[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
 FISCAL YEAR 2012 HHS BUDGET AND THE IMPLEMENTATION OF PUBLIC LAWS 111-
                            148 AND 111-152

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 3, 2011

                               __________

                           Serial No. 112-14


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


                  U.S. GOVERNMENT PRINTING OFFICE
67-590                    WASHINGTON : 2011
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  


                    COMMITTEE ON ENERGY AND COMMERCE

       FRED UPTON, Michigan          HENRY A. WAXMAN, California
              Chairman                 Ranking Member
JOE BARTON, Texas                    JOHN D. DINGELL, Michigan
  Chairman Emeritus                  EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
MARY BONO MACK, California           ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
LEE TERRY, Nebraska                  DIANA DeGETTE, Colorado
MIKE ROGERS, Michigan                LOIS CAPPS, California
SUE WILKINS MYRICK, North Carolina   MICHAEL F. DOYLE, Pennsylvania
  Vice Chair                         JANICE D. SCHAKOWSKY, Illinois
JOHN SULLIVAN, Oklahoma              CHARLES A. GONZALEZ, Texas
TIM MURPHY, Pennsylvania             JAY INSLEE, Washington
MICHAEL C. BURGESS, Texas            TAMMY BALDWIN, Wisconsin
MARSHA BLACKBURN, Tennessee          MIKE ROSS, Arkansas
BRIAN P. BILBRAY, California         ANTHONY D. WEINER, New York
CHARLES F. BASS, New Hampshire       JIM MATHESON, Utah
PHIL GINGREY, Georgia                G.K. BUTTERFIELD, North Carolina
STEVE SCALISE, Louisiana             JOHN BARROW, Georgia
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California         
CATHY McMORRIS RODGERS, Washington   
GREGG HARPER, Mississippi            
LEONARD LANCE, New Jersey            
BILL CASSIDY, Louisiana              
BRETT GUTHRIE, Kentucky              
PETE OLSON, Texas                    
DAVID B. McKINLEY, West Virginia     
CORY GARDNER, Colorado               
MIKE POMPEO, Kansas                  
ADAM KINZINGER, Illinois             
H. MORGAN GRIFFITH, Virginia         

________________________________________________________________

                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
PHIL GINGREY, Georgia                TAMMY BALDWIN, Wisconsin
ROBERT E. LATTA, Ohio                MIKE ROSS, Arkansas
CATHY McMORRIS RODGERS, Washington   ANTHONY D. WEINER, New York
LEONARD LANCE, New Jersey            HENRY A. WAXMAN, California (ex 
BILL CASSIDY, Louisiana                  officio)
BRETT GUTHRIE, Kentucky
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     2
    Prepared statement...........................................     2
Hon. Frank Pallone Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     3
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     4
    Prepared statement...........................................     5
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................   127
Hon. Edolphus Towns, a Representative in Congress from the State 
  of New York, prepared statement................................   128

                               Witnesses

Kathleen Sebelius, Secretary, Department of Health and Human 
  Services.......................................................     8
    Prepared statement...........................................    11
    Answers to submitted questions...............................   145

                           Submitted Material

Letter, undated, from Jay Clary, Acting Associate Commissioner, 
  Office of Labor-Management and Employee Relations, to James E. 
  Marshall, Spokesperson, SSA/AFGE General Committee, submitted 
  by Mr. Waxman..................................................    19
Democratic Staff Memorandum of March 2, 2011, submitted by Mr. 
  Waxman.........................................................    21
``Medicaid Formula: Differences in Funding Ability Among States 
  Often Are Widened,'' GAO report dated July 2003, submitted by 
  Mr. Cassidy....................................................    58
``The Medicaid Commission Report: A Dissent'' by Robert B. Helms 
  of the American Enterprise Institute for Public Policy 
  Research, dated January 2007, submitted by Mr. Cassidy.........   109
Letter of February 11, 2011, from Mr. Burgess to Ms. Sebelius....   125
``Medicaid Long-term Care: The ticking time bomb,'' undated 
  Deloitte Center for Health Solutions report, submitted by Mr. 
  Cassidy........................................................   130


 FISCAL YEAR 2012 HHS BUDGET AND THE IMPLEMENTATION OF PUBLIC LAWS 111-
                            148 AND 111-152

                              ----------                              


                        THURSDAY, MARCH 3, 2011

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:31 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Joseph R. 
Pitts (chairman of the subcommittee) presiding.
    Members present: Pitts, Burgess, Whitfield, Shimkus, 
Murphy, Blackburn, Gingrey, Latta, McMorris Rodgers, Lance, 
Cassidy, Guthrie, Barton, Upton (ex officio), Pallone, Dingell, 
Towns, Engel, Capps, Schakowsky, Gonzalez, Baldwin, Weiner, and 
Waxman (ex officio).
    Also present: Representative Green.
    Staff present: Ryan Long, Chief Counsel; Howard Cohen, 
Chief Counsel; Clay Alspach, Counsel; Marty Dannenfelser, 
Senior Advisor; Julie Goon, Health Policy Advisor; Brenda 
Destro, Professional Staff; Paul Edattel, Professional Staff; 
John O'Shea, Professional Staff; Monica Popp, Professional 
Staff; Heidi Stirrup, Health Policy Coordinator; Jimmy Widmer, 
Health Intern; Alex Yergin, Legislative Clerk; Phil Barnett, 
Democratic Staff Director; Stephen Cha, Democratic Senior 
Professional Staff Member; Alli Corr, Democratic Policy 
Analyst; Tim Gronniger, Democratic Senior Professional Staff 
Member; Purvee Kempf, Democratic Senior Counsel; Karen 
Lightfoot, Democratic Communications Director, and Senior 
Policy Advisor; Karen Nelson, Democratic Deputy Committee Staff 
Director for Health; Rachel Sher, Democratic Senior Counsel; 
and Mitch Smiley, Democratic Assistant Clerk.
    Mr. Pitts. This subcommittee will come to order. In light 
of the interest in hearing from our distinguished witness 
today, and so that every member of this subcommittee may have 
time to answer questions, we will be strict in enforcing our 
time limits today. That is 5 minutes for questioning and that 
is questioning and answers. So don't ask a 5 minute question 
and then ask the Secretary to then try to respond in the 
remaining seconds. And we have agreed to 3 minute opening 
statements. And Chair will recognize himself for an opening 
statement. It is 3 minutes.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. I would like to welcome our distinguished 
witness today, the Honorable Kathleen Sebelius, Secretary of 
the U.S. Department of Health and Human Services. Madame 
Secretary, thank you for your time and your testimony today. 
The Department of Health and Human Services is a large 
department with broad authority and jurisdiction. With the 
enactment of the Patient Protection and Affordable Care Act, 
PPACA, we have found that there are several sections of this 
new law that require mandatory funding, hence bypassing the 
normal appropriations process.
    Today's hearing will give us a chance to examine these 
provisions and consider the budgetary implications for 
implementation and administration of this new law. One aspect 
that I am concerned with is the Office of Consumer Information 
and Insurance Oversight, OCIIO. Less than a month after PPACA 
passed last year, the Department moved regulation of health 
insurance from the Centers for Medicare and Medicaid Services 
where it had been for years to a new office OCIIO which reports 
directly to the Secretary. Then in January of this year, the 
Secretary announced that OCIIO would be moving and would now be 
housed at CMS. This is interesting because OCIIO implements and 
regulates many of the new healthcare's private insurance 
provisions and CMS runs the Nation's public health programs. 
The office has been in the news lately for granting over 900 
waivers to private health plans unable to meet various 
standards set by Obamacare. It is important to note that the 
OCIIO was not authorized nor even mentioned in Obamacare, yet 
the President's budget request includes a $1 billion increase 
for program management discretionary administration at CMS. It 
appears that this additional $1 billion will be funding OCIIO. 
I will be interested in learning more about this new office and 
the role it plays. And I look forward to seeing more 
transparency in the Department's budget. And for my remaining 
time I yield to the gentlelady from Tennessee, Ms. Blackburn.
    [The prepared statement of Mr. Pitts follows:]

               Prepared Statement of Hon. Joseph R. Pitts

    I would like to welcome our distinguished witness today, 
the Honorable Kathleen Sebelius, Secretary of the U.S. 
Department of Health and Human Services. Madame Secretary, 
thank you for your time and testimony.
    The Department of Health and Human Services is a large 
department with broad authority and jurisdiction. With the 
enactment of the Patient Protection and Affordable Care Act 
(PPACA), we have found there are several sections of this new 
law that require mandatory funding - hence, bypassing the 
normal appropriations process.
    Today's hearing will give us a chance to examine these 
provisions and consider the budgetary implications for 
implementation and administration of this new law.
    One aspect I am concerned with is the Office of Consumer 
Information and Insurance Oversight (OCIIO).
    Less than a month after PPACA passed last year, the 
Department moved regulation of health insurance from the 
Centers for Medicare and Medicaid Services (CMS), where it had 
been for years, to a new office, OCIIO, which reports directly 
to the Secretary.
    Then, in January of this year, the Secretary announced that 
OCIIO would be moving and would now be housed at CMS.
    This is interesting because OCIIO implements and regulates 
many of Obamacare's private insurance provisions, and CMS runs 
the Nation's public health programs.
    The Office has been in the news lately for granting over 
900 waivers to private health plans unable to meet various 
standards set by Obamacare.
    It is important to note that the OCIIO was not authorized 
nor even mentioned in Obamacare, yet the President's budget 
request includes a $1billion increase for "program management 
discretionary administration" at CMS. It appears that this 
additional $1 billion dollars will be funding OCIIO.
    I will be interested in learning more about this new Office 
and the role it plays. I look forward to seeing more 
transparency in the Department's budget.
    I yield to the gentlelady from Tennessee, Mrs. Blackburn.
    Thank you.

    Mrs. Blackburn. Thank you, Mr. Chairman, and I do welcome 
the Secretary and I will pick up right where Mr. Chairman left 
off with transparency. And I think what is astounding to many 
is the lack of transparency in this process and the difficulty 
with getting information. We know that our States have fought 
the battle indeed; not only companies, but States are receiving 
waivers. What we see in front of us, Madame Secretary, seems to 
be a confused process. Our States are frustrated. We have heard 
from State Legislators, from Governors--they are all beginning 
to agree with your former colleague Governor Bredesen who 
called this the mother of all unfunded mandates and with others 
who said, you know, it is too expensive to afford and this is 
something that would bankrupt the States. There is just truly a 
dissatisfaction, and one of the things I will highlight with 
you today and question with you is my concern over lack of 
response and in the adequate response to questions. Yield back.
    Mr. Pitts. Chair thanks gentlelady and yields to the 
ranking member, Mr. Pallone, for 3 minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Chairman Pitts, and I want to 
welcome Secretary Sebelius. In these tough economic times I 
recognize how difficult budgetary and spending decisions are 
for the President and this Congress. I commend the President 
for his responsible budget. I only hope that we can work 
together to move this country forward to create jobs and to 
foster economic growth.
    And I want to commend Secretary Sebelius for your agency's 
hard work this past year to implement the Affordable Care Act. 
I will continue to fight against the Republican efforts to 
defund this important landmark law. I can't agree more with 
President Obama that as we continue to work our way out of the 
recession towards a thriving economy that offers economic 
opportunities for all Americans that we must out-innovate, out-
educate, and out-build the rest of the world. And to do that I 
believe the Federal Government has a vital role to play.
    At the core of innovation is research and development. It 
is R&D that propels the science and the business of healthcare. 
In fact, a recent report show that healthcare R&D supports 
211,000 jobs, and $60 billion in economic activity in my State 
of New Jersey. But R&D requires resources. Investments made by 
Government can help research projects get off the ground and 
leverage resources off the private sector and academia. And 
that is why I was very pleased to see that the President's 
budget includes Government investments and healthcare R&D. His 
budget recognizes that key agencies like NIH and FDA are 
essential to facilitate an environment where Americans can 
continue to innovate.
    I did want to mention, however, my disappointment in one 
program. That is the termination of the Children's Hospital 
Graduate Medical Education Program. This has reverse declines 
in pediatric training programs that had threatened the 
stability of the pediatric work force and the small class of 
hospitals that receive this funding which includes the 
Children's Specialized Hospital in my district represents about 
one percent of hospitals nationwide, but trains approximately 
40 percent of all pediatricians. Eliminating this program would 
have a major negative impact on access to primary care and 
impact access to specialty care for children. But--and I wanted 
to mention that I am committed to reauthorizing and funding 
this program and introducing a bill to do that soon.
    But really, I wanted to stress, Madame Secretary, that I 
really do think that as we move forward with the Affordable 
Care Act, I know the anniversary is coming up I believe on 
March 23, just in a couple of weeks. Already, there are so many 
of my constituents and so many people that I talk to that talk 
about the benefits of, you know, eliminating pre-existing 
conditions, of being able to put their children on the 
policies, what we have done for seniors in terms of cutting 
back on and eventually eliminating the doughnut hole, 
eliminating co-pays for preventative care. People are very much 
aware of the benefits of this and more and more, I think, as it 
continues to be implemented will be. And I am very much opposed 
to any efforts to defund the program particularly since we see 
the positive benefits from it. Thank you, Mr. Chairman.
    Mr. Pitts. Thank you. Chair thanks gentleman and yields 3 
minutes to the chair of the committee, Mr. Upton.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Mr. Chairman. Two days ago, we heard 
from the--some of the Nation's Governors on the negative impact 
that the new law will have on their States in quality of 
healthcare. What we heard is similar to what most members 
hear--anytime they speak with their Governor, they express 
their concern that the mandates and requirements coming out of 
D.C. are hindering to deal with the State's problems.
    The President did offer, I think, some flexibility on 
Monday by declaring that the States could opt out of certain 
aspects of the health reform law a few years early as long as 
they met every one of the goals. Well, I am concerned that the 
States will only be allowed to take advantage of the so-called 
flexibility if they construct a program that looks almost 
exactly like the system that was set up in the healthcare law. 
States need real flexibility without all the strings and 
caveats attached.
    The President did call on the Governors to come up with a 
bipartisan proposal on Medicaid. Dozens of Governors have 
already asked for relief from maintenance of effort 
requirements so that they can direct Medicaid funds to those 
most in need and meet their constitutional responsibility to 
balance their State budgets. If States are instead enforced to 
impose steep reductions out of payments to providers, they will 
likely drive more doctors and other providers out of the 
Medicaid program and in some cases out of the practice of 
medicine altogether. I believe that is detrimental to both 
patients and to the quality of care that they can expect to 
receive. If the President wants a bipartisan Medicaid proposal, 
then we need to repeal the maintenance of effort is the place 
to start, and I hope that the Administration will work with 
members of this committee to expeditiously repeal those 
requirements.
    I would also like to hear from the Secretary what programs 
at HHS she believes are redundant and duplicative. With Federal 
deficits as far as the eye can see, $1.6 trillion in the 
President's budget for 2012, we must go through the budget with 
a fine tooth comb. As yesterday's report from the GAO revealed 
that the Subcommittee on Oversight Investigations, the Federal 
Government is wasting tens of billions of dollars on 
duplication, overlap, and fragmented programs. We cannot simply 
fund programs because what we did last year or the year before. 
Every program has to be scrutinized and I look forward to 
working with you, and I yield the balance of my time to Mr. 
Cassidy from Louisiana.
    [The prepared statement of Mr. Upton follows:]

                 Prepared Statement of Hon. Fred Upton

    Thank you, Mr. Chairman, for holding this hearing today. I 
remember back almost two years ago when the Secretary was asked 
to testify on the House health care bill, the Committee was 
told by the Chairman at the time that it would be unfair to ask 
her to testify on the specifics of the bill because she had not 
had time to read it. The House bill was eventually scrapped and 
the Senate bill became law. So this Committee never had an 
opportunity pose questions to the Secretary on the House bill 
or have any type of hearing on the bill that became law.
    Although this hearing should have happened a year and half 
ago, it is important that we hear from the Secretary on her 
Department's efforts to implement the new health law. A quick 
search of the Patient Protection and Affordable Care Act, known 
as PPACA, shows the phrase ``the Secretary shall'' 1,051 times. 
That does not include the additional 24 times that phrase 
appears in the companion Reconciliation bill.
    To be fair, the Secretary will not be making all of these 
determinations. In fact, many of the decisions will be 
delegated to unelected bureaucrats who will now be in charge of 
every facet of our nation's health care system. Regardless, 
Washington will determine what benefits are included in your 
insurance and what benefits you will be forced to pay for. 
Washington will determine if your doctor or hospital provides 
quality care and if in their determination they do not, then 
you may not be able to see them.
    Section 1311 of PPACA actually has a provision that 
provides the Secretary the ability to spend an unlimited amount 
of money purportedly on State exchange grants without the need 
for Congressional approval or oversight. This point needs 
emphasis because it is unprecedented, that Congress would 
provide the Secretary a direct tap on the Treasury that is 
completely at her discretion to determine how much money she 
wants to spend. Americans wanted to keep their quality health 
care but lower the costs. Instead they got Washington control 
and multibillion dollar slush funds.
    The Democrats want the American public to believe this law 
is about ten pages long. They talk about taking care of people 
with pre-existing conditions; they talk about ensuring that 
Americans will not have their insurance taken away when they 
get sick; and they talk about letting young adults up to age 26 
stay on their parents' plan. These are all things Republicans 
have stated a desire to work with the Democrats on. If this was 
the goal of health reform, there would not have been a need for 
secret deals or a year and a half wasted debating the issue. 
Instead, the Democrats tacked on another 2,890 pages filled 
with an unconstitutional mandate, an unsustainable ponzi 
scheme, a thousand ``Secretary shalls,'' two new, massive 
unaffordable entitlement programs, numerous job-destroying 
mandates, and $800 billion in new taxes that will make health 
care more expensive and jobs harder to come by.
    The President has said he doesn't want to relitigate the 
past and I don't either. We could talk about Cornhusker 
kickerbacks and multi-million dollar earmarks that were used to 
get the bill through, but I want to talk about how this law 
will bankrupt our States and our country. I think it is 
important to examine why all independent analysts believe this 
bill will hurt job and wage growth. I want to talk about how 
companies are afraid to invest in new employees because of the 
uncertainty surrounding this law, and I think all Americans 
should understand how this bill will dramatically harm the 
quality of health care in this country. I do not think that is 
relitigating the past;I think we owe the American people an 
open debate about how to preserve this country's future.
    Two days ago we heard from some of the Nation's Governors 
on the negative impact the new law will have on their States 
and the quality of health care. What we heard two days ago is 
similar to what most members hear anytime they speak with the 
Governor of their State. They express their concern that the 
mandates and requirements coming out of Washington are 
hindering their ability to deal with their State's problems.
    The President offered a fig leaf of flexibility on Monday 
by declaring States could opt out of certain aspects of the 
health reform law a few years early as long as they meet every 
one of his goals. This patriarchal perspective is somewhat 
condescending toward the States. In essence, the Administration 
is treating the States like the 16-year-old whose parents offer 
to buy him a new car. Parents tell their teenager they can have 
any car they want - the only catch is that it must meet every 
one of the parents' stringent requirements. Low and behold the 
only car that fits the bill is the family's 15-year-old station 
wagon. So much for choice.
    It sounds a lot like one of the promises that was central 
to PPACA: if you liked your insurance, you could keep it. Once 
Americans read the fine print, they realized you could keep 
your plan if you liked it but only if the Secretary feels it 
meets her requirements. It makes me think there was an 
important caveat to the President's campaign slogan. It seems 
"yes we can" really meant, "yes, we can if and only if 
Washington and its bureaucrats believe it is best for you."
    The President did call on Governors to come up with a 
bipartisan proposal on Medicaid. Dozens of Governors have 
already asked for relief from maintenance of effort 
requirements so that they can direct Medicaid funds to those 
most in need and meet their constitutional responsibility to 
balance their State budgets. If States are instead forced to 
impose steep reductions in payments to providers, they will 
likely drive more doctors and other providers out of the 
Medicaid program and, in some cases, out of the practice of 
medicine altogether. This will be detrimental to patients and 
to the quality of care they can expect to receive. If the 
President wants a bipartisan Medicaid proposal then repealing 
the MoE is the place to start, and I hope the Administration 
will work with members of this committee to expeditiously 
repeal the maintenance-of-effort requirements.
    PPACA established permanent cuts to Medicare providers like 
hospitals in order to create new entitlement programs. During 
the debate many questioned the wisdom of taking hundreds of 
billions of dollars out of the Medicare program while failing 
to address its long-term fiscal issues, not to mention the 
short-term need to find hundreds of billions of dollars to 
reform the Medicare physician payment system to ensure that 
doctors continue to see seniors.
    The president now proposes a two-year physician payment 
fix. I agree that we must fix the Medicare physician payment 
system, but I am deeply disappointed with those that stated 
they supported the same goal but then raided the program to 
establish new entitlements we cannot afford.
    The approaches taken by the Democrats last Congress still 
confound me. Medicaid is bankrupting the States so Congress 
voted to expand it. Medicare cannot pay doctors so they raided 
the program to fund new entitlements. Health care is too 
expensive so they taxed it and increased the cost. Businesses 
are not hiring so they placed more mandates on them to make it 
more difficult to create jobs. All the while they ignored that 
the fact that most American liked their insurance but they 
wanted to find ways to make it less expensive. We can and 
should do better.

    Mr. Cassidy. Governor Duval Patrick testified Tuesday, that 
Massachusetts developed the model for Obamacare and that 
Massachusetts gives a vision of our future. I agree. We were 
told almost everything else he said, though, was false. We were 
told that because of this model that ER visits are down. They 
are not. As it turns out, throughout--significantly according 
to the Urban Institute and 20 percent in western Massachusetts. 
We were told that the private insurance market is unaffected. 
Actually, fewer businesses are offering insurance and premiums 
are up above the national average. We were told that a cost is 
an issue that is being addressed and access is expanding. 
Actually, according to the Globe and the National Journal, 
people are being disenrolled and ``dental benefits are being 
slashed to hundreds of thousands threatening their access to 
their dentist.'' Indeed the Democratic State Treasurer said if 
the United States implements a plan like Massachusetts, we will 
go bankrupt. Now the question before us today is whether we 
believe the vision of which we were told, or the vision that we 
see. I yield back.
    Mr. Pitts. The Chair thanks the gentleman. Yields 3 minutes 
to the ranking chair of the committee, Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Madame Secretary, it is a pleasure to welcome 
you back to our committee. First, I want to commend you on the 
work you are doing to implement the Affordable Care Act. That 
is the name of the law. The job you were given by Congress and 
the President is imposing but you have met it with leadership 
and steadfast commitment. Today's hearing is meant to address 
the President's budget proposal for HHS for fiscal year 2012. 
You wouldn't know it from the opening statements. But fiscal 
year 2012 seems very far away at this point. I am much more 
focused on the threats from the continuing resolution passed by 
the House. I believe the cuts proposed by the Republican budget 
would be just devastating to the mission of your department. 
The Republican proposal would cut 23 percent from the Centers 
for Medicare and Medicaid services. Well, this will devastate 
the ability of the agency to maintain its basic functions like 
paying Medicare claims, cracking down on fraud, and funding 
health programs through Medicaid and the Children's Health 
Insurance Program.
    The FDA would see cuts of 17 percent with enforcement of 
the new food safety law gutted. The Centers for Disease Control 
would be cut by 37 percent leaving Americans more exposed to 
viruses and illnesses. The Community Health Centers Program 
which has strong bipartisan support would be cut by $1 billion 
closing 127 health centers and cutting off 11 million patients 
from care they need. Cuts of this magnitude are not belt 
tightening or doing more with less. They go to the heart of the 
core mission of the agencies that comprise HHS, jeopardize 
access to healthcare, research, and the safety of our food and 
pharmaceuticals. I agree with President Obama's guidance to us 
yesterday in discussing a final CR for this fiscal year. 
Disagreements should be bipartisan. They should be free of any 
party's social or political agenda, and it should be reached 
without delay. Thank you, Madame Secretary, for being here 
today and I urge you to continue to work diligently to 
implement the essential protections of the Affordable Care Act. 
And I would be pleased to yield to any of my colleagues on the 
Democratic side. Mr. Engel, I yield to you the rest of my time.
    Mr. Engel. Yes, I want to second what Mr. Waxman has just 
said. When we look at the Republican budget we see things cut 
out that are really just unimaginable. You know, we heard the 
Governors and I know, Madame Secretary, you are a former 
Governor. We heard the Republican Governors come here and 
basically say they don't like the healthcare law. They want 
Government to get out of people's lives. You know if Governor 
Barbour is happy with Mississippi always being 49th and 50th in 
education and healthcare, then I suppose he will be happy with 
it. But some of us do feel that healthcare, affordable 
healthcare is a right and that is what we tried to do. And the 
negativity boggles my mind.
    Mr. Pitts. Chair thanks the gentleman and at this time will 
go to our witness. I would like to introduce our witness, the 
Secretary of Health and Human Services, Kathleen Sebelius. 
Secretary Sebelius was first elected to the Kansas House of 
Representatives in 1986. In 1994, Secretary Sebelius was 
elected State Insurance Commissioner for the State of Kansas 
and in 2002, she was elected to be the State's Governor. Madame 
Secretary, we welcome you to the committee. We look forward to 
your testimony.

STATEMENT OF KATHLEEN SEBELIUS, SECRETARY, DEPARTMENT OF HEALTH 
                       AND HUMAN SERVICES

    Ms. Sebelius. Thank you very much, Chairman Pitts, Ranking 
Member Pallone, and members of the committee. Thank you for 
inviting me here today to discuss the 2012 budget for the 
Department of Health and Human Services.
    In the President's State of the Union Address, he outlined 
his vision for how the United States can win the future by out-
educating, out-building, and out-innovating the world so we can 
give every family and business the chance to thrive. And I 
think our 2012 budget is a blueprint for putting a portion of 
that vision into action. It makes investments for the future so 
that we grow our economy and create jobs.
    But we also recognize that we can't build lasting 
prosperity on a mountain of debt. Years of deficits have put us 
in a position where we need to make tough choices. In order to 
invest for the future we need to live within our means. So in 
developing the budget we looked closely at every program in our 
department, and when we found waste we cut it. And when 
programs weren't working well we redesigned them to put a new 
focus on results. And in some cases we cut programs we wouldn't 
have cut in better fiscal times. And I look forward to 
answering your questions, but Mr. Chairman, I would like to 
start with just sharing some highlights.
    Over the last 11 months we have worked around the clock 
with our partners in Congress and States to deliver on the 
promise of the Affordable Care Act. Thanks to the law, children 
are no longer denied coverage because of their preexisting 
health conditions. Families have protections in the new 
Patient's Bill of Rights. Businesses are getting relief from 
the soaring healthcare costs and seniors have lower cost access 
to prescription drugs and preventive care.
    This budget builds on the progress by supporting innovative 
new models of care that will improve patient's safety and 
quality while reducing the rising burden of health costs on 
families, businesses, cities, and States. We make new 
investments in our healthcare workforce and community health 
centers to make quality affordable care available to millions 
more Americans, and create hundreds of thousands of new jobs 
across the country.
    At the same time the budget includes additional proposals 
that strengthen program integrity in Medicare, promote lower 
medicine costs, improve Medicare program operations, and reform 
the quality improvement organizations which help providers 
improve care. The budget also includes saving proposals to 
strengthen Medicaid. It includes funding for the Transitional 
Medical Assistants Program and Medicare Part B premium 
assistance for low income beneficiaries, programs which help 
keep health costs down for low income individuals and help them 
keep their vital coverage.
    To make sure America continues to lead the world in 
innovation, our budget includes funding increases for the 
National Institutes of Health. New frontiers of research like 
cell-based therapies and genomics have the promise to unlock 
transformative treatments and cures for diseases ranging from 
Alzheimer's to cancer to autism. And our budget will allow the 
world's leading scientists to continue to pursue discoveries 
while keeping America at the forefront of biomedical research. 
And because we know there is nothing more important to our 
future than the healthy development of our children, our budget 
includes significant increases in funding for childcare and 
Head Start.
    Science shows that success in school is significantly 
enhanced by high quality, early learning opportunities. These 
investments are some of the wisest that we can make in our 
future. But our budget does more than provide additional 
resources. It also aims to raise the bar on quality in 
childcare programs supporting key reforms to transform the 
Nation's childcare system into one that fosters healthy 
development and gets children ready for school; proposes a new 
early learning challenge fund, a partnership with the 
Department of Education that promotes State innovation in early 
education; and these initiatives combined with the quality 
efforts already underway in Head Start are an important part of 
the President's education agenda to help every child reach his 
or her academic potential and make our Nation more competitive.
    The budget also promotes strong family relationships. It 
supports a child-support-and-fatherhood initiative that 
encourages fathers to take responsibility for their children; 
changes policies so that more of that support reaches the 
children; and maintains a commitment to vigorous enforcement 
promoting healthy relationships between fathers and their 
children. We also fund new performance driven incentives for 
States to improve outcomes for children in foster care such as 
reducing long term foster stays and the reoccurrence of child 
maltreatment. These children also need to be part of our better 
future.
    Our budget recognizes that at a time when so many Americans 
are making every dollar count, we need to do the same. That is 
why the budget provides new support for President Obama's 
unprecedented push to stamp out waste, fraud, and abuse in our 
healthcare system, an effort that more than pays for itself 
returning a record of $4 billion to taxpayers last year alone. 
In addition the budget includes a robust package of 
administrative improvements for Medicare and Medicaid. The 
proposals include prepayment scrutiny, expanded auditing, 
increased penalties for improper actions, and strengthens CMS's 
ability to implement corrective actions and address State 
activities that increase Federal spending. Over 10 years on a 
conservative estimate they should deliver over $32 billion in 
savings.
    Across our department we have made eliminating waste, 
fraud, and abuse a top priority but we know that isn't enough. 
So over the last few months we have also gone through the 
Department's budget, program by program, to find additional 
savings and opportunities where we can make our resources go 
further.
    In 2009, Congress created a grant program to help States 
expand healthcare coverage and we have eliminated that program 
because it is duplicative. CDC funding has been helping States 
reduce chronic diseases but the funding was split between 
different diseases: one grant for heart disease, another for 
diabetes. We thought it didn't make sense since a lot of those 
conditions have the same risk factors like obesity and smoking. 
And now States will get one comprehensive grant that allows 
them more flexibility to address chronic disease in their home 
territories more effectively.
    The 2012 budget we are releasing today makes tough choices 
and smart targeted investments today so we have a stronger, 
healthy and more competitive America tomorrow. That is what it 
will take to win the future and that is what we are determined 
to do. So thank you, Mr. Chairman. I will look forward to 
answering your questions.
    [The prepared statement of Ms. Sebelius follows:]

    [GRAPHIC] [TIFF OMITTED] T7590.001
    
    [GRAPHIC] [TIFF OMITTED] T7590.002
    
    Mr. Pitts. Chair thanks the gentlelady and recognizes 
himself for 5 minutes for questions. Madame Secretary, Section 
4002 of the PPACA created a fund to provide funding for 
programs authorized by the Public Health Service Act for 
prevention, wellness, and public health activities. From the 
period fiscal year 2012 to fiscal year 2021, there will be 
$17.75 billion deposited in fund. My question is who has the 
authority to determine how these funds are spent?
    Ms. Sebelius. Mr. Chairman, our department in consultation 
with Congress we--presents a spending plan for the prevention 
fund a year at a time.
    Mr. Pitts. Follow-up on that. Are you authorized to spend 
this money without any further Congressional action?
    Ms. Sebelius. Yes, we are.
    Mr. Pitts. Are you authorized to add funds to a program 
above and beyond what Congress appropriated for that program in 
a given year?
    Ms. Sebelius. Yes, yes, sir.
    Mr. Pitts. Madame Secretary, like most States nationally, 
my State is struggling with a major projected shortfall in its 
coming budget. The maintenance of effort provision in PPACA for 
the Medicaid program is removing a major lever for them to 
consider as they try to balance the budget. Can you give me a 
yes or no answer as to whether there will be an opportunity to 
waive that provision to help Pennsylvania and other States 
close their budget holes?
    Ms. Sebelius. Mr. Chairman, the question doesn't lend 
itself to yes or no. We are--have the ability to grant 1115 
waivers to States that improve the Medicaid Program and we are 
working very actively with Governors across the country. I have 
met with all the new Governors. We have been in 19 States so 
far. We are working a budget at a time to look at the 
flexibility that Governors are requesting.
    Mr. Pitts. Given that the Supreme Court will be looking at 
this new law in the coming months or years, we as a Congress 
have to prepare for the possibility that a portion of PPACA 
might be invalidated while other parts remain. If the 
individual mandate were set aside and the remaining portions of 
the bill were left intact, what would be the impact in the 
total number of uninsured and assuming that number would grow 
would the administration seek to find a new way to cover these 
folks through Medicaid?
    Ms. Sebelius. Well, Mr. Chairman, we are confident that the 
personal responsibility portion will be upheld. There are 12 
judges who have dismissed cases so far: three Federal judges 
including one as recently as last week who have held the entire 
law constitutional; one Judge in Virginia who found a portion, 
the individual responsibility portion, unconstitutional, but 
declared it severable and refused to grant an injunction; and a 
Florida judge who has ruled another way. So our team is 
confident at the end of the day that the law will be held 
constitutional. We are looking at a variety of options and 
those were examined as the Affordable Care Act was being 
considered about the best way--if you eliminate preexisting 
conditions to make sure that you have a stable and secure 
insurance pool--as you know the personal responsibility section 
actually came from the insurance industry, from the American 
Association of Health Insurance Plans who felt that the way to 
have a solvent pool in an insurance market is to make sure that 
you can balance the risk. And that proposal really comes from 
the insurance industry.
    Mr. Pitts. If you could give me a yes or no--will you 
approve of Medicaid Block Grant Program?
    Ms. Sebelius. Mr. Chairman, there isn't a block grant 
program that is being suggested at this point. But I know that 
there is some interest in that. I can't tell you what the 
parameters might be. I think a block grant has the real danger 
of shifting enormous burdens onto already strapped States.
    Mr. Pitts. Thank you. I will yield the balance of my time 
to Dr. Cassidy.
    Mr. Cassidy. Thank you, Ms. Secretary. One of my concerns 
is how the State Medicaid budgets are going to be supplemented. 
Mr. Waxman the other day spoke about currently there appear to 
be discrepancies how much a State should get and how much they 
do get. Frankly, his State, California, suffers under this. It 
is important because Jonathan Gruber, I think one of your 
consultants published an article that says in his State about 
1.7 million people will be added to Medicaid, so--under this 
plan--so it is going to stress it further. Do you see concerns 
with how the current FMAP, SMAP is constructed equity issues 
regarding States? I say that because Vermont, although a lower 
FMAP, gets about $7,500 permanent resident beneficiary and 
Mississippi gets--with a higher FMAP, about $3,000 per 
beneficiary. Any thoughts about that?
    Ms. Sebelius. Well, I know there are constant concerns 
about the formula that is the allocation formula for FMAP. 
Mississippi actually has the highest match rate of any State.
    Mr. Cassidy. But they only get $3,000 from the Federal 
Government. So they have an 83 percent FMAP, but they only get 
$3,000 per beneficiary.
    Ms. Sebelius. And I won't dispute that. I don't know the 
numbers. I do know they have the highest FMAP rate in the 
country. I think that there is a constant analysis of changing 
demographics, changing populations. I know in your State of 
Louisiana it became an issue after Katrina in New Orleans and 
the changing demographics of that city changed dramatically 
their share of the Federal budget. So there have been concerns 
over the past and we would work with Congress to look at 
updating the FMAP on a regular basis.
    Mr. Pitts. My time is expired. Yield 5 minutes to the 
Ranking Member, Mr. Pallone.
    Mr. Pallone. Thank you, Mr. Chairman. I would mention to 
you that if you would entertain the possibility of upping F map 
or doing more with F map I would be glad to oblige. Just so you 
had any doubt about where I stand on that issue--would be more 
than willing to do another F map bill and increase the F map 
funding.
    I wanted to ask about innovation, Madame Secretary. 
America's competitiveness depends on our ability to innovate 
and keep America number one but instead the Republicans 
included over a billion dollars in cuts to NIH and over 240 
million to the Food and Drug Administration in their 2011 CR, 
and I believe this represents a significant setback because key 
agencies like NIH and FDA are essential to facilitating an 
environment where Americans can continue to innovate. For 
instance, at a medical device hearing last week we heard about 
CDRH's newly announced medical device innovation initiative and 
this is a new Voluntary Priority Review Program by FDA for new 
breakthrough medical devices to help innovator companies bring 
their products to market. But in the cuts, if the cuts in the 
Republican's CR are enacted, FDA did not think they would have 
the funds to implement this initiative. And this is just an 
example of the dangerous impacts we would see if FDA's budget 
is cut by over $240 million. So Madame Secretary, I believe a 
cut of 17 percent will slow the approvals for devices, drugs, 
and other innovative products, isn't that correct? I mean, 
isn't that what we are going to face with the FDA if this CR 
becomes law?
    Ms. Sebelius. Well I think, Congressman, the President 
shares your belief that investments in both the Food and Drug 
Administration and in the National Institutes of Health are 
wise and strategic investments for the safety and security of 
our food supply, and our acceleration of devices and drugs 
getting to the market, and to keep America at the forefront of 
the biomedical industry which we have been for decades. So he 
has made recommendations about investments, enhancements to 
both the National Institutes of Health budget and for the Food 
and Drug Administration and believes strongly that that is 
really keeping a commitment with the--not only the American 
public, but growing jobs in the economy that we desperately 
need. And that the failure to fund those agencies to the full 
extent both jeopardize some of the important responsibilities 
they have as well as threaten--I think the last detail I saw 
from Dr. Collins at NIH is that for every dollar in research 
grants, seven dollars is generated in a local community. So 
that it has an enormous ripple effect when research grants are 
put out in university communities across this country as well 
as the life saving cure possibility that results.
    Mr. Pallone. And I mean, the same is true--I mean, the CR 
with the NIH, the CR proposes over a billion dollars in cuts to 
the NIH budget. For innovation the CR is worse. It appears the 
majority of the cuts will come out of the small percent of the 
budget for new NIH grants--about 640 million from the budget of 
3.9 billion. That would mean thousands of fewer NIH awards this 
year. Again, I mean, the cut to the NIH would be devastating on 
the cutting-edge research into new cures and treatments for 
diseases. If you would just comment on that briefly, because 
then I do want to ask about the Children's Graduate Medical 
Education.
    Ms. Sebelius. Well, as you know, Congressman, the NIH 
budget had a dramatic increase in funding thanks to the 
investment in the Recovery Act, feeling that scientific 
investment was a major innovation effort for the United States. 
So they are already struggling with that grant funding which is 
coming to an end. And I can tell you it will have a very 
chilling impact on research grants across this country if 
indeed the NIH budget is not adequately funded in 2012.
    Mr. Pallone. All right, let me ask you this about the 
Children's Graduate Medical Education because the President has 
budget zeroed that out. In my home State of New Jersey, we have 
the highest rate of autism in the country, one in 94 children. 
In my district, Children Specialized Hospital provides services 
to children with disabilities and clinical services to like 
4,000 kids. My concern is that you know we have very few 
subspecialties in pediatrics right now and in the budget, the 
President's budget, it basically justifies zeroing it out by 
saying that they want to focus on primary care. But we actually 
need more subspecialists, not you know more so by every, you 
know, physician's group. So how do you justify that? I mean, it 
seems to not make sense to me.
    Ms. Sebelius. Well, I would say, Mr. Chairman, I--your 
concern about this program we have heard from a number of 
people and I can assure you in any different budget time this 
would not have been one of the recommendations. The goal was to 
try and focus as many GME dollars as possible into the work 
force for primary care, gerontology, and to put it into the 
programs where the vast majority is training primary care 
doctors. But this trade-off is very difficult.
    Mr. Pallone. OK. Thank you, Madame Secretary. Thank you, 
Mr. Chairman.
    Mr. Pitts. Gentleman's time has expired. Recognizes the 
chairman of the full committee, Mr. Upton, for 5 minutes.
    Mr. Upton. Thank you, Mr. Chairman. I want to just start 
off initially by following up on a question that you asked 
regarding the maintenance of effort. Now, the President said 
earlier this week that if the States could present a bipartisan 
proposal on Medicaid that he would like to support it and if 
there is broad bipartisan support to repeal the maintenance of 
effort, would that be something that you would like to work 
with us on to see it happen?
    Ms. Sebelius. Well, the President has directed me, Chairman 
Upton, to work with the Governors around this proposal, so I 
will be very actively involved. And he is eager to see their 
ideas. I think what we are eager to do and have pointed out to 
a number of Governors is the focus of the--a lot of the cost 
drivers is the so-called dual-eligible, which is why at--
Congress was wise enough to include a new office of dual-
eligibles as part of the Affordable Care Act structure. It is 
about 15 percent of the population of Medicaid beneficiaries 
and over close to 40 percent of the cost nationwide. So we are 
really eager to work on those issues.
    Mr. Upton. Now, I know that the President--this happened 
earlier this week so there has not been a lot of time, but have 
you identified a subset of Republican and Democratic Governors 
that will be the lead that you are going to work with yet?
    Ms. Sebelius. That is not--believe me, I am very 
deferential to my former colleagues.
    Mr. Upton. I know you are.
    Ms. Sebelius. The National Governors Association, Governor 
Gregoire chairs it and Governor Heineman from Nebraska is the 
vice chair this year. They have been asked to put together a 
Governor's group.
    Mr. Upton. OK. Let me ask you. In your testimony you 
discussed the State-based health insurance exchanges that were 
created by the new law. As noted in your budget you are 
provided a mandatory appropriation, not simply an authorization 
of such sums as necessary to issue grants to States. Is there 
any monetary limitations to the grant making authority?
    Ms. Sebelius. No, sir.
    Mr. Upton. The----
    Ms. Sebelius. With the exception that the exchanges have a 
series of legal parameters that have to be met in order to draw 
down funds.
    Mr. Upton. Under Section 1311H, it authorizes your 
department to force doctors, hospitals, and other providers to 
meet new quality requirements or face expulsion from 
contracting with any qualified health plans offered in the 
exchange. Has HHS started to draft any regulations yet on 
that--those provisions that you are aware of?
    Ms. Sebelius. Mr. Chairman, I am not aware of any mandatory 
provider provisions or expulsion. I will be glad to answer that 
question in writing. I don't--I am not familiar with the 
section that you are speaking of off the top of my head----
    Mr. Upton. OK.
    Ms. Sebelius. I am sorry.
    Mr. Upton. Before the House Budget Committee two weeks ago, 
I want to say a Richard Foster CMS was asked about two of the 
main claims that the supporters of PPACA talked about. First he 
was asked about whether the claim that the law would hold down 
cost--whether it was true or false. He said false more so than 
true. And second, he was asked whether Americans, whether they 
could keep their health care plans if they like them and he 
indicated that it was not true in all cases. So those are his 
words. Do you agree or disagree with some of the things that he 
said?
    Ms. Sebelius. Mr. Chairman, I have read Mr. Foster's 
testimony and I think that what he has indicated is that he 
does not feel it is likely that Congress follow the outlines of 
the law. I--if indeed the law has changed there will be a 
different result. We believe the Congressional Budget Office 
analysis that--which was updated just I think 10 days ago--that 
$230 billion would be saved over the next 10 years and a 
trillion dollars over the two decades is an accurate 
assessment. If indeed the laws change there needs to be a 
different assessment.
    Mr. Upton. Last question I have is regarding the 
grandfather status on the healthcare plans. By some estimates 
provided in your department's rule anywhere between 87 million 
and 117 million Americans will not be able to keep their 
healthcare plan. Does the Administration continue to claim that 
the healthcare law will in fact allow their plan--allow 
Americans to keep their plan if they like it?
    Ms. Sebelius. Mr. Chairman, the law is built around the 
private insurance market and as you know employers voluntarily 
enter that market and make decisions a year at a time on plan 
design, on provider issues, on network issues. The grandfather 
clause is designed to make sure that as much as possible, 
without shifting major financial burdens onto consumers or 
dramatically changing benefits, that plans can indeed keep 
exactly the plan moving forward, making adjustments in premiums 
as they go along. But nothing precludes what has been part of a 
dynamic market in the private sector all along which is that 
employers choose year in and year out, moving in and out of a 
marketplace.
    Mr. Pitts. The gentleman's time has expired. Chair 
recognizes the Ranking Member of the Full Committee, Mr. 
Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman. Madame Secretary, as I 
mentioned in my opening statement I am deeply concerned about 
the cuts proposed by the Republicans for the remaining seven 
months of this fiscal year and their continuing resolution H.R. 
1. I have a letter, Mr. Chairman, I would like to insert in the 
record by unanimous consent from the Social Security 
Administration to its employees.
    Mr. Pitts. Without objection, so ordered.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7590.003
    
    Mr. Waxman. This letter states that the Social Security 
Administration may have to initiate furloughs if the budget 
cuts being considered by the House become law. Why would that 
matter to Medicare, Madame Secretary?
    Ms. Sebelius. That the Social Security Administration?
    Mr. Waxman. Right, well the Social Security Administration 
processes the new enrollments into Medicare. Furloughs at the 
Social Security Administration would lead to backlogs in 
processing new enrollment and gaps in coverage for nearly half 
a million new Medicare beneficiaries. So that should be of 
concern not just for Social Security, but for the Medicare 
Program.
    Ms. Sebelius. Well, and Mr. Waxman, as you know the first 
of the baby boomers became Medicare eligible so we are seeing 
an expanded Medicare beneficiary class this year and every year 
of the immediate future. So enrolling people in a timely and 
accurate fashion is hugely important.
    Mr. Waxman. So that would really bop the baby boomers who 
are becoming Medicare----
    Ms. Sebelius. 2011 is the first baby boomer Medicare-
eligible class.
    Mr. Waxman. Mr. Chairman, I have an analysis from the 
Democratic Staff that I would like to ask for unanimous consent 
to insert into the record.
    Mr. Pitts. Without objection, so ordered.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7590.004
    
    [GRAPHIC] [TIFF OMITTED] T7590.005
    
    [GRAPHIC] [TIFF OMITTED] T7590.006
    
    [GRAPHIC] [TIFF OMITTED] T7590.007
    
    [GRAPHIC] [TIFF OMITTED] T7590.008
    
    [GRAPHIC] [TIFF OMITTED] T7590.009
    
    [GRAPHIC] [TIFF OMITTED] T7590.010
    
    [GRAPHIC] [TIFF OMITTED] T7590.011
    
    [GRAPHIC] [TIFF OMITTED] T7590.012
    
    [GRAPHIC] [TIFF OMITTED] T7590.013
    
    Mr. Waxman. This memo documents the size of the cuts 
proposed by the Republicans--funding for CMS, the agency that 
runs the Medicare, Medicaid, and the Children's Health 
Insurance Program by 23 percent once you consider the fact that 
the year is almost halfway finished. This is not a little 
haircut or matter of finding some efficiencies. That kind of a 
cut could prevent CMS from performing its core duties, paying 
for the healthcare needs of seniors, persons with disabilities, 
mothers, and kids in Medicare, Medicaid, and CHIP. Madame 
Secretary, would you be concerned about the impact on Medicare 
beneficiaries of a proposed 23 percent cut combined with delays 
in processing the new enrollments?
    Ms. Sebelius. Mr. Chair--I mean, yes, Congressman. It would 
be very difficult to continue the services to the American 
people. As you know, the administrative costs for Medicare in 
the budget year 2010 included no Affordable Care Act 
implementation because there was no Affordable Care Act. So 
what we are talking about is an enormous reduction in the 
overall ability to administer Medicare, Medicaid, the 
Children's Insurance Program at a time when there are 
significantly more beneficiaries in each of those programs 
around the country.
    Mr. Waxman. And it is not limited to CMS across your 
department. Vital public health, vital public safety functions 
would be jeopardized. For instance, FDA would be cut and face 
an effective cut of 17 percent for the remainder of this year. 
Wouldn't this be a cut of that--wouldn't a cut of this 
magnitude seriously undermine FDA's responsibilities to rapidly 
identify and respond to food related health threats and its 
mission to protect patients from faulty or substandard drugs or 
devices?
    Ms. Sebelius. Well Congressman, the President has 
recommended about a 31 percent increase in the Food and Drug 
Administration because of the new responsibilities with the 
Historic Food Safety Act and public initiatives.
    Mr. Waxman. But he didn't anticipate this kind of a cut in 
this year. He was proposing more----
    Ms. Sebelius. No, sir.
    Mr. Waxman [continuing]. Money for next year. The 
Republicans are proposing to cut a billion dollars in funding 
to the community health centers as part of a shocking nearly 50 
percent reduction for programs administered by the Health 
Resources and Services Administration, HRSA. That cut to health 
centers could result in the closure--no, would result in the 
closure of 127 health centers and countless layoffs. Wouldn't 
that jeopardize access to patient care?
    Ms. Sebelius. Well, community health centers have long been 
a bipartisan effort to build a public health infrastructure 
delivering low-cost, high-quality preventive care around the 
country, and that would seriously impact people's health 
services.
    Mr. Waxman. And for my last question about Medicaid, every 
State has a different Medicaid Program. There is flexibility 
already in that program. At Tuesday's hearing Governor Barbour 
and Herbert asserted the need for total flexibility. Governor 
Barbour said the problem is Federal regulations don't allow 
for--allow a provider to deny services to an individual on the 
basis of the individual's ability to pay. In addition, no cost 
sharing measures can be imposed on many Medicaid enrollees 
including children. Madame Secretary, can you talk about the 
flexibility that is already in the system and how that is 
balanced against the minimal levels of beneficiary and provider 
protections with regard to cost sharing access to providers and 
more?
    Ms. Sebelius. The Medicaid Program as you say is a Federal/
State partnership and the program does look different in States 
around the country. The program already has enormous 
flexibility in the Affordable Care Act gives even more 
significant flexibility designing benefit packages, designing 
for some of the upper income beneficiaries cost sharing, making 
sure that optional services in some States are part of the 
package and other States they are not. So there is a wide 
variety of program designs. Some are entirely in managed care. 
Others are not. We are working actively--as you know, the 
Nation has a host of brand-new Governors and working actively 
with each of those States to not only give them a snapshot of 
what their program looks like but also the strategies that have 
been implemented in other parts of the country that have been 
very effective in delivering care and saving costs.
    Mr. Pitts. Thank you. The gentleman's time is expired and 
will yield 5 minutes to the vice chairman of the committee, Dr. 
Burgess.
    Mr. Burgess. Thank you, Mr. Chairman. And I don't want to 
take up too much time, but I would just point out to the 
Ranking Member of the Full Committee that the Democrats did 
have an entire year with which to come up with their budget and 
their appropriations. And it is only because they failed to do 
their work that we are doing the CR right now. Let me direct 
your attention once again----
    Mr. Pallone. The House asked that the Senate and public had 
stopped it----
    Mr. Burgess. I know Chairman gets--the time--reclaiming my 
time. Chairman Pitts referenced Judge Vinson's ruling in 
Florida from earlier in February and I sent you a letter on 
February 10 asking you about the implementation plans of HHS to 
which I have not yet received an answer. My concern is Judge 
Vinson in his ruling said that a declaratory judgment is the 
functional equivalent of an injunction and he went on to say 
that officials of the executive branch will adhere to the law 
as declared by the court.
    As a result the declaratory judgment is a functionally 
equivalent--a declaratory judgment is the functional equivalent 
of an injunction. There is no reason to conclude that this 
presumption should not apply here. You apparently feel 
differently and we heard from our Governors earlier this week 
that they are in fact feel like they are on--I think Governor 
Herbert said shifting sands. You feel that ultimately the 
individual mandate will be upheld as constitutional by the 
Supreme Court. Judge Vinson felt otherwise. We are in a period 
where I wish we could accelerate or expedite the Supreme Court, 
but apparently I don't get my wish.
    The Supreme Court will likely rule in June 2012 and that is 
a long time for the States to look at this and wonder which 
direction do we go. You could certainly provide some guidance 
and some help by saying you know we are going to look seriously 
at what Dr.--at what Judge Vinson said. So I still await a 
response from your letter but could you briefly give me some 
comfort that you are going to comply with the judge's order?
    Ms. Sebelius. Congressman, I think it is far from clear 
what Judge Vinson's order indicates, so the Justice Department 
has gone back to the judge to ask him for a clarification of 
his order that----
    Mr. Burgess. Yes, reclaiming my time. Again, I think he 
stated it as clearly as he could. He is going to restate that 
and I look forward to his decision as well. But honestly, the 
decision of a member of the executive branch not to adhere to 
the directive of the court is--I think troubling.
    Ms. Sebelius. He did not file an injunction, as you know, 
which is the standard procedure if we have asked him----
    Mr. Burgess. But attorneys----
    Ms. Sebelius [continuing]. To clarify and look forward to 
his----
    Mr. Burgess. But Governors all across this country right 
now including my State of Texas and I know Attorney General 
Greg Abbott is very concerned about what do--you know, what do 
we do now because we don't know. Let me----
    Ms. Sebelius. But there isn't anything now that is being 
done with the individual responsibility portion.
    Mr. Burgess. Well, I look forward to your written response 
to the letter I sent you a month ago and I hope that you will 
provide that for us.
    Ms. Sebelius. We will.
    Mr. Burgess. We heard some of the questions have already 
centered around some of the issues of mandatory funding within 
the law that was signed last year and I am particularly 
concerned about Section 4101 both A and B. 4101A provides 
mandatory spending for the construction and only the 
construction of school clinics. 4101B creates new discretionary 
funding for paying the doctor and nurses who are going to work 
in those school clinics. So I guess the question is why is the 
construction mandatory and paying the staff discretionary?
    Ms. Sebelius. That is the way the bill was constructed by 
members of Congress.
    Mr. Burgess. By members of the Senate Finance Committee 
Staff. And to take up where Chairman Upton was talking just a 
moment ago I would draw your attention in the law to Section 
1311. It is on page 79, 78 of my copy of the law where under 
Enhancing Patient Safety beginning on January 1, 2015, a 
qualified health plan may contract with part B, a healthcare 
provider only if such provider implements such mechanisms to 
improve healthcare quality as the Secretary may by regulation 
require. I mean that is pretty specific, too. So where are you 
going with this? What have you directed your staff to look at? 
I mean again, providers all over the country are asking me what 
does this mean for us. Well, again, perhaps I could get that 
response in writing.
    Ms. Sebelius. I am----
    Mr. Burgess. But you know I think--look, we switched sides 
here in January and the reason we switched sides was because of 
this law. It is precisely because of this type of language in 
this law that the American people looked at this and rejected 
the notion of what was forced upon them last year. There is 
unprecedented power now that goes to your office, unprecedented 
spending that goes to your office. These are decisions that are 
made exclusively by the Secretary of Health and Human Services. 
At no other time in our history has so much power gone to one 
Federal agency. Can you understand why the American people are 
understandably concerned by what has happened to them?
    Ms. Sebelius. Congressman, I think that the American public 
should be alarmed if we are paying taxpayer dollars to any 
provider or a hospital bed of over 50 which doesn't have a 
quality system in play. I----
    Mr. Burgess. But quality determined by the Secretary. 
Quality determined by the Secretary and no other--no right of 
appeal, no secondary motion may be made--only by the Secretary. 
That is what is affecting----
    Ms. Sebelius. It would be in the CMS guidelines in terms of 
payments for Medicare, payments that, when that rule is 
promulgated, there will be plenty of public input. But again, I 
think it would be alarming if we paid taxpayer dollars without 
the quality measurement.
    Mr. Burgess. May I just add, the 10 rules have gone without 
public comment. Ten rules have gone into action.
    Mr. Pitts. Gentleman's time is expired. Yield 5 minutes to 
the Ranking Member Emeritus, Mr. Dingell.
    Mr. Dingell. Thank you for you courtesy. Welcome Madame 
Secretary. It is a pleasure to see you here.
    Ms. Sebelius. Sir.
    Mr. Dingell. Your old dad who served on this committee with 
me and worked in this room would be very proud of what you are 
doing. Thank you. Questions with regard to the Affordable Care 
Act, the continuing resolution H.R. 1 makes a number of blunt, 
reckless cuts in programs that are critical to the health and 
wellbeing of the American people. At the same time, the 
Affordable Care Act has begun implementing historic consumer 
protections including insuring coverage for children with pre-
existing conditions, prohibiting rescissions on coverage by 
insurance companies, allowing children up to 26 to stay on 
their parents' insurance, amongst others. Under H.R. 1, CMS 
would receive a cut of 458 million or more than 23 percent of 
that agency's 2010 budget. Will H.R. 1 delay or impede the 
implementation of the consumer protection provisions of the 
health reform act, yes or no?
    Ms. Sebelius. Yes, sir.
    Mr. Dingell. Madame Secretary, would you please give us for 
the record a statement as to how and where these cuts will come 
and what will be the affect on the programs involved? Madame 
Secretary, the Affordable Care Act provides seniors on Medicare 
with a 50 percent discount on brand name drugs, a critical step 
towards increasing the coverage under Medicare Part D. Will 
H.R. 1 delay or prevent the seniors from receiving this 
discount, yes or no?
    Ms. Sebelius. Mr. Chairman, the cuts to Medicare services 
will----
    Mr. Dingell. But it is a danger?
    Ms. Sebelius. Pardon me?
    Mr. Dingell. But it is a danger that it will affect those 
provisions?
    Ms. Sebelius. Yes, sir, yes sir.
    Mr. Dingell. All right, Madame Secretary, just yesterday we 
heard from Medicare Program Integrity Group Director John 
Spiegel regarding the anti-fraud efforts at CMS including the 
new tools provided by ACA to prevent fraud before it occurs. 
Will H.R. 1 delay or harm efforts to prevent fraud, waste, and 
abuse in Medicaid or Medicare, yes or no?
    Ms. Sebelius. Yes, sir.
    Mr. Dingell. Would you submit for the record a statement as 
to how and why?
    Ms. Sebelius. I will.
    Mr. Dingell. Madame Secretary, with regard to food safety 
as you know another important undertaking is the implementation 
of FDA Food Safety Modernization Act. This legislation made 
historic investments in our food safety system and provided new 
authorities to help FDA to prevent food safety programs before 
they occur throughout the food supply. H.R. 1 included $241 
million in cuts from the FDA. Will this cut or these cuts 
impede FDA's ability to implement the Food Safety Modernization 
Act, yes or no?
    Ms. Sebelius. Yes, sir, they will.
    Mr. Dingell. Would you please explain that for the record 
if you please, Madame Secretary?
    Ms. Sebelius. Yes, sir.
    Mr. Dingell. Madame Secretary, last Congress I enjoined 
with my colleagues Mr. Waxman, Mr. Pallone, and Mr. Stupak to 
introduce drug safety legislation that would give the FDA the 
authorities and resources it needs to adequately protect 
consumers from unsafe drugs and to monitor our food safety or 
rather the safety of our drug supply. Will H.R. 1 impede FDA 
center for drug evaluation and research from evaluating and 
monitoring drugs for safety and effectiveness, yes or no?
    Ms. Sebelius. Yes, sir.
    Mr. Dingell. Madame would you submit an explanation as to 
why that is so? Madame Secretary, the FDA is consistently and 
chronically underfunded and I continue to hope that FDA will 
get needed registration fees to help fully implement the food 
safety law. I note that those fees would have--were approved by 
and supported by the industry. Do you believe that registration 
fees are necessary to implementing the Food Safety 
Modernization Act, yes or no?
    Ms. Sebelius. Yes, sir.
    Mr. Dingell. Madame Secretary, you have been requested or 
the department has been requested to produce documents of the 
benefit of this committee. I would note Madame Secretary that 
HHS has produced over 50,000 documents I note a significant 
expense in response to the committee's requests related to the 
waiver process and the creation of CCIO. Would you submit to 
the statement or rather submit to the committee a statement as 
to how you have complied with that request for papers and 
documents and what seem to be the problems if any that exist 
with regard to the committee's requests for information?
    Ms. Sebelius. I would be happy to submit that.
    Mr. Dingell. Madame Secretary, we have completed our 
business with 11 seconds. Thank you. Thank you.
    Mr. Pitts. The gentleman's time is expired and Chair 
recognizes chair emeritus of the committee, Mr. Barton.
    Mr. Barton. Thank you, Mr. Chairman. Welcome, Secretary--
Madame Secretary. Congratulations to your Jayhawks for beating 
my Texas Aggies last night in basketball. I hated to see it, 
but you all were the better team.
    I think Dr. Burgess asked this question, but I am going 
to--I may ask it in a little bit different way. I think you are 
very well aware that a Federal court has recently ruled that 
the healthcare law that became law last year is 
unconstitutional. As the Chief Administrative Executive in 
charge of implementing that law what is your position on 
agreeing to the court order and ceasing to implement the new 
law? Do you intend to agree with it? Are you going to ignore 
it? Or are you going to appeal it? Could you enlighten us as to 
what your position is on this recent court ruling?
    Ms. Sebelius. Well, Congressman Barton, thank you on behalf 
of the Hawks. We have sought a clarification from Judge Vinson 
about the implication both for the plaintiff States as well as 
the membership of the NFIB which is one of the plaintiffs in 
the Florida case. Once we get that clarification we intend then 
to take next steps. In the meantime we are actively 
implementing the law because, as you know, Judge Vinson is now 
an outlier in terms of what the other Federal judges--the four 
other judges who have ruled, have ruled very differently than 
the judge. So we are seeking clarification and continuing to 
move ahead.
    Mr. Barton. What is your timeline on that?
    Ms. Sebelius. Well, the plaintiffs and the--we expect to 
hear back from the judge soon. The DOJ has filed their 
clarification request. The plaintiffs have responded this week, 
and the judge indicated that he would rule very quickly.
    Mr. Barton. Is it once that information is received from 
the judge is--whose decision is it? Is it your decision? Is it 
the Attorney General's decision? Is it the President's decision 
or all of the above on how to proceed?
    Ms. Sebelius. Well, our legal team is led by the Department 
of Justice so we defer to their legal counsel.
    Mr. Barton. Do you have official input into the decision? 
In other words----
    Ms. Sebelius. Into the legal counsel's decision?
    Mr. Barton. Well, you are the Secretary of Health and Human 
Services.
    Ms. Sebelius. I understand. I--our legal counsel is 
involved with the justice team, but they are proceeding to have 
this dialogue with the court.
    Mr. Barton. OK. I would disagree with you that the judge's 
decision was an outlier. My understanding is that if you are 
keeping score it is 2 to 2. So I don't----
    Ms. Sebelius. No, it is 3 to 2.
    Mr. Barton. We had--have we had another one?
    Ms. Sebelius. I have to keep an accurate score and as I say 
there are 12 who have dismissed the case outright, so.
    Mr. Barton. All right.
    Ms. Sebelius. And Congressman, the clarification I would 
make is that in the other decision which came out of a court in 
Virginia where the judge found an individual responsibility to 
be the one portion of the law that he found unconstitutional, 
he disagreed with Judge Vinson's description that it was 
essential to strike down the entire law and so that is what I 
meant----
    Mr. Barton. Yes, I am aware of that.
    Ms. Sebelius [continuing]. In terms of the outlier.
    Mr. Barton. And I guess one more--one last question on 
that. Is it conceivable that the Obama administration would 
appeal directly if the decision is to appeal--would appeal 
directly to the Supreme Court so that we get this thing solved 
hopefully before the next presidential election?
    Ms. Sebelius. Congressman, the Attorney General of the 
State of Virginia has filed an expedited appeal to the United 
States Supreme Court asking them to grant cert in the case in 
Virginia. The Administration has opposed that decision to 
expedite, but that is now before the court. So that is ripe and 
the court will make a decision on whether or not they intend to 
expedite this case.
    Mr. Barton. My time has just about expired. I have got a 
number of questions for the record I will submit in writing. My 
final question is on NIH. Several years ago we passed an NIH 
Reform bill through this committee that was signed into law. 
That bill was a reauthorization bill. It lapsed several years 
ago and it is up for renewal. I am going to encourage Chairman 
Upton to have a hearing and hopefully do a reauthorization on 
that later this year or next year, but in that was the creation 
of a Common Fund to try to get more cross-semination, 
insemination between the various NIH organizations. Have you 
followed that? And if so, could you give us an update on how 
you believe that common fund is operating?
    Ms. Sebelius. Well, Mr. Chairman, I know that the new 
director of the National Institutes of Health has taken a great 
interest in the Common Fund and has actively involved in not 
only seeking to fill gaps in research but directing it to the 
most promising options he feels in the research field. So I 
think it has been something that has been definitely a stream 
of funding that has been very important and one that I would be 
happy to get some detail from Dr. Collins on exactly where 
those funds are being directed. But it is something that he 
takes very seriously.
    Mr. Barton. Thank you, Madame Secretary. And thank you.
    Mr. Pitts. Gentleman's time is expired. Chair yields 5 
minutes to the gentleman from New York, Mr. Engel, for 
questions.
    Mr. Engel. Well, thank you. Thank you, Mr. Chairman. You 
know I have been listening to the whining and complaining on 
the other side of the aisle and it just really boggles my mind, 
Madame Secretary. But the bottom line is do we want to provide 
American citizens with healthcare or don't we? I know there 
hasn't been any enthusiasm for the Affordable Care Act on the 
other side of the aisle, but you know let us try to improve it 
rather than try to destroy it.
    I noted with a bit of a chuckle the assault on the 
Massachusetts law. The fact is that the Governor of 
Massachusetts came here and said that the law is working and I 
wonder if Governor Romney is going to run on his strong 
implementation of that law in the Republican primaries when he 
runs for president. Madame Secretary, what are the most 
dangerous things in the Republican cuts as you see it from your 
very important point of view of providing healthcare for 
Americans and all the other things that are in the Republican 
plans for funding the Government? What do you see as the most 
draconian of the cuts and how would it affect the health of the 
American people?
    Ms. Sebelius. Congressman, the President feels strongly 
that education, innovation, building are key blocks for the 
future. So the investment in early childhood education, which 
pays huge dividends down the road; the investment into 
scientific research to keep us at the front of biomedical 
innovation; the infrastructure for public health delivery with 
community health centers; and funding the training of 
providers--all of those are jeopardized without, you know, 
having adequate funding in the future as well as essential 
services. The centers for Medicare and Medicaid and--are 
looking at increased beneficiaries in a very restrictive budget 
and our efforts to have new fraud, waste, and abuse efforts 
which are really paying off are very much in jeopardy.
    Mr. Engel. You know what I see in terms of the Republican 
for funding the Government, it is not a matter of the fact that 
we need to cut to balance a budget. We do need to balance our 
budget and I find it odd that we are giving these huge tax 
breaks to wealthy people and that blows a hole in the budget. 
And I find that very interesting, but it is an attempt as I can 
see it to get rid of all the programs Republicans having liked 
for all these years and to try to tie it in and kind of use the 
budget problems to do that. You know we see it on a State level 
in Wisconsin. We see it all over the country. And we see it on 
a national level as well. We had Governor Barbour here and he 
complained that he didn't like the Affordable Care Act and he 
would agree to block a grant. Do you think the people of 
Mississippi would be better off four years from now under 
Governor Barbour's blocked grant program or under the 
Affordable Care Act?
    Ms. Sebelius. Congressman, I don't know a lot of the 
details about the Mississippi healthcare situation. I do know 
that they have a population that, by poverty level, qualifies 
them for the highest FMAP rate. And one of the challenges of 
any kind of block grant is if you would look at the recent 
economic downturn when millions more Americans qualified for 
Medicaid because they lost their jobs or their incomes took a 
drastic downturn. No State would have any help from the Federal 
Government in responding to that. It shifts huge burdens 
frankly onto State bases and doesn't have a Federal partnership 
moving forward.
    Mr. Engel. Let me ask you this. There have been a number of 
criticisms of the Pre-existing Condition Insurance Program and 
I would like to just review the facts. First there was concern 
over whether there won't be enough money for all the people 
that will enroll. Then we heard that very few have enrolled and 
both criticisms were asserted as failures. How many people have 
enrolled and what changes have you made to the program in 
response? And let me throw out another question tying in with 
this. Governor Barbour at Tuesday's hearing asserted they were 
unable to run the program. So were States given the opportunity 
to run the program? Could they have run it in combination with 
existing high risk pools in the States? And the irony as I see 
it is that a high risk pool was essentially a tattered feature 
in the Republican proposal for health reform debated right in 
this very committee last year. So I wonder if you can comment 
on those things.
    Ms. Sebelius. Well, there are now approximately 12,000 
people across this country who are enrolled in their State or 
the Federal high risk pool and the enrollment increased by 
about 50 percent over the last couple of months. Many States 
are--finally got their program set up, are doing aggressive 
outreach, are informing people but as you know there are some 
pretty strict requirements. You have to be uninsured for six 
months which is a barrier to a lot of folks. And the insurance, 
even though it is capped at market rates is still not 
inexpensive coverage. This was always designed as a bridge 
strategy to try and get to 2014 when the market rules will 
change and for the first time ever in the history of this 
country we will have insurance available without regard to 
people's pre-existing health condition. They will be able to 
participate in a broad based pool.
    Mr. Pitts. Gentleman's time has expired. Chair recognizes 
the gentleman from Illinois, Mr. Shimkus, for 5 minutes for 
questions.
    Mr. Shimkus. Thank you, Mr. Chairman. Madame Secretary, 
welcome. We have been waiting to visit with you for a long 
time. I would just--I would state that you know it is funny 
that you mention that NFIB which is a National Federation of 
Independent Businessmen were plaintiffs. When I thought they 
got such great small business tax credits that I wouldn't 
really expect them to be in opposition to this law. I--it is 
just I am surprised to hear that. The other thing--you were a 
Governor of a State and I would imagine that had you been 
governing--did you ever pass--under governorship was budgets 
passed? Did you pass budgets when you were Governor?
    Ms. Sebelius. Yes, sir.
    Mr. Shimkus. Was the chambers held by just Democrats in the 
Senate and the House or did you have----
    Ms. Sebelius. Never.
    Mr. Shimkus. What is that?
    Ms. Sebelius. Never.
    Mr. Shimkus. Never. And you passed budgets?
    Ms. Sebelius. We did.
    Mr. Shimkus. And then the last Congress we held--Democrats 
held the House of Representatives. That is true, right?
    Ms. Sebelius. And the house passed a budget.
    Mr. Shimkus. And they also held the Senate.
    Ms. Sebelius. They did.
    Mr. Shimkus. And we have a Democratic President?
    Ms. Sebelius. Yes, we do.
    Mr. Shimkus. And we didn't pass a budget?
    Ms. Sebelius. I think the House passed a budget.
    Mr. Shimkus. So I am--I guess I am trying to be a little 
cute. The point is the Democratic attack on this CR is because 
of their failure to pass a budget. So they can position all 
they want, you know we are in the majority because they can't 
pass a budget.
    Mr. Pallone. Will the gentleman yield?
    Mr. Shimkus. No, I will not. We are in the majority because 
they passed this bill--became a law. We are in the majority 
because they passed Cap and Trade. Our frustration is the last 
time you visited this committee was February 4, 2010, the last 
time. This bill was not even the law of the land. I became 
Ranking Member of the Health Subcommittee. After that vote 
Nathan Deal left and I think I asked the then-Chairmen Waxman 
and Frank Pallone who really is a great friend 19 times to ask 
you to come visit us. You never came. Why? Why didn't you come 
after the law to help us understand the provisions and the 
implementation of this law?
    Ms. Sebelius. Congressman, I responded to the request that 
I got.
    Mr. Shimkus. So you are saying we never requested you to 
come back?
    Ms. Sebelius. Yes, sir.
    Mr. Shimkus. OK. So Chairman Waxman did not ask you to come 
back to help explain this law?
    Mr. Pallone. Would the gentleman yield?
    Mr. Shimkus. No, I will not.
    Mr. Pallone. He is referencing the Chair and it is not 
accurate.
    Mr. Shimkus. No, I will not. I will not. Will you answer 
the question, Madame Secretary? Chairman Waxman never asked 
you----
    Ms. Sebelius. Congressman, I will go back. I need to look 
at the record.
    Mr. Shimkus. OK.
    Ms. Sebelius. All I can tell you is I respond to the----
    Mr. Shimkus. Will you submit the answer for the record in 
writing?
    Ms. Sebelius. I will be happy to.
    Mr. Shimkus. Thank you very much. Let me go--this is really 
a budget--our frustration is there are so many particular 
problems and concerns we haven't had a chance to really talk to 
you. This is a budget hearing so let us talk about a budget 
issue. In that February 4, 2010, hearing I asked you a 
question; it was kind of out of the same way. And then you 
admitted that the $500 billion Medicare cuts, there were $500 
billion in Medicare cuts. Is that correct?
    Ms. Sebelius. No, sir, it is not correct. There were $500 
billion in a slowdown in growth rate spending.
    Mr. Shimkus. Well, I would refer--I am reclaiming my time. 
I would refer you to the transcript.
    Ms. Sebelius. Sir.
    Mr. Shimkus. And I will read it if you want me to.
    Ms. Sebelius. The growth rate was projected in Medicare to 
be at 8 percent.
    Mr. Shimkus. ``Mr. Shimkus: So the President supports 
cutting $500 billion in Medicare, yes or no? Secretary 
Sebelius: The President is supportive of the health reform 
legislation. Is that a yes? Secretary Sebelius: I said yes, 
sir.'' So our problem in this whole debate on Medicare cuts----
    Ms. Sebelius. The health legislation doesn't include $500 
million worth of cuts.
    Mr. Shimkus. Ma'am, my concern--this is a budget hearing, 
so there is a--there is an issue here on the budget because 
your own actuary has said you can't double count. You can't 
count 500--they are attacking Medicare on the CR when their 
bill, your law cut $500 billion in Medicare. Then you are also 
using the same $500 billion to what? Say you are funding 
healthcare. Your own actuary says you can't do both. So my 
simple question--I have 26 seconds left. What is the $500 
billion cuts for: preserving Medicare or funding healthcare 
law? Which is it?
    Ms. Sebelius. Sir, the Affordable Care Act adds 12 years to 
the Medicare Trust Fund according to every actuary and the $500 
billion represents a slowdown in the growth rate of Medicare 
over 10 years from what was projected at 8 percent to a growth 
rate of six----
    Mr. Shimkus. So is it Medicare? Is he using it to save 
Medicare or are you using it to fund healthcare reform? Which 
one?
    Ms. Sebelius. Both.
    Mr. Shimkus. So you are double counting. I yield back my 
time.
    Mr. Pitts. Gentleman's time is expired. Chair recognizes 
gentlelady from California, Mrs. Capps, for 5 minutes of 
questions.
    Mrs. Capps. I am pleased to yield 10 seconds to the ranking 
member of the subcommittee.
    Mr. Pallone. I just wanted to say, Mr. Shimkus, you 
shouldn't be asking the Secretary about whether we invited her. 
Fact of the matter is that Mr. Waxman and myself did not invite 
her after the healthcare bill passed. And you can simply 
address that to us and the answer is no, we didn't invite her. 
So it is not that she failed to come, we did not invite her.
    Ms. Sebelius. Thank you.
    Mrs. Capps. Thank you, Mr. Pallone. Thank you for your 
testimony, Madame Secretary, and welcome to our subcommittee. I 
want to acknowledge and support the interest that was expressed 
by former Chairman Barton in the Common Fund he was describing 
and you answered how much the current Secretary of NIH or 
Chairman of NIH is supporting it as well. It was his idea and 
he got it funded in 2006 and point out to my colleagues that 
H.R. 1, the continuing resolution, cuts $48.5 million from the 
Common Fund. You know, these are tight fiscal times and I think 
the President's budget identifies areas for smart investments 
that will pay off both in improvements in the Nation's health 
and economic stability. The President has called on our Nation 
to come together to out-educate, out-innovate, and out-build 
our competitors. I support this focus and I think the HHS is in 
a strong position to help reach these goals. As nurse, I am 
concerned about strengthening the health work force. We face a 
primary care shortage now and as we move into implementation of 
health reform we are going to need an even more robust 
healthcare workforce. As you know, the Affordable Care Act lays 
out a course for creating that workforce, creating a commission 
to help guide analysis and recommendations of workforce 
enhancement, providing primary care providers a pay increase 
through both Medicare and Medicaid and providing enough 
service--enough funding to more than triple the National Health 
Service Corp. But we in Congress need to support these programs 
for proper implementation. So I am very concerned that the 
House continued resolution would cut workforce programs by 
about $145 million from the fiscal year 2010 level, slashing 
vital Title VII and Title VIII by nearly a third. I am 
particularly worried about Title VIII programs which support 
the education and training of nurses. We have a nursing 
shortage. Last year over 50,000 qualified applicants were 
turned away from nursing schools due to budget constraints and 
the lack of faculty to train them. Madame Secretary, you 
understand this. The President's budget provided an increase in 
these same programs. Can you discuss the steps taken in the 
budget to strengthen our healthcare workforce and increase the 
numbers of jobs which will result from that?
    Ms. Sebelius. Well, Congresswoman, I think that there is no 
doubt that the President shares your concern about the health 
workforce of the future which is why he has made it a focus 
each year in his budget and why I think the Affordable Care Act 
also focused on workforce enhancements. So the budget would 
include support as you say to train about 10,600 National 
Health Service Corp providers; train an addition 4,000 new 
primary care providers over the next five years. The Prevention 
and Public Health Fund Allocation would also increase the 
number of nurse practitioners. Six hundred nurse practitioners 
would be trained. Six hundred new physician assistants across 
the country would be available with the establishment of new 
community health centers there would be providers available in 
the most underserved areas, so there are a whole series of 
workforce enhancements that would be jeopardized either by 
defunding the Affordable Care Act or not passing the 
recommended President's budget.
    Mrs. Capps. And what concerns me is it the House Continuing 
Resolution would be a reduction of 54 percent cutting our 
workforce programs by more than half in all of the areas that 
you specified. I think this is going to devastate our 
healthcare workforce. And I hope you will quickly agree with 
me.
    Ms. Sebelius. Yes.
    Mrs. Capps. Thank you. I needed that for the record. What 
puzzles me is that I know my colleagues across the aisle have 
expressed concerns that we don't have enough healthcare 
workforce, but I shared their concern and this--the key to 
addressing this problem is right in front of us and yet they 
propose cuts that will make the situation worse. Their budget 
will hamper efforts to fill the gaps that we have today and 
just as the demand for healthcare professionals increases. In 
my last minute, I would like to address something you mentioned 
in your remarks which are the $4 billion in waste, fraud, and 
abuse that HHS and the Department of Justice has recovered just 
in this past year--$4 billion that was saved for American 
taxpayers. When I am home meeting with my seniors in healthcare 
advocates as well about how they can be active participants now 
in looking for waste, fraud, and abuse. We want this to 
continue. Some of it is in the Medicare payments. Would you 
expand upon this $4 billion in savings and ways that we can 
look to increase this amount over the future?
    Ms. Sebelius. Well, the President's budget again has 
requested additional resources. This is an enormous payoff----
    Mrs. Capps. Yes.
    Ms. Sebelius [continuing]. In terms of dollars returned for 
dollars spent. We are building new data systems that can allow 
us to spot billing irregularities in a much more timely 
fashion, recredentialling providers, putting in place strike 
forces. We would like to expand those strike forces which have 
been enormously helpful in the fraud hotspots. But this 
collaborative effort with not only our partners at Justice, but 
local Attorneys General and States has been enormously 
effective so far and we hope to be able to expand and broaden 
that outreach.
    Mrs. Capps. Thank you.
    Mr. Pitts. Gentlelady's time is expired. Chair recognizes 
the gentleman from Pennsylvania, Mr.--Dr. Murphy for 5 minutes 
for questions.
    Mr. Murphy. Thank you. And thank you, Madame Secretary. 
Three things I think I am going to put out that we agree on. 
First of all that first Pitt and Kansas both deserve to be in 
the final four. A yes would be good. I will take that as a yes.
    Ms. Sebelius. Yes.
    Mr. Murphy. Thanks. Number two, this committee worked very 
hard together and my friend and colleague Gene Green and I 
worked together on and it passed the House 417 to one a bill to 
allow doctors to volunteer at community health centers. Now, I 
know the estimates are that huge numbers of more people will go 
to community health centers. With the CBO analysis of this 
however just said that using the Federal Torts Claim Act and 
using only those numbers because that is all they are allowed 
to look at, I think the cost over several years was 30 million. 
But I am asking if your department could work with us in coming 
up with a more detailed analysis if we allowed the doctors to 
volunteer at community health centers what would the cost 
savings be in terms of allowing more patients to go through 
those centers. Is that something that you could help us come up 
with an----
    Ms. Sebelius. I would be glad to work with you on that.
    Mr. Murphy. That would be extremely helpful because you 
know we have huge rates for vacancies of jobs in those centers 
and that would be very helpful. And I have no doubt that this 
committee and this House will pass it again. Will you help the 
nudge the Senators, help them understand the great value in 
this as well? We don't try and put pressure on them, but 
perhaps you could perhaps add some wisdom to them. Second 
thing--or the third thing, in the National Child Traumatic 
Stress Network--it is a group of academic and community based 
centers that give--that disseminate standards in clinical 
excellence and care of traumatized children. It is funded 
through the Substance Abuse and Mental Health Services Act. 
When I read your budget proposal, however, it seems like the 
Administration--although you were supportive of the program 
there were some cuts to the program. Actually it cut the 
funding from 40 million to 10 million, but at the same time the 
SAMSA budget is calling for major increases in spending in a 
number of other areas such as increased spending for military 
families initiatives for service grants, some things for 
homeless--certainly you know that with regard to homelessness 
there is a high correlation between childhood trauma and 
homelessness. And in my own experience of working with 
servicemen and women at Bethesda Naval Hospital, my own 
clinical experience as a psychologist also tells me that there 
is a higher risk for people for PTSD and homelessness and other 
trauma if they themselves experience a great deal of trauma in 
their lives when they were younger. And I think that you have 
like 2.37 billion in homeless grants through HUD and other 
things for veterans although I think the VA should be handling 
some of this. Is this something you are able to relook at and 
see that perhaps we should be spending more in the early 
treatment and prevention, let the VA handle some of the other 
things for veterans, but to revisit that so make sure we are 
not cutting some of the treatment programs out of the childhood 
treatment of trauma?
    Ms. Sebelius. Well, I would be glad to have that discussion 
with Pam Hyde, who is the Director of the Substance Abuse and 
Mental Health Services. I can tell you she is absolutely 
committed to prevention as being the most effective treatment 
possibility, so I will certainly circle back with her about 
your concern about that particular program.
    Mr. Murphy. Thank you. I know that the VA for example has 
14 homeless programs and initiatives and although I do want to 
support all of those I also recognize that we would do well to 
prevent some of these problems for a lot of them, too. Finally 
in the area of Medicare and Medicaid those programs were 
designed in 1965 and I oftentimes liken it to none of us were 
driving a 1965 car and if we had one we would put a lot of 
patches and repairs to it over time. Whenever I talk to medical 
subspecialties in a wide range of areas--cardiology being one, 
I think 40 percent of our money is spent on cardiovascular 
disease. I very often--when we ask the question if you were to 
design Medicare today would it look anything like the Medicare 
of 1965? And I am assuming you would agree, no. Could you tell 
me what major initiatives you have in mind that really help us 
perhaps even redesign this from the ground up particularly for 
some of the major disease entities such as cardiovascular 
disease, lung disease, cancer, et cetera?
    Ms. Sebelius. Well, Congressman, the Affordable Care Act 
actually includes a major direction that the Medicare 
incentives be redesigned and aligned with quality outcomes and 
healthcare strategies that we know are not only more patient-
centered outcomes like medical home models and bundling care to 
prevent unnecessary hospital readmissions, but the Medicare 
incentives I would say are right now aligned to volume and not 
value. So we are in the process through the centers for 
innovation, through working with providers across this country 
to try and capture the best possible patient practices and 
implement those. Yes.
    Mr. Murphy. I hope you will do that. I know my time is up, 
but the academies and colleges of various specialties of 
medicine have standards and protocols and I hope you will look 
to them for some guidance on that.
    Ms. Sebelius. We are working very closely with them. Thank 
you.
    Mr. Murphy. Thank you, Mr. Chairman. Thank you, Madame 
Secretary.
    Mr. Pitts. The Chair thanks gentleman. The gentleman's time 
has expired. Chair recognizes the gentleman from Texas, Mr. 
Gonzalez, for 5 minutes for questions.
    Mr. Gonzalez. Thank you very much, Mr. Chairman. Welcome, 
Madame Secretary. I do want to address a comment that was made 
by a fellow Texan that the uncertainty that is out there 
regarding the constitutionality of the mandate and wondering 
what the Texas Attorney General has to do and that he is 
wondering what he has to do as well as our Governor Rick Perry. 
Those two gentlemen also represent me and I do have a 
suggestion as to what they could be doing in the meantime. They 
could be coming up with a solution to make healthcare insurance 
affordable for Texans so that employers have access to it at a 
reasonable price to offer it to their employees, and that 
Texas, its citizens have affordable insurance products 
available to them so that we don't lead the Nation in the 
uninsured. That is what they could be doing. That is just a 
suggestion. I am sure they have thought of it.
    We have heard that the American people want us to balance 
the budget, reduce the national debt, and we all agree and I 
think the President's fiscal year 2012 budget places us in a 
good place to accomplish that. But I don't think the American 
people said and while you are doing this expose us to dangerous 
drugs, or continue a healthcare insurance industry that does 
not provide us adequate, affordable, accessible coverage. I 
don't think they said that. So I join you and I join the 
administration and I believe that I join members on the other 
side of the aisle in that objective. And we may have different 
plans on how to get there, but the truth is nothing was done 
until we passed the Affordable Care Act. The discussion is 
ongoing and it will be a continuing debate, but the need still 
exists, the problem still exists.
    We can debate this thing and just continue to hemorrhage, 
so I will ask you this, Madame Secretary. We hear so much about 
market forces and just let the free markets take care of all of 
this. And I think in large measure we all agree with that to a 
point until the markets are dysfunctional, until the markets 
don't deliver what is necessary without the incentives, and the 
directions, sometimes and a push, and a shove, but mostly a 
collaborative effort which I think is what the President is 
seeking to do. When it comes to the FDA why not just let an 
industry police itself. Why don't we just let them do that?
    Ms. Sebelius. Well, Mr. Congressman, we have seen I think 
the results of a lack of regulation in way too many areas that 
have just gone terribly awry. I think the FDA is certainly 
seeking to make sure that the 25 cents of every consumer dollar 
which comes in a product that is under the umbrella of that 
agency, whether it is drugs and devices or our food supply, is 
safe and secure. And frankly, I think in many cases the 
industry is very supportive of those efforts in the food debate 
for the new Food Safety bill that we just had, the industry 
ultimately takes the economic hit from an unsafe product being 
available to consumers. There is a huge ripple effect that ends 
up penalizing the food industry. So they are eager for a 
regulatory oversight and they are willing and able to actually 
help finance that regulatory oversight.
    Mr. Gonzalez. And I do believe it is a collaborative--it is 
a partnership. But I think Government has a responsibility to 
protect the welfare and safety and health of our constituents. 
That is what we were hired to do and provide them with 
opportunities. The last question is and I am very concerned 
about NIH because I am having all of my universities, they are 
all coming and these are Democrats and Republicans and they are 
all have basically this same request. What is going to happen 
to replace those particular funds that are so essential? Again 
why is NIH so necessary? Why don't we just allow the public--
the private sector to make those funds available to our 
universities?
    Ms. Sebelius. Well, Congressman, as you know one of the 
areas that the United States leads the world is biomedical 
research. And it has been an enormously important partnership 
between the commercial industry and the research that goes on 
in universities across the country funded in large part by NIH 
which is why I think the President has recommended an increase 
to the NIH budget which is already looking at a losing the two 
years of enhanced funding from the Recovery Act and trying to 
make sure that we continue those breakthroughs that are 
happening all across this country.
    Mr. Gonzalez. Thank you very much. Thank you, Mr. Chairman 
for your indulgence.
    Mr. Pitts. Gentleman's time is expired. The Chair 
recognizes the gentlelady from Tennessee, Mrs. Blackburn, for 5 
minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman, and thank you, 
Madame Secretary for being with us. I found a--your opening 
statement a little bit curious. You mentioned that you think 
that it is the responsibility of the Administration to give 
every family and business the chance to thrive while making the 
investments that will grow our economy and create jobs. And I 
just have to tell you being out there and holding listening 
sessions in my district and with some of my colleagues the 
American people do not want to be dependent on the Federal 
Government for their cars, their loans, their home loans, their 
housing, their education, and their healthcare. What they would 
like to do is see the regulation reduced and to see the Federal 
Government get out of the way. So I would ask you, do you have 
any data that shows that businesses are actually getting relief 
on the cost of the insurance that they are paying every year? 
Do you have any data that is verified that this is lowering 
costs? Because we are hearing the opposite and are actually 
being shown bills and estimates for that.
    Ms. Sebelius. Congresswoman, if you are talking about data 
as a result of the Affordable Care Act----
    Mrs. Blackburn. Yes, of Obamacare. Yes, ma'am.
    Ms. Sebelius [continuing]. As you know the law was signed 
just about a year ago. What we have seen with the enhanced rate 
regulation there are numbers of States that actually have used 
those new tools to lower the impact of rate increases and that 
is showing----
    Mrs. Blackburn. Could you supply that because we are not 
seeing that in Tennessee----
    Ms. Sebelius. I would be happy to supply that.
    Mrs. Blackburn [continuing]. And I know Tennessee had to 
come to you for one of the 900 waivers. And I know they are 
appreciative for that. Let me ask you about the 1115 waivers. 
When you grant a waiver and it seem s like you all are doing 
more of that, is that waiver--does that take the elected 
officials in that State out of the decision-making equation? Is 
that waiver granted to the Governor's office between CMS and 
the Governor's office? Because that is the way TennCare was 
done. We as State legislators were taken out of the equation.
    Ms. Sebelius. Actually Congresswoman, the traditional 1115 
waiver was a dialogue between CMS and the Governor's office. 
The Affordable Care Act changes that provision so now there is 
a notice requirement. There are public hearing requirements. 
There is input opportunity, so the waiver process actually has 
been amended by the Affordable Care Act to include far more 
transparency.
    Mrs. Blackburn. OK. I would like to call to your attention 
this is the reason it is so important to me. Today's Wall 
Street Journal: Obama's health waiver gambit. And it talks 
about Ms. Cutter and Ms. Deporal saying privately to our 
liberal interest groups that this is a way to increase 
centralization for instance with a State-based public option or 
even single payer. And I tell you why this is of concern to me. 
We had Governor Patrick in here this week and his Medicaid 
State Director is on the record having said that when you look 
at the way the market Medicaid works that he is beginning to 
favor a single payer. And I would just submit to you that this 
is not what the American people want. They do not want the 
Federal Government that can't tend to the items that are on 
their plate making the decisions for their healthcare and we 
hear it from them every single day and ma'am, it is of concern. 
If we have----
    Ms. Sebelius. Congresswoman, that is not at all--first of 
all we don't design any waiver. The State comes to us with a--
--
    Mrs. Blackburn. I have seen the applications from my State 
and I respect that and I understand that. We want to move on.
    Ms. Sebelius. The rules aren't even developed for the 
program you are referencing.
    Mrs. Blackburn. I do want to move on. Fraud, you mentioned 
fraud. We had a hearing on this this week. Are you able to 
quantify the amount of fraud that is there in Medicare and 
Medicare and then----
    Ms. Sebelius. No, ma'am.
    Mrs. Blackburn. OK. So the four billion that you feel like 
you saved you don't have a way to quantify what the problem is 
and how widespread?
    Ms. Sebelius. We don't know how--if we knew how big it was 
we would hopefully shut it down.
    Mrs. Blackburn. And what percentage of your energy this 
year is going to go to addressing that fraud?
    Ms. Sebelius. What percent of my energy?
    Mrs. Blackburn. Yes, your resources and energy. I mean, 
when we hear organized crime getting into Medicare and Medicaid 
fraud I think it should cause us all--so if you could just let 
us know your resources, what you plan to put into that.
    Ms. Sebelius. There are significant new resources requested 
in the budget for fraud and abuse.
    Mrs. Blackburn. Another question I would like to--your 
budget this year, your request is 891 billion. Your '08 budget 
which we would love to return to those numbers was 708 billion 
and you mentioned that you have cut in your testimony four 
programs but or you list four programs that you cut. Are those 
the only cuts that you all made or were there others?
    Ms. Sebelius. No Congresswoman, there are about $5 billion 
worth of cuts. Our budget proposal is below the 2010 levels.
    Mrs. Blackburn. Do you mind submitting that list to us?
    Ms. Sebelius. I would be happy to.
    Mrs. Blackburn. That would be great. You are below 2010, 
but not down to '08. I yield back.
    Mr. Pitts. The chair thanks the----
    Mr. Pallone. Mr. Chairman----
    Mr. Pitts [continuing]. Gentlelady.
    Mr. Pallone. Mr. Chairman, a point of personal privilege 
here or whatever----
    Mr. Pitts. Yes, let me just say----
    Mr. Pallone. The Secretary should be allowed to answer the 
question.
    Mr. Pitts. That is correct. The gentlelady's time is 
expired. Madame Secretary, do you wish to add additional 
response? You may continue to respond in writing as well if you 
feel like you have not adequately responded.
    Ms. Sebelius. Thank you, Mr. Chairman.
    Mr. Pitts. The Chair recognizes the gentlelady from 
Wisconsin, Ms. Baldwin, for 5 minutes for questions.
    Ms. Baldwin. Thank you. Thank you, Madame Secretary for 
being here. Earlier I wanted to start by reacting to some of 
the other comments that were made. I think it was Dr. Burgess 
who noted that we switched sides and it was because of this law 
referring to Affordable Care Act or Healthcare Reform. And I 
disagree. I think the last election was about jobs, jobs, jobs.
    But instead of focusing on jobs, the new majority has made 
it their first order of business to repeal the Affordable Care 
Act. That was one of the first votes we took this session which 
is already in my community providing lifesaving coverage to 
many who didn't have it before and improving their access and 
the affordability of their healthcare. And instead of focusing 
on jobs, the new majority has attempted also to deny funding to 
continue implementing the Affordable Care Act, the Healthcare 
Reform bill we passed last session.
    Instead of focusing in on jobs, the new majority has 
offered House Resolution 1 that Moody's earlier this week said 
would lead to the loss of 700,000 jobs in the United States. 
And instead of focusing in on jobs, some of our new Governors 
are presenting budgets imbedded with policies that would gut 
Medicaid and would thwart at the State level the implementation 
of the Affordable Care Act. It is precisely what is happening 
in my home State of Wisconsin which used to have a reputation 
as being a leader in healthcare and a leader in preparation for 
the implementation of the Affordable Care Act.
    Now I don't envy you your job right now. It is working to 
implement these vital, lifesaving, important reforms when so 
many are working so hard to see that legislation thwarted, 
roadblocks placed, et cetera. But I want to focus back on House 
Resolution 1, the continuing resolution that passed in the 
House a couple weeks ago.
    I brought an amendment to the floor to restore funding to 
the community health centers. My amendment was fully paid for 
but unfortunately the Republicans barred me from offering that. 
But H.R. 1 slashes over a billion dollars to community health 
centers for the remaining seven months of this fiscal year. If 
this ultimately is passed and becomes law I guess I would like 
to hear from you how you even go about implementing that. How 
does this impact the constituents that I represent that rely on 
the wonderful community health centers that provide services in 
my area? I have heard that this will impact coverage to 
probably 11 million Americans. It will result in job losses and 
closure of clinics. Do you drive--if you were forced to 
implement such draconian cuts how would you go about that? What 
would we see at the local level?
    Ms. Sebelius. Well Congresswoman, I share your view that 
the community health center footprint is incredibly important 
and both with the Recovery Act and the budget investments and 
the Affordable Care Act that footprint will double over the 
period of the next five years serving closer to 40 million 
people. We are already seeing that increase. There are about 10 
million additional Americans served thanks to the Recovery Act 
investments and they are in the most underserved areas. And 
with those community health centers are providers and often 
providing a host of community services.
    So the effort to now deny care, fire healthcare providers 
who would lose their jobs and restrict access in the most 
underserved rural and urban communities to affordable available 
healthcare would just put additional burdens on already 
strapped city and State budgets. Those folks will come through 
the doors of emergency rooms, enlarge our numbers. They will be 
sicker on the job. They will be unable to take care of their 
kids. There will be students who won't do as well in school 
because their health needs won't be attended to. And I think 
that has a serious impact not only in the health of this Nation 
but on certainly the prosperity of the Nation.
    Ms. Baldwin. Thank you.
    Mr. Pitts. The gentlelady's time is expired. Chair 
recognizes the gentleman from Georgia, Dr. Gingrey, for 5 
minutes for questions.
    Mr. Gingrey. Mr. Chairman, thank you. Secretary Sebelius, 
in testimony before this committee on January the 26 I asked 
Mr. Cass Sunstein from the White House Office of Regulatory 
Affairs if he knew who had the authority within your 
administration to slip a Medicare end of life service rate into 
a final rule without first allowing for public comment. And he 
testified under oath that and I quote ``the Secretary of HHS 
has considerable authority over her rules.'' Madame Secretary, 
in--yes or no, did you make the decision to publish this end of 
life payment rate without allowing for public comment?
    Ms. Sebelius. Yes, sir.
    Mr. Gingrey. Well, I appreciate your forthrightness on 
that. I really do, but you know it flies in the face of the 
comment, the response that you just gave to my colleague from 
Tennessee regarding the 1115 Waiver Program and you described 
how it formally worked between the department and directly with 
the Governor's office in calling for more oversight and public 
hearing and transparency. So would you agree that in the future 
that rather than making that decision unilaterally even though 
you have the power to do it, that maybe a little bit of time 
for public comment would have been appropriate in regard to 
that?
    Ms. Sebelius. Congressman, the rule as you know was--
followed the outline that was directed in the Affordable Care 
Act in terms of the provisions for a wellness visit. In 
addition we looked at the original welcome--welcome to Medicare 
visit and the one element that wasn't consistent was----
    Mr. Gingrey. Yes, I wish I had enough time to listen to 
your full answer but----
    Ms. Sebelius [continuing]. End of life--but--well, we did--
--
    Mr. Gingrey [continuing]. If you could respond yes or no to 
that? More transparency? More opportunity for public comment?
    Ms. Sebelius [continuing]. We got in fact--yes, sir. And 
that is why it is not part of the final rule. We decided that 
it was better to air it.
    Mr. Gingrey. And I would hope that that is a yes answer. 
Let me move on. In the President's fiscal year 2012 budget, 
your department requested $93 million for information in 
education in order to sign American workers up for the Class 
Act. This is that same program that you just recently told 
Senate Finance Committee I guess a few weeks ago that the 
program was unsustainable. Now those are your words. Do you 
believe it is appropriate for the Administration to solicit 
money from American workers for a health program that is 
``totally unsustainable''?
    Ms. Sebelius. Sir, my comment was that it was unsustainable 
as the legislation was crafted, but I was given considerable 
flexibility and we are in the process of making I think the 
changes that will meet the criteria outlined in the law, which 
is, that it be sustainable without taxpayer support.
    Mr. Gingrey. Well, thank you. Given the current budget 
crisis that we have in this country and I think everybody on 
the dais and certainly you would agree with this we have a 
tremendous budget crisis. And understanding that you are asking 
for money to sign people up for a program that you say is 
unsustainable, will you pledge here today to work with this 
committee to ensure that the Class Program, the Class Act is 
truly sustainable before the Administration proceeds with 
program operations?
    Ms. Sebelius. Yes, sir, I would be happy to do that.
    Mr. Gingrey. Thank you, Madame Secretary. And the last 
thing that I wanted to address with you and this is kind of a 
follow on to Chairman Dingell's line of questioning earlier 
regarding H.R. 1. And he asked you a number of yes or no 
questions, and I think you responded to pretty much everyone of 
them yes that H.R. 1 and the $61 billion worth of cuts would 
hurt this program and that program and the other program. Do 
you believe that we need to restore fiscal sanity to our 
budget? Yes or no?
    Ms. Sebelius. Yes, sir.
    Mr. Gingrey. Do you believe then that the $61 billion in 
discretionary cuts in the CR for fiscal year 2011 contained in 
H.R. 1 will help the Federal Government reduce its current 
budgetary deficit? Yes or no?
    Ms. Sebelius. Sir, I believe that the President has put a 
very responsible budget forward and it is one that----
    Mr. Gingrey. I am not talking about 2012 now, Madame 
Secretary. I am talking about H.R. 1, the CR and the $61 
billion worth of cuts that Chairman--former Chairman Dingell 
was attacking.
    Ms. Sebelius. I support the President's notion that we have 
to make smart and strategic cuts because we have got budget----
    Mr. Gingrey. So the answer is yes. I thank you, Madame 
Secretary. And Mr. Chairman, I will yield back my 13 seconds.
    Ms. Sebelius. I don't think the answer was yes, but----
    Mr. Pitts. Chair thanks the gentleman. Gentleman's time is 
expired and the Chair recognizes the gentleman from New York, 
Mr. Weiner, for 5 minutes for questions.
    Mr. Weiner. Thank you, Madame Secretary. Welcome. As to 
this notion that we didn't invite you to come testify last year 
after the passage of the bill, having heard these questions all 
I have to say to you is you are welcome. I just wanted--
probably no member of the Government, maybe even in history, 
has had to spend so much of her time swatting away lies. So let 
me kind of run through some things. Maybe we can cover in four 
minutes and 33 seconds to try to get some truth on some of the 
big questions of the day.
    First of all, this notion that if you give people a subsidy 
and incentive to purchase health insurance somehow that they 
are not going to want it, that this individual mandate is 
somehow this huge burden. You might not be aware of this, but I 
will tell you the number of people in Romney Care in 
Massachusetts which also had a mandate that chose not to sign 
up after they got the subsidy; chose instead to pay for the 
penalty or the tax--whatever we are going to call it, was .65 
percent. Meaning that when you offer the people to get 
insurance for their families to get better healthcare and a 
better life they take it.
    So the idea that this mandate if it disappears will somehow 
have a dramatic impact, maybe one percent of people would be 
impacted. But just so we understand and you can clear it up for 
us--the reason there is a requirement that people get insurance 
when offered a subsidy and incentives to get it, it is because 
if they don't get it and they are uninsured when they need 
hospital care or healthcare costs, they pass it along to the 
rest of society. Is that right?
    Ms. Sebelius. That is correct. That is correct.
    Mr. Weiner. The second thing is we have heard a lot of 
the--in the repeal efforts this being called a job killing 
bill. If we repeal the Healthcare bill would the subsidies 
going to small businesses, the tax credits to provide 
healthcare for their workers making those workers less 
expensive, would those subsidies disappear if we repeal the 
bill?
    Ms. Sebelius. Yes, sir.
    Mr. Weiner. Thank you. Next is this notion about Medicaid 
providing this enormous unfunded liability in the out years. Is 
it not true that under the bill any additional people covered 
under Medicaid which are poor people but they are not going to 
be as poor under the new bill since we are going to raise the 
limit a bit--not to a lot, it is still--you have to have a 
$30,000 family income for a family of four. It is not a lot of 
money. That the--it provides no additional cost at all to the 
States until at least the year 2017. Is that correct?
    Ms. Sebelius. That is correct.
    Mr. Weiner. And in the year 2018 when there is a marginal 
difference, if the number of poor people in the States goes 
down, meaning the economy has improved, meaning fewer people 
are poor enough to be eligible for Medicaid, more people are 
working, those costs could go down as well if there are fewer 
people on Medicaid. Could there not?
    Ms. Sebelius. That is correct.
    Mr. Weiner. And I assume that all of us believe and we hope 
that the economy is going to keep getting better. We have 
Republican Governors here saying my costs are going to go 
through the roof. Well, they only go through the roof if you 
are a crummy Governor and your poverty in your State continues 
to go up. Is that correct? Well, you--never mind, never mind, 
never mind.
    Ms. Sebelius. Thank you.
    Mr. Weiner. You can leave off the crummy Governor part. 
That is me editorializing. Finally, another thing my Republican 
friends have said again and again is this is a trampling of 
states' rights, that the most powerful Secretary is taking more 
and more control. I am going to give you a couple of things 
here. First of all, is it not true that the exchanges are going 
to be run by the States?
    Ms. Sebelius. If they choose to do so, absolutely.
    Mr. Weiner. If they choose to do so. Is it not true that 
the tort laws which are now States by States--there was a 
decision made in this law by the people who wrote the law not 
to trample on states' rights with tort laws but now the 50 
States still have their Tort Laws in effect. Is that correct?
    Ms. Sebelius. That is correct.
    Mr. Weiner. Is it also not true that State insurance 
commissioners and commissions and the State governance of 
insurance was left intact?
    Ms. Sebelius. At the State level with additional resources 
for those States.
    Mr. Weiner. Correct. We actually empowered them. They now 
have the ability----
    Ms. Sebelius. Correct.
    Mr. Weiner [continuing]. To do things to hold down rates 
and so forth. So much for this notion of we are centralizing 
power in your office or centralizing the Federal Government. We 
went in an opposite direction. We did not go the direction I 
would have like to expanding Medicare which is a much better 
idea by the way Madame Secretary--expanding Medicare little by 
little. We went a different way.
    And one final point on this notion of expanding the 
office--your power of your office. These 1115 waivers that you 
have been given are an effort each one is you saying we are 
going to be flexible to allow to respond to your expression of 
what is going on in the States, in the marketplace, at the 
business so long as we get to the outcome we all aspire to 
which is more people getting affordable coverage, reducing the 
cost to people along the way. Isn't it the waivers makes the 
point that this is not this intractable, inflexible, 
centralized monolith, that it is a conversation that is going 
on between States and businesses and your office to try to make 
sure we get the outcomes we all want?
    Ms. Sebelius. I think the bill recognizes the framework 
that States know their markets best. They are the laboratories 
of innovation, they work to provide a State----
    Mr. Weiner. But on those waivers are an expression of that 
as well, are they not?
    Ms. Sebelius. Absolutely.
    Mr. Weiner. OK. In 5 minutes we did one, two, three, four, 
five, six, seven, eight, nine lies told by the Republicans. 
Imagine if we had more time but we don't. Thank you, Madame.
    Mr. Pitts. The gentleman's time is expired. The Chair 
recognizes the gentleman from Ohio, Mr. Latta, for 5 minutes.
    Mr. Latta. Well, thank you, Mr. Chairman. Secretary, thank 
you very much for being with us today. And I am going to--I 
would like to change track just a little bit and in reading 
your testimony on page eight under the Advance the Health 
Safety and Wellbeing of the American People it says child 
support and fatherhood initiative. And the two sentences I am 
interested in--the budget includes 305 million in fiscal year 
2012 and 2.4 billion over 10 years for the child support and 
fatherhood initiative.
    This initiative is designed to promote strong family 
relationships by encouraging fathers to take responsibility for 
their children changing policies so that more of the father's 
support reaches their children continuing a commitment to 
vigorous enforcement. I guess my first question, Madame 
Secretary, is where it states here that we are going to 
encourage fathers to take responsibility for their children. 
What encouragement are we going to be offering them?
    Ms. Sebelius. I think it, Congressman, it refers to working 
with States on a more effective and vigorous enforcement of 
child support orders and seeking child support orders from the 
outset, and making sure that there is a financial connection 
between fathers and their children that they have borne.
    Mr. Latta. OK. Let me follow up with that. And the reason I 
ask--this really caught my attention because several lifetimes 
ago I was in the Ohio Senate. I chaired the Senate Judiciary 
Committee and we had a large bill that I had--that I sponsored 
in dealing on especially juveniles and juvenile crime, et 
cetera. And one of the judges that appeared before us during 
about I think it was like 18 or 19 hearings on that piece of 
legislation. That as we were going through it and we were 
talking about parents it really came down to and I think this 
one judge really caught the essence of the entire day. He said 
it was really--and what we are looking at is an abdication of 
parental responsibility. And I guess the next question would be 
then is that do we have any current programs, models that we 
can base the belief or successes that this is going to work 
with?
    Ms. Sebelius. I am sorry, sir. Do we have----
    Mr. Latta. Do we have any current programs or any other 
models out there that is going to show--you know if we are 
going to spend 305 to 2.4 billion over 10 years do we have 
anything out there that is going to show that this is going to 
work?
    Ms. Sebelius. Well, we have--I think this is part of the 
TANF umbrella and I do think we have data that indicates there 
are strategies that are more effective than others and what we 
are trying to do is improve this effort along the way to make 
sure that child support is not only effectively administered 
but that more of these dollars will actually go to the children 
and not be siphoned off along the way. So it is a double 
improvement.
    Mr. Latta. OK. And I guess the--you know it really comes 
down to you know can Government really change some of these 
folks out there, the way that they are parent--I would guess 
you would say non-parenting right now?
    Ms. Sebelius. Well----
    Mr. Latta. And if I could just--and I am going to pose this 
too even going back on a farther lifetime we used to have what 
they called Bureau Support. And I remember when I was working 
in the prosecutor's office many moon ago I asked one gentleman 
if he wanted to go to jail for not paying his support and he 
said I don't care. And those are the kind of----
    Ms. Sebelius. Well, unfortunately, I wish there was a law 
that you could pass that would do just what you are suggesting, 
but at a minimum I think that what we can do is be effective in 
terms of trying to make sure that children are not penalized 
financially by a father who would walk away. But I think this 
also includes fatherhood engagement increases, and increased 
access in visitation. Often those two things are tied together. 
If a father is really prohibited from connecting with his 
children, he is less likely to be a financial provider. And so 
I think it looks at the whole, the overall package of family.
    Mr. Latta. And if I could just--my last minute here going 
back to a question that has come up I know from Mr. Pallone, it 
is a question of--it is in the page 3 the budget limited 
subsidies to Children's Hospitals Graduate Medical Education. 
And it says if--in focusing instead on targeting those 
investments to increase the primary care work force. I know a 
lot of the time when people are coming in from Children's 
Hospitals from Ohio that they say that they are the step 
children, that they are not getting the dollars. They are not 
getting the dollars from NIH. What are we targeting then in 
your testimony it says instead targeted investments to increase 
primary care workforce?
    Ms. Sebelius. Well, the--again, I don't think this is an 
easy cut to put on the table and I can guarantee you that in a 
budget that we had full resources this would not be a preferred 
cut. The GME dollars are being redirected to, I think, programs 
that have as an exclusive focus the sort of primary care 
provider network recognizing that we are going to need 
additional primary care docs looking forward.
    Mr. Latta. Thank you, Mr. Chairman. My time has expired and 
I yield back.
    Mr. Pitts. Gentleman's time has expired. Chair recognizes 
the gentlelady from Illinois, Ms. Schakowsky for 5 minutes for 
questions.
    Ms. Schakowsky. Thank you, Mr. Chairman. Madame Secretary, 
I want to thank you so much for being here today. We have asked 
you to lead a historic effort and I can't think of anyone 
better able to do that given your experience as an insurance 
industry regulator and as a Governor. So clearly you have the 
mindset of Governors as you go about your business.
    We have asked you to reign in an out of control private 
insurance industry that on a daily basis denies coverage and 
benefits to healthcare consumers. I am interested that my 
colleagues on the other side of the aisle seem more interested 
in arranging your office structure than rooting out those 
abuses. And I am interested that they have attacked the size of 
the new Center for Consumer Information and Insurance 
Oversight. By my calculation the 272 positions that you have 
requested to staff CCHO is the equivalent of about 16 House 
offices. I know our staffs work very hard just as your staff 
does, but I don't think that is an enormous number of people 
when we have tasked them with setting up the new standards and 
structures created under the Affordable Care Act.
    Let me also say you know that we heard from the other side 
of the aisle this notion that all that Americans really want is 
for government to get out of the way when it comes to their 
healthcare. That is really not my impression in the least. We 
certainly don't need more evidence than the popularity of 
Medicare, the importance of Medicaid leaving the Affordable 
Care Act aside. But is it your sense that what the American 
people want is to reject help from the Government to cover 
their healthcare----
    Ms. Sebelius. Well, as you said, Congresswoman, I think 
Medicare is----
    Ms. Schakowsky [continuing]. To assure their coverage?
    Ms. Sebelius [continuing]. Enormously popular and I think 
the--probably the second most popular insurance program may be 
the Children's Health Insurance Program both of which are 
Government-based programs delivering vital services to millions 
and millions of Americans.
    Ms. Schakowsky. And I think it is just important to say 
over and over again that, far from being a Government takeover 
of healthcare, that the Affordable Care Act, though some of us 
felt perhaps it shouldn't be this way, relies entirely on the 
private insurance companies with some help from the Government, 
that this is a private-sector-based plan that we do--that we 
are doing. So let me ask a few questions on behalf of my 
constituents.
    If you were denied funding to implement the Affordable Care 
Act, the Affordable Care, will health insurance purchasers know 
that at least 80 percent of their premium dollars will be spent 
on medical care? Purchasers--will we have any guarantee that 
that will happen?
    Ms. Sebelius. It will be very difficult to implement the 
medical loss ratio as you have described.
    Ms. Schakowsky. In States like Illinois without any rate 
approval requirements, how would rates that are out of line 
even be enforced?
    Ms. Sebelius. Well, again I think it would be--one of the 
requirements is that we help to identify excessive rates and at 
least post them so consumers have some way of judging. But that 
would not be available to consumers.
    Ms. Schakowsky. But with the Affordable Care Act, yes, I 
think we would get some help in Illinois.
    Ms. Sebelius. Right.
    Ms. Schakowsky. But without it we are simply----
    Ms. Sebelius. That is correct.
    Ms. Schakowsky [continuing]. Totally at the mercy of the 
insurance companies. What does it mean for seniors and people 
with disabilities who are counting on the phase ``out of the 
doughnut hole'' if the Affordable Care Act were ultimately 
repealed?
    Ms. Sebelius. Well, clearly those additional benefits to 
seniors--which include, as you know, annual wellness visit, an 
elimination of co-pays for preventive screenings and health 
and, as you say, a gradual elimination of the doughnut hole 
starting this year with a 50 percent discount--that would cease 
to be a Medicare benefit.
    Ms. Schakowsky. All those things just disappear. Let me 
quickly say, I am wondering, because process has been attacked, 
can you tell us briefly the process through which HHS adopted 
the rules that deal with the 80 percent loss ratio?
    Ms. Sebelius. Well, Congresswoman, we were directed and 
followed this very carefully working with the Nation's 
insurance commissioners to ask for their input and advice on 
the outline of a medical loss ratio--what portion, what element 
should be included in the medical portion of the 80 percent and 
what should be outside that. They made a unanimous 
recommendation to our office.
    This fall we adopted 100 percent of what they recommended 
to us and that is the rule. So this is not an HHS rule in so 
far as we did not design it. The Nation's 50 insurance 
commissioners made the recommendation which we adopted.
    Mr. Pitts. The gentlelady's time is expired and Chair 
recognizes gentleman from New Jersey, Mr. Lance, for 5 minutes 
for questions.
    Mr. Lance. Thank you, Mr. Chairman, and good morning to 
you, Madame Secretary.
    Ms. Sebelius. Good morning.
    Mr. Lance. I am new to the committee and I look forward to 
working with you on issues of mutual concern. I have the honor 
of representing a district that is arguably the medicine chest 
of the Nation and I would like to think of the entire world. 
And regarding the President's proposed budget there is a 
suggestion that the data exclusivity be reduced from 12 years 
to 7 years. I personally oppose that and I do not think it is 
in the best interest of the Nation's health. There has been 
extensive economic modeling on this at Duke University and the 
modeling indicates that there is a range of between 12 and 16 
years is the time needed to allow an innovator in bio-pharma to 
recoup the amount spent in order to bring to market needed 
medicines in this regard. And Madame Secretary, I would like 
your comments regarding the suggested reduction in the fiscal 
year 2012 budget on data exclusivity from 12 to 7 years.
    Ms. Sebelius. Congressman, I think there is a great 
importance in making sure that we continue to accelerate our 
leading position in breakthrough science. And certainly your 
State is renowned for being a great leader in that.
    Mr. Lance. Thank you.
    Ms. Sebelius. I think the balance, as you recognize, is not 
only making sure that companies can recoup their investment and 
are profitable--because if they are not profitable, they are 
not going to continue research--but that, as quickly as 
possible, once that determination has been made, that 
breakthrough medication is also widely available and affordable 
to the population. And that is attention that I think continues 
to exist.
    The president believes that based on information--and I 
know that there are competing experts on how long and----
    Mr. Lance. Yes.
    Ms. Sebelius [continuing]. How much evergreening should go 
beyond the patent protection, that seven years would indeed 
accomplish the goals of both returning the profit and 
continuing the research but also making the medication widely 
available.
    Mr. Lance. Thank you for your response. The last time this 
committee examined this issue in an overwhelmingly bipartisan 
fashion the committee chose to retain the 12 years and I look 
forward to continuing discussions with your department on this 
matter. Secondly, Madame Speaker, regarding PADUFA there is the 
challenge now with its reauthorization and at the most recent 
reauthorization there was included the REMS, the Risk 
Management and Mitigation Strategies and at least in some 
instances it is my judgment that this has been a challenge. For 
example, Johnson and Johnson had a product on the market for 
over 20 years and was required to submit a REMS that took over 
22 months to resolve. Your comments, Madame Secretary regarding 
this as we go about reauthorizing PADUFA over the next year?
    Ms. Sebelius. Well again, I think it is an area where we 
are mindful of time delays on behalf of not only companies but 
certainly consumers--at the same time I think mindful of the 
very important safety efforts and I look forward to working 
with you on that striking the right balance.
    Mr. Lance. Thank you and I appreciate your comments in both 
of these important areas that I think go to the heart that we 
have to work together in these areas as we make sure that the 
Nation's health is protected and that we remain the medicine 
chest of the entire world. I yield back the balance of my time.
    Mr. Pitts. Chair thanks gentleman and recognizes gentleman 
from Louisiana, Dr. Cassidy, for 5 minutes for questions.
    Mr. Cassidy. Hey, Madame Secretary, I am not so hurried 
now. First I want to thank Mr. Pallone because apparently he is 
committed to working on equity for FMAP payments, or at least 
Federal support of care for the poor, and I will submit two 
articles for the record with unanimous consent: one from the 
GAO, one from AEI talking about the current inequity in that 
situation.
    Mr. Pitts. Without objection, so ordered.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7590.014
    
    [GRAPHIC] [TIFF OMITTED] T7590.015
    
    [GRAPHIC] [TIFF OMITTED] T7590.016
    
    [GRAPHIC] [TIFF OMITTED] T7590.017
    
    [GRAPHIC] [TIFF OMITTED] T7590.018
    
    [GRAPHIC] [TIFF OMITTED] T7590.019
    
    [GRAPHIC] [TIFF OMITTED] T7590.020
    
    [GRAPHIC] [TIFF OMITTED] T7590.021
    
    [GRAPHIC] [TIFF OMITTED] T7590.022
    
    [GRAPHIC] [TIFF OMITTED] T7590.023
    
    [GRAPHIC] [TIFF OMITTED] T7590.024
    
    [GRAPHIC] [TIFF OMITTED] T7590.025
    
    [GRAPHIC] [TIFF OMITTED] T7590.026
    
    [GRAPHIC] [TIFF OMITTED] T7590.027
    
    [GRAPHIC] [TIFF OMITTED] T7590.028
    
    [GRAPHIC] [TIFF OMITTED] T7590.029
    
    [GRAPHIC] [TIFF OMITTED] T7590.030
    
    [GRAPHIC] [TIFF OMITTED] T7590.031
    
    [GRAPHIC] [TIFF OMITTED] T7590.032
    
    [GRAPHIC] [TIFF OMITTED] T7590.033
    
    [GRAPHIC] [TIFF OMITTED] T7590.034
    
    [GRAPHIC] [TIFF OMITTED] T7590.035
    
    [GRAPHIC] [TIFF OMITTED] T7590.036
    
    [GRAPHIC] [TIFF OMITTED] T7590.037
    
    [GRAPHIC] [TIFF OMITTED] T7590.038
    
    [GRAPHIC] [TIFF OMITTED] T7590.039
    
    [GRAPHIC] [TIFF OMITTED] T7590.040
    
    [GRAPHIC] [TIFF OMITTED] T7590.041
    
    [GRAPHIC] [TIFF OMITTED] T7590.042
    
    [GRAPHIC] [TIFF OMITTED] T7590.043
    
    [GRAPHIC] [TIFF OMITTED] T7590.044
    
    [GRAPHIC] [TIFF OMITTED] T7590.045
    
    [GRAPHIC] [TIFF OMITTED] T7590.046
    
    [GRAPHIC] [TIFF OMITTED] T7590.047
    
    [GRAPHIC] [TIFF OMITTED] T7590.048
    
    [GRAPHIC] [TIFF OMITTED] T7590.049
    
    [GRAPHIC] [TIFF OMITTED] T7590.050
    
    [GRAPHIC] [TIFF OMITTED] T7590.051
    
    [GRAPHIC] [TIFF OMITTED] T7590.052
    
    [GRAPHIC] [TIFF OMITTED] T7590.053
    
    [GRAPHIC] [TIFF OMITTED] T7590.054
    
    [GRAPHIC] [TIFF OMITTED] T7590.055
    
    [GRAPHIC] [TIFF OMITTED] T7590.056
    
    [GRAPHIC] [TIFF OMITTED] T7590.057
    
    [GRAPHIC] [TIFF OMITTED] T7590.058
    
    [GRAPHIC] [TIFF OMITTED] T7590.059
    
    [GRAPHIC] [TIFF OMITTED] T7590.060
    
    [GRAPHIC] [TIFF OMITTED] T7590.061
    
    [GRAPHIC] [TIFF OMITTED] T7590.062
    
    [GRAPHIC] [TIFF OMITTED] T7590.063
    
    [GRAPHIC] [TIFF OMITTED] T7590.064
    
    [GRAPHIC] [TIFF OMITTED] T7590.065
    
    [GRAPHIC] [TIFF OMITTED] T7590.066
    
    [GRAPHIC] [TIFF OMITTED] T7590.067
    
    [GRAPHIC] [TIFF OMITTED] T7590.068
    
    [GRAPHIC] [TIFF OMITTED] T7590.069
    
    [GRAPHIC] [TIFF OMITTED] T7590.070
    
    [GRAPHIC] [TIFF OMITTED] T7590.071
    
    Mr. Cassidy. Secondly, Madame Secretary, I have got young 
children so what I am about to say just strikes me. Sometimes 
it seems like opposite day. So here we have a report from 
Chairman Bernanke saying that Medicaid among other entitlements 
are driving long-term deficit spending. You in your opening 
remarks mention how we, the Administration is concerned 
regarding the deficit, and yet when I look at all the 
literature given I see that here, according to CBO, Federal 
spending on Medicaid will increase by $674 billion over the 
next 10 years. I see from CMS actuaries that Federal--that 
State spending will go up by 190 billion and if you include the 
latest estimate from CBO that is probably more like 250 billion 
over the next 10 years. Now, clearly you are concerned about 
it.
    I have a copy of your letter, which suggests to Governors a 
way that they can do it. For example, you suggest they could 
eliminate optional benefits like pharmacy coverage. And 
Massachusetts is doing that sort of thing because, as their 
budget chairman says, their current Medicaid growth is 
unsustainable. Mr. Engel--I'm sorry he has left, but I have a 
Deloitte Report which I will submit for the record that 
estimates that under PPACA 50 percent of New York's State 
budget may go to Medicaid by 2030. Now with all this said, 
first, it does seem like opposite day. It does seem as if there 
is concern for the deficit and yet we are driving the deficit 
with this bill. And secondly, regarding maintenance of effort, 
you mentioned your hands are kind of tied, if you will. Will 
you commit to working with Congress, with us, to help the 
Governors with this maintenance of effort so that they don't 
have to necessarily slash dental benefits in Massachusetts or 
something else in New York? I ask your thoughts.
    Ms. Sebelius. Well, Congressman, I share your concerns 
about healthcare costs driving the deficit and I don't think 
there is any question that it is the number one cost driver. I 
would suggest that what we have to do--and I am convinced we 
have a new platform to work on this--is actually also look at 
the underlying cost drivers with which rather--whether you are 
talking about the public programs, Medicare or Medicaid, or the 
private sector trying to provide healthcare, we have a 
trajectory on healthcare costs that is simply unsustainable.
    Mr. Cassidy. Can I--just because I have limited time and I 
want your thoughts. Massachusetts, as the Governor said, is 
certainly the harbinger of how things are going to come. I see 
over the last 10 years their State budget going towards 
healthcare expenses has gone from 21 percent to 37 percent. 
That is why they are now slashing benefits. So it seems like, 
if this is going to control costs, when does it begin?
    Ms. Sebelius. Well, I think that the Massachusetts program 
is a great example. And I think it is a great example of what 
is possible on the exchange side and with coverage which 
Congressman Weiner mentioned. But it also had a missing 
component. Governor Romney and certainly Governor Patrick would 
be the first to tell you that when Massachusetts designed their 
program they focused on access and not on cost containment 
and----
    Mr. Cassidy. Now if I can----
    Ms. Sebelius [continuing]. They are revisiting the cost 
containment phase.
    Mr. Cassidy. I am with you on that and when I look at what 
they--I am--just know and I have limited time. When I look at 
what they are proposing, none of which has been proven to 
control costs, it is all theoretical but it has not actually 
been proven. I think the Governor at one point proposed 
provider fee--freezing provider fees and that was thrown out by 
a judge. So it really seems as if the cost control mechanisms 
which again is similarly in PPACA have not been established to 
control costs.
    Ms. Sebelius. Well, I think the Affordable Care Act has as 
an underlying premise a huge number of underlying cost control, 
both delivery system changes but I think more importantly--and 
unfortunately the Congressional Budget Office hasn't scored 
this--but the effort to look at the drivers of chronic disease, 
which is where we spend about 75 cents of every heath dollar, 
obesity and smoking can have the most enormous effect on your 
children's health care.
    Mr. Cassidy. I wish I had 5 more minutes. Let me interrupt. 
Let me ask one more thing because I am out of time. You 
mentioned that the CLASS Act, you are kind of concerned about 
it. It is $75 billion scored by CBO towards the credit side of 
PPACA. On the other hand, you mentioned that it is 
unsustainable. It seems a little disingenuous for something 
which really long term is not really sustainable to then claim 
it as kind of a credit in terms of proving the costworthiness 
of a bill.
    Ms. Sebelius. The Deficit Commission recommendations were 
that we either should look at repealing the CLASS Act or 
reforming it, and we have the flexibility administratively to 
do the latter. That is exactly what we intend to do, and I look 
forward to visiting with this committee, as I pledge to do, to 
tell you the outlines of what we think will be a sustainable 
program.
    Mr. Cassidy. And could I ask you the one question I asked 
at the beginning. Would you pledge to work with us on helping 
the States on a bipartisan basis for their maintenance of 
effort?
    Ms. Sebelius. We are in the process of doing that right 
now. Yes.
    Mr. Pitts. The gentleman's time has expired.
    Chair recognizes gentleman from Kentucky, Mr. Guthrie, for 
5 minutes for questions.
    Mr. Guthrie. Thank you, Mr. Chairman. Thank you Madame 
Secretary. I think I may be the last one on the panel, so 
hopefully we are moving forward. One thing that Mr. Weiner 
brought up if you expand Medicaid to 100 to 133 percent you are 
going to bring on children and the parents but you also are 
going to bring on the disabled and the elderly in big 
proportions. And if the economy does grow as Governors are 
looking if you think we can just grow out of it the most 
expensive people who participate in Medicaid are the disabled 
and elderly which are more not as elastic to getting jobs if 
the economy moves forward. They are still going to be with us. 
So the fact that we can just grow out of this is not really 
necessary. I just want to make that point.
    And when you made your opening remarks you listed a lot of 
the things that people have been listening that people like 
about the healthcare act: preexisting conditions for children, 
26-year-olds you can stay on, and you also said--and I think I 
will quote ``businesses are getting relieved. They are also--
business are getting relieved from rising healthcare costs.'' 
And I can tell you from businesses I know that because of the 
new benefits that are mandated premiums are rising as they have 
already started rising. So I just--the evidence that business 
costs are decreasing--I--we haven't seen that. Hopefully you 
have and I can share it with businesses and see what they need 
to do differently.
    Ms. Sebelius. Well, short term, Congressman, as you know, 
small business owners are eligible for a tax credit which helps 
provide some relief to the costs of covering their employees. 
And what I hear from small business owners across the country 
is that is often their biggest bottom line cost and the way 
they lose their best employees to their larger competitors. So 
that provides some short term relief. Long term relief comes in 
2014 with a new market where they will finally have the 
leverage buying power that their large competitors have.
    Businesses on average, small business owners, spend about 
25 percent more on exactly the same coverage as does someone 
with market power, and in 2014 those rates--and, again, CBO and 
other actuaries have said--those rates will come down fairly 
dramatically.
    Mr. Guthrie. But medium-sized businesses are seeing--I know 
businesses with 400 employees and they have seen an increase 
because of the new mandated benefits. I mean that I moving 
forward already reflecting--because you can increase benefits. 
But if you are going to increase benefits you are also going 
to--there is a cost to that and it is reflected in the premiums 
businesses are paying.
    Ms. Sebelius. Well again, the actuarial reports that I have 
seen indicate that there is a relatively insignificant impact 
at this point on the kinds of benefits going forward. And as 
you know we are trying to--the Waiver Program that has been 
mentioned a number of times which dealt with one feature of the 
bill, the Annual Limit, was designed to try and insulate 
businesses in the short term from the kind of rate shock that 
they may see. So we are in a balancing act getting between now 
and 2014.
    Mr. Guthrie. So we need to be mindful--obviously businesses 
plan for their long term success, too. And I don't--you 
understand that. I know we need to work together. I had a 
couple of physicians. One that wanted about a minute. Can I 
give you a minute and him a minute? Yield a minute to the 
gentleman from Texas.
    Mr. Burgess. Thank you. Madame Secretary, again thank you 
for being here and you know where we are. Don't make yourself 
so scarce. Going back to 4101A and B for just a moment: the 
mandatory funding for the construction of the clinics, the 
discretionary funding for the staffing of the clinics. There 
was no request in the budget for the discretionary money for 
the funding of the clinics. So are we likely to be left with a 
situation where we are required to build them under mandatory 
funding but no one to staff them under discretionary funding? 
These are the school clinics under 4101A and B?
    Ms. Sebelius. Congressman, all I can tell you is the budget 
does include in the Health Resources and Services 
Administration a request for increased funding with regard to 
community health centers for the workforce for new National 
Health Service Corps providers and new primary care providers.
    Mr. Burgess. It is specifically the school-based clinic.
    Ms. Sebelius. But I--those are part of the----
    Mr. Burgess. Maybe you could get that answer back to me in 
writing.
    Ms. Sebelius. Yes, that is fine.
    Mr. Burgess. I yield back to the gentleman from Kentucky.
    Mr. Guthrie. I want to yield the remainder to the gentleman 
from Louisiana.
    Mr. Cassidy. Just one more question, Madame Secretary. I am 
sorry.
    Ms. Sebelius. OK.
    Mr. Cassidy. To follow up on Congresswoman Schakowsky's--
since it is my understanding that we are raising Medicare 
premiums to close that doughnut hole, what will the seniors do 
if they are able to keep their own money as opposed to closing 
the doughnut hole? And of course----
    Ms. Sebelius. I am sorry. We are raising Medicare premiums?
    Mr. Cassidy. It is my understanding that Medicare Part D 
premiums are going up to close that doughnut hole. Is that not 
true?
    Ms. Sebelius. No, sir, I don't think that is accurate.
    Mr. Cassidy. Well, then I will follow up with that at a 
later date.
    Ms. Sebelius. OK.
    Mr. Cassidy. Thank you. I yield back.
    Mr. Burgess. Will you yield to me?
    Mr. Cassidy. Yes, I yield to the Texan from Texas.
    Mr. Burgess. We haven't yet talked about the sustainable 
growth rate formula and that was one of the big omissions from 
PPACA. All of the money taken out of Medicare and not a single 
dime for a down payment for buying us out of the SGR 
reductions. What are your plans for getting us out of the SGR?
    Ms. Sebelius. Well, as you know, Congressman, the SGR dates 
back to 2002 and has been an issue that has not been 
effectively dealt with. This President since his first budget 
has recommended a long term fix. He has proposed in this year's 
budget not only working with Congress for a 10 year resolution, 
but also put more than two years of funding into the budget. So 
we would look forward to working with this committee to find a 
long term fix. I agree with you it is probably the single most 
threatening issue to Medicare beneficiaries on the horizon.
    Mr. Pitts. The gentleman's time is expired. Chair 
recognizes the gentleman from New York, Mr. Towns for 5 
minutes.
    Mr. Towns. Thank you very much, Mr. Chairman. Secretary 
Sebelius, thank you so much for testifying before the 
committee--subcommittee. I know your time is valuable, so I 
will be brief with my questions.
    First, I should note that I am pleased to see the direction 
that the Administration has taken on the budget requests. I am 
concerned that should the cuts proposed by H.R. 1 pass, HHS 
would not be able to deliver on key services and programs that 
benefit the public. Let me--an area that I am very concerned 
about is the community health centers. They provide an 
extremely valuable service in my district as I imagine they do 
for many members on both sides of the aisle, even though some 
might not admit it. I understand that the proposed cuts in H.R. 
1 would have a devastating impact on community health centers, 
possibly closing up to 127 health centers and cutting off 11 
million patients over the next year. In contrast, how has the 
HHS budget request dealt with these very valuable centers?
    Ms. Sebelius. Well, Congressman, I share your appreciation 
for the critical services that health centers provide in our 
most underserved areas. And between the investment of the 
Recovery Act, the President's budgets, and the Affordable Care 
Act, the goal is to really double the number of Americans who 
have access to those vital high quality, lower cost, preventive 
services. And the President has made a budget request for an 
increased support for community health centers including for 
providers who serve in that--in those centers, training 15,000 
new providers over the course of the next five years and having 
those folks available. Absent that expanded footprint, we will 
have far more people accessing healthcare in the least 
expensive--I mean, the most expensive, least effective way 
through the doors of emergency rooms or just not getting the 
health care at all.
    Mr. Towns. Let me say I was watching this hearing on TV 
earlier and I saw a member raising a booklet saying this is why 
you are in the minority--and I hope that you know you are not 
affected by that in any way because you know sometimes, you 
know it takes some people a little longer to figure out what is 
going on. And I think that we need to just move forward because 
I think that there is no question in my mind that this is going 
to save a lot of lives and eventually we are going to save a 
lot of money. There is no question about it.
    So I am hoping that, you know you don't let this deter you 
in any way. You continue to move forward. Let that encourage 
you because let us face it, eventually they will get the 
message as well. So I want to thank you very, very much for the 
work that you are doing and we look forward to continuing to 
work with you.
    I think the only thing I would hoped that we would be able 
to put together some more private and public partnerships maybe 
even around the community health centers to see in terms of 
what we might be able to do to sort of keep them open because 
they provide such a valuable service in many, many 
neighborhoods.
    Ms. Sebelius. Well Congressman, every place I go I try to 
visit the community health center that is closest and I have 
seen some extraordinary providers across this country who not 
only are providing life saving medical care, but incredible 
family support. And I don't disagree that it is proven over and 
over again to be not only very high quality care but at a far 
lower cost than any variety of options. So I would look forward 
to looking for you to make sure that this incredibly important 
public support stays in place.
    Mr. Towns. Thank you very much and on that I yield back.
    Mr. Pitts. Chair thanks gentleman. The gentleman from 
Kentucky, Mr. Whitfield, is recognized for 5 minutes for 
questions.
    Mr. Whitfield. Well, thank you, Mr. Chairman. And Secretary 
Sebelius, thank you for being with us today. One comment that I 
just wanted to make which probably doesn't have to be made but 
I am sure you have felt a lot of animosity, even a lot of 
frustration over this whole healthcare bill as many in America 
has felt. And one of the reasons that people have felt that way 
is that they brought a 2,400 page bill to the House floor last 
year and we were not able to offer one amendment on the House 
floor.
    And I don't think the American people appreciate bills of 
that magnitude having the impact on this country and the 
legislative body not being able to offer one amendment on the 
House floor. It is certainly not your fault. You were not the 
Speaker, but from that background and because of that process 
there is still very strong feelings about the issue.
    But one of the questions I would like to just ask you, many 
members of Congress to be honest did not have much of an idea 
of what was even in the bill when we voted on it. And as 
Secretary of HHS I am assumed that in the process of developing 
the bill you must have at least been consulted. You were 
hopefully able to suggest ideas and have some input into the 
process.
    So my first question would be did you have an opportunity 
to have input into the process?
    Ms. Sebelius. Yes, Congressman, I did and as you know there 
were five committees, three in the House and two in the Senate. 
There were numerous hearings and yes----
    Mr. Whitfield. No, I know that now. Just a minute----
    Ms. Sebelius [continuing]. I did----
    Mr. Whitfield. We, in fact, we adopted eight amendments in 
the Energy and Commerce Committee. All of them were stripped 
out before it went to the floor and Democrats and Republicans 
adopted those amendments. They all were stripped about and we 
were not offered--able to offer one amendment on the floor. But 
here is the question I have. We know that there is going to be 
about 20 million more people on the Medicaid program according 
to all of the numbers that we have seen by the year 2014 or 
whatever. And every Governor that I talk to both Democrat and 
Republican say that one of the reasons they are having 
financial difficulty in these States--not the only reason, but 
one is the fact of the cost of the Medicaid program. Now, the 
States are having great financial difficulty. The Federal 
Government goes without saying. We have a $14 trillion Federal 
debt. How is it concluded that the Federal Government would 
pick up 100 percent of the cost of those additional 20 million 
people on Medicaid?
    Now I have heard some comment, well, the States are not 
going to be hit with this additional cost. Well, the reason 
they are not going to be hit with it is because the Federal 
Government is. So my question would be, how was it determined 
that the Federal Government should do that when we are in worse 
shape at the Federal level than some of the States are at the 
State level?
    Ms. Sebelius. Well, Congressman, I think it was seen as a 
way to have a partnership going forward and, for the first time 
ever, have a benefit level that, regardless of where you lived 
in this country, you were eligible for health insurance so that 
uniformly now, across the country, at--families at 133 percent 
of poverty or less would qualify and for that additional 
population some States are well above that right now, some 
States are well below it. But for the additional population, at 
least for the first three years, it was seen that the Federal 
Government should pick up the lion's share and then gradually 
the State would participate.
    Mr. Whitfield. Well, I--I mean if I had been there I think 
I would have disagreed with that but nevertheless that is what 
it is. But the thing that really bothers me--when you talk to 
primary care physicians today they are already upset about the 
low reimbursement rates for Medicaid patients and I don't think 
I am exaggerating we have two doctors here and maybe some over 
there. Most of the primary care physicians I talk to say we are 
not going to take any more Medicaid patients. So if you put a 
20 million more people on there, they are going to go right 
back to the emergency room.
    Ms. Sebelius. Well, I--at least the doctors who I talk to 
across the country, and I do visit with a lot of them, are not 
happy with the Medicaid reimbursement rates. But the vast 
majority of the people we are talking about have no 
reimbursement rates, are not seeing a doctor, are using the 
healthcare system in a very inefficient way. I think one of the 
reasons that, again, the Affordable Care Act suggests that 
Medicaid doctors for at least the first several years will be 
paid at Medicare rates is a recognition that the Medicaid rates 
across the country are insufficiently low. And that is again 
part of the Affordable Care Act's structure.
    Mr. Pitts. The gentleman's time is expired. We have one 
other member who is not a member of the subcommittee. He is a 
member of the Full Committee. He has waited patiently all 
hearing at our times past. Would you stay for 5 minutes?
    Ms. Sebelius. Yes.
    Mr. Pitts. Thank you, and the Chair recognizes the 
gentleman from Texas, Mr. Green for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman and I appreciate the 
courtesy. Let me waive on. This is my first term on the Energy 
and Commerce Committee. I haven't been on the Health 
Subcommittee and so I appreciate the chance to be here. Welcome 
Madame Secretary.
    Ms. Sebelius. Thank you.
    Mr. Green. And I just want to remind folks the Medicaid 
reimbursement rates are set by the States.
    Ms. Sebelius. That is correct.
    Mr. Green. And we had three Governors here yesterday or a 
couple days ago with our oversight and investigation and they 
wanted more flexibility and they have a lot of flexibility now 
in reimbursement rates. And there are some decisions that can 
be made because--and I think we are right. We understand that 
doctors Medicaid pays less than Medicare. Frankly, in my part 
of the country, TriCare pays less than Medicare. So you know, 
although in the Houston area where I am from we don't have a 
big base, so a lot of physicians won't take TriCare because it 
is so--but that is a State issue. We don't want--we definitely 
don't want the State--Federal Government to set Medicaid rates 
because we would have more Governors up here complaining.
    But the other issue I want to ask is on the Healthcare 
Reform bill, the impact on the teaching health centers, our 
medical schools and that are associated, what is the impact 
that you are seeing on our teaching health centers because we 
are fortunate at least in the Houston area to have three that 
serve our metropolitan area. And my goal is to encourage them 
to get out to our community based health centers and partner 
with them because that way I also want those residents to 
understand they can make a good living in a community based 
health center.
    Ms. Sebelius. Well, recently I had the chance to visit 
again with the head of the Association of Academic Health 
Centers and he joined a group of providers talking about what 
he sees as an enormously important opportunity to begin to 
transform healthcare delivery with the Affordable Care Act. 
That the patient-centered, provider-centered opportunities with 
the kind of payment models that are a part of the Affordable 
Care Act, everything from primary medical home models which 
actually reimburse physicians for keeping their patients 
healthy in the first place and you don't have to wait until 
they go to the hospital to get paid, to bundling care, to using 
the most innovative strategies they see as a wonderful 
opportunity. And, as you say, in many areas already there is a 
lot of discussion with academic health centers and community 
health centers about becoming Accountable Care Organizations 
and combining those strategies to deliver better care to more 
people.
    Mr. Green. OK. I know that H.R. 1 cut or proposed to cut 
1.3 billion from the health centers program and I understand 
the Health Centers Services Resource Administration has 
announced its intention to award new access points, new health 
centers and new sites of existing centers. And as you know this 
funding opportunity to facilitate health centers expansion made 
possible by provisions in the Health Reform Law and the 
President's request. And frankly I worked with the 
Administration under President Bush many times expanding health 
centers funding. Can you tell us how many applications for new 
health centers HRSA has received and how many awards HRSA 
intends to fund, and how many of the awards would HRSA make if 
H.R. 1 if was enacted and 1.3 billion were cut? I know that may 
not be possible now.
    Ms. Sebelius. Congressman, I would love to get you those 
specifics----
    Mr. Green. OK.
    Ms. Sebelius [continuing]. In writing, but suffice it to 
say that the loss of the investment in anticipated would 
severely curtail this program.
    Mr. Green. You have better information than I do, but we 
were understood that there were about 800 applications for 350 
possible awards. But again, you have the exact numbers. That is 
what we have heard. So Mr. Chairman, I know I have a little bit 
left. It is well documented health centers provide high cost 
effective and high quality patient directed care and reduces 
overall costs in the healthcare system. Can you describe the 
overarching impact of the healthcare system and the continued 
healthcare expansion outlined in President's fiscal year 2012 
budget request?
    Ms. Sebelius. Well I think, Congressman, the anticipation 
is that we would be able to gradually move from serving 20 
million Americans to 40 million Americans. And as you know the 
Health Services Resource Administration maps pretty carefully 
where is the underserved need, where are the access points that 
need to be filled. Some are in very rural areas, some are in 
very urban areas and that expansion has provided enormously 
important care to families across this country.
    Mr. Green. Thank you and I appreciate it. And I know I am 
almost out of time, but in the Houston area we got--we started 
on community health centers much later than most parts of the 
country so we are considered I think an under-underserved area. 
But----
    Ms. Sebelius. You putting in a pitch?
    Mr. Green [continuing]. But also the community health 
centers are not refusing Medicaid patients.
    Ms. Sebelius. That is correct.
    Mr. Green. So doctors cannot afford in their practice to 
take them that is why we need expansion of community health 
centers.
    Ms. Sebelius. Some are uninsured, some are Medicaid, but a 
number of people are fully insured and choose a community 
health center as their health home.
    Mr. Pitts. Gentleman's time----
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Pitts [continuing]. Is expired. In conclusion, I would 
like to thank Secretary Sebelius and the members for 
participating in today's hearing. I remind members that they 
have 10 business days to submit questions for the record and I 
ask Secretary Sebelius to respond promptly to the questions.
    Ms. Sebelius. Thank you, Mr. Chairman.
    Mr. Pitts. Members should submit their questions by the 
close of business on March 17.
    Mr. Burgess. Mr. Chairman, would you yield for a moment for 
a unanimous consent request?
    Mr. Pitts. Yes.
    Mr. Burgess. I have a unanimous consent to add the letter 
that I wrote to Secretary Sebelius on February 10 to the 
record.
    Mr. Pitts. Without objection it will be entered into the 
record.
    Mr. Burgess. Thank you.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T7590.072
    
    Mr. Pitts. If there is nothing further before the 
committee, this subcommittee hearing is adjourned.
    [Whereupon, at 12:11 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

    [GRAPHIC] [TIFF OMITTED] T7590.073
    
    [GRAPHIC] [TIFF OMITTED] T7590.074
    
    [GRAPHIC] [TIFF OMITTED] T7590.075
    
    [GRAPHIC] [TIFF OMITTED] T7590.076
    
    [GRAPHIC] [TIFF OMITTED] T7590.077
    
    [GRAPHIC] [TIFF OMITTED] T7590.078
    
    [GRAPHIC] [TIFF OMITTED] T7590.079
    
    [GRAPHIC] [TIFF OMITTED] T7590.080
    
    [GRAPHIC] [TIFF OMITTED] T7590.081
    
    [GRAPHIC] [TIFF OMITTED] T7590.082
    
    [GRAPHIC] [TIFF OMITTED] T7590.083
    
    [GRAPHIC] [TIFF OMITTED] T7590.084
    
    [GRAPHIC] [TIFF OMITTED] T7590.085
    
    [GRAPHIC] [TIFF OMITTED] T7590.086
    
    [GRAPHIC] [TIFF OMITTED] T7590.087
    
    [GRAPHIC] [TIFF OMITTED] T7590.088
    
    [GRAPHIC] [TIFF OMITTED] T7590.089
    
    [GRAPHIC] [TIFF OMITTED] T7590.090
    
    [GRAPHIC] [TIFF OMITTED] T7590.091
    
    [GRAPHIC] [TIFF OMITTED] T7590.092
    
    [GRAPHIC] [TIFF OMITTED] T7590.093
    
    [GRAPHIC] [TIFF OMITTED] T7590.094
    
    [GRAPHIC] [TIFF OMITTED] T7590.095
    
    [GRAPHIC] [TIFF OMITTED] T7590.096
    
    [GRAPHIC] [TIFF OMITTED] T7590.097
    
    [GRAPHIC] [TIFF OMITTED] T7590.098
    
    [GRAPHIC] [TIFF OMITTED] T7590.099
    
    [GRAPHIC] [TIFF OMITTED] T7590.100
    
    [GRAPHIC] [TIFF OMITTED] T7590.101
    
    [GRAPHIC] [TIFF OMITTED] T7590.102
    
    [GRAPHIC] [TIFF OMITTED] T7590.103
    
    [GRAPHIC] [TIFF OMITTED] T7590.104
    
    [GRAPHIC] [TIFF OMITTED] T7590.105
    
    [GRAPHIC] [TIFF OMITTED] T7590.106
    
    [GRAPHIC] [TIFF OMITTED] T7590.107
    
    [GRAPHIC] [TIFF OMITTED] T7590.108
    
    [GRAPHIC] [TIFF OMITTED] T7590.109
    
    [GRAPHIC] [TIFF OMITTED] T7590.110
    
    [GRAPHIC] [TIFF OMITTED] T7590.111
    
    [GRAPHIC] [TIFF OMITTED] T7590.112
    
    [GRAPHIC] [TIFF OMITTED] T7590.113
    
    [GRAPHIC] [TIFF OMITTED] T7590.114
    
    [GRAPHIC] [TIFF OMITTED] T7590.115
    
    [GRAPHIC] [TIFF OMITTED] T7590.116
    
    [GRAPHIC] [TIFF OMITTED] T7590.117
    
    [GRAPHIC] [TIFF OMITTED] T7590.118
    
    [GRAPHIC] [TIFF OMITTED] T7590.119
    
    [GRAPHIC] [TIFF OMITTED] T7590.120
    
    [GRAPHIC] [TIFF OMITTED] T7590.121
    
    [GRAPHIC] [TIFF OMITTED] T7590.122
    
    [GRAPHIC] [TIFF OMITTED] T7590.123
    
    [GRAPHIC] [TIFF OMITTED] T7590.124
    
    [GRAPHIC] [TIFF OMITTED] T7590.125
    
    [GRAPHIC] [TIFF OMITTED] T7590.126
    
    [GRAPHIC] [TIFF OMITTED] T7590.127
    
    [GRAPHIC] [TIFF OMITTED] T7590.128
    
    [GRAPHIC] [TIFF OMITTED] T7590.129
    
    [GRAPHIC] [TIFF OMITTED] T7590.130
    
    [GRAPHIC] [TIFF OMITTED] T7590.131
    
    [GRAPHIC] [TIFF OMITTED] T7590.132
    
    [GRAPHIC] [TIFF OMITTED] T7590.133
    
    [GRAPHIC] [TIFF OMITTED] T7590.134
    
    [GRAPHIC] [TIFF OMITTED] T7590.135
    
    [GRAPHIC] [TIFF OMITTED] T7590.136
    
    [GRAPHIC] [TIFF OMITTED] T7590.137
    
    [GRAPHIC] [TIFF OMITTED] T7590.138
    
    [GRAPHIC] [TIFF OMITTED] T7590.139
    
    [GRAPHIC] [TIFF OMITTED] T7590.140
    
    [GRAPHIC] [TIFF OMITTED] T7590.141
    
    [GRAPHIC] [TIFF OMITTED] T7590.142
    
    [GRAPHIC] [TIFF OMITTED] T7590.143
    
    [GRAPHIC] [TIFF OMITTED] T7590.144
    
    [GRAPHIC] [TIFF OMITTED] T7590.145
    
    [GRAPHIC] [TIFF OMITTED] T7590.146
    
    [GRAPHIC] [TIFF OMITTED] T7590.147
    
    [GRAPHIC] [TIFF OMITTED] T7590.148
    
    [GRAPHIC] [TIFF OMITTED] T7590.149
    
    [GRAPHIC] [TIFF OMITTED] T7590.150
    
    [GRAPHIC] [TIFF OMITTED] T7590.151
    
    [GRAPHIC] [TIFF OMITTED] T7590.152
    
    [GRAPHIC] [TIFF OMITTED] T7590.153
    
    [GRAPHIC] [TIFF OMITTED] T7590.154
    
    [GRAPHIC] [TIFF OMITTED] T7590.155
    

                                 
