    [House Hearing, 117 Congress]
    [From the U.S. Government Publishing Office]

                   AVERTING A CRISIS: PROTECTING ACCESS TO
                    HEALTHCARE IN THE U.S. TERRITORIES

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

                                VIRTUAL HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 MARCH 17, 2021

                                   __________

                               Serial No. 117-13

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

         Published for the use of the Committee on Energy and Commerce

                       govinfo.gov/committee/house-energy
                            energycommerce.house.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    46-304 PDF                 WASHINGTON : 2022

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

                        COMMITTEE ON ENERGY AND COMMERCE

                         FRANK PALLONE, Jr., New Jersey
                                     Chairman
    BOBBY L. RUSH, Illinois              CATHY McMORRIS RODGERS, Washington
    ANNA G. ESHOO, California              Ranking Member
    DIANA DeGETTE, Colorado              FRED UPTON, Michigan
    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          BRETT GUTHRIE, Kentucky
    KATHY CASTOR, Florida                DAVID B. McKINLEY, West Virginia
    JOHN P. SARBANES, Maryland           ADAM KINZINGER, Illinois
    JERRY McNERNEY, California           H. MORGAN GRIFFITH, Virginia
    PETER WELCH, Vermont                 GUS M. BILIRAKIS, Florida
    PAUL TONKO, New York                 BILL JOHNSON, Ohio
    YVETTE D. CLARKE, New York           BILLY LONG, Missouri
    KURT SCHRADER, Oregon                LARRY BUCSHON, Indiana
    TONY CARDENAS, California            MARKWAYNE MULLIN, Oklahoma
    RAUL RUIZ, California                RICHARD HUDSON, North Carolina
    SCOTT H. PETERS, California          TIM WALBERG, Michigan
    DEBBIE DINGELL, Michigan             EARL L. ``BUDDY'' CARTER, Georgia
    MARC A. VEASEY, Texas                JEFF DUNCAN, South Carolina
    ANN M. KUSTER, New Hampshire         GARY J. PALMER, Alabama
    ROBIN L. KELLY, Illinois, Vice       NEAL P. DUNN, Florida
        Chair                            JOHN R. CURTIS, Utah
    NANETTE DIAZ BARRAGAN, California    DEBBBIE LESKO, Arizona
    A. DONALD McEACHIN, Virginia         GREG PENCE, Indiana
    LISA BLUNT ROCHESTER, Delaware       DAN CRENSHAW, Texas
    DARREN SOTO, Florida                 JOHN JOYCE, Pennsylvania
    TOM O'HALLERAN, Arizona              KELLY ARMSTRONG, North Dakota
    KATHLEEN M. RICE, New York
    ANGIE CRAIG, Minnesota
    KIM SCHRIER, Washington
    LORI TRAHAN, Massachusetts
    LIZZIE FLETCHER, Texas
                                     ------

                               Professional Staff

                       JEFFREY C. CARROLL, Staff Director
                    TIFFANY GUARASCIO, Deputy Staff Director
                      NATE HODSON, Minority Staff Director
                             Subcommittee on Health

                           ANNA G. ESHOO, California
                                    Chairwoman
    G. K. BUTTERFIELD, North Carolina    BRETT GUTHRIE, Kentucky
    DORIS O. MATSUI, California            Ranking Member
    KATHY CASTOR, Florida                FRED UPTON, Michigan
    JOHN P. SARBANES, Maryland, Vice     MICHAEL C. BURGESS, Texas
        Chair                            H. MORGAN GRIFFITH, Virginia
    PETER WELCH, Vermont                 GUS M. BILIRAKIS, Florida
    KURT SCHRADER, Oregon                BILLY LONG, Missouri
    TONY CARDENAS, California            LARRY BUCSHON, Indiana
    RAUL RUIZ, California                MARKWAYNE MULLIN, Oklahoma
    DEBBIE DINGELL, Michigan             RICHARD HUDSON, North Carolina
    ANN M. KUSTER, New Hampshire         EARL L. ``BUDDY'' CARTER, Georgia
    ROBIN L. KELLY, Illinois             NEAL P. DUNN, Florida
    NANETTE DIAZ BARRAGAN, California    JOHN R. CURTIS, Utah
    LISA BLUNT ROCHESTER, Delaware       DAN CRENSHAW, Texas
    ANGIE CRAIG, Minnesota               JOHN JOYCE, Pennsylvania
    KIM SCHRIER, Washington              CATHY McMORRIS RODGERS, Washington
    LORI TRAHAN, Massachusetts               (ex officio)
    LIZZIE FLETCHER, Texas
    FRANK PALLONE, Jr., New Jersey (ex
        officio)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Anna G. Eshoo, a Representative in Congress from the State
      of California, opening statement...............................     2
        Prepared statement...........................................     3
    Hon. Brett Guthrie, a Representative in Congress from the
      Commonwealth of Kentucky, opening statement....................     4
        Prepared statement...........................................     6
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     7
        Prepared statement...........................................     8
    Hon. Cathy McMorris Rodgers, a Representative in Congress from
      the State of Washington, opening statement.....................     9
        Prepared statement...........................................    11

                                   Witnesses

    Delegate Gregorio Kilili Camacho Sablan, a Representative in
      Congress from the Territory of the Northern Mariana Islands....    13
        Prepared statement...........................................    15
    Delegate Aumua Amata Coleman Radewagen, a Representative in
      Congress from the Territory of American Samoa..................    19
        Prepared statement...........................................    21
    Delegate Stacey E. Plaskett, a Representative in Congress from
      the Territory of the Virgin Islands............................    24
        Prepared statement...........................................    26
    Resident Commissioner Jenniffer Gonzalez-Colon, a Representative
      in Congress from the Territory of Puerto Rico..................    31
        Prepared statement...........................................    33
    Delegate Michael F. Q. San Nicolas, a Representative in Congress
      from the Territory of Guam.....................................    38
        Prepared statement...........................................    40
    Anne L. Schwartz, Ph.D., Executive Director, Medicaid and CHIP
      Payment and Access Commission..................................    43
        Prepared statement \1\
        Answers to submitted questions...............................   180
    Carolyn L. Yocom, Director, Health Care, Government
      Accountability Office..........................................    45
        Prepared statement...........................................    47
        Answers to submitted questions...............................   184

                               Submitted Material

    Letter of March 16, 2021, from Senator Justo S. Quitugua,
      Northern Mariana Islands Commonwealth Legislature, to Mr.
      Pallone, et al., submitted by Ms. Eshoo........................    76
    Statement of Helen C. Sablan, Medical Director, Commonwealth of
      the Northern Mariana Islands, March 15, 2021, submitted by Ms.
      Eshoo..........................................................    79
    Letter of March 16, 2021, from Albert Bryan, Jr., Governor,
      Territory of the Virgin Islands, to Mr. Pallone, et al.,
      submitted by Ms. Eshoo.........................................    91

    ----------

    \1\ Dr. Schwartz's prepared statement has been retained in committee
    files and is available at https://docs.house.gov/meetings/IF/IF14/
    20210317/111335/HHRG-117-IF14-Wstate-SchwartzA-20210317.pdf.
    Letter of March 16, 2021, from James L. Madara, Chief Executive
      Officer and Executive Vice President, American Medical
      Association, to Mr. Pallone, et al., submitted by Ms. Eshoo....    94
    Letter of March 17, 2021, from the Partnership for Medicaid to
      Ms. Eshoo and Mr. Guthrie, submitted by Ms. Eshoo..............    96
    Letter of March 17, 2021, from Gary L. LeRoy, Board Chair,
      American Academy of Family Physicians, to Ms. Eshoo and Mr.
      Guthrie, submitted by Ms. Eshoo................................    99
    Letter of March 17, 2021, from Adam P. Carbullido, Director of
      Policy and Advocacy, Association of Asian Pacific Community
      Health Organizations, to Ms. Eshoo and Mr. Guthrie, submitted
      by Ms. Eshoo...................................................   101
    Statement of America's Health Insurance Plans, March 17, 2021,
      submitted by Ms. Eshoo.........................................   103
    Letter of January 14, 2021, from Michael Fraser, Chief Executive
      Officer, Association of State and Territorial Health Officials,
      to Hon. Gregorio Kilili Camacho Sablan, submitted by Ms. Eshoo.   106
    Letter, undated, from Esther L. Muna, Chief Executive Officer,
      State/Territorial Public Health Official, Commonwealth
      Healthcare Corporation, the Territorial Hospital & Health
      System, Commonwealth of the Northern Mariana Islands, to
      Congressional Leaders, submitted by Ms. Eshoo..................   107
    Letter of March 16, 2021, from Edmund Villagomez, Speaker,
      Northern Mariana Islands Commonwealth Legislature, House of
      Representatives, et al., to Mr. Pallone, et al., submitted by
      Ms. Eshoo......................................................   110
    Statement of the Department of Public Health and Social Services,
      Government of Guam, March 16, 2021, submitted by Ms. Eshoo.....   114
    Letter of March 17, 2021, from Ralph DLG. Torres, Governor,
      Commonwealth of the Northern Mariana Islands, to Mr. Pallone,
      et al., submitted by Ms. Eshoo.................................   117
    Letter of March 15, 2021, from Michael W. Cruz, President and
      Chief Executive Officer, Guam Regional Medical City, to Mr.
      Pallone, et al., submitted by Ms. Eshoo........................   119
    Statement of Michael Rhymer-Browne, Assistant Commissioner,
      Virgin Islands Department of Human Services, June 20, 2019,
      submitted by Ms. Eshoo.........................................   122
    Report of the Army Corps of Engineers, ``Assessment of Health
      Care Infrastructure and Services, Lyndon Baines Johnson
      Tropical Medical Center, Pago Pago, American Samoa,'' April 22-
      24, 2019, submitted by Ms. Eshoo\1\
    Statement of Sandra King Young, American Samoa Medicaid Director,
      June 20, 2019, submitted by Ms. Eshoo..........................   132
    Report by Epstein Becker & Green, ``Medicaid in Puerto Rico:
      Differences from the States,'' March 15, 2021, submitted by Ms.
      Eshoo..........................................................   136
    Letter of March 10, 2021, from Arielle Buyum, Executive Director,
      Pacific Islands Primary Care Association, to Subcommittee on
      Health, submitted by Ms. Eshoo.................................   139
    Letter of March 17, 2021, from Roberto Garcia, President,
      Medicaid and Medicare Advantage Products Association of Puerto
      Rico, to Ms. Eshoo and Mr. Guthrie, submitted by Ms. Eshoo.....   141
    Report of the National Association of Medicaid Directors,
      ``Inaugural Survey of Territory Medicaid Directors,'' November
      2019, submitted by Ms. Eshoo...................................   145
    Letter of March 17, 2021, from the National WIC Association to
      Mr. Pallone, et al., submitted by Ms. Eshoo....................   153
    Invoice of March 15, 2021, NWG Advocacy, LLC, to Puerto Rico
      Hospital Association, submitted by Ms. Eshoo...................   154
    Letter, March 16, 2021, from Esther L. Muna, Chief Executive
      Officer, Commonwealth Healthcare Corporation, Commonwealth of
      the Northern Mariana Islands, to Congressional Leaders,
      submitted by Ms. Eshoo.........................................   155
    PL 116-4 Congressional Requirements Summary of Activities,
      January 28, 2021, submitted by Ms. Eshoo.......................   157
    Letter of March 17, 2021, from Commonwealth Medicaid Providers
      from the Commonwealth of the Northern Mariana Islands to Mr.
      Pallone, et al., submitted by Ms. Eshoo........................   159

    ----------

    \2\ The report has been retained in committee files and is available at
    https://docs.house.gov/meetings/IF/IF14/20210317/111335/HHRG-117-IF14-
    20210317-SD018.pdf.
    Letter of March 17, 2021, from Lourdes A. Leon Guerrero, Governor
      of Guam, to Mr. Pallone, et al., submitted by Ms. Eshoo........   164
    Statement of Jamie Pla Cortes, Executive President, Puerto Rico
      Hospital Association, March 17, 2021, submitted by Ms. Eshoo...   167
    Statement of Neil C. Weare, President and Founder, Equally
      American Legal Defense and Education Fund, March 17, 2021,
      submitted by Ms. Eshoo.........................................   175
    Statement of Pedro R. Pierluisi, Governor of Puerto Rico, March
      17, 2021, submitted by Ms. Eshoo...............................   177

        AVERTING A CRISIS: PROTECTING ACCESS TO HEALTHCARE IN THE U.S.
                                  TERRITORIES

                                  ----------

                           WEDNESDAY, MARCH 17, 2021

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 1:02 p.m., via
    Cisco Webex online video conferencing, Hon. Anna G. Eshoo
    (chairwoman of the subcommittee), presiding.
        Members present: Representatives Eshoo, Butterfield,
    Matsui, Castor, Sarbanes, Schrader, Cardenas, Ruiz, Kelly,
    Barragan, Blunt Rochester, Craig, Schrier, Trahan, Fletcher,
    Pallone (ex officio), Guthrie (subcommittee ranking member),
    Burgess, Griffith, Bilirakis, Long, Bucshon, Hudson, Carter,
    Dunn, Curtis, Crenshaw, Joyce, and Rodgers (ex officio).
        Also present: Representative Soto.
        Staff present: Jeffrey C. Carroll, Staff Director; Waverly
    Gordon, General Counsel; Tiffany Guarascio, Deputy Staff
    Director; Saha Khaterzai, Professional Staff Member; Mackenzie
    Kuhl, Digital Assistant; Una Lee, Chief Health Counsel; Meghan
    Mullon, Policy Analyst; Kaitlyn Peel, Digital Director; Rick
    Van Buren, Health Counsel; C.J. Young, Deputy Communications
    Director; Sarah Burke, Minority Deputy Staff Director; Michael
    Cameron, Minority Policy Analyst, Consumer Protection and
    Commerce, Energy, Environment; William Clutterbuck, Minority
    Staff Assistant; Theresa Gambo, Minority Financial and Office
    Administrator; Marissa Gervasi, Minority Counsel, Oversight and
    Investigations; Grace Graham, Minority Chief Counsel, Health;
    Caleb Graff, Minority Deputy Chief Counsel, Health; Brittany
    Havens, Minority Professional Staff Member, Oversight and
    Investigations; Jack Heretik, Minority Press Secretary; Nate
    Hodson, Minority Staff Director; Sean Kelly, Minority Press
    Secretary; Peter Kielty, Minority General Counsel; Emily King,
    Minority Member Services Director; Bijan Koohmaraie, Minority
    Chief Counsel; Clare Paoletta, Minority Policy Analyst, Health;
    Kristin Seum, Minority Counsel, Health; Kristen Shatynski,
    Minority Professional Staff Member, Health; Olivia Shields,
    Minority Communications Director; Alan Slobodin, Minority Chief
    Investigative Counsel, Oversight and Investigations; Michael
    Taggart, Minority Policy Director; and Everett Winnick,
    Minority Director of Information Technology.
        Ms. Eshoo. I want to call the Subcommittee on Health to
    come to order now.
        And due to COVID-19, of course, today's hearing is being
    held remotely, and all Members and witnesses will be
    participating via video conferencing.
        As part of our hearing, microphones, of course, will be set
    on mute to eliminate any background noise. We know how
    irritating that is, especially when you are the one that is
    speaking and there is a lot of noise in the background. So
    Members and witnesses, you have to remember to unmute your
    microphones each time you wish to speak.
        And documents for the record should be sent to Meghan
    Mullon at the email address that we have provided to your
    staffs, and all documents will be entered into the record at
    the conclusion of the hearing.
        The Chair now recognizes herself for 5 minutes for an
    opening statement.

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

        My colleagues, in September of this year the five U.S.
    territories will face a Medicaid cliff. And I use this term
    because it means that the supplementary Medicaid funding that
    is provided to the territories through the Affordable Care Act
    will run out.
        Now, without this Federal funding, over one and a half
    million enrollees, including many children, could lose their
    healthcare.
        Each is an American citizen, but they are treated
    differently than the constituents of every member of this
    subcommittee. Since 1967, the territories have struggled with
    inadequate Federal funding for their Medicaid programs because
    the Social Security Act capped Medicaid funding for the
    territories. So since 1978 Congress is on the record noting
    that the caps on the Medicaid programs severely affect the
    territories' health and budgets. But there has been no
    significant statutory change to this part of the Social
    Security Act in over 50--five-oh--years.
        So this is a very important hearing that I hope we are
    going to build on and take action to reverse what I am
    referring to.
        Now, because of these restrictions, the territories
    routinely run out of Medicaid funds. Over the past decade,
    Congress has voted on six separate occasions to provide stopgap
    funds to certain territories, including as recently as December
    2019.
        Except for a temporary increase in Federal funding in FY
    2020 and 2021, the funding for the territories is typically
    three to four times below what a State Medicaid program would
    receive. In the States, the Medicaid program has a flexible
    financing structure, which guarantees funding if more
    individuals enroll due to an economic downturn, a pandemic, or
    a natural disaster. For the rest of us, that is the way it
    works. But not for the territories.
        So the territories do not have any guarantee. When disaster
    strikes, the territories are forced to make hard decisions
    about coverage and services at the worst possible time. Just
    when they need it most, that is when it hurts them the most.
        Fortunately, during the ongoing COVID-19 pandemic and
    economic downturn, the territories have benefited from an
    increased Federal match for fiscal years '20 and '21. American
    Samoa, the Northern Mariana Islands, Guam, and the U.S. Virgin
    Islands received an 83 percent Federal match, and Puerto Rico's
    current Federal match is 76 percent. With this additional
    money, Puerto Rico was able to cover the cure for hepatitis C
    for Medicaid patients for the very first time, and the Northern
    Mariana Islands were able to establish an oncology center to
    provide cancer treatment locally.
        But this funding, colleagues, is going to expire on
    September 30th, which is why the territories, obviously, need a
    long-term solution to their Medicaid funding so that they too
    can meet the needs of their constituents, as we all work to
    meet the needs of ours. In Puerto Rico 85 percent of residents
    report they are worried that they will be unable to access
    healthcare if they need it. 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.
        So, if we allow the Medicaid cliff to happen, each of the
    territories would have to cut--now, listen to this--they would
    have to cut 69 to 94 percent of their Medicaid program in
    fiscal year '22. Obviously, percentages this high, we all know,
    produce dire consequences, and it would--to hundreds of
    thousands of American citizens.
        So we cannot fail to care for so many American citizens
    based solely on where they live. I think we could probably all
    agree that this is short-term thinking, except the short-term
    thinking has been around for an awfully long time, and it has
    cost the constituents of our colleagues that are with us today
    to testify, and I am so happy to welcome each one of the
    Representatives.
        My hope is that the hearing will clear a path forward to a
    long-term financing solution that fits the needs of the
    territories and our fellow Americans who are part of them. So
    thank you, and welcome to our witnesses.
        We welcome you very warmly to our subcommittee.
        [The prepared statement of Ms. Eshoo follows:]

                    Prepared Statement of Hon. Anna G. Eshoo

        In September of this year, the five U.S. territories will
    face a ``Medicaid cliff.'' I use this term because it means the
    supplementary Medicaid funding provided to the territories will
    run out. Without this Federal funding, over 1.5 million
    enrollees, including many children, could lose their
    healthcare.
        Each is an American citizen but they are treated
    differently than the constituents of every member of this
    subcommittee.
        Since 1967, the territories have struggled with inadequate
    Federal funding for their Medicaid programs because the Social
    Security Act capped Medicaid funding for the territories. Since
    1978, Congress is on the record noting that the caps on the
    Medicaid programs severely affect the territories' health and
    budgets, but there's been no significant statutory change to
    this part of the Social Security Act in over 50 years.
        This is a very important hearing that I hope we are going
    to build on and take action to reverse what I'm referring to.
        Because of these restrictions, the territories routinely
    run out of Medicaid funds. Over the past decade, Congress has
    voted on six separate occasions to provide stopgap funds to
    certain territories, including as recently as December 2019.
        Except for a temporary increase in Federal funding for FY
    2020 and 2021, the funding for the territories is typically 3
    to 4 times below what a State Medicaid program would receive.
        In the States, the Medicaid program has a flexible
    financing structure, which guarantees funding if more
    individuals enroll due to an economic downturn, a pandemic, or
    a natural disaster. For the rest of us that's the way it works,
    but not for the territories.
        The territories do not have a guarantee. When disaster
    strikes, the territories are forced to make hard decisions
    about coverage and services at the worst possible time. Just
    when they need it most, that's when it hurts them most.
        Fortunately, during the ongoing COVID-19 pandemic and
    economic downturn, the territories have benefited from an
    increased Federal match for fiscal years 2020 and 2021.
        American Samoa, the Northern Mariana Islands, Guam, and the
    U.S. Virgin Islands received an 83 percent Federal match, and
    Puerto Rico's current Federal match is 76 percent.
        With this additional money, Puerto Rico was able to cover
    the cure for hepatitis C for Medicaid patients for the very
    first time. The Northern Mariana Islands were able to establish
    an oncology center to provide cancer treatment locally.
        But this funding is going to expire September 30th, which
    is why the territories obviously need a long-term solution to
    their Medicaid funding so they too can meet the needs of their
    constituents as we all work to meet the needs of ours.
        In Puerto Rico, 85% of residents report they're worried
    that they'll be unable to access healthcare if they need it. 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.
        If we allow the Medicaid cliff to happen, each of the
    territories would have to cut 69% to 94% of their Medicaid
    program in FY 2022. Obviously, percentages this high, we all
    know, produce dire consequences and it would to hundreds of
    thousands of American citizens.
        We cannot fail to care for so many American citizens based
    solely on where they live. I think we could probably all agree
    that this is short-term thinking, except this short-term
    thinking has been around for an awfully long time. And it has
    caused the constituents of our colleagues that are with us
    today to testify, and I'm so happy to welcome each one of the
    Representatives, my hope is that the hearing will clear a path
    forward to a long-term financing solution that fits the needs
    of the territories and the Americans that are part of them.

        Ms. Eshoo. The Chair now recognizes Mr. Guthrie, who is the
    wonderful ranking member of our subcommittee, for his 5 minutes
    for an opening statement.

     OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN
               CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

        Mr. Guthrie. Thank you, Madam Chair. I appreciate that very
    much. And thank you for this important hearing, and I want to
    thank the witnesses. I want to thank my colleagues for being
    here today representing the people you represent. And I want
    to--hopefully, we can move forward on this hearing.
        So today Medicaid funding for five U.S. territories expires
    September 30th. And I am concerned the result of such an
    expiration would have a devastating impact on the residents in
    each of these territories. I am committed to working in a
    bipartisan way to find a solution that avoids this funding
    cliff.
        But, unfortunately, the two bills we are discussing today
    miss the mark and are not bipartisan.
        I want to examine how these programs are working for people
    in the territories while also improving program integrity and
    maintaining congressional oversight. We should be working
    together to achieve these goals to ultimately help these
    Americans.
        The hearing today is on the Medicaid programs in the U.S.
    Virgin Islands, American Samoa, Northern Mariana Islands, Guam,
    and Puerto Rico. The Federal Government is projected to spend
    around $3 billion on these programs this year, or roughly half
    of the annual budget of the FDA. These five programs cover a
    little over 1.3 million people, but over 90 percent of those
    are in Puerto Rico. For comparison, in my home State of
    Kentucky, about one and a half million people participate in
    Medicaid.
        This committee has a proud history of working together on
    these programs. Two years ago we passed unanimously out of
    committee a bill that would have increased funding for 4 years
    in Puerto Rico and 6 years for the other territories. These
    bipartisan extensions included new program integrity measures
    for each program to make sure Federal dollars were being spent
    on the people in these programs. Congress ended up increasing
    funding for 2 years for all five programs. So we are again here
    to examine ways to move forward.
        However, I must point out that, technically, this hearing
    is a legislative hearing. Although Congress recently passed, in
    a bipartisan way, the most substantial increase in funding ever
    to these programs, before us are two partisan bills that remove
    any guardrails on the amount of Federal spending. We anticipate
    these bills will cost tens of billions of dollars, and include
    no policy changes to address program integrity, health
    outcomes, and a framework for increased flexibility.
        Instead of this partisan approach, we should first look at
    how the bipartisan measures of increased funding and
    accountability have worked, and what measures should be
    continued.
        It is my hope that the majority will return to the
    bipartisan tradition of working together on this issue moving
    forward. Although it is unfortunate the majority chose to start
    the discussion on these programs with a partisan legislative
    hearing today, today's hearing is important to discuss the
    territories' specific needs. Too often, Congress lumps all five
    programs together. But, as we know, we have five distinct
    populations with five distinct programs, with five sets of
    challenges and program designs. Understanding the differences
    in the programs and making sure any extension considers the
    unique needs of each population will be key.
        We also want to have an open and robust conversation on the
    program integrity measures that the territories have been
    working on over the past 2 years. The Government Accountability
    Office is here today to discuss the report on the contracting
    issues Puerto Rico and the Center for Medicare and Medicaid
    Services have had with Puerto Rico's contracting practices.
        In addition to the work GAO was doing, the Department of
    Health and Human Services Office of Inspector General is also
    conducting two audits of Puerto Rico's Medicaid program.
    Working with them this spring and summer will be of paramount
    importance, as we want to be sure that any issues identified
    are addressed as we work to continue this important funding.
        Finally, I just want to reiterate my strong desire for this
    work to be bipartisan. We have seen time and time again that
    simply pouring money into something doesn't fix the underlying
    problem. We can address funding needs for U.S. territories
    while also ensuring programs better serve residents and program
    integrity measures are in place. We can do this together, and
    we can do it together like we have in the past.
        I look forward to the discussion, and I yield back.
        [The prepared statement of Mr. Guthrie follows:]

                    Prepared Statement of Hon. Brett Guthrie

        Thank you to the witnesses for being here today. Medicaid
    funding for five U.S. territories expires September 30th, and
    I'm concerned the result of such an expiration would have a
    devastating impact on the residents in each of the territories.
    I am committed to working together in a bipartisan way to find
    a solution that avoids this funding cliff, but unfortunately
    the two bills we're discussing today miss the mark and are not
    bipartisan. I want to examine how these programs are working
    for people in the territories, while also improving program
    integrity and maintaining congressional oversight. We should be
    working together to achieve these goals to ultimately help
    these Americans.
        The hearing today is on the Medicaid programs in U.S.
    Virgin Islands, American Samoa, N. Mariana Islands, Guam, and
    Puerto Rico. The Federal Government is projected to spend
    around $3 billion on these programs this year, or roughly half
    of the annual budget of the Food and Drug Administration. These
    5 programs cover a little over 1.3 million people, but over 90
    percent of those are in Puerto Rico. For comparison, in my home
    State of Kentucky, around 1.5 million people participate in
    Medicaid.
        This committee has a proud history of working together on
    these programs. Two years ago, we passed unanimously out of
    committee a bill that would have increased funding for four
    years in Puerto Rico and six years for the other territories.
    These bipartisan extensions included new program integrity
    measures for each program to make sure Federal dollars being
    spent on the people in these programs. Congress ended up only
    increasing funding for two years for all five programs, so we
    are again here to examine ways to move forward
        However, I must point out that technically this hearing is
    a legislative hearing. Although Congress recently passed, in a
    bipartisan way, the most substantial increase in funding ever
    to these programs, before us are two partisan bills that remove
    any guardrails on the amount of Federal spending. We anticipate
    these bills will cost tens of billions of dollars and include
    no policy changes to address program integrity, health
    outcomes, and a framework for increased flexibility. Instead of
    this partisan approach, we should first look at how the
    bipartisan measures of increased funding and accountability
    have worked, and what measures should be continued.
        It is my hope that the Majority will return to the
    bipartisan tradition of working together on this issue moving
    forward.
        Although it's unfortunate the Majority chose to start the
    discussion on these programs with a partisan legislative
    hearing, today's hearing is important to discuss the
    territories' specific needs. Too often Congress lumps all five
    programs together, but as we know, we have five distinct
    populations with five distinct programs with five sets of
    challenges and program designs. Understanding the differences
    in the programs and making sure any extension considers the
    unique needs of each population will be key.
        We also want to have an open and robust conversation on the
    program integrity measures that the territories have been
    working on over the past two years. The Government
    Accountability Office is here today to discuss their report on
    the contracting issues Puerto Rico and Center for Medicare and
    Medicaid Services have had with Puerto Rico's contracting
    practices. In addition to the work GAO is doing, the Department
    of Health and Humans Services Office of Inspector General (OIG)
    is also conducting two audits of Puerto Rico's Medicaid
    program. Working with them this spring and summer will be of
    paramount importance as we want to be sure that any issues
    identified are addressed as we work to continue this important
    funding.
        Finally, I just want to reiterate my strong desire for this
    work to be bipartisan. We've seen time and time again that
    simply pouring money into something doesn't fix the underlying
    problem. We can address funding needs for U.S. territories,
    while also ensuring programs better serve residents and program
    integrity measures are in place. We can do this in a bipartisan
    way like we have in the past.
        I look forward to the discussion and I yield back.

        Ms. Eshoo. The gentleman yields back. I want to say to the
    gentleman that we have worked with the minority to build this
    hearing. We worked together on the witnesses.
        Yes, there are pieces of legislation out there. We welcome
    the minority putting forth legislation and/or working with the
    two main authors of legislation, relative to the subject matter
    of our hearing.
        But this is not partisan. This is bipartisan. This is about
    American citizens. And so I look forward to hearing from them,
    and the gentleman yields back.
        I now would like to recognize Mr. Pallone, the chairman of
    the full committee, for his 5 minutes of questions.

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

        Mr. Pallone. Well, thank you, Congresswoman and Chairwoman
    Eshoo, and I know not only this is an important hearing, but
    this is something that you care very much about.
        And for--I hope I am not missing anybody, but I just wanted
    to say that I really appreciate the input from all the
    Congresspeople that represent the territories. I mean, I just
    have to say, you know, Congressman Sablan has been--I don't
    think a day goes by without him mentioning this issue to me.
        And certainly, when--I think it was in the aftermath of
    Hurricane Maria--I know we have had so many hurricanes that I
    can't even remember which--the name of it, but I think it was
    Maria, when we went down to the Virgin Islands with
    Congresswoman Plaskett, and with Jenniffer, with Congresswoman
    Gonzalez. And they were talking about this, you know, the whole
    time, how we need a permanent solution. This just can't be
    done, you know, by kicking the can down the road.
        And, of course, ever since he has been elected, Congressman
    San Nicolas has been talking to me about it, as well.
        In addition to that, you know, you have, you know, Members
    like Congressman Soto on our committee and Congresswoman
    Velazquez, who are of Puerto Rican descent, who--you know, who
    constantly bring this to our attention and want solutions.
        So, look, all of you have been so helpful, and so I am glad
    that we are having this hearing today, and all of you have an
    opportunity to express your views. It wasn't that long ago that
    we had our last hearing on how disastrous it would be for
    Medicaid funding in the territories to collapse. And I was
    proud that we were able to work together on a strong bipartisan
    bill that combined critical increases to the territory's
    funding and Federal medical assistance with FMAP, you know, for
    program integrity improvements.
        But look, we know that Medicaid in the territories has been
    chronically underfunded for decades. The consequences of this
    inequity can be seen in the crumbling health infrastructure,
    emergency restrictions on provider networks, the failure to
    offer coverage of certain lifesaving drugs, and even the debt
    crisis in Puerto Rico.
        Years of inadequate Medicaid block grants have forced the
    territories to divert more of their own dollars to ensure the
    residents have received the care that they need. And this
    funding structure has forced the territories to pay more than
    their fair share for Medicaid, much more than they would have
    to pay if they were treated like States.
        Last Congress the committee passed legislation that would
    have provided several years of increased funding and a higher
    FMAP to all the territories. Thanks to the leadership of
    Representatives Soto and Bilirakis, we were able to find common
    ground on this legislation. Unfortunately, I was very
    disappointed. At the last minute, former President Trump
    refused to support our bipartisan, bicameral agreement and
    insisted at the last minute on reducing that long-term solution
    to 2 years. And because of that, we are now once again on the
    verge of another crisis.
        I believe the stakes are too high. The consequences of
    inaction are too tragic to continue down a path of short-term
    fixes. The territories need a permanent solution to their
    Medicaid funding shortfalls. They need a solution that assures
    that they can make improvements to their programs with
    certainty and that the increased funds they are relying on will
    be there for more than a couple of years. Beneficiaries need
    certainty about the services they critically need and rely on,
    and permanent improvements to these critical programs and to
    the health of beneficiaries can only be expected if Congress
    guarantees permanent, adequate funding.
        So I am glad our colleagues from the territories could be
    here today to share their perspectives. I know that bipartisan
    committee staff recently met with health officials from the
    territories, and we have also received statements for the
    record from all the territories.
        In just over 6 months, the territories will face a
    catastrophic loss of Federal Medicaid funding that will
    jeopardize access to care. Long before that, the territories
    will have to begin the process of contingency planning to make
    the cuts necessary to address this looming fiscal cliff, and
    this would include limiting reimbursements to providers,
    reversing expansions of eligibility that provided thousands of
    residents with access to Medicaid for the first time, and
    ending coverage of life-saving medications.
        But we can't allow this to happen. We just can't allow this
    to happen. So bipartisan members of this committee fought hard
    last Congress to secure additional Medicaid funding. With that
    funding they have made tremendous progress. But that progress
    will be lost if we don't act quickly. So we are going to act.
    We want a permanent solution. We don't want to kick the can
    down the road.
        Thank you again for being here, and thank you to Chairwoman
    Eshoo for having this hearing and for all the concern that you
    have expressed and leadership on this issue.
        [The prepared statement of Mr. Pallone follows:]

                 Prepared Statement of Hon. Frank Pallone, Jr.

        Thank you, Madam Chair, for holding this important hearing.
    It wasn't long ago that we had our last hearing on how
    disastrous it would be for Medicaid funding in the territories
    to collapse. I was proud that we were able to work together on
    a strong, bipartisan bill that combined critical increases to
    the territories' funding and Federal medical assistance
    percentage (FMAP) with important program integrity
    improvements.
        While there may be differences between Republicans and
    Democrats on how best to address the Medicaid cliff, I think we
    all agree that we cannot let Medicaid funding in the
    territories collapse, especially during the COVID-19 public
    health emergency. The loss of access to healthcare would be
    devastating.
        Medicaid in the territories has been chronically
    underfunded for decades. The consequences of this historic
    inequity can be seen in the crumbling healthcare
    infrastructure, emergency restrictions on provider networks,
    the failure to offer coverage of certain life-saving drugs, and
    even the debt crisis in Puerto Rico. Years of inadequate
    Medicaid block grants have forced the territories to divert
    more of their own dollars to ensure their residents have
    received the care they needed, and it has impeded access to
    critical healthcare services for the territories' residents.
        This funding structure has forced the territories to pay
    more than their fair share for Medicaid--much more than they
    would have to pay if they were treated like States. These
    programs have been starved for decades, and unfortunately these
    are the results.
        Last Congress, this committee passed legislation that would
    have provided several years of increased funding and a higher
    FMAP to all the territories. Thanks to the leadership of
    Representatives Soto and Bilirakis, we were able to find common
    ground on this legislation. Unfortunately, I was deeply
    disappointed that, at the last minute, former President Trump
    refused to support our bipartisan, bicameral agreement and
    insisted at the last minute on reducing that long-term solution
    to 2 years. Because of that, we are now, once again, on the
    verge of another crisis.
        The stakes are too high, and the consequences of inaction
    are too tragic, to continue down a path of short-term fixes.
    The territories need a permanent solution to their Medicaid
    funding shortfalls. They need a solution that ensures that they
    can make improvements to their programs with certainty that the
    increased funds they are relying on will be there for more than
    a couple of years. Beneficiaries need certainty about the
    services they critically need and rely on. And permanent
    improvements to these critical programs and to the health of
    beneficiaries can only be expected if Congress guarantees
    permanent, adequate funding.
        I'm glad that our colleagues from the territories could be
    here to share their perspectives. I also know that bipartisan
    committee staff recently met with health officials from the
    territories, and we have also received statements for the
    record from all of the territories. Hearing directly from the
    territories, through both their elected representatives and
    their local health officials, is an important part of this
    process; and we should make sure their voices are heard.
        In just over six months, the territories will face a
    catastrophic loss in Federal Medicaid funding that will
    jeopardize access to care. Long before that, the territories
    will have to begin the process of contingency planning to make
    the cuts necessary to address the looming fiscal cliff. This
    would include limiting reimbursement to providers, reversing
    expansions of eligibility that provided thousands of residents
    with access to Medicaid for the first time, and ending coverage
    of life-saving medications. We simply cannot allow this to
    happen.
        Bipartisan members of this committee fought hard last
    Congress to secure additional Medicaid funding for the
    territories. With that funding, they have made tremendous
    progress in improving their Medicaid programs. That progress,
    however, will be lost if we don't act quickly.
        I look forward to hearing from the witnesses today, and I
    yield back.

        Mr. Pallone. I yield back. Thank you.
        Ms. Eshoo. The gentleman yields back.
        Thank you for your good words, Mr. Chairman. The Chair now
    recognizes the ranking member of the full committee, Mrs. Cathy
    McMorris Rodgers, for her 5 minutes for an opening statement.
        Mrs. Rodgers. Thank you----
        Ms. Eshoo. Oh, I am sorry.
        Mrs. Rodgers [continuing]. Madam Chair----
        Ms. Eshoo. Yes, go ahead.
        Mrs. Rodgers. Thank you----
        Ms. Eshoo. Go ahead, I am sorry.

          OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A
        REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

        Mrs. Rodgers. Great. And thanks to my friends and
    colleagues for being here today.
        As others have mentioned, increased funding for Puerto
    Rico, Guam, the Virgin Islands, Northern Mariana Islands,
    American Samoa expires September 30th. And I am committed to
    reauthorizing funding in a way that is best for the people who
    get Medicaid care in the territories. I hope that we can work
    together on this issue to ensure Medicaid is caring for our
    most vulnerable in the territories and across America.
        As I have said many times before, we should be coming
    together in a bipartisan way to modernize and improve Medicaid,
    especially for pregnant women and people with disabilities.
    However, I want to be sure that we discuss three problems I
    have with this hearing before we have a discussion about
    extending these important programs.
        First, it is important that we hear from the territories
    themselves and get to ask them questions about their programs.
    There are serious and valid concerns about how we oversee the
    Medicaid programs in the territories. If this hearing was later
    in the year, the OIG could provide an update on their audit. We
    could review Puerto Rico's report that is due in June.
        Over the last decade there has been a dramatic increase in
    the amount of Federal taxpayer dollars going to Medicaid
    programs in the territories. Are we seeing health outcome
    improvements with that spending?
        And if we don't have the data to answer that question,
    there is a gap that we need to address in this reauthorization.
        Second, we are going to a straight legislative hearing on
    two partisan bills. These bills are only introduced--or only
    have Democrat cosponsors, and they were drafted, unfortunately,
    without the input from the Republicans. These bills do not
    address program integrity or getting better data on healthcare
    outcomes for those that are in Medicaid.
        In addition, the last time this committee met on these
    programs, it reported out bipartisan legislation. It is our
    hope that the majority will work with us on moving forward in a
    bipartisan way.
        And let's not forget that this committee--who moved a
    bipartisan bill out of committee 2 years ago that would have
    funded Puerto Rico for 4 years and the other territories for 6
    years--that work should be our model of how to proceed this
    year.
        My third and final concern is not related to the
    territories but to request that we do some more work on
    additional challenges in the Medicaid space. We should be
    investigating the devastating reports about New York
    underreporting COVID-19 deaths in nursing homes. Families
    deserve justice.
        As I wrote to the majority 2 weeks ago, we should also be
    working together to understand more about the troubling reports
    regarding certain States undercounting and potentially
    falsifying reports of COVID-19 deaths in nursing homes. It
    appears that a few States took actions early that increased the
    COVID-19 crisis in nursing homes.
        Washington State was one of the first States with an
    outbreak of COVID-19, and nursing homes were especially hard
    hit. Washington State provided additional Medicaid funds to
    nursing homes accepting COVID-19 patients. We should
    investigate whether the incentive of increased Medicaid dollars
    made the crisis worse.
        This is an important hearing, and I am disappointed that we
    will not hear or get to ask the questions that I believe need
    to be asked. Instead, we are going straight to a legislative
    hearing on two partisan bills when we should be gathering
    facts, working together on legislation to continue Federal
    support of these vital programs.
        I also encourage the majority to schedule a hearing as soon
    as possible to learn more about the tools that are available to
    ensure States accurately report nursing home deaths that COVID-
    19 or any infectious disease may have, to ensure that future
    pandemics and Medicaid dollars aren't used as an incentive that
    ends up further endangering nursing home patients. We owe our
    families and those who lost someone to COVID-19 nothing less.
        And with that, I yield back.
        [The prepared statement of Mrs. Rodgers follows:]

               Prepared Statement of Hon. Cathy McMorris Rodgers

    INTRO
        Thank you to the witnesses for being here.
        Increased funding for Puerto Rico, Guam, Virgin Islands,
    Northern Mariana Islands, and American Samoa expires September
    30th.
        I am committed to reauthorizing funding in a way that is
    best for the people who get Medicaid care in the territories.
        I hope that we can work together on this issue and to
    ensure Medicaid is caring for our most vulnerable in the
    territories and across America.
        As I've said many times before, we should be coming
    together in a bipartisan way to modernize and improve
    Medicaid--especially for pregnant women and people with
    disabilities.
        However, I want to be sure that we discuss three problems I
    have with this hearing before we have a discussion about
    extending these important programs.
    WITNESSES AND LACK OF INFORMATION
        First, it's important that we hear from the territories
    themselves and get to ask them questions about their programs.
        There are serious and valid concerns about how we oversee
    the Medicaid programs in the territories.
        If this hearing was later in the year, the OIG could
    provide an update on their audits and we could review Puerto
    Rico's report that is due in June.
        Over the last decade, there has been a dramatic increase in
    the amount of Federal taxpayer dollars going to Medicaid
    programs in the territories.
        I want to know, are we seeing health outcome improvements
    with that spending?
        And, if we don't have the data to answer that question,
    that is a gap we should address in this reauthorization.
    CONCERNS WITH LEGISLATION
        Second, we are going straight to a legislative hearing on
    two partisan bills that were drafted without any input from the
    Minority.
        These bills do not address program integrity, or getting
    better data on healthcare outcomes for those that are in the
    Medicaid program.
        In addition, the last time this committee met on these
    programs, it reported out bipartisan legislation.
        I would request that the Majority work with us on this
    moving forward..
        Let's not forget that it was this committee who moved a
    bipartisan bill out of committee two years ago that would have
    funded Puerto Rico for four years and the other territories for
    six years.
        That work should be our model of how to proceed this year.
    NURSING HOME DEATHS
        My third and final concern is not related to the
    territories but to request that we do some work on additional
    challenges in the Medicaid space.
        We should be investigating the devastating reports about
    New York underreporting COVID-19 deaths in nursing homes.
        Families deserve justice.
        As I wrote to the Majority two weeks ago.
        ... we should also be working together to understand more
    about the troubling reports regarding certain States
    undercounting--and potentially falsifying--reports of COVID-19
    deaths in nursing homes.
        It appears that a few States took actions early on that
    exacerbated the COVID-19 crisis in nursing homes...
        ...Washington was one of the first States with an outbreak
    of COVID-19 and nursing homes were particularly hard hit.
        Washington State provided additional Medicaid dollars to
    nursing homes accepting COVID-19 patients. We should
    investigate whether the incentive of increased Medicaid dollars
    made this crisis worse.
    CLOSING
        This is an important hearing, and I'm disappointed that we
    will not hear from, and get to ask questions of, the
    territories themselves.
        We should be.
        Instead, we are going straight to a legislative hearing on
    partisan legislation.
        ...when we should be gathering the facts and working
    together on legislation to continue Federal support for these
    vital programs.
        I also implore the Majority to schedule a hearing as soon
    as possible to learn more about what tools are available to
    ensure States accurately report nursing home deaths from COVID-
    19 or any infectious disease, and to ensure in future pandemics
    Medicaid dollars aren't used as an incentive that ends up
    further endangering nursing home patients.
        We owe the families of who lost someone to COVID-19 nothing
    less.

        Ms. Eshoo. The gentlewoman yields back.
        I just want to say to my Republican colleagues, you know,
    you can keep saying that a hearing is partisan, it is fine, but
    it is kind of a broken record.
        Each one of you are legislators. You have a keen interest
    in this, as you do.
        [Audio malfunction] territories to start--to kick off our
    hearing, each one of them representing a territory. Just as we
    pride ourselves on knowing our constituents and what their
    needs are, so do they. So it is a real pleasure to welcome each
    witness.
        First, the Honorable Gregorio Camacho Sablan, a longtime
    friend and Member of Congress representing the Commonwealth of
    the Northern Mariana Islands, welcome to you, my friend.
        The Honorable Aumua Amata Coleman Radewagen, Member of
    Congress, and representing American Samoa, welcome to you.
        The Honorable Stacey Plaskett, Member of Congress
    representing the U.S. Virgin Islands, thank you for being with
    us, Stacey, and it is wonderful to have you with us.
        The Honorable Jenniffer Gonzalez-Colon, Member of Congress
    representing Puerto Rico.
        And the Honorable Michael F.Q. San Nicolas, a Member of
    Congress representing Guam.
        So a warm welcome from the entire subcommittee to each one
    of you. It is really an honor to have you with us today.
        So we are going to begin with Congressman Sablan. You are
    recognized for 5 minutes, and you need to unmute so we can all
    hear every word you want to share with us.

        STATEMENT OF DELEGATE GREGORIO KILILI CAMACHO SABLAN, A
     REPRESENTATIVE IN CONGRESS FROM THE TERRITORY OF THE NORTHERN
      MARIANA ISLANDS; DELEGATE AUMUA AMATA COLEMAN RADEWAGEN, A
       REPRESENTATIVE IN CONGRESS FROM THE TERRITORY OF AMERICAN
        SAMOA; DELEGATE STACEY E. PLASKETT, A REPRESENTATIVE IN
      CONGRESS FROM THE TERRITORY OF THE VIRGIN ISLANDS; RESIDENT
      COMMISSIONER JENNIFFER GONZALEZ-COLON, A REPRESENTATIVE IN
       CONGRESS FROM THE TERRITORY OF PUERTO RICO; AND DELEGATE
     MICHAEL F. Q. SAN NICOLAS, A REPRESENTATIVE IN CONGRESS FROM
                         THE TERRITORY OF GUAM

            STATEMENT OF HON. GREGORIO KILILI CAMACHO SABLAN

        Mr. Sablan. Good morning. Good morning and thank you to
    Chairs Pallone and Eshoo and Ranking Members McMorris Rodgers
    and Guthrie for holding today's hearing, ``Averting a Crisis:
    Protecting Access to Healthcare in the United States
    Territories.''
        It feels like Groundhog Day. Not 2 years ago, the Medicaid
    director from the Marianas testified before this committee,
    along with their counterparts from other insular areas, on
    averting the crisis they faced with the end of Obamacare
    Medicaid money.
        The subcommittee did avert that crisis, and it is through
    your work, Public Law, 116-94, and you provided the Marianas
    Medicaid with $60 million in fiscal year 2020 and fiscal year
    2021. This funding made a huge difference, especially because
    the economic effects of this unexpected pandemic doubled
    medical enrollment in the Marianas from about 16,000 then to
    32,000 today.
        But the money you helped provide was only a temporary fix.
        Could we have the first slide, please?
        [Slide.]
        Mr. Sablan. Come October 1st, funding for Medicaid in the
    Northern Marianas will drop back to the statutory cap, $7.2
    million, or an 88 percent reduction. This is the crisis we now
    must avert.
        My proposal in H.R. 265 is simply to repeal the statutory
    cap. Sixty Members have cosponsored my proposal, including
    several committee chairs and the two Republican Members whose
    districts are affected. So my bill is bipartisan.
        Lifting the cap may seem an invitation to spend, but in
    fact the $60 million provided in both fiscal 2020 and 2021 have
    proven an accurate estimate of actual need over the last 2
    years. And that amount lines up closely with a 2018
    Congressional Budget Office estimate that permanently lifting
    the cap for the Marianas will only result in a $15 million
    annual increase in spending.
        That relatively modest investment has already proven its
    worth. Not only was the Marianas Medicaid program able to
    handle the sudden increase in enrollment as people lost income
    during the pandemic, the certainty of funding allowed our only
    hospital, which depends on Medicaid for 44 percent of revenues,
    to invest in capacity, saving money and increasing quality of
    care.
        Could we have the second slide, please?
        [Slide.]
        Mr. Sablan. Knowing Medicaid funds would be available, the
    hospital established an oncology center. Now, instead of
    sending cancer patients off island to Guam or Hawaii, most can
    get treatment in the Marianas. And look at the results: off-
    island referrals down by 90 percent. Not only are we saving
    transportation and housing costs for off-island referrals, but
    fewer people sick with cancer must leave their families and
    face the rigors of travel. What a virtual circle.
        By investing in Medicaid, Congress has lowered costs and
    improved care. How much more the Marianas could do if we had
    continued certainty of adequate Medicaid funding.
        Let me note it is not just Medicaid patients who have
    benefited from this oncology center. Everyone in the community,
    even those with private insurance, are better off because of
    the funding Congress, you, provided in Public Law 116-94.
        But with greater funding comes greater responsibility. And
    Public Law 116-94 required the Marianas and other insular areas
    to move towards the same program integrity standards that your
    States all face. And you will see in testimony our Medicaid
    agency submitted for today's hearing, the Marianas is meeting
    the program integrity requirements attached to the funding in
    Public Law 116-94, to the satisfaction of the Centers for
    Medicare and Medicaid Services. And this determination by CMS
    did not come in the last 2 months; it was made last year by a
    Republican administration, further demonstrating the Marianas'
    commitment to program integrity.
        Our legislature passed Public Law 21-35 last year, giving
    our Medicaid director the authority to transfer funding as
    necessary to ensure compliance and program integrity measures
    are always sufficiently funded. It is said she now has more
    reprogramming authority than our Governor.
        In closing, I suggest we rename today's hearing. Instead of
    saying we are here to avert a crisis, why don't we acknowledge
    all the positive benefits that resulted from the increased
    funding we provided less than 2 years ago? We improved the
    quality of healthcare in the Marianas for those insured by
    Medicaid and for the whole community. We helped reduce costs.
    We are increasing the program integrity that is so important to
    us all.
        So let us not say today's hearing is to avoid a crisis. Let
    us say we are here to seize an opportunity to lift the cap on
    Medicaid funding in the Marianas so we can continue the
    progress we have made.
        Thank you very much again, Madam Chair, for holding today's
    hearing. Thank you, everyone, for giving us an opportunity to
    represent our islands in Congress.
        [The prepared statement of Mr. Sablan follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo. Thank you----
        Mr. Sablan. I yield back.
        Ms. Eshoo. Thank you, Congressman Sablan, and from your
    lips to every Member's ears. Thank you for joining us today. It
    is always wonderful to be with you. You are a friend to all of
    us.
        It is now a pleasure to recognize Congresswoman Radewagen
    for 5 minutes.
        We welcome you again. We are delighted that you are here,
    and you need to unmute so we don't miss a word that you want to
    share with us.

            STATEMENT OF HON. AUMUA AMATA COLEMAN RADEWAGEN

        Mrs. Radewagen. Talofa lava. Hello, and good afternoon.
    Thank you, Chairwoman Eshoo and Ranking Member Guthrie, as well
    as full committee Chairman Pallone and my friend, Ranking
    Member McMorris Rodgers, for soliciting the views of American
    Samoa on our Medicaid program.
        And thank you for consideration of mine and my colleagues'
    bill on improving the insular areas' Medicaid programs, the
    Insular Areas Medicaid Parity Act, which will provide stable,
    permanent funding, lift the caps, and maintain an increase to
    FMAP for the territories.
        I know every State and every territory has their unique
    challenges, as do we. But factually, we are the most remote
    U.S. jurisdiction in the Medicaid program, almost 10,000 miles
    away, south of the equator, and have not had any commercial air
    service to our territory almost 1 year, not since March 23rd,
    2020. That was the last commercial flight from Honolulu to
    American Samoa.
        Hundreds are still stranded and going through a monthlong
    quarantine process--2 weeks in Hawaii, 2 weeks in Pogo Pogo--
    just to get home after being restricted elsewhere in the
    country. We have had two of six emergency charters from our
    local government completed, with four more scheduled over the
    next 3 months. Our health services and only hospital simply
    cannot handle a sudden influx of thousands of new arrivals at
    this time.
        Our newly elected Governor, Lemanu P. S. Mauga, and
    Lieutenant Governor Talauega E. V. Ale have made a submission
    through their Medicaid director providing updated data on the
    current capacity, utilization, and program integrity efforts to
    the committee and will be providing additional information in
    the days and weeks ahead.
        We appreciate the temporary increase in our FMAP, which has
    been helpful, but we need improvement to our only hospital,
    which is over 50 years old, in order to expand and improve
    services and attract broader physician services. And we need
    more reliable and stable funding than just every 2 years. Our
    residents and veterans face challenging logistics and most
    often need to travel to Hawaii for more serious care. And the
    pandemic has shown us that it has become a limited option to
    our sick during this crisis. So improvements to our local
    hospital are needed.
        In normal circumstances, our people have only two flights
    per week to get to Hawaii. That limitation would be recognized
    alone as an emergency in most jurisdictions. Some of my
    constituents who are stranded are stranded because they were
    off-island receiving care that they could not get in the
    territory.
        So services were reduced due to our closed-border policy,
    but that policy saved lives and prevented COVID from arriving
    in American Samoa. Today we are the only part of the United
    States that is COVID free, absolutely.
        So I ask the committee to maintain our current emergency
    matching level, eliminate the annual ceiling on Federal
    financial participation referred to as a Section 1108 cap or a
    Section 1108 allotment. Congress needs to address the funding
    cliff for the territories. Not doing so would spell financial
    and medical disaster to our people.
        During the pandemic emergency we have been adjusted like
    other jurisdictions, with an additional 6.2 percent Federal
    cost share, so we are at an 89.2 percent FMAP. This has been
    welcomed, as we are indeed very much in a continued emergency
    state.
        And I would argue our program and hospital capabilities
    have been in an emergency state long before the pandemic. The
    Army Corps of Engineers recently did a study and report to
    Congress on the state of the hospital, indicating that it
    needed a substantial, if not wholesale, modernization, update,
    or total replacement. The Army Corps found our LBJ Hospital in
    a state of failure and disrepair due to age and projected
    repair. And replacement costs between 161 to 900 million
    dollars, depending on minimum modernization or total
    replacement.
        American Samoa's Section 1108 Medicaid allotment for fiscal
    years 2020 and 2021 were raised substantially, from about 12.5
    to 86 million, with a temporary FMAP increase from 55:45 to
    almost 90:10. We were able to stretch our local matching funds.
    With an improved hospital infrastructure, we could utilize even
    more and potentially reach and exceed our current cap for the
    next few years. Stable, multiyear funding with caps raised will
    be key to that progress.
        We do not have sizable tourism or diversified businesses
    and economies like the other territories. The local government
    and tuna cannery account for nearly half of local jobs, and our
    small businesses have taken a huge hit with the island closed
    off. But our young people continue to serve in record numbers
    in the armed services, with record per capita enlistments in
    the Army, and our veterans give so much back to our community.
    We need to carry them through with an improved hospital VA
    facility.
        I look forward to working with members of the Energy and
    Commerce Committee on our critical Medicaid and hospital
    funding needs this year.
        Thank you, Chairwoman Eshoo, I yield back.
        [The prepared statement of Mrs. Radewagen follows:]
       [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo. The gentlewoman yields back, and the Chair
    thanks her for her passionate testimony. We all could hear it
    in your voice, what the incredible needs are. And we thank you
    for being with us today.
        I am going to go over to the Capitol to vote, and place the
    committee in the hands of Mr. Sarbanes, who I am sure is going
    to do a great job.
        So over to you, and I believe our next witness is
    Congresswoman Plaskett.
        And thank you for being with us, our friend.
        And thank you, John Sarbanes, for taking the--chairing the
    hearing until I get back. I appreciate it.
        Voice. This meeting is being recorded.

                  STATEMENT OF HON. STACEY E. PLASKETT

        Ms. Plaskett. Thank you so much, Chairwoman Eshoo and
    Ranking Member Guthrie. I also want to thank the interim chair,
    Mr. Sarbanes, for controlling the time right now.
        Members of the subcommittee, thank you for allowing me the
    opportunity to present a brief statement of the views of the
    healthcare concerns of the U.S. Virgin Islands as it relates to
    the work of this committee in the 117th Congress.
        The Virgin Islands will need significant investments in
    healthcare in this session. Even before our severe hurricane
    disasters of 2017 and the COVID-19 pandemic, the healthcare
    systems in the territories were under great stress.
        Specifically regarding Medicaid, the arbitrarily high local
    match required of U.S. territories by Federal law imposes
    severe and unsustainable financial demands. Each of the
    territories tried earnestly to resolve this with little success
    until, beginning in 2018 in the wake of the unprecedented
    disasters, more equitable matching rates were allowed on a
    temporary basis.
        In addition, while overall Federal Medicaid funding to the
    States and the District of Columbia is open-ended, Medicaid in
    U.S. territories is unfairly subject to annual Federal funding
    caps. Once the cap is reached, the territory must assume the
    full cost of Medicaid services.
        While the capped Federal funding has been supplemented by
    additional block grants since 2011, beginning with the
    Affordable Care Act and continuing through the Further
    Consolidated Appropriation Act of 2020 and the Families First
    Corona Response Act, the Virgin Islands and all other
    territories face yet another cliff on September 30th, as has
    been discussed. And the Federal matching funds, the FMAP, will
    drop precipitously, by over 20 percentage points. Tens of
    thousands of residents of my district will lose access to
    healthcare unless Congress takes action to eliminate the
    Federal Medicaid fiscal cliff in the territories once and for
    all.
        Listen, to have us continually come and beg you for money
    to be treated equitably is absolutely unfair. And all of us, as
    Members of Congress, all of you on this committee, should be
    embarrassed that you have Members of Congress asking you to be
    treated fairly. This is a bipartisan request. If you have seen
    all of the Members of the territories, we are not just
    Democrats. We are Republicans and Democrats, and we are all
    asking for the same thing. So I do not see why this becomes a
    question of Republicans and Democrats not all agreeing to what
    your colleagues, who are Democrat and Republican, are asking of
    you.
        We cannot vote on the floor when final passage on this bill
    comes. But you know what the will of your colleagues are on
    both sides of the aisles. And the fact that you continually
    make us request this is frustrating, and it is demeaning to us,
    as individuals, as Americans, to have to continually ask for
    this.
        I am grateful that the committee took action to address the
    Medicaid cliff in the past to provide an additional stream of
    Medicaid funds from my home in the Virgin Islands and the other
    territories. That Medicaid--normally is only about $19 million.
    It increased to 128.7 million, and all of that money has been
    used by our district. All that money was needed.
        I have here and ask unanimous consent to submit for the
    record the written testimony of Michal Rhymer-Browne, the
    assistant commissioner of our Department of Human Services, who
    testified before the House Committee on Energy and Commerce on
    June 20th of 2019.
        Mr. Sarbanes [presiding]. Without objection, that will be
    entered into the record. Thank you.
        [The information appears at the conclusion of the hearing.]
        Ms. Plaskett. Thank you. And in that testimony, in answer
    to the ranking member of the full committee Mrs. Rodgers'
    question, we used that money to put in place compliance as well
    as oversight over that funds. We have already testified that we
    have done that.
        There are pages of points that she makes, putting the goal
    for IAP opportunity to support the Medicaid program, the data
    analytical exchange, having--submitting IAPD to the U.S.
    Department of Health and Human Services, having MOUs with the
    Department of Justice to create a Southeastern Unified Program
    Integrity Project to ensure that this money is used correctly,
    because we have no intentions for the money not to go to the
    people who need it most.
        I have written testimony, and I will submit that for the
    record, as well. But again, I am asking for the support that
    you see of the Members of the territories who represent, you
    know, territories both in the Pacific as well as in the
    Caribbean, who are all asking for the same thing for the almost
    4 million Americans who reside there.
        Thank you, and I yield back.
        [The prepared statement of Ms. Plaskett follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Sarbanes. Thank you very much, Congresswoman Plaskett.
        Resident Commissioner Gonzalez-Colon, you are now
    recognized for 5 minutes. Thank you.

               STATEMENT OF HON. JENNIFFER GONZALEZ-COLON

        Miss Gonzalez-Colon. Thank you, Chair.
        Total Federal funding for the territorial Medicaid programs
    has been inadequate to meet the healthcare expenditures for
    patients to receive effective diagnosis, treatment, and care.
    And as a result of that, territories have had to finance a
    proportionally larger share of the program than any of the 50
    States, just as the Member just said.
        Puerto Rico, in this case, has received funds to supplement
    those provided by the Social Security Act to pay for this
    Medicaid program. These funds have been characterized by their
    temporary nature and the need for their renewal on a crisis-to-
    crisis basis, and for the inequity in the reimbursement
    formula, which is consistently lower in amount with a lower
    FMAP when compared similarly with the States.
        Americans in Puerto Rico should be able to enjoy a Medicaid
    program with the same standards and benefits enjoyed by
    Americans elsewhere, and Congress needs to eliminate the
    artificial funding limits that have forced, in my case, Puerto
    Ricans, both beneficiaries and providers, to leave their homes
    and island's healthcare system.
        Just in 2019 Puerto Rico sought additional Federal funds to
    supplement the insufficient Medicaid cap, which at the time
    provided only for approximately 10 percent of the program total
    cost, a program which covers only 10 percent--10 of the 17
    Medicaid mandatory benefits in Puerto Rico.
        We also requested additional funds for measures which were
    indispensable for the continued operation of the program and
    for the implementation of additional program integrity measures
    which we have been successfully implementing, and I think it--
    that is important to note. Those initiatives took the 2019
    baseline Medicaid cost from $2.8 billion to $3.5 billion for
    the years 2020 and 2021 and were accompanied by an increase of
    investment from 55 percent to 76 percent.
        And those initiatives were implemented with $350 million to
    increase the eligibility from 40 percent to 85 percent of the
    Federal poverty level, just to cover approximately 200,000
    additional beneficiaries with annual income of less than
    $20,000 for a family of four a year, $190 million to increase
    reimbursements to Medicare Part B providers and physicians with
    capitated arrangement.
        And I need you to know that this increase of 70 percent of
    the Medicare fee schedule, which is more about 60 percent of
    the national average Medicare reimbursement, has been
    instrumental in helping physicians just to stay afloat during
    this pandemic.
        Many of the mechanisms included in the CARES Act to provide
    immediate cash flow to healthcare providers in Puerto Rico
    receiving few--were ineffective with our providers. And why?
    Because they were receiving fewer dollars per capita from the
    provider relief fund than any other State, than any other
    territory, with an example of a per capita distribution on the
    island of $23.98, compared to the national per capita of
    $174.14.
        One hundred sixteen million dollars to increase hospital
    reimbursement to at least 90 percent of the Medicare fees
    schedule, just to compensate for Medicaid beneficiaries'
    pension losses, given that the hospitals in Puerto Rico are
    ineligible for Medicaid DHS payments.
        Thirty-eight million dollars to cover hepatitis C
    treatments, chronic liver disease patients.
        And to this day, our island is on track to spend the total
    incremental amount for the sustainability measures by the end
    of the fiscal year.
        The additional funding that we were provided in 2019, just
    as the chairwoman explained, will expire on September 30th. And
    the amount of Federal funds for Puerto Rico's Medicaid program
    will revert to approximately $380 million, or just about 10
    percent of the program's current total cost.
        And this is the reason we need to act swiftly to prevent
    the territories and Puerto Rico's Medicaid program from
    becoming underfunded and to provide sufficient funding to allow
    for a smooth transition into the next fiscal year without
    cutting benefits, lowering provider payments, or withdrawing
    coverage for hundreds of thousands of current beneficiaries in
    the middle of a pandemic.
        And that is the reason the Governor of Puerto Rico just
    asked Congress for additional funds for 2020 and beyond, and to
    achieve a greater degree of equality in programs that are
    crucial to healthcare in the island, programs in which Puerto
    Rico does not have the financial capacity to bear itself, and
    which are usually provided by Medicaid in the States, such as
    the nonflu adult vaccination recommended by the CDC, the
    nonemergency transportation, and diabetes, among many others.
        I just urge you and all the members of this committee--I
    mean, this committee went to Puerto Rico and had roundtables
    with professionals and with the providers and has addressed
    this issue in the past, in 2017, in 2018, 2019, 2020. And this
    is time to do it again. Make the funding available for the
    territories. This is a priority for millions of Americans who
    depend on it for our healthcare.
        And I just want to say thank you for the invitation to
    testify, and I yield back.
        [The prepared statement of Miss Gonzalez-Colon follows:]
       [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Sarbanes. Thank you very, very much for your testimony.
        Congressman San Nicolas, you are now recognized for 5
    minutes. Please remember to unmute.

              STATEMENT OF HON. MICHAEL F. Q. SAN NICOLAS

        Mr. San Nicolas. Thank you, Mr. Chairman, honorable members
    of the esteemed Energy and Commerce Committee, Chairman Frank
    Pallone, Ranking Member Cathy McMorris Rodgers, Health
    Subcommittee Chairwoman Anna Eshoo, and Ranking Member Brett
    Guthrie.
        Let me open by expressing my thanks for your graciousness
    in inviting Guam and our territory to testify at today's
    hearing, thanking all of you for your leadership in passing
    Public Law 116-94, which temporarily increased the Federal
    Medicaid assistance percentage, FMAP, for Guam to its current
    rate of 83 percent Federal match to 17 percent local match from
    the prior 55 percent Federal match and 45 percent local
    Medicaid matching formula, grossly insufficient for communities
    like Guam, with among the highest per capita poverty levels in
    the country.
        Additionally, prior to Public Law 116-94, the pool of
    available matching funds for Guam was limited to approximately
    $18 million. And with the sunset of these laws, it will revert
    to $19.2 million in fiscal year 2022. In the interim, Public
    Law 116-94 has increased the pool of available funds to
    approximately $130 million.
        The whole point of FMAP and a proper pool of Federal
    matching funds is to enable a formulaic basis for our Federal
    Government to be able to support the Medicaid program as it is
    intended. Common sense would assume that, if the Medicaid
    program is intended to help those of limited resources, similar
    logic will be applied to the FMAP and Medicaid cap in
    communities of limited resources to fund Medicaid itself.
        With Public Law 116-94, such progress towards basic
    equality for United States territories has been transformative
    for us in our Medicaid programs in its ability to reach
    Americans as intended under the law. The current temporary $130
    million pool at an 83:17 match translates into a Medicaid
    program funded at approximately $156 billion overall for Guam,
    which is $3,612 per Medicaid enrollee, based on our fiscal year
    2020 levels of enrollment at 43,185 people, and a population of
    170,000.
        Assuming a static level of enrollment and a reversion to
    FMAP and capped levels and the Medicaid cliff, the amount
    available per Guam Medicaid enrollee drops precipitously to
    $757, from 3,612 to 757, a drop of more than 79 percent. As
    evidently unsustainable as this is, a drill-down of the
    implications of this bleak outlook only prove it more so.
        First, even at the current elevated levels, Guam's per-
    enrollee amount of 3,612 is still 32 percent lower than our
    next-lowest high-data usability jurisdiction. And even today's
    elevated levels under Public Law 116-94 do not reflect per
    capita equity.
        Second, Medicaid cliff aversion means greater local funding
    needs to be expended for less Federal match under current
    circumstances. At $18 million local funds, or approximately $8
    million, would fund that program entirely, whereas the same $8
    million in local funding would result in more than $47 million
    in program healthcare, a difference of over 62 percent.
        Third, Medicaid cliff aversion means a return to Medicaid-
    induced medical cannibalism for Guam, with lower caps and lower
    FMAP leaving Guam to fund Medicaid at a higher matching rate,
    with a smaller pool, and ultimately picking up 100 percent of
    the total costs beyond $750 per enrollee. Such medical
    cannibalism materializes in deferred maintenance of our
    facilities and equipment, which today have ballooned our Army
    Corps of Engineer estimates for a suitable hospital to over
    $700 million, due to systemic underfunding of our healthcare
    system. Medical cannibalism means delayed vendor payments, with
    an underfunded healthcare system stretching vendor payments to
    90 days and beyond, resulting in exponentially higher risk-
    based pricing.
        Further, payment uncertainties implode Medicaid service
    provider environments. Private healthcare operators are
    unwilling or unable to accept Medicaid-eligible patients due to
    unsustainable delays in Medicaid and indigent receivables.
        And finally, let us not forget that historic Medicaid
    inequity is but one of many Federal inequities that have
    exacerbated healthcare in Guam and in our territories. We do
    not have supplemental security income on Guam, leaving our
    disabled without a basic level of support and depriving our
    community of a pool of resources to fund the operations of
    medical service providers for those SSI eligible.
        We do not have the Affordable Care Act and its
    corresponding Federal subsidies, leaving many of our people
    uninsured and underinsured. We must work to also remedy these
    healthcare gaps for our Americans on Guam to truly build an
    equitable healthcare system.
        The only solution equitable for Americans in Guam is actual
    equity. Let us complete the work of Public Law 116-94 by
    permanently closing the territorial and Guam Medicaid gap with
    FMAP levels concurrent with the rest of the country and lifting
    of the Medicaid cap also concurrent with the rest of the
    country.
        Thank you, and God bless the United States, Tribes, and
    territories of America.
        [The prepared statement of Mr. San Nicolas follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Sarbanes. Thank you very much, Congressman San Nicolas,
    and I want to thank all of my colleagues, our colleagues, for
    their passionate testimony. There is no passion greater than
    fighting for your constituents, and certainly that was evident
    today. So thank you all for being with us.
        We are now going to turn to a second panel of witnesses on
    this very important issue and the challenges that are faced in
    the territories: Dr. Anne Schwartz, who is the Executive
    Director of the Medicaid and CHIP Payment and Access
    Commission; and Ms. Carolyn Yocom, Director of Health Care for
    the Government Accountability Office.
        So we are looking forward to hearing from both of you on
    this topic.
        Dr. Schwartz, you are now recognized for 5 minutes. Please
    remember to unmute, thank you.

       STATEMENT OF ANNE L. SCHWARTZ, Ph.D., EXECUTIVE DIRECTOR,
    MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION, AND CAROLYN L.
     YOCOM, DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY OFFICE

                  STATEMENT OF ANNE L. SCHWARTZ, Ph.D.

        Dr. Schwartz. Thank you, and good afternoon, members of the
    Health Subcommittee. I appreciate the opportunity to share
    MACPAC's work as this body considers next steps in Medicaid
    financing for 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 on issues affecting these
    programs. I want to note that we do not conduct oversight or do
    audits.
        Medicaid and CHIP play a vital role in providing access to
    healthcare 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, territories operate under similar Federal rules as
    States and are subject to oversight by CMS.
        It is frequently said that, if you have seen one Medicaid
    program, you have seen one Medicaid program, and this is
    because, despite common rules, States have a lot of flexibility
    in how they manage their programs. But for the purposes of the
    hearing today, it is important to note both that territory
    Medicaid programs differ from the States' and that they also
    differ from each other. And 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 you can find factsheets on the MACPAC website
    describing each territory's policies related to eligibility,
    benefits, delivery system, data and reporting, quality, and
    program integrity. But the most important point I want to
    underscore today 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 funding referred to as the Section 1108 cap or
    allotment. Territories receive a relatively small, set amount
    of Federal funding each year regardless of changes in
    enrollment and use of services. And in comparison, States
    receive Federal matching funds 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, in order to reflect States' differing abilities to
    fund Medicaid from their own revenues. If the FMAPs for the
    territories were set using the formula used for the States, the
    matching rate for all five territories would be much higher
    and, for most, the maximum of 83 percent.
        Now, Congress has stepped in at multiple points with fiscal
    relief, notably in the consolidated appropriations bill passed
    in December 2019, which increased the 1108 allotments for
    fiscal year 2020 and 2021, and temporarily raised the FMAP to
    76 percent for Puerto Rico, and 83 percent for the other
    territories. This legislation also directed the territories to
    make certain programmatic improvements related to data
    reporting and programming integrity. And, to our knowledge,
    they have either addressed these issues or made important
    progress.
        The Families First Coronavirus Relief Act enacted last
    March further increased the 1108 allotments and extended to the
    territories a 6.2 percentage point increase in the FMAP through
    the end of the quarter in which the public health emergency
    ends. This is the same FMAP increase as received by the States.
        So, as a result of these actions, all five territories now
    have enough money to cover program expenses through the end of
    this fiscal year. However, without additional congressional
    action, we anticipate that they will all experience funding
    shortfalls at some point in fiscal year 2022. And at this time
    MACPAC does not have sufficient data on actual or projected
    spending to comment on the exact date of exhaustion.
        In the face of such a shortfall, the territories will have
    to make tough decisions. The options before them, including
    funding Medicaid entirely with unmatched local funds--a
    scenario we think is unlikely--cutting services, reducing or
    suspending provider payments, or some combination of these
    strategies. It is worth noting that territories, like States,
    are currently prohibited from decreasing eligibility standards
    or just enrolling beneficiaries if they accept the increased
    FMAP provided in the Families First legislation.
        The history of responding to crises with a short-term
    infusion of funds has caused a great deal of uncertainty. And
    while an additional time-limited allotment of funds would
    certainly prevent a fiscal cliff, it would ensure that, in the
    short term, a continued delivery of services, but it would not
    address the underlying challenges with a financing structure
    that make it difficult for territories to plan, manage, and
    sustain long-term, reliable access to care for Medicaid
    beneficiaries residing in these territories.
        Thank you for the opportunity to share MACPAC's work, and I
    am happy to answer any questions.\1\
    ---------------------------------------------------------------------------
        \1\ Dr. Schwartz's prepared statement has been retained in
    committee files and is available at https://docs.house.gov/meetings/IF/
    IF14/20210317/111335/HHRG-117-IF14-Wstate-SchwartzA-20210317.pdf.
    ---------------------------------------------------------------------------
        Mr. Sarbanes. Thank you very much. I appreciate that, you
    were exactly 5 minutes. Well done.
        Ms. Yocom, you are now recognized for 5 minutes. Please
    remember to unmute yourself. Thanks very much for being here.

                     STATEMENT OF CAROLYN L. YOCOM

        Ms. Yocom. My pleasure. Chairwoman Eshoo, Ranking Member
    Guthrie, and members of the subcommittee, I appreciate the
    opportunity to discuss GAO's most recent work looking at the
    Medicaid program in Puerto Rico.
        My remarks today focus on key findings from our February
    report that evaluated Federal oversight of Puerto Rico's
    Medicaid contracting process. I am going to focus on our
    findings as they relate to Puerto Rico's contracting reform
    plan and then also discuss some additional actions needed to
    improve Medicaid program oversight.
        Contracting is central to many States' and territories'
    Medicaid programs, and effective contracting relies on
    competition. Competition can reduce costs, improve contractor
    performance, curb fraud, and promote accountability. Through an
    open, competitive process, States and territories can evaluate
    and select contractors who provide the greatest value to their
    Medicaid programs.
        Puerto Rico's plan to reform Medicaid contracting outlines
    a process but doesn't yet offer details on the substance of the
    actions it will take. For example, it sets timeframes for
    determining reforms, but it offers limited information on what
    these reforms will be and the extent to which they will result
    in a more competitive process. It is not clear what changes
    will occur.
        And changes are needed. Our review of eight contracting
    processes did find that one competitive process, the largest,
    fully disclosed information on factors used to evaluate the
    proposals and make awards. We didn't find such information on
    the other two processes. And in the five noncompetitive
    contracting processes reviewed, three lacked any justification
    for excluding competition, and the reasons for the remaining
    were not clear.
        Officials explained that Puerto Rico law does not require
    competition. However, competitive contracts can reduce risks of
    waste, fraud, and abuse. The concerns we identified underscore
    the need for Federal oversight.
        Unfortunately, the Centers for Medicare and Medicaid
    Services, or CMS, does not oversee Puerto Rico's contracting
    procedures, leaving the program at risk. CMS officials noted,
    however, that the agency has treated Puerto Rico the same as
    other U.S. territories and States and that CMS does not oversee
    Medicaid contracting procedures in any State or territory.
        Nationwide, contracts make up at least half of Medicaid
    spending. And in Puerto Rico, this percentage is 96 percent.
    CMS has taken the position that the States and territories are
    best suited to ensure compliance with their respective laws. We
    recommended that CMS take steps to implement ongoing risk-based
    oversight of Puerto Rico's Medicaid contracting procedures,
    citing CMS's statutory requirement to ensure the administration
    of Medicaid programs using necessary methods for efficient
    program operations. The agency agreed.
        As I believe every witness so far has presented, GAO's work
    also shows the challenges that Puerto Rico and the territories
    face compared with State Medicaid programs. Congress has
    increased funding, allowing the territories to avoid funding
    shortfalls or to cover more services. However, our work shows
    that the temporary and inconsistent nature of these increases
    create uncertainty and can complicate efforts to maintain
    program changes and retain and then sustain fiscal health.
    These concerns are real.
        The need for an increased focus on program integrity is
    also critically important. Some improvements, such as Puerto
    Rico establishing a Medicaid fraud control unit, have been
    taken. However, more actions are needed to ensure Medicaid
    spending is meeting the needs of Puerto Rico's beneficiaries.
        As Congress considers changes to funding the territories'
    Medicaid programs, Puerto Rico and other territories must
    continue to develop and carry out planned reforms, measuring
    their results, and adjusting oversight as needed to better
    ensure the efficient use of Medicaid.
        This concludes my prepared statement.
        I would be pleased to answer any questions.
        [The prepared statement of Ms. Yocom follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. Eshoo [presiding]. I want to thank----
        Mr. Sarbanes. Ms. Eshoo, I think you are back, so I will
    turn the reins back over to you, and I will go vote. Thanks
    very----
        Ms. Eshoo. Thank you very much, Mr. Sarbanes. I am sure it
    went as smooth as glass. Thank you very much.
        And thank you to each one of our colleagues who came to be
    witnesses today. We really appreciate it. First of all, I
    appreciate it. I think it is a great way for us to begin our
    hearing, and to the witnesses, to the other witnesses that are
    with us.
        We are now going to move to Member questions, and I am
    going to recognize myself first for 5 minutes.
        To Dr. Schwartz, the last time you testified before our
    committee you explained that the caps were made in law in
    1967--1967, that is 33, 43, 55 years ago. Do you know what
    Congress' reasoning was for putting the caps in the Social
    Security Act?
        What was--do you know what the intent was, what maybe the
    debate would have been?
        I really--I will be real frank with you. I think that there
    is a lot of bias in this, but that is my thinking. So can you
    tell us why they did this?
        Dr. Schwartz. I wish I could tell you. This is something
    they have looked into, because it is frequently asked.
        And so we don't know what factors Congress considered when
    setting the amounts of those caps. They have been commented on
    as being insufficient going back to the late 1970s. So I am
    sorry, but the legislative history is not crystal clear on
    this.
        Ms. Eshoo. I see. And when we talk about a long-term
    solution, how would you describe it?
        How would you advise us?
        That is what we want to do, or many of us want to do, maybe
    some don't. How would you spell that out to us?
        Dr. Schwartz. So let me first say, in speaking on behalf of
    the 17 members of the Commission, the Commission hasn't come up
    with a specific proposal for a long-term solution. And I think
    that we have merely pointed out that the short-term fixes are
    problematic because they don't provide an opportunity for the
    territories to plan and implement in scale and phase the
    programmatic improvements that----
        Ms. Eshoo. Well, they--the hospitals that our colleague
    pointed out is a case in point. I mean, the hospital is falling
    apart. Other territories are having to fly patients to other
    areas. It is expensive to do that. Each one should have--be
    able to have their own system. If people get sick, they should
    be covered.
        So to Ms. Yocom, is there anything inherent to the
    territory's financing structure that helps prevent fraud or
    abuse?
        For example, you found that the territories' block grants
    result in stronger program integrity than if there was the
    open-ended funding structure that the States have. Can you
    elaborate on that?
        Ms. Yocom. Congresswoman----
        Ms. Eshoo. Did you find any evidence of increases in fraud
    thanks to the increase in funding?
        It seems to me that there are some that are drawing a nexus
    between the two. So can you be specific about that?
        Ms. Yocom. Sure. I don't believe that that necessarily is
    the right conclusion to draw from our work.
        Our work has found that, very similar to what Dr. Schwartz
    has mentioned, that the changes to the--the uncertainty of the
    funding stream does cause a lot of issues for any entity. And--
    --
        Ms. Eshoo. Of course.
        Ms. Yocom [continuing]. The territories are not to be
    excluded. When you have a block grant, compared with a stream
    that is dependent on needs and beneficiary growth and changes,
    you have a very different set of circumstances and a very
    different----
        Ms. Eshoo. Yes, but we already know that. We already know
    that. We are all saying that.
        Ms. Yocom. Right----
        Ms. Eshoo. But I am asking you about the specifics relative
    to--so you do--let me put it this way: You do not find any
    nexus between fraud in an open-ended funding structure and what
    the territories have today?
        Ms. Yocom. I don't--I do not believe our work has made that
    kind of a connection, no----
        Ms. Eshoo. Has anybody's work concluded that?
        Ms. Yocom. Not that I am aware of, but----
        Ms. Eshoo. Dr. Schwartz, has anyone brought forth evidence
    relative to a supposed nexus between fraud and abuse and an
    open-funded--you know, the way the States--the way Medicaid
    operates for the 50 States?
        Dr. Schwartz. Not that I am aware of.
        Ms. Eshoo. It is so interesting that this thing keeps
    coming up. It is like a bad penny.
        Anyway, well, I think that my time is used up. The Chair
    will now recognize the--again, the wonderful ranking member of
    our subcommittee, Mr. Brett, for his 5 minutes of questions.
        Mr. Guthrie. Thank you, Madam Chair, I appreciate it. And
    thanks for everybody being here, my colleagues prior who
    testified.
        And I just want to comment on my opening statement. You
    know, the subject matter is not part of--this is a bipartisan
    subject matter we all know we need to--have to address and we
    have to fix. The difference I was saying is, instead of having
    a hearing, we are having a legislative hearing on specific
    pieces of legislation that doesn't have bipartisan input and
    bipartisan--so we need to work together as we move forward on
    this, and that is what we need to do.
        And first, you know, one of the questions is the cap. And I
    think all of us--and I have talked with several of my
    colleagues, spent some time meeting with Delegate--Resident
    Commissioner Gonzalez quite a bit, and talked to others about
    the level of the cap. And the cap is sufficient. The cap in
    statute that we have had to relieve several times is not
    sufficient. It is low.
        And so, you know, the question--before we say is a cap
    right or wrong, the question is, is the cap accurate? If it is
    an accurate cap, is it right? And that is kind of where we are
    trying to go with it.
        And Ms. Schwartz, as we know, none of the territories have
    requested additional funding over the past 2 years. Would you
    agree that this would indicate that the cap amount put in place
    and trended forward for the past 2 years has been, at a
    minimum, sufficient to cover the needs of each of the
    territories?
        Dr. Schwartz. I think that the amount of funding that has
    been available for the past few years has been substantially
    higher than what was available historically, and we have not
    heard that it has been insufficient. Twenty twenty was a very
    [audio problem] year in spending throughout the U.S. because of
    COVID, and so there is some issues around unspent funds there.
        But, you know, year-to-year spending trends can be hard to
    interpret. But I think we haven't heard anything about these
    amounts being insufficient.
        Mr. Guthrie. Thanks, thanks. You know, a cap that is too
    small is ``problemsome.'' A cap that is accurate is--that is
    what we would like to address.
        And so, Ms. Yocom, and--so talking a little bit about--you
    said we can conclude certain things from your report. But in
    your report, the GAO report, you mentioned contracting and
    procurement concerns that have arisen at both CMS and Puerto
    Rico.
        Around that time, Puerto Rico released a report on how they
    planned to address program integrity issues moving forward. So
    then my question would be, are there issues within Puerto
    Rico's report that we should watch closely, such as issues that
    are not in alignment with your report?
        Ms. Yocom. You know, I think what is important to keep an
    eye on is there are two reporting timeframes that Puerto Rico
    has set. One is in April, where they will discuss ways to make
    their contracting procedures more competitive, which is a good
    thing. And then the end is at the end of the year, in 2021,
    there will be further outlines of timeframes and
    implementation. I think keeping track of both of those is going
    to be important, and getting more detail on what steps are
    going to be taken to make the process more competitive.
        Mr. Guthrie. OK, thank you. And then, Ms. Yocom also, in
    your testimony you write that in 2018 procurement costs
    represented 2.4 billion of Puerto Rico's 2.5 billion in total
    Medicaid expenditures. That is a startling number, given that a
    2019 Federal indictment led to the arrest of Puerto Rico
    officials who unlawfully steered Medicaid contracts to certain
    individuals.
        We know that CMS requires States and territories to use the
    same process for Medicaid procurements as they do for
    nonfederal procurements. However, CMS has not taken steps to
    ensure Puerto Rico has met this requirement. Should requiring
    CMS to ensure Puerto Rico has taken the steps be something we
    should consider putting into place?
        Ms. Yocom. I think it would be important to consider that
    for not just Puerto Rico but for the States as well. It is
    clear that CMS doesn't know for certain what is happening, in
    terms of following procurements.
        Mr. Guthrie. OK, thank you. And I just want to interrupt
    again. I know we have discussed my opening statement, and the
    concern with the two bills is that I want to make sure our
    colleagues and my fellow members of this committee that--the
    current system--I know we have changed the caps temporarily--is
    not sufficient, and it needs to be addressed, and we want to
    address it. We want to just work together moving forward to
    address it.
        So I appreciate the time, and I guess I will go vote and
    come right back. But Madam Chair, I appreciate the time, and I
    yield back.
        Ms. Eshoo. The gentleman yields back. I always appreciate
    what the gentleman says. I just want to add to the record,
    though, that the two bills on this subject matter are
    bipartisan. They are bipartisan.
        Mr. Guthrie. There are bipartisan sponsors, right, that is
    right. I am just saying we are going to work together----
        Ms. Eshoo. They are.
        Mr. Guthrie [continuing]. With the committee to----
        Ms. Eshoo. And I think that is very important. I think
    sometimes the cosponsorship of our colleagues from the
    territories seems to be worth 75 percent rather than 100
    percent. But these bills are bipartisan, and they are a part of
    it. So--which I think is wonderful. So we look forward to
    working with you on it.
        The Chair now recognizes Mr. Pallone, chairman of the full
    committee, for 5 minutes of questions.
        Mr. Pallone. Thank you, Chairwoman Eshoo, and thanks for
    emphasizing the bipartisan nature of the bills, because we have
    approached this in a bipartisan way in the past and will
    continue to. Thank you.
        I mean, the concern that I have, obviously, is that, if
    Congress fails to act and the territories go over the Medicaid
    fiscal cliff, the consequences are devastating. And I know that
    we have a number of territories here, but in Puerto Rico alone
    I understand it is possible that hundreds of thousands of
    people could lose their Medicaid coverage if the island doesn't
    receive additional Federal funding. And, you know, that is
    ridiculous, in the context of a pandemic.
        And also, you know, this is a crisis of our own making. I
    mean, Puerto Rico has this Medicaid block grant. And, as a
    result, since 2009 Congress has intervened eight times to
    either increase their funding or increase their FMAP. And, you
    know, I just don't want to do this. I don't want to keep
    kicking this can down the road because the way we do this
    Medicaid in the territories is fundamentally broken, and now is
    the time to fix it.
        So let me ask Dr. Schwartz. Initially, can you explain why
    so many people lose coverage if the territories go over the
    fiscal cliff, if you would?
        Dr. Schwartz. So it is basically simple math. If you have
    less money to spend, there are typically three things you can
    do: you can cut people, you can cut payment rates, or you can
    cut benefits.
        And when payment rates are low, that may be a difficult
    strategy. When benefits have been provided, and there are not
    many optional benefits are provided, it is harder to cut those.
    And so that is the consequence.
        Mr. Pallone. Well, I think it is also critical--thank you,
    really, Doctor. But it is really critical to understand who is
    going to lose coverage, right? These are Medicare--I am sorry,
    Medicaid, Medicaid beneficiaries. So we are talking about,
    generally, very low-income individuals, is that correct?
        Dr. Schwartz. Yes.
        Mr. Pallone. And then, if you use Puerto Rico as an
    example--you know, I apologize to the others, but if you use
    Puerto Rico as an example, it uses its own eligibility levels
    for Medicaid, and they are generally lower than those that are
    used in State programs.
        So in this scenario, a family of four with a monthly income
    of $943, which is lower than the Federal poverty level for one
    person in the contiguous States, those people could lose their
    coverage, is that right?
        Dr. Schwartz. Yes, generally, although I want to note that
    Puerto Rico did implement a temporary eligibility expansion, up
    to 85 percent of the Federal poverty level, at the end of the
    fiscal year, which would allow a family of four to make
    approximately $1,800 per month and remain eligible. But your
    general point is correct.
        Mr. Pallone. All right. And then, given their low income,
    it is safe to assume that the people who lose Medicaid would
    not be able to afford private insurance. Is that correct?
        Dr. Schwartz. Yes.
        Mr. Pallone. So we know that declines in coverage lead to
    declining overall health. When an uninsured person needs care,
    they tend to show up in an emergency room. So what do you
    expect is going to happen to the health of these individuals at
    risk of losing their Medicaid coverage?
        Dr. Schwartz. I think we would expect that people would not
    seek care unless they were in crisis, and that means that they
    would not receive preventive care, which could be immunizations
    or routine screenings. They also wouldn't get maintenance care
    for chronic conditions such as high blood pressure.
        Mr. Pallone. Yes. So, I mean--let me thank you, Dr.
    Schwartz.
        You know, Jenniffer and Stacey and Gregorio, I don't want
    you to misunderstand what I am saying. I mean, I believe the
    territories would only roll coverage back as a last resort, but
    without these additional Federal funds they may have not--they
    may not have a choice. And that is a choice they should never--
    that, you know, the territories should never have to make. And
    we just have to stop--I know I sound like a broken record, but
    we have to stop.
        Madam Chair, we have to stop these short-term fixes and
    look for a permanent solution. So that is what I know you are
    trying to do in the context of the Health Subcommittee and all
    of us in the context of the full committee. And, you know, I
    just want to make a pledge to all our Congresspeople from the
    territories that we understand this, and this is what we want
    to do. We want to have a permanent solution. Thank you,
    Chairwoman Eshoo.
        Ms. Eshoo. Thank you, Mr. Chairman. He yields back.
        It is a pleasure to recognize the ranking member of the
    full committee, Congresswoman Cathy McMorris Rodgers, for 5
    minutes of questioning.
        Mrs. Rodgers. Thank you. Thank you, Madam Chair, and thank
    you, everyone, for being with us this afternoon.
        I wanted to start with Ms. Schwartz, and I just wanted to
    ask, do we have any data on the health outcomes in the
    territories and potential changes in those outcomes since the
    Federal Government has increased the funding for Medicaid in
    the territories?
        Dr. Schwartz. Sure. In general, I want to say that, in
    Medicaid, most of the data are focused on managed care
    arrangements. And four of the territories operate primarily on
    fee-for-service, with Puerto Rico being the only one in managed
    care.
        And Puerto Rico is moving to increase its various
    initiatives around quality, including reporting measures to the
    CMS scorecard, having plan level report cards, using an
    external quality review organization to calculate quality
    measures. And so that is all the infrastructure, the baseline
    activities that it would need to be able to assess quality.
        Most of those measures are based on process measures,
    receipt of certain services that would be recommended from a
    clinical perspective, and that would be similar to the States,
    for which there are relatively few outcome measures, I would
    say, with the exception of low birth weight.
        Mrs. Rodgers. Yes, it is something that I would like to see
    us consider as we are looking at Medicaid, both for the
    territories and beyond, because I think one of the valuable
    aspects of the Medicaid program is that we can see better
    outcomes, we can provide some flexibility to look at getting
    better outcomes for individuals, potentially even lowering
    costs, but making sure that that is also built--those kind of
    measures are built into the program that are encouraging the
    focus on improved health outcomes. I would like to see that
    included. Is that something that you think would be beneficial
    for Congress?
        Dr. Schwartz. I think the caution that I would provide
    would be just ensuring that you have the--that the territories
    have the necessary infrastructure and the scaled infrastructure
    to do those sorts of activities. And I think Puerto Rico has
    been working on that. And the activities for the other
    territories would also have to be sort of scaled to what their
    capabilities are.
        Mrs. Rodgers. OK. Another question. The Medicaid benefits
    vary across the territories. American Samoa and CNMI are not
    required to offer all mandatory Medicaid benefits under their
    Section 1902(j) waivers. Guam, Puerto Rico, and the Virgin
    Islands are required to offer all mandatory benefits and are
    not eligible for the 1902(j) waiver. And currently Guam is the
    only territory that offers all mandatory benefits.
        I would be interested in knowing, do you think that the
    Federal Government would have better insight into the programs,
    and why certain benefits are or are not offered in each of the
    territories, if those territories could get the J waiver,
    similar to the American Samoa and the Northern Mariana Islands?
        Dr. Schwartz. I am not sure if the availability of those
    services is tied to the authority, the J waiver, versus
    operating under another authority as to the availability of the
    providers to provide the specific services in those
    territories.
        So I am not sure what else I could say.
        Mrs. Rodgers. OK.
        Mr. Sablan. May I suggest something? This is Sablan----
        Mrs. Rodgers. Yes.
        Mr. Sablan [continuing]. Ranking Member.
        Mrs. Rodgers. Yes.
        Mr. Sablan. Yes, I think, for the Northern Marianas, it is
    possibly the limited number of specialized care that is
    available in our community. That is why we sent some patients
    here, whether both in Medicaid or in private insurance, sent
    them off to Guam, to Honolulu, to Hawaii. And so that is
    possibly one reason.
        The other reason, which Ranking Member Guthrie brought up,
    is that nobody asked for more money. It is because we get a
    block grant, and our Medicaid agencies are told to operate
    within that block grant, you are not going to--you shouldn't
    expect additional money for this particular fiscal year.
        I hope that may provide help, some idea of why we have that
    waiver.
        Mrs. Rodgers. OK, that is helpful, I appreciate you adding
    those comments.
        Miss Gonzalez-Colon. Ranking----
        Mrs. Rodgers. Yes?
        Miss Gonzalez-Colon. Can you--it is Jenniffer Gonzalez. Can
    you yield just 10 seconds?
        Ms. Eshoo. I think that, well, the time has expired, and I
    would just like to add that one of the rules of the committee,
    the overall committee, is that once witnesses have spoken, they
    can't go back to have them speak again. So--with Members.
        Mrs. Rodgers. OK.
        Ms. Eshoo. OK?
        So, Mr. Sablan, you got yourself in under the wire there,
    my friend.
        Mr. Sablan. My apologies.
        Mrs. Rodgers. OK.
        Ms. Eshoo. OK?
        Mrs. Rodgers. I will talk to them individually. I do have
    some further questions----
        Ms. Eshoo. We will----
        Mrs. Rodgers. Thank you very much.
        Ms. Eshoo. Sure.
        Mrs. Rodgers. I will yield back.
        Ms. Eshoo. The gentlewoman yields back, and of course, all
    Members have the opportunity to submit questions to all of our
    witnesses. And that is always an important part of what we do.
    And I know I always take advantage of it, and others should, as
    well.
        It is a pleasure to recognize the gentlewoman from
    California, Ms. Matsui, for her 5 minutes of questioning.
        Ms. Matsui. Thank you very much, Madam Chair, for calling
    this very, very important hearing.
        I am really deeply concerned about the devastating impact
    the upcoming Medicaid fiscal cliff may have on patients and
    providers in the territories. And while it has been positive to
    hear about the improvements the territories have been able to
    make over the past 2 years with increased funding to the
    Medicaid programs, it also highlights all there is to lose if
    Congress fails to act for the long term.
        If we are going to really address the historical inequities
    that limit access and health outcomes, we cannot be revisiting
    this funding question year after year. It is time to
    permanently raise the bar to ensure adequate funding that will
    improve our territorial Medicaid programs.
        Dr. Schwartz, I want to talk to you a little bit about
    provider flight. Thank you, by the way, for being here today.
    It is my understanding that a State Medicaid program needs to
    ensure that hospitals and providers are reimbursed at rates
    sufficient to maintain participation in the program. Without
    adequate pay, providers may stop accepting Medicaid
    beneficiaries or may seek to provide care elsewhere, which
    leads to decreased access to healthcare.
        In Puerto Rico there was an exodus of providers even prior
    to the recent catalyst. This island was facing a fiscal crisis,
    and doctors were making half of what their mainland
    counterparts were making. Thousands of healthcare providers
    left. Then Hurricane Maria and COVID-19 hit.
        I want to discuss the consequences of lower reimbursement
    rates in the territories and what that means to access to care.
        Dr. Schwartz, I understand that 50 percent of Puerto Ricans
    are on Medicaid. That is a significant number. With that many
    families relying on Medicaid, what would be the effect of
    continued provider flight on the people, including the children
    of Puerto Rico, and their ability to access care when they need
    it?
        [No response.]
        Ms. Matsui. Dr. Schwartz?
        Dr. Schwartz. Yes. Clearly, fewer providers would mean
    fewer opportunities to receive care, delayed care, gaps in
    care.
        Ms. Matsui. OK. In 2018 it was reported that about 15
    percent of Puerto Rico's provider population left the island
    after Hurricane Maria. With the increases in Medicaid funding
    in the last 2 years, has Puerto Rico been able to implement any
    policies that would help end the flight of providers from the
    island?
        Dr. Schwartz. Sure. Puerto Rico actually has implemented
    payment increases for certain providers, including acute care
    hospitals, physician services. Unfortunately, I don't have any
    information to quantify how those payment increases have
    affected provider participation in the program or access to
    care.
        Ms. Matsui. OK, I think that would be helpful to find out.
        If Puerto Rico were to go off the fiscal cliff, do you
    think it would be able to continue paying the increased rates
    to doctors and hospitals that it has been over the past few
    years?
        Dr. Schwartz. Well, as I said previously, provider payment
    is one place where any Medicaid program would seek savings. And
    for Puerto Rico it would be a decision that they would have to
    make. Among the options, provider payment is often the first
    step that Medicaid programs face [audio malfunction].
        Ms. Matsui. So if Puerto Rico is forced to reverse the
    temporary pay increases and cut doctor pay, can you speculate
    about what effect, if any, that might have on provider flight
    and access to care?
        Dr. Schwartz. Yes, well, we certainly have heard from
    officials in Puerto Rico that any reductions in provider
    payment would result in more providers leaving Puerto Rico, or
    leaving the Medicaid program, and worsen any existing access
    issues.
        Ms. Matsui. So it is clear to me that, if we really fail to
    act, these temporary policies that help keep doctors on the
    island will end, and we will have provider flight.
        So I do look forward to working with my colleagues on both
    sides of the aisle to try to find a permanent fix to the
    antiquated way that we fund Medicaid in the territories.
        And with that, I yield back. Thank you very much.
        Ms. Eshoo. The gentlewoman yields back. It is a pleasure to
    recognize the gentleman from Virginia, Mr. Griffith, for your 5
    minutes of questions, sir.
        Mr. Griffith. Thank you very much----
        Ms. Eshoo. Nice to see you.
        Mr. Griffith [continuing]. Madam Chair. Thank you. And I
    respect the committee rules, but I do look forward to having a
    conversation with my colleague, Jenniffer Gonzalez-Colon, about
    what she wanted to get in there, that--when she was talking
    with Mrs. McMorris Rodgers.
        That being said, Ms. Yocom, I was concerned to read that
    the GAO report found Puerto Rico did not take important steps
    to enable or seek competition. I am, however, pleased to see
    that GAO found managed care organizations to be a shining
    example of what is being done right by Puerto Rico's health
    insurance administrators. I am hopeful that we can build off of
    what works and what has worked there. Could you tell us more
    about your findings in relationship to these managed care
    organizations in Puerto Rico?
        Ms. Yocom. Sure. I want to caveat that what we looked at is
    the procedures used to establish and award the contracts, and
    we did find that the largest organization, ASES, was in charge
    of establishing these contracts with different managed care
    organizations. And they did, indeed, follow policies that are
    important to a competitive procurement, and basically letting
    people know what factors that are going to be rated on, and how
    important those factors are, relative to each other, as an
    example of the type of information that they were requesting.
        Mr. Griffith. And, you know, what changes do you think
    could be made to better foster competition in these contracts,
    or in other things that you looked at?
        Ms. Yocom. Yes, I think there are a couple of things:
    making sure that those processes are more standardized across
    the different types of contracts and then, if there truly is no
    way to make a competitive process, making it clear why you
    aren't doing something competitive. If it is an emergency, or
    if it is only one source on the island that can do the work,
    having those kinds of processes more standardized across the
    contracting would be important.
        Mr. Griffith. I appreciate that. Is there anything that you
    had that you wanted to tell Congress that you hadn't had an
    opportunity to tell us?
        I know you want to answer questions, but I just want to
    give you the opportunity, if there is something else that you
    want to get in, to make sure we--that you want to underline
    from your report, et cetera.
        Ms. Yocom. Well, I think, beyond the contracting process,
    our work in the past has really shown the impact of the
    uncertainty of the fiscal situation and the additional funds.
    When they--when you are waiting to see what will happen, it is
    harder to make strong decisions that look beyond the moment. So
    I think that is critically important to understand.
        Mr. Griffith. I appreciate that very much. I have about 2
    minutes left. If anyone would like time, I am happy to yield.
    Otherwise, I can yield back. Is there anybody who wishes to
    take my time that is left?
        [Pause.]
        Mr. Griffith. Hearing none, I yield back, Madam Chair.
        Ms. Eshoo. Seeing--hearing none, the gentleman yields back.
        Now it is a pleasure to recognize the gentlewoman from
    Florida, Ms. Castor, for her 5 minutes of questions.
        Ms. Castor. Well, thank you, Chairwoman Eshoo, for having
    this important hearing, and thank you to my colleagues for
    appearing before us today and fighting to stand up for your
    neighbors back home.
        Dr. Schwartz, under the current capped allotment approach,
    each territory only receives a set amount of Federal funding
    for Medicaid. I just want to be crystal clear. If a territory
    has Medicaid expenses, and it has already hit its cap, it
    cannot receive any more Federal matching dollars, unless
    Congress intervenes. Isn't that right?
        Dr. Schwartz. Yes.
        Ms. Castor. And I understand a few years ago the Northern
    Mariana Islands did, in fact, hit their Federal cap. What
    changes did that force to health services under Medicaid, as a
    result?
        [Pause.]
        Dr. Schwartz. Sorry, yes, it is my understanding that CNMI
    suspended providing services for a period of time, during which
    they experienced the funding gap. And, you know, basically,
    also suggested that certain--only--excuse me--beneficiaries
    could only be seen by one provider on the island, limiting
    people's ability to go to their usual source of care.
        Ms. Castor. I can't imagine that you have a health need and
    you are limited in this country.
        So when a territory uses up its Federal Medicaid allotment,
    you said in your testimony then they have to turn to their
    Federal sources to make up the difference. So that, obviously,
    means that they--it has fewer resources for investments like
    schools, or modernizing the electric grid, or other services.
    Is that correct?
        Dr. Schwartz. Yes.
        Ms. Castor. And on top of all this, you know, we have seen
    some amazing medical breakthroughs, particularly in the field
    of gene therapy and biologics, and more on the way. And these
    can be lifesaving products, but they are often incredibly
    expensive, especially when they first come onto the market.
    When a new, expensive, life-saving medication comes on the
    market, does the size of the cap increase, if you have a cap?
        Dr. Schwartz. No.
        Ms. Castor. So thank you for answering those questions. You
    are helping to make it very plain that this Medicaid cliff
    really puts the citizens that live in the territories at a
    disadvantage compared to their fellow citizens. I think this
    underlying system is deeply inequitable, and it has been for a
    long time.
        Even if we raise the caps, the territories will always be
    one economic downturn or one natural disaster or one medical
    breakthrough away from being able to fully care for its
    residents. So I think it is time that we finally end the unfair
    treatment for the territories and end Medicaid block grants,
    ensure that Medicaid is there as the safety net that it is
    intended to be for all American citizens.
        Thanks, I yield back.
        Ms. Eshoo. The gentlewoman yields back. It is a pleasure to
    recognize another wonderful Floridian, Mr. Bilirakis.
        You have 5 minutes for your questions.
        Mr. Bilirakis. Thank you, Madam Chair. I appreciate it, and
    I want to thank all of you for participating in this hearing.
    We appreciate it so much.
        Ms. Yocom, last Congress I joined my fellow Floridian E&C
    colleague, Representative Soto, in introducing the Territories
    Health Care Improvement Act, which added robust program
    integrity measures in response to the malfeasance. From what
    GAO has observed to date, has Puerto Rico taken sufficient
    action to prevent the fraud and theft of government funds,
    which was at the center of the law enforcement action taken on
    July 10, 2019?
        And if not, what more should occur?
        Again, for Ms. Yocom.
        Ms. Yocom. We haven't looked in great detail at what Puerto
    Rico has done since our--that past work you spoke of. We do
    know, however, that the contracting risks that we have already
    talked about are there.
        And then additionally, while the Medicaid fraud control
    unit is set up, it is not coordinating well with the other
    program integrity efforts on the island.
        Mr. Bilirakis. OK, you know, you need to please follow up
    with this, because I think that is a pretty important question
    that everybody would like to have an answer to.
        Currently, the--are there any territories that--with post-
    eligibility determination process, for that process to validate
    beneficiary program eligibility?
        Ms. Yocom. Yes, we haven't done work to speak to that. I
    don't know if Dr. Schwartz has.
        Mr. Bilirakis. Dr. Schwartz, would you like to comment on
    that?
        Dr. Schwartz. Well, I know that Puerto Rico has been
    reporting for the payment error rate measurement program and
    the Medicaid eligibility quality control program, even though
    it is--they are technically not required to do so. But I am not
    aware of what the results from that activity are, or how their
    error rates compare to other jurisdictions.
        Mr. Bilirakis. We need these answers, folks.
        One question again for Ms. Yocom. Are there any concerns
    that ineligible providers may also remain enrolled in the
    Medicaid program throughout the territories, or in any
    particular territories?
        Ms. Yocom. I would say throughout the territories and
    throughout the States, that is an area where we need to be
    doing stronger work of screening and enrolling providers, and
    making sure that they are not on the OIG list for providers who
    should be excluded.
        Mr. Bilirakis. So you said throughout the States, as well.
        Ms. Yocom. Yes, our work has shown that there is still a
    lot of work to be done there.
        Mr. Bilirakis. That is something we need to be focused on,
    then.
        Dr. Schwartz, the Northern Mariana Islands, American Samoa,
    and Guam are required to demonstrate the following by October
    of this year: progress in implementing methods for the
    collection and reporting of reliable data to the Transformed
    Medicaid Statistical Information System, in addition to
    progress in establishing a State Medicaid fraud control unit.
    Can you provide us with an update regarding the progress made
    to date on both fronts, please?
        Dr. Schwartz. So the information I have is that Puerto Rico
    and the U.S. Virgin Islands are both reporting to TMSIS, and
    Guam is working towards production on that. American Samoa and
    CNMI are exempt, although CNMI is beginning to work on that.
    Both Puerto Rico and U.S. Virgin Islands have also established
    fraud control units. The other three territories have not.
    American Samoa and CNMI are exempt under their J waiver.
        Mr. Bilirakis. OK, thank you very much.
        And folks, these are American citizens, and we want to help
    them, obviously. But we need some accountability here, and that
    is why I believe we are having this hearing.
        So I really appreciate it, Madam Chair. And if anyone wants
    my 22 seconds, they can have it. Otherwise, I yield back.
        Ms. Eshoo. Any takers?
        [Pause.]
        Ms. Eshoo. No hands. OK, we are going to----
        Ms. Plaskett. Madam Chair?
        Ms. Eshoo. Yes?
        Ms. Plaskett. This is Congresswoman Plaskett. Thank you so
    much, Mr. Bilirakis.
        I just wanted to submit for the record--I know that
    leadership on the committee has received a letter from Governor
    Bryan of the Virgin Islands. I just ask unanimous consent that
    his letter--I am sure the letters of these other Governors have
    written to--from the territories that have written----
        Ms. Eshoo. It is already in the record.
        Ms. Plaskett. Thank you very much.
        Ms. Eshoo. It is already in the record, and we thank you.
        Ms. Plaskett. I appreciate that.
        Ms. Eshoo. The gentleman yields back. It is a pleasure to
    recognize the gentleman from California, Mr. Cardenas, for his
    5 minutes of questions.
        Mr. Cardenas. Thank you very much, Chairwoman Eshoo, and I
    appreciate Ranking Member Guthrie for having this incredibly
    important hearing.
        It is a unique and horrible feeling to be in this great
    country but feel like a second-class citizen. And I believe
    today's hearing is exposing how, when it comes to something as
    precious and as important as human beings' health, it is being
    treated in the territories as though people are less than human
    or second-class citizens. And I challenge anybody to try to
    argue otherwise.
        We have heard a lot about the cap, and how harmful it is
    and it has been to the territories over the years. I want to
    focus on the other aspect of Medicaid in the territories that
    is a major detriment to the program, and that is the inequity
    of how the Federal Medicaid assistance percentage, otherwise
    known as FMAP, is calculated.
        Dr. Schwartz, just the level set--can you briefly explain
    what the FMAP is, and how it is set for typical State Medicaid
    programs?
        [Pause.]
        Mr. Cardenas. Dr. Schwartz?
        Dr. Schwartz. Sure.
        Mr. Cardenas. OK.
        Dr. Schwartz. So the FMAP is based on the State's per
    capita income, relative to the national average, with higher
    FMAPs for States with lower per capita incomes, and vice versa.
        There is a minimum of 50 percent, and there is a maximum of
    83 percent, and those FMAPs are adjusted modestly each year,
    based on changes in per capita income relative to the national
    average. And then, for the territories, it is set at 55
    percent, unless a specific increase has been given, as under
    the Families First bill or under the consolidated
    appropriations bill.
        Mr. Cardenas. So therefore, when it comes to States and the
    FMAP, that means that you get more assistance from the Federal
    Government if you have a lower economic income.
        Dr. Schwartz. That is right.
        Mr. Cardenas. OK, thank you.
        The FMAP is different for the territories, though. As you
    stated in your testimony, the territorial FMAP is set by law at
    55 percent, which is much lower than what it would be if they
    were calculated like a State.
        Dr. Schwartz. That is right.
        Mr. Cardenas. OK. Dr. Schwartz, in your testimony you
    stated that some of the territories have struggled in the past
    to generate the local funds necessary to draw down Federal
    funds. Which territories are you aware of that have struggled
    with this?
        Dr. Schwartz. So, to my knowledge, all the territories have
    struggled with this, but I believe it has been a particular
    problem in several of the Pacific territories.
        Mr. Cardenas. OK. So the territories, it seems that all of
    them end up in a position where they have a greater need. And
    even though there is inadequate funding, even that inadequate
    funding isn't even drawn down, not because they don't have the
    need but because they don't have the ability to match and draw
    down those funds.
        Dr. Schwartz. Yes.
        Mr. Cardenas. OK, that seems completely backwards to me.
    And with all due respect, I think Congress has every right and
    responsibility to recognize this glaring problem and correct it
    as soon as possible.
        Dr. Schwartz, you also said in your testimony that you
    expect all of the territories to struggle with generating the
    local Medicaid funds if the FMAP were to revert back to 55
    percent. So, even if we do increase the Federal funding, the
    territories won't be able to take full advantage of it unless
    we also increase the FMAP, correct?
        Dr. Schwartz. Yes.
        Mr. Cardenas. OK. So basically, what we have been able to
    prove recently with our actions of increasing the FMAP for the
    territories is that that is a much better right-sized give-and-
    take with the territories and the Federal Government funding
    than the 55 percent. Has that been demonstrated?
        Dr. Schwartz. Well, I think if you look at what per capita
    incomes are in the territories, if you calculated them based on
    the State formula, you would come up with a much higher FMAP.
        Mr. Cardenas. Yes. Colleagues, I hope and pray that this
    hearing does bring us to a point where we actually properly
    fund.
        And one of the things I would like to point out, again,
    being the territories are being treated like second-class
    citizens, in my opinion, in this country, if you are of a
    certain background or what have you, you are not considered
    suspect, even though you may actually do things that are beyond
    suspect and even criminal. But when it comes to the
    territories, I think that we are holding the territories to a
    standard that is unreal and is unfair, just because they are
    territories.
        There are States and actors within States of the Union that
    have actually done wrong, and they have been able to even run
    for office later, get elected to things like, you know, U.S.
    Senator, what have you. But yet the territories are being held
    suspect when we truly don't have proof that we should be
    holding them suspect. Instead, we should be funding them
    appropriately and also holding them accountable, just like we
    would any State.
        I am sorry, Madam Chair, I am out of time, and thank you
    very much. I yield back.
        [Pause.]
        Mr. Cardenas. Madam Chair?
        Ms. Eshoo. I thank you for the clarity of your comments. I
    think that it is a--you painted a tough picture, because that
    is what it is. But I don't know any one of us--if we were in
    the position of any one of the territories in our State, we
    would be shouting out from the top of the Capitol on this. And
    I think it has just gone on for far too long.
        No one really understands why the Congress did what it did
    a half a century ago. I think this darn thing has gone on long
    enough. If we haven't learned how essential to life is--and our
    livelihoods--healthcare--we struggle with it in the 50 States.
    Why wouldn't it be the same way with people in the territories,
    who are our fellow citizens, and just squeezing, squeezing,
    squeezing--it just is beyond me.
        Anyway, I want to call on and recognize the gentleman from
    Missouri, Mr. Long, our friend.
        Mr. Long, you have 5 minutes.
        Mr. Long. Thank you, Madam Chair, and thank you all for
    being here today.
        Dr. Schwartz, I wanted to ask you about the history of the
    J waivers. Two territories in--the Northern Mariana Islands and
    American Samoa operate their Medicaid and CHIP programs under
    Section 1902, the J waivers. Why were these two territories
    granted one, and what have they allowed these territories to
    do?
        Dr. Schwartz. I do not have information at my fingertips
    about the history of why the J waivers were granted, but we can
    certainly get that information to you.
        I know the J waiver provides an opportunity to waive many
    areas of the statute, and so I--we can provide that specific
    information to you for the record. And I apologize I don't have
    it at my fingertips.
        Mr. Long. OK, yes, I really would appreciate it, because I
    would like to get an answer to that. And I appreciate you
    following up with my staff on that and getting the information
    to us.
        You may not be able to answer this next question, either,
    but do they want these waivers to continue? Are you apprised of
    that? Do you know if they want them to continue?
        Dr. Schwartz. I have not heard either way. But again, I can
    check on that for you.
        Mr. Long. OK--go ahead, I am sorry.
        Dr. Schwartz. I just wanted to also, while I had a moment,
    to correct something I said earlier about the TMSIS data. I
    mentioned that Puerto Rico and the Virgin Islands were both
    providing TMSIS data, and several others were exempt. But I
    want to make clear that, actually, the other three territories
    must demonstrate progress on TMSIS by October of this year. And
    so I just want to make sure that that is correctly reflected.
        Mr. Long. OK, thank you.
        And Ms. Yocom, obviously, the focus of your report was on
    Puerto Rico, but I wanted to make sure we didn't neglect the
    other territories and the good work they have done on their
    program integrity measures. Are there any things we should
    consider implementing or reviewing for the other territories?
        Ms. Yocom. I am afraid the work that we have done on all
    the territories together is likely too old to be helpful here.
        In general, what you want your Medicaid program to have is
    good data, so you know where the money is going; good
    screening, so you know the providers are eligible and in good
    standing; and strong eligibility systems, so you are covering
    the people who need the program the most.
        Mr. Long. OK, OK, thanks, I appreciate that.
        And Madam Chairman, I yield back.
        Ms. Eshoo. Thank you, Mr. Long, and the gentleman yields
    back.
        It is a pleasure to recognize the gentlewoman from
    Illinois, Ms. Kelly, for your 5 minutes of questions.
        [Pause.]
        Ms. Eshoo. Are you on board?
        I saw her earlier. All right, then we will go to the
    gentlewoman from California, Ms. Barragan, for 5 minutes of
    questions.
        Ms. Barragan. Thank you, Madam Chairwoman. I just wanted to
    state that I think it is incredibly unfair the territories
    receive Medicaid funding in the form of a block grant. States
    receive open-ended Federal funds, for the funds territories
    receive are fixed. The block grant funding does not come
    anywhere close to covering the cost of healthcare for the
    territories' Medicaid enrollees.
        And with that I want to yield to a champion on these
    issues, my former CHC colleague, Darren Soto.
        Mr. Soto. Thank you so much, Representative Barragan, and
    thank you, Chair Eshoo, for hosting this really critical issue.
    Representing more island-born Puerto Ricans than any other
    district, of course, than the island of Puerto Rico and
    Jenniffer Gonzalez-Colon herself, this is a key issue.
        You know, last term we had a great bill that came out of
    this committee, where majority and minority staff worked
    together with the leadership of Chair Eshoo and others. And I
    co-introduced, with Representative Gus Bilirakis, our
    Territories Medicaid Parity Bill, and it represented a really
    great balance. It set a 5-year set of benchmarks. It raised the
    funding for each of the territories. It literally would have
    set us on a great path forward. And we know that, sadly, the
    Senate went back on that deal, despite bipartisan, unanimous
    support out of our committee, at the urging of then-President
    Trump, even though I think there was great support among
    Republicans and Democrats in the Senate, as well.
        So, you know, I strongly encourage both our chairs and our
    ranking members and our majority and minority staff to work
    together to see if we can get something together that we could
    both get behind that makes sure we, once and for all, set
    ourselves at least on a 5-year path to get to 100 percent
    Medicaid parity.
        We heard from champions like Representative Sablan and
    Radewagen, Plaskett, Gonzalez-Colon, and San Nicolas about how
    it set our territories behind. When you think of the billions
    of dollars that they had to dig deep in from their own local
    territorial budgets, we saw patients left behind in Hurricane
    Maria or in the many cyclones we saw out in the Pacific
    territories. We saw that patients can't get transportation. We
    saw hospitals that ended up not having enough funding to be
    maintained, so when they were hit with Hurricane Irma and
    Hurricane Maria, they looked like they were going to be
    inoperable for many years.
        Ms. Schwartz and Ms. Yocom, my question to you all is,
    based upon that bill from last term, is there a path we could
    get at, a 5-year path, to get all the services up to what we
    need to, equal to States, where we can have that funding be
    equal?
        Is that something you think is achievable in these next 5
    years, if we work this out?
        Dr. Schwartz. I think the general idea of having a longer-
    term funding arrangement and a phased implementation of
    benefits, repayment rates, or eligibility levels makes a lot of
    sense. I couldn't comment on whether 5 years would be
    sufficient to do the whole thing.
        I also imagine that, across the different territories, you
    might want to stage the implementation of those different steps
    differently, depending upon their own needs. And that is the
    kind of thing that territories and perhaps CMS could comment on
    and come up with a plan. So I think the general idea of it
    seems sound.
        Mr. Soto. Thanks.
        And Ms. Yocom?
        Ms. Yocom. We would be glad to work with you to help. We
    think it is definitely a good plan, and we can give it a try.
    We are glad to help with data and doing the--some of the
    analysis.
        Mr. Soto. Thank you. Just as we close, you know, the
    pandemic has exposed how key coverage and services for Medicaid
    and insurance coverage, generally, is to make sure that
    Americans in our territories are treated with the same dignity,
    respect, and access to healthcare as those of us living on the
    mainland in States.
        So I thank you all for this opportunity, and I yield back.
        Ms. Barragan. Madam Chairwoman, I yield back. Thank you.
        Ms. Eshoo. The gentlewoman yields back.
        It is a pleasure to recognize Dr. Bucshon for your 5
    minutes of questions. Good to see you.
        Mr. Bucshon. Good to see you. Thank you, Madam Chairwoman.
        Ms. Yocom, aside from contracts not being negotiated in a
    competitive way in Puerto Rico, one of the more alarming
    aspects of your report is that CMS is not conducting oversight
    of Medicaid contracts at any level. I want to ask, what has CMS
    said about changing this behavior for both the territories and
    the States moving forward?
        And are there requirements Congress should put in place, or
    policies we should consider for both the territories and
    States?
        Ms. Yocom. Yes, CMS has said a couple of things to us on
    this work.
        The first was that they did feel like States and
    territories were in the best position to understand their own
    laws and regulations when it comes to contracting. They do,
    however, have authority to step in when there are issues or
    concerns that would lead them to want to know more information
    about contracting processes. I think that is an important thing
    to look at.
        When we asked CMS what circumstances might lead them to do
    that, they did not have a response for us. So, within current
    law and regulation, that seems like a really important place to
    start, is under what circumstances do you want the Federal
    Government in and assisting?
        The last thing CMS said is that it would provide technical
    assistance, and they can, if need be, withhold Federal monies
    if they deem that necessary.
        Mr. Bucshon. Thank you very much for that response. I
    appreciate it. It sounds like we have got a little bit of work
    to do in that space.
        Ms. Yocom. I think so.
        Mr. Bucshon. Ms. Schwartz, the two bills before the
    subcommittee today would remove the caps from all the
    territories. If either of these were signed into law, would the
    territories be in compliance with the Medicaid program?
        Dr. Schwartz. Well, I have not read these bills in detail.
        Removing the caps, in and of itself, does not mean that all
    territories will be providing the full suite of services, or
    conducting a full set of oversight or data-reporting measures
    that are required of the States. And, you know, you would need
    to be explicit on all of those items.
        Also, I just further want to comment that, as--removing the
    caps without addressing the FMAP is problematic for the reasons
    shared earlier.
        Mr. Bucshon. Yes, and I was going to follow up with that,
    and it seems maybe a more important discussion is to provide
    long-term certainty and fix some of the other underlying
    problems. What does the long-term certainly look like, and what
    can Congress do to help provide that certainty for the
    territories?
        Dr. Schwartz. So a couple of issues have been raised
    about--or concerns about the adequacy of the program from the
    territories, one being provider payment and then the second
    being the breadth of the benefits.
        And for a program administrator, committing to an increase
    in provider payment without certainty about the availability of
    the funds to back up those provider payment increases, I think,
    would be difficult.
        And similarly, for extending a benefit, I think all
    Medicaid programs are in this situation, that they do not like
    to provide benefits and then have to be able to say the next
    year, ``No, sorry, there is not enough money, and we are not
    going to provide that.'' It is very disruptive to providers. It
    is, obviously, very disruptive to beneficiaries, who have
    expectations.
        So those are some examples of how the uncertainty affects
    the program on a very day-to-day basis.
        Mr. Bucshon. OK, well, thank you.
        I also want to know--it seems, you know, like we are going
    to work off the extension we passed 2 years ago. But we need to
    understand, for a long-term fix, we really need to find a way
    to pay for the services, and that need must be part of our work
    moving forward.
        I would--as a healthcare provider, I want everyone who is a
    U.S. citizen--territories, the--and all the other States--to
    have the same access to quality medical care as everyone does
    in my State, Indiana, and the rest of the country. So this is
    really a critical issue for our territories that we really need
    to find a solid, long-term solution to ensure that the U.S.
    citizens in the territories really have the same quality of
    program, and program integrity, as well as the same amount of
    resources, financially, for quality healthcare. And I want to
    make--I want to be part of that solution.
        Madam Chairwoman, I yield back.
        Ms. Eshoo. Those are very generous comments, Dr. Bucshon.
        The Chair is delighted to recognize the gentlewoman from
    Washington State, Dr. Schrier, for 5 minutes of questions.
        Not there? Then we will call on the gentlewoman from
    Massachusetts, Ms. Trahan, for your 5 minutes of questions.
        Not there? Well, we--I think a lot of Members have left
    their seats to go over to the Capitol to vote. Let's see who is
    next.
        Voice. It should be--look at the Republicans, Mr. Dunn.
        Ms. Eshoo. Mr. Dunn--from where?
        Mr. Dunn, are you there?
        [Pause.]
        Ms. Eshoo. Then Dr. Joyce, you are recognized. Thank God
    you are there.
        Mr. Joyce. It is great to be here. Thank you, Chair Eshoo,
    thank you for holding this, and Ranking Member Guthrie, for
    allowing us to convene. I would also like to thank my
    colleagues on their first panel for their testimony here today.
        First, Ms. Schwartz, too often we make policy with each of
    the territories getting lumped together. Can you give us some
    examples of how they differ from each other?
        Dr. Schwartz. Sure. Here is one quick example. In 2019 the
    number of enrollees in Puerto Rico was 1.2 million. In the
    Commonwealth of the Northern Mariana Islands it was a little
    over 16,000. In Puerto Rico, they have a managed care
    infrastructure, and in the other territories it is primarily
    fee-for-service. So those are some good examples of the scale
    and the scope differences across the various territories.
        Mr. Joyce. In face--continuing along that line, Ms.
    Schwartz--in face of these differences, not only geographic,
    but the number of insured lives that can be covered
    effectively, how should we as Members of Congress be better
    addressing this?
        And that is for you, Ms. Schwartz.
        Dr. Schwartz. Sure. I think the one suggestion that I would
    make and plan for enhanced requirements to go with an enhanced
    funding is consultation with the territories about their
    capacity to provide those requirements and staging those in a
    way that is consistent, both with what the committee wants to
    achieve and what is realistic in the short and the long term.
        Mr. Joyce. Ms. Yocom, I understand that we do have a need
    for stability and the goal of increasing the cap and FMAP for
    the territories. Specifically, I want to discuss Puerto Rico.
        Last Congress this committee agreed on bipartisan proposals
    to provide 4 years of relief tied to important program
    integrity measures. However, I am concerned with what occurred
    with the former Director of SS and the GAO findings related to
    procurement processes. What are concrete steps that SS has
    taken to address the concern from the GAO's report on program
    integrity?
        Ms. Yocom. Well, as I noted earlier, Puerto Rico has
    produced a contracting reform plan, and it has two key points
    where the details that they flesh out their plan with will be
    very important to know about. The first deadline is in April,
    where their plan says they will talk more about how they will
    foster competition and what kind of steps they will take to
    improve contracting procedures.
        And then the second one is at the end of this year, which
    has more detail on how they are going to go about it.
        I think keeping track of that, thinking about
    standardization across contracting processes as Puerto Rico
    considers how to implement its plan, is going to be two really
    important things to do.
        Mr. Joyce. What steps has the Governor committed to take as
    part of this revised fiscal plan?
        Ms. Yocom. You know, I don't know that I can speak to that.
    I would be glad to find that out for you.
        Mr. Joyce. Thank you. I think that would be important for
    us to have that information, as well.
        Thank you for the opportunity to have this dialogue, and
    Chair Eshoo, I yield the remaining time.
        Ms. Eshoo. The gentleman yields back. I thank him for his
    questions. I don't see any other Members at this time that I
    can recognize from either side of the aisle.
        So I want to once again thank this panel of witnesses for
    your testimony today and, of course, our colleagues that headed
    up the hearing from the territories. We appreciate each one of
    you and your sharing your--you know, answering the Members'
    questions. Hearings are very important, and we always learn
    from them.
        I am going to submit the----
        Voice. There's over 30 documents.
        Ms. Eshoo [continuing]. Over 30 documents. They are
    statements for the record. And I want to ask my colleague, the
    ranking member of the subcommittee, if he would grant a
    unanimous consent request that those be--those statements be
    placed in the record, so we don't have to read 30 of them----
        Mr. Guthrie. Yes, ma'am. No objection.
        Ms. Eshoo [continuing]. With you.
        Mr. Guthrie. No objection, yes.
        Ms. Eshoo. Thank you. Thank you.
        [The information appears at the conclusion of the
    hearing.\1\]
    ---------------------------------------------------------------------------
        \1\ One document, an Army Corps of Engineers report, has been
    retained in committee files and is available at https://docs.house.gov/
    meetings/IF/IF14/20210317/111335/HHRG-117-IF14-20210317-SD018.pdf.
    ---------------------------------------------------------------------------
        Ms. Eshoo. Pursuant to committee rules, Members have 10
    business days to submit additional questions for the record,
    and I am sure that the witnesses will respond promptly to any
    questions that you receive. It is a very important part of our
    hearing process.
        And at this time, the subcommittee is adjourned. Thank you,
    everyone.
        [Whereupon, at 3:16 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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