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

             EXAMINING THE EXTENSION OF SAFETY NET HEALTH PROGRAMS

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

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 JUNE 23, 2017

                                   __________

                               Serial No. 115-41

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

                                  __________

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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 Health

                           MICHAEL C. BURGESS, Texas
                                     Chairman
    BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
      Vice Chairman                        Ranking Member
    JOE BARTON, Texas                    ELIOT L. ENGEL, New York
    FRED UPTON, Michigan                 JANICE D. SCHAKOWSKY, Illinois
    JOHN SHIMKUS, Illinois               G.K. BUTTERFIELD, North Carolina
    TIM MURPHY, Pennsylvania             DORIS O. MATSUI, California
    MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
    CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
    LEONARD LANCE, New Jersey            BEN RAY LUJAN, New Mexico
    H. MORGAN GRIFFITH, Virginia         KURT SCHRADER, Oregon
    GUS M. BILIRAKIS, Florida            JOSEPH P. KENNEDY, III,
    BILLY LONG, Missouri                     Massachusetts
    LARRY BUCSHON, Indiana               TONY CARDENAS, California
    SUSAN W. BROOKS, Indiana             ANNA G. ESHOO, California
    MARKWAYNE MULLIN, Oklahoma           DIANA DeGETTE, Colorado
    RICHARD HUDSON, North Carolina       FRANK PALLONE, Jr., New Jersey (ex
    CHRIS COLLINS, New York                  officio)
    EARL L. ``BUDDY'' CARTER, Georgia
    GREG WALDEN, Oregon (ex officio)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Michael C. Burgess, a Representative in Congress from the
      State of Texas, opening statement..............................     1
        Prepared statement...........................................     3
    Hon. Gene Green, a Representative in Congress from the State of
      Texas, opening statement.......................................     4
    Hon. Greg Walden, a Representative in Congress from the State of
      Oregon, opening statement......................................     6
        Prepared statement...........................................     7
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     8

                                   Witnesses

    Michael Holmes, Chief Executive Officer, Cook Area Health
      Services.......................................................    11
        Prepared statement...........................................    13
        Answers to submitted questions...............................   111
    Jami Snyder, Associate Commissioner for Medicaid/SCHIP Services,
      State of Texas, Health and Human Services Commission...........    17
        Prepared statement...........................................    19
        Answers to submitted questions...............................   126
    Cindy Mann, Partner, Manatt Health...............................    24
        Prepared statement...........................................    26

                               Submitted Material

    Statement of the Children's Community Association, submitted by
      Mr. Green......................................................
    Statement of the North American Society for Pediatric
      Gastroenterology, Hepatology, and Nutrition....................    71
    Statement of Children's Health Groups, submitted by Mr. Lujan....
    Statement of the American Academy of Dermatology Association,
      submitted by Mr. Burgess.......................................    74
    Statement of America's Essential Hospitals, submitted by Mr.
      Burgess........................................................    76
    Statement of American Academy of Family Physicians, submitted by
      Mr. Burgess....................................................    78
    Statement of America's Health Insurance Plans, submitted by Mr.
      Burgess........................................................    83
    Statement of the Healthcare Leadership Council, submitted by Mr.
      Burgess........................................................    88
    Statement of support from Minnesota House Members, submitted by
      Mr. Burgess....................................................    90
    Statement of support from 1,200 local state and national
      organizations, submitted by Mr. Burgess........................    92

             EXAMINING THE EXTENSION OF SAFETY NET HEALTH PROGRAMS

                                  ----------

                             FRIDAY, JUNE 23, 2017

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:23 a.m., in
    room 2123, Rayburn House Office Building, Hon. Michael Burgess,
    M.D. (chairman of the subcommittee) presiding.
        Present: Representatives Burgess, Guthrie, Barton, Upton,
    Shimkus, Murphy, Lance, Griffith, Bilirakis, Mullin, Hudson,
    Collins, Carter, Walden (ex officio), Green, Engel, Schakowsky,
    Butterfield, Matsui, Castor, Sarbanes, Lujan, Schrader,
    Kennedy, Cardenas, Eshoo, DeGette, and Pallone (ex officio).
        Also Present: Representatives Costello, Dingell, and Ruiz
        Staff Present: Zachary Dareshori, Staff Assistant; Jordan
    Davis, Director of Policy and External Affairs; Paul Edattel,
    Chief Counsel, Health; Adam Fromm, Director of Outreach and
    Coalitions; Caleb Graff, Professional Staff Member, Health; Jay
    Gulshen, Legislative Clerk, Health; Peter Kielty, Deputy
    General Counsel; Alex Miller, Video Production Aide and Press
    Assistant; Mark Ratner, Policy Coordinator; Kristen Shatynski,
    Professional Staff Member, Health; Jennifer Sherman, Press
    Secretary; Josh Trent, Deputy Chief Counsel, Health; Jacquelyn
    Bolen, Minority Professional Staff Member; Jeff Carroll,
    Minority Staff Director; Waverly Gordon, Minority Health
    Counsel; Jerry Leverich, Minority Counsel; Rachel Pryor,
    Minority Health Policy Advisor; Tim Robinson, Minority Chief
    Counsel; Samantha Satchell, Minority Policy Analyst; Andrew
    Souvall, Minority Director of Communications, Outreach and
    Member Services; and C.J. Young, Minority Press Secretary.

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

        Mr. Burgess. The Subcommittee on Health will now come to
    order. The chair wishes to observe that today's hearing was
    originally scheduled to occur last Wednesday morning. But on
    that Wednesday morning, the Capitol Hill family and the entire
    country was shocked and horrified to learn about an awful
    attack that took place against our own. This past week has been
    sobering and difficult for all of us in many different ways, a
    number of friends, indeed. A member of this very committee is
    still in the hospital. They continue to need our prayers and
    best wishes as they fight to heal, to recover, and, in coming
    days, join us again. Last week's awful tragedy reminds us that
    what unites is more important than what divides us. We are not
    first Democrats or Republicans, we are Americans. We love our
    country, and we respect our colleagues. We are saddened, but we
    are strong. We are troubled, but we will unite around our
    common duty and our common service to our fellow countrymen
    that spirit of unity.
        Pause for just a brief moment of quiet reflection for
    those, especially the member of the committee who is not able
    to be here today. But, of course, we still have other people
    who are recovering from their injuries.
        The chair will recognize himself 5 minutes for an opening
    statement.
        In 2015, this committee passed the Medicare Access and CHIP
    Reauthorization Act--you are welcome--which extended funding
    for many of the Nation's safety net programs, including the
    community health center funding and the State Children's Health
    Insurance Program. With funding for both the community health
    center fund and the SCHIP program set to expire yet again at
    the end of this fiscal year, our committee has the
    responsibility of taking a critical look at how these programs
    operate, and setting out a long-term path to funding, and,
    perhaps, reauthorization.
        The Community Health Center Fund plays an important role in
    supplementing the services that federally qualified health
    centers are able to deliver to underserved communities by
    providing care to all Americans regardless of income,
    regardless of ability to pay. Additionally, the Community
    Health Center Fund provides resources for the National Health
    Service Corps which actually provides scholarships and loan
    repayment opportunities to new doctors willing to serve in
    medically underserved areas. This program has proven effective
    at placing providers, providers who are young and energetic and
    willing to work hard in some of the most medically unserved and
    challenging areas.
        The State Children's Health Insurance Program provides
    healthcare coverage to over 8 million children across the
    Nation through flexibility capped allotments to states. The
    program has been able to successfully support children while
    providing states with opportunities to tailor their respective
    programs as to best meet the needs of their populations.
    However, the programs are not without challenges. In regards to
    the Community Health Center Fund, we are interested in seeing
    how federally qualified health centers can best maximize this
    investment. Succeeding in underserved areas can be difficult,
    and I look forward to learning more as to how the federally
    qualified health center can continue to deliver results and
    where improvements might be made.
        As for the State Children's Health Insurance Program, there
    are multiple points for consideration. As is the case with
    other Federal insurance programs, there are considerable
    concerns regarding the long-term sustainability of the program.
    Following the passage of the Affordable Care Act, the program's
    Federal match rate rose an unprecedented 23 percent, providing
    some states with as much as a 100 percent Federal match. This
    increase in funding has challenged the program by both shifting
    the nature of shared responsibility of the State Children's
    Health Insurance Program to the Federal Government and making
    states more dependent on Federal dollars.
        The issue is further complicated by concerns raised by the
    Congressional Budget Office on the efficacy of the enhanced
    match rate. According for the Congressional Budget Office, an
    elimination of the enhanced match rate would basically not
    impact coverage rates for children in the country, while a
    continuation of the enhanced funding would add another $7 1A\1/
    2\ billion to the deficit over the next 5 years if no other
    policies were undertaken to offset its cost.
        So today's hearing should focus on how to best proceed with
    the Affordable Care Act's increased funding for the State
    Children's Health Insurance Program, the increased funding
    rate, and what a continuation of this funding would mean for
    taxpayers, and what it would mean for covered children.
        With these challenges before us, I would like to welcome
    our witnesses and thank them again for joining us today, thank
    them for their forbearance as the hearing got rescheduled
    twice.
        On the CHIP front, we have Ms. Jami Snyder who serves as
    the Associate Commissioner for Medicaid and CHIP in my home
    State of Texas, and Ms. Cindy Mann who served the
    administration as the administrator and director of the Center
    for Medicaid and CHIP services at the Center for Medicare and
    Medicare Services from 2009 to 2014. I am interested in hearing
    today how each of your experiences on both sides of this
    partnership has worked, and where you believe we can improve
    the ability of states to meet the needs of children in the
    program.
        And finally, Mr. Michael Holmes serves as the CEO of Cook
    Area Health Services, which I believe is in Minnesota. And as
    the treasurer for the National Association of Community Health
    Centers, Mr. Holmes, I look forward to your testimony today on
    the role that the Community Health Center Fund has played in
    supporting your work. There is much to discuss today. I look
    forward to our conversation. Both the Community Health Center
    Fund and the State Children's Health Insurance Program provide
    State and local opportunities to improve access to care in the
    United States.
        I yield back the balance of my time, and recognize the
    ranking member of the subcommittee, Mr. Green of Texas, 5
    minutes for an opening statement, please.
        [The prepared statement of Mr. Burgess follows:]

                 Prepared statement of Hon. Michael C. Burgess

        The Subcommittee will come to order.
        The Chairman will recognize himself for an opening
    statement.
        In 2015, this Committee passed the Medicare Access and CHIP
    Reauthorization Act, which extended funding for many of the
    nation's safety net programs, including the Community Health
    Center Fund and the State Children's Health Insurance Program
    (SCHIP). With funding for both the Community Health Center Fund
    and the SCHIP program set to expire yet again at the end of the
    fiscal year, our Committee has the responsibility of taking a
    critical look at how these programs operate and setting out a
    long-term path to reauthorization.
        The Community Health Center Fund plays an important role in
    supplementing the services that Federally Qualified Health
    Centers (FQHCs) are able to deliver to underserved communities
    by providing care to all Americans, regardless of income or
    ability to pay. Additionally, the Community Health Center Fund
    provides resources for the National Health Service Corps, which
    provides scholarships and loan repayment opportunities to new
    doctors willing to serve in medically underserved areas. This
    program has proven incredibly effective at placing providers,
    often those who are young, energetic and willing to work hard,
    in the most medically underserved areas.
        The SCHIP program provides health care coverage to over 8
    million children across the nation. Through flexible capped
    allotments to the States, the program has been able to
    successfully support children while providing States with
    opportunities to tailor their respective programs as to best
    meet the needs of their respective populations.
        However, these programs are not without challenges. In
    regards to the Community Health Center Fund, we are interested
    in seeing how FQHCs can best maximize this investment.
    Succeeding in underserved areas can be difficult, and so I look
    forward to learning more as to how FQHCs can continue to
    deliver results and where improvements to the program can be
    made.
        As for the State Children's Health Insurance Program, there
    are multiple points for consideration. As is the case with
    other federal insurance programs, there are considerable
    concerns regarding the long- term sustainability of the
    program. Following the passage of the Affordable Care Act, the
    program's federal match rate rose an unprecedented 23%,
    providing some states with as much as a 100% federal match.
    This increase in funding has challenged the program by both
    shifting the nature of the shared responsibility of SCHIP to
    the federal government, and by making states more dependent on
    federal dollars.
        This issue is only further complicated by concerns raised
    by the Congressional Budget Office (CBO) on the efficacy of the
    enhanced match rate. According to the CBO, an elimination of
    the enhanced match rate would basically not impact coverage
    rates for children in the country, while a continuation of the
    enhanced funding would add an additional $7.2 billion to the
    deficit over the next five years if no other policies were
    adopted to offset its cost. Therefore, today's hearing should
    focus on how best to proceed with ACA's increased SCHIP funding
    rate and what a continuation of this funding would mean for
    taxpayers and for covered children.
        With these challenges before us, I would like to welcome
    our witnesses and thank them for joining us today as we unpack
    these important issues:
        On the CHIP front, we have Ms. Jami Snyder who serves as
    the Associate Commissioner for Medicaid and CHIP in my home
    state of Texas and Ms. Cindy Mann, who served as the
    Administrator and Director of the Center for Medicaid and CHIP
    Services at the Centers for Medicare and Medicaid Services
    (CMS) from 2009 to 2014. I am interested in hearing today how
    each of your experiences on either side of this has partnership
    worked, and where you believe that we can improve the ability
    of States to meet the needs of children covered under the
    program.
        And finally, Mr. Michael Holmes serves as the CEO of Cook
    Area Health Services and as the Treasurer for the National
    Association of Community Health Centers. Mr. Holmes, I look
    forward to your testimony today on the role that the Community
    Health Center Fund has played in supporting your work.
        There is much to discuss today, and I look forward to our
    conversation on these programs. Both the Community Health
    Center Fund and the State Children's Health Insurance Program
    provide state and local opportunities to improve access to care
    in the United States.

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

        Mr. Green. Thank you, Mr. Chairman. And, again, we
    appreciate the loss we had, the injuries you had, and
    particularly to our committee member, last week. But I am glad
    he is progressing very well. The Children's Health Insurance
    Program, CHIP, and Federally Qualified Health Centers, FQHCs,
    are critical components of our healthcare safety net. Funding
    for both expires at the end of this fiscal year, and timely
    reauthorization is utterly critical. That said, we cannot talk
    about either without talking about Medicaid, and, literally,
    the elephant in the room. The American Health Center Act, or
    TrumpCare, guts Medicaid, makes structural changes that would
    inevitably lead to the rationing of care after seeing the House
    Republican's bill to kick off 14 million enrollees on Medicaid,
    cut 834 billion from programs, the Senate plan to kick even
    more kids off of Medicaid over time, and make even steeper cuts
    somehow managing to be more mean than even the House bill.
        In 3 years, the Senate bill will start the process of
    kicking millions off their Medicaid coverage. And then as if
    that wasn't enough, starting in 2025, the plan leads to even
    more Medicaid cuts that every year becomes deeper cuts than the
    year before. CHIP is designed to sit on top of a strong
    Medicaid program, and reauthorizing it while simultaneously
    destroying Medicaid is simply unacceptable.
        TrumpCare jeopardizes coverage for millions of kids with
    Medicaid and CHIP, and the Trump budget doubles down on cuts
    that directly hurt kids. To make matters worse, the Trump
    administration's budget proposals, an additional $610 billion
    cuts to Medicaid, eliminates enhanced CHIP matching for states,
    rolls back the requirement on states to maintain current kids'
    eligibility in CHIP, and cuts support for CHIP kids over 250
    percent of the Federal poverty level.
        More than \1/3\ of all children in the U.S. and almost half
    the kids under age 6 are covered by Medicaid or CHIP. The vast
    majority of these children, more than 90 percent, are covered
    by Medicaid.
        I strongly support CHIP and will continue to urge my
    colleagues to fully extend the program for 5 years. And I have
    long championed community health centers and want to see the
    health center fund extended for the same amount of time.
    Without an extension of funding, the health center program will
    be decimated. Given all the uncertainly my colleagues are
    introducing in the health insurance programs, a clean extension
    of these two pillars of the healthcare safety net is of utmost
    importance. But again, extending these programs without
    destroying Medicaid is unacceptable. CHIP stands on the
    shoulders of a strong Medicaid program. And in fiscal year
    2016, Medicaid provided more than 40 percent of the community
    health center's funding. They are tied together as three legs
    on a stool that helps children get healthcare they need. No
    child should be left off worse because of Congress's actions.
        With that, Ms. Chairman, I would like to yield 1 minute to
    my colleague from Massachusetts, Joe Kennedy. And after
    Congressman Kennedy, I yield the remainder of my time to
    Congresswoman DeGette.
        Mr. Kennedy. Thank you to the ranking member.
        Ladies and gentlemen, anybody who has welcomed a child into
    this world knows that moment when you lock your eyes with your
    son or daughter the first time, the promise that you make to
    protect them under any circumstance. You learn quickly,
    sometimes far too quickly, that no matter how hard you try,
    nature will test the strength of that promise because children
    are not immune to an unexpected accident or a life-altering
    diagnosis. Facing that tragic reality, we as a country and as a
    community invest in their care through CHIP, through Medicaid,
    through a ban on lifetime caps into a strong community health
    center program. It is that recognition that our children are
    society's most precious resource that brings us together here
    this morning. But TrumpCare threatens the fundamental guarantee
    of compassion for our kids. It segregates and stigmatizes
    children not just for their illness, but for the fate and
    fortune of their family. And that is a vision that, for our
    healthcare system on our Nation, that we should never accept.
        Thank you, and I yield back.
        Ms. DeGette. Thank you.
        We used to all agree in this country that every child,
    regardless of his or her parents' income, should have a chance
    at a healthy start. That is why we have been working in a
    bipartisan way to make this country get closer to that goal. I
    worked on the very first CHIP bill in 1999. And because of the
    bipartisan collaboration, 95 percent of Americans children have
    coverage. That is an all-time high. So why would Congress pass
    this TrumpCare bill which will take coverage away from over 3
    million children? There would be an unprecedented $834 billion
    cut in Medicare which covers more than 35 million kids. Half of
    the 9 million children in CHIP are actually in Medicaid. And
    so, Mr. Chairman, it is really hard for me to see how we can
    have a bipartisan reauthorization of CHIP by the end of
    September without a strong bedrock foundation of Medicaid.
        I yield back.
        Mr. Burgess. The gentleman from Texas yields back his time.
    The chair thanks the gentleman. The chair recognizes the
    gentleman from Oregon, Mr. Walden, 5 minutes for an opening
    statement, please.

      OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF OREGON

        Mr. Walden. I thank the chairman.
        Today marks a really important step forward in this
    committee's work to strength our healthcare safety net by
    examining the extension of two very important safety net
    programs. Both the Children's Health Insurance Program, CHIP,
    the Community Health Center Program, have enjoyed strong
    bipartisan support for many years. Under current law, Congress
    needs to renew funding for these important programs, since the
    current funding streams will soon expire. We recognize that
    CHIP and community health centers play a significant role in
    the Nation's safety net for millions of Americans, for millions
    of American children, and pregnant women who are generally low-
    to moderate-income, and millions of individuals who may be
    medically underserved or face other barriers to care.
        Individuals and families served by these programs are not
    just program enrollees: They are our neighbors. They are our
    friends. In my district alone, there are 12 federally-qualified
    health center organizations with 63 delivery sites leveraging
    more than $41 million in Federal money in order to serve over
    240,000 patients. In many parts of rural eastern Oregon, a
    health center can serve as the main primary care provider in
    the communities that face a shortage of private practice
    doctors. And in three of my counties, there are no physicians,
    and there are no hospitals. The Student Loan Repayment
    Incentive offered through the National Health Service Corps
    also helps staff those centers and ensure patients in those
    communities can see a provider in a timely manner. So I am glad
    to be here and join my colleagues, hopefully on both sides of
    the aisle, in moving this process forward. We are united in the
    effort to protect patients and to support innovative patient-
    centered solutions at state and local levels.
        As a result, there are strong bipartisan recognition that
    CHIP and the health center program play key roles in our
    Nation's healthcare delivery system by providing health
    coverage and medical care for millions of low income Americans.
        Both programs have demonstrated successes in helping reduce
    cost for patients and families, improve health outcomes, and
    deliver cost-effective care. We view our state and local
    partners in these programs as key allies in the common cause of
    putting patients first. This is a shared responsibility.
        In my State of Oregon, our health centers partner with
    local providers, health systems, and the patient community
    through coordinated care organizations that work to provide
    comprehensive services focusing on prevention, chronic disease
    management, and locally controlled patient-centered care.
        Today, we start our funding extension discussion by hearing
    from experts who have firsthand experience running CHIP
    programs and health centers. We want to better understand if
    these programs face barriers to innovation. We want to hear
    creative strategies to deliver quality care, and we seek your
    guidance on what is working and what is not.
        As we move forward, this committee also faces important
    considerations regarding extending funding for these programs.
    There are decisions to be made regarding how much funding
    should be provided, for how long, and how Congress should pay
    for it so as not to burden the next generation with additional
    debt.
        Particularly, the committee will closely examine the
    question of whether the 23 percent bump for a state's match for
    CHIP is appropriate to continue as we look at funding
    questions. I have concerns the 23 percent increase upends the
    traditional financial Federal-state partnership.
        As we embark on this effort, I know we all share the goals
    reducing cost and ensuring patients served by these programs
    have the peace of mind that they can continue to access timely,
    high quality care. And it goes without saying that this needs
    to be bipartisan. We look forward to working with our
    colleagues on the other side of the aisle. And it is important
    to note as well that CHIP is one of those programs that is
    actually a block grant to the states that seems to perform
    quite well when we rely on our state partners in this effort.
        So with that, Mr. Chair, unless others on our side seek the
    balance of my time, I am more than happy to yield back to get
    on with the hearing.
        [The prepared statement of Mr. Walden follows:]

                     Prepared statement of Hon. Greg Walden

        Today marks an important step forward in this committee's
    work to strengthen our health care safety net by examining the
    extension of two popular safety net programs. Both the
    Children's Health Insurance Program (CHIP) and the Community
    Health Center Program have enjoyed strong bipartisan support
    for many years. However, under current law, Congress needs to
    provide additional funding for these programs since current
    funding streams will soon expire.
        We recognize that CHIP and community health centers play a
    significant role in our nation's safety net for millions of
    Americans--children and pregnant women who are largely low-to-
    moderate income, and millions of individuals who may be
    medically underserved or face other barriers to care.
        Individuals and families served by these programs are not
    just program enrollees--they are our neighbors, and friends. In
    my district alone, there are 12 federally-qualified health
    center organizations, with 63 delivery sites leveraging over
    $41 million in federal dollars in order to serve over 240,000
    patients. In many parts of rural Eastern Oregon, a health
    center can serve as the main primary care provider in the
    communities that face a shortage of private practice doctors.
    The student loan repayment incentives offered through the
    National Health Service Corps also help staff those Centers and
    ensure patients in those communities can see a doctor in a
    timely manner.
        So I am glad to be here and join my colleagues on both
    sides of the aisle in moving this process forward. We are
    united in the effort to protect patients and to support
    innovative, patient-centered solutions at the state and local
    levels.
        As a result, there is strong bipartisan recognition that
    CHIP and the Health Center Program play key roles in our
    nation's health care delivery system by providing health
    coverage and medical care for millions of low-income Americans.
    Both programs have demonstrated successes in helping reduce
    costs for patients and families, improve health outcomes, and
    deliver cost-effective care.
        We view our state and local partners in these programs as
    key allies in the common cause of putting patients first. In
    Oregon, our health centers partner with the local providers,
    health systems, and the patient community through Coordinated
    Care Organizations that strive to provide comprehensive
    services focusing on prevention, chronic disease management,
    and locally controlled, patient-centered care. So we want to
    start our funding extension discussion by hearing from these
    experts who have first-hand experience running a CHIP program
    and a health center. We want to better understand if these
    programs face barriers to innovation, we want to hear creative
    strategies to deliver quality care, and we seek guidance on
    what's working and what's not.
        As we move forward, this committee also faces important
    considerations regarding extending funding for these programs.
    There are decisions to be made regarding how much funding
    should be provided, for how long, and how Congress should pay
    for it so as not to add to the burden of federal debt that
    Americans already face.
        Particularly, the committee should closely examine the
    question of whether the 23 percent bump for a state's match for
    CHIP is appropriate to continue as we look at a funding
    question. I have concerns that the 23 percent bump upends the
    traditional financial federal-state partnership.
        As we embark on this effort, I know we all share the goals
    of reducing costs and ensuring patients served by these
    important programs have the peace of mind that they can
    continue to access timely, high quality care.

        Mr. Burgess. The chair thanks the gentlemen. The gentleman
    yields back.
        The chair would observe that there is a vote on the floor.
    There is still almost 9 minutes left. So with the committee's
    permission, I am going to recognize the ranking member of the
    full committee, Mr. Pallone, 5 minutes for an opening
    statement, after which we will recess for votes until votes
    have concluded on the floor. Mr. Pallone, you are recognized
    for 5 minutes, please.

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

        Mr. Pallone. Thank you, Mr. Chairman.
        A little over a month ago, House Republicans voted to
    repeal the Affordable Care Act and gut the Medicaid program in
    order to give tax cuts to the rich and privileged few. The
    result, 23 million people could lose health insurance, 3
    million of them children. And then yesterday, Senate
    Republicans finally made public their bill where they proposed
    even steeper cuts to Medicaid. And now, today, Republicans will
    talk about the importance of our safety net programs, the
    Children's Health Insurance Program, CHIP, and the Community
    Health Center Fund. I agree wholeheartedly about the importance
    of extending these programs. But what our Republican colleagues
    seem to ignore is that our safety net is interconnected. To
    tear down Medicaid, which is supported by CHIP and community
    health centers, is misguided and hypocritical. Mr. Chairman, I
    believe we should judge a Nation by how it treats its children.
    CHIP covers 8.9 million kids. It stands on the shoulders of a
    strong Medicaid program that covers 37.1 million more children.
    Every single one of those kids deserve access to a doctor and
    access to good healthcare, yet every Republican on this
    committee voted for a bill in committee that capped health
    coverage for kids in every one of our communities. And as a
    result of that vote, 3 million children would lose their health
    insurance, and that is simply not right.
        Today we will have a conversation about community health
    centers also, that providers that serve so many of our most
    vulnerable children, the Community Health Center Fund provides
    70 percent of the funding for the health center program, which
    accounts for 20 percent of revenue for community health
    centers. According to estimates, failure to reauthorize this
    funding will result in the closure of approximately 2,800
    health centers, and 50,000 clinicians and other staff losing
    their jobs, and most importantly, 9 million patients losing
    access to care.
        So I strongly believe in a swift reauthorization of this
    funding for community health centers. At the same time, I will
    remind my Republican colleagues again that Medicaid is the
    largest single funding source for community health centers,
    providing more than 40 percent of their revenue during fiscal
    year 2016. We can't ignore the devastating consequences that
    Republican efforts to cut Medicaid by $834 billion over the
    next 10 years will have on community health centers and
    millions of Americans. And this includes four in 10 children
    living in poverty nationwide who currently receive care at
    community health centers.
        So, Mr. Chairman, GOP efforts to repeal the ACA and
    jeopardize the Medicaid program will harm children
    significantly. So I urge my colleagues to first immediately
    reverse course and stop the dismantling of the Medicaid
    program.
        I yield the remainder of my time split between Ms. Castor
    and Mr. Lujan. I guess we will start with Ms. Castor.
        Ms. Castor. Thank you, Mr. Pallone.
        We are at a remarkable place here in America after decades
    of bipartisan work. The overwhelming number of American
    children have health coverage, 95 percent. That is something to
    celebrate. And I wanted to thank you all of the policymakers,
    the doctors, the nurses, folks back in our local communities
    that have worked to achieve a 95 percent coverage rate. This is
    smart policy. This makes America stronger. Kids are healthier,
    they do better in school, they miss fewer days of school, they
    are more likely to attend college, and they earn higher wages.
    But all of this progress is at risk because the GOP has
    produced bills--one here in the House, one that is even worse
    in the Senate that came out yesterday, that will rip coverage
    away from America's kids.
        All of the progress we have made is at risk. Why? Just to
    give massive tax cuts to wealthy special interests? Those are
    not our values. Our values are reflected in the fact that we
    work together in a bipartisan way to make sure kids can see a
    doctor and get the care that they need. But what the GOP bills
    do is the most radical detrimental restructuring of children's
    healthcare ever proposed under the 50 years of Medicaid. And it
    must be rejected. And, in fact, it is wholly inconsistent for
    us to be talking about CHIP reauthorization, because Medicaid
    and CHIP are so closely interconnected. You cannot have a CHIP
    reauthorization without a strong Medicaid initiative. So let's
    jettison those plans and work together to cover the remaining 5
    percent of kids that don't have healthcare coverage.
        And I am happy to the yield the balance to my colleague,
    Mr. Lujan.
        Mr. Lujan. Medicaid is the single largest health insurer
    for children. Because of Medicaid, the CHIP program, and ACA,
    95 percent of all children now have health coverage at an all-
    time high. Sadly, Medicaid is in the crosshairs of our
    Republican colleagues. And you have heard the numbers: 37
    million kids who depend on Medicaid nationwide, half a million
    in New Mexico alone; the 3 million of the 23 million people who
    will lose coverage are children. It is simple. A strong CHIP
    program depends on a strong Medicaid program. You can't reach
    out with one hand in the guise of reauthorizing CHIP while
    cutting $1 trillion from Medicaid with the other. You just
    can't have it both ways.
        I yield back.
        Mr. Burgess. The chair thanks the gentleman. Does the
    gentleman from New Jersey yield back?
        The gentleman from New Jersey yields back.
        The chair thanks the gentleman. Chair makes a technical
    observation that SCHIP is authored until the end of fiscal year
    2019 as was accomplished in the Affordable Care Act. It was
    only funded through fiscal year 2015. This is the second
    funding bridge that has had to occur because of the fiscal
    cliff that was built into the ACA.
        We now stand in recess until immediately after the last
    vote.
        [Recess.]
        Mr. Burgess. The chair would remind members pursuant to
    committee rules all Member's opening statements will be made
    part of the record. And we do want to thank our witnesses for
    being here today taking time to testify before the subcommittee
    on this important issue. Each witness will have the opportunity
    to give an opening statement, followed then by questions from
    members. Again, as previously mentioned our witnesses, but
    today we will hear from Mr. Michael Holmes, Chief Executive
    Officer, Cook Area Health Services; Ms. Jamie Snyder, Associate
    Commissioner for Medicaid SCHIP Services, Health and Human
    Services Commission State of Texas; and Ms. Cindy Mann, partner
    in Manatt Health. We appreciate you being here today.
        Mr. Holmes, you are now recognized for 5 minutes for an
    opening statement, please.

      STATEMENTS OF MICHAEL HOLMES, CHIEF EXECUTIVE OFFICER, COOK
     AREA HEALTH SERVICES; JAMI SNYDER, ASSOCIATE COMMISSIONER FOR
       MEDICAID/SCHIP SERVICES, STATE OF TEXAS, HEALTH AND HUMAN
      SERVICES COMMISSION; AND CINDY MANN, PARTNER, MANATT HEALTH

                      STATEMENT OF MICHAEL HOLMES

        Mr. Holmes. Thank you, Chairman Burgess, Ranking Member
    Green, members of the subcommittee. My name is Mike Holmes. I
    am the CEO of Cook Area Health Services, a Federally qualified
    community health center providing medical, dental, behavioral
    healthcare in nine locations to more than 12,000 patients in
    rural northern Minnesota. On behalf of the more than 1,400
    community health center organizations nationwide, I wanted to
    thank the subcommittee for the longstanding bipartisan support
    you have consistently shown for community health centers.
        Since 1979, Cook Area Health Services has provided critical
    healthcare access to patients and communities who would
    otherwise go without. Our service area covers more than 8,300
    square miles, and many of our patients travel 50 miles or more
    to access care. Each one of our sites is located in a town
    where the population is fewer than 600 people.
        As with many rural community health centers, we are the
    only game in town. Our health center story is just one part of
    a much larger national story. For more than 50 years America's
    community health centers, also known as FQHCs, have served as
    the medical home for our Nation's underserved communities and
    populations.
        Today, health centers represent the Nation's largest
    primary care network, providing high quality care to more than
    25 million patients. Our record of success would not be
    possible without the ongoing support of Congress. And I am here
    today to urge you to continue that support by extending your
    investments in the health center program, and specifically, the
    community health centers fund, which provides enormous value to
    patients, communities, the health system, and the taxpayer.
        Our success is reflected in the core requirements every
    health center must meet, each health center must be open to
    all. We must serve our medically underserved area of our
    population; we must offer comprehensive ranges of primary care
    services; and each health center is governed by a consumer
    majority board which works closely with health center
    leadership and clinicians to develop innovative responses to
    community needs.
        In 2010, Congress created a dedicated source of funding to
    sustain and grow the national investment in health centers,
    with an initial 5-year authorization, the CHC fund directed
    resources to both operational expansion and capital investment
    in health centers. As a result of this investment, new health
    center sites were added in more than 1,100 communities, health
    centers are serving approximately 6 million additional people,
    and they have expanded services like behavioral and dental
    care.
        At our health center this funding allowed us to add new
    access points in Tower, Minnesota, and helped us expand dental
    services in three other communities and to significantly expand
    our care coordination services. In 2015, Congress extended the
    Community Health Center Fund for 2 additional years alongside
    CHIP and a number of other programs. With that extension
    nearing its expiration date, we strongly urge you to renew
    these investments and to do so for at least 5 years so that
    health centers like mine can continue to provide reliable
    access to our patients.
        Without action by the end of the fiscal year, health
    centers and our patients face major disruptions in care. HHS
    has estimated that should Congress not act by September 30th,
    it would lead to the closure of 2,800 health center sites, loss
    of over 50,000 jobs, and, more importantly, a loss of access to
    care for some 9 million patients.
        In conjunction with my testimony today, the Minnesota
    delegation has given me a letter, noting their support for
    health centers and the impact on Minnesota CHCs. In my written
    testimony, I have highlighted several other programs which fall
    under the subcommittee's jurisdiction. Two key workforce
    programs are set to expire on the same timeline as the health
    centers' fund.
        The National Health Service Corps, which provides
    scholarships and loan repayments to clinicians willing to work
    in underserved areas, is a key tool health centers use as we
    recruit and retain clinical staff. Fifty-four percent of
    National Health Service Corps clinicians practice in health
    centers today. Additionally, the Teaching Health Centers
    Graduate Medical Education program brings physician residency
    training right into community-based settings like FQHCs where
    providers are needed the most.
        And finally, I would like to note that the Medicaid program
    is extremely important to health centers and those we serve.
    And every State the program works hand in hand to turn the
    promise of coverage into the reality of care. Nearly half of
    all health center patients are covered by Medicaid.
        This is a time of rapid change in our health system. Health
    centers probably help with that change, even though as we
    remain committed to our basic founding principle, ensuring that
    every American in need has a place to go for high quality care.
    That purpose is made into reality every day for 25 million
    patients because of the support of Congress. And that support
    begins here in this subcommittee. I urge you to continue that
    support by extending these critical programs on a timely basis,
    and appreciate the opportunity to testify before you today and
    thank you for making health centers an ongoing priority.
        [The prepared statement of Mr. Holmes follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. Thank you, Mr. Holmes. The committee thanks
    you for your testimony.
        Ms. Snyder, you are recognized for 5 minutes for an opening
    statement, please.

                        STATEMENT OF JAMI SNYDER

        Ms. Snyder. Good morning, Chairman Burgess, Ranking Member
    Green, and distinguished members of the Subcommittee on Health.
    Thank you for the opportunity to provide testimony on the
    Children's Health Insurance Program. My name is Jami Snyder, I
    serve as the Director of the Medicaid and CHIP programs for the
    State of Texas.
        This morning, I would like to provide insight into how CHIP
    has worked for the State of Texas in response to the
    subcommittee's inquiries concerning the reauthorization
    legislation. The Texas Health and Human Services Commission
    implemented the state's CHIP program in 1998. The program
    currently serves approximately 380,000 children. Since
    implementation, the state has seen a notable reduction in the
    overall rate of uninsured children below 200 percent of the
    Federal poverty level, from 18 percent in 1998 to 6 percent in
    2015.
        CHIP statute allows states the flexibility to operate CHIP
    as a Medicaid expansion program, as a separate state program,
    or as a combination of the two. Texas has historically operated
    CHIP as a separate program, which has afforded Texas the
    freedom to design a system that aligns with the state's
    philosophy of ensuring accountability in the management of
    public funds, and increasing personal responsibility for
    program participants.
        Unlike the Medicaid program, which offers an extensive and
    prescriptive medical benefit for children, CHIP regulations
    offer states flexibility to tailor the CHIP benefit package to
    meet the unique needs of the populations served. This allows
    CHIP to function as a nimble program that is more easily able
    to respond to changes in the states' fiscal outlook, emerging
    Federal legislation, as well as the evolving needs of
    beneficiaries.
        Since the onset of the program, Texas has delivered CHIP
    services through a managed care model. The state currently
    contracts with 17 managed care organizations, delivering
    services to CHIP members Statewide. The managed care delivery
    system offers additional advantages as MCOs are incentivized
    through a risk-based, capitated payment system to contain costs
    while implementing innovative service delivery and provider
    payment mechanisms to improve health outcomes for their
    members.
        Medicaid regulations make it difficult for states to
    implement cost-effective, or effective cost-sharing mechanisms
    for the full range of Medicaid beneficiaries. In contrast, CHIP
    offers states greater flexibility to design programs in which
    families retain a measure of responsibility for the cost of
    their child's care.
        Most families in CHIP pay an annual enrollment fee, and all
    families in CHIP make copayments for office visits,
    prescription medications, inpatient hospital care, and
    nonemergent care provided in an emergency room setting.
        CHIP is a critical part of the health care safety net in
    Texas, offering a healthcare benefit to children who do not
    qualify for the Medicaid program. Texas' overall experience is
    that CHIP simply works. It provides reliable medical and dental
    benefits to the covered population at a rate of $156 per
    member, per month, which is $67 less on a per-member basis than
    the cost for coverage for the state's Medicaid population.
        The state's quality data also offers evidence of the
    efficacy of the program, indicating a 21 percent increase in
    children age 3 to 6, accessing well child visits, and a 90
    percent increase in children receives recommended vaccines in
    the first 2 years of life for measurement years 2011 through
    2015.
        A decision to not reauthorize the CHIP program would result
    in a loss of over $1 billion in funding annually to the State
    of Texas, and a corresponding loss of healthcare coverage for
    more than 380,000 children. If funding for the program is not
    extended beyond September 2017, it is estimated the state will
    exhaust remaining resources by February 2018. As such, Texas
    would be faced with the prospect of dismantling the CHIP
    program. And as mandated by the ACA, the state would also be
    expected to continue adherence to maintenance of effort
    requirements at a lower Medicaid Federal matching rate for over
    250,000 children now served under the state's Medicaid program.
        Through its routine budgetary planning process, Texas has
    assumed continued funding for the CHIP program for fiscal years
    2018 and 2019 at the enhanced Federal matching rate. Should
    Congress elect not to move forward in reauthorizing CHIP, the
    State of Texas will no longer be able to administer this
    critical program, which has a proven track record of success,
    stemming from its adherence to the fundamental principles of
    state administrative flexibility, personal responsibility, and
    innovation aimed at enhancing outcomes for beneficiaries.
        [The prepared statement of Ms. Snyder follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the gentlelady for her
    testimony. Ms. Mann, you are recognized for 5 minutes please
    for an opening statement.

                        STATEMENT OF CINDY MANN

        Ms. Mann. Good morning, Chairman Burgess and Ranking Member
    Green, and distinguished members of the subcommittee. I am
    pleased to be here this morning. I am Cindy Mann, a partner at
    Manatt Health, and I work on matters primarily focused on
    public coverage, and particularly the Medicaid and the
    Children's Health Insurance Program. And as noted, prior to
    joining Manatt, I served as the Director of the Center for
    Medicaid and CHIP services at CMS responsible for Federal
    policy, Federal oversight of Medicaid and CHIP and supporting
    statement implementation of these programs. I am going to focus
    today on my testimony on the role of CHIP in providing
    affordable coverage to children, the issues facing Congress on
    the expiration of the funding. But I also do want to note the
    strong support of the comments by Mr. Holmes in terms of the
    incredibly important value and critical function of federally
    qualified health centers.
        With 20 years of experience with the CHIP program--it is
    hard to believe it is 20 years behind us--we know what has made
    this program successful, and we know what has put it in
    jeopardy. CHIP works when it has robust and stable funding, and
    when it has a strong Medicaid program with which to partner in
    covering children.
        Let's look first at the CHIP's history on financing. When
    the program was first started, the funding was ample for states
    that were just ramping up their program, but very quickly by
    2002, some states began to see shortfalls in their funding, and
    we saw a mismatch between the allotments and states' needs in
    terms of coverage of children. And that was not unexpected. In
    some respects, Congress didn't know how many states would pick
    up the CHIP program, what the participation rates would be, but
    it gives us an example of what happens when you have a mismatch
    in funding.
        Georgia, for example, reluctantly froze enrollment from
    March to July of 2007, and only lifted a freeze after Congress
    passed a supplemental budget. Florida froze enrollment, it
    froze it for just 5 months, and during those 5 months, 44,000
    children, CHIP children, were placed on a waiting list. When
    CHIP was reauthorized in 2009, there was strong support from
    the Congress to avoid those kinds of shortfalls and enrollment
    freezes. CHIP has provided ample funding and revamped the
    system for distributing dollars. It built in new adjusters; it
    built in contingency funding; and a new system for
    redistributing funds across states.
        That funding formula has been maintained through the
    subsequent extensions. Going forward, adequate financing for
    CHIP must be assured. Beyond extending the basic program
    funding, Congress also needs to consider the issues that have
    been raised so far, the 23 percentage point increase in the
    match rate, and the maintenance of effort provision, both of
    which were in the Affordable Care Act.
        As my colleague from Texas noted, the enhanced funding for
    the CHIP program is very much integrated into state budgets and
    helping a number of states to adopt a plan for program
    improvements. But we must also recognize that that enhanced
    funding goes hand in hand with the maintenance of effort
    provision. Without the maintenance of effort provision,
    millions of children will be at risk of losing coverage, or
    paying much higher costs for that coverage.
        CHIP made affordable coverage available to millions of
    children, but given the marketplace changes, the uncertainties
    of the futures of subsidies and cost-sharing reductions,
    indeed, even the uncertainties in the Medicaid program. It is
    essential to protect not just the funding for the program, but
    children's eligibility for coverage. And I would suggest that
    it is unlikely we would continue the MOE requirement without
    also supporting state's ability to fund that requirement and
    that need for stable coverage for children.
        Next, let me just circle back to my point about CHIP
    working, in large part, because of the foundation of Medicaid.
    Medicaid, of course, is the much larger program covering about
    37 million children, the two programs depend on each other,
    kids go back and forth between the two programs all the time as
    family circumstances change. But even more fundamentally is
    that Medicaid supports CHIP by covering so many of the children
    with the greatest healthcare needs: lowest income children,
    children in poor health, kids in foster care, kids with
    disabilities.
        CHIP wasn't designed to do that heavy lifting. It doesn't
    have the financing structure, it doesn't have the benefit
    structure to do that. CHIP is an incredibly critical part of
    that coverage continuum for children, but it can't do the job
    alone.
        Finally, I would say that Congress has much to be proud of,
    given its long-standing support of children's coverage.
    Together, Medicaid and CHIP have brought the uninsurance rate
    for children below 5 percent. It was over 15 percent in 1997
    when CHIP was first enacted. It is a historic low, and it is a
    great achievement, but with sweeping changes to Medicaid now
    under consideration, and CHIP reauthorization outstanding, much
    is at stake for our Nation's children.
        Thank you for your time and support.
        [The prepared statement of Ms. Mann follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks all of our witnesses for
    their testimony today, and appreciate your being here and your
    being flexible with us as this hearing was rescheduled a couple
    of times.
        I now want to go to vice chairman of the committee, Mr.
    Guthrie, 5 minutes for his questions, please.
        Mr. Guthrie. Thank you very much. Before I get into my
    questions, I know we have had some comments from some of my
    colleagues, and the others on Medicaid and the way the AHCA
    dealt with Medicaid. As we know, Medicaid is a program that is
    growing rapidly and could implode. So what we decided to do,
    and we very carefully sat down and walked through the AHCA, was
    how are we going to move forward? And the principled way of
    moving forward, I know there is a block grant option in the
    bill, but the principle way we decided to move forward was on
    an approach to Medicaid, that in the 1990s, was bipartisan. As
    a matter of fact, every sitting Member of the Senate who was in
    the Senate in the 1990s on the Democratic side signed a letter
    to President Clinton supporting an option of going to per
    capita allotments, some being key ranking members and then
    leadership on the other side.
        Medicaid, over the next 10 years, under our proposal, will
    grow, not cut, will grow by 20 percent, so I just want to make
    sure the record reflects more than some of the rhetoric we have
    heard.
        First, Ms. Snyder, in addition to basic medical benefits,
    Texas' CHIP program include behavioral health services; vision
    exams and corrective lenses; hearing exams and hearing aids;
    physical, occupational and speech therapy; and durable medical
    equipment. There is also limited dental benefit. In your
    testimony, you seem to contrast this with Medicaid extensive,
    yet prescriptive medical benefit for children. I believe every
    member of this committee wants to ensure low-income children
    have adequate access to healthcare, whether in Medicaid or
    CHIP. But it sounded like you might have some ideas on the way
    Medicaid could better serve children. Do you have any ideas you
    would like to share with us?
        Ms. Snyder. Thank you, vice chairman. Absolutely, we are a
    fundamental believer in Texas in both the Medicaid and CHIP
    programs. I think, as is evidenced by my testimony, we enjoy
    the flexibility that the CHIP program offers to states in
    designing a benefit that actually is responsive to the
    population that served under the CHIP program, which is a
    population of children that don't qualify for Medicaid.
    Certainly, we always in Texas are, and like many other states,
    looking at opportunities to infuse elements of personal
    responsibility into programs such as Medicaid, and clearly, we
    already have done so with CHIP. But we do realize that the
    populations that are served under those programs are distinctly
    different, and so want to be cognizant of those differences in
    terms of the populations as we consider cost-sharing
    opportunities, benefit limitations, and so forth.
        Mr. Guthrie. Thank you. Mr. Holmes, also, the reliance
    community health centers is very important in our health safety
    net. And in 2015, we extended the community health center fund
    for 2 additional years. In your testimony, you call on us to do
    a longer-term basis for at least 5 years. Maybe some of the
    reason for that is self-evident, but would you like to describe
    what is better for you in a longer extension over a 2-year
    extension, the things you can do differently, or maybe more
    efficiently?
        Mr. Holmes. Thank you, Mr. Vice Chairman. Two years is a
    short period of time for safety net providers to go into the
    workforce and recruit new providers. One of the more difficult
    conversations any safety net provider has when they are trying
    to bring in new physicians, new dentists, is to have that
    discussion about, if the lead time to recruit these providers
    is 1 to 2 years, to say, we hope to have a job for you in 2
    years. It really limits our ability to have realistic
    conversations with new providers that we need to help serve our
    patients. Two years is a short planning cycle for any small
    business to try and address changes in the environment, and
    certainly, in a healthcare environment that is changing
    rapidly. And a longer planning cycle just would make us more
    effective in how we deliver care to our patients.
        Mr. Guthrie. Thank you. Also, every health center must meet
    statutory-defined criteria to receive in HRSA, section 330
    grant. One of the conditions that must be made in order for
    health centers to receive one of these grants, and how does an
    applicant demonstrate to HRSA the need for health services? And
    I have a 30-second time left.
        Mr. Holmes. There are 19 basic requirements to fund to be
    eligible to receive health care center funding. Each one of
    those areas must be defined and documented in a competitive
    grant application which occurs every 3 years at the current
    time.
        Mr. Guthrie. And what you do is critical, so we really
    appreciate your efforts. We appreciate it.
        I yield back.
        Mr. Holmes. It is critical for us to show Congress that we
    do what we say we are doing, and that we are who we say we are.
    And without that, we want to have a process that is transparent
    for all organizations to say, this is what we do, this is who
    we serve, and this is how we can care for our patients.
        Mr. Guthrie. Thank you. I yield back.
        Mr. Burgess. I thank the gentleman. The gentleman yields
    back. The chair recognizes the gentleman Mr. Green for 5
    minutes of questions please.
        Mr. Green. Thank you, Mr. Chairman. I would like to ask
    unanimous consent to place in the record letters from both a
    number of associations encouraging a 5-year extension on
    funding for the Children's Health Care Program.
        Mr. Burgess. Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Green. One thing I think is really important and I
    highlight that Medicaid and CHIP are linked together, and many
    of our CHIP kids receive Medicaid benefits. In fact, two-thirds
    of the CHIP kids actually receive the more comprehensive
    Medicaid benefit package, because states have recognized how
    important coverage is for children. That is why I am disturbed
    by what the House has done passing TrumpCare, and what the
    Senate looks like they are poised to do next week.
        The conversation about children's coverage is something
    that this committee should have before passing legislation,
    capping, and blocking, granting coverage for 37 million
    children. This morning, I read that 3 million children will
    lose coverage under the House bill, and Senate cuts to Medicaid
    are even deeper over time. Even one child losing coverage in
    our country is unacceptable. We can do better for our children.
        Ms. Mann, can you start off with some of the important
    contexts we should have as we consider the reauthorization in
    CHIP, which I want to be clear, I strongly support and believe
    Congress must immediately do. What do people mean when they say
    CHIP stands on the shoulders of Medicaid? And can you discuss
    the history of CHIP and how it worked with Medicaid programs to
    bring us to the highest rate of coverage for children in our
    history?
        Ms. Mann. Thank you. I would be glad to address that
    question. CHIP was established to extend coverage to children
    who otherwise weren't going to be eligible for Medicaid, and
    states could cover those children, either in Medicaid or in
    separate CHIP programs. So the idea that CHIP sits on top of
    Medicaid is, in fact, exactly how it is designed by Congress,
    and how it is operated in the program. And why CHIP needs that
    support is that Medicaid really does, as I noted, much of the
    heavy lifting. Both in terms of numbers, Medicaid covers about
    37 million children, CHIP covers over 8 million children.
    Medicaid covers the children who are often in the poorest
    health, foster care kids, kids with disabilities. Any child,
    when they get a disability, when they get a chronic illness,
    they often have to turn to Medicaid, even if they are eligible
    for the CHIP program. It is not necessarily designed to be that
    robust a benefit package. They work hand in hand.
        And at the same time, what CHIP has done is really helped
    modernize the Medicaid program over the years. When CHIP was
    started, it really got a lot of energy around children's
    coverage, and people started to look at not just how to design
    the new CHIP program, but what should we do to improve the
    Medicaid program? So simplified applications made it easier for
    families to enroll. That had a lot to do with the success and
    the uninsured rate that we have seen. So the two really are
    side by side and complement each other, and are needed for the
    continuum of coverage for children.
        Mr. Green. Following up on my colleague from Kentucky, do
    you have anything to say about the flexibility of Medicaid
    between different states with different Medicaid programs?
        Ms. Mann. There is a great deal of flexibility in Medicaid.
    In fact, often you hear from Members of Congress and others, oh
    my God, it is such a complex program, in part, because there
    are 56 jurisdictions that administer it, and there is quite a
    bit of distinction and differences among them because of the
    flexibility accorded to states in the program.
        States have a lot of flexibility to design their delivery
    system as a managed care, is it fee for service? Accountable
    care organizations? They design their payment system; they
    design their care management system. The area where Medicaid is
    clear, however, is on the benefit protection for children. It
    is actually 50 years, almost to the day, where Congress adopted
    the early periodic screening and diagnostic treatment program
    to make sure that all kids in Medicaid get screened for vision,
    hearing, developmental delays, other problems. And if they have
    a medical problem, the benefit requirement in Medicaid is that
    they get treated.
        Mr. Green. I am almost out of time. Texas receives a 1115
    waiver that, I think, bipartisan, we supported. There is
    flexibility in states. Although, before I was elected to
    Congress, served 20 years in the state legislature, and I
    watched how we were funding Medicaid back then. And my concern
    is that the flexibility--we also vote this Federal money, in
    Texas, our match is two-thirds Fed, one-third state, of course,
    Louisiana gets a little better than that. Someday maybe we will
    get to that level. But we also need to have guidelines for what
    we know that funding will go through.
        Ms. Mann. Absolutely.
        Mr. Green. So I want flexibility, but I also make sure it
    is spent on the healthcare for poor people, including children.
        Ms. Mann. Absolutely.
        Mr. Green. Thank you, Mr. Chairman.
        Mr. Burgess. The gentleman yields back.
        The chair thanks the gentleman. The chair recognizes the
    chairman of the full committee, Mr. Walden. The gentleman from
    Oregon, for 5 minutes, please.
        Mr. Walden. I thank the chairman. And I want to thank our
    witnesses for your testimony. We appreciate what you do in our
    states, and communities, and what those you represent here
    today do.
        Mr. Holmes, in your testimony, you say that many of your
    patients travel over 50 miles off and over secondary roads to
    access care in your health center, and that oftentimes, you are
    the only provider in the communities you serve. In addition to
    isolation and distance, what other challenges exist that we
    should know about in care and delivery that are unique to rural
    areas? And I would just preface that by saying my district
    would extend from the Atlantic Ocean to Ohio. And so it is
    bigger than nearly every state east of the Mississippi River.
    So I am used to pretty remote, rural, extreme remote, whatever
    the furthest-out remote nomenclature is, we got it in my
    district. But can you speak to some of those issues and the
    reimbursement issues?
        Mr. Holmes. Delivery of care in a service area that is
    almost the size of New Jersey is challenging. It is challenging
    because we are in small communities. Two of our health center
    sites are attached to critical access hospitals. And the
    critical access hospitals are small. They are 14 beds, and 16
    beds, they have attached long-term care units. We have to be
    able to recruit providers to see these patients. We are in a
    frontier area, and it is long distances between sites. If we
    are not there, no one else is there. The next level of care for
    our system, or our health delivery system, is 40 to 50 miles
    away to an entry point.
        When we look at rural areas, it is where we have our
    agriculture; it is where we have our forest products; it is
    where we have our mining; and we can't relocate those jobs to
    urban areas. We have to deliver care to the people that are
    working in those industries, and it presents challenges of
    distance, and time, and access. Payment reimbursement
    methodologies that come to FQHCs help on a per-visit basis to
    subsidize or offset some of the infrastructure costs. I could
    be much more economically efficient if I had all of my patients
    and all my providers in a single site, but I can't, because I
    can't have patients traveling 60, 70, 80 miles in.
        Mr. Walden. Let me ask, I am thinking about the clinic I
    have in Fossil, Oregon, it is 92.2 miles to The Dalles, Oregon,
    where Mid-Columbia Medical Center is. That would be most likely
    the nearest hospital, so more than 90 miles away. This is one
    of three counties where we have physician assistants, but
    beyond that, no other access and no hospital in this three-
    county region.
        Talk to me about telemedicine and what role it can play and
    what you encounter. I understand the recruitment issue, and
    some of that goes back to the states because they want to do
    their board certification. So I have had various health centers
    and providers say, we can wait 6 months to a year to get
    through the process from the State of Oregon to get approval to
    get somebody here, and meanwhile, they go somewhere else,
    perhaps. We are not as bad as some, not as good as others. Can
    you talk about telemedicine?
        And then, I had an amendment before it became law and then
    it expired on sort of bonus payment for home healthcare,
    because it is more expensive to go out and back 90 miles each
    way to take care of somebody in a remote area. Perhaps you
    could address those things?
        Mr. Holmes. We have a common electronic medical record
    platform across all of our sites. We have some clinics that are
    mid-level provider sites only. They are staffed by nurse
    practitioners or physician's assistants. If they have issues or
    questions about care of a patient, they can route that chart to
    one of our physicians in one of our other sites for assistance
    in care delivery.
        We have some telemedicine capabilities. We have telemental
    health services with the University of Minnesota, Duluth, where
    we can have patient's access, some psychiatric and psychology
    care. And we do have some telederm setups. But part of the
    problem we have with telemedicine is that in the rural areas,
    there is not a significant infrastructure for high speed
    internet.
        Mr. Walden. Right.
        Mr. Holmes. So we can't do home monitoring, because in many
    places, there is not even a cell service, cell phone signal.
    And so we end up having patients coming into our sites, which
    is the closest access point they can. And we will work with the
    patient there, whether it is with direct hands-on care, or
    through some telemedicine.
        Mr. Walden. That is helpful. We also have jurisdiction over
    spectrum and broadband buildout. It is a big bipartisan effort
    on our committee to get access. We just had a hearing this
    week, as a matter of fact, on getting access to unserved areas
    first with the Federal support, and then underserved after
    that, and how we mapped that and really figure out where those
    areas are. So thank you all for the work you do and for your
    testimony today.
        I yield back.
        Mr. Burgess. The gentleman yields back the chair. The chair
    recognizes the gentleman from New Jersey, the ranking member of
    the full committee, Mr. Pallone, 5 minutes for questions,
    please.
        Mr. Pallone. Thank you, Mr. Chairman.
        I believe deeply in the CHIP program. I want to see a full
    5-year extension of current CHIP policy. However, I also
    believe deeply in the Medicaid program. And I know that a lot
    of our success with the CHIP program is due, in part, because
    it bills so seamlessly on top of the Medicaid program in its
    current form. And as virtually every stakeholder agrees, the
    TrumpCare bill passed by the House would decimate coverage for
    23 million people, 3 million of them children. What is worse is
    that the Senate's own TrumpCare bill doubles down against kids.
    And it is a fact that these proposals are bad for kids.
        So with that in mind, Ms. Mann, I wanted to ask you some
    questions. First, why is the current full 5-year extension of
    the CHIP program with the maintenance of effort in the so-
    called 23 percent bump in payments for states so critical now
    more than ever?
        Ms. Mann. Thank you. MACPAC, the pediatricians, and NGA
    have all recommended a 5-year extension. MACPAC with 23
    percentage points and the maintenance of effort, and I think
    for good reason. And I think it goes back to the points that
    Mr. Holmes made about health center funding. These 2-year
    cycles are just not sufficient for states to be able to really
    do the kind of planning and improvements that make sense for
    kids. And I also think the other side of that is to look at
    what is going on broadly in the healthcare marketplace right
    now. If CHIP were to end more abruptly, then children will be
    at risk of not having coverage, or if they find coverage, they
    will have significantly higher out-of-pocket costs.
        This is really a time of great uncertainty in our
    healthcare marketplace, small ``m'', and it is really a time,
    given the bipartisan support for children's coverage, to give
    CHIP 5 years to be stable and to do the job it needs to do for
    children.
        Mr. Pallone. Well, I obviously agree with you and the
    importance of an immediate and full extension, but I also share
    the same belief about reauthorizing the community health center
    fund. I think we need to do it immediately. But again, when you
    talk about the health center program, a lot of success due, in
    part to the Medicaid program, which provides more than 40
    percent of community health center revenue each year. And
    unfortunately, all that success, I think, is jeopardized with
    TrumpCare. And yet my colleagues argue that a cap on the
    Medicaid program is not a cut at all. In fact, the
    administration was up here testifying on the budget of the Ways
    and Means chair arguing that TrumpCare was not a cut to
    Medicaid at all. So I would like to hear from someone who knows
    a lot about Medicaid and CHIP, many have likened the capping of
    the Medicaid program to be just like managed care, which, in
    Medicaid, is quite widespread. Is the cap in Medicaid like
    managed care?
        Ms. Mann. Well, I will jump in and answer that. And I am
    sure Ms. Snyder also has a view on that. It is very unlike
    managed care. States use managed care largely for CHIP programs
    and for their Medicaid programs. They set rates, they set rates
    at a regular period of time. They adjust rates based on the
    acuity and the needs of the population that are served. They
    take into account policy changes, healthcare cost changes, and
    they are constantly reexamining their rates.
        In the cap in the bill, it is set based on spending from
    years back, moved forward, adjusted by a national trend rate
    that is not related to the actual needs and cost of serving
    people in that state. And it doesn't adjust based on acuity of
    the needs; it doesn't adjust based on the healthcare costs in
    that community.
        Mr. Pallone. So what is going to happen to benefits and
    provider revenue with a capped or block granted Medicaid
    program?
        Ms. Mann. Well, states have three major levers to do
    significant reductions of spending in the Medicaid program:
    enrollment, provider payment rates, and benefits. I think
    likely, with the kinds of changes that are proposed, all three
    will be relied on by states. But if you think about going to
    provider rates, which is maybe the first place states will
    turn, we worry a lot about access for kids. Access is in good
    shape for kids right now in our Medicaid program, but if we
    thin out the payment rates for providers, if we lower our
    payment rates for managed care organizations, we are going to
    have access issue and problems of serving children, as well as
    seeing some children who are on optional kinds of programs,
    kids with brain injuries and other types of HCBS services, Home
    and Community Based Services may be losing their coverage and
    services all together.
        Mr. Pallone. Are there any winners for this policy,
    regardless of what states are carved out? And is it going to
    matter?
        Ms. Mann. Well, no states are carved out, and I think it is
    just a fact of math that when there is a Federal and state
    partnership to share all costs and the Federal Government is
    saying, I am pulling out of that partnership, and I am setting
    my limits at a certain amount, and the state is responsible for
    everything above that, every state becomes a loser in that
    formula.
        Mr. Pallone. All right. Thank you. Thank you, Mr. Chairman.
        Mr. Guthrie [presiding]. Thank you. The gentleman from New
    Jersey yields back. The gentleman from New Jersey is
    recognized.
        Mr. Lance. Thank you, and good morning to the distinguished
    panel.
        Is it the view of the panel that the current formula for
    Medicaid, which is open ended, as I understand it, should
    continue as it exists permanently without any analysis of a
    potential modification? I ask the question legitimately and I
    was one of 20 Republicans not to vote for the healthcare plan
    on the floor of the House of Representatives. Ms. Mann, I will
    start with you.
        Ms. Mann. I think the shared commitment, the shared
    partnership around underlining financing of the program is
    critical and needs to be retained. I think there are always
    areas of improvement. There has been years of complaints about
    how the FMAP itself, how that share is actually the formula for
    that. That could be looked at, though it is a quagmire of
    political complications when one does.
        Mr. Lance. I think that is the understatement of the day.
    As I understand it, the costs have increased relatively
    significantly in the last decade. Is that accurate?
        Ms. Mann. The costs per enrollee, actually, in the Medicaid
    program, have grown much more slowly than either commercial
    insurance or Medicare. Medicaid costs have grown, but that is
    because it is covering many more people.
        Mr. Lance. Others on the panel who would like to address
    the issue?
        Ms. Snyder. I would be happy to respond to the question.
        Very similar to Ms. Mann, I think we can all agree that
    there is always opportunity for improvement when we look at the
    funding formula for Medicaid as it currently stands. As a
    state, I can tell you Texas is looking very closely at the
    implications of the ACA, as well as the proposal that has been
    advanced by the Senate, specifically for the implications for
    the State of Texas and how the proposed funding formulas would
    play out for the program, versus the funding formula that we
    are now working with.
        Mr. Lance. Yes.
        Mr. Holmes. From a rural standpoint and a small safety net
    provider standpoint, I think it is important to recognize that
    not all Medicaid patients are evenly distributed across all
    payer types and across all providers. In the rural areas, there
    is a higher level of Medicaid population and where nursing home
    care paid by Medicaid may be 64 percent nationally. In the
    nursing homes that I am familiar with, their Medicaid
    population is 90 percent. And so there is a disproportionate
    percentage in some of our communities that rely on Medicaid.
    And so any time we have a change in that system, I worry about
    unintended consequences and how the rural providers, and rural
    safety net providers, and all safety net providers adapt to
    those changes.
        Mr. Lance. Regarding rural America, is this particularly
    important as it relates to those in nursing homes, as opposed
    to children and other populations served by Medicaid?
        Mr. Holmes. In the rural areas, we still have a significant
    nursing home population, a long-term care population, but we
    have a disabled population, and we have a population of moms
    and kids.
        Mr. Lance. Well, that is true across the country,
    obviously. Is there a disproportionate percentage in rural
    America in one of the cohorts you have just mentioned?
        Mr. Holmes. I believe that there is a disproportionate
    share in the rural areas for long-term care, because we have an
    aging in rural parts of the country. A lot of the younger
    people have moved out of the rural areas to urban areas where
    the jobs are. And so we have a graying of the population in
    these rural communities. Along with that graying of the
    population, I think there is a greater reliance on some of the
    programs to help provide care.
        Mr. Lance. Thank you. I think that this is an issue that
    deserves a great deal of attention, and I am not one who wants
    to make this a partisan issue. I think that it is a very
    difficult issue, and we have to examine it, in my judgment,
    based upon the facts that we want to cover as many Americans as
    possible. We also have a responsibility to the tax-paying
    public with a rising Federal debt. And I hope that we can
    examine these very difficult issues in a bipartisan capacity
    moving forward, because I do not think that this is an issue
    that should be politicized.
        I yield back 17 seconds.
        Mr. Guthrie. The gentleman yields back his 17 seconds. The
    lady, Ms. Matsui from California, is recognized.
        Ms. Matsui. Thank you very much, Mr. Chairman.
        CHIP and the Community Health Centers' Fund are critically
    important programs for serving children and families in our
    communities. And I do look forward to working with my
    colleagues to continue their funding in the future, and
    hopefully far into the future. However, we all know we can't
    have a conversation about safety net that CHIP and community
    health centers provide without including Medicaid as their
    foundation, because Medicaid is the foundation of our Nation's
    safety nets.
        Forty-one percent of children in California are on Medicaid
    and CHIP. That is about two in every five kids. I say 41
    percent on Medicaid and CHIP because you can't separate the
    two. CHIP eligible children in California, in fact, receive
    services through the Medi-Cal program. The CHIP and community
    health centers programs and the children and families they
    serve, will be devastated by the Medicaid cuts proposed by the
    TrumpCare bill.
        Ms. Mann, I am going to ask you this, because the way it
    looks now, if the TrumpCare bill goes through, billions of
    dollars will be cut from Medicaid. Would states be able to
    continue to cover the same number of people? Would they be able
    to cover the same type of services? Where might they cut? And
    are there examples of difficult choices states have had to make
    when budgets were squeezed?
        Ms. Mann. Sure. The Medicaid program, I think, certainly as
    CBO has projected, the reductions in Medicaid funding $834
    billion over 10 years would result in about 14 million people
    in the Medicaid program losing coverage. That will grow over
    time due to the impact of the caps, and how the caps get
    tighter and tighter over time just because of the way the math
    works. So, we will see necessarily, I think, lots of impacts to
    the program, both on that coverage number, but also in terms of
    whether we see limitations on the kinds of benefits to people
    are able to access. states will have to look, for the first
    time, I think, really closely at so-called outlier cost people:
    elderly people, children who are in special waiver programs,
    for example, whose expenditures are so much higher than the cap
    would be. Every time they enroll somebody in that situation,
    the state will lose a lot of money under the way the caps are
    designed.
        We also see big concerns about access, whether lower
    payments to providers, lower payments to health plans will
    narrow networks, children won't be able to get access to
    specialty care, and the kind of services that they need in a
    timely way.
        Ms. Matsui. So it seems to me you will be rationing care
    here. It seems to me they would have to make very difficult
    decisions as to what population will get the care that they
    need.
        Ms. Mann. What you will have even more than you have now,
    there are always issues at the state level about funding the
    Medicaid program. It is a big expenditure. States do not just
    spend their money without a lot of examination. But under a
    capped environment, you will have both cuts and a limit. And
    that will increase the competition between populations and
    between providers inside the state.
        Ms. Matsui. OK. Thank you.
        I would ask you also about in California, children receive
    full EPSDT, which is Early and Periodic Screening, Diagnostic
    and Treatment services through Medi-Cal. Can you talk about the
    impact of access to these services on children and families?
    And can you talk about the differences in the benefits and
    resulting health outcomes?
        Ms. Mann. EPSDT was really designed initially because of
    concern about low-birth weight babies, about children growing
    up, even children going into the Armed Forces, and as young
    adults and not being in healthy shape. It is really a very
    sensible benefit package that says there should be screening,
    diagnostic testing. And then it simply says that when a child
    needs treatment, as recommended by their doctor, they get the
    treatment that they need. That is an incredibly important
    service that is available to children, and, I think, the kind
    of standard we all want for our children. With reductions in
    spending, that might be a hollow promise; you might have the
    promise even for EPSDT if it is still there, but can a child
    find a provider, can a child get to a dentist, can that child
    get to the specialist that they might need for a particular
    kind of circumstance.
        Ms. Matsui. I see I am out of time and I would like to
    submit my questions for the record.
        Thank you. I yield back.
        Mr. Guthrie. The gentlelady yields back. The gentleman from
    Virginia, Mr. Griffin, is recognized for 5 minutes.
        Mr. Griffith. Thank you, Mr. Chairman. I appreciate it very
    much.
        Mr. Holmes, you have been talking about some of the rural
    issues, and I appreciate that, because my district is larger
    than the State of New Jersey. And you indicated that the
    territory that you cover is about the size of New Jersey, or a
    little bit less than that. And one of the things that has been
    rattling around in my head is that--the telemedicine issue that
    you touched on earlier is that we ought to be able to figure
    out a way to save money longterm, maybe not initially but
    longterm, by using telemedicine and not only save some money
    but increase the effectiveness of the care in the rural areas
    or at least make it more accessible. For example, I have a bill
    in that deals with making sure that folks, by telemedicine,
    talking to the appropriate neurologist, et cetera, can get a
    quicker response on getting the tPA, in the case of a stroke.
    Because, obviously, if you are in a rural area, sometimes you
    can't get to the hospital where the right doctor has to look at
    you currently to give that medication. But we can speed it up.
        You mentioned that you all are providing some services for
    mental health. I think that is extremely important, because if
    we can catch that, just like with the stroke, instead of having
    somebody in long-term care, which we have talked about and how
    expensive that is, tPA can stop a lot of that. Likewise, with
    mental health, if we catch it early in a regular clinic and we
    are doing that a little bit in my district now. What we found
    is that people are much more likely to go to the clinic, the
    community center, if they can just step into the other room and
    get the mental health, even if it is by telemedicine, because
    we don't have the ability to have population to have
    psychologists or psychiatrists in every one of those
    communities. But there is still a certain stigma. Maybe that is
    not the way it is supposed to be, but there is, particularly in
    rural areas, to getting mental health services. If they can
    just step into another room in the clinic, nobody knows whether
    they are getting their foot looked at for toe fungus or whether
    they are getting a mental health evaluation.
        So just some comments on that, and do you believe that
    there might actually be some savings there longterm,
    particularly in rural settings, because we prevent folks from
    having more serious maladies.
        Mr. Holmes. I believe there are opportunities for cost
    savings by integrating behavior health into primary care, along
    with medical services. We have a couple of rooms set up in some
    of our clinics that have the telemedicine capabilities, the
    hookups for behavioral healthcare. Those patients are scheduled
    routinely. There is no indication that it is a specialty
    behavioral health visit for that patient when they are in the
    waiting room.
        And some of the other things we do is that we do have some
    behavioral health specialists that come in from some of the
    local mental health agencies to our clinics. And they have
    office space and exam room space embedded right into other
    space. So we try and care for the patients in the best way that
    we can within the local situation, within the local facilities.
        There still are reimbursement challenges with telemedicine.
    The originating facility is not usually a part of the
    reimbursement methodology. So you have to build the
    infrastructure without having payment for that infrastructure.
    You have to maintain it. You have to have enough bandwidth to
    have interactive television in those interactive conversations.
        Mr. Griffith. All right. Let me springboard off of that.
    And I believe I have got my names right. Sometimes I get them
    wrong. But the Stark Act, currently, if I understand correctly,
    prevents us from using some of our facilities in conjunction
    with a hospital that might be willing to pay for some of that
    infrastructure, because at one time, they were worried about
    collusion and raising the bills. Today, I have got underserved
    areas. I could use some space in a nursing home, long-term care
    facility, and put in some telehealth stuff, even if it was in
    conjunction with the hospital, because, in all fairness, I only
    got one hospital that's really in competition if you are
    talking about somebody having a heart attack. But my folks have
    to travel about 45 minutes to get there.
        So do you think we need to also look at maybe relaxing some
    of that, particularly when we can get into underserved areas?
        Mr. Holmes. Antitrust issues are certainly an issue for
    medical delivery, especially now when we are seeing the
    development of large systems of care and yet we have small
    providers that are trying to deliver services in a cost-
    effective way. Small areas don't have the depth of resources to
    have competitive services. We have to find the best way to
    deliver that care to our populations. But we have to be, at
    this point, careful of antitrust issues. And it is always
    something that is in the back of our minds.
        Mr. Griffith. So what you are saying is we have to try to
    figure out the balance. We would prefer to have competition,
    but where there is no competition, maybe we need to take a look
    at giving some flexibility on the antitrust issues to make sure
    that we are getting services there.
        Mr. Holmes. Yes, sir, I agree.
        Mr. Griffith. All right. I yield back, Mr. Chairman. Thank
    you.
        Mr. Burgess. Thank you. The gentleman's time has expired.
        And now recognize Mr. Lujan from New Mexico.
        Mr. Lujan. Thank you.
        Mr. Burgess. Five minutes.
        Mr. Lujan. Thank you, Mr. Chairman.
        Ms. Mann, I keep hearing on the news that TrumpCare doesn't
    cut Medicaid, yet the CBO said that is just not true. And I am
    looking at these quotes from different stakeholders. The
    American Academy of Pediatrics says, ``The U.S. and its
    healthcare legislation fails to meet children's needs.'' There
    is too much at stake for those of us who care for children to
    be silent. Pediatricians will continue to speak out for what
    children need until we see legislation that reflects it. The
    Children's Hospital Association are unified in calling on the
    Senate to reject the bill. They say, at its core, the bill is a
    major step backwards for children and their health. And the
    American Academy of Family Physicians say that this legislation
    would have a profoundly negative impact on Americans.
        So, Ms. Mann, can you set the record straight? Is TrumpCare
    a cut for children, families, and for everyone in the Medicaid
    program?
        Ms. Mann. Yes.
        Mr. Lujan. That is a pretty straightforward answer. Just so
    that I am clear, you respond to that question with a resounding
    yes.
        Ms. Mann. With a resounding yes. There is $834 billion
    taken out of the program. There is 14 million people, by CBO
    standards, losing coverage. There is countless other changes
    that states will have to make if those cuts are imposed. And
    children will suffer both from the caps, from their parents
    losing coverage, from the loss of the expansion. There is
    enormous ramifications to the Medicaid program. Negative
    ramifications.
        Mr. Lujan. I appreciate that clarification, Ms. Mann. When
    I asked that question during our 27-hour markup in this
    committee, I was responded to several times that Medicaid was
    not cut. I appreciate the clarification of the reduction, the
    cut of $834 billion from the Medicaid program.
        Ms. Mann, as we have heard today, the Children's Health
    Insurance Program is an important provider of health insurance
    coverage for nearly 9 million American children. However, the
    Medicaid program is a primary source of coverage for low-income
    children covering four times as many kids as CHIP. In New
    Mexico, for example, there is over 414,000 kids that rely on
    Medicaid and 15,000 kids that rely on CHIP.
        Can you please describe the role that Medicaid plays in
    children's coverage?
        Ms. Mann. Sure. And that ratio that you have in New Mexico
    is pretty much what the national average looks like. It is,
    first of all, a much larger program, as you noted from your New
    Mexico figures. Medicaid just covers so many more children. And
    it covers infants. It covers newborns. It covers kids at school
    age. It covers adolescents. It covers 100 percent of a state's
    foster care kids, for example. Any child who has been
    determined disabled under the Social Security definitions, they
    go into the Medicaid program. They don't go into the CHIP
    program. Covers early intervention services for very young
    children. Covers school-based healthcare services. It is a
    program with lots of different functions and lots of different
    ways in which it serves the child population.
        Mr. Lujan. And I think you addressed the next question I
    had, which was what would the concern be associated if the
    Senate passed their bill or the House-passed Republican repeal
    bill, otherwise called as TrumpCare, would pass and how it
    would affect CHIP. I think you eloquently described that.
        Our Nation's leading children's health providers advocates,
    including the American Academy of Pediatrics, Children's
    Defense Fund, Family Voices, First Focus, March of Dimes have
    all spoken out against the Republican repeal bill. And in a
    March 22 statement, they wrote: In addition to the bill's
    initial proposal to fund Medicaid through per capita caps, the
    Republican bill would allow states to choose a block grant
    model, which would eviscerate existing protections afforded to
    children and pregnant women in the Medicaid program.
    Comprehensive EPSDT benefits would no longer be required for
    children, allowing states to ration limited dollars by
    drastically cutting back pediatric services.
        And, Mr. Chairman, I would like to ask for unanimous
    consent to submit their statement for the record.
        Mr. Burgess. Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Lujan. And just as I close, Mr. Chairman, I appreciate
    the conversation about the concerns, Mr. Holmes, with the
    impact in rural communities. I represent a district that takes
    about 8 1A\1/2\ hours to drive across. This is critically
    important. When we talk about the concerns to these rural
    healthcare facilities, the conversations that were taking place
    about the importance of mental and behavioral health programs
    in these small clinics, if these bills become law that would
    eliminate the Affordable Care Act, we would see those programs
    get eliminated, if not disappear.
        And when it comes to getting broadband access across
    America, I certainly agree. I have said it once, I will say it
    again: If there is a debate taking place with TSA about being
    able to have a phone conversation on an airplane once you board
    in Los Angeles, California, and you can stay on that phone till
    you get to New York, then we should be able to have broadband
    coverage all across rural America in every part of our
    beautiful country. We once electrified rural America. Now let's
    make sure that we connect rural America with affordable, fast
    Internet. Everyone should have it. We can get it done. And I am
    glad to hear it being talked about today.
        Thank you, Mr. Chairman.
        Mr. Burgess. The chair thanks the gentleman.
        The chair can see a downside to you being on the telephone
    between Albuquerque and New York. But nevertheless, your
    comments are appreciated.
        The chair recognizes the gentleman from Georgia, Mr.
    Carter, 5 minutes for questions, please.
        Mr. Carter. Thank you, Mr. Chairman. And thank all of you
    for being here. This is a very important program, certainly
    very important in my state. In the State of Georgia, SCHIP is
    the PeachCare program. We are very proud of it. It has been a
    very good program that has benefited many, many recipients.
        I want to ask you, I will start with you, Ms. Snyder, and
    then, Mr. Holmes, I will also want you to address this, but I
    know that, in my district alone, we have got six federally
    funded health centers, and they serve over 55,000 patients.
    Very, very important. One of the things that we require, the
    Federal statute requires, is that states reimburse these
    federally qualified health centers and rural health centers
    using prospective payment system. And there have been groups
    who said this could be done better. And let me quote real
    quick. The National Association of Medicaid Directors has said:
    This distinct reimbursement system limits Medicaid's ability to
    use the full range of value-based purchasing strategies in this
    care delivery setting, including models that incorporate
    financial risk. It also prevents many states from
    comprehensively transforming the healthcare system across all
    providers. The directors have said states need to be allowed to
    align value-based purchasing approaches.
        How do you feel about that? Ms. Snyder, what do you think?
        Ms. Snyder. Congressman Carter, I am happy to answer
    question to the degree that I can.
        What I can tell you is that the State in Texas is well
    aware of the requirement around a prospective payment system
    and very committed to working with all of our managed care and
    provider partners in the advancement of value-based purchasing
    initiatives. Unfortunately, I cannot answer specific questions
    in regard to FQHC reimbursement at this time, because the state
    is in the midst of active litigation on the matter.
        Mr. Carter. Oh, do tell about that.
        Ms. Snyder. I wish I could, but I can't.
        Mr. Carter. OK. We will give you a pass.
        Mr. Holmes?
        Mr. Holmes. Over the years, payment methodologies have
    changed across all provider types, whether it has been a cost-
    based payment, whether it is a discounted fee-for-service
    payment, or whether it is prospective payment system payment.
    FQHCs are currently reimbursed under an FQHC prospective
    payment methodology for both Medicare and Medicaid.
        A couple of years ago, Medicare updated their payment
    methodology. And I think it is important to note that Medicare,
    in that payment methodology update, retained the payment-per-
    visit methodology where a bundled set of services is reimbursed
    under that methodology.
        We are looking at a change to value-based purchasing for
    all provider types. I think the question that comes in with
    value-based purchasing is how do you determine value? We have
    seen, in Minnesota, for instance, we have clinical outcome
    disclosures for outcomes of care for all medical groups. And
    the medical groups will range from Mayo Clinic down to the
    smallest safety net provider. And there are different ratings
    for optimum care and for diabetic care or optimum
    cardiovascular care.
        But what concerns me about value-based payments is whether
    or not that value truly reflects the skill and the care of the
    provider or if it reflects the patient population that provider
    served. If I was going to a value-based system, I would wonder
    whether or not the best value is perceived in the suburban
    areas where there are high levels of income, there are high
    levels of poverty--or low levels of poverty and high education.
    I think we have to be careful that value does not reflect our
    patient populations but more accurately reflects the care that
    is delivered by the provider.
        Mr. Carter. OK. All right. Very quickly. I have just a few
    seconds left. But I want to ask you, Mr. Holmes, if you have
    experienced the 340B program? Do you all use that at all and
    what has been the impact on your systems there?
        Mr. Holmes. We use the 340B program. We have some savings
    under 340B. In turn, we use those savings to pay for some of
    our care coordinators and some of our patient assisters where
    we can align our patients into the pharmaceutical manufacturers
    patient assistance programs, because free is better than
    discounted.
        Mr. Carter. OK. Ms. Snyder, you all use 340B?
        Ms. Snyder. We do.
        Mr. Carter. And the impact?
        Ms. Snyder. I think it is a very valuable tool, in terms of
    influencing reimbursement in regard to pharmaceuticals.
        Mr. Carter. OK. And what do you use the savings for? Can
    you identify it specifically?
        Ms. Snyder. Yes. I would be unable to identify it
    specifically. But certainly, I think we are always looking at
    opportunities to maximize savings that we are seeing in our
    system through various means, including----
        Mr. Carter. OK. Well, we are looking at that closely on
    this committee----
        Ms. Snyder. OK.
        Mr. Carter [continuing]. And on the O&I Committee. So be
    prepared on that. OK?
        Ms. Snyder. Absolutely.
        Mr. Carter. All right. Thank you.
        Mr. Chairman, I yield back.
        Mr. Burgess. The gentleman's time has expired. The chair
    thanks the gentleman.
        The chair recognizes the gentlelady from Florida, Ms.
    Castor, 5 minutes for questions, please.
        Ms. Castor. Thank you very much, Mr. Chairman. And thank
    you to our witnesses and the role that you all have played with
    your organizations and hitting this historic mark of 95 percent
    of America's kids with health coverage now. And it certainly
    isn't the time to go backwards. We need your expertise in how
    we maintain that level. And anyone who cares about making sure
    kids are on a pathway to success in life really need to focus
    on this devastating TrumpCare bill and the most radical change
    to health services for kids under Medicaid in the 50-year
    history.
        At the same time, we do need to reauthorize the Children's
    Health Insurance Program. And there are a few portions of it
    that I think are vital to maintaining that 95 percent an
    upwards coverage rate. One of them is the enhanced 23 percent
    bump. I have heard some people say that the 23 percent bump in
    the match did nothing to improve children's coverage. Well, I
    can tell you, coming from the State of Florida, and this
    happened in many other states last year, we were able to
    eliminate the 5-year Medicaid CHIP waiting period for children
    by using that bump up. It has been a major win for children and
    families.
        In Florida, approximately 17,000 children were now able to
    come onto the rolls. I know in Arizona they were able to lift
    their enrollment freeze in CHIP, in KidCare, allowing 30,000
    kids to receive healthcare coverage.
        Ms. Mann, how important is it, as part of the
    reauthorization, to maintain the 23 percent match, or bump up?
        Ms. Mann. I think, as you note, it really has triggered in
    a number of states. And the National Academy of State Health
    Policy did a report talking to CHIP directors about the impact.
    But also, as Ms. Snyder said, it really is integrated into
    state budgets. And a new Kaiser survey of state budgets done by
    Health Management shows that 26 states are experiencing budget
    cuts. So I think if we pull those dollars out from the CHIP
    program, we will definitely see repercussions. And as I noted
    before, I think it is very much tied to the maintenance of
    effort----
        Ms. Castor. Exactly. That was my next question, because I
    have heard folks say that that maintenance of effort that has
    been in place for 7 or so years and then was extended, in a
    bipartisan way, in the MACRA, some folks say that has limited
    state flexibility and innovation, and it should be allowed to
    expire. But, boy, that maintenance of effort has been vital to
    the continuity of care.
        So is that as it is important? Do the 23 percent go hand-
    in-hand?
        Ms. Mann. They go hand-in-hand. You could have a
    maintenance of effort requirement continuing to protect
    children's coverage and pull the money out from states, but I
    think there would be a lot of unhappy states with that
    arrangement. They really do go hand in hand. And I think even
    more now than 2 years ago, in terms of the stability of
    coverage is just critically important for children.
        Ms. Castor. So if we didn't do that as part of the
    reauthorization, do you think we would see the return of
    waiting lists and lost coverage for kids?
        Ms. Mann. I think we would. We definitely would see a
    pullback.
        Ms. Castor. One of my great fears, and I know it has been
    intimated that, way back in the 1990s, Bill Clinton and the
    Democrats fooled around with block grants. And I can tell you,
    right now, this is very dangerous to the ability of our kids to
    be successful in life when you move this direction. And I am
    particularly frightened for my home State of Florida, because
    Florida spends about $1,880 per child Medicaid enrollee. It is
    the lowest rate in the country, Ms. Mann. If we went to
    Medicaid caps, it appears that that would lock in Florida's low
    spending rate. But we are a high growth state, and our needs
    change over time.
        What would happen to our state's ability to take care of
    kids and the elderly and people with disabilities?
        Ms. Mann. I think Florida is a good example of many states'
    experience where they would be what is referred to as a
    relatively low spending state. They would be locked into those
    dollars, modified only by a small trend rate over time. And if
    they chose to add benefits, if they chose to put different care
    management in to help kids with asthma, kids with diabetes,
    they would either have to do that at state dollars or by
    cutting something else in the program.
        Ms. Castor. Like education or----
        Ms. Mann. As you know, in Florida there is not a lot of
    give----
        Ms. Castor. I mean, where would we go? Would it be folks in
    nursing homes? They are very expensive. Or would it be special
    needs kids or children's hospitals?
        Ms. Mann. Absolutely. And nationwide, we spend about a
    third of our dollars on long-term services and supports for the
    elderly, for people with disabilities. Populations will be
    vying for those limited dollars just to be able to keep steady,
    never mind lose ground.
        Ms. Castor. Thank you for helping to explain what is at
    stake. Thank you very much.
        I yield back.
        Mr. Burgess. The chair thanks the gentlelady. The
    gentlelady yields back.
        The chair recognizes the gentleman from Oregon, Dr.
    Schrader, 5 minutes for questions, please.
        Mr. Schrader. Thank you very much, Mr. Chairman. I
    appreciate it.
        Mr. Holmes, I would love to get into a discussion with you
    on value based. You may have some good points if it was still a
    silo-based delivery system in modern medicine. But I point out,
    in the ACA, there were some risk adjustments to take some of
    that issue away. And in Oregon, most of our physicians, nurse
    practitioners in Medicaid/CHIP arena now use coordinated care
    organizations. We get bundled payments so that it is not just
    the doctor being responsible for the outcome. But you had a
    social worker, a dentist, mental health provider. And, frankly,
    they take it upon themselves to make sure they have ultimate
    success. But I won't belabor that point. That is another
    discussion.
        What percentage of your community health centers' budget
    comes from Medicaid?
        Mr. Holmes. Nationally, it is just under 50 percent.
        Mr. Schrader. OK. So that is a pretty big number. The plans
    we have heard from our Republican colleagues would pretty much
    devastate the funding for community health centers, because it
    would be tough to make up that 50 percent.
        What would happen to your expansion if the Republican plans
    went into effective and you were cut significantly, and
    particularly if you have any rural areas?
        Mr. Holmes. Certainly, if we have an immediate reduction,
    it places us in a difficult position. We have 10 different
    medical and dental delivery sites in nine different
    communities. There is no way for us to be able to sustain all
    of those sites with a significant reduction in resources. That
    means we are faced with which sites do we close, which staff do
    we lay off, how do we reconfigure our providers. And it all
    affects access to care for our patients.
        Mr. Schrader. All right. Thank you.
        Ms. Mann, I guess I will preface my comment. I am like a
    lot of my Republican colleagues, I have got huge swaths of
    rural Oregon in my district. And so I am a little surprised,
    because 25 percent--well, no, actually, half of the kids in
    rural Oregon get their healthcare through Medicaid. It is so
    critical to the success and health of these communities. It is
    a key portion. The rural hospitals are a key component and
    portion of our economic growth in employment in these
    communities.
        So I am very concerned about how these reductions in
    Medicaid reimbursement, certainly over the long haul, will
    affect them. Can you talk a little bit more about what might
    happen in rural areas if the Medicaid expansions roll back like
    we are talking about?
        Ms. Mann. I think one of the things we have been talking
    about so far in this hearing about ways to modernize our system
    of delivering care, ways to integrate behavioral health and
    physical health, ways to bring in telehealth, changing care
    practices, expanding our electronic health records, those all
    require investments. And so the first thing that will go will
    be any of those investments. And states will be scrambling to
    bring their spending down below the caps that are set by the
    Federal Government if the bill passes just because any dollar
    spent over that cap will be wholly state dollars, and any
    Federal dollars brought down over the cap will be clawed back
    the next year and really harm the state.
        So we will not see investments for sure, but we will likely
    see reductions in funding for community providers and other
    specialty providers that allow that fragile fabric of access in
    rural areas to be able to work.
        Mr. Schrader. All right. Thank you.
        Ms. Snyder, you talk about the reduction in uninsured rate
    for kids, I think 16 to 6 in Texas and stuff. What will happen
    to that uninsured rate in Texas if some of the Republican
    healthcare plans go through as currently envisioned? Will it go
    up or down?
        Ms. Snyder. So what I can tell you is the CHIP program,
    clearly, in Texas precedes the advent of the ACA, the AHCA, or
    the Senate proposal that was advanced yesterday. The CHIP
    program in Texas is highly successful. As I mentioned, it has
    resulted in a reduction in the percentage of----
        Mr. Schrader. What about the Medicaid piece? If the
    Medicaid reimbursement for Texas is cut as proposed, is your
    children's uninsured rate going to go up or down?
        Ms. Snyder. So we are, right now, looking at the
    implications of the legislation that has been proposed on the
    House side, as well as the proposal that was advanced
    yesterday, to determine how that is going to impact the state.
    What I will tell you, as a state----
        Mr. Schrader. You are not sure quite yet?
        Ms. Snyder. We are still looking into that, yes.
        Mr. Schrader. All right. Well, I appreciate that, and that
    is a good answer, given where you all are coming from. And I
    feel sorry for a lot of your providers. I know rural hospitals
    in your state, in many states, that did not do the expansion
    are facing some pretty tough times.
        I think there is some middle ground here, to be quite
    honest with you. I too am in favor of making sure that Medicaid
    is put on a budget, but a budget that is realistic and doesn't
    result in tons of uninsured children, children that we should
    not be balancing the budget of this country on. I worry about
    that. But I look forward to work with my Republican colleagues
    to fix this system overall.
        And I yield back.
        Mr. Burgess. The gentleman yields back. The chair thanks
    the gentleman.
        The chair recognizes the gentlelady from California, Ms.
    Eshoo, 5 minutes for questions, please.
        Ms. Eshoo. Thank you, Mr. Chairman. And thank you to the
    witnesses.
        I just want to start out by speaking about what is racing
    through me throughout this hearing, and that is that I have
    lived my life for my children. And I think everyone here has as
    well. We are talking about something that couldn't be more
    sacred: our children, my children, your children, the children
    of our Nation.
        And I really am overwhelmingly sad by what is happening. I
    can't believe that this is taking place in our country. There
    is some sort of conflation that is going on here today. It is
    important for us, obviously, to reauthorize the CHIP program
    and the other, and with all of everything that should be a part
    of it. But to have the evisceration of Medicaid as the top
    issue, top line headline of today that is going on in the
    Congress, what are we doing?
        Children need patriots in the Congress. I don't know what
    has happened to the Republican party. I don't recognize it.
    Republicans that are in my district don't support any of this.
    And a strong CHIP program depends on a strong Medicaid program.
    So there is like a pretend thing going on here. CHIP this, CHIP
    that. CHIP, CHIP, CHIP. What about the chipping away at or the
    destruction of Medicaid? Does anyone here think that we are
    going to be able to care for, provide what our children need in
    our country if we rip away $834 billion out of Medicaid for tax
    cuts that were taking care of them?
        There are myths that are swimming around. The myth that 23
    percent bump in the ACA did nothing to improve children's
    coverage. Since the enactment of the enhanced 23 percent bump
    and the matching payments for CHIP, the states have used those
    additional dollars to improve the care and expand coverage for
    kids in our country. There is a myth that CHIP is the primary
    insurer of low-income children in the United States. Medicaid
    is the primary insurer of low-income children in the United
    States.
        So, yes, CHIP is important, but let's not let all these
    myths creep in around it. This is a shameful thing that is
    taking place in our country. It really is a shameful thing, and
    it is hurtful. What is going to happen to children that are
    disabled? Anyone examined their conscience on that?
        So I would like to go to Ms. Mann and ask you to expand on
    the issue of disabled children. It is one thing for children to
    get the basic care that we all provided for our children. I
    think these families that have disabled children are among the
    most courageous people in our country in what they need to deal
    with. They get up earlier in the morning because they have a
    lot of things to do for that child. It costs more money, more
    doctors, more complications in their lives, more complexities.
    And they try to balance their affections too, because the other
    little ones may end up feeling that this one other child is
    getting more attention from the parents. This is what takes
    place in people's lives every single day across our country.
        And we are sitting here in some insulated, air-conditioned,
    green-painted room as if this one thing that we are going to
    reauthorize, and we should, is just going to take care of
    everything, and that anyone that is involved in it and votes
    for it has absolution. They don't, in my view.
        So, Ms. Mann, would you just say a few words about disabled
    children and these programs that are knitted together.
        Ms. Mann. Yes. Certainly. Thank you for your comments. So
    Medicaid has many different eligibility pathways, and there are
    many different definitions of what is a disabled child. There
    is a category in the Medicaid program that if you have been
    determined disabled by the Social Security Administration of
    the state, then you automatically get Medicaid. In that
    circumstance, there are about 1.9 million children around the
    country who fit in that category. And based on that medical
    necessity standard that we talked about before, they get the
    care that they need, and they get the kind of care that really
    is not otherwise available in the commercial market. And some
    of them get special waiver service. They will get respite care
    for that caregiver who, as you say, is going 20 hours a day in
    terms of taking care of their child. They will get a wheelchair
    refitted as they age and as they grow. So it is a very
    important program.
        And then there are other kids within the other categories
    of the Medicaid program. They may be foster care kids, they may
    be just low-income kids. They might not have a disability that
    meets that level of disability, that gets them into the
    category of disabled, but they are kids with very significant
    healthcare needs. And they too have their needs met very
    strongly by the Medicaid program, which is, I think, why you
    see those statements from organizations like Family Voices,
    Parents of Kids with Special Healthcare Needs.
        Ms. Eshoo. Thank you so much.
        Mr. Burgess. The chair thanks the gentlelady. The
    gentlelady's time has expired.
        The chair recognizes the gentleman from Texas, vice
    chairman of the full committee, Mr. Barton, 5 minutes for
    questions, please.
        Mr. Barton. Thank you, Mr. Chairman. I apologize. I, after
    votes, took a group of Members and staffers out to the hospital
    to see Matt Mika, one of the individuals that was shot in the
    incident last week at the congressional Republican baseball
    practice. So I am a little bit late getting back.
        I think it is obvious----
        Ms. DeGette. How is he doing? Give us a report.
        Mr. Barton. He is up and----
        Mr. Burgess. Do not violate HIPAA, come on. This is a
    Federal--yes.
        Mr. Barton. He is doing very well, Diane. I can't go into
    details, apparently. But he is excited, and hopefully he is
    going to be out of the hospital within a week.
        Mr. Green. Did the chairman invoke HIPAA?
        Mr. Barton. Yes, I am not a doctor. I can just tell you
    what I saw. OK? I saw a breathing, happy young man who is
    wearing the cap of his employer, which I am not going to
    publicize. But they sell a lot of chicken and they are
    headquartered near Arkansas.
        Now, to the purpose of this hearing, Mr. Chairman, we want
    to talk about CHIP reauthorization and community health
    centers. And I think the last CHIP reauthorization I was one of
    the chief cosponsors of. So we are obviously for CHIP and the
    community health centers. My family foundation has bought a
    building in my hometown and donated it to the Hope Clinic,
    which is a community health center for Ellis County, and the
    Nel Barton annex is providing services for low-income citizens
    in Ennis, Texas, and is doing very, very well. And so we are
    strong supporters of the community health centers and SCHIP.
        I have two questions that I have been asked to ask our
    distinguished panel. This one is for Ms. Snyder and Mr. Holmes.
    This committee earlier this year passed a bill to charge
    millionaires, people who have won the lottery, a little bit
    more if, in fact, they have come into some extra money. To put
    it in perspective, this policy change would mean millionaire
    Medicaid beneficiaries would only pay approximately $70 more
    each month. That would save apparently several billion dollars.
        Would you two support making millionaires on Medicare to
    pay their fair share to help pay to extend the SCHIP and the
    health center funds? That was supposed to have been asked by
    Mr. Walden, but he is not here to ask it.
        Ms. Snyder.
        Ms. Snyder. Congressman Barton, I am happy to answer the
    question. As I have mentioned in my testimony earlier and in
    some of my responses over the course of the hearing, in Texas,
    we are very much in support of personal responsibility and
    infusing a level of personal responsibility into the programs
    that we administer. Certainly, this, I think, is a good example
    of an opportunity to infuse that personal responsibility into
    one of our programs in a way that is commensurate. Ultimately,
    we hope, with the earnings, that each of those individuals is
    lucky enough to be a beneficiary of lottery winnings is able to
    draw down as income.
        So we would support a measure such as that and would
    support that it ultimately reflect the earnings in a way that
    holds individuals accountable.
        Mr. Barton. Mr. Holmes.
        Mr. Holmes. Certainly, the expenditures of the Federal
    Government are important to its people. It is also important to
    where those expenditures are directed. We have common things
    that we need to do as far as defense, but we also need to look
    at the care of our most vulnerable populations. And in order to
    do that, we need money. That money is coming from the
    taxpayers. And we have to make sure that it is a fair system
    and that it is a system that has good return.
        I will say, from a health center perspective, we are
    concerned about the return on investment that the taxpayer is
    making in health centers and that we use those dollars wisely
    to lessen the burden on the taxpayer, and that we show a return
    for those dollars in the savings and the Medicaid programs and
    the Medicare programs and throughout all of our patient
    population.
        Mr. Barton. My time has expired, Mr. Chairman. I will
    submit the other question for the record.
        I do want to say that we are working on a bipartisan basis.
    We have a bill called the ACE Kids Act. And we had it in the
    last Congress with over 200 cosponsors. Ms. Castor, who just
    left, Mr. Green, I think everybody in the room right now who is
    a Member was a cosponsor in the last Congress and hopefully
    will be in this Congress. We are going to reintroduce that very
    quickly.
        But it is a bill for these special needs children that have
    complex medical conditions to create a medical home so that
    their care can be coordinated with Medicaid across state lines.
    And it is a voluntary optional program for the states to
    participate in. But if they choose to participate, it
    apparently is a piece of legislation that will make the care
    much better and also save money for the taxpayers. And we hope
    to reintroduce that bill in the very, very near future. And we
    have a commitment to have a hearing on it. And hopefully, we
    are going to have a commitment to move that bill.
        With that, I yield back.
        Mr. Burgess. The gentleman yields back. The chair thanks
    the gentleman.
        The chair recognizes the gentlelady from Colorado, Ms.
    DeGette, 5 minutes for questions, please.
        Ms. DeGette. Thank you very much, Mr. Chairman.
        We have been talking a lot today about--at least on this
    side of the aisle--our concerns about what this TrumpCare bill
    would do to Medicaid and how it would interface with the CHIP
    program, because CHIP is something that we have all agreed is
    important for the children of this country, but it really does
    ride on the foundation of Medicaid. I want to talk a little bit
    about that.
        The $840 billion cut to Medicaid and converse of the
    program into a per-capita cut, under TrumpCare, it would then
    be combined with President Trump's budget, which cuts CHIP
    funding by $3.4 billion by eliminating this so-called 23-point
    bump. So Medicaid covers 37 million children, and nearly 9
    million additional are covered under CHIP. I am trying to
    figure out what would happen if both the TrumpCare cuts to
    Medicaid and the budget cuts to CHIP went through.
        Ms. Mann, can you discuss, from your knowledge, how these
    proposed Medicaid cuts and the CHIP proposal under the Trump
    budget would affect children in the states?
        Ms. Mann. Certainly. Thank you for your question. The House
    provision around setting caps for the program would
    fundamentally change the commitment that the Federal Government
    makes to the children, to people with disabilities, to parents,
    to pregnant women, to people, elderly, who are served by that
    Medicaid program. And they would force states to have to
    significantly reduce their spending in order to stay within the
    caps, unless they were going to spend only their state-only
    dollars.
        And so the kinds of things that states would end up doing,
    no doubt reluctantly, would be things that would reduce access
    to care, things that would potentially look at some of these
    specialized programs for kids with brain injury and special
    healthcare needs, pull out funding around children's school-
    based services and early intervention care. A number of
    different ramifications we think that that would have.
        In addition, it would pull out the funding for the
    expansion population. And this often talks about the so-called
    childless adults in the expansion population--I say so-called,
    because I would be a childless adult. My children are grown. I
    am not a childless adult. But many of those individuals covered
    under the expansion are parents.
        Ms. DeGette. Right.
        Ms. Mann. And children do better when their parents are
    healthy. So between those cuts and the budget cuts, I think we
    would see a really devastating change for children's coverage.
        Ms. DeGette. Let me follow up and ask you, do you think of
    the children who would lose their insurance or lose some of
    those specialized benefits under the cuts, could they be
    covered by CHIP?
        Ms. Mann. CHIP is not designed, both in its financing and
    in its benefit structure, to pick up those children.
        Ms. DeGette. To pick up those kids. That is right.
        Ms. Mann. And if you are pulling the 23 percentage points
    away from CHIP, we are going to see a ratcheting down of CHIP.
        Ms. DeGette. But CHIP is really designed to be in addition
    to Medicaid.
        Ms. Mann. That is right.
        Ms. DeGette. It is not as a substitute.
        Ms. Mann. It needs the foundation of Medicaid in order to
    operate well.
        Ms. DeGette. Now, the administration has said they might
    allow states to lower the bar on Medicaid benefits, cost
    sharing, and other attributes. And I think you alluded to this,
    but if those programmatic changes go into effect, then how is
    that going to impact kids in light of the proposed cuts?
        Ms. Mann. Well, there are many ways in which whether it is
    increased cost sharing and premiums for children and families
    at very low incomes, we talked about lottery winners, but most
    of the children on Medicaid have incomes below the poverty
    line. For a family of three, that is about $1,700 a month to
    support three people every month for rent, food, utilities, all
    that they need. So those kinds of responsibilities may be hard
    for families to bear.
        In addition, if there are reductions in the benefits. If
    there are waivers to EPSDT and kids can't get dental services
    or kids can't get transportation. We have talked about some of
    the problems that children face in rural areas. They need help
    getting transportation to medical care. So those are all of the
    kinds of ways besides just absolutely cutting a group of
    children who are high-needs children off the program that
    states may have to turn to under caps and further budget cuts.
        Ms. DeGette. And states have their own set of budget issues
    too. In my state, we have a constitutional prohibition against
    raising taxes without a vote. So it is not like states have
    huge pools of money they are going to pour into this.
        Thank you so much, and I yield back.
        Mr. Burgess. The chair thanks the gentlelady. The
    gentlelady yields back.
        The chair recognizes the gentleman from Illinois, Mr.
    Shimkus, 5 minutes for your questions, please.
        Mr. Shimkus. Thank you, Mr. Chairman. I'm sorry I wasn't
    here. I was with Coach Barton as we went up to the hospital. So
    I haven't been able to follow all the activities that have been
    going on in the hearing.
        And I think it is safe to say, bipartisanwise, that we
    support the Medicaid program and we support CHIP. So the real
    debate, from what I am gathering, is, you know, tied into
    whatever the Senate is doing, whatever we did. So let me just
    ask a question. Does anyone at the panel know our national
    debt?
        Mr. Holmes, do you know how much our national debt is?
        Mr. Holmes. I believe that it is close to $20 trillion.
        Mr. Shimkus. Ms. Snyder?
        Ms. Snyder. That is my understanding as well.
        Mr. Shimkus. Ms. Mann?
        Ms. Mann. Nineteen point six, I think. And a little over 13
    is public.
        Mr. Shimkus. And what is debt? When we say that, what is
    that? Is it safe to say it is our promises to pay future
    services either--because we know what drives our national debt.
    It is the mandatory spending programs. People don't like to say
    this, but it is just true. It is Medicare, Medicaid, Social
    Security, and our interest payments.
        I will point everybody up to the pie chart, which has
    been--I use this a gazillion times. So that is 2015 spending.
    And when we find on our budget, we are fighting that blue area,
    which is the discretionary. And we are going to be going
    through that. Does anyone reject that pie chart as being an
    accurate depiction of our Federal spending?
        No. OK. I am seeing everybody believing that what we put up
    there is accurate.
        So in the red, we have automatic spending and Social
    Security, Medicare, Medicaid, which means we are not engaged in
    determining those costs. They are automatic, other mandatory
    interest payment. And the blue is what we call discretionary
    spending.
        So go to the next chart. So this is what has happened in
    our Nation since 1965. As you see that the mandatory spending
    continues to grow, squeezing out the discretionary budget,
    which are things like defense, education, HHS, Department of
    Energy, roads, bridges, infrastructure, and the like. And so if
    left unchecked, in 2026, we continue to start having big
    problems. And that is why we discuss it.
        We don't discuss the debate on mandatory spending out of a
    desire to be mean, vindictive. We actually discuss this to save
    our country. Admiral Mullen said in testimony before the Armed
    Services Committee, our debt is our national threat. The threat
    to our country relies in that depiction there.
        So what we did in our healthcare bill--and I am not sure
    what my colleagues on the other side ended up saying, but the
    fact is we have Medicaid spending and we have a percentage of
    growth, per capita growth. So as much as they want to say it is
    a cut, over the years, it has increased Medicaid spending at a
    slower rate than what would happen if you left it automatic.
    That is the reality of the state.
        So if someone is something you are cutting Medicaid, in
    real dollars, they are not telling the truth. It is an
    inaccurate depiction of what we have done. And my guess is that
    is what has been going on today in the hearing. Where we are
    trying to get control of the threat to our Nation, which is our
    national debt, and we are trying to provide to our providers a
    stable funding stream that grows and let them, through the
    Medicaid program in the state, manage how best to provide for
    their citizens in the states. Empowering governors, who are
    actually closer, so it just impels me to raise that.
        And my time is almost over. But I would just end on this.
    This is from a report, and I can provide it to the minority. I
    am not asking for it to be submitted into the record. But
    current projections bear no resemblance to a picture in which
    people historically dependent on Medicaid would lose their
    benefits. To the contrary, CMS estimates that Medicaid
    enrollment would stay roughly constant at current levels under
    the AHCA, while still be being substantially higher than
    projected before the Affordable Care Act was passed. Indeed,
    CMS finds that many states would still cover some of the ACA
    expansion population, even if lawmakers do away with the AC's
    inflated Federal matching payment rate. This would mean
    expanded coverage relative to pre-AC levels, while also being
    equitable for the ACA.
        And my time has expired, and I yield back.
        Mr. Burgess. The chair thanks the gentleman. The
    gentleman's time has expired. The gentleman yields back.
        The chair recognizes the gentleman from California, Mr.
    Cardenas, 5 minutes for questions, please.
        Mr. Cardenas. Thank you, Mr. Chairman. I appreciate the
    opportunity to hear from the witnesses and also the opinions of
    our colleagues.
        Unfortunately, my colleague, Mr. Shimkus, his time was
    expired, but I would like at least one of the witnesses to take
    an opportunity to respond to the narrative that we just heard
    for the last 5-plus minutes.
        Ms. Mann, would you like to maybe enlighten us a little bit
    about the juxtaposition between the argument that was just made
    on expenditures versus healthcare?
        Ms. Mann. Sure. I will take a stab at that. Thank you.
        Let me say a couple of things. One is that the Medicaid
    reductions in spending in the bill largely are not being used
    to reduce the deficit. They are largely being used to finance
    new tax cuts in the bill. So the connection there is not as
    strong as it might otherwise seem.
        But I think the bigger issue in terms of the healthcare
    debate is there is no dispute, I think, among anyone,
    healthcare policy experts, hospital administrators, consumers,
    state Medicaid agencies, that we need to do what we can to
    bring down healthcare costs. And that has been, I think, what
    people have been engaged in, particularly in the last 4 or 5
    years, the integration of behavioral health, the physical
    health, the care management, the telehealth. Those are all
    mechanisms to deliver better care and to do that in a way that
    lowers cost.
        And what won't work is if you simply take one part of the
    healthcare system, the largest source of coverage for the
    lowest income people, and just say, on that program, we are
    going to put a cap, because that doesn't change the cost. That
    doesn't change the healthcare needs. It is a tougher job to do
    that.
        Mr. Cardenas. In the long run, what you just described, if
    you just take away dollars and reduce benefits of being able to
    see a doctor or getting healthcare, in the long run, doesn't
    that set us on a trajectory to increase cost and reduce the
    health level of Americans?
        Ms. Mann. I think that is absolutely right. When people
    don't get care at the right time at the right place, they go to
    emergency rooms, they have more inpatient admissions.
        Mr. Cardenas. That is preventative care, which, ``A stitch
    in time saves nine.'' I love that. When I was a kid, I hated
    hearing that, but now that I am adult, gosh, makes a lot of
    sense, especially as a policymaker.
        Ms. Snyder, taking a swath of money, like $1 trillion away
    from our American healthcare system, and then--I don't know if
    you agree with me, but having less people having direct access
    to care, doesn't that create--in the long run, we put ourselves
    on charting the course of, oops, now per person long term we
    are probably spending more for healthcare and maybe not even
    having better care, just more emergency care, more last-minute
    care.
        Ms. Snyder. So what I would say is I think the CHIP program
    actually provides us with a great opportunity to look at a
    program that does infuse some of those critical concepts into
    the program framework that can help to drive down costs. Those
    include state administrative flexibility, the inclusion of
    personal responsibility----
        Mr. Cardenas. Yes, but with all due respect, state
    flexibility is something that is thrown around a lot. But if
    you have more flexibility and a heck of a lot less money or
    resources to provide care for your state constituents, your
    people who live in your state, can that contribute to, oops, we
    are now setting ourself on a course where less care in time
    early on, less preventative care means that, oops, we are now
    snowballing for different reasons and having more expenditure
    need on care in the long run?
        Ms. Snyder. So I think that is a great question, and I
    think----
        Mr. Cardenas. Well, what is the answer? Is that an accurate
    narrative or I am just not seeing it right?
        Ms. Snyder. What I would say is it is incumbent upon
    states, and it is going to be more crucial than ever that
    states----
        Mr. Cardenas. I used to be a state legislator. I used to be
    the budget chairman. So I know what it is like to make those
    tough decisions, saying we have all the things that we love to
    do but just not enough money to do it. And then when the Feds
    go around saying we are going to block grant you, and all of a
    sudden we went from taking off a 0 of how much money the Feds
    give us, then we say, oh, my gosh, that didn't reduce the need
    to provide for our constituents. All it meant is we have less
    money to do it with.
        Ms. Snyder. And I believe that is the case. And so what it
    is going to really call on us to do is to critically evaluate
    the data that we have on hand and ensuring that we are making
    informed and smart decisions----
        Mr. Cardenas. Sure. But with all due respect, if I were a
    single mother with two children and people are telling me,
    reevaluate your family situation, and I have no healthcare
    coverage for my children, that analysis ain't going to do my
    diddly when my son gets really sick and gets a fever, and I
    don't have a clinic to go to, and I don't have coverage, and I
    am not part of CHIP anymore because I am on a waiting list, or
    I don't have Medicaid anymore because I am on a waiting list
    for my state.
        And then all of a sudden, guess what I am going to do as
    that single mom? I am going to end up in the emergency room.
    And, gosh, darn it, I think it is going to cost the state more.
    It is going to cost that hospital more. It is going to tax
    them. It is not going to help my challenge.
        For Heaven's sakes, if my child has a fever because he has
    a more serious condition, and if I would have taken him to a
    doctor 2 years ago, they would have found it early, and all of
    a sudden now my child has fourth stage something else. Oh,
    believe me, we are going in the wrong direction.
        And I appreciate your generosity, Mr. Chairman, for
    allowing some of us to go over our time on both sides of the
    aisle. Thank you. I am out of time.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        The chair recognizes the gentleman from New York, Mr.
    Engel, 5 minutes for questions, please.
        Mr. Engel. Thank you very much, Mr. Chairman.
        I want to make a statement and then I have a couple of
    questions for Ms. Mann.
        Let me say at the outset that I strongly support CHIP, the
    Children's Health Insurance Program, and our Nation's community
    health centers. I was very proud to support the Medicare Access
    and CHIP Reauthorization Act back in 2015, and it most recently
    extended those two vital programs.
        I would like to point out, though, that those
    reauthorizations passed the House in March of 2015 and was
    signed into law by mid-April, and yet here we are at the end of
    June without a plan to fund programs set to expire in
    September. It is certainly not right.
        And in reality, our timeline is even tighter than that.
    Months before their funds are depleted, some states must start
    the process of shutting their CHIP programs down. And that
    means that if Congress doesn't act fast, it is entirely
    possible that children will see their coverage disrupted, and I
    think Mr. Cardenas pointed that out.
        So why hasn't Congress acted yet? Why didn't we vote to
    extend funding for CHIP and community health centers in March
    as we did in 2015? And the answer is that TrumpCare monopolized
    the House's time and prevented us from doing all these
    important things.
        And that is not the only thing that TrumpCare has
    endangered. TrumpCare will cut and cap care for the 37.1
    million children on Medicaid. And on top of that, TrumpCare's
    radical restructuring of Medicaid has dangerous implications
    for the CHIP program. A strong CHIP program depends on a strong
    Medicaid program. They work in concert to afford children
    comprehensive coverage.
        How? First of all, more than half of children with CHIP are
    actually enrolled in expanding Medicaid coverage that is
    financed by CHIP. These programs also work together to meet the
    needs of different populations of kids since Medicaid covers
    benefits that other insurers do not.
        CHIP reauthorization is vitally important for America's
    kids. I don't dispute it. My Democratic colleagues don't
    dispute it. But in a discussion on this topic--a discussion on
    this topic can occur in a vacuum. If TrumpCare becomes law and
    Republicans therefore succeed decimating Medicaid, there is no
    way to go around it. Children will be much worse off.
        I want to talk about President Trump's budget, which
    unfortunately exacerbates the problems that TrumpCare creates
    for kids. While we should enact a full, long-term extension of
    CHIP, this budget proposes harmful changes to the program.
        What does it do? It will abolish the enhanced Federal
    funding match that states get now. It will overturn the
    requirement that states maintain children's current eligibility
    levels, turning back the clock on historic coverage
    improvements, and cut off support for CHIP kids above 250
    percent of the Federal poverty level.
        I want to talk more about this last point, because right
    now, 24 states have income eligibility for Medicaid and CHIP
    and are greater than 250 percent of the Federal poverty level.
    This includes my State of New York. We are a high cost-of-
    living state. So what you buy in New York, you buy a lot less
    for the same money than you do in other states. It is
    ridiculous to penalize states like mine. The administration
    wants to cut off Federal dollars, give nearly half of all
    states the flexibility to cover children above 250 percent of
    the Federal poverty level.
        We hear a lot about states' rights, and yet we want to take
    away the flexibility that states have, the programs that states
    deem are important for them. We want to tell them, the Federal
    Government, what they can and cannot do. So much for states'
    rights.
        If this cut takes effect, I have to imagine that states
    will have no choice but to restrict eligibility for the CHIP
    program, thus cutting off care for children who have CHIP
    coverage today. So it is bad enough that we won't be helping
    children who need this coverage; it will be throwing children
    off who have it today.
        So let me ask you, Ms. Mann, since this provision would
    affect my district, where one-third of children are covered by
    Medicaid or CHIP, I am extremely concerned about its potential
    effects. Can you tell us what we can expect to happen if
    Federal support for CHIP kids above 250 percent of the Federal
    poverty level is cut off?
        Ms. Mann. Thank you for the question. You are absolutely
    right. We have about 24 states that cover children at some
    income levels above 250 percent of the poverty line.
        Most of the children actually in the program, 97 percent,
    have incomes below 250 percent of the poverty line. But those
    states that have increased their eligibility levels have made a
    determination, have exercised their safe flexibility because of
    cost in that state, because of market conditions in the state,
    for various reasons of concern for the kids in their states
    have decided that having CHIP as an option for those children
    is really important.
        And I should say, New York, like every other state that
    covers children at higher income levels, requires the families
    to pay a portion for their care, so there is premiums and the
    premiums slide in accordance with the income.
        If in a state like New York with high healthcare costs and
    high premiums for other kinds of coverage have to end their
    coverage, go down to 250 percent of poverty, those children
    will be scrambling for other kinds of care. They will pay
    higher cost. Their benefits won't be as pediatric focused as
    they are in the New York CHIP program. And many of them,
    because of what is called the family glitch, won't be able to
    qualify for subsidies in the marketplace.
        Mr. Engel. Well, I had a couple of more questions, but you
    have really answered them about how this in turn would effect
    coverage levels----
        Mr. Burgess. That is good, because your time has expired.
    So the gentleman yields back, and the chair thanks the
    gentleman for his participation.
        I want to recognize myself for questions. The chair would
    point out that the chair did delay his questions until the end
    to allow all other members to ask their questions and then
    accommodate their travel plans, if they had them. I may not use
    the entire 5 minutes, because this has been a very robust and
    insightful discussion.
        We do have a task ahead of us, which is the funding for the
    State Children's Health Insurance Program, which concludes on
    September 30 of this year, the end of the fiscal year. That, of
    course, was a fiscal cliff that was set in motion under the
    Affordable Care Act, when the Affordable Care Act passed and
    was signed into law in 2010, as CHIP was reauthorized to the
    end of fiscal year 2019, funded only until the end of fiscal
    year 2015. Your chairman, as part of the SGR Repeal, managed to
    get 2 years of funding until fiscal year 2017, and that is the
    task that is ahead of us at this time.
        So, Ms. Snyder, I need to ask you what is just a very
    practical and Texas-focused question, but since the majority of
    the dais members now are from Texas, it will be appropriate.
    You said in your testimony, what you provided us in your
    testimony, that Texas has just concluded its legislative
    session. Is that correct?
        Ms. Snyder. Exactly.
        Mr. Burgess. And Texas, the legislative session is every 2
    years. So your budget is now set until the next legislative
    session in 2019. Is that correct?
        Ms. Snyder. That is correct.
        Mr. Burgess. And there were some assumptions made by the
    finance committees that are there in the Texas House and Texas
    Senate, the budget committees in the House and Senate, there
    were some assumptions made that the funding for State
    Children's Health Insurance Program would, in fact, continue
    until 2019. Is that correct?
        Ms. Snyder. Yes, with the 23 percent additional bump in----
        Mr. Burgess. So changes that we make now come after the
    fact for what your state Senators and state representatives
    assume to be what was going to be available for them to include
    in their budget, and any changes we make now would have a
    significant effect on the state budget that has already been
    passed and I believe signed into law. Is that correct?
        Ms. Snyder. Exactly, an $800 million impact over the
    biennium.
        Mr. Burgess. So I understand the importance of getting this
    done. And let me just also say that under current law, under
    the Affordable Care Act, under current law, something happens
    to disproportionate share funding in Texas. Doesn't it?
        Ms. Snyder. Yes.
        Mr. Burgess. What is that that happens to disproportionate
    share funding? They have funds that go to hospitals that see a
    disproportionate share of Medicaid, low income, and uninsured.
    What happens to those funds in Texas?
        Ms. Snyder. Can I ask you to clarify the question?
        Mr. Burgess. What happens under current law, under the
    Affordable Care Act, so-called DSH funds, the disproportionate
    share funds, those additional funds paid to hospitals, paid to
    institutions to see a disproportionate share of Medicaid low-
    income and uninsured, what happens to those funds at the end of
    this fiscal year?
        Ms. Snyder. And I am sorry, I don't know the answer to the
    question.
        Mr. Burgess. Well, I know the answer.
        Ms. Snyder. And I apologize.
        Mr. Shimkus. I know the answer too.
        Mr. Burgess. And I will be glad to share it with the
    committee. Those funds, under current law, under the Affordable
    Care Act--of course, everyone is going to be lying down the
    allegiant fields of ObamaCare. There is going to be no need to
    provide additional funding to those hospitals because everybody
    has got this wonderful health insurance that was provided under
    the ACA.
        But under current law, Texas is going to lose those funds
    in October of this year, and that was an effort--we did try to
    correct that in the bill that passed through this committee in
    a 28-hour markup and passed on the floor of the House the first
    part of May. And I know my state counterparts were very
    interested that we take care of that discrepancy, and I think
    that we have.
        Let me just ask you, because I have run a little bit long
    with that, we all want our dollars to be spent appropriately.
    And Medicaid has a history. Sometimes dollars aren't always
    spent appropriately. But over and above the dollars being spent
    appropriately, if a patient is eligible for Medicaid, but they
    also have a commercial insurance, another third party that is
    supposed to be liable for their medical care, sometimes the
    path of least resistance is just to bill the Medicaid system,
    and that seems to be a quicker way of collecting the money.
        But one of the things that we have been working on is to
    enhance the ability to collect the third-party liability, if
    there is coverage that is actually owed by another payer, a
    commercial insurer. So what has your experience been in
    managing potential overpayments within the state related to
    third-party liability?
        Ms. Snyder. So we are very committed in the State of Texas
    to ensuring, when there is another payer source, that we are
    capitalizing on that payer source and that Medicaid remains the
    payer of last resort.
        We have efforts underway, both within the Medicaid program
    and in conjunction with our inspector general, to ensure that
    we are systemically drawing on the funding that is available
    from those other payer sources. It is one of our priority
    projects every year, understanding that that Medicaid impact is
    the payer last resort.
        Mr. Burgess. Very good. Well, we will have legislation
    coming on that, and I appreciate your input on that.
        Mr. Holmes, let me just ask you. I certainly appreciate
    what you do and what other people involved in community health
    centers and federally qualified health centers provide. When a
    patient sees a physician or a nurse practitioner at a federally
    qualified health center who is covered by Medicaid, is the rate
    reimbursed by Medicaid the same as it would be by a physician
    practicing in private practice in the same town?
        Mr. Holmes. It is not, in most cases. Health centers are
    paid under a PPS system, and it is a bundled set of services
    for the Medicaid patient. And it is based on payment
    methodology that was passed through Congress many years ago.
    And that is different than a discounted fee for service payment
    arrangement that currently exists with a number of other
    Medicaid providers.
        Mr. Burgess. And that would be the provider out in private
    practice?
        Mr. Holmes. That is correct, unless those providers are in
    a capitation system or in some type of ACO.
        Mr. Burgess. Be careful. We have heard that ``capitation''
    is a bad word this morning.
        Mr. Holmes. It is a method of payment where you are paid on
    a per-member per-month basis. And for that per-member per-month
    basis, you are delivering the scope of care within that
    agreement.
        Mr. Burgess. And another aspect of the difference between a
    doctor in private practice and a doctor working in a federally
    qualified health center is the liability question. Is that not
    correct?
        Mr. Holmes. That is correct.
        Mr. Burgess. So a doctor in private practice has to carry
    medical liability insurance, which, as you know, in some areas,
    can be quite expensive. But in a federally qualified health
    center that cost is ameliorated by participation in the Federal
    Tort Claims Act. Is that correct?
        Mr. Holmes. That is correct. And it was under Congress'
    direction to include health center physicians and providers in
    FTCA, because they felt it was a method to save healthcare
    dollars.
        Mr. Burgess. And I don't disagree with that. In fact,
    probably when Gene Green was in the State House in the early
    1990s, our state legislature provided doctors who did a certain
    percentage of Medicaid in their practice the first $100,000 in
    liability coverage. That didn't last, and I don't know why. It
    was probably too expensive as a state program.
        But if we want to encourage the number of providers to see
    patients who are covered by Medicaid, that seemed to me to be a
    very forward-leaning aspect of what they did back in the early
    1990s. So I want to thank my colleague from Texas. I am sure he
    was the main driver of that liability assistance when it
    occurred.
        Well, I want to thank all of our witnesses. Seeing no other
    members wishing to ask questions, I do want to thank the
    witnesses for being here.
        We received outside feedback from a number of organizations
    on these bills, so I would like to submit statements from the
    following for the record: the American Academy of Dermatology
    Association; America's Essential Hospitals; American Academy of
    Family Physicians; AHIP; the Healthcare Leadership Council; our
    House colleagues from Minnesota; a CHIP letter from 1,200 local
    state and national organizations. So without objection, so
    ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Green. Mr. Chairman, I won't ask for the 4 minutes
    extra you have on your 5 minutes, but----
        Mr. Burgess. No, sir, I accrued all of the extra minutes I
    gave on your side and utilized them for our side, because I
    knew my questions would be most important.
        Mr. Green. Well, I appreciate your activity, but that was
    taken at the end. All I want to do is--give me 1 minute.
        Mr. Burgess. The gentleman is recognized.
        Mr. Green. First of all, I was in the legislature in 1991,
    and I am not sure but--after that I ran for Congress. But the
    State of Texas is going to be in special session. Is that not
    correct?
        Ms. Snyder. That is correct.
        Mr. Green. In the next few weeks. Having been there and
    done that, nobody likes special sessions in summer.
        But the other issue is, Texas did not expand Medicaid. Is
    that correct?
        Ms. Snyder. That is correct.
        Mr. Green. OK. And the other issue is third-party coverage.
    That is not unusual, because if you have an auto accident, the
    hospital has--in Texas, I assume everywhere else--has a right
    to put a hospital lien on that, whatever you win from your
    lawsuits. So I don't have any problem with Texas doing that
    under Medicaid, so that is pretty common.
        But that is not going to solve our problem with Medicaid in
    our terrible program we have in Texas. And even there, when
    Democrats were in the majority, Texas has always have been very
    conservative. Our Medicaid program is nothing compared to some
    others.
        And, in fact, I will give one example. After Katrina, the
    Houston area received a quarter of a million people. We brought
    them in under our Medicaid system, although the state
    legislature was out of session. We were able to get Federal
    money to do the state match for those folks, and over a period
    of time, they either went back to Louisiana or they became
    Texan. And that is when I found out that Louisiana actually
    gets 75 percent Federal reimbursement, and Texas receives 67
    percent. And I would hope maybe our subcommittee could look at
    that and see why is it more expensive than Louisiana.
        Mr. Burgess. Will the gentleman yield?
        Mr. Green. I would be glad to.
        Mr. Burgess. I do not know all of the intricacies of the
    formula that CMS uses to calculate, but it is based on the
    average state income as well and probably reflects that average
    state income in Texas is somewhat greater than the average
    state income in the State of Louisiana. And that is probably a
    fiscal fact for which we should both be extremely grateful and
    thank our lucky stars that we live in Texas.
        Mr. Shimkus. Would the gentleman yield?
        Illinois is a 50/50 state, so I just want you to put that
    on the record.
        Mr. Green. Thank you, Mr. Chairman.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        Let me just continue on the unanimous consent requests that
    I was doing. I also want to ask unanimous consent to submit for
    the record copies of the Congressional Record volume 141, issue
    207, Friday, December 22, 1965, where Senator Patty Murray
    introduced to the record over in the Senate a letter to
    President Clinton asking for the participation in a per-capita
    cap arrangement.
        Mr. Green. 1995.
        Mr. Burgess. Did I say 1995?
        Mr. Green. You said 1965.
        Mr. Burgess. 1965. 1995. Time flies.
        I also want to submit for the record a New York Times
    editorial from 1997, February of 1997, called ``Making the
    Budget Bearable,'' where they point out that the President
    offers an important reform of Medicaid proposing to control
    future spending by placing a cap on the amount of Federal
    spending per enrollee and allowing states to place enrollees in
    managed care without going through the frustrating process of
    begging for Washington's approval.
        Without objection, so ordered. Those things will be entered
    into the record.
        Mr. Burgess. Pursuant to committee rules, I remind members
    they have 10 business days to submit additional questions for
    the record. I ask that witnesses submit their responses within
    10 business days upon a receipt of those questions.
        Without objection, the subcommittee is adjourned.
        Mr. Green. Mr. Chairman, we could be here all day, but I
    also wanted to remind you, in 1995, I think the Senate
    Republicans wanted an individual mandate.
        Mr. Burgess. That was actually in response to a request for
    a block grant.
        The subcommittee stands adjourned.
        [Whereupon, at 1:14 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
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