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MEDICAID AT 50: STRENGTHENING AND 

SUSTAINING THE PROGRAM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JULY 8, 2015 

Serial No. 114–63 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California7 

SUBCOMMITTEE ON HEALTH

JOSEPH R. PITTS, Pennsylvania 

Chairman 

BRETT GUTHRIE, Kentucky 

Vice Chairman 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

CATHY MCMORRIS RODGERS, Washington 

LEONARD LANCE, New Jersey 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

SUSAN W. BROOKS, Indiana 

CHRIS COLLINS, New York 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

GENE GREEN, Texas 

Ranking Member 

ELIOT L. ENGEL, New York 

LOIS CAPPS, California 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

DORIS O. MATSUI, California 

BEN RAY LUJA ́ N, New Mexico 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

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

Prepared statement .......................................................................................... 2 

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

opening statement ................................................................................................ 3 

Prepared statement .......................................................................................... 4 

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

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

Prepared statement .......................................................................................... 7 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, prepared statement ............................................................................. 95 

WITNESSES

Vikki Wachino, Deputy Administrator and Director, Center for Medicaid and 

CHIP Services, Centers for Medicare & Medicaid Services ............................. 8 

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

Answers to submitted questions 1 ................................................................... 139 

Carolyn L. Yocom, Director, Health Care, Government Accountability Office ... 29 

Prepared statement .......................................................................................... 31 

Answers to submitted questions 2 ................................................................... 140 

Katherine M. Iritani, Director, Health Care, Government Accountability Office 3

Answers to submitted questions 2 ................................................................... 140 

Anne L. Schwartz, Ph.D., Executive Director, Medicaid and CHIP Payment 

and Access Commission ....................................................................................... 49 

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

Answers to submitted questions ...................................................................... 145 

SUBMITTED MATERIAL

Chart, ‘‘FY2014 Total Spending $3.5 Trillion,’’ Congressional Budget Office, 

submitted by Mr. Shimkus .................................................................................. 74 

Statement of 3M Company, July 8, 2015, submitted by Mr. Pitts ...................... 96 

Statement of the National Association of Chain Drug Stores, July 8, 2015, 

submitted by Mr. Pitts ......................................................................................... 99 

Letter of July 7, 2015, from Stephen B. Calderwood, President, Infectious 

Disease Society of America, to Mr. Pitts and Mr. Green, submitted by 

Mr. Pitts ................................................................................................................ 103 

Statement of the Office of Inspector General, Department of Health and 

Human Services, July 8, 2015, submitted by Mr. Pitts .................................... 108 

Article, ‘‘Early Medicaid Expansion in Connecticut Stemmed The Growth 

In Hospital Uncompensated Care,’’ by Sayeh Nikpay, et al., Health Affairs, 

July 2015, submitted by Mr. Pallone ................................................................. 116 

Article, ‘‘MetroHealth Care Plus: Effects Of A Prepared Safety Net On Quality Of Care In A Medicaid Expansion Population,’’ by Randall D. Cebul, 

et al., Health Affairs, July 2015, submitted by Mr. Pallone ............................. 127 

1Ms. Wachino’s response to submitted questions for the record has been retained in committee files and also is available at http://docs.house.gov/meetings/IF/IF14/20150708/ 

103717/HHRG-114-IF14-Wstate-WachinoV-20150708-SD002.pdf. 2Ms. Yocom and Ms. Iritani provided a joint response to submitted questions for the record. 

3Ms. Iritani submitted a joint statement for the record with Ms. Yocom but did not submit 

an oral statement. 

(1) 

MEDICAID AT 50: STRENGTHENING AND 

SUSTAINING THE PROGRAM 

WEDNESDAY, JULY 8, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HEALTH, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:14 a.m., in room 

2322 of the Rayburn House Office Building, Hon. Joe Pitts (chairman of the subcommittee) presiding. 

Members present: Representatives Pitts, Guthrie, Barton, 

Whitfield, Shimkus, Murphy, Burgess, Blackburn, Lance, Griffith, 

Bilirakis, Long, Ellmers, Brooks, Collins, Green, Capps, 

Schakowsky, Butterfield, Castor, Sarbanes, Matsui, Luja ́n, 

Schrader, Kennedy, Ca ́ rdenas, and Pallone (ex officio). 

Staff present: Graham Pittman, Legislative Clerk; David Redl, 

Chief Counsel, Communications and Technology; Michelle Rosenberg, GAO Detailee, Health; Krista Rosenthall, Counsel to Chairman Emeritus; Heidi Stirrup, Policy Coordinator, Health; Josh 

Trent, Professional Staff Member, Health; Traci Vitek, Detailee, 

Health; Christine Brennan, Democratic Press Secretary; Jeff Carroll, Democratic Staff Director; Tiffany Guarascio, Democratic Deputy Staff Director and Chief Health Advisor; Una Lee, Democratic 

Chief Oversight Counsel; Rachel Pryor, Democratic Health Policy 

Advisor; and Samantha Satchell, Democratic Policy Analyst. 

Mr. PITTS. Good morning, and welcome to this hearing, entitled 

Medicaid at 50: Strengthening and Sustaining the Program. Subcommittee will come to order. Chairman will recognize himself for 

an opening statement. 

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

At the end of this month, Medicaid will turn 50 years old. It was 

created as a joint Federal/State program to provide healthcare coverage to certain categories of low-income Americans. But today 

Medicaid is now the largest health insurance program in the world. 

Now more than 70 million Americans are covered by Medicaid, 

which is more than are covered by Medicare. No doubt Medicaid is 

a critical lifeline for some of our Nation’s most vulnerable patients. 

Medicaid provides health care for children, pregnant mothers, the 

elderly, the blind, and the disabled. It is safe to say that every 

member of this committee wants to see a strong safety net program 

2 

that protects the most vulnerable, regardless of how they feel about 

its recent expansion. 

But, as we all know, the current trajectory of Medicaid spending 

is problematic. In the next decade, program outlays are set to double. That means that, in a decade, Medicaid is going to cost Federal 

taxpayers what Medicare costs today. And that is not even counting the fact that the Medicaid program is already the fastest growing spending item in most State budgets. So, without Congressional 

intervention, Medicaid will continue to consume a larger and larger 

portion of Federal and State spending. This is not ideology. This is 

arithmetic. According to CBO data, by 2030, the entire Federal 

budget will be consumed with spending on mandatory entitlements 

and service on the debt. 

And this is not only a budgetary problem, though such levels of 

spending would crowd out funding for other important Federal and 

State policy priorities. This is also not only a fiscal problem, though 

CBO has warned that running up our national credit card could 

trigger financial crisis. Perhaps most importantly, this spending 

trajectory threatens the quality and access of care for the millions 

of vulnerable patients who depend on Medicaid. 

But reaching the breaking point is entirely preventable. Policymaking is about setting priorities and making choices, and that is 

why, and many of my colleagues were dismayed by some of what 

we learned at a recent Health Subcommittee hearing regarding 

some of the projects funded through waivers. With budgets growing, is it too radical to suggest we simply prioritize needed medical 

care over lower priority projects? 

Since 2003 Medicaid has been designated a high risk program by 

the GAO because of its size, growth, diversity programs, concerns 

about gaps, and fiscal oversight. More than a decade later, these 

issues are amplified by recent changes to the program. Our aging 

population will also increase demands on the program. But today 

Federal oversight of the program is more imperative than ever. 

Each administration has a responsibility, with Congress, to ensure that taxpayer dollars used for Medicaid are spent in a manner 

that helps our neediest citizens. Thus, I am pleased that we have 

a distinguished panel of witnesses today to help inform us on the 

challenges facing Medicaid in the coming decade. I am especially 

pleased that CMS, who was unable to attend—to join us for our recent hearing is here today, along with GAO and MACPAC. 

In order to preserve and strengthen this vital safety net program 

for the most vulnerable, I believe that Congress will be increasingly 

forced to take steps to modernize the Medicaid program. So we are 

eager to hear our witnesses’ recommendations for ideas, and any 

efforts underway to enhance Medicaid program efficiency, reduce 

program costs, and improve quality. 

[The prepared statement of Mr. Pitts follows:] 

PREPARED STATEMENT OF HON. JOSEPH R. PITTS

At the end of this month, Medicaid will turn 50 years old. It was created as a 

joint Federal/State program to provide healthcare coverage to certain categories of 

low-income Americans. 

But today, Medicaid is now the largest health insurance program in the world. 

Now more than 70 million Americans are covered by Medicaid—which is more than 

are covered by Medicare. 

3 

No doubt, Medicaid is a critical lifeline for some of our Nation’s most vulnerable 

patients. Medicaid provides health care for children, pregnant mothers, the elderly, 

the blind, and the disabled. It is safe to say that every member of this committee 

wants to see a strong safety net program that protects the most vulnerable—regardless of how they feel about its recent expansion. 

But as we all know, the current trajectory of Medicaid spending is problematic. 

In the next decade, program outlays are set to double. That means that in a decade, 

Medicaid is going to cost Federal taxpayers what Medicare costs today—and that’s 

not even counting the fact that the Medicaid program is already the fastest growing 

spending item in most State budgets. 

So, without Congressional intervention, Medicaid will continue to consume a larger and larger portion of Federal and State spending. This is not ideology, this is 

arithmetic. According to CBO data, by 2030, the entire Federal budget will be consumed with spending on mandatory entitlements and service on the debt. 

This is not only a budgetary problem—though such levels of spending would 

crowd out funding for other important Federal and State policy priorities. This is 

also not only a fiscal problem—though CBO has warned that running up our national credit card could trigger another financial crisis. Perhaps most importantly, 

this spending trajectory threatens the quality and access of care for the millions of 

vulnerable patients who depend on Medicaid. 

But reaching the breaking point is entirely preventable. Policy-making is about 

setting priorities and making choices. 

That’s why I and many of my colleagues were dismayed by some of what we 

learned at a recent Health Subcommittee hearing regarding some of the projects 

funded through waivers. With budgets growing, is it too radical to suggest we simply prioritize needed medical care, over lower-priority projects? 

Since 2003, Medicaid has been designated a high-risk program by the GAO because of its size, growth, diversity of programs, and concerns about gaps in fiscal 

oversight. More than a decade later, these issues are amplified by recent changes 

to the program. Our aging population will also increase demands on the program. 

But today, Federal oversight of the program is more imperative than ever. Each 

administration has a responsibility, with Congress, to ensure that taxpayer dollars 

used for Medicaid are spent in a manner that helps our neediest citizens. 

Thus, I am pleased that we have a distinguished panel of witnesses today to help 

inform us on the challenges facing Medicaid in the coming decade. I am especially 

pleased that CMS, who was unable to join us for our recent hearing, is here today, 

along with GAO and MACPAC. 

In order to preserve and strengthen this vital safety net program for the most vulnerable, I believe that Congress will be increasingly forced to take steps to modernize the Medicaid program. So we are eager to hear our witnesses’ recommendations for ideas and any efforts underway to enhance Medicaid program efficiency, 

reduce program costs, and improve quality. 

Mr. PITTS. And, with that, I yield back and recognize the ranking 

member, Mr. Green, 5 minutes for his opening statement. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman, for holding the hearings, 

and I too want to welcome our panel. It is not very often that we 

get an all-female panel. I appreciate you all being here. 

The Medicaid program has served as a critical safety net for the 

American public since its creation in 1965, 50 years ago this 

month. Today, over 70 million low-income Americans rely on Medicaid for comprehensive and affordable health insurance. It is a 

lifeline for millions of children, pregnant women, people with disabilities, seniors, and low-income adults. Medicaid covers more 

than one in three children, pays for nearly half of all births, accounts for more than 40 percent of the Nation’s total costs for longterm care. One in seven Medicare beneficiaries are also Medicaid 

beneficiaries. The Medicaid accounts for a quarter of behavioral 

healthcare services. 

4 

The Affordable Care Act expanded coverage, made improvements 

to promote program integrity, transparency, and advanced delivery 

system reform. Since the enactment of the Affordable Care Act, the 

overall rate of healthcare spending growth has slowed, reducing 

projected growth in Medicaid programs by hundreds of billions of 

dollars, according to the Congressional Budget Office. This is primarily due to lower than expected growth in costs per Medicaid enrollee. 

The need to address the growth of healthcare spending is an 

issue, we all agree. We must remain committed to building on the 

progress made by the ACA in ensuring patients have access to 

quality, affordable care, and that we are getting the best value for 

our healthcare dollars. Medicaid is an extremely efficient program, 

covering the average enrollee at a lower cost than most comprehensive benefits, and significantly lower cost sharing then private insurance. 95 percent of Medicaid beneficiaries report having a regular source of health care, a medical home in today’s terms, which 

they consistently rate as highly as private insurance. 

As we examine ways to further strengthen and improve the program, we need to advance policies that better leverage dollars to 

pay for value, promote efficiency and transparency, and advance 

delivery system reforms, and extend innovative strategies within 

Medicaid, and across the healthcare system. For example, one improvement would be for the Centers of Medicaid and—Medicare 

and Medicaid Services to finalize the agency’s proposed regulation 

that would better enforce the Medicaid’s equal access provision. 

This provision ensures that care and services are available to Medicaid enrollees, and that providers are paid a fair Medicaid reimbursement rate. 

Another one would be the require 12 month continuous enrollment—eligible Medicaid and CHIP beneficiaries to address the 

issue of the churn, a concept that MACPAC has supported in several reports to Congress. Churn is bad for patients, providers, and 

health plans, and wastes taxpayers’ dollars. I worked with my colleague Joe Barton for several Congresses on this legislation—on 

this issue, and I thank him for his leadership, on behalf of low-income Americans. 

Today we look at a broad—look at the Medicaid system, the past, 

present, and future. Throughout its 50 year history, Medicaid has 

served as an adaptable, efficient program that meets the 

healthcare needs of millions of Americans. I want to thank our witnesses again for their ongoing efforts and recommendations for additional ways to advance the program. I look forward to working 

with my colleagues on the committee to strengthen the program in 

key areas, including the enrollment process, delivery system reforms, managed care, data collection, and behavioral health. 

[The prepared statement of Mr. Green follows:] 

PREPARED STATEMENT OF HON. GENE GREEN

Thank you, Mr. Chairman, for holding this hearing. 

The Medicaid program has served as a critical safety net for the American public 

since its creation in 1965, 50 years ago this month. 

Today, over 70 million low-income Americans rely on Medicaid for comprehensive, 

affordable health insurance. 

5 

It is a lifeline for millions of children, pregnant women, people with disabilities, 

seniors, and low-income adults. 

Medicaid covers more than 1 in 3 children, pays for nearly half of all births, and 

accounts for more than 40 percent of the Nation’s total costs for long-term care. 

One in seven Medicare beneficiaries is also a Medicaid beneficiary, and Medicaid 

accounts for a quarter of all behavioral health services. 

The Affordable Care Act expanded coverage, made improvements to promote program integrity and transparency, and advanced delivery system reform. 

Since the enactment of the Affordable Care Act, the overall rate of healthcare 

spending growth has slowed, reducing projected growth in the Medicaid programs 

by hundreds of billions of dollars according to the Congressional Budget Office. 

This is primarily due to lower than expected growth in costs per Medicaid enrollee. 

The need to address the growth of healthcare spending is an issue on which we 

all agree. 

We must remain committed to building on the progress made by the ACA, ensuring patients have access to quality, affordable care, and that we are getting the best 

value for our healthcare dollars. 

Medicaid is an extremely efficient program, covering the average enrollee at a 

lower cost with more comprehensive benefits and significantly lower cost-sharing 

than private insurance. 

Ninety-five percent of Medicaid beneficiaries report having a regular source of 

health care, which they consistently rate as highly as private insurance. 

As we examine ways to further strength and improve the program, we need to 

advance policies that better leverage dollars to pay for value, promote efficacy and 

transparency, advance delivery system reforms, and extend innovative strategies 

within Medicaid and across the healthcare system. 

For example, one improvement would be for the Centers for Medicare and Medicaid Services (CMS) to finalize the agency’s proposed regulation that would better 

enforce the Medicaid’s equal access provision. 

This provision ensures that care and services are available to Medicaid enrollees, 

and that providers are paid a fair Medicaid reimbursement rate. 

Another would be to require 12-month continuous enrollment for eligible Medicaid 

and CHIP beneficiaries to address the issue of ‘‘churn,’’ a concept MACPAC has supported in several reports to Congress. 

Churn is bad for patients, providers, and health plans, and wastes taxpayer dollars. 

I have worked with my colleague, Joe Barton, for several Congresses on legislation on this issue, and I thank him for his leadership on behalf of low-income Americans. Today, we will take a broad look at the Medicaid system: its past, present, and 

future. 

Throughout its 50-year history, Medicaid has served as an adaptable, efficient 

program that meets the healthcare needs of millions of Americans. 

I want to thank our witnesses for their on-going efforts and recommendations for 

additional ways to advance of the program. 

I look forward to working with my colleagues on the committee to strengthen the 

program in key areas, including the enrollment process, delivery system reforms 

and managed care, data collection, and behavioral health. 

Thank you, and I yield the balance of my time to my colleague from California, 

Congresswoman Matsui. 

Mr. GREEN. With that, Mr. Chairman, I would like to yield the 

balance of my time to my colleague from California, Congresswoman Matsui. 

Ms. MATSUI. Thank you very much for yielding to me, and I 

would like to welcome our witnesses here today also. This year, as 

we know, we celebrate the 50th anniversary of both the Medicare 

and Medicaid programs, essential programs for the security of our 

Nation’s seniors, people with disabilities, children, and families. 

The Affordable Care Act took vital steps to reforming our 

healthcare system by increasing coverage and moving toward rewarding value, instead of volume. We know the ACA made improvements in the private insurance market, and it also made improvements for public programs like Medicaid. Now is the time 

6 

that we need to build upon those improvements, and keep the momentum going for our healthcare system, and for the millions that 

rely on Medicaid as an important safety net. 

Thank you, and I look forward to hearing from our witnesses 

today, and I yield time to whoever needs it. 

Mr. GREEN. Anyone else want 40 seconds, or—I yield back. 

Mr. PITTS. The gentleman yields back, and now the Chair recognizes the ranking member of the full committee, Mr. Pallone, 5 

minutes for an opening statement. 

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

Mr. PALLONE. Thank you, Mr. Chairman. I just want to say, obviously, this is a very important topic. Medicaid’s 50 years of efficient, comprehensive, and sometimes life-saving health coverage of 

our most vulnerable populations is certainly something that is crucial. A fiber, you know, basic fabric of our healthcare system. 

As Members of Congress, I believe the Government can help all 

Americans succeed, including seniors and low-income families, and 

improving and strengthening Medicaid for generations to come continues to be a primary goal. Medicaid provides more than one in 

three children with a chance at a healthy start in life, and one in 

seven Medicare seniors are also actually Medicaid seniors. In fact, 

the overwhelming majority of the 71 million current Medicaid beneficiaries are children, the elderly, the disabled, and pregnant 

women. 

We often talk about Medicaid as an entitlement program, though 

I don’t believe this is true—a true reflection of the program. Medicaid is a bedrock safety net that ensures all Americans have protection against the negative economic effects that undisputedly 

come with lack of health coverage. Medicaid’s inherent structure 

was designed to ensure that health coverage will be there for those 

who need it, when times are hard, jobs are lost, or accidents strike. 

And the fundamental tenet of the program is that it can expand 

and contract according to need. In fact, Medicaid was first proposed 

as part of a set of economic policies by President Truman. 

And the Affordable Care Act built on these same goals by 

strengthening Medicaid and expanding its coverage, and States 

that have expanded Medicaid have already realized significant 

qualitative and economic benefits as uncompensated care rates 

drop, and more people gain coverage. Meanwhile, Medicaid coverage lowers financial barriers to healthcare access, increases use 

of preventative care, and improves health outcomes. In addition, 

States have been successful in managing their Medicaid programs 

through broad latitude and flexibility to ensure access to critical 

healthcare services for their populations at low cost. 

No program is perfect. For instance, I believe that we need to remain vigilant on access to specialty and dental care, and we continue to refine transparency and evaluation of Medicaid waivers, 

and ensure that Medicaid is successfully integrated with Medicare 

in the health insurance marketplaces. We should think more about 

how to advance some of the innovations in delivery systems reform. 

7 

The Medicaid program has some of our best successes, with some 

of the toughest to treat populations. 

Mr. Chairman, I hope to hear—to not hear more today of the 

same assaults on the Affordable Care Act or Medicaid. Inaccurate 

and ideological representation of what Medicaid is and who it 

serves I think are outdated. Instead, I believe that there are many 

policy areas in Medicaid where members on both the Democrat and 

Republican sides could share an interest, and I look forward to 

learning about ways that Congress can help to build on an already 

strong Medicaid program, refining and modernizing this critical 

safety net for the next 50 years and beyond. 

[The prepared statement of Mr. Pallone follows:] 

PREPARED STATEMENT OF HON. FRANK PALLONE, JR. 

Thank you, Mr. Chairman, for convening a hearing on this timely and important 

topic—Medicaid’s 50 years of efficient, comprehensive, and sometimes lifesaving, 

health coverage of our most vulnerable populations. As a Member of Congress, I believe that Government can help all Americans succeed, including seniors and lowincome families, and improving and strengthening Medicaid for generations to come 

continues to be a primary goal of mine. 

Medicaid provides more than 1 in 3 children with a chance at a healthy start in 

life. And 1 in 7 Medicare seniors are actually also Medicaid seniors. In fact, the 

overwhelming majority of the 71 million current Medicaid beneficiaries are children, 

the elderly, the disabled and pregnant women. 

We often talk about Medicaid as an entitlement program. Though I don’t believe 

this is a true reflection of the program. Medicaid is a bedrock safety net that ensures all Americans have protection against the negative economic effects that 

undisputedly come with lack of health coverage. Medicaid’s inherent structure was 

designed to ensure that health coverage will be there for those who need it when 

times are hard, jobs are lost, or accident strikes. The fundamental tenet of the program is that it can expand and contract according to need. In fact, Medicaid was 

first proposed as part of a set of economic policies by President Truman. 

And the Affordable Care Act built on those same goals, by strengthening Medicaid 

and expanding its coverage. States that have expanded Medicaid have already realized significant qualitative and economic benefits as uncompensated care rates drop 

and more people gain coverage. Meanwhile, Medicaid coverage lowers financial barriers to healthcare access, increases use of preventative care, and improves health 

outcomes. 

In addition, States have been successful in managing their Medicaid programs 

through broad latitude and flexibility to ensure access to critical healthcare services 

for their own populations at low costs. 

No program is perfect; For instance, I believe that we need to remain vigilant on 

access to specialty and dental care, continue to refine transparency and evaluation 

of Medicaid waivers, and ensure that Medicaid is successfully integrated with Medicare and the health insurance marketplaces. We should think more about how to 

advance some of the innovations in delivery system reform-the Medicaid program 

has some of our best successes, with some of the toughest-to-treat populations. 

Mr. Chairman, I hope to not hear more of the same assaults on the Affordable 

Care Act or Medicaid today. Inaccurate and ideological representations of what Medicaid is and who it serves are tired and outdated. Instead, I believe that there are 

many policy areas in Medicaid where members on both sides could share an interest. I look forward to learning about ways that Congress can help to build on an 

already strong Medicaid program, refining and modernizing this critical safety net 

for the next 50 years and beyond. 

Mr. PALLONE. I would like to yield the 2 minutes—or the remainder of my time to Mr. Luja ́n. 

Mr. LUJA ́ N. Thank you very much, Mr. Chairman and Ranking 

Member Pallone, for scheduling this hearing. And I am glad that 

we are here, coming together to reflect on the success of this program as we celebrate its 50th anniversary. 

8 

Medicaid is a critical program across the Nation, and especially 

in my home State of New Mexico, where we have had a 53 percent 

increase in enrollment since we expanded Medicaid. This represents 240,000 additional people who have gained coverage as a 

result of the Affordable Care Act’s Medicaid expansion in New 

Mexico. Behind each of these statistics are real stories of New 

Mexicans whose lives have improved because of Medicaid. I believe 

deeply in Medicaid’s mission of improving access to health care, 

better health outcomes, greater financial security, and that we 

have a responsibility to ensure that our constituents are not only 

covered, but also receive quality care. 

I look forward to the testimony and discussion about how we can 

continue to enhance this program for the next 50 years and beyond, 

and I also have some very serious specific questions about New 

Mexico’s behavioral health program, and I look forward to exploring those as well. So, Mr. Chairman, Ranking Member Pallone, I 

thank you for the time, and I yield back. 

Mr. PITTS. Chair thanks the gentleman. As usual, all the members’ written opening statements will be made part of the record. 

I have a UC request and would like to submit the following documents for the record: statements from 3M, the National Association 

of Chain Drugstores, the Infectious Disease Society of America, and 

U.S. Department of Health and Human Services Office of Inspector 

General, HHS/OIG. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. PITTS. We have one panel today, and let me introduce them 

in the order of their presentations. First, Vikki Wachino, Deputy 

Administrator, Centers for Medicare and Medicaid Services, CMS, 

and Director of the Center for Medicaid and CHIP services, CMS. 

Then Carolyn Yocom, Director, Health Care, Government Accountability Office, accompanied by Katherine Iritani, Director of Health 

Care, GAO. And finally, Anne Schwartz, Executive Director, Medicaid and CHIP Payment and Access Commission, MACPAC. 

So thank you all for coming. Your written testimony will be made 

part of the record, and you will each be given 5 minutes to summarize your testimony. So, at this point, Ms. Wachino, you are recognized for 5 minutes for your summary. 

STATEMENTS OF VIKKI WACHINO, DEPUTY ADMINISTRATOR 

AND DIRECTOR, CENTER FOR MEDICAID AND CHIP SERVICES, CENTERS FOR MEDICARE & MEDICAID SERVICES; 

CAROLYN L. YOCOM, DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY OFFICE, ACCOMPANIED BY KATHERINE IRITANI, DIRECTOR, HEALTH CARE, GOVERNMENT 

ACCOUNTABILITY OFFICE; AND ANNE SCHWARTZ, PH.D., EXECUTIVE DIRECTOR, MEDICAID AND CHIP PAYMENT AND 

ACCESS COMMISSION 

STATEMENT OF VIKKI WACHINO 

Ms. WACHINO. Chairman Pitts, thank you. Ranking Member 

Green, thank you. Thank you, members of the subcommittee. I am 

happy to be with you here today to talk about the importance of 

the Medicaid program, and its success in meeting the needs of the 

low-income population over the past 50 years. Pleased to be joined 

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here today by my colleagues from MACPAC and GAO, whose work 

helps us to continue to strengthen the program for the future. 

I am Vikki Wachino, and I will introduce myself, building on the 

chairman’s introduction, as Deputy Administrator and Director of 

the Center for Medicaid and CHIP Services. Since it is my first appearance here before the subcommittee, I have served in this role 

since April, and really look forward to working with the subcommittee going forward to make the program as strong as possible. 

As you well know, Medicaid provides health insurance coverage 

to more than 70 million low-income Americans, and the beneficiaries we serve are children, low-income adults, people with disabilities, seniors, and pregnant women, some of America’s most 

vulnerable populations. We work in partnership with States, and, 

as a partnership, both we and States have vital roles as program 

stewards in ensuring the program’s future. Within Medicaid’s 

structure, Medicaid provides vital financial support, and also significant flexibility within program rules that help us and States 

continue to improve and innovate in the program for the future. 

The impact and success of Medicaid coverage is clear from the research. Just last month researchers at the Commonwealth Fund 

found that adults covered by Medicaid coverage continuously for a 

year have very high rates of obtaining regular sources of care. We 

also know, from research released earlier this year, that children 

who are covered by Medicaid or CHIP earn higher wages when 

they grow into adults, and those examples make both the health 

and the economic impact of Medicaid coverage clear. 

There is a lot more we can do, though, and are doing, in our 

work with States to strengthen the program for its next 50 years 

and beyond. As many of you have noted, the Affordable Care Act 

gives States the opportunity to provide Medicaid coverage to lowincome adults in their States, at their option, and supported by a 

substantially enhanced Federal matching rate. 28 States and the 

District of Columbia have worked with us to provide Medicaid coverage to these low-income adults, and the benefits of that expansion are clear. And we are prepared at CMS to work with every 

State to develop an approach to expansion that works for the State, 

meets its specific needs, and meets the needs of its low-income residents as we work together to close the coverage gap and insure 

more low-income Americans. 

The need for modernization in our eligibility enrollment process 

was clear to us several years ago, and we have modernized it. We 

have made it substantially easier for people to apply using a single 

streamlined application, the same application that people applying 

for marketplace coverage use, and we have supported that with 

electronic verification. And as a result, States are able to make eligibility decisions that are fast, and accurate, and in close to real 

time. 

Another major area of our focus is delivery system reform, and 

working with States to promote innovations that achieve better 

health, and better care, at lower cost. We carry that work out 

through a variety of mechanisms. Whether it is major delivery system reform initiatives, like Strong Start that is aimed at improving 

prenatal and maternal health, new authorities, like Health Homes 

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for people with chronic conditions, new models, like the State innovation models that help States undertake multi-payer delivery system reforms, or pioneering delivery system reforms through our 

1115 innovations. In addition to that, a year ago, at the recommendation of the Governors, we launched the Innovation Accelerator Program, which is designed to continue to advance in as 

many States as care to work with us, payment and delivery system 

reform. 

As has been referenced, we have proposed major advances in 

managed care. Medicaid is no longer a fee-for-service delivery system. Managed care is the delivery system that provides care to the 

majority of our beneficiaries, and we want to maximize its potential 

to ensure coordination and quality of care. Our regulations had not 

been updated in more than a decade, and in May we proposed to 

update them to strengthen quality, accountability, transparency, 

the beneficiary experience, and also to align our roles with those 

that work in Medicare Advantage and in the private market, and 

that rule is out for public comment now. 

We have been substantially advancing the ability of fragile seniors and people with disabilities to live in their communities and 

to self-direct their care. And underpinning all of these improvements are a commitment to program integrity that we have advanced over the past 5 years, and that span a range of mechanisms 

from reviewing States’ program integrity programs to ensure that 

they are strong, to ensuring that States, and we, dedicate our resources and coordinate our resources to screen out high risk providers. 

With that I will conclude, and again thank the subcommittee for 

your interest in the Medicaid program, and to state once again how 

much I am looking forward to working with each of you. 

[The prepared statement of Ms. Wachino follows:] 

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Mr. PITTS. The Chair thanks the gentlelady. I now recognize Ms. 

Yocom, 5 minutes for your opening statement. 

STATEMENT OF CAROLYN L. YOCOM 

Ms. YOCOM. Chairman Pitts, Ranking Member Green, and members of the subcommittee, I am pleased to be here today with my 

colleague, Katherine Iritani, to discuss the key issues that are facing the Medicaid program. Today Medicaid is undergoing a period 

of transformative change as enrollment grows following the passage of the Patient Protection and Affordable Care Act. Under this 

Act, more than half of the States have elected to expand their Medicaid programs and cover low-income adults who were not previously eligible for the program. 

At the heart of Medicaid is a Federal/State partnership. Both the 

Federal Government and the States play important roles in ensuring that Medicaid is fiscally responsible and sustainable over time, 

and effective in meeting the needs of its population that it serves. 

We designated Medicaid as a high-risk program in 2003, and our 

statement highlights some of the significant oversight challenges 

that, based on our work, exist today. 

Our statement highlights four key issues: First, access to care; 

second, transparency and oversight; third, program integrity; and 

fourth, Federal financing. Congress and HHS have taken some 

positive steps related to these four key issues, and continued attention is critical to ensure that the Medicaid program is effective for 

the enrollees who rely on it, and also accountable to the taxpayers 

who pay for it. Accordingly, our work recommends additional steps 

to bolster efforts in each of these areas. 

First, maintaining and improving access to care is critical to ensuring that Medicaid operates effectively. Our analysis of national 

survey data suggests that access to care in Medicaid is generally 

comparable to that of individuals with private insurance. However, 

our work also shows that Medicaid enrollees can face particular 

challenges accessing certain types of care, such as mental health 

and dental care. 

Second, increased transparency and improved oversight can help 

improve the Medicaid program. For example, CMS lacks complete 

and reliable data about the sources of funds that States use to finance the non-Federal share of Medicaid, and it also lacks complete 

data on payments to providers, which hinders oversight. Gaps in 

HHS’ criteria, process, and policy for improving State spending on 

demonstration projects also raises added questions about tens of 

billions of dollars in Federal spending. 

Third, improving program integrity can help ensure the most appropriate use of Medicaid funds. Improper payments are a significant cost to Medicaid, totaling an estimated 17.5 billion in fiscal 

year 2014. Our work suggests that an effective Federal/State partnership is a key factor in improper payments and combating them, 

not only to oversee spending in both fee-for-service and managed 

care, but also to set appropriate payment rates for managed care 

organizations, and ensure that only eligible individuals and providers participate in Medicaid. 

Fourth, since its inception, efforts to finance the Medicaid program have been in odds with the cyclical nature of its design and 

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operation, particularly during national economic downturns. We 

suggested that Congress consider enacting a Federal funding formula that would provide automatic, targeted, and timely assistance 

to States during national economic downturns. We have also described revisions to the current Federal funding formula that could 

more equitably allocate Medicaid funds to States by better accounting for each State’s ability to finance the program. 

In conclusion, continued focus on these challenges is critical to 

ensuring that continued access to care for the tens of millions of 

Americans who are in the Medicaid program. It is also critical to 

ensuring the sustainability. Chairman Pitts, Ranking Member 

Green, and members of the subcommittee, this concludes our prepared statement. We would be pleased to respond to any questions 

you might have. 

[The prepared statement of Ms. Yocom follows:] 

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Mr. PITTS. The Chair thanks the gentlelady. And, again, as 

noted, Ms. Yocom’s accompanied by Ms. Iritani, who testified before 

us a couple of weeks ago. She is back to help answer questions for 

GAO. 

The Chair now recognizes Dr. Schwartz, 5 minutes for an opening statement. 

STATEMENT OF ANNE L. SCHWARTZ 

Dr. SCHWARTZ. Good morning, Chairman Pitts, Ranking Member 

Green, and members of the Subcommittee on Health. I am Anne 

Schwartz, Executive Director of MACPAC, the Medicaid and CHIP 

Payment and Access Commission. As you know, MACPAC is a Congressional advisory body charged with analyzing and reviewing 

Medicaid and CHIP policies, and making recommendations to Congress, the Secretary of HHS, and the States on issues affecting 

these programs. Its 17 members, led by Chair Diane Rowland and 

Vice Chair Marsha Gold, are appointed by GAO. The insights I will 

share this morning reflect the consensus views of the Commission 

itself, and we appreciate the opportunity to share MACPAC’s views 

as this committee considers the future of Medicaid. 

As others have already noted, Medicaid is a major and important 

part of the U.S. healthcare system, covering 72 million people, and 

almost half of the Nation’s births. It pays for more than 60 percent 

of national spending on long-term services and supports to frail elders and other people with disabilities, and it accounts for more 

than a quarter of spending on treatment for mental health and 

substance use disorders. In total, it accounts for about 15 percent 

of national health expenditures, 8.6 percent of Federal outlays, and 

15.1 percent of State spending. 

While we often compare Medicaid’s performance as a payer with 

other sources of coverage, it is important to recognize Medicaid’s 

unique roles. In addition to providing health insurance to individuals who otherwise might not have access to coverage, it is also a 

major source of revenue for safety net providers serving both Medicaid beneficiaries and the uninsured. It covers enabling services, 

such as nonemergency transportation and translation services, 

which help beneficiaries access needed health services, and it 

wraps around other sources of coverage, including both employer 

sponsored insurance and Medicare, in its role for 10.7 million dually eligible beneficiaries. 

Since the early 1990s the Medicaid program has changed in significant ways. During this time period the country weathered two 

economic recessions, and States responded to budgetary pressures 

by undertaking modernization efforts and cost containment strategies. As a result, as has been noted, managed care has now become 

the dominant delivery system, with more than half of all beneficiaries enrolled in comprehensive risk-based managed care arrangements, and another 20 percent receiving benefits through a 

more limited managed care arrangement. 

The Olmstead Decision, requiring that people with disabilities be 

served in the least restrictive environment, resulted in a major 

shift in the provision of long-term services and supports from nursing facilities to home and community-based settings. Congressional 

action in the 1990s brought in children’s coverage through MedVerDate Mar 15 2010 10:48 Feb 23, 2016 Jkt 037690 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X63MEDICAID50PARTBREQ022216\114X63MEDICAID50PENDI
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icaid and CHIP, and encouraged States to reach out to people who 

are eligible, but not enrolled in coverage. And, of course, more recently the Affordable Care Act created new dynamics not just by 

allowing States to expand coverage to certain nondisabled adults, 

but also by providing new options to States for the delivery of home 

and community-based services, and by changing eligibility processes to allow for one-stop shopping for individuals seeking 

healthcare coverage. 

The 20 years ahead are likely to be similarly dynamic as States 

experiment with different approaches to delivery system reform 

and payment, and seek to provide care more efficiently and effectively to high cost, high need individuals. Pressure on Federal and 

State budgets create challenges to ensuring the sustainability of 

the program, as well as to ensuring that beneficiaries have access 

to high value services that promote their health and their ability 

to function in their communities. 

MACPAC’s analytic agenda for the year ahead reflects several of 

these challenges. We will extend the work published in our recent 

June report on Medicaid’s role for people with behavioral health 

disorders, focusing on how to improve delivery of care. We will continue to focus on understanding the impact of value-based purchasing initiatives, and the extent to which these bend the cost 

curve and improve health. 

In the area of access, we will be determining how to effectively 

measure access and looking closely at the extent to which different 

groups of Medicaid beneficiaries are at risk of access barriers, and 

the extent to which such barriers can be addressed through Medicaid policy. Our analyses on the impact of the ACA will include, 

at the request of Congress, a study to model the impact of DSH 

payment cuts, and we will also consider how different approaches 

to Medicaid expansion affect expenditures and use of services. At 

the request of members of this committee and others in Congress, 

we will analyze spending trends and evaluate policy options to restructure the program’s financing, and we will be moving ahead to 

the next chapter of our work on children’s coverage, looking ahead 

before CHIP funding expires in fiscal year 2017. 

Finally, we will continue to highlight the importance of having 

timely and complete data for both policy analysis and program accountability. MACPAC has also expressed concerns about administrative capacity constraints that affect the ability of both Federal 

and State administrators to meet program requirements, provide 

oversight, and promote value to beneficiaries, and to the taxpayer. 

Again, thank you for this opportunity to share the Commission’s 

work with the subcommittee, and I am happy to answer any questions. 

[The prepared statement of Ms. Schwartz follows:] 

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Mr. PITTS. The Chair thanks the gentlelady. That concludes the 

opening statements. We will begin questioning, and I will recognize 

myself for 5 minutes for that purpose. 

Ms. Wachino, the part of the Federal statute on the 1115 waivers 

is very short, just four pages. So the Secretary of HHS has tremendous latitude under the law to fund some demonstration projects, 

while denying others. It is well known that some States get CMS 

approval for a specific proposal, while CMS will deny another State 

for a very similar proposal. My first question is, Are there any statutory criteria requiring consistency related to the Secretary’s review and approval of demonstration projects? 

Ms. WACHINO. Chairman, thank you for the question. CMS works 

with all States in the 1115 process, and outside of it, to develop approaches that meet the objectives of the Medicaid program, and 

take into account State-specific needs in surveying and meeting the 

needs of their low-income population. We approach that process 

consistently across States, and we work with each State to identify 

the extent to which their proposal meets the objectives of the program, and improves the health of lower/low-income residents. 

We have been very transparent in our decision-making on 1115s. 

We issued transparency regulations implementing provisions to the 

Affordable Care Act several years ago, and have been posting all 

of our approval documents on medicaid.gov for States to see, and 

we welcome proposals from additional States, and will consider 

them on their merits. 

Mr. PITTS. The question was, are there any statutory criteria requiring consistency? 

Ms. WACHINO. The statutory criterion is that a proposal meet the 

objectives of the Medicaid program. 

Mr. PITTS. Does CMS have regulations or guidance to ensure 

that it is being consistent and equitable? 

Ms. WACHINO. We have guidance implementing our transparency 

requirements. Those were regulations that were implemented in 

2012. We identified, subsequent to the GAO report, broad criteria 

that we used in considering every State’s waiver to determine 

whether it meets the objectives of the Medicaid program, and those 

were criteria like expanding access to coverage, strengthening delivery systems. So, yes, we have developed a set of principles by 

which we review 1115 demonstrations. 

It is also important to us, though, to be able to take into account 

State-specific circumstances. States come to us with a wide array 

of proposals, and if you look across waivers you will see that they 

serve purposes as diverse as expanding eligibility to new populations, to providing limited benefits, like prescription drugs, to reforming State delivery systems. 

Mr. PITTS. Dr. Schwartz, in April several chairmen of the committees of jurisdiction sent you a letter requesting that MACPAC 

undertake serious and sustained analytical work to advise Congress about potential policies and needed financing reforms and incentives to ensure the sustainability of Medicaid. Can you please 

explain to the committee, in specific detail, how you are responding 

to that request, and when you—we can expect to start seeing the 

results of your work? 

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Dr. SCHWARTZ. Yes. Since the Commission received the letter in 

April, we have had one public meeting in May. At that May meeting we presented analyses that were already underway on Federal 

and State spending trends that we are currently turning into a 

publication that should be out later this summer. 

We are now currently determining our next agenda for the next 

report cycle, bringing to fruition work on understanding innovative 

approaches that States are taking to build more sustainable programs. For example, the use of accountable care organization, bundled payments, patient-centered medical homes, managed longterm services and supports, and trying to look at these designs and 

see what the potential is for savings in both the short and the long 

term. 

Specifically to the items mentioned in your letter, we do have 

analyses underway to review the past work of blue ribbon commissions and think tanks so as not to reinvent the wheel, and we will 

use those to inform our analyses of technical and design issues associated with some of those proposals, as well as more recent approaches that have been put forward by members of this committee 

and others. 

So the letter speaks to a sustained work plan, and you can expect 

to see some of this work coming together over the course of the fall 

to inform our March and June reports, and follow-ons after that. 

Mr. PITTS. Thank you. Ms. Wachino, has CMS determined an eligibility error rate for the Obamacare expansion population, and 

how does the error rate vary for those determined Medicaid eligible 

through the Federally facilitated marketplace versus those whom 

States determine eligibility? 

Ms. WACHINO. Mr. Chairman, within CMS there are other parts 

of the organization that have responsibility for the error rate measurement. I can say that I know that we have piloted approaches 

to measuring eligibility errors with States in order to ensure that 

we are measuring eligibility effectively as we move to the new rules 

under the ACA, and we would be happy to get back to you with 

a report out for the record on what we know from those pilots so 

far. 

Mr. PITTS. Thank you. My time is expired. The Chair recognizes 

the ranking member, Mr. Green, 5 minutes for questions. 

Mr. GREEN. Thank you, Mr. Chairman. This year marks the 50th 

anniversary of Medicaid. It is a vital program that is served as a 

lifeline for millions of Americans that—when they need it the most. 

It is important to recognize the successes that it made, innovations 

that are working well, and improvements that could be implemented. We have seen some outstanding success ensuring the overwhelming majority of Medicaid beneficiaries have access to primary 

care. More than 95 percent of the Medicaid beneficiaries not only 

have access to primary care, but are satisfied with that care. 

The committee has made substantial investments in the Community Health Center Program, particularly when it comes to grant 

funding intended to cover the uninsured. One aspect that is not 

talked about as frequently is that of the unique role and intertwined nature of community health centers and Medicaid. 

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Ms. Wachino, could CMS comment on the role that community 

health centers, and—a crucial source of primary care have played 

to bring along—about the level of success of Medicaid beneficiaries? 

Ms. WACHINO. Thank you for the question. Community centers 

play a really vital role in serving our populations and meeting the 

needs of a diverse range of Americans, particularly focused on primary care. Community health centers are playing a growing role 

in meeting low-income Americans’ oral healthcare needs, which are 

important to us, and we continue to work with them to make their 

payment systems as strong as possible. 

Mr. GREEN. OK. Thank you. And I know we still have work to 

do on—to ensure equal access to dental and specialty care. In particular, access to behavioral health providers is an issue this committee has considered, and all three of our witnesses know well. 

Ms. Wachino, CMS is working hard with States to promote innovative care delivery, integrating physical and mental health, or 

promoting oral health, as part of the comprehensive primary care. 

Can you provide the committee with a few examples of how CMS 

work on Medicaid delivery system reform is helping to promote access to these specialty providers? 

Ms. WACHINO. Sure, I would be happy to, thank you. Through 

our Innovation Accelerator Program, which, as I mentioned earlier, 

is our new delivery system reform initiative aimed at providing 

program support to States that would like to improve their payment and delivery system, we identified four areas that were established with the input of States and stakeholders that were priorities of our program, substance use disorder, physical and behavioral health integration, community integration, moving away from 

institutional care to community care, and meeting the needs of 

complex, high cost beneficiaries. 

The first two I think, Ranking Member Green, are responsive to 

your question. And the area in which we have done the most work 

so far in this new program is substance use disorder, and we are 

working actively right now with seven States to help expand the 

range of providers who can provide substance use disorder supports, and we expect to bring a similar approach to physical and 

behavioral health to really help ensure that there is access to community-based mental health services for the people who need it. 

Mr. GREEN. OK. I was impressed to see provisions on adequate— 

or quality and actuarial soundness and network adequacy in the 

new Medicaid managed care regulation. Can you describe how, if 

CMS’ proposed managed care regulation would be implemented, access to quality care would improve beneficiaries in the managed 

care? 

Ms. WACHINO. Sure. I will highlight a couple of examples of how 

our new proposed rule could improve quality and actuarial soundness and access for our populations. With regard to quality, there 

are a number of provisions. I think one of the most significant is 

giving Medicaid beneficiaries the ability to understand how quality 

compares across plans through a new quality rating system, so that 

beneficiaries can shop, and they can form choices about their plan 

selections. 

As you referred to, Ranking Member Green, we also substantially 

have improved our approach to ensuring that plan rates are actuVerDate Mar 15 2010 10:48 Feb 23, 2016 Jkt 037690 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X63MEDICAID50PARTBREQ022216\114X63MEDICAID50PENDI
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arially sound. There is a body of work reviewing those rates that 

is going on now, even in advance of the regulation, to really make 

sure that we are paying the right amount to ensure adequate access to Medicaid beneficiaries, and ensuring appropriate stewardship of funds. 

And with respect particularly to access, the proposed rule establishes for the first time—or proposes to establish that there will be 

State-developed network adequacy standards for many key services 

for the Medicaid population, which, given that, as recently as 3 

years ago, nearly 60 percent of our beneficiaries were enrolled in 

managed care, I think is a really substantial advance in access for 

our program. 

Mr. GREEN. OK. Mr. Chairman, I have one last question for Ms. 

Schwartz. Has MACPAC looked at how changes to streamline eligibility have improved the continuity of care? 

Dr. SCHWARTZ. We have not specifically analyzed that issue. It 

is one we are very interested in, and the data are not yet available 

for us to do so. And as data become available, that is something 

that we will be keeping our eye on. 

Mr. PITTS. The Chair thanks the gentleman. I recognize the chair 

emeritus of the full committee, Mr. Barton, 5 minutes for questions. 

Mr. BARTON. Thank you, Mr. Chairman, and thank you for the 

hearing. These microphones kind of have an echo to them. I will 

be as softly as I can. 

Ms. Wachino, could you give us the status of the Texas request 

for re-approval of its 1115 waiver? 

Ms. WACHINO. Yes, I can. The Texas waiver expires next year. 

I know that the State has been working on a request to extend that 

demonstration, which we approved in 2011, but they have not sent 

it to us yet. We have had some initial conversations with them, but 

are waiting for them to submit their full request, and look forward 

to working with them on it. 

Mr. BARTON. So there have been some rumors that because 

Texas is such a red State that that application is going to be 

frowned upon. That is just rumors? There is no validity to that? 

Ms. WACHINO. Congressman Barton, we work with all States 

through the waiver process to try to achieve the objectives of the 

Medicaid program and try to take into account State-specific needs, 

and we are looking forward to reviewing with the State of Texas 

how the initial demonstration went. There were some areas of their 

programs that were new to us when we initially approved it. We 

will want to review very closely with them how the different provisions of the waiver are working. And we are looking forward to 

that discussion. 

Mr. BARTON. With Mr. Green here, my ally, make sure we are 

bipartisan, you will—— 

Mr. GREEN. Would you yield to me just for a minute? 

Mr. BARTON. I will be happy to yield. 

Mr. GREEN. Even though we are a red State, we sure have a lot 

of poor people, and Medicaid is for that, whether you are red or 

blue, or—— 

Mr. BARTON. That is true. 

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Mr. GREEN [continuing]. Whatever. Thank you, Joe, for your 

leadership on what we are trying to do. 

Mr. BARTON. Of course, those of us that are red, in that sense, 

you know, if they would listen to us more, we would have less of 

those people. See, we would get them into where they didn’t need 

to be a part of it, but that is a different discussion. 

So we have your word that the Texas 1115 waiver application is 

going to be fairly reviewed? 

Ms. WACHINO. Again, we work with all States, you know, and we 

apply the same process to all States. We look to review the extent 

to which a waiver achieves the objectives of the Medicaid program 

and how it is advancing the health of the low-income population in 

the State. And I—— 

Mr. BARTON. So that is a yes? 

Ms. WACHINO. I know that the team in Texas is working hard, 

and we are looking forward to working with them. 

Mr. BARTON. OK. I am going to take that as a yes. We are going 

to put it in the record as a yes, that it is going to be fairly reviewed. 

Let us look at a program, Ms.—that Ms. Castor and I are very 

supportive of, the Ace Kids Act. It would allow States to set up programs across State lines for special needs children, create a medical home in these anchor children’s hospitals, where a parent 

could bring a child, and if the child qualifies, they get the full 

range of services, whatever those services need to be. This is a bipartisan bill. We have got—I can’t remember how many co-sponsors, but it is well over 100. Are you familiar with that bill? 

Ms. WACHINO. Congressman Barton, I can’t say that I have 

looked at the particulars of that bill, but clearly approaches that 

advance the quality of care and coordination of care for children 

particularly are of interest to us, so I am happy to take a look at 

it, and CMS stands ready to provide any technical assistance to 

you on it. 

Mr. BARTON. Well, the advocates of it, and I am an advocate for 

it, believe that it would save money for Medicaid. You wouldn’t 

have to have a parent try to create their own network, and in some 

States you don’t even have the type of care that that child needs. 

So it has got a lot of support, and I would encourage you and your 

staff to take a look at it, and hopefully, at the appropriate time, 

be supportive of it. And with that, Mr. Chairman, I yield back. 

Mr. PITTS. The Chair thanks the gentleman. I now recognize the 

gentlelady from California, Mrs. Capps, 5 minutes for questions. 

Mrs. CAPPS. Thank you, Mr. Chairman, and I appreciate the 

presence of our witnesses today, and your testimony. It is very appropriate that we are here during this anniversary year to talk 

about the largest source of health coverage in our country, Medicaid, and the Children’s Health Insurance Program, CHIP. These 

programs now provide health care—or opportunities for health for 

over 70 million Americans, and I am happy that our committee was 

able to ensure that CHIP is re-authorized for 2 more years, and I 

hope that we continue to actively support and ensure the continuation of something I have known, as a school nurse, as an incredibly successful program. 

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As a committee, we have a responsibility to make our best faith 

effort to build upon the success of these programs. First, it is important to recognize how far the Medicaid program has come in the 

last 50 years. It is remarkable. Perhaps most notably, in the past 

few years, the program has been very much strengthened through 

the provisions in the Affordable Care Act based on the needs of our 

communities. 

Medicaid is a safety net, of course, for these people who are otherwise shut out of private insurance, either because it is 

unaffordable, or is unavailable to them. And thanks to Medicaid expansion in the States where they have access to it, the program 

could be there for any of us, including here, in this room, who fall 

down on our luck and needed support. 

Most people in the coverage gap are working. They are working 

poor, employed either part time or full time, but still living below 

the property line. While the promise of coverage is there, unfortunately, nearly four million hard-working low-income Americans 

cannot receive the health coverage they need because they live in 

States that have chosen not to expand Medicaid, despite the economic benefits that are now demonstrated, well demonstrated, of 

doing so. However, for those who do have Medicaid coverage, there 

have been substantial changes to the delivery of Medicaid that aim 

to increase access, and also quality of care. I am particularly proud 

of all the progress in my home State of California made in the 

areas of patient-centered medical homes and care coordination. 

This has been discussed by you already in a response to a question, but can you talk about, Ms. Wachino, some of the other new 

and innovative delivery system reforms that you have seen States 

starting to take up, and have been working with States to make 

sure it happens? 

Ms. WACHINO. Sure, I am happy to, thank you. We have a variety of really promising work underway with States to strengthen 

their delivery systems. And, as I said briefly in my oral testimony, 

there are many different modalities. 

Mrs. CAPPS. Um-hum. 

Ms. WACHINO. Some States, you know, use existing State plan 

authority. States like Arkansas are taking up shared savings for 

their providers, building off of a Medicare model. Missouri is using 

our new health homes option, created under the Affordable Care 

Act, to really move forward with improvements for people with 

chronic diseases. And in Missouri we have seen reductions in the 

use of hospital care, and improvements in key measures, like measures of diabetes care, which are very, very promising. 

There are other States who have taken even more far-reaching 

approaches. Oregon, under 1115 authority several years ago, 

launched coordinated care organizations, which were designed to be 

community rooted approaches to coordinating the entire spectrum 

of care for Medicaid beneficiaries and piloting new approaches, like 

using community health workers. Other States have created delivery system reform incentive payments to really propel movement 

forward on key payment goals. We approved New York last year 

for a new 1115 waiver, and New York is committed to very concrete 

and measurable objectives for increasing the number of their providers who are using value-based payments. 

66 

Mrs. CAPPS. Thank you. 

Ms. WACHINO. So I think we are changing the landscape of Medicaid care delivery in a number of ways. 

Mrs. CAPPS. I don’t mean to cut you off, but I think you could 

go on and on, and maybe you would like—— 

Ms. WACHINO. I am afraid I can, so I thank you for the stop. 

Mrs. CAPPS. You could submit any other examples you would like 

for the record, because, as we have discussed in this community 2 

weeks ago, we have seen over 300 State flexibility waivers to create 

State solutions within the Medicaid framework. And that—this is 

an exciting time to see those come forward. There is substantial 

State flexibility. I think it is important to recognize this innovation 

and flexibility, what it looks like. Before considering any changes 

to our program, we must be mindful about what exactly—who will 

be impacted by the decisions that we might make, and if we are 

truly improving care, or just passing the buck to States. 

So we want to be working with you—with the different States 

with respect to persons with disabilities, seniors, and struggling 

families. Right now we know that the Medicaid program works. Individuals with Medicaid are more likely to receive preventative 

health care, which is cost savings, and less likely to have medical 

debt than their underinsured counterparts. 

Dr. Schwartz—I will have to save that question for another 

panel—another round. Thank you. 

Mr. PITTS. Or you can submit it in writing. Thank you. The 

Chair thanks the gentlelady. I now recognize the vice chair of the 

subcommittee, Mr. Guthrie, 5 minutes for questions. 

Mr. GUTHRIE. Hey, thank you. Thank you all for coming this 

morning. And, first, to either Ms. Yocom or Ms. Iritani, I hope I 

said that correctly, in your testimony you noted that CMS lacked 

complete and reliable data about the sources of funding States used 

to finance the non-Federal share of Medicaid, which can shift costs 

to the Federal Government. What information have you recommended that CMS collect, and how will having this information 

help CMS monitor the program to ensure the appropriate use of 

Federal funds? 

Ms. IRITANI. Yes, we have made recommendations that CMS develop a data collection strategy regarding sources of funds that 

States use for financing the non-Federal share. We have recently 

surveyed States about how they are financing the non-Federal 

share, and identified that States are relying more heavily on providers, such as through provider taxes, and local governments, 

through intergovernmental transfers, for example. 

Provider taxes, I think, doubled during the course of the 2008 to 

2012 time period that we looked at, and these can shift costs to the 

Federal Government and to providers. We think it is important 

that CMS have data needed for oversight. 

Mr. GUTHRIE. OK, thank you. And, Ms. Wachino, I have introduced a bill H.R. 1362, which would require States to report how 

they finance. I know you share that we need more transparency in 

the way States report how they finance Medicaid. And what actions 

has CMS taken in response to the GAO recommendations? 

Ms. WACHINO. Mr. Guthrie, thank you for the question, and for 

your interest in transparency and accountability. I think GAO’s 

67 

work in this area has been very helpful, and we are making improvements, and continue to make more. We are looking much 

more closely at the sources, and reviewing more closely the sources 

of the non-Federal share. We are working on getting additional levels of data for a variety of different kinds of payments, and we are 

conducting more active oversight. We have also issued several 

forms of guidance to States, making sure that our rules are clear 

with respect to provider taxes and donations. So I think we are 

strong in this area, and continue to get stronger. 

Mr. GUTHRIE. Yes, and I used to be in State Government, before 

I got here on the Budget Committee, in Kentucky, which has a substantial Medicaid population. Actually one out of four now are on 

Medicaid, and so I understand that States are being creative because of the budget pressures they are facing, so that is something 

we all need to work together to move forward. 

And, Ms. Wachino, in your written statement you described numerous CMS initiatives aimed at innovation in achieving better 

health outcomes at a lower cost. And how is CMS assessing these— 

or evaluating these initiatives to determine if they are meeting 

goals? 

Ms. WACHINO. A lot of these delivery system reforms are very 

important to us, and we want to know how they work for ourselves, 

as stewards of taxpayer dollars, and also to inform developments 

in other States. We are evaluating many of the delivery system reform improvements that we undertook with States through our 

1115 waivers. Right now that is very important to us. MACPAC’s 

also done some very helpful work in this area. And we also will be 

evaluating the effectiveness and results of the work we are doing 

through our Innovation Accelerator Program in areas like substance use disorder, promoting community integration, improving 

physical and behavioral health, and meeting the needs of complex, 

high cost populations. And, again, all of that is designed to help us, 

and to help States be smarter and better purchasers of care. 

Mr. GUTHRIE. Well, good. Is there some timeframe when some of 

the original—or early evaluations will come forward? 

Ms. WACHINO. You know, I can get back to you on that question 

for the record. 

Mr. GUTHRIE. All right, thanks. And then one more. I understand 

that OIG has found significant and persistent compliance, payment, and fraud vulnerabilities related to the provision of personal 

care services in Medicaid, and—including payments for services not 

rendered. Has CMS taken action to address the OIG recommendations to improve integrity in personal care services? 

Ms. WACHINO. Yes. Thank you for the question, and for the work 

that IG and GAO have done looking at our personal care services. 

We have taken steps to ensure the integrity of personal care services. We recently engaged a contractor to look at data and provider 

compliance—— 

Mr. GUTHRIE. Um-hum. 

Ms. WACHINO [continuing]. In that area. We issued a quality informational bulletin with respect to personal care services in our 

1915(c), which, apologies for the jargon, are home and communitybased services waivers. And also, as I think staff of this committee 

knows, we have made a very substantial effort in data systems 

68 

modernization. We call it our TMSIS System, and that is going to 

provide us a level of programmatic data that we are very eager for, 

and will help our program integrity, program management, ability 

to evaluate States in a number of areas, including for personal care 

services. 

Mr. GUTHRIE. Thank you, my time has expired. I appreciate your 

answers. Appreciate your answers. 

Mr. PITTS. The Chair thanks the gentleman. I now recognize the 

gentlelady from Florida, Ms. Castor, 5 minutes for questions. 

Ms. CASTOR. Well, thank you, Mr. Chairman, and thank you to 

all of our witnesses for being here today to discuss Medicare on its 

50th anniversary. You know, the passage of Medicare and Medicaid 

50 years ago, through amendments to the Social Security Act, really are something to celebrate. They are landmark safety net laws 

in this country that really demonstrate our values. In Medicare, 

you work hard all of your life, and you retire, you are not going 

to fall into poverty because of a health condition. The same with 

Medicaid. Under Medicaid, we are not going to allow children 

across America, no matter what station they are born in in life, to 

suffer the consequences of a debilitating disability, or just being 

able to see a doctor. 

So we have something to celebrate here. And then when you add 

on the impact of the Affordable Care Act, feels like we are kind of 

out of the woods, and now we can begin to work on bipartisan solutions to improve it together. I think the future is bright so—this 

is also an important time for Medicaid, because at this point in 

time we are dealing with Medicaid expansion and delivery system 

reform, and that will help improve the lives of so many of our 

neighbors all across the country. So I look forward to hearing your 

thoughts on these transformations. 

I want to especially thank Ms. Wachino for her extensive work 

with the State of Florida over the past few months, few years. We 

had a very contentious legislative session, where we had Republican State Senators, and the business community, hospitals, clamoring for a coverage model in Medicaid expansion. We had a Governor who flip-flopped. He was for Medicaid expansion when he ran 

for re-election, then he changed after the election. He devised a 

budget with certain low-income pool monies that were—he was on 

notice that—just weren’t going to happen, and you came through 

it very well. We still have challenges in Florida. I hope we can 

move to Medicaid expansion. But you stayed true to the values and 

the intent of the Medicaid program, so thank you very much. 

I would like to ask about the agency’s proposed rule for Medicaid 

managed care organizations that were issued earlier this year. 

Given the growing number of Medicaid beneficiaries who receive 

care through managed care arrangements, it is crucial that we 

strengthen Federal oversight of these programs to ensure that Federal dollars are being spent wisely. This has my attention especially because a Federal Court Judge in Florida found that Florida’s Medicaid program was in violation of Federal law because of 

low reimbursement rates, failure to provide prompt service and 

adequate service, failure to provide outreach services as required 

by the law. Then you had a Supreme Court Decision involving the 

State of Idaho that said that you can’t—private providers cannot 

69 

challenge low reimbursement rates. So that puts the impetus on 

HHS to follow through with oversight. 

Ms. Yocom, GAO has issued a number of recommendations to 

CMS to improve Federal oversight of the managed care rate setting 

process, is that correct? And why does this feel—why does GAO 

feel that this is necessary? 

Ms. YOCOM. Well, it goes back in part to transparency issues, understanding where the money is going and for what purposes. We 

also did do work just recently that spoke to the fact that neither 

the Federal Government nor the States in our sample were actually conducting audits of Medicaid managed care organizations, 

and we recommended that that be changed, that CMS require 

States to conduct audits both to and by managed care organizations. 

Ms. CASTOR. And Ms. Wachino, do you agree? 

Ms. WACHINO. I think GAO’s concerns helped us really inform 

some of our thinking about our proposed rule. Ensuring accountability in managed care is vitally important to us because it is 

where most of our beneficiaries get their care. Medicaid is no 

longer a fee-for-service program, and managed care has great potential to offer care coordination and meet the needs of low-income 

Americans, but we really want it to be as strong as possible. 

So, to Ms. Yocom’s point, part of the proposed rule does include 

greater auditing by Medicaid managed care plans. We have also 

proposed new rules with respect to provider enrollment to ensure 

that providers go through the same screening process when they 

enroll in a Medicaid managed care plan that they do in a fee-forservice program. And we are making substantial advances in the 

soundness of the rates that States pay plans. 

Ms. CASTOR. Yes. For example, the Federal—I will—I am going 

to submit these further questions into writing, Mr. Chairman, and 

I would also like to thank Chairman Emeritus Barton for raising 

the issue of the Ace Kids Act, and we will look forward to working 

with CMS on a medical home for children with complex conditions. 

Thank you very much. I—— 

Mr. PITTS. The Chair thanks the gentlelady, and now recognizes 

the gentleman from Kentucky, Mr. Whitfield, 5 minutes for questions. 

Mr. WHITFIELD. Thank you very much, and thank the four of you 

for joining us today, and we appreciate your responsibilities and involvement in the healthcare delivery system in America. As you 

know, or maybe you don’t know, there are about 67 different programs in the Federal Government relating to climate change. And 

whenever—EPA has been particularly active in that area, and on 

their regulations they talk about some of the primary benefits relate to health care. Asthma conditions, premature deaths, whatever. And we know that Medicare, 500 billion a year, Medicaid, 330 

billion a year, community health centers, around 5 billion a year, 

I don’t know what the cost of Tricare is, but it is primarily about 

access to health care, which is vitally important. 

But one area that I have been reading more and more about recently that disturbs me a great deal relates to antibiotic resistant 

bacteria. And it is turning out that it is a more significant issue 

not only nationally, but internationally. And I read an article reVerDate Mar 15 2010 10:48 Feb 23, 2016 Jkt 037690 PO 00000 Frm 00073 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X63MEDICAID50PARTBREQ022216\114X63MEDICAID50PENDI
70 

cently that last year alone in America there were 37,000 deaths relating to infections that could not be treated by antibiotics. And 

some of the experts are saying that that figure is much lower than 

reality because the identification system is not sophisticated 

enough to determine when someone has died because of the bacteria being resistant to antibiotics. 

And I have been told that 44—that hospitals in 44 States have 

had outbreaks of bacteria resistant to antibiotics. Even NIH, our 

premier research and development institute, has had deaths because of this issue. And I would like to know—you all are involved 

in the very core of CMS, and HHS, and CDC. Are you aware of 

some specific programs that are trying to address this problem that 

faces the American people today? 

Ms. WACHINO. Congressman Whitfield, thanks for raising the 

concerns. I think that HHS shares your concern about making sure 

that people remain healthy. I would like to go back and consult 

with my colleagues, particularly in CDC, and get back to you for 

the record about what they are doing, because I think when it 

comes to things like surveillance, that is really a primary responsibility of theirs, with Medicaid coverage supporting people, when 

they unexpectedly fall ill, to make sure they get the services—— 

Mr. WHITFIELD. But you—well, I appreciate that, because I tell 

you, I do get upset about it, because we see a plethora of executive 

orders and regulations relating to asthma, and other things like 

that, but I am not aware of one executive order or regulation to address this issue, and this is an issue that can really destroy a lot 

of people in this country and around the world. And the experts 

that I have heard from, the hospitals that I have talked to, and 

others, say that this is an epidemic that can be quite serious not 

only for America, but for the world. 

Ms. WACHINO. Thank you for the concern. I am happy to go back 

and consult with our experts and circle back with you to provide 

you more information with how we are approaching it. 

Mr. PITTS. The Chair thanks the gentleman, now recognize the 

gentlelady from California, Ms. Matsui, 5 minutes for questions. 

Ms. MATSUI. Thank you, Mr. Chairman. As we know, California 

is the forefront of innovation of many areas, not the least of which 

is health care. California was an early implementer of Medicaid expansion, and the first State to implement the delivery system reform incentive payment. As we know, Medicaid is a State/Federal 

partnership, and the ability for the State to implement pieces of 

the program as it sees fit within Federal guidelines is essential to 

its success. Of course, the main way that States are able to exercise 

this flexibility is through the waiver process. 

Now, just 2 weeks ago California was the first State to be approved for a 5-year renewal of a different waiver, for specialty mental health services. Previously these types of waivers were only allowed to be renewed in 2-year intervals, but the ACA changed that 

to allow for 5-year renewals. This is a huge step forward for the 

nearly one in six California adults, and one in 13 California children with mental health needs. 

I am also so pleased that California is also moving forward to 

apply for new community behavioral health funding in the Medicaid program, which will be available in the form of demonstration 

71 

projects based on the Excellence in Mental Health Act that I coauthored with my colleague on this committee, Representative 

Leonard Lance. This demonstration will support California’s efforts 

to integrate mental and physical health. This is so important, as 

we all know that the head is connected to the body, and we need 

to treat it that way. 

Ms. Wachino, how is a Medicaid program, especially through 

waivers and demonstration projects, making a difference in the 

mental health system? 

Ms. WACHINO. Thank you for the question. We are working actively on supporting mental health services in a number of areas, 

and thank you for mentioning the community mental health services program that we released the planning grant announcement 

for just a few months ago. We were very happy to have that legislation. As you well know, it allows us to pilot approaches in partnership with health centers to advance community-based mental 

health care, and we are very much looking forward to seeing States 

apply for those grants. We have had a high interest level so far, 

and we will look forward to continue working with them. 

I think, in addition to that, we have a number of initiatives underway, and a very strong interest level from States in moving towards greater physical and behavioral health integration, and 

clearly community-based mental health care is a key part of that, 

and we will be working actively with California, and with other 

States, to ensure appropriate provision of community-based care. 

Ms. MATSUI. Well, thank you. Now, Ms. Wachino, under your 

leadership CMS recently released the first major proposed update 

to Medicaid and CHIP managed care rules since 2003, and one of 

the provisions of the proposed rule would provide flexibility for 

Medicaid managed care on the so-called IMD exclusion, which prevents Medicaid from paying for inpatient mental health services 

and facilities with more than 16 beds. Can you please elaborate on 

that policy, and how it is intended to strike the right balance between the ability to provide inpatient services and emphasis on 

community-based care? 

Ms. WACHINO. Thank you for the question. We have spent a lot 

of time thinking, and I know many members of Congress have as 

well, about how to ensure access to mental health services, particularly community mental health services, and we have become 

aware of a growing need for access to mental health services. 

However, we are also trying to approach it cautiously and are 

very aware of the risk that if we move too far forward, and too fast 

in moving forward, in terms of allowing Medicaid funding for services to adults in institutions of mental disease—which, as you 

know, Congresswoman Matsui, is prohibited by statute—that we 

would risk undermining the progress we have made in serving 

Medicaid beneficiaries in communities rather than institutions. So 

our proposed rule tries to strike the balance by proposing to allow 

States and plans to cover, as part of their capitation rates, shortterm stays in institutions of mental disease. 

Ms. MATSUI. OK. Thank you. Dr. Schwartz, during your testimony today you noted the importance of Medicaid on our health 

system safety net. I was particularly interested in your comment 

that Medicaid often acts as a wraparound insurance for long-term 

72 

services and supports, as well as employer sponsored insurance and 

Medicare. Can you please expand on this wraparound role that you 

described in 10 seconds? 

Dr. SCHWARTZ. Yes. I think the primary way is Medicare does 

not cover long-term services and supports, although it is the primary source of coverage for medical care for the elderly and disabled. Those services have very few sources of private coverage, 

and Medicaid plays a key role for those populations. It also provides wraparound services for employer-sponsored coverage, primarily for children with disabilities, who have very high costs, particularly for prescription drugs, that may be beyond what their parents’ plans pay for. 

Ms. MATSUI. OK. Thank you, and I will submit my other questions. 

Mr. PITTS. The Chair thanks the gentlelady. I now recognize the 

gentleman from Illinois, Mr. Shimkus, 5 minutes for questions. 

Mr. SHIMKUS. Thank you, Mr. Chairman, and welcome—we have 

two competing, as you probably heard, hearings going up and 

down, so I apologize for missing some of the testimony. But to my 

friend from Kentucky, we do have 21st century cures. Bill is going 

to be on the floor. Adapt is part of that. It is going to build on gain. 

This is on the antibiotic resistance issues, which we hope to get, 

you know, more drugs into the—or to be able to compete. So I do 

think there is a legislative response. I think his issue was, you 

know, where is the Government’s response? So—but I just throw 

that out there for information. 

Ms. Wachino, in 2008, Mr. Waxman, Dingell, and Mr. Pallone 

sent a letter to GAO expressing concerns on CMS’ implementation 

of its own policy on 1115s, and we have talked about these today, 

demonstrations that they be budget neutral. Years later those concerns are still there. GAO has found billions of dollars in increased 

costs to the Federal Government as a result of waivers that were 

not budget neutral, a concern that crosses party lines. Can you 

please explain CMS’ process for assessing the budget neutrality of 

waivers, and how the CMS actuaries are involved in this process? 

Ms. WACHINO. Sure. Our approach to budget neutrality, which, 

as you know, is designed to ensure that costs with the waiver are 

not higher—— 

Mr. SHIMKUS. Well, the States have been making promises that 

they are going to have this new ramped up program that is actually going to be a savings, and we are finding out that they are not. 

Ms. WACHINO. Yes. As we work with each State, we try to find 

a solution. As we have worked them, particularly on budget neutrality, we have made our 1115 waiver approval process more 

transparent. We have improved our monitoring and evaluation. 

And particularly with respect to transparency, we put all of our approval documents on medicaid.gov. We also, as you probably know, 

developed a template for waiver applications that includes a structure for budget neutrality reporting, and we have worked to be consistent in our approaches to budget neutrality across States. 

Mr. SHIMKUS. Wouldn’t it be prudent to have you all and your 

actuaries sign off on each demonstration to ensure that it is budget 

neutral? 

73 

Ms. WACHINO. I think we have worked hard to ensure consistency in budget neutrality, and will continue to work hard. 

Mr. SHIMKUS. So that brings me to H.R. 2119, which is the bill 

I dropped, just to really say sign off on it. Have your actuaries actually sign on the dotted line, and put their reputation on the line 

that, based upon the analysis they have in front of them, that this 

is going to be—right now, yes, you could put all this stuff out there, 

but it is not a strong enough signal to say—because we—it is been 

proven it has not been working. I mean, we are just spending more 

than what the projected savings would be on the program. 

Let me go to one last issue, which I do have time for. If the staff 

would put the chart up? 

74 

75 

Mr. SHIMKUS. I talk about this all the time. CBO recently issued 

a 2015 long-term budget outlook, and has noted that, in a little 

more than a decade, all the Federal budget will be consumed with 

entitlements and service on the debt. With respect to Medicaid it 

said many State Governments will respond to growing costs for 

Medicaid by restraining payment rates to providers and managed 

care plans, limiting the services that they choose to cover, or tightening eligibility for those programs so that it serves fewer beneficiaries than it would have otherwise. 

This reaffirms a long-term concern of mine that our biggest 

threat to access to care for our Nation’s most vulnerable is the 

budgetary pressures that States and the Federal Government face 

in financing our entitlement programs. Yet, in your testimony 

today, you did not mention the fiscal sustainability of the program 

at all. Aren’t you concerned that unless we make changes our fiscal 

situation will put beneficiaries’ access to care at risk, or do you 

agree with—disagree with CBO’s warnings? 

Ms. WACHINO. We are very committed to being strong fiscal stewards of the Medicaid program. I think Medicaid has proven to be 

a very cost-efficient program. As you saw in some of my colleagues’ 

testimony—— 

Mr. SHIMKUS. But the point is this, here—that is our budget. 

Ms. WACHINO. Um-hum. 

Mr. SHIMKUS. The red is mandatory spending. One of those is 

Medicaid. And the CBO says it is going to grow, so it is going to 

keep shrinking the blue, which is the discretionary budget, which 

is all these other things we do, NIH, and all these other things. 

The CBO report also says that States—and we have seen this. This 

is not new. States, when they are in budgetary pressure, they start 

restricting access to Medicaid. Isn’t that a threat that you ought to 

be mentioning when we are doing this let us talk about Medicaid 

hearing? 

Ms. WACHINO. Congressman, we work, again, actively to ensure 

the sustainability of the program so that it—— 

Mr. SHIMKUS. So what proposals are you going to provide to us 

to make this program sustainable? 

Ms. WACHINO. Congressman, in the President’s budget we proposed proposals around changing the drug rebate—— 

Mr. SHIMKUS. And that is not in your testimony. 

Ms. WACHINO. That is right. My testimony did not address every 

proposal in the President’s budget, but I think it is important to 

note for the record that there are proposals with respect to changes 

for durable medical equipment, and to spending for prescription 

drugs. And we think approaches like that, together with our approaches to strengthening delivery system reforms, are the ways to 

ensure the sustainability of the program for the future. 

Mr. SHIMKUS. Thank you, Mr. Chairman. I will just say actuary 

changes in entitlement programs. You have to make actuary 

changes, not nibbling around the edges. And I will yield back my 

time. 

Mr. PITTS. The Chair thanks the gentleman, and now recognize 

the gentleman from New Mexico, Mr. Luja ́n, 5 minutes for questions. 

76 

Mr. LUJA ́ N. Thank you very much, Mr. Chairman. Ms. Wachino, 

as you are aware, I have had conversations with you and with Secretary Burwell about concerns with the behavioral health system 

in New Mexico. At the moment is CMS concerned that New Mexicans enrolled in Medicaid have adequate access to behavioral 

health services? 

Ms. WACHINO. Congressman, thank you for working with us and 

for your continued interest in this issue, and you know that we 

share concerns about ensuring appropriate access to behavioral 

health services in New Mexico. We have worked very closely with 

all States, including New Mexico, to ensure appropriate access to 

behavioral health care. Specifically, with respect to New Mexico, as 

you and I have discussed previously, we are working with the State 

to develop a comprehensive plan to continue and to ensure access. 

The State has provided us data, which we are reviewing now, and 

we hope to be able to report out on it soon. 

Mr. LUJA ́ N. So, Ms. Wachino, in 2013 CMS asked the State of 

New Mexico for a network development plan. Is that the plan you 

are referring to? 

Ms. WACHINO. We asked them for a plan. We have actually taken 

a step back and asked them to go a little bit further than that, and 

to go review their past plans and their future plans, and provide 

to us a plan that provides us an assurance that there will be adequate access to mental health services throughout the State. 

Mr. LUJA ́ N. So in 2014 you followed up with a request letter, the 

same one that you submitted in 2013 to the State of New Mexico, 

reminding them—it says, we remind the State to submit a network 

development plan. Has that plan been submitted to CMS? 

Ms. WACHINO. I will have to go back and check, and I could submit that for the record. I can tell you, Congressman, that we met 

with the State as recently as June to talk about the need to continue progress forward in this effort. We still have some additional 

information we are awaiting for the State, and we continue to work 

with them actively, and look forward to having more to report to 

you soon. 

Mr. LUJA ́ N. So I appreciate very much that CMS shares concerns. 

It is also stated in your 2013 letter that CMS continues to be concerned about the transition of behavioral health providers and centennial care. In 2014 the State again worked with the State of New 

Mexico to ask for some data to be released associated with behavioral health stakeholders. 

And there was a letter that was sent to the State of New Mexico 

in which the State of New Mexico’s behavioral health responded to 

CMS, September 23, 2014. In the letter it says, ‘‘As we discussed 

in our meeting with CMS’’—and I am quoting —‘‘and the BHS 

stakeholders, HSD is anxious to share BH utilization data with the 

public, but we need to be sure that the data we report is accurate. 

We are close to confirming the utilization data, and within the next 

few weeks we expect to release BH utilization data for the first two 

quarters of centennial care. We understand the importance of data 

transparency.’’ So it said within the next few weeks. Again, this letter was written September 23. 

In an article in the Albuquerque Journal, which is a local paper, 

published September 24, which is the next morning, at 12:02 

77 

a.m.—and I know the press is good, but they can’t write an article 

in a minute, so it probably was written the day before—the spokesperson for HSD says that the data will be presented to the Legislative Finance Committee today. Was someone not being honest with 

CMS when they sent this letter to you on September 23? 

Ms. WACHINO. Congressman, we continue to work as closely as 

we can with the State to ensure adequate access to behavioral 

health services. I can go back with my staff and review what the 

State submitted, and report back to you. 

Mr. LUJA ́ N. Ms. Wachino, has CMS been receiving adequate data 

yet? 

Ms. WACHINO. We have a variety of data sources from the State. 

We are comparing them to each other, and trying to identify trends 

and issues with respect to access to behavioral health care. 

Mr. LUJA ́ N. Did CMS receive the data that was publicly reported 

in the Albuquerque Journal, that was also shared with the New 

Mexico Legislative Finance Committee on September 24 of 2014? 

Has CMS received that data? 

Ms. WACHINO. Congressman Luja ́n, I know that we have received 

data, including data that is reported to the legislature from the 

State. As you know, many of the developments that you have just 

informed me of precede my tenure at CMCS, so, if I could, I would 

like to go back and examine the record with my staff who have 

been working on this. 

Mr. LUJA ́ N. And, Ms. Wachino, with all due respect, these issues 

were brought up with the meeting with the delegation 6 weeks ago. 

This is—these are not new questions. The reason I am asking them 

in this hearing today is because we have not received any answers, 

and it is frustrating. Especially when it seems that the paper has 

more access to data than the delegation and CMS does, at least 

than what is—reporting to us. The way that this information came 

out was through a FOIA request through a local network of individuals that were concerned in New Mexico. Do—does—do members of Congress have to seek Freedom of Information Act requests 

to Federal agencies to get data? 

Ms. WACHINO. Congressman, as we have committed to you, we 

would—we are obtaining data from the State, and we have agreed 

to make it transparent for everyone. And let me say again, we met 

with the State as recently as early June to try to ensure continued 

progress in this area, and we are going to continue to work with 

them and with you to ensure appropriate provision of behavioral 

health services in the State. 

Mr. LUJA ́ N. All right. Mr. Chairman, I—as you can see, there is 

some frustration from the delegation in the State of New Mexico 

in this issue, and it is one that we hope that we can continue to 

work with the staff and everyone that—from CMS that has been 

working with us recently. But we need to get these answers to 

questions that have been asked, and to try to get to the bottom of 

what is going on. And I certainly hope that you can share with us. 

I will submit into the record more questions, Mr. Chairman. A 

deadline that has been established for when this report were—in 

2013—2014. It is now 2015. When is a deadline going to be established to get this report in? So I thank you, Mr. Chairman, for your 

indulgence, and I yield back. 

78 

Mr. PITTS. The Chair thanks the gentleman, and now recognizes 

the gentleman from Pennsylvania, Dr. Murphy, 5 minutes for questions. 

Mr. MURPHY. Thank you, and good morning. I am going to follow 

up on some of the questions my colleagues and friends have asked 

from New Mexico and California, the behavioral thing. I know the 

GAO report said that behavioral health is a serious problem. 

Ms. Wachino, you made reference to the word progress. What 

progress is being made on the IMD exclusion issue? 

Ms. WACHINO. We have been looking very carefully at this issue 

from the standpoint of wanting to ensure that there is appropriate 

access to inpatient mental health services and at the same time 

trying to arrive at an approach that doesn’t undermine the 

progress that we have made—— 

Mr. MURPHY. That is what I am asking—— 

Ms. WACHINO [continuing]. Supporting people in the—— 

Mr. MURPHY [continuing]. What you mean by progress—— 

Ms. WACHINO [continuing]. Communities. 

Mr. MURPHY [continuing]. Is what—— 

Ms. WACHINO. The most tangible sign of progress is in our proposed managed care rule, where we have proposed to give States 

the flexibility, and plans the flexibility, to cover, through their capitation rates, short-term stays in their—— 

Mr. MURPHY. ‘‘Short-term’’ meaning? 

Ms. WACHINO. ‘‘Short-term’’ meaning—I think the standard is up 

to 15 days. I can tell you that we reviewed preliminary data from 

the Medicaid emergency psychiatric demonstration, which I know 

you are familiar with, and use that to base the standard for the 

short-term stay. 

Mr. MURPHY. Some things about that have been—I am concerned 

that a short-term stay of 15 days is insufficient, because it may 

take a couple weeks to get off of one medication, couple weeks to 

get back on another one. But we don’t—but that is different from 

residential care. I am looking at things that I think are valuable 

at a less than 30 days average rate. 

But when you are looking at these issues, and helping States do 

that, are you looking at other dependent variables, such as suicide 

rates, drug overdose rates, arrests, incarcerations, homelessness, 

ER boarding costs, are any of those things you are looking at? 

Ms. WACHINO. I think, Congressman, your question points to— 

at the end of the day we should be looking at health outcomes. 

Mr. MURPHY. Um-hum. 

Ms. WACHINO. When we fund Medicaid services, I believe that 

the evaluation of the Medicaid emergency psychiatric demonstration will inform our policy in this area significantly. We don’t have 

evaluation results yet. 

Mr. MURPHY. And I just want to make sure, as you are pursuing 

that—and this is what I want to find out, what your dependent 

variables are in your study. A recent report that was just—I just 

read from the Arkansas legislature, might want to look that up. It 

looked at States like Oregon, Georgia, Texas, and found that the 

rates—the cost of incarcerating someone with mental illness could 

be 10 times higher than the rate of serving them in the community. 

79 

Obviously this would be a huge issue, especially if you have the 

revolving door of people in and out of jails, show up in emergency 

rooms, back in the community, we are not serving anybody well 

that way. I am sure you would agree. That is heartless, and that 

is—we don’t do that in this country. Unfortunately, we do that, but 

it is a serious concern. 

But with regard to that, I also want to talk about legislation I 

have that this committee has been dealing with my legislation, 

Helping Families in Mental Health Crisis Act. We are trying to reform the whole system. And one of the ways that we look at this 

is to help—is through promoting stronger enforcement of mental 

health parity. And recently CMS proposed a rulemaking that would 

apply purely to beneficiaries served by Medicaid and managed care, 

which have far reaching positive implications, if complied with. 

On another area, though, I have strong concerns about the proposed rule’s exclusion of long-term care services from MHPAEA, 

parity protections. Long-term care services, inpatient and community based, are critical to many individuals with mental health and 

substance abuse disorders, particularly the medicated CHIP population. And CMS has clear authority and statutory obligation to 

apply parity to all covered benefits under these programs, yet the 

proposed rule doesn’t even define long-term care services, or identify the types of services that apply. Can you address this flaw in 

the proposed rule with regard to the definition of that? 

Ms. WACHINO. As you know, the comment period on our proposed 

mental health parity rule, which we think is a very substantial advance in coverage of mental health services in the Medicaid program, just recently closed. We are reviewing the comments now, 

and I would fully expect that the question of whether these protections also extend to long-term services is something that we will receive a lot of comments on, and that we will actively consider as 

we finalize the rule. 

Mr. MURPHY. Thank you. I hope—what is important to all these 

rules, in looking at behavioral health, is when—you also talk about 

progress in this issue is—I think we are also—so all—you have the 

IMD exclusion. A lot of people can’t get care for the crisis, period. 

We don’t want people—we don’t ever want to bring back the asylums, but we want people to have an option for crisis, instead of 

being boarded in an emergency room. We have had testimony in 

my Oversight Committee that boarding would take place for hours, 

days, weeks, and months. Terrible place for a person to be strapped 

to a gurney as these things go on. 

But part of the concern also is that there are just simply not 

enough providers. Not enough psychiatrists, not enough clinical 

psychologists, not enough clinical social workers, who deal with the 

severely mentally ill. And so I am hoping that is also something 

you are looking at as well. It has an impact upon the reimbursement and—provision of these. As you are looking at working out 

these partnerships with States, we have to have ways of getting 

more people out there, because nothing is worse than telling someone, there is just no room for you, and there is no one to see you. 

I yield back. 

Mr. PITTS. The Chair thanks the gentleman. I now recognize the 

gentleman from Oregon, Mr. Schrader, 5 minutes for questions. 

80 

Mr. SCHRADER. Thank you, Mr. Chairman, I appreciate it. Ms. 

Wachino, could you comment a little bit on Medicaid spending per 

beneficiary compared to private insurance over this past decade? 

Ms. WACHINO. Sure. Thank you for the question. When you look 

at per capita—per beneficiary costs, Medicaid costs have been recently growing more slowly than the per beneficiary costs in private insurance. And I believe I saw in my colleague’s testimony 

projections that, on a per beneficiary basis, Medicaid costs are expected to grow more slowly than private insurance. Of course, we 

are putting a number of tools in place focused on delivery system 

reform to ensure that we continue to do the best possible job of 

maintaining Medicaid’s cost efficiency. 

Mr. SCHRADER. CBO would apparently agree with you on that. 

Ms. Yocom, just a quick comment. I—as we celebrate the 50th anniversary of Medicaid, the program is changing. We are moving 

past the old fee-for-service—pay for, you know a widget or a particular service—and going to this managed care type of model, 

where we are treating the whole patient a little bit, I think to answer Dr. Murphy’s concerns, and others. Is GAO prepared to audit 

outcome-based results versus just how the money is spent? 

I mean, in our last hearing Ms. Iritani and others in GAO talking about how the money is spent. And certainly when you are just 

monitoring, you know, individual dollars going out, that is appropriate. But, as a policymaker of the 21st century, I would rather 

monitor outcomes. I am not sure I can evaluate the appropriateness of an expenditure, but I can evaluate whether or not we are 

getting results. Is GAO prepared to work along those lines? 

Ms. YOCOM. We would be glad to work with you on putting together work in that area. We have also done some work looking at 

managed care utilization rates, and did find a wide variety of utilization rates across the 19 States that we looked at. And some of 

this did appear to be related to whether or not a beneficiary was 

enrolled in Medicaid for the full year versus a partial year. 

Mr. SCHRADER. All right. That will be fun to work with you on. 

I know my own State, much like I guess Kentucky, the Medicaid 

expansion—what was occurring before this was going on, before the 

ACA, and with the ACA, last year and a half we added 400,000 

people to the Medicaid rolls. Big active outreach by folks in our 

State. We also have 25 percent of our population on Medicaid. It 

is not a—at least they have access—that great a portion of the population, I think. 

Ms. Wachino, pleased to see you reference Oregon’s program in 

your testimony. It is a fairly innovative outcome-based approach, 

where we are trying to keep costs down. Actually, half of the projected rate for Medicaid growth nationally, from 4 percent down to 

2 percent, in the same time get better outcomes. 

I commented last year about results from a year ago, and I guess 

just recently new data came out, with emergency room visits down 

22 percent amongst these coordinate care organizations that deal 

with mental health, hopefully dental health, as well as the fiscal 

health of the people. Short-term complications from diabetes down 

27 percent with this coordinated care approach. Hospital admissions from COPD, chronic obstructive pulmonary disease, down 60 

percent. You know, and that is one of the long-term cost drivers, 

81 

unfortunately, of a lot of health care in this country, whether you 

are on Medicaid, Medicare, or private insurance. Can you comment 

a little bit on what CMS may be learning from what you are seeing 

in Oregon, and how you might evaluate future waivers from different States? 

Ms. WACHINO. Sure. I think we will be looking very carefully at 

the results of the Oregon demonstration. And I am not yet familiar 

with the results you just shared, so thank you for that, and improving the population health. Oregon Committed is part of the 1115 

waiver to very robust cost quality goals. And as we review the success of the waiver with them and of their coordinated care in serving Medicaid beneficiaries, we will want to look at cost, and quality, and how it is achieving those goals. 

Mr. SCHRADER. Good, good. Well, I think it is the future of medicine. Frankly, the future of Federal budgeting in general, rather 

than trying to dictate to different agencies or different providers 

around the country how to do things. Let us talk with them, share 

concerns about outcomes and where we are trying to go, monitor 

those and spend money there, hopefully a little more efficiently. 

With that I yield back. Thank you, Mr. Chairman. 

Mr. PITTS. The Chair thanks the gentleman. I now recognize the 

gentleman from New Jersey, Mr. Lance, 5 minutes for questions. 

Mr. LANCE. Thank you very much, and good morning to you all. 

And I apologize for shuttling between two subcommittees. I think 

this is a very interesting hearing, and I want to learn more about 

Medicaid. 

To Ms. Wachino, when the program began 50 years ago, I assume that greater expenditures were in Medicare than Medicaid, 

is that accurate, 50 years ago? 

Ms. WACHINO. Congressman, I would have to go back and look 

at the history—— 

Mr. LANCE. Well—— 

Ms. WACHINO [continuing]. To—— 

Mr. LANCE. Well, perhaps someone else on the panel. I presume 

at some point the line crossed, and the greater expenditure was on 

Medicaid than Medicare. Can anybody on the panel enlighten me 

on that? 

Ms. YOCOM. I know that—and I attended a conference a couple 

of years ago where it was mentioned that combined Federal and 

State spending on Medicaid had just exceeded that of Medicare, 

total Medicare spending, and that would have been maybe a year 

or two ago. 

Mr. LANCE. Combined Federal/State on Medicaid? 

Ms. YOCOM. Correct. 

Mr. LANCE. Whereas Medicare, of course, is primarily a Federal 

program. I wonder whether this was anticipated. The figures I 

have is that 70 million people utilize Medicaid, is that right, in this 

country? We have 310, 315 million people? Is that right? Seventy 

million people? 

Ms. YOCOM. Yes. 

Mr. LANCE. And has that increased because of the terrible recession? I know it increased as well because of the ACA. I am familiar 

with that, and the fact that some States have expanded Medicaid, 

and others have not, and that is a great debate in this country. 

82 

And New Jersey is one of those States with a Republican Governor 

that expanded Medicaid. But do you think that the numbers have 

increased as well due to the fact that we are not in as robust economic times as we all would like? 

Ms. YOCOM. We have done work looking at the effects during the 

economic downturns, and Medicaid enrollment does go up during 

an economic downturn. It also recovers—it is related to unemployment, of course—— 

Mr. LANCE. Yes. 

Ms. YOCOM [continuing]. And unemployment, it tends to be a lagging indicator, so the recovery is also slower. And so you tend to 

get people on Medicaid more quickly, and they stay longer. 

Mr. LANCE. Now, the unemployment rate is whatever it is, 5.3 

percent. It is lower than it was. Is there a correlation as well with 

the labor participation rate? 

Ms. YOCOM. Yes, there is. 

Mr. LANCE. Um-hum. 

Ms. YOCOM. Yes. 

Mr. LANCE. Yes. I mean, people cite the lower unemployment 

rate. I think that is half the picture. There is also a dramatically 

lower labor participation rate in this country. So there would be a 

correlation between Medicaid and the labor participation rate? 

Ms. YOCOM. Right. Our work relied on the employment-to-population ratio. 

Mr. LANCE. Um-hum. And that is significantly lower than it has 

been in the last 50 years. Would that be an accurate statement? 

Ms. YOCOM. I couldn’t answer that. 

Mr. LANCE. I think it is the lowest it has been since at least 

1980, something like that. Thank you. Well, I want to learn more 

about this, because it is such an important part of the public policy 

of this country for the last 50 years. 

To CMS in particular, and this is a long and complicated question, and has lots of jargon in it, CMS has indicated the oversight 

of a program the size and scope of Medicaid requires robust, timely, 

and accurate data to ensure efficient financial and program performance, support policy analysis and ongoing improvement, identify potential fraud, waste, and abuse, and enable data driver decision making. 

Work conducted by the OIG in 2013 raised questions about the 

completeness and accuracy of the Transformed Medicaid Statistical 

Information System, TMSIS, data upon national implementation. 

CMS has since stated its goal of having all States submitting data 

in the TMSIS file format by 2015. Could you please describe the 

actions you are taking to ensure that this occurs? 

Ms. WACHINO. Sure. If it helps with the jargon, Congressman, we 

call it TMSIS, and it is a data—— 

Mr. LANCE. TMSIS? 

Ms. WACHINO. TMSIS. 

Mr. LANCE. I have learned something this morning. 

Ms. WACHINO. And it is CMS’ investment in getting stronger, 

better, more comprehensive, and faster data, and how our program 

is working. 

Mr. LANCE. Um-hum. 

83 

Ms. WACHINO. We have made substantial advances in TMSIS implementation this year. Our first State started submitting data in 

May, and we expect to have nearly all States submitting data by 

the end of the year. So we are moving forward and very eager to 

start sharing the data with external stakeholders for analysis, and 

using it for our own program management. 

Mr. LANCE. Thank you. My time has expired, and I look forward 

to working with all of you. 

Mrs. ELLMERS [presiding]. The Chair now recognizes Mr. Sarbanes from Maryland for 5 minutes. 

Mr. SARBANES. Thank you, Madam Chair. Thank you all for your 

testimony. I am very interested in the money following the person 

initiative, and I wanted to hear a little bit more about that. When 

I was in private practice as a healthcare attorney, I had the opportunity, in Maryland, to work on a program where Medicaid—the 

Medicaid program assigned a certain number of slots where assisted living facilities could qualify for Medicaid reimbursement, 

which doesn’t typically happen when you have skilled nursing care, 

which is covered, but doesn’t extend into the assisted living arena. 

But the observation was there were sort of people in that inner 

section who could actually be treated in assisted living facilities, as 

opposed to going into skilled nursing, and could—that could be 

done at much less cost, and so why not try and explore that opportunity, potentially broaden it. And if we can continue to design that 

expansion or initiative going forward, it could produce tremendous 

savings, as well as being better for patients. And that can include 

exploring what sorts of treatments or reimbursement can occur in 

the home, right? So you are not even getting into institutional care 

of any kind. 

So I was just curious, what is the status of exploring this—what 

I consider a new frontier, particularly as the demographics of the 

wave of our seniors is coming at us full force? 

Ms. WACHINO. Congressman, thank you for the question. We 

have spent a lot of time at CMS moving towards approaches that 

promote care—the most community-based care possible. And there 

is, as you note, a spectrum of different types of providers that can 

serve those individuals. Money Follows The Person is one vehicle 

by which we have worked with States towards that goal. We also 

have worked with them through the balancing incentive programs, 

and through their home and community-based service waivers. 

Currently, we have been assessing some of the things we have 

learned from our work with States through Money Follows The 

Person, and similar programs, and using it to inform our efforts 

with all States moving towards greater community integration, and 

would be happy to follow up with you on some of the particular 

things we have learned, and in particular the interaction with assisted living facilities. 

Mr. SARBANES. Are you—I mean, are you seeing some real potential savings opportunities there? 

Ms. WACHINO. I would like to look back more carefully at the fiscal impacts. I can say with certainty that we are seeing high rates 

of satisfaction from our beneficiaries as they move forward with 

greater community care. So we will circle back with you and provide evidence and impact on the cost. 

84 

Mr. SARBANES. I would love to get more information about that, 

and maybe collaborate with you—— 

Ms. WACHINO. We will follow up—— 

Mr. SARBANES [continuing]. Going forward. 

Ms. WACHINO [continuing]. With you. Thank you for the question. 

Mr. SARBANES. Thank you very much. I yield back my time. 

Mrs. ELLMERS. The gentleman yields back. The Chair now recognizes Mr. Bilirakis from Florida for 5 minutes. 

Mr. BILIRAKIS. Thank you, Madam Chair. I appreciate you very 

much, and I want to thank you for your testimony. 

Ms. Yocom, in your statement you—for—to your report titled 

Medicaid Demonstrations, Approval Criteria and Documentation 

Needs To Show How Spending Furthers Medicaid Objectives, you 

highlight how HHS has approved questionable methods and assumptions for spending estimates without providing adequate documentation. You also mentioned HHS does not have explicit criteria 

explaining how it determines how spending in the demonstration 

program furthers Medicaid objectives. 

You also note their approval documents are not always clear on 

what expenditures are for, and how it will promote Medicaid objections—objectives. Can you talk about what recommendations have 

GAO made in this area that have not been accepted or implemented by HHS or CMS? 

Ms. IRITANI. I will answer that question. Yes, we have made several recommendations to CMS around those issues that you point 

out. One is to issue criteria regarding how CMS assesses whether 

or not approved new spending under demonstrations will further 

objectives. A second is to apply that criteria in the documentation 

and make the documentation transparent. And a third relates to 

providing assurances in the documentation that approved spending 

will not duplicate other Federal funding sources. CMS agreed with 

the latter two and partially agreed with our recommendation to 

issue criteria on how they assess spending. 

Mr. BILIRAKIS. Have these recommendations been implemented, 

and then why not, Ms. Wachino? 

Ms. WACHINO. We have implemented the GAO’s recommendations with respect to ensuring our approval documents are clear 

with respect to the criteria we use, with ensuring that there is no 

duplication of Federal fundings, and ensuring that we are consistently and clearly articulating when we determine that a particular 

authority meets the objectives of the Medicaid program. 

We moved forward with that implementation, with implementing 

those policies while the report was still in draft, and so have 

worked very actively over the past several months to ensure that 

our approval documents are clear. 

Mr. BILIRAKIS. Ms. Yocom, what do you have to say about that? 

Do you agree? 

Ms. YOCOM. I really have to defer to Ms. Iritani. She is the expert in this area from GAO. 

Mr. BILIRAKIS. Please. 

Ms. IRITANI. We have not reviewed the changes that Ms. 

Wachino has said that they have made, so we would need to do 

that in order to see how they are documenting their approvals. 

85 

That said we still feel strongly that there should be more transparent criteria for how they assess whether or not new spending 

will further Medicaid objectives. 

Mr. BILIRAKIS. OK. Please get back to our committee after a review of these objectives, OK? Please. I am sure most of the committee is interested in this, not all. 

Ms. Wachino, you probably know about Puerto Rico’s financial 

challengers, which are rather severe, I am sure you will agree. A 

recent morning consult story highlighted the contrast in treatment 

that Puerto Rico receives under Federal healthcare programs. For 

example, Puerto Rico has a rather low spending cap on its program. Are you monitoring the rate at which Puerto Rico is spending its Medicaid funds, and do you worry it will exhaust those 

funds well before 2019? 

Ms. WACHINO. We are looking very closely at the overall situation in Puerto Rico, including its Medicaid spending, very aware 

that there are a bunch of very strong concerns about the finances 

of Puerto Rico, and considering what approaches we might take. 

Last year, in approving some of their benefits, we offered flexibility, and they took us up on it, and—with respect to their administration, and we are continuing to look at the spending in the program, and options for assisting the Commonwealth. 

Mr. BILIRAKIS. In your estimation, will they exhaust the funds 

before 2019? 

Ms. WACHINO. I would have to go back and look at that, Congressman, but I am happy to submit a response for the record. 

Mr. BILIRAKIS. Thank you. Ms. Wachino, CMS proposes to develop the Medicaid managed care quality rate system for managed 

care organizations in all States, which would presumably be similar to the Medicare Advantage five-star rating system. However, 

research shows that CMS’ current start system undervalues care 

provided to beneficiaries with low socioeconomic status. This is an 

area of growing bipartisan concern. So how does CMS plan to address this issue, especially since all the Medicaid beneficiaries are 

presumably low-income? 

Ms. WACHINO. Congressman, thank you for the question. Our 

proposal to implement the quality rating system is designed to 

make sure that low-income people are able to compare quality 

across plans and select plans in the same way that individuals in 

the private market and in Medicare Advantage can. We think that 

is a substantial advance in quality for our program, and an assist 

to our consumers. 

We do plan on—should we finalize the rule, which, as you know, 

is out for public comment now, we propose to have pretty lengthy 

implementation schedules, and a very substantial public input 

process so that we could identify the strengths of other quality rating systems, bring them to bear in ours, and make any needed adjustments that we need to to account, to your point, for the lowincome nature of our populations, and the fact that our populations 

differ in some very important respects from those of Medicare and 

commercial insurers. 

Mr. BILIRAKIS. OK. Thank you very much, and I yield back, 

Madam Chair. 

86 

Mrs. ELLMERS. Thank you. The gentleman yields back. The Chair 

now recognizes the gentleman from California, Mr. Ca ́ rdenas, for 5 

minutes. 

Mr. CA ́ RDENAS. Thank you very much, Madam Chairwoman. Appreciate the opportunity for us to dialogue with the witnesses. I 

just wanted to remind all of us that one of the main points of Medicaid was to eventually get to the point where we have protection 

or security against the economic effects of sickness for all Americans. In addition to that, President Truman, one of his statements 

included the line that talks about health security for all. 

On that note, as a result of the Affordable Care Act, our country 

currently holds the lowest rate of the uninsured in the history of 

this Nation. In 2014 alone Medicaid helped reduce the number of 

uninsured Americans from 43 million to 26 million. Is that about 

right, Ms. Wachino? 

Ms. WACHINO. I do know that we have made really—very substantial advances in reducing the uninsured rate, and it is an accomplishment we are very proud of. 

Mr. CA ́ RDENAS. OK. Well, I would like you to take it back to all 

of the hard working folks within your department, to let them 

know how much not only do those 43, down to 26, Americans who 

now have health care appreciate all of your good hard work, but 

also at the same time that it is a vision that hopefully we can see 

in our lifetime, where we could see that 26 million go down to nothing. In addition to that, one of the things that I noticed, as a politician myself, is that many people try to use the word entitlement 

program as though it is a bad word. But yet, at the same time, I 

prefer to call it a safety net, which is a good thing, because it 

brings dignity, and actually saves lives for many Americans, especially hard working poor Americans. 

Speaking of the hard working poor, my first question goes to you, 

Dr. Schwartz. Thank you very much for your testimony today. One 

of the issues that is very important to my constituents is the availability of health care to all constituents in my district. But my district being 70 percent Latino, a disproportionate representation of 

uninsured is within the Latino community in my district, and 

around the country. And this is despite the fact that among these 

uninsured Latino households, 82 percent of those households are 

part of a hard working employed family. 

So we are not talking about people who choose not to work, we 

are talking about people who are the working poor, which it— 

which, in my opinion, is part of the backbone of what makes this 

country great, people willing to go to work every single day and be 

able to work for whatever meager means people are willing to pay 

them, yet at the same time they do it every single day, and then 

have to worry about whether or not somebody is going to get sick 

in their family, and if they are going to have a catastrophic change 

to their entire finances for maybe one or two generations to come. 

On that note, has MACPAC undertaken any work looking specifically at barriers to enrollment that may still exist in the Latino 

community? 

Dr. SCHWARTZ. No, we haven’t. We have done work looking at the 

experience of different minority communities in accessing services, 

and I believe Medicaid mirrors much of the rest of the health sysVerDate Mar 15 2010 10:48 Feb 23, 2016 Jkt 037690 PO 00000 Frm 00090 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X63MEDICAID50PARTBREQ022216\114X63MEDICAID50PENDI
87 

tem in that different minority populations do experience higher 

barriers to care. And that is an area, as I said in my written statement, that we are interested in the experiences of groups within 

the Medicaid population, because they are so diverse, and how 

their different experience of care relate, and what policy solutions 

might be appropriate, given the different experiences. 

Mr. CA ́ RDENAS. OK. Please keep in mind at all times that it is 

not just language barriers, cultural as well are some of the barriers 

out there. 

Ms. Wachino, what types of initiatives are underway to help ensure that we reach Latino and other minority communities where 

individuals may be eligible for coverage, particularly in the wake 

of Medicaid expansion? 

Ms. WACHINO. Thank you for the question. I think we are very 

interested in making sure that Latino residents across the country 

get coverage. And, clearly, one way to do that is by taking up Medicaid expansion, as California has. We also are working actively to 

ensure that eligible Latinos, working families, I mean, the Latino 

community, enroll in coverage. 

And, frequently, that requires outreach and application support, 

so we work with programs like our navigator programs to make 

sure that people have support in applying for coverage, provide the 

information they need to to get an eligibility determination and enroll. 

Mr. CA ́ RDENAS. OK. Thank you. Ms. Wachino, with over 25 million low-income Americans nationwide who are unable to see a primary care physician, I believe telemedicine could provide an incredibly effective way to improve the healthcare system for everyone. 

Could you expand on the particular benefits for using telemedicine 

with dual eligibles who are unable to visit their doctor due to illness or immobility? And not just in rural areas, but also in higher 

populated areas as well. 

Ms. WACHINO. We have moved forward with telemedicine in a 

number of states. It is an approach that a State can take to promote access to care without even seeking a State plan amendment 

from us. I can look at the particular use of telemedicine for the 

dual eligible population and circle back with you, and provide information for the record about specifics to that population. 

Mr. CA ́ RDENAS. Thank you very much. 

Mrs. ELLMERS. Thank you. The gentleman yields. The Chair now 

recognizes the gentlelady from Tennessee, Mrs. Blackburn, for 5 

minutes. 

Mrs. BLACKBURN. Thank you, Madam Chairman, and I am going 

to make Mr. Pallone’s day, because I am going to say TennCare, 

and talk about TennCare with you all. And I know you are very 

familiar with it, Ms. Wachino. There is a lot of frustration with 

that program, but embodied in that in part is frustration that some 

of the States who have been under the waivers for years, and doing 

the same thing for decades, have to keep coming back to you every 

3 to 5 years for permission once again. So would it not make sense 

to start to grant the States a longer reprieve, and give them a 

longer path to certainty or permanence on these issues? 

88 

Ms. WACHINO. Thank you for the question, Congresswoman 

Blackburn. As you know, we work very actively with each State to 

try to develop—— 

Mrs. BLACKBURN. This is a yes or no. 

Ms. WACHINO [continuing]. For the State. We have been looking 

very actively, and I think Secretary Burwell spoke with the Governors about this in February, about streamlining our renewal 

process. It is very important—— 

Mrs. BLACKBURN. OK, it is a yes or a no question. 

Ms. WACHINO. I think that there are ways, and we are working 

on them now—— 

Mrs. BLACKBURN. OK. 

Ms. WACHINO [continuing]. To—— 

Mrs. BLACKBURN. Thank you. 

Ms. WACHINO [continuing]. Streamline—— 

Mrs. BLACKBURN. Ms. Yocom—— 

Ms. WACHINO [continuing]. Renewals. 

Mrs. BLACKBURN [continuing]. You want to weigh in on that? No? 

OK. All right. Well, maybe you want to weigh in on this one. CMS 

has all these rules—and again, this comes from my guys at the 

State level—on transparency and required timeframes for the 

States when they are applying for their waivers, but then CMS 

doesn’t hold themselves to this own standard, and sometimes it can 

take forever to get an answer from you. So should you not be held 

to the same standard that you are foisting on the States, to meet 

deadlines and timelines and to give some certainty? 

Ms. WACHINO. Congresswoman, we are very committed to working with States quickly to evaluate waiver requests—— 

Mrs. BLACKBURN. OK, let us pick up the pace, then. 

Ms. WACHINO. May I—— 

Mrs. BLACKBURN [continuing]. Yocom—no, ma’am. Ms. Yocom, 

you want to—or Ms. Iritani? Yes. I am just short on time. You can 

expand in—— 

Ms. WACHINO. I will. 

Mrs. BLACKBURN [continuing]. Form. Thank you. Ms. Iritani? 

Ms. IRITANI. Yes, we have heard concerns from States about the 

lengthy time to get waivers—— 

Mrs. BLACKBURN. Yes. 

Ms. IRITANI [continuing]. Renewed and approved, and we have 

seen wide variation in approval times. You know, our concern is 

around the lack of standards and criteria, and we think that those 

would help bring more transparency—— 

Mrs. BLACKBURN. So, to be more definitive, lay out a timeline, 

give the States some certainty, and maybe not make them come 

back every 3 to 5 years. That makes some sense, doesn’t it? 

Ms. IRITANI. We believe that there is more need for oversight—— 

Mrs. BLACKBURN. OK. 

Ms. IRITANI [continuing]. So there is the—— 

Mrs. BLACKBURN. Let me go to a question on enrollment. States 

are required to enroll applicants who attest to being citizens, or to 

having legal immigration status, and then are thereby eligible for 

Medicaid. States receiving Federal matching funding for the care 

during this reasonable opportunity period. But, as a result, and I 

am hearing this from some of my State legislators, individuals who 

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are not citizens or eligible permanent residents may be enrolled, 

and receiving Medicaid. So does CMS think it is appropriate for 

Federal taxpayer Medicaid dollars to be expended on individuals 

who are neither citizens nor eligible residents? Ms. Wachino? 

Ms. WACHINO. Congresswoman, we think it is very important for 

us to make accurate eligibility determinations. When people apply 

for Medicaid coverage, they attest to their citizenship. We verify 

that electronically through the hub, which is a major advance for 

us in making accurate eligibility determinations. If someone is not 

able—— 

Mrs. BLACKBURN. OK. 

Ms. WACHINO [continuing]. To—— 

Mrs. BLACKBURN. Then let me ask you this. Should we not withhold those benefits until such time as their—certainty and a 

verification process is completed? 

Ms. WACHINO. Congresswoman, the—under the statute, individuals have a reasonable opportunity—— 

Mrs. BLACKBURN. OK. 

Ms. WACHINO [continuing]. Period. They attest to citizenship, 

and then we, during that period, verify it. 

Mrs. BLACKBURN. OK. 

Ms. WACHINO. If they are found to be ineligible, they are determined ineligible. 

Mrs. BLACKBURN. OK. Let us look at billing privileges. And 

Obamacare explicitly requires that States suspend the billing privileges of most providers that have been terminated or revoked by 

another State, or by Medicare. However, more than 5 years after 

enactment, banned providers are still receiving many of these Medicaid payments. So what steps is CMS taking to ensure, once again, 

that taxpayer dollars are not going to those that are prohibited, 

should be prohibited, from receiving this money? And are you taking steps to recoup Federal dollars paid to prohibited providers by 

State Medicaid programs? 

And, in the same vein, how are you dealing—how does CMS deal 

with companies that have been found guilty of fraud and should 

not be receiving taxpayer dollars, but they go out and they sell 

themselves so they can be renamed, and still get taxpayer dollars? 

I would like to hear from you on this, and, Ms. Yocom, I would also 

like to—Ms. Yocom, let us start with you, as a matter of fact. 

Ms. YOCOM. Certainly. We have done work in this area, and we 

did identify, in terms of providers, issues where individuals who 

did have suspended or revoked licenses were receiving payments. 

We also have identified some providers who are dead who are receiving payments. 

Mrs. BLACKBURN. And erroneous payments amounted to how 

much last year? 

Ms. YOCOM. I would have to get back—— 

Mrs. BLACKBURN. OK. 

Ms. YOCOM [continuing]. With you on that. Yes. 

Mrs. BLACKBURN. OK. 

Ms. YOCOM. Yes. 

Mrs. BLACKBURN. OK. Ms. Wachino, you want to comment on 

that? 

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Ms. WACHINO. Yes, Congresswoman. It is very important to us 

that we ensure that the providers serving Medicaid beneficiaries 

are appropriate, both so that they get the care they need, and so 

that we are ensuring—— 

Mrs. BLACKBURN. That is not the question that I have asked you. 

I have asked you what you are doing about it. So why don’t you 

submit for the committee an answer about what you are doing 

about erroneous payments, and what you are doing about providers 

that are not eligible getting this money. I yield back my time. 

Mr. GREEN. Madam Chair, can I just have 30 seconds? Ms. 

Wachino, I understand that under law that—and California is the 

only State that expanded Medicaid to undocumented children, 

and—but they don’t get the Federal match. Is that true? If it is a 

State decision? 

Ms. WACHINO. I am not familiar with the particular circumstances in California, but Medicaid generally does not provide 

comprehensive coverage for immigrants. There is a limited provision for emergency care only. 

Mr. GREEN. OK. Thank you. 

Mrs. ELLMERS. I would just ask that you provide us with the accurate documented material—— 

Ms. WACHINO. I will happy to do that—— 

Mrs. ELLMERS [continuing]. To the committee, since this issue 

has been raised. Thank you. 

Ms. WACHINO. I will happy to do that for the record, as well as 

to respond to—— 

Mrs. ELLMERS. Thank you. 

Ms. WACHINO [continuing]. Ms. Blackburn’s question—— 

Mrs. ELLMERS. Thank you. 

Ms. WACHINO [continuing]. About provider enrollment. 

Mrs. ELLMERS. Thank you. The Chair now recognizes Mr. Pallone 

from New Jersey for 5 minutes, the ranking member of our committee. 

Mr. PALLONE. Thank you, Madam Chairwoman. I was going to 

ask unanimous consent to include in the record two new health affair studies that just came out that found evidence that Medicaid 

expansion has made patients’ and hospitals’ bottom lines healthier. 

I think you have copies of them. 

Mrs. ELLMERS. We have not had a chance to review that, so I reserve—— 

Mr. PALLONE. Let me hand them over to you, then, take a look. 

Mrs. ELLMERS. We will consider at a later date, before the hearing adjourns. 

Mr. PALLONE. OK, thanks. I was going to say to Ms. Blackburn 

that I hadn’t—she left, but that I hadn’t heard about TennCare so 

often that I actually forgot about it, but she brought it up again, 

but she is not here, so, sorry. 

All of our witnesses here today have an important and different 

perspective to share about Medicaid and its 50th anniversary. I 

wanted to ask first, Ms. Wachino, as we reflect on Medicaid’s 50th 

year, what do you see as the most significant changes to the program from the standpoint of low-income consumers? 

Ms. WACHINO. Well, Medicaid has grown and evolved over time. 

I think some of the biggest change—we have seen over time its role 

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expand for a variety of populations: coverage of pregnant women to 

ensure access to strong prenatal care and promote lower rates of 

infant mortality, expansions to coverage of people with chronic conditions, like HIV. 

I think if I had to choose two developments just to single out, the 

first would be the coverage of low-income children, that I know was 

led out of this committee, through both Medicaid expansions, and 

later CHIP, which really built on that. And if you look at the 

record on the impact of that coverage, it has clearly been a critical 

support for low-income families through thick economic times and 

thin. 

The second would be the coverage expansion for Medicaid to lowincome adults under the Affordable Care Act, which I think really 

solidifies Medicaid’s role as the base for a strong system of health 

coverage in the United States. And I think, as we work with more 

States to implement it, we will see that base firmly solidified. 

Mr. PALLONE. Thank you. And then, Dr. Schwartz, MACPAC was 

formed fairly recently, but the Commissioners and MACPAC staff 

have already proven to be an invaluable resource to both sides of 

the aisle. What, in your opinion, have been some of Medicaid’s 

greatest advancements? 

Dr. SCHWARTZ. I think, to follow up on Ms. Wachino’s comments, 

the program has really transformed over its lifetime from a program that provided medical care to a very small group of low-income families who were receiving cash assistance to a much larger 

program that takes a much more proactive role in delivery system 

design, in payment initiatives to improve the delivery of care to a 

broader set of populations: children, pregnant women, adults, and, 

of course, people with disabilities. 

I think the other is the very significant shift in the delivery of 

long-term care from institutions into homes and communities, allowing people with disabilities to remain in their homes and active 

in their communities. 

Mr. PALLONE. Thank you. Could I just ask, Ms. Wachino, if you 

would take—I have just got about a minute and 20 seconds of my 

time. Could you just talk about CMS’ work over the last 5 years 

on program integrity as a result of the Affordable Care Act tools? 

Ms. WACHINO. Yes. We take our program responsibilities very seriously. I participate in them. They are led out of our Center for 

Program Integrity, but we work in concert. We have worked actively over the last 5 years on a comprehensive Medicaid integrity 

plan. We have worked to do program integrity reviews of each 

State, because program integrity in Medicaid is a shared State and 

Federal effort. We both have responsibilities. 

But one of the most tangible things we have done is improve the 

process of ensuring that high risk providers do not enter into our 

programs. We have employed and worked with States on high risk 

provider screening, and we have given States access to the same 

data to screen out providers that Medicare uses. So I think we 

have made very substantial advances. I think some of the data you 

heard about earlier is from 2011, and predates some of our recent 

accomplishments. 

Mr. PALLONE. All right. Thank you very much. Thank you, 

Madam Chairwoman. 

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Mrs. ELLMERS. Thank you to the ranking member, and, without 

objection, the documents that you provided will be submitted into 

the record. 

[The information appears at the conclusion of the hearing.] 

Mrs. ELLMERS. The Chair now recognizes myself for 5 minutes. 

Thank you to our panel for being here. Ms. Wachino, in the most 

recent actuarial report on the financial outlook for Medicaid, CMS 

reports that the projected annual growth rate for Medicaid expenditures is faster than the projection of annual GDP growth. The actuary noted that, ‘‘should these trends continue as projected under 

current law, Medicaid’s share of both Federal and State budgets 

would continue to expand, despite any other changes to the program, budget expenditures, or budget revenues.’’ 

As a representative from a State that has not expanded Medicaid, in North Carolina, I have two questions. Given that this 

would crowd out other important fiscal priorities for both State and 

Federal Government, don’t you think that there are changes that 

need to be made to the program to alter this current trend? 

Ms. WACHINO. Congresswoman Ellmers, thank you for the question. We have worked very actively to ensure that the program is 

on a sound fiscal footing—— 

Mrs. ELLMERS. Um-hum. 

Ms. WACHINO [continuing]. Generally, and, you know, with respect to expansion in particular. I think we have put in commonsense reforms to ensure accountability of funds through—— 

Mrs. ELLMERS. Um-hum. 

Ms. WACHINO [continuing]. Activities like reviewing our rates 

and ensuring that we are not overpaying for services. I think, in 

addition to that, you see from the administration proposals like 

changes to the drug rebate that are designed to ensure that some 

of the major cost drivers in our program are addressed. So I think 

we can work, and we do work, and we look forward to working with 

you for really—— 

Mrs. ELLMERS. Um-hum. 

Ms. WACHINO [continuing]. Putting the program on a sound fiscal 

footing. 

Mrs. ELLMERS. Well, thank you for that. I would like to ask, have 

these changes, or proposed changes, resulted in any decreases in 

spending up to this point? 

Ms. WACHINO. We do know in some States that have embarked 

on delivery system reform that there have been reductions in 

things like hospitalizations—— 

Mrs. ELLMERS. Um-hum. 

Ms. WACHINO [continuing]. That have resulted in cost savings. 

There are a couple of—— 

Mrs. ELLMERS. How many States would you say that is? 

Ms. WACHINO. I think I can give you some State examples. The 

actual models used by States vary. States have significant flexibility in using things like health homes, the way—— 

Mrs. ELLMERS. Um-hum. 

Ms. WACHINO [continuing]. Missouri did—— 

Mrs. ELLMERS. Um-hum. 

Ms. WACHINO [continuing]. Where they saw improvements in 

clinical outcomes and reductions in costs. 

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Mrs. ELLMERS. OK. 

Ms. WACHINO. So I can give you the examples of models that 

have worked. 

Mrs. ELLMERS. OK. Ms. Yocom, would you like to expand on that 

as well, or comment on the same from your perspective? 

Ms. YOCOM. Well, our work has focused primarily on areas where 

transparency and better data are important. 

Mrs. ELLMERS. Um-hum. 

Ms. YOCOM. I think some of CMS’ challenges are around not having accurate information with which to gauge the success of the 

program, and to gauge—to fine tune—where improvements need to 

be made. 

Mrs. ELLMERS. Um-hum. So you see an effort for more transparency and more efficiency and accuracy to be moving forward? 

Ms. YOCOM. I think we have seen progress, particularly in efforts 

to control—— 

Mrs. ELLMERS. Um-hum. 

Ms. YOCOM [continuing]. Improper payments. There—— 

Mrs. ELLMERS. So you have seen progress in that area? 

Ms. YOCOM. Right. 

Mrs. ELLMERS. OK. Great. Ms. Wachino, CMS authorized Federal Medicaid funding in five States for more than 150 State programs. Based on their names, many of these programs appear to 

be fully worthwhile causes. However, it is difficult to see how other 

funded programs promote Medicaid objectives. Let me ask just a 

few questions. There are a couple States—and I asked Ms. Iritani, 

when she was with us a couple of days ago—one of these issues, 

the licensing fees for Oregon, how does that affect patient care in 

regard to Medicaid? Do you see that as a worthwhile funding issue? 

Ms. WACHINO. Congresswoman, it is really important to us that 

we ensure that the spending we authorize promotes Medicaid objectives. As I had the opportunity to speak to earlier this morning, we 

have fully responded to many of GAO’s recommendations, in terms 

of wanting to be very clear and straightforward in our approval 

documents when we determine that a program supports Medicaid 

objectives. I can’t speak to the particulars of every program, but I 

do know that my staff has provided to the committee extensive detail on the programs we—— 

Mrs. ELLMERS. OK. Well, then, what I will just say, the licensing 

fees in Oregon, the fishermen’s partnership in Massachusetts, and 

the health workforce retaining in New York, if I can get a response 

on how those actually are effective measures, that would be great, 

and I would appreciate it in writing. Thank you. 

Ms. WACHINO. I would be happy to do—— 

Mrs. ELLMERS. And I will yield back, and I now recognize Ms. 

Schakowsky from Illinois for 5 minutes. 

Ms. SCHAKOWSKY. [Inaudible.] 

Ms. WACHINO. Yes, thank you for the question. As you spoke to, 

Medicaid is the Nation’s leading source of financing for long-term 

care in the country. We pay for 64 percent of all nursing home residents in the United States, and we work very actively with States 

to ensure the quality of nursing home care. Because these are, as 

you know, very frail—some of the Nation’s frailest residents and 

citizens, people who could have limited mobility, and a lot of comVerDate Mar 15 2010 10:48 Feb 23, 2016 Jkt 037690 PO 00000 Frm 00097 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X63MEDICAID50PARTBREQ022216\114X63MEDICAID50PENDI
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plex health needs. We are working not just to ensure quality nursing home care, but also ensuring that people, whenever they are 

able to, are able to be cared for at homes and in their communities, 

to really remain active participants in their communities. 

Ms. SCHAKOWSKY. I wanted to ask about that. One of the most 

important elements of long-term care has been community-based 

care, and that does allow many elderly and disabled to remain in 

their home, or in assisted living facilities, rather than in institutions. In recent years CMS has worked to reduce its reliance on institutional care and transition individuals to community living. In 

fact, as you have mentioned earlier today, 51 percent of long-term 

care spending under Medicaid is spent on community-based services, compared to 10 years ago, when community-based services 

only made up 33 percent of spending. 

So why is it important, as you just said earlier, it—that community-based care be available to Medicaid beneficiaries? 

Ms. WACHINO. We hear consistently from beneficiaries that they 

want to remain in their communities, they want to remain active, 

and they want to remain with their families as much as possible. 

And we are lucky to have a number of tools in the Medicaid program to help support that. Things like home and community-based 

waivers, and giving beneficiaries the ability to self-direct their care, 

to hire their direct service workers, and to fire their direct care 

service workers if they are not happy. And if you look across the 

States, we see nearly every State is moving forward with some option. 

But the proof is in the pudding, as you say, and seeing the 

equalization of spending on institutional care versus home, community-based care is a very major advance in modernization in our 

program, and we are going to keep at it, and move the needle further. 

Ms. SCHAKOWSKY. All right. And, finally, as you mentioned in 

your testimony, since the beginning of ACA’s first enrollment period, 12.3 million people have gained coverage through Medicaid or 

CHIP. According to The Urban Institute, the current uninsured 

rate nationwide for nonelderly adults is 10 percent down—10 percent, which is down from 17.8 percent, before the implementation 

of the ACA. Even more impressive, States have expanded Medicaid—that have expanded Medicaid have an uninsured rate of 7.5 

percent compared to 14.4 percent in States that have not expanded 

Medicaid. Can you explain how Medicaid expansion helped to drastically reduce the uninsured rate? 

Ms. WACHINO. Well, I think we know that many low-income 

Americans fall into the coverage gap that is created when States 

have expanded Medicaid, and one of the things that we can do as 

a country to make further advances in covering the uninsured, and 

to see even progress beyond what you have just described is to 

work with States on Medicaid expansion. And we are very committed to working with every State to finding an approach that 

provides its lowest-income citizens access to needed health care so 

we could start improving their quality, and so that those people 

can benefit. 

Ms. SCHAKOWSKY. It seems to me the Medicaid expansion, because it was so public, also helped other enrollment, that people beVerDate Mar 15 2010 10:48 Feb 23, 2016 Jkt 037690 PO 00000 Frm 00098 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X63MEDICAID50PARTBREQ022216\114X63MEDICAID50PENDI
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came more aware of Medicaid, so I think it even went beyond the 

new population. 

Ms. WACHINO. That is right. The benefits of expansion go beyond 

the newly eligible population because States that cover Medicaid 

expansion are able to convey a clear message to their lowest-income residents that you are eligible for coverage. And we know 

that when there is that message, eligible people come and enroll, 

and get the health care they need. 

Ms. SCHAKOWSKY. Thank you so much. I yield back. 

Mrs. ELLMERS. The gentlelady yields back. And, with that, I 

think we are finishing up. I would like to thank our panel for being 

with us today. I would like to remind members that they have 10 

business days to submit questions for the record. And I will say to 

the panel, I know there are some very, very specific questions that 

members are going to be proposing in written form, and we would 

very much like to have very specific answers to these questions. 

You know, as we are addressing Medicaid and Medicare issues, we 

have to remember that these are taxpayer dollars that we are 

spending, and so we need very specific answers on those questions, 

and in a prompt fashion, if you can accommodate us on that. 

I would like to also say members should submit their questions 

by the close of business Wednesday, July 22. And, again, thank you 

very much for being with us today, and to everyone who was here 

for the hearing. And I call this subcommittee hearing adjourned. 

[Whereupon, at 12:33 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. G.K. BUTTERFIELD

Chairman Pitts, thank you for holding this hearing to commemorate the 50th anniversary of Medicaid and to discuss improving health care for vulnerable populations. More than one out of every four people in the eastern North Carolina district I represent live in poverty—it is one of the poorest Congressional districts in 

the country. Even more alarming is the fact that more than 40 percent of the children in North Carolina’s First District live in poverty. Medicaid is absolutely critical 

to my constituents. It is especially important to children, since 75 percent of children who live in poverty in this country depend on Medicaid. The benefits of Medicaid cannot be overstated—more than 71 million Americans rely on this program. 

Democrats on this committee have done our part to strengthen Medicaid for millions of Americans. Many of us here today helped author the Affordable Care Act, 

which has helped reduce the number of uninsured Americans by 17 million due in 

large part to Federal support to expand Medicaid. 

But many States—like my home of North Carolina—have declined to expand Medicaid. According to the North Carolina Justice Center, an additional 500,000 North 

Carolinians would be eligible for Medicaid if our Governor would expand the program. My State’s Governor has blocked more than $2.7 billion in Federal funds that 

North Carolinians have paid taxes for and rightly deserve. In fact, the North Carolina Justice Center estimates that 43,000 jobs would be created in 5 years if our 

State would expand Medicaid. 

The ACA represents the largest step forward for Medicaid since the program’s inception. Improved transparency, additional safeguards against fraud and abuse, and 

delivery system reforms have benefitted constituents and saved money. But our 

work is far from done. I will continue to fight to expand Medicaid in each and every 

State. 

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Ms. Wachino’s response to submitted questions for the record has 

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