[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                   THE INSULAR AREAS MEDICAID CLIFF

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

                           OVERSIGHT HEARING

                               BEFORE THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                         Thursday, May 23, 2019

                               __________

                           Serial No. 116-18

                               __________

       Printed for the use of the Committee on Natural Resources

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


        Available via the World Wide Web: http://www.govinfo.gov
                                   or
          Committee address: http://naturalresources.house.gov
          
                              __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
36-525 PDF                  WASHINGTON : 2019                     
          
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                     COMMITTEE ON NATURAL RESOURCES

                      RAUL M. GRIJALVA, AZ, Chair
                    DEBRA A. HAALAND, NM, Vice Chair
   GREGORIO KILILI CAMACHO SABLAN, CNMI, Vice Chair, Insular Affairs
               ROB BISHOP, UT, Ranking Republican Member

Grace F. Napolitano, CA              Don Young, AK
Jim Costa, CA                        Louie Gohmert, TX
Gregorio Kilili Camacho Sablan,      Doug Lamborn, CO
    CNMI                             Robert J. Wittman, VA
Jared Huffman, CA                    Tom McClintock, CA
Alan S. Lowenthal, CA                Paul A. Gosar, AZ
Ruben Gallego, AZ                    Paul Cook, CA
TJ Cox, CA                           Bruce Westerman, AR
Joe Neguse, CO                       Garret Graves, LA
Mike Levin, CA                       Jody B. Hice, GA
Debra A. Haaland, NM                 Aumua Amata Coleman Radewagen, AS
Jefferson Van Drew, NJ               Daniel Webster, FL
Joe Cunningham, SC                   Liz Cheney, WY
Nydia M. Velazquez, NY               Mike Johnson, LA
Diana DeGette, CO                    Jenniffer Gonzalez-Colon, PR
Wm. Lacy Clay, MO                    John R. Curtis, UT
Debbie Dingell, MI                   Kevin Hern, OK
Anthony G. Brown, MD                 Russ Fulcher, ID
A. Donald McEachin, VA
Darren Soto, FL
Ed Case, HI
Steven Horsford, NV
Michael F. Q. San Nicolas, GU
Matt Cartwright, PA
Paul Tonko, NY
Vacancy

                     David Watkins, Chief of Staff
                        Sarah Lim, Chief Counsel
                Parish Braden, Republican Staff Director
                   http://naturalresources.house.gov
                   
                   
                              ----------                                

                               CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, May 23, 2019...........................     1

Statement of Members:

    Gonzalez-Colon, Hon. Jenniffer, Resident Commissioner of the 
      Commonwealth of Puerto Rico................................     4
        Prepared statement of....................................     5
    Sablan, Hon. Gregorio Kilili, a Delegate in Congress from the 
      Territory of the Northern Mariana Islands..................     1
        Prepared statement of....................................     3

Statement of Witnesses:

    Arcangel, Theresa, Chief Administrator, Guam Division of 
      Public Welfare.............................................    31
        Prepared statement of....................................    32
        Questions submitted for the record.......................    35
    Avila, Angela, Executive Director, Puerto Rico State Health 
      Insurance Administration...................................    54
        Prepared statement of....................................    55
        Questions submitted for the record.......................    58
    King Young, Sandra, Medicaid Director, American Samoa 
      Government.................................................    45
        Prepared statement of....................................    46
        Questions submitted for the record.......................    49
    Muna, Esther L., Chief Executive Officer, Commonwealth of the 
      Northern Mariana Islands Healthcare Corporation............     8
        Prepared statement of....................................     9
        Questions submitted for the record.......................    16
    Rhymer-Browne, Michal, Assistant Commissioner, U.S. Virgin 
      Islands Department of Human Services.......................    37
        Prepared statement of....................................    39
        Questions submitted for the record.......................    42
    Sablan, Helen C., Director, Commonwealth of the Northern 
      Mariana Islands State Medicaid Agency......................    19
        Prepared statement of....................................    20
        Questions submitted for the record.......................    25

Additional Materials Submitted for the Record:

    List of documents submitted for the record retained in the 
      Committee's official files.................................    92

    Submissions for the Record by Representative Gonzalez-Colon

        PowerPoint Slides on the Healthcare and Medicaid Funding 
          in the U.S. Territories................................    68

        Statement by Jaime Pla Cortes, Executive President of the 
          Puerto Rico Hospital Association dated May 23, 2019....    69

    Submission for the Record by Representative Grijalva

        Statement for the Record from Natalie A. Jaresko, 
          Executive Director of the Financial Oversight and 
          Management Board for Puerto Rico dated May 22, 2019....    91
                                     


 
         OVERSIGHT HEARING ON THE INSULAR AREAS MEDICAID CLIFF

                              ----------                              


                         Thursday, May 23, 2019

                     U.S. House of Representatives

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The Committee met, pursuant to notice, at 10:06 a.m., in 
room 1324, Longworth House Office Building, Hon. Gregorio 
Sablan [Vice Chairman of the Committee] presiding.
    Present: Representatives Grijalva, Sablan, Lowenthal, Cox, 
Van Drew, Cunningham, Soto, Horsford, Tonko, Radewagen, 
Gonzalez-Colon, and Hern.
    Also present: Representative Plaskett.

    Vice Chair Sablan. Good morning. The Committee will now 
come to order.
    The Committee is meeting today to hear testimony on the 
impact of the end of Medicaid funding for the insular areas 
under the Affordable Care Act, also known as the insular areas 
Medicaid cliff.
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chairman and the Ranking Member. 
Therefore, I ask unanimous consent that all other Members' 
opening statements be made part of the hearing record if they 
are submitted to the Clerk by 5 p.m. today.
    I ask unanimous consent that the gentlewoman from the U.S. 
Virgin Islands, Ms. Plaskett, be allowed to sit on the dais and 
question the witnesses.
    Hearing no objection, so ordered.

  STATEMENT OF THE HON. GREGORIO KILILI SABLAN, A DELEGATE IN 
  CONGRESS FROM THE TERRITORY OF THE NORTHERN MARIANA ISLANDS

    Vice Chair Sablan. Good morning again, everyone.
    The Mariana Islands, which I represent, and the four other 
U.S. insular areas all face a Medicaid cliff at the end of this 
year. Supplemental funding for the Medicaid programs in our 
areas included in the Patient Protection and Affordable Care 
Act, or ``Obamacare'' as we like to call it, expires this year.
    And I can just recall as if it was only yesterday when 
Pedro Pierluisi and I enlisted the help of the congressional 
Hispanic Caucus and met with the President on this issue, and 
the Senator from New Jersey joined us. And I think from that 
meeting we were able to get this money, because we were not 
included in the Affordable Care Act under the reconciliation 
budget process.
    But loss of that funding puts healthcare delivery at risk, 
not just for Medicaid recipients in our islands, but for the 
population at large. Today's hearing is meant to shine a light 
on that imminent crisis.
    I want to thank the directors of the insular areas Medicaid 
programs for being here as witnesses. Your programs are already 
short of cash, so the cost of coming to Washington was not 
taken lightly, but I think that we could have no better 
spokespeople to describe how truly dire the situation is. I 
hope we will be able to learn from you what the loss of 
Medicaid funds will mean to the people you serve--real people, 
our people, who simply have no other means of getting basic 
health care.
    Also invited to testify today is the Chief Executive 
Officer of the Commonwealth Healthcare Corporation, Ms. Esther 
Muna runs the one and only hospital in the Marianas, and that 
hospital depends on Medicaid for over one-quarter of its 
revenue.
    I hope Ms. Muna will be able to tell us what the loss of 
Medicaid funding will mean to the hospital's ability to deliver 
services and how that will impact not only Medicaid patients, 
but all her patients. I think Ms. Muna's description of how the 
hospital depends on Medicaid revenue will help us understand 
how losing Medicaid revenues will hurt healthcare providers in 
private practice as well.
    So, we are all working from a common set of facts, let me 
quickly review the situation. In the states and the District of 
Columbia, Medicaid is an entitlement program. To the extent 
there is a need for services and to the extent a state can 
provide local matching funds, Federal Medicaid funds are always 
available.
    In the five insular areas, this is not the case. Up until 
2011, we each received a fixed block grant. That block grant, I 
am sorry to say, is unrelated to the needs of each of our 
areas. It seems to have been set rather arbitrarily decades 
ago. And the local match to access that block grant was set in 
law at 50/50. And 50/50 is the same matching rate as the 
wealthiest states, while states as poor as the insular areas 
only match at a rate of 24 local/76 Federal.
    Obamacare provided some relief--an extra $7.3 billion in 
temporary Medicaid funding and a permanent change to the match 
to 45 local/55 Federal. But the Obamacare money is no longer 
available after this year, and all the insular areas will 
revert to their block grants.
    Using 2018 data for American Samoa, that means going from 
$20 million in Federal funding to $12 million; for Guam, from 
$56 million to $18 million; for the Marianas, from $25 million 
to $7 million; for the U.S. Virgin Islands, from $70 million to 
$18 million; and for Puerto Rico, from $2.3 billion to just 
$360 million. We cannot suffer cuts like that and continue to 
deliver services.
    The path forward is unclear. Certainly, more money is 
needed, and an equitable matching rate. But there is also the 
need for each of the insular areas to build capacity to deliver 
care. Because, ultimately, the goal is not just to have the 
same funding as states. What we want is medical care for those 
who need it in the insular areas to be every bit as good as 
medical care in the states.
    I look forward to hearing from the witnesses for their 
advice and experience.
    Last, I want to report that one of the meetings we arranged 
for the directors to add value to their time in Washington has 
paid off. Some of you already knew this prior to coming here. 
But you met yesterday with staff from the Senate Finance 
Committee and the House Energy and Commerce Committee. We also 
arranged for you to meet with administration officials of CMS, 
the Centers for Medicare and Medicaid Services.
    You asked them at that meeting to allow for Obamacare 
Section 1323 money to be used in Fiscal Year 2020 before you 
use the Section 1108 annual block grant. I received word last 
night that CMS has decided to do what you asked. That will make 
more money available that otherwise would have been lost.
    So, if we are able to do nothing else, your trip here was 
rewarded. I would like to say that we will get something else 
done here. But I certainly do believe that your trip here and 
today's hearing will have positive results.

    [The prepared statement of Vice Chair Sablan follows:]
 Prepared Statement of the Hon. Gregorio Kilili Sablan, a Delegate in 
      Congress from the Territory of the Northern Mariana Islands
    Good morning. The Mariana Islands, which I represent, and the four 
other U.S. insular areas all face a ``Medicaid cliff'' at the end of 
this year. Supplemental funding for the Medicaid programs in our areas, 
included in the Patient Protection and Affordable Care Act--or 
Obamacare as we like to call it--expires this year.
    Loss of that funding puts healthcare delivery at risk--not just for 
Medicaid recipients in our islands, but for the population at large. 
Today's hearing is meant to shine a light on that imminent disaster.
    I want to thank the directors of each of the insular areas Medicaid 
programs for being here today as witnesses. Your programs are already 
short of cash, so the cost of coming to Washington was not taken 
lightly, but I think that we could have no better spokespeople to 
describe how truly dire the situation is. I hope we will be able to 
learn from you what the loss of Medicaid funds will mean to the people 
you serve--real people, who simply have no other means of getting basic 
health care.
    Also, invited to testify today is the Chief Executive Officer of 
the Marianas Health Care Corporation. Ms. Esther Muna runs the one and 
only hospital in the Marianas. That hospital depends on Medicaid for 
over one-quarter of its revenue.
    I hope Ms. Muna will be able to tell us what the loss of Medicaid 
funding will mean to the hospital's ability to deliver services, and 
how that will impact not only Medicaid patients, but all patients. I 
think Ms. Muna's description of how the hospital depends on Medicaid 
revenue will help us understand how Medicaid revenues will affect 
healthcare providers in private practice, as well.
    So, we are all working from a common set of facts, let me quickly 
review the situation. In the states and the District of Columbia, 
Medicaid is an entitlement program. To the extent there is a need for 
services and to the extent a state can provide local matching funds, 
Federal Medicaid funds are always available.
    In the five insular areas this is not the case. Up until 2011 we 
each received a block grant. That block grant, I am sorry to say, is 
unrelated to the need in each of our areas. It seems to have been set 
rather arbitrarily, decades ago. And the local match to access that 
block grant was set in law at 50-50. That is the same matching rate as 
the wealthiest states. While states as poor as the insular areas only 
match at a rate of 24-76.
    Obamacare provided some relief: an extra $7.3 billion in temporary 
Medicaid funding and a permanent change in the FMAP to 55-45. But the 
Obamacare money is no longer available after this year. And all the 
insular areas will revert to their block grants.
    For American Samoa, this means going from $20 million in Federal 
funding to $12 million. For Guam, from $56 million to $18 million. For 
the Marianas, from $25 million to $7 million. For the Virgin Islands 
from $70 million to $18 million. And for Puerto Rico, from $2.3 billion 
to just $360 million. You cannot suffer cuts like that and continue to 
deliver services.
    The path forward is unclear. Certainly, more money is needed and an 
equitable matching rate. But there is also the need for each of the 
insular areas to build capacity. Because ultimately the goal is not 
just to have the same funding as states. What we want is medical care 
for those who need it in the insular areas to be every bit as good as 
medical care in the states.
    I look forward to hearing from the witnesses for their advice and 
experience.

                                 ______
                                 

    Vice Chair Sablan. I now recognize my colleague, the 
gentlelady from the Puerto Rico, for an opening statement.

   STATEMENT OF THE HON. JENNIFFER GONZALEZ-COLON, RESIDENT 
        COMMISSIONER OF THE COMMONWEALTH OF PUERTO RICO

    Miss Gonzalez-Colon. Thank you, Vice Chairman.

    I really appreciate this hearing taking place. I want to 
thank you all for being here today to discuss one of the most 
important and critical issues currently affecting all the U.S. 
territories: the impending expiration of the additional 
Medicaid funds granted by the Affordable Care Act and the 
instability of our healthcare infrastructure.
    In 2017, 1.6 million Americans living in the territories 
were enrolled in Medicaid. That breaks down to 79 percent of 
the population of American Samoa, 21 percent of the population 
of Guam, 33 percent of the population of the Northern Mariana 
Islands, 47 percent of the population of Puerto Rico, and 16 
percent of the population of the U.S. Virgin Islands. The 
national average enrollment for the states and the District of 
Columbia was 21 percent.
    During the same year, the Medicaid program spent an average 
of $1,800 a year per territory enrollee. In contrast, the 
national average, excluding the territories, was more than 
$7,000 per enrollee.
    Medicaid in the territories is subject to a statutory 
Federal Matching Percentage, what we call ``FMAP.'' The FMAP 
for the states varies annually relative to each state's per 
capita income. The FMAP for the territories, however, is 
completely different. We are permanently capped by law to 55 
percent. If the formula used to determine the FMAP for the 
states were applied to Puerto Rico, the Federal Government's 
matching share would be increasing up to 83 percent, the 
program maximum.
    For the 50 states and the District of Columbia, Medicaid 
provides a guarantee of Federal matching payments with no pre-
set limit. And this is the main difference between the 
treatment to the territories and the rest of the states. 
However, annual Federal funding for Medicaid in the territories 
is subject to this statutory cap. Once a territory exhausts its 
capped Federal funds, it will no longer receive Federal 
financial support for its Medicaid program during that fiscal 
year.
    In 2011, the Affordable Care Act granted the territories an 
additional $8.25 billion in Federal funds for their Medicaid 
programs in lieu of establishing a health insurance 
marketplace. The additional funding for each territory ranged 
from $109.2 million for the Northern Marianas to $6.3 billion 
for Puerto Rico and was available to be drawn down between July 
2011 and September 2019.
    Since 2011, Federal Medicaid spending in Puerto Rico has 
exceeded the statutory cap by using the funds available under 
the Affordable Care Act. These funds were depleted in February 
of last year.
    During the last Congress, the 115th Congress, President 
Trump acted to avert this crisis in Puerto Rico's Medicaid 
program, with a temporary increase of the Federal cap to $296 
million for Fiscal Year 2018-2019 in the Consolidated 
Appropriations Act of 2017. Moreover, as a result of the state 
of emergency caused by Hurricanes Irma and Maria in 2017, we 
again increased the Federal cap to $4.8 billion, for the first 
time with 100 percent Federal cost share through Fiscal Year 
2019, to keep Puerto Rico's Medicaid program operational. All 
these additional sources of Federal funding for Puerto Rico's 
Medicaid program will expire in September of this year.
    For my island, the Medicaid cap set by statute for Fiscal 
Year 2020 will be approximately $375 million, with no 
additional source of Federal funding available. This means that 
Puerto Rico will exhaust its Federal Medicaid allotment in the 
first 3 months of Fiscal Year 2020 and will bear the expense in 
excess of 85 percent of the Federal program, placing additional 
pressure on sparse territory resources. And I know this is 
going to be happening in all territories as well.
    Each territory is affected by this inequitable treatment in 
healthcare funding in their own way. However, all of the 
Medicaid programs, as currently conceived, are unsustainable. 
This underfunding contributes to larger systemic problems, 
including lower provider reimbursement rates and provider 
shortages.
    To correct these challenges, I have introduced H.R. 2306, 
the Puerto Rico Medicaid Act, which seeks to strengthen the 
Medicaid program on the island by increasing the cap and 
removing the statutory FMAP limitation.
    I am also an original co-sponsor of H.R. 1354, the 
Territories Health Equity Act, legislation introduced by 
Congresswoman Plaskett of the Virgin Islands that attempts to 
fix this problem for all five territories.
    Both bills are currently under the jurisdiction of the 
Energy and Commerce Committee, and I will continue to work with 
my fellow delegates and the members of that committee to 
advocate for the advancement of those bills.
    I trust that today's testimonies will help my colleagues 
understand the urgent need for action. If we fail to act with 
the expediency that the situation requires, the provision of 
health care in all territories will be severely affected, with 
far-reaching repercussion for the rest of our Nation.
    Although I recognize that this is not the committee with 
jurisdiction, I would like to thank Vice Chairman Sablan and 
members of this Committee for this important hearing. Having 
the witnesses testify and be on the record on the impacts of 
the Medicaid cliff will undoubtedly help us as we continue 
working for a long-term solution on this issue.
    Thank you, Chairman.

    [The prepared statement of Ms. Gonzalez-Colon follows:]
   Prepared Statement of the Hon. Jenniffer Gonzalez-Colon, Resident 
            Commissioner of the Commonwealth of Puerto Rico
    Good morning, everyone. I thank you all for being here today to 
discuss one of the most critical issues currently affecting all of the 
U.S. territories: the impending expiration of the additional Medicaid 
funds granted by the Affordable Care Act and the accompanying 
instability of our healthcare infrastructure.
    In 2017, 1.6 million Americans living in the territories were 
enrolled in Medicaid. That breaks down to 79 percent of the population 
of American Samoa, 21 percent of the population of Guam, 33 percent of 
the population of the Northern Mariana Islands, 47 percent of the 
population of Puerto Rico, and 16 percent of the population of the U.S. 
Virgin Islands. The national average enrollment for the states and the 
District of Columbia was 21 percent.
    During that same year, the Medicaid program spent an average of 
$1,866 a year per territory enrollee. In contrast, the national average 
(excluding the territories) was $7,654 per year per enrollee.
    Medicaid in the territories is subject to a statutory Federal 
Matching Percentage (FMAP). The FMAP for the states varies annually 
relative to each state's per capita income. The FMAP for the 
territories, however, is permanently set by law at 55 percent. If the 
formula used to determine the FMAP for the states were applied to 
Puerto Rico, the Federal Government's matching share would increase to 
the 83 percent program maximum.
    For the 50 states and DC, Medicaid provides a guarantee of Federal 
matching payments with no pre-set limit. However, annual Federal 
funding for Medicaid in the territories is subject to a statutory cap. 
Once a territory exhausts its capped Federal funds, it no longer 
receives Federal financial support for its Medicaid program during that 
fiscal year.
    In 2011, the Affordable Care Act granted the territories an 
additional $8.25 billion in Federal funds for their Medicaid programs 
in lieu of establishing a health insurance marketplace. The additional 
funding for each territory ranged from $109.2 million for the Northern 
Mariana Islands to $6.325 billion for Puerto Rico and was available to 
be drawn down between July 2011 and September 2019.
    Since 2011, Federal Medicaid spending in Puerto Rico has exceeded 
the statutory cap by using the funds available under the Affordable 
Care Act. These funds were depleted by February 2018.
    Last Congress, we acted to avert a crisis in Puerto Rico's Medicaid 
Program with a temporary increase in the Federal cap of $296 million 
for FY 2018-2019 in the Consolidated Appropriations Act of 2017. 
Moreover, as a result of the state of emergency caused by Hurricanes 
Irma and Maria in 2017, we again increased the Federal cap to $4.8 
billion with 100 percent FMAP through FY 2019r to keep Puerto Rico's 
Medicaid program operational. All these additional sources of Federal 
funding for Puerto Rico's Medicaid program will expire by September 30, 
2019.
    For Puerto Rico, the Medicaid cap set by statute for FY 2020 will 
be approximately $375 million, with no additional source of Federal 
funding available. This means that Puerto Rico will exhaust its Federal 
Medicaid allotment in the first 3 months of FY 2020, and will bear the 
expense in excess of 85 percent of the Federal program, placing 
additional pressure on sparse territory resources.
    Each territory is affected by this inequitable treatment in 
healthcare funding in their own way. However, all of our Medicaid 
programs--as currently conceived--are unsustainable. This underfunding 
contributes to larger systemic problems, including lower provider 
reimbursement rates and provider shortages.
    To correct these challenges, I have introduced H.R. 2306, the 
Puerto Rico Medicaid Act, which seeks to strengthen the Medicaid 
program on the Island by increasing the cap and removing the statutory 
FMAP limitation. I am also an original co-sponsor of H.R. 1354, the 
Territories Health Equity Act, legislation introduced by Congresswoman 
Plaskett of the Virgin Islands that addresses this fix for all five 
U.S. territories. Both bills are currently under the jurisdiction of 
the Energy & Commerce Committee. I will continue to work with my fellow 
delegates and the members of that committee to advocate for the 
advancement of these bills.
    I trust that today's testimonies will help my colleagues understand 
the urgent need for action. If we fail to act with the expediency that 
the situation requires, the provision of health care in all the 
territories will be severely affected, with far-reaching repercussion 
for the rest of our Nation.
    Although I recognize that this is not the committee of 
jurisdiction, I would like to thank Vice Chairman Sablan and members of 
this Committee for this important hearing. Having the witnesses testify 
and be on the record on the impacts of the Medicaid Cliff will 
undoubtedly help us as we continue working on a long-term solution for 
this issue.
    Thank you.

                                 ______
                                 

    Vice Chair Sablan. I thank the gentlelady for her opening 
statement.
    I now recognize the Chairman of the Full Committee, 
Chairman Grijalva.

    Mr. Grijalva. Thank you very much. No opening statement, 
Mr. Chairman. Just to thank you for organizing a meeting. I 
think it is an excellent panel, and I am here to learn 
something on which direction legislatively we are going to go 
in terms of dealing with this issue.
    So, thank you very much, Mr. Chairman. I appreciate it.
    I was just commenting to Mr. Lowenthal here that when you 
are Chairman of a Full Committee, Mr. Sablan, you are always a 
little conscious, whether people say it or not, of a possible 
coup, where your power is removed and you are thrown off the 
chair. And having said that, Mr. Sablan, of all the people, Mr. 
Sablan, I just can't believe it, you know?
    With that, I yield back.
    Vice Chair Sablan. Thank you. I am going to have to analyze 
those comments, but I think he meant well.
    And I would now like to introduce our witnesses.
    Ms. Esther Lizama Muna, who is the Chief Executive Officer 
of the Commonwealth of the Northern Mariana Islands Healthcare 
Corporation. Ms. Muna, again, runs our only hospital in the 
Marianas, whose revenue is about one-quarter, if not more, of 
the--comes from Medicaid patients.
    Ms. Helen Castro Sablan, who is the Director of the 
Commonwealth of the Northern Mariana Islands State Medicaid 
Agency.
    Welcome to the two of you.
    I am going to go ahead and also acknowledge Ms. Theresa 
Arcangel, who is the Chief Administrator of the Guam Division 
of Public Welfare, which runs the Medicaid program.
    And I would like to ask Mrs. Radewagen to introduce her 
witness.
    Mrs. Radewagen. Thank you, Mr. Chairman.
    Our Medicaid Director and CEO is Chief Tofoitaufa Sandra 
King Young. She came into the position of CEO and Director of 
Medicaid, and she has been there for most of the time that the 
ACA funds have been there. She has been working very hard on 
it, and I want to welcome her and her delegation to town.
    Vice Chair Sablan. Thank you.
    I will now recognize the Ranking Member for introduction of 
her witness.
    Miss Gonzalez-Colon. Thank you, Mr. Sablan.
    I would love to introduce Ms. Angie Avila. She is Executive 
Director of the Puerto Rico State Health Insurance 
Administration.
    Actually, we held a panel yesterday, and she is the one 
providing the data related to our healthcare system in 
coordination with the Secretary of Health in Puerto Rico, Mr. 
Rodriguez.
    Vice Chair Sablan. All right.
    And I recognize Ms. Plaskett to introduce the witness from 
the U.S. Virgin Islands.
    Ms. Plaskett. Thank you, Mr. Chairman. It is an honor and a 
pleasure to be here under your leadership.
    Mr. Grijalva, I would have you note that I called the 
leadership of this subcommittee for Mr. Sablan, so please be 
careful.
    This is a really important issue, and I am really grateful 
to have Ms. Michael Rhymer-Browne, who is the Assistant 
Commissioner of the U.S. Virgin Islands Department of Human 
Services, which does tremendous work and is managing this issue 
as well.
    I do note that the governor has his chief of staff here, as 
well as other members of the administration, because we 
recognize, and our governor, Governor Albert Bryan, recognizes 
what a tremendously important issue and the need for this 
funding is to the people of the Virgin Islands.
    Thank you.
    Vice Chair Sablan. Thank you, everyone.
    And, again, witnesses are welcome.
    Under Committee Rules, oral statements are limited to 5 
minutes, but your entire statement will appear in the hearing 
record. The light in front of you will turn yellow when there 
is 1 minute left and then red when your time is expired.
    I like to keep a time frame. We may, if necessary, do two 
rounds of questioning. But, at the moment, we will start with 
Ms. Esther Muna, please.

     STATEMENT OF ESTHER L. MUNA, CHIEF EXECUTIVE OFFICER, 
    COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS HEALTHCARE 
                          CORPORATION

    Ms. Muna. Chairman Grijalva, Ranking Member Bishop, Vice 
Chairman Sablan, and distinguished Committee members, thank you 
for the opportunity to appear before you today.
    As Chief Executive Officer, I oversee the work of the 
Commonwealth Healthcare Corporation, known as CHCC. CHCC is 
responsible for CNMI's sole hospital, dialysis services, mental 
health or public health services, and several outpatient 
clinics on Saipan, Tinian, and Rota.
    As one born and raised on Saipan, I relied on our 
healthcare services long before I became responsible for them. 
I have seen how being in a remote location poses a host of 
challenges for our population.
    For example, in the 1990s, a baby with a congenital heart 
disease had to take a total of 8 hours in flight time to 
receive care, costing $1 million accumulated in a year.
    Several residents that are my neighbors, my relatives, and 
my friends are unable to return home to the CNMI because we do 
not have an oncologist on-island to manage their complex cancer 
treatment.
    A gentleman with a neurological injury waited for days 
before being transported off-island because the cheapest and 
safest way for him to receive treatment for his injury was at a 
hospital in the Philippines and, like many U.S. citizens, did 
not own a U.S. passport. Patients with complex medical issues 
like this gentleman are often flown to Guam, Hawaii, the 
Philippines, and Taiwan in order to receive care.
    In addition to these challenges of access to care, 
delivering health services in a remote island is more costly, 
with the high cost of shipping, and we are competing with U.S. 
hospitals for the same work force. Fifteen years ago, with only 
the capped and inadequate Medicaid funding and the CNMI 
undergoing a major economic crisis due to several global and 
U.S. Federal policy shifts, the hospital struggled to stock 
medical supplies and recruit healthcare workers.
    The 2007 CMS survey revealed many problems. With no funding 
improvements, paydays were missed, and doctors and nurses left 
the island. In September 2012, CMS issued a termination notice 
to our hospital. It was clear that without adequate funding the 
CHCC could not sustain lifesaving services, much less the 
healthcare needs of our residents.
    The $100 million available to the CNMI through supplemental 
Medicaid funding in 2011 gave us the chance to deliver a little 
more than basic healthcare services that our people deserve. 
Prior to 2011, we were receiving the leftover crumbs of the 
capped funding since the insufficient Medicaid funding was 
desperately needed and was utilized to save the lives that were 
going off-island.
    With the supplemental Medicaid funding, the CHCC accepted a 
payment methodology that allowed the hospital to be paid at 55 
cents of its $1 cost because the CNMI government's declining 
economy could not afford to make the match of the 45 cents. It 
wasn't the most ideal funding; however, if it were not for that 
boost in Medicaid funding that supplemented that statutory cap, 
we may have lost our hospital, and I wouldn't be here before 
you today.
    Thanks to the steady Medicaid reimbursements, my team has 
brought the hospital operations to the highest level that it 
has ever been. With increased revenue, we have implemented an 
electronic health record system, a quality assurance unit, 
outpatient pharmacy, telemedicine services, and added specialty 
services such as podiatry, ENT, orthopedic surgery, and, as of 
this month, oncology.
    We have tripled our medical staff, with clinic visits 
nearly doubling since 2013. We have cut our readmission rate in 
half, far below the national average. We did this by maximizing 
efficiency and innovation to maintain U.S. hospital standards 
in our remote rural environment.
    During two of the worst storms in U.S. history, we ensured 
uninterrupted patient services while bringing medical attention 
directly to the villages that were hit hard by the storms.
    The reliable monthly reimbursements from Medicaid protected 
CHCC's cash-flow and enabled our staff to do their jobs. We 
took full advantage of the opportunity presented to us in 2011 
to stabilize our healthcare system.
    So, on the heels of Typhoons Yutu and Mangkhut, we face 
another crisis. Our Medicaid program is unable to sustain the 
needs of our healthcare system. Earlier this year, the program 
exhausted the Federal funds made available in 2011. A return to 
the low statutory cap on Federal contributions and the low 
fixed Federal share endangers the very existence of our 
healthcare system, threatens to further erode our economy, and 
puts at risk the health and well-being of our people.
    Help us maintain our progress and avoid a return to those 
dark days. Stabilize our Medicaid funding, and provide equity 
to the U.S. citizens in the CNMI.
    Thank you.

    [The prepared statement of Ms. Muna follows:]
    Prepared Statement of Esther L. Muna, Chief Executive Officer, 
                  Commonwealth Healthcare Corporation,
              Commonwealth of the Northern Mariana Islands
    Chairman Grijalva, Vice Chairman Sablan, and distinguished 
Committee members, thank you for the opportunity to appear before you 
today to discuss an issue of significant importance to the Commonwealth 
of the Northern Mariana Islands (CNMI). On the heels of Super Typhoon 
Yutu, which devastated the CNMI economy and its people, we face another 
crisis--our Medicaid program is unable to sustain its operations with 
the low statutory cap on Federal contributions.\1\ Low Federal 
contributions, coupled with the exhaustion of PPACA funds this year, 
creates a fiscal cliff for our Medicaid program. This fiscal cliff 
threatens to unweave our substantial improvements over the past 10 
years in the delivery of health care, further erode our economy, and 
threaten the health and well-being of our people.
---------------------------------------------------------------------------
    \1\ Section 1108 of the Social Security Act.

                        cnmi medicaid financing
    The framework for Medicaid financing in the CNMI resembles that of 
the fifty states: the cost of the program (up to a point) is shared 
between the Federal Government and the Territory and the Federal 
Government pays a fixed percentage of CNMI Medicaid costs. For CNMI, 
that fixed percentage is 55 percent. However, unlike the 50 states, the 
Federal Government pays a fixed percentage of the CNMI Medicaid costs 
within a fixed amount of Federal funding. Should CNMI Medicaid 
expenditures exceed the territory's Federal Medicaid cap, the CNMI 
becomes responsible for 100 percent of Medicaid costs going forward.
    Moreover, the CNMI receive a relatively low fixed percentage, which 
is known as the Federal Medical Assistance Percentage or 
FMAP.1
    The FMAP rate for the CNMI is, and has been, lower than most of the 
50 states. The formula by which FMAP is calculated for the 50 states is 
based on the average per capita income for each state relative to the 
national average. Thus, the poorer the state, the higher the FMAP is 
for that jurisdiction in a given year. However, due to statutory 
restrictions on Medicaid financing for the CNMI, the FMAP we receive is 
not based on per capita income of residents; subsequently, the 
territories' FMAP does not reflect the financial need of the CNMI in 
the same way as the states' financial need is reflected, and the FMAP 
rate for our territory remains largely stagnant.
    Thus, the CNMI is at a disadvantage in their Medicaid financings in 
two ways: (1) a low FMAP requires a territory to contribute more local 
funds than a state is required to provide in order to run a Medicaid 
program; and (2) a cap on Federal Medicaid contributions stifles the 
overall ability of CNMI Medicaid to function.

                            cnmi background
    In 1975, voters of the Northern Mariana Islands chose to enter into 
a covenant that established the political union between the Northern 
Mariana Islands and the United States. The Covenant recognizes U.S. 
sovereignty but limits, in some respects, applicability of Federal law. 
The Covenant established that the, ``United States will assist the 
Government of the Northern Marianas to achieve a progressively higher 
standard of living for its people as part of the American economic 
community and to develop the economic resources needed to meet the 
financial responsibilities of local self-government.'' \2\
---------------------------------------------------------------------------
    \2\ 48 U.S.C. Sec. 1801 Article VII Section 701.
---------------------------------------------------------------------------
    From 2004 to 2007, the CNMI lost one-third of its economy.\3\ This 
economic downfall was due largely to several concomitant U.S. Federal 
and global policy shifts, including the lifting of quotas on garment 
exports to the United States,\4\ the imposition of the Federal minimum 
wage,\5\ and implementation of Federal immigration authority in the 
territory.\6\ Figure 1 demonstrates the severity of this economic 
spiral.
---------------------------------------------------------------------------
    \3\ ``Economic Impact of Federal Laws on The Commonwealth of The 
Northern Mariana Islands.'' October 2008. Malcolm D. McPhee & 
Associates and Dick Conway. https://marianaslabor.net/news/
economic_impact.pdf.
    \4\ The 1994 Uruguay Round Agreement on Textiles and Clothing 
called for the World Trade Organization (WTO) members to eliminate 
quotas on textiles and clothing by January 2005. This meant the CNMI 
garment industry could no longer compete with cheap labor in countries 
such as China, Bangladesh, and the Philippines. (Source: Northern 
Mariana Islands Business Law Handbook: Strategic Information and Laws. 
International Business Publications, 2013.)
    \5\ On May 25, 2007, Congress enacted Public Law 110-28, increasing 
the minimum wage in the CNMI by fifty cents per hour. The act further 
increased the CNMI minimum wage by fifty cents per year until parity 
with the U.S. minimum wage was reached.
    \6\ On May 8, 2008, the president signed P.L. 110-229 applying the 
U.S. immigration law to the CNMI.

            Figure 1--CNMI Gross Domestic Product 2002-2009
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

 Source: Bureau of Economic Analysis, U.S. Department of Commerce, 
                       Released October 17, 2018

    the inception of the commonwealth healthcare corporation (chcc)
    In 1978, the CNMI Department of Public Health was formed under the 
executive branch of government. Over the next 30 years it came to 
operate the sole territory hospital and emergency department, several 
outpatient clinics, a dialysis unit, ancillary services, behavioral 
health services, and all public health functions. In 2007, in the thick 
of the CNMI's economic collapse, the Department of Public Health began 
experiencing financial shortfalls due to reduced government revenues, 
and struggled to stock adequate medical supplies, and recruit 
healthcare workers. At the CMS Region IX visit in 2007, surveyors 
identified many problems with the delivery of health care at the 
hospital, and cited several cases where harm and injury to patients was 
found to be imminent if immediate corrective actions were not 
implemented.

    In FY 2009, the CNMI government appropriated roughly $31 million of 
local government resources (about 20 percent of the total budgetary 
resources identified for appropriation that year) to the CNMI 
Department of Public Health. In January 2009, to conserve stagnant 
public funding improve efficiency, the CNMI government reformed its 
Department of Public Health into an autonomous government corporation, 
the Commonwealth Healthcare Corporation (CHCC).\7\ The CHCC took over 
operations of the sole hospital, primary care services, dialysis 
services, disease surveillance, substance abuse, mental health, and all 
public health services. In 2010, in the face of dwindling revenues, the 
CNMI government slashed the budget for public health and healthcare 
service delivery. Only $5 million was appropriated to the newly 
established CHCC, and even this was not made available all at once.\8\ 
For an operation that normally received a local government 
appropriation of $30-$40 million annually, with only $5 million for the 
newly established CHCC, it became known as the ``baby born with no 
blanket.'' Figure 2 below demonstrates the series of events which have 
significantly impacted the delivery of health care in the CNMI.
---------------------------------------------------------------------------
    \7\ CNMI Public Law 16-51.
    \8\ Special to the Saipan Tribune by former CHCC CEO Juan Nekai 
Babauta. August 7, 2018. https://www.saipantribune.com/index.php/the-
struggles-of-chcc/.

Figure 2--Factors Affecting the CNMI Public Healthcare System 2005-2019
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Several more visits were made by CMS surveyors, and it was 
clear that due to inadequate funding, the CHCC, was not meeting medical 
care standards, and was not meeting the needs of CNMI residents.

    In July 2011, the Federal Government awarded a total of $7.3 
billion in additional funds available across all five territory 
Medicaid programs under the Patient Protection and Affordable Care Act 
(PPACA), including an additional $100.1 million for the CNMI \9\ from 
July 2011-September 2019. This meant the CNMI Medicaid program could 
receive an average of $11 million of Federal funds beyond its statutory 
cap every year until the funds were scheduled to expire in September 
2019. With the statutory Federal cap for the CNMI Medicaid program 
typically around $6 to $7 million each year, these additional funds 
created an unprecedented opportunity to make improvements to delivery 
of healthcare services in the CNMI. This extra funding opportunity 
meant that the CHCC could rely on receiving reimbursement for seeing a 
higher volume of patients, and could expand services sustainably with 
improved financing streams through Medicaid. However, the local 
government still needed to come up with a local match of roughly $10 
million each year to take full advantage of this opportunity and turn 
around the CNMI's failing system. In FY 2012, on the heels of deep 
economic recession, roughly $2.7 million was appropriated from local 
funds to cover the expenses of the CNMI Medicaid program, which meant 
the CNMI Medicaid Agency didn't have enough local funds to draw down 
the Federal contribution in full. This meant the Medicaid Agency was 
not able to fulfill its obligations to the CHCC and to private medical 
providers, so payments to private providers were prioritized.
---------------------------------------------------------------------------
    \9\ Section 2005 of the Patient Protection and Affordable Care Act.

    CHCC and the CNMI Medicaid program proposed a Certified Public 
Expenditure reimbursement methodology to CMS, otherwise known as CPE. 
The CPE methodology meant that the CHCC's expenditures, as a public 
entity, would contribute to the local government's match. This meant 
that although the CHCC would not receive a 100 percent reimbursement on 
claims submitted to Medicaid, it would at least receive the Federal 
share of the reimbursement at 55 percent. The CPE methodology is a 
statutorily recognized Medicaid financing approach by which a 
governmental entity, including a governmental provider (e.g., public 
hospital), incurs an expenditure eligible for Federal Financial 
Participation (FFP) under the state's approved Medicaid state plan. The 
governmental entity (CHCC) certifies that the funds expended are public 
funds used to support the full cost of providing the Medicaid-covered 
service. The CPE methodology was approved by CMS in 2012; the Federal 
match that the CPE permitted improved financial stressors at CHCC 
---------------------------------------------------------------------------
almost immediately.

    However, the same month this new funding methodology was 
implemented, in September 2012, CMS issued a notice of termination to 
the CHCC for not meeting the standards of care required as conditions 
of participation in the Medicare. This meant the CHCC was at serious 
risk of losing all Medicaid and Medicare funding.

    The 2012 notice of termination prompted the Department of the 
Interior and the U.S. Department of Health & Human Services to deploy 
several U.S.P.H.S. Commissioned Corps Personnel with expertise in 
internal medicine, pharmacy, pediatric medicine, laboratory services 
and nursing to assist the hospital in complying with the standards of 
care.

    The Federal reimbursement opportunities available due to the newly 
established CPE methodology coupled with support received from HHS in 
response to the CHCC's notice of termination from CMS, enabled the CHCC 
to make the corrections necessary to meet the standards of care 
required as conditions of participation by CMS regulations. A 2014 CMS 
survey found numerous improvements; and another survey which took place 
just a few months ago demonstrated maintenance of these corrections and 
even further advancement.
                         exceeding expectations

    In 2008, the CNMI Department of Public Health generated roughly $15 
million in revenue.\10\ In 2018, the CHCC generated nearly four times 
that amount at $56 million. Since 2011, we've implemented an electronic 
health records system, a quality assurance unit, an outpatient 
pharmacy, sustainable telemedicine services, have tripled our medical 
staff, added specialty services such as podiatry, ENT, orthopedic 
surgery, and, as of this month, oncology. We have maintained the only 
CLIA-certified laboratory in the territory, and renovated our inpatient 
pharmacy to be compliant with new compounding standards more than a 
year ahead of schedule.\11\ Clinic visits have nearly doubled since 
2013, and earlier this year, clinic hours were expanded to accommodate 
a greater volume of patients. We have improved patient care outcomes 
and significantly reduced hospital readmission rates by developing a 
discharge planning process which includes the unpaid caregivers of 
patients (See Figure 3). During this same period, we weathered two of 
the worst storms in U.S. history,\12\ avoiding any interruption to our 
inpatient and emergency departments, and getting other services such as 
dialysis, primary care up and running within 48 hours of each storm. 
Beyond maintaining services through these disasters, the CHCC was also 
able to provide medical outreach, disease surveillance of local 
shelters, and conduct post-disaster rapid community health assessments. 
Providing these services was possible because of the reliable monthly 
reimbursements from Medicaid which protected the CHCC's cashflow.
---------------------------------------------------------------------------
    \10\ ``Finance: Public Health Generates only $15M Annually.'' 
August 13, 2008. Marianas Variety. http://www.mvariety.com/cnmi/cnmi-
news/local/9257-finance-public-health-generates-only-15m-annually-.
    \11\ USP 797 and USP 800 are updated standards for the compounding 
intravenous drugs. The deadline to meet these standards.
    \12\ Typhoon Soudelor in August 2015 was a Category 4 typhoon, 
while typhoon Yutu in October 2018 was classified as a Category 5 super 
typhoon.

                 Figure 3--CHCC Readmission Improvement
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

     *Data is only available for October through December 2013

    Source: CHCC Corporate Quality and Performance Management (CQPM)

                      dependence on medicaid funds

    In FY 2018, Medicaid reimbursements made up almost one-half (49 
percent) of all third-party payer reimbursements to the CHCC and about 
30 percent of CHCC's total revenues (about $17.3 million). This high 
proportion exists even though the CHCC only receives a 55 percent 
reimbursement \13\ from Medicaid, and is not eligible for supplemental 
Medicaid payments, such as Disproportionate Share Hospital (DSH) 
payments or Critical Access Hospital designation on the remote islands 
because of its location in a U.S. territory.\14\ Furthermore, because 
the CHCC is located in a U.S. territory, the CHCC's hospital is not 
eligible for other programs designed to assist rural hospitals serving 
low-income populations, such as the Medicare EHR incentive program, and 
the 340B drug discount program.\15\ As the sole hospital service 
provider, the CHCC provides 100 percent of on-island inpatient and 
emergency care to CNMI Medicaid beneficiaries, and provides far more 
outpatient visits to Medicaid beneficiaries than any other provider in 
the CNMI.
---------------------------------------------------------------------------
    \13\ CHCC services, including outpatient pharmacy, dental clinic, 
Tinian Health Center, and Rota Health Center are billed outside of the 
CPE methodology and reimbursed at the regular Medicaid Assistance 
Program. The 55 percent reimbursement represents the Federal share of 
the CNMI Medicaid program funding.
    \14\ Section 1886(d) of the Social Security defines eligible 
hospitals as being located in one of the 50 states or District of 
Columbia.
    \15\ Although several public health programs in the CNMI are able 
to use the 340B drug discount program tied to their grant funding, the 
CNMI hospital and its outpatient clinics are not eligible because of 
the territories' exclusion from Section 1886 of the Social Security 
Act. In April 2019, Governor Torres requested assistance from Secretary 
Alex Azar to consider including rural health systems of the territories 
in designations such as sole community hospital and disproportionate 
share hospital. This request letter is attached to this testimony.

    Therefore, the operation of the CHCC is highly dependent on 
Medicaid's ability to pay for services, especially given that 28 
percent of the CNMI population relies on Medicaid \16\ to access 
healthcare services, approximately 34 percent of the total population 
were uninsured in 2010,\17\ and an estimated 46 percent of CNMI adults 
didn't have any form of health insurance coverage in 2016.\18\
---------------------------------------------------------------------------
    \16\ CNMI Medicaid Program Enrollment Data 2018.
    \17\ 2010 Census.
    \18\ 2016 CNMI Non-Communicable Disease and Risk Factor Hybrid 
Survey.

    Fifty-two percent of CNMI residents, it must be noted, live on 
incomes at or below the Federal Poverty Level,\19\ and the median 
household income for CNMI families was less than half of the U.S. 
Nationwide median household income in 2010. Despite the high poverty 
rate, many CNMI residents don't qualify for Medicaid coverage because 
they do not hold the necessary permanent resident status to be 
eligible.12
---------------------------------------------------------------------------
    \19\ 2010 Census.

    Employer-sponsored insurance is not a requirement for any class of 
employee in the CNMI, and individual health insurance plans are not 
available from private insurance companies operating in the CNMI.\20\
---------------------------------------------------------------------------
    \20\ The majority of the Patient Protection and Affordable Care Act 
health insurance market reforms and health insurance mandates do not 
apply to the CNMI as a U.S. territory.
---------------------------------------------------------------------------
           impact of additional aca funding on cmni and chcc

    We are deeply grateful that Congress took the steps to provide 
additional resources to the CMNI Medicaid program through the ACA. This 
funding has been critical to expand services on the island such as 
enabled to expanding services, establish new ones such as ENT, 
podiatry, orthopedic surgery, and oncology, reducing patient 
readmissions, and increasing access to primary care. Outpatient visits 
at the CHCC's Saipan clinics have steadily increased by more than 50 
percent in just 3 years from 2013 to 2017 (See Figure 5). Earlier this 
year, the adult clinic hours needed to be expanded to evenings and 
Saturdays to accommodate the growing patient demand. In 2018 alone, the 
adult clinic added psychiatry, podiatry and otolaryngologist services, 
further improving access to on-island care, but also increasing the 
number of patient visits.

    The additional ACA funding for the territories expires at the end 
of September 2019. If no action is taken by U.S. Congress to cushion 
the free fall from the Medicaid fiscal cliff for the CNMI, the CHCC 
would not be able to continue to sustain the range of services from 
inpatient care, primary care, dialysis, behavioral health services, 
laboratory, pharmacy, and many public health services that it makes 
available to all CNMI residents today. This would impact all health 
services as personnel at the CHCC may need to be drastically cut, 
leaving residents to either forego the care they need, or seek care 
off-island, possibly becoming Medicaid beneficiaries of other states or 
territories such as Guam. For most island residents, off-island care is 
not a viable option due to the cost of travel and services.

    Figure 4 demonstrates how thoroughly the CNMI has utilized Section 
2005 Patient Protection and Affordable Care Act (PPACA) funds. A return 
to the Federal statutory cap would not cover even half of what is 
needed to deliver the healthcare services needed by our population.

   Figure 4--CMS Payments to CHCC Compared with Section 1108 Cap on 
               Federal Funds to the CNMI Medicaid Program
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Section 1108 Federal Ceiling Amounts taken from ``Medicaid and CHIP 
   in the Commonwealth of the Northern Mariana Islands'' March 2019 
   document published by MACPAC found here https://wwwmacpac.gov/wp-
 content/uploads/2019/03/Medicaid-and-CHIP-in-the-Commonwealth-of-the-
Northern-Mariana-Islands.pdf. Data on payment to CHCC from CMS is from 
                        CHCC Financial Records.

    Earlier this month, our Medicaid program announced that it had 
exhausted all Federal and local funds for the program amid deep CNMI 
government budget cuts.\21\ As a result, the CNMI Medicaid program has 
chosen to divert Medicaid beneficiaries to the CHCC for all outpatient 
care in order to maximize the savings for the local government through 
the CPE methodology. This means that the maximum amount of Medicaid 
funding will be channeled to the CHCC, the only public healthcare 
services and safety net provider. Although this will help the CHCC to 
maintain its operations, as Figure 4 demonstrates, even this strategy 
will not keep the CHCC operating at the level it is today, much less 
keep moving us forward.
---------------------------------------------------------------------------
    \21\ ``Starting June 1, NMI Medicaid will no longer reimburse 
private health providers'' May 16, 2019. Lori Lyn C. Lirio. http://
www.mvariety.com/cnmi/cnmi-news/local/112741-starting-june-1-nmi-
medicaid-will-no-longer-reimburse-private-health-providers.

     Figure 5--Outpatient Clinic Visits at CHCC Facility on Saipan
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Source: CHCC Resource and Patient Management System (RPMS).

    Super Typhoon Yutu, which tore through the CNMI in October 2018, 
brought the CNMI's tourism industry to a stand-still for several 
months, and devastated many local businesses and residents. Two deaths 
were attributed to typhoon Yutu, and although fortunately there were no 
major disease outbreaks, many residents found it difficult to maintain 
their regimens for chronic disease care during the recovery months 
after the disaster. The CNMI government is in no position to make up 
the significant financing shortfall caused by the depletion of Section 
2005 funds. U.S. Congress must act to increase or eliminate the CNMI's 
Section 1108 cap on Federal contributions.
    Without continued additional Federal support of the CNMI Medicaid 
program, services will be eliminated, and doctors and nurses will once 
again leave the island thereby threatening our CMS accreditation. In 
order to remain compliant with CMS, ensuring patient safety and quality 
services while maintaining the ongoing operations of the sole hospital 
service on the island, we would need to make the hard decision to 
prioritize urgent care needs at the expense of preventive and primary 
care services.

    Although the CHCC offers a sliding fee discount for patients who 
live on low incomes and don't have health insurance, this program is 
unfunded, and is primarily a means to reduce barriers to care. The CHCC 
provided roughly $18 million uncompensated care to uninsured patients 
in the FY 2018, and about $4 million in charity care under the sliding 
fee discount program. If the CNMI Medicaid program is unable to pay for 
services for the Medicaid beneficiaries, then, the CHCC, as the safety-
net provider, will bear an even larger burden of uncompensated and 
charity care, making operations even more difficult to sustain. This 
will affect any resident of CNMI who requires any form of healthcare 
services, not only Medicaid beneficiaries. An investment in the CNMI 
Medicaid program is an investment in the CNMI economy.
                            looking forward
    The CHCC has many plans for further improvements to our healthcare 
system, but without greater certainty that Medicaid will be able to 
reimburse for services, these plans may need to be put on hold. Our 
plans for future enhancements include:

     Expanding telemedicine services, including, but not 
            limited to, telepharmacy and teledentistry on the smaller 
            islands of Tinian and Rota.

     Improving care efficiency by adopting the Patient-Centered 
            Medical Home models at our outpatient clinics.

     Transforming our clinics on the islands of Tinian and Rota 
            into Federally-Qualified Health Centers (FQHCs).

     Constructing a new 40,000+ sq. ft. outpatient facility to 
            accommodate a greater range of services and higher patient 
            capacity, including an outpatient chemotherapy center, and 
            Skilled Nursing Facility.

     Expanding the sole hospital, which was built in 1986 to 
            accommodate a population of fewer than 20,000 people. 
            Today, the CNMI population is nearly three times this size, 
            but the hospital has undergone very little renovation. 
            These plans include expanding the emergency and radiology 
            departments to more than double their current size, and 
            expanding other units of the hospital such as the operating 
            room, laboratory, labor and delivery ward, and intensive 
            care units.

     Investing in photo-voltaic energy generation to improve 
            self-sufficiency and mitigate interruption to hospital 
            services by storm damage to the CNMI's electricity 
            infrastructure.

     Building the first ever comprehensive cancer center in the 
            CNMI.

     Investing in local students who pursue medicine, nursing, 
            pharmacy, and behavioral and public health to build a 
            strong and diverse healthcare work force. We are committed 
            to bringing health workers back home, but we need a 
            financially stable health system to do that.

     Bringing value-based services using population health 
            models and eliminate fee for service models that are paid 
            by volume.

     Working with Medicaid to identify cost-saving 
            opportunities to control costs in the program.

     Offering sustainable and innovative healthcare services in 
            the CNMI.

                                 ______
                                 

    Questions Submitted for the Record to Ms. Esther L. Muna, Chief 
    Executive Officer, Commonwealth of the Northern Mariana Islands 
                         Healthcare Corporation
                   Questions Submitted by Rep. Sablan
    Question 1. If Congress finally treats the territories equitably 
and provides uncapped funding with Federal match determined in the same 
was as states, what would the Commonwealth of the Northern Mariana 
Islands do to ensure that Medicaid beneficiaries have access to 
comprehensive services comparable to what states must provide?

    Answer. With reliable, full reimbursement, the Commonwealth 
Healthcare Corporation (CHCC) could expand the availability of services 
on island even further than it has since the ACA funding became 
available in 2011. Currently, the CHCC only receives a 55 percent 
reimbursement for services rendered to Medicaid beneficiaries. While 
this reimbursement has been regular, reliable, and essential for the 
cashflow of the CHCC, full and dependable reimbursement from CNMI 
Medicaid would enable to CHCC to pursue new healthcare services. Most 
of the CHCC's insured patients are covered by Medicaid, so Medicaid 
reimbursement is essential to assure sustainability of any new service. 
The assurance of Medicaid reimbursement for new and expanded lines of 
healthcare services means that these services would also be available 
to patients who are uninsured or insured through other third parties.
    With the security of equitable Medicaid funding, the CNMI 
healthcare system could make available a more robust suite of 
healthcare services on our islands for Medicaid beneficiaries. This 
would serve the additional benefit to our community as an investment in 
our economy and healthcare workforce.

    1a. With the additional Federal funding, what specific investments 
could you make to improve eligibility and benefits over time?

    Answer. Because this question refers to Medicaid eligibility and 
benefits, please refer to the CNMI Medicaid Agency's response for the 
answer to this question.

    Question 2. What improvements in your healthcare infrastructure 
would be needed?

    Answer. The Commonwealth Healthcare Corporation (CHCC) has many 
plans for further improvements to our healthcare system, but without 
greater certainty that Medicaid will be able to reimburse for services, 
these plans may need to be put on hold. Our plans for future 
enhancements include:

     Expanding telemedicine services, including, but not 
            limited to, telepharmacy and teledentistry on the smaller 
            islands of Tinian and Rota.

     Improving care efficiency by adopting the Patient-Centered 
            Medical Home models at our outpatient clinics.

     Transforming our clinics on the islands of Tinian and Rota 
            into Federally-Qualified Health Centers (FQHCs).

     Constructing a new 40,000+ sq. ft. outpatient facility to 
            accommodate a greater range of services and higher patient 
            capacity, including an outpatient chemotherapy center, and 
            Skilled Nursing Facility.

     Expanding the sole hospital, which was built in 1986 to 
            accommodate a population of fewer than 20,000 people. 
            Today, the CNMI population is nearly three times this size, 
            but the hospital has undergone very little renovation. 
            These plans include expanding the emergency and radiology 
            departments to more than double their current size, and 
            expanding other units of the hospital such as the operating 
            room, laboratory, labor and delivery ward, and intensive 
            care units.

     Investing in photo-voltaic energy generation to improve 
            self-sufficiency and mitigate interruption to hospital 
            services by storm damage to the CNMI's electricity 
            infrastructure.

     Building the first ever comprehensive cancer center in the 
            CNMI.

     Investing in local students who pursue medicine, nursing, 
            pharmacy, and behavioral and public health to build a 
            strong and diverse healthcare workforce. We are committed 
            to bringing health workers back home, but we need a 
            financially stable health system to do that.

     Bringing value-based services using population health 
            models and eliminate fee for service models that are paid 
            by volume.

     Working with Medicaid to identify cost-saving 
            opportunities to control costs in the program.

     Offering sustainable and innovative healthcare services in 
            the CNMI.

     Technical assistance to implement systems for utilization 
            review. For example assessing use of brand name vs. generic 
            pharmaceuticals for Medicaid beneficiaries.
    2a. Would dedicated up-front funding be needed to make those 
changes?

    Answer. MMIS and Utilization review technical assistance and 
systems. As this speaks to Medicaid program infrastructure, please 
refer to the CNMI Medicaid Agency's response for the answer to this 
question.

    Question 3. Would provider payments have to be increased and to 
what extent?

    Answer. Please refer to the CNMI Medicaid Agency's response for the 
answer to this question.

    Question 4. Are there particular Medicaid eligibility, benefit or 
other requirements you wouldn't be able to meet within a reasonable 
time due to territory-specific limitations, and if so, what changes 
could the Commonwealth of the Northern Mariana Islands make to ensure 
residents get high quality health care in other ways that meets their 
needs?

    Answer. Please refer to the CNMI Medicaid Agency's response for the 
answer to this question.

    Question 5. Overall, what do you see as the necessary steps to 
better ensure access to quality, comprehensive care for the 
Commonwealth of the Northern Mariana Islands residents and what would 
be a reasonable timeline to reach such a goal?

    Answer. The operation of the Commonwealth Healthcare Corporation 
(CHCC) is highly dependent on Medicaid's ability to pay for services, 
especially given that 28 percent of the population relies on Medicaid 
to access healthcare services and about 46 percent of CNMI adults don't 
have any form of health insurance coverage.\1\ Fifty-two percent of 
CNMI residents, it must be noted, live on incomes at or below the 
Federal Poverty Level,\2\ and the median household income for CNMI 
families was less than half of the U.S. Nationwide median household 
income in 2010.\3\ Despite the high poverty rate, many CNMI residents 
don't qualify for Medicaid coverage because they do not hold the 
necessary permanent resident status to be eligible. As of 2010, 43 
percent (23,184) of all CNMI residents were non-U.S. citizens, with 
fewer than one-fifth of them holding the immigration status necessary 
to be eligible for CNMI Medicaid assistance. Employer-sponsored 
insurance is not a requirement for any class of employee in the CNMI, 
and individual health insurance plans are not available from private 
insurance companies operating in the CNMI. A major step to improving 
access to quality, comprehensive care for CNMI residents is to improve 
reimbursement mechanisms for services. Equitable financing for the CNMI 
Medicaid program would bring the CNMI closer to the reimbursements that 
are needed to sustain its healthcare system. Other steps must be taken 
at the local CNMI level to reduce the rate of the non-Medicaid eligible 
uninsured population and assist low income residents to pay for health 
care.
---------------------------------------------------------------------------
    \1\ 2016 CNMI Non-Communicable Disease and Risk Factor Hybrid 
Survey.
    \2\ 2010 U.S. Census.
    \3\ 2010 U.S. Census.

---------------------------------------------------------------------------
    Question 6. What will you have to cut if you go off the cliff?

    Answer. Please refer to the CNMI Medicaid Agency's response for the 
answer to this question.


    Question 7. What will be the impact on individuals and the 
healthcare delivery system in the territory, when Obamacare funding 
ends this year?

    Answer. If no action is taken to cushion the free fall from the 
Medicaid fiscal cliff for the CNMI, the CHCC would not be able to 
continue to sustain the range of services that it makes available to 
all CNMI residents today. This would impact all health services as 
personnel at the CHCC may need to be drastically cut, leaving residents 
to either forego the care they need, or seek care off-island, possibly 
becoming Medicaid beneficiaries of other states or territories such as 
Guam. For most island residents, off-island care is not a viable option 
due to the cost of travel and services.
    The healthcare system problems of 2011/2012 will reoccur, where 
services would need to be eliminated and doctors and nurses leave 
island. In order to consistently ensure patient safety and services 
quality, CHCC will need to make the hard decision to cut back on 
essential services and refer off-island.
    Although the CHCC offers a sliding fee discount for patients who 
live on low incomes and don't have health insurance, this program is 
unfunded, and is primarily a means to reduce barriers to care. The CHCC 
incurred roughly $18 mil of uncompensated care from uninsured patients 
in the FY 2018, and about $7 mil in charity care under the sliding fee 
discount program.
    If CNMI Medicaid is unable to pay for services for the Medicaid 
beneficiaries, then, the CHCC, as a safety-net provider of care, will 
bear an even larger burden of uncompensated and charity care, making 
operations even more difficult to continue, thereby affecting the whole 
population requiring any form of healthcare services.

                                 ______
                                 

    Vice Chair Sablan. Wow. Perfect timing, Ms. Muna. Thank you 
for that.
    We are trying to get our witnesses' testimony, because some 
Members will need to run to vote.
    Ms. Sablan, you are recognized for 5 minutes.

  STATEMENT OF HELEN C. SABLAN, DIRECTOR, COMMONWEALTH OF THE 
         NORTHERN MARIANA ISLANDS STATE MEDICAID AGENCY

    Ms. Helen Sablan. Honorable Chairman Grijalva, Ranking 
Member Bishop, Vice Chairman Sablan, members of the Committee 
on Natural Resources, thank you so very much for holding a 
hearing on the insular areas Medicaid fiscal cliff and for 
providing the Commonwealth of the Northern Mariana Islands the 
opportunity to present information on what the fiscal cliff 
means for the U.S. citizens of the CNMI.
    We recognize that we are the smallest of the U.S. 
territories in terms of population and geographic size. 
Nevertheless, the CNMI and its U.S. citizens value their U.S. 
citizenship and the Medicaid program.
    The CNMI Medicaid lives under Section 1108 budget caps that 
are totally inadequate. The ACA recognized the problem and 
temporarily adjusted the budget caps. The Federal Medical 
Assistance Percentages (FMAP) was also adjusted to 55/45 
percent when calculations give the CNMI income would be higher 
than almost all states. What does that mean for the CNMI today 
and tomorrow?
    In Fiscal Year 2018, the CNMI Medicaid program expended 
over $53 million to provide care for the 15,138 eligible 
Medicaid populations. Today, the number of enrolled Medicaid 
beneficiaries has increased to 16,206 following the two 
typhoons in 2018, including the Category 5 Super-Typhoon Yutu.
    In March 2019, the CNMI Medicaid program completely 
exhausted its Medicaid program funding, including the final 
amounts made available through ACA. The CNMI is not at the 
fiscal cliff, but it is in free-fall.
    For Fiscal Year 2020, Region 9 has informed us that our 
allotment will be $6.85 million for MAP and $11.2 million for 
CHIP. This is not much of a change in the cap and means that 
the shortfall between the actual Medicaid expenditures for 
Fiscal Year 2018 and the CMS Fiscal Year 2019 allotment will be 
around $50 million when the accounts payable for 2018 and 
Fiscal Year 2019 are accumulated.
    The median income for a family of four, based on data 
provided by the U.S. Census in 2010, shows that the CNMI family 
earned $19,958 in the same year that the average U.S. family 
earned $61,564. If we step back for a minute and think about 
just this basic information, we can clearly understand why so 
many residents in the CNMI rely on Medicaid for health care or 
are uninsured. The more than 16,206 individuals in the Medicaid 
program constitute 46 percent of the U.S. citizens in the CNMI.
    The CNMI government, the Medicaid program and its 
beneficiaries, and the CNMI health system is in a dire 
situation following the end of additional funding provided 
under the ACA and the devastating impacts of Typhoon Mangkhut 
and Super-Typhoon Yutu in 2018. I am here to plead the U.S. 
Congress to provide Medicaid disaster assistance and to address 
the inequities in the Medicaid program for the territories.
    I have worked in the CNMI Medicaid program since 1986, over 
32 years ago. In all these years, I have never been more 
emotionally affected than I have in the past year. We are 
currently in the process of severely curtailing services, 
limiting choice of providers in the program, and are making 
decisions knowing full well the adverse short- and long-term 
consequences our decisions will have. I am frightened and 
saddened at each step in our undertaking because I understand 
the effects on our people and our health system.
    While we are doing our very best to determine what might be 
intellectually characterized as the so-called ``best 
interests'' given the ``limited resources''--decisions 
regarding what services should be continued, what should be 
curtailed or dropped, and what providers can be paid, are and 
will continue to be made.
    It is very hard to explain to those that come to our office 
asking whether the health services that they are receiving will 
be cut. It is very hard to listen to their stories. What should 
we do with the patient that has been in an off-island hospital 
in another state that may be dying? Should we now inform the 
patient and parents that we are sorry but we will no longer pay 
for any of their medical bills? It is impossible for me not to 
see the faces of the people behind the numbers and impact that 
each decision made will have.
    In summary, the CNMI is in a desperate and dire situation, 
and the U.S. citizens in these islands deserve equity in health 
care. As such, we are humbly pleading for the U.S. Congress to 
please help to treat this equitably and, if I may humbly ask, 
quickly.
    Thank you once more for taking the time to hear this issue.

    [The prepared statement of Ms. Helen Sablan follows:]
Prepared Statement of Helen Sablan, Medicaid Director, Commonwealth of 
                      the Northern Mariana Islands
    Honorable Chairman Grijalva, Ranking Member Bishop, and members of 
the U.S. House of Representatives Committee on Natural Resources: Thank 
you so very much for holding a hearing on the Insular Areas Medicaid 
Fiscal Cliff and for providing the Commonwealth of the Northern Mariana 
Islands (CNMI) the opportunity to present information on what the 
``Fiscal Cliff'' means for the U.S. citizens of the CNMI.
    We recognize that we are the smallest of the U.S. territories in 
terms of population and geographic size. While World War II has long 
past and memory and knowledge of the Americans that died on Saipan or 
remembrance of the Enola Gay, the bomber that dropped the nuclear bomb 
on Japan, flew from the island of Tinian in the CNMI, may have faded, 
we believe the CNMI remains a location of strategic value in the Asia-
Pacific region. Our citizenry appreciates becoming a U.S. territory in 
1978 and a participant in the Medicaid program since 1979. The CNMI and 
its U.S. citizens value their U.S. citizenship and the Medicaid 
program.
    The purpose of this testimony is to provide the facts and 
challenges of the CNMI Medicaid program and the impacts the Medicaid 
Fiscal Cliff will have on the U.S. citizens in the territory. There is 
already so much information on the Medicaid program by U.S. government 
agencies and non-profit organizations, as well as expertise within the 
Congress and congressional offices, that I will not try to be 
duplicative of what this Committee and Congress already knows. At the 
same time, I will present some data to highlight important 
considerations.
                           basic information
    The Medicaid and CHIP programs in the CNMI today have about 15,136 
U.S. citizens enrolled in the programs. The number of U.S. citizens in 
the territory are about 33,273 or 61 percent of the total population of 
54,546 in the CNMI. Medicaid and CHIP provides critical healthcare 
services for about 46 percent of the total U.S. citizens in the CNMI 
today.
    In 2010, the U.S. Census provided data on the per-family median 
income in the United States. Figure 1 shows that the median income for 
a family of four in the CNMI was $19,958, in comparison to the median 
family income of $61,544 for the United States. Figure 1 also shows the 
income disparities among the ethnic groups in the CNMI. The income 
disparities among the indigenous Chamorros, Carolinians, and ``Other,'' 
principally Caucasian populations, when compared to the Asian 
populations are even more stark but important to note since they are 
principally non-U.S. and because of their income levels, constitute the 
vast majority of the uninsured population in the CNMI.

   Figure 1--Median Household Income in the CNMI from the CNMI State 
                         Innovation Model Plan
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    As a result of the low-income levels and the high cost of 
health insurance in the CNMI, there should be no surprise that 46 
percent of the eligible U.S. citizens in the CNMI are enrolled in the 
Medicaid program. In 2016, the uninsured rate was estimated to be 34 
percent of adults. The 20 percent of the population that do have 
private health insurance include the government employees which account 
for about 10 percent of the population.
                       the medicaid fiscal cliff
    The CNMI Medicaid program is not approaching the Medicaid Cliff. 
Today, the CNMI Medicaid program has fallen off the cliff and is 
currently in freefall. The CNMI, in FY 2019, has expended all Medical 
Assistance and ACA funding, although there remains some funding for 
CHIP that are expected to be fully expended by the end of FY 2019.
    Table 1 shows that in FY 2018, the CNMI Medicaid program expended 
over $53 million dollars. Additionally, as shown in Table 1, there is 
an Accounts Payables estimate of $18 million dollars remaining at the 
end of FY 2018.
    Table 1 further shows that in the current fiscal year, FY 2019, the 
Section 1108 budget cap amounts, CHIP funding, and the balance of the 
ACA increases that have been fully expended will result in an estimated 
shortfall for FY 2019 of around $42 million. This will result in 
another carry-over of Accounts Payables. The Accounts Payable amounts 
will depend on how much additional debt is incurred from services that 
cannot be reduced or eliminated and whether there is any relief through 
Medicaid Disaster Assistance for the current FY 2019.
    For FY 2020, the CMS has informed the CNMI of the MAP and CHIP 
amounts. Based on the formula for the CAPs, the amounts will remain 
around $19 million. Again, assuming no Medicaid Disaster Assistance or 
lifting of the Section 1108 caps in Title XIX, the shortfall will be 
over $42 million, higher than the $36 million estimated by CMS needed 
for Medicaid Disaster Assistance. This is largely due to the Accounts 
Payables that are not reflected in the CNMI government financial 
accounting system.

Table 1--Summary of Fiscal Year Expenditures and Fiscal Year Shortfall 
           Given the End of Additional Funding under the ACA
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                   the people behind the numbers
    There are many reports of agencies of U.S. government and non-
profit corporations that collectively describe the situation of the 
Medicaid and CHIP programs in the CNMI and other U.S. territories. 
These include publications from the Medicaid and CHIP Payment and 
Access Commission (MACPAC), Kaiser Family Foundation (KFF), U.S. 
Government Accountability Office (GAO), and many others. We believe 
that these organizations collectively provide very useful information 
and data on the situation with the Medicaid programs in the U.S. 
territories. However, please, let us not forget the people behind the 
numbers.

    As Judge Gladys Kessler in the Salazar v. District of Columbia 
precedential Medicaid case once stated:

        ``. . . let there be no forgetting the real people to whom this 
        dry and bloodless language gives voice: anxious, working 
        parents who are too poor to obtain medications or heart 
        catheter procedures or lead poisoning screens for their 
        children, AIDS patients unable to get treatment, elderly 
        persons suffering from chronic conditions like diabetes and 
        heart disease who require constant monitoring and medical 
        attention. Behind every ``fact'' found herein is a human face 
        and the reality of being poor in the richest nation on earth.'' 
        \1\
---------------------------------------------------------------------------
    \1\ https://www.courtlistener.com/opinion/2468509/salazar-v-
district-of-columbia/.
---------------------------------------------------------------------------
   impacts on the u.s. citizens in the commonwealth of the northern 
                            mariana islands
    I have worked in the CNMI Medicaid Program since 1986, over 32 
years ago. In 1998, I served as the Acting Medicaid Administrator and 
since 2000, as the Medicaid Administrator/Director for the CNMI 
Government. In all these years, I have never been more emotionally 
affected than I have been in the past year.
    With the end of the additional funding provided under the 
Affordable Care Act, the inequitable Section 1108 budget caps under 
Title XIX, the inequitable FMAP, the chronic lack of local funding, the 
added financial challenges created by Typhoons Mangkut and Yutu, some 
of the very highest rates of Medicaid and uninsured in the United 
States, and the many other challenges of distance, time, and costly air 
travel, I have had to lead an organization that is planning and 
executing Medicaid program cuts that will have both short- and long-
term harsh and life-threatening impacts on our U.S. citizen 
beneficiaries.
    The CNMI Medicaid Program is in the process of severely curtailing 
services, limiting choice of providers in the program, and are making 
decisions knowing full well the adverse short- and long-term 
consequences this will have on the U.S. citizens in the CNMI. It has 
been a very emotional and difficult time for our office to plan and 
implement decisions because we recognize and understand the impacts 
that this will have on the health of some of the most-needy people in 
the United States.
    I am frightened and saddened at each step in our undertaking 
because I understand the effects on our people and our health system. 
While we are doing our very best to determine what might be 
intellectually characterized as the so-called ``best interests'' given 
the ``limited resources''--decisions regarding what services should be 
continued, what should be curtailed or dropped, and what providers can 
be paid, are and will continue to be made. We very clearly understand 
the consequences to each decision on the health of the people that we 
serve and I am frightened for the short- and long-term impacts that 
will occur.
    It is even more of an emotional toll because in our small 
territory, we know many people that are Medicaid beneficiaries. We have 
relatives and friends through extended familial or community 
connections that are Medicaid beneficiaries. It is unavoidable that we, 
the Medicaid program, not see them at the grocery store, at churches, 
or the checkout clerk or the restaurant server, the laborer fixing 
roads, and everywhere else in the community. It is difficult not to 
know, as I see them, that decisions we are making in the Medicaid 
program are directly affecting their access to health care and the 
impacts that very lack of care will have on them, if not immediately, 
then, very certainly over the long-run.
    It is very hard to explain to those that come to our office asking 
whether the health services that they are receiving will be cut. It is 
very hard to listen to their stories. What should we do with the 
patient that has been in an off-island hospital in another state that 
may be dying? Should we now inform the patient and parents that we are 
sorry, but we will no longer pay for any of their medical bills? It is 
impossible for me, not to see the faces of the people behind the 
numbers and the impacts that each decision made will have.
                 notice to beneficiaries and providers
    The CNMI Medicaid Program informed Medicaid Beneficiaries this 
month that they must seek primary care services only from the 
Commonwealth Healthcare Corporation (CHCC). We have also informed 
private providers that effective June 1, there will be no 
reimbursements from the Medicaid program. The notification was provided 
in accordance with the CNMI Medicaid State Plan.
    Since August 2018, when the public became informed of the Medicaid 
Cliff, our small Medicaid office has been busy fielding many questions 
from both our beneficiaries and private providers. Today, our response 
is that we cannot pay the providers what we simply do not have in 
funding. Even now, at the same time that we are initiating further 
restrictions in the program, we are fully aware that the CNMI 
Government is already accumulating additional debt and that the 
Accounts Payables for the Medicaid program is growing.
    Further, while we are struggling with eliminating or reducing 
services, we have had to forewarn our private providers, including the 
CHCC, that we will not be able to pay our accumulating debts until we 
are provided funding again. We are, and continue to be, fully aware 
that the CNMI is still trying to financially recover from Typhoon 
Mangkut and Super Typhoon Yutu, a Category 5 that ripped through the 
center of the CNMI islands and that territory general funds are not 
available. The reason is that even our office has been forewarned that 
austerity may affect our Medicaid staff as well.
    How can we get national attention to the plight of the CNMI, the 
small territory located only 140 miles from the Territory of Guam where 
there is the U.S. Navy and U.S. Air Force? And will people hear us?
    impacts on the cnmi government and the safety net health system
    The U.S. Government Accountability Office (GAO), about 2 months 
ago, had a teleconference with the CNMI Government and the Medicaid 
program. Specifically, they asked questions and requested information 
and insight into the impacts of the Medicaid Fiscal Cliff and its 
impacts on the general fiscal conditions of the CNMI government 
especially following the typhoons.
    We explained how we have reached the point, where, without Medicaid 
Disaster Assistance or a lifting of the Section 1108 Caps and an 
adjustment to the FMAP, the Medicaid program will add to the further 
debt burden of the CNMI until the CNMI Medicaid program is able to cut 
all services including off-island care, dental services, and even 
drugs, unless we don't even pay the CHCC for the amounts that the CMS 
has determined are appropriate to pay under the Certified Public 
Expenditure methodology. We have been praying for Medicaid Disaster 
Assistance funding and for the U.S. Government to lift the Section 1108 
budget caps and let the FMAP be based on the same formula as other 
states.
    This is what the CNMI Medicaid program is doing today to our U.S. 
citizens. This is what I will have to continue to do when I return 
home.
           impacts on the commonwealth healthcare corporation
    The CNMI Medicaid program is also very cognizant and worried with 
the impact the shortfalls will have on the health system of the CNMI. 
The CNMI has a unique public corporation that provides hospital, 
clinical, and public health services. It is a safety-net health system 
and has also been doing its best given its own challenges. Due to the 
chronic financial shortfalls and when the CNMI government austerity 
program reduced work hours for all government employees by 20 percent 
for 2 years, the Medicaid program, in 2012, proposed use of the 
Certified Public Expenditures (CPE) payment methodology because the 
CNMI Government simply did not have funds to provide the matching 
amounts. Unfortunately, this also means that the full Medicaid 
reimbursement has not been provided to the CHCC since the program took 
effect.
    The CPE was proposed to the Centers for Medicare and Medicaid 
Services (CMS) as the only way that the Medicaid program could provide 
Federal Medicaid funding because of the public expenditures by the 
CHCC. The CMS calculates the amounts based on its annual analysis of 
the Medicare Cost Reports submitted by the CHCC and conducts audits to 
reconcile these amounts.
    Under the CPE methodology, the monthly payment for the CHCC, again, 
as determined by the CMS, is currently $1.64 million per month or 
$16.34 million per year. I point this out because the Medicaid MAP for 
2019, based on the Section 1108 budgetary caps, the CNMI Medicaid 
program will barely compensate the CHCC public corporation for an 
amount that the CMS determines should be paid. This means that all 
other expenses and services would need to be curtailed, including 
radiology services (because we have no radiologist on island), cancer 
care treatment, off-island surgeries that cannot be performed at the 
CHCC, and many others. The list is endless and dooms the U.S. citizens 
in the CNMI to substandard or no care.
    There are further consequences. Not only will the CHCC not be 
reimbursed even the full estimated Federal-local share of Medicaid 
services. What are we to do?
                      averting the medicaid cliff
    The CNMI Medicaid program believes that the U.S. House of 
Representatives clearly understands the major sources of the challenges 
and the recent questions sent by the U.S. Senate Committee on Natural 
Resources strongly suggests an understanding of the very serious nature 
of the Medicaid Cliff.
    There are three major policy proposals that will provide the level 
of assistance that is needed. First, the CNMI Medicaid Program requests 
Medicaid Disaster Assistance in the amounts minimally described as 
needed by the CMS. Second, the CNMI Medicaid Program strongly supports 
the lifting of the Section 1108 caps and allow the standard methodology 
to apply to the U.S. territories for the Medicaid Federal Medical 
Assistance Percentages (FMAP). Passage of the proposed H.R. 1354, the 
Territories Health Equity Act of 2019, would provide equitable 
treatment for one of the most important U.S. programs that affects the 
U.S. territories and the U.S. citizens of the Commonwealth of the 
Northern Mariana Islands (CNMI)--Medicaid.
                                summary
    The CNMI is in a desperate and dire situation; and, the U.S. 
citizens in the Northern Mariana Islands deserve equity in health care. 
As such, we are humbly pleading for the U.S. Congress to please help to 
treat the U.S. citizens of the U.S. Commonwealth of the Northern 
Mariana Islands equitably, and if I may humbly ask, quickly.

    Thank you once more for taking the time to hear this issue.

                                 ______
                                 

     Questions Submitted for the Record to Helen Sablan, Director, 
   Commonwealth of the Northern Marinas Islands State Medical Agency
                   Questions Submitted by Rep. Sablan
    Question 1. If Congress finally treats the territories equitably 
and provides uncapped funding with Federal match determined in the same 
was as states, what would the Commonwealth of the Northern Mariana 
Islands do to ensure that Medicaid beneficiaries have access to 
comprehensive services comparable to what states must provide?

    1a. With the additional Federal funding, what specific investments 
could you make to improve eligibility and benefits over time?

    Answer. The CNMI Medicaid program, today, provides the statutory 
and regulatory required mandatory Medicaid services. Additionally, the 
CNMI Medicaid program, today, provides many optional services, 
including, but not limited to, prescription drugs (all states provide 
this option), dental services for adults; physical therapy; prosthetic 
devices; eyeglasses; medical supplies; and other services. The optional 
Medicaid services were made possible because of the additional funding 
available through Patient Protection and Affordable Care Act (ACA).
    For FY 2019, the Medicaid Disaster Assistance passed by Congress 
provides temporary relief to continue the services until September 30, 
2019 for the CNMI Medicaid program, and the CNMI greatly appreciates 
this assistance. The lifting of the Section 1108 caps or a second year 
of Medicaid Disaster Assistance is not provided for Fiscal Year (FY), 
then, the CNMI Medicaid program will not be able to fully provide the 
mandatory services for the full duration of the 2020 Fiscal Year and 
both mandatory and optional services that are currently being provided 
will be eliminated or curtailed.
    Should equitable funding as the states be provided, then, the 
amount of the optional services comparable to what the states provide 
will be substantially improved. Specifically, the CNMI Medicaid program 
would assess the optional services permitted under the program. We 
would assess what other states have done and assess the optional 
services on the basis of need, feasibility, benefit-cost, 
effectiveness/cost and other criteria.
    The adjustment to the FMAP and the commitment of territorial 
funding are essential to planning optional services include diagnostic, 
screening, preventive, and rehabilitative services, respiratory care 
services, home and community-based services, and other services 
provided by other states. The CNMI will also be in a position to 
evaluate managed care service delivery options and the use of Medicaid 
waivers and other Medicaid program service options to improve care and 
health of the Medicaid population, and to lessen the cost of health 
care. We would also work closely with the policy makers that would need 
to appropriate the CNMI matching funds on the value of the proposed 
optional services.
    With respect to eligibility, the CNMI and the CMS implemented a 
1902(j) waiver that enables the maximum participation in the Medicaid 
Program.

    Question 2. What improvements in your healthcare infrastructure 
would be needed?

    2a. Would dedicated up-front funding be needed to make those 
changes?

    Answer. The CNMI needs improvements in the clinical, financial, and 
technology infrastructure. The following is a brief discussion of the 
needed improvements.

    Health Care Services Infrastructure--The clinical and public health 
infrastructure in the CNMI has significantly improved since the 
Commonwealth Healthcare Corporation was established as a public 
corporation in 2011 and the additional Medicaid funding became 
available through the ACA. There are more clinicians and healthcare 
services that are currently provided and the quality of services has 
continuously improved. Still, despite the substantial progress, there 
are many clinical services that are not currently provided in the CNMI 
at this time because of the Section 1108 caps, the inequitable FMAP, 
and the high rates of uninsured in the CNMI. The small size of the 
territory, the lack of specialists, and the uncertainties of Medicaid 
program fiscal cliff have been barriers to improving the overall 
healthcare services infrastructure in the CNMI. The CNMI Medicaid 
program is studying the Medicaid services to determine what are the 
high priority areas where services and other infrastructure can be 
effectively provided within the territory. Given the small size of 
territory, there will be continued reliance on specialized healthcare 
providers and services that are outside of the CNMI.
    Financial Infrastructure--In terms of the financial infrastructure 
to support the health system, the two main problems remain the Medicaid 
caps and FMAP, and the high uninsured rate resulting from the repeal of 
the CNMI Employer Responsibility law for immigrant laborers in 2013. 
The amount of charity and sliding fee supported care results in 
additional millions of losses in revenue for the CHCC, the safety net 
provider in the CNMI. Again, the limited financial infrastructure for 
health care will be the limited financial structure will be devastated 
especially since the funds provided under the Section 1108 caps of 
$6.85 in FY 2020 is not even sufficient to cover the CPE amounts 
determined by CMS for the CHCC.
    The capped amount of $6.85 million and the CHIP amount of $11.2 
million and current proposed CNMI appropriation for Medicaid of $5 
million are around $48 million short of the 2018 Medicaid expenditures 
of $53 million and the Incurred But Not Booked Accounts Payable of $18 
million. The 16,206 current Medicaid beneficiaries will become 
uninsured in the CNMI second quarter of FY 2020 without the equitable 
treatment as states. Finally, it is important to note that the 
estimated amounts provided by the CMS to Congress of the $36 million 
amount needed for FY 2019 Disaster Assistance did not include the IBNR 
Accounts Payables and was based on two quarters of available ACA 
funding that was exhausted in March 2019. CNMI respectfully requests 
that in addition to lifting the Section 1108 caps and adjustment of the 
FMAP, that an additional year of 100 percent Federal funding be 
provided based on Medicaid Disaster Assistance.

    Health Information Technology Infrastructure--The Health 
Information Technology for Economic and Clinical Health (HITECH) Act 
was instrumental in helping the nation to establish a Health 
Information Technology (HIT) infrastructure by incentivizing the use of 
Electronic Health Records (EHR) systems and providing funding for 
Health Information Exchange (HIE), and public health information system 
interfaces. Unfortunately, the CNMI, today, remains behind the states.
    In part, the reason is that the small size of the territory has 
resulted in a different inequity. For example, it should be clearly 
noted that the CNMI received only $800,000 to plan, design, and 
implement a Health Information Exchange (HIE). The amount was obviously 
insufficient. According to the Office of the National Coordinator for 
Health Information Technology (ONC), the three Pacific territories 
received the equivalent of a small state. As a result, none of the 
Pacific Territories had a functioning HIE. Efforts were made to reach 
out to other states. However, all efforts were rebuffed.
    Further, under the HITECH, the CNMI CHCC hospital did not qualify 
for both the Medicare EHR incentive funding because of a quirk in the 
law, despite the CHCC's role as a Medicare provider. The HITECH Act 
failed to mention the territories for the Medicare EHR incentive. As a 
result, the CHCC was unable to use the full incentive provided to all 
other state hospitals that provide Medicare services. CHCC was only 
eligible for the Medicaid EHR Incentive.
    In the CNMI, the HIT infrastructure to improve clinical care, 
patient safety, public health and the like, remains a challenge. Even 
the CHCC health system has not been able to meet the Promoting 
Interoperability Standards of the CMS to receive the formerly ``Stage 
2'' of Meaningful Use incentives; and no private providers in the CNMI 
have met the standards as well. Of course, this means that the use of 
HIT and HIE to improve clinical care, undertake care coordination, 
submit data for public health disease surveillance, and conduct studies 
on the population health of Medicaid beneficiaries is not equal to the 
infrastructure of other states. Still, despite these facts, the CNMI 
Medicaid continues to work with all provider to make progress in all of 
these areas. There is some health data exchange that use Direct Secure 
Messaging to comply with both ONC and the Health Insurance Portability 
and Accountability Act (HIPAA), as amended by the HITECH Act.

    Medicaid Enterprise Systems (MES)/Medicaid Management Information 
System (MMIS) Administrative Information Infrastructure--The CNMI has 
planned meetings with the CMS to initiate the planning and 
implementation of an MMIS claims processing both to improve 
administrative efficiency, eliminate errors with claims, conduct 
ongoing fraud analysis, and to achieve the national objectives of 
submitting data to the CMS Transformed Medicaid Statistical Information 
System (T-MSIS). CNMI has received initial planning funds from the CMS 
to initiate a Medicaid claims data warehouse that is absolutely 
integral to enable data analysis to improve care quality; conduct 
service utilization and cost studies; improve care services and 
coordination; detect waste/fraud and abuse; and identify opportunities 
to lessen the cost of health care.
    Federal funding is available for these program activities and the 
CNMI Medicaid program will seek the both Federal funding and the local 
matching funds to move forward with the information technology 
infrastructure for MES/MMIS and a Medicaid claims and clinical data 
warehouse. As such, the CNMI Medicaid program is not seeking any 
``special'' treatment to fund the MES/MMIS/Health Information 
Technology activities. The CNMI is only requesting equity with the 
funding and FMAP as provided to other states for the Medicaid 
Assistance program.
    The CNMI Government will need to find the match, as all other 
states have done, for the full MES/MMIS and data warehouse activities 
so that data can be submitted to the CMS T-MSIS data systems and to 
enable an effective Medicaid Fraud Control Unit to function with the 
continuous monitoring of Medicaid claims. Nonetheless, with equitable 
funding and FMAP, then, the CNMI would need to prioritize local 
funding.

    Question 3. Would provider payments have to be increased and to 
what extent?

    Answer. The provider payments would have to be increased since 
almost all our providers are paid using Medicare reimbursement. We 
should use the Medicare reimbursement times 20 percent at least. Some 
of the providers are not willing to treat our patients because of the 
low reimbursement. For example, the Guam Memorial Hospital Authority 
(GMHA) has not been accepting our patients since 2011 because of the 
low reimbursement; and, because of the Section 1108 caps, we are unable 
to develop waiver and other programs that can facilitating our desire 
to improve care, improving quality, improve population health, and 
lessen costs for the Medicaid program and beneficiaries. However, no 
provider payment adjustments can be contemplated without equity in the 
caps and FMAP.

    Question 4. Are there particular Medicaid eligibility, benefit or 
other requirements you wouldn't be able to meet within a reasonable 
time due to territory-specific limitations, and if so, what changes 
could the Commonwealth of the Northern Mariana Islands make to ensure 
residents get high quality health care in other ways that meets their 
needs?

    Answer. The CNMI Medicaid program is constantly assessing ways to 
improve benefits and at the same time ways to lessen Medicaid expenses. 
We want to have a fully functional program that is able to efficiently 
process Medicaid claims, have a Medicaid data warehouse that would 
enable our program to analyze the cost and quality of care and 
determine the high-costs areas and areas where we might use waivers and 
other Medicaid programs to improve care and lessen costs. We believe 
that there are many program changes that we might be able to accomplish 
but are unable to do so of the Section 1108 caps, FMAP, and CNMI 
general funds for a match.

    Question 5. Overall, what do you see as the necessary steps to 
better ensure access to quality, comprehensive care for the 
Commonwealth of the Northern Mariana Islands residents and what would 
be a reasonable timeline to reach such a goal?

    Answer. The following are some of the steps that will be taken 
should the caps be lifted and the Federal Matching Assistance 
Percentage (FMAP) be adjusted to be the same as states or 
substantially. The CNMI will: (a) continue the review of the Medicaid 
program to determine optional services and evaluate the other optional 
services for inclusion; (b) assess the quality of services; (c) analyze 
alternatives to lessen the cost of care; (d) plan and implement a full 
Medicaid Enterprise System services; and evaluate the use of Medicaid 
program options. Just as important, the CNMI Medicaid program, just as 
one example, will immediately initiate planning to implement waiver 
programs as a diabetes care/management/education program under Section 
1115(c) or Section 1915(i). Diabetes is a major problem in the CNMI and 
has long-term consequences for Medicaid costs, comorbidities, and 
debilitating problems such as renal, vision, cardiovascular and others. 
The program design will be based on the many evidenced-based studies 
that have shown the efficacy of diabetes self-management and patient 
education and care coordinated followup. The program will be closely 
coordinated with public health education for the general public and 
schools and a public awareness campaign organized with the Commonwealth 
Healthcare Corporation (CHCC).
    The CNMI Medicaid program believes that such a program will achieve 
the objectives of improving care, care coordination, population health, 
and lessen the costs over a period of time. This would be coordinated 
with the CHCC, a unique public corporation, that has both clinical and 
public health functional responsibilities. Due to its unique public 
corporation structure, the CHCC is well positioned to implement a 
multi-faceted program intervention that would, as suggested in 
evidenced-based literature, result in long-term reductions in diabetes 
and lessen debilitating and costly diseases such as Chronic Kidney 
Disease, cardiovascular problems, vision, and the many well-understood 
comorbidities.
    The anticipated reductions from diabetes alone, will lessen the 
cost of care and serves as only one example of how the CNMI would move 
forward with implementing programs that not only improve the health of 
beneficiaries but lessen healthcare costs at the same time. This will 
take time. However, the CNMI Medicaid program is fully committed to 
continuously improving the program for Medicaid beneficiaries.
    Waiver programs could not be implemented today because of the gap 
between the Medicaid funding, as a result of the Section 1108 caps, 
where the Medicaid program struggled to meet the healthcare financing 
of the current program.
    The CNMI has already initiated a plan to establish a Medicaid 
Claims Data Warehouse to provide the data needed to evaluate the cost 
of services, the quality of care, and the population health conditions 
that are driving healthcare expenditures. The reasonable timeline to 
reach such a goal is about 3 years because of the limited resources.

    Question 6. What will you have to cut if you go off the cliff?

    Answer. The CNMI Medicaid program was not approaching the cliff but 
fell off the cliff at the end of March 2019 when ALL Federal MAP and 
ACA increases were exhausted, including even the Section 1323 funding 
provided to CNMI because it did not elect to establish a Health 
Insurance Exchange. Now that H.R. 2157 is signed into law, the 
mandatory and optional services provided will be continued until 
September 30, 2019. At that time, we will again fall off the cliff 
within the first quarter given that the capped MAP will not even cover 
the cost of Medicaid Federal share amounts due to CHCC as determined by 
CMS. So, to be clear, it is not what we will have to cut to preserve 
the program, the CNMI will not be able to maintain even the mandatory 
services for the year.
    The CNMI has initiated consultation with the CMS Region IX. The 
purpose of the consultations is to ensure that when services are cut, 
the program remains even though the Federal and local funding will have 
been exhausted. The situation is that dire. There is no exaggeration 
since all government and non-government agencies recognize the gap 
caused by the Section 1108 MAP caps and the FMAP.
    Another option could be to have the CNMI Government continue to 
incur Accounts Payables that could lead to severe financial problems 
for the territory, Medicaid providers dropping out of the program, and 
even more severe consequences given the financial situation of the CNMI 
government following Typhoons Mangkhut and Yutu.

    Question 7. What will be the impact on individuals and the 
healthcare delivery system in the territory, when Obamacare funding 
ends this year?

    Answer. The health care of the 16,206 U.S. citizens and Medicaid 
Beneficiaries will be very severely affected in both the short and long 
run. Medicaid Beneficiaries that need tertiary cancer care or surgeries 
and other services that public acute Commonwealth Health Center 
hospital is unable to provide may need to finance it themselves or use 
the CNMI citizen benefits if eligible or forego getting the care that 
they need. If we use the full amount of the Medicaid MAP and CHIP 
allotment under the caps to pay the public CHCC, then, the CNMI 
Medicaid program will not be able to pay all other ``on-island'' or 
``off-island'' Medicaid providers. The CHCC does not have a radiologist 
on staff, does not provide advanced cancer care treatment, does not 
have a gastroenterologist, and unable to perform many surgeries.
               Questions Submitted by Rep. Gonzalez-Colon
    Question 1. How will the overall healthcare system and the non-
Medicaid population in the Northern Mariana Islands be affected if 
Medicaid funding is not increased for FY 2020?

    Answer. The impacts on the overall healthcare system will be 
clearly devastating for the non-Medicaid populations if the Medicaid 
funding is not increased for FY 2020.
    The main provider of care is the Commonwealth Healthcare 
Corporation (CHCC), a unique public corporation that was constituted in 
late 2011. The CHCC is responsible for the sole acute care hospital in 
the territory; adult, children, family, dental, dialysis clinics on the 
CHCC campus on Saipan; and clinics on the two remotely populated main 
islands of Rota and Tinian. The CHCC also has statutory 
responsibilities for all public health program functions that are 
operated by state and/or county governments throughout the United 
States, including a behavioral health program. The unique public 
corporation is the safety net provider in the CNMI.
    There are also several private clinics, a Section 330 Community 
Health Center, a second renal dialysis clinic, several dental clinics, 
and a private laboratory. There is no on-island radiologist or 
gastroenterologist or cancer treatment center, to name only a few of 
the medical services that are not provided in the CNMI. Medicaid 
Beneficiaries that need those services must see ``off-island'' 
healthcare providers in Guam, Philippines, Hawaii, and the U.S. 
mainland.
    If a second year of Medicaid Disaster Assistance is not provided or 
the Section 1108 caps are not eliminated, then, the CHCC will need to 
survive on a portion of the $6.85 million of total Medical Assistance 
funding under the caps. This amount, even if all funds were provided to 
the CHCC, will not even meet the Federal amounts the CMS has determined 
should be provided to the CHCC as the Federal share under the Certified 
Public Expenditure (CPE) methodology. The current CPE amount as 
determined by the CMS is $1.5 million or $18 million a year based on 
the CHCC Medicare Cost Reports. So, loss will be $12 million to the 
CHCC if you assume that all funding is provided to the CHCC. When you 
include the fact that the CHCC treats the uninsured and provides a 
sliding fee for indigent patients at a loss of $19 million a year, the 
impact will be devastating to the CHCC and to health system of the 
CNMI.
    It is critical to understand again that the CHCC includes an acute 
care hospital that does not cover all types of specialties. As a 
result, the use of ``off-island'' providers is unavoidable. Further, 
even with lifting the Section 1108 caps, there will need to be 
significant reliance on Providers that are outside of the CNMI since 
the territory would not have the patient volume to support the 
specialist within the territory. The CHCC renal dialysis center has 
been rated highly by the annual CMS conducted surveys. Nonetheless, the 
CHCC does not have sufficient dialysis stations and must rely on the 
second dialysis center to meet the number of dialysis patients in the 
CNMI.
    Finally, it should be noted that following the CHCC lost five 
physicians and a significant number of nurses when the CHCC was unable 
to make payroll due to the financial conditions at the birth of the 
CHCC. History will repeat itself without lifting the caps and adjusting 
the FMAP.

    Question 2. Currently, the Social Security Act provides for capped 
Medicaid funding for the territories. For FY 2017, the cap in the 
Northern Mariana Islands was $6.34 million. How much did the Medicaid 
program benefits actually cost?

    Answer. As shown in Table 1, below, the actual Medicaid 
expenditures for FY 2018 was $53.11 Million. With an additional 
Incurred But Not Booked (IBNR) Accounts Payable of $18 Million, the FY 
2018 total was $71.42 Million.

                                Table 1

Summary of FY 2018 Expenditures and FY 2020 Shortfall Given the End of 
                    Additional Funding under the ACA
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    .epsFor FY 2020, the CMS has informed the CNMI of the MAP and CHIP 
amounts. Based on the formula for the CAPs, the amounts will remain 
around $19 million. Again, assuming no Medicaid Disaster Assistance or 
lifting of the Section 1108 caps in Title XIX for FY 2020, the 
shortfall will be over $42 million, higher than the $36 million 
estimated by CMS needed for Medicaid Disaster Assistance. This is 
largely due to the Accounts Payables that are not reflected in the CNMI 
government financial accounting system.
    For the current FY 2019, the CNMI completely exhausted its $6.48 
million in the Section 1108 Cap as well as the last of the ACA funding, 
including the Section 1323 funding since the CNMI did not elect to 
implement a Health Insurance Exchange.
    For FY 2020, the CMS informed the CNMI Medicaid program that the 
allocation would be $6.85 million for the Medical Assistance Program 
and $11.20 for the Children's Health Insurance Program. The gap between 
the FY 2020 allocation and the 2018 Medicaid expenditures, including 
Accounts Payables, is about $42.27 Million. Again, this staggering 
amount for the CNMI does not include the 2019 Accounts Payable IBNR 
that is currently accruing.

    Question 3. Could you please provide the Committee actual examples 
of how the current statutory FMAP of 55 percent affects the provision 
of health care in the Northern Mariana Islands?

    Answer. The following are two very specific examples of how the 
FMAP affects the provision of health care in the CNMI Medicaid program. 
At the same time, please keep in mind that without the lifting of the 
Medicaid Section 1108 caps, the total amount required will not even be 
available.
    First, the Statutory FMAP of 55-45 percent affects the provision of 
health care is illustrated by two facts. Fact 1--the CNMI Legislature 
has never appropriated sufficient general fund appropriations to match 
the Federal expenditures at the 55-45 percent level. This helps to 
explain the IBNR Accounts Payables of $18 million. The IBNR AP amount 
is for private providers.
    If the CNMI did not implement the Certified Public Expenditure 
(CPE) payment methodology that uses the public expenditures of the 
Commonwealth Healthcare Corporation, a public corporation, as the CNMI 
match for both inpatient and outpatient services, then, the CNMI would 
NOT have been able to even expend the amounts provided by the ACA and 
the optional services would have had to be severely curtain.
    Fortunately, the CNMI Medicaid program elected in 2012 to implement 
the CPE methodology. The Federal share based on the CPE payment 
methodology is calculated by the Centers for Medicare and Medicaid 
Services (CMS) each year. As a result of the use of the CPE 
methodology, the CNMI was able to expend the much-needed amounts 
provided under the ACA for the CHCC; and, as the CHCC testified, was 
instrumental in helping the CHCC to make improvements. Unfortunately, 
at the same time, the use of the CPE essentially means that the CHCC 
did not receive the 45 percent in the local match. Nonetheless, the 
CHCC health system has made substantial improvements over the years due 
to the increased amount under the ACA.
    A second example of how the FMAP is a barrier is with payments to 
private providers. The CNMI government has not appropriated sufficient 
funds based on the inequitable FMAP requirements of a 45 percent CNMI 
share. As described above, this led the CNMI to use the CPE methodology 
for payments to the CHCC. But, for the other providers, the inability 
of the CNMI government to fund the 45 percent share of the artificial 
FMAP has resulted in Incurred But Not Reported (IBNR) Accounts Payables 
of $18 million at the end of FY 2018.
    The CNMI Medicaid program, as with all other states and 
territories, absolutely must match the Federal funds that are provided 
for Medicaid program based on the FMAP. However, since the CNMI 
Government has not been able to appropriate the full matching 
requirements needed, the CNMI Medicaid program must defer payments to 
Private Providers because of the inability of the CNMI to provide a 45 
percent match. This results in the IBNR Accounts Payables. The same 
problem has occurred in other territories.
    If both the Section 1108 and FMAP inequities are corrected, then, 
the CNMI would be able to pay the non-CHCC providers in a far more 
timely manner since payments to private providers must be deferred 
until matching funds are available. This has led many Medicaid 
providers, especially specialist off-island providers, to stop 
providing services for the CNMI Medicaid population.

                                 ______
                                 

    Vice Chair Sablan. Thank you. Another perfect-timing 
witness. Thank you very much, Ms. Sablan.
    At this time, I would like to recognize Ms. Theresa 
Arcangel for her 5 minutes, please.

   STATEMENT OF THERESA ARCANGEL, CHIEF ADMINISTRATOR, GUAM 
                   DIVISION OF PUBLIC WELFARE

    Ms. Arcangel. Hafa adai, Mr. Chairman and Ranking Minority 
Member. For the record, my name is Maria Theresa Arcangel, 
Chief Administrator for the Division of Public Welfare, Guam 
Department of Public Health and Social Services. I oversee 
Medicaid administration.
    I am here with Ms. Linda DeNorcey, director of the 
department. On behalf of Governor Leon Guerrero and the people 
of Guam, we thank you for inviting us to testify regarding Guam 
Medicaid financial issues.
    The cost of providing health care in Guam is quite high due 
to its geographic location and the lack of tertiary centers and 
other healthcare professionals. Some medical providers refuse 
to accept Medicaid patients due to delayed payments. This 
further increases the medical cost because recipients are 
forced to seek treatment at the hospital emergency room.
    Additionally, the cost of drugs is more expensive in Guam 
compared to the U.S. mainland because there are only five to 
six wholesalers that ship drugs to Guam in comparison to the 
hundreds of companies available here. These vendors may tend to 
impose a higher price due to lack of competition. The shipping 
costs and the risk of stocking drugs that have limited shelf 
life also contribute to this high cost.
    Guam has been burdened for years by U.S. treaty obligations 
with the Compact of Freely Associated States, which allows 
unrestricted immigration. These immigrants have contributed to 
the changes in Guam's demographics. In Fiscal Year 2017, Guam 
estimated that nearly $147 million was spent on education, 
public safety, health care, and social services for these 
migrants. Of that amount, $38.5 million was for health care and 
welfare services.
    Guam's economy is heavily dependent on the tourism industry 
and U.S. military spending. The influx of COFA migrants created 
an additional hardship on Guam's economy. As a result, the 
government is unable to guarantee the availability of local 
matching funds to draw down the Federal grant awards.
    Guam administers Medicaid under Federal regulations that 
are different from the 50 states and the District of Columbia. 
Guam Medicaid's Federal Medical Assistance Percentage is fixed 
at 55 percent. In addition, the Federal Medicaid funding to 
Guam is subject to an annual funding cap, which is $17.97 
million for this fiscal year, unlike the states and DC that are 
open-ended.
    Furthermore, beginning in 2014, the Federal Government 
funded the states that implemented the ACA Medicaid expansion 
for childless adults at 100 percent of the coverage costs for 
the first 3 years. This is not applicable in Guam.
    Instead, Section 2005 of ACA provided Guam with $268 
million, which partly alleviated the financial shortfall not 
only of our Medicaid program but also of Guam's locally funded 
medical assistance program, where most of the COFA citizens 
qualify. This funding allowed Guam to shift the cost of COFA 
migrants' emergency services to Medicaid. But the 45 percent 
required local match provides hardship in fully expanding the 
program to cover more uninsured population. Unfortunately, Guam 
would not be able to expend all the ACA funding, which will 
expire this fiscal year.
    If ACA is not extended or replaced, the Guam Medicaid could 
be forced to decrease its income guidelines and terminate some 
of its program eligibles. This will further increase the 
uninsured population in Guam.
    The U.S. territories receive fewer Federal dollars for low-
income healthcare programs than the U.S. states due to long-
standing regulations. There should be no disparity on the 
Medicaid funding distribution. The low-income U.S. citizens in 
Guam and other U.S. territories are no different from the U.S. 
citizens in the mainland, and so their healthcare benefits and 
needs should not be viewed or treated differently.
    Hence, Guam proposes to remove the expiration date of 
funding appropriation under Sections 2005 and 1323 of ACA until 
it is fully expanded, remove the Medicaid cap, and increase the 
FMAP of Guam and the other U.S. territories.
    We applaud the Committee for this oversight and for taking 
the necessary steps to evaluate the needs of Guam and the other 
territories. Thank you for the opportunity to speak regarding 
this important issue.

    [The prepared statement of Ms. Arcangel follows:]
 Prepared Statement of Ms. Maria Theresa Arcangel, Chief Human Service 
         Program Administrator, Division of Public Welfare-Guam
    Hafa adai, Mr. Chairman and Ranking Minority Member, my name is 
Maria Theresa Arcangel, Chief Human Service Program Administrator for 
the Division of Public Welfare, Guam Department of Public Health and 
Social Services that oversees the administration of Medicaid. I am here 
with Ms. Linda Unpingco DeNorcey, Director of the Department.
    On behalf of Governor Leon Guerrero and the people of Guam, we 
thank you for inviting us to testify before the Committee on Natural 
Resources on the matter of Medicaid and the cliff Guam faces if there 
is no meaningful action taken by the Congress before the expiration of 
ACA Medicaid Funding on September 30, 2019 and more broadly how 
Medicaid is applied to Guam as well as other U.S. territories.
    My testimony will cover the Medicaid issues in several contexts: 
(1) access to healthcare services, (2) the cost of health care and high 
cost of medications, (3) immigration of the Compact of Freely 
Associated States citizens, (4) Guam financial instability, (5) the 
limited time to fully utilize funding appropriated under Section 2005 
and Section 1323 of the Affordable Care Act, and (6) the disparity on 
the Medicaid Program funding distribution of the U.S. Territories in 
comparison to the U.S. states given Guam Medicaid's Federal Medical 
Assistance Percentage (FMAP) rate of 55 percent and Guam's annual 
Medicaid Federal capped funding.
    As you know, Guam became a U.S. territory in 1950; the island is 
210 square miles, located approximately 5,800 miles west of San 
Francisco, and has an estimated population of 170,000. It is the 
largest island in the western Pacific and is a part of Marianas 
Archipelago, which includes the Commonwealth of the Northern Mariana 
Islands.
    Guam's proximity to Asia (3-4 hours by air) makes it the most 
strategically important U.S. location in the Pacific for defense and 
for U.S. force projection.
    Moreover, as the U.S. regional hub in the Pacific, a healthy 
visitor industry which eclipses more than 1.5 million visitors annually 
and the primary destination for migrating FAS citizens, the risk of 
communicable and infectious disease outbreaks (i.e., Tuberculosis, 
Hepatitis, Influenza, etc.) is heightened.
    Like many stateside rural areas, Guam suffers from a shortage of 
primary care physicians, specialists, dentists, and psychiatrists. 
Health Resources and Services Administration (HRSA) has qualified Guam 
as both a Medically Underserved Area (MUA) and a Health Professional 
Shortage Area (HPSA). The shortage of health professionals is primarily 
attributed to the difficulty in recruiting providers due to Guam's 
remote island setting, small scale, and territorial status (i.e., not 
linked to any larger state entity), the physician salary not comparable 
to U.S. rate, and the high cost of malpractice insurance on Guam. 
Clearly, with an estimated population of 170,000 individuals, there 
remains a shortage of primary care physicians, which is felt most 
especially among the Medicaid, Medically Indigent, and the uninsured 
patients who struggle finding a provider and a permanent ``medical 
home'' since providers on island refuse to accept Medicaid patients due 
to delayed Medicaid payments. Thus, clients are forced to seek 
treatment at the hospital emergency room, which is more costly.
    Other than the shortage of providers, there are gaps in tertiary 
care services (there are no tertiary care facilities on Guam as in the 
United States), off-island referral services, and inpatient care 
services. Additionally, there are instances when off-island hospitals/
doctors refuse to accept Guam's Medicaid referrals due to untimely 
reimbursements. Thus, the difficulty of accessing health care 
(facilities and specialists) increases patients' physical and emotional 
stress, reducing the likelihood of seeking medical care, and so they 
forego medical care until their condition worsens that they have to be 
hospitalized.
    Given the above factors, the cost of providing health care on Guam 
is quite high because of its unique geographic location, limited number 
of primary care physicians, specialists, and allied-health 
professionals, and the lack of tertiary care facilities.
    Similarly, the cost of drugs is more expensive in Guam as compared 
to the U.S. mainland due to limited choices of pharmaceutical 
wholesalers and distributors (only 5 or 6) that can ship drugs and 
medical devices to Guam effectively as compared to hundreds of 
companies available to the U.S. mainland. These vendors may tend to 
take advantage of this lack of competition by imposing a higher price 
on medications. Other factors contributing to the high cost of 
pharmaceuticals is the shipping cost and the stocking of drugs with a 
limited shelf life. Thus, pharmaceutical services rank as the second 
highest Medicaid expenditure on Guam.
    The migration of FAS immigrants is allowed under the Compact of 
Free Association (COFA) signed between the U.S. Federal Government and 
former U.S. associated Pacific Islands. This U.S. treaty obligation 
allows unrestricted migration of FAS citizens (often ill individuals) 
from the Federated States of Micronesia (FSM) (Pohnpei, Yap, Kosrae, 
Chuuk), the Republic of Marshall Islands, and the Republic of Palau to 
the United States and its Territories (Guam, Commonwealth of the 
Northern Mariana Islands, and America Samoa).
    According to the U.S. Census Bureau, in 2013, there were 17,170 
compact migrants on Guam. Guam is an attractive place due to the 
availability of health and social services programs. These immigrants 
have contributed to the changes in Guam's demographics and have 
adversely impacted the financial well-being of Guam. In 2017, Guam 
estimates that nearly $147 million dollars was spent on education, 
public safety, health care, and social services. Of this amount, $38.5 
million was spent on health care and welfare services for this 
population while living on Guam. Moreover, of the $110.8 million 
(Federal and local) spent by the Guam Medicaid Program in Fiscal Year 
2018, $29 million, or 27 percent of the total expenditures were spent 
for FAS population healthcare needs. Thus, there is no equitable 
reciprocal healthcare services payment from the Federal Government for 
the FAS population.
    Furthermore, Guam's economy is heavily dependent on the tourism 
industry and U.S. military spending. The influx of Compact Impact of 
Free Association created an additional hardship on Guam's economy. As a 
result, the government is unable to guarantee the availability of local 
matching funds to drawdown the Federal grant awards to pay the medical 
providers timely for the services rendered to program recipients.
    Prior to the supplemental funding of $268 million brought about by 
Section 2005 of the ACA, Guam Medicaid always expends its annual 
Federal capped funding before each fiscal year ends. The ACA provides 
significant benefits and important health insurance reforms. However, 
the limited application of its provisions to the U.S. territories, its 
insufficient funding allocation of Federal funds to implement Health 
Insurance Exchange, and the Medicaid Program Expansion significantly 
limits Guam's opportunity to implement new healthcare innovations and 
provide coverage to the Guam's uninsured population. Because of the 
ACA's limitations in funding and the exemption of some of its most 
important provisions to the insular territories, Guam has decided that 
the health insurance exchange would not be beneficial to implement.
    Additionally, there are some disparities in the law that affects 
the U.S. Territories. Beginning in 2014, the Federal Government funded 
the states that implemented the ACA Medicaid Expansion provision for 
childless adults at 100 percent of the coverage costs of newly eligible 
individuals for the first 3 years; and phased down gradually to a 
permanent rate in 2020 at 90 percent FMAP. However, this is not 
applicable in Guam. Even though ACA increased the Territories FMAP by 5 
percent, this is not enough to alleviate the local budget shortfall.

    The ACA funding of $268 million partly alleviated the financial 
shortfall not only of Medicaid, but also of Guam's locally funded 
medical assistance program called Medically Indigent Program, where 
most of the COFAS citizens qualify. The additional funding provided by 
Section 2005 of ACA allowed Guam to shift the cost of COFAS emergency 
services to Medicaid. Though Guam obtained some additional funding of 
$268 million as a separate ACA provision to help alleviate its Medicaid 
funding shortfall, the 45 percent required local match provides 
hardship in fully expanding the program and utilizing the $268 million. 
Unfortunately, Guam would be unable to expend all the aforementioned 
ACA funding, which will expire in September 30, 2019.

    The U.S. territories administer their Medicaid Program under 
Federal regulations that are different from those applicable to the 
fifty (50) states and the District of Columbia. The U.S. territories' 
Federal matching rate is fixed in statute, unlike the statutory formula 
for U.S. states. For instance, Guam Medicaid's Federal Medical 
Assistance Percentage (FMAP) rate is 55 percent, the same as the other 
U.S. territories. However, the FMAP for the 50 states and DC varies by 
state's per capita income, which ranges from 50 percent to 83 percent. 
In addition, the Medicaid programs in the U.S. territories are subject 
to annual Federal capped funding, unlike the states and DC that are 
open-ended. Guam's regular Medicaid funding for FY 2019 is $17.97 
million dollars (administration and medical services payments), which 
increases yearly based on Medical Consumers Price Index. However, the 
$17.97 million dollars may not even be enough to last for one quarter 
of a fiscal year based on the trend of Guam's Medicaid program 
expenditures, which increases annually.

    Guam Medicaid's expenditure increased by 323 percent over the past 
decade (from $26,185,419 in FY 2009 to $110,876,286 in FY 2018) due to 
an increase in utilization, cost of medical treatment, new medical 
technology or mode of treatment, and the increasing cost of drugs. If 
ACA funding is not extended or replaced, the Guam Medicaid Program 
could be forced to decrease its income guideline and terminate more 
than 50 percent of its current eligible individuals. This will further 
increase the rate of the estimated uninsured population, which was 24.8 
percent (adults 18 years and above) of Guam population in 2017 (2017 
Guam Behavioral Risk Factor Surveillance Survey). Guam's residents who 
cannot afford the needed health care will delay getting care at an 
early stage of their illness until they are forced to go to the 
hospital emergency room. This will aggravate the operational and 
financial issues of the only government hospital even more, which 
continues to struggle because of EMTALA (Emergency Medical Treatment 
and Labor Act). This will continue to heighten the financial problem of 
Guam.

    Additionally, Guam and other territories received fewer Federal 
dollars for low-income healthcare program than the U.S. states due to 
long-standing regulations. According to Guam Department of Labor, the 
2010 Guam's per capita income was $12,864, which is lower than any of 
the U.S. states per capita income including Mississippi (one of the 
lowest per capita income in the United States). Mississippi's FMAP rate 
ranges between 73.05 to 84.86 from FY 2010 to FY 2019 (Kaiser Family 
Foundation FMAP Rate Listing) as compared to Guam Medicaid's FMAP rate 
of 55 percent and a funding cap. Thus, there is a huge disparity on the 
Medicaid Program funding distribution of Guam including the U.S. 
Territories in comparison to the U.S. states. Those differences on 
Medicaid rules contribute to the economic destabilization of Guam.

    Hence, Guam proposes to remove the expiration date of funding 
appropriation under Section 2005 and Section 1323 of ACA until the 
funding is fully expended; remove the Medicaid cap; and increase the 
FMAP of Guam and the other U.S. territories. The low-income U.S. 
citizens in Guam and other U.S. territories are no different from the 
U.S. citizens in the mainland and so their healthcare benefits and 
needs should neither be viewed, nor treated any differently.

    We applaud the Committee on Natural Resources for this oversight 
hearing and for taking the necessary steps to evaluate the needs of 
Guam, and we hope that the Committee will develop a solution to assist 
Guam's U.S. citizens.
    Thank you for the opportunity to provide Guam's written and oral 
testimonies on this important issue during the ``Insular Areas Medicaid 
Cliff'' hearing.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                 __
                                 

   Questions Submitted for the Record to Ms. Theresa Arcangel, Chief 
            Administrator, Division of Public Welfare, Guam
                   Questions Submitted by Rep. Sablan
    Question 1. If Congress finally treats the territories equitably 
and provides uncapped funding with Federal match determined in the same 
was as states, what would Guam do to ensure that Medicaid beneficiaries 
have access to comprehensive services comparable to what states must 
provide?

    Answer. The Guam Medicaid Program will conduct a survey to analyze 
medical providers practices and perceptions to determine the reasons 
for not participating under the program.
    Conduct a study to determine if Managed Care is more beneficial for 
Guam Medicaid Program.
    Encourage program participation by conducting an island-wide 
medical provider comprehensive informational outreach/conference or 
training.
    Structure the Medicaid Program payment methodology to a capitated 
(prepaid) model.
    Provide Medicaid incentives to providers if Medicaid patients seen 
is equal or more than 10 percent of their practice.

    1a. With the additional Federal funding, what specific investments 
could you make to improve eligibility and benefits over time?

    Answer. Guam Medicaid Program is in need of dramatic technology 
transformation. Currently, due to shortage of staff eligibility 
application processing is untimely, and influx of clients' inquiries on 
benefits and applications' follow-up is tremendous. Guam Medicaid 
program is going to leverage the use of digital technology to submit 
program application and inform or assist existing clients and new 
applicants regarding eligibility requirements, application status, 
scheduled appointments, etc. Thereby, improving client accessibility 
and customer service, streamlining application processing for a 
timelier receipt of benefits.
    Though there is a separate funding for MMIS (90/10), we would like 
to add that we plan to enhance our existing customized automated system 
(PHPRO) to meet the MITA (Medicaid Information Technology Architecture) 
requirements for a certified MMIS (Medicaid Management Information 
System) and to be able to comply with TMSIS (Transformed Medicaid 
Statistical Information System). The local funding that we can save 
from increasing the Guam FMAP can be utilized as the 10 percent local 
funding match to enhance our current system.

    Question 2. What improvements in your healthcare infrastructure 
would be needed?

    2a. Would dedicated up-front funding be needed to make those 
changes?

    Answer. There is a need for a tertiary care facility and a 
hospital-based outpatient clinic facility to properly manage patients' 
condition and reduce hospital admissions. The only Government of Guam 
hospital is not well-equipped to treat critical patients. Due to TEFRA 
regulation the hospital Medicare and Medicaid reimbursement is very low 
to support and sustain the facility operation.
    A dedicated up-front funding is needed to physically improve the 
facility that will make care accessible with trained staff and 
healthcare professionals. Additionally, funding is needed to procure 
new modernized medical equipment, medications, and other supplies.

    Question 3. Would provider payments have to be increased and to 
what extent?

    Answer. The healthcare cost in Guam is higher compared to the U.S. 
mainland because of its geographic location, lack of tertiary 
facilities, and the limited number of healthcare professionals 
including specialists. An increase in provider payments would be 
beneficial in order to attract more provider participation and at the 
same time attract providers from the U.S. mainland to come and stay in 
Guam. If CMS or the regulation will allow through a state plan 
amendment to increase the provider reimbursement beyond the Medicare 
Upper Payment Limit (UPL) up to 120 percent to 150 percent depending on 
providers specialty that would be helpful to ensure that our recipients 
have a medical home.

    Question 4. Are there particular Medicaid eligibility, benefit or 
other requirements you wouldn't be able to meet within a reasonable 
time due to territory-specific limitations, and if so, what changes 
could Guam make to ensure residents get high quality health care in 
other ways that meets their needs?

    Answer. No, provided funding is available.

    Question 5. Overall, what do you see as the necessary steps to 
better ensure access to quality, comprehensive care for Guam residents 
and what would be a reasonable timeline to reach such a goal?

    Answer. Steps to ensure access to quality comprehensive care for 
Guam residents include: recruitment and retention of more physicians 
and specialists from the U.S. mainland; increasing Medicaid provider 
participation; and creating an alternative payment models for a more 
coordinated primary care approach.
    Timeline would be 5 to 6 years (depending on the recruitment and 
retention of physicians, specialists, and other healthcare 
professionals).

    Question 6. What will you have to cut if you go off the cliff?

    Answer. Medicaid would be forced to terminate 50 percent or more 
than 23,000 eligibles and remove some of the optional benefits such as 
dental services, some prescription drugs, clinic services, optometry 
services and eyeglasses, etc.

    Question 7. What will be the impact on individuals and the 
healthcare delivery system in the territory, when Obamacare funding 
ends this year?

    Answer. Currently, there are around 43,000 to 44,000 eligibles 
under Medicaid program. If Obamacare funding to the U.S. territories is 
not extended or replaced, Guam would be forced to reduced its current 
Guam Medicaid Poverty Level income guideline, which is 30 percent to 31 
percent below the Federal Poverty Level for 48 contiguous states and 
DC, to terminate 50 percent or more than 23,000 of its current 
eligibles. This will further increase the estimated 24.8 percent 
uninsured population in Guam. The two hospitals (Government and 
private) in Guam will be inundated with a lot of self-pay patients 
because the facilities would not be able to refuse any patient that 
present to their door due to EMTALA and would eventually suffer huge 
losses and may end up filing bankruptcy.

               Questions Submitted by Rep. Gonzalez-Colon
    Question 1. You testified that Guam will be unable to spent the ACA 
funds before they are set to expire. Why is that? In addition to 
extending their expiration date, what would Congress need to do to help 
Guam spend these funds in healthcare services to its residents?

    Answer. Due to Guam's limited financial resources, the Government 
is unable to guarantee the 45 percent required local matching funds to 
drawdown the Federal grant awards. Additionally, although Guam Medicaid 
expanded the program to include the childless adults to reduce the 
uninsured population, which was 24.8 percent of Guam population in 
2017, the income guideline was reduced by 30 percent to 31 percent 
(based on household size) from the existing 100 percent Federal Poverty 
Level for the entire Medicaid population except the program for Old Age 
Assistance and Assistance to Permanently and Totally Disabled 
individuals because of the required 45 percent local match.
    Congress needs to increase the FMAP to 100 percent and extend the 
expiration date of ACA Section 2005 and Section 1323 to help Guam spend 
all the funds and provide quality healthcare services to the 
disadvantage population in Guam.

    Question 2. How will the overall healthcare system and the non-
Medicaid population in Guam be affected if Medicaid funding is not 
increased for FY 2020?

    Answer. If Medicaid Funding is not increased, Guam Medicaid would 
be forced to terminate 50 percent or more than 23,000 of its eligibles 
by reducing the income guideline, which will further increase the 
uninsured population in Guam, or remove some of the optional services 
such as prescription and dental services. Guam's residents including 
the non-Medicaid population (COFAS) who cannot afford the needed health 
care will delay getting care at an early stage of their illness until 
they are forced to go to the hospital emergency room. This will further 
aggravate the operational and financial issues of the only government 
hospital even more, which is already struggling because of EMTALA 
(Emergency Medical Treatment and Labor Act). More providers will refuse 
to accept Medicaid patients and so the two Guam Federally Qualified 
Health Centers (Northern and Southern Region Community Health Centers) 
with limited healthcare practitioners will be inundated with patients. 
This will continue to heighten the financial problem of Guam.

    Question 3. Currently, the Social Security Act provides for capped 
Medicaid funding for the U.S. Territories. For FY 2017, the cap in Guam 
was $17.02 million. How much did the Medicaid program benefits actually 
cost?

    Answer. Guam Medicaid Program is a 100 percent fee-for-service 
delivery system. All mandatory and most of the optional services are 
covered. The income guideline is below the 100 percent of the Federal 
Poverty Level (FPL) and so there are no deductibles, nor co-payments 
except for minimal co-pays for childless adults.
    In FY 2017, Guam Medicaid paid out $108.6 million dollars to 
medical providers for services rendered to 43,749 program eligibles. 
The FY 2017 total IBNR (Incurred But Not Reported) expenditure was 
$19.2 million dollars. The yearly expenditure is controlled by the 
budget appropriation and Guam's revenue.

    Question 4. Could you please provide the Committee actual examples 
of how the current statutory FMAP of 55 percent affects the provision 
of health care in Guam?

    Answer. The required 45 percent local match is a financial barrier 
to the provision of quality healthcare services on Guam. The Guam 
Department of Administration reimburses the providers based on cash-
flow. The providers have to wait 2 to 4 months or more depending on the 
revenue to receive payments for medical services rendered. As a result, 
providers on- and off-island refuse to accept Medicaid patients. Thus, 
patients requiring treatment on island are forced to seek treatment at 
the hospital emergency room. Additionally, patients that need to be 
transported to an off-island facility (services unavailable on island) 
have to wait until the off-island provider receives payment and also 
agrees to accept them. Meanwhile, the patient's condition worsens 
because the needed immediate treatment is unavailable. Thus, with a 
debilitating medical condition, this translates to an even higher 
healthcare cost.
    Furthermore, Guam Medicaid program's lack of prompt payment and its 
low reimbursement rate have cascading effects on Guam's only Government 
hospital in that GMH is unable to pay vendors timely for medication, 
laboratory supplies, facilities and maintenance, etc. Without the 
financial resources, the Government hospital cannot improve its 
facility and services, which in turn affects the quality of patient 
care.

                                 ______
                                 

    Vice Chair Sablan. Wow. Thank you, Ms. Arcangel. Perfect 
timing again. I appreciate your coming here and testifying.
    I would like to now recognize Ms. Michal Rhymer-Browne.
    Did I get that right, Ms. Browne?
    Ms. Rhymer-Browne. ``Michal.''
    Vice Chair Sablan. All right. You are recognized for 5 
minutes.

STATEMENT OF MICHAL RHYMER-BROWNE, ASSISTANT COMMISSIONER, U.S. 
          VIRGIN ISLANDS DEPARTMENT OF HUMAN SERVICES

    Ms. Rhymer-Browne. Chairman Sablan, Ranking Member Bishop, 
and members of the Committee, thank you for the opportunity to 
provide testimony on the significant impacts to our healthcare 
system and the people of the U.S. Virgin Islands in light of 
the impending Medicaid fiscal funding cliff, which will impact 
us beginning October 2019.
    I am Michal Rhymer-Browne, Assistant Commissioner of the 
Virgin Islands Department of Human Services, and I have direct 
oversight of the Medicaid division. Accompanying me today is 
Mr. Gary Smith, our Virgin Islands Medicaid Director.
    I must also thank Kimberley Causey-Gomez, Commissioner 
Designee of the VI Department of Human Services, who has 
extended to us her complete support as we prepared to come to 
this important Committee meeting today.
    On behalf of the Honorable Governor Albert Bryan, Jr., and 
the more than 100,000 American citizens living in the U.S. 
Virgin Islands, we bring you greetings and, as we say in the 
Virgin Islands, a pleasant good morning.
    As a people, we want to convey our heartfelt gratitude, 
appreciation, and thanks for the concern and the support that 
you and your colleagues in Congress have provided as we 
continue to recover from the unprecedented damages caused by 
Hurricanes Irma and Maria, two Category 5 hurricanes which 
ravaged the Virgin Islands in September 2017.
    We are a resilient people, but my testimony today is truly 
intended to actualize the empathy. I appear before you today to 
request your continued urgent support to address the critical 
Federal and local funding crisis we are facing in our 
healthcare system.
    On September 30, 2019, by that date, we are currently 
projecting we will have fully expended the additional $142.5 
million in Federal medical funding provided under the BBA.
    Members, with no exaggeration, the Congress, together with 
the Administration, must act by September 30, 2019, to avert 
catastrophic damage to our healthcare system. At that point, 
the Federal Medicaid matching rate will revert back to the 
statutorily mandated 55 percent matching rate for most of our 
Medicaid program and the Federal Medicaid funding cap of 
approximately $18.8 million.
    This is not sustainable given the current state of our 
Medicaid program. If the Virgin Islands only receives the 
statutory cap amount of $18.7 million at the 55 percent rate, 
that funding is projected to only cover 26 percent of the 
Federal funding needed during the fiscal year.
    We believe that there needs to be a permanent statutory fix 
that addresses the unfair and disparate treatment all 
territories face in their Medicaid programs along the lines of 
H.R. 1354, the Territories Health Equity Act, introduced on 
February 25, 2019, by our Delegate, Stacey Plaskett.
    We are requesting that Congress and the Administration work 
with us to support the following 5-year Medicaid funding 
request.
    We are requesting a 100 percent Federal Medicaid matching 
rate be extended to the U.S. Virgin Islands for 2 additional 
Federal fiscal years. And we are currently projecting that at 
least $251.5 million in additional Federal Medicaid funding be 
provided during this period, as was done in the BBA 2018.
    Second, we are requesting at least an additional $377 
million in Federal Medicaid funding based upon our current 
projection, in lieu of our annual Medicaid cap, be provided to 
the U.S. Virgin Islands.
    Unless the Congress and the Administration act to support 
the two requests I have outlined above before September 30, 
2019, we will be faced with potentially catastrophic damage to 
our Medicaid program and our healthcare system, to include 
having to remove upwards of 15,000 individuals from our 
Medicaid program who still need healthcare services and having 
to deny men, women, and, children and infants who need to be 
transferred to the U.S. mainland for care.
    We want to thank you for the opportunity for being here 
today, and we strongly urge that we are considered for 
additional funding going forth in the next fiscal years.
    Thank you very much.

    [The prepared statement of Ms. Rhymer-Browne follows:]
  Prepared Statement of Michal Rhymer-Browne, Assistant Commissioner, 
            U.S. Virgin Islands Department of Human Services
    Chairman Grijalva, Ranking Member Bishop, and members of the 
Committee: Thank you for the opportunity to provide testimony on the 
significant impacts to our healthcare system and the people of the U.S. 
Virgin Islands, in light of the impending Medicaid fiscal funding cliff 
which will impact us beginning October 2019. I am Michal Rhymer-Browne, 
Assistant Commissioner of the Virgin Islands Department of Human 
Services, and I have direct oversight of the Medicaid Division. 
Accompanying me today is Mr. Gary Smith, our Virgin Islands Medicaid 
Director. I must also thank Kimberley Causey-Gomez, Commissioner 
Designee of the V.I. Department of Human Services, who has extended to 
us her complete support as we prepared to come to this important 
committee meeting today.
    On behalf of the Honorable Governor Albert Bryan, Jr. and the more 
than 100,000 American citizens living in the U.S. Virgin Islands, we 
bring you greetings, and as we say in the Virgin Islands, ``a pleasant 
good morning.'' As a people, we want to convey our heartfelt gratitude, 
appreciation, and thanks for the concern and the support that you and 
your colleagues in Congress have provided as we continue to recover 
from the unprecedented damage caused by Hurricanes Irma and Maria--two 
Category 5 Hurricanes, which ravaged the Virgin Islands in September 
2017. We are a resilient people, but my testimony today is truly 
intended to actualize the empathy.
    I appear before you today to request your continued urgent support 
to address the critical Federal and local funding crisis we are facing 
in our healthcare system on September 30, 2019. By that date we are 
currently projecting we will have fully expended the additional $142.5 
million in Federal Medicaid funding provided under the Bipartisan 
Budget Act of 2018 (BBA) and the 100 percent Federal matching rate will 
expire. Along with this, we are projecting we will lose access to the 
nearly $158.9 million in remaining Federal funding provided under the 
Affordable Care Act (ACA). It is only through this additional Federal 
funding and the 100 percent matching rate that we have been able to 
sustain our healthcare system during these trying times.
    Members, with no exaggeration, the Congress, together with the 
Administration, must act by September 30, 2019, to avert catastrophic 
damage to our healthcare system, if left on its current course. At that 
point, the Federal Medicaid matching rate will revert back to the 
statutorily mandated 55 percent matching rate for most of our Medicaid 
program and the Federal Medicaid funding cap of approximately $18.8 
million. This is not sustainable, given the current state of our 
Medicaid program. If the Virgin Islands only receives the statutory cap 
amount of $18.7 million at the 55 percent matching rate, that funding 
is projected to only cover 26 percent (barely one-quarter) of the 
Federal funding needed during the fiscal year for the Medicaid 
expenditures supported by that cap. This is the Medicaid ``fiscal 
cliff'' that we have been warning about for some time. Once the cap is 
exhausted, the Virgin Islands would have to fully make up the deficit 
in Federal Medicaid funding, as it has in the past, and pay for its 
Medicaid services with 100 percent local funding. That local funding is 
not available, and our citizens will not be able to receive the 
essential health care they need, and our already fragile healthcare 
infrastructure would be further destabilized, and its recovery would be 
further delayed.

    We believe that there needs to be a permanent statutory fix that 
addresses the unfair and disparate treatment all Territories face in 
their Medicaid programs along the lines of H.R. 1354, ``The Territories 
Health Equity Act,'' introduced on February 25, 2019, by our Delegate 
Stacey Plaskett. However, we understand from various informal 
discussions with congressional and Administration staff that such a 
permanent fix may not be possible at this time. Therefore, I am 
requesting that the Congress and the Administration work with us to 
support the following 5-year (Fiscal Years 2020-2024) Medicaid funding 
request:

  1.  100 percent Federal Medicaid matching rate be extended to the 
            U.S. Virgin Islands for two additional Federal fiscal years 
            (October 1, 2019 through September 30, 2021) and we are 
            currently projecting that at least $238 million in 
            additional Federal Medicaid funding be provided during this 
            period, as was done in the BBA 2018. This assumes that 
            other Federal requirements and funding under the Medicaid 
            program remain in place during this period.

  2.  At least an additional $377 million in Federal Medicaid funding 
            based upon our current projections, in lieu of our annual 
            Medicaid cap, be provided to the U.S. Virgin Islands at an 
            83 percent Federal matching rate for three additional 
            Federal fiscal years (October 1, 2021 through September 30, 
            2024). This assumes that other Federal matching 
            requirements and funding under the Medicaid program remain 
            in place during this period for areas such as CHIP 
            allotments, MMIS, Eligibility and Enrollment, and Medicare 
            Part D Co-insurance and deductibles.

    As we reiterated in previous meetings with the Administration, and 
in testimony before Congress, healthcare funding in the Virgin Islands 
was under great stress even before the two hurricanes. Under Medicaid, 
an arbitrarily low Federal matching rate (FMAP) and a correspondingly 
high local matching requirement added to the limited capped Federal 
funding have imposed severe and unsustainable financial demands on the 
Territory. We have had to contribute a vastly disproportionate share of 
our own limited local funding for our Medicaid Program compared to that 
of the states.
    We are particularly grateful for the additional Federal funding 
provided under the ACA and the temporary disaster-related waiver of the 
local match and additional Federal funding provided through the BBA 
2018. These actions have allowed us to more than double our Medicaid 
program to over 27,000 individuals from approximately 12,000 
individuals since 2012, increase total expenditures under our Medicaid 
program to over $120.5 million, provide much needed healthcare services 
to our people, and allowed our Medicaid program to continue to operate 
during these trying times.

    However, unless the Congress and the Administration act to support 
the two requests I have outlined above before September 30, 2019, the 
U.S. Virgin Islands will be faced with potentially catastrophic damage 
to our Medicaid program and our healthcare system as detailed below:

     The U.S. Virgin Islands will have to remove upwards of 
            15,000 individuals from our Medicaid program who still need 
            healthcare services.

     We will not be able to continue the outreach to the 
            community to bring into the Medicaid program those 15,000 
            to 20,000 additional Virgin Islanders who we believe are 
            eligible for the program currently but not yet enrolled.

     The U.S. Virgin Islands will have to pay for any needed 
            healthcare services with all local funds that are not 
            available in our budget at this time.

     We will face further delays in rebuilding our hospitals 
            and clinics and other healthcare infrastructure as funds 
            will have to be diverted to pay for needed ongoing day-to-
            day healthcare services.

     The U.S. Virgin Islands will have to continue to evacuate 
            even more patients to the mainland, at even further costs 
            to us, which we are unable to support with local funding as 
            delays in the rebuilding of our healthcare infrastructure 
            continue.

     We will be faced with losing more and more of our medical 
            providers if we are unable to pay and retain them. This 
            will be compounded by our inability to attract new medical 
            professionals willing to come and work in the islands when 
            we are facing such a critical financial crisis in our 
            healthcare system and they are concerned with whether they 
            will be able to be paid.

     We will not be able to expand much needed long-term care 
            support services to our elderly and disabled population--
            our most fragile population--as we have no certified 
            nursing homes in the U.S. Virgin Islands and such care has 
            to be provided mainly in the community.

     Finally, the U.S. Virgin Islands is facing a mental health 
            and behavioral health crisis as declared by Governor Albert 
            Bryan, Jr. in March 2019 as a result of the lack of 
            providers and facilities to address the demand for these 
            services in the territory, and we will not have access to 
            needed Federal funds to help address these critical issues.

    We are also keenly aware that with the added Federal support being 
provided by our Federal partners comes additional responsibility on our 
part to utilize and oversee that support in an efficient and effective 
manner and with full accountability. Toward that end, the U.S. Virgin 
Islands has moved forth with purposeful actions, and we are 
implementing various activities, as outlined below which will ensure 
that this accountability continues:

     We implemented the first ever Territory Medicaid 
            Management Information System (MMIS) in 2013.

     The U.S. Virgin Islands implemented a Medicaid MAGI 
            compliant online Medicaid eligibility system in July 2017, 
            called the Virgin Island Benefit Eligibility System 
            (VIBES). This system will be expanded beginning later this 
            year to complete integration with our other Federal 
            programs like SNAP and TANF.

     We implemented a Medicaid Fraud Control Unit (MFCU) in 
            2018.

     The U.S. Virgin Islands also implemented the Transformed 
            Medicaid Statistical Information System (TMSIS) with CMS 
            through our Medicaid Management Information System (MMIS) 
            in 2018 to ensure detailed statistical and financial 
            reporting be provided to the Centers for Medicare & 
            Medicaid Services (CMS).

     We will shortly be completing cost report audit 
            reconciliations for our two hospitals and two Federally 
            Qualified Health Centers (FQHCs) to bring those audits and 
            reconciliations current.

     The U.S. Virgin Islands will shortly begin the audit and 
            reconciliation process for our Department of Health 
            Clinics.

     We recently completed the CMS Medicaid Program Integrity 
            (PI) Review.

     We also executed a memorandum of understanding with CMS to 
            receive technical assistance in additional Medicaid PI 
            activities and Medicaid data analytics.

     The U.S. Virgin Islands is working with HHS to finalize an 
            advance planning document which will provide upwards of $15 
            million to implement a territory wide health information 
            exchange system.

    We believe that all of these activities indicate our strong ongoing 
commitment to ensuring the integrity of our programs and our 
responsible stewardship of the Federal Medicaid funding that we 
receive. The U.S. Virgin Islands is also committed to the ongoing 
improvement of program integrity, transparency, and efficiency and the 
Federal funding outlined above is needed to continue these efforts and 
maintain our programs.
    For the forgoing reasons, I strongly urge the Congress, in 
conjunction with the Administration, to promptly act on this matter of 
critical urgency to the people of the U.S. Virgin Islands. The 
enactment of our proposal will serve to enable us to continue to 
provide urgent healthcare services to our citizens while we work to 
rebuild our healthcare infrastructure and economic viability, and will 
serve to provide a temporary ``fix'' to the disparate arbitrary, and 
unfair treatment that the Territories continue to receive under the 
Medicaid Program.
    Given the very short time remaining in this fiscal year, and the 
need for the U.S. Virgin Islands and other Territories to be able to 
reliably and predictably plan their upcoming internal Medicaid program 
changes and budget request, I ask that you address this issue in the 
next available legislative vehicle.
    I appreciate the opportunity to share my views with you. We look 
forward to working together with you to address the immediate issue of 
the impending Medicaid fiscal funding cliff and we look forward to 
collaborating with you on achieving a permanent solution that can 
finally eliminate the unequal treatment of Virgin Islands and the other 
Territories under the Medicaid Program and provide parity for Medicaid 
enrollees and the full benefits of the Federal Medicaid program for our 
citizens and our providers.
    Thank you for your consideration and attention to these urgent 
matters. I am honored to be here and open to answer any questions you 
may have, along with Gary Smith, our U.S. Virgin Islands Medicaid 
Director.

                                 ______
                                 

 Questions Submitted for the Record to Michal Rhymer-Browne, Assistant 
     Commissioner, U.S. Virgin Islands Department of Human Services
                   Questions Submitted by Rep. Sablan
    Question 1. If Congress finally treats the territories equitably 
and provides uncapped funding with Federal match determined in the same 
was as states, what would the U.S. Virgin Islands do to ensure that 
Medicaid beneficiaries have access to comprehensive services comparable 
to what states must provide?

    1a. With the additional Federal funding, what specific investments 
could you make to improve eligibility and benefits over time?

    Answer. No response.

    Question 2. What improvements in your healthcare infrastructure 
would be needed?

    2a. Would dedicated up-front funding be needed to make those 
changes?

    Answer. The immediate priority is to restore on-island services at 
least to the level available before the storms.

     We need to rebuild the two hospitals in the Virgin Islands 
            to be able to provide the full range of on-island inpatient 
            services and other critical care hospital services which 
            are currently very limited and result in our having to 
            evacuate upwards of 20 persons per month to Puerto Rico or 
            the mainland for these critical services at a considerable 
            extra cost to our very limited budget.

     We need to rebuild our Department of Health public clinic 
            system which was severely impacted by the storms and has 
            resulted in a reduced level of critical primary care for 
            our residents.

     We are in critical need of at least two certified nursing 
            facilities on the island. We need to repair and upgrade our 
            current Herbert Grigg Home for the Aged on St. Croix so 
            that it meets Federal reimbursement standards. Similarly, 
            we need to acquire, repair, and upgrade the other Home for 
            the Aged at Seaview so it meets Federal reimbursement 
            standards and is operated by the Virgin Islands.

     We need to address the critical need for behavioral health 
            treatment on the island through the development of 
            inpatient and outpatient treatment facilities that are 
            federally reimbursable.

     Finally, even as we work to rebuild and improve our 
            institutional infrastructures on the islands we need to 
            take this opportunity to emulate the approach taken by 
            Medicaid Programs on the mainland to provide community 
            based care for persons with disabilities and mental 
            illnesses.

     We believe this dual approach of structural improvements 
            and community based service improvements is necessary to 
            ensure that our citizens have access to comprehensive care 
            and services comparable to the mainland.

    We believe that dedicated funding for these improvements is perhaps 
the only way to make these improvements possible as the Virgin Islands 
is not in a financial position to pay for and complete this on our own. 
Further, dedicated funding must be outside the capped Medicaid funding 
we need to have for providing the basic ongoing healthcare services 
under our Medicaid program.

    Question 3. Would provider payments have to be increased and to 
what extent?

    Answer.

     Currently, under our Medicaid program we pay our hospitals 
            and other public providers at the full Medicaid cost of 
            providing services to Medicaid patients. This is the 
            maximum that can be paid to public providers.

     What we need for Congress to provide through legislation 
            is for our hospitals to be able to receive Medicare and 
            Medicaid disproportionate share hospital (DSH) payments for 
            uncompensated care in our hospitals as is provided to 
            hospitals on the mainland. Our hospitals are precisely the 
            types of facilities that the DSH program was intended to 
            support.

     Additionally, we need for Congress to provide through 
            legislation that CMS be directed to work with the Virgin 
            Islands hospitals to update the Medicare base period for 
            our TEFRA hospital reimbursement system. The base periods 
            for Medicare have not been updated since the early 1990s 
            and results in artificially low Medicare reimbursements 
            rates that do not support the cost for the services being 
            provided to Medicare eligibles.

     With respect to community non-public providers the Virgin 
            Islands pays those providers (including nurses) for 
            Medicaid services at the established Medicare rates for 
            those services. The problem with respect to those providers 
            is that given the costs of relocating and living in the 
            Virgin Islands it is difficult to attract providers and 
            other specialists to work here. We would ask that the 
            Congress provide through legislation that we be allowed to 
            pay providers who work in the Virgin Islands a supplemental 
            add-on to the Medicare rates that we pay to offset the 
            additional costs here and make it attractive for providers 
            to relocate and stay here in the Virgin Islands.

    Question 4. Are there particular Medicaid eligibility, benefit or 
other requirements you wouldn't be able to meet within a reasonable 
time due to territory-specific limitations, and if so, what changes 
could the U.S. Virgin Islands make to ensure residents get high quality 
health care in other ways that meets their needs?

    Answer.

     We ask that the Congress modify Section 1902(j) of the 
            Social Security Act to add the Virgin Islands to this 
            provision of the law. This would allow the Secretary to 
            waive certain aspects of Title XIX to provide the Virgin 
            Islands with greater flexibilities in the eligibility, 
            reimbursement, and coverage under the Medicaid program.

     As a result of the significant matching requirement (45 
            percent for most of our program) we have been unable to 
            come up with the local share necessary to fully enroll all 
            of the potentially eligible Virgin Islanders into the 
            Medicaid Program. We estimate that there may be 15,000 to 
            20,000 eligibles who are not yet enrolled. Since our last 
            expansion in early 2017 we have proceeded slowly because of 
            the local match requirement and our financial limitations 
            of our budget. So, treating the VI as a state for matching 
            purposes would enable to expand our program eligibility.

     Similarly, as we move to expand our community based 
            services and reintroduce nursing facility services and 
            cancer treatment services on the island to meet the needs 
            of our population we would be able to do this within our 
            budget limitations if the matching rate were computed like 
            the states and if the cap on our program funding was 
            removed.

    Question 5. Overall, what do you see as the necessary steps to 
better ensure access to quality, comprehensive care for U.S. Virgin 
Islands residents and what would be a reasonable timeline to reach such 
a goal?

    Answer.

     Access to quality of care will be a significant struggle 
            in the short term (3-5 years) because of the infrastructure 
            issues discussed already above. Without fully functioning 
            hospitals, dialysis, and cancer treatment facilities we are 
            faced with providing limited services on island and having 
            to rely on higher cost evacuation to the Puerto Rico and 
            the Mainland for critical health services.

     Additionally, we currently do not have certified nursing 
            facilities and those facilities (old age homes) which are 
            currently providing care to our disabled and frail elderly 
            were severely damaged by the hurricanes. These facilities 
            first have to be repaired from the storm damage and they 
            then have to be brought up to Federal code. This will 
            require a significant investment of up-front funding before 
            these facilities can provide quality care and receive 
            Federal reimbursement.

     We face a shortage of specialty and other physicians and 
            nurses to provide quality of care. We need to be able to 
            pay these types of providers at higher rates or with some 
            type of supplemental payment in order to be able to attract 
            providers to relocate to the Virgin Islands and to remain 
            here once they are here. Without being able to offer such 
            financial advantages and incentives we will continue to 
            face a shortage of service providers and this will continue 
            to negatively impact our access to quality care.
     We have very limited behavioral treatment on the island as 
            a result of the lack of providers and facilities. Building 
            new treatment centers or converting current facilities will 
            take time and money. Additionally, attracting service 
            providers in this area will face all of the problems 
            previously discussed for attracting and retaining 
            providers.

    Question 6. What will you have to cut if you go off the cliff?

    Answer. Unless the Congress and the Administration act before 
September 30, 2019, the U.S. Virgin Islands will be faced with 
potentially catastrophic damage to our Medicaid program and our 
healthcare system as detailed below:

     The U.S. Virgin Islands will have to remove upwards of 
            15,000 individuals from our Medicaid program who still need 
            healthcare services.

     We will not be able to continue the outreach to the 
            community to bring into the Medicaid program those 15,000 
            to 20,000 additional Virgin Islanders who we believe are 
            eligible for the program currently but not yet enrolled.

     The U.S. Virgin Islands will have to pay for any needed 
            healthcare services with all local funds that are not 
            available in our budget at this time.

     We will face further delays in rebuilding our hospitals 
            and clinics and other healthcare infrastructure as funds 
            will have to be diverted to pay for needed ongoing day-to-
            day healthcare services.

     The U.S. Virgin Islands will have to continue to evacuate 
            even more patients to the mainland, at even further costs 
            to us, which we are unable to support with local funding as 
            delays in the rebuilding of our healthcare infrastructure 
            continue. However, when we enter the new fiscal year and 
            return to the capped Federal funding amount of $18.7 
            million the U.S. Virgin Islands will have to severely limit 
            the number of transfers to the U.S. mainland hospitals of 
            very ill and injured Medicaid members who cannot get the 
            necessary medical care (e.g., trauma cases, selected 
            orthopedic surgeries, cancer treatments, and services for 
            severe cardiological issues). The U.S. Virgin Islands would 
            simply be unable to afford the expenses associated with 
            airlifting the patients to the mainland and paying for 
            their medical care and rehabilitation services.

     We will be faced with losing more and more of our medical 
            providers if we are unable to pay and retain them. This 
            will be compounded by our inability to attract new medical 
            professionals willing to come and work in the islands when 
            we are facing such a critical financial crisis in our 
            healthcare system and they are concerned with whether they 
            will be able to be paid.

     We will not be able to expand much needed long-term care 
            support services to our elderly and disabled population--
            our most fragile population--as we have no certified 
            nursing homes in the U.S. Virgin Islands and such care has 
            to be provided mainly in the community.

    Question 7. What will be the impact on individuals and the 
healthcare delivery system in the territory, when Obamacare funding 
ends this year?

    Answer.

     The impact will be that a decade of progress in expanding 
            enrollment and access to services will come to an end and 
            things will revert to the situation prior to 2011 when the 
            funds became available.

     All of the impacts outlined above related to the fiscal 
            cliff will be the necessary result of reverting to Medicaid 
            current law for the Virgin Islands--a capped program with a 
            55 percent matching rate.

     The stark reality for the Virgin Islands is that if we 
            revert to the annual cap of $18.7 million in FY 2020 we 
            will be at least $53.3 million short in the Federal funding 
            we need for those services covered by that cap in FY 2020. 
            We cannot make that up with local funding. That shortfall 
            only increases in the out years as the program grows and 
            the need for Federal matching funds increases.

                                 ______
                                 

    Vice Chair Sablan. Wow. Thank you. Such wonderful 
witnesses. I love you all.
    Thank you again, Ms. Rhymer-Browne.
    I would like to, at this time, recognize Ms. Sandra King 
Young. This is not her first appearance, she has been here 
before.
    Ms. Young, you have 5 minutes, please.

  STATEMENT OF SANDRA KING YOUNG, MEDICAID DIRECTOR, AMERICAN 
                        SAMOA GOVERNMENT

    Ms. Young. Good morning, Chairman Sablan, Ranking Member 
Gonzalez-Colon, and honorable members of the Committee. I bring 
to you greetings from our governor, Lolo Matalasi Moliga, and 
our lieutenant governor, Lemanu Peleti Mauga. And thank you for 
this important hearing to provide information on the impact of 
the September expiration of the Medicaid funding for American 
Samoa and our sister territories.
    My name is Sandra King Young, Medicaid Director for 
American Samoa. My written testimony submitted for the record 
to the Committee outlines the devastating impact of the loss of 
the ACA funds that American Samoa has not been able to spend 
and the reasons why, so I will not reiterate those points here.
    At the outset, I want to point out again that, for American 
Samoa, Medicaid is our only health insurance plan available to 
the public at large. Insurance carriers have historically 
declined to provide health insurance to our people because we 
are a high-risk and very sick population with one of the 
highest rates of obesity and non-communicable diseases in the 
world.
    And we are a very poor community. Without Medicaid, our 
people will have no health insurance coverage, and our 
healthcare system would face an absolute collapse and 
insolvency. Medicaid is our people's and our territory's 
lifeline for medical care services.
    As we have repeatedly shared, the two biggest challenges 
with our Medicaid program are our government's inability to 
fund the local match requirement for the Medicaid program. 
Second, the statutory capped annual funding, or block grants, 
placed on the territories prohibits us from fully executing the 
benefits requirements under our state plan and the Social 
Security Act.
    Because we have exhausted our local match for this fiscal 
year, as of today, our Medicaid agency has suspended all 
referrals of any new off-island patients to New Zealand. We 
have suspended any new patients needing wheelchairs or other 
durable medical equipment, including prosthetics. And we are 
cutting back on co-pay assistance to our Medicaid dual-eligible 
population.
    Our hospital, however, continues to receive its Medicaid 
funding under the ACA because it does not need local-match 
dollars under its certified public expenditure payment method.
    Oftentimes, when we try to explain why we need the relief 
from local match and why we cannot spend all of ACA Medicaid 
dollars, I think people nod their heads, but they don't really 
know what that means to a patient's life, to their family, or 
to our community.
    The real-life stories of life-changing impact on patients 
because of the availability of the ACA funding justifies an 
increase in the territory's block grant. The devastating life-
and-death outcomes that we face with the potential loss of this 
ACA funding without a resolution justifies an increase in the 
territory's Medicaid funding block grants.
    Last year, I had to make a difficult decision on whether we 
were going to refer a child, an infant of 6 months, to New 
Zealand. Severely disabled, cerebral palsy. We got the quote 
back from New Zealand that the child, ethically, they must 
accept, but prognosis, they don't think the child will survive 
beyond 12 months. And in that 12 months, they would have to 
care for the child, because we can't care for the child on-
island. But the child will likely die anyway. And it would cost 
us a million dollars, if not more.
    Our government only provided us $2 million in local match 
to do the off-island referral. We made a difficult decision to 
deny the referral of this child because we didn't have the 
local match. A few weeks later, the infant died.
    Currently, we have two patients in New Zealand. One is a 
middle-aged father who was sent for neurological surgery on his 
back. This week, we got word that the man is severely ill and 
requires triple bypass heart surgery, at a cost of nearly 
$100,000. And I had to deny that because we don't have the 
local match. And just yesterday, I had to reverse my decision, 
because the family is devastated. And we have to deal with that 
now, on how we are going to make that payment when the invoice 
arrives in our office.
    We have one patient in New Zealand, a young man with his 
whole life ahead of him. He had an on-the-job injury, a pile of 
plywood fell on his back and broke his neck. And he had to be 
air-ambulanced to New Zealand. And last week, New Zealand 
requested if he could stay 2 more months to do a sleep study to 
see how well he could survive if he returns home. Again, we had 
to deny the referral, but, again, this week, we reversed our 
decision because we have to deal with that. New Zealand won't 
discharge the patient. Ethically, they won't.
    Why are we sending our patients to New Zealand? Because we 
have a block grant, and we can't afford the local match. We 
cannot afford the Medicare costs in the United States.
    For Congress to fail to increase the territories' annual 
Medicaid block grant and to provide a more fair FMAP for the 
territories in light of the knowledge of the consequences and 
the loss of lives and potentially crippling physical and 
cognitive outcomes for our people because of insufficient 
medical funding is morally unconscionable. We need your help. 
Only Congress can solve these Medicaid challenges for the 
territories.
    Thank you, Mr. Chairman and the Committee, for this 
opportunity, and thank you for holding this hearing.

    [The prepared statement of Ms. Young follows:]
 Prepared Statement of Sandra King Young, Medicaid Director, American 
                                 Samoa
    Good morning Chairman Sablan, Ranking Member Bishop, and members of 
the Committee. I bring to you greetings from our Governor Lolo Matalasi 
Moliga and our Lt. Governor Lemanu Peleti Mauga. On behalf of our 
government and our people, thank you for the opportunity to appear 
before you today to provide information on the impact of the September 
expiration of the Medicaid funding for American Samoa and the other 
territories contained in the Patient Protection and Affordable Care Act 
(ACA) of 2011. I'd like to recognize that today with me, is our 
Medicaid Finance Analyst, Mrs. Faiilagi Poufa-Faiai.
    Since Governor Lolo Matalasi Moliga and Lt. Governor Lemanu Peleti 
Mauga came into office in January 2013, we have been very concerned 
about the need to address the expiration of the ACA funds. Over the 
past 6 years, we have consistently shared our concerns with the 
Administration through the Centers for Medicare and Medicaid Services 
as well as Congress to either extend the availability of the ACA funds 
or to increase the territories Medicaid block grants. Although grateful 
for the additional Medicaid funding provided by ACA, due to several 
challenges, our government was never going to be able to expend the 
full $197,800,000 million made available to American Samoa within the 
time frame of the ACA law. At the time that Governor Lolo and Lt. 
Governor Lemanu began their administration in 2013, our territory had 
only spent $10,357,446.17 million of the ACA funds. Currently, we have 
a remaining balance of $152,338,473 million in our ACA Medicaid account 
(See Table 1. American Samoa ACA spending history).
    The ability of our territory to expend the ACA funds is constrained 
by a number of factors. First, we cannot access the ACA funds until we 
first spend our regular annual block grant which is currently at $12 
million a year. Our regular annual block grant is usually exhausted by 
the 3rd quarter of the fiscal year and only then, is our territory able 
to tap into the ACA funds. Our territory's historical spending of ACA 
funds has averaged only $5.4 million a year. Further, ACA funding can 
only be spent for eligible allowable Medicaid expenditures. It cannot 
be used for construction or renovation of hospital facilities or any 
other non-medical services not allowed for under the Medicaid State 
Plan.

              Table 1. American Samoa ACA Spending History
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Up until 2017, we were unable to add any new Medicaid providers 
because our local government did not have the local revenues to provide 
the local match for new providers. The government-owned hospital 
utilizes a certified public expenditure payment method that does not 
require direct cash match, but any new providers or services outside of 
the hospital would require direct cash match. In 2017, our government 
was able to provide $2 million in the Governor's special programs 
budget to launch new Medicaid services such as the off-island referral 
program to New Zealand.
    Second, American Samoa's small population only incurs a certain 
level of expenditures per annum based on medical care services 
delivered by providers; and third, our government does not have enough 
Medicaid providers that could increase reimbursement claims. Adding new 
Medicaid providers to deliver services outside of the hospital can 
never be done unless our government can identify sources of revenues to 
provide Medicaid local match. Currently, the hospital receives 
government subsidies from the general fund to support hospital 
operations. Based on the hospital's annual final settled Medicare Cost 
Report, Medicaid is able to provide stable monthly reimbursement funds 
to the hospital. The new providers outside of the hospital is supported 
by the Governor's Special Programs budget that also comes from the 
government's general fund.
    One oft-misunderstood facet of American Samoa's Medicaid program is 
our consistent inability to spend our allotted ACA funds each year. 
There seems to be a fundamental misunderstanding of the root causes 
that explain American Samoa's unspent ACA monies to date. Only the 
medical providers can incur ``allowable eligible'' Medicaid expenses to 
draw down Federal Medicaid dollars--the Medicaid office does not spend 
the Medicaid funds. The Medicaid program also cannot advance Medicaid 
dollars--it is a reimbursement program wherein the medical providers 
must first provide services that are eligible ``allowable'' expenses 
payable under Medicaid. The Medicaid office is simply the 
administrating office that pays out Medicaid funds. Because of ACA 
funding, our government was able to significantly improve delivery of 
medical care services to our people with the addition of new Medicaid 
services and providers to the Medicaid program. The new providers have 
helped our territory draw a little more of the ACA funds, but it will 
always be limited by the availability of local matching dollars. 
Without more local match funds to serve more patients and add more 
services, spending the ACA funds will always be a challenge.
    As the territory faces the looming ACA expiration deadline this 
September, it will again be unprepared to absorb the loss of nearly 
$152 million in unspent ACA funds. Absent an ACA funds extension or 
without an increase in the statutory cap placed on the territories, 
American Samoa will be forced to suspend all new Medicaid benefits. We 
will suspend our off-island program to New Zealand that has been a 
life-saving program for many of our patients who otherwise would not be 
alive today had it not been for the ACA funding. ACA funding has 
allowed us to save and improve lives by providing a direct pipeline for 
residents to medical services and care that is not available at the 
local hospital.
    Consider the case of a young 30-year-old mother and nurse of five 
who is alive and fully functioning today after experiencing a traumatic 
brain hemorrhage--she is alive today because ACA funds paid for the Air 
Ambulance and nearly $300,000 of medical treatment costs to save her 
life and rehabilitate her so she can still live life to the fullest as 
a mother. Although no longer working as a nurse, she is fully able to 
care for her children and her family. ACA made a difference to 
residents, young and old, adults and children alike, who live on 
because they received off-island, life-saving medical treatment not 
available at our local hospital. Amputees, diabetics, orthopedic and 
cancer patients have benefited from our off-island referral program, 
gaining critical medical treatment they otherwise would not have access 
to. People whose lives have been transformed, living life with less 
pain and an overall higher quality of life--all because of ACA Medicaid 
funding. All of these success stories hinge on the presence of ACA 
monies. Viewed in this light, failure to act by Congress before the 
September expiration deadline would be disastrous for our people. It 
literally will mean the loss of lives and permanent disabilities for 
people who will lose access to medically necessary care. All of these 
new services will have to be suspended in the new fiscal year--if there 
is no solution provided to increase our annual Medicaid block grant.
    This point cannot be overstated: Medicaid is the only health 
insurance program that is available to the general population in 
American Samoa, including government workers, cabinet directors and 
other government officials from the legislative and judicial branches. 
Cannery workers. Children. Working folk from the private sector and 
service industries. All of them rely on U.S. Medicaid. As a Medicaid 
Director here in the United States, I have no health insurance coverage 
unless I buy travel insurance. My Finance Analyst, Mrs. Faiilagi Poufa-
Faiai, also sits before this Committee without health insurance 
coverage as an American Samoa government employee and as U.S. 
nationals. Why only Medicaid? Because for decades in spite of efforts 
by our government to recruit health insurance providers, health 
insurance companies refuse to serve a community that is high risk and 
low income.

    In the worst-case scenario that Congress fails to act before 
September, the American Samoa Government is prepared to:

  1.  Suspend all new services implemented by the Lolo administration 
            and preserve the regular annual Medicaid funding for the 
            LBJ hospital--all funds would be exhausted in the third 
            quarter; or

  2.  Support all Medicaid services, in which case Medicaid funds will 
            be exhausted in the second quarter, then suspend all new 
            services while the local government pursues options to 
            continue the operations of the hospital.

    Clearly, neither option is ideal. Both represent what would 
objectively be a devastating blow to American Samoa's healthcare 
delivery system and substantially harm hard-working families of 
American Samoa. Medicaid is the lifeline for the people of American 
Samoa and without additional funds in the new fiscal year, we face an 
unconscionable medical crisis that could have been prevented by 
Congress.

    Given what we know, the best long-term, sustainable fixes are ones 
that only Congress can provide at this point and do so in ways that are 
sustainable and address long-term and systemic concerns. Northern 
Marianas, Guam, Puerto Rico, Virgin Islands, and American Samoa--all of 
us since the launch of Medicaid in the territories have operated under 
what is essentially a block grant system of payments. Before the ACA, 
the territories' annual Medicaid block payments under the statutory cap 
were, by and large, insufficient. Moreover, in American Samoa's case, 
the recent increase in additional ACA monies were ostensibly negated by 
demographics and the local government's inability to make the required 
annual dollar match. In order to mitigate the loss of monies that will 
occur when ACA funding expires at the end of September 2019, we 
recommend that Congress undertake the following steps:

    First, extend the ACA expiration date for ACA monies for American 
Samoa. It is long overdue for Congress to increase the cap on block 
grants to give the territories more equitable access to the benefits of 
the Medicaid program and to ensure essential monies are not left on the 
table because of the match requirements.

    Second, the territories' FMAP formula must also be adjusted in 
order to align with that of the states. The FMAP formula for the states 
is based on the Federal poverty level. However, the territories are 
subjected to an arbitrary percentage that makes no sense, since the 
territories are some of the poorest jurisdictions in the Nation. The 
territories FMAP formula is similar to the wealthiest states in the 
country. If the FMAP formula were applied the same way as the states, 
American Samoa would have an 88 percent Federal FMAP rather than the 
current 55 percent. This would greatly assist American Samoa with the 
local match requirements which it currently cannot meet to access more 
ACA funds.

    Finally, while adjusting the territories' FMAP formula so it aligns 
with the current formula in use by the states is important, it is only 
a partial and first step. The cap on the territories' block grants must 
also be raised. These two steps are complementary and must be taken in 
conjunction together in order for them to truly be effective in the 
long term. Either of those two fixes in isolation without the other 
simply means American Samoa's Medicaid block grant funding will be 
exhausted faster. In that scenario, the territory is left with having 
to either take out a loan or find new public revenues to offset the 
financial shortfall. Receiving the FMAP at 100 percent under the 
disaster supplemental going through Congress now would provide much 
needed relief to our Medicaid program that has suspended new services 
due to the exhaustion of the local match share.

    Thank you again Mr. Chairman and the members of this Committee for 
this opportunity to appear before you today. We appreciate the time and 
attention given to the territories Medicaid issues. I would be happy to 
answer any questions that you may have.

                                 ______
                                 

   Questions Submitted for the Record to Sandra King Young, Medicaid 
                        Director, American Samoa
                   Questions Submitted by Rep. Sablan
    Question 1. If Congress finally treats the territories equitably 
and provides uncapped funding with Federal match determined in the same 
was as states, what would the American Samoan Government do to ensure 
that Medicaid beneficiaries have access to comprehensive services 
comparable to what states must provide?

    Answer. The only acute care hospital facility that serves our 
people is located on the island of Tutuila (the largest island). There 
are five community health centers, three in the outlying islands of 
Ta'u, Ofu and Olosega. Residents of these outlying islands must either 
travel by boat or airplane to access medical care services for severe 
illnesses or major healthcare challenges. Air travel to the Manu'a 
islands is sporadic given our dependence on a foreign airline to 
provide transportation between Tutuila and the outlying islands. The 
residents of these islands are considered severely underserved. It is 
abundantly clear that we need to improve the quality of healthcare 
services to these outlying islands, but the demands for improving the 
main acute care hospital facility on Tutuila continue to dwarf and 
overshadow the needs of this population. Additional Federal funding 
support would go a long way for us to address this inequity. As a 
start, American Samoa would increase service providers to expand the 
delivery of comprehensive healthcare services including to the outlying 
islands.
    We will attract private healthcare providers to set up operations 
in American Samoa as the full actual cost of rendering healthcare 
services will be captured and be reimbursed. These would include Long 
Term Support Services, home health services, nursing facility services, 
rural health clinic services, plus expanded pharmacy services, drug and 
tobacco cessation services and other mandatory and optional health 
benefits currently not being supported due to the cap and unsustainable 
FMAP. While this pathway is being pursued, the American Samoa 
Government would immediately invest in attracting Board Certified 
Doctors and specialists to render the same quality of service available 
in the United States. Moreover, the American Samoa Government will 
increase the diagnostic abilities of our only acute medical care 
facility--the Lyndon Baines Johnson Tropical Medical Center. We would 
invest in purchasing state-of-the-art diagnostic equipment along with 
ensuring that qualified Radiologists and technicians are on site to 
facilitate optimization of the equipment's effectiveness. Unlike CNMI, 
the nearest U.S. Medical Institution for medically necessary care not 
available on island is Hawaii and the cost of travel is cost 
prohibitive. The frequency of flights is twice (2) weekly, throughout 
the year except for an added third flight during the Christmas Holiday 
and summer. The remoteness of American Samoa and the limitation of only 
one airline and two flights a week to the United States contributes to 
the high cost of providing healthcare services compared to the states 
and some of the territories.

    1a. With the additional Federal funding, what specific investments 
could you make to improve eligibility and benefits over time?

    Answer. AS would engage in a full-scale reassessment of our 
presumptive eligibility program which does not do individual 
enrollment. This is the way our Medicaid program was set up when it was 
first established in 1982 under our 1902(j) Waiver. It is important to 
know that AS continues to support our presumptive eligibility program 
as it is relevant to our environment. We would continue to strengthen 
our collaboration with our providers to invest in the improvement of 
their operational and financial systems to better manage healthcare 
costs and provide more equitable access to services. Ultimately, we 
hope that with additional financial resources, our Medicaid program 
will be able to provide comprehensive healthcare services to our 
people.

    Question 2. What improvements in your healthcare infrastructure 
would be needed?

    Answer. We would need major investment in upgrading our hospital 
facility and major investment to build new or upgrade our existing 
community health clinics. In particular, a tremendous gap is the lack 
of diagnostic equipment that would better diagnose patients to provide 
more effect treatment plans for patients. The American Samoa Government 
has been working to elevate the quality of services and the appropriate 
medical environment to facilitate compliance with Joint Commission on 
Accreditation of Healthcare Organizations (Joint Commission) standards 
demanded of all U.S. Medical facilities in the United States. In 
addition, the current physician and nursing shortage requires a more 
targeted focus on investment in our local nursing program and as well 
as inspiring and motivating enrollment in medical schools through the 
provision of scholarships.

    2a. Would dedicated up-front funding be needed to make those 
changes?

    Answer. Yes, absolutely this would be very helpful. The current 
effort to waive the Medicaid local match reflects the financial 
inability of the American Samoa Government to address not only the 
myriad of territorial needs but also to invest in the repair and 
rehabilitation of aged facilities. Up-front funding would greatly help 
facilitate immediate attention to mitigate our aging facilities and 
acquire diagnostic equipment that would help improve patient 
treatments.

    Question 3. Would provider payments have to be increased and to 
what extent?

    Answer. With a small number of providers and with our presumptive 
eligibility (PE) formula, payments to providers are simple to 
administer. Payments are based on our population numbers that is 
calculated on an annual basis and the PE can either go up or go down 
tied to population increase or decrease. Payment methods are provider-
specific and based on actual costs from prior year Medicare Cost 
Reports, actual costs for off-island referral and encounter rates for 
the FQHC community health clinics--but they are all still based on the 
PE formula. I cannot comment on any increase on provider payments 
except to state that we do have the authority to accept or deny any 
increases that would make provision of services cost prohibitive for 
the Medicaid program.

    Question 4. Are there particular Medicaid eligibility, benefit or 
other requirements you wouldn't be able to meet within a reasonable 
time due to territory-specific limitations, and if so, what changes 
could American Samoa make to ensure residents get high quality health 
care in other ways that meets their needs?

    Answer. The immediate option that AS has to provide high quality 
health care to meet the needs of our patients is the off-island program 
to New Zealand. We would like to expand this program to Hawaii or to 
other states in the United States, but we are unable to do this under 
our existing block grant and the FMAP we have. As to other ways, it 
would be to increase services at our local hospital, invest in 
diagnostic equipment, increase physician services, increase community 
base healthcare providers, etc.

    Question 5. Overall, what do you see as the necessary steps to 
better ensure access to quality, comprehensive care for American Samoan 
residents and what would be a reasonable timeline to reach such a goal?

    Answer. The U.S. Army Corps of Engineers recently completed its 
assessment of American Samoa's healthcare facilities under an 
engagement by the U.S. Department of the Interior responding to the 
congressional directive calling for this healthcare infrastructure 
assessment. This report would provide the most current information on 
the condition and status of American Samoa's healthcare facilities. In 
addition, I refer the Committee to the State Innovation Model Report 
that was issued by American Samoa through the Medicaid State Agency 
that identifies the gaps, recommendations and lays out a pathway to 
improve the healthcare services system in the territory. This report 
will be forthcoming under a separate cover. Briefly however, the 
necessary steps to better ensure access to quality, comprehensive care 
for our residents is: (1) the lifting of the Medicaid cap and adopting 
a fairer FMAP for the territories. Our biggest barrier to access to 
quality and comprehensive health care is the lack of financial 
resources; and (2) increasing medical care and other services providers 
under the Medicaid program.

    Question 6. What will you have to cut if you go off the cliff?

    Answer. If AS goes off the cliff with the expiration of ACA funds 
and without a replacement source of funding, we will have to cut all 
the new services and new providers approved during the Lolo 
administration--(1) the Off-island medical referral program to New 
Zealand; (2) the Department of Health Federally Qualified Health 
Center's community clinics; (3) the Durable Medical Equipment, 
Prosthetics, Orthotics and Supplies; and the Medicare Dual-Eligible Co-
Pay assistance program. Our block grant can only afford to cover 
services for our only hospital and this is the priority of our 
government, to keep the hospital open.

    Question 7. What will be the impact on individuals and the 
healthcare delivery system in the territory, when Obamacare funding 
ends this year?

    Answer. The impact would be devastating. People would not have 
access to life saving services. For example, children who need 
rheumatic heart disease surgeries would not get them, people who need 
cancer treatment would not get them, any heart surgery would not be 
available and all other medically necessary care that are not available 
on island would not be accessible to our people.

                 Questions Submitted by Rep. Radewagen
    Question 1. Given service utilization and the historical issues 
with generating local matching funds, what is the minimum FMAP that 
American Samoa's Medicaid system needs if the annual allotment is 
raised to $30 million?

    Answer. American Samoa would like to need the maximum FMAP that it 
is eligible for under the standard poverty formula used by the states 
to determine their FMAP. Currently, the American Samoa government can 
only put up $2 million for local match. It would be unable to come up 
with the match for the additional $13-$10 million we are requesting. AS 
thus requests an initial FMAP of 90/10 for the next 2 years, to 
increase to 85/15 in year 3 and 4 and then to 80 percent in year 5.

    Question 2. The Senate version of the disaster relief bill in 
addition to temporarily increasing American Samoa's FMAP to 100 percent 
from January 1-September 30 for FY 2019, requires American Samoa to 
submit a plan on how the territory will collect and report reliable 
data to the Transformed Medicaid Statistical Information System (T-
MSIS). American Samoa is currently exempt from many data reporting 
requirements. If passed, what is the projected cost of implementing 
such a system.

    Answer. American Samoa does not have a T-MSIS system because that 
would not make sense for American Samoa whose annual cap is $12 
million. A traditional T-MSIS system is estimated to cost over $20 
million and even a smaller version would not be financially feasible 
for American Samoa. The Medicaid agency keeps internal data on 
expenditures and patient utilization and is able to report this data to 
CMS.

    Question 3. American Samoa's Medicaid program covers 14 of the 17 
mandatory benefits and some optional benefits. What is the projected 
cost and time frame it would take for American Samoa to become 100 
percent compliant?

    Answer. I cannot comment on this time frame because we would need 
to do a full-scale evaluation and cost-benefit analysis together with 
CMS to plan this out. The territory's existing work force, education 
pipeline to train new medical providers, local and Federal regulations 
would all need to be reviewed to come up with the projected cost and 
time frame for full compliance. It is not possible for AS to be 
compliant under the current capped funding and heavy FMAP requirement.

    Question 4. In the 2016 GAO report on Medicaid in the Territories, 
American Samoan Health Officials stated they planned to use some of the 
new ACA funds to expand services. Please explain in detail what these 
new services are and what suspending them may mean for American 
Samoans.

    Answer. The new services added during Governor Lolo Matalasi Moliga 
and Lt. Governor Lemanu Peleti Mauga's administration are the (1) Off-
island medical referral program to New Zealand, (2) the Department of 
Health Federally Qualified Health Center's community clinics, (3) the 
Durable Medical Equipment, Prosthetics, Orthotics and Supplies, and (4) 
the Medicare Dual-Eligible Co-Pay assistance program. Suspending all 
the four services would put people's lives at risk of permanent 
disability or worse, loss of life. Our people would not have access to 
medically necessary care that is not available on island.

    Question 5. GAO reported they ``found little assurance that 
territory Medicaid funds are protected from fraud, waste, and abuse''--
A discussion area that will be discussed as the Congress debates a 
greater Territorial Medicaid solution. Could you please tell us about 
the current efforts and its successes?

    Answer. In American Samoa, there has only been one Medicaid 
provider until 2017. CMS in 2011, put in place the certified public 
expenditure payment method for the hospital significantly reducing any 
risk of fraud, waste and abuse. Now with the four new services added 
since 2017, CMS continues to work closely with our Medicaid office to 
improve policies and procedures to implement tight controls and checks 
on all approvals for expenditures of Medicaid funds. AS Medicaid is 
working with the CMS Program Integrity Contractor Qlarant to improve 
and implement program integrity procedures in all Medicaid activities. 
It is not feasible to establish a full scale Medicaid control fraud 
unit for American Samoa because it would cost disproportionately more 
than what AS actually receives in a block grant.

    Question 6. The Federally Qualified Health Centers (FQHCs) do not 
operate on the certified public expenditure method. Relative to LBJ 
Hospital, how much spending do FQHCs account for annually?

    Answer. The FQHC just became a Medicaid provider in 2017. They 
utilize an encounter rate payment method and incurred $1,128,741.95 in 
Federal funds and $711,424.67 in local funds in FY 2018. Medicaid 
anticipates transitioning the FQHC to the CPE payment method once they 
have a couple of years of audited financial statements available.

    Question 7. States currently do not have capped Federal Medicaid 
contributions and they have FMAP based on the average per capita income 
for each state relative to the national average. You mentioned in your 
testimony that given a lifting of the cap and a better FMAP, American 
Samoa would be able to attract more providers, but there are states 
that still struggle to attract providers despite not having these same 
statutory burdens. How exactly would removing the Federal cap and 
raising the FMAP, allow American Samoa to attract providers?

    Answer. We would be able to have the financial resources to hire 
board certified doctors to serve in the LBJ hospital. We would also be 
able to encourage the development of the private sector healthcare 
providers with the availability of more Medicaid funding and lessening 
the burden on the FMAP. Because the local match must come from the 
government, the FMAP is key to expanding the private sector healthcare 
providers. No matter how much Federal Medicaid funds we receive, 
drawing these funds down are subject to the local match. Without the 
local match, we cannot draw Federal funds and this is when we suspend 
all services.

    7a. Would you raise reimbursement rates?

    Answer. Only in so much as cost of living increases because 
reimbursement rates for American Samoa are based on actual costs and on 
the CMS Medicare Fee Schedule.

    Question 8. Would raising the FMAP and the Federal cap allow 
American Samoa to attract private insurers?

    Answer. Highly unlikely, because Medicaid is essentially the 
universal healthcare provider for American Samoa. The majority of the 
population that fall within the poverty line threshold for the 
presumptive eligibility program in American Samoa is covered under 
Medicaid. The high poverty rates, high risk population and 
unsustainability of local revenues to cover private insurance premiums 
and deductibles would continue to be a great deterrent to the 
attraction of private insurers.

    Question 9. Has there been any efforts to investigate or adopt a 
Kaiser Health Care model--the creation of an internal non-profit 
insurance plan managed by the facility that delivers care--for LBJ 
hospital?

    Answer. That is a question best addressed to the LBJ hospital. 
Medicaid does not have the authority to investigate or adopt the 
creation of an internal non-profit insurance plan to be managed by the 
facility that delivers care for LBJ hospital. Medicaid did however, 
engage Kaiser Permanente at the beginning of the Lolo administration, 
regarding off-island services using their facilities in Hawaii. Kaiser 
was not prepared at the time to engage AS in that area without an 
identifiable and guaranteed source of long-term local funding from the 
American Samoa Government.

    Question 10. What behavioral health services and or programs 
designed to address top public health priorities such as obesity and 
hypertension, if any, are currently covered under American Samoa's 
Medicaid program?

    Answer. All behavioral health services are covered under the AS 
State Plan--the challenge is not having sufficient numbers of 
behavioral health providers to provide these services and not having 
sufficient financial resources to support these services--due to the 
capped funding and unsustainable local match.

               Questions Submitted by Rep. Gonzalez-Colon
    Question 1. American Samoa will end this fiscal year with an unused 
balance of $153 million in ACA funds. You have explained to us the 
reasons for this balance but, from your testimony, extending the 
expiration date on these funds will not get you very far.
    Answer. It will not get us far because we cannot come up with 
sufficient local match.

    1a. What are the most important restrictions for the use of these 
funds that Congress must change in order for American Samoa to 
effectively use them to improve the provision of health care to its 
residents.

    Answer. In terms of the $153 million, the President recently signed 
the Disaster Supplemental bill that gives AS 100 percent FMAP through 
September 30, 2019. Our territory would not be able to expend these 
funds by that date. It would be ideal if AS is allowed to use these 
funds past September 2019 until fully expended using a less burdensome 
FMAP or to be to obligate these funds for services delivered by this 
deadline. In addition, it would be helpful for AS if these funds were 
made available for infrastructure improvement and work force 
development. Currently, it is allowable only for medical care, but the 
major gaps in our healthcare system that impacts the delivery of 
quality medical care, deal with inadequate work force, poor facilities 
and lack of medical diagnostic equipment that could better diagnose our 
patients in order to better provide proper clinical response and prompt 
treatment strategies.

    Question 2. How will the overall healthcare system and the non-
Medicaid population in American Samoa be affected if Medicaid funding 
is not increased for FY 2020?

    Answer. Overall, it would be devastating as we would have to cut 
back on the new services the territory implemented. As for the non-
Medicaid population which is nominal, they would not be affected as 
they are not eligible for Medicaid and they pay out-of-pocket for 
medical services. However, the term non-Medicaid population is not 
generally used because all residents in American Samoa are 
presumptively covered under the Medicaid program. Because of the cap on 
AS Medicaid funding and the burdensome FMAP rate, healthcare services 
are limited to the extent of funding available.

    Question 3. Currently, the Social Security Act provides for capped 
Medicaid funding for the territories. For FY 2017, the cap in American 
Samoa was $11.51 million. How much did the Medicaid program benefits 
actually cost?

    Answer. Based on actuals contained in the Medicare Cost Report for 
allowable Medicaid costs for the hospital and expenditures from the 
private providers we have, program benefits cost approximately $17 
million in Federal Medicaid funds only. Because we are only 2 years 
into our new services, this number is expected to increase based on the 
increase in patient utilization patterns as a result of increased 
public outreach on the availability of these new services.

    Question 4. Could you please provide the Committee actual examples 
of how the current statutory FMAP of 55 percent affects the provision 
of health care in American Samoa?

    Answer. The 55 percent FMAP greatly limits our territory's ability 
to provide comprehensive healthcare services to our people. Basically, 
it limits the provision of mandatory and optional services that the 
Medicaid program can provide under the Medicaid State Plan. The LBJ 
Tropical Medical Center receives locally generated revenues to provide 
medical care services and uses a certified public expenditure method 
that provides predictable funding and does not require actual cash 
match. The issue for the hospital is the capped funding which is not 
enough to cover the hospital's service for the year. Further, there are 
many services that are not available at the hospital for any number of 
reasons--no equipment, no physician specialists, no diagnostic 
equipment, etc. The Medicaid program to address this gap added new 
services which do require actual local cash match. Because the FMAP is 
so high comparable to the wealthy states in the United States, the 
territory which generates very limited local revenues, is unable to 
provide any substantial local dollars for the local match. The Medicaid 
program only receives $2 million in local match dollars a year for the 
off-island referral program. When this is exhausted in the second 
quarter, we suspend all reimbursements to providers and effectively 
suspend services.


                                 ______
                                 

    Vice Chair Sablan. Thank you very much for that, Ms. Young.
    Ms. Avila from Puerto Rico, you are recognized for 5 
minutes.

  STATEMENT OF ANGELA AVILA, EXECUTIVE DIRECTOR, PUERTO RICO 
             STATE HEALTH INSURANCE ADMINISTRATION

    Ms. Avila. Thank you. Good morning, Mr. Chairman, Ranking 
Member Gonzalez, and members of this Committee. Thank you for 
the opportunity to testify today on Puerto Rico's impending 
Medicaid cliff. I am honored to be here on behalf of the 
government of Puerto Rico and to be at the witness table with 
friends and colleagues from the other territories.
    Puerto Rico's Medicaid program serves some of our Nation's 
most vulnerable citizens. We serve approximately 425,000 
children and 305,000 elderly and disabled. We provide care to 
1.5 million individuals out of a population of 3.2 million U.S. 
citizens.
    Yet, Federal healthcare funding for Puerto Rico has been 
insufficient for generations. Puerto Rico's Medicaid system has 
been chronically underfunded due to the historical low Federal 
Medical Assistance Percentage, known as FMAP, and 
correspondingly high local matching requirement and the cap on 
Federal funding.
    Currently, we are operating under increased Medicaid 
funding and a temporary 100 percent FMAP, which we received in 
the aftermath of Hurricane Maria, the worst natural disaster in 
our nation's history.
    However, this supplemental funding will expire on September 
30, 2019. If no action is taken for Fiscal Year 2020, the FMAP 
will revert back to the statutorily mandated 55 percent FMAP, 
up to the Federal Medicaid funding cap of approximately $380 
million.
    This level of Federal funding is not sustainable, as it 
will only cover 19 percent of the Federal funding needed during 
Fiscal Year 2020 and will last approximately 3 months. Once 
this funding is exhausted, Puerto Rico would have to fully fund 
the deficit, as it has in the past, and pay for its Medicaid 
services with 100 percent local funding. Given the island's 
current financial situation, local funding is not available.
    Unless Congress acts, we will be faced with potentially 
catastrophic damage to our Medicaid program and our healthcare 
system. We will be forced to potentially remove any services 
that are not required under the Medicaid rules, such as 
pharmacy coverage and dental coverage. We will have to end 
coverage for the current population who receive health care 
with local funds.
    We will face further delays in much-needed improvements to 
our hospitals, clinics, and other healthcare providers. We will 
continue to lose more of our medical providers because we will 
not be able to ensure reasonable reimbursement. We will face a 
mental health crisis as individuals and families continue to 
struggle to have their most basic needs met.
    Earlier this month, Governor Rossello submitted Puerto 
Rico's official Medicaid ask to Congress: $15.1 billion in 
funding at an 83 percent FMAP for 5 years. This funding would 
provide Puerto Rico with certainty in the short term while we 
work together on a sustainable, long-term funding mechanism.
    As part of the Governor's request, we have identified 
critical sustainability measures needed to further stabilize 
and improve the healthcare system in Puerto Rico as a whole, 
which include: keeping physicians within the system to avoid 
critical shortages, provide lifesaving hep C drugs, provide 
Medicaid Part B premium coverage, and adjust the Puerto Rico 
poverty level to increase fairness in Medicaid eligibility.
    The Medicaid cliff that Puerto Rico is facing is an 
emergency that must be dealt with swiftly and smartly. I love 
my island. It is my home. And I am committed to working with 
Congress to create a Medicaid program that all of us can be 
proud of and that provides the necessary care to the 1.5 
million U.S. citizens who rely on it.
    Thank you for your attention on these urgent matters. I 
welcome any questions you may have. Thank you.

    [The prepared statement of Ms. Avila follows:]
  Prepared Statement of Angela Avila, Executive Director, Puerto Rico 
                 State Health Insurance Administration
    Chairman Grijalva, Ranking Member Bishop, and Members of the 
Committee: Thank you for the opportunity to testify today on Puerto 
Rico's impending Medicaid cliff and the significant and detrimental 
impact this funding cliff will have on the people of Puerto Rico and 
our healthcare system if Congress fails to act. I am honored to be here 
on behalf of the Government of Puerto Rico and to be joined at the 
witness table with my friends and colleagues from the other 
territories. We are united in our need for sustained Federal funding 
for Medicaid so that we can provide adequate health care to our people.
    I appear before you today to request Congress' continued and 
expedient support to remedy the Medicaid funding crisis Puerto Rico is 
facing. On September 30, 2019, the increased Medicaid funding and the 
temporary 100 percent Federal Medical Assistance Percentage (FMAP) we 
received in the aftermath of Hurricane Maria--the worst natural 
disaster in our Nation's history--will expire. It is only through this 
additional Federal funding and the 100 percent FMAP that we have been 
able to sustain our healthcare system.
    Without this temporary funding provided in the Bipartisan Budget 
Act for Puerto Rico's Medicaid system, Medicaid beneficiaries in Puerto 
Rico would have been forced to forgo care, would have suffered 
needlessly and in many cases, would have died prematurely. These people 
include some of the most vulnerable citizens of the United States of 
America. We serve approximately 425,000 children, 305,000 elderly and 
disabled individuals, and more than 17,000 pregnant women at any given 
time. We provide care to 1.5 million individuals through our Medicaid 
program--out of a population of 3.2 million U.S. citizens--who may be 
suffering from mental and physical illnesses, often both and, all of 
whom are financially destitute. Without a more permanent and 
sustainable funding solution, we will be unable to complete the 
planning necessary to stabilize the system and improve health outcomes 
for our citizens.

    Congress must act before September 30, 2019, to avert catastrophic 
damage to our healthcare system and the health and well-being of the 
people of Puerto Rico. If no action is taken for Fiscal Year 2020, the 
FMAP will revert back to the statutorily mandated 55 percent FMAP 
(established in 1968) for most of our Medicaid program, up to the 
Federal Medicaid funding cap of approximately $380 million. This level 
of Federal support for Puerto Rico's Medicaid program is not 
sustainable as that funding is projected to only cover 19 percent of 
the Federal funding needed during Fiscal Year 2020 for the Medicaid 
expenditures supported by that capped Federal allotment. If Puerto Rico 
only receives its statutory cap of $380 million at the fixed FMAP of 55 
percent for FY 2020, Federal funding of Puerto Rico's Medicaid will 
only last 3 months. These simple and stark numbers represent the 
Medicaid ``fiscal cliff'' that we have been talking about for some 
time. Unless Congress acts on the Government of Puerto Rico's request 
before September 30, 2019, we will be faced with potentially 
catastrophic damage to our Medicaid program and our healthcare system:

     We will have to conduct a review of all current benefits 
            and potentially remove any services that are not required 
            under Medicaid rules, such as Pharmacy coverage and Dental 
            coverage.

     We will have to abandon all plans to modify the Puerto 
            Rico Poverty Level to add uninsured individuals presenting 
            at hospitals to receive uncompensated care.

     We may have to end coverage for the current population who 
            receives health care with local funds.

     We will have to pay for any needed Medicaid healthcare 
            services with all local funds that are not available in our 
            budget at this time.

     We will face further delays in much needed improvements to 
            our hospitals, clinics, and other healthcare infrastructure 
            as funds will have to be diverted to current Medicaid 
            obligations.

     We will continue to lose more of our medical providers 
            because we will not be able to ensure reasonable 
            reimbursement to retain this critical work force. Our 
            healthcare work force shortage is compounded by our 
            inability to attract new medical professionals to Puerto 
            Rico due to concerns of financial instability and is 
            especially problematic with specialty providers needed to 
            treat expensive and prevalent health conditions.

     Finally, we will face a mental health crisis as 
            individuals and families continue to struggle to have their 
            most basic needs met, particularly in the aftermath of 
            Hurricane Maria which provoked a 20 percent increase in 
            suicide rates.

    Due to the disproportionately low level of Federal Medicaid funding 
historically available to Puerto Rico, we have been forced to limit 
Medicaid eligibility to income levels well below the Federal poverty 
level used by the states. For example, Puerto Rico covers individuals 
with income up to 138 percent of the Puerto Rico poverty level, which 
is $11,736 annually for a family of four or approximately 46 percent of 
the Federal poverty level for a family of the same size in 2019 on the 
mainland.
    Once the cap is exhausted, Puerto Rico would have to fully fund the 
deficit in Federal Medicaid funding, as it has in the past, and pay for 
its Medicaid services with 100 percent local funding. Given the 
island's current financial situation, local funding is not available. 
Come October, if Congress fails to act, nearly 1.5 million U.S. 
citizens may lose the essential health care they need, our already 
fragile healthcare infrastructure would be further destabilized, and 
the island's recovery would be further delayed.

    I would like to take a moment to clear up a misconception that 
seems to be all-to-common when it comes to Puerto Rico. Puerto Rico has 
not mismanaged any funds in administering its Medicaid program, in 
fact, we have made extraordinary efforts and worked tirelessly to 
provide the best care for our citizens with the fewest resources. For 
FY 2020, for example, Puerto Rico's projected total spend per full year 
equivalent, including Federal and state funds, is estimated to be lower 
than the Federal spending in any of the states. We are aware that 
additional and sustained Federal support comes with additional 
responsibility on our part to ensure that the Medicaid program is 
efficient, effective, and accountable. Toward that end, we have already 
taken several actions outlined below:

     We implemented a fully functioning Medicaid Management 
            Information System (MMIS).

     We implemented a Medicaid Fraud Control Unit (MFCU).

     We enhanced our most recent Managed Care Organization 
            (MCO) Contracts with additional requirements, including 
            financial conditions, related to encounter data, program 
            integrity activities, achieving improved health outcomes, 
            and one of the highest Medical Loss Ratios in the Nation.

    We believe that all of these activities, in addition to our 
complete responsiveness to the Financial Oversight Management Board 
(FOMB) created by Congress under the Puerto Rico Oversight Management 
and Economic Stability Act (PROMESA), P.L. 114-187, indicate the 
island's ongoing commitment to ensuring the integrity of our programs 
and our responsible stewardship of the Federal Medicaid funding that we 
receive.

    Earlier this month, the Governor of Puerto Rico, the Honorable 
Ricardo Rossello submitted Puerto Rico's official Medicaid ask to 
Congress--$15.1 billion in funding at an 83 percent FMAP for 5 years in 
order to prevent the collapse of the healthcare system in Puerto 
Rico.\1\ This funding would provide the island with certainty in the 
short term while Congress works with us to determine a sustainable, 
long-term funding mechanism that eliminates the inequity in funding and 
allows us to meet the healthcare needs of our most vulnerable 
residents. As part of the Governor's request, we have identified 
critical sustainability measures needed to further stabilize and 
improve the healthcare system in Puerto Rico as a whole:
---------------------------------------------------------------------------
    \1\ This assumes that other Federal matching requirements and 
funding under the Medicaid program remain in place during this period 
for areas such as CHIP allotments, MMIS, Eligibility and Enrollment, 
and Medicare Part D co-insurance and deductibles.

     Keep physicians within the system to avoid critical 
            shortages--The number of registered physicians has 
            decreased due in part to low reimbursement rates and lack 
            of infrastructure. This is especially problematic with key 
            specialty physicians. We are working on a strategy to 
            ensure dollars earmarked for increased provider 
            reimbursement reach providers under managed care, whether 
            the provider is an individual practitioner or part of a 
---------------------------------------------------------------------------
            larger group practice.

     Provide life-saving Hepatitis-C drugs--Unlike in the 
            mainland's Medicaid system, currently, Puerto Rico's 
            Medicaid system does not cover the drugs that cure the 
            Hepatitis-C virus and there are an estimated 14,000 Puerto 
            Ricans with the disease. While the short-term cost of 
            proving this benefit is high, significant savings can be 
            realized by investing in the long-term health of our 
            members and avoiding costly treatment options in the 
            future.

     Prevent collapse of hospital system due to losses--
            According to the latest Centers for Medicare and Medicaid 
            Services (CMS) cost reports, over 50 percent of Puerto 
            Rico's hospitals reported losses. Because Medicaid covers 
            over half of the population of the island and has the 
            lowest reimbursement rates for hospitals, our funding 
            status jeopardizes the hospitals' ability to operate and 
            reinvest in infrastructure. Additional funds are needed to 
            compensate hospitals for losses attributable to Medicaid.

     Provide Medicare Part B Premium coverage--Coverage of Part 
            B premiums has the potential to help approximately 282,000 
            Medicaid and Medicare dual eligibles that pay Medicare Part 
            B premium out-of-pocket or opted not to enroll in Medicare 
            Part B due to the cost. In most cases, this is a deduction 
            from each individuals Social Security check, which for most 
            recipients is their sole source of income. Since premiums 
            can be as high as $135.50 per month, some elderly residents 
            must choose between food, rent and health care. This is a 
            choice no U.S. citizen should be forced to make.

     Adjust the Puerto Rico Poverty Level to increase fairness 
            in Medicaid eligibility--Due to the low level of Federal 
            Medicaid funding, Puerto Rico uses its own poverty level as 
            the basis for determining eligibility. As I mentioned 
            earlier, the Puerto Rico Poverty Level is less than 50 
            percent of the Federal Poverty Level used by other states. 
            As a result, a significant percentage of vulnerable 
            families and individuals in Puerto Rico lack healthcare 
            coverage. Currently, Puerto Rico covers approximately 
            120,000 of these individuals directly with local funds. As 
            local dollars may not consistently be available to cover 
            these individuals, they may have no choice but to move to 
            the mainland in search of adequate healthcare coverage.

    As we have stated in previous meetings with the Administration, and 
in testimony before Congress and recently, the Medicaid and CHIP 
Payment and Access Commission (MACPAC), Federal healthcare funding in 
Puerto Rico has been insufficient for generations. Under Medicaid, the 
historically low FMAP, a correspondingly high local matching 
requirement, and the cap on Federal funding have imposed severe and 
unsustainable financial demands on Puerto Rico.
    The Medicaid cliff that Puerto Rico is facing is an emergency that 
must be dealt with swiftly and smartly. As this Committee knows, the 
Government of Puerto Rico is currently in the midst of working with the 
Oversight Board to obtain approval of our revised Fiscal Plan and our 
FY 2020-2021 state budget, all of which must happen by June 30, 2019. 
Given the very limited time available for approval, we ask that you 
address this issue in the next available legislative vehicle. Our 
proposal will allow us to continue to provide urgent healthcare 
services to our citizens while we work to rebuild our healthcare 
infrastructure and economic viability and will serve to provide a 
temporary ``fix'' to the disparate, arbitrary, and insufficient 
treatment that Puerto Rico continues to receive under the Medicaid 
Program.
    I am grateful for the opportunity to share these facts with you and 
thank you for allowing me to testify before this Committee on this 
critically important issue. I love my island--it is my home, and I am 
committed to working with Congress to create a Medicaid system that all 
of us can be proud of and that provides the necessary care to the 1.5 
million U.S. citizens who rely on it. We look forward to working 
together to address the immediate issue of the impending Medicaid 
fiscal funding cliff and we look forward to finding a solution that can 
eliminate the unequal treatment for Puerto Rico, provide parity for 
Medicaid enrollees and the full benefits of the Federal Medicaid 
program for our citizens and our providers once and for all. Thank you 
for your consideration and attention to these urgent matters. I am 
honored to be heard and open to answer any questions you may have.

                                 ______
                                 

Questions Submitted for the Record to Angela Avila, Executive Director, 
              Puerto Rico Health Insurance Administration
                   Questions Submitted by Rep. Sablan
    Question 1. If Congress finally treats the territories equitably 
and provides uncapped funding with Federal match determined in the same 
was as states, what would Puerto Rico do to ensure that Medicaid 
beneficiaries have access to comprehensive services comparable to what 
states must provide?

    1a. With the additional Federal funding, what specific investments 
could you make to improve eligibility and benefits over time?

    Answer. For the first time since the beginning of the program, 
Puerto Rico would be able to stabilize the Government Health Plan by 
having adequate funding for the provision of services. Currently, 
Puerto Rico covers many mandatory services for all beneficiaries, and 
additionally covers some optional services such as dental care, 
pharmacy benefits and some behavioral health services. Providing all 
mandatory services such as Nursing Facility Care and Non-Emergency 
Medical Transportation requires reliable long-term funding, sufficient 
time to assess the need and current provider capacity in Puerto Rico 
and remedy any deficiencies in capacity and infrastructure to support 
the new services. ASES is fully committed to initiating these projects 
if the funding is available.

    Specific investments include provider capacity, development, and 
availability; management capacity and subject matter expertise within 
the Medicaid agency; IT solutions; and stakeholder outreach and 
training for Medicaid staff, the provider community, the managed care 
organizations, and broader stakeholder community. In addition, with the 
available funding Puerto Rico would:

     Increase provider reimbursement;

     Provide life-saving Hepatitis-C drugs;

     Provide improved financial support to hospitals;

     Provide Medicare Part B Premium coverage for approximately 
            282,000 Medicaid and Medicare dual eligible individuals 
            that pay the Medicare Part B premium out-of-pocket or opted 
            not to enroll in Medicare Part B due to the cost; and

     Adjust the Puerto Rico Poverty Level to cover more 
            uninsured or underinsured individuals.

    In the event that Puerto Rico receives sustainable funding 
sufficient to cover the costs of providing long-term care, we would 
also invest in the administrative framework required to support the 
provision of these services and begin reimbursing the same.

    Question 2. What improvements in your healthcare infrastructure 
would be needed?

    2a. Would dedicated up-front funding be needed to make those 
changes?

    Answer. Funding would be needed for Puerto Rico to be able to begin 
reimbursement of mandatory services that are not currently being 
provided. Dedicated up-front funding would also be needed to create the 
necessary infrastructure to begin providing such services and perform 
responsible oversight of the same. We would need to build and improve 
infrastructure across all areas of the program in order to be able to 
operate in a more ``state-like'' manner. Puerto Rico would need to 
invest in additional staff and staff training and development at 
Medicaid and ASES. We would continue and expand investments in IT 
solutions to efficiently oversee the Managed Care Organizations (MCOs) 
and we need to build formalized structures from policy to payment for 
any new services.
    We would need to invest in our providers and support their 
capabilities with regard to electronic health records (EHR) and provide 
adequate reimbursements such that they may invest in upgrades to 
infrastructure and equipment. We are working on a strategy to ensure 
dollars earmarked for increased provider reimbursement reach providers 
under managed care, whether the provider is an individual practitioner 
or part of a larger group practice. We cannot fully accomplish this 
without the reliable long-term solution we are requesting.

    Question 3. Would provider payments have to be increased and to 
what extent?

    Answer. Providers are leaving the island for a variety of reasons, 
including the low reimbursement rates that barely covers the basic cost 
of providing services and for the lack of financial stability to 
improve their practices, equipment and technology. The number of 
registered physicians in Puerto Rico continues to decrease due to low 
reimbursement rates and lack of infrastructure. This is especially 
problematic with key specialty physicians. An increase of provider 
rates to a minimum of 70 percent of Medicare rates in Puerto Rico is 
necessary to begin the process of retaining our providers.

    Question 4. Are there particular Medicaid eligibility, benefit or 
other requirements you wouldn't be able to meet within a reasonable 
time due to territory-specific limitations, and if so, what changes 
could Puerto Rico make to ensure residents get high quality health care 
in other ways that meets their needs?

    Answer. As indicated in the responses to Questions 1 and 2, 
significant changes to the array of services or system of care will 
require planning, resources and time. Some changes may require 
recruiting provider types, building licensing requirements, and 
modifying Puerto Rico regulations to account for services that do not 
currently exist, like free-standing birth centers. In addition, ASES 
must work cooperatively with the Fiscal Oversight Management Board 
(FOMB) and the ASES Board of Directors to plan and implement 
substantial changes to the program. Some initial changes which could 
occur in the near-term would include immediate coverage of Hepatitis C 
drug, increases to provider reimbursements that will allow Puerto Rico 
to rebuild the network, and increases to the Puerto Rico Poverty Level. 
It could also increase its staff to levels that would allow improved 
oversight of the program, noting that Puerto Rico currently only spends 
approximately 2.5 percent of program budget on administration of the 
Government Health Plan, compared to approximately 5 percent 
administrative spending in other states. This shortfall in human 
resources would have to be addressed in the event Puerto Rico begins 
providing mandatory services it currently is unable to.

    Question 5. Overall, what do you see as the necessary steps to 
better ensure access to quality, comprehensive care for Puerto Rican 
residents and what would be a reasonable timeline to reach such a goal?

    Answer. Puerto Rico's primary need is sufficient and reliable long-
term funding that will allow it to improve provider reimbursements and 
provide services it is currently unable to due to low funding levels. 
The transition from the Medicaid program as it is delivered today to a 
more robust and state-like program would be accomplished in stages, 
with some areas completed more quickly (in the next 0-2 years) while 
others such as the addition of long-term care or complex IT solutions 
may take more than 5 years.

    Question 6. What will you have to cut if you go off the cliff?

    Answer. Puerto Rico would have to conduct a review of all current 
benefits and potentially remove any services that are not required 
under Medicaid rules, such as Pharmacy coverage and Dental coverage, 
which would be catastrophic to the health and well-being of Puerto 
Rico's population. Our review may also identify mandatory benefits for 
which we will need to apply strict limitations to access those services 
that may not exist today. In addition, Puerto Rico currently covers an 
additional 125,000 enrollees who do not otherwise qualify under the 
current Medicaid eligibility rules using only Puerto Rico funds. These 
low-income individuals and families may lose coverage completely, and 
at less than $800.00 per month income, will be unable to afford private 
coverage. Puerto Rico will have to pay for most required Medicaid 
services entirely from local funds that are not available in our budget 
at this time.
    Puerto Rico will be unable to improve hospitals, clinics, and other 
healthcare infrastructure as funds will have to be diverted to current 
Medicaid obligations. We will also continue to lose medical providers 
as they emigrate outside of Puerto Rico because we will not be able to 
ensure reasonable reimbursements to retain this critical workforce. Our 
healthcare workforce shortage is compounded by our inability to attract 
new medical professionals to Puerto Rico due to concerns of financial 
instability, which is especially problematic regarding specialty 
providers needed to treat prevalent health conditions.


    Question 7. What will be the impact on individuals and the 
healthcare delivery system in the territory, when Obamacare funding 
ends this year?

    Answer. It is expected that a catastrophic chain of events will 
occur. Current enrollees may lose essential benefits and experience 
increasing shortages of providers, particularly specialists. These 
shortages will result in increased wait times for appointments, which 
in turn creates worsened medical and behavioral health conditions. In 
the event no further additional funding is identified and drug coverage 
has to be terminated, Puerto Rico will have effectively ceased covering 
the medical needs of its most vulnerable population, one which will be 
unable to provide for itself. This would certainly mean the difference 
between life and death for many beneficiaries.
    Puerto Rico may also have to end all coverage for the current 
population that receives health care using only local funds. Those who 
are able, will leave the island to seek more reliable care in Florida, 
Texas, New York and other continental states, thus damaging the 
stability of Puerto Rico and incurring additional costs for those 
Medicaid programs.
    If we reduce services, we will have to prepare for the negative 
impact on people's health and will most likely face a mental health 
crisis as individuals and families continue to struggle to have their 
most basic needs met.
               Questions Submitted by Rep. Gonzalez-Colon
    Question 1. Ms. Avila, to have a broader picture of what 
insufficient funds would look like on the ground, how many people in 
Puerto Rico will lose their healthcare coverage if we do not address 
the impending Medicaid cliff? How will they see their benefits or 
coverage reduced?

    Answer. Currently the Puerto Rico Poverty Level used to determine 
eligibility for Medicaid is less than the Federal Poverty Level. This 
means that only a small fraction of people who would be eligible for 
Medicaid in Florida or Alabama are eligible for Medicaid in Puerto 
Rico. Puerto Rico's already extremely low thresholds for Medicaid 
eligibility mean that we are unlikely to further reduce our eligibility 
standards. However, we do cover an additional 125,000 individuals who 
are not eligible under our Federal program using only local funds. 
These government enrollees may lose coverage if no further Federal 
funding is appropriated. Reductions in benefits are almost certain and 
would be focused on non-mandatory benefits such as dental and 
prescription drug coverage.

    Question 2. Last Congress, in response to the devastation of 
Hurricanes Irma and Maria, we successfully secured an increase in the 
Federal cap to $4.8 billion for Puerto Rico's Medicaid program at 100 
percent FMAP, which expires at the end of this fiscal year. Within 
this, an increase was to be made available if HHS certified that Puerto 
Rico had taken steps to report reliable data to the Transformed-
Medicaid Statistical Information System and had established a Medicaid 
Fraud Control Unit.

    2a. Has Puerto Rico been able to access the entire $4.8 billion 
increase in the cap, including the additional $1.2 billion?

    Answer. Yes, Puerto Rico met the required standards to access all 
funds. The report to Congress issued by the Centers for Medicare and 
Medicaid Services (CMS) noted that Puerto Rico implemented the 
requested requirements faster than any other state or territory. This 
demonstrates Puerto Rico's capacity to operate a program of the highest 
standards so long as adequate funding is available.

    Question 3. Did HHS certify that Puerto Rico was reliably reporting 
data and established a Medicaid Fraud Control Unit? What is the status 
of the implementation of a Medicaid Fraud Control Unit in Puerto Rico?

    Answer. Yes, the island's Medicaid Fraud Control Unit (MFCU) is 
fully certified and operational. It has already received referrals and 
is conducting investigations, in coordination with the HHS-OIG.

    Question 4. How does the long-standing, unequal treatment under the 
Medicaid program, and the fact that we are facing a cliff every couple 
of years, impact the Government of Puerto Rico's ability to budget for, 
modernize and reform our healthcare system? How does it impact your 
ability to deliver high-quality services to our most vulnerable 
citizens?

    Answer. Without predictable, long-term funding solutions, the 
Government of Puerto Rico is unable to plan and reliably manage 
necessary changes and improvements to the Medicaid program such as 
adding mandatory benefits like nursing home facilities, expanding 
eligibility standards, or increasing provider payments. The temporary 
funding solutions that Puerto Rico has received in the past have been 
helpful and necessary but have resulted in short-term solutions that do 
not allow Puerto Rico to responsibly plan and strategize for the 
future. Puerto Rico needs the security to invest in sustainable 
permanent solutions on which our beneficiaries and providers can count 
on.
    Additionally, facing a funding cliff every few years consumes 
considerable time and effort in order to create contingency plans, 
budget scenarios, and devising strategies to advocate for Federal 
funds. The time and money spent on this recurring matter can be better 
spent on improving the program and quality of services offered.

    Question 5. As you are aware, over the last couple of years Puerto 
Rico has been facing a shortage of doctors. Some estimates show that 
from 2006 to 2016, the number of physicians and surgeons on the island 
dropped from 14,000 to 9,000. This trend was undoubtedly exacerbated by 
the 2017 hurricanes.

    5a. Can you elaborate on how many doctors are currently on the 
island and briefly discuss how the Medicaid cliff and the uncertainty 
of funds contribute to our shortage of physicians? How does it prevent 
us from attracting new medical professionals?

    Answer. The question for Puerto Rico's Medicaid program is not just 
the number of physicians available on the island, but instead the 
number who are willing to participate as providers in the Medicaid 
program where reimbursement rates are very low. The number of providers 
has decreased over the years due (in part) to low reimbursement rates, 
deteriorating infrastructure, and practice conditions. As Puerto Rico 
has difficulty incentivizing new physicians to move to or stay on the 
island, older physicians are retiring and reducing the available 
workforce.
    The exodus and attrition of providers is especially critical for 
specialist who receive much higher reimbursement rates and enjoy more 
favorable work conditions on the mainland. The uncertainty of Federal 
funds has not permitted Puerto Rico's Medicaid program to invest in 
provider reimbursements and payment arrangement that can attract and 
retain our healthcare professionals. In fact, the FOMB has permitted 
ASES to temporarily suspend planned provider reimbursement cuts thanks 
to the BBA funding provided after the hurricanes. However, this 
temporary stay is only permitted while these funds are available. 
Therefore, the long-term planning of initiatives that can help retain 
and attract providers is not dependent on the amount of funding 
available at any given moment, but the certainty that any initiative 
that we develop will have enough financing from both local and Federal 
funds in the longer term.

    Question 6. You mentioned in your written statement that due to 
Puerto Rico's unequal treatment under the Medicaid program and the 
historically low funding we receive, the island has been forced to 
limit Medicaid eligibility to income levels well below the Federal 
poverty level used by the states.

    6a. Do you have an estimate of how many Medicaid eligible 
individuals are currently not covered in Puerto Rico because of the 
disproportionately low level of Federal funding? How many more people 
would we be able to cover if the island received state-like treatment?

    Answer. If Puerto Rico received state-like treatment, the Federal 
Medical Assistance Percentage (FMAP) would be approximately 83 percent, 
and the amount of Federal funds received would not be capped. This 
would allow Puerto Rico to increase the Puerto Rico Poverty Level 
(PRPL) to cover currently uninsured populations. Based on projections, 
we would increase the PRPL to provide Federal Medicaid to approximately 
140,000 additional individuals.

    Question 7. It is my understanding that although the Federal rules 
for Medicaid benefits generally apply to the island, Puerto Rico 
provides only 10 of Medicaid's 17 mandatory benefits, in large part due 
to insufficient funding.

    7a. Could you provide examples of services currently covered by 
Medicaid in the 50 states but that you are not able to offer in Puerto 
Rico due to this unequal treatment? 

    Answer. Due to inadequate Federal funding and unequal treatment, 
Puerto Rico is unable to provide the same Medicaid benefits to its 
residents as states provide. As a result, the nearly 1.5 million 
Medicaid recipients in Puerto Rico do not receive:

     Home Health Services for those entitled to Nursing 
            Facility Services

     Nursing Facility Services

     Certified Pediatric and Family Nurse Practitioner Services

     Non-Emergency Medical Transportation

     Nurse Midwife Services

     Freestanding Birth Center Services

     Emergency Services for Legalized and Undocumented Aliens

    Question 8. Ms. Avila, would you agree that not addressing the 
Medicaid cliff, in Puerto Rico and the rest of the U.S. territories, 
will cost the Federal Government and the American taxpayer more money 
over time than if we enact a solution now?

    8a. For instance, any money that is currently being saved by not 
giving Puerto Rico equal treatment will likely be at least partially 
offset by the additional costs borne by the Federal Government and 
state governments as a result of conditions-based migration from Puerto 
Rico to the U.S. mainland?

    Answer. Yes, our experience has been that the need for appropriate 
medical care does not disappear simply because it is not available. 
Puerto Ricans have been moving to the U.S. mainland for a variety of 
reasons for a long time, including the need for improved health care. 
When they do, they join a state-side Medicaid program and begin 
accessing care at a rate that is twice or even four times more 
expensive than in Puerto Rico, who currently has the lowest per member 
per month rates among the states. Knowing that people will seek medical 
care with or without insurance coverage and that the care provided in a 
planned and preventative manner is better and less expensive care, it 
is certainly more cost-effective to enact a long-term sustainable 
funding solution now.

    8b. Isn't it more cost-effective to enact a long-term solution?

    Answer. Analysis performed by the Medicaid and CHIP Payment and 
Access Commission (MACPAC) has shown that the total Medicaid spending 
per enrollee in Puerto Rico is less than just the Federal Share of 
Medicaid spending for the lowest cost state. The analysis accounts for 
the additional benefits that are covered in the United States and are 
not covered in Puerto Rico to make apt comparisons. This means that if 
a Puerto Rico enrollee moves to any of the states, the Federal 
Government will be paying more per person than the total cost per 
person of providing care in Puerto Rico (Federal + Local funds). This 
spending difference will also grow over time because healthcare cost 
increases tend to be higher in the mainland United States than in 
Puerto Rico.

    Question 9. Over the past few years this Committee has made it a 
priority to ensure Puerto Rico has the necessary tools to improve our 
economy and stabilize our finances although it's important to recognize 
that this Committee doesn't have jurisdiction over the Medicaid 
program.

    9a. Could you discuss how the Medicaid cliff hurts these efforts? 
That is, how does it hurt Puerto Rico's economy and our efforts to 
balance our budget and stabilize our finances?

    Answer. The Medicaid program is approximately 30 percent of the 
Government's FY 2020 budget and provides healthcare benefits to close 
to half of the island's population. Consequently, the Medicaid programs 
expenditures, in the form of reimbursement to providers, contracting of 
local vendors, and payment for ancillary services is a large 
contribution to the Puerto Rico healthcare industry and ultimately the 
island's economy. If the program does not receive any additional 
Federal funding, the financing of the Medicaid program will decrease, 
because the funding gap leftover by the cliff cannot be replaced with 
state funds. Consequently, the money that is paid to our providers, 
hospitals, ancillary healthcare workers and for administrative support 
will greatly decrease and will cause a downstream economic decrease, 
job loss, and further deterioration of the healthcare infrastructure.
    As long as the funding provided for the program is insufficient, 
the Government must allocate funds from other necessary services such 
as education, roads, and infrastructure projects thus hurting the 
overall economy and investment.
    The Congressional Task Force on Economic Growth in Puerto Rico 
report of the 114th Congress recommended that Puerto Rico and the 
territories should be treated in a more equitable and sustainable 
manner in Medicaid funding for many reasons, including to ``stabilize 
and strengthen the fiscal condition of the territory governments.'' 
Sufficient and long-term Federal funding for the Medicaid program will 
mean that Puerto Rico will have the ability to adequately compensate 
providers, increase hospital investment, incentivize investment in 
healthcare infrastructure and provide security to our healthcare 
workers and beneficiaries that the program will improve and provide 
better quality services. Undoubtedly, this certainty will have a 
positive economic effect for Puerto Rico's economy as a whole as the 
Congressional Task Force on Economic Growth in Puerto Rico recognized.

    Question 10. It has been said that there is no real ``Medicaid 
Financing Cliff'' for Puerto Rico because the Financial Oversight and 
Management Board established by PROMESA has required the Government of 
Puerto Rico to assume that no further Federal financing will be 
provided and to fund this program as part of the Fiscal Plan.

    10a. Why should Congress increase the funding for the Puerto Rico 
Medicaid program, if according to some, sufficient local funds have 
been set aside for this purpose?

    Answer. The premise that there are sufficient local funds set aside 
for this purpose is incorrect. The method by which the FOMB considers 
the expiration of Federal funds in relation to the long-term financing 
of the program, is not by providing additional local funds to replace 
the gap leftover by the Medicaid Cliff, but by making ``significant 
reductions in healthcare spending necessary.'' The fiscal plan details 
the ``stop-gap measures'' that will be implemented to compensate for 
the loss of Federal funding such as: reduction in provider 
reimbursement, elimination of benefits, restricting access to care, and 
increases in member cost-sharing. Furthermore, the FOMB has not 
evaluated the viability of these stop-gap measures or taken into 
account the downstream effects of these cuts for the Puerto Rico 
healthcare system and Puerto Rico's economy as a whole.
    While we agree that some initiatives presented in the fiscal plan 
are achievable and are being diligently implemented, such as improving 
quality of care via value-based payments, and reducing fraud, waste, 
and abuse, to conclude that the fiscal plan provides a path for a 
sustainable Medicaid program with no additional Federal funding is 
false.

    Question 11. How will the overall healthcare system and the non-
Medicaid population in Puerto Rico be affected if Medicaid funding is 
not increased for FY 2020?

    Answer. If no additional funds are appropriated, the cost of health 
care in Puerto Rico is expected to rise overall. The amount of 
uncompensated care borne by our hospitals, Federally Qualified Health 
Centers and other safety net providers will rise. Much of that cost 
will be passed on through higher fees and premiums to individuals with 
private insurance and those who are uninsured. Shortages of providers 
will continue to increase, and general health outcomes will worsen. 
When people are unwell, they are less productive at home and at work 
and ultimately further deteriorate the well-being of the island's 
economy overall.

    Question 12. Currently, the Social Security Act provides for capped 
Medicaid funding for the territories. For FY 2017, the cap in Puerto 
Rico was $347.4 million. How much did the Medicaid program benefits 
actually cost?

    Answer. Approximately $2.4 billion in Medicaid-only spending, at 
current program levels, which reflects unsustainably low provider rates 
and does not include certain mandatory services such as nursing health 
facilities, hepatitis C drugs, and non-emergency medical 
transportation, among others.

                                 ______
                                 

    Vice Chair Sablan. Thank you very much, Ms. Avila.
    We are going to go to questioning. Members will have 5 
minutes.
    But before I do that, I would like to ask unanimous 
consent--I have a set of six questions. I can hear all of us 
here speaking to the fact that we all want to be part of the 
full Medicaid program, state-like. So, I have the six questions 
that I am going to ask you to take home, and if you could 
provide us your written response within 10 days, they would 
become a part of the record.
    And it is not just a matter of money. There are many 
requirements that all of us, our governments, have to set up 
before we could become eligible for the full program like any 
state or like the District of Columbia.
    So, if I may, I have for each one of you, all of the state 
directors--and Helen can share with Esther and work together on 
responses.
    Thank you, all of you, for your valuable testimony.
    The Chair will now recognize Members for questions. Under 
Committee Rule 3(d), each Member will be recognized for 5 
minutes.
    I would like to recognize myself--actually, I am going to 
recognize the gentlelady from American Samoa first. She needs 
to catch a flight.
    Congresswoman Radewagen, you have 5 minutes, please.
    Mrs. Radewagen. Thank you, Vice Chairman Sablan and Ranking 
Member Gonzalez-Colon, for putting together this hearing on the 
Medicaid cliff currently facing the U.S. territories.
    The Medicaid funding provided by the ACA is set to expire 
this calendar year, and the lack of a funding solution will be 
particularly harmful for American Samoa, as I know it will be 
for the other territories.
    I would like to thank our witnesses for making the long 
trip to Washington to testify before the Committee today. 
Welcome. Each of your firsthand experiences will provide 
Congress with an accurate assessment of the situation.
    ACA's first allotment of funds became available in July 
2011, long before I and many of us here were elected to 
Congress. Those funds were only accessible after the normal 
annual allotment was exhausted.
    The Medicaid and CHIP Payment and Access Commission, 
otherwise known as MACPAC, published a fact sheet for American 
Samoa which has a historical table of total Medicaid spending 
from Fiscal Year 2011 to Fiscal Year 2017, taken from reported 
expenditures to the Centers for Medicare and Medicaid Services. 
The average total Medicaid expenditure in American Samoa, 
according to MACPAC's report, is $30 million for that period.
    Mr. Chairman, I ask for unanimous consent to enter into the 
record a March 2019 MACPAC report on Medicaid and CHIP in 
American Samoa; a May 2019 MACPAC issue brief on territory 
exhaustion of Federal Medicaid funds; the April 2016 GAO report 
on Medicaid in the U.S. territories; and a letter to Governor 
Lolo Matalasi Moliga dated March 15, 2019.
    Vice Chair Sablan. Without objection, so ordered.
    Mrs. Radewagen. I do have a couple of questions here for 
the Director.
    The maximum FMAP is statutorily set at 83 percent. Now, if 
Congress is unable to align the territory FMAP formula to that 
of the states, is there a level that American Samoa, given an 
appropriate Federal cap, would be able to sufficiently operate 
the Medicaid program?
    Ms. Young. The answer to that question would be yes.
    Our major Medicaid provider is the hospital, and the 
hospital has the best payment method under the state plan, 
which is a certified public expenditure. So, we don't have a 
real issue with the local match or the FMAP with our local 
hospital. It really has to do with the new services and any 
future planned services that we want to do outside of the 
hospital, which is very much needed, and this includes the 
Department of Health.
    I cannot comment exactly on what the appropriate FMAP would 
be that we could give that would make it sustainable. But based 
on historical utilization of what we have used, it would be 
about 80 percent, minimum 80 percent, for FMAP. But we can 
definitely do more financial analysis, study our history of 
spending, and give you a more accurate FMAP.
    Mrs. Radewagen. Thank you. Thank you for your response.
    We know the FMAP and the Federal caps need to be changed 
because they are not equitable to the territories. FMAP aside, 
what is the needed amount of Federal funding to fully support 
American Samoa's Medicaid system?
    Ms. Young. Currently, we have submitted information that 
what we would like to request is a $30 million annual allotment 
for Medicaid.
    This is based on the historical spending out of the 
Medicaid spending that we have. I provided a chart of 
expenditures, historical expenditures, based on the 
availability of the ACA, that shows that we need, for the 
hospital alone, an additional $8 million for the $20 million 
Federal share, and then we would need an additional $10 million 
for all new services for Federal share. That would make it a 
$30 million Federal share block grant increase for American 
Samoa.
    Mrs. Radewagen. Thank you, Director.
    I have more questions that I will be submitting for the 
record.
    Mr. Chairman, I yield back.
    Vice Chair Sablan. Thank you.
    The gentlelady yields back.
    I would like to recognize myself, but before doing so, I 
ask unanimous consent to enter into the record a letter from 
the Financial Oversight and Management Board for Puerto Rico; a 
letter from the Association of Asian Pacific Community Health 
Organizations; a letter from national and community 
organizations, supported by many organizations, actually, a 
list over 20; and also a letter from the Guam Regional Medical 
City that I have been asked to submit for the record.
    Miss Gonzalez-Colon. Mr. Chairman?
    Vice Chair Sablan. Yes?
    Miss Gonzalez-Colon. Mr. Chairman, sorry to interrupt. Can 
I do the same thing and introduce something?
    Vice Chair Sablan. When I recognize you, yes, you can.
    Miss Gonzalez-Colon. OK. Perfect.
    Vice Chair Sablan. Thank you.
    I now recognize myself for questioning.
    Ms. Sablan, hafa adai, Helen. Welcome. I want to compliment 
you on how you and all your colleagues, including Ms. Muna, 
manage the Obamacare money.
    American Samoa, Guam, and the U.S. Virgin Islands, they 
have hundreds of millions of dollars of Obamacare funding 
unspent, but you have been able to use up all your money. Is 
that correct?
    Ms. Helen Sablan. Yes.
    Vice Chair Sablan. And you used certified public 
expenditures to make the local match and release the Federal 
funds. Is that also right?
    Ms. Helen Sablan. Yes. We work at the hospital to use the 
CPE for our local match.
    Vice Chair Sablan. And that is good, because the 
Commonwealth Government would have had to match the $109 
million we put into Obamacare with about $50 million of local 
funds, but the Commonwealth did not make that match, did it?
    Ms. Helen Sablan. No. We don't have the money.
    Vice Chair Sablan. That is interesting, actually, because, 
all last year, the Chairman of the Northern Marianas 
Legislature Ways and Means Committee kept bragging about how he 
was responsible for the biggest budget ever in the Commonwealth 
history, yet he could not find matching funds for Obamacare 
Medicaid money.
    So, again, I understand that you have had to stop making 
medical payments to private providers at this time, yes?
    Ms. Helen Sablan. That is right.
    Vice Chair Sablan. And you also have had to stop paying for 
Medicaid patients to use the federally qualified Kagman 
Community Health Center. Is that correct?
    Ms. Helen Sablan. Yes.
    Vice Chair Sablan. Could the Kagman Community Health Center 
also use the CPE system to make the local match?
    Ms. Helen Sablan. No.
    Vice Chair Sablan. OK.
    While I know that our legislature is not paying its share 
for Medicaid, it is not your responsibility. You have to do the 
best you could with what you were given--or, actually, not 
given, I guess I would have to say, right?
    Ms. Helen Sablan. Yes.
    Vice Chair Sablan. And, working with the Federal Centers 
for Medicare and Medicaid Services, the Marianas' congressional 
office was recently able to help you get another $8.2 million, 
but that has to be adjusted, and we could now be down at $4 
million.
    But we also have another $36 million in the disaster 
supplemental appropriation, where it is my hope that you could 
see yourself through the end of the year.
    Would that help you, help your program?
    Ms. Helen Sablan. Yes. Thank you, Congressman. That would 
be very much appreciated.
    Vice Chair Sablan. OK. Again, I want to thank you.
    I have a little bit more time.
    Now, Ms. Muna, thank you also, Esther, for coming here, and 
thank you for helping managing this program and, of course, 
their only hospital.
    What I want to know, Ms. Muna, is how important Obamacare 
funding has been to the hospital. You said local funding was 
cut in 2010, from about $40 million to $5 million, for your 
hospital. But then Obamacare began in 2011. Without Obamacare, 
would the hospital have stayed open?
    Ms. Muna. I don't think so.
    Vice Chair Sablan. At the same time you were losing local 
funding, you were also in danger of losing CMS certification. 
Without Obamacare, would you have lost certification?
    Ms. Muna. Absolutely.
    Vice Chair Sablan. Wow. And, of course, if you lost 
certification, that would mean Medicare patients, as well as 
Medicaid patients, probably as well as private insurance 
patients, could not use the hospital. Is that correct?
    Ms. Muna. That is correct.
    Vice Chair Sablan. So, you testified that Obamacare money 
made it possible to see more patients and to expand services. 
You tripled your medical staff, added specialty services, 
including oncology, and implemented a quality assurance unit. 
Is that right?
    Ms. Muna. That is correct.
    Vice Chair Sablan. And Medicaid money helped?
    Ms. Muna. Yes, absolutely.
    Vice Chair Sablan. And as a result of these improvements, 
patient outcomes have improved for our Northern Marianas 
patients?
    Ms. Muna. Yes, and we will be able to have it at home.
    Vice Chair Sablan. And readmission rates have improved?
    Ms. Muna. Correct.
    Vice Chair Sablan. You said that the hospital revenues also 
quadrupled during this time. It looks like the improvement in 
services that Medicaid made possible helped to make the 
hospital more financially viable. Is that true?
    Ms. Muna. Yes, it is true.
    Vice Chair Sablan. So, to summarize, the Obamacare that 
Congress provided you, $109 million, meant the hospital stayed 
open, helped you keep your certification, expand services, 
improve patient outcomes, and add to your bottom line.
    Ms. Muna. Yes.
    Vice Chair Sablan. OK.
    In my last 10 seconds, ladies, please, the six questions 
you have, I would really like for you to respond in writing to 
the Committee in 10 days. It is going to be part of the hearing 
record. It is critical that we answer that as completely and as 
correctly as possible.
    Thank you. My time is up.
    At this time, I would like to yield to my colleague, the 
Ranking Member, Miss Gonzalez.
    Miss Gonzalez-Colon. Thank you, Mr. Chairman.
    And before my time commences, I want to ask unanimous 
consent to put in the record a memorandum of the Medicaid 
financing in Puerto Rico and the U.S. Virgin Islands made by 
the Kaiser Foundation. They were in a panel yesterday of health 
care that we did here with the Puerto Rico administration, 
Moran Group, and many others in the private sectors. So, this 
will be one.
    And the second one will be a letter from the Puerto Rico 
Hospital Association to be introduced in the record.
    Vice Chair Sablan. Without objection, so ordered.

    [The information follows:]

PowerPoint Slides submitted by Rep. Gonzalez-Colon

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                        Statement for the Record

                            Jaime Pla Cortes

      Executive President of the Puerto Rico Hospital Association

    Chairman Grijalva, Ranking Member Bishop and Committee Members:

    Thank you for the opportunity to present my statement on behalf of 
the Puerto Rico Hospital Association (PRHA) representing our 58 
hospital members and over 45 thousand plus health care professionals 
and staff. Hospitals are the core of our island's health care system 
and vital to the quality of life for the 3.4 million U.S. Citizens 
residing in our Territory; the Commonwealth of Puerto Rico.

    We appreciate this hearing's attention to the impending ``Medicaid 
Cliff'' facing Puerto Rico's Medicaid system in the third quarter of 
2019. Without action by Congress, we face the devastating loss of 85% 
of our Federal Medicaid funding likely forcing a large number of 
Medicaid enrollees to lose their coverage and jeopardize the financial 
viability of our island's hospital system.

    It is vitally important to note that the Medicaid Cliff and the 
uncertainty it has created over the past decade has been a major 
contributing factor to the loss of doctors, specialists and health care 
professionals who have been recruited away by Stateside health care 
systems offering more generous compensation packages. The uncertainty 
and financial squeeze imposed on Puerto Rico's hospitals and other 
providers has made it very difficult to offer attractive and 
competitive compensation packages to retain our experienced, bilingual 
medical staff and professionals. The inability of our Medicaid system 
to provide a reimbursement increase for hospitals and other providers 
since 2011 due to the combination of the reduced level of Federal 
funding along with uncertainty of the impending Medicaid Cliff has been 
a primary factor for this loss.This has certainly impacted the ability 
of Puerto Rico's health care system to provide readily available care 
to the Medicaid population as well as to the general population 
throughout Puerto Rico.

    For example, we have witnessed a significant loss of doctors, 
specialists and healthcare professionals over the past decade. The 
waiting lists to see specialists has grown and it is impacting the 
availability of care. In the area of Pediatrics, we only have one 
remaining Child Psychologist currently serving the entire island of 
Puerto and I will emphasize that the majority of children born on our 
island are Medicaid eligible. Overall, we have witnessed a significant 
drop in the overall availability of specialists over the past decade 
increasing waiting times for patients and general decrease in 
availability of specialized care.

    Another consequence of the uncertainty created by the Medicaid 
Cliff is the impact on the ability of Puerto Rico's hospitals to 
modernize and upgrade their physical plant and facilities as well as 
medical diagnostic and treatment technologies. Approximately, 90% of 
local hospitals are privately owned and have 30-40 year old buildings 
and physical plant. These hospitals are dependent on bank financing to 
make physical improvements and upgrades. However, the short-term 
approach to addressing the Medicaid Cliff has resulted in the Puerto 
Rico's banks being hesitant to provide financing for improvements. 
Puerto Rico's hospitals are willing to invest and want the most state-
of-the-art facilities and equipment to provide quality health care. We 
must remember that banks always look at the long-term ability of their 
clients to repay their loans and without the guarantees provided by a 
permanent solution to the Medicaid Cliff, bank financing has been 
limited. This lack of financing has delayed and frozen the ability of 
local hospitals to modernize and obtain the best medical technologies.

    We must also draw attention to the recently negotiated Debt 
Restructuring Agreement (RSA) between Puerto Rico's electric utility 
monopoly, PREPA, and its bondholders. Respected Third Party experts 
predict this RSA will cause an increase of 28% in costs to consumers 
and local hospitals. Hospitals do not receive any discounted rate from 
PREPA and this will only burden local hospitals further with financial 
pressures. The PRHA has joined many organizations in opposition to this 
RSA and we hope the Federal Courts will reject it.
BACKGROUND:
    Like many States, America's largest Territory; Puerto Rico, 
operates its Medicaid system by enlisting managed care to serve a 
jurisdiction of 3.5 million U.S. Citizens. However, that is where the 
similarity ends as Puerto Rico's eligibility for Federal Medicaid 
funding is statutorily capped at $375 million annually, limiting the 
total amount of funding it can receive compared to any State which 
operates with no funding cap. Oregon for example has a similar 
population size, although with a much smaller poverty level and still 
receives $5 billion in Federal Medicaid funding.

    An estimated 1.25 million of PR's population is now eligible for 
Medicaid. Hurricane Maria left the island with a weaker economy and 
reduced population. However, the Medicaid-eligible population has 
increased as a proportion of the population and the majority of 
newborns today are Medicaid eligible.

    Every health care provider in PR is a Medicaid provider including 
all hospitals, doctors and community health care centers. Without 
action by Congress, it is projected that PR will lose an estimated 85% 
of its Federal funding later in 2019, when the Cliff occurs with 
terrible consequences for the local health care system. To maintain the 
current level of overall Medicaid funding, it will require an 
allocation of $1.625 Billion in Federal funding to just maintain the 
balance while returning to the 55% FMAP.

    Many Stateside policymakers have made an incorrect assumption about 
Medicaid coverage available in Puerto Rico, unfortunately, reduced 
Federal support has also caused limitations in what Puerto Rico's 
Medicaid system will offer Medicaid-eligible patients. Some of the 
important coverage offered Stateside that is not available to Puerto 
Rico's Medicaid population due to financial constraints include these 
listed below:

     Durable medical equipment

     Home healthcare

     Other non-durable medical products

     Skilled Nursing care facilities

     Continuity care retirement communities

     Rehab

     Institutional rehab services

    We argue it's time to come up with a permanent solution that 
provides long-term stability to our health care system so that our 
hospitals retain our doctors and health care professionals currently 
being recruited away by better salaries and stable health care systems 
located Stateside.

    In previous years, Puerto Rico health care providers have asked to 
remove this funding cap and provide for equitable treatment under 
Medicaid for our Medicaid system. Congress last attempted to address 
this need in the FY 2018 by providing for an allocation of additional 
funds with the anticipation that these funds would be exhausted in the 
last quarter of FY 2019. Congress also waived the FMAP requirement to 
provide a local match due to the devastating impact of the hurricane on 
local government finances. CMS has since certified that PR's Medicaid 
system has met the requirements to establish a Medicaid Fraud Unit and 
provide for better data collection. Time has now passed, and these 
additional funds are now projected to be exhausted at the end of the 
Federal Government's FY 2019; only one quarter of the way through 
Puerto Rico's upcoming fiscal year.
A PERMANENT SOLUTION NOW IS NEEDED DURING THE MID-YEAR OF 2019:
    The Governor's recent request on May 1st for an allocation of $15.1 
Billion to be dispursed over five years with an 83% FMAP is a major 
step forward toward this goal. We believe that permanently removing the 
statutory cap will help Congress achieve this goal to provide greater 
confidence to our health care system and allow for delivery of the 
highest quality health care which we all wish to deliver to the U.S. 
Citizens of Puerto Rico.

    The Puerto Rico Medicaid system needs to enter into contracts for 
its FY 2020 Medicaid Program immediately because CMS must certify that 
these contracts are actuarily sound before they can go into effect for 
the local FY 2020 operating budget for the coming year. Without the 
confidence of certainty regarding the level of funding available, it 
will be very difficult to attract willing contractors to administer and 
implement a managed care system between July 1, 2019, and June 30, 
2020. The current fiscal state of the local government prevents it from 
making up any of the difference; something no State would be asked to 
do.

    We continue to urge removing the current statutory cap to allow 
equal access for Medicaid funding needed to maintain a quality health 
care system for the 1.25 million Medicaid eligibles in Puerto Rico. 
Frankly, the uncertainty of Federal funding complicates our ability to 
retain and recruit doctors and other vital health care professionals 
who are constantly tempted to leave our island for higher salaries 
elsewhere in the United States. The uncertainty over Congress's 
resolution of the Medicaid Cliff also hampers the ability of local 
hospitals to obtain bank financing for moderation and upgrades.

    We ask that a provision be included in the first available Federal 
funding package to be acted on by Congress to provide continuity for 
Puerto Rico's health care system. We've suggested language which 
provides a permanent solution to prevent the Cliff from occurring in 
the coming year by eliminating the statutory cap on Puerto Rico's 
Medicaid funds.

    PR's health system and its hospitals are under a tremendous amount 
of financial stress because of the island's weak economy and overall 
underfunding by Medicaid. The lack of certainty regarding funding 
complicates the ability to meet CMS requirements for operation of PR's 
Medicaid program for the coming Fiscal Year beginning July 1, 2019.

    Here's the sense of urgency: Many doctors and health care 
professionals would prefer to remain in their homes in Puerto Rico but 
the lack of certainty is weakening their resistance to being recruited 
away by other offers. Hospitals are laying off workers and continue to 
reduce services. Local hospitals also struggle to obtain the bank 
financing needed to upgrade and modernize their facilities. It will 
take many years to recover the current capacity of PR's health care 
system if more talented and experienced health professionals leave the 
island and hospitals are unable to modernize their facilities. By 
providing certainty through a permanent solution, Congress can inject 
the needed sense of confidence to PR's hospitals necessary to continue 
delivering the high level of quality care expected by patients and the 
Federal government and retain top medical staff.

    We also emphasize that Congress has continually returned to face 
this issue of the Medicaid Cliff and removing the cap will eliminate 
the need for Congress to return to the issue time and time again. 
Removing the statutory cap will be the permanent solution to this 
perennial problem facing Puerto Rico and the Congress.

    We are prepared to collaborate and provide whatever information is 
necessary to address and solve this urgent issue and we look forward to 
working with you.

                                 ______
                                 

    Miss Gonzalez-Colon. Thank you, Mr. Chairman.
    Now we will begin with my line of questioning.
    In the case of Puerto Rico, actually, I have some slides 
regarding some of the data that it is important to know, the 
difference.
    This is the Medicaid funding that has been approved for all 
the territories. When you see the difference of the spending in 
terms of how much is Federal funding approved and how much is 
state-funded or territories put in their money, you can see 
that most of our territories are actually doing the spending by 
using local funds to comply with the requirements of the 
programs.
    If the Congress is not acting, a lot of people are going to 
lose their insurance, a lot of people are going to lose their 
services. And that is the reason behind this hearing.
    The other information I want to show is how different it 
is, the spending for territories and for the states. In the 
case of Puerto Rico, as an example, you can have Mississippi 
and many other states receiving more than $7,000 per enrollee 
and less than $2,000 to our territory. And I know this is kind 
of the same thing with the rest of the territories as well.
    That is the reason the FMAP, the formula for the matching 
funds, needs to be changed. There are several options to this. 
We can have 100 percent Federal cost share, like we did during 
the bipartisan bill last year, and Puerto Rico got $4.8 billion 
for 2 years, and they are going to be expired in December; or 
we can lift the cap of 55 percent, and that would allow in the 
case of Puerto Rico, with their per capita, up to 83 percent of 
Federal funding.
    And I think this is the best way to do it, just allowing 
the territories to have the same formula as the states. And 
that is a bill that we actually filed.
    And there, we are talking about how much money we will be 
receiving in each state if we don't do something with that. In 
that case, I would like to ask--this is the difference between 
some states for Medicaid funding per enrollee. We are not 
talking about a difference of just 20 percent. It is up to 70 
and 80 percent of difference, the funding that the states are 
receiving.
    In the case of Puerto Rico, we are losing providers, we are 
losing doctors. Our professionals in the healthcare system are 
receiving less than half of whatever other professionals are 
receiving in the mainland. And that is the reason we are losing 
a doctor per day during the last years. During the last 10 
years, we have been losing a lot of our professionals, even 
lacking specialized physicians.
    So, Ms. Avila, I would like to begin with you, and I would 
love to have an answer directly in ``yes'' or ``no'' or the 
numbers.
    How many people in Puerto Rico will lose their healthcare 
coverage if we do not address the impending Medicaid cliff? And 
how many people will see their benefits or coverage service be 
reduced if Congress is not acting by September of this year?
    Ms. Avila. We have found out, according to the reading 
statements that we are----
    Miss Gonzalez-Colon. Just a number. I just need a number.
    Ms. Avila. Well, approximately 600,000 lives. And that will 
be if we can keep the program viable for Puerto Rico.
    Miss Gonzalez-Colon. OK, 600,000 people may lose their 
insurance if we do not act by September.
    Ms. Avila. That is right.
    Miss Gonzalez-Colon. OK.
    In the last Congress, I just said that we received $4.8 
billion that were approved and the President signed after the 
hurricane season. As of this Sunday, $1.2 billion were made 
available through HHS if Puerto Rico certified that they have 
reliable data to the Transformed Medicaid Statistical 
Information System and established a Medicaid fraud control 
unit.
    The question will be, has Puerto Rico been able to access 
the entire allocation of $4.8 billion, including the additional 
$1.2 billion?
    Ms. Avila. Yes. The answer is yes.
    Miss Gonzalez-Colon. OK. Did HHS certify that Puerto Rico 
had reliable reporting data and established a Medicaid fraud 
control unit?
    Ms. Avila. Yes, that is correct.
    Miss Gonzalez-Colon. How does the unequal treatment under 
the Medicaid program and the fact that we are losing a lot of 
our people every year--how does the Government of Puerto Rico 
have the ability to budget for, modernize, and reform our 
healthcare system if we don't receive the money?
    Ms. Avila. We are not allowed to forecast any funding that 
we don't have any assurance. It has to be certified. This is 
because the fiscal board requires that.
    Miss Gonzalez-Colon. So,the Oversight Board required to the 
island to include all future plans regarding health care. And 
that means, if we don't receive the money, the state, in this 
case Puerto Rico, needs to put up front the money from the 
state to do the job that the Federal Government is supposed to 
do in the state.
    Ms. Avila. Yes, that is correct.
    Miss Gonzalez-Colon. Thank you.
    I will wait for a second round of questions. Thank you, Mr. 
Chairman.
    Vice Chair Sablan. I like the Ranking Member's suggestion. 
But thank you.
    At this time, I would like to recognize the gentlelady from 
the U.S. Virgin Islands, Ms. Plaskett, for 5 minutes.
    Ms. Plaskett. Thank you, Mr. Chairman.
    And thank you to all of the witnesses who are here.
    I didn't see Mr. Smith with you, sitting behind you. I 
guess he is there to provide support and any additional 
information.
    Thank you, as well, for being with us.
    I wanted to just get straight to the questions, because I 
know in your written testimony you give a lot more statistics 
and a lot more specific examples of how this has affected us.
    We have seen on the chart that was demonstrated by my good 
friend and my colleague about the difference between what we 
have provided locally as well as what the Federal Government 
has provided.
    But one of the things that I need to highlight and I think 
would be important for you to highlight, specific to the Virgin 
Islands--which may be different from other places; I am not 
sure. You stated that there were approximately how many people 
that would need to come off of the books or the support that we 
are receiving now if this funding ends? Meaning, how many 
people presently have we been able to include that no longer 
will be able to receive those services?
    Ms. Rhymer-Browne. We would have to reduce upward of 15,000 
individuals of the 27,000, approximately, members of the 
Medicaid program.
    Ms. Plaskett. Great.
    But I think another number that was not brought out that I 
would love for you to--if you have that number, is, how many 
individuals would we like to bring on the rolls that we believe 
qualify for Medicaid but we have not given those services to?
    Ms. Rhymer-Browne. An additional 15,000 to 20,000 
individuals who would be eligible for the Medicaid program.
    Ms. Plaskett. So, there are individuals that are presently 
in the Virgin Islands, maybe in other territories as well, who 
are just not receiving any health insurance. We have a large 
population that have no health insurance that would qualify 
except for the fact that there is this arbitrary cap that has 
been put on the amount of money that Congress gives to us.
    And the Virgin Islands, rather than going out and borrowing 
money, finding other ways, we have done the fiscally prudent 
and responsible thing and said we just can't service those 
individuals. Is that correct?
    Ms. Rhymer-Browne. Exactly. That is correct.
    Ms. Plaskett. And how are some of the other ways that this 
is impacting us? If you can talk about the hospitals in the 
Virgin Islands.
    Presently, we do not receive DSH, as other places do, for 
the disproportionate share for hospitals that is an additional 
bump-up that is given in rural areas. Although the Virgin 
Islands qualifies for it, meets the qualifications, Congress 
and CMS have said we would not receive that.
    What are some of the other ways that our hospital 
healthcare services are impacted because of the trickle-down 
effect of not receiving this funding?
    Ms. Rhymer-Browne. Well, our hospitals on an everyday basis 
are struggling even now. Since 2017, they have been 
experiencing extreme infrastructure issues. The hospital is 
unable, because of the limited monies that we are able to give 
them, to bring all of the specialties and all of the 
specialized equipment.
    That is one of the reasons that the hospital has frequently 
called us over the last 2 years to airlift many of the 
individuals who go there who have real catastrophic illnesses 
and need specialized procedures. So, the hospital, in effect, 
has to turn away several individuals who have these extreme 
circumstances and illnesses, and we have to airlift them to the 
United States for treatment.
    Ms. Plaskett. Thank you.
    I know that our governor has declared an emergency with 
mental health issues and others. Can you talk about that very 
briefly?
    Ms. Rhymer-Browne. Yes. Our behavioral health situation is 
really burdened right now. Again, the need for more 
psychiatrists, the need for more of our individuals to have 
long-term care. Behavioral health services, this has been 
hampered because of just the inequities of our hospitals and of 
our Medicaid program as a whole.
    It is very, very important for us to also have a skilled 
nursing facility in both districts of the U.S. Virgin Islands. 
We don't have a skilled nursing program within the territory. 
Our hospitals are really, really burdened to provide behavioral 
health services, as well as our community clinics.
    Ms. Plaskett. Thank you.
    And, finally, could you state the things that the Virgin 
Islands has done, things that we have put in place to provide 
the compliance and the accountability that Congress has asked 
for for Medicaid? I know that there are quite a number of 
systems that we have put in place.
    Ms. Rhymer-Browne. Certainly.
    We implemented the first-ever territory Medicaid Management 
Information System for claims. The CMS also certified MAGI-
compliant our online Medicaid eligibility system. We too 
implemented a Medicaid fraud control unit in 2018. We also 
implemented the TMSIS, the Transformed Medicaid Statistical 
Information System.
    We also will be completing all of our cost report audit 
reconciliations of our two hospitals. We recently completed the 
Medicaid program integrity review. And we have a host of other 
programs that we have been going through for the last few 
years.
    And especially with the ACA dollars, we have been able to 
do all of these things that I just mentioned prior.
    Ms. Plaskett. Thank you so much for all the work that you 
are doing.
    And thank you, Mr. Chairman, for allowing us the 
opportunity to highlight those for our colleagues here in 
Congress.
    Vice Chair Sablan. Yes. Thank you.
    We are going to have a second round of questioning, and I 
am going to start with myself, please.
    Ms. Rhymer-Browne, you just listed a series of items that 
you have implemented in your program, establishing the 
relationship between the extra Medicaid money the Virgin 
Islands received in last year's disaster appropriations and the 
improvements you made in administering the program fraud unit. 
You began reporting data to CMS through the Medicaid Management 
Information System. But you were able do that because of the 
incentive funding included in the disaster bill. Is that 
correct?
    Ms. Rhymer-Browne. That is totally correct. Without that, 
we would have been unable----
    Vice Chair Sablan. That was my next question. I think you 
are reading my script here, right?
    Without that incentive funding, would you have been able to 
add those state-like features to the Virgin Islands Medicaid 
programs?
    Ms. Rhymer-Browne. Could you repeat that, please?
    Vice Chair Sablan. Without that incentive funding, would 
you have been able to do what you did?
    Ms. Rhymer-Browne. No way. We could not have.
    Vice Chair Sablan. So, it seems to me there is a model 
there for how we can add other state-like features to the 
territorial Medicaid programs, that if we provide incentive 
funding, if we give you the resources you need to build 
capacity, then you are willing to do it. Is that right?
    Ms. Rhymer-Browne. We certainly are.
    Vice Chair Sablan. I congratulate the Virgin Islands on the 
work you are doing. And I do think what is happening in your 
islands could be a model, again, for how me make Medicaid more 
state-like in the other insular areas. So, thank you for 
showing us what can be done.
    Let me ask the other directors very quickly: If you had up-
front money to make your programs more state-like, in terms of 
the services you offer and in terms of how you manage your 
system, would you make those changes, become more like a state?
    Ms. Sablan?
    Ms. Helen Sablan. I think so.
    Vice Chair Sablan. OK.
    Ms. Arcangel?
    Ms. Arcangel. Definitely.
    Vice Chair Sablan. Ms. Young, Director Young, could your 
program be run like a state if you had state-like funding?
    Ms. Young. Yes, I believe so.
    Vice Chair Sablan. Thank you.
    And how long do you think that would take? Could you do it 
over a period of 10 years? Would that be reasonable?
    Ms. Sablan?
    Ms. Helen Sablan. Probably.
    Vice Chair Sablan. Ms. Arcangel?
    Ms. Arcangel. I believe so, yes.
    Vice Chair Sablan. Ten years? I didn't hear your answer.
    Ms. Arcangel. Yes.
    Vice Chair Sablan. OK. Wow.
    And Ms. Rhymer-Browne?
    Ms. Rhymer-Browne. Yes.
    Vice Chair Sablan. And, of course, Ms. Avila, I am not 
ignoring you, it is just that Puerto Rico's program is so huge. 
But would you also be able to do these things, some of which 
you are already starting to do?
    Ms. Avila. Yes. The answer is yes. Thank you.
    Vice Chair Sablan. OK.
    Look, the fact is that the Federal Government isn't saving 
money by not treating the territories equally in Medicaid. It 
has been a big factor in many territorial citizens moving to a 
state. So, for example, many Puerto Ricans have abandoned the 
territory for a state. There are more than three-fifths of all 
people of Puerto Rican heritage who live in the states.
    Further, Medicaid programs in the states spend multiples 
per beneficiary of what territories spend--in the case of 
Puerto Rico, three times as much.
    So, they are not treating us the same, but they are not 
saving any money.
    Right, Ms. Avila? They are not giving you the money, but 
the Federal Government is not saving money, because your 
citizens move to Florida and----
    Ms. Avila. I will say that it is more costly for the states 
to have our residents here.
    Vice Chair Sablan. And also costly to us, because we are 
having our people leave home.
    And, again, I cannot over-emphasize the importance of your 
written response, as concise and as complete, to the six items 
I gave you. Those are going to, again, go into the record. It 
will be shared with the committee of jurisdiction, Energy and 
Commerce. And it is a plan that would allow its territory to 
work through a program, get financial incentive to do those 
things that will get us, hopefully, to a full state-like 
Medicaid program, not just in terms of money but in terms of 
services to our citizens.
    My time is up. At this time, I yield to the Ranking Member, 
Miss Gonzalez-Colon.
    Miss Gonzalez-Colon. Thank you, Mr. Chairman.
    And I will take the same question you were asking. You were 
saying about American taxpayers' money will be more effective 
if we address this issue now, because in the case of Puerto 
Rico, at least, more than 1 million Puerto Ricans have just 
moved to Florida. In our case, we just take a ticket and we 
move to a state and we receive the full benefits.
    So, it will take more money for the United States to 
address this issue in the long term. If we fix it now, we may 
save a lot of Federal funds.
    In that sense, I would like to ask Ms. Avila, Puerto Rico 
at this time just offers 10 programs of the 17 Medicaid 
programs. Is that correct?
    Ms. Avila. Pardon? Could you repeat the question? I am 
sorry.
    Miss Gonzalez-Colon. Yes. The Federal rules for Medicaid in 
Puerto Rico, all the same benefits generally apply to island, 
but because we don't have enough funds to match the Federal 
share, we are required to limit a lot of those benefits.
    So, we are just offering 10 of 17 programs on the island. 
Is that correct? Yes or no?
    Ms. Avila. I will say, I don't recall 10 or 17. I can 
mention----
    Miss Gonzalez-Colon. Just tell me the programs that do not 
apply on the island.
    Ms. Avila. Well, right now, we don't cover hep C patients 
within the program. Either we have a cure right now for that 
condition or we are not able----
    Miss Gonzalez-Colon. What other programs?
    Ms. Avila. No emergency transportation. We haven't been 
able to----
    Miss Gonzalez-Colon. What other programs?
    Ms. Avila. Long-term care. And we lost a lot of people.
    Miss Gonzalez-Colon. What other programs?
    Ms. Avila. Those are the main ones that I can highlight 
right now.
    Miss Gonzalez-Colon. OK.
    You mentioned in your written statement that, due to Puerto 
Rico's unequal treatment and the historic low funding, we have 
been forced to limit Medicaid eligibility to income levels well 
below the Federal poverty level used by the states. Puerto Rico 
has 47 percent of poverty level.
    Ms. Avila. That is correct.
    Miss Gonzalez-Colon. So, what benefits are the ones you are 
limiting?
    Ms. Avila. Well, the main ones would be pharmacy benefits 
and mental coverage benefits. Drugs are necessary for a 
healthcare system, and we will not have funds to be able to 
sustain the drug program within the Medicaid program in Puerto 
Rico.
    Miss Gonzalez-Colon. So, in your experience, and having 
identified areas of the programs, including drugs, how many 
Medicaid-eligible individuals in the mainland are not currently 
covered in Puerto Rico because of the disproportionate low-
level Federal funding?
    Ms. Avila. We are estimating more than half a million U.S. 
citizens have not had the right right now to get into the 
program.
    Miss Gonzalez-Colon. So, more than half a million American 
citizens living in Puerto Rico, they are not covered by 
Medicaid full programs as they were in the states just because 
of the lack of funding of the treatment of a state of Puerto 
Rico. And I know it is the same case for the rest of the 
territories as well. Because if you don't have the funds, you 
need to be cutting some of the benefits in order to have more 
people--or trying to at least address the most urgent needs of 
the islands.
    During the years 2006 to 2016, the numbers of physicians, 
surgeons, and providers of the island dropped from 14,000 to 
9,000.
    Ms. Avila. That is correct.
    Miss Gonzalez-Colon. Has this trend been exacerbated by the 
hurricanes in 2017?
    Ms. Avila. That is correct. It has been.
    Miss Gonzalez-Colon. Do we have any number of how many 
physicians and surgeons we do have on the island at this time?
    Ms. Avila. Well, we are just validating the numbers, but we 
have received preliminary information that 3,000 or more 
physicians have left the island since the hurricane.
    Miss Gonzalez-Colon. So, we can say that between 6,000 and 
7,000 physicians and doctors are still on the island?
    Ms. Avila. That is right.
    Miss Gonzalez-Colon. And that trend will continue if they 
are paid less than the rest of the physicians that provide the 
same services that you would receive in the states.
    My time is running out, but I do want to have some 
questions for the record, so you can answer later on. And that 
will be specifically for all of the territories represented 
here. I know you do a lot with less resources. And one of those 
will be: How much did Medicare program benefits actually cost 
in the states?
    And in the case of Puerto Rico, there is no real Medicaid 
financial help cleared for Puerto Rico. This is the PROMESA 
Board saying a few weeks ago. Now, in the letter that was 
submitted for the record, they are endorsing receiving the 
Medicaid funds for Puerto Rico. And I think that is finally 
common sense.
    But there are some--and this is for American Samoa. During 
the fiscal year, there was an unused balance of $153 million in 
Affordable Care Act funds in American Samoa. You explained the 
reasons for this balance in your testimony.
    But my question will be--and you can answer it later on--do 
we need to do something for the territories so they can spend 
the money? Is there any other requirement of the Federal 
Government, CMS, HHS, that was given to the territories so that 
you can't access those funds? What is the reason behind it?
    With that, I yield back the balance.
    Vice Chair Sablan. Thank you.
    The gentlelady's time has expired. But I also agree, for 
American Samoa, it is an anomaly. There are not too many 
private providers. I found that out after our last time that 
you were on the witness stand, Ms. Young.
    But Ms. Plaskett has 5 minutes, please.
    Ms. Plaskett. Thank you. I won't use the 5 minutes. I am 
needed in another meeting. But I just wanted to follow up with 
a couple of short questions, particularly, of course, for the 
good woman from the Virgin Islands, Ms. Rhymer-Browne.
    You talked about the disaster-related circumstances in 
which we have been given $100,000, that if we move back to the 
55 percent match that had been previously, that that cap would 
bring us to about $18.7 million, correct?
    Ms. Rhymer-Browne. Correct.
    Ms. Plaskett. And what is the amount of money if we were 
given the state-like treatment that it would be at? Do you know 
what that number would be?
    Ms. Rhymer-Browne. I am not sure. However, we are 
requesting, as I said, for the 100 percent, we would be 
requesting $251 million for 2 years. And then we would continue 
at the 83 percent Federal level, and those would be for the 
next 3 years. But I am not sure exactly that number.
    Ms. Plaskett. What the percent of the 83 percent would be?
    Ms. Rhymer-Browne. Yes.
    Ms. Plaskett. We know for 55 percent it would be $18.7 
million, right?
    Ms. Rhymer-Browne. Yes.
    Ms. Plaskett. And that is woefully inadequate.
    What would be the delta that you would need from the $18.7 
million to satisfy the needs of all the individuals that would, 
if given state-like treatment, be eligible for it?
    [Ms. Rhymer-Browne confers.]
    Ms. Plaskett. You are not sure at this time?
    Ms. Rhymer-Browne. We are not sure at this time.
    Ms. Plaskett. OK. But if you could get that number to me, 
that would be really helpful for the record.
    Ms. Rhymer-Browne. Yes, I will.
    Ms. Plaskett. One of the other things that I wanted to talk 
about--we talked a little bit about the physicians. And can you 
state specifically what specialty services we are not providing 
for individuals right now?
    Ms. Rhymer-Browne. Yes. There are several cancer-related 
situations that we need to airlift. Our major cancer center was 
tremendously damaged on the island of St. Thomas. We used to 
fly individuals from the island of St. Croix over to St. 
Thomas, but now that center has been down for the last 2 years.
    The orthopedic specialist, the trauma specialist. When we 
have major accidents and situations, workplace accidents, we 
have to airlift our members off-island to receive the treatment 
on the mainland.
    Ms. Plaskett. And how does this impact recruiting 
physicians to the Virgin Islands in terms of, if there is a 
belief that we will be reduced in our Medicaid treatment moving 
forward, how will that impact the ability to not just have 
specialty doctors but to have regular physicians, general 
practitioners, pediatricians, et cetera, to treat this 
population?
    Ms. Rhymer-Browne. It would greatly reduce it. Before our 
ACA treatment and getting the additional monies, we were 
perhaps maybe at about 200 to 300 providers. We have over 700 
now, because individuals were attracted that we had the 
additional monies to provide services for our members. But if 
we were to be reduced once again, the ability to attract those 
specializations would be greatly--it would be very hard for the 
territory do that.
    Ms. Plaskett. Thank you very much.
    I saw you had a note. Was there anything you wanted to add?
    Ms. Rhymer-Browne. Yes. He has----
    Ms. Plaskett. Mr. Smith, she can't read your handwriting. 
You are not only the Director of Medicaid, you must be a doctor 
as well.
    Ms. Rhymer-Browne. OK. At the 55 percent Federal, we would 
require $87.2 million. And at the 83 percent, $52.6 million.
    Ms. Plaskett. OK. Thank you very much.
    I yield back the balance of my time.
    Vice Chair Sablan. Thank you.
    I now recognize the gentleman from Nevada, Mr. Horsford, 
for 5 minutes.
    Mr. Horsford. Thank you, Mr. Chairman, for organizing 
today's hearing on the funding of Medicaid in the U.S. 
territories. I appreciate the opportunity to discuss the 
shortfalls of Medicaid funding in our territories and shed 
light on this very important issue.
    To start, I want to make it clear that it is my priority, 
as a member of this Committee as well as the Ways and Means 
Committee, to ensure all Americans, including those living in 
U.S. territories, have access to affordable and quality health 
care.
    Sadly, as is often the case with the Federal Government's 
treatment of American Samoa, the Northern Mariana Islands, 
Guam, Puerto Rico, and the U.S. Virgin Islands, U.S. citizens 
and nationals living in the insular areas do not receive the 
same services and benefits afforded to the rest of the American 
people. That is a very sad fact that we need to address.
    American citizens living in our territories are too often 
overlooked, mistreated, and forgotten, and the government 
services many of them depend on are treated similarly. 
Territories commonly experience higher rates of poverty than 
states, and, in many cases, our territories depend on Medicaid 
even more than our states. For example, in American Samoa, 
because private health insurers refuse to provide the island 
healthcare coverage, Medicaid is their only option.
    Sadly, due to significant shortfalls in Federal Medicaid 
funding, territories face serious challenges finding the 
funding needed to support Medicaid coverage for all those who 
depend on it. These challenges have increased in recent years, 
as debt crises, decreased tourism, and natural disasters, 
including hurricanes and typhoons, have added to their burdens 
and heightened economic distress. As a result, all territories 
are forced to cut Medicaid programs, heighten eligibility 
requirements, and limit coverage options.
    We cannot continue to stand by while people in need lose 
their healthcare coverage. Our territories face a significant 
crisis, and they need this Congress to find a Medicaid funding 
solution that can address the serious funding setbacks they 
face.
    More than 1.3 million people in U.S. territories rely on 
Medicaid, which provides health coverage to children, pregnant 
women, parents, seniors, and individuals with disabilities. 
Without a Medicaid funding fix, thousands of individuals in 
need risk losing healthcare coverage and benefits under 
Medicaid.
    I want to thank each one of you for your testimony today. I 
hope your insight can help the Members of this Congress better 
understand the challenges our territories face and solutions 
that are needed.
    Ms. Sablan, I want to share my sympathy with you and 
express my regret that you and your colleagues have been forced 
to make such tough decisions regarding cuts to Medicaid.
    Can you talk through what services the Commonwealth would 
be forced to cut if we do not address the Medicaid cliff? Will 
women not be able to get a mammogram? Will children not be able 
to have an annual physical? Will seniors lose access to nursing 
facilities? What options are left for these individuals if they 
lose their Medicaid coverage?
    Ms. Helen Sablan. We will have to cut those optional 
services and some of the mandatory services, because by the 
first quarter of the fiscal year, we exhaust our 1108 funding.
    Mr. Horsford. And explain what you mean by ``cut optional 
services.'' When I was in the Nevada State Senate and we had a 
Republican governor who wanted to cut Medicaid across the 
board, it meant cutting diapers from seniors in nursing homes, 
and we rejected that. What does it mean to you?
    Ms. Helen Sablan. Optional services include prescription 
drugs, dental services, and other care services that are 
critical for our patients.
    Mr. Horsford. And what will happen to those individuals 
without that support?
    Ms. Helen Sablan. If they don't get their medications, then 
eventually they will end up at the hospital, and that will cost 
us more money in our in-patient services. Also, dental 
services, if they are not treated, then they are going to end 
up in emergency room services, and that costs us more money.
    Mr. Horsford. Right. And, again, is it the case that there 
are no other options available to them?
    Ms. Helen Sablan. There are no other options, because they 
don't afford to get health insurance. The income that they get 
is pretty much to put food on their table.
    Mr. Horsford. Thank you very much.
    This is a very important issue, one that affects all the 
U.S. territories. And I commend the Chairman and the members of 
this Committee. We have to address this issue. It cannot 
continue to persist.
    Thank you. I yield back.
    Vice Chair Sablan. Thank you. Thank you to the gentleman.
    I recognize Mr. Cox from California. No questions?
    Mr. Cox. No questions.
    Vice Chair Sablan. All right.
    There is another Californian at the table here, Mr. 
Lowenthal.
    Mr. Lowenthal. Thank you, Mr. Chair. And I thank you for 
recognizing the great state of California also.
    I have two questions. One is about the future, and one is a 
little bit about how we got here.
    The first question is, if Congress does take the steps we 
have discussed today to treat the territories equitably, such 
as providing uncapped Medicaid funding, calculating fund 
matching in the same way it does for the states, really begins 
to treat the territories as part of the United States in an 
equitable and fair way, are there any mandatory Medicaid 
benefit requirements the territories still wouldn't be able to 
meet due to territory-specific limitations? Are there still 
other things that need to be addressed?
    Maybe anybody from the Committee.
    Are there any unique characteristics of any of the 
territories that will prevent you from being able to provide 
the mandatory Medicaid benefits?
    We have to get rid of the cap. We are hearing that. You 
have to have the match in an equitable way that doesn't 
penalize. But is there anything else we should be looking at 
also to make sure that the uniqueness of the territories does 
not preclude them from receiving certain benefits?
    Anybody? Because we are really trying to figure out where 
do we go from here. Yes?
    Ms. Avila. Mrs. Avila from Puerto Rico.
    Besides what is mandatory for the healthcare system within 
the Medicaid program, just to be able to keep the expertise of 
the doctors and healthcare providers, it is a great challenge 
for the island and for the other territories as well. So, we 
need to find a way to, with the distance and the structure that 
we already have, just to start stabilizing the program and see 
what other needs we have to confront right now.
    But it is so urgent just to keep the doctors in the 
islands, it is so urgent to avoid having the hospitals 
collapse, that I will say probably we will need to have more 
support in terms of long-term care to develop the structure to 
support that population and that area.
    But according to the guidelines of the CMS or HHS Federal 
healthcare program, we will need to identify what else we can 
do better just to have a more continued and sustainable program 
in the island.
    Mr. Lowenthal. OK.
    Anybody else want to add something that might be----
    Ms. Rhymer-Browne. Yes, I just want to echo, for the long-
term care, that this will be a very, very important area for 
the U.S. Virgin Islands. We have an aging population, and from 
CMS we definitely would need additional technical assistance to 
not only obtain a skilled nursing facility certification but to 
maintain the skilled nursing facility certification. So, that 
technical assistance would be greatly, greatly needed.
    Mr. Lowenthal. That is looking forward, but the other 
question I have is--how did we get here? And I don't know if 
anybody can answer it.
    I am just sitting here wondering, in the negotiations, does 
anybody--maybe Gregorio knows better. In the passage of the 
ACA, there were benefits. There was the Medicaid expansion. 
And, in some sense, it did provide for certain kinds of 
services for the territories. Yet, looking back, it was a 
terrible hindrance also. It put limits on the territories that 
it did not put on the rest of the country.
    How did that happen?
    Vice Chair Sablan. Will the gentleman yield?
    Mr. Lowenthal. Yes, I will yield.
    Vice Chair Sablan. When we had passed the Affordable Care 
Act and the PPA also, under the budget reconciliation process, 
we had to address the Senate bill. At that time, in all 
truthfulness, we couldn't go into conference, because when we 
come out, there would not be enough votes to pass the bill.
    Mr. Lowenthal. OK.
    Vice Chair Sablan. So, we used the budget reconciliation 
process. And, of course, we had to go into the Senate version, 
which the Senate addressed the states, not territories. So, we 
worked with the White House, and we got increased money in 
addition to the regular block grants. But those monies were 
used as block grants itself.
    Now, if we are going to get into the full program, there 
has to also be improvements to not just the procedures and the 
process of the program but also the care, the standard of care 
for patients.
    The improvements that they would implement to satisfy 
Medicaid would not just benefit Medicaid patients. They would 
also benefit the entire patient population and the needs of the 
territories or combined like they do in the states. So, they 
would provide services that are not at the present time 
available to the territories but are available in the states.
    And we could do this over a period of 10 years. There would 
be money to help them, incentivize them to meet those 
standards. And, at the same time, allow--maybe one territory 
could get this done in 5 years, and the other one may take 6 
years--but allow them to work with the Secretary of HHS. And 
when they submit plans, when the HHS Secretary approved a plan, 
and then that territory would get into a full Medicaid program 
like they do in the states. And the rest would take the 
additional time they would need.
    It will take time. It will take incentivizing them--of 
course, they would need financial assistance. But, yes, it can 
be done. It is possible. And that is also, for me personally, 
that is my hope, that we would get into the full program.
    Did I answer the gentleman's question?
    Mr. Lowenthal. Yes.
    Vice Chair Sablan. Thank you. And your time is up, so----
    Mr. Lowenthal. And I used my time very wisely.
    Vice Chair Sablan. No question. You always do, Mr. 
Lowenthal.
    Mr. Tonko from New York is recognized for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chairman.
    And thank you to our witnesses, as well, for being here 
today.
    I believe, in the richest country on Earth, health care 
should be a guaranteed right for all, full stop, and not just 
for residents of the 50 states but for all who call themselves 
Americans. Unfortunately, health care in America has always 
been segregated between the haves and the have-nots, and the 
status of Medicaid in the insular areas is no exception.
    Like many aspects of Federal law, the way that the Medicaid 
program views the insular area is of second-class citizens, 
providing fewer resources and less predictability to care for 
some of our most vulnerable.
    The territories are generally poorer than the 50 states but 
are subjected to Medicaid funding caps and restrictions that 
have made it significantly challenging for them to provide 
services to individuals living below the Federal poverty level.
    Despite temporary increases in Federal Medicaid funds to 
Puerto Rico and the U.S. Virgin Islands, healthcare systems are 
fragile, especially in the wake of Hurricanes Irma and Maria. 
Following these two disasters, residents have struggled with 
substantial health needs.
    It is imperative, I believe, that Congress properly address 
the Medicaid financing issues. Expiration of funding could 
result in even more significant shortfalls and could further 
restrict programs' eligibilities and cut benefits and suspend 
programs. This could be devastating for territory budgets, 
coverage, and the healthcare systems more broadly.
    So, my question to Ms. Sablan and Ms. Young, both American 
Samoa and the Commonwealth of the Northern Mariana Islands rely 
on a single hospital to provide most of the care to Medicaid 
beneficiaries. What are some of the challenges that arise with 
this model? And would having uncapped Medicaid Federal funding 
and a higher Federal match help the territories draw in 
additional providers outside the hospital system?
    Ms. Sablan?
    Ms. Helen Sablan. Can you repeat your question again? I'm 
sorry.
    Mr. Tonko. Sure. With your reliance on a single hospital 
for most of the care for Medicaid-eligible, what are some of 
the challenges that arise with this model? And would having 
uncapped Medicaid Federal funding and a higher Federal match 
help the territories draw in additional providers outside those 
in that hospital system?
    Ms. Helen Sablan. We would have to send our patients off-
island, either to Guam, Hawaii, or the U.S. Mainland. And it 
really is costing us a lot of money to send our patients with 
the limited cap that we get, and then requiring our local 
match.
    Mr. Tonko. If we undo the cap and provide a higher Federal 
match, what is the impact, do you think?
    Ms. Helen Sablan. That would really help us. We would be 
able to provide more services.
    Mr. Tonko. And, Ms. Young, do you have any response?
    Ms. Young. Yes. To answer the first prong of your question, 
we provide basic services at our one hospital. And, basically, 
in our state plan, medically necessary care that is not 
available in our hospital must be sent off-island. And, 
currently, we send our patients to New Zealand because it is 
the closest country to us. It is closer than Hawaii. So, 
everything from orthopedics to cardiology to urology, to acute 
serious pediatrics, go to New Zealand.
    If the cap were lifted and we received a better FMAP, that 
would truly transform our healthcare system. And what is 
amazing about this situation, if you look at the territories, 
it doesn't take much in the overall scheme of the Federal 
budget to just give us a little more in our block grants so 
that we can fully provide the services to our people and care 
for them.
    So, if that cap was lifted and we got a better FMAP, 
absolutely, we would be able to recruit more providers in our 
island. Because that is part of our problem. We don't have 
enough certified doctors for CMS with compliance issues and 
reimbursement requirements. I think there are three doctors 
with M.D. degrees from the United States that allows us to 
claim for Medicare. But if we had more funding to recruit 
doctors from the United States with M.D. degrees, we would be 
able to do more of those types of claiming.
    Mr. Tonko. Thank you.
    Mr. Chair, I yield back.
    Vice Chair Sablan. Thank you, Mr. Tonko.
    I now recognize Miss Gonzalez-Colon for 5 minutes.
    Miss Gonzalez-Colon. Thank you, Mr. Chairman.
    I want to thank Mr. Tonko, Horsford, Soto, and all the 
Members who are here taking into account the situation in the 
territories. I think it is important for Congress to do 
something. And I am willing, as the Representative of Puerto 
Rico, to work across the aisle to reach a long-term solution 
for the territories. And I think we can do that in the Energy 
and Commerce Committee--they went to the island during the last 
Congress, both today's Chairman as the Ranking Member at the 
time. And I think there is a common-sense opportunity to reach 
an agreement.
    There are two bills that have been filed, one from Ms. 
Plaskett that has been sponsored by all the Members of the 
territories in a bipartisan way, H.R. 2306. And the other one 
is H.R. 1354. And I commend the Members that could co-sponsor 
those bills that would find a solution, a permanent solution, 
in taking the cap of 55 percent off or increasing the funding 
for Medicaid in Puerto Rico and the rest of the territories as 
well.
    And I want to commend Mr. Soto for always being an original 
co-sponsor of all those bills. I think this is something that 
we can achieve during this Congress knowing that most of the 
territories suffered different disasters, including typhoons 
and hurricanes, during the last 2 years.
    Ms. Arcangel, you were willing to answer the last question, 
and the time was up. Did you finish?
    Ms. Arcangel. Thank you, Senator--sorry.
    Miss Gonzalez-Colon. Not yet. When we become a state, I 
will be a Senator. But now, I will be here in the House. Go 
ahead.
    Ms. Arcangel. I am used to speaking to Guam Senators. I'm 
sorry.
    Yes, so to answer the questions of the Congressman from New 
York, increasing the FMAP and removing the cap will definitely 
help all the territories.
    One, for Guam, our experience is, because of lack of local 
funding, we are unable to match the Federal. So, what happens 
then is, because we have the late payments to our providers, 
they don't accept our patients, even for off-island providers. 
What happens? Our patients become more sick, their condition 
becomes more complicated, so the cost of health care increases. 
While we are waiting for a local match to draw down the Federal 
funding, our patients are staying in the hospital.
    Though we have two hospitals, we don't have a tertiary 
center, really, that is complete with specialists who can 
handle these people, even for nurses. Tertiary centers requires 
all the professionals in order for them to completely heal the 
patient. But these patients are waiting months in order to go 
off-island because the providers off-island do not want to 
accept our payments because of the late payments.
    Miss Gonzalez-Colon. Thank you.
    Ms. Arcangel. And one more thing with regards to----
    Miss Gonzalez-Colon. Don't use up my time.
    Ms. Arcangel. OK. I'm sorry. I just wanted to emphasize----
    Vice Chair Sablan. I will give you an extra minute.
    Miss Gonzalez-Colon. OK. Perfect.
    Go ahead.
    Ms. Arcangel. I'm sorry. I just wanted to emphasize that 
the territories do not receive any DSH money. And that will 
help our hospital.
    Miss Gonzalez-Colon. The DSH money, for the knowledge of 
the Members, is disproportionate share hospital segment. And 
that means that the low-income patients are being attended by 
many of the hospitals without receiving their fair share in 
order to make that happen.
    Same thing happened with the low-income subsidy and the 
HIT, the health insurance tax. Our hospitals are paying a tax 
included in the Obamacare, but we can't benefit for the tax 
incentive that the law provided for those hospitals. In the 
case of Puerto Rico, we are paying more than $200 million a 
year in the health insurance tax without getting the benefit. 
And I know it would be the same for all the hospitals because 
we don't have the exchange.
    So, there are several parts of the healthcare problems. 
Medicaid is one of them. Medicare is another problem as well. 
And I began the questioning during my last turn to the lady 
from American Samoa. And I know that we knew each other. How 
long you been in the post, Ms. Young?
    Ms. Young. Six years.
    Miss Gonzalez-Colon. Six years. What is the reason that 
American Samoa has not used or spent the money that was 
allocated to the island?
    Ms. Young. Up until 2017, we only had one Medicaid 
provider, which is the hospital. And the hospital doesn't 
provide all of the mandatory services under the Medicaid 
program.
    In trying to reform our Medicaid state plan to add new 
providers to try to help us draw the Federal money, the barrier 
for that was the local match. So, for the first time, our 
government was--when our administration came in, there was a 
lot of old debt that their priority was to focus on. So, we 
weren't able to get local match for new services until 2017.
    Our hospital doesn't require a local match, but all new 
services outside of the hospital require a local match.
    Miss Gonzalez-Colon. And I would yield. And I would love to 
have recommendations from the territories that have not spent 
the Medicaid funds. Give me any problems you are facing. You 
have been 6 years there, so there should be some 
recommendations in order to actually draw that money.
    With that, I will yield back.
    Vice Chair Sablan. The gentlelady's time has expired. Thank 
you.
    I will now recognize the gentleman from Florida, Mr. Soto.
    Mr. Soto. Thank you, Chairman Sablan. That does sound nice. 
Not as good as ``Grijalva,'' but Chairman, I am still with you. 
I am Team Grijalva, but I love Sablan.
    There has been a long-running injustice in this country--
and I think we all understand that--with our territories with 
regard to health care, taxes, benefits, even the right to vote. 
And we continue to be in this Committee to right those wrongs, 
to fix those injustices.
    In Puerto Rico, under the current Medicaid system, we have 
seen over 6,000 doctors leave the island, many of them for our 
great state of Florida; hospitals are in disrepair; debt is 
added to try to prop up a Medicaid program--all because Puerto 
Rico is not treated equally for purposes of Medicaid. And I 
know there is a similar story in each of our territories, and 
that is why we are here today.
    I have the honor of serving on the Energy and Commerce 
Committee that--the name has been invoked about 100 times 
today. So, you are looking at someone who will be working in 
both committees on this issue specifically.
    But it gets worse than that, with Hurricane Maria or 
Typhoon Yutu, our territories have been decimated by some of 
these storms. And it has led to tragic deaths that are in part 
because of the lack of money in the healthcare system to be 
able to provide people with health care after these 
emergencies, including in Puerto Rico and the Virgin Islands 
and in the Northern Mariana Islands, along with other areas.
    So, if you remember nothing else, it is time to end this 
injustice. And that is why we appreciate all of you coming from 
so far away, from so many different corners of the United 
States to be here today and to make sure that Americans have 
healthcare equality throughout the territories.
    I want to thank my fellow hermana Boricua, Representative 
Gonzalez-Colon, as well as Representatives Plaskett, Sablan, 
San Nicolas, Radewagen, and others. Because H.R. 2306 and H.R. 
2304 are great ideas and starting points of where we need to be 
in Energy and Commerce with regard to these bills, as well as 
here.
    We would like to remove the cap altogether, and we would 
like territories to be treated as states and get the same type 
of treatment that they would get otherwise. And I think that is 
where we want to go with either these bills or with sort of a 
combination of them.
    Another bill that we will be working on is to give access 
to the Affordable Care Act exchanges, which right now the 
territories don't have access to. In my family's native island 
of Puerto Rico, only 30 percent of people are on employer-based 
insurance, which is mind-blowing compared to the states. So, we 
need to boost that up.
    I noticed--and this is where I am going to get to my 
question for each of you--because you are not fully funded with 
Medicaid, some of you aren't providing all the services yet, 
although Guam--who is from Guam?--Guam is doing all the 
services already. You get the gold star for today. Very 
impressive. You are not getting the full funding to do that.
    But for each of you, going down the list, it would be great 
to hear, if we provided you the full FMAP funding that you 
would get as a state, whether you believe you could provide, 
over the course of a certain number of years, all these 
services.
    We will start with Ms. Avila and we will go down the list. 
If you got the full Medicaid treatment that a state would, the 
full funding, would you be able to provide all the services 
under a mandatory Medicaid benefit? And what kind of time 
period would you need?
    Ms. Avila. Well, we were talking about that. We would start 
immediately just adjusting the reimbursement rates to our 
medical providers.
    And I will say that in a time frame of no more than 3 years 
we will be able to stabilize the program as it needs right now. 
Because the uncertainty that we have, it is one of the most----
    Mr. Soto. I understand. My time is limited, so I just want 
to get to other people,
    Ms. Young?
    Ms. Young. Thank you. Yes, we would be able to do a lot 
more if we were treated equitably like the states and releasing 
uncapped funding as well as an improvement in the FMAP.
    Mr. Soto. Ms. Rhymer-Browne?
    Ms. Rhymer-Browne. Yes, we would definitely be able to do 
more. And one of the areas would be to increase--well, even 
develop our skilled nursing facilities and not have a cap when 
we do have the skilled nursing facilities.
    Mr. Soto. And we already covered Guam. Ms. Sablan?
    Ms. Helen Sablan. We will definitely provide all the 
services that are mandated. Right now, there are some that we 
are not covering because----
    Mr. Soto. Of course. Because you are not getting full 
funding. I understand that.
    And Ms. Muna?
    Ms. Muna. We are already providing some of the services, 
and we will be definitely expanding and providing more services 
for the community at home.
    Mr. Soto. Thanks.
    And I yield back.
    Vice Chair Sablan. I thank the gentleman.
    I now recognize the Chairman of the Committee, Mr. 
Grijalva.
    Mr. Grijalva. Thank you very much, Chairman Sablan. And 
like I said earlier, I appreciate you putting this meeting 
together, this hearing. It is impactful to shine a brighter 
light on this inequity that every one of you has spoken to, 
both in your oral and written testimonies.
    And it is an equal-treatment issue, to me, very 
fundamentally and very simplistically. And the way to deal with 
that unequal treatment is to create resource equity on par with 
what communities here in the United States on the mainland 
receive, period. That is the goal.
    And I look forward to the various legislation under Mr. 
Sablan and the Representatives from all the territories and 
Puerto Rico. I think that from that would come a significant 
piece of legislation that we can look at, promote. And 
certainly I would be talking with Chairman Pallone about 
expediting a good piece of legislation, to start to move that.
    Having said all that, I really want to ask one question to 
all of you--just one question. And thank you all for making the 
effort and coming from such a long way to be here.
    The one question is--If you had to choose between a larger 
Federal match, for example, 85 percent, or more money or just 
more resources and more money but the same 55/45 match that is 
present, which would you prefer and why?
    I think that is the question. Why don't we just add more 
money to what exists versus fundamentally changing, making the 
formula equitable, the reimbursement formula equitable?
    But that is the one question for all of you. And we can 
begin with Ms. Muna. Then we can just go down the panel, if you 
don't mind.
    Thank you, Mr. Chairman.
    Ms. Muna. If we were going to choose, we would have to 
choose more money over the FMAP. And the reason is, even if you 
increase the FMAP--for us personally in the hospital, we use 
the certified public expenditure. If the funds are not 
available, you won't be able to--even if you increase the FMAP, 
it would basically just be faster for you to expend the money 
rather than having actual cash available to pay for services 
that you are going to provide at home.
    Mr. Grijalva. OK. Thank you.
    Ms. Helen Sablan. I go with removal of the cap instead of 
the FMAP. And the reason why is we are spending more. We are 
spending over $72 million.
    Ms. Arcangel. The same way for Guam. We spent $110.8 
million last year. So, if you are just going to increase the 
FMAP, our current cap right now is $17.97 million. That is not 
enough to pay for those services, so we prefer to increase the 
funding.
    Ms. Rhymer-Browne. Very hard. We would need more money, so 
definitely we want the cap off. But the FMAP is needing to be 
off as well, because more money and still have the 55 percent 
FMAP would make no sense. We can't make it. We can't go after 
it, as seen in the ACA dollars.
    Ms. Young. I think for American Samoa, this is an 
interesting question. In an ideal situation, both of these 
options need to be addressed simultaneously, complementary. But 
if we were given an option, then we would have to go for more 
money, lifting of the cap.
    But what we would have to do as a territory, then, is we 
would have to permanently omit and eliminate all outside 
providers outside of the hospital, because our government is 
not able to raise the local match. And I think we can do that 
over years, continually improve our hospital and use our CPE 
method that doesn't require the match.
    Ms. Avila. We will need to agree with the Virgin Islands 
that it is a combination of both. Even though we have more 
money, if we don't have the local match to be able to comply 
with the matching funds, we are not doing anything good for the 
program.
    So, it would be an increase of both relatively. We need to 
have more money, and we need to have a higher FMAP to be able 
to do the matching of funds and not to be in the situation that 
Puerto Rico is facing right now. Because trying to cope with 
the matching of 45 percent has taken our island to a financial 
situation that we are living today with the fiscal board and 
looking for funds to be able to pay what we get to be able to 
sustain the program and pay for the matching.
    Mr. Grijalva. Thank you.
    Mr. Chairman, I hope that going forward under your 
leadership that the consensus, the fact that all the 
stakeholders are before us, that, as we move forward or move 
legislation, that we seek to continue to promote that 
consensus. It makes the effort much more powerful, to be honest 
with you.
    So, with that, thank you very much again for the hearing. I 
yield back, sir.
    Vice Chair Sablan. Thank you, Mr. Chairman.
    I am going to take the liberty of asking Ms. Muna if she 
could respond, maybe take 30 seconds, 1 minute, to respond to 
Mr. Tonko's question.
    Ms. Muna. About expending services?
    I mean, if you remove the cap--yes. If you remove the cap, 
there are a lot of opportunities for us to reform our 
healthcare system, given the opportunity to have that 
predictable funding. You have to have predictable funding and 
sustainable funding.
    And if you are able to have those, then you will be able to 
basically manage the population, bring healthcare reform, bring 
population health, and have a healthier population for your 
people. And that is an opportunity for us that we would love to 
have.
    Thank you.
    Vice Chair Sablan. Thank you.
    Thank you very much, everyone.
    And I want to let everyone know that we didn't hold this 
hearing just on our own. We have been working with outside 
groups. We have been working with the Energy and Commerce 
Committee staff on trying to address this also. We don't want 
to blind-side them.
    So, again, I will emphasize the importance of giving us a 
complete and concise answer to those six items I gave to you.
    I also would like again--I am really pleased with the 
Virgin Islands model that they have started. And I understand 
that some of you have agreed to kick back and pay your own 
bill, of course. But somewhere, maybe at Longworth Cafe, maybe 
you can sit back and talk a little bit more on how to address a 
model, so we could put together something for legislation.
    I want to thank the witnesses for their truly, truly 
valuable testimony and many of the Members for their questions 
and their patience.
    The members of the Committee may have some additional 
questions for our witnesses, and we would ask you to respond to 
these in writing. Under Committee Rule 3(o), members of the 
Committee must submit witness questions within 3 business days 
following the hearing, and the hearing record will be held open 
for 10 business days for these responses.
    If there is no further business, without objection, the 
Committee stands adjourned.
    [Whereupon, at 12:18 p.m., the Committee was adjourned.]

            [ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

Submission for the Record by Rep. Grijalva

                        Statement for the Record

                           Natalie A. Jaresko

                           Executive Director

        Financial Oversight and Management Board for Puerto Rico

    Chairman Grijalva, Ranking Member Bishop, and Members of the 
Committee, thank you for the opportunity to provide comments to the 
Committee on behalf of the Financial Oversight and Management Board for 
Puerto Rico (the ``Board'') specific to Puerto Rico as you examine the 
Medicaid situation in the U.S. territories and consider proposals to 
address issues as to federal funding for Medicaid services in the 
territories.

    As the bipartisan Congressional Task Force on Economic Growth in 
Puerto Rico (the ``Congressional Task Force'') concluded in its Report 
to the House and Senate of the 114th Congress, on December 20, 2016, 
federal policymakers seeking to address Puerto Rico's economic and 
social challenges must include a solution to the future financing of 
the Medicaid program in Puerto Rico. The Board strongly agrees and 
previously supported the Bipartisan Budget Act of 2018, which provided 
additional Medicaid federal funding for Puerto Rico like the Affordable 
Care Act had.

    The Board is very concerned that come September 2019, when that 
additional funding from the Bipartisan Budget Act and Affordable Care 
Act expires, Puerto Rico will revert back to the statutorily capped 
federal funding that it receives for Medicaid, which is a small 
fraction of what similar states receive. Not only does Puerto Rico have 
a predefined 55% as its federal matching assistance percentage, but 
also Section 1108 of the Social Security Act imposes an additional 
hard, lower cap on Puerto Rico's Medicaid share.

    For example, in fiscal year 2018, the Section 1108 cap for Puerto 
Rico was just under $360 million while the total cost of Medicaid in 
Puerto Rico was over $2.8 billion. In the absence of one-time funds 
from Congress through the Affordable Care Act and Bipartisan Budget 
Act, the cap on matching assistance available to Puerto Rico would have 
yielded an effective federal match of roughly 13%. Had Puerto Rico 
received its predefined 55% federal match without a cap, it would have 
received over $1.3 billion. Had Puerto Rico received the federal match 
that the most relevant comparable state gets (Mississippi at 76%), it 
would have received over $1.8 billion.

    Each dollar that the federal government does not provide for 
Medicaid the Government of Puerto Rico must find, while it contends 
with the devastating aftermath of hurricanes Irma and Maria and 
attempts to resolve its crushing debt burden. Furthermore, without a 
long-term solution to the Federal government's share of Puerto Rico's 
Medicaid costs, the Government of Puerto Rico's spending on Medicaid 
will account for an unprecedented portion of its annual budget. Absent 
action by Congress, by fiscal year 2021, the Commonwealth's Medicaid 
costs are projected to comprise roughly 23% of the General Fund's 
budget.

    While urging Congress to address this major shortfall, the 
Government of Puerto Rico and the Board have been working on a series 
of reform priorities for the Island's healthcare system to improve the 
delivery of high quality, cost-effective care. In particular, the May 
2019 Certified Fiscal Plan for the Government of Puerto Rico requires 
the Government to:

  1.  Implement systems and controls (e.g., T-MSIS, Medicaid Fraud 
            Control Unit) to reduce fraud, waste and abuse within the 
            public insurance system and ensure that all current 
            enrollees are qualified to receive benefits;

  2.  Establish value-based payment models to incentivize better care 
            coordination among providers, particularly for those with 
            chronic conditions who currently generate the majority of 
            the Island's healthcare expenditures and suffer from the 
            worst health outcomes;

  3.  Enable primary care physicians to provide preventive care and 
            encourage a shift toward lower-cost care settings, reducing 
            the number of emergency room visits; and
  4.  Ensure communities have the infrastructure and coordination 
            capacity to promote efficiency of services and a community-
            wide focus on health.

    These value-based savings measures represent a joint effort between 
the Government of Puerto Rico and the Board to permanently ``bend the 
curve'' on the Island's unsustainable medical cost growth, while also 
providing better services to the residents of Puerto Rico.

    While these reforms are underway and the Medicaid cliff looms, the 
Board encourages the Committee and the Congress to support the 
recommendation of the Congressional Task Force to treat Puerto Rico in 
a more equitable and sustainable manner under the Medicaid program, in 
order to improve patient outcomes, to strengthen the health care system 
on the Island and federal oversight of that system, and to reduce the 
incentive for migration from the Island to the states and the 
associated financial costs to state governments and the federal 
government.

    Going forward, the Board believes that federal financing of the 
Medicaid program in Puerto Rico should be more closely tied to the size 
and needs of its low-income population and that the Commonwealth's 
recovery and fulfillment of PROMESA's objectives will be significantly 
aided by the Congress legislating a long-term Medicaid program solution 
to mitigate the drastic reduction in federal funding for healthcare in 
Puerto Rico that will happen later this year absent congressional 
action.

                                 ______
                                 

[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S 
                            OFFICIAL FILES]


Submissions for the Record by Rep. Sablan

  --  Letter from the Association of Asian Pacific Community 
            Health Organizations (AAPCHO) to Reps. Grijalva, 
            Bishop, and Sablan dated May 23, 2019.

  --  Letter from the President and CEO of Guam Regional 
            Medical City (GRMC) to Vice Chair Sablan dated May 
            23, 2019.

  --  Pacific Island Health Officers' Association Resolution 
            No. 2019-65-01.

  --  Letter from Marianas Medical Center to Vice Chair Sablan 
            dated May 13, 2019.

  --  Letter from Various Asian-Pacific and Pacific Island 
            Organizations to House Majority and Minority 
            Leadership dated May 23, 2019.

Submissions for the Record by Rep. Radewagen

  --  Letter from Rep. Radewagen to Governor Lolo Moliga of 
            American Samoa dated March 15, 2019.

  --  Briefing from the Medicaid and CHIP Payment and Access 
            Commission (MACPAC) dated May 2019.

  --  GAO Report on Medicaid and CHIP: Increased Funding in 
            U.S. Territories Merits Improved Program Integrity 
            Efforts, GAO-16-324, dated April 2016.

  --  Fact Sheet from MACPAC on Medicaid and CHIP in American 
            Samoa dated March 2019.
Submission for the Record by Ms. Avila

  --  Letter from Gov. Rossello to Rep. Pallone and Rep. Walden 
            dated May 1, 2019.

Submissions for the Record by Ms. Muna

  --  Briefing Packet from Commonwealth of the Northern Mariana 
            Islands Healthcare Corporation dated March 2019.

  --  Letter from Governor Torres of the Commonwealth of the 
            Northern Mariana Islands to the Secretary of the 
            U.S. Department of Health and Human Services dated 
            April 23, 2019.

                                 [all]