COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES HEALTH COMMITTEE ROOM 2 05 RYAN OFFICE BUILDING TUESDAY, JUNE 21, 2011 9:30 A.M. PUBLIC HEARING ON HOUSE BILL 1480 - THE HEALTHCHOICES ACT BEFORE: HONORABLE MATTHEW BAKER, CHAIRMAN HONORABLE JOHN MYERS, CHAIRMAN HONORABLE RYAN AUMENT HONORABLE KERRY BENNINGHOFF HONORABLE MARTIN CAUSER HONORABLE BRYAN CUTLER HONORABLE GARY DAY HONORABLE MAUREE GINGRICH HONORABLE JOHN LAWRENCE HONORABLE DAVID MALONEY HONORABLE KURT MASSER HONORABLE SCOTT PETRI HONORABLE MARCY TOEPEL HONORABLE TARAH TOOHIL HONORABLE KEVIN BOYLE HONORABLE VANESSA BROWN HONORABLE MARK COHEN HONORABLE PAMELA DELISSIO HONORABLE JOHN SABATINA HONORABLE KEN SMITH HONORABLE RONALD WATERS SONYA A. HOFFMAN REPORTER - NOTARY PUBLIC I N D E X NAME MICHAEL ROSENSTEIN, Pennsylvania Coalition of Medical Assistance MCOs 5 PAULA BUSSARD, SENIOR VICE PRESIDENT, Policy and Regulatory Services The Hospital & Healthsystem Association of Pennsylvania 36 RONALD BUTLER, PRESIDENT and CEO Laurel Health System, Tioga County 41 KYLE FISHER Pennsylvania Health Law Project . .51 P R O C E E D I N G S CHAIRMAN BAKER: Good morning, everyone. The hour of 9:30 having arrived, the Health Committee hearing will commence. I appreciate all the members coming together this morning to discuss House Bill 1480, The HealthChoices Act legislation that's been proffered by Representative Peifer. And this is a hearing. We've allowed an hour, hour and a half, if necessary. I doubt if it will take that long, but we'll see. I will at this time allow and welcome really Representative Peifer to make some introductory remarks about the Bill and then we'll start the hearing. Welcome. REPRESENTATIVE PEIFER: Thank you, Mr. Chairman. It's an honor to be here today. I appreciate you holding this hearing on the expansion of the MCOs across the Commonwealth, as was something in the 1977 plan for the expansion to the whole — whole state. And obviously, there's -- you know, Medicaid is -- is the country's medical care for some of the poorest and extremely disadvantaged people of our country, and obviously for the citizens of Pennsylvania. The issue really has to do with access to a quality healthcare, and, obviously, the cost containment of this healthcare. I really think this legislation stems from -- I want to get the proper wordage -- the Federal Patient Protection and Affordable Care Act of the Federal Government. Now, we have enrollees, we have the Federal government, we have State government, we have doctors, we have hospitals, and we have quality care. And we really need to bring all these entities, individuals, governments together to try to find out the best possible solution. And I realize that that's not easy and it is complex, so I appreciate you holding this hearing today. I look forward to the number of people who are going to testify, and there are many experts. And I'd really like to listen to their concerns as far as the proper way to go. The expansion, as far as numbers, hundreds of thousands of people could be included in those rolls, the Medicaid rolls here in the Commonwealth, which directly affects us. So we've got to try to find out the most -- the proper way from a cost containment, and then, like I said, quality and access of care way of providing the best service that we can. So that's what we're here about today, Mr. Chairman. And I appreciate you giving me the opportunity to say a few words. Thank you. CHAIRMAN BAKER: Thank you, Representative Peifer. As members recall, we have had an informational meeting previously on this issue and this concept. Since then, we've received lots of comments, questions, concerns from all around the Commonwealth; from individual hospitals, from the Hospital Associates of Pennsylvania, and the MCOs, both collectively and individually, that have come to my office. So I think it's appropriate we have a little vetting process, informational process and follow up to that informational meeting that we had earlier. And at this time, I'd like to welcome Michael Rosenstein for his testimony. He represents the Coalition of Medical Assistance MCOs. Good to see you, Michael; welcome. MR. ROSENSTEIN: Thank you, Mr. Chairman. Mr. Chairman, Members of the Health Committee, Representative Peifer, I thank you all for the privilege of appearing before you on behalf of the Coalition of Medical Assistance Managed Care Organizations. In speaking regarding this proposal to expand HealthChoices in Pennsylvania, I represent the Coalition, which consists of AmeriHealth, Mercy Health Plan, Gateway Health Plan, HealthAmerica of Pennsylvania, HealthPartners, Keystone Mercy Health Plan, UnitedHealthcare of Pennsylvania and UPMC for You. I would like to present a brief background, followed by a discussion of access, quality, special needs and the cost effectiveness of the HealthChoices program today; many of the items that Representative Peifer, in his statement, alluded to. Historically, this Legislature has had major concerns regarding the cost, quality and access healthcare for our citizens unable to afford that care; primarily, the aged, the disabled and children. The Medical Assistance program was created by Congress and implemented at the State level to assure citizens were not deprived of necessary healthcare services in order to sustain and enhance their lives. The late Governor Bob Casey, with the support of the General Assembly, designed the HealthChoices Managed Care Program. And it was former Governor Tom Ridge who began to phase implementation of the program. This program of capitated managed care has consistently received the support of each of the four legislative caucuses, even during the past eight years when the executive created challenges for this delivery system, and we thank you. The mandatory managed care program by zones, the HealthChoices program, started in the southeast in 1997 and has been successfully phased into the southwest and the Lehigh/Capital zones. The question before you is should this program be expanded to additional zones and Statewide? Although, it is tempting for me to make the argument for statewide managed care exclusively based on the extraordinary cost savings this program has provided to the taxpayers of this Commonwealth, I prefer to brief you on a couple of additional reasons that are also compelling for the expansion of the HealthChoices program. First, impoverished citizens in need of health services have had extraordinary challenges in gaining access to the healthcare system. Some providers, due to low payments and delayed payments by the Department of Public Welfare, have had access problems and have been unable to get the care in some areas, or it has been extraordinarily difficult for them to gain access to healthcare. Managed care organizations provide full staffed provider relations departments, and provide training and education to both providers and to recipients. This ongoing process is not a once and gone. In many instances, we pay higher rates than the fee for service system and we always, always make timely payments. We assist recipients and locate providers and ease the access of gaining appointments when necessary. Where barriers, due to culture, language, or for whatever reasons, exist, we assure that adequate healthcare services are provided. Our emphasis often changes the incentives in the healthcare system to promote preventative primary care leading to healthier lifestyles, early intervention and screenings. In addition to access, our plans uniformly adhere to high-quality standards. We use extensive quality measurements to gain feedback and implement health-improvement strategies. Our plans are among the highest ranked by the National Commission on Quality Assurance, whose standards include on-site reviews of clinical and administrative processes for accreditation; HEDIS measurements for performance, including but not limited to, immunization and mammography screening rates. We do comprehensive surveys of recipients that are undertaken to assure consumer satisfaction in our competitive markets, which is all of our markets. Each of our managed care organizations have quality improvement plans and invest in areas such as enhanced pediatric care, women's health, diabetes, asthma, HIV, chronic obstructive pulmonary disease, as well as congestive heart failure programs. While talking about access and quality, it is especially important that we spend a moment focusing on those citizens with special needs. Case managers are available to our clients. Our plans invest in identification and screening for these individuals to assure appropriate services are provided. We analyze pharmaceutical and other claims data so that we might coordinate care through our integrated service structure and through case management. In the most difficult services for the most difficult clients, we assure the provision of service is needed and the special needs population get the benefit of those services. Finally, I must talk about cost effectiveness of the managed care system. As you know, we have competition within each of our regions, which require that we provide quality, accountability, access and cost containment. The managed care organization bears the full risk, thereby protecting the Commonwealth and Her taxpayers. The predictable funding provided by a managed care has made difficult -- a difficult task of balancing your State budget considerably easier. I didn't say easy, but easier. As many of the more senior members of this Committee might recall, huge deficiencies in the Medical Assistance budget used to be the norm. When the programs lack stability, ends predictability. Now, the MCO bears the risk, not the taxpayers. Supplemental appropriations are solely the result of the eligibility increases; not as it once was, the increases in the volume of service or the cost of the services provided. The Lewin Group, a nationally recognized health research organization found that taxpayers have saved over $5 billion as a result of managed care in the last 11 years; $5 billion in Pennsylvania. These savings will grow to an additional $2.9 billion over the next five years according to the Lewin projections.