Opening Statement by Governor John P. de Jongh, Jr. at a Press Conference to Announce the Establishment of the Virgin Islands Health Reform Implementation Task Force

Today, I wish to announce a major step in the Virgin Islands Government’s health care initiatives and its implementation under the new federal health care law. But, first, I would like to take a few minutes to talk about the new law and how it affects the Virgin Islands. 

As you know, expanding health care access, improving health care delivery, and reforming health care coverage have been and continue to be a priority for this Administration. 

My Administration has embarked on what can best be described as the most extensive overhaul and revitalization of the Virgin Islands’ health care system in our history. As part of these efforts, we will improve and expand healthcare coverage to thousands of families and individuals who are currently uninsured or ineligible for public programs such as Medicaid. In particular, we will focus on the connection between access to quality healthcare and the quality of life in our community. Utilizing the resources made available to us with the recent enactment of major healthcare reform legislation by the United States Congress, our goal is to ensure that all of our children and pregnant women will have timely access to necessary health care services. Too many of our children do not get appropriate and needed care, especially preventive care, and as a result are less able to learn and succeed. This contributes to a cycle of poverty and low expectations that we must break, and we will break it.

In order to take care of our children “right from the start,” our goal is to provide pregnant women in the Territory with the necessary pre-natal, birthing, and post-natal care. Our goal is also to ensure that our most vulnerable citizens – our seniors and the disabled – receive needed care and services in the most appropriate setting, which in many instances is in their own home.

Our commitment is reflected by several initiatives that have been on-going for more than a year. These efforts have been focused, coordinated, and designed to take advantage of the new federal healthcare legislation. With the enactment of such legislation into law earlier this year, our health care initiatives are now entering a new phase, in which we must expeditiously implement the provisions of that new law while continuing to make progress in related areas.

The Patient Protection and Affordable Care Act, frequently referred to as “Health Care Reform,” provides for the largest restructuring of the U.S. health care system and the largest expansion of health care coverage in the U.S. in nearly half a century. To understand the new law, especially in terms of how it treats the Virgin Islands and other Territories, it is useful to recall the very unusual process by which the law was passed. This was a law whose midwife was the practical politics of the national government.

For example, the Virgin Islands and other Territories are not included in the provisions establishing temporary high risk pools and providing funding for early retiree reinsurance programs. Moreover, residents in the U.S. Territories will not be able to participate in the new insurance exchanges, which States are required to establish beginning in 2014, to the same extent as residents in the States, including having access to the same level of subsidies and tax credits. However, residents of the Virgin Islands and other Territories will not be subject to the mandate that will apply to individuals in States which will require that all lawful residents to maintain minimum levels of insurance coverage beginning in 2014. Moreover, small businesses in the Virgin Islands will be encouraged to voluntarily provide coverage to their employees through tax credits equal to a portion of any health insurance premiums they pay. These tax credits for small businesses will apply beginning in the current tax year.

Notwithstanding the fact that many of the provisions of the Affordable Care Act do not apply to the Territories, the Act nevertheless represents one of the most important opportunities for reforming and improving our health care system for the benefit of all Virgin Islanders in history. For example, most of the insurance reforms under the new law do apply to the Virgin Islands. In particular, based on our analysis, the following near term reforms are generally effective September 23, 2010: (1) no lifetime or annual limits on coverage, (2) a prohibition against rescissions, (3) coverage of preventive health services, and (4) the extension of dependent coverage to age 26. And, 18 months later (on March 23, 2012), insurance issuers and plan administrators will be required to develop and provide to their insureds documents using uniform explanations of coverage and standardized definitions. 

In the longer term, other, more permanent reforms in the insurance markets will generally become effective by January 1, 2014: (1) a prohibition against pre-existing condition exclusions or other discrimination based on health status, (2) guaranteed availability of coverage, (3) guaranteed renewability of coverage, (4) a prohibition against discriminatory premium rates, and (5) guaranteed minimum coverage benefits. The timeline in this slide shows these and several other deadlines established under the new law.

In addition to these very important insurance reforms, the new law provides for the largest increase in federal health care funding for the Territory in history. In short, the law creates unique and unprecedented opportunities for the Virgin Islands to improve our healthcare systems for our people.

For the U.S. Virgin Islands, the Act will provide up to an additional $280 million in federal funding for our Medicaid program during the nine-year reform period (FY 2011–2019) beyond the levels of funding we would have received under the pre-reform law. We will be able to use this additional federal funding to provide health insurance coverage and health care to thousands more of our most needy and vulnerable citizens. But perhaps even more important, wisely administered, the Act will place the Territory on a path toward reaching parity with Medicaid systems on the U.S. mainland by the end of the reform period in 2019.

Specifically, the Act will provide the following:

And, let me be very clear here—we must take advantage of all of these opportunities to the fullest extent provided by law. Our health status is not good. For example, according to the Kaiser Family Foundation, in 2006:

We believe that if we fully access the federal funds available under the Act, we will be able to substantially improve these statistics by improving the health of Virgin Islands families. The largest portion of the increased funding—the additional Medicaid funds—would allow us to increase income thresholds to expand Medicaid eligibility and to increase services. In particular, we can ensure that all pregnant women receive appropriate and needed prenatal care, and children get all of the immunizations and regularly visit health care providers to ensure they are healthy, developing normally, and able to learn in school.

Health care reform provides tremendous opportunities for our Territory. These unique opportunities, in turn, create unique challenges. This Administration is fully committed to ensuring that we take full advantage of these opportunities and meet those challenges. To that end, I am today signing an Executive Order that creates the Virgin Islands Health Reform Implementation Task Force. The Task Force is charged with providing me guidance and recommendations with respect to Territorial initiatives to implement health care reform and improve quality and access to healthcare for all of our residents.

The Task Force will be composed of 14 members, including the Lieutenant Governor, who in his capacity as Commissioner of Banking and Insurance will serve as Chairman of the Task Force; the Governor (or his designee); the Commissioners of Health and Human Services’ the Directors of Personnel and Management and Budget; the Attorney General; the CEOs of Schneider Regional Medical Center, Governor Juan F. Luis Hospital, and Frederiksted Health Center; The Executive Director of the St. Thomas East End Medical Center, the Chair of the GESC/Health Insurance Board of Trustees; the Director of Virgin Islands Equicare; and the Chairman of the Legislature’s Committee on Health. The Task Force is authorized to meet as necessary to accomplish its goals.

In addition, I am pleased to announce the appointment of Ms. Barbara Lee-Jackson as Coordinator of Healthcare Reform Implementation. Ms. Lee-Jackson will provide liaison with the Task Force and will coordinate the efforts of all agencies of the Government of the Virgin Islands to implement the provisions of the Act. Ms. Lee-Jackson is a health care and human services executive with more than 20 years professional experience. Her experience includes tenures with hospitals, as an independent consultant, as a community-leader, and, most recently, as the Executive Director of Virgin Islands Perinatal Incorporated, which is a community-based organization that works to improve access to health care and improve health outcomes associated with high-risk pregnancy, diabetes, and hypertension for low income, uninsured families.

When my Administration took office, the Medicaid program in the Virgin Islands had long been neglected. The systems and processes were unable to pay claims in a timely manner, and the program was chronically short of funding because of our inability to come up with the required local match. We found that situation unacceptable. We therefore embarked on what can best be described as a complete overhaul of the Program. This overhaul has been designed—with healthcare reform legislation in mind—to streamline processes, develop the capacity to serve more citizens, provide more comprehensive and coordinated care, and otherwise enhance the effectiveness and credibility of the Program. To these ends, we are engaged in a number of activities that I wish to review with you now. Please understand that these are complicated and inter-connected policies and programs. To discuss them meaningfully requires time and details and, although I will outline them, all who have worked on these initiatives are available to provide further information. 

Let us begin with Medicaid. 

The Medicaid and CHIP State Plans are essentially contracts, with the federal Centers for Medicare & Medicaid Services, that set forth the terms and conditions under which we receive federal matching dollars. These Plans are living, evolving documents, and States typically update their Plans on a frequent basis. However, until last year, our Plans had not been updated in more than a decade. 

During my Administration, the Territory has submitted and received federal approval for numerous State Plan amendments that have, for example, extended Medicaid coverage to include more services (such as inpatient psychiatric services for children under age 21, and additional non-emergency medical transportation), and adjusted reimbursement methodologies to ensure effective use of our local revenues to access federal dollars. In the future, we plan to seek approval of amendments that will create a separate CHIP program; designate a pharmacy benefits manager; and increase Medicaid eligibility income levels to extend Medicaid coverage to more V.I. residents.

The number of people who are uninsured is an important piece of overhauling our Medicaid program and expanding it to provide additional coverage. In order to have this information, which is essential to any program expansion modeling, we sought and received funding from the Department of the Interior to conduct a survey on the health insurance status of the residents of the Territory. The survey was completed in 2009, and the results were released earlier this year. This initiative, now complete, is an essential building block to our expansion projections. 

The survey found that approximately 33,000 Virgin Islanders, or 28.7 percent of our population, lack health insurance. The survey also shows that approximately 32 percent of those uninsureds have potential access to health care coverage through an employer or a public program. Cost was reported to be the primary barrier to obtaining employer-based coverage and purchasing insurance on the private market. 

The survey also confirms that the lack of health insurance diminishes access to health care services.

When individuals delay seeking medical care and then must visit an emergency room, the costs of healthcare are much higher than if they had obtained care earlier. These added costs place an inordinate burden on the healthcare system and particularly on our hospitals. And, because the Virgin Islands does not receive federal funding available to hospitals on the mainland that have large numbers of low income and uninsured individuals, this burden ultimately falls on our Government and our General Fund. 

The Medicaid provider agreement in use has not been revised in nearly a decade. We have developed a new, more comprehensive provider agreement, to be signed by all V.I. Medical Assistance Program (MAP) providers, which will utilize clear, detailed fee schedules and other terms of reimbursement. We are excited about this new approach, because it will enable us to better coordinate the delivery of services between our public clinics and private on-island providers (particularly for much-needed specialty care), and reduce our reliance on off-island providers. And in order to prepare our staff for an expanded Medicaid program, and the associated complicated program requirements and increased federal oversight, we have already conducted several staff training sessions and will continue these efforts.

A vital part of our plans is the implementation of a Medicaid Management Information System, the procurement of which is underway. This initiative—which has already received federal approval—will procure an electronic system for managing operations of the MAP. Planning and procurement costs will be 90% federally funded. One option we are considering is a partnership with West Virginia to access that State’s existing, certified MMIS. If we enter into such a partnership, the new capabilities will support improved financial management and extended and improved coverage. It is worth noting that the federal Centers for Medicare and Medicaid Services have expressed a clear interest in this potential partnership and its utility as a model for other state MMIS partnerships.

Additionally, we are exploring options and potential partners to provide pharmacy benefits management services for Medicaid in order to move the claims payment process from one that is manual to one that is electronic, and also to ensure that members obtain the most appropriate prescriptions.

The Virgin Islands Government Hospitals and Health Facilities Corporation is pursuing—in conjunction with the V.I. hospitals—fiscal relief from the federal government for Medicare costs. Currently, Medicare reimbursement does not fully cover the cost of providing services, and the Government is making up the difference; thereby using local funds to subsidize the hospitals for the federal government’s too-low reimbursement rates. 

Our estimates show that this figure could be as high as $45 million for the 2007-2008 period alone. We are hopeful that the reimbursement rates will be increased moving forward so that our local resources can be more appropriately deployed.

The Department of Health is working with the Department of Human Services to explore the possible use of a single eligibility system for the MAP. This would streamline eligibility processing for families in need, reduce costs, enhance financial integrity, and enable currently overloaded MAP eligibility staff to help implement our other initiatives.

Health Information Technology, which is usually referred to as Health IT is a cornerstone of health care reform and an integral part of our plan to achieve real reform, lower costs, improve health outcomes, and protect patient privacy. The Virgin Islands has successfully pursued stimulus funding under the American Recovery and Reinvestment Act or “ARRA” for many of our Health IT initiatives, and coordination of these efforts will be one role of the Task Force. To date, the V.I. has been awarded over $3 million in various grants for planning activities related to Health IT initiatives, and approval of the plans developed under these grants will provide access to further funding.

There are three inter-related initiatives underway, with the goal of achieving “meaningful use” of Electronic Health Records by every provider in the Territory, including hospitals, clinics, and private practices. The V.I. has been awarded federal grants for all three. They are an Electronic Health Records provider incentive program, a Health Information Exchange initiative, and a Regional Extension Center initiative.

These three related initiatives will create the necessary infrastructure and components to enable exchange of Electronic Health Records among all Territory providers, hospitals and clinics, and will eventually make available, in real-time, data such as lab results, clinical notes, medication and procedure history, and immunization records, and enable providers to electronically place lab orders, radiology orders, and e-prescriptions. 

Overall, this technology will help improve the quality and accessibility of healthcare in the Territory, enable better and faster decision-making by providers, and lower costs.

Throughout the health care legislation discussions and now the implementation of the new law, we have considered the impact on the Virgin Islands and how this Government can improve our health care system and expand health care coverage. Based on the results of the Survey of the Uninsured, and the amount of funding made available under the Act, we are developing preliminary estimates of how we can expand our Medicaid program. Of course, these are not precise estimates, and there likely will be adjustments as we move through the process. So I urge caution in interpreting these estimates and drawing specific projections from them.

As this model shows, we anticipate that we will be able to expand our Medicaid program through the reform period so that—at the end of that period—we will be in a strong position to take the next step and finally achieve parity with the States. The numbers are telling. Federal funding for our Medicaid program will increase from approximately $22.2 million in Fiscal Year 2009 to $70.2 million in FY 2019, for an increase of 216 percent. This additional Federal funding will allow expansion of the program to cover 20,075 individuals, including 100 percent of children living in poverty, in Fiscal Year 2019, compared to only 8,500 people in Fiscal Year 2009, an increase of nearly 140 percent. In other words, we will be able to cover about two-and-a-half times the number of eligible individuals at the end of the reform period as we are covering today. The additional funding will also allow for expanded and improved services to be added to our Medicaid program during this time period.

I would like to close by reiterating that I think this is a tremendously exciting time for us. I want to thank Delegate Christensen for her tireless efforts during the past year as the health care reform legislation moved through Congress. We will continue our initiatives, outlined today, and we are not done fighting. In fact, I am seeking a meeting with Health & Human Services Secretary Sebelius later this month to discuss how the Act will be implemented in the Virgin Islands, and other health care issues of importance to Virgin Islanders. And, with the Task Force, we will work hard to place our healthcare system on an equal footing with those on the U.S. mainland, and ensure that health care reform translates into improved access to health care services and improved health outcomes for all of our citizens and legal residents. For all our work in this area is aimed at one goal, one essential goal: improving the health of our people so they can live fuller lives. We can do this and we are well on our way. 

Thank you all.