children's Health Insurance Program
(CHIP):
FAMILY INCOME
PROGRAM AGE RANGE ELIGIBILITY
Medicaid expansion Birth-12 months 186-200% FPL
Medicaid expansion 13 months-5 years 134-200% FPL
Medicaid expansion 6-18 years 101-133% FPL
Separate CHIP Program 6-18 years 134-200% FPL
Note: Federal Poverty Limit (FPL)
Under the Medicaid expansion programs, children receive the full range
of Medicaid services paid for using Title XXI (CHIP) funds. These
children are considered enrolled in Medicaid. Title XXI funding, with
its enhanced Federal matching rate, allows North Carolina to provide
these children with a richer array of services necessary early in life
at a reduced cost to the State.
NC Health Choice program beneficiary enrollment in July 2014 exceeded
82,000. NC Health Choice beneficiaries reside in all 100 counties, but
the number of beneficiaries varies from only 57 in one coastal county
to more than 5,700 in one southwestern county. The average number of NC
Health Choice beneficiaries per county is 821. See the figures below
for the beneficiary age distribution, gender distribution, and income
distribution.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
As a part of Affordable Care Act implementation, North Carolina
modified its Health Choice Program eligibility to reflect the new
Modified Adjusted Gross Income (MAGI) requirements that expand Medicaid
for children to 133 percent FPL. As a result, approximately 72,000
children aged 6 through 18 who were previously eligible for NC Health
Choice became eligible for Medicaid coverage on January 1, 2014.
Other than the new MAGI eligibility formula for both Medicaid and CHIP
program applicants and the aforementioned shift in the income
eligibility threshold, the Affordable Care Act has not affected the way
that North Carolina administers the separate CHIP program. North
Carolina uses one joint application for Medicaid and CHIP. Local county
departments of social services workers screen applicants for Medicaid
first. If household income exceeds Medicaid limits, workers then screen
applicant s for CHIP.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
Benefits coverage for the North Carolina CHIP program is controlled by
federal Title XXI statutes, NC General Statutes, and the Centers for
Medicare and Medicaid Services (CMS)-approved State Plan. NC Health
Choice program services covered include many but not all of those
allowable under federal Title XXI law:
Inpatient hospital services; Durable medical equipment and
medical supplies;
Outpatient hospital services; Nursing services;
Physician services; Substance abuse treatment;
surgical services; Case management;
Clinic services, including Care coordination;
ambulatory health centers and local
health departments;
Pharmacy benefits; Specialized therapies;
Laboratory services; Hospice care;
Radiological services; Emergency medical
transportation; and
Mental health services; Preventive and restorative
dental services.
Detailed Division of Medical Assistance Clinical Coverage policies for
NC Health Choice program benefits are located at http://www.ncdhhs.gov/
dma/mp/index.htm.
North Carolina General Statutes mandate that the separate CHIP program
benefits be equivalent to Medicaid benefits. There are a few
exceptions, as outlined in N.C.G.S. 108A-70.21(b):
(1) No services for long-term care;
(2) No non-emergency medical transpo1tation;
(3) No federal Early and Periodic Screening, Diagnosis and
Treatment (EPSDT) requirements; and
(4) Restricted dental services.
Cost sharing for the NC Health Choice Program is also outlined in the
General Statutes and the CMS-approved State Plan. N.C.G.S. 108A-
70.21(d) and (e) outline that there is no cost-sharing for families
with incomes below 150 percent FPL, except for a $1 copay on generic
prescription drugs and a $3 copay on brand name prescription drugs.
Families with incomes above 150 percent FPL are subject to greater
cost-sharing, including a $5 copay for provider visits and outpatient
hospital visits, excluding well-baby, well-child, or immunization
visits. There is also a $1 copay for generic prescriptions, a $10 copay
for brand name prescriptions, and a $20 copay for non-emergency
emergency department visits. Overall cost-sharing per family cannot
exceed 5 percent of the family's annual income.
The table following shows a comparison of NC Health Choice cost sharing
with the North Carolina's Teachers and State Employees Health Plan
(SHP) benefit plan and a Silver Blue Cross Blue Shield (BCBS) plan on
the Federally Facilitated Marketplace (FFM). Both NC Health Choice and
the FFM BCBS plan include medical and dental coverage; the SHP includes
only medical coverage. The SHP insures nearly 700,000 State employees.
Income for a family of four living at 200 percent of the 2014 FPL is
$47,700. This family income qualifies for NC Health Choice. Higher
family income qualifies for both a health insurance premium tax credit
and cost sharing reductions on the FFM. There are three broad
qualifying criteria for the premium tax credit (See: http://
www.irs.gov/uac/Newsroom/The-Premium-Tax-Credit2):
(1) the individual must purchase health insurance coverage through
the FFM;
(2) household income cannot exceed 400 percent of the FPL; and
(3) the individual cannot be eligible for other coverage such as
Medicare, Medicaid, or employer-sponsored coverage.
Cost sharing reductions are limited to Silver plans in the Bronze,
Silver, Gold, Platinum continuum on the FFM. The SHP example in the
table represents a 70 percent coverage/30 percent coinsurance plan
option for comparison purposes because Silver plans have 70/30
coverage.
Comparison of NC CHIP, Employer-Sponsored, and FFM Health Insurance Cost
Sharing
------------------------------------------------------------------------
NC Teachers and NC Federally
State Employees Facilitated
NC Health 70/30 Health Marketplace 70/30
Choice Plan with BCBS Silver Plan with
(SHP) BCBS
------------------------------------------------------------------------
Monthly Premium (individual) $0 (individual (individual
(family) $0 employee) $0 child) $139 **
Annual for employee;
enrollment fee paid by the
of $50 per State
child or $100 (employee + 1 or
per family for more children)
applicants $205.12
living at 151%- (employee +
200% of FPL spouse + 1 or
more children)
$562.94
Annual Deductible (individual) $0 (individual) (individual
(family) $0 $933 child) $5,000
(family) $2,799 (Pharmacy) $200
Coinsurance (individual) $0 (individual) 30%
(family) $0 of eligible
expenses after
deductible
(family) 30% of
eligible
expenses after
deductible
Coinsurance (individual) 5% (individual) (individual
Maximum of household $3,793 child) $6,350 **
(excludes income, or (family) $11,379 (pharmacy) $0
deductible) $2,385 * (pharmacy)
(family) 5% of $2,500
household
income, or
$2,385 *
Preventive/ $0 for all $35 primary care $25 primary care
Wellness Visit beneficiaries $81 specialist
co-payment
Other Provider $0 for $35 primary care $25 primary care
Office Visit Co- beneficiaries or mental $50 specialist
payment living at 134%- health
150% of FPL $81 specialist
$5 for
beneficiaries
living at 151%-
200% of FPL
Inpatient Hospital $0 for all $291 co-pay, 30% after
Co-payment beneficiaries then 30% after deductible
deductible for
hospital
services
30% after
deductible for
provider
services in the
hospital
Prescription Drug $1 generic Range of $12- After deductible:
Co-payment for all $125 tiered co- $10 generic
beneficiaries pays depending $50 preferred
$3 brand if on tier and $70 non-
generic brand if preferred
available for generic
beneficiaries available
living at 134%-
150% of FPL
$10 brand if
generic
available for
beneficiaries
living at 151%-
200% of FPL
------------------------------------------------------------------------
* For a family of 4 living at 200% of the 2014 federal poverty level
($47,700).
** Before any applicable premium tax credits or cost sharing reductions.
See: http://www.shpnc.org/library/pdf/annual-enrollment/2015/med-prime-
comp-chart.pdf, State Health Plan 70130 plan and https://
www.healthcare.gov/find-premium-estimates/#results/
&aud=indv&type=med&state=NC&county=Durham&age O=10&employerCoverage=no
&householdSize=4&income, Blue Value Silver 5000.
In North Carolina's FFM, a BCBS's 70/30 Silver plan monthly premiums
for a 10 year-old child is $ 139/month, with an individual maximum
deductible of $5,000/year and an individual maximum. coinsurance of
$6,350/year, adding up to approximately $13,000/year in annual out-of-
pocket expenses for only one child before any premium tax credits or
cost sharing reductions. For NC Health Choice, maximum out-of-pocket
expense would be only 5 percent of household income or $2,385 for a
household with one or more children.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absences of CHIP?
According to the NC Institute of Medicine's (NCIOM) 2013 Child Health
Report Card, ``More than 160,000 children in NC slipped into poverty
during the recent recession, as the percentage of poor children
increased from 19.5 percent of the child population in 2007 to 26
percent--more than one in every four children--in 2012.'' However, the
NCIOM reported that in a five year period from 2007 to 2012, the
percentage of uninsured children living under 200 percent of the FPL in
North Carolina decreased from 20.6 percent to 11.4 percent. The report
also states that the number of children covered by public health
insurance (Medicaid or NC Health Choice) rose from 896,792 in 2007 to
l,135,016 in 2012. 4. (See: NC Institute of Medicine, 2013 Child Health
Report Card,
http://www.nciom.org/wp-content/uploads/2013/12/2013_CHRC-
121913hi.pdf).
North Carolina supports extended funding of the CHIP program beyond
federal fiscal year 2015. In North Carolina alone, based on the July
2014 enrollment statistics, 80,000 children would become uninsured in
the absence of CHIP. And as long as household income remains at or
above 134 percent of the federal poverty level, those children would
not qualify for Medicaid. They would therefore only be eligible for
employer-sponsored or private health insurance coverage in a plan
available on the Federally Facilitated Marketplace.
If CHIP program funding is not extended, there will be fewer insurance
options for children living in low-income families in North Carolina.
Although comparable benefits may be available in the FFM, low income
families' out-of-pocket expenses may be higher than they are for low
income families with children enrolled in the North Carolina CHIP
Program. The side by-side comparison in the table shows that cost
sharing could be a prohibitively expensive factor for families even if
their children qualify for insurance on the FFM, depending in part on
the amount of applicable premium tax credits or cost sharing
reductions.
Federal legislators and administrators at the Centers for Medicare and
Medicaid Services already know that program beneficiaries ``churn''
back and forth within the CHIP and Medicaid programs as a result of low
income families' sometimes transient or even seasonal work and
fluctuating income statuses. When family income temporarily becomes too
high for CHIP program eligibility but too low to allow a family to
afford a private insurance policy on the FFM, the children in those
families will be at risk for being uninsured, gaps in coverage, and
limited to no access to preventive screenings, treatment, prescription
medications, or behavioral health interventions for chronic conditions.
Cost-effectiveness studies have shown that preventive care saves
millions of dollars in long-term treatment for preventable chronic
conditions and co-morbidities. CHIP program funding is therefore an
investment in the health and future of North Carolina's and America's
low income children.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
Federal allotments received for the North Carolina CHIP program have
been sufficient to fund operations within the framework of the existing
State budget for the program. North Carolina recommends that any
modifications to the formula addressing unspent allotments should
account for the shift of previously eligible children from CHIP
programs to State Medicaid programs as a result of the Affordable Care
Act MAGI eligibility threshold changes.
6. Over the past number of years, states have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of the uninsured, and improve health outcomes for
children in your state?
North Carolina's outreach and enrollment processes have been very
effective. North Carolina has qualified for Children's Health Insurance
Program Reauthorization Act (CHIPRA) Performance Bonus awards for
enrollment and retention for the past three consecutive years. Given
the enhanced outreach inherent to FFM implementation and successful
State outreach and enrollment in recent years, North Carolina does not
have any policy recommendations or requests for improvements for
federal program enrollment regulations.
However, North Carolina encourages increased flexibility in the design
and implementation of our health care delivery systems and federal
funding streams so that we may address the unique needs of North
Carolinians.
Thank you again for your letter. Please feel free to contact me or my
staff if you need any additional information.
Sincerely,
Robin Cummings, MD
Director
cc: Governor Pat McCrory, State of North Carolina
Secretary Aldona Wos, MD, North Carolina Department of Health &
Human Services
______
North Dakota Department of Human Services
600 East Boulevard Avenue Department 325--Bismarck, ND 58505-0250
www.nd.gov/dhs
Fiscal Administration
(701) 328-1980
FAX (701) 328-1030
Toll Free 1-800-472-2622
ND Relay TTY 1-800-366-6888
_______________________________________________________________________
Jack Dalrymple, Governor
Maggie D. Anderson, Executive Director
October 28, 2014
Representative Fred Upton
Chairman
House Committee on Energy and Commerce
Representative Henry A. Waxman
Ranking Member
House Committee on Energy and Commerce
Senator Ron Wyden
Chairman
Senate Finance Committee
Senator Orrin G. Hatch
Ranking Member
Senate Finance Committee
Re: State of North Dakota's Insight on CHIP
Dear Congressmen:
Governor Dalrymple has asked me to respond to your request for
responses to questions you posed in your July 29, 2014, letter about
the Children's Health Insurance Program (CHIP). Following are the North
Dakota responses to your questions.
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g. income, health status, demographics)?
As of July 1, 2014, approximately 3,200 children are served by
North Dakota's CHIP. The income level is set at 175% of the
Federal Poverty Level using Modified Adjusted Gross Income
(MAGI). Children are enrolled through age 18.
Out of the 3,200 children enrolled, there are 430 American Indian
children enrolled.
For the 12 months of calendar year 2013, there were 1,507
children that had coverage for the 12 calendar months. Of those
1,507:
79% (1,180) of children enrolled in Healthy Steps have been
seen by a primary care provider.
71% (87) age 13 (122 children age 13 had continuous coverage)
have received meningitis and T-Dap vaccines.
There were 139 children with Asthma.
There were 20 children with Type 1 diabetes.
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act.? How has the
implementation of PPACA impacted the way your state administers
CHIP?
As required in the Affordable Care Act, on January 1, 2014,
eligibility determination for Medicaid and the Children's
Health Insurance Program changed to use Modified Adjusted Gross
Income (MAGI). This new eligibility determination process does
not allow the use of income disregards. Children previously
enrolled in Medicaid who are no longer eligible for Medicaid
due to the elimination of income disregards are eligible for
coverage through CHIP for 12 months. This 12-month CHIP
eligibility period is intended as a way to ensure a smooth
transition and continuity of coverage for children as the new
income eligibility rules in the Affordable Care Act take
effect. After the 12-month coverage period, the family will be
able to apply again for health care coverage and if the family
no longer qualifies for Medicaid or CHIP, they will be directed
to apply for coverage inside or outside the Federal
Marketplace.
The Department began transitioning children in April 2014, and
the transition will be ending in December 2014. In accordance
with the ACA mandates, North Dakota no longer allows a three-
year average for self-employed individuals for income
determination. This appears to be having an impact on families
who report farm income.
Prior to the ACA, North Dakota policy included a six month
waiting period for dropped coverage (crowd out period). In
accordance with the requirements in the ACA, the waiting period
has been reduced to 90 days.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
This information is not available.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
The North Dakota CHIP has been successful and has been supported
by policy makers and many advocacy organizations. The Executive
Budget request for the 2015-2017 biennium assumes continued
federal CHIP funding. The North Dakota legislative session will
be January through April 2015, so a funding decision as soon as
possible would be appreciated. The Department of Human
Services' does not have information available to estimate the
coverage options that would be available for children should
CHIP funding cease. We could expect that some children may be
able to join the coverage policy from a parent or access
coverage through a child-only policy. However. we do not
collect or maintain information that allows us to estimate the
percent of children that would retain some type of low cost or
free coverage or the percent of children that may become
uninsured.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately?
Yes, the funding formula has been sufficient for North Dakota.
Currently we are carrying over and spending the remaining
previous federal fiscal year allotment within the second
quarter of the subsequent federal fiscal year.
Do you believe there is a need for Congress to further address
the issue of unspent allotments?
North Dakota has not had significant, multiple-year unspent
allotments and we do not have perspective to provide a
recommendation on this.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children?
The alignment of federal policies could strengthen enrollment
efforts. For example, guidelines for determining family/
household based income being consistent across similar economic
assistance programs such as:
SNAP = Supplemental Nutrition Assistance Program
TANF = Temporary Assistance for Needy Families
CCA = Child Care Assistance Program
What other policy changes, if any, would help improve enrollment
of eligible children, reduce the number of the uninsured, and
improve health outcomes for children in your state?
North Dakota does not have additional policy change suggestions.
Thank you for your work to look at funding for the Children's Health
Insurance Program. Should you have any additional questions, please
contact me or Governor Dalrymple's Health and Human Services policy
advisor, Tami Ternes.
Sincerely,
Maggie D. Anderson
Executive Director
______
State of Ohio
Department of Medicaid
50 West Town Street, Suite 400
Columbus, Ohio, 43215
www.jfs.ohio.gov
An Equal Opportunity Employer and Service Provider
John R. Kasich, Governor
John B. McCarthy, Director
November 6, 2014
Chairman Fred Upton
House Committee on Energy and Commerce
2183 Rayburn House Office Building
Washington, D.C. 20515
Chairman Upton,
On behalf of Governor John Kasich, I would like to thank you for the
opportunity to weigh in on the debate over funding for the Children's
Health Insurance Program (CHIP). Ohio remains committed to improving
the health and well-being of its children and looks forward to working
with the Federal government to improve their future.
Ohio's CHIP program is administered as an extension of the Ohio
Medicaid program covering children who come from households with income
under 200% of the Federal Poverty Level. Children enrolled in CHIP have
access to all Medicaid benefits including vision, dental, behavioral
health services, physical health, and most importantly early periodic,
screening, diagnosis and treatment (EPSDT) services. Additionally,
there is no cost sharing for services. With the way Ohio has chosen to
administer CHIP, there was no need for changes due to the Patient
Protection and Affordable Care Act (PPACA). Ohio currently covers
151,605 children under CHIP with 51% of them being male and 49% female.
Roughly 74% of the population is Caucasian, 23% African American, 2%
Asian/Pacific Islander, and 1% listed other.
To continue our successes in connecting children to coverage, Ohio and
other states need clarity on what Congress plans to do sooner rather
than later. A decision regarding tens of millions of dollars requires
ample time for states to properly budget. Should the Federal government
choose not to fund CHIP, Ohio must continue to cover the children and
the services they receive unless there is a corresponding change in the
Federal Maintenance of Effort (MOE) requirement under the Affordable
Care Act. That would mean a reduction in the federal matching
percentage for those services from 73.85% to 62.64%, which equates to
an 11.21% cut in funding to the state. The difference would have to be
covered by state dollars which would cause a significant budget
deficit. The timeline for Ohio's budget process sees a budget bill
being introduced in early February with passage occurring prior to the
start of a new state fiscal year on July 1, 2015. This needs to be
taken into consideration when Congress makes their decision moving
forward. Ohio's CHIP allotment has worked well for the state and has
sufficiently covered all of its CHIP expenditures, therefore Ohio does
not recommend any changes in that area.
Ohio's children remain a priority and through Medicaid, CHIP, and
private insurance, Ohio has covered roughly 9% of its children. Ohio
has received over $63 million since 2010 in Children's Health Insurance
program Reauthorization Act of 2009 (CHIPRA) bonuses. CHIPRA dollars
have gone on to fund and supplement funding for modernization of the
Medicaid program and for innovative strategies in providing services.
Ohio has also made a major step towards simplifying enrollment. On
October 1, 2013. Ohio launched Ohio Benefits, a simple, self-service
website that makes it easier for Ohioans to sign up for the health care
coverage that may be available to them. Through July 31, 2014, this
system has processed over 825,000 applications. The success of this
system comes from coordination from the state and local government
entities.
Thank you again for the opportunity to explain Ohio's Children's Health
insurance Program. Please let me know if you need any further
information.
Sincerely,
John B. McCarthy
Director
Ohio Department of Medicaid
Cc: Ranking Member Henry A. Waxman, House Committee on Energy and
Commerce
Chairman Ron Wyden, Senate Finance Committee
Ranking Member Orrin Hatch, Senate Finance Committee
______
Mary Fallin
Office of the Governor
State of Oklahoma
STATE CAPITOL BUILDING 2300 N. LINCOLN BLVD., SUITE 212 OKLAHOMA
CITY, OKLAHOMA 73105-4801 (405) 521-2342 FAX (405) 521-3353
October 29, 2014
The Honorable Ron Wyden The Honorable Fred Upton
Chairman Chairman
Committee on Finance Energy and Commerce Committee
U.S. Senate U.S. House of Representatives
221 Dirksen Senate Office Building 2183 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
The Honorable Orrin G. Hatch The Honorable Henry Waxman
Ranking Member Ranking Member
Committee on Finance Energy and Commerce Committee
U.S. Senate U.S. House of Representatives
104 Hart Office Building 2204 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
Dear Chairmen Wyden and Upton, and Ranking Members Hatch and Waxman:
On behalf of the state of Oklahoma, I am pleased to submit this reply
to the July 29 Congressional correspondence requesting our input on the
continuation of Children's Health Insurance Program (CHIP) funding
beyond Federal Fiscal Year (FFY) 2015.
Since 1997, Oklahoma's CHIP children have been enrolled in SoonerCare,
the Oklahoma Medicaid program, which is currently a combination
program. Members qualifying for SoonerCare under the CHIP program are
under age 19 and have incomes between the maximum for standard Medicaid
eligibility and 185 percent of Federal Poverty Level (FPL) guidelines.
The majority of these CHIP children are enrolled in an integrated
health care delivery system, SoonerCare Choice, which is a patient-
centered medical home program. Since 2010, through Insure Oklahoma (a
public-private premium assistance program) Oklahoma has been providing
subsidized coverage through qualified small business employers to
children from birth through age 18 who are not eligible for Medicaid
and in families with incomes from 186 percent through 200 percent of
FPL, as well as pregnancy-related benefits to some Medicaid-ineligible
pregnant women.
Below are responses to the six questions outlined in your
correspondence:
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.,
income, health status, demographics)?
In State Fiscal Year (SFY) 2014, Oklahoma had 155,718 unduplicated
CHIP enrollees in its SoonerCare programs. Attached is additional
information describing the demographic characteristics of this
population.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act (PPACA)? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Oklahoma's real-time online enrollment system for SoonerCare,
operational since September 2010, required significant and costly
modification to its rules engine and single streamlined application
to comply with the PPACA Modified Adjusted Gross Income (MAGI)
standard. Because of the PPACA eligibility changes for income and
household com position, extensive training modules were developed
for both Medicaid agency staff as well as contracted call center
staff in order to effectively assist Oklahoma families with
children who were not eligible through the Federally Facilitated
Marketplace (FFM). Because Oklahoma is an assessment state, the
final eligibility determination is completed by the state's
Medicaid agency. Overall, it is more complex and time consuming for
Medicaid agency staff to accurately determine income under MAGI,
adding an increased burden to Oklahoma.
Oklahoma also made all necessary policy revisions and system
changes to comply with the PPACA, including moving those children
under 133 percent FPL from Title XXI to Title XIX.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and cost sharing currently provided in your state under
CHIP that are not comparably available through your state's
exchange or through the majority of employer sponsored health plans
in your state.
The majority of Oklahoma's SoonerCare CHIP children are enrolled in
the Medicaid/CHIP combination program. As required by CMS, these
children receive comprehensive medically necessary benefits,
including non-emergency transportation, dental and vision care.
These services are offered within the Medicaid cost sharing
limitations.
SoonerCare coverage for children, with CMS required benefits and
wrap around services, is equal to Federally Facilitated Marketplace
plans with a 90 percent actuarial value. Premiums for a comparable
child-only plan for a 12-year-old in Oklahoma County, excluding
dental and vision, currently range from $192 to $252 per month.
There are premium variations across the state based on age, county
of residence and scope of benefits.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframes should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any) do
you believe CHIP enrollees in your state will be able to obtain?
How many children covered by CHIP do you estimate would become
uninsured in the absence of CHIP?
Yes, to allow time to resolve existing program or policy issues,
such as the family glitch, and provide continuity of coverage to
children, Oklahoma recommends the CHIP program be extended through
FFY 2019. The family glitch refers to the situation in which
employer-sponsored insurance for family coverage might prove too
costly for low-income employees, even though affordable on an
individual basis. This situation should be resolved during the
extension period to ensure the health and financial security of our
families and in a way that supports workers through enrollment in
employer-sponsored health insurance. For state budgeting and
planning purposes, Congress should take immediate action.
5. Do you believe the annual allotments your state has received
starting in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
Since FFY 2013, Oklahoma's annual allotments have not been
sufficient to cover our CHIP expenditures. However, the state had
enough unspent allotments from previous years to bridge the gap
between our annual allotments and annual expenditures. For FFY
2014, Oklahoma's projected CHIP expenditures will exceed the annual
allotment. Once again, Oklahoma will rely on its unspent allotment
for sufficient funding. With the continued pressure of program
growth forced by the PPACA, Oklahoma expects there will be a need
for increased allotments in the future.
Unspent allotments from each state might be more efficiently
managed if Congress established and maintained a contingency fund
for states that experience funding shortfalls.
6. Over the past number of years, states have worked to reduce the
number of uninsured children and Medicaid and CHIP have been
critical components in that effort. Do you believe federal policies
could help states do an even better job in enrolling eligible
children? What other policy changes, if any would help improve
enrollment of eligible children, reduce the number of uninsured and
improve health outcomes for children in your state?
I have stated health goals for Oklahoma that include improving
population health outcomes, reducing the number of uninsured,
increasing access to health services and improving the quality of
care. To that end, I believe federal policies should support state
managed programs to achieve these objectives. Oklahoma specifically
supports the following programs and policies:
Provide flexibility to states for innovation and reward that
innovation through incentive programs (for example, the CHIP
performance bonus program);
Support quality measurement and improvement as a way to
specifically address health outcomes through programs such as
the CHIPRA pediatric quality measurement and improvement;
Reduce the burden on states for the PPACA enrollments by extending
the use of CHIP allotments to cover previously Medicaid-
eligible children; and
Create program efficiencies by establishing and maintaining a
contingency fund for states with annual CHIP expenditures
exceeding that state's annual allotment.
In conclusion, Oklahoma believes adoption of these recommendations
would have a positive impact on health outcomes for our youngest
citizens by improving access to quality preventive and primary health
care.
Sincerely,
Mary Fallin
Governor
SoonerCare CHIP SFY 2014
----------------------------------------------------------------------------------------------------------------
CHIP
Medicaid/CHIP Standalone * CHIP Total
----------------------------------------------------------------------------------------------------------------
American Indian................................................. 19,009 191 19,200
Asian or Pacific Islander....................................... 3,285 661 3,946
Black or African American....................................... 12,950 274 13,224
Caucasian....................................................... 93,768 6,847 100,615
Declined to Answer.............................................. 4,758 212 4,970
Multiple Race................................................... 13,667 96 13,763
-----------------------------------------------
Total........................................................... 147,437 8,281 155,718
Hispanic Ethnicity.......................................... 30,673 5,642 36,315
----------------------------------------------------------------------------------------------------------------
Race is self-reported by members at the time of enrollment. The multiple race members have selected two or more
races. Hispanic is an ethnicity not a race. Hispanics can be of any race and are accounted for in a race
category above.
----------------------------------------------------------------------------------------------------------------
CHIP
Medicaid/CHIP Standalone * CHIP Total
----------------------------------------------------------------------------------------------------------------
Female.......................................................... 72,799 7,930 80,729
Male............................................................ 74,638 351 74,989
-----------------------------------------------
Total........................................................... 147,437 8,281 155,718
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
CHIP
Medicaid/CHIP Standalone * CHIP Total
----------------------------------------------------------------------------------------------------------------
Infant (0)...................................................... 3,563 5 3,568
1-5............................................................. 29,996 149 30,145
6-12............................................................ 64,699 282 64,981
13-18........................................................... 49,179 511 49,690
19 & Over **.................................................... 0 7,334 7,334
-----------------------------------------------
Total........................................................... 147,437 8,281 155,718
----------------------------------------------------------------------------------------------------------------
Age as of end of SFY (6/30/2014).
** Only Soon-To-Be-Sooners members can be 19 & Over.
----------------------------------------------------------------------------------------------------------------
CHIP
Medicaid/CHIP Standalone * CHIP Total
----------------------------------------------------------------------------------------------------------------
100%-132%....................................................... 66,424 5,995 72,419
133%-149%....................................................... 23,915 548 24,463
150%-185%....................................................... 57,098 1,738 58,836
-----------------------------------------------
Total........................................................... 147,437 8,281 155,718
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
CHIP
Medicaid/CHIP Standalone * CHIP Total
----------------------------------------------------------------------------------------------------------------
Monthly Average Enrollment...................................... 76,870 3,201 80,071
----------------------------------------------------------------------------------------------------------------
* CHIP Standalone includes Soon-To-Be-Sooners (STBS) and Insure Oklahoma children. STBS provides limited
coverage for pregnant women related to pregnancy-related health care services for the benefit of the baby.
Data valid as of 7/14/2014 and subject to change.
______
State of Oregon
John A. Kitzhaber, MD
Governor
254 STATE CAPITOL, SALEM OR 97301-4047 (503) 378-3111 FAX (503) 378-
8970
www.oregon.gov
October 29, 2014
The Honorable Ron Wyden The Honorable Fred Upton
Chairman Chairman
Committee on Finance Committee on Energy and Commerce
U.S. Senate U.S. House of Representatives
Washington, DC 20510 Washington, DC 20515
The Honorable Orrin Hatch The Honorable Henry Waxman
Ranking Member Ranking Member
Committee on Finance Committee on Energy and Commerce
U.S. Senate U.S. House of Representatives
Washington, DC 20510 Washington, DC 20515
Dear Chairmen Wyden and Upton, Senator Hatch, and Representative
Waxman.
This letter is in response to correspondence to the state of Oregon
from House Representative Fred Upton and Henry A. Waxman, and Senators
Ron Wyden and Orrin G. Hatch regarding questions members of the
bipartisan bicameral committees asked about the Children's Health
Insurance Program (CHIP) and considering whether and how the program
should be extended, and what, if any, additional policy changes should
be made.
We strongly encourage you to pass a long-term extension of the CHIP
program as soon as possible. It has been and continues to be invaluable
in ensuring access to affordable health insurance coverage for
thousands of families in our state. Without an extension of the program
and the funding, many children would be at risk of not being covered
since premium, co-pays and deductibles may be unaffordable for
families. Also the benefits covered under our CHIP program ensure that
children have affordable access to a broader range of services
including dental care, physical and speech therapy and vision services.
Oregon's responses to these questions are included here:
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics)?
There are 76,000 children enrolled in CHIP in Oregon as of June 15,
2014, about evenly split between males and females. We also cover
over two thousand pregnant women who are Medicaid eligible except
for their immigration status. Of children covered under the Oregon
Health Plan (our Medicaid and CHIP program), CHIP children make up
about 20%. The following tables show the income and demographics:
------------------------------------------------------------------------
# enrolled as of
June 15, 2014
------------------------------------------------------------------------
< l-18 years old, 100-200%............................ 58,772
< 1-18 years old, 201-300%............................ 17,726
Pregnant women........................................ 2.122
-----------------
Total................................................. 78,620
------------------------------------------------------------------------
------------------------------------------------------------------------
% of CHIP
population
------------------------------------------------------------------------
American Indian/Alaska Native......................... 1.2%
Asian................................................. 3.4%
Black or African American............................. 1.8%
Native Hawaiian/Other Pacific Islander................ 0.4%
White................................................. 57%
More than one race.................................... 0.5%
Unspecified Race/Unknown.............................. 35%
------------------------------------------------------------------------
------------------------------------------------------------------------
% of population
------------------------------------------------------------------------
Hispanic or Latino.................................... 16%
------------------------------------------------------------------------
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Oregon administers CHIP as a separate Medicaid ``look alike''
program. A couple changes made to the CHIP program since 2012 that
were indirectly related to the ACA include:
Transitioning the CHIP premium assistance commercial insurance
option for children from 200-300% to direct coverage under for
the Oregon Health Plan (the same as the CHIP program for
children under 200% FPL), and increasing the income limits for
children on OHP up to 300% FPL
Per the ACA, some of the CHIP children (6-18 100%FPL-133% FPL
were moved to Medicaid coverage (the ``stair-step'' children).
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or the cost sharing currently provided in your state
that are not comparably available through your state's exchange or
through the majority of employer sponsored health plans in your
state.
Services not provided by Qualified Health Plans (QHPs) available at
the Marketplace/Exchange and typically not available by employer
sponsored insurance include:
Pediatric Dental--QHPs are not required to provide, so generally
enrollees must purchase a stand-alone dental plan with
additional cost shares and premiums.
Vision Senvices--Also available from QHPs, but with high
deductibles, other cost shares, and limited benefits from QHPs.
These services are not limited by our CHIP program.
Hearing exams, hearing aids.
Physical and speech therapy--QHPs have tighter limits on benefits
than our CHIP program.
Non-Emergent Medical Transportation--This benefit is not
available through QHPs or employer sponsored coverage and
transportation is frequently a barrier to access for children
in lower income households.
Enabling services--Sign language and translation/interpretation
for individuals with limited English proficiency.
In addition, the QHPs have cost sharing requirements for both
premiums and co-pays/deductibles that our CHIP program does not.
Even when the family does qualify for tax credits, the
affordability of the premium may be challenging since the
affordability criteria only looks at an employee's employer
coverage not what it costs to cover the family/dependent (the so-
called ``kid glitch'').
4. Do you recommend that CHIP funding be extended? If so, for how long
and for budgeting and planning purpose, under what timeframe should
Congress act upon an extension? If you do not believe CHIP funding
should be extended, what coverage (if any) do you believe CHIP
enrollees in your state would be able to obtain? How many children
covered by CHIP do you estimate would become uninsured in the
absence or CHIP?
Oregon recommends extending CHIP funding at least through 2019.
During an extended funding period, many of the key issues regarding
the affordability and adequacy of children's coverage could be
addressed, and states and the federal government would have time
and opportunity to determine what strategies will work best for the
future.
With CHIP funding currently scheduled to run out shortly after FY
2015, children now served by CHIP Likely would be left to find
coverage elsewhere--the Marketplace or employers if available. It
is unlikely that low-income families would be able to afford the
coverage on the exchanges given the ``kid glitch.'' Also, low
income families may not be able to afford to purchase some of the
additional benefits that Oregon's current children can access such
as dental care, physical and speech therapies, or to be able to get
to the care needed if they were to have transportation barriers. In
addition, given our experience, we agree with the Medicaid and CHIP
Payment and Access Commission (MACPAC) that transitions to the
Marketplace likely not would be smooth and that many children would
likely fall in with MACPAC data that as many as half of our CHIP
kids may lose coverage, which would erase much of our coverage
gains for children that we've made over the past five years.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting in 2009 have
been sufficient and the formula is working appropriately? Do you
believe there is a need for Congress to further address the issue
of unspent allotments?
Given that CHIP is capped and is allotted states annually based on
a methodology that relies on each state's recent CHIP spending and
that states have two years to spend each allotment, Oregon has not
experienced any challenges in running low on allotment funds nor in
having excessive leftover funds at the end of a fiscal year.
Congress should consider keeping in place and extending the safety
net provisions of CHIPRA, however, in order to protect states and
optimize the use of funds. Under these provisions, if a state
should run out of allotment, there are options of applying for
funds from (1) the CHIPRA contingency fund established by the 2009
legislation or (2) FY 2012 redistribution funds from states that
did not exhaust their FY 2012 allotment after two years of
availability.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help States do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of the
uninsured, and improve health outcomes for children in your state?
Oregon has seen dramatic decline in the number of uninsured
children by more than six (6) percentage points since implementing
the State's HealthyKids programs in 2009 and has a rate of
uninsured children 1.5 percent lower than the national average.
This success was due in large part to (1) the expansion in the
income eligibility criteria to 300 percent of FPL for families of
children (2) implementation of 12 month continuous eligibility for
children, (3) the use of the option for Expedited enrollment using
SNAP and (4) the use of premium subsidies for children in families
who chose to have their children covered in the family's individual
or group insurance coverage or through the HealthyKids Connect
program's private coverage.
The state's implementation of the Coordinated Care model, and
Patient Centered Primary Care Homes as part of the Health Systems
Transformation effort to better integrate and coordinate care and
provide a full scope of coverage has already shown measurable
improvement in health outcomes and key indicators of population
health. Oregon, therefore, would encourage Congress to continue to
allow states these and other available flexibilities to enhance
both numbers of insured and health outcomes for children and their
families.
Sincerely,
John A. Kitzhaber, MD
Governor
______
Commonwealth of Pennsylvania
Office of the Governor
Harrisburg
October 31, 2014
Honorable Fred Upton Honorable Ron Wyden
Chairman Chairman
Energy & Commerce Committee Committee on Finance
2183 Rayburn House Office Bldg. 221 Dirksen Senate Office Bldg.
Washington. D.C. 20515 Washington. D.C. 20510
Honorable Henry Waxman Honorable Orrin Hatch
Ranking Member Ranking Member
Energy & Commerce Committee Committee on Finance
2204 Rayburn House Office Bldg. 104 Hart Office Bldg.
Washington, D.C. 20515 Washington, D.C. 20510
Dear Chairmen Upton and Wyden, and Ranking Members Hatch and Waxman:
Thank you for contacting Pennsylvania regarding the future of the
Children's Health Insurance Program (CHIP) and how it should be
extended. As the leader of a state with more than 157,200 children
enrolled in CHIP, there is no question that funding for CHIP should be
extended on a federal level. We must allow CHIP to continue to
successfully provide quality, affordable health care coverage to
children. Moreover, addressing this issue promptly is critical for
providing certainty to CHIP families and making sure that children can
stay with their health care providers.
CHIP works for kids. Pennsylvania's CHIP program (PA-CHIP) has
provided vital health care coverage to hundreds of thousands of
children in Pennsylvania for over 20 years and is an example of how
states can develop innovative solutions to meet the needs of their
residents. PA-CHIP was enacted in 1992, and five years later, when the
federal CHIP was created, PA-CHIP was acknowledged as a national model
for the federal health care coverage program for children. PA-CHIP
continues to be one of the benchmark benefit packages recognized in the
federal CHIP law.
Pennsylvania has worked tirelessly to continue providing PA-CHIP
coverage as an option for children and their families. However, as you
know, the passage of the Affordable Care Act (ACA) serves as a
challenge for PA-CHIP because it forces an efficiently functioning
program to conform to rigid federal standards. In addition to the ACA's
overwhelming strain on the program's resources, the ACA has proved
damaging to PA-CHIP's enrollment figures by requiring children in the
100%-133% Federal Poverty Level (FPL) range to be enrolled in Medicaid,
rather than in CHIP.
Last year, Pennsylvania vehemently opposed a federal interpretation
requiring an unnecessary transfer of children from PA-CHIP into
Medicaid. I spoke personally with then Secretary Kathleen Sebelius and
said no child in Pennsylvania should be forced to change health care
coverage and potentially lose access to his or her health care provider
needlessly. Unfortunately, this is the scenario we now face because of
the ACA. While the Obama Administration ultimately refused to grant
Pennsylvania a permanent waiver from this ACA requirement in order to
protect the child/health care provider relationship, we did
successfully secure additional time to prepare for the transition and
keep children with their providers for as long as possible.
When extending federal funding for CHIP, I also would suggest that
the federal government use this extension as an opportunity to improve
upon the federal program for the betterment of Pennsylvania's children
and children nationwide. For example, Federal authorities should
consider structuring flexibilities into the program for states, such as
allowing states with separate CHIP programs the option to enroll
children above 100% FPL in CHIP or Medicaid. Additionally, federal
authorities should consider ``at-cost'' CHIP to be Minimum Essential
Coverage (MEC), therefore avoiding unnecessary tax consequences for
families.
With the health care needs of Pennsylvanian's children at stake,
the extension of federal funding is critical to retain PA-CHIP as an
option for families seeking health care coverage for their children.
Thank you for the opportunity to share the importance of the extension
of federal funding for CHIP and what it will mean for Pennsylvania's
children and their families. With regard to your specific questions,
please find the responses attached.
I urge you to extend CHIP's federal funding, and I look forward to
working with you to improve this successful program.
Sincerely,
TOM CORBETT
Governor
Enclosure
Attachment A
1. How many individuals are served by you r state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g. income, health status, demographics)?
Pennsylvania CHIP population characteristics. (September 2014)
Income Range
--------------------------------------------------------------------------------------------------------------------------------------------------------
Income Range $0 < $10,000 < $20,000 < $30,000 < $40,000 < $50,000 < $60,000 > $60,000 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Enrollees.............................................. 1,596 1,443 5,360 28,613 41,773 35,759 20,709 22,642 157,895
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ethnicity
----------------------------------------------------------------------------------------------------------------
Ethnicity Unspecified Hispanic Non-Hispanic Total
----------------------------------------------------------------------------------------------------------------
Enrollees....................................... 21,200 15,523 121,172 157,895
----------------------------------------------------------------------------------------------------------------
Race
--------------------------------------------------------------------------------------------------------------------------------------------------------
More
African Hawaiian/ Alaskan/ Asian Other Than
Race Unspecified American Caucasian Asian Islander Indian (Indian) Race One Total
Race
--------------------------------------------------------------------------------------------------------------------------------------------------------
Enrollees.......................................... 11,338 21,737 102,744 5,337 81 138 854 13,927 1,739 157,895
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gender
------------------------------------------------------------------------
Gender Female Male Total
------------------------------------------------------------------------
Enrollees.................................. 78,493 79,402 157,895
------------------------------------------------------------------------
Cost Category
--------------------------------------------------------------------------------------------------------------------------------------------------------
Free (133%- Low Cost 1 Low Cost 2 Low Cost 3
Cost Category 208% FPL) (208%-262% (262%-288% (288%-314% At-Cost (314% Total
FPL) FPL) FPL) FPL and above)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Enrollees............................................... 120,637 23,395 5,895 4,512 3,456 157,895
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
As a result of the Affordable Care Act (ACA), Pennsylvania's CHIP (PA-
CHIP) has faced tremendous operational and administrative challenges in
order to comply with the requirements and expectations of the ACA,
including but not limited to:
Transitioned to the use of Modified Adjusted Gross Income (MAGI) to
determine applicants' eligibility for PA-CHIP. The change to
MAGI resulted in a complete reconfiguration of the methods by
which PA-CHIP calculates applicants' income and determines
applicants' household composition.
Moved eligibility determinations out of the PA-CHIP Application
Processing System and into a combined rules engine with the
Medicaid program. PA-CHIP and the Medicaid program continue to
work through discrepancies regarding eligibility, as the
programs take different approaches to certain eligibility
characteristics.
Prepared for a transition of PA-CHIP enrollees ages 6-18 within
100%-133% FPL to the Medicaid program, consequently forcing
enrollees to undergo an unnecessary transition of coverage and
potential disruption in continuity of care.
Implemented the ``Single Streamlined Application'' and renewal
form. By changing the initial and renewal applications to
remove requests for verifications prior to electronic
verification sources being accessible, incomplete application
and renewal forms accumulated to create a significant backlog.
Each processing entity experienced significantly increased
administrative workloads, and families experienced delays in
processing and requests to produce paper verifications.
Initiated coordination with the Federally Facilitated Marketplace
(FFM) to transfer account information to and from the FFM. PA-
CHIP faced significant challenges as the Federal Data Services
Hub underwent inadequate testing and was not prepared to
facilitate the transfer of the account information.
Transitioned to Income Tax Rules, causing considerable confusion
for a means tested program. Confusion as to the applicability
of the rules to certain households' composition continues, as
federal regulators are still interpreting certain rules as to
when or how income should be counted.
Currently, Pennsylvania administers a Title XXI CHIP through nine
private insurance companies serving as contractors. (Title XXI of the
Social Security Act allows states to operate a stand alone CHIP
program, separate and apart from a Title XIX Medicaid program.) The
contractors provide healthcare benefits to the children, and are
responsible for certain portions of the eligibility and enrollment
process. Pennsylvania is the only state with this type of arrangement.
In response to the ACA, along with the passage of the CHIP
Reauthorization Act of 2009, PA CHIP is performing a holistic
assessment of the administration of the program to identify areas of
possible administrative improvement. The review has thus far
demonstrated the benefit of a Title XXI CHIP, and the corresponding use
of contractors, as this administrative framework allows CHIP to operate
very efficiently.
The ACA also impacted PA-CHIP's ``Buy-In'' program, which allows
families with incomes greater than 300% FPL \1\ to purchase the PA-CHIP
benefit package at no cost to the state or federal government. Even
though the Buy-In program maintains the same eligibility requirements
and benefit package as the subsidized PA-CHIP, federal authorities have
not yet concluded the Buy-In program constitutes Minimum Essential
Coverage (MEC) for enrollees. Without this conclusion, enrollees in the
Buy-In program may face penalties pursuant to the ACA's individual
mandate if other coverage is not secured.
---------------------------------------------------------------------------
\1\ Factoring in the ACA MAGI rules, 300% FPL is effectively 314%
FPL.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
---------------------------------------------------------------------------
health plans in your state.
As a preliminary note, in a study performed by Deloitte Consulting, LLP
(Deloitte) for Pennsylvania in August 2012, Deloitte analyzed the ten
benchmark options for the exchange and concluded, among other things,
that there was little variation in the benchmark options. Thus, for
purposes of this response, the PA benchmark benefits and the majority
of employer sponsored health plans in the state are assumed to be
parallel, and our comments will focus on comparing PA-CHIP benefits and
the PA benchmark benefits.
Cost-Sharing
PA-CHIP has graduated levels of premiums and cost-sharing based on
income level.\2\ Under PA law, Free PA-CHIP covers children in families
with an adjusted gross household income no greater than 200% of the
FPL. There are no premiums and no co-payments collected for enrollees
in this group. Low-cost PA-CHIP covers children in families with an
adjusted gross household income greater than 200% but no greater than
300% of the FPL; these enrollees pay modest premiums.
---------------------------------------------------------------------------
\2\ As noted above, PA-CHIP also has a full-cost component for
those above 300% FPL, which is not subsidized by either federal or
state dollars. In keeping with the focus of the Congressional inquiry,
this cost-sharing discussion addresses only the subsidized components.
Children in Low-cost PA-CHIP also are charged point-of-service co-
payments for primary care visits ($5), specialists ($10), emergency
room care ($25, waived if admitted), and prescriptions ($6 for generic
and $9 for brand names). There are no co-payments for well-baby visits,
well child visits, immunizations, or emergency room care that results
in an admission. Co-payments apply to physical health services but are
no applicable to routine preventive and diagnostic dental services or
vision services. Cost sharing for PA-CHIP, the combination of premiums
and point of service co-payments, is capped by federal CHIP regulation
(42 C.F.R. 457.560) at 5% of household income.\3\
---------------------------------------------------------------------------
\3\ 42 C.F.R. Sec. 457.560(a): ``A State may not impose premiums,
enrollment fees, copayments, coinsurance, deductibles, or similar cost-
sharing charges that, in the aggregate, exceed 5 percent of a family's
total income for the length of a child's eligibility period in the
State.''
In summary, PA-CHIP enrollees pay modest premiums, depending on income
---------------------------------------------------------------------------
level, and have limited cost-sharing:
----------------------------------------------------------------------------------------------------------------
Approximate Average
Premium as a % of the Premium Cost to Enrollee Total Premium Plus Cost-
Income Federal Poverty Level (FPL) Per Member Per Month Per Month as of Sharing Per Year as % of
(PMPM) Cost September 5, 2014 Household Income
----------------------------------------------------------------------------------------------------------------
< 201% FPL........................ 0% $0 0%
201% FPL-250% FPL................. 25% $50.25 5%
251% FPL-275% FPL................. 35% $70.35 5%
276% FPL-300% FPL................. 40% $80.40 5%
----------------------------------------------------------------------------------------------------------------
By comparison, premiums for the second lowest cost silver QHP in
Pennsylvania for 2014 plans ranged from $84.46 to $149.13.\4\ Moreover,
with the addition of cost-sharing, premiums plus cost-sharing under the
ACA may be substantially more than 5% of household income, even with
premium tax credits and cost-sharing reductions.\5\ Focusing on the
cost-sharing differential only, a study by Wakely Consulting Group in
July 2014 \6\ concluded that the cost sharing (deductible, copays, and/
or coinsurance) for a child on a silver plan, with cost sharing
reduction subsidies, would be considerably more than the cost sharing
for PA-CHIP coverage:
---------------------------------------------------------------------------
\4\ http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/
datasheet_home.cfm.
\5\ See, e.g., www.communitycatalyst.org/doc-store/.../
affordability_in_aca.pdf;
http://www.kaiserhealthnews.org/features/insuring-your-health/2013/
070913-michelle-andre
ws-on-cost-sharing-subsidies.aspx.
\6\ ``Comparison of Benefits and Cost Sharing in Children's Health
Insurance Programs to Qualified Health Plans,'' Wakely Consulting
Group, July 2014 (``Wakely Study'') available at http://www.wakely.com/
wp-content/uploads/2014/07/FINAL-CHIP-vs-QHP-Cost-Sharing-and-
Benefits-Comparison-First-Focus-July-2014-.pdf.
----------------------------------------------------------------------------------------------------------------
160% FPL 210% FPL
Income Level Coverage -------------------------------------------------------------------
PA-CHIP QHP PA-CHIP QHP
----------------------------------------------------------------------------------------------------------------
Actuarial Value............................. 100.0% 86%-88% 97.2% 72%-74%
Enrollee Average Percent of Allowed Claims.. 0.0% 12%-14% 2.8% 26%-28%
Average Annual Cost Sharing................. $0 $411-$480 $98 $891-$960
Maximum Out of Pocket....................... $0 $500-$2,250 $1,419 $3,000-$5,200
----------------------------------------------------------------------------------------------------------------
This cost-sharing structure of PA-CHIP compares very favorably to QHP
coverage available through the exchange. In many instances, cost-
sharing for PA-CHIP enrollees will be equal to or less than a family
would experience with enrollment in a QHP.
Benefits
PA-CHIP provides identical, comprehensive benefits to individuals
enrolled in all levels of the program. Basic services include:
Preventive care, including physician, nurse practitioner and
physician assistant services;
Specialist care, including physician, nurse practitioner and
physician assistant services;
Autism services, not to exceed $36,000 annual benefit cap
(specified by Act 62 of 2008);
Diagnosis and treatment of illness or injury;
Laboratory/pathology testing;
X-rays;
Injections and medications;
Emergency care, including emergency transportation;
Prescription drugs;
Emergency, preventive and routine dental care, and medically
necessary orthodontia; \7\
---------------------------------------------------------------------------
\7\ As a result of the CHIP Reauthorization Act of 2009 (CHIPRA),
medically necessary orthodontia was added to the dental benefits
package. The orthodontia benefit is capped at a lifetime maximum of
$5,200. The yearly dental benefit limit is $1,500.
---------------------------------------------------------------------------
Emergency, preventive and routine vision care;
Emergency, preventive and routine hearing care; and
Inpatient hospital care (90 days including mental health).
Additional medically necessary and therapeutic services include mental
health services, inpatient and outpatient treatment of substance abuse,
rehabilitative therapies, medical therapies, home health care, hospice
care durable medical equipment, and maternity care.
Significantly, the Wakely Study distinguished child-specific benefits--
those that are other than the core benefits typically included in a
major medical insurance policy--and found that PA-CHIP covers 79% of
those services, while QHPs cover only 50%. Child-specific benefits
focus on dental, including orthodontics; vision; audiology;
habilitation; and therapy coverages.\8\
---------------------------------------------------------------------------
\8\ See Wakely Study at Table 16, pages 26-27.
PA-CHIP, like QHP coverage, includes some limitations on benefits.
However, it is difficult to compare those limitations with the QHP
coverage of those benefits for two reasons. First, QHPs may also impose
limits, but data is not readily available to identify the frequency or
level of those limitations, and the limits may vary by product and
plan. Second, if a child is approaching those limits on PA-CHIP it is
likely that the child will be eligible for Medicaid coverage through a
special PA Medical Assistance program for children with special health
care needs or chronic conditions (for which income is not considered
---------------------------------------------------------------------------
when determining eligibility).
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeframe should Congress act upon an extension? If you do not
believe CHIP funding should be extended, what coverage (if any)
do you believe CHIP enrollees in your state would be able to
obtain? How many children covered by CHIP do you estimate would
become uninsured in the absence of CHIP?
Federal funding for CHIP should absolutely be extended promptly. PA-
CHIP has provided health care coverage to hundreds of thousands of
children in Pennsylvania for over 20 years and is an example of how
states can develop innovative solutions to meet the needs of their
residents. Pennsylvania has worked tirelessly to continue providing PA-
CHIP coverage as an option for children and their families. With the
health care needs of Pennsylvanian's children at stake, it is critical
that federal funding be extended to allow PA-CHIP as an option for
families seeking coverage for their children.
Pennsylvania strongly recommends that federal funding be extended to
align with Congress's authorization of the program, i.e. through fiscal
year 2019. As current federal funding of CHIP is set to expire on
October 1, 2015, Congress should begin the reauthorization process
immediately. States, as partners in the CHIP program, need the timely
assurance of funding as they prepare their budgets. But perhaps more
critically, Congress should urgently address the continued
appropriation of federal funding for CHIP to provide certainty for
families who rely on CHIP coverage for their children.
In the absence of CHIP, families would have fewer options for accessing
health care and more than 157,200 Pennsylvania children would need to
find replacement coverage, which could take time, be more expensive,
and potentially jeopardize the children's access to health care
services. This would be devastating to Pennsylvania families.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
The states' allotments are based on complex methodologies specified in
Section 2104(m) of the Social Security Act. Each state's federal fiscal
year (FFY) allotment is adjusted based on several factors, including
per capita health care growth and the child population growth.
For FFY13, ACA mandated a ``rebasing'' process to determine the
allotment. This methodology bases the allotment on the states' payments
(i.e., based on enrollment) rather than the allotments for FFY12. For
FFY14, the methodology reverted to using the prior year allotments as a
base. For FFY15, there will be two allotments: one for each six months
of the FFY.
Pennsylvania has been fortunate since the passage of CHIPRA to have
adequate federal funds to meet the increased demand for the CHIP
services. We saw our CHIP enrollment increase from 183,000 to nearly
198,000 between early 2009 and mid-2010 before enrollment again leveled
off and began a slow decline through 2012. The decline has continued
due to the ACA requirement that children in the 100%-133% FPL range be
enrolled in Medicaid, rather than CHIP.
The federal matching rate is set to increase by 23 percentage points
beginning in FFY15. This will lead to a quicker exhaustion of federal
CHIP dollars. Simultaneously, as Pennsylvania has experienced leaner
enrollment figures--partially attributable to the unnecessary transfer
of children to Medicaid--the formula works against Pennsylvania since
the program's lower enrollment numbers will be used for calculating
future allotments (rebasing). Thus, just as the matching rate is set to
increase by 23 percentage points--resulting in a quicker exhaustion of
federal CHIP funds--Pennsylvania will receive a smaller allotment of
federal funds to support its CHIP program. Many states will be in a
similar predicament.
In sum, it may be wise to take unspent funding from past years and make
it available to states, such as Pennsylvania, that have decreased CHIP
enrollment due to Medicaid expansion, so that their programs will not
be doubly jeopardized when the significantly increased federal match
funds are distributed in accord with the rebased allotments.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of the uninsured, and improve health outcomes for
children in your state?
When contemplating federal policies to reduce the number of uninsured
children, Pennsylvania suggests a shift of focus away from only looking
at the number of enrollees and move towards structuring programs that
empower families to get engaged in improving their health and becoming
more well-informed consumers of their health care. Focusing solely on
the fluctuations in enrollment numbers distracts advocates,
legislators, auditors, and others away from the overall goal of
improving the health of children by ensuring there are a range of
coverage options to allow a child to be covered, regardless of changing
life circumstances. Under Governor Corbett's leadership, the health
care coverage rate for children in Pennsylvania is close to 95%. While
this is extremely high, Governor Corbett believes we can still do more
and has pushed to continuously work toward getting all kids covered
while also seeking to strategically improve Pennsylvania's overall
health insurance system. Any policy changes contemplated by the federal
government should align with Governor Corbett's Healthy Pennsylvania
priorities: providing affordability, improving access, and ensuring
quality.
Access to health care coverage must be affordable for consumers. To
accomplish this, more incentives should be built into government
programs to allow states to help individuals transition from fully
subsidized coverage to self-sufficiency, such as additional premium
assistance for employer-sponsored insurance. Policymakers should shift
away from eliminating premiums, and rather toward giving states the
flexibility to develop premium structures that are affordable for
consumers and begin to build into these programs various levels of
health care consumer engagement and a stronger focus on healthy
behaviors. CHIP premiums are designed on a sliding scale based upon a
family's ability to pay. As income increases, the cost-sharing rises
closer to what is experienced in commercial health insurance coverage.
The flexibility to stagger cost-sharing would allow the program time to
engage consumers and begin educating enrollees on the benefits of
having a personal stake in improving their health. Establishing greater
flexibility could lead to the development of healthy behavior incentive
programs that reward good health care choices and improved health,
therefore, allowing CHIP enrollees to receive some of the newest
innovations in health care coverage that are found in the commercial
health insurance market.
Access to health care coverage must also be available for consumers.
Policymakers should focus on how to attract and retain highly qualified
medical professionals as providers to facilitate better access to the
health care system. As enrollment numbers increase, so potentially do
the wait times to see a practitioner. When individuals desire to be in
the medical profession, we should provide incentives to fill the gaps
as far as medical specialties--including general practitioners--and
geographic locations. As part of Healthy Pennsylvania, Governor Corbett
continues to support loan forgiveness programs to incentivize primary
health care providers to practice in rural and underserved areas of the
Commonwealth.
Policymakers should seize the opportunity presented by the federal
extension of CHIP to improve upon the program's strengths, and to allow
CHIP to serve as an integral bridge to independence for CHIP children
and their families.
______
State of Rhode Island and Providence Plantations
State House, Room 224
Providence, Rhode Island 02903
401-222-2080
Lincoln D. Chafee
Governor
October 28, 2014
Fred Upton, Chairman Ron Wyden, Chairman
House Committee on Energy and
Commerce Senate Finance Committee
Henry A. Waxman, Ranking Member Orrin G. Hatch, Ranking Member
House Committee on Energy and
Commerce Senate Finance Committee
Dear Chairmen and Ranking Members:
I appreciate the opportunity to express my strongest support for the
continuation of the Children's Health Insurance Program (CHIP). The
CHIP has been instrumental in reducing the number of uninsured children
and pregnant women in Rhode Island and assuring they have access to the
high quality prenatal and pediatric services they need to start and
stay healthy. Moreover, the CHIP has provided Rhode Island with the
crucial resources necessary to sustain RIte Care, the state's
nationally recognized, successful Medicaid managed care program for
families with children.
The significant contributions the CHIP has made to children's health
are not unique to the State of Rhode Island. The CHIP has played a
similar role in ensuring access to care and better health outcomes for
children in states all across the nation. Given the gains the CHIP has
made, it is critical that Congress act to re-authorize the program for
an additional four more years along with the already scheduled 23
percent increase in the CHIP federal match rate. Without decisive
action to extend the CHIP by the end of this year, millions of children
will lose access to cost effective, high-value health coverage and we,
as a nation, will be dealing with the consequences for generations to
come. For states like Rhode Island which have emerged as leaders in
children's health, the extension of the CHIP is critical not only for
preserving the gains we have already made, but also for ensuring we
have the resources necessary to continue to succeed in the years ahead.
As per your request, below are the responses to questions contained in
your letter of inquiry pertaining to the scope and operations of the
CHIP in Rhode Island:
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g. income,
health status, demographics)?
Rhode Island operates a combined Medicaid/CHIP program for families,
pregnant women, and children through its RIte Care managed care
delivery system. RIte Care uses a medical home model centered on
providing the best evidenced-based practices in primary care.
As of September 30, 2014, an average of 20,803 of the children and
pregnant women enrolled in RIte Care received health coverage funded,
in whole or in part, by the CHIP. As we administer a joint Medicaid/
CHIP program, we use a single income eligibility for each RIte Care
population regardless of funding source. The Modified Adjusted Gross
Income (MAGI) eligibility limit for RIte Care children is at or below
261% of the federal poverty level (FPL); the MAGI limit for pregnant
women is at or below 253% of the FPL.
Since RIte Care was established 30 years ago, we have been providing
high-quality, affordable health care to Rhode Islanders who might
otherwise be uninsured. The CHIP has enabled Rhode Island to maintain
and, in some instances, expand RIte Care eligibility for children and
pregnant women at risk for poor health outcomes from regions all across
the state. On-going evaluations of RIte Care health plans show that
they are achieving positive health and utilization outcomes ranging
from low rates of emergency hospital admissions and preventable
hospitalizations, to fewer high-risk pregnancies and infant deaths,
declines in pregnant women who smoke and present with gestational
diabetes, and healthier newborns, infants, and children overall.
Rhode Island has one of the lowest rates of uninsured children in the
country (5.4% of children lacked insurance coverage in 2013). This low
rate of uninsured children is due, in a large part, to Medicaid/CHIP-
funded RIte Care coverage. Rhode Island's CHIP participation rate was
90.4% in 2012, higher than the national average of 88.1%. However,
Rhode Island still has room to improve. Approximately 71% of the
uninsured children in Rhode Island between 2010 and 2012 were eligible
for RIte Care based on their family income, but were not enrolled.
While some of these children mostly likely enrolled in 2014, we know
that we still have uninsured children in the community and CHIP is key
to helping us to finish the job of insuring kids.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers CHIP?
There have been several changes made to the RI CHIP as a result of the
Patient Protection and Affordable Care Act (PPACA). Each is outlined
below:
CHIP Claiming--A major impact of the PPACA was the loss of the state's
authority to claim CHIP funds for health coverage provided to RIte Care
families with incomes under 133% FPL. The loss of revenue from that
change forced the state, for financial reasons, to lower the Medicaid/
CHIP eligibility of parents and caretakers from 175% to 133% of the FPL
and shift them to our new health insurance marketplace--HealthSource RI
(HSRI). The state has offered these parents state-funded premium
assistance to help pay for the federally subsidized qualified health
plans (QHP) they can now purchase through HSRI.
MAGI Income Standard--The PPACA required all states to use the MAGI
methodology for determining income eligibility for Medicaid and CHIP
coverage. Beginning in 2014, Rhode Island eligibility levels for the
CHIP were revised upwards by 3 to 5% based on MAGI methodology.
Streamlined Access--The PPACA required states to simplify the
application process, coordinate enrollment between Medicaid/CHIP and
QHP coverage, and implement an electronic verification process to
ensure seamless access to coverage options. Rhode Island has made
significant progress in improving access in all these areas through our
new automated eligibility system. We now have a fully integrated and
interoperable system which uses a single on-line application for making
determinations for affordable coverage funded wholly or partially
through Medicaid/CHIP, federal tax credits and cost sharing reductions,
or employers.
Consumer Support--Rhode Island implemented enhanced consumer support
services as required by the PPACA in October of 2013. Implementation of
these new services in conjunction with our new unified eligibility
greatly improved RIte Care access and enrollment. For example, from
October 2013 to March 2014, an additional 12,000 children and parents
with CHIP-funded coverage enrolled in RIte Care managed care plans.
Elimination of Premiums--The coordination between Medicaid/CHIP and QHP
plans required by the PPACA posed operational and equity issues for
continuing RIte Care premiums. The state opted to eliminate RIte Care
premiums effective January 1, 2014 to: (1) reduce the likelihood of
premium stacking; and (2) provide an incentives for parents of RIte
Care eligible children to enroll in a QHP through HSIU if otherwise not
qualified for Medicaid coverage.
3. To the extent the following information is readily available and you
believe it is relevant, please describe the services and or benefits
and or cost-sharing currently provided in your state under CHIP that
are not comparably available through your state's exchange or through
the majority of employer sponsored health plans in your state.
At present, there are no commercial QHPs available in Rhode Island that
provide health care coverage comparable to the Medicaid/CHIP-funded
RIte Care plans when taking into account differences in the scope,
amount, and duration of benefits and cost-sharing obligations. RIte
Care enrollees have no cost-sharing or out-of-pocket costs.
Additionally, RIte Care plans provide a more extensive array of child-
specific services with fewer limits than QHPs. For many families,
especially those who have a child with disabilities, it is nearly
impossible to obtain comparable coverage to RIte Care plans at an
affordable cost even through subsidized HSRI plans.
There are two areas of coverage where the differences between RIte Care
and QHP plans is most pronounced due in large pan to federal Medicaid
and/or CHIP requirements: RIte Care enrollees must have access to
comprehensive pediatric dental coverage and any medically necessary
services deemed warranted as a result of Early Periodic Screening
Detection and Treatment (EPSDT) requirements. In Rhode Island, as in
most states, pediatric dental coverage and many EPSDT services are
either unavailable or unaffordable in the commercial health insurance
marketplaces. We do not anticipate that commercial or employer-
sponsored plans will provide coverage for these services for children
in the near future: most enrollees in these plans purchase them out-of-
pocket.
4. Do you recommend that CHIP funding be extended? If so, for how long,
and for budgeting and planning purposes, under what timeframe should
Congress act upon an extension? If you do not believe CHIP funding
should be extended, what coverage (if any) do you believe CHIP
enrollees in your state would be able to obtain? How many children
covered by CHIP do you estimate would become uninsured in the absence
of CHIP?
As stated at the outset of this letter, Rhode Island strongly supports
extending CHIP's funding and as soon as possible. The state is facing
significant budget pressures in the year ahead and most likely will be
unable to sustain Medicaid coverage at current eligibility levels for
certain populations if the CHIP is not re-authorized. The sooner
Congress passes legislation to extend CHIP funding, the less
uncertainty there will be and the more time states will have to ensure
critical coverage is not disrupted. Congress should also maintain the
scheduled 23 percent federal matching rate increase that goes into
effect next year. These enhanced matching funds will help states like
Rhode Island continue to provide high quality children's health
coverage, as they have since the CHIP was initially enacted. Rhode
Island also recommends that Congress extend CHIP funding at least
through 2019. The PPACA requires states to maintain current Medicaid
and CHIP eligibility levels for children until 2019. This Maintenance
of Effort (MOE) provision would apply to the nearly 20,000 RIte Care
children currently funded through CHIP.
If CHIP funding is not renewed, Rhode Island would lose the enhanced
CHIP match but still be required to maintain existing coverage levels
at the lower Medicaid FMAP under the MOE. As a result, Rhode Island's
federal financial support for coverage would decrease by the difference
between the CHIP and Medicaid match rates. For FY2014, Rhode Island's
CHIP-FMAP is 65.08 percent. The scheduled match increase would bring
Rhode Island's CHIP-FMAP to 88.08 percent. In comparison, Rhode
Island's FMAP for FY2014 is 50.11 percent.
It is essential that Congress act to reauthorize the CHIP in a timely
manner that takes into consideration the imperatives of state budget
cycles. If Congress delays taking action until FY2016, states like
Rhode Island face dire fiscal consequences: Rhode Island stands to lose
an estimated $28.19 million of annual federal CHIP dollars. Covering
any of this difference would be a challenge for our state, given
current and projected deficits. As roll-backs in eligibility for
children are not feasible, Rhode Island will have no option but to
reduce access to Medicaid coverage for adults, vulnerable elders and
persons with disabilities, most of whom will be unable to purchase
comparable affordable coverage through HSRI.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe the
annual allotments your state has received starting in 2009 have been
sufficient and the formula is working appropriately? Do you believe
there is a need for Congress to further address the issue of unspent
allotments?
The CHIP allotment for Rhode Island has not been sufficient. We are
among the states that regularly exhaust our CHIP allotment and receive
additional dollars (a total of millions) from other states that have
not done so. Although no new federal funds for allotments are slated
for FY2016, Rhode Island will continue to be able to draw on unspent
federal CHIP funds returned by other states, as long as they are
available, unless Congress develops a new allotment formula. Congress
may want to consider the option of increasing allotments to states like
Rhode Island which not only consistently use their complete allotment,
but achieve improvements in health access and outcomes that meet or
exceed the goals of the CHIP.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would improve
enrollment of eligible children, reduce the number of uninsured, and
improve health outcomes for children in your state?
Although Rhode Island has had some success on the enrollment front, we
are committed to providing every child in the state with access to high
quality health care. There are several strategies and federal policies
that could be implemented to facilitate access and improve health
outcomes. For example, Congress could allocate more resources to expand
services in high demand, such as pediatric dental coverage, by
providing an enhanced federal match.
Congress may also want to consider providing states like Rhode Island
that operate combined Medicaid/CHIP programs and/or utilize their full
allotments with additional flexibility. Combined programs are bound to
follow Medicaid rules and this prevents states from using the
flexibility provided in the CHIP authorizing statute to tailor benefit
packages to meet the changing needs of the children we enroll. In Rhode
Island, additional flexibility would allow us to focus on high demand
but short supply service areas like behavioral health and to develop
new design, delivery and payment approaches that more effectively
leverage and integrate federal and state dollars, promote population
health, and recognize the whole range of social supports kids need to
start and stay healthy--e.g., stable families, housing, food security,
etc.
Conclusion
I urge you to extend CHIP funding as soon as possible. CHIP is
essential to assuring that we do not lose ground on children's coverage
in Rhode Island and as a nation.
Thank you for the opportunity to respond to these important questions.
Please contact me or any member of my staff should you have any
questions.
Sincerely,
Lincoln D. Chafee
Governor, State of Rhode Island
cc: Steven Costantino, Secretary, Executive Office of Health and Human
Services
David Burnett, Deputy Director, Executive Office of Health and
Human Services
Deidre Gifford, Medicaid Director, Executive Office of Health and
Human Services
Deborah Florio, CHIP Director, Executive Office of Health and
Human Services
Jacqueline Kelley, Esquire, Executive Office of Health and Human
Services
______
STATE OF SOUTH DAKOTA
Dennis Daugaard, Governor
State Capitol 500 East Capitol Pierre, South Dakota 57501-5070
605-773-3212
October 28, 2014
The Honorable Fred Upton
Chairman
Committee on Energy and Commerce
U.S. House of Representatives
2125 Rayburn House Office Building
Washington, DC 20515
Dear Chairman Upton,
Thank you for the opportunity to provide information about the
Children's Health Insurance Program (CHIP) reauthorization. CHIP
provides insurance coverage to over 12,500 low-income children in South
Dakota, and I strongly support continued funding for this program.
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state?
There were 12,519 children enrolled in the CHIP program during
our State Fiscal Year 2014 (July 1, 2013-June 30, 2014). Eighty
percent of the children are age six years or older. The vast
majority of children are at lower incomes with 77%, with income
less than 182% of the federal poverty level ($43,407 annually
for a family of four).
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act (PPACA)? How
has the implementation of PPACA impacted the way your state
administers CHIP?
South Dakota implemented the required PPACA changes including the
federal poverty level conversion, modified adjusted gross
income (MAGI) eligibility methodologies, use of the federally
required streamlined application to include tax filer
information for other Insurance Affordability programs and
Qualified Health Plans, and telephonic application capability.
Although CHIP funding expires in September 30, 2015, the CHIP
program remains authorized and states may use unspent portions
of their FFY15 allotments. In addition, the PPACA also
increased the enhanced Federal Medical Assistance Percentage
(FMAP) available to states for CHIP programs by 23% beginning
in FFY16. Unless CHIP allotments are increased, this will speed
up the rate at which states spend their allotments resulting in
potential funding shortfalls. The PPACA also added a
Maintenance of Effort (MOE) provision and states must maintain
Medicaid and CHIP eligibility standards, methodologies, and
procedures that are no more restrictive than those in effect
March 23, 2010. An exception to the MOE requirement includes
the lack of federal CHIP funding.
Despite these changes, the Centers for Medicare and Medicaid
Services (CMS) maintain the implementation of PPACA would not
result in significant reductions to the CHIP program. However,
South Dakota continues to experience a significant shift of
children from the CHIP program where services are paid at the
enhanced federal match rate to Medicaid where services are
funded at the regular Federal Medical Assistance Percentage
(FMAP). From December 2013 to August 2014, we saw a decrease of
1,833 children (-13.4%) in the CHIP program. During this same
time period, our Title XIX children have increased by 2,647
(4.1%). This is the opposite trend we saw in the six months
prior to PPACA implementation. From June 2013 to November 2013,
we saw an increase of 604 (4.6%) CHIP recipients while our
Title XIX children recipients were decreasing by 1,414
recipients (-2.1%).
South Dakota expressed concern with CMS in March 2013 when the
poverty level conversions were first provided. We began to see
a significant reduction to our CHIP program in January 2014
when the new federal poverty levels were implemented. At the
end of April, we saw 19% fewer children enrolled in the CHIP
program and an offsetting increase to children enrolled in
Medicaid. In April, after continued discussions with CMS, CMS
agreed to adjust the federal poverty levels by approximately
30%. While we were pleased with this adjustment, we continue to
see a shift from CHIP to Medicaid for children. Our latest
numbers through August 2014, after adjusting the federal
poverty levels, reflect a 13.5% reduction in CHIP enrollment.
The result is a cost shift from the federal government to our
state. In addition, although the state has successfully been
able to send and receive applications to and from the Federally
Facilitated Marketplace (FFM), the FFM is unable to check for
existing Medicaid/CHIP eligibility causing applications to be
sent to the state to process even though the applicant is
already eligible for Medicaid/CHIP. Significant administrative
effort was expended in assisting individuals and families who
were ``stuck'' in the FFM process. The MAGI methodologies,
while simplified, also require increased effort to determine
eligibility individually rather than a single determination per
household. The PPACA related federal reporting requirements are
yet to be determined.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
South Dakota operates CHIP as a Medicaid look-alike program,
where all Medicaid benefits are extended to individuals
eligible for CHIP. In addition to the essential health benefit
offered through the marketplace plans, children eligible for
CHIP have access to the Early and Periodic, Screening,
Diagnosis, and Treatment (EPSDT) benefit. The EPSDT benefit
allows South Dakota to provide medically necessary services to
children outside of the scope of the normal services under the
Medicaid or CHIP State Plan and those offered through the
marketplace plans. No similar benefit is available from private
health plans where children are only eligible to receive
services within the limits imposed by the plan.
Some of the children who would lose coverage if CHIP is not
funded will not be eligible for tax credits through the federal
marketplace because a parent may have access to employer
sponsored coverage. However, the affordability test for
employer coverage is based on a calculation of the individual
coverage relative to a workers wages, not the cost of a family
policy. This situation is referred to as the ``family glitch''
and could leave more children uninsured.
While families at or above 100% Federal Poverty Level (FPL) are
eligible to apply for subsidies and enroll in health plans
offered through the exchange, the cost sharing, premiums, and
out of pocket costs for plans available through the marketplace
are at levels most low-income families on the CHIP program
cannot afford. For example, a family at 183% FPL ($43,656
annually for a family of four) would be eligible to apply for
the average silver plan through the marketplace at an average
net monthy cost after subsidy of $174 per month. Additional
premiums ranging from $6 up to $38 per dependent would apply
and the out of pocket costs for the family plan would double
from $2,750 to $5,500 by adding additional dependents. In
addition, if CHIP were eliminated, parents with employer
sponsored health insurance with a cost under 9.5% of their
income would not be eligible for subsidy and would bear the
full cost of the premium. Because families are not required to
pay a premium for CHIP coverage and children under age 21 in
South Dakota are exempt from cost sharing, these increased
costs may result in reduced access to essential healthcare
services for children. Preventative care, including preventive
oral health care has direct impacts on longer term health and
avoiding higher cost care.
4. Do you recommend that CHIP funding be extended? It so, for how
long, and for budgeting and planning purposes under what
timeframe should Congress act upon an extension? If you do not
believe CHIP should be extended, what coverage, lf any, do you
believe CHIP enrollees in your state would be able to obtain?
How many children covered by CHIP do you estimate would become
uninsured in the absence of CHIP?
We recommend that the CHIP funding be extended indefinitely and
Congress should act on the extension of the CHIP as soon as
possible to ensure there are no gaps in federal funding for the
program. The South Dakota legislature will act on my fiscal
year 2016 recommended budget in March of 2015. The status of
South Dakota's current $20.0 million dollar federal CHIP award
is a critical component of our Medicaid budget. Currently,
South Dakota utilizes CHIP funding for Medicaid eligible
children who are uninsured and whose income is between 111% and
182% of the federal poverty level (over 9,200 children). If
CHIP funding ends, South Dakota will be required to cover these
children at the regular FMAP rate at an additional cost of $3.0
million in state funds due. South Dakota also utilizes CHIP
funding for uninsured children whose family income is between
182% FPL and 204% FPL (over 2,660 children). If CHIP funding
ends, these children will lose coverage altogether as there is
no Medicaid coverage group for them.
In addition to funding benefits, CHIP is used to fund $1.0
million annually in administrative costs, primarily for program
eligibility determination staff. The loss of CHIP funding would
result in an annual state general fund impact of $160,000.
5. In spite of restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
The redistribution of CHIP funding in 2009 was critical for South
Dakota. Prior to the redistribution, South Dakota1s annual
expenditures for children eligible for CHIP exceeded our CHIP
allotment. The redistribution increased our allotment by $10.0
million, which aligned our award closer to our annual
expenditures for children eligible for CHIP, avoiding a budget
impact to the state or reducing eligibility levels for the
program. The enhanced FMAP rates of 23% for CHIP under the
PPACA will provide state general fund savings. However, if CHIP
allotments are not increased, South Dakota will not have
adequate CHIP federal funds to support annual expenditures,
resulting in a shift of children to the Medicaid program at the
regular FMAP rate. Congress should adjust CHIP federal
allotments commensurate with the 23% enhanced matching rate for
CHIP.
6. Over the past number of years, states have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
of enrolling eligible children?
South Dakota has a high penetration rate relative to CHIP and
Medicaid coverage for children. Continued funding for the CHIP
program offers a strong financial incentive for continued
efforts to enroll children where services will be paid at a
match rate almost 15% higher than South Dakota's regular FMAP
rate.
7. What other policy changes, if any, would help improve enrollment
of eligible children, reduce the number of uninsured, and
improve health outcomes for children in your state?
The ability of the Federally Facilitated Marketplace (FFM) to
verify Medicaid and CHIP eligibility must be resolved to avoid
children being ``stuck'' in the FFM process and unnecessary
duplication of effort by state resources.
I encourage Congress to act quickly to appropriate funding for the CHIP
program so that low-income children in South Dakota continue to have
insurance coverage.
Sincerely,
Dennis Daugaard
______
State of Tennessee
Bill Haslam
Governor
State Capitol Nashville, TN 37243-0001 PH: 615-714-2001
www.tn.gov
October 31, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2125 Rayburn Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2322A Rayburn House Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
Dear Chairman Upton, Ranking Member Waxman, Chairman Wyden, Ranking
Member Hatch:
The purpose of this letter is to respond to your questions regarding
the reauthorization of the Children's Health Insurance Program (CHIP),
for which funding ends at the end of Fiscal Year (FY) 2015.
CHIP is a successful program providing healthcare coverage for
children, but as a result of the PPACA, CHIP reauthorization must now
be considered carefully within the context of overlapping, government-
subsidized healthcare coverage programs. The PPACA has increased health
care coverage silos, which reduce efficiency, increase member churning
across arbitrary eligibility boundaries, and cause families to be split
across different plans due to the eligibility status of individual
family members.
Tennessee is looking for opportunities to streamline and simplify
eligibility. I believe children covered by the CHIP program will have
access to alternative coverage options that offer comparable services
in the future. However, I do not believe that there is enough time to
adequately consider and implement policy changes before federal funding
for the CHIP program ends next year. Therefore, I recommend CHIP
financing be extended for at least two years, through Federal FY 2017.
In addition, states' maintenance of effort requirement, currently in
effect through September 30, 2019, should end if the current level of
federal participation in CHIP ends.
Below are detailed responses to your July 29, 2014 letter regarding
Tennessee's experiences with the CHIP program.
Sincerely,
Bill Haslam
Governor
cc: Darin Gordon, Deputy Commissioner, Department of Finance and
Administration
Brooks Daverman, Director of Strategic Planning and Innovation
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g., income, health status, demographics)?
Tennessee's CHIP program is a ``Combination'' program with two
components that provide coverage to approximately 88,000
children using Title XXI funds.
Approximately 68,000 children are covered through Tennessee's
stand-alone CHIP program called CoverKids. Of these, about 45
percent are below 150 percent FPL, 38 percent are between 150
and 200 percent FPL, and 18 percent are between 200 and 250
percent FPL. Over three-fourths of children in the CoverKids
program are between the ages of 6 and 18. Less than 5 percent
are unborn children.
Approximately 20,000 CHIP enrollees are served through the
TennCare program. Nearly 9 out of 10 children in this group
have incomes below 150 percent of the FPL. Over three fourths
are between the ages of 6 and 18. About 70 percent are White,
while 13 percent are Hispanic and 12 percent are Black/African
American.
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Tennessee has made a number of changes to its CHIP program as the
result of the PPACA. These include the following;
Tennessee eliminated our state-funded ``buy in'' CHIP
eligibility category for families over 250 percent of the
federal poverty level as of January 1, 2014. This category
included children with family incomes above the maximum set
by CHIP in Tennessee. With the availability of subsidized
insurance through the federal Marketplace, the state no
longer needed to subsidize the coverage of children who
were above the income level for CHIP in Tennessee.
Tennessee eliminated the three month ``go bare'' period,
requiring children to be uninsured for three months before
becoming eligible for CHIP. As a result of the PPACA's
guaranteed issue requirement, this policy was no longer
relevant.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and/or
benefits and/or cost-sharing currently provided in your state
under CHIP that are not comparably available through your
state's exchange or through the majority of employer sponsored
health plans in your state.
While we do not have a detailed comparison of benefits for any
particular plan, we know that the benefits offered by our CHIP
program are roughly comparable to those offered by Qualified
Health Plans (QHPs) in the federal Market place. However, cost
sharing is lower in CHIP than in most, if not all, QHPs
currently offered in the Marketplace. There are no premiums or
deductibles required of CHIP children, as there are of
individuals enrolled in a QHP, and CHIP copays are relatively
modest. The actuarial value of Tennessee's CHIP plan is between
90 and 95 percent which is slightly higher than a platinum
level plan available in the Marketplace.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what
timeline should Congress act upon an extension? If you do not
believe that CHIP funding should be extended, what coverage:
(if any) do you believe CHIP enrollees in your state would be
able to obtain? How many children covered by CHIP do you
estimate would become uninsured in the absence of CHIP?
We recommend that CHIP financing be extended for at least two
years until alternative policy options can be fully considered.
One alternative for CHIP enrollees is subsidized coverage
available through the federal Marketplace. Certain policy
changes will need to take place before states can move freely
in this direction.
Currently the rules of the Department of the Treasury do not
allow the children of an employee to access the federal
Advanced Premium Tax Credits if the employee is offered
affordable employer-sponsored health insurance. However, the
affordability test does not take into consideration the cost of
family coverage, only individual coverage. Tennessee will be
unable to support covering currently CHIP-eligible children
through the federal Marketplace until the Department of the
Treasury issues an update to the Health Insurance Premium Tax
Credit final rule (2012) so that children can be eligible for
federal premium assistance tax credits in families where
affordable employer-sponsored coverage is available for only
the employee.\1\ A change to this rule would allow more
families to stay on the same plan and receive subsidized
private coverage through the federal Marketplace. We believe
the Health Insurance Premium Tax Credit rule should be updated
before funding for CHIP ends.
---------------------------------------------------------------------------
\1\ 26 CFR Sec. 1.36B-2(c)(3)(v)(A)(2), Eligibility for premium tax
credit, Federal Register Vol. 77, no. 100, http://www.gpo.gov/fdsys/
pkg/FR-2012-05-23/pdf/FR-2012-05-23.pdf.
In addition, the PPACA's maintenance of effort requirement on
states for their CHIP program needs to be modified to reflect
any changes to the program. As long as the maintenance of
effort requirement remains part of federal law, we cannot
consider any changes that affect CHIP.\2\ After these changes
are made, states will be able to further consider policy
options regarding the CHIP program.
---------------------------------------------------------------------------
\2\ PPACA; Public Law 11-148; 2101(b), Additional federal financial
participation for CHIP.
If comparable, affordable QHP coverage is available for families
in the Marketplace, we believe that the QHP coverage should be
considered as a potential coverage option for uninsured
---------------------------------------------------------------------------
children in the state if CHIP were not continued.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
We believe Tennessee's federal allotment for CHIP will be
sufficient for FY 2015.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
enrolling eligible children? What other policy changes, if any,
would help improve enrollment of eligible children, reduce the
number of uninsured, and improve health outcomes for children
in your state?
We believe that federal policies should be targeted to
streamlining and simplifying the eligibility policies of
various programs. CHIP, Medicaid, and the Health Insurance
Marketplaces have been layered on top of each other, creating
duplicative coverage silos, each with their own benefit and
eligibility rules. Duplication of programs reduces efficiency,
increases member confusion, and causes beneficiaries' to
``churn'' across arbitrary eligibility boundaries as their age
and income change. Many families are now split among coverage
programs, such as families with children in CHIP and adults
covered on the Marketplace. In order to be more customer-
focused and relevant to meeting the needs of low-income
families, federal health policy and program eligibility must be
simplified.
______
The State of Texas
Office of the Governor
Post Office Box 12428, Austin, Texas 78711 (512) 463-2000 (Voice)/Dial
7-1-1 for Relay Services
Visit www.TexasOnline.com the Official Web Site of the State of Texas
Rick Perry
Governor
October 31, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2183 Rayburn House Office Building 221 Dirksen Senate Office Building
Washington, D.C. 20515 Washington, D.C. 20510
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2204 Rayburn House Office Building 104 Hart Senate Office Building
Washington, D.C. 20515 Washington, D.C. 20510
Dear Chairmen Upton and Wyden and Ranking Members Waxman and Hatch:
I appreciate the opportunity to provide Congress with feedback
regarding the Children's Health Insurance Program (CHIP), which
provides health insurance coverage for certain uninsured children.
States possess valuable insights on the efficacy and efficiency of CHIP
given that they implement the program and see firsthand the impact of
the Affordable Care Act (Obamacare).
The Texas Legislature passed legislation in 1999 creating CHIP,
separate from Medicaid. Texas provides services for children of
families with income at or below 200 percent of federal poverty level
(FPL). Figures provided by the Texas Health and Human Services
commission (HHSC) show that in FY 2014, Texas CHIP served 524,658
children. Of that:
60.9 percent of recipients are ages 6-14;
22.3 percent are ages 15-18;
16.7 percent are ages 1-5; and
0.1 percent of recipients are younger than one.
In terms of income in FY14:
55.9 percent have incomes between 100-150 percent FPL;
30.9 percent have incomes between 151-185 percent FPL;
6.7 percent have incomes between 186-200 percent FPL; and
6.5 percent of recipients have incomes below 100 percent FPL.
Texas CHIP provides a variety of services to its recipients, including
preventive health, dental, vision, mental health and hospital services.
Texas requires certain CHIP families to pay an annual enrollment fee to
cover all children in the family. Qualifying families must also pay co-
pays for doctor visits, prescription medications, inpatient hospital
services and non-emergent services in an emergency room setting.
Additional information can be found here:http://www.hhsc.state.tx.us/
medicaid/about/PB/10_PB_9th_ed_Chapter9.pdf.
As a consequence of Obamacare, Texas has seen a significant number of
children moved from CHIP into Medicaid. Though Obamacare provides for
enhanced matching rate for this CHIP-to-Medicaid population, these
enhanced federal funds diminish over time--shifting costs to the
states.
Moving additional people into Medicaid is particularly significant
given that Obamacare exacerbates problems with a broken Medicaid
program. For example, Obamacare prevents states from using common-sense
tools, including asset testing, to ensure that Medicaid is preserved
for those individuals most in need. Furthermore, Obamacare taxes
Medicaid to help fund private insurance subsidies for individuals who
earn more than Medicaid recipients. In other words, Obamacare makes it
more expensive for both federal and state governments--and ultimately
the American taxpayer--to operate Medicaid, providing absolutely no
benefit to the program or its recipients. As I explained in a recent
letter to Congressman Elijah Cummings, current state and federal
Medicaid expenditures are unsustainable. Obamacare only compounds that
problem.
Additionally it's important to point out characteristics of CHIP that
differentiate the program--for the better--from Medicaid. For example,
states receive federal matching funds for CHIP through allocations that
function in a manner very similar to block grants. States have
considerably more flexibility in operating their CHIP programs than
Medicaid programs. Such flexibility empowers states to better serve
their unique CHIP populations. States have the ability to implement
reasonable cost-sharing and enrollment measures that help ensure
appropriate utilization of services, emphasize preventive care and
encourage active participation in health care decisions.
Absent much needed comprehensive Medicaid reform, Congress should
implement in Medicaid those initiatives that have proven to be
effective and beneficial to CHIP and recipients.
As for the reauthorization of CHIP, given that there appears to be no
immediately viable alternative proposed for covering existing CHIP
recipients, Congress should act to reauthorize CHIP prior to the
expiration of funding in 2015. The sooner action is taken, the more
predictability and stability Congress will provide to state
appropriators.
Please do not hesitate to contact my office or HHSC for any additional
information.
Sincerely,
Rick Perry
Governor
______
State of Utah
Office of the Governor
Salt Lake City, Utah
84114-2220
Gary R. Herbert Spencer J.
Cox
Governor Lieutenant
Governor
November 5, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
Committee on Energy and Commerce Committee on Finance
U.S. House of Representatives U.S. Senate
Washington, D.C. 20515 Washington, D.C. 20510
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
Committee on Energy and Commerce Committee on Finance
U.S. House of Representatives U.S. Senate
Washington, D.C. 20515 Washington, D.C. 20510
Dear Chairman Upton, Chairman Wyden, Representative Waxman, and Senator
Hatch:
I am grateful for the opportunity to provide you with feedback
regarding Utah's position on funding for the Children's Health
Insurance Program (CHIP). The bottom line is that the CHIP has
decreased the number of uninsured children in our state and that there
remains a need for the CHIP until low income working families have a
viable alternative to providing care for their children. Furthermore,
Americans would be well-served by a federal government that provides
maximum flexibility to states to provide services to their residents in
the most efficient and effective ways possible.
In an attempt to be responsive to your inquiry, I have asked
Michael Hales, director of Medicaid and Health Financing in Utah, to
answer your specific questions on our state's behalf. His response is
attached.
Thank you for your attention to this important matter. We
appreciate your outreach on the CHIP and any other issues that have a
substantial impact on Utah.
Sincerely,
Gary R. Herbert
Governor
Utah Department of Health
288 North 1460 West Salt Lake City, UT
Mailing Address: P.O. Box 143101 Salt Lake City, UT 84114-3101
Telephone (801) 538-6689 Facsimile (801) 538-6478
www.health.utah.gov
W. David Patton, Ph.D.
Executive Director
Division of Medicaid and Health Financing
Michael Hales
Deputy Director, Utah Department of Health
Director, Division of Medicaid and Health Financing
November 5, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
Committee on Energy and Commerce Committee on Finance
U.S. House of Representatives U.S. Senate
Washington, D.C. 20515 Washington, D.C. 20510
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
Committee on Energy and Commerce Committee on Finance
U.S. House of Representatives U.S. Senate
Washington, D.C. 20515 Washington, D.C. 20510
Dear Chairman Upton, Chairman Wyden, Representative Waxman, and Senator
Hatch:
At the request of Governor Herbert, Utah's CHIP team has compiled the
following information. We hope you find it responsive to your
inquiries. We stand ready to provide any additional information that
you may need. Thank you for your outreach and consideration of Utah's
experience.
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics)?
Utah's Response: The implementation of PPACA had a significant impact
on the CHIP in Utah. Utah was one of three states in the nation, which
had an asset test for Medicaid eligibility for children ages 6-18 prior
to 2014. PPACA not only raised the eligibility income level for
Medicaid children but also required the elimination of any asset test
for Medicaid children. Prior to the implementation of PPACA, Utah
averaged about 34,000 children per month on CHIP. With the
implementation of PPACA, the number of children on Utah's CHIP has
dropped to an average of 15,000 per month and it continues to be an
important program for the children of Utah.
Before implementation of PPACA, children with household incomes from 0
to 200 percent of the federal poverty level (FPL) could be eligible for
Utah CHIP. The program was broken out into three plans: Plan A for
family incomes between 0-100 percent FPL, Plan B for family incomes
between 101-150 percent FPL, and Plan C for family incomes between 151-
200 percent FPL. Plan A existed primarily because Utah had an asset
test for Medicaid children ages 6 to 18, but did not have an asset test
for CHIP. Consequently, children ages 6 to 18 with family incomes under
the poverty level enrolled in CHIP, rather than Medicaid. It was not
uncommon to have younger children (under age 6) on Medicaid and older
children on CHIP in a single household. Since the implementation of
PPACA earlier this year, Utah CHIP eligibility covers children in
families whose income is between 133 percent FPL and 200 percent FPL.
CHIP Plan A was eliminated--leaving a modified Plan B (133-150 percent
FPL) and Plan C (151-200 percent FPL).
The majority of CHIP families have earned income. Children in these
families are eligible for CHIP either because they have no health
insurance coverage available through an employer or because the costs
of the employee's share of coverage is unaffordable. Utah's CHIP
applies a test of five percent of gross annual income to determine if
the cost of coverage is reasonable.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers
CHIP?
Utah's Response: As indicated above, PPACA changed the eligibility
income levels for Medicaid and removed the asset test for children.
This resulted in a significant reduction in the number of children on
the stand-alone CHIP in Utah. However, since the children who
transferred from CHIP to Medicaid are still eligible for the enhanced
FMAP available under CHIP, Utah has had to implement a more complex
expenditure tracking model to claim the enhanced FMAP on the CHIP
children who transferred to Medicaid. The implementation of PPACA
required significant changes in eligibility requirements for both
Medicaid and CHIP, taking away much of the flexibility Utah previously
had in determining eligibility for CHIP. With regard to benefits and
service delivery, Utah's process remains largely unchanged.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and/or
benefits and cost sharing provided in your state under CHIP that
are not comparably available through your state's exchange or the
majority of employer sponsored health plans in your state.
Utah's Response: By state law, Utah's CHIP benefit is benchmarked
against the HMO with the largest commercial, non-Medicaid enrollment in
the state. Therefore, the benefits available to Utah CHIP children are
very much like benefits offered in a silver plan available in the
commercial market with a couple of exceptions. Utah does not operate an
individual plan exchange. Utah has an agreement with the federal
government to operate a federally facilitated exchange for the private
individual market in our state. In addition, Utah operates a small
employer exchange, known as ``Avenue H.''
As a stand-alone program, CHIP cost sharing includes co-payments,
coinsurance, and premiums and is limited to five percent of the
family's annual gross income. Cost-sharing reductions for families on
the exchange are limited to 94 percent actuarial value (AV) for 100-150
percent FPL and 87 percent AV for 150-200 percent FPL. Even though the
cost-sharing reductions create a plan that limits average out of pocket
costs, the costs facing a family with a severe medical issue could
easily exceed the CHIP five percent of income standard. If CHIP is
eliminated, CHIP families will experience greater out-of-pocket costs
in the marketplace.
Second, a significant number of Utah CHIP families work for small
employers. Under PPACA, if the employee's share of premium for the
employee's coverage (not family coverage) is less than 9.5 percent of
the annual gross household income, the family is not eligible for
advanced premium tax credits to purchase private coverage instead of
getting coverage at work. This issue is commonly known as the ``family
glitch.'' If CHIP is no longer available, former Utah CHIP families
will be subject to higher cost sharing, and many will likely not be
eligible for tax credits to help defray the cost of family coverage.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe CHIP
funding should be extended, what coverage (if any) do you believe
CHIP enrollees in your state would be able to obtain? How many
children covered by CHIP do you estimate would become uninsured in
the absence of CHIP?
Utah's Response: Any change to the existing CHIP will impact Utah's
budget for state fiscal year 2016. State appropriations for this period
will be determined by mid-March 2015. Therefore, it is imperative that
Congress act soon to make a decision on this issue. Thousands of Utah
children will be impacted. Utah and other states cannot wait until the
last minute to transition these families or make substantive changes to
Utah CHIP and the data systems that support this program. As mentioned
earlier, Utah administers benefits for CHIP through contracts with
private entities that will also be significantly impacted by any
change. Most importantly, Utah children with chronic or emergent
conditions could go without care because of a lack of action on this
issue.
At a minimum, states must know whether or not the CHIP will continue,
and whether or not changes will be made to the program or funding for
the program at least six months in advance of any change. That being
said, Utah supports extending the CHIP for at least two years, and
preferably for four years, to allow time to address any outstanding
issues with the federal market place and the availability of subsidies.
In addition, other changes should be made to federal law to address
state concerns.
Utah has identified the following issues of concern that need to be
addressed in the CHIP:
1. Continuing issues with the Healthcare.gov web site and remaining
issues with the interface between the federal government and
the state need resolution.
2. Federal law should be changed to resolve the ``family glitch.''
3. The CHIP needs ongoing funding, or the federal law regarding the
Maintenance of Effort (MOE) must be modified to delink the CHIP
from Medicaid and provide states with flexibility on this
issue.
4. Federal law should allow states to use the commercial market with
the assistance of premium subsidies as the primary service
delivery system for the CHIP.
Utah continues to have approximately 55,000 uninsured children, who
appear to be eligible for public programs based on their income. It is
difficult to determine exactly why these children remain uninsured.
Some parents choose not to access public programs. Many do not seek
coverage while their children are healthy. Others may be children of
mixed immigration status households, which hesitate to seek assistance
for other reasons. If the CHIP is eliminated, Utah anticipates the
number of uninsured children in the state will increase.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received in 2009 have been
sufficient and the formula is working appropriately? Do you believe
there is a need for Congress to further address the issue of
unspent allotments?
Utah's Response: Utah has no concerns with the CHIP allotments or the
formula used to determine those amounts. We have been able to manage
our program effectively under the current allotment formula.
6. Over the past number of years, states have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other changes, if any, would help improve
enrollment of eligible children, reduce the number of uninsured and
improve the health outcomes for children in your state?
Utah's Response: We recognize that many changes were made in an effort
to streamline eligibility for Medicaid and the CHIP. PPACA also
intended to make the commercial market place more accessible to all.
Unfortunately, many of the changes brought about by PPACA did anything
but simplify the enrollment process. A part of the concern is the
prescriptive nature of the law and the lack of flexibility for states.
The issues with the federal marketplace are also well known.
In addition, there needs to be a more seamless way to address churn for
lower income families. Relatively small, but often frequent, changes in
income can cause these families to move from the market place to public
programs and back again. Utah would like to see more flexibility in the
CHIP to allow broad use of Title XXI funding to provide premium
subsidies to families to keep them in the commercial marketplace, even
when their income drops to CHIP income eligibility level. This not only
allows families to stay in the same health plan together but it also
allows families to stay with the same provider network, which minimizes
disruption in services and promotes continuity of care.
It is imperative that Congress act quickly but thoughtfully on the
determination of the future of the Children's Health Insurance Program.
Thank you for consideration of our input. We look forward to continued
dialogue on this issue.
Sincerely,
Michael Hales
Deputy Director, Department of Health
Director Medicaid and Health Financing
______
PETER SHUMLIN
Governor
State of Vermont
OFFICE OF THE GOVERNOR
109 STATE STREET THE PAVILION MONTPELIER, VT 05609-0101
www.vermont.gov
TELEPHONE: 802.828.3333 FAX: 802.828.3339 TDD: 802.828.3345
October 14, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2125 Rayburn House Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510-6200
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2125 Rayburn House Office Building 219 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510-6200
RE: Children's Health Insurance Program (CHIP)--Vermont
Dear Chairmen and Ranking Members:
In response to your recent inquiry, I have asked my Vermont Agency of
Human Services to compile answers to your six questions regarding the
Children's Health Insurance Program (CHIP), including an assessment of
impact should federal funding for the program end at the close of the
2015 federal fiscal year. We appreciate the opportunity to provide
Vermont's perspective. Please find our responses below.
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g.
income, health status, demographics)?
Vermont has a longstanding commitment to providing coverage for all
children. In Vermont, CHIP is operated as part of Dr. Dynasaur,
the umbrella name for state sponsored children's health
insurance, which includes Medicaid and CHIP. In 1989, Dr.
Dynasaur was created as a state-funded program that extended
coverage for children under age 7 to 225% FPL. In 1992,
coverage was expanded to children up to age 18.
In 2013, CHIP served 7,393 children ages 0-19, with a family income
between 237% and 312% of federal poverty level. Vermont is a
rural state with 67% of the population living in rural areas.
In the most rural areas of the state over 60% of the population
is eligible for Medicaid. Vermont's population is 97% white,
with 3% from a variety of racial and ethnic backgrounds.
The 2012 Vermont Household Health Insurance Survey reported that
51.0% of Vermont's 111,257 children under 18 had private
insurance, 43.4% had coverage through Dr. Dynasaur (Medicaid/
CHIP), and 2.5% were uninsured. The rate of uninsured children
has steadily declined from 4.9% in 2005. Between December of
2013 and April of 2014, Vermont saw an increase of 3,655
children enrolling in Dr. Dynasaur.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of the PPACA impacted the way your state administers
CHIP?
As a result of the PPACA, changes to CHIP in the state of Vermont
include the transition to a modernized application process
through Vermont's state-based insurance marketplace, Vermont
Health Connect, and conversion of income eligibility to a
simplified MAGI based methodology. In addition to PPACA
requirements, Vermont took advantage of other provisions
including moving the administration of the CHIP program under
the Medicaid State Plan. Benefits through the CHIP program
continue to be the same as those offered in Vermont's Medicaid
program.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
benefits and or cost sharing currently provided in your state under
CHIP that are not comparable available through your state' s
exchange or through the majority of employer sponsored health plans
in your state.
The services and benefits offered through the state's exchange are
comparable to the CHIP benefit. Medicaid services include
comparable essential health benefits. Vermont covers up to 138%
FPL for adults under Medicaid and up to 312% for children in
CHIP and in families with other insurance.
The state of Vermont receives close to $8 million in federal funds
annually to provide coverage for the CHIP population and to
support Vermont's early expansion of Medicaid coverage for
children. In the absence of federal funding for CHIP,
Vermonters would face significant hardship, as the state would
not be able to supplement the full loss of the enhanced federal
match until the CHIP authorization ends in 2019. At that time
states can maintain coverage or shift coverage to plans offered
through the exchange. For a single parent with a child out of
pocket costs on the exchange range from $180-$628 per month.
This is a substantial increase from the $60 a month premium for
CHIP.
4. Do you recommend that CHIP funding be extended? If so, for how
long, and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe that
CHIP funding should be extended, what coverage (if any) do you
believe CHIP enrollees in your state would be able to obtain? How
many children covered by CHIP do you estimate would become
uninsured in the absence of CHIP?
The state of Vermont strongly recommends that CHIP funding be
extended through the federal Title XXI authorization period to
2019. Failure to extend CHIP funding would result in a
significant financial burden to the State, could result in many
children becoming uninsured and would increase the cost of
coverage for many who would remain insured. Continued funding
would also allow states time to plan for a transition if needed
and to assure that children will receive continued coverage.
The elimination of CHIP funding in 2015, will have a financial
burden to the state. CHIP authorization requires Medicaid
Expansion states including Vermont, to maintain the current
level of coverage through 2019. Even with unspent funds from
prior years, federal estimates indicate that CHIP will run out
of money early in FY2016. The state will have to subsidize the
loss of enhanced match. As state budgets are increasingly
tight, this could mean the elimination of services for state
funded programs outside of CHIP. Vermont relies on the enhanced
federal match to provide healthcare coverage for CHIP enrolled
children.
Elimination of CHIP will also have a detrimental effect on coverage
for children in 2019. CHIP is an extremely successful program
significantly increasing children's coverage in Vermont and
across the nation. In the absence of CHIP, enrollees could
obtain coverage through the state's marketplace, Vermont Health
Connect, however there is potential for over 7,000 children to
become uninsured. Depending on the plan they choose, families
would have to pay higher premiums, deductibles and co-pays.
This places an increased financial hardship on families,
regardless of whether or not they are eligible for a subsidy.
Nationally, CHIP covers more than 8 million low-income children,
CHIP and Medicaid combined cover more than 1 in every 3
children in the United States. Research indicates that for
families below 150% FPL a premium increase to $120 is
associated with a 5% increase in uninsured children.\1\
---------------------------------------------------------------------------
\1\ Salam Abdus, Julie Hudson, Steven C. Hill and Thomas M. Selden,
Children's Health Insurance Program Premiums Adversely Affect
Enrollment, Especially Among Lower-Income Children, Health Affairs, 33,
no. 8 (2014):1353-1360.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe
the annual allotments your state has received starting on 2009 have
been sufficient and the formula is working appropriately? Do you
believe there is a need for Congress to further address the issue
---------------------------------------------------------------------------
of unspent allotments?
The 2009 restructuring and retargeting of allotments has improved
the state of Vermont's ability to spend down the state's
allocation. The formula change allows Vermont to receive full
compensation based on funds expended. In FY 13, Vermont had
less than 1% in unspent funds.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job of enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children reduce the number of the
uninsured, and improve health outcomes for children in your state?
As state budgets are increasingly tight, there is no guarantee that
states will be able to maintain coverage for children beyond
2019, without federal appropriation. Continued federal support
that would increase enrollment includes augmenting the state's
ability to identify and enroll children who are eligible for
CHIP or Medicaid but have not enrolled through incentives and
funding for outreach.
Other policies to support health outcomes include providing
incentives to states to increase evidence-based practices in
primary care for children, supports for analyzing pediatric
quality measures, and linking quality measures to clinical
decision support. Federal policies requiring universal coverage
for all children will insure that states can enroll children
and reduce the number of uninsured. Vermont is moving in the
direction of coverage through a publicly funded, universal
health care system. Under this system, eligibility will be
based on residency, which will guarantee that all children have
access to coverage. If federal policy for universal coverage
for all children is impracticable for all states, we feel
strongly that Vermont should receive federal support for its
health care reform efforts.
Please feel free to reach out should you need additional input or
clarification regarding the contents of Vermont's responses.
Sincerely,
Peter Shumlin
Governor
Cc: Senator Patrick Leahy
Senator Bernie Sanders
Congressman Peter Welch
Secretary Hany Chen, Vermont Agency of Human Services
Commissioner Mark Larson, Department of Vermont Health Access
______
COMMONWEALTH of VIRGINIA
Office of the Governor
Patrick Henry Building 1111 East Broad Street Richmond, Virginia
23219
(804) 786-2211 TTY (800) 828-1120
www.governor.virginia.gov
Terence R. McAuliffe
Governor
October 23, 2014
The Honorable Ron Wyden The Honorable Fred Upton
Chairman Chairman
Committee on Finance Committee on Energy and Commerce
U.S. Senate U.S. House of Representatives
221 Dirksen Senate Office Building 2183 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
The Honorable Orrin G. Hatch The Honorable Henry Waxman
Ranking Member Ranking Member
Committee on Finance Committee on Energy and Commerce
U.S. Senate U.S. House of Representatives
104 Hart Office Building 2204 Rayburn House Office Building
Washington, DC 20510 Washington, DC 20515
Dear Chairmen Wyden and Upton, and Ranking Members Hatch and Waxman:
I am writing in response to your July 29, 2014 letter to states
requesting information about our Children's Health Insurance Program
(CHIP) in the context of the funding reauthorization. Thank you for the
opportunity to provide information about Virginia's very successful
CHIP programs, called Family Access to Medical Insurance Security
(FAMIS) that provide comprehensive health care coverage to
approximately 200,000 children and pregnant women in Virginia's low-
income working families. These families earn 200% or less of the
Federal Poverty Level (FPL), or up to $39,580 a year for a family of
three.
FAMIS has enjoyed bi-partisan support in Virginia and is viewed as
a bridge program for families earning too much to qualify for Medicaid,
but yet not enough to afford employer or Marketplace insurance. While
the Marketplace provides new affordable health care options for adults,
there remain some significant concerns for children's coverage
especially for those 200% or less of FPL. These concerns include
barriers to affordable coverage because of the ``family glitch''
(determining affordability based on the cost of employee-only coverage
instead of family coverage); lack of comparable child-specific benefit
plans; exclusion of the cost of stand-alone pediatric dental plans in
the calculation of subsidies; and annual out-of-pocket cost sharing
that far exceeds the CHIP affordability limit (5% of income).
Attached are answers to your questions which outline the importance
of our programs and the coverage they provide to the children and
pregnant women in the Commonwealth. Without Congressional action,
Virginia will not have enough federal carryover funding to continue the
program in federal fiscal year 2016. I urge Congress to fund the CHIP
program for an additional four years through 2019 at the enhanced 23
percentage point match rate, because Virginia, like many other states,
has already budgeted for this enhanced funding established in the
Affordable Care Act. The four years of CHIP funding will provide the
needed time to evaluate coverage for children through the Marketplace
while continuing to provide quality health care through a proven and
effective program.
Please contact Linda Nablo with the Department of Medical
Assistance Services (DMAS) for any additional questions about our
programs.
Sincerely,
Terence R. McAuliffe
Attachment
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g. income,
health status, demographics)?
Virginia has a combination CHIP program made up of two components that
covered over 196,000 otherwise uninsured children during FFY 2013:
a. A separate CHIP (S-CHIP) program called Family Access to Medical
Insurance Security (FAMIS) covered over 104,000 children, ages
0-18, living in families with incomes between 134% FPL and 200%
FPL in FFY 13. These FPL limits were converted to 144-200%
during the Modified Adjusted Gross Income (MAGI) conversion at
the beginning of FFY 2014; and
b. An expansion of Medicaid paid for by CHIP funding (M-CHIP)
covered approximately 92,000 additional children, ages 6-18,
living in families with incomes between 100% and 133% FPL in
FFY 13. These FPL limits were converted to 110-143% during the
Modified Adjusted Gross Income (MAGI) conversion at the
beginning of FFY 2014.
Approximately forty-one percent (41%) of Virginia's CHIP enrollees are
Caucasian; twenty-six percent (26%) are African American; nineteen
percent (19%) are Hispanic; four percent (4%) are Asian; and the
remaining ten percent (10%) identify themselves as a mixed race or
another racial group. Forty-nine (49%) of the enrollees are female
while fifty-one percent (51%) are male. Ninety percent (90%) of
families report English as their primary language while nine percent
(9%) report Spanish as their primary language.
About ninety-five percent (95%) of Virginia's CHIP enrollees are served
through a managed care organization (MCO) delivery system for the
majority of their health care needs. Virginia's contracted MCOs are
required to obtain and maintain accreditation with the National
Committee for Quality Assurance (NCQA). Quality outcomes are monitored
by the state in part through Healthcare Effectiveness Data and
Information Set (HEDIS) measures and Consumer Assessment of Healthcare
Providers and Systems (CAHPS) surveys. As compared to the benchmark of
HEDIS' 2013 National Medicaid Managed Care 50th Percentile,
the Virginia MCO average for services provided in 2012 met or exceeded
the benchmark for the following measures:
Six or more well-child visits in the first 15 months of life
Annual well-child visits in the third, fourth, fifth, and sixth
years of life
Use of appropriate asthma medication (ages 5-11 and 12-18)
Key findings from Virginia's 2013 CAHPS survey of FAMIS enrollees show
that more than eight in ten parents/guardians gave positive
satisfaction ratings of their child's Personal Doctor (89%), Specialist
(85%), Health Care overall (85%) and Health Plan overall (84%); and for
parents/guardians of children with chronic conditions more than eight
in ten gave positive satisfaction ratings of their child's Personal
Doctor (91%), Health Care overall (87%), Specialist (87%) and Health
Plan overall (84%). In addition, sixty-two percent (62%) of three to
eighteen year olds enrolled in FAMIS received a dental service during
the state fiscal year (SFY) 2013.
The Centers for Medicare and Medicaid Services (CMS) PERM program
measures improper payments in Medicaid and CHIP and produces error
rates for each program. The National average PERM rate is 6.1%. For FY
2012, Virginia's most recent Managed Care program PERM rate was less
than 1%.
Additionally, Virginia has an 1115 waiver through CHIP that provided
prenatal care, delivery, and postpartum coverage to over 4,600 women
over age 18 living in families with incomes between 134% FPL and 200%
FPL in FFY 2013. Based on External Quality Review studies, low birth
weight rates for Virginia's program have continued to improve during
the three year period 2011-2013 and outperformed the Centers for
Disease Control national benchmark for all three years. Virginia MCO
HEDIS score for the first trimester prenatal care was 86%, exceeding
the National HEDIS Medicaid average rate.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act (PPACA)? How has the
implementation of PPACA impacted the way your state administers CHIP?
To align with the Federal Marketplace's first open enrollment, Virginia
was an early adopter of the new MAGI eligibility methodology which we
began to use in October 2013 at the same time we launched our new
Eligibility and Enrollment system that determines eligibility for both
Medicaid and CHIP. In July of 2014, following the issuance of new
regulations by CMS, we also removed the four month waiting period after
dropping health insurance for S-CHIP applicants. In addition, we are
currently in the process of submitting a state plan amendment to allow
dependents of state employees to enroll in our S-CHIP program starting
January 1, 2015--an option made available to states through the ACA.
3. To the extent the following information is readily available and you
believe it is relevant, please describe the services and or benefits
and or cost sharing currently provided in your state under CHIP that
are not comparably available through your state's exchange or through
the majority of employer sponsored health plans in your state.
Virginia's separate CHIP program, FAMIS, provides comprehensive health
care benefits originally modeled after the state employee health
insurance benefits, but tailored to meet the specific health care needs
of children. These benefits are not limited to well and sick care
visits, prescriptions, hospitalization, and vision care, but include
comprehensive dental coverage including medically-necessary
orthodontia, Early Intervention services, school health services, and
substance abuse treatment services as well as non-traditional
behavioral and psychiatric services.
FAMIS has no monthly or annual premiums and very affordable co-pays.
For most services under FAMIS, the co-pay is only $2 or $5 and there
are no co-pays above $25. In addition to not charging co-pays for well
child check-ups, there are no co-pays for dental care. Cost sharing
cannot exceed $180 per family per calendar year if a family's gross
income is less than 150 percent of the federal poverty level and $350
per family per calendar year if gross income is more than 150% of the
federal poverty level. Based on the July 2014 Comparison of Benefits
and Cost Sharing in Children's Health Insurance Programs to Qualified
Health Plans prepared by the Wakely Consulting Group for the Robert
Wood Johnson Foundation, FAMIS has much lower average annual cost
sharing and out of pocket maximum than a silver qualified health plan
(QHP):
------------------------------------------------------------------------
Enrollees with family incomes of QHP in Federal
160% FPL FAMIS Exchange
------------------------------------------------------------------------
Average Annual Cost Sharing....... $89 $411-$480
Out of Pocket Maximum............. $350 $1,500-$2,250
------------------------------------------------------------------------
4. Do you recommend that CHIP funding be extended? If so, for how long,
and for budgeting and planning purposes, under what timeframe should
Congress act upon an extension? If you do not believe CHIP funding
should be extended, what coverage (if any) do you believe CHIP
enrollees in your state would be able to obtain? How many children
covered by CHIP do you estimate would become uninsured in the absence
of CHIP?
Yes, we strongly recommend the funding for CHIP be aligned with the
current authorization of the program through 2019 and should include
the ACA authorized twenty-three percentage point increase in the
Federal Financial Participation (FFP) match rate. While the Marketplace
provides new affordable health care options for adults, there remain
some significant concerns for children's coverage, especially for those
under 200% FPL. These include barriers to affordable coverage because
of the ``family glitch;'' lack of comparable child specific benefit
plans; exclusion of the cost of stand-alone pediatric dental plans in
the calculation of subsidies; and annual out-of-pocket cost sharing
that far exceeds the 5% of income affordability limit of CHIP.
We do not have estimates for how many separate CHIP enrollees covered
during the year would become uninsured if CHIP is not funded, but
approximately 104,000 Virginia children would be in jeopardy of
becoming uninsured. According to our projections submitted in our
August 2014 CMS 37/21B report, we do not project a CHIP allotment
carryover from FFY 2015. Therefore, Virginia would have no federal
funds available to continue coverage for these children into FFY 2016.
We project that we will need $356,175,917 in total funds to continue
our CHIP programs in FFY 2016. For our S-CHIP program alone, Virginia
expects to need $219,644,400 in total funds to continue the program.
Eighty-eight percent (88%) of that or $193,287,072 is currently
budgeted to come from the federal government due to the twenty-three
point increase in the state's Federal Financial Participation (FFP)
match rate starting with FFY 2016. While we believe that FAMIS is a
successful and needed program, if CHIP is not funded, Virginia will not
be able to absorb the federal share and continue the S-CHIP program
with state funds only.
In addition to concerns about children in our separate CHIP program
becoming uninsured if CHIP funding is not extended, Virginia also has
serious concerns about funding the M-CHIP program. Without the expected
CHIP funding at eighty-eight percent (88%) FFP match rate, our
understanding is that we would be required to continue to cover these
children under the Maintenance of Effort (MOE), but that our match rate
for covering these children would fall to the regular Medicaid FFP
match rate of fifty percent (50%), requiring an additional $51,881,977
in state funds for FFY 2016.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe the
annual allotments your state has received starting in 2009 have been
sufficient and the formula is working appropriately? Do you believe
there is a need for Congress to further address the issue of unspent
allotments?
The allotment process was greatly improved under the 2009 CHIPRA
legislation and appears to be working appropriately.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of the
uninsured, and improve health outcomes for children in your state?
Guarantee twelve months of continuous coverage for children.
Eliminate requirements to prevent substitution of coverage from the
CHIP program to reduce coverage barriers and streamline
administration of the program. CHIP is the only publically-
funded health care program with this requirement.
Allow coverage for dependents of public employees without
additional qualifying steps.
Improve alignment of coverage with the Marketplace so that there is
no gap in coverage when a child/family moves from CHIP or
Medicaid coverage to the Marketplace.
Enhance the electronic verification systems available to states
through the HUB to reduce the need to request paper
verifications.
Allow coverage of medically-necessary Institution for Mental
Diseases (IMO) placements for CHIP eligible children as is
available to children covered by Medicaid.
Allow states to claim enhanced FFP for production of materials
(brochures, posters, member handbooks, TV and radio ads, etc.,
as well as media buys) in languages other than English, not
just the translation itself.
______
STATE OF WASHINGTON
HEALTH CARE AUTHORITY
626 8th Avenue, SE P.O. Box 45502 Olympia, Washington 98504-5502
October 6, 2014
The Honorable Fred Upton The Honorable Ron Wyden
Chairman Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2183 Rayburn House Office Building 221 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
The Honorable Henry A. Waxman The Honorable Orrin G. Hatch
Ranking Member Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2204 Rayburn House Office Building 104 Hart Office Building
Washington, DC 20515 Washington, DC 20510
Dear Senators Wyden and Hatch and Representatives Upton and Waxman:
SUBJECT: Extending Funding of the Children's Health Insurance Program
Thank you for the opportunity to provide input as federal policymakers
considers extending funding of the Children's Health Insurance program
(CHIP). Washington State is supportive of extending funding of the CHIP
program through 2019. Below we have provided responses to the questions
posed. We hope our responses resonate with Congress and other states in
continuing this popular and effective program for providing health care
coverage for children.
1. How many individuals are served by your state's CHIP program?
What are the characteristics of CHIP enrollees in your state
(e.g. income, health status, demographics)?
State's response: Washington State provides health care coverage
for nearly fifty thousand low-income children each year under
its stand-alone CHIP program. Average monthly enrollment
exceeds 38,000. Coverage is provided to unborn children whose
mothers do not qualify for Medicaid because of citizenship
status, but family income is at or below 193 percent federal
poverty level (FPL), and to children birth through age eighteen
whose family income is at or below 312 percent FPL. Thirty-two
percent of the children birth to age 19 served by Washington's
CHIP are members of an ethnic minority. Eighty-five percent of
the children enrolled in CHIP receive their coverage via a
Managed Care Plan.
2. What changes has your state made to its CHIP program as a result
of the Patient Protection and Affordable Care Act? How has the
implementation of the PPACA impacted the way your state
administers CHIP?
State's response: Over the last year, Washington State has
implemented a highly successful state-based exchange--
www.wahealthplanfinder.org. Through this exchange portal,
individuals and families can apply for the full range of
subsidized insurance options including Medicaid (Apple Health)
and CHIP (Apple Health with premiums). Applicants who use the
web portal receive an eligibility decision in ``real-time''
based on Modified Adjustable Growth Income. This has
dramatically improved the timeliness of service delivery and
reduced delays in accessing needed medical care.
3. To the extent the following information is readily available and
you believe it is relevant, please describe the services and or
cost sharing currently provided in your state under CHIP that
are not comparably available through your state's exchange or
through the majority of employer sponsored health plans in your
state.
State's response: The benefit package under CHIP is the same as
that offered children under Medicaid, and has an actuarial
value of 100 percent. This value is over 25 percent higher than
the actuarial value of a subsidized silver level plan in the
exchange. There is no cost-sharing for this coverage other than
a nominal $20-$30 per monthly premium based on income, applied
to a maximum of two children each household. In addition, CHIP
coverage offers a richer set of services beyond the ten
essential health care benefits in the exchange plans, including
Early Periodic Screening, Diagnosis and Treatment, Health
Homes, Personal Care Services, Tobacco Cessation Counseling,
Targeted Case Management, Nursing Facility-Long-Term Care, and
Intermediate Care, Individuals with Intellectual Disabilities
Facilities for the Developmentally Disabled.
4. Do you recommend that funding be extended? If so, for how long,
and for budgeting and planning purposes, under what timeframe
should Congress act upon an extension? If you do not believe
CHIP funding should be extended, what coverage (if any) do you
believe CHIP enrollees in your state would be able to obtain?
How many children covered by CHIP do you estimate would become
uninsured in the absence of CHIP?
State's response: We strongly support Congress acting to extend
funding of CHIP for a minimum of two years as recommended in
the June 2014 MACPAC report. We believe an additional two-year
extension to 2019 will allow Congress and the states the
necessary time for the exchanges and health care networks to
mature without negative impacts to the health care of our
nation's children. We believe CHIP has been instrumental in
providing effective health care coverage for uninsured children
for the last 15 years. We would urge Congress to act no later
than March 2015 to extend funding for CHIP if the State is to
avoid development costs associated with eliminating the program
in fiscal year 2015. If funding for CHIP is not authorized in
FY 2016, 12,000 unborn children annually will not have access
to prenatal coverage.
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you
believe the annual allotments your state has received starting
in 2009 have been sufficient and the formula is working
appropriately? Do you believe there is a need for Congress to
further address the issue of unspent allotments?
State's response: In recent years, Washington State's CHIP
expenditures have met or exceeded the available allotment.
Given the 20 percent increase in our CHIP enrollment over the
last year, we would ask that Congress consider a formula for
establishing Washington's annual allotment that recognizes our
success in operating a state-based exchange. Washington
occupies a unique niche as a Sec. 2105(g) qualifying state. If
the allotment formula for our state is not substantially
modified, we estimate a loss of federal revenue in excess of
$50 million dollars. We would also recommend Congress address
the issue of unspent allotments by extending the enrollment
performance bonus authorized under the Children's Health
Insurance Program Reauthorization Act (CHIPRA).
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are
federal policies that could help states do an even better job
in enrolling eligible children? What other policy changes, if
any, would help improve enrollment of eligible children, reduce
the number of the uninsured, and improve health outcomes for
children in your state?
State's response: We support Congress establishing a unified set
of Pediatric Quality measures as described in CHIPRA. We
believe Congress could encourage states to pursue improved
health outcomes by supporting adoption of such quality measures
with enhanced federal funding (similar to performance bonuses
for enrollment). Further, we believe grant funds should
continue to be designated for pediatric institutions to
continue the study, development, and measurement of improved
health outcomes for children and adolescents.
Thank you for the opportunity to review your request and answer your
questions. Sincerely,
Sincerely,
Dorothy F. Teeter, MHA
Director
______
State of West Virginia
Office of the Governor
1900 Kanawha Boulevard, East
Charleston, WV 25305
(304) 558-2000
Earl Ray Tomblin
Governor
October 31, 2014
The Honorable Fred Upton The Honorable Henry A. Waxman
Chairman Ranking Member
U.S. House of Representatives U.S. House of Representatives
Committee on Energy and Commerce Committee on Energy and Commerce
2183 Rayburn House Office Building 2204 Rayburn House Office Building
Washington, D.C. 20515 Washington, D.C. 20515
The Honorable Ron Wyden The Honorable Orrin G. Hatch
Chairman Ranking Member
U.S. Senate U.S. Senate
Committee on Finance Committee on Finance
219 Dirksen Senate Office Building 219 Dirksen Senate Office Building
Washington, D.C. 20510 Washington, D.C. 20510
Dear Chairman Upton, Chairman Wyden, Ranking Member Waxman, Ranking
Member Hatch, House Energy and Commerce and Senate Finance Committees:
Thank you for the opportunity to respond to your recent inquiries
regarding policy considerations affecting the federal Children's Health
Insurance Program (CHIP) and West Virginia's Children's Health
Insurance Program (WVCHIP). Since launching WVCHIP in July 1998, we
have provided coverage and access to health care services for more than
185,000 West Virginia children who were previously ineligible to
receive insurance coverage through Medicaid or other insurance
providers. For years, West Virginia has been a leader in reducing the
number of uninsured children through WVCHIP's continued outreach
efforts to protect and promote the health of West Virginia children by
gradually expanding eligibility and health services to families in
need.
As we continue to implement health care reform, our state's vision
for CHIP services assumes enrollees would transition to receive
services either through Medicaid expansion coverage or subsidized
commercial plans that provide more affordable and robust coverage. As
we prepare for the last year of CHIP funding, it is unlikely our vision
will become a reality for significant number of West Virginia
enrollees.
1) Individuals Served: In Federal Fiscal Year 2013 WVCHIP served an
unduplicated 37,413 children. In FFY 2014, the unduplicated
enrollment decreased to 33,767, a 9.7% decrease in part due to
the Medicaid child eligibility expansion to 133% federal
poverty level (FPL) income level. On December 31, 2013, WVCHIP
monthly enrollment was 25,011, prior to the transition of all
WVCHIP enrollees to Medicaid by December 31, 2014, at which
date the WVCHIP enrollment is estimated to total 19,557.
Since the creation of the WVCHIP program, the demographics of
West Virginia children receiving available services have
evolved. In 2000, WVCHIP expanded its eligibility income level
in several phases from 200% FPL and again in 2011 to 300% FPL.
On July 1, 2014, children of public employees also became
eligible to receive WVCHIP coverage. A past comparison of non-
disabled WVCHIP children and non-disabled Medicaid children
showed the WVCHIP population were identified by higher risk
adjustment factors (were sicker) than Medicaid children. Simply
put, CHIP and WVCHIP are serving a population of our state's
children that Medicaid is not.
2) CHIP Changes under PPACA: The most significant changes to CHIP
operations resulting from PPACA include those policy changes
requiring the MAGI income counting rules and implementing
operational changes to the eligibility system and electronic
claims systems. While these updates are necessary enhancements,
they have required significant resources and commitment, by not
only WVCHIP, but from all those systems which provide similar
administrative functions for the State's Medicaid program.
3) Premiums and Copayments: WVCHIP currently applies both modest
premiums and copayments to different income tiers as follows:
Premiums and Selected Cost Sharing in West Virginia's PCHIP Program, 2014
----------------------------------------------------------------------------------------------------------------
Inpatient Prescription
Family Income Level Premiums Office Visits Services Drugs
----------------------------------------------------------------------------------------------------------------
150% FPL.................................. None $5 * None $0-$5
> 150-211% FPL............................ None $15-$25 * $25 $0-$10
> 211% FPL................................ $35/$71 max ** $20-$25 * $25 $0-$15
----------------------------------------------------------------------------------------------------------------
* Waived when member has a designated medical home.
** There is a single child family rate vs. multi-child family rate.
NOTE: Premiums and cost sharing are set within federal
parameters, i.e., in total, any family contribution to the cost
of coverage cannot exceed five percent of family income.
WVCHIP currently collects more than $900,000 in premium payments
each year from families with incomes over 200% up to 300% FPL
level. In 2013, approximately one-third of these families fell
behind on premium payments and/or cancelled their enrollment.
Lack of Affordable Options and Increase in Uninsured Children: If
federal funding for CHIP is eliminated in 2015, current
enrollees will be given the option to enroll in Qualified
Health Plans (QHP) in West Virginia's Marketplace. We expect
more than half of WVCHIP enrollees would drop enrollment during
the benefit year, as the affordability of premium levels for
family coverage of four would be challenging, even with the tax
subsidy. The average monthly premium cost for a silver plan in
West Virginia's Marketplace covering a family of four at the
139% FPL level would be $354 with a $200 deductible. The same
WVCHIP family now pays no monthly premium. The silver plan
average monthly premium cost for a family of four at the 300%
FPL would be $824 with a $9,500 deductible. The most affordable
bronze plan for a family of four at the 139% FPL has an average
monthly premium of $253 with a $10,000 deductible. This same
plan for a family of four at the 300% FPL level would be an
average monthly premium of $723 with a $10,000 deductible. Even
if these families could afford the cost of premium, the
deductibles are a significant access barrier to services
offered to WVCHIP children. This is especially the case for
dental services where families would bear a $350 deductible per
child up to a $700 deductible per family for dental care.
WVCHIP has some $25 copayments for a handful of lesser used
services, but there are no deductibles for dental. This
information is summarized in the chart below.
West Virginia Qualified Health Plans' Premiums and Deductibles
----------------------------------------------------------------------------------------------------------------
Silver Plan Bronze Plan
Family Size and Income Silver Plan Family Bronze Plan Family
Premiums Deductible Premiums Deductible
----------------------------------------------------------------------------------------------------------------
4 (139% FPL)................................ $354/month $200 $253/month $10,000
4 (300% FPL)................................ $824/month $9,500 $723/month $10,000
----------------------------------------------------------------------------------------------------------------
In addition to the substantial increase in cost sharing for
families, children would not receive the same health services
as QHPs in the Marketplace were not created with the unique
needs of children in mind. An important value of a pediatric-
centered benefit is to assure coverage and access of preventive
services, which WVCHIP does with no copayments or deductibles.
WVCHIP children between the ages of three years to six years
accessed well child visits at a 77.4% rate last year and 76.4%
the year before. We would expect to see this rate and other
preventive services decrease for CHIP children if they are
subject to copayments and deductibles.
4) Recommended Extension for Four Years: We recommend consideration
of a four-year CHIP extension. This extension would allow for
further market development and stabilization with potentially
more affordable choices for more West Virginians. In 2014, the
total percentage or children enrolled in QHP plans was quite
low (less than 1%). It would take at least two or three more
budget cycles to determine the participation rates for CHIP
income populations in QHPs. To determine whether enrollees are
better served in alternative Medicaid bridge plans or under a
basic health plan option would require an extension.
QHP Non-Affordability for West Virginia CHIP Households: In the
spring prior to the 2014 Marketplace enrollment, a survey of
WVCHIP households was completed. The results found more than
half of the surveyed households indicated they could pay only
$50 per month in premiums for family coverage, considerably
less than QHP premium rates. Based on this survey and without
an extension of CHIP funds, we believe children currently
receiving WVCHIP coverage and benefits could potentially become
uninsured, resulting in increased uncompensated care costs for
providers and unmet healthcare needs for children. While our
ultimate goal remains to achieve a better Marketplace/public
coverage fit for these families in whatever means possible, not
extending CHIP funds would be a significant step backward for
the health of West Virginia children.
5) The Allotment Formula: WVCHIP has been managed through strong
fiscal management efforts, and federal dollars have always been
sufficient to meet the needs of those enrolled. Since the CHIP
Reauthorization Act (CHIPRA) of 2009, the basic allotment
funding formula has worked well to support our state's program
even during phased in expansion periods. This has allowed West
Virginia to continue to expand the program within the
parameters of its budget and reduce the number of uninsured
children. CHIPRA special contingency funds and bonus set aside
for enrollment incentives were less effective clue to the
current successes in terms of increased enrollment for children
in our state as well as the efficient implementation of stream
lining enrollment changes. CHIP allotments must now be split
between WVCHIP and Medicaid, which causes us great pause as
CHIP funds may be used at a more rapid rate, potentially
leading to federal funding shortfalls. If federal funding to
support CHIP is not extended, WVCHIP will be terminated due to
state statute requiring the elimination of the program if
federal funds are no longer sufficient. Without the extension
of CHIP federal funds, thousands of West Virginia children and
families will be impacted.\1\
---------------------------------------------------------------------------
\1\ Sec. 5-16B-8. Termination and reauthorization. (a) The program
established in this article abrogates and shall be of no further force
and effect, without further action by the Legislature, upon the
occurrence of any of the following: (2) The effective date of any
reduction in annual federal funding levels below the amounts allocated
and/or projected in Title XXI of the Social Security Act of 1997.
Federal Funds Shortfall Projection: WVCHIP's actuary currently
projects the program could start to experience a funding
shortfall as early as first quarter Federal Fiscal Year 2016
(December 2015) without additional federal appropriations after
---------------------------------------------------------------------------
2015.
The CHIP Allotment Post Federal Fiscal Year 2015
Currently no Title XXI funds are allotted for the program past
federal fiscal year 2015. The ``separate'' CHIP has $41,806,543
in projected costs for 2016 based on current projected
enrollment and trends. The ``expansion'' CHIP has projected
2016 costs of $22,900,000. If the ``enhanced'' federal matching
percentage (FMAP) is increased by 23%, as stated in the ACA,
and additional federal funding is allotted, the federal cost
for CHIP in West Virginia would be $64,706,543. There would be
no state share, as West Virginia's federal matching percentage
would be 100% (2016 enhanced FMAP = 79.99% + 23% = 100% FMAP
cap). If the 23% increase to the enhanced FMAP is disregarded,
and sufficient funding is allotted at the federal level, the
federal cost for CHIP in West Virginia would be $51,758,764,
while the state cost would be $12,947,779. If no funding is
allotted at the federal level post 2015, West Virginia would
have state costs of $41,806,543 to continue the ``separate''
CHIP. The ``expansion'' CHIP would continue to be funded at the
regular FMAP using Title XIX funds. The projected federal cost
for the ``expansion'' CHIP in 2016 is $16,355,180 and state
funding of $6,544,820 at the regular FMAP. This represents an
additional state cost of $1,962,530 compared to the enhanced
FMAP currently available or $6,544,820 compared to enhanced
FMAP with the 23% increase. The unknown is the additional costs
to families who move from CHIP coverage to the marketplace or
from CHIP coverage to being uninsured because of rules
regarding marketplace eligibility--most notably the ``family
glitch,'' or to affordability issues mentioned above. The state
will also bear the uncompensated costs for those children who
cannot enter the Marketplace.
Federal Budget Action Timeline: It is important to stress action
must fall early within the 2015 current year's cycle, as the
state would amend its State Plan by the second quarter in the
2015 calendar year to allow time to close enrollment six months
in advance of the December 2015 date. If Congress were to delay
a decision on a CHIP funding extension until late 2015 for the
2016 budget cycle, it could come too late to continue West
Virginia's program.
6) Furthering Children's Enrollment, Reductions in Uninsured
Children: West Virginia continues to streamline its enrollment
processes, particularly re-enrollment so as to not eliminate
coverage for children due to noncompliance for timely response.
We know many children dropped from the rolls at renewal remain
eligible, and children are re-enrolled as soon as they are sick
or have coverage need. Policy changes such as including Express
Lane Eligibility as a permanent option or incentivizing
coverage renewal at the time of SNAP enrollment would minimize
this administrative inefficiency and promote better continuity
of care for children. These changes also help lower caseloads
for a workforce that has been severely stretched since
recessionary pressures caused spikes in enrollment of safety
net programs. In considering further incentives, most states
are likely to continue to streamline enrollment where possible.
The most important incentive would be one which would address
continued lowering of the children's uninsured rate.
Improving Health Outcomes: West Virginia has been a participant
in a CHIPRA Pediatric Quality Demonstration grant concerning
medical home and quality measurement--work that has been
challenging and complex and is drawing to a conclusion this
year. It is critical that states have such funds to work on
quality changes and identify performance drivers in the health
care delivery system with the child population as its main
focus. While much of the focus for federal funding has been
tailored toward the chronically ill adult population, in many
cases it leaves the needs of children out of the equation or in
a secondary place of consideration. The importance of continued
use of CHIP federal funding allotment to incentivize states to
continue children's quality work cannot and must not be
understated.
In conclusion, West Virginia continues to face changing budgetary
times. Without an extension of CHIP federal funding to help sustain
child health care coverage while Marketplace options for children are
evaluated and improved upon, we will not be able to provide the health
care coverage our children need.
Sincerely,
Earl Ray Tomblin
Governor
______
State of Wisconsin
Department of Health Services
1 West Wilson Street Post Office Box 7850 Madison, WI 53707-7850
Telephone 608-266-9622 www.dhs.wisconsin.gov
Protecting and promoting the health and safety of the people of
Wisconsin
Scott Walker, Governor
Kitty Rhoades, Secretary
September 2, 2014
Representative Fred Upton Senator Ron Wyden
Chairman Chairman
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2183 Rayburn House Office Building 221 Dirksen Senate Office Building
Washington, DC 20515 Washington, DC 20510
Representative Henry A. Waxman Senator Orrin G. Hatch
Ranking Member Ranking Member
U.S. House of Representatives U.S. Senate
Committee on Energy and Commerce Committee on Finance
2204 Rayburn House Office Building 104 Hart Senate Office Building
Washington, DC 20515 Washington, DC 20510
Dear Representative Upton, Representative Waxman, Senator Wyden, and
Senator Hatch:
Governor Walker asked me to respond to your recent letter asking for
input on the Children's Health Insurance Program (CHIP).
In Wisconsin, CHIP funding is integrated with the state's Medicaid
coverage for children and low income families, called BadgerCare Plus.
Using the combination of federal Medicaid and CHIP funds and state
match, Wisconsin provides health coverage to children up to 300% of
federal poverty level (FPL).
The following are answers to your specific questions:
1. As of June 2014, Wisconsin had 38,652 children in CHIP. The
populations served by the CHIP program in Wisconsin currently include:
Children aged 1 through 5 years with incomes between 185% and 300%
of the FPL.
Children aged 6 through 18 years with incomes between 133% and 300%
of the FPL.
Unborn children of women not eligible for Medicaid with incomes up
to 300% of the FPL.
2. As required under the Patient Protection and Affordable Care Act
(PPACA), the state has implemented modified adjusted gross income
(MAGI) rules for CHIP funded children. Wisconsin has maintained income
eligibility levels for all Medicaid and CHIP funded children. Effective
April 1, 2014, the state began providing Medicaid Standard Plan
benefits coverage to all adults and children in the Medicaid and
BadgerCare Plus program, including CHIP funded children. Previously,
children above 200% FPL were enrolled in a benchmark health plan, whose
benefits were consistent with commercial insurance. In another change
resulting from PPACA, the state has begun processing CHIP applications
received from the federal health insurance exchange.
3. The Standard Plan offered to all Medicaid and CHIP funded
individuals includes more generous dental, prescription drugs, mental
health, transportation, and long term care benefits, as well as lower
cost sharing requirements, than plans offered through the health
insurance exchange or in other commercial coverage. A list of Standard
Plan benefits is available at: http://badgercareplus.org/standard.htm.
4. Wisconsin recommends that CHIP funding be extended and that Congress
act to do so before the expiration of the funding authorization at the
end of federal fiscal year 2015. In FFY14, Wisconsin's CHIP allotment
was $109,462,826, representing an important component of funding the
state devotes to health coverage for low income children. It is crucial
for Congress to provide states with predictable funding levels in the
coming years. Wisconsin recommends that CHIP be extended at least for
the duration of the PPACA requirement that states maintain current
eligibility levels for children. This requirement is in place through
September 2019. As noted above, CHIP funding supports over 38,000
children in Wisconsin. Also Wisconsin receives the CHIP enhanced
federal Medicaid matching rate for some children 6 to 18 years old who
are between 100% and 133% of the FPL and children under age 6 with
incomes over 133% of the FPL and below Medicaid income limits.
5. In general, the current allocation formula has been sufficient for
Wisconsin. It is important for Wisconsin at minimum to keep its current
allocation. Congress may wish to consider indexing states' allocations
to reflect population growth or health care inflation.
6. The most useful thing the federal government can do is provide
states with as much flexibility as possible to design programs to meet
each state's unique needs for health coverage.
Thank you again for your letter. Please feel free to contact me or my
staff if you need any additional information.
Sincerely,
Kitty Rhoades
Secretary
______
Response from the State of Wyoming
1. How many individuals are served by your state's CHIP program? What
are the characteristics of CHIP enrollees in your state (e.g. income,
health status, demographics)?
5,220 average monthly enrollment, SFY 2014.
- Serve youth 0-19 years of age, with thirty-six (36%) of CHIP
recipients being between seven (7) and eleven (11) years of
age; only four percent (4%) between zero and two (2) years
of age.
- Even distribution of male and female youngsters.
- Sixty-five percent (65%) of CHIP population live in seven (7) of
the twenty-three (23) counties.
- Sixty-four percent (64%) of CHIP families have incomes between
151%-200% FPL (prior to Jan. 2014); seventy-seven percent
(77%) of CHIP families have incomes between 151%-200% FPL
(post Jan. 2014).
Seventy-one percent (71%) of all CHIP recipients utilized a
medical benefit, including pharmacy, during a 12-month period
of time.
- Professional services such as diagnostic lab, x-ray, optical
exams and urgent care services account for forty-four
percent (44%) of delivered services.
- Institutional services (inpatient) for treatment of ailments
such as psychoses and depressive neuroses account for
twenty-four percent (24%) of delivered services.
* The catastrophic claims classification ($50,000+) is comprised
of twenty-two CHIP recipients, with eleven (11) of the
twenty-two catastrophic claims being for inpatient
treatment of psychiatric disorders.
- Institutional services (outpatient) for treatment of ailments
such as abdominal pain, bone fracture, ear ache account for
twenty-one percent (21%) of delivered services.
- Prescription Drugs account for eleven percent (11%) of services.
* Antiasthmatic, AD HD treatment, a variety of antibiotics and
dermatological pharmaceuticals are the most prevalent.
Fifty-three percent (53%) of all CHIP recipients utilize a dental
benefit during a 12-month period of time.
- Services such as sealants, fluoride, varnish, x-rays account for
54% of services delivered.
- Services such as fillings and crowns account for 27% of services
delivered.
- Five hundred forty-four (544) youngsters received oral surgery
services.
- Orthodontic services are growing at a higher rate than other
services.
Data indicates that overall the CHIP population is quite healthy,
utilizing services to address health issues as they present, and are
reactionary in nature. Preventive services, such as well-child and
well-adolescent checks are not utilized as frequently even though there
is no co-pay for preventive services. Limited data suggests an hourly
wage parent/caregiver may consider it too costly to forego work in
order to schedule a well-child exam.
2. What changes has your state made to its CHIP program as a result of
the Patient Protection and Affordable Care Act? How has the
implementation of PPACA impacted the way your state administers CHIP?
CHIP enrollment processes are now conducted in a centralized
Customer Service Center.
CHIP eligibility is now determined by a new integrated eligibility
system, the Wyoming Eligibility System (WES) that ascertains
CHIP and Medicaid eligibility with a single, streamlined
application.
Implementation of the new Modified Adjusted Gross Income (MAGI)
based income standard deemed approximately 1,251 CHIP enrollees
Medicaid eligible. The identified youth were transitioned to
Medicaid beginning January 1, 2014.
Verification is now required for reported income. Previous to the
ACA income amounts were provided via self-declaration.
Previous to the ACA, a social security number was not necessary
for CHIP application. A social security number is now required
for each individual on the application applying for CHIP
enrollment.
The administration of the eligibility and enrollment elements of the
program have shifted from in-house eligibility staff to a customer
service center with the CHIP Eligibility Manager providing
administrative oversight of the work conducted by the customer service
center staff.
The administration of the Federal CHIP requirements including State
Plan and Amendments, Federal Reporting, strategic planning, coverage
and benefit requirements, outreach and education activity have remained
as they were prior to the ACA for the CHIP Program Manager.
3. To the extent the following information is readily available and you
believe it is relevant, please describe the services and or benefits
and or cost sharing currently provided in your state under CHIP that
are not comparably available through your state's exchange or through
the majority of employer sponsored health plans in your state.
Premium: None Premium: $771/mo-$1,159/mo
Deductible: None Deductible: $2,000/yr-$3,000/yr
Out of Pocket max: 5% annual gross Out of Pocket max: $3,000/yr-
income $12,700/yr
Dental benefits: included in benefit Additional deductible or separate
package policy
4. Do you recommend that CHIP funding be extended? If so, for how long,
and for budgeting and planning purposes, under what timeframe should
Congress act upon an extension? If you do not believe CHIP funding
should be extended, what coverage (if any) do you believe CHIP
enrollees in your state would be able to obtain? How many children
covered by CHIP do you estimate would become uninsured in the absence
of CHIP?
The recommendation would be for the extension of CHIP beyond September
30, 2015. The principal rationale for the recommendation is the vast
majority of youth currently enrolled in CHIP would not have any viable
options in the Marketplace nor would they be eligible for Medicaid. In
addition, it is unlikely the CHIP family would be eligible for a tax
credit as the formula to determine tax credit eligibility is based on
the employee's share of the premium exceeds 9.5% of the employee's
adjusted gross income. The option of the State absorbing the 65% match
currently provided at the Federal level is not probable. The result
would be a significant number of children returning to the rolls of the
uninsured, defeating one of the purposes of the Affordable Care Act
(ACA).
5. In spite of the restructuring and retargeting of allotments that
occurred in 2009, some CHIP funding remains unspent. Do you believe the
annual allotments your state has received starting in 2009 have been
sufficient and the formula is working appropriately? Do you believe
there is a need for Congress to further address the issue of unspent
allotments?
The allotments we have received have been sufficient, and since 2009
unspent allotment monies have been returned for redistribution. Perhaps
there is an opportunity for Congress to readdress the use of unspent
allotment dollars as a means to transition CHIP programs in a seamless
fashion, and avoid children returning to the rolls of the uninsured.
Retention of unused allotment monies would allow states to begin to
develop options, such as subsidizing an affordable child only policy in
the Marketplace.
6. Over the past number of years, States have worked to reduce the
number of uninsured children, and Medicaid and CHIP have been a
critical component of that effort. Do you believe there are federal
policies that could help states do an even better job in enrolling
eligible children? What other policy changes, if any, would help
improve enrollment of eligible children, reduce the number of
uninsured, and improve health outcomes for children in your state?
The CHIP program is a Federal and State partnership with each partner
participating to the extent politically and economically feasible. To
date numerous program options have been offered at the Federal level to
State CHIP programs. Our State has embraced several of the program
options, but not all options. There are currently no impediments to
expanding the outreach and enrollment efforts from a federal level.
______
Prepared Statement of Hon. Sylvia Mathews Burwell, Secretary,
U.S. Department of Health and Human Services
Chairman Hatch, Ranking Member Wyden, and Members of the Committee,
thank you for the opportunity to discuss the President's FY 2016 Budget
for the Department of Health and Human Services (HHS).
The Department has made historic strides towards ensuring that all
Americans can lead healthy and productive lives. Today, thanks to the
Affordable Care Act (ACA), middle class families have more security,
and many of those who already had insurance now have better coverage.
In the past year alone, about 10 million uninsured Americans finally
gained health insurance. In the private market, millions more now have
access to expanded coverage for preventive health care services, such
as a mammogram or flu shot, without cost sharing. At the same time, as
a nation we are spending our health care dollars more wisely and
starting to receive higher quality care.
In part due to the ACA, households, businesses, and the Federal
Government are now seeing substantial savings. Today, health care cost
growth is at exceptionally low levels, and premiums for employer
sponsored health insurance are about $1,800 lower per family on average
than they would have been had trends over the decade that preceded the
ACA continued. Across the board, the Department has continued its
commitment to the responsible stewardship of taxpayer dollars through
investments in critical management priorities. We have strengthened our
ability to combat fraud and abuse and advance program integrity,
further driving savings for the taxpayer while enhancing the efficiency
and effectiveness of our programs.
The Department has done important work addressing historic
challenges, including the coordinated whole-of-government responses to
Ebola both here at home and abroad and to last year's increase in
unaccompanied children crossing the Southwest border into Texas.
The President's FY 2016 Budget for HHS builds on this progress
through critical investments in health care, science and innovation,
and human services. The Budget proposes $83.8 billion in discretionary
budget authority, an increase of $4.8 billion from FY 2015
appropriations. This additional funding will allow the Department to
make the investments that are necessary to serve the millions of
American people who count on our services every day, while laying the
foundation for healthier communities and a stronger economy for the
middle class in the years to come. The Budget also further strengthens
the infrastructure needed to prevent, prepare for, and respond to
future challenges effectively and expeditiously.
The Department's Budget request recognizes our continued commitment
to balancing priorities within a constrained budget environment through
legislative proposals that, taken together, would save the American
people a net estimated $228.2 billion in HHS programs over 10 years.
The Budget builds on savings and reforms in the ACA with additional
measures to strengthen Medicare and Medicaid, and to continue the
historic slow-down in health care cost growth. Medicare proposals in
our Budget, for example, more closely align payments with the costs of
providing care, encourage health care providers to deliver better care
and better outcomes for their patients, improve access to care, and
create incentives for beneficiaries to seek high value services.
providing all americans with access to quality, affordable health care
The President's FY 2016 Budget request builds on progress made to
date by focusing on access, affordability, and quality--goals that we
share with Congress and hope to work on together, in partnership,
moving forward. The Budget also continues to make investments in
Federal public health and safety net programs to help individuals
without coverage get the medical services they need, while
strengthening local economies.
Expanding Options for Consumers through the Health Insurance
Marketplaces. The ACA is making quality, affordable health coverage
available to millions of Americans who would otherwise be uninsured. As
of mid-January more than 9.5 million consumers selected a plan or were
automatically re-enrolled through the Health Insurance Marketplaces for
coverage in 2015. At the same time, consumers are seeing more choice
and competition. There are over 25 percent more issuers participating
in the Marketplace in 2015 compared to 2014. Not only that, in 2015,
nearly 8 in 10 Federal Marketplace customers can get coverage for $100
or less per month after applicable tax credits.
Partnering with States to Expand Medicaid for Low-Income Adults.
The ACA provides full Federal funding to cover newly eligible adults in
states that expand Medicaid up to 133 percent of the Federal poverty
level through 2016, and covers no less than 90 percent of costs
thereafter. This increased Federal support has enabled 28 states and
the District of Columbia to expand Medicaid coverage to more low-income
adults. Just recently we saw another state, Indiana, join us to bring
much needed access to health care coverage to a state-estimated 350,000
uninsured low-income residents. Across the country, as of November
2014, over 10.1 million additional individuals are now enrolled in
Medicaid and CHIP compared to the fall of 2013. As Secretary, I am
personally committed to working with Governors across all 50 states to
expand Medicaid in ways that work for their states, while protecting
the integrity of the program and those it serves.
Extending the Children's Health Insurance Program. The Budget
includes an additional four years of funding for CHIP through FY 2019
to provide comprehensive and affordable coverage for children and
families across the United States. This extension will help bring
stability to state budgets and continuity of coverage for children. We
believe there is bipartisan support for CHIP and look forward to
working with Congress to extend this program for the millions of
children who depend upon it.
Improving Access to Health Care for American Indians and Alaska
Natives (AI/AN). Reflecting the President's commitment to improving
health outcomes across tribal nations, the Budget includes $6.4 billion
for the Indian Health Service to strengthen programs that serve over
2.2 million American Indians and Alaska Natives at over 650 health care
facilities across the United States. The request fully funds estimated
Contract Support Costs in FY 2016 and proposes to modify the program in
FY 2017 by reclassifying it as a mandatory appropriation, creating a
longer-term solution.
Bolstering the Nation's Health Workforce. The Budget includes a
$14.2 billion investment in our Nation's health care workforce to
improve access to health care services, particularly in rural and other
underserved communities. That includes support for over 15,000 National
Health Service Corps clinicians, who will serve the primary care,
mental health, and dental needs of nearly 16 million patients in high-
need areas across the country. The Budget also creates new funding for
graduate medical education in primary care and other high-need
specialties, which will support more than 13,000 residents over 10
years, and advance the Administration's goal of higher-value healthcare
that reduces long-term costs.
To continue encouraging provider participation in Medicaid, the
Budget invests $6.3 billion to extend the enhanced Medicaid
reimbursement rate for primary care services, and makes strategic
investments to encourage primary care by expanding eligibility to
obstetricians, gynecologists, and non-physician practitioners. A
January 2015 study by University of Pennsylvania and Urban Institute
researchers found that the share of Medicaid enrollees who successfully
got appointments with primary care providers grew by nearly 8
percentage points between 2012 and 2014, when the program was fully
implemented. The Budget also supports the provision of primary care
services in the Medicare program by permanently incorporating the
temporary 10 percent primary care incentive payment program into the
Medicare physician fee schedule.
Investing in Health Centers. Health centers are an essential
primary care provider for America's most vulnerable populations,
serving 1 out of every 15 Americans while reducing the use of costlier
care through emergency departments and hospitals. The Budget includes
$4.2 billion for health centers, including $2.7 billion in mandatory
resources, to serve approximately 28.6 million patients in FY 2016 at
more than 9,000 sites in medically underserved communities throughout
the country.
The Department's requests for health centers and the National
Health Service Corps are vitally important, as the existing mandatory
funding streams for these programs end in 2015. Without renewed funding
in 2016 and beyond, millions of Americans may lose access to essential
cost-effective primary care services provided through our Nation's
health centers, and efforts to ensure provider access in underserved
rural and urban areas across the country through the National Health
Service Corps will come to a halt.
delivering better care and spending our health care dollars wisely
If we find better ways to deliver care, pay providers, and
distribute information, we can receive better care and spend our
dollars more wisely, all the while supporting healthier communities and
a stronger economy. To build on and drive progress on these priorities,
we are focused on the following three key areas:
Improving the Way Care is Delivered. The Administration is focused
on improving the coordination and integration of health care, engaging
patients more fully in
decision-making, and improving the health of patients--with an emphasis
on prevention and wellness. HHS believes that incentivizing the
provision of preventive and primary care services will improve the
health and well-being of patients and slow cost growth over the long
run through avoided hospitalizations and additional office visits. The
Administration's efforts around patient safety and quality have made a
difference--reducing hospital readmissions in Medicare by nearly eight
percent, translating into 150,000 fewer readmissions between January
2012 and December 2013 and reducing hospital patient harm by 17 percent
from 2010 to 2013, saving 50,000 lives and $12 billion in health
spending according to preliminary estimates.
Improving the Way Providers are Paid. The Administration is testing
and implementing new payment models that reward value and care
coordination--rather than volume. HHS has seen promising results on
cost savings with alternative payment models: already, existing
Accountable Care Organizations (ACOs) programs have generated combined
total program savings of $417 million to Medicare. To shift Medicare
reimbursement from volume to value, and further drive progress in the
health care system at large, the Department has announced its goal of
tying 30 percent of traditional, or fee-for-service, Medicare payments
to quality or value through alternative payment models by 2016 and 50
percent by 2018.
The Budget supports progress in this area by including proposals
targeted at changing provider incentives and payment mechanisms. For
example, the Budget puts Medicare's payments to physicians on solid
ground by replacing Medicare's flawed Sustainable Growth Rate formula.
The Budget would establish new annual physician payment updates to
provide certainty and consistency to providers; create incentives for
providers to participate in proven alternative payment models like
ACOs; and streamline other value-based incentives. The Administration
supports a long-term policy solution to fix the SGR and applauds the
bipartisan, bicameral efforts that Congress undertook last year. The
Administration looks forward to working with Congress to build on that
effort and reform Medicare physician payments in a fiscally responsible
manner.
Improving the Way Information is Distributed. The Administration is
working to create transparency of cost and quality information and to
bring electronic health information to the point of care--enabling
patients and providers to make the right decisions at the right time to
improve health and care. The Centers for Medicare and Medicaid Services
(CMS) is making major strides to expand and improve its provider
compare websites, which empower consumers with information to make more
informed health care decisions, encourage providers to strive for
higher levels of quality, and drive overall health system improvement.
To improve communication and enhance care coordination for patients,
the FY 2016 Budget also includes a substantial investment ($92 million)
in efforts supporting the adoption, interoperability, and meaningful
use of electronic health records.
leading the world in science and innovation
Investments in science and innovation have reshaped our
understanding of health and disease, advanced life-saving vaccines and
treatments, and helped millions of Americans live longer, healthier
lives. With the support of Congress, there is more that we can do
together. The President's FY 2016 Budget request lays the foundation to
maintain our Nation's global edge in medical research. This Budget for
NIH supports ongoing research and provides real investments in
innovative science.
Advancing Precision Medicine. The FY 2016 Budget includes $215
million for the Precision Medicine Initiative, a new cross-Department
effort focused on developing treatments, diagnostics, and prevention
strategies tailored to the genetic characteristics of individual
patients. This effort includes $200 million for the National Institutes
of Health (NIH) to launch a national research cohort of a million or
more Americans who volunteer to share their information, including
genetic, clinical and other data to improve research, as well as to
invest in expanding current cancer genomics research, and initiating
new studies on how a tumor's DNA can inform prognosis and treatment
choices. The Department will also modernize the regulatory framework to
aid the development and use of molecular diagnostics, and develop
technology and define standards to enable the exchange of data, while
ensuring that appropriate privacy protections are in place. With the
support of Congress, this funding would allow the Department to scale
up the initial successes we have seen to date and bring us closer to
curing the chronic and terminal diseases that impact millions of
Americans across the country.
Supporting Biomedical Research. The FY 2016 Budget includes $31.3
billion for NIH, an increase of $1 billion over FY 2015, to advance
basic biomedical and behavioral research, harness data and technology
for real-world health outcomes, and prepare a diverse and talented
biomedical research workforce. This research is critical to maintaining
our country's leadership in the innovation economy, and can result in
life-changing breakthroughs for patients and communities. For example,
that NIH estimates it will be able to spend $638 million under this
Budget request on Alzheimer's research, an increase of $51 million over
FY 2015, which will position us to drive progress on recent advances in
our understanding of the genetics and biology of the disease, including
drugs currently in clinical trials, and those still in the pipeline.
ensuring the building blocks for success at every stage of life
As part of the President's plan to bolster and expand the middle
class, the Budget includes a number of proposals that help working
Americans meet the needs of their families--including young children
and aging parents.
Investing in Early Learning. High-quality early learning
opportunities both promote children's healthy development and support
parents who are balancing work and family obligations. Across the
United States, many American families face real difficulties finding
and affording quality child care and early education. In 2013, the
average cost of full-time care for an infant at a child care center was
about $10,000 per year--higher than the average cost of in-state
tuition and fees at a public 4-year college. The Budget outlines an
ambitious plan to make affordable, quality child care available to
every low-income and middle-class family with young children; to expand
access to high-quality early learning opportunities through the Head
Start and Early Head Start programs; and to invest in voluntary,
evidence-based home visiting programs that have been shown to leave
long-lasting, positive impacts on parenting skills, children's
development, and school readiness. These investments complement
proposals at the Department of Education to provide high-quality
Preschool to all four year olds from low- and moderate-income families
and expand programs for middle-class children as well.
The President's child care proposal builds on the reforms passed by
Congress in the bipartisan reauthorization of the Child Care and
Development Block Grant enacted last fall. The proposal makes a
landmark investment of an additional $82 billion over 10 years in the
Child Care and Development Fund (CCDF), which by 2025 would expand
access to more than 1 million additional children under age four,
reaching a total of more than 2.6 million children. At the same time,
the proposal provides resources to help states raise the bar on
quality, and design programs that better serve families facing unique
challenges in finding quality care, such as those in rural areas or
working non-traditional hours.
The Budget includes an additional $1.5 billion above FY 2015 to
improve the quality of Head Start services and expand access to Early
Head Start, including through Early Head Start--Child Care
Partnerships. The proposal will ensure that all Head Start programs
provide services for a full day and full-school year and increase the
number of infants and toddlers served in high-quality early learning
programs. It will also ensure that program funding keeps pace with
inflation and that the program can restore enrollment back to the 2014
level.
The Budget also proposes $15 billion over ten years to extend and
expand access to evidence-based home visiting programs building on
research showing that home visits by a nurse, social worker, or other
professional during pregnancy and in the early years of life can
significantly reduce child abuse and neglect, improve parenting, and
promote child development and school readiness.
Research by the President's Council of Economic Advisors indicates
that investments in high-quality early education generate economic
returns of over $8 for every $1 spent. Not only that, studies show
high-quality early learning programs result in better outcomes for
children across the board--with children more likely to do well in
school, find good jobs and greater earnings, and have fewer
interactions with the criminal justice system. These programs also
strengthen parents' abilities to go to work, advance their career, and
increase their earnings. That is why the Administration has outlined a
series of measures, including tax cuts for working families, to advance
our focus on improving quality, while also dramatically expanding
access.
Supporting Older Adults. The number of older Americans age 65 and
older with severe disabilities--defined as 3 or more limitations in
activities of daily living--that are at greatest risk of nursing home
admission, is projected to increase by more than 20 percent by the year
2020. With 2015 marking the year of the White House Conference on
Aging, the Department's Budget request makes investments to address the
needs of older Americans, many of whom require some level of assistance
to continue living independently or semi-independently within their
communities. The Budget includes common-sense reforms that help to
protect older Americans from identity theft, while supporting family
caregivers and expanding options for home and community-based services
and supports.
Improving Child Welfare. The Department's Budget also proposes
several improvements to child welfare programs that serve children who
have been abused and neglected or are at risk of maltreatment. The
Budget includes a proposal that has generated bipartisan interest that
would provide $750 million over five years for an innovative
collaboration between the Administration for Children and Families
(ACF) and CMS that would assist states to provide evidence-based
interventions to youth in the foster care system to reduce the over-
prescription of psychotropic medications. There is an urgent need for
action: ACF data show that 18 percent of the approximately 400,000
children in foster care were taking one or more psychotropic
medications at the time they were surveyed. It also requests $587
million over ten years in additional funding for prevention and post-
permanency services for children in foster care, most of which must be
evidence-based or evidence-informed. It includes savings of $69 million
over ten years to promote family-based foster care for children with
behavioral and mental health needs, as an alternative to congregate
care, and provides increased oversight of congregate care when such
placements are determined to be necessary.
keeping americans healthy
The President's FY 2016 Budget strengthens our public health
infrastructure, invests in behavioral health services, and prioritizes
other critical health issues.
Investing in Domestic and International Public Health Preparedness.
The health of people overseas directly affects America's safety and
prosperity, with far-reaching implications for economic security,
trade, the stability of foreign governments, and the well-being of U.S.
citizens abroad and at home. The Budget includes $975 million for
domestic and international public health preparedness infrastructure,
including an increase of $12 million for Global Health Security Agenda
implementation to build the capacity for countries to detect and
respond to potential disease outbreaks or public health emergencies and
prevent the spread of disease across borders.
As new infectious diseases and public health threats emerge, HHS
continues to invest in efforts to bolster the Nation's preparedness
against chemical, biological, nuclear, and radiological threats. This
includes a $391 million increase for Project BioShield to support
procurements and replenishments of new and existing countermeasures and
to advance final stage development of new products, and to replace
expiring countermeasures and maintain current preparedness levels in
the Strategic National Stockpile.
Combatting Antibiotic Resistant Bacteria. The Centers for Disease
Control and Prevention estimates that each year at least two million
illnesses and 23,000 deaths are caused by antibiotic-resistant bacteria
in the United States alone. The Budget nearly doubles the amount of
federal funding for combating and preventing antibiotic resistance
within HHS to more than $990 million. The funding will improve
antibiotic stewardship; strengthen antibiotic resistance risk
assessment, surveillance, and reporting capabilities; and drive
research innovation in the human health and agricultural sectors.
Addressing Prescription Drug and Opioid Misuse and Abuse. The
misuse and abuse of prescription drugs impacts the lives of millions of
Americans across the country, and costs the American economy tens of
billions of dollars in lost productivity and increased health care and
criminal justice expenses. In 2009, total drug overdoses overtook every
other cause of injury death in the United States, outnumbering
fatalities from car crashes for the first time. In 2012 alone, 259
million opioid prescriptions were written--enough for every American
adult to have a bottle. As part of a new, aggressive, multi-pronged
initiative, the Budget includes more than $99 million in new funding
this year in targeted efforts to reduce the prevalence and impact of
opioid use disorders. The Budget also includes improvements in Medicare
and Medicaid, including a proposal to require states to track high
prescribers and utilizers of prescription drugs in Medicaid, which
would save $710 million over 10 years and bolster other efforts to
reduce abuse of prescription drugs.
leaving the department stronger
The FY 2016 Budget request positions the Department to most
effectively fulfill our core mission by investing in a number of key
management priorities that will strengthen our ability to combat fraud,
waste, and abuse, strengthen program integrity, and enable ongoing
cybersecurity efforts, among other areas.
Strengthening Program Integrity. The FY 2016 Budget continues to
build on progress made by the Administration to eliminate excess
payments and fraud. The Budget includes new investments in program
integrity totaling $201 million in FY 2016 and $4.6 billion over ten
years. This includes, for example, the continued funding of
comprehensive efforts to combat health care fraud, waste, and abuse
through prevention activities, improper payment reductions, provider
education, audits and investigations, and enforcement through the full
Health Care Fraud and Abuse Control (HCFAC) discretionary cap
adjustment. This investment builds on important gains over the course
of the past several years: from 2009 to 2013, programs supported by
HCFAC have returned over $19 billion in health care fraud related
payments. Together, the Department's proposed program integrity
investments will yield $22 billion in gross savings for Medicare and
Medicaid over 10 years.
Reforming the Medicare Appeals Process. Between FY 2009 and FY
2014, the number of appeals received by the Office of Medicare Hearings
and Appeals has increased by more than 1300%, which has led to a
backlog that is projected to reach 1 million appeals by the end of FY
2015. The Department has undertaken a three-pronged strategy to improve
the Medicare Appeals process: (1) Take administrative actions to reduce
the number of pending appeals and prevent new cases from entering the
system; (2) Request new resources to invest at all levels of appeal to
increase adjudication capacity and implement new strategies to
alleviate the current backlog; and (3) Propose legislative reforms that
provide additional funding and new authorities to address the appeals
volume. The FY 2016 Budget includes a comprehensive legislative package
of seven proposals aimed both at helping HHS process a greater number
of appeals and reducing the number of appeals filed and requests
additional resources for CMS, OMHA, and the Departmental Appeals Board
to enhance their capacity to process appeals.
conclusion
Members of the Committee, thank you for the opportunity to testify
today. The President's FY 2016 Budget request for HHS makes the
investments critical for today while laying the foundation for a
stronger economy for the middle class. I am looking forward to working
closely with Congress and Members of this Committee on these priorities
moving forward so that together we can best deliver impact for those we
serve--the American people. I welcome any questions you may have.
______
Questions Submitted for the Record to Hon. Sylvia Mathews Burwell
Questions Submitted by Hon. Orrin G. Hatch
medicaid
Question. As the Medicaid program has grown, so too has the need
for more accurate data on Medicaid spending, payments, and utilization.
Today, Medicaid is the largest insurer in the nation, serving more than
20 percent of the nation's population. Nonetheless, accurate and timely
information about spending, provider payments, and beneficiaries'
utilization is not available. This is unacceptable and CMS has been
working to improve this situation for years but with limited success.
More recently, CMS has established enhanced matching funds and grants
to states to develop the Transformed-Medicaid Statistical Information
System (T-MSIS), the primary source of national information on Medicaid
utilization and provider payments. According to CMS, this data system
is supposed to be getting monthly data feeds from all states by the end
of 2015.
How much federal funding is allocated to Medicaid information
system development and maintenance and how does this compare to federal
funding for the Medicare program?
Answer. The total FY 2014 federal match for state MMIS was $4.3
billion. In addition to the federal match for state claims systems, CMS
allocated $20.2 million to T-MSIS development and maintenance in FY
2014. Federal funding is allocated to a variety of information systems
at both the state and federal level, and Medicaid is a state-federal
partnership. This makes it difficult to provide a Medicare system
funding number that is at all comparable with the aggregate spending on
Medicaid systems. Specifically, Medicaid claims systems include state
Medicaid Management Information Systems (MMIS) and the federal Medicaid
Statistical Information System (MSIS), which is being updated and
modernized as part of the Medicaid and CHIP Business Information
Solutions (MACBIS) initiative to become the Transformed-MSIS (T-MSIS).
Question. Please provide a breakdown of the Medicaid budget for
activities within CMS, for federal contractors, and for each state. Is
this funding adequate to bring all states into compliance with most of
the T-MSIS reporting requirements?
Answer. The $20.2 million in FY 2014 for CMS to develop and
maintain T-MSIS went entirely to federal contractors, including $4
million for a contractor providing technical assistance to states as
states work to come into compliance with T-MSIS reporting requirements.
This technical assistance was available to all states. We anticipate
the need for continued expenditures on MACBIS as states transition to
T-MSIS over the coming years. To this end, the FY 2016 President's
Budget requests $4 million in CMS Program Management for maintenance of
MACBIS systems.
Question. The federal Medicaid statute affords states considerable
flexibility both in how they finance their Medicaid programs and in how
they pay providers. Health care related taxes on providers and
intergovernmental transfers are commonly used by states to finance
their share of Medicaid expenditures, yet information on the taxes and
governmental transfers is not systematically collected by CMS. Provider
taxes effectively reduce Net Medicaid payments to providers. In
addition, states often make lump-sum supplemental payments, commonly
referred to as non-DSH supplemental payments to certain providers that
increase providers' compensation to the maximum federal upper limit
(FUL), thereby qualifying for additional federal matched dollars. Some
providers receive as much as 50 percent of their payments from non-DSH
supplemental payments. However, these payments are not reported to the
federal government in a consistent or useable format. Without data on
both health care related taxes and supplemental payments, we do not
know how much we are paying providers, how much we are spending for
Medicaid services, we cannot assess payment adequacy or the
relationship between payment and important outcomes. Further, without
this key information, the program is vulnerable to fraud and abuse.
What initiatives, if any, has CMS taken to collect this
information? Are there particular obstacles in collecting this
information?
Answer. We take our responsibility for oversight and federal
stewardship of the Medicaid program very seriously, including requiring
that states correctly report their Medicaid expenditures so that we can
ensure Federal Medicaid funds are appropriately spent. In 2013, to
improve transparency into supplemental payments, CMS began requiring
states to submit upper payment limit (UPL) documentation on an annual
basis, allowing CMS and states to have a better understanding of the
variation in rate levels, supplemental payments, total providers
participating in the programs, and the funding supporting each of the
payments described in the UPL documentation.
Question. What steps are you taking to ensure that your agency
Administrators are addressing and coordinating on an ongoing basis on
issues and programs that intersect?
Answer. The complex issues the Department deals with often cross
Agency boundaries. The Department takes coordination very seriously.
The Department has many mechanisms to encourage coordination on its
cross-cutting issues and programs, and has internal processes to ensure
that public documents fully reflect the views of the Department and not
individual agencies. Some of these are formal and of long-standing. For
example, for almost twenty years, the Department's Data Council, co-
chaired by officials from the Agency for Healthcare Research and
Quality and the Office of the Assistant Secretary for Planning and
Evaluation, has coordinated data policy for the Department and its
agencies through regular meetings, shared work products, and
coordinated data policy.
Other groups are established to draw and share expertise from
across the Department on issues of current concern. One such example is
a trans-HHS taskforce, the Healthy Weight, Nutrition and Physical
Activity (HWNPA) workgroup. This group is convened by the Office of the
Assistant Secretary for Health and allows Agency representatives to
share information on their activities addressing issues such as school
nutrition, childhood obesity, healthy weight measures, and walking and
walkability. As part of the annual budget process, HHS reviews all
programs to eliminate duplicative activities either by eliminating
programs or changing the scope of a program.
Every quarter, our agencies meet to discuss the HHS high priority
goals, for example, eliminating healthcare associated infections (HAIs)
and reducing the use of tobacco products, that involve many HHS
agencies. These meetings foster communication and ensure that HHS
efforts are coordinated. For example, AHRQ has developed best practices
for health care providers to reduce HAIs, CDC monitors the prevalence
of HAIs, and CMS distributes best practice information to providers.
Regular meetings ensure that efforts are not duplicated but rather that
each agency's efforts supports the efforts of its fellow agencies.
For the second time this year, HHS will undertake a review of its
twenty-one strategic objectives and grade itself on our success meeting
those objectives. Part of that process will focus on coordination and
duplication and those assessments will be publically available.
Question. Specifically, with regard to Medicaid, there are
financing, quality of care and program integrity issues that providers
and public entities have identified as duplicative and sometimes
conflicting (e.g. with FQHCs and Medicaid, with 340B entities and
Medicaid, with SAMHSA funded entities and Medicaid funding streams
including the new Sec. 223 behavioral health clinics, privacy
regulations that prevent care coordination, etc.). From among these,
what are you as the Secretary prioritizing?
Answer. As HHS operates, improves and modernizes existing programs,
we always strive to ensure that these programs work in coordination
with programs within our Agencies and throughout the Department. We
will continue to strive for continuous improvement making the programs
we steward work better for the people they serve while consistently
improving their efficiency.
For example, in April 2014, the Protecting Access to Medicare Act
was signed into law, funding a demonstration program to allow eight
participating states to make payments to Certified Community Behavioral
Health Clinics based on a prospective payment system. The goal of the
demonstration is to expand access to community mental health services
and strengthen the quality of care offered at those centers. CMS has
been focused on working collaboratively with other agencies to
implement this important program. While CMS is responsible for
determining the details of the payment system, SAMHSA is responsible
for setting the criteria that clinics will have to meet to be eligible
for the demonstration program, and ASPE is helping with both of those
components as well as with designing the evaluation of the
demonstration. CMS is also working with SAMHSA and other HHS partners
to incorporate comments received on draft criteria published for
comment in February 2015 to ensure coordination of federal guidance.
Question. How is the Department managing other issues on an ongoing
basis to ensure the integrity of the Medicaid program?
Answer. States and the Federal Government share mutual obligations
and accountability for the integrity of the Medicaid program and the
development, application and improvement of program safeguards
necessary to ensure proper and appropriate use of both Federal and
state dollars.
This Federal-state partnership is central to the success of the
Medicaid program, but it depends on clear lines of responsibility and
shared expectations. We take seriously our role in overseeing the
financing of states' Medicaid programs, and we continue to look for
ways to refine and further improve our processes.
Medicaid is currently undergoing significant change as CMS and
states implement reforms to modernize and strengthen the program and
its services. While focused on implementation of the Affordable Care
Act, CMS has been working closely with states to implement delivery
system and payment reforms. CMS has encouraged state efforts with new
tools and strategies to improve the quality of care and health outcomes
for beneficiaries and to promote efficiency and cost effectiveness in
Medicaid. And, as always, CMS works to ensure appropriate financial
management mechanisms are in place to ensure dollars are spent
appropriately.
Question. What, if any, role have state Medicaid agencies or states
more generally had in the new Medicare Health Care Payment and
Innovation Network? Can you describe how the Department plans to
incorporate them going forward?
Answer. In January 2015, HHS announced the creation of the Health
Care Payment Learning and Action Network. The Health Care Payment
Learning and Action Network (``Network'') is being established to
provide a forum for public-private partnerships to help the U.S. health
care system (both private and public) meet or exceed recently
established Medicare goals for value-based payments and alternative
payment models. To help drive the health care system towards greater
value-based purchasing--rather than continuing to reward volume
regardless of quality of care delivered, HHS has set a goal of moving
30 percent of Medicare payments into alternative payment models by the
end of 2016 and 50 percent into alternative payment models by the end
of 2018. Alternative payment models include models such as Accountable
Care Organizations (ACOs), bundled payments, and advanced primary care
medical homes. Overall, HHS seeks to have 85 percent of all traditional
Medicare payments tied to quality or value by 2016 and 90 percent by
2018 through programs such as the Hospital Value Based Purchasing and
the Hospital Readmissions Reduction Programs.
States and state Medicaid agencies are critical partners in this
effort. Engagement with state Medicaid programs and commercial payers
can help increase alignment, reduce burden on providers, and accelerate
progress to deliver higher quality care. The first meeting of the
Network will be held on Wednesday, March 25th, and we expect
significant participation from both entities. For example, we expect
Governor Jack Markell of Delaware to participate in the event and
announce goals for the state of Delaware to move their health care
system towards rewarding quality over quantity.
Question. How is HHS/CMS planning to work with states to advance
community integration initiatives and balancing competing priorities
given limited state and federal resources?
Answer. Many states choose to provide home and community-based
alternatives to institutional care to allow Medicaid beneficiaries to
receive services in the most integrated setting. The Centers for
Medicare and Medicaid Services (CMS) works with these states to ensure
beneficiaries receive long-term services and supports (LTSS) in
settings that are integrated in and support full access to the greater
community. In addition, CMS administers the Money Follows the Person
and Balancing Incentive grant programs to provide participating states
additional resources to assist in rebalancing their LTSS systems to
transition Medicaid beneficiaries from institutions to the community.
Question. Does CMS require specific new authority to support states
that seek to improve Medicare and Medicaid coordination using the
Medicare Advantage Duals Special Needs Plans? If not, what have you
done to accomplish this to date and what are your plans for doing so?
What are the barriers to aligning traditional MA, MA-DSNPs and
Medicaid?
Answer. The President's budget includes two specific
recommendations for legislative authority that would allow CMS and its
state partners to improve Medicare and Medicare coordination through D-
SNPs. The first recommendation would provide the Secretary of HHS the
authority to implement an integrated appeals system for Medicare-
Medicaid enrollees of health plans that integrate Medicare and Medicaid
benefits, such as D-SNPs. This legislative proposal was also included
in the President's Budget for Fiscal Year 2015 and the FY2013 Report to
Congress from the CMS Medicare-Medicaid Coordination Office. The second
recommendation would provide CMS and states the ability to perform
cooperative reviews of D-SNP marketing materials for compatibility with
a unified set of standards, reducing the burden on CMS, the states, and
plans, and resulting in a more uniform message to Medicare-Medicaid
enrollees.
States that seek to improve Medicare and Medicaid coordination
using the Medicare Advantage Duals Special Needs Plans (D-SNPs) can
structure their State Medicaid Agency Contracts--required by all D-
SNPs--to encourage better integration, and may require full integration
of Medicare and Medicaid services under a single Medicare Advantage
Organization. CMS has worked with a number of States seeking to move
toward higher integration of their D-SNPs on how best to structure
their State Medicaid Agency Contracts.
We are working to extend administrative flexibilities to D-SNPs
that meet a high standard for integration of Medicare and Medicaid
benefits with a particular focus on:
Development of materials that better communicate the integrated
benefit to the Medicare-Medicaid enrollee population, including
materials in alternative formats and languages other than
English for Medicare-Medicaid enrollees who require such
materials;
Enhanced coordination of state and CMS regulatory oversight; and
Integration of state quality-of-care priorities into the care
delivery provided by highly integrated D-SNPs.
Of note is that under current CMS requirements, all D-SNPs must
meet the same requirements applicable to all Medicare Advantage plans,
regardless of the level of integration.
Question. Congress has passed statutory language related to
provider enrollment issues. CMS has indicated that it is also focusing
resources on this issue. What barriers (policy and/or systems) are you
encountering to streamline and improve efficiencies for processes
within and between Medicare and Medicaid?
Answer. In 2014, CMS finalized rules that strengthen oversight of
Medicare providers and suppliers and protect taxpayer dollars from bad
actors. These new safeguards are designed to prevent physicians and
other providers and suppliers with unpaid debt from re-entering
Medicare, remove providers and suppliers with patterns or practices of
abusive billing, and implement other provisions to help save more than
$327 million annually. Authorized by the Affordable Care Act and by
provisions in the Social Security Act, the new changes allow CMS to:
Deny enrollment to providers, suppliers and owners affiliated with
any entity that has unpaid Medicare debt; this will prevent
people and entities that have incurred substantial Medicare
debts from exiting the program and then attempting to re-enroll
as a new business to avoid repayment of the outstanding
Medicare debt.
Deny or revoke the enrollment of a provider or supplier if a
managing employee has been convicted of a felony offense that
CMS determines to be detrimental to the Medicare program and
its beneficiaries. The recently implemented background checks
will provide CMS with more information about felony convictions
for high risk providers or suppliers.
Revoke enrollments of providers and suppliers engaging in abuse of
billing privileges who demonstrate a pattern or practice of
billing for services that do not meet Medicare requirements.
In addition, state Medicaid agencies are required to deny
enrollment or terminate the enrollment of any provider that is
terminated on after January 1, 2011 under Medicare or, for cause, by
other states' Medicaid (or CHIP) programs. CMS tools available to help
states facilitate this requirement include the following:
CMS has been providing states direct access to the Medicare
provider enrollment system known as PECOS (Provider Enrollment,
Chain, and Ownership System) since April 2012. This system
enables states to review all current and historic information
on each Medicare provider and supplier, including a National
Provider Identifier, Taxpayer Identification Number, and legal
business name. To increase efficiency and accessibility for
states, CMS has been creating a regular data extract of key
Medicare enrollment information since January 2013.
In December 2013, CMS developed and launched an enhanced
collection, storage, and delivery process for Medicaid
termination notifications. A CMS system notifies state Medicaid
agencies of terminations submitted by other state Medicaid and
CHIP programs as well as all Medicare revocations.
All states can request and gain access to the CMS Fraud
Investigation Database (FID), which contains information on
investigations, cases, and payment suspensions pertaining to
Medicare providers. The database contains numerous searchable
fields that can assist states in identifying problem providers
who are enrolled in both Medicare and Medicaid.
Finally, the Federal Coordinated Health Care Office (Medicare-
Medicaid Coordination Office) works to improve the coordination between
the Federal Government and states to enhance access to quality services
for individuals who are enrolled in both Medicare and Medicaid. Since
2011, the Medicare-Medicaid Coordination Office has undertaken the
Alignment Initiative, which has served as CMS' guide for streamlining
Medicare and Medicaid program rules, requirements, and policies.
Department and CMS-wide Medicare-Medicaid workgroups have been formed
to work on the opportunities for alignment identified through the
Alignment Initiative, which have included provider requirements.
medicare advantage and part d
Question. The Medicare Advantage and Part D programs have continued
to grow since their inception, and are expected to continue that growth
and represent an increasing proportion of the Medicare population.
However, funding for important program integrity and audit activities
for these programs does not reflect an equitable and appropriate
distribution of funds.
In the FY 2015 HCFAC (Health Care Fraud and Abuse Control) program
budget, approximately $9 million was budgeted for audit, oversight and
enforcement of Medicare Advantage and Part D sponsors. Meanwhile,
approximately 30 percent of all Medicare eligible beneficiaries are
enrolled in the Medicare Advantage program, and approximately 70
percent are enrolled in Part D. My understanding is that with the
current level of funding, it will take approximately seven years for
CMS to complete audits of all Medicare Advantage and Part D sponsors.
Can you tell me what amount of money is budgeted for this important
work in FY 2016?
Answer. The FY 2016 President's Budget includes a request for
$184.9 million in HCFAC discretionary funding for Medicare Parts C and
D oversight and program integrity activities. This funding will
strengthen Medicare Parts C and D efforts by the Medicare Drug
Integrity Contractors to proactively fight fraud; improve safeguards
that ensure the accuracy of payments to Medicare Advantage
Organizations and Part D Prescription Drug Plans; and invest in
additional program, compliance, and risk adjustment data validation
(RADV) audits, and system updates for our contracting and plan
oversight efforts.
Question. Do you think this amount of funding is sufficient for
oversight of these important programs?
Answer. The HCFAC funding requested in the President's Budget is
consistent with the level included in the Consolidated and Further
Continuing Appropriations Act, 2015, with the full cap adjustment
included in the Budget Control Act of 2011. With the full discretionary
HCFAC cap adjustment funding, requested in FY 2016, CMS will be able to
fully support Medicare Parts C and D activities to fight fraud, waste,
and abuse, and invest in additional audits and system updates to our
contracting and plan oversight efforts.
medicare alternative payment models/
center for medicare and medicaid innovation
Question. Just last week, HHS announced plans to dramatically
increase the percentage of Medicare payments made under alternative
payment models to 50 percent by 2018. I'm concerned about going down
this path too quickly when we know there are risks to beneficiaries and
the evidence on their results is limited. In the 4 years that the CMS
Innovation Center has been testing alternative payment models, we
haven't seen many evaluation reports, and of the programs that CMS has
evaluated so far, results are mixed at best.
Do you agree that we need to fully understand the implications of
alternative payment models on patient access and quality of care before
encouraging greater participation in these models?
Answer. We are taking action to build on progress made in improving
health care so patients and their families can get the best care
possible. Our goal is to spend our health care dollars more wisely,
so--ultimately--people can live healthier lives. To achieve better
care, smarter spending and healthier people, we are focused on three
key areas: (1) improving the way providers are paid, (2) improving and
innovating in care delivery, and (3) sharing information more broadly
to providers, consumers, and others to support better decisions while
maintaining privacy.
In support of the alternative payment model goals, we are testing a
variety of models at a sufficiently large scale to produce valid data
on results, to understand the dynamics of how a model might operate
under a variety of market circumstances and also to foster and
encourage a climate of innovation and quality improvement within the
provider community. So that we fully understand the implications of our
efforts, we conduct a robust evaluation of all of our models on an
ongoing basis throughout the life of the model. In every model
evaluation, we strive to determine the impact of the innovation on
patient and provider experiences, outcomes and quality of care, and
program expenditures. We make sure that our models are well designed--
and we use all appropriate scientific and statistical methods to study
the impact of the model test relative to what would have happened in
the absence of that model test. We study these results carefully in
making decisions about models.
Question. The CMS Innovation Center Bundled Payments for Care
Improvement (BPCI) Initiative--which pays providers a single
``bundled'' payment for hospital and/or post hospital service--is the
largest initiative undertaken by the CMS Innovation Center. Yet, as of
October last year, over 95 percent of the participants in the program
are not currently receiving bundled payments.
Why are so few BPCI participants currently receiving bundled
payments?
Answer. Applicants had two opportunities to enter the Bundled
Payments for Care Improvement (BPCI) initiative. Once screened,
interested organizations entered into Phase 1 of the models 2, 3 or 4
of BPCI. We had more than 890 participants enter Phase 1 over the
course of this initiative between January 2013 and April 2014. Phase 1
Participants do not receive bundled payments. They receive baseline and
monthly claims data that will help participants determine the clinical
episodes for which they see an opportunity for care redesign. Phase 1
is also the preparatory stage of the initiative during which CMS works
with participants and their partners through education and shared
learning activities to prepare for transition to Phase 2, which is the
risk bearing stage of BPCI. In Phase 2, participants are financially
responsible to Medicare if their expenditures are higher than a target
price established by Medicare for the episode(s) in which they are
participating. Participants in Phase 2 sign an agreement with CMS and
begin receiving bundled payments. Participants began entering Phase 2
in October of 2013. As of January 26, 2015 there are 105 participants
in phase 2 of BPCI. We expect more organizations to enter Phase 2 in
July at which time the opportunity to participate in Phase 1 will end.
As more participants enter Phase 2, the number of awardees receiving
bundled payments will increase.
Question. The Bundled Payment for Care Improvement Initiative also
does not tie provider payment to patient quality of care--what is the
agency doing to protect patients treated by providers participating in
this initiative?
Answer. CMS protects beneficiaries treated by BPCI awardees in a
number of ways. BPCI awardees that have an agreement with CMS are
required to submit their approach to care redesign and quality
performance targets to CMS for approval. CMS conducts reviews to make
certain BPCI awardees are in compliance with their care redesign
methods.
We continually monitor patient quality of care. All sites
participating in BPCI are required to submit extensive quality related
data to CMS for evaluation. This data includes participant baseline
characteristics (i.e. patient case mix, payment incentives experiences,
health information exchange), quality monitoring measures (i.e.
medication reconciliation at admission and discharge, patient death or
serious injuries reportable to the FDA, etc.), and status of care
redesign. Participants must comply with all relevant quality reporting
and incentive programs for providers enrolled in Medicare. In addition,
beneficiaries may call 1-800-Medicare with any questions or speak to
their physicians about the initiative.
Question. To encourage greater provider participation in the
bundled payments, has CMS considered adjusting the BPCI to build in
protections for providers treating patients who need specialized
treatment?
Answer. Making certain that our beneficiaries receive high quality
health care--and that the quality of their care improves over time--is
one of our most important goals. CMS does make adjustments in BPCI that
mitigate provider financial risk for certain unrelated services. CMS
also mitigates financial risk for extreme levels of expenditure that
could occur during an episode of care. These policies help in making
sure that patients in BPCI will get any type of treatment that they
need.
For example, CMS maintains and updates lists of services that are
excluded from BPCI Clinical Episodes in Models 2-4 for both Part A and
Part B services. Services that are considered unrelated are not
included in the episode and the provider or supplier will receive
normal Fee-for-Service (FFS) payment. These lists are updated
periodically and include things like heart transplants and hemophilic
clotting factors.
With regard to extreme levels of expenditure, BPCI participants in
Models 2 and 3 also have the discretion to choose three different
episode durations and three different risk tracks on a quarterly basis.
Depending on the selected risk track, BPCI participants bear 100
percent financial risk up to a certain threshold and then are liable
for only 20 percent of all spending beyond the threshold. This
mitigates financial risk for episode expenditures above the upper
threshold while still providing an incentive for the provider to
provide services efficiently for beneficiaries with high episode
expenditures.
Question. The CMS Innovation Center is charged with testing
``innovative payment and service delivery models to reduce program
expenditures . . . while preserving or enhancing the quality of care''
in federal health care programs. Yet, many of the measures the
Innovation Center is intending to use to monitor quality of care focus
on the amount of health services patients receive, not the effect those
services have on patient health.
If reducing health services is being used as a proxy for quality of
care, how can we be certain that providers are not stinting on care in
an effort to meet CMS's measures?
Answer. Making certain that our beneficiaries receive high quality
health care--and that the quality of their care improves over time--is
one of our most important goals. For each model that CMS tests, CMS
includes a monitoring and evaluation effort to address issues of
patient protection and safety, including continual assessment of
quality of care. We monitor for issues related to patient safety, care
stinting and patient access to care, patient freedom of choice, and
provider induced demand for unnecessary care. The monitoring approach
is multipronged and utilizes a variety of measures and data sources
depending on the specifics of the model. We use measures that provide
information on patient case-mix, clinical process and outcomes,
utilization patterns, and patient reported experience of care.
Information comes from a variety of sources including claims, patient
and proxy interviews, patient assessment information, and in
qualitative sources such as site visits and interviews. These findings
are tracked, examined and reviewed on an ongoing basis, typically
quarterly. These efforts would allow us to quickly identify potentially
negative shifts in patterns of care, including stinting of care. The
precise monitoring strategy adopted is tailored to the unique
circumstances of every model. The choice of measures is a reflection of
the possible provider behaviors that could result from the incentives
being tested in that model.
Question. What is CMS doing to ensure that the quality of care
provided to patients in alternative payment models is equivalent or
better than that provided to patients in traditional Medicare?
Answer. Making certain that our beneficiaries receive high quality
health care--and that the quality of their care improves over time--is
one of our most important goals. CMS does this in two ways--real-time
monitoring and rapid-cycle evaluation. First, each model has a
monitoring strategy that is customized to the specific circumstances
and model financial structure. Before launching a model, CMS carefully
considers unintended consequences, such as care stinting, and designs
monitoring strategies that actively check for such adverse outcomes. By
receiving regular updates from 1-800-MEDICARE, a model team can quickly
learn of any potential issues as they arise. Other monitoring
strategies include: analysis of claims data to identify abnormal
billing patterns, audits of participants, and analysis of EHR-based
quality measures.
Second, every model has a rigorous, yet rapid-cycle, evaluation
conducted by an independent team that unfolds concurrently with model
implementation. A key component of each evaluation is measuring care
quality. While each model is different and requires a customized
evaluation approach, common components include: regular surveys of
beneficiary experience of care, analysis of claims-based quality of
care outcomes, and qualitative data collection, such as patient and
caregiver focus groups. By conducting these activities as the model is
implemented, the evaluation can quickly identify potential issues with
care quality and allow CMS to take action.
Finally, Innovation Center models include incentives to provide
more efficient and better quality care. For example, shared savings
components of models generally require participants to meet or exceed
quality benchmarks relative to traditional Medicare.
competitive bidding program--enteral nutrition
Question. In the FY2015 omnibus appropriations bill, Congress
requires CMS to conduct a study of the impact of the competitive
bidding program. Specifically, the study is on enteral nutrition and
requires CMS to submit a report within 90 days after enactment that
assesses the impact of the program on changes in treatment patterns of
enteral nutrition patients residing in skilled nursing facilities,
nursing facilities, and intermediate care facilities, including the
impact on the patient's health, whether access has been reduced, and if
costs have increased due to new suppliers unfamiliar with the clinical
demands associated with such care.
What is the status of this report?
Answer. CMS is currently reviewing initial findings from a data
analysis contractor and is on track to submit this report later this
spring.
biologics and biosimilar drugs
Question. As currently written, law requires payment for a
biosimilar product to be the sum of the average sales price (ASP) of
the biosimilar product plus 6 percent of the reference (innovator)
biologic. However, there are payment ambiguities that the law does not
address:
The law does not address coding for a biosimilar, which is a
critical component of determining payment. Specifically, does CMS
intend to assign a separate J-code for a biosimilar product?
Answer. CMS will address coding and payment for biosimilars later
this year.
Question. The law does not address payment of multiple biosimilars.
How will CMS pay a 2nd, 3rd, etc. biosimilar? Some interpret the law to
say that the weighted average ASP of the biosimilars plus 6 percent of
the reference biologic will be the payment for all of the biosimilars.
Others read the law to say that the ASP of each biosimilar plus 6
percent of the reference biologic will be the rate for each biosimilar.
Answer. CMS is currently considering this question and expects to
provide further guidance later this year.
Question. The payment structure in the law detailed above refers to
a biosimilar product but not a biosimilar product that is
interchangeable. What are CMS's views on basing the payment of a
biosimilar product on the reference product for which it is not
interchangeable as determined by the FDA? Is this the intent of the
law? Is this sound policy?
Answer. CMS is currently considering the statutory basis for coding
and payment of biosimilars and will provide further guidance later this
year.
Question. Under current Medicare Part D rules, health plans are
permitted to switch a patient who is stable on a biologic to another
biologic without the consent of the physician or patient. The
introduction of biosimilars on the market presents new safety concerns
not envisioned by current Part D rules and requirements.
Does CMS intend to add safeguards to the Part D formulary
requirements that protect patients who are stable on a biologic from
being switched to a biosimilar that is not interchangeable?
Answer. Part D rules allow plans to consider requesting use of
biosimilars instead of reference biological products. Under Part D
rules, if a plan requests and is approved for a mid-year formulary
change to substitute a biosimilar for the reference product, all
beneficiaries currently receiving the reference product will continue
to be able to receive that product for the remainder of the plan year.
For new plan years, beneficiaries receiving a reference biological
product who enroll in a plan that only lists the biosimilar will be
eligible for a transition fill of the reference product and will have
the right to request a formulary exception to continue on the reference
product. The appeal process includes clinical factors that have been
successfully applied since the initiation of the Part D program.
Question. Given the importance of interchangeability and other
biosimilar-related matters, is CMS collaborating with FDA to ensure
consistent interpretation and implementation of the law?
Answer. CMS regularly communicates with the FDA about drug related
matters.
Question. FDA officials stated several times last year that we
would see a number of pending guidance documents on biosimilars before
the end of the year, including one on interchangeability, but we have
not seen those and to date, we have four pending biosimilar
applications before the Agency.
Can you please inform the Committee when we can expect to see
guidance on interchangeability?
Answer. FDA has so far issued six draft guidances, all available on
the FDA website. These documents give clear information on the
requirements for biosimilars in terms of structure, safety, purity,
potency, and other factors. We believe we have promptly and thoroughly
analyzed and explained the requirements of the Act for all prospective
manufacturers of biosimilar products; however, we will continually
update these documents and issue additional guidances as needed.
With respect to interchangeability, FDA opened several dockets to
solicit public comments on interchangeability of biosimilar products
and is currently in the process of scientific review of these comments
and developing the draft guidance. We understand the urgency of
publishing this guidance and will do so as soon as possible.
Question. It now appears that in 2015 FDA will approve the first
biosimilar drugs stemming from authority Congress provided in 2010.
What is the Department's estimate of impact of the introduction of
biosimilars on government spending this year and over the next 5 and 10
years?
What are the unit cost and volume assumptions behind these
estimates?
Does your estimate factor in added office visit and hospitalization
costs that can be incurred when a stable patient is switched and has to
be stabilized on the new drug?
Answer. The Department has not made an independent estimate of the
impact of biosimilars on prescription drug spending in the U.S. The
Department has closely monitored and reviewed estimates made by the
Congressional Budget office and the experience with biosimilar products
in Europe. In Table 1 below we summarize the estimates made by CBO. The
most recent estimates (from 2008 and 2009) suggest that 10-year
government savings stemming from the introduction of biosimilars will
be in the range of $9.2 to $13 billion. As you will note the reports on
those estimates do not include explicit volume assumptions. They also
do not assume any costs of switching.
We have also been tracking the European experience with the
introduction of biosimilar products. Recent research papers and
published data suggest mixed experiences across Europe with respect to
penetration rates for biosimilar products and price reductions linked
to the competition they create. Germany, the UK and Sweden have had
among the higher rates of biosimilar penetration and maybe instructive
regarding potential savings in the U.S.\1\ The penetration rate varies
considerably by type of product. It can be as low as 9 percent to 18
percent or as high 55 percent to 73 percent in those nations. The price
experience for biosimilars also ranges. Data for Germany, the UK and
Sweden show biosimilar prices that are 16 percent to 55 percent below
pre-biosimilar introduction prices. Grabowski and colleagues report
price reductions on the order of 25 percent.\2\
---------------------------------------------------------------------------
\1\ IMS Institute, Assessing Biosimilar Uptake and Competition in
European Markets, October 2014.
\2\ Grabowski HG, R Guha and M Salgado (2014), Regulatory and Cost
Barriers Are Likely to Limit Biosimilar Development and Expected
Savings in the Near Future, Health Affairs 33(6):1048-1057.
For all of the reasons described above, modeling the potential cost
impact of biosimilars is a complex task. We have been assessing
evidence and closely monitoring the European experience with
biosimilars in order to examine which of their evidence is most
appropriate to use for theU.S. health care system. We also must
carefully examine the extent to which current law and regulation which
affects drug pricing under Medicare and Medicaid will potentially
influence both price reductions for biosimilars and their market
---------------------------------------------------------------------------
penetration.
TABLE 1--Government Projections for Biosimilars Savings
----------------------------------------------------------------------------------------------------------------
CBO December CBO December
2008 (w/out 2008 (w/
Source Name CBO June 2008 Medicare Part B Medicare Part B CBO March 2009
Payment Rate Payment Rate (page 18)
Modification) Modification) *
----------------------------------------------------------------------------------------------------------------
Source Website.............................. ** *** *** ****
----------------------------------------------------------------------------------------------------------------
1-Year Timeline............................. 2013 2010 2010 n/a
----------------------------------------------------------------------------------------------------------------
1-Year Government Savings (2013)............ $52 M $100 M $200 M n/a
----------------------------------------------------------------------------------------------------------------
5-Year Timeline............................. 2009-2013 2010-2014 2010-2014 n/a
----------------------------------------------------------------------------------------------------------------
5-Year Government Savings (2009-2013)....... $52 M $100 M $200 M n/a
----------------------------------------------------------------------------------------------------------------
10-Year Timeline............................ 2009-2018 2010-2019 2010-2019 2009-2019
----------------------------------------------------------------------------------------------------------------
10-Year Government Savings (2009-2018)...... $6.6 B $9.2 B $12.2 B $13 B
----------------------------------------------------------------------------------------------------------------
Q2: Unit Cost and Volume Assumptions........ n/a n/a n/a n/a
----------------------------------------------------------------------------------------------------------------
Q3: Are Indirect Costs of Switching Factored No No No No
into Estimate?.............................
----------------------------------------------------------------------------------------------------------------
* Assumes the Medicare Part B payment system is modified to place the follow-on biologic in the same billing
code as the original brand-name product.
** https://www.cbo.gov/sites/default/files/s1695.pdf.
*** http://www.cbo.gov/sites/default/files/12-18-healthoptions.pdf.
**** https://www.cbo.gov/sites/default/files/03-20-presidentbudget.pdf.
racs and improper payment
Question. The improper payment rate for Medicare has been
increasing in recent years, from 8.6% in FY 2011 to 12.7% in FY 2014.
At the same time, the entities charged with reducing improper payments,
Medicare's recovery auditors, have seen their work curtailed in the
past year.
What is CMS's plan to put the RACs back to work and bring the
improper payment rate down going forward?
The RAC program seems to be an effective tool to fight against
improper payments in the system.
Given that the error rate grew to 12.7% last year, how do we expand
the RAC program to help lower the error rate?
Answer. HHS strives to manage programs in an efficient manner that
balances the need to limit burden on Medicare providers with our
responsibility to protect Trust Fund dollars. HHS has carefully
evaluated the Recovery Audit program, and announced a number of changes
to it in response to industry feedback.\3\ HHS is confident that these
changes will result in a more effective and efficient program through
enhanced oversight, reduced provider burden, and more program
transparency. These changes will be effective with each new contract
award beginning with the Durable Medical Equipment, Home Health and
Hospice Recovery Audit contract awarded on December 30, 2014.\4\ The
President's FY 2016 Budget also includes a proposal to permit HHS to
retain a portion of recovered funds to implement corrective actions
identified through the Recovery Audit program.
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\3\ See http://www.cms.gov/Research-Statistics-Data-and-Systems/
Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-
Program/Downloads/RAC-Program-Improvements.pdf.
\4\ Due to a post-award protest filed at the Government
Accountability Office (GAO), CMS has delayed the commencement of work
under the national DMEPOS/HH&H, Region 5, Recovery Audit contract.
In all, Medicare receives about 3.3 million fee-for-service claims
each day, or 1.2 billion claims a year. Due to the high number of
claims, HHS is committed to paying claims in an accurate and timely
manner and has a comprehensive strategy in place to address the
Medicare improper payment rates. For the Medicare program, these
strategies include strengthening provider enrollment safeguards to
confirm only legitimate providers are enrolled and preventing improper
payments by using edits to deny claims that should not be paid. HHS
also develops targeted demonstrations in areas with consistently high
rates of improper payments and, as your note, operates the Medicare
fee-for-service Recovery Audit Program to identify, recover, and
---------------------------------------------------------------------------
prevent improper payments.
The Recovery Audit Program identifies areas for potential improper
payments and offers an opportunity to provide feedback to providers on
future improper payment prevention. HHS uses Recovery Auditors, as
required by law,\5\ to identify and correct improper payments by
reviewing claims on a post payment basis. HHS responds to the
vulnerabilities identified by the Recovery Auditors by implementing
actions that will prevent future improper payments nationwide. Since
full implementation in FY 2010 through the fourth quarter of FY 2013,
the Recovery Auditors have returned over $5.4 billion to the Medicare
Trust Fund. Additionally, HHS Medicare Administrative Contractors
(MACs) review claims and conduct provider education to help providers
avoid documentation errors and other sources of improper payments,
including articles or bulletins providing narrative descriptions of the
claim errors identified and suggestions for their prevention. Other
efforts include system edits for improper payments that can be
automatically prevented prior to payment. HHS encourages collaboration
between Recovery Auditors and MACs to discuss improvements, areas for
possible review, and corrective actions that could prevent improper
payments.
---------------------------------------------------------------------------
\5\ The Recovery Auditor demonstration project was required by
section 306 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, and the Congress expanded the program in
section 302 of the Tax Relief and Health Care Act of 2006, directing
CMS to implement a permanent national recovery audit contractor program
by January 1, 2010.
---------------------------------------------------------------------------
medicare appeals backlog
Question. The Administration recognizes the backlog in Medicare
appeals as a problem and has set forth a series of legislative
proposals to address it. Yet current policy is fueling large numbers of
appeals--namely that ALJs are not bound by Medicare policy and certain
ALJ's have been found by the Inspector General to rule with providers
almost 100% of the time.
Do you agree the current system encourages providers to appeal
frequently and contributes to the backlog?
Answer. The Department is committed to paying claims right the
first time. However, we understand and respect the right of appeal.
Administrative Law Judges (ALJs) administer the third level of Medicare
appeals at the Office of Medicare Hearings and Appeals (OMHA). ALJs are
bound to follow the same authorities that bind lower level
adjudicators, with the exception of informal policy guidance and
manuals which CMS may issue to its contractors. Although this leads to
a common misperception that ``Administrative Law Judges are not bound
by Medicare policy,'' the current regulatory scheme does bind CMS
Qualified Independent Contractors, ALJs, and the Medicare Appeals
Council to follow all laws and regulations pertaining to the Medicare
and Medicaid programs, as well as CMS Rulings and National Coverage
Determinations. These adjudicators are also required to give
substantial deference to other CMS and Medicare Administrative
Contractor guidance, including Medicare manuals and Local Coverage
Determinations.
CMS establishes the policies governing Medicare. In 2010, OMHA
began a program of coordinated training using policy experts from CMS
and the Medicare Appeals Council to provide training to adjudicators
throughout the year on Medicare policy. OMHA has enhanced its quality
assurance program, and introduced a tool for ALJs and their staff to
access and search Level IV Medicare Appeals Council decisions. OMHA
also continues to provide ALJ and their staff with regular updates on
relevant CMS rulemaking and changes to Medicare manuals. As described
in the FY 2016 President's Budget, CMS is pursuing more resources for
contractors to participate in ALJ hearings to help ensure that ALJs
have all of the information necessary to make a decision, not just the
views of the appealing party. Together, these measures will help ensure
ALJs have the necessary training and information to make informed
decisions, and that adjudicators follow binding authority and give
appropriate deference to guidance materials.
Although the potential for a more favorable result is certainly a
factor that prompts parties to appeal, thus, increasing the appeal
rates, there are other factors which may have a more significant impact
on appeal rates. Low jurisdictional thresholds in terms of the monetary
amount in controversy required to appeal to OMHA combined with the lack
of a filing fee to appeal, provide no incentives for providers and
suppliers to evaluate the merits of their claims prior to filing which
could encourage them to continually appeal. The Department has proposed
in the FY 2016 President's Budget legislative measures to address these
drivers by establishing a refundable filing fee at each level and
increasing the monetary amount that must be at issue in order to appeal
to the Office of Medicare Hearings and Appeals. These measures will
provide incentives which will encourage appellants to evaluate their
claims prior to filing and to only appeal meritorious claims.
Question. How will the proposals in the President's Budget, such as
case consolidation and a refundable filing fee for providers who
prevail on appeal, reduce the backlog of cases resulting from
providers' decisions to appeal Medicare contractors' decisions?
Answer. The Department has a three-pronged approach to addressing
the increasing number of Medicare appeals and the current backlog:
First, invest new resources at all levels of appeal to increase
adjudication capacity and implement new strategies to alleviate the
current backlog, as described in the FY 2016 President's budget.
Second, take administrative actions to reduce the backlog and to
appropriately resolve claims at earlier levels of the appeals process.
Third, pursue legislative proposals described in the President's FY
2016 Budget that provide additional funding and new authorities to
address this urgent need.
Legislative proposals along with additional resources requested in
the President's FY 2016 Budget set a framework for bringing the
Medicare appeals process into balance going forward. For example, the
legislative proposal to establish a refundable filing fee at each level
of appeal will encourage providers to be more judicious in determining
what they appeal. Providing authority to consolidate appeals requests,
or group similar claims together to allow for a single decision on
multiple claims, will improve the efficiency and timeliness of the
Medicare appeals process. Increasing the minimum amount in controversy
required for adjudication by an ALJ to the Federal District Court
amount in controversy requirement will reduce the volume of claims that
could be appealed for ALJ review.
The Budget requests $270 million, an increase of $183 million above
the FY 2015 level, to address the backlog of over 800,000 pending
appeals at OMHA. The Budget includes $140 million in budget authority
and $130 million in program level funding from proposed legislation to
support new field offices and additional Administrative Law Judges
teams. It will also support appeals adjudication by less costly methods
such as settlement facilitation and the proposed Medicare Magistrate
program. The 2016 Budget invests $36.2 million to allow CMS to engage
in discussions with providers to resolve disputes earlier in the
appeals process and greater CMS participation in Administrative Law
Judge hearings at OMHA. This investment will improve the efficiency of
the Medicare appeals process at the third and fourth levels and reduce
the number of claims appealed beyond the CMS levels, enabling the OMHA
to more quickly adjudicate its current backlog. The Budget also
requests $12.5 million, an increase of $2.5 million above FY 2015
level, to hire additional staff to address Medicare appeals at Level IV
(the Medicare Appeals Council).
Question. Administrative Law Judges have been overruling
determinations made at the lower levels of appeal as a result of not
being familiar with Medicare policy. This budget calls for funding OMHA
with recoveries from the Recovery Audit Contractor program.
What assurances do we have that these dollars will be used to
educate ALJs on the proper interpretation of Medicare policy?
Answer. The President's Budget includes increased resources from
general budget authority, and program authority including recovery
audit recoveries, and filing fees for OMHA to address the backlog of
appeals, and the appeal receipts going forward. In order to address the
workload, improve the overall appeals process, and increase stakeholder
confidence in decision making, OMHA recognizes the importance of
investing in education for ALJs and their staff. Even with limited
resources in the face of significantly growing workloads, OMHA has made
education a priority, working with CMS and the Medicare Appeals Council
on coordinated training, establishing an internal cadre of seasoned
ALJs and attorney advisors to educate new staff, and providing
continuing education for existing staff. At the FY 2016 requested
funding level, OMHA would continue its commitment to providing thorough
training and continuing education for ALJs and support staff. However,
the Department notes that OMHA ALJ decisions that overturn CMS
contractor denials result from many factors, including new evidence
being presented for good cause, the appellant having an opportunity to
discuss the evidence and explain what transpired in the clinical
setting, and the authority to decline to apply Medicare manuals and
contractor policies when warranted by the circumstances (an authority
shared with the QICs and the Medicare Appeals Council). Since 2012 the
rates at which OMHA adjudicators reverse lower level decisions has
declined significantly, indicating that coordinated training efforts
have resulted in increased consistency in decision making throughout
the process.
precision medicine initiative
Question. The Administration recently announced its Precision
Medicine Initiative for the purpose of investing in a new generation of
lifesaving discoveries based on the recent advances in genetic
research. One of its goals is to assemble a database of one million
volunteers. The Utah Population Database (UPDB) today represents over
7.3 million people connected to 23 million records, including vital
statistics and medical records. It is the world's largest repository of
genealogies, public health and medical records--and it is already a
powerful resource for advancing precision medicine. Using the UPDB,
researchers at the Utah Genome Project (UGP) have so far identified
genes that contribute to more than 30 diseases, including breast
cancer, heart disease, melanoma, and colon cancer, opening the doors to
new personalized diagnostics and therapies. The UGP is housed at the
University of Utah Health Sciences and Huntsman Cancer Institute. The
UPDB is not only ahead of the curve, but also is a unique resource that
is unlikely to be duplicated. The deep family histories represented
within UPDB are made possible by a cultural emphasis within Utah on
large families and carefully assembled extensive genealogies, the
combination of which serve as a magnifying glass to uncover inherited
genetic mutations that cause specific diseases. Moreover, many of the
methods and tools used to discover these genes, and to understand their
function, were developed by scientists at the University of Utah. The
UGP is now focusing on UPDB families with exceptionally high incidences
of diseases such as type 2 diabetes, multiple sclerosis, and early-
onset heart disease. Multigenerational families have already been
identified in which dozens of relatives are affected with the same
disease, often at an unusually early age. The UGP offers a fresh angle
and a powerful approach for disease-gene identification.
Do you agree with me that the UGP is a resource that should fit
well within the goals of the Administration's Precision Medicine
Initiative?
Answer. I appreciate your interest in the President's Precision
Medicine Initiative (PMI). The National Institutes of Health (NIH)
assembled a PMI Working Group of the Advisory Committee to the NIH
Director (ACD) charged with delivering a report to the ACD in September
that articulates the vision for building a research cohort of one
million or more voluntary participants. To help inform the report, the
PMI ACD Working Group will gather additional input from a wide variety
of stakeholders through a series of public workshops over the next
several months on topics around precision medicine. One of these
workshops, which will be held at the end of May, will focus on
recommending the optimal strategy for designing and assembling the
national research PMI cohort. The output of that workshop and the ACD
Working Group process will better inform NIH and the Administration
about the ideal clinical research entities to potentially include in
the cohort. The NIH hopes that stakeholders associated with a wide
variety of national resources like UGP will be part of this dialogue.
The resulting ACD report recommendations will, if accepted by the NIH
Director, significantly inform what kind of resources are appropriate
to include in the cohort in the near and longer term.
child support enforcement
Question. Secretary Burwell, on November 17, 2014, HHS published a
Notice of Proposed Rule Making (NPRM) in the Federal Register. This
NPRM, the ``Flexibility, Efficiency and Modernization in Child Support
Enforcement Programs,'' if implemented would result in numerous
significant changes to Child Support Enforcement Programs. On December
22, 2014, former House Ways and Means Committee Chairman Dave Camp and
I wrote to you expressing our belief that the NPRM exceeds the
Department's authority to interpret Congressional intent and implement
current law. As this Administration has done on a number of occasions,
I believe this Administration is attempting to bypass the Congress in
order to enact legislative policies without appropriate action from the
legislative branch.
I, along with current Ways and Means Committee Chairman Paul Ryan,
are contemplating how best to address this current example of executive
over-reach. As we undertake this exercise, we would like to proceed in
as thoughtful a way as possible. For example, while we believe there
are aspects of the NPRM which clearly extend beyond the authority of
the Department, other elements appear to be within your proper
regulatory authority or at least are open to that interpretation.
In order to inform our review of these proposals, I request a
detailed assessment of the Department's legal justification for the
following sections which include changes to current law contemplated by
the NPRM:
Section 302.38, which includes a new prohibition precluding a State
IV-D program from disbursing child support collections to private
collection agencies;
Section 302.56, which creates a new requirement setting parameters
relative to the percent of the obligor's income which the state can
require as part of a child support payment;
Section 302.56, which sets a new criterion to prohibit the treatment
of incarceration as ``voluntary unemployment'';
Section 302.56, which creates a new Federal Financial Participation
(FFP) for parenting time;
Section 302.76, which creates an entirely new job services program
for which states are eligible for FFP;
Section 303.8, which is a new provision allowing Medicaid and CHIP to
be considered medical support;
Section 303.8, which is a new criterion preventing regular Social
Security payments from being garnished under an existing child
support order; and
Section 304.20, which details new expenditures subject to FFP. I
would encourage you to provide the Committee with as robust and
comprehensive ananalysis as possible.
Answer. Thank you for the opportunity for a dialogue on these
important issues. We would be pleased to collaborate with you on
legislation regarding them, if you wish.
Section 302.38, which includes a new prohibition precluding a State
IV-D program from disbursing child support collections to private
collection agencies.
This provision implements sections 457(a)(4) and 454(11)(B) of the
Social Security Act (Act), pertaining to distribution of the child
support collections. Section 457(a)(4) provides that, with respect to
families that never received assistance, ``the State shall distribute
to the family the portion of the amount so collected'' after deducting
the state fee required by statute. This statutory provision requires
child support collections to be distributed to the family served by the
state child support agency when the family has not received public
assistance from the state. Section 454(11)(B) of the Act provides that
``any payment required to be made under section 656 or 657 of this
title [sections 456 and 457 of the Act] to a family shall be made to
the resident parent, legal guardian, or caretaker relative having
custody of or responsibility for the child or children.'' The proposed
rule carries out the Congressional intent that moneys collected be paid
to families. In addition, the Department has authority under section
452(a)(1) of the Act to ``establish such standards for State programs
for locating noncustodial parents, establishing paternity, and
obtaining child support . . . as he determines to be necessary to
assure that such programs will be effective.'' Section 454(13) provides
that ``the State will comply with such other requirements and standards
as the Secretary determines to be necessary to the establishment of an
effective program for locating noncustodial parents, establishing
paternity, obtaining support orders, and collecting support payments
and provide that information requests by parents who are residents of
other States be treated with the same priority as requests by parents
who are residents of the State submitting the plan.''
The primary goal of the Child Support Enforcement program is to
ensure that families benefit directly from child support payments.
Accordingly, states must provide in their state child support
enforcement plans that any payments required to be made to a family
pursuant to section 457 must be made to ``the resident parent, legal
guardian, or caretaker relative having custody of or responsibility for
the child or children.'' This provision overlaps with and is reinforced
by section 453(c)(3) authorizing the same categories of individuals to
receive child support information. Each of these individuals has a
relationship with the child that imposes responsibility to protect and
further the child's best interests, while private collection agencies
historically do not. Based on information available in the past two
decades about the practices of private collections agencies, detailed
below, the Department has determined that the practices undermine the
intent of Congress, clearly stated in the statute, that payments
collected by the state for families are to be paid to the family and
not to third party creditors.
The proposed rule does not in any way regulate the relationship
between custodial parents and private collection agencies or prevent
custodial parents from entering into contracts with private collection
agencies. Instead, the intent of the proposed rule is to regulate state
distribution of funds to families in accordance with section 457(a)(4)
and 454(11)(B). The proposed rule would take state child support
agencies out of the business of indirectly enforcing private contracts
between parents and private collection agencies that purport to require
the state agency to divert child support payments to a particular
creditor of the custodial parent, or any creditor of the custodial
parent, as such distribution is not supported by title IV-D. In
addition, evidence from a number of family distribution studies
indicates that the child support program is most effective in obtaining
child support when collections are paid directly to the family. This
rule is intended to clarify policy regarding payment disbursement to
families, strengthen parents' commitment to supporting their children,
and ensure families' self-sufficiency. We believe the rule will improve
child support payment compliance and program effectiveness.
Private collection agencies enter into contracts with custodial
parents to collect child support, often times using deceptive and
abusive practices. Under the terms of such contracts, when a payment of
child support is paid to the state child support agency, the custodial
parent owes the private collection agency the contractual fee,
regardless of whether the private collection agency's efforts resulted
in the payment. State court decisions, consumer complaints, and
extensive national media coverage over the past two decades establish
that some state child support agencies were pressured to distribute
support payments collected through state efforts to private collection
companies, rather than families as required by section s 454(11)(B) and
457(a)(4). The court decisions and consumer complaints concerned a
common practice by private collection agencies of withholding between
29 and 35 percent before disbursing the collections collected by the
state to custodial parents. Such companies deceptively claimed credit
for the successful state collection efforts.
A typical example involves a custodial parent learning that after
entering into a contract with a company that she received even less
child support than before, since amounts previously distributed to her
by the state were now one-third lower. When she would confront the
company and attempt to cancel the contract, the company typically would
tell the custodial parent that she could not get out of the contract
until the entire amount of child support debt had been paid off and
then threaten a lawsuit against her. Such companies also engage in
other deceptive and abusive practices such as posing as a government
agency, fraudulently inflating the amount of child support debt to
create a ``contract for life,'' refusing to provide an account to
parents of child support payments and fees retained by the companies,
and demanding immediate payments from grandparents and threatening to
send the noncustodial parent to jail if payments are not made. Consumer
complaints also indicate that some private collection companies refuse
to release the custodial parents from the contract even when the
custodial parents complain of increased strain placed on family
relationships due to the companies' abusive practices, including harm
to the noncustodial parent's relationship with their child, or an
elevated fear of domestic violence by the noncustodial parent. We would
be happy to further brief your staff on the practices of these types of
private agencies and the need to update the regulations in this area.
Section 302.56, which creates a new requirement setting parameters
relative to the percent of the obligor's income which the state can
require as part of a child support payment.
The Child Support Enforcement Amendments of 1984 (Pub. L. 98-378)
added section 467 to require each state, as a condition of state IV-D
plan approval, to establish guidelines to establish appropriate child
support award amounts within the State. The Family Support Act of 1988
amended section 467 to require that the State's guidelines be used to
create a rebuttable presumption that the amount of the child support
order is the ``correct'' amount based on numeric income-based
guidelines. The statute further provides that a written finding or
specific finding on the record that application of the guidelines would
be unjust or inappropriate in a particular case, as determined under
criteria established by the state, shall be sufficient to rebut the
presumption in that case. The state is required to review the
guidelines at least every four years to ensure that their application
results in the determination of appropriate child support award
amounts. The Department has authority under section 452(a)(1) of the
Social Security Act to ``establish such standards for locating
noncustodial parents, establishing paternity, and obtaining child
support . . . as he determines to be necessary to assure that such
programs will be effective.'' Section 454(13) provides that ``the State
will comply with such other requirements and standards as the Secretary
determines to be necessary to the establishment of an effective program
for locating noncustodial parents, establishing paternity, obtaining
support orders, and collecting support payments and provide that
information requests by parents who are residents of other States be
treated with the same priority as requests by parents who are residents
of the State submitting the plan.''
Pursuant to sections 467, 454(13), and 452(a)(1), the Department
promulgated 45 C.F.R. 302.56 in 1985. The guidelines regulations have
been revised two times since 1985. The Department proposes to amend its
existing rule to provide that state guidelines take into consideration
the noncustodial parent's actual income and subsistence needs (as
defined by the state in its guidelines) and provide that amounts
ordered for support be based upon available data related to the
parent's actual earnings, income, assets, or other evidence of ability
to pay, such as testimony that income or assets are not consistent with
a noncustodial parent's current standard of living.
One approach that a number of states have implemented to consider
the subsistence needs of the noncustodial parents is to incorporate a
self-support reserve into their guidelines to recognize the
noncustodial parents' subsistence needs, that is, the minimum food,
shelter and other basic needs necessary to support life.\6\ For
example, New Jersey defines a self-support reserve as the amount of
income that the state determines is necessary to ensure that a
noncustodial parent ``has sufficient income to maintain a basic
subsistence level and the incentive to work so that child support can
be paid.'' This reserve amount can be either disregarded or used to
adjust the child support obligation so the noncustodial parent is able
to meet his basic needs.\7\
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\6\ Carmen Solomon-Fears. Fatherhood Initiatives: Connecting
Fathers to Their Children. Congressional Research Service(2015),
available at: http://fas.org/sgp/crs/misc/RL31025.pdf.
\7\ Rules Governing the Courts of New Jersey, Appendix IX-A
Considerations in the Use of Child Support Guidelines, Section 7.h.,
Self-Support Reserve, available at: http://www.
judiciary.state.nj.us/csguide/app9a.pdf.
The basic premise of state guidelines is to establish policies that
result in an accurate child support order based upon evidence of the
parent's ability to pay, considering the specific circumstances of the
parties and the best interests of the child. The proposed regulation in
'302.56(c)(4) gives states wide latitude to develop guidelines for fair
orders resulting in reliable child support payments to families. For
example, the proposed rule permits a state to impute income where the
noncustodial parent's lifestyle is inconsistent with claimed earnings
or income. In setting an order, a court may also take the earning
capacity of the parents into account. An example of this would be a
noncustodial parent who, despite good educational credentials and
marketable job skills, simply refuses to work. In this situation the
court may deviate from the guidelines to impute income based on earning
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capacity.
However, the evidence is clear that child support is not paid when
the child support order is set beyond the means of a noncustodial
parent to comply with the order. A growing body of research finds that
compliance with child support orders in some states, regardless of
income level, declines when the support obligation is set above 15 to
20 percent of the obligor's gross wages or income, and that orders for
excessive amounts result in lower, not higher, child support
payments.\8\ The HHS Office of Inspector General concluded that child
support orders set for low income parents are ineffective in generating
child support payments when set too high relative to ability to pay,
finding that compliance is significantly lower when a monthly order is
more than 20 percent of a parent's income than when it is 15 percent or
less.\9\ Setting child support orders that reflect ability to pay is
crucial to encouraging compliance, increasing parental accountability
for making payments, and discouraging uncollectible arrearages.
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\8\ Mark Takayesu, How Do Child Support Order Amounts Affect
Payments and Compliance? Orange County, CA Department of Child Support
Services (2011), available at: http://ncsea.omnibooksonline.com/
2012policyforum/data/papers/PV_1.pdf#page=1; Carl Formoso, Determining
the Composition and Collectability of Child Support Arrearages, Volume
1: The Longitudinal Analysis (2003), available at:https://
www.dshs.wa.gov/pdf/esa/dcs/reports/cvol1prn.pdf.
\9\ HHS Office of Inspector General (OIG), The Establishment of
Child Support Orders for Low Income Non-custodial Parents, OEI-05-99-
00390 (2000), available at:
http://oig.hhs.gov/oei/reports/oei-05-99-00390.pdf.
Research also suggests that noncustodial parents are less likely to
pay their support orders when they are based on presumed income, such
as 40 hour minimum wage employment, or set at a standard level (such as
the cash assistance amount received by the custodial family) that is
often well above the parent's ability to pay.\10\ Such imputed income
orders are not based on evidence of actual income and result in high
uncollectible arrears balances that can provide a disincentive for
obligors to maintain employment in the regular economy. Uncollectible
debt does not accomplish the goals of the child support program to
obtain child support. Most arrearages are owed by noncustodial parents
with earnings under $10,000 and are uncollectible.\11\ Research finds
that high arrearages substantially reduce the formal earnings of
noncustodial parents and child support payments in economically
disadvantaged families, while reducing unmanageable arrearages can
increase payments.\12\ Accumulation of high arrearage balances is often
associated with incarceration because parents have little to no ability
to earn income while they are incarcerated, and little ability to pay
off the arrearages when released due to lack of employment.
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\10\ Letitia Logan Passarella and Catherine E. Born, Imputed Income
Among Noncustodial Parents: Characteristics and Payment Outcomes.
University of Maryland, School of Social Work (2014), available at:
http://www.familywelfare.umaryland.edu/reports1/imputed.pdf.
\11\ Elaine Sorensen, Liliana Sousa, and Simon Schaner, Assessing
Child Support Arrears in Nine Large States and the Nation, The Urban
Institute (2007), available at: http://aspe.hhs.gov/hsp/07/assessing-
CS-debt/.
\12\ Carmen Solomon-Fears, Gene Falk, and Adrienne L. Fernandes-
Alcantara, Child Well-Being and Noncustodial Fathers, Congressional
Research Service (2013), available at: http://fas.org/sgp/crs/misc/
R41431.pdf; Carolyn J. Heinrich, Brett C. Burkhardt, and Hilary M.
Shager, Reducing Child Support Debt and Its Consequences: Can
Forgiveness Benefit All? Institute for Research on Poverty (2010),
available at:
http://www.irp.wisc.edu/research/childsup/cspolicy/pdfs/2007-09/
FamiliesForward_3_19_
10.pdf.
Our proposed regulations are intended to ensure that state
guidelines result in appropriate support orders based upon available
evidence of an individual parent's ability to pay and to correct the
ineffective practice in some states of setting orders in low-income
cases that are not based upon any evidence of the parents' specific
circumstances but instead simply assume full-time employment. Parents
cannot comply with orders set above their means to pay what is ordered.
Several studies make clear that when orders are set above the
noncustodial parent's ability to pay, compliance drops--they pay less
money than if the orders were set based on the parent's ability to pay.
The research is clear that when orders are set too high, low-income
parents are far less likely to stay employed in low-wage jobs and pay
child support. They are more likely to avoid contact with the child
support program and their children. They are more likely to enter the
underground economy and, often, prison, a result that is not good for
children. Regular employment and consistent child support payments
collected every month through income withholding is what helps
custodial families achieve economic stability. Sustainable payments
paid on time every month is especially important to the millions of
low- and moderate-income families served by the child support program.
When families receive regular child support payment, they are less
likely to need public assistance.\13\ We believe that this provision
will improve child support payment compliance and program
effectiveness.
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\13\ Carl Formoso, Child Support Enforcement: Net Impacts on Work
and Welfare Outcomes pre- & post-PRWORA, Washington State Division of
Child Support (2000), available at: http://www.dshs.wa.gov/pdf/esa/dcs/
reports/csepolicybrief.pdf.
Section 302.56, which sets a new criterion to prohibit the
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treatment of incarceration as ``voluntary unemployment.''
Section 467 of the Social Security Act requires states to establish
guidelines for setting appropriate support orders. Section 454(4)
requires states to provide services relating to order establishment and
modification to any child receiving services under title IV-D. Section
454(20) requires states to have in effect laws to improve child support
effectiveness listed in section 466 of the Act, including section
466(a)(10), which requires states to have procedures under which every
3 years, upon the request of either parent (or the state, if there is
an assignment under part A of the Social Security Act), the state must
review and, if appropriate, adjust the order in accordance with the
guidelines established pursuant to section 467(a), taking into account
the best interests of the child.
The Department has authority under section 452(a)(1) of the Social
Security Act to ``establish such standards for locating noncustodial
parents, establishing paternity, and obtaining child support . . . as
he determines to be necessary to assure that such programs will be
effective.'' Section 454(13) provides that ``the State will comply with
such other requirements and standards as the Secretary determines to be
necessary to the establishment of an effective program for locating
noncustodial parents, establishing paternity, obtaining support orders,
and collecting support payments and provide that information requests
by parents who are residents of other States be treated with the same
priority as requests by parents who are residents of the State
submitting the plan.''
Pursuant to sections 467, 454(13), and 452(a)(1), the Department
promulgated 45 C.F.R. 302.56 in 1985. The guidelines regulations have
been revised in 1991 and 2008. The existing rule, 45 C.F.R. 302.56,
requires states to set numeric guidelines that take earnings and income
into consideration and to review and revise the guidelines every 4
years to ensure appropriate and correct child support order amounts.
Existing rule, 45 C.F.R. 303.8(b)(3)(ii)(A) requires both upward and
downward changes in the amount of the support order. Existing rule 45
C.F.R. 303.8(b)(5) also requires the state to have procedures to review
orders outside of the 3-year cycle if the requesting party demonstrates
a ``substantial change in circumstances.'' Existing rule 45 C.F.R.
303.8(b)(6) requires states to provide notice not less than once every
3 years to the parents subject to the order informing them of their
right to request a review and adjustment.
In order to carry out statutory requirements that state guidelines
produce appropriate orders, and that states review and adjust orders
upon a substantial change in circumstances, and our statutory
responsibility to improve program effectiveness, the proposed rule
would amend 45 C.F.R. 302.56 to provide that state guidelines may not
treat incarceration as ``voluntary unemployment'' in establishing or
modifying child support orders. The effect of the proposed rule is to
require states to carry out the review and adjustment requirements of
section 466(a)(10), prohibiting states from legally precluding review
and, if appropriate, adjustment of support orders during incarceration.
If an incarcerated noncustodial parent has income or assets, the
proposed rule permits orders to be set taking that income or those
assets into account.
Voluntary unemployment policies are yet another form of income
imputation that results in inappropriate support orders, prevents
review and adjustment of such support orders as required by federal
statute, and is contrary to the evidence of what works to increase
child support payments. The consequence of voluntary unemployment
policies is to maintain pre-incarceration support order amounts that
are not based on the earnings and income available to incarcerated
parents, resulting in the accumulation of an additional $23,000 on
average of uncollectible debt during incarceration.\14\ The research
indicates that accumulation of uncollectible debt results in a number
of harmful outcomes, including decreased employment, increased
participation in the underground economy, increased crime and
recidivism, and increased father absence.\15\ All of these outcomes
reduce child support collections and hurt children.
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\14\ Nancy Thoennes, Child Support Profile: Massachusetts
Incarcerated and Paroled Parents, Center for Policy Research (2002),
available at:http://cntrpolres.qwestoffice.net/reports/
profile%20of%20CS%20among%20incarcerated%20&%20paroled%20parents.pdf.
\15\ Carmen Solomon-Fears, Gene Falk, and Adrienne L. Fernandes-
Alcantara. Child Well-Being and Noncustodial Fathers, Congressional
Research Service (2013), available at:
http://fas.org/sgp/crs/misc/R41431.pdf; Harry Holzer, Paul Offner, and
Elaine Sorensen. Declining Employment Among Young Black Less-Educated
Men: The Role of Incarceration and Child Support (2004), available at:
http://www.urban.org/UploadedPDF/411035_declining_employment.pdf;
Judi Bartfeld and Dan Meyer. Child Support Compliance Among
Discretionary and Nondiscretionary Obligors, 77 Soc. Serv. Rev. 347
(2003), available at:
http://www.jstor.org/discover/10.1086/
375793?sid=21106384595223&uid=3739936&uid=2&
uid=4&uid=3739256; Elaine Sorensen, Liliana Sousa, and Simone Schaner.
Assessing Child Support Arrears in Nine Large States and the Nation,
The Urban Institute (2007); HHS, Office of Inspector General, The
Establishment of Child Support Orders for Low Income Non-custodial
Parents, 2000, OEI-05-99-00390, available at https://oig.hhs.gov/oei/
reports/oei-05-99-00390.pdf.
Over the last 15 years, most states have eliminated the ``voluntary
unemployment'' provision in their guidelines that precludes review and
adjustment of the orders of incarcerated parents. At least 36 states,
including Wisconsin and Utah, currently permit review and adjustment
during incarceration of the noncustodial parent, while 14 do not. A
number of state supreme courts have rejected the approach that a
parent's reduction in income due to incarceration is ``voluntary
unemployment'' or that order amounts should remain at pre-incarceration
levels. Instead, these courts have found that orders based on the
actual income and assets available to the parent are most likely to
produce support payments upon release.\16\
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\16\ See e.g., Lambert v. Lambert, 861 N.E.2d 1176, 1180 (Ind.
2007), (stating ``the conclusion is also supported by the overarching
policy goal of all family court matters involving children: protecting
the best interests of those children.''),
http://www.ai.org/judiciary/opinions/pdf/02220701rts.pdf; State v.
Porter, 610 N.W.2d 23 (Neb. 2000) (holding that initial child support
determination which was based upon the father's earning capacity prior
to his incarceration constituted abuse of discretion noting that during
the parent's incarceration, the judgment would simply accrue with
interest and not benefit the child.)
In a 2005 bipartisan report based upon the work of state judges,
attorneys general, corrections officers, law enforcement officials,
victims representatives, and community-based programs, the Council of
State Governments identified child support obligations, especially
arrearages, as a barrier to successful re-entry into society because
they have a tendency to disrupt family reunification, parent-child
contact, and the employment patterns of ex-prisoners, and recommended
against voluntary unemployment child support policies.\17\ State child
support programs have found that they can make their programs more
successful by identifying parents with support obligations while they
are in prison so that parents are better able to avoid the accumulation
of excessive child support debt by requesting an order modification to
reflect their current ability to pay.\18\
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\17\ Report of the Re-Entry Policy Council: Charting the Safe and
Successful Return of Prisoners to the Community,http://
csgjusticecenter.org/reentry/publications/the-report-of-the-re-entry-
policy-council-charting-the-safe-and-successful-return-of-prisoners-to-
the-community/ (Policy Statement 13, pp. 198-2000).
\18\ Carmen Solomon-Fears, Gene Falk, and Adrienne L. Fernandes-
Alcantara. Child Well-Being and Noncustodial Fathers, Congressional
Research Service (2013), available at:
http://fas.org/sgp/crs/misc/R41431.pdf.
Section 302.56, recognizes existing state child support order
establishment practices and clarifies the extent of state flexibility
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to incorporate Parenting Time into child support orders.
Section 467 of the Social Security Act requires states to establish
guidelines for setting child support award amounts within the state.
The State must review their guidelines every 4 years to ensure that the
application of the guidelines results in the determination of
appropriate child support award amounts.
The Department has authority under section 452(a)(1) of the Act to
``establish such standards for locating noncustodial parents,
establishing paternity, and obtaining child support . . . as he
determines to be necessary to assure that such programs will be
effective.'' Also, section 454(13) provides that ``the State will
comply with such other requirements and standards as the Secretary
determines to be necessary to the establishment of an effective program
for locating noncustodial parents, establishing paternity, obtaining
support orders, and collecting support payments and provide that
information requests by parents who are residents of other States be
treated with the same priority as request by parents who are residents
of the State submitting the plan.''
In 1985, the Department promulgated 45 C.F.R. 302.56 to implement
section 467 and 452(a)(1) of the Act. The rule has been revised two
times since 1985. Specifically, the existing rule requires states to
set numeric guidelines that take all earnings and income of the
noncustodial parent into consideration, be based on specific
descriptive and numeric criteria and result in a computation of the
support obligation, and address how the parents will provide for the
children's health care needs. Additionally, the state must review and
revise, if appropriate, the guidelines every 4 years to ensure
appropriate child support order amounts.
The Department proposes to amend its existing rule to recognize
legal developments in states over the past two decades and current
state IV-D program activities that do not result in identifiable costs
to the federal government. We believe that this provision will reflect
the current practice in some States, recognize judicial flexibility in
others, and improve child support payment compliance and program
effectiveness. FFP is available to states to establish child support
orders. The provision is intended only to clarify that states do not
need to develop complicated cost allocation formulas to somehow
separate out the incidental costs associated with applying the
parenting time aspect of child support guidelines to determine child
support order amounts, or require parents to return to court another
day if they wish to submit to the judge a parenting time agreement that
they have worked out ahead of time so that it can be included in the
child support order.
A number of state legislatures, such as New Jersey, Texas,
Tennessee, and Oregon, have incorporated parenting time factors into
their state guidelines calculations and established shared parenting
presumptions to recognize the trend toward shared parenting. Although
parenting time is a legally distinct and separate right from the child
support obligation, the research finds that parents are more willing to
pay child support if they are able to play an active parenting
role.\19\ Thus, states have concluded that the recognition of parenting
time can improve child support compliance and program
effectiveness.\20\ States have been further encouraged to coordinate
child support and parenting time by the Sense of Congress provision
included in the Preventing Sex Trafficking and Strengthening Families
Act of 2014, Sec. 303, Pub. L. 113-183. Some state courts judges and
administrators have encouraged the Department to clarify existing
authority to recognize state guidelines provisions and inclusion of
parenting time agreements in a child support orders.
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\19\ Kathryn Edin and Timothy Nelson. Doing the Best I Can:
Fatherhood in the Inner City, University of California Press (2013).
\20\ National Child Support Enforcement Association, Parenting Time
Orders. July 21, 2013, available at: http://www.ncsea.org/documents/
Parenting-Time-Order_7.31.13.pdf.
The Department's proposed rule reflects the trend of states to
incorporate parenting time into their guidelines. The proposed rule
acknowledges these developments \21\ by adding a new criterion as '
302.56(h) to clarify that states may recognize parenting time
agreements included in child support orders. ``State child support
guidelines that incorporate parenting time'' refers to those States
that have guidelines which incorporate allowances (or credits) for the
amount of time children spend with both parents in the calculation of
the child support order amount.
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\21\ Carmen Solomon-Fears, Gene Falk, and Adrienne L. Fernandes-
Alcantara. Child Well-Being and Noncustodial Fathers, Congressional
Research Service (2013), available at:
http://fas.org/sgp/crs/misc/R41431.pdf.
The proposed parenting time provision is a minor change to existing
regulations intended to clarify that a court or child support agency
may include an uncontested parenting time agreement into the child
support order at the time the child support order is entered without
violating federal child support regulations. The proposed rule would
remove uncertainty about whether a parenting time agreement may be
included in a child support order when IV-D program attorneys are
present at the hearing. Allowing a court to address both child support
and a parenting time agreement in one hearing, when the parents are
present and willing, increases efficiency and reduces the burden on
parents of participating in multiple administrative or judicial
processes without increasing IV-D program costs.\22\ Child well-being
is positively affected when the noncustodial parents become more
responsible and involved with their children.\23\
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\22\ Alicia Key, Parenting Time in Child Support Cases in Texas,
Family Court Review (Forthcoming 2015).
\23\ Carmen Solomon-Fears, Gene Falk, and Adrienne L. Fernandes-
Alcantara. Child Well-Being and Noncustodial Fathers, Congressional
Research Service (2013), available at: http://fas.org/sgp/crs/misc/
R41431.pdf.
The intent of the rule is to modestly increase state flexibility,
not to increase federal expenditures. This new parenting time provision
does not permit state IV-D agencies to claim Federal Financial
Participation for a parenting time program or activities using IV-D
program funds and has no additional impact on the federal budget. If a
state incurs costs for parenting time activities, such as mediation or
legal assistance, it must do so with other funds. Under the proposed
rule, IV-D program costs must be minimal and incidental to IV-D
establishment activities. Our proposed regulation is intended to
clarify that a state does not need to establish a cost allocation plan
or require parents to come back for a second court hearing if they ask
the judge to include an uncontested and agreed upon parenting time
provision incidental to the establishment of a child support order when
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convenient to the parties, IV-D agency and court to do so.
The NPRM proposes minimal clarifying changes to increase state
flexibility, recognize existing state practice, and avoid the creation
of cost allocation formulas to address trivial costs. It does not
require or permit state IV-D agencies to undertake new functions that
do not carry out the child support purposes defined in statute.
However, the President's Budget Proposal calls for new legislation that
would expand the statutory responsibilities of the child support
program to include parenting time establishment. Specifically,
``federal resources are made available to states that choose to include
parenting time responsibilities in initial child support orders
beginning in FY 2016 and all states are required to include parenting
time responsibilities in all new child support orders beginning in FY
2021.''
Section 302.76, which provides states additional flexibility to
adopt evidence-based practices to improve program effectiveness and
recognizes that parents cannot pay regular child support unless they
have a job.
Section 452(a)(1) of the Social Security Act provides the Secretary
with authority to ``establish such standards for State programs for
locating noncustodial parents, establishing paternity, and obtaining
child support . . . as he determines to be necessary to assure that
such programs will be effective.'' Section 454(13) requires the state
plan to ``provide that the State will comply with such other
requirements and standards as the Secretary determines to be necessary
to the establishment of an effective program for locating noncustodial
parents, establishing paternity, obtaining support orders, and
collecting support payments. . . .'' The proposed rule is informed by
section 466(a)(15), which requires states to have procedures to request
a court or administrative agency to order an individual to participate
in a plan for noncustodial parents with overdue TANF arrears to pay or
participate in work activities.
With very few exceptions, the federal government reimburses the
cost of procedures implemented by states under section 466, including
paternity acknowledgments, tax refund offsets, enforcement of liens,
review and modification of support orders, drivers' license suspension,
and income withholding activities. While the other procedures in
section 466 are effective in cases where the noncustodial parent has
income or resources, they are not effective in situations where the
noncustodial parent lacks a job.
The most effective procedure in section 466 is income withholding,
which accounts for 75 percent of all IV-D child support collections. In
addition, income withholding results in regular child support payments
made on time every month. However, income withholding is only effective
when a noncustodial parent has wages or other monthly income. The
evidence is clear that the main reason for non-payment of child support
is unemployment.\24\
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\24\ Carmen Solomon-Fears, Gene Falk, and Adrienne L. Fernandes-
Alcantara. Child Well-Being and Noncustodial Fathers,Congressional
Research Service (2013), available at:
http://fas.org/sgp/crs/misc/R41431.pdf.
Based on information from recent studies about child support-led
employment programs, the Department has determined that authorizing FFP
for such programs is a reasonable and cost-effective method for
obtaining and increasing collection of child support payments and
improved program performance. In fact, noncustodial parent employment
services can be a more productive and cost-effective tool for
increasing collections in hard-to-collect cases than the traditional
enforcement tools reimbursed under current rules. If the proposed rule
is adopted, we expect that some states would redirect funding toward
more effective approaches and away from less productive efforts. This
is particularly so because states put up a 34 percent match and state
incentive funding is based upon performance improvements. The proposed
work activities are an evidence-based and cost-effective approach to
obtaining and increasing child support collections in difficult-to-
enforce cases, and would be targeted to non-custodial parents who would
likely not otherwise receive employment services. This option provides
states with an alternative to repeated, costly, and largely ineffective
court hearings and jail time when the reason for non-payment is
unemployment.\25\
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\25\ Carmen Solomon-Fears, Gene Falk, and Adrienne L. Fernandes-
Alcantara. Child Well-Being and Noncustodial Fathers, Congressional
Research Service (2013), available at:
http://fas.org/sgp/crs/misc/R41431.pdf.
Studies of state child support-led employment programs for
noncustodial parents have shown that these efforts increase employment,
earnings, and child support payments.\26\ Increased child support
payments avoid public assistance costs. When families receive regular
child support payments, they use fewer public assistance benefits such
as TANF and SNAP.\27\ The evidence shows that job services are a more
cost-effective way to hold unemployed parents accountable and increase
collections than any other approach.\28\
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\26\ Carmen Solomon-Fears. Fatherhood Initiatives: Connecting
Fathers to Their Children. Congressional Research Service (2015),
available at: http://fas.org/sgp/crs/misc/RL31025.pdf.
\27\ Laura Wheaton. Child Support Cost Avoidance in 1999, The Urban
Institute (2003), available at: http://www.acf.hhs.gov/programs/css/
resource/child-support-cost-avoidance-in-1999-final-report.
\28\ Daniel Schroeder and Nicholas Doughty, Texas Non-Custodial
Parent Choices: Program Impact Analysis (2009), available at
https://www.texasattorneygeneral.gov/cs/ofi/
ncp_choices_program_impact.pdf; Kye Lippold, Austin Nichols, and
ElaineSorensen, Strengthening Families Through Stronger Fathers: Final
Impact Report for the Pilot Employment Programs (2011), available at:
http://www.urban.org/uploadedpdf/412442-Strengthening-Families-
Through-Stronger-Fathers.pdf.
Over the past two decades, most state child support agencies have
attempted to partner with other programs to establish work slots for
noncustodial parents behind in their child support payments. However,
despite strong efforts to promote and coordinate work activities for
noncustodial parents, few state child support agencies have been able
to secure resource commitments for noncustodial parent work activities
---------------------------------------------------------------------------
from TANF and workforce agencies.
Thus, although Congress requires states to have procedures to
develop work plans for nonpaying noncustodial parents and require
noncustodial parents to participate in work activities, states have had
great difficulty carrying out section 466(a)(15). Without funding for
jobs activities, child support agencies will continue to spend federal
and state resources on court hearings and state resources on jail, but
will not accomplish the goal of collecting full and regular child
support payments for families. Unless more nonpaying noncustodial
parents are able to participate in job activities, more children will
go without child support, depend more on public assistance, and remain
in poverty.
Section 303.8, which is a new provision allowing Medicaid and CHIP
to be considered medical support.
The Child Support Enforcement Amendments of 1984 added section
452(f) of the Act to require the Secretary to issue regulations
requiring state child support agencies to petition for the inclusion of
a medical support provision in child support orders whenever health
care coverage was available to noncustodial parents at a reasonable
cost. At the same time, Congress added section 466(a)(19), requiring
states to have procedures under which all child support orders include
a provision for the health care coverage of the child. As part of the
Child Support Performance and Incentive Act of 1998 (CSPIA), Congress
established a Medical Child Support Working Group to study medical
child support.\29\
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\29\ The Medical Child Support Working Group Report, 21 Million
Children's Health: Our Shared Responsibility, June 2000, available at:
http://fatherhood.hhs.gov/medsupport00/chap8.htm.
In 2006, the Deficit Reduction Act amended section 452(f) to
---------------------------------------------------------------------------
provide that:
The Secretary shall issue regulations to require that State agencies
administering the child support enforcement program under this part
enforce medical support included as part of a child support order
whenever health care coverage is available to the noncustodial
parent at a reasonable cost. A State agency administering the
program under this part may enforce medical support against a
custodial parent if health coverage is available to the custodial
parent at a reasonable cost. Such regulation shall also provide for
improved information exchange between such State agencies and the
State agencies administering the State Medicaid programs under
title XIX with respect to the availability of health insurance
coverage. For purposes of this part, the ``term ``medical support''
may include health care coverage, such as coverage under a health
insurance plan (including payment of costs of premiums, co-
payments, and deductibles) and payment for medical expenses
incurred on behalf of a child.
In addition, Congress amended section 466(a)(19)(A) to require
states to have procedures under which ``all child support orders
enforced pursuant to this part shall include a provision for medical
support for the child to be provided by either or both parents, and
shall be enforced, where appropriate, through the use of the National
Medical Support Notice. . . .'' Section 454(20) incorporates the
procedures in section 466 into the state plan, by requiring states to
have in effect laws that implement procedures prescribed in or
``pursuant to'' section 466 to improve child support enforcement
effectiveness.
The Department has additional authority under section 452(a)(1) of
the Social Security Act (Act) ``to establish such standards for State
programs for locating noncustodial parents, establishing paternity, and
obtaining child support . . . as he determines to be necessary to
assure that such programs will be effective.'' Section 454(13) provides
that ``the State will comply with such other requirements and standards
as the Secretary determines to be necessary to the establishment of an
effective program for locating noncustodial parents, establishing
paternity, obtaining support orders, and collecting support payments
and provide that information requests by parents who are residents of
other States be treated with the same priority as requests by parents
who are residents of the State submitting the plan.''
As directed by Congress, the Department promulgated medical support
regulations in 1992, 2000, and 2008. In the preamble to its 2000
regulation, we responded to commenters asking whether Medicaid and the
State Children's Health Insurance Program should be excluded from
consideration as alternative coverage. Our response was that ``The
statute does not preclude medical support under Medicaid or SCHIP from
being stipulated in the order as alternative coverage,'' but stated
that ``we are examining the Working Group's recommendations on this
issue.'' \30\
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\30\ See 65 Fed. Reg. 82154, dated December 27, 2000, available
at:http://www.gpo.gov/fdsys/granule/FR-2000-12-27/00-31611.
Section 466(a)(19)(a) requires ``all child support orders enforced
pursuant to this part'' to include a provision for medical support for
the child to be provided by either or both parents. Employer-sponsored
health care coverage is not available to most children in the child
support caseload. Although states have committed substantial resources
toward increasing the percentage of child support orders that include
medical support, federal administrative data indicates that medical
support is actually provided as ordered in only 33 percent of
cases.\31\ The 2009 Center for Policy Research Report analysis of
selected states also found that issuing a National Medical Support
Notice to the noncustodial parent's employer results in the child being
enrolled in a health plan only 10 to 23 percent of the time.\32\ An
Urban Institute study found that in 2009, only 37 percent of child
support-eligible children had parents with employer-sponsored health
care.\33\ This contrasts with data from two decades earlier included in
a 1992 GAO report that ``The Bureau of Labor Statistics' 1989 and 1999
surveys of employee benefits indicate that 81 percent of adult workers
have insurance available through their employer.'' \34\
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\31\ Center for Policy Research, Medical Child Support: State
Strategies Re-examined, prepared under Office of Child Support
Enforcement Grant #08-C0067 to the Texas Office of the Attorney
General, Division of Child Support (2011).
\32\ Center for Policy Research, Medical Child Support: Strategies
Implemented by States, prepared under Office of Child Support
Enforcement Grant #08-C0067 to the Texas Office of the Attorney
General, Division of Child Support (2009).
\33\ Stacey McMorrow, Genevieve Kenney, Allison Cook, and Christine
Coyer. Health Care Coverage and Medicaid/CHIPEligibility for Child
Support Eligible Children. ASPE Research Brief, available at: http://
aspe.hhs.gov/hsp/11/HealthCare-ChildSupport/rb.shtml.
\34\ General Accounting Office (GAO), Medicaid: Ensuring That
Noncustodial Parents Provide Health Insurance Can Save Costs, GAO/HRD-
92-80, p. 8, June 1992, available at: http://www.gao.gov/assets/220/
216432.pdf.
In order to effectively carry out the statutory requirement that
states establish medical support orders in all IV-D cases and to
improve the effectiveness of the child support program in establishing
medical support, the rule proposes to amend the 2008 rule to give
states flexibility to recognize the sources of health care coverage--
private or public--available to either parent at a reasonable cost. We
believe that this provision will improve child support payment
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compliance and program effectiveness.
Section 303.8, which is a new criterion preventing regular Social
Security payments from being garnished under an existing child support
order.
Section 459 of the Act provides that only moneys that are based
upon remuneration for employment are subject to child support
garnishment. Supplemental Security Income (SSI) payments are not based
upon remuneration for employment. Rather, they are provided based on
need. Since 2000, federal policy on child support garnishments has
recognized this exception by directing child support agencies not to
collect against SSI benefits (either directly or from bank
accounts).\35\ Currently, OCSE estimates that about three percent of
noncustodial IV-D parents receive SSI.
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\35\ See OCSE Dear Colleague Letter (DCL) 00-103, Attachment of
Social Security Benefits, October 6, 2000, available at:
http://www.acf.hhs.gov/programs/css/resource/attachment-of-social-
security-benefits.
Additionally, the Department has authority under section 452(a)(1)
of the Act to ``establish such standards for locating noncustodial
parents, establishing paternity, and obtaining child support . . . as
he determines to be necessary to assure that such programs will be
---------------------------------------------------------------------------
effective.''
Section 454(13) provides that ``the State will comply with such
other requirements and standards as the Secretary determines to be
necessary to the establishment of an effective program for locating
noncustodial parents, establishing paternity, obtaining support orders,
and collecting support payments and provide that information requests
by parents who are residents of other States be treated with the same
priority as request by parents who are residents of the State
submitting the plan.''
The new provisions related to SSI garnishment were added to our
proposed rule consistent with Section 459 of the Social Security Act
and the rule jointly issued by the Department of Treasury, in
conjunction with the Social Security Administration, Department of
Veterans Affairs, Office of Personal Management, and the Railroad
Retirement Board, on February 23, 2011, to prevent the garnishment of
bank accounts containing certain federal benefits.\36\ On February 27,
2013, the HHS Office of Child Support Enforcement issued Dear Colleague
Letter (DCL) 13-06 providing guidance to state and tribal child support
agencies urging them to implement automated and manual safeguards to
ensure that Supplemental Security Income (SSI) benefits are not being
garnished.\37\ The DCL indicated that we were reviewing our regulations
to determine if additional requirements were needed to ensure that
exempt federal benefits are not garnished.
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\36\ See 76 Fed. Reg. 9939, February 23, 2011, available at: http:/
/www.google.com/
url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&ved=0CCYQFjAB&url=http%3A
%2F%2F
www.gpo.gov%2Ffdsys%2Fpkg%2FFR-2011-02-23%2Fpdf%2F2011-
3782.pdf&ei=S2MlVdz3J47bs
ATpsYG4Aw&usg=AFQjCNEYHTclYGyhrjxBJ35wea64XFPtHw.
\37\ See OCSE Dear Colleague Letter (DCL) 13-06, Garnishment of
Supplemental Security Income Benefits, February 27, 2013,available
at:http://www.acf.hhs.gov/programs/css/resource/garnishment-of-
supplemental-security-income-benefits.
The Department has been urged by several stakeholders to exclude
``dual eligibility'' benefits, where the individual is eligible for
both SSI and Social Security Disability Insurance (SSDI), meets the
income test for SSI benefits, and would have received the same amount
in SSI-only funds, but for the fact that the individual qualifies for
SSDI benefits as well as SSI benefits. The proposed rule requires
states to develop safeguards for the states to prevent garnishment of
exempt benefits. These provisions only relate to excluding SSI
---------------------------------------------------------------------------
benefits, as well as concurrent SSI and SSDI benefits.
The proposed rule does not make any revision related to SSDI
benefits, which remain subject to garnishment, except in the one
circumstance described above. SSDI benefits are considered remuneration
from employment, and therefore, state or tribal child support agencies
are allowed to continue to garnish the benefits of child support
directly from the federal payer as authorized under section 459(h).
The proposed rule requires states to review these noncustodial
parents' financial accounts to determine whether there are available
assets above subsistence level available for garnishment other than SSI
or concurrent SSI and benefits under title II of the Act. The rule also
requires states to have automated procedures in place to return funds
to a noncustodial parent within 2 days after the agency determines that
SSI or concurrent SSI and benefits under title II of the Act in the
account have been incorrectly garnished.
The proposed rule is consistent with long-standing federal child
support policy and the rule promulgated jointly by Treasury and other
federal agencies, and strengthens policies and safeguards to prevent
garnishment of low-income noncustodial parents' financial accounts when
they are only receiving these exempt benefits, which retain their
character as exempt even after being deposited.
Section 304.20, which details new expenditures subject to FFP.
Section 455 of the Social Security Act generally provides that the
Secretary will reimburse amounts expended for the operation of the
state plan. Section 452(a)(1) of the Social Security Act (Act) provides
the Secretary with authority to ``establish such standards for State
programs for locating noncustodial parents, establishing paternity, and
obtaining child support . . . as he determines to be necessary to
assure that such programs will be effective.'' Section 454(13) provides
that ``the State will comply with such other requirements and standards
as the Secretary determines to be necessary to the establishment of an
effective program for locating noncustodial parents, establishing
paternity, obtaining support orders, and collecting support payments
and provide that information requests by parents who are residents of
other States be treated with the same priority as requests by parents
who are residents of the State submitting the plan.''
To implement section 455, the Department promulgated a set of FFP
rules, including 45 C.F.R. 304.20, 304.21, 304.23, and 304.26. These
rules have been amended 14 times since 1975. Proposed changes to 45
C.F.R. 304.20 would provide clear guidance to states and update
existing FFP rules to reflect current practice in the field for the
establishment and enforcement of child support orders. The proposed
rule articulates standard OMB cost principles incorporated in existing
45 C.F.R. 304.10 to the effect that costs must be necessary,
reasonable, and allocable to the child support program.\38\
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\38\ See Uniform Guidance for HHS Awards at 45 CFR 75, Subpart E,
Cost Principles.
The proposed rule at 304.20(b)(12) would explicitly permit FFP for
educational and outreach activities for the state agency to carry out
their responsibilities to publicize child support services under
section 454(23) of the Social Security Act and to coordinate with other
programs to improve the effectiveness of the child support program.
Effective programs incorporate such educational and outreach
activities, and this cost is routinely claimed by state child support
---------------------------------------------------------------------------
agencies.
The proposed rule at 304.20(b)(3)(vi) would expressly permit FFP
for services to increase pro se access to adjudicative and alternative
dispute resolution practices. Some states use alternative dispute
resolution because it is more effective and less expensive than paying
for costly court hearings and attorneys. Alternative dispute resolution
also can increase compliance with child support orders more effectively
than court hearings because such procedures are less adversarial and
damaging to family relationships. Some state courts also provide child
support education and assistance to unrepresented parties in child
support cases in order to explain the process and help parents complete
forms needed in court. The research shows that parents who feel heard
and respected by the child support process are more likely to comply
with the orders.\39\ States using alternative dispute resolution and
pro se services in child support cases have claimed FFP for these costs
for many years.
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\39\ Kelly Macatangay, Anton Westveld, Brian Kunkel, Intervening
for Success. NV: Clark County District Attorney, Family Support
Division (2012); Karen Roye, Enhanced Parental Involvement
Collaborative Project: Final Report. CA: San Francisco Department of
Child Support Services (2006).
The proposed rule at 304.20(b)(3)(v) would permit FFP for local bus
fare for participants to attend child support appointments and court
hearings. Providing FFP for local bus fare can be a cost-effective way
to reduce costly no-shows at court, increase parental cooperation, and
improve access to legal proceedings. In some states, the no-show rate
can be as much as 50 percent. When a parent does not show up, the
agency may need to reschedule a paternity genetic test or the court may
need to reschedule or reopen an earlier default order--all costs
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otherwise charged to the federal government.
According to the cost principles, states may only claim such costs
if they are necessary, reasonable, and allocable to title IV-D. Under
the proposed rule, a state could not claim such costs for custody or
child welfare cases, for example, because they would not be allocable
to title IV-D.
The proposed rule at 304.20(b)(3)(ix) would provide FFP for certain
work activities to increase child support payments through early
intervention efforts so as to improve child support outcomes and
redirect major program costs associated with repeated and ineffective
enforcement efforts, expensive attorney and court time, and jail costs.
Legal authority for this provision is discussed in the response to
question 5 on Medicaid.
A number of states are moving forward to improve coordination
between child support and parenting time. The proposed rule at
304.20(b)(3)(vii) is not intended to expand FFP, but to clarify that
FFP is not available for parenting time activities. The de minimis
exception is added to clarify that state allocation plans are not
required when the state incurs nominal costs associated with child
support guidelines development. Since the late 1990s, several state
legislatures have adopted child support guidelines that require the
child support agency to calculate parenting time to determine the
amount of child support order amounts. In addition, the proposed rule
clarifies that parents who have previously worked out a parenting time
agreement (without using FFP) do not have to come back for another
hearing and state attorneys do not need to leave the courtroom in those
situations when a support order is being set and it is convenient for
the judge and parents to add the parenting time agreement to the
support order. See response to question 4 on Medicaid.
stark
Question. The Affordable Care Act established procedures for self-
reporting Stark law violations. However, hospitals that have followed
these procedures to try and reach a settlement for technical
noncompliance (ex. administrative mistakes, missing signatures) are
awaiting decisions from CMS for what seems to be an excessive period of
time.
How many self-referral disclosures are currently pending a
settlement decision by CMS and how many hospitals are involved?
Answer. There are 400 disclosures pending settlement. Based on our
experience to date, approximately 90 percent of disclosures involve
hospitals.
Question. How many cases are within three months of reaching the
four year look back period and in jeopardy of not reaching a settlement
in time?
Answer. The four year look back period refers to the period of time
during which a provider making a disclosure may not have been in
compliance with the physician-self referral law, but is not a time
limit for when a settlement must be reached. Once a provider of
services or supplier electronically submits a disclosure under the
Self-Referral Disclosure Protocol (SRDP) (and receives email
confirmation from CMS that the disclosure has been received), the
statutory obligation to return any potential overpayment within 60 days
will be suspended until a settlement agreement is entered, the provider
of services or supplier withdraws from the SRDP, or CMS removes the
provider of services or supplier from the SRDP.
pace
Question. Secretary Burwell, you recently announced your plans to
move the Medicare program toward paying providers based on the quality,
rather than the quantity, of care they give patients by shifting more
Medicare dollars toward value based models. How will CMS account for
Medicare Advantage plans and the PACE program as part of this
initiative?
Answer. Medicare Advantage and PACE are a central part of the
broader effort to increasingly shift Medicare to value-based payments.
CMS will reach out to Medicare Advantage (MA) organizations to better
understand the way they are using physician incentive payments (e.g.
payments based on quality of care, patient satisfaction) and value-
based contracting of provider services to achieve lower costs and
improve quality of care, including reduced hospital readmissions and
improved performance on specific health care measures. MA organizations
have great flexibility to include incentives in their physician
contracts, and many are employing methods to reduce costs, better
coordinate care and promote better health outcomes.
Sponsors of Medicare Advantage and PACE plans are key participants
in the Health Care Payment Learning and Action Network; through their
participation, they will have the opportunity to learn about and
potentially adopt value-based payment approaches being used in Medicare
fee-for-service, employer/individual plans, and elsewhere. Also,
Medicare Advantage and PACE plans will be able to share their
experience in incentivizing quality and value for their enrollees.
In addition, the Center for Medicare and Medicaid Innovation is
working on developing new payment and delivery models specifically
focused on innovation in health plans. Public responses to a request
for information issued in late 2014 generated valuable feedback to
inform this work. Such payment and delivery models will further move
Medicare towards value-based purchasing.
Question. In its fall 2012 Regulatory Agenda, CMS published a
Notice of Proposed Rulemaking to revise the PACE regulation and noted
it would be issued in July 2013. Since then, this deadline has been
extended to December 2013, again to August 2014, and most recently, to
Spring 2015. Will CMS issue a revised PACE regulation this spring?
Answer. CMS is currently performing a comprehensive review of the
federal regulations governing PACE to identify potential regulatory
changes to reflect the evolving needs and opportunities of the program.
As CMS continues to contemplate potential regulatory changes, they have
implemented a number of improvements to PACE, including streamlining
the application process, updating the notification requirements for the
use of alternative care settings, and establishing a new PACE council
to bring together different components of the agency to focus on PACE
issues.
special needs plans
Question. It is well known that a relatively small proportion of
very sick, high-risk Medicare beneficiaries drive a significant
proportion of the program's overall costs. Many of these chronically
ill beneficiaries remain in unmanaged fee-for-service Medicare, despite
the fact that their health outcomes could be substantially improved if
they were enrolled in a program that coordinated their care. Medicare
Advantage (MA) plans, including Special Needs Plans (SNPs), provide
this type of disease management and care coordination that both
optimize health while reducing costs associated with unmanaged care and
poorer outcomes. Recent cuts to MA plan payments jeopardizes this
success.
Secretary Burwell, with the annual rate notice for MA plans coming
out next week, what can you tell this Committee about the Agency's
commitment to ensuring that robust disease management programs such as
those provided by MA plans can continue to be available for chronically
ill high-risk beneficiaries?
Answer. CMS will continue to promote robust disease management
programs, such as those offered by Medicare Advantage (MA) plans, so
they continue to be available for chronically ill high-risk
beneficiaries. CMS continues to support MA organizations seeking to
offer Special Needs Plans (SNPs), which provide this type of disease
management and care coordination for those high-risk beneficiaries who
qualify for these plans. CMS also encourages organizations to extend
the disease management and care coordination efforts to all MA plans,
not only SNPs. CMS requires MA organizations to make a best effort to
conduct an initial assessment of each enrollee's health care needs
within 90 days of the effective date of enrollment. CMS also requires
SNPs to perform a comprehensive initial health risk assessment (HRA)
that includes assessment of each enrollee's physical, psychosocial, and
functional needs within the first 90 days of enrollment and conduct
reassessments annually thereafter. HRAs used by MA organizations serve
to identify beneficiaries at risk for disease, and MA organizations use
these assessments to better target outreach and engagement efforts.
Furthermore, MA organizations must have an ongoing Quality
Improvement (QI) program for each of their plans. A QI program is
designed such that MA organizations have the necessary infrastructure
to coordinate care, promote quality, performance, and efficiency on an
ongoing basis. The HRA and QI programs are a few examples of programs
used by MA organizations to improve disease management and care
coordination for beneficiaries.
CMS believes care coordination and disease management are central
tenets of the MA program and expects all MA organizations not only to
continue to meet CMS's requirements related to care coordination and
disease management, but to also improve upon existing efforts to
optimize health while reducing costs associated with unmanaged care and
poorer outcomes.
co-op financial statements
Question. As you know, HHS requires health insurance co-operatives
to submit quarterly financial statements to the Centers for Medicare
and Medicaid Services. On multiple occasions in recent months--
including September 30, 2014, December 16, 2014, and January 11, 2015--
Senate offices have asked for these quarterly reports, but not received
them.
Have the state health insurance co-operatives been filing the
reports as required? If so, why has CMS not provided this material on
request to Senate offices?
Answer. To ensure strong financial management, CO-OPs are required
to submit quarterly financial statements, including cash flow data,
receive site visits by CMS staff, and undergo annual external audits,
in order to promote sustainability and capacity to repay loans. This
monitoring is concurrent with ongoing financial and operational
monitoring by state insurance regulators.
CMS appreciates Congressional interest in the quarterly financial
statements, and shares the goal of assuring that CO-OP loans are fully
repaid. The quarterly financial reports contain extensive financial
information, including assets, liabilities, revenue and expenses, and
cash flow sheets. Additionally, premium, enrollment, and utilization
information is found in the reports, as well as claims and underwriting
information. As careful stewards of the federal funding invested in CO-
OPs, CMS has an obligation to safeguard these reports, as the release
of the proprietary information they contain could impede the loan
recipients' ability to compete and thus imperil their ability to repay
the loan amount to the federal government. These financial statements
are not typically made public by privately held entities, which may be
in direct competition with CO-OP issuers, and the disclosure of these
materials could create undue harm to the CO-OPs, have an anti-
competitive effect on the health insurance market in, and, as such,
could prevent a CO-OP from repaying loans to the federal government.
CMS looks forward to continuing to work with Congress with respect
to its interest in the CO-OP program, and to facilitate the success of
the CO-OPs in providing an affordable and robust health insurance
option for consumers.
______
Questions Submitted by Hon. Ron Wyden
delivery system reform's effect on chronic care
Question. Over time, the Medicare program and providers have been
increasingly focused on treating beneficiaries with chronic conditions
such as cancer, diabetes and heart disease. I am determined to find a
way to improve the care for chronically ill individuals, particularly
Medicare beneficiaries.
The President's budget highlights the importance of our health care
system rewarding providers that deliver high quality and coordinated
care. Last week, you announced the Administration's, ``Better Care,
Smarter Spending'' initiative, which sets goals and timelines so that
more Medicare payments will be based on the quality and the care
delivered, not just the number of services delivered. I have long
believed we should move away from a volume-based system to one based on
value. I believe we must also focus on the chronically ill who are most
in need of care coordination and management. These are the patients
most harmed by a fragmented health care system that works in silos,
rather than teams. In order to reach the goals you've laid out, we're
going to need to know what is working today.
How did you arrive at the goals and timelines you set for the
``Better Care, Smarter Spending'' initiative? What is the strategy to
achieve these goals?
Answer. In setting goals and timelines, HHS wanted to be ambitious
while also being realistic and to provide the private sector with a
clear signal about Medicare's future direction.
Almost no Medicare fee-for-service payments were paid through
alternative payment models (APMs) in 2011. This percentage increased to
approximately 20 percent by the end of 2014 with a goal of 30 percent
of payments in APMs by 2016 and 50 percent by 2018. This sends a clear
signal about the importance of value-based payments in the future of
Medicare. Additionally, for Medicare fee-for-service (FFS) payments
linked to quality or value, HHS also set a goal of tying 85 percent of
all traditional Medicare payments to quality or value by 2016 and 90
percent by 2018.
The strategy to reach these goals includes increasing enrollment in
existing models, expansion of test models meeting the statutory
requirements for expansion, and testing new APMs. The existing Medicare
Shared Savings Program (MSSP) with Accountable Care Organizations
(ACOs) continues to show success, with 89 new ACOs starting in 2015.
Over 400 ACOs are now participating, serving more than 7.2 million
beneficiaries. Additionally, a number of alternative payment models are
being tested by the CMS Innovation Center including the Pioneer ACO,
Bundled Payments for Care Improvement, and Comprehensive Primary Care
models.
Question. How will you work with Congress on this initiative?
Answer. We look forward to working together with Congress as we
continue our efforts to develop and test innovative payment and service
delivery models. We continue to welcome congressional feedback and
input. As we proceed with this initiative, we will keep Congress
apprised of our progress and achievements.
Question. How do you plan to work with the private sector to
achieve high, quality, high value care?
Answer. HHS plans to launch the Health Care Payment Learning and
Action Network (Network), a collaborative network that will bring
private sector payers, providers, and businesses together with
consumers and public sector representatives to accelerate the
transformation of the nation's health care delivery system to one that
achieves better care, smarter spending, and healthier people, by
supporting the adoption of alternative payment models through their
aligned work. The goal of the Network is to provide a forum for public-
private partnerships to help the U.S. health care payment system meet
or exceed the recently established Medicare goals for value-based
payments and alternative payment models.
Participants in the Network will meet and identify best practices
related to alternative payment models. These best practices will be
made available to individuals and organizations who are interested in
learning more about value-based care and alternative payment models.
Through communication and collaboration, participants will have an
opportunity to align on key characteristics of payment models that will
facilitate the increased adoption of these models.
Question. Which Medicare and Medicaid programs are showing the most
success at delivering high-quality, high-value care?
Answer. Early signs of the most success at delivering high-quality,
high-value care are being demonstrated in the Pioneer Accountable Care
Organization (ACO) initiative. The Pioneer ACO model has demonstrated
that it's possible for providers to lower costs while improving
quality. Preliminary results from the evaluation of the first
performance year (2012) have shown that Pioneer ACOs achieved $147
million in savings in total spending above baseline and local market
trends. At the same time, Pioneer ACOs had a mean quality performance
score on 33 quality measures that increased from 71.8 percent in 2012
to 85.2 percent in 2013.
Other initiatives are also showing promising early results.
Findings of the early effects of the Comprehensive Primary Care
initiative (CPC) on service utilization and costs for attributed
Medicare fee-for-service (FFS) beneficiaries through September 2013 are
promising and more favorable than might be expected for the first 12
months of the initiative. Across all seven regions in the first year,
early results suggest that CPC has generated enough savings in Medicare
health care expenditures to nearly cover the CPC care management fees
paid by CMS for attributed Medicare FFS beneficiaries. CPC also
generated reductions in hospitalizations, outpatient ED visits, primary
care physician visits, and specialist visits.
The Partnership for Patients initiative, launched in April 2011
with funds provided by the Affordable Care Act, aims to save 60,000
lives by averting millions of hospital acquired conditions over three
years by reducing complications and readmissions and improving the
transition from one care setting to another. At the core of this
initiative are 26 Hospital Engagement Networks that work with 3,700
hospitals (representing 80 percent of the American population), working
with health care providers and institutions, to identify best practices
and solutions to reducing hospital acquired conditions and
readmissions. As of December 2014, an HHS report shows an estimated
50,000 fewer patients died in hospitals and approximately $12 billion
in health care costs were saved as a result of a reduction in hospital-
acquired conditions from 2010 to 2013. Preliminary estimates show that
in total, hospital patients experienced 1.3 million fewer hospital-
acquired conditions from 2010 to 2013, which translates to a 17 percent
decline in hospital-acquired conditions over the three-year period.
Question. Which of your programs are targeting the chronically ill,
and when will we see results from those programs?
Answer. Innovation Center models engage practices and serve
beneficiaries whose needs range from the simple to the complex. Many
Innovation Center models focus their efforts on chronically ill
beneficiaries using one of two strategies. Models such as the
Comprehensive Primary Care (CPC) Initiative and the Pioneer Accountable
Care Organization (ACO) Model are structured in such a way that many
practices and awardees have chosen to focus on the chronically ill as a
means by which to achieve savings and show success in the program.
Another set of Innovation Center models are explicitly defined to
meet specific needs of Medicare beneficiaries who are chronically ill
and high utilizers of services. For example, the Comprehensive End
Stage Renal Disease (ESRD) Care (CEC) Model is testing a new model of
care delivery and payment for the segment of the Medicare fee-for-
service (FFS) beneficiary population with ESRD. By creating incentives
for dialysis facilities, nephrologists, and other Medicare providers of
services and suppliers to collaboratively and comprehensively address
the extensive needs of the complex ESRD beneficiary population, it
seeks to improve outcomes for this population while reducing
expenditures. We anticipate that the CEC model will begin in 2015.
hit and meaningful use
Electronic health records and health information technology (HIT)
have made huge advancements over the past decade and the Meaningful Use
(MU) Program can largely be credited for that success. But we know that
there is still a long way to go to reach the full value of HIT for both
patients and providers. The MU program has had fits and starts along
the way, but we know the administration, lawmakers and providers want
the program to be successful to ensure the promise of electronically
integrated information that will benefit providers and patients alike.
Recently, HHS announced it plans to propose more flexibility in the MU
program, most importantly allowing for a shorter reporting period in
2015 for providers to meet MU, 90 days rather than 365 days.
Question. Can you explain the rationale for this decision?
Answer. CMS is working on multiple rulemaking tracks right now to
realign the EHR Incentive Programs to reflect the progress toward
program goals and be responsive to stakeholder input. CMS announced
earlier this year that they are considering proposals to:
Realign hospital EHR reporting periods to the calendar year to
allow eligible hospitals more time to incorporate 2014 Edition
software into their workflows and to better align with other
CMS quality programs.
Modify other aspects of the program to match long-term goals,
reduce complexity, and lessen providers' reporting burdens.
Shorten the EHR reporting period in 2015 to 90 days to accommodate
these changes.
These intended changes would help to reduce the reporting burden on
providers, while supporting the long term goals of the program.
The new rule, expected this spring, would be intended to be
responsive to provider concerns about software implementation,
information exchange readiness, and other related concerns in 2015. It
would also be intended to propose changes reflective of developments in
the industry and progress toward program goals achieved since the
program began in 2011.
Question. Where do you see the MU program going so that providers
and patients alike can receive value from their EHRs and their health
information? What is your definition of success for the program?
Answer. To date, we have more than 414,000 providers who have
earned an incentive payment for the adoption and meaningful use of
certified EHR technology in the Medicaid and Medicare EHR Incentive
Programs combined.
When the program first began we established the structure as a
series of progressive milestones or benchmarks to encourage the
adoption of certified EHRs rather than as a single goal. Stage 1 was
focused on structured data capture, Stage 2 is focused on sharing that
data and using health IT to support clinical processes, and Stage 3
will further focus on advanced use of EHRs for health information
exchange, patient engagement, and quality improvement. Earlier this
year we announced we would consider proposals to realign hospital
reporting timelines with the calendar year and modify other aspects of
the program to match long-term goals, reduce complexity, and lessen
providers' reporting burdens. We also announced a proposal to
transition from a full year to a 90 day reporting period in 2015 in
order to accommodate these other changes.
Regarding the definition of success for the program, we began by
focusing on obtaining success through adoption, and are moving toward
focusing on obtaining success through the advanced use of certified EHR
technology.
We have also identified progress towards key Stage 2 milestones,
such as the exchange of health information and ensuring that patients
have access to their records through an electronic means. We are
focused on a continuous improvement model, with certified EHR
technology as a foundation upon which delivery system reform can
continue to build. We envision providers in all settings of care being
able to freely exchange health information and patients having
electronic access to their health information in order to facilitate
engagement with their care team to make informed decisions about their
health. We are placing emphasis on enhanced patient safety as functions
such as clinical decision support interventions as well as electronic
transmission of prescriptions and clinical orders to allow for improved
real time checks within the clinical setting. Finally, we envision that
the data available on quality and patient outcomes can help to inform
best practice models and quality improvement initiatives to support
chronic disease management, reduce health disparities, and ultimately
improve health outcomes for patients.
We will know that we are successful when we see continued increase
in the overall number of providers achieving Meaningful Use each year,
improved performance over time, and an expansion in the meaningful use
of certified EHR technology.
unique device identifier (udi)
Question. The FDA is establishing a national unique device
identification system for medical devices, which will improve patient
safety and quality of care. When the system is fully implemented, the
label of most devices will include a unique device identifier (UDI).
The device labelers must submit information about each device to the
Global Unique Device Identification Database (GUDID), which will be
publically accessible to all stakeholders to search and download
information. However, there currently is no mechanism to capture the
UDIs associated with patient claims data. While including UDIs in
electronic health records may help better understand the safety and
quality impacts of specific devices for individual patients, this
mechanism does not allow for the aggregation or trending of data to
identify safety or quality issues. While registries are a potential
solution to this concern, they are unlikely to ensure the
comprehensiveness that is needed. Integrating UDIs into administrative
data would ensure comprehensiveness while also allowing for aggregation
and trending over time. While this option would require administrative
and claims data changes, it seems that the benefits of a claims option
could greatly outweigh the administrative burdens, particularly over
time as coding UDIs would become part of the regular process in claims
processing.
As Medicare and the private sector continue to emphasize quality as
their programs evolve, can you tell us the benefits of gathering UDI
information?
Can you discuss the pros and cons of including UDIs for implantable
devices in electronic health records?
Are there any significant barriers to including a data field on the
standard administrative claims form that would allow for the collection
of UDIs?
Can you discuss the pros and cons of including UDIs for implantable
devices on Medicare claims data? What are your views on starting with a
small number of the most relevant implantable devices?
Answer. HHS is committed to sharing information transparently to
improve the quality and safety of care delivered to people across the
country. The centerpiece--and most critical element--of post-market
surveillance is the incorporation of UDIs into electronic health
information; particularly electronic health records (EHRs) and device
registries.
UDIs incorporated into EHRs would allow the use of a device to be
linked with a patient's experience with that device, thereby generating
better information for patients and providers to make well-informed
decisions, and facilitate medical device innovation and safety
surveillance. The FDA, the Office of the National Coordinator for
Health IT (ONC), and the Centers for Medicare & Medicaid Services (CMS)
are working closely on the shared goal of incorporating UDIs into EHRs,
starting with implantable devices. UDIs incorporated into device or
procedure-related registries could have similar benefits as those noted
for EHRs. Registries could promote postmarket surveillance monitoring
and quality by serving as a single location where robust information
would be collected.
Key challenges include lack of standardized capture of the UDI on
the label at point of care (POC), a challenge that also applies to
claims reporting, and obstacles to electronic transmission of the UDI
(e.g., from EHRs to registries). Professional societies, as they either
modify or develop their registries, are increasingly enabling POC-
capture of UDIs. Consistent with the National Medical Device Postmarket
Surveillance System, the FDA continues to promote registry development,
both domestically and through international consortia. Additionally,
standards development organizations are tackling how to standardize
data transmission.
Some have suggested that incorporating UDIs into claims could also
facilitate device safety analysis. As a first step, the American
National Standards Institute's Accredited Standards Committee (ASC
X12), the body that develops and maintains electronic data interchange
standards, is exploring business cases for including UDIs into health
care transactions. Both CMS and FDA are participants and look forward
to continuing working through these issues at the ASC X12 Committee.
HHS also supports the recommendations by the National Committee on
Vital and Health Statistics to consider conducting voluntary pilot
tests of the benefits, costs, and feasibility of UDIs in claims
reporting between providers and commercials payers. Voluntary pilots
should address key challenges to adding UDIs to claims including
significant technological hurdles and costs (for providers, payers and
others), as well as difficulties in validating UDIs reported on claims.
benefits of the medicaid expansion and lost opportunities
Question. There are still 22 states that have not expanded
Medicaid. Medicaid dollars flow directly to health care service
providers such as physicians, hospitals, and nursing facilities--
further bolstering job growth in these sectors and having positive
indirect effects in other sectors of the economy. In 2013, the Kaiser
Family Foundation reviewed over 30 studies that universally showed
Medicaid's simulative impact on state economies. The President's
Council of Economic Advisers has also noted that Florida and Texas
alone would see over 33,000 new jobs in 2016 if they expanded their
Medicaid programs. These findings and others strongly suggest that the
states avoiding Medicaid expansion are missing out on considerable
economic opportunities.
Can HHS elaborate on the different ways Medicaid expansion might
help bolster state economies and create jobs?
Answer. HHS is eager to work with all states to expand Medicaid so
that they can take advantage of federal funding provided under the
Affordable Care Act. The Administration believes that consumers with
health insurance have better access to health care, get more preventive
screening and are financially protected in the event of a health
emergency. If non-expansion states reversed their decision, 255,000
fewer consumers would face catastrophic out-of-pocket medical costs and
810,000 fewer consumers would have trouble paying other bills because
of the burden of medical costs.\40\ Pre-Affordable Care Act (ACA)
Medicaid expansions have been associated with significant reductions in
consumer bankruptcy rates.\41\ State residents with a more secure
financial future are more productive workers, face less mental health
concerns like depression, and are able to invest in their education,
business or retirement.
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\40\ https://www.whitehouse.gov/sites/default/files/docs/
missed_opportunities_medicaid_0.pdf.
\41\ Gross, T. and Notowidigdo, M. (2011). Health Insurance and the
Consumer Bankruptcy Decision: Evidence from Expansions of Medicaid.
Journal of Public Economics 95(7-8): p. 767-778: http://
www.sciencedirect.com/science/article/pii/S0047272711000168.
Evidence suggests that Medicaid expansion is financially beneficial
to health care providers like physicians and hospitals. Recent HHS
analysis indicated that hospitals in Medicaid expansion states have
seen larger drops in uninsured/self-pay admissions and emergency
department visits than those in non-expansion states.\42\ When provider
balance sheets improve, they are able to grow their business and hire
more staff. Fitch Ratings, a financial information services firm,
recently released findings that healthcare jobs grew faster in states
that expanded Medicaid under the Affordable Care Act than those that
did not.\43\ Further, analysis from the President's Council of Economic
Advisors demonstrated that expansion would have boosted employment in
non-expansion states by 85,000 jobs in 2014 and 184,000 jobs in
2015.\44\
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\42\ http://aspe.hhs.gov/health/reports/2014/uncompensatedcare/
ib_uncompensatedcare.pdf.
\43\ https://www.fitchratings.com/gws/en/fitchwire/
fitchwirearticle/Healthcare-Jobs-Grew?pr
_id=980053&cm_sp=homepage-_-FitchWire-_-
Fitch:%20Healthcare%20Jobs%20Grew%20Faster
%20in%20ACA%20Expansion%20States.
\44\ https://www.whitehouse.gov/sites/default/files/docs/
missed_opportunities_medicaid_0.pdf.
States that have secure and healthy workforces, along with strong
healthcare sectors, are ripe for investment and job growth. HHS stands
ready to work with those states that wish to take advantage of this
important opportunity and expand high-quality, affordable coverage
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under Medicaid.
Question. Is any information forthcoming from HHS (or elsewhere in
the Administration) on the impact of Medicaid on the overall economy?
Answer. Yes, the Department is examining the economic impact of the
Medicaid expansion, and we will be happy to share the results of that
work once it is completed. Additionally, in July 2014 the Council of
Economic Advisors released a report titled: ``Missed Opportunities: the
Consequences of State Decisions not to Expand Medicaid.'' \45\
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\45\ https://www.whitehouse.gov/sites/default/files/docs/
missed_opportunities_medicaid_0.pdf.
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benefits of medicaid for children
Question. According to a new study from the National Bureau of
Economic Research, when kids have Medicaid they are more likely to earn
higher wages and pay higher federal taxes when they become adults. This
is great news for them and also the economy and our federal budget.
Can HHS provide more detail on how Medicaid enrollment might lead
to both longterm gains in revenue and benefits to child enrollees?
Answer. Medicaid and the Children's Health Insurance Program (CHIP)
are vital sources of health coverage for our nation's children. The
programs offer high-quality care and financial protection from
unaffordable health care bills. As you mentioned, the National Bureau
of Economic Research recently found that Medicaid has positive long-
term effects on mortality, amount of federal taxes paid and college
attendance. Because of these benefits, the study also concluded that
the government will recoup 56 cents of each dollar spent on childhood
Medicaid by the time these children reach age 60.\46\ This research
adds an important perspective to the ongoing discussion on Medicaid's
effectiveness and we look forward to future research demonstrating the
programs' positive impacts.
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\46\ http://www.nber.org/papers/w20835.
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care planning in medicare
Question. The Advisory Council on Alzheimer's Research, Care, and
Services makes recommendations to HHS on how to improve care for
individuals, including Medicare beneficiaries, living with Alzheimer's
and other dementias. The Advisory Council's 2014 recommendations
included the following recommendation: ``CMS should redesign Medicare
coverage and physicians' and other health care providers' reimbursement
to encourage appropriate diagnosis of Alzheimer's disease and to
provide care planning to diagnosed individuals and their caregivers.''
How can effective care planning improve care for patients with
Alzheimer's and other chronic diseases like cancer or diabetes?
Do you agree that Medicare can promote better care coordination if
care planning for Alzheimer's patients were covered and reimbursed?
Do you think that care planning could promote better care
coordination for all beneficiaries with a chronic disease?
Answer. CMS wants providers to have the resources and information
they need to coordinate patient care.
Chronic illnesses, such as Alzheimer's, heart disease and diabetes,
can be a major detriment to beneficiaries' quality of life and generate
significant expense for the Medicare program. In 2010, the 37 percent
of Medicare beneficiaries who were treated for four or more chronic
conditions accounted for 74 percent of all Medicare expenditures.
The goal of coordinated care is to make sure that beneficiaries,
especially the chronically ill, get the right care at the right time,
while avoiding unnecessary duplication of services and preventing
medical errors. Beneficiaries, their families, doctors, and taxpayers
will all benefit as we move our health care delivery system towards
more coordinated care.
CMS is working through a variety of programs and demonstrations to
test models of care and the effectiveness of coordinated care for high-
risk beneficiaries. One such model is the Medicare Coordinated Care
Demonstration.\47\ While this demonstration produced mixed results, it
has helped to inform CMS as they continue to look for ways to improve
care for beneficiaries and while producing savings for the Medicare
trust funds.
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\47\ http://innovation.cms.gov/Files/reports/
MedicareCoordinatedCareDemoRTC.pdf.
______
Questions Submitted by Hon. Chuck Grassley
maternal, infant, and early childhood home visiting (miechv)
Question. The Maternal, Infant, and Early Childhood Home Visiting
(MIECHV) program that serves so many families and children has enjoyed
bipartisan support because it embraces a common sense idea. It provides
states with the resources to design programs that they think work best
for their communities to strengthen families and save money. For
example, I know in my home state of Iowa, the MIECHV Program has helped
participating vulnerable families move toward self-sufficiency. In
fact, 86% of enrolled families have demonstrated an increase in income
and are better off now than when they started participating. Congress
needs to extend the program by March 31, and I look forward to working
with my colleagues on the Finance Committee to get the job done. We all
stand to benefit from this continued wise investment in our families.
Secretary Burwell, can you speak to the effective services that
families are receiving as a result of the MIECHV Program and the
likelihood that this program will produce good outcomes for children
and savings to the taxpayer?
Answer. The Home Visiting Program funds states, territories, and
tribal entities to develop and implement evidence-based home visiting
services for at-risk pregnant women and parents with young children up
to kindergarten entry. The program builds upon decades of scientific
research showing that home visits by a nurse, social worker or early
childhood educator during pregnancy and in the first years of life
improve the lives of children and families by preventing child abuse
and neglect, supporting positive parenting, improving maternal and
child health, and promoting child development and school readiness.
Research has also shown that evidence-based home visiting is a good
investment for taxpayers, as it can provide a positive return on
investment to society through savings in public expenditures on
emergency room visits, child protective services, special education, as
well as increased tax revenues from parents' earnings. In fiscal year
(FY) 2014, states reported serving approximately 115,500 parents and
children in 787 counties in all 50 states, the District of Columbia,
and five territories through the Home Visiting Program. Since 2012, the
Home Visiting Program has provided more than 1.4 million home visits,
building strong, positive relationships with families who want and need
support. In FY 2014, tribal grantees reported serving about 2,800
children and families as a result of the Tribal Home Visiting Program
and tribal grantees have provided nearly 18,000 home visits since the
start of the program. For more information on the Home Visiting
Program, including outcomes for children, please see the recently
released fact sheet entitled, The Maternal, Infant, and Early Childhood
Home Visiting Program Partnering with Parents to Help Children Succeed,
available at HRSA.gov.
sunshine act implementation
Question. Last year, rollout of the Open Payments website by CMS
involved multiple challenges and technical problems, such as the
incorrect attribution of payment data that resulted in a decision by
CMS to publish a substantial amount of data in de-identified form.
What steps are CMS taking to ensure that the same technical
problems will not occur this year?
Answer. Last year, CMS identified payment records submitted by the
applicable manufacturers and group purchasing organizations (GPOs) that
had inconsistent physician information, such as National Provider
Identifier (NPI) for one doctor and a license number for another. CMS
took the Open Payments system offline on August 3, 2014 to resolve
these data integrity issues and reopened the system on August 14, 2014.
During this period, CMS worked to verify that the physician and
teaching hospital identifiers reported by applicable manufacturers and
GPOs matched data in CMS or external data sources. This matching
verified that payment records were attributed to a single, consistent
physician or teaching hospital. Because these records represent
payments that were actually made and legally attested to by the
submitting company, they are available on the public website, but they
are de-identified by suppressing physician or teaching hospital
identifying information. To provide as complete a data set as possible
to the public, CMS published both ``identified'' and ``de-identified''
data.
On October 30, 2014, CMS made a non-public, downloadable Validated
Physician List available to applicable manufacturers and GPOs in the
Open Payments system. This list contains variations of physician
identifier information for physicians to whom payments were reported in
the Open Payments system in 2013, and is provided to assist with data
matching. Many of the inconsistencies identified in the returned
records were a result of physician identifiers not matching against CMS
or external data sources. CMS has encouraged applicable manufacturers
and GPOs to use the provided physician list to avoid further
inconsistencies in data reporting. CMS anticipates releasing similar
lists for upcoming years for industry use.
To correctly attribute records to covered recipients, CMS has
created covered recipients profiles based on the data in the National
Plan & Provider Enumeration System (NPPES) and the Medicare Provider
Enrollment, Chain, and Ownership System (PECOS). All payments or other
transfers of value and ownership or investment interest records
reported by applicable manufacturers and GPOs are then validated using
these profiles. Incoming records that contain incongruent identifying
information about covered recipients are rejected before entering the
system and returned to the applicable manufacturer or GPO for
correction.
CMS has also provided applicable manufacturers and GPOs with
numerous aids and guides to assist with data submission. These support
materials included the annually-updated teaching hospital list,
submission data mapping documents, sample submission files, the Open
Payments System User Guide, step-by-step detailed instructions, and
quick reference guides.
340b
Question. It was anticipated that last year, the Health Resources
and Services Administration (HRSA) would submit updated regulations
concerning the 340B drug program. Those regulations have not been
released.
Does HRSA intend to issue regulations concerning 340B? If yes, what
is the status of that regulation? If no, does HRSA plan to issue
guidance on the 340B program in FY 2015?
Answer. In 2014, HRSA planned to issue a proposed omnibus
regulation for the 340B Program to establish additional clear,
enforceable policy to advance our oversight of covered entities and
manufacturers. In May 2014, while the omnibus proposed regulation was
under review within the Administration, the U.S. District Court for the
District of Columbia issued a ruling addressing an earlier 340B
regulation concerning orphan drugs (certain drugs used to treat rare
conditions or diseases). The court invalidated the orphan drug
regulation, finding that HRSA lacked explicit statutory authority to
issue it. In light of this ruling, HRSA will issue proposed rules where
the statute is specific about rulemaking and provide revised guidance
to address critical policy matters raised by 340B Program stakeholders
for which there is a lack of explicit regulatory authority. The
guidance will enable covered entities and manufacturers fully comply
with statutory 340B Program requirements and will increase the
Department's ability to ensure effective implementation, oversight, and
monitoring of the 340B Program.
There are three areas of the 340B statute where HRSA has explicit
regulatory authority: calculation of 340B ceiling prices; imposition of
manufacturer civil monetary penalties; and implementation of a dispute
resolution process. HRSA expects to release Notices of Proposed
Rulemaking this year on these three issues. HRSA intends to release a
proposed omnibus guidance for public notice and comment later this
year. HRSA will review and consider public comments, and finalize the
regulations and guidance.
Question. How many audits did HRSA conduct of 340B hospitals in
FY2014, and what were the results of the audits?
Answer. HRSA applies a risk-based model taking into consideration
multiple factors when determining which entities to audit in any given
year. These factors include the length of time a covered entity has
been in the program, the number of associated sites, volume of
purchases, and the number of contract pharmacies. There are also
entities selected on a targeted basis, meaning that HRSA has
information regarding potential compliance issues that require further
review. In FY 2014, HRSA conducted 99 audits covering 1,476 outpatient
facilities and 4,028 contract pharmacies. Eighty of the 99 audits (81
percent) conducted in FY 2014 were conducted at 340B participating
hospitals and approximately 43 of these 80 have been finalized. The
remaining 340B audits on participating hospitals are in various stages
of being finalized with the covered entities. Of the 43 finalized, 28
percent had no findings. The remaining 72 percent had a range of
findings and are required to submit a corrective action plan to come
into full compliance and remedy any issues. These findings include:
37 percent had eligibility findings (i.e., database record errors,
including incorrect contact information);
44 percent had diversion of 340B drugs to non-340B patients; and
19 percent did not have mechanisms in place to prevent duplicate
discounts.
These audit findings are made available to the public on HRSA's
website. Once an audit is completed and the covered entity agrees with
the adverse findings, the covered entity has to submit a plan for
future compliance, including items such as correcting database errors,
training of staff, improving policies and procedures and correcting
system errors. The plan may also include repayment to affected drug
manufacturers, if applicable. All corrective action plans must be
approved by HRSA. HRSA monitors the covered entity during the course of
implementation and closes the audit upon completion of the corrective
action plan.
Question. How many audits did HRSA conduct of pharmaceutical
companies for 340B compliance in FY2014, and what were the results of
the audits?
Answer. HRSA, in partnership with the OIG, is currently conducting
an audit of a manufacturer. Once an audit is complete, the summary
information will be posted on HRSA's website. HRSA developed a protocol
for auditing manufacturers later this fiscal year.
Question. Please describe the oversight activities HRSA took in FY
2014 over the 340B drug program and planned oversight activities for FY
2015.
Answer. HRSA places a high priority on the integrity of the 340B
Program and has strengthened oversight of this program, particularly in
the last four years. As part of our oversight of the program, HRSA
verifies that both 340B-covered entities and manufacturers are in
compliance with 340B Program requirements. As a result of our enhanced
focus on compliance issues, there has been more attention paid to
compliance of program requirements by covered entities, which has
resulted in increased self-disclosures and voluntary terminations
initiated by the covered entities when requirements were not being met.
In order to augment these efforts, the Congress provided HRSA with an
additional $6 million in the Consolidated Appropriations Act for FY
2014. This funding has enabled HRSA to:
Improve information technology (IT) systems to more effectively
track entity and manufacturer compliance;
Increase the number of audits performed on covered entities and
manufacturers in order to ensure compliance; and
Hire additional auditors and staff to implement new IT investments
for expanded program integrity efforts.
HRSA ensures manufacturer compliance through development of
guidances (including issuance of forthcoming omnibus proposed guidance)
and policy releases. Additionally, HRSA verifies manufacturers in
Medicaid have signed a pharmaceutical pricing agreement, reviews all
allegations brought to our attention, requires refunds when a covered
entity is overcharged, and undertakes manufacturer audits, beginning
with the one currently underway and furthered by ongoing work on an
auditing protocol.
As noted previously, HRSA conducted 99 covered entity audits
encompassing 1,476 outpatient facilities and 4,028 contract pharmacies
in FY 2014.
HRSA plans to audit approximately 200 covered entities in FY 2015.
For FY 2015, HRSA has already completed 51 on-site audits of covered
entities encompassing 926 outpatient facilities and 2,114 contract
pharmacies. As of March 30, 2015, seven FY 2015 audits have been
finalized and are posted on the HRSA website.
medicare and medicaid improper payment
Question. Improper payment rates for Medicare increased in FY2013
and FY 2014. In Medicare Fee-for-Service, the amount of improper
payments increased from a low of $29.6 billion in 2012 to $36 billion
in 2013 and $37.3 billion in 2014.
Why are improper payment rates increasing?
Answer. HHS shares your concerns and we strive to be good stewards
of taxpayer and trust fund dollars. It is important to remember that
not all improper payments are necessarily fraudulent. Like other large
and complex Federal programs, Medicare, Medicaid, and CHIP are
susceptible to payment, billing, coding and eligibility errors referred
to as ``improper payments.'' While improper payments are not
necessarily indicative of fraud, HHS is committed to reducing all waste
within our programs.
The primary causes of Medicare FFS improper payments are
insufficient documentation and medical necessity errors. A large driver
of this year's increase in the Medicare FFS improper payment rate was
insufficient documentation for home health claims. It can take time for
providers and suppliers to fully comply with new policies, especially
those with new documentation requirements, which can increase the
improper payment rate until full compliance is achieved.
Question. What actions does HHS plan to take to address the
increase in improper payments made?
Answer. In all, Medicare receives about 3.3 million fee-for-service
claims each day, or 1.2 billion claims a year. Due to the high number
of claims, HHS is committed to paying claims in an accurate and timely
manner and has a comprehensive strategy in place to address the
Medicare improper payment rates. For the Medicare program, these
strategies include strengthening provider enrollment safeguards to
confirm only legitimate providers are enrolled and preventing improper
payments by using edits to deny claims that should not be paid. HHS
also develops targeted demonstrations in areas with consistently high
rates of improper payments and operates a Medicare fee-for-service
Recovery Audit Program to identify, recover, and prevent improper
payments.
HHS has developed targeted demonstrations to reduce improper
payments for items and services at high risk for fraud, waste, and
abuse, such as Power Mobility Devices (PMDs), where HHS found that over
80 percent of claims for PMDs did not meet Medicare coverage
requirements.\48\ HHS implemented the Medicare Prior Authorization of
PMDs Demonstration in seven high risk states in September 2012.\49\
Since implementation, HHS has observed a decrease in expenditures for
PMDs in both demonstration and non-demonstration states. Based on
claims processed as of November 14, 2014, monthly expenditures for the
PMDs included in the demonstration decreased from $20 million in
September 2012 to $6 million in June 2014 in the non-demonstration
states and from $12 million to $3 million in the demonstration
states.\50\ HHS expanded the demonstration to an additional 12 states
on October 1, 2014.\51\
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\48\ http://cms.gov/Research-Statistics-Data-and-Systems/
Monitoring-Programs/CERT/Down
loads/MedicareFFS2011CERTReport.pdf.
\49\ The seven states are: CA, IL, MI, NY, NC, FL and TX.
\50\ https://www.cms.gov/Research-Statistics-Data-and-Systems/
Monitoring-Programs/Medi
care-FFS-Compliance-Programs/Medical-Review/Downloads/
PMDDemoDecemberStatusupdate
12302014.pdf.
\51\ http://www.gpo.gov/fdsys/pkg/FR-2014-07-29/pdf/2014-17805.pdf;
the twelve states are: AZ, GA, IN, KY, LA, MD, MO, NJ, OH, PA, TN, and
WA.
HHS is also testing whether prior authorization helps to reduce
unnecessary expenditures, while maintaining or improving quality of
care. HHS issued a proposed rule in May 2014 to establish a prior
authorization process for certain durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS) items that are frequently
subject to unnecessary utilization. Additionally, HHS recently
implemented a prior authorization model for repetitive scheduled non-
emergent ambulance transport in New Jersey, Pennsylvania, and South
Carolina.\52\ HHS will also begin implementing a prior authorization
demonstration program for non-emergent hyperbaric oxygen therapy in
Illinois, Michigan, and New Jersey.\53\ HHS believes using a prior
authorization process will help ensure services are provided in
compliance with applicable Medicare coverage, coding, and payment rules
before services are rendered and claims are paid. The President's FY
2016 Budget includes a proposal that would build on the success of the
prior authorization demonstrations by giving CMS the authority to
require prior authorization for all Medicare fee-for-service items that
it determines are at the highest risk for improper payments.
---------------------------------------------------------------------------
\52\ http://www.cms.gov/Research-Statistics-Data-and-Systems/
Monitoring-Programs/Medicare-FFS-Compliance-Programs/Prior-
Authorization-Initiatives/Prior-Authorization-of-Repetitive
-Scheduled-Non-Emergent-Ambulance-Transport-.html.
\53\ T3http://www.cms.gov/Research-Statistics-Data-and-Systems/
Monitoring-Programs/Medicare
-FFS-Compliance-Programs/Prior-Authorization-Initiatives/Prior-
Authorization-of-Non-emergent
-Hyperbaric-Oxygen.html.
Question. How has the Recovery Audit Contracting program impacted
---------------------------------------------------------------------------
improper payment rates within Medicare?
Answer. The Recovery Audit Program identifies areas for potential
improper payments and offers an opportunity to provide feedback to
providers on future improper payment prevention. HHS uses Recovery
Auditors to identify and correct improper payments by reviewing claims.
HHS responds to the vulnerabilities identified by the Recovery Auditors
by implementing actions that will prevent future improper payments
nationwide. Since full implementation in FY 2010 through the fourth
quarter of FY 2013, the Recovery Auditors have returned over $5.4
billion to the Medicare Trust Fund. Additionally, MACs review claims
and conduct provider education to help providers avoid documentation
errors and other sources of improper payments, including articles or
bulletins providing narrative descriptions of the claim errors
identified and suggestions for their prevention. Other efforts include
system edits for improper payments that can be automatically prevented
prior to payment. HHS encourages collaboration between Recovery
Auditors and MACs to discuss improvements, areas for possible review,
and corrective actions that could prevent improper payments.
telehealth and rural healthcare
Question. Through telemedicine, Iowans in rural parts of the state
can access specialists in their home-communities, instead of traveling
to a big city for an appointment. Telemedicine saves patients in rural
America time and money. Unfortunately, there seems to be a disconnect
in the eligibility criteria for facilities that want to use this
technology for their Medicare population. CMS guidelines stipulate that
a hospital must be located outside an urban Metropolitan Statistical
Area (MSA) in order to be an originating site (which is the location of
an eligible Medicare beneficiary at the time the service furnished via
a telecommunications system occurs). CMS also indicates that Critical
Access Hospitals (CAH) are eligible to be originating sites.
The problem arises when a hospital is technically located in an
urban MSA, but through proper procedures and channels has obtained the
designation of a CAH. For example, Madison Country Memorial Hospital,
located in Madison County IA is considered to be located in an urban
MSA. However, in 2005 they received authorization from CMS to be re-
classified as a rural hospital and subsequently designation as a CAH.
Recently, they looked into offering telehealth services to their
Medicare patients and discovered they were unable to do so because of
the urban MSA rule, despite their designation as a CAH. Hospitals in
urban MSAs are allowed to re-classify as rural hospitals for a reason:
they serve a community that is, under other considerations, rural.
Do you believe hospitals in these, and similar circumstance, should
have the opportunity to provide telehealth services to their Medicare
population?
Answer. CMS must comply with statutory requirements related to the
sites eligible to furnish telehealth services. The law only allows
telehealth services to be furnished from originating sites that are
located in rural areas or rural health professional shortage areas
(HPSA). CAHs have a rural location requirement: the law requires that
CAHs either be physically located in a rural area or that they
reclassify as rural. Therefore, some facilities are located in urban
areas but have been able to obtain designation as CAHs because they
have reclassified as rural. One way in which a facility can reclassify
as rural for purposes of meeting the CAH rural location requirement, is
if it is located in a rural census tract of an MSA. However, CAHs do
not have to be located in an area that is a HPSA.
As in this case, if the rural census tract of an MSA is not a HPSA,
the CAH does not meet the statutory requirement for being a telehealth
originating site. The statutory provisions applicable to telehealth
originating sites are based on the physical location of the site.
Question. Is this discrepancy something Congress needs to fix, or
do you have any latitude in the matter?
Answer. CMS pays for telehealth services in accordance with the
statute. We are willing to work with Congress to provide technical
assistance on proposals to change the law.
drugs for the treatment of obesity
Question. The amount of money our country spends to combat obesity
and diabetes is incredible. But there are ways to address both, like
counseling those with diabetes regarding diet and exercise and coverage
for a new spate of FDA-approved drugs to treat obesity. These efforts
do require spending. But these are investments that will drive
reductions in the incidence of obesity and diabetes and their related
co-morbidities such as certain cancers, heart disease, hypertension,
and end stage renal disease to name a few. Undoubtedly, a reduction in
obesity and diabetes will lead to healthier individuals--which should
cost Medicare and Medicaid less money over the long term.
So I was disappointed to receive your letter in December 2014
indicating that you do not believe existing statute ``could be
construed to permit basic Part D coverage to include FDA-approved
weight loss drugs used to treat obesity'' and that Part D coverage for
such products ``would require a legislative change passed by
Congress.'' I hope this Committee will move such legislation this year.
In terms of your offer for HHS to provide technical assistance on
this matter, can you please report back to the Committee both
legislative technical assistance based on the bills from the 113th
Congress (S. 1184 and HR 2415) as well as provide any estimates of
potential cost savings to the Medicare and Medicaid programs if the
incidence of obesity and diabetes were reduced and/or delayed?
Answer. We welcome the opportunity to work with you to provide
technical assistance on this important issue. As you noted, counseling
on diet and exercise is critically important for those with diabetes.
Medicare covers diabetes self-management training for diagnosed
diabetics, as well as diabetes screening tests for those with risk
factors for diabetes (including obesity). Medicare also covers medical
nutrition therapy for persons diagnosed with diabetes or renal disease.
In addition, Medicare covers intensive behavioral therapy for obesity
in primary care settings. The availability and importance of these
services would also be highlighted, as appropriate, in the one-time
``Welcome to Medicare'' visit and the Annual Wellness Visit. Under
Medicare Part D, each Part D sponsor must have a Medication Therapy
Management program for beneficiaries with multiple chronic conditions
such as diabetes. Medication Therapy Management services include
interventions for beneficiaries and prescribers; an annual
comprehensive medication review which is an interactive, person-to-
person, or telehealth consultation performed by a pharmacist or other
qualified provider for the beneficiary; and quarterly targeted
medication reviews with follow-up interventions when necessary. CMS
also encourages sponsors to offer Medication Therapy Management
services to beneficiaries who fill at least one anti-hypertensive
medication, to support the Million Hearts Initiative.
medicare part d and network pharmacies
Question. During the 2015 open season, many pharmacies were listed
on Medicare's plan finder and on Aetna's website as being in network
that were in fact out of network, creating chaos for both pharmacies
and their patients. A very large concern is the worry that this could
happen again.
Were you aware that out of network pharmacies were listed on
Medicare's plan finder and on Aetna's website as in network?
Answer. Aetna disclosed to CMS that a total of 6,887 pharmacies
were erroneously identified by Aetna as ``retail in-network'' for 2015
on its website and through its call center customer service
representatives during the CY 2015 Annual Election Period. Once CMS
became aware of the issues that Aetna's pharmacy contracting strategy
created, CMS issued a compliance action requesting Aetna to implement a
Corrective Action Plan (CAP) on January 28, 2015.
Question. What will be done to ensure something like this doesn't
happen again?
Answer. In Aetna's Corrective Action Plan request letter, CMS
advised Aetna that its CAP should include plans for making certain that
any Part D pharmacy contracting process it may adopt for the 2016 plan
year is compliant with the CMS requirements. Also, CMS will review its
experience with Aetna's plan year 2015 Part D pharmacy contracting
process to determine what additional oversight might be appropriate to
make certain that beneficiaries and pharmacies are correctly and fully
informed of Aetna's (or any other Part D sponsor's) network pharmacy
arrangements for 2016.
state marketplaces
Question. Currently the question of subsidies available to
beneficiaries through federally facilitated marketplaces is being
considered before the Supreme Court.
If a state with a federally facilitated marketplace asked HHS/CMS
to deem that marketplace to serve as their state-based marketplace,
does HHS/CMS have the authority to grant that request?
Answer: We have previously provided public guidance with regard to
the process that states need to follow if they choose to operate a
state based marketplace and are willing to assist any state that would
like to do so.
______
Questions Submitted by Hon. Michael F. Bennet
Question. While plans on the Exchanges limit out-of-pocket
maximums, a large amount of discretion is left up to States to set
limits on exorbitantly high co-pays, co-insurance, and deductibles.
Unfortunately, I've seen some plans in Colorado with deductibles as
high as $6000 for an individual, and $12,000 for a family. Often, these
plans are combined with 30-40% co-insurance for specific services,
which can make them too expensive for a middle-class family.
Given that the transparency of pricing in our health care system is
still woefully inadequate, I wanted to know how much HHS is monitoring
this and ensuring that families that are on the Exchange feel confident
that we're taking steps to give these Colorado families the security
they need.
Answer. The Affordable Care Act is delivering on the promise of
access to high quality, affordable health care coverage, while
controlling the growth of health care costs. The creation of a
successful, viable health insurance market has benefits for all
Americans no matter where they get their health insurance.
There are five categories or ``metal levels'' of coverage in the
Marketplace. Plans in each category pay different amounts of the total
costs of an average person's care. This takes into account the plans'
monthly premiums, deductibles, copayments, coinsurance and out-of-
pocket maximums. Metal levels range from bronze, in which the health
plan pays 60 percent of care costs on average, to platinum, in which
the health plan pays 90 percent of care costs on average. Catastrophic
plans, in which plans pay on average less than 60 percent of care costs
on average and the consumer pays low premiums but have high
deductibles, are also available in the Marketplace. Consumers with low
and middle incomes may qualify for advance premium tax credits to help
lower their monthly premium costs and cost sharing reductions through
the Marketplaces to help with out of pocket expenses like copayments
and deductibles.
When choosing their health care coverage, consumers must consider
factors like the frequency of doctor visits and their need for regular
prescriptions. Although it may be impossible for families to predict
their health care needs, HHS is confident that they will be able to
find a high quality, affordable health insurance plan that will meet
their needs.
Question. I saw that the HHS budget has new proposals on child
welfare and foster care. As you know, this is a highly vulnerable
population, and these children need stability and resources in areas
with proven outcomes.
Given the focus on this area in your budget, can you share
additional background on the Administration's plans to invest more in
prevention and permanency through evidence-based programs?
Answer. Overall, the use and development of evidence-based programs
and interventions has the potential to ensure effective practice that
improves outcomes for families and children. Below, we provide specific
explanations of how evidence-based practice factors into the child
welfare proposals:
Title IV-E for Prevention and Permanency Services: We propose to
allow title IV-E agencies to claim federal reimbursement for pre-
placement and post-placement services included as part of the child's
case plan for candidates for foster care at 50 percent FFP (the same
rate as administrative costs). A majority of such funds must be used
for evidence based/informed interventions as defined by the Secretary.
Currently, states face challenges in providing evidence based/informed
services statewide because of the cost and the availability of
providers trained in these practices. Therefore, we estimate that 7.5
percent of services that child welfare agencies currently provide would
fall within the standards required under the proposed approach, and
expect the percentage will gradually increase over the next ten years
with the availability of IV-E funding for this type of service.
Demonstration to Address the Over-Prescription of Psychotropic
Drugs for Children in Foster Care: This proposal will include the
development and scaling up of screening, assessment, and evidence-based
treatment of trauma and mental health disorders among children and
youth in foster care with the goal to reduce the inappropriate reliance
on psychotropic medications and improve child and family well-being.
Youth in foster care have enough challenges without being overly or
inappropriately medicated. The existing evidence-base in the area of
trauma-informed psychosocial interventions warrants a large initial
investment to expand access to effective interventions.
Reauthorize, Modify, and Re-name the Abandoned Infants Assistance
Act to ``Protecting At-Risk Infants and Toddlers Act'': The
demonstration will support the development of evidence based
interventions that can safely prevent entry into out-of-home care as
well as interventions that meet the unique needs of infants and
toddlers who do enter care. Data from the National Survey of Child and
Adolescent Well-Being notes that many parents coming into contact with
the child welfare system with infants and toddlers are referred to
parenting classes, of which there is little efficacy evidence on their
ability to provide appropriate parenting support to families facing so
many challenges. The field is also lacking strong empirical information
on how to best serve the needs of mothers facing domestic violence. The
Institute of Medicine's 2013 report, New Directions in Child Abuse and
Neglect Research, notes a critical need to build a body of empirical
evidence on what strategies work for this population. This
demonstration program will address the needs of families with infants
and toddlers and simultaneously test the efficacy of strategies at all
levels of prevention.
Question. Also, would you be willing to work with my office to
determine the financial impact of shifting children from congregate
care to family foster care and how this affects outcomes?
Answer. Yes, we would be happy to work with your office on the
financial implications of the family-based care proposal. This proposal
is estimated to cost $78 million in FY 2016 and reduce costs of title
IV-E foster care by -$69 million over ten years. The Administration's
cost estimate assumes that the proposal will increase the availability
of family-based care and, as a result of establishing and enhancing
those services, states will move children from congregate placements to
family settings to better meet the needs of children while reducing the
costs for IV-E.
Title IV-E agencies will be reimbursed with 50 percent federal
financial participation (FFP) for administrative activities associated
with this oversight and eligibility documentation components of the
proposal. This rate is the same as current law, but we estimate that
IV-E agencies will have higher claims for eligibility determination
activities to implement and comply with the new requirements for
documenting the justification for congregate care settings and
acquiring judicial determinations every six months. We assume that the
additional claims related to this new procedure will decline as the
congregate care placements decline following the implementation of the
supports for family-based care.
The Children's Bureau, within the Administration for Children and
Families, produced a data brief that examined how, when, and for whom
congregate care is being used in the child welfare system (http://
www.acf.hhs.gov/programs/cb/resource/congregate-care-brief). The brief
highlights that seventy percent of children and youth in congregate
care are age 13 and older. Most of the youth in congregate care had a
DSM diagnosis, physical disability or entered care due to a child
behavior problem. Some of these children and youth were initially
placed into congregate care for treatment; others were subsequently
placed in congregate care because they were not able to remain in a
traditional foster family care placement.
The proposal seeks to reduce use of congregate care while improving
outcomes for children in two ways. First, the proposal promotes family-
based care for children who have been traditionally placed in
congregate care due to youth's complex needs through increased
investments in alternative interventions, specialized caseworker and
foster parent training, increased foster parent reimbursement for those
providing specialized care to high-need children and day treatment
programs.
In addition, the proposal promotes family-based care, through
increased oversight, for those children in congregate care, including
those who have no apparent clinical indicators. In 2013, there were
15,000 children (29 percent) who were placed in a congregate care
setting but had no identifiable clinical indicators.
Second, the proposal creates a new eligibility requirement under
title IV-E requiring documentation to justify congregate care as the
correct foster care placement setting, based on the child's mental,
behavioral or physical health needs and the congregate care provider's
ability to address those needs. The oversight requirements will both
require more careful scrutiny of the appropriateness of these
placements and give states a financial incentive to ensure that
residential care placements are used appropriately and only for as long
as the specific interventions provided in the placement are necessary.
This proposal would require states to review case plans for all
children currently in congregate care, and moving children who do not
have clinical needs out of congregate care and new children entering
congregate care setting. The goal is that children are only placed in
congregate care, when it is medically appropriate, and determined to be
the least restrictive foster care placement setting. In order to
support family based care for children with complex needs, the
President's budget proposal increases reimbursement for specialized
caseworker training and case management, increases reimbursement for
foster parent who provide therapeutic care and provides additional
reimbursement for day treatment.
Question. In my home state of Colorado, the population of seniors
choosing Medicare Advantage is rising. About 250,000 Coloradans
representing nearly 35% of all beneficiaries in the state are in a
Medicare Advantage plan. I want to ensure that seniors across my state
continue to have their choice of providers and Medicare Advantage plans
no matter their health status. One of the concerns I have involves CMS'
discretion in implementing Medicare Advantage's risk adjustment. For
2014, CMS proposed fully implementing a new risk-adjustment model.
After many groups, including MedPAC, raised concerns that it
artificially lowered payments and affected plans serving a large share
of chronically ill beneficiaries, CMS opted to phase-in the new model
by blending it with the previous model.
While I understand you cannot comment on the specifics of upcoming
notices, are these types of trends informing CMS's rulemaking process?
Answer. We believe that the new risk adjustment model pays more
accurately and supports a stronger, more robust Medicare Advantage
program. The new model incorporates updates that better predict costs
and improvements that will allow CMS to incorporate new diagnosis
codes. In addition, the new model decreases the impact on risk scores
of plans' coding efforts. CMS has used the new model for part of MA
plans payments for 2014 and 2015 and expects that plans should now be
familiar with the new model.
Question. As many on the Committee have discussed already and in
keeping with your budget priorities and the move away from fee-for-
service models, I just wanted to take a minute to highlight some of the
work Colorado has been doing since the passage of the Affordable Care
Act to transform the delivery system. We were one of the first states
to invest in a multi-payer medical home, which resulted in a 15 percent
reduction in ER visits, and significant cost savings for Coloradans in
both public and private plans. This model has now become the standard
for primary care across the state. Similarly, our Medicaid program
launched an Accountable Care Collaborative that links every member to a
primary care provider to coordinate his or her care. This program saved
$44 million in our state over the last three years and resulted in a
nearly a 20% reduction in hospital readmissions.
As we begin to see more of these results from successful state
models, what are your plans for scaling these efforts?
Answer. We applaud Colorado's achievements to transform their
health care system to improve care while also reducing cost. The
Centers for Medicare and Medicaid Services is actively working with
states, consumers and health care providers to transform the health
care delivery system. Through the CMS Innovation Center, we are
supporting the development and testing of innovative payment and
service delivery models that aim to achieve better care, better health,
and lower cost through improvement for our health care system. Also, as
you may know, last year CMS launched the Medicaid Innovation
Accelerator Program (IAP) to accelerate new payment and service
delivery reforms in the Medicaid program. We are using the IAP to work
closely with states, consumers, and health providers on these critical
issues through technical assistance, tools development and cross-state
and national learning opportunities.
And how can we here in Congress help HHS as it begins the process
of taking these state models nationwide?
Answer. Initiatives such as the IAP, Health Homes, and
demonstration waivers serve as avenues by which states can test
delivery system models and collaborate in an environment that produces
real results. Through the IAP, we are building on lessons and
recommendations we have heard from our state partners for specific
opportunities to advance innovation, and we will develop strategically
targeted resources and technical assistance that states can leverage to
accelerate Medicaid-focused innovations to transform health care.
Efforts to expand successful models will take place after the
evaluation of these models.
______
Questions Submitted by Hon. Johnny Isakson
Question. Last May, I, along with Chairman Hatch, HELP Committee
Chairman Alexander, and Senator Burr sent a letter to FDA Commissioner
Hamburg raising a number of serious concerns about the FDA's use of
draft guidances. We have still not received a response. Additionally,
it took 10 months for the FDA to respond to questions for the record
from a Senate HELP Committee hearing last March. As the Senate prepares
to consider reforms to strengthen America's leadership in medical
innovation, we are going to need much more cooperation and
responsiveness from HHS agencies, including the FDA.
Will you commit to ensure that we get this cooperation?
Answer. I absolutely commit to cooperating with the HELP Committee
as you embark on medical innovation legislation. I understand that
senior officials from the FDA, NIH, the Office of the Assistant
Secretary for Planning and Evaluation, and the Office of the National
Coordinator have conducted a series of briefings for the Committee
staff on the innovations in medical research, streamlining medical
product approvals at the FDA, utilization of ``big data'' and other
topics. We look forward to continued discussion as the process moves
forward.
Question. The President's FY 2016 budget creates the Effective
Health Insurance Initiative, which spends $30 million each year for ten
years for a new project to examine how changes in health insurance
benefit packages impact health care utilization, costs, and outcomes.
Can you detail what specific metrics you will use to examine
utilization, costs, and outcomes, as well as what you hope these
results will accomplish?
Answer. The goal of the Effective Health Insurance Initiative is to
produce rigorous evidence about how the structure of health insurance
can be modernized in a way that improves health outcomes while
controlling costs. The study's results will become a resource for
policymakers and insurers to understand how changes in health insurance
would affect health care quality, health outcomes, utilization, and
costs.
The results of the study are intended to accomplish three key
goals:
Identify insurance designs that promote better health and lower
costs by helping people become more effective health care
consumers;
Enable federal and state policymakers, employers, and insurers to
select effective benefit designs and evaluate costs of
alternative designs, including for key populations of interest;
and
Provide sound data to estimate how changes in health insurance may
impact spending growth.
Metrics to examine utilization include the share of people who use
any health care services and the number of services used, measured
overall and by specific categories such as inpatient hospital,
outpatient hospital, physician, pharmaceutical, and across preventive,
chronic, and acute care. Examples of cost metrics include total
spending per person; spending by service type; and the number of
episodes and costs per episode of spending. Quality and health outcomes
metrics will draw from an array of recently developed measures
including receipt of clinically recommended care, preventable
hospitalization rates, outcomes following episodes such as
hospitalizations, consumer assessments of health plans and health care,
and patient health and functional status. Further, this study will
provide an opportunity to examine these metrics among subpopulations,
such as those with chronic illness or low-incomes, where targeted
findings could provide particular improvements.
Question. How will the fate of this study differ from the 21-year
National Children's Study which abruptly ended in December of 2014 yet
cost approximately $195 million for each year of its existence?
Answer. The Effective Health Insurance Initiative will build upon
the successful experience of a prior large scale study whose results
are still used today. In contrast, the National Children's Study (NCS)
was a proposed national longitudinal study of environmental influences
(including physical, chemical, biological, and psychosocial) on child
health and development--a first of its kind undertaking. The National
Academy of Sciences conducted two reviews of the NCS, with a similar
conclusion in 2014 as in 2008, ``. . . [the study] offers enormous
potential, but it also presents a large number of conceptual,
methodological, and administrative challenges.'' As a result of a
review by an Advisory Committee to the NIH Director (ACD) working
group, which determined that the NCS was not feasible as currently
outlined, the NIH Director discontinued the study. However, NIH remains
committed to research at the intersection of environmental and
children's health, and will support research in this area through
alternative approaches.
The aim of the Effective Health Insurance Initiative is to foster
judicious use of health care resources. To do so, the Effective Health
Insurance Initiative will build upon the proven success of the landmark
1970 Health Insurance Experiment study, and leverage recent research
advances. Not only was the Health Insurance Experiment successfully
completed, its results are still regarded as the best evidence on the
effects of cost sharing on utilization and outcomes due its gold
standard randomized study design. The Effective Health Insurance
Initiative will utilize a strong infrastructure of already developed
conceptual underpinnings, metrics, and data collection techniques that
have been refined over the past four decades. In addition, it will
develop a management and scientific oversight infrastructure to ensure
sound study design and operations. In sum, the Effective Health
Insurance Initiative is a feasible and valuable study whose results
would facilitate effective health care resource use in the years ahead.
Question. Several weeks ago, your department announced a target of
tying 50 percent of Medicare payments to alternative, value-based
payment models by 2018. That's an admirable goal, but I think it's
worth noting that 30 percent of Medicare beneficiaries are already
enrolled in Medicare Advantage plans that receive capitated payments.
I'm concerned that CMS policies continue to discourage plans from
signing up seniors with multiple chronic conditions who would benefit
the most from care coordination. The Medicare Payment Advisory
Commission has estimated that Medicare's risk adjustment model already
underpays by 29 percent for the sickest beneficiaries, yet your budget
proposes $36 billion in additional cuts to Medicare Advantage risk
adjustment.
Why has CMS continued to offer further cuts while ignoring the
proposals from MedPAC and others to improve risk adjustment, such as
paying more to care for beneficiaries based on the number of chronic
conditions they have?
Answer. The purpose of risk adjustment is to target payments to
those plans that have relatively sicker enrollees and, therefore,
higher expected costs. We believe the new model incorporates updates
that improve payment accuracy while at the same time addressing
differential coding patterns by some Medicare Advantage Organizations.
Model updates are not intended to cut payments to Medicare Advantage
plans, but to pay more accurately. CMS takes seriously suggestions for
model improvement from stakeholders and continuously conducts research
to explore the best approach to improving the model.
CMS appreciates the importance of identifying ways to better align
incentives and improve care for beneficiaries with chronic conditions.
CMS is working through a variety of programs and demonstrations to test
models of care and the effectiveness of coordinated care for high-risk
beneficiaries. Models such as the Comprehensive Primary Care (CPC)
Initiative and the Pioneer Accountable Care Organization (ACO) Model
are structured in such a way that many practices and awardees have
chosen to focus on the chronically ill as a means by which to achieve
savings and show success in the program. In addition, the Center for
Medicare and Medicaid Innovation is working on developing new payment
and delivery models specifically focused on innovation in health plans.
Public responses to a request for information issued in late 2014
generated valuable feedback to inform this work. Such payment and
delivery models will further move Medicare towards value-based
purchasing.
Question. Hundreds of trauma centers have closed over the past two
decades providing diminished access in particular for rural communities
and in areas with high shares of African-American residents, low-income
people, and the uninsured. We have seen this impact in Georgia as
trauma center closures continue to exacerbate disparities in access and
quality of health coverage in our state and across the nation.
Why has the Administration not prioritized trauma and emergency
care funding in the FY2016 Budget?
Answer. I would like to assure you that federal support for local
trauma systems, emergency care, and disaster preparedness remains a
high priority of the administration. From 1992-2005, trauma systems
grants supported through the Health Resources Services Administration
(HRSA) provided $17 million to ``enhance the development of trauma care
systems.'' The Trauma system grants served as a key building block to
saving the lives of injured Americans. Now, 90 percent of the U.S.
population, and 89 percent of Georgians, are within 60 minutes (by
ground or air) of a level 1 or 2 trauma center (2010, data, reference:
www.traumamaps.org). While there are state and local challenges, the
overwhelming majority of Americans now have rapid access to trauma
care.
We are committed to support trauma and emergency care. ASPR
supports the Emergency Care Coordination Center (ECCC) which leads the
U.S. Government's efforts to create an emergency care system that is
patient and community-centered, integrated into the broader healthcare
system, high quality, and prepared to respond in times of public health
emergencies. The ECCC convenes a government-wide Council on Emergency
Medical Care (CEMC) to identify and prioritize interagency emergency
care issues. ECCC has brought increasing attention to emergency and
trauma care in the delivery system reform initiative that is currently
a key focus of the administration. Our vision is that Trauma, burn, and
emergency care on the whole will be seamlessly integrated into the
broader healthcare system.
Also, ASPR's Hospital Preparedness Program (HPP) supports regional
emergency and disaster care system planning, along with a complementary
Public Health and Emergency Preparedness Program at the Centers for
Disease Control and Prevention (CDC).
HHS is also an active member of the Federal Interagency Committee
on EMS (FICEMS) which coordinates federal agencies involved with state,
local, tribal, and regional emergency medical services, 9-1-1 systems
and trauma centers.
HHS continually encourages improvement in the delivery of health,
emergency, and trauma care. We recognize that the day-to-day health
care and public health system are the foundation of a community's
ability to respond and recover from disasters and these systems must
function effectively. Because the private sector encompasses most
emergency and trauma care enterprises, HHS sponsors, through ASPR and
CDC preparedness grants, research, guidance, and support to emergency
and trauma care systems. I look forward to working with you to ensure
we support the important work of our nation's dedicated trauma centers.
I would like to assure you that federal support for trauma systems,
disasters, and emergency care remains a high priority of the
administration.
Question. In June of 2014, the Department of Health and Human
Services (HHS) announced a delay in the release of the Final Rule on
Medicaid Covered Outpatient Drugs. What is HHS' current timeline for
release of the Final Rule, Final AMP-based Federal Upper Limits (FULs)
and corresponding guidance for implementation of the Final AMP-based
FULs?
Answer. As you know, on February 2, 2012 the Centers for Medicare &
Medicaid Services (CMS) issued a notice of proposed rulemaking (NPRM)
on Medicaid covered outpatient drugs. This proposed rule would revise
requirements pertaining to Medicaid reimbursement for covered
outpatient drugs to implement provisions of the Affordable Care Act.
This proposed rule would also revise other requirements related to
covered outpatient drugs, including key aspects of Medicaid coverage,
payment, and the Drug Rebate Program.
The NPRM generated significant feedback from stakeholders. We are
continuing to work on the Medicaid Covered Outpatient Drug final rule
(CMS-2345-F), but, at this time, do not have a release date. As stated
in a November 2014 Informational Bulletin, CMS expects to release the
Affordable Care Act Federal Upper Limits (FULs) at or about the same
time that we publish the Medicaid Covered Outpatient Drug final rule.
At that time, we also plan to issue formal detailed guidance to the
states on implementing the Affordable Care Act FULs.
Question. Once HHS releases the Final Rule on Medicaid Covered
Outpatient Drugs, the Final AMP-based FULs and corresponding guidance,
the states will need time to implement those changes. State efforts may
prove difficult due to the timing of state legislative sessions, the
need for cost of dispensing studies, and the legislative and regulatory
process for changing Medicaid drug reimbursement methodologies.
In light of these concerns, will HHS provide states with the
necessary one year time frame for implementation?
Answer. CMS is mindful of states' concerns in this area. CMS
intends to issue formal detailed guidance to states to implement the
Affordable Care Act FULs, including the information that states will
need to include in their Medicaid state plan amendments and detailed
timelines for compliance. We expect to release the finalized Affordable
Care Act FULs and formal guidance on implementation at or about the
same time that we publish the Medicaid Covered Outpatient Drug final
rule.
Question. Secretary Burwell, as you know, there was an issue with
some Medicare Part D drug plans listed on the Medicare Plan Finder
website during the 2014 Medicare open enrollment period. Some seniors
were given incorrect information regarding which pharmacies were in-
network when selecting a plan last year. I appreciate CMS's efforts to
work with me and local pharmacists in Kansas to establish a special
enrollment period for Medicare Part D beneficiaries who enrolled in a
plan that listed an incorrect pharmacy network on the Medicare Plan
Finder.
How does CMS ensure that the approved plan network is accurate when
presented to beneficiaries during open enrollment?
Answer. CMS appreciates that Medicare beneficiaries need accurate
information on provider networks in Medicare Advantage plans. CMS' role
is to ensure the plan's network meets Medicare's pharmacy network
requirements, oversee the requirement that plans offer standard terms
and conditions to pharmacies upon request, and monitor that the sponsor
is notifying affected beneficiaries and pharmacies of major changes.
Part D sponsors may add or remove pharmacies from their networks at any
time during the year. Also, CMS will review its Part D plan year 2015
experience to determine what additional oversight might be appropriate
to make certain that beneficiaries and pharmacies are correctly and
fully informed of Part D sponsors' network pharmacy arrangements for
2016.
Question. What rules are in place to ensure beneficiaries have
access to a broad network of pharmacies?
Answer. Part D sponsors must secure the participation in their
pharmacy networks of a sufficient number of pharmacies that dispense
drugs directly to patients (other than by mail order) to ensure
convenient access to covered Part D drugs by Part D plan enrollees. CMS
convenient access rules require Part D sponsors to establish pharmacy
networks in which:
In urban areas, at least 90 percent of Medicare beneficiaries in
the Part D sponsor's service area, on average, live within 2
miles of a retail pharmacy participating in the sponsor's
network;
In suburban areas, at least 90 percent of Medicare beneficiaries
in the Part D sponsor's service areas, on average, live within
5 miles of a retail pharmacy participating in the sponsor's
network; and
In rural areas, at least 70 percent of Medicare beneficiaries in
the Part D sponsor's service area, on average, live within 15
miles of a retail pharmacy participating in the sponsor's
network.
______
Questions Submitted by Hon. Patrick J. Toomey
Question. The World Health Organization (WHO) is convening the
First WHO Ministerial on Dementia on March 16 and 17 in Geneva. As you
know, dementia is a progressive neurological condition that affects
more than 5 million Americans and another 40 million people around the
world. Globally, the costs of care are creating a significant drag on
global economic activity. The US has been an historic leader in
biomedical research generally and in Alzheimer's efforts specifically.
It would seem to me that it would be important that our top health
official attend this WHO Ministerial. What is your view?
Answer. The Department of Health and Human Services (HHS) strongly
supports all work on dementia that can help accelerate our
understanding of the condition and any possibilities for medical and
human services interventions. HHS also understands that until
interventions can be developed, work must also focus on improving the
current care of patients with dementia and supporting patients and
their caregivers. To this end, HHS coordinates the National Plan to
Address Alzheimer's Disease and the National Advisory Council on
Alzheimer's Research, Care, and Services, both mandated by the National
Alzheimer's Project Act.
HHS understands that the U.S. is inextricably linked to global
effects of and efforts on dementia, and that we necessarily need to
collaborate with international partners to achieve the fastest outcomes
and advancements possible. For this reason, from the beginning we have
been and remain strong supporters of the Global Action Against Dementia
(GAAD), initiated by the United Kingdom under the
G-8/G-7 and now transitioning to the World Health Organization, where
there will be a broader collaborative reach across the globe and more
stable institutional support for the work.
The importance of this topic to HHS is the reason why we sent a
high-level delegation to the WHO Ministerial, representing a blend of
policy and scientific expertise needed to shepherd the transition,
develop a related Call for Action, and send a signal of strong and
continued U.S. Government support for GAAD. Although the Secretary will
not be at the event in person, she has developed a personal statement
of support to be read at the event on her behalf by the ranking U.S.
diplomat to the UN in Geneva, Ambassador Pamela Hamamoto. Additionally,
the Secretary will be attending the Sixty-Eighth World Health Assembly
in Geneva, May 18-26, where the topic of dementia also is likely to be
discussed in an international forum.
Question. In its fall 2012 regulatory agenda, the Centers for
Medicare and Medicaid Services (CMS) published that a Notice of
Proposed Rulemaking to revise the Medicare Programs of All-Inclusive
Care for the Elderly (PACE) regulation would be issued in July 2013.
Since then, the projection has been delayed to December 2013, August
2014, and most recently to Spring 2015. In fall of last year I joined
several Senators on this committee urging to use the upcoming
rulemaking to enhance flexibility within the PACE program. What
assurances can you offer that CMS will meet its deadlines and issue a
revised regulation this spring?
Answer. We share your desire that the PACE program have the
operational and regulatory flexibility necessary to serve our most
vulnerable Medicare and Medicaid beneficiaries. CMS is currently
performing a comprehensive review of the federal regulations governing
PACE to identify potential regulatory changes to reflect the evolving
needs and opportunities of the program. As CMS continues to contemplate
potential regulatory changes to PACE they have implemented a number of
improvements, including streamlining the application process, updating
the notification requirements for the use of alternative care settings,
and establishing a new PACE council to bring together different
components of the agency to focus on PACE issues.
______
Questions Submitted by Hon. Mike Crapo
part d
Question. Time and again, Obamacare has proven government
intervention in our health care system does not work. Hundreds of
thousands of Americans have been forced from the insurance and doctors
they liked because of this law. Premiums and deductibles continue to
rise. Little to nothing has been done to address the underlying causes
of rising health care costs--instead this Administration has relied on
the ill-conceived notion that government bureaucracy is the answer to
the many inefficiencies plaguing our health care system. Your budget
now requests the authority to micro-manage Medicare Part D, a market-
oriented prescription drug program chosen by 35 million Medicare
beneficiaries, which has proven to be successful because the government
has been prevented from interfering.
Why has the Administration not yet learned that increased
government control of the market reduces choice, raises costs, and
diminishes quality?
Answer. The Medicare Part D prescription drug benefit program has
been very successful. The program has made medicines more available and
affordable for Medicare beneficiaries, leading to improvements in
access to prescription drugs, better health outcomes, and greater
beneficiary satisfaction with their Medicare coverage. In addition, the
drug benefit is helping beneficiaries avoid the need for other services
that would otherwise be covered under Medicare Parts A and B; the
Congressional Budget Office (CBO) has estimated that a one percent
increase in the number of prescriptions filled by beneficiaries causes
Medicare's overall spending on medical services to fall by roughly one-
fifth of one percent. According to surveys, 95 percent of Part D
enrollees are satisfied with their drug coverage and confident that the
level of coverage meets their needs.
While beneficiaries are saving money, government subsidies for
reinsurance and low-income cost sharing subsidies continue to increase.
Moreover, Part D costs are projected to increase with the introduction
of new, expensive biologic therapies, making it important to find ways
to reduce costs when possible in order to keep premiums low.
Question. Would you be willing to work with Congress to choose a
smarter path that increases competition and brings down costs to
beneficiaries?
Answer. HHS is always willing to work with Congress to improve the
Medicare program, including the Medicare prescription drug benefit.
medicare advantage
Question. Your budget again proposes cuts to the successful,
market-based Medicare Advantage (MA) program. CMS's repeated attempts
to use the MA program as a ``piggy-bank'' to offset Medicare program
inefficiencies undermines the future stability of the program.
Furthermore, CMS continues to phase-in a flawed risk adjustment (RA)
model that has been called inaccurate by MedPAC. The proposal also
ignores the practical experience and knowledge of providers that
understand the implication of such actions on beneficiaries.
Shouldn't the risk adjustment model ensure plans have appropriate
resources to deliver high-quality care and services to beneficiaries
and reflect improvements recommended by MedPAC and other stakeholders?
Answer. The purpose of risk adjustment is to target payments to
those plans that have relatively sicker enrollees and, therefore,
higher expected costs. We believe the new model incorporates updates
that improve payment accuracy while at the same time addressing
differential coding patterns by some Medicare Advantage Organizations.
Question. How can CMS better incorporate the recommendations of
stakeholders and others in the development of an improved risk
adjustment model?
Answer. CMS takes seriously suggestions for model improvement from
stakeholders and continuously conducts research to explore the best
approach to improving the model.
Question. What can CMS do to ensure transparency when making
adjustments to the RA model?
Answer. Whenever CMS updates a risk adjustment model they provide a
description of the updates in the Advance Notice for the relevant
payment year. They often provide information for review outside the
Notice process, including updated diagnoses groupings and plan-specific
impacts. CMS will continue this practice, as well as explore ways to
share information prior to the Advance Notice. We are open to
discussions with stakeholders on how we can better communicate
information about models updates.
Question. I note your interest in health care delivery reform and
moving to coordinate care for Medicare beneficiaries. Fortunately, in
Medicare Advantage, we have a program in place that already does that
cost-effectively and successfully. In many rural states, such as Idaho,
Medicare Advantage plans have used collaborative efforts to increase
beneficiaries' primary care visits by almost 100 percent.
The key to reducing cost in the Medicare program is coordinating
patient care, especially for those that have many chronic conditions.
Getting these patients to see a Primary Care Physician (PCP) is
critically important because research shows most beneficiaries with
chronic conditions won't participate in a chronic care program without
the encouragement from a PCP.
These seniors are getting their care directed and coordinated, and
this is precisely the kind of results we want to encourage. Many are
concerned, however, that, as you look at payment rates for 2016, the MA
program is going to be cut or curtailed in its ability to provide the
best possible care for our seniors in Idaho and around the country.
What should we expect as we look forward to the next MA rate
notice?
Answer. Enrollment in Medicare Advantage plans is now at an all-
time high and quality in the Medicare Advantage and the Part D
Prescription Drug Program continues to improve. Medicare Advantage has
reached record high enrollment each year since 2010, a trend continuing
in 2015 with a total increase of more than 40 percent since passage of
the Affordable Care Act, and premiums have fallen by nearly 6 percent
from 2010 to 2015. And, more than 90 percent of Medicare beneficiaries
have access to a $0 premium Medicare Advantage plan. CMS is focused on
building on this success with policies that will enhance the stability
of the Medicare Advantage program and continue the movement to reward
providers of high quality,
consumer-friendly care.
critical access hospitals
Question. The Administration has proposed various cuts to critical
access hospital (CAH) reimbursements and participation, including
repealing CAH designation for facilities within 10 miles of another
hospital. This distance requirement does not consider the services
offered by the ``other'' hospital. For example, there is a CAH in
Blackfoot, Idaho, within two miles of two different hospitals. However,
one of these facilities is a state-owned psychiatric facility that
provides long-term and acute inpatient care for mentally ill patients.
The other is a small neurological specialty hospital that provides
primarily spinal surgery services and does not have an emergency
department staffed with a physician 24 hours a day. Under the
President's proposal, this CAH in Blackfoot, Idaho, would lose its
designation, even though the other two facilities are incapable of
providing emergency capabilities or obstetrics.
What steps will you take to ensure rural residents continue to have
access to health care services should CMS adopt this proposal?
Answer. We take the concerns and care of rural Americans very
seriously and agree that adequate access in these areas is critically
important. This proposal is targeted to ensure that hospitals that are
the only source of emergency and basic inpatient care for their
communities will maintain Critical Access Hospital status. Only
communities that have another source of hospital care within ten miles
will be affected. In addition, it is anticipated that the vast majority
of these CAHs would continue to participate in Medicare as hospitals
paid under the applicable prospective payment system, and would
continue to provide hospital services to their communities without
reliance on CAH designation. In addition, because Medicare is not the
only payer for these CAHs, they could also continue receiving payment
from other payers.
In the event that some of the potentially affected CAHs were to
close, CMS analysis found that there likely is sufficient capacity in
nearby facilities to provide the services any closed CAH had been
providing. Overall, the data suggests that there would be no
significant issues related to access to inpatient acute care services
or skilled nursing services for the communities currently being served
by the potentially affected CAHs should the CAH cease to provide
services rather than convert its Medicare agreement to participate as a
hospital. Additionally, HHS will continue to monitor rural communities
to ensure that access to medical care is preserved.
Question. Does the President support an exceptions process for CAHs
like the one in Blackfoot, which are the only facilities capable of
providing emergency response and other essential procedures in their
respective communities?
Answer. If this proposal became law, the impact on the status of
any particular CAH would be determined by the CMS regional office on a
case-by-case basis and would depend on the legislative language and
implementing regulations.
______
Questions Submitted by Hon. Michael B. Enzi
mandatory health care savings
Question. The President's budget includes $400 billion in displayed
net mandatory health care savings. The President also call for an
extension of CHIP funding, a permanent Medicare ``doc fix,'' an
immigration plan that would increase health spending and new Medicare
spending as a result of turning off the BCA sequester.
When you add these elements of the President's budget to the $400
billion in displayed net mandatory health savings, what is the new net
health savings amount?
Answer. The Budget includes about $400 billion of specified net
health savings that grow over time, extending the life of the Medicare
Trust Fund by approximately five years, and building on the Affordable
Care Act with further incentives to improve quality and control health
care cost growth. This includes a proposal to accelerate physician
participation in high-quality and efficient health care delivery
systems by repealing the Medicare Sustainable Growth Rate formula and
reforming Medicare physician payments in a manner consistent with the
reforms included in recent bipartisan, bicameral legislation.
These savings are estimated against the Budget's adjusted baseline,
which assumes that large reductions in Medicare physician payment rates
required by law under a formula, commonly referred to as the
``sustainable growth rate'' (SGR), do not take place. This formula has
called for reductions in physician payment rates since 2002, which the
Congress has routinely over-ridden for more than a decade. Including
this adjustment to baseline spending allows the Administration to
better represent the deficit outlook under current policy and serves as
a more appropriate benchmark for measuring policy changes.
Outside of the $400 billion in net health savings, the Budget also
proposes to extend funding for the Children's Health Insurance Program
(CHIP), ensuring continued, comprehensive, affordable coverage for
children enrolled in CHIP. This proposal is paid for through an
increase in tobacco taxes that will help reduce youth smoking and save
lives.
The Budget continues to propose commonsense, comprehensive
immigration reform that would strengthen border security, modernize the
legal immigration system, and provide a path to earned citizenship. The
Congressional Budget Office (CBO) estimates that the 2013 Senate-passed
immigration bill, S. 744, would have reduced deficits by almost $1
trillion over 20 years. The Budget includes an allowance for the budget
effects of immigration reform based on the CBO cost estimate.
Finally, the Budget includes $185 billion in net costs to replace
mandatory sequestration government-wide. The policy estimates for the
President's Budget for Medicare include the effects of the proposal to
replace mandatory sequestration, along with the effects of all of the
Budget's health savings proposals.
king v. burwell
Question. The Supreme Court will issue a decision in the King v.
Burwell case before the end of its term in late June of this year. A
ruling in favor of the plaintiff could have major budgetary
implications by, in effect, invalidating exchange subsidies, the
employer mandate, and much of the individual mandate in up to 37
states. A recent analysis by the Urban Institute concluded that the
total budgetary effect of a ruling in favor of the plaintiff could be
as much as $340 billion over the 10-year budget window.
Has the administration done its own estimate of the likely
budgetary impact of such a ruling?
Answer. It has not.
Question. Has the administration estimated how many HealthCare.gov
enrollees would lose subsidies?
Answer. Individuals with a 2015 plan selection through the
Marketplaces in the 34 Federally-facilitated Marketplace states who
qualify for an advance premium tax credit would lose subsidies.
Question. Similarly, has the administration estimated how many
individuals and employers would then be exempt from penalties under the
individual and employer mandates?
Answer. As noted in the Government's brief in King v. Burwell, if
tax credits were no longer available in States with federally-
facilitated Exchanges, millions of people currently relying on them to
pay for insurance would be exempt from the individual-coverage
provision because they would not be able to afford insurance.
Question. In light of the significant budgetary implications, has
the Administration been working on any contingency plans in the event
that the court rules in favor of the plaintiff?
Answer. We know of no administrative actions that would undo the
massive damage to our health care system that would be caused by an
adverse decision and, therefore, we have no plans that would undo the
massive damage.
medicare part d
Question. Medicare Part D is performing well beyond expectations
and its costs are coming in far below projections. Part of that success
is driven by the structure in the law that restricts HHS from
interjecting itself into pricing and plan structure. There are a number
of policies in the president's budget that would destabilize the
program, including negotiated drug pricing and expanding Medicaid-style
rebates. The Congressional Budget Office (CBO) has said that, if
Medicare Part D instituted drug rebates rebating similar to that in
Medicaid, a substantial amount of any of the assumed savings would be
lost within 15-20 years as the market adjusted over time.
Is that consistent with the agency's estimates?
Answer. The CMS Office of the Actuary provided the Department's
estimate of potential savings from the proposal, ``Align Medicare Dug
Payment Policies with Medicaid Policies for Low-Income Beneficiaries.''
The actuaries project that this proposal would reduce future Medicare
spending by $116.1 billion over 10 years (Fiscal Year 2016 through
Fiscal Year 2025). The actuaries have not provided estimates of any of
the President's Budget proposals beyond the 10-year budget window.
Question. Does the Secretary agree that, as CBO has repeatedly
cautioned, there is a risk that it these proposals will also reduce
innovation and depress investment by drug manufacturers in research and
development?
Answer. Analysis has found substantial differences in rebate
amounts and prices paid for brand name drugs under the two programs,
with Medicare receiving significantly smaller rebates, resulting in
Medicare paying higher prices than Medicaid. Prior to the establishment
of Medicare Part D, manufacturers paid Medicaid rebates for drugs
provided to dual eligible individuals, who were subsequently enrolled
in Part D for their prescription drug coverage.
Manufacturers have sufficient incentives--the desire to have their
products covered on a preferred tier--to offer price concessions to
Part D plan sponsors. Competition within a specific drug class from
other brand or generic options will also play an important role in
keeping down the cost of drug coverage.
exchange grants
Question. Under the ACA, each exchange is expected to be self-
sustaining beginning January 1, 2015. Please describe the ``Affordable
Exchange Grants'' for which $380 million has been requested in the
president's budget.
Please describe how these grants would differ from Early Innovator,
Planning, or either category of Development Grants, the last of which
were awarded in 2014.
Answer. The $380 million in the President's Budget for Affordable
Exchange Grants represents outlays of previously awarded grants and
does not support any new grant awards. The final round of grant funding
was awarded in December 2014, but states may continue to spend their
funding on establishment-related activities for one year following the
date of award. States may request No Cost Extensions to extend the
project period beyond one-year from the date of the initial award.
CMS used a phased approach to provide resources to states based on
their progress and the approach that worked for their state. This
included planning grants in 2010, which provided states up to $1
million to plan the early phases of establishing an Exchange in their
state that would work best for their citizens; early innovator grants
in 2011, which provided a small number of states resources to begin the
IT build of their exchange; and establishment grants in 2011-2014,
which provided states resources to establish a State-based Marketplace,
to build functions that a state elects to operate under a State
Partnership Marketplace, and to support state activities to build
interfaces with a Federally-facilitated Marketplace.
co-ops
Question. In light of the collapse of one CO-OP in Iowa, the
largest CO-OP in the country, and concerns about instability in other
markets, please describe the estimates that HHS makes regarding the
loan program as relates to the ability of those plans to repay and
detail steps being taken by HHS to promote repayment of the $2.5
billion in loans awarded through this program.
Answer. Implementation of the CO-OP program has been a
collaborative effort among CMS, state Departments of Insurance (DOIs),
and the new CO-OP plans. States are the primary regulator of health
insurance issuers and market rules and state DOIs oversee the financial
stability of issuers and protect consumers in those markets. In
addition to state regulation, CMS's role is to monitor CO-OPs for
compliance with their loan agreements and program policies.
CMS continues to conduct oversight of CO-OPs as they enter their
operational phase. CO-OP account managers have regular status meetings
during which CO-OPs report on progress in achieving milestones, as well
as about progress on operational experience. To ensure strong financial
management, CO-OPs are required to submit quarterly financial
statements, including cash flow data, receive site visits by CMS staff,
and undergo annual external audits, in order to promote sustainability
and capacity to repay loans. This monitoring is concurrent with ongoing
financial and operational monitoring by state insurance regulators.
Question. Please describe any interactions that HHS had with
CoOportunity in Iowa leading up to the determination by the State
Insurance Commissioner that they be liquidated.
Answer. In late December, the state of Iowa brought to our
attention their immediate concerns over the rapidly deteriorating
financial viability of the CoOportunity insurance company. CMS has
worked with the Iowa Department of Insurance and the CoOportunity to
assist with the smoothest possible transition for the current members
of CoOportunity.
Question. What involvement will HHS have, if any, in the process of
dissolving the entity?
Answer. On December 23, 2014, the Iowa Insurance Division concluded
that CoOportunity did not have sufficient funding to remain viable and
placed CoOportunity in rehabilitation. During this time, the Iowa
Insurance Division determined that rehabilitation was not possible and
announced on January 23, 2015, that it would seek a liquidation order
for CoOportunity Health for February 28, 2015. As a result, CMS
announced that CoOportunity would be decertified as a Qualified Health
Plan (QHP), effective February 28, 2015. Additionally, given
CoOportunity's insolvency, the CO-OP is in violation of the Loan
Agreement under Section 15.2(d). As such, CMS will exercise the right,
under Section 16.3, to terminate the Loan Agreement with the CO-OP.
______
Questions Submitted by Hon. Richard Burr
Question. Insurers signed an agreement with CMS as part of their
participation in the federally-facilitated exchanges that essentially
allows for the termination of such agreement in the event that tax
credits or cost-sharing reductions are no longer available.
How does this provision fit into HHS's overall contingency plans if
the Supreme Court strikes down the subsidies in the states that did not
establish an exchange?
Answer. It doesn't. As we have previously said, we know of no
administrative actions that could, and therefore we have no plans that
would, undo the massive damage to our health care system that would be
caused by an adverse decision.
Question. How is HHS ensuring that beneficiaries who could be
impacted by such an outcome are aware that they could lose their
exchange-coverage and subsidies? If no such outreach or communication
has occurred to date with these enrollees, why is that the case
considering the significant impact such an outcome could have for these
individuals?
Answer. We don't believe that such assurances are appropriate under
the circumstances. As we have previously stated, we are confident that
we will prevail because the text and structure of the Affordable Care
Act demonstrates that citizens in every state are entitled to tax
credits, regardless of whether they purchased their insurance on a
federal or state marketplace.
Question. HHS recently announced a pretty aggressive timeline for
tying traditional fee-for-service Medicare payments to selected
alternative payment models.
Were providers consulted on this proposal, specifically the
proposed timelines for implementation?
Answer. Yes, we sought the input of providers as we developed the
proposal. A number of providers were supportive of and attended the
announcement of alternative payment model goals in January, including
the American Academy of Family Physicians, the American Medical
Association, the American Hospital Association, Trinity Health,
Dartmouth-Hitchcock, Ascension Health, and Montefiore Health System.
In setting goals and timelines, HHS wanted to be ambitious while
also being realistic. Almost no Medicare fee-for-service payments were
paid through alternative payment models (APMs) in 2011. This percentage
increased to approximately 20 percent by the end of 2014 with a goal of
30 percent of payments in APMs by 2016 and 50 percent by 2018.
Question. How will your agency decide which alternative payment
models to utilize for Medicare payments? Please describe in detail.
Answer. CMS is testing alternative payment models that show promise
for increasing quality and reducing costs, and CMS will scale up and
continue to implement those that have a proven track record for doing
so. Alternative payment models currently being implemented include the
Medicare Shared Savings Program, which is operating within the standard
Medicare fee-for-service payment system and was created by Section 3022
of the Patient Protection and Affordable Care Act. Various accountable
care organization (ACO) models are also being tested at the CMS
Innovation Center. These include the Pioneer ACO Model, which increases
the level of financial risk and reward for provider organizations.
Three other types of models being tested include bundled payments,
advanced primary care medical homes, and models that support states
with implementing comprehensive delivery system reforms. Each of these
ideas had previously been tested in the public or private sector on a
smaller scale. The CMS Innovation Center is currently testing these
ideas on a larger scale with rigorous evaluation criteria.
Question. Earlier this month, Chairman Alexander and I released a
report analyzing the current state of medical product discovery and
development. Our report, ``Innovation for Healthier Americans'' asks a
simple, but critical, question of how we could do it better when it
comes to ensuring that America's patients have access to medical
products in as timely a manner as possible. The size and scope of FDA
as an organization has never been more complex. As the President's
budget notes, the FDA workforce has doubled since 2008.
What opportunities do you see from a management perspective to help
FDA function even better on behalf of patients that don't involve
further growing the Agency in terms of its size and resources?
Answer. Patients are at the core of FDA's mission and the focus of
the agency's vision. Patients who live with a disease have a direct
stake in the outcome of the review process and are in a unique position
to contribute input that can inform FDA's benefit-risk considerations
that can occur throughout the medical product development process. That
is why FDA relies on patient input to evaluate and approve products.
For example, patient representatives serve on FDA advisory
committees. Additionally, FDA has already held 11 Patient Focused Drug
Development meetings to learn more about the patient experience, as
required by the Food and Drug Administration Safety and Innovation Act
of 2012 (FDASIA). Another five are planned in 2015 and more will take
place in 2016 and 2017.
FDA's research on patient tolerance for risk helped inform the
recent clearance of an implantable obesity device. FDA is currently
developing other tools to better measure patient preferences and
tolerance for risk including a benefit-risk assessment for new drugs
and biologics.
FDA is constantly involved in management changes and innovations
within the agency to better serve the American people. The agreements
made pursuant to the various user fee agreements are part of the
roadmap for improving the agency. Other initiatives stem from major
legislation enacted in recent years such as FDASIA and initiatives
undertaken by the Commissioner. In addition, we have reviewed the
report authored by you and Chairman Alexander and look forward to
working with you as the Senate shapes legislation to increase access to
innovative medical products. Our goal throughout is to emerge with an
FDA that is as efficient as possible and to increase access to safe and
effective medical products that benefit the American people.
Question. How can we better utilize the significant resources FDA
already receives?
Answer. We believe that FDA does exercise prudent use of resources.
This is partially evident by the trust that industry places in the
agency year after year in the expenditure of industry user fees. One
area where there is potential to better utilize existing resources is
with respect to retention of medical and scientific experts. The
medical product industry is concerned that many of their new
therapeutic technologies will require FDA to have additional
sophisticated technical and scientific expertise if FDA is to be able
to efficiently and expeditiously review those new therapies for
approval and conduct post-market surveillance activities. However, in
many cases, these experts are able to command higher salaries in the
private sector than FDA can provide. I would welcome a discussion with
you on the use of funds by the FDA and to hear your suggestions on how
things could be improved.
Question. The President's budget acknowledges the significant
growth in appeals coming before the Office of Medicare Hearings and
Appeals. I consistently hear concerns from my constituents back home
about the need to make sure the audit and appeals processes are as fair
and predictable as possible. What reforms do you believe would be most
impactful to increase the predictability and timeliness of the audit
and appeals processes?
Answer. The Department has a three-pronged approach to addressing
the increasing number of Medicare appeals and the current backlog.
First, invest new resources at all levels of appeal to increase
adjudication capacity and implement new strategies to alleviate the
current backlog. Second, take administrative actions to reduce the
backlog and to appropriately resolve claims at earlier levels of the
appeals process. Third, pursue legislative proposals described in the
President's FY 2016 Budget that provide additional funding and new
authorities to address this urgent need.
Legislative proposals along with additional resources requested in
the President's FY 2016 Budget set a framework for bringing the
Medicare appeals process into balance going forward. For example, the
legislative proposal to establish a refundable filing fee at each level
of appeal will encourage providers to be more judicious in determining
what they appeal. Providing authority to consolidate appeals requests,
the authority to group similar claims together to allow for a single
decision on multiple claims, will improve the efficiency and timeliness
of the Medicare appeals process. Increasing the minimum amount in
controversy required for adjudication by an administrative law judge to
the Federal District Court amount in controversy requirement will
reduce the volume of claims that could be appealed for ALJ review.
The Budget requests $270 million, an increase of $183 million above
the FY 2015 level, to address the backlog of over 800,000 pending
appeals at OMHA. The Budget includes $140 million in budget authority
and $130 million in program level funding from proposed legislation to
support new field offices and additional Administrative Law Judges
teams. It will also support appeals adjudication by less costly methods
such as settlement facilitation and the proposed Medicare Magistrate
program. The 2016 Budget invests $36.2 million to allow CMS to engage
in discussions with providers to resolve disputes earlier in the
appeals process and greater CMS participation in Administrative Law
Judge hearings at OMHA. This investment will improve the efficiency of
the Medicare appeals process at the third and fourth levels and reduce
the number of claims appealed beyond the CMS levels, enabling the OMHA
to more quickly adjudicate its current backlog. The Budget also
requests $12.5 million, an increase of $2.5 million above FY 2015
level, to hire additional staff to address Medicare appeals at Level IV
(the Medicare Appeals Council).
______
Questions Submitted by Hon. John Thune
emtala
Question. In South Dakota, several hospitals in rural areas that
border Indian reservations see a high volume of emergency cases with
patients who primarily receive care at Indian Health Service facilities
entering their emergency departments. EMTALA requires that providers
provide care for patients who present at an emergency facility. Claims
by private providers for this emergency care are often denied.
Providers appeal but the appeals languish at the highest level of
appeal with no response. This results in no reimbursement for care they
were required by federal law to provide.
If providers claims are denied at the local level, how are these
appeals evaluated at the headquarters level?
Answer. Indian Health Service adheres to the appeal process set
forth in 42 CFR 136.25, which establishes a three-stage, time-limited
appeals process for patients and providers. The IHS Director considers
appeals only after denial decisions have been made by the facility
Chief Executive Officer (CEO) and the IHS Area Director. To be
considered timely, the PRC appeals must be submitted in writing to the
appropriate reviewer within 30 days after receipt of the notice of
denial.
All appeals submitted to the IHS Director are reviewed to ensure
the local and Area appeals requirements have been met. Cases are
reviewed on an individual basis to ensure sufficient information is
provided to make an appeal decision. Appeals are reviewed for patient
eligibility, access to alternate resources, medical priority,
availability of IHS facilities and PRC program notification
requirements. If an appeal is denied for a medical priority, all
related medical records must be obtained for a Headquarters medical
review. After documentation and medical reviews are provided, all
information is considered and a decision rendered regarding the appeal.
All decisions are reviewed by program staff and senior leadership
before the IHS Director issues the decision.
Question. In what timeframe should providers expect that claims
will be reviewed?
Answer. Timeframes for review can vary depending on the case, the
reason for denial and the information submitted for review. A recent
factor that affects the review time is the number of denials that are
appealed. Some health care providers are appealing every denial
decision received by the facility which has resulted in the number of
appeals increasing fivefold over the last 18 months. In 2014, almost
500 denials were appealed to the IHS Headquarters.
IHS recognizes the burden that delayed responses create for
patients and providers and is improving business practices to
effectively address the current workload while maintaining adequate
consideration for each patient and case. IHS is drafting new procedures
and workplans to address the increase in appeals. Area staff have been
brought to Headquarters to assist with the research and review that is
required for appeals adjudication and to provide feedback on successful
Area processes that Headquarters may replicate. Dual timelines are
being implemented to address current appeals as well as the backlog of
appeals. With increased efforts focused on PRC appeal adjudication,
patients and providers can expect more timely responses from IHS
Headquarters.
va/ihs
Question. As you know, for care that cannot be provided at an IHS
service unit, patients are referred out through the IHS PRC program.
Patients may be referred to a private provider or in some cases to a
Veterans Affairs (VA) facility. In accordance with the law, eligible
Indian veterans who are referred to the VA are required to be charged a
copayment for services at the VA. Under a separate federal statute,
providers are not permitted to impose financial liability on a patient
pursuant to an authorized PRC referral. We understand that conflicting
federal statues have resulted in eligible Indian veterans being held
responsible for the VA copayments. My office has been working with both
the VA and IHS for the last two years to better understand and address
this issue.
Is this an issue that can be resolved administratively?
Answer. Federal law prohibits providers from charging IHS patients
for authorized PRC referrals. As noted above, American Indian and
Alaska Native (AI/AN) Veterans have overlapping eligibility for
services provided at IHS and VA facilities. When an AI/AN Veteran is
seen under the authority of the IHS, there is no copayment. The AI/AN
Veteran is never charged for any level of care received directly at an
IHS facility.
Question. If not, what particular legislative changes are necessary
to allow for PRC dollars or other IHS funds to be used to cover the
cost of a required VA copayment?
Answer. Currently, IHS has no recommendations for legislative
change.
Question. Are there technical barriers to implementing a process
for PRC to cover eligible Indian veterans' copayments at the VA?
Answer. The issue is due to statutory authority and not related to
technical barriers for IHS/PRC program.
internal policies at ihs
Question. My staff regularly works with the office of congressional
affairs and previously, officials from the Great Plains office, on both
constituent and legislative issues. Unfortunately, we often find that
it is difficult to receive timely responses to inquiries and
communicate with local IHS staff. My staff was recently prohibited from
visiting an IHS facility without clearance--which took weeks to
obtain--from headquarters. We also understand that service unit CEO's
have been instructed not to provide even basic information to my office
without prior clearance. Often, my staff is working on time sensitive
issues that could be resolved quickly if information sharing at the
local level was permitted.
Can you provide me with information regarding internal policies
specific to communication with individual service units and the area
office and Congressional offices, including the rationale for these
policies?
Answer. I am sorry that your staff has had difficulty.
Congressional requests for site visits, field hearings, etc., should be
made through IHS headquarters legislative staff who customarily work
with health staff on scheduling appropriate dates and times for staff
and member visits and to ensure appropriate area office and/or service
unit leadership are available. Additionally, we are particularly
sensitive to the need to protect patient confidentiality during site
visits to hospitals or health facilities, so visits are arranged in a
manner that takes such concerns into consideration. If there is ever
any question regarding this process, please contact IHS Headquarters
legislative staff directly and they will ensure all requests are
coordinated with appropriate personnel in the Areas and Service Units.
If they are unable to assist, please contact the Office of the
Assistant Secretary of Legislation at HHS.
Question. This fall, my staff organized a purchased and referred
care roundtable with various stakeholders, including the IHS. My staff
requested, and was promised, prior access to the information that would
be presented by the IHS. After numerous requests, the information was
provided after close of business the night before the event, leaving my
staff without time to evaluate the information. These are just a few
examples of what has become a pattern of untimely responses to requests
from the IHS headquarters office. Another example is the response to a
letter I sent that arrived eleven months after I sent my letter. This
is unacceptable.
While I certainly recognize that the headquarters office is
responding to a multitude of requests, I am interested in hearing how
you are working to improve response times and what goals the IHS has
for average response times?
Can you provide me with information on the clearance process and
who is required to sign off on information provided to my office?
Answer. I understand your concern. I want to assure you that I am
personally committed to responding quickly and thoughtfully to letters
from Members of Congress. Since I was confirmed, I have made it a top
priority for the Department to respond as promptly and thoroughly as we
possibly can to every letter--and I have communicated this to
leadership throughout the Department.
IHS is working to improve response times by setting deadlines that
allow time for review and signature, incorporate compliance with
correspondence deadlines into performance plans, and focus additional
staff resources to address backlogs in correspondence. The IHS goal is
to respond to correspondence within a 30-day timeframe, unless issues
involve other agencies' input requiring multiple levels of review
outside of the agency's control. As Secretary, I am insisting that all
parts of HHS improve their response time to congressional
correspondence.
medicare solvency
Question. It is no secret that Medicare Hospital Insurance Trust
Fund will become insolvent by 2030. What is being done to help address
looming insolvency of Medicare?
Answer. In 2009, the Trustees projected the Hospital Insurance
Trust Fund would become insolvent in 2017. As of the 2014 Trustees
Report, the Trustees project the Hospital Insurance Trust Fund will be
solvent until 2030, 13 years later than the 2009 projection--an
improvement that is thanks in part to cost controls implemented in the
Affordable Care Act. These include reforms that are reducing excessive
payments to private insurers and health care providers in Medicare,
creating strong incentives for hospitals to reduce readmission rates,
and starting to change health care payment structures from volume to
value.
rural health regulatory burdens
Question. During your confirmation hearing, I asked you about what
you would do to help address unnecessary regulatory burdens on rural
health providers. You said, ``I look forward to working with you and
your colleagues to ensure that the burdens faced by rural providers are
limited. By eliminating stumbling blocks and red tape we can assure
that the health care that reaches patients is more timely, that it's
the right treatment for the right patient, and greater efficiency
improves patient care across the board.''
Since you were confirmed, what have you done to follow through on
this promise?
Answer. As we discussed at my confirmation hearing and in
subsequent conversations we are committed to working with all
providers, but especially rural providers to make sure they are able to
provide their patients with the care they need when they need it. Since
I arrived at HHS, we have expanded the use of telemedicine in Medicare
and announced the creation of a new initiative to support care
coordination nationwide, while continuing to listen to rural
stakeholders.
One area that I would highlight is the area of telemedicine, which
is of particular importance to rural providers and their patients. As
you know, the Medicare program provides telehealth services for
Medicare beneficiaries for a limited number of Part B (outpatient)
services furnished through a telecommunications system by a physician
or practitioner to an eligible telehealth individual, where the
physician or practitioner providing the service is not at the same
location as the beneficiary. CMS considers requests to add new services
annually through the physician fee schedule rulemaking process, and has
established criteria for adding telehealth services. Services can be
added if they are similar to existing telehealth services, or can
demonstrate clinical benefits to a patient if delivered by a
telecommunications system in place of a face-to-face visit. For
example, CMS finalized adding psychoanalysis, family psychotherapy,
annual wellness visits, and prolonged evaluation and management
services as telehealth services in 2015.
The Medicare Shared Savings Program statute encourages accountable
care organizations (ACOs) to coordinate care through the use of
telehealth, remote patient monitoring, and other such enabling
technologies. ACOs participating in the Shared Savings Program and the
Pioneer ACO Model are encouraged to use these technologies. CMS also
announced the creation of the ACO Investment Model, which is an
initiative designed for organizations participating as ACOs in the
Medicare Shared Savings Program (Shared Savings Program). The ACO
Investment Model is a new model of pre-paid shared savings that builds
on the experience with the Advance Payment Model to encourage new ACOs
to form in rural and underserved areas and current Medicare Shared
Savings Program ACOs to transition to arrangements with greater
financial risk.
Another area pertains to outpatient therapeutic services in
critical access hospitals. We are aware of the concerns expressed by
some critical access hospitals regarding our direct supervision
requirement for most outpatient therapeutic services, meaning that a
physician or qualified non-physician practitioner must be immediately
available during the service. Working with the Federal Office of Rural
Health Policy, located within the Health Resources and Services
Administration, we established the Hospital Outpatient Payment Panel to
consider requests to establish alternative supervision requirements for
specific outpatient therapeutic services. The Panel has been evaluating
requests for changes in supervision levels for various outpatient
therapeutic services.
______
Questions Submitted by Hon. Robert P. Casey, Jr.
Question. The budget includes savings of $69 million over the next
decade, attributed to promoting ``family-based foster care for children
with behavioral and mental health needs.'' Can you elaborate on this
proposal? How will the Administration encourage family-based care for
these children, many of whom have traditionally been sent to congregate
care?
Answer. Children are best served when raised in safe, loving
families; congregate care may be appropriate as a temporary placement
for children to address complex physical, mental and behavioral health
needs. This proposal is estimated to cost $78 million in FY 2016 and
reduce costs of title IV-E foster care by $69 million over ten years.
The Administration's cost estimate assumes that the proposal will
increase the availability of family-based care and, as a result of
establishing and enhancing those services, states will move children
from congregate placements to family settings to better meet the needs
of children while reducing the costs for IV-E.
Through this proposal, title IV-E agencies will be reimbursed with
50 percent federal financial participation (FFP) for administrative
activities associated with this oversight and eligibility documentation
components of the proposal. This rate is the same as current law, but
we estimate that IV-E agencies will have higher claims for eligibility
determination activities to implement and comply with the new
requirements for documenting the justification for congregate care
settings and acquiring judicial determinations every six months. We
assume that the additional claims related to this new procedure will
decline as the congregate care placements decline following the
implementation of the supports for family-based care.
The Children's Bureau, within the Administration for Children and
Families, has produced a data brief that examine how, when, and for
whom congregate care is being used in the child welfare system (http://
www.acf.hhs.gov/programs/cb/resource/congregate-care-brief). The brief
highlights that seventy percent of children and youth in congregate
care are age 13 and older. Most of the youth in congregate care had a
DSM diagnosis, physical disability or entered care due to a child
behavior problem. Some of these children and youth were initially
placed into congregate care for treatment; others were subsequently
placed in congregate care because they were not able to remain in a
traditional foster family care placement.
The proposal seeks to reduce use of congregate care while improving
outcomes for children in two ways. First, the proposal promotes family-
based care for children who have been traditionally been placed in
congregate care due to youth's complex needs through increased
investments in alternative interventions, specialized caseworker and
foster parent training, foster parent reimbursement for those providing
specialized care to high-need children, and day treatment programs.
In addition, the proposal promotes family-based care, through
increased oversight, for those children in congregate care, including
those who have no apparent clinical indicators. In 2013, there were
15,000 children (29 percent) who were placed in a congregate care
setting but had no identifiable clinical indicators.
Second, the proposal creates a new eligibility requirement under
title IV-E requiring documentation to justify congregate care as the
correct foster care placement setting, based on the child's mental,
behavioral or physical health needs and the congregate care provider's
ability to address those needs. The oversight requirements will both
require more careful scrutiny of the appropriateness of these
placements and give states a financial incentive to ensure that
residential care placements are used appropriately and only for as long
as the specific interventions provided in the placement are necessary.
This proposal would require states to review the case plans for all
children currently in congregate care, and new children entering
congregate care setting. The goal is that children are only placed in
congregate care when it is medically appropriate, and determined to be
the least restrictive foster care placement setting. In order to
support family based care for children with complex needs, the
President's budget proposal increases reimbursement for specialized
caseworker training and case management, increases reimbursement for
foster parent parents who provide therapeutic care and provides
additional reimbursement for day treatment.
Question. As you know, I was disappointed that you once again
included deep cuts to the Children's Hospital Graduate Medical
Education (CHGME) program in your FY 2016 budget. CHGME has been a
major success and has enjoyed broad bipartisan support. Indeed, just
last year it was reauthorized at $300 million a year for five years,
which the President signed. Now he proposes funding it at just a third
of that. This cut in funding puts at risk the gains that have been made
for children's health under CHGME. The small class of hospitals that
receive CHGME, less than one percent of all hospitals, train nearly
half (49%) of all pediatricians, including 45 percent of general
pediatricians and 51 percent of pediatric specialists. I know you
excuse these cuts by pointing to new investments in primary and
preventive care that Children's Hospitals can access, but that's not
what these hospitals need most. As you know, there are serious national
shortages in many pediatric specialties, shortages which the CHGME
program has been crucial in helping to address. In some specialties,
like pediatric rehabilitation, the CHMGE hospitals train virtually 100%
of those providers. Have you considered the likely impact on specialty
care from this reduced funding? Please explain how with this level of
funding we can adequately ensure resources are available to train the
specialty pediatric workforce of tomorrow? Very simply: who will treat
our kids if we do not invest in CHGME?
Answer. I share your view that it is important to support funding
for medical residency training programs for pediatric and pediatric
subspecialty residents. I remain committed to working with Congress to
make sure our training hospitals have the resources they need to
develop a strong pediatric workforce.
The goal of our Budget proposals is to improve access to health
care services for all Americans, including our nation's children. Our
graduate medical education proposals target the investments where they
are needed most--in primary care (including pediatrics) and certain
specialties--and for practice in rural and other underserved areas.
As you noted, the President's FY 2016 Budget Request includes $100
million for the CHGME program. This request for the CHGME program
supports direct medical education expenses for graduate medical
education at children's hospitals. The Budget will support
approximately the same number of pediatric resident slots as in
previous years by funding the direct costs associated with training
residents. Direct medical education spending includes stipends and
salaries for residents and supervising faculty, costs associated with
providing the GME training program, and overhead costs.
Another way the President's FY 2016 Budget seeks to maximize
federal resources is by encouraging innovation in graduate medical
education training models and greater accountability in the use of
graduate medical education funding. The President's FY 2016 Budget
proposes the Targeted Support for Graduate Medical Education (TSGME)
program. The TSGME proposal requests $400 million in FY 2016 and $5.25
billion over a 10-year period through a mandatory funding mechanism
which would provide increased stability for the program while
supporting approximately 13,000 residents.
As you are aware, children's hospitals would be eligible to receive
CHGME funds and compete for the TSGME funds. The TSGME proposal would
also re-orient training to community-based, ambulatory care settings.
Many institutions, including children's hospitals, are already
providing care using this type of delivery. As eligible entities for
both the CHGME and TSGME programs, children's hospitals will have the
opportunity to compete for even more funding than the FY 2015-enacted
level of $265 million or FY 2016-authorized level of $300 million.
Question. I applaud the Administration's commitment to move away
from a purely fee-for-service approach of providing and paying for care
and toward a health system that pays for value and quality. I have
advocated for and strongly believe that providers and health plans
should be paid for the quality of care they deliver, not merely for the
number of services they can bill and for whom coverage is provided.
However, I understand, as do you, that providers and plans that
have a higher percentage of low-socio-demographic status patients face
unique challenges to achieve the same health outcomes that occur in
more affluent areas. Healthy food, transportation to a doctor's visit,
and a warm, safe home are critical to a patient's health, yet many
Americans cannot afford these basics. While I fully support delivery
system reform, we must also foster policies that improve vulnerable
American's health by taking on these challenges as a part of expanding
accountability in medical care.
Medicare's current and new payment models that measure quality
should account for the impacts on health care associated with a
patient's economic circumstances. Unless our valued-based system
recognizes these factors, hospitals and health plans caring for the
most vulnerable patients may be unfairly penalized, and your historic
effort to reward value may well fall short. Can you help me understand
why this aspect was not included in your plan and how I can help you
and your staff to make certain of its inclusion?
Answer. To address the issue of risk adjustment for socioeconomic
status specifically, the Office of the Assistant Secretary for Planning
and Evaluation (ASPE) is conducting research on this issue as directed
by the IMPACT Act, and will issue a report to Congress by October 2016.
This report will examine relationships between socioeconomic status and
performance under CMS quality programs across a number of settings,
including hospital, plan, provider, and post-acute programs, and
provide insight into potential policy alternatives that might address
socioeconomic status within these programs. CMS will closely examine
the research conducted by ASPE.
In addition to work in quality measurement, CMS has made
significant investments in the provision of technical assistance for
delivery system reform efforts for providers that serve rural and
vulnerable populations through our Quality Improvement Organization
(QIO) program and the recently announced Transforming Clinical Practice
Initiative that will assist providers in rural and underserved areas.
HHS is committed to working with you and other stakeholders to
reform the delivery system while addressing any negative unintended
consequences, particularly for those facilities serving dual-eligible
and low-income beneficiaries. I look forward to future discussions with
you and other stakeholders on ways to further improve the quality of
care provided to beneficiaries.
Question. I want to raise the issue of the ``Two Midnights'' Rule,
which is a CMS policy that was intended to try to simplify inpatient
admissions by clarifying which hospital stays are reimbursable under
Medicare Part A, because I am concerned that this policy has not
resulted in its originally intended outcomes. This Rule utilizes time
as the primary factor in qualifying a patient for a hospital stay what
is reimbursable under Medicare Part A, rather than patient acuity
levels and physician judgment. I know CMS has been working with
stakeholders to develop a consensus on inpatient policy options. Where
does that process stand? And given the current 18-month delay CMS has
implemented in enforcement of this policy, can you provide me with
details of what the impact of this delay is having on health outcomes
and costs to the system?
Answer. After finalizing the two-midnight rule effective beginning
FY 2014, CMS sought comments in the FY 2015 Inpatient Prospective
Payment System (IPPS) proposed rule on an alternative payment
methodology under the Medicare Program for short hospital stays. Topics
for comment included the definition of short or low cost inpatient
hospital stays and the determination of appropriate payment for short
inpatient hospital stays. We received a number of comments indicating
that any short-stay policy should adhere to certain general principles
and that additional research and collaboration were needed before a
formal short-stay policy proposal were to be made by CMS. CMS noted in
the FY 2015 IPPS final rule that there was no consensus among
commenters. Although there was no consensus, CMS stated it would take
the comments into account in any potential future rulemaking to address
the complex question of payment policy for short inpatient hospital
stays.
CMS has undertaken extensive efforts to engage with stakeholders
directly on efforts to comply with the 2-midnight rule, including
numerous ``Open Door Forums'' and national provider calls.
In addition, CMS instructed Medicare Administrative Contractors
(MACs) to conduct ``probe and educate'' reviews for inpatient claims
with dates of admission between October 1, 2013 and March 31, 2014, to
assess provider understanding and compliance with the new policy. The
Protecting Access to Medicare Act of 2014 (Pub. L. 113-93) permitted
CMS to continue medical review activities under the MAC probe and
educate process through March 31, 2015 and precluded recovery auditors
from conducting post-payment patient status reviews for inpatient
claims through March 31, 2015. All MACs have completed the first round
of probe reviews and provider education. Throughout the probe and
educate process to date, CMS has seen positive effects and improved
provider understanding of the 2-midnight rule. We believe that this
process has been well-received and beneficial to the provider
community.
______
Questions Submitted by Hon. Rob Portman
medicare part d
Question. Last time CMS's Administrator, Marilyn Tavenner, was
before this Committee she told us that actual costs for Part D are
approximately 40% less than the original estimates for the program. In
addition, CBO has reduced its 10 year cost projections for Part D by
over $100 billion in each of the last three years.
I believe these statements and data clearly illustrate that Part D
has been a success. Yet, the President's budget targets Part D, the
cost of which is ultimately borne by seniors and taxpayers. As we
consider solutions to reduce the nation's debt, I encourage the
Administration and my colleagues to learn from, not undermine, Part D.
Your budget proposes to give the HHS secretary--for the first
time--the authority to negotiate drug prices for biologics and high-
cost drugs in Medicare Part D. While I understand the growing concerns
with the rapidly escalating prices of specialty and brand name drugs, I
am concerned that going against the original structure of the Part D
program and enabling the government to interfere in the current market
structure could be detrimental to the proven success of the Part D
program. Is there any concern that interfering with the existing
program will undermine the market-based structure?
Answer. The pharmaceutical industry is shifting its focus from the
blockbuster drugs of the 1990s to specialty pharmaceuticals. While
these new treatments may represent important medical breakthroughs,
their extremely high-costs raise concerns as to whether beneficiaries
have access to the drugs they need. The Federal government needs to be
mindful of the balance between incentivizing new pharmaceutical
research with protecting the long-term sustainability of this important
benefit for generations to come.
Robust competition leads to reasonable prices for many drugs in the
Part D program, and that competition will remain strong under this
proposal. Other major purchasers, such as health plans, employers, and
pharmaceutical benefit mangers negotiate with manufacturers to get
better deals for their enrollees and employees. For example, Express
Scripts and CVS recently negotiated lower prices for Hepatitis C drugs.
Similarly, this proposal would provide the Secretary with additional
tools to leverage Medicare's buying power to obtain lower prices for
high-cost and specialty medications.
The Administration looks forward to working with Congress to
address growing pharmaceutical costs and this proposal is one of many
potential solutions to help alleviate address the growing cost of
specialty and brand name drugs.
Question. The budget also proposes to introduce Medicaid-level drug
rebates to certain beneficiaries. Has HHS modeled the effect on
Medicare Part D of providing Medicaid-level drug rebates to certain
beneficiaries for brand name and generic drugs? Is there any concern
that interfering with the existing program will undermine the market-
based structure?
Answer. Analysis has found substantial differences in rebate
amounts and prices paid for brand name drugs under the two programs,
with Medicare receiving significantly smaller rebates, resulting in
Medicare paying higher prices than Medicaid. Prior to the establishment
of Medicare Part D, manufacturers paid Medicaid rebates for drugs
provided to dual eligible individuals, who were subsequently enrolled
in Part D for their prescription drug coverage. The rebate proposal
restores the rebates that would have been made on their behalf and
extends it to other low-income Medicare beneficiaries.
Manufacturers have sufficient incentives--the desire to have their
products covered on a preferred tier--to continue to offer price
concessions to Part D plan sponsors. Competition within a specific drug
class from other brand or generic options will also play an important
role in keeping down the cost of drug coverage.
Question. In early 2014, CMS released a proposed Medicare Part D
rule that would have significantly undermined the success of the Part D
program, a program that is relied upon by nearly 40 million seniors and
individuals with disabilities. After strong opposition from a variety
of health care stakeholders and from the bipartisan membership of this
Committee (SFC), Administrator Tavenner sent a letter to Members of
Congress stating that CMS would not move forward with finalizing the
most controversial proposals, and the Agency has continued to assure
Congress that it does not intend to revisit these misguided policies.
Can I have your word that the Agency still does not intend to revisit
these or similar Part D proposals in future rulemaking?
Answer. CMS does not plan to revisit these provisions.
competition in fehbp
Question. The President's Budget includes a proposal that saves a
minimal amount while increasing premium for most federal workers across
the United States. Ohio is particularly hard hit under the proposal. Is
the Administration open to alternatives that will ensure vibrant
competition in every state without having a negative impact on federal
workers?
Answer. For information about the FEHBP proposals included in the
President's Budget, I would refer you to Director Archuleta who would
be open to discussing proposals that increase competition and reduce
costs in the FEHB.
medicare advantage and star ratings
Question. Secretary Burwell, please describe the standard that CMS
holds MA plans to with respect to stars data integrity, and what are
the penalties associated with even small errors in data reporting?
Answer. CMS holds plans responsible for submitting accurate data,
whether the data are produced or reported directly by the plan or by a
vendor under contract to that plan. The plan may receive a one-star
rating for a measure if the plan's data are known to be problematic.
Examples include cases where CMS finds mishandling of data,
inappropriate processing, or implementation of incorrect practices by
the organization/sponsor have resulted in biased or erroneous data.
Question. Now, please describe the standard that CMS holds itself
to in terms of data collection to support star ratings, and the
consequences associated with significant errors in such data
collection?
Answer. We review on an annual basis the quality of data available
for all measures, the variation among organizations and sponsors, and
measures' accuracy and validity before making a final determination
about inclusion of measures in the Star Ratings. This review is
completed in mid-summer in preparation for the final Star Ratings,
published in early October. CMS cannot publish performance ratings of
plans that are based on data it cannot trust nor can we base Quality
Bonus Payments to MA organizations on biased or incorrect ratings.
Therefore CMS suppresses measures when we determine that the data
collected by CMS or its contractor(s) are inaccurate.
Question. Do you mean to tell me that in either instance, it is the
plan--and ultimately the beneficiary--that ultimately pays the price?
That seems inequitable to me.
Answer. Suppressing a measure does not penalize plans, but rather
it makes sure that we are fairly comparing all plans' performance and
rewarding them accordingly. This action serves to protect, not harm,
beneficiaries from using false or biased performance ratings for their
enrollment choices. To use untrustworthy data would bias the Star
Ratings and ultimately Quality Bonus Payments.
hhs proposal to tie payments to value
Question. In January of this year, for the first time ever, HHS
presented explicit goals to implement value-based payments in Medicare.
According to this announcement, HHS set a goal to have 85% of all
Medicare fee-for-service payments tied to quality or value by 2016, and
90% by 2018. While I applaud the Administration for setting goals to
move our healthcare delivery system toward a system based more on value
and quality, I am curious how these goals figure into other Medicare
payment issues. The budget also estimates that repealing the
sustainable growth rate (SGR) and providing a zero percent update will
cost $6 billion for 2015 and $131 billion between 2016 and 2025.
How does HHS's new proposal to implement value-based payments in
Medicare affect the cost of repealing the SGR over the next ten years?
Did you consider the cost of the SGR repeal in light of the new payment
structure?
Answer. The Budget includes about $400 billion of specified net
health savings that grow over time, extending the life of the Medicare
Trust Fund by approximately five years, and building on the Affordable
Care Act with further incentives to improve quality and control health
care cost growth. This includes a proposal to accelerate physician
participation in high-quality and efficient health care delivery
systems by repealing the Medicare Sustainable Growth Rate formula and
reforming Medicare physician payments in a manner consistent with the
reforms included in recent bipartisan, bicameral legislation.
These savings are estimated against the Budget's adjusted baseline,
which assumes that large reductions in Medicare physician payment rates
required by law under a formula, commonly referred to as the
``sustainable growth rate'' (SGR), do not take place. This formula has
called for reductions in physician payment rates since 2002, which the
Congress has routinely over-ridden for more than a decade. Including
this adjustment to baseline spending allows the Administration to
better represent the deficit outlook under current policy and serves as
a more appropriate benchmark for measuring policy changes.
The Budget's adjusted baseline does not include assumptions on cost
changes due to HHS's new delivery system reform goals. However, going
forward, HHS believes that SGR reform will strengthen our ability to
reach these goals by increasingly linking payments to providers to
quality and value and encouraging participation in alternative payment
models.
______
Questions Submitted by Hon. Robert Menendez
qualified health plan reimbursement to federally qualified health
centers
Question. Section 1302(g) of the Affordable Care Act is a provision
I authored to ensure Federally Qualified Health Centers (FQHCs) receive
an adequate reimbursement for services provided to enrollees of
qualified health plans through the Marketplace. This provision of law
specifically states that QHPs cannot reimburse health centers an amount
lower than the Medicaid PPS rate. Nowhere does this section of law
provide for ``mutually agreed upon'' rates that are lower than the
Medicaid PPS nor distinguish between in-network and out-of-network
coverage.
Unfortunately, the regulations implementing Section 1302(g) have
provided a number of exemptions that contradict the both the letter and
intent of the law. These exemptions, on which I have had numerous
conversations with HHS over the years, are resulting in serious a
reimbursement shortfall for FQHCs, forcing many to use limited grant
funding designed to cover uncompensated care to instead cover costs
associated with QHP-enrollees.
What specific actions are CMS and CCIIO going to take to amend the
current regulations, which misinterpret and misapply the statutory
requirements outlined in Sec 1302(g), and ensure that all FQHCs receive
a minimum reimbursement of the Medicaid PPS in the next plan year,
irrespective of whether or not the center is in-network or out-of-
network?
Answer. As you may be aware in the 2015 letter to issuers in the
Federally-Facilitated Marketplaces, CMS reiterated the importance of
issuers complying with federal regulations regarding payment of FQHCs.
For covered services provided by an FQHC, QHP issuers must pay an
amount that is not less than the amount of payment that would have been
paid to the center under relevant Medicaid law for such item or
service. The regulations do allow the QHP issuer and FQHC to mutually
agree upon alternative payment rates, as long as such mutually agreed
upon rates are at least equal to the generally applicable payment rates
of the issuer. CMS has encouraged issuers and FQHCs, as well as other
ECPs, to develop mutually beneficial business relationships that
promote effective care for medically underserved and vulnerable
populations.
implementation of the changes to the clinical laboratory fee schedule
included in the protecting access to medicare act of 2014
Question. In addition to staving off a 24 percent reduction in
Medicare physician reimbursements, the Protecting Access to Medicare
Act (PAMA; Pub. L. 113-93) included substantial changes to the Clinical
Laboratory Fee Schedule (CLFS). Among these changes are requirements
that CMS collect private-market testing rates for ``applicable
laboratories,'' which the statute defines as a laboratory that derives
a majority of revenue from either the CLFS, the physician fee schedule
(PFS) or the section 1834A created by PAMA. CMS is further directed to
use this data to reestablish laboratories' payment rates.
What level of formal stakeholder involvement, such as in-person
meetings and notice and comment periods, will CMS utilize when
developing the regulations for the reporting of private-market payment
data? What steps will be taken (e.g. utilizing a testing period without
penalties) to ensure laboratories are able to successfully comply with
the reporting requirement prior to the regulations taking effect?
Answer. In July 2014, at its annual public meeting on payment for
new laboratory tests, CMS added a special open session to receive
stakeholder input on implementing the PAMA provisions. CMS has also
listened to concerns from stakeholders during several in-person
meetings about the law. CMS is currently developing a notice of
proposed rulemaking to implement the PAMA provisions. As part of the
rulemaking process, public comments will be invited on CMS' proposed
implementation approaches, and all comments will be addressed in the
subsequent final rule. In addition, PAMA required the establishment by
July 1, 2015, of an Advisory Panel on Clinical Diagnostic Laboratory
Tests, to advise the Secretary and CMS on laboratory payment issues
including implementation of the new payment system and rates. On
October 27, 2014, CMS published a Federal Register Notice announcing
the establishment of the Panel and requesting nominations for
individuals to serve on the Panel.
Question. Will the final definition of ``applicable laboratory''
include all laboratories, including independent labs, hospital outreach
and outpatient labs, and labs located in a physician's office? If so,
what steps will CMS take to account for the various payment systems
found across these provider entities?
Answer. CMS is developing policy on each of these questions through
the notice of proposed rulemaking that is currently in development.
This proposed regulation will be subject to public comment before we
develop a final rule to implement PAMA's provisions.
Question. When calculating the weighted median payment rate and
implementing changes to payments based on that rate, how will CMS
account for variations in the clinical laboratory industry, such as
geographic differences, varying levels of Medicare participation or
labs that specialize in serving specific types of providers such as
skilled nursing facilities?
Answer. CMS will provide more information on these issues through
the notice of proposed rulemaking currently under development.
home health face-to-face requirement
Question. The Affordable Care Act includes a provision that
requires a physician or other authorized provider have a face-to-face
encounter with a beneficiary in order to certify eligibility for home
health services. This is a well-intentioned provision of the law aimed
at not only ensuring beneficiaries are accurately being referred to the
proper care setting, but also to help reduce the potential for waste,
fraud and abuse within the home health benefit. The implementation of
the face-to-face requirement, however, has been difficult on both home
health providers and ordering providers and has included several
iterations of the requirements necessary to satisfy this provision of
law, including at least one which was so onerous CMS rescinded it
entirely.
Recently, CMS released a draft of a ``template'' designed to be
used by physicians when documenting the face-to-face encounter. While
this template is still being developed, there are some ongoing issues
with the existing face-to-face requirements that needs to be addressed.
What steps is CMS taking to actively engage with stakeholders--home
health agencies, physicians and Medicare Administrative Contractors--
during the development of the recently announced face-to-face template
as well as to educate them prior to the full implementation of the
template?
Answer. CMS plans to conduct outreach and education with
physicians, Home Health Agencies, hospitals, post-acute facility
discharge planners, and non-physician practitioners via Open Door Forum
calls to discuss the draft clinical templates.
Question. Does CMS plan to provide any transition time, including
any moratoria on audits based on the face-to-face requirement, prior to
the template taking full effect?
Answer. CMS simplified the face-to-face encounter documentation
requirements by eliminating the specific face-to-face narrative
requirement, in order to reduce administrative burden, and provide home
health agencies with additional flexibility. CMS will use documentation
from the certifying physician's medical records, and/or the hospital or
post-acute facility's medical records, for beneficiaries as the basis
for certification of home health eligibility. This simplification was
finalized after public comment in the Calendar Year 2015 Home Health
Prospective Payment System final rule (79 FR 66031). The use of the
template is voluntary and CMS believes the use of clinical templates
may reduce burden on the physicians and practitioners who order home
health services.
Question. There is currently a three-year backlog of home health
claims resulting from the face-to-face requirement's lack of
finalization. How does CMS expect to clear out this backlog? Are there
any plans to provide settlement options to home health agencies and, if
so, what timeframe will CMS offer the settlements and how does it plan
to calculate the settlement amounts?
Answer. The majority of CMS contractors at the first and second
level of the appeals process are processing appeals timely and do not
have backlogs. Although there are backlogs at the third and fourth
levels, we cannot separately calculate the home health appeals backlog
or confirm that the face-to-face requirement is at issue in all of the
pending home health appeals without manual reviews of the case files.
The Department has a three-pronged approach to addressing the
increasing number of Medicare appeals and the current backlog of claims
to be adjudicated. First, invest new resources at all levels of appeal
to increase adjudication capacity and implement new strategies to
alleviate the current backlog. Second, take administrative actions to
reduce the number of pending appeals and more efficiently handle new
cases that are entering the appeals process. Third, pursue legislative
proposals described in the President's FY 2016 Budget that provide
additional funding and new authorities to address this urgent need.
hospital short stays and the two-midnight rule
Question. During the hearing, I raised my concerns about the so-
called two-
midnight rule and what steps CMS has taken to ensure that the
compliance with, and enforcement of, the rule is feasible when the
current statutory enforcement delay expires on March 31, 2015.
Can you provide specifics on the steps CMS has taken to engage with
stakeholders--physicians, hospitals, audit contractors, etc.--to
further develop a hospital inpatient short-stay policy?
Answer. After finalizing the two-midnight rule effective beginning
FY 2014, CMS sought comments in the FY 2015 Inpatient Prospective
Payment System (IPPS) proposed rule on an alternative payment
methodology under the Medicare Program for short hospital stays. Topics
for comment included the definition of short or low cost inpatient
hospital stays and the determination of appropriate payment for short
inpatient hospital stays. We received a number of comments indicating
that any short-stay policy should adhere to certain general principles
and that additional research and collaboration were needed before a
formal short-stay policy proposal were to be made by CMS. CMS noted in
the FY 2015 IPPS final rule that there was no consensus among
commenters. Although there was no consensus, CMS stated it would take
the comments into account in any potential future rulemaking to address
the complex question of payment policy for short inpatient hospital
stays.
CMS has undertaken extensive efforts to engage with stakeholders
directly on efforts to comply with the 2-midnight rule, including
numerous ``Open Door Forums'' and national provider calls.
In addition, CMS instructed Medicare Administrative Contractors
(MACs) to conduct ``probe and educate'' reviews for inpatient claims
with dates of admission between October 1, 2013 and March 31, 2014, to
assess provider understanding and compliance with the new policy. The
Protecting Access to Medicare Act of 2014 (Pub. L. 113-93) permitted
CMS to continue medical review activities under the MAC probe and
educate process through March 31, 2015 and precluded recovery auditors
from conducting post-payment patient status reviews for inpatient
claims through March 31, 2015. All MACs have completed the first round
of probe reviews and provider education. Throughout the probe and
educate process to date, CMS has seen positive effects and improved
provider understanding of the 2-midnight rule. We believe that this
process has been well-received and beneficial to the provider
community.
Recovery auditors may continue to conduct CMS-approved claim
reviews, unrelated to the appropriateness of the inpatient admission
(that is, patient status). In response to industry feedback, on
December 30, 2014, we announced a number of changes to the Recovery
Audit Program, including changing the recovery auditor ``look-back
period'' to 6 months from the date of service for patient status
reviews, in cases where the hospital submits the claim within 3 months
of the date of service, to address hospital's concerns that they do not
have the opportunity to rebill for medically necessary Part B inpatient
services by the time a medical review contractor has denied a Part A
inpatient claim. Additional changes intended to address stakeholder
concerns were announced, including: new additional documentation
request limits based on a provider's compliance with Medicare rules;
incremental application of limits for providers that are new to
recovery auditor reviews; requiring diversification of limits across
all claim types for each facility; requiring recovery auditors to
complete complex reviews within 30 days, and if recovery auditors fail
to complete the review in 30 days, not allowing them to receive a
contingency fee even if they find an error; and requiring recovery
auditors to wait 30 days, to allow for a discussion period request,
before sending a claim to the MAC for adjustment.
Question. What is the timeline CMS has for any new inpatient short-
stay policy to be fully developed and implemented?
Answer. CMS solicited comments in the FY2015 IPPS proposed rule on
an alternative payment methodology under the Medicare program for short
inpatient hospital stays. As noted in the FY 2015 IPPS final rule,
although stakeholders were not able to come to a consensus, CMS will
take the comments into account in any potential future rulemaking to
address the complex question of payment policy for short inpatient
hospital stays.
Question. Will CMS continue to administratively delay enforcement
of this rule after March 31, 2015, until such time that policy is in
place?
Answer. Because of Congressional action, Recovery Auditors are
currently prohibited from conducting post-payment inpatient hospital
patient status reviews for claims with dates of admission from October
1, 2013 through March 31, 2015.
Question. I am concerned with the ongoing enforcement delay's
impacts on the ability for Medicare to recover improper payments, but
clearly the status quo two-midnight rule is failing and leading to a
significant backlog of audit appeals. The administration offered to
settle pending claims with hospitals as a way to alleviate this appeal
backlog. The deadline for hospitals to accept this settlement was
October, 2014.
How many of the pending appeals have been settled, or are in the
process of being settled? What has been the subsequent impact of these
settlements on the ability of the Administrative Law Judges to process
the still-pending appeals?
Answer. The Department has a three-pronged approach to addressing
the increasing number of Medicare appeals and the current backlog of
claims to be adjudicated. First, invest new resources at all levels of
appeal to increase adjudication capacity and implement new strategies
to alleviate the current backlog. Second, take administrative actions
to reduce the number of pending appeals and more efficiently handle new
cases that are entering the appeals process. Third, pursue legislative
proposals described in the President's FY 2016 Budget that provide
additional funding and new authorities to address this urgent need.
The settlement provides an opportunity for the government to reduce
the pending appeals backlog by resolving a large number of homogeneous
claims in a short period of time. In addition, it allows hospitals to
obtain payment now for rendered services, rather than waiting an
extended period of time, with the additional risk of not prevailing in
the appeals process. HHS is still in the process of verifying and
completing the review of the claims submitted for settlement.
Question. Can you provide an estimate of the total costs associated
with the two-midnight rule, including negative impact on the recovery
of payments for issues unrelated to inpatient short-stays, costs
associated with the overwhelmed appeals process, and the lack of
potentially legitimate payment recovery resulting from CMS's settlement
offer?
Answer. In the FY 2014 IPPS/LTCH PPS final rule, our actuaries
estimated that our policy would increase IPPS expenditures by
approximately $220 million. These additional expenditures result from
an expected net increase in hospital inpatient encounters due to some
encounters spanning more than 2 midnights moving to the IPPS from the
OPPS, and some encounters of less than 2 midnights moving from the IPPS
to the OPPS. CMS actuaries estimated that, on average, the per
encounter payments for these hospital outpatient encounters would be
approximately 30 percent of the per encounter payments for the hospital
inpatient encounters.
In light of the widespread impact on the IPPS of this policy and
the systemic nature of the issue, in the FY 2014 IPPS/LTCH PPS final
rule, we stated our belief that it is appropriate to propose to use our
exceptions and adjustments authority under section 1886(d)(5)(I)(i) of
the Act to offset the estimated $220 million in additional IPPS
expenditures associated with this proposed policy and applied a -0.2
percent adjustment to the operating IPPS standardized amount, the
hospital-specific rates, and the Puerto Rico-specific standardized
amount.
To more quickly reduce the volume of inpatient status claims
currently pending in the appeals process, CMS offered an administrative
agreement to any hospital willing to withdraw their pending appeals in
exchange for timely partial payment (68 percent of the net allowable
amount). HHS is still in the process of verifying and completing the
review of the claims submitted for settlement.
medicaid enrollment backlog
Question. As we discussed during the hearing, New Jersey continues
to face a serious problem processing Medicaid applications in a timely
manner. While it is my understanding that, as you stated, significant
progress has been made processing Medicaid applications submitted
through the Marketplace website, there is still a problem with
applications submitted directly to the state or through the County
Welfare Agencies. This delay is preventing a substantial number of
Medicaid-eligible New Jerseyans from accessing the care they need and
deserve.
What specific steps has CMS taken to help alleviate this enrollment
backlog, including working with the state and counties to update and
overhaul their eligibility and enrollment process?
Answer. CMS and the state have worked together in order to mitigate
systems challenges. When the state knew they were unable to accept and
process account transfers in late 2013, they worked with CMS to
leverage authority to enroll individuals through a weekly file sent by
CMS to the state, ensuring that individuals applying through the FFM
would be enrolled in coverage in an expeditious manner. The file
contains a subset of the application information, and the state
developed a process to be able to pull the information into its system
to complete the enrollment for the appropriate individuals.
New Jersey also has experienced challenges with processing the
volume of applications that it receives directly from applicants. To
help alleviate this backlog the state used the additional resources of
its Health Benefits Coordinator to assist with the processing of
applications. To help support this effort, it incorporated an open
source tool developed with HHS support so eligibility determinations
could be automated. The State is working hand in hand with the counties
to identify backlogged applications and to shift the processing of
those applications to the Health Benefits Coordinator. The Health
Benefits Coordinator is also processing all online applications and
many of the redeterminations. The Health Benefits Coordinator has hired
100 additional people to process applications.
The state also requested and received a waiver to enroll
individuals in Medicaid based on a preliminary finding of eligibility
and then to complete the determination within 120 days of initial
enrollment. Lastly, CMS granted the state a waiver to delay the
processing of redeterminations in 2014 so that it could focus on the
processing of new applications.
Question. Since it is taking a substantially than the maximum
allowed 45 days for New Jersey to process applications, what is CMS
doing to ensure that individuals who have applications pending beyond
that 45-day deadline are informed of their application's status?
Answer. CMS is working closely with the state to improve their
application processing timelines and have granted the state
flexibilities through the use of waivers to ensure timely processing of
applications.
Question. Does CMS ensure that these individuals receive, at a
minimum, provisional benefits until their application is processed and
they are fully enrolled?
Answer. Yes, CMS granted the state a waiver to allow them to enroll
individuals in Medicaid based on a preliminary finding of eligibility
and then to complete the eligibility determination within 120 days of
initial enrollment. This allows that individuals who are found eligible
based on a preliminary determination can access care while they await a
final eligibility determination.
Question. In order for an individual to be eligible to receive an
advanced premium tax credit (APTC) for coverage through the Marketplace
they must not be eligible for Medicaid coverage. Because of the
application backlog there are many individuals are unable to access an
APTC because they haven't been formally denied access to Medicaid.
What steps is CMS taking with states to ensure that individuals who
are not eligible for Medicaid are able to verify their Medicaid
ineligibility and access an APTC for Marketplace coverage?
Answer. The state must notify the individual of their ineligibility
for Medicaid or CHIP through the standard notice process and transfer
their application to the Marketplace as appropriate. Given that New
Jersey lacks the functionality to transfer applications back to the
Federally Facilitated Marketplace, information on how to contact the
Marketplace to enroll in coverage is included in their denial notices.
However, CMS is working closely with the State to improve their
enrollment processes and develop this functionality.
______
Questions Submitted by Hon. Thomas R. Carper
expanding pace eligibility and allowing pace innovation
Question. As Governor, I worked on the development of the Program
for All-inclusive Care for the Elderly (PACE) program in Delaware. It
is a very high-value, cost-effective model that provides fully-
integrated care for very frail seniors. PACE provides a comprehensive
package of coordinated care and services to individuals who are 55 or
older--and does so in a capitated payment arrangement.
I was pleased to see the Administration's proposal to expand PACE
to serve younger individuals with disabilities and other high-risk
populations. The PACE model for providing care and services is a good
fit for this younger, qualified population.
I have two questions regarding PACE:
First, with regard to the proposed pilot program, it is my
understanding that the Centers of Medicare and Medicaid Innovation is
already considering a demonstration project to do just that.
Answer. As you noted, the President's Fiscal Year 2016 Budget
includes a legislative proposal to create a pilot demonstration to test
whether the PACE program can effectively serve a younger population
without increasing cost. In developing this proposal, we have
considered whether there are non-statutory avenues for conducting a
similar demonstration, and believe that legislative authorization is
the best option for moving forward.
Question. Can you tell me more about the demonstration; what the
agency is going to move this initiative forward; and when we might
expect an RFP?
Answer. As noted above, we continue to believe that statutory
authorization of a demonstration is the best option for moving forward
at this time.
Question. Secondly, the PACE program is a value-based model that
should be able to innovate and expand just as all providers of care and
services are being asked to do as part of our health care system's
shift to payment for quality. However, the program needs long-awaited
revised regulations to allow this increased efficiency and innovation
to occur. In its fall 2012 Regulatory Agenda, CMS published that a
Notice of Proposed Rulemaking to revise the PACE regulation would be
issued in July 2013. Since then, this deadline has been extended to
December 2013, again to August 2014, and most recently, to Spring 2015.
This delay creates numerous burdens for the PACE community and stifles
their ability to innovate and grow.
What assurances can you offer that CMS will meet its own deadlines
and issue a revised PACE regulation this spring?
Answer. CMS is currently performing a comprehensive review of the
federal regulations governing PACE to identify potential regulatory
changes to reflect the evolving needs and opportunities of the program.
As CMS continues to contemplate potential regulatory changes, they have
implemented a number of improvements to PACE, including streamlining
the application process, updating the notification requirements for the
use of alternative care settings, and establishing a new PACE council
to bring together different components of the agency to focus on PACE
issues.
medicare coverage for treating obesity
Question. This summer, it will be two years since the American
Medical Association classified obesity as a disease and called on
patients, health care providers, insurers, and policymakers to take
this epidemic seriously. More than two-thirds of all American adults
are affected by being overweight or obese, and excess weight increases
the risk of diabetes, heart disease, stroke and other illnesses.
Medical costs are directly proportional to body mass index, which is
the leading indicator of obesity.
In light of this epidemic, we need an ``all hands on deck''
approach to treating obesity, not the piecemeal approach we currently
pursue. The guiding principle for us should be to provide physicians
with the means to make every treatment regimen available to those
individuals fighting obesity. This is why we need to make two important
changes to Medicare: first we need to expand access to weight
management counseling for those who with overweight or obesity. And
second, the coverage ban on FDA-approved obesity drugs under the
Medicare prescription drug program must be lifted.
I know you and the Administration share Congress's concern about
the climbing rates of obesity in our country and the concurrent cost
implications. Please report back to the Committee any data, analyses
and/or information the Chief Actuary or others at HHS might have that
sheds light on how those who are obese or overweight drive costs to
both the Medicare and Medicaid programs.
Answer. The Department shares your concern about obesity.
Currently, the Office of the Assistant Secretary for Health convenes an
HHS inter-agency workgroup on Healthy Weight, Nutrition and Physical
Activity (HWNPA). This group meets monthly and representatives from
across HHS share information on their agencies' HWNPA activities, which
range from school nutrition, childhood obesity, and healthy weight
measures to walking and walkability. CMS is part of this workgroup.
Currently, Medicare covers several types of bariatric surgery for
beneficiaries with a Body Mass Index (BMI) of 35 or greater and at
least one co-morbidity related to obesity who have previously been
unsuccessful with medical treatment for obesity. Medicare also covers
intensive behavioral counseling for obesity for individuals with a BMI
of 30 or greater.
There have not been many studies to date examining how increasing
rates of obesity have affected Medicare or Medicaid costs. A paper
published in Health Affairs in 2009 by Finkelstein and colleagues
estimated that, in 2006, $147 billion in national health expenditures
was attributable to obesity, including $34.3 billion for Medicare and
$27.6 billion for Medicaid. Another review paper by Tsai and colleagues
in 2010 put total obesity-related spending in 2008 at $114 billion.
reducing improper prescriptions of psychotropic medications
to foster children
Question. In your testimony, you mentioned a ten-year program that
would help children in foster care access the mental health services
they need. As you are aware, children in foster care are often
prescribed mind-altering medications to treat their behaviors. Experts
say that these medications can have harmful effects in the long term,
and that they may be less effective than therapies or other treatments
to address emotional trauma. Additionally, these prescriptions are very
costly, sometimes costing more than $532 million per year in Medicaid
expenses for prescriptions to foster children alone.
I was very pleased to see that the Administration is making access
to effective mental health treatment for foster children a priority.
The demonstration program that this proposal would fund would provide
states with important tools to improve mental and behavioral health
care for children in foster care, through increased use of effective
screening and assessment, and evidence-based treatment of trauma, along
with emotional and behavioral disorders. That program would be jointly
administered through the Administration for Children and Families (ACF)
and the Centers for Medicare & Medicaid Services (CMS), two agencies
within the Department of Health and Human Services.
Given the strengths of the proposed demonstration, I would like to
know:
First, are there any activities outlined in the proposal, including
providing incentive grants to states that CMS and ACF cannot undertake
without Congressional action, such as legislation to allow new
authorities?
Answer. Neither ACF nor CMS can pay incentive payments as
envisioned in the proposal without both authorization and
appropriation.
If authorized without sufficient funding, ACF would have the
authority to provide for the child welfare workforce, training, and
evaluation pieces of this proposal under the authority of existing
grants under title IV-B-1 and IV-B-2 of the Social Security Act, but
would only be able to fund these efforts by reducing expenditures for
important existing activities including the National Survey of Child
and Adolescent Well-Being (NSCAW), national training and technical
assistance for improving state and tribal child welfare systems, and
various grant opportunities for child welfare professionals and
students. However, as these are appropriated funds, this would involve
significant trade-offs, with less funding available for existing
activities including the National Survey of Child and Adolescent Well-
Being (NSCAW), national training and technical assistance for improving
state and tribal child welfare systems, and various grant opportunities
for child welfare professionals and students.
This proposal will help encourage States to implement evidence-
based psychosocial interventions targeting children and youth in the
foster care system, as an alternative to the current over-prescription
of psychotropic medications in this population. However, we are working
with States to identify ways to strengthen their efforts to address
this issue today. In terms of monitoring, CMS has encouraged states to
use their Medicaid Drug Utilization Review (DUR) programs to intensify
the oversight of prescribing psychotropic medications to children.
States are employing a variety of techniques in this area. Some states
have a system by which a prescription for a psychotropic medication in
a child triggers a preauthorization which requires a manual review of
the prescription request by a panel of experts of a multi-disciplinary
team, a psychiatrist or by the Medicaid agency's pharmacy staff. Other
states require that, for children under certain ages (e.g. under age
five, under age six, under age seven, etc.), the prescriber is required
to complete a form providing prescriber information, patient diagnosis,
target symptoms being treated, other drugs prescribed and laboratory
tests.
Question. Secondly, which activities, if any, require legislation?
Answer. The incentive payments would require both authorization and
appropriation for ACF and CMS. Using existing grant authority under the
Social Security Act as described above would require appropriations to
fund the appropriate portions of the proposal.
______
Questions Submitted by Hon. John Cornyn
king v. burwell
Question. Has the Department of Health and Human Services (HHS)
taken steps to inform all current federal exchange enrollees and all
visitors to HealthCare.gov about the King suit and how a ruling against
the Administration could affect them?
Answer. It has not.
Question. What are your agency's contingency plans to ensure that
people inappropriately subjected to the individual and employer
mandates and associated tax penalties are not punished further?
Answer. We are confident that we will prevail because the text,
structure, and history of the Affordable Care Act make clear that tax
credits are available to people in all states.
Question. Do you plan to ask Congress for a legislative solution?
Answer. We are confident that we will prevail because the text,
structure, and history of the Affordable Care Act make clear that tax
credits are available to people in all states.
Question. Do you believe you have the authority to make an
administrative fix?
Answer: We know of no administrative actions that would undo the
massive damage to our health care system that would be caused by an
adverse decision and, therefore, we have no plans that would undo the
massive damage. If the Supreme Court says we have no authority to
provide tax credits for citizens in States with federally-facilitated
Exchanges, we cannot provide them in such states.
______
Questions Submitted by Hon. Sherrod Brown
national institute for occupational safety and health (niosh)
Question. As you already know, one of my priorities for FY2016 is
to find and prioritize funding necessary to identify and acquire a new
NIOSH facility in Cincinnati, Ohio.
NIOSH's mission is to ``prevent work-related injury, illness, and
death.'' In Cincinnati, NIOSH research and support activities are
located on two separate campuses, approximately eight miles apart. Both
campuses are comprised of aging 1950s-era facilities that are in
varying states of disrepair, and are increasingly deficient in both
space configuration and building systems. Because of this, scientific
collaboration is limited and NIOSH's cutting-edge scientific research
is inhibited. Upgrading these facilities is of paramount importance,
and should be a funding priority.
Funding for a new facility for NIOSH was not included in the FY2016
proposed budget. Will there be funds left over from FY2015 that NIOSH
could use to begin this project? As you work with the Office of
Management and Budget (OMB) on this issue moving forward, do you have a
start date or location in mind?
Answer. HHS is supportive of the critical work being conducted at
NIOSH's Cincinnati campuses. The Department's FY 2015 Nonrecurring
Expenses Fund allocation includes $110 million to fully fund the
Cincinnati consolidation project. CDC has already engaged the General
Services Administration to secure acquisition services to support the
site solicitation process. Public responses to the site solicitation
will identify potential facilities for CDC's consideration;
solicitation responses are currently projected for FY 2016. The
solicitation's delineated search area will include the greater
Cincinnati area. I would be happy to keep you informed about the
Department's continued work on selection of a site and relocation/
consolidation.
antibiotic resistance
Question. Last year, the CDC came out with a report conservatively
estimating that more than two million people are sickened each year
with antibiotic-resistant infections--resulting in at least 23,000
deaths a year. I am pleased that the Administration has proposed an
increase in funding to strengthen the federal response to antibiotic
resistance (AR) and help combat this public health crisis.
I commend the Administration for investing more in AR surveillance,
research, and stewardship, and I am eager to know more about the
Administration's plan to combat AR going forward. Next week, the
President's Task Force for Combating Antibiotic-Resistant Bacteria is
scheduled to submit its 5-year National Action Plan to the President
outlining specific actions to be taken to implement a National Strategy
for Combating Antibiotic-Resistant Bacteria. What will be the Agency's
role in implementing this Strategy?
Answer. The National Action Plan for Combating Antibiotic Resistant
Bacteria will outline steps for implementing the National Strategy for
Combating Antibiotic-Resistant Bacteria and addressing the policy
recommendations of the President's Council of Advisors on Science and
Technology (PCAST) report on Combating Antibiotic Resistance. The
National Action Plan will outline federal activities over the next five
years to enhance our domestic and international capacity to prevent and
contain outbreaks of antibiotic-resistant infections, maintain the
efficacy of current and new antibiotics, and develop and deploy next-
generation diagnostics, antibiotics, vaccines, and other therapeutics.
These activities are consistent with investments proposed under the FY
2016 President's Budget request, which nearly doubles the amount of
Federal funding for combating and preventing antibiotic resistance to
more than $1.2 billion.
The FY 2016 budget request would support implementation of
activities in CDC's FY 2016 AR Solutions Initiative, an increase of
$264 million, which will build a more robust network to improve
detection for all of the antibiotic resistance (AR) threats outlined in
CDC's AR Threat Report and protect patients and communities from all of
these threats--saving lives, and reducing costs. CDC plans to award
more than 85 percent of AR Solutions Initiative funding to states,
communities, healthcare providers, universities, and other groups to
implement these activities.
CDC's FY 2016 budget request supports comprehensive tracking of AR
infections, rapid detection, and faster outbreak response by leveraging
existing detection programs and capabilities to:
Establish state AR prevention programs dedicated to improving
outbreak detection across healthcare facilities and in
communities, improve antibiotic prescribing, and prevent AR
infections and Clostridium difficile.
Establish a ``Detect'' network of up to seven regional
laboratories that will serve as a national resource to
characterize emerging resistance and rapidly identify outbreaks
of AR threats using state-of-the-art methods to characterize
known resistance patterns in real time and identify clusters of
resistant organisms more quickly. It will also track the spread
of AR organisms in communities and through food to people. This
will dramatically improve our understanding of which AR threats
are most common in the United States, and which will be
critical for new drug and diagnostic development. This network
will also provide rapid analysis of local, state, and national-
level resistance trends, and rapid dissemination of findings.
As AR threats change, CDC will tailor the testing protocols of the
labs to adapt to new and emerging threats. To ensure that key
stakeholders are aware of current AR threats, CDC will
establish an AR isolate library that will be accessible to
pharmaceutical companies and researchers testing new antibiotic
agents, and biotech and diagnostic companies designing the next
generation of clinical tests.
Expand the use of National Healthcare Safety Network's Antibiotic
Use and Antibiotic Resistance reporting options to track
antibiotic use and AR infections in over 90 percent of eligible
hospitals. These data allow hospitals to target prevention
efforts and assess the quality of antibiotic prescribing to
improve how antibiotics are used in U.S. healthcare facilities.
Double from 10 to 20 the number of CDC's Emerging Infections
Program (EIP) sites to expand population-based AR assessments
and faster assessments of risk to specific populations in the
community and in healthcare.
Question. Last year, I re-introduced the Strategies to Address
Antimicrobial Resistance (STAAR) Act, which would strengthen the
federal response to AR by reauthorizing the Interagency Task Force on
Antimicrobial Resistance (ITFAR) and allowing the CDC to partner with
state health departments to implement prevention collaboratives, and to
expand public health partnerships through the CDC's established
Prevention Epi-Centers work. I plan to reintroduce similar legislation
later this year to compliment the National Action Plan and National
Strategy in combating AR.
How could an updated version of the STAAR Act help compliment the
National Action Plan and implement a National Strategy? How could the
budget's increase in funding to combat AR bolster the STAAR Act's
potential to coordinate a federal response to this public health
crisis?
Answer. To support the National Strategy on Combating Antibiotic-
Resistant Bacteria, CDC is working to address the threat of antibiotic
resistance (AR) in four areas. These four areas touch on similar
activities outlined in the STAAR Act:
1. Slowing the development of resistant bacteria to prevent the
spread of resistant infections.
Supports regional prevention collaboratives between the CDC and
state health departments to interrupt and prevent the
transmission of significant AR pathogens being transferred
across health care settings in a geographic region.
Intensifies and expands academic public health partnerships
through the work of CDC's Prevention Epicenters to support the
evaluation of interventions to prevent or limit AR.
Improves the use of antibiotics by supporting CDC's work with
standard setting organizations such as the National Quality
Forum to benchmark appropriate antibiotic use and to assess the
impact of antimicrobial stewardship programs.
2. Strengthening the national one-health surveillance efforts to
combat resistance.
Intensifies and expands CDC's current efforts to collect AR data
to monitor theemergence and changes in patterns of AR
pathogens.
3. Advancing the development and use of rapid and innovative
diagnostic tests for identification and characterization of resistant
bacteria.
To ensure that key stakeholders are aware of current AR threats,
CDC will establish an AR isolate library that will be
accessible to pharmaceutical companies and researchers testing
new antibiotic agents, and biotech and diagnostic companies
designing the next generation of clinical tests.
4. Improving international collaboration and capacities for
antibiotic resistance prevention, surveillance, control and antibiotic
research and development.
Under the national strategy, CDC will develop a communications
network to improve the linkage of domestic and international AR
labs to track urgent and emergent AR pathogens across borders.
medication therapy management
Question. CMS recently released a rule related to the Part D
program, which finalized several of the remaining provisions from the
proposed Part D rule from last year. One of the provision from last
year's proposed rule that was not finalized looked to increase the
number of beneficiaries eligible for medication therapy management
services. MTM has been shown to improve patient health while at the
same time reducing costs, so increasing access to these services makes
sense.
Can you comment on the importance of the Part D MTM program as well
as on HHS's plans for making meaningful changes to the Part D MTM
program? Do you agree that HHS should finalize this part of the rule to
increase the number of beneficiaries eligible for MTM services?
Answer. Part D MTM programs are important to improve quality,
reduce adverse events, and improve therapeutic outcomes for enrollees.
Despite the comments to the proposed rule from those who supported the
proposed changes in eligibility criteria, we also considered the
comments that the timeline for implementing the proposed changes was
too aggressive and could negatively affect existing MTM programs. While
our goal was to increase eligibility and access to MTM, we did not want
to do it at the expense of sacrificing any quality with existing
programs. Therefore, we did not finalize our proposed changes to the
eligibility criteria.
CMS is conducting several evaluations of MTM programs: (1)
Evaluation to consider revisions of MTM eligibility criteria and to
identify effective outreach strategies; (2) MTM Improvements project to
improve the standardized format for the CMR written summary; and (3) a
Center for Medicare and Medicaid Innovation model in development to
test regulatory flexibilities and payment incentives for more robust
and effective MTM programs. Based on the outcomes of these evaluations,
CMS could engage in new notice and comment rulemaking.
esrd five star program
Question. I am concerned about CMS's methodology behind the new End
Stage Renal Disease (ESRD) Five Star program. As I understand it, the
current design of the program distorts actual dialysis facility
performance by forcing facility scores onto a hard bell curve. This
method exaggerates small differences in performance and skews hard data
around a center peak. As a result, states like Ohio have seen over 47%
of our dialysis facilities become 1 and 2 star facilities. It is
important that this program be effective and accurate.
These Star rankings fail to reflect the actual performance of
dialysis facilities and provide oftentimes inaccurate and misleading
information to patients. CMS even admits in their responses to
questions about the new star rating system that ``1 or 2 star
facilities are not necessarily the facilities that provide poor
service.'' Adding to the confusion, the new star rankings and the
Quality Improvement Program (QIP), mandated by Congress, are
inconsistent and, from a consumer's perspective, can be in direct
conflict. For example, 47.37% of Ohio's facilities are labeled as 1
Star or 2 Star facilities, yet 1.05% received a penalty of -2% or -1.5%
(the bottom two of five penalty categories).
5. What process has CMS has used in developing the Dialysis Five
Star program?
Answer. Information obtained from CMS consumer testing focus groups
revealed that the use of star ratings is more easily interpreted by
dialysis patients and their families than the information previously
available on Dialysis Facility Compare (DFC). In developing the Five
Star program, CMS first reviewed existing star-rating methodologies,
such as the Nursing Home star-rating system. CMS sought to be
consistent with that methodology, but to also learn from its
implementation. CMS also considered the implications of having a more
limited set of available measures derived from different data sources
than could be found for nursing homes.
The methodology depended on quality measures already publicly
reported on DFC, in some cases for more than a decade, with the
expectation that additional data and measures could be considered in
future iterations. CMS assessed existing measures for appropriateness
and removed those on which all providers performed highly since these
were not useful in distinguishing differences in care. This left the
current set of nine quality measures.
CMS developed the scoring methodology through a process that
considered alternative approaches, many of which have been suggested by
the dialysis provider community. Their specific methodological design
and supporting analyses were documented in a technical report and a
series of FAQs that are available to the public for review. CMS
presented the star rating methodology in July 2014 and shortly
thereafter provided preview reports to dialysis facilities for their
review and comment. They received extensive comments from the community
over the next several months and delayed the posting of the ratings
from October 2014 until January 2015, in part to consider concerns and
to respond in writing and through a series of public and private
meetings with stakeholders. After considering those concerns, CMS
determined that the star ratings methodology was appropriate to the
task of providing patients and other consumers with reliable and valid
summary data on the quality of care received at dialysis facilities.
CMS implemented the star ratings in January 2015.
CMS took steps to address concerns regarding the interpretation of
the data after speaking with patient advocates and conducted additional
testing to ensure messaging of the star ratings was appropriate for
patient needs. CMS also modified descriptive language on the DFC
website, in direct response to suggestions made by patients and patient
advocates.
Moving forward, in an effort to continuously improve, CMS decided
to use a Star Rating Technical Expert Panel (TEP) to more formally
incorporate public input into the methodology, and to drive the
prioritization of additional measures and data with a focus on patient
and consumer needs. This culminated in the announcement of a TEP in
early October 2014, and the distribution of a call for nominations of
TEP members from the public in early 2015. CMS's contractor is
preparing to convene the TEP in a series of meetings that are open to
the public.
Question. Unlike the development of the nursing home five star
program, where a technical expert panel (TEP) was convened to help
design the system, CMS convened no TEP and relied on no stakeholder
input to design the Dialysis Five Star program. In addition, although
CMS encouraged input when announcing its Dialysis Five Star program,
CMS said that it would not consider any input until the program was
updated. What was the rationale behind requesting input, but refusing
to consider it?
Answer. While CMS did not initially convene a TEP specific to the
star ratings for Dialysis Facility Compare, feedback obtained from
stakeholders and from the development of consumer websites in general
was considered in the design. CMS also recognized early in the process
that Star Ratings for DFC would be an iterative process that requires
periodic updating and maintenance. This would be necessary when new
measures became available, when old measures appeared to top out, or
methodological weaknesses in the scoring approach were identified. It
was not clear when CMS began developing the star ratings whether a TEP
would be necessary or appropriate, given the limited availability of
measures for dialysis facilities. Prior experience with star ratings
and the limited information available for inclusion originally
suggested that an initial run of the star ratings could be developed
internally and then improved upon with public feedback.
The Star Ratings were announced in July of 2014 accompanied by the
request for feedback from all stakeholders. CMS delayed posting of the
star ratings in order to give more time for stakeholders to meet with
CMS officials and to provide detailed input. CMS made it clear at that
time that it would consider all feedback prior to moving forward. In
fact, information from the community was considered, alternative models
where explored and after consideration was given to all factors, it was
determined that the model selected was the most appropriate for the
current time. Recognizing that the rating system is evolutionary and
the need to continually include more data, CMS decided that a TEP would
be appropriate as we consider future iterations of the program. As
CMS's contractor has prepared to convene the Star Ratings TEP, they
continue to speak regularly with stakeholders, including patients,
patient advocates, professional associations, and dialysis providers.
The contractor will be presenting much of the feedback we've received
to the TEP to inform their deliberations on scoring methodology,
measure prioritization, and communications, as well as other issues
that may arise.
Question. Just recently, CMS announced it is convening a dialysis
TEP. However, it does not seem that CMS has provided stakeholders or
patients with reasonable advanced notice or adequate time to submit
materials to the TEP for review and consideration as CMS seeks to
revise the Five Star program for 2016. It is critical that we give
patients, nephrologists, nurses and others a voice in this process and
even more critical that we consider recommendations that will allow the
Five Star program to accurately measure performance. In the interest of
transparency, what is CMS doing to ensure the engagement of outside
experts and input from patients in the effort to revise the ESRD Five
Star program for 2016? What level of transparency can we expect moving
forward?
Answer. We agree that reviewing and considering the recommendations
of stakeholders is critically important. CMS has frequent listening
sessions with nephrologists, nurses, patients and others that are
critical to the provision of ESRD care. The TEP provides a valuable
opportunity to further incorporate external input from key stakeholders
including statistical methodologists, clinical nephrologists,
nephrology nurses, and a large number of dialysis patients.
CMS announced in October 2014 that a contractor would convene the
TEP, representing 2-3 additional months of notice beyond what is
typical when we announce the formation of a TEP, so we believe that we
have given stakeholders ample time to provide us with their
recommendations and detailed methodologies. CMS' contractor is taking
care to present alternative methodologies to the TEP alongside the
existing Star Rating methodology, accompanied by extensive analyses
assessing stakeholder concerns. These materials are not privately held
and may be accessed by the community. Many of these are already
available via our FAQ documents.
The TEP will meet in-person in the spring of 2015 to consider the
methodological issues raised by the community, and to make suggestions
about future modifications to the scoring methodology, quality measure
set, and other related issues.
medicare part d plan finder
Question. Over the last several weeks, it has come to my attention
that hundreds of thousands of Medicare beneficiaries who chose Part D
plans for 2015 have had trouble accessing their medications because of
a mistake that was made as one particular insurance company created its
pharmacy networks. As I understand the situation, incorrect information
was posted on Medicare plan finder throughout open enrollment as well
as provided by insurance company regarding where seniors could have
their prescriptions filled. As a result, many pharmacies were listed on
Medicare's plan finder and on the company's website as being ``in
network'' when they were in fact out of network, creating chaos,
consternation, and very real medication access/distribution issues for
both pharmacies and their patients.
CMS acknowledged this issue in December, however no fixes were
implemented until well into January. Why didn't the agency address
before the new plan year started? What are you doing now to fix this
issue and provide recourse for current beneficiaries? What measures
will you put into place to ensure this does not happen to seniors
moving forward?
Answer. CMS was alerted in late November 2014 to possible
inaccuracies in the referenced Part D sponsor's network pharmacy
information when they received a complaint from a pharmacy stating that
its status as a network participant for the sponsor was reflected
incorrectly on the Medicare Plan Finder (MPF). During their
investigation of the matter, the plan sponsor acknowledged that it had
provided inaccurate pharmacy network information to CMS for the MPF and
in its own beneficiary communication materials. CMS acted promptly to
address this issue by removing the sponsor's Part D plan information
from display on the MPF in early December.
CMS's investigation also revealed that the sponsor's pharmacy
contracting process had left many pharmacies confused about their
participation in the sponsor's networks. CMS directed the sponsor to
issue notices to all its contracted pharmacies explicitly identifying
the plans for which they were network participants. In early January
2015, they also advised the sponsor to provide clear and binding offers
of standard contracting terms and conditions for participation in all
its plan types to pharmacies requesting them for CY 2015.
After the start of the 2015 benefit year, CMS began receiving
numerous complaints through 1-800-MEDICARE from beneficiaries upset
that their regular pharmacy was no longer participating in the Part D
plan they had elected. CMS took two significant steps to address these
complaints. First, beneficiaries were alerted that CMS would afford
them a special election period during which they could pick a new plan
for 2015 that included their pharmacy of choice in its network. Second,
CMS required the sponsor to agree to pay in-network claims at all of
the pharmacies with which it had contracted during 2014, until the
sponsor conducted additional beneficiary and pharmacy outreach about
the network changes and contracts with additional pharmacies that will
accept standard terms and conditions.
CMS will continue to monitor the sponsor's performance closely to
protect beneficiaries' access to their Part D benefits. CMS is also
evaluating additional steps they may be authorized to take to reduce
the likelihood of future inaccuracies in plan network information
provided to beneficiaries. CMS has issued multiple compliance actions
to the sponsor related to the erroneous information and the overall
beneficiary disruption caused by these changes. Also, they have and
will continue to advise pharmacy trade associations that they should
pay close attention to the process for contracting with Part D sponsors
and how their Part D participation information is represented by
sponsors and on the Medicare Plan Finder.
______
Questions Submitted by Hon. Pat Roberts
Question. Last year the Administration's Flexible Spending Account
(FSA) regulations allowed employees to rollover up to $500 to the next
plan year. Does the Administration support additional measures to make
FSAs and HSAs more useful to the middle class, such as restoring over-
the-counter (OTC) medicine eligibility without a prescription?
Answer. Regulations concerning the administration of Flexible
Spending Accounts (FSAs) are within the purview of the Department of
the Treasury, specifically, the Internal Revenue Service (IRS). This
Administration is open to improving the Affordable Care Act as long as
proposed changes enhance health care affordability, access, and quality
and help the economy.
Question. Under the current Self-Referral Disclosure Protocol for
Stark law violations, hospitals are awaiting decisions from CMS for
what seems to be an excessive period of time for technical
noncompliance (administrative mistakes, missing signatures, etc). How
many self-referral disclosures are currently pending a settlement
decision by CMS, and from how many hospitals? With a four year timeline
for CMS to reach a settlement, how many of these cases are nearing
expiration without a resolution?
Answer. There are 400 disclosures pending settlement. Based on our
experience to date, approximately 90 percent of disclosures involve
hospitals. The four year look back period refers to the period of time
during which a provider making a disclosure may not have been in
compliance with the physician-self referral law, but is not a time
limit for when a settlement must be reached. Once a provider of
services or supplier electronically submits a disclosure under the
Self-Referral Disclosure Protocol (SRDP) (and receives email
confirmation from CMS that the disclosure has been received), the
statutory obligation to return any potential overpayment within 60 days
will be suspended until a settlement agreement is entered, the provider
of services or supplier withdraws from the SRDP, or CMS removes the
provider of services or supplier from the SRDP.
Question. Last year, CMS presented a global settlements offer and
over 2,000 hospitals entered this process. How many acute hospital and
critical access hospital claim denials were eligible for the settlement
when it was extended, and how many of those have been settled thus far?
For other hospitals not currently eligible for settlement, such as IRFs
and LTCHs, how many denials for these hospitals are in the system?
Answer. The Department has a three-pronged approach to addressing
the increasing number of Medicare appeals and the current backlog of
claims to be adjudicated. First, invest new resources at all levels of
appeal to increase adjudication capacity and implement new strategies
to alleviate the current backlog. Second, take administrative actions
to reduce the number of pending appeals and more efficiently handle new
cases that are entering the appeals process. Third, pursue legislative
proposals described in the President's FY 2016 Budget that provide
additional funding and new authorities to address this urgent need.
The settlement provides an opportunity for the government to reduce
the pending appeals backlog by resolving a large number of homogeneous
claims in a short period of time. In addition, it allows hospitals to
obtain payment now for rendered services, rather than waiting an
extended period of time, with the additional risk of not prevailing in
the appeals process. HHS is still in the process of verifying and
completing the review of the claims submitted for settlement.
Question. Since this settlement process was only open to Acute Care
Hospitals and Critical Access Hospitals, will the same process be
extended to all hospitals and other Medicare providers and suppliers?
And if so, when?
Answer. HHS has no plans to extend the settlements at this time,
but we will continue to pursue options to responsibly resolve the
backlog of appeals.
The Department has a three-pronged approach to addressing the
increasing number of Medicare appeals and the current backlog of claims
to be adjudicated. First, invest new resources at all levels of appeal
to increase adjudication capacity and implement new strategies to
alleviate the current backlog. Second, take administrative actions to
reduce the number of pending appeals and more efficiently handle new
cases that are entering the appeals process. Third, pursue legislative
proposals described in the President's FY 2016 Budget that provide
additional funding and new authorities to address this urgent need.
Question. What oversight is being done on the Recovery Audit
Program to ensure the RACs aren't adding to the backlog problem with
inaccurate payment denials?
Answer. CMS strives to manage programs in an efficient manner that
balances the need to limit burden on Medicare providers with our
responsibility to protect Trust Fund dollars. CMS has carefully
evaluated the Recovery Audit program, and announced a number of changes
to it in response to industry feedback.\54\ CMS is confident that these
changes will result in a more effective and efficient program through
enhanced oversight, reduced provider burden, and more program
transparency. These changes will be effective with each new contract
award beginning with the Durable Medical Equipment, Home Health and
Hospice Recovery Audit contract awarded on December 30, 2014.\55\ The
President's FY 2016 Budget also includes a proposal to permit CMS to
retain a portion of recovered funds to implement corrective actions
identified through the Recovery Audit program.
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\54\ See http://www.cms.gov/Research-Statistics-Data-and-Systems/
Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-
Program/Downloads/RAC-Program-Improvements.pdf.
\55\ Due to a post-award protest filed at the Government
Accountability Office (GAO), CMS has delayed the commencement of work
under the national DMEPOS/HH&H, Region 5, Recovery Audit contract.
CMS has many safeguards in place to ensure Recovery Auditors are
not financially incentivized to inappropriately deny claims. For one,
if the claim is overturned at any level of appeal, the Recovery Auditor
does not receive a contingency fee payment. When Recovery Auditor
determinations are in fact appealed, many of these decisions are
upheld. Overall, only 9.3 percent of all Recovery Auditor
determinations were challenged and later overturned on appeal in FY
2013. CMS also contracts with an independent entity that reviews a
random sample of claims from each Recovery Auditor to establish an
accuracy rate, which is a measure of the accuracy of each Recovery
Auditor's overpayment and underpayment determinations. The combined
accuracy rates for the Recovery Auditors are consistently above 90
percent. In addition, continued poor performance by a Recovery Auditor
will result in negative performance evaluations and may result in work
stoppage, corrective action plans and/or contract modification or
---------------------------------------------------------------------------
termination.
Question. Providers are spending money on the appeals process--in
essence spending money to get money back that was theirs in the first
place. Are the auditors also spending money in the appeals process or
are those costs covered by CMS? If covered by CMS, how much money is
that, and is it being included in the cost-benefit analysis of the RAC
program?
Answer. The Tax Relief and Health Care Act of 2006 gives CMS the
authority to pay Recovery Auditors a contingency fee on recovered
improper payments. All operating expenses incurred by RACs from
activities conducted under the recovery audit program, including costs
incurred by RACs to support the appeals process, come out of the
contingency fee the Recovery Auditors receives for correcting the
claim.
Question. As part of the Department's focus on delivery system
reform, you highlighted an initiative that would change how doctors are
paid for treating cancer patients. What safeguards will be included to
ensure these patients can access treatments that are individualized to
meet their health care needs and aren't steered towards other options
purely based on cost?
Answer. We believe that oncology is an area of medicine where
efforts to improve the quality and efficiency of care can have
significant beneficial effects. Peer reviewed publications and
Institute of Medicine reports both demonstrate areas where patient care
can be improved. HHS believes that changing the way oncology care is
paid for and delivered can both improve the quality of cancer care and
reduce expenditures.
For each model that CMS tests, CMS includes a monitoring and
evaluation effort to address issues of patient protection and safety,
including continual assessment of quality of care. We monitor for
issues related to patient safety, care stinting and patient access to
care, patient freedom of choice, and provider induced demand for
unnecessary care. The monitoring approach is multipronged and utilizes
a variety of measures and data sources depending on the specifics of
the model. CMS uses measures that provide information on patient case-
mix, clinical quality process and outcomes, utilization patterns, and
patient reported experience of care. Information comes from a variety
of sources including claims, patient and proxy interviews, patient
assessment information, and in qualitative sources such as site visits
and interviews. These findings are tracked, examined and reviewed on an
ongoing basis, typically quarterly. These efforts would allow us to
quickly identify potentially negative shifts in patterns of care. The
precise monitoring strategy adopted is tailored to the unique
circumstances of every model. The choice of measures is a reflection of
the possible provider behaviors that could result from the incentives
being tested in that model.
Question. Last year, the Government Accountability Office found
that individuals in five states did not have the option of purchasing
an insurance plan through the marketplace that excluded elective
abortion. For the 2015 enrollment period, there are still four states--
Hawaii, New Jersey, Rhode Island, and Vermont--whose marketplaces only
offer plans covering elective abortion. While at least one Multi-State
plan is required to exclude it, not every state has MSPs yet. What
plans are underway to ensure that individuals in these states are able
to purchase a health plan that does not pay any amount towards elective
abortion? Will you assure consumers that there will be a plan that does
not cover abortion in each state by the 2016 open enrollment season?
Answer. Some of the issues raised by your question currently are
the subject of litigation. The Department of Justice will address these
issues in the course of the litigation as appropriate. In addition, the
Affordable Care Act, which established the Multi-State Plan Program,
directs the Office of Personnel Management (OPM) to contract with
private health insurers to offer high-quality, affordable health
insurance options called Multi-State Plans (MSP). A few states do not
currently have a MSP plan option available for purchase on the Exchange
in their States. As OPM is responsible for the administration of the
MSP Program, if you have questions regarding the availability of MSPs,
including the states in which they are available, those inquiries
should be directed to OPM.
Question. The California Department of Managed Health Care (DMHC)
issued a directive mandating that all health plans under its
jurisdiction immediately include coverage for legal abortions in all
circumstances. This includes plans provided by pro-life employers,
churches and religious institutions and plans that were previously
approved by DMHC that excluded some abortions. What action is HHS
taking to ensure that the DMHC complies with the Weldon amendment?
Answer. HHS supports clear and strong conscience protections for
health care providers and entities who are opposed to performing
abortions. The HHS Office for Civil Rights (OCR) received three
complaints alleging that the DMHC directive violates the conscience
clause protections of the Weldon Amendment. OCR has opened an
investigation to examine the allegations in these complaints and has
been proceeding expeditiously. Because these are open cases, we cannot
comment on the status of the review.
______
Questions Submitted by Hon. Pat Roberts and Hon. Johnny Isakson
Question. As you know, there was an issue with some Medicare Part D
drug plans listed on the Medicare Plan Finder website during the 2014
Medicare open enrollment period. Some seniors were given incorrect
information regarding which pharmacies were in-network when selecting a
plan last year. We appreciate CMS's efforts to work with us and our
local pharmacists to establish a special enrollment period for Medicare
Part D beneficiaries who enrolled in a plan that listed an incorrect
pharmacy network on the Medicare Plan Finder. How does CMS ensure that
the approved plan network is accurate when presented to beneficiaries
during open enrollment? What rules are in place to ensure beneficiaries
have access to a broad network of pharmacies?
Answer. The Part D statute requires Medicare prescription drug
plans to afford their enrollees access to retail pharmacies in urban,
suburban, and rural areas at rates equivalent to at least those
applicable to the TRICARE program. To develop such a network, the
statute authorizes Part D plan sponsors to contract with the pharmacies
they select and with which they can negotiate mutually acceptable
terms. A sponsor must also offer to any pharmacy making such a request
the opportunity to participate in the sponsor's plan network under
standard terms and conditions established by the sponsor.
CMS relies on each sponsor to provide beneficiaries and CMS with
accurate pharmacy network information, including that used to populate
the Medicare Plan Finder (MPF) website. CMS conducts an outlier
analysis on pharmacy network and drug pricing information sponsors
submit for the MPF to identify instances where a sponsor's submission
may be inaccurate. While this outlier analysis is useful in supporting
MPF accuracy, it cannot detect all inaccuracies in a sponsor's
submission.
CMS was alerted in late November 2014 to possible inaccuracies in
the referenced Part D sponsor's network pharmacy information when we
received a complaint from a pharmacy stating that its status as a
network participant for the sponsor was reflected incorrectly on the
MPF. During our investigation of the matter, the plan sponsor
acknowledged that it had provided inaccurate pharmacy network
information to CMS for the MPF and in its own beneficiary communication
materials. CMS acted promptly to address this issue by removing the
sponsor's Part D plan information from display on the MPF in early
December until it was cancelled in late December.
CMS's investigation also revealed that the plan sponsor's pharmacy
contracting process had left many pharmacies confused about their
participation in the sponsor's plan networks. CMS directed the plan
sponsor to issue notices to all its contracted pharmacies explicitly
identifying the plans for which they were network participants. In
early January 2015, we also advised the sponsor to provide clear and
binding offers of standard contracting terms and conditions for
participation in all its plan types to pharmacies requesting them for
CY 2015.
After the start of the 2015 benefit year, CMS began receiving
numerous complaints through 1-800-MEDICARE from beneficiaries upset
that their regular pharmacy was no longer participating in the Part D
plan they had elected. CMS took two significant steps to address these
complaints. First, beneficiaries were alerted that CMS would afford
them a special election period during which they could pick a new plan
for 2015 that included their pharmacy of choice in its network. Second,
CMS had the sponsor agree to pay in-network claims at all of the
pharmacies with which it had contracted during 2014,until the sponsor
conducts additional beneficiary and pharmacy outreach about the network
changes and contracts with additional pharmacies that will accept
standard terms and conditions.
CMS will continue to monitor the sponsor's performance closely to
protect beneficiaries' access to their Part D benefits. CMS is also
evaluating additional steps we may be authorized to take to reduce the
likelihood of future inaccuracies in plan network information provided
to beneficiaries. CMS has issued multiple compliance actions to the
sponsor related to the erroneous information and the overall
beneficiary disruption caused by these changes. Also, we have and will
continue to advise pharmacy trade associations that they should pay
close attention to their process for contracting with Part D sponsors
and to how their Part D plan participation information is represented
by sponsors and on the MPF.
______
Submitted for the Record by Hon. Maria Cantwell
From Bloomberg
U.S. to Overhaul Medicare Payments to Doctors, Hospitals
by Alexander Wayne
January 26, 2015
(Bloomberg)--The Obama administration will make historic changes to how
the U.S. pays its annual $3 trillion health-care bill, aiming to
curtail a costly habit of paying doctors and hospitals without regard
to quality or effectiveness.
Starting next year Medicare, which covers about 50 million elderly and
disabled Americans, will base 30 percent of payments on how well health
providers care for patients, some of which will put them at financial
risk based on the quality they deliver. By 2018, the goal is to put
half of payments under the new system.
For doctors and health facilities, the system will tie tens, and then
hundreds, of billions of dollars in payments to how their patients
fare, rather than how much work a doctor or hospital does, lowering the
curtain on Medicare's system of paying line-by-line for each scan, test
and surgery.
``We believe these goals can drive transformative change,'' Sylvia
Mathews Burwell, secretary of the Health and Human Services Department,
said in the statement.
The program would be a major shift for hospitals, health facilities and
physicians, eventually more than doubling the reach of programs that
the U.S. said has saved $417 million and that have been a model for how
the government hopes to influence, and slow down, health spending.
Medicare paid about $362 billion to care providers in 2014, the health
department said in a statement, making it the biggest buyer of health
care services in the U.S. Paying separately for each procedure, called
``fee-for-service,'' has long been viewed as an inefficient driver of
U.S. health spending, which at more than 17 percent of gross domestic
product is the highest in the world.
Broad Reach
The Obama administration's announcement today is the first time the
government has ever set specific goals to steer the nation away from
fee-for-service payments.
Medicare's practices are often echoed by private insurers who cover 170
million Americans. If the U.S.'s plan is successful, non-elderly
consumers could eventually see cost savings, though they may also find
that doctors and hospitals offer fewer services as they seek to cut
waste and maintain profits.
Doctors and hospitals are already facing changes under the Patient
Protection and Affordable Care Act, or Obamacare. About 20 percent of
Medicare spending is now paid through programs in which health-care
providers either take some financial risk for their performance or at
least collect and report measures of their quality, the health
department said. Expanding that figure was a key goal of the law.
At Risk
``The people who are delivering care are increasingly at financial risk
for the services that are being rendered,'' Dan Mendelson, CEO of
Avalere Health, a Washington consulting firm, said in a phone
interview. ``It's increasingly likely the physician or the hospital is
going to make more money if they provide less care.''
The country's main lobbying groups for doctors and hospitals said they
were on board, at least with the broad idea behind the overhaul. ``We
support Secretary Burwell's goals and plans,'' said Maureen Swick, a
representative of the American Hospital Association.
Robert Wah, president of the American Medical Association, said that
physicians were worried about additional bureaucracy. ``This idea that
we're talking about delivery reform and setting up a system of delivery
reform, we're very supportive of that,'' Wah said in an interview in
Washington. ``The details will be important to see.''
Industry Reaction
Burwell met with about two dozen health industry officials this morning
to brief them on the administration's plan. Participants included
executives of Verizon Communications Inc., Boeing Co., UnitedHealth
Group Inc., Anthem Inc. and representatives of large hospital chains
and physician organizations.
The Affordable Care Act, often criticized by its opponents for not
doing much to control health-care costs, created several programs the
Obama administration now plans to rely upon to end fee-for-service
payments. For example, the law penalizes hospitals with high rates of
readmissions of Medicare patients within 30 days of discharging them,
and encourages doctors and hospitals to band together and closely
coordinate their care, with the aim of reducing redundancies and
inefficiency.
Those programs have saved about 50,000 lives and reduced health-care
spending by about $12 billion, based on preliminary estimates, the
health department said.
______
Prepared Statement of Hon. Orrin G. Hatch,
a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah)
today delivered the following opening statement at a committee hearing
on President Obama's fiscal year 2016 budget for the Department of
Health and Human Services (HHS):
Good morning. It's a pleasure to welcome everyone to today's
hearing on the Fiscal Year 2016 budget for the Department of Health and
Human Services (HHS).
Thank you Secretary Burwell, for being here today. This is your
first hearing before this committee since being confirmed, so welcome
back in your official capacity.
I told you when we were talking at your confirmation hearing that
the job you now have would be a thankless one and that you were
undertaking an enormous responsibility. At that time, we also discussed
three main areas that I encouraged you to focus on during your time at
HHS: responsiveness, accountability, and independence.
I'd like to talk more about each of those areas today.
Let's start with responsiveness. During your confirmation hearing,
I raised the importance of being responsive to Congress and to this
committee in particular. You assured me this would be a top priority of
yours as well, and that, under your watch, we would see a marked
improvement.
In the past year, this committee has written at least twenty
letters to HHS or CMS, asking questions about serious issues such as
fraud prevention, hacking of the HealthCare.gov website, Medicaid
expansion, and many others. I understand that we have now received
answers to nearly every one of the outstanding letters just in time for
your appearance here today, with the last few responses coming just
last week.
This is an improvement. And, I appreciate the efforts being made to
provide these answers.
However, I hope that it will not require calling you to testify
before the committee to ensure more timely responses going forward. If
it does, then I suppose I will have to look forward to seeing you for a
hearing every thirty to sixty days.
Thank you for continuing to make this a priority. Good
communication between HHS and this committee is paramount to a good
working relationship.
Now let's talk about accountability. One of the big issues we
discussed at your confirmation hearing was the absolute need for fiscal
accountability given the huge breadth and scope of HHS's programs and
budget. Overseeing them requires constant vigilance and effective
management. When looking at the size of the budget for HHS for this
coming fiscal year, we see just how big a job that is.
In fact, the expression ``too big to fail'' does not really apply
here as the HHS budget is so big one could argue that it is destined to
fail.
The HHS budget for FY 2016 is just over a trillion dollars.
In real terms, if HHS were a country and its budget was its GDP, it
would be the 16th largest economy in the world.
To put it in a more American context, the total budget of HHS is
more than double that of Walmart and five times more than Apple.
My concern is that the savings and efficiencies in the overall HHS
budget are very small when compared to the overall spending. The
President's proposed budget would save just under $250 billion over the
next decade, which sounds like a lot, but that is only 3.8 percent of
total Medicare and Medicaid spending. More accountability is critical
here to ensure these programs have sufficient resources to continue to
provide benefits for years to come.
On the policy front, the administration needs to be up front to
Congress about their contingency plans if the King v. Burwell case is
not decided in its favor. Depending on what happens in the Supreme
Court, in late June, HHS could have to figure out how to provide
services for millions of Americans who are currently receiving tax
subsidies that enable them to pay for health insurance. I can only
assume that the agency has a plan in place for dealing with this
possibility. Secretary Burwell, I hope you'll share that with us today.
That brings me to independence. For some time now, I have been
concerned about the amount of influence HHS and the administration has
over the operations and policies impacting the entitlement programs run
by CMS. The budget released this week indicates that spending on just
Medicare and Medicaid is expected to exceed $11 trillion over the next
decade. In fact, CMS accounts for 85 percent of the total HHS budget.
These are astonishing numbers.
They also reinforce for me something that I have long believed: It
is time to start talking about making CMS an independent agency apart
from HHS.
Nearly twenty years ago, Congress passed, and the President signed
into a law, the Social Security Independence and Program Improvements
Act of 1994. That law separated the Social Security Administration from
HHS and made it an independent agency. At that time, SSA was the
largest operating division within HHS and accounted for about 51
percent of HHS's total staff and more than half of HHS's total annual
budget.
I intend to introduce legislation to move CMS out of HHS.
Whether or not CMS becomes an independent agency is something to
consider going forward, but the accountability and transparency
problems we currently see in CMS programs cannot wait. I hope that we
can work together in the coming months on both Affordable Care Act and
entitlement issues to create solutions that work for all Americans.
Finally, I just want to note that while there is much in the
President's budget that I disagree with, there are areas where I think
we can find common ground.
For example, I appreciate the provision in the budget that
addresses the issue of over-reliance on congregate care facilities or
group homes for children and youth in foster care. For years, I have
been working to call attention to the deplorable conditions in many of
these group homes. Recent research indicates that these group homes are
unsafe, expensive, and too often contribute to profoundly negative
outcomes for the children and youth who are placed in them. I look
forward to working with the administration to end the over-reliance on
group homes.
Secretary Burwell, I look forward to your testimony today and to
working with you to ensure our most vulnerable citizens get the care
they deserve.
I'd now like to turn it over to Senator Wyden for his opening
remarks.
______
Prepared Statement of Hon. Ron Wyden,
a U.S. Senator From Oregon
Far too many people--including millions in Oregon and across the
country--feel like they're falling behind as the economy picks up
steam. Congress's job is to make sure that doesn't happen. It's
important for the Finance Committee to keep that challenge in focus
this week as it examines the President's fiscal year 2016 budget
proposals.
The budget articulates the priorities of today, and it also
reflects our priorities for the future. Secretary Burwell will have the
opportunity in just a moment to illustrate how the President's budget
proposal aims to strengthen our health and human services programs and
promote economic mobility. But I'd first like to make a few comments
about where American health care has been, and where it's going.
This year marks the 50th anniversary of Medicare and Medicaid, and
a lot has taken place since they were first created. Congress came
together to create the Children's Health Insurance Program, or CHIP,
and has reauthorized it three times. Congress has improved and expanded
Medicare and Medicaid.
It passed the Affordable Care Act, making access to high-quality
care wider than ever before. Thanks to five decades of progress, health
care in America is no longer reserved for the healthy and the wealthy.
The job, however, is not done. Our budget must reflect a twofold
commitment: first, to protect the progress that's already been made,
and second, to clear the way for progress to continue in the future.
For Medicare, that means guaranteeing that the program's benefits
fully meet the needs of this era's seniors. The demands on the program
are different than they were 50 years ago. The big-ticket Medicare
costs of 2015 are no longer things like kidney stones and broken
ankles. They're chronic conditions like cancer, diabetes, and
Alzheimer's that are tougher and more costly to treat. The HHS budget
begins to acknowledge that reality, and bigger investments in research
on chronic conditions are a positive step. But treating chronic disease
is Medicare's future.
What's needed is a roadmap to efficient and effective care that
moves away from fee-for-service. Patients and providers told this
committee last summer about the need to address chronic care in a
different way. There is bipartisan support for that in Congress, and I
look forward to working with you, Secretary Burwell, and the
administration to make chronic care reform a reality.
Precision medicine will need the same kind of roadmap. Medical
professionals know that a treatment will often affect Susan in a
different way than it affects George. And with the right research, it
will be possible to learn what drives those differences and how to
tailor treatments to fit an individual patient's needs. The Precision
Medicine Initiative included in the President's budget proposal follows
an innovative test program I fought to include in the Affordable Care
Act. Looking ahead, the next step will be to design a payment system
for this innovative field of medicine that will work for patients and
taxpayers.
The President's budget proposal will also continue the progress
made by the Affordable Care Act to reward the quality of care, rather
than the quantity. Congress can do even more by passing bipartisan,
bicameral legislation to improve the way Medicare pays physicians.
The President's proposal takes a vital step by including four years
of funding for CHIP. There are more than 10 million kids in America who
get health insurance through CHIP, including more than 75,000 in
Oregon. A child who starts life with quality health insurance has a
much better shot at a successful, middle-class life than a kid who
doesn't. Renewing CHIP is a no-brainer. Families and state agencies
across the country are waiting for Congress to act.
These are steps Congress can take to help guarantee that our health
programs remain strong for generations to come. They are lifelines for
countless Americans, and as a result, millions of families will never
have to choose between paying for a loved one's care and sending kids
to college. And millions of kids will grow up with access to quality
health care that keeps them healthy and out of the emergency rooms
whenever possible.
Of course, it's important to remember that Health and Human
Services does far more than oversee Medicare, Medicaid and CHIP. No
department plays a bigger role preserving America's safety net than
HHS. This committee has a long history of working on a bipartisan basis
on policies to strengthen our federal child welfare programs for
vulnerable kids.
Just five months ago, Congress enacted the Preventing Sex
Trafficking and Strengthening Families Act, and HHS is helping turn
this bill from a piece of paper signed by the President into new tools
that help states move vulnerable kids out of harm's way and into safe
and permanent homes.
The President's budget proposal shows that it's possible to build
on this momentum by expanding programs that keep children and families
together and healthy--particularly through early interventions like
home visiting for first time parents. These multigenerational supports
can help prevent the long-term costs associated with homelessness,
abuse or neglect, and foster care. These investments are critical at a
time when too many Americans feel like the recovery hasn't yet reached
them because they're still struggling to get ahead.
Thank you, Secretary Burwell, for joining the committee today to
discuss the HHS budget for the year ahead. Managing our health and
human services programs is a tough job. This budget makes it clear as
day that there will be many chances for the Finance Committee and the
administration to work together to protect those programs today and in
the future.
______
Communication
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Association for Community Affiliated Plans (ACAP)
1015 15th Street, N.W., Suite 950 Washington, DC 20005
Tel. 202.204.7508 Fax 202.204.7517 www.communityplans.net
John Lovelace, Chairman Margared A. Murray, Chief Executive Officer
February 10, 2015
The Honorable Orrin Hatch, Chairman
U.S. Senate Committee on Finance
United States Senate
Washington, DC 20510
The Honorable Ron Wyden, Ranking Member
U.S. Senate Committee on Finance
United States Senate
Washington, DC 20510
Dear Senator Hatch and Senator Wyden,
We write to express our support to members of the Senate and to members
of the Senate Finance Committee for encouraging the Centers for
Medicare & Medicaid Services (CMS) to take steps to alter the Star
ratings program to account for underlying differences in Medicare
Advantage (MA) plans' enrolled populations. Forty Senators submitted a
letter to Administrator Tavenner on February 3, 2015, and this issue
was also raised during the Senate Finance Committee's February 4
hearing. We believe that the Star ratings program, in its current form,
disadvantages health plans that enroll dual eligible beneficiaries. We
applaud the Senators for urging CMS to use its existing regulatory and
administrative authority to improve the Star ratings program so that
the quality of care MA plans provide to dual-eligible beneficiaries can
be accurately measured and compared across plans.
Dual-eligible beneficiaries are among the poorest, sickest, and most
costly individuals to both the Medicare and Medicaid programs. They
often fall through the cracks between the two programs, and many of
these beneficiaries experience uncoordinated care in Medicare and
Medicaid fee-for-service (FFS). D-SNPs are an opportunity for these
beneficiaries to receive better coordinated care and higher quality of
care than they would otherwise receive through FFS. Unlike other types
of MA plans, D-SNPs exclusively enroll and focus their provider
networks, benefit packages, and care management resources specifically
on dual-eligible beneficiaries.
The inability of the Star ratings program to accurately assess and
compare quality measures for dual-eligible beneficiaries is a consumer
issue as well as a plan issue. Dual-eligible beneficiaries will lose if
their health plans--particularly those that integrate all of their
Medicare and most of their Medicaid benefits--are no longer financially
able to continue serving them due to low reimbursement on account on
inaccurate Star ratings.
We support a Star ratings program that evaluates and compares all MA
plans based on the quality of care they furnish, rather than on the
underlying characteristics and needs of their enrollee population.
We have asked CMS to improve the program by:
1. Using quality measures that are appropriate for dual-eligible
beneficiaries with complex health, behavioral, and cognitive needs;
2. Reporting and applying quality ratings of D-SNPs at the plan level
instead of the contract level; and
3. Comparing D-SNPs to other D-SNPs that enroll similar populations.
We have also asked Congress to require the Government Accountability
Office (GAO) to conduct a study to determine how the Secretary could
change the Star ratings program to accurately compare the quality of
care provided by individual D-SNPs (and D-SNPs as a whole) to the
quality of care dual-eligible beneficiaries receive under Medicare FFS
and other MA plans with similar populations.
It is a high priority for our D-SNP member plans that the quality of
care they provide to their dual-eligible enrollees is accurately
measured and reported to consumers. We will continue to work with our
member plans to identify ways to improve the accuracy of the Star
ratings program. We hope that the experience of our member plans in
serving some of the most complex, challenging, and costly Medicare and
Medicaid beneficiaries is a resource to the Congress and to CMS as the
MA program is improved, so that all Medicare beneficiaries have the
opportunity to receive better quality of care through this program.
ACAP is prepared to assist with additional information, if needed. If
you have any additional questions please do not hesitate to contact
Christine Aguiar at (202) 204-7519 or [email protected].
Sincerely,
Margaret A. Murray
Chief Executive Officer
[all]