[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
                           
                           
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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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