2005 Hurricane Season

U.S. Department of Health and Human Services
Teleconference re Texas Response
Thursday, September 15, 2005

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MS. HENNEGHAN: [In progress] --and CMMS administrator, Dr. Mark McClellan. They are going to do some brief remarks and then we will open it up to questions.

Secretary Leavitt?

SECRETARY LEAVITT: Thank you. Within hours of evacuations beginning out of New Orleans, the need for shelters and health care became evident. Texas responded as a state, from the governor through his entire administration through all of the municipal governments, there was never a question of if they would respond. They immediately moved into action.

I had occasion, as many others did, to see the result of their work. In Houston I saw both shelters and, essentially, full tertiary hospitals that came together in convention centers and the Astrodome and many other places throughout that city, remarkable medical facilities.

In Houston while I was there on one of my visits, I saw a hospital that was functioning with the rhythm of a major city emergency room processing hundreds of patients per hour, giving them care in a way that demonstrated their abilities as a community. At one point they pulled back a drape and there were 50 computers. I asked what they were being used for. They said, We have connected them into our hospital authority and they are creating electronic medical records.

I walked a few yards more and saw a large mobile building that had been moved into another portion of the center. It had the company Siemens on the side. It was a mobile display that had laboratory equipment with state-of-the-art laboratory equipment. Within 48 hours, they had put electronic medical records into place, they were using state-of-the-art laboratory equipment, and they were sending the lab results to the hospitals electronically, having it interpreted, and moving back to the center where they were included in the electronic medical record.

I saw similar things happening in Dallas, where I saw full areas for mental health treatment, where I saw special areas for children set up. I saw the head of various hospital departments working side-by-side with medical students. I saw the head nurse at one hospital working with a volunteer from another state.

In San Antonio I saw a similar display of work, where they had nearly 20,000 evacuees, all who had been traumatized with a story that demonstrates the difficulty they were in.

The response from the State of Texas was compassionate, it was competent, and it was quick. There was never a question about who will pay for all of this; it was how do we care for people in need.

Today we are very pleased to be announcing the fact that we have reached an agreement on waivers necessary to the Medicaid program in the State of Texas to assure that not only was immediate and life-saving service provided to thousands of people from neighboring states, but that it was done in a way that will not disadvantage the State of Texas because of their compassion. This is consistent with the President's vision to assure that that is the case.

I would like to ask Mark McClellan, who heads the Center for Medicaid and Medicare Services, to describe the arrangement, and then we can respond to questions.

MR. McCLELLAN: Thank you, Mr. Secretary.

As the Secretary said, health professionals, volunteers, and everyone in the community, in fact, has stepped up immediately to provide to the large number of evacuees coming in from Louisiana and other affected areas. As a Texan myself, I have known many of the health care providers for many years, many of the people involved. I have to say, I am impressed but not surprised by the response.

Our action today fits with this kind of immediate response. The best and fastest way to provide help to evacuees is to support the state programs in place and support the local health care providers already in place, not to take time to build major new systems. We need to provide relief and support for helping people get back on their feet right now. The approach of this program is to do that, to make sure that the needs of people continue to come first and that Texas and other affected states are made whole.

The waiver establishes a new temporary eligibility category for evacuees from the states that were impacted by Hurricane Katrina. Under this program, Texas will provide temporary eligibility for five months of Medicaid or SCHIP coverage to evacuees who are parents, pregnant women, children under age 19, people with disabilities, low-income Medicare recipients, and low-income individuals who need long-term care. The specific list of types of individuals who are eligible are included in a table attached to the fact sheet that each of you should have.

I want to emphasize that the people who are eligible for this program include not only people who would be eligible for Medicaid or SCHIP in their home states before the hurricane. The application process is also available to evacuees who are newly eligible because they lost their incomes and assets. They've had significant changes in their economic circumstances.

Under this program, people can register for Medicaid or SCHIP without many of the traditional administrative requirements for verification enrollment, because that is the real situation on the ground. There is a simplified application process that normal documentation requirements for verification of Medicaid or SCHIP eligibility have been waived. Consequently, we expect many people to be eligible and to be able to get through this eligibility determination process easily even if they wouldn't have been eligible before the hurricane and don't have the usual kinds of documentation required for Medicaid or SCHIP determination.

The program will extend the Texas Medicaid and SCHIP benefits to the evacuees. Texas will be waiving cost-sharing for the evacuees and will also be including some additional benefits that evacuees are particularly likely to need, such as some additional mental health services and additional mental health benefits.

In addition, the program sets up an uncompensated care pool for Texas within the waiver. This pool has also been established for a period of five months. It will reimburse providers directly for uncompensated care given to evacuees who need services and don't have other coverage through existing programs. The pool will also be used by Texas to work with us to find ways to help people to get into private insurance and other coverage arrangements on their own as they get back on their feet.

For the administration of this program, both Medicaid and SCHIP eligibility categories and uncompensated care pool, Texas will send to us the full cost of providing care under the waiver as re as part of their cost reports and we'll factor that into our payments so that Texas is made whole for the costs of care incurred for evacuees from Louisiana, Mississippi, the States directly impacted by the hurricane. And, of course, as the President said, we are going to continue to work with Congress to assist those home States with the added burdens of health care and other costs that they are facing as a result of the hurricane.

We are going to build on this template in other States. We are also releasing today a model template for other States to provide similar waivers and the Secretary may have a point to add on that, as he is going to be sending a letter to the Governors notifying them about this program. Already in many States that have been most impacted, our staff has already been working with the State officials to establish similar programs, again with the goal of providing immediate help to the people who need it and making the affected State whole for the costs that they incur.

Texas was an important place to start because of the very large number of evacuees who are getting care there. Again, from what we've seen there on the ground, when you need help getting back on your feet, there is no better neighbor than a Texan and we are building on the existing support system to make sure that Texas is made whole for all of these efforts.

SECRETARY LEAVITT: This is Mike Leavitt again. I'll just add a couple of other points.

The first one is, this disaster, of course, is unique because of its size, but also because those who are affected have now dispersed into literally dozens of other States. In fact, we have evidence of evacuees being in almost all 48 of the States, or actually all 50 of the--all 48 of the other States. We will deal with each of the other States in a similar way. We are now reaching out to them.

The second point I want to make is that while this is assuring that the generosity and compassion of Texas, and the other States by extension, will not disadvantage them financially, it should also be pointed out what an important step toward recovery it is for Louisiana, Mississippi, and Alabama. Under normal protocol, in absence of this waiver, those States who received the evacuees would be billing Louisiana, Mississippi, and Alabama for the costs that they incur. So the real financial assistance here is not to Texas, who is simply being made whole for their efforts. It's to those who are in--to those affected States.

Now, I would also like to make clear that we believe that many of the costs that will begin to be attributed to this disaster will be in the area of mental health. This approach will allow the States who have limited mental health to supplement it through our uncompensated Care Pool.

Doctors have told me that typically in a disaster of this nature, three or four weeks out, it all begins to mount up for those who have been evacuated and the stress of this begins to take its toll, and we are being particularly vigilant on that point. Not only are we assisting with this payment mechanism, but we're deploying teams throughout the affected region and into other States to assure that those who have needs receive them, particularly children. We are working with school systems to provide the kind of back-up support that some of the affected States, those affected directly by the disaster and those affected because of the evacuees, that they have sufficient resources to meet those demands.

I think that concludes our formal remarks. We'd, I think, now receive questions.

OPERATOR: Thank you very much.

Participants, if you have a question at this time, simply press star-one on your telephone touch pad. You will be prompted to record your name at that time. To cancel your question, simply press star-two, but do not hang up. Once again, that is star-one to ask a question and star-two to cancel. Please stand by while our questions register.

Our first question today comes from Sarah Leek of the Wall Street Journal.

QUESTION: Hi. Thank you for having us call. I apologize, I haven't seen the fact sheet yet, so I apologize if I'm asking a question I should already know the answer to, but I was curious for more information about the uncompensated care pool. Is it just for Texas? Is it something you're doing nationally? How much money is in the pool and how are you going to sort of dole out that money?

MR. McCLELLAN: Again, the waiver for Texas includes two components. One is a special category of Medicaid eligibility for children and families with limited income who have been impacted by the hurricane and are evacuees from the hurricane areas. A second category is an uncompensated care pool for services that aren't included in the Medicaid package or for people who do not have other sources of payments, Medicaid or private insurance, so that they can get the care they need.

We have worked first with Texas. This is the State that has the largest influx of evacuees. But we have also released today a template, a model version of this waiver approach for any and all States to use. As the Secretary mentioned, there are evacuees in every part of the country now. Many States have larger burdens than others, so this is a more urgent issue for some States than others, but our staff is already working with and stands ready to work with every State that wants to adopt a similar kind of approach.

QUESTION: Where does the money in the uncompensated care pool come from? Is it HHS funds or--

MR. McCLELLAN: Yes. This is part of the--this is part of the demonstration program to make sure that we are addressing any substantial additional cost beyond the Medicaid cost for evacuees who are eligible for Medicaid.

QUESTION: Could you talk at all a little bit about what the administration's view is of any of the legislative proposals out there on the table, for example, the bipartisan package that Grassley and Baucus are working on in the Senate?

SECRETARY LEAVITT: We have worked closely with the State of Texas on the basis that they wanted to assure that their costs were covered and that needs were met. This represents an agreement that has been accomplished.

QUESTION: Does that mean you don't think there needs to be legislation?

MR. McCLELLAN: Well, I think the States' own view is that because their health care costs are being addressed through this approach, they are getting their health care needs met. That's Texas's own view. Now, we'll obviously keep a close eye on the situation and make sure we're addressing it effectively for the--going forward, but Texas's own view is that this approach is meeting their needs.

MR. McCLELLAN: Next question?

OPERATOR: Thank you. Our next question comes from Julie Rogner of National Public Radio.

QUESTION: Hi, and thank you for the call. I just want to clarify two things. First of all, the people who will be eligible under this new category are basically the people who are categorically eligible for Medicaid now, is that correct?

MR. McCLELLAN: That's right. That includes children and families with limited income, but remember, many of the evacuees may not have been eligible before because they had jobs, they had homes, they had other assets. Many of them are without those means right now, and they are eligible under the simplified application process that does not require either substantial documentation or proof of former income or lack of it.

QUESTION: But non-disabled childless adults wouldn't--would presumably get care through this demonstration program, through the uncompensated care pool.

MR. McCLELLAN: They would get care exactly as they're getting it now and exactly as they've been getting it from day one in Texas and in the other affected States that have responded to provided needed health care for people who aren't in the Medicaid program. Texas does not have a category of Medicaid for childless adults and they have stepped up with existing systems to provide the care and we are going to use those same existing systems to provide immediate relief for its costs.

QUESTION: And you're--let me--I want to make sure I have the funding straight. You can't--you can't actually--you can do the 100 percent of the administrative costs. You can't change the FMAP, right, so in lieu of that, you're going to put the money into this uncompensated care pool that would basically equal what they think the FMAP is going to be for--

MR. McCLELLAN: Let me be clear about this. We are asking Texas and the other States that set up a similar waiver to send us the full cost of the program. These are evacuees from Louisiana and Mississippi, from areas directly impacted by the hurricane. They are not beneficiaries who should count against the cost of the host State where they now reside. As Secretary Leavitt said, as part of our overall response effort, we are also going to make sure to support Louisiana and Mississippi directly for their added burdens. But under the way that we structured this waiver, Texas will be made whole for the cost that it incurs.

QUESTION: And can I re-ask Sarah's question? How much money is in that pool?

MR. McCLELLAN: We've been talking with the State about the magnitude of the need. Texas does not yet have a firm number either for the evacuees who are being served or the magnitude of the services provided. The estimates in Texas now are around 200,000 or more registered evacuees. There may be more people than that who need services. The main thing that we are focusing on is that people get the care that they need. Since day one, health care providers in Texas have responded and we're providing a mechanism to meet those costs.

I'll be traveling to Texas shortly to follow up on details like this to make sure that we do get a handle on the number of people served and the types of services as quickly as possible, but this is a program that's available to meet all of those needs.

SECRETARY LEAVITT: The term uncompensated care pool implies that there is a sum certain being placed into an account. That isn't the case. We're essentially defining the fact that we will reimburse Texas for costs incurred for the five-month period that will lead us up to the end of January.

QUESTION: Okay, thanks.

OPERATOR: Thank you. Our next question comes from Susan Denzer, the News Hour for PBS.

QUESTION: Just a technical question here on what happens in the case of Medicaid-eligibles who have been displaced now from Louisiana, Mississippi, who are in Texas? Do those states lose those people as Medicaid and part of their FMAP calculations, and did those move over to Texas? How are you going to work all of that out?

MR. McCLELLAN: If you were eligible for Medicaid in Louisiana or Mississippi, you would be eligible under this new program. We will continue to consider the evacuees residents of their home states for purposes of this program. And as I said, we are going to make sure that Louisiana and Mississippi get the support they need for paying for the additional health care and other costs that have resulted from the disaster.

QUESTION: And just and additional question, since you've developed sort of template waiver language now for other states, why--out of curiosity--aren't some other arrangements being announced for other states today with numbers of evacuees, for example, Arkansas and others?

MR. McCLELLAN: Well, we're in the midst of discussing this same kind of approach with all of those other states who are interested. Certainly we've been in discussions with states, like Arkansas, that have a significant number of evacuees, and I would expect more programs like this to be announced soon based on those discussions. But the Secretary wanted to make very clear that this program is available to any state that needs support in the care that they provide to evacuees.

SECRETARY LEAVITT: In addition to the State of Texas, I've met personally with the governors of many of the other affected states and had telephone conversations with others. There is obviously a need here and we will work through it one state at a time. But this obviously lays out both the principles and the specifics that will follow. The others will move rapidly from here.

OPERATOR: Thank you. Our next question comes from Shankar Vedantam with the Washington Post.

QUESTION: Hi. Thank you for taking my question.

We have all heard estimates on the number of evacuees and the number of children who are evacuees and so forth. I think it was Mr. McClellan who just said that Texas does yet have hard numbers of the number of evacuees being served. And I was wondering, as you're trying to gauge the amount of money and resources that you will need and as you're ramping up, does the federal government as yet have hard numbers--not estimates, but hard numbers that are guiding the scope of your efforts? Do you know, for instance, how many evacuees are recipients of Medicaid? And perhaps at a more basic level, do we know how many evacuees there were total?

SECRETARY LEAVITT: I have been in all of the states that were affected, several times, and numerous of the states who have received evacuees, many times. I think I can say with some certainty that we are not at a steady state yet. People are moving around. They may have been evacuated to Houston, stayed there for a couple of days, and then made contact with a relative in Michigan and moved to Michigan, where they're staying in someone's spare bedroom. Others have evacuated further north or further west and then, as things cleared up, have moved back into a place in the Lafayette or Monroe or Shreveport area.

So people are still moving. There are numbers that have estimates of how many have, for example, registered with FEMA. There are other estimates, but no hard numbers. It's a very difficult nor to tie down.

QUESTION: So from the point of view of the federal government, as you are planning to ramp up, how do you know how much to ramp up to?

SECRETARY LEAVITT: Well, that's the reason we've taken the approach we have, for example, on the uncompensated care pool. We don't know how many exactly will be served by this and so we have simply said people who fall into this category will have their care covered. And then we've used a date as a time in which to create boundaries and to provide shape. But we recognize that people may go from state to state for a time while they resolve their own circumstances. This is a moment where many families are having to think strategically about the rest of their life, and our purpose is to help them get back on their feet wherever they determine home is.

MR. McCLELLAN: And we have the resources and the commitment to meet these needs. Not all the evacuees are going to need help with their health care costs. Many are already going on to get jobs, at least temporary jobs, and start to get on with their lives, getting basic health care coverage, really starting to recover. What we are going to do is to make sure that for those who need temporary help while they're in this transitional period, they can get it.

QUESTION: And would FEMA still be the agency in charge of trying to get those hard numbers, or is it distributed across the federal government?

SECRETARY LEAVITT: Well, we're after different--we're tracking different numbers. FEMA is responsible for determining those who have registered with FEMA and that is likely the best estimate of how many there are. But even that number is not complete because not every has yet registered. So it's a difficult thing to say from day to day how many there are or where they are, because people are moving and trying to resettle their lives.

MR. McCLELLAN: As this program gets under way, we will be getting more hard data from the states on Medicaid enrollment, on other uncompensated care costs and the number of people served. So at least for that aspect of understanding the evacuee population and where it's headed, this program will help us get more and better data.

SECRETARY LEAVITT: I might add that Medicaid is unique in that it is funded by the federal government in large measure, but administered by the states. There's a significant suite of other programs, such as TANF, food stamps, childcare, et cetera, that are financed and managed in a similar way. We will be announcing at some point soon a different vehicle, but the same principle being used, to deal with those services.

MS. HENNEGHAN: We have time for one more question.

OPERATOR: Thank you. Our next question, then, comes from Kristen Hallum of Bloomberg News.

QUESTION: I've always wanted to get the last question.

Thank you for having this call. I was wondering if you could explain how this works on the provider end. Does the hospital or doctor, have they been billing the state, and how does that work from their end?

Also, if you could explain why you're taking a two-pronged approach--Medicaid and uninsured pool--and why not just create another category within Medicaid that would sort of be a catch-all category?

MR. McCLELLAN: Sure. In terms of billing for the uncompensated care, the fact is that from the first day there have been a lot of people coming to Texas, getting care, who are not categorically eligible for Medicaid. The state has in place systems for getting bills from providers for the Medicaid program and other programs, including existing uncompensated care programs. We are going to rely on those existing systems. That's why this program can be up and running right now, as soon as we sign the waiver.

And that goes to your second question as well. Texas does not have a categorical eligibility program for childless adults. They have other programs in place to help those individuals get the care they need and help provide financing for it. We are going to build right on those programs so that we do not need to take the time and effort to create new systems for coverage that don't exist right now for the people who need help right now.

MS. HENNEGHAN: Great. I think that is all the time we have. We appreciate everyone joining us today. That will conclude our call.

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