U.S. GOVERNMENT PUBLISHING OFFICE

36–069 WASHINGTON : 2019

OPPORTUNITIES TO IMPROVE HEALTH CARE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 5, 2018 

Serial No. 115–161 

( 

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 

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 

JEFF DUNCAN, South Carolina 

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 

(III) 

SUBCOMMITTEE ON HEALTH

MICHAEL C. BURGESS, TEXAS

Chairman 

BRETT GUTHRIE, Kentucky 

Vice Chairman 

JOE BARTON, Texas 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

MARSHA BLACKBURN, Tennessee 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

LEONARD LANCE, New Jersey 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GREG WALDEN, Oregon (ex officio) 

GENE GREEN, Texas 

Ranking Member 

ELIOT L. ENGEL, New York 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

BEN RAY LUJA ́ N, New Mexico 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

ANNA G. ESHOO, California 

DIANA DEGETTE, Colorado 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(V) 

C O N T E N T S 

Page 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 1 

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

Hon. Gene Green, a Representative in Congress from the State of Texas, 

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

Prepared statement .......................................................................................... 5 

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

opening statement ................................................................................................ 7 

Prepared statement .......................................................................................... 8 

WITNESSES

Hugh M. Chancy, RPH, Owner, Chancy Drugs, Hahira, Georgia, and Member, 

Board of Directors, National Community Pharmacists Association ................ 10 

Prepared statement .......................................................................................... 13 

Answers to submitted questions ...................................................................... 208 

Curtis Cunningham, Vice President, National Association of States United 

for Aging and Disabilities (NASUAD), and Assistant Administrator, LongTerm Care Benefits And Programs, Division of Medicaid Services, Department of Health Services, State of Wisconsin ..................................................... 18 

Prepared statement .......................................................................................... 21 

Matt Salo, Executive Director, National Association of Medicaid Directors ...... 27 

Prepared statement .......................................................................................... 29 

Rick Merrill, President and CEO, Cook Children’s Health Care System, Fort 

Worth, Texas ........................................................................................................ 37 

Prepared statement .......................................................................................... 40 

Derek Schmidt, J.D., Attorney General, State of Kansas .................................... 49 

Prepared statement .......................................................................................... 51 

Answers to submitted questions ...................................................................... 211 

David Yoder, Pharm.D., M.B.A., Executive Director of Member Care and 

Benefits, Blue Cross Blue Shield Association’s Federal Employee Plan ......... 73 

Prepared statement .......................................................................................... 75 

SUBMITTED MATERIAL

Documents submitted by Mr. Barton 

Statement of the Association of American Medical Colleges ........................ 75 

Statement of various heart associations ......................................................... 122 

Statement of the American Academy of Pediatrics ....................................... 124 

Statement of the American Board of Pediatrics ............................................ 125 

Statement of the American College of Cardiology ......................................... 126 

Statement of the Association of Medical School Pediatric Department 

Chairs ............................................................................................................. 127 

Statement of the Autism Society of America ................................................. 129 

Statement of Autism Speaks ........................................................................... 130 

Statement of the California Children’s Hospital Association ....................... 132 

Statement of ChildServe .................................................................................. 133 

Statement of the Foundation to Eradicate Duchenne ................................... 135 

Statement of the International Pediatric Rehabilitation Collaborative ....... 137 

Statement of the March of Dimes ................................................................... 139 

Statement of the National Association for Children’s Behavioral Health ... 140 

Statement of the National Association of Pediatric Nurse Practitioners .... 141 

Statement of the National Down Syndrome Society ..................................... 143 

Statement of the Tricare for Kids Coalition ................................................... 145 

Statement of Vizient, Inc. ................................................................................ 147 

Page

VI 

Documents submitted by Mr. Green 

Statement of the Medicare Payment Advisory Commission ......................... 148 

Statement of the Medicaid and CHIP Payment and Access Commission ... 151 

Statement of St. Joseph’s Children’s Hospital, submitted by Ms. Castor ........... 153 

Documents submitted by Mr. Walberg 

Statement of the National Association of Attorneys Generals ..................... 163 

Statement of Families USA ............................................................................. 168 

Statement of the Partnership for Medicaid Home Based Care .................... 169 

Documents submitted by Mrs. Dingell 

Statement of the Area Agencies of Aging Association of Michigan .............. 171 

Statement of the National Association of Medicaid Directors, the National 

Association of State Directors of Developmental Disability Services, 

the National Association of States United for Aging and Disabilities ..... 172 

Statement of dozens of health and aging organizations ................................ 175 

Documents submitted by Mr. Burgess 

Statement of PillPack, Inc. .............................................................................. 197 

Statement of LeadingAge ................................................................................. 198 

Statement of Medicaid Health Plans of America ........................................... 200 

Statement of the American Association of Medical Colleges ........................ 206 

(1) 

OPPORTUNITIES TO IMPROVE HEALTH CARE 

WEDNESDAY, SEPTEMBER 5, 2018 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HEALTH, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:04 a.m., in room 

2123, Rayburn House Office Building, Hon. Michael Burgess, M.D. 

(chairman of the subcommittee) presiding. 

Present: Representatives Burgess, Guthrie, Barton, Shimkus, 

Latta, Lance, Griffith, Bilirakis, Long, Bucshon, Brooks, Mullin, 

Hudson, Carter, Walden (ex officio), Green, Engel, Schakowsky, 

Matsui, Castor, Sarbanes, Schrader, Kennedy, Ca ́ rdenas, and 

Degette. 

Also Present: Representatives Walberg, Welch, and Dingell. 

Staff Present: Mike Bloomquist, Staff Director; Samantha Bopp, 

Staff Assistant; Adam Buckalew, Professional Staff Member, 

Health; Daniel Butler, Legislative Clerk, Health; Karen Christian, 

General Counsel; Jordan Davis, Senior Advisor; Melissa Froelich, 

Chief Counsel, DCCP; Adam Fromm, Director of Outreach and 

Coalitions; Ali Fulling, Legislative Clerk, O&I, DCCP; Theresa 

Gambo, Human Resources/Office Administrator; Caleb Graff, Professional Staff Member, Health; Jay Gulshen, Legislative Associate, 

Health; Ed Kim, Policy Coordinator, Health; Ryan Long, Deputy 

Staff Director; James Paluskiewicz, Professional Staff, Health; 

Kristen Shatynski, Professional Staff Member, Health; Jennifer 

Sherman, Press Secretary; Austin Stonebraker, Press Assistant; 

Josh Trent, Chief Health Counsel, Health; Jacquelyn Bolen, Minority Professional Staff; Tiffany Guarascio, Minority Deputy Staff Director and Chief Health Advisor; Una Lee, Minority Senior Health 

Counsel; Rachel Pryor, Minority Senior Health Policy Advisor; and 

Samantha Satchell, Minority Senior Policy Analyst. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. I call the Subcommittee on Health to order. I am 

going to ask our guests to please take their seats. And, again, welcome to everyone for the first September hearing of the Health 

Subcommittee of the Energy and Commerce Committee, the most 

productive subcommittee in the United States House of Representatives. 

So today we are joined by a panel of witnesses. I will recognize 

myself for 5 minutes for an opening statement. We are joined by 

a panel of witnesses who are going to provide us testimony on a 

2 

variety of topics and legislative ideas, ranging from initiatives to 

address drug pricing to reducing fraud at the Centers for Medicare 

and Medicaid Services to improving the care of children with complex medical conditions. 

These bills cover different topics within healthcare, but there is 

a common thread that connects all. All of the bills in discussion 

drafts before us today have the aim to improve the access and the 

quality of care for America’s patients and their families. 

So, first, I would like to commend Representative Buddy Carter 

of Georgia for his hard work on legislation to prohibit gag clauses 

in Medicare and private health insurance plans. Gag clauses prohibit pharmacists from informing patients that paying in cash will 

result in lower out-of-pocket costs than the insurer’s cost-sharing 

arrangement unless the patient directly requests such information. 

The draft bill being discussed today is essential in both lowering 

drug costs for individuals and freeing the pharmacists to do what 

many consider would be the right thing, in fact, freeing the pharmacist to simply do their job. It would ban an employer and individual health insurance plans, in addition to Medicare Advantage 

and Medicare part D plans, from using gag clauses. 

This bipartisan policy has been a shared priority for Mr. Carter 

and others on the committee for quite some time, and it was 

brought further to the forefront by the administration’s drug pricing blueprint that many of us attended a Rose Garden ceremony 

in May. While the gag clauses are already prohibited in Medicare, 

it is important that we protect consumers by putting this in statute 

and sending this bill to the President’s desk as soon as possible. 

Today, we are also considering several Medicaid bills and discussion drafts that will further prevent and investigate fraud and 

abuse in addition to increasing access for certain beneficiaries. 

H.R. 3891, introduced by Representatives Walberg and Welch, 

will improve the authority of the State Medicaid Fraud Units, 

which currently investigate provider fraud and patient abuse only 

in healthcare facilities and care facilities. According to the Health 

and Human Service Office of the Inspector General, Medicaid 

Fraud Control Units recovered almost $2 billion in fiscal year 2017. 

This legislation builds upon the success of these Fraud Control 

Units by broadening their authority to investigate and prosecute 

abuse and neglect of beneficiaries in noninstitutional or other settings. Another discussion draft before us today will codify the 

Health Fraud Prevention Partnership, which will further enable 

our public and private institutions to combat fraud within the 

healthcare system. 

Health Subcommittee Vice Chairman Guthrie and Representative Dingell have introduced the EMPOWER Care Act, which will 

extend the Money Follows the Person Demonstration for an additional 5 years. This Medicaid demonstration, which was established 

in 2005, has enabled eligible individuals in States across our Nation, including Texas, to receive long-term care services in their 

homes or other community settings rather than in institutions such 

as nursing homes. Not only does this increase the comfort and 

quality of life for many Medicaid beneficiaries, but it has reduced 

hospital readmissions and saved money within the Medicaid program. 

3 

The final Medicaid discussion draft, the ACE Kids Act, is introduced by full committee Vice Chairman Barton and Representative 

Castor of Florida and has received substantial feedback from stakeholders and has been revised to reflect this increased input. The 

goal of this legislation is to improve comprehensive care for medically complex children through a State option to create a Medicaid 

health home specific for children. The bill will also increase data 

collection and add a requirement for the Department of Health and 

Human Services to issue guidance on best practices for providing 

care for this unique and complex pediatric population. 

I do want to thank the members whose legislation we are considering today. They have put in a lot of time and effort and certainly 

as has their staff. They put this into the development and fine-tuning of the language. I look forward to hearing from our witnesses 

and having a productive discussion on these important public 

health initiatives. 

And now I yield back my time, and I want to recognize the ranking member of the subcommittee, Mr. Green of Texas, 5 minutes 

for an opening statement, please. 

[The prepared statement of Mr. Burgess follows:] 

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS

Good morning, everyone. Today, we are joined by a panel of witnesses who are 

here to testify on a variety of topics and legislative ideas, ranging from initiatives 

to address drug pricing to reducing fraud at the Centers for Medicare and Medicaid 

Services, to improving the care of children with complex medical conditions. 

While these bills cover different topics within health care, there is one common 

thread that connects them. All of the bills and discussion drafts before us today aim 

to improve the access to and quality of health care for American patients and their 

families. 

First, I would like to commend Representative Buddy Carter of Georgia for his 

hard work on legislation to prohibit gag clauses in Medicare and private health insurance plans. Gag clauses prohibit pharmacists from informing patients that paying in cash will result in lower out of pocket costs than the insurer’s cost-sharing 

arrangement, unless the patient directly asks. The draft bill being discussed today 

is essential in both lowering drug costs for individuals and in freeing pharmacists 

to do what many consider to be the right thing. It would ban employer and individual health insurance plans, in addition to Medicare Advantage and Medicare 

Part D Plans, from using gag clauses. 

This bipartisan policy has been a shared priority for Mr. Carter and others on the 

committee for quite some time and was brought further to the forefront by the Administration’s drug pricing blueprint in May. While gag clauses are already prohibited in Medicare, it is important that we protect consumers by putting this in statute and sending this bill to the President’s desk as soon as possible. 

Today we are also considering several Medicaid bills and discussion drafts that 

will further prevent and investigate fraud and abuse, in addition to increasing access to care for certain beneficiaries. 

H.R. 3891, introduced by Representatives Walberg and Welch will improve the authority of State Medicaid Fraud Control Units, which currently investigate provider 

fraud and patient abuse only in health care facilities and board and care facilities. 

According to the Health and Human Services Office of the Inspector General, Medicaid Fraud Control Units recovered $1.8 billion dollars in fiscal year 2017. This legislation builds upon the success of these fraud control units by broadening their authority to investigate and prosecute abuse and neglect of beneficiaries in non-institutional or other setting. Another discussion draft before us today will codify the 

Healthcare Fraud Prevention Partnership, which will further enable our public and 

private institutions to combat fraud within our health care system. 

Health Subcommittee Vice Chairman Guthrie and Representative Dingell have introduced the EMPOWER Care Act, which will extend the Money Follows the Person 

Demonstration for five additional years. This Medicaid demonstration, which was 

established in 2005, has enabled eligible individuals in states across our nation, including Texas, to receive long-term care services in their homes or other community 

4 

settings, rather than in institutions such as nursing homes. Not only does this increase the comfort and quality of life for many Medicaid beneficiaries, but it has 

reduced hospital readmissions, and saved money within the Medicaid program. 

The final Medicaid discussion draft, the ACE Kids Act, introduced by full committee Vice Chairman Barton and Representative Castor, has received substantial 

feedback from stakeholders and has been revised to reflect their input. The goal of 

this legislation is to improve comprehensive care for medically complex children 

through a state option to create a Medicaid health home specific to children. The 

bill will also increase data collection and add a requirement for the Department of 

Health and Human Services to issue guidance on best practices for providing care 

for this unique and complex pediatric population. 

I would like to thank the members whose legislation we are considering today for 

the time, effort, and thought that they have put into the development and fine-tuning of the language. I look forward to hearing from our witnesses and having a productive discussion on these important public health initiatives. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman, for holding today’s hearing on these bipartisan drafts and legislation to improve the delivery cost of healthcare in our country. In particular, I am happy to 

see that our committee will be considering H.R. 3325, the Advancing Care for Exceptional Kids, or ACE Kids Act. I am grateful to 

Representatives Barton and Castor for their commitment to the 

children with complex medical needs and their quest to improve 

the system of care provided to our nation’s most vulnerable population. 

I am also proud to be a cosponsor of the ACE Kids Act. The ACE 

Kids Act aims to improve the delivery care for children with complex medical conditions served by Medicaid. It presents a great opportunity for us to implement better care delivery and payment 

models to support children and their families. 

The current discussion draft will establish a Medicaid health 

home State option, specifically targeting children with medically 

complex conditions, and require the Department of Health and 

Human Services to issue guidance regarding the best practices for 

using out-of-State providers for children with medically complex 

conditions. States who accept this new home health option for children with medically complex conditions will receive an enhancement 90 percent Federal medical assistance percentage, FMAP, for 

the first eight fiscal year quarters after the option is adopted. 

The discussion draft seeks to achieve three primary goals: improve the coordination of care for children; address the problems of 

fragmented access, especially when the necessary care is only available out of State; gather national data to help researchers improve 

services and treatments for children with complex medical conditions. 

I also want to thank our stakeholders in my area in Houston, 

Texas, Children’s Hospital—I am glad to have Dr. Cook on the 

panel I think today, no, anyway—and my colleagues for moving 

this important legislation. 

Children with medically complex conditions require a lot of 

healthcare and generate significant cost. One study found that children with complex medical conditions who account for just over 5 

percent of all children in Medicaid account for 34 percent of all 

Medicaid spending for children. 

5 

While the data is compelling, it is important not to reduce these 

children and their families to statistics. We must do a better job 

to ensure that all of these exceptional children get the care they 

need. 

Children with medically complex conditions often have multiple 

illnesses and disabilities and commonly need to see a number of 

physicians and specialists. The necessary care often requires these 

special children to travel across State lines to see one of the small 

number of pediatric specialists for their conditions. 

Under our current system, parents of kids with complex conditions struggle to coordinate the intricate multistate care of their 

children. We need this legislation to make sure that this care is 

more coordinated and seamless for families. The discussion draft is 

an important step forward. 

We must ensure that final legislation is robust and meaningful 

in accomplishing our shared goals of improving care and removing 

barriers for children with complex medical conditions. The ACE 

Kids Act now has 99 cosponsors, evidence that the health of our 

children is an issue above partisanship and brings us all together. 

I look forward to working with my colleagues to move the legislation forward and give our children the bright futures they deserve. 

I support the other four bills in discussion draft being considered 

today. Many of these bills, including H.R. 3891, will expand the authority of State Medicaid Fraud Control Units to investigate and 

prosecute Medicaid fraud and abuse at noninstitutional settings, 

and the discussion draft to codify the Health Fraud Prevention 

Partnership are comments and changes to current law and should 

receive wide bipartisan support. 

I also support the discussion draft to prohibit the use of the socalled gag clauses in Medicare and private health plans that prohibit pharmacists from informing consumers that their prescription 

can be purchased at a lower price. While I support the gag clause 

discussion draft, I hope the committee will consider a deeper examination for rising costs of prescription drugs and consider what 

Congress can do to help seniors struggling to afford their medication. 

And like you, Mr. Chairman, I want to thank our colleague from 

Georgia for bringing this up. This is a major issue with the seniors 

in my district in Houston and Harris County, Texas. I thank our 

witnesses for joining us today and look forward to hearing their 

testimony. Again, Mr. Chairman, thank you, and I yield back the 

remainder of my time. 

[The prepared statement of Mr. Green follows:] 

PREPARED STATEMENT OF HON. GENE GREEN

Thank you, Mr. Chairman, for holding today’s hearing on bipartisan legislation 

to improve the delivery and cost of health care in our country. 

In particular, I am happy to see that our committee will be considering H.R. 3325, 

the Advancing Care for Exception Kids or ‘‘ACE’’ Kids Act. 

I am grateful to Representatives Barton and Castor for their commitment to children with complex medical needs and their quest to improve the system of care provided to our nation’s most vulnerable population. 

I am a proud original co-sponsor of the ACE Kids Act. 

The ACE Kids Act aims to improve the delivery of care for children with complex 

medical conditions served by Medicaid. 

6 

It presents a great opportunity for us to implement better care delivery and payment models to support children and their families. 

The current discussion draft would establish a Medicaid health home state option 

specifically targeted for children with medically complex conditions and require the 

Department of Health and Human Services to issue guidance regarding best practices for using out-of-state providers for children with medically complex conditions. 

States that accept this new home health option for children with medically complex conditions will receive an enhanced 90 percent Federal Medical Assistance Percentage (FMAP) for the first eight fiscal year quarters after the option is adopted. 

The discussion draft seeks to achieve three primary goals: 

• Improve the coordination of care for children; 

• Address problems with fragmented access, especially when the necessary care is 

only available out-of-state; 

• Gather national data to help researchers improve services and treatments for 

children with complex medical conditions. 

I want to thank our stakeholders, Texas Children’s Hospital in particular, and my 

colleagues for moving this important legislation forward. 

Children with medically complex conditions require a lot of health care and generate significant costs. One study found that children with complex medical conditions, who count for just over 5 percent of all children in Medicaid, account for 34 

percent of all Medicaid spending for children. 

While the data is compelling, it is important not to reduce these children and 

their families to statistics. We must do a better job to ensure that all of these exceptional kids get the care they need. Children with medically complex conditions often 

have multiple illness and disabilities, and commonly need to see a number of specialists and physicians. The necessary care often requires these special children to 

travel across state lines to see one of the small number of pediatric specialists for 

their conditions. 

Under the current system, parents of kids with complex conditions struggle to coordinate the intricate, multi-state care of their children. 

We need this legislation to make this care more coordinate and seamless for families. 

This discussion draft is an important step forward. 

We must ensure that the final legislation is robust and meaningful to accomplish 

our shared goals of improving care and removing barriers for children with complex 

medical conditions. 

The ACE Kids Act now has 99 cosponsors, evidence that the health of our children 

is an issue that is above partisanship and brings us all together. 

I look forward to working with my colleagues to move this legislation forward and 

give our children the bright futures they deserve. 

I support the other four bills and discussion drafts being considered today. 

Many of these bills, including H.R. 3891, which would expand the authority of 

state Medicaid Fraud Control Units to investigate and prosecute Medicaid fraud and 

abuse in non-institutional settings, and the discussion draft to codify the Health 

Fraud Prevention Partnership (HFPP), are commonsense changes to current law 

and should receive wide bipartisan support. 

I also support the discussion draft to prohibit the use of so-called ‘‘Gag Clauses’’ 

in Medicare and private health insurance plans that prohibit pharmacists from informing consumers that their prescription can be purchased for a lower price outof-pocket. 

While I support the ‘‘gag clause’’ discussion draft, I hope that the committee while 

consider a deeper examination on the rising costs of prescription drugs and consider 

what Congress can do to help seniors struggling to afford their medication. 

This is a major issue for seniors in my district in Houston and Harris County. 

I thank our witnesses for joining us today and look forward to hearing their testimony. 

Thank you again, Mr. Chairman, and I yield the remainder of my time. 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

The chair recognizes the gentleman from Oregon, the chairman 

of the full committee, Mr. Walden, 5 minutes for an opening statement, please. 

7 

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

Mr. WALDEN. Well, thank you, Mr. Chairman, and thanks for all 

your great work in this subcommittee, that and the members. 

Again, today we are taking up bipartisan issues that really matter 

for people’s health and the cost of healthcare. So I think it is a real 

another step forward. 

So I traveled across Oregon over the last 5 weeks, covering 2,000 

miles, 39 meetings, and 12 counties. These issues come up, especially about healthcare, the cost, the quality. Accessing affordable 

healthcare is a real important issue, and it is one we consistently 

try to tackle in this committee. 

Today, we hope to build on the bipartisan achievements of the 

committee under the leadership of Chairman Burgess and Ranking 

Member Green and review yet another slate of bills that can help 

improve our overall healthcare system. 

Now, among those we will examine is the one we have heard 

about already pertaining to gag clauses, which have been front and 

center in the national debate on drug prices. Many patients who 

are struggling to afford costly prescription drug prices may not 

know that actually paying for their medications with cash is sometimes cheaper than using their health insurance. And with the 

high deductibles right now, you ought to be informed as a consumer. What is worse is some contracts prohibit pharmacists from 

telling their customers when this is the case. 

So banning these so-called ‘‘gag clauses’’ has gained tremendous 

bipartisan support, rightly so, with these bills in both the Senate 

Finance and Senate Health Committees advancing without objection. We will review the draft legislation banning group health 

plans offered by employers and individual health plans as well as 

Medicare Advantage and Medicare part D plans from limiting a 

pharmacist’s ability to inform a consumer about the lower cost outof-pocket price for their prescription. 

Now, another practical bill will give the administration additional authority to better detect and stop fraud and abuse in the 

healthcare system. This has been an area of interest for both the 

Obama and Trump administrations, and it is supported by the 

committee’s ranking member, Mr. Pallone, as well as myself. I look 

forward to our continued bipartisan work in this space. 

We will also consider three bills in the Medicaid space that will 

help ensure the beneficiaries who are receiving the support and 

care they deserve in the setting that works best for them. Mr. 

Guthrie and Ms. Dingell’s bill, H.R. 5306, for example, extend funding for the Money Follows the Person Demonstration Program, that 

is MFP Demonstration, in Medicaid. The MFP Demonstration provides additional resources for State Medicaid programs to help ensure Medicaid patients needing long-term care are served in their 

communities or in their homes instead of at institutions. By many 

measures, the MFP Demonstration has been successful. 

We will also consider a bill offered by Mr. Walberg and Mr. 

Welch, H.R. 3891, that will help improve the authority of State 

Medicaid Fraud Control Units, or MFCUs. Currently, MFCUs are 

only allowed to investigate cases of provider fraud and patient 

abuse in healthcare facilities or board and care facilities. This legisVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
8 

lation would broaden that authority so that these units could investigate and prosecute abuse and neglect of Medicaid beneficiaries in 

noninstitutional or other settings. Practically speaking, this bill 

will improve the ability of MFCUs to help protect vulnerable Medicaid patients from harm, while reducing the program’s resources 

diverted by fraud. 

And, finally, we will consider an amendment in the nature of a 

substitute to a familiar bill authored by our full committee vice 

chair, Mr. Barton, and Representative Castor. That is H.R. 3325. 

Under current law, a health home State plan amendment cannot 

target by age or be limited to individuals in a specific age range. 

The Centers for Medicare and Medicaid Services has reported that 

States have identified this inability to target health home services 

as an operational challenge. This bipartisan bill seeks to address 

that challenge by giving States a new option through the existing 

health home model to coordinate care for children with medically 

complex conditions. 

So further discussion of this report and bill, I would yield the 

balance of my time to full committee vice chair, Mr. Barton, and 

thank our witnesses for joining us today. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

Today’s hearing is another step forward to improve patient health care. As I traveled across Oregon over the last 5 weeks, I continued to hear from constituents 

about health care, particularly regarding the cost and quality of care. Today we 

hope to build on the bipartisan achievements of this subcommittee, under the leadership of Chairman Burgess and Ranking Member Green, and review yet another 

slate of bills that can help improve our health care system. 

Among the bills we will examine today is one pertaining to gag clauses, which 

have been front and center in the national debate on drug prices. Many patients 

who are struggling to afford costly prescription drug prices may not know that paying for their medications with cash can sometimes be cheaper than using their 

health insurance. What’s worse is some contracts prohibit pharmacists from telling 

their customers when this is the case. 

Banning these so-called ‘‘gag clauses’’ has gained tremendous bipartisan support, 

with bills in both the Senate Finance and Senate HELP committees advancing without objection. We’ll review draft legislation banning group health plans offered by 

employers and individual health insurance plans—as well as Medicare Advantage 

and Medicare Part D plans—from limiting a pharmacist’s ability to inform a customer about the lower cost, out-of-pocket price of their prescription. 

Another practical bill will give the administration additional authority to better 

detect and stop fraud and abuse in the health care system. This has been an area 

of interest for both the Obama and Trump administrations, and it’s supported by 

the committee’s Ranking Member, Mr. Pallone, as well as myself. I look forward to 

our continued bipartisan work in this space. 

We will also consider three bills in the Medicaid space that will help ensure that 

beneficiaries are receiving the support and care they deserve in the setting that 

works best for them. Mr. Guthrie and Ms. Dingell’s bill, H.R. 5306 for example, will 

extend funding for the Money Follows the Person Demonstration Program (MFP 

demonstration) in Medicaid. The MFP demonstration provides additional resources 

for state Medicaid programs to help ensure Medicaid patients needing long-term 

care are served in their communities or in their homes, instead of at institutions. 

By many measures, the MFP demonstration has been successful. 

We will also consider a bill authored by Mr. Walberg and Mr. Welch, H.R 3891, 

that will improve the authority of state Medicaid Fraud Control Units—or MFCUs. 

Currently, MFCUs are only allowed to investigate cases of provider fraud and patient abuse in health care facilities or board and care facilities. This legislation 

would broaden the authority of these units to investigate and prosecute abuse and 

neglect of Medicaid beneficiaries in non-institutional or other settings. Practically 

speaking, this bill will improve the ability of MFCUs to help protect vulnerable 

9 

Medicaid patients from harm, while reducing the program resources diverted by 

fraud. 

Finally, we will consider an Amendment in the Nature of a Substitute to a familiar bill authored by our full committee Vice Chairman Barton and Rep. Castor bill, 

H.R. 3325. Under current law, a Health Home state plan amendment cannot target 

by age or be limited to individuals in specific age range. The Centers for Medicare 

and Medicaid Services (CMS) has reported that states have identified this inability 

to target Health Home services as an operational challenge. This bipartisan bill 

seeks to address that challenge by giving states a new option through the existing 

Health Home model to coordinate care for children with medically complex conditions. 

To further discuss this important bill, I would like to yield the remainder of my 

time to the Vice Chairman of the Full Committee, Mr. Barton, and thank our witnesses for joining us here today. 

Mr. BARTON. Well, thank you, Mr. Chairman. Every now and 

then, we have a day when it reminds us why we ran for Congress. 

Today is one of those days. As Mr. Green in his opening statement 

just itemized, the ACE Kids Act, all the good things that it will do. 

So I don’t need to go through that. 

But we are going to have a hearing on that bill today among the 

other four bills, and hopefully, on Friday, we are going to mark it 

up. ACE Kids is a bill that has been in some shape or form before 

this subcommittee for about 6 years. The bill, the draft discussion 

today, is one of those rare things. It is totally bipartisan. Half of 

the cosponsors are Republican; half are Democrat. On this subcommittee, Mr. Latta, Mr. Lance, Mr. Guthrie, Mr. Bilirakis, Mr. 

Long, and Mr. Carter are Republican cosponsors. Mr. Green, Ms. 

Eshoo, Mrs. Dingell, Ms. DeGette, Ms. Castor, Mr. Kennedy, and 

Mr. Ca ́ rdenas are Democratic cosponsors. We have half the subcommittee cosponsor this bill. It doesn’t expand coverage; it doesn’t 

increase spending. It makes it better, Mr. Chairman. It allows families to choose. It allows the care providers to coordinate, and you 

can go across State lines. 

This is a really, really good bill. I hope we have a great hearing. 

I want to thank Rick Merrill from Fort Worth, Texas, for testifying 

in its favor, and I look forward to the discussion and the questions. 

With that, I yield back, Mr. Chairman. 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

The ranking member of the full committee has not yet arrived, 

so we will delay his opening statement until his arrival. 

But I do want to welcome and thank our witnesses for being here 

and taking time to testify before the subcommittee on these pending pieces of legislation. Each witness will have the opportunity to 

give an opening statement, and this will be followed by questions 

from members. 

So, today, in order, we are going to hear from Mr. Hugh Chancy, 

Owner, Chancy Drugs, and Member of the Board of Directors of the 

National Community Pharmacists Association; and Mr. Curtis 

Cunningham, Vice President, National Association of States United 

for Aging and Disabilities, and Assistant Administrator, Long-Term 

Care Benefits and Programs, Division of Medicaid Services, Department of Health Services from the State of Wisconsin; Mr. Matt 

Salo, the Executive Director of the National Association of Medicaid Directors; Mr. Rick Merrill—always have to have a Texan on 

the panel, so welcome and thank you for joining us today—Mr. 

10 

Rick Merrill, who is the President and CEO of Cook Children’s 

Health Care System in beautiful downtown Fort Worth, Texas; Mr. 

Derek Schmidt, the Attorney General for the State of Kansas; and 

Dr. David Yoder, Executive Director of Member Care and Benefits, 

Blue Cross Blue Shield Association’s Federal Employee Plan. 

Again, thanks to all of you. We appreciate you giving of your 

time today to testify. Mr. Chancy, you are now recognized 5 minutes to summarize your opening statement, please. 

STATEMENTS OF HUGH M. CHANCY, RPH, OWNER, CHANCY 

DRUGS, HAHIRA, GEORGIA, AND MEMBER, BOARD OF DIRECTORS, NATIONAL COMMUNITY PHARMACISTS ASSOCIATION; 

CURTIS CUNNINGHAM, VICE PRESIDENT, NATIONAL ASSOCIATION OF STATES UNITED FOR AGING AND DISABILITIES 

(NASUAD), AND ASSISTANT ADMINISTRATOR, LONG-TERM 

CARE BENEFITS AND PROGRAMS, DIVISION OF MEDICAID 

SERVICES, DEPARTMENT OF HEALTH SERVICES, STATE OF 

WISCONSIN; MATT SALO, EXECUTIVE DIRECTOR, NATIONAL 

ASSOCIATION OF MEDICAID DIRECTORS; RICK MERRILL, 

PRESIDENT AND CEO, COOK CHILDREN’S HEALTH CARE 

SYSTEM, FORT WORTH, TEXAS; DEREK SCHMIDT, J.D., ATTORNEY GENERAL, STATE OF KANSAS; AND DAVID YODER, 

PHARM.D., M.B.A., EXECUTIVE DIRECTOR OF MEMBER CARE 

AND BENEFITS, BLUE CROSS BLUE SHIELD ASSOCIATION’S 

FEDERAL EMPLOYEE PLAN 

STATEMENT OF HUGH M. CHANCY, RPH 

Mr. CHANCY. Chairman Burgess, Ranking Member Green, members of the subcommittee, thank you for conducting this hearing. 

My name is Hugh Chancy. I have been practicing community pharmacy since 1988. I am currently an owner of five community pharmacies in the southern part of Georgia, and I am here on behalf 

of the National Community Pharmacy Association. I currently 

serve as NCPA board of directors. NCPA represents America’s community pharmacists, including owners of more than 22,000 independent community pharmacies. I am here today as a healthcare 

provider and a small business owner to present my experience with 

restrictive contractual language, often called gag clauses, that may 

result in patients being charged inflated prices for their medications. 

My first experience with so-called gag clauses occurred in 2015, 

when one of my pharmacies served several patients on the city’s 

employment-sponsored insurance, including the city mayor. The 

city had just changed insurance providers, and many of my patients experienced a rise in their prescription copays. Specifically, 

the mayor’s copay of his medication went from roughly $7 to $26. 

When I noticed this difference, I informed the mayor that it 

would be cheaper if he paid cash for his prescription or off of his 

insurance. The mayor was fortunate to have the political wherewithal to contact the right people in charge of the city’s insurance 

plan and to complain about the changes and the oddities of paying 

more for the prescription on insurance than off. It goes without 

saying that many of the patients do not have similar avenues to 

voice their concerns about prescription drug coverage. 

11 

After the mayor contacted the plan, the plan consulted with their 

PBM, who issued us a verbal warning to my pharmacy for talking 

to the patient about the drug cost. The PBM stated that we are in 

violation of our contract for disparaging the plan when we discuss 

the cost of the drug off insurance. We were told that if our pharmacy were to do so again, there would be consequences and possibly exclusion from the PBM’s network. 

The common denominator in all community pharmacies’ experiences with gag clauses is a strained relationship with PBMs. When 

a patient comes to the pharmacy and presents insurance, the pharmacy is bound by the terms of the patient’s insurance and the 

PBM’s rules. Put simply, pharmacists do not play a role in determining the patient’s financial responsibility for prescription medications that they access through any prescription drug coverage. 

If a patient does not present insurance or if a patient inquires 

directly, however, pharmacies can tell the patient alternative 

means to purchase a drug. When a PBM is involved, however, communication with the patient becomes murky, because pharmacies 

are contractually required to charge the patient what the PBMs 

say when the prescription is processed. 

I am often asked what gag clauses look like in contracts, but the 

answer to that question is not as simple as it may seem. The expression ‘‘gag clauses’’ is a misnomer, because what is most often 

being referred to are multiple contract provisions or requirements 

embedded in lengthy PBM provider manuals that include overly 

broad confidentiality requirements and nondisparagement clauses. 

Some PBMs have even included provisions that can be interpreted 

as prohibiting communication with news media, policymakers, and 

even elected officials. 

Ultimately, these provisions have the effect of chilling a range of 

pharmacist communications with patients for fear of retaliation by 

the PBM. For this reason, the gag clause issue goes well beyond 

drug price disclosures. Further, community pharmacies like mine 

have very little negotiating power to strip these provisions out of 

their contracts. 

As a solution to this problem, community pharmacies need a 

place to point into law that will allow for the free flow of information between them and the patients. NCPA supports the discussion 

draft that is the focus of this hearing. The draft is legislation to 

prohibit gag clauses in Medicare and private insurance by banning 

health plans from restricting a pharmacy’s ability to inform customers about the lower cost, the out-of-pocket price for their prescription. 

Additionally, NCPA appreciates the work that Congressmen 

Buddy Carter and Peter Welch have done in introducing legislation 

that would also meaningfully address contract provisions that prohibit or penalize a pharmacist from communicating different cost 

options to their patients. 

Also, I was pleased to hear that CMS recently sent a letter to 

plan sponsors and Medicare explaining that any form of gag 

clauses in contracts is unacceptable. In addition, 25 States have 

passed legislation prohibiting gag clauses. These actions give pharmacists the ability to point to laws and rules that prevent PBMs 

from restricting free flow of information. 

12 

In conclusion, as Congress demands increased transparency in 

the prescription drug marketplace, this committee can provide a 

much needed stake in the ground to allow pharmacists to freely 

discuss drug costs with their patients. Providing the free flow of 

this kind of information is a step in the right direction to meaningfully addressing drug costs for Americans. Thank you. 

[The prepared statement of Mr. Chancy follows:] 

13 


36069.001

WWW,HC:I'A"IT.Oit.G 

United States House of Representatives Energy and Commerce Committee 

Subcommittee on Health Hearing 

"Opportunities to Improve Health Care" 

Written Testimony of: 

Hugh Chancy, R.Ph., Chief Executive Officer, Chancy Drugs 

On Behalf of the National Community Pharmacists Association (NCPA) 

September S, 2018 

Chairman Burgess, Ranking Member Green, and Members of the Subcommittee: 

Thank you for conducting this hearing that focuses on egregious contract clauses that PBMs 

impose on pharmacies and providing me the opportunity to share how these clauses have impacted 

the relationship between my patients and me. My name is Hugh Chancy, and I have been a 

community practice pharmacist since 1998 and currently am a pharmacist-owner of five community 

pharmacies located in southern Georgia. I am here on behalf of the National Community 

Pharmacists Association (NCPA) where I currently serve on NCPA's Board of Directors. NCPA 

represents America's community pharmacists, including the owners of more than 22,000 

independent community pharmacies. I am here today as a healthcare provider and small business 

owner to present my experience with restrictive contractual language (often referred to as gag 

clauses) that may result in patients being charged inflated prices for their medications. 

T H [ V 0 I C E 0 F T H [ C 0 M M U N IT Y PH A R M A C I S T® 

100J)aingert1cldRoad 

Alexandria.VA22314·2888 

(703)683-8200 PHON£ 

(703)683-3619 FAX 
14 


36069.002

Page 2 

My first experience with so called gag clauses occurred in 2015 when one of my pharmacies 

in a rural city in southern Georgia served several patients on the city's employer-sponsored 

insurance, including the city's mayor. The city had just changed insurance providers and many of 

my patients experienced a rise in their prescription co-payments. Specifically, the mayor's copayment for one medication went from roughly $7 to $26. When I noticed this difference, I informed 

the mayor that it would be cheaper if he paid for his prescription off his insurance. The mayor was 

fortunate to have the political wherewithal to contact the right people in charge of the city's 

insurance plan to complain about the change changes and the oddity that paying for the prescription 

off insurance was a better deal. It goes without saying that other patients do not have similar 

avenues to voice their concerns about their prescription drug coverage. 

What happened next has become a common story. After the mayor contacted the plan, the 

plan consulted with their PBM who then issued a verbal warning to my pharmacy for talking to 

patients about their drug costs. The PBM stated we were in violation of our contract for disparaging 

the plan when we discussed the cost of a drug off insurance. We were told that if our pharmacy 

were to do so again, there would be consequences, including exclusion from PBM networks. 

The common denominator in all community pharmacies' experiences with gag clauses is a 

strained relationship with the PBMs. When a patient comes to the pharmacy and presents 

insurance, the pharmacy is bound by the terms of that patient's insurance and the PBM's rules. Put 

simply, pharmacists do not play a role in determining a patient's financial responsibility for 
15 


36069.003

Page 3 

prescription medications that they access through any prescription drug coverage. If a patient does 

not present insurance or if a patient inquires directly, however, pharmacies can tell the patient 

alternative means to purchase a drug. When a PBM is involved, however, communication with the 

patient becomes murky because pharmacies are contractually required to charge the patient what 

the PBM says when the prescription is processed. 

I am often asked what gag clauses look like in contracts but the answer to that question is 

not as simple as it may seem. The expression "gag clauses" is a misnomer because what is most 

often being referred to are multiple contract provisions or requirements embedded in lengthy PBM 

provider manuals that include overly broad confidentiality requirements and non-disparagement 

clauses, as well as requirements that pharmacies charge insured patients what the PBM says at 

point of sale. Some PBMs have even included provisions that can be interpreted as prohibiting 

communication with news media, policy makers, and elected officials. The following is an example 

of one such provision: 

Contacting Sponsors or Media. Provider hereby agrees (and shall cause its 

affiliates, employees, independent contractors, shareholders, members, officers, 

directors and agents to agree) that it shall not engage in any conduct or 

communications, including, but not limited to, contacting any media or any 

Sponsor and/or Sponsor's Members or other party without the prior consent of 

[PBM]. Further, Provider acknowledges and agrees that any breach of this Section 

by Provider (or any affiliate, employee, independent contractor, shareholder, 

member, officer, director or agent) would cause {PBM] immediate and irreparable 

injury or loss that cannot be fully remedied by monetary damages. Accordingly, in 

the event of a breach of this Section by Provider (or any affiliate, employee, 

independent contractor, shareholder, member, officer, director or agent), {PBM] 

shall be entitled to specific performance, including immediate issuance of a 
16 


36069.004

Page 4 

temporary restraining order or preliminary injunction enforcing the terms of this 

Agreement, and to judgment far damages (including reasonable attorneys' fees 

and costs) caused by the breach, and to all other /ego/ and equitable remedies 

available to {PBM]. 

Ultimately, these provisions have the effect of chilling a range of pharmacist 

communications with patients for fear of retaliation by the PBM. For this reason, the gag clause 

issue goes well beyond drug pricing disclosures. Further, community pharmacies like mine have very 

little negotiating power to strip these provisions out of our contracts. 

As a solution to this problem, community pharmacies need a place to point to in the law that 

will allow for the free flow of information between them and their patients. NCPA strongly supports 

the Discussion Draftthat is the focus of this hearing. The Draft is legislation to prohibit "gag clauses" 

in Medicare and private insurance by banning health plans from restricting a pharmacy's ability to 

inform a customer about the lower cost, out-of-pocket price for their prescription. 

Just this summer, I was pleased to hear that the Center for Medicare and Medicaid Services 

(CMS) sent letters to plan sponsors in Medicare explaining that any form of gag clauses in contracts 

is unacceptable. In addition, twenty-five states have passed legislation prohibiting gag clauses. 

These actions give pharmacists the ability to point to laws and rules that prevent PBMs from 

restricting the free flow of information. 

Conclusion 

In conclusion, as Congress demands increased transparency into the prescription drug 

marketplace, this Committee can provide a much-needed stake in the ground to allow pharmacists 
17 


36069.005

Page 5 

to freely discuss drug costs with their patients. Providing for the free flow of this kind of information 

is a step in the right direction to meaningfully address drug costs for Americans. Thank you. 
18 

Mr. BURGESS. Thank you, Mr. Chancy. Thanks for sharing your 

testimony with us. 

Mr. Cunningham, you are recognized for 5 minutes to summarize 

your opening statement, please. 

STATEMENT OF CURTIS CUNNINGHAM 

Mr. CUNNINGHAM. Thank you. Chairman Burgess, Ranking 

Member Green, and members of the subcommittee, thank you for 

the opportunity to discuss Money Follows the Person Program. 

In addition to serving as Assistant Administrator for Long-Term 

Care Benefits and Programs in Wisconsin, I am also the Vice President of the National Association of States United for Aging and 

Disabilities, known as NASUAD, which is a nonpartisan association that represents administrators of aging, disability, and longterm supports and services in all 50 States, District of Columbia, 

and territories. 

I am also designated as the Wisconsin disability director and 

serve on the National Policy Work Group for the National Association of State Directors of Developmental Disability Services. 

I am honored to be here today to represent NASUAD and speak 

about Money Follows the Person and its impact on individuals that 

require long-term supports and services. 

The MFP program, as it is frequently called, was first created by 

the Deficit Reduction Act of 2005 as a way to provide States with 

increased resources and flexibilities that assist in the transition of 

individuals from institutional long-term care settings to home and 

community-based services. 

The creation of MFP gave States crucial tools to increase choices 

or options for individuals who receive long-term services and supports in accordance with the landmark Olmstead decision that 

mandates that States ensure that participants receive services in 

the most integrated setting based on their needs and their preferences. States began operating MFP in 2007, and between 2007 

and 2017, 43 States transitioned over 75,000 individuals into the 

community. 

MFP also results in significant cost savings. According to the national MFP evaluation, the average annual person’s spending during the first year following the transition into the community declined by over $20,000 for older adults and people with disabilities 

and by over $48,000 for individuals with intellectual and developmental disabilities. All told, this has resulted in $1 billion in savings during the first year of transition alone for these individuals. 

The evaluation also estimated that 17 States evaluated, roughly 

one-quarter of the older adults and one-half of the individuals with 

intellectual and developmental disabilities would not have 

transitioned without the support of MFP. 

One of the reasons MFP provides an opportunity for deinstitutionalization for individuals who would not otherwise move into the 

community is due to the flexible services that this program provides. 

MFP allows for supplemental services that are not covered 

through the standard Medicaid long-term services and supports, 

and provides opportunities for innovation to address some of the 

common barriers to community transitions. Some examples include, 

19 

in Wisconsin, we funded community living specialists who review 

nursing home diagnostic data to identify people who indicate they 

would like to move into the community, and these community specialists assist them in that movement. 

Nearly every State has identified lack of accessible affordable 

housing as a significant challenge that can prevent community 

placements. In Tennessee, MFP funded a housing counseling and 

a pilot program to support bridge subsidies for individuals leaving 

institutions. Many States also use MFP funding to support programs that help beneficiaries gain and maintain employment, provide behavioral supports, provide outreach consultation with nursing facilities, and then also provide grants to Tribal entities to develop their own community relocation initiatives. 

Critically, in Wisconsin, many other States use MFP funds to address waiting lists through diversion initiatives and expand available slots for their community-based waivers. States also use MFP 

to support Aging and Disability Resource Centers, which provide 

comprehensive information and referral services to keep people in 

the community. Finally, MFP also serves several States in their 

person-centered thinking and organizational thinking. 

Finally, it is important to remember that, behind each of these 

statistics, there are real people. I would like to share one of those 

stories. In Delaware, MFP changed the life of a young mother of 

three who was a victim of a violent crime. She found herself in a 

nursing home due to her injuries, which left her paralyzed from the 

waist down. Prior to the crime, she was working, supporting her 

family; and while in the facility, she had no income. Being in the 

nursing facility was difficult for her and her children. While they 

could visit her in the facility, she was not at home to be part of 

their daily lives or put them to bed at night. 

MFP was able to transition her home with her children and her 

mother as their caretaker after spending 8 months in the facility 

away from her children. After the transition, she continued to improve the quality of life. She is learning how to drive an adapted 

vehicle. Her intention is now to attend vocational rehab so that she 

can return to work to support herself and her children. 

As you can see, these unique programs provide benefits to a wide 

range of people. Not only is it valuable to States. It is fiscally responsible and results in savings for the Federal Medicaid program. 

Lastly and most importantly, it improves the lives for the individuals we serve. 

Although significant progress and success has been made in rebalancing HCBS, there is still a lot of work that can be done. Almost 60 percent of all Medicaid expenditures for long-term services 

and supports are delivered to older adults and people with physical 

disabilities or for institutional care. 

On behalf of NASUAD, I therefore encourage Congress to continue this important program. Our members across the country 

have seen great value in the program, and the interventions have 

become more effective as the States experimented with and learned 

from innovative ways to provide these supports. 

We encourage Congress to continue to work with NASUAD, our 

membership, and the broader aging and disability community to 

demonstrate the financial and human benefits of a program in 

20 

order to secure the extension of MFP. Thank you for the opportunity to comment, and I would be happy to answer any questions 

you may have. 

[The prepared statement of Mr. Cunningham follows:] 

21 


36069.006

STATEMENT OF: 

Curtis Cunningham 

Assistant Administrator for Long Term Care Benefits and Programs 

Division of Medicaid Services 

Wisconsin Department of Health Services 

Vice President 

National Association of States United for Aging and Disabilities 

REGARDING: 

The Money Follows the Person Program and the EMPOWER Care Act 

Subcommittee on Health 

Energy and Commerce Committee 

United States House of Representatives 

September 5, 2018 
22 


36069.007

Chairman Burgess, Ranking Member Green, and members of the subcommittee, thank you for 

the opportunity to discuss the Money Follows the Person Program. In addition to serving as the 

Assistant Administrator of Long Term Care Benefits and Programs in the Wisconsin Division of Medicaid 

Services, I am also the Vice President of the National Association of States United for Aging and 

Disabilities, known as NASUAD, which is a nonpartisan association that represents administrators of 

aging, disability, and long-term services and supports programs in all 50 states, the District of Columbia, 

and the territories. I am also designated as the Wisconsin Disability Director and serve on the national 

policy workgroup of the National Association of State Directors of Developmental Disabilities Services. I 

am honored to be here today to represent NASUAD and to speak about the Money Follows the Person 

program and its impact on individuals who require long-term services and supports. 

The MFP program, as it is frequently called, was first created by the Deficit Reduction Act of 

2005 as a way to provide states with increased resources and flexibilities that assist with the transition 

of individuals from institutional long-term care settings to home and community-based services. The 

creation of MFP gave states crucial tools to increase choices and options for individuals who receive 

long-term services and supports in accordance with the landmark Olmstead decision that mandates 

states to ensure that participants receive services in the most integrated setting based on their needs 

and preferences. 1 States began operating MFP in 2007, and between 2007 and 2017 forty-three states 

transitioned over 75,000 individuals into the community. 2 MFP was a crucial part of state progress in 

deinstitutionalization, which led to Medicaid programs spending a greater proportion of expenditures 

on home and community-based services than in institutional settings for the first time in Federal Fiscal 

Year 2013. 3 I have seen this type of success firsthand in Wisconsin. In our agency, we use a scorecard 

to track our progress at improving key measures around deinstitutionalization, participant choice, and 

quality of life. Among other measures, we have specifically seen great progress in reducing the 

percentage of individuals on waiting lists as well as increasing the balance of expenditures in the 

community and we believe that an extension of MFP will help us continue these efforts. 

MFP also results in significant cost savings. According to the national MFP evaluation, average 

annual per person spending during the first year following transition declined by over $20,000 for older 

adults and people with disabilities, and by over $48,000 for individuals with intellectual/developmental 

disabilities. All told, this resulted in over $1 billion in savings during the first year of transitions alone for 

1 Olmstead v. L. c., 527 U.S. 581 (1999) 2 https:l/wwvy_,medicaid.gov/medicaid/ltss/money-follows-the-person/index.html 

3 https://www.medicaid.gov/medicaid/ltss/downloads/ltss-expenditures-fy2013.pdf 
23 


36069.008

these individuals.• The evaluation also estimated that, within 17 states evaluated, roughly one quarter 

of older adults and one half of individuals with Intellectual and/or Developmental Disabilities would not 

have transitioned without support from MFP. This substantiates that MFP is not just good for 

participants, but it is also fiscally a prudent grant program that results in hundreds of millions of dollars 

in savings during the first year after participants' transitions, and substantial additional savings during 

subsequent years. 

One of the reasons that MFP provides an opportunity for deinstitutionalization of individuals 

who would not otherwise move into the community is due to the flexible services that the program 

allows. MFP allows for supplemental services that are not covered through standard Medicaid longterm services and supports. This provides an opportunity for innovation to address some of the 

common barriers to community transitions. One example of how Wisconsin uses MFP funding is to fund 

community living specialist. These individuals review nursing diagnostic information to see which 

individuals currently residing in nursing homes indicate that they want to go home or move into a 

community placement. These specialists utilize a wide range of supports to assist individuals identify a 

residence, as well as link these participants with extensive supports that help them remain in their 

home. 

Nearly every MFP state identified a lack of accessible, affordable housing as a significant 

challenge that could prevent a community placement. Tennessee addressed this issue through a 

multifaceted approach, including housing counseling, and a pilot program to support bridge subsidies 

for individuals as they leave the institution. 5 States also used MFP funding to support programs that 

help beneficiaries gain and maintain employment; provide behavioral support expertise; provide 

outreach and consultation with nursing facilities; and provide grants to tribal entities wanting to pursue 

their own MFP initiatives. And critically, in Wisconsin and many other states, we also used MFP funds to 

address waiting lists through diversion initiatives and expansion of available slots in some of our 

community-based waivers. 

States also used Money Follows the Person funding to support Aging and Disability Resource 

Centers, which provide comprehensive information, referral, and options counseling services to help 

individuals access the most appropriate long-term services and supports based on their needs and 

4 https:/!www.medicaid.gov/medicaid/ltss/downloads/money-follows-the-person/mfp-rtc.pdf 

5 https://www.kff.org/medicaid/issue-brief/tennessees-money-follows-the-person-demonstration-supportingrebalancing-in-a-managed-long-term-services-and-supports-model/ 
24 


36069.009

preferences. In Virginia, they were able to use MFP dollars to move from a 16/7 information and 

referral system to a 24/7. And MFP also supported several states efforts to improve their personcentered thinking, organizational training, and technical assistance. 

It is also important to remember that behind each of these statistics are real peopleindividuals and families whose lives have been changed for the better due to the MFP program. 1 would 

like to take a moment to share a few stories from around the country of people who have been helped 

by MFP. 

In 2009, a woman from Tennessee named Mrs. Carol found that her health had taken a serious 

and critical decline. She weighed S47 lbs. and her body was failing her. She had cardiac issues, diabetes, 

depression, and renal failure. The doctor in the hospital told her there was nothing else they could do 

for her and sent her to a nursing facility as she needed 24/7 care. She felt that she had no voice and no 

worth. She required 2-3 person assistance to be moved and was dependent on others for everything; 

she could not even roll over without extensive assistance. 

Things began to improve in 2010, shortly after Tennessee engaged with health plans to 

implement managed long-term services and supports. Through a combination of health plan 

interventions and MFP, Carol was encouraged for several years to transition out ofthe nursing facility. 

And although she was very depressed the programs encouraged her and assisted her with obtaining 

services necessary to lose weight and gain strength both physically and emotionally. The Money Follows 

the Person program utilized a person-centered approach to allow her to take control of her life and 

future. She was listened to and provided with important education. She made the decisions for her life 

and the rate of speed in which they occurred. She successfully transitioned out of the nursing facility in 

August of 2016 and is now back home with her husband and son. 

Tennessee and her health plan listened to her and she gradually reduced her services as she 

gained independence. She was now in charge of everything in her life, and the services were only there 

to support her. She worked with her health plan to initiate consumer directed services and eventually 

changed her services as her support needs decreased. In Mrs. Carols' words she "graduated" and 

voluntarily disenrolled from Tennessee's CHOICES program in April of 2018. She now spends time as an 

elder advocate, volunteer with Hospice and enjoying other hobbies. 

Robert Bond was sent to a Virginia nursing home in 2010 at the age of 25 years old. Mr. Bond 

had been diagnosed with Autoimmune Necrotizing Myopathy. He was aspirating for over a year and 
25 


36069.010

then had pneumonia which placed him in the hospital. His parents were not sure that he was going to 

make it and did not have the resources to care for him at home. At discharge, he was moved to Sentara 

Nursing Facility. Mr. Bond had been attending Liberty University in Lynchburg, Virginia prior to his 

illness which had now placed him in a wheelchair permanently. As a quadriplegic, he had complex 

medical needs. 

Youthful, Mr. Bond did not want his illness to slow him down. He wanted his own apartment 

and realized that he would need one that was handicap accessible. His illness gave him a new 

appreciation for life. Later, he met Sharon Franklin from the Independence Center who told him that 

that there was a resource for transitioning that would supply the supports that he needed. Mr. Bond 

had heard so many stories previously and was unsure if this could be true. The provider gave Mr. Bond a 

chance to think about the option and returned a month later. Mr. Bond decided to take a chance and 

proceeded forward by enrolling in the Money Follows the Person Program. A month later, Mr. Bond 

moved into his father's house and then later was able to be moved into his own apartment. Services 

provided included a water dispenser and a portable cooktop stove because he didn't have great reach. 

These items were most important to him. They provided a sense of independence when the attendant 

was not around. Mr. Bond also received new clothing and later, the program allowed for an electric 

door opener and a sky bell to be installed. 

Since the transition or second chance at life, Mr. Bond is now employed in an eye clinic in the 

tidewater area, assists others transitioning from the nursing facility, and has also provided inspiration 

and motivational counseling to others with severe disabilities. His long-term goal is to have a second 

chance at driving. 

In Delaware, MFP helped change the life of a young mother of three who was the victim of a 

violent crime. She found herself in a nursing home due to the injuries which left her paralyzed from the 

waist down. Prior to the crime she was working and supporting her family, while in the facility she had 

no income. Being in the nursing facility was difficult on her and her children. While they could visit her 

at the facility, she was not at home to be a part of their daily lives or to put them to bed at night. MFP 

was able to transition her to a home with her children and her mother, as a caretaker, after having spent 

eight months in a facility, away from her children. After her transition, she has continued to improve 

her quality of life and she is learning how to drive an adaptive vehicle. Her intention now is to attend 

Vocational Rehabilitation so that she can return to work to support herself and her children. 
26 


36069.011

As you can see, this is a unique program that provides benefits to a wide range of people. Not 

only is it valuable to the states, it is fiscally responsible and results in savings to the federal Medicaid 

program. Lastly, and most importantly, it improves the quality of lives for the individuals we serve. 

Although significant progress and success has been made regarding rebalancing to HCBS, there 

is still much work to be done. Almost 60 percent of all Medicaid expenditures for long-term services and 

supports delivered to older adults and people with physical disabilities are for institutional care. 6 The 

recently-released MFP evaluation found that 71 percent of the individuals transitioned through the 

program were older adults or people with physical disabilities. 7 The evaluation also indicated that the 

aggregate number of transitions is growing. 

On behalf of NASUAD, I therefore encourage Congress to continue this important program. Our 

members across the country have seen great value from the program, and the interventions have 

become more effective as states have experimented with and learned from innovative ways to provide 

these supports. We encourage Congress to continue to work with NASUAD, our membership, and the 

broader aging and disability community to demonstrate the financial and human benefits of the 

program in order to secure an extension of the MFP program. 

Thank you for the opportunity to comment, and I would be happy to answer any questions you 

may have. 

'https://www.medicaid.gov/medicaid/ltss/downloads/reports-and-evaluations/ltssexpendituresffv2015final.pdf 

7 https://www.medicaid.gov/medicaid/ltss/downloads/money-follows-the-person/mfp-rtc.pdf 
27 

Mr. BURGESS. Thank you, Mr. Cunningham. 

The chair now recognizes Mr. Matt Salo for 5 minutes to summarize your opening statement, please. 

STATEMENT OF MATT SALO 

Mr. SALO. Thank you so much, Chairman Burgess, Ranking 

Member Green, members of the subcommittee. My name is Matt 

Salo, and I represent the National Association of Medicaid Directors. These are the folks in each of the 56 States and U.S. territories who run the Medicaid program. 

I want to briefly just frame Medicaid and what my members do 

before touching briefly on three of the bills that you are currently 

considering. I think it is important to recognize just how big, complex, and important Medicaid is. Medicaid covers more than 70 million Americans. We spent more than $550 billion last year, and it 

is roughly 30 percent of the average State budget and 3 percent of 

the Nation’s GDP. 

Medicaid is the backbone of the U.S. healthcare system, and in 

many ways and for many of the populations that we are talking 

about today, it is the backbone of America. And I think that it is 

important, despite the complexity of all the things we are talking 

about—we are talking about some very, very different components 

of Medicaid today—it is important to keep in mind the importance 

and the breadth of the things that we try to achieve. And arguably, 

I think Medicaid is clearly the largest and most important 

healthcare program, not only in this country but arguably in the 

world. 

One way that I think it is important to also frame it is, similar 

to the parable of the six blind men trying to describe an elephant 

and sort of only looking at what they can see and touch, if you look 

at any of the pieces today, you might think, oh, well, Medicaid’s a 

program for medically complex kids or Medicaid’s a program for 

frail seniors or adults with disabilities. It is all of those things and 

many, many more. 

My members, the State Medicaid directors, their job, no matter 

what State they are in, is to try to improve the healthcare system 

to deliver a better healthcare experience to the people that we 

serve while being responsible stewards of both State and Federal 

taxpayer dollars, and to do so in ways that are meaningful and relevant in the State and in the cultural community that they reside. 

My members are driving significant complicated healthcare reforms to the delivery system of Medicaid and the broader U.S. 

healthcare system. We are driving sustainable payment reforms to 

try to bring Medicaid from a fee-for-service system into a valuebased system. This is complicated. This is multisector. This is 

multiyear. This is difficult work, but it is critically important. 

Three of the bills I want to touch on real briefly. We have talked 

a lot about the ACE Kids Act. This has been a very complex, a very 

fluid piece of legislation. As Chairman Barton has referenced, it 

has been around for at least 6 years now. I would hope that the 

message that we give is that if we want something like this to be 

successful, look to the example of CHIP. 

CHIP was a program created in 1997 that sought to improve coverage and care for kids in this country. And the way that it evolved 

28 

and the way that it was created and the way that it ultimately has 

become one of the most bipartisan and most successful programs 

that this committee has worked on is that it embraced two concepts, one of which is that if we want States to make significant 

progress in areas like this, it has got to embody two principles: one, 

enhanced Federal support; and, two, increased State flexibility. Because no matter what we are looking at, the ways that States, from 

New York to Texas to California and everything in between, their 

healthcare cultures, their healthcare systems are different, and it 

has to be cognizant and respectful of those differences as we are 

trying to provide the best possible healthcare, not to just to those 

kids but to everybody else that we serve. So, if we want this to be 

successful, we have to ensure that it is flexible, ensure that there 

is strong sustained Federal support, and I believe that we can get 

there. 

Second, very, very briefly, Money Follows the Person. I can be 

very brief on this, because there is no question that this works. 

There is no question this is highly successful. There is no question 

this is incredibly important to continue not just for the short-term 

but for the long-term. I think we should be talking about how long 

can we reauthorize this for. Can we make this permanent? And 

that is one of the things that we always talk about is, if we find 

something that works, let’s make it permanent. And I think clearly 

this works, and clearly this is an important part of our conversation. 

The final piece on the Medicaid Fraud Control Units. Very important conversation, especially in light of increased movement 

from institutional to noninstitutional. But I would urge you also to 

think more broadly about how we are approaching program integrity. Program integrity is not just fraud or abuse or safety. It is 

those things, but it is more. 

The Fraud Control Units exist within the Attorney General’s Office, not within Medicaid. We have to make sure that if we are 

going to invest in targeted areas like this, which we should, we 

have to make sure that we are coordinating the efforts across the 

system. And I have got a couple of other ideas, in terms of things 

that we could do to improve this. 

And then, just finally, I will say I would be happy to also talk 

about some of the other possible reforms in Medicaid that my members would love to see to help them in their efforts to improve the 

Medicaid program for taxpayers, for beneficiaries, for providers, 

and for all of us. So I would be happy to answer questions at the 

end, and thank you for having me. 

[The prepared statement of Mr. Salo follows:] 

29 


36069.012

NAMD 

National Association of 

Medicaid Directors 

Testimony of 

MattSalo 

Executive Director 

National Association of Medicaid Directors 

Before the 

United States House of Representatives Committee on Energy and 

Commerce; Subcommittee on Health 

"Opportunities to Improve Health Care" 

September 5, 2018 
30 


36069.013

Chairman Burgess, Ranking Member Green, and members of the Subcommittee, thank you for 

the opportunity to testify today on legislative proposals to enhance the oversight of the Medicaid 

program and tools for states to improve health outcomes for key covered populations. 

AboutNAMD 

My name is Matt Salo, and I am the Executive Director of the National Association of Medicaid 

Directors (NAMD). NAMD is a bipartisan, nonprofit, professional organization representing 

leaders of state Medicaid agencies across the country. Our members drive major innovations in 

health care while overseeing Medicaid, the nation's largest health insurer which provides unique 

benefits and supports to its beneficiaries. NAMD serves as the voice for state Medicaid Directors 

in national policy discussions, supports state-driven policies and practices that strengthen the 

efficiency and effectiveness of Medicaid and actively monitors emerging issues in Medicaid and 

health care policy. NAMD also supports the leadership development of Medicaid Directors and 

their senior staff as they manage both the strategic orientation and day-to-day operations of the 

nation's largest health insurer. 

Medicaid, together with the Children's Health Insurance Program (CHIP), provides health 

coverage for more than 71 million Americans; approximately one in five Americans are covered 

by these programs. Medicaid is jointly funded by the federal government and the states, which 

together spent $553 billion in FY 2016, and is administered by states under broad federal 

standards. 

The Medicaid population is diverse, including eligible children, pregnant women, low-income 

families, elderly adults, people with chronic conditions and people with physical, developmental 

or behavioral needs. Medicaid funds close to 50 percent of all births and is the primary payer of 

long-term care in this country. Medicaid also provides most of the nation's funding for 

HIV/ AIDS-related treatments and mental health services, among other forms of health care. More 

than 40 percent of Medicaid spending is aimed at addressing the shortfalls of the Medicare 

program for individuals dually eligible for both. Medicaid is also one of the nation's largest 

payers of behavioral health and substance use disorder services, making it a key tool in the 

toolbox for tackling the ongoing opioid crisis. 

Page 1 of 7 
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36069.014

The unique characteristics of Medicaid, with its joint federal and state funding structure and 

significant latitude for states to customize their programs to best serve the needs of their local 

populations, are vital to its success. As the Subcommittee considers statutory modifications to 

Medicaid, the core characteristics of flexibility for states to most appropriately administer their 

programs and federal investment in Medicaid's tools will ensure the program continues to 

provide high quality care to Medicaid beneficiaries and be a responsible steward of state and 

federal taxpayer dollars. 

ACE Kids and the Role of Medicaid in Covering Medically Complex Children 

As previously noted, Medicaid and the Children's Health Insurance Program (CHIP) are core 

sources of coverage for the nation's children. This includes children with complex medical 

conditions who require specialized benefit designs and services, such as children with serious 

behavioral health needs, rare pediatric diseases, or those in the foster care system. 

Many states have prioritized developing initiatives that take advantage of delivery system 

characteristics and existing provider infrastructure to improve care for this complex and 

vulnerable population. These initiatives can be innovative and cross-cutting, tackling both 

medical services and the broader context of a child's life to improve outcomes. For example, 

Florida's Medicaid managed care program uses a specialized plan focused on providing services 

to children in foster care, and New York is piloting a unique approach under which pediatricians 

in a specific area are held accountable for a child's readiness to enter the school system. Efforts 

like these are underway across the country, demonstrating Medicaid Directors' commitment to 

continuing to enhance care for children. 

It is important to note that when we speak about the medically complex child population, we are 

discussing a population that is not monolithic. Their needs are diverse, as any number of 

conditions can be categorized as medically complex. For this reason, states will continue to need 

flexibility from our federal partners to design and implement solutions that reflect the unique 

needs of the children covered in the state. A program design that succeeds in urban areas in 

Minnesota may not be transferable to frontier counties in New Mexico. That said, Medicaid 

Directors are always eager to learn from one another to address common challenges. Identifying 

Page 2 of 7 
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36069.015

effective models, the factors driving the model's success, and sharing that information widely 

across the states can raise the bar nationwide. NAMD works to foster this dialogue among our 

members, and our federal partners at the Centers for Medicare and Medicaid Services (CMS) do 

so as well. 

What Medicaid Directors would prefer to avoid is being required to adopt a specific model or 

benefit design for the entirety of the medically complex child population. For the reasons noted 

above, a one-size-fits-all approach to this population is less likely to achieve the shared aims of 

improved health outcomes than an approach which emphasizes the need for flexibility and 

creativity and accounts for the facts on the ground. 

Basing new federal options for states in this area on existing models with which states are already 

familiar, such as health homes, is a promising approach. Many states are already using the health 

home model to target specific and complex subpopulations, such as individuals living with 

multiple chronic conditions, individuals with HIV/AIDS, and individuals with serious mental 

illness. Expanding the health home option to incorporate medically complex children, providing 

strong federal investment in the model, and maintaining the flexibilities the model offers for 

states to customize a health home for a specific population of complex children would likely 

garner state interest and promote improved health outcomes. 

As a final point, consider the creation of CHIP and the success of that program as illustrative of 

the most effective approach to enhance children's coverage. Prior to CHIP's creation in 1997, 

states had the option to expand their Medicaid programs to cover what would become the CHIPeligible population. Some states chose to do so, though not all did. CHIP positively changed this 

environment by adopting two key policies: first, giving states new tools to create benefit designs 

and coverage not available under Medicaid; and second, providing strong federal investment via 

a higher matching rate for CHIP. This combination of flexibility for states and meaningful federal 

financial support produced a successful program which helped significantly reduce the 

uninsured rate among children and enjoys strong bipartisan support to this day. Applying these 

principles of flexibility and investment to a new option for medically complex children will 

produce similar success. 

Page 3 of 7 
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36069.016

Money Follows the Person: A Valuable Tool Supporting Rebalancing Long-Term Care 

Towards the Communil;y 

Medicaid is the nation's primary insurer of long-term services and supports (LTSS). The 

populations receiving these services may have physical, intellectual, or developmental 

disabilities that require specialized supports or even around-the-dock care. Others may simply 

be individuals who, as they grow older, need help with their daily activities. Many of those 

receiving Medicaid LTSS are dually eligible for Medicare, receiving services from both programs. 

Although people who receive Medicaid-funded LTSS represent a small proportion of the total 

membership, they typically have complex needs and represent almost half of Medicaid spending. 

As the Subcommittee knows, by statute Medicaid provides mandatory coverage of L TSS in 

institutional settings, such as nursing homes. Medicaid can also provide coverage for in homeand community-based services (HCBS), though this is at states' option and states must seek a 

waiver from CMS to do so. This is often referred to as the "institutional bias" in the Medicaid 

statute. All states have elected to use one or more waivers, which allow individuals to receive 

their supports at home and/or in a community setting of their choice. 

A key objective of both states and CMS for the past several years has been to rebalance the 

provision of Medicaid LTSS from institutional settings towards the community. Rebalancing 

refers to reducing reliance on institutional care and expanding access to community-based LTSS. 

A rebalanced L TSS system gives Medicaid members greater choice in where they live and from 

whom they receive services. It also delivers LTSS that are integrated, effective, efficient, and 

person-centered. Finally, increasing the proportion of LTSS spend in the community has enabled 

states and the federal government to achieve significant cost savings. 

This work is challenging, resource-intensive, and requires sustained effort. Fortunately, states 

have received valuable support for their rebalancing efforts in the form of the Money Follows the 

Person (MFP) Demonstration grant program. First passed in 2005, MFP has provided states with 

significant financial resources to develop the infrastructure necessary to support individuals' 

transitions from institutions back into the community. States have leveraged MFP dollars 

creatively, drawing on these funds to educate consumers about L TSS, support development of 

Page 4 of 7 
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36069.017

the HCBS workforce, expand the reach of existing HCBS programs, test new service options such 

as substance use disorder interventions, and provided a valuable source of longitudinal data 

spanning over a decade on the barriers to rebalancing and the solutions needed to address them. 

In rural states where institutions may be particularly isolating, MFP dollars have helped return 

individuals to their local communities. Thanks in part to MFP, for the first time in FY 2013, more 

than 50 percent of Medicaid LTSS spending took place in HCBS settings, and the trend appears 

to be continuing. 

Unfortunately, the success of MFP is currently in jeopardy. The program sunset in 2016, though 

grant dollars are available to states through FY 2018 and may be spent into FY 2019. That means 

states are currently tasked with winding down MFP-supported programs, in case a 

reauthorization does not occur. States are actively working with CMS to identify which elements 

of MFP programs can continue to be supported via other authorities, but it is clear that without 

reauthorization and associated funding many MFP-funded programs will need to be ended. This 

would negatively impact the ongoing rebalancing work states are undertaking and has the 

potential to greatly increase Medicaid L TSS spending. The process of planning for program winddown, even if such measures prove to be unnecessary, strains limited state resources and creates 

uncertainty for providers and beneficiaries. 

In order to avoid these problems, Medicaid Directors strongly support a prompt reauthorization 

of MFP. This reauthorization should occur quickly enough to provide states with continuity for 

existing programs. We are pleased to see the Subcommittee considering reauthorization, and we 

support the policy modifications in the current legislative package -especially the alteration of 

the institutional stay requirement for MFP dollars from 90 days to 60 days. Shortening the 

required stay in an institutional setting would better support individuals who enter facilities for 

rehabilitation, and unfortunately tend to become long-term residents, absent supports to enable 

them to move back to the community. 

Enhancing Investment in State Program Integrity Efforts 

Medicaid Directors understand the critical importance of safeguarding the integrity of the 

Medicaid program, and take seriously their obligation to ensure scarce state and federal resources 

Page 5 of7 
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36069.018

are being well utilized and beneficiaries are safely and appropriately cared for. States are strongly 

committed to identifying and eliminating waste, fraud, abuse, inefficiencies, and neglect in their 

programs. Federal tools and resources for states to conduct program integrity activities are 

greatly appreciated. 

Medicaid agencies are not alone in the effort to improve Medicaid program integrity. There are 

many entities with responsibilities and authority in this area, including federal auditors within 

CMS, the Health and Human Services Office of the Inspector General, and the Government 

Accountability Office. There are also separate entities at the state level, such as Medicaid Fraud 

Control Units (MFCUs). 

The Subcommittee is considering legislation to provide federal funding for MFCU investigations 

in non-residential settings. As we noted in the discussion on MFP, states are looking to increase 

the amount of LTSS provided in these settings, and agree that ensuring these settings are safe is 

a critical aspect in continuing this work. However, as MFCUs are separate from the Medicaid 

agency and primarily oriented towards law enforcement, it is important to recognize the need for 

coordination among the Medicaid agency, law enforcement, and other entities playing roles in 

this area. Careful consideration must be given to minimizing duplication across program 

integrity authorities and activities. 

We wish to call the Subcommittee's attention to other statutory changes, beyond the MFCU 

funding change considered here, which can make Medicaid program integrity activities more 

robust and effective. 

First, the federal investment in state Medicaid program integrity work can be enhanced. 

Currently, state program integrity activities are counted as administrative spending for purposes 

of federal match. The administrative match is 50 percent, the lowest level of federal match 

available. We encourage the Subcommittee to consider a higher match-such as 75 percent, which 

is what MFCUs receive- to maximize state resources invested in program integrity. Significant 

federal match for other key priorities, such as the 90 percent match for upgrading Medicaid data 

systems, has been highly successful. Similar consideration should be given for Medicaid program 

integrity. 

Page 6 of 7 
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36069.019

The second potential change concerns how Medicaid overpayments identified by states are 

handled. Under current Jaw, any time the state identifies an overpayment, it is obligated to return 

the federal share of that payment. The federal repayment must take place even if, for 

circumstances beyond the state's control, the state is unable to recoup the overpayment amount. 

While Congress has made changes to extend the window under which this repayment occurs, it 

must still occur regardless. This policy imposes a financial burden for states in circumstances 

where overpayments cannot be recouped, thereby creating a barrier to effective program integrity 

efforts. In essence, the policy punishes the state for conducting good program integrity practice 

in identifying overpayments. We encourage the Subcommittee to consider altering how identified 

overpayments are treated in instances where the states are unable to recoup the overpayments. 

Conclusion 

Thank you again for the opportunity to testify before the Subcommittee on these important topics. 

We look forward to continuing to work with you and providing the perspectives of Medicaid 

Directors on further improvements to the program and the individuals we serve. 

Page 7 of7 
37 

Mr. BURGESS. Thank you, Mr. Salo. Thanks. Just a historical 

note since two of you now have brought up the Deficit Reduction 

Act of 2005. It was late in December of 2005 when this committee 

passed the Deficit Reduction Act. Mr. Barton was chairman at the 

time. And now all these many years later to hear about an enduring part of that that actually did perform as indicated, it is gratifying. It was a big bill with a lot of moving parts, but I am grateful 

that that one did deliver. 

Mr. Merrill, we are grateful to have your presence on the subcommittee dais today. You are recognized for 5 minutes to summarize your opening statement. 

STATEMENT OF RICK MERRILL 

Mr. MERRILL. Thank you very much. I thank Congressman Barton, Chairman Barton, Chairman Burgess, and Ranking Member 

Green. You guys did such a great job describing ACE Kids and the 

importance of it and the benefits of it. I am not sure I could top 

that, but I will do my best to equal this today. 

Chairman Burgess, Ranking Member Green, and members of the 

subcommittee, I am Rick Merrill, the President and CEO of Cook 

Children’s Health Care System in Fort Worth, Texas, and I am 

Chair of the Children’s Hospital Association Board of Trustees. On 

behalf of my hospital system, our CHA member institutions and 

the patients and families we serve, thank you for the opportunity 

to speak in strong support of H.R. 3325, the Advancing Care for 

Exceptional Kids Act of 2017, or ACE Kids, as we refer to it. 

We are extremely grateful to Representatives Barton and Castor 

for their leadership on behalf of children, as the original cosponsors 

of this bipartisan legislation, and to the nearly 100 additional 

House Members who have joined them as cosponsors. We also wish 

to thank the leadership of the Energy and Commerce Committee 

and the Health Subcommittee for devoting considerable time and 

resources to working toward solutions in this important area. 

In addition, we want to recognize Chairman Burgess and Ranking Member Green for their longstanding leadership and support of 

the Children’s Health Insurance Program and the recent reauthorization of the Children’s Hospital Graduate Medical Education Program, which was passed by the Senate last evening. Thank you for 

that. 

Last year, Cook Children’s treated children from more than 35 

States, recorded nearly half a million child visits in our 60 pediatric specialty clinics, 240 visits in our Mercy Department and Urgent Care Center, and registered over 11,000 inpatient admissions. 

With over 1.5 million patient encounters a year, Cook Children’s 

provides comprehensive and coordinated care across our fully integrated system, including home health services and a health plan 

which enrolls over 100,000 Medicaid children, many of whom have 

serious disabilities. 

For many years now, we have taken care of some very sick kids, 

and I think we have done a good job in our part of Texas, but I 

am here today to tell you that we could and should do better. Medicaid covers over 37 million children. A small percentage of these 

kids have complex medical conditions requiring ongoing and specialized care. These children have diagnoses that are multiple and 

38 

varied, from cerebral palsy to cystic fibrosis to congenital heart disease and even childhood cancers. They typically are under the continuous care of multiple pediatric specialists and require access to 

specialized care and additional services, often from outside their 

home State. Additionally, their care accounts for a drastically disproportionate percentage of Medicaid spending on children. 

Behind each of these data points is a real child and family, families like the Beckwiths. Alex and Maddy Beckwith of Keller, Texas, 

are some of the most remarkable, kindest 14- and 4-year-olds that 

you could hope to meet, but they both also suffer from 

mitochondrial disease, along with other health issues. 

Mitochondrial disease is a serious condition without a cure. It requires lifelong medication and therapy. 

Due to their conditions, Alex and Maddy, their care is complex 

and ongoing. And so they actually have become like family members to the staff at Cook Children’s. They see 15 specialists between them and require major interventions to remain medically 

stable. The ACE Kids Act is about improving care for children like 

Alex and Maddy by expanding access to patient-centered pediatricfocused coordinated care tailored to their unique needs. The ACE 

Kids Act would modify Medicaid’s existing health home option to 

give States the ability to implement health home specifically targeting children with complex medical conditions. 

These new pediatric health homes would follow national guidelines in implementing a care plan for the medically complex child, 

coordinating care from providers, such as physicians, children’s 

hospitals, specialized hospitals, nonphysician professionals, and 

home health and behavioral health providers. These homes will 

help families manage the challenges associated with their child’s 

care while improving quality of care for the children enrolled. 

Participation will be completely voluntary for these children. 

Families, healthcare providers, and the pediatric health homes will 

work within the existing State’s Medicaid program, including those 

States with Medicaid managed care. The focus of ACE Kids is creating opportunities for providers, plans, and States to collaborate 

to provide the best quality of care for these children. 

The ACE Kids Act is also about using existing Medicaid resources more efficiently. A large and growing body of research 

shows that coordinating care for people with chronic conditions can, 

indeed, reduce spending. The potential cost savings the ACE Kids 

model could produce have been demonstrated through projects supported by the Center for Medicare and Medicaid Innovation. The 

CMMI Coordinating All Resources Effectively Award, that is the 

CARE Award, implemented care coordination programs serving 

8,000 children with medical complexity. Collectively, the 10 hospitals participating in the CARE Award, including Cook Children’s, 

reduced emergency department visits by 26 percent, reduced inpatient stays by 32 percent, and in just the full year of operation coordinating care for these children, care ultimately reduced overall 

Medicaid costs for these children 2.6 percent. Additionally, prior 

independent analysis of the ACE Kids Act conducted shows substantial potential long-term savings in the Medicaid program. 

The ACE Kids Act will create a data and quality framework to 

drive improvement in care and further reduce cost. The bill outVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
39 

lines a definition of children with medically complex conditions who 

will be eligible to participate in the program and includes standardized data reporting requirements related to their care. This information and sharing does not exist in Medicaid today. There is 

currently no national data available to inform our policies for children with medical complexity. 

Since its original introduction in the 113th Congress, the ACE 

Kids concept has continued to evolve, based on extensive stakeholder feedback. This bill reflects the results of this collaborative 

process and has received support from many organizations dedicated to children’s health. 

In closing, the ACE Kids Act will have an opportunity to help 

children and their families who face some of the most significant 

health challenges. On behalf of children’s hospitals nationwide and 

the thousands of children and families that we care for at Cook 

Children’s, we look forward to working with Congress to pass ACE 

Kids this year and advance solutions that improve care for all kids. 

Thank you. 

[The prepared statement of Mr. Merrill follows:] 

40 


36069.020

CHILDREN'S ............... HOSPITAL 

ASSOCIATION CookChildren's. 

Executive Summary 

Mr. Merrill is speaking in support of H.R. 3325, "The Advancing Care for Exceptional Kids Act (ACE Kids 

Act) of 2017" as President and CEO of Cook Children's Health Care System in Fort Worth, Texas and Chair of 

the Children's Hospital Association (CHA) Board of Trustees. 

• The goals of the 1\CE Kid Act are improving care for children with medical complexity in Medicaid, driving 

improvements in quality, and reducing program spending. 

• The ACE Kids Act will give states the option to implement health homes specifically serving children \v:ith 

complex medical conditions. 

• The pediatric health homes established under the ACE Kids Act will implement a specific care plan for the 

medically complex child, coordinating care from multiple highly specialized providers such as physicians, 

children's hospitals, specialized hospitals, non-physician professionals, home health and behavioral health- all 

with a goal of creating easier access to needed services. 

The bill creates incentives for states to establish these models by providing a higher Medicaid federal match for 

care coordination services provided by the new pediatric health homes. 

Participation will be completely voluntary for children, families and health care providers, and the pediatric 

health homes will work within the existing structure of a state's Medicaid program- including those states with 

1\ledicaid managed care. 

• A growing body of research shows that the coordination of care for people with chronic conditions can save 

money through reductions in inpatient hospital stays and emergency room visits, improved medication 

management, better compliance on preventive care, and a guarantc.e that care is provided as close to a child's 

home and community as possible. Potential cost savings from the ACE Kids Act have been demonstrated 

through projects supported by the Center for Medicare and Medicaid Innovation (ClviMI). 

The ACE Kids Act will also create a data and quality framework to drive improvement in quality of care and 

further reduce costs. There is currently no consistent national data available to inform our policies for children 

with medical complexity. 

Finally, the ACE Kids Act lays the groundwork for additional future advances in care by sharing best practices 

across state Medicaid programs. 
41 


36069.021

............... CHILDREN'S 

HOSPITAL CookChildren's. ASSOCIATION 

Statement for the Record 

Rick W. Merrill, Chair, Children's Hospital Association Board of Trustees 

and President and CEO, Cook Children's Health Care System 

In support of H.R. 3325, 

"The Advancing Care for 

Exceptional Kids Act (ACE Kids Act)" 

Submitted to the Subcommittee on Health, 

House Committee on Energy and Commerce 

September 5, 2018 
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Chairman Burgess, Ranking Member Green, and members of the Subcommittee, thank you for the opportunity to 

speak in support of H.R. 3325, "The Advancing Care for Exceptional Kids Act (ACE Kids Act)." I am Rick Merrill, 

president and CEO of Cook Children's Health Care System in Fort Worth, Texas and Chair of the Children's 

Hospital Association (CHA) Board of Trustees. 

Last year, Cook Children's treated children from more than 35 states, recorded nearly a half million child visits to 

our 60 pediatric specialty clinics, 230,000 visits to our Emergency Department and Urgent Care Centers, and 

registered over 11,200 inpatient admissions. WTith over 1.5 million patient encounters a year, Cook Children's 

provides comprehensive and coordinated care across ow: fully integrated system, including Home Health serv-ices 

and a Health Plan, which enrolls over 138,000 children who rely on tvfedicaid, many of whom have serious 

disabilities. 

CHA represents 220 hospitals nationwide dedicated to the health and well-being of our nation's children. These 

hospitals vary widely in size and specialty, but they all exist to put our children's health first. On behalf of my own 

hospital system, our CHA member institutions and the patients and families we serve, I wish to offer ow: strong 

support for H.R. 3325, the Advancing Care for Exceptional Kids (ACE K.ids) Act. 

We are extremely grateful to Reps. Barton and Castor for their leadership on behalf of children as the original cosponsors of this legislation, and to the more than 90 additional House members who have joined as co-sponsors. 

We also wish to thank the leadership of the Energy and Commerce Committee and the Health Subcommittee for 

devoting considerable time and resources to working towards solutions in this important area. In addition, we want 

to recognize the leadership of Chairman Burgess and Ranking l\tfembcr Green on important issues affecting 

CHILDREN'S 

HOSPITAL 

ASSOCIATION 

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children's health, including extending funding for the Children's Health Insurance Program (CHIP) and the recent 

reauthorization of the Children's Hospitals Graduate Medical Education program (CHGME). 

Medicaid covers over 3 7 million children. A small percentage of these kids have complex medical conditions 

requiring ongoing and specialized care. These children have diagnoses that are multiple and varied, from cerebral 

palsy to cystic fibrosis, and that impact multiple body systems at once. They typically are under the continuous care 

of multiple pediatric specialists often seeing a dozen or more physicians- and require access to specialized care 

and additional services from within and outside of their state. Additionally, their care accounts for a drastically 

disproportionate percentage of Medicaid spending on children. 

The i\CE Kids Act is about fundamentally improving care for children with medical complexity in Medicaid, 

driving improvements in quality, and reducing program spending- all further strengthening the Medicaid 

program. The hill will do this by expanding access to patient-centered, pediatric-focused coordinated care models 

tailored to the unique needs of these children. 

To date, a number of children's hospitals, working with physicians and local communities, have supported pilot 

programs that coordinate care among and between the large numbers of providers necessary to care for a child with 

medical complexity. These programs have a track record of improving the quality of care for the children enrolled, 

increasing family satisfaction and reducing costs. However, the acceleration and spread of innovative care 

coordination cannot be achieved on a piecemeal basis. Creating the greatest benefit for the greatest number of 

children requires a national approach. 

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The ACE Kids Act will fill this need by advancing elements of a national framework to drive the creation of 

systems of care coordination informed by shared data and quality standards. It will also provide state and local 

flexibility in tailoring care for this very complex population. To achieve this, the ACE Kids Act will modify 

Medicaid's existing health home option. Currently, states may choose to establish a health home to coordinate care 

for rvfedicaid beneficiaries who have chronic conditions, but this option was not designed for this unique population 

of children. The ACE Kids Act will give states the option to implement health homes specifically serving children 

with complex medical conditions to improve their care. 

The data supporting the ACE Kids Act is convincing, yet it is crucial to remember that behind the statistics are real 

children and families. The ACE Kids Act was developed in response to the experiences of these families and the 

clinicians serving them families like the Beckwiths. Alex and Maddy Beckwith of Keller, Texas are the kindest 14 

and 4-year-old you could hope to meet, but they also both suffer from mitochondrial disease along with other 

health issues. This disease is a serious, complex condition without a cure, which requires lifelong medication and 

therapy. Due to their conditions, Alex and Maddy's care is very complex and ongoing- so much so that they have 

become like family members to the staff at Cook Children's. They sec 15 specialists between them and reqnire 

major interventions to remain stable. 

Such families are an inspiration every day, teaching us about hope, resilience and unconditional love. We urge you to 

watch this short video about Alex Beckwith, which captures why the ACE Kids Act and your support is 

enormously important to children and families who are enduring complex medical conditions: 

https://youtu.be/jXeHXeGqZ-4 

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The new pediatric health homes created by this legislation will be required to follow national guidelines in providing 

and better organizing pediatric-specific care and care coordination services appropriate for the needs of this 

population, kids like Alex and Maddy. This will help families manage the heavy responsibility and logistical 

challenges associated with theix children's care. The pediatric health homes established under the ACE Kids Act will 

implement a specific care plan for the medically complex child, coordinating care from multiple highly specialized 

providers such as physicians, children's hospitals, specialized hospitals, non-physician professionals, home health 

and behavioral health all with a goal of creating easier access to needed services. 

Enabling children to access more of their care in their own communities is critical to improving patient experience 

as well as realizing program savings. But the nearby health homes will also play an tinportant role when requixed 

care is only available out-of-state. Helping to better facilitate out-of-state care is critically important, as pediatric 

medicine- particularly for children with medical complexity- is more regional in nature than adult care. In fact, 

even Alex and Iv1addy have needed to travel to Ohio and Maryland for treatments despite living so close to Cook 

Children's. 

1be bill creates incentives for states to establish these models by providing a higher Medicaid federal match for care 

coordination services provided by the new pediatric health homes. Participation will be completely voluntary for 

children, families and health care providers, and the pediatric health homes will work within the existing structure of 

a state's Medicaid program, including those states with 11edicaid managed care. The legislation envisions payment 

models that will align reimbursement with the best outcomes for these children to reduce costs and support the 

highest quality of care. States will determine which alternative payment methodologies could be used for the health 

CHILDREN'S 

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homes. ~1oving to these performance-based systems will further encourage improvements in utilization and costs, 

similar to what has been supported under the Medicare program for adults. 

The ACE Kids Act is also about using existing Medicaid resources more efficiently. As noted, children with medical 

complexity account for a disproportionately large share of the Medicaid costs for children. A large and growing 

body of research shows that the coordination of care for people with chronic conditions can save money through 

reductions in inpatient hospital stays and emergency room visits, improved medication management, better 

compliance on preventive care, and a guarantee that care is provided as close to a child's home and community as 

possible. 

Potential cost savings have been demonstrated through projects supported by the Center for Medicare and 

Medicaid Innovation (CMMI). CMMI's Coordinating All Resources Effectively (CARE) Award- involving 10 

children's hospitals, including my own Cook Children's, with eight different state Medicaid programs, including DC 

-implemented care coordination programs serving 8,000 children with medical complexity. Collectively, these 

programs reduced emergency department visits by 26 percent and reduced inpatient days by 32 percent. In the first 

full year of operations coordinating care for these children, CARE ultimately reduced overall Medicaid costs by 2.6 

percent while improving patient experience for 8,000 children. The CARE award results were made possible by 

effective collaboration between different providers, including children's hospitals and more than 40 separate 

pediatric practices. The ACE Kids Act will enable these innovations to spread nationally. An analysis of the ACE 

Kids Act introduced in the 1141

h Congress conducted by the American Action Porum showed billions in potential 

savings to the Medicaid program over 10 years. 1 

1 https:/ /ww-w.americanactionforum.otg/tcsearch/14241/ 

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Very importantly, the ACE Kids Act will also create a data and quality framework to drive improvement in quality 

of care and further reduce costs. The creation and collection of consistent data supporting development and sharing 

of best practices while informing clinical standards, including (1uality measures specifically designed for children, are 

key to achieving these improvements. Unfortunately, this information and sharing does not exist undcr Medicaid 

today; there is currently no consistent national data available to inform our policies for children with medical 

complexity. 

The ACE Kids Act outlines a definition of children with medically complex conditions who will be eligible to 

participate in the program and includes standardized data-reporting requirements related to the care of children in 

the enhanced pediatric health homes. By supporting the development of consistent national definitions and 

standards, the ACE Kids Act will represent an important step forward to improving the knowledge base necessary 

to truly advance care for this most vulnerable population. Finally, the ACE Kids Act lays the groundwork for 

additional future adVances in care by sharing best practices across state Medicaid programs to ensure this population 

receives prompt care from out-of-state providers when medically necessary, and by requiring the Medicaid and 

CHIP Payment and Access Commission to submit a report to Congress and the Secretary of Health and Human 

Services on the characteristics of children eligible for health homes and the effectiveness of the program overall. 

Since its original introduction in the 113th Congress, the ACE Kids Act concept has continued to evolve based on 

extensive stakeholder feedback. The current language reflects the results of this collaborative process and we thank 

the bill's champions and Committee staff for their continued efforts. The current focus of the bill is on how 

providers can best collaborate with the family to provide the highest quality of care to these kids. This will 

look different depending on the state, community and needs of the child and family. The current version of the bill 

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is about organizing and coordinating services that the child needs, not about guaranteeing one provider or another a 

special place in that delivery system. 

The evolved legislation has received support from many additional organizations dedicated to children's health. The 

ACE Kids Act is envisioned as a way for states, families and providers to work in partnership to ensure that the 

unique health care needs of this population are met and was designed with state flexibility in mind. We are thankful 

that so many members of Congress have joined together in embracing the goal of improving care for this 

population of vulnerable children. 

The ACE Kids Act will enable the national improvement necessary to provide better care for children with medical 

complexity and reduce Medicaid spending. We ask lawmakers to prioritize kids' health by passing the ACE Kids Act 

this year. 

CHILDREN'S 

HOSPITAL 

ASSOClATIOH 

... ...... CookChildren's. 
49 

Mr. BURGESS. Thank you, Mr. Merrill. 

Mr. Schmidt, you are recognized for 5 minutes to summarize 

your opening statement, please. 

STATEMENT OF DEREK SCHMIDT, J.D. 

Mr. SCHMIDT. Thank you, Mr. Chairman, Ranking Member 

Green, thank you all very much for conducting this hearing today. 

I want to particularly thank Representative Walberg and Representative Welch for their leadership in bringing forward H.R. 

3891. 

It is a bipartisan bill not only on your side but on ours, and I 

testify today wearing two hats: first, as the immediate past president of the National Association of Attorneys General, the nationwide organization of all 56 State, territory, and District of Columbia attorneys general, a nonpartisan organization. To the extent 

my testimony conveys information that is in the two National Association letters submitted with my testimony, it is testimony on behalf of the organization. To the extent I may testify on other matters, for example, illustrate points with experiences from Kansas, 

it is my testimony as the State of Kansas attorney general. 

I would slip into the jargon, Mr. Chairman, the MFCUs, the 

Fraud Control Units, but we tend to call them MFCUs. Title 19 of 

the Social Security Act, of course, requires every State to have one 

or obtain a waiver. Forty-nine States, North Dakota being the exception, have a MFCU, as does the District of Columbia. None of 

the territories does. 

So there are 50 of them nationwide. Of those 50, 44 are housed 

within the Office of the Attorney General. The other six are housed 

at another location in State government, but, of course, none can 

be housed, by law, within the Medicaid program itself. The whole 

point in Congress’ enactment is to have an outside entity watching, 

the fraud fighters, the abuse fighters outside connected with, coordinated with, communicating with, but separate from the program itself. 

Kansas is one of those States where the MFCU is housed in the 

Attorney General’s Office. These are valuable programs from a 

State perspective because, like the Medicaid program itself, the 

cost is shared. The ratios are slightly different. It is a 75-percent 

Federal/25-percent State mix on the cost. That is a tremendous 

value-added proposition from the standpoint of being able to detect, 

investigate, and prosecute Medicaid fraud or the abuse of Medicaid 

beneficiaries. And so they are very attractive and, therefore, 

robustly used among the States, including in Kansas. 

HHS OIG data shows that in fiscal 2017, the total recoveries nationwide from the MFCUs were about $1.8 billion, a little under $2 

billion, and the total number of criminal convictions were about 

1,500, give or take. Of that number, about 370 of those 1,500 criminal convictions were patient abuse convictions as opposed to fraud 

against the program convictions. And it is that distinction between 

fraud and abuse investigations, prosecutions, and efforts to detect 

that is the subject of H.R. 3891. 

The distinction is important. I don’t know the historical reasons 

for it. I suspect staff does. But for whatever reason, when Congress 

enacted the provisions in title 19, it drew a jurisdictional distincVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
50 

tion between the ability of a Medicaid fraud control unit to address 

fraud, an effort to steal public money from the Medicaid program, 

and the authority of a MFCU to address the abuse of patients, 

whether it is physical or financial or sexual or whatever sort of 

abuse it might be. 

And to boil it all down, the net is cast wider statutorily in terms 

of our ability to go after fraud than it is in terms of our ability to 

go after patient abuse. In a phrase, we can essentially go after 

fraud wherever we find it, but with respect to patient abuse, we 

can only go after it when we find it in what the statute calls a 

healthcare facility or in some States, at a statutory option, a board 

and care facility, in other words, in an institutional setting. 

We cannot use those MFCU assets to detect, investigate, prosecute patient abuse cases in a noninstitutional setting. And obviously, when you lay that alongside the tremendous growth in 

HCBS services, home healthcare delivery services outside of an institution, that disconnect, the problem with that becomes obvious. 

So consider, for example, our folks, for example, in Kansas investigating a home healthcare fraud, a PCA fraud sort of circumstance, and we are at a nonresidential or noninstitutional, in 

a residential setting for the purpose of figuring out where the 

money went, and we discover evidence of abuse or neglect of the 

patient. We can no longer use those MFCU assets to pursue the investigation and prosecution of the patient abuse or neglect, even 

though we can continue to pursue the investigation and prosecution of the financial fraud. We don’t think that makes any sense. 

And that is precisely what H.R. 3891 is designed to collapse, to 

allow us the broader scope with respect to both. 

This is not just an academic point. In my written testimony, I 

highlight some cases from Kansas, where we have prosecuted serious physical or other abuse against patients in an institutional setting. We have cases where we have not been able to proceed because we are in a noninstitutional setting. We functionally, in Kansas at least, we go beg, borrow, and plead for a local police department to please take up the cause, or a local prosecutor. And we just 

don’t think that makes any sense from a policy standpoint in today’s healthcare delivery method. 

So we would encourage the enactment of H.R. 3891, both as our 

association and as myself. I would be delighted to answer any questions. And I would just end where I started. From our vantage 

point, like you, most of our members, not all of our members but 

most of our members are elected officials. We are Republicans, 

Democrats, and sometimes other, and there is no daylight on this 

issue among our members. 

The first of the two letters that reflect NAAG policy had 38 signers. It was led by Attorney General Jepsen from Connecticut and 

myself, a Democrat and a Republican. The second had 49 of our 56 

members. And remember, there are only 50 MFCUs. Forty-nine 

signed on, and it was led by Attorney General Jepsen and myself, 

Attorney General Donovan from Vermont, a Democrat from 

Vermont, and Attorney General Hunter, a Republican from Oklahoma. So we are all behind this, and we are grateful for your time. 

[The prepared statement of Mr. Schmidt follows:] 

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Summary of Testimony in Support of H.R. 3891 

Presented to House Committee on Energy and Commerce 

Subcommittee on Health 

By Kansas Attorney General Derek Schmidt 

September 5, 2018 

H.R. 3891 would eliminate an outdated limitation in federal law, thereby expanding (at the option of 

individual states) the authority of Medicaid Fraud Control Units (MFCUs) to detect, investigate and 

prosecute Medicaid patient abuse in non-institutional settings. The National Association of Attorneys 

General, the nonpartisan association representing all 56 state, territory and District of Columbia attorneys 

general, supports H.R. 3891. I also support the legislation in my capacity as Attorney General for the 

State of Kansas. 

The Social Security Act requires every state either to maintain a MFCU or to obtain a waiver. Most 

MFCUs are housed in the state attorney general's office. The MFCU has authority to detect, investigate 

and prosecute fraud in the Medicaid program and patient abuse or neglect. MFCUs have both civil and 

criminal authority. 

MFCUs are funded 75 percent federal funds and 25 percent state matching funds. To maintain federal 

funding, states must comply with conditions on that funding. One of those conditions provides that 

MFCU assets may be used to address Medicaid fraud anywhere it is found but may be used to address 

Medicaid beneficiary-patient abuse only when it arises in either a health care facility or, at the option of 

individual states, in a board and care facility. This different scope results in undesirable outcomes: For 

example, a MFCU that discovers evidence of patient abuse while investigating fraud in a home health 

care setting may pursue the fraud but not the patient abuse. 

H.R. 3891 eliminates this undesirable outcome by allowing states to use MFCU assets to address 

beneficiary-patient abuse wherever it may be found, including in non-institutional settings. But today, 

unlike when the federal statute establishing MFCUs was enacted, far more care is delivered to patients, 

including Medicaid beneficiaries, through home and community-based services outside of health care 

facilities. And when we discover that a patient-beneficiary is being abused in that non-institutional 

setting, I can see no logical policy reason to be prohibited from using MFCU assets to appropriately 

pursue that abuse. 

H.R. 3891, if enacted, would take the blinders off the MFCUs and let them detect, investigate and 

prosecute Medicaid beneficiary-patient abuse where it may occur. I hope this important legislation can 

reach the President's desk before this calendar year is through. 
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DEREK SCHMIDT 

ATTORNEY GENERAl 

STAT!: OF KANSAS 

OFFICE OF THE ATTORNEY GENERAL 

Testimony in Support ofH.R. 3891 

MEMORIAl HAt.<. 

120 SW 10TH AVE., 2HI> R.ooR 

ToPEKA, KS 66612-1597 

{785) 296·2215., fAX 085) 2:96-6296 

WWWAGKS.WV 

Presented to Honse Committee on Energy and Commerce 

Subcommittee on Health 

By Kansas Attorney General Derek Schmidt 

September 5, 2018 

Chainnan Burgess, Ranking Member Green, and Members of the Subcommittee: 

Thank you for this opportunity to testifY in support of H.R. 3891, legislation that would eliminate an 

outdated limitation in federal law, thereby expanding the authority of Medicaid Fraud Control Units 

(MFCUs) to detect, investigate and prosecute Medicaid patient abuse in non-institutional settings. I 

appreciate and commend the work by Representatives Walberg and Welch to bring this important 

legislation forward. 

I am the Attorney General for the State of Kansas, a statewide, elected constitutional officer of our state. I 

have served in this capacity since January 20 1!. As Kansas attorney general, I have made a priority of 

building capacity and focusing resources on fraud and abuse investigations and prosecutions, including 

but not limited to fraud and abuse in the Medicaid program. 

Policy of the National Association of Attorneys General 

I also am the immediate past president of the National Association of Attorneys General (NAAG), the 

nonpartisan association that represents all 56 state, territory and District of Columbia attorneys general in 

the United States. During my year as NAAG president in 2017-2018, I led our Presidential Initiative 
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titled: "Protecting America's Seniors: Attorneys General United Against Elder Abuse." As part of that 

initiative, our organization worked in a bipartisan, or nonpartisan, manner to gather information, hear 

from experts and practitioners, and help build capacity to prevent and combat elder abuse throughout the 

country and in our respective jurisdictions. 

One specific action that came from our NAAG initiative was the endorsement from our organization for 

H.R. 3891 and its proposed expansion of authority to allow MFCUs to detect, investigate and prosecute 

Medicaid patient abuse in non-institutional settings. To that end, our organization authored two letters: A 

May 9, 2017, letter to then-Health and Human Services Secretary Tom Price expressing support for the 

policy of expanded MFCU authority and a March 28, 2018, letter to Representatives Walberg and Welch 

specifically supporting H.R. 3891. The first letter was signed by 38 attorneys general and the second by 

49. Both were bipartisan. Under our NAAG procedures, both letters reflect the official policy statements 

ofNAAG. Both are attached as exhibits to this testimony, and I incorporate them by reference as part of 

my testimony so that NAAG policy on this subject may be fully presented to the Committee. Also 

attached are the July 17, 2017, response from Secretary Price and the August 7, 2017, response from 

Health and Human Services Inspector General Daniel R. Levinson. 

Thus, to the extent my testimony today reflects the content of those NAAG letters, it constitutes the views 

of the National Association of Attorneys General; to the extent I testifY to matters outside those two 

letters, my testimony constitutes only my views as Attorney General for the State of Kansas. 

The Value ofMFCUs 

The Social Security Act requires that every state, as a condition of participation in the Medicaid program, 

either maintain a MFCU or obtain a waiver. All but one state maintains a MFCU. States choose to situate 

their MFCU in various positions within state government. Forty-four MFCUs are housed in the state 

attorney general's office; Kansas is one of those states. Five states Connecticut, Illinois, Iowa, 

Tennessee, and West Virginia- and the District of Columbia house the MFCU in another state agency. 

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North Dakota has received a waiver from the federal government and does not have a MFCU. None of the 

five territories has established a MFCU. 

Our MFCU has both civil and criminal jurisdiction. When appropriate, we seek both injunctive and 

monetary relief in instances of civil false claims to the Medicaid program or other unlawfully made 

payments. We also investigate and prosecute criminal Medicaid fraud and patient abuse. While our 

MFCU attorneys occasionally work in federal court enforcing federal law as cross-designated Special 

Assistant United States Attorneys, most of our work is in state court enforcing state laws against 

Medicaid fraud and patient abuse. Because of the joint federal-state nature of the Medicaid program, we 

work closely with the United States Attorney and with appropriate federal law enforcement agencies. Our 

federal-state working relationship is excellent. 

The size of MFCUs varies substantially by state, with the overall size continually overseen and subject to 

approval by the Department of Health and Human Services-Office oflnspector General (HHS-OIG). In 

Kansas, our MFCU employs four attorneys, four fiscal analysts, one nurse investigator, one legal 

assistant, a special agent-in-charge, and six special agents. The special agent-in-charge and the special 

agents all are sworn law enforcement officers. The total annual budget for the Kansas MFCU is 

approximately $1.8 million. Of that amount, 75 percent is paid with federal funds and the other 25 percent 

with state matching funds. In a small state like Kansas, this federal financial support is critically important 

to enable us to maintain the important capacity to detect, investigate and prosecute instances of Medicaid 

fraud and of the criminal abuse - physical, sexual or financial - of Medicaid beneficiaries. 

The federal funding that supports MFCUs is known as Federal Financial Participation, or FFP. It comes 

with conditions. Those conditions limit the uses of our MFCU assets. One of those conditions governs the 

type of cases our MFCU may handle. In general, cases within a MFCU'sjurisdiction fall into one of two 

categories: Fraud committed against the Medicaid program itself, and abuse of patients who are Medicaid 

beneficiaries. Under federal rules, our MFCU may investigate and prosecute cases of financial fraud 

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against the Medicaid program wherever it may be discovered. Consequently, we have handled cases of 

Medicaid fraud in billing services, in nursing homes, in medical offices, in home health care settings, and 

in other situations. However, our MFCU may only investigate and prosecute cases of patient abuse when 

it occurs in a health care facility or board and care facility. 

In a small state like Kansas, our MFCU provides important services in detecting, investigating and 

prosecuting the abuse of Medicaid patient-beneficiaries. Sadly, we have had occasion to investigate and 

prosecute almost every type of patient abuse imaginable financial abuse, physical abuse and sexual 

abuse. Consider several recent examples of criminal abuse cases we have handled: 

• Prosecuted a nursing home employee for physical or sexual abuse of five residents. The 

defendant was convicted of one count of attempted criminal sodomy and four counts of 

mistreatment of a dependent adult and sentenced to 91 months in state prison. · 

Prosecuted a nursing home employee for sexual abuse of a resident. The defendant was convicted 

of one count of aggravated sexual battery and sentenced to 130 months in state prison. 

Prosecuted a couple who illegally used the assets of one of the defendants' mother, while acting 

as her power of attorney and trustee, to make purchases for themselves, including a house, farm 

and truck, while the mother was living in a nursing home and her expenses were going unpaid. 

Both defendants were convicted of mistreattnent of a dependent adult and conspiring to mistreat a 

dependent adult and each defendant was sentenced to more than 90 months in state prison. 

We are currently prosecuting a nurse for allegedly stealing narcotics intended for beneficiaries in nursing 

homes and diverting them for illicit use, thereby denying patients the pain treattnent to which they were 

entitled. The defendant is charged with multiple counts in three different counties. This case remains 

pending, and of course the charges are merely accusations and the accused is presumed innocent unless 

and until proven guilty. Our office has more than a dozen similar cases of suspected or alleged patient 

abuse currently being investigated or prosecuted. 

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Clearly, the MFCU is an important instrument for justice and for protecting Medicaid beneficiaries from 

abuse. This is consistent with the intention of Congress in creating the MFCUs as evidenced by the 

statutory instruction that MFCUs were created, in part, to help ensure "that beneficiaries under the [State] 

plan [for medical assistance] will be protected from abuse and neglect in connection with the provision of 

medical assistance under the plan." See 42 U.S.C. SEC 1396a(a)(6l)(emphasis added). But undercurrent 

federal law, we are constrained from using these same important law enforcement tools in the MFCUs to 

protect Medicaid beneficiaries from abuse and neglect when the crime occurs someplace other than in a 

health care facility or, at the discretion of individual states, in a board and care facility- someplace such 

as in a home-health setting. 

For emphasis, I would note that the expanded MFCU authority proposed in H.R. 3891 is a particularly 

important tool for combating elder abuse. As we noted in our NAAG letter: 

Today, more than 74 million Americans are enrolled in Medicaid. Of those, more than 6.4 million 

are age 65 or older. Statistics cited by the Centers for Disease Control and Prevention (CDC) 

suggest that I in I 0 persons age 65 and older who live at home will become a victim of abuse. 

Not surprisingly, CDC figures also suggest that most elder abuse is never detected, with one 

study concluding that for every case of elder abuse that is detected or reported, 23 more remain 

hidden. 

See NAAG Letter to HHS Secretary Tom Price, May 9, 2017 (internal citations omitted). While the 

expanded authority would not be limited to addressing abuse against elder Medicaid beneficiary-patients, 

the importance of this tool in addressing elder abuse is what led NAAG to lend our support to this 

legislation as an outgrowth of our presidential initiative on combating elder abuse. 

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Importance ofH.R. 3891 

The difference in scope between a MFCU's anti-fraud authority and its narrower anti-abuse authority is 

the subject ofH.R. 3891. This bill proposes to allow states the option of expanding their MFCU's scope 

to combat Medicaid beneficiary-patient abuse wherever it may occur, including in non-institutional 

settings. That state-by-state option, which mirrors the flexibility in current law that allows states to opt-in 

to using MFCUs to combat patient abuse in board-and-care facilities, is an important component of the 

bill. That is optional authority that, ifH.R. 3891 is enacted, Kansas intends to exercise. From my vantage 

point, it makes little sense to allow broad MFCU authority to combat fraud when the public treasury is the 

victim but to insist on narrower MFCU authority to combat abuse when the Medicaid beneficiaries 

themselves are the victim. Whatever its original rationale, this distinction seems, at best, outdated. 

Nevertheless, states must abide by that distinction and limit the scope of the efforts to combat patient 

abuse or risk losing their FFP. 

In practice, the limitation on using MFCU assets to detect, investigate and prosecute patient abuse outside 

of an institutional setting has real consequences. In Kansas, we have seen at least two real-world, 

detrimental effects of this limitation: 

We have seen cases in which our MFCU agents, in the course of conducting a lawful 

investigation in connection with suspected fraud in home health care services being funded by 

Medicaid and provided in the beneficiary's home, have uncovered evidence of abuse of the 

Medicaid beneficiary-patient. Under current law, our MFCU could proceed to investigate and 

prosecute the fraud committed against the government program but could not proceed to 

investigate and prosecute the abuse committed against the beneficiary-patient. That is because of 

the current statutory restriction that limits a MFCU's authority over patient abuse only to 

institutional settings such as in a health care facility. 

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We also have seen cases involving so-called "pill mills" involving the illegal diversion of 

narcotics from the lawful supply chain to the illicit market. In some cases, that diversion results in 

the misuse of these drugs causing death or great bodily harm. But if the diversion occurs entirely 

in a setting outside a health care facility or a board and care facility for example, at a doctor's 

office our MFCU is permitted to pursue the relatively small fraud (the stealing of pills from the 

Medicaid program) but not the much greater harm done to patients as a result of the diversion (the 

death or great bodily harm from misuse of the drugs). 

That difference in scope between our MFCU's anti-fraud authority and its anti-abuse authority is poor 

public policy and, at least in my view, logically unjustifiable. It has roots in an era long ago when the 

delivery of most health services was in an institutional setting and, therefore, the opportunity for 

Medicaid beneficiary-patient abuse in a non-institutional setting, such as a horne health care setting, was 

remote. 

But today, far more care is delivered to patients, including Medicaid beneficiaries, through horne and 

community-based services outside of health care facilities. And when we discover that a patientbeneficiary is being abused in that non-institutional setting, I can see no logical policy reason to be 

prohibited from using MFCU assets to appropriately pursue that abuse. 

H.R. 3891 is designed to eliminate that barrier in federal law to using existing MFCU assets to protect 

Medicaid beneficiaries from patient abuse, regardless of where the abuse may occur. It proposes a small 

change in statute that has a large likelihood of providing better protection, and better justice, for Medicaid 

beneficiary-patients who are the victims of abuse. 

For that reason, I strongly support passage ofH.R. 3891 both as Kansas Attorney General and on behalf 

of the National Association of Attorneys General. This legislation, if enacted, would take the blinders off 

the MFCUs and let them detect, investigate and prosecute Medicaid beneficiary-patient abuse wherever it 

may occur. I commend Representatives Walberg and Welch for their leadership in bringing this 

7 
59 


36069.037

legislation forward, and I offer to work with the Committee in whatever manner may be helpful to 

advance this legislation and, I hope, find a way for it to reach the President's desk before this calendar 

year is through. 

Thank you for your consideration of this important matter. 

8 
60 


36069.038

~ National Association 

of Attorneys General 

PRESIDENT 

George Jepsen 

Connecticut Attorney General 

PR£SIOENNLECT 

Derek Schmidt 

Kansas Attorney General 

VICE PRESIDENT 

Jeff landry 

Louisiana Attorney General 

MMEDIATE PAST PRESIDENT 

Marty Jackley 

South Dakota Attorney General 

EXECUTIVE DIRECTOR 

James McPherson 

2030 M Street, NW 

Eighth Floor 

Washington, DC 20036 

Phone: (202) 326-6000 

http://www.naag.org/ 

May 10,2017 

The Honorable Tom Price 

Secretary, U.S. Department of Health & Human Services 

200 Independence Avenue, S.W. 

Washington, D.C. 20201 

Dear Mr. Secretary: 

As the Attorneys General of our respective states, we write to request a change 

in federal policy to allow use of the federal funds provided to our Medicaid 

Fraud Control Units (MFCUs) 1 for the detection, investigation and 

prosecution of a wider range of abuse and neglect committed against Medicaid 

beneficiaries or in connection with Medicaid-funded services. Under the 

pertinent provisions of the Social Security Act, most state attorneys general 

have an important working relationship with their state's MFCU; in many 

states, the MFCU is housed within the state attorney general's office. 2 

As implied by its commonly used name, the MFCU has as its principal focus 

the detection and elimination of fraud within the Medicaid program. But 

Congress also created the MFCUs to help ensure "that beneficiaries under the 

[State] plan [for medical assistance] will be protected from abuse and neglect 

in connection with the provision of medical assistance under the plan."3 

Indeed, at one place in the Social Security Act, Congress expressly refers to 

MFCUs as "medicaid fraud and abuse control unit[s]".4 

Today, more than 74 million Americans arc enrolled in Medicaid. 5 Of those, 

more than 6.4 million are age 65 or older. 6 Statistics cited by the Centers for 

Disease Control and Prevention (CDC) suggest that I in 10 persons age 65 

and older who live at home will become a victim of abuse. Not surprisingly, 

CDC figures also suggest that most elder abuse is never detected, with one 

study concluding that for every case of elder abuse that is detected or reported, 

23 more remain hidden. 7 

1 These federal funds are referenced in regulation as "federal financial participation," or 

''FFP." See 42 C.F.R. § 1007.19. 2 See 42 U.S.C. § l396b(q). 3 See 42 U.S.C. § 1396a(a)(61) (emphasis added). 4 /d. (emphasis added). 5 January-March 2016 Medicaid MBES Enrollment report (Updated December 20 16), 

available at https://www.medicaid.gov/medicaid/orogram-information/downloads/cms-64-

enrollrnent-report-jan-mar-20 16.pdf (last accessed March 28, 20 17). 6 See httn://kff.org/medicaid/state-indicator/medicaid-enrollment-byagei?dataView~l¤tTimeframe=O&selectedDistributions=65-

plus&sortModel-% 7B%22co!Id%22:%22Location%22 %22sort%22:%22asc%22% 7D (last 

accessed March 28, 20 17). 7 See https://www.cdc.gov/violenceprevention/elderabuse/consequences.html. 
61 


36069.039

In light of those realities, the current strict federal limitations on states' ability to use MFCU 

assets to investigate and prosecute abuse and neglect are outdated, arbitrarily restrict our ability 

to protect Medicaid beneficiaries from abuse and neglect as Congress intended, and should be 

replaced or eliminated. We request authority to use federally funded MFCU assets to detect, 

investigate and prosecute abuse and neglect of Medicaid beneficiaries or in connection with 

Medicaid-funded services to the full extent the federal statute allows. Toward that objective, we 

offer two specific recommendations, both of which can be accomplished by changing current 

federal regulations: 

First, we recommend allowing the use offederally funded MFCU assets to investigate and 

prosecute abuse and neglect of Medicaid beneficiaries in non-institutional settings. The Social 

Security Act expressly allows use ofMFCUs to investigate and prosecute patient abuse/neglect 

in "health care facilities"8 or "board and care facilities,"9 but the statute does not prohibit use of 

federal MFCU funds to investigate abuse/neglect in non-institutional settings-only the 

regulations impose that prohibition. 10 This regulatory restriction arbitrarily limits the scope of 

potential abuse or neglect cases our MFCUs can investigate or prosecute-for example, by 

excluding abuse or neglect of a beneficiary alleged to have occurred in a home health care or 

other non-institutional setting. This regulatory restriction appears to us in conflict with 

Congress's broad command that the MFCUs are to help ensure that Medicaid beneficiaries "will 

be protected from abuse and neglect in connection with the provision of medical assistance" 

under Medicaid. We recommend these regulations be broadened to allow use of federal MFCU 

funds to freely investigate and prosecute suspected abuse or neglect of Medicaid beneficiaries in 

whatever setting it may occur, including non-institutional settings. 

Second, we recommend improving detection of abuse and neglect of Medicaid beneficiaries by 

broadening the permissible use of federal MFCU funds to screen complaints or reports alleging 

potential abuse or neglect. Under current regulations, federal MFCU funds may be used only for 

the "review of complaints of alleged abuse or neglect of patients in health care facilities." 11 As 

with the first restriction discussed above, the regulatory limitation on the screening of only those 

complaints alleging patient abuse or neglect in health care facilities arbitrarily narrows the 

permissible use ofMFCU assets and appears in conflict with the broad congressional command 

to help ensure that all Medicaid beneficiaries, not just those in institutions, "will be protected 

from abuse and neglect." This regulation effectively places blinders on the MFCUs in their 

ability to search for and identify cases of possible abuse and neglect of beneficiaries. The 

regulations should be broadened to allow use of federal MFCU funds to freely screen or review 

any and all complaints or reports of whatever type, in whatever setting, that may reasonably be 

expected to identify cases of abuse of neglect of any Medicaid beneficiary. The MFCUs should 

have the widest possible latitude to detect and identify potential abuse and neglect of Medicaid 

8 42 lJ.S.C. § 1396b(qX4)(A)(i). 9 42 lJ.S.C. § 1396b(q)(4)(A)(ii). 10 See, e.g., 42 C.P.R.§ 1007.19(d)(l) ("Reimbursement will be limited to costs attributable to the specific 

responsibilities and functions set forth in this part in connection with the investigation and prosecution of suspected 

fraudulent activities and the review of complaints of alleged abuse or neglect of patients in health care facilities." 

(emphasis added)). 11 See 42 C.F.R. § 1007.19(d)(l) (emphasis added); see also 42 C.F.R. § 1007.11(b)(l) ("The unit will also review 

complaints alleging abuse or neglect of patients in health care facilities .... "). 
62 


36069.040

beneficiaries. We favor permitting the MFCUs to cast a wide net at the screening stage: Better to 

err on the side of reviewing complaints or reports that ultimately are determined to involve 

conduct outside the scope the MFCU may investigate or prosecute than to err through narrow 

screening criteria that can leave abuse or neglect of Medicaid beneficiaries undetected by the 

MFCU. 

Mr. Secretary, we know you share our strongly held view that all persons should live free from 

abuse and neglect. The MFCUs are valuable assets to help make that freedom a reality for 

Medicaid beneficiaries. We respectfully request you take swift action to eliminate federal 

regulations that needlessly narrow our use of these valuable assets. Instead, we request to be 

freed to use federal MFCU funds to detect, investigate and prosecute abuse and neglect 

committed against Medicaid beneficiaries or in connection with Medicaid-funded services to the 

fullest extent permitted by federal statute. 

Thank you for considering our recommendations. We stand ready to work with you to achieve 

this important objective. 

s§L 

George Jepsen 

Connecticut Attorney General 

---===~-- ~· //i)-17 - Lesiie Rutledge 

Arkansas A torney General 

Karl A. Racine 

District of Columbia Attorney General 

Derek Schmidt 

Kansas Attorney General 

yj~~~~ Arizona Attorney General 

{j;t~t~:tif/fh:1:[1A-- Cynthia H. Coff~ .. 

Colorado Attorney General 

Hawaii 

~ Attorney General 
63 


36069.041

Curtis T. Hill, Jr. Tom Miller 

Indiana Attorney General Iowa Attorney General 

Kentucky 

~~&L_ Attorney General 

~~f~-- Brian Frosh 

Maryland Attorney General 

ft,;~o.r~ Lori Swanson 

Minnesota Attorney General 

~~~ JEI;Goooml 

«.::::-

1 

rj:fpi ;c;)ey General 

/j;-t:y. if~ Tim Fox 

Montana Attorney General Nebraska Attorney General 

New 

f!!:.d~ Mexico Attorney General 

New York Attorney General 

/J:t;:k 

~;~h Carolina Attorney General 
64 


36069.042

~..&.~-..:___ 

Ohio Attorney General 

~ ,~..._LD.........__ _____ 

Ellen F. Rosenblum 

Oregon Attorney General 

Peter 

ic&if'~-6t.· F. Kilmartin 

Rhode Island Attorney General 

South 

C:S:ff~ Dakota Attorney General 

~ Utah Attorney General 

tll~~·b~~ 

V"""'"W"" u ~d· Wisconsin Attorney General 

~ 

• 

Oklahoma Attorney General 

Josh Shapiro 

Pennsylvania Attorney General 

(flwvJ~ Alan Wilson 

~arolina Attorney General 

"""'~'!£ ~ /.:t7l! Tennessee Attorney General 

T. <Sii~'?ft- J. Don an 

Vermont tto e General 

f~/1mt~ West Virginia Attorney General 

Wyoming Attorney General 
65 


36069.043

THE SECRETARY OF HEALTH AND HUMAN SERVICES 

WASHINGTON, D.C. 2D2D1 

JUL 1 7 2017 

The Honorable George Jepsen 

President 

National Association of Attorneys General 

Washington, DC 20036 

Dear Attorney General Jepsen: 

Thank you for your letter requesting that the U.S. Department of Health and Human Services 

change its current regulations to allow Medicaid Fraud Control Units (MFCUs) to receive federal 

financial participation to detect, investigate, and prosecute abuse and neglect of Medicaid 

beneficiaries in non-institutional settings. We share your concerns regarding the safety and wellbeing of Medicaid beneficiaries in all settings, and we are diligently working on responding to 

your inquiry, 

This matter has been referred to Inspector General Daniel R. Levinson, from whom you can 

expect a direct response. As the agency responsible for overseeing MFCUs and administering 

the MFCU grant award, the Office ofinspector General would be in a position to respond to the 

issue you have raised. 

Thank you again for your letter and your focus on protecting the safety and well-being of 

Medicaid beneficiaries. 

Yours truly, 

Thomas E. Price, M.D. 
66 


36069.044

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

OFFICE OF INSPECTOR GENERAL 

The Honorable George Jepsen 

President 

W.·\SJ-H:"rGTO:"r, DC 20201 

AUG 0 7 2017 

National Association of Attorneys General 

Washington, DC 20036 

Dear Attorney General Jepsen: 

Thank you for your letter to Secretary Thomas E. Price, M.D., requesting that the U.S. 

Department of Health and Human Services (HHS) change its current regulations to allow 

Medicaid Fraud Control Units (MFCUs) to receive Federal financial participation (FFP) to 

detect, investigate, and prosecute abuse and neglect of Medicaid beneficiaries in non-institutional 

settings. As indicated by Secretal'y Price's letter of July 17, 2017, your letter has been referred to 

the Office oflnspector General (OIG) for response. 

We share your concerns regarding abuse and neglect of Medicaid beneficiaries. We recognize 

that the laws governing Federal matching were established almost 40 years ago and do not reflect 

the shift in delivery and payment for health care services to home- and community-based 

settings. OIG believes that the law should be changed to expand MFCUs' use ofFFP to include 

the detection, investigation, and prosecution of abuse and neglect of Medicaid. beneficiaries in 

non-institutional settings. However, we do not believe that the change can be made by 

regulation. 

The Social Security Act (the Act) currently allows for payment of FFP for MFCU activities in 

abuse and neglect cases involving Medicaid beneficiaries. t Section 1903(q)( 4)(A) of the Act 

specifically sets forth only two settings in which MFCUs may review complaints of abuse or 

neglect of patients: (1) health care facilities that receive Medicaid payments and (2) board and. 

care facilities. Other non-institutional settings, such as home-based care and transportation, are 

not listed. Because the statute specifically enumerates some settings in which MFCUs can 

investigate abuse and neglect cases and receive FFP, the failure to include the others, according 

to statutory construction principles, is read as excluding them. 

In cases in which a beneficiary is receiving services in his or her own home, the requirements of 

the statute are not met. Homes and most other non-institutional settings are neither health care 

facilities that receive Medicaid payments nor board and care facilities. Thus, the statute does not 

1 Section 1903(a)(6) ofthe Act requires HHS to pay a portion of the sums expended by a State "which are 

attributable to the establishment and operation of (including the training of personnel employed by) a State medicaid 

fraud control unit (described in subsection (q))." Section 1903(q) of the Act defines MFCU requirements, including 

MFCU duties regarding patient abuse and neglect. 
67 


36069.045

Page 2- The Honorable George Jepsen 

permit FFP for the detection, investigation, and prosecution of abuse or neglect of patients in 

non-institutional settings. 

HHS is bound by the statute and cannot expand the regulatory definition of "health care facilities 

receiving payments under the State Medicaid plan" to include non-institutional settings that do 

not receive Medicaid payments. While we cannot make the requested regulatory change, we 

have been and continue to be supportive of efforts to effect a statutory change that would allow 

MFCUs to receive FFP for the detection, investigation, and prbsecut!on of abuse and neglect in 

non-institutional settings. OIG representatives·have also identified the need for a statutory 

change in testimony before congressional committees, including, most recently, in May 2017 

testimony.2 

Thank you for raising this important issue. We continue to support the concept that MFCU s 

should receive FFP to conduct these investigations of abuse and neglect. If you have questions 

or seek additional information, please contact me, or someone from your staff may contact Ann 

Maxwell, Assistant Inspector General for Evaluation and Inspections, at (202) 619-2482. 

Sincerely, 

Daniel R. Levinson 

Inspector General 

2 Testimony of Christi A. Grimm, Chief of Staff, before House Committee on Energy and Commerce: 

Subcommittee on Oversight and Investigations: "Combatting Waste, Fraud, and Abuse in Medicaid's Personal Care 

Services Program," May 2, 2017, available at https://oig.hbs.gov/testimony/docs/20 17/grimm-testimony05022017.pdf 
68 


36069.046

~ National Association 

of Attorneys General 

PRESIDENT 

Derek Schmidt Kansas Attorney General 

PRESIDENT -ElECT 

Jeff Landry Louisiana Attorney General 

VICE PRESIDENT 

Tim Fox Montana Attorney General 

IMMEDIATE PAST PRESIDENT 

George Jepsen Connecticut Attorney General 

EXECUTIVE DIRECTOR 

Chris Toth 

1850 M Street, NW 

Twelfth Floor 

Washington, DC 20036 

Phone: (202) 326-6000 

http://www.naag.org/ 

March 28,2018 

Honorable Tim Walberg 

2436 Rayburn House Office Building 

Washington, D.C. 20515 

Honorable Peter Welch 

2303 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Representatives Walberg and Welch: 

As the Attorneys General of our respective states, we write in support of your 

legislation, H.R. 3891, that would expand the authority of Medicaid Fraud 

Control Units (MFCUs) to detect, investigate and prosecute Medicaid patient 

abuse in non-institutional settings. 

On May 10,2017, thirty-eight attorneys general wrote to then-Secretary Tom 

Price at the U.S. Department of Health and Human Services urging expanded 

authority for MFCUs to address patient abuse and neglect ("the NAAG 

letter"). Specifically, the NAAG letter requested HHS alter its regulations 

implementing the pertinent statutory provisions to broaden the permissible 

authority for MFCUs, and the associated use of federal financial participation 

(FFP), in two regards. First, it recommended "allowing the use of federally 

funded MFCU assets to investigate and prosecute abuse and neglect of 

Medicaid beneficiaries in non-institutional settings." Second, it recommended 

"improving detection of abuse and neglect of Medicaid beneficiaries by 

broadening the permissible use of federal MFCU funds to screen complaints 

or reports alleging potential abuse or neglect." 

On August 7, 2017, HHS Inspector General Daniel R. Levinson responded to 

the NAAG letter stating "OIG believes that the law should be changed to 

expand MFCUs' use of FFP to include the detection, investigation, and 

prosecution of abuse and neglect of Medicaid beneficiaries in non-institutional 

settings." However, HHS concluded that such a change requires statutory 

amendment and could not be accomplished solely by regulation. 

On September 28, 2017, you introduced H.R. 3891. We are informed that, in 

the drafting of your legislation, you were mindful of the NAAG letter and that 

you intended to implement the letter's recommendations. We have reviewed 

H.R. 3891 and understand that, if adopted, it would enable HHS-OIG to 

implement all changes requested in the NAAG letter. Your legislation permits, 

but does not require, each MFCU to exercise the expanded authority the bill 

proposes, just as current law does with board and care facilities. It is our 

understanding that States electing to operate under the expanded authority of 

H.R. 3891 would be able to use their MFCUs to detect, investigate and 
69 


36069.047

prosecute cases of abuse or neglect of Medicaid patients in whatever setting abuse or neglect 

may occur and to do so without losing federal financial participation. 1 

This change is vitally important because it eliminates the blinders current law places on MFCUs' 

ability to detect, investigate and prosecute cases of abuse or neglect of Medicaid patients. Since 

the current statute was enacted decades ago, substantial growth has occurred in home and 

community-based services, office-based services, transportation services, and other settings that 

are neither "health care facilities" nor "board and care facilities" but where services are provided 

and thus patient abuse or neglect may occur. H.R. 3891 proposes a common-sense change that 

will better protect an often-vulnerable population and will maximize the benefits and efficient 

use of MFCU assets. 

We also note that your bill is particularly timely and important in light of the national opioid 

epidemic. Consider, for example, a situation in which a Medicaid beneficiary in a home or 

community-based setting is provided prescription opioid painkillers in an unlawful manner, 

resulting in death or great bodily harm to the patient. Under current law, although the patient 

harm caused by distribution of those opioids may have been criminal, our MFCUs would be 

hampered or prevented from investigating or prosecuting the case of patient abuse because it 

occurred in a setting other than a health care facility or a board and care facility. Under H.R. 

3891, however, MFCUs could exercise clear authority to pursue that sort of investigation and, if 

appropriate, prosecute that patient abuse, thus bringing more criminal and civil investigation and 

prosecution assets to bear in the fight against the opioid epidemic. 

Thank you for your leadership in proposing H.R. 3891. We hope it can become law soon so our 

states may have the option to use the important new tools it would make available in the fight 

1 The NAAG letter requested expanded authority for MFCUs to "detect, investigate and 

prosecute" a wider range of abuse and neglect cases, and Mr. Levinson's response confirms that 

OIG favors "use ofFFP to include the detection, investigation, and prosecution" of such cases. 

By "detect," the NAAG letter specifically sought broader authority for MFCUs to use FFP to 

"screen" complaints or reports alleging potential abuse or neglect." Current HHS regulations 

constrain states' ability to use MFCU assets to review complaints in order to detect which may 

allege patient abuse or neglect that would warrant investigation or prosecution using MFCU 

assets. See, e.g., 42 C.F.R. Sec. 1 007.19( d)(! )(limiting FFP to "review of complaints of alleged 

abuse or neglect of patients in health care facilities")( emphasis added); see also 42 C.F.R. Sec. 

1007.1l(b)(1)(restricting authority ofMFCU to "review[ing] complaints alleging abuse or 

neglect of patients in health care facilities" and to "review[ing] complaints ofthe 

misappropriation of patient's private funds in suchfacilities.")(emphasis added). For states that 

would choose to exercise the expanded authority in H.R. 3891, we read the bill to require 

elimination of these and similar regulatory barriers that restrict MFCUs authority to review 

complaints. Obviously, a review will necessarily precede a determination whether a complaint or 

report alleges Medicaid patient abuse or neglect that would fall within H.R. 3891 's expanded 

authority to investigate or prosecute, and it would make no sense to arbitrarily limit review to 

complaints from patients in health care facilities if the authority to investigate and prosecute 

abuse and neglect is expanded to other settings. 
70 


36069.048

against the abuse and neglect of all Medicaid patients -- wherever that may occur. If we may be 

of assistance in advancing this legislation, please let us know. 

&_ 

George Jepsen 

Connecticut Attorney General 

• 

M~ Oklahoma Attorney General 

Steve Marshall 

Alabama Attorney General 

Mark Brnovich 

Matthew P. Denn 

Q;;~i:~ Florida Attorney General 

~IC¥Jt~~ Russel A. Suzuki .... V 

Hawaii Acting Attorney General 

Derek Schmidt 

:??.~ttoP!lrn'y Grn~l 

T.J. Dono an 

Vermont tto General 

li. aska Attorney General 

,·//d1:' 

Leslie Rutledge 

Arkansas Attorney General 

(};t~tJdlf!h~¢/LCynthia H. CoffnWn 

Colorado Attorney General 

District 

K~ of Columbia Attorney General 

Christopher M. Carr 

Georgia Attorney General 

~~~ Lawrence Wasden 

Idaho Attorney General 
71 


36069.049

{!Jf/~. r. 

Illinois Attorney General Indiana Attorney General 

Tom Miller A~,lLL- Kentucky Attorney General {it#- ~~~~- Brian Frosh 

Louisiana Attorney General Maryland Attorney General 

M::/:;;jfff Bill Schuette 

Massachusetts Attorney General Michigan Attorney General 

Lori 

Minnesota 

Swanson 

Attorney General ~~~yGoo=l 

~~~~ t£R 

Montana Attorney General 

Doug 

~8-~ Peterson f:Ji:-

Nebraska Attorney General Nevada Attorney General 

Gordon MacDonald Gurbir 

~. S. Grewal 

New Hampshire Attorney General 

fvt t:??""A2:__ 

Hector Balderas Eric T. Schneiderman 

New Mexico Attorney General New York Attorney General 
72 


36069.050

q~~ Josh Stein 

North Carolina Attorney General 

ry~.Je - Ellen F. Rosenblum 

Oregon Attorney General 

Peter 

~/~4~· F. Kilmartin 

Marty 

~&-~ J. Jackley 

South Dakota Attorney General 

Sean ~~ Reyes 

Utah Attorney General 

MaA9t. <R.. ~~ Mark R. Herring X 

Virginia Attorney General U 

P~11tm1~ Patrick Morrisey 

West Virginia Attorney General 

Peter K. Michael 

Wyoming Attorney General 

MikeDeWine 

Ohio Attorney General 

Josh 

~~ Shapiro 

Pennsylvania Attorney General 

South Carolina Attorney General 

;tL~-:::, 7#· j /.t7l! 

Tennessee Attorney General 

c=~al~r~ ~~ Virgin Islands Attorney General 

~'"~~ f"~ w'"""W G~O<ru 

~mol Wisconsin Attorney General 
73 

Mr. BURGESS. Great. Thank you, Mr. Schmidt. 

Dr. Yoder, you are recognized for 5 minutes to summarize your 

opening statement, please. 

STATEMENT OF DAVID YODER, PHARM.D. 

Dr. YODER. All right. Thank you, Mr. Chairman. First, I would 

like to thank both Chairman Burgess and the Ranking Member 

Green for their leadership in holding today’s hearing and providing 

an opportunity to discuss key ways to improve healthcare. 

My name is David Yoder. I am the Executive Director, Member 

Care and Benefits at the Blue Cross Blue Shield’s Federal Employee Program. BCBSA is a national federation of 36 independent 

community-based and locally operated Blue Cross and Blue Shield 

companies that collectively provide healthcare coverage for one in 

three Americans. 

Blue Cross and Blue Shield companies offer quality healthcare 

coverage in all markets across America and participate in all Federal insurance programs. BCBSA, through the FEP, administers 

health insurance to approximately 5.4 million Federal employees, 

retirees, and their families. We are committed to high-quality affordable coverage for all, regardless of preexisting conditions. 

Today I am going to address a couple areas. One is how BCBSA 

and its member companies are working to reduce fraud and abuse 

and the need to eliminate gag clauses related to prescription drugs. 

Fraud and abuse is an essential step to ensure the affordability of 

healthcare and addressing, reducing, and, to the extent possible, 

preventing the opportunity for fraud and abuse. 

BCBS companies are diligent in working to stay ahead of fraud 

and abuse. The BCBSA National Antifraud Department is dedicated to the support and promotion of BCBSA’s antifraud efforts 

nationwide, including for the FEHBP program. This effort includes 

direct investigative support of local Blue Cross Blue Shield special 

investigative units, coordination of multiplan investigations, working with Federal and State law enforcement, and providing subjectmatter experts to BCBSA’s Office of Policy and Representation, the 

media, and the government entities. 

Among various governmental efforts, the Federal Government established the Healthcare Fraud Prevention Partnership, HFPP, to 

improve the detection and prevention of healthcare fraud. BCBSA 

and several of our member companies are active participants in the 

HFPP. We support the HFPP and Congress’ desire to establish explicit authority for HFPP and its activities. As Congress takes 

steps to codify the HFPP charter, we recommend improvements to 

help the partnership fulfill its objectives, which were in my submitted written testimony. 

Turning to gag clauses, BCBSA does not support the use of gag 

clauses and is unaware of any Blue Cross and Blue Shield company 

or contracted pharmacy benefit managers to have gag clauses in 

place with pharmacies. We commend CMS for taking a tougher position on gag clauses and support legislation to ban gag clauses and 

any prohibitions on allowing pharmacists to make information and 

cost savings known to the member at the point of sale. 

To the extent that some of the industry includes such clauses in 

their contracts, consumers may be deprived of information that will 

74 

help them make prudent decisions when paying for prescription 

drugs. With this in mind, we would also encourage pharmacists to 

advise patients on generic substitution and alternative medications, so long as this is done in direct communication with the dispensing physician. 

Full transparency is critical for consumers to have the necessary 

information to make choices that work best for them. It is also important that pharmacists advise consumers to consider the impact 

of not using insurance coverage to pay for their prescriptions. 

While certain beneficiaries might pay lower out-of-pocket costs on 

a given prescription, drugs purchased outside the insurance benefit 

in most cases will not count toward the beneficiary’s deductible or 

maximum out-of-pocket limits, which may reduce the value of their 

insurance coverage. 

That is why we support elimination of gag clauses. We believe 

that pharmacists should also inform consumers about the potential 

risks of not using their drug coverage so they can make more informed decisions. 

In closing, BCBSA applauds the committee for taking on these 

important issues as it is critical that all stakeholders work together 

to ensure the affordability of healthcare for all Americans. We support these efforts to drive the healthcare system to higher quality, 

lower costs, and improve access to care for everyone. 

In line with these goals, we urge Congress to continue its efforts 

to ensure that people have timely access to safe, effective, and affordable cutting-edge prescription medications when they need 

them. Achieving this important goal will require the public and private sectors to collaborate to develop solutions that benefit patients 

and the entire healthcare system. Thank you for the opportunity to 

testify today and your leadership in seeking opportunities to improve healthcare. And I look forward to taking any questions. 

Thank you. 

[The prepared statement of Dr. Yoder follows:] 

75 


36069.051

Testimony on 

Opportunities to Improve Health Care 

By 

David Yoder, Pharm.D., M.B.A. 

Executive Director, Member Care and Benefits 

Government Programs and Federal Employee Program 

Blue Cross and Blue Shield Association 

Before the 

House Energy and Commerce Committee 

Subcommittee on Health 

September 5, 2018 
76 


36069.052

Introduction 

My name is David Yoder and I am Executive Director, Member Care and Benefits at the Blue 

Cross Blue Shield Association's Federal Employee Program (BCBSA FEP). 

BCBSA is a national federation of 36 independent, community-based, and locally operated Blue 

Cross and Blue Shield companies that collectively provide healthcare coverage for one in three 

Americans. Blue Cross and Blue Shield companies offer quality healthcare coverage in all 

markets across America and participate in all federal insurance programs, including the Federal 

Employee Health Benefits Program (FEHBP), Medicare Advantage, Part D, CHIP and Medicaid 

managed care programs. BCBS companies also serve individuals and employers in the small 

and large group markets. We are committed to high quality, affordable coverage for all 

regardless of pre-existing conditions. 

For nearly a century, BCBS companies have provided secure and stable healthcare coverage to 

people in communities across the country, allowing them to live free of worry, free of fear. 

Serving one-in-three Americans nationwide (over 106 million), BCBS companies, their 

foundations, and their employees stand committed to their local communities -where they live 

and work. They do this by creating and supporting programs that drive positive health outcomes 

addressing some of the most pressing issues affecting the country today: community health 

disparities, the opioid epidemic and most recently providing aid to those in need after a 

catastrophic hurricane season. 

2 
77 


36069.053

BCBSA, through the FEHBP, administers health insurance under contract with the U.S. Office of 

Personnel Management (OPM) to approximately 5.4 million federal employees, retirees and 

their families. The FEP Director's Office of BCBSA, located in Washington, D.C., manages this 

contract, acting as the Blue Cross and Blue Shield Plans' agent with the OPM. I would like to 

thank Chairman Burgess (R-TX) and Ranking Member Green (0-TX) for their leadership in 

holding today's hearing and providing the opportunity to discuss key ways to improve health 

care. In my remarks today, I will address: 

I. How BCBSA and its member companies are working to reduce fraud and abuse; 

II. The need to eliminate "gag" clauses in prescription drug spaces; and 

Ill. Other key prescription drug policy opportunities to ensure people have access to 

safe, effective prescription medicines at the most affordable price. 

Fraud and Abuse 

An essential step to ensure the affordability of healthcare is addressing, reducing, and to the 

extent possible preventing, the opportunity for fraud and abuse. According to the National 

Health Care Anti-Fraud Association (NHCAA), health care fraud costs taxpayers $68 billion 

every year and accounts for between three and 1 0 percent of all healthcare spending in the 

United States. BCBS companies are diligent in working to stay ahead of fraud (e.g., falsified 

claims; misrepresenting the provider of service; billing a non-covered service as a covered 

service) and abuse (e.g., over-prescribing medications; ordering unnecessary tests; keeping 

patients at the hospital for longer than necessary). The BCBSA's National Anti-Fraud 

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Department is dedicated to the support and promotion of BCBSA's anti-fraud efforts nationwide, 

including for the FEHBP program. This effort includes direct investigative support to Blue Plan 

Special Investigative Units (SIUs), coordination of multi-Plan investigations, working with federal 

and state law enforcement, and providing subject matter expertise to BCBSA's Office of Policy 

and Representation, the media, and governmental entities. 

BCBS companies' fraud investigation units coordinate investigations with the FBI, the Offices of 

Inspector General for the U.S. Department of Health and Human Services and the Office of 

Personnel Management, state police and local police departments. They also assist with state 

and federal prosecutions. The management team within several BCBS companies' SIUs are in 

leadership roles with major health care anti-fraud organizations and associations, including the 

NHCAA. NHCAA membership consists of approximately 90 private health insurers, regulatory 

agencies, and federal, state, and local law enforcement agencies that have jurisdiction over 

health care fraud. Plan managers from the following BCBS companies currently serve on the 

Board of Directors: Florida Blue, BCBS North Carolina, BCBS Massachusetts, Anthem, Health 

Care Service Corporation, and Blue Shield of California. This representation allows us to 

strengthen our partnerships, provides development opportunities, allows for information sharing 

and strengthens our ability to identify, investigate, prevent, and report fraud, waste, and abuse 

affecting the FEHBP. 

Among various governmental efforts, the Federal government established the Healthcare Fraud 

Prevention Partnership (HFPP) to improve the detection and prevention of healthcare fraud. 

BCBSA and several of our member companies are active participants in the HFPP. We support 

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the HFPP for bringing together a diverse population of fraud management, control, and 

enforcement parties to identify areas of potential risk posed by healthcare fraud and abuse. 

We support Congress' desire to establish explicit authority for HFPP and its activities, better 

equipping them to define the rules and responsibilities of its members and expand the scope of 

allowable activities to address more in the spectrum of fraud and abuse in our healthcare 

system. As Congress takes steps to codify the HFPP Charter, we recommend the following 

improvements to help the Partnership fulfill its objectives: 

While completed studies of existing abuses have demonstrated some success in 

returning dollars to plans participating in a particular study, the benefits of these studies 

have not been leveraged nationally. We recommend establishing improved mechanisms 

to share learnings so all participants are aware of the lessons from the studies and can 

take action to address similar issues. 

In addition, the Medicare and Medicaid programs have significant clout and can set a 

national direction among the provider community for fraud and abuse. However, the 

HFPP appears to be prohibited by its Charter from advising these programs of the 

schemes it identifies, limiting its overall impact. If, instead, the HFPP were mandated to 

share such information with Medicare and Medicaid, fraud detection and prevention 

lessons learned from the HFPP could spread more widely in both the public and private 

sectors. If such a Charter change is made and produced positive financial results, 

additional funding for the HFPP may make financial sense, both for the public and 

private sectors. 

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Finally, clarifying the exceptions to sharing PHI/PI I in fraud-related matters under HIPAA 

would improve collaboration and cooperation of those who may be afraid to share 

important data due to a lack of understanding of allowed exceptions. This action along 

with some kind of good faith provision to protect employees engaged in fraud-related 

work when sharing protected information may remove such roadblocks. 

"Gag" Clauses 

Another key step to improve healthcare is ensuring that consumers have the necessary 

information to make informed decisions about their care. While not a practice of the FEHBP, 

some contracts between pharmacies and purchasers (i.e., insurance companies, pharmacy 

benefit managers, and/or employers) include restrictions or "gag clauses" that prohibit 

pharmacists from informing consumers that the drugs they want could be purchased at a lower 

cost if the consumers paid out-of-pocket rather than purchasing through their insurance plan. 

For example, if a customer's health plan has a $20 copayment for a medication, but the plan's 

negotiated cost of the drug at the pharmacy is $10, because of a gag clause the pharmacist 

could not advise the customer that he or she would save $10 by paying for the drug out-ofpocket. 

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BCBSA does not support the use of gag clauses and is unaware of any Blue Cross and Blue 

Shield company or contracted pharmacy benefit managers (PBMs) that have gag clauses in 

place with pharmacies. Furthermore, BCBS companies using major PBMs like Prime 

Therapeutics, CVS Caremark and Express Scripts do not report use of these gag clauses. The 

use of these gag clauses is, in fact, not very prevalent. 

We commend CMS for taking a tougher position on gag clauses, as noted recently in a letter to 

health plan sponsors in May clarifying that any form of gag clauses are unacceptable and 

contrary to their efforts to promote drug price transparency and lower drug prices. We also 

support current Medicare Part D rules that call for a beneficiary to receive a covered medication 

for the established copayment or cost-sharing, unless the negotiated cost of the medication is 

lower. 

BCBSA supports legislation to ban gag clauses and any prohibitions on allowing pharmacists to 

make information about cost savings known to the beneficiary at the point-of-sale. To the extent 

that some in the industry include such clauses in their contract, consumers may be deprived of 

information that will help them make prudent decisions when paying for prescription drugs. With 

this is mind, we would also encourage pharmacists to advise patients on generic substitution 

and alternative medications so long as this is done in direct communication with the dispensing 

physician. 

Full transparency is critical for consumers to have the necessary information to make choices 

that work best for them. It also is important that pharmacists advise consumers to consider the 

impact of not using insurance coverage to pay for prescriptions. While certain beneficiaries 

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might pay lower out-of-pocket costs on a given prescription, drugs purchased outside of their 

insurance benefit will not count toward the beneficiary's deductible or maximum out-of-pocket 

(OOP) limits which may reduce the value of their insurance coverage. 

While BCBSA is fully committed to ensuring individuals receive their medications at an 

affordable price, another trade-off with out-of-pocket payments is the potential health risk to the 

member. BCBS companies and PBMs have systems in place that check for potentially harmful 

drug interactions, but prescriptions purchased without insurance will not be in the system. 

Similarly, a company cannot help a member with medication adherence if it does not know that 

a member is on a particular drug. 

For example, FEHBP operates a Medication Therapy Management program, working with 15 

pharmacists to review prescriptions against a member's medical records and interact directly 

with members to make sure they are getting the best medical care. This program has proven to 

be effective in improving quality for members through meaningful and timely interactions and 

generating savings for the FEHB program and the Federal government. For example, in 2017 

the program contributed to a 21 percent increase in preventing the dispensing of antibiotics for 

adults with acute bronchitis, consistent with established standards of care. 

Thus, while we support elimination of gag clauses, we believe that pharmacists should also 

inform consumers of the potential risks of not using their drug coverage so that they can make 

more informed decisions. 

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36069.059

Other Key Prescription Drug Policy Issues 

BCBSA applauds the committee for holding this hearing and seeking this opportunity to improve 

the delivery of healthcare. We support these efforts to drive the healthcare system to higher 

quality, lower costs and improved access to care for everyone. In line with these goals, more is 

needed to ensure that people have timely access to safe, effective and affordable cutting-edge 

prescription medicines when they need them. BCBS companies across the United States have 

been working to move to value-based and outcomes-based arrangements for prescription 

medicines to achieve improved quality at lower cost. Based on these experiences as well as 

BCBS companies' generations of healthcare experience and commitment to ensuring their 

customers' health needs are met, BCBSA has identified four key strategies to address 

escalating prescription drug costs and ensure that people have timely access to safe, effective, 

cutting-edge prescription medicines and their generic equivalents at the most affordable price, 

and in the right setting. These include: 

1) Reducing barriers that limit competition and consumer choice. Currently, significant 

barriers hinder patients' timely access to affordable, safe, effective and cutting-edge 

prescription medicines and their generic equivalents. Promoting competition and 

consumer choice will make prescription medicines more affordable. 

2) Promoting greater transparency and sharing of information regarding the pricing 

of prescription medicines. Understanding how drug prices are currently established is 

a necessary step in discussing any policy options that are meant to address the 

unsustainable rate of rising prices. There should be transparency regarding the pricing of 

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prescription medicines. Specifically, information about a drug's price and its 

effectiveness should be widely available to the public. It is also important that health 

insurers know which new drugs are coming into the pipeline. This allows health insurers 

to work with doctors and pharmacists in planning and in working to ensure there are 

ways to get prescription medicines to patients at the most affordable cost. 

3) Providing medical and healthcare professionals with the tools they need to 

support patient education and adherence. BCBS companies support policies that 

give medical professionals the tools they need to educate and support patients in taking 

their prescription medications as directed. Unfortunately, nearly three out of four people 

report that they do not always take their prescription medicine as directed. Addressing 

this problem would improve patients' health and safety, prevent adverse side effects and 

unnecessary hospitalizations, and, as a result, help to rein in costs. 

4) Promoting additional regulatory changes that help patients get the right 

medicines for them, at the most affordable prices. BCBS companies believe that a 

number of regulatory adjustments can be made to increase competition and improve 

patient access to affordable prescription medicines, such as the off-label use of 

prescription drugs is regulated by the FDA, modifying drug marketing guidelines to 

improve transparency around pricing and effectiveness, and increasing patient access to 

more affordable medicines by allowing generic drug manufacturers access to brandname products. 

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More information on these recommendations can be found in our recently published BCBSA 

white paper, "Ensuring Patient Access to Safe. Effective and Affordable Prescription 

Medicines."1 

Again, we commend the committee for taking on these important issues as it is critical that all 

stakeholders work together to ensure the affordability of healthcare for all Americans. Achieving 

this important goal will require the public and private sectors to collaborate to develop solutions 

that benefit patients and the entire health system. 

Again, thank you for the opportunity to testify today and your leadership in seeking opportunities 

to improve healthcare. 

' "Ensuring Patient Access to Safe, Effective and Affordable Prescription Medicines," 

https://www.bcbs.com/sites/defaultlfiles/file-attachments/page/DrugPricing White Paper 11 0317.pdf 

11 
86 

Mr. BURGESS. Thank you. 

Thank you, Dr. Yoder, and thanks to all of our witnesses for your 

testimony. So we will move into the question-and-answer portion of 

the hearing. And I would actually like to defer my questions until 

later in the hearing and recognize the vice chair of the full committee, Mr. Barton of Texas, 5 minutes for questions, please. 

Mr. BARTON. Thank you, Mr. Chairman, I am very honored and 

flattered to take your question time at this time. I sincerely mean 

that. 

First, I want to ask unanimous consent, Mr. Chairman, to place 

into the record statements of support for the ACE Kids Act. We 

have almost two dozen national groups that are supporting the 

draft bill in its current form, and I would like to put that in the 

official record. 

Mr. BURGESS. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. BARTON. Thank you, Mr. Chairman. 

Mr. Merrill, I want to thank you for coming up from Fort Worth 

for your testimony. I want to thank you for all the years you and 

your national group that you are the president of this year have 

supported us and helped us to refine the bill. Can you tell the subcommittee—and I don’t think you said this in your opening statement—what percent of Medicaid-eligible children meet the eligibility requirements of the ACE Kids Act? 

Mr. MERRILL. I would have to probably get that specific number 

for you or percentage for you. It is definitely a small percent. 

Mr. BARTON. I am told it is around 1 or 2 percent. 

Mr. MERRILL. That is close to the number. I just wanted to make 

sure I stated an accurate number. 

Mr. BARTON. All right. This is a friendly hearing. We don’t require total specificity. 

Mr. MERRILL. Just want to answer it as best I can and correctly. 

Mr. BARTON. All right. Now, to the best of your knowledge, this 

small percentage of Medicaid-eligible children that would qualify 

for ACE Kids, what is a seat-of-the-pants estimate about the cost 

to Medicaid by that 1 or 2 percent? 

Mr. MERRILL. Yes, again, I would have to get the number for you. 

I don’t have the number off—— 

Mr. BARTON. If I were to throw out 30 percent, would you strongly disagree with that? 

Mr. MERRILL. Percentagewise, I think it is up close to 40 percent. 

Mr. BARTON. Forty percent. 

Mr. MERRILL. In terms of an actual dollar amount, I would have 

to get that number. 

Mr. BARTON. So here we have a situation where, thankfully, of 

the 37 million eligible Medicaid children, there are not very many 

that have these complex medical conditions. But for those that do, 

they take a hugely disproportionate share of the cost. 

Mr. MERRILL. That is correct. 

Mr. BARTON. So, if we can do something that provides better 

care, more comprehensive care, and actually saves money, that is 

a win-win. Would you agree with that? 

Mr. MERRILL. I would absolutely agree with that. I think everyone does win. I would say all in, all win, frankly, on ACE Kids. I 

87 

think that will matter greatly for these families, these children. It 

will matter to the State programs in saving Medicaid dollars and 

improving care and outcomes for these kids, and, as I said, all in, 

all win. 

Mr. BARTON. Are you aware of any provider organization that actually provides services, whether it be doctors, therapists, hospitals, anybody in this country, that opposes the ACE Kids Act? 

Mr. MERRILL. I am sorry? 

Mr. BARTON. Are you aware of anyone that is actually providing 

services to these eligible children that opposes this bill? 

Mr. MERRILL. I think that any time a new bill or approach to 

care is introduced, organizations will have concern: What does it 

mean for me? 

And based upon the original draft of 3 years ago and all of the 

work that has gone to try and address some of those concerns, the 

current bill, as it is reflected, I do believe, addresses most, if not 

all, of those concerns from those who might not originally have 

been fully in support of. 

Mr. BARTON. You can tell that you have been president of a national organization. I am throwing you softballs, and you are being 

very ecumenical. The answer is no, there is no national organization that provides care—now, there are some opponents but not of 

the people that are providing the care. To my knowledge, there are 

none. 

Mr. MERRILL. Fair enough. 

Mr. BARTON. Now, I want to ask Mr. Salo, you have mentioned 

two principles that legislation that actually works should have. You 

mentioned flexibility. Does ACE Kids have flexibility? 

Mr. MERRILL. It absolutely does. 

Mr. BARTON. I am asking the Medicaid director. 

Mr. SALO. I got this one. I want to be careful about not spending 

too much time speaking to the actual structure of the current 

version because, as we have said, this legislation has evolved significantly over time. But our reading of the current version does 

seem to allow for greater flexibility. I think previous versions seem 

to say that States that were heavily invested in managed care as 

a delivery mechanism would actually get carved out, wouldn’t be 

able to take advantage of this. 

Mr. BARTON. It is voluntary on a State basis—— 

Mr. SALO. If it is driven by the State, if it allows a State either 

that is heavy managed care or managed fee-for-service, like in a 

Connecticut, or something in the middle like Massachusetts with 

ACOs, as long as it allows the State to be able to design that in 

a way that meets not only the delivery system in their State but 

also meets the needs of the patients in that State. 

And I think one of the other key issues is trying to get a handle 

on exactly how you define the population that is affected. As Mr. 

Merrill said, there is no Federal definition of this, and so the question is, are you talking about 2 million kids? Are you talking about 

50,000 kids? You had research that talked about 8,000 kids and 

how that was effective. It is going to be important to allow this to 

be flexible enough for the State to figure out, how can we make 

this work? Because if it creates silos within what a State is trying 

to do, that is going to create conflict, and that is not sustainable. 

88 

Mr. BARTON. Mr. Chairman, my time has expired. Next time I 

would ask unanimous consent if I could ask the question and then 

answer it myself so that I could make sure I get the right answer 

I want. 

Mr. BURGESS. You usually do. 

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

Mr. BURGESS. Thank you. Thanks to the vice chairman. The 

chair now recognizes the ranking member of the subcommittee, Mr. 

Green. I would ask just 5 minutes for your questions, please 

Mr. GREEN. Thank you, Mr. Chairman. 

And I am following my friend Joe Barton that we would all like 

to be able to answer our own questions. 

So, thank you, thank the whole panel for being here today. 

Mr. Chairman, I would like to ask unanimous consent request on 

behalf of Ranking Member Pallone entered into the record letters 

from the Medicare Payment Advisory Commission, MedPAC, and 

Medicaid and CHIP Payment Access Commission, MACPAC, concerning their request for legislation to ensure both commissions can 

access drug rebate data for their respective analysis. Ask unanimous consent. 

Mr. LATTA [presiding]. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. GREEN. Thank you, Mr. Chairman. 

Mr. Merrill, thank you for being here today and sharing your expertise as a leading children’s hospital, and, of course, you know 

where I am from. I have been involved with Texas Children’s Hospital since I was a young State legislator in the seventies, but Cook 

Children’s Hospital, I am glad my family hadn’t had to take advantage of the Cook Hospital to treat out-of-State patients. In fact, in 

your testimony, you know that Cook Children’s treated children 

from more than 35 States last year. 

As you know the State-by-State nature of Medicaid program has 

made it difficult to coordinate care across State lines. The same 

State innovation and flexibility that makes Medicare/Medicaid able 

to respond to unique needs of the State’s population can be the 

characteristics. I am hopeful that ACE Kids Act will help provide 

Cook Children’s overcome this issue and ease some of the burden 

families are facing today when they are trying to coordinate your 

child’s care. Would you please discuss difficulties that may arise 

when you are providing care for a medically complex child from out 

of State? 

Mr. MERRILL. Yes, there are, as most of you know, some States 

that do not have children’s hospitals or some of the high-level care 

that is offered in some of the other States. And so, as a result, we 

do get referrals, as I mentioned, from a number of States. That is 

true for Texas Children’s. That is true for a number of children’s 

hospitals. 

I would give you probably two examples. We had one particular 

patient that was referred to us from a neighboring State that did 

not have the high-level children services for bone marrow transplant services, and it becomes a negotiation and a long drawn-out 

discussion with the Medicaid program in those States. Those discussions can last anywhere from 2 weeks to 3 months. And in this 

89 

particular case, it took well over 2 months for us to get this patient 

approved for the bone marrow transplant that they needed. 

There is another example of a patient from up in the Midwest 

area who was referred to Cook Children’s for some services that we 

offer that only a couple of other children’s hospitals offer. It is a 

medically complex child, and it took us 3 months to negotiate a single case agreement. And in the end, we were never able to reach 

an agreement, and we do not know what happened to that patient. 

So it puts at risk the health of these patients. The frustration, 

the anger from these parents, who really want to care for their kid, 

and certainly us on the receiving end, who want to deliver that 

care, all of us become very frustrated. And it is very difficult; it is 

time-consuming. And I believe that ACE Kids will allow us to 

streamline a lot of that effort so that we can get these kids quicker, 

sooner, to the right kind of care that they need. 

Mr. GREEN. Thank you. 

Mr. Salo, how can we disseminate, encourage more widespread 

adoption of best practices and care for children with medical complexity more effectively across State lines? 

Mr. SALO. So I think that is a key function that our organization 

can provide, working in close tandem with CMCS, with Center for 

Medicaid and CHIP Services. I think we have acknowledged that 

in the case of, when you are talking about patients who are crossing State lines and dealing with jurisdictional issues like that, 

there is clearly a need for additional best practices, additional guidance, additional tools to make that work well. And I think we have 

been open in conversations with my colleagues here, as well as our 

friends at HHS, about how can we do that, how can we figure out 

what works, both in terms of—well, it is mostly, I think, finding 

that balance between, how do you make the process as easy as possible for the family while also making sure that the cross-jurisdictional issues are respected and that we are not obligating an individual State to another State’s decision or to individual providers 

who are setting up a silo that perhaps is not in the best interest 

of the population as a whole? 

I think we can get there. I think there is a lot of potential for 

best practices in this, absolutely. 

Mr. GREEN. Mr. Chairman, I know I am out of time, but I want 

to thank our witnesses. And this is a piece of legislation—I think 

it is important that we move on this. Thank you. 

Mr. LATTA. Well, thank you very much. The gentleman’s time 

has expired and yields back. 

And the chair now recognizes himself for 5 minutes. 

Mr. Cunningham, if I could start with you. While preparing for 

today’s hearing, I heard from a local, independent-living organization in northwest Ohio asking for my support of the EMPOWER 

Care Act. The center connects people with disabilities to programs 

and services that are necessary to achieve and maintain independence in the community. 

Without the Money Follows the Person, the MFP, Program, this 

center would not be able to hire staff to serve as transition coordinators and help individuals maintain independence outside of nursing facilities. Since 2008, this local program has achieved 524 total 

90 

transitions, and 77 percent of those transitions have reached 365 

days of independence. 

Furthermore, in the State of Ohio in 2017, the average annual Medicaid savings for individuals utilizing MFP was over $39,000 

per person. How have the cost savings associated with the program 

been utilized for the benefit of your State Medicare population? 

Mr. CUNNINGHAM. Sure. So, Wisconsin is fortunate to have a 

very robust home and community-based services program, and the 

way we have gotten there is through utilizing MFP and other resources to create some innovative practices. And we look at that 

and some of the practices, like housing counseling and other things 

that we developed through MFP, we have now included in our 

HCBS package of benefits because they have been shown to be 

proven effective in making sure people relocate. 

And we see a reduction in cost. The average nursing home cost in fee-for-service is about $5,256 per month. Our family care and 

HCBS programs have a PMPM of $3,200. So it is in our interest. 

MFP has also allowed us to, as we have expanded our HCBS 

services, to move people off the waitlist, and we are on the cusp 

of eliminating the waitlist for all of the people that need HCBS 

services. 

Mr. LATTA. Let me follow up. Are there any challenges the States 

face during the transitions that could be better addressed in reauthorization? 

Mr. CUNNINGHAM. I think the flexibility, again, is very important. I think housing continues to be a challenge. The housing 

counseling that is done, we developed a database of available 811 

housing vouchers through MFP. So I think just continuing the 

funding, I think the certainty of having MFP is also important because some of these programs that we have going, take 2, 3 years 

to test out, to see if they are cost-effective in moving forward. So 

I think that is what I would ask for now is to make sure this there 

is certainty there so we can keep some of these innovative practices 

going. 

Mr. LATTA. Well, thank you. 

Mr. Salo—am I pronouncing that right, is it Salo? 

Mr. SALO. Salo. 

Mr. LATTA. Salo? 

Mr. SALO. Yes, rhymes with ‘‘halo.’’ 

Mr. LATTA. Let me follow up, because in addition to the letter of 

support I received for the MFP Program, I also heard from an Ohio 

mother who has great concerns with the program. She cited that 

MFP forces individuals with severe and profound intellectual and 

developmental disabilities into a one-size-fits-all care model rather 

than allowing the patients and families to choose a care setting 

that best fits their own medical needs. 

Do you believe there are gaps in the program that should better 

account for individuals with complex medical and behavioral 

needs? 

Mr. SALO. I know that there are differences in philosophy about 

the nature of the spectrum of institutional versus non-institutional 

care and some who come down along the lines of the least restrictive, as Olmstead is always better, but I think that, from the State 

perspective, it is really critical to be mindful and respectful of the 

91 

individual or the family decision to figure out what is the setting 

that is best for them. 

In most cases, that will be in their home or in their community. 

But we certainly know there have been lots of conversations over 

the years with—so, for example, parents of adult children with severe developmental or intellectual disabilities, whose kids have 

been in settings for a long time and are very fearful about having 

that changed. I think we need to be very, very mindful about not 

abruptly changing settings for people who are not ready for that. 

But I think for most populations that we serve in the long-term 

care arena, the clear and undeniable trend is to move away from 

institutional and toward home and community-based settings. 

Mr. LATTA. Thank you very much. My time is expired. And the 

gentle lady from California is recognized for 5 minutes. 

Ms. MATSUI. Thank you very much, Mr. Chairman. 

And I want to thank all the witnesses today for being here. I am 

pleased that we are hosting this hearing to discuss important opportunities in Medicaid and potential ways to improve transparency in our healthcare system. 

I want to follow up on the EMPOWER Act. It is really a strong 

example of the importance of supporting Medicaid. The Money Follows the Person, MFP, is particularly important to seniors in institutional settings, such as nursing homes, who may be seeking care 

or services while still being surrounded by familiar faces and 

places. 

And I think we all understand how important it is to look at this 

somewhat individually too, that there is not a one size fits all here 

as we move forward. And I really believe that each of us understand the concept of how important it is. And I also believe there 

are challenges here too. 

I am interested also to hear more about the changes being made 

to the institutional residency period requirement. I understand 

that it will be decreased from 90 days to 60 days. How do you think 

changing the requirement will impact beneficiaries of the MFP? 

Mr. Cunningham? 

Mr. CUNNINGHAM. Changing from 90 days to 30 days for the—— 

Ms. MATSUI. Ninety days to 60 days. That period requirement. 

Mr. CUNNINGHAM. I am sorry. Could you repeat that? 

Ms. MATSUI. OK. There are changes being made to the institutional residency period requirement. It will be decreased from 90 

days to 60 days. I understand that that will give a lot more flexibility and allow other patients to be able to be involved in this. Is 

that correct? 

Mr. CUNNINGHAM. Yes. Yes, that is correct. 

Ms. MATSUI. OK. Now, there have been multiple studies showing 

the MFP program can result in significant cost savings to States. 

And I think it is really important that Mr. Salo noted that the program expired in 2016, which forced States to scale back the program. And I am really concerned that this may have had unfortunate consequences for States and patients. Can you give me some 

examples here, with the challenges that might have occurred here? 

Mr. CUNNINGHAM. Yes, so, as I mentioned, as many of the programs that are ongoing, like our nursing home community specialists, as many States are running out of grant funding, they are 

92 

having to wind down those programs. And that is impacting their 

ability to have those innovative processes to relocate people. 

So I think a number of States have actually already expended 

their full grant amount, and I think in 2020 is when the full expenditures have to be completed. So, without an extension, even at 

the State level, you start to look at these programs and how do you 

maintain the staff to support these programs in the future once 

your grant funding goes away? 

Ms. MATSUI. Certainly, thank you. 

And I want to talk a little bit about gag clauses. It is encouraging that this committee is taking steps to begin tackling the 

issue of transparency in our healthcare system. My understanding 

is that gag clauses impact the pharmacies, as well as the patients. 

Mr. Chancy, would you like to comment on the impact gag 

clauses have on both patients and pharmacies, especially in relation to pharmacy benefit managers? 

Mr. CHANCY. Yes, I would love to. The gag clauses, actually, they 

do have an impact on both. The patient, our relationship is based 

on trust, and they depend on us to bring and help them maneuver 

through the intricacies of their healthcare, specifically with their 

prescription benefits. When we are not able to give them options, 

then it kind of puts us in a situation where we aren’t able to give 

them information that we feel like they need. 

If we do, then we are running the risk of being in violation of 

contracts that sometimes we didn’t even know that we were in violation of. 

Ms. MATSUI. Right. 

Well, Dr. Yoder and Mr. Chancy, how well informed do you think 

the public is about gag clauses? Do you think the patients know to 

ask about prices at the counter? 

Mr. CHANCY. They are not very informed, and I think that because of the way the contracts have been written, not many people 

have talked about them. I think they are seeing more in the news 

now, and there is a little bit more interest, but it is nowhere near 

where it needs to be. 

Ms. MATSUI. OK. If this legislation, Mr. Chancy, in front of us 

is passed, will pharmacists start telling patients about their alternatives? Or do you think there will be a need to have some sort 

of awareness or education campaign? 

Mr. CHANCY. I think pharmacies will, and I think a lot of pharmacists currently are doing that, but I think an awareness campaign would be fantastic. 

Ms. MATSUI. OK. Thank you, and I yield back. 

Mr. BURGESS [presiding]. The chair thanks the gentlelady. The 

gentlelady yields back. 

The chair recognizes the gentleman from Kentucky, Mr. Guthrie, 

the vice chairman of the Health Subcommittee, 5 minutes for questions. 

Mr. GUTHRIE. Thank you, Mr. Chairman, and for the Ranking 

Member, for holding a hearing on the EMPOWER Act, H.R. 5306, 

which would reauthorize the Money Follows the Person Program. 

I was very pleased to introduce this bill with my colleague as bipartisan with Debbie Dingell. 

93 

First Mr. Salo and Mr. Cunningham, as you know, H.R. 5306, as 

currently drafted, would extend the Money Follows the Person for 

5 years. While this is ideal, would a 1-year extension be helpful? 

Mr. SALO. A 1-year extension, I would argue, is better than letting it die. If those are the options? 

Mr. GUTHRIE. Those are the options. Well, I don’t know if those 

are the options, but if that is the option, then you would rather 

have a 1-year—— 

Mr. SALO. A 1-year extension is better than letting it die. A 1- 

year extension is not ideal. That is not enough time. If you understand how State government works, you know that when programs 

are dependent on Federal funding, or any source of funding, if you 

don’t have long-term certainty about where the money is coming 

from, how much is coming, and the direction and speed which it 

flows, you have uncertainty. When you have uncertainty, you 

clamp down, you tighten up, and you stop spending. You go really, 

really conservative. 

And, if you get a year and you don’t know what is going to happen that following year, you are probably not going to spend that 

money because you are going to be very, very cautious, and that 

is extremely disruptive to the people who need this. So the longer 

the extension, the better. I would argue making it permanent if you 

can, but 5 years is better than 1. One year is better than just letting it die. 

Mr. GUTHRIE. Point well taken. 

Mr. Cunningham? 

Mr. CUNNINGHAM. Yes, I reiterate what he said. I think the other 

thing to consider is that, when States see only a 1-year extension, 

you start to look at one-time type of things that are not as effective 

as really driving the long-term change that we want to use this 

funding for, so, yes. 

Mr. GUTHRIE. Thank you. I said for both. The point is well taken. 

Mr. Cunningham, through the Money Follows the Person Program, over 88,000 individuals have transitioned from nursing 

homes and other institutions back to their own homes? I know 

there seems like a lot of support in the room for this, and I am very 

supportive of that as well. 

What have we learned through the MFP program and about how 

the quality of life improves for individuals when they transition 

back to their homes and communities? 

Mr. CUNNINGHAM. Sure, the MFP program does require a quality-of-life survey, and, at least in Wisconsin, when we ask if they 

are satisfied where they live, that satisfaction went from 68 percent to 72 percent. And then when we asked people that have 

transitioned to MFP if they like where they currently live, it went 

from 62 percent in the institution to 91 percent in the community. 

Mr. GUTHRIE. People like to be home. And it is even more convenient and more helpful for the family members, too, to spend 

time with them and see them, more than in an institutional setting. 

Mr. CUNNINGHAM. It allows them to become a participating member of—— 

Mr. GUTHRIE. Well, there certainly is an appropriate role for institutions, but that is absolutely right. 

94 

OK. Again, Mr. Cunningham, of the 44 States that have recently 

participated in the Money Follows the Person, at least 10 States 

have exhausted their funds and stopped transitioning new participants to the community. By the end of the year, all remaining 

States will stop transitioning new participants through the program. Without an extension of this program, will we lose progress? 

Mr. CUNNINGHAM. Yes. 

Mr. GUTHRIE. It is a given, huh? 

Will more seniors and people with disabilities be forced into costly institutional placements? 

Mr. CUNNINGHAM. Yes. 

Mr. GUTHRIE. And then has the recent uncertainty hurt transition efforts? 

Mr. CUNNINGHAM. Yes. 

Mr. GUTHRIE. You are going through that. 

And then one extra one. You have spoken about the importance 

of supporting people with disabilities to transition from institutional settings to the community. What has Wisconsin done to promote these transitions, both using MFP dollars and making use of 

Medicaid as a whole, and how are individuals counseled in the 

transition? 

Mr. CUNNINGHAM. So one of the big things we do is a community 

living specialist. And through the diagnostic service information 

on—through the MDS at nursing homes, there is a section Q that 

clearly asks the recipient, do you want to relocate into the community? And so we review and have set up a system where this information flows to our community living specialists in the ADRCs. 

And then they reach out to these people to discuss community options. So this is a cycling process. And so people that want to move 

out in the community are contacted and then worked to develop 

those community resources to move them in the community. 

Mr. GUTHRIE. OK. Thank you so much. 

Thank you for your effort, Mr. Chairman. I really appreciate your 

effort in bringing this today, and I will yield back my time. Thank 

you. 

Mr. BURGESS. The chair thanks the gentleman. The chair recognizes the gentlelady from Florida, Ms. Castor, 5 minutes for questions, please. 

Ms. CASTOR. Well, good morning, and thank you, Mr. Chairman, 

for calling this hearing. 

Today I am thinking a lot about the children with complex medical conditions and their families. On behalf of the families across 

America who are faced with a complex condition that their child 

has, I want to thank everyone on this committee for moving the 

ACE Kids Act forward. It hasn’t been easy. This has been a 

multiyear proposition. I have been working on this bill since the 

113th Congress with Congressman Joe Barton, who has been the 

stalwart cosponsor and sponsor here, along with our partners: 

Jamie Herrera Beutler, Gene Green, Anna Eshoo, and Dave 

Reichert. 

But the ACE Kids Act in this Congress has over 100 cosponsors, 

bipartisan, including a number of my Energy and Commerce colleagues, and I want to thank them, specifically Representatives 

Ca ́ rdenas, Clarke, DeGette, Engel, Kennedy, Peters, Rush, BiliVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00100 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
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rakis, Costello, Guthrie, Harper, Lance, Long, and Olson. And I encourage our other colleagues to sign on to the bill as well. And 

thank you for your steadfast commitment to care for these children. 

We also have a number of patient and stakeholder groups supporting the ACE Kids Act that range from the Children’s Hospital 

Association to the March of Dimes to the American Academy of Pediatrics, and many more. Thank you all for consistently standing 

up for children with complex medical conditions. 

And I want to also take a moment to thank the committee professional staff for their dedication to families and the hours they 

have spent working on this bill in a bipartisan fashion, especially 

Rachel Pryor and Samantha Satchell on the Democratic side, and 

Josh Trent and Caleb Graff on the Republican side. 

Additionally, this bill would not be where it is today without the 

stellar work of my legislative director, Elizabeth Brown, and Representative Barton’s staffers: Krista Rosenthall, Gable Brady, and 

Jeannie Bender. 

But it is really the families who are the heroes here. It is the 

families of these kids that have explained to Members of Congress 

on both sides of the aisle how important it is to have coordinated 

care. I became an advocate for the children and families that this 

bill will help after spending significant time back home in Tampa 

at the St. Joseph’s Children’s Hospital Chronic Complex Clinic that 

was started 16 years ago by a wonderful pediatric critical care doctor named Dr. Daniel Plasencia. 

The ACE Kids Act is somewhat modeled after the St. Joseph’s 

Children’s Hospital Chronic Complex Clinic and the 700 kids and 

families that they serve. But, Mr. Merrill, you know this is the idea 

of home health, a medical home for these kids, is not unique. It is 

being done, and we need to take it to the national level. 

The families I met with over the years have shared with me 

what they have gone through to get the proper care for their kids. 

The care that they were receiving was often fragmented and uncoordinated. But, most importantly, we have got to focus on making 

sure the kids have a better quality of life. And we think through 

this bill, we will be able to do that. 

Mr. Merrill, you might remember Tish West testified a couple of 

years ago, and she said—I met her daughter Caroline, who has 

been treated at St. Joe’s—she said: In the beginning of Caroline’s 

life, I used to carry around these gigantic notebooks full of medical 

records and everything else so that we went from doctor to doctor, 

she would have to explain what was going on and what her illnesses were. But at this clinic, at this medical home now, they 

have the medical records; they are all electronic; everyone knows 

Caroline; they know what is going on with her. 

Tish said: It is just a real collaborative effort, and she is much 

healthier as a result of that. 

Do you think we are going to be able to make progress for more 

families if we pass the ACE Kids Act? 

Mr. MERRILL. I absolutely do. And our own experience in Texas 

with our STAR Program, which is somewhat equivalent of ACE 

Kids, we actually have care coordination clinics and medically complex clinics that would mimic a lot of structure that we are contemplating in ACE Kids. 

96 

I would give you one example of, just recently—as we have 9,000 

children that are signed up in our STAR kids; these are medically 

complex kids—and the Cook Children’s Health Plan. And so we 

took the most complex children of those 9,000, and our care coordinators, for the first 2 weeks, spent numerous times on the phone 

with these families and made home visits to these families to look 

at not only what their healthcare needs were but their social needs. 

There was one particular example where a child and family had 

been for months and months carrying their child up the steps because they had no wheelchair ramp for the child in the wheelchair. 

We put a wheelchair ramp in for these families. 

And so this care coordination and this care plan is, it is tailored 

for these specific families. And when it is tailored, we are able to 

anticipate needs, not just their medical needs but other social 

needs, and make it so much more easier for these families to navigate what can be a complicated system and help these children remain healthy. 

I will just give you one quick example. This was actually a couple 

of weeks ago. We had a mother of one of these medically complex 

children call her case manager—and by the way, these case managers, as you well know, have these incredible close relationships 

with these families. There is respect. There is great communication 

going on. 

And this parent was distraught that she was getting close to the 

weekend and she wasn’t able, through a series of events, to get a 

prescription filled for her child that was much needed for that 

weekend, called up our case manager. Our case manager calmed 

the mom down, because of that relationship, took care of the prescription order from the physician, went to the pharmacy, picked 

up the drug, and delivered it to the home for this family, avoiding, 

by the way, an ER visit, guaranteed, and probably an in-patient 

admission. So that is the kind of activity that we anticipate under 

ACE Kids, the kind of work that will make life easier but keep 

these kids healthier, keep them out of the hospital, keep them closer to home, and I think that is a very positive thing for these families and their children. 

Ms. CASTOR. Thank you very much. 

And, Mr. Chairman, I would like to ask unanimous consent to 

submit for the record a letter from St. Joseph’s Children’s Hospital’s CEO in favor of the bill. 

Mr. BURGESS. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

The gentlelady’s time has expired. 

The chair now recognizes the gentleman from Virginia, Mr. Griffith, 5 minutes for questions, please. 

Mr. GRIFFITH. Thank you very much, Mr. Chairman. 

Mr. Chancy, I am going to ask you a couple questions. You mentioned that community pharmacists have little negotiating power 

when it comes to contract provisions set by the pharmacy benefit 

manager, and we have seen that in PBMs; we have seen that before. 

Can you explain how smaller and rural community pharmacies 

are disproportionately affected by this inability to effectively negotiate and how that can, in turn, negatively impact patients? 

97 

Mr. CHANCY. Yes. And most of our pharmacies are in rural Georgia, and like, for example, one of our pharmacies, 25 percent of our 

business is through one PBM. And if they change their reimbursement model or whatever, it impacts us in a great way. 

And so the lack of getting on that contract or not getting on that 

contract depends on whether we, as a business, survive. One of the 

concerns in Georgia is we have four counties now that have no 

community pharmacies because of some of this, that they are dealing with. 

Mr. GRIFFITH. And not just that, but can’t it affect the patients 

as well? So I know the committee is tired of hearing about 

Clintwood and Haysi, but if you look at them on a map, they look 

like they are only about 5 or 10 miles, maybe 12 miles apart. But 

there is a big mountain in between them, and the mayor of Haysi 

told me one time it takes him an hour; he always plans on an hour 

to get to any of the meetings he has to have in the county seat of 

Clintwood. 

So, if you are the community pharmacy in Haysi and the PBM 

takes you off, that patient is now going to have to drive to 

Clintwood to get their drugs and rely on somebody that—because 

most of us rely on our pharmacist, our community pharmacist. Is 

that not also a problem? 

Mr. CHANCY. It is. And CVS Caremark, Caremark being the 

PBM, many times they require their patients to go to one of their 

pharmacies. And in rural Georgia, there is not a CVS in every community or county, and so it compromises them with access. 

Mr. GRIFFITH. Yes, sir, I understand that. 

Beyond drug-pricing disclosures, what are some of the other impacts that gag clauses have on the pharmacist-patient relationship? 

Can you think of any? Because I can think of one. A constituent 

came to me, and we were just talking about this whole gag issue, 

and she had stumbled across, and at first, she had questions about 

her pharmacist, because originally it wasn’t considered a part of 

the formulary. So she had to pay cash for it. It cost her $17. 

And as Chairman Walden said in his opening statement, then 

they notified her it was in her formulary, and she called in her prescription, and they told her she would have to pay the copay of $50. 

So she called her pharmacist all upset, thinking that he was doing 

something goofy. Doesn’t that damage that relationship? And he 

explained to her that he wasn’t allowed to tell her that, but since 

she had found out about it, she could pay with cash if she wanted 

to. 

Mr. CHANCY. Oh, definitely. And there are some times where the 

patient is required to get the brand instead of the generic, which 

is a cheaper copay, and I think it is just the rebates or some sort 

of agreements that they have worked out. And so that impacts 

them as well. 

Mr. GRIFFITH. Attorney General Schmidt, I have some theories. 

I like listening to the testimony and listening to folks, and you did 

a great job, and you got some great people signed on to these letters. But one of the concerns that I might have if we have—and 

there is an answer to it, but it is going to take money and effort. 

If you have got somebody who is skilled at determining financial 

fraud, they might go into the home—let’s say the fictional charVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00103 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
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acters from ‘‘Seinfeld,’’ George Costanza’s parents, who were always fighting with one another—now, if one of them was the patient, somebody who is a financial investigator might automatically 

assume that there is some kind of abuse going on there, and they 

have been having that relationship that way, as the fictional characters, 50 years or so. 

And so aren’t you going to have to train folks to be able to distinguish between—financial fraud is different than physical or mental 

abuse, and there is a concern, and it gets complicated. Because I 

actually had a case one time where they thought the parents were 

doing something to an infant. I know this is a little bit different, 

but the infant was failing to thrive whenever it was in the parents’ 

home. We ultimately discovered the infant was allergic to dogs, and 

they had a dog in the house. So, every time they would put it in 

the aunt’s house, the child would do better. They put it back in the 

parents’ house, and the child would fail to thrive. 

So there are a lot of complications with it, and I think that your 

financial investigators are going to have to be trained, if we give 

them this authority, and somebody is going to have to pay for that 

training, or else we will have people bringing cases that maybe 

they ought not. 

And one of my concerns there is that when you bring a case, particularly against a family member, you are yanking that family 

apart, and you are pulling that person out, and you really have to 

walk with care. What do you say about that? 

Mr. SCHMIDT. Right. Representative, certainly speaking for myself, I would be very sensitive to that concern. We see those types 

of dynamics, not just in the context of our Medicaid fraud work, but 

in the context of our broader criminal work for the State. 

So we are accustomed to dealing with those sorts of distinctions. 

And we are human, and sometimes we get it right, and sometimes 

we don’t. But I believe we do in most cases. 

I would say one thing: I can’t speak for every State. Perhaps the 

larger States with larger Medicaid Fraud Control Units do have 

distinct, financial-crimes investigators versus patient-abuse investigators. For Kansas and I think for most of the small and midsize 

States, we do not. We do have dedicated fiscal analysts who are the 

number crunchers that don’t go on and do field investigations. So 

they are purely financial. 

But with respect to our investigators in our MFCU, we have six 

sworn law enforcement officers. They are all cross-trained. They 

handle physical abuse, sexual abuse, financial abuse, as well as 

fraud. And the reason for that, under current law, is that they are 

doing those abuse cases when they occur in a healthcare facility. 

So they already have the skills; they just can’t apply them in the 

non-institutional setting. 

Mr. GRIFFITH. All right, I appreciate that, and I yield back. 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

The chair recognizes the gentlelady from Colorado, Ms. DeGette, 

5 minutes for questions, please. 

Ms. DEGETTE. Thank you so much, Mr. Chairman. 

I note that we have a number of representatives of ADAPT here 

in the hearing room listening to this, and I want to welcome all of 

99 

you. ADAPT was founded in Denver, my district, and I have 

worked with them and also the Atlantis community for many, 

many years. The Atlantis community is one of the oldest, independent-living centers in the country for individuals with disabilities, and they have really done courageous work over the years in 

educating all of us about why it is so important that we pass legislation that supports their independence and their ability to live in 

their homes and their ability to really lead the kind of productive 

American lives that everybody in this country should be able to do. 

So thank you all for coming out today. 

There are a number of pieces of legislation that they support, but 

one of them specifically is H.R. 5306, the Ensuring Medicaid Provides Opportunities for Widespread Equity Resources and CARE 

Act. And then I want to thank Congresswoman Dingell and Congressman Guthrie for sponsoring that. 

In Colorado, funding for the Money Follows the Person Program 

is aimed at facilitating the transition of Medicaid beneficiaries from 

nursing and other long-term care facilities to community-based 

services. And since we implemented this in Colorado in 2013, we 

have already transitioned 214 folks with physical, intellectual, or 

developmental disabilities, mental illnesses, and other impediments 

to really being able to live in these community-based situations. 

Mr. Cunningham, I wanted to ask you: Not only is this the right 

thing to do, but what I have heard is this actually saves money. 

Can you talk about the cost savings of programs like this? 

Mr. CUNNINGHAM. Sure. So, yes, it does. Community-based care 

is cheaper than institutional care. We see, mentioned in our nursing home fee-for-service, it is about $5,256 per member, per month 

there. And in our home and community-based services programs, 

or community-based programs, the PMPM on average is about 

$3,233. So that is a savings of about $2,022 per member that you 

are moving out. 

Given that they are numbers, there is always acuity and all this 

other stuff, but that is just a broad stroke of the estimate. 

Ms. DEGETTE. And what are some of the other benefits to moving 

folks out of nursing homes and into community-based? 

Mr. CUNNINGHAM. Well, there is a lot. We operate from the view 

of person-centered planning and informed choice. So, once out in 

the community through person-centered planning, an individual 

can really think about how they want to self-actualize their own 

life and look at, employment, look at engagement with loved ones, 

with family and community, and, quite frankly, engage in a life 

and fulfill the hopes that we all have in our individual lives. 

Ms. DEGETTE. Thank you. 

I want to talk briefly about this other bill—what is the number— 

it is a draft, the PBM gag clause prohibition, what an important 

bill that is. And I just want to talk for a minute to you, Mr. 

Chancy, about this. I have been, for about the last year, Congressman Tom Reed from New York and I have been—we are the cochairs of the diabetes caucus, and we have been leading sort of an 

independent insulin inquiry. 

And we sent letters of inquiry to the three brand name insulin 

makers about patient assistance programs and drug discount cards. 

And for a lot of these patients, these programs are a lifeline. Now, 

100 

in your testimony, you stated that pharmacists can counsel patients about alternative purchasing options in some cases, such as 

when patients don’t present a form of insurance. 

If a patient asks about ways to lower their insulin cost at your 

pharmacies, do you counsel them about patient-assistant programs 

and drug discount cards? 

Mr. CHANCY. Yes, we do. 

Ms. DEGETTE. OK. And as part of this consult, do you tell the 

patients and clients that these financial assistance programs may 

not count towards their out-of-pocket expenses such as deductibles 

and copayments? 

Mr. CHANCY. Yes, we do. 

Ms. DEGETTE. Good, that is great. 

Mr. Chairman, I am hoping, not just the PBMs, but the entire 

system of drug pricing is something we should be having hearings 

on, and we should be doing it before the end of this year. Because 

the PBMs, I mean, it is ridiculous that they tell pharmacies that 

they have these nondisclosure agreements. But really it is throughout the system. And I think we could still do it. I don’t know about 

all the rest of my colleagues here, but I was home in Denver for 

most of the August recess; that is all people wanted to talk to me 

about, was the cost of healthcare and the ridiculous cost of prescription drugs. Thanks and I yield back. 

Mr. BURGESS. Thank you. The chair thanks the gentlelady. 

The chair would remind members, we do have another hearing 

following this that is scheduled to begin at 1 p.m., and, generally, 

I am fairly generous with the time, but I am going to ask members 

to really confine themselves to the 5 minutes for questions. 

With that, Mr. Bilirakis, you are recognized 5 minutes for questions. 

Mr. BILIRAKIS. Thank you, Mr. Chairman, and I really—— 

Mr. BURGESS. Oh, wait, would the gentleman suspend? 

Mr. BILIRAKIS. Yes. 

Mr. BURGESS. I did not see Mr. Lance had ascended to the dais. 

Mr. Lance, you are recognized for 5 minutes. 

Mr. LANCE. Thank you, Mr. Chairman. 

I am not sure I have ascended to the dais, but I am certainly 

pleased to be here. 

Mr. Merrill, in your testimony, you talk at length about your involvement in the Center for Medicare and Medicaid’s innovations 

demonstration: Coordinating All Resources Effectively Award 

Demo. You wrote, collectively, these programs reduced emergency 

department visits by 26 percent and reduced in-patient days by 32 

percent. 

The first full year of operations coordinating care for these children, CARE ultimately reduced overall Medicaid costs by 2.6 percent while improving patient experience for 8,000 children. 

Mr. Merrill, can you walk us through how CARE coordination 

works in practice? I certainly think it would be helpful for the committee to hear how this process works on a day-to-day basis in this 

demonstration and how the savings and patient satisfaction are 

being achieved. 

Mr. MERRILL. Thank you for that question. I think CARE Coordination and Health Homes, as I mentioned earlier, tailor the care 

101 

needs around that child, and by doing so, we are able to create efficiencies, improve care, and alleviate the burden that these families 

oftentimes experience in navigating what can be a very complex 

healthcare environment. I think that is where the patient experience improvement comes from. 

If you look at the CARES grant, one of the things that we did 

through this, with the 10 hospitals, Cook being one of those that 

participated, is we did use a common definition. And I believe, 

again, a common definition is really important if we are going to 

make improvements in not just the care, but the outcomes and the 

patient experience. Peter Drucker said: If you can’t measure it, you 

can’t improve it. 

And while we were able to take 10 hospitals across 8 States and 

use a common definition, that was just really the first year of savings. I think there is a whole lot more on the table, but if we can 

scale that to more than just 8 States, take it to 50 States, then I 

think we have a real opportunity to drive best practices and ultimately improve the kind of care we are looking for, for these children. 

But the CARE coordination from the health home is really where 

the rubber meets the road with these families, where you are working to tailor that very specific care model for that child. 

Mr. LANCE. Thank you very much. 

Attorney General Schmidt, thank you for your work on the important issue of expanding the authority of the Medicaid Fraud 

Control Units, to detect, investigate, and prosecute Medicaid patient abuse in noninstitutional settings. In your testimony, you detail some certainly very unfortunate stories that have been uncovered and stopped. I encourage all of my colleagues to read the testimony carefully. 

What has me all the more concerned is that, even as noninstitutionalized care and Medicaid has expanded—and I support the expansion of Medicaid, and New Jersey has expanded it—the ability 

to protect these patients from the types of abuse has not. My question to you, Attorney General, without this important change to 

law, what tools do States have to protect these patients? 

Mr. SCHMIDT. Representative, the answer would vary State by 

State, but as a general matter, and certainly in Kansas, it would 

be the general tools we have for any criminal investigation on any 

criminal subject. And the reason that matters and is less optimal, 

in my view at least, than having the specified authority under the 

Fraud Control Units, is that these are specialized individuals in 

units focused on patient abuse, as well as financial matters, within 

the confines of the Medicaid program. They are focused. 

We have 400-plus law enforcement agencies in Kansas. They are 

terrific people. They do a great job, and they are stretched far, far 

too thin and often are unable to be focused in a way that a specialized entity can. So I think you just go from the small pool to the 

big ocean if you don’t have this sort of specialized capacity to deal 

with abuse in the noninstitutionalized setting. 

Mr. LANCE. Thank you very much, Attorney General, and my 

thanks to the panel. 

And I also want to thank those in the audience who are here advocating on behalf of this wonderful cause. And I have been honVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00107 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
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ored to meet with some of those who are in the audience today, and 

we certainly welcome them for their advocacy here in Washington. 

Mr. Chairman, I yield back 16 seconds. 

Mr. BURGESS. The chair thanks the gentleman. 

The chair recognizes the gentlelady from Illinois, Miss Schakowsky, 5 minutes for questions, please. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

Recently I met with a 9-year-old named Naomi Bytnar who has 

a complex medical condition and is being treated at Advocacy Children’s Hospital in my district. And I am just so proud to cosponsor 

H.R. 3325, the bipartisan ACE Kids Act, which will help many children just like Naomi get the care they need. I thank all of you who 

are supporting that. 

I would also like to thank Representatives Dingell and Guthrie 

for introducing the bipartisan H.R. 5306, the EMPOWER Care Act, 

to reauthorize the Money Follows the Person, MFP, Program, 

which I am proud to cosponsor. The MFP Program has given over 

88,000 individuals the opportunity to transition from institutional 

care, something I have been working on for decades now from my 

time in the legislature in Illinois. 

Mr. Salo, without an extension of MFP, what will it mean for 

seniors and people with disabilities? 

Mr. SALO. Without extension of Money Follows the Person, what 

you are going to have is a definite subset of people who are in an 

institution, in a nursing home, who don’t want to be there, who 

don’t need to be there, and are going to have enormous difficulty 

making the transition out, so, yes. 

Ms. SCHAKOWSKY. Mr. Cunningham, what challenges do States 

face in supporting transition from institutions to the community, 

and how does MFP address those challenges? 

Mr. CUNNINGHAM. So I think obviously housing is a big issue of 

finding a resident, especially if you no longer have the housing 

since you have been in the institution. So, through housing counseling funded through MFP, through projects like developing databases of available section 811 housing vouchers, that also provides 

assistance. 

I also think another area that has been funded is the Aging and 

Disability Resource Centers. And I would say that this entity is 

critical in a comprehensive, long-term care system, because they 

can not only advise about the resources that Medicaid has but also 

about Medicare, about other resources within the community, to 

create natural supports and lower the cost of care and the Medicaid 

program bears but also other systems bear. So we have used that 

MFP to fund those ADRCs also. 

Ms. SCHAKOWSKY. Thank you for that. 

Turning to the gag clause, I want to emphasize that this committee can be doing much more to lower prescription drug prices, 

for example, basic transparency and price spikes requiring that the 

price in direct-to-consumer prescription drug ads and Medicare prescription drug negotiations. So there are things that we could do, 

but we must get rid of gag clauses because providing patients with 

information about pricing is critical. 

Dr. Yoder, though, I want to ask you—where are you? I am 

sorry. There you are. OK. You raise a really interesting point in 

103 

your testimony that paying out of pocket impacts deductibles, maximum out-of-pocket costs and for seniors, the doughnut hole. Senior 

groups have told me that this information would be useful at the 

pharmacy. 

So what is the effect on the beneficiary’s deductible, maximum 

out-of-pocket limits when paying out of pocket? How does this affect seniors in the doughnut hole? 

Dr. YODER. So, generally, when the medication is paid for out of 

pocket, those prescriptions don’t get adjudicated to the PBM system. So there is no way for those accumulators to be added to that 

would reflect what the member’s out-of-pocket is. So essentially 

that prescription is opaque to the health plan as well as the PBM. 

No one knows it was actually dispensed, other than the pharmacist 

who dispensed that. So it doesn’t go toward any of those accumulators at all. 

Ms. SCHAKOWSKY. So, when we talk about eliminating the gag 

rule, would it be useful, do you think, to share that information as 

well, so people really understand the consequences of paying out of 

pocket? In other words, someone might be told that if you pay the 

$50, you now will climb out of the doughnut hole, rather than the 

$10 if you pay out of pocket? 

Dr. YODER. Absolutely. We support making sure that the members and the enrollees do know what the consequences would be for 

doing that. In addition to not just the accumulators, in most cases 

those prescriptions don’t go against any of the checks for medication duplication, drug interactions, things like that, because they 

are not going into the PBM system to see what all the other medications that member may be taking. So we absolutely do support 

that transparency so members do understand what the consequences would be for paying out of pocket versus using their 

copay cards. 

Ms. SCHAKOWSKY. What you just said is a safety issue that it 

seems to me, why couldn’t this be recorded? 

Dr. YODER. Because the way the prescription adjudication system 

works, the PBMs don’t see those prescriptions. They never go into 

the systems at all because they are just at the local pharmacy. The 

local pharmacy can do checking on the prescriptions they have for 

that member, but if the member goes to different pharmacies, if the 

member uses mail order, things like that, those prescriptions never 

even enter into the system. 

Ms. SCHAKOWSKY. That is a concern we ought to deal with. Let 

me just say, as somebody who has—I am over time. I am going to 

respect what you said, Mr. Chairman, and yield back. 

Mr. BURGESS. Thank you. The chair recognizes Chairman Walden, 5 minutes for questions, please. 

Mr. WALDEN. Thank you very much, Mr. Chairman. 

Really good hearing, appreciate all your testimony. 

Mr. Yoder, your testimony contemplates the possible downsides 

of cash purchases for medications which you were just talking 

about, such as mechanisms to catch potentially harmful drug interactions or medication nonadherence. 

So I am kind of interested to hear how Mr. Chancy would respond to those concerns. 

104 

Mr. Chancy, in your experience, when discussing cash prices, do 

pharmacists have the necessary information before them to identify 

harmful drug interactions? 

Mr. CHANCY. Yes. Whether it is cash or whether it is insurance, 

our computer system will run the analysis on any drug interactions. 

Mr. WALDEN. All right. And are there ways that we can improve 

this legislation to avoid any unintended consequences concerning 

potentially harmful drug interactions or medication nonadherence, 

things we could do to improve this legislation to prevent the kind 

of problems that are being discussed right now? 

Mr. CHANCY. Yes. 

Mr. WALDEN. What would those look like? 

Mr. CHANCY. Pertaining to adherence? 

Mr. WALDEN. Yes, to medication nonadherence and to harmful 

drug interactions. 

Mr. CHANCY. Well, I think if we are actually running it through 

the insurance, and I was not familiar with the insurance doing the 

drug-drug interactions on the back side, but I think if we were to 

know about those interactions, that would be helpful for us to help 

with the patients upfront, to make sure if there are any issues they 

are having, we can actually work with their physician to change 

medications or change drug regimens. 

Mr. WALDEN. All right. Thank you. 

Dr. Yoder, I am going to change gears here to the other bill. So 

I appreciate your providing ways we can improve the Healthcare 

Fraud and Prevention Partnership, and so I would like to focus on 

two of those. First, you mentioned that Blue Cross Blue Shield recommends creating improved mechanisms for the exchange of findings so that all participants are best informed of lessons gained 

from the experience. 

What are some of the existing limitations on information sharing 

that we should be aware of? 

Dr. YODER. A couple things come to mind. So one would be some 

of the HIPAA requirements that are out there. So right now the 

way the data sharing goes through a third party which deidentifies 

the data, which is great for analysis. But if there are actual particular instances of fraud, that information doesn’t necessarily flow 

through because of HIPAA and because people are not real comfortable about having those conversations. 

Mr. WALDEN. All right. Are there things Congress could do to improve that information sharing? 

Dr. YODER. I think we would support any way that we could 

strengthen the committee charter or the charter for the organization to make it clear that you can share information within the 

confines that would not be HIPAA violations. 

Mr. WALDEN. A violation of HIPAA, OK. 

And, second, you note the partnership appears to be prohibited 

in its charter from advising Medicare and Medicaid of the schemes 

it identifies. I know that our staffs have asked HHS for a better 

explanation of why the charter is not allowed to provide advice to 

the Federal Government, a Federal official, or a Federal agency. 

Are you familiar with the background of why the charter includes this firewall? 

105 

Dr. YODER. No, unfortunately, we are not familiar with why that 

would be in there. 

Mr. WALDEN. OK. And the draft bill includes report language 

that Congress recommended by Ranking Member Pallone. Do you 

believe that having the partnership report to Congress would amplify opportunities to prevent fraud and abuse across all payers? 

Dr. YODER. We actually don’t have a position on that. It is hard 

to tell whether that would be impactful or not. 

Mr. WALDEN. All right. Frank and I think it probably would be, 

so you might want to have an opinion on that later that is good, 

positive. Just kidding. 

I think that is all I have for now. I appreciate your testimony on 

all these bills. We have got a lot of work to do, and we do it well 

on this subcommittee, and I appreciate the leadership of Dr. Burgess and yield back. 

Mr. BURGESS. The chair thanks the gentleman. 

The chair recognizes the gentleman from Maryland, Mr. Sarbanes, 5 minutes for questions. 

Mr. SARBANES. Thank you, Mr. Chairman. 

I want to thank the panel for your testimony. Very important 

pieces of legislation that we are discussing today. All have earned 

bipartisan support for obvious reasons, given what you have been 

telling us and, I think, given the statements of our colleagues here 

on both sides of the aisle. 

I wanted to focus on the EMPOWER Care Act again because a 

lot of people have spoken to it, but I think it is really critical. Obviously, we are at this stage where the authorization has expired. 

States have been sort of living on the reserves associated with it 

for some time, but that is going to be running out quickly. And the 

State of Maryland faces that challenge as well. So it is important 

for us to get this done, and that is what the purpose of the legislation is. 

The reason this is called the EMPOWER Act is because it is 

about empowerment. It is about giving the opportunity for independence, to make sure that seniors, people with disabilities, others have the opportunity to live and thrive in a more independent 

setting and redesigning the Medicaid program so it can help to support that. 

So, Mr. Salo, I am going to direct this to you. And you have addressed it to some degree already. But I am interested again in just 

the perspective on what this does to promote independence and the 

benefits of it. I was thinking earlier that we often or increasingly 

we have been talking about how social determinants are having an 

impact on the way we deliver healthcare. But in a sense, what is 

offered by the EMPOWER Act and the Money Follows the Person 

approach is kind of a reverse of that. 

If you think of it, it is using our healthcare system and the way 

we reimburse and organize the delivery of care to, in a sense, create social dividends. And so maybe you could speak again to that 

idea of how this program is creating social dividends, independence, employment opportunities that might not have been possible 

under the old construct, empowering individuals to be contributing 

members of their own community in ways that previously they 

106 

might not have been able to be and, therefore, strengthening the 

broader community that benefits our country. 

So talk about the social dividends. I have sort of just grabbed 

that phrasing for the purposes of this question, but I would be interested in, again, your perspective on what that independence opportunity offers to people. 

Mr. SALO. Sure. I think I would be somewhat remiss—and acknowledging it is outside of the purview of this conversation today, 

but I would be somewhat remiss in not reminding everyone that 

this country doesn’t have a long-term care system. We have Medicaid. Medicaid is it. Medicaid is by far the dominant player in 

long-term care, whether it is institutional or noninstitutional, for 

everyone in this country. 

And because Medicaid is a means-tested program, that means 

that when Americans need long-term care services and supports, 

they have to go on Medicaid, and they have to impoverish themselves. Those are the rules. We didn’t design it that way, but that 

is how we have fallen into it. That is how the system works. And 

I would argue, as a macro construct, that is not terribly empowering to begin with. 

So I would just encourage as we look to the future to say, are 

there other ways we can think about providing the necessary longterm services and supports to Americans through other means? But 

having said that, within the construct of Medicaid, clearly what we 

are seeing is if we can embrace—and we have, but as we embrace 

the trend for self-determination—whether that is where do I want 

to live, do I want to work, how can I work, who do I want to associate with—MFP and many other efforts that have been underway 

in Medicaid for the past three decades have all been about empowering people and about providing freedom. 

That I think is an incredibly important dividend. And I think 

what you see as a result of MFP, specifically getting people out of 

an institution who don’t want to be there or who shouldn’t be 

there, or whether it is any of the other efforts to try to provide upfront alternatives to prevent people from going into that institution 

in the first place, it is all about, how can we empower the individual and give them the self-determination that they need to 

make those meaningful choices for themselves? And I would argue 

that that makes their lives better, their family lives better, and 

their community lives better. 

Mr. SARBANES. I appreciate that. Just to close, I would say that, 

within that larger construct, it can be frustrating sometimes. I 

think what you are saying is the MFP approach is an innovation, 

and we should pursue more innovations like that that can be empowering to people because it is better for our entire community 

when we do that. 

Thank you, and I yield back. 

Mr. BURGESS. The chair thanks the gentleman. 

The gentleman from Florida is recognized for 5 minutes for questions, please. 

Mr. BILIRAKIS. Thank, Mr. Chairman. 

I appreciate it. And I appreciate you agenda-ing the ACE Kids 

Act today. It is great legislation. I have been a strong supporter, 

a longtime supporter of that legislation. Bipartisan bill. 

107 

In the Tampa area, St. Joseph Children’s Hospital has been running a Chronic-Complex Clinic for children, and I have toured that 

particular hospital and that clinic, and I tell you it is a wonderful 

thing. It is a great concept. 

I have had the opportunity again to tour it over the past few 

years and see how integrated care model can benefit the children 

with complex medical issues. Again, the children, we have seen examples time and time again where the children come up here and 

show us how well they are doing and how it benefits them and 

their families. 

Mr. Merrill, you mentioned that children with medically complex 

conditions account for a large share of the Medicaid costs for children. Can you talk about how a medical home, such as the one at 

St. Joseph’s, can bring savings to Medicaid? Do you have research 

showing these savings? 

Mr. MERRILL. Yes, thank you. Great question. There have been 

some studies, independent studies, done that have shown that the 

potential savings for ACE Kids for the Medicaid children could be 

anywhere from up to $5 billion to $13 billion over a 10-year period. 

And, as I said, under the CAREs grant, even though 2.6 percent 

sounds fairly small, I think that is just the beginning of some opportunity for us to really, if we can scale this across all 50 States 

instead of just one-offs at different organizations—and I know the 

hospital you mentioned, they do incredible work there, but they are 

by themselves. They are siloed. And if we can create a national 

database in which we are sharing data, working together, driving 

best practices, then, in the end, I think we truly can create the savings that everyone is looking for but also improve the patient experience through these coordinated care health homes. 

Mr. BILIRAKIS. And that is the priority, to improve the patient’s 

experience and the quality of care for the child. And, again, it is 

convenient for the parents. So I would like to see a hospital in 

every region of the country that has the ACE Kids model. 

Again, is quality measure data currently collected in Medicaid or 

Medicare? 

Mr. MERRILL. Yes, I think it is by State, and you will see different States starting to implement quality measures with a payfor-play component to it. We are unaware of any quality measures 

that are specific to this medically complex population. I think that 

this bill contemplates that, as it should. 

One of the very most important first things that I believe we 

should look at as a quality indicator is patient and family satisfaction. That is really what this bill is all about, making life much 

more convenient for these families, allowing them to navigate the 

healthcare system easier and have the better outcomes. 

We could implement outcome measures, reduced readmissions, 

for example, for this population, because this population tends to 

bounce back into the hospital. But if we are successful at creating 

the medical home, then we believe that we can keep these children 

out of the hospital more often, closer to home, and deliver better 

care and better outcomes as a result of that. 

Mr. BILIRAKIS. It is so very efficient too, because the doctors, 

they have multiple appointments during the day, they can see—— 

Mr. MERRILL. That is correct. 

108 

Mr. BILIRAKIS [continuing]. The doctors. And, again, it is great 

for the child and the family. So I appreciate it. It is a no-brainer, 

as far as I am concerned, but sometimes no-brainers don’t get 

passed up here. And I really appreciate the chairman agenda-ing 

this bill. It has got to get done. 

Mr. Salo, you mentioned that it is important to avoid one size fits 

all and to allow for a flexible benefit design. And I agree. We have 

one Medicare program, but we have 50 Medicaid programs, each 

designed to serve the unique needs of their States. 

Mr. Salo and Mr. Merrill, do you think that the latest discussion 

draft for ACE Kids promotes a flexible benefit design for States? 

Maybe, Mr. Salo, you want to go first. I know we don’t have a lot 

of time. 

Mr. SALO. Sure. I think we made a lot of progress, and I think 

as long as it continues to allow Florida to acknowledge its current 

delivery system, Florida has a separate managed care organization 

completely focused on kids in the foster care system. 

New York has a system in place that holds pediatricians accountable for making sure that kids arrive at school at kindergarten 

ready to learn. There are efforts like this underway in lots of 

places. We want to make sure that this is a complement and improvement to those efforts as opposed to just running into them in 

a conflicting way. 

Mr. BILIRAKIS. Mr. Merrill. 

Mr. MERRILL. This bill actually allows each State to implement 

the program that works for them. In Texas, with our STAR Kids, 

we have Medicaid managed care, and it works pretty well. I think 

it can work equally well in a fee-for-service environment. And so 

I think that is the flexibility that is built into this, so that the 

States can, number one, opt in or out; and if they opt in, they can 

use their delivery system that they have in place today. 

Mr. BILIRAKIS. It makes sense to me. And I want to thank the 

lead sponsors of this bill, of course, former Chairman Barton and 

also Representative Castor, and all the cosponsors. I am one of 

them as well. 

Thank you very much. And I yield back, Mr. Chairman. 

Mr. BURGESS. The gentleman yields back. The chair thanks the 

gentleman. The chair recognizes the gentleman from Oklahoma, 

Mr. Mullin, 5 minutes for questions. 

Mr. MULLIN. Thank you, Mr. Chairman. And thank you to our 

witnesses for being here. I am going to jump right into it. 

Mr. Salo, first of all, can you talk about how, in addition to the 

obvious benefit to States of enhanced funding, the ability to incorporate medically complex children into a health home is a critical 

improvement compared to the current law? 

Mr. SALO. Sure. I think if you look at any State in the country, 

what Medicaid directors are trying to accomplish is a move away 

from a historical healthcare system in this country, not just Medicaid but Medicare and commercial, that has been fee-for-service. 

And we are moving toward a world where care is coordinated. It 

is managed. It is holistic, and it is patient-centered. 

That will look different in different States. It might be managed 

care. It might be ACOs. It might be patient-centered medical 

homes. It might be health homes. Each of those is going to work 

109 

in the political and geographic and cultural realms in which those 

States reside. 

If we acknowledge those, then I will channel my good friend Dennis Smith, who once talked about the historical healthcare system 

for people with disabilities, for kids with medically complex needs, 

for frail seniors. The fee-for-service system, FFS, he said, it should 

stand for fend for self because that is what we require; that is what 

we are requiring of them. 

And what Medicaid is trying to do is to create a system that is 

going to make it so that people don’t have to spend their lives navigating multiple different silos and that the care itself is coordinated and managed in a better way. That is what Medicaid is trying to do. 

Mr. MULLIN. Thank you. 

Mr. Schmidt, what protections do patients currently have when 

Medicaid Fraud Control Units detect abuse in a noninstitutional 

setting? 

Mr. SCHMIDT. With respect to protections from the Medicaid 

Fraud Control Unit, I think the historic answer is none, or realistically, if we detect it, we are going to call some other law enforcement agency and say: Please take a look, we can’t. 

Mr. MULLIN. How often do they actually pick it up? 

Mr. SCHMIDT. It depends on the jurisdiction. We have had cases 

in Kansas that, for example, in some of our more robustly staffed 

jurisdictions, that they will take it. We have had others where we 

haven’t felt good about having to hand the case off. 

Mr. MULLIN. They simply don’t have the manpower or the knowledge to do it? 

Mr. SCHMIDT. That is correct. 

Mr. MULLIN. Are there any other settings that Medicaid Fraud 

Control Units are prohibited from addressing patient abuse? 

Mr. SCHMIDT. I believe the answer to that is no, but I would sure 

want to double-check that with the folks that—there is nothing else 

on my radar screen. Nothing else on my radar screen. 

Mr. MULLIN. Can Medicaid Fraud Control Units detect, investigate, and prosecute fraud inside the Indian Health Service facilities? 

Mr. SCHMIDT. I don’t know the answer to that. Sir, we don’t have 

that issue having arisen in Kansas and I just don’t know. I can certainly check with folks that would, if that would be helpful, and 

have them follow up. 

Mr. MULLIN. Can Medicaid Fraud Control Units pursue cases of 

patient abuse in his facilities? 

Mr. SCHMIDT. I would have to do the same. 

Mr. MULLIN. Do the same? 

Mr. SCHMIDT. Do the same. 

Mr. MULLIN. My point that I am trying to get at, obviously, Medicaid is a tool which can be utilized for the benefit of those in need 

and those in most critical need. It can also be utilized to help 

strengthen systems like his. But if we are going to be in the business of trying to investigate fraud, then we also need to have the 

ability to go into where it is being used, not limited access. 

110 

And I am sure you can appreciate that. We want to make sure 

that, one, the dollars that was invested in Medicaid is being used 

properly by those that are receiving the funds. 

And what I am trying to get at is, if there is a way for us to be 

able to help, we do want to help because, as you mentioned, our 

attorney general, Mike Hunter, is associated in helping on an important bill. We are also in desperate need of wanting to find out 

how we can help strengthen our his system. We don’t know if there 

is abuse going on, because it hasn’t been investigated. We don’t believe there is, because we believe our Tribes are extremely good 

stewards of what they are using their assets for. You can go and 

you can look at the his facilities and the health clinics and the Indian hospitals throughout my district, and it is amazing what is 

happening, but can it be utilized further? 

So my whole point on asking those questions—and I didn’t expect 

you to know, because currently I don’t think there is—I am here 

wanting to say I want to help. If we believe there is a reason for 

us to do it, I want to help. I want to make sure that those dollars 

are being used properly so we are not going after everybody, but 

we are only going to focus on the bad actors. 

With that, Mr. Chairman, I yield back. 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

I think all members of the Health Subcommittee have been recognized, and we will now turn to members off the subcommittee. 

And, Mr. Welch, you are recognized for 5 minutes for questions, 

please. 

Well, let me clarify that statement. All members of the subcommittee with the exception of your subcommittee chairman, who 

deferred his questions. So you may go ahead of me. Mr. Welch, you 

are recognized for 5 minutes. 

Mr. WELCH. Mr. Burgess, you are always doing a generous thing. 

Thank you very much. 

I want to speak to Mr. Chancy about the gag rule. That is astonishing. Mr. Carter and I have a bill in to get rid of it. But can you 

just give some description of what it feels like to be a pharmacist. 

And in my experience, the pharmacists have very close customerpharmacist connections, and they are guiding their customer in the 

use of that medication, and it is a place the customer can go to because they trust the pharmacist. 

So what is it like for a pharmacist to have this gag order when 

if he or she didn’t have it and was free to speak, they could save 

that customer, who they value, an awful lot of money? 

Mr. CHANCY. It puts us in a very compromising situation because, like we had mentioned earlier, our relationship with our patients are based on trust. And they depend on us to maneuver— 

this stuff is complicated. We have to stay on our toes to keep up 

with it, and our patients really depend on us. And when we can’t 

be fully forthright with them, then that just puts us in a compromising situation. 

Mr. WELCH. It kind of makes you feel dirty, right? It is awful, 

because they trust you. They are putting their medical situation in 

your hands. They are asking you intimate questions about, you 

know, this was my reaction, what do you think I should do? And 

111 

they are assuming, since they trust you, that among other things, 

if you could save them a hundred bucks, you would, because it is 

not money going in your pocket. 

Mr. CHANCY. Oh, no, definitely not. 

Mr. WELCH. Do you have any idea why it is legal to put handcuffs on your ability to act? 

Mr. CHANCY. It has always been a bad rope for us. 

Mr. WELCH. Mr. Chairman, just bipartisan, I hope we can get rid 

of this. The idea that a pharmacist can’t give relevant information 

on how to save money for their customer really is inexcusable. So 

I appreciate the hearing that you are having. 

Thank you. And I want to talk to the attorney general a bit 

about your work. Our Medicaid Fraud Unit in Vermont does a tremendous job, and it is both recovering money and, I think, also a 

deterrent against would-be malefactors. And, of course, when this 

legislation was initially passed, most of the Medicaid services were 

provided. They were provided in institutional settings. 

So I would just ask you to elaborate about your reasons for supporting this legislation, and I have a bill in in order to accomplish 

your goals. But thank you. 

Mr. SCHMIDT. Thank you, Representative. And, again, thanks to 

you and Representative Walden for your leadership in making this 

real. And as I mentioned earlier, I worked very close with my 

friend, your attorney general, General Donovan, on this. And he 

and I have talked many times—I certainly don’t purport to speak 

for him—but both coming from lightly populated States with substantial rural areas, how important this expansion is to allow us 

to have the capacity of skilled investigators and prosecutors who 

are expert in patient abuse matters to be available and deployable 

in areas that simply don’t have them with respect to local resources. 

So I think it is vitally important, and it doesn’t make any sense 

to have this arbitrary restriction that I can see. 

Mr. WELCH. Right. And my understanding, in the Vermont Medicaid Fraud Unit, we return a lot more money than it costs to run 

it. I think it is like six to one. I don’t know what it is in your State. 

But is there any reason to be apprehensive that if we expanded 

your authority to recover and deter bad conduct outside of the current law, that it would be a financial drain? 

Mr. SCHMIDT. No, I don’t think so. And I guess I would offer just 

a couple of thoughts on that point. Number one, obviously, the financial recoveries of a MFCU come principally from the fraud side, 

not the abuse side. And so I do understand at least those who articulate, well, it is different. But, having said that, most of the 

Medicaid Fraud Control Units, including ours in Kansas, are selffunding, and they are returning money to the taxpayers. And so I 

have no concern along those lines. 

Mr. WELCH. In Kansas, sort of like Vermont, you are kind of 

tight with a dollar, right? 

Mr. SCHMIDT. I think that is true, and we wear that as a badge 

of honor. 

Mr. WELCH. Well, I think Mr. Walberg is too, so it has been great 

working with him. And I thank you for your work and your testimony on that. 

112 

Mr. SCHMIDT. Thank you, Representative. 

Mr. WELCH. Thank you. And I yield back. 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

The chair recognizes the gentleman from Michigan, Mr. Walberg, 

5 minutes for your questions, please. 

Mr. WALBERG. Well, my good friend and colleague from Vermont, 

I am not tight; I am efficient. 

Mr. Chairman, thank you for holding this hearing, and thank 

you for including our legislation as part of the bill packages here. 

I would like to ask, Mr. Chairman, unanimous consent to submit 

for the record letters from the National Association of Attorneys 

Generals, Families USA, and Partnership for Medicaid Home 

Based Care, and express support for H.R. 3891. 

Mr. BURGESS. The ranking member is concerned about the letter 

from Families USA, but I think I will go ahead and accept them. 

We will. 

[The information appears at the conclusion of the hearing.] 

Mr. WALBERG. Thank you. 

Attorney General Schmidt, thank you for being here today and 

for your efforts in highlighting the need for legislative reforms offered by myself and my colleague, Representative Welch. 

Medicaid Fraud Control Units play a vital role in bringing those 

who commit Medicaid provider fraud, patient abuse and neglect to 

justice. In my home State of Michigan, Medicaid Fraud Control 

Units, or MFCUs, recovered over $7 million in taxpayer dollars in 

2017 and contributed to 24 convictions. Nationally, MFCUs are responsible for about $1.8 billion in recovered funds and 2,500 convictions. 

I commend the work of these State Fraud Control Units and the 

attorneys general for protecting the most vulnerable of our population from harm as well as ensuring taxpayer resources are being 

used appropriately. So thank you. 

Attorney General Schmidt, as you know, currently MFCUs may 

only investigate cases of patient abuse that occur in institutional 

facilities, et cetera. Let me move to what this bill could possibly do. 

If our legislation were to become law and MFCUs were permitted 

to widen the scope of their investigations, do you have any sense 

of how many Medicaid beneficiaries could be protected from abuse 

or the amount of taxpayer funds that could be recovered? 

Mr. SCHMIDT. Representative, I don’t have hard data, and I am 

not aware that it exists. If it does, I don’t have it. I can give you 

anecdotal information from Kansas with numbers. 

Mr. WALDEN. That would be helpful. 

Mr. SCHMIDT. And you can draw from that what you will. In 

State fiscal year 2018—we are on a July through June fiscal year 

in Kansas. In State fiscal year 2018, our MFCU received 16 referrals of suspected patient abuse. Of that number, we found a way 

to investigate or cause to be investigated 11. That leaves a difference of five. Out of those five, I didn’t go back and personally 

review the files before this hearing, but if normal patterns hold, I 

suspect probably half of those there simply wasn’t evidence of a 

crime, and so there was no further action to be taken, which leaves 

one or two that, had we had the ability to proceed in the nonVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00118 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
113 

institutional setting, we could have investigated and, assuming 

there was evidence, prosecuted. 

To put that in context for Kansas, we also prosecuted to conviction 16 criminal cases last year in our MFCU. It is coincidental 

that is the same number as the referrals. They aren’t connected. 

So had we added one from a noninstitutional setting because of 

your bill, that would be a 6-percent increase in the number of convictions. If it were both, it would be a 12-percent increase. 

Mr. WALBERG. Could you give us an example of one of those 

where you had to turn a blind eye because of the inability? 

Mr. SCHMIDT. Absolutely. The one that comes to mind that troubles me the most, it was a case in a very small county, very rural 

county, lightly resourced, both on the police law enforcement side 

and on the prosecutor side. 

The matter came to our attention technically on a fraud claim, 

but it was obviously more than that. It was a case where an individual was being paid by the Medicaid program to provide personal 

care services in home for a beneficiary. The beneficiary was either 

nonambulatory or had substantial mobility restrictions, and so the 

PCA was supposed to be there all night long sitting with this person, providing the appropriate care. They didn’t, and they billed for 

it, which is how it came to our attention as a fraud matter. 

The reason it was particularly distressing is that, on one of those 

evenings before this was all uncovered, the beneficiary, who was a 

smoker, was home alone when the PCA was supposed to have been 

there. The person was smoking, it appears, in bed. The cigarette 

dropped. It caught the house on fire, and the individual died. Now, 

there was Medicaid fraud in a small amount of dollars, but obviously the much greater harm there was the question of whether 

there was a criminal homicide, whether there was a negligent manslaughter or reckless manslaughter or some other form of prosecutable homicide, and we did not have the ability to use our MFCU 

assets to investigate that. 

So we had to go back to the local police and the county attorney 

who called us in the first place and say: We are sure glad to help 

out of other assets, but we can’t take this. We can prosecute him 

for two or three thousand bucks’ worth of fraud, but that is not 

what this is really about. 

Mr. WALBERG. Thank you. Thank you, and I yield back. 

Mr. BURGESS. The chair thanks the gentleman. The gentleman 

yields back. 

The chair recognizes the gentlelady from Michigan, 5 minutes for 

questions, please. 

Mrs. DINGELL. Thank you, Mr. Chairman and Ranking Member 

Green, for allowing me to participate today in holding this hearing. 

There are several bills being considered today. I am going to 

mostly confine myself to the EMPOWER Care Act before my colleague Mr. Carter speaks. And when his bill gets introduced, I am 

going to tell you of a story last week of picking up a prescription 

that was $1,300, and after you peeled me off the ceiling and I 

called the doctor and screamed and talked to the pharmacist, got 

an equivalent for $40. I am much more aggressive than many in 

asking questions, but, Mr. Carter, I am on your bill when you get 

it in. 

114 

But now I will confine my remarks to—and that is a very true 

story—H.R. 5306, the EMPOWER Care Act, which I am proud to 

author with my friend and colleague, Congressman Brett Guthrie. 

Improving long-term care has been one of my top priorities since 

coming to Congress. And as I have listened to all of you talk today, 

our long-term care system is broken. It doesn’t work. Most people 

think Medicare covers it, as Mr. Salo previously noted, and are 

shocked to learn that if you are going to get sick, better do it only 

90 days, 90 first, you are out, and that Medicaid is actually the single largest payer of long-term care in this country. And the private 

market is totally broken as well. 

As we have heard in the testimony this morning, one program 

that is working well in terms of enhancing opportunities for independent living and supporting aging with dignity and has bipartisan support is the Money Follows the Person Program. We have 

discussed what it is this morning. It provides grants to States to 

cover transitional services for individuals who want to leave a 

nursing home or another institution and transition to the community care setting. 

I have been working with my colleague Brett Guthrie from Kentucky to reauthorize this successful program that is proven to save 

taxpayers money and has successfully transitioned thousands of 

people from institutions to a community setting where they can be 

with their loved ones. We need to expand the program before it expires. I agree with you that 1 year isn’t enough, but I will take 1 

year if that is all we can get, because time is running short. 

So I am going to ask Mr. Cunningham these questions. Mr. Salo, 

if you want to chime in. 

Money Follows the Person was created through bipartisan efforts. The program has been operating for more than a decade, and 

the legislation we are considering would have reauthorized the program for another 5 years. We will take the 1. Why is this such a 

priority? How does this kind of long-term reauthorization support 

institutional transition efforts? 

Mr. CUNNINGHAM. So I think one of the big things for MFP is 

that every State kind of has their own home and community-based 

waiver programs. And so depending on each State, MFP can be 

that flexible tool that can be used to move people out of institutions 

into the community. And so that flexibility is critical. 

Mrs. DINGELL. What challenges do States face in supporting 

transition from institutions to the community? How does MFP help 

address these challenges? 

Mr. CUNNINGHAM. So, for many States, a lot of the services, such 

as housing counseling and other referrals, counseling, detection of 

people that want to relocate, these may or may not be covered as 

part of the Medicaid program. 

So MFP can step in to provide those services. And then they can 

relocate into the community where some States may have available 

personal care assistants and other home and community-based 

services that can support them. So it bridges that gap. 

Mrs. DINGELL. Thank you. We know that hundreds of thousands 

of people with disabilities continue to wait on waiting lists for 

home and community-based services. How does MFP help address 

115 

the problem for the population of people in institutional settings, 

and what would happen if we don’t renew this? 

Mr. CUNNINGHAM. So, in Wisconsin, what we have done with the 

enhanced Federal match is that we have reinvested that into our 

long-term care program to reduce and eliminate waiting lists. And 

within 36 months, we are going to be an entitlement for all individuals that need Medicaid home and community-based services. 

And so MFP has been a vital part, and that reinvestment of 

those dollars into the long-term care system continue to support 

providing community-based services. 

Mrs. DINGELL. I want to thank all of you for everything that you 

are doing. Five minutes isn’t enough time. But before I yield back, 

I would ask the chairman for unanimous consent to include for the 

record letters of support for H.R. 5306 from the Area Agencies of 

Aging Association of Michigan, the National Association of State 

Directors of Developmental Disability Services, the National Association of States United for Aging and Disabilities, and a group letter signed by dozens of health and aging organizations. 

Mr. BURGESS. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mrs. DINGELL. Thank you. And I am over my time. 

Mr. BURGESS. The chair thanks the gentlelady. 

The chair now recognizes the gentleman from Georgia, 5 minutes 

for your questions, please. 

Mr. CARTER. Thank you, Mr. Chairman. And thank all of you for 

being here. 

Mr. Chairman, I want to thank you for holding this hearing 

today and for including the discussion on the gag clause legislation. 

It is something that is very important and something that I have 

stressed since I have been in Congress and something that is important to patients. I think that is the point that I would like to 

get across most is that this is something that is really hurting patients more than it is hurting anyone. 

Mr. Chancy, I want to thank you for being here. I appreciate it 

very much. I know you have traveled a long way, as a lot of you 

have, but I wanted to ask you, Mr. Chancy, examples of gag 

clauses. Now, I think everybody by this point understands what we 

are talking about when we are talking about gag clauses, but have 

you actually seen a contract that had the language in there that— 

and perhaps it wasn’t written the way that you would understand 

it, but have you ever seen a contract like that? 

Mr. CHANCY. First of all, it is very difficult for us to even get our 

hands on these contracts, and they change frequently. So I have 

not seen anything that even stated that it was a gag clause. 

Mr. CARTER. Right. But just because it is not stated, there are 

other ways that the pharmacy benefit managers can get at this. 

You mentioned earlier about CVS/Caremark. CVS, of course, is a 

competitor, a national chain, I believe the largest drug chain in 

America. And yet Caremark, one of the top three PBMs in America, is the same company. You can make the argument that the 

Caremark owns CVS or CVS owns Caremark. It doesn’t matter; 

they are the same thing. But there are other ways. Do you ever get 

audited by any of these groups? 

116 

Mr. CHANCY. Yes, we do. Actually, one of our stores is next door 

to a CVS, and they do audit us. 

Mr. CARTER. So, actually, you have got a contract with a PBM 

that has a drugstore right next to you, and you are getting audited 

by that PBM that owns that drugstore right next to you. Do you 

find that somewhat intimidating, if you will? 

Mr. CHANCY. Yes, and it is challenging at times. 

Mr. CARTER. I can imagine. I wanted to ask you, in your written 

testimony, you gave some examples of where you had actually told 

some patients about this. And I believe there was one example with 

a mayor of one of the municipalities around. Can you share that 

very quickly? 

Mr. CHANCY. Yes, that is correct. He came in, and his prescrip- tion came to be $26. And they had just changed insurance plans. 

And we told him that if you paid cash for this, it would be cheaper. 

And he said: I don’t understand; I want to use my insurance. And I said: Well, our cash price is $8, but if we use your insur- ance we have to charge you $26—because the PBM was actually 

taking $24 back from us. Anyway, the point was out of pocket was $8 for him. Using his insurance, he had to pay $26. 

Mr. CARTER. So this point was brought up. I believe, Dr. Yoder, 

you may have brought it up. And it is a valid point, that, if you 

don’t use your insurance, it is not going to go toward your deductible. 

Mr. Chancy, do you have an opportunity to know how close a patient is to their deductible? Is that any kind of information that 

you are privy to as a pharmacist? 

Mr. CHANCY. No, we don’t. The only way we find that out is if 

we bill it through their insurance and we find out that they have 

met their deductible or they haven’t. So we fill prescriptions or 

process prescriptions until we get to that point. 

Mr. CARTER. But if we were realistic about this, the example that 

Representative Dingell just gave, now, that would have been 

$1,300 going toward a deductible. She made the choice to pay the 

$40, which obviously I think most of us would have. But the other 

example that you gave where it was $7 as compared to $26, that 

is not really going to impact the deductible that much, is it? 

Mr. CHANCY. Oh, no, not at all. 

Mr. CARTER. I don’t think it is going to help them get there. So, 

with all due respect, Dr. Yoder, that is the point we are trying to 

make here. Generally, that is an extreme case. And that is exactly 

what we are talking about. That is nothing short of ridiculous, and 

we all understand that. 

One other point that was made by Dr. Yoder was the fact that 

if you don’t get it filled through the insurance company, that you 

may not see a drug interaction. But is it true, Mr. Chancy, that 

most pharmacies now have programs where—drug interactions 

are—before you fill a prescription, you are going through the patient’s profile and looking at all the drugs that are on there anyway? 

Mr. CHANCY. That is correct. 

Mr. CARTER. OK. So it really should not be that much of a problem, unless they are getting it somewhere else, which could hapVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00122 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
117 

pen. But, for the most part, you find your patients to be getting 

their medications at one drugstore. 

Mr. CHANCY. That is correct. 

Mr. CARTER. OK. Boy, 5 minutes flies when you have been waiting around all day to ask questions. I do want to thank all of you 

for being here, and this is something that is very important. Again, 

Mr. Chairman, I want to thank you for this discussion and this 

hearing today. Very important. I could not agree with you more 

that this is the most important subcommittee in Congress. So 

thank you, and I yield back. 

Mr. BURGESS. And the most productive. 

I recognize myself for 5 minutes. 

Mr. Chancy, I just have to ask you, when you sign a contract, 

it is voluntary, so no one is forcing you to sign the contract. Do you 

have the option of not signing the contract and saying, ‘‘Hey, come 

back to me with a contract that doesn’t have these nondisparagement riders in it’’? 

Mr. CHANCY. We do have the option of opting out, but we don’t 

always know what is in the contract. 

Mr. BURGESS. I guess that bothers me a little bit. But I can remember early in the days of managed care, as a physician, I had 

complained about a contract, and the lawyer advising the practice 

said, ‘‘Well, you signed a stupid contract.’’ 

I said, ‘‘Well, how do you tell it is a stupid contract?’’ 

He said, ‘‘That is the first one they give you, and you signed it.’’ 

The only reason I am bringing this up is because, as a profession, 

it may be incumbent on us as part of our profession to be ever-vigilant on behalf of our patients, especially as we get into more and 

more situations where ownership is not in the hands of the community pharmacist, not in the hands of the practicing physician, but 

in the hands of an insurance company, the government, or someone 

else. And, again, that is the only reason I bring that up is the 

charge for all of us has got to be not—transparency will only go so 

far. You have got to be vigilant on top of that. 

Mr. Cunningham, let me just ask you, because you mentioned 

some of the supplemental services that are covered, and you mentioned housing specifically. Is transportation ever covered? 

Mr. CUNNINGHAM. I know the ability to develop plans to assist 

with transportation, in Wisconsin that is a covered benefit in our 

community. So what the ADRC would do is assist in developing a 

plan to ensure the individual has proper transportation in the community to both medical and also for social events. 

Mr. BURGESS. Because Wisconsin is one thing, but Texas, the distances are large. But it seems with ride-sharing abilities now, that 

actually could be quite cost-effective. You are not sending a taxicab 

company out to pick someone up, but with the ride-sharing apps 

that people are so accustomed to using now, again, it seems like 

that could be an option for increasing participation or increasing 

compliance on the part of the patient. That is why I was wondering 

if that had been one of the things that you had studied in your efforts. 

Mr. CUNNINGHAM. Yes, it is a covered benefit in our waiver program. But to the extent they don’t have transportation, I think that 

would be either MFP would be able to—used to identify an affordVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00123 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
118 

able transportation. I am not totally sure of the exact reimbursement to the transportation provider. 

Mr. BURGESS. I may follow up. I will do some followup on that 

myself. But you intrigued me with your comments, General 

Schmidt. We have spent a lot of time in this subcommittee and the 

full committee dealing with the problems from opiate abuse and 

the recovery therefrom. And so some of your comments about the 

prosecutorial side, it is one thing to find that there has been diversion, but if a patient is actually harmed in the process. 

We study sober homes to some extent here, and we had a panel 

of family members that came and talked to us. And three of those 

five panel members, family members, all talked about the danger 

and the damages from sober homes in not providing the type of 

care that they were supposed to provide, and people actually suffered as a consequence. Has that been any part of your experience 

as well? 

Mr. SCHMIDT. I don’t know about the sober homes in particular, 

Mr. Chairman. But yes, I think I mentioned in my written testimony, we have criminal charges currently pending against an individual, of course, not yet adjudicated, so she is innocent unless and 

until proven guilty, but who was delivering—she was a nurse in a 

variety of facilities, sort of rode a circuit and was supposed to be 

delivering medications to beneficiaries and instead was diverting 

those medications to illicit uses and obviously causing some fairly 

substantial harm to the beneficiaries, either in terms of pain management didn’t happen or some of the medications’ other purposes. 

So, yes, we have seen that. 

And then the flip side of that, with respect to perhaps the intersection between H.R. 3891 and opioid enforcement, we are looking 

at cases currently. We haven’t filed any of these yet, so they may 

or may not pan out, either under current law or under expanded 

authority. But potential diversion cases, I will call them pill milltype cases in a colloquial, where the diversion occurs outside of a 

healthcare facility or outside of a board and care facility. So they 

are outside the scope of the MFCU now. 

And one of the things that we just sit around and sort of scratch 

our heads on is, well, what is our legal theory if we were able to 

prove this? And right now our legal theory if I want to use the 

MFCU assets is the fraud to the program for diverting those pills. 

I can prosecute for a few bucks a pill the financial loss. 

But if that diversion results in serious bodily injury or death to 

somebody who is misusing those pills, which would be a separate 

crime under Kansas and Federal law, I can’t use the MFCU assets 

to prosecute that much greater ill, and that just doesn’t make sense 

to me. 

Mr. BURGESS. You are right. And this subcommittee, we are all 

about making sense. 

Mr. Merrill and Mr. Salo, I apologize. 

Mr. Merrill, I just have to ask you, because we talked about this 

a little bit offline when we visited about this. You mentioned the 

STAR programs in Texas, and, of course, some of the headlines recently from one of the big managed care companies was not providing quite the services or their ability to reduce cost was essenVerDate Nov 24 2008 11:23 May 22, 2019 Jkt 037690 PO 00000 Frm 00124 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-161 CHRIS
119 

tially reducing benefits. And you had some thoughts about it is important to pay attention to the payer in some of these instances. 

So could you kind of reprise those comments for this subcommittee? 

Mr. MERRILL. Well, I guess in its basic level, care is really never 

and should never be coordinated at the payer side of the equation. 

It should be coordinated at the provider side of the equation. 

All of these caregivers play a role in this, but I can speak specifically about our own experience at Cook Children’s. Since we are a 

provider-based HMO, we don’t have premium expense or dollars or 

profits that have to go to Wall Street. It is a model that has been 

out there for quite some time. But the dollars that would normally 

go to Wall Street we actually reinvest in our community, and that 

allows us to do more care for these kids. 

So I think you have a difference in philosophy on these two different approaches. I do believe personally that provider-based 

health plans do better work, because their premium expense is all 

focused on taking better care of these kids. And I know there has 

been some controversy over that in the STAR Kids program. If you 

read those articles, you will see that the complaints or concerns 

that were expressed were on that side of the equation and not on 

the provider side of the equation. I am telling you as straightforward as I know how, but that is I think the reality of the situation. 

Mr. BURGESS. I thank you for sharing that, because when you 

told me that the other day, I thought that was an important concept that needs to be out there. 

Mr. Green, do you have any concluding thoughts? 

Mr. GREEN. Nothing further, Mr. Chairman. Can I ask for 3 minutes at some future hearing? 

Mr. BURGESS. I was just aggregating all of the extra time I gave 

members on your side and capitalizing upon it. It is like access to 

capital, right? 

So seeing that there are no further members wishing to ask 

questions, I once again want to thank our witnesses for being here 

today. 

Additionally, in addition to all the other documents that we have 

accepted for the record, I want to submit documents from PillPack, 

Incorporated; LeadingAge; Medicaid Health Plans of America; and 

the American Association of Medical Colleges. 

[The information appears at the conclusion of the hearing.] 

Mr. BURGESS. Pursuant to committee rules, I remind members 

that they have 10 business days to submit additional questions for 

the record, and I ask that witnesses submit their responses to 

those questions within 10 business days upon receipt of the questions. 

Without objection, the panel is again thanked and the subcommittee is adjourned. 

[Whereupon, at 12:54 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

120 


36069.062

September 5, 2018 

The Honorable Charles Grass ley 

135 Hart Senate Office Building 

United States Senate 

Washington, DC 20515 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

United States House of Representatives 

Washington, DC 20515 

A$sociation of 

Ameria~~n Medical Colleges 

~ f! 

.. AAMC 

655 K Street. NW, Suite 100, Washington, DC 20001-2399 

T 202 828 0400 3ilffiCOrg 

The Honorable Michael Bennet 

548 Russell Senate Office Building 

United States Senate 

Washington, DC 20515 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

United States House of Representatives 

Washington, DC 20515 

Dear Senators Grass ley and Bennett and Representatives Barton and Castor: 

On behalf of the Association of American Medical Colleges (AAMC), I am writing to express 

support for The Advancing Care for Exceptional Kids Act of2017 (ACE Kids Act, S. 428, H.R. 

3325). Thank you for your leadership in introducing this bipartisan legislation to improve health 

care for children with complex medical conditions on Medicaid. 

The AAMC is a not-for-profit association dedicated to transforming health care through 

innovative medical education, cutting-edge patient care, and groundbreaking medical research. 

Its members are all 151 accredited U.S. medical schools; nearly 400 major teaching hospitals and 

health systems, including 51 Department of Veterans Affairs medical centers; and more than 80 

academic societies. Through these institutions and organizations, the AAMC serves the leaders 

of America's medical schools and teaching hospitals and their more than 173,000 full-time 

faculty members, 89,000 medical students, 129,000 resident physicians, and more than 60,000 

graduate students and postdoctoral researchers in the biomedical sciences. 

The ACE Kids Act is an important piece of legislation that creates a patient-centered delivery 

system for a unique population of children to help ensure access to care across state lines and 

reduce the burden on these children's families. Under this legislation, specially-designed health 

homes created for children with complex medical conditions would employ national quality 

standards and coordinate care, which are both essential to improving quality of care and reducing 

costs. 

The ACE Kids Act, which is voluntary for states, families, and providers, would create savings 

to Medicaid by reducing hospitalizations and emergency room visits while providing essential 

services and supports for these children. As such, the AAMC is happy to support this legislation. 
121 


36069.063

Thank you for your leadership in introducing this critical legislation- we look forward to 

working with you to advance this bill this year. If you have any questions, please contact Len 

Marquez, AAMC Senior Director of Government Relations, at lmarguez@aamc.org. 

Sincerely, 

Karen Fisher, JD 

Chief Public Policy Officer 
122 


36069.064

Adult v Congenital 

Heart• 

Association 

The Honorable Chuck Grassley 

135 Hart Senate Office Building 

Washington, D.C. 20510 

Representative Joe Barton 

2107 Rayburn House Office Building 

Washington, DC 20515 

American 

Heart 

Association. 

<t; 0 

mended h~~its Pediatrll: Congenital HettrtAtROdl!ltlon 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

Representative Kathy Castor 

2052 Rayburn House Office Building 

Washington, DC 201515 

Dear Senators Grassley and Bennet and Representatives Barton and Castor: 

On behalf of the millions of volunteers, families, and kids dedicated to improving the health and quality 

of care for patients with cardiovascular disease, including congenital heart defects, we are writing to 

offer our support for the Advancing Care for Exceptional Kids Act of 2017, or the ACE Kids Act (S. 428). 

We urge Congress to pass this bill into law and establish better coordination of care for our medically 

complex children. 

Congenital heart defects are the most common birth defect In the United States. Nearly 40,000 infants 

are born with some type of congenital heart defect each year. Thanks to advances in research, 

treatments, and early detection and diagnosis, most infants born with a congenital heart defect now 

survive and live longer lives. It Is estimated that there are at least 2.4 million Individuals living in the 

United States with a congenital heart defect. However, survivors, particularly those with more complex 

forms of congenital heart defects, are more likely to develop additional heart problems later In life and 

have co-morbidities that need coordinated care throughout the life-span. Unfortunately, many of these 

survivors do not receive the care they need. 

Therefore, we support the ACE Kids Act and efforts to improve care for children with complex medical 

conditions, such as congenital heart defects. Specifically, the creation of Enhanced Pediatric Health 

Homes (EPHH) and nationally designated children's hospital networks would improve coordination of 

care for children with serious congenital heart defects by linking pediatric resources across multiple 

providers. These networks would also help to remove barriers to highly specialized care by allowing kids 

covered by Medicaid and the Children's Health Insurance Program to access the full range of care they 

need, including providers across state lines. 

As a part of the EPHH, care coordination and transition services are vital to the long-term outcomes for 

children with CHD. Providing children with the right care, from the right providers, at the right time is 

critical to the long-term success of these children. The fee-for-service health care system has resulted in 

fragmentation of care for children with a CHD. This legislation creates a state option in Medicaid in 
123 


36069.065

which the payment model would follow the structure of Medicaid Health Homes. States, working with 

CMS, will be encouraged to develop alternative payment methodologies involving risk sharing and 

performance-based models. We strongly advocate for patient/family engagement in the development of 

these models, as well. 

The ACE Kids Act would also collect data and develop standards of care to help researchers and 

providers Improve treatments for kids with congenital heart defects. Increased care coordination and 

data collection are not only critical to improving health outcomes for kids with congenital heart defects 

but to reducing health care costs, too. 

We have made tremendous progress in our understanding and treatment of congenital heart defects, 

but we have a long way to go. People with congenital heart defects still face life-long health risks, and 

the ACE Kids Act is an important step towards helping these kids live longer, healthier lives. 

We thank you for your support on this important issue and look forward to working together with you to 

move this legislation through Congress. 

Sincerely, 

Adult Congenital Heart Association 

American Heart Association 

Mended Little Hearts 

Pediatric Congenital Heart Association 
124 


36069.066

AAP Headquarten 

345 ParkBtvd 

Itasca, IL 60143 

Phone: 6301626-6000 

Fax; 647f434-8000 

E-mail: kldsdocs@aap.org 

www.aap.org 

Reply to AAP Washington Office 

60113thSINW,Suite400N 

Washington, DC 20005 

Phone: 202f347..S600 

E-mail: kids1sl@aap.org 

Executive Committee 

President 

Colleen A. Kraft, MD, FMP 

Prealdtmt..flect 

Kyle Yasuda, MD, FAAP 

Immediate Past President 

Femando Stein, MD, FMP 

CEO/Executive Vice 

President (Interim) 

Mark Del Monte, JO 

Board of Directors 

District! 

Wendy S. Davis, MD, FMP 

Burlington, VT 

District II 

Warren M. Seigel, MD, FAAP 

Brooklyn, NY 

District Ill 

David I. Bromberg, MD, FAAP 

Frederick, MD 

Dletrlct!V 

Jane Meschan Foy, MD, FAAP 

IAfinston-Salem, NC 

OlstrletV 

Richard H. Tuck, MD, FAAP 

Zanesville, OH 

District VI 

Pam K. Shaw, MD, FAAP 

Kansas City, KS 

District VII 

Anthony D. Johnson, MD, FAAP 

Little Rock, AR 

District VIII 

Martha C. Middlemlst, MD, FMP 

Centennial, CO 

DlstrlcttX 

Stuart A. Cohen, MD, FAAP 

San Diego, CA 

D!strlctX 

Ll:!!a A. Cosgrov&, MD, FMP 

Merritt Island, FL 

American Academy of Pediatrics DEDICATED TO THE HEALTH OF ALL CHILDREN• 

July 30, 20 18 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

Washington, DC 20515 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, DC 20515 

Dear Congressman Barton and Congresswoman Castor: 

On behalf of the American Academy of Pediatrics (AAP), a non-profit professional 

organization of 67,000 primary care pediatricians, pediatric medical subspecialists, and pediatric surgical specialists dedicated to the health, safety and 

well-being of infants, children, adolescents, and young adults, I write to share our 

support for H.R. 3325, the Advancing Care for Exceptional (ACE) Kids Act. 

This legislation seeks to address existing challenges facing children with complex 

medical conditions by improving the coordination of care across multiple providers 

and services. Additionally, the legislation would incentivize states to expand access 

to patient-centered, pediatric-focused coordinated care models tailored for children 

with medical complexity, which can lead to improved quality of care for this 

population. 

The ACE Kids Act directs the Secretary of the Department of Health and Human 

Services to evaluate and promulgate guidance on best practices for ensuring that 

children with complex medical conditions receive prompt care from out-of-state 

providers, a challenge that many pediatricians, pediatric sub-specialists and 

pediatric surgical specialists face when providing care to this population. The 

legislation also includes a focus on robust data collection, quality improvement and 

coordination between the child's medical home and the specialty care that is often 

outside the child's home community. 

Children with medical complexity, as do all children, deserve access to the highest 

quality care in a medical home. We thank you for your leadership in introducing 

this critical legislation. If you have any questions, please contact Marie lie Kress in 

our Washington, D.C. office at 202/347-8600 or mkresslalaap.org. 

Sincerely, 

Colleen A. Kraft, MD, MBA, F AAP 

President 
125 


36069.067

2018 Board of Directors 

Ann E. Burke, MD 

Cflalr 

Anna R. Kuo, MD 

Chair-Elect 

David A. Gremse, MD 

Immediate Past Chair 

Victoria F. Norwood, MD 

Secretary-Treasurer 

David G. Nichols, MD, MBA 

President and CEO 

Suzanne K. Woods, MD 

Executive VIce President 

Patrick D. Brophy, MD 

Stephanie D. Davis, MD 

John G. Frohna, MD, MPH 

Rutledge Q. Hutson, JD, MPH 

H. Stacy Nicholson, MD 

Diane M. Pickles 

OeWayne M. Pursley, MD 

Robin H. Stelnhorn, MD 

Brad C. Weselman, MD 

Vice Presidents 

Linda A. Althouse, PhD 

Carol L Carracclo, MD, MA 

Sandra W. Gainey 

Ann E. Hazinski, MBA, CPA 

laurel K. Leslie, MD, MPH 

Virginia A. Moyer, MD. MPH 

Michele J. Wall, MA 

Oongming Zhang, MS, MLS 

THE AMERICAN BOARD of PEDIATRICS 

111 Silver Cedar Court, Chapel Hill, North Carolina 27514-1513 

Phone: (919) 929-0461 • Fax: (919) 929·9255 • abpeds@abpeds,org • www.abp.org 

The Honorable Chuck Grassley 

135 Hart Senate Office Building 

Washington, D.C. 20510 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

July 25, 2018 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Sens. Grass ley and Bennet and Reps. Barton and castor: 

On behalf of The American Board of Pediatrics, I wish to express our support for S. 428 

and H.R. 3325, The Advancing Care for Exceptional Kids Act of 2017 (The ACE Kids Act). 

Thank you for your leadership in Introducing this bipartisan legislation to improve care for 

children with complex medical conditions. 

The American Board of Pediatrics certifies more than 80,000 pediatricians In the United 

States based on standards of excellence that lead to high quality health care for children. 

Board-certified pediatricians have demonstrated standards that exceed those required for 

licensure alone. Hence the ACE Kids Act is entirely consistent with our vision of improving 

the health of children. 

We are well aware that children with complex medical conditions have chronic life-limiting 

illnesses and disabilities that often require the coordination of medical care by multiple 

medical specialists and subspeclallsts. The ACE Kids Act creates a patient-centered 

delivery system for this unique population of children. It will also greatly reduce the 

burden on many families by ensuring ready access to care across state lines, which Is 

often required due to the highly specialized nature of the care. 

Under the ACE Kids Act, specially-designed health homes for children with complex 

medical conditions would: 

employ national quality standards and coordinate care, both essential to 

improving quality of care and lowertng costs. 

Include a full range of acute, post-acute and primary care providers, as well as 

behavioral health professionals. 

focus on outpatient treatment to ensure children get the care that they need in 

the most appropriate settings closest to home, while reducing unnecessary 

hospitalizations and emergency room visits. 

Providing the most appropriate care for these children is a national challenge. The ACE 

Kids Act will bring us closer to ensuring these vulnerable children receive the care they 

need. Thank you for your work on behalf of children and their families. 

Sincerely, , p 

y,; ..(.. if. M ~.L 

David G. Nichols, MD, MBA 

President & CEO 

The American Board of Pediatrics 

A MEMBER OF THI: A.MERICAN 60MID OF MEOIC.U SPECIAI.T!ES 
126 


36069.068

AMERICAN 

COLLEGE of 

CARDIOLOGY 

HcanHousc 

2400 N Street, NW 

washington, DC 2003H153 

USA 

202-375-6000 

800-253-4636 

Fax: 202-375·7000 

www.ACC.org 

l'rnidcm 

C. Michael Valentine, MD, FACC 

\1«Pmidml 

Richard J. Kovacs, MD, FACC 

lmmfdi,,rr.Past Pmidt•tl 

Mary Norine Walsh, MD, MACC 

Trt<~Juur 

Howard T, Walpole, MD, MBA, FACC 

Srrnlmymul s,,,J ~rrra/~'rtUJ>T (;!,;, 

Andrew P. Miller, MD, FACC 

Tn•ttm 

Cathleen Blga, MSN, RN 

Paul N. Casale, MD, MPH, FACC 

Edward T.A. Fry, MD, FACC 

Robert C. Hendel, MD, FACC 

Akshay Khandelwa!, MD, FACC 

Richard J. Kovacs, MD, FACC 

Christopher M. Kramer, MD, FACC 

Michael J. Mack, MD, FACC 

Andrew P. MUier, MD, FACC 

Daniel Jose Pineiro, MD, FACC 

C. Michael IJalentine, MD, FACC 

Howard T. Walpole, MD, MBA, fACC 

B. Hadley Wilson, MD, FACC 

!t~trrim (.'birfEurntiw OJJi•YT 

Cathleen C. Gates 

August 15,2018 

The Honorable Chuck Grassley 

135 Hart Senate Office Building 

Washington, D.C. 20510 

The Honorable joe Barton 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Senator Grassley, Senator Bennet, Representative Barton and Representative Castor: 

On behalf of the American College of Cardiology (ACC), we are writing to express our 

support for S. 428/H.R. 3325, the Advancing Care for Exceptional Kids Act of 2017 (ACE 

Kids Act). Thank you for introducing this legislation to improve care for children with 

complex medical conditions. 

The ACC is a 52,000-member medical society that is the professional home for the entire 

cardiovascular care team. The College's mission is to transform cardiovascular care and 

improve heart health. The ACC leads in health policy formation, standards and guidelines. 

The College operates national registries to measure and Improve care, provides 

professional medical education, promotes cardiovascular research and bestows 

credentials on cardiovascular specialists who meet stringent qualifications. 

The ACE Kids Act would improve care coordination for children with medical 

complexities on Medicaid, especially in instances when they would need to visit multiple 

providers across state lines. Specially-designed health homes would employ national 

quality standards and coordinate care, and include the full range of acute, post-acute and 

primary care providers, as well as behavioral health professionals. This legislation 

clarifies that the program would be voluntary for states, providers, and families, and work 

within the existing structure of a state's Medicaid program, including those states with 

Medicaid managed care. It would also enable the gathering of national level data on rare, 

complex conditions to determine best practices. These are laudable goals that aim to help 

our most vulnerable patients, and are in complete alignment with ACC's mission. 

Of the more than 30 m!Hion children covered by Medicaid, two million have complex 

medical conditions such as cancer or congenital heart defects. Congenital heart disease 

(CHD), a life-long consequence of a structural abnormality of the heart present at birth, is 

the number one birth defect in the nation. CHDs affect nearly 1% of-or about 

40,000-births per year in the United States. While the diagnosis and treatment of CHD 

has greatly improved over the years, most patients with complex heart defects need 

special care throughout their lives. CHD patients would benefit from the array of 

outpatient and community services provided by the ACE Kids Act 

The ACC commends you for your leadership in addressing the needs of medically complex 

children. We look forward to working with you to advance this crucial legislation. 

Sincerely, 

C. Michael Valentine, MD, FACC 

President, American College of Cardiology 
127 


36069.069

Association of Medical School Pediatric Department Chairs 

Executive Office: 6728 Old Mclean Village Drive • Mclean, VA 22101-3906 

Phone {703) 556-9222 • Fox {703) 556-8729 • www.amspdc.org • info@omspdc.org 

July 24, 2018 

The Honorable Chuck Grassley 

135 Hart Senate Office Building 

Washington, D.C. 20510 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Sens. Grassley and Bennet and Reps. Barton and Castor: 

On behalf of the Association of Medical School Pediatric Department Chairs (AMSPDC), we axe writing to express our 

support for S. 428 and H.R. 3325, The Advancing Care for Exceptionall<ids Act of 2017 (The ACE !<ids Act). 

We thank you for your leadership in introducing this bipartisan legislation to improve care for children with 

complex medical conditions on Medicaid. 

Children with complex medical conditions have chronic life-limiting illnesses and disabilities, often see six or 

more specialists and a dozen or more physicians> and require care that takes them across state lines. Under the 

current Medicaid system, parents of children with multiple, life-threatening disabilities struggle to coordinate the 

complex care of their kids, which often requires care of providers in several states. Only federal legislation can fix 

the fragmented system for children with complex medical conditions that require regional care. 

The ACE Kids Act creates a patient-centered, pediatric-focused delivery system for this unique population of 

children to ensure ready access to care across state lines and reduce the burden on these children's families. 

Specially-designed health homes created for children with complex medical conditions under the ACE I<ids Act 

would employ national quality standards and coordinate care, both essential to improving quality of care and 

lowering costs. These health homes would include the full range of acute, post-acute and primary care providers, 

as well as behavioral health professionals. The health homes would focus on outpatient care to ensure children 

get the care that they need in the most appropriate settings closest to home, while reducing unnecessary 

hospitalizations and emergency room visits. 

The ACE !<ids Act, which is voluntary for states, families and providers, can deliver savings to Medicaid through 

increased efficiencies, including reducing hospitalizations and emergency room visits) while providing the array of 

outpatient and commuuity services and support needed by these children. We are happy to support this 

important legislation. 
128 


36069.070

Providing children with complex medical conditions enrolled in Medicaid the best possible care is a national 

challenge and the ACE Kids Act will bring us closer to ensuring these vulnerable children receive the care 

they need. We thank you for championing the ACE Kids Act and look forward to working with you to 

advance this critical legislation this year. 

Sincerely, 

Michael Artman, MD 

President, AMSPDC 

Joyce C. Hall Eminent Scholar in Pediatrics 

Senior Vice President, Pediatrician-in-Chief 

Children's Mercy Hospital 

Chairman, Department of Pediatrics 

University of Missouri-Kansas City School of Medicine 

University of Kansas School of Medicine 
129 


36069.071

AFAUTlSM SOClETY --- lmpml'ing tiH' Li11Cs of All AJJccfcd by Autism 

August 20, 2018 

The Honorable Kathy Castor 

U.S. House of Representatives 

Washington, D.C. 20515 

Dear Representative Castor, 

4340 East West H1ghway. Su!!e 350 

Bethesda, MD 20814 

Phone: 301657.0081 

Fax: 301.657 0869 

Email: info@autism-society.org 

Web site: www.autism·socie!y.org 

The Autism Society of America writes to thank you for your leadership on Introducing the bipartisan Advancing Care for Exceptional Kids Act of 2018 (ACE Kids Act, H.R. 3325). The ACE Kids Act 

creates the opportunity for states to provide coordinated care through enhanced pediatric 

health homes (EPHHs) to children with complex medical conditions. 

For too long we have seen families of children born with disabilities struggle to find comprehensive care plans that follow their child through crucial transition periods. This bill creates organized care plans for children, supports for the family, a health information technology system to 

link services and access to a full range of both specialty and subspecialty medical services. 

Most importantly, this bill removes some of the stress families deal with by providing adequate 

treatment and support for so many people who have a challenging situation. 

Thank you again for introducing this important bill. The Autism Society is pleased to support this 

bill and work with you and the rest of the Congress to pass this bill into law. 

Sincerely, 

Joe Joyce 

Chair, Autism Society 
130 


36069.072

AUTISM 

SPEAKS" 

June 21, 2018 

The Honorable Chuck Grassley 

135 Hart Senate Office Building 

Washington, D.C. 20510 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Senators Grassley and Bennet and Representatives Barton and Castor: 

On behalf of Autism Speaks, we are writing to express our support for S. 428 and H.R. 3325, The 

Advancing Care for Exceptional Kids Act of 2017 (The ACE Kids Act). We thank you for your leadership in 

introducing this bipartisan legislation to improve care for children with complex medical conditions on 

Medicaid. 

Autism Speaks is dedicated to promoting solutions, across the spectrum and throughout the life span, 

for the needs of individuals with autism and their families. We do this through advocacy and support; 

increasing understanding and acceptance of autism spectrum disorder; and advancing research into 

causes and better interventions for autism spectrum disorder and related conditions. 

The majority of children with autism aspectrum disorder have co-occurring developmental, psychiatric 

or neurological disorders. In addition, children with autism often have other co-occurring medical 

conditions such as gastrointenstinal disturbances, sleep problems, and seizure disorders. As a result, 

children with autism often may see many clinicians- including physicians and multiple specialists. 

Children with autism who have significant needs may require care that takes them across state lines. 

Under the current Medicaid system, parents of children with multiple, life-threatening disabilities 

struggle to coordinate the complex care of their kids, which often requires care of providers in several 

states. Only federal legislation can fix the fragmented system for children with complex medical 

conditions that require regional care. 

The ACE Kids Act creates a patient-centered, pediatric-focused delivery system for this unique 

population of children to ensure ready access to care across state lines and reduce the burden on these 

children's families. Specially-designed health homes created for children with complex medical 

conditions under the ACE Kids Act would employ national quality standards and coordinate care, both 

essential to improving quality of care and lowering costs. These health homes would include the full 

range of acute, post-acute and primary care providers, as well as behavioral health professionals. The 

health homes would focus on outpatient care to ensure children get the care that they need in the most 

1990 K Street NW, 2nd Floor, Washington, DC 20006 P: (202) 955-31111 F: (212} 252-8676 
131 


36069.073

appropriate settings closest to home, while reducing unnecessary hospitalizations and emergency room 

visits. 

The ACE Kids Act, which is voluntary for states, families and providers, can deliver savings to Medicaid 

through increased efficiencies, including reducing hospitalizations and emergency room visits, while 

providing the array of outpatient and community services and support needed by these children. We are 

happy to support this important legislation. 

Providing children with complex medical conditions enrolled in Medicaid the best possible care is a 

national challenge and the ACE Kids Act will bring us closer to ensuring these vulnerable children receive 

the care they need. We thank you for championing the ACE Kids Act and look forward to working with 

you to advance this critical legislation this year. If you have any questions please contact 

angela.lello@autismspeaks.org at (202) 955-3111 ext. 58677. 

Sincerely, 

Stuart Spielman 

Senior Policy Advisor and Counsel 

1990 K Street NW, 2nd Floor, Washington, DC 20006 P: (202) 955-31111 F: (212) 252-8676 
132 


36069.074

September 6, 2018 

<; ,<\_L_U:'()_~~il' 

CHILDREN'S 

HOSPITAL 

ASSOCIATION 

The Honorable Joe Barton 

U.S. House of Representatives 

2107 Rayburn House Office Building 

Washington, DC 20515 

SUBJECT: H.R. 3325 (BARTON) ADVANCING CARE FOR EXCEPTIONAL KIDS ACT 

SUPPORT 

Dear Representative Barton: 

12:J')K~TI{Hl,2,Uil( 1930 

)A(HAMENTO, CA 05814 

916,55:.!.11 11 

www.1:d!J.org 

On behalf of the California Children's Hospital Association (CCHA). representing California's eight free-standing, not-forprofit children's hospitals, I write in SUPPORT of your H.R. 3325, the Advancing Care for Exceptional Kids Act (ACE Kids 

Act). which will expand access to patient-centered, pediatric-focused coordinated care models tailored for children with 

medical complexity, while simultaneously reducing program spending. 

Medicaid covers over 37 million children, and a small percentage of these kids have complex medical conditions requiring 

ongoing and specialized care. In fact, their care accounts for significant percentage of all Medicaid spending on children. 

The ACE Kids Act addresses existing challenges- identified by families and physicians- facing these children, including 

the provision and coordination of care across multiple providers and services, and easing access to out~of-state care. 

The ACE Kids Act adopts a proven approach for treating kids with medical complexity, as demonstrated through the CMS 

Innovation Center, formerly the Center for Medicare and Medicaid Innovation (CMMI). The ACE Kids model reduced costs 

and improved quality based on the documented care of thousands of medically complex children. CMMI's Coordinating 

All Resources Effectively (CARE) award involving 10 children's hospitals and eight different state Medicaid programs, 

including DC reduced emergency department visits by 26 percent and reduced inpatient days by 32 percent. In the 

first full year of operations coordinating care for 8,000 children, CARE ultimately reduced overall costs by 2.6 percent 

while improving patient experience. The ACE Kids Act would enable these innovations to spread nationally, and create a 

national framework to improve data collection and quality of care. It will allow for better coordination for out-of-state 

care, and spur innovation and the sharing of best practices between states. 

Importantly, the ACE Kids Act would be optional for states, providers and families. It would also work within the existing 

structure of a state's Medicaid program, including those states, like California, with Medicaid managed care. The bill 

would allow for the creation of enhanced pediatric health homes and provide incentives for states to participate. 

For all of these reasons, CCHA is pleased to SUPPORT your H.R. 3325 (Barton). the ACE Kids Act, which will improve 

Medicaid for the sickest children and reduce program spending. 

Sincerely, 

~~ 

Mira Morton 

Director of Government Relations 

Cc: The Honorable Doris Matsui 

The Honorable Anna Eshoo 

The Honorable Tony Cardenas 
133 


36069.075

.July 3, 201B 

The Honorable Chuck Grassley 

135 l·hlt't Sen"'" ( )fficc Building 

\"X/ashington, D.C. 20510 

The Honorable .Jm: Barton 

2107 Rayburn House Office Building 

W"shington, D.C. 20515 

Rc: S. 428 and H.R .. 1325 

Believing in the spirit of a child . 

The Honorable Michael Bennet 

2o1 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2ll52 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Scm;, Grassk·~· and Benner and Reps. Barton and Castor: 

ChildJen't' prodd<.•s care to nearly 5,000 children per year in Iowa with special hcalthcare nccds 1 including 

some with the most medically complex conditions. ( )m mission is to partner with families to help 

children with special healthcare needs live a .wwlf life. On behalf of ChlldSerw, I am writing to express our 

support for S. 42H ""d H.R. 3325, The Advancing Care for Exceptional Kids Act of2017 (fhe ACE Kids 

Act). We thank you for your leadership in introducing this bipartisan legislation to improve care for 

children with complex medical conditions on l'vlcdicaid. 

Children with complex tmxlical conditions have chronic lifc-limiring illnesses and disabilities that often sec 

several specialists ant! multiple physicians, and require care that can take them across stare lines. Under 

the currcnr Medicaid system~ parents of children with complex conditions struggle to coordinate the care 

their children need, which includes prm·iclcrs in n1ultiplc locations and even our of state. Only federal 

lcgislatiun that creates regional systems of care can fix the fragmented systctn for children with complex 

medicfll conditions .. 

The .ACE Kids .\ct, which is ,·oluntary for states, f~milics and providers, creates a patient~centercd, 

pediatric~ focused delivery srsrcm for this unique population of children to ensure ready access to care 

across state lines and reduce the burden on tlu.!Sc children's farn.iJics. Specially-designed health homes 

created for children with complex medical conditions under tlw :\CE Kids Act would employ national 

quality standards and coordinate care, both cssc.;nri~tl to improving quality of care find lowering costs. 

These health homes would include the full range of acutt', post-acute :and primaty care providers, as well 

m; behavioral health professionals. The health homes would focus on outpatient care to ensure children 

t,tet the care tlun they need in rhc most appropriHtc scrrings closest to home, while reducing unnecessary 

hospitalizations and emergency room visits. 

"'y;'~ "';{•""% \'% ~ " TI ?f 1f \ S ' "';"r ' ",_ ~ 

"~ ' ~ ~ :5405 Mette Hay Rd .. • eo~ Sox?:07 • Johnston. JA 50131 • 51fFf21,8750 • FAX 515-727"6757 • www.cht!dserve org 
134 


36069.076

Senators Grassley & Bennet / Representatives Barton & Castor 

July 3, 2018 

Page 2 

The ACE Kids Act can deliver savings to Medicaid through increased efficiencies, including reducing 

hospitalizations and emergency room visits, while coordinating the array of outpatient and community 

services and support needed by these children. We are happy to support this important legislation. 

Providing children with complex medical conditions enrolled in Medicaid the best possible care is a 

national challenge and the ACE Kids Act will bring us closer to ensuring these vulnerable children receive 

the care they need. We thank you for championing the ACE Kids Act and look forward to working with 

you to advance this critical legislation this year. 

Sincerely, 

Teri ~ Wablig, MD, MBA 

ChildServe 

Chief Executive Officer 
135 


36069.077

Foundation to Eradicate Duchenne 

f~O. Box 2371, Alexdndl'ia,VA 22301 Phone 703 683 7500 • Fnx 703 683 4482 www.duchennemd.org 

The Honorable Chuck Gmssley 

'135 Hart Senate Office Building 

Washington, D. C. 20510 

The Honorable Joe Barton 

joel Wood President 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Michael Bennet 

261 Russell Senate Office Bnilding 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Sens. Grassley and Bennet and Reps. Barton and Castor: 

On behalf of the Foundation to Eradicate Duchenne, I am writing to express our support for 

S.428 /H.R.3325, The Advancing Care for Exceptional Kids Act of 2017 (fhe ACE Kids 

Act). We thank you for your leadership in introducing this bipartisan legislation to improve 

care for children with medical complexity on Medicaid. 

Duchenne Muscular Dystrophy is the world's #!lethal childhood !,>enetic disorder and only 

effects boys and young men. Duchenne is a relentless disease that recjuires a complex set of 

treatments and constant vigilance on behalf of patients, their parents and the dedicated 

medical professionals who provide care. Due to the frequency and high cost of care, those 

battling Duchenne often rely on Medicaid for part or all of their medical care, and their 

parents act as de facto care coordinators. 

Children with complex medical conditions, like Duchenne, often see six or more specialists 

and a dozen or more physicians, and require care that takes them across state lines. Under 

the current Medicaid system, parents of children with multiple, life threatening disabilities 

struggle to coordinate the complex, multi-state care of their kids. 

The ACE Kids Act advances san organized system of health care delivery for this unique 

population of children to ensure ready access across state lines and to reduce the burdetl on 

their families. Nationally designated children's hospitals networks created under the ACE 

Kids Act would employ national quality standards and coordinate care, both essential to 

improving quality and saving money. These networks would include the full range of acute, 

post-acute and primary care providers, witl1 children's hospitals as anchors, and a focus on 

The Foundution to Eradicate Duchenne (E!N # 71 0874241) is a 501 (c) {3), 

lax exempt organi1.<1hon. Donat1ons to FED arc deductible to the tun extent of the law. 
136 


36069.078

outpatient care to ensure children get the care that they need in the most appropriate settings closest 

to home, while reducing hospitalizations and emergency room visits. 

We believe ACE Kids Act can improve quality of care for the millions of children with medical 

complexity in Medicaid, while at the same time strengthening the program. The Foundation is 

happy to join the more than 20 na tiona! organization devoted to children's well-being d1at have 

already come out in support of The ACE Kids Act. Providing the best possible care for children 

with medical complexity enrolled in Medicaid is a national challenge that needs a national solution 

and requires Congress to act. We thank you again for introducing the ACE Kids Act and we look 

forward to working with you to advance this legislation in Congress. 

Sincere! •, 

President & Founder 

The Foundation to Eradicate Duchenne 
137 


36069.079

July 10, 201s 

The Honorable Chuck Grasslcy 

135 Hart Senate Office Building 

Washington, D.C. 20510 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

www.iprc.info 

914-573-fPRC 

~)14·573-4772 

email: info@iprdnfo 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Sens. Grassley and Bennet and Reps. Barton and Castor: 

On behalf of The International Pediatric Rehabilitation Collaborative (IPRC), representing over 50 

pediatric rehabilitation provider organizations, we are writing to express our support for S. 428 and H.R. 

3325, The Advancing Care for Exceptional K:ids Act of2017 (fhe ACE Kids Act). We thank you for your 

leadership in introducing this bipartisan legislation to improve care for children with complex medical 

conditions on Medicaid. 

Children with complex medical conditions have chronic life-limiting illnesses and disabilities and require 

care from many specialists and physicians. That care often takes them across state lines as they obtain 

specialty services from multiple service providers, hospitals, and organizations. Under the current 

Medicaid system, parents of children with multiple, life-threatening disabilities struggle to coordinate the 

complex care of their kids, which often requires care of providers in several states from multiple provider 

entities. 

Only federal legislation can fix the fragmented system for children with complex medical conditions that 

require regional care. Many of our IPRC members provide services for these exceptional children and 

support their families as they experience this hardship. Improvements to the system are crucial. 

Addressing these barriers of excessive travel, payment restrictions, and limited communication among 

providers will reduce redundancy, improve ease of access, and streamline care. 

The ACE Kids Act creates a patient-centered, pediatric-focused delivery system for this unique population 

of children to ensure ready access to care across state lines and reduce the burden on these children's 

families. Specially-designed health homes created for children with complex medical conditions under the 

ACE Kids Act would employ national quality standards and coordinate care, both essential to improving 
138 


36069.080

quality of care and lowering costs. These health homes would include the full range of acute, post-acute 

and primary care providers, as well as behavioral health professionals. The health homes would focus on 

outpatient care to ensure children get the care that they need in the most appropriate settings closest to 

horne, while reducing unnecessary hospitalizations and emergency room visits. 

The ACE Kids Act, which is voluntary for states, families and providers, can deliver savings to Medicaid 

through increased efficiencies, including reducing hospitalizations and emergency room visits, while 

providing the array of outpatient and community services and support needed by these children. The 

International Pediatric Rehabilitation Collaborative is pleased to support this important legislation. 

Providing children with complex medical conditions enrolled in Medicaid the best possible care is a 

national challenge and the ACE Kids Act will bring us closer to ensuring these vulnerable children receive 

the care they need. We thank you for championing the ACE Kids Act and look forward to working with 

you to advance this critical legislation this year. 

Sincerely, 

Cindi M. Hobbes 

Director, International Pediatric Rehabilitation Collaborative 

300 E Park Drive Ste 300 I Harrisburg, PA 17111 I Phone: 914-573-4772 I www.iprc.info 
139 


36069.081

OFFICE OF GOVERNMENT AFFAIRS 

MARCH OF DIMES 

July 24, 2018 

The Honorable Chuck Grassley 

135 Hart Senate Office Building 

Washington, DC 20510 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

Washington, DC 20515 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, DC 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, DC 20515 

Dear Sens. Grassley and Bennet and Reps. Barton and Castor: 

T (202) 659-1800 

E advocacy@marchofdimes.org 

MARCHOFDIMES.ORG 

On behalf of the March of Dimes, a unique collaboration of scientists, clinicians, parents, members of the 

business community, and other volunteers representing every state, the District of Columbia and Puerto Rico, I 

would like to express our support for S. 428/H.R. 3325, the Advancing Care for Exceptional Kids Act of 2017 (ACE 

Kids Act). 

March of Dimes appreciates your leadership in introducing this bipartisan legislation to improve care for children 

with complex medical conditions on Medicaid. Infants and children 

with complex medical conditions and their families often face daunting obstacles In obtaining the care they need 

to be healthy, grow and thrive. Many such children see multiple specialists and providers and require care that 

takes them across state lines. Parents frequently struggle to coordinate this complex web of fragmented care. 

The ACE Kids Act creates a patient-centered, pediatric-focused delivery system for this unique population of 

children to ensure ready access to care across state lines and reduce the burden on these children's families. 

Specially-designed health homes created for children with complex medical conditions under the ACE Kids Act 

would employ national quality standards and coordinate care, both essential to improving quality of care and 

lowering costs. These health homes would include the full range of acute, post-acute and primary care 

providers, as well as behavioral health professionals. The health homes would focus on outpatient care to 

ensure children get the care that they need in the most appropriate settings closest to home, while reducing 

unnecessary hospitalizations and emergency room visits. 

Providing children with complex medical conditions enrolled in Medicaid the best possible care is a collective 

responsibility, and the ACE Kids Act will bring us closer to ensuring these vulnerable children receive the care 

they need. We thank you for championing the ACE Kids Act and look forward to working with you to advance 

this critical legislation. 

Sincerely, 

~~...f).-tf_l!p ,, 

Cy/thia Pellegrini ~ Senior Vice President for Public Policy and Government Affairs 
140 


36069.082

!'UIS!()l·S"I 

David Napier 

YomhHome,lnc 

LittleRock, Arkansas 

\"ICI PRr-.ml:'\ll'RL'\IDt.'.I-J·IH'I 

RicbardWollcaT 

NortbwoodChildron'$Services 

Duluth, Minnesota 

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P!ltridaJohns!on 

June 5, 2018 

The Honorable Chuck Grassley 

135 Hart Senate Office Building 

Washington, D.C. 20510 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Sens. Grass ley and Bennet, and Reps. Barton and Castor: 

On behalf of the National Association for Children's Behavioral Health, I writie to express 

our support for S. 428 and H.R. 3325, The Advancing Care for Exceptional Kids Act of2017 

(The ACE Kids Act). We thank you for your leadership in introducing this bipartisan 

legislation to improve care for children with complex medical conditions on Medicaid. 

Children with complex medical conditions have chronic life-limiting illnesses and 

disabilities, often see six or more specialists and a dozen or more physicians, and require care 

that takes them across state lines. Under the current Medicaid system, parents of children 

with multiple, life-threatening disabilities struggle to coordinate the complex care of their 

kids, which often requires care of providers in several states. Only federal legislation can fix 

the fragmented system for children with complex medical conditions that require regional 

care. 

The ACE Kids Act creates a patient-centered, pediatric-focused delivery system for this 

unique population of children to ensure ready access to care across state lines and reduce the 

burden on these children's families. Specially-designed health homes created for children 

with complex medical conditions under the ACE Kids Act would employ national quality 

standards and coordinate care, both essential to improving quality of care and lowering costs. 

These heaJth homes would include the full range of acute, post~acute and primary care 

providers, as well as behavioral health professionals. The health homes would focus on 

outpatient care to ensure children get the care that they need in the most appropriate settings 

closest to horne, while reducing unnecessary hospitalizations and emergency room visits. 

The ACE Kids Act, which is voluntary for states, families and providers, can deliver savings 

to Medicaid through increased efficiencies, including reducing hospitalizations and 

emergency room visits, while providing the array of outpatient and community services and 

support needed by these children. We are happy to support this important legislation. 

Providing children with complex medical conditions enrolled in Medicaid the best possible 

care is a national challenge and the ACE Kids Act will bring us closer to ensuring these 

vulnerable children receive the care they need. Thank you for championing the ACE Kids 

Act. We look forward to working with you to advance this critical legislation this year. 

Sincerely, 

?,(.$~ 

Patricia Johnston 

Executive Director 
141 


36069.083

NI\HONr'\l Pediatric~ """CIATIONOf Nurse 

Practitioners" 

June 28, 2018 

The Honorable Chuck Grassley 

135 Hart Senate Office Building 

Washington, D.C. 20510 

The Honorable Joe Barton 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

Headquarters 

5 Hanover Square 

Suite 1401 

New York, NY 10004 

P.917-746-8300 

www.napnap.org 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Sens. Grassley and Bennet and Reps. Barton and Castor: 

On behalf of more than 9,000 pediatric nurse practitioners and fellow pediatric-focused advanced practice 

registered nurses committed to providing optimal health care to children, the National Association of Pediatric 

Nurse Practitioners (NAPNAP) appreciates your leadership in introducing the "Advancing Care for Exceptional 

Kids Act of20 17 (ACE Kids Act)" (S. 428/H,R. 3325). Your legislation would provide critically needed help 

to improve care for children with complex medical conditions on Medicaid. NAPNAP and its members strongly 

support your efforts. 

As you know, advanced practice registered nurses (APRNs) who concentrate on children's care, including 

pediatric nurse practitioners (PNPs), are critically aware of the importance of stable, affordable health coverage in 

ensuring that families and their children receive the timely health care they need. Practicing in primary care, 

specialty, and acute care settings, APRNs dedicated to pediatric care have provided quality health care to children 

and families for more than 40 years in an extensive range of practice settings such as pediatric offices, schools, 

and children's hospitals- reaching millions of patients across the country every year. Our members diagnose, 

treat and refer for care the growing number of children facing the challenge of complex medical conditions. 

Pediatric-focused APRNs know that children with complex medical conditions have chronic life-limiting 

illnesses and disabilities, often see six or more specialists and a dozen or more pediatric providers, and require 

care that takes them across state lines. Parents of children with multiple, life-threatening disabilities struggle to 

coordinate their youngsters' complex care under the current Medicaid system, which often requires care 

furnished by providers in several different states. Only federal legislation can fix the fragmented system for 

children with complex medical conditions that require regional care. 

Thanks to your efforts, the ACE Kids Act would create a patient-centered, pediatric-focused delivery system for 

this unique population of children to ensure ready access to care across state lines and reduce the burden on 

these children's families. Specially-designed health homes created for children with complex medical 

conditions under the ACE Kids Act would employ national quality standards and coordinate care, both essential 

to improving quality of care and lowering costs. These health homes would include the full range of acute, 

post-acute and primary care providers, as well as behavioral health professionals. These health homes would 

focus on outpatient care to ensure children get the care that they need in the most appropriate settings closest to 

home, while reducing unnecessary hospitalizations and emergency room visits. 

The ACE Kids Act, which is voluntary for states, families and providers, can deliver savings to Medicaid 

through increased efficiencies, including reducing hospitalizations and emergency room visits, while providing 

the array of outpatient and community services and support needed by these children. NAPNAP and its 

members are happy to support this important legislation. 
142 


36069.084

and Bennet, und Reps. Barton and Castor Page 2 

Providing children with complex medical conditions enrolled in Medicaid the best possible care is a national 

challenge, and enactment of the ACE Kids Act will bring us closer to ensuring these vulnerable children receive 

the care they need. We are grateful to you for championing the ACE Kids Act, and we are eager to work with 

you to ensure that this critical legislation is enacted into law this year. Please feel free to contact NAPNAP for 

assistance on these or any issues or policies related to children's health care. We have a wide breath of experts 

ready and eager to assist you in framing a healthier future for our children. 

Sincerely, 

~e !L:u~L:_ Tresa E. Zielinsk(D~~ APN..NP, CPNP-PC 

President 
143 


36069.085

September 4, 2018 

The Honorable Joe Barton 

The Honorable Kathy Castor 

United States House of Representatives 

Washington, D.C. 20515 

Dear Congressman Barton and Congresswoman Castor: 

On behalf of the National Down Syndrome Society, the leading human rights organization for all 

individuals with Down syndrome, I am writing to express our support for H.R. 3325, the 

"Advancing Care for Exceptional (ACE) Kids Act of2017." We commend you for your 

leadership in sponsoring this legislation. 

NDSS is the largest nonprofit organization dedicated to advocating for people with Down 

syndrome and their families at the federal, state and local levels of government. We are at the 

forefront of public policy efforts to improve the quality ofhealthcare provided to people with 

Down syndrome. H.R. 3325 is one such effort because it will improve the process by which 

children with Down syndrome who participate in the Medicaid program, and who also have 

other complex medical conditions, are able to obtain quality care and coordinated treatments. 

According to the National Institutes of Health (NIH), at least one-half of all children with Down 

syndrome also have co-occurring conditions that contribute to the medical complexity of 

Trisomy 21. Leukemia and congenital heart disease are examples of common afflictions early in 

life that necessitate extensive medical intervention. Other common co-occurring conditions 

include obstructive sleep apnea, seizure disorders, neurobehavioral problems, pulmonary 

hypertension, thyroid diseases, celiac disease, gastrointestinal defects, Type 1 diabetes, immune 

system dysfunction, and metabolic dysfunction. 

Because their complex medical conditions can be costly, many children with Down syndrome 

depend on state-based Medicaid programs. But they also require specialized care in centers of 

excellence, often times outside of their state, and Medicaid rules can limit access to coordinated 

care. 

H.R. 3325 creates a mechanism for states to participate in a national framework for children with 

Down syndrome who also have other complex medical conditions, as well as other children with 

medical complexities and their families, to receive cost-effective and coordinated health care and 

support. This framework could significantly reduce the necessity for more extensive medical 

interventions later in life, thus improving the long-term financial viability of the Medicaid 

program. 
144 


36069.086

The Honorable Joe Barton 

The Honorable Kathy Castor 

September 4, 2018- Page 2 

Thank you for your leadership and support on this important issue. NDSS welcomes the 

opportunity to work with you to advance this legislation. 

Sincerely, 

Sara Hart Weir, MS 

President & CEO 

National Down Syndrome Society 
145 


36069.087

··;. 

KAA Tricare 

for kids 

COALITION 

July 10,2018 

The Honorable Chuck Grass ley 

135 Hart Senate Office Building 

Washington, D.C. 20510 

The Honorable joe Barton 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Michael Bennet 

261 Russell Senate Office Building 

Washington, D.C. 20510 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Sens. Grass ley and Bennet and Reps. Barton and Castor: 

The Tricare for Kids Coalition is a stakeholder group of children's health care advocacy and 

professional organizations, disability advocacy groups, military and veterans' service 

organizations and military families committed to ensuring that Tricare meets the unique 

health needs of the more than two million children of military families covered by Tricare. 

While all children have unique needs as compared to adults, military children face unique 

experiences due to the very nature of their parents' service. 

The Coalition writes to express support for S. 428 and H.R. 3325, The Advancing Care for 

Exceptional Kids Act of 2017 (The ACE Kids Act). We thank you for your leadership in 

introducing this bipartisan legislation to improve care for children with complex medical 

conditions on Medicaid. 

Children with complex medical conditions have chronic life-limiting illnesses and 

disabilities, often see many physicians and specialists, and require care that takes them 

across state lines. Under the current Medicaid system, parents of children with multiple, 

life-threatening disabilities struggle to coordinate the complex care of their kids. Only 

federal legislation can fix the fragmented system for children with complex medical 

conditions that require regional care. 
146 


36069.088

While military families may not be the first population that comes to mind when 

considering the ACE Kids Act, it is imperative to note that more than 200,000 children of 

active duty and retiree military families covered by Tricare are also relying on Medicaid for 

coverage pertaining to their complex medical conditions. 

The ACE Kids Act helps ensure a patient-centered, pediatric-focused delivery system for 

this unique population of children to ensure ready access to care and reduce the burden on 

these children's families, specifically, coordination and integration of care among families 

and providers, which is critical for highly mobile military families who move frequently. 

Furthermore, the ACE Kids Act has promise as a model for care coordination and 

integration, that could help to transform complex pediatric care in Tricare and the military 

health system (MHS). One of the key findings of a recent Defense Health Board report on 

pediatric care is the continued and longstanding need for better care coordination for 

families of children with special and complex care needs, especially as these families PCS 

(move) across the country. 

The Tricare for Kids Coalition supports the ACE Kids Act both in order to meet the needs of 

military families whose children rely on Medicaid, and as a potential model for care 

coordination within Tricare and the military health system. 

Providing children of military families with complex medical conditions enrolled in 

Medicaid the best possible care is a national challenge; the ACE Kids Act will bring us closer 

to ensuring these vulnerable children receive the care they need, as well as build a 

foundation that may be able to serve as a model for improved care coordination for mobile 

military families. 

We thank you for championing the ACE Kids Act and look forward to working with you to 

advance this critical legislation this year. 

Sincerely, 

Kcwcv T oUetr Oal<lcy 

Kara Tollett Oakley 

Chair 
147 


36069.089

799 gtt> Street NW 

Suite 210 

Washington, DC 2000 1 

July 26, 2017 

The Honorable Joe Barton 

r (202) 354~2600 

VllJentmc com 

2107 Rayburn House Office Building 

Washington, D.C. 20515 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

Washington. D.C. 20515 

Dear Representative Barton and Representative Castor: 

vizient 

I am writing on behalf of Vizient, Inc. to offer our support for the "The Advancing Care for Exceptional Kids 

Act of 2017" (H.R. 3325- ACE Kids Act). We believe that protecting and strengthening care for our most 

vulnerable populations are essential steps in the pursuit of a better, more patient-centered health care 

delivery system. The ACE Kids Act represents meaningful, bipartisan work to improve the Medicaid 

program for children with medical complexity, and Vizient applauds the legislation. 

Vizient is the nation's largest health care performance improvement company. We serve a diverse 

membership that includes academic medical centers, pediatric facilities, community hospitals, integrated 

healthcare delivery networks and non-acute health care providers. Our headquarters are in Irving, Texas, 

with locations in Chicago, Washington, D.C., and other cities across the country. 

Our members have been on the front lines of delivery and clinical reforms, investing in and committed to 

efforts to fundamentally improve how care is delivered. These organizations provide critical health care 

services for their communities. Vizient strongly encourages legislation that protects and advances 

delivery system reforms that improve the quality of care, reduce expenses to Medicaid, and save patient 

lives. The ACE Kids Act would help achieve this triple-aim strategy by expanding access to patientcentered, pediatric-focused coordinated care for children with medical complexity, 

Vizient believes that empowering Americans through health coverage is critical to success in care. The 

ACE Kids Act makes sure that kids can access the coordinated care they need - across multiple 

providers and services. It reduces the burden on their families and addresses existing challenges in 

Medicaid coverage. On behalf of our members, we applaud this bipartisan legislation that takes a 

common sense approach to improving care for children who need it most. 

We thank you for your commitment to improving patient care for children with complex medical issues and 

their families and are pleased to offer our endorsement of the ACE Kids Act. 

Please do not hesitate to contact me at shoshana.krilo'll@ylzientinc.com or 202-354-2607 if you have any 

questions about Vizient or if there is any way we can be of assistance in supporting this legislation. 

Sincerely, 

Shoshana Krilow 

Vice President. Public Policy & Government Relations 
148 


36069.090

Medicare MEdpAC Payment Advisory 

Commission 

425 I Street, NW • Suite 701 

Washington, DC 20001 

202-2203700 • Foxo 202-220-3759 

www.medpoc.gov 

The Honorable Greg Walden 

Chairman 

Committee on Energy and Commerce 

U.S. House of Representatives 

2185 Rayburn House Office Building 

Washington, DC 20515 

The Honorable Michael Burgess, M.D. 

Chairman, Subcommittee on Health 

Committee on Energy and Commerce 

U.S. House of Representatives 

2336 Rayburn House Office Building 

Washington, DC 20515 

RE: Drug pricing and rebate data 

Dear Chairmen and Ranking Members: 

Fronds J. Crosson, M.D., Chairman 

Jon S. Christianson, Ph.D., Vice Chairman 

James E. Mathews, Ph.D., Executi\le Director 

September 4, 2018 

The Honorable Frank Pallone, Jr. 

Ranking Member 

Committee on Energy and Commerce 

U.S. House of Representatives 

237 Cannon House Office Building 

Washington, DC 20515 

The Honorable Gene Green 

Ranking Member, Subcommittee on Health 

Committee on Energy and Commerce 

U.S. House of Representatives 

2470 Rayburn House Office Building 

Washington, DC 20515 

The Medicare Payment Advisory Commission (MedP AC) is an independent, legislative branch 

agency established by the Balanced Budget Act of 1997 (P.L. 105-33) to provide expert policy 

and technical advice to the Congress on issues affecting the Medicare program. Medicare 

spending has grown substantially over the last decade, particularly for prescription drugs, placing 

an increasing financial burden on the taxpayers and beneficiaries who finance it. Congress plays 

a vital role in overseeing Medicare and solving these fiscal challenges so that the program 

remains secure for current and future beneficiaries. MedPAC serves as au important source of 

information and advice to the Congress as it exercises that oversight. To enable MedPAC to best 

advise the Congress on how to address the problems stemming from the high and rising costs of 

prescription drugs, I am writing to request a narrow change in law that would grant MedPAC 

staff access to important drug pricing and rebate data that other congressional agencies are 

already able to use. The change in statute is necessary because MedP AC is unable to access the 

data under existing statutory authority. 

MedP AC uses a wide variety of data in order to support the Congress' oversight of Medicare, 

and the Commission has a strong track record of protecting different types of proprietary and 

confidential information. For example, MedPAC uses and keeps secure the bids that private 

insurance plans submit under Medicare Parts C and D, data that Medicare Advantage plans 
149 


36069.091

Drug pricing and rebate data 

September 4, 2018 

Page 2 

submit on encounters between beneficiaries and their health care providers, and data on 

beneficiaries' use of prescription drugs. 

To ensure that the Congress has comprehensive and up-to-date information, MedP AC strives to 

use all available data pertinent to our analyses. The Commission uses these data to provide 

information to the Congress on spending by Medicare and its beneficiaries and to help the 

Congress develop policies to improve the value of taxpayer dollars used to finance the program. 

MedP AC delivers this information in mandated reports, congressional testimony, and frequent 

briefings to congressional staff. 

The large growth in drug spending has been a key contributor to the financial strain on Medicare 

and its beneficiaries. Today, Medicare spends more than $100 billion annually on prescription 

drugs under Parts B and D, and beneficiaries are exposed to more than $20 billion in cost sharing 

liability. For the last several years, cost sharing liability for drugs has grown at nearly 7 percent 

annually. Of particular concern is the growing number of beneficiaries who are exposed to very 

large cost sharing amounts when they take extremely high-priced drugs. 

Despite broad data access under its authorizing statute, MedP AC is unable to access important 

drug pricing and rebate information under Medicare Parts B and D, and under Medicaid, because 

of how specific places of the Social Security Act are constructed (for example, MedPAC is not 

specifically named in Section 1927(b )(3 )(D) of the Social Security Act as one of the entities with 

access to certain data detailing how much the Medicare program and its beneficiaries pay for 

prescription drugs). Because we lack these important data, we have been limited in the analysis 

and information we can provide to the Congress as it grapples with how to bring down the prices 

of drugs for beneficiaries and taxpayers. A statutory change giving us access to these data would 

enhance our capabilities for assisting the Congress on issues related to prescription drug costs. 

With these data, MedP AC staff could: 

o Assist Congress in understanding the true costs (net of rebates) of prescription 

drugs to beneficiaries and taxpayers under the Medicare program. 

o Evaluate different policy options that aim to bring down the prices of drugs and 

the cost sharing that beneficiaries face for their medicines at the point of sale. 

o Provide insight into how Part D plans manage the growth in drug prices. 

o Analyze the effects of market entry and competition on drug prices. 

MedP AC looks forward to continuing to support the Congress in developing approaches to 

payment that ensure beneficiary access to important therapies, while reducing costs for the 

Medicare program and its beneficiaries. I very much appreciate your consideration of this request 

for this statutory change, and I also appreciate the support that the Congress has long given to the 
150 


36069.092

Drug pricing and rebate data 

September 4, 2018 

Page 3 

Conunission. Should you have any questions about this request, please contact James E. 

Mathews, MedPAC's Executive Director, at (202) 220-3700. 

cc: 

The Honorable Kevin Brady 

Chairman 

Committee on Ways and Means 

U.S. House of Representatives 

1011 Longworth House Office Building 

Washington, DC 20515 

The Honorable Peter Roskam 

Chairman, Subcommittee on Health 

Committee on Ways and Means 

U.S. House of Representatives 

2246 Rayburn House Office Building 

Washington, DC 20515 

Sincerely, 

9~JC~ Francis J. Crosson, M.D. 

Chairman 

The Honorable Richard Neal 

Ranking Member 

Committee on Ways and Means 

U.S. House of Representatives 

341 Cannon House Office Building 

Washington, DC 20515 

The Honorable Sander Levin 

Ranking Member, Subcommittee on Health 

Committee on Ways and Means 

U.S. House of Representatives 

1236 Longworth House Office Building 

Washington, DC 20515 
151 


36069.093

Frank Pallone Jr. 

Ranking Member 

Energy and Commerce Committee 

U.S, 

2322A Raybum House Office Building 

Member Pallone: 

It has come to our attention that legislation is currently under consideration to 

permit the Medicaid and Payment and Access Commission (MACPAC) to 

access certain data on Medicaid rebates that are now 

statutorily only availabla to agencies of Health and 

Human Services. the Der,artment 

Medicaid and CHIP Payment 

and Access Commiss1on 

1800 M Street NW 

Suite 650 South 

Washington, DC 20036 

.. 202·273·2452 !ill 
152 


36069.094

2 

For example. there is currently bipartisan interest in looking at ways to address large price increases that 

occur over time. One option would be to eliminate the cap of 100 percent of average manufacturer price on 

the Medicaid rebate, an idea included in the Administration's drug pricing blueprint. Another potential 

option would be to escalate the inflationary penalty so that large price increases over a short period of 

time would incur additional rebates beyond those currently collected. In examining these options, MACPAC 

could use the rebate data to identify how many drugs hit the cap and the amount of additional rebate 

dollars that would be collected if the cap were removed. We could also use the rebate data to estimate 

how many products had a price increase over a certain threshold (e.g., a 20 percent increase in the past 

year) and what the rebates are currently for these products. CMS has been able to provide us some 

summary-level information that gives us a sense of the magnitude of these two options. However, without 

information at the drug level. we cannot determine whether these policies would have a singular effect or 

be concentrated on a selected number of manufacturers, drug classes, or beneficiaries. 

MACPAC appreciates the concerns of manufacturers about the sensitivity of raw drug rebate data and why 

the original legislation creating the rebate program included special protections for its use. MACPAC has 

been a responsible steward of multiple CMS data sources, however, and has a long track record of 

protecting sensitive information in its work. As an independent agency of the legislative branch, we look 

forward to having the opportunity to analyze the rebate data as part of our function of advising Congress 

and assure you that our data storage and analysis procedures would protect the integrity of this data 

source. 

Thank you for your willingness to consider a statutory change to provide access to these data. 

Sincerely, 

p~ /1~A- Penny Thompson 

Chair 

Medicaid and CHIP Payment 

and Access Commission 
153 


36069.095

"~'St. joseph's Children's Hospital 

BayCare Health System 

September 5, 2018 

The Honorable Greg Walden 

Chairman 

Committee on Energy and Commerce 

U.S. House of Representatives 

2125 Rayburn House Office Building 

Washington, DC 20515 

The Honorable Michael Burgess 

Chairman 

Health Subcommittee 

Committee on Energy and Commerce 

U.S. House of Representatives 

2125 Rayburn House Office Building 

Washington, DC 20515 

3001 W. Dr. Martin Luther King Jr. Blvd. 

Tampa, Florida 33607 

T. (813) 554-8500 

The Honorable Frank Pallone, Jr. 

Ranking Member 

Committee on Energy and Commerce 

U.S. House of Representatives 

2125 Rayburn House Office Building 

Washington, DC 20515 

The Honorable Gene Green 

Ranking Member 

Health Subcommittee 

Committee on Energy and Commerce 

U.S. House of Representatives 

2125 Rayburn House Office Building 

Washington, DC 20515 

Dear Chairman Walden, Ranking Member Pallone, Chairman Burgess and Ranking Member 

Green, 

As the President of St. Joseph's Children's Hospital in Tampa, Florida, I am writing to express my 

strong support for the Advancing Care for Exceptional Kids Act of 2017, often referred to as the 

ACE Kids Act (H.R. 3325). 

This legislation has the opportunity to make a significant, positive impact for millions of 

medically complex children and their families in the State of Florida and across our country, 

while also resulting in considerable savings for U.S. taxpayers. I am very pleased to have the 

opportunity to submit comments in support of its passage as the Health Subcommittee 

considers its merits. 

The ACE Kids Act aims to improve how we deliver critical health care services to children who 

are among the most medically complex and vulnerable in our country. In doing so, it also has 

the potential to save the U.S. government billions of dollars over the course of 10 years. It is a 

win all around- improving care for our most complex children, enhancing the quality of life for 

these kids and their families, and ensuring more efficient, effective use of limited healthcare 

resources. 
154 


36069.096

To do so, the legislation utilizes a 'health home' concept, facilitating coordination of care for 

medically complex children. 

Our direct experience with the health home concept at St. Joseph's Children's Hospital of 

Tampa allows me the ability to share with you first-hand just how impactful this model is for 

our most complex children and the families who love them. Roughly 16 years ago, a visionary 

pediatric critical care doctor named Dr. Daniel Plasencia created the Chronic-Complex Clinic, 

which is located on the campus of St. Joseph's Children's Hospital of Tampa. The Clinic today 

serves as a health home to approximately 700 children with complicated medical problems and 

severe disabilities, while additionally providing support to the entire family. 

Included among them is 5-year-old Lucia "Lucy" Ferlita, who is the only child living in the United 

States with a diagnosis of EMARDD, or early onset myopathy with areflexia, respiratory distress 

and dysphagia. Very little is known about this serious disease, which has left Lucy with low 

muscle tone and the need for a feeding tube to eat and a ventilator to breathe. Lucy requires 

nursing care 24 hours a day, seven days a week. The Chronic-Complex Clinic at St. Joseph's 

Children's Hospital of Tampa coordinates all aspects of her care. Lucy started kindergarten at 

her neighborhood elementary school just a few weeks ago in good health and good spirits. 

Our Chronic-Complex Clinic at St. Joseph's Hospital of Tampa also serves as the medical home 

of Lakota Lockhart of Plant City, Florida. Now 9 years old, Lakota was born with congenital 

central hypoventilation syndrome, a central nervous system disorder which causes his 

breathing to stop every time he falls asleep. The condition is extremely rare, affecting less than 

1,500 people throughout the world. Lakota spent the first 68 days of his life in the Neonatal 

Intensive Care Unit, where he underwent multiple surgeries to insert a feeding tube in his 

stomach and a breathing tube in his trachea. A team of pediatric specialists at the ChronicComplex Clinic provides his care, including a pulmonologist, neurologist and gastroenterologist. 

Lakota is a frequent visitor at the Clinic, where his continued love for his favorite superhero, 

Batman, remains a primary topic of conversation with those rendering his care. 

Finally, members may recall testimony delivered before this subcommittee in July 2016 by Tish 

West of Tampa, Florida, who is mother to Caroline West. Now 21 years old, Caroline has a rare 

neurological condition known as Alternating Hemiplegia of Childhood, which is only diagnosed 

in 800 people worldwide. As Caroline's mother described to this subcommittee, Caroline's 

condition impacts every aspect of her life. She has seizures, cannot eat by mouth, and is 

confined to a wheelchair. Caroline is developmentally delayed and has cerebral palsy. A team 

of nearly 30 different specialists is needed to care for Caroline to ensure her health and 

wellbeing. 
155 


36069.097

Better than any words I am able to write, Tish's own description to the Health Subcommittee 

two years ago is able to best convey the life-changing impact of the health home concept 

offered by the ACE Kids Act: "'We are 'normal' at our Clinic. We are not an outlier. Since 

coming to the Clinic, Caroline's health has improved and her hospitalizations have reduced 

tremendously. Our family feels welcome and embraced at the Clinic. All of the nurses and staff 

know Caroline and our family ... our entire family has benefited from this Clinic." 

In addition to my role as hospital president, I am also a caregiver- serving for many years as a 

pediatric and flight transport nurse. I feel passionately about doing all that we can to provide 

the best possible care for children and theirfamilies. 

The ACE Kids Act offers a mechanism by which we as a community of health care stakeholders 

might vastly improve the quality of life for our country's medically complex children and those 

who love them. I strongly support this legislation and urge the Health Subcommittee to 

support its passage. 

Thank you for your time, consideration and work to improve the health and wellbeing of our 

children. 

Sincerely, 

Kate Reed, RN 

President, St. Joseph's Children's Hospital 

Tampa, Florida 

Enclosures 

CC: Members of Energy and Commerce Committee 
156 


36069.098

Age: 5 

Hometown: Tampa, FL 

Hospital: St. Joseph's Children's Hospital 

Lucia, aka Lucy, is a bright and social 5-year-old girl who 

has a natural love for learning and enjoys puzzles, her !Pad 

and being with her mom, dad and little brother. She looks 

forward to going to her neighborhood elementary school 

five days a week with her private-duty nurse, where she will 

attend kindergarten next year. 

Lucy Is also the only person living in the United States with 

a diagnosis of EMARDD, or early onset myopathy with 

areflexia, respiratory distress and dysphagia. Very little is 

known about this serious disease that has left her with low 

muscle tone and the need for a feeding tube to eat and a 

ventilator to breathe. She requires nursing care 24 hours a day, seven days a week. 

Lucy appeared healthy at birth but began showing signs of distress when, at 8 weeks old, she stopped 

eating. Before she was even 6 months old, Lucy had undergone four surgeries to place a feeding tube, 

get a stomach wrap (Fun do Plication), conduct a muscle biopsy and insert a tracheotomy. 

The family searched for medical answers, struggled for resources to cover medical bills, and lived 

every day just hoping to keep their daughter alive. They truly knew what was at stake; Lucy's older 

brother, Vincent, was just 6 months old when he died from what doctors 

now know was the same disease. 

Fortunately, Lucy has found a medical home in the Chronic-Complex 

Clinic at St. Joseph's Children's Hospital. As a nationally recognized 

medical home for children with multiple life-threatening conditions, the 

Clinic coordinates all aspects of Lucy's highly specialized care. Her mom, 

Usa, credits the center for keeping her young daughter In good health 

and out of the emergency room. 

"The team at St. Joseph's Children's Hospital knows Lucy and her very 

particular, special needs," said Lisa. "Everything about Lucy's medical 

condition is complicated. Getting out of the house to go anywhere 

requires a tremendous amount of equipment and brings some risk to her 

delicate condition. But the progress Lucy has made since we found the 

Clinic Is remarkable. I cannot imagine managing her care without it." 

'4~ St. joseph's Children's Hospital 

BayCare Health System 
157 


36069.099

Luda's parents mapped out a care web to Hlustrate the many moving pieces and challenges they face in integrating 

coordination of her health care into everyday life. Lucia is the only person in the U.S. diagnosed with early onset 

myopathy with areflexia, respiratory distress and dysphagia (EMARD D). ID Red dot= must go wherever Lucia goes 

St. joseph's 

Children's Hospital 
158 


36069.100

Age:9 

Hometown: Plant City, FL 

Hospital: St. Joseph's Children's Hospital 

Lakota is an imaginative and energetic 9-yearold boy who loves to tell stories about his 

favorite superhero, Batman. 

He was born with congenital central 

hypoventilation syndrome, a central nervous 

system disorder which causes his breathing to 

stop every time he falls asleep. The condition 

is extremely rare, affecting less than 1,500 

people throughout the world. 

Lakota spent the first 68 days of his life in St. Joseph's Children's Hospital's Neonatal Intensive 

Care Unit, where he underwent multiple surgeries to insert a feeding tube in his stomach and a 

breathing tube in his trachea. 

He then transitioned to the hospital's Chronic-Complex Clinic, where he receives care from a team 

of pediatric specialists including a pulmonologist, neurologist and cardiologist. The Clinic serves 

as a medical home for patients like Lakota, and has been recognized nationally for its innovative 

work with medically complex children. 

"St. Joseph's Children's Hospital has been Instrumental in rny son's survival," said Lakota's mother, 

Krystal Lockhart. "From the moment we received the devastating diagnosis six years ago, to the 

life-saving care Lakota continues to receive today, the hospital's team of specialized caregivers 

have been there for us every step of the way. 

Lakota is typically covered by Medicaid and 

participates in Florida's Children's Medical Services 

Program, but is currently covered by commercial 

insurance. With a lifetime of speciallzed care and 

medical equipment in his future, this coverage is a 

critical lifeline to his family. 

Children's Hospital 
159 


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Lakota's family mapped out a care web to illustrate the many moving pieces and challenges they face in 

integrating coordination of his health care into everyday life. -e Red dot= must go wherever Lakota goes 

St. joseph's 

Children's Hospital 
160 


36069.102

Name: Caroline West 

Age: 21 

Hometown: Tampa, FL 

Hospital: St. Joseph's Children's Hospital 

She loves music, enjoys school and has even been to prom, but 

Caroline is definitely not a typical teenager. That's because a rare 

genetic condition has left her with severe physical and mental 

disabilities that require constant supervision and more than a dozen 

medical professionals directly involved in helping her manage the 

disease. 

Caroline was born five weeks early, then suffered a seizure and 

stopped breathing in the first 12 hours of her life. The doctors did not 

diagnose her for several years because she has an extremely rare 

neurological disorder, Alternating Hemiplegia of Childhood (AHC), 

which is only diagnosed in BOO people worldwide. Prior to her 

diagnosis, Caroline was tested and evaluated extensively at Johns 

Hopkins, Columbia Presbyterian and Boston Children's Hospitals. 

Besides AHC, Caroline also has cerebral palsy and a seizure 

disorder. As a result, she cannot walk, has speech and motor delay, 

and is developmentally delayed. She attends school part-time in a 

specialized classroom and receives speech, physical, and 

occupational therapy weekly. She has a Gl tube for nutrition, has had 

her spine fused and has extensive specialized equipment at home to 

meet her daily living needs. 

Caroline's medical home is the Chronic-Complex Clinic at St. Joseph's 

Children's Hospital. The clinic coordinates Caroline's health care 

needs, which Include daily nursing care, physical, speech and 

occupational therapy, medical supplies, durable medical equipment, 

medical care and communication between all of her specialists. 

See Caroline's story and learn more about the clinic at 

https:l/www.voutube.com/watch?v=nsVxllldill. 

'l(~ St. joseph's Children's Hospital 

BayCare Health System 
161 


36069.103

Caroline's family mapped out a care web to illustrate the many moving pieces and challenges they face in 

integrating coordination of her health care into everyday life. u Red dot"" must go wherever Caroline goes 

St. joseph's 

Children's Hospital 
162 


36069.104

Jaden Vidal Velasquez 

Age: 10 

Hometown: Tampa, FL 

Hospital: St. Joseph's Children's Hospital, Tampa, FL 

Jaden is a sweet, loving and happy 1 0-year old who loves 

swimming, Tae Kwon Do, soccer and going to school. Born 

with hypoplastic left heart syndrome, a congenital heart defect 

in which the left side of the heart is severely underdeveloped. 

At just 4 days old, Jaden underwent open-heart surgery. Since 

then, he has undergone two additional open-heart surgeries, 

several catheterizations, the insertion of a gastric feeding tube, 

and months of physical rehabilitation. 

St. Joseph's Children's Hospital has been instrumental in Jaden's diagnosis, treatment and continuous 

care. His family Is extremely grateful to receive all of his specialized care in one facility, and by 

compassionate caregivers specifically trained to treat Jaden's complex condition. 

The Chronic-Complex Clinic at St Joseph's Children's 

Hospital is Jaden's medical home. As a nationally 

recognized medical home for children with multiple lifethreatening conditions, the clinic coordinates all of Jaden's 

pediatric specialists and care providers. 

If lt weren't for the scars on his chest, you might never know 

Jaden was born with a heart defect "Yes, he was born with 

half a heart, but it's a strong half a heart and it belongs to an 

amazing and perfect child," says Jaden's mother, Belkls. 

For the first three years of Jaden's life, Medicaid covered 

nearly all of Jaden's care, Including his heart surgeries, 

hospitalizations, visits to his pediatric specialists, and 

medical equipment 

Today, Jaden is a national ambassador for Speak Now for 

Kids, a patient advocacy organization. His family befieves 

this honor gives them the opportunity to speak out on behalf 

of other children with complex needs as well as the 

Importance of obtaining affordable, comprehensive health 

care coverage. Jaden and his family understand this all too 

welL 

Jaden is now covered by the Children's Health Insurance Program (CHIP). With a potential heart 

surgery in the future and a lifetime of medications, this coverage Is a critical lifeline to Jaden's 

family. To learn more about the Chronic-Complex Clinic please visit: www.slbhealth.org/Chronic-

.Q_omplex-C[DJ9. 

St. joseph's Children's Hospital 

BayCare Health 
163 


36069.105

~ National Association 

of Attorneys General 

PRESIDENT 

Derek Schmidt 

Kansas Attorney General 

PRESIDENT-ELECT 

Jeff Landry 

Louisiana Attorney General 

VICE PRESIDENT 

Tim Fox 

Montana Attorney General 

IMMEDIATE PAST PRESIDENT 

George Jepsen 

Connecticut Attorney General 

EXECUTIVE DIRECTOR 

Chris Toth 

1850 M Street, NW 

Twelfth Floor 

Washington, DC 20036 

Phone: {202)326-6000 

http:/ /www.naag.org/ 

March 28, 2018 

Honorable Tim Walberg 

2436 Rayburn House Office Building 

Washington, D.C. 20515 

Honorable Peter Welch 

2303 Rayburn House Office Building 

Washington, D.C. 20515 

Dear Representatives Walberg and Welch: 

As the Attorneys General of our respective states, we write in support of your 

legislation, H.R. 3891, that would expand the authority of Medicaid Fraud 

Control Units (MFCUs) to detect, investigate and prosecute Medicaid patient 

abuse in non-institutional settings. 

On May 10, 2017, thirty-eight attorneys general wrote to then-Secretary Tom 

Price at the U.S. Department of Health and Human Services urging expanded 

authority for MFCUs to address patient abuse and neglect ("the NAAG 

letter"). Specifically, the NAAG letter requested HHS alter its regulations 

implementing the pertinent statutory provisions to broaden the permissible 

authority for MFCUs, and the associated use of federal financial participation 

(FFP), in two regards. First, it recommended "allowing the use of federally 

funded MFCU assets to investigate and prosecute abuse and neglect of 

Medicaid beneficiaries in non-institutional settings." Second, it recommended 

"improving detection of abuse and neglect of Medicaid beneficiaries by 

broadening the permissible use of federal MFCU funds to screen complaints 

or reports alleging potential abuse or neglect." 

On August 7, 2017, HHS Inspector General Daniel R. Levinson responded to 

the NAAG letter stating "OIG believes that the law should be changed to 

expand MFCUs' use ofFFP to include the detection, investigation, and 

prosecution of abuse and neglect of Medicaid beneficiaries in non-institutional 

settings." However, HHS concluded that such a change requires statutory 

amendment and could not be accomplished solely by regulation. 

On September 28, 2017, you introduced H.R. 3891. We are informed that, in 

the drafting of your legislation, you were mindful of the NAAG letter and that 

you intended to implement the letter's recommendations. We have reviewed 

H.R. 3891 and understand that, if adopted, it would enable HHS-OIG to 

implement all changes requested in the NAAG letter. Your legislation permits, 

but does not require, each MFCU to exercise the expanded authority the bill 

proposes, just as current law does with board and care facilities. It is our 

understanding that States electing to operate under the expanded authority of 

H.R. 3891 would be able to use their MFCUs to detect, investigate and 
164 


36069.106

prosecute cases of abuse or neglect of Medicaid patients in whatever setting abuse or neglect 

may occur and to do so without losing federal financial participation. 1 

This change is vitally important because it eliminates the blinders current law places on MFCUs' 

ability to detect, investigate and prosecute cases of abuse or neglect of Medicaid patients. Since 

the current statute was enacted decades ago, substantial growth has occurred in home and 

community-based services, office-based services, transportation services, and other settings that 

are neither "health care facilities" nor "board and care facilities" but where services are provided 

and thus patient abuse or neglect may occur. H.R. 3891 proposes a common-sense change that 

will better protect an often-vulnerable population and will maximize the benefits and efficient 

use ofMFCU assets. 

We also note that your bill is particularly timely and important in light of the national opioid 

epidemic. Consider, for example, a situation in which a Medicaid beneficiary in a home or 

community-based setting is provided prescription opioid painkillers in an unlawful manner, 

resulting in death or great bodily harm to the patient. Under current law, although the patient 

harm caused by distribution of those opioids may have been criminal, our MFCUs would be 

hampered or prevented from investigating or prosecuting the case of patient abuse because it 

occurred in a setting other than a health care facility or a board and care facility. Under H.R. 

3891, however, MFCUs could exercise clear authority to pursue that sort of investigation and, if 

appropriate, prosecute that patient abuse, thus bringing more criminal and civil investigation and 

prosecution assets to bear in the fight against the opioid epidemic. 

Thank you for your leadership in proposing H.R. 3891. We hope it can become law soon so our 

states may have the option to use the important new tools it would make available in the fight 

1 The NAAG letter requested expanded authority for MFCUs to "detect, investigate and 

prosecute" a wider range of abuse and neglect cases, and Mr. Levinson's response confirms that 

OIG favors "use of FFP to include the detection, investigation, and prosecution" of such cases. 

By "detect," the NAAG letter specifically sought broader authority for MFCUs to use FFP to 

"screen" complaints or reports alleging potential abuse or neglect." Current HHS regulations 

constrain states' ability to use MFCU assets to review complaints in order to detect which may 

allege patient abuse or neglect that would warrant investigation or prosecution using MFCU 

assets. See, e.g., 42 C.F.R. Sec. 1 007.19( d)(l )(limiting FFP to "review of complaints of alleged 

abuse or neglect of patients in health care facilities")( emphasis added); see also 42 C.F.R. Sec. 

1007.ll(b)(l)(restricting authority ofMFCU to "review[ing] complaints alleging abuse or 

neglect of patients in health care facilities" and to "review[ing] complaints of the 

misappropriation of patient's private funds in suchfacilities.")(emphasis added). For states that 

would choose to exercise the expanded authority in H.R. 3891, we read the bill to require 

elimination of these and similar regulatory barriers that restrict MFCUs authority to review 

complaints. Obviously, a review will necessarily precede a determination whether a complaint or 

report alleges Medicaid patient abuse or neglect that would fall within H.R. 3891 's expanded 

authority to investigate or prosecute, and it would make no sense to arbitrarily limit review to 

complaints from patients in health care facilities if the authority to investigate and prosecute 

abuse and neglect is expanded to other settings. 
165 


36069.107

against the abuse and neglect of all Medicaid patients-- wherever that may occur. If we may be 

of assistance in advancing this legislation, please let us know. 

&_ 

George Jepsen 

Connecticut Attorney General 

• 

Oklahoma 

M~ Attorney General 

Steve Marshall 

Alabama Attorney General 

Mark Brnovich 

Ariw~~~9ru 

~~~ttomoy GonlrnJ 

Matthew P. Denn 

Q;.:~~~ Florida Attorney General 

~!C-~~~ 

Russel A. Suzuki ~="'~Q Hawaii Acting Attorney General 

Derek Schmidt 

41L~tto~=Y ""'':'' 

T.J. Dono an 

Vermont tto General 

Lindemuth 

fi. aska Attorney General 

~~-.:·//~~ 

Leslie Rutledge 

Arkansas Attorney General 

(j;t~t:td/f ~~ Cynthia H. Co~ Colorado Attorney General 

.. 

District 

~ of Columbia Attorney General 

Christopher M. Carr 

Georgia Attorney General 

c=¥~~ Lawrence Wasden 

Idaho Attorney General 
166 


36069.108

r. 

Illinois Attorney General Indiana Attorney General 

Tom Miller ~&L_ Kentucky Attorney General 

~#- ~~-r~ Brian Frosh 

Louisiana Attorney General Maryland Attorney General 

M:::/:;!3 Bill Schuette 

Massachusetts Attorney General Michigan Attorney General 

Lori 

Minnesota 

Swanson 

Attorney General &~~yGoo~ 

~~~ :JiktcR 

Montana Attorney General 

Doug 

~a~~ Peterson !:Jt:-

Nebraska Attorney General Nevada Attorney General 

Gordon MacDonald Gurbir 

~. S. Grewal 

New Hampshire Attorney General 

fi:!:.ld~ Z2?"~ Eric T. Schneiderman 

New Mexico Attorney General New York Attorney General 
167 


36069.109

q~~ 

Josn Stein 

North Carolina Attorney General 

~y~LR -

Ellen F. Rosenblum 

Oregon Attorney General 

Peter 

&/~-~· F. Kilmartin 

~"§~ Marty J. JacKley 

South Dakota Attorney General 

Sean ~ Reyes 

Utah Attorney General 

McWlr. <r<.. ~~ Mark R. Herring /r 

Virginia Attorney G~neral U 

P~l1m1~ Patrick Morrisey 

West Virginia Attorney General 

Peter K. Michael 

Wyoming Attorney General 

MikeDeWine 

Ohio Attorney General 

Josh 

~~ Shapiro 

Pennsylvania Attorney General 

South Carolina Attorney General 

:ti~1/ J/.t7l! 

Tennessee Attorney General 

(~~al~r~ ~~ Virgin Islands Attorney General 

~F~~~t~ W'"hiDW G<"ernl 

~" Wisconsin Attorney General 
168 


36069.110

May8,2018 

The Honorable Tim Walberg 

U.S. House of Representatives 

Washington, DC 20515 

FAMILIESUSA\;: 

THE VOICE FOR HEALTH CARE CONSUMERS 

The Honorable Peter Welch 

U.S. House of Representatives 

Washington, DC 20515 

Dear Representatives Walberg and Welch: 

On behalf of Families USA, one of the nation's leading health care consumer organizations dedicated to 

improving the health and health care of all in the nation, I am writing to share our support for your 

bipartisan legislation, H.R. 3891, which would strengthen the Medicaid program by empowering state 

Medicaid Fraud Control Units (MFCUs) to better Investigate and prosecute Medicaid provider abuse and 

fraud. 

Medicaid is an essential part of America's safety net and is relied upon by tens of millions of working 

families, children, seniors, and people with disabilities. Medicaid helps kids get a healthy start in life, 

provides long-term and home care to seniors and people with disabilities, and provides health care to 

pregnant women and working families. 

State Medicaid Fraud Control Units (MFCUs) currently operate in 49 States and the District of Columbia 

and investigate and prosecute Medicaid provider fraud as well as patient abuse or neglect. H.R. 3891 

clarifies the authority of MFCUs to investigate and prosecute cases of Medicaid patient abuse and 

neglect in non-institutional settings. This commonsense legislation would codify recommendations sent 

to HHS In a 20171etter from 38 attorneys general to improve the function of MFCUs.1 

Your bill is an important opportunity for members of Congress to signal their support for bipartisan 

policies to strengthen Medicaid and protect consumers. 

Thank you for your leadership on this issue. 

Sincerely, 

Executive Director 

1 http:l/www.naag.org/assetsfredeslgn/files/slgn-on;: 

letter/Medicald%20Expanded%20Dutles%20finai%20NAAG%20slgn%20on.pdf 

FamlllesUSA.org 

1225 New York Avenue, NW, Suite 800 

Washington, DC 20005 

main 202~628-3030 I fax 202-347·2417 
169 


36069.111

The Honorable Tim Walberg 

United States House of Representatives 

Washington, D.C. 20515 

Dear Representatives Walberg and Welch: 

April13, 2018 

The Honorable Peter Welch 

United States House of Representatives 

Washington, D.C. 20S15 

The Partnership for Medicaid Home-Based Care (PMHC) would like to take this opportunity to express 

its support for H.R. 3891 and to thank you for your leadership in strengthening the integrity of the 

Medicaid program. 

PMHC was established to advance the delivery of high-quality, cost-effective, and fully-compliant 

Medicaid home-based care and services. Our members bring to this important quest their experience 

as home care providers, associations, managed care organizations, and technology providers. While 

such a diverse membership is somewhat unique, our members came together due to a shared 

commitment to support legislative and regulatory efforts that improve the quality, accessibility, and 

integrity of home-based care and services in Medicaid. 

PMHC is pleased to endorse this measure, which we believe will strengthen the Medicaid program's 

ability to protect those served by the program from fraudulent activity. We are particularly grateful 

for this legislation's focus on streamlining the regulatory process so that Medicaid Fraud Control Units 

(MFCUs) can better identify, investigate, and prosecute instances of fraud, patient abuse, or neglect. 

By cracking down on Medicaid fraud, abuse, and neglect, MFCUs play a vital role in securing the 

integrity, efficiency, and effectiveness of the Medicaid program. However, MFCUs are restricted 

under current policy in their efforts to investigate patient abuse and neglect complaints. H.R. 3891 

resolves this problem by empowering MFCUs to undertake this activity across all settings and with 

greater flexibility. 

While H.R. 3891 represents an important step forward, we would like to take this opportunity to 

request consideration of additional measures PMHC has proposed. Specifically, we believe the 

following reforms could supplement your important efforts to strengthen the integrity of the 

Medicaid program and foster a universal culture of accountability among Medicaid providers: 

Standardized rules, to ensure hours billed are authorized, match the care/service plan, 

account for hospitalization days, and prevent banking of hours. 

Establishing conditions specific to eligibility for Medicaid reimbursement for Personal Care 

Services (PCS) that at a minimum include: 

o Filing an Employer Identification Number (EIN) for all employees of a home care 

agency; 

o Filing an EIN or a unique identifier provided by the State Medicaid agency by each 

self-directed provider; 

300 New Jersey Avenue, NW • Suite 900 • Washington, DC 20001 

Phone: 202.742.5274 • Fax 202-315-3490 • www.medicaidpartners.org 
170 


36069.112

Partnership for Medicaid Home-Based Care 

April13, 2018 

Page 2 of 2 

o Requiring all claims for personal care services include the specific date on which each 

service is performed and the identity of the home care agency or self-directed care 

provider rendering each service; 

o Prior to award of a new provider number, demonstrate access to capital sufficient to 

operate for at least six months, exclusive of actual or projected accounts receivable 

from Medicaid or other sources (exempting self-directed care and agencies or 

providers in frontier or underserved areas.); and 

o On site review within the first year of operation and triennially thereafter to review 

adherence with minimum business practices; ensure qualifications of staff per state 

regulation as well as supervision of same staff per waiver requirements; consumer 

assessment per waiver requirements and any state minimums; and provision of 

services per plan and respect of consumer rights. 

• Guidance to States regarding adequate prepayment controls, including: 

o Claims edits to prevent inappropriate PCS payments during periods when consumers 

are receiving institutional care; 

o Electronic Visit Verification (EVV)-enabled claims verification; 

o Crosswalk of Medicare and Medicaid data to identify potential instances of fraud, 

waste, and abuse; and full, timely, and free access to data sources such as Medicare 

Coordination of Benefits Agreement (COBA); and, 

o Establish minimum federal requirements and guidance for PCS care/service plans, 

claims documentation, consumer assessments, and attendant supervision 

appropriate to the scope of the site's authorized services. 

We believe H.R. 3891 and reforms such as those proposed by PMHC can greatly strengthen the 

integrity of the Medicaid program and protect the individuals who depend on it from fraud, abuse, 

and neglect. In light of the paramount importance of these objectives, we believe such action should 

be taken as soon as is possible. 

For these reasons, PMHC is proud to endorse H.R. 3891 and would be honored to serve as a resource 

to you in any way that would support your vitally important work. 

cc: The Honorable Greg Walden 

The Honorable Frank Pallone 

Sincerely, 

David J. Totaro 

Chairman 
171 


36069.113

AREA AGENCIES ON AGING ASSOCIATION OF MICHIGAN 

6105 W. ST. JOSEPH, SUITE 204, LANSING, MICHIGAN 48917 

U.S. Representative Debbie Dingell 

116 Cannon House Office Building 

Washington, D.C. 20515 

Dear Congresswoman Ding ell, 

The Area Agency on Aging Association of Michigan (4AM) represents the 16 Area Agencies on 

Aging serving every jurisdiction in the state of Michigan. Area Agencies on Aging are experts in 

providing long term support services across Michigan with more than 40 years of experience. 

We are writing on behalf of our membership to thank you for your sponsorship of H.R. 5306 

reauthorizing the EMPOWER Care Act. 

As you know, this Money Follows the Person (MFP) program provides an effective and efficient 

mechanism to help seniors and persons with disabilities to move back to the community they 

call home from a nursing home setting. This program not only improves the quality of life 

reported by seniors and persons which disabilities who have returned to the community, but 

the Home and Community Based Services also provide significant savings over the cost of an 

institutional setting- Nearly $1,840 per month less than the cost of an institution according to 

the Center for Medicare and Medicaid Services. 

The reauthorization of the EMPOWER Care Act seeks not only to maintain this quality of life 

enhancing and fiscally prudent service through FY 2022, but it also seeks to create key 

improvements. Such improvements include: 

• Reducing the number of days someone must be in a nursing home before becoming 

eligible for the program from 90 to 60; 

Enhances reporting and accountability requirements of the MFP funding; 

• Requiring Health and Human Services to conduct a review and share the most effective 

state strategies for transitioning beneficiaries from an institution to a qualified 

community setting. 

Again, we thank you for your sponsorship of H.R. 5306, the Reauthorization of the EMPOWER 

Care Act. Please do not hesitate to contact me should you want more information on this key 

program. 

Sincerely, 

Ryan Cowmeadow, Executive Director 

(517) 886-1029, fax (517) 886-1305, www.mi-seniors.net 
172 


36069.114

May 1, 2018 

Hon. Greg Walden 

Chairman 

NASDDDS 

House Committee on Energy & Commerce 

Hon. Michael Burgess 

Chairman 

Subcommittee on Health 

Dear Representatives Walden, Pallone, Burgess, and Green: 

__g-NASUAD 

Hon. Frank Pallone, Jr. 

Ranking Member 

House Committee on Energy & 

Commerce 

Hon. Gene Green 

Ranking Member 

Subcommittee on Health 

On behalf of the National Association of Medicaid Directors, the National Association of State Directors 

of Developmental Disabilities Services, and the National Association of States United for Aging and 

Disabilities, we are writing to you in support of efforts to reauthorize and extend the Money Follows the 

Person Demonstration Program (MFP). Collectively, our organizations represent the full array of state 

agencies responsible for delivering long-term services and supports to older adults and individuals with 

disabilities. 

We strongly support the reauthorization and extension of MFP for the following key reasons: 

• MFP has enabled categorically high need, high cost older adults and people with disabilities to 

transition from costly institutional settings to the community, which enables choice, selfdirection, and integration in civic life; 

MFP has been a leading means of shifting the proportion of Medicaid long-term services and 

supports (LTSS) spending from expensive nursing homes and chronic disease hospitals to less 

costly home and community-based waivers, resulting in billions of dollars of savings; 

MFP has represented the leading edge of Medicaid's efforts to address social determinants of 

health, including housing access and stability; 

MFP's success in systems transformation has been documented longitudinally through years of 

rigorous data collection and analysis through third-party evaluators; and 

States that are participating in MFP are currently exhausting their allotted funding, and will not 

have the means of ensuring that all those who seek transition will be served. 

MFP provid"es states with flexible funding that allows programs to establish innovative and personcentered approaches to transition individuals from institutional to community-based settings. Although 

significant progress and success has been made regarding rebalancing to HCBS, almost 60 percent of all 

Medicaid expenditures for long-term services and supports (L TSS) delivered to older adults and people 

with physical disabilities are for institutional care.' We recognize that there is much more progress to 

be made for these vulnerable consumers; however, we would like to stress that MFP has provided 

essential supports that have led to overall improvement on this issue. For example, the recently1 https://www.medicaid.gov/medicaid/ltss/downloads/reports-and-evaluations/ltssexpendituresffy201Sfinal.pdf 
173 


36069.115

released MFP evaluation found that 71 percent of the individuals transitioned through the program 

were older adults or people with physical disabilities. 2 The evaluation also indicated that the aggregate 

number of transitions is growing. This is likely due to examination of and strategies to address barriers 

to community living that have been a hallmark of MFP's research orientation. Increasing incidence of 

transitions is also demonstrably related to partnerships with community-based organizations that 

facilitate community living. For example, state MFP grantees have reported that partnerships with 

housing entities are essential due to the lack of affordable, accessible living arrangements for many l TSS 

participants across the country. 3 

The national evaluation also found that MFP de institutionalization efforts result in significant cost 

savings. According to the report, average annual per person spending during the first year following 

transition declined by over $20,000 for older adults and people with disabilities, and by over $48,000 for 

individuals with intellectual/developmental disabilities .. All told, this resulted in over $1 billion in 

savings during the first year of transitions for these individuals alone.• The evaluation also estimated 

that, within 17 states evaluated, roughly one quarter of older adults and one half of individuals with 

ID/DD would not have transitioned without support from MFP. This substantiates that MFP results in 

hundreds of millions of dollars in savings during the first year after participants' transitions, and 

substantial additional savings during subsequent years. 

Our experience working with a wide range of l TSS demonstrates that there will continue to be barriers 

that result in Medicaid-funded individuals living in institutional settings. In many cases, these barriers 

are beyond the Medicaid program's control. A leading example is that it remains typical for individuals 

who enter a facility for a Medicare post-acute rehabilitative stay, as well as people who privately pay for 

nursing home care until they have spent down to Medicaid eligibility, to remain in the nursing home 

without meaningful consideration of their interest and capacity to move back to the community. 

Oftentimes, these individuals have lost access to housing and community-based support systems by the 

time they become Medicaid participants. MFP provides important funding and programmatic flexibility 

that enables states to move these individuals back into the community. This results in increased 

participant satisfaction and quality of life with lower overall program expenditures. For example, 

Connecticut, like all MFP states, administers a quality of life survey to individuals who are able to leave a 

nursing home and move to a community setting. Across the board, compared to their experiences while 

living in a nursing home, individuals report higher levels of satisfaction, engagement with their 

communities and better health status. 5 

We appreciate the bipartisan efforts that have been made to reauthorize MFP, and strongly encourage 

Congress to quickly pass a bill that continues this crucial program. While we recognize that current 

legislation proposes a five-year reauthorization, we believe that other timeframes would be appropriate 

depending upon considerations such as legislative timing, budgetary offsets required for passage, and 

related policy issues. 

2 https:(/www.medicaid.gov/medicaid/ltss/downloads/monev-follows-the-person/mfp-rtc.pdf 

'https://www.medicaid.gov/medicaid/ltss/downloads/money-follows-the-person/mfp-2015-annual-report.pdf 

4 1bid 

5 https://health.uconn. edu/ aging/wp-content/uploads/ sites/6/2017/02/2016 04-QOL-Dashboard. pdf 
174 


36069.116

MFP authorization expired over a year ago, and states have been operating through no-cost extensions. 

Eight states have already run out of MFP grant funds, and the remaining participants will use up their 

funds by the end of 2018. As a result, these states already are currently scaling back their programs and 

reducing dedicated staff and resources. We believe Congress should reauthorize and extend this 

program as soon as possible so that no individuals who could be helped by MFP are instead forced to 

remain in an institution. 

Sincerely, 

Mary Lee Fay 

Executive Director 

National Association of State Directors of 

Developmental Disabilities Services 

Matt Salo 

Executive Director 

National Association of Medicaid Directors 

.JI~ ~ !(.a/<_u :r 

Martha A. Roherty 

Executive Director 

National Association of States United for Aging 

and Disabilities 
175 


36069.117

December 19, 2017 

The Honorable Orrin Hatch 

Chairman 

Committee on Finance 

United States Senate 

The Honorable Rob Portman 

Senator 

Committee on Finance 

United States Senate 

The Honorable Ron Wyden 

Ranking Member 

Committee on Finance 

United States Senate 

The Honorable Maria Cantwell 

Senator 

Committee on Finance 

United States Senate 

Dear Chairman Hatch, Ranking Member Wyden, Senator Portman, and Senator 

Cantwell: 

The undersigned organizations strongly support extension of the Money Follows the 

Person. We applaud recent introduction of bipartisan legislation (S. 2227) by Senators 

Portman and Cantwell to do so and urge swift passage. 

The Money Follows the Person (MFP) Demonstration -first authorized in the Deficit 

Reduction Act of 2005 with strong bipartisan support and signed into law by President 

Bush -was designed to assist states with: 

1) Supporting Medicaid enrollees who want to transition from nursing facilities and 

other institutional setting back to community-based settings; and 

2) Developing infrastructure to promote and enhance access to HCBS. 

Impact of Money Follows the Person 

Since its inception, 47 states have participated and over 75,000 individuals have been 

transitioned back to the community. According to independent evaluations by 

Mathematica: 

• Participants report significant and lasting improvements in quality of life and 

community integration after returning to the community. 

• Findings suggest that after individuals return to the community, their overall 

Medicare and Medicaid expenditures decrease by roughly 23%. 

States have made significant progress on "balancing" their long-term services and 

supports system to enhance access for HCBS, due in part to MFP. In FY05, states only 

spent approximately 37% of their L TSS expenditures on HCBS. According to the most 

recent data, states now spend over 53% on HCBS. 

Need For Extension 

While states have made great progress, more work is needed. Significant variations 

remain across states and different populations who need HCBS. For example, HCBS 

accounted for 75% of spending in programs targeting people with developmental 

disabilities, compared to only 41% of expenditures for programs targeting older people, 
176 


36069.118

people with physical disabilities, and people with serious mental illness. Over 50,000 

nursing home residents said they wanted to talk with someone about leaving their 

facility, but never received a referral to a local agency that could help them, according to 

recent analyses of Nursing Home Minimum Data Set reporting. States have learned 

lessons and can share promising practices with other states. 

Unfortunately, the_program expired on September 30, 2016. While states can continue 

to use remaining grant funding through 2020, they are currently scaling back their 

programs and reducing dedicated staff and resources. The most recent national 

evaluation indicates that last year was the first year that number of new transitions 

through the program declined. We are beginning to lose the momentum and progress 

we have made. 

We commend you and your staff for the bipartisan process to develop this legislation, 

which will extend the program through 2022, remove barriers for individuals and states, 

enhance accountability, and contribute to sharing of best practices across states. This 

will assist states with achieving cost-efficiencies in their Medicaid programs while 

simultaneously enhancing opportunities for individuals to live independently and age 

with dignity in their homes and communities. 

We applaud you for your leadership and look forward to working with you on passage. 

Sincerely, 

National Organizations: 

AARP 

ADAPT 

Alliance for Citizen Directed Supports 

Alliance for Retired Americans 

Allies for Independence 

Alzheimer's Association 

Alzheimer's Impact Movement 

America's Health Insurance Plans (AHIP) 

American Association of People with Disabilities 

American Association on Health and Disability 

American Civil Liberties Union 

American Network of Community Options and Resources (AN COR) 

The Arc of the United States 

Association of Programs for Rural Independent Living 

2 
177 


36069.119

Association of University Centers on Disabilities (AUCD) 

Autism Society of America 

Autism Speaks 

Autistic Self Advocacy Network 

Bazelon Center for Mental Health Law 

Caring Across Generations 

Centene Corporation 

Center for Public Representation 

Community Catalyst 

Consumer Direct Care Network 

Disability Rights Education and Defense Fund (DREDF) 

Easterseals 

ElevatingHOME 

The Jewish Federations of North America 

Justice in Aging 

Lakeshore Foundation 

LeadingAge 

Lutheran Services in America Disability Network 

Medicaiq Health Plans of America (MHPA) 

National Academy of Elder Law Attorneys 

National Association for Horne Care and Hospice 

National Association of Area Agencies on Aging 

National Association of Councils on Developmental Disabilities 

National Association of Social Workers (NASW) 

National Association of State Directors of Developmental Disabilities Services 

National Association of State Head Injury Administrators 

National Association of State Long-Term Care Ombudsman Programs (NASOP) 

National Center for American Indians with Disabilities 

National Committee to Preserve Social Security and Medicare 

National Consumer Voice for Quality Long-Term Care 

National Council on Aging 

3 
178 


36069.120

National Council on Independent Living 

National Disability Rights Network 

National Down Syndrome Congress 

National Health Law Program 

National ML TSS Health Plan Association 

National Multiple Sclerosis Society 

National Organization of Nurses with Disabilities (NOND) 

National Rehabilitation Association 

National Respite Coalition 

Not Dead Yet 

Nursing Home Victims Coalition, Inc 

Paralyzed Veterans of America 

Partnership for Medicaid Home-Based Care 

PolicyWorks, Inc. 

ResCare Home Care 

Self-Development of People of the United Presbyterian Church 

Special Needs Alliance 

Special Needs Resource Project 

TASH, Inc. 

United States Brain Injury Alliance 

State and Regional Organizations 

Ability360 (Arizona) 

Access 2 Independence (Georgia) 

Access Alaska, Inc. 

Access Center for Independent Living (Illinois) 

Access to Independence of Cortland County, Inc. (New York) 

Accessible Resources for Independence (Maryland) 

The Arc Michigan 

The Arc New York 

The Arc of Alabama 

4 
179 


36069.121

The Arc of Arizona 

The Arc of Illinois 

The Arc of Pennsylvania 

The Arc of South Carolina 

The Arc of Texas 

The Arc of the District of Columbia, Inc. 

The Arc Tennessee 

ADAPT Delaware 

ADAPT Montana 

ADAPT ofTexas 

The Adaptables, Inc. Center for Independent Living (North Carolina) 

Advocates for Inclusion (Idaho) 

Aging and Community Services of South Central Indiana 

Aging Life Care Association (Arizona) 

AIM lndepeJldent Living Center (New York) 

Arkansas SILC 

Appalachian Center for Independent Living (West Virginia) 

Appalachian Independence Center, Inc. (Virginia) 

ARISE Independent Living Center (New York) 

Brain Injury Alliance of Iowa 

Brain Injury Association of Georgia 

Bronx Independent living Services (New York) 

California Foundation for Independent Living Centers 

California Office of the State Long-Term Care Ombudsman 

Cape Organization for Rights of the Disabled (CORD) (Massachusetts) 

Caring Associates, Inc. (Florida) 

Catskill Center for Independence (New York) 

Center for Disabilities and Development, University of Iowa 

Center for Disability Rights (New York) 

Center for Independence of the Disabled, NY (New York) 

Center for Living & Working, Inc. (Massachusetts) 

5 
180 


36069.122

Central Wisconsin ADAPT 

CIL Western Wisconsin, Inc. 

Coalition of Texans with Disabilities 

Community Resources for Independent Living, Inc. (CRIL) (California) 

Connecticut Office of the Long-Term Care Ombudsman 

DC Metro ADAPT 

Delaware Office of the State Long-Term Care Ombudsman 

Disabilities Law Program and Community Legal Aid Society, Inc. (Delaware) 

Disabilities Resource Center of Siouxland (Iowa) 

Disability Action Center- NW, Inc. (Idaho) 

Disability Action Center of Ga, INC (Georgia) 

Disability in Action, Inc. (Texas) 

Disability Law Colorado 

disABILITY LINK (Georgia) 

Disability Network Northern Michigan 

Disability Policy Consortium (Massachusetts) 

Disability Pride NYC, inc. (New York) 

Disability Resource Center (Illinois) 

Disability Rights California 

Disability Rights Maryland 

Disability Rights Nebraska 

Disability Rights Tennessee 

DisabilitySavvy (Michigan) 

Faith Hope and Charity (Iowa) 

FREED, Center for Independent Living (California) 

Full Life Care (Washington) 

Governor's Advisory Council for Exceptional Citizens (GACEC) (Delaware) 

Hawaii Disability Rights Center 

Hills & Dales (Iowa) 

Houston Center for Independent Living (Texas) 

Idaho State Independent Living Council 

6 
181 


36069.123

Illinois Chapter of the National Academy of Elder Law Attorneys 

Illinois Iowa Center for Independent Living 

Illinois Network of Centers for Independent Living (INCIL) 

Illinois Valley Center for Independent Living 

IMPACT CIL (Illinois) 

Inclusion PAC (Illinois) 

Independence Associates, Inc. (Massachusetts) 

Independent Connection Inc. a Center for Independent Living (Kansas) 

Independent Living Center of Kern County (California) 

Independent Living Center of the Hudson Valley Inc. (New York) 

Independent Living Center of the North Shore and Cape Ann, Inc. (Massachusetts) 

Independent Living of the Genesee Region, Inc. (New York) 

Independent Living Resource Center, Inc. (Kansas) 

Indiana Association of Area Agencies on Aging 

Indiana Statewide Independent Living Council (INSILC) 

Institute on Disabilities Temple University (Pennsylvania) 

Iowa Statewide Independent Living Council 

Iowa Office of the State Long-Term Care Ombudsman 

Kansas ADAPT 

League of Human Dignity, Inc. (Iowa) 

LifeSpan Resources (Indiana) 

Linking Employment, Abilities and Potential (LEAP) (Ohio) 

Living Independence Network Corporation (LING) (Idaho) 

Living Independently For Everyone, Inc. (Idaho) 

Living Independently for Today & Tomorrow (Montana) 

Maine Long Term Care Ombudsman Program 

Maryland ADAPT 

Maryland Developmental Disabilities Council 

Maryland Occupational Therapy Association 

Maryland Statewide Independent Living Council 

Mass Home Care Association 

7 
182 


36069.124

Massachusetts Advocates for Nursing Home Reform 

Michigan Protection & Advocacy Service, Inc. 

Middle Georgia Center for Independent Living, Inc. 

Midwest Military Outreach (Iowa) 

Missouri Association of Area Agencies on Aging 

Missouri Long-Term Care Ombudsman 

Montana Independent Living Project 

Montana Statewide Independent Living Council 

Muslims for Evidence Based Health Care (Washington) 

Nebraska Ombudsman Office 

New Hampshire Office of the Long Term Care Ombudman 

New River Valley Disability Resource Center (Virginia) 

New York Association on Independent Living 

New York State Independent Living Council, Inc. (NYSILC) 

New York State Office of the State Long Term Care Ombudsman 

North Central Independent Living Services, Inc. (Montana) 

Northeast Independent Living Program, Inc. (Massachusetts) 

Ohio Association of Area Agencies on Aging 

Ohio Office of the State Long-Term Care Ombudsman 

Old Friends Club (Washington) 

Options for Independent Living (Wisconsin) 

Paraquad (Missouri) 

Personal Attendant Coalition of Texas 

Prairie Independent Living Resource Center, Inc. (Kansas) 

Progress Center for Independent Living (Illinois) 

Progressive Center for Independent Living (New Jersey) 

Protection & Advocacy Project of NO (North Dakota) 

Protection and Advocacy for People with Disabilities, Inc. (South Carolina) 

REAL Services, Inc. (Indiana) 

Resident Councils of Washington 

Resource Center for Independence Living (New York) 

8 
183 


36069.125

Resources for Independence Central Valley (California) 

Rllong Term Care Ombudsman (Rhode Island) 

Roads to Independence (Utah) 

Rolling Start Inc. (California) 

SCIL (Missouri) 

Senior Advisory Council of King County (Washington) 

Service Center For Independent Life (California) 

Shepherd Center (Georgia) 

Silicon Valley Independent Living Center (California) 

Smart Policy Works (Illinois) 

Sno-valley Senior Center (Washington) 

Southeast Kansas Independent Living Resource Center 

Southeastern Wisconsin ADAPT 

Southeastern Wisconsin Disability Rights 

Southern Tier Independence Center (New York) 

Southwest Center for Independent Living (SCIL) (Missouri) 

Spa Area Independent Living Services, Inc. (Arkansas) 

Star Choices, Inc. (Georgia) 

Statewide Independent Living Council of Illinois 

Stavros Center for Independent Living (Massachusetts) 

Sunrise Fiduciary (California) 

SWIRCA & More (Indiana) 

Syntiro (Maine) 

Texas Advocates 

Texas Association for Home Care & Hospice 

Texas Parent to Texas 

The Freedom Center, Inc. (Maryland) 

The IMAGE Center for People with Disabilities (Maryland) 

The Resource Center for Accessible Living, Inc. (New York) 

Topeka Independent Living Resource Center (Kansas) 

Touch the Future Inc. (South Carolina) 

9 
184 


36069.126

Transitions in Dementia Care (Washington) 

Vermont Long-Term Care Ombudsman Program 

Voices for Quality Care (LTC), Inc. (Maryland) 

Walton Options (Georgia) 

Washington State Independent Living Council 

West Virginia Statewide Independent Living Council 

Westchester Disabled on The Move Inc. (New York) 

Wisconsin Board for People with Developmental Disabilities 

10 
185 


36069.127

March 5, 2018 

The Honorable Greg Walden 

Chairman 

House Energy and Commerce Committee 

The Honorable Michael Burgess 

Chairman, Health Subcommittee 

House Energy and Commerce Committee 

The Honorable Brett Guthrie 

Member 

House Energy and Commerce Committee 

The Honorable Frank Pallone 

Ranking Member 

House Energy and Commerce Committee 

The Honorable Gene Green 

Ranking Member, Health Subcommittee 

House Energy and Commerce Committee 

The Honorable Debbie Dingell 

Member 

House Energy and Commerce Committee 

Dear Chairman Walden, Ranking Member Pallone, Chairman Burgess, Ranking Member 

Green, Representative Guthrie, and Representative Dingell: 

The undersigned organizations strongly support extension of the Money Follows the Person. 

We applaud introduction of bipartisan legislation by Representatives Guthrie and Dingell to do 

so and urge swift passage. 

The Money Follows the Person (MFP) Demonstration -first authorized in the Deficit Reduction 

Act of 2005 with strong bipartisan support and signed into law by President Bush - was 

designed to assist states with: 

1) Supporting Medicaid enrollees who want to transition from nursing facilities and other 

institutional setting back to community-based settings; and 

2) Developing infrastructure to promote and enhance access to HCBS. 

Impact of Money Follows the Person 

Since its inception, 47 states have participated and over 75,000 individuals have been 

transitioned back to the community. According to independent evaluations by Mathematica: 

• Participants report significant and lasting improvements in quality of life and community 

integration after returning to the community. 

Findings suggest that after individuals return to the community, their overall Medicare 

and Medicaid expenditures decrease by roughly 23%. 

States have made significant progress on "balancing" their long-term services and supports 

system to enhance access for HCBS, due in part to MFP. In FY05, states only spent 

approximately 37% of their L TSS expenditures on HCBS. According to the most recent data, 

states now spend over 53% on HCBS. 

Need For Extension 

While states have made great progress, more work is needed. Significant variations remain 

across states and different populations who need HCBS. For example, HCBS accounted for 

75% of spending in programs targeting people with developmental disabilities, compared to only 

41% of expenditures for programs targeting older people, people with physical disabilities, and 

people with serious mental illness. Over 50,000 nursing home residents said they wanted to talk 

with someone about leaving their facility, but never received a referral to a local agency that 

could help them, according to recent analyses of Nursing Home Minimum Data Set reporting. 

States have learned lessons and can share promising practices with other states. 
186 


36069.128

Unfortunately, the_program expired on September 30, 2016. While states can continue to use 

remaining grant funding through 2020, they are currently scaling back their programs and 

reducing dedicated staff and resources. The most recent national evaluation indicates that last 

year was the first year that number of new transitions through the program declined. We are 

beginning to lose the momentum and progress we have made. 

We commend you and your staff for the bipartisan process to develop this legislation, which will 

extend the program through 2022, remove barriers for individuals and states, enhance 

accountability, and contribute to sharing of best practices across states. This will assist states 

with achieving cost-efficiencies in their Medicaid programs while simultaneously enhancing 

opportunities for individuals to live independently and age with dignity in their homes and 

communities. 

We applaud you for your leadership and look forward to working with you on passage. 

Sincerely, 

National Organizations: 

AARP 

ADAPT 

Alliance for Citizen Directed Supports 

Alliance for Retired Americans 

Allies for Independence 

Alzheimer's Association 

Alzheimer's Impact Movement 

America's Health Insurance Plans (AHIP) 

American Association of People with Disabilities 

American Association on Health and Disability 

American Civil Liberties Union 

American Network of Community Options and Resources (ANCOR) 

The Arc of the United States 

Association of People Supporting Employment First 

Association of Programs for Rural Independent Living 

Association of University Centers on Disabilities (AUCD) 

Autism Society of America 

Autism Speaks 

Autistic Self Advocacy Network 

Bazelon Center for Mental Health Law 

B'nai B'irth International 

2 
187 


36069.129

Caring Across Generations 

Centene Corporation 

Center for Public Representation 

Christopher & Dana Reeve Foundation 

Community Catalyst 

Consumer Direct Care Network 

DQIA: Disabled Queers in Action! 

Disability Rights Education and Defense Fund (DREDF) 

Easterseals 

Elevating HOME 

The Jewish Federations of North America 

Justice in Aging 

Lakeshore Foundation 

LeadingAge 

Little Lobbyists 

Lutheran Services in America Disability Network 

Medicaid Health Plans of America (MHPA) 

Medicare Rights Center 

National Academy of Elder Law Attorneys 

National Association for Home Care and Hospice 

National Association of Area Agencies on Aging 

National Association of Councils on Developmental Disabilities 

National Association of Social Workers (NASW) 

National Association of State Directors of Developmental Disabilities Services 

National Association of State Head Injury Administrators 

National Association of State Long-Term Care Ombudsman Programs (NASOP) 

National Center for American Indians with Disabilities 

National Center for Environmental Health Strategies 

National Committee to Preserve Social Security and Medicare 

National Consumer Voice for Quality Long-Term Care 

National Council on Aging 

National Council on Independent Living 

National Disability Rights Network 

National Down Syndrome Congress 

3 
188 


36069.130

National Health Law Program 

National ML TSS Health Plan Association 

National Multiple Sclerosis Society 

National Organization of Nurses with Disabilities (NOND) 

National Rehabilitation Association 

National Respite Coalition 

Not Dead Yet 

Nursing Home Victims Coalition, Inc 

Paralyzed Veterans of America 

Partnership for Medicaid Home-Based Care 

PolicyWorks, Inc. 

Program to Improve Eldercare, Altarum 

ResCare Home Care 

Self-Development of People of the United Presbyterian Church 

Service Employees International Union (SEIU) 

Sibling Leadership Network 

Special Needs Alliance 

Special Needs Resource Project 

TASH, Inc. 

United States Brain Injury Alliance 

Women's Institute for a Secure Retirement (WISER) 

State and Regional Organizations 

Ability360 (Arizona) 

The Ability Center of Greater Toledo (Ohio) 

Ability now Bay Area (California) 

Able South Carolina 

Access 2 Independence (Georgia) 

Access Alaska, Inc. 

Access to Independence, Inc. (Wisconsin) 

Access Center for Independent Living (Illinois) 

Access to Independence of Cortland County, Inc. (New York) 

Access Support Network of San Luis Obispo and Monterey Counties (California) 

Accessible Resources for Independence (Maryland) 

4 
189 


36069.131

The Arc Michigan 

The Arc New York 

The Arc of Alabama 

The Arc of Arizona 

The Arc of Illinois 

The Arc of Pennsylvania 

The Arc of South Carolina 

The Arc of Texas 

The Arc of the District of Columbia, Inc. 

The Arc Tennessee 

Area Agency on Aging Association of Michigan, Inc. 

ADAPT Delaware 

ADAPT Montana 

ADAPT of Texas 

The Adaptables, Inc. Center for Independent Living (North Carolina) 

Advocacy Center of Louisiana 

Advocates for Inclusion (Idaho) 

Aging and Community Services of South Central Indiana 

Aging Life Care Association (Arizona) 

AIM Independent Living Center (New York) 

Alliance of People with disAbilities (Washington) 

Arkansas SILC 

Appalachian Center for Independent Living (West Virginia) 

Appalachian Independence Center, Inc. (Virginia) 

ARISE Independent Living Center (New York) 

Association of California Caregiver Resource Centers 

Atlantis Community, Inc. (Colorado) 

Austin Resource Center for Independent Living, Inc. (Texas) 

Blue Ridge Independent Living Center, Inc. 

Brain Injury Alliance of Iowa 

Brain Injury Association of Georgia 

Brain Injury Association of Kansas and Greater Kansas 

Brain Injury Association of Massachusetts 

Bronx Independent living Services (New York) 

5 
190 


36069.132

California Children's Services Transition Program 

California Foundation for Independent Living Centers 

California Office of the State Long-Term Care Ombudsman 

California Supported Living Network 

Californians for Disability Rights Inc. 

Cape Organization for Rights of the Disabled (CORD) (Massachusetts) 

Caring Associates, Inc. (Florida) 

Catskill Center for Independence (New York) 

Center for Accessible Living (Kentucky) 

Center for Disabilities and Development, University of Iowa 

Center for Disability Rights (Connecticut) 

Center for Disability Rights (New York) 

Center for Independence (Washington) 

Center for Independence of the Disabled, NY (New York) 

Center for Living & Working, Inc. (Massachusetts) 

Central Wisconsin ADAPT 

Choice in Aging (California) 

GIL Western Wisconsin, Inc. 

Coalition of Texans with Disabilities 

Colorado Springs Independence Center (Colorado) 

Community Resources for Independent Living, Inc. (CRIL) (California) 

Connecticut Office of the Long-Term Care Ombudsman 

Connecticut State Independent Living Council 

Dayle Mcintosh Center (California) 

DC Metro ADAPT 

Delaware Office of the State Long-Term Care Ombudsman 

DIRECT Center for Independence (Arizona) 

Disabled Rights Action Committee (Utah) 

Disabilities Law Program and Community Legal Aid Society, Inc. (Delaware) 

Disabilities Resource Center of Siouxland (Iowa) 

'Disability Action Center- NW, Inc. (Idaho) 

Disability Action Center of Ga, INC (Georgia) 

Disability in Action, Inc. (Texas) 

Disability Law Colorado 

6 
191 


36069.133

disABILITY LINK (Geo~gia) 

disAbility Solutions for Independent Living (Florida) 

Disability Network Northern Michigan 

Disability Policy Consortium (Massachusetts) 

Disability Pride NYC, inc. (New York) 

Disability Resource Center (Illinois) 

Disability Rights Arkansas 

Disability Rights California 

Disability Rights Maryland 

Disability Rights Nebraska 

Disability Rights Tennessee 

Disability Rights Washington 

DisabilitySavvy (Michigan) 

East Bay Innovations (California) 

Empower Tennessee 

Faith Hope and Charity (Iowa) 

Family Voices New Jersey 

FREED Center for Independent Living (California) 

The Freedom Center, Inc. (California) 

Full Life Care (Washington) 

Georgia ADAPT 

Georgia Council on Developmental Disabilities 

Governor's Advisory Council for Exceptional Citizens (GACEC) (Delaware) 

Granite State Independent Living (New Hampshire) 

Hawaii Disability Rights Center 

Hawaii State Council on Developmental Disabilities 

Hills & Dales (Iowa) 

Houston Center for Independent Living (Texas) 

Idaho Council on Developmental Disabilities 

Idaho State Independent Living Council 

Illinois Chapter of the National Academy of Elder Law Attorneys 

Illinois Iowa Center for Independent Living 

Illinois Network of Centers for Independent Living (INCIL) 

Illinois Valley Center for Independent Living 

7 
192 


36069.134

IMPACT GIL (Illinois) 

Inclusion PAC (Illinois) 

Independence Associates, Inc. (Massachusetts) 

Independence First (Wisconsin) 

Independence Unlimited (Connecticut) 

Independent Connection Inc. a Center for Independent Living (Kansas) 

Independent Living Center of Kern County (California) 

Independent Living Center of the Hudson Valley Inc. (New York) 

Independent Living Center of the North Shore and Cape Ann, Inc. (Massachusetts) 

Independent Living Council of Wisconsin, Inc. 

Independent Living of the Genesee Region, Inc. (New York) 

Independent Living Resource Center (California) 

Independent Living Resource Center, Inc. (Kansas) 

Indiana Association of Area Agencies on Aging 

Indiana Statewide Independent Living Council (INSILC) 

Inland Empire Coverage and Health Institute (California) 

Institute on Aging (California) 

Institute on Disabilities Temple University (Pennsylvania) 

Iowa Statewide Independent Living Council 

Iowa Office of the State Long-Term Care Ombudsman 

Kansas ADAPT 

LeadingAge California 

League of Human Dignity, Inc. (Iowa) 

LifeSpan Resources (Indiana) 

LINK Inc. (Kansas) 

Linking Employment, Abilities and Potential (LEAP) (Ohio) 

Living Independence Network Corporation (LING) (Idaho) 

Living Independently For Everyone, Inc. (Idaho) 

Living Independently for Today & Tomorrow (Montana) 

Los Angeles Aging Advocacy Coalition (California) 

Maine Long Term Care Ombudsman Program 

Marin Center for Independent Living (California) 

Maryland ADAPT 

Maryland Alliance of Disability Commissions and Committees 

8 
193 


36069.135

Maryland Association of Centers for Independent living 

Maryland Developmental Disabilities Council 

Maryland Occupational Therapy Association 

Maryland Statewide Independent Living Council 

Mass Home Care Association 

Massachusetts Advocates for Nursing Home Reform 

Memphis Center for Independent living (Tennessee) 

Michigan Disability Rights Coalition 

Michigan Elder Justice Initiative 

Michigan Health link Coaliton 

Michigan long Term Care Ombudsman Program 

Michigan Olmstead Coalition 

Michigan Protection & Advocacy Service, Inc. 

Midstate Independent living Choice, Inc. (Wisconsin) 

Middle Georgia Center for Independent Living, Inc. 

Midwest Military Outreach (Iowa) 

Missouri Association of Area Agencies on Aging 

Missouri Developmental Disabilities Council 

Missouri long-Term Care Ombudsman 

Montana Independent Living Project 

Montana Statewide Independent living Council 

Muslims for Evidence Based Health Care (Washington) 

NAMI Connecticut 

National Federation of the Blind of Maryland 

Nebraska Ombudsman Office 

New Hampshire Office of the long Term Care Ombudman 

New River Valley Disability Resource Center (Virginia) 

New York Association on Independent living 

New York State Independent living Council, Inc. (NYSilC) 

New York State Office of the State long Term Care Ombudsman 

North Central Independent living Services, Inc. (Montana) 

North Country Independent living, Inc. (Wisconsin) 

Northeast Independent living Program, Inc. (Massachusetts) 

Northern Regional Center for Independent Living (New York) 

9 
194 


36069.136

Ohio Association of Area Agencies on Aging 

Ohio Office of the State Long-Term Care Ombudsman 

Old Friends Club (Washington) 

Options for Independent Living (Wisconsin) 

Paraquad (Missouri) 

Partners in Care Foundation (California) 

Pennsylvania ASPE 

Personal Assistance Services Council (California) 

Personal Attendant Coalition of Texas 

Placer Independent Resource Services (California) 

Public Health Advocates (California) 

Prairie Independent Living Resource Center, Inc. (Kansas) 

Progress Center for Independent Living (Illinois) 

Progressive Center for Independent Living (New Jersey) 

Protection & Advocacy Project of ND (North Dakota) 

Protection and Advocacy for People with Disabilities, Inc. (South Carolina) 

RAMP Center for Independent Living (Illinois) 

REAL Services, Inc. (Indiana) 

Resident Councils of Washington 

Resource Center for Accessible Living (New York) 

Resource Center for Independence Living (New York) 

Resources for Independent Living, Inc. (Virginia) 

Resources for Independence Central Valley (California) 

Rllong Term Care Ombudsman (Rhode Island) 

Roads to Independence (Utah) 

Ron Yost Personal Assistance Services Board (West Virginia) 

Rolling Start Inc. (California) 

San Antonio Independent Living Services (Texas) 

San Diegans for Healthcare Coverage (California) 

SCIL (Missouri) 

SECC, Washington DC/Maryland 

Senior Advisory Council of King County (Washington) 

SeniorServ (California) 

Service Center For Independent Life (California) 

10 
195 


36069.137

Shepherd Center (Georgia) 

Silicon Valley Independent Living Center (California) 

Smart Policy Works (Illinois) 

Sno-valley Senior Center (Washington) 

Society's Assets, Inc. (Wisconsin) 

Sources for Community Independent Living Services (Arkansas) 

Southeast Kansas Independent Living Resource Center 

Southeastern Wisconsin ADAPT 

Southeastern Wisconsin Disability Rights 

Southern Adirondack Independent Living Center (New York) 

Southern Tier Independence Center (New York) 

Southwest Center for Independence (Colorado) 

Southwest Center for Independent Living (SCIL) (Missouri) 

Southwest Louisiana Independence Center 

Spa Area Independent Living Services, Inc. (Arkansas) 

St. Barnabas Senior Services (California) 

Star Choices, Inc. (Georgia) 

Statewide Parent Advocacy network (New Jersey) 

Statewide Independent Living Council of Georgia 

Statewide Independent Living Council of Illinois 

Statewide Independent Living Council of Tennessee 

Stavros Center for Independent Living (Massachusetts) 

Sunrise Fiduciary (California) 

SWIRCA & More (Indiana) 

Syntiro (Maine) 

Texas Advocates 

Texas Association for Home Care & Hospice 

Texas Parent to Texas 

The Freedom Center, Inc. (Maryland) 

The IMAGE Center for People with Disabilities (Maryland) 

The Resource Center for Accessible Living, Inc. (New York) 

Topeka Independent Living Resource Center (Kansas) 

Touch the Future Inc. (South Carolina) 

Transitions in Dementia Care (Washington) 

11 
196 


36069.138

UDW/AFSCME Local 3930 (California) 

University of Cincinnati Center for Excellence in Developmental Disabilities 

Utah Developmental Disabilities Council 

Vermont Long-Term Care Ombudsman Program 

The Viscardi Center (New York) 

Voices for Quality Care (LTC), Inc. (Maryland) 

Walton Options for Independent Living, Inc. (Georgia and South Carolina) 

Washington State Independent Living Council 

West Virginia Statewide Independent Living Council 

Western Center on Law and Poverty (California) 

Western Reserve Independent Living Center (Ohio) 

Western New York Independent Living 

Westchester Disabled on The Move Inc. (New York) 

Wisconsin Board for People with Developmental Disabilities 

Wisconsin Coalition of Independent Living Centers 

12 
197 


36069.139

Pii!Pack, Inc. 

250 Commercial Street 

Manchester NH 03101 

September 4, 2018 

The Honorable Michael Burgess 

Chairman 

House Energy and Commerce Committee 

Subcommittee on Health 

2336 Rayburn House Office Building 

Washington, DC 20510 

Dear Chairman Burgess, 

0 PiUPack 

In regard to the hearing scheduled for Wednesday, September 5, 2018, entitled "Opportunities to Improve Health 

Care", I write to extend my strong support for your discussion draft that will prohibit the use of"gag clauses" in 

Medicare and certain private health insurance plans. 

As a licensed pharmacist and CEO of Pil!Pack, Inc., I share the Subcommittee's desire to promote transparency in 

our Nation's medical system. Prohibiting pharmacy benefit managers (PBMs) from utilizing "gag clauses" on 

pharmacists will ensure proper disclosure of the best available price for each insured enrollee. Today, pharmacists 

have limited ability to help patients understand the total cost of their medications because pricing information is 

closely held by PBMs. We advocate full drug price transparency for consumers and support this effort as a step 

towards that goal. 

Pil!Pack is an independently operated national pharmacy, licensed and providing home delivery to customers in 

every state except Hawaii. We offer unique services designed to support medication adherence for customers who 

take multiple medications every day. Home delivery is a core component of our services, making it possible for 

anyone to receive their medications without time-consuming and burdensome trips to the pharmacy. This is 

particularly important for customers who have mobility restrictions or lack consistent access to transportation. 

Since our launch in 2014, Pil!Pack has grown to serve tens of thousands of customers and employs approximately 

800 professionals in six locations, including our headquarters in Manchester, NH. We are fully compliant with all 

federal and state regulations and have earned rigorous private accreditations. Pil!Pack is currently the only 

independently operated pharmacy of our scale to offer home delivery nationwide. 

Prohibiting "gag clauses" and providing transparency will send a strong signal in support of innovative efforts to 

put patients first. It will benefit customers seeking high quality medical care and encourage new patient-centric 

pharmacy business experiences. Thank you for your leadership. 

Sincerely, 

TJ Parker 

Co-founder & CEO, Pil!Pack, Inc. 
198 


36069.140

L<e'adingAge· 

LeadingAge Statement 

The Money Follows the Person Program and the EMPOWER Care Act 

House Energy and Commerce Committee 

Subcommittee on Health 

September 5, 2018 

LeadingAge, an association of not-for-profit aging services providers, appreciates the 

opportunity to comment on the Money Follows the Person (MFP) Program and the EMPOWER 

Care Act. We are pleased that the Subcommittee on Health is focusing attention on 

"opportunities to improve health care" which includes legislation that helps provide resources to 

State Medicaid programs to help transition older adults and individuals with chronic conditions 

and disabilities from nursing homes back into local communities. 

The mission of LeadingAge is to expand the world of possibilities for aging. Our membership 

has a service footprint of 4.5 million and includes a community of 6,000 members representing 

the entire field of aging services, including not-for-profit organizations, state partners, and 

hundreds of businesses, consumer groups, foundations, and research partners. LeadingAge is a 

tax-exempt charitable organization focused on education, advocacy, and applied research. 

The Money Follows the Person (MFP) demonstration program is a Medicaid initiative designed 

to expand community-based long-term services and supports (L TSS) options. MFP, first 

authorized in the Deficit Reduction Act of 2005, was extended until 2016 under the Affordable 

Care Act. To be eligible for MFP, Medicaid beneficiaries must reside in a nursing home or 

similar facility, for at least 90 days prior to transitioning to a community residence (e.g., house, 

apartment, small group home). Under MFP, a participant receives home and community-based 

services for which the state receives enhanced federal matching funds during a beneficiary's 

participation year. States began operating in MFP in 2007, and between 2007 and 2017 fortythree states transitioned over 75,000 individuals into the community. 1 The EMPOWER Care Act 

extends funding for the 5-year MFP demonstration to 2022. 

For the purposes of this demonstration, participants must move to a qualified residence in the 

community, which include homes either owned or leased by the participant or a family member, 

individual apartments or small group homes. Once transitioned to a qualified residence in the 

community, participants are eligible for MFP for a year, or 365 days. During this time MFP 

demonstrations may provide up to three categories of services: ( 1) qualified home and 

community-based L TSS; (2) demonstration services that help people adjust to commtmity living; 

and (3) supplemental services that are not reimbursable outside waiver programs. States receive 

1 https://www.medicaid.gov/medicaid/ltss/money-follows-the-person/index.html 

2519ConnectlcutAve .. NW 1 Washington, DC 2ooo8·15.20 

f, 20;!.783.2242. I r 10l-78P:255 LeadlngAge.org The Trusted Voice for Aging 
199 


36069.141

an MFP-enhanced Federal Medical Assistance Percentage (FMAP) for either the qualified or 

demonstration home and community-based L TSS.2 

LeadingAge strongly believes the MFP program represents a major step forward to give people 

needing LTSS more choice about where they live and receive care. We support the program's 

intent to: (I) increase the use of home and community-based, rather than nursing home long-term 

care services; (2) eliminate barriers whether in state law, the state Medicaid plan, and the state 

budget, or otherwise, that prevent or restrict the flexible use of Medicaid funds to enable 

Medicaid-eligible individuals to receive support for appropriate and necessary long-term services 

in the settings of their choice; (3) increase the ability of Medicaid programs to assure continued 

provision of home and community-based long-term care services to eligible individuals who 

choose to transition from a nursing home to a community setting of their choice; and (4) ensure 

that the procedures are in place (at least comparable to those required under the qualified HCBS 

program) to provide quality assurance for eligible individuals receiving Medicaid home and 

community-based long-term care services and to provide for continuous quality improvement in 

such services. 

The MFP demonstration has allowed states to provide a richer mix of services that allow 

beneficiaries to access home and community-based L TSS, including home health care services, 

personal care assistance services; in-home private duty nursing, hospice, employment support 

services, and adult day services. 

We greatly appreciate the Subcommittee on Health's attention to an issue that is becoming ever 

more urgent, and we congratulate the committee's leadership for their foresight. We look 

forward to working with the committee on solutions to implement programs that assist with 

helping to move older adults receive care at home or in a community-based setting. 

2 https:l/www.medicaid.gov/medicaid/ltss/downloads/money-follows-the-person/mfp-rtc.pdf 
200 


36069.142

mhpa Medicaid Health 

Plans of America 

September 5, 2018 

Hon. Michael Burgess 

Chairman 

Energy and Commerce Committee 

Subcommittee on Health 

U.S. House of Representatives 

Washington, DC 20515 

Dear Mr. Chairman and Ranking Member, 

Hon. Gene Green 

Ranking Member 

Energy and Commerce Committee 

Subcommittee on Health 

U.S. House of Representatives 

Washington, DC 20515 

Thank you for the opportunity to submit testimony for the record for the 

Health Subcommittee's September 5th hearing "Opportunities to Improve 

Health Care" regarding H.R. 3325, the ACE Kids Act. 

Medicaid Health Plans of America (MHPA) member plans are committed 

partners with Congress, the Administration and the states in strengthening 

Medicaid and ensuring that the program improves the delivery of care for 

beneficiaries. 

MHPA is the national trade association representing more than 90 managed 

care health plans that contract with state Medicaid agencies in 39 states plus 

DC to provide comprehensive, high-quality health care to nearly 25 million 

Medicaid enrollees in a coordinated and cost-effective way. The number of 

Medicaid beneficiaries who receive their care through managed care plans 

continues to rise annually, in part, as more states turn to the expertise of 

managed care plans to help coordinate, manage and integrate health care 

for growing numbers of populations of Medicaid enrollees, including Children 

with Special Health Care Needs (CSHCNs). 

We appreciate that the legislation has been significantly improved since the 

114th Congress to address some of the concerns expressed by MHPA and 

other stakeholders. However, it continues to rely on a model that would 

create silos that fragment the medical care and support services that are 

essential for these children. 

Under current law States already have the ability to deploy various medical 

home and care-coordination models 1 to meet the needs of CSHCNs and most 

1 Several pathways already exist for states to create provider led medical homes and health 

plan led care coordination programs for CSHCN's, including, for example, ACA Sec. 
201 


36069.143

, ,,mhpa Medicaid Health 

Plans of America 

of them have chosen not to deploy provider-led models for sound policy 

reasons. This calls into question the appropriateness of creating a 

substantial financial inducement to the states2 for programs and 

mechanisms states already have the ability to implement. 

Impact on beneficiaries: MHPA is concerned that in states with managed 

care systems for Medicaid that adoption of a provider-led model outside of 

managed care networks would negatively impact the health and wellbeing of 

children and their families while simultaneously increasing the cost of ;pte. 

As you know, three states3 have implemented MMCO operated speci~lized 

plans for CSHCNs. In about half of the other 36 states that utilize" managed 

care plans for Medicaid, state contracts with MMCOs contain ~;Variety of 

provisions requiring MCOs to maintain specific specialized ,S:fl?abilities, . 

networks, procedures and protocols to meet the needs of CSHCN's. These 

special plans cover the comprehensive range of servig:s these children need, 

and the MMCO networks include the best pediatric hospitals in the state and 

offer access to national "super-specialists" as nel'!cfed. 

// 

These managed care contracts also create important operational safeguards 

to ensure the solvency and sustainability of'MMCOs and the care they 

manage. While the proposal strives to artow states to give provider-led 

health homes much of the responsibijjt(es of an MMCO, we should be careful 

that it also assures a commensurate level of oversight and minimal 

operational standards to protectifates and beneficiaries. / 

States already have the a)illity, to create a variety of care 

coordination mechani~s, including pediatric health homes: 

Additional federal legi!lJ)3tion is not required for states to create either 

provider-led or man9Qed care based enhanced pediatric health homes. 

Through speciali~d managed care contracts or under pilots and waivers, 

states are incr~singly adding CSHCNs into managed care plans, opting for 

the compretJensive and effective model that MMCOs provide. MMCOs 

already roL:Itinely meet and far exceed the capabilities mandated under the 

proposal{ "Health Home Qualification Requirements". States already have 

the al511ity to create health homes serving children under current law4 • 

2703health homes, waivers, specialized managed care plans and special provisions in 

managed care contracts. 2 The Enhanced FMAP proposed in the legislation 

3 CA, FL and DC 4 For example, through ACA Sec. 2703, state waivers, or alternative payment 

arrangements. 
202 


36069.144

mhpa Medicaid Health 

Plans of America 

Out-of-state care: In rare instances where the necessary specialist care is 

not available in-state, MMCO's send the child and family to "superspecialists" in various locations across the country, negotiating one-off 

contracts and relying on pre-established reimbursement ratess. 

Identifying and utilizing these "super-specialists" does not create an 

operational challenge for MMCOs, however we understand that CMS-State 

provider enrollment procedures may represent a challenge for fee-forservice programs. MHPA strongly supports efforts to streamline the PI)>Cess 

for CMS-State enrollment of providers. -'l 

Medicaid is not just medical care: MMCO's operating either .s;ffecial plans 

for CSHCNs or plans with special provisions have developed networks and 

capabilities to efficiently and effectively provide, integrate,~ manage a 

wide and comprehensive range of both medical and non-medical support 

services for children and their families. This is not are capability of a 

hospital-based medical home. 

/' 

Often times the most challenging part of managfilg care for CSHCNs is 

managing homecare, transportation, prescriptron drugs, nutrition assistance, 

and a wide variety of other medical and non-medical services. The variety of 

services MMCOs offer for CSHCNs can be far broader than what a hospital 

system provides. 6 :/ 

Ability to take and manage cosfrisk: CMS experience with ACOs in 

recent years has demonstrate&the inability or unwillingness of provider led 

entities to take and manage ftJII-risk. The proposal removes this important 

incentive to keep patien~ healthy and out of the most expensive care 

setting - the hospitaL,.,,., 

While the legislatiQJY;.does encourage exploration of various alternative 

payment modeiS'/it does not require EPHH's to operate under a full-risk 

capitation mode'!. Given the reluctance of provider-led models to take the 

kind of rists,ihat MMCO's routinely take, the proposal removes incentives for 

effective,eost containment and creates incentives for fee for volume. 

Conflict of interest: The proposal gives the provider control over where a 

patient will receive their care. When a provider-led entity routinely 

determines where a child will receive care, it creates an inherent conflict of 

interest that may result in suboptimal care decisions as EPHH hospitals seek 

5 Either the state established fee for service rate, or the rates negotiated by the MMCO if it 

operates in the destination state. 6 SEE Appendix 1 "Examples of Services Provided by Managed Care to CSHCN's" 
203 


36069.145

', mhpa Medicaid Health 

Plans of America 

to retain revenue by keeping children "in house" rather than sending them to 

the most appropriate pediatric specialist, or to a less cost-intensive service 

provider. 

Efficiency: Many routine, non-critical services that don't require treatment 

by high cost specialists or in high cost institutional settings would often cost 

many times more through a provider-led EPHH than they cost through an 

MMCO network7 , which utilizes a comprehensive network of providers to 

deliver care most efficiently and effectively. These lower intensity cosy 

providers are often also more convenient and accessible for families-than a 

hospital-based health home. ,/ 

We share concerns that by increasing federal matching funds ,offered to 

states implementing EPHH's the proposal will create perve_!:;;e incentives to 

states to abandon innovative and effective managed care-based approaches 

to caring for these children. While intending to adva~ care for CSHCN's, 

the proposal, for the reasons we mention, is likely to reverse recent progress 

in several states. // ; 

Access to Care: It is reasonable to assume ihat provider-led EPHH's will 

routinely steer CSHCNs into their EPHH even if the engagement with the 

provider entity is minimal or occasional, ~ven if adequate care is available 

closer to home. This steering could t)a~e negative consequences for local 

health care providers, FQHCs, ruraVhospitals, and other community-based 

providers, driving them out of bugjness and leaving those communities 

without access to services. Tj:l-e resulting hospital consolidation would not 

only limit access to care b~would also have the unintended consequence of 

reducing the ability of inc:fividual states to manage costs effectively, 

unnecessarily driving 01:> program costs. 

; 

Separate cover_~ge for family members: From experience, we know that 

keeping familie~together under the same insurance plan and provider 

network improves access to care and results. The proposal would have the 

effect of p<Sving children out of their family or caregiver's Medicaid plan and 

into an EPHH, greatly complicating compliance with treatment and care 

regim~ns for both CSHCN's and family members. As such, the model 

proposed would fragment the care provided to the child in need of 

extraordinary services from their family and/or other caregivers. Creating a 

dynamic that separates the child from their parents via different service 

7 Some states, such as Florida, limit reimbursement to providers for services to a 

percentage of Medicaid fee for service rates, but in most states is it common for routine 

visits, vaccines and other services to cost several times more than they would at a lower 

cost-intensive provider such as a CHC/FQHC. 
204 


36069.146

mhpa Medicaid Health 

Plans of America 

providers is likely to add to, rather than reduce, the scheduling and other 

service difficulties the families already face. Because many of these 

children's parents are low-income or otherwise disadvantaged, this increased 

complexity is likely to create additional barriers that would be even harder to 

overcome. 

Legislation creates a federal definition of CSHCN :This is an important 

definition that has additional implications for states and should be given 

thorough consideration. / 

Thank you again for the opportunity to comment on the legis(ation 

and suggest improvements. The most important change we can 

recommend to the legislation to ensure that the full capabiliti¥of both 

provider-led entities and managed care are brought to bea)/tO meet the 

needs of CSHCNs is to modify the legislation to require that, if implemented 

in a state with Medicaid managed care, that an Enharwed Pediatric Health 

Home must operate as a network element in the MMCO's network and that 

payments to the EPHH be included in the MMCO's/capitated full risk payment 

rates established by the state. / 

All the best, 

Francis J. Rienzo 

/ 

Vice President for GoyE!tnment Relations and Advocacy 

/;/ 
205 


36069.147

mhpa Medicaid Health 

Plans of America 

Appendix 1 

"Examples of Services Provided by Managed Care to CSHCNs" 

Behavioral health services 

In home care 

Prescription drugs and medication management 

Lab testing 

Vaccines 

/ 

Equipment and supplies 

Family transportation and lodging for out of townjstafe specialist visits // 

Care coordination for low-income or geriatric patients/members 

/ 

Nutrition education / / 

Transportation to and from medical appointments 

Parent education 

// 

School-based healthcare servis,.es 

/ 

/ 

/ 

// 

/ 
206 


36069.148

September 5, 2018 

The Honorable Charles Grassley 

135 Hart Senate Office Building 

United States Senate 

Washington, DC 20515 

The Honorable Joe Barton 

21 07 Rayburn House Office Building 

United States House of Representatives 

Washington, DC 20515 

Association of 

American Medical Coll89fl 655 K Street, NW, Suite 100, Washington, DC 20001·2399 

T 202 8280400 aamc.org 

The Honorable Michael Bennett 

548 Russell Senate Office Building 

United States Senate 

Washington, DC 20515 

The Honorable Kathy Castor 

2052 Rayburn House Office Building 

United States House of Representatives 

Washington, DC 20515 

Dear Senators Grassley and Bennett and Representatives Barton and Castor: 

On behalf of the Association of American Medical Colleges (AAMC), I am writing to express 

support for The Advancing Care for Exceptional Kids Act of 2017 (ACE Kids Act, S. 428, H.R. 

3325). Thank you for your leadership in introducing this bipartisan legislation to improve health 

care for children with complex medical conditions on Medicaid. 

The AAMC is a not-for-profit association dedicated to transforming health care through 

innovative medical education, cutting-edge patient care, and groundbreaking medical research. 

Its members are all 151 accredited U.S. medical schools; nearly 400 major teaching hospitals and 

health systems, including 51 Department of Veterans Affairs medical centers; and more than 80 

academic societies. Through these institutions and organizations, the AAMC serves the leaders 

of America's medical schools and teaching hospitals and their more than 173,000 full-time 

faculty members, 89,000 medical students, 129,000 resident physicians, and more than 60,000 

graduate students and postdoctoral researchers in the biomedical sciences. 

The ACE Kids Act is an important piece oflegislation that creates a patient-centered delivery 

system for a unique population of children to help ensure access to care across state lines and 

reduce the burden on these children's families. Under this legislation, specially-designed health 

homes created for children with complex medical conditions would employ national quality 

standards and coordinate care, which are both essential to improving quality of care and reducing 

costs. 

The ACE Kids Act, which is voluntary for states, families, and providers, would create savings 

to Medicaid by reducing hospitalizations and emergency room visits while providing essential 

services and supports for these children. As such, the AAMC is happy to support this legislation. 
207 


36069.149

Thank you for your leadership in introducing this critical legislation- we look forward to 

working with you to advance this bill this year. If you have any questions, please contact Len 

Marquez, AAMC Senior Director of Government Relations, at lmarguez@aarnc.org. 

Sincerely, 

Karen Fisher, JD 

Chief Public Policy Officer 
208 


36069.150

GREG WALDEN, OREGON 

CHAIRMAN 

Mr. Hugh Chancy 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

~ongre~~ of tbe Wntteb ~tate~ 

f4)oul)e ot ~eprel)entattbel) 

COMMITIEE ON ENERGY AND COMMERCE 

2125 RAYBURN HousE OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 (202!225<Z927 

(2021225-3641 

September 26, 2018 

Member, Board of Directors 

National Community Pharmacist's Association 

100 Dangerfield Road 

Alexandria, VA 22314 

Dear Mr. Chancy: 

Thank you for appearing before the Subcommittee on Health on September 5, 2018, to 

testify at the hearing entitled "Opportunities to Improve Health Care." 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record 

remains open for ten business days to permit Members to submit additional questions for the 

record, which are attached. To facilitate the printing of the hearing record, please respond to 

these questions with a transmittal letter by the close of business on October 3, 2018. Your 

responses should be mailed to Dan Butler, Legislative Clerk, Committee on Energy and 

Commerce, 2125 Raybum House Office Building, Washington, DC 20515 and e-mailed in Word 

format to dan.butler@mail.house.gov. 

Thank you again for your time and effort preparing and delivering testimony before the 

Subcommittee. 

cc: The Honorable Gene Green, Ranking Member, Subcommittee on Health 

Attachment 
209 


36069.151

WWW.MC,.AMIT.OlC 

Hugh Chancy's Answer to The Honorable EarlL. "Buddy" Carter 

1. In your interactions with Pharmacy Benefit Managers (PBMs), are you able to negotiate with PBMs to 

have provisions altered or removed from contracts such as non-disparagement clauses? If not, why do 

you feel required to sign these contracts? 

No, I am not able to negotiate with PBMs to have provisions altered or removed from contracts such as nondisparagement clauses because PBM contracts, especially those with the largest PBMs in the market, are 

non-negotiable. 

Three large companies lead the PBM market: Express Scripts, CVS Caremark, and OptumRx.1 A recent report 

from the Council of Economic Advisers found that these PBMs account for 85 percent of the PBM market. 

More so, these three PBMs cover a significant level of insured lives. Of note, CVS Caremark has recently 

stated that it covers approximately 34 percent of covered lives.' This significant market share from just three 

PBMs allows them exercise undue market leverage in negotiating contracts with community pharmacies like 

mine. 

The default practice in contracting with these PBMs is that there is no opportunity to red-line these contracts 

which often include non-negotiable blind price terms, overly broad non-disparagement clauses, and other 

provisions that disadvantage community pharmacies. In fact, community pharmacies like mine routinely 

must agree to non-negotiable contracts from these PBMs just to continue to serve my longstanding patients. 

More so, from a business standpoint, community pharmacies cannot just walk away from most PBM 

contracts because if we did, we would lose a significant amount of our prescription revenue given the large 

share of covered lives these PBMs represent. We are in a no-win situation. 

PBMs often cite community pharmacies' reliance on a Pharmacy Services Administrative Organization or a 

PSAO to contract on their behalf to demonstrate a level playing field between PBMs and community 

pharmacies. In short, PSAOs are no match for the PBMs. In 2013, the Government Accounting Office (GAO) 

conducted a study on the role and ownership of PSAOs and stated: 

In addition, according to some PSAOs that we spoke with, reimbursement rates to 

pharmacies have decreased over time, and PSAOs and other sources we spoke with 

reported that PSAOs' ability to negotiate reimbursement rates has also decreased over 

time. Over half of the PSAOs we spoke with reported having little success in modifying 

1 Council of Economic Advisers, Refoiming Biopharmaceutfcal Pricing at Home and Abroad, Feb. 2018, available at 

https:lfwww. whitehouse.gov/wp-content/uoloads/2017/11/CEA-Rx-White-Paper-Final2.pdf. 2 According to CVS Health, it has 94 million PBM Plan Members. See CVS Health, available at https:l/cvshealth.com/about/factsand~company-information. The Pharmaceutical Care Management Association testified that PBMs administer drug plans for 

more than 266 million Americans. See Testimony of Mark Merritt, Pharmaceutical Care Management Association, United States 

House of Representatives Energy and Commerce Committee, Subcommittee on Health, Examining the Drug Supply Chain, Dec. 

13, 2017. 

oc 
210 


36069.152

Page 2 

certain contract terms because of negotiations. This may be due to PBMs' use of standard 

contract terms and the dominant market share of the largest PBMs. Many PBM contracts 

contain standard terms and conditions that are largely nonnegotiable. According to one 

PSAO, this may be particularly true for national contracts, in which third-party payers or 

their PBMs have set contract terms for all pharmacies across the country that opt into the 

third-party payers, or its PBM's network. For example, a national contract exists for some 

federal government programs, such as TRICARE. In addition, several sources told us that 

the increasing consolidation of entities in the PBM market has resulted in a few PBMs 

having large market shares, which has diminished the ability of PSAOs to negotiate with 

them, particularly over reimbursement rates. 3 

In conclusion, I am not able to negotiate with PBMs to have provisions altered or removed from contracts 

such as non-disparagement clauses. I must sign these contracts to serve my patients and to keep my small 

business open. 

3 See United States Government Accountability Office, Report to the Ranking, Member, Committee on Energy and Commerce, 

House of Representatives, Prescription Drugs: The Number, Role, and Ownership of Pharmacy Services Administrative 

Organizations, Jan. 2013, available at https://www.gao.gov/assets/660/651631.pdf. 
211 


36069.153

GREG WALDEN, OREGON 

CHAIRMAN 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

l!tongtt5'5' of tbt mntteb ~tates 

;J!}ou~e of l\epre~cntatibe~ 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HousE OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 

Majority (202)225~2927 

Minorily (202\225-3641 

September 26, 2018 

The Honorable Derek Schmidt 

Attorney General 

State of Kansas 

120 Southwest Tenth Avenue, Second Floor 

Topeka, KS 66612 

Dear Mr. Schmidt: 

Thank you for appearing before the Subcommittee on Health on September 5, 2018, to 

testify at the hearing entitled "Opportunities to Improve Health Care." 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record 

remains open for ten business days to permit Members to submit additional questions for the 

record, which are attached. To facilitate the printing of the hearing record, please respond to 

these questions with a transmittal letter by the close of business on October 3, 2018. Your 

responses should be mailed to Dan Butler, Legislative Clerk, Committee on Energy and 

Commerce, 2125 Rayburn House Office Building, Washington, DC 20515 and e-mailed in Word 

format to dan.butler@mail.house.gov. 

Thank you again for your time and effort preparing and delivering testimony before the 

Subcommittee. 

cc: The Honorable Gene Green, Ranking Member, Subcommittee on Health 

Attachment 
212 


36069.154

STATE OF KANSAS 

OFFICE OF THE ATTORNEY GENERAL 

DEREK SCHMIDT 

AnORNEY GENERAL 

Michael C. Burgess, M.D. 

Chairman, Subcommittee on Health 

Committee on Energy and Commerce 

2125 Rayburn House Office Building 

Washington, DC 20515-6115 

Dear Chairman Burgess: 

October 2, 2018 

MEMORIAL HALL 

120 SW lOTH AVE., 2ND FLOOR 

TOPEKA, KS 66612·1597 

(785) 296-2215" FAX (785) 296-6296 

WWW.AG.KS.GOV 

Please find attached my response to the Additional Questions for the Record transmitted to me in 

your letter dated September 26, 2018. Insofar as some questions request information that is 

beyond my personal knowledge, please be advised that I have consulted with staff at the National 

Association of Attorneys General and, through them, the National Association of Medicaid 

Fraud Control Units. As indicted below, my responses are reliant upon advice they have 

provided to me. 

I appreciated the opportunity to testify and provide this additional information in support ofH.R. 

3891. Please let me know ifi may be of further assistance. 

Derek Schmidt 

Kansas Attorney General 

cc: Hon. Gene Green, Ranking Member, Subcommittee on Health 

Attachment 
213 

Æ 


36069.155

Additional Questions for the Record 

1. What protections do patients currently have when Medicaid Fraud Control units detect abuse in a 

non-institutional setting? 

a. Are there any other settings that Medicaid Fraud Control Units are prohibited from addressing 

patient abuse? 

If a facility receives Medicaid funds, it will be included in a MFCU's jurisdiction when investigating 

patient abuse. Neither a facility that is not a Medicaid funded nor a non-institutional setting would fall 

under the jurisdiction of a MFCU for patient abuse cases. 

b. Can Medicaid Fraud Control Units detect, investigate and prosecute fraud in Indian 

Health Service Facilities? 

I am advised that a MFCU would not typically investigate an IHS facility due to jurisdictional issues. A 

federal agency could investigate an IHS facility with support from a state MFCU, but the MFCU would 

generally not be able to conduct the investigation on its own. This question might better be addressed 

to HHS-OIG, which is charged with enforcing the limitations on MFCU jurisdiction through administration 

of Federal Financial Participation. 

c. Can Medicaid Fraud Control Units pursue cases of patient abuse in IHS facilities? 

I am advised that if an IHS facility were funded by Medicaid, a MFCU could pursue the case though it 

would have to be acting jointly with federal agencies due to jurisdictional issues over the IHS. This 

question might better be addressed to HHS-OIG, which is charged with enforcing the limitations on 

MFCU jurisdiction through administration of Federal Financial Participation. 

d. Does the jurisdiction of the Medicaid Fraud Control Unit change dependent upon if the hospital is 

a direct service hospital versus a 638-contract hospital? 

I am advised that there are many factors regarding jurisdiction over both 638-contract hospitals and 

direct service hospitals. Regardless of either type of hospital, a MFCU would examine each situation on a 

case by case basis and coordinate an investigation with appropriate federal authorities. This question 

might better be addressed to HHS-OIG, which is charged with enforcing the limitations on MFCU 

jurisdiction through administration of Federal Financial Participation. 

e. Do you believe that MFCU's should be able to investigate federally run direct service facilities? 

I have no opinion on this question. 

f. Do you believe that MFCU's should be able to investigate 638 contract facilities? 

I have no opinion on this question.