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

                      STRENGTHENING HEALTHCARE IN THE U.S.
                    TERRITORIES FOR TODAY AND INTO THE FUTURE

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

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 JUNE 20, 2019

                                   __________

                               Serial No. 116-50

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce
                      govinfo.gov/committee/house-energy
                            energycommerce.house.gov

                                  __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    40-616 PDF                 WASHINGTON : 2022

    -----------------------------------------------------------------------------------

                        COMMITTEE ON ENERGY AND COMMERCE

                         FRANK PALLONE, Jr., New Jersey
                                     Chairman
    BOBBY L. RUSH, Illinois              GREG WALDEN, Oregon
    ANNA G. ESHOO, California              Ranking Member
    ELIOT L. ENGEL, New York             FRED UPTON, Michigan
    DIANA DeGETTE, Colorado              JOHN SHIMKUS, Illinois
    MIKE DOYLE, Pennsylvania             MICHAEL C. BURGESS, Texas
    JAN SCHAKOWSKY, Illinois             STEVE SCALISE, Louisiana
    G. K. BUTTERFIELD, North Carolina    ROBERT E. LATTA, Ohio
    DORIS O. MATSUI, California          CATHY McMORRIS RODGERS, Washington
    KATHY CASTOR, Florida                BRETT GUTHRIE, Kentucky
    JOHN P. SARBANES, Maryland           PETE OLSON, Texas
    JERRY McNERNEY, California           DAVID B. McKINLEY, West Virginia
    PETER WELCH, Vermont                 ADAM KINZINGER, Illinois
    BEN RAY LUJAN, New Mexico            H. MORGAN GRIFFITH, Virginia
    PAUL TONKO, New York                 GUS M. BILIRAKIS, Florida
    YVETTE D. CLARKE, New York, Vice     BILL JOHNSON, Ohio
        Chair                            BILLY LONG, Missouri
    DAVID LOEBSACK, Iowa                 LARRY BUCSHON, Indiana
    KURT SCHRADER, Oregon                BILL FLORES, Texas
    JOSEPH P. KENNEDY III,               SUSAN W. BROOKS, Indiana
        Massachusetts                    MARKWAYNE MULLIN, Oklahoma
    TONY CARDENAS, California            RICHARD HUDSON, North Carolina
    RAUL RUIZ, California                TIM WALBERG, Michigan
    SCOTT H. PETERS, California          EARL L. ``BUDDY'' CARTER, Georgia
    DEBBIE DINGELL, Michigan             JEFF DUNCAN, South Carolina
    MARC A. VEASEY, Texas                GREG GIANFORTE, Montana
    ANN M. KUSTER, New Hampshire
    ROBIN L. KELLY, Illinois
    NANETTE DIAZ BARRAGAN, California
    A. DONALD McEACHIN, Virginia
    LISA BLUNT ROCHESTER, Delaware
    DARREN SOTO, Florida
    TOM O'HALLERAN, Arizona
                                     ------

                               Professional Staff

                       JEFFREY C. CARROLL, Staff Director
                    TIFFANY GUARASCIO, Deputy Staff Director
                    MIKE BLOOMQUIST, Minority Staff Director
                             Subcommittee on Health

                           ANNA G. ESHOO, California
                                    Chairwoman
    ELIOT L. ENGEL, New York             MICHAEL C. BURGESS, Texas
    G. K. BUTTERFIELD, North Carolina,     Ranking Member
        Vice Chair                       FRED UPTON, Michigan
    DORIS O. MATSUI, California          JOHN SHIMKUS, Illinois
    KATHY CASTOR, Florida                BRETT GUTHRIE, Kentucky
    JOHN P. SARBANES, Maryland           H. MORGAN GRIFFITH, Virginia
    BEN RAY LUJAN, New Mexico            GUS M. BILIRAKIS, Florida
    KURT SCHRADER, Oregon                BILLY LONG, Missouri
    JOSEPH P. KENNEDY III,               LARRY BUCSHON, Indiana
        Massachusetts                    SUSAN W. BROOKS, Indiana
    TONY CARDENAS, California            MARKWAYNE MULLIN, Oklahoma
    PETER WELCH, Vermont                 RICHARD HUDSON, North Carolina
    RAUL RUIZ, California                EARL L. ``BUDDY'' CARTER, Georgia
    DEBBIE DINGELL, Michigan             GREG GIANFORTE, Montana
    ANN M. KUSTER, New Hampshire         GREG WALDEN, Oregon (ex officio)
    ROBIN L. KELLY, Illinois
    NANETTE DIAZ BARRAGAN, California
    LISA BLUNT ROCHESTER, Delaware
    BOBBY L. RUSH, Illinois
    FRANK PALLONE, Jr., New Jersey (ex
        officio)
                                    CONTENTS

                                  ----------
                                                                       Page
    Hon. Anna G. Eshoo, a Representative in Congress from the State
      of California, opening statement...............................     1
        Prepared statement...........................................     3
    Hon. Michael C. Burgess, a Representative in Congress from the
      State of Texas, opening statement..............................     4
        Prepared statement...........................................     5
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     6
        Prepared statement...........................................     8
    Hon. Greg Walden, a Representative in Congress from the State of
      Oregon, opening statement......................................     9
        Prepared statement...........................................    11

                                   Witnesses

    Anne L. Schwartz, Ph.D., Executive Director, Medicaid and CHIP
      Payment and Access Commission..................................    12
        Prepared statement...........................................    15
        Answers to submitted questions...............................   142
    Angela Avila, Executive Director, Administracion de Seguros de
      Salud de Puerto Rico (Puerto Rico State Health Insurance
      Administration)................................................    33
        Prepared statement...........................................    35
        Answers to submitted questions...............................   149
    Sandra King Young, American Samoa Medicaid Director..............    50
        Prepared statement...........................................    52
        Answers to submitted questions...............................   161
    Maria Theresa Arcangel, Chief Human Service Administrator,
      Division of Public Welfare, Guam Department of Public Health
      and Social Services............................................    57
        Prepared statement...........................................    59
        Answers to submitted questions...............................   162
    Michal Rhymer-Browne, Assistant Commissioner, Department of Human
      Services, U.S. Virgin Islands..................................    63
        Prepared statement...........................................    65
        Answers to submitted questions...............................   164
    Helen C. Sablan, Medicaid Director, Commonwealth of the Northern
      Mariana Islands................................................    75
        Prepared statement...........................................    77
        Answers to submitted questions...............................   166

                               Submitted Material

    Statement of Delegate Aumua Amata Coleman Radewagen, a
      Representative in Congress from the Territory of Puerto Rico,
      June 19, 2019, submitted by Ms. Eshoo..........................   121
    Letter of June 19, 2019, from Michael L. Munger, Board Chair,
      American Academy of Family Physicians, to Ms. Eshoo and Mr.
      Burgess, submitted by Ms. Eshoo................................   123
    Letter of June 19, 2019, from Kenneth Rivera-Robles, President,
      Puerto Rico Chamber of Commerce, to Mr. Pallone and Mr. Walden,
      submitted by Ms. Eshoo.........................................   125
    Statement of Natalie Jaresko, Executive Director, Financial
      Oversight and Management Board for Puerto Rico, June 20, 2019,
      submitted by Ms. Eshoo.........................................   127
    Letter of June 19, 2019, from Rafael F. Torregrosa, President,
      Multi-sectorial Council on Puerto Rico's Health System, to Ms.
      Eshoo, submitted by Ms. Eshoo..................................   130
    Letter of June 20, 2019, from the Partnership for Medicaid to
      Hon. Mitch McConnell, Majority Leader, U.S. Senate, et al.,
      submitted by Ms. Eshoo.........................................   132
    Statement of America's Health Insurance Plans, June 20, 2019,
      submitted by Ms. Eshoo.........................................   134
    Statement of Resident Commissioner Jenniffer Gonzalez-Colon, a
      Representative in Congress from the Territory of Puerto Rico,
      submitted by Mr. Burgess.......................................   137
    Report of the Blue Ribbon Study Panel on Biodefense, ``Holding
      the Line on Biodefense: State, Local, Tribal, and Territorial
      Reinforcements Needed,'' October 2018, submitted by Mrs. Brooks
      \1\

    ----------

    \1\ The report has been retained in committee files and also is
    available at https://docs.house.gov/meetings/IF/IF14/20190620/109671/
    HHRG-116-IF14-20190620-SD013.pdf.

    STRENGTHENING HEALTHCARE IN THE U.S. TERRITORIES FOR TODAY AND INTO THE
                                     FUTURE

                                  ----------

                            THURSDAY, JUNE 20, 2019

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:29 a.m., in
    room 2322, Rayburn House Office Building, Hon. Anna G. Eshoo
    (chairwoman of the subcommittee) presiding.
        Members present: Representatives Eshoo, Engel, Butterfield,
    Castor, Sarbanes, Lujan, Schrader, Kennedy, Cardenas, Welch,
    Ruiz, Kuster, Kelly, Barragan, Blunt Rochester, Soto, Pallone
    (ex officio), Burgess (subcommittee ranking member), Guthrie,
    Griffith, Bilirakis, Long, Brooks, Mullin, Hudson, Carter,
    Gianforte, and Walden (ex officio).
        Staff present: Jeffrey C. Carroll, Staff Director; Waverly
    Gordon, Deputy Chief Counsel; Tiffany Guarascio, Deputy Staff
    Director; Saha Khaterzai, Professional Staff Member; Josh
    Krantz, Policy Analyst; Aisling McDonough, Policy Coordinator;
    Joe Orlando, Staff Assistant; Alivia Roberts, Press Assistant;
    Rick Van Buren, Health Counsel; C. J. Young, Press Secretary;
    Mike Bloomquist, Minority Staff Director; Jordan Davis,
    Minority Senior Advisor; Margaret Tucker Fogarty, Minority
    Staff Assistant; Caleb Graff, Minority Professional Staff
    Member, Health; Peter Kielty, Minority General Counsel; Ryan
    Long, Minority Deputy Staff Director; and J. P. Paluskiewicz,
    Minority Chief Counsel, Health.
        Ms. Eshoo. Good morning, everyone. The Subcommittee on
    Health will now come to order. The Chair now recognizes herself
    for 5 minutes for an opening statement.
        The committee is not in order.
        Thank you.

     OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Welcome to the witnesses, everyone that is in attendance
    here today.
        At the end of this coming September, the five U.S.
    territories face a Medicaid cliff, which means the
    supplementary Medicaid funding provided to the territories
    through the Affordable Care Act will run out. Without this
    Federal funding, over 1.5 million enrollees, including many
    children, could lose their healthcare. Each is an American
    citizen, and they are being treated differently than the
    constituents of every Member in this room.
        For too long, the territories have struggled with
    inadequate Federal funding for their Medicaid programs because
    Federal law caps Medicaid funding for the territories. The
    territories also receive a fixed Federal Medicaid match that is
    lower than the rate they would receive if they were States.
        Due to these restrictions, the territories routinely run
    out of Medicaid funds. Over the past decade, Congress has voted
    on five separate occasions to provide stopgap funds to certain
    territories. Even with these supplements, the funding for the
    territories is well below what a State Medicaid program would
    receive. In the territories, Medicaid spends an average of
    $1,866 per enrollee. In the States, on average, Medicaid spends
    more than four times that amount.
        In the States, the Medicaid program has a flexible
    financing structure. This structure guarantees funding if more
    individuals enroll due to an economic downturn, an epidemic, or
    a natural disaster. The territories do not have a guarantee.
    When disaster strikes, as it did with the 2017 hurricanes and
    the 2018 typhoons, the territories were forced to make very
    hard choices about coverage and services at the worst possible
    time.
        Simply put, the territories' Medicaid funding does not meet
    their needs. In Puerto Rico, 85 percent of residents report
    they are worried that they will be unable to access healthcare
    if they need it. A recent study found breast cancer patients in
    the territories were 82 percent less likely to receive timely
    radiation therapy.
        In American Samoa, Guam, and Commonwealth of the Northern
    Mariana Islands, the public hospitals face staff shortages due
    to low salaries, poor infrastructure, and high rates of
    uncompensated care. All of these challenges exist before--
    before, Members--the Medicaid cliff hits on September 30th. If
    we allow that to happen, Puerto Rico would go from over 2
    billion in Federal funding to just 380 million. The other
    territories would have similar cuts of upwards of 70--that is
    7-0--percent of their Medicaid funding. These cuts would have
    dire consequences to hundreds of thousands of American
    citizens, and I think this is a crisis.
        Today, we have to ask a vital question: How can we fail to
    care for so many American citizens based solely on where they
    live? So we want to hear from the witnesses what the loss of
    the Medicaid funds will mean to the people you serve and what
    Congress should do to improve the situation, both in the
    immediate future and in the long term.
        Thank you for traveling such distances to be with us today.
    We all appreciate it. And I know for some of you that it was a
    multiday journey to be with us. So we all appreciate your time
    and your willingness to answer our subcommittee's questions.
    And I now would like to recognize the time remaining to the
    gentleman from New Mexico, Mr. Lujan.

                 [The prepared statement of Ms. Eshoo follows:]

                    Prepared Statement of Hon. Anna G. Eshoo

        At the end of this coming September, the five U.S.
    territories face a ``Medicaid cliff,'' which means the
    supplementary Medicaid funding provided to the territories
    through the Affordable Care Act will run out. Without this
    Federal funding, over 1.5 million enrollees, including many
    children, could lose their healthcare.
        Each is an American citizen and they're being treated
    differently than the constituents of every Member in this room.
        For too long the territories have struggled with inadequate
    Federal funding for their Medicaid programs because Federal law
    caps Medicaid funding for the territories. The territories also
    receive a fixed Federal Medicaid match that is lower than the
    rate they would receive if they were States.
        Due to these restrictions, the territories routinely run
    out of Medicaid funds. Over the past decade, Congress has voted
    on five separate occasions to provide stopgap funds to certain
    territories.
        Even with these supplements, the funding for the
    territories is well below what a State Medicaid program would
    receive. In the territories, Medicaid spends an average of
    $1,866 per enrollee. In the States, on average, Medicaid spends
    more than 4 times that amount.
        In the States, the Medicaid program has a flexible
    financing structure. This structure guarantees funding if more
    individuals enroll due to an economic downturn, an epidemic, or
    a natural disaster.
        The territories do not have a guarantee. When disaster
    strikes, as it did with the 2017 hurricanes and the 2018
    typhoons, the territories were forced to make hard decisions
    about coverage and services at the worst possible time.
        Simply put, the territories' Medicaid funding does not meet
    their needs.
        In Puerto Rico, 85% of residents report they're worried
    that they'll be unable to access healthcare if they need it. A
    recent study found breast cancer patients in the territories
    were 82% less likely to receive timely radiation therapy. In
    American Samoa, Guam, and the Northern Mariana Islands, the
    public hospitals face staff shortages due to low salaries, poor
    infrastructure, and high rates of uncompensated care.
        All of these challenges exist before the Medicaid cliff
    hits on September 30th. If we allow that to happen, Puerto Rico
    would go from $2.3 billion in Federal funding to just $360
    million. The other territories would have similar cuts of
    upwards of 70% of their Medicaid funding. These cuts would have
    dire consequences to hundreds of thousands of American
    citizens. This is a crisis.
        Today we must ask a vital question: How can we fail to care
    for so many American citizens based solely on where they live?
        I want to hear from the witnesses what the loss of the
    Medicaid funds will mean to the people you serve and what
    Congress should do to improve the situation both in
    theimmediate future and in the long term. Thank you for
    traveling to be with us today.
        I now recognize Congressman Ben Ray Lujan for the remainder
    of my time.

        Mr. Lujan. Thank you, Chairwoman Eshoo and Chairman
    Pallone. The lack of adequate funding for Medicaid programs in
    the territories is not only unacceptable, it is inhumane.
    Funding for territories' Medicaid programs has never been
    enough, and if Congress fails to act before September 30th, the
    Medicaid cliff could leave the territories in an even more dire
    financial situation. We are talking about people not being able
    to access basic healthcare, the sick unable to see a doctor,
    children without care.
        Territory officials have described the expiration of these
    Federal funds as catastrophic, and people are scared. Estimates
    predict a third to a half of Puerto Rican Medicaid enrollees
    are at risk for losing coverage. And in the U.S. Virgin
    Islands, estimates show 18,000 people out of the 28,000 current
    enrollees could lose coverage. That is more than 60 percent.
        These are our fellow Americans. Congress must embrace them
    as fellow citizens and stop jeopardizing their access to
    healthcare. I thank you, and I yield back.
        Ms. Eshoo. The gentleman yields back, and the Chair is now
    pleased to recognize Dr. Burgess, the ranking member of the
    Subcommittee on Health, for 5 minutes for his opening
    statement.

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

        Mr. Burgess. Thank you, and I appreciate the recognition.
        During our last extenders hearing 2 weeks ago, I made note
    of the fact that we had left out an incredibly important piece
    of the conversation, Medicaid in the United States'
    territories. So I do want to thank you, Chairwoman Eshoo, for
    committing to hold this hearing, and I especially want to thank
    our representatives from each of our Nation's territories for
    having traveled such distances to be here today. I also want to
    recognize our representatives who waived on to the
    subcommittee, Representative Jenniffer Gonzalez-Colon and Ms.
    Radewagen from American Samoa, who have joined us today for
    this subcommittee hearing.
        The five United States territories--Puerto Rico, the U.S.
    Virgin Islands, Guam, American Samoa, the Commonwealth of the
    Northern Mariana Islands--each have a vulnerable population
    that depends on Medicaid and the Children's Health Insurance
    Program. The structure of these programs is different from that
    in the individual States. However, these programs are equally
    important, as these are United States citizens. The funding for
    Medicaid in some of our territories was last reauthorized in
    the Bipartisan Budget Act of 2018, but that funding is set to
    expire at the end of this September. It is critical that we act
    in a timely manner to reauthorize this funding.
        Over the course of the past few years, the territories have
    suffered tremendous damage from natural disasters. Hurricanes,
    typhoons--what were already at-risk populations have been made
    even more vulnerable as they have suffered destruction of their
    homes and their infrastructure, and in some cases healthcare
    professionals have left the territories for the mainland United
    States.
        As the territories continue to recover and prepare for
    future potential disasters, we need to be mindful of their
    inhabitants' access to healthcare and ensure adequate Medicaid
    funding that is integral to maintaining that access. As Dr.
    Schwartz points out in her testimony, the territories have
    sufficient funding to cover their expenses through the end of
    this fiscal year, which is rapidly approaching. However, it is
    the long-term challenge that we are facing today.
        I also think it is worth noting that Puerto Rico has by far
    the most enrollees and faces challenges that are not
    necessarily relevant in the other territories, but as we move
    forward in the process of extending Medicaid funding for all
    the five territories, we must remember that each territory is
    unique and may require a different approach in our legislation.
    Each territory has different benefits for its citizens, and
    only Puerto Rico uses Medicaid Managed Care, while other
    territories operate in the fee-for-service system. It is
    critical to ensure adequate funding for the territories so that
    they operate their Medicaid programs appropriately.
        I also believe it is important to have accountability
    measures and fraud detection and prevention. For our own
    States, the House has passed a permanent reauthorization of the
    Medicaid Fraud Control Units earlier this week, and we should
    perhaps think of a similar standard for the territories,
    especially if increased funding is provided in September. As we
    saw in Puerto Rico following the enactment of the Bipartisan
    Budget Act of 2018, it is possible for the territories to adopt
    and successfully implement program integrity measures.
        I hope we can use this hearing as an opportunity, an
    opportunity to have a productive conversation about any
    potential changes to the Federal payment mechanisms in the
    Medicaid programs in the territories, as we are willing to
    engage on this issue, but we need to strike the right balance
    between funding and structure of these programs so that they
    can succeed, be good shepherds of the taxpayer dollars, and
    deliver the services when and where they are needed.
        Again, I would like to thank all of our witnesses for being
    part of this. As the Chair will have noted, many of you
    traveled days to get here, and for that we are very
    appreciative. I look forward to your testimony.
        I21[The prepared statement of Mr. Burgess follows:]

                 Prepared Statement of Hon. Michael C. Burgess

        Thank you, Madame Chair. During our last extenders hearing
    2 weeks ago, I noted that we had left out an incredibly
    important piece of the conversation--Medicaid in U.S.
    territories. I would like to thank Chairwoman Eshoo for her
    commitment to hold this hearing, and I would especially like to
    thank the representatives from each of our Nation's territories
    for traveling such distances to be here today. I would also
    like to recognize Representative Jenniffer Gonzalez-Colon from
    Puerto Rico, who is waiving onto our subcommittee for this
    hearing.
        The five U.S. territories, Puerto Rico, the U.S. Virgin
    Islands, Guam, American Samoa, and the Commonwealth of the
    Northern Mariana Islands, each have a vulnerable population
    that depends on Medicaid and the Children's Health Insurance
    Program. The structure of these programs is different than
    those of the individual States; however, these programs are
    equally important, as these are United States citizens. The
    funding for Medicaid in some of the territories was last
    reauthorized in the Bipartisan Budget Act of 2018, but that
    funding is set to expire at the end of this September. It is
    critical that we act in a timely manner to reauthorize this
    funding.
        Over the course of the past few years, the territories have
    suffered tremendous damage from natural disasters, including
    hurricanes and typhoons. What are already at-risk populations
    have been made more vulnerable as they have suffered
    destructions of their homes and infrastructure, and in some
    cases, healthcare professionals have left the territories for
    the United States.
        As the territories continue to recover and prepare for
    potential future devastation, we need to be mindful of their
    inhabitants' access to healthcare, and ensuring adequate
    Medicaid funding is integral in maintaining that access.
        As Dr. Schwartz points out in her testimony, the
    territories have sufficient funding to cover their expenses
    through the end of this fiscal year; however, it is the long-
    term challenge that we are facing today. I also think it is
    worth noting that Puerto Rico has by far the most enrollees and
    faces challenges that are not necessarily relevant to the other
    territories. As we move forward in the process of extending
    Medicaid funding for all of the five territories, we must
    remember that each territory is unique and requires a different
    approach in our legislation.
        Each territory has different benefits for its citizens, and
    only Puerto Rico uses Medicaid managed care, while the other
    territories operate fee-for-service systems.
        While it is critical to ensure adequate funding for the
    territories to operate their Medicaid programs, I also believe
    that it is important to have appropriate accountability
    measures and fraud detection and prevention. For our own
    States, the House passed a permanent reauthorization of
    Medicaid Fraud Control Units earlier this week, and we should
    hold the territories to a similar standard--especially if
    increased funding is provided in September. As we saw in Puerto
    Rico following the enactment of the Bipartisan Budget Act of
    2018, it is possible for the territories to adopt and
    successfully implement program integrity measures.
        I hope that we can use this hearing as an opportunity to
    have a productive conversation about any potential changes to
    the Federal payment mechanisms in Medicaid programs in the
    territories. We are willing to engage on this issue, but we
    need to strike the right balance between funding and
    structuring these programs such that they can succeed and being
    good shepherds of taxpayer dollars.
        Again, I would like to thank all our witnesses for being
    part of this important conversation today. I yield back.

        Mr. Burgess. And let me yield, Ms. Chairwoman.
        Mr. Pallone. Mr. Ranking Member, would you yield a minute?
    Just some time. I just wanted----
        Mr. Burgess. Don't you have your own time?
        Mr. Pallone. No, but this is procedural.
        Mr. Burgess. As the chairman of the full committee, you
    usually get a lot of time.
        Mr. Pallone. Well, all I wanted to say is my understanding
    is that the Delegates that are here today from the various
    territories, when they waive in they are not actually allowed
    to participate, but some of them have statements, Madam Chair.
    So I was going to ask unanimous consent that the sStatement of
    Mr. Sablan and any of the other Delegates that are here be
    submitted for the record.
        Ms. Eshoo. So ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Pallone. Thank you. That is all.
        Ms. Eshoo. The gentleman yields back. I now would like to
    recognize the chairman of the full committee, Mr. Pallone, for
    5 minutes for an opening statement.

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

        Mr. Pallone. Thank you, Madam Chair.
        Today, our committee continues its efforts to ensure that
    all Americans have access to healthcare, whether they live in
    one of the 50 States or one of the 5 territories. The
    territories are on the verge of a financial and humanitarian
    crisis. Experts predict that, unless Congress acts, none of the
    territories will have enough Federal funds to support their
    Medicaid programs next year. Puerto Rico could potentially
    spend all its Federal funds in a matter of months, facing a
    shortfall of billions of dollars for the year.
        And it is no secret how we got here. For years, the
    territories have been operating their Medicaid programs under
    Federal funding caps that haven't kept up with the needs of the
    people who live there. The Affordable Care Act provided
    increased funding that has helped the territories for the past
    decade, but that expires at the end of this year.
        Natural disasters in the territories have also put
    increased strain on their Medicaid programs that required
    Congress to provide additional support to ensure people didn't
    lose access to care. Medicaid in the territories doesn't
    operate like it does in the States. Each territory only
    receives a certain amount of Federal funds that is supposed to
    last them the whole year. It is essentially a block grant.
        In the States, increases in State Medicaid spending are
    matched with an increase in Federal Medicaid funding. And this
    means that, in times of economic downturn or in the period
    following a natural disaster when state Medicaid spending
    increases, the State receives an automatic increase in Federal
    Medicaid dollars.
        But that is not how it works for the territories. Once they
    spend their annual allotment, they have to pay for their
    Medicaid costs using local funds. And this outdated system
    forces the territories to pay a substantial amount out of their
    own pockets to ensure that people there have access to
    healthcare. It is also a stark reminder of why block grants for
    Medicaid simply don't work. The Federal funding shortfall means
    most of the territories aren't able to provide the full range
    of benefits that State Medicaid programs are required to cover.
    Payments to doctors and hospitals are so low that providers are
    leaving the islands for the States.
        While Congress has provided some time-limited increases to
    the territories' Medicaid funding, we need a longer-term
    solution. Doling out Federal funds in dribs and drabs has led
    to uncertainty about the financial future of the programs and
    calls into question the long-term sustainability of the
    territories' Medicaid programs if Congress fails to act.
        And that is why we are here today, to discuss the Medicaid
    cliff facing the territories and what we can do to avert a
    catastrophe. As we will hear today, without additional funds
    hundreds of thousands of people in the territories could lose
    their healthcare coverage. Some territories have said they
    would have to stop covering prescription drugs, dental care,
    durable medical equipment, and community health centers, and
    others have said they expect to lose even more providers.
        And none of this really has to happen. We can all see the
    cliff coming, but if we work together, we can stop the
    territories from going off it. We can ensure that they can
    continue to provide care to the people who need it the most, we
    can stop the flight of doctors and providers from the islands,
    and we can provide the certainty and sustainability that the
    territories deserve.
        Several Members recently introduced legislation that would
    provide Puerto Rico with both the amount of Federal funds
    requested by the Governor and establish a path to help
    transition its Medicaid program to a full State-like program.
    And this would provide sufficient funds to Puerto Rico to
    ensure its people receive the healthcare services they need.
        And I want to thank the Members for their hard work on this
    bill, especially Representative Soto, who is on our committee.
    I hope this can potentially be a roadmap to help strengthen the
    Medicaid program in other territories. And I also want to thank
    the witnesses for being here today, particularly those who have
    traveled long distances to share your expertise with us.
        [The prepared statement of Mr. Pallone follows:]

                 Prepared Statement of Hon. Frank Pallone, Jr.

        Today, our committee continues its efforts to ensure that
    all Americans have access to healthcare, whether they live in
    one of the 50 States or one of the five territories.
        The territories are on the verge of a financial and
    humanitarian crisis. Experts predict that unless Congress acts,
    none of the territories will have enough Federal funds to
    support their Medicaid programs next year. Puerto Rico could
    potentially spend all its Federal funds in a matter of months,
    facing a shortfall of billions of dollars for the year.
        It's no secret how we got here. For years, the territories
    have been operating their Medicaid programs under Federal
    funding caps that haven't kept up with the needs of the people
    who live there. The Affordable Care Act provided increased
    funding that's helped the territories for the past decade, but
    that expires at the end of this year. Natural disasters in the
    territories have also put increased strain on their Medicaid
    programs that required Congress to provide additional support
    to ensure people didn't lose access to care.
        Medicaid in the territories doesn't operate like it does in
    the States. Each territory only receives a certain amount of
    Federal funds that's supposed to last them the whole year. It's
    essentially a block grant. In the States, increases in State
    Medicaid spending are matched with an increase in Federal
    Medicaid funding. This means that in times of economic
    downturn, or in the period following a natural disaster, when
    State Medicaid spending increases, the State receives an
    automatic increase in Federal Medicaid dollars. That's not how
    it works for the territories. Once they spend their annual
    allotment, they have to pay for their Medicaid costs using
    local funds. This outdated system forces the territories to pay
    a substantial amount out of their own pockets to ensure the
    people there have access to healthcare. It's also a stark
    reminder of why block grants for Medicaid simply don't work.
        The Federal funding shortfall means most of the territories
    aren't able to provide the full range of benefits that State
    Medicaid programs are required to cover. Payments to doctors
    and hospitals are so low that providers are leaving the islands
    for the States. While Congress has provided some time-limited
    increases to the territories' Medicaid funding, we need a
    longer-term solution. Doling out Federal funds in dribs and
    drabs has led to uncertainty about the financial future of the
    programs and calls into question the long-term sustainability
    of the territories' Medicaid programs if Congress fails to act.
        That's why we are here today--to discuss the Medicaid cliff
    facing the territories and what we can do to avert a
    catastrophe. As we will hear today, without additional funds,
    hundreds of thousands of people in the territories could lose
    their healthcare coverage. Some territories have said they
    would have to stop covering prescription drugs, dental care,
    durable medical equipment, and community health centers. Others
    have said they expect to lose even more providers.
        None of this has to happen. We can all see the cliff
    coming, but if we work together, we can stop the territories
    from going off it. We can ensure that they can continue to
    provide care to the people who need it the most. We can stop
    the flight of doctors and providers from the islands. And we
    can provide the certainty and sustainability that the
    territories deserve.
        Several Members recently introduced legislation that would
    provide Puerto Rico with both the amount of Federal funds
    requested by the Governor, and establish a path to help
    transition its Medicaid program to a full, State-like program.
    This would provide sufficient funds to Puerto Rico to ensure
    its people receive the healthcare services they need. I want to
    thank the Members for their hard work on this bill, especially
    Rep. Soto on our committee. I hope this can potentially be a
    road map to help strengthen the Medicaid program in other
    territories.
        I also want to thank the witnesses for being here today,
    particularly those that traveled long distances to share your
    expertise with us.
        Thank you.

        Mr. Pallone. I wanted to yield to Representative Soto. But
    just if I could say, I think many of our Members went after
    Hurricane Maria to Puerto Rico and the Virgin Islands. And when
    we were on that trip, both Stacey and Jenniffer representing
    the Virgin Islands and Puerto Rico were very helpful in
    explaining the problems with Medicaid at the time, so we
    learned a lot on that trip.
        But now I would like to yield to Representative Soto.
        Mr. Soto. Thank you, Mr. Chairman. We know that Puerto
    Ricans, the 3.3 million on the island, are experiencing a
    Medicaid crisis. Hospitals in disrepair, over 6,000 doctors
    have left the island over the past few years, debt increases
    just to try to keep the Medicaid program afloat, which ended
    up, in part, causing the PROMESA issues that we face, but it
    was mostly on display after Hurricane Maria, the decline in the
    healthcare infrastructure there.
        So I wanted to join Congresswoman Velazquez and the Puerto
    Rican Task Force to introduce legislation yesterday. I want to
    thank Governor Rossello for his leadership and input in that
    legislation as well as our Commissioner, Jenniffer Gonzalez-
    Colon. It would be a $15.1 billion bill with an 83 percent
    Federal match transition period of 4 years from 2020 to 2024,
    followed by a 10-year transition period after that. Obviously,
    a game changer.
        And thank you again, both Chairwoman Eshoo and Chairman
    Pallone, for your consideration of this important legislation.
        Ms. Eshoo. The gentleman yields back. It is a pleasure to
    recognize Mr. Walden, the ranking member of the full committee,
    for his 5 minutes for an opening statement.

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

        Mr. Walden. Oh, good morning, Madam Chair. And good morning
    to our witnesses and those in the audience. Thank you for being
    here.
        As the chairman of the committee mentioned, I led that
    CODEL, that congressional delegation trip to Puerto Rico and
    Virgin Islands, and it was a real eye-opener. And I know you
    all are still suffering, and in other places around the globe,
    from these terrible hurricanes. And we saw a hospital, as I
    recall it was in the Virgin Islands, that had to be shut down
    because of the mold and the water and the damage and, you know,
    we really appreciated your help, Stacey and others, in this
    effort. So we stand ready to do our part again. And today
    marks, I think, a really important step forward as we help you
    face these challenges in the territories.
        We have the honor of having before this committee a
    representative from each of the U.S. territories' Medicaid
    programs, and we are really pleased that you are here because
    we need to hear directly from you about the challenges you face
    due to the coming funding cliff in September. I know some of
    you had to quite literally fly around the world to join us here
    today, so we thank you for that. I complain about my trip to
    the West Coast every week, and I know you are a long way past
    that, so I will quit complaining.
        We are also pleased to have before us Anne Schwartz, the
    executive director of MACPAC. You and your team's work has been
    really helpful and invaluable over the years, so we are glad
    you could join us as well.
        As we know, the additional funding for the territories that
    they have received over the last decade expires September 30th,
    and this could have detrimental effects for each of the five
    territories here today. These consequences are not lost on me.
    It is a commitment. We will work together in a bipartisan way
    to find a solution that avoids this cliff and gets these
    programs on a more sustainable path.
        Last Congress, under my leadership, this committee led a
    robust bipartisan response to the damage inflicted by the
    Hurricanes Maria, Harvey, and Irma. I led a bipartisan
    delegation to Puerto Rico and the U.S. Virgin Islands to see
    the devastation firsthand and hear from people on the ground. I
    was thankful then and am now to Representative Gonzalez-Colon
    for her work and help on this important issue.
        Among other visits, the healthcare facilities we saw on
    both islands were in dire conditions, not only because of the
    direct damage sustained during the storms, but also because of
    the sustained lack of power to the islands after those storms.
    It was also our committee that pushed for the 2 years, a
    hundred percent funding included in the Bipartisan Budget Act
    of 2018 to help respond to that crisis, and we are interested
    to know how that funding has helped in the recovery.
        Included in the BBA was an incentive for both Puerto Rico
    and the Virgin Islands to draw down additional funds should
    those territories improve data reporting and program integrity
    measures, because we all care about those as well, conditions
    that both territories have met. That is good progress, but I
    would also like to hear from you both on what else we can do to
    improve program integrity as we look for ways to fund the
    existing shortfalls.
        Another reason this hearing is so important is that we need
    you all to help differentiate your territories' specific needs.
    Too often in Congress you all get lumped together, and that is
    not fair and it is not right. But as each of your territories
    makes clear, we have five distinct programs with five distinct
    sets of challenges and program designs, and understanding those
    differences will be key. We know how critical this situation
    is, and we are very thankful to each of you for being here
    today and your willingness to work with us over the coming
    months, and I look forward to your testimony.
        I mentioned the work of Representative Gonzalez-Colon, who
    has joined us on the dais. She is attending today's hearing but
    cannot participate due to our committee rules. That is the
    tradition of the committee, but she does work us over pretty
    well all the time on these issues. And I would also recommend
    that any Member that has a question regarding the current
    circumstances in Puerto Rico work with her. There is no better
    way to understand the issue, and she is a fierce advocate for
    Puerto Rico.
        We are also really pleased to welcome from American Samoa
    another terrific advocate, Representative Radewagen, who
    champions American Samoa. We are pleased to have her as well.
    And, of course, the gentlelady from the Virgin Islands too, who
    played host to us when we there and visiting. We are glad for
    her advocacy and help as well.
        And, Madam Chair, with that we will get on about our
    business. Thank you for having this hearing. We look forward to
    working with you to a positive outcome, and I yield back.
        [The prepared statement of Mr. Walden follows:]

                     Prepared Statement of Hon. Greg Walden

        Today marks an important step forward in our work to
    address the healthcare challenges faced by our territories.
        We have the honor of having before this committee a
    representative from each of the U.S. territories' Medicaid
    programs. We are thrilled to have each of you here as we
    thought it imperative to hear directly from each of you about
    the challenges you face due to the coming funding cliff in
    September. I know some of you had to quite literally fly around
    the world to join us here today, so thank you. We are also
    pleased to have before us Anne Schwartz, the Executive Director
    of MACPAC. You and your team's work on the territories has been
    invaluable over the years, and we are so glad you are able to
    join us today.
        As we know, the additional funding for the territories that
    they have received over the last decade expires September 30th,
    and this could have detrimental effects for each of the five
    territories here today. Those consequences are not lost on me.
    It is my commitment that we will work together, in a bipartisan
    way, to find a solution that avoids this cliff and gets these
    programs on a more sustainable path.
        Last Congress, under my leadership, this committee led a
    robust bipartisan response to the damage inflicted by
    hurricanes Maria, Harvey, and Irma. I led a bipartisan
    delegation of Members to Puerto Rico and the U.S. Virgin
    Islands to see the devastation firsthand. I was thankful then
    and am thankful now to Rep. Gonzalez-Colon for her work and
    help on this important issue. Among other visits, the heathcare
    facilities we saw on both islands were in dire conditions, not
    only because of the direct damage sustained during the storms,
    but also because of the sustained lack of power to the islands
    after the storms.
        It was also our committee that pushed for the 2 years of
    100% funding included in the Bipartisan Budget Act of 2018 to
    help respond to the crisis, and we are interested to know how
    that funding has helped the recovery. Included in the BBA was
    an incentive for both Puerto Rico and the Virgin Islands to
    draw down additional funds should those territories improve
    data reporting and program integrity measures, conditions that
    both territories met. That's good progress, but I would also
    like to hear from you both on what else we can do to improve
    program integrity as we look for ways to fund the existing
    shortfalls.
        Another reason this hearing is so important is that we need
    you all to help differentiate your territories' specific needs.
    Too often in Congress you all get lumped together, but as each
    of your testimonies make clear, we have five distinct programs
    with five distinct sets of challenges and program designs.
    Understanding those differences will be key.
        We know how critical this situation is, and we are very
    thankful to each of you for being here and for your willingness
    to work with us over the coming months. I look forward to your
    testimony.
        I mentioned the work of Representative Gonzalez-Colon. She
    is attending today's hearing today but cannot participate due
    to committee rules. I would recommend that any Member that has
    questions regarding the current circumstances in Puerto Rico
    talk with Ms. Gonzalez-Colon. There is no better authority and
    no fiercer advocate for the people of Puerto Rico.
        Thank you, and I yield back.

        Ms. Eshoo. I thank the gentleman. He yields back. The Chair
    would now like to remind Members that, pursuant to committee
    rules, all Members' written opening statements shall be made
    part of the record.
        I now would like to introduce the witnesses for today's
    hearing, thank them each and all again for being with us.
    First, Dr. Anne Schwartz, the executive director of Medicaid
    and CHIP Payment and Access Commission. Welcome to you.
        Angela Avila, welcome to you. She is the executive
    director, Puerto Rico State Health Insurance Administration.
    Welcome and thank you to you.
        Sandra King Young, the Medicaid director, American Samoa
    State Agency, welcome and thank you to you.
        Maria Theresa Arcangel--what a beautiful name, Arcangel. We
    want all the committee members to be archangels, how is that?
        [Laughter.]
        Ms. Eshoo. She is the chief Human Service Program
    administrator, Division of Public Welfare, Guam Department of
    Public Health and Social Services, thank you to you.
        And is it ``Mi-hall''?
        ``Mi-cal''?
        Ms. Rhymer-Browne. ``Mi-cal.''
        Ms. Eshoo. Michal Rhymer-Browne, the assistant commissioner
    of the United States Virgin Islands Department of Human
    Service, Oversight of the Medicaid Division.
        And last but not least, Helen Sablan, the Medicaid
    director, Commonwealth of the Northern Mariana Islands State
    Medicaid Agency.
        So again, thank you, and welcome to each one of you. The
    Chair is going to recognize each witness for 5 minutes. The
    light on the--you see them, light boxes before you. When it
    turns red, stop. How is that? Just like on the road.
        So let me begin with Dr. Schwartz. You are recognized for 5
    minutes.

      STATEMENTS OF ANNE L. SCHWARTZ, Ph.D., EXECUTIVE DIRECTOR,
    MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION; ANGELA AVILA,
        EXECUTIVE DIRECTOR, PUERTO RICO STATE HEALTH INSURANCE
      ADMINISTRATION; SANDRA KING YOUNG, AMERICAN SAMOA MEDICAID
         DIRECTOR; MARIA THERESA ARCANGEL, CHIEF HUMAN SERVICE
     ADMINISTRATOR, DIVISION OF PUBLIC WELFARE, GUAM DEPARTMENT OF
       PUBLIC HEALTH AND SOCIAL SERVICES; MICHAL RHYMER-BROWNE,
      ASSISTANT COMMISSIONER, DEPARTMENT OF HUMAN SERVICES, U.S.
        VIRGIN ISLANDS; AND HELEN C. SABLAN, MEDICAID DIRECTOR,
              COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

                  STATEMENT OF ANNE L. SCHWARTZ, Ph.D.

        Dr. Schwartz. Good morning, Chairwoman Eshoo, Ranking
    Member Burgess, and members of the Health Subcommittee. I
    appreciate the opportunity to share the MACPAC's work as this
    body considers the role of Medicaid and CHIP in the five U.S.
    territories.
        As you know, MACPAC is an independent, nonpartisan advisory
    body charged with analyzing and reviewing Medicaid and CHIP
    policies and making recommendations to Congress, the Secretary
    of HHS, and the States on issues affecting these programs. The
    Commission's 17 members, including Chair Melanie Bella and Vice
    Chair Chuck Milligan, are appointed by the Comptroller General.
        As in the States and DC, Medicaid and CHIP play a vital
    role in providing access to health services for low-income
    individuals in the territories. The challenges are similar to
    those in the States, populations with significant healthcare
    needs, an insufficient number of providers, and constraints on
    local resources. With some exceptions, the territories operate
    under similar Federal rules and are subject to oversight by
    CMS.
        There is a somewhat tired old saying that, if you have seen
    one Medicaid program, you have seen one Medicaid program. This
    is because, despite common rules, State programs vary widely.
    For the purposes of the hearing today, it is important to note
    both that territory Medicaid programs differ from the States
    and they also differ from each other. These differences reflect
    their unique geography, history, local economy, and health
    system infrastructure.
        My written statement goes into detail as to how Medicaid
    operates in the territories, and if you are interested in even
    more information, MACPAC has published fact sheets describing
    each territory's program. But the most important point I wish
    to share today, one that has already been mentioned several
    times, is that Federal policy for financing Medicaid in the
    territories has led to chronic underfunding. This is because
    the policy differs from the States' in two key ways.
        First, territorial Medicaid programs are constrained by a
    ceiling on Federal funding referred to as the section 1108 cap
    or allotment. Territories receive a relatively small amount
    funding each year regardless of changes in enrollment and use
    of the services. In comparison, states receive federal funding
    for each state dollar spent with no cap.
        Second, the Federal Medical Assistance Percentage, the
    FMAP, or matching rate, is statutorily set at 55 percent. For
    the states, the FMAP provides higher reimbursement to those
    with lower per capita incomes relative to the national average
    and vice versa. This reflects States' differing abilities to
    generate local revenues to fund their Medicaid programs.
        If the FMAPs for the territories were set using the formula
    used for the States, the matching rate for all 5 territories
    would be much higher, and in most cases the maximum of 83
    percent. Congress has stepped in at multiple points with fiscal
    relief, most notably in 2010 as part of the Affordable Care
    Act, more recently in the aftermath of Hurricane Irma and
    Maria.
        The Balanced Budget Act of 2018 provided Puerto Rico and
    the U.S. Virgin Islands with additional funds available at a
    100 percent matching rate. Earlier this month, a disaster
    relief bill provided supplemental funds for the Commonwealth of
    the Northern Mariana Islands at a hundred percent FMAP through
    the end of this fiscal year, and it also allowed American Samoa
    and Guam to access the remaining ACA funds during this period
    at a hundred percent matching rate. As a result of these
    actions, all five territories should now have sufficient
    funding to cover program expenses through the end of fiscal
    year 2019. However, because all sources of supplemental fund
    will expire at the end of the calendar year, we anticipate that
    all five will experience funding shortfalls at some point in
    fiscal year 2020.
        As the Commission noted in its analysis of Puerto Rico's
    Medicaid program in our recently issued report to Congress, the
    history of responding to crises with short-term infusions of
    funds has caused a great deal of uncertainty. An additional
    time-limited allotment of Federal funds would certainly prevent
    a fiscal cliff and would in the short term ensure the continued
    delivery of critical health services to eligible individuals.
    But it would not address the underlying challenges with the
    financing structure that make it difficult for territorial
    officials to plan, manage, and sustain long-term reliable
    access for Medicaid beneficiaries residing in these
    jurisdictions.
        Thank you for the opportunity to share MACPAC's analyses,
    and I am happy to answer any questions.
        [The prepared statement of Dr. Schwartz follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo. Thank you, Dr. Schwartz.
        I would just like to take a moment to welcome to our
    hearing--I saw her come in the door--our colleague,
    Congresswoman Nydia Velazquez. Thank you for being here, and
    thank you for the legislation that you have authored and was
    dropped yesterday. I see Congresswoman Stacey Plaskett here,
    and I want to recognize her and thank her for her presence. And
    I also want to recognize Congressman Sablan from the Northern
    Mariana Islands for joining us. And if someone comes and takes
    that seat, you take another one.
        Nydia, would you like to come up and join us too? OK, hold
    onto that seat then. OK. But we are glad that you are here, and
    you are always welcome. It is an honor to have each one of you
    here.
        I now would like to recognize Ms. Avila. You are recognized
    for 5 minutes for your testimony.

                       STATEMENT OF ANGELA AVILA

        Ms. Avila. Good morning, Mrs. Chairman Eshoo, Mr. Chairman
    Pallone, Ranking Member Walden, and Mr. Ranking Member Burgess,
    and members of the committee. Thank you for the opportunity to
    testify today on Puerto Rico's healthcare system. I am honored
    to be here on behalf of the Government of Puerto Rico and to be
    joined at the witness table with colleagues from the other
    territories.
        Puerto Rico's Medicaid program serves approximately 1.5
    million people, nearly half of the total population and some of
    our Nation's most vulnerable citizens. We serve approximately
    425,000 children, 305,000 elderly and disabled, and more than
    17,000 pregnant women at any given time. Our beneficiaries are
    served by a network of thousands of healthcare providers such
    as doctors, nurses, and health technicians, 64 hospitals, 20
    federally qualified health centers, and 900 pharmacists.
        Puerto Rico's Medicaid system has been chronically
    underfunded due to a historically low Federal Medicare
    Assistance Percentage, known as FMAP, a correspondingly high
    local matching requirement, and the cap on Federal funding.
    Currently, we are operating under increased Medicaid funding
    and temporary 100 percent FMAP through the Bipartisan Budget
    Act of 2018, or BBA, which we received in the aftermath of
    Hurricane Maria, the worst natural disaster in our Nation's
    history.
        It is only through this additional Federal funding and the
    increased FMAP provided in the BBA that Puerto Rico has been
    able to sustain its healthcare system. We thank the members of
    this committee who worked to ensure Puerto Rico had received
    the necessary funding. We have made great progress in our
    program since the devastating hurricanes, thanks to the BBA.
    However, all that progress is in jeopardy due to the
    uncertainty of no additional Federal funding.
        With the upcoming expiration of the BBA on September 30,
    the increased Medicaid funding and the temporary 100 percent
    FMAP Puerto Rico received through the BBA will expire. If no
    action is taken for fiscal year 2020, the FMAP will revert to
    the statutorily mandated 55 percent FMAP up to the Federal
    Medicaid funding cap of approximately 380 million.
        This will result in effective Federal matching, including
    remaining ACA funds, of 30 percent for the program in fiscal
    year 2020 and 13 percent in fiscal year 2021. Once this funding
    is exhausted, Puerto Rico will 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, this level of local funding is not an option.
        Unless Congress acts, we will be faced with potentially
    catastrophic damage to our Medicaid program. We will be forced
    to potentially remove any services that are not required under
    Medicaid rules, such as pharmacy coverage and dental coverage
    that are already limited. We may have to end coverage for the
    current population who receive healthcare with local funds, and
    we will continue to lose more of our Medicare providers because
    of low reimbursement rates.
        Last month, Governor Rossello submitted Puerto Rico's
    official Medicaid ask to Congress, 5 years of funding at an 83
    percent FMAP for a total of 15.1 billion in funding. This
    funding will provide Puerto Rico with stability in the short
    term while we work together on a sustainable, long-term funding
    mechanism. The short-term, critical sustainability measures
    needed to stabilize the healthcare system in Puerto Rico are
    keeping physicians within the system to avoid critical
    shortages, providing lifesaving Hep C drugs, adjusting the
    Puerto Rico poverty level to increase fairness in Medicaid
    eligibility, and providing Medicare Part B premium assistance.
        The Medicaid cliff that Puerto Rico is facing is an
    emergency that must be dealt with urgently. I love my island,
    and it is my home and I am committed to working with Congress
    to create the Medicaid program that all of us can be proud of.
    Thank you for the opportunity to meet these urgent matters, and
    I welcome any questions you may have. Thank you.
        [The prepared statement of Ms. Avila follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo. Thank you very much.
        You know, it isn't--I want to make note of something. It
    isn't very often that a full panel of witnesses are all women,
    so I want to make note of that. Thank you. I think it is
    wonderful. Thank you.
        [Applause.]
        Ms. Eshoo. Ms. Young, you are recognized for 5 minutes for
    your testimony.

                     STATEMENT OF SANDRA KING YOUNG

        Ms. Young. Talofa, Chairwoman Eshoo, Ranking Member
    Burgess, and members of the committee. Thank you for the
    opportunity to testify before your committee on how to
    strengthen healthcare in the U.S. territories. I want to
    recognize that this is the first time that American Samoa and
    the other territories have this extraordinary opportunity to
    testify before this committee that has jurisdiction over
    Medicaid issues. A few weeks ago, we also testified before the
    Natural Resources Committee.
        This is a monumental step forward for the territories and
    our efforts for advocacy on Medicaid programs. The challenges
    with the U.S. territories are unique, and a cookie-cutter
    approach will not work. However, we do have some things in
    common. The key to strengthening healthcare in American Samoa
    and the territories lays with fixing two key statutory
    provisions in our Medicaid programs.
        First, the cap on the territories' Medicaid block grants
    must be lifted or increased. American Samoa has 12 million in
    this fiscal year, and we receive a nominal 2 to 3 percent
    increase every year.
        With the availability of the Affordable Care Act Medicaid
    funding in 2011, we were able to draw, on average, an
    additional 5.4 million a year. In 2017, our Medicaid agency
    added four new Medicaid services and providers to our program.
    With these new services, we exhaust our block grant in the
    second quarter.
        Funding these new services is limited also by the
    availability of our local matched dollars. This year, we
    suspended our new services in March because we had exhausted
    our 2 million in local match. That suspension was just lifted
    in the first week of June when the disaster supplemental bill
    was made available, providing us with relief with a 100 percent
    FMAP up until September 30th, 2019, for the 152 million ACA
    money that we couldn't spend.
        We do anticipate the cost of these new services to increase
    over the next 5 years, and our initial estimate to ensure
    adequate coverage is around 10 million a year, if we provide
    comprehensive coverage as required by our Medicaid State Plan
    and Social Security Act. If we are to continue with block
    grants, then American Samoa must have an increase of at $30
    million a year in Federal Medicaid dollars.
        Second, the current FMAP percentage is unsustainable for
    our government. We would like to propose a more sustainable
    FMAP rate of 90 percent Federal, 10 percent local match for at
    least the first few years, or a straight application of the
    FMAP formula based on American Samoa's actual poverty levels.
    Critical is the principle that both the cap and the FMAP must
    be addressed together. These two issues are interdependent, and
    one should not happen without addressing the other.
        Third, American Samoa has a unique 1902(j) waiver that
    allows us to manage our very small Medicaid program from being
    overregulated. Some of the things unique to our program is that
    we do not do individual enrollment for Medicaid because we
    administer a presumptive eligibility program allowed under our
    waiver. It is the position of our government that we want to
    maintain this statutory waiver that best suits the unique
    challenges we face as a remote island territory.
        Lastly, what is the real impact to our people when we don't
    have enough Medicaid Federal and local funding for our program?
    In short, once the ACA money expires in September, we will stop
    our off-island medical referral program for medically necessary
    care not available on island. We will stop payments for
    wheelchairs, CPAP machines, and prosthetics. We will stop
    payments for the Medicare dual eligible beneficiaries. The only
    Medicaid provider that we will continue to fund will be our one
    hospital.
        But Medicaid services like prostate or breast cancer
    treatment and all cancer treatments, knee or hip replacements,
    heart surgeries for adults, or rheumatic heart disease
    surgeries for our children will simply not be covered. That we
    must intentionally make decisions that could leave our people
    permanently incapacitated physically or mentally, or at worst,
    the risk of loss of life is morally unconscionable.
        This committee and Congress have the power to help American
    Samoa and the other territories finally fix the statutory
    barriers so we don't have to make these decisions. Everyone
    deserves to receive lifesaving treatments, even in the
    territories. On behalf of our people and our government, again
    I appreciate your time and efforts to hold this hearing. May
    God bless and guide you in the important work that you do for
    this country. I am happy to answer any questions. Thank you.
        [The prepared statement of Ms. Young follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo. Thank you very much.
        I now would like to recognize Ms. Arcangel for her 5
    minutes for testimony.

                  STATEMENT OF MARIA THERESA ARCANGEL

        Ms. Arcangel. Hafa adai, Madam Chair and Ranking Minority
    Members. On behalf of Governor Leon Guerrero and the people of
    Guam, thank you for inviting us to testify regarding the
    healthcare issues that Guam Medicaid recipients endure and the
    cliff Guam will face if there is no immediate action taken by
    this Congress beginning fiscal year 2020 to increase the
    territories' Federal Medical Assistance Percentage and increase
    or remove the Federal funding cap.
        Like many stateside rural areas, Guam suffers from shortage
    of primary care providers and specialists. HRSA has qualified
    Guam as both a medically underserved and a health professional
    shortage area. The shortage of health professionals is
    attributed to the difficulty in recruiting providers due to
    Guam's remote location, the physician salary that is not
    comparable to U.S. rate, and the high cost of malpractice
    insurance on Guam.
        Clearly, there remains a shortage of primary care
    physicians, which is felt most especially among the Medicaid
    recipients who struggle finding a permanent medical home
    because of providers' refusal to accept patients due to low
    reimbursement and the late payments. Thus, Medicaid clients are
    forced to seek treatment at the emergency room, which is more
    costly. Additionally, due to gaps in the tertiary care
    services, there are instances when off-island doctors refuse to
    accept Medicaid's referrals due to untimely reimbursement.
        In some instances, patients needing to transfer from Guam
    Hospital to a highly equipped off-island medical facility must
    stay longer in our hospitals for several days before treatment
    can be obtained. As a result, patients' condition worsens,
    requiring air ambulance. Similarly, the cost of medical
    supplies and equipment are more expensive in Guam due to the
    limited distributors as compared to hundreds of companies
    available here. The high shipping costs and vendors' tendency
    to impose a higher price on medications due to lack of
    competition contribute to the high cost.
        All these factors add to the high cost of healthcare in
    Guam. The migration of FAS citizens in any U.S. soil under the
    Compact of Free Association according to the U.S. Census in
    2013, there were 17,170 Compact migrants on Guam. In fiscal
    year 2017, Guam estimated that 38.5 million was spent on
    healtcare and welfare services for this population. Moreover,
    of the 110.8 million expenditures of Guam Medicaid in fiscal
    year 2018, $29 million or 27 percent of total amount were spent
    for FAS population's healthcare needs. The influx of COFA
    citizens created an additional hardship on Guam's economy. As a
    result, the government is unable to guarantee the availability
    of 45 percent local matching funds required to draw down the
    Federal grant awards.
        The U.S. territories administer the Medicaid under Federal
    regulations that are different from the 50 States and District
    of Columbia. Guam Medicaid's FMAP rate is fixed at 55 percent.
    However, the FMAP for 50 States and DC varies by States' per
    capita income between 50 percent to 83 percent. In addition,
    the Federal Medicaid funding to Guam is subject to an annual
    cap, which is 18.38 million for next fiscal year, unlike the
    States and DC that are open-ended.
        Clearly, there is a huge disparity on the Medicaid funding
    distribution of Guam in comparison to the U.S. States. Those
    differences on Medicaid rules affect the quality of healthcare
    provided to program recipients and contribute to the economic
    destabilization of Guam. Due to increase in utilization, the
    number of eligibles, and new treatment modality and others,
    Guam's Medicaid expenditures increased by 323 percent over the
    past decade, 26 million in fiscal year 2009 and 110.8 million
    in fiscal year 2018.
        If no action is taken to increase the FMAP and remove the
    Federal funding cap, Guam Medicaid could be forced to terminate
    more than 50 percent of its 43,000 eligibles. This will further
    increase Guam's estimated uninsured population rate of 24.8
    percent in fiscal year 2017. Hence, in order to improve the
    healthcare services of our Medicaid recipients, Guam proposes
    to increase the U.S. territories' FMAP and remove the Federal
    funding cap.
        Thank you for the opportunity to testify on this important
    issue. We hope that the committee will develop a solution to
    assist the U.S. territories in resolving the longstanding
    disparity on Medicaid funding distribution that affects our
    economy.
        [The prepared statement of Ms. Arcangel follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo. Thank you very much.
        I now would like to recognize Ms. Rhymer-Browne for 5
    minutes for your testimony.

                   STATEMENT OF MICHAL RHYMER-BROWNE

        Ms. Rhymer-Browne. Madam Chair Eshoo, Chairman Pallone,
    Ranking Member Walden, Ranking Member Burgess of the Health
    Subcommittee, 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 United States
    Virgin Islands considering the impending Medicaid fiscal
    funding cliff which will impact us beginning October 1, 2019. I
    am Michal Rhymer-Browne, assistant commissioner of the Virgin
    Islands Department of Human Services, and I have the distinct
    privilege to have oversight of the Medicaid Division.
        I must also thank today, Kimberley Causey-Gomez, my
    commissioner nominee, my boss, of the Virgin Islands Department
    of Human Services, who has extended to us her complete support
    as we prepared to come here to this important committee
    meeting. 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, which ravaged our territory in September of 2017.
        We are a resilient people, but my testimony today is truly
    intended to actualize the empathy and to request your continued
    urgent support to address the critical Federal and local
    funding crisis we are facing here in our healthcare system in
    the Virgin Islands. My testimony is here today, and I just feel
    the need as I am sitting here with you to speak from my heart,
    and I will go back a little bit to the script.
        But as I am sitting here, I am sitting here with some hope,
    but I reflected just a few moments ago when I was sitting under
    a palm tree on one of our beaches one day on a cultural
    holiday. And I was called by our Medicaid director to tell me
    of a little boy who was just born about 3 days ago who had
    deteriorated digestive system and he would die in a few days.
        At that point, we faced the decision of whether we would
    send this child off island, and at that point we were terrified
    because we said if we send this child, we may not be able to
    pay immediately. But I called my commissioner and I recommended
    that we help to save this child. This child was just born 3
    days ago. As I was sitting there under the palm tree, I felt
    fear. I felt real fear that this child would die. And it was
    then we made the decision to move forth even with the cap at
    that time, even before our hundred percent FMAP. We were
    terrified at the choices we had to make.
        And as I am sitting here with some hope, I reflect on
    sitting at my dining room table just a few weeks ago,
    probably--no, a couple months ago--when I got the call from a
    teacher of a 20-year-old boy who had graduated early and she
    said, ``He is in the hospital and he is paralyzed and he needs
    to be airlifted. He is one of your Medicaid members, can you
    send him?''
        At that point, we had to make the decision. And I knew that
    our monies were running out under the BBA 100 percent funding,
    but I said we must, we must send this man, this young man, so
    he can walk again. And I will share with you 3 weeks ago we got
    this call that this young man is walking again because we made
    the decisions, the tough decisions.
        And in the U.S. Virgin Islands as I am sitting here, I sit
    here with hope, but I want to share with you that we need your
    help. We need your urgent help. We understand. We understand
    that permanent fixes may not be able to be done, but we need
    your support even if it is another hundred percent for a couple
    of years, even it is in the future you make a permanent fix.
        But as we approach this Medicaid funding cliff, I appeal to
    you, help us in the U.S. Virgin Islands. Help us in all of the
    U.S. territories. You can make a difference, and I know by your
    votes, one by one, if we put them together and with the larger
    Congress, we can make a difference for the people of the U.S.
    Virgin Islands and the other territories.
        So, I thank you. You have my testimony in writing. You can
    ask me questions. But just now I feel like I needed to speak
    from my heart.
        [The prepared statement of Ms. Rhymer-Browne follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo. Thank you very much. I like the sounds of your
    heart.
        I now would like to recognize--oh, that is it for the--no,
    we have Ms. Sablan. I would now like to recognize you for your
    testimony, and you have 5 minutes. Welcome.

                      STATEMENT OF HELEN C. SABLAN

        Ms. Sablan. Thank you. Good morning, honorable chairs,
    ranking members, and Members of the United States House of
    Representatives. We are very heartened that the committee of
    jurisdiction over the Medicaid program is holding this hearing
    and that Chairman Pallone recognized that the U.S. territories
    are on the verge of a humanitarian and financial crisis if
    Congress doesn't act swiftly to increase their Medicaid funding
    for the next year and beyond. That is the plain truth.
        The Commonwealth of the Northern Mariana Islands is indeed
    on the verge of a humanitarian health, healthcare system, and
    financial crisis because of the differences in the way the law
    treats territories versus the States. Avoiding the crisis will
    require an act of Congress because the difficulties are
    statutory.
        Before proceeding, I would like to express our deepest
    appreciation to Congress for the passage and enactment of H.R.
    2157 that included Medicaid disaster assistance for the CNMI
    resulting from the Category 5 Super Typhoon Yutu. While
    recovery efforts were initiated, a slower onset disaster was in
    the making.
        Throughout 2018, CNMI was sliding to the edge of the
    Medicaid fiscal cliff because the temporary funding was running
    out in fiscal year 2019. In March 2019, we reached and fell off
    the cliff with a complete exhaustion of Medicaid funds from the
    section 1108 budget caps, temporary increases by section 2005
    of the Affordable Care Act, and small amount from section 1323
    of the ACA.
        While it is complete free fall, we fortunately landed on a
    ledge with the passage of H.R. 2157. The ledge of the Medicaid
    fiscal cliff is tenuous, and that ledge will crumble on
    September 30 of this year. As of October 1, we will only have
    limited section 1108 CHIP and EAP funding. We will not have
    sufficient funding to support all mandatory services and many
    critical optional services. For example, medications and
    surgery will be severely cut or eliminated.
        The fiscal crises in the CNMI were made worse by adding to
    the debt obligation as well. The health system will be crippled
    because providers will stop taking Medicaid beneficiaries.
    There will be substantially more uninsured patients because the
    Medicaid program will effectively be ended. CHCC will not have
    funds for drugs, laboratory reagents, and other supplies.
    Frustrated clinicians and nurses may once again leave the CNMI,
    and all of this will affect the health of the whole population.
    The U.S. citizens of the CNMI are huddling on the ledge today
    but hope Congress will provide a path up the cliff and enable
    the territories to avert disaster.
        As shown in written testimony, there are 16,206 U.S.
    citizen beneficiaries enrolled in the Medicaid and CHIP
    programs today, or about 49 percent of the total U.S. citizens
    in the CNMI. The median household income for a CNMI family was
    less than one-third of the rest of the United States. And more
    will fall on the ledge because the CNMI government just
    instituted austerity measures where government employees have
    been placed on a mandatory reduced work schedule.
        There are two well-understood major causes of fiscal cliff,
    the section 1108 budget caps and the FMAP. Both require acts of
    Congress to fix.
        First, section 1108. The territories receive a budget
    appropriation under section 1108. The budget caps were
    established decades ago and do not bear any relationship to the
    actual cost of healthcare today, in the CNMI today. The ACA
    recognized the problem and provided a temporary increase of
    hundred million amount of expended from 2011 to 2019. During
    this period, the CNMI Medicaid was able to increase eligibility
    and add optional services. In FY 20, the CNMI total expenses
    and IBNR was around 71 million. Compared to the total of FY
    2020, CMS allotted funds so the shortfall will be about 48
    million.
        Second, the FMAP for the territories is an artificial
    percentage, unlike the FMAP for States, that is calculated
    based on per capita income relative to the national average.
    Although CNMI has much lower per capita income than most of all
    States, it must use a fixed and inequitable FMAP percentage.
    That makes it impossible for the CNMI government to fully fund
    the CNMI share.
        Finally, before closing my oral statement, I would like to
    say that the CNMI is very well aware of the requirements for
    submitting data to the Transformed Medicaid Statistical
    Information System, which is the T-MSIS, and establishment of a
    Medicaid Fraud Control Unit. We are fully committed to do so
    and have demonstrated our commitment and progress in our
    written testimony.
        In closing, the U.S. citizen Medicaid beneficiaries in the
    CNMI are clearly on the verge of a humanitarian and financial
    crisis if Congress doesn't act swiftly to increase their
    Medicaid funding for the next year and beyond. The CNMI is in
    desperate and dire situation and huddling on the edge. We are
    humbly pleading Congress to eliminate the section 1108 caps and
    provide us equal treatment with all States and that Congress
    apply the FMAP percentage using the same method for the States.
    Thank you one more time for the time in hearing our issues.
        [The prepared statement of Ms. Sablan follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo. Thank you. The gentlewoman's time is expired. I
    now would recognize--the Chair recognizes herself for 5 minutes
    of questions.
        First of all, to the full panel: I think I know the answer
    to this, but just in case there is someone that doesn't agree,
    do each of you support having the territories' Medicaid
    programs treated the same as the States', including lifting the
    cap on Federal funding and increasing the Federal match--excuse
    me, anyone disagree?
        Ms. Rhymer-Browne. No, we do not disagree.
        Ms. Eshoo. No, so you all agree. All right.
        Ms. Rhymer-Browne. We all agree.
        Ms. Eshoo. All the women agree. That is terrific.
        Ms. Young. Except maybe for me.
        Ms. Eshoo. All right, Ms. Young.
        Ms. Young. It is not that--I don't disagree, I just want
    to, and I think I stated this in my written testimony, that
    there is a caveat about treating American Samoa, in particular,
    like a State because of our 1902(j) waiver, so it really
    depends.
        We are not averse to further accountability in program
    integrity issues, but sometimes there are things that don't
    make sense with Federal laws to apply to us. For example, a few
    years ago we explored the possibility of acquiring an MMIS
    system just to do data gathering as required by CMS. But when
    we looked into it, it would have cost us over $20 million to
    implement an MMIS system. And when you only have $11 million in
    Medicaid funding block grant, that doesn't make sense.
        So it is not that I am disagreeing, but I am asking the
    committee that the question of whether we want to be treated
    like a State, I am wary of that. And I am very happy to work
    with the committee to define what does that actually mean by if
    we were going to be treated like States. Thank you.
        Ms. Eshoo. Thank you. I think each one of you, or the
    majority of you, made reference in your testimony to the cost
    of prescription drugs and air ambulance services. Can you
    enlarge on that, what percentage of your overall costs that
    these represent?
        Yes, Ms. Avila?
        Ms. Avila. Yes, Angela Avila from Puerto Rico. The cost on
    pharmacy in Puerto Rico is like this 30 percent of the total
    expenditure. Our total expenditure is around 2.9 billion,
    actually, so it is a major part of our expenditures right now.
        Ms. Eshoo. What about air ambulance services?
        Ms. Avila. Air ambulances as well, but we don't need to
    move our beneficiaries from the islands, so our----
        Ms. Eshoo. I see.
        Ms. Avila [continuing]. Like ordinary other costs are
    compared to the States.
        Ms. Eshoo. Ms. Young?
        Ms. Young. We just recently started implementing off-island
    referral 2 years ago, so--and with the availability of the ACA
    money we haven't really seen the real impact on that. But we
    are looking at maybe spending about $300,000 on air ambulance.
        Ms. Eshoo. What about the drugs, prescription drugs?
        Ms. Young. The prescription drugs are covered through our
    one hospital. We do have issues on that. There is just not
    enough money to cover prescription drugs across the board.
        Ms. Eshoo. Ms. Arcangel?
        Ms. Arcangel. With regards to air ambulance, we utilize air
    ambulance roughly two to three a year. It costs us $160,000 to
    send--from L.A. to Guam and Guam to L.A., because the airlines
    in Guam do not, especially for stretcher cases, they don't take
    patients for stretcher cases.
        Ms. Eshoo. And what about prescription drugs?
        Ms. Arcangel. For prescription drugs, that is second to the
    highest of our expenditures. First is the inpatient and then
    the pharmacy services.
        Ms. Rhymer-Browne. For the U.S. Virgin Islands, pharmacy
    costs are extremely expensive for us, and I would daresay about
    20 percent of our costs. I just approved a payment of $5
    million just last week for just the pharmacy for a couple
    months. Additionally, the airlifts for our territory in the
    Virgin Islands have increased because of the damages to both of
    our hospitals. So we have to send the traumatic cases, the
    serious complex cancer cases to the mainland.
        Ms. Eshoo. Ms. Sablan?
        Ms. Sablan. For CNMI, we spend about 25 percent on our
    prescription drugs. For air ambulance that is being done we
    use--actually, we don't have that available on the islands, so
    we have to use either out of Guam or out of the Philippines,
    and that is costing us a lot of money. I would say about 300-
    some thousand.
        Ms. Eshoo. Thank you very much. I believe my time is
    expired, so I will recognize the ranking member of the
    subcommittee, Dr. Burgess, for his 5 minutes of questions.
        Mr. Burgess. Yes. And before I am recognized for question
    time, I have a unanimous consent request that the committee
    accept the testimony of Congresswoman Jenniffer Gonzalez-Colon
    as for her opening statement as part of the record.
        Ms. Eshoo. So ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Burgess. So I have a number of questions, and some of
    them are complex, so I will submit those in writing so we can
    get to the majority of the ones that answering in person I
    think would be advantageous. I don't need for you all to go
    through a bunch of numbers. We can do that on paper, and that
    will be a better way to approach that.
        But, Ms. Avila, in Puerto Rico--and I did travel to Puerto
    Rico with Representative Gonzalez-Colon a couple of times, once
    about a week and a half after the storm and it was pretty
    rough, and then with the subcommittee, with then-Chairman
    Walden.
        But one of the things that just was very--I am a physician
    by background. One of the things that was striking to me was,
    you know, the docs at the hospital, OK, they are there. They
    have got maybe the lights back on, the run of the generators
    full-time. It is dicey, but things are manageable. But then
    when they go home, their houses are dark and not air-
    conditioned. Their families have been in that environment all
    day.
        So you can just imagine the pressure on the doctors, say:
    ``Hey, those nice people from the University of Miami called me
    again today, and they want you to come interview for a nice job
    there.'' So that is hard when you are--yes, I get the
    commitment to their patients in the hospital, but then you go
    home and you are faced with a family that is saying, ``I don't
    know why we can't do what they are asking.''
        So how has it been over the past couple of years keeping
    your doctors in Puerto Rico?
        Ms. Avila. Thank you for the question. Angela Avila. It has
    been a real challenge just to keep our doctors in the island.
    Since 2014, we have been seeing like the exit of our healthcare
    professional because of their frustration and their economic
    circumstances, they need to go and face attending our
    beneficiaries, and that is why we are looking for to be like a
    full Medicaid program and be able to provide home care
    services.
        Right now we have identified that home care services are
    part of the new way of doing medicine in the States and in the
    territories. It is the right way to do it, and at the long run
    we will see the savings because we will save inpatient and
    admissions, they are so expensive if we have all that support,
    the other programs.
        So yes, it is a challenge for our doctors. The ones that
    have been--that stay in the island is because they love to be
    there, it is not because of economic reasons. And what we are
    looking is just for the basic baseline compared to a lower
    rate, reimbursement rate than in the States, but reasonable for
    our doctors to be able to serve the population.
        Mr. Burgess. So did the hundred percent FMAP, did that
    help?
        Ms. Avila. Oh, it will be a golden opportunity for our
    island to work with the healthcare system there.
        Mr. Burgess. So, Ms. Arcangel, let me ask you this. Are you
    also suffering from not being able to keep doctors on the
    island? Do they leave you after a period of time, or are they
    likely to stay?
        Ms. Arcangel. No. Yes, they do leave after a few months or
    a year. They do leave because of the nonpayment and low
    reimbursement as well as the low rate of salaries of the
    physicians.
        Mr. Burgess. Is there anything other--the funding questions
    aside, are there any other aspects that you can think of that
    would help when it comes to getting doctors to come to the
    island?
        Ms. Arcangel. We should provide more incentives by
    increasing the rate of their salaries, especially for our
    federally qualified health centers. They come and go. They
    don't stay in Guam.
        Mr. Burgess. So let me ask you a question about that,
    because you mentioned liability insurance in your testimony.
        Ms. Arcangel. Yes.
        Mr. Burgess. I think you were the only one that did. You
    got my attention because liability reform is something we have
    done in Texas and has been extremely helpful. Now the federally
    qualified health centers, those doctors are covered under the
    Federal Tort Claims Act. Is that not correct?
        Ms. Arcangel. Yes, but.
        Mr. Burgess. So is that helpful in keeping doctors in Guam?
        Ms. Arcangel. True, but then again the rate of, you know,
    the physician salary is very low. That is why they don't stay
    much in Guam.
        Mr. Burgess. Have you looked at any of the--some of the
    States have done liability reform, California and Texas two of
    the most notable. Have you looked at that as far as the
    activities in Guam as well? I will tell you from the standpoint
    of a physician practicing in Texas, it has been an attractant.
    I mean, it is easier to get a doctor to come to New Jersey
    because of what our liability rates are in Texas. I am not
    saying we are stealing doctors from New Jersey, but we could.
        Ms. Arcangel. Oh. That is a good idea. We will try to look
    at that. Yes.
        Mr. Burgess. I will be glad to follow up with you on that.
        Ms. Arcangel. Thank you.
        Ms. Eshoo. The gentleman's time is expired and he yields
    back. I now would like to recognize the chairman of the full
    committee, Mr. Pallone, for his 5 minutes of questions.
        Mr. Pallone. Thank you, Madam Chair. I thought I was going
    to get a New Jersey joke there for a while. I didn't know what
    Dr. Burgess was up to. Anyway, my questions are of Ms. King
    Young, and I want to thank you for being here.
        We have heard a lot today about the consequences the fiscal
    cliff faces, you know, provides to the territories, and I am
    especially concerned about the effects going over the cliff
    would have on people in the territories. And it sounds like you
    all would have to make some terrible choices to cut back on
    coverage, benefits, provider pay. It is also clear that none of
    you here today wants to implement these cuts, but you will have
    no choice if we don't provide you with additional Federal
    funds.
        And it seems to me that what is at the core of the problem
    that you all described is the completely outdated way the
    Federal Government funds the territories' Medicaid programs. In
    a State Medicaid program, the Federal Government matches State
    spending. If the State spends a dollar on Medicaid, the Federal
    Government spends at least a dollar and oftentimes spends a lot
    more. In other words, there is no limit on how much Federal
    funds a State gets.
        But it sounds like that is not the deal you all get, so you
    are all getting far less Medicaid funds than the States, and
    you are putting up way more of your own money. So let me try to
    get through this, Ms. King Young. Under the current capped
    allotment approach, your territory only receives a set amount
    of Federal funding for Medicaid. But what happens if your
    Federal funding isn't enough to cover your Medicaid expenses?
        Ms. Young. Thank you, Chairman Pallone. If we received
    enough Federal funding for our Medicaid program, it really
    would allow us to cover all or most of the comprehensive
    services that are required under the Social Security Act. For
    example----
        Mr. Pallone. But when you don't get the Federal funding, if
    it isn't enough, then what happens? How do you deal with the
    Medicaid expenses if----
        Ms. Young. The first thing we will do is we will suspend
    all of the new services that we recently added and was approved
    by CMS 2 years ago. It took us a while to implement those
    because they had never been done before. Prior to 2017, we only
    had one Medicaid provider, and that was our hospital.
        So all of the new services, medically necessary care that
    is referred off island to New Zealand will be suspended. We
    will stop all reimbursements to our federally qualified health
    centers, the five community clinics, and we will stop all
    payments to our providers that provide durable medical
    equipment, prosthetics, and orthotics. And we will also stop
    payments for the Medicaid dual-eligible population, the copay
    assistance that we offer them to pay the 20 percent.
        Mr. Pallone. All right, so looking back at your Medicaid
    spending in 2018, I see that your Federal spending was much
    more than the 1108 funds or the block grant you received. So
    where did the additional Federal funds come from beyond the
    block grant?
        Ms. Young. The additional funds came from the Affordable
    Care Act Medicaid----
        Mr. Pallone. Oh, all right.
        Ms. Young [continuing]. Funding that was made available in
    2011.
        Mr. Pallone. But now that expires. That additional funds
    from the ACA, those expire at the end of this year, some in
    September, the rest in December. Is that correct?
        Ms. Young. Yes. That is correct.
        Mr. Pallone. And then you are going to have a significant
    funding shortfall. Is that correct?
        Ms. Young. Yes.
        Mr. Pallone. OK. So I understand that the size of that 1108
    cap increases annually at the rate of inflation for medical
    services. Have those annual increases been sufficient to keep
    pace with the cost of providing care in the territories, and
    does that cap increase if Medicaid enrollment increases?
        Ms. Young. So, two ways. It is never enough. Our increase
    per year is about 2 percent a year, and there is a shortfall of
    about 6 million a year for the hospital alone.
        Mr. Pallone. But does the cap increase if Medicaid
    enrollment increases?
        Ms. Young. So the second answer to that is we do not do
    individual enrollment in American Samoa. We have a presumptive
    eligibility program where most of our people are presumed
    covered under Medicaid, which is about 36,000 people that we
    cover, so it doesn't affect the money that we get because we
    don't do individual enrollment.
        Mr. Pallone. So the cap doesn't increase if enrollment
    increases under that scenario, right?
        Ms. Young. No.
        Mr. Pallone. No.
        Ms. Young. It is simply a block grant.
        Mr. Pallone. All right, then let me ask you one more
    question. It sounds like you have to spend a lot more of your
    local funds on Medicaid than you would if you were a State.
    That means those local funds can't be used for other critical
    investments or services. So if you received the same Federal
    Medicaid funding as a State, it seems you would free up more of
    your territory's funds for investments and things like
    infrastructure and education. Is that correct?
        Ms. Young. Yes, but it is a very small, nominal amount. The
    hospital continues to get the subsidy that it needs to operate,
    but the only money that we receive for local match for the new
    services is $2 million.
        Mr. Pallone. But if you received the same Federal Medicaid
    funding as a State, it would free up more of your territory's
    funds for other things, correct?
        Ms. Young. Not really, because we would still have to come
    up with a local match.
        Mr. Pallone. I see.
        Ms. Young. So if the match doesn't change, then it doesn't
    help us.
        Mr. Pallone. Then it doesn't help you. All right. I just
    wanted to say, I mean I think it is clear that the simple fact
    is that the capped allotments that the territories receive from
    the Federal Government for Medicaid are just not enough to meet
    the needs of the people who live there. That is obvious, so
    that is why we have to act. Thank you.
        Ms. Young. Thank you.
        Ms. Eshoo. The gentleman yields back. And now I would like
    to recognize the gentleman from Oregon, ranking member of the
    full committee, Mr. Walden, for his 5 minutes of questions.
        Mr. Walden. Thank you, Madam Chair.
        Dr. Schwartz and Ms. Avila, according to MACPAC, in 2017
    the Medicaid program spent an average of $7,654 per year per
    enrollee, but only 1,866 per year per territorial enrollee, and
    only 1,844 per year per Puerto Rico enrollee. My colleague from
    Puerto Rico had this question she wanted me to ask. So how does
    this difference in Federal Medicaid spending affect the
    provision of healthcare to low-income individuals, and how does
    it affect the overall healthcare system in the non-Medicaid
    population in your territory?
        So, Dr. Schwartz, you might just want to tackle this from
    the MACPAC side and make sure our numbers are right, and Ms.
    Avila in terms of its implication. I have two other questions.
        Dr. Schwartz. I will just say that, in MACPAC's June
    report, we have an extensive chapter on the situation in Puerto
    Rico and for which we are grateful for getting a lot of data
    from the government of Puerto Rico and assess to help us do
    these analyses. And when we looked at spending per enrollee in
    Puerto Rico compared to the States and we adjusted for the
    enrollment mix and we also took out spending on the State side
    for long-term services and supports, Puerto Rico spending is
    below any of the other States, so it is substantially lower.
        So I will let----
        Mr. Walden. All right, Ms. Avila?
        Ms. Avila. It is like 36 percent lower than in the other
    States of the Nation.
        Mr. Walden. All right, that is helpful. And over the last
    several years that Congress, led by this committee, has
    provided billions of dollars in additional funding to help the
    territories keep your Medicaid programs afloat, these funds
    have gone well beyond the original caps set forth in section
    1108 allotments. And one of the ways we have done that is by
    temporarily increasing the territories' FMAP to increase the
    Federal Government's share of spending, as you all know.
        Now, I know that is something we are discussing here today.
    A problem with that as I see it, though, is that even if we
    increase the FMAP for your territories, the cap remains. So my
    question to each of you is, what would happen if we just
    increased the FMAP for each of your territories without
    touching the cap? And along with that, for each of your
    territories--because, again, there are unique challenges and
    circumstances that you have each addressed--which is a bigger
    hindrance to adequately funding your program: the cap or the
    FMAP? If we could just kind of go down the list there.
        Ms. Avila. I am sorry. Angela Avila from Puerto Rico.
        Mr. Walden. Yes.
        Ms. Avila. In the case of Puerto Rico, our actual cap
    according to the section 1108 is $380 million, approximately,
    so our actual expenditure is $2.9 billion. It is no way that we
    can cover such a high difference between what is the cap amount
    and what is it for expenditure. So increasing the FMAP will not
    resolve the problem if we don't increase the cap.
        Mr. Walden. Got it.
        Ms. Young?
        Ms. Young. I echo Ms. Avila's, and I think I also stated
    that in my statement. We cannot fix the FMAP and not also fix
    the cap, because what will happen is, if you only fix the FMAP,
    all that means is we will spend our Federal dollars faster and
    we will exhaust them----
        Mr. Walden. Got it.
        Ms. Young [continuing]. In the first quarter of the fiscal
    year.
        Mr. Walden. That would be a problem.
        Ms. Young. So it doesn't help.
        Mr. Walden. Yes, all right.
        Ms. Arcangel?
        Ms. Arcangel. For Guam, our total allotment is only 18.38
    million. That includes administration for fiscal year 2020.
    That will not last for first quarter for adults. So, if there
    is no increase on the cap, then that means we have to terminate
    some of our eligibles, adult eligibles. More than 50 percent of
    them will not have any coverage at all.
        Mr. Walden. Wow.
        All right, next?
        Ms. Rhymer-Browne. Yes, we need both. We need the FMAP
    increased and we need the cap, because if we don't have higher
    monies, just in fiscal year 2020 projected we are supposed to
    get 18.8 million that will not even last for the quarter. We
    are already projecting we would have to cut 15 of the 28,787
    people, so 15,000 of those would have to be cut if we were just
    to be given a hundred percent FMAP or raised FMAP with no
    increase on the cap.
        Mr. Walden. All right.
        Ms. Sablan. In the CNMI we are actually spending, based on
    the FY 2018, we spent 53 million, and we were advised that we
    are only going to get 18 million. That includes the 1108
    funding plus a CHIP. So in our case, we want the cap. Our
    preference is the cap.
        Mr. Walden. To raise the cap.
        Ms. Sablan. Yes. Raise the cap.
        Mr. Walden. All right. Thank you all for your testimony. It
    has been most helpful. Some of us are going back and forth
    between two subcommittee meetings simultaneously, but we do
    appreciate your input and counsel as we work together to solve
    this problem.
        So, Madam Chair, thank you for the hearing and I yield
    back.
        Ms. Eshoo. The gentleman yields back. I now have the
    pleasure of recognizing the gentleman from North Carolina, Mr.
    Butterfield, for his 5 minutes of questioning.
        Mr. Butterfield. Thank you very much, Madam Chair. And
    thank you to the six witnesses for your testimony today. I have
    heard some of it, and my staff has been here for the entire
    time, and they will tell me the details that I may have missed.
    But thank you so very much for your testimony.
        You know, I am a great friend of the territories. I have
    been for many, many years. It has always perplexed me that we
    have treated the residents and the citizens of the territories
    different from those on the mainland. That has always perplexed
    me. I have never been given a satisfactory explanation about
    why that has happened. The Delegates from the territories are
    great friends of mine, particularly Ms. Plaskett and Delegate
    Sablan and Delegate San Nicolas from Guam. The five Delegates
    have just advocated tirelessly and fiercely over the years for
    equal treatment for your people.
        Dr. Schwartz, can you help me in just a few words
    understand why the citizens of the territories are treated
    differently?
        Dr. Schwartz. The treatment of the territories in the
    Medicaid program really dates back to the beginning of the
    program. I was alive in 1965, but I obviously wasn't----
        Mr. Butterfield. I finished high school that year. It was a
    good year.
        Dr. Schwartz [continuing]. At that time. But I think it is
    a historical artifact of a very complex piece of legislation
    that has not been updated.
        Mr. Butterfield. To the gentlelady from the Virgin Islands,
    thank you for your testimony. I have family and friends in your
    homeland, and we will talk about that later. But I understand
    that the U.S. Virgin Islands will lose access to Federal
    funding provided under the ACA at the end of the year.
        Ms. Rhymer-Browne. Yes.
        Mr. Butterfield. You testified to that. You stated in your
    testimony that the Virgin Islands will receive only $18 million
    in Federal funding once the funding expires. I understand that
    this is only 25 percent of the Federal funding that the
    territory needs. Is that correct or incorrect?
        Ms. Rhymer-Browne. Well, we are actually over, we have
    spent over a hundred million in per annum with the--the 18.8
    would really not be sufficient. Additionally, we would be very,
    very much curtailed in our program accountability and integrity
    programs, where we are building systems and programs that build
    accountability. We do have the first-ever territory MMIS claims
    system. We just completed our eligibility system with our
    funding and our increased funding. So we would need even more
    monies to really meet the needs. When we----
        Mr. Butterfield. You don't have it in reserve? You don't
    have a couple billion dollars in reserve that you could draw
    from?
        Ms. Rhymer-Browne. Unfortunately, we don't. Even before the
    storms we were in dire straits, but now are even more so. Our
    schools are still devastated. Our hospitals are devastated. Our
    clinics are devastated. Our roads are still in need of repair.
    And so the basic infrastructure improvements that need to be
    made, really, may have to be curtailed if we have to then put
    more local monies to save the lives of our citizens.
        Mr. Butterfield. That is what I needed in the record. How
    many beneficiaries could lose access to coverage once these
    funds expire? Can you quantify the number?
        Ms. Rhymer-Browne. Yes, about 15,000 or a little bit more.
    Our numbers have even increased. We have 28,000 members, so
    approximately 15,000 of them would have to lose coverage.
        Mr. Butterfield. And these are American citizens?
        Ms. Rhymer-Browne. Yes, they are.
        Mr. Butterfield. Can you discuss the impact on providers
    and hospital systems very quickly?
        Ms. Rhymer-Browne. Well, the providers, if we were not able
    to provide the Medicaid funding for the care that they are
    providing, we may then have more of the exodus of our
    providers. Right now we are facing just a dearth of the
    specialty doctors for orthopedics, for cancer. Our cancer
    center was decimated during the storm, so our providers are
    desperately in need. Right now, we are reimbursing them at a
    hundred percent of the Medicare rate, and many of them for the
    specialties really need more monies.
        Mr. Butterfield. Ms. Young in her testimony said they would
    just have to cut off payments. That they just couldn't afford
    it, they would have to stop reimbursing. Yes.
        Ms. Rhymer-Browne. Well, in the case if we were to face
    this kind of cuts that we are looking at in fiscal year 2020,
    we would have similar hard decisions to make.
        Mr. Butterfield. Thank you. I yield back.
        Ms. Eshoo. The gentleman yields back. I now would like to
    recognize the gentleman from Kentucky, Mr. Guthrie, for his 5
    minutes of questions.
        Mr. Guthrie. Thank you, Madam Chair. And thank you for the
    opportunity to be here and all the witnesses here.
        I will tell you, before the storms in the Caribbean a
    couple years ago, we were--Dr. Burgess and I and all the both
    sides of the aisle have been talking about the territories and
    how we have to work with the Medicaid program. And I know that
    for the last couple of years in some of the areas, because of
    the devastation it has been hundred percent FMAP and other
    adjustments. What we need to look at as we are looking at it
    today, and I think it is--glad you are having this, Madam
    Chair--is how to make this program fair to territories and
    sustainable in the proper moving forward.
        And just for an example, I was talking with my friend Ms.
    Gonzalez and Ms. Radewagen, before--Ms. Plaskett, all of the
    different members--and in how do you get to be fair? I know in
    Puerto Rico if the fiscal year 2020 law in is in effect, 370
    million will be the cap at--375 million in Puerto Rico, and
    that is $285 per enrollee as compared to 7,600 in Mississippi
    or 7,900 in South Dakota.
        So those are some of the things that we are looking at to
    how we move forward. And as I was talking to Ms. Gonzalez
    earlier, I know there are sets of mandatory benefits and then
    sets of optional benefits that can move forward. And I guess my
    question, if Congress was to raise the FMAP or lower the cap--
    or raise the cap, I guess would be the right word, remove the
    cap--what would be your priorities?
        I don't know if, Ms. Schwartz, this is--Dr. Schwartz--to
    you, but to the others, what would be your priorities to spend?
    Do you fund the mandatory benefits and what would be--where
    would you spend the money? And we will just kind of go down the
    aisle kind of quickly because I want to ask another question.
        Ms. Avila. Angela Avila from Puerto Rico. Our first
    priority will be increasing the reimbursement rates for our
    doctors. The specialists and healthcare providers and our
    hospitals are in jeopardy.
        Mr. Guthrie. OK, thank you.
        Ms. Young. Our priority would be to continue the new
    services that we just implemented in the last 2 years.
        Mr. Guthrie. OK, thank you.
        Ms. Arcangel. Our priority will be to add additional
    services, like for nursing services, because we have cap on
    nursing services and we need a lot of those.
        Mr. Guthrie. OK, thank you.
        Ms. Rhymer-Browne. Yes, our priority would be to continue
    serving the current clients and also go after the 10 to 15
    thousand who are currently uncovered but are eligible for
    Medicaid.
        Ms. Sablan. For CNMI, our priority is to cover the
    mandatory services plus some of the optional services like
    medications.
        Mr. Guthrie. OK, thank you. Yep. That sounds like good
    priorities to move forward on.
        The second, during the Bipartisan Budget Act of 2018, I
    know Puerto Rico and the Virgin Islands, because of the
    reactions and the relief, were required to have additional
    reporting methods move forward. I know that you did those on
    time, so we appreciate that. But--so what is the current
    status?
        And then the question for the rest of you would be, what
    program integrity measures--let me do the Puerto Rico and
    Virgin Islands and then go back. What program integrity
    measures would you be willing to put in place should Congress
    increase funding? So current status and what would you like to
    see in the----
        Ms. Avila. Yes. Our status right now, Puerto Rico already
    implemented the first phase for the MMIS Puerto Rico. And
    according to the BBA, $1.2 billion were tied to the compliance
    with the T-MSIS responsibility for CMS, which we did, and we
    have the certification from CMS. And also, to establish the
    Medicaid Fraud Control Unit, and it is already in place in the
    Justice Department and working. So we complied with the two
    requirements tied to the BBA.
        So next, what will be the improvements on those platforms
    and controls, we are just working right now with the second
    module, eligibility and enrollment for the MMIS infrastructure
    in Puerto Rico. Also, we have been perfecting our contacts with
    our managed care organizations starting with 92 MLR required
    through the contracts----
        Mr. Guthrie. I just have a few seconds left.
        Ms. Avila. Oh.
        Mr. Guthrie. So I guess Ms. Rhymer-Browne. I am sorry if I
    said that incorrectly.
        Ms. Rhymer-Browne. Yes. We did implement the first-ever
    Territory Medicaid Management Information System. That system
    has been operating since 2013, and I really believe that we are
    doing well with that. We also implemented a Medicaid MAGI-
    compliant online Medicaid eligibility system in July 2017, and
    that is going well. We also already implemented a Medicaid
    Fraud Control Unit that is operating under the office of our
    Attorney General, and we are getting high marks with our T-MSIS
    efforts for integrity.
        We have finished our phase 1. We entered our phase 2, and
    we were told that all of the top 23 issues for the T-MSIS 2 has
    been completed.
        Mr. Guthrie. Thank you. And my time has expired, and I
    yield back. I appreciated your answers.
        Ms. Eshoo. The gentleman yields back. Pleasure to recognize
    the gentlewoman from Florida, Ms. Castor, for her 5 minutes of
    questions.
        Ms. Castor. Thank you, Chair Eshoo. And I want to thank all
    of the witnesses for being with us today and speaking up for
    the folks back home.
        I think it is patently unfair that we treat American
    citizens who live in Puerto Rico and the other territories
    differently when it comes to the healthcare they receive under
    Medicaid. Chairman Pallone said it is outdated. Dr. Schwartz,
    you said this has been a chronic underfunding problem for many
    years. I am heartened by the fact that Representative Soto,
    Representative Velazquez, and other Members now have come up
    with legislation that looks like it can help address this large
    inequity. There is nothing like having the devastation of a
    major hurricane like Hurricane Maria to shine the light on this
    inequity, so hopefully we can move to a better place so that
    all American citizens, no matter where they live, are treated
    equally.
        Ms. Avila, you explained to another congressional committee
    recently that this fiscal cliff that Puerto Rico is facing
    would be devastating for folks who rely on Medicaid for their
    healthcare. I understand that, if you do not receive additional
    Federal support, it is possible that over 125,000 American
    citizens in Puerto Rico would lose their access to the doctor's
    office and health services under Medicaid. That is a staggering
    number of people. And Ms. Rhymer-Browne just added to that
    total, and there are others.
        And then this--Medicaid is so important because, if you
    lost that many, if you faced this fiscal cliff, it would simply
    fray the provider network on hospitals, doctors, and nurses and
    lead to a major collapse. Could you explain why Puerto Rico
    would have to cut so many people from health services under
    Medicaid if this fiscal cliff comes to be?
        Ms. Avila. Thank you. It will be because, as I mentioned,
    our 1108 section only provide us with a cap amount of $389
    million. Our actual cost in the program is $2.9 billion. We
    have been able to continue as of today because of the segments
    of additional funding as ACA that is going to be ending on
    December this year, so we will be left with only the section
    1108, $380 million with an FMAP of 55 percent.
         So we are going to have like in aggregate $1.3 billion
    because Puerto Rico have already identify almost a billion
    dollars from our local funds to do the matching. So with $1.3
    billion, we only can afford just the baseline that we have in
    services, and we will not be able even to cover dental and
    pharmacy. And the population that we paid 100 percent with our
    local funds are the 125,000.
        But more than that, we will lose 500,000 Medicaid
    recipients right now because we will not have enough funds to
    cover for them.
        Ms. Castor. And who are we talking about? Explain, because
    Medicaid usually serves our working-class neighbors that don't
    have access to any other health insurance. Who are these folks?
        Ms. Avila. We are talking about our more vulnerable
    citizens in the island. We are talking about people that
    doesn't earn more than $400 per month, and that means that they
    cannot earn more than $11,000 a year, in comparison with the
    States that people earning like more than $30,000 a year to be
    able to participate of the Medicaid program. So that is the
    huge disparity that we have right now.
        Ms. Castor. So I have heard some people argue that, well,
    can't you just reduce provider rates or make Medicaid more
    efficient in Puerto Rico. What do you say to that?
        Ms. Avila. In terms of providers' rates, as I mentioned, it
    will be our priority if we have additional funding, because if
    we can't pay our physician visit in an ambulatory settlement
    that it runs like in Puerto Rico like no more than $20 per
    visit. Here in the States it is more than $100, and that is why
    our physicians are no longer able to keep providing services.
    That they are really financing them in some situations.
        So even if we have the cap amount, if we don't have doctors
    who can serve our population we will not be--by our program in
    Puerto Rico. So that will be the main cost, I will say, of this
    cliff.
        Ms. Castor. Thank you very much. I yield back.
        Ms. Eshoo. The gentlewoman yields back. I now recognize the
    gentleman from Florida, Mr. Bilirakis, for his 5 minutes of
    questions.
        Mr. Bilirakis. Thank you, Madam Chair. I appreciate it.
    Thank you for holding this hearing as well.
        Ms. Avila, I have a non-Medicaid question for you, but one
    that I think is important to the overall conversation. On May
    13th, Governor Rossello sent a letter to this committee
    highlighting additional challenges Puerto Rico faces in the
    Medicare Advantage Program. As I understand it, enrollment in
    Medicare Advantage in Puerto Rico exceeds 70 percent compared
    to the national average of 30 percent, so it is clearly an
    important part of the island's healthcare system.
        But the high enrollment also creates--and it was mentioned
    just now--but the high enrollment also creates States setting
    challenges for CMS that contribute to payment rates that are 40
    percent below the national average. Can you discuss the role of
    Medicare Advantage in Puerto Rico, and is this another area the
    committee should consider as part of creating long-term
    stability in Puerto Rico's healthcare system?
        Ms. Avila. Definitely, and thank you for the question.
    Angela Avila from Puerto Rico. Definitely, the Medicare
    Advantage line of business is crucial in Puerto Rico as well as
    the Medicaid program and the private sector. But in terms of
    Medicaid and Medicare, we have a huge penetration in the market
    because in Puerto Rico we have a high population of elderly
    that are the ones who participate from the Medicare Advantage
    programs.
        And I don't know if it is just because it is an island
    people stay there and that is why they tend to select the
    Medicare Advantage program, and they are underfunding as well
    when we compare their baseline against the ones that are in the
    States. So yes, it is still a difference in the Medicare
    Advantage area as well. And this has been aggravated because of
    the people losing their jobs and the economic situation of
    Puerto Rico. The high concentration of beneficiaries are under
    those two programs, Medicare and Medicaid. And that is why the
    importance in our economy for both lines of businesses.
        Mr. Bilirakis. OK, thank you. And this is panelwide. So, as
    my colleague Ranking Member Burgess mentioned in his opening
    remarks, often when discussing these issues, we tend to lump
    each program and the U.S. territories together as one instead
    of treating them as individual entities within individual
    challenges. Would you each briefly share your individual
    challenges and needs?
        I know you don't have a lot of time for that, but let's
    start over here, Doctor, if that is OK.
        Dr. Schwartz. Well, I think I will just pass the mic in the
    interest of time and allow them to----
        Mr. Bilirakis. OK. OK, maybe mention one challenge each or
    what have you, your top priority, your top challenge we might
    be able to address.
        Ms. Avila. For Puerto Rico, the biggest challenge is to
    keep our doctors and healthcare providers in the island,
    because if we don't have our professionals serving the
    population we don't have--you know, money would not be the
    reason. It would be they have the ability of the healthcare
    professionals.
        Mr. Bilirakis. Very good.
        What is your greatest need, Ms. Young?
        Ms. Young. Our greatest need is we just need more money. If
    we had more money we would be able to do more things and
    provide services like long-term support services, things that
    we can't do right now. So I think it just goes back to, we
    would like to increase our block grant and change the FMAP.
    That would allow us to----
        Mr. Bilirakis. So you have adequate enough providers?
        Ms. Young. No, we don't have enough providers. We have one
    hospital. We have two providers in New Zealand and we have one
    DME, durable medical equipment provider. But with more money we
    would be able to work on increasing providers and services as
    well.
        Mr. Bilirakis. OK, very good. Thank you.
        Ms. Arcangel. Our biggest challenge is the providers, also,
    and at the same time the uninsured population in Guam because
    our income guideline is very low. It doesn't increase. It is
    based on 2016, which is 30 to 31 percent below the Federal
    poverty level of 2016.
        Mr. Bilirakis. Thank you very much for that information.
        Ms. Rhymer-Browne. Yes, our biggest challenge would be to
    continue assisting the 28,000-plus Medicaid members. And,
    additionally, because of our aging community in the Virgin
    Islands, one of the biggest challenges is the continuum of care
    of healthcare services to include skilled nursing facilities,
    of which we do not have that program in the territory. So that
    would be a challenge that we would meet if we were able to get
    more funding.
        Mr. Bilirakis. Very good, thank you.
        Ms. Sablan. For CNMI, our challenge also is funding. We are
    spending a lot of--we spent 53 million in 2018, and if the
    service is not available on the island we have to send our
    patients off island, either to Guam, the Philippines, Hawaii,
    or the U.S. mainland. That is our biggest challenge.
        Mr. Bilirakis. All right, thank you very much. I appreciate
    it. I yield back, Madam Chair, appreciate it.
        Ms. Eshoo. The gentleman yields back. I now would like to
    recognize the--let's see, where? Ms. Kelly? Oh, I see. Robin
    Kelly, yes. Congresswoman Kelly from Illinois. I am looking on
    the wrong side of the aisle here. You are recognized for 5
    minutes--I have no question what side of the aisle you are on,
    I was just looking in the wrong way--for 5 minutes of
    questioning.
        Ms. Kelly. Thank you, Madam Chair and Ranking Member, for
    having this hearing. And I want to thank all of you for taking
    the time to come. Actually, my colleague asked some of the
    questions I wanted to ask, but I wanted to know from Ms.
    Rhymer-Browne and Ms. Sablan, you didn't talk about providers
    so much, but are you seeing physicians leave? And the reason I
    am curious about that question because when I went to the
    Virgin Islands and Puerto Rico after the hurricanes, and I know
    Congresswoman Plaskett talked a lot about you had to send
    people to Puerto Rico, but now you are saying that, you know,
    you can't really handle what you have. So that must continue to
    be a problem and just wondering about, both of you.
        Ms. Sablan. Yes, for CNMI because the salary is not that I
    guess attractive, so they won't stay for long. They will be
    there for a couple of months or even a year at the most.
        Ms. Kelly. And, Ms. Rhymer-Browne?
        Ms. Rhymer-Browne. For the U.S. Virgin Islands, when it
    comes to the providers we are really hurting for our specialty
    providers. And to attract those types of physicians to the
    territory, you will have to pay more money. So the provider
    issue is an issue for us, and of course after the storm some of
    our physicians did relocate and just leave the territory. And
    now with the damages to our infrastructure with the hospitals
    and the clinics, the providers are also being hurt there. So
    the provider issue is one for us that is a challenge.
        Ms. Kelly. And, Dr. Schwartz, if you could just snap your
    finger or wave a magic wand, what are two things that you would
    ask us to do?
        Dr. Schwartz. AS I pointed out in my testimony, the biggest
    problem is the chronic underfunding. The caps are extremely low
    and have not grown over time, and the matching rate creates
    other challenges, given the ability of the territories to raise
    the local share. Otherwise, the challenges are obviously
    different, given they are different health systems.
        Ms. Kelly. And I want to thank all of you again. And
    believe it or not, Madam Chair, I yield back.
        Ms. Eshoo. We thank the gentlewoman, and she yields back. I
    now have the pleasure of recognizing the gentlewoman from
    Indiana, Mrs. Brooks.
        Mrs. Brooks. Thank you, Madam Chairwoman. And thank you so
    much, thanks to all of you for coming and for sharing with us.
    I have a couple of different areas I would like to address.
        But, first of all, like so many of my colleagues, my
    colleagues on this side of the aisle, Representative Radewagen,
    Representative Gonzalez-Colon, have shared with us so much.
    Even though some of us have not been able to travel to the
    territories, especially after the hurricane, on a very regular
    basis they have been such incredible advocates for the
    territories and for all of the healthcare needs of the
    territories, and so just want to thank them.
        I do have a question from Congressman Gonzalez to Ms.
    Avila. If Congress does not provide for additional funding for
    Puerto Rico's Medicaid program for fiscal year 2020, how long
    will the currently assigned Federal Medicaid funding last, if
    you know?
        Ms. Avila. We have estimated that is going to be available
    up to March 2020, Federal funds.
        Mrs. Brooks. Thank you.
        Ms. Avila. Thank you.
        Mrs. Brooks. March 2020.
        Ms. Avila. March 2020.
        Mrs. Brooks. I am going to shift a moment because, as the
    chairwoman knows, we have both been very involved in the
    biodefense of our country, and very recently the Blue Ribbon
    Study Panel on Biodefense issued an October 28 report. The
    title is ``Holding the Line on Biodefense: State, Local,
    Tribal, and Territorial Reinforcements Needed,'' and I would
    ask unanimous consent to include this report for the record.
        Ms. Eshoo. So ordered.\1\
    ---------------------------------------------------------------------------
        \1\ The report has been retained in committee files and also is
    available at https://docs.house.gov/meetings/IF/IF14/20190620/109671/
    HHRG-116-IF14-20190620-SD013.pdf.
    ---------------------------------------------------------------------------
        Mrs. Brooks. Thank you so much.
        Public health systems have to be prepared for biological
    incidents whether they are naturally occurring or whether they
    are attacks on our country, on our territories. And we know
    that this panel of experts identified several areas where
    territories would benefit from increased Federal assistance in
    preparing and conducting surveillance of and recovering from
    biological incidents.
        The most recent one that I want to ask, particularly Puerto
    Rico and U.S. Virgin Islands, has to do with Zika, OK, because
    the CDC said that, according to the 2017 numbers, Puerto Rico
    had 620 cases. This was in 2017, the last numbers that I saw,
    and there could be more. U.S. Virgin Islands had 46 as
    reported, and we learned as a body just the devastating health
    consequences of the issues of Zika.
        So I would like to start out maybe with you, Ms. Rhymer-
    Browne. Can you share with us how prepared do you believe the
    territories are and what additional resources for biological
    incidents and what additional resources should the Federal
    Government bring to bear to address this?
        And then I am going to jump to you, Ms. Avila, because you
    have also experienced. Then if there is time, others.
        Ms. Rhymer-Browne. Yes. Incidents like Zika have been very
    terrifying for us. Our hospitals, who even before the
    hurricanes were not as prepared as they should be and even
    after the hurricanes we are definitely not prepared as we
    should be. We have been increasingly in the Virgin Islands
    really trying to improve our responses for all hazards of types
    of even if it is bioterrorism or anything like that.
        But right now, medically, with any kind of biological
    outbreaks we would really be hard pressed, our healthcare
    system as it stands, without the additional help. And of course
    our Medicaid members, which is 28,000-plus of our 100,000
    people, if they needed the care they--really, our healthcare
    system would not be able to sustain that.
        Mrs. Brooks. Thank you.
        Ms. Avila, since you have already had to deal with this.
        Ms. Avila. Yes, but in terms of the statistics I don't have
    the set numbers with me today.
        Mrs. Brooks. That is fine.
        Ms. Avila. I will defer to the epidemiology of Puerto Rico
    to answer. But as I know we have our labs and we have at the
    end of 2017, we were without Zika at that moment. So I would
    like to have the opportunity to give you additional information
    on that question.
        Mrs. Brooks. Is there any assistance in preparing for a
    large-scale biological event that you might need or that you
    know of?
        Ms. Avila. I will say that our needs are so many that every
    help, every additional money that we will receive, we will have
    the responsibility to improve our infrastructure for
    biosecurity, for our extraordinary emergencies that we have
    been facing. So in general terms, yes, we will need to look
    forward then and just to invest in the right matter.
        Mrs. Brooks. Thank you. I yield back.
        Ms. Eshoo. The gentlewoman yields back. I now would like to
    recognize the gentlewoman from Delaware, Ms. Blunt Rochester,
    for 5 minutes of her questions.
        Ms. Blunt Rochester. Thank you very much, Madam Chair, and
    thank you for this hearing. I want to first share with all of
    the panelists that, while you may see us coming and going,
    because there are multiple hearings happening at the same time,
    this hearing is vital. And we want you to know that we see you,
    we hear you, you are our family. There are Representatives as
    is on here on the panel, Stacey Plaskett, Mr. Sablan, people
    who advocate for you even in our caucus hearings, and so we
    want you to know that.
        In my State of Delaware, our Latin American Community
    Center, I remember when the hurricane happened and just the
    fear and the tears. And so my one message to you is that we
    have not forgotten. I want you to know we have not forgotten,
    and so I want to start with that. I want to also recognize--I
    am glad that our chairwoman talked about the strong women that
    are in front of us. You make us proud as well, so I want to
    share that with you as well.
        And I really wanted to just give you each an opportunity to
    highlight the impact. We already know that you start from a
    very tenuous place with this Medicaid cliff, but I know that
    natural disasters have an impact on top of that and sometimes,
    you know, some areas get more attention in the media than
    others.
        So if you could each just share, you know, a little bit
    about the impact above and beyond when a natural disaster hits,
    how does that impact you? And I will start with Ms. Rhymer-
    Browne.
        Ms. Rhymer-Browne. Yes. I would just like to share, after
    Hurricane Irma impacted us in the Virgin Islands and Maria soon
    after, within a matter of about 2 weeks we had to airlift or
    cruise ship out 8 to 10 thousand people out of our 100,000
    population. This separated families. Mothers left with
    children. Fathers left with children. Entire families left.
    Even our graduating classes this year were smaller because of
    the number of people who had to leave.
        So the impact is really very great when these hurricanes
    happen. And with the hurricane of the Medicaid cliff pending,
    we are really afraid of what will happen. But we will continue
    to maintain hope change will come.
        Ms. Blunt Rochester. Thank you.
        Ms. Arcangel?
        Ms. Arcangel. For several years we have not experienced any
    of those, but we are trying to be ready, looking forward to an
    assistance from the Federal people in case this happens to us.
        Ms. Blunt Rochester. Ms. Young?
        Ms. Young. Yes. We also have been fortunate that we have
    not been hit with any devastating natural disasters in recent
    years. But if that were the case, the impact would be
    devastating. We only have one hospital. We only have one
    airport. And if a hurricane hits and, you know, crashes all of
    those systems, our only recourse is the fast response from the
    Federal Government.
        And we need more Medicaid money. We would need more
    Medicaid money to do off-island emergency evacuations that we
    don't have right now.
        Ms. Blunt Rochester. Ms. Sablan, would you like to share
    anything?
        Ms. Sablan. Yes. We just got hit by Super Typhoon, and we
    only also have one hospital that really impacted as a result of
    that typhoon. And I am glad that there is a lot of help that
    came, and that really helped us with that.
        Ms. Blunt Rochester. Thank you.
        And last, but not least, Ms. Avila?
        Ms. Avila. Well, and for me it is very difficult to talk
    about our experience because it is like, it is scary. It is
    terrifying just to think about going through this next time. I
    have lived in Puerto Rico for all my life, and I have never
    seen something like we lived under the circumstances of
    Hurricane Maria. So our experiences have been learning how to
    be resilient, how to improve our infrastructure not to suffer
    something like what we live with the hurricanes.
        Ms. Blunt Rochester. Thank you.
        Ms. Avila. Thank you.
        Ms. Blunt Rochester. I wanted you all to have that
    opportunity because sometimes the media doesn't pick it up.
        And, Dr. Schwartz, thank you for initially giving us those
    two big things that we need to address as well. I yield back.
        Ms. Eshoo. The gentlewoman yields back. And I now recognize
    the gentleman from Virginia, Mr. Griffith, for 5 minutes of
    questioning.
        Mr. Griffith. Thank you very much, Madam Chair. I
    appreciate you all being here. I apologize to you all, but I
    have been in another hearing most of the morning and,
    accordingly, I am going to yield my time to Dr. Burgess.
        Mr. Burgess. And I thank the gentleman for yielding. I
    thank him for his work on this committee. It is invaluable.
        So let me come back to Guam for a moment. Madam Arcangel,
    you mentioned in your testimony that one of the biggest issues
    in Guam is the untimely or delayed payments in Medicaid. Can
    you enlighten us as to why this is happening?
        Ms. Arcangel. Well, because at the beginning of fiscal
    year, the budget appropriation to match the Medicaid current is
    not enough. So I look for money within my division to match
    that, so providers wait in the meantime. And at the same time,
    it depends on the cash flow of the government. So if there is
    available cash to match the Federal grant, then that is the
    only time we can pay the providers. So sometimes they wait 3
    months, 6 months to get paid for those. So that is the reason
    why.
        And at the same time, the reimbursement of the providers is
    really low. Even our contracts we don't file on providers, we
    have thresholds. So if we meet our thresholds and we don't pay
    them, they don't accept our patients, so the patient stays at
    the hospital. In the meantime, the cost increases, the
    expenditure increases.
        Mr. Burgess. So it is a vicious cycle.
        Ms. Arcangel. Yes, it is a vicious cycle.
        Mr. Burgess. And of course from a provider's standpoint, if
    your days in accounts receivable are much over 60 or 90 days,
    it is very, very difficult to run your practice. So I am
    sympathetic to the doctors who say, ``Look, I can't afford to
    see your patients.''
        Ms. Arcangel. Yes.
        Mr. Burgess. But that does seem like a solvable problem. On
    the issue of the cap, some of the territories expanded Medicaid
    under the ACA, and some did not. So for the three that did--
    Puerto Rico, Virgin Islands, and Guam--has that caused you to
    reach that 1108 cap faster than before the expansion occurred?
    So let's start with Puerto Rico.
        Ms. Avila. In the case of Puerto Rico, I don't think that
    will deplete our 1108 faster because we use the ACA funds
    first, and then we apply the 1108 cap amounts. So, right now,
    we have remaining balance from the ACA until December. We have
    a small remaining balance of ACA, and then we will apply the
    1108 cap amounts. So in that case----
        Mr. Burgess. So on the expansion population, in the States
    they draw down, or originally drew down, a hundred percent
    FMAP, and now it is down, I think, to 93 or 94 percent. Does
    that occur in Puerto Rico as well?
        Ms. Avila. Definitely, yes. Yes.
        Mr. Burgess. So you are actually affecting the burn rate of
    your dollars under the cap.
        Ms. Avila. So, yes. That is correct.
        Mr. Burgess. OK. Ms. Arcangel, in Guam?
        Ms. Arcangel. Yes, we finished that in the first month of
    the fiscal year. The reason being is because our IBNR are not
    paid. We paid that at the beginning of fiscal year, so we
    finish 1108 first, and then we need to draw down the request
    for additional from ACA funding, which is section 2005.
        Mr. Burgess. But does that affect your total under the cap,
    under the 1108 cap?
        Ms. Arcangel. Yes, it affects. But this, actually, the ACA
    helps us. The reason being is because the COFAs, which are
    under our locally funded program, we utilize the 1108 to pay
    for those emergency services. That is why we finish it at the
    beginning of the fiscal year.
        Mr. Burgess. OK, but it still increases your burn rate, it
    seems to me.
        Ms. Rhymer-Browne, let me ask you the same.
        Ms. Rhymer-Browne. Yes. It definitely--we are, we did
    expand our Medicaid, so 2012 we had about 12,000. Now we are at
    over 28,000. So it definitely has, we burn that up very
    quickly. And, of course, ACA has nothing to do with it, and
    then for the hundred percent, we were using that because we did
    not have to match it. Our ACA, we still have about 140 million
    sitting because we can't afford the 55/45 percent match.
        Mr. Burgess. But on that hundred percent match, was that
    still calculated under the 1108 cap?
        Ms. Rhymer-Browne. No. No, it is separate.
        Mr. Burgess. Oh, those were separate dollars you were
    drawing down. OK.
        Ms. Rhymer-Browne. Yes. Yes, separate.
        Mr. Burgess. OK. All right, I thank the gentleman for
    yielding, and I will yield back.
        Mr. Griffith. Yield back.
        Ms. Eshoo. The gentleman yields back. I recognize the
    gentleman from Maryland, Mr. Sarbanes, for 5 minutes of his
    questions.
        Mr. Sarbanes. Thank you, Madam Chair. Thank all of you for
    being here at this very important hearing, which I think for
    many of our members is very enlightening. We don't get this
    kind of testimony probably as often as we should so we can, in
    real time, understand the issues that you are facing. And you
    have presented a very united front in terms of the challenges.
    Obviously, each territory has special issues that need to be
    addressed and legacy issues and particular history. So I want
    to thank you for that testimony.
        I am very interested, and I think, Dr. Schwartz, you may be
    the best person to speak to this, sort of the origins of the
    differences in the formula, the FMAP, where the cap came from.
    Because it seems to me that, if we are going to address the
    funding issues going forward in a sustainable way, we have got
    to figure out what the arguments are for why those different
    formulas just are obsolete at this point, why they don't make
    sense.
        And I am sure some that will oppose changing them and
    making them more robust, making them more equivalent to what
    the States see, will anchor their opposition in the notion
    that, because of the special status of the territories, those
    formulas ought to stay the way they are. And there has been
    some references as to why it is outdated, why it is obsolete,
    why it came into existence at a different time that is no
    longer analogous to where we are today, but I think it is going
    to be important for us to make the case for that if we are
    going to get the formulas changed. So if you could maybe speak
    to that issue, that would be helpful to me.
        Dr. Schwartz. Sure. The caps were first added in the 1967
    Social Security amendments. Some of these programs started much
    later than that. We do know that in the Social Security Act at
    that time there were caps and special formulas for other public
    assistance programs. And while we don't know what factors
    Congress considered when setting those caps, I think it is
    fairly typical that, when new programs are introduced, they
    build on previous programs.
        I would also say that as far back as 1978, the Senate
    Finance Committee noted that the ceilings on Federal Medicaid
    expenditures have severely affected the amount of funds
    available to the territories to operate adequate Medicaid
    programs. So this is a longstanding problem. There has
    obviously been some changes over time. The ACA lifted the
    matching rate from 50 to 55 percent, the various infusions of
    Federal funds are recognition of that. But there has not been a
    significant statutory change in the Social Security Act since,
    you know, for over 40, 50 years.
         Mr. Sarbanes. Do you know whether--you just alluded to
    there being other programs different from the ones that are
    administered by the territories that were subject to different
    kinds of caps and matching formulas, and that that might have
    been a basis for putting those in place in these situations, or
    not.
        But do you know if any of those have been changed over time
    and moved up to where they are equivalent to what the State
    formulas are and what rationales might have been offered in
    those instances?
        Dr. Schwartz. I don't have that information at my
    fingertips, but we could certainly get that to you.
        Mr. Sarbanes. I think that would be very helpful, because
    we obviously have a very powerful argument based on the needs
    of the territories, and in some instances the recent challenges
    that have been faced, let's say, in the case of Puerto Rico and
    the U.S. Virgin Islands based on the disasters that have
    occurred.
        But I think if we are going to make the most robust
    argument, it has to be a combination of arguing that the needs
    are what they are and have to be met in a sustainable fashion
    and that, the whatever the rationale that previously may have
    justified the difference in the way the formulas were
    developed, that that rationale is no longer applicable.
        So getting that information, I think, would be extremely
    helpful. Thank you all for being here today. I yield back.
        Ms. Eshoo. The gentleman yields back. I now would like to
    recognize the gentlewoman from New Hampshire, Ms. Kuster, for
    her 5 minutes of questioning. And if no other Republicans come
    back, Mr. Soto will follow and then we will have, I think, have
    concluded our questions.
        So, Ms. Kuster, you are recognized.
        Ms. Kuster. Thank you, Chairwoman Eshoo, for holding this
    critical hearing today to discuss the remarkable disparities in
    our healthcare system between the territories and the States.
    If the conversation today has shown us anything, it is that
    Medicaid block granting simply does not work. Unfortunately,
    this example of poor policy is at the expense of Americans who
    live in the territories represented here.
        Though New Hampshire is a far distance, Granite Staters can
    relate all too well to many of the same issues you described
    here today. I cannot imagine how we would be able to combat the
    opioid epidemic in my State if we did not have the resources of
    the Medicaid program. Most of the people seeking treatment are
    eligible for healthcare for their substance use disorder and
    mental health issues because of the Medicaid expansion. As our
    population ages, it is Medicaid that is the safety net for our
    most vulnerable citizens.
        So I want to thank all of the witnesses for appearing
    before us today, and I share your view of the challenges facing
    your Medicaid programs.
        Ms. Avila, the Governor of Puerto Rico has submitted a
    request to Congress for 15.1, in funding, million. Is that the
    correct number?
         Ms. Avila. Yes, it is, 15.1 billion dollars for----
        Ms. Kuster. Billion.
        Ms. Avila. Billion, for 5----
        Ms. Kuster. Thank you. We try to keep track of the m's and
    the b's around here.
        Ms. Avila. Yes.
        Ms. Kuster. Fifteen point one billion.
        Ms. Avila. Billion, 5 years.
        Ms. Kuster. OK. And the Governor's request included
    specific program improvements that Puerto Rico would implement
    with this temporary funding. And I apologize if you have spoken
    to this earlier, I was in another hearing. But what are those
    improvements, and why are they necessary?
        Ms. Avila. Well, starting with the reimbursement rates for
    our doctors and healthcare professionals, our reimbursement
    rates if we compare to the ones in the States are lower than 19
    percent of what they have.
        Ms. Kuster. Nineteen percent?
        Ms. Avila. Percent of what we pay----
        Ms. Kuster. Of what physicians would receive?
        Ms. Avila. Yes, our physicians. For example, a procedure
    for, a cardiovascular procedure in the States is paid between
    1,000 to 2,000 dollars. In Puerto Rico we will pay no more than
    $300. Our doctors for a visit, they are paid like 20 to 25
    dollars, in comparison to 100, 125 dollars that is in the CMS
    fee schedules. And what we are trying to do is just to
    stabilize our system according to what is gathered in the fee
    schedules that are part of the programs in the States as
    Medicare, as Medicaid references, and that way is we will avoid
    our exodus of providers, because we are losing almost 1.5
    doctors per day right now because of the lower payments.
        Ms. Kuster. Lower reimbursement payments.
        Ms. Avila. Yes.
        Ms. Kuster. And can I just ask briefly, the rest of you, is
    the reimbursement equally low for you for physicians or--I am
    sorry. Let's just go--if you could.
        Ms. Young. For American Samoa it doesn't apply because we
    only have one hospital that utilizes a certified public
    expenditure payment method. So we simply pay based on the
    Medicare cost report that the hospital files every year, and we
    pay actual costs that it requires to operate the hospital. We
    don't have independent, private physicians that are Medicaid
    providers. The only other provider on island that we have is
    the federally qualified health center.
        Ms. Kuster. And for you?
        Ms. Arcangel. Our reimbursement rate is actually based on
    Medicare rate, but for the hospital alone the reimbursement
    rate is very low, which is 1,600 per day only. That is because
    of DEPRA. Our private hospital, it is 300 percent higher than
    our own government hospital.
        With regards to physicians, it is also based on Medicare
    rate or fee schedule. But the thing is, the cost of medical
    supplies as well as equipment is so high because of the
    shipping costs, because of there are only few vendors that ship
    those in Guam, so that there is a tendency on higher costs
    because of lack of competition.
        Ms. Kuster. My time is almost up, but----
        Ms. Rhymer-Browne. Yes, the Virgin Islands faces similar
    situations. We have 100 percent Medicare reimbursement, and so
    our providers, many of them who need, we need for specialty, do
    need to charge higher and therefore may not join to become a
    Medicaid provider.
        Ms. Kuster. Thank you. My time is up. Thank you very much.
    I yield back.
        Ms. Eshoo. The gentlewoman yields back. I now recognize the
    gentleman from Florida, Mr. Soto, for his 5 minutes of
    questioning.
        Mr. Soto. Thank you, Madam Chair. Thank you to all the
    witnesses for being here today. We know we have a financial
    crisis and a Medicaid crisis that just keeps coming around and
    coming around again. And for that on behalf of my constituents,
    you know, we apologize that you all have to go through this
    over and over again, when there should be a permanent fix. And
    this committee is intent on trying to fix that long term.
        Ms. Avila, you know, we talked a little bit about the
    Medicaid crisis in Puerto Rico, hospitals in disrepair. Nearly
    half of Puerto Rico's population is enrolled in Medicaid. Isn't
    that correct?
        Ms. Avila. Yes, it is correct.
        Mr. Soto. Yes. And we have seen the additional Federal
    funding for the Medicaid program is set to expire in September.
    Do you believe another temporary funding increase is sufficient
    to permanently address the financial challenges facing Puerto
    Rico's Medicaid problem?
        Ms. Avila. Well, anything that works for us in terms of
    additional funding, I would never say no. But short term is a
    very dangerous situation for Puerto Rico, because the short
    terms doesn't allow us to work with the Fiscal Board to work
    with investments for long-term periods that will stabilize the
    model, and we don't suffer those uncertainty periods that hurts
    a lot our economy.
        Mr. Soto. You know, Puerto Rico used to have 15,000
    doctors, and my understanding is over 6,000 have left the
    island over the past decade or so. Is that correct?
        Ms. Avila. That is correct.
        Mr. Soto. And why have they left?
        Ms. Avila. Because the reimbursement rates. They, you know,
    the difference from what they can earn here in the States, our
    doctors are prepared, are credentialized, are--I am sorry--are
    prepared according to the State standards and regulations. So
    here they can easily earn three or five times what they are
    going to be earning in Puerto Rico.
        Mr. Soto. And many are leaving to come to my home State of
    Florida.
        Ms. Avila. That is right.
        Mr. Soto. You know, we saw Puerto Rico have to go into debt
    to prop up the Medicaid program because the reimbursement rates
    were so--the matching rates were so low, and now we are stuck
    in this PROMESA Fiscal Board system. And then we saw after
    Hurricane Maria, it wasn't just the devastation of Hurricane
    Maria that led to people having a lack of access to healthcare,
    it was also the lack of funding to begin with through Medicaid.
    Would you agree with that statement?
        Ms. Avila. Of course, 100 percent. It has been a pattern
    and a trend that is supposed to be fixed way, way before.
        Mr. Soto. I am proud to have introduced, along with
    Congresswoman Velazquez and the rest of the Puerto Rican task
    force, a new Medicaid parity bill for Puerto Rico. I talked a
    little about it, $15.1 billion, 83 percent match for the FMAP.
    From 2020 to 2024, there would be four enhancement
    requirements. Hospital payments, physician payments need to be
    increased, Hep C coverage, and Part B reforms. I understand
    that at the end of the transition period, though, the bill
    would provide Puerto Rico with the same financial treatment and
    FMAP as a State program.
        Is Puerto Rico willing to cover all the mandatory Medicaid
    benefits if it means you would receive State-like funding and
    FMAP?
        Ms. Avila. The answer is absolutely yes.
        Mr. Soto. And can you discuss the benefits of providing
    Puerto Rico with sustainable funding? How would that financial
    certainty impact Puerto Rico's long-term financial problem?
        Ms. Avila. Well, first of all, we will be able to keep our
    doctors and healthcare professionals. And our hospitals need to
    be improving their infrastructure in their payment. We pay
    right now $700 per diem in comparison to thousands of dollars
    that has been paid in the States. So work with our hospital is
    an urgent matter as well of improving the poverty level, the
    income poverty level for Puerto Rico for to make justice to the
    more vulnerable ones in the island.
        Mr. Soto. Thanks, Ms. Avila.
        And, you know, I also want to take a moment to talk a
    little about the great work that not only my colleague
    Jenniffer Gonzalez-Colon has been doing in this area, but also
    Governor Rossello back on the island. They have been both
    drumming this drumbeat since well before Hurricane Maria, and a
    lot of the input from their ideas were included in this
    legislation.
        And I really appreciate your leadership as well, Ms. Avila.
    We are going to do our best to end this crisis for good in
    Puerto Rico with regard to Medicaid. I yield back.
        Ms. Avila. Thank you.
        Ms. Eshoo. The gentleman yields back. I now would like to
    recognize the gentleman from Georgia, Mr. Carter.
        Mr. Carter. Thank you, Madam Chair.
        Ms. Eshoo. The only pharmacist in the Congress. How is
    that?
        Mr. Carter. That is great. Thank you, Madam Chair, I
    appreciate it. And I appreciate all of you being here. This is
    certainly something that is very important, obviously, to all
    of us.
        Ms. Avila, I wanted to ask you, it is my understanding that
    Puerto Rico's largest benefit categories in terms of spending
    is outpatient prescription drugs and that the amount spent on
    drugs is projected to be over $800 million in fiscal year 2020.
    Why is that?
        Ms. Avila. Well, that is why because we work with a rebate
    program in Puerto Rico, but the rebates are coming to the
    government directly. It doesn't go to the MCOs, or the managed
    care organizations, so it is our artificially priced, the drugs
    are.
        Mr. Carter. I get that. But what I am getting at is, in
    comparison to the national average, it is much higher. That
    same program is applied all throughout the country. So you are
    right, 800 million is somewhat skewed, but at the same time, in
    comparison to the other numbers with the rest of the country,
    it is above the national average. And I am just wondering if
    there is a reason for that.
        Ms. Avila. Well, I will need to look for more information
    because our pharmacy program is mandatory generic. We are
    keeping it mandatory, and we have more than 85 percent of those
    are included in our gestation. So the prices, the drug prices
    has been increasing in 20 percent, you know.
        Mr. Carter. And I get all that. And again, where I am
    coming from is just in comparison.
        Ms. Avila. Yes.
        Mr. Carter. I am comparing you to the rest of the country,
    and in comparison the percentage you spend on prescription
    drugs is higher than it is elsewhere. I am just wondering why.
    And also, a lot of indicators are telling us that the outcomes
    are worsening.
        Ms. Avila. Well, we have a lot of diabetics, hypertension.
    We have some outliers in our population of those conditions
    that drive the costs to those extremes that we are looking, but
    we already have programs in place that monitor the utilization.
    But the behavior of the population, we haven't had all the
    programs in place to be able to track to go and look for those
    programs that monitor the clinical aspects of our population.
        But it is a reality, yes. We have sicker people in----
        Mr. Carter. Well, please understand, I am not coming from a
    critical perspective.
        Ms. Avila. No, I understand.
        Mr. Carter. I am inquisitive as to--and you have just
    answered some of my next question, and that is, you know, what
    kind of health problems are you having. I mean, I am from the
    South, and in the South we are the cardio belt. I mean, we have
    a lot of cardiovascular disease because of diet or whatever,
    but that is a big problem we have. Now you have just indicated
    that diabetes, hypertension--do you have any kind of wellness
    programs in place that you are trying to push forward?
        Ms. Avila. Yes. Since November 2018, we have implemented a
    new healthcare model in Puerto Rico, and we are looking higher-
    quality programs that works with the social determinates of our
    population, and they need to bring new programs to our, you
    know, to our healthcare model. We are monitoring those changes
    as we speak since November 2018. We are in our first 6 months
    of that new implementation, and we are supposed to be gathering
    better outcomes.
        Mr. Carter. OK.
        Ms. Avila. Because that is why it was one of the main
    intentions of that change.
        Mr. Carter. OK.
        Let me move to Ms. Sablan and Ms. Young. Your two
    territories as I understand it--and please forgive me if I am
    being redundant in my questions, I have had another committee
    hearing going on at the same time. But it is my understanding
    that you have a waiver. That your Medicaid and your CHIP
    programs are under a section 1902(j) waiver. Are you familiar
    with that?
        Ms. Young. Yes.
        Mr. Carter. Ms. Young, you are?
        Ms. Young. Yes.
        Mr. Carter. And that waiver is specific, as I understand
    it, to just your country and Ms. Sablan's country. And I was
    just wondering, do you feel like that waiver might help some of
    the other territories? Is that something that has benefited
    your countries?
        Ms. Young. Well, our 1902(j) waiver has----
        Mr. Carter. Excuse me, territories. Excuse me, I am sorry.
        Ms. Young. Yes, it has definitely been to our advantage
    because we are so unique in so many different ways. We don't do
    individual enrollment. We are very remote. And we also only
    have one airline that has two flights a week to our territory,
    so it limits our ability to do a lot of things. But I think as
    to the other territories, I think it would be best for them.
        Mr. Carter. Right.
        Ms. Young. But I have heard that people are interested in
    our 1902(j) waiver.
        Mr. Carter. Right.
        Ms. Sablan?
        Ms. Sablan. Yes, that is a very unique program. And so what
    happens is, like, we drop off the categorically requirement,
    and it is applied to anybody that meets our income and resource
    limit. But we are doing eligibility----
        Mr. Carter. Good, good.
        Ms. Sablan [continuing]. Enrollment.
        Mr. Carter. Well, thank you all for your efforts in making
    these programs the best that they can be, and we certainly
    stand ready to help you in any way that we can. So thank you,
    and I yield back.
        Ms. Eshoo. The gentleman yields back. I now have the
    pleasure of recognizing the gentleman from Massachusetts, Mr.
    Kennedy, for 5 minutes of his questions.
        Mr. Kennedy. Madam Chair, thank you. Given the fact that I
    just jumped my good friend from California, I will happily
    yield. I will trade turns with the gentleman from California,
    if he is ready.
        Ms. Eshoo. Oh, I am sorry.
        Mr. Cardenas. That is all right.
        Ms. Eshoo. It is my mistake.
        Mr. Cardenas. Thank you.
        Now, that is a gentleman.
        Ms. Eshoo. I think.
        Mr. Cardenas. Let me tell you. We use that term loosely
    around here, but he proved it.
        Ms. Eshoo. No, we really mean it. We really mean it.
        Mr. Cardenas. Thank you, Madam Chair.
        Ms. Eshoo. Gentleman Cardenas.
        Mr. Cardenas. And I much appreciated the courtesy from the
    gentleman from Massachusetts. Thank you, Madam Chair, for
    holding this very important hearing.
        And my first question is to Ms. Avila regarding doctors and
    the comparison what is or isn't happening in the territories,
    specifically Puerto Rico compared to the rest of the country.
        I read a report about a family in Puerto Rico who wanted to
    take their newborn, a 6-week-old baby, to see a pediatric
    gastroenterologist, but the wait time was several months long.
    It also told the story of Diago, who was born with severely low
    muscle tone and travels an hour with his mother and a nurse
    just to receive medical care.
        With two-thirds of children in Puerto Rico on Medicaid, how
    has the loss of providers affected their ability to receive
    care?
        Ms. Avila. It is critical right now. There is uncertainty
    just to think about having 1.5 million beneficiaries without
    doctors. To be able to serve them is our main concern right
    now, and that is why our urgent just to do some immediate
    changes in the reimbursement rates that we are paying to our
    specialists and our doctors.
        Mr. Cardenas. It is my understanding that I heard a stat
    that over 4,000 doctors have left Puerto Rico since 2006. And
    according to some estimates, Puerto Rico is losing one doctor
    per day, currently, and that was before the hurricane. How has
    this affected wait times for people on Medicaid in Puerto Rico?
        Ms. Avila. It has been increasing the waiting time. We have
    been stating here that today we account for almost 9,000
    doctors in compared to 15 or 14 thousand a couple of years ago.
    And that will affect children, elderly, and all the population
    as well throughout the whole island. Because the doctors that
    serve the Medicaid population also serve the private sector and
    the Medicare Advantage and traditional Medicare as well, so the
    island will be affected islandwide.
        Mr. Cardenas. OK, across the board.
        Ms. Avila. Across the board, yes.
        Mr. Cardenas. Also, can you clarify for the American
    citizens who are listening to this hearing, a person who is
    born in Puerto Rico and a person who continues to live in
    Puerto Rico, whether they are 6 weeks old or 60 years old, is
    that individual an American citizen?
        Ms. Avila. Yes, it is.
        Mr. Cardenas. OK, so we are talking about American
    citizens.
        Ms. Avila. Yes, we are.
        Mr. Cardenas. And that is the case for all the territories,
    correct? OK. No exception? We are all--the subject matter today
    is talking about the territories of the United States,
    individuals who are born there are American citizens. Just like
    I was born in California, so I have the privilege and the
    blessing of being an American citizen. Is that the case for all
    of your constituents who were born in your territory?
        Ms. Young. Not for American Samoa. People born in American
    Samoa are U.S. nationals.
        Mr. Cardenas. OK.
        Ms. Rhymer-Browne. For the Virgin Islands, we are U.S.
    citizens.
        Ms. Sablan. For CNMI, we are U.S. citizens.
        Ms. Arcangel. For Guam, they are U.S. citizens, those who
    are under Medicaid program. But we also want to talk about the
    COFAs because we also are responsible for the them. They are
    not U.S. citizens, but the emergency services are incorporated
    under Medicaid, so technically we use Medicaid to pay for
    those.
        So not only U.S. citizens, but because of the treaty of the
    U.S. and the Compact of Free Association, so we are also
    responsible for them.
        Mr. Cardenas. So that treaty is a United States treaty?
        Ms. Arcangel. Yes.
        Mr. Cardenas. It is not a United Nations treaty.
        Ms. Arcangel. No, no.
        Mr. Cardenas. So we are not talking about a treaty that
    other foreign governments or other human beings around the
    world imposed upon us. This is a treaty that the United States
    Government agreed to.
        Ms. Arcangel. Yes.
        Mr. Cardenas. So, in the tradition and in the spirit of
    giving one's word--and a treaty is like giving someone's word
    in writing--we as the United States should probably follow
    through with that treaty and the obligations that we as the
    United States Government agreed to. That make sense?
        Ms. Arcangel. Yes.
        Mr. Cardenas. OK.
        Ms. Arcangel. And for them we spent $147 million in fiscal
    year 2017, and the amount that we receive, it is not enough.
        Mr. Cardenas. OK, so the amount that you receive, that 147
    million comes out of an amount of money that is a shortfall as
    it is. Is that what you are saying?
        Ms. Arcangel. Yes.
        Mr. Cardenas. OK. The reason why I want to ask those
    questions is because I think that it is unfortunate that--I
    don't know why, maybe in American history classes or what have
    you--a lot of American citizens think that the people sitting
    up here are not American citizens, that you are foreigners, and
    that is not true.
        So I just wanted to clarify that for the people watching
    and listening and just wanted to thank you, and I yield back
    the balance of my time.
        Ms. Eshoo. The gentleman yields back. And now I would like
    to recognize the gentleman from Massachusetts, Mr. Kennedy, for
    his 5 minutes of questions.
        Mr. Kennedy. Madam Chair, thank you. There has been some
    discussion about the (j) waiver, which is essentially a broad
    waiver authority that is available to American Samoa and the
    Commonwealth of the Mariana Islands. Crucially, the (j) waiver
    does not allow--does not allow--the Secretary of HHS to waive
    the cap amount or the FMAP.
        Based on what we have heard from the testimony today and in
    written statements, it sounds like folks aren't actually asking
    to expand the (j) waiver. They are asking for adequate,
    sustainable, long-term finance structure that allows them to
    operate Medicaid programs the way that they want without the
    constant threat of a funding shortfall. I think it is also
    worth reminding everybody that State Medicaid programs already
    have waiver authority through section 1115 of the Social
    Security Act.
        So, Dr. Schwartz, starting with you, it is my understanding
    that people generally consider waiver authority available
    under--to Medicaid, excuse me--under section 1115 to be pretty
    broad. Would you say that is an accurate characterization?
        Dr. Schwartz. Yes.
        Mr. Kennedy. So would expending (j) waiver authority to the
    rest of the territories increase the size of the Federal
    funding allotment?
        Dr. Schwartz. No.
        Mr. Kennedy. Would expanding the (j) waiver ensure that no
    beneficiaries lose coverage or benefits or that no providers
    see pay cuts if a territory exceeds its Federal allotment and
    doesn't have enough territory funds to cover its Medicaid
    costs?
        Dr. Schwartz. No.
        Mr. Kennedy. So no to the loss of coverage, no to the
    benefits, no to the pay cuts, and if you exceed the Federal
    allotment. No, no, no.
        Dr. Schwartz. That is correct.
        Mr. Kennedy. We have heard from both territories that
    currently operate under a (j) waiver, American Samoa and the
    Northern Mariana Islands, that their Medicaid programs have
    both experienced significant Federal funding shortfalls. Is it
    fair to say that a (j) waiver does not guarantee the financial
    sustainability of a territory's Medicaid program?
        Dr. Schwartz. That is correct.
        Mr. Kennedy. Thank you. And that was remarkably efficient.
    It sounds to me like the Medicare programs do have some
    flexibility under the law and that this (j) waiver does nothing
    to address the financial problems that are plaguing the
    territories as we have heard from multiple witnesses today, and
    that the waiver authority does not actually address the root
    cause of those challenges. Instead of looking for ways to
    weaken the protections of Medicaid, I hope that we can find a
    way to work together to find a way to strengthen those programs
    by providing the territories the funding that they so
    desperately need.
        And, Madam Chair, due to an extraordinarily efficient
    witness, I will yield back my 3 minutes of time. Grateful.
        Ms. Eshoo. The gentleman yields back. And now I would like
    to recognize the gentlewoman from California, Ms. Barragan, for
    her 5 minutes of questions.
        Ms. Barragan. Thank you. And thank you all for being here
    today and for providing testimony.
        When I first heard about what was happening, I couldn't
    help but think and say, ``Are you kidding me?'' American
    citizens, even though they are in another place, are not being
    treated fairly. They are not being treated equally as everybody
    else. It is my understanding that the territories receive
    Medicaid funding in the form of a block grant and that States
    receive open-ended Federal funds while the funds' territories
    received a fixed amount.
        I don't think this is something the American people know
    about. I think if I were in my congressional district, which is
    Compton-Watts--very working class, a lot of people who rely
    upon Medicare/Medicaid and services--they would be shocked to
    hear that if they lived, say, in Puerto Rico or one of the
    territories that they actually could have a period of time when
    their benefits would be effectively cut and said no more.
        The block grant funding amount does not come anywhere close
    to covering the cost of healthcare for the territories'
    Medicaid enrollees. For instance, Puerto Rico's block grant for
    fiscal year 2019 is $367 million, while Puerto Rico's total
    Medicaid expenditures are projected to be nearly $2.8 billion.
    That is pretty remarkable when you think about the difference
    in the amount that Puerto Rico has to come up with. That means
    that the block grant only accounts for 13 percent of Puerto
    Rico's total need. Now, once the block grant funding runs out,
    the territories must use their own funds to pay the entire
    remaining cost of Medicaid healthcare services.
        I have been to Puerto Rico twice since Maria hit, and the
    devastation and the amount of money that it is going to take to
    recover is pretty remarkable.
        Ms. Avila, is there some impact if Puerto Rico needs to
    use--come up with these extra dollars for the gap, does that
    mean they may have less money for disaster relief?
        Ms. Avila. Well, starting with we will not have money to
    cover for all the life that are receiving benefits right now.
    We will be facing a chaos in the island because this situation
    is affecting everybody on the island because of the lack of
    funding, so if something like that happen, we are expecting a
    mass exodus of Puerto Ricans to the States, and Puerto Rico
    will need to redefine our healthcare model to be able to
    comply.
        Because our fiscal situation is no way that we can cover
    with almost more than $1 billion from local funds right now,
    even the Fiscal Board wouldn't allow us to do so. So we will
    need to change everything according to what we are doing right
    now and Medicaid program will be very difficult to meet with
    all the requirements and of what we have right now in place.
        We are not looking for waivers. We are looking for ways to
    have a stabilized program and in a full capacity complying with
    all that the programs require.
        Ms. Barragan. OK, so just for the panel, how would you be
    able to expand coverage and services if the block grants were
    eliminated and you were treated the same as the States?
        Ms. Avila. We would not be able to cover with that. We
    would need to change the structure and to have like basic
    services, and the government will need to start providing
    services directly through our facilities. So.
        Ms. Barragan. So, I am asking if you got rid of block
    grants and you were treated like everybody else in the States,
    would that be helpful? Would that help you expand services?
        Ms. Avila. That will be the answer for Puerto Rico just to
    be able to comply and have a sustain of our programs. So I
    didn't understand your first question.
        Ms. Barragan. OK. Any others on the panel?
        Ms. Arcangel. For Guam, we will go in to reduce the number
    of uninsured population. We will definitely increase our income
    guideline and make them eligible under the program.
        Ms. Rhymer-Browne. For the U.S. Virgin Islands, we would do
    similarly to expand to the additional 10 to 15 thousand who are
    eligible, and that will definitely help our underinsured
    population and also reduce the amount of uncompensated care in
    our hospitals and our clinics.
        Ms. Sablan. For CNMI, we will provide the mandated services
    as well as some of the optional services that is important.
        Ms. Barragan. Great. So you say overall healthcare would
    improve in the territories?
        Ms. Arcangel. Yes.
        Ms. Barragan. Thank you. I yield back.
        Ms. Eshoo. The gentlewoman yields back. I now would like to
    recognize the gentleman from New York, Mr. Engel, for his 5
    minutes of questioning.
        Mr. Engel. Thank you, Madam Chair. Let me first say U.S.
    territories are subject to inequitable Medicaid funding
    policies, and we can see that today. States, for instance,
    receive Federal matching funds for each dollar they spend in
    their Medicaid programs, whereas territories are capped by
    section 1108 of the Social Security Act. And because of these
    inequities, Congress has had to appropriate additional funding
    on numerous occasions to avoid shortfalls in territorial
    Medicaid programs. And this piecemeal funding obviously creates
    uncertainty, which jeopardizes the ability of territories to
    provide Medicaid coverage to Americans residing in these
    communities.
        So let me ask you, Ms. Schwartz, what steps can Congress
    take to ensure that U.S. territories have a steady stream of
    Federal support for their Medicaid program?
        Dr. Schwartz. As I pointed out in my testimony, the chronic
    underfunding of the territories results from the combination of
    the very low caps that are provided annually and the very low
    matching rate. So addressing both of those is needed to address
    the chronic underfunding.
        Mr. Engel. OK, thank you. Nearly 2 years ago, Hurricane
    Maria made landfall in Puerto Rico and the U.S. Virgin Islands,
    claiming nearly 3,000 American lives. The island is still
    reeling from the aftermath of this natural catastrophe. And
    although Congress provided temporary support to Puerto Rico's
    Medicaid program, it needs significant long-term Federal
    support. And I believe if we fail to act, Puerto Rico will go
    off a Medicaid cliff, which could have disastrous consequences
    for its healthcare system.
        So, Ms. Avila, how would the Medicaid cliff affect Puerto
    Rico's ability to retain and recruit healthcare providers?
        Ms. Avila. Just to clarify, if we receive the funding or if
    we stay as we are right now?
        Mr. Engel. If you stayed where you are right now.
        Ms. Avila. Well, we will not be able to comply with the
    full requirements of the Medicaid program and we will be facing
    a lack of providers, because providers are leaving the island
    because we are not able to fulfill their needs in terms of
    reimbursement rates. So it will be very challenging for Puerto
    Rico to keep our providers in the island.
        Mr. Engel. Right. And, of course, as we have been stating
    today, American citizens are being treated as second-class
    citizens, and it is really unacceptable. Thank you.
        Ms. Avila. Thank you.
        Mr. Engel. Let me ask Ms. Young. As chairman of the Foreign
    Affairs Committee, I am the chairman, I always--I am shocked by
    the number of people who forget that individuals living in the
    U.S. territories are American citizens, and Congress has a duty
    to ensure that the healthcare needs of these Americans are
    fully met. So I am proud that I voted for the recent disaster
    supplemental which includes additional funding for territorial
    Medicaid programs such as those in American Samoa.
        So, Ms. Young, would you please describe how this funding
    will help our fellow citizens residing in American Samoa?
        Ms. Young. First of all, thank you, Congressman, for your
    vote on the disaster supp. The availability of the 100 FMAP
    percentage for our territory has allowed us to resume
    critically necessary medical services that we had suspended
    back in March. And it has also allowed us to pay our bills for
    the off-island medical referral program, and we are now able--
    we have reinstated the services for durable medical equipment
    and prosthetics as well as we will now be able to pay the bills
    and invoices that have been in arrears for our federally
    qualified healthcare centers and our community clinics. So it
    has been an extremely helpful solution for us through the end
    of September, so thank you for that.
        Mr. Engel. OK, thank you very much. This is obviously a
    very important subject. I know that our chair takes it very
    seriously, and I am looking forward to working with her to
    continue to make sure that there are not inequities where we
    pit American citizens against other American citizens. We are
    all American citizens. We are all equal, and we shouldn't
    forget that. Thank you, Madam Chair.
        Ms. Eshoo. We thank the gentleman and also for your
    leadership at Foreign Relations, very important.
        I don't see any other Members here, so what I will do at
    this point is to--well, there are only a couple of us here--but
    for the record, remind Members that, pursuant to committee
    rules, they have 10 business days to submit additional
    questions for the record.
        And I think the witnesses heard several Members make
    reference to the fact that they were going to submit questions
    to you. You will need to answer those, so we ask that you
    answer them in full and in the most timely way, because the
    information that is provided to us is really foundational for
    what we want to do moving ahead.
        And I also would like to ask unanimous consent to enter
    into the record the following. These are documents for the
    record: a statement from Congresswoman Aumua Amata Coleman
    Radewagen; a statement from the American Academy of Family
    Physicians; a statement from the Puerto Rico Chamber of
    Commerce; a statement from the Financial Oversight and
    Management Board for Puerto Rico; a statement from the Multi-
    sectorial Council on Puerto Rico's Health System; a statement
    from the Partnership for Medicaid; and a statement from
    America's Health Insurance Plans.
        So I ask unanimous consent that these documents be placed
    in the record. Hearing no objections, they will be placed in
    the record.
        [The information appears at the conclusion of the hearing.]
        Ms. Eshoo. Let me just close by saying a few words to the
    witnesses. I think everyone has recognized that you have
    traveled a long distance. For several of you, it has taken more
    than the hours it takes for me to commute across the country
    every week from California to DC.
        I want you to know that your travel is worth it. I believe
    that collectively this panel has moved the needle, moved the
    needle on what needs to be done. And the very good question
    about why these programs have such low caps, low matching rates
    and that in the stateside they are one figure, in the
    territories they are another, I can't help but think that there
    is some bias somewhere from many years ago. But I think that it
    is a form of negligence to allow it to go on. This has to
    change, people are desperate, and the overlay of the natural
    disaster has done more damage to exacerbate what you are
    already burdened with.
        I want to thank my colleagues for being present. Mr. Sablan
    has been here throughout. Congresswoman Coleman Radewagen--am I
    pronouncing your name correctly? Thank you. My name is a little
    odd, so I am sensitive about mispronunciation. You have been
    here throughout, and we are going to work with you.
        I know that my classmate, Congresswoman Nydia Velazquez,
    has introduced her legislation. The Delegates from the other
    territories have worked on a bill with Congresswoman Plaskett,
    1354. And so I look forward to this committee solving this once
    and for all. I don't want to see any more Band-Aids and kicking
    the can down the road. The citizens of our country deserve
    citizenship that is celebrated, not denigrated.
        There is an old saying that many of us use,--and it is an
    important one--that justice delayed is justice denied. I think
    healthcare denied is justice denied.
        So, on that note, we all thank you for your travels. We
    thank you for your professionalism, for answer--you really
    answered Members' questions so well, and we look forward to
    resolving this and continuing to work with you to resolve it.
        So, at this time, the subcommittee is adjourned.
        [Whereupon, at 1:11 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                               [all]