Medicaid director King-Young testifies before the Senate

Pago Pago, AMERICAN SAMOA — Medicaid Director Sandra King-Young testified before the Senate Health Committee yesterday, detailing her plans for administering Medicaid services, in particular, the off-island medical referral program, which will be reactivated next Tuesday, October 1st, aligning with the start of the new fiscal year, which means local matching funds will once again be available.

Senators’ concerns arise from the suspension of Medicaid services on March 1st this year, following the depletion of local matching funds at the end of the second quarter of FY 2024.

In a memo to top government leadership in January this year, the Medicaid Director requested financial assistance.

“To bridge the funding gap and to continue Medicaid programs until the end of the fiscal year (September 30, 2024), I respectfully submit this request for an additional $6 million for a supplemental appropriation,"  King-Young stated.

“The increase is an inherent consequence of expansion of Medicaid services and the return to normal with fully open borders post COVID. We are experiencing a steady and increased use of Medicaid benefits especially in the off-island medical referral program.”

Unfortunately, the government could not fulfill her request, leading to the suspension of Medicaid services since then.

However, the request was granted during the FY 2025 budget review hearing of the Senate Budget & Appropriations Committee, when the senators agreed to earmark $6 million specifically for Medicaid.

Senator Magalei Logovi’i, who chaired the hearing in the absence of Chairman Senator Utu Sila Poasa, who is off-island, stated that by earmarking the Medicaid funds, the Fono is signaling that the government should allocate this money. This way, the public cannot hold the Fono responsible if the governor decides to veto the funds.

During yesterday’s hearing, Senator Malaepule Moliga emphasized that the Senate has fulfilled its responsibility by securing $6 million for Medicaid matching funds. He urged the Medicaid Director to administer the off-island medical referral program with fairness, transparency, and accountability, ensuring no favoritism.

Senator Malaepule expressed that he views this funding as the 38th Legislature’s contribution to the people of American Samoa, who urgently need specialized medical treatment unavailable on-island.

He also conveyed his hope that the governor will approve the FY 2025 Budget and extended his best wishes to the Medicaid Director and her staff in their service to the public.

Senator Magalei echoed these sentiments, reiterating that the Senate has gone above and beyond to secure the necessary matching funds. He emphasized that they are placing their trust in the Medicaid Director and her staff to act in the best interests of the people of the territory.

The mood shifted considerably when Senator Togiola Tulafono questioned Director King-Young.

He inquired about the plan for utilizing the $6 million, expressing concern that the funds might be diverted to administrative costs and staff salaries instead of their intended purpose.

Director King-Young clarified that for FY 2025, their office will receive $102 million in federal funds, accessible with a local match of $6 million.

She emphasized that the $6 million is strictly for patient medical care and cannot be used for any other purpose.

“It is very clear in the law and how we operate the program,” she explained. “The $6 million is only for medical care. We cannot use it for administrative purposes or any other purpose. We cannot pay any medical bills unless the local match is paid first, then we can draw the federal funds to cover the rest of the bill.”

She added that their budget for administrative costs, which includes staff salaries, equipment, vehicles, travel, etc., is $1.2 million, matched at 50% federal and 50% local funds.

“This means we also need $1.2 million in local funds to fully draw down the $1.2 million in federal funds,” she explained.

The Medicaid Director noted that the amount of local funds allocated in the FY 2025 Budget is $800,000. She expressed gratitude to the government for this allocation, which is higher than in the FY 2024 Budget, although it still falls short of the required local matching funds.

Senator Togiola inquired about the matching fund ratios for Administrative Costs and Medical Care.

Director King-Young explained that the ratio for Administrative Costs is 50% federal and 50% local funds, while the ratio for Medical Care is 68% federal and 32% local funds.

Senator Togiola asked when this ratio was achieved, noting that when he left the Medicaid Office, the ratio was 55% federal and 45% local funds. Director King-Young replied that the change occurred when the Affordable Care Act was approved and adopted during FY 2020.

Senator Togiola then surmised that given this change, federal funds should be higher than $102 million with a $6 million local match. Director King-Young confirmed this to be correct.

She explained that when they receive an invoice for medical care, the Treasury issues two checks: one covering 68% of the bill from federal funds and the other covering 32% from local funds. These checks are then sent as payment to the institution that submitted the invoice, whether in Hawaii or New Zealand.

She added that they have managed to maintain their credit, despite having some outstanding payments, which they hope to settle next week when the new fiscal year begins.

Senator Togiola asked what happened when Medicaid services were suspended and bills were no longer being paid. He inquired if they were completely without local funds.

Director King-Young clarified that in March this year, they suspended the off-island medical referral program but continued services for LBJ Hospital and the Department of Health. She mentioned that they had set aside funds, anticipating that many patients were still off-island and their bills needed to be paid.

She explained that medical care bills from off-island institutions are not submitted all at once but rather over a period of time, sometimes up to six months. This is what they have been managing for the last six months of the current fiscal year.

“It would have helped if you had explained all that to the public because all we heard was that you suspended Medicaid,” Senator Togiola argued. “So that comes with very serious connotations.

“The big concern for the people who were referred off-island by LBJ with only their airfares paid for is, will Medicaid now apply to referrals to the State of Hawaii, our next urban center, and cover their accommodation and treatment?”

King-Young replied that there is a limit in the Medicaid service in Hawaii.

"We are able to refer people to Hawaii under permission from CMS but it's very restricted," she explained. "We can only send patients to those providers that we have a contract with.

“We have to have a provider agreement and that is same with all Medicaid services to protect against fraud, waste and abuse.

"Anyone who wants to provide medical services for our patients must apply to our office for a provider agreement and we also have to vet them through the CMS database to make sure that they have not been terminated as a medical provider from any other state."

Senator Togiola inquired about the contract providers in Hawaii.

The Medicaid Director responded that currently, there are only two: Adventist Health Castle and Eyesight Hawaii.

She mentioned that she has been trying for some time to secure a contract with Queen’s Medical Center but has been unsuccessful due to past debts amounting to millions of dollars incurred by the government.

“To this day, we have not been able to sign a contract with Queen’s because of their concerns about our government’s ability to pay,” she revealed. “Our credit was damaged years ago, which is why we are not in the State of Hawaii. This led me to seek permission to send our patients to New Zealand.”

She added that other hospitals in Hawaii, such as Kaiser Permanente and Straub Medical Center, are also very reluctant to consider entering into contracts with local health authorities for the same reason.

Senator Togiola asked if this issue had been brought to the attention of the Governor’s Office and if the Governor had addressed it at the Executive level.

King-Young replied that while they have not approached Straub, the Governor has been very involved with Queen’s, and they are hopeful of reaching an agreement soon.

“Why didn’t you just tell us that when you said there would be no contract with Queens?” Togiola asked. “You led us to believe there was nothing wrong. If it wasn’t for this follow-up question, you wouldn’t have told us that.”

“I’ve always been advised, sir, to just answer your questions when you ask me, so I apologize,” King-Young responded.

“Who gave you that advice?” Togiola asked.

“Oh, just people,” she replied.

“Who are those people?” Togiola pursued.

“Members of the Senate, members of the government,” she answered vaguely.

“Which member of the Senate gave you that advice?” Togiola asked relentlessly.

“My friends. I consider most of you my friends,” she replied.

“I’m not your friend, and I would never give you that kind of advice. You’re lying,” Togiola stated clearly.

"If a senator gave you that advice, tell us. You can't because you're lying. And I want to know who in the government gave you that advice not to answer the senators' questions directly when asked because this is insulting."

The heated exchange ended with the Medicaid Director apologizing.