[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]





   MEDICAID OVERSIGHT: EXISTING PROBLEMS AND WAYS TO STRENGTHEN THE 
                                PROGRAM

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

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 31, 2017

                               __________

                            Serial No. 115-1






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]













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                    COMMITTEE ON ENERGY AND COMMERCE

                          GREG WALDEN, Oregon
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
TIM MURPHY, Pennsylvania             ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee          DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana             MICHAEL F. DOYLE, Pennsylvania
ROBERT E. LATTA, Ohio                JANICE D. SCHAKOWSKY, Illinois
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida            YVETTE D. CLARKE, New York
BILL JOHNSON, Ohio                   DAVID LOEBSACK, Iowa
BILLY LONG, Missouri                 KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana               JOSEPH P. KENNEDY, III, 
BILL FLORES, Texas                       Massachusetts
SUSAN W. BROOKS, Indiana             TONY CARDENAS, California
MARKWAYNE MULLIN, Oklahoma           RAUL RUIZ, California
RICHARD HUDSON, North Carolina       SCOTT H. PETERS, California
CHRIS COLLINS, New York              DEBBIE DINGELL, Michigan
KEVIN CRAMER, North Dakota
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia

              Subcommittee on Oversight and Investigations

                        TIM MURPHY, Pennsylvania
                                 Chairman
H. MORGAN GRIFFITH, Virginia         DIANA DeGETTE, Colorado
  Vice Chairman                        Ranking Member
JOE BARTON, Texas                    JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            KATHY CASTOR, Florida
SUSAN W. BROOKS, Indiana             PAUL TONKO, New York
CHRIS COLLINS, New York              YVETTE D. CLARKE, New York
TIM WALBERG, Michigan                RAUL RUIZ, California
MIMI WALTERS, California             SCOTT H. PETERS, California
RYAN A. COSTELLO, Pennsylvania       FRANK PALLONE, Jr., New Jersey (ex 
EARL L. ``BUDDY'' CARTER, Georgia        officio)
GREG WALDEN, Oregon (ex officio)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     3
Hon. Diana DeGette, a Representative in Congress from the state 
  of Colorado, opening statement.................................     4
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     6
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, prepared statement.....................................   126

                               Witnesses

Carolyn L. Yocom, Director, Health Care, U.S. Government 
  Accountability Office..........................................     9
    Prepared statement...........................................    11
Ann Maxwell, Assistant Inspector General, Office of Evaluation 
  and Inspections, Office of Inspector General, Department of 
  Health and Human Services......................................    28
    Prepared statement...........................................    30
Paul Howard, Senior Fellow, Director, Health Policy, The 
  Manhattan Institute............................................    43
    Prepared statement...........................................    45
Josh Archambault, MPP, Senior Fellow, The Foundation for 
  Government Accountability......................................    62
    Prepared statement...........................................    64
Timothy M. Westmoreland, J.D., Professor from Practice, Senior 
  Scholar in Health Law, Georgetown University Law Center........    82
    Prepared statement...........................................    84

                           Submitted Material

Subcommittee memorandum..........................................   128

 
   MEDICAID OVERSIGHT: EXISTING PROBLEMS AND WAYS TO STRENGTHEN THE 
                                PROGRAM

                              ----------                              


                       TUESDAY, JANUARY 31, 2017

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2123, Rayburn House Office Building, Hon. Tim Murphy 
(chairman of the subcommittee) presiding.
    Present: Representatives Murphy, Griffith, Burgess, Brooks, 
Collins, Barton, Walberg, Walters, Costello, Carter, Walden (ex 
officio), DeGette, Schakowsky, Castor, Tonko, Clarke, Ruiz, 
Peters, and Pallone (ex officio).
    Staff Present: Jennifer Barblan, Chief Counsel, O&I Elena 
Brennan, Legislative Clerk, O&I Paige Decker, Executive 
Assistant & Committee Clerk; Scott Dziengelski, Policy 
Coordinator, Health; Blair Ellis, Digital Coordinator/Press 
Secretary; Emily Felder, Counsel, O&I Jay Gulshen, Legislative 
Clerk, Health; Brittany Havens, Professional Staff, O&I Peter 
Kielty, Deputy General Counsel; Katie McKeough, Press 
Assistant; Jennifer Sherman, Press Secretary; Luke Wallwork, 
Staff Assistant; Gregory Watson, Legislative Clerk, C&T 
Everett Winnick, Director of Information Technology; Jeff 
Carroll, Minority Staff Director; Tiffany Guarascio, Minority 
Deputy Staff Director and Chief Health Advisor; Chris Knauer, 
Minority Oversight Staff Director; Una Lee, Minority Chief 
Oversight Counsel; Miles Lichtman, Minority Staff Assistant; 
Dan Miller, Minority Staff Assistant; Jon Monger, Minority 
Counsel; Dino Papanastasiou, Minority GAO Detailee; Rachel 
Pryor, Minority Health Policy Advisor; Matt Schumacher, 
Minority Press Assistant; Andrew Souvall, Minority Director of 
Communications, Outreach and Member Services; and C.J. Young, 
Minority Press Secretary.

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

    Mr. Murphy. Good morning, everyone. Welcome to the newly 
refurbished--well, I want to call it the Oversight and 
Investigation Committee room, which is sometimes used by Energy 
and Commerce. What a beautiful room and it should be more 
conducive to a good hearing.
    This is the first one of the 115th Congress, so welcome 
here, and welcome to our witnesses today, and welcome back to 
my friend and colleague, Ranking Member Diana DeGette of 
Colorado.
    This is our Medicaid oversight hearing on existing problems 
and ways to strengthen the program. The subcommittee convened 
this hearing today to examine a critical component of the 
Patient Protection and Affordable Care Act, Medicaid and 
Medicaid expansion.
    As the world's largest health program, Medicaid provides 
healthcare coverage for over 70 million Americans and accounts 
for more than 15 percent of healthcare spending in the United 
States. In 2015 alone, Federal taxpayers spent over $350 
billion on Medicaid, and the costs continue to rise each year. 
According to the Congressional Budget Office, the Federal share 
of Medicaid spending is expected to rise significantly over the 
coming decade, from $371 billion in 2016 to $624 billion in 
2026, over 10 years.
    At a time when Medicaid program costs are skyrocketing, it 
makes sense to ask the question, is Medicaid adequately serving 
our most vulnerable populations? Medicaid was originally 
designed as a safety net to care for health of some of our most 
vulnerable populations: Low-income children, pregnant women, 
parents of dependent children, the elderly, individuals with 
disabilities. And for many years serving as a psychologist, I 
know I've treated many kids that without their disability 
coverage from Medicaid, it would be a struggle for them.
    But far too often, Medicaid's own rules keep it from best 
serving the families that it was designed to help. These 
restrictions surrounding Medicaid do not allow doctors and 
nurses the flexibility they need to arrive at the best outcome 
for patients. For instance, most Medicaid programs do not use 
physician-focused alternative payment models that can improve 
care and reduce costs.
    And studies show that Medicaid coverage does not 
necessarily result in better health outcomes. One often cited 
study in Oregon found that Medicaid coverage increases 
healthcare use and improves self-reported health and mental 
health, while having no effect on mortality or physical health. 
Similarly, the National Bureau of Economic Research found that 
Medicaid enrollees obtained only 20 to 40 cents of value for 
each dollar the government spends on their behalf.
    Further, reports by nonpartisan watchdogs, two of which are 
here today, show that the Medicaid program remains a target for 
waste, fraud, and abuse. Because of the size and scale of the 
program, improper payments, including payments made for people 
not eligible for Medicaid or for services that were not 
provided, are extremely high. The Government Accountability 
Office estimates Medicaid paid out over $17 billion in improper 
payments in fiscal year 2014 alone.
    For these reasons, Medicaid has been designated as a high-
risk program by the GAO for 14 years, since 2003. And despite 
the longstanding problems in the Medicaid program, the Patient 
Protection and Affordable Care Act expanded Medicaid to a whole 
new population. In 32 states, Medicaid benefits have been 
opened up to adults under the age of 65 who make less than 133 
percent of the poverty level.
    Since open enrollment began in October 2013, roughly 11 
million individuals have signed up for Medicaid coverage under 
the new eligibility parameters. This means that the majority of 
individuals covered under ObamaCare have enrolled through the 
Medicaid program instead of purchasing private health insurance 
plans.
    The costs associated with insuring the 11 million new 
Medicaid enrollees have been far more expensive than the Obama 
administration predicted. A report released by the Department 
of Health and Human Services found that the average cost of 
expansion enrollees was nearly 50 percent higher than 
projected. Medicaid expansion enrollees cost an average of 
$6,366 in fiscal year 2015, which is 49 percent higher than the 
agency predicted the year prior.
    This means that not only are expansion enrollees expensive 
to insure, but the costs are difficult to predict. Further, 
because of the high matching rate, the Federal taxpayer is on 
the hook for the vast majority of expenses associated with new 
enrollees. Unfortunately, reports show both states and the 
Federal Government cannot effectively oversee and implement 
Medicaid expansion. The GAO found errors in Medicaid 
eligibility determinations that could lead to misspending of 
funds. Likewise, the Inspector General found troubling evidence 
that the Federal Government failed to implement requirements in 
the Patient Protection and Affordable Care Act that were 
supposed to improve program integrity and root out waste, 
fraud, and abuse.
    While we all acknowledge there are serious weaknesses and 
deficiencies in how this program operates, we also recognize 
the responsibility of the Federal Government to provide a 
safety net to the most vulnerable among us. That means ensuring 
that taxpayer dollars are spent in a way that actually improves 
health outcomes and serves the Medicaid population. We want 
this to work, not hinder services. And I hope we can, in a 
bipartisan way, support its strengths, acknowledge the 
problems, and together find some solutions.
    Tomorrow, the Health Subcommittee will discuss legislative 
solutions to strengthen Medicaid, but as we move forward with 
legislation, we must also be careful not to repeat the 
worsening problems that already exist in the program. As we 
will hear from our witnesses today, we have a lot of work to do 
and I'd like to thank our witnesses for appearing today and 
look forward to an informative discussion.
    I now turn to the ranking member Ms. DeGette for 5 minutes.
    [The prepared statement of Mr. Murphy follows:]

                 Prepared statement of Hon. Tim Murphy

    The Subcommittee convenes this hearing today to examine a 
critical component of the Patient Protection and Affordable 
Care Act: Medicaid and Medicaid Expansion.
    As the world's largest health program, Medicaid provides 
health care coverage for over 70 million Americans, and 
accounts for more than 15 percent of health care spending in 
the United States.
    In 2015 alone, federal taxpayers spent over $350 billion 
dollars on Medicaid, and the costs continue to rise each year. 
According to the Congressional Budget Office, the federal share 
of Medicaid spending is expected to rise significantly over the 
coming decade, from $371 billion in 2016 to $624 billion in 
2026.
    At a time when Medicaid program costs are skyrocketing, it 
makes sense to ask the question: is Medicaid adequately serving 
our most vulnerable populations?
    Medicaid was originally designed as a safety net to care 
for the health of some of our most vulnerable populations: low-
income children, pregnant women, parents of dependent children, 
the elderly and individuals with disabilities.
    Far too often, however, Medicaid's own rules keep it from 
best serving the families that it was designed to help. These 
restrictions surrounding Medicaid do not allow doctors and 
nurses the flexibility they need to arrive at the best outcome 
for patients. For instance, most Medicaid programs do not use 
physician-focused alternative payment models that can improve 
care and reduce costs.
    And studies show that Medicaid coverage does not 
necessarily result in better health outcomes. One often-cited 
study in Oregon found that Medicaid coverage increases health 
care use and improves self-reported health and mental health 
while having no effect on mortality or physical health.
    Similarly, the National Bureau of Economic Research found 
that Medicaid enrollees obtain only 20 to 40 cents of value for 
each dollar the government spends on their behalf.
    Further, reports by non-partisan watchdogs--two of which 
are here today--show that the Medicaid program remains a target 
for waste, fraud, and abuse. Because of the size and scale of 
the program, improper payments--including payments made for 
people not eligible for Medicaid, or for services that were not 
provided--are extremely high. The Government Accountability 
Office estimates Medicaid paid out over $17 billion in improper 
payments in fiscal year 2014 alone.
    For these reasons, Medicaid has been designated as a ``high 
risk'' program by the GAO for 14 years--since 2003. And despite 
the long-standing problems in the Medicaid program, the Patient 
Protection and Affordable Care Act expanded Medicaid to a whole 
new population. In 32 states, Medicaid benefits have been 
opened up to adults under the age of 65, who make less than 133 
percent of the poverty level.
    Since open enrollment began in October 2013, roughly 11 
million individuals have signed up for Medicaid coverage under 
the new eligibility parameters. This means that the majority of 
individuals covered under Obamacare have enrolled through the 
Medicaid program, instead of purchasing private health 
insurance plans.
    The costs associated with insuring the 11 million new 
Medicaid enrollees have been far more expensive than the Obama 
Administration predicted. A report released by the Department 
of Health and Human Services found that the average cost of 
expansion enrollees was nearly 50 percent higher than 
projected. Medicaid expansion enrollees costs an average of 
$6,366 in fiscal year 2015--which is 49 percent higher than the 
agency predicted the year prior.
    This means that not only are expansion enrollees expensive 
to insure--but the costs are difficult to predict. Further, 
because of the high matching rate, the federal taxpayer is on 
the hook for the vast majority of expenses associated with new 
enrollees.
    Unfortunately, reports show both states and the federal 
government cannot effectively oversee and implement Medicaid 
expansion. The GAO found errors in Medicaid eligibility 
determinations that could lead to misspending of funds. 
Likewise, the Inspector General found troubling evidence that 
the federal government failed to implement requirements in the 
Patient Protection and Affordable Care Act that were supposed 
to improve program integrity and root out waste, fraud, and 
abuse.
    While we all acknowledge there are serious weaknesses and 
deficiencies in how this program operates, we also recognize 
the responsibility of the federal government to provide a 
safety net to the most vulnerable among us. That means ensuring 
that taxpayer dollars are spent in a way that actually improves 
health outcomes and serves the Medicaid beneficiaries in need.
    Tomorrow, the Health Subcommittee will discuss legislative 
solutions to strengthen Medicaid. But as we move forward with 
legislation, we must also be careful not to repeat or worsen 
problems that already exist in the program. As we will hear 
from our witnesses today, we have a lot of work to do.
    I would like to thank our witnesses for appearing today, 
and look forward to an informative discussion.

 OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Ms. DeGette. Thank you very much, Mr. Chairman. It's good 
to be back for another session of Congress.
    We have two new members on our side of the aisle on this 
subcommittee this year, and I am so happy to welcome them. Dr. 
Ruiz is here with us at the end. He's an actual emergency room 
doctor, and he'll be able to bring us so much great perspective 
on issues like this hearing and other hearings.
    And then Scott Peters, who's not here at this moment, I am 
pleased he's here. He and I comprise two-thirds of the NYU law 
graduate delegation to Congress. So I am happy we're loading up 
this committee with NYU law grads.
    I think I'd be deceiving myself if I thought that today's 
hearing was intended to actually strengthen the Medicaid 
program. Although I hope it's not so, I fear that this 
discussion about Medicaid is intended to lay the groundwork for 
drastic cuts to the program and eventually to repeal the 
Affordable Care Act's historic Medicaid expansion. So I'd like 
to talk a few minutes about the importance of this program and 
what Medicaid expansion has accomplished for the American 
people.
    Today, more than 70 million low-income Americans, including 
seniors, children, adults, and people with disabilities, have 
access to quality health care, thanks to Medicaid. And 
contrary, frankly, to what my colleagues on the other side of 
the aisle think, the Medicaid program delivers this care 
efficiently and effectively. The costs per beneficiary are 
actually substantially lower than for private insurance and 
have been growing more slowly per beneficiary.
    Numerous studies have shown that Medicaid has helped make 
millions of Americans healthier by improving access to primary 
and preventative care and by helping Americans manage and treat 
serious disease. In fact, the Medicaid program literally saves 
lives. Research published in the New England Journal of 
Medicine reported that previous expansions of Medicaid coverage 
for low-income adults in Arizona, Maine, and New York actually 
reduced deaths by 6.1 percent. The ACA's historic Medicaid 
expansion has let states build on this record of success and 
provide insurance to millions of Americans who otherwise would 
not have had access to health care.
    Last year--and we need to think about this--more than 12 
million low-income adults had healthcare coverage because of 
the Medicaid expansion. This is astonishing. And combined with 
other important provisions of the ACA, this has helped drive 
the uninsured rate to the lowest level in our country's 
history.
    It's important to note these are not people who shifted 
from private insurance to the Medicaid expansion; this is 
people who had no insurance and were using the emergency rooms 
as their primary care facilities. In Colorado, for example, the 
rate of the uninsured was cut in half since the enactment of 
the ACA and through the expansion of Medicaid.
    Now, aside from the benefits that have accrued to the 
people, Medicaid has actually resulted in tremendous savings 
for the states. Hospitals nationwide have seen their 
uncompensated care burden drop by $10.4 billion since the ACA 
became law. Denver Health Medical Center, which is in my 
district, this week reported to my office that their 
uncompensated care claims actually fell by 30 percent since 
passage of the ACA. This is real savings. And also, we know 
that Medicaid is helping people get access to vital health care 
services.
    I had a listening session last week in Denver about the 
ACA. I had 200 people show up at this listening session. And 
most of the people who told their heartrending stories talked 
about how they were employed, but they couldn't afford private 
insurance. And due to the Medicaid expansion, they now had 
mental health services. They had drug treatment and opioid 
treatment services. They had services for catastrophic 
accidents that they have had, and on and on. It got to the 
point where I literally had to take a packet of Kleenex out of 
my purse and put it on the podium, because everybody, including 
my staff and myself, were in tears listening to these stories. 
This is what the majority wants to take away and this is what 
we're talking about.
    We can all talk about eliminating waste, fraud, and abuse 
in the program. We're all for that, and I would support that 
100 percent. But taking away vital health care for so many 
millions of Americans is wrong, and we must fight against 
taking that important benefit away.
    I yield back.
    Mr. Murphy. The gentlelady yields back.
    And we don't have anybody else on our side of the aisle who 
wants to give an opening statement. I believe Mr. Walden is 
detained in a meeting and he will come back later. Perhaps over 
there.
    Mr. Pallone, do you want to be recognized for 5 minutes?
    The ranking member of the committee, Mr. Pallone, is 
recognized for 5 minutes.

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

    Mr. Pallone. Thank you. Thank you, Mr. Chairman. It's great 
to be back in our room here today. It looks really nice.
    For 7 years now, Congressional Republicans have railed 
against the Affordable Care Act with a steady drumbeat of 
repeal and replace, and for 7 years they have sabotaged 
implementation of the law. And here we are today, Republicans 
are misleading the public, in my opinion, with falsehoods that 
the law is failing, and that could not be further from the 
truth.
    The truth is, after 7 years of claiming they could do 
better, they have no plan to replace the Affordable Care Act. 
The subcommittee should be evaluating the impact that repeal 
would have on the American people and the national healthcare 
system, but instead, Republicans are holding yet another 
hearing to highlight their ongoing opposition to the law's 
Medicaid expansion, despite clear evidence that the expansion 
has made health care affordable and available for the first 
time to 12 million people nationwide.
    Tomorrow and Thursday, the committee is holding hearings on 
what Republicans consider to be the first pieces of the GOP 
healthcare replacement plan. But the fact is that none of these 
bills will prevent 30 million Americans from losing their 
healthcare coverage. None of them will reduce the chaos in the 
healthcare system that will inevitably result if Republicans 
successfully repeal the Affordable Care Act.
    The fact is, Republicans are already creating uncertainty 
and instability in the individual market. This instability will 
ultimately result in reduced consumer choice, higher premiums, 
and will endanger the health and welfare of millions of 
Americans. In other words, the Republican-made chaos in the 
healthcare system has already begun.
    And, of course, we're seeing the same thing with the 
President's immigration executive orders. I just hope that at 
some point our GOP colleagues join us against what I consider 
reckless and rash actions and oppose President Trump's actions.
    Congressional Republicans continue to ask the American 
people to trust them and they have a plan and that somehow 
everything will be OK. They've repeatedly assured the American 
public that no one will lose coverage with a Republican 
replacement plan, a claim that President Trump and his advisers 
also continue to make.
    But recently released audio at a closed-door meeting from 
the Republican retreat last week confirms that they simply have 
no plan. At that meeting, Republicans admitted that repealing 
the Affordable Care Act could eviscerate coverage for the 
roughly 20 million Americans now covered through state and 
Federal marketplaces as well as those covered under the 
Medicaid expansion. In fact, one Republican member at the 
retreat warned, and I quote: ``We'd better be sure that we're 
prepared to live with the market we've created with repeal.''
    So my Republican colleagues are also trying to claim that 
the Affordable Care Act is already collapsing under its own 
weight and that the replacement plan will, ``rescue the 
American people from ObamaCare.'' Republicans are so scared to 
own the chaos they are causing, they're trying to pretend that 
the law is imploding on its own, which could not be further 
from the truth.
    Americans today have better health coverage and health 
care, thanks to the Affordable Care Act. The law's Medicaid 
expansion has helped improve the quality, accessibility, and 
affordability of health care for millions of Americans. And my 
colleagues would be wise to consider the impact that their 
actions will have on the millions of Americans who are 
currently benefitting from the Affordable Care Act.
    If my Republican colleagues finally took their ideological 
blinders off, they would realize that the Affordable Care Act 
should not be repealed. And I say this because I don't really 
care about the ideology. The fact of the matter is that real 
people are going to be harmed if the Affordable Care Act is 
repealed, and I hope that at some point my Republican 
colleagues will admit that and that we can work together to 
improve the healthcare system.
    I yield back.
    Mr. Murphy. The gentleman yields back.
    And we'll move forward now with our witnesses. I want to 
ask unanimous consent, however, that the members' written 
opening statements be introduced into the record. And, without 
objection, the documents will be entered into the record.
    I'd now like to introduce our five witnesses for today's 
hearing.
    First up, we have Ms. Carolyn Yocom, director of health 
care at the U.S. Government Accountability Office.
    Next we welcome Ms. Ann Maxwell, Assistant Inspector 
General in the Office of Evaluation and Inspections in the U.S. 
Department of Health and Human Services, Office of Inspector 
General.
    Next, we want to welcome Mr. Paul Howard, who is a senior 
fellow and director of health policy at the Manhattan 
Institute.
    As well as Mr. Josh Archambault, senior fellow at The 
Foundation for Government Accountability.
    Last, we welcome Mr. Timothy M. Westmoreland, professor 
from practice, and senior scholar in health law at Georgetown 
University Law Center.
    Welcome all of you. Thank you to all our witnesses for 
being here today, providing testimony before the subcommittee. 
I look forward to hearing from you on this important issue.
    Now, you are aware that the committee is holding an 
investigative hearing and when doing so has the practice of 
taking the testimony under oath.
    Do any of you have any objection to testifying under oath?
    Seeing no objections, we'll move forward.
    The chair then advises you are, under the rules of the 
House Rules Committee, entitled to be advised by counsel. Do 
you desire to be advised by counsel during your testimony 
today? Seeing nothing there too.
    In that case, if you'll please rise, raise your right hand, 
I'll swear you in.
    [Witnesses sworn.]
    Mr. Murphy. Seeing all witnesses answered in the 
affirmative, you are now sworn in and under oath, subject to 
the penalties set forth in Title 18, Section 1001 of the United 
States Code.
    We're going to call upon you each to give a 5-minute 
summary of your statement.
    I don't know if they'll light up in this room yet. Is there 
some lights down there that will go on for them when they are--
we'll see. Is there something right in front of you? Green 
means keep talking; yellow means finish up; and then red means 
stop. So we want you to keep on time.
    So Ms. Yocom, you may begin. You are recognized for 5 
minutes.

  TESTIMONY OF CAROLYN L. YOCOM, DIRECTOR, HEALTH CARE, U.S. 
   GOVERNMENT ACCOUNTABILITY OFFICE; ANN MAXWELL, ASSISTANT 
INSPECTOR GENERAL, OFFICE OF EVALUATION AND INSPECTIONS, OFFICE 
OF INSPECTOR GENERAL, DEPARTMENT OF HEALTH AND HUMAN SERVICES; 
   PAUL HOWARD, SENIOR FELLOW, DIRECTOR, HEALTH POLICY, THE 
MANHATTAN INSTITUTE; JOSH ARCHAMBAULT, MPP, SENIOR FELLOW, THE 
   FOUNDATION FOR GOVERNMENT ACCOUNTABILITY; AND TIMOTHY M. 
WESTMORELAND, J.D., PROFESSOR FROM PRACTICE, SENIOR SCHOLAR IN 
          HEALTH LAW, GEORGETOWN UNIVERSITY LAW CENTER

                 TESTIMONY OF CAROLYN L. YOCOM

    Ms. Yocom. Chairman Murphy, Ranking Member DeGette, and 
members of the subcommittee, it is a pleasure to be here today 
to discuss actions needed to prevent improper payments in 
Medicaid.
    Medicaid finances health care for a diverse population, 
including children, adults, people who are elderly, or those 
with disabilities. It also offers a comprehensive set of acute 
and long-term healthcare services.
    Medicaid is one of the largest programs in the Federal 
budget and one of the largest components of State budgets as 
well. In fiscal year 2016, Medicaid covered about 70 million 
people, and Federal expenditures were projected to total about 
$363 billion. Unfortunately, over 10 percent of these 
expenditures, over $36 billion, are estimated to be improper, 
that is, made for treatments or services that were not covered 
by the program, were not medically necessary, or were never 
provided.
    The program's size and diversity make it particularly 
vulnerable to improper payments. By design, Medicaid is a 
Federal-State partnership, and states are the first line of 
defense against improper payments. The states have 
responsibility for screening providers, detecting and 
recovering overpayments, and referring suspected cases of fraud 
and abuse. At the Federal level, CMS supports and oversees 
state and program integrity efforts.
    In 2010, the Patient Protection and Affordable Care Act 
gave CMS and States additional provider and program integrity 
oversight tools. The act also provided millions of low-income 
Americans new options for obtaining health insurance coverage 
through possible expansions of Medicaid or through an exchange, 
a marketplace where eligible individuals may compare and 
purchase health insurance.
    My statement today focuses on four key Medicaid program 
integrity issues that we have identified, steps CMS has taken, 
and the related challenges that the agency and States continue 
to face.
    First, with regard to ensuring that only eligible 
individuals are enrolled in Medicaid, CMS has taken a variety 
of steps to make the Medicaid process more data-driven, yet 
gaps exist in their efforts to ensure the accuracy of Federal 
and State enrollment efforts, including enrollment for those 
who are eligible as a result of the expansion.
    As one example, we found that Federal and selected state-
based marketplaces approved Federal health insurance coverage 
and subsidies for 9 of 12 fictitious applications made during 
the 2016 special enrollment period.
    Second, efforts to improve oversight of Medicaid managed 
care. CMS has provided states with more guidance on methods of 
identifying improper payments made to providers and has acted 
in response to our recommendations on requirements for states 
to audit managed care organizations and providing States with 
additional audit support, but further actions are needed. In 
particular, encounter data, which allow states and CMS to track 
services received by beneficiaries that are enrolled in managed 
care, are not always available, timely, or reliable.
    Third, CMS has taken steps to strengthen the screening of 
providers. There are new risk-based initiatives for overseeing 
provider checks. And these are important steps, but there are 
additional challenges that remain to ensure that the databases 
check eligibility and that states can share information with 
each other on providers who are ineligible for coverage.
    Lastly, CMS has implemented a number of policies and 
procedures aimed at minimizing duplicate coverage between 
Medicaid and the exchanges. Our work did identify some 
duplicate coverage; and since our report, CMS has started 
conducting checks on duplicate coverage and intends to perform 
these checks at least two times per coverage year. This could 
save Federal and beneficiary dollars, but CMS needs to develop 
this plan a little more broadly and make sure that they are 
assessing the sufficiency of these checks.
    In closing, Medicaid is an important source of health care 
for tens of millions of Americans. Its long-term sustainability 
is critical and requires effective Federal and state oversight.
    Chairman Murphy, Ranking Member DeGette, and members of the 
committee, this concludes my prepared statement. I'd be pleased 
to respond to questions.
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    Mr. Murphy. Thank you, Ms. Yocom. Now, Ms. Maxwell, you are 
recognized for 5 minutes.

                    TESTIMONY OF ANN MAXWELL

    Ms. Maxwell. Thank you. Good morning, Chairman Murphy, 
Ranking Member DeGette, and other distinguished members of the 
subcommittee. Thank you for the opportunity to appear before 
you today to discuss how to protect taxpayers and Medicaid 
patients from fraud, waste, and abuse.
    I first want to give you a sense of what Medicaid fraud 
looks like. It can be very complex and include very different 
kinds of schemes. For example, in one instance, we indicted the 
owners of a network of over 30 nursing homes and assisted 
living facilities that billed for services that patients didn't 
need. In another example, we convicted a doctor for writing 
fake prescriptions for expensive drugs that were then sold on 
the black market or billed to Medicaid. It is exactly these 
type of schemes that highlight the need to protect Medicaid 
against unscrupulous providers who steal, at the expense of 
taxpayers, and put patients at risk.
    Today, I want to highlight actions that we can take to 
better protect Medicaid from these types of fraud schemes and 
other vulnerabilities facing Medicaid. State Medicaid agencies 
and the Centers for Medicare and Medicaid, known as CMS, share 
responsibility for funding as well as protecting Medicaid. And 
we recommend they focus on three straightforward program 
integrity principles: Prevent, detect, and enforce.
    First and foremost, CMS and states must prevent fraud, 
waste, and abuse. Focusing on prevention is critical and 
commonsense, but Medicaid programs sometimes fall short and end 
up chasing after providers to remove them from the program or 
to recover overpayments.
    State Medicaid agencies should know who they are doing 
business with before they give them the green light to start 
billing. To help with that, we recommend that states fully 
implement criminal background checks, conduct site visits, and 
collect accurate data about providers.
    In addition, to prevent incorrectly paying providers, we 
recommend that states learn from past administrative errors and 
proactively update their systems to prevent improper payments. 
Medicaid should only be paying the right amount for the right 
service.
    The next critical program integrity safeguard is the 
ability to detect fraud, waste, and abuse in a timely manner. 
Accurate data is an essential tool for doing this. However, as 
we've just heard and our work shows, national Medicaid data, 
including data from managed care companies, has deficiencies. 
Sophisticated data analytics exist to detect potential fraud, 
to detect patient harm, and even to target oversight, but they 
are ineffective without accurate and timely data.
    Further, without national Medicaid data, States cannot see 
the whole picture. For example, we found providers enrolled in 
one State Medicaid program that had been terminated by another 
state. But without shared data, States had no way of knowing 
this and had to find out the hard way that they had enrolled 
fraudulent and abusive providers.
    Finally, it's imperative to take swift and appropriate 
enforcement action to correct problems as well as to prevent 
future harm.
    Federal and State enforcement efforts have very high return 
on investment, yielding annual recoveries in the billions of 
dollars and imposing criminal penalties on thousands of 
wrongdoers each year. However, states face challenges in taking 
full advantage of their administrative authorities, including 
suspending provider payments and terminating providers, where 
appropriate.
    In addition, State Medicaid Fraud Control Units lack a key 
authority. Currently, these state units can investigate 
allegations of patient abuse that occur within institutions, 
but if that alleged abuse took place in a patient's home or a 
different community setting, they cannot. Medicaid patients 
receiving services in their home should have as many 
protections as those in institutions.
    In closing, our work reveals a number of opportunities to 
improve Medicaid safeguards. In particular, a heightened focus 
on the program integrity principles of prevention, detection, 
and enforcement will help protect Medicaid now and as it 
evolves. Prioritizing program integrity will ensure that 
Medicaid funds are used as intended, to provide needed 
healthcare services and long-term nursing home care for those 
who are in the most need.
    We appreciate the committee's attention to Medicaid program 
integrity. We've seen it strengthened in the last year, thanks 
to the efforts here in Congress, and we hope that our work will 
continue to be a catalyst for continued positive change. Thank 
you.
    [The prepared statement of Ms. Maxwell follows:]
    
    
    
    
    
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    Mr. Murphy. Thank you, Ms. Maxwell.
    Now, Mr. Howard, you are recognized for 5 minutes.

                    TESTIMONY OF PAUL HOWARD

    Mr. Howard. Thank you. Thank you, Chairman Murphy, Ranking 
Member DeGette, members of the committee. I'd like to thank you 
for the opportunity to testify today about Medicaid program 
oversight and ways we might strengthen the program.
    Medicaid is undoubtedly a vital component of the Nation's 
safety net for low-income and vulnerable populations. But an 
open-ended, automatic Federal matching formula has had vast 
unintended fiscal consequences, both for the States and the 
Federal Government, often crowding out funding for other safety 
net services and supports that might have a bigger impact on 
the measured health of these populations and their prospects 
for continued economic mobility.
    As you know, Medicaid is a hybrid program that, on average, 
pays approximately 62 percent through its Federal match, 
although the upper limit is around 80 and the lowest match is 
50 percent. This encourages States to maximize the drawdown of 
Federal dollars through a number of, sometimes legally 
questionable, funding designs that my colleagues at GAO and HHS 
OIG have just mentioned. This Byzantine funding structure makes 
it extraordinarily difficult for the Federal Government to 
oversee effectively program integrity. It also encourages 
wealthier States to spend more on their programs to draw down 
more Federal dollars. In a 2010 book, Mark Pauly and John 
Grannemann highlighted that the highest quintile of States by 
income spent 90 percent more than the lowest quintile of 
States.
    When it comes to waste, fraud, and abuse, we see New York 
State, which has historically spent much more than other 
states. Even though it has only 6 percent of the Nation's 
population, it has spent approximately 11 percent of total 
Medicaid expenditures and spends 44 percent more per enrollee. 
The OIG also found that over a period of 20 years, the state 
had an improper payment rate for its state developmental 
centers, which the state was overpaid by $15 billion, simply 
because a payment structure that the state and the Federal 
Government agreed to in 1990 was never updated to reflect the 
fact that the state had, in fact, moved the disabled out of the 
developmental centers and into community supports. To the 
state's credit, Governor Cuomo in 2011 created a Medicaid 
redesign team that began to address the program and began first 
by conceding that the program delivered poor value for 
beneficiaries and taxpayers.
    Since then, through a number of far-reaching highly 
aggressive reforms, including capping most of the state's state 
spending outside of the disabled population, lowering that 
spending from 6.2 percent to 4 percent, the state has saved 
hundreds of millions of dollars, shifted an emphasis from 
institutional care to community care, and begun to address some 
of the behavioral components of poor helth that leave these 
populations using disproportionately emergency rooms.
    The right way to view our healthcare dollars is not to say 
that Medicaid has per-unit costs that are very low and, thus, 
it's more efficient. The better question to ask is, are dollars 
that we're automatically spending on Medicaid, might they be 
better purposed to other programs, either an expanded state 
income earned tax credit, supportive housing for the seriously 
mental ill, or any other support or service that might have a 
bigger impact on improving measured health outcomes.
    My colleague Oren Cass last year put out a very important 
study that noted from the period of 1975 to 2012, our spending 
on low-income supports had doubled, but that 90 percent of the 
increase had gone to health care. He estimated that if our 
median spending, either by enrollment or per enrollee, was 
nationalized, we could save as much as $100 billion annually, 
and that is money that could be placed elsewhere in other 
support programs.
    In short, we have thickened one strand of our safety net 
for low-income Americans while neglecting others. If the safety 
net feels threadbare in places, it's because we have encouraged 
the states to overspend on health care. What I'm not saying is 
that Medicaid has no value. There is clear research that shows 
that Medicaid has an extraordinary rate of return on 
investments in maternal health and child health.
    But large rigorous, randomized, controlled experiments like 
the Oregon experiment have, as the chairman said, showed no 
increase in measured health outcomes. Other studies continue to 
show that the social determinants of health have a much bigger 
impact on mortality, obesity, asthma, and mortality from 
cancers like lung cancer, than simply spending more money on 
health insurance per se.
    I'd like to suggest just a few ways we could address this 
disparity in conclusion. We should agree on broader safety net 
goals that hold the states responsible for meeting them in ways 
that are transparent both to the states and the Federal 
Government.
    We should reform the financing incentives of the program to 
ensure that we're not incentivizing states to automatically 
funnel additional Federal dollars to health care. They might 
choose to do so, but we shouldn't effectively bribe them to do 
so.
    And finally, CMS should continue to give more leeway to the 
states in programming, designing, and spending Medicaid 
dollars, including on nonhealth supports.
    I believe that these reforms would serve both conservative 
and liberal ends and should be the focus of the 115th Congress. 
Thank you very much.
    [The prepared statement of Mr. Howard follows:]
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    Mr. Murphy. Thank you, Mr. Howard.
    Mr. Archambault, you are recognized for 5 minutes.

                 TESTIMONY OF JOSH ARCHAMBAULT

    Mr. Archambault. Chairman Murphy, Ranking Member DeGette, 
and members of the committee, my name is Josh Archambault and I 
work at the Foundation For Government Accountability, a think 
tank that is active in 37 States, specializing in health and 
welfare reform.
    This morning, I'd like to highlight how the ACA's Medicaid 
expansion has worsened problems for the truly needy, and I'd 
like to start with a video.
    [Video played.]
    Mr. Archambault. Sadly, Skyler's story represents just one 
of nearly 600,000 individuals currently sitting on waiting 
lists for Medicaid services. Individuals with developmental 
disabilities, traumatic brain injuries, and mental health 
disorders who are less likely to receive the needed care now 
that Medicaid has been expanded.
    The ACA expanded Medicaid to a brand new population, which 
consists largely of childless, able-bodied adults who are 
working age, and have only dimmed the hopes further for 
families like Skyler.
    But the problems go much farther beyond situations like 
hers. The Governor of Arkansas, due to expansion costs, has 
proposed nearly a billion dollars in cuts to traditional 
Medicaid, primarily from patients with expensive medical needs, 
the developmentally disabled, and the mentally ill is what he 
said.
    So why is this happening around the country? The new 
ObamaCare expansion population is awarded a higher match rate. 
This funding formula has pernicious unintended consequences. 
Let me explain it this way: If a state needs to balance its 
budget, which they all do need to every year, state officials 
have to turn to Medicaid, because it's the biggest line item, 
also growing faster than revenue. If you want to save one state 
dollar in state funds, on average, you need to cut just over $2 
from the traditional Medicaid population, the aged, the blind, 
the disabled, pregnant women, and children. But if they want to 
save that same $1 in state funds for the expansion population, 
this year they need to cut $20. I know you all can guess who 
faces cuts first, and it's heartbreaking.
    Over enrollment under ObamaCare's Medicaid expansion will 
encourage states into even deeper cuts. Data from 24 of the 
expansion states show that enrollment has been over by 110 
percent on average, more than double initial estimates. The 
cost overruns have been significant. Just to name a few, 
California found themselves 222 percent over budget; Ohio, $4.7 
billion or 87 percent over budget. These enrollment and budget 
trends mean fewer resources for the truly needy.
    Now, history could have warned us of this. Arizona and 
Maine both expanded Medicaid to the same able-bodied childless 
adult population before the ACA, and both had to take measures 
to rein in costs. Arizona had to stop a number of organ 
transplants. Maine capped enrollment, created wait lists. This 
happened even without the lopsided extra funds that follow 
expansion enrollees, which brings me to my last point, concerns 
over eligibility issues.
    FGA's work around the country has found deep systemic 
problems. First, states need to be checking eligibility far 
more frequently; and second, states need to be checking more 
data when they check eligibility. Life changes such as moving 
out of state, getting a raise, or death are going unnoticed for 
far too long, and meanwhile, states continue to cut checks to 
managed care companies for cases that no longer qualify for the 
program.
    My written testimony highlights a couple of those states 
that have had bipartisan success in tackling this waste and 
fraud, but much more is needed. Thank you.
    [The prepared statement of Mr. Archambault follows:]
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    Mr. Murphy. Thank you.
    I now recognize Mr. Westmoreland for 5 minutes.

              TESTIMONY OF TIMOTHY M. WESTMORELAND

    Mr. Westmoreland. Mr. Murphy, Ms. DeGette, and members of 
the committee--subcommittee, thank you for the invitation to 
speak today.
    I take a backseat to no one on program integrity issues in 
the Medicaid program. People who care about Federal programs 
have to work to ensure that Federal funds are well used. 
Program integrity problems are, however, not new. Military 
contractors cheated the Union Army during the Civil War. Where 
money is being spent, whether it be private, State, or Federal, 
and no matter how good the cause, there are bad actors trying 
to steal it.
    Program integrity efforts are especially important in 
Medicaid. This is because billions of dollars are at stake, as 
are the health and well-being of most vulnerable people in 
America. This importance is well illustrated by the fact that 
at the same time the ACA expanded Medicaid coverage, it also 
made significant improvements in program integrity efforts.
    But as important as combatting fraud and abuse in Medicaid 
is, policymakers should keep it in perspective. As big as they 
are, the numbers must be viewed as what they are and as a 
whole.
    First, we should be careful about our terms. Not all of 
what is labeled improper payments, in the vernacular, is fraud 
or even mistaken. Most are appropriate, but simply badly 
documented, and may even be underpayments. And the actual loss 
to the government is much smaller than it may appear. The OIG 
and the GAO footnotes in my testimony cite to this terminology.
    But, as the prepared statements of GAO and OIG witnesses at 
today's hearing have outlined, HHS has already implemented many 
efforts to address the more serious problems of program 
integrity. Some of these efforts are longstanding and some of 
them are just underway, but there are many efforts focused on 
making sure that Medicaid is spending its money well, and they 
are having an effect.
    But I am especially concerned today that policymakers often 
respond to waste, fraud, and abuse with blunt instruments aimed 
at the wrong targets. Any review of the actual Medicaid program 
dollars that were stolen or misspent will reveal that the major 
culprits are unscrupulous providers. Pharmaceutical companies 
that price gouge, equipment suppliers that don't deliver, and 
Medicaid mills of doctors, dentists, and clinics that provide 
unnecessary services if they provide services at all. But all 
too frequently, the political and legislative response is to 
institute cuts or restrictions on beneficiaries and the 
providers who actually care for them.
    There is simply nothing in the recent reviews of program 
integrity that justify the policy proposals that are now on the 
table and before this committee. Reduced/capped Federal funding 
does nothing to improve program integrity, but it does put 
coverage at risk for low-income Americans and shifts the cost 
for the most expensive services to States, localities, 
providers, and charities. This is wrong.
    Program integrity problems are meaningful only when they 
are considered in the context of the many successes of the 
Medicaid program. For example, the Medicaid expansion of the 
ACA means that 11 million people have Medicaid coverage who did 
not have it 3 years ago. The percentage of people without 
insurance in America is at an all-time low of 8.9 percent. The 
burden of uninsured care in hospitals in expansion states is 
down 39 percent, and costs to those states are commensurately 
lower.
    Rural hospitals in expansion states are at half the risk of 
closure of those in nonexpansion states. Community health 
centers are seeing 40 percent more patients. People with 
serious mental illnesses are 30 percent more likely to receive 
services in the expansion states. Services for opioid addiction 
are available to working-age adults, often for the first time.
    The Medicaid expansion of the ACA has fundamentally 
repaired a longstanding mistake in the program. People always 
had to fit into some sort of category, but this categorical 
eligibility has never made sense. Poor women need health 
insurance both before and after they have babies. Poor children 
keep needing health insurance even when they turn 19. Poor 
people with chronic illnesses need health insurance before they 
become disabled. Poor older adults need health insurance when 
they are 64, not suddenly when they are 65.
    The real problems here are poverty and uninsurance. In the 
32 states that have adopted the Medicaid expansion, where 
making this part of the insurance system finally make sense, 
and be fair for vulnerable people. Please do not turn back this 
response.
    Lincoln did not give up on the Civil War because the 
government was sold bad mules. We do not stop buying drugs 
because drugmakers charge fraudulent prices. We punish the 
wrongdoers, correct the price, and get the treatment to the 
people in need. That is what should be done here. Don't reverse 
all this progress by rationalizing that program integrity 
problems demand wholesale legislative changes in Medicaid. 
There are real babies in that bath water.
    Thank you.
    [The prepared statement of Mr. Westmoreland follows:]
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    Mr. Murphy. Thank you.
    I now recognize myself for 5 minutes of questioning.
    Ms. Yocom, your October 2015 report found gaps that limit 
CMS's ability to check for different eligibility groups. Newly 
eligible under expansion--the newly eligible under expansion 
and previously eligible are appropriately matched with Federal 
funds.
    Now, in the Federal facilitated exchange states, CMS will 
not be able to assess the accuracy of eligibility 
determinations until 2018. Does this create the potential for 
improper payments then?
    Ms. Yocom. Well, it certainly creates a lot of uncertainty 
about what is going on with eligibility and whether progress is 
being made. The decision to suspend the estimate of eligibility 
was based on trying to give States time to understand the new 
rules and the new range of matching rates that could be 
applied.
    From our perspective, though, transparency of the process 
and how it is proceeding would not be a bad thing. It would be 
good to know what's going on.
    Mr. Murphy. OK, thank you. In States that determine 
eligibility, GAO found that eight out of the nine States 
audited identified eligibility determination errors and 
improper payments associated with those errors. Are those 
errors reflected in the CMS eligibility determination error 
rate, and does CMS correct these errors, and why or why not?
    Ms. Yocom. Right now, they are not reflected in the 
eligibility rate estimates that CMS puts out. Instead, there is 
a rate that was produced a couple of years ago of 3.1 percent, 
and that's being applied until 2018.
    Mr. Murphy. Why is it applied until 2018?
    Ms. Yocom. I'm not sure of the reasoning for that year. I 
think time, I guess.
    Mr. Murphy. Was that an accurate number? You said that 1 
percent. Is that an accurate number that's being applied?
    Ms. Yocom. It's a number I believe that goes back to 2013 
or 2014.
    Mr. Murphy. Just continuing that on. So this relates to my 
next question. I've heard that CMS has put a freeze on 
measuring eligibility determinations for Medicaid. What does 
this freeze mean, and how will we will measure eligibility 
errors and improper payments?
    Ms. Yocom. It means that we're relying on an error rate 
that's about 3 or 4 years old, yes, and that we don't right now 
know what's going on with the eligibility determinations.
    Mr. Murphy. So we're using old data that's not accurate 
anymore. We're asking a question, what's the error rate? You're 
saying, we don't know, so we're going to use a number from a 
few years ago?
    Ms. Yocom. That is correct.
    Mr. Murphy. OK. Now, so if a parent asks their child, how 
did you do on your report card, and they say, got all As, it 
could be accurate, except if you're maybe dealing with a high 
school senior that you didn't ask specifically and say, I'm 
just assuming the grades I got in third grade, I'm just 
continuing to carry those over year to year, so I'm a 
valedictorian. Now, that doesn't make sense, of course, but 
you're saying the same thing applies here?
    Ms. Yocom. Yes. Right now, they are not publishing or I 
believe even calculating an improper payment rate right now. 
They are working with the states on a state-by-state basis.
    Mr. Murphy. So when people make a statement everything is 
fine, these are staying pretty stable, we just have inaccurate 
data we're working with. See, we want to fix this, but we don't 
have accurate data to help us know how big the problem is. Is 
that correct?
    Ms. Yocom. At this point, we don't know.
    Mr. Murphy. OK. Mr. Archambault, since we can't measure the 
actual eligibility improper payments due to this freeze that's 
been imposed in the past administration, let's try and get an 
idea of the types of eligibility errors and how much they cost 
the Federal Government.
    Do you have any examples from your work of improper 
eligibility determinations and how that translates to improper 
spending?
    Mr. Archambault. Sure. There's a couple of states that I 
highlight in my written testimony.
    In Illinois, in 2012, they passed a law to hire an outside 
third-party vendor to look at eligibility errors. And their 
track record has actually been quite impressive. In their first 
year, they found about 300,000 individuals who are ineligible 
for Medicaid; and in their second year, they actually found 
400,000 individuals who were ineligible for their program.
    And it runs the gamut from individuals who had passed away 
in the 1980s who were still on their program to individuals who 
were simply moving out of state, got a raise, didn't report 
that information. The State of Arkansas recently also did a 
review of their Medicaid program and found things like 43,000 
individuals who didn't live in the state who remained on their 
Medicaid program, 7,000 of who had never lived in the state.
    Mr. Murphy. Are those people who are making Medicaid 
claims, do we know?
    Mr. Archambault. So in many cases, this is why it's so 
important. As states have moved towards the managed care 
environment, it almost doesn't matter. States continue to cut a 
check to managed care companies regardless of whether those 
individuals are showing up to the doctor or not. That's why 
this is even more important now that states have moved in that 
direction.
    Mr. Murphy. So it's hundreds of thousands of people are in 
this category that they're still getting paid even though 
they're not alive, in the state, or getting care.
    Mr. Archambault. Correct. In some cases, it's just waste. 
If somebody moves and is still Medicaid eligible, we just want 
to make sure two States aren't paying two different managed 
care companies for their care. In other cases, it's outright 
fraud.
    Mr. Murphy. Do we have a total dollar value for that?
    Mr. Archambault. When you're not measuring, it's very hard 
to see. But I will say that my written testimony goes through 
and documents a number of State audits that show eligibility is 
a huge issue when it comes to applications.
    Mr. Murphy. Thank you. My time is expired.
    Ms. DeGette, 5 minutes.
    Ms. DeGette. Thank you, Mr. Chairman.
    Ms. Maxwell, you talked about the complex investigations 
that your agency is undertaking into some of these Medicaid 
fraud issues. These investigations involve large numbers of 
personnel and also technical support. Is that right? They're 
complex investigations, correct?
    Ms. Maxwell. Absolutely. We partner with the State Medicaid 
fraud control units.
    Ms. DeGette. And do you know approximately how many people 
at your agency are involved in these investigations?
    Ms. Maxwell. Well, in some respects, we all are. So even 
though the Inspector General has a cadre of inspectors, we're 
also auditors, evaluators, lawyers, and all of us contribute to 
the fraud-fighting efforts of the Inspector General's Office.
    Ms. DeGette. OK. Are you familiar with the executive order 
that President Trump issued on January 22nd, in which he said 
that, ``No vacant positions existing at noon on January 22nd, 
2017, may be filled and no new positions may be created except 
in limited circumstances''?
    Ms. Maxwell. I am familiar with that.
    Ms. DeGette. Has your agency determined will that freeze 
the hiring at your agency?
    Ms. Maxwell. Given that it's quite new, there hasn't been 
an assessment yet of how that will affect the OIG, but I can 
tell you, as you have pointed out, that the work that we do 
does rely on personnel. We use sophisticated data analytics.
    Ms. DeGette. Let me stop you then. If the personnel at your 
agency, the hiring was frozen, what would that do to your 
ongoing fraud investigations?
    Ms. Maxwell. We would need to double down and do as much as 
we could with the resources that we have.
    Ms. DeGette. Would it impact those investigations?
    Ms. Maxwell. Absolutely. We need the personnel to analyze 
the data in order to fight fraud most effectively.
    Ms. DeGette. Thank you.
    Now, I wanted to ask you a quick question, Mr. Archambault, 
and the question I wanted to ask you, you showed that really 
heartrending tape about the young girl who was on a waiting 
list for quite some length of time for the care she needed. She 
was in Arkansas, is that correct?
    Mr. Archambault. Correct.
    Ms. DeGette. And the Governors of the States decide whether 
they are going to use that money for cases like that or 
others--they decide how they're going to use the Medicaid money 
that comes to their states. Isn't that correct?
    Mr. Archambault. Within limits.
    Ms. DeGette. Yes.
    Mr. Archambault. The Federal Government sets the guidelines 
by which they have to----
    Ms. DeGette. But the Governor of Arkansas decided where 
that money would be spent and decided not to put it into that 
kind of a program. Is that right?
    Mr. Archambault. Again, the question and point that I am 
trying to make----
    Ms. DeGette. No. My question is yes or no.
    Mr. Archambault. As far as the wait list is concerned?
    Ms. DeGette. The Governor decided how to allocate that 
money. Is that correct?
    Mr. Archambault. They have funds that come in, and they can 
decide to invest in buying down a wait list.
    Ms. DeGette. And that's the Governor that decides that.
    Mr. Archambault. In a nonexpansion state, we have seen 
states buy down their wait list.
    Ms. DeGette. OK, thank you very much. Yes or no would have 
worked.
    I want to ask you, Mr. Westmoreland, a couple questions. 
Now, uncompensated care costs are what hospitals pay for 
patients that cannot pay their bills. Is that correct?
    Mr. Westmoreland. Yes.
    Ms. DeGette. Who bears the cost of uncompensated care?
    Mr. Westmoreland. It's a complicated question, but the 
direct costs are usually borne by state and municipal 
governments, because they pay for public general hospitals.
    Ms. DeGette. And then where do they get their money from?
    Mr. Westmoreland. By and large, they get their money from 
taxpayers.
    Ms. DeGette. OK. Now, I talked in my opening statement 
about how the ACA Medicaid expansion is driving uncompensated 
care costs lower. Can you briefly explain why that's correct?
    Mr. Westmoreland. Yes. If a hospital is dealing with people 
who have no source of insurance, it, by and large, can provide 
the services and then chase them down. And people oftentimes 
have no money or declare bankruptcy.
    In the instance in which they are insured, either through 
the exchanges or through the Medicaid program, then the 
hospital can turn to a third-party payer and they are no longer 
uncompensated care if they can get some payment from those 
insurances or from Medicaid.
    Ms. DeGette. OK. Now, some of the States that did not 
expand the Medicaid component of the ACA have not experienced 
as large a reduction in uncompensated care costs. Is that 
correct?
    Mr. Westmoreland. Yes.
    Ms. DeGette. And why is that?
    Mr. Westmoreland. Those states are still dealing with the 
same number of people without health insurance who are low 
income. The states who have expanded have a source to turn to, 
their Medicaid program, which is in the Medicaid expansion 
situation, largely paid for by the Federal Government.
    Ms. DeGette. Great.
    Thank you. I yield back.
    Mr. Murphy. The gentlelady yields back.
    I now recognize Mr. Barton for 5 minutes.
    Mr. Barton. Well thank you, Mr. Chairman. I am glad to be a 
part of the first oversight hearing. I'm glad we have some new 
blood on the subcommittee. We have a new doctor on the 
Democratic side. I'm glad to have him. We have Dr. Burgess on 
our side. So when the bloodletting begins, we'll have two 
doctors that can take care of us and keep us going.
    I want to focus the panel's attention on a few numbers. The 
first number is 20 trillion. The second number is 325 million. 
Our national debt is about $20 trillion, give or take a 
trillion or two. We have around 325 million Americans. If you 
divide 325 million into 20 trillion, you get about 66, 67 
thousand dollars that every American owes of the national debt.
    Our hearing memo says there's 70 million people that are 
covered by Medicaid. You subtract the 70 million people covered 
by Medicaid from 325 million citizens, it means there are 250 
million Americans that owe not only their share of the national 
debt but also the $66,000, $67,000 times 70 million that the 
Medicaid recipients owe, because, by definition, Medicaid 
recipients are below the poverty level and they can't pay it 
back.
    Those are big numbers. We're spending at the Federal level 
about $350 billion a year, and the states are adding another 
$150 billion. So we're spending about $500 billion a year to 
provide health care for low-income Americans. That may or may 
not be sustainable, but we know that we can't sustain adding 
half a trillion to a trillion dollars every year to the 
national debt.
    We all want to keep Medicaid, but we want to improve it, 
and that's what this oversight subcommittee is looking at. How 
do we improve Medicaid so that we get more bang for the buck, 
real health care to real people that need it, and yet make it 
affordable so that taxpayers who are funding it can continue to 
fund it.
    Mr. Howard, you talked about, in your opening statement, a 
little bit about New York, with 6 percent of the population, 
getting 11 percent of the Medicaid dollars. Do you want to 
explain to the subcommittee why that's so or would you like for 
me to explain it?
    Mr. Howard. Thank you, Congressman.
    There is clearly an incentive, given the open-ended Federal 
match, for wealthier states, both because of ideology and 
simply because they have a larger tax base, to draw down more 
Federal dollars. It also inhibits attempts to pursue program 
efficiency.
    When you think of a state like New York, let's say New York 
wanted to design a more efficient primary care program that 
saved a million dollars. Because of the 50 percent Federal 
match, it would have to cut spending by $2 million. So there's 
a ratchet inherent in the open-ended Federal match that tends 
to bid up state spending for the states that have the funds to 
do it, but makes it very hard to turn the ratchet around and 
correct it and find more efficient ways to deliver care. And I 
think that's a challenge facing the Nation, not just, of 
course, for Medicaid, but for private insurance and Medicare as 
well.
    In an environment where there is no incentive for providers 
to look outside the box, new ways to deliver care more 
efficiently, more cost-effectively, they simply don't pursue 
those areas.
    I think some of the changes that Governor Cuomo has 
instituted in New York, if they were done by a Republican 
administration, I think we would have heard howls of outrage; 
but because it is a Democratic administration, you capped 
spending, you ended automatic payment increases. You did a lot 
of things that are very ``progressive,'' but are really 
nonpartisan ways to improve program efficiency. And I think 
that other states and the Federal Government should look at 
ways to give states more program efficiency and better 
incentives.
    Mr. Barton. Do you think it would be appropriate to look at 
the way the formula allocates Medicaid dollars per se to try to 
harmonize it with current low-income populations across the 
Nation?
    Mr. Howard. I think that's an important tool. I think 
states would also really appreciate the opportunity to be able 
to spend Medicaid dollars on non-health-related supports that 
might actually--in terms of accessing other services--that 
might make those populations both more compliant with care and 
in better health in the long term. I think they would be very 
open to that.
    Mr. Barton. My time is about to expire. I'm going to have 
some questions for the record dealing with block-granting 
programs back to the states.
    I do want to welcome Mr. Westmoreland back to the 
committee. Nobody yet has admitted it, but at one point in 
time, he was one of the brain trusts on the minority side and 
helped Mr. Waxman and Mr. Dingell actually create the 
Affordable Care Act. And we appreciate your expertise coming 
back before the committee.
    Mr. Westmoreland. It's nice to be back in 2123.
    Mr. Barton. I yield back, Mr. Chairman.
    Mr. Murphy. We now recognize Mr. Pallone for 5 minutes.
    Mr. Pallone. Thank you, Mr. Chairman.
    My questions are to Mr. Westmoreland. Mr. Westmoreland, Mr. 
Archambault made some claims illustrated with a video regarding 
one individual's experience specifically with the Arkansas 
Medicaid program's home and community-based services waiting 
list. And I'm concerned that Mr. Archambault in his testimony 
attributed a causal relationship between Medicaid expansion and 
HCBS waiting lists and that somehow the Medicaid expansion he 
claims exacerbates or causes these waiting lists. I don't 
believe that to be true. I don't think that the facts show that 
it's true. I think the wait lists are a result of state 
decisions, and cutting or capping or block-granting Medicaid 
will only make the situation worse.
    And I like to use anecdotes. I remember a couple years ago 
I went to a conference in Houston with Mr. Green. I think Mr. 
Burgess was there too. And in between the health conference, I 
went over to the Texas Children's Hospital at the Medical 
Center, and I talked to the officials there. It was a beautiful 
place with this beautiful lobby, but literally people, 
particularly mothers with their children, were just literally 
camped out in the lobby of this place that looked like a hotel. 
And I asked, why are they all here? It was because they 
couldn't access the emergency room because there were so many 
people that they were literally waiting for hours to use the 
emergency room with their kids. So this notion that somehow the 
Medicaid expansion is causing the waiting list--I think it's 
just the opposite. I think that it's the lack of Medicaid 
expansion in these states that's causing the problems in most 
situations.
    In any case, let me just ask you some questions, Mr. 
Westmoreland. Can you provide some background on the HCBS 
waivers in the Medicaid program? Isn't it true that the 
decision to have an HCBS waiting list is a state flexibility; 
that is, they are a direct result of state choices on the 
design of their Medicaid programs and the amount of resources 
states make available to provide HCBS?
    Mr. Westmoreland. Yes. There's no restriction at the 
Federal level on how much a state may turn to HCBS instead of 
to traditional institutional services. It's a state decision.
    Mr. Pallone. So, if I can just summarize, states decide 
whether to limit their HCBS waivers to a defined number of 
slots and to create waiting lists once those slots are filled, 
and CMS allows states to increase or decrease the number of 
slots as they wish. And isn't it actually true that, in the 
case of Arkansas, the Federal Government would be willing to 
pay 69 percent of the cost of care if the state chose to 
increase the number of its slots and that, until January 1 of 
this year, the state was spending none of its own funds on the 
expansion population?
    Mr. Westmoreland. I have to admit I don't know the 
specifics of the last part of your question, but other than 
that, I would say yes. It's entirely a state decision, and 
Arkansas has made the decision of the size of the waiver.
    Mr. Pallone. And isn't it also true that 12 states and the 
District of Columbia have no waiting lists at all and that the 
overwhelming majority of those states that have no waiting 
lists have actually also expanded Medicaid?
    Mr. Westmoreland. I believe so, yes, sir.
    Mr. Pallone. Isn't it also true that the two states with 
the longest waiting lists are Texas and Florida, which have not 
expanded Medicaid--of course, I use my example, my anecdotal 
evidence there at the Children's Hospital at the Texas Medical 
Center--but these are the two states that have the longest 
waiting lists?
    Mr. Westmoreland. I know that Texas and Florida have not 
expanded. I did not know that they were the longest waiting 
lists. I know that they have waiting lists.
    Mr. Pallone. My problem is that I just think there's no 
evidence that states are choosing to expand Medicaid or keep 
their expansions at the expense of vulnerable people waiting 
for HCBS and that examining state choices on both expansion and 
HCBS waivers actually leads to a contrary conclusion. If 
anything, all the Federal expansion dollars only strengthen the 
Arkansas economy and revenues and improve the finances of 
providers by reducing uncompensated care, as has been shown in 
multiple states around the Nation. I think it just makes basic 
sense. If states expand Medicaid, they're getting 100 percent 
Federal dollars, and they have a lot more money to care for 
people; it's only going to be natural that they have more money 
to spend on people who are eligible. So this notion that 
somehow, by cutting the expansion or eliminating the expansion, 
cutting Medicaid, getting rid of Medicaid, there's no way in 
the world that that's going to help the situation with people 
who are trying to seek care. They're just going to end up in an 
emergency room. They're going to be waiting for the emergency 
room. They're not going to get preventative care. They're not 
going to see a doctor. None of it makes sense. If you wanted to 
comment.
    Mr. Westmoreland. If I may, Mr. Pallone, I'd like to 
juxtapose your comment with that of Chairman Barton, who points 
out that possibly there will be proposals to block-grant and 
cap the Federal funding. I have to say that, if the Congress 
adopts capped funding for Medicaid, we're going to see more, 
not fewer, waiting lists. Less funding and the loss of the 
individual entitlement services is exactly what's underlying 
the story in that video. And if the program is capped and 
Federal participation is limited, it will only get worse, not 
better.
    Mr. Pallone. Thank you.
    Mr. Murphy. Now I recognize the new vice chairman of the 
subcommittee, Mr. Griffith of Virginia.
    Mr. Griffith. Thank you, Mr. Chairman.
    Mr. Archambault, get out your money. Are you ready? All 
right. So my understanding of your testimony was that you were, 
in fact, saying that the states have to make choices with their 
limited resources, and that the Federal Government under the 
ACA is going to lower its Medicaid expansion money down to 90 
percent. As states find themselves with larger burdens than was 
anticipated when they expanded Medicaid, they have to make 
decisions on where it's cut. And we have created through the 
ACA--and I say ``we'' loosely because I wasn't here when they 
voted on that--but the Congress and the government created a 
situation where the states are rewarded for cutting traditional 
Medicaid, which deals mostly with children and people who are 
in greater need, and that, because of that disincentive or that 
incentive to spend it on the new folks, the newly found under 
Medicaid, under the new categories, we create the situation 
where states are having to make a decision as to whether they 
quicken the shortage on the waivers, get rid of those waivers 
as fast as they can, or whether they spend that money somewhere 
else. Was my understanding correct?
    Mr. Archambault. Correct, Congressman. There's both direct 
and indirect outcomes as related to expansion. And my point is 
that we are not fulfilling the promises to the most vulnerable 
in our society, wait list or not, but we are making new 
promises to an able-bodied population that does not qualify for 
long-term welfare benefits in any other place. And states are 
being put in a situation where they're having to make very 
tough decisions and making cuts in reimbursement rates that 
directly impact those with developmental disabilities, those in 
nursing homes. The access and quality questions that have 
surrounded Medicaid for decades will only get worse for the 
truly needy.
    Mr. Griffith. And so what you're saying is we need to pay 
attention to that, and we need to make sure that we have 
incentives that encourage people to take care of the truly 
needy and the young. And maybe we need to refigure that formula 
out. That is what you're saying?
    Mr. Archambault. Absolutely. I think as part of the repeal-
and-replace discussion, as we're talking about changing 
Medicaid going forward, it absolutely must be on the table. And 
we would strongly recommend looking at freezing new enrollment 
in expansion states and not allowing other states to expand so 
you can address this underlying issue of refocusing programs on 
the truly needy.
    Mr. Griffith. We have a real habit of doing that.
    Mr. Howard, I want to ask you, and the reason I say ``get 
your money out'' is because I thought the $20 bill versus the 
$2 was very instructive, Mr. Archambault.
    Mr. Howard, you touched on this, but you didn't get into 
detail. We have a situation where, even in traditional 
Medicaid, we have rewarded states that play games. Virginia 
elected not to have a sick tax. That's what it was called when 
there was a proposal a number of years ago, a couple decades 
ago, to start taxing the beds of the sick so that they could 
create that money and then put it into Medicaid and then get 
matching money from the Federal Government. Even though we were 
at a fairly low match, that would have given us those $2 from 
money that we collected from sick people. But many states have 
come up with these various schemes to get money by claiming 
that they're charging more. And what they're really doing is 
creating some kind of a sick tax scheme. And shouldn't we put a 
stop to that--over time? I'm not saying we have to get rid of 
it immediately. But shouldn't we over time be trying to get rid 
of that so that everybody knows what exactly they're getting 
and not having to charge sick people money so we can get more 
money for Medicaid?
    Mr. Howard. The Federal Government has capped the amount of 
provider taxes that states are able to use, but still we're 
talking a very significant amount of money. I think the last 
estimate from GAO was about $25 billion. Many, many states use 
these provider taxes. They use enhanced payment rates for 
state-owned facilities, intergovernmental transfers to draw 
down and raise their effective Federal match.
    Mr. Griffith. And while they may be legal, there's some 
real ethical questions about that, isn't there?
    Mr. Howard. Well, it's a real issue of program efficiency, 
absolutely.
    Mr. Griffith. OK. Because I want to move on to something 
else. I heard somebody earlier say that ObamaCare wasn't 
collapsing, and that was some myth. I got to tell you: We have 
got all kinds of numbers. Twenty-five percent average increase. 
Nearly a third of U.S. counties have only one insurer. A 
trillion in new taxes. 4.7 million Americans had to change 
their healthcare plan because they got kicked off of the plan 
that they liked. All kinds of problems out there.
    But you know what I find instructive is anecdotal. It 
happened to me yesterday twice. After church, a group of us 
generally go to lunch. I try to stay out of politics at lunch, 
and a discussion broke out at the other end of the table I was 
not involved in where they were talking about, what do we do as 
we go forward? And one fellow said: Look, as a Christian, I 
don't mind paying some more money, but when my insurance rates 
for my family have gone from to $450, $500, to $1,250 a year 
and I'm getting less insurance, it's hurting my family. And 
that's a problem.
    Later that evening, at a small group gathering of different 
people, there was a big discussion about whether or not a 
family could afford to justify spending money for their 
daughter, who had the flu--several families had been ravaged by 
flu over the last couple of weeks--because they, in order to 
afford health insurance, they had gotten such a high 
deductible; it was going to cost them $75 to get Tamiflu. And 
they were debating whether or not they should do that if their 
other kids got it and what they should do as they go forward. 
These are real-life examples of how ObamaCare is, in fact, 
failing the American people.
    I yield back.
    Mr. Murphy. The gentleman yields back.
    I now recognize Ms. Castor for 5 minutes.
    Ms. Castor. Thank you, Mr. Chairman.
    Well, thank goodness for Medicaid in America, especially 
back home in Florida. 3.6 million Floridians rely on Medicaid 
for their health services. A lot of my neighbors in skilled 
nursing, Alzheimer's patients, Medicaid is the lifeline for 
these families. Not to mention, 50 percent of children in 
Florida rely on Medicaid to go see the pediatrician and get 
their checkups, along with the State Children's Health 
Insurance Program. And Florida didn't expand Medicaid, so that 
3.6 million number are really our neighbors in nursing home or 
community-based care or children or my neighbors with 
disabilities. And based upon what they tell me, Medicaid is 
working for them. It works.
    Medicaid spending growth is lower than private health 
insurance. It's lower than Medicare. That's because sometimes 
states try to get by on the cheap in paying providers. That's 
one place for reform, that we could improve access if we would 
pay our providers a little bit more and do better there. 
Medicaid is flexible. I've watched in Florida as they've moved 
to a managed care system. I have questions about that, but that 
was a decision of the state. They had all that flexibility 
under Medicaid. They've also began a change toward more home 
and community-based services to help keep older folks out of 
skilled nursing, which can be very expensive.
    But we have to remain mindful about the fiscal cost and 
fiscal responsibility. That's why, in the Affordable Care Act, 
we passed a lot of new program-integrity provisions to 
strengthen Medicaid. The most important provisions involved a 
shift from the traditional pay-and-chase model to a 
preventative approach by keeping fraudulent suppliers out of 
the program before they can commit fraud. All participating 
providers in Medicaid and CHIP programs must be screened upon 
enrollment and revalidated every 5 years. So think about that 
as you move toward repeal of the Affordable Care Act. Why would 
we want to repeal these important program-integrity provisions 
relating to Medicaid? I don't think that's the path that we all 
want to go down.
    What this is, though, I think the real fear is that this 
whole terminology of block grants and per-capita caps is simply 
a stalking horse for less care for my neighbors back in Florida 
and all Americans. For every Alzheimer's patient, for every 
child that needs to go see the pediatrician, I want folks to be 
aware of what block grants and per-capita caps means because it 
sounds good. But what that means is devastation and sabotage to 
the Medicaid program.
    Mr. Westmoreland, describe the impact on the delivery of 
healthcare services to Americans if this approach is taken, 
block grants and per-capita caps.
    Mr. Westmoreland. As I understand some of the proposals 
that are Medicaid, the basic point is to limit Federal 
participation and the state costs of running the Medicaid 
program. As healthcare costs grow over time, the states will be 
left holding the bag for those increased state costs, for 
Medicaid costs. And as changes occur in the population, as the 
baby boomer demographic enters into the population, as more and 
more services are provided for people with disabilities, as 
prescription drug costs go up, the increased cost over time 
will not be matched by the Federal Government. States will be 
left holding the bag.
    Ms. Castor. And isn't it interesting that some Republican 
Governors believe this approach will have disastrous 
consequences for their ability to care for their older 
neighbors, neighbors with disabilities, and children. For 
example, a Republican Governor from Massachusetts, in a letter 
to Congressman Kevin McCarthy, stated: We are very concerned 
that a shift to block grants or per-capita caps for Medicaid 
would remove flexibility from states as the result of reduced 
Federal funding. States would most likely make decisions based 
mainly on fiscal reasons rather than the healthcare needs of 
vulnerable populations and the stability of the insurance 
market.
    Could you elaborate a little more what this would mean? In 
my state, they may not raise taxes. That's the choice, though, 
isn't it? Raise taxes to support our neighbors or cut?
    Mr. Westmoreland. If Federal participation is limited in 
these fashions, it's the only way that would respond to Mr. 
Barton's concerns about deficit reduction. If Federal 
participation is limited in that fashion, then the states will 
have a choice either of reducing the number of people that they 
serve, cutting back and rationing the services to those people, 
or raising state and local tax.
    Ms. Castor. And, Mr. Chairman, thank you.
    I'd like to ask unanimous consent to enter into the record, 
if anyone is interested in learning more about Medicaid, March 
of Dimes and a number of experts are having a lunch-provided 
forum tomorrow--or, excuse me, Thursday, February 2, 12:30 to 
1:30, right here in Rayburn in the Sam Johnson Room, Rayburn 
2020, to learn why Medicaid matters to kids. I encourage you 
all to attend.
    Mr. Murphy. Could you send a copy over to me? Thank you.
    I now recognize Dr. Burgess for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman.
    I want to thank our panelists for being here today. Very, 
very interesting discussion. Certainly a very timely 
discussion.
    Ms. Yocom, let me ask you, Chairman Murphy was, I think, 
directing some of his questions about improper eligibility 
determinations, and one of the things that has concerned me for 
some time is the issue of third-party liability, a Medicaid 
patient who has actually other insurance but also has Medicaid. 
And my understanding is what happens is sometimes it's hard to 
collect from the party of the first part, the commercial 
insurer. Medicaid is more straightforward, so you end up in a 
situation where the person who should be responsible for the 
bill, the insurance company who has been contracted to provide 
care for that patient, actually is inadvertently kind of let 
out of the equation because it just becomes easier to chase the 
dollars in the Medicaid system. Is that a real phenomenon?
    Ms. Yocom. It is. We did some work, I believe in part for 
your office, that took a look at third-party liability on some 
of the issues that the Medicaid program encountered. Some of 
the issues are about information systems and just being aware 
of the coverage, but then, even within that, it's about the 
interaction between the State Medicaid programs and the 
insurance companies and being able to assert the fact that they 
should be paying first.
    Mr. Burgess. So to what extent are the states able to 
address the underpayments by commercial insurers and the 
overpayments by Medicaid?
    Ms. Yocom. We did make some recommendations to CMS to 
provide additional support and data on these issues. I would 
need to check to see whether or not they had been implemented 
and a little more about the specific.
    Mr. Burgess. I'm given to understand that this is not a 
trivial problem, that there are a significant number of dollars 
involved. Is that correct?
    Ms. Yocom. Yes, yes.
    Mr. Burgess. And I think it's safe to say that it does vary 
from state to state. Some states do better than others. So you, 
if I recall correctly, back in the mid-2000s, in 2005, 2006, 
2007, you had created a list of states where the percentages of 
dollars left behind were attributed to each state. And there 
were some significant differences. I think Texas was kind of 
middle of the pack. Iowa did very well. Some other states did 
very poorly. Do I recall that correctly?
    Ms. Yocom. I believe that's right. And I think some of it 
is that the more health plans involved, I think the harder it 
can be. Some of the states that had a smaller group of insurers 
to work with I think were sometimes able to establish better 
relationships.
    Mr. Burgess. Well, it just gets to the point. I mean, that 
was a GAO report of over 10 years ago. Is this problem fixable? 
Is it worth fixing?
    Ms. Yocom. I think there have been some fixes done, but I'm 
not sure I remember well enough to tell you much more than that 
right now.
    Mr. Burgess. OK. I'll just let the subcommittee know there 
is some very insightful legislation coming on this subject, and 
I hope people will join me on that.
    Ms. Maxwell, let me to ask you: Just staying on the third-
party liability issue, you've discussed Medicaid overpayments 
in regard to providers not reconciling credit balances with the 
state. Is that correct?
    Ms. Maxwell. That's correct.
    Mr. Burgess. So it stands to reason, since states are not 
active in tracking down third-party liability claims, they're 
aware of beneficiaries with overlapping coverage that might 
receive services that are unintentionally paid for both by 
third parties and the State Medicaid plan. Is that a reasonable 
assumption?
    Ms. Maxwell. Correct.
    Mr. Burgess. Is it possible for states to take advantage of 
in-house data like this to approach practices that might not 
have reconciled their credit balances?
    Ms. Maxwell. Yes. That's what our recommendation focuses 
on: the ability of states to identify those overpayments and 
then recover them. In the report, we identified $25 million in 
which credit balances had not been reconciled and states had 
not been able----
    Mr. Burgess. State that number again.
    Ms. Maxwell. $25 million for, I believe it was eight 
states.
    Mr. Burgess. But it is not an inconsequential number. It is 
a number worthy of our attention, even though we deal with big 
numbers up here. Mr. Barton talked about trillions of dollars 
and dazzled everybody with that. But even focusing on these 
amounts is important, is it not?
    Ms. Maxwell. Absolutely. From the Office of the Inspector 
General's perspective, every dollar counts. Every dollar that 
is overpaid or goes to a fraudulent provider means there's a 
dollar less to provide services.
    Mr. Burgess. Thank you.
    And, Mr. Chairman, I just want to point out that, as of 10 
days ago or so, the day before inauguration, we had roundtables 
with the Governors up here, both on the Senate side and the 
House side, and it was one of the most impactful days that I 
have seen up here. There was so much energy and enthusiasm on 
the part of the Governors who want reforms in their system. 
They want this to be right. They want to deliver the care to 
their citizens. There's not unanimity of opinion whether it's a 
block grant or beneficiary allotment, a lot of discussion 
around the moving parts, but I will just tell you I was very 
encouraged at the level of involvement of our Governors in this 
issue.
    Thank you. I yield back.
    Mr. Murphy. Thank you.
    I now recognize the gentleman from New York, Mr. Tonko, for 
5 minutes.
    Mr. Tonko. Thank you. Thank you, Mr. Chair, and welcome to 
our panelists.
    Mr. Archambault, I know that, in your testimony, you 
addressed the waiting list and the corresponding decline of 
services or inability of services. I know that our ranker, 
Representative Pallone, asked you a bit about this or the panel 
about it, and I just want to dig a little deeper into a claim 
that you did make where you insinuate that expanding Medicaid 
will lead to the 600,000 individuals on Medicaid waiting lists 
being less likely to receive services. First of all, can you 
explain what you mean by Medicaid waiting lists? I assume 
you're referring to the waiting list that some states maintain 
to receive home and community-based waiver services. Is that 
correct?
    Mr. Archambault. Correct.
    Mr. Tonko. So I would ask, do you know which state has the 
longest waiting list for home and community-based services?
    Mr. Archambault. It's usually related to population. You're 
going to have more people who are usually eligible for the 
program, but there's not a straight correlation that way.
    Mr. Tonko. Well, my information tells me that Texas is that 
list that has the longest waiting list. It's at some 163,000-
plus people in 2014. And do you know how Texas' waiting list, 
of that 163,000, has been affected by the expansion of 
Medicaid?
    Mr. Archambault. The data usually is a year or two delayed, 
so it's hard to draw a direct correlation. I would just point 
out that, if we want to make sure that we're fulfilling the 
promises to the most vulnerable, I think getting lost in this 
discussion is that Medicaid is crowding out spending----
    Mr. Tonko. Well----
    Mr. Archambault [continuing]. Of all kinds, whether it's 
education, whether it's public safety or infrastructure, or the 
waiting list. I don't want to----
    Mr. Tonko. I would suggest it depends on what states are 
doing with their Medicaid program, but Texas has not expanded 
its Medicaid, so that was the answer that I would share with 
you.
    It's very interesting now that we look at some of these 
data. Mr. Archambault, do you know which state has the second 
longest waiting list for home and community-based services?
    Mr. Archambault. Again, it depends on the population by 
category, and there's no correlation between expansion or not. 
The concern is even states that have expanded also have waiting 
lists. So, for me, it's about priorities. And for state 
lawmakers, they are being put in a very tough position where 
they're not able to help families like Skylar's, and that's 
deeply concerning to me.
    Mr. Tonko. Well, Florida is the second in that list of 
Medicaid numbers, and they have not expanded with their 
Medicaid issue. And, you know, I think we can sense a pattern 
here, so we need to cut to the chase. Fully 61 percent of those 
individuals on waiting lists for home and community-based 
services live in the 19 states that have not expanded Medicaid. 
My home State of New York, one of the most populated in the 
country and one which has enthusiastically expanded Medicaid, 
maintains a waiting list of zero individuals for HCBS waiver 
services and a track record that has really begun to be very 
favorable about per-capita costs for Medicaid. So it's 
difficult for me to see the real-world correlation that is 
addressed in testimony like yours where expanding Medicaid and 
waiting lists for home--where there's a contrast or a choice 
that has to be made between expanding Medicaid or waiting lists 
that grow for home and community-based services. Do you have 
any actual evidence at all that speaks to that expansion and 
any correlation with HCBS?
    Mr. Archambault. So, again, the point is that, when you 
talk to Governors and state policymakers, they are being put in 
the position where, in Arkansas, they have been trying for 
years to address issues like families like Skylar. Now they are 
having to----
    Mr. Tonko. Just yes or no. Is there any correlation that 
you can cite? And I'll remind you: you're under oath. So is 
there any correlation that you can cite?
    Mr. Archambault. What I will say is there is no 
correlation. It's not a yes-or-no question.
    Mr. Tonko. So the answer to my question is no.
    Mr. Archambault. There is no correlation, expansion or not, 
on whether you have a wait list.
    Mr. Tonko. So, unfortunately, what we're seeing here from 
our witnesses today is a parade of alternative facts designed 
to obscure the simple truth.
    Medicaid expansion is working. It has provided health 
insurance to over 12 million people, and my colleagues on the 
other side of the aisle are engaged in a cynical attempt, I 
believe, to pit good versus good in an attempt to gut this 
program and rip health care away from millions of Americans. I 
find it unacceptable. I find it shameful, and I don't think we 
should sit quietly while people's right to health care is being 
threatened. With that, I just yield back the balance of my 
time.
    Mr. Murphy. Thank you.
    I now recognize Ms. Brooks for 5 minutes.
    Mrs. Brooks. Thank you, Mr. Chairman.
    I don't think that trying to explore waiting list questions 
and waiting list issues is an attempt to gut Medicaid. In my 
view, it's an attempt to strengthen the services and the 
ability to provide people with developmental disabilities, 
traumatic brain injuries, mental illnesses, and ensure that 
those people on these significant wait lists receive care. And 
I would like to go back to you, Mr. Archambault, with respect 
to--because I do think it's more complex than a simple yes or 
no, is there a correlation, or is there not a correlation? So 
could you please go into greater detail with respect to what 
your foundation, what you all have found with respect to the 
waiting lists, with respect to the people who are on the 
waiting lists, with respect to what the states want to do with 
the waiting lists? I'm going to let you use most of my time.
    Mr. Archambault. Sure. Thank you, Congresswoman.
    I would just say that to focus on a waiting list is a 
vacuum.
    Mrs. Brooks. I'm sorry. What do you mean by ``it's a 
vacuum''?
    Mr. Archambault. Some states have delivered care--the 
phrase that I'm sure you're all very familiar with: You've seen 
one State Medicaid program, you've seen one. Some states have 
decided to take their people that would qualify for a waiting 
list and include it into an 1115 waiver request and deliver 
services in a different way. My point is that the principles by 
which we have as a country for our safety net is that we make 
sure that a safety net program accomplishes a few things. One, 
is it targeted and tailored to the truly needy? Are we living 
up to the promises that we are making to these families and 
individuals before we make new promises?
    Mrs. Brooks. And is it fair to say that those currently on 
waiting lists in the states are the truly needy? Is there any 
dispute about that?
    Mr. Archambault. I think there would not be, and I would be 
happy to explore it, but I'm not sure how intellectual 
disabilities or mental illness would be seen as ones that we 
wouldn't want to try to help.
    Mrs. Brooks. People typically who cannot take care of 
themselves.
    Mr. Archambault. Correct----
    Mrs. Brooks. Is that correct? People who are often not 
working. Is that correct?
    Mr. Archambault. Correct.
    Mrs. Brooks. People who truly are incapable of taking care 
of them physically or mentally themselves.
    Mr. Archambault. Correct. And this was the traditional 
Medicaid population pre-ACA--was the aged, the disabled, 
pregnant women, and children--that we were trying to fulfill 
that promise to. The ACA changed that discussion.
    Mrs. Brooks. And how did the ACA change that discussion?
    Mr. Archambault. Well, expanded to a population that is the 
vast majority 82 percent childless, able-bodied adults. So, 
again, these are individuals that don't qualify for TANF. They 
don't qualify for long-term food stamps. They have not 
traditionally been a population. And what's really, really 
important for us to remember here is our goal is not to get 
people to stay on Medicaid. Ultimately, we want to make sure 
that they have better health outcomes, and I think most of us 
would agree ideally it's if they're able to work, that they're 
out in the workforce supporting themselves and on private 
insurance. And that's ultimately I think where we want to be as 
a country, and that's the discussion that we need to be having.
    Mrs. Brooks. And is it fair to say that most of the people 
who are on the waiting list who are the developmentally 
disabled, traumatic-brain-injured people, and those with 
serious mental illness are always going to be on Medicaid?
    Mr. Archambault. Correct.
    Mrs. Brooks. It's a different type of population.
    Mr. Archambault. Correct.
    Mrs. Brooks. And what has been your discussion and findings 
with the Governors with respect to how most of them would like 
to take care of this population? If there's consensus among 
Governors, what is the Governors' and the legislature's view 
with respect to this population?
    Mr. Archambault. Yes. I think there's ongoing concern by 
Governors that they're not going to be able to support these. 
Now, I will say there are exceptions to that rule, and if you 
look at the State of Kansas or the State of Maine, those 
Governors have been able to buy down their wait lists. I think 
Maine was gone from 1,700 individuals down to 200 individuals.
    Mrs. Brooks. How did they do it?
    Mr. Archambault. Well, they got some budget sanity. They 
did not expand Medicaid, and so they have been able to focus on 
eligibility, as we have talked about today, to make sure that 
their programs are truly focused on those that are the most 
needy, the aged, the blind, the disabled. And they've made that 
a priority in their states, and they've had success in buying 
down their wait lists.
    Mrs. Brooks. I think we need to continue to explore the 
states that have found ways to have little to no wait lists. I 
certainly hope today our Governor, Governor Holcomb, is 
formally submitting an application to CMS for a Medicaid waiver 
to continue our successful Healthy Indiana Plan for an 
additional 3 years. It's an outstanding program that I hope 
folks on both sides of the aisle--it is a way to save and to 
help those who truly need it. It can be replicated. I believe 
it's an incredible model that can work.
    Unfortunately, we still have a waiting list in Indiana. We 
don't want a waiting list. But I certainly hope that, with the 
new nominee to lead CMS, Seema Verma, a Hoosier, we can make 
all of Medicaid a far stronger and better program. With the 
controls in place, as a former U.S. attorney, I've worked with 
the MFCU units. We need to do more to support them. We need to 
do more to support all of these efforts to make sure that our 
truly vulnerable are protected.
    With that, I yield back.
    Mr. Murphy. OK.
    I now recognize Ms. Clarke for 5 minutes.
    Ms. Clarke. I thank you, Mr. Chairman, and I thank our 
ranking member.
    Before I get into my actual questioning, I actually want to 
respond to Mr. Howard because, as a proud New Yorker, I must 
correct the impression left by your characterization of the 
Empire State. Are you aware that the New York State's Medicaid 
Redesign Team has been a national leader in controlling costs 
and improving quality for Medicaid members? The Empire Center 
for Public Policy, self-described as a physically conservative 
think tank and government watchdog, released an analysis in 
September of 2016 that New York Medicaid spending per recipient 
has dropped from $10,684 to $8,731, or 18 percent, between 2010 
and 2014, at nearly twice the national average.
    According to the independent New York State Comptroller's 
Office, the MRT restrained total Medicaid spending growth to 
only 1.7 percent annually during the period of fiscal year 2010 
to 2013. This marks a significant reduction over the trend for 
the previous 10 years of 5.3 percent. During the same 3-year 
period, Medicaid re-enrollment grew by more than half a million 
people. Billions of dollars have been saved, and per-recipient 
spending has been slashed. In fiscal year 2014 and 2015 alone, 
a total of $16.4 billion was saved thanks to the MRT 
initiative. This track record of success led the Comptroller's 
Office to declare that MRT represents the most comprehensive 
restructuring of New York's Medicaid system since the program 
began in 1966. And we have no waiting list.
    I would like to now turn to Mr. Westmoreland. In Mr. 
Archambault's written testimony, he cited numerous concerns 
about Medicaid expansion. However, he ignores the fact that 
this program has also had a positive impact on the quality of 
life and health for millions of Americans. He also ignored the 
fact that many of the positive impacts, such as cost savings, 
from preventative medical exams and early detection and 
treatment of disease will result in future cost savings to the 
states and the Federal Government. I am a strong supporter of 
Medicaid expansion because I see the significant value of the 
program. I'm interested in improving the program and not 
destroying it.
    So, Mr. Westmoreland, Mr. Archambault claims that the 
Medicaid expansion funding threatens the truly vulnerable. Can 
you clarify why this is not the case?
    Mr. Westmoreland. I'd begin with first challenging the 
discussion, as I did in my testimony, of who's truly 
vulnerable. I want to be clear that not all people with 
disabilities, cognitive, traumatic brain injury, any of those 
discussions that have been ongoing, were traditionally eligible 
for Medicaid. It was tied to a 75-percent poverty and receipt 
of SSI, and many people whom we would all consider to be 
disabled have never been eligible for the Federal Medicaid 
program until the enactment of the ACA. So let's start with 
those people.
    Secondly, I would point out that there have been 
significant studies, economic and macroeconomic studies, some 
by business schools, some by economists, showing that states 
actually have significant budget savings and revenue gains by 
having the Medicaid expansion in their state. So I think that 
it's clear that states benefit on a financial basis and that 
their citizens benefit on their financial basis in the ways 
that I outlined in my testimony.
    Ms. Clarke. Mr. Westmoreland, both Mr. Archambault and Mr. 
Howard claimed that Medicaid expansion poses an unsustainable 
burden on state budgets. Can you clarify why this is not the 
case? Why have most states that have expanded Medicaid actually 
experienced net budgetary savings associated with the 
expansion?
    Mr. Westmoreland. Yes. Let's start with the healthcare 
expenses that, as we discussed earlier, there are fewer 
uncompensated care costs within the state. In addition to that, 
there is an influx of Federal funds into the state to pay for 
healthcare services, and those Federal funds have a 
reverberating multiplier effect in the state economy. And, 
finally, states are able to provide, as you suggested, 
preventive and early-intervention services that might not have 
been available to uninsured adults before and actually lower 
the ongoing healthcare costs for those people.
    Ms. Clarke. It is my understanding that numerous studies 
have disproven the myth that Medicaid expansion diminishes work 
incentives. Is that correct?
    Mr. Westmoreland. Yes, ma'am.
    Ms. Clarke. I yield back the balance of my time, Mr. 
Chairman.
    Mr. Murphy. Thank you.
    Now I recognize a new member to our subcommittee, the 
gentleman from Michigan, and Reverend, Mr. Tim Walberg.
    Welcome aboard here to our committee.
    Mr. Walberg. Thank you, Mr. Chairman.
    Mr. Archambault, I appreciate the safety net illustration, 
that we want to have safety nets. We don't want to have safety 
nets forever for people. I remember, I never worked over a 
safety net, but I remember working at U.S. Steel South Works 
and third helper of going out and being responsible to swing a 
sledge and take the plug out of a heat of molten steel and had 
a fall-protection strap on me. I appreciated that, but when the 
shift ended, I didn't want that strap. I wanted to move on. 
That's a laudable goal, that we find ways to make sure that 
people who truly need that safety net have it, that we make 
sure that we don't waste it on others who don't and encourage 
them to move on in a very positive way.
    I'd like to ask you for a further response from your 
testimony, and also, Ms. Maxwell, I'd like for you to comment 
after Mr. Archambault. Your testimony references some of the 
waste and fraud issues that face our Medicaid programs, 
individuals that have passed away decades ago, individuals 
using high-risk or stolen Social Security numbers, and tens of 
thousands who had moved out of state yet remained on Medicaid. 
What can we do to combat some of these problems more 
effectively?
    Mr. Archambault. So there's a number of things that we 
would recommend, and thank you, Congressman, for the question. 
The first one is allow states to check eligibility more 
frequently. Under the ACA, there was a change that states could 
only redetermine eligibility once a year unless they were given 
a reason to recheck eligibility. We have found that states that 
are able behind the scenes to access data internally within 
state government but also through third-party vendors, if 
they're able to run those on a quarterly or monthly basis, 
they're finding that these people, individuals have life 
changes, just like all of us. So, whether they move or they die 
or whether they get a significant raise, we need to make sure 
that we find that sooner rather than later. Otherwise, we're 
just wasting money, and I believe that there's bipartisan 
agreement on that, that we need to make sure. The other thing 
is that we need to make sure that the Federal databases, which 
we haven't talked a lot about, the quality of the data in those 
is quite poor. If you talk to state leaders, they will complain 
constantly about how late the data is, out of date, and it's 
not flexible enough. So making sure that states are able to 
look for dual enrollment, for example--and the Food Stamp 
program is moving in this direction. We should be doing it for 
Medicaid, just to make sure that we're not wasting money as a 
result of individuals moving across state lines.
    Mr. Walberg. Thank you.
    Ms. Maxwell, could you add to that?
    Ms. Maxwell. Thank you. I would love to. I would definitely 
echo what we just heard about the crucial need for better 
Medicaid data. Lack of data hampers the ability to understand 
these programmatic issues for policy decisions but it also 
significantly deters us in trying to find fraud, waste, and 
abuse. In addition to that impacting detection, we also need to 
think about protecting the Medicaid program from fraud ever 
happening in the first place. So again, in addition to the 
data, we would encourage CMS to continue to work with states to 
improve enhanced provider screening to make sure that providers 
that get in the program are the providers we want to get in and 
are who we want to pay.
    Mr. Walberg. Thank you.
    Mr. Archambault, an audit in Arkansas revealed more than 
43,000 individuals on Medicaid who did not live in the state, 
with nearly 7,000 having no record of ever living there. More 
than 20,000 Medicaid enrollees were also linked to high-risk 
identities, including individuals using stolen identities, fake 
Social Security numbers, et cetera. Something of interest to me 
in Michigan, has recently identified more than 7,000 lottery 
winners receiving some kind of public assistance, including 
individuals winning up to $4 million. Those jackpots are 
something that ought to encourage them not to be on Medicaid 
assistance.
    Mr. Archambault, do these individuals get approved for and 
stay enrolled in the Medicaid program, and is it the Federal 
Government or the states dropping the ball?
    Mr. Archambault. Well, Congressman, maybe a little bit of 
both, to answer that question. And I think what's really 
important here is that there are some policy changes that have 
happened. The Affordable Care Act removes an asset test for the 
Medicaid program, by and large. There's some that it still 
applies to. But as a result, these sorts of outlier cases 
admittedly, but when an individual wins $4 million, takes a 
lump-sum payment, they may not qualify that month, but the very 
next month, they would qualify for this program and can remain 
on. Let alone we're not checking for 12 months in most cases, 
so we wouldn't know. The point I'm making here is we need to 
make sure that these gaping holes that exist, we have data in 
many cases within a state government. We have data across state 
lines. And the Federal Government needs to incent states to 
say: Look, if you are doing this on a more regular basis and 
identifying fraud, you can take a little bit of that savings to 
pay for those efforts. This points to Mr. Howard's point that 
that is not the incentive that's inherent in the current 
financing structure that we have set up.
    Mr. Walberg. Thank you.
    My time has expired.
    Mr. Murphy. I now recognize Dr. Ruiz for 5 minutes.
    Mr. Ruiz. Thank you, Mr. Chairman.
    As many of you know, I grew up the son of farm workers in 
the medically underserved community of Coachella. I have seen 
firsthand what it means when a community is medically 
underserved and when they cannot access care. I can tell you 
this: If it was not for Medicaid, the Coachella Valley and 
regions like mine all across the country would not have access 
to health care that every one of us up on this dais and our 
families enjoy. If we repeal Medicaid expansion, people will 
lose healthcare coverage. They will stop seeing their doctors 
because the costs will be too high, and they will stop taking 
their lifesaving prescriptions because they are too expensive. 
In California alone, the nearly 3.5 million individuals who 
enrolled in Medicaid under the ACA expansion provision could 
lose their coverage. That's millions of families losing access 
to health care. And if we repeal Medicaid expansion, 
uncompensated costs will increase, straining our Nation's 
healthcare system, which will drive up costs for everyone 
because, you see, when people don't have health insurance, they 
don't stop getting sick. And our emergency departments do not 
turn someone away because they don't have insurance. Emergency 
physicians treat the patients, like they should. So the 
hospitals have to make up the costs. And in 2014 alone, Sutter 
Health Systems in California saw a decrease in uncompensated 
care by 45 percent in 2014. All hospitals in my district, in 
particular San Gorgonio Hospitals, have seen a drop in 
uninsured patients in the emergency department by half. So we 
need to expand Medicare even more, make it more efficient and 
more desirable for providers to see more Medicaid-insured 
patients.
    Listen, fraud is bad, and political amplification of the 
problem to wrongfully justify cutting health insurance for sick 
patients is bad. So here's the possible common ground. Here's 
what I think we can both agree on. If we start with the premise 
that we want to cover more uninsured, economically struggling 
families like the middle class and more vulnerable families, 
then we're on the same page. But if you start with the 
ideological goal to cut or end Medicaid, then you'll breed 
mistrust, and millions of people will be harmed, including the 
middle class. So the real question--and the real question, Mr. 
Howard, is, are sick and injured people getting the care they 
need? Because anything short of this is negligence. So let's 
tackle fraud so that we can expand coverage to more struggling, 
uninsured middle class families.
    So the question that I have, Ms. Yocom, if you were to 
choose one thing that you can do to combat fraud, if there's 
one action that you can take that we can make the biggest 
difference in the system, what would that be?
    Ms. Yocom. I think it's around the providers, making sure 
that we have eligible providers who are in good standing and 
that those who are not in good standing and should not be 
providing services aren't going across states to provide 
services.
    Mr. Ruiz. Thank you.
    Ms. Maxwell, the one thing, the one thing that would make 
the biggest difference?
    Ms. Maxwell. I would absolutely have to go back to the 
data. Without that sort of transparency, we cannot see what's 
happening in the program. We have a lack of data across the 
Nation and also data coming in from the managed care companies.
    Mr. Ruiz. Thank you.
    Mr. Howard, the one thing, if you had one thing that you 
can change to make the biggest difference in fraud, what would 
it be?
    Mr. Howard. In fraud in particular?
    Mr. Ruiz. Medicaid.
    Mr. Howard. Yes. Engage data transparency, as my colleague 
here on the dais was just saying. Medicaid data should be 
enclaved for all the states to look at so they can benchmark 
provider performance and engagement.
    Mr. Ruiz. Thank you.
    Mr. Westmoreland, what does the evidence suggest about how 
Medicaid expansion is making health care more affordable? Is 
there evidence, for instance, that Medicaid expansion is 
reducing patients' need to forego medical care due to costs?
    Mr. Westmoreland. Medicaid expansion is highly associated 
with a decline in personal bankruptcies. It is also associated 
with greater financial security for families who are newly 
eligible.
    Mr. Ruiz. So these are middle class families who are having 
some economic security because of the Medicaid expansion. What 
does the body of evidence say about how Medicaid expansion has 
affected patient access to primary care and preventative care?
    Mr. Westmoreland. Those beneficiaries who are newly insured 
under the Medicaid expansion have much higher rates of 
traditional sources of care, seeing primary care, and using 
preventive health services.
    Mr. Ruiz. Thank you very much.
    My closing statement is, if this is leading to increase in 
expansion for economically struggling middle class families, 
then, you know, I'm in.
    But if the ultimate goal is to create a facade and amplify 
a problem politically to then justify policies that will hurt 
the middle class and that would decrease health insurance, then 
I'm not in.
    So let's tackle fraud so that we can expand more health 
coverage to middle class families.
    Thank you very much.
    Mr. Murphy. Thank you.
    Now we're recognizing another new member of our committee 
from, I think, UCLA, former state assemblywoman, state senator, 
mayor, Congresswoman Mimi Walters of California. You're 
recognized for 5 minutes.
    Mrs. Walters. Thank you, Mr. Chairman.
    My questions will be directed to Mr. Archambault. The 
supporters argued that Medicaid expansion would increase jobs. 
Has this happened?
    Mr. Archambault. There's been a number of studies where the 
consultant predictions have been very off, whether it be 
enrollment or jobs. In particular, they are Iowa, Tennessee, 
where there were predictions of gains in hospital jobs and 
healthcare jobs as it related to expansion, and the opposite 
has actually taken place, where there has been a loss in 
healthcare jobs.
    Mrs. Walters. OK. And during the conception of the ACA, 
supporters argued that Medicaid expansion would stop hospital 
closures. Has this been the case?
    Mr. Archambault. So it certainly has not stopped hospital 
closures. In a number of states, hospitals have still closed. 
And I think it's important to realize that the supporters' 
claim that it is a silver bullet to stop closures has not been 
true. So you could list off Arizona, Massachusetts, a number of 
these states where they have expanded, and hospitals have still 
closed.
    Mrs. Walters. OK.
    And, finally, Medicaid expansion was projected to lower 
emergency room use. However, you pointed out that the evidence 
suggests that emergency room use has increased after expansion 
and that many emergency room visits by Medicaid beneficiaries 
were deemed to be avoidable. Can you explain what might have 
led to this outcome?
    Mr. Archambault. Sure. And my experience is not just 
influenced by the ACA. I live in Massachusetts and worked on 
RomneyCare and have studied RomneyCare very closely. And one of 
the things that becomes apparent is, both in the expansion 
population and the traditional Medicaid population, is folks 
are not getting coordinated care because they are showing up to 
the ERs at a much higher rate than those that are privately 
insured or even uninsured. And so, as a result, these are the 
questions that we need to ask about the effectiveness of the 
program, the quality of the care that individuals are getting. 
There's been a number of surveys looking at, how many of these 
visits are avoidable? And, unfortunately, at least in 
Massachusetts, those surveys found that 55 percent of Medicaid 
visits to the ER were unavoidable.
    Mrs. Walters. Thank you.
    I believe my time is expired.
    Mr. Murphy. I then recognize Ms. Schakowsky for 5 minutes.
    Ms. Schakowsky. Thank you, Mr. Chairman.
    The Affordable Care Act has just been a blessing for so 
many people in our country. Twelve million more Americans have 
access to health care.
    Mr. Westmoreland, Governors across the country submitted 
letters in response to Representative McCarthy's request to 
describe the impact of the ACA and the expansion of Medicaid 
within their states. I'm assuming that you've seen some of 
these letters. For the record--
    Mr. Westmoreland. Yes, ma'am.
    Ms. Schakowsky. Even some Republican Governors appeared to 
have positive things to say about the expansion of Medicaid in 
their state. For example, the letter from my home State of 
Illinois stated that our--the Governor stated that our Medicaid 
population ``now stands at 3.2 million, almost one quarter of 
the state's population,'' and it went on to urge Republican 
leaders in Congress to ``carefully consider the ramifications 
of proposed changes.'' Similarly, Governor Sandoval of Nevada 
stated in his letter to Mr. McCarthy that, ``I chose to expand 
the Medicaid program to require managed care for most enrollees 
and to implement a state-based health insurance exchange.'' 
These decisions made health care accessible to many Nevadans 
who never had coverage options before.
    So, Mr. Westmoreland, can you briefly touch upon how the 
residents of states that expanded Medicaid under the ACA have 
benefited, such as Illinois and Nevada?
    Mr. Westmoreland. I'm sorry. I didn't understand the last 
part of the question.
    Ms. Schakowsky. I cited Illinois and Nevada, but can you 
briefly touch on how the residents of states that did expand 
Medicaid under the ACA have been benefited?
    Mr. Westmoreland. Let's begin with 11 million people have 
Medicaid coverage who didn't have it before, and many of those 
people are in serious need. I would point out and agree with 
you that, of the Governors who wrote to Mr. McCarthy, none of 
them requested repeal, I believe. And 16 of the states were 
governed by Republican Governors. And Ohio, Mr. Kasich, one of 
your former colleagues, I think was most passionate in 
describing not only how it has benefited the residents of Ohio 
to have services but that, indeed, he believed that it was a 
moral duty to continue to cover these people under Medicaid.
    Ms. Schakowsky. Thank you for that.
    And can you briefly touch on how--let's see, I also wanted 
to mention there are other examples, Republican-led states as 
you have said, that have had positive outcomes for their 
residents. And beyond providing healthcare benefits to an 
additional 12 million people, how has Medicaid expansion helped 
states manage their budgets? Has it had a positive impact?
    Mr. Westmoreland. As I suggested earlier, there have been 
business school studies and economic studies suggesting that 
states who have expanded Medicaid have had not only a net 
increase in Federal funds coming into the state, but they've 
also enjoyed some revenue increases because of the 
reverberating effects and providing those funds in hospitals. I 
would also point out to you that there is a long-term study to 
be done of how productivity might actually be improved by 
people having healthcare services who previously were denied 
those services.
    Ms. Schakowsky. Thank you. Some of the letters I was 
referring to seem to raise concern by Republican Governors that 
changes to the Medicaid program would produce destabilizing 
cost shifts to the states. For example, Governor Baker of 
Massachusetts in his letter to Mr. McCarthy said, ``Medicaid is 
a shared Federal-state partnership.'' Proposals that suggest 
that states may be provided with more flexibility and control 
must not result in substantial and destabilizing cost shifts to 
states.
    So is there a valid concern of a major cost shift under the 
Republican proposals you are seeing, such as proposals to 
block-grant Medicaid or impose per-capita caps on spending? 
Should states be concerned about major cost shifts?
    Mr. Archambault. States should be very concerned. The first 
question is, what level will the initial block grant and its 
formula be set at? But the major question for states to focus 
on is how the evolution, the increase of funding in the future, 
will evolve as compared with the actual cost of providing 
healthcare services to the number of people who need them. As I 
suggested earlier, states will be left holding the bag for both 
medical inflation and the number of people who have no health 
insurance.
    Ms. Schakowsky. And what about, for those that are 
receiving health care through ACA's Medicaid expansion, are 
they at risk, particularly if they block-grant the Medicaid 
program?
    Mr. Archambault. Well, first, I would suggest that my 
colleagues on this panel would point out that--suggest that 
those people should be the first to go off of the healthcare 
rolls and that they would return to traditional Medicaid 
populations as they've existed over the last 20 or 30 years, so 
I would suggest that the people who are on Medicaid expansion 
are the people who are most likely to be on the chopping block 
to begin with.
    But, secondly, I would say that, as every state, expansion 
or no expansion, experiences the growth in healthcare costs 
that is almost inevitable, looking at CBO or any other 
projections, if the states are left holding the bag and they do 
not have a guarantee of Federal funds, they're going to be 
cutting back on everyone.
    Ms. Schakowsky. Thank you.
    I yield back.
    Mr. Murphy. Thank you.
    Another new member of our committee, Mr. Costello of 
Pennsylvania. I appreciate you being here. You're recognized 
for 5 minutes.
    Mr. Costello. Thank you.
    Ms. Maxwell, if I could ask a couple of questions on HHS 
OIG, has the number of criminal investigators increased or 
decreased over the years?
    Ms. Maxwell. The number of criminal investigators 
specifically?
    Mr. Costello. Yes.
    Ms. Maxwell. I think, right now, we are below our FTE 
ceiling. We are still trying to hire more.
    Mr. Costello. How many more do you think you need to hire?
    Ms. Maxwell. Well, we would hire as many as you let us, but 
w need about 1,700 FTEs--that's where we're pegged for, the 
entire OIG.
    Mr. Costello. True or false, for every $1 expended in the 
OIG, $7.70 is returned to the Health Care Fraud and Abuse 
Control Program?
    Ms. Maxwell. That is true.
    Mr. Costello. Has that been a consistent return?
    Ms. Maxwell. As far as I know, it's been around $7, and 
it's the same thing for the Medicaid Fraud Control Units. They 
also had that similar ROI.
    Mr. Costello. You conducted a review of State Medicaid 
agencies presented with allegations of provider fraud. Did you 
find that state agencies properly suspended Medicaid payments 
to those providers?
    Ms. Maxwell. They did not make full use of those tools.
    Mr. Costello. Which is to say they did suspend all----
    Ms. Maxwell. They did not. Although, in a number of the 
cases where they did not suspend, the MFCU ultimately cleared 
the provider of wrongdoing.
    Mr. Costello. Very good. On the issue of program integrity, 
since your work has repeatedly found CMS' oversight of states 
claiming of matching dollars is inadequate to safeguard Federal 
dollars, what more could CMS be doing to ensure the integrity 
of Medicaid matching?
    Ms. Maxwell. There are a number of things along the program 
integrity principles I've outlined that we believe CMS could do 
in conjunction with the states. Given that CMS and states share 
fiscal risk, we believe they should share accountability. So, 
as I mentioned, prevention, helping states implement the 
enhanced provider screening, helping them drive down improper 
payment rates, and then, of course, the data to be able to 
understand the program and detect fraud. And more importantly, 
the data helps us home in on fraud, waste, and abuse and really 
target our oversight activities so that we can get this tricky 
balance right between trying to have really strong program 
integrity but also not put an undue burden on its providers.
    Mr. Costello. I'm going to shift this question to Mr. 
Archambault, but after he answers, anyone else feel free to 
respond, including what you just mentioned about the issue of, 
specifically, enhanced data-matching technology.
    Because it seems to me that if you have technology and you 
have data, when we're talking about the ACA change which only 
requires states to perform one check per year, knowing that we 
have the data, knowing that we're a pretty technologically 
advanced society, it would be, I think, a little bit easier to 
go about detecting ineligibility or fraud or anything of the 
sort to cut down on those who are ineligible from being 
accepted into the Medicaid program.
    Mr. Archambault, I see in your written testimony, in the 
first 10 months of operation, Pennsylvania's award-winning 
Enterprise Program Integrity Initiative identified more than 
160,000 ineligible individuals who were receiving benefits, 
including individuals who were in prison and even millionaire 
lottery winners, resulting in nearly 300 million in taxpayer 
savings.
    What can we do in order to pivot to real-time 
identification of something that doesn't seem quite right, 
rather than just relying on that one moment in time annually, 
to beef up program integrity here?
    Mr. Archambault. So I think there's a number of things that 
the Federal Government can do to enable states to do this.
    The first one is that if they are investing state dollars 
in some of these efforts, if they are able to find cases that 
are ineligible, for them to be able to keep a piece of that 
savings up front and more than they get to save now, given the 
funding formula that we have.
    The other one is let them check more frequently.
    And then the third one is to make sure that the actual data 
that the Federal Government is allowing access to is timely or 
allows states to go somewhere else to get it from a private 
vendor if the Federal Government's data is not timely enough.
    Ms. Maxwell. Yes, I would agree that the coordination and 
sharing of data is critical between the Federal and State 
governments. One area where we found a real problem is, when 
providers are enrolled, they're asked who their owners are so 
we know who we're doing business with. And, in one case, we 
found that the State Medicaid agency thought there were 63 
owners, Medicare thought there were 14 owners, and they told us 
there were 12. So, trying to coordinate this data so all the 
programs know who we're doing business with.
    In addition, we recommend that the Medicare data be 
improved so that Medicaid can actually share that and reduce 
the provider burden, in terms of letting them enroll in both 
different programs.
    Mr. Costello. That gets, Ms. Yocom, to your point about the 
duplicate eligibility issue, correct?
    Ms. Yocom. Yes, it does. And while we are a technologically 
advanced society, the Medicaid program truly is not. States' 
data systems are pretty antiquated, and there is a lot of work 
to do to get good data systems that are more flexible and more 
agile.
    Mr. Westmoreland. If I could, sir, I would also say that 
the recently published managed care organization rule provides 
for a substantial improvement in data systems. And I would ask 
this--and this committee actually accelerated the effective 
date of that with your 21st Century Cures Act.
    I would ask you to keep the MCO rule in mind as you move 
forward with the question of whether regulations will be 
withdrawn in the early part of this--in the early part of this 
administration. I think it's a valuable addition to try to be 
able to find who--I agree with all my colleagues that the data 
systems need to be improved, and I think the MCO rule does 
that.
    Mr. Costello. Thank you all for your comments.
    Mr. Murphy. Thank you.
    And now, recognizing another new member of our committee, 
the owner of Carter's Pharmacy. Is that a place where we might 
see someone like Ellie Walker and Opie serving drinks at the 
Walker's store?
    Mr. Carter. Very much so.
    Mr. Murphy. But understanding of small-town medical care, 
good to have you on board here. Buddy Carter of Georgia's First 
District.
    Mr. Carter. Thank you. Thank you, Mr. Chairman.
    And thank all of you for being here. We appreciate your 
participation.
    I want to preface my questions by apologizing if I ask you 
something you weren't prepared for. And if you don't know the 
answer, if you'll just simply tell me that you can get me the 
answer, that will be fine.
    Ms. Maxwell, I understand, looking at your bio last night, 
that you have some expertise on the 340B program.
    Ms. Maxwell. I do.
    Mr. Carter. I don't want to get into that program; however, 
I want to explain to you a situation that exists in my 
district.
    I have a hospital in my district that was participating and 
receiving moneys from the 340B program, and because they didn't 
meet the threshold, they were put out of that program. Now, 
they got back in it.
    As I understand, there are two different levels that you 
can be at, as a sole community provider and also as a 
disproportionate share.
    Ms. Maxwell. Yes. Those are both covered entities.
    Mr. Carter. OK. Well, they got back in it as a sole 
community, OK? But what the CEO is telling me is that, because 
they can't get back as a disproportionate share, that they're 
losing over $300,000 a month. Now, that is significant for 
them. I'm sure it's significant for anyone, but for this 
hospital system it's very significant.
    Now, he also is telling me that the formula that is used 
for that, that Medicaid participation, the Medicaid rate is 
also in that formula to determine whether they are a sole 
community or whether they're in the disproportionate share.
    And what I'm hearing is that those states that did not 
expand Medicaid, like the State of Georgia, that they are put 
at a disadvantage, in that we aren't eligible for that. Is that 
true? Is that the case?
    Ms. Maxwell. I'm going to have to take your offer to get 
back to you on that.
    Mr. Carter. OK.
    Ms. Maxwell. My expertise really is in the pricing of the 
340B drugs themselves and not as much in this disproportionate 
share. But I know there have been issues, and I certainly know 
there are people in our office that can answer that question, 
and we'll get back to you as soon as we can.
    Mr. Carter. OK. Well, that's fair enough.
    But my question is twofold: first of all, if that is the 
case; secondly, if that was the intention. Was that the 
intention, to penalize states that didn't expand Medicaid so 
that they couldn't receive these dollars, or was it an 
incentive to get those states to expand Medicaid?
    Ms. Maxwell. I couldn't speak to the legislative intent.
    Mr. Carter. OK. Well, please include that in your answer. 
That's one of the things----
    Ms. Maxwell. Absolutely. Will do.
    Mr. Carter. I'm going to move now to Mr. Archambault and 
ask you, the video that you showed there--now, understand, I 
spent 10 years in the Georgia State legislature, all on Health 
and Human Services, so I understand about Medicaid. And we did 
the hospital bed tax in order to draw more dollars down, as was 
brought up by one of my fellow members earlier. In fact, they 
are looking at reauthorizing that again this year. And you 
bring up a valid point about how states balance budgets, 
because, quite honestly, we did it that way, and that was one 
of the reasons why.
    But my question is about the video you showed. Now, I am a 
strong believer that Medicaid should include the aged, blind, 
and disabled. In fact, I think that if--and if you'll help me--
that most of the costs in the Medicaid program can be 
attributed to the ABD. Would that be--and what percentage would 
that be? Seventy, 80 percent?
    Ms. Yocom, do you----
    Ms. Yocom. I think it's at least two-thirds.
    Mr. Carter. At least two-thirds?
    Ms. Yocom. Yes.
    Mr. Carter. OK. And we're all in agreement that that's most 
of it.
    But my question, Mr. Archambault, was why didn't this 
patient--why wasn't this patient eligible as disabled? It would 
seem to me like they wouldn't have had to have waited on the 
waiver.
    Mr. Archambault. So, Congressman, thank you for the 
question. And I think it is important to know that we are 
talking about a couple different things here. What we were 
talking about in particular for her, for Skylar and her mother, 
is that there are some services that she could have access to 
under these waiver programs.
    So, for Skylar, you can't just call a neighbor to babysit. 
You need to have certain skill sets to be able to be able to 
watch her, given her condition. And so this would allow access 
to those services.
    It's not that individuals are completely off of Medicaid; 
it's that we are talking about, are we providing the services 
that we have promised to individuals in a holistic manner to be 
able to take care of these most needy?
    Mr. Carter. OK. Well, understand, again, I am one who 
believes that Medicaid should be taking care of that group. And 
once you get past that, now, we can have a discussion and we 
can debate who's to be covered and who's not to be covered. But 
I honestly believe, as a healthcare professional, that they 
should be covered.
    Mr. Archambault. And, Congressman, that's my exact point, 
is that we are extending new promises to able-bodied, largely 
childless adults before fulfilling that promise.
    Mr. Carter. OK. Good. Thank you for that.
    Very quickly, I'm sorry I don't have much time, Mr. Howard, 
I just wanted to ask you, HHS now projects that newly eligible 
Medicaid patients are going to cost $6,366 per enrollee in 2015 
and that this is a 49-percent increase in what they had 
projected before. Why is that? Why are they costing more?
    Mr. Howard. Congressman, it may be because, in these new 
expansion programs, states have raised their reimbursement 
rates to providers to get these newly eligible populations in 
the system. That's my understanding.
    Mr. Carter. It would appear to me, if the--again, I get 
back to the aged, blind, and disabled. If they were already 
included, they are the most expensive. And why are they--I'm 
sorry. I know I'm running past my time. It just baffles me why 
it's gone up that much.
    Mr. Murphy. OK.
    Mr. Carter. Thank you, Mr. Chairman. I yield back.
    Mr. Murphy. OK. Thank you.
    I'm now going to recognize Mr. Collins for 5 minutes.
    Mr. Collins. Thank you, Mr. Chairman.
    I'm going to be directing this to you, Mr. Howard, but some 
background: I'm western New York, and New York, as we all know, 
is one of the highest states in Medicaid per capita spending 
and total spending. And while New York only has 6 \1/2\ percent 
of the Nation's population, it accounts for over 11 percent of 
the national Medicaid spending. And according to a 2014 report 
from Medicare and CHIP Payment and Access Commission, using 
data from 2011, New York spent 44 percent more per Medicaid 
enrollee than the national average.
    There's all kind of complex and fragmented funding streams 
that make it very difficult to provide adequate accounting 
controls for the program.
    So the question is this: In 2012, a report from the HHS 
Office of the Inspector General revealed that New York had 
systematically overbilled Federal taxpayers for Medicaid 
services for the mentally disabled for 20 years. New York State 
developmental centers, which offer treatment and housing for 
individuals with severe developmental disabilities, had 
received 1.5 million annually per resident in 2009, for a total 
of 2.3 billion. State centers were compensated at Medicaid 
payment rates 10 times higher than the Medicaid rates paid to 
comparable privately run developmental centers.
    So the simple question is, how could these overpayments go 
unnoticed for 20 years?
    Mr. Howard. Congressman, it's because there is simply no 
financial incentive for the states to go back and police their 
systems in a way that would result in a significant decrease in 
Federal funding.
    The State of New York actually settled with HHS, I believe, 
for $1.63 billion for overpayments. I think it was 2009 through 
2011. So, to some extent, the problem was remedied, but the 
reality is, as I said before, the ratchet only goes one way.
    Congresswoman Clarke pointed out earlier that Governor 
Cuomo has had quite a bit of success, which I noted in my 
testimony, in bringing down the payment rate--pardon me, for 
the growth rate for Medicaid. I think if someone who had an R 
by their name had suggested what is effectively for New York 
State a cap on growth of the most nondisabled part of the 
program, that it would be held to 30 percent effectively below 
the historical payment rate for the program, I think there 
would have been cries of poverty and that we'd be throwing 
people out of the program. Miraculously, New York State 
providers found ways to significantly decrease their spending 
by hundreds of millions of dollars.
    I think that the belief that significant flexibilities or 
block grants or per capita caps would automatically mean less 
delivery of care ignores that economists on the right and left 
center of the aisle believe there's significant opportunities 
for efficiency in health care. And until we give states better 
programmatic and financial goals to seek out that efficiency, 
we are not going to be getting the best outcome for every 
dollar we're spending on health.
    Mr. Collins. Well, being a New Yorker and bringing this up, 
I would have to say, while they apparently negotiated a 
significant settlement, it in fact did not reimburse the 
Federal Government for 20 years of egregious behavior which I 
would say was deliberate. You can't be charging 10 times the 
national average for 20 straight years and try to, you know, 
prove that this was not intentional.
    So, you know, we talk about R's and D's. I have to wonder, 
if there wasn't a D behind the President's name and a D behind 
our Governor's name, if that settlement would have come closer 
to reimbursing the U.S. taxpayers for what I think was grand 
theft auto.
    So another question about New York. Well, by the way, the 
reason I come at this the way I do, as a county executive of 
Erie County, largest upstate county, we're one of only a 
handful of states where the counties have to pay a share. And, 
by the way, on DSH and IGT for UPL, the counties pay 100 
percent of the Federal match. The state pays nothing.
    In the case of Erie County, my county, second, third, 
fourth city in the United States, city of Buffalo, 110 percent 
of our property taxes went to Medicaid. We couldn't raise 
enough property tax to even pay our county's share of Medicaid 
because of the way New York State runs this program. We had to 
supplement it with sales tax revenue. That's why I get a little 
emotional when I find out the state's been cheating for 20 
years, especially the way they handle the counties.
    But, also, as I understand it, in a 2009 report, New York 
State ranked last in affordable hospital admissions--last. So 
our outcomes are so poor. What is going on in New York? And 
we've only got 20 seconds, but----
    Mr. Howard. Just very quickly, I think there's also 
consensus that the amount of spending we put on health care 
does not automatically correlate to better outcomes. So if you 
look at a scatter plot of state spending per enrollee, it's all 
over the map, and outcomes are all over the map, because 
there's an increasing body of research that says health 
behaviors, not access to care, not insurance, dictate long-term 
health outcomes. We just need to think about health 
differently.
    Mr. Collins. And I couldn't agree more that there's no 
correlation between spending and outcome.
    Thank you very much for your testimony.
    Mr. Murphy. We now recognize the chairman of the full 
committee. Welcome back. Mr. Walden, you are recognized for 5 
minutes.
    Mr. Walden. Thank you, Mr. Chairman, and thank you for 
conducting this oversight hearing.
    I want to thank our witnesses today for your extraordinary 
testimony. It's very valuable in the work we're engaged in.
    I want to focus on data and high risk, and especially to 
both the GAO and to the HHS OIG. Because my understanding is 
for 14 years running Medicaid has been on your high-risk list 
for a problem. What's behind that? Is that because CMS does not 
collect the right data to begin with?
    Ms. Yocom. I think there's a couple of things behind it. 
One is the nature of the partnership itself, that by the time 
the Federal Government is reviewing expenditures, the 
expenditures have occurred, so that prevention-the ability is--
--
    Mr. Walden. That's always lacking?
    Ms. Yocom [continuing]. Always challenging.
    The second piece really is about data. You simply cannot 
run a program this large when you can't tell where the money is 
going and where it has been. We need better data.
    Mr. Walden. And so have you made recommendations to CMS to 
collect better data, and have they ignored those 
recommendations? Or what's the issue there?
    Ms. Yocom. We have a report coming out in just a few days 
that might answer that question a little more fully, but I 
think Ms. Maxwell can now.
    Mr. Walden. Well, feel free to go ahead and share it today 
if----
    Ms. Maxwell. The IG has been focused on this area for quite 
some time. We have followed the evolution of the national data 
and continue to push CMS to create a deadline for when they 
think that data will be available, specifically for program 
integrity reasons.
    Mr. Walden. So one of the issues that's come up in the 
press is this issue of woodworking. Everybody's trying to count 
numbers here. And I like what you said about let's get to 
quality outcomes, but off that for a minute. So there's this 
issue of woodworking, how many people are eligible before that 
are being counted now as if they're new eligibles.
    And my question is, do we know that answer? And, second, 
are there states that are getting reimbursed at a higher rate, 
as if we were paying for newly eligibles at what would be, 
what, a 95 percent rate now, when in fact those individuals 
were actually always eligible and the state should be 
compensated at a lower rate?
    Do we know any data surrounding that, how many people are 
actually, quote/unquote, woodworking? Have states been 
reimbursed at a higher rate when they should have been 
reimbursed at a lower rate?
    Ms. Maxwell. I can't speak to the working number 
specifically. I can tell you the IG has the same question that 
you have, and we have work underway to answer that exact 
question. So are states pulling down reimbursement for eligible 
beneficiaries as if they were in the newly eligible category--
--
    Mr. Walden. Correct.
    Ms. Maxwell [continuing]. When, instead, they should have 
been enrolled in traditional Medicaid? That work will be 
forthcoming.
    Mr. Walden. Do you have a timeline on when you think you 
may have answers for us on that?
    Ms. Maxwell. We have four states that we're looking at. The 
first two states probably in the next couple of months, and 
then the other two probably later in the year.
    Mr. Walden. Can you reveal what those four states are?
    Ms. Maxwell. I can if you give me a minute.
    Mr. Walden. OK.
    Ms. Yocom. And while she----
    Mr. Walden. Ms. Yocom?
    Ms. Yocom [continuing]. Is looking, we did issue some work 
that looked at this question, and we did identify some issues 
where it appeared that people were not accurately categorized 
by whether they received the 100-percent match or a state 
expansion match or their regular FMAP. We did identify problems 
there.
    And one of the recommendations that is still outstanding in 
this area has to do with the fact that CMS adjusted the 
eligibility differences but then did not circle back and 
correct the financing that occurred. So we think those two 
things need to be related. If you identify an eligibility 
issue--either way, if the matching rate is off, it should be 
corrected.
    Mr. Walden. Yes.
    Ms. Yocom. CMS is starting to look at that, but----
    Mr. Walden. It could be a big number. We don't know. But 
it's an important thing to get right.
    I remember I spent about 4 \1/2\, 5 years on a community 
hospital board at a time when the Federal Government decided to 
go after virtually every hospital and allege billing 
misbehavior, shall we say, going back, I don't know, 8, 9, 10 
years. And the threat to the hospitals was, we will use the 
RICO statute because you have engaged in criminal practice 
because of multiple cases.
    And it just strikes me that they were willing to do that 
there. Everybody had to settle, because nobody wanted to go 
down that path. We know the government sometimes gets it wrong, 
but, oh, we'd never go after the government with RICO.
    What is happening here with these states I guess is a 
legitimate question when we've got people that are aged, blind, 
disabled waiting to get on? Are we--and a limited resource. And 
we don't have the data. That's what you're telling me, isn't 
it?
    Ms. Maxwell. Yes. And I have the states. So we will have 
data on the four States, and they are Kentucky, California, New 
York, and Colorado.
    Mr. Walden. Kentucky, California, New York, Colorado. And 
your timeline, again, to probably conclude your analysis?
    Ms. Maxwell. The first couple will be probably be final in 
the next month or two, and then the final two will be later 
this year.
    Mr. Walden. All right.
    Ms. Maxwell. We'll be sure to let you know.
    Mr. Walden. And if we could do one thing with CMS to help 
you be able to do your job the way you want to do it, what 
would that be, Ms. Yocom?
    Ms. Maxwell. Oh, I hate to keep saying it, but it's got to 
be the data. We just absolutely need the data.
    Mr. Walden. Ms. Yocom, same?
    Ms. Yocom. Yes, I would agree.
    Mr. Walden. OK. If there are specific items related to 
data, please get those to us. I'll be happy to work with the 
incoming CMS Administrator, and we will do our best to get you 
the data. Because it's important to all of us for our 
decisionmaking. And we know we have people waiting on the list, 
can't get access to care. And we've got to get the waste and 
the fraud out. We've got to get them off this risk list.
    Thank you very much for your testimony.
    Mr. Chairman, thanks for your leadership on this.
    Mr. Murphy. The chairman yields back.
    I have one more question I want to ask Mr. Howard. And this 
relates to trying to find some other ways of saving money and 
providing more effective care within Medicaid. And it has to do 
with more alternative payment models as a way to reduce costs. 
That being physicians, providers, hospitals are paid to take 
care of the patient, as opposed to a fee for service, which is 
every time someone shows up, you bill them. It's sort of like 
paying a carpenter based upon how many nails he puts in a 
house. He'll put a lot of nails in that house.
    Whereas, an alternative payment model, whether it is making 
calls to the patient to check up on their medication, to remind 
them of their appointment, to counsel them, to keep them out of 
the emergency room, to get effective care, those sort of 
approaches.
    So I'm thinking, in linking with the Medicaid amount, HHS 
estimated the improper payments from Medicaid amounted to 30 
billion in 2015, with an error rate hovering around 10 percent. 
At the same time, studies like the Oregon Medicaid Experiment 
showed that Medicaid coverage does not necessarily result in 
better health outcomes, as we talked about before.
    So what do you think about these alternative payment models 
as a way of saying that the skin in the game is also the 
physicians and hospitals, to make sure that they are doing all 
they can to keep the patients healthy?
    Mr. Howard. Absolutely, I think that experimenting with 
these models is critical. You need the data to be able to 
understand who is the best provider. We talk a lot about waste, 
fraud, and abuse. That's certainly a big problem. But estimates 
from even people like Donald Berwick are that 20, potentially 
30 percent of care is either ineffective or wasted.
    And there are providers that we know are doing terrific 
jobs at a fraction of the cost; hospitals across the street 
from another hospital providing care more efficiently. If we 
had data transparency, we could encourage more competition 
among those across these payment models.
    Mr. Murphy. Can you get us information on how you would see 
those things worked out?
    Mr. Howard. Absolutely.
    Mr. Murphy. The committee would appreciate that.
    Ms. DeGette, do you have a followup comment?
    Ms. DeGette. I just had a couple comments, Mr. Chairman.
    The first thing is that here's something we can agree on in 
a bipartisan way, is getting you folks the data that you need. 
So I'll just echo what Mr. Walden said. Whatever specific 
suggestions you have, let us know. And, also, I'm assuming that 
you need that staffing, that if we freeze your hiring, that's 
going to be a problem.
    I just want to make a couple of comments about the Medicaid 
expansion, which is, first of all, a lot of people--I keep 
hearing people today say that we really want to make sure that 
people who have chronic and severe diseases, like the videotape 
we saw, get services, and that's absolutely true. And then 
people on the other side keep talking about able-bodied adults.
    And I would just point out that 80 percent of the people 
who are getting the Medicaid expansion are working. So, you 
know, they might be able-bodied adults, but they have jobs, and 
they were uninsured before because either their employers 
didn't offer insurance or because the insurance that they could 
get was too expensive. And so these people were going without 
health care, which, as Mr. Westmoreland and others said, that 
just increases the costs for everybody because of the costs of 
uncompensated care.
    And if there's ways--I was just talking to Mrs. Brooks 
about this. If there's ways that we can find efficiencies in 
the program--all of us are for more efficiencies, and we're for 
delivering health care in a more cost-effective way, not just 
within Medicaid but within private insurance too. And this is 
something, again, I think that we could work in a bipartisan 
way to make this happen. But just to say, well, we shouldn't 
give the Medicaid expansion because these people are, quote, 
``able-bodied'' adults is not understanding who's getting it.
    I just want to close with an email that I got from my best 
friend from South High School in Denver, Colorado. We are not 
spring chickens anymore. And here's what my friend Lori 
Dunkley--she sent this to me a couple weeks ago, without 
solicitation. She just sent it to me.
    ``I just want to add my story to others you are hearing 
about the Affordable Care Act. I was laid off during the 
recession and lost a lot of my retirement stability. Then, at 
age 54, I looked for a job for 3 years without success. I had 
no health insurance. Finally, I fell back on my journalism 
skills and landed work writing for several neighborhood papers. 
This has worked out fine, but only because of getting insurance 
through the ACA. I make very modest money, and so I qualify for 
the expanded Medicaid program. What a godsend. Since I am not 
yet Medicare age but too old for the job market, I don't know 
what I'd do without this help.''
    This is the people that we're talking about. So we have to 
figure out how we're going to give health care to the 11 to 12 
million people who have gotten health care because of this 
Medicaid expansion. That's what we're talking about.
    Thank you, Mr. Chairman.
    Mr. Murphy. The gentlewoman yields back.
    And this will bring to a conclusion this hearing of the 
Subcommittee on Oversight and Investigations. I'd like to thank 
the witnesses and all members that participated in today's 
hearing.
    I remind members they have 10 business days to submit 
questions for the record, and I ask the witnesses all agree to 
respond promptly to the questions.
    Thank you so much for being here.
    And, with that, this subcommittee is adjourned.
    [Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Greg Walden

    Thank you, Mr. Chairman. And welcome to the first E&C 
hearing of the 115th Congress. Today, we are taking a closer 
look at the Medicaid program to ensure the program is operating 
effectively, that Americans who are eligible for the program 
have access to, and actually receive, the quality care that 
they deserve, and that tax dollars are spent appropriately.
    In Fiscal Year 2015, total spending of the Medicaid program 
was $509 billion, 62 percent of that was paid for by the 
federal government. According to the Congressional Budget 
Office, the federal share of Medicaid spending is expected to 
rise significantly over the next decade.
    While Medicaid provides coverage to millions of low-income 
and disabled Americans, the program is not immune to 
challenges--including increasing costs, fraud, and errors with 
eligibility determination that result in millions of wasted 
taxpayer dollars. Meanwhile, some of America's most frail and 
needy citizens remain on waiting lists. We need to ensure that 
eligible beneficiaries of the program have access to high 
quality care, while being good stewards of hardearned taxpayer 
dollars.
    This hearing is an important part of the continued 
oversight that our committee, the Inspector General and the 
Government Accountability Office have conducted over this vast 
program.
    All of us here today agree that Medicaid is an essential 
program for the population that it serves. With Medicaid 
expansion, and the rapid growth of the program, we can't shy 
away from asking the tough questions. Program integrity and 
oversight are vital to ensure we don't get stuck in an `auto-
pilot' spending pattern that doesn't serve the beneficiaries of 
the program by improving their overall health outcomes.
    We look forward to a productive dialogue with our witnesses 
today, to discuss the troubling findings in the reports and 
audits conducted by the GAO and HHS OIG. We also hope to 
examine the effects that Medicaid expansion has had on states' 
budgets and beneficiaries.
    Tomorrow, our Health Subcommittee will hold a hearing 
focused on solutions to fix some of the problems plaguing the 
Medicaid program. And on Thursday, our Health Subcommittee will 
examine insurance reforms. It's an important first week back in 
the hearing room as we explore ways to rebuild our health care 
system.
    I would like to thank the witnesses for testifying today 
and look forward to hearing from this distinguished panel.
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