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24–614 2018

MEDICAID OVERSIGHT: EXISTING PROBLEMS AND 

WAYS TO STRENGTHEN THE PROGRAM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

JANUARY 31, 2017 

Serial No. 115–1 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

GREG WALDEN, Oregon 

Chairman 

JOE BARTON, Texas 

Vice Chairman 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

DEBBIE DINGELL, Michigan 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

TIM MURPHY, Pennsylvania 

Chairman 

H. MORGAN GRIFFITH, Virginia 

Vice Chairman 

JOE BARTON, Texas 

MICHAEL C. BURGESS, Texas 

SUSAN W. BROOKS, Indiana 

CHRIS COLLINS, New York 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GREG WALDEN, Oregon (ex officio) 

DIANA DEGETTE, Colorado 

Ranking Member 

JANICE D. SCHAKOWSKY, Illinois 

KATHY CASTOR, Florida 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(III) 

C O N T E N T S 

Page 

Hon. Tim Murphy, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. Diana DeGette, a Representative in Congress from the state of Colorado, 

opening statement ................................................................................................ 4 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 6 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

prepared statement .............................................................................................. 126 

WITNESSES

Carolyn L. Yocom, Director, Health Care, U.S. Government Accountability 

Office ..................................................................................................................... 9 

Prepared statement .......................................................................................... 11 

Ann Maxwell, Assistant Inspector General, Office of Evaluation and Inspections, Office of Inspector General, Department of Health and Human Services ......................................................................................................................... 28 

Prepared statement .......................................................................................... 30 

Paul Howard, Senior Fellow, Director, Health Policy, The Manhattan Institute ........................................................................................................................ 43

Prepared statement .......................................................................................... 45 

Josh Archambault, MPP, Senior Fellow, The Foundation for Government 

Accountability ....................................................................................................... 62 

Prepared statement .......................................................................................... 64 

Timothy M. Westmoreland, J.D., Professor from Practice, Senior Scholar in 

Health Law, Georgetown University Law Center ............................................. 82 

Prepared statement .......................................................................................... 84 

SUBMITTED MATERIAL

Subcommittee memorandum .................................................................................. 128 

(1) 

MEDICAID OVERSIGHT: EXISTING PROBLEMS 

AND WAYS TO STRENGTHEN THE PROGRAM 

TUESDAY, JANUARY 31, 2017 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

2123, Rayburn House Office Building, Hon. Tim Murphy (chairman 

of the subcommittee) presiding. 

Present: Representatives Murphy, Griffith, Burgess, Brooks, Collins, Barton, Walberg, Walters, Costello, Carter, Walden (ex officio), 

DeGette, Schakowsky, Castor, Tonko, Clarke, Ruiz, Peters, and 

Pallone (ex officio). 

Staff Present: Jennifer Barblan, Chief Counsel, O&I; Elena Brennan, Legislative Clerk, O&I; Paige Decker, Executive Assistant & 

Committee Clerk; Scott Dziengelski, Policy Coordinator, Health; 

Blair Ellis, Digital Coordinator/Press Secretary; Emily Felder, 

Counsel, O&I; Jay Gulshen, Legislative Clerk, Health; Brittany 

Havens, Professional Staff, O&I; Peter Kielty, Deputy General 

Counsel; Katie McKeough, Press Assistant; Jennifer Sherman, 

Press Secretary; Luke Wallwork, Staff Assistant; Gregory Watson, 

Legislative Clerk, C&T; Everett Winnick, Director of Information 

Technology; Jeff Carroll, Minority Staff Director; Tiffany Guarascio, 

Minority Deputy Staff Director and Chief Health Advisor; Chris 

Knauer, Minority Oversight Staff Director; Una Lee, Minority 

Chief Oversight Counsel; Miles Lichtman, Minority Staff Assistant; 

Dan Miller, Minority Staff Assistant; Jon Monger, Minority Counsel; Dino Papanastasiou, Minority GAO Detailee; Rachel Pryor, Minority Health Policy Advisor; Matt Schumacher, Minority Press Assistant; Andrew Souvall, Minority Director of Communications, 

Outreach and Member Services; and C.J. Young, Minority Press 

Secretary. 

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA 

Mr. MURPHY. Good morning, everyone. Welcome to the newly refurbished—well, I want to call it the Oversight and Investigation 

Committee room, which is sometimes used by Energy and Commerce. What a beautiful room and it should be more conducive to 

a good hearing. 

2 

This is the first one of the 115th Congress, so welcome here, and 

welcome to our witnesses today, and welcome back to my friend 

and colleague, Ranking Member Diana DeGette of Colorado. 

This is our Medicaid oversight hearing on existing problems and 

ways to strengthen the program. The subcommittee convened this 

hearing today to examine a critical component of the Patient Protection and Affordable Care Act, Medicaid and Medicaid expansion. 

As the world’s largest health program, Medicaid provides 

healthcare coverage for over 70 million Americans and accounts for 

more than 15 percent of healthcare spending in the United States. 

In 2015 alone, Federal taxpayers spent over $350 billion on Medicaid, and the costs continue to rise each year. According to the 

Congressional Budget Office, the Federal share of Medicaid spending is expected to rise significantly over the coming decade, from 

$371 billion in 2016 to $624 billion in 2026, over 10 years. 

At a time when Medicaid program costs are skyrocketing, it 

makes sense to ask the question, is Medicaid adequately serving 

our most vulnerable populations? Medicaid was originally designed 

as a safety net to care for health of some of our most vulnerable 

populations: Low-income children, pregnant women, parents of dependent children, the elderly, individuals with disabilities. And for 

many years serving as a psychologist, I know I’ve treated many 

kids that without their disability coverage from Medicaid, it would 

be a struggle for them. 

But far too often, Medicaid’s own rules keep it from best serving 

the families that it was designed to help. These restrictions surrounding Medicaid do not allow doctors and nurses the flexibility 

they need to arrive at the best outcome for patients. For instance, 

most Medicaid programs do not use physician-focused alternative 

payment models that can improve care and reduce costs. 

And studies show that Medicaid coverage does not necessarily result in better health outcomes. One often cited study in Oregon 

found that Medicaid coverage increases healthcare use and improves self-reported health and mental health, while having no effect on mortality or physical health. Similarly, the National Bureau 

of Economic Research found that Medicaid enrollees obtained only 

20 to 40 cents of value for each dollar the government spends on 

their behalf. 

Further, reports by nonpartisan watchdogs, two of which are 

here today, show that the Medicaid program remains a target for 

waste, fraud, and abuse. Because of the size and scale of the program, improper payments, including payments made for people not 

eligible for Medicaid or for services that were not provided, are extremely high. The Government Accountability Office estimates 

Medicaid paid out over $17 billion in improper payments in fiscal 

year 2014 alone. 

For these reasons, Medicaid has been designated as a high-risk 

program by the GAO for 14 years, since 2003. And despite the longstanding problems in the Medicaid program, the Patient Protection 

and Affordable Care Act expanded Medicaid to a whole new population. In 32 states, Medicaid benefits have been opened up to 

adults under the age of 65 who make less than 133 percent of the 

poverty level. 

3 

Since open enrollment began in October 2013, roughly 11 million 

individuals have signed up for Medicaid coverage under the new 

eligibility parameters. This means that the majority of individuals 

covered under ObamaCare have enrolled through the Medicaid program instead of purchasing private health insurance plans. 

The costs associated with insuring the 11 million new Medicaid 

enrollees have been far more expensive than the Obama administration predicted. A report released by the Department of Health 

and Human Services found that the average cost of expansion enrollees was nearly 50 percent higher than projected. Medicaid expansion enrollees cost an average of $6,366 in fiscal year 2015, 

which is 49 percent higher than the agency predicted the year 

prior. 

This means that not only are expansion enrollees expensive to insure, but the costs are difficult to predict. Further, because of the 

high matching rate, the Federal taxpayer is on the hook for the 

vast majority of expenses associated with new enrollees. Unfortunately, reports show both states and the Federal Government cannot effectively oversee and implement Medicaid expansion. The 

GAO found errors in Medicaid eligibility determinations that could 

lead to misspending of funds. Likewise, the Inspector General 

found troubling evidence that the Federal Government failed to implement requirements in the Patient Protection and Affordable 

Care Act that were supposed to improve program integrity and root 

out waste, fraud, and abuse. 

While we all acknowledge there are serious weaknesses and deficiencies in how this program operates, we also recognize the responsibility of the Federal Government to provide a safety net to 

the most vulnerable among us. That means ensuring that taxpayer 

dollars are spent in a way that actually improves health outcomes 

and serves the Medicaid population. We want this to work, not 

hinder services. And I hope we can, in a bipartisan way, support 

its strengths, acknowledge the problems, and together find some 

solutions. 

Tomorrow, the Health Subcommittee will discuss legislative solutions to strengthen Medicaid, but as we move forward with legislation, we must also be careful not to repeat the worsening problems 

that already exist in the program. As we will hear from our witnesses today, we have a lot of work to do and I’d like to thank our 

witnesses for appearing today and look forward to an informative 

discussion. 

I now turn to the ranking member Ms. DeGette for 5 minutes. 

[The prepared statement of Mr. Murphy follows:] 

PREPARED STATEMENT OF HON. TIM MURPHY

The Subcommittee convenes this hearing today to examine a critical component 

of the Patient Protection and Affordable Care Act: Medicaid and Medicaid Expansion. 

As the world’s largest health program, Medicaid provides health care coverage for 

over 70 million Americans, and accounts for more than 15 percent of health care 

spending in the United States. 

In 2015 alone, federal taxpayers spent over $350 billion dollars on Medicaid, and 

the costs continue to rise each year. According to the Congressional Budget Office, 

the federal share of Medicaid spending is expected to rise significantly over the coming decade, from $371 billion in 2016 to $624 billion in 2026. 

4 

At a time when Medicaid program costs are skyrocketing, it makes sense to ask 

the question: is Medicaid adequately serving our most vulnerable populations? 

Medicaid was originally designed as a safety net to care for the health of some 

of our most vulnerable populations: low-income children, pregnant women, parents 

of dependent children, the elderly and individuals with disabilities. 

Far too often, however, Medicaid’s own rules keep it from best serving the families 

that it was designed to help. These restrictions surrounding Medicaid do not allow 

doctors and nurses the flexibility they need to arrive at the best outcome for patients. For instance, most Medicaid programs do not use physician-focused alternative payment models that can improve care and reduce costs. 

And studies show that Medicaid coverage does not necessarily result in better 

health outcomes. One often-cited study in Oregon found that Medicaid coverage increases health care use and improves self-reported health and mental health while 

having no effect on mortality or physical health. 

Similarly, the National Bureau of Economic Research found that Medicaid enrollees obtain only 20 to 40 cents of value for each dollar the government spends on 

their behalf. 

Further, reports by non-partisan watchdogs—two of which are here today—show 

that the Medicaid program remains a target for waste, fraud, and abuse. Because 

of the size and scale of the program, improper payments—including payments made 

for people not eligible for Medicaid, or for services that were not provided—are extremely high. The Government Accountability Office estimates Medicaid paid out 

over $17 billion in improper payments in fiscal year 2014 alone. 

For these reasons, Medicaid has been designated as a ‘‘high risk’’ program by the 

GAO for 14 years—since 2003. And despite the long-standing problems in the Medicaid program, the Patient Protection and Affordable Care Act expanded Medicaid 

to a whole new population. In 32 states, Medicaid benefits have been opened up to 

adults under the age of 65, who make less than 133 percent of the poverty level. 

Since open enrollment began in October 2013, roughly 11 million individuals have 

signed up for Medicaid coverage under the new eligibility parameters. This means 

that the majority of individuals covered under Obamacare have enrolled through the 

Medicaid program, instead of purchasing private health insurance plans. 

The costs associated with insuring the 11 million new Medicaid enrollees have 

been far more expensive than the Obama Administration predicted. A report released by the Department of Health and Human Services found that the average 

cost of expansion enrollees was nearly 50 percent higher than projected. Medicaid 

expansion enrollees costs an average of $6,366 in fiscal year 2015—which is 49 percent higher than the agency predicted the year prior. 

This means that not only are expansion enrollees expensive to insure—but the 

costs are difficult to predict. Further, because of the high matching rate, the federal 

taxpayer is on the hook for the vast majority of expenses associated with new enrollees. 

Unfortunately, reports show both states and the federal government cannot effectively oversee and implement Medicaid expansion. The GAO found errors in Medicaid eligibility determinations that could lead to misspending of funds. Likewise, 

the Inspector General found troubling evidence that the federal government failed 

to implement requirements in the Patient Protection and Affordable Care Act that 

were supposed to improve program integrity and root out waste, fraud, and abuse. 

While we all acknowledge there are serious weaknesses and deficiencies in how 

this program operates, we also recognize the responsibility of the federal government to provide a safety net to the most vulnerable among us. That means ensuring 

that taxpayer dollars are spent in a way that actually improves health outcomes 

and serves the Medicaid beneficiaries in need. 

Tomorrow, the Health Subcommittee will discuss legislative solutions to strengthen Medicaid. But as we move forward with legislation, we must also be careful not 

to repeat or worsen problems that already exist in the program. As we will hear 

from our witnesses today, we have a lot of work to do. 

I would like to thank our witnesses for appearing today, and look forward to an 

informative discussion. 

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Ms. DEGETTE. Thank you very much, Mr. Chairman. It’s good to 

be back for another session of Congress. 

5 

We have two new members on our side of the aisle on this subcommittee this year, and I am so happy to welcome them. Dr. Ruiz 

is here with us at the end. He’s an actual emergency room doctor, 

and he’ll be able to bring us so much great perspective on issues 

like this hearing and other hearings. 

And then Scott Peters, who’s not here at this moment, I am 

pleased he’s here. He and I comprise two-thirds of the NYU law 

graduate delegation to Congress. So I am happy we’re loading up 

this committee with NYU law grads. 

I think I’d be deceiving myself if I thought that today’s hearing 

was intended to actually strengthen the Medicaid program. Although I hope it’s not so, I fear that this discussion about Medicaid 

is intended to lay the groundwork for drastic cuts to the program 

and eventually to repeal the Affordable Care Act’s historic Medicaid expansion. So I’d like to talk a few minutes about the importance of this program and what Medicaid expansion has accomplished for the American people. 

Today, more than 70 million low-income Americans, including 

seniors, children, adults, and people with disabilities, have access 

to quality health care, thanks to Medicaid. And contrary, frankly, 

to what my colleagues on the other side of the aisle think, the Medicaid program delivers this care efficiently and effectively. The 

costs per beneficiary are actually substantially lower than for private insurance and have been growing more slowly per beneficiary. 

Numerous studies have shown that Medicaid has helped make 

millions of Americans healthier by improving access to primary and 

preventative care and by helping Americans manage and treat serious disease. In fact, the Medicaid program literally saves lives. Research published in the New England Journal of Medicine reported 

that previous expansions of Medicaid coverage for low-income 

adults in Arizona, Maine, and New York actually reduced deaths 

by 6.1 percent. The ACA’s historic Medicaid expansion has let 

states build on this record of success and provide insurance to millions of Americans who otherwise would not have had access to 

health care. 

Last year—and we need to think about this—more than 12 million low-income adults had healthcare coverage because of the Medicaid expansion. This is astonishing. And combined with other important provisions of the ACA, this has helped drive the uninsured 

rate to the lowest level in our country’s history. 

It’s important to note these are not people who shifted from private insurance to the Medicaid expansion; this is people who had 

no insurance and were using the emergency rooms as their primary 

care facilities. In Colorado, for example, the rate of the uninsured 

was cut in half since the enactment of the ACA and through the 

expansion of Medicaid. 

Now, aside from the benefits that have accrued to the people, 

Medicaid has actually resulted in tremendous savings for the 

states. Hospitals nationwide have seen their uncompensated care 

burden drop by $10.4 billion since the ACA became law. Denver 

Health Medical Center, which is in my district, this week reported 

to my office that their uncompensated care claims actually fell by 

30 percent since passage of the ACA. This is real savings. And also, 

6 

we know that Medicaid is helping people get access to vital health 

care services. 

I had a listening session last week in Denver about the ACA. I 

had 200 people show up at this listening session. And most of the 

people who told their heartrending stories talked about how they 

were employed, but they couldn’t afford private insurance. And due 

to the Medicaid expansion, they now had mental health services. 

They had drug treatment and opioid treatment services. They had 

services for catastrophic accidents that they have had, and on and 

on. It got to the point where I literally had to take a packet of Kleenex out of my purse and put it on the podium, because everybody, 

including my staff and myself, were in tears listening to these stories. This is what the majority wants to take away and this is what 

we’re talking about. 

We can all talk about eliminating waste, fraud, and abuse in the 

program. We’re all for that, and I would support that 100 percent. 

But taking away vital health care for so many millions of Americans is wrong, and we must fight against taking that important 

benefit away. 

I yield back. 

Mr. MURPHY. The gentlelady yields back. 

And we don’t have anybody else on our side of the aisle who 

wants to give an opening statement. I believe Mr. Walden is detained in a meeting and he will come back later. Perhaps over 

there. 

Mr. Pallone, do you want to be recognized for 5 minutes? 

The ranking member of the committee, Mr. Pallone, is recognized 

for 5 minutes. 

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

Mr. PALLONE. Thank you. Thank you, Mr. Chairman. It’s great 

to be back in our room here today. It looks really nice. 

For 7 years now, Congressional Republicans have railed against 

the Affordable Care Act with a steady drumbeat of repeal and replace, and for 7 years they have sabotaged implementation of the 

law. And here we are today, Republicans are misleading the public, 

in my opinion, with falsehoods that the law is failing, and that 

could not be further from the truth. 

The truth is, after 7 years of claiming they could do better, they 

have no plan to replace the Affordable Care Act. The subcommittee 

should be evaluating the impact that repeal would have on the 

American people and the national healthcare system, but instead, 

Republicans are holding yet another hearing to highlight their ongoing opposition to the law’s Medicaid expansion, despite clear evidence that the expansion has made health care affordable and 

available for the first time to 12 million people nationwide. 

Tomorrow and Thursday, the committee is holding hearings on 

what Republicans consider to be the first pieces of the GOP 

healthcare replacement plan. But the fact is that none of these bills 

will prevent 30 million Americans from losing their healthcare coverage. None of them will reduce the chaos in the healthcare system 

7 

that will inevitably result if Republicans successfully repeal the Affordable Care Act. 

The fact is, Republicans are already creating uncertainty and instability in the individual market. This instability will ultimately 

result in reduced consumer choice, higher premiums, and will endanger the health and welfare of millions of Americans. In other 

words, the Republican-made chaos in the healthcare system has already begun. 

And, of course, we’re seeing the same thing with the President’s 

immigration executive orders. I just hope that at some point our 

GOP colleagues join us against what I consider reckless and rash 

actions and oppose President Trump’s actions. 

Congressional Republicans continue to ask the American people 

to trust them and they have a plan and that somehow everything 

will be OK. They’ve repeatedly assured the American public that 

no one will lose coverage with a Republican replacement plan, a 

claim that President Trump and his advisers also continue to 

make. 

But recently released audio at a closed-door meeting from the Republican retreat last week confirms that they simply have no plan. 

At that meeting, Republicans admitted that repealing the Affordable Care Act could eviscerate coverage for the roughly 20 million 

Americans now covered through state and Federal marketplaces as 

well as those covered under the Medicaid expansion. In fact, one 

Republican member at the retreat warned, and I quote: ‘‘We’d better be sure that we’re prepared to live with the market we’ve created with repeal.’’ 

So my Republican colleagues are also trying to claim that the Affordable Care Act is already collapsing under its own weight and 

that the replacement plan will, ‘‘rescue the American people from 

ObamaCare.’’ Republicans are so scared to own the chaos they are 

causing, they’re trying to pretend that the law is imploding on its 

own, which could not be further from the truth. 

Americans today have better health coverage and health care, 

thanks to the Affordable Care Act. The law’s Medicaid expansion 

has helped improve the quality, accessibility, and affordability of 

health care for millions of Americans. And my colleagues would be 

wise to consider the impact that their actions will have on the millions of Americans who are currently benefitting from the Affordable Care Act. 

If my Republican colleagues finally took their ideological blinders 

off, they would realize that the Affordable Care Act should not be 

repealed. And I say this because I don’t really care about the ideology. The fact of the matter is that real people are going to be 

harmed if the Affordable Care Act is repealed, and I hope that at 

some point my Republican colleagues will admit that and that we 

can work together to improve the healthcare system. 

I yield back. 

Mr. MURPHY. The gentleman yields back. 

And we’ll move forward now with our witnesses. I want to ask 

unanimous consent, however, that the members’ written opening 

statements be introduced into the record. And, without objection, 

the documents will be entered into the record. 

I’d now like to introduce our five witnesses for today’s hearing. 

8 

First up, we have Ms. Carolyn Yocom, director of health care at 

the U.S. Government Accountability Office. 

Next we welcome Ms. Ann Maxwell, Assistant Inspector General 

in the Office of Evaluation and Inspections in the U.S. Department 

of Health and Human Services, Office of Inspector General. 

Next, we want to welcome Mr. Paul Howard, who is a senior fellow and director of health policy at the Manhattan Institute. 

As well as Mr. Josh Archambault, senior fellow at The Foundation for Government Accountability. 

Last, we welcome Mr. Timothy M. Westmoreland, professor from 

practice, and senior scholar in health law at Georgetown University 

Law Center. 

Welcome all of you. Thank you to all our witnesses for being here 

today, providing testimony before the subcommittee. I look forward 

to hearing from you on this important issue. 

Now, you are aware that the committee is holding an investigative hearing and when doing so has the practice of taking the testimony under oath. 

Do any of you have any objection to testifying under oath? 

Seeing no objections, we’ll move forward. 

The chair then advises you are, under the rules of the House 

Rules Committee, entitled to be advised by counsel. Do you desire 

to be advised by counsel during your testimony today? Seeing nothing there too. 

In that case, if you’ll please rise, raise your right hand, I’ll swear 

you in. 

[Witnesses sworn.] 

Mr. MURPHY. Seeing all witnesses answered in the affirmative, 

you are now sworn in and under oath, subject to the penalties set 

forth in Title 18, Section 1001 of the United States Code. 

We’re going to call upon you each to give a 5-minute summary 

of your statement. 

I don’t know if they’ll light up in this room yet. Is there some 

lights down there that will go on for them when they are—we’ll 

see. Is there something right in front of you? Green means keep 

talking; yellow means finish up; and then red means stop. So we 

want you to keep on time. 

So Ms. Yocom, you may begin. You are recognized for 5 minutes. 

9 

TESTIMONY OF CAROLYN L. YOCOM, DIRECTOR, HEALTH 

CARE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; ANN 

MAXWELL, ASSISTANT INSPECTOR GENERAL, OFFICE OF 

EVALUATION AND INSPECTIONS, OFFICE OF INSPECTOR 

GENERAL, DEPARTMENT OF HEALTH AND HUMAN SERVICES; PAUL HOWARD, SENIOR FELLOW, DIRECTOR, HEALTH 

POLICY, THE MANHATTAN INSTITUTE; JOSH ARCHAMBAULT, 

MPP, SENIOR FELLOW, THE FOUNDATION FOR GOVERNMENT ACCOUNTABILITY; AND TIMOTHY M. WESTMORELAND, 

J.D., PROFESSOR FROM PRACTICE, SENIOR SCHOLAR IN 

HEALTH LAW, GEORGETOWN UNIVERSITY LAW CENTER 

TESTIMONY OF CAROLYN L. YOCOM 

Ms. YOCOM. Chairman Murphy, Ranking Member DeGette, and 

members of the subcommittee, it is a pleasure to be here today to 

discuss actions needed to prevent improper payments in Medicaid. 

Medicaid finances health care for a diverse population, including 

children, adults, people who are elderly, or those with disabilities. 

It also offers a comprehensive set of acute and long-term 

healthcare services. 

Medicaid is one of the largest programs in the Federal budget 

and one of the largest components of State budgets as well. In fiscal year 2016, Medicaid covered about 70 million people, and Federal expenditures were projected to total about $363 billion. Unfortunately, over 10 percent of these expenditures, over $36 billion, 

are estimated to be improper, that is, made for treatments or services that were not covered by the program, were not medically necessary, or were never provided. 

The program’s size and diversity make it particularly vulnerable 

to improper payments. By design, Medicaid is a Federal-State partnership, and states are the first line of defense against improper 

payments. The states have responsibility for screening providers, 

detecting and recovering overpayments, and referring suspected 

cases of fraud and abuse. At the Federal level, CMS supports and 

oversees state and program integrity efforts. 

In 2010, the Patient Protection and Affordable Care Act gave 

CMS and States additional provider and program integrity oversight tools. The act also provided millions of low-income Americans 

new options for obtaining health insurance coverage through possible expansions of Medicaid or through an exchange, a marketplace where eligible individuals may compare and purchase health 

insurance. 

My statement today focuses on four key Medicaid program integrity issues that we have identified, steps CMS has taken, and the 

related challenges that the agency and States continue to face. 

First, with regard to ensuring that only eligible individuals are 

enrolled in Medicaid, CMS has taken a variety of steps to make the 

Medicaid process more data-driven, yet gaps exist in their efforts 

to ensure the accuracy of Federal and State enrollment efforts, including enrollment for those who are eligible as a result of the expansion. 

As one example, we found that Federal and selected state-based 

marketplaces approved Federal health insurance coverage and subVerDate Nov 24 2008 14:03 Jan 29, 2018 Jkt 037690 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-1 CHRIS
10 

sidies for 9 of 12 fictitious applications made during the 2016 special enrollment period. 

Second, efforts to improve oversight of Medicaid managed care. 

CMS has provided states with more guidance on methods of identifying improper payments made to providers and has acted in response to our recommendations on requirements for states to audit 

managed care organizations and providing States with additional 

audit support, but further actions are needed. In particular, encounter data, which allow states and CMS to track services received by beneficiaries that are enrolled in managed care, are not 

always available, timely, or reliable. 

Third, CMS has taken steps to strengthen the screening of providers. There are new risk-based initiatives for overseeing provider 

checks. And these are important steps, but there are additional 

challenges that remain to ensure that the databases check eligibility and that states can share information with each other on providers who are ineligible for coverage. 

Lastly, CMS has implemented a number of policies and procedures aimed at minimizing duplicate coverage between Medicaid 

and the exchanges. Our work did identify some duplicate coverage; 

and since our report, CMS has started conducting checks on duplicate coverage and intends to perform these checks at least two 

times per coverage year. This could save Federal and beneficiary 

dollars, but CMS needs to develop this plan a little more broadly 

and make sure that they are assessing the sufficiency of these 

checks. 

In closing, Medicaid is an important source of health care for 

tens of millions of Americans. Its long-term sustainability is critical 

and requires effective Federal and state oversight. 

Chairman Murphy, Ranking Member DeGette, and members of 

the committee, this concludes my prepared statement. I’d be 

pleased to respond to questions. 

[The prepared statement of Ms. Yocom follows:] 

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Mr. MURPHY. Thank you, Ms. Yocom. Now, Ms. Maxwell, you are 

recognized for 5 minutes. 

TESTIMONY OF ANN MAXWELL 

Ms. MAXWELL. Thank you. Good morning, Chairman Murphy, 

Ranking Member DeGette, and other distinguished members of the 

subcommittee. Thank you for the opportunity to appear before you 

today to discuss how to protect taxpayers and Medicaid patients 

from fraud, waste, and abuse. 

I first want to give you a sense of what Medicaid fraud looks like. 

It can be very complex and include very different kinds of schemes. 

For example, in one instance, we indicted the owners of a network 

of over 30 nursing homes and assisted living facilities that billed 

for services that patients didn’t need. In another example, we convicted a doctor for writing fake prescriptions for expensive drugs 

that were then sold on the black market or billed to Medicaid. It 

is exactly these type of schemes that highlight the need to protect 

Medicaid against unscrupulous providers who steal, at the expense 

of taxpayers, and put patients at risk. 

Today, I want to highlight actions that we can take to better protect Medicaid from these types of fraud schemes and other 

vulnerabilities facing Medicaid. State Medicaid agencies and the 

Centers for Medicare and Medicaid, known as CMS, share responsibility for funding as well as protecting Medicaid. And we recommend they focus on three straightforward program integrity 

principles: Prevent, detect, and enforce. 

First and foremost, CMS and states must prevent fraud, waste, 

and abuse. Focusing on prevention is critical and commonsense, 

but Medicaid programs sometimes fall short and end up chasing 

after providers to remove them from the program or to recover 

overpayments. 

State Medicaid agencies should know who they are doing business with before they give them the green light to start billing. To 

help with that, we recommend that states fully implement criminal 

background checks, conduct site visits, and collect accurate data 

about providers. 

In addition, to prevent incorrectly paying providers, we recommend that states learn from past administrative errors and 

proactively update their systems to prevent improper payments. 

Medicaid should only be paying the right amount for the right service. 

The next critical program integrity safeguard is the ability to detect fraud, waste, and abuse in a timely manner. Accurate data is 

an essential tool for doing this. However, as we’ve just heard and 

our work shows, national Medicaid data, including data from managed care companies, has deficiencies. Sophisticated data analytics 

exist to detect potential fraud, to detect patient harm, and even to 

target oversight, but they are ineffective without accurate and 

timely data. 

Further, without national Medicaid data, States cannot see the 

whole picture. For example, we found providers enrolled in one 

State Medicaid program that had been terminated by another 

state. But without shared data, States had no way of knowing this 

29 

and had to find out the hard way that they had enrolled fraudulent 

and abusive providers. 

Finally, it’s imperative to take swift and appropriate enforcement 

action to correct problems as well as to prevent future harm. 

Federal and State enforcement efforts have very high return on 

investment, yielding annual recoveries in the billions of dollars and 

imposing criminal penalties on thousands of wrongdoers each year. 

However, states face challenges in taking full advantage of their 

administrative authorities, including suspending provider payments and terminating providers, where appropriate. 

In addition, State Medicaid Fraud Control Units lack a key authority. Currently, these state units can investigate allegations of 

patient abuse that occur within institutions, but if that alleged 

abuse took place in a patient’s home or a different community setting, they cannot. Medicaid patients receiving services in their 

home should have as many protections as those in institutions. 

In closing, our work reveals a number of opportunities to improve 

Medicaid safeguards. In particular, a heightened focus on the program integrity principles of prevention, detection, and enforcement 

will help protect Medicaid now and as it evolves. Prioritizing program integrity will ensure that Medicaid funds are used as intended, to provide needed healthcare services and long-term nursing home care for those who are in the most need. 

We appreciate the committee’s attention to Medicaid program integrity. We’ve seen it strengthened in the last year, thanks to the 

efforts here in Congress, and we hope that our work will continue 

to be a catalyst for continued positive change. Thank you. 

[The prepared statement of Ms. Maxwell follows:] 

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Mr. MURPHY. Thank you, Ms. Maxwell. 

Now, Mr. Howard, you are recognized for 5 minutes. 

TESTIMONY OF PAUL HOWARD 

Mr. HOWARD. Thank you. Thank you, Chairman Murphy, Ranking Member DeGette, members of the committee. I’d like to thank 

you for the opportunity to testify today about Medicaid program 

oversight and ways we might strengthen the program. 

Medicaid is undoubtedly a vital component of the Nation’s safety 

net for low-income and vulnerable populations. But an open-ended, 

automatic Federal matching formula has had vast unintended fiscal consequences, both for the States and the Federal Government, 

often crowding out funding for other safety net services and supports that might have a bigger impact on the measured health of 

these populations and their prospects for continued economic mobility. 

As you know, Medicaid is a hybrid program that, on average, 

pays approximately 62 percent through its Federal match, although 

the upper limit is around 80 and the lowest match is 50 percent. 

This encourages States to maximize the drawdown of Federal dollars through a number of, sometimes legally questionable, funding 

designs that my colleagues at GAO and HHS OIG have just mentioned. This Byzantine funding structure makes it extraordinarily 

difficult for the Federal Government to oversee effectively program 

integrity. It also encourages wealthier States to spend more on 

their programs to draw down more Federal dollars. In a 2010 book, 

Mark Pauly and John Grannemann highlighted that the highest 

quintile of States by income spent 90 percent more than the lowest 

quintile of States. 

When it comes to waste, fraud, and abuse, we see New York 

State, which has historically spent much more than other states. 

Even though it has only 6 percent of the Nation’s population, it has 

spent approximately 11 percent of total Medicaid expenditures and 

spends 44 percent more per enrollee. The OIG also found that over 

a period of 20 years, the state had an improper payment rate for 

its state developmental centers, which the state was overpaid by 

$15 billion, simply because a payment structure that the state and 

the Federal Government agreed to in 1990 was never updated to 

reflect the fact that the state had, in fact, moved the disabled out 

of the developmental centers and into community supports. To the 

state’s credit, Governor Cuomo in 2011 created a Medicaid redesign 

team that began to address the program and began first by conceding that the program delivered poor value for beneficiaries and 

taxpayers. 

Since then, through a number of far-reaching highly aggressive 

reforms, including capping most of the state’s state spending outside of the disabled population, lowering that spending from 6.2 

percent to 4 percent, the state has saved hundreds of millions of 

dollars, shifted an emphasis from institutional care to community 

care, and begun to address some of the behavioral components of 

poor helth that leave these populations using disproportionately 

emergency rooms. 

The right way to view our healthcare dollars is not to say that 

Medicaid has per-unit costs that are very low and, thus, it’s more 

44 

efficient. The better question to ask is, are dollars that we’re automatically spending on Medicaid, might they be better purposed to 

other programs, either an expanded state income earned tax credit, 

supportive housing for the seriously mental ill, or any other support or service that might have a bigger impact on improving measured health outcomes. 

My colleague Oren Cass last year put out a very important study 

that noted from the period of 1975 to 2012, our spending on lowincome supports had doubled, but that 90 percent of the increase 

had gone to health care. He estimated that if our median spending, 

either by enrollment or per enrollee, was nationalized, we could 

save as much as $100 billion annually, and that is money that 

could be placed elsewhere in other support programs. 

In short, we have thickened one strand of our safety net for lowincome Americans while neglecting others. If the safety net feels 

threadbare in places, it’s because we have encouraged the states to 

overspend on health care. What I’m not saying is that Medicaid has 

no value. There is clear research that shows that Medicaid has an 

extraordinary rate of return on investments in maternal health and 

child health. 

But large rigorous, randomized, controlled experiments like the 

Oregon experiment have, as the chairman said, showed no increase 

in measured health outcomes. Other studies continue to show that 

the social determinants of health have a much bigger impact on 

mortality, obesity, asthma, and mortality from cancers like lung 

cancer, than simply spending more money on health insurance per 

se. 

I’d like to suggest just a few ways we could address this disparity 

in conclusion. We should agree on broader safety net goals that 

hold the states responsible for meeting them in ways that are 

transparent both to the states and the Federal Government. 

We should reform the financing incentives of the program to ensure that we’re not incentivizing states to automatically funnel additional Federal dollars to health care. They might choose to do so, 

but we shouldn’t effectively bribe them to do so. 

And finally, CMS should continue to give more leeway to the 

states in programming, designing, and spending Medicaid dollars, 

including on nonhealth supports. 

I believe that these reforms would serve both conservative and 

liberal ends and should be the focus of the 115th Congress. Thank 

you very much. 

[The prepared statement of Mr. Howard follows:] 

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Mr. MURPHY. Thank you, Mr. Howard. 

Mr. Archambault, you are recognized for 5 minutes. 

TESTIMONY OF JOSH ARCHAMBAULT 

Mr. ARCHAMBAULT. Chairman Murphy, Ranking Member 

DeGette, and members of the committee, my name is Josh 

Archambault and I work at the Foundation For Government Accountability, a think tank that is active in 37 States, specializing 

in health and welfare reform. 

This morning, I’d like to highlight how the ACA’s Medicaid expansion has worsened problems for the truly needy, and I’d like to 

start with a video. 

[Video played.] 

Mr. ARCHAMBAULT. Sadly, Skyler’s story represents just one of 

nearly 600,000 individuals currently sitting on waiting lists for 

Medicaid services. Individuals with developmental disabilities, 

traumatic brain injuries, and mental health disorders who are less 

likely to receive the needed care now that Medicaid has been expanded. 

The ACA expanded Medicaid to a brand new population, which 

consists largely of childless, able-bodied adults who are working 

age, and have only dimmed the hopes further for families like 

Skyler. 

But the problems go much farther beyond situations like hers. 

The Governor of Arkansas, due to expansion costs, has proposed 

nearly a billion dollars in cuts to traditional Medicaid, primarily 

from patients with expensive medical needs, the developmentally 

disabled, and the mentally ill is what he said. 

So why is this happening around the country? The new 

ObamaCare expansion population is awarded a higher match rate. 

This funding formula has pernicious unintended consequences. Let 

me explain it this way: If a state needs to balance its budget, which 

they all do need to every year, state officials have to turn to Medicaid, because it’s the biggest line item, also growing faster than 

revenue. If you want to save one state dollar in state funds, on average, you need to cut just over $2 from the traditional Medicaid 

population, the aged, the blind, the disabled, pregnant women, and 

children. But if they want to save that same $1 in state funds for 

the expansion population, this year they need to cut $20. I know 

you all can guess who faces cuts first, and it’s heartbreaking. 

Over enrollment under ObamaCare’s Medicaid expansion will encourage states into even deeper cuts. Data from 24 of the expansion 

states show that enrollment has been over by 110 percent on average, more than double initial estimates. The cost overruns have 

been significant. Just to name a few, California found themselves 

222 percent over budget; Ohio, $4.7 billion or 87 percent over budget. These enrollment and budget trends mean fewer resources for 

the truly needy. 

Now, history could have warned us of this. Arizona and Maine 

both expanded Medicaid to the same able-bodied childless adult 

population before the ACA, and both had to take measures to rein 

in costs. Arizona had to stop a number of organ transplants. Maine 

capped enrollment, created wait lists. This happened even without 

63 

the lopsided extra funds that follow expansion enrollees, which 

brings me to my last point, concerns over eligibility issues. 

FGA’s work around the country has found deep systemic problems. First, states need to be checking eligibility far more frequently; and second, states need to be checking more data when 

they check eligibility. Life changes such as moving out of state, getting a raise, or death are going unnoticed for far too long, and 

meanwhile, states continue to cut checks to managed care companies for cases that no longer qualify for the program. 

My written testimony highlights a couple of those states that 

have had bipartisan success in tackling this waste and fraud, but 

much more is needed. Thank you. 

[The prepared statement of Mr. Archambault follows:] 

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Mr. MURPHY. Thank you. 

I now recognize Mr. Westmoreland for 5 minutes. 

TESTIMONY OF TIMOTHY M. WESTMORELAND 

Mr. WESTMORELAND. Mr. Murphy, Ms. DeGette, and members of 

the committee—subcommittee, thank you for the invitation to 

speak today. 

I take a backseat to no one on program integrity issues in the 

Medicaid program. People who care about Federal programs have 

to work to ensure that Federal funds are well used. Program integrity problems are, however, not new. Military contractors cheated 

the Union Army during the Civil War. Where money is being 

spent, whether it be private, State, or Federal, and no matter how 

good the cause, there are bad actors trying to steal it. 

Program integrity efforts are especially important in Medicaid. 

This is because billions of dollars are at stake, as are the health 

and well-being of most vulnerable people in America. This importance is well illustrated by the fact that at the same time the ACA 

expanded Medicaid coverage, it also made significant improvements in program integrity efforts. 

But as important as combatting fraud and abuse in Medicaid is, 

policymakers should keep it in perspective. As big as they are, the 

numbers must be viewed as what they are and as a whole. 

First, we should be careful about our terms. Not all of what is 

labeled improper payments, in the vernacular, is fraud or even mistaken. Most are appropriate, but simply badly documented, and 

may even be underpayments. And the actual loss to the government is much smaller than it may appear. The OIG and the GAO 

footnotes in my testimony cite to this terminology. 

But, as the prepared statements of GAO and OIG witnesses at 

today’s hearing have outlined, HHS has already implemented many 

efforts to address the more serious problems of program integrity. 

Some of these efforts are longstanding and some of them are just 

underway, but there are many efforts focused on making sure that 

Medicaid is spending its money well, and they are having an effect. 

But I am especially concerned today that policymakers often respond to waste, fraud, and abuse with blunt instruments aimed at 

the wrong targets. Any review of the actual Medicaid program dollars that were stolen or misspent will reveal that the major culprits 

are unscrupulous providers. Pharmaceutical companies that price 

gouge, equipment suppliers that don’t deliver, and Medicaid mills 

of doctors, dentists, and clinics that provide unnecessary services if 

they provide services at all. But all too frequently, the political and 

legislative response is to institute cuts or restrictions on beneficiaries and the providers who actually care for them. 

There is simply nothing in the recent reviews of program integrity that justify the policy proposals that are now on the table and 

before this committee. Reduced/capped Federal funding does nothing to improve program integrity, but it does put coverage at risk 

for low-income Americans and shifts the cost for the most expensive services to States, localities, providers, and charities. This is 

wrong. 

Program integrity problems are meaningful only when they are 

considered in the context of the many successes of the Medicaid 

83 

program. For example, the Medicaid expansion of the ACA means 

that 11 million people have Medicaid coverage who did not have it 

3 years ago. The percentage of people without insurance in America 

is at an all-time low of 8.9 percent. The burden of uninsured care 

in hospitals in expansion states is down 39 percent, and costs to 

those states are commensurately lower. 

Rural hospitals in expansion states are at half the risk of closure 

of those in nonexpansion states. Community health centers are seeing 40 percent more patients. People with serious mental illnesses 

are 30 percent more likely to receive services in the expansion 

states. Services for opioid addiction are available to working-age 

adults, often for the first time. 

The Medicaid expansion of the ACA has fundamentally repaired 

a longstanding mistake in the program. People always had to fit 

into some sort of category, but this categorical eligibility has never 

made sense. Poor women need health insurance both before and 

after they have babies. Poor children keep needing health insurance even when they turn 19. Poor people with chronic illnesses 

need health insurance before they become disabled. Poor older 

adults need health insurance when they are 64, not suddenly when 

they are 65. 

The real problems here are poverty and uninsurance. In the 32 

states that have adopted the Medicaid expansion, where making 

this part of the insurance system finally make sense, and be fair 

for vulnerable people. Please do not turn back this response. 

Lincoln did not give up on the Civil War because the government 

was sold bad mules. We do not stop buying drugs because 

drugmakers charge fraudulent prices. We punish the wrongdoers, 

correct the price, and get the treatment to the people in need. That 

is what should be done here. Don’t reverse all this progress by 

rationalizing that program integrity problems demand wholesale 

legislative changes in Medicaid. There are real babies in that bath 

water. 

Thank you. 

[The prepared statement of Mr. Westmoreland follows:] 

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Mr. MURPHY. Thank you. 

I now recognize myself for 5 minutes of questioning. 

Ms. Yocom, your October 2015 report found gaps that limit 

CMS’s ability to check for different eligibility groups. Newly eligible 

under expansion—the newly eligible under expansion and previously eligible are appropriately matched with Federal funds. 

Now, in the Federal facilitated exchange states, CMS will not be 

able to assess the accuracy of eligibility determinations until 2018. 

Does this create the potential for improper payments then? 

Ms. YOCOM. Well, it certainly creates a lot of uncertainty about 

what is going on with eligibility and whether progress is being 

made. The decision to suspend the estimate of eligibility was based 

on trying to give States time to understand the new rules and the 

new range of matching rates that could be applied. 

From our perspective, though, transparency of the process and 

how it is proceeding would not be a bad thing. It would be good 

to know what’s going on. 

Mr. MURPHY. OK, thank you. In States that determine eligibility, 

GAO found that eight out of the nine States audited identified eligibility determination errors and improper payments associated 

with those errors. Are those errors reflected in the CMS eligibility 

determination error rate, and does CMS correct these errors, and 

why or why not? 

Ms. YOCOM. Right now, they are not reflected in the eligibility 

rate estimates that CMS puts out. Instead, there is a rate that was 

produced a couple of years ago of 3.1 percent, and that’s being applied until 2018. 

Mr. MURPHY. Why is it applied until 2018? 

Ms. YOCOM. I’m not sure of the reasoning for that year. I think 

time, I guess. 

Mr. MURPHY. Was that an accurate number? You said that 1 percent. Is that an accurate number that’s being applied? 

Ms. YOCOM. It’s a number I believe that goes back to 2013 or 

2014. 

Mr. MURPHY. Just continuing that on. So this relates to my next 

question. I’ve heard that CMS has put a freeze on measuring eligibility determinations for Medicaid. What does this freeze mean, 

and how will we will measure eligibility errors and improper payments? 

Ms. YOCOM. It means that we’re relying on an error rate that’s 

about 3 or 4 years old, yes, and that we don’t right now know 

what’s going on with the eligibility determinations. 

Mr. MURPHY. So we’re using old data that’s not accurate anymore. We’re asking a question, what’s the error rate? You’re saying, we don’t know, so we’re going to use a number from a few 

years ago? 

Ms. YOCOM. That is correct. 

Mr. MURPHY. OK. Now, so if a parent asks their child, how did 

you do on your report card, and they say, got all As, it could be 

accurate, except if you’re maybe dealing with a high school senior 

that you didn’t ask specifically and say, I’m just assuming the 

grades I got in third grade, I’m just continuing to carry those over 

year to year, so I’m a valedictorian. Now, that doesn’t make sense, 

of course, but you’re saying the same thing applies here? 

94 

Ms. YOCOM. Yes. Right now, they are not publishing or I believe 

even calculating an improper payment rate right now. They are 

working with the states on a state-by-state basis. 

Mr. MURPHY. So when people make a statement everything is 

fine, these are staying pretty stable, we just have inaccurate data 

we’re working with. See, we want to fix this, but we don’t have accurate data to help us know how big the problem is. Is that correct? 

Ms. YOCOM. At this point, we don’t know. 

Mr. MURPHY. OK. Mr. Archambault, since we can’t measure the 

actual eligibility improper payments due to this freeze that’s been 

imposed in the past administration, let’s try and get an idea of the 

types of eligibility errors and how much they cost the Federal Government. 

Do you have any examples from your work of improper eligibility 

determinations and how that translates to improper spending? 

Mr. ARCHAMBAULT. Sure. There’s a couple of states that I highlight in my written testimony. 

In Illinois, in 2012, they passed a law to hire an outside thirdparty vendor to look at eligibility errors. And their track record has 

actually been quite impressive. In their first year, they found about 

300,000 individuals who are ineligible for Medicaid; and in their 

second year, they actually found 400,000 individuals who were ineligible for their program. 

And it runs the gamut from individuals who had passed away in 

the 1980s who were still on their program to individuals who were 

simply moving out of state, got a raise, didn’t report that information. The State of Arkansas recently also did a review of their Medicaid program and found things like 43,000 individuals who didn’t 

live in the state who remained on their Medicaid program, 7,000 

of who had never lived in the state. 

Mr. MURPHY. Are those people who are making Medicaid claims, 

do we know? 

Mr. ARCHAMBAULT. So in many cases, this is why it’s so important. As states have moved towards the managed care environment, it almost doesn’t matter. States continue to cut a check to 

managed care companies regardless of whether those individuals 

are showing up to the doctor or not. That’s why this is even more 

important now that states have moved in that direction. 

Mr. MURPHY. So it’s hundreds of thousands of people are in this 

category that they’re still getting paid even though they’re not 

alive, in the state, or getting care. 

Mr. ARCHAMBAULT. Correct. In some cases, it’s just waste. If 

somebody moves and is still Medicaid eligible, we just want to 

make sure two States aren’t paying two different managed care 

companies for their care. In other cases, it’s outright fraud. 

Mr. MURPHY. Do we have a total dollar value for that? 

Mr. ARCHAMBAULT. When you’re not measuring, it’s very hard to 

see. But I will say that my written testimony goes through and documents a number of State audits that show eligibility is a huge 

issue when it comes to applications. 

Mr. MURPHY. Thank you. My time is expired. 

Ms. DeGette, 5 minutes. 

Ms. DEGETTE. Thank you, Mr. Chairman. 

95 

Ms. Maxwell, you talked about the complex investigations that 

your agency is undertaking into some of these Medicaid fraud 

issues. These investigations involve large numbers of personnel 

and also technical support. Is that right? They’re complex investigations, correct? 

Ms. MAXWELL. Absolutely. We partner with the State Medicaid 

fraud control units. 

Ms. DEGETTE. And do you know approximately how many people 

at your agency are involved in these investigations? 

Ms. MAXWELL. Well, in some respects, we all are. So even though 

the Inspector General has a cadre of inspectors, we’re also auditors, 

evaluators, lawyers, and all of us contribute to the fraud-fighting 

efforts of the Inspector General’s Office. 

Ms. DEGETTE. OK. Are you familiar with the executive order 

that President Trump issued on January 22nd, in which he said 

that, ‘‘No vacant positions existing at noon on January 22nd, 2017, 

may be filled and no new positions may be created except in limited circumstances’’? 

Ms. MAXWELL. I am familiar with that. 

Ms. DEGETTE. Has your agency determined will that freeze the 

hiring at your agency? 

Ms. MAXWELL. Given that it’s quite new, there hasn’t been an assessment yet of how that will affect the OIG, but I can tell you, 

as you have pointed out, that the work that we do does rely on personnel. We use sophisticated data analytics. 

Ms. DEGETTE. Let me stop you then. If the personnel at your 

agency, the hiring was frozen, what would that do to your ongoing 

fraud investigations? 

Ms. MAXWELL. We would need to double down and do as much 

as we could with the resources that we have. 

Ms. DEGETTE. Would it impact those investigations? 

Ms. MAXWELL. Absolutely. We need the personnel to analyze the 

data in order to fight fraud most effectively. 

Ms. DEGETTE. Thank you. 

Now, I wanted to ask you a quick question, Mr. Archambault, 

and the question I wanted to ask you, you showed that really 

heartrending tape about the young girl who was on a waiting list 

for quite some length of time for the care she needed. She was in 

Arkansas, is that correct? 

Mr. ARCHAMBAULT. Correct. 

Ms. DEGETTE. And the Governors of the States decide whether 

they are going to use that money for cases like that or others—they 

decide how they’re going to use the Medicaid money that comes to 

their states. Isn’t that correct? 

Mr. ARCHAMBAULT. Within limits. 

Ms. DEGETTE. Yes. 

Mr. ARCHAMBAULT. The Federal Government sets the guidelines 

by which they have to—— 

Ms. DEGETTE. But the Governor of Arkansas decided where that 

money would be spent and decided not to put it into that kind of 

a program. Is that right? 

Mr. ARCHAMBAULT. Again, the question and point that I am trying to make—— 

Ms. DEGETTE. No. My question is yes or no. 

96 

Mr. ARCHAMBAULT. As far as the wait list is concerned? 

Ms. DEGETTE. The Governor decided how to allocate that money. 

Is that correct? 

Mr. ARCHAMBAULT. They have funds that come in, and they can 

decide to invest in buying down a wait list. 

Ms. DEGETTE. And that’s the Governor that decides that. 

Mr. ARCHAMBAULT. In a nonexpansion state, we have seen states 

buy down their wait list. 

Ms. DEGETTE. OK, thank you very much. Yes or no would have 

worked. 

I want to ask you, Mr. Westmoreland, a couple questions. Now, 

uncompensated care costs are what hospitals pay for patients that 

cannot pay their bills. Is that correct? 

Mr. WESTMORELAND. Yes. 

Ms. DEGETTE. Who bears the cost of uncompensated care? 

Mr. WESTMORELAND. It’s a complicated question, but the direct 

costs are usually borne by state and municipal governments, because they pay for public general hospitals. 

Ms. DEGETTE. And then where do they get their money from? 

Mr. WESTMORELAND. By and large, they get their money from 

taxpayers. 

Ms. DEGETTE. OK. Now, I talked in my opening statement about 

how the ACA Medicaid expansion is driving uncompensated care 

costs lower. Can you briefly explain why that’s correct? 

Mr. WESTMORELAND. Yes. If a hospital is dealing with people 

who have no source of insurance, it, by and large, can provide the 

services and then chase them down. And people oftentimes have no 

money or declare bankruptcy. 

In the instance in which they are insured, either through the exchanges or through the Medicaid program, then the hospital can 

turn to a third-party payer and they are no longer uncompensated 

care if they can get some payment from those insurances or from 

Medicaid. 

Ms. DEGETTE. OK. Now, some of the States that did not expand 

the Medicaid component of the ACA have not experienced as large 

a reduction in uncompensated care costs. Is that correct? 

Mr. WESTMORELAND. Yes. 

Ms. DEGETTE. And why is that? 

Mr. WESTMORELAND. Those states are still dealing with the same 

number of people without health insurance who are low income. 

The states who have expanded have a source to turn to, their Medicaid program, which is in the Medicaid expansion situation, largely paid for by the Federal Government. 

Ms. DEGETTE. Great. 

Thank you. I yield back. 

Mr. MURPHY. The gentlelady yields back. 

I now recognize Mr. Barton for 5 minutes. 

Mr. BARTON. Well thank you, Mr. Chairman. I am glad to be a 

part of the first oversight hearing. I’m glad we have some new 

blood on the subcommittee. We have a new doctor on the Democratic side. I’m glad to have him. We have Dr. Burgess on our side. 

So when the bloodletting begins, we’ll have two doctors that can 

take care of us and keep us going. 

97 

I want to focus the panel’s attention on a few numbers. The first 

number is 20 trillion. The second number is 325 million. Our national debt is about $20 trillion, give or take a trillion or two. We 

have around 325 million Americans. If you divide 325 million into 

20 trillion, you get about 66, 67 thousand dollars that every American owes of the national debt. 

Our hearing memo says there’s 70 million people that are covered by Medicaid. You subtract the 70 million people covered by 

Medicaid from 325 million citizens, it means there are 250 million 

Americans that owe not only their share of the national debt but 

also the $66,000, $67,000 times 70 million that the Medicaid recipients owe, because, by definition, Medicaid recipients are below the 

poverty level and they can’t pay it back. 

Those are big numbers. We’re spending at the Federal level 

about $350 billion a year, and the states are adding another $150 

billion. So we’re spending about $500 billion a year to provide 

health care for low-income Americans. That may or may not be sustainable, but we know that we can’t sustain adding half a trillion 

to a trillion dollars every year to the national debt. 

We all want to keep Medicaid, but we want to improve it, and 

that’s what this oversight subcommittee is looking at. How do we 

improve Medicaid so that we get more bang for the buck, real 

health care to real people that need it, and yet make it affordable 

so that taxpayers who are funding it can continue to fund it. 

Mr. Howard, you talked about, in your opening statement, a little 

bit about New York, with 6 percent of the population, getting 11 

percent of the Medicaid dollars. Do you want to explain to the subcommittee why that’s so or would you like for me to explain it? 

Mr. HOWARD. Thank you, Congressman. 

There is clearly an incentive, given the open-ended Federal 

match, for wealthier states, both because of ideology and simply because they have a larger tax base, to draw down more Federal dollars. It also inhibits attempts to pursue program efficiency. 

When you think of a state like New York, let’s say New York 

wanted to design a more efficient primary care program that saved 

a million dollars. Because of the 50 percent Federal match, it would 

have to cut spending by $2 million. So there’s a ratchet inherent 

in the open-ended Federal match that tends to bid up state spending for the states that have the funds to do it, but makes it very 

hard to turn the ratchet around and correct it and find more efficient ways to deliver care. And I think that’s a challenge facing the 

Nation, not just, of course, for Medicaid, but for private insurance 

and Medicare as well. 

In an environment where there is no incentive for providers to 

look outside the box, new ways to deliver care more efficiently, 

more cost-effectively, they simply don’t pursue those areas. 

I think some of the changes that Governor Cuomo has instituted 

in New York, if they were done by a Republican administration, I 

think we would have heard howls of outrage; but because it is a 

Democratic administration, you capped spending, you ended automatic payment increases. You did a lot of things that are very ‘‘progressive,’’ but are really nonpartisan ways to improve program efficiency. And I think that other states and the Federal Government 

98 

should look at ways to give states more program efficiency and better incentives. 

Mr. BARTON. Do you think it would be appropriate to look at the 

way the formula allocates Medicaid dollars per se to try to harmonize it with current low-income populations across the Nation? 

Mr. HOWARD. I think that’s an important tool. I think states 

would also really appreciate the opportunity to be able to spend 

Medicaid dollars on non-health-related supports that might actually—in terms of accessing other services—that might make those 

populations both more compliant with care and in better health in 

the long term. I think they would be very open to that. 

Mr. BARTON. My time is about to expire. I’m going to have some 

questions for the record dealing with block-granting programs back 

to the states. 

I do want to welcome Mr. Westmoreland back to the committee. 

Nobody yet has admitted it, but at one point in time, he was one 

of the brain trusts on the minority side and helped Mr. Waxman 

and Mr. Dingell actually create the Affordable Care Act. And we 

appreciate your expertise coming back before the committee. 

Mr. WESTMORELAND. It’s nice to be back in 2123. 

Mr. BARTON. I yield back, Mr. Chairman. 

Mr. MURPHY. We now recognize Mr. Pallone for 5 minutes. 

Mr. PALLONE. Thank you, Mr. Chairman. 

My questions are to Mr. Westmoreland. Mr. Westmoreland, Mr. 

Archambault made some claims illustrated with a video regarding 

one individual’s experience specifically with the Arkansas Medicaid 

program’s home and community-based services waiting list. And 

I’m concerned that Mr. Archambault in his testimony attributed a 

causal relationship between Medicaid expansion and HCBS waiting 

lists and that somehow the Medicaid expansion he claims exacerbates or causes these waiting lists. I don’t believe that to be true. 

I don’t think that the facts show that it’s true. I think the wait lists 

are a result of state decisions, and cutting or capping or blockgranting Medicaid will only make the situation worse. 

And I like to use anecdotes. I remember a couple years ago I 

went to a conference in Houston with Mr. Green. I think Mr. Burgess was there too. And in between the health conference, I went 

over to the Texas Children’s Hospital at the Medical Center, and 

I talked to the officials there. It was a beautiful place with this 

beautiful lobby, but literally people, particularly mothers with their 

children, were just literally camped out in the lobby of this place 

that looked like a hotel. And I asked, why are they all here? It was 

because they couldn’t access the emergency room because there 

were so many people that they were literally waiting for hours to 

use the emergency room with their kids. So this notion that somehow the Medicaid expansion is causing the waiting list—I think it’s 

just the opposite. I think that it’s the lack of Medicaid expansion 

in these states that’s causing the problems in most situations. 

In any case, let me just ask you some questions, Mr. Westmoreland. Can you provide some background on the HCBS waivers in 

the Medicaid program? Isn’t it true that the decision to have an 

HCBS waiting list is a state flexibility; that is, they are a direct 

result of state choices on the design of their Medicaid programs 

99 

and the amount of resources states make available to provide 

HCBS? 

Mr. WESTMORELAND. Yes. There’s no restriction at the Federal 

level on how much a state may turn to HCBS instead of to traditional institutional services. It’s a state decision. 

Mr. PALLONE. So, if I can just summarize, states decide whether 

to limit their HCBS waivers to a defined number of slots and to 

create waiting lists once those slots are filled, and CMS allows 

states to increase or decrease the number of slots as they wish. 

And isn’t it actually true that, in the case of Arkansas, the Federal 

Government would be willing to pay 69 percent of the cost of care 

if the state chose to increase the number of its slots and that, until 

January 1 of this year, the state was spending none of its own 

funds on the expansion population? 

Mr. WESTMORELAND. I have to admit I don’t know the specifics 

of the last part of your question, but other than that, I would say 

yes. It’s entirely a state decision, and Arkansas has made the decision of the size of the waiver. 

Mr. PALLONE. And isn’t it also true that 12 states and the District of Columbia have no waiting lists at all and that the overwhelming majority of those states that have no waiting lists have 

actually also expanded Medicaid? 

Mr. WESTMORELAND. I believe so, yes, sir. 

Mr. PALLONE. Isn’t it also true that the two states with the longest waiting lists are Texas and Florida, which have not expanded 

Medicaid—of course, I use my example, my anecdotal evidence 

there at the Children’s Hospital at the Texas Medical Center—but 

these are the two states that have the longest waiting lists? 

Mr. WESTMORELAND. I know that Texas and Florida have not expanded. I did not know that they were the longest waiting lists. I 

know that they have waiting lists. 

Mr. PALLONE. My problem is that I just think there’s no evidence 

that states are choosing to expand Medicaid or keep their expansions at the expense of vulnerable people waiting for HCBS and 

that examining state choices on both expansion and HCBS waivers 

actually leads to a contrary conclusion. If anything, all the Federal 

expansion dollars only strengthen the Arkansas economy and revenues and improve the finances of providers by reducing uncompensated care, as has been shown in multiple states around the Nation. I think it just makes basic sense. If states expand Medicaid, 

they’re getting 100 percent Federal dollars, and they have a lot 

more money to care for people; it’s only going to be natural that 

they have more money to spend on people who are eligible. So this 

notion that somehow, by cutting the expansion or eliminating the 

expansion, cutting Medicaid, getting rid of Medicaid, there’s no way 

in the world that that’s going to help the situation with people who 

are trying to seek care. They’re just going to end up in an emergency room. They’re going to be waiting for the emergency room. 

They’re not going to get preventative care. They’re not going to see 

a doctor. None of it makes sense. If you wanted to comment. 

Mr. WESTMORELAND. If I may, Mr. Pallone, I’d like to juxtapose 

your comment with that of Chairman Barton, who points out that 

possibly there will be proposals to block-grant and cap the Federal 

funding. I have to say that, if the Congress adopts capped funding 

100 

for Medicaid, we’re going to see more, not fewer, waiting lists. Less 

funding and the loss of the individual entitlement services is exactly what’s underlying the story in that video. And if the program 

is capped and Federal participation is limited, it will only get 

worse, not better. 

Mr. PALLONE. Thank you. 

Mr. MURPHY. Now I recognize the new vice chairman of the subcommittee, Mr. Griffith of Virginia. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

Mr. Archambault, get out your money. Are you ready? All right. 

So my understanding of your testimony was that you were, in fact, 

saying that the states have to make choices with their limited resources, and that the Federal Government under the ACA is going 

to lower its Medicaid expansion money down to 90 percent. As 

states find themselves with larger burdens than was anticipated 

when they expanded Medicaid, they have to make decisions on 

where it’s cut. And we have created through the ACA—and I say 

‘‘we’’ loosely because I wasn’t here when they voted on that—but 

the Congress and the government created a situation where the 

states are rewarded for cutting traditional Medicaid, which deals 

mostly with children and people who are in greater need, and that, 

because of that disincentive or that incentive to spend it on the 

new folks, the newly found under Medicaid, under the new categories, we create the situation where states are having to make 

a decision as to whether they quicken the shortage on the waivers, 

get rid of those waivers as fast as they can, or whether they spend 

that money somewhere else. Was my understanding correct? 

Mr. ARCHAMBAULT. Correct, Congressman. There’s both direct 

and indirect outcomes as related to expansion. And my point is 

that we are not fulfilling the promises to the most vulnerable in 

our society, wait list or not, but we are making new promises to 

an able-bodied population that does not qualify for long-term welfare benefits in any other place. And states are being put in a situation where they’re having to make very tough decisions and making cuts in reimbursement rates that directly impact those with developmental disabilities, those in nursing homes. The access and 

quality questions that have surrounded Medicaid for decades will 

only get worse for the truly needy. 

Mr. GRIFFITH. And so what you’re saying is we need to pay attention to that, and we need to make sure that we have incentives 

that encourage people to take care of the truly needy and the 

young. And maybe we need to refigure that formula out. That is 

what you’re saying? 

Mr. ARCHAMBAULT. Absolutely. I think as part of the repeal-andreplace discussion, as we’re talking about changing Medicaid going 

forward, it absolutely must be on the table. And we would strongly 

recommend looking at freezing new enrollment in expansion states 

and not allowing other states to expand so you can address this underlying issue of refocusing programs on the truly needy. 

Mr. GRIFFITH. We have a real habit of doing that. 

Mr. Howard, I want to ask you, and the reason I say ‘‘get your 

money out’’ is because I thought the $20 bill versus the $2 was 

very instructive, Mr. Archambault. 

101 

Mr. Howard, you touched on this, but you didn’t get into detail. 

We have a situation where, even in traditional Medicaid, we have 

rewarded states that play games. Virginia elected not to have a 

sick tax. That’s what it was called when there was a proposal a 

number of years ago, a couple decades ago, to start taxing the beds 

of the sick so that they could create that money and then put it 

into Medicaid and then get matching money from the Federal Government. Even though we were at a fairly low match, that would 

have given us those $2 from money that we collected from sick people. But many states have come up with these various schemes to 

get money by claiming that they’re charging more. And what 

they’re really doing is creating some kind of a sick tax scheme. And 

shouldn’t we put a stop to that—over time? I’m not saying we have 

to get rid of it immediately. But shouldn’t we over time be trying 

to get rid of that so that everybody knows what exactly they’re getting and not having to charge sick people money so we can get 

more money for Medicaid? 

Mr. HOWARD. The Federal Government has capped the amount 

of provider taxes that states are able to use, but still we’re talking 

a very significant amount of money. I think the last estimate from 

GAO was about $25 billion. Many, many states use these provider 

taxes. They use enhanced payment rates for state-owned facilities, 

intergovernmental transfers to draw down and raise their effective 

Federal match. 

Mr. GRIFFITH. And while they may be legal, there’s some real 

ethical questions about that, isn’t there? 

Mr. HOWARD. Well, it’s a real issue of program efficiency, absolutely. 

Mr. GRIFFITH. OK. Because I want to move on to something else. 

I heard somebody earlier say that ObamaCare wasn’t collapsing, 

and that was some myth. I got to tell you: We have got all kinds 

of numbers. Twenty-five percent average increase. Nearly a third 

of U.S. counties have only one insurer. A trillion in new taxes. 4.7 

million Americans had to change their healthcare plan because 

they got kicked off of the plan that they liked. All kinds of problems out there. 

But you know what I find instructive is anecdotal. It happened 

to me yesterday twice. After church, a group of us generally go to 

lunch. I try to stay out of politics at lunch, and a discussion broke 

out at the other end of the table I was not involved in where they 

were talking about, what do we do as we go forward? And one fellow said: Look, as a Christian, I don’t mind paying some more 

money, but when my insurance rates for my family have gone from 

to $450, $500, to $1,250 a year and I’m getting less insurance, it’s 

hurting my family. And that’s a problem. 

Later that evening, at a small group gathering of different people, there was a big discussion about whether or not a family could 

afford to justify spending money for their daughter, who had the 

flu—several families had been ravaged by flu over the last couple 

of weeks—because they, in order to afford health insurance, they 

had gotten such a high deductible; it was going to cost them $75 

to get Tamiflu. And they were debating whether or not they should 

do that if their other kids got it and what they should do as they 

102 

go forward. These are real-life examples of how ObamaCare is, in 

fact, failing the American people. 

I yield back. 

Mr. MURPHY. The gentleman yields back. 

I now recognize Ms. Castor for 5 minutes. 

Ms. CASTOR. Thank you, Mr. Chairman. 

Well, thank goodness for Medicaid in America, especially back 

home in Florida. 3.6 million Floridians rely on Medicaid for their 

health services. A lot of my neighbors in skilled nursing, Alzheimer’s patients, Medicaid is the lifeline for these families. Not to 

mention, 50 percent of children in Florida rely on Medicaid to go 

see the pediatrician and get their checkups, along with the State 

Children’s Health Insurance Program. And Florida didn’t expand 

Medicaid, so that 3.6 million number are really our neighbors in 

nursing home or community-based care or children or my neighbors 

with disabilities. And based upon what they tell me, Medicaid is 

working for them. It works. 

Medicaid spending growth is lower than private health insurance. It’s lower than Medicare. That’s because sometimes states try 

to get by on the cheap in paying providers. That’s one place for reform, that we could improve access if we would pay our providers 

a little bit more and do better there. Medicaid is flexible. I’ve 

watched in Florida as they’ve moved to a managed care system. I 

have questions about that, but that was a decision of the state. 

They had all that flexibility under Medicaid. They’ve also began a 

change toward more home and community-based services to help 

keep older folks out of skilled nursing, which can be very expensive. 

But we have to remain mindful about the fiscal cost and fiscal 

responsibility. That’s why, in the Affordable Care Act, we passed 

a lot of new program-integrity provisions to strengthen Medicaid. 

The most important provisions involved a shift from the traditional 

pay-and-chase model to a preventative approach by keeping fraudulent suppliers out of the program before they can commit fraud. 

All participating providers in Medicaid and CHIP programs must 

be screened upon enrollment and revalidated every 5 years. So 

think about that as you move toward repeal of the Affordable Care 

Act. Why would we want to repeal these important program-integrity provisions relating to Medicaid? I don’t think that’s the path 

that we all want to go down. 

What this is, though, I think the real fear is that this whole terminology of block grants and per-capita caps is simply a stalking 

horse for less care for my neighbors back in Florida and all Americans. For every Alzheimer’s patient, for every child that needs to 

go see the pediatrician, I want folks to be aware of what block 

grants and per-capita caps means because it sounds good. But what 

that means is devastation and sabotage to the Medicaid program. 

Mr. Westmoreland, describe the impact on the delivery of 

healthcare services to Americans if this approach is taken, block 

grants and per-capita caps. 

Mr. WESTMORELAND. As I understand some of the proposals that 

are Medicaid, the basic point is to limit Federal participation and 

the state costs of running the Medicaid program. As healthcare 

costs grow over time, the states will be left holding the bag for 

103 

those increased state costs, for Medicaid costs. And as changes 

occur in the population, as the baby boomer demographic enters 

into the population, as more and more services are provided for 

people with disabilities, as prescription drug costs go up, the increased cost over time will not be matched by the Federal Government. States will be left holding the bag. 

Ms. CASTOR. And isn’t it interesting that some Republican Governors believe this approach will have disastrous consequences for 

their ability to care for their older neighbors, neighbors with disabilities, and children. For example, a Republican Governor from 

Massachusetts, in a letter to Congressman Kevin McCarthy, stated: 

We are very concerned that a shift to block grants or per-capita 

caps for Medicaid would remove flexibility from states as the result 

of reduced Federal funding. States would most likely make decisions based mainly on fiscal reasons rather than the healthcare 

needs of vulnerable populations and the stability of the insurance 

market. 

Could you elaborate a little more what this would mean? In my 

state, they may not raise taxes. That’s the choice, though, isn’t it? 

Raise taxes to support our neighbors or cut? 

Mr. WESTMORELAND. If Federal participation is limited in these 

fashions, it’s the only way that would respond to Mr. Barton’s concerns about deficit reduction. If Federal participation is limited in 

that fashion, then the states will have a choice either of reducing 

the number of people that they serve, cutting back and rationing 

the services to those people, or raising state and local tax. 

Ms. CASTOR. And, Mr. Chairman, thank you. 

I’d like to ask unanimous consent to enter into the record, if anyone is interested in learning more about Medicaid, March of Dimes 

and a number of experts are having a lunch-provided forum tomorrow—or, excuse me, Thursday, February 2, 12:30 to 1:30, right 

here in Rayburn in the Sam Johnson Room, Rayburn 2020, to learn 

why Medicaid matters to kids. I encourage you all to attend. 

Mr. MURPHY. Could you send a copy over to me? Thank you. 

I now recognize Dr. Burgess for 5 minutes. 

Mr. BURGESS. Thank you, Mr. Chairman. 

I want to thank our panelists for being here today. Very, very interesting discussion. Certainly a very timely discussion. 

Ms. Yocom, let me ask you, Chairman Murphy was, I think, directing some of his questions about improper eligibility determinations, and one of the things that has concerned me for some time 

is the issue of third-party liability, a Medicaid patient who has actually other insurance but also has Medicaid. And my understanding is what happens is sometimes it’s hard to collect from the 

party of the first part, the commercial insurer. Medicaid is more 

straightforward, so you end up in a situation where the person who 

should be responsible for the bill, the insurance company who has 

been contracted to provide care for that patient, actually is inadvertently kind of let out of the equation because it just becomes 

easier to chase the dollars in the Medicaid system. Is that a real 

phenomenon? 

Ms. YOCOM. It is. We did some work, I believe in part for your 

office, that took a look at third-party liability on some of the issues 

that the Medicaid program encountered. Some of the issues are 

104 

about information systems and just being aware of the coverage, 

but then, even within that, it’s about the interaction between the 

State Medicaid programs and the insurance companies and being 

able to assert the fact that they should be paying first. 

Mr. BURGESS. So to what extent are the states able to address 

the underpayments by commercial insurers and the overpayments 

by Medicaid? 

Ms. YOCOM. We did make some recommendations to CMS to provide additional support and data on these issues. I would need to 

check to see whether or not they had been implemented and a little 

more about the specific. 

Mr. BURGESS. I’m given to understand that this is not a trivial 

problem, that there are a significant number of dollars involved. Is 

that correct? 

Ms. YOCOM. Yes, yes. 

Mr. BURGESS. And I think it’s safe to say that it does vary from 

state to state. Some states do better than others. So you, if I recall 

correctly, back in the mid-2000s, in 2005, 2006, 2007, you had created a list of states where the percentages of dollars left behind 

were attributed to each state. And there were some significant differences. I think Texas was kind of middle of the pack. Iowa did 

very well. Some other states did very poorly. Do I recall that correctly? 

Ms. YOCOM. I believe that’s right. And I think some of it is that 

the more health plans involved, I think the harder it can be. Some 

of the states that had a smaller group of insurers to work with I 

think were sometimes able to establish better relationships. 

Mr. BURGESS. Well, it just gets to the point. I mean, that was 

a GAO report of over 10 years ago. Is this problem fixable? Is it 

worth fixing? 

Ms. YOCOM. I think there have been some fixes done, but I’m not 

sure I remember well enough to tell you much more than that right 

now. 

Mr. BURGESS. OK. I’ll just let the subcommittee know there is 

some very insightful legislation coming on this subject, and I hope 

people will join me on that. 

Ms. Maxwell, let me to ask you: Just staying on the third-party 

liability issue, you’ve discussed Medicaid overpayments in regard to 

providers not reconciling credit balances with the state. Is that correct? 

Ms. MAXWELL. That’s correct. 

Mr. BURGESS. So it stands to reason, since states are not active 

in tracking down third-party liability claims, they’re aware of beneficiaries with overlapping coverage that might receive services that 

are unintentionally paid for both by third parties and the State 

Medicaid plan. Is that a reasonable assumption? 

Ms. MAXWELL. Correct. 

Mr. BURGESS. Is it possible for states to take advantage of inhouse data like this to approach practices that might not have reconciled their credit balances? 

Ms. MAXWELL. Yes. That’s what our recommendation focuses on: 

the ability of states to identify those overpayments and then recover them. In the report, we identified $25 million in which credit 

balances had not been reconciled and states had not been able—— 

105 

Mr. BURGESS. State that number again. 

Ms. MAXWELL. $25 million for, I believe it was eight states. 

Mr. BURGESS. But it is not an inconsequential number. It is a 

number worthy of our attention, even though we deal with big 

numbers up here. Mr. Barton talked about trillions of dollars and 

dazzled everybody with that. But even focusing on these amounts 

is important, is it not? 

Ms. MAXWELL. Absolutely. From the Office of the Inspector General’s perspective, every dollar counts. Every dollar that is overpaid 

or goes to a fraudulent provider means there’s a dollar less to provide services. 

Mr. BURGESS. Thank you. 

And, Mr. Chairman, I just want to point out that, as of 10 days 

ago or so, the day before inauguration, we had roundtables with 

the Governors up here, both on the Senate side and the House side, 

and it was one of the most impactful days that I have seen up here. 

There was so much energy and enthusiasm on the part of the Governors who want reforms in their system. They want this to be 

right. They want to deliver the care to their citizens. There’s not 

unanimity of opinion whether it’s a block grant or beneficiary allotment, a lot of discussion around the moving parts, but I will just 

tell you I was very encouraged at the level of involvement of our 

Governors in this issue. 

Thank you. I yield back. 

Mr. MURPHY. Thank you. 

I now recognize the gentleman from New York, Mr. Tonko, for 

5 minutes. 

Mr. TONKO. Thank you. Thank you, Mr. Chair, and welcome to 

our panelists. 

Mr. Archambault, I know that, in your testimony, you addressed 

the waiting list and the corresponding decline of services or inability of services. I know that our ranker, Representative Pallone, 

asked you a bit about this or the panel about it, and I just want 

to dig a little deeper into a claim that you did make where you insinuate that expanding Medicaid will lead to the 600,000 individuals on Medicaid waiting lists being less likely to receive services. 

First of all, can you explain what you mean by Medicaid waiting 

lists? I assume you’re referring to the waiting list that some states 

maintain to receive home and community-based waiver services. Is 

that correct? 

Mr. ARCHAMBAULT. Correct. 

Mr. TONKO. So I would ask, do you know which state has the 

longest waiting list for home and community-based services? 

Mr. ARCHAMBAULT. It’s usually related to population. You’re 

going to have more people who are usually eligible for the program, 

but there’s not a straight correlation that way. 

Mr. TONKO. Well, my information tells me that Texas is that list 

that has the longest waiting list. It’s at some 163,000-plus people 

in 2014. And do you know how Texas’ waiting list, of that 163,000, 

has been affected by the expansion of Medicaid? 

Mr. ARCHAMBAULT. The data usually is a year or two delayed, so 

it’s hard to draw a direct correlation. I would just point out that, 

if we want to make sure that we’re fulfilling the promises to the 

106 

most vulnerable, I think getting lost in this discussion is that Medicaid is crowding out spending—— 

Mr. TONKO. Well—— 

Mr. ARCHAMBAULT [continuing]. Of all kinds, whether it’s education, whether it’s public safety or infrastructure, or the waiting 

list. I don’t want to—— 

Mr. TONKO. I would suggest it depends on what states are doing 

with their Medicaid program, but Texas has not expanded its Medicaid, so that was the answer that I would share with you. 

It’s very interesting now that we look at some of these data. Mr. 

Archambault, do you know which state has the second longest 

waiting list for home and community-based services? 

Mr. ARCHAMBAULT. Again, it depends on the population by category, and there’s no correlation between expansion or not. The 

concern is even states that have expanded also have waiting lists. 

So, for me, it’s about priorities. And for state lawmakers, they are 

being put in a very tough position where they’re not able to help 

families like Skylar’s, and that’s deeply concerning to me. 

Mr. TONKO. Well, Florida is the second in that list of Medicaid 

numbers, and they have not expanded with their Medicaid issue. 

And, you know, I think we can sense a pattern here, so we need 

to cut to the chase. Fully 61 percent of those individuals on waiting 

lists for home and community-based services live in the 19 states 

that have not expanded Medicaid. My home State of New York, one 

of the most populated in the country and one which has enthusiastically expanded Medicaid, maintains a waiting list of zero individuals for HCBS waiver services and a track record that has really begun to be very favorable about per-capita costs for Medicaid. 

So it’s difficult for me to see the real-world correlation that is addressed in testimony like yours where expanding Medicaid and 

waiting lists for home—where there’s a contrast or a choice that 

has to be made between expanding Medicaid or waiting lists that 

grow for home and community-based services. Do you have any actual evidence at all that speaks to that expansion and any correlation with HCBS? 

Mr. ARCHAMBAULT. So, again, the point is that, when you talk to 

Governors and state policymakers, they are being put in the position where, in Arkansas, they have been trying for years to address 

issues like families like Skylar. Now they are having to—— 

Mr. TONKO. Just yes or no. Is there any correlation that you can 

cite? And I’ll remind you: you’re under oath. So is there any correlation that you can cite? 

Mr. ARCHAMBAULT. What I will say is there is no correlation. It’s 

not a yes-or-no question. 

Mr. TONKO. So the answer to my question is no. 

Mr. ARCHAMBAULT. There is no correlation, expansion or not, on 

whether you have a wait list. 

Mr. TONKO. So, unfortunately, what we’re seeing here from our 

witnesses today is a parade of alternative facts designed to obscure 

the simple truth. 

Medicaid expansion is working. It has provided health insurance 

to over 12 million people, and my colleagues on the other side of 

the aisle are engaged in a cynical attempt, I believe, to pit good 

versus good in an attempt to gut this program and rip health care 

107 

away from millions of Americans. I find it unacceptable. I find it 

shameful, and I don’t think we should sit quietly while people’s 

right to health care is being threatened. With that, I just yield back 

the balance of my time. 

Mr. MURPHY. Thank you. 

I now recognize Ms. Brooks for 5 minutes. 

Mrs. BROOKS. Thank you, Mr. Chairman. 

I don’t think that trying to explore waiting list questions and 

waiting list issues is an attempt to gut Medicaid. In my view, it’s 

an attempt to strengthen the services and the ability to provide 

people with developmental disabilities, traumatic brain injuries, 

mental illnesses, and ensure that those people on these significant 

wait lists receive care. And I would like to go back to you, Mr. 

Archambault, with respect to—because I do think it’s more complex 

than a simple yes or no, is there a correlation, or is there not a 

correlation? So could you please go into greater detail with respect 

to what your foundation, what you all have found with respect to 

the waiting lists, with respect to the people who are on the waiting 

lists, with respect to what the states want to do with the waiting 

lists? I’m going to let you use most of my time. 

Mr. ARCHAMBAULT. Sure. Thank you, Congresswoman. 

I would just say that to focus on a waiting list is a vacuum. 

Mrs. BROOKS. I’m sorry. What do you mean by ‘‘it’s a vacuum’’? 

Mr. ARCHAMBAULT. Some states have delivered care—the phrase 

that I’m sure you’re all very familiar with: You’ve seen one State 

Medicaid program, you’ve seen one. Some states have decided to 

take their people that would qualify for a waiting list and include 

it into an 1115 waiver request and deliver services in a different 

way. My point is that the principles by which we have as a country 

for our safety net is that we make sure that a safety net program 

accomplishes a few things. One, is it targeted and tailored to the 

truly needy? Are we living up to the promises that we are making 

to these families and individuals before we make new promises? 

Mrs. BROOKS. And is it fair to say that those currently on waiting lists in the states are the truly needy? Is there any dispute 

about that? 

Mr. ARCHAMBAULT. I think there would not be, and I would be 

happy to explore it, but I’m not sure how intellectual disabilities 

or mental illness would be seen as ones that we wouldn’t want to 

try to help. 

Mrs. BROOKS. People typically who cannot take care of themselves. 

Mr. ARCHAMBAULT. Correct—— 

Mrs. BROOKS. Is that correct? People who are often not working. 

Is that correct? 

Mr. ARCHAMBAULT. Correct. 

Mrs. BROOKS. People who truly are incapable of taking care of 

them physically or mentally themselves. 

Mr. ARCHAMBAULT. Correct. And this was the traditional Medicaid population pre-ACA—was the aged, the disabled, pregnant 

women, and children—that we were trying to fulfill that promise 

to. The ACA changed that discussion. 

Mrs. BROOKS. And how did the ACA change that discussion? 

108 

Mr. ARCHAMBAULT. Well, expanded to a population that is the 

vast majority 82 percent childless, able-bodied adults. So, again, 

these are individuals that don’t qualify for TANF. They don’t qualify for long-term food stamps. They have not traditionally been a 

population. And what’s really, really important for us to remember 

here is our goal is not to get people to stay on Medicaid. Ultimately, we want to make sure that they have better health outcomes, and I think most of us would agree ideally it’s if they’re able 

to work, that they’re out in the workforce supporting themselves 

and on private insurance. And that’s ultimately I think where we 

want to be as a country, and that’s the discussion that we need to 

be having. 

Mrs. BROOKS. And is it fair to say that most of the people who 

are on the waiting list who are the developmentally disabled, traumatic-brain-injured people, and those with serious mental illness 

are always going to be on Medicaid? 

Mr. ARCHAMBAULT. Correct. 

Mrs. BROOKS. It’s a different type of population. 

Mr. ARCHAMBAULT. Correct. 

Mrs. BROOKS. And what has been your discussion and findings 

with the Governors with respect to how most of them would like 

to take care of this population? If there’s consensus among Governors, what is the Governors’ and the legislature’s view with respect to this population? 

Mr. ARCHAMBAULT. Yes. I think there’s ongoing concern by Governors that they’re not going to be able to support these. Now, I 

will say there are exceptions to that rule, and if you look at the 

State of Kansas or the State of Maine, those Governors have been 

able to buy down their wait lists. I think Maine was gone from 

1,700 individuals down to 200 individuals. 

Mrs. BROOKS. How did they do it? 

Mr. ARCHAMBAULT. Well, they got some budget sanity. They did 

not expand Medicaid, and so they have been able to focus on eligibility, as we have talked about today, to make sure that their programs are truly focused on those that are the most needy, the aged, 

the blind, the disabled. And they’ve made that a priority in their 

states, and they’ve had success in buying down their wait lists. 

Mrs. BROOKS. I think we need to continue to explore the states 

that have found ways to have little to no wait lists. I certainly hope 

today our Governor, Governor Holcomb, is formally submitting an 

application to CMS for a Medicaid waiver to continue our successful Healthy Indiana Plan for an additional 3 years. It’s an outstanding program that I hope folks on both sides of the aisle—it 

is a way to save and to help those who truly need it. It can be replicated. I believe it’s an incredible model that can work. 

Unfortunately, we still have a waiting list in Indiana. We don’t 

want a waiting list. But I certainly hope that, with the new nominee to lead CMS, Seema Verma, a Hoosier, we can make all of 

Medicaid a far stronger and better program. With the controls in 

place, as a former U.S. attorney, I’ve worked with the MFCU units. 

We need to do more to support them. We need to do more to support all of these efforts to make sure that our truly vulnerable are 

protected. 

With that, I yield back. 

109 

Mr. MURPHY. OK. 

I now recognize Ms. Clarke for 5 minutes. 

Ms. CLARKE. I thank you, Mr. Chairman, and I thank our ranking member. 

Before I get into my actual questioning, I actually want to respond to Mr. Howard because, as a proud New Yorker, I must correct the impression left by your characterization of the Empire 

State. Are you aware that the New York State’s Medicaid Redesign 

Team has been a national leader in controlling costs and improving 

quality for Medicaid members? The Empire Center for Public Policy, self-described as a physically conservative think tank and government watchdog, released an analysis in September of 2016 that 

New York Medicaid spending per recipient has dropped from 

$10,684 to $8,731, or 18 percent, between 2010 and 2014, at nearly 

twice the national average. 

According to the independent New York State Comptroller’s Office, the MRT restrained total Medicaid spending growth to only 

1.7 percent annually during the period of fiscal year 2010 to 2013. 

This marks a significant reduction over the trend for the previous 

10 years of 5.3 percent. During the same 3-year period, Medicaid 

re-enrollment grew by more than half a million people. Billions of 

dollars have been saved, and per-recipient spending has been 

slashed. In fiscal year 2014 and 2015 alone, a total of $16.4 billion 

was saved thanks to the MRT initiative. This track record of success led the Comptroller’s Office to declare that MRT represents 

the most comprehensive restructuring of New York’s Medicaid system since the program began in 1966. And we have no waiting list. 

I would like to now turn to Mr. Westmoreland. In Mr. 

Archambault’s written testimony, he cited numerous concerns 

about Medicaid expansion. However, he ignores the fact that this 

program has also had a positive impact on the quality of life and 

health for millions of Americans. He also ignored the fact that 

many of the positive impacts, such as cost savings, from preventative medical exams and early detection and treatment of disease 

will result in future cost savings to the states and the Federal Government. I am a strong supporter of Medicaid expansion because 

I see the significant value of the program. I’m interested in improving the program and not destroying it. 

So, Mr. Westmoreland, Mr. Archambault claims that the Medicaid expansion funding threatens the truly vulnerable. Can you 

clarify why this is not the case? 

Mr. WESTMORELAND. I’d begin with first challenging the discussion, as I did in my testimony, of who’s truly vulnerable. I want 

to be clear that not all people with disabilities, cognitive, traumatic 

brain injury, any of those discussions that have been ongoing, were 

traditionally eligible for Medicaid. It was tied to a 75-percent poverty and receipt of SSI, and many people whom we would all consider to be disabled have never been eligible for the Federal Medicaid program until the enactment of the ACA. So let’s start with 

those people. 

Secondly, I would point out that there have been significant studies, economic and macroeconomic studies, some by business schools, 

some by economists, showing that states actually have significant 

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sion in their state. So I think that it’s clear that states benefit on 

a financial basis and that their citizens benefit on their financial 

basis in the ways that I outlined in my testimony. 

Ms. CLARKE. Mr. Westmoreland, both Mr. Archambault and Mr. 

Howard claimed that Medicaid expansion poses an unsustainable 

burden on state budgets. Can you clarify why this is not the case? 

Why have most states that have expanded Medicaid actually experienced net budgetary savings associated with the expansion? 

Mr. WESTMORELAND. Yes. Let’s start with the healthcare expenses that, as we discussed earlier, there are fewer uncompensated care costs within the state. In addition to that, there is an 

influx of Federal funds into the state to pay for healthcare services, 

and those Federal funds have a reverberating multiplier effect in 

the state economy. And, finally, states are able to provide, as you 

suggested, preventive and early-intervention services that might 

not have been available to uninsured adults before and actually 

lower the ongoing healthcare costs for those people. 

Ms. CLARKE. It is my understanding that numerous studies have 

disproven the myth that Medicaid expansion diminishes work incentives. Is that correct? 

Mr. WESTMORELAND. Yes, ma’am. 

Ms. CLARKE. I yield back the balance of my time, Mr. Chairman. 

Mr. MURPHY. Thank you. 

Now I recognize a new member to our subcommittee, the gentleman from Michigan, and Reverend, Mr. Tim Walberg. 

Welcome aboard here to our committee. 

Mr. WALBERG. Thank you, Mr. Chairman. 

Mr. Archambault, I appreciate the safety net illustration, that we 

want to have safety nets. We don’t want to have safety nets forever 

for people. I remember, I never worked over a safety net, but I remember working at U.S. Steel South Works and third helper of 

going out and being responsible to swing a sledge and take the 

plug out of a heat of molten steel and had a fall-protection strap 

on me. I appreciated that, but when the shift ended, I didn’t want 

that strap. I wanted to move on. That’s a laudable goal, that we 

find ways to make sure that people who truly need that safety net 

have it, that we make sure that we don’t waste it on others who 

don’t and encourage them to move on in a very positive way. 

I’d like to ask you for a further response from your testimony, 

and also, Ms. Maxwell, I’d like for you to comment after Mr. 

Archambault. Your testimony references some of the waste and 

fraud issues that face our Medicaid programs, individuals that 

have passed away decades ago, individuals using high-risk or stolen Social Security numbers, and tens of thousands who had moved 

out of state yet remained on Medicaid. What can we do to combat 

some of these problems more effectively? 

Mr. ARCHAMBAULT. So there’s a number of things that we would 

recommend, and thank you, Congressman, for the question. The 

first one is allow states to check eligibility more frequently. Under 

the ACA, there was a change that states could only redetermine 

eligibility once a year unless they were given a reason to recheck 

eligibility. We have found that states that are able behind the 

scenes to access data internally within state government but also 

through third-party vendors, if they’re able to run those on a quarVerDate Nov 24 2008 14:03 Jan 29, 2018 Jkt 037690 PO 00000 Frm 00114 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-1 CHRIS
111 

terly or monthly basis, they’re finding that these people, individuals have life changes, just like all of us. So, whether they move 

or they die or whether they get a significant raise, we need to make 

sure that we find that sooner rather than later. Otherwise, we’re 

just wasting money, and I believe that there’s bipartisan agreement on that, that we need to make sure. The other thing is that 

we need to make sure that the Federal databases, which we 

haven’t talked a lot about, the quality of the data in those is quite 

poor. If you talk to state leaders, they will complain constantly 

about how late the data is, out of date, and it’s not flexible enough. 

So making sure that states are able to look for dual enrollment, for 

example—and the Food Stamp program is moving in this direction. 

We should be doing it for Medicaid, just to make sure that we’re 

not wasting money as a result of individuals moving across state 

lines. 

Mr. WALBERG. Thank you. 

Ms. Maxwell, could you add to that? 

Ms. MAXWELL. Thank you. I would love to. I would definitely 

echo what we just heard about the crucial need for better Medicaid 

data. Lack of data hampers the ability to understand these programmatic issues for policy decisions but it also significantly deters 

us in trying to find fraud, waste, and abuse. In addition to that impacting detection, we also need to think about protecting the Medicaid program from fraud ever happening in the first place. So 

again, in addition to the data, we would encourage CMS to continue to work with states to improve enhanced provider screening 

to make sure that providers that get in the program are the providers we want to get in and are who we want to pay. 

Mr. WALBERG. Thank you. 

Mr. Archambault, an audit in Arkansas revealed more than 

43,000 individuals on Medicaid who did not live in the state, with 

nearly 7,000 having no record of ever living there. More than 

20,000 Medicaid enrollees were also linked to high-risk identities, 

including individuals using stolen identities, fake Social Security 

numbers, et cetera. Something of interest to me in Michigan, has 

recently identified more than 7,000 lottery winners receiving some 

kind of public assistance, including individuals winning up to $4 

million. Those jackpots are something that ought to encourage 

them not to be on Medicaid assistance. 

Mr. Archambault, do these individuals get approved for and stay 

enrolled in the Medicaid program, and is it the Federal Government or the states dropping the ball? 

Mr. ARCHAMBAULT. Well, Congressman, maybe a little bit of 

both, to answer that question. And I think what’s really important 

here is that there are some policy changes that have happened. 

The Affordable Care Act removes an asset test for the Medicaid 

program, by and large. There’s some that it still applies to. But as 

a result, these sorts of outlier cases admittedly, but when an individual wins $4 million, takes a lump-sum payment, they may not 

qualify that month, but the very next month, they would qualify 

for this program and can remain on. Let alone we’re not checking 

for 12 months in most cases, so we wouldn’t know. The point I’m 

making here is we need to make sure that these gaping holes that 

exist, we have data in many cases within a state government. We 

112 

have data across state lines. And the Federal Government needs to 

incent states to say: Look, if you are doing this on a more regular 

basis and identifying fraud, you can take a little bit of that savings 

to pay for those efforts. This points to Mr. Howard’s point that that 

is not the incentive that’s inherent in the current financing structure that we have set up. 

Mr. WALBERG. Thank you. 

My time has expired. 

Mr. MURPHY. I now recognize Dr. Ruiz for 5 minutes. 

Mr. RUIZ. Thank you, Mr. Chairman. 

As many of you know, I grew up the son of farm workers in the 

medically underserved community of Coachella. I have seen firsthand what it means when a community is medically underserved 

and when they cannot access care. I can tell you this: If it was not 

for Medicaid, the Coachella Valley and regions like mine all across 

the country would not have access to health care that every one of 

us up on this dais and our families enjoy. If we repeal Medicaid 

expansion, people will lose healthcare coverage. They will stop seeing their doctors because the costs will be too high, and they will 

stop taking their lifesaving prescriptions because they are too expensive. In California alone, the nearly 3.5 million individuals who 

enrolled in Medicaid under the ACA expansion provision could lose 

their coverage. That’s millions of families losing access to health 

care. And if we repeal Medicaid expansion, uncompensated costs 

will increase, straining our Nation’s healthcare system, which will 

drive up costs for everyone because, you see, when people don’t 

have health insurance, they don’t stop getting sick. And our emergency departments do not turn someone away because they don’t 

have insurance. Emergency physicians treat the patients, like they 

should. So the hospitals have to make up the costs. And in 2014 

alone, Sutter Health Systems in California saw a decrease in uncompensated care by 45 percent in 2014. All hospitals in my district, in particular San Gorgonio Hospitals, have seen a drop in uninsured patients in the emergency department by half. So we need 

to expand Medicare even more, make it more efficient and more desirable for providers to see more Medicaid-insured patients. 

Listen, fraud is bad, and political amplification of the problem to 

wrongfully justify cutting health insurance for sick patients is bad. 

So here’s the possible common ground. Here’s what I think we can 

both agree on. If we start with the premise that we want to cover 

more uninsured, economically struggling families like the middle 

class and more vulnerable families, then we’re on the same page. 

But if you start with the ideological goal to cut or end Medicaid, 

then you’ll breed mistrust, and millions of people will be harmed, 

including the middle class. So the real question—and the real question, Mr. Howard, is, are sick and injured people getting the care 

they need? Because anything short of this is negligence. So let’s 

tackle fraud so that we can expand coverage to more struggling, 

uninsured middle class families. 

So the question that I have, Ms. Yocom, if you were to choose one 

thing that you can do to combat fraud, if there’s one action that 

you can take that we can make the biggest difference in the system, what would that be? 

113 

Ms. YOCOM. I think it’s around the providers, making sure that 

we have eligible providers who are in good standing and that those 

who are not in good standing and should not be providing services 

aren’t going across states to provide services. 

Mr. RUIZ. Thank you. 

Ms. Maxwell, the one thing, the one thing that would make the 

biggest difference? 

Ms. MAXWELL. I would absolutely have to go back to the data. 

Without that sort of transparency, we cannot see what’s happening 

in the program. We have a lack of data across the Nation and also 

data coming in from the managed care companies. 

Mr. RUIZ. Thank you. 

Mr. Howard, the one thing, if you had one thing that you can 

change to make the biggest difference in fraud, what would it be? 

Mr. HOWARD. In fraud in particular? 

Mr. RUIZ. Medicaid. 

Mr. HOWARD. Yes. Engage data transparency, as my colleague 

here on the dais was just saying. Medicaid data should be enclaved 

for all the states to look at so they can benchmark provider performance and engagement. 

Mr. RUIZ. Thank you. 

Mr. Westmoreland, what does the evidence suggest about how 

Medicaid expansion is making health care more affordable? Is 

there evidence, for instance, that Medicaid expansion is reducing 

patients’ need to forego medical care due to costs? 

Mr. WESTMORELAND. Medicaid expansion is highly associated 

with a decline in personal bankruptcies. It is also associated with 

greater financial security for families who are newly eligible. 

Mr. RUIZ. So these are middle class families who are having 

some economic security because of the Medicaid expansion. What 

does the body of evidence say about how Medicaid expansion has 

affected patient access to primary care and preventative care? 

Mr. WESTMORELAND. Those beneficiaries who are newly insured 

under the Medicaid expansion have much higher rates of traditional sources of care, seeing primary care, and using preventive 

health services. 

Mr. RUIZ. Thank you very much. 

My closing statement is, if this is leading to increase in expansion for economically struggling middle class families, then, you 

know, I’m in. 

But if the ultimate goal is to create a facade and amplify a problem politically to then justify policies that will hurt the middle 

class and that would decrease health insurance, then I’m not in. 

So let’s tackle fraud so that we can expand more health coverage 

to middle class families. 

Thank you very much. 

Mr. MURPHY. Thank you. 

Now we’re recognizing another new member of our committee 

from, I think, UCLA, former state assemblywoman, state senator, 

mayor, Congresswoman Mimi Walters of California. You’re recognized for 5 minutes. 

Mrs. WALTERS. Thank you, Mr. Chairman. 

114 

My questions will be directed to Mr. Archambault. The supporters argued that Medicaid expansion would increase jobs. Has 

this happened? 

Mr. ARCHAMBAULT. There’s been a number of studies where the 

consultant predictions have been very off, whether it be enrollment 

or jobs. In particular, they are Iowa, Tennessee, where there were 

predictions of gains in hospital jobs and healthcare jobs as it related to expansion, and the opposite has actually taken place, 

where there has been a loss in healthcare jobs. 

Mrs. WALTERS. OK. And during the conception of the ACA, supporters argued that Medicaid expansion would stop hospital closures. Has this been the case? 

Mr. ARCHAMBAULT. So it certainly has not stopped hospital closures. In a number of states, hospitals have still closed. And I 

think it’s important to realize that the supporters’ claim that it is 

a silver bullet to stop closures has not been true. So you could list 

off Arizona, Massachusetts, a number of these states where they 

have expanded, and hospitals have still closed. 

Mrs. WALTERS. OK. 

And, finally, Medicaid expansion was projected to lower emergency room use. However, you pointed out that the evidence suggests that emergency room use has increased after expansion and 

that many emergency room visits by Medicaid beneficiaries were 

deemed to be avoidable. Can you explain what might have led to 

this outcome? 

Mr. ARCHAMBAULT. Sure. And my experience is not just influenced by the ACA. I live in Massachusetts and worked on 

RomneyCare and have studied RomneyCare very closely. And one 

of the things that becomes apparent is, both in the expansion population and the traditional Medicaid population, is folks are not getting coordinated care because they are showing up to the ERs at 

a much higher rate than those that are privately insured or even 

uninsured. And so, as a result, these are the questions that we 

need to ask about the effectiveness of the program, the quality of 

the care that individuals are getting. There’s been a number of surveys looking at, how many of these visits are avoidable? And, unfortunately, at least in Massachusetts, those surveys found that 55 

percent of Medicaid visits to the ER were unavoidable. 

Mrs. WALTERS. Thank you. 

I believe my time is expired. 

Mr. MURPHY. I then recognize Ms. Schakowsky for 5 minutes. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

The Affordable Care Act has just been a blessing for so many 

people in our country. Twelve million more Americans have access 

to health care. 

Mr. Westmoreland, Governors across the country submitted letters in response to Representative McCarthy’s request to describe 

the impact of the ACA and the expansion of Medicaid within their 

states. I’m assuming that you’ve seen some of these letters. For the 

record— 

Mr. WESTMORELAND. Yes, ma’am. 

Ms. SCHAKOWSKY. Even some Republican Governors appeared to 

have positive things to say about the expansion of Medicaid in 

their state. For example, the letter from my home State of Illinois 

115 

stated that our—the Governor stated that our Medicaid population 

‘‘now stands at 3.2 million, almost one quarter of the state’s population,’’ and it went on to urge Republican leaders in Congress to 

‘‘carefully consider the ramifications of proposed changes.’’ Similarly, Governor Sandoval of Nevada stated in his letter to Mr. 

McCarthy that, ‘‘I chose to expand the Medicaid program to require 

managed care for most enrollees and to implement a state-based 

health insurance exchange.’’ These decisions made health care accessible to many Nevadans who never had coverage options before. 

So, Mr. Westmoreland, can you briefly touch upon how the residents of states that expanded Medicaid under the ACA have benefited, such as Illinois and Nevada? 

Mr. WESTMORELAND. I’m sorry. I didn’t understand the last part 

of the question. 

Ms. SCHAKOWSKY. I cited Illinois and Nevada, but can you briefly 

touch on how the residents of states that did expand Medicaid 

under the ACA have been benefited? 

Mr. WESTMORELAND. Let’s begin with 11 million people have 

Medicaid coverage who didn’t have it before, and many of those 

people are in serious need. I would point out and agree with you 

that, of the Governors who wrote to Mr. McCarthy, none of them 

requested repeal, I believe. And 16 of the states were governed by 

Republican Governors. And Ohio, Mr. Kasich, one of your former 

colleagues, I think was most passionate in describing not only how 

it has benefited the residents of Ohio to have services but that, indeed, he believed that it was a moral duty to continue to cover 

these people under Medicaid. 

Ms. SCHAKOWSKY. Thank you for that. 

And can you briefly touch on how—let’s see, I also wanted to 

mention there are other examples, Republican-led states as you 

have said, that have had positive outcomes for their residents. And 

beyond providing healthcare benefits to an additional 12 million 

people, how has Medicaid expansion helped states manage their 

budgets? Has it had a positive impact? 

Mr. WESTMORELAND. As I suggested earlier, there have been 

business school studies and economic studies suggesting that states 

who have expanded Medicaid have had not only a net increase in 

Federal funds coming into the state, but they’ve also enjoyed some 

revenue increases because of the reverberating effects and providing those funds in hospitals. I would also point out to you that 

there is a long-term study to be done of how productivity might actually be improved by people having healthcare services who previously were denied those services. 

Ms. SCHAKOWSKY. Thank you. Some of the letters I was referring 

to seem to raise concern by Republican Governors that changes to 

the Medicaid program would produce destabilizing cost shifts to the 

states. For example, Governor Baker of Massachusetts in his letter 

to Mr. McCarthy said, ‘‘Medicaid is a shared Federal-state partnership.’’ Proposals that suggest that states may be provided with 

more flexibility and control must not result in substantial and destabilizing cost shifts to states. 

So is there a valid concern of a major cost shift under the Republican proposals you are seeing, such as proposals to block-grant 

116 

Medicaid or impose per-capita caps on spending? Should states be 

concerned about major cost shifts? 

Mr. ARCHAMBAULT. States should be very concerned. The first 

question is, what level will the initial block grant and its formula 

be set at? But the major question for states to focus on is how the 

evolution, the increase of funding in the future, will evolve as compared with the actual cost of providing healthcare services to the 

number of people who need them. As I suggested earlier, states will 

be left holding the bag for both medical inflation and the number 

of people who have no health insurance. 

Ms. SCHAKOWSKY. And what about, for those that are receiving 

health care through ACA’s Medicaid expansion, are they at risk, 

particularly if they block-grant the Medicaid program? 

Mr. ARCHAMBAULT. Well, first, I would suggest that my colleagues on this panel would point out that—suggest that those people should be the first to go off of the healthcare rolls and that they 

would return to traditional Medicaid populations as they’ve existed 

over the last 20 or 30 years, so I would suggest that the people who 

are on Medicaid expansion are the people who are most likely to 

be on the chopping block to begin with. 

But, secondly, I would say that, as every state, expansion or no 

expansion, experiences the growth in healthcare costs that is almost inevitable, looking at CBO or any other projections, if the 

states are left holding the bag and they do not have a guarantee 

of Federal funds, they’re going to be cutting back on everyone. 

Ms. SCHAKOWSKY. Thank you. 

I yield back. 

Mr. MURPHY. Thank you. 

Another new member of our committee, Mr. Costello of Pennsylvania. I appreciate you being here. You’re recognized for 5 minutes. 

Mr. COSTELLO. Thank you. 

Ms. Maxwell, if I could ask a couple of questions on HHS OIG, 

has the number of criminal investigators increased or decreased 

over the years? 

Ms. MAXWELL. The number of criminal investigators specifically? 

Mr. COSTELLO. Yes. 

Ms. MAXWELL. I think, right now, we are below our FTE ceiling. 

We are still trying to hire more. 

Mr. COSTELLO. How many more do you think you need to hire? 

Ms. MAXWELL. Well, we would hire as many as you let us, but 

w need about 1,700 FTEs—that’s where we’re pegged for, the entire 

OIG. 

Mr. COSTELLO. True or false, for every $1 expended in the OIG, 

$7.70 is returned to the Health Care Fraud and Abuse Control Program? 

Ms. MAXWELL. That is true. 

Mr. COSTELLO. Has that been a consistent return? 

Ms. MAXWELL. As far as I know, it’s been around $7, and it’s the 

same thing for the Medicaid Fraud Control Units. They also had 

that similar ROI. 

Mr. COSTELLO. You conducted a review of State Medicaid agencies presented with allegations of provider fraud. Did you find that 

state agencies properly suspended Medicaid payments to those providers? 

117 

Ms. MAXWELL. They did not make full use of those tools. 

Mr. COSTELLO. Which is to say they did suspend all—— 

Ms. MAXWELL. They did not. Although, in a number of the cases 

where they did not suspend, the MFCU ultimately cleared the provider of wrongdoing. 

Mr. COSTELLO. Very good. On the issue of program integrity, 

since your work has repeatedly found CMS’ oversight of states 

claiming of matching dollars is inadequate to safeguard Federal 

dollars, what more could CMS be doing to ensure the integrity of 

Medicaid matching? 

Ms. MAXWELL. There are a number of things along the program 

integrity principles I’ve outlined that we believe CMS could do in 

conjunction with the states. Given that CMS and states share fiscal 

risk, we believe they should share accountability. So, as I mentioned, prevention, helping states implement the enhanced provider 

screening, helping them drive down improper payment rates, and 

then, of course, the data to be able to understand the program and 

detect fraud. And more importantly, the data helps us home in on 

fraud, waste, and abuse and really target our oversight activities 

so that we can get this tricky balance right between trying to have 

really strong program integrity but also not put an undue burden 

on its providers. 

Mr. COSTELLO. I’m going to shift this question to Mr. 

Archambault, but after he answers, anyone else feel free to respond, including what you just mentioned about the issue of, specifically, enhanced data-matching technology. 

Because it seems to me that if you have technology and you have 

data, when we’re talking about the ACA change which only requires states to perform one check per year, knowing that we have 

the data, knowing that we’re a pretty technologically advanced society, it would be, I think, a little bit easier to go about detecting 

ineligibility or fraud or anything of the sort to cut down on those 

who are ineligible from being accepted into the Medicaid program. 

Mr. Archambault, I see in your written testimony, in the first 10 

months of operation, Pennsylvania’s award-winning Enterprise 

Program Integrity Initiative identified more than 160,000 ineligible 

individuals who were receiving benefits, including individuals who 

were in prison and even millionaire lottery winners, resulting in 

nearly 300 million in taxpayer savings. 

What can we do in order to pivot to real-time identification of 

something that doesn’t seem quite right, rather than just relying 

on that one moment in time annually, to beef up program integrity 

here? 

Mr. ARCHAMBAULT. So I think there’s a number of things that 

the Federal Government can do to enable states to do this. 

The first one is that if they are investing state dollars in some 

of these efforts, if they are able to find cases that are ineligible, for 

them to be able to keep a piece of that savings up front and more 

than they get to save now, given the funding formula that we have. 

The other one is let them check more frequently. 

And then the third one is to make sure that the actual data that 

the Federal Government is allowing access to is timely or allows 

states to go somewhere else to get it from a private vendor if the 

Federal Government’s data is not timely enough. 

118 

Ms. MAXWELL. Yes, I would agree that the coordination and sharing of data is critical between the Federal and State governments. 

One area where we found a real problem is, when providers are enrolled, they’re asked who their owners are so we know who we’re 

doing business with. And, in one case, we found that the State 

Medicaid agency thought there were 63 owners, Medicare thought 

there were 14 owners, and they told us there were 12. So, trying 

to coordinate this data so all the programs know who we’re doing 

business with. 

In addition, we recommend that the Medicare data be improved 

so that Medicaid can actually share that and reduce the provider 

burden, in terms of letting them enroll in both different programs. 

Mr. COSTELLO. That gets, Ms. Yocom, to your point about the duplicate eligibility issue, correct? 

Ms. YOCOM. Yes, it does. And while we are a technologically advanced society, the Medicaid program truly is not. States’ data systems are pretty antiquated, and there is a lot of work to do to get 

good data systems that are more flexible and more agile. 

Mr. WESTMORELAND. If I could, sir, I would also say that the recently published managed care organization rule provides for a 

substantial improvement in data systems. And I would ask this— 

and this committee actually accelerated the effective date of that 

with your 21st Century Cures Act. 

I would ask you to keep the MCO rule in mind as you move forward with the question of whether regulations will be withdrawn 

in the early part of this—in the early part of this administration. 

I think it’s a valuable addition to try to be able to find who—I 

agree with all my colleagues that the data systems need to be improved, and I think the MCO rule does that. 

Mr. COSTELLO. Thank you all for your comments. 

Mr. MURPHY. Thank you. 

And now, recognizing another new member of our committee, the 

owner of Carter’s Pharmacy. Is that a place where we might see 

someone like Ellie Walker and Opie serving drinks at the Walker’s 

store? 

Mr. CARTER. Very much so. 

Mr. MURPHY. But understanding of small-town medical care, 

good to have you on board here. Buddy Carter of Georgia’s First 

District. 

Mr. CARTER. Thank you. Thank you, Mr. Chairman. 

And thank all of you for being here. We appreciate your participation. 

I want to preface my questions by apologizing if I ask you something you weren’t prepared for. And if you don’t know the answer, 

if you’ll just simply tell me that you can get me the answer, that 

will be fine. 

Ms. Maxwell, I understand, looking at your bio last night, that 

you have some expertise on the 340B program. 

Ms. MAXWELL. I do. 

Mr. CARTER. I don’t want to get into that program; however, I 

want to explain to you a situation that exists in my district. 

I have a hospital in my district that was participating and receiving moneys from the 340B program, and because they didn’t meet 

119 

the threshold, they were put out of that program. Now, they got 

back in it. 

As I understand, there are two different levels that you can be 

at, as a sole community provider and also as a disproportionate 

share. 

Ms. MAXWELL. Yes. Those are both covered entities. 

Mr. CARTER. OK. Well, they got back in it as a sole community, 

OK? But what the CEO is telling me is that, because they can’t get 

back as a disproportionate share, that they’re losing over $300,000 

a month. Now, that is significant for them. I’m sure it’s significant 

for anyone, but for this hospital system it’s very significant. 

Now, he also is telling me that the formula that is used for that, 

that Medicaid participation, the Medicaid rate is also in that formula to determine whether they are a sole community or whether 

they’re in the disproportionate share. 

And what I’m hearing is that those states that did not expand 

Medicaid, like the State of Georgia, that they are put at a disadvantage, in that we aren’t eligible for that. Is that true? Is that 

the case? 

Ms. MAXWELL. I’m going to have to take your offer to get back 

to you on that. 

Mr. CARTER. OK. 

Ms. MAXWELL. My expertise really is in the pricing of the 340B 

drugs themselves and not as much in this disproportionate share. 

But I know there have been issues, and I certainly know there are 

people in our office that can answer that question, and we’ll get 

back to you as soon as we can. 

Mr. CARTER. OK. Well, that’s fair enough. 

But my question is twofold: first of all, if that is the case; secondly, if that was the intention. Was that the intention, to penalize 

states that didn’t expand Medicaid so that they couldn’t receive 

these dollars, or was it an incentive to get those states to expand 

Medicaid? 

Ms. MAXWELL. I couldn’t speak to the legislative intent. 

Mr. CARTER. OK. Well, please include that in your answer. That’s 

one of the things—— 

Ms. MAXWELL. Absolutely. Will do. 

Mr. CARTER. I’m going to move now to Mr. Archambault and ask 

you, the video that you showed there—now, understand, I spent 10 

years in the Georgia State legislature, all on Health and Human 

Services, so I understand about Medicaid. And we did the hospital 

bed tax in order to draw more dollars down, as was brought up by 

one of my fellow members earlier. In fact, they are looking at reauthorizing that again this year. And you bring up a valid point 

about how states balance budgets, because, quite honestly, we did 

it that way, and that was one of the reasons why. 

But my question is about the video you showed. Now, I am a 

strong believer that Medicaid should include the aged, blind, and 

disabled. In fact, I think that if—and if you’ll help me—that most 

of the costs in the Medicaid program can be attributed to the ABD. 

Would that be—and what percentage would that be? Seventy, 80 

percent? 

Ms. Yocom, do you—— 

Ms. YOCOM. I think it’s at least two-thirds. 

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Mr. CARTER. At least two-thirds? 

Ms. YOCOM. Yes. 

Mr. CARTER. OK. And we’re all in agreement that that’s most of 

it. 

But my question, Mr. Archambault, was why didn’t this patient—why wasn’t this patient eligible as disabled? It would seem 

to me like they wouldn’t have had to have waited on the waiver. 

Mr. ARCHAMBAULT. So, Congressman, thank you for the question. 

And I think it is important to know that we are talking about a 

couple different things here. What we were talking about in particular for her, for Skylar and her mother, is that there are some 

services that she could have access to under these waiver programs. 

So, for Skylar, you can’t just call a neighbor to babysit. You need 

to have certain skill sets to be able to be able to watch her, given 

her condition. And so this would allow access to those services. 

It’s not that individuals are completely off of Medicaid; it’s that 

we are talking about, are we providing the services that we have 

promised to individuals in a holistic manner to be able to take care 

of these most needy? 

Mr. CARTER. OK. Well, understand, again, I am one who believes 

that Medicaid should be taking care of that group. And once you 

get past that, now, we can have a discussion and we can debate 

who’s to be covered and who’s not to be covered. But I honestly believe, as a healthcare professional, that they should be covered. 

Mr. ARCHAMBAULT. And, Congressman, that’s my exact point, is 

that we are extending new promises to able-bodied, largely childless adults before fulfilling that promise. 

Mr. CARTER. OK. Good. Thank you for that. 

Very quickly, I’m sorry I don’t have much time, Mr. Howard, I 

just wanted to ask you, HHS now projects that newly eligible Medicaid patients are going to cost $6,366 per enrollee in 2015 and that 

this is a 49-percent increase in what they had projected before. 

Why is that? Why are they costing more? 

Mr. HOWARD. Congressman, it may be because, in these new expansion programs, states have raised their reimbursement rates to 

providers to get these newly eligible populations in the system. 

That’s my understanding. 

Mr. CARTER. It would appear to me, if the—again, I get back to 

the aged, blind, and disabled. If they were already included, they 

are the most expensive. And why are they—I’m sorry. I know I’m 

running past my time. It just baffles me why it’s gone up that 

much. 

Mr. MURPHY. OK. 

Mr. CARTER. Thank you, Mr. Chairman. I yield back. 

Mr. MURPHY. OK. Thank you. 

I’m now going to recognize Mr. Collins for 5 minutes. 

Mr. COLLINS. Thank you, Mr. Chairman. 

I’m going to be directing this to you, Mr. Howard, but some background: I’m western New York, and New York, as we all know, is 

one of the highest states in Medicaid per capita spending and total 

spending. And while New York only has 6 1⁄2 percent of the Nation’s population, it accounts for over 11 percent of the national 

Medicaid spending. And according to a 2014 report from Medicare 

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and CHIP Payment and Access Commission, using data from 2011, 

New York spent 44 percent more per Medicaid enrollee than the 

national average. 

There’s all kind of complex and fragmented funding streams that 

make it very difficult to provide adequate accounting controls for 

the program. 

So the question is this: In 2012, a report from the HHS Office 

of the Inspector General revealed that New York had systematically overbilled Federal taxpayers for Medicaid services for the 

mentally disabled for 20 years. New York State developmental centers, which offer treatment and housing for individuals with severe 

developmental disabilities, had received 1.5 million annually per 

resident in 2009, for a total of 2.3 billion. State centers were compensated at Medicaid payment rates 10 times higher than the Medicaid rates paid to comparable privately run developmental centers. 

So the simple question is, how could these overpayments go unnoticed for 20 years? 

Mr. HOWARD. Congressman, it’s because there is simply no financial incentive for the states to go back and police their systems in 

a way that would result in a significant decrease in Federal funding. 

The State of New York actually settled with HHS, I believe, for $1.63 billion for overpayments. I think it was 2009 through 2011. 

So, to some extent, the problem was remedied, but the reality is, 

as I said before, the ratchet only goes one way. 

Congresswoman Clarke pointed out earlier that Governor Cuomo 

has had quite a bit of success, which I noted in my testimony, in 

bringing down the payment rate—pardon me, for the growth rate 

for Medicaid. I think if someone who had an R by their name had 

suggested what is effectively for New York State a cap on growth 

of the most nondisabled part of the program, that it would be held 

to 30 percent effectively below the historical payment rate for the 

program, I think there would have been cries of poverty and that 

we’d be throwing people out of the program. Miraculously, New 

York State providers found ways to significantly decrease their 

spending by hundreds of millions of dollars. 

I think that the belief that significant flexibilities or block grants 

or per capita caps would automatically mean less delivery of care 

ignores that economists on the right and left center of the aisle believe there’s significant opportunities for efficiency in health care. 

And until we give states better programmatic and financial goals 

to seek out that efficiency, we are not going to be getting the best 

outcome for every dollar we’re spending on health. 

Mr. COLLINS. Well, being a New Yorker and bringing this up, I 

would have to say, while they apparently negotiated a significant 

settlement, it in fact did not reimburse the Federal Government for 

20 years of egregious behavior which I would say was deliberate. 

You can’t be charging 10 times the national average for 20 straight 

years and try to, you know, prove that this was not intentional. 

So, you know, we talk about R’s and D’s. I have to wonder, if 

there wasn’t a D behind the President’s name and a D behind our 

Governor’s name, if that settlement would have come closer to reimbursing the U.S. taxpayers for what I think was grand theft 

auto. 

122 

So another question about New York. Well, by the way, the reason I come at this the way I do, as a county executive of Erie County, largest upstate county, we’re one of only a handful of states 

where the counties have to pay a share. And, by the way, on DSH 

and IGT for UPL, the counties pay 100 percent of the Federal 

match. The state pays nothing. 

In the case of Erie County, my county, second, third, fourth city 

in the United States, city of Buffalo, 110 percent of our property 

taxes went to Medicaid. We couldn’t raise enough property tax to 

even pay our county’s share of Medicaid because of the way New 

York State runs this program. We had to supplement it with sales 

tax revenue. That’s why I get a little emotional when I find out the 

state’s been cheating for 20 years, especially the way they handle 

the counties. 

But, also, as I understand it, in a 2009 report, New York State 

ranked last in affordable hospital admissions—last. So our outcomes are so poor. What is going on in New York? And we’ve only 

got 20 seconds, but—— 

Mr. HOWARD. Just very quickly, I think there’s also consensus 

that the amount of spending we put on health care does not automatically correlate to better outcomes. So if you look at a scatter 

plot of state spending per enrollee, it’s all over the map, and outcomes are all over the map, because there’s an increasing body of 

research that says health behaviors, not access to care, not insurance, dictate long-term health outcomes. We just need to think 

about health differently. 

Mr. COLLINS. And I couldn’t agree more that there’s no correlation between spending and outcome. 

Thank you very much for your testimony. 

Mr. MURPHY. We now recognize the chairman of the full committee. Welcome back. Mr. Walden, you are recognized for 5 minutes. 

Mr. WALDEN. Thank you, Mr. Chairman, and thank you for conducting this oversight hearing. 

I want to thank our witnesses today for your extraordinary testimony. It’s very valuable in the work we’re engaged in. 

I want to focus on data and high risk, and especially to both the 

GAO and to the HHS OIG. Because my understanding is for 14 

years running Medicaid has been on your high-risk list for a problem. What’s behind that? Is that because CMS does not collect the 

right data to begin with? 

Ms. YOCOM. I think there’s a couple of things behind it. One is 

the nature of the partnership itself, that by the time the Federal 

Government is reviewing expenditures, the expenditures have occurred, so that prevention-the ability is—— 

Mr. WALDEN. That’s always lacking? 

Ms. YOCOM [continuing]. Always challenging. 

The second piece really is about data. You simply cannot run a 

program this large when you can’t tell where the money is going 

and where it has been. We need better data. 

Mr. WALDEN. And so have you made recommendations to CMS 

to collect better data, and have they ignored those recommendations? Or what’s the issue there? 

123 

Ms. YOCOM. We have a report coming out in just a few days that 

might answer that question a little more fully, but I think Ms. 

Maxwell can now. 

Mr. WALDEN. Well, feel free to go ahead and share it today if—— 

Ms. MAXWELL. The IG has been focused on this area for quite 

some time. We have followed the evolution of the national data and 

continue to push CMS to create a deadline for when they think 

that data will be available, specifically for program integrity reasons. 

Mr. WALDEN. So one of the issues that’s come up in the press is 

this issue of woodworking. Everybody’s trying to count numbers 

here. And I like what you said about let’s get to quality outcomes, 

but off that for a minute. So there’s this issue of woodworking, how 

many people are eligible before that are being counted now as if 

they’re new eligibles. 

And my question is, do we know that answer? And, second, are 

there states that are getting reimbursed at a higher rate, as if we 

were paying for newly eligibles at what would be, what, a 95 percent rate now, when in fact those individuals were actually always 

eligible and the state should be compensated at a lower rate? 

Do we know any data surrounding that, how many people are actually, quote/unquote, woodworking? Have states been reimbursed 

at a higher rate when they should have been reimbursed at a lower 

rate? 

Ms. MAXWELL. I can’t speak to the working number specifically. 

I can tell you the IG has the same question that you have, and we 

have work underway to answer that exact question. So are states 

pulling down reimbursement for eligible beneficiaries as if they 

were in the newly eligible category—— 

Mr. WALDEN. Correct. 

Ms. MAXWELL [continuing]. When, instead, they should have 

been enrolled in traditional Medicaid? That work will be forthcoming. 

Mr. WALDEN. Do you have a timeline on when you think you may 

have answers for us on that? 

Ms. MAXWELL. We have four states that we’re looking at. The 

first two states probably in the next couple of months, and then the 

other two probably later in the year. 

Mr. WALDEN. Can you reveal what those four states are? 

Ms. MAXWELL. I can if you give me a minute. 

Mr. WALDEN. OK. 

Ms. YOCOM. And while she—— 

Mr. WALDEN. Ms. Yocom? 

Ms. YOCOM [continuing]. Is looking, we did issue some work that 

looked at this question, and we did identify some issues where it 

appeared that people were not accurately categorized by whether 

they received the 100-percent match or a state expansion match or 

their regular FMAP. We did identify problems there. 

And one of the recommendations that is still outstanding in this 

area has to do with the fact that CMS adjusted the eligibility differences but then did not circle back and correct the financing that 

occurred. So we think those two things need to be related. If you 

identify an eligibility issue—either way, if the matching rate is off, 

it should be corrected. 

124 

Mr. WALDEN. Yes. 

Ms. YOCOM. CMS is starting to look at that, but—— 

Mr. WALDEN. It could be a big number. We don’t know. But it’s 

an important thing to get right. 

I remember I spent about 4 1⁄2, 5 years on a community hospital 

board at a time when the Federal Government decided to go after 

virtually every hospital and allege billing misbehavior, shall we 

say, going back, I don’t know, 8, 9, 10 years. And the threat to the 

hospitals was, we will use the RICO statute because you have engaged in criminal practice because of multiple cases. 

And it just strikes me that they were willing to do that there. 

Everybody had to settle, because nobody wanted to go down that 

path. We know the government sometimes gets it wrong, but, oh, 

we’d never go after the government with RICO. 

What is happening here with these states I guess is a legitimate 

question when we’ve got people that are aged, blind, disabled waiting to get on? Are we—and a limited resource. And we don’t have 

the data. That’s what you’re telling me, isn’t it? 

Ms. MAXWELL. Yes. And I have the states. So we will have data 

on the four States, and they are Kentucky, California, New York, 

and Colorado. 

Mr. WALDEN. Kentucky, California, New York, Colorado. And 

your timeline, again, to probably conclude your analysis? 

Ms. MAXWELL. The first couple will be probably be final in the 

next month or two, and then the final two will be later this year. 

Mr. WALDEN. All right. 

Ms. MAXWELL. We’ll be sure to let you know. 

Mr. WALDEN. And if we could do one thing with CMS to help you 

be able to do your job the way you want to do it, what would that 

be, Ms. Yocom? 

Ms. MAXWELL. Oh, I hate to keep saying it, but it’s got to be the 

data. We just absolutely need the data. 

Mr. WALDEN. Ms. Yocom, same? 

Ms. YOCOM. Yes, I would agree. 

Mr. WALDEN. OK. If there are specific items related to data, 

please get those to us. I’ll be happy to work with the incoming CMS 

Administrator, and we will do our best to get you the data. Because 

it’s important to all of us for our decisionmaking. And we know we 

have people waiting on the list, can’t get access to care. And we’ve 

got to get the waste and the fraud out. We’ve got to get them off 

this risk list. 

Thank you very much for your testimony. 

Mr. Chairman, thanks for your leadership on this. 

Mr. MURPHY. The chairman yields back. 

I have one more question I want to ask Mr. Howard. And this 

relates to trying to find some other ways of saving money and providing more effective care within Medicaid. And it has to do with 

more alternative payment models as a way to reduce costs. That 

being physicians, providers, hospitals are paid to take care of the 

patient, as opposed to a fee for service, which is every time someone shows up, you bill them. It’s sort of like paying a carpenter 

based upon how many nails he puts in a house. He’ll put a lot of 

nails in that house. 

125 

Whereas, an alternative payment model, whether it is making 

calls to the patient to check up on their medication, to remind them 

of their appointment, to counsel them, to keep them out of the 

emergency room, to get effective care, those sort of approaches. 

So I’m thinking, in linking with the Medicaid amount, HHS estimated the improper payments from Medicaid amounted to 30 billion in 2015, with an error rate hovering around 10 percent. At the 

same time, studies like the Oregon Medicaid Experiment showed 

that Medicaid coverage does not necessarily result in better health 

outcomes, as we talked about before. 

So what do you think about these alternative payment models as 

a way of saying that the skin in the game is also the physicians 

and hospitals, to make sure that they are doing all they can to 

keep the patients healthy? 

Mr. HOWARD. Absolutely, I think that experimenting with these 

models is critical. You need the data to be able to understand who 

is the best provider. We talk a lot about waste, fraud, and abuse. 

That’s certainly a big problem. But estimates from even people like 

Donald Berwick are that 20, potentially 30 percent of care is either 

ineffective or wasted. 

And there are providers that we know are doing terrific jobs at 

a fraction of the cost; hospitals across the street from another hospital providing care more efficiently. If we had data transparency, 

we could encourage more competition among those across these 

payment models. 

Mr. MURPHY. Can you get us information on how you would see 

those things worked out? 

Mr. HOWARD. Absolutely. 

Mr. MURPHY. The committee would appreciate that. 

Ms. DeGette, do you have a followup comment? 

Ms. DEGETTE. I just had a couple comments, Mr. Chairman. 

The first thing is that here’s something we can agree on in a bipartisan way, is getting you folks the data that you need. So I’ll 

just echo what Mr. Walden said. Whatever specific suggestions you 

have, let us know. And, also, I’m assuming that you need that 

staffing, that if we freeze your hiring, that’s going to be a problem. 

I just want to make a couple of comments about the Medicaid expansion, which is, first of all, a lot of people—I keep hearing people 

today say that we really want to make sure that people who have 

chronic and severe diseases, like the videotape we saw, get services, and that’s absolutely true. And then people on the other side 

keep talking about able-bodied adults. 

And I would just point out that 80 percent of the people who are 

getting the Medicaid expansion are working. So, you know, they 

might be able-bodied adults, but they have jobs, and they were uninsured before because either their employers didn’t offer insurance 

or because the insurance that they could get was too expensive. 

And so these people were going without health care, which, as Mr. 

Westmoreland and others said, that just increases the costs for everybody because of the costs of uncompensated care. 

And if there’s ways—I was just talking to Mrs. Brooks about 

this. If there’s ways that we can find efficiencies in the program— 

all of us are for more efficiencies, and we’re for delivering health 

care in a more cost-effective way, not just within Medicaid but 

126 

within private insurance too. And this is something, again, I think 

that we could work in a bipartisan way to make this happen. But 

just to say, well, we shouldn’t give the Medicaid expansion because 

these people are, quote, ‘‘able-bodied’’ adults is not understanding 

who’s getting it. 

I just want to close with an email that I got from my best friend 

from South High School in Denver, Colorado. We are not spring 

chickens anymore. And here’s what my friend Lori Dunkley—she 

sent this to me a couple weeks ago, without solicitation. She just 

sent it to me. 

‘‘I just want to add my story to others you are hearing about the 

Affordable Care Act. I was laid off during the recession and lost a 

lot of my retirement stability. Then, at age 54, I looked for a job 

for 3 years without success. I had no health insurance. Finally, I 

fell back on my journalism skills and landed work writing for several neighborhood papers. This has worked out fine, but only because of getting insurance through the ACA. I make very modest 

money, and so I qualify for the expanded Medicaid program. What 

a godsend. Since I am not yet Medicare age but too old for the job 

market, I don’t know what I’d do without this help.’’ 

This is the people that we’re talking about. So we have to figure 

out how we’re going to give health care to the 11 to 12 million people who have gotten health care because of this Medicaid expansion. That’s what we’re talking about. 

Thank you, Mr. Chairman. 

Mr. MURPHY. The gentlewoman yields back. 

And this will bring to a conclusion this hearing of the Subcommittee on Oversight and Investigations. I’d like to thank the 

witnesses and all members that participated in today’s hearing. 

I remind members they have 10 business days to submit questions for the record, and I ask the witnesses all agree to respond 

promptly to the questions. 

Thank you so much for being here. 

And, with that, this subcommittee is adjourned. 

[Whereupon, at 12:25 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

Thank you, Mr. Chairman. And welcome to the first E&C hearing of the 115th 

Congress. Today, we are taking a closer look at the Medicaid program to ensure the 

program is operating effectively, that Americans who are eligible for the program 

have access to, and actually receive, the quality care that they deserve, and that 

tax dollars are spent appropriately. 

In Fiscal Year 2015, total spending of the Medicaid program was $509 billion, 62 

percent of that was paid for by the federal government. According to the Congressional Budget Office, the federal share of Medicaid spending is expected to rise significantly over the next decade. 

While Medicaid provides coverage to millions of low-income and disabled Americans, the program is not immune to challenges—including increasing costs, fraud, 

and errors with eligibility determination that result in millions of wasted taxpayer 

dollars. Meanwhile, some of America’s most frail and needy citizens remain on waiting lists. We need to ensure that eligible beneficiaries of the program have access 

to high quality care, while being good stewards of hardearned taxpayer dollars. 

This hearing is an important part of the continued oversight that our committee, 

the Inspector General and the Government Accountability Office have conducted 

over this vast program. 

127 

All of us here today agree that Medicaid is an essential program for the population that it serves. With Medicaid expansion, and the rapid growth of the program, we can’t shy away from asking the tough questions. Program integrity and 

oversight are vital to ensure we don’t get stuck in an ‘auto-pilot’ spending pattern 

that doesn’t serve the beneficiaries of the program by improving their overall health 

outcomes. 

We look forward to a productive dialogue with our witnesses today, to discuss the 

troubling findings in the reports and audits conducted by the GAO and HHS OIG. 

We also hope to examine the effects that Medicaid expansion has had on states’ 

budgets and beneficiaries. 

Tomorrow, our Health Subcommittee will hold a hearing focused on solutions to 

fix some of the problems plaguing the Medicaid program. And on Thursday, our 

Health Subcommittee will examine insurance reforms. It’s an important first week 

back in the hearing room as we explore ways to rebuild our health care system. 

I would like to thank the witnesses for testifying today and look forward to hearing from this distinguished panel. 

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