[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
DEPARTMENTS OF LABOR, HEALTH AND HUMAN
SERVICES, EDUCATION, AND RELATED AGENCIES
APPROPRIATIONS FOR 2003
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
________
SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES,
EDUCATION, AND RELATED AGENCIES
RALPH REGULA, Ohio, Chairman
C. W. BILL YOUNG, Florida DAVID R. OBEY, Wisconsin
ERNEST J. ISTOOK, Jr., Oklahoma STENY H. HOYER, Maryland
DAN MILLER, Florida NANCY PELOSI, California
ROGER F. WICKER, Mississippi NITA M. LOWEY, New York
ANNE M. NORTHUP, Kentucky ROSA L. DeLAURO, Connecticut
RANDY ``DUKE'' CUNNINGHAM, JESSE L. JACKSON, Jr., Illinois
California PATRICK J. KENNEDY, Rhode Island
KAY GRANGER, Texas
JOHN E. PETERSON, Pennsylvania
DON SHERWOOD, Pennsylvania
NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full
Committee, and Mr. Obey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
Craig Higgins, Susan Quantius, Susan Ross Firth, Meg Snyder,
and Francine Mack-Salvador, Subcommittee Staff
________
PART 2
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Page
Secretary of Health and Human Services........................... 1
Bioterrorism..................................................... 56
Center for Medicare and Medicaid Services........................ 595
Administration for Children and Families......................... 1101
Administration on Aging.......................................... 1951
Special Tables................................................... 197
________
Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
80-949 WASHINGTON : 2002
COMMITTEE ON APPROPRIATIONS
C. W. BILL YOUNG, Florida, Chairman
RALPH REGULA, Ohio DAVID R. OBEY, Wisconsin
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
HAROLD ROGERS, Kentucky NORMAN D. DICKS, Washington
JOE SKEEN, New Mexico MARTIN OLAV SABO, Minnesota
FRANK R. WOLF, Virginia STENY H. HOYER, Maryland
TOM DeLAY, Texas ALAN B. MOLLOHAN, West Virginia
JIM KOLBE, Arizona MARCY KAPTUR, Ohio
SONNY CALLAHAN, Alabama NANCY PELOSI, California
JAMES T. WALSH, New York PETER J. VISCLOSKY, Indiana
CHARLES H. TAYLOR, North Carolina NITA M. LOWEY, New York
DAVID L. HOBSON, Ohio JOSE E. SERRANO, New York
ERNEST J. ISTOOK, Jr., Oklahoma ROSA L. DeLAURO, Connecticut
HENRY BONILLA, Texas JAMES P. MORAN, Virginia
JOE KNOLLENBERG, Michigan JOHN W. OLVER, Massachusetts
DAN MILLER, Florida ED PASTOR, Arizona
JACK KINGSTON, Georgia CARRIE P. MEEK, Florida
RODNEY P. FRELINGHUYSEN, New Jersey DAVID E. PRICE, North Carolina
ROGER F. WICKER, Mississippi CHET EDWARDS, Texas
GEORGE R. NETHERCUTT, Jr., ROBERT E. ``BUD'' CRAMER, Jr.,
Washington Alabama
RANDY ``DUKE'' CUNNINGHAM, PATRICK J. KENNEDY, Rhode Island
California JAMES E. CLYBURN, South Carolina
TODD TIAHRT, Kansas MAURICE D. HINCHEY, New York
ZACH WAMP, Tennessee LUCILLE ROYBAL-ALLARD, California
TOM LATHAM, Iowa SAM FARR, California
ANNE M. NORTHUP, Kentucky JESSE L. JACKSON, Jr., Illinois
ROBERT B. ADERHOLT, Alabama CAROLYN C. KILPATRICK, Michigan
JO ANN EMERSON, Missouri ALLEN BOYD, Florida
JOHN E. SUNUNU, New Hampshire CHAKA FATTAH, Pennsylvania
KAY GRANGER, Texas STEVEN R. ROTHMAN, New Jersey
JOHN E. PETERSON, Pennsylvania
JOHN T. DOOLITTLE, California
RAY LaHOOD, Illinois
JOHN E. SWEENEY, New York
DAVID VITTER, Louisiana
DON SHERWOOD, Pennsylvania
VIRGIL H. GOODE, Jr., Virginia
James W. Dyer, Clerk and Staff Director
(ii)
DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED
AGENCIES APPROPRIATIONS FOR 2003
----------
Wednesday, March 6, 2002.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
WITNESS
HON. TOMMY G. THOMPSON, SECRETARY, UNITED STATES DEPARTMENT OF HEALTH
AND HUMAN SERVICES
Chairman's Statement
Mr. Regula. I think we will get started. I hear there may
be a series of votes this morning and it will be disruptive to
the Committee hearing, but we will do as well as we can.
We are happy to welcome you, Mr. Secretary, and look
forward to your testimony. You have a lot of challenges, and we
are anxious to hear the solutions. One question I can discard
is, what are we doing about an NIH director. Overnight took
care of that one.
But just in the interest of time, I am not going to do any
opening statement. Mr. Obey?
Mr. Obey. Go right ahead.
Mr. Regula. Okay, well, Mr. Secretary, we will look forward
to your testimony, and I know we will have some questions.
Secretary's Statement
Secretary Thompson. Thank you, Mr. Chairman, members of the
Subcommittee. It is an honor to come before you to discuss the
President's fiscal year 2003 budget for the Department of
Health and Human Services.
Mr. Chairman, your support over the past year has been
tremendous. On behalf of the President and myself, let me thank
you for all your help. Congressman Obey, it is good to see you,
and thank you for your good work over the many years, and thank
you for your friendship.
Mr. Chairman, the past 13 months have witnessed some
significant achievements at the Department of Health and Human
Services. I will detail some of these accomplishments in my
testimony. But at the outset, let me note that we are making
good on our promise to bring greater efficiencies to the way
that we run the Department. The President's budget will reduce
the number of HHS personnel offices from 46 to 4. We are
realigning and consolidating throughout the Department,
bringing better stewardship to our use of the taxpayers'
dollars, and we have launched a regulatory reform initiative to
reduce the paperwork burden on physicians, hospitals, as well
as other health providers.
As we make sure we are working efficiently, we are also
providing the resources our health care system demands. The
total HHS request for fiscal year 2003 is $488.8 billion. This
is an increase of $29.2 billion, or 6.3 percent over the
comparable 2002 budget.
The discretionary component of the HHS budget totals $64
billion in budget authority, an increase of $2.4 billion or 3.9
percent. The fiscal year 2003 budget further strengthens our
ability to deal with the threat of bioterrorism. In total, we
are asking the Congress to give us an additional $4.3 billion,
an increase of 45 percent over the current fiscal year. This
funding will support a variety of activities to prevent and
respond to the incidence of bioterrorism.
Right now, we are providing $1.1 billion to State
governments to help them strengthen their capacity to respond
to bioterrorism and other public health emergencies. The money
is part of the bioterrorism appropriation bill, and I want to
thank all of you on a bipartisan basis for what you did, that
Congress passed and the President signed into law on January
10th. Most of the money has already been sent to the States.
We are working to hook up every major county and State
health system in the Nation electronically through the Health
Alert network. The Network is developing communications, the
Network used by the CDC, to be able to communicate with State
and local health departments regarding possible disease
outbreaks. We are providing more than a half a billion dollars
for our hospital preparedness program, which will strengthen
the ability of local hospitals to prepare for biological and
chemical attacks. We are also looking at the opportunity to
develop regional hospitals for surge capacities if in fact we
really have a serious bioterrorism attack.
The NIH is also researching for better anthrax, plague,
botulism and hemorrhagic fever vaccines. We have purchased 154
additional million doses of smallpox vaccine that we should
have all in store by the end of this year, so that we will have
one vaccine for every man, woman and child in America.
When it comes to bioterrorism, we are growing stronger in
our preparedness each and every day. We are also advancing
important biomedical research and preventive health efforts.
The NIH will get significant funding for new research into new
vaccines and protecting the security of its facilities.
The budget provides $5.5 billion for research on cancer
throughout NIH, and a total of $2.8 billion for HIV-AIDS
related research. The CDC will also receive $940 million for
its State and local programs to improve local laboratories,
train physicians, and expand cooperative training between
public health agencies and local hospitals.
We are also requesting $20 million for a new initiative
called the Healthy Communities Innovation. It is a new
interdisciplinary service effort that will concentrate
Department-wide expertise on the prevention or the reduction of
diabetes, asthma as well as obesity.
And Mr. Chairman, we are also helping to prepare low-income
Americans for the future. That is why welfare reform remains so
important. The good news is that since 1996, welfare reform has
exceeded expectations, resulting in millions moving from
dependence on AFDC to the independence of work. Nearly 7
million fewer individuals are on welfaretoday than in 1996, and
2.8 million fewer children are in poverty, in large part because
welfare has been transforming.
I also would like to quickly point out that the article in
the Washington Post today is incorrect. There is nothing in
this proposal on TANF to abrogate the minimum wage laws or the
Fair Labor Standards. I want to make that crystal clear to
everybody.
The President's budget boldly takes the next step, which
requires us to work closely with States to help those families
that have left welfare to climb the career ladder and become
more secure in the work force. The foundation of the welfare
reform's success remains work, which is the only way to climb
from poverty to independence.
The President's budget allocates $16.5 billion for block
grant funding, provides supplemental grants to address
historical disparities in welfare spending among States, and
strengthens work participation requirements. The budget
provides another $350 million in Medicaid benefits for those in
the transition from welfare to work.
We are also calling for a continued commitment to child
care, including $2.7 billion for entitlements, as well as $2.1
billion for discretionary funding. We are going to require
States to engage everyone in the TANF program in work or work
preparation activities. States will have to develop and
implement self sufficiency plans for every family and regularly
review the progress each family is making.
We are giving States the flexibility also they need to mix
effective education and job training programs with work, as
well as money to strengthen families and reduce illegitimacy.
Our budget also includes resources for programs targeted at
protecting our most vulnerable and at-risk children, including
significant funding for foster care and adoption assistance.
Modernizing Medicare is another key component of our across
the board effort to broaden and strengthen our country's health
care system. Since becoming Secretary, I have begun to
modernize the very structures of the centers for Medicare and
Medicaid services. These reforms are essential to the continued
success of Medicare, which is why the 2003 budget is a
significant step forward. It dedicates $190 billion over 10
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.
While we will not agree on the overall cost, I am confident
that as we come together in good faith, we can reach a fiscally
responsible and effective conclusion about what the funding
should be. This Administration recognizes the need to act now
to help seniors obtain prescription drug coverage. Our budget
provides $8 billion through the year 2006 for a new program for
States to be able to set up a drug-only coverage program to low
income Medicare recipients, whose income is 150 percent of the
Federal poverty level or less.
As we reach out to those still relying on welfare, and work
to strengthen Medicare, we cannot ignore the roughly 40 million
Americans who lack health insurance. Since January 2001, we
have approved State plan amendments, ladies and gentleman, on
Medicaid and SCHIP waivers that now have expanded opportunities
for health coverage to 1.8 million Americans and improve
existing benefits to 4.5 million individuals.
The 2003 budget 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 will support 170 new and
expanded centers to provide services to 1 million new patients.
The President's budget includes $89 billion in new health
credits to help American families buy health insurance
immediately. The program will support purchase of health
insurance as well as affordable expansions in State and Federal
programs, and will provide States the flexibility to set up
State-sponsored purchasing pools to harness the economies of
group purchasing.
Mr. Chairman, this comprehensive, aggressive budget
addresses the most pressing public health challenges facing our
Nation, from bioterrorism preparedness to coverage for the
uninsured. What binds this proposal together is a commitment
and a passion to ensure a safe and healthy America, and to
improve the lives of the American people, while fostering the
discipline the State of our economy demands. And I know this is
a commitment that all of us share.
Thank you again for letting me come before you today. I
look forward to your questions and the opportunity to work with
you on improving the quality of health and human services in
America.
[The justification follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
HEALTHY COMMUNITIES INNOVATION INITIATIVE
Mr. Regula. Thank you, Mr. Secretary. I am intrigued by
what you are doing in health care, because I think that is a
very sensitive subject with the public. It sounds as if you
have some ideas on programmatic ways to address the situation.
Will this require new authorizing legislation?
Secretary Thompson. Some will. But I am hopeful that we
will be able to, especially in the Healthy Communities
Initiative, get the necessary dollars put together. We have a
serious problem in America, as you know, Mr. Chairman, with
obesity. That is directly related to the kind of incidence of
increase we have in diabetes. We had a 3,200 person study done
by NIH that was completed this past summer that showed that if
individuals would reduce 10 to 15 pounds, walk or do other
exercise 30 minutes a day, and walking is sufficient, for 30
minutes a day, we could reduce the incidence of diabetes by 58
percent. And we are spending $100 billion a year in health care
costs on that disease.
So if we are thinking, if we can set up demonstration
programs across America to start addressing diabetes, asthma,
obesity, we could really improve the quality of health of our
citizens. That is what the Healthy Communities Initiative is
about.
Mr. Regula. It sounds intriguing. The practical
administration, do you work through the mayor's office, or do
you work through public health agencies? What is the tool?
Secretary Thompson. You would have to work through the
public health departments. I think that is the only way to do
it.
I also spent a week last year going to Indian reservations
across America. I was absolutely saddened when I went to a
reservation in South Dakota and on a Saturday morning, found
individuals standing in line for dialysis. Several of them were
amputees. It seemed to me that we have to get to the Indian
reservation, where the highest incidence of disease is. Also,
it is chronic with regard to African Americans and Hispanics.
The minorities are the ones that really have to get the kind of
information, the kind of diets and nutrition, and get people
involved in exercise programs, in order to reduce obesity as
well as diabetes. It is so important.
Mr. Regula. What roles will the schools, the education
system have, in this proposed program?
Secretary Thompson. I didn't realize this until I came out
here to find it, less than 25 percent of our schools have
physical education programs. I think it is important for us to
somehow try and get the Education Department and education
establishment to start reinstituting physical education
classes.
I know it is a matter of economics. But it seems to me that
if we are really going to change the incidence of obesity and
getting young people back into physical activities, I think it
is important to start somehow getting the education
establishment to reinstitute physical education. Education and
health departments are the key.
We also have to get this communicated, through public
relations departments, and the media. That is the way it is
going to be.
Mr. Regula. Do you anticipate working with the education
departments?
Secretary Thompson. Absolutely.
Mr. Regula. All right. It appears to me that what you are
trying to do is decentralize this information flow and programs
to get them on the ground, get them to produce something of
significance.
Mr. Obey, would you like to go ahead with questions?
Mr. Obey. Mr. Chairman, thank you.
I am not sure if they call you Mr. Secretary or Governor.
Secretary Thompson. Try Tommy.
HOMELAND SECURITY
Mr. Obey. In any case, either title is probably a whole lot
better than what a lot of people call you and me. [Laughter.]
Secretary Thompson. That is probably true.
Mr. Obey. Let me simply say first that I think that you
have done a good job in getting out the added bioterrorism
money that Congress provided last year.
Secretary Thompson. Thank you.
Mr. Obey. As you know, we had a severe difference with the
White House. If I can risk criticism from the cheerleader from
Mississippi in the Senate, who seems to think that members of
Congress can't whisper any criticism on anything having to do
with homeland security or the war, I have a lot of it. Because
I was frankly as irritated as I could be that we had to
overcome the resistance of the White House last year to provide
money that we were told by your agency, by the FBI, by the
National Security Agency and by a number of other agencies was
badly needed.
I am pleased to see that you are getting that money out to
States as fast as possible. And I want to work with you in
figuring out what else the Congress needs to do.
I think that I am going to put in the record, to save time,
Mr. Chairman, a description of what Congress provided by way of
bioterrorism preparedness funding in comparison with what the
Administration was willing to accept during that argument.
Mr. Regula. Without objection, it will be entered.
[The information follows:]
Bioterrorism Preparedness Funding in FY 2002 Supplemental
Appropriations
Congress provided $2.5 billion in FY 2002 emergency
supplemental appropriations for bioterrorism preparedness at
HHS, as part of the terrorism preparedness and response package
enacted in the FY 2002 Defense Appropriations Act.
This was $1.0 billion more than the bioterrorism
supplemental funding requested by President Bush. The major
elements are as follows:
National Pharmaceutical Stockpile--$1.1 billion to purchase
and stockpile smallpox vaccine, antibiotics, and other
appropriate vaccines, medicines, and medical supplies. The
amount enacted is about $47 million less than the
Administration's request, but that reduction was due to updated
cost estimates rather than any policy differences.
State and Local Health Departments--$865 million for grants
to upgrade the capacities of state and local health departments
to deal with bioterrorism and other outbreaks of infectious
diseases, including planning and assessment, and improvements
in epidemoiological, laboratory and communications capacity.
The President had requested only $65 million in supplemental
funding for these purposes.
Grants to upgrade hospital planning and preparedness--$135
million, compared to $50 million requested by the
Administration.
Funds to upgrade in-house CDC capacity--$100 million,
compared to $50 million requested by the Administration.
Accelerated NIH research on vaccines and treatments--$85
million. The President requested no supplemental funding for
this purpose. In addition, the enacted supplemental provides
$70 million for construction of high-bio-safety-level labs at
NIH to do this research, compared to zero requested by the
President.
Health Care Funding
Mr. Obey. But I would like to make a couple other points,
Mr. Secretary. I get frustrated by this health care ying and
yang that goes on every year, because both parties pose for
political holy pictures on NIH. And I think there's a reason
for that, because the benefits of research at NIH go out to
everybody, regardless of income. People understand that.
But then when I take a look at the rest of the health
budget, the part of the health budget that is primarily aimed
at poor people or isolated people, there the Administration's
budget request this year has a $1.4 billion reduction. It is a
7 percent reduction in nominal dollars that does not take into
account inflation and does not take into account added case
load. When you do that, it is about an 11 percent cut in real
per capita assistance to the people that need it the most.
And if you can run through what you are recommending, you
have a $740 million decrease for the Health Resources and
Services Administration and a $350 million decrease for the
Centers for Disease Control. There's a $114 million increase
for Community Health Centers, which I welcome, but that is
still the smallest increase for that program in three years.
The budget abolishes the community access program, it
recommends a 75 percent cut for health professions. It cuts
funding for CDC's chronic disease prevention by $57 million,
and freezes maternal and child health care grants to States for
childhood immunizations.
For NIOSH, every Republican administration since I have
been here has tried to squeeze the NIOSH budget. And this one
is no exception. They used the war as an excuse to once again
make cuts that Mr. Daniels would be recommending if the war
were not here--there is no question in my mind. This
Administration recommends cutting NIOSH by 10 percent.
I had people in my office yesterday talking about their
concern about rural health. Overall, HRSA's rural health
programs would be cut almost in half from $149 million to $75
million. Grants for rural hospitals would be cut from $40
million to $25 million. Funding for State offices of rural
health would be cut from $8 million to $4 million. Funding for
items such as defibrillators would be cut from $12.5 million
this year to $2 million next year.
Why is that a balanced approach to health care? I mean, why
on earth would we be cutting these programs, especially at a
time when States are making cuts as well. I notice your
successor in Wisconsin is eliminating the community health
program, a $3 million item. He is eliminating it this year. And
he says that he's eliminating it because he has assurances from
President Bush that the Federal Government is going to put more
money in to make up for that cut. I do not see how that is
going to be possible, given what is happening to the budget.
But why is that a fair allocation of resources?
Secretary Thompson. Congressman, you paint a dismal
picture, and I would just like to point out that we tried to,
like you have, a tight budget situation, you only have so many
dollars. And you have to make the tough decisions. The first
item that the President and this Administration wanted to make
sure we had money for was bioterrorism. There is a 45 percent
increase there, $4.3 billion.
Mr. Obey. The White House had to be dragged kicking and
screaming into asking for that money.
Secretary Thompson. The White House wanted to make sure
that the money was well spent.
Mr. Obey. I have confidence that you could spend it well.
Secretary Thompson. I have a lot of confidence that I can,
too, and that is what I am trying to do, Mr. Congressman. But
the White House felt that it would be better to put it over two
traunches, over two fiscal years, where it had been one. And
that is why they are asking for the 45% increase in this
budget.
The second thing is, we had to make sure that we continued
the amount of money at NIH. This is something that was a
commitment made by everybody, Democrats and Republicans in this
Administration. That was actually $3.7 billion. So when you add
the $4.3 billion and the $3.7 billion, it was all the money
that was allocated to the Department.
I tried to squeeze and to put the money where I thought we
could have the biggest impact, Congressman. And I think we did
a very good job of placing the resources where we actually need
it.
In regard to CDC, if I could just quickly add to that, in
regard to the CDC budget reduction, it was a reduction mainly
because of the reduction in the need for purchase of medicines
and antibiotics. We reduced that budget by $757 million this
past year due to the purchase of medicine. So there is actually
$757 million of medicines that had been purchased in the past
fiscal year or in the process of being purchased that we would
not need that extra money.
In regard to CDC budget, the area that you were talking
about as far as chronic, there is a reduction of $71 million.
Most of that money, $68 million, came as a result of the
program for the advertising program that was put in by the
former Congressman, Mr. Porter. That was $68 million, an
additional $3 million in administration savings. That is the
$71 million.
As far as programs, CDC has gotten increases. And NIH has
got an increase. As far as community health centers, we have
$114 million, this Administration is absolutely committed, as
you are, to making sure that we are able to get 1,200
additional or expanded community health centers in the next
five years.
Mr. Obey. Well, let me ask you a question on that. Our
Governor has eliminated the entire State funding of $3 million
for that program, because he says he's been assured by the
Administration that the Federal Government will make that up.
As I see the numbers in your budget, after you deduct the $10
million increase for malpractice liability, which is a
different purpose, you have a $104 million increase in this
program for this year. That is the smallest increase in three
years.
In Wisconsin we are 1.9 percent of the nation's population,
if we were to receive a similar percentage of that money,
Wisconsin would receive a little less than $2 million of that
increase. That would still leave us short of the Governor's cut
by $1 million unless we got more than we were supposed to. And
I guess I also wonder whether we are chasing our tail, if the
Federal Government is putting money in at the same time that
States are wiping out their support for these programs.
Secretary Thompson. It is pretty difficult for me to be
able to respond to a conversation that I was not privy to.
Mr. Obey. There is not any way that you can guarantee that
Wisconsin will get enough money to make up for that cut?
Secretary Thompson. You know, like you do, I look out for
Wisconsin, Congressman, wherever I possibly can. But in this
regard, it goes out where thecommunities need it.
Mr. Obey. So you can't guarantee it, and I can't guarantee
it.
Mr. Chairman, I have other questions, but we are out of
time.
Mr. Regula. I know. We will recess temporarily. Mr. Hoyer,
did you----
Mr. Hoyer. I am going to try to get back, Mr. Secretary,
but I have another hearing.
Secretary Thompson. Sure, go ahead.
Mr. Hoyer. I do not know how many votes we are going to
have, but if I can, I will get back.
Secretary Thompson. Thank you very much, Mr. Congressman.
[Recess.]
Mrs. Northup [assuming chair]. I know that I do not look
like Mr. Regula, but I actually am right now. [Laughter.]
DIET AND EXERCISE
Mrs. Northup. Thank you, Mr. Secretary, and I appreciated
your opening remarks and your remarks earlier today. I just
thought I would start with a suggestion. As we talk about
obesity and as we talk about exercise, to ask you make the
suggestion that the President lead that effort. I do remember
when President Kennedy, back in the early 1960s, talked about
fitness and health, and you may remember the 50 mile walks. As
could an average American, were they able to walk 50 miles. I
remember being so inspired by that--I was a freshman in high
school--that I organized our whole high school to see if we
could lead up to it taking smaller walks and longer walks.
People all over the State were trying to see if they could walk
from Louisville to Lexington, or Louisville to Frankfort, our
State capital.
I do think we have a President that is in excellent health,
and he invests a lot of time in recognizing the importance. He
probably underestimates what his level of inspiration might be
to the youth and the people of this country if he talked about
what it means to him, and became very public about that. So I
would just like to make that suggestion to you.
Secretary Thompson. If I could just quickly respond,
Congresswoman Northup, first off, I think you do an excellent
job as Chairperson. [Laughter.]
I want to add that, the second thing is, the President is
excited about this. He wants to be involved. He wants to do
something on prevention. We are developing a plan right now to
put him front and center on a prevention kind of strategy. I am
somewhat excited about that possibility, but also about the
possibility that a lot of people from Hollywood would like to
get involved. There is a lot of media interest in this, and a
lot of interest from minority communities.
So if we could somehow be able to orchestrate this and be
able to come up with a real genuine strategy, I think we could
do a great job on prevention. And that of course to me is what
we need to do in America. I think it is really wrong headed the
way we deliver health care, we wait until people get sick and
then we spend thousands of dollars to get them well. We do not
spend any money on prevention. And we know what works, reduce--
--
SCHIP MEDICAL WAIVERS
Mrs. Northup. Right. Well, I just thought I would encourage
you, from the very top, while I think it is important in every
school, the truth is, besides learning about it in your head,
your heart has to lead you. It makes a terrific difference when
somebody gets very enthusiastic and says, look, this changes my
life. Kids tend to follow that and want to participate.
I thought I would ask a couple of questions about the
medical waivers for the SCHIP program, and also some of the
ideas that you have about allowing States some innovative ways
to ensure that more people are covered. I remember the debate
when the SCHIP started. So many States said, could we possibly
use the dollars in the SCHIP to help families who are in work
situations where they have the opportunity to purchase group
health insurance plans, but their income is not sufficient to
cover what their co-payment is? Could we help pay for that and
could we help get a family plan when there is only an
individual plan that is paid for by the employer?
And what I ran up against was that the requirements for the
SCHIP program are so extensive, so broad-based, that almost
nothing but the Medicaid program would qualify. The benefits
have to be so great. I wondered if we would go back and look at
this, because in so many of the families that actually might
qualify, their children might qualify for SCHIP, because the
parents are now at work, they do not particularly want to have
their child in a Medicaid program.
Since private health insurance is the delivery system of
most Americans that are independent, if we could go back and
look at marrying the vouchers and the SCHIP program--allow
States to have a little more flexibility so that far more of
their uninsured could be covered--could you anticipate that
being part of this program?
Secretary Thompson. Congresswoman, you know I love new
ideas. I love ideas like that that are exciting and on the
cutting edge. Let me just quickly bring you up to date where we
are. In Wisconsin, when I was Governor, I applied for a waiver
to be the first State to allow for low income parents to be
able to buy into the SCHIP program, the Medicaid program, with
children. I want to tell you, after 24 months we were able to
get a waiver. It has been proven to be extremely successful.
Ninety-two thousand individuals have signed up on it, and in
that capacity, 52,000 additional children have been signed up
on Medicaid. So we were really able to get a lot of people
covered.
We were faced with a situation at the Department of Health
and Human Services where we even had some waivers going back to
1986, one waiver went back to 1986. So in the past year, we
have cleaned up all the past waivers----
Mrs. Northup. Do you mean pending waivers?
Secretary Thompson. Pending waivers.
Mrs. Northup. We did not have a decision yet from 1986?
Secretary Thompson. A decision, and State plans. We have
now had the whole backlog brought up to date, and we have
handed out 1,506 waivers and approvals of State plans. We have
developed a model waiver for the SCHIP program. As a result of
that model waiver, the States of New York, Massachusetts,
California, Arizona, Rhode Island and Delaware are now included
in an SCHIP program like Wisconsin's that allows for low income
parents to buy into the SCHIP program.
In addition, in this budget, the President has requested
$3.2 billion of money in the SCHIP program that has not been
used by the States to be able to be continually used by
theStates instead of being reverted back to the Treasury. So if that
passes, hopefully other States will take an opportunity to adopt a
model waiver, apply for it and get it and we will be able to expand it.
In regard to your very good constructive suggestion, I
would like to look at it. I am afraid the law does not allow us
to go to the next step to marry an SCHIP Medicaid with a
private insurance. But there is always the opportunity to
change the law to allow that to happen, and I would be fully
supportive of that.
Mrs. Northup. Thank you very much. I look forward to
working with you on that.
I think Mr. Jackson is next.
Mr. Jackson. Thank you, Madam Chairman.
And let me begin by welcoming you, Secretary Thompson, and
thanking you for your testimony.
Secretary Thompson. Thank you.
Mr. Jackson. Mr. Secretary, I have three questions. I am
going to ask my three questions all at once, because of the way
the Committee structures these questions and answers.
Mr. Secretary, I am disappointed that the President's
budget eliminates virtually all funding for the Health
Resources Services Administration's health professions training
program focused on diversity in the work force. The minority
centers of excellence, health career opportunities and
scholarships for disadvantaged students programs serve a
critical role in supporting minority health professions,
students, their institutions and the surrounding communities.
I am interested in what the rationale was for these cuts.
Do you think that we can find a way to work together to support
these critical programs that have such a positive impact on the
number of under-represented minorities entering the health
professions? Past Secretaries who have come before our
Committee have acknowledged this as a significant problem. They
have acknowledged that these programs play a significant role
in combating the problem. I am very interested in the
Administration's rationale for these cuts.
Second, Mr. Secretary, I am hoping that you can explain the
rationale for the President's proposal to consolidate all
public health services facilities construction programs within
the Department. I strongly believe that NIH, HRSA and CDC have
all done a good job in administering their respective programs.
I am particularly impressed with the expertise and the
sensitivity demonstrated by the National Center for Research
Resources and the National Center on Minority Health and Health
Disparities in this area.
Can you tell me why the Administration feels differently?
Also, do you believe that the Administration has the authority
to transfer these programs without Congressional approval?
And last, Mr. Secretary, my third question concerns LIHEAP.
I am very concerned about your proposed budget cuts for LIHEAP.
The State of Illinois receives a little more than $76 million
from the LIHEAP program, making it the third largest recipient
of LIHEAP funds. My Congressional district receives an average
of $12 million, or about 16 percent of the State total. In
terms of LIHEAP funds, the next closest Congressional district
receives about 4 million, or about 5 percent of the State
total.
Obviously LIHEAP is an important program to me and my
constituents. I am hoping you can explain to me why there is a
reduction of $300 million in the regular LIHEAP appropriation.
Thank you, Mr. Secretary, and thank you, Madam Chairman.
HEALTH PROFESSIONS FUNDING
Secretary Thompson. Thank you so very much, Congressman.
Let me try to go through them one by one.
In regard to the first one, the health professions cut,
this one is something that we do not believe is as successful
as other programs are. That is why there was a reduction. We
did not have enough dollars in the allocation given to us by
OMB, and we felt that this program was one that did not have as
much success.
Why do I say that? First off, only 30 percent of the
individual doctors and medical personnel that have been trained
in this program go into under-served areas. So we decided to
put more money and an additional $44 million into the National
Health Service Corps in order to those individuals going to
under-served areas.
In regard to that, we also spend approximately $8 billion
in Medicare dollars--I know this is not in the jurisdiction of
this Committee--that goes into training professions, $8 billion
annually. We think that $8 billion and the additional $44
million, which is $198 million in the National Health Service
Corps, is a better utilization of the dollars than this was. We
did put additional money into the real shortage area, and that
is for nursing. We have put in some additional money in regard
to that.
But as far as doctors, that was reduced, I agree with you.
We feel that we have compensated. We also put in some
additional money at NIH for minority programs for use of
scholarships for minority students. I think we have three
programs up at NIH for minority students in order to go to
school and going into science professions. So we use those.
That is why.
Mr. Jackson. Mr. Secretary, if I can, just before we get to
LIHEAP, in past Committee hearings with Secretaries and expert
testimony, the Committee has essentially concluded that African
Americans who come from disadvantaged areas and are pursuing
careers in the health professions, have a tendency to locate in
those disadvantaged communities after advancing their careers.
Native Americans have a tendency to relocate to or return to
reservations and Native American communities after they have
received their health professions training. Hispanics and
Latino Americans tend to relocate back to Latino and Hispanic
communities after the end of their educational careers.
More often than not, the motivation for getting the
education and solving some of the disparities and health issues
that tend to plague these communities are the byproduct of
broader general Anglo-Americans not willing, to come and work
in these low income communities after their medical edcuation.
So what we find here, and this is expert testimony well
documented by this Committee, is that these programs are
central to encouraging indigenous health professions personnel
to get the training necessary and to return to their
communities to help combat the overwhelming disparities.
So I certainly hope, Mr. Secretary, that on the question of
these particular cuts, that the Administration and your office
would certainly reconsider it. Past Secretaries and past expert
testimony has shown us that these programs do work. I would
like to explore at some point intime the rationale that OMB
made for these cuts. We have sufficient evidence that suggests it is
just the opposite of what you are suggesting, sir.
Secretary Thompson. I would just like to point out that we
have the assessment that only 30 percent of the individuals
trained to serve in medically under-served areas, that is why
we put the money in the National Health Service Corps, because
those individuals have almost 100 percent gone into under-
served areas, into minority areas, like you represent. I want
to accomplish that. I want to be successful. And we feel that
the National Health Service Corps is the better investment, for
scholarships for minority students to be able to go back into
under-served areas.
We also are putting $8 billion into training doctors for
the Medicare program. I know this is not in this jurisdiction,
but a lot of that goes to minority students. I am fully
supportive of that, I am passionate about that. Also, we set up
three programs through NIH for minority students.
For those three reasons, we felt that those three programs
were more successful, Congressman, than this program. That is
why we took a reduction. But at the same time, in the area of
real shortage, nursing, we put an additional $6 million into
that program in this category. Because we know there is a
shortage there, and we want to be able to increase that.
CONSOLIDATION OF HEALTH FACILITIES CONSTRUCTION
In regard to the consolidation of the building program, I
have a very decentralized department. I have 46 personnel
offices. I have over 200 different computer systems. I have
four bookkeeping systems. I have building missions in every one
of the divisions. There are a lot of overruns. You say they are
doing a good job. I agree, most of the time they are doing a
good job.
But I have overruns in some areas of building programs of
over 20 percent. I do not think that is something you would
accept. I do not. And that is why I want to be able to
consolidate it, bring some centralization to it, and make sure
we do not have the overruns.
LIHEAP
In regard to LIHEAP, there is a $1.7 billion request, that
is level funding, from this year's spending it is not a cut.
You can say there is a cut when you say there was $2 billion a
year and a half ago, or look at unobligated contingency funds
and if that is what you are basing it on, then I would have to
agree with you. But based upon last year and expected
obligations this year, there is a $1.7 billion, that was the
level funding. Congress did offer a supplemental proposal of
$300 million in a supplemental appropriation last year. That
money has not been spent.
That is why we thought level funding of $1.7 billion,
especially with the prices going down, and especially this past
year with the kind of weather conditions and the winter we had
in Illinois and in Wisconsin and other northern States, we felt
$1.7 million was the correct amount. Those are the reasons and
rationales.
Mr. Jackson. Thank you, Mr. Secretary.
Mr. Regula [resuming chair]. Mr. Hoyer.
DEPARTMENT'S BUDGET REQUEST
Mr. Hoyer. Mr. Secretary, thank you very much. I am going
to try to be quick, as I told you, I have to go to another
committee meeting.
Let me first ask you, in your response to Mr. Jackson, you
said, that is what we felt were the correct numbers. I
understand what you are saying. Let me ask you something,
though. In your opening remarks, you gave figures for the
overall budget and in your remarks you have the budget figures
that are within our jurisdiction. Using either one, can you
tell me how much you requested that went to the President, went
to OMB, and how much you got back? Do you know that number?
Secretary Thompson. I got less. [Laughter.]
Mr. Hoyer. I am not surprised or shocked. I am pleased that
you asked for, I presume, did you ask for money that you didn't
think we needed? [Laughter.]
I know these are hard questions, Mr. Secretary.
Secretary Thompson. Congressman, you know I would never ask
for money I didn't think we actually needed.
Mr. Hoyer. How much did you ask for, Mr. Secretary?
Secretary Thompson. Pardon?
Mr. Hoyer. How much did you ask for?
Secretary Thompson. In which program?
Mr. Hoyer. Overall. You say in your statement, the
discretionary component of the HHS budget totals $59.5 billion.
Now, you related that to $64 billion. Of course, that $64
billion is in total for your department, some of which is not
within our jurisdiction. So my presumption is the figure you
use in your statement is the $59.5 billion relevant to this
Committee. I do not care whether you relate to the $64 billion
or the $59.5 billion. But my interest is in what you requested
of OMB in discretionary spending to meet the needs that you
perceived to be present.
Secretary Thompson. We looked at, Congressman, the level
funding in a lot of programs. You can add up those programs,
and where there has been a reduction, and----
Mr. Hoyer. You were level funding across the board?
Secretary Thompson. Not entirely, no. But in those programs
where there have been cuts, we had level funding.
Mr. Hoyer. Okay. Can you get----
Secretary Thompson. But you have also got to realize, there
is some difficulties, because the HHS budget is the last one
that the President receives from Congress. We were working off
of what we thought the conference committee was going to come
up with. So in some regards, we did not have the same amount
that was finally appropriated by Congress and signed into law.
Mr. Hoyer. Which was more, which was less?
Secretary Thompson. The Congress usually exceeded the
amount that we had requested, because we did not have the
benefit of what the Congress was going to do. As you remember,
this is the last proposal that was passed. Our budget had
already been into OMB months before you had the opportunity to
find the final numbers. We were trying to make changes right up
until the end, sir.
Mr. Hoyer. Mr. Secretary, I appreciate that. I would like
to have for the record, if you do not have it in front of you,
the amount that you requested that relates to that $59.5
billion, to what you requested OMB was necessary to fund the
objectives that are in your budget.
Now, let me make it specific. You indicate that an increase
of $2.3 billion. Now, there is a $3.7 billion in NIH alone. Is
that correct?
Secretary Thompson. That is correct.
Mr. Hoyer. Does that mean there is a $1.4 billion cut,net
cut in the remaining programs, some went up, some went down? Am I
correct?
Secretary Thompson. That is correct, but there is also a
lot of one time items, Congressman, that didn't need to be
funded. For instance, we had last year $645 million in CDC to
increase the pharmaceutical----
Mr. Hoyer. I heard that. I understand.
Secretary Thompson. So we only have to have $300 million in
CDC for that. We had $512 million in the purchase of smallpox.
We only have to use $100 million this year, and not for
smallpox, for another drug called Vig, for the antidote to a
reaction to a smallpox vaccine.
So there are many of those areas, there are a lot of one
time items and building programs, Congressman, that were put in
usually by individual Congressmen that were one time items that
were backed out. All of those items probably were somewhere in
the neighborhood of $1.6 billion. So you have to take that into
consideration as well.
HEAD START
Mr. Hoyer. All right. Let me go to a specific program, Head
Start. You increased it by $130 million.
Secretary Thompson. That is correct.
Mr. Hoyer. That is 1.9 percent on its base, and a 2.9
percent CPI environment. In your statement, it appears that you
do not perceive there to be any additional seats available for
Head Start children. Am I correct on that?
Secretary Thompson. I do not know what you mean by seats
available.
Mr. Hoyer. Slots.
Secretary Thompson. I know there's waiting lists out there
for Head Start.
Mr. Hoyer. Yes, we are doing somewhere in the neighborhood
of between 50 and 60 percent of eligible children that have
slots available to them in our Head Start system in America.
Secretary Thompson. It is about 65 percent, Congressman.
Mr. Hoyer. My question to you is, therefore, Mr. Secretary,
am I correct in observing, because the increment allotted to
Head Start is less than the CPI, that we do not contemplate
additional slots being available in Head Start?
Secretary Thompson. We think that there will be some
additional slots available. But not many.
Mr. Hoyer. You have got your little pink sheet there. Can
you tell me how many? I do not want to pin you down, but----
Secretary Thompson. I do not know where this pink sheet
came from, Congressman. [Laughter.]
Mr. Hoyer. Hey, these pieces of paper sort of fall from
very helpful people I find.
Secretary Thompson. It is estimated at 915,000 children,
which is just about 5,000.
Mr. Hoyer. Now, if we are going to serve 5,000 additional
children with a 1.9 percent in a 2.9 percent environment,
Governor, you have sat down and done these numbers. How are we
going to do that?
Secretary Thompson. All I can tell you is the numbers that
were put through.
Mr. Hoyer. I got you.
Secretary Thompson. And that is what they gave all of us.
Mr. Hoyer. One of the things we are concerned about, as you
know, quality assurance and comparability with teachers'
salaries. Because one of the things we have had, as you know,
trouble getting, we require certain skill levels of Head Start
folks, but the pay is substantially behind comparables.
Secretary Thompson. Most of that $130 million is to go for
the inflationary amounts for salary increases for the staff and
the teachers, as you know, Congressman. We are also trying to
put in, in the Head Start program, an additional reading
program. We are trying to get $50 million for that program,
Congressman, through other programs in the Department.
Mr. Hoyer. An additional $50 million into Head Start?
Secretary Thompson. Yes, internally.
Mr. Hoyer. In addition to the $130 million?
Secretary Thompson. That is internally. We are trying to
develop a more accurate and a better reading program for Head
Start students. So we are trying to internally fund that. We
have folks doing that.
Vaccines For Children
Mr. Hoyer. Mr. Chairman, if I can ask just one last
question, and then I'll have to leave. As you know, Mr.
Secretary, because you and I have talked about this, vaccines,
you have talked about it in your testimony, as you know,
unfortunately, we went down a point in terms of children
covered from 76 to 75 in the last year. So we are at about 75
percent.
As I understand it, we have level funded vaccines. Now, you
indicate that to some degree, some of those were one time
expenditures. I do not know the figures off the top of my head,
I think it was $675 million, part of that was for supplies,
part of it was for local governments' administration, I guess.
There was an additional sum for that.
My question is, with the vaccine shortage, and a fourth of
our children not vaccinated properly, will flat funding move us
ahead?
Secretary Thompson. I have set up a task force and I have
assigned the Assistant Secretary of Health to take a look at
this to find out how we can encourage more companies to get
into the production of vaccines. The problem we have had is
that too many companies have gotten out of the business because
they've not found it profitable, and the liability is so
extreme that they do not want to take the challenge, they do
not want to take the risk, and they do not want to put in the
investment to develop it.
As a result of that, the level funding is about all the
vaccine that is being produced. So until we get more companies
involved, better manufacturing practices and better production
rates, the money could just sit there, because we do not have
the opportunity to spend it.
To answer your second question, however, am I satisfied
with only having 75 percent of the children vaccinated,
absolutely not. I think it should be the goal of all of us to
be able to find ways to get all of the children vaccinated,
because it will save health expenses in the future, and it will
also improve the quality of health of our students and children
across America. I am passionate about it, and I agree with you
and I support you in that regard.
Mr. Hoyer. Mr. Secretary, not a question, but I want to
make it clear that my question was not whether you were
satisfied, because my presumption is that you are not. I want
to tell you, I think you are a passionate advocate of this. My
question was, and you do not need to repeat the answer, was at
a freeze level, will that be sufficient to give us the
opportunity to try to overcome that 25 percent.I know you want
to do that, we share that view.
Thank you, Mr. Chairman.
Secretary Thompson. I am hoping to come up with some
recommendations for you, Congressman, and for this Committee
and for this Congress as to how we might be able to increase
the vaccination supply and manufacturing in America. We are
asking a lot of companies to come in and we are talking to
them, trying to find ways to address this question.
Mr. Hoyer. Thank you, Mr. Secretary.
Mr. Regula. Mr. Secretary, did I understand you correctly,
you are beefing up the Head Start program to move it into more
of an education type of program? You mentioned reading and
some. Because historically, it was a welfare program. That is
why it is in your Department.
Secretary Thompson. That is correct. We want to put a
reading component, we think that is absolutely vital, in order
to improve Head Start. And since we didn't have any extra
dollars in the program, we are trying to find other monies and
other programs that are close, similar to Head Start, but have
the same kind of needs for children. We are trying to find $50
million----
Mr. Regula. I assume that you'd have to get a higher level
of education or experience in the people that you hire to
accomplish this, which would of course put some pressure on
your salaries.
Secretary Thompson. That is correct.
Mr. Hoyer. Mr. Chairman, if you will yield on that. I
absolutely support that objective. I think that is the right
thing to do. Children clearly can learn a lot earlier, and we
need to engage them and challenge them a lot earlier. I applaud
your efforts. My only question was, if you can get $50 million
from someplace, $130 million I do not think is going to give us
the resources to get there.
Thank you, Mr. Chairman.
Secretary Thompson. Thank you, Congressman.
Mr. Regula. Mrs. Lowey.
MAMMOGRAPHY
Mrs. Lowey. Thank you, Mr. Chairman.
I want to join the Chairman in welcoming you, Mr.
Secretary. We look forward to continuing to work together.
I want to begin with two questions that I'd like to put
forward. The first regarding mammography. I was glad to see
that you entered the debate and provided your input. I agree
with you, based upon all the evidence which we have shared,
that women should still undergo an annual mammogram after age
40. It is important that women have all the facts about the
procedure, but also that they understand that it is the best
tool we have right now to detect breast cancer early.
However, Mr. Secretary, I think that the current debate
over the data on mammography misses the point. Because I think
it is time for the next generation of early detection. I know
that researchers across the country are looking at promising
new methods. Despite these advances, even the new technologies
have glaring shortcomings. Experts and scientists agree that we
still have not found the 21st century early detection method we
need. And I believe very passionately that we must
substantially increase and accelerate research into these and
other breast cancer screening techniques.
I'd like to ask you what you think the next steps will be,
what leadership will HHS provide on this important issue. I am
going to follow up with one other question, and have you
respond to both, because I too have to go to another hearing. I
apologize.
Number two, yesterday HHS issued a notice of proposed
rulemaking to implement a new policy you announced last month.
The new rule would expand the Children's Health Insurance
Program, CHIP, to include ``unborn children.'' With all due
respect, Mr. Secretary, I think the Department is going about
this the wrong way. Not only does this rule invite an
unnecessary and unrelated debate into what I think is an
absolutely critical and important issue, but there are glaring
holes, in my judgment, in the coverage this rule would provide.
I have been told that under your proposed rule there are
circumstances when the women's health could be at issue, but
because that health problem may not immediately affect the
fetus, the women would not be eligible for care. The rule would
force physicians to pick and choose between what affects the
fetus and what affects the woman. Clearly, a woman's overall
health is vitally important to the health of her baby. This
approach, frankly, just doesn't make any sense.
And as you may know, Mr. Secretary, with Henry Hyde, I have
introduced to several sessions a bill in the House that is
identical to Senator Bond's bill which you endorsed in your
announcement last month. The bill would allow States to cover
low income pregnant women under CHIP. This is frankly a
straightforward way to ensure that women receive the care they
need for a healthy pregnancy.
If you could explain to us, why did you choose to take a
needlessly divisive and potentially flawed approach? Perhaps if
you can begin with that question and we can go back to
mammography. Thank you so much.
Secretary Thompson. Well, first off, I am getting
criticized for that rule, and basically I do not know why. The
rule is set up to allow for low income mothers to get prenatal
care, something I know that you believe in, something I believe
in.
SCHIP--PROPOSED RULE TO INCLUDE THE UNBORN
Mrs. Lowey. So why didn't you just do that?
Secretary Thompson. Because you have not passed the law
yet.
Mrs. Lowey. But I do not understand. Why do we have to
provide coverage for the unborn child, which you and I know is
controversial, and brings into it a whole other issue, when all
we can do is deal with pregnant women?
Secretary Thompson. I do not want to make it controversial.
I want to be able to help low income women get prenatal care,
so that they can have healthy babies. Because that is going to
improve the quality of health of that baby. That is the reason
for the rule.
The reason you have an NPR, a Notice of Proposed
Rulemaking, is to give people an opportunity to comment on it.
We are going to have 60 days in which people can comment on
this particular rule. We can make changes. There's nothing
concrete about the rule. The ultimate objective of the rule is
the same thing that you and Congressman Hyde are trying to do,
to give low income women the opportunity to get prenatal care.
So if you can pass the bill, we do not need the rule.
Mrs. Lowey. But what I am trying to understand right now,
under Medicaid, pregnant women are getting that coverage if the
States----
Secretary Thompson. Under Medicaid, but not under SCHIP,
the way the law is written they cannot get it.
Mrs. Lowey. Correct. Now, thank you, right. Mycolleague is
helping me with that.
Secretary Thompson. I am sure of that. [Laughter.]
Mrs. Lowey. I always welcome my support from my good
colleague.
Medicaid requires States to cover prenatal care and
maternity care for women with incomes up to 133 percent of the
Federal poverty level, correct. Thirty-nine States have higher
income ceilings, making even more women eligible for care. The
Federal Government can also grant waivers to States to cover
pregnant women under SCHIP and two States, New Jersey and Rhode
Island, have already received such waivers and are covering
pregnant women.
Secretary Thompson. That is correct.
Mrs. Lowey. Let me just say one thing. You and I know that
we are both committed to covering pregnant women.
Secretary Thompson. That is right.
Mrs. Lowey. If we do it straight, and make it clear that
pregnant women deserve these coverages, through waivers,
through rules, through regulation, encouraging legislation, we
can do what we really want to do. By talking about providing to
unborn children, and I am not going to go into further details,
you and I know, Mr. Secretary, with the greatest respect, it
brings all kinds of other issues that have tied us up in the
Congress for years and years and years.
Let's just get pregnant women covered. I look at my kids,
my children, you know, we always talk about our grandchildren,
our kids are lucky that they get this coverage. And there are
too many women that do not have the coverage. Let's just do it,
through waivers, through regulations. Why get into the unborn
child issue?
Secretary Thompson. I can do it by waivers. You are
absolutely correct. But only two States have done it. By the
time I get waivers for the other 48 States, some may or may
not, I think there's going to be a lot of women that will not
get the coverage. That is why I put the rule out there, because
I would like to get these low income women covered for prenatal
care.
That bill that you have introduced was introduced last
session and it didn't pass. It doesn't look like it is going to
pass this year. And in the meantime, a lot of low income women
across America are not going to get prenatal care.
So I made a decision. I made a decision, I have got the
power and the responsibility to help low income women get the
prenatal care. That is why the rule is out there, for no other
reason than to get that coverage. It is the fastest, the most
efficient way.
If you can pass the law, fine, then we do not need the
rule. And if you can get 50 States to apply for a wavier
tonight, tomorrow, next week, we do not need the rule.
Mrs. Lowey. Let's work together on that.
Secretary Thompson. I want to work with you. I like you. I
want to work with you.
Mrs. Lowey. I like you, too. [Laughter.]
Secretary Thompson. So let's----
Mrs. Lowey. Let's do it. I have the greatest respect. Let's
work on the waivers, let's work on the legislation. And if you
can come out again and support the legislation--you know what I
really believe? And as you know, I am involved in this----
Secretary Thompson. I want to get to mammography.
Mrs. Lowey. Okay. I want to say one more word and then to
mammography. I just want to say, I am involved in the other
debate. And I am not going to get into that now, because I
think it is so important to make sure that pregnant women get
covered.
Secretary Thompson. So do I.
Mrs. Lowey. And I do not want to politicize the issue. I
can't imagine why you, knowing your commitment to this, would
want to get into this issue right now.
Secretary Thompson. I do not want to get into the issue.
Mrs. Lowey. So let's work on waivers, pass my legislation
that Henry Hyde introduced, with Bond, let's go back to
mammography.
Secretary Thompson. Let's pass the legislation.
Mr. Regula. We'll move to the next.
Mrs. Lowey. Oh. Well, you can respond another time. Unless
you want to say something quickly about mammography.
MAMMOGRAPHY
Mr. Regula. Mr. Secretary, go ahead.
Secretary Thompson. Well, that is why we have put in an
additional 12 percent increase at the Cancer Institute. All of
us have got a loved one, in my case my wife had breast cancer,
and is incident free for the last several years. It is
absolutely vitally important. It is such an insidious disease.
Let's get on with it, let's find the cure. That is why the
extra money is in there.
Digital mammography is the next step. It is not 100
percent, but it is improving. Every year we are making some
improvements. Let's keep the research dollars going until we
find a cure.
Mrs. Lowey. Thank you very much, Mr. Secretary.
Mr. Regula. Thank you, Mrs. Lowey.
Mr. Wicker.
HEALTHY COMMUNITIES INNOVATIVE INITIATIVE
Mr. Wicker. Thank you, Mr. Secretary. Always glad to hear
from you.
Let me just ask about the Healthy Communities innovation
initiative. I understand that this program would target five
communities. What do you mean by that?
Secretary Thompson. We want to be able to do this program
right. We want to be able to find five communities that are
really going to step forward and put together a program to try
to make their community healthy, by reducing asthma, improving
nutrition, reducing obesity, and increasing exercise. As I
indicated, we have 3,200 individuals in a study. We found out
that if individuals would lose 10 to 15 pounds and walk 30
minutes a day, you could reduce the incidence of diabetes by 58
percent.
Mr. Wicker. I was here for that part of the testimony. But
how big is this community? Are we talking about the delta
region of Mississippi? Are we talking about Los Angeles County?
How much have you fleshed this out? Frankly, I asked some of
your staff about this during the break and didn't really get a
very clear answer.
Secretary Thompson. Basically, it is very general. First
off, you have got to have somebody that really wants to do it
like Philadelphia last year, under Mayor John Street. He asked
the whole city to go on a diet.
Mr. Wicker. And it worked?
Secretary Thompson. I think it did.
Mr. Wicker. Do we have some data to back that up?
Secretary Thompson. I am not sure, but I think we do.
Mr. Wicker. I'd sure be interested in that. Now, we are
going to spend $20 million on five geographic locations.
Secretary Thompson. Right. You could increase that to six,
seven, eight, whatever the Congress says. I threw out the idea,
because I am looking at the situation in America where we are
at epidemic as far as obesity and diabetes and asthma.
Mr. Wicker. Well, listen, Mr. Secretary, I want to tell
you, I am not trying to be critical, because I agree with the
spirit of this program. And what you said about obesity is
right on target. I just wish that we could figure out a way as
a Government to get a handle on this problem, because it leads
to so many other things, including diabetes, juvenile diabetes,
cardiovascular disease and things of that nature.
I am just wondering how, are we going to be duplicating
what we are already doing, or how are we going to interact with
the CDC programs? I understand you plan to run this program out
of HRSA, is that correct?
Secretary Thompson. That is correct.
Mr. Wicker. For example, we spend, you are advocating $37.6
million for heart disease prevention in the CDC budget, $62.1
million for diabetes prevention and control, $227.5 million for
health promotion, including obesity in the CDC budget. How will
these two programs interact, or will the CDC not be
participating with HRSA in these five particular communities?
Secretary Thompson. Oh, absolutely they are going to
participate. It is very important to participate. I look at
this whole situation, Congressman, based upon the fact that we
spend billions of dollars waiting for people to get sick and
then trying to get them cured. We spend very little money on
prevention. I want to get the President involved, I want to get
the Congress involved, I want to get the media involved, I want
to get the cities involved, I want to get the State Governors
involved in starting a prevention kind of health quality in
America.
If I can highlight five communities or five regions and be
able to put a lot of resources in there, I am hoping to make it
a contagious kind of thing and that other cities will want to
do it. And, other States will want to follow through and try
and make it work. We have to incorporate the whole department--
CDC, HRSA, NIH, with all of our data on diet, on exercise, on
asthma, on new therapies and so on to see what we can do to try
and make a prevention kind of a theory. That is what it is.
I want to get the President involved, I want to get sports
people involved, I want to get the media involved, I want to
get you and the Congress involved. That is what we are trying
to do. We are trying to bring all of these programs together in
an integrated fashion and see if we can have some successes.
That is why we are starting out small.
Mr. Wicker. If we appropriate $20 million, how soon can you
have a program like this up and running and taking bids and
deciding on the five communities and having something actually
there?
Secretary Thompson. Very quickly. In past experience, we
are able. We got the bioterrorism bill signed on January 10th.
By January 31st, we had letters sent out to all the Governors,
providing the outlines of the bioterrorism program. We had the
money set out 10 days later. We are having the plans put in by
April 15th and we'll have all the remaining money out by May
15th. I think that is the fastest any department has ever
operated for such a huge program. And that is $1.1 billion. For
$20 million, we think we can be just as fast.
Mr. Wicker. Well, let me just say, Mr. Chairman, I
appreciate your indulgence, and I think we may be on to
something here. But I think the members of this Committee would
want to see a concrete, fleshed out plan about how this will
actually work. Because our goal is good. But I am just
concerned, you mentioned information. And I noticed that we
have spent two years developing an information campaign, and
now it seems like we are going to abandon that. So I would just
urge you to be specific.
I would say I want to work with you, because I think you
have hit the nail on the head as far as some activities that
people can take, actually prevent health problems.
Secretary Thompson. And I would welcome your suggestions on
that as well, Congressman.
Mr. Wicker. I look forward to working with you, Mr.
Chairman, on this.
Secretary Thompson. Thank you.
PREVENTION
Mr. Regula. I must say personally, I like preventive
medicine. I think that is where you get the great gains. I am a
little interested in this, you took out the national campaign
to change children's behavior. We had $68 million, yes. It
doesn't seem to quite square. Maybe you can explain that.
Secretary Thompson. Well, we put in $125 million last year.
This year it is $68 million. We have not been able to get any
of the commercials out as of yet. They will be coming out in
May of this year and this fall. We just felt, that we had $125
million plus $68 million, we--
Mr. Regula. You had the money that is not been used?
Secretary Thompson. It is not been used. That is the
reason, Congressman, that we did not have to ask for money this
year.
Mr. Wicker. May I interject?
Mr. Regula. Certainly.
Mr. Wicker. It is not, Mr. Secretary, that you do not
believe in that program?
Secretary Thompson. No.
Mr. Wicker. It is just that there's money waiting there.
Secretary Thompson. The contracts have been let and the
actual media will be going out in May of this year. And, this
fall, the experimental programs are going to go out. Therefore,
I would like to see some sort of feedback as to whether or not
we are successful. We have $200 million invested in this
program, and we have not seen any results of it yet.
Mr. Wicker. I guess that is why I was asking a question
about how long it is going to take to develop some of these
programs. Seems like this has been an awful long time in the
making without one single commercial being aired.
Secretary Thompson. I think it is taking way too long,
Congressman. I agree with you.
Mr. Regula. Mr. Kennedy.
SENIOR MENTAL HEALTH CARE
Mr. Kennedy. Thank you, Mr. Chairman.
And thank you, Mr. Secretary. I wholeheartedly agree that
prevention is the way to go in health care. And in that regard,
if I could be so bold as to suggest that Medicare and Medicaid
ought to cover everyone in this country. That way we could get
a handle on preventive medicine, because we would have the
incentive as a Government to cover people earlier on and avoid
all the costs later on that come from a private health
insurance system that is only into quarterlygains, and
therefore not interested in all the things that need to be done, like
immunizations, like preventive health care. Because they are looking
for their quarterly gain. That is the problem with for-profit, private,
corporate insurance.
I just would say that at the outset. I think single payer
is going to have to be looked at as the direction we go in, or
else we are never going to get the real kind of catchment area
that we can work with in order to get real gains in preventive
medicine, which is what health care should be, is about health
care.
I want to draw your attention to the issue I brought up
last time, which you were good enough to remember when we saw
each other recently, about mental health care. And senior
citizens, there's going to be a booming senior citizens
population, with baby boom becoming the senior boom. I want to
ask you about that, because as you know, the over-utilization
of Medicare can really be attributed to the fact that many
seniors are going undiagnosed for mental illnesses.
In the budget that you have submitted, I noticed that CHMS
budget for mental health block grant is flat funded. And
there's no other programs set aside except the one that I
managed to work with the Chairman to earmark last year for a
senior mental health initiative. Given the fact we are going to
have this baby boom generation coming, and given the fact
they've got huge mental health issues, and that we are not
preparing for this, I'd like to ask you what we think we can be
doing.
Because in this budget, not only do we flat fund the CHMS
block grant, mental health care block grant, but we also
eliminate the funding for the education under the aging HRSA
budget that trains doctors, nurses and social workers to care
for patients and identify mental illnesses. That actually goes
in great contrast to the report that HHS will soon release, the
Primary Care Research and Substance Abuse and Mental Health
Services for the Elderly, that is what that stands for, study.
That says that primary health care services are the preferred
services by older adult Americans when it comes to obtaining
mental health and substance abuse services, which is obviously
no surprise.
So we have that report coming out, the PRISME report. It
says that we need to increase access and yet we cut the block
grant that helps them, and we also eliminate the funding for
education of those that provide these services, which is a big
part of extending accesses to make sure there is enough people
out there who know how to deliver the services. And their
funding is cut.
So given all that, and on top of all of this, when you look
at the increases in NIMH funding, there is one dollar invested
in mental health for research, for every $6 that is invested in
AIDS. One dollar invested for mental health for every $9 of
cancer, $1 for every mental health for $65 of heart disease,
and $1 for mental health for every $161 in schizophrenia and
severe mental illness.
So National Institutes of Mental Health is actually in
comparison to all other areas, growing at the slowest rate of
all other institutes at NIH. This is in spite of the World Bank
and an independent study by the World Health Organization that
four of the top ten causes of disability world-wide are severe
mental illnesses.
So I know that you are under the same kind of pressure as
anyone else, and that is, how do we address this? I know it is
a lot easier to ignore it, because then you do not have to pay
for it. But Medicare is discriminating. It doesn't treat mental
illness as a physical illness. We have our Surgeon General who
says that it is physiologically a physical illness.
And I do not think anyone in this room would support the
notion that, well, we can't pay for cancer because we just have
made a decision that we are not going to pay for it, because in
essence, that is what we are saying when we do not pay for
research in mental illnesses. You are just saying, well, we
have made a political decision that we are going to cover
cancer and AIDS, but we are not going to cover schizophrenia
and severe mental illness.
To me, I do not know how you can support that notion. I
still do not know how we can support the notion of Medicare
only reimbursing it 50 percent for outpatient services. I
think, Mr. Secretary, you are on the right track for
prevention, and I like these communities of care notions that
you are pushing.
But I think if we are going to address the long term costs
to Medicare and Medicaid, we had better get a better handle on
this mental illness issue, because I think it is going to drive
a lot of the cost. Seventy percent of the admittance at
hospitals for Medicare patients are drug and alcohol related.
Secretary Thompson. Sixty-six in prison.
Mr. Kennedy. So we know this. And I would welcome any work
that you can do with me on trying to get this issue more on the
national agenda than it is currently. I know of your support
for parity back in Wisconsin, and I know you agree with this,
and I know you have got a lot of pressures on you to balance
your budgets and so forth. And I know there's not a lot of
people out there screaming for this.
So let me just scream on those people's behalf who aren't
screaming about it and say that we really should do more. And I
would like to work with you to see that we do more in preparing
for senior mental health by making sure there's adequate
dollars for training of primary care physicians and also making
sure that we increase the block grant. I'd ask you if you have
any comment on all of that.
Secretary Thompson. First, I would ask you to keep
screaming.
Mr. Kennedy. Got it.
Secretary Thompson. And I thank you for your leadership.
And third, when you have a situation where you have a war going
on and bioterrorism and you have the need to make sure you
protect the homeland, put in $4.3 billion there, a 45 percent
increase in there, there was not money left over for some new,
innovative programs in this area.
All I can tell you is I want to work with you, Congressman.
I applaud your leadership and passion on this issue, and I
encourage you, I wouldn't say screaming is the right word, but
I would encourage your leadership and your dedication to do
this.
Mr. Kennedy. Thank you.
Secretary Thompson. We are doing some good things out at
NIH. I want you to know that.
Mr. Kennedy. Good.
Secretary Thompson. We are starting a combination treatment
of mental disorders in adults and the elderly, and this is
going to fund new clinical trials to examine the use of
combination of treatments such as multiple medication,mixtures
of medication, of psychosocial interventions for preventing and
treating mental disorders in adults and the elderly. We need to do more
of that. And if we get some extra dollars, I think this is one area
that we need to address.
The President has told Senator Domenici that he wants to
work with him, and he wants me to be involved in it, and he's
setting up a new Freedom Commission on Mental Health. I am
going to be very active in that, and I hope you are as well.
Mr. Kennedy. I would certainly love to work with you on
that. Obviously I appreciate the work that you are doing, and
think that this is a big, looming challenge for this country
that we had better start addressing, the sooner the better. So
thank you for your comments.
Secretary Thompson. Thank you.
Mr. Regula. Mrs. Pelosi.
Mrs. Pelosi. Thank you very much, Mr. Chairman.
Welcome, Mr. Secretary, Governor, Tommy.
Secretary Thompson. Thank you. Congratulations to your new
leadership.
Health Care Access
Mrs. Pelosi. Thank you very much, Mr. Secretary. And thank
you for your leadership on the ongoing. I was pleased in your
statement that you said of all the issues confronting this
Department, I had the 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 important steps to increase and expand the
number of community health centers, strengthening Medicaid and
ensure patient safety. All noble goals, and of course, expand
the community health centers here, and certainly the other
initiatives you had mentioned are very important.
I am very concerned about the budget, Mr. Secretary,
because I know that you have an appreciation for the challenges
that we have. Wherever these decisions were made, I want to
first of all associate myself with the leadership, the comments
of Mr. Kennedy in terms of parity in mental health. If we do
not go to that place, we are not being very smart as a country.
But then again, we have missed opportunities in terms of
accessibility to quality health care that are bigger than what
this bill is going to do today.
So in light of your comments, I am concerned about some
specific items in the budget that are not in keeping with the
goals stated here about accessibility to health care. For
example, the President's budget freezes ADAP funding. That is
very important to the AIDS Drug Assistance Program. As proposed
in the President's budget, it would result in more States being
forced to reduce services and deny low income uninsured
individuals access to life savings HIV treatment.
Funding for a related item, child care and adult block
grant, funding is frozen in the President's budget. When I say
related, I mean related to the health and well being of the
American people. Funding for the CCDBG is frozen in the
President's budget, and isn't access to quality child care part
of leaving no child behind, as you mentioned in your comments?
The very big concern that I have----
Secretary Thompson. You do not know how hard I had to fight
to get level funding, Congresswoman.
Mrs. Pelosi. Well, I'd like to hear about that, Mr.
Secretary. Because if you had to struggle to keep level
funding, then we have a really big problem in our country in
terms of establishing a priority for our spending. You have to
advise us as to how we can help you, because we have to do
better. This is a very big challenge for families across our
country. I hope that that would be appreciated at the Executive
Branch level.
In terms of strengthening Medicaid, I am very concerned
about the HHS rule issued on November 23rd that reduces from
150 to 100 percent the Medicaid upper payment limit, that
famous UPL. The upper payment limit for public hospitals was
set at a higher reimbursement rate of 150 in recognition of a
special mission in California to provide care and services to
the Medicaid population uninsured individuals.
The reduction of this reimbursement to 100 percent will
cost California safety net hospitals at least $300 million in
Federal Medicaid funds annually, jeopardizing access to vital
health care services for low income populations. We have a very
stringent standard to qualify for funds. I just think that you
either have to characterize California's action as
inappropriate to meet this mission of the uninsured, or isn't
there some way to hold States that have used this money
appropriately harmless for those reductions?
In addition, getting back to the AIDS issue, the
President's budget does not meet the challenge that you and
others have put forth regarding the global AIDS issue. The
President's budget freezes funding for CDC's global AIDS
program. Isn't level funding inconsistent with the stated need
to dramatically upscale U.S. support for global AIDS programs?
The list goes on and on about what is frozen in the budget.
I do not know how much more time I have, I have some other
questions. I also want to just add one publicly, I have others
for the record. And that is about your comment I have from one
of my colleagues, Congresswoman Slaughter, a question relating
to pre-eclampsia, a pregnancy-related condition that impacts
approximately 10 percent of pregnancies, 35 percent of women
with this condition develop serious complications.
This issue just goes to the issue of women's health and I
would just like to raise on the radar the kind of work that NIH
is doing and this neglected women's health issue and put that
on the record.
Secretary Thompson. Could you send me that, so I can
respond to that?
Mrs. Pelosi. I will.
Secretary Thompson. Can I respond to some of the things you
raised?
First, when we get the budget, level funding is not all
that bad. When you look at the situation, we got the last
fiscal year budget in the latter part of December. We were
putting our budget together, and Congress was very generous
with a lot of programs. So if we can continue the level funding
on a lot of these programs, when you have an additional 45
percent increase in bioterrorism, and you have a war going on,
I think in a lot of these areas we should be well satisfied
with that. I know we could use more money, but you have to also
take into consideration the other ramifications.
In regard to the AIDS program, the international AIDS
program, with $500 million the United States is giving, we are
putting in 25 percent of the global dollars. There's only $1.9
billion raised so far. The United States, as one country, has
put in 25 percent. I am serving on that board. And we have had
our first meeting, we are going to have oursecond meeting in
April, we are going to start handing out some of the grant dollars to
some of the countries.
It is a serious problem, and I applaud your leadership on
it. But I think that the United States, as far as the
international globe fund, is doing more than any other country
by far, considering that we have 25 percent.
In regard to the child block grant, this is something that
I believe very strongly in, and I have fought very hard for it.
We had to make some tough decisions in regards to the health
and human services budget, with the amount of money that was
allocated to us. We think that the level funding of it is as
good as we could expect, considering the circumstances.
Funding Level
Mrs. Pelosi. If I may, Mr. Chairman, for 30 seconds,
respond to the distinguished Secretary. The needs have not been
met. When we talk about at the current funding level only 12
percent of eligible children will receive Federal aid care
assistance, so we are not even coming close. We are only at 12
percent. So while you might say that you fought for that, and I
believe you and I admire you and commend you for that, but in
terms of that and these other issues, freezing is not just a
freeze, it is a cutback. Because the needs have grown so much,
if we are talking about HIV-AIDS, domestically and
internationally, when we are talking about people on Medicaid
and the rest, the needs are growing.
Secretary Thompson. Yes, they are.
Mrs. Pelosi. So flat funding is not just to meet the needs
of the same challenge as the year before, but an increased
challenge. We certainly want everyone to manage their money
very well and drain the most out of every dollar that is there.
So if you can assure me that we can do that with that same
amount of money, I would be very impressed.
Secretary Thompson. We are trying to get more of the
dollars out faster and better, and we are trying to get enough
flexibility so the States and local units of government and the
community health centers are able to do their job better.
Mrs. Pelosi. I appreciate that, and my time is up, so I am
going to close by just saying that we as a country are really
not meeting the health and human services needs of our country.
Respectful of our needs and the war on terrorism, as Ranking on
intelligence, I know what those needs are full well. That does
not mean that they should come at the expense of the other part
of the strength of our country, which is the health and well
being and education of the American people.
I applaud your efforts, because I know what your record is.
But I do not applaud the President's budget.
Secretary Thompson. Well, the President is very
compassionate. He has lots of problems and he's dealing with
them, I think in an admirable job. I have the greatest respect
for him. He did not ask to have 9/11 come upon us. Now that it
is here, we have to deal with it. It requires beefing up of
bioterrorism and it means an increase in national defense, and
we all know that and recognize that.
One of the good things that came out of 9/11, if anything,
if you can say anything good came out of it, we have the
chance, Congresswoman, to develop, because of bioterrorism, the
best local-State public health system that we ever had. As you
know and as everybody on this Committee knows, we have not
invested our resources in a local and State public health
system. With the bioterrorism money, we do now have a chance to
really build a strong, visionary, positive local-State public
health system that is going to help meet a lot of the concerns
that you raised in your questions. I am very appreciative of
the Congress giving us the dollars to do that.
Mrs. Pelosi. I appreciate what you are saying. I just want
to add one thing. Because you said that September 11th made a
difference, and it did, and for that reason we should be
revisiting $1.7 trillion tax cuts----
Mr. Regula. Mrs. DeLauro.
Secretary Thompson. You got the last word. Do I get to
respond to that, or does she get the last word? [Laughter.]
Mr. Regula. Mrs. DeLauro.
DIET AND PHYSICAL FITNESS
Mrs. DeLauro. Thank you very much, Mr. Chairman. Welcome,
Mr. Secretary. It is a delight to see you this morning.
Let me just make a couple of observations and then get to
questions. This goes back to something that the Chairman was
saying, and the obesity and physical fitness in kids. In
response to his question, Mr. Secretary, by getting the schools
involved in physical fitness, you indicated that your
Department and the Department of Education should work together
to address the problem. Without any question, and I am a strong
believer in prevention, and I applaud what you said in that
regard.
But I think what we need to do is, there ought to be
communication, certainly, on this issue. Because within the
Administration budget in education, it eliminates the program
that we have to address this issue, the physical education for
progress program, funded at $50 million this year, the
Administration proposes to eliminate the program entirely in
fiscal year 2003. We already had the discussion about the
chronic diseases account at CDC, $57 million cut. And I
understand what you were saying about the advertisement.
But it is important, it is critically important that if we
are going to deal with prevention, then the agencies need to be
talking to one another. Because we can talk about some things,
but when we have programs that are there and the funding is
cut, and eliminated, not even level funded, but eliminated,
then there is a sense of what the priorities are. You can't do
it alone. No one is suggesting that you should. But we have
other agencies and that kind of communication ought to occur.
So I just want to put that on the record.
The other piece with CDC, quite frankly, is that I believe
CDC has the ability to eradicate a lot of illnesses and
diseases. And what we do not do, what we do not do, and our
priorities are not there to provide what resources we do need
in order to address some of the issues and the illnesses that
can be eradicated. I think level funding does have a
repercussion.
Let me give you, level funding, if you take into
consideration what inflation is, inevitably comes down to being
a cut, inevitably it does. I mean, let's go to inflation issues
on Head Start. There's a difference in terms of the calculation
of inflation rates. CBO, is it, I guess 2 percent, or 2 and a
half percent, OMB is at 2 percent. If it happens that we are
going to deal with 2 and a half percent inflation, a Head Start
is going to be less able to do what it needs to do.
I worry particularly about zero to three, because you have
to have the 10 percent threshold on the overall appropriation
to get us to doing anything about zero to three. In that case,
we fall short if we are not dealing withaccurate levels of
inflation in that respect.
I just wanted to throw some of these things out. I mean, I
do not know what you do do, if we deal with the inflation rate
at 2 and a half percent. So that is a question that we want to
ask you to deal with.
On LIHEAP, there are arrearages from prior winters that
people have to deal with. I am just going to mention this one.
LIHEAP always for some reason, we can't see our way clear to
taking care of people in the cold weather. I mean, give me a
break. Excuse me, I am not saying that to you, Mr. Secretary.
Every single year we fight about LIHEAP. You go to any
community, at least in my part of the country, I suspect in
your part of the country, and people are cold.
There have been repercussions from September 11th. Lots of
people are unemployed. Lots of families are in difficulty. And
we sit around here fiddling, fiddling like we are doing on the
Floor today on passing unemployment benefits for people in this
Nation of ours.
So level funding is a cut in funding for most of these
programs.
RESEARCH SAVINGS
My question, does the Federal Government get any
remuneration or recoup any of the research that we--we put a
lot out in research funding. And I am supportive of that. It is
been helpful in saving my life, medical research. But we do a
lot of it, lot of public dollars for that. I won't even go into
the question of how the prices on prescription drugs rise, even
with a lot of Federal dollars. But in terms of our ability, any
kind of mechanism at NIH to recoup the research funding that
goes into the investment of new drugs, how much money does the
Federal Government recoup in that context?
Secretary Thompson. I really do not know.
Mrs. DeLauro. Can somebody take a look at that in your shop
to see if we do? Because we do put a lot of Federal dollars in.
Secretary Thompson. We put a lot in.
Mrs. DeLauro. Which is great, I am there. But I want to
know what we get by way of getting back something that then
allows us to----
Secretary Thompson. Are you talking about money that goes
into a new therapy, a new drug?
Mrs. DeLauro. Well, yes. In other words, we work with lots
of good public-private partnerships. I was involved years ago
when I first came with Bristol Myers on the CRDA for Taxol
because of my interest in ovarian cancer. But we put up a ton
of money. Do we get back anything that allows us to then do
something?
Secretary Thompson. I have been working with Senator Wyden
on that. We had a report done last year, I think it was sent
out in August or September, Congresswoman, and I will send that
over to you.
Mrs. DeLauro. Okay, that would be very, very helpful.
Because it is an area I am particularly----
Secretary Thompson. Senator Wyden is very interested in
this as well.
[The information follows:]
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Mrs. DeLauro. There has been talk about moving Head Start
to the Department of Education. How does that square with----
Secretary Thompson. I have not heard that recently,
Congresswoman. I wish you wouldn't even talk about it.
Mrs. DeLauro. I am glad to hear you say that. Because we
deal with a whole lot of services.
Secretary Thompson. Let's not bring it up.
Mrs. DeLauro. It is a pact. You have got my vote on that
one, Mr. Secretary.
Mr. Regula. I think we need to move on.
SHADOW GOVERNMENT
Mrs. DeLauro. Let me just say, my last question, truly, and
it is not a trick question, it is meant with the best of
motives, because we deal with budgets that are tight. We have
all been reading, and I know the appropriators, this is not
only coming from me, it was in publication today, how many
employees in your Department are part of a shadow government?
Where does the money come from doing that?
Has it been a part of our supplemental appropriation or any
of the appropriations we talked about last year or currently?
Give us some help with understanding where thebucks are coming
from, since we are shortchanged, and what does it mean in terms of the
deployment of your folks.
Secretary Thompson. Very little deployment of my folks. And
I do not know what the costs are. And, to the best of my
knowledge, it does not come out of our budget.
Mrs. DeLauro. So you do not know where the money is coming
from to deal with the folks from your specific department that
are doing this?
Secretary Thompson. Well, the salaries certainly come from
the budget that is approved by Congress, the Department of
Health and Human Services, the employees that are involved in
the shadow government are paid by the appropriation lines that
are in the Department of Health and Human Service budget.
Mr. Regula. I think we have to move on.
Mrs. DeLauro. If you can find out, then, what are the other
costs involved that may impact your budget, and in fact, where
does the money come from to maintain a shadow government, as it
has to do with people that are part of your shop. I am not
asking you the general question. We'll try to get that
elsewhere.
Thank you very much, Mr. Chairman.
Mr. Regula. Mr. Peterson.
I might advise the members that this is a vote on the
previous question regarding the rule, to allow for
consideration of suspensions today. It is likely that the rule
will be done with voice vote. Mr. Peterson.
Mr. Peterson. Mr. Secretary, I'd like to welcome you. I'd
like to thank you for what I think's been an outstanding job of
service in your first year.
Secretary Thompson. Thank you.
Mr. Peterson. To have the job of getting your arms around
your Department is a challenge, I think, for anyone. And then
to have September 11th dumped on top of you and the role you
have had to play, I commend you for how you have kept yourself
together and presented yourself very well.
Secretary Thompson. Thank you so very much, Congressman.
That is very kind of you.
RURAL HEALTH CARE
Mr. Peterson. Well, you have done well. My number one issue
is the availability and quality of rural health care. I am not
going to specific line item any item, because there is a
number. But I want to start that rural health care is
struggling to remain stable. In my view, the need in rural
areas is going to grow. It is the senior population we have,
aging fast. We are still, we have been hit the hardest
economically in rural areas. We are still losing jobs, we are
losing our younger population that balances out that payment
system. There is a number of line items with rural that have
been cut.
I guess I'd like to ask, what is your view of rural health
care's economic stability and what are your thoughts for the
future?
Secretary Thompson. I have many thoughts on it, and I thank
you for the question. Congressman, I applaud you for your
leadership. First off, I think we have to as a Congress take a
look at the wage index and the utilization of the health care
system under Medicare. That is where rural areas are
discriminated against big time. But this is going to require a
bipartisan effort on the strengthening of Medicare and
reevaluation of Medicare as well as an improvement of Medicare.
That is number one.
Number two, I set up a rural health task force. We are
holding hearings across America. We are going to issue a
report. I don't know if it is going to be out in the month of
April or the month of May. We are trying to develop some new
strategies on rural health.
Number three, we are going to be spending a week in Alaska
this year, taking a look at rural health problems in Alaska. I
am taking members of my department up there. We are also going
to be traveling to other rural areas in America, taking a look
at rural health and finding out how we can do it.
Fourth, I come from a rural area. The city I grew up in is
1,500, in a farming community. Living in a farm area is the
type of thing that you know what rural health is all about. And
I want to work with you. But a lot of these things are
legislative, and we are going to have to have the support of
Congress in order to change and make improvements.
Finally, we are going to have to do something in regard to
the reimbursement formulas.
Mr. Peterson. Yes, Medicaid, I call it Medicare Lite. It
doesn't get there.
Secretary Thompson. But it is the legislation, it is the
law.
Mr. Peterson. I know that.
Secretary Thompson. We have to change the law, and I can't
do that as Secretary.
HOME HEALTH CARE
Mr. Peterson. Where are you on the 15 percent cut on home
health that is coming down the pike?
Secretary Thompson. As you know, Congressman Thomas sent us
a letter in regard to provider payments. When I appeared in
front of the Ways and Means Committee, I said, if we are going
to look at one provider payment, we should have them all on the
table and take a look at them. Home health is one of those,
skilled nursing homes is the second one, medical doctor's pay
is the third one. Outpatient expenses is a fourth and
hospitals. And all of these things are under consideration. We
are responding to the letter that Congressman Thomas sent, I
think you received a copy of that. We have been working through
the Centers for Medicaid Service and through HRSA and other
divisions to come up with a response to that letter.
We are going to set out a menu of items for Congressman
Thomas and the Ways and Means Committee to look at. The 15
percent is going to be part of that. But it is actually not a
15 percent reduction. I know that is what is being bannered.
But when you put it in its actual place, the 15 percent was a
cut of the pay that was in place from 1998 until the year 2000.
And the Congress says you have to take a 15 percent reduction
from that pay schedule from 1998 to fiscal year 2000. Then you
postponed it in fiscal year 2000, you postponed it in fiscal
year 2001, and that is where we are right now.
In the meantime, there's been inflationary adjustments. So
when you extrapolate all that, it is more like a 4.9 percent
reduction, the 15 percent turns into a 4.9 percent. But even
that is a reduction, and we are taking a look at that. We have
all these provider payments scheduled, and we have responses
where you might be able to save some dollars in order to
backfill.
The budget also requires us to be budget neutral. So we are
trying to compress all of these things together and make it a
budget neutral package for Congressman Thomas to look at it. As
soon as we release it to Congressman Thomas, I'll be more than
happy to send it to you, Congressman Peterson, soyou'll have a
chance to look at it.
COMMUNITY HEALTH CENTERS
Mr. Peterson. Thank you. I look forward to working with you
on rural issues, because I have the most rural district east of
the Mississippi.
The community health centers, do you have any data on where
they are located? What percentage of those are in rural areas?
Secretary Thompson. Forty-seven percent.
DRUG TREATMENT
Mr. Peterson. Okay. I have never seen that data.
Secretary Thompson. Forty-seven percent.
Mr. Peterson. One more issue, drug treatment. I see you
have had a little bump in there, but I guess in my view, the
drug problem in rural America has never been worse than it is
today. In my district, I have a number of communities with huge
heroin problems with very young people. Heroin is very
difficult to break away from, especially when you are young.
You had a very modest increase for treatment. Do not we have to
somehow figure out how to have treatment for our youth in all
regions of America? Because if we do not get them unhooked,
they are going to be buyers. We have always been heavy on the
enforcement end, moderate on the education end, very light on
the treatment end. In my view that has to be somewhat equal.
Secretary Thompson. Balanced out. It does. You know, I
can't argue with you, I have got to agree with you. The
question is, it is a matter of dollars and priorities. When you
look at the situation facing us in November and December, when
we put together this budget, we had to first take a look at the
war effort. In our area, bioterrorism. We have put a 45 percent
increase in bioterrorism and that was the top priority.
The extra dollars, we stretched them as far and as good as
we could. If we had extra money, treatment is absolutely
vitally important in rural ares as well as urban areas.
Mr. Peterson. Especially our youth. If we do not get our
youth un-addicted, they can be lifetime users. And they won't
live very long.
Secretary Thompson. That is true.
SURGEON GENERAL
Mr. Peterson. We talked a lot about preventive health here
earlier. Who does the Surgeon General come under? Is that an
independent person or is that under you?
Secretary Thompson. It is under the rubric of the
Department. But there are a lot of independent things in the
Department. I am trying to integrate the Department better, but
the Surgeon General is appointed and the Surgeon General is
independent.
PREVENTIVE HEALTH
Mr. Peterson. I guess I remember the days of C. Everett
Koop, I think he played a huge role in public policy in this
country. I know as a State Senator, he goaded me into doing
things, just from listening to him. He inspired me to do
things, chairing the health and welfare committee in
Pennsylvania. And I think he had a huge impact on the
population.
We need to somehow develop a national bully pulpit that
shouldn't cost a lot of money, but people speaking out on the
talk shows, across this country. Because as we have doubled NIH
and are coming up with wonderful solutions to diseases, we have
become a less healthy society because of bad habits, whether it
is no exercise, whether it is eating too much or whether it is
risky behaviors. So the combination thereof, I think we have
actually lost ground while we have increased our investment in
the future. It is just because we need to change public
understanding of health.
Secretary Thompson. Congressman, you are going to get me on
my soap box. Because let's face it, we spend billions of
dollars in America to get people well after they get sick. And
we spend just a small amount of dollars to keep them healthy.
When only 25 percent of the schools have got physical education
programs, I think that is a step backwards. When we take a look
at the population in every one of our States, we are getting
fat. It is an epidemic. Our young people are sitting in their
homes watching TV and not outside exercising. We have to start
eating properly, we have to start looking at nutrition, we have
to look at exercise, we have to look at cleanliness, we have to
look at ways in which we can reduce smoking, and we have to
find ways in which we can moderate our alcohol intake and other
drug intake and hopefully stop it.
You take a look at these situations, you do not need rocket
science to come up with a conclusion, you know, people have got
to start taking care of themselves. We need more messengers out
there, from the President on down. The President is passionate
about this. I had a discussion with him less than two weeks ago
about the fact that he wants to play a very vital role in this.
As we all know, he's well respected all across America.
So we are trying to develop a strategy. We want the new
Surgeon General to go across America and articulate, like C.
Everett Koop did, about healthy behavior. We have put $20
million in here for a demonstration program for healthy cities,
only five cities to set up a demonstration program. Mayor John
Street from Philadelphia asked the people from Philadelphia to
go on a diet last year. I am asking everybody in the Department
of Health and Human Services, including myself, to go on a
diet. I am trying to lose 15 pounds. I want everybody else in
the Department to lose 10 to 15 pounds. I want people to walk
30 minutes a day. And I think if the Department of Health and
Human Services starts walking, maybe we can get this to be
something of a novel situation.
I want Congress to get healthier. I want to get the media
involved. And when you take a look at the situation about the
fact that in America we have 17 million people that are
diabetics 17 million, we spent $100 million. We just had
completed a study out at NIH done by 3,200 individuals. They
found out that if you lost 15 pounds, walked 30 minutes a day,
you would reduce the incidence of diabetes by 58 percent.
Now, you can't extrapolate that into $100 billion, but if
you are able to reduce the incidence of 58 percent, you can say
the next $100 billion you are going to save $58 billion.
I went out to a Native American reservation last year in
South Dakota. I was absolutely saddened by the fact that I saw
Native Americans standing in line to get dialysis on a Saturday
morning, several of them were amputees. That to me, we have to
get the Native American involved in diet and exercise, because
of the high incidence of diabetes in Native Americans. We have
to get African Americans and Hispanics involved also in diet
and exercise. If we can do that, we can use this preventive
health strategy and really do something about the quality of
health.
But it starts with you, it starts with me and it starts
with everybody in this room. We have to start taking care of
ourselves.
Mr. Peterson. As one member of Congress, I will join you.
Any way we can help you----
Secretary Thompson. Walk with me.
Mr. Peterson. I will do it. [Laughter.]
Mr. Peterson. You give me the time.
Secretary Thompson. Okay, sir. You are a great American.
Mr. Miller [assuming chair]. Mr. Secretary, I am
temporarily holding the Chair, but I am going to call on my
colleague from Pennsylvania, Mr. Sherwood.
Secretary Thompson. He is a wonderful guy.
Mr. Sherwood. Well, thank you, Mr. Secretary.
Secretary Thompson. How are the horses?
Mr. Sherwood. The horses are fine. How are the Galway
cattle?
Secretary Thompson. The Galway are doing well.
Mr. Sherwood. There are some of us up here who are thrilled
that you are obviously trying to manage the budget, rather than
just ask for more money.
Secretary Thompson. Thank you.
LIHEAP
Mr. Sherwood. LIHEAP is very important in my area, but we
do have a mild winter. We do have lower prices. It is different
than it was a couple of years ago. There are some of us that
understand that, and we appreciate that you are managing the
problem.
Secretary Thompson. Thank you.
PREVENTIVE HEALTH
Mr. Sherwood. I was out, but I think my colleague may have
covered it. I think we just can't emphasize it enough,
preventive health care. It is what we do to ourselves. And I
think we have a whole generation of young people growing up
that do not understand that. I understand that every second or
third or fourth big soda that a kid drinks a day increases his
or her chance of being obese by 80 percent.
Secretary Thompson. I hadn't heard that figure, but it is a
nice one.
Mr. Sherwood. And in all our high schools, pretty much, we
have given the cola companies exclusive sales contracts. We
trade off high school scoreboards or some other beneficial
thing to let folks sell high sugar beverages in our schools. We
might be very much on the wrong track there. Because type II
diabetes, they are changing the name, as you well know, it is
no longer adult onset. We have just got to hang in there and
work on that one altogether. Anything we can do, please talk to
us.
Secretary Thompson. You came in too late. I had all these
people, I was on a soap box here, extolling the values of
exercise and diet and healthy habits, especially in the area of
diabetes. One hundred billion dollars spent last year on
diabetes, 17 million Americans. It is epidemic.
MEDICARE FORMULA
Mr. Sherwood. Well, we are certainly with you.
The other thing I'd like to discuss just a little bit is
that Medicare doesn't serve all Americans equally. That is a
problem that bothers me. In most of my district, seniors do not
have a Medicare plus choice plan to choose from. Therefore,
they do not have the same rights as seniors in some other parts
of the country that do. And I think we just need to continue to
examine the system.
And I am a budget hawk. But we have to continue to examine
the system that pushes down reimbursement for the most
efficient providers. These rural hospitals have slightly lower
wage rates, slightly less overhead experience than in some
other areas. But they are reimbursed so much less that it is
severely impacting the system. And I am really not sure that
our funding formulas have served us well there. They've started
out with a level and for 20 years, added a percent to
everybody. When you are high, the percent means a lot more than
when you are low. The gap gets greater.
Secretary Thompson. Congressman, I'll give you one
percentage, one figure. The indexing wage and the Medicare
formula amounts to a 71 percent disparity between urban and
rural. So if you are going to change it, it is the wage factor,
the wage indexing amounts to the 71 percent widening of that
gap.
But that is legislative. We can work with you, but it is
going to have to be done by Congress, and you are going to have
to realize that Congress has got to pass a law to change that
formula if you are going to make a difference for rural areas.
PRESCRIPTION DRUGS
In this budget, there are some things that I would like to
quickly point out that I think would be very helpful in rural
areas. One of those, for seniors especially, one of those is
the 90-10 program that we are putting in there for prescription
drugs. That would allow the States to pay up to 100 percent of
their payments, up to 100 percent of poverty, but get the F-
match for that 100 percent. And then from 100 to 150 percent,
and I believe your State has a prescription drug program----
Mr. Sherwood. PACE and PACE Net.
Secretary Thompson [continuing]. It would be very helpful
to your State. Because between 100 and 150 percent, the Federal
Government is going to come in with a 90 percent match. And
that should free up your State and give you an opportunity to
expand your program with less dollars and actually give you
some dollars back.
We also have an $89 billion program in there for health
insurance which has got some new innovations in it that I think
are going to be very helpful in your State and my State and
other States. That is, instead of waiting to get your tax
credit at the end of the year, you have the opportunity under
this program to apply for a number from an IRS office. You
would take that number into your insurance office and be able
to apply up to $1,000, if you are single, and up to $3,000 if
you are married and have children, and be able to apply that on
your insurance premium up to 90 percent of your insurance
premium.
It also gives the states the opportunity to set up pools.
So you could have in your State all the uninsured put together
in a pool. And it should be a very good rate, because a lot of
those uninsured are actually young people that have not got
insurance, and individuals that are working that can't afford
it. So you should have a fairly good rate, and you could
develop pooling. So these are two innovations in this budget
that could be extremely helpful to your State and your rural
areas as it would be across most States across America.
Mr. Sherwood. Well, the 90-10 sounds promising. Because
Pennsylvania has a very good system----
Secretary Thompson. This would be ideal for you.
Mr. Sherwood [continuing].--To buy prescriptions for the
lowest income people. But because of budgetary constraints, it
can't reach up high enough. This would help in that. Because we
know that Medicare beneficiaries often pay the highest prices
for their medication.
Secretary Thompson. Those that are individuals and notinto
a group pay the highest amount.
Mr. Sherwood. That is right. And that is something that we
some time have to address, I think.
Secretary Thompson. But that 90-10 is a great program. We
also set up a model waiver program called Prescription Plus and
Pharmacy Plus. The State of Illinois has just applied for it,
and they are under that program, which is an innovation that we
set up in the Department, working with the State of Illinois by
giving them a waiver that is budget neutral, based upon what
they are going to spend in their Medicaid program. They are
going to be able to extend pharmaceutical coverage to 368,000
Illinoisans.
Mr. Sherwood. Well, thank you very much. It is very obvious
from here your command of the facts and your work, and we
appreciate it very much.
Secretary Thompson. Thank you very much, Congressman.
Mr. Regula [resuming chair]. Mr. Istook.
Mr. Istook. Thank you, Mr. Chairman.
Mr. Secretary, very good to see you.
Secretary Thompson. It is always a pleasure to see you,
sir. How is Oklahoma?
Mr. Istook. Oklahoma is in great shape. I am sure Wisconsin
is as well.
I first want to applaud your support and the budget support
for abstinence education funding. I think we share a concern
that we address, the dire consequences of unwed pregnancies, by
encouraging people not to get in that situation in the first
place lest they fall prey to the elements of disease, of
education problems, economic problems, all those that can
follow.
LIMITED ENGLISH PROFICIENCY
I did want to address two other topic with you, however,
this morning. One of them relates to interaction with the IRS,
and the other to what we have talked about before some, on the
limited English proficiency requirements. Regarding the IRS,
testimony in the Subcommittee I chair recently indicated that
in the earned income tax credit program, about 30 percent of
the taxpayers' money that is paid out under that program, and
30 percent in this case equals $8.5 billion to $10 billion,
that amount of money is being paid to false or fraudulent
claims, currently.
Secretary Thompson. I didn't know that.
Mr. Istook. Yes. There is a brand new, recent survey by the
IRS, the total payout under the program is around $35 billion.
This is the fraud-waste-abuse element of it. It is incredibly
high.
But it turns out, according to the IRS, that a lot of it
traces back to the problems with correctly defining who is a
dependent child of a person claiming the EITC. That is an area
that obviously interfaces with a lot of the mission of HHS.
Various registries I know are maintained. I would not pretend
to know all of them. And there is an effort that is happening
at the highest level with the Treasury Secretary and the
Commissioner of the IRS personally heading it up, trying to see
what we need to change to have the mechanisms to attack this
enormous level of abuse of taxpayers' money.
My question to you therefore, was one, to ask if you
currently have yourself and your Department undertaken a role,
and secondly, if you have not yet, I would encourage you to
initiate contact with Commissioner Rosotti and Secretary O'Neil
and offer the services of HHS in trying to handle this problem.
Secretary Thompson. Congressman, I knew there was fraud
involved, but I did not know it was in the neighborhood of 30
percent, 30 to 35 percent. That is appalling to me. And I would
take your suggestion to heart, and we'll make the contact
relatively quickly.
Mr. Istook. I appreciate that.
Secretary Thompson. And I appreciate the advice.
Mr. Istook. Good. I am sure you can provide a lot of
expertise that will help them in this.
The thing I wanted to visit with regarding limited English
proficiency, and I know that HHS has asked for, has reopened
the comment period.
Secretary Thompson. For 60 days.
Mr. Istook. For 60 days. And I think that 60 days won't
expire until some time in April, I believe. I think you issued
it last month.
Secretary Thompson. I think you are correct.
Mr. Istook. I am glad to know of that reopening. I am
concerned about what's happening in the meantime. For example,
when it was still HCFA, there was a letter that was issued, it
turns out, in some of these things, they are very slow in
coming to light, Mr. Secretary. There was a letter issued in
August of 2000 by HCFA indicating that the cost of providing
translators would be something that could be put into the
matching figures by State entities in Medicaid funds, thereby
taking a lot of the cost of this regulation and putting it
right back on the taxpayers, as well as on the private entities
that are hit.
You may be aware of, and if not, I would certainly urge you
to read the communication from the American Medical Association
to your Department, first questioning even the legal authority
to apply the standards to physicians, questioning the expense
of it, the fact that it just makes it more of a loss for
physicians to treat Medicaid and Medicare patients. I won't try
to read the whole letter here, but I would certainly direct
your attention to that letter from the American Medical
Association which concludes, for example, that access to health
care services would actually decrease rather than increase
because of this additional Federal mandate upon health care
providers.
Secretary Thompson. When is that letter dated?
Mr. Istook. I do not have the date on my excerpt of it. Do
you happen to know the date, Bill? It was during the original
comment period, one of the comments that was submitted. We can
help make sure that the precise document comes to your
attention.
But it also came to light recently that your Office of
Civil Rights, and I do not think there is a handle yet on just
how many orders or agreements have been issued in this area.
For example, there was an order, a voluntary compliance
agreement, I believe it is technically called, with the main
medical center requiring them to post and provide translation
services in nine languages as well as make people aware that
they were to be provided in others, requiring their notices to
be printed in English, Farsi, Kamar, Russian, Serbo-Croatian,
both the cyrillic and Roman alphabets, Somali, Spanish and
Vietnamese, plus inform people that interpreter services are
provided in additional languages as well.
Further, I am told through the Office of Management and
Budget, they are in the middle of trying to do the impact study
that was supposed to have been done originally with this. I
have been informed informally that although they are still
calculating, they are calculating that it has amulti-billion
dollar cost. How much of that falls upon the private sector as opposed
to the public sector, I do not know, and we do not have a final report
from there yet.
I wanted to ask, what steps have you taken? I am not sure
if there is a handle on this problem yet. Do you feel that you
have a handle on what is happening in this area, the cost to
taxpayers, the imposition of costs upon the medical community,
as well as, of course, a lot of other communities?
Secretary Thompson. Congressman, I am not familiar with
that order, I am not familiar with the OMB study. I do know
that the reason that we republished the guidance and the rule
is to get the comments.
Mr. Istook. Of course.
Secretary Thompson. Because we want to get the information
in. We know that there are some problems in it, and the best
way to address those problems is to get the information in and
then act upon it. That is why I requested that this rule be
republished. But I did not know about the American Medical
Society letter, and I did not know about that order.
Mr. Istook. My personal opinion, what I would urge is that
since this whole thing is undergoing a review, that the prudent
course of action would be to suspend any enforcement actions
that are pending under these LEP requirements, while you are
going through the review period. Otherwise it is certainly my
impression that others within your Department are very
aggressively pursuing and trying to lock in people with
compliance, enforcement measures, voluntary agreements under
threat of other action and the like. There seems to be an
element within your agency that is aggressively doing that.
Secretary Thompson. That is why I am trying to integrate
the Department, Congressman. I do not know if people realize--
--
Mr. Istook. It is a challenge that I can appreciate.
Secretary Thompson. I do not know if everybody appreciates
the fact that I have 85,000 workstations for 63,000 employees.
I have got 3,200 servers, over 200 different computer systems,
most of which do not talk to each other. I have got 46
personnel offices when I only need one. I am getting it down to
four. I have got four different bookkeeping systems, one which
only uses single entry bookkeeping. I have 30 year old
software. I have individuals, every division has their own
lawyers, their own public relations outfit, their own
scientists and their own lobbying forum. I am trying to run a
department that you can be proud of and that I can be proud of.
We are making lots of changes, every single day.
But it is not easy.
Mr. Istook. I would encourage you to try to help bring some
stability so that you can manage the change by putting the
brakes on some activities until you can decide what direction
they should in fact be going.
Secretary Thompson. I am trying to.
Mr. Istook. I believe this is one that is about to surface
as a tremendous cost driver, increasing the cost of medical
care, increasing the cost to the----
Secretary Thompson. Thank you. I appreciate your admonition
and advice and I will certainly take it into consideration.
Mr. Istook. Thank you. I appreciate that, Mr. Secretary.
Secretary Thompson. I thank you so much for bringing it up.
Mr. Regula. Mr. Miller.
Mr. Miller. Thank you for staying this late. I appreciate
it.
Secretary Thompson. Well, thank you for staying so late.
NIH BUDGET
Mr. Miller. And thank you for your budget presentation. It
is difficult in times of war and coming out of a recession to
put these budgets together. You make some tough choices. I am
pleased with, for one thing, the NIH budget. You do have to
make some tough choices and we are supportive of you.
Last October, my daughter donated 60 percent of her liver
to our son in New York, in Mount Sinai.
Secretary Thompson. Would you congratulate her and thank
her for me?
Mr. Miller. They are both doing well, and our son is going
to be able to live. You have been an advocate of organ
donation, back in Wisconsin and here.
Secretary Thompson. Passionately.
Mr. Miller. Anything I can do to help, I would be more than
happy to, because I have been personally impacted by that.
Secretary Thompson. Thank you.
NIH LEADERSHIP
Mr. Miller. One thing that concerns me, and I see this
morning a new NIH director may be announced, I do not know,
maybe you have already done it.
Secretary Thompson. It has not been announced, but it is
imminent.
Mr. Miller. But it concerns me about the director of the
CDC, who I have been impressed with. There are six department
heads, or institute heads, out at NIH that are now vacant. We
went over two years without an NIH director, as you know.
What concerns me is that there is a litmus test that keeps
us from drawing and attracting the most outstanding people. I
am sure the gentleman or the person that is going to be
nominated is going to do an outstanding job. And I may be a
minority within my party up here on the Hill, partly because of
my personal experience of our daughter donating to our son,
that I want to have a time in the future that we can grow an
organ in the laboratory. There are advances NIH is making,
leading us in that direction.
But I do not want us to put up these roadblocks, and we
have had a temporary, and a fine person over there at NIH, but
for over two years, you know you do not work as well with an
acting department head. I hope we do not last that long at CDC.
I am concerned this litmus test keeps us from attracting or
finding the quality people that we need in areas that are so
critical, when we are pouring large sums of money in there.
Would you address this litmus test issue, and does it apply to
other than these health issues? Does it get into areas that
have nothing to do with this? Or is it just in the health
related areas, like Surgeon General and such?
ORGAN DONATION
Secretary Thompson. You have raised a couple of questions,
a couple of issues, and I would like to address both of them if
I might, Congressman. First off, on organ donors, first let me
thank you, and would you please express my appreciation to both
your daughter and son. That is a wonderful thing. People do not
realize there are 80,000 Americans waiting for an organ. Only
23,000 are going to be able to receive on this year. A person
dies every 16 minutes waiting for an organ. Can you imagine the
angst that your son would have gone through if he didn't have a
sister that was willing to do that?
I am passionate about this, and now I am trying to get
Hollywood interested, I am trying to get the media interested.
I would like to get everybody involved. There was just a
wonderful young man by the name of Chris Klug who won a medal
at the Olympics who got a liver transplant, 18 months ago. He
probably would have died by now if he would not have had that
transplant. He and I had a television hookup across America. It
was just wonderful to see this individual, especially when he
participated and got a medal at the Olympics. It just made my
heart good to show people that you can do it.
I tell people, God doesn't want your organs in Heaven, He
wants your soul. If your organs had a chance to vote on your
deathbed, I am sure your eyes would vote to continue to see, I
know your heart would vote to continue to beat, and I know your
kidneys and livers would vote to continue to drink Wisconsin
beer and eat Wisconsin cheese. [Laughter.]
Secretary Thompson. I want people to realize that that is
there. In regards to the litmus test, there is not, and I want
to state this, there is not a litmus test. In regards to NIH,
there was a lot of questions raised about it. There's no
question that I was pushing Tony Fauci, a wonderful, eminent
scientist. But the truth of that matter is, Tony wanted to keep
the institute directorship and run the National Institutes of
Health. The White House felt that that was not proper and made
a decision. I discussed it with Tony Fauci, who is a very close
friend of mine and a great scientist. And he recognized that
and understands it.
The White House is going to be making an announcement on an
NIH director and I can assure you, there is no litmus test. As
you know, I am very passionate about stem cell research and
about the need for it. I think the President made the right
decision on August 9th with his decision. We are moving ahead.
We have the stem cell research up. We have 78 stem cell items
now that basic research can be done. I can assure you, there's
no litmus test on that.
In regard to FDA, we just appointed a wonderful guy out
there to be the second in command while they look for the other
one. He is doing an outstanding job, he's a pharmacologist and
a veterinarian. As you know, food safety is one of those items
we have. And Les Crawford is going to be doing an outstanding
job. He is a wonderful scientist and he is doing an excellent
job and he's only been there for a week.
In regard to CDC, Jeff Copeland has done an excellent job.
He is a wonderful scientist, a wonderful individual. He is
leaving the first of April. I want a person at CDC by the first
of April.
In regard to the six, I know the stories make it sound much
worse than it really is, we are interviewing people for the six
directorships at the institutes. Two of them are going to be
filled shortly. And we have offers out on some other ones, so
they are going to be filled very quickly. I think you are going
to like the individual that is going to be nominated for NIH,
and I can assure you, there is no litmus test in the
Department. There is no litmus test in the White House, and we
are proceeding to get the best person possible.
Mr. Miller. It is widely reported in the press that there
is a litmus test.
Secretary Thompson. I understand. I read the same articles.
I just want to hit that right square on the head. There is no
litmus test. We are looking for the best person possible. And I
am pushing very hard to get these done quickly.
Mr. Miller. I am hoping as you are, praying that we do not
need organ donors, we can have, modern medicine will come up
with ways to grow the liver in the laboratory and do that, and
not have to do that. So I hope we do not allow policies to
develop in this country that make us the Luddites or the flat
earth society and England and these other countries are the
ones that move forward. I may be a minority within my party,
our party, but I feel, you know, from a personal standpoint, my
good friend and I may not totally agree on this issue all the
time.
Let me switch to another issue, and one more comment,
because I think the day is long already. Just hold out tight on
earmarks, earmarks at NIH in particular. As we go into the
final conference report, it is going to be very tempting. I
know my colleague, reading articles in the newspaper, that
there's going to be an effort to do more earmarking. Some
agencies in this Government, NOAA for example, is basically all
earmarked, and some others, Energy.
We have resisted that at NIH, and I hope you can continue
to resist that when we get to the final negotiations and
conference report. When it gets to things like biomedical
research and all that, I think we have to be really--it is a
slippery slope. I think you agree with me.
Secretary Thompson. I agree with you, and I follow the
leadership of your wonderful Chairman, I follow his lead on
everything that I possibly can.
Mr. Miller. Thank you. Thank you very much.
HOMELAND SECURITY-HOSPITAL COORDINATION
Mr. Regula. I just have a couple of things, and I know it
is late. So I'll move quickly.
Is there any effort through your agency to coordinate
hospitals? It seems like every community has a hospital and
they sort of do their own thing. With this homeland security,
there ought to maybe be a clearing house to avoid duplication.
All these processes get expensive.
Secretary Thompson. It is hard, but we have now,
Congressman, with this wonderful opportunity to develop a
local-State public health system, to really develop a State
plan. That is why we just didn't send the money out. We want to
be able to have a consistent and a comprehensive plan. So we
sent out the directions on January 31st, 21 days after the
President signed the bill. And we were sending out templates,
now, of what some States, we look at some States as really
doing an exemplary job in communications, in education and so
on. We are taking those templates and sending them out to
States and saying, you should take a look at these.
Now we are going to have these plans resubmitted, or
submitted to us by March 15th through April 15th. We have
several groups set up to monitor them, to look at them and to
advise the States what is best and what should be. And we are
hoping to develop a comprehensive but yet a local and State
public health system. We are also looking at hospitals, what
they need. We have $525 million for, in this budget, to go out
to hospitals. But we want a consistent plan set up so we do not
waste the money. We want to make sure the emergency wards are
going to be well educated, so if somebody comes in with a
strange disease, they know what to do with it.
We are going to have communication set up to all thelocal
and State public health departments through our health alert network,
connected with CDC and NIH and the Department, so we can get
information out across America on any kind of infectious disease or so
on and so forth. We also want to develop a regional capacity in
hospitals for surge capacity in case there is a huge, if there was a
tremendous breakout of anthrax poisoning or smallpox, we would have a
regional hospital that we could make sure that could take care of
thousands of individuals. So we are looking at that kind of a
comprehensive plan, and we are working very hard.
I have got some of the best people, I have got D.A.
Henderson, who is the father of eradication of smallpox, in
charge of this. He is going to be the Assistant Secretary for
Bioterrorism Preparedness. I have got Jerry Hauer, who set up
the bioterrorism program for New York, second in command. I
have got Dr. Michael Asher from California, who's coming out
for 9 to 12 months. He is an expert on laboratories. He is
advising. I have retired Major General Phil Russell, who's
probably the most, one of the foremost experts on vaccines
there. Those four individuals are bringing other scientists in
to advise the State and local on that particular thing.
So it is well set up to do the comprehensive job that you
are expecting us to do.
Mr. Regula. Well, that will be a great legacy for your
Administration to get that done and to get these 200 computers
talking to each other, and the 46 agencies coordinated. You
could go back to Wisconsin with a gold star.
Secretary Thompson. Go back and raise my cattle.
NIH GRANTS
Mr. Regula. There you go.
One other question. NIH. We are meeting on this fifth year,
and I assume you are going to oversight this, that this money
is used carefully. Because sometimes I am observing agencies in
Government that too much money gets dissipated in ways that
perhaps are not productive. Not saying that they can't use it,
but there will be grants in there that will have a life in
there beyond the fifth year that we are doing this increase.
I guess what I am asking, are you planning ahead? We do not
have a commitment to continue this level of funding.
Secretary Thompson. We do not. This year will be the most
grants ever sent out. Seventy-five to 80 percent of the money
goes out in grants. And 35,000 grants this year, there will
probably be about 25 percent of the grants received that will
get funded this year. So we have a lot of grants coming in. We
are going to have a record amount of money going out. And we
are monitoring very closely.
We are also doing something a little bit different. We are
also putting $150 million this year in a new program to send
dollars out for laboratory security and laboratory improvements
at State universities. So this is also going to be part of the
new dollars that we are asking for in NIH. We think that this
is one. And of course, we are also building a new laboratory, a
BSL3 lab on the campus at NIH, and we are building a BSL4 lab
at Fort Detrick. This is the one that handles the most virulent
viruses and we really need that kind of capacity. We have found
that during the anthrax scare that we did not have the
laboratory capacity at CDC or Fort Detrick. With this new
laboratory, we should be able to handle any situation that
comes forth.
Mr. Regula. So that is where some of the new money will go.
Secretary Thompson. That is where some of the new money is
going.
Mr. Regula. But as you make these grants, in your planning
process, you anticipate that they will have a four year life?
Secretary Thompson. Three to five years, usually.
Mr. Regula. Okay. But in any event, we will be budgeting
for that as you construct the 2004 budget.
Secretary Thompson. It is going to require, Congressman,
approximately $2 billion to $2.5 billion to maintain the
ongoing commitment.
HOMELAND SECURITY
Mr. Regula. Last question. You are really homeland
security, your agency. You coordinate with Governor Ridge?
Secretary Thompson. Yes.
Mr. Regula. I have not quite figured out what his portfolio
is.
Secretary Thompson. We usually meet Tuesday and Thursday
mornings in the White House. We have a very good working
relationship.
Mr. Regula. He is really coordinating all the agencies that
have a piece of it, then.
Secretary Thompson. That is correct.
Mr. Regula. We will have questions for the record.
Mr. Regula. We thank you, and you have been very
impressive.
Secretary Thompson. Thank you very much.
Mr. Regula. You have done a great job this morning. We have
had better attendance than we have had this year, it is
evidence that people are interested in what you do and the line
of questioning.
Secretary Thompson. You are a wonderful Chairman and a good
friend, and I thank you.
Mr. Regula. We enjoyed the visit.
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Wednesday, March 20, 2002.
CENTERS FOR MEDICARE & MEDICAID SERVICES
WITNESSES
THOMAS A. SCULLY, ADMINISTRATOR, CENTERS FOR MEDICARE & MEDICAID
SERVICES
KERRY WEEMS, ACTING DEPUTY ASSISTANT FOR BUDGET, DHHS
Mr. Regula. Welcome, Mr. Scully. We're happy to have you.
Your full testimony may be made part of the record and you can
summarize for us.
Mr. Scully. Good morning, Mr. Chairman, Mr. Wicker. Thank
you for having me here today. I'm Tom Scully, Administrator of
the Centers for Medicare & Medicaid Services.
CMS Priorities
I would like to give you a quick overview of some of the
priorities Secretary Thompson and I have for 2003. As always,
we appreciate the support that you have given us this year, and
also the Committee staff which, as always, has been great for
us to work with.
If you count Medicare and the Federal and State parts of
Medicaid together, CMS is the biggest single entity in terms of
spending in the Federal Government with outlays of $542
billion. Between our employees and our contractors, we have
about 65,000 CMS State and local contract employees that run
these programs. It is a big, big organization, a big ship to
turn, and we've been working very hard for the first 10 months
that I've been there to make Medicare and Medicaid much more
user friendly, beneficiary centered programs.
As you know, when I first came in, Secretary Thompson and I
changed the name from HCFA to the Centers for Medicare &
Medicaid Services. We've reorganized the agency around three
simplified centers that we think represent the agency's major
lines of business, and we made a big effort to change the
atmosphere at the agency to make it much more responsive to the
seniors, the Medicaid beneficiaries, and other beneficiaries
that we serve.
The first thing we did was really enhance outreach
education and improve our Medicare & Your education budget.
This included a lot of different things, including an
advertising campaign, which included, as you I'm sure know, $30
million in television and print ads focused on the broader
community; We also focused a portion of that, about $50
million, on the minority community, to basically get seniors to
call 1-800-MEDICARE. And they did that in huge numbers. At the
peak of that campaign we received nearly 60,000 calls on our
highest call volume day. This convinced me of a number of
things, primarily that seniors and disabled have a lot of
questions about the Medicare program that they fundamentally
don't understand. So we're going to keep plugging away on that
very hard.
We also significantly expanded our 1-800-MEDICARE number so
that if you happen to call from Ohio or Florida or Texas, you
get detailed questions answered about your home town and where
you're coming from. If you're in Tupelo, Mississippi and you
call, you will get an operator who can tell you about the
nursing homes in Tupelo and the health plans in Tupelo. We
think it's a significantly improved consumer education tool.
In November, we successfully launched the quality
initiative, which is going to kick off in mid-April. On nursing
homes, as of April 15th, we will publish data on quality
outcomes in six States, one of which is Ohio, Mr. Chairman,
another of which is Florida. Florida, Maryland, Ohio, Rhode
Island, Colorado and Washington, every nursing home in those
States will basically have published in each local newspaper
nine common data points and outcomes for quality for the
largest nursing homes in each newspaper's circulation area. The
nursing homes have been very supportive of it, the unions have
been very supportive of it, and the consumer groups have been
supportive.
This is the first step in a big effort the Secretary and I
have planned to roll out over a number of years in various
areas of the health care sector to give consumers a lot more
information on quality. We both believe that consumers are
starved for much more information on the quality and outcomes
in the health care system.
Third, we are trying to improve response to providers and
beneficiaries. When I came in, Mr. Chairman, I had been in the
health care business for the last several years. I think HCFA-
CMS has done a great job of running these programs, but it was
perceived to be kind of an unassailable fortress from the
outside consumer's point of view. So we created 11 open door
policy forums for each sector of the health care system to come
in and talk to senior staff in the agency and get their nuts
and bolts questions answered whether it's about nursing homes
or hospitals or physicians. We made a big effort to open up the
agency and become much more responsive to the enormous number
of beneficiaries and also health care providers that we serve.
I think we've done a pretty good job on that as well.
Proposed Legislation
We have a lot of different plans coming up as well for
2003. As you know, in the President's budget, the President put
$190 billion in for comprehensive Medicare overhaul. It's a
very high priority for the Administration. A portion of that is
to try to not only reform the Medicare program but also begin
to start covering seniors with prescription drugs. There's $8
billion in our entitlement side of the budget to begin a low-
income drug assistance program, and we'll take immediate steps
to start covering the lowest-income seniors for drugs,
prescription drugs. We're committed to try this year to enact
Medicare reform and a prescription drug benefit.
As part of that Medicare reform, one of our primary
concerns in the existing Medicare program is that the Medicare+
Plus Choice program, which already provides drug benefits to
seniors, has a very well-designed program that helps low-income
seniors get lower co-payments loaded up within the drug benefit
that is basically evaporating. It's a very big concern of the
Administration and we'll try to do the best we can to put money
into the Medicare+ Choice program to at least maintain its
viability. Because it's shrunk pretty significantly the last
couple of years to the great dismay of many Medicare
beneficiaries, especially low income beneficiaries.
Education Campaign
In 2003, we also devoted $122 million to continue the
aggressive Medicare education campaign that we started both on
our 1-800-MEDICARE number and in the ad campaign that I
discussed earlier. On a more CMS focused issue, we have made a
big effort to try to improve the accountability of the agency.
As I mentioned, one of those areas is to improve education, but
another is CMS's own accountability. The President's budget
includes $51 million to modernize CMS's own very archaic CMS
financial and accounting systems. We are spending $256 billion
in Medicare, using both our accounting systems and payment
systems for our 49 contractors that are very antiquated, very
old. We're going to make a significant effort in this budget to
modernize and improve them.
Program Management Budget
Overall, Mr. Chairman, we're asking for a $2.5 billion
administrative budget. That's a 3.2 percent increase overlast
year's appropriation. We think this level will allow us to run the
program efficiently and aggressively in the next year. I think in the
context of our $500 billion plus program, spending $2.5 billion to run
programs of this massive size is, I think, fairly reasonable.
There are two other things that I've talked about in the
past that are not in the President's budget request because
they basically happen separate from that. One, as I mentioned,
the Ways and Means Committee three years ago and the Finance
Committee and the authorizing committees passed significant
reforms in the way that we process Medicare appeals under
Sections 521 and 522 of the Benefits Improvement and Protection
Act. That money has not been appropriated. Mr. Thomas and I
think others in the Senate feel strongly we should do that.
It's not in the President's budget because it just is not
doable under our current structure. That is about $149 million
a year in CMS costs. I'm pretty certain that you're going to
have the authorizing committees ask about that.
Secondly, while the President's budget for 2003 does, in
fact, include a significant amount of money for this education
and advertising campaign, I wasn't around when the budget was
developed for 2002. As you know, Fiscal Year 2001 was funded
basically by putting in a hiring freeze. Although it's not in
the budget for 2002, it is in the budget request for 2003. So
we probably will need to request a reprogramming for 2002 if
we're to do the Medicare advertising campaign this coming fall.
So Mr. Chairman, that's as fast as I can talk. Thank you
for having me this morning, and I'd be happy to answer whatever
questions I can.
[The justification follows:]
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Mr. Regula. Thank you.
Coverage of Oral Cancer Drugs
At one of last year's hearings, we heard about the FDA
approval of the new oral cancer drug called Gleevec. This drug
has a 90 percent success rate. Unfortunately, oral cancer or
any oral drugs, I guess, are not covered by Medicare. There's a
bill in to amend this statute to cover all anti-cancer drugs,
at least. But this may be several years away.
Is there some way we could accelerate the reimbursement
policy to cover these breakthroughs for cancer clients?
Mr. Scully. Mr. Chairman, Gleevec in particular is an
incredible drug for leukemia. In fact, it's a pretty direct
outgrowth of another of your programs, the human genome
project. So I think it's a tremendous drug.
Medicare, by statute, does not cover outpatient drugs. We
are in the process of going through a very narrowly defined
mandate by Congress a couple of years ago to cover more self-
injectable drugs. Basically, Medicare covers nothing that's not
administered in the physician's office or in the hospital.
So any outpatient drug is not covered. There is a lot of
discussion about that. There are a lot of oral drugs out there,
to be honest with you, that if they were covered--especially
things like cancer drugs, Embryol for arthritis--could cost
billions of dollars a year. So we prefer as the Administration
to look at it in the context of Medicare for an overall
prescription drug package. I think virtually any prescription
drug package in reform will cover those drugs.
I think we're trying to look at it in the context of
overall drug coverage. Gleevec is clearly an oral drug that is
not covered by current law.
Mr. Regula. You would contemplate having this as part of
the reform package that you're talking about on drug
reimbursement?
Mr. Scully. All the Medicare drug coverage that's
contemplated basically is all about covering exactly these
drugs, outpatient oral prescription drugs in the Medicare
program. Gleevec happens to be a terrific one. It's also
unbelievably expensive. I think it's probably, $30,000 per
patient per year, something like that. But it has an amazing
cure rate.
Mr. Regula. Thank you. I have a number of other questions,
but we'll go to other Committee members. Mr. Wicker.
Issues Affecting Mississippi
Mr. Wicker. Thank you very much, Mr. Chairman, and thank
you, Mr. Scully, for your testimony and for being with us.
You mentioned outreach and education, you also mentioned
your advertising campaign and prescription drugs. First, a
comment about outreach. I want to thank you for coming to
Mississippi, particularly for coming to Tupelo, Mississippi and
meeting with a group of providers from all across north
Mississippi. I think you speak their language. You were
reassuring to them. I continue to get comments from medical
providers, from doctors, that they were very encouraged. It's
one of the best services that I've provided for them in seven
and a half years.
So thank you for coming in, and even if I didn't understand
everything you were saying, they did, and you made me look
good. [Laughter.]
Prescription Drugs
Mr. Wicker. I appreciate that.
Let me touch first on prescription drugs, and then ask you,
if I have time, about the advertising campaign. Many States, as
you know, are having severe budget problems because of the
explosive growth in the rate of the Medicaid program. The
primary cause of that is the increase in the amount of
reimbursements for prescription drugs. Medicaid costs for
prescription drugs grew nationally by an average of 18.1
percent per year from 1997 to 2000 compared to the overall
national growth rate of Medicaid programs of only 7.7 percent.
In my home State of Mississippi, Medicaid ran out of money
just this month. The average rate of growth has beensimilar to
the national average there. The problem is getting worse. In a recent
annual report by the Mississippi Medicaid office, prescription drug
costs for Medicaid in Mississippi grew by 30 percent between fiscal
year 1999 and fiscal year 2000. They estimate a 25 percent growth rate
for the next fiscal year.
As the Administration considers prescription drug proposals
for the Medicare program, what lessons are you learning from
the States where prescription drug costs are spiraling out of
control? Many States say they are handcuffed by Federal
requirements as they seek solutions to this problem. So if you
would comment on that, I would appreciate it.
Mr. Scully. I think we've learned some things from the
States. There are a lot of States that could learn things from
other States. Since I was in Mississippi I've created a whole
Mississippi task force in the agency, and we're working on a
whole bunch of waivers. I've talked to Rica Payton, your
Medicaid Administrator, a lot.
And I hope we're going to put together a comprehensive
waiver in Medicaid in Mississippi that's going to help
significantly ease the issues in Mississippi. There are so many
issues in Mississippi, as you know. It's hard to resolve all of
them quickly. We have a number of disease prevention ideas.
On the Medicaid side, some of the States, like Florida have
been very creative in trying to constrain the drug costs and
have put together pretty creative and clever ideas about how to
do that. We're going to try to help coach the Mississippi folks
into doing some of those things.
One of them is basically, and it's not particularly popular
in some corners, but a lot of States do not use their ability
to have formularies and to do bulk, group negotiations with the
drug companies to lower prices as well as they do. I don't
think Mississippi has done that as well as they can, and we're
trying to help them put together a better program to make sure
that they cover all the prescription drugs for their Medicaid
population, but do it in a more cost-effective way, with their
negotiating a little more aggressively.
I'm pretty confident that we can help Mississippi quite a
bit. We've been spending a lot of time talking to them, I think
they've been somewhat distracted by their own massive budget
problems. But I think we can help on some of those issues and
we spend an awful lot of time on it.
Beyond just the drug prices, I think I've spent a lot of
time in the Mississippi delta, and we're committed to spending
a lot of time and a lot of money and a lot of effort in
Mississippi, on the overall problem with health care access,
because it's obviously the lowest income State in the country.
Medicare Advertising Campaign
Mr. Wicker. Well, I appreciate that. It just seems like in
flush times, we enjoy the Medicaid match, and it's been good
for the State. But it has certainly turned ugly. When we look
at the percentages of growth in the prescription drug costs,
that's something that we really do need your help with
suggestions. I look forward to speaking with my friend from
Florida to my right, and asking him what their percentage of
growth was in terms of prescription drug costs.
Let me just ask you briefly, Mr. Scully, how did you get
your advertising campaign up and running so quickly? I don't
want to cause strife within the Administration, but later on
this week, or later on this month, when I get a chance, I may
ask another agency why they couldn't have been like their
younger brother, CMS, and gotten their advertising campaign up
and running like you did.
Mr. Scully. I'm not sure.
Mr. Wicker. Well, it sounds like a good success story. How
are you going to measure the effectiveness of your advertising
campaign?
Mr. Scully. We have a contract to conduct an evaluation,
which we'd be happy to share with you on the tail end of the
campaign. The campaign worked pretty well. We got it up and
running pretty quickly because number one, the Secretary was
incredibly supportive from the first day. He even thought the
campaign ads were funny. Not everybody did.
When I came in, I found the data we had for Medicare
beneficiaries were pretty stunning, about their lack of
understanding of just about everything. So our goal was to get
people to call 1-800-MEDICARE. They did in huge numbers, as I
said nearly 60,000 a day, at the peak of the campaign in late
October. That's still running significantly higher than it has
in the past. And I think the 1-800 call centers are much better
staffed and the answers are better.
How did I do it so quickly? Basically because I'm foolishly
aggressive, I guess, and I have a great Secretary to work for
who backs me up on everything. So we got it done in three or
four weeks. But to be honest with you, we probably are not
going to stick with Leslie Nielsen. The evaluation said he was
stunningly, extremely popular. He's very, very popular with
minorities, and the ads did very well. The issue was that a
couple of months later, people tend to remember Leslie Nielsen
more than 1-800 Medicare. So we may change the branding to
something else. [Laughter.]
Mr. Scully. But I think for a first step, in trying to get
people to think out of the box, it worked pretty well.
Mr. Wicker. Thank you.
Mr. Regula. Mr. Miller.
DME Competitive Bidding
Mr. Miller. Mr. Scully, you have one of the more difficult
jobs in this town. But you knew what you got into when you
accepted this position. Mr. Wicker said you visited his
district. Let me invite you to my district.
Actually, your predecessor came down, and it was one of the
best things that happened, they came down and met with the
providers, actually met with beneficiaries, too. I think it's
good to get out of the district. I know it takes time away. But
when you can relate to them, it just calms so many concerns, of
all the different providers that are there. So if ever it works
in your schedule that you get to my area, I've got as many
seniors as anybody in the Nation, if not more, in my district.
So there is a great deal of interest in that. The whole economy
is based on health care for seniors.
I have several questions. On DME, I know in Polk County,
there has been a demonstration project as far as bidding out
DME. What's the status as far as any savings? I don't know how
familiar you are with that particular project. Is that what's
going to happen in the DME area?
Mr. Scully. Very successful. I think we did one in San
Antonio and one in Polk County. The savings were 17 percent in
the first year.
I think there's a lot of potential in doing that, and we're
looking at expanding it. I had a discussion this morning about
this, actually, with my staff. I think competitive bidding on
DME is a great idea. I do think, however, you've got to be
careful, to some degree. That's just my own personal opinion.
We're very aggressive on competitive bidding.
But as a former not-particularly-good antitrust lawyer
earlier in my life, I also think that, for instance, the VA
does a great job of buying supplies. But they're 10 percent
more or less of the market. In a lot of cases, Medicare is the
market, and in a lot of cases in DME we are 80 percent of the
market. I think you've got to be careful how you do competitive
bidding when you're the entire market. And in many cases we
are.
So if you're buying 80 percent of the supplies on the
market, you can pretty much set the prices. So I think the DME
competitive bidding idea is a great idea. I think we've got to
be careful that we throw our 80, 90 percent market share around
in the right places. But I think we can clearly save money.
Mr. Miller. There are a lot of small businesses that are in
this DME business. If you drive them all out of business,
you're right, you create a monopoly, and that's not the intent.
You want to make sure you can maintain a competitive market
place if you go into that.
Mr. Scully. That's precisely my concern. If you walk out
and say, we're going to take the lowest bidder on all
wheelchairs, a big company will undercut everybody else, give
you a low bid and run everybody else out of business. I think
that's certainly something we've got to watch.
NURSING HOME LAWSUITS
Mr. Miller. Let me ask a question about lawsuits and
nursing homes. I sent you a letter last year and you sent me a
response. But what's the status of that now? We read in our
newspapers in Florida about how many nursing homes are in
bankruptcy and the tremendous amount of lawsuits. You see
billboards all over my area for lawyers, come to me and we can
sue the nursing homes.
Now a lot of it's State law, I understand. But it passes
through to the Federal Government through Medicare or Medicaid.
Have you seen anything to show that lawsuits are really hurting
the availability of nursing home care in any of the States,
Florida in particular?
Mr. Scully. Obviously, liability reform is something the
Administration strongly supports in some contexts. I haven't
done any studies on it, but a lot of the nursing home chains
have moved out of Florida or shut down in Florida because of
the high liability rates. I think that's been a problem. A
couple of chains have actually totally pulled out of Florida.
I don't think there's any question liability costs are a
big problem. I hired two young Wall Street analysts who work at
the agency now to try to evaluate, because we're a big
Government contractor, what the rates of return are for what
we're spending in Medicare and Medicaid. We just put one out on
nursing homes, the viability of nursing homes, the
reimbursement level of nursing homes. I think it's pretty
thorough and pretty credible. I'd be happy to send it to you.
I think the nursing home industry is coming back slowly.
But there's no question, in certain States the liability is a
huge issue. In Florida, it's probably the single biggest issue
they have.
MEDICARE CONTRACTING REFORM
Mr. Miller. Yes. I'll be interested in whatever else you
have on that issue, and you did respond to me last fall about
it.
Let me switch to another issue. This would be great, if you
could come to my district and talk to some of my providers. For
example, I was speaking to the medical society in Sarasota last
week. Their biggest complaint is consistency in claims
processing. That's the details that I as a legislator don't get
involved in and you may not see. But there is a great
frustration, a great frustration by the physicians, different
carriers have different standards. They're not following the
same standard.
Now, they can give specific illustrations, and that's what
you might be able to listen to when you come down there. But
they feel the consistency problem is their major concern right
now.
Mr. Scully. I would agree with that generally, although
there are a lot of different ways to do it. As you probably
remember, I used to represent, I think, six hospitals in your
district, so I know a lot of them. I'd be happy to come down.
Basically, we have about 50 contractors in Medicare. As you
know, last December the House passed, I forget the vote, 402 to
10, contractor reform. I hope the Senate is going to act on it
quickly. The goal basically is that we have about 50
contractors and we think we can more efficiently operate with
maybe 20 to 25. They are mainly Blue Cross plans around the
country, but there are some others, such as Mutual of Omaha.
They're split up between Part A and Part B.
We think we could get a lot better consistency and a lot
better contract management if we did two things. One is to
narrow the number of contractors, and second, to change the way
we pay them. Right now we're paying on cost, and they don't
really have a significant financial incentive in the program. A
lot of the ``Big Blues'' like being in Medicare, because it's
good to be in Medicare on the commercial side. But their
financial incentives aren't aligned necessarily with ours. And
we'd like to change their financial incentives, pay them a
little better based on performance and probably slowly, over
five or six years, get the number of contractors down closer to
20 from 50.
There is a lot of inconsistency between parts of the
country. So if you're in a Catholic system or a multi-State
system, you find totally different payment policies in one
State to the next. That's something we're trying to fix.
TREATMENT OF PROSTATE CANCER
Mr. Miller. I have a few more questions on that line. But
let me ask one more question, change the subject again, and
that's about treatment for prostate cancer, the use of
brachytherapy. There are so many different ways to treat it.
It's been in my family, my brother, my father. This is one of
the newer ways of treatment. There is concern about the
reimbursement levels of that treatment. And as an option, it
can be more cost effective than surgery, and it has a lot of,
as I'm sure you are aware of, benefits.
What's the status of that? You have choices available for
treatment, and one of the most famous, most recent ones was the
former mayor of New York. You just kind of have to make your
own choice as a man if you have to have treatment.But then
reimbursement can affect that. So you want to make sure the
reimbursement allows you to keep those choices.
Mr. Scully. I think the reimbursement for brachytherapy is
pretty fair. Brachytherapy is basically a radioactive kind of
pellet. I've been pretty involved in that over the years, and
the controversy about that was, we had an unbelievably
complicated out-patient PPS regulation that was put in place a
couple of years ago. I won't torture you with the details, but
we had an equally complicated way of folding in the drug and
devices. There was a lot of dispute about how that rule was
going to be drafted. It's effective on April 1st.
I think brachytherapy is very fairly reimbursed in there. I
was involved years ago on the hospital side of actually putting
it into the reimbursement system. I haven't run into anybody
yet that thinks they're over-reimbursed. But I'm pretty
confident that brachytherapy treatment is pretty fair. And they
are paid in the pass-through system on the out-patient side. I
think the reimbursement is fair.
Mr. Miller. I'll have some more questions in round two, but
thank you very much, and glad to have you here.
PHYSICIAN REIMBURSEMENT
Mr. Regula. Ms. Granger.
Ms. Granger. Thank you.
Mr. Scully, thank you for being here. And thank you for
being so responsive when I called you, particularly when I
called you at the last minute. I greatly appreciate it, I know
you tried to call me recently.
My question has to do with physicians reimbursement. Of
course, you know, January 1st of this year the payment update
for physician services was cut by 5.4 percent for 2002. I
understand there's another cut coming 2003. I hear phone calls
constantly from physicians. Then when I went home this last
weekend, the front page were all the physicians that are no
longer taking Medicare patients. Then I get all the calls from
the seniors who are very concerned about that.
I think the burden is very real. I've been in the doctors'
offices and I've watched them look at their records. So this
would place an additional hardship on physicians, and I think
really greatly affect the quality of care of seniors, and also
affect the number of physicians who are staying in medicine and
encouraging their family members to go into medicine.
We're considering a legislative solution by the Congress,
but my question would be, since this would take such a long
time, wouldn't it be beneficial for the Centers for Medicare &
Medicaid Services to provide an administrative solution now?
Mr. Scully. The law is incredibly restrictive. I've been
around too long, I guess, but I was very involved in writing it
in 1989 when I was in OMB and the White House. The original
physician pay reform dates back to 1989, and I've been involved
in it since then. The formula has worked pretty well over the
years. I think if you look at nursing homes, hospitals and
various parts of Medicare, since 1989, the most predictable and
reliable payment scheme with the least controversy has been the
physician fee schedule.
In the last couple of years, it's backfired a little bit.
Congress tightened up the formula a little bit in 1999, I think
with the best of intentions. But the formula is a multi-year
recapturing formula. What happened effectively, is for the last
two years--and this isn't a popular way to put it but--we
accidentally overpaid physicians by quite a bit. The targets
for spending in Part B of physicians for the last two years
were a little over 5 percent each year.
And by accident, we didn't understand at the time,
physician payment growth two years in a row was over 11
percent. And some of that payment didn't show up in the
calculations, because we had some new codes and other things
where we basically had approximately $2 billion a year in 2000
and 2001 that was spent that we didn't realize, believe it or
not, that we'd spent in those years.
It's a multi-year recapturing formula by design. So it
happens when we overpaid for a couple of years, the formula
recaptures it. So you automatically get a 5.7 percent
reduction. It's not a reduction in spending. Actual physician
spending this year has gone up about 1 percent and next year it
will go about 5 percent. It's a reduction in the base payment
used to calculate the total payment.
``So, the base payment for an office visit was $38.26 in
2001. This year, in 2002, it's $36.20. But every one of the
other 7,000 codes in the physician system spins off that.''
So it's not a reduction in actual spending. It's a
reduction in the per visit spending. And every physician is
going to see that, and they're angry about it and I understand
that. They don't like hearing the fact that they were
inadvertently overpaid the last couple of years.
So relative to what the formula should have been all along,
they're about where they should have been. But with what they
got paid in the last couple years, they're very angry and I
understand that. I have five physicians in my family, so I hear
about it all the time. And I'm hesitant to go out to the
district, because I have to wear a bullet proof vest.
But we're very sensitive to it. We are working with the
Ways and Means and Finance Committees in Congress to fix it. We
don't think that the fix that MedPac, for instance, suggested,
which is an enormous one, is appropriate. We do think that the
formula has to be fixed. We do think some modest corrections
are appropriate, and we're working to do that. We sent a letter
up from Secretary Thompson and Mitch Daniels, the OMB Director,
the other day, talking about ways to do it and how to finance
it.
I'm pretty confident before the end of the year there will
be some adjustment. I can't tell you it's going to make all the
physicians happy, but we hope it will get the formula back on a
track where it will be back to where it was, which is
defensible and a solid way to keep paying physicians. I think
the basic physician paying formula worked extremely well for
the last 12 years. We just happened to have had a significant
glitch this year.
Ms. Granger. I would ask you then to get out your flak
jacket and your armor and please come to my district, too, and
explain that. Because my doctors aren't exactly happy.
Mr. Scully. Not many doctors are happy in Texas in
particular. Believe it or not, some people in my agency think I
don't ever do any work, I just travel around the country. I
generally, almost every Friday, am in some Congressional
district.
Ms. Granger. I'll put a request in, then, please. Thanks.
HOSPITAL REIMBURSEMENT RATES
Mr. Sherwood [assuming chair]. Welcome. Thank you for
coming to chat with us. If you like to wear Kevlar, come back
to northeastern Pennsylvania.
I commend you for your efforts to try and straighten out
the bureaucracy and run Medicare efficiently. We also have to
run it fairly and as you well know, the hospitals and health
systems in northeastern and north central Pennsylvania have
been encroached upon from New York City and Philadelphia with
higher wage rates. We receive lower in-patient prospective
payments than nearby hospitals, based on their historic
indices.
Our hospitals in the Scranton/Wilkes-Barre/Williamsport
area were very efficiently run, they kept their costs down. And
I think the fact that they've been efficient hurts them.
Because then they don't get their wage rate up. Now the
neighboring regions are stealing all our people. It's very hard
to keep nursing staff and allied health staff.
So the hospitals in the Scranton/Wilkes-Barre and
Williamsport statistical areas can't pay the higher wages
because their Medicare payments reflect the history of lower
wages. It's a catch 22. And I know you've been looking into
that. But I'd like to ask you to educate the Subcommittee a
little bit about how we got in this mess and how we might
resolve it. I'm also interested in, I've never been able to
make a coherent explanation to my Medicare beneficiaries and my
physicians at home, my hospital administrators, because they
just grind me to a pulp, showing me what they receive and what
their neighbors receive. It's a tough situation.
Mr. Scully. It is a tough situation. I'm a native
Pennsylvanian originally, so I'm pretty familiar with that
area. It's probably the number one question I get. It's very
complicated, but essentially about a $100 billion a year pot of
money for hospital in-patient services, that's about what we
spend a year on hospital in-patient services. Based on MSAs,
Metropolitan Statistics Areas, some States still have some
rural areas left. Every MSA in the country has its own rate.
It's based on your historical wages.
So hypothetically, if you had a $10,000 hip replacement,
the national average is a wage index of one, in New York City,
I can't remember the exact wage index, it might be 1.3 in New
York City, so you get paid $13,000 for hip replacement in New
York City. In rural Pennsylvania the wage index might be .78,
so you get paid $7,800.
That varies like that all across the country based on your
historical wages. So it is a bit of a catch 22. So what
happens, if you have low wages, you tend to spiral into that
low-wage category. I haven't found a better or easier way to do
it, because costs in health care do vary around the country.
The Secretary and I are talking about next year's hospital
rule, which comes out next January, about some modest ways to
change it. But it's a finite pot of $100 billion, and it's
budget neutral.
So any time you take a little money and shift it from an
urban area to rurals or other things, nobody's ever happy.
There's no easy way to take care of it. I think the problem you
have, which has happened in a couple of places, is that
legislatively over the years, Philadelphia has been expanded to
the north, so that almost every county north of Philadelphia,
and Scranton/Wilkes-Barre is probably an hour, over an hour
drive, is now in the Philadelphia wage index, either by
legislation or other creativity. And New York, amazingly, it's
about probably an hour and a half west, New York City has now
expanded out to Newburgh, New York and other places.
So Scranton/Wilkes-Barre is surrounded by people with New
York City and Philadelphia wage indices, even though they're
also rural. I think your area has about a .8 wage index. So a
hip replacement just north may be $12,000 and just south may
get $12,000, and in Scranton, you get $8,000, and you clearly
have a problem recruiting nurses and health care folks. So the
question is, should you then take Scranton/Wilkes-Barre and
legislatively make them look like Philadelphia, too? I'm not
sure that I've found an easy way to fix it. But there's no
question you have a problem in Scranton/Wilkes-Barre.
But the way the law is written, it's got to be fixed, as
you know, legislatively. And there are probably a hundred of
these before the Ways and Means and Finance Committee every
year. Usually the committees fix a couple of the most
egregious. I think I committed to your hospital administrators,
when we met a few weeks ago, to send a staff person up there to
do a little more research on the merits of Scranton/Wilkes-
Barre.
WAGE RATES
Mr. Sherwood. If you had sort of the highest wage rate in
the country and a .8 one, and they were stepped down as you
move, we could understand it. But we butt right up against.
Mr. Scully. Well, they used to be. Unfortunately----
Mr. Sherwood. But they're not any more.
Mr. Scully. I agree.
MEDICARE+CHOICE PLAN DEPARTURES
Mr. Sherwood. So it's very hard for me to defend my
position that I represent those people fairly, when their
neighbors right next door get paid so much more money. Of
course, that means the nurses go there, the health
professionals go there. It makes it very hard, then, to run the
quality of care that we'd like to do. So that's an issue that I
think we have to solve.
The other thing that I'd like to go over a little bit, and
then maybe I can come back to something else, but
Medicare+Choice is the other example. Because of the rates, the
Medicare+Choice people decided not to play in my area. So while
it would seem that health care, all Medicare beneficiaries
across the country should have roughly the same privileges and
options, we have several areas in the country where there is no
Medicare+Choice.
And again, that's a basic unfairness that I think we've got
to address. It has the same kind of root problems. I worked
real hard two years ago to try and get the law changed on it,
and it was changed a little bit and it helped some areas of the
country but it didn't help mine. The people still shut down.
That's real hard to go home and explain to your
constituents that think they're equal to somebody in another
part of the country, and that I ought to be able to fix it.
Mr. Scully. That's a very difficult problem all across the
country. Unfortunately, the fixes in Medicare+Choice, to some
degree, backfired. That may not be good news to you. But what
happened in Medicare+Choice is the rates were set for years
based on fee for service. In your district, a lot of your
district, there's relatively low fee-for-service traditional
Medicare costs. So the rates were relatively low, and there
wasn't any managed care. A lot of members from rural areas in
1997 felt strongly that the program was on cruise control in
New York and Philadelphia and Miami and probably Louisville,
and that we ought to takesome of that money in the high rate
urban areas and push it down to the rural areas, which conceptually is
a very good idea.
Unfortunately what's happened is for the last five years
we've had a 2 percent cap in most of the urban areas on
Medicare+Choice and the money was pushed down into the rural
areas, thinking that people would show up, and they didn't. So
the plans just haven't been providing in the rural areas,
because it's very difficult in a town with one hospital to put
together a managed care network.
So basically the money was put out in the rural areas.
Actually there's about $2 billion a year that's theoretically
out there to be spent in rural areas in Medicare+Choice and it
didn't happen. I think that was done with the best of
intentions. Unfortunately what it did was to starve the areas
where the program was doing well.
So in Philadelphia, Pittsburgh, New York, Louisville where
the program had been doing great and was growing, you had 2
percent capital and cost increases to fund the rural side, and
11, 12 percent a year increases in spending. Very predictably,
in the last five years what's happened is, in the areas where
it had been successful, co-payments went up, deductibles went
up, drug coverage went down. Plans have been getting out. We've
lost 2 million seniors in the program. It's gone from about 18
percent of the program to about 12 percent of the program.
Basically in an attempt to fund the rural areas, which
hasn't worked, we've starved the urban areas and the program is
melting down. The President put some money back in his budget
this year. Program spending in Medicare+Choice has gone from
$43.0 billion a year to $42.6 billion a year in the last two
years, which just shows that people are dropping out. The
people that are staying in, the plans are staying in by their
fingernails, the seniors who are staying in all across the
country are extremely angry. I was in Phil English's district
on Friday talking about this issue.
Basically the thing that bothers me about it is, especially
for low-income seniors, it's a lower cost option than the
traditional program plus Medigap that a lot of seniors like and
saves them money. It's increasingly more costly, less
attractive, and we get a lot of angry seniors and its a far
less attractive program than it used to be. A lot of it really
was done with the best intention of trying to fund it in rural
areas, but the people didn't show up. The health plans just
flat out decided not to participate in rural areas. I'm not
sure there's an answer to that, but unfortunately we've largely
killed the program in urban areas at the same time.
Mr. Sherwood. Well, but see, you killed it in my rural
area, too, because we had it, but it went away. It's not that
we're trying to develop one that we never had. We had competing
providers. But in this last go-round, they just decided to pull
out of the market.
Mr. Scully. I think it's public knowledge, I was on the
Board of Oxford Health Plans for eight years, while I was out
of the Government, which is the largest HMO in New York City
and was one of the largest Medicare+Choice plans in the
country, and I watched it happen. The finances just don't work.
The President put $3.2 billion in the budget to increase
funding this year for it, and we hope very much it will be
included in whatever Medicare bill we have.
RURAL REIMBURSEMENT RATES
Mr. Sherwood. But when you said you starved the urban areas
to try and make it work in the rural areas, that money in the
rural areas didn't end up getting spent, right, because nobody
would play.
Mr. Scully. The plans didn't want to play.
Mr. Sherwood. So therefore the money wasn't spent.
Mr. Scully. If you look at it the way the Balanced Budget
Act does, the money disappears. But when you look at the 1997
Balanced Budget Act, when they put a blended rate in,
theoretically to fund the rurals higher, the money is sitting
out there waiting for people theoretically to show up in urban
areas. And they haven't because it's hard to put together a
network.
One of the major complaints about Medicare's managed care
system is that there's one PPO in the country. In Medicare, the
traditional Medicare program where you have basically a closed
panel HMO, doesn't exist in most rural areas, and what most
people under 65 prefer in health care these days are point of
service plans or preferred provider networks. Very difficult to
do that in Medicare. So the kinds of hybrid plans that are
popular for non-seniors don't exist in Medicare, and we're
doing some demos to try and do that.
But trying to put together a closed panel HMO in Scranton
and Wilkes-Barre would be tough. But in more rural counties,
it's virtually impossible. The health plans just don't want to
do it.
MANAGED CARE OPTION
Mr. Sherwood. But if you listen to the rhetoric on the
floor here in Washington, you'd think that managed care doesn't
work. But if you want to talk to an angry senior, you want to
talk to somebody who was in a plan that did work and then
hadn't canceled. They really get upset about that.
Mr. Scully. I would agree. I think four or five years ago,
the perception was that the program was exploding and it was
very popular and it was a great way for seniors to get a drug
benefit and trade off a slightly together network of providers
in exchange for a drug benefit and avoid buying highly-
expensive Medigap insurance. But it's quickly disappearing.
PRESCRIPTION DRUG BENEFIT
Mr. Sherwood. Mrs. Northup.
Mrs. Northup. Thank you.
I'm interested in asking you about some of the prescription
drug benefits that are available to seniors. We all know that
private plans cover prescription drug benefits. We are eager to
see Medicare be modernized so it reflects sort of the same mix
of benefits. I think the seniors in my district feel strongly
about that.
Since it's been hard to build a consensus for what Medicare
overhaul might look like in a way that's both solvent over the
long term and provides a modern health benefit, in the
meantime, the question about prescription drugs, if you're a
senior that needs expensive prescription drugs, is a problem.
I wondered, Kentucky does not have a State plan. But I
wondered if you could tell me, do you all have a partnership
with State plans? Have those been successful? I know that we'll
be working with your office or that Congress will to develop an
overall plan. And I just wondered, will those be built on top
of the State plans. Will they take the place of State plans?
Mr. Scully. Some of the States have done a great job, asI
mentioned earlier, and some have not done much. I'm not as familiar
with Kentucky, but for instance, in Illinois----
Mrs. Northup. We don't have one, I don't think.
Mr. Scully. We invited the State to come in and work with
us. In Illinois, we put together a very aggressive Pharmacy
Plus waiver, which we're trying to use as a template for other
States. It's something the Secretary feels very strongly about.
Essentially in Illinois, we allowed them to come in for a drug
waiver and they cover all seniors now, to 200 percent of
poverty, which was 368,000 additional seniors that were just
picked up in Illinois.
Essentially the argument they made to us, which we
accepted, was that modest-income and low-income seniors were
spending down their assets so quickly to get into Medicaid,
either to get into the nursing home or to get Medicaid drug
coverage at lower incomes, that we'd be better off basically
expanding, as would the State. Eventually we'd end up spending
the same amount of money just by covering more people.
So essentially what Illinois has come up with is a budget
neutral multi-year waiver that says that we will pay for all
Medicare beneficiaries for drugs up to 200 percent of poverty,
which is a lot. We're trying to encourage other States to do
the same thing. Now, the State obviously has to pay its share.
It's a matching program.
But we would welcome any State that wants to come in. We're
very aggressively pushing the Pharmacy Plus template and trying
to find a way. The President proposed a lot of money for a
prescription drug benefit right off the bat this year, as you
know, in a 90-10 match for the States for an enhanced drug
program. But that takes legislation.
In the meantime, we're encouraging States to come in and
work in any way we can. We've covered a lot of people in New
York for a variety of benefits, covered Illinois with a massive
expansion for prescription drugs. We'd love to get the
prescription and Medicare reform legislation enacted this year,
and we're determined to get started. But in the meantime, we're
trying to work as aggressively as we can with any State to get
them to come in and expand the drug coverage for seniors.
PRESCRIPTION DRUG WAIVERS
Mrs. Northup. If a State develops a plan, will that be out
of date, do you see, when we pass a national plan? Or do you
see a national plan building upon what the States have already
done?
Mr. Scully. I think most States, if we had a national plan,
would be happy. Because most of the States that have an
expansive plan now, like Pennsylvania has the PACE program,
Illinois has a big program now, essentially it's still somewhat
Federally matched, State matched dollars. A new Medicare drug
program will probably be all Federal dollars, so you'll be
basically buying out the base of whatever the States have done.
TRANSITIONAL LOW-INCOME DRUG ASSISTANCE
Mrs. Northup. Actually, I was in a meeting and more and
more the sentiment, I think, is not to buy out. In other words,
if all we do is take what States are currently doing now and
take over the responsibility, we're spending a lot of Federal
dollars without anybody that's on the front line needing
services getting any difference in service. So one of the
proposals was to marry Federal dollars with State programs that
exist, so that you get an improved benefit, cover more seniors,
but don't lose the dollars that are already going in that
direction.
Mr. Scully. Well, that's clearly what the President's
immediate action in the budget was. We put a significant amount
of money, $8 billion for the next three years, to give the
States, if they wanted to cover up to 150 percent poverty, to
do it with a 90 percent Federal match, which is a significantly
enhanced match, to get the States incentivized to start
spending money on the lowest-income people, seniors, for a drug
benefit now. They can do it through their Medicaid program,
passed by the Senate last week. West Virginia has a Mountaineer
program that has kind of a drug discount card. They could fund
that.
We think that we need to get started on covering
prescription drugs and the lowest-income people first, and the
President has put a lot of money in his budget to try and kick
that off. So we're extremely interested in trying to get
something done this year in that area.
Mrs. Northup. Do I have a few more minutes, Mr. Chairman?
Oh.
Mr. Sherwood. Pennsylvania intended to use that money to
raise their income level. They have a very good PACE plan that
goes up to 110 percent of poverty. They were going to put that
in to run it up higher.
Mrs. DeLauro.
PRESCRIPTION DRUG BENEFIT
Mrs. DeLauro. Thank you very much.
Just in listening to the discussion, a couple of things. On
the prescription drug issue, how much in the budget is set
aside for a prescription drug benefit?
Mr. Scully. The President proposed $190 billion over 10
years for Medicare reform, and depending on how you----
Mrs. DeLauro. That's what I wanted to ask you. What is
encompassed in that $190 billion? What are the parts of that?
What's prescription drugs, what's Medicare reform, what do you
mean by Medicare reform?
Mr. Scully. Well, you probably can save money through some
Medicare reform. For example, the vast bulk of seniors that
have Medigap insurance have first dollar coverage in Medigap.
So once they write their check to Blue Cross in Connecticut or
whomever for their Medigap plan, they have no co-payments, no
deductibles and very little incentive to contain costs.
So one of the things in Medicare reform, outside of trying
to reform the structure, is to get seniors who are not poor to
be a little more cost sensitive in purchasing the drugs. I
think the vast bulk of the $190 billion is for the cost of
financing prescription drugs. I don't know the exact number.
Mrs. DeLauro. So there are no other issues pertaining to
Medicare or other health related things with regard to seniors
that comes out of that $190 billion? You know what I would love
to have you do for me, is to chart out that $190 billion, and
if you could let me--I just want to see if it's a
misunderstanding, is that there is only really about 6 percent
of seniors who are going to get covered for prescription drugs
under the current budget proposal.
Mr. Scully. That's the $8 billion of low-income assistance
that we think we should do right away this year.
Mrs. DeLauro. What's low income?
Mr. Scully. It's up to 150 percent of poverty.
Mrs. DeLauro. What's the dollar amount on that?
Mr. Scully. Eight billion dollars over three years.
Mrs. DeLauro. No, the individual.
Mr. Scully. One hundred fifty percent of poverty.
Mrs. DeLauro. Who's covered? I just want to get some sense
of who's getting covered.
Mr. Scully. I think 150 percent of poverty for a family of
three is probably about $17,000. It's clearly low. But most of
those people have nothing now. Most States, there are still, I
think, 32 States that don't even cover, because it's a Medicaid
option, that don't even cover up to 100 percent of poverty.
Most of the States are between 90 and 100 percent of
poverty. I think there's 18 States up to 100 percent of
poverty, and we're trying to encourage them as a first step to
immediately, this year, do that. The main Medicare reform
bills, whether it's Senator Graham's in the Senate or whether
it was Congressman Thomas' over here, almost all those don't
kick in for three years. What the President tried to do in the
budget is say, we want to have a serious debate about Medicare
drug coverage, but none of the bills kick in until 2005, and we
should cover the poorest people immediately, and we're trying
to do that through the States.
Mrs. DeLauro. If you can get me what the dollar amount is,
is there any money in that $190 billion that does go to the
States for anything that they and I have to do with this, other
than it going, being a direct benefit to seniors in terms of
their prescription drug coverage?
Mr. Scully. The $8 billion----
COST OF PRESCRIPTION DRUG BENEFIT
Mrs. DeLauro. What I'm trying to find out literally is what
of that money is going to go for prescription drug coverage. I
don't know about any of my other colleagues, but it clearly is
the single biggest issue that I hear about. I've been doing
something called office hours for 12 years. I go to a large
grocery store, a Wal-Mart or Stop and Shop, etc., every
Saturday morning. The issue of health care in the 12 years I've
served in the Congress has come up every single time in various
incarnations.
People who were uninsured at the outset, that's coming back
again. People who have had insurance but then couldn't get
access to what they needed, the whole HMO question, and
prescription drugs. So it's health, health, over and over
again. Now the particular emphasis is on prescription drugs.
So that again, correct me if I'm wrong, I thought that
there was an original Administration amount for $300 billion or
somewhere, that number which has now come down to $190 billion.
Mr. Scully. There are a million issues there. The bills
that passed the House last year were, I think, $156 billion.
The budget resolution in the Senate last year was $300 billion,
the House just passed a budget resolution with $350 billion,
the Senate I think is debating one today for $500 billion. The
President has basically said, we want to work with Congress to
get something on prescription drugs.
We proposed $190 billion, the bulk of which is for
prescription drugs. Eight billion dollars is an immediate grant
to the States. They can either do it through Medicaid or
through some other function they have, like the PACE program,
that may not be Medicaid, to immediately spend $8 billion over
three years to get people up to 150 percent of poverty.
The rest of it is a longer-term package, and whether it's
$190 billion or $300 billion, the President has said repeatedly
we're happy to talk about it. During my first job in the first
Bush Administration, when I was trying to save catastrophic,
which was a bipartisan effort, a drug benefit passed in 1988.
It was repealed before it actually kicked in in 1989, and----
Mrs. DeLauro. If you would, I wasn't here at the time, but
I certainly read the articles about that. One of the particular
reasons why it failed, at least as I understood it, is that in
fact it was a small percentage of seniors who were covered. The
bulk of seniors, and by no stretch of the imagination, someone,
if it's $19,000, is someone who is affluent, people who are
making $19,000, or $20,000 or whatever it is, are in tough
straits here for prescription drug coverage.
But the reason why it failed, in my estimation, was that we
didn't have the coverage of everyone. It looks like to me that
we're going down the same road on this, that we're just going
to parcel out this to a small percentage of people.
Mr. Scully. There was a bipartisan effort to avoid repeal
of catastrophic health insurance with the Administration years
back and Chairman Rostenkowski and others, and the AARP,
believe it or not, supported catastrophic very aggressively. I
don't think it was discussed enough before it was passed, nor
was it before it was repealed. I may be the only person in
America who will still tell you, it was extremely good health
care policy.
COST OF PRESCRIPTION DRUGS
Mrs. DeLauro. I'm not debating that. Except that what
happened was, and I would just say with regard to this that I
think in terms of lowering the costs of drugs overall, when you
have volume, which is what we all understand, when you have
people buying in quantity and great volume, then in fact what
you have is you begin to see those costs come down.
It's true, and when we give the opportunity to our HMOs, to
the institutional folks, we give them the opportunity to buy at
a lower rate, if we were to give all seniors the opportunity to
buy at a lower rate, I believe what we would do is see the cost
of prescription drugs come down tremendously.
Final question, because my time is over, what efforts are
you making with the drug companies themselves? Everywhere we
go, whether it's hospitals, whether it's HMOs, no matter what
the carriers are, the biggest increase in inflation has been
around the cost of prescription drugs. What kind of efforts are
you making with the pharmaceutical companies to come to
something that they can potentially look at in lowering the
rates of their prescription drugs for people in the United
States, because they do it overseas?
Mr. Scully. You hit on a topic I've spent a lot of time on.
We don't cover prescription drugs in Medicare right now, we
only cover in-patient hospital drugs. We think the
Administrations plan is a first step. It's not the solution,
but I couldn't agree with you more. I represent 40 million
people in the Medicare program, and they all walk into the drug
store and buy in groups of one, which is crazy. As I mentioned,
I used to be on the board of Oxford, and I know how PBMs work.
We bought in groups of two and a half million in New York City
and we got big discounts.
The President proposed, and it was the agency's idea, and
the Secretary was very aggressively behind it, as a first step,
a Medicare prescription discount card so we could start to
organize those 40 million people into big purchasing pools.We
have a debate about how you subsidize seniors additionally with a drug
benefit. But a first step right away, we believe, is getting those 40
million people organized, like they do in the commercial sector. Most
folks under 65 are organized by the insurance company in a purchasing
pool to get significant drug discounts.
That's what our drug discount card was all about as a first
step. Obviously, we've been sued and haven't been able to
implement it yet, but we wanted it last fall. We think it will
save 15 percent on drugs.
That's not going to make seniors happy. But it is going to
get them initial discounts. Then we can have a healthy
discussion, I hope, in Congress, about how to turn it into a
real insurance program where they're paying $15 co-payments
like we pay. But as a matter of course right now, the only
people in the country that pay full prices walking into a drug
store for over-the-counter drugs are the uninsured and seniors.
We think that's not too smart. So we believe we ought to get
started trying to group our 40 million seniors into purchasing
cooperatives.
We're happy the drug companies are out there proposing
their own discount cards. We think that's fine. But our view is
the best way to get the drug companies to drop their prices is
not to call and say, pretty please, what would you like to
charge us? We need to organize our 40 million seniors in this
significant market power, to go out and get better prices.
VOLUME DISCOUNTS FOR PRESCRIPTION DRUGS
Mrs. DeLauro. I would just only say to you, I think we
could move at a much quicker rate if we were willing to take
the cooperative that we have now, or the pool that we have,
which are Medicare seniors all over the country, millions of
people. You get that kind of volume buying at a reduced rate,
you will see how fast those drug prices would come down.
It would just seem to me that we have already the mechanism
under Medicare to put a new part C, whatever the alphabet is on
it, to put that in, deal with it on a co-pay basis. Nobody's
asking for a free handout. We could cover all seniors, we could
do something first rate for the seniors in the country and give
them a little security in these older years.
Mr. Scully. I think the concern we have, and this is a
philosophical one, we want to get a drug benefit done, this is
one of the big issues that's held it up, is that if you took
off 40 million seniors and just had me go out and do what I do
for hospitals and physicians. I could just go out and set
prices, but it becomes a very politicized system, and we don't
believe that's going to work very well. We would rather have
our seniors in, let's say if you're in Connecticut in four or
five private PBMs, which is what the private insurance
companies do, and have them negotiate in bulk for flexible
market rates, rather than having the Government try to go out
in a very politicized system and set rates for drugs, which we
don't think will work.
We clearly want to get this done.
Mrs. DeLauro. No one's asking to set rates for drugs.
That's a very good argument that the pharmaceutical companies
make all the time. That's not true. What we want them to do is
make prescription drugs, for which we put in a heck of a lot
of, this Committee does, a heck of a lot of public dollars for
research for them to produce their drugs, we get it to the
market and we find in fact there are all kinds of people who
are priced out of the market and they can't afford them. That's
wrong. That's not what our obligation is in this Committee or
in this Congress or as public officials.
Mr. Scully. I totally agree with you. I've spent a lot of
time on this in the last 15 years. I was very involved in
creating Medicaid drug rebates. I don't get invited to too many
Christmas parties at the drug companies.
Mrs. DeLauro. I don't get invited, and they're all in my
district. [Laughter.]
Mr. Scully. But I also think we need to make sure we don't
blow off the Medicare program when we cover drugs.
Mr. Sherwood. What I think we do know is what you said,
that the people that pay full price are the people that walk in
one by one. And I think your estimate of 15 percent lower is
very modest. If we could organize this, like you intended to
with the card, I think you'd see lots of costs drop far more
than 15 percent. Because we know that purchasing power works.
So I think that's a great idea and it's a great first step.
The fact that in Pennsylvania, PACE Net works very well, and if
we could put some Federal dollars with it, what we would do is
increase the amount of people it covers by raising the
percentage of poverty. That would be a great thing.
MEDICARE CONTRACTOR OVERSIGHT
I'd like one little follow-up. You have a 9.2 percent
increase for Medicare operations to cover the costs of Medicare
contractors. Can you describe to me briefly the process of
contractor selection and what oversight you exert over
contractor charges? In other words, I'm afraid that I'm going
to find that contractors are paid on cost, rather than bidding
services. If they're paid on cost, then you've got to have some
oversight of costs.
Because any time I've ever seen a system that you're paid
on cost, when the telephone companies and the utilities were
paid on the cost of doing business with a guaranteed profit,
they bought equipment they didn't need, because it raised
their--I'd like to see how that works here.
Mr. Scully. I agree with you, and I think probably the Blue
Cross plans are the primary contractors here. By tradition,
we'd probably agree with you. We've made a lot of changes, the
Secretary has been driving most of them, and I'm totally
supportive of all of them. Part of this is contractor reform.
We have statutorily paid Medicare contractors on cost. It
hasn't been a particularly great business. In all candor, I
think most of the plans are in the Medicare program because the
systems are similar and they can kind of cross-subsidize. But
generally it's not a good business. I don't think any Medicare
contractor is making very much money. They're generally in it
for cross-subsidizing systems and buildings and other things. I
don't think most of them think they're appropriately
incentivized.
And some of them have been dropping out because it's not a
great business, especially some of the Blues, for instance,
have been going ``for profit''. They're not doing very well on
cost contracts, so they've either beenspinning those off or
they've been dropping out.
That's a problem in the long term for the Medicare program.
We think we want to keep the better contractors in. So one of
the things we'd like to do is get away from costs, actually,
and pay them on performance. It may actually cost a little
more. But we think we'll get better contract performance reform
out of it.
But I would argue that considering, for instance, the
Medicare program is $255 billion this budget year and the Blue
Cross plans that basically run it, and Mutual of Omaha has some
contracts, and some others, I think it's about $1.7 billion in
the Medicare contractor budget. The amount that we actually
spend administering $255 billion of benefits is stunningly
small.
I think to be honest with you, I think if we incentivize
the contractors better, some of them have looked at it as a
long-term good business to be in, and we're encouraging some
consolidation. But it's a tough business and I don't think any
of the insurance companies are making any money on it. I think
it's just a core business they've been in for years. I see very
few people looking at this as a great future business
opportunity. I think to some degree we'd be better off if they
looked at it that way.
Mr. Sherwood. Well, I think we have an idea at home that
will save you $7 million. We'd be glad to talk about it.
Mr. Scully. I'd be happy to help you out on that.
Mr. Sherwood. Thank you very much. I think we're getting
low on people, so I think we have another panel. We'd be glad
to hear anything other you have to offer. But I think we're out
of questions.
Mr. Scully. Thank you. You've all been terrific to work
with, as has your staff, and I appreciate it. Thanks for all
your support this year.
Mr. Sherwood. Thank you.
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Wednesday, March 20, 2002.
ADMINISTRATION FOR CHILDREN AND FAMILIES
WITNESSES
WADE F. HORN, ASSISTANT SECRETARY
KERRY WEEMS, ACTING DEPUTY ASSISTANT SECRETARY, BUDGET
Mr. Sherwood [assuming chair]. Good morning. Thank you very
much for coming to share your wisdom with us, to this huge
group here. [Laughter.]
Mr. Sherwood. I think if you'd like to make an opening
statement, then we may have a vote or we may have some folks
come back and we'll chat a little bit.
Mr. Horn. Sounds good. Thank you very much, Mr. Chairman. I
am very honored to appear here today to discuss the President's
fiscal year 2003 budget request for the Administration for
Children and Families. Kerry Weems, Acting Deputy Assistant
Secretary for Budget, accompanies me here at the table.
The fiscal year 2003 budget for the Administration for
Children and Families is $47 billion, a 5.3 percent increase
above the fiscal year 2002 enacted level, reflecting the
President's commitment to support the well-being of America's
families. The request includes $33.9 billion in entitlement
funds and $13.1 billion in discretionary spending. In addition
to seeking continued funding for a wide range of programs
serving some of this Nation's most vulnerable populations, our
budget targets resources to strengthen our Nation's families,
address youth issues, expand the participation of faith-based
and community-based organizations, and focus on the President's
management reform agenda.
Cornerstone to our budget for strengthening families is
reauthorization of the tremendously successful Temporary
Assistance for Needy Families, or TANF, program. We would
maintain funding by providing $16.5 billion annually for block
grants to States and tribes, $319 million a year for
supplemental grants, $2 billion over five years for a more
accessible contingency fund, and $100 million a year--funded by
the elimination of the illegitimacy reduction bonus for a
research, demonstration and technical assistance initiative
primarily focusing on family formation and healthy marriage.
Our proposal also would redirect $100 million from the high
performance bonus to establish a competitive matching State
grant program to promote healthy marriages and reduce out-of-
wedlock births, and would replace the remaining bonus with a
$100 million a year bonus to reward employment achievement.
Child care also plays an important role in the success of
welfare reform by providing parents the support they need to
work. Our budget recognizes this link by maintaining the
historically high level of child care funding currently
provided to States. Child care entitlement funding would be
continued at $2.7 billion, and discretionary funding under the
Child Care and Development Block Grant would be continued at
$2.1 billion.
States also would continue to have flexibility under both
TANF and the Social Services Block Grant to address the child
care needs for low income working families. Further, we are
requesting $6.7 billion for Head Start to maintain the current
level of enrollment and services while continuing to strengthen
the program's focus on improving early literacy.
Child support provides another vital link to a family's
ability to achieve self-sufficiency. Our budget would increase
child support collections and direct more of the support
collected to families. Not only would these policies provide
more financial support to families, but fathers would know that
when they pay child support their families will benefit and
their children will know they are being helped by both parents.
To support these efforts, families that have never received
assistance would be required to pay a $25 annual user fee when
child support collections are made on their behalf.
The importance of the role of a father in a child's life
also is reflected in our request for $20 million for a new
initiative to promote responsible fatherhood. This program
would provide funds for competitive grants and projects of
national significance that focus on public education and
awareness and the development of best practices, research and
technical assistance.
To further our efforts to strengthen families, ACF's budget
would increase the funding level for Promoting Safe and Stable
Families to $505 million, fully supporting the recently
reauthorized program levels. These funds would help children
stay with, or return to, their biological families, if that is
safe and appropriate, or place children with adoptive families.
Next, our budget targets youth by supporting the new
authority for funding the Mentoring Children of Prisoners
program at $25 million, along with $60 million to support the
new voucher program for youth aging out of foster care to
pursue education and training. In addition, our budget requests
$10 million for Maternity Group Homes, which would provide a
range of service to young, pregnant and parenting women.
The President has been a leader in recognizing the
important role that charitable organizations play in delivering
services to the public. We are proposing steps to increase
Federal support for these groups through such programs as
Maternity Group Homes, Mentoring Children of Prisoners and
responsible fatherhood. In addition, our budget seeks an
increase of $70 million for the Compassion Capital Fund, to
strengthen our ability to identify and promote successful
models for providing social services by charitable
organizations.
Finally, our fiscal year 2003 request for Federal
administration is $184 million, including the $1.6 million for
the Center for Faith-Based and Community Initiatives. This
funding level will support a reduced work force reflecting the
President's focus on management reform through work force
restructuring and consolidation. Further, ACF is committed to
working with our partners to focus on results. Under the
requirements of the Government Performance and Results Act, or
GPRA, ACF's strategic goals, objectives and performance
measures have been developed and reflected in the fiscal year
2003 budget request.
We look forward to working with the Congress in achieving
these budgetary goals. I want to thank you again, Mr. Chairman,
for inviting me to be here today, and I'd be happy to answer
any questions you might have.
[The justification follows:]
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HEAD START EVALUATION
Mr. Sherwood. Let's talk about Head Start a little bit. How
do you evaluate your Head Start program? Do you think the
changes are in place to change it from what in lots of areas
has been basically a political patronage program into a
developmental program?
Mr. Horn. As I'm sure you're aware, Mr. Chairman, the
President is very interested in making sure that we strengthen
the early literacy development component of the Head Start
program. As such, this year we will be launching a $50 million
initiative within Head Start to strengthen the early literacy
component in Head Start without sacrificing the comprehensive
nature of the services of the program.
I do think that Head Start has been a successful program in
the past. But as all programs need to do, it needs to evolve as
we gain new knowledge. We have more knowledge today about how
to help young children develop early literacy skills. Our
challenge is to translate that new knowledge into changes and
practice at the community or local grantee level. That's a big
part of what we're interested in doing.
Mr. Sherwood. So what are your qualifications, then, to
work in Head Start, to work with the children? What are your
hiring qualifications?
Mr. Horn. As you may be aware, there is a statutory
requirement that by September 30th, 2003, at least 50 percent
of the teachers in Head Start be credentialed. We're at about
46 percent of credentialed teachers now in Head Start, and
we're on track to getting to the 50 percent level. In addition
to that, we are working with teachers who may not have a
credential to make sure they do have the skills necessary,
particularly in the area of early literacy development, so that
they can more effectively help pre-school children under their
charge to develop these critical skills.
CHILD CARE SERVICES
Mr. Sherwood. Thank you. The Child Care and Development
Block Grant is designed to improve the availability,
accessibility and affordability of child care. What do we know
about the outcomes of the Child Care Block Grant program along
these lines? In other words, is it working?
Mr. Horn. It certainly is working in the sense that it is
helping primarily low income parents access child care. In the
President's proposal, $4.8 billion in the Child Care and
Development Fund is available for subsidies for low income
families. It's not the only source of funds for child care.
States also have the ability to transfer up to 30 percent of
their TANF block grant money into the Child Care and
Development Fund. They can also spend additional money directly
through the TANF block grant to help with child care subsidies.
And they can use money out of the Social Services Block Grant.
All told, the Federal Government helps to subsidize child
care for low income families to the tune of almost $9 billion a
year. When you add in State maintenance-of-effort requirements
on these programs, the amount of money available for child care
subsidies grows to about $11.7 billion. That's sufficient to
help to provide about 2.7 million children with subsidies for
access to child care.
In terms of this Administration's interest in improving the
quality of child care, part of our interest is to take what we
know about early literacy and early childhood development and
find creative ways of getting that information into the hands
not only of preschool teachers and Head Start teachers but also
child care providers. So a lot of the work that we're going to
be doing through Head Start, the information that is developed,
we also will be then aggressively disseminating that
information to child care providers as well.
SCHOOL READINESS
Mr. Sherwood. It's a very difficult area, because you know,
as we all know, there's been this historic shift in the amount
of attention that young children get as parents don't live in
the same area with grandparents, and both parents work, which
in my generation was not as common. My experience on the school
board for many years is that you have so many children coming
to kindergarten and first grade that haven't been worked with
as much as we used to see. Then the public school teachers have
responsibilities that normally were worked out by parents or
aunts or uncles or grandparents.
So I think that this is just an area we need to spend so
much attention to.
Mr. Horn. And we agree with that. In fact, the President
has made very clear his interest in helping children learn to
read and helping to develop those skills in the preschool years
as well, so they can be successful in school. That's one of the
reasons why, in his budget for the Department of Education, he
has included $90 million in efforts to get that kind of
information into the hands of preschool teachers as well as
child care providers.
Mr. Sherwood. Thank you very much. We'll have the Chairman
take back over so we're properly run here.
Mr. Regula [resuming chair]. Thank you. I'm sure you did
very well. You moved along in great shape here. Did you leave
any questions?
Mr. Sherwood. Sure moved all the panel members out.
[Laughter.]
Mr. Regula. Okay. Thank you again, Mr. Sherwood. I see now
why you're unopposed. [Laughter.]
Mr. Regula. Well, that's good timing.
EARLY CHILDHOOD DEVELOPMENT
I would be interested in your response on Head Start, but I
can get that from the staff. Do you inform child care givers
about how to successfully provide for social, emotional and
cognitive development of infants and toddlers? In other words,
do you get your information out to people that need to work
with children?
Mr. Horn. Yes. There is a quality set aside in the Child
Care and Development Block Grant of 4 percent. States actually
exceed that 4 percent and spend about 6 percent of their block
grant monies on quality initiatives. Most States, if not all,
use a good portion of those funds in terms of professional
development for child care providers as well as consumer
education, that is, disseminating information to parents so
they can make better choices in terms of child care, better
informed choices.
At the national level, we fund a number of technical
assistance resource networks that also provide this information
both to providers and to parents.
I might say, Mr. Chairman, it's a pleasure to see you
again. You might recall the last time we were together, you
were giving me a tour in Canton, Ohio, of the NFL Hall of Fame.
It's a pleasure to see you again.
Mr. Regula. Well, nice to see you. I know you have some
Ohio ties. [Laughter.]
Mr. Regula. We also now have the National First Ladies
Library in Canton. So the next time you come back, we'll give
you a tour of that.
Mr. Horn. I'd be pleased at that.
Mr. Regula. I have a personal interest, my wife started it.
HEAD START GOALS
I think probably we covered the questions. Head Start. Are
you satisfied that it's meeting its goals?
Mr. Horn. No, I'm not. I'm not satisfied. Neither is the
Secretary, nor should any of us be satisfied. We should always
be challenging ourselves to improve every program that we have
oversight authority for. So we are particularly interested in
strengthening the early literacy component in Head Start. This
year we're launching a $50 million initiative to help
disseminate information, new information about how children
develop early literacy skills, to Head Start grantees so they
can translate that new knowledge into practice.
The Secretary is very clear in challenging us always to
think about ways to improve all the programs that we oversee.
So if you ask me do I think this is a program that is
important, yes. If you ask me am I satisfied that we are doing
all we can to make sure that all the children in Head Start are
optimizing their development, no. And none of us should be. We
should always be challenging ourselves to do better.
EARLY LEARNING IN HEAD START
Mr. Regula. I think it started out as custodial. But now I
hope at least it's moving toward a preschool, part of the
learning experience of preschool children. Because the evidence
grows almost daily about the importance of those first early
years for a child's development. Is that what you perceive
happening with Head Start?
Mr. Horn. Yes, and I think you are exactly correct, it is
very critical what happens in the early years of child
development. We know that children who arrive at kindergarten
and first grade with good early literacy skills, it's very
predictive of success later on in the educational system.
Mr. Regula. Is this changing the perception of the people
that you employ, to try to get those who have some skills in
development, educationally?
Mr. Horn. Yes. We've changed a lot in terms of our
knowledge in this area. Back when I was in graduate school, and
I'm a clinical child psychologist, the thinking at the time was
that it was inappropriate to introduce the alphabet or letters
and numbers in any systematic way to children before they
entered first grade, let alone preschool. What we've learned is
that actually we can do that in creative ways that maximize
children's development.
When I was the Commissioner for the Administration on
Children, Youth and Families in the first Bush Administration,
I remember going on site visits. If we saw the alphabet in the
classroom, we told the grantees to take the alphabet down. Now,
I don't think that it's appropriate to be standing up in front
of three- and four-year olds with flash cards about the
alphabet. But I don't think we ought to keep the alphabet
secret from them, either.
So I think there are creative ways for us to introduce the
alphabet letters, numbers and even early reading skills to
children in ways that are helpful. That's the kind of new
thinking and information that we're trying to get out.
LASTING EFFECT OF HEAD START
Mr. Regula. There's been criticism, and it's been in the
press, that Head Start children don't, say, after fourth grade,
there's no evidence that this had made a difference. How do you
respond to that?
Mr. Horn. I think there is a danger to think that Head
Start is a one shot inoculation against everything else that
can go wrong in a child's life, including failing schools. So
the idea that if we give a child a year or two of Head Start,
if they transition into failing schools, they'll do fine. I
think that's a little bit naive. So it doesn't surprise me that
if a child gets a really good experience in the preschool
years, but then transitions into a school that is really not
doing its job, that the child starts to fall behind again.
This is why the President feels very strongly not just
about preschool and early learning, but also education reform
more broadly. So it seems to me what we need to do is look at
the entire life span of the children and make sure that all
along the path to adulthood that they're interacting with
systems that are effective in helping them maximize their
development.
Mr. Regula. Very well. Thank you for coming. Unfortunately
we have a vote on, so we're going to have to adjourn the
hearing. I appreciate your insights.
You have a challenging responsibility, you're dealing with
one of the Nation's most precious assets, children. Thank you.
Mr. Horn. Thank you.
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Wednesday, March 12, 2002.
ADMINISTRATION ON AGING
WITNESSES
JOSEFINA G. CARBONELL, ASSISTANT SECRETARY FOR AGING
KERRY WEEMS, ACTING DEPUTY ASSISTANT SECRETARY FOR BUDGET, OFFICE OF
THE ASSISTANT SECRETARY FOR BUDGET, TECHNOLOGY AND FINANCE
Mr. Regula. Our panel is the Administration on Aging,
Assistant Secretary for Aging, Josefina Carbonell, accompanied
by Kerry Weems.
Ms. Carbonell, you have been launched with a great
introduction by Carrie Meek, so we will not need to spend any
more time on that. She spoke highly and effectively on your
behalf. We look forward to your testimony, and your entire
statement will be made part of the record.
I have been involved in aging issues for many years, along
with Claude Pepper back when we were co-chairmen.
Ms. Carbonell. Mr. Chairman, thank you for this opportunity
to discuss the fiscal year 2003 budget request for the
Administration on Aging. We look forward to continuing to work
with you on issues important to American seniors.
With me today is Kerry Weems, with the HHS Budget Office,
and some other staff from the aging program and support team in
the aging agency. My written testimony is being submitted for
the record, and in the interest of time, I will summarize my
testimony.
The Administration on Aging is part of a Federal, State,
tribal and local partnership, and one of the Nation's largest
providers of home and community-based care for the elderly.
This partnership, called the Aging Network, is made up of 56
State units on aging, 235 Indian tribal organizations, 655 area
agencies on aging, and over 29,000 direct service providers in
every community.
The fiscal year 2003 President's budget requests $1.3
billion to continue to support the health, well-being and
independence of older Americans and their caregivers. This will
fund all of our core service programs such as meals, supportive
services, caregivers, preventive health, and Native Americans
at or above fiscal year 2002 levels. This request includes a
$2.4 million increase for our home delivered meals and
preventive health programs. We are requesting $745 million for
nutrition programs. This amount includes funds previously
appropriated to the Department of Agriculture to support the
meals programs funded with the Administration on Aging dollars.
This year is the 30th anniversary of our nutrition
programs. These programs began as a 3-year demonstration
program, and over the years they have provided almost 6 billion
meals to at-risk seniors. This budget request will allow the
Aging Network to provide over 300 million meals in this budget
request.
We are also requesting $357 million for supportive
services. This funding, along with the dollars provided both at
the State and local levels, will allow the network to maintain
current levels of services. This funding enables communities to
provide rides to medical appointments, grocery stores and
drugstores. It provides handyman, chore and personal care
services so that older persons can stay in their homes. It is
also used for community services such as adult day-care, health
education activities, and information and assistance. Our
network also provides meals and supportive services to Native
Americans and Native Hawaiian seniors.
Our request for these services totals $28 million. For the
family caregiver support program, our budget request is $141.5
million, which includes $5 million for the Native American
caregiver program. This amount will help maintain the current
level of services for the caregivers who so desperately need
them.
The Administration on Aging budget request includes $28
million for training, research and discretionary projects. We
are asking for $18 million to continue ongoing projects. In
addition, we are requesting $10 million to test new and
creative programs that improve the quality of life for older
Americans and their families.
Pension counseling and the elder care locator programs, now
permanent activities, began as demonstration projects. The
request to maintain these activities is $2.4 million. The
request for preventive health activities is $21.5 million. This
includes a $439,000 increase that will help us focus on the
Secretary's health priorities, such as in the area of diabetes,
cardiovascular disease and obesity.
State long-term care ombudsman and elder abuse prevention
programs help protect frail seniors. The budget request is for
$18 million in this area.
The Alzheimer's demonstration program tests effective
models of care. These grants have proven to be very successful,
and they have helped to expand support services, particularly
for hard-to-reach minority, low income and rural families
across America. Our request is for $11.5 million in this area.
Our budget requests $19 million for Federal administration.
It includes funds for costs associated with employee pensions
and retiree health benefits. Along with our budget, we provided
the committee with our performance plan and report under the
Government Performance and Results Act. I am very pleased with
the progress in this area, particularly in measuring the
results of our programs.
I would like to commend our State and local partners, many
of whom are with us this afternoon, for working with us on
this.
Thank you, Mr. Chairman. I am happy to answer any
questions.
[The statement of Ms. Carbonell follows:]
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NATIONAL FAMILY CAREGIVER SUPPORT PROGRAM
Mr. Regula. Has the caregiver program, which is relatively
new, reduced the incidence of people going into full time
homes, nursing homes and so on? In other words, is it working
in letting people stay in their own environment?
Ms. Carbonell. The caregiver program is a great program. We
are seeing results at the State and community levels.
This is the first year that the family caregiver program is
in operation. We are beginning to see some excellent results in
communities, particularly as States and local communities
develop the capacity to serve this new impending population.
For instance, we are looking particularly at being able to
expand the outcomes measurement piece in this program, which is
a new program. We are finishing a study that will be ready by
September that will look at outcome measures including how many
people we are keeping out of institutions. We project that we
are going to serve over 250,000 caregivers.
Mr. Regula. The caregiver can be someone that comes in
occasionally, a relative or family member that comes once a
week to help out this person?
Ms. Carbonell. A caregiver can be someone that cares not
only for elders, but also for children or grandchildren under
the age of 18. There are caregivers that are either family or
informal caregivers, neighbors, church people, community
volunteers.
Mr. Regula. And they get a small amount of money for this
service? Do they get paid something?
Ms. Carbonell. The beauty of this program is the
flexibility under which it was constructed. It allows States
and local communities to implement it to meet local needs. For
instance, there are certain States that allow a small stipend
to help the caregivers with transportation and respite
services, either center-based or home-based.
The program is doing many things in rural areas. In the
State of Georgia, they have Meals on Wheels, sort of a respite
program on wheels; that is, a van that travels to provide
respite care services to rural communities in Georgia.
We are looking at and forming new partnerships in faith-
based organizations in the community. We are also reaching out
to intergenerational activities, fostering and improving their
partnerships and those exchanges between generations because
the caregivers that we are supporting also are taking care of
grandchildren under the age of 18.
We are also looking at opportunities and projects that are
targeted towards disabled children, and the caregivers of those
disabled children, to allow them to support their activities,
to remain independent in the community and with the support of
those caregivers.
Mr. Regula. Mr. Sherwood.
NUTRITION PROGRAMS
Mr. Sherwood. Thank you, Mr. Chairman.
I was happy to see that the administration requested an
additional $2 million for the Meals on Wheels program because I
know how successful that is at home. Can you tell me how these
funds are allocated and how many additional seniors you can
help with that? Or how does that work?
Ms. Carbonell. We placed the additional dollars in home
delivered meals because we know there is a need in that area;
the outcome that we get is keeping people out of institutions.
We expect with the total nutrition budget request to serve
close to 302 million meals. The money flows to States and it is
formula based. The bulk of the money goes to States on a
population basis, and the States then determine their own State
priorities and then provide the money to local communities
based on local priorities.
The local communities again set up their needs and address
their needs based on particular community needs. So it is not
only population based, but based on the number of high risk and
poor individuals in the area.
Mr. Sherwood. My Congressional district is one of the older
demographically in the country. These programs have been very
successful, and very important. They just fill a real need as
families, because of economic circumstances, with children and
grandchildren living in different cities or States, and you do
not have as strong a multigenerational family, outside
caregivers are a wonderful thing.
How do you determine your efficiency? In other words, your
Meals on Wheels, do you look that money over critically between
districts to see who gets the most bang for their buck?
Ms. Carbonell. The beauty of the Older Americans Act is
instead of us dictating to States and local communities the way
the dollars are to be spent, the local communities work with
the area agencies on aging, to determines what the pressing
needs are. In looking at how we fund home-delivered meals
programs, it is based on population, which is how the bulk of
how the dollars get distributed within and throughout
communities.
We are looking at the outcome measures. We are looking at
malnutrition. There is a large percentage of elderly people
that are malnourished. The beauty of the Older Americans Act is
that it takes these Federal dollars and coordinates these
dollars and matches them with other State and local dollars,
which allow us to serve over 7 million seniors across America's
communities. Three million of those seniors that we serve are
home-bound, and many of them are under the home-delivered meal
program.
So again our experience from our outcome measures is that
we are trying to reach and are reaching by the fact that we are
serving such a large proportionate share that are both home
bound, and also that are poor and that are disabled or home
bound, and also that live in rural areas.
Mr. Sherwood. We have a great many people that this service
is very important to, not that they cannot necessarily afford
to buy food, but they are alone, they are losing their
enthusiasm, and this is just a wonderful thing, someone comes
in and it brightens up their day and it is one of the things
that keeps them going and keeps them in their own home. It has
been an excellent program.
Ms. Carbonell. We are very proud of the success that our
partners at the local level have had. As a former service
provider, I can tell the gentleman that the success of the
program is not only in the sheer numbers of the people that we
are serving with the limited dollars that we have, but the most
important is the kind of impact, that we are keeping people out
of institutions.
The senior center and the congregate meal sites, are
another part of the nutrition program, another critical point.
I heard in the earlier hearing Mr. Kennedy speaking about
the
mental health needs of the elderly and of depression and
isolation issues. I can tell Members there is not a better
program which targets reducing isolation and depression than
the participation and the social interaction that happen at
these adult senior centers, congregate sites and adult day-care
centers across the Nation.
Mr. Sherwood. And the Meals on Wheels reaches so many
people who can't or won't get out to others, and so they both
fill a need.
Ms. Carbonell. Absolutely.
Mr. Regula. Mr. Peterson, go ahead and take your time now.
PREVENTIVE HEALTH
Mr. Peterson. Can you give us a little detail on the
preventive health services?
Ms. Carbonell. It is a program that provides mostly health
promotion and education. That means that it works in
communities, under this new Administration and with Secretary
Thompson's leadership, we target these funds that we have in
our particular agency to complement services--for instance,
from CMS, from SAMHSA, and from other agencies. In addition, in
health promotion, we have risk reduction, health screening such
as cardiovascular, the detection of diabetes, cholesterol and
intervention and referral to appropriate services.
Most of the focus of the health promotion activities again
is in support of other funded activities. One of my priorities
in this administration and of the Secretary is to foster better
collaboration under the one department initiative, to work more
collaboratively, to be able to merge the two systems: Our
social support systems which we are known for in the
communities across the country, with the medical model.
Many of our current providers in communities are also
Medicare and Medicaid providers in our communities. It is by
the integration of both of those services that we are able to
better create efficiencies; but most importantly, create the
impact that we want to reach. We want to do the prevention
services, reach and identify individuals ahead of time so they
can be referred to appropriate services.
PHYSICAL ACTIVITY
Mr. Peterson. I guess we have a problem in the country from
my viewpoint, and I don't think that many would disagree with
the lack of physical activity in society, and it is certainly
prevalent with seniors. Is there any effort being made, because
there is probably nothing we can do for seniors, if they had 30
minutes of good physical activity every day. That raised the
blood pressure, that got the heart pumping and the blood
circulating, for clarity of mind and feeling good afterwards.
Is there any broad, focused message to get people to realize
how much better they would feel if they did something for
exercise?
Ms. Carbonell. First of all, the Secretary has put all of
us on a diet, so this baby boomer is also walking, starting at
the top.
Most importantly, let me tell you the kind of things that
are happening in senior centers and even Alzheimer's programs
across the country. There are recreational therapy and physical
therapy, not just tied to the actual medical component of the
physical therapy, but the recreational and social component of
exercise and keeping active.
Wheelchair bound seniors that are in adult day-care centers
are doing exercise right from their wheelchairs. And, my
Deputy, Dr. Peggy Giannini, has expertise in disability and
veterans affairs, and this is the first time we have had a
medical doctor working with us under the agency. I have
instructed her to lead the effort on the physical activity and
obesity reduction, which again reduces many of the high risk
behaviors of illnesses and chronic conditions.
So one of the things that we are doing is working with CDC
on a recently released report, called the Aging and States
Program, to have a better collaborative effort between the
Administration on Aging and community health centers across
this country in States and in local communities. Again we want
to improve how we leverage those dollars so we can get the
experts from the health communities to our senior centers, to
assist us in improving the efficiencies of those physical
activity programs to get better outcomes on people's health.
We are also partnering with the President's physical
fitness program in that we are creating intergenerational
activities for physical fitness. I don't know if the gentleman
is aware, we had a very large Florida senior Olympics program.
Many of your States have them, and the Deputy is also reaching
out to the Veterans Administration, to try to coordinate a
family caregiving support program to provide respite care
during their veterans physical fitness sports program at that
time.
We are doing some creative things. These additional dollars
will allow efforts to leverage the dollars at the community
level to put together to with CDC and HRSA and other
components.
VOLUNTEER PROGRAMS
Mr. Peterson. The RSVP program is not under your bailiwick;
is it?
Ms. Carbonell. No, it is not. But the RSVP program, as much
as the senior companion programs and others under the freedom
corps, senior corps, works in conjunction and is an integral
part of our senior centers and Aging Network.
Mr. Peterson. When our seniors first become seniors, they
have a lot of ability. Too often it rusts because they do not
use it. In my view, we need to figure out how to harness the
brain power of our seniors, because I find those that continue
to use it do not lose it, and we have a problem where somehow
we look forward to this retirement and sit on a porch and not
do anything. In a few years, we do not know our name or the day
of week it is.
Ms. Carbonell. We conservatively have 130,000 volunteers
that work actively day in and day out in programs in
communities across this Nation, including the nutrition program
that assist not only at the senior centers as clerks, as social
service aides, as telephone workers, but also with home-
delivered meals, delivering meals to the homes of homebound
citizens across this country.
We have in the Medicare Pantrols, a very successful
program. We have an excellent group of certified, trained
volunteers that are assisting to educate and assist
beneficiaries in watching out for wrong billings and in
assisting them to just to be better health consumers.
In the area of the long-term care ombudsman program, we
have over 1,000 paid ombudsmen. In addition, we have 8,000
trained certified volunteers that go into nursing homes to try
to address nursing home abuse-in, not just in nursing home-but
in assisted living facilities and in group homes.
PHYSICAL ACTIVITY
Mr. Peterson. I would urge you not to overlook the use of
our media. You know, today we have the ability to communicate
with everybody in this country through television, and we ought
to have a honed message that teaches us all that if we do not
use it, we lose it, and that we need physical activity. All of
the recent studies, no matter what disease it is, 30 minutes a
day of activity drastically changes your likelihood to contract
that. And just the general feeling about yourself, the mental
state, it often comes down to physical activity. And I think if
there is a threat to this country's health, seniors, middle age
on down, it is lack of physical activity.
I think structured programs reach some of the targeted
base, but if we have a clear message, we can reach them all,
those that can comprehend. And I think we can change behavior
if we get the right message. We have got to get people that
they will listen to. We have got to get some people that they
will listen to. I hope this administration gives us another C.
Everett Koop. We all have sorts of role models that are giving
these messages. Look at the messages of Ed McMahon. I don't
agree with all of his messages, but he is a voice that
Americans listen to, and we need to take people like that that
can talk to our seniors and make sure that--so much of health
is behavior.
Ms. Carbonell. That is right, sir. And I think the
Secretary is right on target in this. He is committed to making
sure that physical activity and the reduction of obesity are
addressed in the Surgeon General's report--he wants to make
sure that he gets in front of this issue, and that there is
media and press, and that we do identify those individuals that
we know are active in communities across this country. For
instance in Michigan, we heard of a football player who is not
only involved in training and assisting high schools, but he is
involved in mentoring children in the elementary schools in
physical activity. So intergenerational programs are important.
But we must do better making sure that that is on the front
agenda, and I can assure you that we take that to heart, and we
will proceed, and that will give us the ability to focus on
those areas where the Secretary is heading.
Mr. Peterson. Thank you.
Mr. Regula. Mr. Kennedy.
Mr. Kennedy. Thank you, Mr. Chairman. I would like to
associate myself with the remarks of my colleagues Mr. Peterson
and Mr. Sherwood. I think they got it right on both the meals
program and the behavioral exercise issue. We do need to have a
Presidential physical fitness program. My cousin-in-law, Arnold
Schwarzenegger, was former President Bush I's physical fitness
director, and he still tells me that I am getting ``too
flabby.'' so I have my own behavioral health management with
Arnold because he says he ``will be back'' if I get too flabby.
NATIONAL FAMILY CAREGIVER SUPPORT PROGRAM
Anyway, Mr. Chairman, you asked about the caregiver
program, and caregivers, half of them are over 65. They are
seniors themselves. They have got their own health care
problems, and they are trying to take care of their loved ones.
They are burned out, and they get no support.
And if we want to save money, let alone save their quality
of life, we ought to put more money in the caregiver program.
For pennies we are giving them the respite they need to put a
loved one in elderly care while they go out and exercise. If
they are not well, believe me, the person they are caring for
is not going to be well, or the person they are caring for is
going to be in a nursing home or someplace else.
So I think the best money we can spend is on this caregiver
program. And the States have been utilizing it, but I want to
call your attention to the fact that there are 7 million
caregivers, but the family caregiver program, is only able to
help 250,000 of them right now.
So, Mr. Chairman, I think your point is on a good issue,
These people, young and elderly alike, just need help, and they
will do it all. Believe me, they are providing the care for
nothing, and all we need to do is make sure they do not get
burned out. So I think we need to really bump up.
Would you comment on the needs out there for the caregiver
program?
Ms. Carbonell. Well, like I said before, this is a program
that has been very much welcomed by caregivers across this
country. And one of the first meetings that I had was--one of
the first listening sessions that I had, we brought all the
caregiver groups together to meet early in August, and we heard
from them, and it was particularly striking to hear from one
caregiver, Mr. Kennedy, just what you mentioned. She said to
us, you know, why do you call us informal caregivers? We are
not informal. We are here 24 hours, 7 days a week. There is
nothing informal about us.
Mr. Kennedy. That is right.
Ms. Carbonell.
And that is the beauty of this program. It is reaching to
be able to assist caregivers so they can have some time for
themselves. It is a work force issue, too. It is a private
industry issue and a business issue. This is about assisting
folks to remain employed, gainfully employed, to keep at least
part-time employment so there would be some adult day care
respite, some support, some transportation, the whole gamut of
services.
In this proposal we are particularly going to focus on
improving, again, the information on the program, by going out
to communities. So we are making a special emphasis so that
caregivers are aware that this program is up and running and
that they should access their local communities for help.
Mr. Kennedy. Well, if you could stay in touch with us on
that, I would really like to track the success of that program.
I hear from my constituents all the time who are giving care
for their loved ones just how tapped out they are.
Ms. Carbonell. It is a very welcome program. Our Department
estimates that there are upwards of $95 billion in estimated
savings if we were to pay for the kind of health and support
that these caregivers are providing. So it is a very critical
program, and we are very proud that it is on its way and that
we are getting some good outcomes out of it. And I will be
happy to come back and keep you abreast. Thank you.
Mr. Kennedy. Thank you.
Just two more questions, Mr. Chairman.
ELDER ABUSE
You spoke briefly when responding to Mr. Peterson about the
shocking report on elder abuse and theWould you comment on what
is being done and what progress is being made on the HHS study for
elder abuse and what is going on?
Ms. Carbonell. Almost all of the programs that we provide
under the Older Americans Act and the aging network address not
only the prevention, but target the four high-risk factors of
folks as evidenced--the four high-risk factors that usually
occur when a person is abused, and frailty is one of them. The
second one is isolation. The third one is depression, and the
fourth one is just caregiver stress.
So if you look at almost all of the core service programs
that we provide at the senior center; the home-delivered meals,
the personal care and the homebound services, and now the new
family caregiver support program, these addresses, again, the
reduction of those high-risk factors which are the main causes
of the elder abuse. If you look particularly at the ombudsman
program, like I mentioned before, this ombudsman project again
has been successful in providing key information not only to
residents in facilities, but to their caregivers and their
families in addressing and resolving the complaints.
If we look at the outcomes of the ombudsman program, we
address well over 200,000 complaints a year and achieve a
resolution rate of over 70 percent per year. I think that those
are pretty good results. But we must continue to work to do
better. And we are partnering particularly with CMS, again, to
ensure that we look at those areas where there are consistent
patterns of abuse, because the information we collect under the
ombudsman programs will give us critical data that will assist
us in focusing better efforts in that area. So we look forward,
under the Secretary's leadership, to the task force that he has
put together to address this issue. Most importantly, in
partnering with CMS we hope to improve the capacity of the
ombudsman program to respond at the local level.
Mr. Kennedy. I appreciate that because, of course, many
seniors are concerned about going into nursing homes. They are
concerned about their quality of life when they are older, who
is going to take care of them, and that is an issue that we
need to pay a lot of attention to.
NUTRITION PROGRAMS
I just wanted to reiterate, the meals program is absolutely
critical. As you know, one in three seniors in the congregate
meals program are at high nutrition risk, and three out of the
four in the home program are at high nutritional risk. Three
out of four. You are right, this is the only meal they receive
every day, and it has got great utility not only in delivering
the meal, but the smile and the human connection that people
just do not get any other way. So I appreciate the support for
this kind of program. We definitely need to do more.
PROGRAM OUTREACH
I would just ask what does your budget do to reflect the
growing minority communities?
Ms. Carbonell. We are very proud of the record. We serve
over 30 percent of the population, that means 30 percent of 7
million that we provide services to across this country, come
from some ethnic minority. That is compared to close to 16
percent of the general population. If you look at the poverty
level, we are also over the amount. And if you look at the
rural statistics, the number of rural seniors we are serving,
approximately 34 percent of the folks that we are serving
across communities, come from rural communities compared to 24
percent in the general population.
But most importantly, again, is the importance of the Older
Americans Act and the kinds of services that were laid out and
how it was reauthorized. Number one, the targeting language is
there. So that means that the targeting of these funds is going
to those with greatest social and economic need, whether
seniors come from the minority community, whether they are
disabled, whether they are economically disadvantaged, or
whether they are geographically inaccessible because they live
in remote parts of our community.
So the track record in reaching the most disadvantaged is
there, and we are very proud of that, and we hope to continue
to, again, target the folks most at risk. We cannot serve
everybody, but our partners in the communities are reaching
those in most need.
PENSION COUNSELING
Mr. Regula. One last question. I understand you do
counseling service on pension benefits?
Ms. Carbonell. Yes.
Mr. Regula. That becomes, I would suspect, very important
to seniors, wanting to make sure, A, are they getting all they
are entitled to; and, B, are there things that they are
missing.
Ms. Carbonell. That is correct, sir.
Mr. Regula. Do you do this through the centers, or how do
you reach the seniors to let them know that you have this
service?
Ms. Carbonell. The pension counseling program is a program
that addresses not only the pension assistance for folks to tie
in--for instance, they don't remember or they do not
necessarily know where to turn to access their pension or their
spouse's pension. They have lost contact with the company. The
company has closed down. These demonstration programs are in
many communities in this Nation, and we have been able to
recoup millions of dollars in pensions for many of our seniors.
Mr. Regula. It would seem to be very important to surviving
spouses. Often one spouse, the husband, takes care of the
financial arrangements, and suddenly there is a widow with not
much understanding of what benefits are there.
Ms. Carbonell. Absolutely. That is a critically important
piece, but so is the other type of financial assistance that we
give under the regular supportive services from case managers
and caseworkers across this country. Some of the folks don't
even know how to balance their checkbook or do not necessarily
know--they do not know how to do payments by computer, and they
have to go in person and all of those things.
Many of our caseworkers across communities serve homebound
clients or just people who do not know exactly how to handle
their finances. This is going on day in and day out in local
communities. We are proud of the work that they are doing.
MEDICATION MANAGEMENT
Mr. Regula. I think Mr. Sherwood made a very good point on
Meals on Wheels. Do they get involved in helping people knowing
what pills they should take? This has to be confusing to
elderly people. They have a whole array of pills. Do they ask
the person who comes to their doors with the meals to ``give me
a little help here''?
Ms. Carbonell. Well, we are not necessarily assisting, but
we do have a medication management program that works as part
of the services that we provide in communities. For instance,
the medication management is available in facilities where they
are licensed to provide that care; for instance, in the social
medical model, the adult day health care centers, which are
paid by Medicaid waivers across communities. And medication
management is something that they just make sure to remind them
to take the medications and that they take them on time, et
cetera, both homebound or in congregate settings.
In assisted living facilities, it also is a service--a
support service that is available in those assisted living
facilities that allows elderly people who have some kind of
chronic condition to still remain and live independently in the
community without going into a nursing home by providing these
kinds of support in housing settings.
Mr. Regula. Any more questions?
SENIOR MENTAL HEALTH
Mr. Kennedy. Mr. Chairman, I would like to say that I look
forward to working with you. We talked about the senior mental
health piece. It has got to be a collaborative approach.
Obviously, AoA is the best vehicle for a lot of collaboration
because you reach the seniors. I look forward to working with
you. We might need some authorizing language, so I look forward
to working with you on that to reach out to seniors who are in
distress and make sure we identify them properly and get them
treated for what they need to be treated for.
Ms. Carbonell. Like I said before, we are the best vehicle
in the community setting to, number one, reduce isolation and
two, to reduce depression.
I forgot to say when the other gentleman asked me about
preventive health, that one of the services we have under the
preventive health category is mental health counseling,
although of a limited nature, because we--in most ways we are
in support. But mental health assessment and the risk
assessment for mental health comes in the way of caseworkers as
they intake and do the assessments in many of these individuals
to try to address their mental health as much as their physical
and mental health needs.
Mr. Regula. Your agency does do the work of the Lord, and a
lot of people depend on you. Thank you for being here.
The committee is adjourned.
Ms. Carbonell. As I said, this is the 30th anniversary of
our nutrition program, and we want to give you an apron that we
created to celebrate and encourage you, Mr. Chairman, and the
other Members to join us in delivering meals.
Mr. Regula. That ought to fit my wife.
Ms. Carbonell. We invite both of you to deliver a meal in
your congressional districts.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED
AGENCIES APPROPRIATIONS FOR 2003
----------
Wednesday, March 6, 2002.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
WITNESS
HON. TOMMY G. THOMPSON, SECRETARY, UNITED STATES DEPARTMENT OF HEALTH
AND HUMAN SERVICES
Chairman's Statement
Mr. Regula. I think we will get started. I hear there may
be a series of votes this morning and it will be disruptive to
the Committee hearing, but we will do as well as we can.
We are happy to welcome you, Mr. Secretary, and look
forward to your testimony. You have a lot of challenges, and we
are anxious to hear the solutions. One question I can discard
is, what are we doing about an NIH director. Overnight took
care of that one.
But just in the interest of time, I am not going to do any
opening statement. Mr. Obey?
Mr. Obey. Go right ahead.
Mr. Regula. Okay, well, Mr. Secretary, we will look forward
to your testimony, and I know we will have some questions.
Secretary's Statement
Secretary Thompson. Thank you, Mr. Chairman, members of the
Subcommittee. It is an honor to come before you to discuss the
President's fiscal year 2003 budget for the Department of
Health and Human Services.
Mr. Chairman, your support over the past year has been
tremendous. On behalf of the President and myself, let me thank
you for all your help. Congressman Obey, it is good to see you,
and thank you for your good work over the many years, and thank
you for your friendship.
Mr. Chairman, the past 13 months have witnessed some
significant achievements at the Department of Health and Human
Services. I will detail some of these accomplishments in my
testimony. But at the outset, let me note that we are making
good on our promise to bring greater efficiencies to the way
that we run the Department. The President's budget will reduce
the number of HHS personnel offices from 46 to 4. We are
realigning and consolidating throughout the Department,
bringing better stewardship to our use of the taxpayers'
dollars, and we have launched a regulatory reform initiative to
reduce the paperwork burden on physicians, hospitals, as well
as other health providers.
As we make sure we are working efficiently, we are also
providing the resources our health care system demands. The
total HHS request for fiscal year 2003 is $488.8 billion. This
is an increase of $29.2 billion, or 6.3 percent over the
comparable 2002 budget.
The discretionary component of the HHS budget totals $64
billion in budget authority, an increase of $2.4 billion or 3.9
percent. The fiscal year 2003 budget further strengthens our
ability to deal with the threat of bioterrorism. In total, we
are asking the Congress to give us an additional $4.3 billion,
an increase of 45 percent over the current fiscal year. This
funding will support a variety of activities to prevent and
respond to the incidence of bioterrorism.
Right now, we are providing $1.1 billion to State
governments to help them strengthen their capacity to respond
to bioterrorism and other public health emergencies. The money
is part of the bioterrorism appropriation bill, and I want to
thank all of you on a bipartisan basis for what you did, that
Congress passed and the President signed into law on January
10th. Most of the money has already been sent to the States.
We are working to hook up every major county and State
health system in the Nation electronically through the Health
Alert network. The Network is developing communications, the
Network used by the CDC, to be able to communicate with State
and local health departments regarding possible disease
outbreaks. We are providing more than a half a billion dollars
for our hospital preparedness program, which will strengthen
the ability of local hospitals to prepare for biological and
chemical attacks. We are also looking at the opportunity to
develop regional hospitals for surge capacities if in fact we
really have a serious bioterrorism attack.
The NIH is also researching for better anthrax, plague,
botulism and hemorrhagic fever vaccines. We have purchased 154
additional million doses of smallpox vaccine that we should
have all in store by the end of this year, so that we will have
one vaccine for every man, woman and child in America.
When it comes to bioterrorism, we are growing stronger in
our preparedness each and every day. We are also advancing
important biomedical research and preventive health efforts.
The NIH will get significant funding for new research into new
vaccines and protecting the security of its facilities.
The budget provides $5.5 billion for research on cancer
throughout NIH, and a total of $2.8 billion for HIV-AIDS
related research. The CDC will also receive $940 million for
its State and local programs to improve local laboratories,
train physicians, and expand cooperative training between
public health agencies and local hospitals.
We are also requesting $20 million for a new initiative
called the Healthy Communities Innovation. It is a new
interdisciplinary service effort that will concentrate
Department-wide expertise on the prevention or the reduction of
diabetes, asthma as well as obesity.
And Mr. Chairman, we are also helping to prepare low-income
Americans for the future. That is why welfare reform remains so
important. The good news is that since 1996, welfare reform has
exceeded expectations, resulting in millions moving from
dependence on AFDC to the independence of work. Nearly 7
million fewer individuals are on welfare
W I T N E S S E S
----------
Page
Carbonell, J. G.................................................. 1951
Horn, W. F....................................................... 1101
Scully, T. A..................................................... 595
Thompson, Hon. T. G.............................................. 1
Weems, Kerry............................................595, 1101, 1951
I N D E X
----------
Department of Health and Human Services
Page
Abstinence Education............................................. 193
Abstinence-Only Education........................................ 181
Abstinence Until Marriage Program................................ 164
Access to Dental Care..........................................148, 150
Adoption......................................................... 128
AIDS Drugs Assistance Program (ADAP)............................. 152
Bioterrorism/Food Safety......................................... 174
Care for the Profoundly Mentally Ill............................. 131
Child Care.....................................................129, 153
Child Care and Development Block Grant (CCDBG)................... 137
Children's Hospital GME.......................................... 107
Community Health Centers......................................... 81
Compassion Capital Fund.......................................... 138
Congressional Justification...................................... 256
Consolidating Personnel Offices.................................. 98
Consolidation of Health Facilities Construction Activities......37, 101,
145, 185
Coordinated Federal Microbicides Plan............................ 157
Diet and Exercise................................................ 33
Diet and Physical Fitness.......................................53, 117
Drug Treatment................................................... 81
Department's Budget Request...................................... 38
Emergency Preparedness.........................................135, 163
Evaluation Tap Funding........................................... 146
Faith and Community Based Programs............................... 118
Family Planning Waivers.......................................... 166
Full-Time Equivalent............................................. 99
Funding for Title VII and VIII Programs.......................... 186
Funding Level.................................................... 52
Funding Mandatory Program........................................ 95
Global AIDS...................................................... 154
Head Start......................................................39, 170
Health Care Access............................................... 50
Health Care Funding.............................................. 31
Health Care Worker Shortages..................................... 112
Health Disparities in Health Care Access......................... 159
Health Insurance Accountability Demonstration.................... 97
Health Insurance Portability and Accountability Act (HIPPA)...... 126
Health Professions.............................................168, 185
Health Professions Funding....................................... 36
Homeland Security-Hospital Coordination.......................... 91
Healthy Communities Innovation Initiative..............29, 45, 136, 145
HHS Agency Leadership............................................ 192
HIV/AIDS.............................................151, 155, 183, 187
HIV Treatment and Prevention..................................... 187
HIV Vaccine Research Program..................................... 156
Home Health Care................................................80, 178
Homeland Security................................................30, 93
Immunization..................................................... 163
Limited English Proficiency.....................................86, 109
Low Income Home Energy Assistance (LIHEAP).....................140, 170
Macular Degeneration Therapy..................................... 114
Mammography......................................................42, 45
Medicaid 1115 Family Planning Waivers............................ 182
Medicaid Transition Costs........................................ 109
Medicaid Upper Payment Limit (UPL)............................... 153
Medicaid Waivers for the SCHIP Program........................... 121
Medical Savings Accounts......................................... 121
Medicare Formula................................................. 84
Medicare Savings................................................. 114
Men's Health..................................................... 133
Mental Health.................................................... 182
Microbicide Research...........................................167, 189
Minority HIV/AIDS Initiative..................................... 188
Morehouse School of Medicine..................................... 192
Moyer Table...................................................... 198
NIH:
Budget......................................................89, 111
Grants....................................................... 93
Leadership................................................... 89
Nurse Education Loan Repayment................................... 174
Nurse Shortage................................................... 173
Official Time.................................................... 112
Oral Health....................................................193, 195
Organ Donation..................................................90, 105
Oversight of Nursing Homes....................................... 119
Prescription Drug User Fee Act (PDUFA)/Generic Drugs............. 176
Prescription Drugs...............................................85, 96
Prevention....................................................... 47
Preventive Health................................................82, 84
Primary Care..................................................... 185
Private Patents on Federally Funded Research..................... 132
Proposed New Authority for States to Shift Funds................. 142
Proposed Rule to Make ``Unborn Children'' Eligible for SCHIP..... 172
Public Affairs and Legislative Affairs Offices..................99, 177
Recoupment of Federal Research and Development................... 179
Research Coordination Council.................................... 103
Research Savings................................................. 55
Rural Health Care................................................ 80
SCHIP Medical Waivers............................................ 34
SCHIP-Proposed Rule to Include the Unborn........................ 43
Scleroderma Research............................................. 161
Senior Mental Health Care........................................ 48
Services for Individuals with Mental Retardation................. 124
Sex Education.................................................... 161
Shadow Government...............................................79, 180
Single Food Agency............................................... 175
Statements:
Chairman Statement........................................... 1
Secretary's Statement........................................ 1
Stem Cell Research.............................................101, 133
Surgeon General.................................................. 82
Top Management Positions......................................... 111
Toxemia.......................................................... 162
Transfer of Funds................................................ 166
Vaccines for Children............................................ 40
Welfare Reform and the Food Stamp Program........................ 127
Youth Media Campaign............................................. 116
Department of Health and Human Services Efforts to Prepare Against
Bioterrorism
Advanced Research in Bioterrorism................................ 58
Anthrax and Other Bioterrorist Threats........................... 39
Anthrax Effects/Studies.......................................... 43
Bioterrorism.......................................56, 62, 77, 110, 115
Bioterrorism/Food Safety......................................... 121
Bioterrorism Preparedness and Response...........................54, 66
BSL-4 Laboratory and Related Infrastructure...................... 116
CDC National Pharmaceutical Stockpile............................ 74
CDC's Buildings and Facilities................................... 108
Communications................................................... 34
Community Health Centers......................................... 35
Construction..................................................... 40
Coordination Between Agencies.................................... 33
Educational Incentives for Curriculum Development and Training
Program........................................................ 111
Emergency Medical Services for Children.......................... 43
Emergency Operations Center...................................... 59
Emergency Supplemental Funds..................................... 93
Emerging Infectious Disease Agents............................... 71
Enhanced Metropolitan Response Systems........................... 98
Environmental Public Health Tracking Network and Centers for
Excellence..................................................... 118
Epidemic Intelligence Service.................................... 58
Fort Collins Facility............................................ 76
Funding for NIH.................................................. 34
Funding for State and Local Plans................................ 47
Funding for Upgrading CDC Capacity............................... 66
Health Alert Network............................................72, 106
Health Care...................................................... 51
Health Professions Programs...................................... 58
HHS Efforts to Prepare Against Bioterrorism...................... 89
Homeland Security................................................ 50
Hospital Infrastructure Program.................................. 112
Hospital Preparedness Program.................................... 127
HRSA's Hospital Preparedness Guidelines.......................... 117
Increased Funding................................................ 36
Inter Agency Coordination........................................ 53
Laboratory Registration/Select Agent Transfer Program............ 60
Laboratory Response Network and National Electronic Diseases
Surveillance System............................................ 101
Metropolitan Medical Response System............................. 84
National Electronic Disease Surveillance System.................. 107
National Laboratory System Demonstration Project................. 105
Office of Emergency Preparedness................................. 117
Pharmaceutical Stockpile......................................... 69
Poison Control Centers Program................................... 79
Preparedness..................................................... 50
Bioterrorism Preparedness.................................... 88
CDC's Laboratory Preparedness................................ 70
Hospital Preparedness........................................ 45
Office of Emergency Preparedness.............................57, 82
Public and Private Laboratories.................................. 128
Public Health Preparedness....................................... 44
Public Health Training Facilities................................ 112
Push Packs....................................................... 52
Rapid Toxic Screen............................................... 65
Resources........................................................ 52
Select Agents...................................................40, 110
Single Food Agency............................................... 126
State and Local Plans............................................ 47
Statements:
Acting Director for CDC, Dr. Fleming's Statement............. 25
Administrator for HRSA, Dr. Duke's Statement................. 30
Administrator for SAMHSA, Mr. Curie's Statement.............. 18
Chairman's Statement......................................... 1
Deputy Secretary's Statement................................. 1
Director for NIAID, Dr. Fauci's Statement.................... 9
Vaccinations..................................................... 33
Anthrax.................................................45, 55, 114
Smallpox Vaccination.............................38, 41, 48, 74, 88
Vaccine HealthCare Center........................................ 67
Witnesses........................................................ 1
Centers for Medicare and Medicaid Services
Annual Performance Plan and Report.............................901-1100
Appeals:
Medicare Contractor Workloads................................ 738
On-Going..................................................... 737
Appropriation History Tables:
Federal Administration....................................... 757
Medicaid..................................................... 827
Medicare Operations.......................................... 747
Program Management........................................... 816
Appropriation Language:
HMO Loan and Loan Guarantee Fund............................. 805
Medicaid..................................................... 772
Payments to Trust Fund....................................... 794
Program Management........................................... 723
Asian Americans & Pacific Islanders.............................. 695
Assisted Living Facilities....................................... 644
Audiology........................................................ 699
Audited Financial Statement....................................744, 845
Authorizing Legislation:
Clinical Laboratory Improvement Act.......................... 842
Federal Administration....................................... 748
Health Care Fraud and Abuse Control.......................... 848
Medicaid...................................................775, 826
Medicare Operations.......................................... 731
Program Management........................................... 817
Research, Demonstration and Evaluation....................... 768
State Children's Health Insurance Program.................... 860
State Grant and Demonstration Program........................ 856
Survey and Certification..................................... 758
Balanced Budget Act Program Management Request................... 756
Benefits Improvement and Protection Act of 2000................635, 714
Budget Authority by Activity:
Medicaid..................................................... 775
Payments to Trust Fund....................................... 807
Program Management........................................... 812
Budget Authority by Object:
Medicaid..................................................... 829
Payments to Trust Fund....................................... 801
Program Management........................................... 813
Budget Priorities:
Access to Health Care........................................ 717
Accountability............................................... 718
Budget Request:
Federal Administration....................................... 714
Medicare Operations.......................................... 714
Research, Demonstrations, and Evaluations.................... 715
Survey and Certification..................................... 715
CMS Budget Summary..............................................708-721
CMS Priorities................................................... 595
Chief Dental Officer............................................. 647
Claims Processing................................................ 736
Claims, Unprocessable..........................................730, 733
Claims Volume.................................................... 735
Clinical Laboratory Improvement Amendments (CLIA) of 1988:
Authorizing Legislation...................................... 842
Rationale for Budget Estimate................................ 843
Summary Table................................................ 842
Cost of Prescription Drug Benefit................................ 626
Cost of Prescription Drugs....................................... 627
Coverage:
Brachytherapy for Prostate Cancer............................ 702
Non-Disabled Individuals with HIV Disease.................... 693
Oral Cancer Drugs............................................ 612
Thoracic Electrical Bioimpedance............................. 682
DME Competitive Bidding.......................................... 615
Dental:
Care for Children............................................ 683
Care for Children on Medicaid................................ 687
Disease in Children.......................................... 696
Grant for Children, Funding.................................. 696
Waivers and Services......................................... 688
Discretionary Budget Summary..................................... 702
Drug Rebate Program for Medicaid HMOs..........................674, 791
Education Campaign............................................... 597
Electronic Claim Transaction..................................... 652
Eligibility Screening Tool....................................... 667
Emergency Room Costs and Reimbursements.......................... 670
Encounter Data Collection........................................ 744
End-Stage Renal Disease Reporting System......................... 648
English as a Second Language..................................... 670
Error-Rate Testing Program....................................... 639
Evaluations of Medicaid Managed Care Systems..................... 646
Executive Summary...............................................711-721
FTE History Table................................................ 654
Federal Administration........................................... 714
Administration Summary....................................... 750
Authorizing Legislation...................................... 748
Budget Request............................................... 748
Expenses, Fixed.............................................. 751
Expenses, Variable........................................... 754
Purpose and Method of Operations............................. 749
Rationale for Budget Request................................. 749
Recent Legislation and New Activities........................ 756
Summary Table................................................ 748
Financial Statement Audits....................................... 744
Fraud Education and Training Funding............................. 654
Fraud, Waste, and Abuse.......................................... 848
Funding of Dental Grant for Children............................. 696
Funding Levels................................................... 651
Funding Summary.................................................. 708
GAO Report, March 2002........................................... 687
GSA Rental Payments.............................................. 691
Government Performance and Results Act (GPRA).................... 901
Grants to States for Medicaid..........................772-793, 825-835
Grijalva Settlement Agreement.................................... 745
Growth in Home Health Care....................................... 685
HMO Loan and Loan Guarantee Fund:
Appropriation Language....................................... 805
Language Analysis............................................ 806
Healthcare Integrated General Ledger and Accounting System
(HIGLAS)................................................633, 743, 838
Health Care Fraud and Abuse Control:
Authorizing Legislation...................................... 848
FY 2003 Funding Increase for MIP............................. 854
Implementing FY 2002 and FY 2003 MIP Contracting Efforts..... 855
Medicaid/SCHIP Program Activities............................ 851
Medicare Integrity Program Activities........................ 851
Priorities and Strategies.................................... 848
Summary Table................................................ 848
Health Information Privacy Regulation............................ 787
Health Insurance Flexibility and Accountability.................. 662
Health Insurance Portability and Accountability Act (HIPAA)....632, 839
Administrative Simplification Regulation..............741, 756, 787
Privacy Regulation.........................................742, 787
Home Health:
Growth....................................................... 685
Outcome-Based Quality Improvement System..................... 648
Hospital Reimbursement Rates..................................... 619
In-Patient Care Reimbursements................................... 671
Informal Dispute Resolution for Nursing Homes.................... 679
Information Technology.........................................716, 747
Budget Estimates............................................. 836
Key Agency Initiatives....................................... 838
Issues Affecting Mississippi..................................... 612
Language Analysis:
HMO Loan and Loan Guarantee Fund............................. 805
Medicaid..................................................... 773
Program Management........................................... 726
Lead Screening of Children....................................... 700
Legislation Summary--Program Management.......................... 730
Less Costly Oral Health Care..................................... 697
Low-Income Prescription Drug Assistance........................676, 792
Lung Volume Reduction Surgery.................................... 650
Managed Care:
Options...................................................... 623
Reconsiderations............................................. 744
System....................................................... 653
March 2002 GAO Report............................................ 687
Medicaid:
Amounts Available for Obligation............................. 830
Appropriation Language....................................... 772
Appropriations History Table................................. 827
Authorizing Legislation....................................775, 826
Background of Program........................................ 775
Benefit Services and Growth.................................. 777
Budget Authority by Activity................................. 775
Budget Authority by Object................................... 829
Composition of Population.................................... 780
Distribution of Monies by State.............................. 779
Estimates of Grant Awards (by State)......................... 832
Health Insurance Tax Credit.................................. 793
Impact of Proposed Legislation............................... 789
Language Analysis............................................ 773
Managed Care................................................. 776
Medicaid Requirements........................................ 828
Medical Assistance Payments................................783, 831
Obligations.................................................. 648
Proposed Law................................................. 834
Rationale for Budget Estimate................................ 783
Reform Demonstrations........................................ 781
Reimbursement for Environmental Samples...................... 700
Section 1115 Demonstrations.................................. 781
State and Local Administration............................... 786
State Children's Health Insurance Program.................... 786
State Estimates............................................778, 783
Statutory Authority for Reimbursement........................ 700
Summary of Changes........................................... 825
Survey and Certification..................................... 788
Vaccines for Children Program..............................788, 835
Medicare & Medicaid Administrative Costs......................... 632
Medicare+Choice Plan Departures.................................. 621
Medicare&You Education Program............................717, 742, 858
Funding...................................................... 642
Medicare:
Advertising Campaign......................................... 614
Coverage of Clinical Trials.................................. 655
Education Program..........................................742, 858
Payment Error Rate........................................... 638
Reform and Drug Benefits..................................... 636
Medicare Benefits................................................ 840
Medicare Contractors............................................. 680
Contracting Reform........................................... 616
Oversight.............................................629, 664, 680
Medicare Integrity Program (MIP):
Activities................................................... 851
Contracting Efforts.......................................... 855
Funding...................................................... 854
Medicare Operations.............................................. 714
Appeals...................................................... 737
Appropriation History........................................ 747
Authorizing Legislation...................................... 731
Budget Request............................................... 733
Change in Configuration...................................... 824
Changes Required by Legislation.............................. 741
Claims Processing............................................ 736
Contractor Workload.......................................... 736
Enterprise-Wide Activities................................... 741
Information Technology.....................................740, 747
Inquiries.................................................... 738
Non-Renewals................................................. 740
Ongoning Activities.......................................... 734
Operations................................................... 740
Physician/Supplier Program................................... 739
Program Improvements......................................... 746
Proposed Legislation......................................... 732
Provider Education and Training (PET)........................ 739
Provider Toll-Free Lines..................................... 741
Purpose and Method of Operations............................. 731
Rationale for the Budget Request............................. 734
Summary Table..............................................731, 733
Systems Maintenance.......................................... 739
Systems Transitions.......................................... 740
User Fees.............................................713, 730, 732
MedLearn......................................................... 636
National Medicare&You Education Program....................717,742, 858
National Quality Forum........................................... 661
Nuring Home:
Deficiencies................................................. 644
Informal Dispute Resolution.................................. 679
Initiative Funding........................................... 655
Lawsuits..................................................... 616
Oversight Improvement Program..............................756, 766
Quality Improvement Initiative............................... 661
Variations................................................... 646
Web Site..................................................... 686
Opening Statement:
For the Record............................................... 598
Oral......................................................... 595
Oral Disease in Very Young Children.............................. 684
Oral Health Care, Less Costly.................................... 697
Organ Procurement Organizations.............................. 651
Organization Chart........................................... 704
Ostomy Supplies.............................................. 701
Outreach Efforts............................................. 669
Payments for Mental Illness and Substance Abuse.............. 674
Payments to Health Care Trust Funds:
Amounts Available for Obligation............................. 795
Appropriation Language....................................... 794
Budget Authority by Activity................................. 797
Budget Authority by Activity (Permanent)..................... 804
Budget Authority by Object................................... 801
FY 2001 Crosswalk for Accrued Retirement and Health Benefit
Costs...................................................... 798
FY 2002 Crosswalk for Accrued Retirement and Health Benefit
Costs...................................................... 799
FY 2003 Crosswalk for Accrued Retirement and Health Benefit
Costs...................................................... 800
SMI Premium Estimates........................................ 802
Summary of Changes........................................... 796
Peer Review Organizations........................................ 767
Physician Payments............................................... 677
Physician Reimbursement.......................................... 618
Prescription Drugs............................................... 613
Assistance, Low-Income....................................... 676
Benefit...............................................623, 625, 792
Cost of Benefit.............................................. 626
Coverage..................................................... 675
Volume Discounts............................................. 628
Waivers...................................................... 624
Privacy Regulation.............................................742, 787
Program Improvement Reduction.................................... 643
Program Improvements............................................. 745
Program Evaluations in Fiscal Year 2001.......................... 656
Program Evaluations in Fiscal Year 2002.......................... 660
Program Integrity................................................ 637
Program Management:
Amounts Available for Obligation............................. 810
Appropriation Language....................................... 723
Appropriations History Table................................. 816
Authorizing Legislation...................................... 817
Breakout of Activities....................................... 716
Budget....................................................... 597
Budget Authority by Activity................................. 812
Budget Authority by Object--2 Year........................... 813
Budget Request...................................733, 748, 758, 768
Change in Configuration of Medicare Contractors.............. 824
Detail of Direct Full-Time Equivalent Employment............. 818
Detail of Positions.......................................... 819
FY 2001 Crosswalk for Accrued Retirement and Health Benefit
Costs...................................................... 820
FY 2002 Crosswalk for Accrued Retirement and Health Benefit
Costs...................................................... 821
FY 2003 Crosswalk for Accrued Retirement and Health Benefit
Costs...................................................... 822
FY 2003 PM Request--BBA...................................... 756
Federal Administration....................................... 748
Language Analysis............................................ 726
Legislation Summary (Proposed)............................... 730
Medicare Operations.......................................... 731
Medicare Operations Change in Configuration.................. 824
Medicare Survey and Certification Program.................... 758
Proposed Legislation Summary................................. 730
Research, Demonstrations and Evaluation...................... 768
Salaries and Expenses........................................ 815
Summary of Changes........................................... 811
Summary Table (Current Law).................................. 728
Summary Table (Proposed Law)................................. 729
Voluntary and Involuntary Terminations (Medicare State
Certification)............................................. 823
Proposed Law User Fees.........................................713, 732
Proposed Legislation.................................596, 730, 789, 834
Provider:
Education and Training Program........................640, 739, 853
Reimbursement................................................ 737
Publicity Campaign............................................... 642
Quality Improvement Pilot Program................................ 660
Reduction in Accredited Hospital Recertification................. 646
Reduction of Full-Time Equivalents............................... 647
Reimbursement:
Emergency Room Costs......................................... 670
Environmental Samples........................................ 700
In-Patient Care.............................................. 671
Medicaid, Statutory Authority................................ 700
Provider..................................................... 737
Rates........................................................ 678
Research Coordination Council.................................... 666
Research, Demonstrations, Grants and Evaluations................. 715
Authorizing Legislation...................................... 768
BBA Mandated Research Initiatives............................ 769
Budget Request............................................... 768
Evaluating CMS Programs/New Alternatives..................... 770
Medicare Current Beneficiary Survey.......................... 770
New Freedom Demonstration.................................... 770
Programs..................................................... 689
Purpose and Method of Operations............................. 768
Rationale for Budget Request................................. 768
Summary Table................................................ 768
Rural Reimbursement Rates........................................ 622
Security Needs Assessment........................................ 665
Significant Items:
House Report................................................. 864
Senate Report................................................ 870
Conference Report............................................ 896
Social Security Administration................................... 632
Staffing......................................................... 650
State Certification, Voluntary and Involuntary Terminations...... 823
State Children's Health Insurance Program (SCHIP):
Authorizing Legislation...................................... 860
Background................................................... 860
Enrollment................................................... 861
Funding...............................................757, 791, 862
Recent Legislative Changes................................... 861
Summary Table................................................ 860
State Grant and Demonstration Program............................ 856
State Health Insurance Assistance Program........................ 641
Statutory Authority for Medicaid Reimbursement................... 700
Summary of Changes:
Medicaid..................................................... 825
Payments to Trust Funds...................................... 796
Program Management........................................... 811
Summary Table:
Clinical Laboratory Improvement Amendments................... 842
Federal Administration....................................... 748
Health Care Frauud and Abuse Control......................... 848
Medicare Operations.......................................... 731
Research Demonstration and Evaluation........................ 768
State Children's Health Insurance Program.................... 860
State Grant and Demonstration Program........................ 856
Survey and Certification..................................... 758
Survey and Certification Program...............................645, 715
Authorizing Legislation...................................... 758
Budget Request............................................... 760
Direct Survey Costs.......................................... 760
Funding...................................................... 686
Nursing Home Oversight Improvement Program................... 766
Purpose and Method of Operations............................. 758
Rationale for Budget Request................................. 759
Recertification Level Comparison............................. 761
Summary Table................................................ 758
Support Contracts............................................ 764
Surveys and Complaint Visits................................. 762
System Transitions............................................... 653
Teleconsultation Requests........................................ 655
Telemedicine Funding............................................. 649
Temporary Assistance to Needy Families........................... 663
ThinPrep PAP Test................................................ 698
Ticket to Work/Work Incentives Improvement Act of 1999........... 856
Transititional Low-Income Drug Assistance........................ 625
Treatment of Prostate Cancer..................................... 617
Unprocessable Claims...........................................730, 733
Upper Payment Limit............................................694, 785
User Fees, Medicare Operations............................713, 730, 732
Vaccines for Children Program..................................788, 835
Volume Discounts for Prescription Drugs.......................... 628
Wage Rates....................................................... 621
Waivers and Dental Services...................................... 688
Workforce Planning........................................643, 719, 751
Administration for Children and Families
Adoption Programs................................................ 1127
Child Care:
Child Care.............................1114, 1126, 1141, 1143, 1147
Child Care and Development Block Grants...................... 1133
Child Care Services.......................................... 1109
Early Childhood Development...................................... 1110
Head Start:
Early Learning in Head Start................................. 1111
Head Start...............................................1139, 1146
Head Start Evaluation........................................ 1109
Head Start Goals............................................. 1111
Lasting Effect of Head Start................................. 1112
Faith-Based Programs:
Compassion Programs.......................................... 1137
Faith-Based Programs......................................... 1121
Foster Care...................................................... 1113
Low Income Home Energy Assitance Program.........1120, 1138, 1143, 1145
Office of Refugee and Entrant Assistance......................... 1123
Poverty Rate..................................................... 1131
School Readiness................................................. 1110
Social Services Block Grant...................................... 1144
TANF Block Grant................................................. 1143
Welfare:
Welfare...................................................... 1149
Welfare Reform............................................... 1124
Administration on Aging
Budget.......................................................1982, 1986
Coordination with other Agencies................................. 2003
Elder Abuse...................................................... 1969
Interagency Task Force........................................... 1980
Justification.................................................... 2006
Long-Term Care...............................................1984, 2001
Medication Management............................................ 1971
National Family Caregiver Support Program.......1163, 1968, 1978, 1984,
1992, 2003
Nursing Homes.................................................... 1976
Nutrition Programs.........................1963, 1970, 1978, 1988, 2004
Opening Statement................................................ 1953
Pension Counseling...........................................1970, 1976
Performance Measures............................................. 1977
Physical Activity............................................1965, 1967
Preventive Health................................................ 1965
Program Outreach................................................. 1970
Providing Services............................................... 1973
Regulations...................................................... 1975
Senior in Communities............................................ 1980
Senior Mental Health............................................. 1971
Senior Volunteers................................................ 2004
Training, Research and Discretionary Projects.................... 1992
Volunteers Programs.............................................. 1966
Witnesses........................................................ 1951