[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
THE 2003 BUDGET: A REVIEW OF THE HHS HEALTH CARE PRIORITIES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MARCH 13, 2002
__________
Serial No. 107-100
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
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------------------------------
COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
RICHARD BURR, North Carolina BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
GREG GANSKE, Iowa BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
TOM DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland LOIS CAPPS, California
STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
ERNIE FLETCHER, Kentucky
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Health
MICHAEL BILIRAKIS, Florida, Chairman
JOE BARTON, Texas SHERROD BROWN, Ohio
FRED UPTON, Michigan HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania TED STRICKLAND, Ohio
NATHAN DEAL, Georgia THOMAS M. BARRETT, Wisconsin
RICHARD BURR, North Carolina LOIS CAPPS, California
ED WHITFIELD, Kentucky RALPH M. HALL, Texas
GREG GANSKE, Iowa EDOLPHUS TOWNS, New York
CHARLIE NORWOOD, Georgia FRANK PALLONE, Jr., New Jersey
Vice Chairman PETER DEUTSCH, Florida
BARBARA CUBIN, Wyoming ANNA G. ESHOO, California
HEATHER WILSON, New Mexico BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York
CHARLES ``CHIP'' PICKERING, ALBERT R. WYNN, Maryland
Mississippi GENE GREEN, Texas
ED BRYANT, Tennessee JOHN D. DINGELL, Michigan,
ROBERT L. EHRLICH, Jr., Maryland (Ex Officio)
STEVE BUYER, Indiana
JOSEPH R. PITTS, Pennsylvania
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Thompson, Hon. Tommy, Secretary, U.S. Department of Health
and Human Services......................................... 25
Material submitted for the record by:
College of American Pathologists, prepared statement of...... 58
Pallone, Hon. Frank:
Letter dated March 14, 2002, to Hon. Tommy G. Thompson... 60
Letter dated March 15, 2002, to Hon. Tommy G. Thompson... 60
Thompson, Hon. Tommy, Secretary, U.S. Department of Health
and Human Services, responses for the record............... 52
(iii)
THE 2003 BUDGET: A REVIEW OF THE HHS HEALTH CARE PRIORITIES
----------
WEDNESDAY, MARCH 13, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Health,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:15 a.m., in
room 2322, Rayburn House Office Building, Hon. Michael
Bilirakis (chairman) presiding.
Members present: Representatives Bilirakis, Upton,
Greenwood, Deal, Ganske, Norwood, Wilson, Shadegg, Ehrlich,
Pitts, Tauzin (ex officio), Brown, Strickland, Capps, Towns,
Pallone, Deutsch, Stupak, Wynn, Green, and Dingell (ex
officio).
Staff present: Patrick Morrisey, deputy staff director and
counsel; Steve Tilton, health policy coordinator; Eugenia
Edwards, legislative clerk; John Ford, minority counsel;
Bridgett Taylor, minority professional staff; Amy Hall,
minority professional staff; David Nelson, economist; and Karen
Folk, minority counsel.
Mr. Bilirakis. I call this hearing to order. I am extremely
pleased to welcome the Honorable Tommy Thompson, Secretary of
the United States Department of Health and Human Services.
Mr. Secretary, I first would like to wholeheartedly commend
you on your leadership throughout the last year, and it has not
been easy god knows. You have demonstrated remarkable capacity
and ingenuity in the face of unforeseen hardships.
In particular, your leadership has been critical in
developing our Nation's capacity to respond to the threat of
bioterrorism. The purpose of today's hearing as we all know
obviously is to discuss the priorities of the Department as
reflected in the administration's fiscal year 2000 budget
request.
To facilitate a dialog with the Secretary, which Ranking
Member Brown and I are both anxious to do, I hereby request
that members--I am going to limit members, with the exception
of Mr. Brown and myself, and Mr. Tauzin, the chairman of the
full committee, if he chooses to be with us, to 3 minutes.
I would ask all of the members to try to limit their time
if they possibly can to even less than that so we can get
through this.
Hopefully if we can do that, we might be able to go through
a second round with the Secretary. I would ask unanimous
consent that statements of all members of the subcommittee that
are not here be made a part of the record.
The Department of HHS fiscal year 2003 budget continues our
efforts to develop systems and programs to improve the health
and welfare of our country. The HHS request includes $448.8
billion in total outlays, an increase of $29.2 billion, or 6.3
percent over fiscal year 2002 levels.
As we should expect, this budget provides substantial
increases for protecting our Nation against bioterrorism. The
budget request totals $4.3 billion for this effort. As you
know, Mr. Secretary, our committee has taken intense interest
in bioterrorism over the years, and we hope to have legislation
on this issue to the President very soon.
I look forward to continuing to work with you to ensure
that we never have to face the reality of a bioterrorism
attack, and I am certain that this is an area where we all
agree that prevention is certainly the best policy option.
I would also like to thank you and the President for
focusing on improving access to health care and modernizing
Medicare. These issues are critical and we must work to reduce
the number of uninsured in our country.
The focus in modernizing Medicare to include a
comprehensive prescription drug plan is critical. We must act
quickly to ensure that our Nation's seniors have access to the
best available medical care in the world, and at the same time
we must ensure that Medicare will be available to protect the
next generation of Medicare beneficiaries.
The budget requests an increase for the Centers for
Medicare and Medicaid services, CMS. I have been very pleased
with the work that we have completed to improve and streamline
the operation of CMS.
I hope that soon we will have a package of regulatory
relief legislation from the Senate. It has been over there for
quite a while. This is essential legislation that will help you
continue to improve CMS' accountability, and responsiveness to
beneficiaries and providers.
Mr. Secretary, the members of this committee and I look
forward to working closely with you and the President to
deliver policies that address these very difficult problems. We
must protect our Nation against bioterrorism, help the
uninsured, improve our health care system, and modernize
Medicare. I now yield to my good friend, Mr. Brown, of Ohio.
[The prepared statement of Hon. Michael Bilirakis follows:]
Prepared Statement of Hon. Michael Bilirakis, Chairman, Subcommittee on
Health
Good morning, I now call this hearing to order. I am extremely
pleased to welcome the Honorable Tommy Thompson, Secretary of the U. S.
Department of Health and Human Services. Mr. Secretary, I would first
like to commend you on your leadership throughout the last year. You
have demonstrated remarkable capacity and ingenuity in the face of
unforeseen hardships--thank you sir. In particular, your leadership has
been critical in developing our Nation's capacity to respond to the
threat of Bioterrorism.
The purpose of today's hearing is to discuss the priorities of the
Department as reflected in the Administration's FY 2003 budget request.
To facilitate a dialogue with the Secretary, which Ranking Member Brown
and I are both anxious to do, I hereby request unanimous consent that
the opening statement of all Members other than the Chairman and
Ranking Member be limited to one minute, with full statements submitted
for the record.
The Department of Health and Human Services (HHS) Fiscal Year 2003
budget continues our efforts to develop systems and programs to improve
the health and welfare of our country. The HHS request includes $488.8
billion in total outlays--an increase of $29.2 billion, or 6.3% over
fiscal year 2002 levels.
As we should expect this budget provides substantial increases for
protecting our Nation against bioterrorism. The budget request totals
$4.3 billion for this effort. As you know, Mr. Secretary, our Committee
has taken intense interest in bioterrorism over the years, and we hope
to have legislation on this issue to the President very soon. I look
forward to continuing to work with you to ensure that we never have to
face the reality of a bioterrorist attack. I am certain this is an area
where we all agree that prevention is the best policy option.
I would also like to thank you and President Bush for focusing on
improving access to health care and modernizing Medicare. These issues
are critical and we must work to reduce the number of uninsured in our
country. The focus on modernizing Medicare, to include a comprehensive
prescription drug plan is critical. We must act quickly to ensure that
our Nation's seniors have access to the best available medical care in
the world. At the same time we must ensure that Medicare will be
available to protect the next generation of Medicare beneficiaries.
The budget requests an increase for the Centers for Medicare and
Medicaid Services (CMS). I have been very pleased with the work we have
completed to improve and streamline the operations of CMS. I hope that
soon we will have a package of regulatory relief legislation from the
Senate. This is essential legislation that will help you continue to
improve CMS's accountability and responsiveness to beneficiaries and
providers.
Mr. Secretary, the members of this Committee and I look forward to
working closely with you and the President to deliver policies that
address these difficult problems. We must protect our Nation against
bioterrorism, help the uninsured, improve our health care system, and
modernize Medicare. I now yield to my good friend, Mr. Brown of Ohio.
Mr. Brown. I would like to thank the chairman, and thank
the Secretary for joining us today. I respect your leadership,
Secretary Thompson. I wish my message could be more positive
this morning, however.
With all due respect, the administration has not given us
much to work with. There are a couple of initiatives in the
budget that makes sense from a policy perspective, and as the
chairman said, the Bioterrorism Preparedness Provisions come to
mind.
Then there are a number of initiatives which would make
sense if they were not undercut elsewhere in the budget. For
example, you rightly invest generously in NIH, which supports
research into new medical treatments, but you cut funding for
HRQ, which plays a crucial role in communicating that research
to the medical community and to the public.
You create a new program called the Healthy Communities
Innovative Initiative that targets chronic conditions, like
diabetes, and asthma, and obesity. More power to you, but then
you starve well respected and successful programs at CDC, and
you guessed it, that target chronic conditions like diabetes,
and asthma, and obesity. It makes little sense.
The administration puts money in the budget for health
insurance tax credits, ostensibly to reduce the number of the
uninsured, but then it doesn't propose rate regulation or
guaranteed issue, or the other individual insurance market
reforms that must be enacted if we want individuals to actually
use those credits.
And although we know that 900,000 children will lose health
insurance during the 3 year lag in S-CHIP funding, the budget
doesn't correct for that. The President reinforces the health
care safety net, while simultaneously cutting hole in it.
You increase funding for community health centers and the
National Health Service Corps, and I applaud that, but you
eliminate the community access program which helps stretch
limited resources to reach as many uninsured individuals as
possible.
President Bush cuts funding for public hospitals, and
children's hospitals, both of which provide life-saving care to
the uninsured. The bottom line, Mr. Secretary, is that it is
difficult for me to treat this budget as if it is a legitimate
spending blueprint.
It isn't a logical or even viable spending blueprint. It is
a political document. This budget pursues two basic goals, both
of them political. One, President Bush is going after the
entitlements, Mr. Secretary.
He is using this budget to means test Medicare and provide
drug coverage outside the Medicare benefits package, knowing
full well that Medicare's future depends on its ability to
deliver comprehensive health coverage and its availability to
all seniors, regardless of income.
They are using this budget to further the goals of your
HIFA waivers; that is, you are using waivers, and in this case
prescription drug waivers, to transform Medicaid from a Federal
entitlement into a State block grant.
The second objective is as insidious as the first. The
President stars major health care priorities to make room for
more tax cuts. This budget literally ignores millions of
retirees who can't afford their prescriptions. It simply
ignores them.
This budget ignores tens of millions of Americans who can't
afford health insurance. This budget doesn't even maintain
existing public health programs like Ryan White at sustainable
levels.
The budget doesn't include a dime to compensate for current
and projected cuts in Medicare physician payments, even though
no one, no one as far as I know, thinks that these cuts are
appropriate.
There are no dollars in the budget to repeal the completely
arbitrary $1,500 cap on therapy services, and no dollars to
restore the cuts in graduate medical education funding, and no
dollars to restore the 15 percent cut in home health.
But there is a $590 billion tax cut in the bill aimed, and
in the budget, at tax breaks which overwhelmingly go to the
most advantaged, and wealthiest of our constituents. This year
the President is spending $590 billion on another tax cut after
draining much of the surplus last year with a $1.6 trillion tax
cut, instead of providing the prescription drug coverage to
seniors, and addressing other pressing concerns.
That's what makes this a political document and not a
budget. Did the administration think that the implications of
the proposal wouldn't register with us, and that by going
outside of Medicare to cover a basic health care need that you
could weaken support for Medicare down the road.
This budget co-ops the prescription drug issue in an effort
to begin unraveling Medicare and Medicaid, two public programs
that have done more to promote the well-being of retirees,
disabled Americans, and millions of low income children, than
any other initiatives in this Nation's history.
And this budget unveils yet another multi-billion dollar
tax cut, siphoning off dollars that could be used to provide
prescription drug coverage to seniors. Forgive me, Mr.
Secretary, if I don't congratulate you on this budget.
Forgive me if a lot of us on this side of the aisle second-
guess every sentence and every number in this budget. This
administration has chosen tax cuts for the most affluent,
instead of prescription drug coverage for our seniors.
With all due respect to you and the positive contributions
that you, Mr. Secretary, personally have made, but once you
launch an assault on Medicare and Medicaid, trust and
forbearance go out the window.
When it comes to this budget, I only hope that Congress
discards this wolf in sheep's clothing, and starts again from
scratch. Thank you, Mr. Chairman.
Mr. Bilirakis. The chairman of the full committee, Mr.
Tauzin, for an opening statement.
Chairman Tauzin. Thank you, Mr. Chairman. I want to thank
you for holding this hearing and we are very fortunate to have
a dear friend of this committee, Secretary Tommy Thompson,
testify before us today.
And, Mr. Secretary, I want to thank you for appearing again
before the subcommittee, and helping us understand this budget
today. In the short year that you have been here, we have seen
a dramatic shift in both the culture and the responsiveness of
the Department of Health and Human Services.
We have seen this administration place health care very
high on its agenda, and we have seen a real commitment to
addressing the problem of the uninsured and strengthening the
Medicare program, all issues that this committee is vitally
interested in.
And I want to commend you for your dedication on these
issues, and particularly your efforts in the war on terrorism.
Your department, and your leadership, I think has demonstrated
the will of the American people in combating this threat.
And the skill in which you have engineered the improvements
in the departments under your jurisdiction to help America be a
little safer is indeed extraordinary, and I want to thank you
for that.
Today we are focusing obviously on the 2003 budget
proposal, and from all indications it is a good budget. And in
case people have not focused on this, this budget increases HHS
spending by 6.3 percent.
It builds on the President's commitment to combat terrorism
and to strengthen Medicare, and to double low income or to
expand rather low income Americans' access to health care, and
to double the NIH budget.
The NIH is the premier institute for research in America on
health care, and is doing such vital work to find not only the
causes, but the cures for so many diseases that ravage our
citizens.
You came up here last year to tell us about your plans for
streamlining the CMS, and I frankly have to tell you that you
have done an excellent job. We are interested in knowing what
are the next steps in that process, and what we might do.
When we created our patients first initiative, we learned a
great deal, and it was as a result of that initiative and your
work that we passed the regulatory relief and contracting bill
on the floor with almost a unanimous vote for that effort.
During your testimony today, we are interested in learning
what else we might do to lift regulatory burdens on providers
and beneficiaries. We think again last year was just a first
step, and I hope that you do, too.
We are deeply concerned about your efforts to modify the
privacy rule, and obviously research and medical advances in
wellness for our citizens depends upon the collection of
valuable information.
And we feel that the rules still threaten that effort, and
we encourage you to continue your efforts to reform it, so that
we protect a patient's privacy, and also facilitate the
gathering of vital information, not only personal identifiable
information, but information critical to research and
development of new products and services.
We have got an ambitious health agenda, Mr. Secretary. We
want to finalize the bioterrorism bill, and as you know we are
on that conference now. We are going to reauthorize PDUFA as
soon as this committee can get to that important issue, and I
think that is going to happen within a month.
We are working as you know to modernize Medicare and to
reform it, and to produce a prescription drug benefit for the
citizens of this country. We are committed to producing that by
late May and June of this year on the House floor.
And we want to strengthen the welfare reform laws and
enhance our safety net programs, and we invite your help and
your counsel as we go forward. I want to mention that only a
liberal viewpoint would define this budget as spending money on
tax cuts.
The President is not spending money on tax cuts. The
Congress voted to cut Americans' taxes, and to reduce the
amount of money coming into this government that was building
up surpluses.
We are not spending money on tax cuts. That is an
extraordinary view that I hear around this capital. We are
indeed spending more money, however, on HHS, and under your
leadership we expect that money to indeed strengthen our
programs and to work with us indeed to finalize our plans to
promote a healthy America, and I thank you for that effort,
sir, and appreciate you being here.
[The prepared statement of Hon. W.J. ``Billy'' Tauzin
follows:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Chairman Bilirakis, thank you for holding this very important
hearing. We are very fortunate to have Secretary Tommy Thompson, a true
friend of the Committee, testify before us today.
In just one short year, we have seen a dramatic shift in the
culture and responsiveness of the Department of Health and Human
Services. We have seen this Administration place health care high on
its agenda. We have seen a real commitment to addressing the problem of
the uninsured and to strengthening the Medicare Program.
Mr. Secretary, you are to be commended for your dedication to these
important issues, as well as your efforts in the war against terrorism.
Agencies under HHS jurisdiction had one of the most difficult jobs last
fall, yet they handled the bioterrorism crisis with great skill. On
behalf of our Committee, let me say that we are grateful for your work.
Today, we are focusing on an issue that is particularly timely. We
will be reviewing the Administration's Fiscal Year 2003 Budget
Proposal. From all indications, this is a good budget. HHS spending
increases by 6.3 percent from 2002. The budget builds upon the
President's commitments to combat bioterrorism, to strengthen Medicare,
to expand low-income Americans' access to health care services, and to
double the NIH budget by next year. As a society, we should be thankful
that this Administration has focused so many resources on these
important health care priorities.
Mr. Secretary, last year you came before our Committee to discuss
some of your plans to streamline CMS, the Agency formerly known as the
Health Care Financing Administration. On this issue, you've also done
an excellent job.
In fact, in response to some of your recommendations and
information we obtained from a Committee initiative--Patients First--we
were able to pass a regulatory relief and contracting bill on the floor
with an almost unanimous vote. During your testimony today, we are
interested in learning whether you have additional suggestions about
how we can further reduce regulatory burdens on providers and
beneficiaries. Last year's legislation was only a first step. We
welcome your input on how we can go even further.
We are also very interested in learning how you plan to modify the
medical privacy rule, a rule that if left intact, will place
significant new burdens on medical providers, researchers and patients.
Many Members of our Committee and I remain concerned about how the rule
defines de-identified data for research purposes. We've heard from the
research community that this provision will have a chilling effect on
our ability to collect valuable patient information and that bothers
me. This rule still needs some significant changes, so I ask you to
keep working with us to improve the regulation and strike an
appropriate balance between the legitimate privacy interests of
patients and our medical system's need to utilize patient information
to promote wellness.
There are so many important issues that we want to discuss with you
today. As you know, our Committee has a very ambitious health care
agenda, ranging from finalizing a bioterrorism bill, to reauthorizing
PDUFA, to modernizing Medicare and adding a prescription drug benefit
to the Program, to strengthening the welfare reform laws and to
enhancing our safety net programs for low-income Americans. We could
use your help to move these bills through the legislative process and
to get them signed into law this year. The Administration's budget
rightfully focuses on all of these issues and, while our positions may
differ on some of the details, we know that this Administration is
committed to putting patients first and to promoting a healthy America.
Mr. Secretary, as always, we are grateful that you are appearing
before our Committee. We look forward to hearing your perspective on
the Administration's health care priorities and to working with you to
address the important health care issues confronting our country. Thank
you.
Mr. Bilirakis. Mr. Pallone for an opening statement.
Mr. Pallone. Thank you, Mr. Chairman.
Mr. Bilirakis. All opening statements hereafter are limited
to 3 minutes, a succinct 3 minutes I might add.
Mr. Pallone. Thank you, Mr. Chairman. With all due respect
to the chairman of our full committee, who mentioned liberal
viewpoints, I don't know whatever you want to tag it, but the
reality is that I think that Democrats are concerned about the
fact that this budget really doesn't address the concerns of
the average American.
I don't know if that is a liberal or a conservative
viewpoint, but that is our viewpoint. Mr. Secretary, President
Bush's budget in my opinion is proof that health care is not a
priority of this administration.
Unfortunately, without dramatic changes made by Congress
during the budget and appropriations process, more Americans
will be uninsured, seniors will go without a true Medicare
prescription drug benefit, and more seniors will lose their
doctors due to inadequate Medicare reimbursements from the
Federal Government to their doctors.
And during this economic downturn the President's budget is
particularly cruel to the uninsured, poor, and disabled, who
rely on Medicaid to help with health care costs. The President
has proposed a $9 billion cut over a 10 year period in Medicaid
payments to public hospitals, and comes at a time when Medicaid
rolls are expected to increase by 3 million people, including 2
million children.
If the administration is successful in making these cuts at
a time when more people need Medicaid, we are going to see a
dramatic increase in the number of Americans uninsured. And
these cuts would not only harm Medicaid recipients, but also
aggravate fiscal problems plaguing most States, including my
home State of New Jersey.
I am also disappointed that the President rehashed a token
prescription drug benefit program that does nothing to help
millions of middle income seniors who are not struggling to pay
for their prescription drugs.
The President requested $77 billion for prescription drugs
for seniors, and an analysis shows that this would only cover
about 3 million of the 40 million seniors. This attempt at
proposing a low income drug benefit is clearly a political
attempt for the President to avoid fulfilling a promise that he
made to provide decent health care to seniors.
And I believe that any serious prescription drug plan must
include all seniors who are Medicare beneficiaries. Another
sham proposal offered on prescription drugs is the prescription
drug discount card.
A recent GAO report clearly indicated that savings with
this card would be slim to none. The discount cards are a mere
gimmick, and again this attempt is a political ploy for the
President to back down on seniors' need for a comprehensive
prescription drug benefit.
Finally, the President has severely undermined the need to
provide health care to the uninsured. His approach at providing
inadequate individual tax credits leaves unemployed and
uninsured workers with little leverage over insurers who charge
premiums between $3,000 to $7,000 a year.
I believe that in order to guarantee the uninsured a
package of necessary benefits the government needs to insure
more people by expanding the S-CHIP program to parents of
eligible children, and allowing people 55 and older to buy into
the Medicare program.
Another part of the solution is to expand employer-based
health insurance, in which employers would be required or
somehow provided an incentive to provide health insurance to
their employees in return for government subsidies.
And I don't say this, Mr. Secretary, just to be partisan,
or just to be mean, or something of that nature. I really
believe that health care is a major crisis that we face right
now, and more needs to be done by the administration. Thank
you.
Mr. Bilirakis. Mr. Upton for an opening statement.
Mr. Upton. Thank you, Mr. Chairman, and I have a full
statement for the record. Mr. Secretary, we welcome your
participation here. I want to thank you again for the continued
commitment of this administration and you to double the NIH
budget, and we continue to be on that track within a 5 year
time span.
And it is so important that we find a cure for cancer,
cystic fibrosis, and so many different things. I also want to
welcome your participation, as I know it is there, and the
administration's, as we go through a successful effort to come
up with a prescription drug plan that will benefit our seniors.
I know that we are going to spend some time this morning on
fixing the physician fee as well. I have heard from so many of
my physicians across Southwest Michigan, and I think our State
has been impacted by more than $100 million in reductions in
payments, and an average of more than $5,000 per physician.
I look forward to working with you and the administration
so that we can try to correct this problem. I yield back the
balance of my time.
[The prepared statement of Hon. Fred Upton follows:]
Prepared Statement of Hon. Fred Upton, a Representative in Congress
from the State of Michigan
Mr. Chairman, thank you for holding today's hearing on the
President's fiscal year 2003 health care budget priorities. Last year,
we were at peace and had the luxury of budget surpluses. This year, we
are waging a valiant war against terrorism abroad, moving swiftly to
securing our homeland against future terrorist attacks, and slowly
emerging from a recession. We are going to have to set priorities and
make some very difficult choices in this budget cycle, and this hearing
will help us focus on these challenges.
I share President Bush's and Secretary Thompson's strong commitment
to enhanced funding for biomedical research. That has been one of my
top priorities since coming to Congress in 1987, and I am pleased that
the President's budget includes the final payment to fulfill the
promise to double the NIH budget over five years. Funding biomedical
research is one of the best investments of taxpayer dollars that we
make. It is an investment that pays enormous dividends in improved
health and quality of life for millions of Americans and millions
across our world and in health care cost savings over the long term.
Today, one in twelve Americans is a senior citizen. In just one
generation, one in five Americans will be. So we must invest now in
research on Alzheimers, Parkinsons, cancer, and other debilitating
diseases.
And demographics dictate that act now to modernize and financially
stabilize the Medicare program. When we created the Medicare program in
1965, most seniors' greatest fear was developing cancer or having a
heart attack and being financially drained by lengthy or frequent
hospitalizations. Prescription drugs played a relatively minor role in
treatment. Today, millions of seniors are really struggling with the
high cost of the prescription drugs they need. No senior citizen should
be forced to forego needed medication, take less than the prescribed
dose, or go without other necessities in order to afford life-saving
medications. I look forward to working with the President and HHS to
develop a bipartisan Medicare prescription drug benefit as part of a
Medicare modernization package during this session of Congress.
One area that I believe must be a priority and that is
unfortunately not reflected in the President's HHS budget is fixing the
Medicare physician fee schedule. Fixing the fee schedule is not just a
matter of fairness. Unless we act in a timely and thoughtful way to
correct the problems that are resulting in significant and
unanticipated cuts in Medicare reimbursement to doctors and other
health professionals who are paid under the fee schedule, we are going
to put both access to care and quality of care for today's and
tomorrow's Medicare beneficiaries at very serious risk. Let me talk
about the situation in Michigan as an example. Unless we fix the fee
schedule problem, Michigan physicians stand to lose $105 million this
year, an average loss of over $5,000 per physician. This could well be
enough to push physicians already contemplating retiring or cutting
back their practices over the edge. Some 47 percent Michigan's family
physicians are 50 years old or older, and according to a national
survey, about 80 percent of physicians in this age group are already
thinking about leaving or reducing their practices. With 13.2
physicians per thousand Medicare beneficiaries, Michigan is below the
national average. So mitigating the cutbacks in 2002 and fixing the fee
schedule to produce stable and equitable future updates is particularly
crucial to continued access to care and quality of care for Michigan
Medicare beneficiaries.
Fixing the fee schedule is also particularly critical to access to
care and quality of care in the rural areas of my state and across
America. Rural populations have higher concentrations of the elderly,
and rural elderly Americans tend to be sicker and less well insured
than their urban counterparts. This makes health care providers in
rural America particularly dependent upon Medicare payments, and
particularly venerable to problems in payment policies that result in
payments substantially below their true costs of providing care. And
when rural communities cannot recruit doctors, nurses, and other health
care practitioners, hospitals close, and not only Medicare
beneficiaries, but entire communities lose access to care.
It is important to note that problems in the physician fee schedule
affect many other health care practitioners whose reimbursement rates
are pegged to that schedule. In many rural communities, nurse
practitioners, nurse midwives, nurse anesthetists, and physician
assistants are vital to ensuring access to care and quality of care. If
these rural communities cannot attract or retain these able health care
providers, everyone suffers.
So, again, it is vitally important that we act in a timely and
thoughtful way to ensure that Medicare payment policies are fair and
reflect the real cost of providing care.
At the same time that we are giving priority to ensuring that
Medicare beneficiaries are protected against high out-of-pocket health
care costs and have ready access to physicians' services and the
services of other health professionals, we must also focus on extending
coverage to the uninsured. I was pleased to see that the budget
recognizes the vital role that community health centers play in
addressing the health care needs of the uninsured and Medicaid
populations in my district and across the country. The increased
funding in the budget for this program and for the National Health
Service Corps Scholarship and Loan Repayment programs will go a long
way to helping increase the number of centers and the number of
individuals served.
I look forward to working with my colleagues on the Committee and
with you, Secretary Thompson, on these priorities. It will not be easy,
but we must meet the challenge of balancing competing priorities in a
way that strengthens our nation's health care delivery system and
commitment to biomedical research.
Mr. Bilirakis. Thank you. Ms. Capps.
Ms. Capps. Thank you, Mr. Chairman. I also want to thank
Secretary Thompson for coming to discuss the health budget with
us. I was impressed with the goals and priorities outlined in
the President's budget, and I was pleased about the resources
that he has requested for some of the priorities.
The administration's $4.3 billion request to address
bioterrorism and threats is a good commitment for the coming
year, and the $3.7 billion increase for NIH is the proper
completion of the effort to double our Nation's health research
budget.
These are resources that will make a real difference in the
lives of Americans. So I agree with many of the goals laid out
in the budget. For example, the commitment to strengthening
Medicare.
But the details of this proposal do not substantially move
us toward these goals. The President has stated that a
prescription drug benefit for seniors is a priority. Yet the
funds requested by the administration for this purpose, and the
low income assistance program described here are woefully
inadequate to meet the need.
It simply leaves out too many seniors. Even the Speaker of
the House has said that $300 billion is necessary. The
administration's $190 million proposal is just not enough to
provide meaningful help to the seniors.
And the budget does not include any resources to assist the
physicians and other health care providers facing significant
cuts in their Medicare fees this year. This is such a major
hole in the budget that you, yourself, Mr. Chairman, circulated
a letter asking the budget committee to rectify this problem.
I was pleased to support this effort in the legislation
that you introduced last year. Turning to nurses, I have been
pleased that Secretary Thompson has expressed support for
efforts to address the nursing shortage, and it was good to see
a small increase in Federal resources to that end.
With your support and the support of many of my colleagues
up here today, both the House and Senate were able to pass
versions of the Nursery Investment Act. I hope that we will be
able to count on your further support to move the bill to final
passage and then to fully fund its provisions.
Our health care system desperately needs this help, but I
was disappointed that the budget cuts nearly 75 percent of the
funding devoted to other health professions. In this era, we
should be boosting funding for these programs, and not cutting
it.
The terrorist attacks have made it abundantly clear how
important prepared medical professionals are for our Nation's
security. I hope that we can restore that funding before we
regret its loss.
There are several other cuts that seem counterintuitive to
me as well. The budget eliminates the Community Access Program,
and this program helps communities. The budget also cut $57
million from the CDC's chronic disease programs. This is the
time that we should be increasing efforts there. These are some
of the examples.
Mr. Bilirakis. The Chair apologizes, gentlelady, but your
time is up.
Ms. Capps. I look forward to hearing the Secretary. Thank
you.
Mr. Bilirakis. Mr. Greenwood for an opening statement.
Mr. Greenwood. Thank you, Mr. Chairman. I will take your
admonition to be brief, and Mr. Secretary, I look forward to
your testimony.
In a time when revenues are way down from what we had hoped
they would be because of the economy, it is really
extraordinary that we have been able to have a budget here that
in fact increases spending for health care programs by 6
percent.
The real challenge for all of us is to try and find ways to
save on one piece of the budget so that we can spend more in
other places.
And the one place that I am particularly pleased to see
your budget is that it recognizes a need to get savings from
the average wholesale price of drugs, and you anticipate that
we can save $5 billion plus over the next 5 years, and I look
forward to working with you both legislatively, and if
necessary, administratively, to get that job done.
It is a real place where we are spending money for, and no
good result, and we need to fix that, and I yield back the
balance of my time, Mr. Chairman.
Mr. Bilirakis. I thank the gentleman for yielding. Mr.
Dingell for an opening statement.
Mr. Dingell. Mr. Chairman, I thank you, and I commend you
for this hearing. Mr. Secretary, welcome to the committee. It
is a pleasure to see you here, and I thank you for your
kindness to us.
All of us are keenly interested in the budget of your
department, and the programs that affect so many of this
Nation's citizens. I look forward to hearing from you, Mr.
Secretary, about the President's proposals to help seniors with
the cost of prescription drugs, and to build critical health
care research, and provide uninsured children and parents with
health care coverage.
I am pleased to note that the President's fiscal year 2003
budget for HHS includes a significant increase in funding for
anti-bioterrorism activities, and that is good. Chairman Tauzin
and I, along with our committee members, have collaborated on a
bill in a bipartisan fashion, which would authorize new
resources for hospitals and other health care providers to
prepare for potential bioterrorist attacks.
The President's budget includes support for initiatives
like those in our bipartisan bill, which is currently in
conference with the Senate.
Unfortunately, Mr. Secretary, the remainder of the budget
for HHS does not give me much cause for enthusiasm. Lack of
access to reportable prescription drug coverage through
Medicare is the most pressing problem that seniors and disabled
citizens face today.
The President's budget includes no comprehensive Medicare
drug benefit at all. The only proposed benefit is for low
income seniors, and in this case the benefit is not even
defined.
Moreover, the amount that the President's budget allocates
for all Medicare for the next 10 years equals 11 percent of the
amount of the Congressional Budget Office estimates that
seniors will need to spend on prescription drugs during the
same time period.
I doubt if anyone would agree that this amount of funding
will provide meaningful benefits to our senior citizens. The
President's budget also includes some troubling proposals for
the uninsured, and I fear will do more harm than good.
The President's budget would allow States to expand
Medicaid and CHIP programs to cover more uninsured people
through the Medicaid waiver process. But since these waivers
must then be budget neutral, the only way States can expand
coverage is by cutting the benefits of people already enrolled
in Medicaid and CHIP.
And that is hardly a comforting thought in a time when both
providers and beneficiaries of these programs are already
significantly short of the level of benefits that they in fact
need.
Instead of focusing precious Federal dollars where they are
likely to do the most good, most of the new money that the
budget allocates for the uninsured would go toward tax credits,
a doubtful proposition at best.
The majority of uninsured people are below 200 percent of
poverty, but the President's proposed $3,000 health care tax
credit per family covers first of all less than half of the
average cost of a family insurance policy.
Low income families could spend over 15 percent of their
total income just to buy such a policy, and then hundreds of
dollars more in deductibles and co-payments just to receive
services.
Payments to Medicare physicians decreased this year, Mr.
Secretary, as you very well know, by 5.4 percent, and are
expected to decrease again in 2003 and 2004 as well. This, and
the cuts which are afflicting other parts of the health care
industry, offer a real threat, not just to the industry, but
very frankly to the patients and the beneficiaries of those
programs.
The administration has expressed interest in correcting
this shortfall, but the President's budget implies that
payments to other providers would be cut in order to address
physician fees. Again, robbing Peter to pay Paul.
The only increased payments to Medicare providers are for
managed care plans, despite the fact that 86 percent of the
seniors are enrolled in fee for service programs, clearly a
mis-allocation of resources.
Finally, the public health safety net takes a major hit at
a time when the demand for these services is increasing. The
bill haphazardly cuts, freezes, or inadequately increases the
resources for programs that serve unmet needs.
The Centers for Disease Controls' chronic disease
prevention programs are cut, as are rural health services, drug
abuse prevention, and children's medical education. The nursing
shortage has not disappeared, and yet funds for health programs
are slashed by over 70 percent.
The Community Access Program, which provides grants to
local groups to coordinate services for the uninsured, is
eliminated. Funding levels are frozen for the maternal and
child health block grant, and family planning services, Healthy
Start, and Ryan White AIDS programs.
Mental health activities are frozen, despite the fact that
most people, and more than ever, could benefit from these
crucial services given the stresses of 9-11. Mr. Secretary, you
have my personal sympathy.
I know that you would have liked to have done, but
regrettably you have not been able to do so. But Congress
certainly wants to do better, and the people certainly expect
that better will be done.
And we know that your responsibilities will be multiplied
by the Public Health Service System tests that were imposed
last fall. You responded well, but all of us know that more
needs to be done.
I hope that we can work together to strengthen our Nation's
health care programs in the coming years, but the budget seems
to stand in the way. Thank you.
Mr. Bilirakis. Mr. Deal for an opening statement.
Mr. Deal. Thank you, Mr. Chairman. Mr. Secretary, welcome
to the committee, and I thank you for coming today, and I at
the outset commend you for the efforts that you have made in
running your department and removing many of the bureaucratic
mazes that have perhaps been the highlight of that agency for
far too long.
I think you have made tremendous progress in that regard,
and we all look forward to working with you to make the process
work better in the future.
You know, a 6.3 percent increase, I think for most of the
small businesses and employees in my district, if they knew
they were going to get a 6.3 percent next year, and in a time
of slower economy, they would be very pleased.
I think the challenge that obviously you face, and this
committee, and the Congress itself faces, is allocating our
priorities within those budget constraints. Certainly we look
forward to working with you as to your priorities, and look
forward to your message in that regard today.
Some of us obviously recognize that there are some
discrepancies. Upper payment limits, for example, in States
like mine, we feel we have not been treated fairly, and some of
that is due to legislation of this body, and hopefully we can
correct that, and others would be due to administration within
your agency.
And we look forward to working with you, because when we
talk about public funds and benefits to those that are the
Medicaid eligible individuals, it ought to be a fair treatment
across the Board, and not based on who has the political clout
within the Congress.
And we look forward to working with you to resolve some of
those issues. Thank you, Mr. Secretary. I yield back the
balance of my time.
Mr. Bilirakis. Mr. Stupak for an opening statement.
Mr. Stupak. Thank you, Mr. Chairman. Welcome, Mr.
Secretary. I was going to point out in my opening statement the
concerns that I raised last week at the PDUFA hearing, and I
understand that a report was submitted to you some time ago,
and I understand that we received it this morning.
At last week's hearing, I indicated that I was concerned
about enforcement action under PDUFA we are under, and in your
testimony urging us to quickly approve PDUFA-3. I was concerned
about the post-marketing surveillance of drugs, and the reports
that were supposed to be completed.
And we were using the figures last week, and about 90
percent of the post-marketings were not completed, and I was
concerned about enforcement action, and what enforcement action
the FDA and others have in order to make sure that these
studies are done in time.
In looking at page 10 of the report, and again I have not
had time to read it as it was clearly just given to us today,
it shows that in biologics, approximately 14 percent, 301
commitments have been made, and only 44 post-study reports have
been completed, and in total under FDAMA, twenty-four hundred
total commitments have been made, but only 882 reports have
been completed.
And if my math is correct, that is about 14 percent
completion for biologics, and about 36 percent for the other
prescription drugs out there. Our concern and the concern of
the committee was how do you enforce this.
I mean, if you are in FDAMA-2, and he wants to go to FDAMA-
3, and if we are not enforcing FDAMA-2, what changes would
there be in FDAMA to make sure that there is--I'm sorry, PDUFA,
PDUFA, to make sure that there is enforcement, and that these
studies are done in a timely manner so you get the reports you
want.
As in Serzone, you have been waiting for 6 years for a
report, and Accutane, 15 years for a report. What is your
remedy and what is your enforcement? So some of us have thought
about subpoena power, and also tying the civil penalties into
the sales of these drugs while these studies remain not
delivered to the FDA.
We are trying to find a way to expedite the process so the
safety and effectiveness of these drugs can be given to the
American public. So I will be looking forward to your comments
on that.
Also, the imports question. You were here last year, and we
had a number of questions, and I believe it was in June on drug
imports, and I will have a number of questions along those
lines about that situation.
And with that, Mr. Chairman, I know that you want to limit
our time, and I just want to give some sense of where I am
going with my questioning, and I yield back the balance of my
time.
Mr. Bilirakis. I thank the gentleman. Dr. Ganske.
Mr. Ganske. Thank you, Mr. Chairman, and thank you Mr.
Secretary. The 6.3 percent increase reflects the additional
costs of combating bioterrorism and I am glad that the
administration is working on that.
We are also fulfilling our commitment to double NIH
funding, and I think that is important, too. Now, Mr.
Secretary, my points are these. States like Iowa, my home
State, are hurting with Medicare and Medicaid. Big time.
Iowa is fiftieth out of fifty States in Medicare
reimbursement. Iowa's rural hospitals in particular are
hemorrhaging red ink. Iowa's doctors and other providers are
telling us that they can't take any more new Medicare patients.
Our Congressional budget and the administration's, I think,
must find some additional funding for Medicare and Medicaid. I
don't think we can fix this problem in a budget neutral way. We
need additional funding if we are going to maintain services.
So where do we find that money? Well, here are a few ideas.
How about moth-balling the space station. That is about $50 to
$70 billion. Maybe I will get some more bipartisan support on
Tim Roemer's and my amendment on that.
How about howitzering the Crusader? That's billions of
dollars. There is an awful lot of pork in the budget and
President Bush has talked about this. I think we can find some
additional funding.
With that additional funding, we need to increase real
hospital DRGs, and we need to fix the wage index, and we need
to freeze the physician payment to where it was last year, and
then fix the formula for future years.
The votes are there for that, both in the House and in the
Senate overwhelmingly. And I would say this. I have not even
talked about prescription drug costs. I am pleased that the
administration incorporated some of the ideas from H.R. 1387,
the Drug Availability and Health Care Access Improvement Act of
2001, which I introduced, along with Representative Wynn.
We have bipartisan support for that from across the
ideologic spectrum. But I would say this. What good will it due
my senior citizens in rural and small town Iowa if they have a
prescription drug benefit if they no longer have a hospital and
a doctor to go to in their community?
And that is how important this is in terms of funding, and
finding some additional funding. I look forward to working with
you, Mr. Secretary, and the aqministration, and I don't mean to
say that Congress doesn't have a big say in this.
My colleagues on the other side have complained about the
tax cut. Well, in response, I think there is a lot of spending
items that are wasteful, and that we could do away with, and
divert that funding over into the health care side. And with
that, I will yield back, Mr. Chairman.
Mr. Bilirakis. I thank the gentleman. Mr. Wynn for an
opening statement.
Mr. Wynn. Thank you, Mr. Chairman. Let me also welcome the
Secretary. I am looking forward to his comments. I know that we
all are, and so I will be brief. But it seems as though the
committee has used these opening statements as an opportunity
to add their personal indignations, and so I will probably
follow suit.
And only to say that everyone talks about additional
spending, whether it is prescription drugs, rural hospitals,
increasing access to care for uninsured, and the fact of the
matter is that we don't have enough money.
You are to be commended for the 6.3 percent increase that
you are advocating, and I don't think it is insignificant, but
the needs are far greater, and the fact of the matter is that
we have made a big tax cut predicated on a surplus.
When we had the surplus the tax cut made sense. The
question now before us is that we are now in a deficit, and we
don't have a surplus, and we are facing a deficit, and going
into the Social Security Trust Fund, and how can we justify
continuing this tax cut, and then sit here and bang on you for
more of this, and more of that.
And whether it id diabetes, or obesity, prescription drugs,
or whatever, these are good issues, and we ought to fund them,
and I think we ought to really take a serious look at whether
or not we can afford a tax cut at a time or at a level of
reduction.
With that, I will conclude my comments, and again, I look
forward to your statements.
Mr. Bilirakis. Dr. Norwood for an opening statement.
Mr. Norwood. Thank you very much, Mr. Chairman, and thank
you for the hearing, and, Mr. Secretary, thank you for joining
us today. I want to tell you that I think you have one of the
most difficult jobs in Washington, DC.
Mr. Thompson. I agree with you, more so now than ever.
Mr. Norwood. I also think you are doing a wonderful job,
and I want to send my compliments to Dr. Crawford, who
testified before us last week. He has done a great job, and I
thank him personally for producing the agreement for the
reauthorization of PDUFA in such lightening speed time.
That to me is a fairly good indication of how well your
agency is actually functioning. I know that we all who are
sitting here are saying we want more and more money for health
care.
And I think the only reason we are doing that is that the
American people are saying that to us, and the American people
have made it fairly clear that when they get to be 65 that they
want free health care, and I don't think anybody on this full
committee is ready to vote to abolish Medicare, and Medicaid
for that matter.
So that is really sort of where we are coming from, but you
have a limited budget in which you must work. But I think that
many of us are saying that if we are going to furnish health
care, it needs to be decent health care.
It needs to be where a patient actually does have access to
a doctor. It needs to be a program where physicians in the
country are not trying to get out of as far as they can,
because the sooner they get out, the longer it will take them
to go bankrupt.
In this program, they can get there pretty fast if they
just take on more Medicare patients. I know that your job is to
tell us that we have to be budget neutral, and you know what? I
agree with that.
I just don't think we have to confine that just to your
budget. We all look at the budget of the United States and be
budget neutral in that. There is a great deal of waste in the
Federal Government, and not one member here doesn't know that's
true.
We need to divert funds from wasteful programs and
efficient programs, and put it in health care so we can have a
good program. Now, I have not seen a Presidential budget yet
that I didn't have concerns about, and this one is the same.
I am concerned that the budget does not do enough to ensure
that providers are going to continue to serve Medicare
patients, and it is a fact that they are not. It is going to
stop. Simply put, asking us to be budget neutral is just not
possible to do if we are going to continue with Medicare.
But again we can be budget neutral in your part of the
budget, but we also can be budget neutral in the whole budget
of the United States, and get some money into these programs.
I am concerned that the budget request on Medicaid, AWP, is
going to have a very harmful effect on drug research.
I am concerned about the reductions in health resource
services administration, and health care research and quality
budget, that particularly impact on health care professionals.
We have got to solve this problem, and you have a hard job.
Mr. Bilirakis. The Chair thanks the good doctor. Mr. Green.
Mr. Green. Thank you, Mr. Chairman, and I would like to
thank the Secretary for being here again. I don't know about
our personal indignation at the budget, but obviously in a
process like we have and you had when you were Governor, we all
have differences of opinion.
But just like I don't think we ought to mothball the space
program. I would hope that we would get some more money out of
ethanol, but be that as it may, one man's pork is another
person's important project.
And, Mr. Chairman, I would like to thank you for this
oversight hearing on the budget, and I am again grateful for
our Secretary being here. From the lifesaving research that is
done by the NIH, to the Medicare and Medicaid programs, the HHS
provides such critical services for every American.
And it is imperative that you receive the resources that
you need to continue to improve the health care of all of
Americans. This past year, we realized how important our public
health system is, and we learned that our system is in dire
need of repair.
I am grateful that the President increased his funding for
the CDC and other programs through public health so that it is
better able to combat bioterrorism. But it seems that we have
increased bioterrorism at the expense of other worthwhile
programs.
Health care problems facing our country can't be solved by
one agency or one division. We need to ensure that all
agencies, and not just NIH and bioterrorism, receive adequate
funding.
Unfortunately, the President's budget contains significant
cuts in programs that combat chronic disease, help the
uninsured, and train a new generation of health care providers.
I am particularly concerned because the administration's
decision now for the second year in a row is to zero the
community access program, the CAP program.
CAP enables communities to coordinate and integrate health
care for our Nation's 40 million uninsured by improving the
infrastructure and communication among current agencies that we
have, both on the local level and on the Federal level.
With the decline in the economy and the subsequent rise in
unemployment, more and more Americans are losing their health
insurance, and now should not be the time to cut programs that
the uninsured need to help get through the system.
I am also concerned that the CDC's chronic disease budget
has once again been cut. These programs fund breast and
cervical cancer screening, cancer registries, diabetes
prevention, heart disease, stroke prevention, arthritis
programs, tobacco prevention and cessation, and also obesity
prevention.
These diseases account for 70 percent of all of the deaths
in our country, and more importantly, they are almost all
entirely preventable, and that is what is frustrating.
An ounce of prevention is worth a pound of cure, and I
would like to also point out the shortcoming that has been
point out before, but on the prescription drug benefit for
seniors, and $190 billion creates such a small program for
seniors, and most estimates estimate that we need $450 to $750
billion over 10 years.
And it seems like the administration's proposal would only
buy seniors one pill, and that is the frustrating part. Mr.
Chairman, again, I thank you for the hearing, and I will put my
full statement in the record.
Mr. Bilirakis. I appreciate that. Mr. Shadegg for an
opening statement.
Mr. Shadegg. Thank you, Mr. Chairman, for holding this
important and timely hearing, and thank you, Mr. Secretary, and
welcome here. We appreciate you coming to testify before us.
Now, I want to echo the remarks of my colleague, Mr.
Norwood, with regard to the difficulty of your job, and with
several of the comments by my colleagues on the progress that
has been made.
I think that extraordinary strides have been made in the
last year and I want to thank you for that. I particularly want
to thank you for your advisory committee on regulatory reform.
That committee will be in my hometown of Phoenix as you
know next week, and it is expected to announce its initial
recommendations on EMTALA. EMTALA, while clearly well-intended,
is a law that is not working. It is failing.
And I have worked long hours with the Arizona medical
community on trying to improve that law, and in that effort, I
was successful in persuading your CMS director, Tom Scully, to
come to Arizona in January and spend a day hearing about a
variety of issues.
But particularly about EMTALA and the problems that it is
causing in Arizona, and in Arizona's hospitals, and
particularly in our inner-city hospitals. So I look forward to
working with you on that, and I commend you for that effort, as
well as many others.
I also want to address the issue of the uninsured. I think
that is an issue which our country absolutely must confront.
The chairman held an important hearing on that issue just a few
weeks ago, and one of the witnesses correctly noted that we are
quickly facing a point where our Nation's uninsured may soon
jeopardize the care for millions of other Americans who are
fortunate to have health care.
We simply must face up to the problem of our uninsured,
which is why I am extremely pleased that the President's budget
has put forth a reasonable approach to solving that problem
through refundable health care tax credits.
I think this is a vehicle that is widely misunderstood in
the country, but would give people the ability to choose the
health care they need, and would deal with the funding of
health care for the uninsured, which simply is being ignored
right now.
The reality is for my colleagues who don't believe we can
afford to provide refundable health care tax credits for the
uninsured, they simply don't know that we are already bearing
that cost, and it is being cost-shifted on to those with
insurance and cost-shifted on to Medicare and many other
programs.
So I commend you for that effort, and I look forward to
working with you.
Mr. Bilirakis. Mr. Strickland for an opening statement.
Mr. Strickland. Thank you, Mr. Chairman, and thank you, Mr.
Secretary. As I reviewed the Department of Health and Human
Services fiscal year 2003 budget, I was pleased to see funding
increases for bioterrorism preparedness, drug treatment
programs at SAMHSA, National Institutes of Health, community
health centers, and the National Health Services Corps.
These are important programs that do much to protect and
promote the health and safety of all of all Americans. However,
I was dismayed to find that the budget lacks in areas that seek
to ensure that undeserved communities have access to health
care resources.
There are cuts in funding for the Children's Hospital GME
program, substance abuse prevention grants, and health
professions programs through the Health Resources and Services
Administration.
The budget slashes funding for rural health by proposing a
50 percent cut in funding for the State Offices of Rural
Health, the agency that assists States in the recruiting and
training of health care professionals that serve medically
undeserved rural communities, and administers the Medicare
Rural Hospital Flexibility Program.
The budget fails to provide for the elimination of the now
and necessary, but automatic, 15 percent cut in Medicare rural
home health payments, and it fails to eliminate the caps on
Medicare disproportionate share hospital payments for small and
rural hospitals.
The administration's Medicare budget is grossly inadequate
in my judgment, including just $190 billion over 10 years for
all aspects of Medicare reform, and just $77 billion is
specifically allocated to allow States to provide drug coverage
for low income seniors.
In additional to shifting the responsibility for a
prescription drug benefit under Medicare from the Federal
Government to the States, I find the prescription drug proposal
laid out in this budget to be a fraudulent attempt in my
judgment on the part of this administration to simply placate
seniors who tell me they need a comprehensive benefit plan.
Under the President's plan, there is no guarantee that even
those seniors who are under 150 percent of poverty, and are
eligible for the benefits described in the budget, would
receive assistance because in this proposal there is no
guarantee that the States will act.
It is shameful that this type of proposal has been put
forth as real help for seniors. These budget shortfalls should
not be tolerated. Instead, we must pass a budget that more
closely meets the obligation of the needs and priorities of
working and retired Americans.
And, Mr. Secretary, let me say that nothing that I said
today reflects on you personally. I am a big cheerleader of
Secretary Thompson.
I agree with those who say that you are performing a
difficult job admirably, but I felt that I should express these
opinions, because I do think that they have merit. And I thank
you for what you do, and I yield back the balance of my time.
[The prepared statement of Hon. Ted Strickland follows:]
Prepared Statement of Hon. Ted Strickland, a Representative in Congress
from the State of Ohio
Thank you, Mr. Chairman, for convening today's hearing.
As I reviewed the Department of Health and Human Services fiscal
year 2003 budget, I was pleased to see funding increases for
bioterrorism preparedness, drug treatment programs at SAMHSA, the
National Institutes of Health (NIH), Community Health Centers, and the
National Health Service Corps. These are important programs that do
much to protect and promote the health and safety of all Americans.
However, I was dismayed to find the budget lacking in many areas
that seek to ensure underserved communities have access to health care
resources. There are cuts in funding for the Children's hospitals GME
program, substance abuse prevention grants, and health professions
programs through the Health Resources and Services Administration
(HRSA). The budget slashes funding for rural health by proposing a 50
percent cut in funding for the State Offices of Rural Health, the
agency that assists states in the recruiting and training of health
care professionals that serve medically underserved rural communities
and administers the Medicare Rural Hospital Flexibility Program. The
budget fails to provide for the elimination of the now unnecessary but
automatic 15 percent cut in Medicare rural home health payments and it
fails to eliminate the caps on Medicare disproportionate share hospital
(DSH) payments for small and rural hospitals.
The Administration's Medicare budget is grossly inadequate,
including just $190 billion over ten years for all aspects of Medicare
reform--and just $77 billion is specifically allocated to allow states
to provide drug coverage for low income seniors. In addition to
shifting the responsibility for a prescription drug benefit under
Medicare from the federal government to the states, I find the
prescription drug proposal laid out in this budget to be a fraudulent
attempt on the part of the Administration to placate seniors who tell
me they need a comprehensive benefit. Under the President's plan, there
is no guarantee that even those seniors who are under 150 % of poverty
($12,885 for an individual and $17,415 for a couple) and are eligible
for the benefit described in the budget would receive assistance
because under this proposal there is no guarantee the states will act.
It is shameful that this type of proposal has been put forth as real
help for seniors.
These budget shortfalls cannot be tolerated. Instead, we must pass
a budget that more closely meets our obligation to the needs and
priorities of working and retired Americans. Thank you, Mr. Chairman,
and I yield back the remainder of my time.
Mr. Bilirakis. I thank the gentleman. Mr. Pitts.
Mr. Pitts. Thank you, Mr. Chairman, in keeping with your
wishes, I will be brief. Thank you, Mr. Secretary, for joining
the committee today. I have always found your office, and your
staff very responsive when we sought to meet with them or ask
questions, and we thank you for that.
And we appreciate your efforts to bring efficiency to your
department, and the restructuring of the bureaucracy there. We
look forward to working with you on a number of issues. Your
plate is obviously very, very full, and you have a difficult
task.
But we thank you for your track record, and look forward to
working with you, especially on welfare reform, in some of the
issues that we face. Thank you, Mr. Chairman.
Mr. Bilirakis. The Chair thanks the gentleman. Mr. Ehrlich.
Mr. Ehrlich. I will have mercy, too, Mr. Chairman. I have a
statement that I will submit. Just one quick observation, Mr.
Secretary. I was looking at your charter and thinking about
your charter, and we all have our hot buttons, and you have
heard many of these hot buttons today, of course.
And in just looking through the outline that our committee
prepares with regard to your testimony, a lot of these issues
have been addressed, from low income drug benefits, and all the
reimbursement issues, of course, and Medicaid.
AWP has been mentioned, and the discount card and how best
to get to the prescription drug benefit, and Medicare solvency,
regulatory relief, NIH, work force shortages, the nursing
shortage, which is a hot issue with many of us, and
particularly myself, as it is with Ms. Capps and the chairman
of the Health Subcommittee.
Bioterrorism, genetic non-discrimination, CDC, the
uninsured, FDA, community health centers, National Health
Corps. Are you sure you still want this job?
We appreciate your thoughtful approach to these issues.
This is a very difficult job, and I personally appreciate the
attention my office has received, and I look forward to your
testimony, and I yield back.
[The prepared statement of Hon. Robert L. Ehrlich, Jr.
follows:]
Prepared Statement of Hon. Robert L. Ehrlich, Jr., a Representative in
Congress from the State of Maryland
Mr. Chairman, thank you for holding this important hearing on
funding priorities for the Department of Health and Human Services for
Fiscal Year 2003.
It is our privilege today to have The Honorable Tommy Thompson,
Secretary of Health and Human Services, with us today as our sole
witness. Mr. Secretary, I wish to add to my colleagues' thanks to you
for spending this morning with the members of our Health Subcommittee
to discuss your upcoming budget and matters of concern to us.
Mr. Secretary, I would also like to thank you for your service to
our country. I view HHS as serving a crucial role in our federal
government. Before September 11th, your job was to advance the health
of all Americans, increase access to affordable, quality health care,
and ensure that proper measures and needed research in all health
fields continued. This is a crucial function in our society.
After September 11th, your job is all that and much more. HHS is at
the forefront of the War on Terrorism. You are responsible for a $489
billion organization whose mission it is to protect the health and
safety of all Americans. The newest component of your mission,
Bioterrorism Protection, totaling $4.3 billion in this budget, is
crucial to our national security. I look forward to discussing this
component with you and how it will work with state and local
communities to benefit our safety.
There is one other subject area I look forwarding to hearing you
discuss. I know you have been active in providing additional resources
to address our nation's nursing shortage, and I appreciate your
efforts. As you may be aware, the House passed H.R. 3487, the Nurse
Reinvestment Act, which Chairman Bilirakis, Mr. Brown, Mrs. Capps, Mr.
Whitfield, and I worked together on last year. This legislation will
allow you to provide educational scholarships to nurses who agree to
work in medically-underserved areas.
Mr. Secretary, this legislation is needed to address the nursing
shortage nationally. One of my concerns is that while this legislation
grants you the authority to pursue this program, it may not provide you
sufficient resources to provide scholarships for this purpose. I will
be eager to hear your view on this important issue and what you think
you need in terms of resources to ease the nursing shortage and attract
more bedside nurses to the profession.
Mr. Secretary, once again, thank you for your attendance here
today. I look forward to your testimony and our dialogue.
Thank you, Mr. Chairman.
Mr. Bilirakis. I thank the gentleman. Mr. Deutsch for an
opening statement.
Mr. Deutsch. Thank you, Mr. Chairman, and again I join in
really direct praise of your work, and your Department's work,
in some very specific areas. I think your response in post-911
events has really been excellent, and thoughtful, creative, and
really government efficiency at its best, and management at its
best, and creative leadership at its best.
I really compliment you and I look forward to working with
you in the continuation of that area. I also think that praise
in terms of research funding at NIH is a legacy that you can be
proud of, and I think we on this committee and subcommittee can
really be proud of as well.
I want to know though, and again I know that it is not
directly through your efforts, but it is through your
department's efforts, and it is really the opportunity that we
have to really work with you in terms of the budget as a
committee of jurisdiction.
I join with our ranking Democrat on the subcommittee, and
the ranking Democrat on the full committee, Mr. Brown and Mr.
Dingell, in their very, very specific, and very strong concerns
regarding the Medicare prescription drug benefit issue.
I think it is an area where the administration's attempts
and budget attempts are really almost effectively zero. Out
there in the real world, they really are effectively zero.
And I think that each of us interact with constituents, but
this is not a theoretical issue. This is a very real issue, and
for literally millions, and tens of millions of Americans, this
is a very, very real issue.
It is the difference between lifestyle choices, and in most
cases it is not the difference between eating and not eating,
but it is clearly the difference between going out, visiting
grandchildren, traveling, having electricity or heat at 72
versus 52, and issues like that.
And I think that for us in this budgeting that we are
doing, not to address it when we still have the opportunity to
address it, is a mistake of tragic proportions. And I think
that our job hopefully will be able to give you the opportunity
to push dramatically further than what the administration has
offered on the table, which I think is a non-starter, and
effectively close to a zero for the people who really do need
the help.
And with that, I would yield back the balance of my time.
Thank you.
Mr. Bilirakis. The Chair thanks the gentleman, and I think
that completes our opening statements. Secretary Thompson,
first, I too, want to thank you for the timely furnishing to
the committee of the PDUFA performance goals and closure, which
we have not had a chance to review, but I imagine that there
will be a few questions going forward on that.
Let me ask you, sir, the administration has requested that
we find offsets--are you going to make an opening statement,
Mr. Secretary?
Secretary Thompson. I serve at your pleasure, sir.
Mr. Bilirakis. If you want me to go right to questions, I
will. It is up to you, sir.
Mr. Brown. Mr. Chairman, we can make an opening statement
for him.
Mr. Bilirakis. Feel free to make an opening statement. I
will set the clock at 10 minutes. I think this is just not my
idea.
Mr. Brown. Mr. Chairman, for one moment, can I have
unanimous consent to enter into the record Ms. Capps' article
that she wrote in The Hill and any other extraneous materials
other members have?
Mr. Bilirakis. Without objection.
Mr. Brown. Thank you.
Mr. Bilirakis. Is that okay with Ms. Capps?
Mr. Brown. She asked for that.
[The article and additional statements submitted for the
record follow:
Bush Health Budget Doesn't Live Up to Promises
By Lois Capps
The President has come forward with a budget proposal highlighting
some of the important health care challenges facing our country. I
agree with many of his priorities, but am doubtful that the details of
his proposals will accomplish these goals.
There are many pieces of this budget that are strong and should be
embraced by the Congress. For example, I applaud the Administration's
$4.3 billion request to address bioterrorism threats. Many of the
priorities raised in bills produced by the Homeland Security Task Force
last year are being pursued here.
I am also very pleased the Administration is embracing Congress'
long standing commitment to doubling the NIH budget. This funding
supports important research that benefits all Americans--from finding
cures for Parkinson's and Alzheimer's to determining the most effective
medical practices.
But this budget, while setting impressive goals and increasing a
few valuable programs, falls woefully short in addressing many other
critical health care priorities.
The Medicare prescription drug proposal is one such example. The
Administration has declared that adding a drug benefit for seniors is a
major priority. But the $190 billion allocated in the budget provides
barely half of what Speaker Hastert has claimed is necessary. And the
proposal itself--basically offering coverage to only low income
seniors--would leave millions of seniors without coverage and still
facing enormous drug bills.
In addition, the Administration provides no help to doctors whose
Medicare payments were cut by 5.4% this year and will likely see a
sizeable cut next year. Just two weeks ago the Energy and Commerce
Subcommittee on Health heard testimony on how these cuts will devastate
doctors' ability to provide quality care to our seniors. A bipartisan
group, led by Chairman Bilirakis, Ranking Member Sherrod Brown and
myself, are committed to fixing this problem, but the Administration's
budget leaves no room for any solution.
I join the President in trying to ensure we have enough doctors,
nurses and other health professionals to bring our public health system
up to today's challenges. The terrorist attacks have made abundantly
clear how important prepared medical professionals are for our national
security. Hospitals cite staffing shortages as a major obstacle to
their ability to continue providing quality care. And in my district
and across the country, the crisis in long term health care is
aggravated by a growing shortage of nurses and nurse assistants.
To address this need, the Administration has correctly proposed
increasing the National Health Service Corps and Nurse Education
scholarship and loan programs by about $50 million. But at the same
time, it has proposed to cut nearly $300 million from the programs that
actually train the doctors, physician assistants, pharmacists and lab
technicians we need. With the shortages in these critical areas, these
cuts will devastate our public health system. In the interest of
national security and public health, we should be boosting funding for
training, not cutting it.
We must also improve access to care for the uninsured. The
Administration has proposed funding increases for Community Health
Centers by $114 million. But it has called for eliminating the
Community Access Program (CAP). This $105 million program helps
communities coordinate public and private efforts to provide medical
care to the underinsured and uninsured. CAP limits redundancy in
federal expenditures and leverages private money to provide health
care, ensuring the federal government gets more bang for its buck.
Killing this program would seriously hurt our ability to wisely use
federal dollars to help the uninsured.
The Administration has also appropriately highlighted disease
prevention and allocated $20 million in new money for the Healthy
Communities Initiative. But it has cut $57 million from the CDC's
chronic disease programs, which address illnesses like cancer,
cardiovascular disease, and, diabetes. Chronic diseases account for 60%
of our nation's health care costs. If we want to prevent disease and
its costs, cutting CDC's efforts in this area is a bad idea.
The details of this health care budget often reflect a plan that
takes one step forward and two steps back. In many cases I agree with
the Administration's stated goals, but this budget would not help us
achieve them or improve health care for all Americans. Congress must
improve this proposal.
______
Prepared Statement of Hon. Barbara Cubin, a Representative in Congress
from the State of Wyoming
In the interest of time, Mr. Chairman, I will get right to the
point of my statement.
My primary concern in any budget is its overall effect on rural
states. To say that my home state of Wyoming is rural is an over
simplification because what we are in fact is ``frontier.''
According to the Webster's dictionary, ``frontier'' is defined as a
region that forms the margin of settled or developed territory; a new
field for developmental activity.
As a region with roughly 100,000 square miles, and 480,000 people,
with rugged mountainous terrain, and an unforgiving climate, Wyoming is
perhaps this country's last frontier.
So when vital health programs are cut from the budget, patients in
my district scramble for care, and many health care professionals pack
up their desk and head home for good.
That is not an exaggeration.
While I am very pleased with the President's budget increases for
the National Health Service Corps and Community Health Centers, I am
concerned about the cuts to a variety of other rural health programs
that directly benefit my state.
Examples include: State Offices of Rural Health, the Health
Professions Program, and Rural Health Outreach and Network Development
Grant--to name a few.
While I understand budgetary constraints, we simply cannot cut the
legs out from under rural health communities across this country. The
effects could be devastating.
I look forward to having the Secretary address these rural programs
and, with that, I yield back my time. Thank you.
______
Prepared Statement of Hon. Henry A. Waxman, a Representative in
Congress from the State of California
Secretary Thompson, it is a pleasure to have you with us today.
I know from your testimony and the Administration's budget
documents that you are here to paint a rosy picture of the
Administration budget for HHS. Indeed there are some aspects that are
very positive--increases for the national health service corps,
increases for the important work of NIH, increases for the support of
the Office for Generic Drug review in the FDA, to name a few.
But unfortunately, as I look at this budget, I find the picture is
much more one of disappointment than progress.
First and foremost, it clearly does not provide sufficient support
for an adequate and comprehensive prescription drug benefit under
Medicare. The dollars allocated in this budget fall far short of what
is needed--in fact, I would argue four times as much is needed as the
amount you have allocated--and certainly will not allow us to construct
a decent program that will meet the needs of our senior citizens.
Second, despite the rhetoric about providing coverage for the
uninsured, I see a budget that proposes a system of individual tax
credits that would undermine the current employer based system of
coverage and rely on an individual insurance market that does not
provide affordable coverage for people who are sick or have chronic
health conditions--in other words, the very people who need it. And I
see a budget that does not make use of the strengths and successes we
have had in our public programs of Medicaid and SCHIP. We know those
programs work; we know extending coverage effectively reduces the
number of uninsured.
Further, this budget fails to provide assistance to the States to
maintain and expand their Medicaid programs through endorsement of a
higher Federal matching rate or through correction of declining support
for disproportionate share institutions, and indeed cuts back on
necessary support through arbitrary changes in the upper payment limit
programs.
Nothing in the budget takes us forward through expanding coverage
for the severely disabled, through removing senseless restrictions that
keep States from extending coverage to legal immigrant children,
through expanded coverage for severely disabled children and their
families, through better dental services, to name just a few.
Instead we see proposals that undermine the protections of the
current program through waiver programs that take away from the poorest
beneficiaries to support limited expansion to others.
I'm disappointed that in place after place in the budget, you've
given with one hand but taken back with another, whether it is the
reductions in manpower programs, the elimination of the CAP program,
the effective cut in the prevention block grant, the flat funding of
the Ryan White AIDS program, family planning, and many traditional
public health programs that we know work.
I look forward to hearing from you today, to improving this budget,
and to working to expand and strengthen our programs to protect and
improve the health of the American people. Thank you.
Mr. Bilirakis. Please proceed, Mr. Secretary. I apologize.
STATEMENT OF HON. TOMMY THOMPSON, SECRETARY, U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
Mr. Thompson. Chairman Bilirakis and Congressman Brown, and
members of the committee, I thank you so very much for your
hospitality and your willingness to work with me. I appreciate
it very much.
I would like to point out that we want to be very
responsive to all members of this committee, and to Congress.
We are very happy to report that we have been able to reduce
the response time from CDC and CMS from 70 days when I first
came in here as Secretary, and now down to 20 days, and we are
working toward our goal of 15 days.
And if you do not receive a response, and you feel that it
is not timely, please call me personally, and I will take care
of it.
This budget, Mr. Chairman and members, was sent down with
three priorities.
The first one was of course the war that has taken place,
the second one was homeland security, and the third one is
taking care of the needs of the American public.
So it is an honor to come before you today to discuss the
President's fiscal year 2003 budget for the Department of
Health and Human Services. Mr. Chairman, it is always good to
see you, and thank you for your tremendous leadership in
advancing a sound health care agenda for our country.
Congressman Brown, thank you for your deep concern with
many of the issues that are facing us today. And to all of you,
thank you so very much for your bipartisan support. During the
past 13 months we have witnessed some significant achievements
in the Department of Health and Human Services.
I will detail some of them in the course of my testimony.
The total HHS request for fiscal year 2003 is $489 billion. The
discretionary component totals $64 billion, and budget
authority, an increase of 3.9 percent over the fiscal year 2002
budget.
Let me begin by discussing our efforts on bioterrorism.
After September 11th, I appointed Dr. D.A. Henderson, the
physician who spearheaded the successful drive to eradicate
small pox worldwide, to head a newly created Office of Public
Preparedness.
And about 20 feet away from my office, we have set up a 24
hour a day, 7 days a week, command center, where we receive
information from all over the world about possible bioterrorist
attacks.
And we have been very aggressive and prudent in our work to
prepare for any biological or chemical threat our enemies could
use against us. To prepare further, President Bush and I
requested an additional $4.3 billion, an increase of 45 percent
over the current fiscal year, to support a variety of critical
activities to prevent, identify, and respond to incidents of
bioterrorism.
We are also requesting more than half-a-billion dollars for
our hospital preparedness program, which will strengthen local
hospital preparation for biological and chemical attacks, and
expand the surge capacity.
We are currently providing the $1.1 billion that Congress
on a bipartisan basis appropriated for State governments to
strengthen their capacity to respond to bioterrorism and other
public health emergencies.
We are also developing a system to connect every major
county and metropolitan region with the Health Alert Network.
We have the best opportunity, ladies and gentlemen, to develop
a public health system that all of us can be very proud of.
The Congress on a bipartisan basis appropriated
supplemental money to address immediate public health needs
related to bioterrorism preparedness. We have responded by
making 20 percent of the total funds immediately available to
the States, and the remaining 80 percent will also be
distributed expeditiously.
The NIH is researching better anthrax, plague, hemorrhagic
fever vaccines. We are purchasing an additional 154 million
doses of smallpox vaccine. The result will be that by the end
of this year every man, woman, and child, in America will have
the vaccine he or she needs.
When it comes to bioterrorism, we are growing stronger in
our preparedness each and every day. We are also advancing
important biomedical research, and the budget provides $5.5
billion for research of cancer throughout NIH, and a total of
$3.7 billion for HIV AIDS related research.
We are also requesting $20 million for a Healthy
Communities Initiative. This is a new effort, ladies and
gentlemen, that is going to concentrate department-wide
expertise on the prevention of diabetes, asthma, obesity, and
health disparities in minority communities.
I am deeply concerned, as all of you are, about how obesity
is affecting our health as a people. Roughly 3 out of every 5
adults are overweight, and approximately 300,000 U.S. deaths a
year currently are associated with obesity and simply weighing
too much.
The total direct and indirect costs attributed to being
overweight and to obesity amounted to $117 billion in the year
2000. We also have a serious problem with diabetes. Nearly 16
million Americans have diabetes, and 800,000 more fall victims
to the disease annually.
This epidemic is witnessing a terrible increase, tripling
within the last three decades. Yet, we have got solid research
showing that if you exercise just 30 minutes a day, and walking
is a perfectly suitable form of exercise, and lose 10 to 15
pounds, your risk of getting diabetes falls by nearly 60
percent.
When you extrapolate that, we spend $100 billion a year on
diabetes, and if we were able to reduce the instance of
diabetes by 60 percent, that is a savings of $60 billion.
The President and I, and I know you are as well, are
absolutely passionately committed to our across the board
prevention initiative. Preventive health care saves huge
amounts of money, but more importantly can save untold
thousands of lives.
We are also helping to prepare low income Americans for
their future, and that is why welfare reform remains so
important. The good news is that sine 1996, nearly 7 million
fewer people are on welfare today than in 1996, and 2.8 million
fewer children are in poverty, in large part because welfare
has been transformed, and is transforming.
We are calling for a continued commitment to child care,
including $2.7 billion for entitlement child care funding, and
$2.1 billion for discretionary funding. We are giving the
States the flexibility they need to make effective education
and job training programs with work, as well as money to
strengthen families and reduce illegitimacy.
Strengthening Medicare is another key component of our
across the board effort to broaden and strengthen our country's
health care system. The 2003 budget dedicates $190 billion over
10 years for immediate targeted improvements, and comprehensive
Medicare modernization, including the subsidized prescription
drug benefit, better insurance protection, and better private
options for all beneficiaries.
I know that this committee and other members do not believe
that is enough, but I think we should work together to find the
right amount. The administration recognizes the need to act now
to help seniors obtain prescription drug coverage.
Our budget provides $77 billion and $8 billion through the
year 2006 for States to expand drug only coverage to low income
Medicare recipients whose income is $150 percent of the Federal
poverty rate.
And also the Federal Government will pay 90 percent of the
costs for drugs for individuals from 100 percent of poverty to
150 percent of poverty. Also this year, HHS will continue to
work to implement the President's proposed Medicare endorsed
prescription drug card.
The card will give beneficiaries immediate access to
manufacturer discounts on their medicines and other valuable
pharmaceutical purchases. At the same time, and as was
mentioned several times, we cannot ignore the roughly 40
million Americans who lack health insurance.
Since January 2001, we have approved State plan amendments
in Medicaid and S-CHIP waivers that have expanded the
opportunity for health coverage to 1.8 million Americans, and
improved existing benefits to 4.5 million individuals.
I want to point out that we have handed out 1,500 waivers
and modifications of State plans, and we are no longer behind.
When I came in there were some waivers going back to 1986, and
right now we are current, and we get waivers out within 90
days.
The 2003 budget also seeks $1.5 billion to support the
President's plan to impact 1,200 communities with new or
expanded health centers by 2006. This is a $114 million
increase over fiscal year 2002, and would support 170 new and
expanded health centers, and provide services to 1 million
additional patients.
And last week, we issued 27 grants totaling $12 million
under President Bush's Health Centers Initiative to help more
Americans gain access to quality health care. In addition, the
President's budget includes $89 billion in new health credits
to help American families buy health insurance, which will
provide health coverage for many low income families.
And I know, Mr. Chairman, and members of this committee,
that we have taken some of the suggestions of this committee
last year and put it into the new plan. So that an individual
can apply and get a number from a regional IRS office, and
immediately take that number to an insurance agency, and apply
for it.
It also gives States the opportunity to pool the uninsured,
which will lower their costs. Mr. Chairman, I know that many
members of this committee are concerned about PDUFA
reauthorization. FDA and the industry have been negotiating in
good faith for many months. We spent last weekend tying up the
ends, and today we will have completed our deal.
We have developed a sound plan. The agreement reached
several weeks ago calls for increased resources for FDA,
including more funding for drug safety after drug approval, a
concern that some of you have mentioned already.
The agreement also urges earlier communications between
drug and biologic innovators, and the FDA during the approval
and review process. Working together with you, and with
Chairman Tauzin, and with the other members of this committee,
we can reach an accord on PDUFA that will serve our Nation
well.
Mr. Chairman, this comprehensive aggressive budget
addresses the most pressing public health challenges facing our
Nation, from bioterrorism preparedness to coverage for the
uninsured in order to ensure a safe and healthy America.
I am confident that working together, we can finish to
improve the health and well-being of our fellow citizens. I did
a 20 minute speech in less than 10 minutes, and I want to thank
you, Mr. Chairman, for letting me come before you today. I look
forward now to answering your questions.
[The prepared statement of Hon. Tommy G. Thompson follows:]
Prepared Statement of Hon. Tommy G. Thompson, Secretary, Department of
Health and Human Services
Good Morning Mr. Chairman and members of the Sub-Committee. I am
honored to appear before you today to discuss the President's FY 2003
budget for the Department of Health and Human Services. I am confident
that a review of the full details of our budget will demonstrate that
we are proposing a balanced and responsible approach to ensuring a safe
and healthy America.
The budget I present to you today fulfills the promises the
President has made and proposes creative and innovative solutions for
meeting the challenges that now face our nation. Since the September
11th attacks we have dedicated much of our efforts to ensuring that the
nation is safe. HHS was one of the first agencies to respond to the
September 11th attacks on New York City, and began deploying medical
assistance and support within hours of the attacks. Our swift response
and the overwhelming task of providing needed health related assistance
made us even more aware that there is always room for improvement. The
FY 2003 budget for the Department of Health and Human Services builds
on President Bush's commitment to ensure the health and safety of our
nation.
The FY 2003 budget places increased emphasis on protecting our
nation's citizens and ensuring safe, reliable health care for all
Americans. The HHS budget also promotes scientific research, builds on
our success in welfare reform, and provides support for childhood
development while delivering a responsible approach for managing HHS
resources. Our budget plan confronts both the challenges of today and
tomorrow while protecting and supporting the well being of all
Americans.
Mr. Chairman, the HHS budget request for FY 2003 totals $488.8
billion in outlays, an increase of $29.2 billion or +6.3 percent over
the comparable FY 2002 budget. The discretionary component totals $64.0
billion in budget authority, an increase of $2.4 billion , or +3.9
percent over FY 2002. Let me now discuss some of the highlights of the
HHS budget and how we hope to achieve our goals.
PROTECTING THE NATION AGAINST BIOTERRORISM
Mr. Chairman, as you know, the Department of Health and Human
Services is the lead federal agency in countering bioterrorism. In
cooperation with the States, we are responsible for preparing for, and
responding to, the medical and public health needs of this nation. The
FY 2003 budget for HHS bioterrorism efforts is $4.3 billion, an
increase of $1.3 billion, or 45 percent, above FY 2002. This budget
supports a variety of activities to prevent, identify, and respond to
incidents of bioterrorism. These activities are administered through
the Centers for Disease Control and Prevention (CDC), the National
Institutes of Health (NIH), the Office of Emergency Preparedness (OEP),
the Substance Abuse and Mental Health Services Administration (SAMHSA),
the Health Resources and Services Administration (HRSA) and the Food
and Drug Administration (FDA). These efforts will be directed by the
newly established Office of Public Health Preparedness (OPHP).
On January 31, 2002, HHS announced plans for making $1.1 billion
available to States. This funding is available for hospital
preparedness, laboratory capacity, epidemiology, and emergency medical
response. Approximately 20 percent of this total either has already
been provided (or will be provided within the next few weeks) for
immediate expenditure to all eligible entities in base awards that will
be used to establish core programs and address current needs for
bioterrorism preparedness. The remaining 80 percent will be made
available for expenditure once the Secretary has approved the States'
work plans for their awarded funds. States will submit plans which will
be reviewed by the HHS staff to ensure that funding is used wisely for
bioterrorism efforts.
In order to create a blanket of preparedness against bioterrorism,
the FY 2003 budget provides funding to State and local organizations to
improve laboratory capacity, enhance epidemiological expertise in the
identification and control of diseases caused by bioterrorism, provide
for better electronic communication and distance learning, and support
a newly expanded focus on cooperative training between public health
agencies and local hospitals.
Funding for the Laboratory Response Network enhances a system of
over 80 public health labs specifically developed for identifying
pathogens that could be used for bioterrorism. Funding will also
support the Health Alert Network, CDC's electronic communications
system that will link local public health departments in covering at
least ninety percent of our nations' population. Funding will be used
to support epidemiological response and outbreak control, which
includes funding for the training of public health and hospital staff.
This increased focus on local and state preparedness serves to provide
funding where it best serves the interests of the nation.
An important part on the war against terrorism is the need to
develop vaccines and maintain a National Pharmaceutical Stockpile. The
National Pharmaceutical Stockpile is purchasing enough antibiotics to
be able to treat up to 20 million individuals in a year for exposure to
anthrax and other agents by the end of 2002. The Department is
purchasing sufficient smallpox vaccines for all Americans. The FY 2003
budget proposes $650 million for the National Pharmaceutical Stockpile
and costs related to stockpiling of smallpox vaccines, and next-
generation anthrax vaccines currently under development.
Another important aspect of preparedness is the response capacity
of our nation's hospitals. Our FY 2003 budget provides $518 million for
hospital preparedness and infrastructure to enhance biological and
chemical preparedness plans focused on hospitals. The FY 2003 budget
will provide funding to upgrade the capacity of hospitals, outpatient
facilities, emergency medical services systems and poison control
centers to care for victims of bioterrorism. In addition, CDC will
provide support for a series of exercises to train public health and
hospital workers to work together to treat and control bioterrorist
outbreaks.
The FY 2003 budget also includes $184 million to construct, repair
and secure facilities at the CDC. Priorities include the construction
of an infectious disease/bioterrorism laboratory in Fort Collins,
Colorado, and the completion of a second infectious disease laboratory,
an environmental laboratory, and a communication and training facility
in Atlanta. This funding will enable the CDC to handle the most highly
infectious and lethal pathogens, including potential agents of
bioterrorism. Within the funds requested, $12 million will be used to
equip the Environmental Toxicology Lab, which provides core lab space
for testing environmental samples for chemical terrorism. Funding will
also be allocated to the ongoing maintenance of existing laboratories
and support structures.
The FY 2003 budget also includes $60 million for the development of
new Educational Incentives for Curriculum Development and Training
Program. The goals of this program will be the development of a health
care workforce capable of recognizing indications of a bioterrorist
event in their patients, that possesses the knowledge and skills to
best treat their patients, and that has the competencies to rapidly and
effectively inform the public health system of such an event at the
community, State and national level.
INVESTING IN BIOMEDICAL RESEARCH
Advances in scientific knowledge have provided the foundation for
improvements in public health and have led to enhanced health and
quality of life for all Americans. Much of this can be attributed to
the groundbreaking work carried on by, and funded by, the National
Institutes of Health (NIH). Our FY 2003 budget enhances support for a
wide array of scientific research, while emphasizing and supporting
research needed for the war against bioterrorism.
NIH is the largest and most distinguished biomedical research
organization in the world. The research that is conducted and supported
by the NIH offers the promise of breakthroughs in preventing and
treating a number of diseases and contributes to fighting the war
against bioterrorism. The FY 2003 budget includes the final installment
of $3.9 billion needed to achieve the doubling of the NIH budget. The
budget includes $1.75 billion for bioterrorism research, including
genomic sequencing of dangerous pathogens, development of zebra chip
technology, development and procurement of an improved anthrax vaccine,
and laboratory and research facilities construction and upgrades
related to bioterrorism. With the commitment to bioterrorism research
comes our expectation of substantial positive spin-offs for other
diseases. Advancing knowledge in the arena of diagnostics, therapeutics
and vaccines in general should have enormous impact on the ability to
diagnose, treat, and prevent major killers-diseases such as malaria,
TB, HIV/AIDS, West Nile fever, and influenza.
The FY 2003 budget also provides $5.5 billion for research on
cancer throughout all of NIH. Currently, one of every two men and one
of every three women in the United States will develop some type of
cancer over the course of their lives. New research indicates that
cancer is actually more than 200 diseases, all of which require
different treatment protocols. Promising cancer research is leading to
major breakthroughs in treating and curing various forms of cancer. Our
budget continues to expand support for these research endeavors. The FY
2003 budget also includes a total of $2.8 billion for HIV/AIDS-related
research. NIH continues to focus on prevention research, therapeutic
research to treat those already infected, international research, and
research targeting the disproportionate impact of AIDS on minority
populations in the United States.
PRESCRIPTION DRUG USER FEES
As a result of our investment in biomedical research through the
NIH, new breakthrough drugs and medical treatments will be discovered
to treat and cure serious diseases afflicting millions of Americans. A
major mission for the Food and Drug Administration is to determine
which of these therapies are safe and effective and to get these on the
market quickly. The Prescription Drug User Fee Program known as PDUFA,
enacted by Congress in 1992, has been enormously successful in speeding
up drug approval times. This program is due for reauthorization this
year and is one of the top priorities of the Administration. I commend
you, Mr. Chairman, and the Members of this Committee, for your
leadership in this area and we appreciate your bipartisan commitment to
act quickly to reauthorize this key program during this fiscal year and
to ensure that enactment of this legislation is not put at risk by the
inclusion of controversial provisions.
As you are aware, the FDA and the drug and biologics
representatives have agreed upon a blueprint containing the proposed
specifications for the reauthorization of PDUFA III with input from
consumer and patient groups, health professionals, and other
organizations. This proposal calls for significant increases in user
fees to put the program on sound financial footing and make the
collection of fees more predictable. The proposed drug user fee amount
would be $222.9 million in FY 2003 with increases in the out years to
$259.3 million in FY 2007. The FY 2003 request is approximately a $90
million increase over the $133 million that was collected for FY2001.
The PDUFA III proposal includes several important new initiatives. One
of the more significant among these is the agreement to use industry
fees to significantly expand the capacity of FDA to conduct risk
management activities during the first few years after drugs are
approved. We expect that this will lead to more targeted and effective
drug prescribing patterns by physicians and fewer adverse effects for
patients.
SUPPORTING HEALTHY COMMUNITIES
The FY 2003 budget includes $25 million for a Healthy Communities
Innovation Initiative--a new interdisciplinary services effort that
will concentrate Department-wide expertise on the prevention of
diabetes and asthma, as well as obesity. Of this amount, $20 million is
available in HRSA. The purpose of the initiative is to reduce the
incidence of these diseases and improve services in 5 communities
through a tightly coordinated public/private partnership between
medical, social, educational, business, civic and religious
organizations. These chronic diseases were chosen because of their
rapidly increasing prevalence within the United States. In addition
there is $5 million in CDC for a national media campaign to promote
physical fitness activities, with an emphasis on families and
communities.
More than 16 million Americans currently suffer from a preventable
form of diabetes. Type II diabetes is increasingly prevalent in our
children due to the lack of activity. In a recent study conducted by
NIH, participants that were randomly assigned to intensive lifestyle
intervention experienced a reduced risk of getting Type II diabetes by
58 percent. HHS plans to reach out to women and minorities to help make
this initiative a success.
INCREASING ACCESS TO HEALTHCARE
Of all the issues confronting this Department, none has a more
direct effect on the well being of our citizens than the quality and
accessibility of health care. Our budget proposes to improve the health
of the American people by taking the steps to increase and expand the
number of Community Health Centers, strengthen Medicaid, and ensure
patient safety.
Community Health Centers provide family oriented preventive and
primary health care to over 11 million patients through a network of
over 3,400 health sites. The FY 2003 budget will increase and expand
the number of health center sites by 170, the second year of the
President's initiative is to increase and expand sites by 1,200 and
serve an additional 6.1 million patients by 2006. We propose to
increase funding for these Community Health Centers by $114 million in
FY 2003. Our long-term goal is to increase the number of people who
receive high quality primary healthcare regardless of their ability to
pay. With these new health centers, we hope to achieve this goal.
In addition to expanding Community Health Centers, we are seeking
to expand the National Health Service Corps by $44 million. Currently,
more than 2,300 health care professionals are providing service to
health centers patients and others in under-served communities.
The Medicaid program and the State Children's Health Insurance
Program (SCHIP) provide health care benefits to low-income Americans,
primarily children, pregnant women, the elderly, and those with
disabilities. The FY 2003 budget we propose strengthens the Medicaid
and SCHIP programs by implementing essential reforms in the way we pay
for prescription drugs, by extending expiring SCHIP funds, and by
testing solutions to barriers in community living for disabled children
and adults.
We propose to extend coverage of Medicare Part B premiums for
people with incomes between 120 and 135 percent of the Federal poverty
level, also known as Qualifying Individuals (QI-1s), for one year until
September 2003. Currently, States through the Medicaid program must pay
for the Medicare premiums and cost sharing for certain low-income
Medicare beneficiaries. The funding to pay for Part B premiums for QI-
1s expires in September 2002. This proposal would ensure no
interruption of current benefits while discussions take place about how
better to integrate the QI-1 programs with other Medicaid programs that
also pay Medicare premiums.
For FY 2003, we propose to continue Transitional Medicaid
Assistance for an additional year and provide families with an
important incentive to work. Currently, States are required to provide
up to one year of Medicaid for families who, due to work, would
otherwise lose Medicaid eligibility. The provision is due to expire in
September 2002. We propose to allow families to continue to take those
first steps toward self-sufficiency--often in jobs without health
insurance--without fear that their medical bills will leave them worse
off than before. The initiative would cost $350 million.
Also, we propose to work with stakeholders to develop legislative
proposals that build on the Health Insurance Flexibility and
Accountability (HIFA) demonstration in order to give states the
flexibility they need to design innovative ways of increasing access to
health insurance coverage for the uninsured. The Administration's plan
also would allow at State option those who receive the President's
health care tax credit to increase their purchasing power by purchasing
insurance from private plans that already participate in their State's
Medicaid, Children's Health Insurance, or State employees' programs.
This could help keep costs down and provide a more comprehensive
benefit than plans in the individual market. Further, this will give
tax credit recipients a range of choices among insurance products,
which the new tax credit program will make affordable.
Additionally, as part of the New Freedom Initiative, a nationwide
effort to support community based models of care that help remove the
barriers of equality that face individuals with disabilities, we
propose four demonstrations to test solutions to many of the barriers
to community living for disabled children and adults. Two
demonstrations will provide Medicaid respite services to caregivers of
disabled adults and to caregivers of significantly disabled children. A
third demonstration will allow home and community-based services as an
alternative for children receiving care in a residential treatment
facility. All three of these demonstrations will help the
Administration evaluate the feasibility of providing such services
under the Medicaid program. A fourth demonstration will address the
shortage of direct service workers.
We also need to make an effort to narrow the drug treatment gap. As
reflected in the National Drug Control Strategy, Substance Abuse and
Mental Health Services Administration estimates that 4.7 million people
are in need of drug abuse treatment services. However, fewer than half
of those who need treatment actually receive services, leaving a
treatment gap of 3.9 million individuals. Our budget supports the
President's Drug Treatment Initiative, and to narrow the treatment gap.
We propose to increase funding for the initiative by $127 million.
These additional funds will allow State and local communities to
provide treatment services to approximately 546,000 individuals, an
increase of 52,000 over FY 2002.
STRENGTHENING MEDICARE
The FY 2003 budget dedicates $190 billion over ten years for
immediate targeted improvements and comprehensive Medicare
modernization, including a subsidized prescription drug benefit, better
insurance protection, and better private options for all beneficiaries.
Last year, President Bush proposed a framework for modernizing and
improving the Medicare program that built on many of the ideas that had
been developed in this Committee and by other Members of Congress.
That framework includes the principles that:
All seniors should have the option of a subsidized
prescription drug benefit as part of modernized Medicare.
Modernized Medicare should provide better coverage for
preventive care and serious illness.
Today's beneficiaries and those approaching retirement should
have the option of keeping the traditional plan with no
changes.
Medicare should make available better health insurance
options, like those available to all Federal employees.
Medicare legislation should strengthen the program's long-term
financial security.
The management of the government Medicare plan should be
strengthened to improve care for seniors.
Medicare's regulations and administrative procedures should be
updated and streamlined, while instances of fraud and abuse
should be reduced
Medicare should encourage high-quality health care for all
seniors.
The President's FY 2003 Budget also includes a series of targeted
immediate improvements to Medicare, which can be implemented as part of
comprehensive Medicare legislation, to provide both immediate benefit
improvements for seniors and to help implement a Medicare drug benefit
and other long-term improvements more effectively.
The improvements the President and I have proposed include not only
a subsidized drug benefit as part of modernized Medicare, but also
providing better coverage for preventive care and serious illness. The
program's lack of drug coverage is just one example of its outdated
benefits and it will have even more difficulty giving beneficiaries
modern and appropriate treatment for their health problems in the
future. We propose that preventive benefits have zero co-insurance and
be excluded from the deductible. We must make these improvements to
more effectively address the health needs of seniors today and for the
future.
Let me assure you, the President remains committed to framework he
introduced last summer, and to bringing the Medicare program up to date
by providing prescription drug coverage and other improvements. We
cannot wait: it is time to act. Recognizing that there is no time to
waste, the President's Budget also includes a series of targeted
immediate improvements to Medicare.
As you know, last year the President proposed the creation of a new
Medicare-endorsed prescription drug card program to reduce the cost of
prescription drugs for seniors. This year, HHS will continue working to
implement the drug card, which will give beneficiaries immediate access
to manufacturer discounts on their medicines and other valuable
pharmacy services. The President is absolutely committed to providing
immediate assistance to seniors who currently have to pay for
prescription drugs.
Assistance, however, will not come only through the prescription
drug card program. The budget proposes several new initiatives to
improve Medicare's benefits and address cost. This budget proposes
additional federal assistance for drug coverage to low-income Medicare
beneficiaries up to 150% of poverty--about $17,000 for a family of two.
This policy would eventually expand drug coverage for up to 3 million
beneficiaries who currently do not have prescription drug assistance,
and it will be integrated with the Medicare drug benefit that is
offered to all seniors once that is in place. This policy helps to
establish the framework necessary for a Medicare prescription drug
benefit and is essentially a provision that is in all of the major drug
benefit proposals to be debated before Congress. That is, the policy
provides new Federal support for comprehensive coverage of low-income
seniors up to 150 percent of poverty. And in all the proposals, the
Federal government would work with the states to provide this coverage,
just as we are proposing with this policy.
In addition, I recently announced a model drug waiver program--
Pharmacy Plus--to allow States to reduce drug expenditures for seniors
and certain individuals with disabilities with family incomes up to 200
percent of the federal poverty level. This program is being done
administratively. The Illinois initiative illustrates how we can expand
coverage to Medicare beneficiaries in partnership with the federal
government. The program we approved will give an estimated 368,000 low-
income seniors new drug coverage.
The President's budget also includes an increase in funding to
stabilize and increase choice in Medicare+Choice program by aligning
payment rates more closely with overall Medicare spending and paying
incentives for new types of plans to participate. Over 500,000 seniors
lost coverage last year because Medicare+Choice plans left the program.
Today close to 5 million seniors choose to receive quality health care
through the Medicare+Choice program. Because it provides access to drug
coverage and other innovative benefits, it is an option many seniors
like, and an option we must preserve. The President's budget also
proposes the addition of two new Medigap plans to the existing 10
plans. These new plans will include prescription drug assistance and
protect seniors from high out-of-pocket costs.
Some of these initiatives give immediate and tangible help to
seniors. But, let me make clear: these are not substitutes for
comprehensive reform and a universal drug benefit in Medicare. They are
immediate steps we want to take to improve the program in conjunction
with comprehensive reform, so that beneficiaries will not have to wait
to begin to see benefit improvements. I want to pledge today to work
with each and every member of this Committee to fulfill our promise of
health care security for America's seniors--now and in the future.
IMPROVING MANAGEMENT AND PERFORMANCE OF HHS PROGRAMS
I am committed to being proactive in preparing the nation for
potential threats of bioterrorism and supporting research that will
enable Americans to live healthier and safer lives. And, I am excited
about beginning the next phase of Welfare reform and strengthening our
Medicare and Medicaid programs. Ensuring that HHS resources are managed
properly and effectively is also a challenge I take very seriously.
For any organization to succeed, it must never stop asking how it
can do things better, and I am committed to supporting the President's
vision for a government that is citizen-centered, results oriented, and
actively promotes innovation through competition. HHS is committed to
improving management within the Department and has established its own
vision of a unified HHS--One Department free of unnecessary layers,
collectively strong to serve the American people. The FY 2003 budget
supports the President's Management Agenda.
The Department will improve program performance and service
delivery to our citizens by more strategically managing its human
capital and ensuring that resources are directed to national
priorities. HHS will reduce duplication of effort by consolidating
administrative management functions and eliminating management layers
to speed decision-making. The Department plans to reduce the number of
personnel offices from 40 to 4 and consolidate construction funding,
leasing, and other facilities management activities. These management
efficiencies will result in an estimated savings of 700 full time
equivalent positions, allowing the Department to redeploy staff and
other resources to advance primary missions.
HHS continues working to improve budget and performance integration
in support of the Government-wide effort. Although we work in a
challenging environment where health outcomes may not be apparent for
several years, and the Federal dollar may be just one input to complex
programs, HHS is committed to demonstrating to citizens the value they
receive for the tax dollars they pay.
By expanding our information technology and by establishing a
single corporate Information Technology Enterprise system, HHS can
build a strong foundation to re-engineer the way we do business and can
provide better government services at reduced costs. By consolidating
and modernizing existing financial management systems our Unified
Financial Management System (UFMS) will provide a consistent,
standardized system for departmental accounting and financial
management. This ``One Department'' approach to financial management
and information technology emphasizes the use of resources on an
enterprise basis with a common infrastructure, thereby reducing errors
and enhancing accountability. The use of cost accounting will aid in
the evaluation of HHS program effectiveness, and the impacts of funding
level changes on our programs.
HHS is also committed to providing the highest possible standard of
services and will use competitive sourcing as a management tool to
study the efficiency and performance of our programs, while minimizing
costs overall. The program will be linked to performance reviews to
identify those programs and program components where outsourcing can
have the greatest impact. Further, the incorporation of performance-
based contracting will improve efficiency and performance at a savings
to the taxpayer.
WORKING TOGETHER TO ENSURE A SAFE AND HEALTHY AMERICA
Mr. Chairman, the budget I bring before you today contains many
different elements of a single proposal; what binds these fundamental
elements together is the desire to improve the lives of the American
people. All of our proposals, from building upon the successes of
welfare reform, to protecting the nation against bioterrorism; from
increasing access to healthcare, to strengthening Medicare, are put
forward with the simple goal of ensuring a safe and healthy America. I
know this is a goal we all share, and with your support, we are
committed to achieving it.
Mr. Bilirakis. Right on 10 minutes. I am really not anxious
to get into questions, though it seems like it today doesn't
it? I will start. Mr. Secretary, the administration has
requested that we find offsets for all new health care
expenditures this year, and to pass and provide a payment bill
in a budget neutral manner.
At the same time, we will have to fix several very serious
Medicaid and Medicare problems, including correcting the
formula for setting physician reimbursement, and reducing some
of the shortfalls for certain Medicaid providers.
I ask, has the administration been able to identify any
areas for potential savings that could be used to offset the
costs of these very important initiatives. If they have, and a
list is being compiled, when can we have that made available to
us?
Mr. Thompson. Mr. Chairman, we have worked extremely hard
on this, because we know it is a subject that a lot of
individuals on this committee and throughout Congress are
concerned about, as well as many providers.
It is a very difficult question, and we have been working
hard on it. We have come up with several suggestions, and we
are responding to Chairman Thomas' letter that was sent to us a
couple weeks ago.
And we should have the final decisions made, and the final
recommendations made, sometime this week. We expect to give
that report to Chairman Thomas, I believe, sometime tomorrow.
And then the rest of the members that have requested it,
such as yourself, Mr. Chairman, will receive it, I hope, on
Friday morning.
Mr. Bilirakis. Friday morning? Okay.
Mr. Thompson. And we want to work with you on it, and it is
a whole list of recommendations on----
Mr. Bilirakis. Are you open to suggestions?
Mr. Thompson. We are open to all kinds of suggestions. We
know that there is not any easy answer, and I want you to know
that all providers are on the table, and that is what has to be
done, because you have home help, and you have got outpatients,
and you have got the health, and you also have the doctors and
the outpatients.
All of these together, and we have got recommendations on
all of them, Mr. Chairman.
Mr. Bilirakis. Mr. Secretary, given the many problems
associated with the existing Physician Payment Formula, we have
talked about this time and again, our committee on a bipartisan
basis is committed to changing the payment structure
legislatively to ensure that 5 percent cuts never happen again.
I know that you are encouraging us to do this
legislatively. I wonder, is the administration taking any steps
to change that formula and to make suggestions in changes of
that formula, and if you are, what might those steps be? Are
you trying to address the issue?
Mr. Thompson. We are trying to address the issue in total,
and my response to Chairman Thomas is that what I want you to
know is that any change is statutory and must be made by
Congress. We can't do it administratively.
We can make recommendations, but Congress will have to make
the final decision on it.
Mr. Bilirakis. All right. Are you making recommendations to
Chairman Thomas? You have mentioned him 2 or 3 times already.
Mr. Thompson. Well, he is the one that precipitated our
action by sending us a letter with a whole list of questions
that we are trying to respond to, and we hopefully are going to
get that information to him sometime tomorrow afternoon.
Mr. Bilirakis. Mr. Brown, Mr. Tauzin, Mr. Dingell, and I,
have introduced a piece of legislation to make some changes.
Mr. Thompson. I know you have.
Mr. Bilirakis. If you have any suggestions regarding any of
the changes that we propose to make, we certainly would
appreciate hearing them.
Mr. Thompson. I think the best way to handle that, Mr.
Chairman, would be that as soon as this information is made
public, that we have a working group to sit down and I will
make my staff available at any time that your staff is
available, and let's work on your proposal.
And let's work on what Chairman Thomas of the Ways and
Means Committee comes up with, and let's see if we can't
develop a proposal that is suitable on a bipartisan basis that
can pass both Houses of Congress.
Mr. Bilirakis. Let me ask you, sir, about the upper payment
limit issue, some States are getting a larger break in terms
of----
Mr. Thompson. I don't think any State is getting a bigger
break over another, on the upper payment limit. First off,
under President Clinton, he put limits on the upper payment
limits for nursing homes and for private hospitals, and the
last remaining part of the equation was public hospitals OMB
requested the Department of Health and Human Services to draft
a rule for public hospitals.
We drafted that rule, and that rule will go into effect on
April 15 of this year, and it will put the public hospitals in
the same position as private hospitals, and skilled nursing
homes that were placed there under the Clinton Administration.
And under that all States were treated the same, and if you
had your proposal in, you received it. And I want you to know
that somebody mentioned that Wisconsin was treated differently,
and I want to point out it was not.
And that Wisconsin was treated before I got here, and the
amendment--Wisconsin does not have any public hospitals, and so
it does not get any upper payment limits for public hospitals,
only fur nursing homes.
Mr. Bilirakis. Well, I am not referring to Wisconsin, but I
am referring to some of the 7 and 8 year phase-in type of
things. They are basically taking advantage, if you can call
it, getting rewarded for more years for it.
Mr. Ganske. Mr. Chairman, that was a statutory thing, and
it was an amendment put in by Speaker Hastert, and it was
before I got here that that passed and became the law. And I
just want to point that out, that it is statutory, and several
States lobbied for it.
And Wisconsin, California, and Illinois were three, and I
don't know that you can criticize anybody that was able to
successfully get the Speaker to introduce it.
Mr. Bilirakis. I won't say anything further in that regard,
except to say that some of us are very unhappy about it.
Mr. Thompson. And I think the power of this body is to pass
legislation, and to put other States in the same position.
Mr. Bilirakis. Thank you very much. Mr. Brown to inquire.
Mr. Brown. Thank you, and thanks again, Mr. Secretary. The
only increased Medicare provider funding in your budget that I
can find is $3.4 billion for Medicare+Choice, and programs over
the next 10 years. What goals do you hope to achieve with that
$3.4 billion; more prescription drug coverage, or more reduced
cost sharing? Where do you go with that?
Mr. Thompson. Basically, as you know, Congressman Brown,
the Medicare+Choice program has been reducing the number of
coverages and the number of people.
Last year, we lost a little over 500,000 and we are down to
about 14.4 percent of the Medicare population covered by Medi-
care+Choice. And we felt that this was the only way that there
was going to be able to stem that. In 90 percent of the cases,
that reversal, because the individuals that had
Medicare+Choice, are very satisfied with it.
But the individual companies that are involved in Medi-
care+Choice cannot maintain it at the current reimbursement
rates, and we felt that it was necessary to try and increase
the rates and stem the tide of erosion of the coverage.
Mr. Brown. There has been legislation offered, and
bipartisan in some cases, to require that Medicare+Choice
count, and that Medicare HMOs agree once a beneficiary is
unenrolled that the Medicare+Choice plan must not for a period
of 1, 2, or 3 years, must agree to not cut benefits in any way.
Is that something that you would make part of this?
Mr. Thompson. It is not part of this, Congressman, and the
only--I am not opposed to that. The only caveat is that if a
company is losing benefits that they are losing dollars, and is
going to either go bankrupt or get out of the market.
And it is pretty hard to continue to force them to keep
going.
Mr. Brown. But are we getting any kind of assurances from
these companies as we put in more money last year, and we were
putting in this money now, are we getting any assurances from
them that they will not cut services, or allow prescription
drug coverage to atrophy, or whatever else might happen with
managed care----
Mr. Thompson. We do not have the legal authority to do so,
but we jawbone very effectively and tried to make sure that
none of the coverages are dropped. We do everything we possibly
an, and we get on the telephone and talk to the insurance
carriers, and do everything that we can to possibly keep them
in the business. But that is about as far as we can go
statutorily.
Mr. Brown. Are you asking for more statutory authority?
Mr. Thompson. At this point in time, no.
Mr. Brown. I am concerned that-and we have done this
before--that this Congress has put more money into provider
funding for the 14.4 percent of beneficiaries. Does that mean
85.6 percent beneficiaries don't get help that way?
And that the $190 billion in your budget for--well, the
required prescription drug coverage seems pretty inadequate if
we are looking at the FEHBP and those calculations for the
FEHBP, and to bring coverage to the level of FEHBP, and that
Federal employees, and Members of Congress have would cost $750
billion, what kind of prescription drug coverage do you see
with this $190 billion, in light of the fact that our numbers
that say half the FEHBP coverage for beneficiaries would need
$750 billion?
Mr. Thompson. These are figures from our actuaries at CMS,
Congressman Brown, and we feel that you can deliver the
beginning of prescription drug coverage. We know that this
Congress last year in the budget bill put aside $300,000
billion over 10 years.
But the President and this administration feels very
strongly that if you just do prescription drug coverage that it
is going to be a lot more costly.
But if you strengthen it and make some efficiencies, and
allow for some cost sharing, you are going to be able to get by
with $190 billion. My request of you--and I know that your
passionate on this, is to work with you, and try and develop a
figure, and try to develop a bipartisan Medicare proposal.
And instead of eroding it, it strengthens it, and makes it
financially suitable and financially solvent. This is the
President's objective, and it's mine, and I know it is yours. I
only hope we can set aside partisan politics, and get on with a
bipartisan approach, and I want to work with you to accomplish
that.
Mr. Brown. Well, we wold love to do that, but the problem
is not you, but the President has put us in a box where he
wants $590 billion more in tax cuts, and yet all you can offer
is $190 billion for prescription drugs; when even Speaker
Hastert has said $300 billion is what is necessary.
And then I look at what happens with Medicare+Choice, where
in 2001 when they get the extra billion dollars, that GAO found
that 70 percent of those plans didn't use the money to improve
benefits.
So how are we going to take care with the box that you have
put us in, where the tax breaks are primarily for upper income
people are putting us in a situation where we will have to
choose either a generous, or even an adequate, and forget
generous, prescription drug benefit, or it is tax breaks for
the wealthiest Americans.
Mr. Tauzin said we are not spending the money in a tax cut,
and you can say it however you want it. But the fact is that it
is a choice. We either do an FEHBP adequate generous level, or
what the AARP has said, about $700 billion or whatever number
you choose.
But certainly adequate or maybe generous, or we do the tax
cut and don't have this kind of money. I mean, I want to work
with you, but how do we get out of this box?
Mr. Bilirakis. A brief response to that, sir, because we
have two votes on the floor.
Mr. Thompson. First off, I don't want to put you in a box,
and second off, Medicare+Choice, companies are losing money,
and we wanted to keep them in the market because the individual
subscribers that have them believe in them, and like their
coverage, and like their programs.
I want to be able to maintain that, and that is why we are
trying to stabilize that. In regards to Medicare, $190 billion,
I think that is a giant first step, and I would like to work
with you, and I think that just instead of complaining about
the dollars--and I can understand your position--I would like
to be able to say why don't we start.
You know, instead of saying 750, 300, 190, let's start
looking at the whole subject, the Medicare Program, as well as
including the prescription drug. I am passionate about it, and
I know that you are.
And I would like to be able to come up with a Medicare
strengthened bill with catastrophic coverage, with a
prescription drug coverage, and also do something about the
first dollar coverage, and be able to do something together on
a bipartisan basis, but we can't do it unless we start, and I
am willing to start.
Mr. Bilirakis. All right. The Chair will recess. We have a
couple of votes on the floor, and as soon as those votes are
over, we will get started again.
[Brief recess.]
Mr. Bilirakis. The Chair will yield to Mr. Pallone to
inquire.
Mr. Pallone. Thank you, Mr. Chairman. Mr. Secretary, just
as sort of a forewarning, I want to ask about dietary
supplements, and I also want to ask about American Indians. So
if we get too far into it, I may switch to the other one just
so I can get to it if you don't mind.
On the dietary supplement issue, when you were here a year
ago, I had asked you a question about the good manufacturing
practices, and whether we were going to see those regulations
put into place.
And at the time, I believe you said within the next few
months, by June or so, and over a year has passed, and they
still have not been put into place. And I know that Senator
Harkin over in the other body put in $4 million last year for
the adverse event reporting.
In other words, if there had been incidents where there had
been problems with dietary supplements, that they would be
reported. And supposedly we were having the adverse event
reporting and $4 million spent on that, and then the FDA was
supposed to within 15 days publish the GMPs.
But as far as I know, none of this gas happened, and I
would just ask what is happening? Has that $4 million been
accepted by the FDA, and what are they doing about adverse
reporting, and when are these GMPs going to be published,
because they are obviously late?
Mr. Hubbard. I am Bill Hubbard from the FDA, Mr. Pallone.
On the GMPs, those regulations have been drafted, and they are
being discussed with the new deputy commissioner at the FDA,
who has just arrived. And he is looking at them and discussing
them with the Secretary's office.
So they should be done soon we hope; and on the adverse
event, the money has come to us, and we are setting a stronger
adverse reaction reporting system for dietary supplements.
And we will see results from that as the year flows
through.
Mr. Pallone. Again, I am not trying to be difficult, but it
is pretty much the same thing that we heard a year ago, and a
year has passed, and we haven't seen any progress to my
knowledge.
So I would just stress again how important it is to move
quickly on that, because as you know, we do have the incidents
in the media where there are things reported and there are some
problems.
And I think that those good manufacturers who really are
out there doing a good job would like to see these things
happen.
Mr. Hubbard. They would. You are absolutely correct,
Congressman, and there has been a lot of discussion and a lot
of controversy developing internally, and we have not had an
FDA commissioner, and we now have an individual that I think is
outstanding, and Dr. Crawford and I can assure you that we will
move very quickly on this thing. And I will keep you personally
informed myself.
Mr. Pallone. I appreciate that, and let me move on to the
Native American issue. A couple of things. You mention in your
speech about the Homeland Security Funding, and the Anti-
Bioterrorism Funding, and I think there is $3.1 billion for
homeland security, and $4.3 for Anti-Bioterrorism.
The tribes have been very concerned because they don't know
if they can access either pot of money.
Mr. Thompson. Yes, they can.
Mr. Pallone. Okay. If you could just comment on that,
because there is no specific language about it in the
legislation.
Mr. Thompson. Well, what we are doing with the bio-
terrorism money is that we have got $1.1 billion to get out.
The President signed the bill on January 10, and 21 days later
we had the letters out to all the Governors, and we have
already sent out 20 percent of the money. And 10 percent, which
is to set up their planning, and----
Mr. Pallone. Mr. Secretary, none of those letters went to
tribal governments, and so they are concerned about the----
Mr. Thompson. But I talked to the tribal governments at
their tribe----
Mr. Pallone. NCAI?
Mr. Thompson. Yes. I talked to them and they gave me an
award for----
Mr. Pallone. It is always helpful when they give you an
award.
Mr. Thompson. Yes. So I talked to them at that point, and
received it, and told them that I want them involved.
Mr. Pallone. Well, maybe there is some way to notify?
Mr. Thompson. And we went across the country, Congressman
Pallone, and we set up informational hearings, and we invited
all individuals involved. And if you want me to specifically
send out letters to them, I would be more than happy to. I
contacted them at the conference, at the Congress.
Mr. Pallone. I would appreciate it if some effort could be
made in a proactive way to contact them and say that is
available.
Mr. Thompson. I would be more than happy to do it. I want
them involved.
Mr. Pallone. All right. And then the last thin--and I want
to see how much time is left----
Mr. Thompson. What we are really trying to do with this
bioterrorism money, Congressman, is really trying to build a
strong local and State public health system. We have not done
that in America.
Mr. Pallone. Oh, I agree.
Mr. Thompson. And what we are doing is we are sending out
templates from what the best programs are in communications to
the State Health Departments. We figure it has got to be bought
into by the Government and the State Health Departments.
But we are demanding that those individuals go out and find
out from the tribes and from the----
Mr. Pallone. But you know how it is, Mr. Secretary, and I
don't have to tell you as you were the Governor of Wisconsin,
that----
Mr. Thompson. And I had 11 tribes.
Mr. Pallone. [continuing] they don't deal directly with----
Mr. Thompson. I appreciate the advice and we will do a
better job.
Mr. Pallone. One more quick question.
Mr. Bilirakis. If it is a quick question and quick answer,
and if there is no objection to it.
Mr. Pallone. I just wanted to ask you that you mentioned
diabetes in a major way, and about the new initiatives in your
statement.
Mr. Thompson. Yes.
Mr. Pallone. And obviously you know that is a huge problem
for Native Americans. How is this new initiative going to help
them or have they been taken into consideration in that?
Mr. Bilirakis. Can you do that in writing, Mr. Secretary?
Mr. Thompson. Yes.
[The following was received for the record:]
The Healthy Communities Innovation Initiative is a proposed
demonstration grant program to create healthy environments and
to improve health outcomes in areas where asthma, diabetes, and
obesity associated morbidity and mortality rates are high. The
program will be administered by HRSA and be modeled after the
successful Healthy Start community-based demonstration program.
Grants will be awarded competitively to public or nonprofit
private organizations, including tribal organizations, applying
as or on behalf of a community-based consortium. Therefore,
tribal organizations will be eligible to compete for these
grants to focus on innovative community-level efforts to
prevent and treat diabetes, obesity and asthma among Native
Americans. In addition, the Indian Health Service receives $100
million annually, specifically for the prevention and treatment
of diabetes among Americans and Alaska Natives. Funds are
distributed to 318 diabetes programs, primarily located in
Indian country, but including 33 programs in urban areas.
Mr. Pallone. That would be fine.
Mr. Thompson. We are doing a lot with the Native American
tribes.
Mr. Pallone. You can get back to me in writing. Thank you.
Mr. Bilirakis. Mr. Greenwood.
Mr. Thompson. We are doing a lot on it.
Mr. Greenwood. Thank you, Mr. Chairman.
Mr. Thompson. Congressman, how are you?
Mr. Greenwood. I'm fine, Mr. Secretary. The Oversight and
Investigations Subcommittee has been looking for some time at
the question of importation of drugs. It is a thorny
complicated question, because it has multi-facets, and it has
to do with people bringing prescriptions in from Canada and
Mexico.
Mr. Thompson. It is a serious problem.
Mr. Greenwood. But that is how we think of it for the most
part, but what we did is we went out to Dulles Airport, and we
had an airplane come in filled with passengers, and in the
belly of that plane was all of its freight.
And we watched as the freight was put through x-ray
machines, and then items that looked like they might be drugs
were pulled out and opened up, and inspected. And what we
discovered was a witches' brew of legal and illegal drugs.
Of course, no prescriptions involved in these drugs coming
from all over the world. And it was frightening to think that
consumers could go on the internet, for instance, and think
that they were ordering some perfectly approved and inspected
product from around the corner, when in fact it might come from
halfway around the world.
And it might be bogus, and it might be tainted, and it
might make them sick. We had parents of a young man who died
from drugs that he had acquired over the internet. I would be
interested in your views on what you think can be done about
this to protect people from these dangerous products.
Mr. Thompson. Very little right now, Congressman, and I
want to compliment you on your leadership in this effort.
Dr. Bill Hubbard, who is from the FDA, was just down in
Miami, and this was one that just came in by one individual.
There were a thousand that day that came in, and this one had
all different kinds of drugs and everything like this.
The Customs Office wants to know what they can do, and so
Dr. Hubbard went down there, and he brought this back. Now,
what he has to do under the law is he has to contact the
individual who applied for this thing, and requested it, and
ask that person if they want a hearing.
That is all that we can do under the law. Usually when we
do this, they don't want a hearing, and then we can dispose of
it. But if they want a hearing, then we have to have a hearing,
and they have to justify why they are doing this.
It is a serious problem. We would like to be able to have--
the Customs Office would like to be able to have the
opportunity to return these items, and there is no question in
my mind why we should not have that authority.
Right now when we take this, we have to get back a letter
within 90 days to the person that applied for it. But there is
nothing we can do. What is happening is that we are sure that
this individual is reselling it.
We don't know if they are packaged right, and we don't know
if they are counterfeits, and we don't know the results of
testings. There are syringes in here, and just everything that
you can well imagine; a lot of valium, and just everything.
And that was just one and there were a thousand that day
that came in.
Mr. Greenwood. And what we discovered that day was that
even to the extent--in most places these packages are never
even looked at.
Mr. Thompson. That's right.
Mr. Greenwood. They go right to the person to whom they are
addressed.
Mr. Thompson. There is no law against it.
Mr. Greenwood. And to some extent, they may or may not be
inspected, but looked at through an x-ray machine. And then
when they do find a bucket like that, they will toss it into a
cardboard box in a side room and wait for the FDA to arrive.
And someone from the FDA may come by once a week for an
hour and look at a few things. So it is really just frightening
to think that these kinds of products could get into the bodies
of Americans without any protection.
Mr. Thompson. Congressman, you have got to realize that we
only had 115 inspectors until this year, and thanks to you, and
thanks to the members of this committee on a bipartisan basis,
you gave us $98 million to hire more inspectors.
We will have an additional 400 inspectors on the ports of
entry and at the airports by the end of this year, and we only
had 150 up until this year. So hopefully we will be able to do
a much better job, but we should have at least the authority to
reject these, and be able to send them back to the
manufacturer, instead of sending them on.
Mr. Greenwood. Let me get to another issue very quickly. It
has to do with mental health, and it has to do with consumer-
run services. I am informed that the budget takes the little
tiny $2 million that is available for consumers, and consumer/
supporter technical assistance centers, and eliminates it.
What this is about is the ability to try to bring people
into empowerment who have suffered mental health problems,
either individually or within their families, and this little
$2 million was helping to provide technical assistance that
they could use to be advocates.
I would hope that we could have your support in restoring
that, and that $2 million is not a lot of money, but it is
pretty important money.
Mr. Thompson. We would be more than happy to work with you.
As you know, I have appreciated your counsel on many issues
before, and I will continue to work with you on them.
Mr. Bilirakis. I wondered if we could ask Mr. Hubbard what
was the attempt to transport drugs into the country? Were they
in suitcases or----
Mr. Hubbard. No, just in a package.
Mr. Bilirakis. Just like that?
Mr. Hubbard. Here, show him the package.
Mr. Bilirakis. Carrying it? Yes, I saw that.
Mr. Hubbard. That's how it came in.
Mr. Brown. Would the gentleman yield for a moment?
Mr. Bilirakis. I would be glad to yield.
Mr. Brown. Do you have the same concerns, Mr. Secretary,
about Canada, to the same degree?
Mr. Thompson. Well, the problem that we have, Congressman
Brown, is that we don't have problems with people going into
Canada. That is not the concern. But what we are concerned
about is if Canada--other countries will send them through
Canada, and then get into the United States through other
countries.
Mr. Brown. Canada will allow those drugs to come in? I am a
little concerned about the website on this issue that the FDA
has. My understanding is that you withdrew the language that
was there before, and sort of instructing us on what to do.
I take a bus to Canada every couple of months. It is about
an hour or 2 drive from where I live, and we are concerned
about the language on what in fact you all might do.
I don't think people are worried that you are going to
board the bus and the FDA is going to be there or anything like
that, and arrest these people, unless they stop and gamble in
Windsor, and buy duty-free alcohol at the border, but that is a
whole other issue.
But I guess we are looking for a little more clarity from
them on this whole issue.
Mr. Thompson. The problem his not been fully defined yet.
We are looking at it, but we want to work with you, and we want
to work with Congressman Greenwood, who has taken a leadership
role in this.
I have asked Les Crawford, who is the Acting Commissioner
right now, to really take an in-depth look at this and make
some recommendations so that I can bring them back to you.
And bring them back to this committee, in the hope that we
can come up jointly with some good legislation. I am just
fearful that a lot of our elderly citizens are going to be
duped into buying something that may be counterfeit, and that
may be harmful to them. And this is a big concern of mine.
Mr. Brown. Do we know enough about--do we in this country,
our government officials, and your agency, know enough about
how the Canadians process imported drugs?
Mr. Thompson. I think we do.
Mr. Brown. And if you are satisfied with the way that they
import drugs, then there should not be a problem with our
importing them from Canada should there?
Mr. Thompson. We are certainly satisfied with the Canadian
laws and the Canadian manufacturing processes and practices. We
are concerned about other countries. In some countries
according to my experts at the FDA, 40 percent of the drugs
coming out of certain countries are counterfeit.
We are concerned about those kinds of drugs getting into
our market in the United States.
Mr. Brown. As you should be.
Mr. Thompson. And causing health concerns, and even death
in some cases, and that is our big problem.
Mr. Brown. Thank you, Mr. Chairman.
Mr. Bilirakis. Dr. Ganske to inquire.
Mr. Ganske. Thank you very much. Mr. Secretary, what we are
dealing with here is tetracycline, a common antibiotic. Now,
what we are really dealing with is the fact that we have a
protection measure that gives the drug companies in this
country protection against overseas competition for drugs that
are made and manufactured in the United States and shipped
overseas.
And Congress overwhelmingly passed a law a year or 2 ago
saying that we should allow for the reimportation of those
drugs that are made and manufactured in the United States.
There was a provision put on the bill that said they could
only come back in if they were then relabeled by the drug
companies so that they would get to see who buys them
wholesale, and have basically a bottleneck.
I think that needs to be fixed. Now, I agree with you that
you need to have appropriate inspection. It shouldn't be
difficult to determine who are our honest wholesalers. Geneva
World, and Farma World, in Geneva, Switzerland, for instance
are they okay?
And I am more than happy to support initiatives, and I have
in the past, to increase the funding for the FDA to do that
type of inspection. But I would point out that this isn't a
potential problem just with drugs coming into the country.
How do you know, or how does any person know that the drug
they are getting from their pharmacist is the real thing? How
often does the FDA inspect the drugs that are in this country?
We have had well-documented examples of dilution, or
substitution, for people on expensive drugs in this country. So
I think it is a bit of a red herring to bring up a box that
some individual citizen has brought into this country for
tetracycline.
And what we are really dealing with here is the fact that
the pharmaceutical companies do not want to see overseas
competition. I am sure that you would like to see a global
market on this, because American citizens are subsidizing the
rest of the world, in terms of our drug costs.
I mean, I can bring charts here that show that drugs made
and manufactured here cost twice as much for the same drugs
that are then sent overseas. And our citizens are very, very
unhappy about this.
So I will tell you what. If you work with me, in terms of
setting up protocols, so that we can implement the law that
Congress has passed, I will work with you to make sure that you
get the appropriate funding for the inspection.
Mr. Thompson. Congressman, as you know, last year I came up
here and said, you know, I have a serious problem in the FDA. I
have 715 inspectors totally in America. We have to inspect
56,000 places across America.
We have 150 individuals that inspect incoming things from
our ports and our airports, 150. And I said we are only
inspecting less than 1 percent of all the food that is coming
into the United States.
And I said that I am really concerned about that. I asked
you, and I asked this committee on a bipartisan basis, to give
us more inspectors. We requested $61 million more, and this
Congress in their wisdom, and I thank you for it, gave us $98
million, and we are going to now be able to go up to 673
additional inspectors and personnel that are going to help us
do the job.
I want to work with you, and the FDA has been under-funded
for a long time in this arena, and we need to do more. This is
not a red herring, and I don't intend it to be a red herring.
This is 1 day in which a thousand of these packages came
into America, and we just took one. There were 999 that were
delivered, and only one package was brought up here just to
show that there is a problem.
I want to develop protocols, and I want to develop an
international market, and I want to work with you to accomplish
that, and I will make my staff, and me myself personally,
involved in this thing to see if we can't come up with a
successful solution.
I do not want to in any way inhibit that elderly citizen
from being able to purchase drugs wherever he or she can, and
that as long as I have some sort of security and protection,
then the remedies will be addressed by the medicine and not in
a counterfeit fashion.
Mr. Ganske. Well, do you think that the funding that you
are asking for or that is in the budget for this is adequate?
Mr. Thompson. I certainly think that what the Congress did
in the supplemental appropriation last year, and giving us the
$98 million, was a giant step forward. Am I totally satisfied?
No, I am not.
Mr. Ganske. How much more would you like to see?
Mr. Thompson. Well, I think that is something that we need
to sit down and discuss, and I need to make sure that I contact
OMB.
Mr. Ganske. Thank you. Thank you, Mr. Secretary.
Mr. Bilirakis. Mr. Dingell to inquire.
Mr. Dingell. Mr. Chairman, I thank you. Mr. Secretary, I am
aware of the travails you confront, and I want to commend my
friend, Dr. Ganske, for the questions. Food and Drug does not
have enough people to address domestic problems?
Mr. Thompson. They don't.
Mr. Dingell. And they don't have enough money to address
imports, and they don't have enough money or personnel to
address almost any of their functions. And yet you can't get
the money out of OMB, and this is not a new thing, as was the
case in other administrations.
But you are not able to levy the kind of charges that you
do for prescription pharmaceutical clearances, which does work,
and which has given you speedy and thorough, and effective
clearance of new drug applications?
Mr. Thompson. That's true.
Mr. Dingell. I wonder when the administration and the OMB
are going to recognize that the protection of the American
public from imports, and from other things, like devices and so
forth, is only going to be achieved either by putting out a lot
more money, or by bringing forward a system of user fees and
charges for the services that the Food and Drug gives.
Mr. Thompson. Well, Congressman, as you know, you were very
instrumental in the supplemental appropriation on food safety,
and I thank you for your leadership. You and I have personally
discussed this on many occasions, and I am talking strictly as
myself, Tommy Thompson.
I think we should go to the user fee route, and I would
support it. I know that I am probably talking strictly to
yourself and myself on this issue, and we probably will not be
able to pass it.
I don't have a vote and you do, but I certainly think it is
the right thing to do, and I think we certainly have to do
something. You are absolutely correct that we are looking at
inspecting less than 1 percent of the food coming into America.
We are doing a woefully inadequate job as it relates to the
inspection of drugs coming into America, and we need to do a
better job. But when you only have 750 inspectors, and you have
56,000, and you have over 300 ports of entry, it is impossible
to do it with 750 individuals, no matter if they were all as
capable as you were, Mr. Dingell, when you went through the
airport.
Mr. Dingell. I would not stand in favor of either
effectiveness or courtesy. However, the matter is behind us,
and I will observe that I have had better times in dentist
chairs.
Mr. Secretary, these questions here are asked with a great
deal of respect and affection for you, and I appreciate what
you have just said, and I hope that I have not placed you in
harm's way. Mr. Secretary, States are required to cover
pregnant women in Medicaid today up to 133 percent of poverty.
This coverage includes care for women, and care for the
unborn child. States can cover women above 133 percent of
poverty. In fact, 39 States already cover women above 133
percent; isn't that true?
Mr. Thompson. I am almost certain that it is, yes.
Mr. Dingell. Now, Mr. Secretary, I believe in California
that they cover pregnant women up to 300 percent of poverty; is
that correct?
Mr. Thompson. If you have got the figures there, I never
would question you, Congressman Dingell.
Mr. Dingell. I got it from the staff and so we can both
have faith in it. Mr. Secretary, States do not need then to use
a waiver to cover pregnant women above 133 percent.
Section 1902(r) of the Social Security Act allows States to
waive income and assets requirements to raise the coverage
levels for pregnant women in Medicaid; isn't that right?
Mr. Thompson. That's correct.
Mr. Dingell. So I am coming around, Mr. Secretary----
Mr. Thompson. I know what you are coming around to, sir.
You are trying to lead me into a trap, Congressman.
Mr. Dingell. Mr. Secretary, I would never put you in a
trap. I just am trying to ask you a question. I am trying to
understand that if we have this situation, why is it necessary
for us to go the waiver route when the practical result of the
waiver route is to require cutbacks in benefits to other
persons who have need, while you expand the coverage in other
areas.
The net result is that no significant increase in overall
care, but a shift in the kind of care and who would be eligible
recipients of care because the waiver route is taken.
Mr. Thompson. Well, as you probably know, the waiver route
has been very successful.
Mr. Dingell. I have some worries.
Mr. Thompson. What are your worries?
Mr. Dingell. Well, in Utah, the waiver route in fact has
caused significant reduction in benefits, while at the same
time causing increases in benefits in other areas. And I don't
have enough time to go into exactly----
Mr. Thompson. Can I respond?
Mr. Dingell. Of course. Sure.
Mr. Thompson. We have issued 1,506 waivers in the past
year, and we have been able to give 1.8 million Americans
insurance coverage under the waiver process that would not have
it.
We have been able to expand benefits by 4.5 million
individuals that expanded benefits. Utah wanted to be able to
develop a plan to reduce the benefits for some classifications.
Mr. Dingell. Now you are hitting the point.
Mr. Thompson. In order to expand the coverage, they reduced
the coverage by 14,000 to what the State employees are
receiving under their insurance coverage in order to cover an
additional 35,000 individuals.
I looked at the tradeoff and since everybody, even the ones
that were being reduced, were still getting the same amount of
health insurance coverage that the State employees in the State
of Utah were receiving, I thought it was a good tradeoff to get
three times as many more people that were not covered by
insurance covered.
It was also supported by individuals in the Congress, and
in the U.S. Senate from that State, and from the Governor, who
has done an excellent job of expanding health insurance
benefits in that State, sir.
Mr. Dingell. I guess my time is up.
Mr. Bilirakis. Mrs. Wilson.
Mrs. Wilson. Thank you, Mr. Chairman, and Mr. Secretary, I
am very pleased to have you here to talk about what you are
doing in Health and Human Services. I particularly wanted to
commend the emphasis in your budget on the community health
centers, bioterrorism preparedness, and the health research,
which has been mentioned by others here this morning.
I wanted to ask you about the State Children's Health
Insurance Program, S-CHIP. In your budget, and as you
previously announced, your intention to try to continue to
extend that program and the State's continued access to it.
And it has been an important program for the expansion of
health care benefits for children in many States. But I am
concerned though that unless there is more flexibility
associated with that program that we may end up as New Mexico
is, turning money back in to S-CHIP, close to $200 million, at
simultaneously because of the budget crunch in the State,
reducing the access of children to Medicaid funds because of a
fairly strict requirement in the program for maintenance of
level of effort.
In New Mexico, we have 95,000 children who are less than
185 percent of poverty, and because they were already eligible
for Medicaid, we cannot use S-CHIP funds for those children. If
you go up to 235 percent of poverty, there are only 6,000 more
kids that are in that range.
So we have had very little flexibility from your
predecessor on what we can use those Federal funds for, and
with a State with very high levels of children in poverty, we
really encourage you to work with us and what flexibility we
can use so that we don't end up reverting funds while we are
cutting benefits.
Mr. Thompson. Congresswoman, you are absolutely correct,
and we want to work with you. First, let me quickly point out
that we put in a model waiver for this particular program for
S-CHIP.
Second, the President has said that the $3.2 billion that
could have been reverted back to the Treasury on S-CHIP is not
going to. It is back in the budget so that the States can still
use it.
So New Mexico will not have to turn back that $200 million
that you were talking about. The third thing is that I started
a program when I was in Wisconsin to allow low income parents
to be able to sign up with S-CHIP and got a waiver to do it.
And I started that program, and as a result of that
program, other States have followed through; Massachusetts, New
Jersey, Delaware, New York, Arizona, and California. And we
have put in a model waiver so that other States, and hopefully
New Mexico would take advantage of that model waiver.
And I think it would probably solve some, if not all, of
your problems.
Mrs. Wilson. We would like to work with you on that,
because our----
Mr. Thompson. I would love to.
Mrs. Wilson. [continuing] waivers have not been approved,
and we have not been able to have access to those funds. The
State is now considering reducing Medicaid eligibility for
children, which will potentially--we may have a situation where
we have 6,000 children between 185 and 235 percent of poverty
who have great benefits, while we lose 46,000 poorer children
who will no longer have health coverage because of the anomaly
in the law that says that you cannot--if you were at 185
percent of poverty when you started out, you cannot use any of
this money for those children who were already eligible for
Medicaid.
Mr. Thompson. If we can construct a waiver to help you, and
we will not be in the violation of the law, we will do that.
Mrs. Wilson. And if we need to change the law, I think we
need to recognize that the current situation with the States is
not a circumstance where they are unwilling to continue the
level of effort. It is a financial crunch caused by a
recession, and we need to take care of those who need help the
most.
Mr. Thompson. I could not agree with you more, and that's
why the President has put forth in his budget provisions that
the $3.2 billion, which even as you know certainly could have
been used by the Federal Government for other programs, said,
no, this is the right thing to do, and leave it in the States,
and allow the States to be able to develop their S-CHIP
programs.
We want to be able to cover these children. We have found,
however, that the best way to cover children is to allow the
parents to also sign up. Then they are much more apt to bring
their children and to sign up for the program.
And that is what the model waiver does, and I want to work
with you, and if we need to change the law, we will tell you
that, and will be more than happy to try to attempt to support
you in getting that accomplished.
Mrs. Wilson. I appreciate that, because we are in a real
bind.
Mr. Thompson. The S-CHIP program is a great program and
let's use it. I mean, we have got the money there and let's
maximize the use, and let's get as many people covered as
possible, and that is going back to Congressman Dingell's
question.
We were able to use that model waiver to allow for 1.8
million Americans this year to be covered by health insurance.
Mrs. Wilson. Thank you, Mr. Chairman.
Mr. Bilirakis. We will also have the opportunity to raise
questions in writing to the Secretary. I understand that you do
have to leave at one o'clock?
Mr. Thompson. Yes, I do.
Mr. Bilirakis. Okay. Dr. Norwood to inquire.
Mr. Norwood. Thank you, Mr. Chairman. Mr. Secretary, the
administration's budget included over $5 billion in savings
from Medicare and AWP, and based on the assumption that you
would fix the problem administratively if Congress actually
failed to act.
Mr. Thompson. I would much rather have you act, Mr.
Congressman.
Mr. Norwood. Well, I think we should, too, and in the
proposal developed by the committee to fix this AWP problem, we
also included several provisions that would increase physician
reimbursement to make up for the loss of the drug revenues.
Would you be precluded from making that similar increase to
provide a reimbursement absent specific legislative authority?
Mr. Thompson. It is our understanding that we do not have
the authority, in fact, to assign it to the physicians. We know
that we don't have the authority to do that. Second, there is
some question whether administratively we have the authority on
AWP.
Mr. Norwood. Well, I am actually trying to make the point
to this committee that we need to fix this problem, and not
leave it up to you to have to fix the problem.
Second, because I know that time is running out on us, the
President's budget allows for $4 billion for Medicare+Choice
plans. A lot of us have difficulty with that. And in a
situation where the rural fee for service provider is seeing
Medicare patients, and have nothing to do basically with
Medicare+Choice plans.
And we are shorting that group $1.25 billion in the 5.4
percent cut. There are a number of Members of Congress who
don't understand that inequity, and why we would so desperately
need to put $4 billion into Medicare+Choice, which I would
agree is underfunded, too.
But at the same time, and in the same year, and in the same
budget, allow a decrease of 5.4 percent, which to tell you the
truth, Mr. Secretary, what we are talking about is a cut below
what we already pay, which is a round cost.
Why couldn't since we have to be budget neutral here, why
couldn't we share the wealth a little bit and just give the
Medicare+Choice $2.75 billion, and put the $1.25 billion into
the fee for service plans and keep these people from dropping
out of the plans?
Mr. Thompson. Congressman, you have the power and the
authority to do that. We look at it in this situation under
Medicare+Choice right now, 14.4 percent of the Medicare
recipients are in Medicare+Choice plans. Last year, we lost
550,000 more individuals because the companies could not make a
living or make a profit, and they pulled back.
Mr. Norwood. But you didn't actually lose them. What they
did is they dropped out of that managed care plan.
Mr. Thompson. And went into fee for service.
Mr. Norwood. And they still had health care.
Mr. Thompson. Yes.
Mr. Norwood. My concern is about not having health care
because the rural doc can't survive.
Mr. Thompson. And that is because of the 5.4, but that is
also the law that was passed in this Congress in 1998 and 1999,
and we have to change the law. CMS can only implement what the
law says as you know.
Mr. Norwood. I understand that and that is clear to me, but
the rules that are being given to us, even though we will
change the law, means one or two things. We either have to be
budget neutral in the entire budget.
Mr. Thompson. Right.
Mr. Norwood. Which is totally impractical to be budget
neutral just within your budget. I am just telling you that we
won't get there. Or we have to put it in the supplemental,
because some of us think that it is an emergency, and to keep
the doctors out there treating over 65.
Mr. Thompson. It is very serious, and is something that we
are very concerned with, and that's why we are working with
Congressman Thomas and this committee, and the Ways and Means
Committee, to make recommendations, and give this Congress a
lot of options, in which they can look at and review.
Hopefully there will be some in there that will be able to
be supported on a bipartisan basis.
Mr. Norwood. Well, I would ask the administration to give
us a signal and we can put it in the supplemental, and that
will solve that. Let me thank you on--and this is the last
subject, Mr. Chairman--your work on privacy. You and I talked
about this.
Mr. Thompson. Many times, and I appreciate your concerns.
Mr. Norwood. Chairman Tauzin brought it up today, and I
just want to say for the record that it is absolutely critical,
unless you want to waste millions, and millions, and millions
of health care dollars.
Mr. Thompson. You are absolutely correct.
Mr. Norwood. And you can give us the fix for that.
Mr. Thompson. I am happy to be able to report that
yesterday I signed the transmittal letter to OMB on these
particular things. I am not at liberty under the law to discuss
them until we publish them, but hopefully we will be going to
the Federal Register relatively soon with recommendations, and
I would love to have the opportunity to come up and discuss our
changes with you.
Mr. Norwood. Well, Mr. Chairman, I hope that you will make
that happen, and that then gives us a comment period; is that
correct?
Mr. Thompson. That is correct.
Mr. Norwood. Well, time is of the essence.
Mr. Thompson. It is.
Mr. Norwood. And people get nervous, and they start
wondering will I be able to obey the law, and what is the law.
Mr. Thompson. And you are absolutely right. And we want to
make sure in the areas of research and consent that doctors and
health providers are able to continue to do their business, and
be able to do it in a practical way.
Mr. Norwood. The HHS Secretary was one heck of a job before
9-11, and it is an unbelievable job now, and I really sincerely
thank you for what you are doing.
Mr. Thompson. The Governorship of Wisconsin never looked
better.
Mr. Bilirakis. I would like to ask for unanimous consent to
allow all members to submit written questions to the Secretary,
and we will keep the record open for 5 days, and without
objection, if Mr. Ganske has a quick question, and not a
comment, but a quick question that requires a quick answer, we
will allow it.
Mr. Ganske. The Secretary may want to look into that box
there. There may be a medicine in there that would help you
with your job.
Mr. Thompson. Which one.
Mr. Bilirakis. Thank you, Mr. Secretary. Thank you so much
for your time.
Mr. Thompson. Thank you, Congressman Bilirakis, and
Congressman Brown, thank you.
Mr. Bilirakis. The subcommittee is adjourned.
[Whereupon, at 1 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
Responses for the Record of Hon. Tommy Thompson, Secretary of Health
and Human Services
QUESTION SUBMITTED BY REPRESENTATIVE RICHARD BURR:
Question: It is my understanding that HHS has arranged with the
Department of Defense to obtain over 218,00 doses of the existing
anthrax vaccine, enough for post-exposure immunization of 73,000
individuals and pre-exposure immunization of about 36,000 ``high risk
workers,'' or some combination thereof. Is your Department examining
the need for increased production of the anthrax vaccine at a second
manufacturing site to meet civilian bioterrorism preparedness needs
and/or as an insurance policy against a catastrophe or production
stoppage at the current sole production site?
Answer: The Department of Defense (DOD) is negotiating with BioPort
on behalf of both DOD and the Department of Health and Human Services
for the purchase of Anthrax Vaccine Adsorbed, (BioThrax TM).
Secretary Thompson has requested the purchase of 0.5 million doses in
FY02, 1.0 million in FY03 and 1.5 million in FY04 to meet civilian
biopreparedness needs.
We have carefully examined the option of increasing production of
AVA at a second production facility site and have instead opted to
pursue the aggressive development of a second generation anthrax
vaccine consisting of a highly purified recombinant component of
Bacillus anthracis, the bacterium that causes anthrax. Abundant
preclinical evidence is available to indicate that immunization with
the recombinant protective antigen (rPA) of B. anthracis generates
long-lasting protective immunity against inhalation spore challenge in
animal models of the disease. At present, NIH is planning Phase 1
safety and immunogenicity trials in humans for rPA, and has committed
significant funds for the accelerated development and manufacturing of
this highly promising vaccine candidate. We are confident that
accelerated development and production of an improved vaccine will
offer significant advantages over subsidizing an additional production
site for AVA.
QUESTIONS SUBMITTED BY REPRESENTATIVE JIM GREENWOOD:
Question (1): Congress made it quite clear when it passed BIPA that
the so-called ``self-injectible'' provision was intended in part, to
restore coverage for those thousands of Medicare beneficiaries who, up
until 1997, had coverage and then abruptly lost that coverage due to a
change announced through a HCFA policy memorandum. It has now been over
a year since this direction to CMS was enacted and no action has been
taken. While I understand CMS's stated concern of ensuring that the
implementation of the provision does not have ``unintended
consequences'' for beneficiaries or the trust fund, do you agree that
CMS should at least restore coverage for those products that were
covered until 1997?
Answer (1): The specific drugs paid for under CMS's policy varied
across carriers both before and after the policy clarification that was
issued in 1997. CMS's goal now is to implement the BIPA provision to be
used by carriers. Considering that BIPA changed the statutory standard
for which drugs are to be paid for when delivered incident to a
physician's service, we believe the particular drugs that will be paid
for under this provision should be determined by the criteria in the
new process, regardless of the coverage by carriers prior to 1997.
Question (2): As you know, I have a continuing interest in
establishing effective and workable standards for protecting the
confidentiality of patient information. As the Department will be
issuing modifications to the HHS privacy regulation through new
rulemaking, I believe the Department should issue these changes
expeditiously.
I am concerned that the research provisions of the final rule could
disrupt vital health research efforts. Over 140 academic research
institutions, medical specialty doctors, hospitals and others recently
wrote you and warned of the potential problems caused by the rule.
``[The rule] will seriously impair our ability to conduct clinical
trials, clinicopathological studies of the natural history and
therapeutic responsiveness of disease, epidemiologic and health outcome
studies, and genetic research.''
While there are problems that need to be addresses in many areas of
the rule, a few key changes to the research provisions would go a long
way toward instilling patient confidence that information about them
will be used appropriately.
The requirement in the regulation that written consent be required
for routine health care activities is clearly unworkable. What
specifically will the new rulemaking propose for fundamentally fixing
this provision? Will the NPRM give health care providers the
flexibility they need by giving providers the discretion to decide when
consent for use of information for treatment, payment and health care
operations is needed?
What other changes will be made to the regulation to ensure that
research will not be adversely affected? Will the Department change the
de-identification standards so that researchers do not have such a high
hurdle to reach and therefore end up using identifiable data, rather
than de-identified data?
Answer (2): The Department published proposed improvements to the
Privacy Rule in the Federal Register on March 27, 2002. President Bush
and I believe strongly in the need for federal protections to ensure
patients' privacy. The changes that we have proposed will allow us to
ensure strong protections for personal medical information while
improving access to care. They are common-sense revisions that would
eliminate serious obstacles to patients getting needed care while, for
the first time, providing federal privacy protections for patients'
medical records.
The proposal is intended to ensure strong privacy protections while
correcting unintended consequences that threaten patients' access to
quality health care. The proposed rule includes provisions that would:
Require a patient's prior authorization before a provider can
use or disclose protected health information for non-routine
purposes such as marketing or sharing with employers for
personnel decisions;
Protect the individuals' right to access their personal health
information, to receive an accounting of disclosures that have
been made of their health information, and have a medical
record amended, if it contains incorrect or incomplete
information, or to have a statement of disagreement included in
the record;
Strengthen the notice requirements that give patients an
opportunity to understand and make decisions based on privacy
practices, while removing burdensome prior consent requirements
for the routine purposes of treatment, payment and health-care
operations that created serious obstacles to patients' access
to quality care;
Explicitly prohibit marketing without individual
authorization, while allowing doctors and other covered
entities to communicate freely with patients about treatment
options and other health-related information;
Clarify that State law governs disclosures about a minor to a
parent or guardian;
Simplify the research provisions to allow for combined
permissions and to more closely follow the Common Rule; and
Provide model business associate contract provisions and allow
covered entities up to an additional year to modify existing
contracts to be compliant with the Rule. This extension does
not apply to small health plans that already have an additional
year to comply.
Specifically, with regard to the Privacy Rule's provisions
regarding consent and research, the proposal would strengthen the
notice requirements that give patients an opportunity to understand and
make decisions based on privacy practices, while removing burdensome
prior consent requirements for the routine purposes of treatment,
payment and health-care operations that created serious obstacles to
patients' access to quality care. Under the proposal, health care
providers and other covered entities would have the discretion to
decide for themselves whether to obtain an individual's consent to use
or disclose the patient's information to carry out treatment, payment,
or health care operations, and if so, the flexibility to decide how and
when it is needed.
On research, the proposal would simplify the research provisions to
allow for combined permissions and to more closely follow the criteria
in the Common Rule for waiving the individual's consent. In addition,
the proposal would permit certain identifiable data elements about an
individual, such as zip code and dates of service, to be released for
research purposes, while still ensuring that direct identifiers, such
as name, address, and social security number, remain protected. As a
further protection for the individual, the proposal would condition
release of these limited data sets on the researcher's agreement to
restrict further access and disclosure of the information.
The Department will take public comment on the proposed changes
until April 26, 2002. Thereafter, we will act expeditiously to complete
the rulemaking process.
Question (3): Of the many concerns I could raise about funding for
mental health services, let me highlight one of the most troublesome.
That budget proposes to eliminate altogether funding for mental health-
consumer technical assistance centers. If our goal is to help mental
health consumers around the country achieve independence through
recovery from mental illness, why decimate a program specifically
focused on consumers of mental illness and their path to recovery?
Among a number of proposed cuts, the Administration's budget for
the Center for Mental Health Services (within the Substance Abuse and
Mental Health Services Administration) would end all funding next year
for the five centers that provide technical assistance (TA) to help
mental health consumers around the country achieve independence through
recovery from mental illness. The budget offers virtually no
explanation for decimating consumer-support programs, currently drawing
only $2 million, or less than 1 percent of the Substance Abuse and
Mental Health Services Administration's (SAMHSA) discretionary funding
for Programs of Regional and National Significance (PRNS).
Answer (3): The Center for Mental Health Services (CMHS), within
the Substance Abuse and Mental Health Services Administration, leads
Federal efforts in caring for the Nation's mental health by: providing
effective services, generating and disseminating new knowledge as to
the effectiveness of treatment, and supporting States and local
communities to adopt evidence-based interventions. The involvement of
consumers in these efforts is critical to their success. In fiscal year
(FY) 2003, CMHS plans to continue support for a number of consumer
activities in the States that will help consumers influence the
development and adoption of these evidence-based interventions. States
are required to have Mental Health Planning Councils, which include
consumers, to review and comment on State mental health plans and
reports relating to Community Mental Health Services Block Grant
funding. SAMHSA supports the National Knowledge Exchange Network, which
provides a wide range of information about mental health treatment and
services to consumers. SAMHSA will also be continuing its State-wide
Family Network Program, over $5 million in grants, which gives adults
and families a voice in providing services for themselves and or their
children. Among other things that this program supports are conferences
and other activities to disseminate what we know works in the treatment
of mental illness for consumers. SAMHSA's Consumer Operated Service
Program ($5 million) supports the implementation of consumer delivered
self-help and related consumer support services in 9 sites across the
country to identify expected outcomes when self-help is used as an
adjunct to traditional mental health treatment. Additionally, SAMHSA's
Circle of Care program ($2 million) provides funds for tribal and urban
Indian communities to plan, design, and assess the feasibility of
implementing a culturally appropriate system of care for American
Indians/Alaskan Natives children and their families.
Continued funding for the technical assistance centers is not
included in the President's FY 2003 budget. As the Nation continues to
address several critical needs, including relief from the September 11
attacks and subsequent acts of bio-terrorism, difficult fiscal choices
had to be made in developing the FY 2003 budget request.
However, to allow for an orderly transition to other funding
sources and avoid any detrimental effects during the interim period,
SAMHSA is proposing to issue a 1-year Guidance for Applicants to fund
the existing consumer technical assistance centers for 1 additional
year, including support for the Annual Alternatives Conference.
QUESTION SUBMITTED BY REPRESENTATIVE TED STRICKLAND
Question: Last year, the Department of Health and Human Services
launched its Health Insurance Flexibility and Accountability initiative
to allow states to use the section 1115 waiver process to expand
Medicaid coverage to populations that weren't previously covered.
As you know, community health centers are a priority of bipartisan
majorities in this Congress and with President Bush. In 2000, Congress
passed legislation ensuring that health centers received adequate
reimbursement under Medicaid through a prospective payment system. In
so doing, Congress explicitly stated that health centers are unique
providers, in need of unique payment protections if they are to fill
their statutory mission to provide care to the uninsured.
Earlier this year, your Department approved an 1115 HIFA waiver for
the state of Utah. This waiver expands care to previously uninsured
individuals but also allows the state to waive the PPS requirements for
health centers that serve this expansion population.
I am extremely concerned that the department's approval of these
waivers will undermine the very public commitment that Congress and the
Administration have placed on health centers. It also allows states to
exploit the good will and support of health centers through expanded
funding for health centers by ``robbing peter (Federal appropriations)
to pay Paul (Medicaid).''
This is a very important issue to me--Ohio's Medicaid program was
under an 1115 waiver and health centers were reimbursed only a fraction
of their costs under that approved waiver.
Can you give me assurances, as well as the 80% of the members of
this subcommittee that cosponsored the PPS legislation, that the
Department of Health and Human Services will not approve future HIFA
waivers that waive health centers' PPS reimbursement requirements under
Medicaid?
Answer: We certainly do not envision HIFA serving as a vehicle to
undermine Congress's intent in establishing a PPS methodology for
payment of health centers. While the HIFA guidance mentions the
flexibility states may exercise with respect to benefits and cost
sharing, waivers of PPS requirement are not mentioned, either in the
HIFA guidance or the application template.
As you know, the State of Utah recently received approval to
implement a section 1115 demonstration that expands coverage. This
demonstration is not a part of the HIFA initiative. It is true that
Utah has a waiver of the PPS requirement for services rendered to the
expansion population. The administration granted this waiver only after
careful consideration of the implications, including the benefit of
providing coverage to individuals who were previously uninsured. Any
care Federally Qualified Health Centers (FQHC) were previously giving
to these individuals was likely not reimbursed.
Any future request for a PPS waiver, whether part of a HIFA or non-
HIFA proposal, would be treated in the same fashion. The request would
be carefully reviewed, taking into consideration all implications.
QUESTIONS SUBMITTED BY REPRESENTATIVE EDOLPHUS TOWNS
Question (1): I have joined my colleagues, Chairman Bilirakis and
Mr. Greenwood, in urging HHS since February 2000 to resolve the issue
of coverage for injectable drugs. Can we get this issue resolved
through a policy memorandum rather than a long rulemaking process?
Answer (1): As you may know, the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act (BIPA) amended the statute to
define drugs covered ``incident to'' a physician's services as those
drugs ``which are not usually self-administered by the patient.'' The
prior statutory standard had been drugs ``which cannot . . . be self-
administered.''
Unfortunately, the new wording is not entirely clear. For example,
there are several meanings that could be given to the terms ``usually''
and ``by the patient'', as well as questions about whether particular
categories of drugs should be presumed to meet, or not meet, these
criteria. It's a complicated issue and we are committed to getting it
right. Without proper guidance to Medicare's carriers, this provision
could cost many billions of dollars. It was scored by CBO as costing
$100 million in the first year, and $1.1 billion over 5 years, but if
defined more expansively than intended, it could cost much more.
We are now looking at data provided by our carriers and consulting
with our professional clinical and legal staffs to help us determine
how best to write our guidance on this issue. We expect to have a
policy decision soon and will continue to keep you informed regarding
all of our efforts.
Question (2): I believe that we have a real opportunity to address
the issue of genetic non-discrimination this year. The President has
voiced his support for it and it also has bipartisan support in this
Committee and in the Congress. Can we count on the cooperation of HHS'
technical staff so that the Committee can act on a bipartisan bill this
year?
Answer (2): The technical staff at the National Human Genome
Research Institute (NHGRI) at NIH and the Department have been
providing assistance to members of the House, on both sides of the
aisle, for a number of years. They have assisted in educating members
and staff about the advances in genetic research, the development of
genetic tests, and how such tests are used. The President and I agree
that genetic discrimination should be made illegal and we will continue
to provide whatever level of technical guidance that may be needed.
Question (3): What is your timeframe for appointing Directors for
each Institution at NIH to ensure implementation and accountability of
the proposed activities in the FY 03?
Answer (3): All appointments of NIH Institute and Center Directors
involve a national search to identify individuals with outstanding
scientific and leadership skills for the position. A broadly
representative search committee representing (including representatives
from both inside the NIH and from outside scientific and patient
organizations) is charged with identifying candidates, reviewing
applications, and recommending a list to the NIH. Following this
process, the (Acting) Director, NIH, interviews the candidates and
makes a tentative selection.
National Institute of Biomedical Imaging and Bioengineering
(NIBIB)--The Acting Director, NIH, has made a tentative selection for
the Director, NIBIB, and the recommendation is being forwarded to the
Secretary this week.
National Institute of Neurological Disorders and Stroke (NINDS)--
The Acting Director, NIH, has extended an offer to a candidate for the
Director, NINDS, and is awaiting a decision from that individual.
National Institute of Mental Health (NIMH)--The vacancy
announcement for the Director, NIMH, closed on March 30, 2002.
National Institute on Drug Abuse (NIDA)--The vacancy announcement
for the Director, NIDA, closed on April 8, 2002.
It is anticipated that the Search Committees for NIMH and NIDA will
start interviewing applicants and completing reference checks mid-April
and refer highly qualified candidates to the Director, NIH, by mid-May.
National Institute on Alcohol Abuse and Alcoholism (NIAAA)--The
vacancy announcement for the Director, NIAAA, closes on May 1, 2002.
National Institute of General Medical Sciences (NIGMS)--Regarding
the vacancy for the Director, NIGMS, the membership of the search
committee is being finalized; we anticipate that the announcement will
probably be posted late March/early April 2002.
Question (4): What is the status of the Presidential Commission's
Report on Complimentary and Alternative Medicine?
Answer (4): The Report was completed by the White House Commission
on Complementary and Alternative Medicine Policy and was delivered to
the President on March 25, 2002. Copies of the Report were delivered to
the House Energy and Commerce Committee and the Senate Health,
Education, Labor, and Pensions Committee. The Report is available on
the web site for the White House Commission at http://
www.whccamp.hhs.gov/finalreport.html .
QUESTIONS SUBMITTED BY REPRESENTATIVE JOSEPH PITTS
Question (1): Mr. Secretary, as you may recall, I raised concern
with you late last year regarding Advanced Cell Technology, the company
that announced it had succeeded in cloning a human embryo. I wrote to
you with my concern that ACT received a federal grant even though it is
involved in scientific pursuits that the House has voted to ban and the
President opposes. I have enclosed several documents on this issue I
would like included in the Congressional Record.
You responded very quickly to my letter and assured me that the
Department of Health and Human Services supports the House passed H.R.
2505, ``Human Cloning Prohibition Act of 2001,'' and that you asked the
Inspector General at HHS to investigate this matter and report back to
you.
Thank you for your prompt response on this matter. I would only ask
if you have received a report from your Inspector General and what
other steps the Department is taking to make sure that taxpayer funding
is not going to groups that are attempting human cloning or creating
embryos specifically for research?
Answer (1): The Inspector General informed me that the final report
of her audit was issued to ACT on April 26, 2002. I have also received
a copy of that report.
NIH grants management and program officials work closely with
grantee institutions to assure compliance with all applicable laws,
regulations, and policies. Section 510 of Public Law 107-116 (the
Departments of Labor, HHS, and Education, and Related Agencies
Appropriations Act of 2002), prohibits the use of appropriated funds to
support certain human embryo research, including cloning. Quoting this
provision, the NIH Grants Policy Statement states that NIH funds may
not be used for the creation of a human embryo(s) for research purposes
or for research in which a human embryo(s) is destroyed, discarded, or
knowingly subjected to risk of injury or death greater than that
allowed for research on fetuses in utero under 45 CFR 46.208(a)(2) and
subsection 498 (a) and (b) of the PHS Act. The term ``human embryo(s)''
includes any organism not protected as a human subject under 45 CFR 46,
as of the date of enactment of the governing appropriations act, that
is derived by fertilization, parthenogenesis, cloning, or any other
means from one or more human gametes or human diploid cells.
In addition, the Policy Statement also notes that a March 4, 1997
Presidential Memorandum prohibits NIH from using Federal funds for
cloning of human beings.
If a grantee is using non-Federal dollars for research that would
be prohibited by Section 510 of Public Law 107-116, it must be able to
demonstrate a clear separation between the non-Federal dollars used for
that activity and Federal funds awarded for a permissible activity.
Question (2): I have a few questions about the Title X program
enforcing compliance with state rape and child abuse reporting laws.
Since the Fiscal Year 1999 Labor/HHS/Education Appropriations Bill was
signed by President Clinton, and every subsequent year, it has been the
law of the land that Title X family planning providers must obey state
laws requiring notification or the reporting of child abuse, child
molestation, sexual abuse, rape or incest. Current law, signed into law
by President Bush states: SEC. 212. Notwithstanding any other provision
of law, no provider of services under Title X of the Public Health
Service Act shall be exempt from any state law requiring notification
or the reporting of child abuse, child molestation, sexual abuse, rape
or incest.--P.L. 107-116 (H.R. 3061)
(a) Mr. Secretary, what guidance has your agency developed to
inform regional administrators, grantees and providers of these legal
requirements which may, for example, require them to notify child
protective services agencies if these types of abuse are suspected?
Answer (2a): On January 12, 1999, the Office of Population Affairs
(OPA), which administers the Title X Family Planning Program, issued a
memorandum to Regional Health Administrators regarding these
requirements. This memorandum, which sets out ``OPA Program Instruction
Series, OPA 99-1: Compliance with State Reporting Laws,'' was intended
to serve as a formal notice to the Regional Health Administrators,
Regional Office Family Planning Program staff, and Title X Grantees
that Title X providers must report incidents of child abuse, child
molestation, sexual abuse, rape, or incest to the appropriate State
authority in accordance with requirements imposed by State laws. This
Program Instruction remains in effect. Additionally, Regional Offices
are encouraged to utilize available resources, such as Title X training
centers and technical assistance contractors, to make certain all Title
X providers are aware of their responsibilities under individual State
laws, and are equipped to handle sensitive situations.
A copy of ``OPA Program Instruction Series, OPA 99-1: Compliance
with State Reporting Laws'' is attached.
(b) Please provide any procedures established by the Office of
Population Affairs to monitor compliance with this provision.
Answer (2b): The Office of Population Affairs monitors Title X
Family Planning service grantees for compliance with all program
requirements through several mechanisms, both written and
observational. Written monitoring occurs through annual grant
continuation applications, and reviews of written grantee policies and
procedures. On-site monitoring of grantees through site visits occurs
annually, and comprehensive, on-site program reviews occur every three
years.
(c) Do federal confidentiality requirements, or any other
requirements, preclude Title X providers from asking a recipient's age
or date of birth?
Answer (2c): No--there are not any Federal confidentiality
requirements, or any other requirements that preclude Title X providers
from asking a recipient's age or date of birth.
______
Department of Health & Human Services
Office of the Secretary
Assistant Secretary for Health
Office of Public Health and Science
Washington, DC 20201
TO: Regional Health Administrators, Regions I-X
FROM: Deputy Assistant Secretary for Population Affairs
SUBJECT: OP A Program Instruction Series, OP A 99-1: Compliance with
State Reporting Laws
The Fiscal Year 1999 Omnibus Appropriations bill (P .L. 105-277)
contains new language governing the use of Title X funds. Specifically
section 219 states,
Notwithstanding any other provision of law, no provider of
services under title X of the Public Health Service Act shall
be exempt .from any State law requiring notification, or
reporting of child abuse, child molestation, sexual abuse,
rape, or incest.
This memorandum is intended to serve as a formal notice to the
regional offices, as well as Title X grantees, concerning compliance
with State reporting laws. A copy of this memorandum should be provided
to all Title X grantees in your region, and Title X providers should
refer to this memorandum as needed, if questions in this area arise.
The language of section 219 means that Title X providers must
report such incidents to the appropriate State authority in accordance
with requirements imposed by State laws. The reporting and notification
requirements referenced in section 219 concern State laws; the
authority to enforce compliance with such laws lies with the States. It
is therefore important that grantees review and be familiar with the
relevant reporting requirements in their individual State. Because
State laws vary, it is not possible for this office to provide more
specific guidance as to the requirements of particular States' laws;
grantees are urged to consult with their own attorneys for specific
guidance.
Identified instances of child abuse, child molestation, sexual
abuse, rape, or incest present serious medical and psychological
situations for patients and their families. Findings of such instances
coming within the applicable State law should be documented in the
medical record and reported as required by the applicable State
requirements. The Office of Population Affairs encourages efforts to
augment existing training programs for Title X providers to ensure
optimal medical assistance in such situations. Grantees should fully
understand their obligations under State law related to reporting when
such acts or actions are disclosed, and they should review current
protocols for responding to such reports. We also encourage enhanced
counseling and education efforts targeted to the unique needs of
adolescents. Title X providers are encouraged to continue to work at
the local level in an interdisciplinary manner with other local health
care providers who may also have reporting obligations under State law,
law enforcement officials, child protective services, social service
experts and others in order to explore how best to respond to these
situations. To accomplish this, regional offices and Title X grantees
are encouraged to utilize resources available through the regional
training centers and the technical assistance contractor, as well as
other available resources.
We appreciate your continued cooperation in assuring that grantees
are aware of their obligations and hope this memorandum provides
clarification on this matter.
cc: Regional Program Consultants, Regions I-X
______
Prepared Statement of College of American Pathologists
The College of American Pathologists (CAP) is pleased to submit
this statement for the record of the Energy and Commerce Health
Subcommittee hearing on the Department of Health and Human Services'
fiscal 2003 budget request. The College is a medical specialty society
representing more than 16,000 board-certified physicians who practice
clinical or anatomic pathology, or both, in community hospitals,
independent clinical laboratories, academic medical centers and federal
and state health facilities.
As Congress considers the HHS budget request for the next fiscal
year, the College asks that lawmakers give special attention to two
issues important to ensuring quality health care for all Americans and
access to that care.
BIOTERRORISM PREPAREDNESS
The nation's clinical laboratories and the pathologists who provide
medical direction in those facilities form the front line in the battle
against bioterrorism. Because these laboratories often serve as the
point of entry for specimens that may be infected with biological
agents, it is essential that laboratory personnel be adequately
educated, trained and prepared to rapidly respond.
The College applauds President Bush for his administration's
efforts during the past six months to support this goal and improve the
nation's ability to prepare for and respond to the bioterrorism threat.
The College also appreciates the efforts of Energy and Commerce Chair
Billy Tauzin, ranking member John Dingell and other committee members
for their bipartisan efforts last year in support of the Public Health
Security and Bioterrorism Response Act of 2001, H.R. 3448.
This legislation would expand education and training for medical
personnel, enhance controls of biological agents and waive certain
Medicare requirements during public health emergencies. Further, the
bill would make grants available through HHS to professional societies
and private accrediting organizations to educate and train medical
personnel and develop proficiency testing programs that, using non-
lethal samples of biological agents, help laboratories hone their
ability to detect infectious agents likely to be used in bioterrorist
attacks. This approach is commendable, as these professional
organizations are frequently best suited to assess and meet the
education and training needs of their members.
The bill tightens regulatory control of biological agents without
imposing undue burdens on clinical laboratories that diagnose and
verify the presence of these agents in the course of patient care.
Also, H.R. 3448 contains a provision crucial to the ability of
laboratories to respond swiftly to acts of bioterrorism: authority for
the HHS Secretary to waive certification requirements for clinical
laboratories in the case of a national emergency. Under the Clinical
Laboratory Improvement Amendments of 1988 (CLIA), certain requirements
are established for the inspection and certification of laboratories.
In times of national emergency, it may be necessary to waive these
requirements to ensure adequate access to clinical laboratory services.
The College urges the subcommittee to ensure that HHS funding for
fiscal 2003 include support for bioterrorism preparedness as provided
for in Public Health Security and Bioterrorism Response Act of 2001.
MEDICARE PHYSICIAN PAYMENTS
On January 1 of this year, Medicare's annual update to physician
payments produced a 5.4 percent cut that may jeopardize physician
participation in the program and, ultimately, beneficiary access to
care. Despite evidence that a flawed formula behind the annual update
caused this reduction, the administration budget request for fiscal
2003 contemplates no additional spending to correct the problem.
The CAP thanks Health Subcommittee Chair Michael Bilirakis, ranking
subcommittee member Sherrod Brown and other committee members for their
introduction last November of legislation to substantially reverse the
January 1 reduction and replace the flawed ``sustainable growth rate''
(SGR) system behind Medicare's annual updates with a formula that more
accurately reflects physicians' practice costs. The College greatly
appreciates the subcommittee's early efforts to address this problem
and urges passage of legislation this year to mitigate the harmful
effects of the January 1 reduction and improve the payment formula for
coming years.
This year's 5.4 percent reduction affects pathologists profoundly
and exacerbates existing financial pressures brought on by increasingly
complex and costly regulatory requirements and rising liability
insurance rates. The January 1 reduction in payments is the fourth
payment cut--and the largest--since Medicare instituted its physician
fee schedule a decade ago. Since 1991, Medicare physician payment rates
have risen an average of only 1.1 percent annually, or 13 percent less
than the annual increase in practice costs, as measured by the Medicare
Economic Index. Further, the January 1 reduction comes on top of cuts
to pathology services made in the transition to resource-based practice
expenses, such as an 11.5 percent drop in payment over four years for
the diagnosis of breast cancer, prostate cancer and malignant melanoma.
Pathologists and other physicians cannot continue to sustain the
financial pressures the Medicare program has placed upon them.
Compounding the current problem of falling payment rates are numerous
new administrative requirements imposed on Medicare providers in recent
years. For example, documentation requirements necessitated by Medicare
program integrity initiatives and various provisions of the Health
Insurance Portability and Accountability Act of 1996 have created
substantial new paperwork burdens in laboratories and physician
offices, and more are expected in coming years. These requirements
raise the cost and complexity of providing care, but come with no
additional compensation. We appreciate this Committee's commitment to
reducing regulatory burdens, as well as the efforts of the Centers for
Medicare and Medicaid Services. Yet, this relief cannot serve as a
substitute for what is really needed: an alternative payment approach
that meets the needs of Medicare patients and better reflects the costs
of their care. Further adding to the burden on providers are rising
professional liability insurance rates and the cost of technological
advances critical to maintaining state-of-the-art medical care.
The 2002 payment cut stems from the flawed SGR formula. This system
inappropriately reflects downturns in the general economy and that,
along with data errors by the Centers for Medicare and Medicaid
Services, have short-changed physicians by $15 million since 1998. The
Medicare Payment Advisory Commission (MedPAC) warned last year that
significant cuts in 2002 ``could raise concerns about the adequacy of
payments and beneficiary access to care.'' MedPAC adopted a
recommendation that Medicare replace the SGR with a system based on
estimated changes in physician practice costs less an adjustment for
growth in multifactor productivity (labor, supplies and equipment--not
just labor, as is now the case).
MedPAC's concerns regarding access must not be taken lightly.
Experiences with Medicare+Choice disenrollment and Medicaid patient
access give ample evidence of the need to maintain adequate payment to
ensure adequate access. This year's reduction and future cuts that are
likely absent immediate changes to the update system will force some
physicians to discontinue accepting new Medicare patients, switch from
participating to non-participating provider status, reduce
administrative staff, retire early or take other actions to limit their
Medicare liability. It is unfortunate that those same actions likely
will jeopardize Medicare patients' access to care.
The College thanks the Subcommittee on Health for the opportunity
to present its views on these important issues and offers its support
and continued assistance as the administration and Congress work to
address these pressing issues in coming months.
______
U.S. House of Representatives
Committee on Energy and Commerce
March 14, 2002
The Honorable Tommy G. Thompson
Secretary
Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201
Dear Secretary Thompson: Thank you for participating in the House
Energy and Commerce Committee Subcommittee on Health hearing on March
13, 2002. During the hearing we discussed whether the American Indian
and Alaska Native (AI/AN) tribes would be included in the methodology
for the $25 million for Healthy Communities Innovation Initiative,
which includes a new initiative on diabetes. I would like to take this
opportunity to follow up on our discussion.
As you know, one of the fastest growing, most costly, and most
deadly diseases is diabetes, with an estimated 800,000 new cases
diagnosed every year. At a general population growth rate of almost 6%
per year, the Centers for Disease Control (CDC) is calling diabetes
``the epidemic of our time.'' Diabetes currently costs the U.S.
approximately $100 billion and kills approximately 200,000 people every
year. If we do not take immediate and dramatic steps to reverse this
trend, over the next decade diabetes will cost this country $1 trillion
and claim over 2 million lives.
Diabetes, in the last half of this century, has severely impacted
American Indian/Alaskan Native (AI/AN) communities. In some AI/AN
communities, 60% of the adults have been diagnosed with diabetes
(Position Statement from Indian Health Services National Diabetes
Program). A recent Indian Health Service (IHS) study shows a steady
increase in the rate of diagnosed diabetes in AI/AN adolescents and
young adults. (Interim Report to Congress Special Diabetes Program for
Indians, January 2000)
Traditionally, AI/AN communities were not susceptible to diabetes
due to the traditional food sources they consumed. However, their
lifestyle has shifted to a decrease in physical activity and an
increase in high calorie-high fat diet. If the general population is
experiencing a diabetes epidemic, then the AI/AN people are in an even
more serious diabetes health situation.
Given such realities, I would like to know if the methodology for
the $25 million Healthy Communities Innovation Initiative will include
AI/AN tribes for diabetes prevention? According to your written
testimony to the House Energy and Commerce Committee Subcommittee on
Health (3/13/02), you state that five communities will participate in
this initiative. I am hopeful AI/AN communities will be considered for
participation in this initiative. Clearly, such funding is necessary to
support continued diabetes research and prevention activities in AI/AN
communities.
I look forward to your response.
Sincerely,
Frank Pallone, Jr.
Member of Congress
______
U.S. House of Representatives
Committee on Energy and Commerce
March 15, 2002
The Honorable Tommy G. Thompson
Secretary
Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201
Dear Secretary Thompson: Thank you for participating in the House
Energy and Commerce Committee Subcommittee on Health hearing on March
13, 2002. During the hearing, we discussed whether American Indian and
Alaska Native tribes have access to the homeland and bioterrorism
security funds available to the Department of Health and Human
Services. I appreciate your statement that Indian tribes are eligible
for both homeland and bioterrorism security funds, and that you will
notify them of their eligibility. I would like to take this opportunity
to follow up on this discussion.
Due to the events of September 11, 2001, the need for both state
and tribal governments to have established and viable emergency
management services is very apparent. I have spoken with numerous
American Indian tribal representatives during the past six months, and
have learned that they are very concerned that their governments will
be left out of this homeland and bioterrorism security initiative.
As you may know, the 10th U.S. Circuit Court of Appeals recently
ruled that, ``Indian tribes are neither states, nor part of the federal
government, nor subdivisions of either. Rather, they are sovereign
political entities possessed of sovereign authority not derived from
the United States, which they predate.'' In addition, the United States
Government committed to a trustee relationship with the Indian Nations.
Defined by treaties, statutes and interpreted by the courts, the
trustee relationship requires the federal government to exercise the
highest degree of care with tribal and Indian lands and resources.
Given these legal factors, I believe Indian tribal governments need to
be included in the homeland and bioterrorism security plan and adequate
funding needs to be made available to support such efforts.
I learned from you during the hearing that once the President
signed into law the homeland and bioterrorism legislation on January
10, 2001, a letter was sent to all governors entailing the homeland
security funds available to states. I also recently learned that the
Bush Administration has given State governors 60 days to meet with
their state and local health services officials concerning development
of homeland and bio-terrorism security preparation plans. The governors
are then to submit their plans to the federal government for funding
support. Unfortunately, American Indian tribes and their health
departments are not specified in this plan, and thereby appear to be
completely left out of the important process of securing our entire
nation from terrorist threats. Similar to state governments, Indian
governments have citizenry to protect as well and should have access to
the available funds.
Given this current situation, I respectfully request that letters
be sent to tribal leaders nation wide to inform them that these
homeland and bioterrorism security funds are available to them. This is
crucial to ensuring that our homeland is secure from bioterrorist
activity.
Please provide me with a timeline of when you will be notifying the
Indian tribes regarding their eligibility to access homeland and
bioterrorism security funds.
I look forward to your response.
Sincerely,
Frank Pallone, Jr.
Member of Congress