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THE LACK OF HOSPITAL EMERGENCY SURGE CAPACITY: WILL THE ADMINISTRATION’S MEDICAID REGULATIONS MAKE IT WORSE? DAY TWO

HEARING

BEFORE THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

MAY 7, 2008

Serial No. 110–73

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

HENRY A. WAXMAN, California, Chairman

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

BRIAN HIGGINS, New York

JOHN A. YARMUTH, Kentucky

BRUCE L. BRALEY, Iowa

ELEANOR HOLMES NORTON, District of

Columbia

BETTY MCCOLLUM, Minnesota

JIM COOPER, Tennessee

CHRIS VAN HOLLEN, Maryland

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

JOHN P. SARBANES, Maryland

PETER WELCH, Vermont

——— ———

TOM DAVIS, Virginia

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

VIRGINIA FOXX, North Carolina

BRIAN P. BILBRAY, California

BILL SALI, Idaho

JIM JORDAN, Ohio

PHIL SCHILIRO, Chief of Staff

PHIL BARNETT, Staff Director

EARLEY GREEN, Chief Clerk

LAWRENCE HALLORAN, Minority Staff Director

(III)

C O N T E N T S

Page

Hearing held on May 7, 2008 ................................................................................. 1

Statement of:

Chertoff, Michael, Secretary of Homeland Security ...................................... 31

Leavitt, Michael O., Secretary of Health and Human Services .................... 10

Letters, statements, etc., submitted for the record by:

Chertoff, Michael, Secretary of Homeland Security, prepared statement

of ..................................................................................................................... 33

Davis, Hon. Tom, a Representative in Congress from the State of Virginia:

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

Wall Street Journal artical dated April 4, 2008 ..................................... 44

Leavitt, Michael O., Secretary of Health and Human Services, prepared

statement of ................................................................................................... 13

McCollum, Hon. Betty, a Representative in Congress from the State

of Minnesota, various statements ................................................................ 57

Sali, Hon. Bill, a Representative in Congress from the State of Idaho,

letter dated May 12, 2008 ............................................................................ 65

Waxman, Chairman Henry A., a Representative in Congress from the

State of California:

Information concerning I–35W bridge collapse ....................................... 62

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

(1)

THE LACK OF HOSPITAL EMERGENCY SURGE

CAPACITY: WILL THE ADMINISTRATION’S

MEDICAID REGULATIONS MAKE IT WORSE?

DAY TWO

WEDNESDAY, MAY 7, 2008

HOUSE OF REPRESENTATIVES,

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 9:31 a.m., in room

2154, Rayburn House Office Building, Hon. Henry A. Waxman

(chairman of the committee) presiding.

Present: Representatives Waxman, Cummings, Tierney, Norton,

McCollum, Van Hollen, Murphy, Sarbanes, Davis of Virginia,

Shays, Issa, and Sali.

Staff present: Phil Barnett, staff director and chief counsel;

Karen Nelson, health policy director; Karen Lightfoot, communications director and senior policy advisor; David Rapallo, chief investigative counsel; Andy Schneider, chief health counsel; John Williams, deputy chief investigative counsel; Sarah Despres, senior

health counsel; Steve Cha, professional staff member; Earley

Green, chief clerk; Zhongrui ‘‘JR’’ Deng, chief information officer;

Leneal Scott, information systems manager, Kerry Gutknecht, William Ragland, Miriam Edelman, and Jennifer Owens, staff assistants; Sheila Klein, office manager/general assistant to the staff director; Larry Halloran, minority staff director; Jennifer Safavian,

minority chief counsel for oversight and investigations; Keith

Ausbrook, minority general counsel; Christopher Bright, Jill

Schmaltz, Benjamin Chance, and Todd Greenwood, minority professional staff members; Patrick Lyden, minority parliamentarian and

member services coordinator; and Ali Ahmad, minority deputy

press secretary.

Chairman WAXMAN. The meeting will please come to order.

Today we are holding the second of 2 days of hearings on the impact of the administration’s Medicaid regulations on the ability of

our Nation’s emergency rooms to respond to a sudden influx of casualties from a terrorist attack.

On Monday we heard from the leading experts that the emergency rooms in our Nation’s premier trauma centers have little or

no surge capacity. We learned from them that many Level I trauma centers do not have the capacity to respond to a terrorist bombing like the one that happened in Madrid in 2004. And we learned

that the administration’s new Medicaid regulations are expected to

make these problems worse by cutting off crucial funding.

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The hearing left us with a number of important questions, which

we hope to answer this morning. Why would the Department of

Health and Human Services, knowing that the Nation’s emergency

care system is already stretched to the breaking point, withdraw

billions of Federal dollars from the hospitals that provide the most

comprehensive emergency care to the most seriously injured? Why

would the Department of Health and Human Services take this

drastic step without first considering the impact of its actions on

emergency preparedness, or consulting with the agency with lead

responsibility for homeland security? Why would the Department of

Homeland Security, which is the Federal agency with lead responsibility for protecting the Nation from terrorist attacks, stand by

while local emergency surge capacity is compromised?

The impact of the Medicaid regulations on our health care safety

net is not a partisan issue. Last month Republicans in the House

joined with Democrats in passing bipartisan legislation that would

postpone the regulations and give Secretary Leavitt and Secretary

Chertoff an opportunity to reevaluate their implications for homeland security.

The issue we are considering today is one that concerns all

Americans: how to ensure that we have a robust response capacity

in our emergency rooms. If the unthinkable happens, and we have

learned that the unthinkable can happen, lives will be lost unless

emergency care is immediately available. If a major city experiences a terrorist bombing like the one that occurred in Madrid,

there will be a golden hour, an hour in which the fate of those who

are injured will be determined, whether the most severely injured

survive or die. The Federal Government’s job is to do everything

possible to ensure that emergency care resources are ready during

that golden hour.

Certainly our government should not be taking actions that undermine the prospect of an effective emergency response. That is

why we are having this hearing today, and that is why I look forward to the testimony of the two men in charge, Secretary Chertoff

and Secretary Leavitt.

[The prepared statement of Chairman Henry A. Waxman follows:]

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Chairman WAXMAN. But before we go on, I want to recognize Mr.

Davis for an opening statement.

Mr. DAVIS OF VIRGINIA. Well, thank you, Mr. Chairman. As you

said, we are here today to discuss two issues, Medicaid reimbursement regulations and the hospital surge capacity in response to

predictable, some say inevitable, mass-casualty events. And we are

fortunate to have two very distinguished witnesses to inform our

discussion. Welcome Secretary Leavitt and Secretary Chertoff. We

appreciate their taking their valuable time to be with us today.

As we learned from Monday’s testimony on these same subjects,

the nexus between Medicaid payments to hospitals and emergency

preparedness may seem intuitive, but it is not by any means proven. Extrapolating directly from daily emergency department utilization rates to catastrophic surge capacity overlooks complex and

interrelated factors that differentiate single-facility financial management from the broader resources needed to mount a coordinated

regional disaster response. But extrapolate the committee did in releasing a 1-day snapshot of hospital emergency room occupancy in

seven major cities and concluding it painted a complete picture of

surge capacity.

Consulting the issues of Medicaid reimbursement and terrorism

preparedness simultaneously oversimplifies and obscures both

issues. I happen to agree with Chairman Waxman: we ought to

know more about the impact of the administration’s proposed regulation changes before exacting further cost savings from an already

stressed health care system. But wrapping that issue in the mantle

of terrorism creates the false impression that solving the problem

of emergency room capacity on Tuesday means we are ready for

doomsday. It does not. As one peer-reviewed study put it, surge capacity planning involves ensuring the ability to rapidly mobilize resources in reaction to such a sudden, unexpected increase in demand, regardless of baseline conditions.

It is just too simple and fiscally untenable to say there can never

be cost savings in Medicaid as long as we are not ready for a Madrid-style attack. Both Medicaid efficiencies and preparedness need

to be pursued; not one pitted against the other. So I hope we can

move beyond limited snapshots and talk about the dynamic range

of factors, in addition to baseline facility funding, that make up

real surge capacity: organization, leadership, standards of care,

medical education and training, interoperable communications,

transportation coordination and information technologies.

Finally, we appreciate the fact that our witnesses made a tough

choice to be here today. As we speak, the Federal Government is

conducting a national continuity of operations exercise, testing

many of the response elements needed to treat a surge of trauma

patients. I hope the exercise goes well in their absence, and trust

the committee’s approach to these issues will continue to be constructive and supportive of executive branch efforts to prepare the

Nation for catastrophic events. Thank you.

Chairman WAXMAN. Thank you very much, Mr. Davis.

[The prepared statement of Hon. Tom Davis follows:]

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Chairman WAXMAN. Because of time constraints, we will leave

the record open for all Members to insert an opening statement in

the record.

But we will go right to our very distinguished witnesses, and we

are privileged to have both capable Secretaries with us today with

distinguished careers in public service.

Secretary Michael Chertoff served as the Secretary of Homeland

Security since February 2005. That capacity is a challenge. He has

a challenging and critical responsibility to lead the Nation’s efforts

to prepare for, protect against, respond to and recover from terrorist attacks, major disasters and other catastrophic emergencies,

whether man-made or natural disasters, that affect our homeland.

And before taking the helm at the Department of Homeland Security, Secretary Chertoff served as a judge on the Third Circuit

Court of Appeals. Prior to that, he served as Assistant Attorney

General of the Criminal Division at the Department of Justice.

Secretary Michael Leavitt has been the Secretary of the Department of Health and Human Services since January 2005. As Secretary of HHS, he is responsible for managing a daunting array of

medical, public health and human services programs. HHS is the

lead Federal agency for public health and medical preparedness

and response. And before coming to HHS, Secretary Leavitt was

the Administrator of the Environmental Protection Agency. He also

served as Governor of Utah for three terms, and during his 11

years as Governor, Utah was recognized six times as one of America’s best-managed States. We are pleased to have both of you here

with us.

I don’t know which one of you wants to go first. Secretary

Leavitt—both of your prepared statements will be in the record in

full. We would like to ask you to make your oral presentation to

us now.

STATEMENT OF MICHAEL O. LEAVITT, SECRETARY OF

HEALTH AND HUMAN SERVICES

Secretary LEAVITT. Good morning, Mr. Chairman. And thank you

very much, Ranking Member Davis and other members of the committee. I am very pleased to discuss HHS leadership role in the

public health and medical emergency preparedness efforts, as well

as HHS and CMS efforts to ensure that Medicaid pays appropriately for services that are delivered to Medicaid recipients.

As you know, local, State and Federal agencies have a shared responsibility for ensuring that the Nation is prepared for emergencies. In that context, permit me to briefly discuss a few of the

emergency preparedness efforts that are currently being led by

HHS.

On October 18, 2007, President Bush signed the Homeland Security Presidential Directive 21 [HSPD–21]. It established a new national strategy for public health and medical preparedness. HSPD–

21 mandates the development of an implementation plan. HHS

chairs the interagency writing team that drafted the implementation plan that is currently in the process of being finalized.

As part of the implementation plan, HHS is implementing an

Emergency Care Coordinating Center. This new center will serve

as a coordinating focal point for emergency care as an enterprise.

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The ECC, as we have come to know it, charter is being finalized,

and we anticipate having the center up and running by the end of

this year.

The National Response Framework Emergency Support Function, or ESF 8, titled the Public Health and Medical Services Function, provides a mechanism for coordinating Federal assistance to

State, tribal and other local resources in response to a medical disaster.

The Secretary of Health and Human Services leads all of the

Federal public health and medical response to public health agencies. The Secretary of HHS also coordinates, through his Assistant

Secretary or ASPR, all of the ESF 8 preparedness, response and recovery actions. The National Disaster Medical System [NDMS],

transferred from the Department of Homeland Security to HHS

and remains the tip of the spear, if you will, as the Federal disaster health care response capacity.

Over the past 5 years, the Hospital Preparedness Program has

provided more than $2.6 billion to fund the development of medical

surge capacity at the State and local level. As part of our pandemic

planning, we have asked grantees to report participating hospitals’

ability to track beds electronically and to report to the grantee’s

emergency operations center within 60 minutes of a request.

From 2002 to 2007, the Public Health Emergency Preparedness

Program has provided $5.6 billion to State, local, tribal and territorial public health departments. This program has greatly increased the preparedness capabilities of the public health departments.

Now turning briefly to Medicaid, it is important to remember

that Medicaid is fundamentally a Federal-State commitment to

provide health care for Medicaid beneficiaries. First and foremost,

our responsibility is to assure that these low-income children, pregnant women and people with disabilities are able to receive highquality and appropriate care when they need it.

The package of recent Medicaid regulatory activity will help enable, or to ensure rather, that Medicaid is paying providers appropriately for services delivered to Medicaid recipients, and that

those services are effective, and that taxpayers are receiving the

full value of the dollars that are spent through Medicaid.

GAO and the Office of Inspector General at HHS have provided

policymakers with numerous reports on various areas in which

States inappropriately engage in activities that maximize Federal

revenues. These rules address these types of abuses head on. They

address them by ensuring that the Federal Medicaid dollars are

matching actual State payments for actual Medicaid expenses to

actual Medicaid beneficiaries. Medicaid is already an open-ended

Federal commitment for Medicaid services for Medicaid recipients.

It should not become a limitless account for State and local programs and agencies to draw Federal funds for non-Medicaid purposes.

In conclusion, as I have mentioned earlier, HHS is working diligently to improve our Nation’s emergency preparedness and our

medical surge capacity, and we have made extensive funding available to hospitals through the States specifically to this end.

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Medicaid, however, is fundamentally a partnership that relies on

both States and the Federal Government to contribute their share

of the cost of the program. Allowing for the continuation of abusive

practices that shift costs to the Federal Government is not an appropriate way to ensure our Nation’s preparedness. We are committed through our emergency preparedness efforts to continue to

make progress and to make funding available to States, while acting through these Medicaid rules, to provide greater stability in the

program and equity to the States. And I want to thank you for the

opportunity of being here to testify.

Chairman WAXMAN. Thank you, Secretary Leavitt.

[The prepared statement of Secretary Leavitt follows:]

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Chairman WAXMAN. Secretary Chertoff.

STATEMENT OF MICHAEL CHERTOFF, SECRETARY OF

HOMELAND SECURITY

Secretary CHERTOFF. Thank you, Mr. Chairman. Good morning,

Ranking Member Davis and other members of the committee.

Let me just take a few moments now, since my full statement

will be in the record, to put into perspective what the role of the

Department of Homeland Security is with respect to the issue of

preparedness and response, one dimension of which, but only one

dimension of which, is the issue of mass care in the event of some

kind of a terrorist attack or natural disaster. But I also underscore

the fact that the planning and execution of a response to an attack,

particularly with respect to the issue of mass care, would implicate

not only HHS, but would also require the participation of the Department of Defense and Department of Veterans Affairs. They

have a major role to play in furnishing the resources and capabilities necessary to respond to a medical emergency, and their capabilities are built into our plan. So it is not merely a matter of HHS.

Basically what I would like do is describe the role that we play

in any kind of a response and, therefore, what role we play in planning in the lead-up to the possibility of a response. As you know,

under the National Response Framework and the National Incident

Management System, the Department of Homeland Security plays

the role of incident coordinator/incident manager. That does not

mean that we are exercising command and control over other departments and agencies. That would be prohibited as a matter of

law.

What we do is bring to the table the agencies that will play a

role. There is a lead agency designated for particular functions; in

the case of mass terrorists, the Department of Health and Human

Services. That is a designation that is both prescribed by statute

as well as by HSPD 5 and HSPD 21. Our role then would be to

coordinate and deconflict the various capabilities that we bring to

the table and the roles and responsibilities of the lead agency and

other agencies. For example, in the case of an attack, let’s say a

conventional attack, we would obviously have to coordinate the law

enforcement response, although the lead agency there would be the

Department of Justice. There might well be a security response, in

which case we would be coordinating with the Department of Defense and the National Guard. And to the extent there was a mass

casualty response, the mission assignment for carrying that out

would be to HHS, but there would be support provided by the Department of Veterans Affairs and the Department of Defense. This

is all done under the rubric of what we call Emergency Support

Function 8, and the actual undertaking would be coordinated

through the National Response Coordination Center.

As part of the preparation for this, we engage in a variety of

planning exercises. And with respect to the issue of mass care,

again we look to the Department of Health and Human Services

to take the lead with respect to identifying what the gaps are with

respect to potential surge capability, what the available resources

are, and what are the most efficacious ways to provide those resources. That is done with the understanding that the initial reVerDate 11-MAY-2000 14:52 Sep 29, 2008 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 C:\DOCS\44180.TXT KATIE PsN: KATIE
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sponse obligation lies upon State and local public health officials.

Therefore, they must participate in the planning, and it is their responsibility to make sure that they are planning in a way that is

synchronized with us.

We also recognize, however, that these capabilities would likely

be overwhelmed in 24 hours, or maybe 48 hours. That is why we

have capabilities such as the National Disaster Medical System,

which is run by HHS. We would look to the Department of Defense

to provide mobile field hospitals and other kinds of medical capabilities, which we would move into the arena as quickly as possible.

The National Guard would obviously play a major role. And, again,

if there were some particular issue like a chemical attack or a dirty

bomb attack, there would be specialized capabilities by the military

that would be called into play.

So that is the general role that we play in coordinating these

issues. We have engaged in planning, strategic planning, on a number of scenarios, including some with medical dimensions, again

looking to HHS as the principal lead in identifying what the requirements are, identifying where the gaps are, and formulating a

way in which those gaps can be plugged.

Thank you, Mr. Chairman.

Chairman WAXMAN. Thank you very much.

[The prepared statement of Secretary Chertoff follows:]

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Chairman WAXMAN. Without objection, we are going to begin

questioning with 10-minute rounds, first controlled by the Chair

and second controlled by Mr. Davis. After that we will go back to

the 5-minute rule.

I am going to start off the questions myself.

Secretary Leavitt and Chertoff, we are here to answer the very

simple question—if we had a terrorist attack like what happened

in Madrid, with conventional bombs or suicide bombers, which

most terrorist experts say is most likely, not the unthinkable weapons of mass destruction, but if the unthinkable, unlikely terrorist

attack using conventional weapons occurred, would we be prepared

to deal with it?

Now, many experts have told us that if we had something like

an attack on a commuter train where, as in Madrid, 177 people

were killed and more than 2000 were injured, we wouldn’t have the

surge capacity in some of our major cities to deal with those people

in the Level I trauma centers or even in the emergency rooms.

Secretary Chertoff, do you think we have the capacity to deal

with such an attack?

Secretary CHERTOFF. I do, Mr. Chairman. Now, I want to note

that HHS is currently engaged in a systematic survey of capacities

and plans across the country, so there is going to be a definitive

answer to this. And there is no doubt some communities are better

prepared than others. But I don’t have to speculate about it.

I remember we had a bridge collapse in Minneapolis some

months ago. That was exactly the kind of event that you are talking about. It was not a terrorist event, but it was one which certainly posed challenges to casualties. My understanding is that in

Minneapolis things worked very well.

Chairman WAXMAN. Thirteen people went to the emergency room

under those circumstances. We could have hundreds, if not thousands, of people rushed into emergency rooms.

Secretary CHERTOFF. We have had air crashes, we have had

other disasters. I can’t give you a definitive statement with respect

to a particular city. What I can tell you is I am not sure that the

day-to-day capacity rates of emergency rooms is a prediction of the

capability of the emergency system to deal with a disaster.

Chairman WAXMAN. Have you delegated that to HHS?

Secretary CHERTOFF. HHS has a principal responsibility, to my

understanding.

Chairman WAXMAN. Well, let me read to you what your Chief

Medical Officer Jeff Runge told the House Appropriations Committee last month. He said, ‘‘I don’t think anybody who has looked

would be under the mistaken notion that we are adequately prepared for a hospital surge. We have squeezed all the capacity out

of the hospitals’ budgets, and it’s just not there.’’

He went on to say, ‘‘We frankly don’t have a lot of solutions for

it. Surge capacity does just not exist in the world of hospitals.’’

Mr. Runge did say the Federal assets could be brought to the

scene of a bombing, as did you earlier, but that could take some

period of time, maybe a day or more, which may be too long for

many critically injured victims.

So your own expert does not think we are prepared. Why, do you

disagree with Dr. Runge’s assessment?

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Secretary CHERTOFF. I wasn’t here for the testimony. I think it

depends on the number of people. If there are—I can certainly

imagine an attack of a dimension that would overwhelm local resources. That is the very premise of what our position is with respect to planning. It is the recognition that the Federal Government would have to step in and surge. And obviously since we are

doing a gap analysis, I am going to be the first person to tell you

there are undoubtedly gaps that need to be plugged, some of which

are planning, and some of which are capability gaps.

What I can’t tell you is that this is simply a matter of emergency

rooms. I think it is a much more complicated issue than that. I will

also obviously acknowledge I am awaiting more precision in the results of the HHS study with respect to the country as a whole.

Chairman WAXMAN. Well, I don’t doubt it is more complicated

than one factor or another, but what I fear, and what the experts

told us a couple days ago, is if we go ahead with these Medicaid

cuts, withdrawing billions of dollars from hospitals that have Trauma I centers and emergency rooms, we will be making the problem

worse. We will make it less sure that we can even meet the response that we found so inadequate in our survey on March 25th.

At that time the staff called Los Angeles, and three of the five

Level I hospitals that were so overcrowded, they simply shut their

doors. There wasn’t even a terrorist attack. They shut their doors

and said divert these people somewhere else. And Washington, DC,

both Level I trauma centers surveyed are over capacity and treating patients in hallways and waiting rooms.

So if, in the middle of this inadequate capability of our emergency rooms to deal with ordinary problems, we had a terrorist attack, I just think that if we go ahead with the billions of cuts in

Medicaid funds for those institutions, we are making the problem

worse. The first thing at the Federal level is at least not do any

harm. I think a lot of people can ask how is it possible that 6 years

since 9/11, nearly 3 years after Hurricane Katrina, we have spent

billions of taxpayer dollars on homeland security, and yet our

emergency systems are not in place?

I don’t doubt that you have very good intentions and a lot of

helpful initiatives, but the problem is that the positive effect of

these programs, which involve grants of millions of dollars, are

going to be overwhelmed when we pull out billions of dollars in

some of these Medicaid cuts.

We were told Monday that the Medicaid regulations will cripple

hospital emergency rooms. The head of Virginia’s emergency response program said if you take away significant Medicaid funding,

it is going to be disastrous. An expert from UCLA said the regulations would cripple emergency care in Los Angeles.

Secretary Leavitt, do you think these experts are wrong?

Secretary LEAVITT. Mr. Chairman, I think we are dealing with

two fundamentally different assumptions. They are fundamentally

different assumptions in two areas. The first is the way surge capacity works, and that we would have to rely on hospitals as the

bed for surge capacity. The second is that the mission of Medicaid

is the assurance of emergency preparedness.

Let me deal with the first one, surge capacity and the way it

works.

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Chairman WAXMAN. I am asking about the Medicaid, the Medicaid cuts by these new regulations. I know we contacted you and

your Department, and we asked for every document that you might

have that would indicate that you—if you—did an analysis to find

out what the impact would be of these Medicaid regulations. And

I think we might have even sent the same request to the Department of Homeland Security. And we found that there was not a

single analysis of the effects of the Medicaid regulations on our Nation’s emergency rooms. If that is the case—maybe we haven’t received it, but if that is the case, no analysis has been done. I just

think that is irresponsible.

Secretary LEAVITT. Mr. Chairman, we have exercises on a regular basis, and the people from CMS sit at the same table as those

from our Assistant Secretary for Preparedness and Response. Medicaid’s mission, however, is not emergency preparedness; it is to

provide health care to people, not to support institutions. Now, at

HHS we have a very important Assistant Secretary for Preparedness and Response who is tasked with that responsibility. We have

made substantial investments in developing surge capacity.

Chairman WAXMAN. Did he do an analysis of what the impact

would be of the Medicaid regulations that withdraw money from

these institutions?

Secretary LEAVITT. He manages emergency response, not Medicaid. The analysis on Medicaid was based on the fact that the funds

were being drawn for purposes that we believe were inappropriate

under the mission of Medicaid, which we believe to be helping people, not supporting institutions.

Chairman WAXMAN. Well, they help people by supporting institutions. Our public hospitals are absolutely dependent on the Medicaid dollars. They have so many people that come into emergency

rooms that have no insurance, and the hospitals then have to shift

the cost. And then if they find that Medicaid is not going to pay

them for graduate medical education or other functions that they

serve, they just have to give up the expensive things like Level I

trauma centers. That is what they are telling us. But it looks like

they never told you because they were never asked the question of

what the impact would be with these Medicaid cuts.

Secretary LEAVITT. Mr. Chairman, it probably won’t surprise you

that I hear similar expression from those who run schools, who say,

we need to have more money for our schools, and if we can find

a way to get Medicaid money to support our school effort, it will

help our schools. I hear a similar thing from those who run child

welfare programs; if we could just get some Medicaid money, it

would help us, and they stretch it over to health care. Medicaid

was not intended to be our emergency response mechanism.

Chairman WAXMAN. It wasn’t intended, but, in fact, it is.

Secretary Chertoff, you are head of the Homeland Security. You

have designated this issue of health care functioning to HHS, and

yet they are saying that they don’t know what the impact is going

to be of these cuts.

Congress always holds hearings after the fact. After Hurricane

Katrina and that disaster, we held hearings, and we asked, how

could this happen? This is a hearing to find out if we are prepared.

I don’t want it on my conscience years after a terrorist attack, God

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forbid, that we realize that we didn’t do what was necessary because the bureaucracies weren’t functioning the way they should,

the planning wasn’t taking place, that there was money being withdrawn so that the whole system, which is all very fragile in this

country for health care, wasn’t able to function when it came to

emergency care or preparedness for a surge of victims of a terrorist

attack. I don’t want it on my conscience.

Do you feel that you can tell us today that your conscience would

say that we are doing all that we need to do, Secretary Leavitt and

Secretary Chertoff?

Secretary LEAVITT. Mr. Chairman, I share with you the worry

about surge capacity. It is a responsibility that I have and we have

at HHS. I also worry about the long-term sustainability of Medicaid. Medicaid was not designed nor intended to be the source of

money that we use to design an effective surge capacity strategy

in this country. We do have a means by which that should be done.

If Congress in its wisdom believes that more money is needed for

more surge capacity, we need to use the intended vehicle. We need

to apply it to a logical, thoughtful strategy. That logical and

thoughtful strategy will not include emergency rooms being the

only place where surge capacity takes place. There is not an emergency room in America for which you can’t build a scenario that

will blow the doors off in a very short period of time.

Chairman WAXMAN. So you feel good about the situation?

Secretary LEAVITT. No, that is not what I said at all, Mr. Chairman. I said I don’t feel good about the situation, but I don’t believe

Medicaid is the way to solve it.

Chairman WAXMAN. And you think we ought to give other

money, but we haven’t been asked to give other money for this purpose.

Secretary Chertoff, how do you feel?

Secretary CHERTOFF. I actually agree with Secretary Leavitt on

this. I think that I am the last person to tell you I think we are

done. I think that we aren’t—and I have been involved in more

specifically looking at the issue of emergency response in the Gulf

States. But more generally I think we need to be identifying gaps

based on planning done at a Federal, State and local level. And

then if we need to plug the gaps with money, the money ought to

be targeted to plug the gaps.

Although I am seeing a bit of a disconnect, I have no reason to

believe that giving more Medicaid money to hospitals is going to result in that money being spent specifically on those items which

would be required to deal with a surge situation. Nor is it obvious

to me that the only solution in this surge situation is the emergency rooms.

So the question to me would be, do they need to have additional

beds in storage? Do they need to have additional ventilators or

medication or things of that sort? And if, in fact, there is a gap,

that ought to be directly funded, but with the understanding that

money is going to be spent on those issues. I have no reason to believe that Medicaid funding in a hospital is necessarily going to be

dedicated to emergency response as opposed to something else.

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Chairman WAXMAN. A lot of it is being dedicated to this now,

and that money is going to be withdrawn, and it is a sizable

amount of money.

I have taken up 13 minutes, and I am going to give 13 minutes

to Mr. Davis.

Mr. DAVIS OF VIRGINIA. Thank you, Mr. Chairman.

Secretary Leavitt, let me start with you. Thanks for being here.

Regardless of one’s views on the regulation, I am concerned about

using Medicaid reimbursement to support emergency medical preparedness because it is an imperfect financial tool. In my experience, hospitals use additional revenues created through reimbursement policy. They can be reinvested in ways that may not improve

emergency capacity, as Secretary Chertoff just noted. For example,

hospitals may more regularly reinvest in expanding capacity for

profitable services, orthopedics for example.

Do you think that additional Medicaid reimbursement necessarily results in improved emergency surge capacity?

Secretary LEAVITT. There is no evidence that it does.

Mr. DAVIS OF VIRGINIA. Thank you very much.

I mean, Medicaid is the fastest-growing part of the Federal budget. It is the fastest-growing part of States’ budgets as well. And to

allow this to continue without tampering and looking at ways that

we can improve service, but at the same time cut back costs means

there won’t be money for a lot of other things in the budget downstream.

Let me ask you this, Secretary Leavitt. For the Homeland Security Presidential Directive 21, it is my understanding that there is

a stakeholder group that is working on the different financial levers available to improve preparedness. The group is looking at

Medicare, Medicaid, private payer, grant funding and market

forces. How does this group’s work inform future funding decisions

made at the Department?

Secretary LEAVITT. That group is looking at that question as well

as many, many others to inform this question. Until I receive their

report, I don’t know what they will say. I think it is clear that

homeland security is everyone’s second job. We all have a primary

job. The job of Medicaid is to take care of people who are poor or

indigent or disabled, and States are using ambiguities in the law

to try and tap that fund for many different reasons.

Mr. DAVIS OF VIRGINIA. Because it is the largest part of their

budget?

Secretary LEAVITT. And they have determined——

Mr. DAVIS OF VIRGINIA. Even in economic downturns when their

revenues are less, the Medicaid costs are going up.

Secretary LEAVITT. In fact, Mr. Davis, I would make the point

that Medicaid is the single greatest influence on State budgets

right now.

Mr. DAVIS OF VIRGINIA. I agree.

Secretary LEAVITT. And if you wanted to see why States were not

investing and why they were looking for ways in which they could

divert Federal funds into schools and to child welfare and to public

health and public safety, it is because Medicaid is pushing all those

things out and crowding them out. Their capacity to do that is

being compromised by the fact that the program is growing so fast.

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Mr. DAVIS OF VIRGINIA. And understand this, 10, 12 years ago

it was really not a factor in State governments the way it is today.

Secretary LEAVITT. I was elected Governor in 1993, and I would

have to check this, but I believe it was in the neighborhood of 6

percent of the State budget. Today, again, I would have to check,

but I am guessing it is like every other State in that it is close to

20 percent. That means every one of those dollars is crowding out

education, it is crowding out higher education, it is crowding out

public response and preparedness, all of the things we are talking

about.

Mr. DAVIS OF VIRGINIA. So in point of fact, putting more money

into this may have the opposite effect?

Secretary LEAVITT. Well, it has had the opposite effect.

Mr. DAVIS OF VIRGINIA. The Homeland Security Presidential Directive 21 requires that the group review financial incentives that

improve preparedness without increasing health care costs. There

are economic reasons that hospitals have not increased emergency

department capacity or the number of inpatient beds. How does the

health system increase capacity without increasing costs?

Secretary LEAVITT. Well, I want to emphasize in this process the

whole concept of an all-perils response. Everything we do to prepare, for example, for a pandemic helps us for a bioterrorism event.

Anything we can do that will use the same assets for multiple

things allows us to expand capacity without expanding costs. The

idea of sharing assets.

The way our surge capacity is designed to work, we know that

there is a scenario for every hospital, no matter how big, no matter

how well funded, no matter how sophisticated, that the capacity

will exceed their ability to deal with that. And therefore every hospital and every community needs to have a surge capacity plan

that allows them to use schools that may, in fact, have been

mothballed. Or I have seen plans where shopping centers are converted into surge capacity. I have actually witnessed during

Katrina convention centers being turned into hospitals, and very

good hospitals, in the context of 24 hours.

So surge capacity is about using existing assets to convert to hospital capacity very quickly. It is not simply using the emergency

room. If you were to look at any emergency room in this country,

you would see that at least half of what is there at any given moment would not be considered absolutely critical. And if we turn

into an emergency, those will be moved away or asked to be deferred, and we will have substantial capacity that would not have

been evident in the snapshot that was taken that the chairman referred to.

Mr. DAVIS OF VIRGINIA. Thank you.

I would like to ask unanimous consent that a Wall Street Journal article, Nonprofit Hospitals Once for the Poor Strike It Rich,

be included in the hearing record.

Chairman WAXMAN. Without objection.

[The information referred to follows:]

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Mr. DAVIS OF VIRGINIA. Thank you.

The majority staff report on the status of emergency departments

looked at 34 hospitals and found that many were operating at or

above capacity. Three hospitals were diverting ambulances, including one hospital that is undergoing a major expansion that includes

the recent purchase of 3 million pounds of travertine imported from

Tivoli, Italy, and 569 flat-panel TVs. Another hospital that, according to the majority report, had patients in overflow spaces and borders has also undergone a significant expansion that included a

new women’s hospital with marble in the lobby, and flat-screen

TVs, and birthing rooms. Both of these hospitals are nonprofits and

it appears that they have sufficient resources to invest in marble

and TVs, but not enough to invest in emergency departments.

Is this typical, and is this appropriate in your view?

Secretary LEAVITT. Well, it is not appropriate, in my mind. I

don’t know how typical it is. I think the point you are making is

a good one, and that is many times the lack of emergency room capacity is because the administration of the hospital has chosen not

to invest there because it didn’t, in fact, assist their business

model.

Mr. DAVIS OF VIRGINIA. And, in fact, raising Medicare reimbursement and diverting that money to pay for marble floors and flatscreen televisions really doesn’t go anywhere to solve this problem,

does it?

Secretary LEAVITT. You made the point earlier that there is no

assuredness or no guarantee that money coming from Medicaid

would go into emergency preparedness, and there is no direct link.

Mr. DAVIS OF VIRGINIA. The question is, if we want to look at

surge capacity, perhaps Medicaid is not the best way to look at

that.

Secretary LEAVITT. Indeed, Mr. Davis, it is not. I want to emphasize I believe that there are deficiencies in our surge capacity. I

just don’t believe Medicaid dollars is the source of funds that ought

to be directed or looked to to link to that solution.

Mr. DAVIS OF VIRGINIA. Thank you.

Secretary Chertoff, thanks for being with us today. Does DHS

have the expertise to determine the appropriateness of any of the

following matters as it relates to Medicaid? Let me go through

them. Whether public providers should be limited to cost in Medicaid reimbursement.

Secretary CHERTOFF. No, we rely on HHS. Frankly, the whole

issue of Medicaid is not actually within our purview. So the short

answer is no, we don’t have the expertise.

Mr. DAVIS OF VIRGINIA. Do you have the expertise to determine

the appropriateness of the definition of unitive government for

health providers that treat Medicaid patients?

Secretary CHERTOFF. No.

Mr. DAVIS OF VIRGINIA. How about the appropriateness of graduate medical education payments in Medicaid?

Secretary CHERTOFF. No.

Mr. DAVIS OF VIRGINIA. How about the scope of rehabilitation

services?

Secretary CHERTOFF. No.

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Mr. DAVIS OF VIRGINIA. How about the appropriateness of the administrative claims for schools?

Secretary CHERTOFF. No.

Mr. DAVIS OF VIRGINIA. The definition of the scope of outpatient

services?

Secretary CHERTOFF. No.

Mr. DAVIS OF VIRGINIA. The definition of the scope of targeted

case management services.

Secretary CHERTOFF. No.

Mr. DAVIS OF VIRGINIA. Thank you.

The National Response Framework encompasses a broad array of

functions and entities.

Secretary CHERTOFF. Correct.

Mr. DAVIS OF VIRGINIA. For example, transportation, communication, roads, utility and public work infrastructure may all be heavily used in an emergency; however, these facilities also have important functions unrelated to disaster response or homeland security.

Therefore it seems imprudent to describe any service that might

have a role in an emergency as a homeland security activity.

How do you determine what functions are primarily related to

homeland disaster compared to those that are tangentially related?

Secretary CHERTOFF. Well, I agree with you. The key philosophy

is what is directly related, and the way we go about that is we put

together a plan. We analyze what are the core capabilities that we

have to have to respond effectively. We then identify and survey

whether there are gaps in those capabilities, and then we determine what is the best way to plug those gaps.

Mr. DAVIS OF VIRGINIA. Thank you.

Mr. Shays.

Mr. SHAYS. Thank you both for being here, and thank you, Mr.

Chairman, for having this hearing.

I am wrestling with the fact that I think we are really dealing

with two issues. We are dealing with the health care issues and the

needs of our hospitals, and we are dealing with a potential catastrophic event and a surge capacity. I would like to know from each

of you who has the responsibility? First, has there been a study

done that looks at the entire United States to say how many Trauma I, Trauma II and Trauma III centers we need and ideally

where they should be located?

Secretary LEAVITT. Mr. Shays, with respect to emergencies, we

are currently doing a study right now under the matter that was

referred to earlier.

Mr. SHAYS. Can you move the mike a little closer?

Secretary LEAVITT. Yes. We are currently doing a study under

HSPD 21, the group that was referred to earlier. However, I can

also tell you that we are asking and requiring grantees of HHS for

pandemic preparedness to give us information about their surge capacity plan. Between those two, we will have a very good idea in

the future as what the capacity is and where our gaps are.

I would also like to make the point——

Mr. SHAYS. When do you think that would be done?

Secretary LEAVITT. We expect it to be done by the end of this

year so that we can make the report before the end—conclusion of

this term.

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But I would like you to know that we already have the capacity

at any given moment to determine where rooms and beds are available anywhere in the country within a reasonably short period of

time. During Katrina I was constantly updated as to how many

beds we had anywhere in a region that we could move patients to.

This is an important part of the way surge capacity works. We are

discussing surge capacity today as to what you can put into an

emergency room at any given hour. That is not the way surge capacity works.

Mr. SHAYS. I want to make sure that my colleague has time. I

would like a brief comment from both of you as to who is ultimately responsible for this issue, because it seems to me like when

two people are, no one is.

Secretary LEAVITT. I think we both agree HHS has responsibility

for any matter related to medical response in a disaster.

Mr. SHAYS. And so it would be your job, not DHS, to determine

how many Trauma I, II and III units we need around the country.

Secretary LEAVITT. Well, it will be our determination to determine how many we have, what our gap is and how best to respond

to that.

Mr. SHAYS. Thank you.

Mr. ISSA. Thank you.

Governor, I will continue along that line. With 259 trauma centers in the country, 5 in San Diego, 4 in Utah, it is very clear that

in San Diego we have as much capacity for our 2 million people in

a relatively small area as Utah has in a huge area. For all practical

purposes, in the case of disasters of any sort, take the Northridge

earthquake, aren’t we essentially always assuming for homeland

security that they are going to be in high-risk areas, where ultimately the people of Utah or Oklahoma or Wyoming could just as

easily have a huge disaster affecting thousands of people over an

area that could not possibly concentrate the types of hospitals that

we have in Los Angeles or San Diego? So ultimately isn’t the planning for major disasters more about the essential planning and

training and ability to move people than it ever will be about having operational extra spaces in one location?

Secretary LEAVITT. Yes. There is no one area of the country capable of handling their own surge in an event of sufficient size to require that kind of capacity.

Chairman WAXMAN. Mr. Davis, your time has expired.

Ms. McCollum.

Ms. MCCOLLUM. Mr. Chairman, the report conducted by the committee highlights serious challenges confronting hospital emergency

rooms, and crowding is a serious problem. The American College of

Emergency Physicians released a report last month that addresses

the crowding issue. The report asks what causes crowding, and it

responds, ‘‘Over the years the reasons for crowding have included

seasonal illnesses, visits by the poor and the uninsured who have

nowhere else to turn except the safety net provided by emergency

departments. This country can continue to expand the capacity of

emergency rooms, to serve as a provider of last resort for the uninsured and the mentally ill, or Congress can work to provide universal health care for all Americans. The choice is ours.’’

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Mr. Chairman, I don’t know about the situation in New York,

Washington, Chicago, Houston, Denver or Los Angeles. I have

never visited an emergency in any of those cities, so I will take this

report’s findings as accurate. But I live in Minnesota, and I need

to set the record straight.

First, the report inaccurately states that Minneapolis is hosting

the 2008 Republican Convention. The convention will take place in

St. Paul, MN, my congressional district, with Minneapolis accommodating many of the visitors. This distinction is important, especially for the St. Paul officials, first responders, health care professionals involved in preparing to meet the needs of 40,000 visitors,

including the President of the United States and Republican nominee for President.

Second, the report examines Hennepin County Medical Center,

which is an excellent hospital and a Level I trauma center located

in Minneapolis. In the event of an emergency at the national Republican convention, Regions Hospital in St. Paul, an excellent facility, will be the primary responder, with the hospital examined in

the report providing support.

What concerns me about this report is it examines Minneapolis

solely as the presence of the national convention, yet it evaluates

emergency room capacity on a random day, March 25, 2008. During

the 4 days in September when the Republicans gather in St. Paul,

there will be significant additional resources available to ensure a

safe, enjoyable convention. There will also be an emergency plan

and considerable assets in place to respond to any foreseen event.

The Department of Homeland Security designated the national

party conventions as a national special security event. This Congress appropriated $50 million to each host city to ensure coordination is seamless between Homeland Security, Secret Service, local

and State law enforcement and their first responders.

Finally, while I fully understand the use of Madrid terrorist attacks as a standard for assessing casualty preparedness, real

American tragedies like the Oklahoma City bombing, Hurricane

Katrina, Virginia Tech shooting could also have been used as models.

In the Twin Cities we don’t need to investigate emergency room

capacity using a telephone survey. Our first responders were forced

to respond to an emergency in real time. Only 9 months ago on August 1, 2007, at 6:05 during rush hour, 8 lanes of traffic on Interstate 35W, the bridge, it collapsed into the Mississippi River. That

night 13 people died, many my constituents. And more than 110

patients required emergency and medical attention. The bridge collapsed due to structural failure. It just as easily could have been

the result of a terrorist attack, but the disaster tested the very hospital in the committee’s report.

Hennepin County Medical Center and hospitals from the entire

Twin Cities metropolitan area responded heroically, professionally

and efficiently. Their response was not a simulation or a blind

phone survey, it was real. And people are alive today because of

that response.

Mr. Chairman, I have statements from Hennepin County Medical

Center, Regions Medical Center, St. Paul’s chief of police, Minnesota Hospital Association, and there are more to come that I will

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submit to the record later. And I would like to have the committee’s permission to enter these into the committee report.

Chairman WAXMAN. Without objection, that will be the order.

[The information referred to follows:]

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Chairman WAXMAN. The gentlelady’s time has expired. We will

be pleased to have the rest of her statement in the record.

[The information referred to follows:]

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Chairman WAXMAN. Mr. Sali.

Mr. SALI. Thank you, Mr. Chairman.

Secretary Chertoff, border security is an important issue affecting Idahoans, and the need for secure travel documents I think

they consider equally as important. Do you have any security concerns specifically with the use of matricula consular cards, passport

cards, NEXUS and Sentry and PASS cards?

Secretary CHERTOFF. First, Mr. Chairman, I guess I do have to

observe when I was invited here, I thought the topic was going to

be medical surge. It is hard for me to see the correlation here, so

I have to ask you whether you want me to answer this. But if you

do, I will go ahead and answer.

Chairman WAXMAN. Well, the rules allow each Member to ask

questions.

Secretary CHERTOFF. On any topic.

Well, the short answer is I think certainly our NEXUS cards and

Sentry cards, our PASS cards which are about to be issued by the

Department of State are secure. They reflect a substantial step forward in improving the security of our documentation. Likewise our

laser border-crossing cards.

The matricula consular is not an American-issued card, so I can’t

warrant or vouch for the security of that. We don’t rely upon that

for purposes of allowing people to come across the border.

Mr. SALI. I think there is a relation here. I hear concerns for

many areas of the country that part of the problem in hospitals is

that they are overrun with illegal aliens in specific places. And part

of the problem in dealing with the problem of illegal aliens is making sure that we have legal ways for people come to our country

that are secure in fact.

Was there a recall on the NEXUS, Sentry or PASS cards during

the last year or two?

Secretary CHERTOFF. Not that I am aware of.

Chairman WAXMAN. Mr. Sali, it is your time to ask questions,

but you are off the topic for which we have invited the Secretaries

to speak, I guess Secretary Chertoff will have to decide whether he

is prepared to respond. But——

Mr. SALI. Well, Mr. Chairman——

Secretary CHERTOFF. I could find out. I didn’t come prepared to

talk about it.

Mr. SALI. Perhaps the Secretary would be willing to respond to

some of these questions in writing——

Secretary CHERTOFF. Sure.

Mr. SALI [continuing]. If I submit them to the committee.

[The information referred to follows:]

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Mr. SALI. And if I may continue, do you share the concern that

the presence of illegal aliens in our country is affecting the ability

of our hospitals to respond in a surge situation?

Secretary CHERTOFF. Well, I don’t know if I would connect it to

a surge, but I would agree that I am aware that the presence of

people who are in this country illegally does strain emergency

rooms on a day-to-day basis, because often these people don’t have

health care through their employers, so they are relying on the

emergency room as a kind of primary care facility. And that is one

of the things we hoped to address when we took up the issue of

comprehensive immigration reform, but as everybody now knows,

that didn’t take off in the Senate. So in the meantime our approach

is to enforce the existing laws as vigorously as possible.

Mr. SALI. Secretary Leavitt, let me ask you the same question.

Do you share that concern about the presence of illegal aliens,

overwhelming at times, on the emergency room and hospital capabilities in our country, and if you do, what is your office doing to

relieve that situation?

Secretary LEAVITT. Again, there is no connection necessarily between surge capacity. But there is little question that many of

those who go to emergency rooms to be treated are here without

proper documentation. Our Department does provide substantial

assistance to hospitals to pay for those, but there is no question

about the fact that it is a big part of the problem.

Mr. SALI. How much does your agency pay for treatment for illegal aliens each year?

Secretary LEAVITT. That is not a number I have off the top of my

head. It is a big number.

Mr. SALI. You will get that for me, though?

Secretary LEAVITT. I would be happy to respond in writing, to the

degree we have that information.

Mr. SALI. I have heard both of you say today that the presence

of illegal aliens is not directly related to the surge, and yet both

of you have said that illegal aliens use emergency rooms as their

primary care doorway, if you will, into the health-care system.

Secretary LEAVITT. This is an important point, and I want to

clarify it. On a day-to-day basis, in an emergency room, there are

many people who are there for what essentially could be a clinic,

not necessarily an emergency. In such a setting, they would be

asked to take their health-care problem or defer it for another time,

and that capacity would be used for the surge. Virtually any emergency room would have somewhere between 30 to 50 percent of its

capacity used in that way.

So when we say that they are overflowing, they are not overflowing necessarily with people who are in life-and-death situations.

Surge capacity would clear those out in the kind of emergency we

are talking about, to be treated in another way or on a different

day.

Chairman WAXMAN. The gentleman’s time has expired.

Mr. Sarbanes.

Mr. SARBANES. Thank you, Mr. Chairman.

On that last point, we had testimony on Monday that suggested

that a relatively small percentage of the ED volume is from nonurgent kinds of care. So I think that is a red herring. We are really

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talking about people coming into emergency rooms that need emergency care.

We had a number of hearings on the effect of these Medicaid regulations. Going back last year, in June, we were told by a panel

of experts that the emergency rooms are at the breaking point and

the ability of emergency department personnel to respond to a public health disaster is in severe peril.

In November, the American College of Emergency Physicians

said that if the regulations we are discussing today went into effect, ‘‘The Nation’s public hospitals and emergency departments

will sustain a devastating fiscal blow from which recovery may be

impossible.’’

And the National Association of Public hospitals—and, by the

way, public hospitals are the ones really getting hit between the

eyes. We had a description of a nonprofit hospital engaged in some

purchases, which I am not sure I would necessarily defend myself,

but let’s not get off on that tangent. We are talking about the impact largely on public hospitals, which are the ones that would suffer the most from implementation of this regulation. The Association of Public Hospitals said, ‘‘These regulations have the potential

to devastate essential safety-net hospitals and health systems in

many parts of the country.’’

So what is it that these experts understand that the two of you

don’t understand about the impact these regulations are going to

have?

Secretary LEAVITT. Mr. Sarbanes, let me describe for you, as a

former Governor, what is happening with respect to public hospitals and where I believe we ought to be turning to remedy this.

It is not unusual at all, in our public hospital setting, we agree

to pay public hospitals an increment more than what we do normal

hospitals. Many States are taking that increment more and essentially taking it off the table, putting it into their general revenues,

and then using that increment more to pay the match that they are

supposed to be paying for Medicaid.

This is essentially a dispute between partners. We are saying to

the States, we want you to put up real dollars, not our dollars recycled, so that you don’t have to put up as much money.

Mr. SARBANES. Let me take that line of thinking and move it

slightly in a different direction.

First of all, I want to challenge a premise that I thought I heard

in your testimony, that perhaps hospitals are not at the center of

any kind of disaster response. And you talk about these other

things, convention centers being set up on a short-term basis or

schools or so forth.

But you both agree that when there is an emergency or a disaster, hospital emergency rooms are where people go, are they not?

I mean, I represented hospitals for 16 years. Any kind of disaster

or occurrence in the community that created pressure, the first

place they come, the first place they come, because they can’t think

of any other place to go, is to the emergency room. True?

Secretary LEAVITT. Mr. Sarbanes, there is no hospital in America

that can keep enough spare capacity warm all the time just in case

we have a major catastrophic event.

Mr. SARBANES. Let me ask you this question.

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Secretary LEAVITT. You can develop a scenario that will blow the

doors off any emergency room in America——

Mr. SARBANES. The doors are already blown off. This is the thing.

There is this notion that we are waiting for these surge situations.

But as a practical matter, we have a surge already. When you look

at the boarding that is going on, the diversions that are going on,

the fact that the beds in the hospitals for inpatient admissions are

completely full, we are talking about a surge happening right now.

Now, let me ask you this question: If a hospital is underfunded,

understaffed and underequipped in its main operations and main

functions, is it better or less prepared for a surge, in your view?

Secretary LEAVITT. This question ought to be directed to those

who administer and invest in the hospital. Most of the

hospitals——

Mr. SARBANES. I am just asking your personal opinion. If a hospital in its core function is underfunded, underequipped and understaffed, is it better or less prepared for an emergency in a surge?

Secretary LEAVITT. Obviously they are less prepared.

Mr. SARBANES. They are less prepared. Well, that is the situation

many of the hospitals are in.

So this fascinating but, I think, largely false distinction between

funding that is going just for a surge as opposed to funding that

is going to what Medicaid core functions should be, it is sort of—

this is a red herring, at best.

And we have to strengthen the underlying core function and

structure and infrastructure of our public hospital system and

other parts of our health-care system if we are going to be able to

respond to this surge.

Thank you.

Chairman WAXMAN. And we shouldn’t be cutting money out of it

if they are already not prepared to deal with the problems.

Mr. Issa, you are recognized.

Mr. ISSA. Well, thank you, Mr. Chairman.

And I certainly think that it has been good to wait a little while

to go today, because I think Mr. Sali’s questions, although they

seemed to start on a tangent, finished pretty cogently.

Secretary Chertoff, the link that you did agree exists between

our inability to either stop illegal immigration or the absence of

their having an alternate insurance plan that would put them into

the normal front-door of hospital and urgent care and other places

rather than emergency rooms and trauma centers is a significant

part of the overcrowding and the underfunding today.

From your side, Homeland Security, you seem to very much

agree that part of the problem you face when looking at surge capacity today is can you get those centers freed up in time of emergency?

So my question to you is, do you feel comfortable that even

though a nonscientific, partisan telephone survey found that, lo

and behold, these seven trauma centers were overcrowded on a

given day, or emergency rooms, that those would be reasonably

free-upable for the kind of catastrophic emergencies we might have

in the case of a dirty bomb or some other terrorist attack?

Secretary CHERTOFF. Well, I agree with Secretary Leavitt. My

understanding—of course, the expertise really resides with his DeVerDate 11-MAY-2000 14:52 Sep 29, 2008 Jkt 000000 PO 00000 Frm 00073 Fmt 6633 Sfmt 6633 C:\DOCS\44180.TXT KATIE PsN: KATIE
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partment, but it certainly makes sense to me. My understanding

is that, in a true emergency, people who are in the emergency room

using it for primary care or for something less than an emergency

would be asked to leave, and many of them would.

I also agree with Secretary Levitt there is probably some point

at which no emergency center, no matter how well-funded, is going

to be able to handle what would be a truly mass event. And that

is why we have these backup systems in place.

There is no question that a catastrophic event is going to be bad.

It is not going to be pleasant. But I think that we would expect the

emergency room to clear out all but the priority cases in order to

handle them.

Mr. ISSA. I certainly agree. And certainly there are doctors who

have been serving in capacities other than urgent care whose experience in surgery and other areas would quickly be brought in posttriage to do it.

Governor Leavitt, you know, the title of this hearing today I

think is significant, because it starts off and it says, ‘‘The Lack of

Hospital Emergency Surge Capacity: Will the Administration’s

Medicare Regulations Make It Worse?’’

Yesterday, or the day before yesterday, I asked the panel—who

all felt that overcrowding was a problem and so on but differed on

whether they could handle emergencies. Virginia said, ‘‘We did

handle emergencies. We believe we are well-organized, even here

in the District,’’ while other areas did not.

One of the interesting things was, I said, ‘‘Here is a billion dollars. How would you spend it? Would you spend it on training and

preparation for an emergency, or how else would you spend it?’’ To

a person, the panel said, ‘‘I would spend it on day-to-day, routine

costs. I would simply absorb a billion dollars.’’

Governor, certainly you have the background to understand that

$1 billion is a lot of money. But the cost of injuries in America

today is estimated to be $300 billion in medical costs. A billion, $2

billion, $3 billion, if it is not used for preparation training, emergency facilities and planning, even $3 billion or $4 billion added

into the system, will it in fact increase surge capacity if it is simply

spent on a daily basis?

Secretary LEAVITT. Our significant concern with moneys that we

give to States is that they are focused on increasing surge capacity.

We have put nearly $7 billion, through different departments other

than Medicaid, into emergency preparedness and specifically into

surge capacity. And I believe that if we were just to send Medicaid

money, it would be absorbed into the hospital overhead.

Mr. ISSA. And, Governor, following up, because the time is limited, essentially aren’t we dealing exactly with that here today?

That if, in fact, we don’t carefully make sure that these funds do

not get diverted and do not cover up for problems, including illegal

immigration, to quote the other Member, but all kinds of problems

of the underinsured, aren’t we, by definition, making ourselves less

capable if we don’t take action to ensure that it goes into planning

and training and preparation, rather than absorbing what clearly

appears to be an everyday problem in America that was neither

created by September 11th nor would be rectified by a few billion

more dollars here or there?

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Secretary LEAVITT. Every community needs a plan, every community needs to train, every community needs to exercise. And that

is what much of our money goes to, and should.

Mr. ISSA. Governor, my time is short, but you did deal with the

problems of illegal immigration. You dealt with the problem of your

emergency rooms and the impact of the underinsured.

Isn’t that a separate issue that we should concentrate on finding

solutions for but not mix it with today’s hearing on surge capacity

directly related to 9/11-type events?

Secretary LEAVITT. We have dealt with three specific and different issues today: surge capacity, the effect of illegal immigration,

and Medicaid regulations. All three are separate. All three are important issues.

Mr. ISSA. Thank you.

Thank you, Mr. Chairman.

Chairman WAXMAN. Secretary Leavitt, could you furnish for the

record how that $7 billion you claimed is going to help the hospitals?

Secretary LEAVITT. What I said, Mr. Chairman, was we have

spent nearly $7 billion on local and emergency preparedness, including surge capacity in hospitals. And, certainly, we can provide

how that has been spent.

Chairman WAXMAN. And how much of that has been surge capacity?

Secretary LEAVITT. That is not a figure I have.

Chairman WAXMAN. If you could give it to us for the record, we

would appreciate it.

We now have Mr. Murphy.

Mr. MURPHY. Thank you very much, Mr. Chairman.

Welcome, Secretary Leavitt and Secretary Chertoff.

For the last 4 years, before I came to Congress, I was the chairman of Connecticut’s Public Health Committee in our legislature

charged with this very issue, making sure that we had appropriate

surge capacity and everyday capacity in our hospitals.

And, Mr. Leavitt, I was reading through your testimony, and it

is dazzling, at some level, the amount of bureaucracy and commissions that we have created around this issue: ACD, NVSB, ECCC,

ASPR, NRF. And I am sure these are worthy commissions; I am

sure they are looking at important questions. But as somebody who

is doing this on the ground floor, this is all new to me.

As a State policymaker, we knew that Medicaid was not just

about supporting people, it was about supporting institutions as

well. They are one and the same. You can’t help people unless you

have institutions that are there and willing to do the work. So the

distinction, I guess, is a little bit troubling to me.

But we also didn’t know too much about these grants that were

coming to us, because we really knew that in order to keep these

hospitals up and running, in order to keep capacity working, we

needed Medicaid. We couldn’t do it with grants alone.

Mr. Leavitt and Mr. Chertoff, if the staff has it ready, I would

like to just draw your attention to a chart. And this, I think, gets

at Chairman Waxman’s question about the amount of money that

is going to hospital preparedness grants. This is, I think, a fair representation of, over the last several years, the amount of money

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that has been going into hospital preparedness grants, starting at

$498 million in 2003, dropping now to a proposed $362 million in

the proposed budget for the coming fiscal year—a pretty sharp decrease. And $362 million over 50 States spreads pretty thin.

The real rub here is when you compare it to the Medicaid cuts,

if we can put that chart up now. Now, this is the grant money that

States are getting, $362 million proposed in the next year, compared to the impact of the Medicaid cuts.

Now, this is the State Medicaid director’s estimates. If you take

the CBO estimates, you are still talking about five times the

amount of Medicaid cuts as you are talking in grant money to hospitals. And I think every State appreciates that grant money, but

it is a drop in the bucket compared to what hospitals are going to

face with regard to these Medicaid cuts.

I guess I ask this to you, Secretary Leavitt. Do you have concerns

that these grants, dwindling year by year, are going to be dwarfed

by the size of these cuts? And though those cuts are going to obviously see their way through the entirety of a hospital’s operation,

no doubt much of it is going to end up in the emergency room.

Do you have a concern that these cuts, these Medicaid cuts—you

say they are to support individuals; they inevitably have to support

institutions in order to support the individuals—are going to dwarf

those grants?

Secretary LEAVITT. Mr. Murphy, the distinction on institutions

and people is not one that we have arbitrarily made. It is in the

statute.

Over time, States have inappropriately claimed Medicaid dollars

in a number of categories, which had the direct impact—I know

you know this as a State legislator—of crowding out all of the other

activities, including the development of public health and emergency systems.

Medicaid was not designed, nor is it intended, to support institutions. Money should be directed to people. We support people. We

support poor people, pregnant mothers and the disabled. This is

not intended to be a hospital entitlement.

Now, I understand that they have come to rely on it, in some

cases. That is precisely the reason that we are pushing back to the

fee-based consultants who are driving this on the basis of their getting a piece of the action to push Medicaid into every area of State

government. It is not just emergency preparedness. It is in schools.

It is in child welfare. It is in all the places that the States are not

adequately funding, they are trying to get a garden hose into the

Medicaid fund.

Mr. MURPHY. But we are not talking about those places today.

We are talking about institutions that are indisputably linked to

health care, which are hospitals.

And the fact is you say it is about supporting individuals, but the

money doesn’t go to individuals. It goes to institutions. It goes to

doctors. It goes to hospitals. It goes to outpatient clinics. Because

we know we need those places up and running.

So let me just shift to a related question, and this is building off

of Mr. Sarbanes’s questions.

You talk about the fact that ultimately this isn’t going to happen

in emergency rooms. If something enormous happens, you are

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going to have to build something outside of the emergency room.

But doesn’t that capacity, whether it exists in the physical confines

of the emergency room or not, rely on the assets that exist right

now in those emergency rooms?

If we are gutting the capacity of hospital emergency delivery systems, in terms of equipment, in terms of personnel, in terms of expertise, it seems to me, Mr. Leavitt and Mr. Chertoff, that this directly impacts your ability to then move that capacity offsite, even

if it isn’t onsite at the hospital grounds.

Secretary LEAVITT. Again, this is a very important point, Mr.

Murphy. We are bringing capacity in. In the first 24 hours of an

emergency, we are dependent upon local assets. And that is where

you clear out the emergency room, you take anyone who is nonessential out of the hospital. You make capacity.

Within 24 hours, we have the NDMS system there. We have as

many as 6,000 beds we can bring from all over the country. We

then go to another phase where we start taking patients into capacity. At any given moment, we know how many hospital beds are

available in the area.

We are not dependent upon the hospital facilities, except for that

24-hour period. And that is why we exercise and train for all of the

other aspects on surge capacity.

Mr. MURPHY. And I appreciate that. I know enough about how

these things work to know that they still do draw upon local resources, they still do draw upon other hospitals, upon other capacity in the system. And, as Mr. Sarbanes and others have suggested

here today, we have maxed out both the emergency and nonemergency capacity of our health-care systems to the point that

extra capacity, even in the 48 and 72-hour window, simply doesn’t

exist.

Now, you can fly it from in from all over the country, but I think

this problem exists across the board. Our medical technicians, our

emergency medical personnel, are working 24/7 just to handle existing capacity right now, never mind being able to move over to

an emergency when it does happen.

My time has expired, Mr. Chairman.

Chairman WAXMAN. Thank you, Mr. Murphy.

Mr. Duncan.

Mr. DUNCAN. Thank you, Mr. Chairman.

Secretary Leavitt, I have to be very quick because they have a

vote going on. But a few days ago, we were given figures that, in

the 10 years leading up to 2006, Medicaid payments to Tennessee

hospitals went up from $245 million to $607 million.

I am sure that you have no idea of what those exact figures are,

but do you think that every State has received similar-type increases, more than doubling over the last 10 years?

Secretary LEAVITT. Well, States have clearly seen dramatic increases. We have seen a dramatic increase in the overall program.

Tennessee may have been somewhat unique because of TennCare.

Mr. DUNCAN. And would it be fair, then, to say that, in those 10

years, inflation has averaged around 3 percent a year, so those payments to hospitals have gone up several times above the rate of inflation? Do you think that is fair?

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Secretary LEAVITT. Medicaid is growing at two to three times inflation.

Mr. DUNCAN. Two to three times the rate of inflation. So payments to the hospitals have gone way up over the past 10 years?

Secretary LEAVITT. The Medicaid money going to hospitals has

dramatically increased over the past decade.

Mr. DUNCAN. All right. Thank you very much.

Chairman WAXMAN. Mr. Tierney.

Mr. TIERNEY. Thank you, Mr. Chairman.

Thank you, gentlemen, for being here today.

Secretary Chertoff, I want to ask you a little bit about your role

or your involvement in these Medicaid rules that were issued. In

your testimony, you said that, ‘‘Medical surge capacity is a critical

element of our local, State and national resiliency.’’

But I don’t see any evidence, I don’t think we have been able to

find any evidence of your Department expressing any concern

about these Medicaid rules to anybody, and particularly with respect to the impact they might have on emergency rooms or the

ability to respond to an attack or a natural disaster.

Did you consult with Secretary Leavitt about these rules before

they were issued?

Secretary CHERTOFF. No, because I don’t think that these Medicaid rules are particularly closely connected to the question of

whether there is surge capacity necessary to meet an emergency.

Mr. TIERNEY. So you were aware of them but just chose not to

get involved, or you weren’t even aware that they were being considered?

Secretary CHERTOFF. I don’t think I was particularly aware of it,

nor would I have expected to be made aware of it.

Mr. TIERNEY. The staff interviewed Dr. Runge from your staff,

your Chief Medical Officer. It is his role, apparently, to coordinate

between the Department of Health and Human Services, to make

sure that hospitals and the medical system are prepared for a disaster or for an incident.

They asked Dr. Runge if he had reviewed or commented on the

regulations, and he also said he had no communications with anyone at HHS about it. And he said that there was no discussion

within the Department of Homeland Security about the rules.

That is pretty consistent with your testimony, as well, on that?

Secretary CHERTOFF. It is.

Mr. TIERNEY. If he supposed to be the point person for medical

preparedness, I just don’t understand how he completely ignores

rules which are certainly going to have some impact? Or is it your

position they are absolutely going to have no impact at all on emergency rooms?

Secretary CHERTOFF. Here is where I think we are having some

disagreement. Everything has impact on everything. So, in some

sense, the economic health of the country has an impact on homeland security. But if I used that logic, I would be involved also in

the subprime mortgage crisis, because that affects State budgets;

I would be involved in gas tax and gasoline prices, because that

has an impact. Even for a Department which has sometimes been

accused of having too broad mandate, that goes several bridges too

far.

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Our focus, with respect to working with HHS, is to assure that

there is a planning effort under way, that we are identifying gaps,

and that we are coming up with specific measures that will plug

the gaps.

And I have to say I agree with Secretary Leavitt; I don’t think

that Medicaid funding and reimbursement rules have anything

more than a very indirect connection with this issue. And if I took

the position that every indirect impact on homeland security made

it my business, we would become the Office of Management and

Budget instead of the Department of Homeland Security.

Mr. TIERNEY. I do think there is a disconnect between what we

are talking about here. I have a difficult time thinking that you

don’t see a more direct relationship between the status of our hospitals’ capacity and emergency rooms’ capacity to deal with these

things than a mortgage. There is a bit of a difference there between

the two, and I would hope you would get that distinction.

Secretary CHERTOFF. No, I don’t say that I don’t think emergency

care and the health-care system isn’t more connected. I think that

Medicaid reimbursement, which is not specifically targeted to putting money away for emergencies, is, I think, several degrees of

separation from the kinds of much more specific issues that we are

focused on, in terms of getting ready for emergencies.

Mr. TIERNEY. But I find it interesting that your Department

didn’t even look at the prospect that reducing Medicaid funding

might have an impact on hospitals’ overall operations, including

the impact on emergency rooms and capacity in case of a surge incident. I would think that is the type of thing that you are assigned

to do and Dr. Runge is assigned to do, to at least raise the issue

and think about it and move on from there.

The staff asked Dr. Runge how he justified this lack of communication with HHS about the rule. What he said was, ‘‘We are focused on threats that can kill hundreds of thousands, not hundreds.’’ A little insensitive, I would think, to——

Secretary CHERTOFF. Well, I wasn’t there for the interview; I

can’t read his mind. But I think what he was trying to draw a distinction between is the very real issue of day-to-day capability of

the medical system to deal with day-to-day kinds of issues, which

is a perfectly important and significant matter but not one that

falls within the purview of my Department, as compared to dealing

with the issues that do rise to the level or do specifically involve

homeland security, like a pandemic flu or a major catastrophe,

where we do focus on the issue of surge.

But our main focus is on those matters that have a direct relationship. Are we stockpiling enough? Do we have a plan? Do we

have a delivery mechanism? Do the localities have a plan? And

there we do interface with HHS, not only Dr. Runge, but I personally talk to Secretary Leavitt about these issues. But much more

tightly related to the specific need to have an emergency preparedness capability than Medicaid funding, which has to do with the

overall economic health of the medical system, which is, frankly, a

much broader issue than my Department’s focus.

Mr. TIERNEY. Well, I guess it could be seen that way, but it could

be narrowed down to when there is a serious, severe cut in financing, it will affect the operations of a hospital, including those that

76

you are directly concerned with. I would like to think your Department gets involved at that capacity. That is not indirect; that is

pretty direct.

My time is up, and I yield back. Thank you.

Chairman WAXMAN. The gentleman’s time has expired.

Ms. Norton.

Ms. NORTON. Thank you, Mr. Chairman.

I want to thank both these witnesses for being here.

I am particularly grateful for this hearing, because I am afraid

I am more deeply implicated than some because of my representation of the District of Columbia. I have worked closely, of course,

in my work on the Homeland Security Committee with Secretary

Chertoff.

Secretary Leavitt, I worked with your predecessor on something

called ER–1. I am particularly concerned about this place, not only

because I represent 600,000 people here, but because all of official

Washington is here, 200,000 Federal workers, and because this is

a prime target for terrorism.

This discussion about trying to separate out Medicaid from other

money is important because we want money used for what it is intended. But you certainly can’t treat a hospital as if it were not an

organism with core functions that treat private and poor patients

alike, as if you could collapse the part that treats Medicaid patients. And I think that is what some of us have been trying to get

at.

I want to ask you about the hospitals here. We have three trauma centers here. Two of them were surveyed in this survey, and

they were extensively above capacity. No available treatment

spaces in the hospital. Only six had intensive care unit beds. One

could not participate in the survey because it was so overcrowded

that it had to stop taking, accepting new patients at all.

My good friends on the other side of this dais cite the Washington Hospital Center emergency room as a model for the country. It

is a very good emergency room. That is what I worked with on socalled ER–1. I will get to that in a minute.

But since they cite the Washington Hospital Center, I went to

the head of the emergency room, Dr. Mark Smith, and Dr. Smith

confirmed the findings of the survey and, in addition, said he had

twice as many patients as he did treatment spaces. They are putting them in the corridors and administrative offices. They are putting them in waiting rooms. And he said he had a major problem

with preparedness.

Now, I understand triage. I also hope we are not ever in the position of what I would believe would be chaotic triage, if everybody

surged in one place. For that reason, here in the Nation’s Capital,

I have been working with the administration—actually we have almost gotten it through several times—on at least one hospital that

would have surge capacity, so that everybody would know in advance, don’t put all these Federal workers close to the nearest hospital. This is the one that is prepared. It has huge capacity—it

would have a huge capacity. A lot of private money would go into

this, some Federal money.

Now, my question is this: If you cut billions of dollars of what

amounts to safety-net funding from hospitals, you are also includVerDate 11-MAY-2000 14:52 Sep 29, 2008 Jkt 000000 PO 00000 Frm 00080 Fmt 6633 Sfmt 6633 C:\DOCS\44180.TXT KATIE PsN: KATIE
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ing these trauma centers here in the Nation’s Capital. Can you assure this committee that, even with such very severe Medicaid

cuts, the hospitals in the Nation’s Capital are prepared for a mass

event here and to accept patients in the event of a mass event

here?

I would further ask Secretary Leavitt if he supports ER–1.

First, I want to know, are you saying to this committee, in the

face of a survey that you are aware of, that in the event of a major

or mass event here, that the hospitals, even with the cuts that are

on the table, could, in fact, manage that event?

Secretary LEAVITT. Ms. Norton, I will tell you that the Washington, DC, area engages in regular planning exercises I think as well

as any place in the country. I want to restate: Am I saying that

surge capacity is acceptable everywhere in the country? No.

Ms. NORTON. I am not asking about that. I am asking about the

place where Members of Congress, the President of the United

States, where members of the Cabinet, where 600,000 residents are

here, where 200,000 workers are here, three traumas centers—I

am being very specific. I am not focusing on elsewhere. I am focusing on target No. 1.

Can you say you are prepared?

Secretary LEAVITT. I am not the person to answer that. The person in my Department would be Rear Admiral Vanderwagen, who

was not invited to the hearing today. And I am sure he would be

happy to meet with you and give you his reaction to the preparedness.

Ms. NORTON. I have to indicate that, as the Secretary, I would

think you would know whether or not the Nation’s Capital is prepared for a mass event.

Secretary LEAVITT. I live here, just like you do, and I am anxious

for that to be the case.

Ms. NORTON. And that troubles me, both as a member of the

Homeland Security Committee and as a member of this committee,

that you cannot answer that question.

Do you support ER–1 surge capacity?

Secretary LEAVITT. Is the project at George Washington?

Ms. NORTON. It is the project at Washington Medical Center.

Secretary LEAVITT. I am aware of the project by title. I do not

know enough about it to respond at this hearing. If you would like,

I would be pleased to respond in writing.

Ms. NORTON. I very much appreciate it.

And thank you, Mr. Chairman.

Chairman WAXMAN. Thank you, Ms. Norton.

Mr. Cummings.

Mr. CUMMINGS. Thank you very much, Mr. Chairman.

Secretary Leavitt, perhaps the thing that most confuses me

about your actions is why you did not consider the impact of your

Medicaid regulations on emergency preparedness.

Last June, the committee had a hearing on the state of emergency medical care in the United States. At the hearing, concerns

were raised about the effect of the Medicaid regulations on hospital

emergency rooms. As a result, the committee wrote to the Centers

for Medicare and Medicaid Services to ask whether CMS, which

issued the rules, had consulted with the Assistant Secretary for

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Preparedness, who is the official in your Department in charge of

emergency response.

Astonishingly and unbelievably, CMS responded that it, ‘‘did not

specifically request input from the Office of the Assistant Secretary

for Preparedness because that office is not likely to have expertise

in Medicaid financing.’’

The committee wrote you again in November. In this letter the

committee specifically requested, ‘‘all documents relating to the potential impact of the Medicaid regulations on emergency care and

trama services.’’ In February, the Department responded to the

committee’s request. I want to read to you from this letter. And it

says, ‘‘The Department has not found responsive documents.’’

According to this letter, your staff searched for responsive documents in five different parts of the Department: the Office of the

Secretary, the Office of the Assistant Secretary for Preparedness,

the Health Resources and Services Administration, the Centers for

Disease Control, and CMS. Yet not one of those offices had done

any analysis of the impact of the regulations on emergency care.

Secretary Leavitt, how can you possibly explain this? Hospitals

across the Nation are telling us that your regulations will devastate their emergency rooms, yet you did not even consider this

issue, according to what I just read.

Secretary LEAVITT. The rule change we are proposing is not

about surge capacity or hospital health. It is about States who have

been claiming inappropriately funds that they are using to recirculate to pay their fair share with Federal funds.

Medicaid is not a program to support hospitals. Medicaid is a

program to support people who are poor, people who are pregnant

and people who are disabled. It was not intended nor is its purpose,

nor should it be managed, to be the source of funds for surge capacity.

Mr. CUMMINGS. Let me just go a little bit further. You were specifically asked to consider the impacts of your rules on trauma centers and emergency rooms. Over a year ago, Chairman Waxman

and over 150 other Members of Congress wrote to you to urge you

to consider these issues.

Let me read to you from our letter: ‘‘We are writing to request

that you withdraw the proposed rule. The proposal would threaten

the capacity of safety-net hospitals to deliver critical but unprofitable services, such as trauma centers, burn units and emergency

departments.’’

Yet, still, you prepared no analysis. This appears to be a case of

willful blindness. Perhaps it would be better stated if I said it appears to be ‘‘eyes wide shut.’’ It seems that you are deliberately ignoring the impacts that your rules will have on emergency care

and preparedness in our Nation. That is irresponsible, and, to be

frank with you, it is quite dangerous.

Secretary Leavitt, the preamble to the proposed Medicaid regulations read, ‘‘With respect to clinical care, we anticipate this rule’s

effect on actual patient services to be minimal. While States may

need to change reimbursement or financing methods, we do not anticipate that the services delivered by governmentally operated providers or private providers will change.’’

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In response to these regulations, your Department received over

400 written comments, all of which expressed opposition to the rule

or to portions of the rule. And I would like to read just a sample

of one of those. It is from the Society of Academic Emergency Medicine.

And it says, ‘‘This proposal will jeopardize the viability of public

and other safety-net hospitals. It will also jeopardize the viability

of our emergency medicine teaching programs, which has longreaching downstream effects on the quality of emergency care in

this country. We believe that Medicaid cuts of this magnitude projected under this proposed rule will adversely affect access and the

viability of our Nation’s safety-net providers.’’

So I am just wondering, do you have a comment on that?

Secretary LEAVITT. Yes, I do. This rule is about States not paying

their fair share, and it is a dispute between partners. We are mutually committed. If States will step up and do their share, we will

ours. But this is about paying for people, not for institutions.

We are following the law. We are trying to push back where people or States and other programs within State governments are

trying to make up for deficiencies that have occurred in State governments by tapping Medicaid funds. And someone needs to do it,

because the Medicaid program is unsustainable in its current

course; I made the point earlier.

Many of the programs in States are being crowded out by Medicaid. And it is being crowded out because we continue to use it for

virtually every aspect of State government. Anyone in State government who thinks they can find some connection to Medicaid is

attempting it. And we have to do this in a way to keep the integrity of the fund, so that we know we are paying for health care for

people, not for institutions, and we are not making up for States

who aren’t doing their share.

Mr. CUMMINGS. I see my time is up.

Chairman WAXMAN. Secretary Leavitt, with all due respect, I

think you are ignoring reality. You are saying that you want to cut

back on a system that is getting Federal dollars inappropriately,

and they should make up the money at the State and local level.

They are not going to be able to make up that money in a recession. The income is not coming into the States.

And you never asked your partners, the States, what the impact

would be to make these kinds of withdrawals of the Federal share

of the Medicaid funds that go to the institutions, especially public

hospitals that are funded exclusive by the taxpayers. At the minimum, I would have thought that you would have wanted to ask the

question of what the impact would be, so you would know.

You insist that is not going to have this kind of impact. Yet,

when you put our rules, the Society for Academic Emergency Medicine said, ‘‘This proposal will jeopardize the viability of public and

other safety-net hospitals. It will jeopardize the viability of our

emergency medicine teaching programs.’’

Parkland Hospital in Texas said they received Medicaid payments of $90 million annually and that, without this funding,

Parkland may be forced to drastically scale back their services in

the Trauma I center, the level Trauma I center.

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You have all these others—the president of the University of

California, the University of California academic medical centers.

You have all these comments. And we looked at the rulemaking

record; the fact is you ignored these comments. You didn’t adjust

the policy in response to these comments in the final rule, and you

did prepare an analysis to the effect of the Medicaid regulations

would be minimal impact on care being provided by the States.

How can that be? Isn’t that irresponsible?

Secretary LEAVITT. Mr. Chairman, it is responsible for me to follow the law and assure that the States are doing their job. Otherwise, we are not being a wise steward of limited Medicaid funds.

This is a dispute between partners, between the Federal Government and the States. And the Federal Government is saying, you

can’t take money we have given you extra for these hospitals, put

them back into your general fund, and then use them to pay your

share. Just give us real money, give us value, give us—for real patients.

This is not about surge capacity. It is about a relationship between the States and the national Government——

Chairman WAXMAN. The consequences will be the institutions

that provide the safety net to the very poor in our society will not

be able to continue to function and provide those services.

It just seems to me you are judging your actions on an ideology

without having established the record. You didn’t come to Congress

and ask for those changes. You are trying to put them into effect

on your own.

Fifty Governors have asked us to at least put a halt on this so

they can be studied, which they should have been studied before

they were put into place. An overwhelming majority of the House

of Representatives has put a hold on these regs until we can look

at them further.

I think that you ought to withdraw these regulations and let’s

see what the impact will be. Let’s know that we are not doing any

harm to the ability for hospitals around the country to deal with

the problems that they may face, not just day to day, but in a terrorist attack.

Secretary LEAVITT. It is not surprising to me that you can unite

50 Governors around the proposition that the Federal Government

should pay their share. And that is essentially what this amounts

to.

Many States have improperly used money that has come from

the Federal Government for the purpose of supporting the hospitals

we are talking about, have taken it off the table, and then used it

to pay their share.

This is about States not paying their fair share. And I would

think we would all be united in saying, if we are going to have a

partnership, then everyone ought to pay real dollars for real value

for real patients.

Chairman WAXMAN. Did you consult with Secretary Chertoff to

tell him that there may be some impact around the country on the

ability to deal with a terrorist attack?

Secretary LEAVITT. This is a dispute between the Federal Government and the States on Medicaid financing.

Chairman WAXMAN. You didn’t inform Secretary Chertoff of that?

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Secretary LEAVITT. We regularly consult on the larger strategic

issues related to our joint mission. This is not one of them.

Chairman WAXMAN. Did you do an evaluation to know what the

impact would be on these hospitals if these regs went into place?

Secretary LEAVITT. Medicaid is not intended to support institutions. It is intended to support people.

Chairman WAXMAN. But it does support these institutions, because people without insurance go to these hospitals. People who

are injured go to these hospitals. If you withdraw the money from

the hospitals because you have a theory that the States ought to

come up with more money, it means, as we were told by Dr. Roger

Lewis, who is an emergency room physician at UCLA, a nationally

recognized expert in hospital emergency preparedness, he said,

‘‘Those of us who work on the front lines of the medical care system

believe it is irrational that an emergency care system that is already overwhelmed by the day-to-day volume of acutely ill patients

would be able to expand its capacity on short notice in response to

a terrorist attack.’’ He said, ‘‘If a bomb went off in Los Angeles and

injured hundreds or thousands, LA would not have the emergency

room capacity to care for the wounded.’’

In your statement to the Congress, you emphasize the support

the Federal Government is giving States and localities to improve

this emergency preparedness. And we asked Dr. Lewis, and he said

they were getting $433,000 in a preparedness grant, and he was

very grateful for it, but the cost of these Medicaid changes would

mean they would go without $50 million. He said that is 100 times

more than the Medicaid cuts they would get on these preparedness

grants, and they are going to be in very, very sad shape.

Do you take what he had to say seriously? Do you think he is

just fronting for the States because they want to rejigger their

money around?

Secretary LEAVITT. Mr. Chairman, over the course of the last 3

years, I have been in virtually every State and met with the emergency community, and the record is replete with my statements of

concern about surge capacity. It is not at the level we want it to

be. We have many areas in which we can improve. But Medicaid

is not the source of funds to do that.

If the Congress of the United States views that there is a need

for more dollars, we have ways in which we can funnel directly to

the hospital funds that are necessary to improve their surge capacity.

Medicaid was intended to be for people, not for institutions. And

every institution I know would like to drag a garden hose over into

the Medicaid fund and be able to tap it, because their fund isn’t

what they would like it to be.

We need to be disciplined. We need to ensure that these disputes

are resolved between the States and the Federal Government so

that we have a true partnership, not just one that relies entirely

on the Federal Government.

Chairman WAXMAN. Well, I must say, with all due respect, your

actions make absolutely no sense. The tiny grants you are giving

to hospitals can’t possibly offset the impact of cutting billions of

dollars from those programs.

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I must say, as we conclude this hearing, I find it very discouraging. We know the Nation’s emergency rooms are already at the

breaking point. We know a terrorist bombing is a predictable surprise. We know that local emergency room capacity is critical to

saving lives in that golden hour following an attack. We know that

public and teaching hospitals operate many of our Nation’s most

critical emergency rooms and trauma centers.

We know that the Medicaid regulations will reduce funding to

these institutions by hundreds of millions of dollars each year. We

know that these cuts will further undermine the ability of these

hospitals to respond to a terrorist bombing. We know that these

regulations will go into effect in 3 short weeks.

And yet the Secretaries that are in the position to avoid this

harm will not take any action. I think it is regrettable.

I must say, this is not just a disagreement. I think it is a substantial breach in what I think is our mutual responsibility to

make sure that we can deal with a homeland security attack,

which could amount to a tragedy.

I thank you both for being here. We hear the bells; there is a

vote on the House floor.

I do want to ask unanimous consent that the record be held open

for Members to ask further questions and get responses in writing.

We stand adjourned.

[Whereupon, at 11:15 a.m., the committee was adjourned.]

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