[Senate Hearing 112-]
[From the U.S. Government Publishing Office]



 
  DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2012

                              ----------                              


                       WEDNESDAY, MARCH 30, 2011

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tom Harkin (chairman) presiding.
    Present: Senator Harkin, Reed, Pryor, Mikulski, Brown, 
Shelby, Johnson, Kirk, and Moran.

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                        Office of the Secretary

STATEMENT OF HON. KATHLEEN SEBELIUS, SECRETARY

                OPENING STATEMENT OF SENATOR TOM HARKIN

    Senator Harkin. The Labor, Health and Human Services 
Appropriations Subcommittee will come to order.
    We welcome back Madam Secretary to the subcommittee. I want 
to first start by commending you for the outstanding work that 
you are doing to implement our healthcare reform law. It has 
been just 1 year since President Obama signed the Affordable 
Care Act into law, and already millions of Americans are 
reaping major benefits. Those benefits include very strong 
consumer protections. No longer can large health insurers use 
technicalities to cancel your policy if you get sick or impose 
lifetime limits on your benefits. No longer can children be 
denied coverage because of a preexisting health condition. 
Americans have greater access to preventative care than ever 
before, and of course, young adults can now stay on their 
parents' plan until age 26.
    In the past year, your Department has also awarded the 
first grants from the Prevention and Public Health Fund, a new 
fund that will not only improve the health of the American 
people but also help bend the cost curve on healthcare. This 
fund is already being used to help Americans stop smoking, as 
well as to reduce obesity and prevent costly chronic diseases 
like diabetes.
    Your plan for fiscal year 2011 expands on all of this work 
and adds an investment in childhood immunization which data 
shows saves about $6.30 for every dollar that we spend.
    Your Department is implementing these reforms with great 
skill and dedication, and I thank you for your leadership.
    I also want to assure you that as chairman of both this 
Appropriations subcommittee and the authorizing committee, the 
HELP Committee, your Department will continue to receive the 
resources you need to implement the Affordable Care Act. The 
American people will not allow the hard-earned protections and 
benefits in this law to be taken away. And neither will we.
    Reforming healthcare is not only the right thing to do, it 
will save taxpayers money and reduce the deficit by $210 
billion in the first decade and more than $1 trillion in the 
next. And those are not my estimates. They are from the 
nonpartisan Congressional Budget Office.
    I am well aware that some opponents of healthcare reform 
say they intend to use the Labor, HHS appropriations bill, our 
bill, as a vehicle for defunding the Affordable Care Act. That 
will not happen.
    Our topic today is the President's fiscal year 2012 budget 
request for the Department of Health and Human Services. 
Unfortunately, as we all know, Congress still has not closed 
the books on fiscal year 2011. That uncertainty makes it harder 
than usual to evaluate the President's request. For example, 
the House has proposed major reductions to key programs like 
community health centers, Head Start, and the National 
Institutes of Health. We do not yet know the outcome of 
negotiations to complete a budget for fiscal year 2011, but one 
of the things I want to cover in this hearing is what the 
impact of those potential cuts would be, that is, on community 
health centers, Head Start, and the National Institutes of 
Health (NIH).
    Overall, the President's proposed budget for fiscal year 
2012 is a good start. It is a tight budget. Total funding for 
the Department is almost flat compared with fiscal year 2010, 
but it does include some significant increases for key 
priorities like NIH, child care, Head Start, and of course, 
rooting out fraud and waste in Medicare and Medicaid.
    I also applaud the administration for proposing a new early 
learning challenge fund which is intended to improve the 
quality of early childhood education programs. The money for 
this new fund would go through the Education Department, but 
HHS would be a partner in that effort.
    However, some provisions in the President's budget are a 
cause for concern. I recognize that we are operating under 
significant fiscal constraints, but I am greatly disappointed 
by the proposed 50 percent cut to the community services block 
grant program. This funding is critically important for 
community initiatives that provide a safety net for millions of 
low-income people across the country, and I will do whatever I 
can to oppose that cut in any bill that comes out of this 
subcommittee.
    I am also concerned by the proposed $2.5 billion cut to the 
Low-Income Home Energy Assistance Program, as well as the small 
but important $30 million cut--that would be a 72 percent cut--
to the Child Traumatic Stress Network.
    But as I said, overall the budget is a good start.
    Madam Secretary, I look forward to hearing your testimony.
    First, before I yield to Senator Shelby for his opening 
remarks, I have received statements from the full committee 
chairman, Senator Inouye and the vice chairman, Senator 
Cochran. Their statements will be inserted into the record at 
this point.
    [The statements follow:]

            Prepared Statement of Chairman Daniel K. Inouye

    Secretary Sebelius, given the unique geographic challenges in 
Hawaii it is imperative that we continue to work together to address 
the healthcare needs of our population. I would like to take this 
opportunity to thank you for your support in addressing the medical 
needs of the people in Hawaii. I will provide questions for the record.
                                 ______
                                 
               Prepared Statement of Senator Thad Cochran

    Mr. Chairman, thank you for chairing this hearing to review the 
President's fiscal year 2012 budget for the Department of Health and 
Human Services. We are pleased to welcome the Secretary of Health and 
Human Services, Kathleen Sebelius to her third appearance before our 
Subcommittee, and we look forward to working with her to support our 
Nation's investment in healthcare, social services programs, medical 
research and disease prevention.
    I am pleased that your budget includes a $745 million increase for 
the National Institutes of Health. These additional dollars are 
essential if we are to continue to make scientific discoveries in 
cancer, autism, heart disease and the many other maladies that plague 
so many Americans.
    This subcommittee will be challenged to balance the competing needs 
of the programs contained in your $79 billion budget. We look forward 
to working with you to maintain our commitment to fiscal restraint 
while providing much needed increases for high priority programs.
    I am very sorry I cannot stay for the duration of this important 
hearing due to another hearing that requires my attention, but I am 
submitting questions for the record and I look forward to a response.

    Senator Harkin. Senator Shelby.

                 STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Mr. Chairman.
    Welcome, Secretary Sebelius.
    I look forward to hearing your testimony today on the 2012 
budget request.
    In this austere economic environment, Congress is 
struggling with difficult budget decisions. We all understand 
the valuable role that healthcare plays in the lives of our 
citizens, and we all want to make healthcare more affordable, 
more accessible, and on the cutting edge of scientific 
discoveries.
    However, in times of economic uncertainty when every 
Department should be exercising fiscal restraint, I am 
disappointed that the administration has not significantly 
reduced healthcare spending. In fact, on top of the 9 percent 
increase in the entire Department of Health and Human Services' 
budget request, the 2012 bill includes $4.2 billion in 
mandatory spending for the Affordable Care Act, ACA. This is 
$4.2 billion that, due to Senate rules, this subcommittee 
cannot reduce or rescind. It is simply more spending for 
another entitlement program.
    One of the most troubling aspects of the ACA is the 
Community Living Assistance Services and Supports (CLASS) Act. 
The CLASS Act we call it. The CLASS Act is a new voluntary 
Federal insurance program. Its goal is twofold: to provide a 
cash benefit to individuals with either a functional or 
equivalent cognitive limitation that become too disabled to 
work and to create a voluntary insurance program for healthy 
individuals looking to hedge against the risk of needing long-
term care in the future. However, the CLASS Act's poor design 
attempts to accomplish these two incompatible goals with a 
single program. The result will be that the cost of serving 
disabled workers will push premiums to unacceptably high levels 
for those looking to purchase insurance, and they will decline 
to buy. I think this will quickly push the program to 
insolvency.
    The Congressional Budget Office predicts the CLASS Act will 
``add to budget deficits by amounts on the order of tens of 
billions of dollars.'' The Department of Health and Human 
Services actuary states and says, ``There is a very serious 
risk that the program will be unsustainable.'' Even you, Madam 
Secretary, testified at the Senate Finance Committee hearing 
early this year and said, ``The bill as written is totally 
unsustainable.''
    In addition to the $4.2 billion included in mandatory 
spending for the ACA, the budget submission includes $450 
million in discretionary funding. Specifically, the budget 
proposes to spend $120 million on the financially unsustainable 
CLASS Act, $236 million for health insurance exchange 
operations, $38 million for healthcare.gov, and $28 million to 
help consumers navigate the private insurance market. Secretary 
Sebelius, we fundamentally disagree on the implementation of 
the ACA. However, one area of the ACA we should agree on is 
that $38 million to fund one website is unacceptable.
    Further, I am concerned that many important programs, such 
as the Community Health Center Fund, are moved to the mandatory 
side of the ledger and funded under the ACA. The question is, 
what happens if the ACA is repealed and agencies' baseline 
funding levels are too low to cover the cost of these programs?
    Finally, as we continue to review the 2012 budget, I 
believe we need to ensure that our entire Nation, not just 
population-rich urban areas, is reaping the benefits of 
healthcare programs. There are numerous consolidations in the 
budget that eliminate formula-funded grants which will result 
in the redirection of critical Federal funds from smaller, 
rural States to urban areas. I think we must continue to make 
certain that programs that are deemed competitive actually 
allow all States to compete on a level playing field.
    Mr. Chairman, the level of Federal spending, I believe, is 
unsustainable. We must make steps to reduce the deficit that 
burdens our Nation today and will continue to in the future. 
Every Federal program should be reviewed to ensure it is 
working effectively and efficiently and is a valuable use of 
taxpayer dollars. However, I remain cautious about arbitrary or 
across-the-board cuts to agencies and programs simply to score 
a political point. Congress needs to carefully examine programs 
to ensure that we are sustaining those that are effective and 
cutting those that are not.
    In particular, one of the most results-driven aspects of 
our entire Federal budget I believe is the National Institutes 
of Health. Research conducted at NIH reduces disabilities, 
prolongs life, and is an essential component to the health of 
all Americans. NIH programs consistently meet their performance 
and outcome measures, as well as achieve their overall mission.
    For example, in February, NIH research led to the 
announcement of a very promising cystic fibrosis therapy that 
targets the genetic defect that causes cystic fibrosis as 
opposed to only addressing its symptoms. The preliminary 
success of this drug, for instance, underscores the importance 
of the NIH whose innovative work on human genetics and other 
areas of basic science could potentially lead to treatments and 
even cures for some of our most devastating diseases.
    Mr. Chairman, I look forward to working with you to craft a 
bill that balances the needs of our healthcare system with our 
fiscal realities.
    Senator Harkin. Thank you very much, Senator Shelby.
    Now we will turn to our distinguished Secretary of Health 
and Human Services. Kathleen Sebelius became the 21st Secretary 
of the Department of Health and Human Services on April 29, 
2009. Prior to that, of course, in 2003 she was elected as 
Governor of Kansas and served in that capacity until her 
appointment as the Secretary.
    Prior to her election as Governor, the Secretary served as 
the Kansas State insurance commissioner.
    She is a graduate of Trinity Washington University and the 
University of Kansas.
    I believe this will make the Secretary's fourth appearance 
before this subcommittee since her appointment.
    Madam Secretary, we welcome you again. Your statement will 
be made a part of the record in its entirety, and please 
proceed as you so desire.

              SUMMARY STATEMENT OF HON. KATHLEEN SEBELIUS

    Secretary Sebelius. Thank you, Mr. Chairman. Chairman 
Harkin, Ranking Member Shelby, members of the subcommittee, I 
need to do a special shout out to my fellow Kansan, Senator 
Moran, who is a new member of your subcommittee, Mr. Chairman. 
But I had the privilege of working with the Senator for years 
on Kansas business and now look forward to working with him in 
his new capacity here in the Senate.
    It is good to be with you and discuss the President's 2012 
budget for the Department of Health and Human Services.
    In the President's State of the Union Address, he outlined 
a vision of how the United States can win the future by out-
educating, out-building, and out-innovating the world so we 
give every family and business the chance to thrive.
    Our 2012 budget is a blueprint for putting that vision into 
action. It makes investments for the future that will grow our 
economy and create jobs.
    But the budget recognizes we cannot build lasting 
prosperity on a mountain of debt. Years of deficits have put us 
in a position where we need to make some tough choices. In 
order to invest for the future, we need to live within our 
means.
    In developing our budget, we looked closely at every 
program in our Department. We cut waste when we found it, and 
when programs were not working well enough, we redesigned them 
to put a new focus on results. And, in some cases, we cut 
programs that would not have been cut in better budget times.
    Now, I look forward to answering your questions on the 
budget, but first I want to share some of the highlights that 
fall under the jurisdiction of this subcommittee which oversees 
more than $72 billion of our Department's $80 billion budget.
    Last week, as the chairman said, was the 1-year anniversary 
of the Affordable Care Act. Over the last 12 months, we have 
worked around the clock with partners in Congress and States to 
deliver on the promise of the law to the American people.
    Thanks to the new law, children are no longer denied 
coverage because of their preexisting health conditions. 
Families have new protections under the Patient's Bill of 
Rights. Businesses are beginning to get some relief from 
soaring healthcare costs, and seniors have lower cost access to 
prescription drugs and preventive care.
    We are building on this first year's progress by supporting 
innovative new models of care that will improve patient safety 
and quality while reducing the burden of rising health costs on 
families, businesses, cities, and States.
    We are also making new, important 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.
    To make sure America continues to lead the world in 
innovation, our budget also increases funding 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. Our budget will allow the 
world's leading scientists to pursue these discoveries while 
keeping America at the forefront of biomedical research.
    And because we know, Mr. Chairman, there is nothing more 
important to our future than the healthy development of our 
children, our budget includes significant increases in funding 
for child care and Head Start. Science shows that success in 
school is significantly enhanced by high quality early learning 
opportunities, which makes these some of the wisest investments 
we can make in America's future.
    But the budget does more than provide additional resources. 
We are also aiming to raise the bar on quality by supporting 
key reforms to transform the Nation's child care system into 
one that fosters healthy development and gets children ready 
for school. The budget proposes a new early learning challenge 
fund, a partnership with the Department of Education that helps 
promote State innovation in early education. These initiatives, 
coupled with the quality efforts already underway in Head 
Start, are an important part of the education agenda that will 
help every child reach their academic potential and make 
America more competitive.
    Our budget also recognizes that at a time when so many 
Americans are making every dollar count, we need to do the 
same. That is why we are providing new support for President 
Obama's unprecedented push to stamp out waste, fraud, and abuse 
in the healthcare system, an effort that well more than pays 
for itself. Last year, we returned a record $4 billion to 
taxpayers. The key part of this effort is empowering seniors to 
recognize and report fraud, and we have appreciated the support 
of Congress and especially Senator Harkin for the Senior 
Medicare Patrol Program, which is one of our best tools for 
doing that.
    In addition, the budget includes a robust package of 
legislative proposals to root out waste and abuse within 
Medicare and Medicaid. These proposals enhance prepayment 
scrutiny, expand auditing, increase penalties for improper 
actions, and strengthen CMS' ability to implement corrective 
actions. We address State activities that increase Federal 
spending. Over 10 years, on the conservative side, they will 
deliver at least $32 billion in savings.
    Across our entire Department, Mr. Chairman, we have made 
eliminating waste, fraud, and abuse a top priority, but we know 
that is not enough. Over the last few months, we have also gone 
through our Department's budget, program by program, to find 
additional savings and opportunities where we can make our 
resources go further.
    The President's 2012 budget makes tough choices and smart, 
targeted investments today so that we can have a stronger, 
healthy, and more competitive America tomorrow. That is what it 
takes to win the future and that is what we are determined to 
do.

                           PREPARED STATEMENT

    Again, thank you, Mr. Chairman, for having me here today 
and I look forward to our discussion.
    [The statement follows:]

                Prepared Statement of Kathleen Sebelius

    Chairman Harkin, Senator Shelby, and Members of the Subcommittee, 
thank you for the invitation to discuss the President's fiscal year 
2012 budget for the Department of Health and Human Services (HHS).
    In President Obama'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 that we give every family 
and business the chance to thrive. His 2012 budget is the blueprint for 
putting that vision into action and making the investments that will 
grow our economy and create jobs.
    At the Department of Health and Human Services this means giving 
families and business owners better access to healthcare and more 
freedom from rising health costs and insurance abuses. It means keeping 
America at the cutting edge of new cures, treatments and health 
information technology. It means helping our children get a healthy 
start in life and preparing them for academic success. It means 
promoting prevention and wellness to make it easier for families to 
make healthy choices. It means building a healthcare workforce that is 
ready for the 21st century health needs of our country. And it means 
attacking waste and fraud throughout our department to increase 
efficiency, transparency and accountability.
    Our 2012 budget does all of this.
    At the same time, we know that we can't build lasting prosperity on 
a mountain of debt. And we can't win the future if we pass on massive 
debts to our children and grandchildren. We have a responsibility to 
the American people to live within our means so we can invest in our 
future.
    For every program we invest in, we know we need to cut somewhere 
else. So in developing this budget, we took a magnifying glass to every 
program in our department and made tough choices. When we found waste, 
we cut it. When we found duplication, we eliminated it. When programs 
weren't working well enough, we reorganized and streamlined them to put 
a new focus on results. When they weren't working at all, we ended 
them. In some cases, we cut programs we wouldn't in better fiscal 
times.
    The President's fiscal year 2012 budget for HHS totals $891.6 
billion in outlays. The budget proposes $79.9 billion in discretionary 
budget authority for fiscal year 2012, of which $72.4 billion is within 
the jurisdiction of the Labor, Health and Human Services, Education, 
and Related Agencies Subcommittee.
    The Department's discretionary budget is slightly below the 2010 
level. Within that total we cover the increasing costs of ensuring the 
safety of our food supply, providing medical care to American Indians 
and Alaska Natives, managing our entitlement programs, investing in 
early childhood, and advancing scientific research. We contribute to 
deficit reduction and meet the President's freeze to non-security 
programs by offsetting these investments with over $5 billion in 
targeted reductions. These reductions are to real programs and reflect 
tough choices. In some cases the reductions are to ineffective or 
outdated programs and in other areas they are cuts we would not have 
made absent the fiscal situation.
    The budget proposes a number of reductions and terminations in HHS.
  --The budget cuts the Community Services Block Grant in half, a $350 
        million reduction, and injects competition into grant awards.
  --The budget cuts the Low Income Home Energy Assistance Program by 
        $2.5 billion bringing it back to the 2008 level appropriated 
        prior to energy price spikes.
  --The budget eliminates subsidies to Children's Hospitals Graduate 
        Medical Education focusing instead on targeted investments to 
        increase the primary care workforce.
  --The budget reduces the Senior Community Services Employment Program 
        by $375 million, proposes to transfer this program from the 
        Department of Labor to HHS, and refocuses the program to train 
        seniors to help other seniors.
    The budget also stretches existing resources through better 
targeting.
  --The budget redirects and increases funding in CDC to reduce chronic 
        disease. Rather than splitting funding and making separate 
        grants for heart disease, diabetes, and other chronic diseases, 
        the budget proposes one comprehensive grant that will allow 
        States to address chronic disease more effectively.
  --The budget redirects prevention resources in SAMHSA to fund 
        evidence-based interventions and better respond to evolving 
        needs. States and local communities will benefit from the 
        additional flexibility while funds will still be competed and 
        directed toward proven interventions.
    These are the two goals that run throughout this budget: making the 
smart investments for the future that will help build a stronger, 
healthier, more competitive, and more prosperous America, and making 
the tough choices to ensure we are building on a solid fiscal 
foundation.
    The budget documents are available on our website. But for now, I 
want to share an outline of the budget, including the areas of most 
interest to this Committee, and how it will help our country invest in, 
and win, the future.
    That starts with giving Americans more freedom in their healthcare 
choices, so they can get affordable, high-quality care when they need 
it.

                          TRANSFORM HEALTHCARE

    Expanding Access to Coverage and Making Coverage More Secure.--The 
Affordable Care Act expands access to affordable coverage to millions 
of Americans and strengthens consumer protections to ensure individuals 
have coverage when they need it most. These reforms create an important 
foundation of patients' rights in the private health insurance market 
and put Americans in charge of their own healthcare. As a result, we 
have already implemented historic private market reforms including 
eliminating pre-existing condition exclusions for children; prohibiting 
insurance companies from rescinding coverage and imposing lifetime 
dollar limits on coverage; and enabling many adult children to stay on 
their parent's insurance plan up to age 26. The Affordable Care Act 
also established new programs to lower premiums and support coverage 
options, such as the Pre-Existing Condition Insurance Plans Program and 
the Early Retiree Reinsurance Program. The Act provides Medicare 
beneficiaries and enrollees in most private plans access to certain 
covered preventative services free of charge. Medicare beneficiaries 
also have increased access to prescription drugs under Medicare Part D 
by closing the coverage gap, known as the ``donut hole,'' by 2020 so 
that seniors no longer have to fear being unable to afford their 
prescriptions. The Act also provides for an annual wellness visit to 
all Medicare beneficiaries free of charge.
    Beginning in 2014, State-based health insurance Exchanges will 
create affordable, quality insurance options for many Americans who 
previously did not have health insurance coverage, had inadequate 
coverage, or were vulnerable to losing the coverage they had. Exchanges 
will make purchasing private health coverage easier by providing 
eligible consumers and small businesses with ``one-stop-shopping'' 
where they can compare a range of plans. New premium tax credits and 
cost-sharing reductions will also increase the affordability of 
coverage and care. The Affordable Care Act will also extend Medicaid 
insurance to millions of low-income individuals who were previously not 
eligible for coverage, granting them access to affordable healthcare.
    Ensuring Access to Quality, Culturally Competent Care for 
Vulnerable Populations.--The budget includes $3.3 billion for the 
Health Centers Program, including $1.2 billion in mandatory funding 
provided through the Affordable Care Act Community Health Center Fund, 
to expand the capacity of existing health center services and create 
new access points. The infusion of funding provided through the 
Affordable Care Act, combined with the discretionary request for fiscal 
year 2012, will enable health centers to serve 900,000 new patients and 
increase access to medical, oral, and behavioral health services to a 
total of 24 million patients.
    Reducing Health Care Costs.--New innovative delivery and payment 
approaches will lead to both more efficient and higher quality care. 
For example, provisions in the Affordable Care Act designed to reduce 
healthcare acquired conditions and preventable readmissions will both 
improve patient outcomes and reduce unnecessary health spending. The 
Innovation Center, in coordination with private sector partners 
whenever possible, will pursue new approaches that not only improve 
quality of care, but also lead to cost savings for Medicare, Medicaid, 
and CHIP. Rate adjustments for Medicare providers and insurers 
participating in Medicare Advantage will promote greater efficiency in 
the delivery of care. Meanwhile, new rules for private insurers, such 
as medical loss ratio standards and enhanced review of premium 
increases, will lead to greater value and affordability for consumers.
    Combating Healthcare Associated Infections.--HHS will use measures 
related to heathcare-associated infections (HAIs) for hospital value-
based purchasing beginning in fiscal year 2013, as called for in the 
Affordable Care Act. The fiscal year 2012 budget includes $86 million--
of which $20 million is funded in the Prevention and Public Health Fund 
Prevention Trust Fund--to the Agency for Healthcare Research and 
Quality (AHRQ), the Centers for Disease Control and Prevention (CDC), 
and the Office of the Secretary to reduce healthcare-associated 
infections. In fiscal year 2012, HHS will continue research on health-
care associated infections and tracking infections through the National 
Healthcare Safety Network. HHS will also identify and respond to new 
healthcare-associated infections by conducting outbreak and 
epidemiological investigations. In addition, HHS will implement, and 
ensure adherence to, evidence-based prevention practices to eliminate 
healthcare-associated infections. HHS activities, including those that 
the Innovation Center sponsors, will further the infection reduction 
goals of the Department's Action Plan to Prevent Healthcare-Associated 
Infections. HHS has made progress in reducing HAIs. For instance, in 
2009, an estimated 25,000 fewer central line-associated blood stream 
infections (CLABSIs) occurred among patients in ICUs in the United 
States than in 2001 (a 58 percent reduction). Progress in reducing 
CLABSIs highlights the preventability of these infections, and HHS will 
continue to support HAI prevention in collaboration with States and 
facility partners.
    Health Services for 9/11 Terrorist Attacks.--To implement the James 
Zadroga 9/11 Health and Compensation Act, the fiscal year 2012 budget 
includes $313 million in mandatory funding to provide medical 
monitoring and treatment to responders of the September 11, 2001 
terrorist attacks and initial health evaluations, monitoring, and 
treatment to others directly affected by the attacks. In addition to 
supporting medical monitoring and treatment, HHS will use funds to 
establish an outreach program for potentially eligible individuals, 
collect health data on individuals receiving benefits, and establish a 
research program on health conditions resulting from the terrorist 
attacks.

              ADVANCE SCIENTIFIC KNOWLEDGE AND INNOVATION

    Accelerating Scientific Discovery to Improve Patient Care.--The 
budget includes $32 billion for the National Institutes of Health 
(NIH), an increased investment of $745 million over the fiscal year 
2010 enacted level, to support innovative basic and clinical research 
that promises to deliver better health and drive future economic 
growth. In fiscal year 2012, NIH estimates it will support a total of 
36,852 research project grants, including 9,158 new and competing 
awards.
    Recent advances in the biomedical field, including genomics, high-
throughput biotechnologies, and stem cell biology, are shortening the 
pathway from discovery to revolutionary treatments for a wide range of 
diseases, such as Alzheimer's, cancer, autism, diabetes, and obesity. 
The dramatic acceleration of our basic understanding of hundreds of 
diseases; the establishment of NIH-supported centers that can screen 
thousands of chemicals for potential drug candidates; and the emergence 
of public-private partnerships to aid the movement of drug candidates 
into the commercial development pipeline are fueling expectations that 
an era of personalized medicine is emerging where prevention, 
diagnosis, and treatment of disease can be tailored to the individual 
and targeted to be more effective. To help bridge the divide between 
basic science and therapeutic applications, NIH plans to establish in 
fiscal year 2012 the National Center for Advancing Translational 
Sciences (NCATS), of which one component would be the new Cures 
Acceleration Network. With the creation of NCATS, the National Center 
for Research Resources will be abolished and its programs transferred 
to the new Center or other parts of NIH.
    Advancing Patient-Centered Health Research.--The Affordable Care 
Act created the Patient-Centered Outcomes Research Institute to fund 
research and get relevant, high quality information to patients, 
clinicians and policy-makers so that they can make informed healthcare 
decisions. The Patient-Centered Outcomes Research Trust Fund will fund 
this independent Institute, and related activities within HHS. In 
fiscal year 2012, the budget includes $620 million in AHRQ, NIH and the 
Office of the Secretary, including $30 million from the Trust Fund, to 
invest in core patient-centered health research activities and to 
disseminate research findings, train the next generation of patient-
centered outcomes researchers, and improve data capacity.
    Advancing Health Information Technology.--The budget includes $78 
million, an increase of $17 million, for the Office of the National 
Coordinator for Health Information Technology (ONC) to accelerate 
health information technology (health IT) adoption and promote 
electronic health records (EHRs) as tools to improve the health of 
individuals and transform the healthcare system. The increase will 
allow ONC to assist healthcare providers in becoming meaningful users 
of health IT.

   ADVANCE THE HEALTH, SAFETY, AND WELL-BEING OF THE AMERICAN PEOPLE

    Enhancing the Quality of Early Care.--The budget provides $6 
billion in combined discretionary and mandatory funding for child care. 
These resources will enable 1.7 million children to receive child care 
services. The Administration also supports reforms to the child care 
program to serve more low-income children in safe, healthy, and 
nurturing child care settings that are highly effective in promoting 
early learning; supports parental employment and choice by providing 
information to parents on quality; promotes continuity of care; and 
strengthens program integrity and accountability Additionally, the 
President's budget includes $8.1 billion for Head Start, which will 
allow us to continue to serve 968,000 children in 2012. The 
Administration is also working to implement key provisions of the Head 
Start Reauthorization, including requiring low-performing programs to 
compete for funding, that will improve program quality. These reforms 
and investments at HHS, in conjunction with the Administration's 
investments in the Early Learning Challenge Fund, are key elements of 
the broader education agenda designed to help every child reach his or 
her academic potential and improve our Nation's competitiveness.
    Preventing and Treating HIV/AIDS.--The budget supports the goals of 
the National HIV/AIDS Strategy to reduce HIV incidence, increase access 
to care and optimize health outcomes for people living with HIV, and 
reduce HIV-related health disparities. The request focuses resources on 
high-risk populations and allocates funds to State and local health 
departments to align resources to the burden of the epidemic across the 
United States. The budget includes $2.4 billion, an increase of $85 
million, for HRSA's Ryan White program to expand access to care for 
persons living with HIV/AIDS who are otherwise unable to afford 
healthcare and related support services. The budget also includes $858 
million for domestic HIV/AIDS Prevention in CDC, an increase of $58 
million, which will help CDC decrease the HIV transmission rate; 
decrease risk behaviors among persons at risk for acquiring HIV; 
increase the proportion of HIV infected people who know they are 
infected; and integrate services for populations most at risk of HIV, 
sexually transmitted diseases, and viral hepatitis. In addition, the 
budget proposes that up to one percent of HHS discretionary funds 
appropriated for domestic HIV/AIDS activities, or approximately $60 
million, be provided to the Office of the Assistant Secretary for 
Health to foster collaborations across HHS agencies and finance high 
priority initiatives in support of the National HIV/AIDS Strategy. Such 
initiatives would focus on improving linkages between prevention and 
care, coordinating Federal resources within targeted high-risk 
populations, enhancing provider capacity to care for persons living 
with HIV/AIDS, and monitoring key Strategy targets.
    Addressing the Leading Causes of Death and Disability.--Chronic 
diseases and injuries represent the major causes of morbidity, 
disability, and premature death and contribute to the growth in 
healthcare costs. The budget aims to improve the health of individuals 
by focusing on prevention of chronic diseases and injuries rather than 
focusing solely on treating conditions that could have been prevented. 
Specifically, the budget includes $705 million for a new competitive 
grant program in CDC that refocuses disease-specific grants into a 
comprehensive program that will enable health departments to implement 
the most effective strategies to address the leading causes of death. 
Because many chronic disease conditions share common risk factors, the 
new program will improve health outcomes by coordinating the 
interventions that can reduce the burden of chronic disease. In 
addition, the allocation of the $1 billion available in the Prevention 
Fund will improve health and restrain the growth of healthcare costs 
through a balanced portfolio of investments. The fiscal year 2012 
allocation of the Fund builds on existing investments and will align 
with the vision and goals of the National Prevention and Health 
Promotion Strategy under development. For instance, the CDC Community 
Transformation Grants create and sustain communities that support 
prevention and wellness where people live, learn, work and play through 
the implementation, evaluation, and dissemination of evidence-based 
community preventive health activities.
    Preventing Substance Abuse and Mental Illness.--The budget includes 
$535 million within the Substance Abuse and Mental Health Services 
Administration (SAMHSA) for new, expanded, and refocused substance 
abuse prevention and mental health promotion grants to States and 
Tribes. To maximize the effectiveness and efficiency of its resources, 
SAMHSA will deploy mental health and substance abuse prevention and 
treatment investments more thoughtfully and strategically. SAMHSA will 
use competitive grants to identify and test innovative prevention 
practices and will leverage State and Tribal investments to foster the 
widespread implementation of evidence-based prevention strategies 
through data driven planning and resource dissemination.
    Supporting Older Adults and their Caregivers.--The budget includes 
$57 million, an increase of $21 million over fiscal year 2010, to help 
seniors live in their communities without fear of abuse, and includes 
an increase of $96 million for caregiver services, like counseling, 
training, and respite care, to enable families to better care for their 
relatives in the community. The budget also proposes to transfer an 
Older Americans Act program that provides community service 
opportunities and job training to unemployed older adults from the 
Department of Labor to HHS. As part of this move, a new focus will be 
placed on developing professional skills that will enable participants 
to provide services that allow fellow seniors to live in their 
communities as long as possible.
    Pandemic and Emergency Preparedness.--While responding to the H1N1 
influenza pandemic has been the focus of the most recent pandemic 
investments, the threat of a pandemic caused by H5N1 or other strains 
has not diminished. HHS is currently implementing pandemic preparedness 
activities in response to lessons learned from the H1N1 pandemic in 
order to strengthen the Nation's ability to respond to future health 
threats. Balances from the fiscal year 2009 supplemental appropriations 
are being used to support recommendations from the HHS Medical 
Countermeasure Review and the President's Council of Advisors on 
Science and Technology. These multi-year activities include advanced 
development of influenza vaccines and the construction of a new cell-
based vaccine facility in order to quickly produce vaccine in the 
United States, as well as development of next generation antivirals, 
rapid diagnostics, and maintenance of the H5N1 vaccine stockpile.
    The HHS Medical Countermeasure Review described a new strategy 
focused on forging partnerships, minimizing constraints, modernizing 
regulatory oversight, and supporting transformational technologies. The 
request includes $665 million for the Biomedical Advanced Research and 
Development Authority, to improve existing and develop new next-
generation medical countermeasures and $100 million to establish a 
strategic investment corporation that would improve the chances of 
successful development of new medical countermeasure technologies and 
products by small and new companies. The budget includes $70 million 
for FDA to establish teams of public health experts to support the 
review of medical countermeasures and novel manufacturing approaches. 
Additionally, NIH will dedicate $55 million to individually help 
shepherd investigators who have promising, early-stage, medical 
countermeasure products. Finally, the budget includes $655 million for 
the Strategic National Stockpile to replace expiring products, support 
BioShield acquisitions, and fill gaps in the stockpile inventory.

  STRENGTHEN THE NATION'S HEALTH AND HUMAN SERVICE INFRASTRUCTURE AND 
                               WORKFORCE

    Strengthening the Health Workforce.--A strong health workforce is 
key to ensuring that more Americans can get the quality care they need 
to stay healthy. The budget includes $1.3 billion, including $315 
million in mandatory funding, within HRSA, to support a strategy which 
aims to promote a sufficient health workforce that is deployed 
effectively and efficiently and trained to meet the changing needs of 
the American people. The budget will initiate investments that will 
expand the capacity of institutions to train over 4,000 new primary 
care providers over 5 years.
    Health Workforce Diversity.--As part of these health workforce 
investments, the budget also includes $163 million at HRSA for Health 
Workforce Diversity programs to improve the diversity of the Nation's 
health workforce and improve care to vulnerable populations. This 
funding will support training programs and scholarship opportunities to 
students from disadvantaged backgrounds enrolled in health professions 
and nursing programs.
    Expanding Public Health Infrastructure.--The fiscal year 2012 
budget supports State and local capacity so that health departments are 
not left behind. Specifically, the budget requests $73 million, of 
which $25 million is funded in the Prevention Fund, for the CDC public 
health workforce to increase the number of trained public health 
professionals in the field. CDC's experiential fellowships and training 
programs create an effective, prepared, and sustainable health 
workforce to meet emerging public health challenges. In addition, the 
budget requests $40 million in the Prevention Fund to support CDC's 
Public Health Infrastructure Program. This program will increase the 
capacity and ability of health departments to meet national public 
health standards in areas such as information technology and data 
systems, workforce training, and regulation and policy development.

 INCREASE EFFICIENCY, TRANSPARENCY, AND ACCOUNTABILITY OF HHS PROGRAMS

    Strengthening Program Integrity.--Strengthening program integrity 
is a priority for both the President and myself. The budget includes 
$581 million in discretionary funding, a $270 million increase over 
fiscal year 2010, to expand prevention-focused, data-driven, and 
innovative initiatives to improve CMS program integrity. The budget 
request also supports the expansion up to 20 Strike Force cities to 
target Medicare fraud in high risk areas and other efforts to achieve 
the President's goal of cutting the Medicare fee-for-service error rate 
in half by 2012. The proposed 10 year discretionary investment yields 
$10.3 billion in Medicare and Medicaid savings, a return of about $1.5 
for every dollar spent. In addition, the budget includes a robust 
package of program integrity legislative proposals to expand HHS 
program integrity tools and produce $32.3 billion in savings over 10 
years. We appreciate the support of Congress, particularly Chairman 
Harkin, on efforts to fight Medicare fraud. I look forward to working 
with the Subcommittee on this issue.
    In addition, the Affordable Care Act provides unprecedented tools 
to CMS and law enforcement to enhance Medicare, Medicaid, and 
Children's Health Insurance Program (CHIP) program integrity. The Act 
enhances provider screening to stop fraudsters from participating in 
these programs in the first place, gives the Secretary the authority to 
implement temporary enrollment moratoria for fraud hot spots, and 
increases law enforcement penalties. Additionally, the continued 
implementation of the Secretary's Program Integrity Initiative seeks to 
ensure that every program and office in HHS prioritizes the 
identification of systemic vulnerabilities and opportunities for waste 
and abuse, and implements heightened oversight.
    Implementing the Recovery Act.--The American Recovery and 
Reinvestment Act provides $138 billion to HHS programs as part of a 
government-wide response to the economic downturn. HHS-funded projects 
around the country are working to achieve the goals of the Recovery Act 
by helping State Medicaid programs meet increasing demand for health 
services; supporting struggling families through expanded child care 
services and subsidized employment opportunities; and by making long-
term investments in health information technology (IT), biomedical 
research and prevention and wellness efforts. HHS made available a 
total of $118 billion to States and local communities through December 
31, 2010; recipients of these funds have in turn spent $100 billion by 
the same date. Most of the remaining funds will support a signature 
Recovery Act program to provide Medicare and Medicaid incentive 
payments to hospitals and eligible healthcare providers as they 
demonstrate the adoption and meaningful use of electronic health 
records. The first of these Medicaid incentive payments were made 
January 5, 2011. More than 23,000 grantees and contractors of HHS 
discretionary programs have to submit reports on the status of their 
projects each calendar quarter. These reports are available to the 
public on Recovery.gov. For the quarter ending December 31, 2010, 99.6 
percent of the required recipient reports were filed timely. Recipients 
that do not comply with reporting requirements are subject to sanction.

                               CONCLUSION

    This budget is about investing our resources in a way that pays off 
again and again. By making smart investments and tough choices today, 
we can have a stronger, healthier, more competitive America tomorrow. 
This testimony reflects just some of the ways that HHS programs improve 
the everyday lives of Americans.
    Under this budget, we will continue to work to make sure every 
American child, family, and senior has the opportunity to thrive. And 
we will take responsibility for our deficits by cutting programs that 
were outdated, ineffective, or that we simply could not afford. But, we 
need to make sure we're cutting waste and excess, not making across the 
board, deep cuts in programs that are helping our economy grow and 
making a difference for families and businesses. We need to move 
forward responsibly, by investing in what helps us grow and cutting 
what doesn't.
    My department can't accomplish any of these goals alone. It will 
require all of us to work together. I look forward to working with you 
to advance the health, safety, and well-being of the American people. 
Thank you for this opportunity to speak with you today. I look forward 
to our conversation.

    Senator Harkin. Thank you very much, Madam Secretary.
    We will start a round of 5-minute questions and recognize 
people in order of appearance at the subcommittee. So I will 
start, and then Senator Shelby, then we will go by order of 
appearance at the subcommittee.

                               HEAD START

    Madam Secretary, I want to focus on early childhood 
programs, the impact of H.R. 1, the House-proposed bill, which 
would cut over $1 billion from Head Start and the child care 
programs. This would go well beyond whatever we did in the 
Recovery Act. It actually would cut the funding below the level 
where they stood prior to the Recovery Act.
    I just visited a Head Start center in Iowa, talked to 
parents there and the Head Start program people and the 
teachers, and the impact in my own State would be pretty 
severe. They estimate about 1,800 kids in Iowa would lose their 
Head Start program.
    Can you just tell us for the subcommittee what do you see 
as the impact of H.R. 1 on Head Start, what changes are you 
making to Head Start to ensure that children receive high 
quality services, and just a little bit about the early 
learning challenge fund and the purpose of it?
    Secretary Sebelius. Mr. Chairman, I share your interest and 
focus on early childhood education as being an investment that 
pays huge dividends in the long run. If H.R. 1 were to become 
the law, the budget for Head Start would be cut about $1.1 
billion below 2010 funding, and we think about 218,000 children 
across the country who are currently being served would lose 
those slots both in Head Start and in Early Head Start.
    The President, by contrast, has proposed an increase in 
Head Start, feeling that that is an investment that is 
important to make. Even though our budget is flat-lined, he has 
chosen to make an increase in that area, or recommend an 
increase.
    We have looked across the range of programs at Head Start 
and since studies have been done to indicate there has not been 
enough progress made as children become school-eligible and 
continue on in school, we are relooking at all kinds of 
features with the Department of Education in terms of school 
readiness. The programs are currently being upgraded and 
updated in great collaboration and partnership with the 
Department of Education.
    We are also, Mr. Chairman, recompeting the 25 lowest-
performing quadrant of the programs, feeling that automatic 
ongoing funding has not provided an incentive to update and 
upgrade the quality.
    Senator Harkin. By the way, I commend your Department and 
your leadership in that area.
    Secretary Sebelius. Well, I think parents need to be 
assured that whatever out-of-home placement they choose for 
their child, whether it is a child care setting or Head Start 
or a school-based early education program, that the same goals 
are in place. And that is really what the early learning 
challenge grant is about.
    States--and I will take some credit for what we did in 
Kansas--are frankly a bit ahead in this. A lot of States have 
been very innovative in early child care and early education 
opportunities, putting all the placement folks at the table and 
insisting that the same kind of quality standards be in place.
    The early learning challenge grant would be a partnership 
with HHS and Department of Education who together run the scope 
of the child care programs and make sure that we are putting 
incentives in place to drive higher quality because children 
who enter school less prepared than their peers, often, by the 
third grade, are so far behind that they will never catch up. 
We know that having not only developmentally ready children but 
educationally ready children is a way to really open those 
doorways of opportunity, and that is what the focus has been.
    Senator Harkin. Thank you, Madam Secretary.

                        COMMUNITY HEALTH CENTERS

    My last question--I am running out of time--has to do with 
community health centers. I happen to think the community 
health center has been one of the great underpinnings of our 
health system in America, 1,100 of them nationwide providing 
the kind of healthcare that low-income people need when they 
walk in that door. Could you explain the impact of the proposed 
cuts in H.R. 1, what that would do, and how many patients we 
might lose?
    Secretary Sebelius. The billion dollars that would be, 
again, cut from the community health center funding below 2010 
would serve--we are calculating that about close to 3 million 
of the people currently served in community health centers 
would lose that opportunity, and 10 million who are looking 
forward to having access to community health centers would also 
not have those sites available. Along with the health center 
sites themselves are the healthcare providers, doctors, nurses, 
nurse practitioners, mental health professionals. So, with the 
Recovery Act, the Affordable Care Act, and the budget 
investments, the community health center footprint is scheduled 
to go from serving about 20 million Americans to serving 40 
million Americans in the most underserved areas, rural and 
urban, throughout the country.
    Senator Harkin. Thank you very much, Madam Secretary.
    Senator Shelby.

                               CLASS ACT

    Senator Shelby. Secretary Sebelius, the CLASS Act attempts 
to address an important public policy concern, that is, the 
need for non-institutional long-term care, but it is viewed by 
many experts as financially unsound. The President's Fiscal 
Commission recommended reform or repeal of the CLASS Act. You 
stated to health advocacy groups--and I will quote you--that 
``it would be irresponsible to ignore the concerns about the 
CLASS program's long-term sustainability in its current form.''
    The President's budget proposal includes a request of $120 
million for the CLASS Act which would be the first 
discretionary appropriation for the program. If you are unable 
to certify that it will be sustainable absent a massive 
taxpayer infusion of funds, why should Congress want to 
appropriate the requested $120 million in taxpayer funds for a 
program that a lot of the experts project will fail? And what 
will prevent the Department from subsidizing this alleged self-
sustaining program with taxpayer funds once it is implemented 
and then fails? Is that a concern of yours?
    Secretary Sebelius. Senator, the law as written has some 
pretty clear directions that we have to be able to certify 
before benefits would become available to promote to the public 
for their voluntary enrollment that the program is not only 
sustainable short-term but sustainable long-term. It needs a 
20-year and a 75-year actuarial projection of sustainability.
    There also is a very clear directive in the law that 
prohibits any taxpayer dollars being spent to subsidize what 
may be a program that is on shaky financial ground.
    So those are the two guardrails that we are looking at very 
closely.
    We are working with actuaries. In fact, the head actuary 
from GenWorth, who has probably the biggest footprint in this 
space, has become our chief actuary on the CLASS modeling 
program. But looking at the flexibility that we have, frankly, 
to look at work requirements, premium indexing, and 
enrollment--three of the elements that are really critical to 
making sure you have a solvent program in the future, if indeed 
only the disabled community enrolls--this program is 
immediately insolvent in a fiscal manner because there will not 
be enough income to pay for the benefits.
    The money that you have referred to in the budget, which is 
being requested as an initial outreach and enrollment feature, 
is designed to make sure we have a solvent program, which means 
you need to reach into a younger, healthier population, market 
benefits----
    Senator Shelby. In other words, it is taxpayers' money you 
are asking for here. Right? $120 million.
    Secretary Sebelius. It is budgeted money that could make 
the CLASS program sustainable into the future. Yes, sir.
    Senator Shelby. The budget proposal for the CLASS Act also 
includes $93.5 million in new Federal spending for, 
``information and education to ensure that an adequate number 
of individuals would enroll in the program.'' While I do not 
agree myself with Congress appropriating $120 million for an 
insolvent program, it makes even less sense to me to spend 
$93.5 million of that funding to promote a program that we know 
is structured currently to fail.
    How do you justify, Madam Secretary, spending such a large 
sum of money on promotion efforts, given you will be promoting 
a program that is not quite defined?
    Secretary Sebelius. Well, again, Senator, we would not 
promote a program that could not be sustained, and I am 
prohibited by law from doing that. So it is our intent to--and 
we are engaged in extensive outreach to look at the elements of 
the program that need to be adjusted in order to make sure it 
is sustainable. I have just mentioned three of them: the work 
requirements, the premium indexing issues, and the outreach 
efforts.
    The outreach is absolutely essential to engage the employer 
community and engage citizens who right now--frankly, most 
think that Medicare provides long-term care, which it does not. 
Most think that that is a benefit that they have to look 
forward to, and there really is no private market opportunity 
right now for the kind of residential assistance that most 
people want and need.
    Senator Harkin. We will do other rounds.
    Senator Shelby. I will come back.
    Senator Harkin. We have a lot of people here. I want to 
make sure everyone gets a chance.
    I will recognize in order now Senator Pryor, Senator 
Johnson, Senator Moran, Senator Reed, Senator Brown, and 
Senator Mikulski. Senator Pryor.

                         WASTE, FRAUD AND ABUSE

    Senator Pryor. Thank you, Mr. Chairman.
    And thank you, Madam Secretary, for being here.
    Let me follow up on something that we actually talked about 
1 year ago in this subcommittee, and we were talking about 
waste, fraud, and abuse. You had a request in I think for $110 
million to do a 2-year process, I guess you can say, to try to 
get all the Medicare payment data sets in one system. And I 
understand we have had some budget issues in the meantime, but 
I am curious about where you are in that process. I guess you 
got some of the money appropriated, but tell me where you are 
in that process?
    Secretary Sebelius. Well, Senator, there is a broad-based 
effort underway to put together what is called in the private 
market ``predictive modeling,'' the kind of data checks that 
credit card companies use to find if there is an aberrant 
billing pattern. So, if 10 flat screen TVs end up on your 
credit card, you are likely to get a call saying did you 
purchase 10 flat screen TVs before they actually send the money 
out the door. We have never had that ability with Medicare data 
in five or six different systems and not integrated.
    We are building that database. We are well down the line to 
modeling now what we can do, and with the Affordable Care Act, 
we were given new tools to actually be much more nimble in 
stopping payments before they go out the door. So the 
opportunity to go from the old ``pay and chase'' model, where 
the money went out and then we tried to put back together the 
scheme of the crooks and find them at some point, to actually 
stopping that from ever happening in the first place, using the 
very effective tools that the private sector has used for 
years, is well underway and we hope to be up and running. We do 
have a request in the budget that would continue not only that 
but the strike force opportunities and building that data 
system, enforcing scrutiny as providers come into the system, 
all of which we think will be very effective. Last year alone, 
Senator, we got about a 7 to 1 return on dollars out/dollars 
in, which I think just gives a prelude to what could be 
effective in terms of building some firewalls at the very front 
end.
    Senator Pryor. Great. At one point you had, I think, a 
deadline of trying to get this up and running at least in some 
measure maybe at the end of 2011. Are you still on track there?
    Secretary Sebelius. I think we have been a little bit 
frozen in terms of our capabilities of moving ahead. So there 
are some new assets in the Affordable Care Act that we are 
continuing to mobilize. We are still working on 2010 
assumptions in our budget, and as you know, one of the things 
that the House continuing resolution would do to our budget is 
take an additional $500 million out of CMS administrative 
overhead, reducing us to a level that is about 2006. So we are 
a little uncertain what the funding would be, but this is 
definitely a program that well pays for itself.

             CHILDREN'S HOSPITAL GRADUATE MEDICAL EDUCATION

    Senator Pryor. In the President's budget, it eliminates 
funding to children's hospitals for graduate medical education. 
And I am concerned about that because pediatricians really are 
the primary care providers for our children. So when I see 
something like that, it makes me concerned that, in effect, we 
are going to harm the ability to train physicians to be primary 
care physicians for children.
    So what assurance can you give me today that this budget is 
not going to harm our ability to train more qualified 
pediatricians?
    Secretary Sebelius. Well, I share your concern, Senator, 
and can assure you that in rosier budget times this would not 
have been a proposal to take that $317 million out of the 
budget. There are some exclusive children's hospitals that have 
that funding. I would tell you that there is $40 million in our 
block grant for maternal and child health that trains 
pediatricians and pediatric residents across the country, as 
well as Medicaid training of about $3.89 billion, again some of 
which comes to pediatricians. So this is not the sole source of 
funding for pediatricians. But I share your concerns that 
primary care docs and particularly those who deal with children 
are critical.
    Senator Pryor. And I do not have time to ask the question, 
but there is a Government Accountability Office (GAO) report 
that came out this month. It is GAO-11-318SP, and it looks for 
opportunities to reduce potential duplication in Government 
programs, save tax dollars, and enhance revenue. And I notice 
that your Department is mentioned in here many, many times on 
ways that hopefully we can save money and stop duplication. We 
do not have time to really ask because other Senators are 
waiting, but I hope you will look at that----
    Secretary Sebelius. We are.
    Senator Pryor [continuing]. And take their recommendations 
to heart.
    Secretary Sebelius. Thank you.
    Senator Harkin. Thank you, Senator Pryor.
    And now we will turn to Senator Johnson. I want to welcome 
our new member to the committee and the subcommittee. As a 
matter of fact, I was just checking with my staff. This may be 
a unique situation where we have two Senators from the same 
State on the same subcommittee on the Appropriations Committee. 
So welcome to the subcommittee, Senator Johnson.

                          AFFORDABLE CARE ACT

    Senator Johnson. Well, thank you, Mr. Chairman. It is a 
privilege to serve on the subcommittee with you.
    Madam Secretary, it was a pleasure meeting you earlier.
    I want to center on the Affordable Care Act or law I guess. 
First of all, obviously your background is pretty impressive, 
being a health commissioner and Governor of the State. You 
obviously understand health insurance pretty deeply.
    Have you ever purchased, though, a healthcare plan for a 
group of individuals, other than the State? I mean for 50 
employees, 100 employees.
    Secretary Sebelius. Yes, sir. I ran the State health 
insurance program which was the largest covered group in Kansas 
for 90,000 covered lives. We negotiated 10 or 12 various 
competitive plans, kind of the exchange that we are looking to 
set up in States around the country. It is exactly that model.
    Senator Johnson. Again, that is a very large group, 
obviously. Just so you understand my background, I am an 
accountant by training, a business owner for the last 31 years, 
and I have been buying healthcare for the people that work with 
me for 31 years. So I understand fee-for-service. I understand 
a self-insured plan where you are buying inspector general 
coverage and specific coverage. I know about PPO's and HMO's. 
Obviously, with the background with my daughter, having to seek 
out the best surgical technique for her, I always made sure 
that the employees that worked with me had that exact same 
freedom in a fee-for-service type of plan to be able to go 
anywhere in the country to do that. So basically what I do is I 
bring the perspective of a business owner, a business manager 
who will be making the kind of decisions on healthcare coverage 
under this Affordable Care Act.
    So from my standpoint, this is a very complex bill, 2,700 
pages. We have another 6,200 pages, what I was reading, in 
terms of additional regulations that have been written since 
that point in time. So I try and simplify things. I am trying 
to look at the bigger picture. And so I would like to start by 
just asking some basic questions we can kind of agree on some 
figures here because I am a very reality-based guy. I want to 
look at facts and figures.
    So is it true that about 163 million people in America get 
their healthcare through an employer-sponsored plan? Is that 
about the correct number?
    Secretary Sebelius. I think it is about 180 million.
    Senator Johnson. The Congressional Budget Office (CBO) has 
issued a study, a report that claims that under the healthcare 
law now, that by 2016 the average cost of a family plan will be 
in excess of $15,000. Is that pretty much your----
    Secretary Sebelius. I assume that is accurate.
    Senator Johnson. It is. We will stipulate that.
    Is it also true that under the healthcare law now, if an 
employer with more than 50 employees does not provide, I guess, 
affordable coverage, the penalty to that employer will be 
$2,000 per employee?
    Secretary Sebelius. It is an employer responsibility. If 
that employee qualifies for the taxpayer subsidy that is in the 
bill, then there is, yes, a payment into the fund so that that 
cost is not shifted on to other taxpayers who are, indeed, 
providing coverage for their employees and paying for the 
subsidy.
    Senator Johnson. So the CBO has also estimated now that 
they are thinking--it is starting, I think, at 2.6 million 
rising to about 3.6 million employees will lose their coverage, 
will be dropped from their employer-sponsored care into the 
Government exchange. Is that about the right figure?
    Secretary Sebelius. Well, I know there were all sorts of 
studies done by all kinds of people, sir, during the course of 
the debate, and I think before we have a framing of a plan and 
the opportunity to look at how affordable these plans are, one 
of the directives, as you know, with the State-based plan is 
that it be affordable coverage. So I think there is not at all 
a firm number on how many employers will or will not do what 
they are voluntarily doing now.
    Senator Johnson. But that is how this thing has been scored 
dollar-wise in terms of the cost estimate. Around 3 million 
people.
    The average subsidy, according to CBO, per person in those 
exchanges will rise from about $4,500 to over $7,000 by the 
year 2021. Is that largely correct?
    Secretary Sebelius. The average subsidy--it is based on an 
income level to----
    Senator Johnson. Per person. I understand, but what has 
been budgeted is almost $7,000 by the year 2021. My concern is 
taking a look at the big picture here. I think we have grossly 
underestimated the number of employees that will lose their 
employer coverage plan under this healthcare act, be put in the 
exchanges under extremely high subsidy levels. If I am right, 
if my fears come true, we could be looking at tens of millions 
of people put in the exchanges at the tune of $5,000 to $7,000 
in subsidies. We could be doubling, tripling, quadrupling the 
cost of this healthcare bill. Rather than $150 billion, it 
could be easily one-half a trillion dollars per year. That is 
my concern.
    Secretary Sebelius. Well, Senator, I think, as you know and 
as a business person participating in the market, the market is 
entirely voluntary now for employers. I think the most cynical 
view is that employers will just dump all their employees, 
discontinue employee benefits, and I guess move people into 
some other option. I don't share that kind of cynical view. I 
think the voluntary marketplace, in fact, is going to be far 
more attractive. A lot of small business owners who now are 
paying 18 to 20 percent more for identical coverage to large 
business owners will have, for the first time, affordable 
options within an exchange to purchase coverage. I think that 
the opportunity for individuals, entrepreneurs, farm families, 
and others who right now are on the edge of the market or often 
outside the market will have affordable options. And I think 
the large employers who we talked to who will not see much 
difference in their choices, except they will stop paying the 
approximately $1,000 per policy tax for everyone who is 
accessing the healthcare system without affordable coverage 
that gets shifted onto everybody who has coverage.
    I guess I think that while there is a scenario that says 
everybody would voluntarily walk out of the market and dump 
their employees, I think just the opposite is going to happen. 
We have not seen that in the one State that is really up and 
running--in Massachusetts. Employers have not dropped their 
coverage, have not dumped employees. They, in fact, are 
continuing, and Massachusetts is now at about a 97 percent 
coverage rate. So I think that is an encouraging at least 
precursor of what may be coming.
    Senator Johnson. Thank you.
    Senator Harkin. Thank you, Senator.
    Senator Moran.
    Senator Moran. Mr. Chairman, thank you.
    Senator Harkin. Again, welcome to the subcommittee. Senator 
Moran and I have done a lot of work in the past on farm issues. 
Now we can work on health issues.

                         RURAL ACCESS HOSPITALS

    Senator Moran. I look forward to continuing that working 
relationship, and I am honored to serve Kansas in the United 
States Senate by the side of my colleagues here today and 
honored to have my former Governor with us this afternoon so 
that I can ask a few questions.
    Secretary, my thoughts for questioning you today really 
revolve around some pretty significant Kansas issues related to 
healthcare and your role. And they are, of course, related to 
the issue of healthcare in a rural setting.
    The IPAB at the moment fails to account for critical access 
hospitals. Congress carved out exceptions to the payment 
mechanism that we have in place but did not carve out critical 
access hospitals, and I would like your reaction to that 
related to that because I am fearful that if that carve-out 
does not occur and decisions are made by those policymakers not 
responsible to rural America, those critical access hospitals 
could easily be a target for reduced spending which in my view 
causes the demise of access to healthcare in rural America.
    Related to that is the budget item for providing the doc 
fix. In so many instances today, our rural hospitals are now 
employing physicians. And they do that out of necessity. The 
ability to track a physician to a rural community is 
restricted, is limited. And so in many instances, our rural 
hospitals pay the salaries of physicians. Their ability to do 
that will be greatly damaged if we lose the ability to be 
reimbursed as we are currently as critical access hospitals. 
But it is compounded by the problem that in the 29.5 percent 
reduction in payments to physicians under Medicare, if we do 
not put a doc fix in place. So we have the circumstance in 
which many hospitals will have declining revenues and 
increasing costs. Of course, a hospital has little viability if 
there are not physicians in that community admitting patients 
to those hospitals.
    So my question is--I have only been in the Senate 2 months, 
but I have learned that I have to ask more than one question in 
the one question in the 5 minutes that I am allowed. But my two 
questions that are related to each other is what is the plan 
for the carve out for critical access hospitals and what is the 
administration's plan in regard to the so-called doc fix, the 
sustainable growth rate problem that we face. There is a fix in 
the President's budget for the next couple of years, but 
nothing beyond that. And it is significant amounts of dollars 
that we need to figure out how we are going to pay and I very 
much would welcome your input on both those items.
    Secretary Sebelius. Well, thank you, Senator, for those 
questions. I do want to tell the chairman that you are not only 
an expert now on rural agricultural issues but rural health 
issues because Senator Moran started when he was a Kansas 
senator working on rural health issues and has continued that 
interest. So I look forward to the opportunity to work on some 
of these enormous challenges.
    The rural access hospitals, as you know, Senator, are paid 
at a different rate. So they are paid, I think it is now, 101 
percent of costs, and that does not change with anything with 
IPAB. The other hospitals are negotiated rates. And so I think 
that the lack of a carve out was due to the fact that there is 
a different payment structure.
    But I share your concern that somehow being focused on by 
recommendations in the future with the Independent Payment 
Advisory Board is precarious territory. And I would look 
forward to working with you on how to look at that structure 
going forward. But I do think the differential in the payment 
rates was one of the areas that the drafters of the Affordable 
Care Act looked at.
    In terms of the sustainable growth rate and the ability to 
pay Medicare providers adequately and commit to that payment 
into the future, I think it is one of the most significant 
looming issues. As you know, it well predates the Affordable 
Care Act. This has been a discussion for the last decade. The 
President has, as you said, in his budget proposed about a 2\1/
2\ year offset for the fix going forward.
    But there is no doubt that we need, on a very bipartisan 
basis, to sit down and look at what is the long-term ability to 
make sure that doctors do not have this looming crisis. I have 
now been in my job slightly longer than you have been in yours, 
but I can tell you that it is certainly the single most raised 
topic by physicians dealing with Medicare. And I do think it is 
something that while we have proposed offsets for the next 
couple of years, we need to at least have a 10-year or 
permanent fix which could be part of the ongoing deficit 
conversations or into the future. But there is no question that 
that has to be solved long term.
    I would tell you, though, also that the Affordable Care Act 
has a couple of features that are particularly focused on rural 
areas where Medicare providers are paid. Starting this year, an 
enhanced rate for serving in underserved areas where there are 
access issues that are particularly addressed in terms of not 
only the health service corps, but nurse practitioners, and 
nurse-provided health centers, that are again, targeted for 
rural and underserved areas that I think also are going to be 
critically important as you look at healthcare delivery because 
it is not only affordable, it is available healthcare.
    Senator Harkin. Thank you very much, Senator.
    Senator Moran. Thank you, Mr. Chairman.
    Senator Harkin. And now Senator Reed.

               LOW INCOME HOME ENERGY ASSISTANCE PROGRAM

    Senator Reed. Thank you very much, Mr. Chairman.
    Thank you, Madam Secretary, for your service.
    Let me begin also by thanking you for the investment in the 
budget for health professions. We had a chance to talk about 
the need for primary care physicians and nurse practitioners, 
and the budget represents a good step forward. I know we have 
to do more, but thank you for what you have done.
    I want to focus quickly on two areas. One was alluded to by 
the chairman. That is the cuts in LIHEAP. When the budget was 
being prepared, prices in the oil markets were a little tamer. 
They are now seemingly out of control. I know there have been 
some long-term reductions, at least moderation in the natural 
gas market, but up our way we depend heavily on heating oil and 
together with the 12 percent unemployment rate, we are 
anticipating a huge, huge crisis next winter in terms of 
heating. And so these LIHEAP cuts are going to be very 
difficult to bear.
    Can you talk about how you got to this recommendation? And 
two, is there any way going forward that you have the 
flexibility to adapt to these increased prices?
    Secretary Sebelius. Well, again, Senator, you and I have 
had this conversation, and I know that you are not only 
concerned, but have been a real leader in the low energy 
assistance area. What this budget does--and again, I can assure 
you this is not an easy choice for anyone--is return the LIHEAP 
funding to the historic traditional levels. The LIHEAP budget 
more than doubled in fiscal year 2009 and continued that in 
2010 and 2011. This goes back to what was the historic rate. 
And it cuts $2.5 billion which is a very significant cut in the 
LIHEAP funding. I would not say that I have flexibility, if it 
is moving money from somewhere else into LIHEAP, probably not 
unless the direction of the Congress is aimed in that area.
    So again, I do not think there is an easy answer for this. 
It was traditionally the level of funding before there was a 
dramatic increase, but will it leave a lot of people who have 
relied on that help and support for the last couple of years in 
much more difficult circumstances? No question.
    Senator Reed. Well, just to reemphasize the point, we are 
looking at over 11 percent unemployment in my State. That was 
one of the reasons I think for the increase, the recognition of 
the difficult times. But the new factor is not a stable but 
potentially accelerating price for particularly heating oil, 
and we will have to revisit this again, unfortunately, I think, 
as we go forward, Madam Secretary.

                    IMMUNIZATION--SECTION 317 FUNDS

    Let me switch to a second area in the remaining time I 
have, and that is the section 317 funds for immunization. 
Immunization is such a critical part of healthcare. We do not 
have to state the benefits. When children are immunized, they 
are protected and they save tremendous amounts of--billions of 
dollars in avoided health care problems.
    The 317 funds as proposed--there seems to be a tradeoff now 
between the 317 funds and the prevention trust fund which was 
incorporated in the new healthcare act. The prevention trust 
fund is designed, at least in your proposal, for infrastructure 
improvements, but that will take away money from the actual 
acquisition of the vaccines that are necessary. Unfortunately, 
what we have seen in Rhode Island is a slippage in coverage for 
children. We have gone down from almost 90 percent to less than 
that. I have less than a moment for you to comment on that.
    Secretary Sebelius. Well again, Senator, this is a critical 
area, and Chairman Harkin already mentioned it. What the budget 
proposes is the same funding level that we have had in the 317 
program, and then, as you noted, an additional $100 million 
that would be spent out of the prevention fund for what are 
more likely to be sort of one-time investments whether it is 
school vaccination clinics or outreach efforts that States can 
employ.
    One of the challenges, as you well know, is that not only 
in Rhode Island but in States across the country, the health 
staff, the infrastructure to distribute vaccines, to do 
outreach to have kids vaccinated across the country has been 
severely hampered in cuts. So we are really trying to calibrate 
our resources and make them flexible to States, and I think 
that additional $100 million for fiscal year 2011 is a critical 
component. Up to 50 percent could be used for vaccination 
purchase or for actually immunizing kids. And we think States 
can use that to really make sure that they are filling the 
holes in their own strategies.
    Senator Reed. Thank you, Mr. Chairman.
    Senator Harkin. Thank you, Senator Reed.
    Senator Brown.

             CHILDREN'S HOSPITAL GRADUATE MEDICAL EDUCATION

    Senator Brown. Thank you, Mr. Chairman.
    I wanted to mention that I appreciate Senator Pryor's 
concern about children's GME. I also am concerned. I know 
Senator Harkin is. For 10 years, he and I have worked on this 
issue and it began when I was at Akron Children's Hospital some 
years ago and saw that we had no way with the squeeze of 
managed care to fund particularly children's pediatric 
specialist training. I appreciate your answer. I appreciate 
just about everything you do. But I think that these other ways 
of funding graduate medical education for children for training 
pediatricians is far too inadequate. So I hope that you will 
revisit this issue as it comes forward.
    Thank you for coming to Columbus on the patient safety 
issue. My State has done some remarkable things in patient 
safety in hospitals, and I think that is going to bring a lot 
of cost savings that I think opponents to the healthcare bill 
have not recognized. None of that was scored as we know, the 
work that Senator Mikulski did and Senator Harkin and others. 
But that kind of preventive care, that kind of patient safety, 
everything from the Pronovost checklist to so much else will 
clearly help us restrain healthcare costs that the opponents to 
healthcare really barely addressed. And I am really proud to 
have been part of that.

                       MAKENA, KV PHARMACEUTICAL

    Two issues I want to bring up. One is a conversation that 
we had last week on the Makena, KV Pharmaceutical. For my 
colleagues who do not know the background, a drug, a 
progesterone, that was administered once a week for 20 weeks at 
a cost of about $10 a shot for high-risk pregnant women who had 
typically had a low birth weight or a preterm birth in their 
past, was making such a difference in cutting the rate of low 
birth weight babies.
    This drug company, KV Pharmaceutical, out of St. Louis that 
really spent some money to do the clinical trials, although the 
Government had done them 7 or 8 years earlier and paid for it, 
raised their price once they got FDA approval from $10 a shot, 
$200 for the whole regimen of treatment, to $1,500 a shot, or 
$30,000 for the regimen of treatment, which will mean terribly 
high costs and burden for those women, for Medicaid, for 
insurance companies, for businesses and will also clearly 
result in an increased number of low birth weight babies.
    So I just wanted you, if not in the hearing today, to 
recommend administrative or legislative strategies that we can 
employ to do something about this. We have tried, frankly, to 
embarrass the company. We have tried to look at the Food and 
Drug Administration (FDA) when Dr. Hamburg testified to our 
subcommittee not too long ago to another subcommittee here 
about that. And we are looking for answers legislatively, 
administratively. If you would speak to that.
    Secretary Sebelius. Well, Senator, as you know, the FDA is 
really prohibited from considering price in terms of drug 
approval, which I think is an appropriate policy.
    Having said that, one of the things that the company has 
done is to actively notify pharmacists that the FDA will be 
enforcing a noncompounding rule. We have put out a statement 
today saying that is not the case. The FDA will not be 
conducting any enforcement action over the opportunity for 
pharmacists to continue to do what they have been doing, which 
is compounding this treatment and having it available to 
patients throughout the country unless there is some specific 
safety issue, which has not come to our attention yet. And we 
are continuing to work on what other options we may have, but 
we wanted pharmacists throughout the country to understand that 
in spite of the drug company's warning, that is not really the 
policy of the Food and Drug Administration.

                            PEDIATRIC CANCER

    Senator Brown. Thank you. And we will continue on that.
    A low birth weight baby in the first year of life costs on 
the average $51,000, putting aside the human cost to the child, 
to the baby, the family, and everyone else. And we know what 
that is going to do to costs of Government, and I would hope 
that people very bipartisanly would go to work on this.
    Last point, Mr. Chairman, in the brief time I have. There 
is no comprehensive pediatric cancer registry, which makes it 
difficult to compare State by State statistics. Ohio is, 
unfortunately, home to what we think of as five different sorts 
of cancer clusters. There is one in Clyde, Ohio where many 
children have been afflicted and several died. Caroline Pryce 
Walker, named after Ohio Congresswoman Deborah Pryce's 
daughter, Childhood Cancer Act was signed into law in 2008. It 
authorizes $30 million annually over 5 years for pediatric 
cancer clinical trials. I would just ask you to work with us on 
this whole Clyde, Ohio cancer cluster. The cause has not been 
determined. We are looking to HHS to work with other agencies 
to research this and other kinds of cancer clusters around the 
country.
    Secretary Sebelius. Well, Senator, I would welcome that 
opportunity because this question has come up a couple of times 
in committee and I know you are trying to parse your way 
through. But again, one of the very troubling features of H.R. 
1 in the House would have a huge detrimental effect on NIH 
trials because not only does it cut a significant amount of 
resources, $1.6 billion, but it also has a lot of language that 
would micromanage trials. And we feel that many of the clinical 
trials now underway dealing with cancer, dealing with autism, 
dealing with others would have to stop taking any additional 
patients immediately if that language were to be adopted. So 
just to put a little warning on the radar screen.
    Senator Harkin. Senator Mikulski.
    Senator Mikulski. Thank you, Mr. Chairman.
    Madam Secretary, I really just want to welcome you to the 
subcommittee. Before I go to my questions, I just want you to 
know I think you are doing a great job. You have one of the 
largest, most complex agencies within our Federal Government, 
and we want to salute you on what you are doing and also the 
fact that you are even in public service. Someone with your 
background could certainly be in the private sector. One of 
those insurance companies would snap you up in a minute and 
multiply your salary over and over again.
    Secretary Sebelius. Maybe not.

                IMPACT OF A FEDERAL GOVERNMENT SHUTDOWN

    Senator Mikulski. Well, maybe not now.
    But anyway, I just wanted to say that, because I think 
there is a lot of intensity involved in these hearings.
    This is a very quiet hearing, and I am surprised because we 
are on the brink of a shutdown. Whether you call it a shutdown 
or a slowdown, we are on the brink I think of a catastrophic 
situation. And we are only 10 days away from it. My question to 
you as Secretary of HHS is the implications and the operational 
consequences if we go to a shutdown. With the people who work 
at HHS, could you tell me how many work at HHS, and in the 
event of a shutdown, how many would be deemed nonessential and 
how many would be possibly furloughed?
    Secretary Sebelius. Senator, I am not sure I can give you 
the precise numbers right now. We do have a look-back to 1995 
when a shutdown occurred and have looked at some of the 
services and operations that were slowed down or even stopped. 
It has a pretty widespread effect on healthcare delivery and 
human service availability throughout the country because we do 
touch lives each and every day.
    Senator Mikulski. Well, let me jump in. I have major iconic 
agencies from the Federal Government and beneficiaries in my 
State. And they are also globally recognized and globally 
envied. They have names like the National Institutes of Health, 
the Food and Drug Administration, beneficiaries of HHS funds, 
Nobel Prize winning institutions like Johns Hopkins, important 
institutions like the University of Maryland.
    Let us go to NIH. If there was a shutdown, could you tell 
me the consequences on NIH either both in terms of the 
employees who would be nonessential, what would be the impact 
on clinical trials, what would be the impact on grant 
beneficiaries like at Johns Hopkins?
    Secretary Sebelius. Well again, Senator, I hesitate to give 
you specifics because I do not have them here. I can tell you 
there are conversations going on, and our best indication is 
the look-back.
    But having said that, we know that critical trials are 
underway. Research goes on day in and day out. Thousands of 
people are affected not only on the campuses that you referred 
to but certainly in grant programs throughout this country 
which provide jobs and economic opportunity.
    Senator Mikulski. If there is a shutdown, would grant 
beneficiaries continue to get their funds?
    Secretary Sebelius. Dubious. I do not know what the funding 
cycle would be.
    Senator Mikulski. I think this is really a big deal. So if 
you are in the midst of a clinical trial, whether it is cancer 
or autism, even if we looked at the ``A'' words, AIDS, autism, 
arthritis.
    Secretary Sebelius. I can tell you, having met with Dr. 
Collins as recently as 3 days ago, he currently, because of the 
uncertainty just of the 2011 budget and the numbers he has to 
work with, has given information to grantees all over the 
country that he cannot assure them that ongoing funding is 
available, and has given a very cautionary note about what they 
should do in the future. So we are operating under extremely 
uncertain territory right now.
    Senator Mikulski. Well, how will you proceed?
    Secretary Sebelius. We continue to be hopeful that there 
will be a resolution which will give us at least a framework 
for the remainder of this fiscal year which, as you know, we 
are halfway through. But certainly we have given great notice 
to all of our 11 agency directors and everyone throughout the 
Department that we are operating on 2010 estimates but to 
prepare for the possibility of significant differences.
    Let me just give you a snapshot outside of NIH.
    Senator Mikulski. Go to any agency. I mean, I raised it----
    Secretary Sebelius. We are two-thirds of the way through a 
school year with Head Start. If indeed there were to be a cut 
right now, we are not sure the programs even have enough money 
to make that cut. So, there would be programs that would be 
shut down immediately across the country because they literally 
do not have enough in their budgets to take the possible cuts. 
So we are trying to model scenarios that are very difficult to 
try and administer.
    Senator Mikulski. Well, Madam Secretary, I know my time is 
up.
    But, Mr. Chairman, you know, there is this belief that 
somehow or another a shutdown will only occur in Washington 
with people who ostensibly are overpaid or the lights will go 
out on the Washington Monument. I am terrified that the lights 
will go out at Johns Hopkins, the University of Maryland. I am 
concerned that the lights will go out in my Head Start programs 
in the rural parts of my State where they are needed. So, Mr. 
Chairman, I think we might have to ask Senator Inouye. We need 
to have maybe an all-hands-on-deck hearing on what are the 
consequences to this.
    Anyway, I exceeded my time. Thank you.
    Thank you very much, Madam Secretary.
    Senator Harkin. Thank you, Senator.
    Senator Kirk.
    Senator Kirk. Thank you.

             CHILDREN'S HOSPITAL GRADUATE MEDICAL EDUCATION

    With all respect, I hope we can reject the administration's 
proposal to zero out children's graduate medical education. And 
you just head about that as well. I think for, obviously, like 
Children's Memorial Hospital in Chicago, La Rabida, et cetera, 
I hope we go with regular order on this because the current 
system--I do not have faith that the proposal would adequately 
provide the trained physician needs in pediatrics. And I hope 
the subcommittee goes in that direction.
    Senator Harkin. I can assure the gentleman that I share his 
concern.
    Senator Kirk. Thank you.

                  WASTE, FRAUD, AND ABUSE IN MEDICARE

    I would say, Madam Secretary, you have about a $580 million 
request to root out Medicare waste, fraud, and abuse, and you 
are running around an 8 to 1 ratio of dollars provided to 
dollars saved, which is good.
    Another thing that with Ranking Member Shelby and the 
chairman that we are working on is to upgrade the very outdated 
Medicare card. This is the Medicare card as it currently 
exists, and it has none of the standard upgrades that is 
available on ID's that are available today.
    Now, the Department has funded a pilot project for DME 
equipment in Indianapolis, but it is totally outdated. It is 
only providing a mag swipe which for $30 can be completely 
counterfeited and I think does not represent the technology 
that is used by the Federal Government.
    This is a common access card of the U.S. military, and 20 
million of these have been issued at a cost of approximately $8 
each. What I just saw, because I was alert and had a lot of 
coffee at the time, is Transportation Security Administration 
(TSA) agents have common access cards. So that whole 70,000-man 
agency now has this. The critical thing is not just the 
enhanced bar code, the optical variable ink, the picture, the 
signature, and the chip, but it is all on the back as well.
    As far as I know, the Department of Defense (DOD) reports 
not a single CAC card has been counterfeited, whereas this card 
is pretty easy to counterfeit and the Social Security card 
being almost no barrier to counterfeit.
    We have agreed to team up and look at how we can use what 
is commonly available, and I am hoping you take a look at--and 
I would ask you to reach out to Secretary Gates and his team 
because I think if we had legislation that went forward to say 
to seniors, if you want to protect your ID and help root out 
waste, fraud, and abuse, for an $8 fee you can get an enhanced 
Medicare card. And I hope we do not reinvent the wheel. I hope 
that in fact we reinvent nothing. We just expand the CAC card 
to 40 million seniors.
    But I wonder if you could explore that.
    Secretary Sebelius. Well, Senator, I would love to have our 
team work with you on this issue. I do know that there has been 
concern that DOD's card is generations ahead of what we are 
looking at. It is, as you might understand, a slightly 
different universe. They have a closed network system. We have 
about 1 million providers. So, it is a challenge of different 
proportions. But we do have a new administrator who is 
specifically charged with program integrity at CMS, a position 
never created before. He is helping to build the new system and 
look at ways--and I would love to ask him to follow up with you 
and your staff because we would love to take a look at what you 
are talking about.
    Senator Kirk. I am going to be very much in train with the 
chairman and ranking minority here. But I think that a lot of 
seniors in this age of identity theft would be pretty 
reassured.
    Secretary Sebelius. Well, and we are trying, among other 
things, to establish the fraudulent card database, because it 
is not only seniors losing their card, but it is providers. So 
we have got the challenge on both fronts. But I agree with you. 
Things that could prevent that in the front end are what we are 
looking at. So, I will have Dr. Budetti follow up with you 
right away. Thank you.
    Senator Kirk. Thank you, Mr. Chairman.
    Senator Harkin. I will exercise a little chairman's 
prerogative here. I will just back up to what Senator Kirk 
said. Senator Kirk brought this up when Mr. Budetti testified 
here a few weeks ago. So it would be good for you to contact 
him and have him start closing this loop. I concur 
wholeheartedly with Senator Kirk. I think this is something 
that we just have not paid much attention to and we should. I 
hope we can close the loop on this this year --
    Secretary Sebelius. You bet.
    Senator Harkin [continuing]. And move head on it very 
aggressively.
    Secretary Sebelius. It sounds like a great bipartisan 
proposal. All for it.
    Senator Harkin. Actually a great proposal.
    Madam Secretary, we will start a second round here of 
questions for 5 minutes.

                               CLASS ACT

    The CLASS Act was raised by my good friend, Senator Shelby. 
I remember when we discussed this in the healthcare debate and 
in developing the legislation. I can tell you, as the chief 
sponsor of the Americans with Disabilities Act, now in its 21st 
year, and the chief sponsor of the Americans with Disabilities 
Act amendments which were just signed into law by President 
Bush in 2008, I was very concerned about the CLASS Act and how 
it would work. Too many people in our country simply have no 
recourse, have no way of setting aside some funds really for a 
possible disability that could happen to them or for long-term 
care as they grow older.
    Right now, one out of six people who reach the age of 65 
will spend more than $100,000 on long-term care. Yet, only 
about 8 to 10 percent of Americans have private long-term care 
insurance coverage. Medicaid now pays more than $110 billion--
$110 billion--annually for long-term care for both the elderly 
and the disabled.
    So I was one of those. I was very cautiously supportive of 
the CLASS Act. I was concerned about whether it would work or 
not and how viable it would be. That is why we put into the 
legislation the language that would give authority to you, to 
the Secretary, to change the program to make sure that it is 
financially solvent.
    So again, I guess my question to you, Madam Secretary, is 
simply that. Are you confident enough that under the 
legislation you have the authority to make any changes in the 
program to make it financially solvent in the long term?
    Secretary Sebelius. Yes, Mr. Chairman, I do think that the 
concern about actuarial solvency in the future is one that is 
very real, and I have stated that on earlier occasions. Both as 
an insurance commissioner working on solvency issues but also 
setting up the framework for what an HMO has to have in reserve 
and how you model that into the future is something that I take 
very seriously. And I think the legislation is very clear that 
we cannot turn the switch on in this program unless we can 
effectively demonstrate through actuarial models that this is a 
solvent program.
    Part of the challenge--and Senator Shelby referred to this 
earlier--is what the outreach looks like and what the take-up 
rate is. If the premiums are too high, the take-up rate will be 
very low and only accessed by those who desperately need it. If 
indeed there is a broader education effort--and I have to tell 
you part of the education effort is directly tied to the fact 
that most Americans believe that Medicare covers long-term 
care. That is a commonly held belief and often not until they 
get close to needing long-term care is there a realization that 
really the only program covering long-term care is Medicaid and 
that is only if your income is eligible.
    So part of the outreach which would have to be done early 
on and again to younger, healthier workers is the opportunity 
to set aside some income. And again, we are not talking about 
competing on long-term care insurance policies. That market 
would stay in place. This is really for a range of residential 
services. What we also know is that people want to age in 
place. They want opportunities to have assistance to stay in 
their own homes for a longer period of time, to have care 
around areas that they may not be able to do as readily as they 
could have years ago and not have a nursing home as the only 
option.
    But it would need a broad take-up rate, competitively 
priced policies, and if that cannot be modeled successfully, we 
will not turn the switch on.
    Senator Harkin. Thank you very much, Madam Secretary.
    Senator Shelby.

                     CHRONIC DISEASE GRANT PROGRAM

    Senator Shelby. Madam Secretary, the President's budget 
proposes the elimination of the preventative health services 
block grant and proposes a new consolidated chronic disease 
grant program at the Centers for Disease Control and Prevention 
(CDC). The budget justification in my understanding says this 
new grant program will not be a formula grant structure but, 
rather, it will be competitive. Rural areas and States without 
capacity will be, I believe, disproportionately affected by 
competition.
    I am concerned that the new chronic disease grant program 
will create a scenario where the rich get richer and the poor 
get poorer. What are your plans to ensure that State health 
departments have the capacity to compete for funds at the 
Centers for Disease Control?
    Secretary Sebelius. Well, Senator, I----
    Senator Shelby. Is that a concern of yours?
    Secretary Sebelius. I share the concern that often some of 
the, I would say, more underserved areas are also those with 
the higher levels of chronic disease. So the worst of all 
worlds would be to have a situation where the revenue does not 
follow the disease patterns.
    The new CDC proposal is to consolidate a series of 
separately funded disease programs. Not only does the budget 
propose an increase in funding--about $72 million above what 
the current level is--but I would suggest gives States the 
flexibility of really directing these resources to their target 
areas. Every State would get resources. Let me make that clear. 
This is not 100 percent of the funds are competed for and there 
could be losers and winners. So every State would have a level 
of funding, and over and above that, there would be some 
additional competition, but it would very much tie I think the 
disease profiles in often some of the most underserved areas to 
the resources.
    But we have heard this proposal was greatly informed by 
State health officers who asked us--often they are dealing with 
heart disease and diabetes and three or four chronic conditions 
that have the same underlying causes. And so rather than having 
that funding channeled through separate silos, they said give 
us the flexibility of really addressing our State profile, our 
situations in a more strategic manner. So that information with 
the State health officers is part of what informed this 
proposal to have a chronic disease program and get rid of the 
separate silos.

                 CONGRESSIONAL REQUESTS FOR INFORMATION

    Senator Shelby. On another subject, Madam Secretary. You 
have evidenced a commitment to work with Congress--you have 
said this before--to implement the Affordable Care Act. 
However, some of my colleagues on the HELP authorizing 
committee, specifically Senator Enzi and Senator Hatch have 
talked to me, and have many outstanding requests for 
information from your Department. I know it is a big 
Department. It is very important that the Committees on 
Appropriations work with their authorizing committees to 
conduct oversight and assess the impact that the law is having 
on patients, employers, States, and taxpayers.
    To ensure that the Congress has the necessary information 
to make informed decisions about the implementation of the new 
law going forward, Madam Secretary, would you commit--and have 
you committed before--to have your Department respond to 
congressional requests, including letters and hearing questions 
for the record within 30 days of the request? It is my 
understanding from Senators Enzi and Hatch there have been 52 
requests and 67 percent no response or incomplete response. Is 
that a concern to you? It is to them.
    Secretary Sebelius. Senator, we are committed to responding 
thoroughly and as timely as possible. We have delivered 
hundreds of boxes, thousands of pages of materials. I have had 
two hearings in the Senate Finance Committee, and I can assure 
you we are trying to get the information as quickly as 
possible. The level of requests is significant and takes an 
enormous amount of time and energy to gather the materials, but 
we are working as fast as we possibly can to be responsive and 
as timely as possible.
    Senator Shelby. So you are basically committing to be 
responsive to their requests.
    Secretary Sebelius. Yes, sir.
    Senator Shelby. Thank you.
    Thank you, Mr. Chairman.
    Senator Harkin. Thank you, Senator Shelby.
    Senator Johnson.

                          AFFORDABLE CARE ACT

    Senator Johnson. Thank you, Mr. Chairman.
    Madam Secretary, I would like to kind of go back to the 
earlier questions I was asking about what I consider just 
really understated cost estimates for the healthcare act. You 
know, back in the 1960s when they passed Medicare, they 
projected out 25 years and said that Medicare would cost $12 
billion in 1990. In fact, it ended up costing $110 billion, 
almost 10 times the original estimate. My concern is our 
Federal Government has not gotten any better at estimating 
costs.
    So you had mentioned, when I started talking, a little bit 
about the incentives embedded in this bill for not only 
employers to drop coverage but now it is for employees to want 
to get into the exchanges because there are such high levels of 
subsidies. You talked about that being cynical. I am trying to 
be realistic, and I am not the only one I think that has that 
same viewpoint.
    Douglas Holtz-Eakin, a former CBO director, has issued a 
pretty good study where he is talking about a very detailed 
decision matrix that pretty well shows that it is in the 
employer's best interest and the employee's best interest for 
about 35 million people to take advantage of those subsidies 
and the exchanges.
    Yesterday I believe The Hill reported that Joel Ario, I 
believe--I am not sure I am pronouncing that right, but he is 
the head of the health insurance exchange office within your 
agency--was quoted by saying that if exchanges worked pretty 
well, then the employer can say this is a great thing. I can 
now dump my people into the exchange and it would be good for 
them and good for me.
    And that is just what I want to explain. The decision that 
an employer is going to be going through is I can pay $15,000 a 
year to provide healthcare coverage or I can pay a $2,000 
penalty, and by doing that, I am making my employee eligible 
for, in some cases, in excess of $10,000 in subsidies. Right 
now, in 2018, according to the way the healthcare bill is 
written, a family that earns $64,000 will be eligible for a 
$10,000 subsidy. And you know, let us face it. When the Federal 
Government offers subsidies, they are generally taken advantage 
of. So I think it is totally unrealistic to expect only 3 
million out of 180 million people to take advantage of those 
subsidies.
    And my question is what happens if I am right. What if 
Douglas Eakin is right and it will be at least 35 million or 
even higher? For every 10 million additional people, it is 
going to cost $50 billion in additional costs, and that is 33 
percent higher than the original cost estimate for this 
healthcare act.
    Secretary Sebelius. Well, Senator, first of all, the 
Affordable Care Act has a ban on large employers even 
considering exchanges for at least their first 3 years. So your 
scenario in 2018 for large employers is not a possibility 
because they would not be eligible to enter into an exchange. 
And I think the ban is written in such a way that Congress will 
reconsider at the end of 3 years whether that should indeed be 
extended, and the vast majority right now who have stable 
coverage at least in the employer market is in the large 
employer area.
    Second, I think that while there are a whole variety of 
scenarios, what I know about the existing market is that small 
employers have been abandoning the market altogether. The trend 
rate for the last 10 years has been sharply downward. So 
employees who either are self-employed or farm families or who 
are working for a small employer are less and less and less 
likely to have any affordable options and therefore are 
shopping on their own in what is a very fragile individual 
market. So the trend rate is not good at all.
    I think there are, again, some very optimistic 
opportunities in creating State-based exchanges where small 
employers for the first time will have the pooling flexibility 
that their large competitors have. They will have an 
opportunity to essentially shop without a very sophisticated 
human resources (HR) department in a predesigned marketplace 
and will have the benefit right now of tax credits that we are 
seeing for the first time in a very long time bringing some of 
those folks back into the market.
    So I think the large employee marketplace will stay 
relatively stable and stay fairly much the same, although 
hopefully their costs will go down as the CBO predicts, and the 
small marketplace, which has been disintegrating dramatically 
over years, will again be stabilized.
    Senator Johnson. What is the definition of a large 
employer? What is the definition that will be excluded from 
these exchanges?
    Secretary Sebelius. I think the large employer is 100 or 
more employees.
    Senator Johnson. Thank you.
    Senator Harkin. Senator Moran.

                   INDEPENDENT PAYMENT ADVISORY BOARD

    Senator Moran. Mr. Chairman, thank you again.
    I want to go back to a couple of topics that we visited 
about earlier, Secretary, and then add a third one.
    Back to the IPAB. I want to make sure I understand that you 
indicated that there was a justification for not including 
critical access hospitals in the provisions that eliminate the 
potential for the independent board's decision. Does something 
need to be done now or are they safe for a while?
    Secretary Sebelius. All I was suggesting, Senator, is that 
I am speculating that the reason that critical access hospitals 
were treated differently in the original proposal was that 
critical access hospitals are paid differently in the current 
system. So their payment protection stays in place. The law 
requires that they get paid based on cost. And that is not the 
case of other hospitals.
    Senator Moran. Do you support exempting critical access 
hospitals from the IPAB through 2019 like the other hospitals?
    Secretary Sebelius. Well, I would be supportive of taking a 
look at what the proposal would look like. I share your concern 
that critical access hospitals are vitally important, and I 
just need to look at all the framework that protects them right 
now.

                    MEDICARE SUSTAINABLE GROWTH RATE

    Senator Moran. I actually think that because they are paid 
differently, they may be a greater target. But there is a 
justification that apparently you and I share for why they are 
paid differently.
    On my other question about the so-called ``doc fix,'' is my 
understanding that the administration has a plan for 2012-2013, 
but no concrete plan beyond that?
    Secretary Sebelius. We have not proposed 10 years of 
offsets. As you know, up until probably 1 year ago, the doc fix 
was done in a limited fashion a year at a time and never paid 
for. I think the President has said it is important to pay for 
it. He has proposed in this budget to have what amounts to 
about 2\1/2\ years of pay-fors going forward and says we look 
forward to working with Congress on a permanent fix for this 
situation.
    Senator Moran. Well, I made my position clear on the 
Affordable Care Act, and that is known. But regardless of your 
position on that legislation, the system falls apart if we do 
not make the doc fix substantial and permanent.
    Secretary Sebelius. There is no question and I have said 
that since the outset. As you noted, I mean, the Affordable 
Care Act is not what caused the gap in payment and it is not 
what will fix it. It really is, I think, something that needs 
to be discussed in the overall Medicare system.
    Senator Moran. I fear that part of the potential demise of 
our healthcare delivery system will be related to the 
Government's reimbursement of healthcare providers, that it is 
inadequacy, and we will potentially have more providers paid 
for by the Government under the Affordable Care Act, and if you 
add more people, more providers who are paid at a rate less 
than what it costs to provide the service, we lose the 
physicians who provide those services, we lose the hospitals 
that deliver those services. And so this seems to me to be an 
overriding consideration that we just have got to get to.
    Finally, your successor's successor has asked for a waiver 
under the MOE.
    Secretary Sebelius. My successor's successor.
    Senator Moran. Yes. Is that true?
    Secretary Sebelius. Who is my successor's--I do not know 
what we are talking about.
    Senator Moran. It depends on what position you have got. 
That is true. You have held so many positions. The current 
Governor of the State of Kansas has asked for a waiver. I am 
interested in knowing the status of that request and what 
criteria that you have in place or will put in place to make 
those determinations.
    Secretary Sebelius. Well, it is my understanding, Senator--
and I think this is the most updated information--that while 
there has been some suggestion by Governor Brownback that he 
would come to our office with some specifics, we do not have 
anything other than the notion that maybe a waiver would be a 
good idea. As far as I know, we have no paper. We have no 
proposal. We have no notion of what it is that he is talking 
about.
    We are working actively around the country with States 
around not only what they can do to lower their pressing 
healthcare costs but ways that other States have taken 
advantage of the current law to deliver more effective services 
at a lower cost and would look forward to working on Kansas or 
any other State. But it is my understanding we really do not 
have anything other than a letter saying we are going to come 
to you with a proposal.
    Senator Moran. Thank you, Secretary. Appreciate our 
conversation this morning.
    Mr. Chairman, thank you.
    Senator Harkin. Thank you, Senator.
    Secretary Sebelius. My predecessor's predecessor. Okay. 
Successor. That is right. I had predecessors too.
    Senator Harkin. Do we need a more Kansas----
    Secretary Sebelius. No, no, no. I am just sorting that 
title out.
    Senator Moran. There is very little good news in the Kansas 
world these days.
    Secretary Sebelius. We are all bemoaning the Jayhawks.
    Senator Harkin. I watched that game. That was quite a game.
    Secretary Sebelius. Painful for some of us.
    Senator Harkin. That is true.
    Well, Madam Secretary, thank you again for your appearance 
here. Thank you for your stewardship of this vast and complex 
Department. Thank you so much for the clarity and the 
forthrightness of your responses here today.

                     ADDITIONAL COMMITTEE QUESTIONS

    The record will stay open for 10 days for other statements 
or inclusions of questions by other Senators.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted by Senator Tom Harkin

    Question. Madame Secretary, your budget includes $765 million to 
fund the advanced development of the drugs and vaccines that we need to 
defend against bioterrorism or a public health emergency. The 
Department would like to fund this advanced development by means of 
transfers from the Project BioShield Special Reserve Fund (SRF). As you 
know, the purpose of BioShield is to provide a financial incentive to 
pharmaceutical companies by guaranteeing that the Federal Government 
will buy these drugs for the national stockpile. Unless adequate 
resources remain in BioShield, we may be calling into question the 
Federal Government's commitment to buy these products and therefore 
making it more risky for the private sector to remain in the 
countermeasure business.
    Is there a risk of undermining the entire process of developing 
drugs and countermeasures for the stockpile if significantly more 
Project BioShield balances are used for other purposes? What is the 
Department's plan to reauthorize BioShield and replenish the SRF when 
it expires at the end of fiscal year 2013?
    Answer. Project BioShield and the Special Reserve Fund have 
provided a market guarantee to attract the interest of industry to 
medical countermeasures development, and in this they have succeeded. 
This market guarantee, however, does little to make drug development 
easier or faster. We are just beginning to see the fruits of our 
decade-long investment in medical countermeasure development. 
Initiatives--such as the Strategic Investor, the Centers of Innovation 
in Advanced Development and Manufacturing and additional support for 
regulatory science at the Food and Drug Administration--planned to be 
undertaken following the Medical Countermeasures Enterprise Review of 
last year are designed specifically to remove obstacles to success and 
to increase the flow of products through the pipeline, so that Project 
BioShield can realize its full potential.
    The authorities added to the Public Health Service Act by the 
Pandemic All Hazards Preparedness Act have supported advancements in 
preparedness and response investments and capabilities. They have 
proven beneficial to the Project BioShield program by providing 
increased flexibility to support a more robust medical countermeasure 
pipeline to respond to chemical, biological, radiological, nuclear 
(CBRN) and other emerging threats. There are a number of expiring 
authorizations and authorities that should be reauthorized to ensure we 
can continue to adequately prepare for public health incidents.
    In 2004, in the DHS Appropriations Act (Public Law 108-90), 
Congress provided advance appropriations of $5.593 billion for CBRN 
countermeasures acquisition from fiscal year 2004 to fiscal year 2013. 
Congress subsequently passed the Project BioShield Act (Public Law 108-
276) to authorize the use of these funds for this purpose. The Special 
Reserve Fund (SRF), as the Project BioShield appropriation is called, 
was intended to serve as a statement of the U.S. Government's 
commitment to medical countermeasures development and a market 
guarantee to industry as it undertook the arduous process of developing 
novel medical countermeasures.
    Since its inception, eight products have been acquired using 
Project BioShield funds and deliveries have been initiated or completed 
to the Strategic National Stockpile, at an aggregate expenditure of 
$2.192 billion. Additionally, since the creation of the SRF, $25 
million has been rescinded, $995 million had been made available for 
the support of BARDA medical countermeasure advanced development, and 
$441 million has been transferred for NIH basic research and for BARDA 
and NIH pandemic influenza preparedness. Of the funds obligated to date 
for purposes other than medical countermeasure acquisition, the vast 
majority have contributed directly to maintenance and development of 
the medical countermeasure pipeline.
    In May 2011, HHS anticipates an award of $433 million for the late-
stage development of an antiviral drug to treat individuals infected 
with smallpox. The fiscal year 2012 President's budget requests $1.5 
billion, including a request that another $665 million be made 
available for advanced research and development and that $100 million 
be made available to establish the proposed Medical Countermeasure 
Strategic Investor Initiative, which if enacted would leave $742 
million for acquisitions between now and the end of fiscal year 2013.
    Investments at BARDA have focused heavily on supporting advanced 
research and development in recent years, and Project BioShield 
acquisitions will also continue through the rest of fiscal year 2011 
and into fiscal year 2012.
    Question. Madame Secretary, there is a critical need to focus on 
drug abuse prevention. Specifically, we should provide sufficient 
funding for evidence-based programs that address the use and abuse of 
alcohol, marijuana and other illegal drugs. Our country is facing what 
the Office of National Drug Control Policy has called an ``epidemic'' 
of prescription drug abuse. Prescription drugs account for the second 
most commonly abused category of drugs, behind marijuana. For this 
reason I included language in last year's Senate Report 111-243 
indicating my concern about efforts by the Substance Abuse and Mental 
Health Services Administration (SAMHSA) to blend mental health and 
substance abuse prevention funding:

    ``Given the paucity of resources for bona fide substance use and 
underage drinking prevention programs and strategies, the Committee 
instructs that money specifically appropriated to CSAP for substance 
use prevention purposes shall not be used or reallocated for other 
programs or initiatives within SAMHSA. In addition the Committee is 
instructing SAMHSA to maintain a specific focus on environmental and 
population based strategies to reduce drug use and underage drinking 
due to the cost effectiveness of these approaches.''

    Your Department recently issued a Request for Applications for the 
Strategic Prevention Framework State Prevention Enhancement Grants, 
funded through the Centers for Substance Abuse Prevention (CSAP). The 
first goal listed for potential grantees is to: ``With primary 
prevention as the focus, build emotional health, prevent or delay onset 
of, and mitigate symptoms and complications from substance abuse and 
mental illness.'' The third goal listed relates to suicide prevention.
    Question. While I recognize that there are common risk and 
protective factors for substance abuse disorders and mental illness, 
substance abuse prevention programs are unique in focusing on the 
environmental strategies for preventing drug and alcohol abuse. Will 
the grants issued under this RFA be consistent with the intent of the 
language included in last year's Senate Committee report?
    Answer. There is a critical need to focus on substance abuse 
prevention. As you point out, substance abuse prevention requires 
unique environmental and population-based approaches, but it also 
requires a focus on common risk and protective factors that put all the 
Nation's children at risk. SAMHSA has taken a leadership role, along 
with colleagues at NIH, CDC, and ACF, to consider the best way to 
encourage States and communities to work collaboratively on the 
prevention of substance abuse and on ways to build resilience that will 
help our young people, their families, and the systems that serve them.
    As you note, a common set of risk and protective factors affects 
the development of certain mental and substance use disorders in youth. 
The scientific evidence supports an approach that addresses both 
substance abuse and mental health prevention in tandem. The 2009 
Institute of Medicine Report Preventing Mental, Emotional, and 
Behavioral Disorders Among Young People provides evidence for these 
common factors. In addition, we know that youth with mental illnesses, 
such as depression, are much more likely to use/abuse alcohol or use 
substances. A high proportion of youth are under the influence of 
alcohol, illegal substances, or nonmedical use of prescription drugs 
when they attempt or die by suicide. These issues are not disconnected. 
For too long, we have focused on the unique aspects of prevention of 
mental illness and substance use/abuse when the evidence shows that 
both the substance abuse and the mental health fields can benefit from 
employing environmental strategies and supporting the emotional health 
of youth.
    All SAMHSA grants and contracts are aligned with SAMHSA's Strategic 
Initiatives. The grants to be issued under the Strategic Prevention 
Framework State Prevention Enhancement Grants (SPE) request for 
applications (RFA) support SAMHSA's Strategic Initiative #1--Prevention 
of Substance Abuse and Mental Illness. These grants are intended to 
focus solely on substance abuse prevention and are strictly consistent 
with the intent of the language included in the fiscal year 2011 Senate 
Committee report. The language you reference in the RFA is a 
description of SAMHSA's Strategic Initiative, which addresses both 
substance abuse and the development of emotional health.
    We have issued this RFA to assist States, Tribes, and U.S. 
Territories in conducting one intensive year of capacity building and 
strategic planning to strengthen and enhance their substance abuse 
prevention infrastructures to better support communities of high need 
throughout the Nation. Through stronger, more strategically aligned 
substance abuse prevention infrastructures, SPE grantees will be better 
positioned to apply the Strategic Prevention Framework (SPF) process to 
achieve more collaborative, cost-effective coordination of services and 
to implement data-driven, environmental, and population-based 
strategies to reduce substance abuse, including underage drinking.
    The fiscal year 2012 President's budget for SAMHSA includes two 
separate State Prevention Grants, one for substance abuse and one for 
mental health, reflecting the highest priority of HHS on prevention 
generally and of SAMHSA on the prevention of both substance abuse and 
mental illness--with separate approaches for each. These programs will 
continue HHS/SAMHSA's priority to promote emotional health as well as 
supporting Congress' direction to focus on environmental and 
population-based strategies to reduce illicit drug use and underage 
drinking. Likewise, the fiscal year 2012 Budget continues separate 
funding to implement underage drinking prevention strategies under the 
Sober Truth on Preventing (STOP) Underage Drinking Act.
    Question. Madame Secretary, since fiscal year 2002 this Committee 
has included funding for the embryo adoption public awareness campaign. 
The purpose of this program is to educate Americans about the existence 
of frozen embryos resulting from in-vitro fertilization and which may 
be available for adoption. In total, we've provided over $23 million 
for this program throughout its history.
    Please provide an indication of how successful this program has 
been. For example, how many adoptions have been made since the start of 
the program?
    Answer. Because it is a health awareness effort, the impact (and 
consequently the success) of the Frozen Embryo Donation/Adoption Public 
Awareness Campaign is difficult to directly link to the number of 
embryos ``adopted'' in a given year. The success is better measured by 
the level of public awareness of the issue among the target population 
(in this case infertile couples). The first comprehensive and 
scientific attempt to assess the overall impact of the Frozen Embryo 
Donation/Adoption Public Awareness Campaign will be conducted in 2012 
through the National Survey of Family Growth, which will survey a 
nationally representative sample of infertile couples about their level 
of awareness of the availability of frozen embryos for adoption. 
Estimates derived from the CDC's surveillance system of Assisted 
Reproductive Technology indicate that about 2,000 frozen embryos are 
adopted each year--a number that has been relatively static since 2004.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye

NINR'S ROLE IN THE NATIONAL CENTER FOR ADVANCING TRANSLATIONAL SCIENCES 
                                (NCATS)

    Question. Madam Secretary, scientific inquiry, planned and 
conducted by nurses, is a vital part of improving the health and 
healthcare of Americans. Nursing research has been a long time catalyst 
for many of the positive changes that we have seen in patient care over 
the years. The National Institute of Nursing Research (NINR) was given 
an fiscal year 2010 appropriation of $145.575 million and has requested 
$148.114 million for fiscal year 2012. That would be an increase of 
$2.539 million (1.7 percent), which is in line with the increases 
requested for many of the other NIH Institutes. The overall increase 
requested by NIH for fiscal year 2012 is 2.4 percent. About $1.2 
million of the requested increase would support additional funding for 
NINR's research grants and training awards. About $1 million of the 
increase would support NINR's share of Institute contributions to 
several trans-NIH initiatives.
    NIH has proposed the creation of a new National Center for 
Advancing Translational Sciences (NCATS) to provide the infrastructure 
and technologies to bring important discoveries from basic research to 
fruition through new diagnostics and therapeutics. What role might NINR 
have in working with NCATS?
    Answer. Nursing science is historically grounded in the translation 
of research and science, and is an essential scientific nexus for these 
efforts across the United States and around the globe. NINR and its 
scientists, intramural and extramural, are leaders in the translation 
of research into health and healthcare interventions. NINR supports 
preclinical basic and applied research that integrates biological and 
behavioral sciences. NINR scientists are employing new scientific 
technologies from diverse fields including neuroscience, genetics and 
genomics, molecular biology, biochemistry, and physiology in order to 
improve quality of life through health promotion, disease prevention, 
and management of symptoms. NINR and nursing science invests in the 
infrastructure, resources, and scientific capacity building and 
training critical for the success of these efforts.
    NINR would collaborate with the proposed National Center for 
Advancing Translational Sciences (NCATS) to maintain and enhance 
translational and interdisciplinary initiatives across the NIH, as well 
as with other government and nongovernment organizations. NINR 
currently leads and participates in several interdisciplinary 
collaborative programs and partnerships that support translational 
science including: the NIH Public Trust Initiative; the NIH Pain 
Consortium; and the Clinical and Translational Science Awards (CTSAs).
    In particular, the Clinical and Translational Science Awards (CTSA) 
program is a major trans-NIH initiative that, since its launch in 2006, 
has proven to be a critical component in the NIH efforts to accelerate 
research translation. CTSA funded projects touch on all aspects of 
translational research including community-based participatory studies, 
implementation science, and health services research. Central to the 
CTSA program are multifaceted team science, broadly supported 
collaborations, and the training and mentoring of the next generation 
of interdisciplinary translational scientists--all of which are also 
central foci of nursing science.
    NINR encourages its scientists to become leaders in the CTSAs. 
Working with NIH partners and groups such as the CTSA Nurse Scientists 
Special Interest Group, NINR co-sponsors CTSA-related workshops and 
symposia to identify research opportunities, highlight successful 
exemplars, and develop strategies to maximize the diverse disciplinary 
strengths of nursing science. While several current CTSA's include 
scientists from nursing specialties who are at the leading edge of 
translational and interdisciplinary research, NINR supports the goal of 
the CTSA Nurse Scientist Special Interest Group to elevate nurse 
scientists to leadership roles in future CTSAs.

   ADOPTION OF BEST PRACTICES BY HEALTHCARE PROFESSIONALS AND THEIR 
                                PATIENTS

    Question. NINR supports many activities to enhance the evidence 
base for healthcare decisions, including assessing the effectiveness of 
new therapies and healthcare interventions for individuals and within 
diverse populations. What are your successes and frustrations with 
seeing measurable changes in the adoption of such best practices by 
healthcare professionals and their patients?
    Answer. NINR investigators and research efforts emphasize the 
development and use of evidence-based interventions with individuals in 
diverse, real-world settings. Nurses and nurse scientists play primary 
roles in the translation of research findings into standard practice 
because of their prominence in front-line health service provision 
across clinical settings. Currently, over 90 percent of NINR-supported 
projects are clinically focused.
    As a science committed to the translation of evidenced-based 
research to the clinician, clinic, and community, nursing science 
shares the frustration of the translation-gap between research and 
clinical practice. Acknowledging this, nurse scientists are overcoming 
the barriers to translation and adoption of research findings through 
highly collaborative, interdisciplinary scientific efforts. NINR 
supports research efforts from a broad spectrum of disciplines, 
involving academic and clinical scientists in settings ranging from 
bench laboratories to hospital bedsides.
    NINR has experienced successful translation and adoption of 
evidence-based programs in key areas such as transitional care, and 
patient and caregiver interventions. An NINR-supported program 
partnered an interdisciplinary group of caregivers with older heart 
failure patients to ease their transition from clinical to home care. 
In a randomized clinical trial, the program was successful in reducing 
re-hospitalization rates for this high-risk group of patients, and in 
addition, it reduced total costs by about 38 percent, or $3,500 per 
patient. Another NINR-supported program improved the knowledge and 
coping mechanisms for parents of premature infants by facilitating 
positive parenting behaviors and lowering parental stress. This 
intervention also decreased the length of NICU hospitalization by about 
4 days and the associated hospital costs by about $4,800 per infant. 
NINR has also supported the development of a behavioral intervention 
that significantly reduced the incidence of post-stroke depression in 
stroke survivors, compared to patients who only received 
antidepressants. Immediate benefits, as well as sustainable 
improvements, remained for at least 1 year post-intervention. An 
intervention such as this one potentially can have a profound impact on 
the long term health outcomes of individuals who have survived a 
stroke.
    NINR will continue supporting the adoption of evidence-based 
research into practice through such research programs as the NINR 
Centers Program. Across the United States, these Centers function as 
translational research hubs within schools of nursing. Promoting 
collaboration between disciplines and across institutions through the 
use of shared resources and expertise, this program is designed to 
increase research capacity, accelerate translational research, enhance 
mentorship of doctoral students and early career scientists, and expand 
the science of investigators working on multiple projects. NINR Centers 
provide the stable base needed to develop broad, interdisciplinary 
translational programs of research to speed the application of research 
into practice.

    NINR'S PARTICIPATION IN PROGRAMS TO KEEP UP THE SUPPLY OF NURSE 
                              RESEARCHERS

    Question. NIH has various grant and training programs that are 
meant to encourage young investigators to pursue research careers and 
try out innovative ideas. How does NINR participate in those programs 
to keep up the supply of nurse researchers?
    Answer. NINR is committed to encouraging, supporting, and 
developing the next generation of nurse scientists. NINR training 
activities are designed to achieve the vision of creating an 
innovative, multidisciplinary, and diverse scientific workforce. In 
addition to supporting pre- and post-doctoral research fellowships and 
career development awards in the extramural community, NINR also leads 
and participates in a number of training programs through its 
Intramural Research Program (IRP).
    NINR training activities support individual and institutional 
graduate and post-graduate research fellowships, as well as career 
development awards, including awards to trainees from under-represented 
and disadvantaged backgrounds. These programs provide the next 
generation of scientists with the necessary, interdisciplinary 
education and research skills that will enable them to improve clinical 
practice, enhance quality of life for those with chronic illness, and 
support preventative health. For example, NINR supports investigators 
under the NIH K99/R00 Pathway to Independence (PI) program, in which 
promising postdoctoral scientists receive both mentored and independent 
research support for up to 5 years.
    The NINR IRP also supports several research training opportunities 
through programs such as the NINR Summer Genetics Institute, a 1-month 
program designed to increase the research capability in genetics among 
graduate students and faculty in nursing and to develop and expand the 
basis for clinical practice in genetics among clinicians. NINR also 
participates in the NIH Graduate Partnerships Program (GPP), in which 
doctoral students from schools of nursing with established NINR-
supported training programs can complete their dissertation research 
within the IRP. NINR also sponsors the Pain Methodologies Boot Camp, 
which is a 1-week intensive research training course in pain 
methodology at NIH that is aimed at increasing the research 
capabilities of graduate students and faculty through distinguished 
guest speakers, classroom discussions, and laboratory training.
    An expanded scientific workforce with expertise in these areas of 
research will significantly contribute to evidence-based improvements 
and reforms to the healthcare system in the coming years. Collectively, 
NINR training activities address the national shortage of nurses by 
contributing to the development of the nursing faculty needed to teach 
and mentor individuals entering the field.

   NINR'S PLANS IN RESEARCH ON AUTISM, CANCER AND ALZEIMER'S DISEASE

    Question. Does NINR have any particular plans that respond to the 
Presidential Initiatives in research on autism, cancer, and Alzheimer's 
disease?
    Answer. NINR is committed to continuing efforts to support research 
that informs the provision of quality care and improving quality of 
life for persons with autism, cancer and Alzheimer's disease (AD) and 
other dementias, as well as supporting their informal caregivers. 
Recent efforts in autism at NINR include the examination of the effects 
of an intervention based on self-regulation human-animal interaction 
theory (e.g. therapeutic horseback riding) on children and adolescents 
with autism, as well as the development of a peer-mentored disaster-
preparedness program for adults living with autism and other 
developmental disabilities. NINR is also co-sponsoring an NIH funding 
opportunity to support research into the origins, causes, diagnosis, 
treatment, and optimal service delivery in autism spectrum disorders.
    NINR's cancer research focuses on developing the evidence-base for 
enhancing the individual's role in managing disease, managing 
debilitating symptoms, and improving health outcomes for individuals 
and caregivers. Several NINR-supported scientists are examining how 
clinicians and patients work through the treatment and support 
decisionmaking process, across the trajectory from diagnosis to end-of-
life and palliative care or illness remission. NINR currently supports 
numerous projects in the area of cancer pain research, including 
studies to investigate the underlying molecular mechanisms that cause 
cancer treatment-related pain, as well as a patient-controlled 
cognitive-behavioral intervention for cancer symptoms. Another study is 
developing and testing a physician-nurse team intervention to provide 
clear and timely end-of-life and palliative care communication to 
parents of children with brain tumors. NINR-supported research also 
focuses on cancer recurrence prevention and improved quality of life 
through such scientific efforts as the development of cancer screening 
programs for diverse populations, a genetic cancer risk assessment tool 
to improve screening efforts, and a psycho-educational telehealth 
intervention for rural cancer survivors. NINR also reaches directly to 
the public through such efforts as the development and dissemination of 
the NINR publication, ``Palliative Care: The Relief You Need when 
You're Experiencing the Symptoms of Serious Illness'' which has been 
downloaded from the NINR website nearly one million times.
    NINR research on interventions for older adults with AD focuses on 
areas such as: alleviating symptoms such as pain, discomfort, and 
delirium; improving communication for clinicians; and memory support. 
For example, NINR is currently supporting a project to test the 
effectiveness of an activity-based intervention designed to increase 
quality of life by reducing agitation and passivity and increasing 
engagement and positive mood in nursing home residents with dementia. 
Another NINR-funded study involves an evidence-based, nurse 
practitioner-guided intervention for patients with AD or other 
dementia, as well as their family caregivers. The intervention is 
expected to improve overall quality of life by decreasing depressive 
symptoms, reducing burden, and improving self-efficacy for managing 
dementia in caregivers. NINR also emphasizes research on interventions 
aimed at improving quality of life and reducing burden for caregivers. 
Recognizing the challenges often experienced by caregivers, NINR 
supports research on strategies to improve the skills caregivers need 
to provide in-home care, to reduce stress and burden, and to maintain 
and improve their own health and emotional well-being. Together NINR 
and the National Institute on Aging are supporting the Resources for 
Enhancing Alzheimer's Caregiver Health (REACH) II program, a 
comprehensive, multi-site intervention to assist AD caregivers by 
providing strategies to manage stress, maintain social support groups, 
and enhance their own health. Multiple efforts across the Federal 
Government are currently underway to implement REACH II in the 
community, such as through the Administration on Aging's Alzheimer's 
Disease Supportive Services Program.
    Question. What is the current nursing shortage and how are current 
initiatives impacting that shortage?
    Answer. Strengthening and growing the primary care workforce--
including nurses and nurse practitioners--is critical to reforming the 
Nation's healthcare system. In fiscal year 2010, the ACA Prevention and 
Public Health Fund supported $31 million for the training of 600 new 
nurse practitioners and nurse mid-wives by 2015 and $15 million for 
Nurse-Managed Clinics, which provide primary care and wellness services 
to underserved and vulnerable populations. The fiscal year 2012 budget 
includes $20 million for these Clinics.
    The fiscal year 2012 budget includes $333 million, an increase of 
$43 million over fiscal year 2010, to support the training of nurses 
and advance practice nurses. The fiscal year 2012 budget initiates a 5-
year effort to fund the training of an additional 4,000 new primary 
care providers--including 1,400 advance practice nurses.
    Question. Is the Department investing in any efforts to assure that 
nurses are available in the regions that need them the most?
    Answer. The Administration supports several programs that encourage 
nurses to practice in underserved areas and facilities throughout our 
Nation. Applicants with initiatives benefitting rural and underserved 
areas are given preference for all Public Health Service Act Title VIII 
nursing workforce funding.
    In addition, the Nurse Education Loan Repayment Program and Nursing 
Scholarship Program offer financial support for nurses who agree to 
serve in healthcare facilities facing critical shortages of nurses.
    The Affordable Care Act provides $1.5 billion for the National 
Health Service Corps over the next 5 years, which will help bolster the 
supply of clinicians--including nurse practitioners--serving at rural 
health clinics, community health centers, and other primary care sites 
with a shortage of health professionals.
    Question. H.R. 1 proposes to reduce funding for the Nurse Education 
and Loan Repayment program by two-thirds. Is this a good idea to reduce 
funding when there is such a well documented nursing shortage?
    Answer. The Nursing Education Loan Repayment and Scholarship 
programs provide financial incentives to nurses who agree to work at 
healthcare facilities with a critical shortage of nurses. The proposed 
reduction in H.R. 1 would support approximately 850 fewer nurses than 
would otherwise be supported. The fiscal year 2012 budget includes $94 
million, the same level as fiscal year 2010, for this program in 
recognition of the key role that it plays in supporting the recruitment 
and retention of nurses in underserved areas.
    Question. How is it that HHS says we have a nursing shortage when I 
hear that graduating nursing can't find jobs?
    Answer. While there remains an overall shortage of nurses, nursing 
shortages vary geographically and by sector (e.g., hospitals, nursing 
homes). More nurses are delaying retirement and increasing their hours 
due to the economic downturn, which has allowed for some temporary 
easing in the nursing shortage in some parts of the country. However, 
the shortage is still substantial in many parts of the country, and 
without sustained production of nurses, the situation will worsen.
    Question. Will the funds appropriated from the Community Health 
Center Fund (Sec. 10503 of the Patient Protection and Affordable Care 
Act) be used to expand this program? If yes, what are the planned 
program expansions?
    Answer. Native Hawaiian Health Care Programs are not eligible for 
funding under Section 10503 of the Patient Protection and Affordable 
Care Act.
    Question. How would proposals to use some or all of the community 
health center fund in lieu of the annual health center appropriation 
affect: the program in general; the ability to sustain program 
investments made using American Recovery and Reinvestment Act (ARRA 
Public Law 111-5) funds; the ability to expand the program; and the 
Native Hawaiian healthcare system that is funded from the annual health 
center appropriation?
    Answer. In fiscal year 2011 the combined resources from the 
Community Health Center Fund and discretionary appropriations will 
enable the program to sustain investments made using American Recovery 
and Reinvestment Act funds as well as create new health center sites. 
In total, the Health Center Program will receive a nearly $400 million 
increase in fiscal year 2011 above fiscal year 2010 levels.
    Question. Secretary Sebelius, there are many different departments 
and agencies responsible for our Nation's preparedness and response to 
a natural or man-made disaster. Can you talk about the unique role EMSC 
plays in those efforts?
    Answer. The Emergency Medical Services for Children (EMSC) Program 
under section 1910 of the Public Health Service Act (42 U.S.C. 300w-9) 
is the only Federal program that focuses specifically on improving the 
pediatric components of emergency medical care. The program was created 
to address gaps in the provision of quality emergency medical care to 
children, and to address the specific anatomical, physiological and 
developmental needs of children. The program focuses on improving the 
everyday pediatric readiness of the Nation's EMS system to provide the 
appropriate infrastructure for disaster preparedness. Furthermore, EMSC 
focuses on emphasizing pediatric specific issues in disaster care of a 
child in a non-pediatric facility, family reunification, surge capacity 
due to the increased vulnerability of children in disaster and transfer 
to other facilities for higher levels of care.
    Question. Are our Nation's hospitals, ambulances, and first 
responders better prepared to treat pediatric patients as a result of 
the EMSC program?
    Answer. During the 2010-11 assessment of performance measures, the 
55 funded State Partnership grantees collected data from over 2,600 
emergency departments, approximately 6,660 BLS/ALS agencies, and 
conducted an assessment of more than 22,000 vehicles that transport 
children in emergency situations.
    Findings from select measures demonstrate improvement in the 
Nation's pre-hospital provider's access to pediatric medical guidance 
in the field, more Basic Life Support (BLS) and Advanced Life Support 
(ALS) transport vehicles carrying essential pediatric equipment and 
States supporting pediatric continuing education for BLS/ALS providers.
    Question. How has the EMSC program helped States be better prepared 
for the disaster response and recovery of children?
    Answer. The EMSC program is funding projects that will guide 
practice in the EMS field for which minimal evidence exist to guide 
appropriate delivery of care. Findings are translated into tool kits 
and resources that are readily available to States and local 
communities. The EMSC National resource center is working with multiple 
partner-agencies to develop a web-based resource tool with disaster 
related products, publications and resources. This will be available to 
States and local communities as they developed their disaster plans.
    EMSC is also working with States to develop models of regionalized 
care where pediatric resources may be limited. State and Territory 
grantees in the Pacific Basin are working on an inter-island agreement 
for regionalized care for the pediatric patient. This type of model can 
be used in disaster planning as well in which specialty care is 
limited, geographical boundaries may require coordination of many 
agencies and a prior infrastructure will be essential.
    EMSC collaborates with all agencies and systems involved in 
providing care to the pediatric patient and are active in contributing 
to the special situation of disaster. EMSC continues to provide 
important insight to disaster planning since issues of special 
equipment, surge capacity, regionalized care are integral to everyday 
readiness of pediatric emergency care.
    Question. What would a cut along the lines of that proposed in H.R. 
1 mean for the 127 health center sites that have opened within the past 
year and the almost 3.7 million new patients currently receiving care 
at a health center because of the investments through the American 
Recovery and Reinvestment Act?
    Answer. Funding levels provided in H.R. 1 would impact the ability 
of the Health Center Program to fully fund the 127 new access point 
grants originally supported by the Recovery Act and would also impact 
the number of patients currently served at health centers, including 
the 3.7 million patients served through the Recovery Act.
    Question. Can you tell us how many applications for new health 
centers HRSA has received?
    Answer. Over 800 applications have been received for the fiscal 
year 2011 New Access Point funding opportunity.
    Question. How many awards does HRSA intend to fund?
    Answer. HRSA is in the process of determining how many Health 
Center New Access Points through Affordable Care Act funding in fiscal 
year 2011.
    Question. How many awards would HRSA make if H.R. 1 is enacted?
    Answer. Under H.R. 1, there would have been no new funding 
available to support Health Center New Access Points in fiscal year 
2011.
    Question. Can you describe the overarching impact on the healthcare 
system of the continued health center expansion, as outlined in the 
President's fiscal year 2012 budget request?
    Answer. The President's fiscal year 2012 budget request for health 
centers, more high quality, cost-effective, preventive and primary 
healthcare services will be made available nationwide.
    Question. Madam Secretary, what additional benefits do health 
centers bring to their local communities, in addition to the creation 
of jobs and generation of economic activity?
    Answer. Health centers increase access to healthcare through an 
innovative model of community-based, comprehensive primary healthcare 
that focus on outreach, disease prevention, and patient education 
activities. For example, evaluations have found that:
  --Uninsured people living within close proximity to a health center 
        are less likely to have an unmet medical need, less likely to 
        have postponed or delayed seeking needed care, and more likely 
        to have had a general medical visit.\1\
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    \1\ Hadley J and Cunningham P. Availability of Safety Net Providers 
and Access to Care of Uninsured Persons. Health Services Research 
2004;39(5):1527-1546.
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  --Health center uninsured patients are more likely to have a usual 
        source of care than the uninsured nationally (98 percent versus 
        75 percent).\2\
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    \2\ Carlson, BL et al, ``Primary Care of Patients without Health 
Insurance by Community Health Centers.'' April 2001 Journal of 
Ambulatory Care Management  24(2):47-59.
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    Increasing access and reducing disparities in healthcare requires 
quality providers who can deliver culturally-competent, accessible, and 
integrated care. Health centers recognize this need and support a 
multi-disciplinary workforce designed to treat the whole patient. For 
example, evaluations have found that:
  --Health center patient rates of blood pressure control were better 
        than rates in hospital-affiliated clinics or in commercial 
        managed care populations, and racial/ethnic disparities in 
        quality of care were eliminated after adjusting for insurance 
        status.\3\
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    \3\ Hicks LS, et al. The Quality of Chronic Disease Care in US 
Community Health Centers. Health Affairs 2006;25(6):1713-1723.
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  --A high proportion of health center patients receive appropriate 
        diabetes care.\4\
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    \4\ Maizlish NA, Shaw B, and Hendry K. Glycemic Control in Diabetic 
Patients Served by Community Health Centers. American Journal of 
Medical Quality 2004;19(4):172-179.
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  --Health center low birthweight rates continue to be lower than 
        national averages for all infants. In particular, the health 
        center low birthweight for African-American patients is lower 
        than the rate observed among African-Americans nationally (10.7 
        percent versus 14.9 percent respectively).\5\
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    \5\ Shi, L., et al. America's health centers: Reducing racial and 
ethnic disparities in perinatal care and birth outcomes. Health 
Services Research, 2004; 39(6):1881-1901.
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  --Health centers play a critical role in providing healthcare 
        services to rural residents who tend to have higher rates of 
        chronic diseases, such as the 27 percent of rural residents 
        suffering from obesity \6\ and nearly 10 percent diagnosed with 
        diabetes.\7\
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    \6\ Bennett, K. J., Olatosi, B., & Probst, J.C. (2008). ``Health 
Disparities: A Rural--Urban Chartbook.'' South Carolina Rural Health 
Research Center.
    \7\ Pleis JR, Lethbridge-Cejku M. Summary health statistics for 
U.S. adults: National Health Interview Survey, 2006. National Center 
for Health Statistics. Vital Health Stat 10(235). 2007.
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  --Over the past 4 years, cost increases at health centers have been 
        at least 20 percent below national increases.\8\
---------------------------------------------------------------------------
    \8\ Centers for Medicare and Medicaid Services, Office of the 
Actuary, National Health Statistics Group: National Health 
Expenditures: 2002-2005.
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  --Rural counties with a community health center site had 33 percent 
        fewer uninsured emergency room/department visits per 10,000 
        uninsured population than those without a health center.\9\
---------------------------------------------------------------------------
    \9\ Rust George, et al. ``Presence of a Community Health Center and 
Uninsured Emergency Department Visit Rates in Rural Counties.'' Journal 
of Rural Health Winter 2009 25(1):8-16.
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  --The cost of treating patients with diabetes in health center 
        settings was approximately $400 less than that experienced by 
        other primary care settings.\10\
---------------------------------------------------------------------------
    \10\ Proser M, Deserving the Spotlight: Health Centers Provide 
High-Quality and Cost Effective Care. J Ambulatory Care Management, 
2005; 28(4): 321-330.
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  --In 2009, health centers generated over $11 billion in revenues and 
        employed over 123,000 full-time equivalents.
    Question. I noticed that the fiscal year 2011 Application and 
Guidance released in November of 2010 did not include pharmacist as 
part of the eligible participants in NHSC loan repayment program. Are 
there any plans in the near future to include pharmacists in the NHSC 
loan repayment program?
    Answer. The National Health Service Corp (NHSC) program is 
currently conducting an analysis of the Loan Repayment Program (LRP) 
statute and program policies, which includes a review of the 
disciplines the NHSC supports.
    The inclusion of pharmacists or other disciplines must be 
consistent with the statute that established the NHSC to recruit and 
retain primary medical, dental and mental healthcare providers to 
provide primary health services to underserved populations in health 
professional shortage areas. The Public Health Service Act, which 
authorized the NHSC, defines ``primary health services'' as ``health 
services regarding family medicine, internal medicine, pediatrics, 
obstetrics and gynecology, dentistry, or mental health, that are 
provided by physicians or other health professionals'' (42 U.S. Code 
Sec. 254d(a)(3)(D)). To date, pharmacists have not been considered an 
eligible discipline for participation in the NHSC program.
    As part of the discipline review, the NHSC has also conducted a 
survey of Community Health Centers and other NSHC-approved sites to 
determine the demand for additional disciplines in the NHSC. The 
results of this survey are currently under review. Any updates to the 
eligible disciplines will be announced through program guidance.
    Question. Currently, HRSA collects data on healthcare shortage 
areas for primary care. Given the poor outcomes in pregnancy in this 
country and the shortage of physicians and midwives, are there any 
plans to look at identifying maternity care shortage areas?
    Answer. Health Professional Shortage Areas (HPSAs) are designated 
by the Department as those areas having shortages of primary medical 
care, dental or mental health providers. HPSAs may be geographic (e.g., 
a county or service area), demographic (e.g., low-income population) or 
institutional (e.g., federally qualified health center). Among the 
factors considered in the designation process are the numbers of 
healthcare providers in the area. For the primary care HPSA 
designation, Obstetricians/Gynecologists (OB/GYNs) are included in the 
provider count when the Department evaluates the number of primary care 
providers in an area. As you know, the Affordable Care Act required the 
establishment of a Negotiated Rulemaking Committee (Committee) to make 
recommendations regarding a revised methodology, criteria and process 
for making such shortage designations. The Committee is considering the 
role of OB/GYNs in the development of revised criteria for primary care 
shortage designation. There are not, however, current plans to 
separately identify maternity care shortage areas.
    Question. In the remote islands of Hawaii women have few options 
for giving birth. We know that freestanding birth centers have improved 
access to care and made significant impact on disparities for mothers 
and babies. What plans, if any, are there to provide funding to develop 
more of these freestanding birth centers in underserved communities?
    Answer. The Health Center Program does not provide funding 
specifically for the development of birthing centers. However, health 
centers may choose to address the primary healthcare needs of their 
target populations through a variety of services including obstetrics 
care and site locations within their approved Health Center Program 
grant.
    Question. The Maternal and child health services block grant 
facilitate in planning, promoting, coordinating and evaluating 
healthcare for pregnant women, mothers, infants, and children, children 
with special healthcare needs, and families in providing health 
services for those populations who do not have access to adequate 
healthcare. I am concerned that decreased funding for this important 
program may have a negative impact on our Nation. Would you please 
describe the rationale behind decreasing funding for Maternal Child 
Block Grants in the fiscal year 2012 budget?
    Answer. The fiscal year 2012 budget proposes a decrease to the 
Maternal and Child Health Block Grant. The proposed budget would reduce 
funding for categorical research grants and not from the MCH grants to 
States, in order to respond to the priorities in the fiscal year 2011 
final appropriations.
    Question. In 2000, Congress launched an important national program, 
the National Child Traumatic Stress Initiative, which focuses on a 
child traumatic stress, a critical public health problem. With over 130 
funded and affiliate programs, this SAMHSA program addresses the 
specific needs of children and families who are exposed to a wide range 
of trauma, including physical and sexual abuse, violence in families 
and communities, natural disasters and terrorism, accidental or violent 
death of a loved one, refugee and war experiences, and life-threatening 
injury and illness. Over the past 10 years, this program has had strong 
bipartisan and bicameral support. The program has been shown to be 
extraordinarily effective in expediting science to service through a 
collaborative and systems change approach that is helping children and 
families recover by improving the treatment and services they receive. 
In Hawaii, we have a strong program through our Catholic Charities 
Center, and have seen firsthand the benefits of this initiative.
    Secretary Sebelius, in fiscal year 2010 the funding for this 
program was $40,798,000. In fiscal year 2012, the funding drops to 
$11,300,000 a 72 percent cut from fiscal year 2010 funding levels. 
Would you please describe the rationale behind cutting funding to this 
valuable program?
    Answer. SAMHSA is committed to developing and disseminating trauma-
informed services by expanding efforts to infuse trauma-informed 
related activities and lessons learned from the 10-year history of the 
National Child Traumatic Stress Network (NCTSN) across its entire grant 
portfolio. SAMHSA's commitment to bring trauma-informed services to 
scale will reach beyond individual programs and grantees, build on the 
success of the NCTSN, and include a focus on a diverse mix of 
communities (e.g., military families) and trauma-related experiences 
(e.g., environmental, historic, economic) while allowing States to 
focus resources in communities with the greatest needs. SAMHSA is also 
working with the Administration on Children and Families (ACF) and the 
Department of Justice (DOJ) to provide technical assistance and share 
evidence-based practices and products garnered generated from the 
NCTSN. The fiscal year 2012 request for NCTSN does not terminate or 
reduce any existing grants.
                                 ______
                                 
                Questions Submitted by Senator Herb Kohl

    Question. I am concerned about the timeline of implementing the 
physician sunshine provisions (section 6002) of the Affordable Care 
Act. Shining light on industry payments to physicians will help 
demonstrate the importance of proper research relationships, while 
exposing and eliminating conflicts of interest and providing important 
information to patients about their health choices.
    As you know, the Department of Health and Human Services (HHS) has 
a deadline of this October to establish the procedures by which 
industry must report information. However, it would be helpful to 
release guidance as soon as possible. Businesses and industry will need 
time to develop their internal systems to comply with the disclosure 
deadline of March 31, 2013. As you develop the guidance, I encourage 
you to work closely with stakeholder groups to ensure that the data 
collected will be useful and consistent with the legislation's intent.
    With these deadlines looming, what is HHS's plan for implementation 
of the sunshine regulations? Has your staff been meeting regularly with 
stakeholder groups? What is your timetable for proposing the scope of 
reportable information? Included in your response, please detail which 
office will be drafting and finalizing these rules and why that office 
was chosen.
    Answer. HHS is moving forward with the implementation of the 
Affordable Care Act's requirements related to Section 6002, 
``Transparency Reports and Reporting of Physician Ownership or 
Investment Interests.'' After reviewing the responsibilities this 
provision delegates to the Department, I decided that the Centers for 
Medicare & Medicaid Services (CMS) would be the most appropriate agency 
to implement all of the requirements. CMS is currently in the process 
of rulemaking to establish procedures for reporting and more 
information will be forthcoming as the process moves forward. CMS' 
Center for Strategic Planning and the Center for Program Integrity have 
dual responsibility for developing these regulations. To prepare for 
rulemaking, they have individually met with at least seven different 
industry stakeholders, and consulted with State agencies from Minnesota 
and Massachusetts, which already have considerable experience with this 
type of data collection. In addition, on March 24, 2011, CMS held an 
open door forum to discuss the provision and to solicit feedback from 
almost 500 industry participants. CMS is working hard to meet the 
requirements and the deadlines of the physician sunshine provision, 
including providing industry with the information they will need to 
comply with it.
    Question. An estimated 75 percent of all pregnant women use 4 to 6 
prescriptions or over-the-counter drugs at some time during their 
pregnancy. I am concerned that a proposed rule to improve pregnancy 
labeling has been pending at the Food and Drug Administration (FDA) for 
nearly 3 years after comments were received in August, 2008. I have 
corresponded with HHS and Commissioner Hamburg about this rule and have 
not received an adequate response regarding a timeline for its 
finalization. I ask again, what is the status of this rule? Given the 
importance of this issue to safeguarding the health of pregnant women, 
I think getting this proposed rule finalized should be a priority. Is 
it a priority for HHS and the FDA?
    Answer. Publication of the rule regarding drug labeling for 
pregnant and lactating women remains a priority within FDA. Earlier 
this year, my staff met with your staff to discuss the status of this 
rule, and as they made clear, FDA staff is actively working on the 
rule. After a rule is prepared, it undergoes a clearance process prior 
to publication. Because the timeframes for preparing the regulation and 
completing each step of the clearance process could be affected by 
various, unpredictable, factors, FDA cannot say for certain when the 
final rule will publish. Please be assured that FDA is committed to 
finalizing this rule as promptly as possible.

                     NCATS AND THE EFFECT ON CTSAS

    Question. I am concerned about the reorganization within the 
National Institutes of Health (NIH) that will affect the Clinical and 
Translational Science Awards (CTSA) program, in which Wisconsin has a 
substantial stake. The NIH invested $42 million into the University of 
Wisconsin (UW) in a 5-year CTSA commitment. UW has successfully 
leveraged an additional $40 million in local resources. Together, over 
the past 4 years these dollars have enabled UW to: (1) train young 
scientists in clinical and translational research; (2) pursue clinical 
and translational research endeavors through a streamlined and more 
efficient research infrastructure; (3) create interdisciplinary 
research teams that can pursue diversified research more easily; (4) 
sustain a multi-disciplinary partnership across the State with other 
major Wisconsin institutions, including the Marshfield Clinic; and (5) 
partner with more than 100 community organizations to form research 
partnerships and perform collaborative research aimed at improving 
health in the community and eliminating health inequities.
    The CTSA also promoted intrastate collaboration with UW, whose 
efforts have been complemented by independent and collaborative 
activities at the Medical College of Wisconsin, where a similar CTSA 
grant was awarded. These entities have all made major investments of 
resources and capital to deliver on their commitments to CTSA--in 
infrastructure, faculty, and research initiatives, to name a few.
    Given the impact of CTSA in Wisconsin, I request clarity regarding 
the future of this program. The President's budget proposed that the 
CTSA program become part of the new National Center for Advancing 
Translational Sciences (NCATS) at NIH. However, the future of CTSA and 
its scope remains in question. With this in mind, I ask that you 
provide me with information about plans regarding CTSAs with respect to 
the following: (1) potential and/or planned changes in the CTSA mission 
or the scope of the CTSA program in 2011 and beyond, particularly the 
goal aimed at engaging communities in clinical research efforts; (2) 
potential and/or planned changes in the CTSA budget and in the number 
of institutions that may or are likely to receive CTSA funding in 2011 
and beyond; (3) potential and/or planned changes in eligibility 
criteria for participants in the CTSA program; and (4) potential and/or 
planned changes in the process or rules for applicants to receive CTSA 
funding.
    Answer. The Clinical and Translational Science Awards (CTSA) are 
slated to be moved into the proposed National Center for Advancing 
Translational Sciences (NCATS) in fiscal year 2012. We believe that 
this will be a natural fit; it will serve the CTSAs well to be in an 
institute that has a complementary mission to their own, which is to 
advance translational sciences.
    The CTSAs conduct and support a wide range of translational 
research, including therapeutics discovery and development, community 
engagement, education and training, and regulatory sciences. Their 
contributions in these areas are critical to the mission of NCATS and 
the NIH as a whole. However, Director Collins understands the 
importance of a smooth transition of this program to a new center. His 
goal is to ensure that the CTSAs can continue their important work as 
we move to stand up NCATS by October 1. To meet that goal, in April 
2011, he convened a trans-NIH working group (the NIH CTSA/NCATS 
Integration Working Group) to: (a) enumerate the roles and capabilities 
of the CTSAs that can support and enhance the mission of NCATS; (b) 
identify CTSA needs and priorities that should be understood and 
addressed by NIH and NCATS leadership; and (c) propose processes for 
ensuring a smooth transition from NCRR to NCATS.
    This group, which is chaired by Dr. Stephen Katz, Director of the 
National Institute of Arthritis and Musculoskeletal and Skin Disorders 
(NIAMS) will consult with a group of CTSA principal investigators, the 
CTSA Consortium Executive Committee (CCEC), who have been involved in 
many discussions with the NIH working group as they carry out their 
charge. The working groups' recommendations will help Dr. Collins and 
his senior staff make informed decisions about the CTSAs that will 
ensure a smooth transition into NCATS. No decisions regarding the 
administration of the currently awarded CTSAs will be made until they 
have completed their work.
    CTSA investigators who are not part of the CECC can engage with the 
NIH in a number of different ways: utilize the CECC as a conduit of 
information both from and to NIH; attend CTSA leadership meetings that 
will be held this summer; and provide input directly to NIH through 
CTSA staff or the website Feedback NIH.
    Question. In 2009, I worked to ensure that long-term care 
facilities were eligible for health information technology (HIT) 
funding included in the American Recovery and Reinvestment Act by 
expanding the general definition of ``healthcare provider'' to also 
include nursing and other long-term care facilities. What is the status 
of providing HIT funds to long-term care providers? What has been done 
to help long-term care providers access these funds?
    Answer. The Office of the National Coordinator for Health 
Information Technology (ONC) administers grant programs that support 
health information exchange within the long-term care community. ONC 
provided $265 million to Beacon communities across the Nation. For 
example, Bangor, Maine's Beacon community is bringing long-term care 
facilities together with hospitals and other physicians to coordinate 
care by using health IT.
    Additionally, through the State HIE Challenge Grant, ONC awarded 
$6.8 million to four grantees for work in improving long-term and post-
acute care transitions through health information exchange. Grant 
funding supports the following activities:
  --Identification of the data elements for health information exchange 
        that are relevant to acute to long-term care transitions.
  --Determination of strategies to meet improved acute to long term 
        care transition goals.
  --Development of consumer friendly language for personal health 
        records (PHRs), conversion of transfer forms to electronic 
        format, and dissemination of best processes for ensuring safe 
        care transitions--all of which will be integrated into health 
        information exchange for acute to long-term care transitions.
  --Implementation of pilot programs at local and/or regional levels to 
        test health information exchange for acute to long-term care 
        transitions, which can then be expanded to the State and 
        national levels.
    ONC is also engaging with the long-term care provider community in 
its efforts to establish a clinical electronic infrastructure and 
engaging long-term care providers in developing the Electronic Health 
Record (EHR) Incentive program's ``Meaningful Use'' definition.
    Question. This year offers a prime opportunity to reshape and 
modernize aging services through the reauthorization of the Older 
Americans Act (OAA). As Chairman of the Senate Special Committee on 
Aging, I am looking forward to working with Assistant Secretary 
Greenlee to reauthorize the OAA. Has the administration set any 
priorities for OAA reauthorization? Please provide a timeline for when 
we might expect to receive an OAA proposal from the administration.
    Answer. Over the past year, the Administration on Aging conducted 
the most open system for providing input on recommendations for 
reauthorizing the Older Americans Act in its history, convening and 
receiving reports from more than 60 reauthorization listening sessions 
held throughout the country, and receiving online input from interested 
individuals and organizations, as well as from seniors and their 
caregivers. This input represented the interests of thousands of 
consumers of the OAA's services, and we continue to receive input and 
work with advocates on a variety of issues.
    Based in part upon this extensive public input process, we think 
that reauthorization can strengthen the Older Americans Act and put it 
on a solid footing to meet the challenges of a growing population of 
seniors. We look forward to working with you and the Special Committee 
on Aging on bipartisan reauthorization legislation.
    The following are some examples of areas that we would like to 
discuss with the Committee as you consider legislation:
  --Ensuring that the best evidence-based interventions for helping 
        older individuals manage chronic diseases are utilized. A 
        number of evidence-based programs have proven effective in 
        helping participants adopt healthy behaviors, improve their 
        health status, and reduce their use of hospital services and 
        emergency room visits.
  --Improving the Senior Community Service Employment Program (SCSEP) 
        by integrating it with other seniors programs. The President's 
        budget proposes to move this program from the Department of 
        Labor to the Administration on Aging within HHS. The goal of 
        this move is to better integrate this program with other senior 
        services provided by AoA. We would like to discuss with you 
        adopting new models of community service for this program, 
        including programs that engage seniors in providing community 
        service by assisting other seniors so they can remain 
        independent in their homes.
  --Combating fraud and abuse in Medicare and Medicaid by embedding the 
        Senior Medicare Patrol Program (SMP) in the OAA as an ongoing 
        consumer-based fraud prevention and detection program. The SMP 
        program serves a unique role in the Department's fight to 
        identify and prevent healthcare fraud by using the skills of 
        senior volunteers to conduct community outreach and education 
        so that seniors and families are better able to recognize and 
        report suspected cases of Medicare and Medicaid fraud and 
        abuse. In fiscal year 2009, the program educated over 215,000 
        beneficiaries in over 40,000 group education sessions and one-
        on-one counseling sessions, resolving or referring for further 
        investigation over 4,000 complaints of potential fraud, error, 
        or abuse.
    Question. The Elder Justice Act established the Elder Justice 
Coordinating Council to meet and make recommendations relating to elder 
abuse, neglect and exploitation. By law, this council is tasked with 
meeting twice annually and reporting to Congress by March, 2012. What 
is the status of and timetable for implementing the Elder Justice 
Coordinating Council?
    Answer. As of March 30, 2011, we have accepted nominations to the 
Elder Justice Advisory Board, which makes recommendations to the Elder 
Justice Coordinating Council. The timetable for further action is under 
development.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray

                             TRAUMA FUNDING

    Question. The Administration's fiscal year 2012 budget proposal 
includes $765 million ``to enhance the advanced development of next 
generation medical countermeasures against chemical, biological, 
radiological and nuclear threats.'' The budget proposal also provides 
$655 million ``to ensure the availability of medical countermeasures 
from the Strategic National Stockpile during a public health 
emergency.''
    Given this significant investment in biodefense, I am concerned 
that the Administration's budget does not similarly support our 
Nation's fragile trauma centers and systems, which will most certainly 
be called upon in the event of another terrorist attack or public 
health emergency. It is very concerning to note that 23 trauma centers 
have closed over the past decade and 45 million people lack access to a 
trauma center within 1 hour following injury during which definitive 
treatment can make the difference between life and death. In addition, 
$80 billion annually is attributed to trauma medical expenses and $326 
billion is estimated for lifetime productivity losses for almost 50 
million injuries that required medical treatment.
    While the Administration's fiscal year 2011 budget includes 
funding, albeit decreased, for Public Health and Emergency Preparedness 
grants and Hospital Preparedness grants, these funds do not fully 
address the urgent needs of our trauma centers and systems.
    Given these facts, what is the Administration doing to make the 
necessary investments in our Nation's trauma centers and systems?
    Is the Administration working to fund the National Trauma Center 
Stabilization Act and the Trauma Care Systems Planning and Development 
Act (Public Health Service Act sections 1201-4, 1211-32, 1241-46 and 
1281-2) so that all Americans have access to trauma care during every 
day traumatic events or in the event of another terrorist attack?
    Answer. While there is no funding for the National Trauma Center 
Stabilization Act and the Trauma Care Systems Planning and Development 
Act in the HHS 2012 budget, the Secretary of Health and Human Services 
delegated to the Assistant Secretary for Preparedness and Response the 
authorities vested in the Secretary under sections 1201-1232 of title 
12 of the Public Health Service Act, parts A through C of title 12, (42 
USC Sec. 300d through 300d-32), as amended, to administer grants and 
related authorities for trauma care. This also included the transfer of 
authority from the Health Resources and Services Administration to ASPR 
the authorities transferred in the affordable care act. These sections 
include four grant programs relating to trauma and emergency medical 
care. In addition, section 1201 also provides, among other things, the 
authority to sponsor workshops and conferences related to trauma and 
emergency care and to conduct and support research related to trauma 
and emergency care. This was an important first step in implementing 
provision of the Affordable Care Act relating to trauma programs. While 
these activities have not received funding, ASPR has undertaken a 
cooperative venture with CDC's National Center for Injury Prevention 
and Control to assist high-profile cities in improving their plans to 
respond to mass casualty events caused by major traumatic events such 
as terrorist bombing. Additionally, since the establishment of the 
Hospital Preparedness Program, over $3.3 billion has been provided to 
hospitals to improve overall surge capacity and strengthen the 
capability of hospitals and healthcare systems to plan, respond to, and 
recover from all hazard events.

                            TITLE X FUNDING

    Question. Title X is the Nation's cornerstone family planning 
program for low-income women. Each year approximately 5 million low-
income individuals receive basic healthcare, including cancer 
screenings, birth control, and HIV testing, at clinics receiving funds 
under this program.
    As we consider recommendations for the coming year, we're mindful 
that the House-passed fiscal year 2011 continuing resolution eliminates 
all $317 million in funding for the Title X program.
    Given that 6 in 10 women who receive care at a Title X health 
center consider it their primary source of medical care, what would be 
the effects of zeroing out the program?
    Answer. The Title X Family Planning program is the only Federal 
grant program dedicated solely to providing individuals with 
comprehensive family planning and related preventive health services. 
The program establishes the framework for the delivery of publicly 
funded family planning services in the United States, providing funding 
to more than 4,500 sites across the United States, including State and 
local health departments, freestanding clinics, hospitals, family 
planning councils, and Planned Parenthood agencies. At least 90 percent 
of Title X program funds are used to provide clinical services. Title X 
services include preventive health services such as cervical cancer 
screening, contraceptive counseling and supplies, pelvic exams, breast 
and cervical cancer screening, basic infertility counseling, clinical 
breast exams, HIV and STI tests, and other services related to 
reproductive health and family planning. Title X-funded agencies served 
an estimated 5 million individuals each year. At least 90 percent of 
the Title X clients served each year have family incomes at or below 
200 percent of the Federal poverty level. For many, a family planning 
clinic is their entry point into the healthcare system and is 
considered to be their usual source of care. This is especially true 
for women with incomes at or below 100 percent of the Federal poverty 
level, who are uninsured, Hispanic, or black. One-quarter of all poor 
women who obtain contraceptive services do so at a site that receives 
Title X funding, as do 17 percent of poor women obtaining a Pap test or 
pelvic exam and 20 percent obtaining services for a sexually 
transmitted infection.
    In fiscal year 2009, it is estimated that nearly 1 million 
unplanned pregnancies were averted by services provided at Title X 
agencies, including more than 233,000 among teens. In 2009, 2,035,017 
female clients received screenings for cervical cancer. It is estimated 
that these screenings contributed to preventing approximately 670 cases 
of invasive cervical cancer. In 2009, more than 2.5 million clients 
were tested for Chlamydia and Gonorrhea, and nearly 800,000 were tested 
for syphilis. In 2009, nearly 1 million HIV tests were conducted. 
Services provided at Title X-supported clinics were estimated to 
account for $3.4 billion in savings in 2008 alone. Title X is also 
cost-effective--Title X-funded centers saved taxpayers an estimated 
$3.4 billion in 2008--or $3.74 for every $1 spent on contraceptive 
care. Unintended pregnancy has been linked with numerous negative 
maternal and child health outcomes. More broadly, contraception can 
enable women and couples to plan and space births, allowing them to 
invest in higher education and to participate more broadly in the 
Nation's workforce. Title X also provides a critical source of funding 
for our Nation's public healthcare infrastructure, which would look 
quite different in the absence of Title X funds. In short, in the 
absence of Title X, rates of unintended pregnancy, infertility and 
related morbidity, and abortion would be considerably higher. In 
addition, the public health infrastructure would be negatively 
impacted, at a considerable cost to the overall healthcare system.

                 FEDERAL FUNDING FOR PLANNED PARENTHOOD

    Question. As you know, the House-passed fiscal year 2011 continuing 
resolution prohibits Planned Parenthood from receiving any Federal 
funds. Planned Parenthood operates approximately 575 health centers 
across the country that receive Title X funds to provide non-abortion-
reproductive healthcare like pap smears, birth control, and cancer 
screenings.
    Could you tell me what the impact of disqualifying Planned 
Parenthood from all Federal funds would be on women and families across 
the country, were this policy adopted for into next year's budget?
    Answer. More than 800 Planned Parenthood clinics receive some 
portion of their funding through a variety of federally funded public 
health programs, including Title X and Medicaid. Medicaid is by far the 
largest source of funding. For some beneficiaries of these public 
health programs, Planned Parenthood serves as a critical source of 
services and supplies to prevent unplanned pregnancy, screen for 
cervical and breast cancer, vaccinate to prevent cervical cancer, and 
obtain pelvic exams and patient education and counseling. Barring 
Federal funding to Planned Parenthood agencies could create barriers to 
these services, many of which are critical to women's health. Planned 
Parenthood estimates that it serves 1.8 million clients with Federal 
funds, and provides nearly 4 million STI tests and more than 900,000 
cervical cancer screening tests. Without access to these basic 
services, rates of STIs, unplanned pregnancy, and abortion could 
increase.
    Question. Can you describe the overarching impact the continued 
health center expansion, as outlined in the President's fiscal year 
2012 budget request, will have on the healthcare system, in terms of 
the cost-effectiveness and quality of services that health centers 
provide? And what about other benefits--like jobs generated and 
economic impact?
    Answer. Through the President's fiscal year 2012 budget request for 
health centers, more high quality, cost-effective, preventive and 
primary healthcare services will be made available. Through the fiscal 
year 2012 budget request, health centers are projected to employ 
thousands of additional staff.
    Question. As you know, the Balanced Budget Act of 1997 established 
that teaching hospitals may count, for the purposes of indirect (IME) 
post-graduate physician education payments, resident time spent in non-
hospital settings, so long as certain conditions are met. One of these 
conditions set out in the legislation is that the ``hospital must incur 
all or substantially all of the costs for the training program in the 
nonhospital setting . . .''.
    However, CMS, in its final rules for the Inpatient Prospective 
Payment System (IPPS) in 2004, interpreted the law to mean that the 
resident time is allowed only when one hospital sponsors the resident's 
participation in the non-hospital experience. This interpretation puts 
many shared residency rotation programs, including family medicine 
residency programs, in my State at risk, at a time when we should be 
encouraging more residency programs, not less.
    Congress made clear that this was not the intention of the original 
legislation in Section 5504 of the Patient Protection and Affordable 
Care Act. This section modifies rules governing when hospitals can 
receive indirect medical education (IME) and direct graduate medical 
education (DGME) funding for residents who train in a non-provider 
setting so that any time spent by the resident in a non-provider 
setting shall be counted toward direct and indirect medical education 
if the hospital incurs the costs of the stipends and fringe benefits.
    Are there discussions ongoing at HHS to alter the current 
interpretation of resident shared rotation and IME payments, 
particularly in light of provisions in the Affordable Care Act?
    Answer. As you note in your question, section 5504 of the 
Affordable Care Act addresses the situation in which more than one 
hospital incurs the costs of training programs at non-provider 
settings. The provision allows hospitals to count, on a prospective 
basis only, a proportional share of the time that a resident spends 
training in such settings when more than one hospital incurs the costs. 
The Centers for Medicare & Medicaid Services (CMS) finalized its 
proposal to implement section 5504 in the CY 2011 Hospital Outpatient 
Prospective Payment System final rule, which was published in the 
Federal Register on November 24, 2010. The final rule allows hospitals 
to share the costs of resident training at non-provider sites, so long 
as those hospitals divide the resident time proportionally in 
accordance with a written agreement. In doing so, the final rule 
requires that hospitals have a reasonable basis for establishing the 
proportion and that the hospitals document the amount they are paying 
for the salaries and fringe benefits of the residents for the amount of 
time the residents are training at that site.
funding for the national institute for occupational safety and health's 

                     EDUCATION AND RESEARCH CENTERS

    Question. The Administration's fiscal year 2012 budget request 
zeroed out all funding for the National Institute for Occupational 
Safety and Health's (NIOSH) Education and Research Centers.
    What was the original programmatic intent for the National 
Institute for Occupational Safety and Health (NIOSH)-funded Education 
and Research Centers (ERCs)? As part of your reply to this question, 
please provide a copy of the original program announcement for the 
record.
    Has HHS assessed whether this NIOSH program has fulfilled its 
statutory mandate under Section 21 of the Occupational Safety and 
Health Act of 1970 to provide an adequate supply of safety and health 
professionals?
    Has HHS assessed the impact on ERCs from zeroing funding for the 
program in fiscal year 2012?
    Answer. The original programmatic intent of the ERC program, which 
was established in 1977 in response to Section 21(a) of the 
Occupational Safety and Health Act, was to create ``education programs 
to provide an adequate supply of qualified personnel to carry out the 
purposes of the Act''. The program was envisioned as a commitment to 
training future professionals to work in industry, public health, and 
academia. NIOSH has established partnerships with 48 academic 
institutions that comprise the academic network responsible for the 
Nation's occupational safety and health professional training 
infrastructure. Through university-based ERCs, NIOSH supports academic 
degree programs and research training opportunities in the core areas 
of industrial hygiene, occupational health nursing, occupational 
medicine, and occupational safety, plus specialized areas relevant to 
the occupational safety and health field. NIOSH also supports ERC 
short-term continuing education programs for occupational safety and 
health professionals and others with worker safety and health 
responsibilities. Please see attached program announcement from 1976.

                    [ERC Program Announcement, 1976]

              DEPARTMENT OF HEALTH, EDUCATION AND WELFARE
                         Public Health Service

                       CENTER FOR DISEASE CONTROL
 GRANTS FOR OCCUPATIONAL SAFETY AND HEALTH EDUCATIONAL RESOURCE CENTERS
                           PROGRAM GUIDELINES

    The National Institute for Occupational Safety and Health is 
implementing a new national competition for training project grants to 
support a limited number of Occupational Safety and Health Educational 
Resource Centers. It is proposed to establish by 1980, subject to the 
availability of funds, at least 10 Center's--at least one in each 
Department of Health, Education, and Welfare Region.
Authority
    Grants for Educational Resource Centers will be awarded under the 
Institute's basic training grant authority, the Occupational Safety and 
Health Act of 1970 (29 U.S.C. 670a). Except as otherwise indicated in 
these guidelines, the basic policies of the Public Health Service 
Grants Policy Statement (HEW Publication No. (OS) 77-50.000 (Rev.) 
October 1, 1976) are applicable to this program as are the HEW 
regulations on Grants for Educational Programs in Occupational Safety 
and Health (42 CFR Part 86).

Background and Objectives
    In 1971, the Institute established training grant programs to 
assist public or private nonprofit educational institutions in 
establishing, strengthening or expanding graduate, undergraduate or 
special training of persons in the field of occupational safety and 
health in order to provide an adequate supply of qualified personnel to 
carry out the purposes of the Act. (Catalog of Federal Domestic 
Assistance 13.263). Past and current training project grants have 
provided support for primarily, single discipline and single level 
occupational safety and health training programs, e.g., in occupational 
medicine, occupational health nursing, industrial hygiene, safety 
engineering, etc., at either the graduate, undergraduate or technical 
and paraprofessional level. The multidisciplinary scope of occupational 
health and safety has been recognized by many to be diverse and 
complex. It has also been realized that special problems arise at the 
workplace from which new concepts develop that do not fall within any 
single, traditional discipline. Yet, within this framework, increased 
numbers of people must be educated to achieve effective prevention of 
the many occupational health and safety hazards that occur at the 
workplace.
    The objective of this competition is to provide a mechanism for 
combining and expanding existing activities and arranging for 
coordinated multi-discipline and multi-level training and continuing 
education in occupational safety and health under a single grant 
servicing a geographic region. The program is intended to afford 
opportunity for full- and part-time academic career training, for cross 
training of occupational safety and health practitioners, for mid-
career training in the field of Occupational Health and Safety, and 
access to many different and relevant courses for students pursuing 
various degrees. Further, the combination of these should result in 
cross-fertilization among the various disciplines and levels of 
occupational safety and health practice.
    It is anticipated that Centers will form from bases of ongoing 
educational, research and training activities in occupational safety 
and health. It is not intended to generate these activities de novo as 
this would not net the objectives of this program.

Eligibility Requirements
    An eligible applicant is any public or private nonprofit 
educational or training agency or institution located in a State: 
provided that no agency or institution is eligible for assistance for a 
separate training project grant in any project period in which it 
receives an educational resource center grant. However, this will not 
preclude an existing training grant from being incorporated into an 
educational resource center grant award.
    A Center may be comprised within one educational institution or 
agency or within an association of two or more institutions or 
agencies. Educational and administrative justification for any joint 
arrangement must, however, be fully documented in the application. If 
such proposals are made, each institution, proposing to participate in 
a joint arrangement must also participate in the application by 
delineating the educational and training activities that in totality 
constitute the Educational Resource Center and which, through 
interaction and proximity, will improve the probability of the success 
of the total program, as indicated in the guidelines below. Current 
Public Health Service policy covering consortia and collaborative 
arrangements must be complied with. A proposal for a Center which is in 
effect a collation of unrelated training activities will not be 
considered responsive.

Characteristics of an Educational Resource Center
    An Occupational Safety and Health Educational Resource Center 
should be an identifiable organizational unit within the sponsoring 
organization and shall have the following characteristics:
  --Cooperative arrangements between a medical school (with 
        anestablished program in preventive or occupational medicine); 
        school of nursing and school of public health or its 
        equivalent, and school of engineering or its equivalent. Other 
        schools or departments with relevant disciplines and resources 
        may be expected to be represented and contribute as appropriate 
        to the conduct of the total program, e.g., toxicology, 
        biostatistics, environmental health, law, business 
        administration, education, etc.
  --A Director who possesses a demonstrated capacity for sustained 
        productivity and leadership in occupational health and safety 
        training, He shall oversee the general operation of the Center 
        Program and shall, to the extent possible, directly participate 
        in training activities.
  --A full-time professional staff representing various disciplines and 
        qualifications relevant to occupational safety and health to be 
        capable of planning, establishing, and carrying out or 
        administering training projects undertaken by the Center.
  --Training and research expertise, appropriate facilities and ongoing 
        training and research activities in occupational safety and 
        health areas.
  --A program for conducting education and training of occupational 
        physicians, occupational health nurses, industrial hygienists/
        engineers and safety personnel. There shall be full-time 
        students in each of these core disciplines, with a goal of a 
        minimum of 30 full-time students. Training may also be 
        conducted in other occupational safety and health career 
        categories, e.g., industrial toxicology, biostatistics and 
        epidemiology, ergonomics, etc. Training programs shall include 
        appropriate field experience including experience with public 
        health and safety agencies and labor-management health and 
        safety activities.
  --Impact on the curriculum taught by relevant medical specialties, 
        including radiology, orthopedics, dermatology, internal 
        medicine, neurology, perinatal medicine, pathology, etc.
  --A program to assist other institutions or agencies located within 
        their region including schools of medicine, nursing and 
        engineering, among others, by providing curriculum materials 
        and consultation for curriculum/course development in 
        occupational safety and health, and by providing training 
        opportunities for faculty members.
  --A specific plan for preparing, distributing and conducting courses, 
        seminars and workshops to provide short-term and continuing 
        education training courses for physicians, nurses, industrial 
        hygienists, safety engineers and other occupational safety and 
        health professionals, paraprofessionals and technicians, 
        including personnel of labor-management health and safety 
        committees, in the geographical region in which the Center is 
        located. The goal shall be that the training be made available 
        each year to a minimum of 200-250 trainees representing all of 
        the above categories of personnel, on an approximate 
        proportional basis with emphasis given to providing 
        Occupational Safety and Health training to physicians in family 
        practice, as well as industrial practice, and industrial 
        nurses. Where appropriate, it shall be professionally 
        acceptable in that Continuing Education Units (as approved, for 
        example, by the American Medical Association, American Nursing 
        Association, etc.) may be awarded, These courses should be 
        structured so that either educational institutions, public 
        health and safety agencies, professional societies or other 
        appropriate agencies can utilize them to provide training at 
        the local level to occupational health and safety personnel 
        working in the workplace. Further, the Center shall have a 
        specific plan and demonstrated capability for implementing such 
        training directly and through other institutions or agencies in 
        the region, including cooperative efforts with labor unions and 
        industry trade associations where appropriate, thus serving as 
        a regional resource for addressing the problems of occupational 
        safety and health that are faced by State and local 
        governments, labor and management.
  --Specific mechanisms to implement the cooperative arrangements, 
        e.g., between departments, schools/colleges, universities, 
        etc., necessary to insure that the comprehensive, multi- or 
        core-disciplinary training and education that is intended shall 
        be engendered.
  --A Board of Advisors or Consultants, with representation of the user 
        and affected population, including representation of employers 
        and employees, of the Center outreach and continuing education 
        and training programs should be established by the grantee 
        institution to assist the Director of the Center in periodic 
        evaluation of the Center activities.
    An application for a Center grant must address each of the above 
points. The nature and organization of the appropriate administrative 
teaching and support staffs and necessary supplies, equipment, 
facilities, etc., should be clearly detailed in the proposal and 
clearly related to the budget requested. This program cannot provide 
funds for new construction or major alterations or renovations, thus 
facilities must be available for the primary needs of the proposed 
Center activities.

Criteria for Review
    The applications for Occupational Safety and Health Educational 
Resource Centers solicited in this announcement will be evaluated in 
national competition. The review is expected to involve a site visit. 
The reviewing applications criteria utilized include:
  --The overall potential contribution of the project toward meeting 
        the needs for qualified personnel to carry out the purposes of 
        the Occupational Safety and Health Act of 1970, the expressed 
        purpose of which is to ``assure so far as possible every 
        working man and woman in the Nation safe and healthful working 
        conditions and to preserve our human resources--by providing 
        for training programs to increase the number and competence of 
        personnel engaged in the field of occupational safety and 
        health.''
  --The need for training in the areas outlined by the application, 
        including projected enrollment, recruitment, regional needs 
        both in quality and quantity, similar programs, if any, within 
        the geographic area.
  --The extent to which arrangements for day-to-day management, 
        allocation of funds and cooperative arrangements are designed 
        to effectively achieve Characteristics of an Educational 
        Resource Center, above.
  --The extent to which curriculum content and design includes 
        formalized training objectives, minimal course content to 
        achieve certificate or degree, course descriptions, course 
        sequence, related courses open to students, time devoted to 
        lecture, laboratory and field experience, the nature of the 
        latter (primarily applicable to academic training).
  --Previous record of training in this or related areas, including 
        placement of graduates.
  --Methods proposed to evaluate effectiveness of training.
  --The competence, experience and training of the Center Director and 
        of other professional staff in relation to the type and scope 
        of training and education involved.
  --Institutional commitment to Center goals.
  -- Academic and physical environment in which the training will be 
        conducted, including access to appropriate occupational 
        settings.
  -- Appropriateness of the budget required to support each component 
        of the program.

Operational Aspects
    Although the mechanism for support for the Center will be a 
training grant, it will differ from other grants in its emphasis on 
priority of occupational safety and health training in the medical and 
nursing disciplines and in conducting an outreach program in curriculum 
development and continuing education projects designed to increase 
admissions to and enrollment in occupational safety and health training 
of persons who, by virtue of their background and interest or position, 
are likely to engage or participate in the delivery of occupational 
health and safety services.
    While it is expected that each Center will plan, develop, direct 
and execute its own program, it must also be responsive to the 
identified needs of the National Institute for Occupational Safety and 
Health, both in content and direction. The award of a Center grant will 
establish a special collaborative relationship between the National 
Institute for Occupational Safety and Health and the grantee 
institution. NIOSH staff, with consultation and assistance from 
representatives of the kinds of user groups of the Center program 
(e.g., academic labor, management and public health and safety 
agencies) will provide initial and continuing review and evaluation of 
the Center programs.
    From 2005 to 2010, the number of trained occupational safety and 
health (OSH) professionals has steadily increased. There were 1,191 
graduates during the past 5 academic years (from 2005-06 to 2009-10). 
Of these 1,191 ERC graduates 978 (82 percent) entered careers in OSH or 
entered more advanced degree programs in OSH. This is due to the 
increase in awareness of OSH and the comprehensive curriculum which 
provides a variety of continuing education opportunities for OSH 
professionals. Of the 287 ERC graduates in 2009-2010, 234 (82 percent) 
entered careers in OSH or entered more advanced degree programs in OSH.
    Within the context of a budget that requires tough choices, we put 
forth a proposal to discontinue Federal funding for the ERCs. We 
recognize the vital role of occupational safety and health professional 
training. This proposal is one of many difficult reductions we proposed 
as part of the fiscal year 2012 budget.

FUNDING FOR THE NATIONAL INSTITUTE FOR OCCUPATIONAL SAFETY AND HEALTH'S 
               AGRICULTURE, FISHING AND FORESTRY PROGRAM

    Question. The Administration's fiscal year 2012 budget request also 
zeroed out all funding for the National Institute for Occupational 
Safety and Health's (NIOSH) Agriculture, Fishing and Forestry Program.
    How does the rate of occupational injury and illness and fatalities 
in agriculture, fishing and forestry (AgFF) compare with injury rates 
in general industry.
    Did the 2007 National Academy (NA) review of NIOSH's Agriculture, 
Forestry and Fishing research program recommend elimination of the AgFF 
program?
    Did the NA review recommend relocating AgFF research activities to 
the Department of Labor or USDA?
    Answer. The fatality rate in the Agriculture, Forestry, and Fishing 
industry is more than seven times higher than that of general industry. 
Although the data from 2009 are still provisional, based on the Bureau 
of Labor Statistics (BLS), Census of Fatal Occupational Injuries, 
workers in the Agriculture, Forestry, and Fishing industry had an 
average fatality rate of 28.1 per 100,000 full-time equivalent workers 
from 2006-2009 while general industry had an average rate of 3.8 per 
100,000 full-time equivalent workers during the same time period. The 
rate of nonfatal occupational injuries and illnesses in the 
Agriculture, Forestry, and Fishing industry is slightly higher at a 
rate of 5.6 per 100,000 full-time equivalent workers than that of 
general private industry at a rate of 4.1 per 100,000 full-time 
equivalent workers from 2005-2009.
    While the 2007 National Academy (NA) review of NIOSH's 
Agricultural, Forestry and Fishing research program raised some 
questions about the impact of this research on workplace injury and 
illness, it did not recommend elimination of the AgFF program.
    The NA review did not recommend relocating AgFF research activities 
to the Department of Labor or USDA. Instead, NA recommended that the 
AgFF program continue to partner with appropriate Federal and State 
agencies and establish additional interagency partnerships to increase 
the capacity for carrying out research and transfer activities.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu

                      CHILD WELFARE FINANCE REFORM

    Question. Could you explain the Administration's vision for foster 
care reform, and why the need for reform is so urgent?
    Answer. The President's budget proposes $2.5 billion over 10 years 
to align financial incentives with improved outcomes for children in 
foster care and those who are receiving in-home services or post-
permanency services from the child welfare system, in order to prevent 
entry or re-entry into foster care. We envision States that receive 
performance-based funding to be able to support activities that can 
improve outcomes for children who have been abused or neglected or at 
risk of maltreatment. We believe our proposal will keep the focus on 
moving child welfare in the right direction, particularly during these 
difficult budget times in States. The proposal incentivizes all States 
to improve outcomes by allowing them to earn additional funds that can 
be invested in activities that can drive further progress for the 
children and families served.
    We look forward to working with Congress on developing specific 
details, guided by the principles outlined in our fiscal year 2012 
budget:
  --Creating financial incentives to improve child outcomes in key 
        areas, by reducing the length of stay in foster care, 
        increasing permanency through reunification, adoption, and 
        guardianship, decreasing rates of maltreatment recurrence and 
        any maltreatment while in foster care, and reducing rates of 
        re-entry into foster care;
  --Improving the well-being of children and youth in the foster care 
        system, transitioning to permanent homes, or transitioning to 
        adulthood;
  --Reducing costly and unnecessary administrative requirements, while 
        retaining the focus on children in need;
  --Using the best research currently available on child welfare 
        policies and interventions to help the States achieve further 
        declines in the numbers of children who need to enter or remain 
        in foster care, to better reach families with more complex 
        needs, and to improve outcomes for children who are abused, 
        neglected, or at risk of abuse or neglect; and
  --Expanding our knowledge base by allowing States to test innovative 
        strategies that improve outcomes for children and reward States 
        for efficient use of Federal and State resources.

                CHAFEE FOSTER CARE INDEPENDENCE PROGRAM

    Question. Can you explain why, in light of the rising number of 
foster youth who ``age out'' of care, the Administration has not 
proposed to increase funding for Chafee?
    Answer. In an environment of limited resources, we have chosen to 
provide additional funds to align financial incentives with improved 
outcomes for children in foster care and those who are receiving in-
home services or post-permanency services from child welfare system, in 
order to prevent entry or re-entry into foster care. States may use 
these funds to provide services to youth who are in foster care before 
they age out as well as provide post-permanency services to those who 
age-out of the foster care system. We believe our proposal will keep 
the focus on moving child welfare in the right direction, particularly 
during these difficult budget times in States.
    Question. If Congress does not meet the President's budget request 
of $3.3 billion for the Health Centers Program, what will be the impact 
on rural and urban underserved populations? Can you also describe the 
economic impacts of not adequately funding the Health Centers Program?
    Answer. It will reduce to some extent the expansion of the Health 
Center Program (and its associated economic impact) into new 
underserved rural and urban communities.
    Question. Recognizing the vital role School Based Health Centers 
play in serving as a safety net provider for our children and 
adolescents, why wasn't funding for the operations of School Based 
Health Centers included in the fiscal year 2012 budget request? For 
fiscal year 2013, do you see putting School Based Health Centers in the 
President's budget as an approach that could be utilized to grant 
greater access to care for our youth?
    Answer. School-Based Health Centers may apply for operational 
support under the Community Health Center program. For example, 
interested school-based health centers could have applied for the 
Affordable Care Act New Access Point opportunity announced last August 
to support new healthcare service delivery sites, if Health Center 
Program eligibility criteria were met. Previous operational funding for 
health center sites serving school-aged populations and/or located in 
schools has been awarded under the Community Health Center Program.
    Question. HHS, as well as other Federal agencies, has found great 
success with telehealth programs in the treatment of high-cost 
patients. As these programs advance, where do you see the best 
opportunities not only to maximize cost savings but to provide patients 
with better care and improve clinical outcomes?
    Answer. The Telehealth Network Grant Program (TNGP), grants have 
offered underserved populations the opportunity to access a diverse 
variety of clinical services to underserved people in rural areas which 
include: allergy, asthma control, cardiology, diabetes care and 
management, pain management, remote patient monitoring, and a variety 
of other services.
    For the relatively more mature Telehealth Networks (TNGP-TH) 
provisions, one clinical health outcome measure, diabetes case 
management, is being collected, as well as several outcome measures 
related to improving access and program efficiency. One of the 
responsibilities of OAT's Regional Telehealth Resource Centers (TRCs) 
is to track evidence-based telehealth practices in their regions, and 
share that information through the technical assistance that they 
provide to HRSA grantees, rural and other underserved communities. The 
TRCs share information about cost savings, improved quality and 
increased access through telehealth applications via their websites, 
webinars, conference calls, presentations at conferences, and one-on-
one consultations.
    Question. What are the other areas within the Department of Health 
and Human Services where Federal support for telehealth technology can 
be initiated or expanded?
    Answer. HRSA's formal telehealth authority is through ORHP's OAT, 
as mentioned in the previous question. HRSA's ORHP is not aware of 
other areas within the Department of Health and Human Services where 
Federal support for telehealth technology can be initiated or expanded.
    Question. What areas within HHS, including the Centers for Medicare 
and Medicaid Services and the Center for Medicaid and Medicare 
Innovation could be used to increase Federal support for telehealth?
    Answer. CMS continually looks for ways to expand the use of 
telemedicine in our programs to provide high quality healthcare 
services in the most efficient manner possible. To that end, CMS 
annually considers requests from the public to add to the list of 
telehealth services covered by Medicare Part B, and adds new telehealth 
services as appropriate as part of the Medicare Physician Fee Schedule 
rulemaking process. CMS also recently finalized new rules for 
telemedicine services to ensure that patients in rural or remote areas 
will continue to receive access to high quality, cutting-edge medical 
care through the use of telemedicine from many of their local 
hospitals. The new finalized rules streamline the process that 
hospitals and critical access hospitals (CAH) use for credentialing and 
granting privileges to physicians and practitioners who deliver care 
through telemedicine. The new rule will also permit hospitals to more 
easily partner with non-hospital telemedicine entities, such as 
teleradiology facilities, to deliver specialty care via telemedicine.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin

 THE EFFECT OF REDUCING NIH FUNDING TO 5 PERCENT BELOW FISCAL YEAR 2010

    Question. In February the House passed an appropriations bill for 
fiscal year 2011 that proposed cutting the National Institutes of 
Health's (NIH's) budget by $1.6 billion or 5 percent compared to NIH's 
fiscal year 2010 budget.
    Please provide the NIH's perspective on how such a cut would impact 
the NIH and our Nation's economic recovery?
    Answer. A $1.6 billion decline from NIH's fiscal year 2010 budget 
levels could have adverse consequences for the research community and 
could delay current research efforts. It could result in lost 
opportunities to develop more cost effective diagnostics and treatments 
in areas such as developmental disorders, addiction, mental illness, 
infectious disease, cancer, heart disease, and neuro-degeneration.
    Specifically, in the area of translational research, more than 100 
clinical trials and studies for more precise tests and more effective 
treatments of common and rare diseases affecting millions of Americans 
could be halted or curtailed. Medical practices that could have been 
shown obsolete or needlessly expensive would not be fully evaluated.
    In the area of basic research, in just the last 2 years, advances 
in whole genome sequencing, methods to grow stem cells not derived from 
human embryos, automated equipment that can perform thousands of 
experiments at the same time, and previously untried drug design 
techniques have all become available for the first time, providing 
unprecedented opportunities for research advances at relatively low 
cost, many of which could be delayed by these budget cuts. Reductions 
in funding the pipeline of basic research could slow the discovery of 
fundamental knowledge about how we grow, age and become ill. Valuable 
research supporting the prevention of a host of costly, debilitating 
chronic conditions could suffer setbacks. Some projects could be 
difficult to pursue at reduced levels and could be cancelled; others 
could require scope modifications that would dramatically alter the 
potential research outcomes.
    Budget cuts could effect universities and the private-sector. 
Grantee personnel budgets may be reduced. Training grants could be 
materially impacted and the population of qualified research trainees 
and advanced science instructors could diminish. Some universities, 
especially those with research programs in earlier stages of 
development, may need to prioritize between training new physicians and 
scientists and closing laboratories. In the private sector, high-tech 
and low-tech small-business suppliers could face order cancellations. 
New equipment prototypes and laboratory methods important to private-
sector pharmaceutical and device research could delay development, 
leaving fewer product options available for U.S. companies to offer as 
exports in response to the expected rapid rise in health spending in 
China and the developing world. Supplies of highly-trained technology 
workers in America could further diminish.
    Question. Approximately how many NIH-funded jobs could be lost as a 
result of a 5 percent cut to the agency's budget?
    Answer. NIH estimates that 10,500 full-time-equivalent (FTE) 
positions could potentially be lost as a result of a $1.6 billion cut 
to the agency's budget. This estimate is based on the average number of 
FTE per million dollars of funding reported by recipients of research 
funds under the Recovery Act.
    Question. Congenital Heart Disease (CHD) is one of the most 
prevalent birth defects in the United States and a leading cause of 
birth defect-associated infant mortality. Due to medical advancements 
more individuals with congenital heart defects are living into 
adulthood, unfortunately our Nation has lacked a population-
surveillance system for adults with CHD. The healthcare reform law 
included a provision, which I authored, that authorizes the CDC to 
track the epidemiology of congenital heart disease, with an emphasis on 
adults with CHD and expanding surveillance. If adequately funded, what 
could be the public health impact of this surveillance system and how 
could it advance our understanding of the prevalence or CHD across 
subgroups (including age and race/ethnicity).
    Answer. Development of population-based surveillance for congenital 
heart disease across the lifespan would be a critical first step in 
generating information on prevalence across different age groups, race/
ethnicity and socioeconomic groups in the population, as well as 
possible determinants of health disparities in neurocognitive outcomes, 
disabilities, survival, and quality of life. This population-based 
approach to identifying and following affected persons over time would 
have a significant public health impact by:
  --Estimating the true prevalence of CHD in the United States.--It is 
        estimated that about 1 million adults are living with CHD in 
        the United States, and given the improvements in treatment and 
        decreasing mortality, this number continues to grow. However, 
        this estimate is imprecise without population-based 
        surveillance systems to track adolescents and adults with CHD. 
        Accurately determining national prevalence estimates of CHD 
        requires high-quality population-based surveillance of a 
        representative sample of affected individuals using 
        standardized surveillance methods.
  --Estimating the healthcare costs associated with CHD.--All adults 
        with CHD have significantly higher rates of healthcare 
        utilization than their peers. Furthermore, if adults with CHD 
        develop other chronic conditions, such as diabetes, the 
        interactive effect of the congenital anomaly with the other 
        diseases remains unknown. Currently, estimates of direct costs 
        for adults are often specific to inpatient admissions, and do 
        not include hospitalizations in which CHD was not the primary 
        reason for admission nor costs associated with outpatient 
        visits, prescription medications, or other indirect costs for 
        the affected individuals, their families, and society. 
        Therefore, information from a population-based surveillance 
        system would improve planning for the future utilization of 
        healthcare resources and enhance our understanding of the 
        economic costs of CHD among adults.
  --Identifying factors associated with adverse outcomes across the 
        lifespan.--Persons with CHD are at risk for adverse health 
        outcomes such as neurodevelopmental and cognitive outcomes and 
        premature death, yet little is known about risk factors for 
        these outcomes and how they differ among subpopulations. 
        Identifying and following affected persons over time to track 
        adverse outcomes could help us understand factors such as 
        health disparities that might predispose to or ameliorate 
        adverse outcomes, and characterize the health services needs of 
        this population.
  --Providing reliable, evidence-based information to guide diagnosis, 
        management, and secondary prevention efforts.--Currently, many 
        adults with CHD in the United States receive inadequate care 
        because of the lack of information to guide the clinical 
        management of a child with a congenital heart defect as he or 
        she ages into adulthood. Adults and their healthcare providers 
        have become increasingly aware of the need for reliable, 
        evidence-based information to guide diagnosis, management, and 
        secondary prevention efforts.
      Collecting and analyzing data on outcomes over time could improve 
        understanding of the long-term course of CHD, the factors that 
        might influence such course, and the health services needs 
        across the lifespan. These data could also help inform efforts 
        to develop effective primary and secondary prevention 
        strategies directed at reducing the public health impact of 
        CHD. The data could also be used to develop and evaluate the 
        effectiveness of interventions such as guidelines for routine 
        preventable care for children, adolescents, and adults with CHD 
        designed to reduce poor outcomes and high cost of treating 
        individuals who otherwise do not seek or receive adequate care 
        until in a medical crisis.
    Question. Currently, when a person enrolls in Medicare, their 
Social Security Number (SSN) is used the basis of their Medicare 
identification number. The Social Security Inspector General has 
indicated that this creates a risk of identity theft and fraud and has 
suggested that the SSN be removed from the Medicare card. How do you 
think this risk to Medicare beneficiaries and the Federal program could 
be reduced?
    Answer. CMS is currently investigating the viability and costs of a 
range of options for removing the SSN from Medicare beneficiary cards. 
There are considerable costs associated with changing the Medicare 
beneficiary identifier, not only for CMS but also for our public and 
private sector partners. The SSN identifier in the health insurance 
claim number (HICN) is the basis of eligibility for Medicare, and is 
integrated in more than 50 CMS systems, as well as communications with 
our partners in the Social Security Administration, State Medicaid 
departments, private Medicare health and drug plans, and over 2 million 
healthcare providers and suppliers. The risks of disruptions in 
beneficiaries' access to care are considerable.
    I want to emphasize, however, that CMS shares your concerns about 
the importance of safeguarding and protecting Medicare beneficiaries 
from identity theft. We have taken many important steps to minimize the 
display of SSNs or HICNs on Medicare cards. We removed the SSN from 
various notices and publications sent to beneficiaries, and from 
beneficiary reimbursement checks. We prohibited Part C and D Plans from 
using the SSN or HICN as a beneficiary identifier. We have also taken 
action to educate beneficiaries about steps they should take to prevent 
identity theft and fraud, including posting information on the CMS 
website, and adding information to the ``Medicare & You'' Handbook.
    Question. On December 20, 2010 you sent a response letter entitled 
``Concern on Hepatitis'' to Members of Congress, which directed 
Assistant Secretary Dr. Howard Koh to convene an interagency working 
group tasked with developing an HHS Action Plan on Viral Hepatitis. Can 
a specific date be provided for when the Action Plan will be released? 
Once the Action Plan is released how will HHS prioritize resources and 
give direction to the various Departmental operating divisions to 
ensure steps are taken to curtail the escalating costs associated with 
viral hepatitis and the costly outcomes such as liver cancer and end-
stage liver disease?
    Answer. We anticipate that the HHS Action Plan for the Prevention 
and Treatment of Viral Hepatitis will be released on May 12, 2011. The 
Action Plan will help HHS improve its current efforts to prevent viral 
hepatitis by leveraging opportunities to improve coordination of viral 
hepatitis activities across HHS operating divisions and by providing a 
framework for HHS to engage other governmental agencies and 
nongovernmental organizations in viral hepatitis prevention and care. 
For example, the Action Plan calls for the alignment of HHS guidelines 
for the diagnosis of Hepatitis B and Hepatitis C infection. Such 
alignment will improve provider understanding, thus supporting 
screening efforts and promoting earlier diagnosis of viral hepatitis. 
Identifying and disseminating best practices regarding prompt linkage 
of persons testing positive for viral hepatitis into needed care and 
treatment and developing effective medical management models for use in 
priority populations, like injection drug users, will improve care 
outcomes and reduce the negative health outcomes of chronic hepatitis. 
Finally, on the basis of available funding, the NIH will expand 
existing clinical trial networks to expand studies of viral hepatitis 
treatment. Improving treatment for hepatitis C and other causes of 
viral hepatitis will eventually decrease the number of persons with 
chronic hepatitis, thus decreasing the costly sequelae of end stage 
liver disease.
                                 ______
                                 
                Questions Submitted by Senator Jack Reed

      CDC STATE CANCER REGISTRIES (PEDIATRIC CANCER SURVEILLANCE)

    Question. The fiscal year 2012 budget for the Centers for Disease 
Control and Prevention (CDC) proposes to consolidate a variety of 
programs that address chronic disease into a Coordinated Chronic 
Disease Prevention and Health Promotion Grant Program. This program 
will mix core funding with competitive grants to States and other 
entities. CDC's cancer-related efforts are included in this new 
program.
    As the author of the Conquer Childhood Cancer Act, which authorized 
investment in childhood cancer surveillance efforts--among other 
provisions--I am particularly concerned that the consolidation will 
take attention away from sub-populations. For example, more timely and 
accurate data collection of pediatric cancer cases and treatments can 
help researchers determine appropriate treatments and interventions. I 
helped secure $3 million for this effort last year and it was welcome 
news to the entire pediatric cancer community.
    It appears that with the new approach, States will allocate funds 
to improving outcomes among large populations where very small changes 
can make a big difference. While this will help them secure additional, 
competitive grant funding, there are smaller populations that will 
likely receive less attention.
    How will you ensure that States continue to apply the funds they 
receive to continue to build their pediatric cancer surveillance 
efforts?
    Answer. The President's fiscal year 2012 budget proposes to 
consolidate eight separate disease-specific budget lines--Heart Disease 
and Stroke, Diabetes, Cancer, Arthritis and other Conditions, 
Nutrition, Health Promotion, Prevention Centers, and non-HIV/AIDS 
adolescent and school health activities including Coordinated School 
Health--into a single comprehensive grant program, the Coordinated 
Chronic Disease Prevention and Health Promotion Grant Program. This 
consolidation is intended to provide integrated services to State and 
local health departments by maximizing the reach and impact of every 
dollar invested by CDC to prevent chronic diseases and promote health 
in a variety of environments, including schools, and to a variety of 
sub-populations, including children.
    The National Program of Cancer Registries (NPCR) is essential to 
CDC's efforts to prevent and control cancer. Representing 96 percent of 
the population, data from NPCR are vital to understanding the Nation's 
cancer burden and are fundamental to cancer prevention and control 
efforts at the national, State, and local level. Information about 
cancer cases and cancer deaths is necessary for health agencies to 
report on cancer trends, identify populations with the highest cancer 
burden in order to target interventions, assess the impact of cancer 
prevention and control efforts, participate in research, especially on 
small and disparate populations, such as American Indians/Native 
Alaskans, and respond to reports of suspected increases in cancer 
occurrence. NPCR is the main source of data on rare cancers--including 
some pediatric cancers--which can be difficult to study in regional 
registries. CDC remains committed to conducting public health 
surveillance, monitoring, and tracking trends in chronic disease risk 
factors, incidence, and mortality while enhancing access and 
utilization of population-based surveillance data at the State and 
local level.
    Pediatric cancer is an important public health issue, and has far 
reaching social, emotional, and physical impacts on children and their 
families. CDC has implemented a range of key activities related to the 
Caroline Pryce Walker Conquer Childhood Cancer Act. To date, CDC has:
  --Hosted an expert panel to identify gaps in pediatric cancer 
        research and surveillance. This panel helped inform CDC's 
        decision to build cancer registry infrastructure in ways that 
        facilitate pediatric cancer research, enhance registry capacity 
        and reporting speeds, and create new data linkages for research 
        use.
  --Secured contractor support to simplify and streamline the process 
        for seeking multiple State institutional review board (IRB) 
        approval for conducting pediatric cancer research. Work is 
        being done to assess State level barriers to research across 
        multiple States requiring linkage to registries or patient 
        contact, and to identify optimal State policies for research.
  --Developed a Funding Opportunity Announcement (FOA) to supplement 12 
        central cancer registries through NPCR to support pediatric 
        cancer surveillance, including early case capture. Funded 
        cancer registries will identify, recruit, and train all 
        potential sources for reporting pediatric and young adult 
        cancer cases, and develop procedures and mechanism to implement 
        early case capture. This FOA will be released in summer 2011.

   CDC ENVIRONMENTAL HEALTH (HEALTHY HOMES/LEAD POISONING PREVENTION)

    Question. The President's budget proposes to consolidate and reduce 
by 50 percent the funding for CDC's Healthy Homes/Lead Poisoning 
Prevention. I am particularly concerned that the budget proposes 
reducing funding for a program--designed to ensure safe housing--that 
is extremely cost effective particularly for New England.
    In Rhode Island, 70 percent of the State's housing stock was build 
prior to 1978, when the use of lead paint was prevalent and 10 percent 
are still in need of desperate repair. Over the past 10 years, Rhode 
Island has received $40 million for lead poisoning prevention 
initiatives and, as a result, just 2.3 percent of children are found to 
have elevated lead blood levels in 2007, which is down from 8.8 percent 
in 1997.
    Cuts to this program will fall squarely on the backs of low-income 
families and communities of color since they are disproportionately 
impacted by environmental health hazards. It will result in a decrease 
in blood lead screening rates and efforts to eliminate lead hazards 
that still exist today. What are the long-term impacts that reducing 
this funding will have on States, healthcare costs, lost school days 
for students, and loss of productivity for parents?
    Answer. The goal of the new CDC Healthy Environments consolidated 
program is to maintain a multi-faceted approach through surveillance, 
partnerships, implementation and evaluation of science-based 
interventions to address the health impact of environmental exposures 
in the home and to reduce the burden of asthma through comprehensive 
control efforts. As the Healthy Environments program is implemented, 
the number of funded recipients will decrease from 40 to 34 to 
implement Healthy Homes programs and only State health departments will 
be eligible to apply for funding; this will help save significant 
overhead costs as fewer resources will need to be devoted to grantee 
management when there are fewer individual grantees. A healthy homes 
approach works to mitigate health hazards in homes such as lead 
poisoning hazards, secondhand smoke, asthma triggers, radon, mold, safe 
drinking water, and the absence of smoke and carbon monoxide detectors. 
Findings indicate that multi-component, multi-trigger home-based 
environmental interventions are effective at improving overall quality 
of life, reducing healthcare costs and improving productivity. By 
integrating the National Asthma Control Program (NACP) and the Healthy 
Homes/Childhood Lead Poisoning Prevention Program, CDC's aim is to 
establish and maintain a more coordinated approach to this multifaceted 
public health challenge.
    Question. Can you please explain the impact on Rhode Island, and 
the country, if discretionary funding were to be reduced from its 
current 2010 level, in terms of patients served, patient health status, 
and the economy as a whole?
    Answer. Reductions in the annual health center appropriation level 
will impact the ability of the Health Center Program to meet projected 
patient targets nationally and in Rhode Island. Depending on the size 
of the reduction, it may limit or eliminate the Program's ability to 
expand the program and/or sustain current program investments and 
achievements.
                                 ______
                                 
               Questions Submitted by Senator Mark Pryor

    Question. I understand that the Health Resources and Services 
Administration funding is proposed to be reduced in the 
Administration's fiscal year 2012 budget proposal. Further, the 
Administration is proposing to eliminate the Public Health Improvements 
account based on the fact that this account is entirely earmarked.
    What Federal funding streams are available for hospitals to apply 
for facilities and equipment grants?
    Answer. The Health Resources and Services Administration's (HRSA) 
Office of Rural Health Policy (ORHP) published a manual last year, 
targeted to critical access hospitals, outlining the various steps 
involved in planning, financing and carrying out construction 
projects.HRSA also facilitates the funding of equipment for rural 
hospitals to provide or receive clinical services at a distance through 
the Telehealth Network Grant Program (TNGP) administered by HRSA/ORHP's 
Office for the Advancement of Telehealth (OAT). The TNGP supports not-
for-profit organizations and offers up to $250,000 per year in funding 
to demonstrate how telehealth programs and networks can improve access 
to quality healthcare services in underserved rural and urban 
communities. By statute, the TNGP limits equipment expenditures to 40 
percent of each grant award. We anticipate that a TNGP funding 
opportunity announcement will be released in fiscal year 2012, subject 
to appropriations. Although the TNGP funds equipment, its focus is the 
funding of telehealth networks that provide clinical services to 
underserved populations and the evaluation of telehealth technology's 
effectiveness.
    Question. Are any of these funding sources targeted at rural 
hospitals?
    Answer. Rural Hospitals are eligible to apply for the USDA funding 
and TNGP funding. The Telehealth Network Grant Program (TNGP), 
administered by the Health Resources and Services Administration 
(HRSA)/Office of Rural Health Policy's (ORHP) Office for the 
Advancement of Telehealth (OAT) is a primary conduit for demonstrating 
how telehealth programs and networks can improve access to quality 
healthcare services in underserved rural and urban communities. TNGP 
grants demonstrate how telehealth networks improve healthcare services 
to: (a) expand access to, coordinate, and improve the quality of 
healthcare services; (b) improve and expand the training of healthcare 
providers; and/or (c) expand and improve the quality of health 
information available to healthcare providers, patients, and their 
families.
    Question. The fiscal year 2012 budget request for LIHEAP totals 
$2.569 billion. This is down from an fiscal year 2011 request of $5.3 
billion and an fiscal year 2010 enacted level of $5.1 billion.
    While I understand the budget constraints that we are facing right 
now, I am concerned about families losing this assistance. What 
resources are out there to assist families with energy costs in lieu of 
LIHEAP assistance?
    I know there are several formulas used to calculate how funding is 
distributed. In Arkansas, we are put at a disadvantage in the summer 
months because most of the funding is spent on heating during the 
winter and little is left over for cooling during the summer. Residents 
in southern States rely on LIHEAP for cooling as well as heating. How 
can the LIHEAP funding be adjusted so that southern States can better 
help their citizens during the hot summer weather?
    Answer. Several other ACF programs, including TANF and the Social 
Services and Community Services Block Grants, provide assistance to low 
income people which may be used for home energy costs. Outside of HHS, 
assistance for home weatherization is provided by the Department of 
Energy. The fiscal year 2012 President's budget requested $320 million 
for this purpose, an increase of 52 percent above fiscal year 2010. 
States also provide substantial home energy assistance, $2.6 billion in 
fiscal year 2009, primarily from rate assistance from publically 
regulated utilities and State/local home energy assistance funds.
    LIHEAP block funds are distributed to States by statutory formula. 
States determine how to distribute their allocation between heating and 
cooling assistance. Prior to 1984, funds were allocated to States based 
largely on their numbers of low income people and the National Weather 
Service's standard measure for the need for heat. In 1984, Congress 
enacted the new formula to adjust State allocations to reflect total 
home energy costs (heating and cooling) by low income households. This 
formula takes effect when the appropriation for the formula grant 
exceeds $1.975 billion. Since fiscal year 2009, LIHEAP appropriation 
language has capped the amount of funding distributed by the new 
formula at $840 million.
    Question. Frequently, I hear concerns about the availability of 
healthcare providers in rural areas. Many of the rural areas in 
Arkansas have an aging community of healthcare providers, and the 
citizens of those communities are worried about preserving access to 
care. Can you discuss priorities you are working on to ensure we have 
enough healthcare providers to deliver quality healthcare in rural 
areas?
    Answer. The President's budget included funding to support rural 
healthcare that focus on improving recruitment and retention of 
healthcare providers in rural areas. The Health Resources and Services 
Administration's (HRSA) National Health Service Corps (NHSC) serves as 
a key resource in this area as 60 percent of the placements for NHSC 
practice in rural areas. In addition, HRSA's Office of Rural Health 
Policy is funding the Rural Training Track (RTT) Technical Assistance 
Center grant to support the existing rural training tracks around the 
country and to assist communities in developing new RTT programs. HRSA 
also supports the work of the National Rural Recruitment and Retention 
Network, a 50 State consortium of clinician recruiters who work to 
match doctors, nurses and dentists with an interest in rural practice 
with rural communities in need of a practitioner. Last year, the Rural 
Recruitment and Retention Network supported the placement of more than 
1,030 clinicians in rural areas.
    Question. State-based health insurance exchanges will be created to 
make affordable, quality insurance options available to every American. 
Debates have been taking place in some States about whether or not 
States should move forward in setting up exchanges that will be run by 
State governments before the Supreme Court rules on the 
constitutionality of the individual mandate. Can you briefly describe 
the opportunities States have to establish exchanges and what the role 
could be for either State governments or the Federal Government 
depending on what decisions States make?
    Answer. To receive a multi-year Establishment grant, States must 
commit to establishing an Exchange. Recognizing that not all States are 
far enough along to make this determination, grants for up to 1 year of 
funding will not require a State to commit to operating its own 
Exchange. By statute, Territories must commit to establishing, and 
ultimately establish, an Exchange to receive any Exchange grant 
funding.
    Through both the Planning and Establishment grants, States are held 
to achieving milestones for important Exchange implementation 
activities such as insurance market research, stakeholder consultation, 
and assessment of current State eligibility and enrollment systems. If 
a State ultimately chooses not to implement its own Exchange, or HHS 
determines a State is not ready to operate an Exchange by 2014, HHS may 
benefit from this work when it establishes a federally operated 
Exchange in that State.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby

                               CLASS ACT

    Question. The CLASS Act attempts to address an important public 
policy concern--the need for non-institutional long-term care--but it 
is viewed by many experts as financially unsound. The President's 
fiscal commission recommended reform or repeal of the CLASS Act. You 
stated to health advocacy groups that, ``it would be irresponsible to 
ignore the concerns about the CLASS program's long-term sustainability 
in its current form.'' The President's budget proposal includes a 
request of $120 million for the CLASS Act, which would be the first 
discretionary appropriation for the program. If you are unable to 
certify that it will be sustainable absent a massive taxpayer infusion 
of funds, why would Congress want to appropriate the requested $120 
million in taxpayer funds for a program that experts project will fail?
    Answer. We share your view that the CLASS Act addresses an 
important public policy concern. About 14 million people spend more 
than $230 billion a year on long-term services and supports to assist 
them with daily living. Four times that many rely solely on unpaid care 
provided by family and friends. Despite public misperception that 
Medicare and Medicaid will cover their long-term care costs, Medicare 
is only available for time-limited coverage of very specific types of 
skilled nursing facility services and while Medicaid is the largest 
public payer of these services, it is only available for people with 
few financial resources, such as those who were forced to spend their 
retirement on long-term care and have no place left to turn. The CLASS 
program represents a significant new opportunity for all Americans who 
work to prepare themselves financially to remain as independent as 
possible under a variety of future health circumstances.
    The Affordable Care Act requires HHS to develop an actuarially 
sound benefit plan that is fiscally sustainable. The discretionary 
request will finance the start up costs associated with establishing 
the CLASS program. All programs have start up costs, and this one is no 
different. This funding will be used to establish a solid benefit plan, 
develop an IT system to help consumers enroll, and implement an 
information and education plan to ensure participation and fiscal 
sustainability. This bridge will enable the program to begin enrolling 
individuals and collecting premiums, which will then be used for 
benefits once participants are vested and have an eligible claim.
    I appreciate your consideration of this request, recognizing that 
HHS is still in the process of developing the actuarially sound benefit 
plan. We will not implement a program unless it is solvent and 
sustainable, as required by the statute. Prior to collecting any 
premiums, HHS will publish a notice of proposed rulemaking and present 
three actuarially sound benefit plans, as required by statute, to the 
CLASS Independence Advisory Council. These transparent processes will 
help HHS ensure the CLASS program starts with every expectation of 
sustainability; thus, the $120 million request will help the program 
with its critical startup activities, such as ensuring a significant 
education and outreach effort for broad enrollment.
    Question. What will prevent from the Department from subsidizing 
this alleged self-sustaining program with taxpayer funds once it is 
implemented and then fails?
    Answer. The law clearly states that the program must be able to pay 
for benefits with the premiums it takes in and that no taxpayer dollars 
may be used to pay for CLASS benefits. Section 3208(b) of the CLASS Act 
prevents HHS from using taxpayer funds to pay benefits. Specifically, 
the Act states ``No Taxpayer Funds Used To Pay Benefits--No taxpayer 
funds shall be used for payment of benefits under the CLASS Independent 
Benefit Plan. For purposes of this subsection, the term `taxpayer 
funds' means any Federal funds from a source other than premiums 
deposited by CLASS program participants in the CLASS Independence Fund 
and any associated interest earnings.''
    Question. The budget proposal for the CLASS Act includes $93.5 
million in new Federal spending for ``information and education'' to 
ensure that an adequate number of individuals will enroll in the 
program. While I do not agree with Congress appropriating $120 million 
for an insolvent program, it makes even less sense to spend $93.5 
million of that funding to promote a program that we know as currently 
structured will fail. How do you justify spending such a large sum of 
money on promotion efforts given you will be a promoting a program that 
is not yet defined?
    Answer. This $93.5 million will be used to educate Americans about 
the immense costs of long-term care and their ability to financially 
prepare for these costs. While a direct objective of this effort will 
be to expand the risk pool of individuals voluntarily enrolling in the 
CLASS program, we expect it to also help Americans begin other private 
preparations for these costs and ultimately reduce demands on State and 
Federal budgets. By October 1, 2012, HHS is required by statute to 
designate an actuarially solvent benefit plan that is solvent 
throughout a 75-year period. These funds will be used to promote this 
benefit plan, which will have been made available for comment before 
final designation.
    Question. Given the significant actuarial concerns raised about the 
solvency of the CLASS program, will you agree that all education and 
outreach materials about the CLASS program will be vetted by 
independent actuaries who can attest to their completeness and 
accuracy? I am concerned because it is my understanding that the 
Medicare actuary did not sign off on the 2010 Medicare mailer that 
stated, ``keep Medicare strong and solvent.'' Clearly, that statement 
was not entirely accurate and CMS spent $18 million to distribute these 
false claims.
    Answer. HHS is required to designate an actuarially sound benefit 
plan that is solvent throughout a 75-year period. By law, the methods 
and assumptions used to determine the actuarial status of the CLASS 
Independence Fund will be reviewed and certified by the Chief Actuary 
of the Centers for Medicare & Medicaid Services and the financial 
solvency of the program will be documented in an annual report to 
Congress. The education and outreach materials will be consistent with 
these reviews.
    Question. Modeling suggests that if you have a 2-3 percent 
participation rate the program is not sustainable. Absent massive media 
campaigns, how do you know that there will be greater participation? 
How do you know the market will receive this concept?
    Answer. Broad participation is necessary to mitigate adverse 
selection and ensure the solvency and sustainability of the CLASS 
program. The proposed $93.5 million information and education effort 
will help inform eligible Americans about enrolling in the program. In 
addition, HHS will focus on recruiting employers to participate in the 
program, further improving enrollment. We also intend to conduct 
research to determine the best ways to communicate with consumers about 
the program and their options, and we will discuss the findings from 
this research with the CLASS Independence Advisory Council to help 
inform our estimates of participation in the program.
    Question. On March 22, the Wall Street Journal highlighted the 
problems with the Social Security Disability Insurance system, 
including the inconsistent standards used by State offices that 
adjudicate claims. As an example, the article pointed to one 
administrative law judge in Puerto Rico that approved 98 percent of the 
Social Security disability claims he heard during fiscal year 2010. I 
am concerned that the inconsistent standards across States in the 
Social Security Disability Insurance system could apply to the CLASS 
Act. Secretary Sebelius, will the CLASS Act require a new State-based 
system to process claims and if so, how will you ensure standards 
remain consistent across States?
    Answer. Section 3205 of the statute precludes use by the CLASS 
program of the State determination system for Social Security 
disability claims. At this time, we are considering how to implement 
the eligibility assessment process through which participants will 
claim benefits. Considering the voluntary, self-funded nature of this 
national program, we believe the eligibility assessment system should 
be consistent across the Nation. Thus, one possible approach that we 
are considering is contracting with a neutral third-party 
administrator, like the type servicing private long-term care insurance 
carriers, to ensure standardization of assessments consistent with the 
CLASS Act and its regulations.

                   PREVENTION AND PUBLIC HEALTH FUND

    Question. If the Prevention and Public Health Fund is repealed, how 
will agencies fund the programs you have moved?
    Answer. The Administration strongly opposes legislation that 
attempts to erode the important provisions of the Affordable Health 
Care that are making healthcare more accessible and affordable for all 
Americans. The Prevention and Public Health Fund is central to reducing 
the burden of chronic disease and reducing the healthcare costs 
associated with treating these diseases. Repeal of the Prevention and 
Public Health Fund would affect current year plans and have a direct 
programmatic impact. The Prevention Fund is central to reducing the 
burden of chronic disease and reducing the healthcare costs associated 
with treating these diseases. HHS has not replaced the entire base of 
program funding with Prevention and Public Health resources. Rather, 
the fiscal year 2011 allocation primarily builds on the prevention 
activities underway at HHS.
    Question. The Affordable Care Act gives the Committee on 
Appropriations transfer authority for the mandatory funding provided 
through the Prevention and Public Health Fund. In fiscal year 2010, the 
Prevention Fund transferred $500 million toward prevention efforts, and 
in fiscal year 2011 $750 million should be transferred. Each fiscal 
year 2011 continuing resolution that has passed has included the 
transfer of these funds. Clearly it is the intent of the Committees on 
Appropriations to direct the transfer of this funding. Yet, you 
announced a spending plan for these funds on February 9, 2011, without 
the enactment of a full year appropriations bill. This means those 
dollars will be obligated without any congressional input or oversight. 
Is it the Department's intention to obligate these funds without 
Congressional transfer authority?
    Answer. The Affordable Care Act in section 4002 gives the Committee 
on Appropriations transfer authority for the mandatory funding provided 
through the Prevention and Public Health Fund. If Congress had directed 
the transfer of fiscal year 2011 Prevention and Public Health Fund 
resources, the Department would have followed the transfer provided in 
law. The full-year appropriations bill for fiscal year 2011, however, 
did not direct the transfer of these funds, and section 4002 of the 
Affordable Care Act gives the Secretary authority to transfer resources 
from the appropriated amount within HHS.
    Question. OMB claims that the ``Education Research Centers overlap 
activities offered by the Department of Labor's Occupational Safety and 
Health Bureau.'' However, the mandate of the two agencies is different. 
The National Institute for Occupational Safety and Health is mandated 
to conduct research and provide professional training in occupational 
safety and health, while OSHA is mandated to regulate occupational 
safety and health conditions in the workplace and provide worker 
training. Therefore, Madam Secretary, where is the overlap?
    Answer. OSHA's Outreach Training Program (OTP), OSHA Training 
Institute (OTI) Education Center, and Resource Center Loan Program all 
focus on employee training. OTP provides employee training in basic 
occupational safety and health courses in construction or general 
industry safety and health hazard recognition and prevention while the 
Resource Center Loan Program offers a collection of training videos to 
help increase employee knowledge of workplace safety. The OSHA Training 
Institute (OTI) Education Center program was initiated as an extension 
of the OSHA Training Institute, which is the primary training provider 
of the Occupational Safety and Health Administration. OTI targets 
Federal and State compliance officers and State consultants, other 
Federal agency personnel, and the private sector. While these programs 
focus on employee training, the ERCs support professional training and 
provide academic programs and research training in the core areas of 
industrial hygiene, occupational health nursing, occupational medicine, 
and occupational safety.
    Question. The OMB justification for elimination of Education 
Research Center's is that the original programmatic plan was to provide 
funding for institutions to develop and expand existing occupational 
health and safety training programs and that this goal has been met. 
However, the statutory goal of the Education Research Centers is ``to 
provide an adequate supply'' of qualified occupational safety and 
health professionals. Has this goal been met? Before you answer, Madam 
Secretary, I would like to point out that according to the Bureau of 
Labor Statistics, employment of occupational health and safety 
specialist and technicians is expected to increase 11 percent during 
the timeframe of 2008-2018.
    Answer. No. The establishment of a set of high quality training 
programs was the necessary first phase of the original long-range plan. 
The subsequent and critical steps for providing an adequate supply of 
qualified safety and health practitioners and researchers require 
ongoing resources to provide trainee support (for example, stipends, 
tuition and fee reimbursement, and research supplies), and to maintain 
the training program infrastructure, which includes a high-quality 
faculty and training environment. Within the context of a budget that 
requires tough choices, we put forth a proposal to discontinue Federal 
funding for the ERCs. We recognize the vital role of occupational 
safety and health professional training. This proposal is one of many 
difficult reductions we proposed as part of the fiscal year 2012 
budget.
    Question. In the fiscal year 2012 budget request, the President 
eliminates funding for the Children's Hospitals Graduate Medical 
Education program. In explaining the elimination, the Administration 
said it ``prefers to focus on targeted investments to increase the 
primary care workforce.'' Although they represent 1 percent of all 
hospitals, children's hospitals train more than 40 percent of general 
pediatricians. Since the inception of the program, children's hospitals 
have increased their training by 35 percent, helped address workforce 
shortages, and improved access to care. When there is a need for an 
expanded physician workforce nationwide, why are you supporting the 
elimination of a program that trains the primary care workforce for 
children?
    Answer. Within the context of a budget that requires tough choices, 
we put forth a proposal to discontinue these general subsidies. This 
proposal is one of many difficult reductions we would not have put 
forth under different fiscal circumstances. We recognize the vital role 
that children's hospitals and pediatric providers play in providing 
quality healthcare to our Nation's children.
    Children's hospitals would continue to be able to compete for 
funding through the competitive grant programs for which they are 
eligible. For example, six children's hospitals received over $16 
million in fiscal year 2010 from the Primary Care Residency Expansion 
program funded by the Affordable Care Act. Pediatric residencies can 
also be supported through the new Teaching Health Center Graduate 
Medical Education Program created by the Affordable Care Act, which 
supports primary care medical residents in community-based ambulatory 
care settings.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran

    Question. The President's fiscal year 2012 budget for the 
Department of Health and Human Services proposes the elimination of the 
Delta Health Alliance at the Health Resources and Services 
Administration and also proposes the elimination of the Delta Chronic 
Disease Assessment and the Centers for Disease Control and Prevention. 
Mississippi has the highest obesity rate in the nation. What are your 
plans to address the health problems in the Mississippi Delta region?
    Answer. The Health Resources and Services Administration (HRSA) 
currently supports 21 Health Centers in Mississippi and they focus on 
providing access to quality healthcare for underserved populations. In 
addition, HRSA's Office of Rural Health Policy (ORHP) has several grant 
programs which are available to address health disparities in the 
Mississippi Delta Region.

             MISSISSIPPI STATE DEPARTMENT OF HEALTH FUNDING

    Question. The President's budget proposes the elimination of the 
Preventive Health and Health Services Block Grant and proposes a new 
consolidated chronic disease grant program at the Centers for Disease 
Control and Prevention. The budget justification says this new grant 
program will not be a formula grant structure, but rather it will be 
competitive. Rural areas and States without capacity will be 
disproportionately affected by competitions. I am concerned that the 
new chronic disease grant program will create a scenario where the rich 
get richer and the poor get poorer. What are your plans to ensure that 
State health departments have the capacity to compete for funds at the 
Centers for Disease Control?
    Answer. Chronic diseases--such as heart disease, stroke, cancer, 
diabetes, and arthritis--are among the most common, costly, and 
preventable of all health problems in the United States. Historically, 
CDC has funded categorical programs in State health departments to 
address these diseases as well as their common risk factors of obesity, 
poor nutrition and/or inadequate physical activity. Under the current 
structure, not all States are funded for these programs.
    Because of the inter-relatedness of many common chronic diseases 
and their risk factors, the Coordinated Chronic Disease Prevention and 
Health Promotion Grant Program will support essential public health 
functions at the State level including epidemiology, evaluation, 
policy, communications and program management. Such an approach will 
strengthen State based coordination and therefore improve program 
efficiencies, provide leadership and support for cross-cutting 
activities and enhance the effectiveness of chronic disease prevention 
and risk factor reduction efforts across the included categorical 
programs.
    State health departments are eligible to receive funding through 
the Coordinated Chronic Disease Prevention Program. State health 
departments are required to deliver programming that reaches across the 
State and reduces specific disparities within the State, including 
rural areas. In addition, recognizing the importance of supporting all 
States, including rural areas, $115 million of the $528 million 
available is intended to support all State health departments, 
territories, and some Tribes to establish or strengthen leadership, 
expertise, coordination of chronic disease prevention programming, 
surveillance and evaluation. In addition, health departments will be 
eligible to apply for competitive awards to strengthen coordination of 
chronic disease prevention programs and implement evidence-based 
prevention strategies. These competitive grants to State health 
departments, territories, some tribes and other entities will support 
activities addressing:
  --Policy and environmental approaches to improve nutrition and 
        physical activity in schools, worksites and communities;
  --Interventions to improve delivery and use of selected clinical 
        preventive services; and
  --Community programs to support chronic disease self management to 
        improve quality of life for people with chronic disease and to 
        prevent diabetes, heart disease and cancer among those at high 
        risk.
                                 ______
                                 
             Questions Submitted by Senator Lamar Alexander

    Question. As a former Governor, I am deeply concerned with the 
Medicaid expansion in the new health law. Tennessee's previous Governor 
Bredesen, a Democrat, has called it ``the mother of all unfunded 
mandates'' and estimated that it will cost Tennessee and additional 
$1.1 billion for 2014-2019, and that is even with the Federal 
Government is paying 100 percent of the expansion population from 2014-
2016. CBO recently estimated that it will cost States $60 billion 
through 2021.
    The new law also mandates that Medicaid primary care physicians be 
reimbursed at 100 percent of Medicare rates in 2013-2014, for which the 
Federal Government will pay for those 2 years. But this creates a 
funding cliff for 2015. To keep doctors in their programs, States will 
either be forced to continue to pay Medicaid primary care physicians 
100 percent of Medicare rates, or these physicians will effectively see 
a 40-50 percent cut for in 2015. According to the TennCare Director, 
the requirement to increase provider reimbursement to 100 percent of 
Medicare would cost Tennessee roughly an additional $324 million per 
year.
    How are States going to shoulder these additional burdens in the 
current budget crises most of them are experiencing? Is the 
administration considering any kind of flexibility options to offer to 
States in order to avoid being crushed by all the mandates and 
maintenance of effort requirements?
    Answer. We recognize that the economic downturn has forced States 
to make hard choices to control State spending, and that there are no 
easy answers. Recognizing the challenges facing States, I sent a letter 
to Governors in early February outlining existing flexibility and 
reaffirming the Department of Health and Human Services'--and the 
Center for Medicare & Medicaid Services'--commitment to working with 
States to improve care and manage costs in the Medicaid program. As 
part of that effort, CMS has undertaken an unprecedented level of 
outreach to States to help them strategize on ways to improve the 
efficiency of their Medicaid programs in light of current State budget 
challenges. To accomplish this task, CMS has created Medicaid State 
Technical Assistance Teams (MSTATs) that are ready to provide intensive 
and tailored assistance to States on day-to-day operations as well as 
on new initiatives. As of mid April, CMS has been contacted by 22 
States for technical assistance. We are ready to continue working with 
States to explore new ways to manage their programs that will increase 
efficiency, reduce spending, and improve health for Medicaid 
beneficiaries.
    Question. One of the problems with the Medicaid expansion is that 
there is an access problem for patients in the program being unable to 
see a doctor willing to treat them. There are varying reports on 
providers not willing to see Medicaid patients, like the 2006 report 
from the Center for Studying Health System Change Only stating that 
only about one-half of U.S. physicians accept new Medicaid patients.
    Even the CMS chief actuary stated in an analysis done in April, ``. 
. . it is reasonable to expect that a significant portion of the 
increased demand for Medicaid would be difficult to meet, particularly 
over the first few years.''
    By adding 16-18 million more people into the program, what is your 
administration doing to address access issues for all these new 
beneficiaries?
    Answer. I am committed to ensuring access for Medicaid 
beneficiaries. The Affordable Care Act provision which helps States 
boost their payment rates to Medicare levels for 2 years is a good 
first step, as are all of the provisions that reform our healthcare 
delivery system to align payments with higher quality care. Federal 
funding will be available to cover 100 percent of the initial cost of 
the mandated increases in provider payment for primary care services.
    The newly formed Medicaid and CHIP Payment and Access Commission 
(MACPAC) will play an important role by providing research and analysis 
on provider payment rates and access in the Medicaid program. In the 
initial MACPAC report, issued in March 2011, there was extensive 
discussion about the difficulties in analyzing access issues, and the 
need to develop additional data sources and new analytic approaches. On 
May 6, 2011, we published a proposed rule that integrated the MACPAC 
approach into a strategy to develop a transparent process for States to 
collect and analyze access issues. We anticipate working closely with 
MACPAC to learn about best practices and approaches in sustaining 
access in 2014 and beyond.
    Question. Has HHS done an analysis of how many providers are not 
seeing new or any Medicaid patients? If not, can CMS look into this?
    Answer. Access to providers by Medicaid recipients is of paramount 
importance. As a requirement for States' participation in the Medicaid 
program, they must ensure that ``payments are consistent with 
efficiency, economy, and quality of care and are sufficient to enlist 
enough providers so that care and services are available to the general 
population in the geographic area.'' As noted above, CMS is currently 
undertaking rulemaking to provide guidance to States on compliance with 
this requirement, which includes a framework for State and Federal 
review. Through the rulemaking process, we are welcoming public notice 
and comment on our proposed approach, which provides for States to 
review access through a three-part framework, focusing on beneficiary 
needs, provider enrollment, and service utilization.
    Because States have primary responsibility for managing data on 
eligible beneficiaries and for enrolling and reimbursing Medicaid 
providers, States have the most accurate and up to date information on 
the number of providers participating in each State's Medicaid program, 
the percent of those accepting new Medicaid patients, and whether those 
numbers are comparable to the availability of providers for the general 
population in the area. Our proposed strategy is to require States to 
perform the initial analysis of available data and issue access reports 
for both Federal and public scrutiny.
    Question. In your January testimony to the HELP Committee, you 
mentioned tax credits as a way that the law will keep down premiums. I 
realize that people who receive the tax credits or subsidies will pay 
less out of their own pocket for premiums, but are you saying that 
these tax credits/subsidies will bring down the underlying premiums and 
or the underlying cost of healthcare?
    Answer. Many provisions of the Affordable Care Act make healthcare 
more affordable for American families and businesses, including tax 
credits and premium assistance, new oversight of private insurance 
premiums growth, delivery systems reforms that will bend the healthcare 
cost curve, and larger purchasing pools through Exchanges.
    Insurers often raise premiums to protect themselves against 
unpredictable market conditions. Premium tax-credits offered through 
Exchanges make health insurance coverage attainable for individuals who 
have not previously been able to afford the costs of health insurance 
and will enable wider participation in the health insurance market. 
Keeping more people in the insurance market at all times, and not just 
when they get sick, will lead to greater predictability and stability 
in the individual market.
    Question. According to estimates from Senate Finance minority tax 
staff last year, only 7 percent of Americans would qualify for 
subsidies and would see these cost savings. What about everyone else? 
Even CBO has said premiums for families buying coverage on the 
individual market would see premiums increase by $2,100 a year.
    Answer. Even after full implementation of health reform, most 
Americans will continue to receive insurance through their employers, 
as has traditionally been the case. CBO estimates that nearly 20 
million Americans without access to affordable or adequate coverage 
through their employers or other sources will receive premium tax 
credits or cost-sharing subsidies through the Exchanges.
    Question. You also stated in your HELP testimony that the new law 
``is bringing down premiums for consumers by limiting the amount of 
premiums insurers may spend on administrative costs and by giving 
States resources to beef up their review process.''
    How do you square this statement with recent news articles that 
some insurers are raising premiums as a result of the new law?
    Answer. According to our analysis and those of some industry and 
academic experts, any potential premium impact from the new consumer 
protections and increased quality provisions under the Affordable Care 
Act will be minimal. We estimate that the effect will be no more than 1 
to 2 percent. This is consistent with estimates from the Urban 
Institute (1 to 2 percent) and Mercer consultants (2.3 percent). 
Insurers themselves have also reached a similar conclusion. 
Pennsylvania's Highmark, for example, estimates the effect of the 
legislation on premiums from 1.14 to 2 percent.
    Any premium increases will be moderated by out-of-pocket savings 
resulting from the law. These savings include a reduction in the 
``hidden tax'' on insured Americans that subsidizes care for the 
uninsured. By making sure that high-risk individuals have insurance and 
emphasizing healthcare that prevents illnesses from becoming serious, 
long-term health problems, the law will begin to reduce costs resulting 
from the treatment of patients at the acute stage of illness. The law 
prioritizes prevention, making many services available without cost-
sharing, invests in prevention in communities across the country, and 
contains a series of provisions designed to improve the way we pay for 
care.
    In addition to the coverage and delivery system changes that will 
begin to bend the cost curve, the law provides valuable new tools to 
ensure that consumers are getting value for their premium dollar. 
Already, we have provided 44 States and the District of Columbia with 
resources to strengthen the review and transparency of proposed 
premiums. CMS is making up to $250 million available for States to 
improve their rate review infrastructure and to fight unreasonable 
rates. Rate review allows States to examine and in some cases reject or 
modify the insurance rate before implementation. At the end of the 
year, the new medical loss ratio standard requires carriers to rebate 
premiums back to consumers if they fail to meet the standard. Rate 
review and medical loss ratios work together to help consumers. We will 
also keep track of insurers with a record of unjustified rate 
increases; those plans may be excluded from health insurance Exchanges 
in 2014.
    Question. There has been a lot of news coverage lately about the 
more than 1,100 annual limit waivers granted by your administration. 
Additionally, several States have applied for waivers from the medical 
loss ratio (MLR) requirement.
    Would it not make more sense for HHS to consider a blanket waiver 
of annual benefit limits and MLR standards until 2014?
    Answer. The Center for Consumer Information and Insurance Oversight 
(CCIIO)'s waiver policy represents a transition to 2014, when annual 
limits will be eliminated and limited medical benefit plans will be a 
thing of the past. Until 2014, the transition ensures that insurance 
plans that can remove annual limits do so. Those that cannot remove 
annual limits without significantly raising premiums or reducing access 
to benefits can receive waivers. This transition assures that Americans 
can keep this limited coverage until more comprehensive coverage 
options are available to all in 2014. CCIIO is approving 1 year waivers 
and collecting data on limited benefits plans that will inform our 
approach for future years.
    The medical loss ratio provision allows CCIIO to adjust the 
percentage if the potential exists to destabilize the individual market 
in a State. To date, one State, Maine, has received a reduced loss 
ratio. Each State market is different and CCIIO has established a 
process by which a State may apply, if they believe the potential 
exists for disruption. CCIIO will evaluate each application against the 
criteria set forth in regulation and guidance.
    Question. Does the HHS have contingency plans for larger than 
expected expenditures for subsidies if more employers drop coverage 
than expected?
    Answer. The reforms in the Affordable Care Act are intended to 
complement and strengthen the existing employer-based insurance system, 
not to replace it. We believe that the MLR requirements, review of 
annual rate increases, and delivery system reforms will help slow the 
growth of insurance costs to businesses so they can continue to provide 
the insurance their employees and families need and depend on.
    The Congressional Budget Office has found that any decrease in 
employer-sponsored coverage because of the Affordable Care Act would be 
minimal. On the contrary, the Affordable Care Act provides tremendous 
benefits for employers that will encourage them to continue to offer 
health insurance coverage to their employees. In the coming years, the 
Congressional Budget Office estimates that health insurance premiums 
could decrease by up to 3 percent for employers. The new law also 
provides $40 billion in tax credits to help small businesses purchase 
coverage for their employees. In 2014, small businesses will be able to 
purchase private insurance through the Exchanges, which will provide 
them with the same purchasing power as large businesses.
    Question. In the last Congress, HHS received enormous 
appropriations of tax dollars with very little Congressional direction 
on the use of those funds going forward. HHS received $1 billion as 
part of the Federal stimulus program and approximately $2 billion more 
per year in the future as part of the new healthcare law, all for the 
Mobilizing for Action through Planning and Partnerships (MAPP) 
intervention grants. HHS was given these enormous streams of taxpayer 
dollars without clear direction on the specifics of how those funds 
should be used.
    CDC appears to be using these taxpayer dollars to fund advocacy 
organizations at the State and local level who engage in legislative 
advocacy for higher taxes and restrictions focused on consumer goods, 
which raises a number of serious concerns. Using Federal tax dollars 
for legislative advocacy is against the law, as the appropriation 
itself is subject to a restriction clearly prohibiting that the agency 
from using Federal funds to engage in direct or grassroots lobbying for 
changes in State or local laws. There also is a Federal criminal 
statute--the Anti-Lobbying Act--making it a criminal offense to 
``influence in any manner . . . an official of any government, to 
favor, adopt, or oppose, by vote or otherwise, any legislation, law, 
ratification, policy or appropriation.''
    As a former Governor, I think it is totally inappropriate for the 
executive branch to unilaterally decide what is or isn't a good State 
or local law worthy of financial support. If the Administration has a 
legislative agenda, it should work with the Congress to enact it 
through the legislative process.
    In response to questions about the use of these funds during 
congressional hearings last year, CDC Associate Director Pechachek, 
stated that, ``The prohibition against lobbying does not mean that 
communities are prohibited from interacting with policy makers such as 
legislators in order to promote the goals of the Communities Putting 
Prevention to Work Program.''
    How can a program have as a main, underlying objective to seek 
changes in State and local laws when the Federal Government 
specifically prohibits the use of Federal grant moneys to engage in 
direct or grassroots lobbying? Do you agree with this concern?
    How much of the billions of dollars in spending under the stimulus 
and new healthcare law has been used to support efforts to change local 
and State laws? Would you provide this Committee with the details of 
that information?
    Answer. As part of the American Recovery and Reinvestment Act 
(ARRA), Congress provided $650 million in funding for CDC to implement 
the Communities Putting Prevention to Work (CPPW) program. In addition, 
approximately $44 million from the Prevention and Public Health Fund 
supported quality but unfunded CPPW grantees, as well as media and 
evaluation, in fiscal year 2010. CPPW grantees are tackling important 
health problems, focusing on tobacco, nutrition and physical activity. 
Addressing these health challenges requires action at the community 
level, often to make changes that give individuals greater 
opportunities to make healthy choices.
    CDC strictly adheres to all Federal laws prohibiting the use of 
Federal funds to lobby, and even goes beyond statutory requirements to 
restrict the activities of grantees at the local level when Federal 
funds are involved. CDC regularly educates all grantees on Federal laws 
related to funding awards, including anti-lobbying provisions. CDC 
references Additional Requirement (AR)-12 ``Lobbying Restrictions'' in 
all of its Funding Opportunity Announcements (FOAs), and all 
prospective recipients must agree to these restrictions prior to 
receiving funds. The AR states, in part, ``Any activity designed to 
influence action in regard to a particular piece of pending legislation 
would be considered `lobbying.' That is, lobbying for or against 
pending legislation, as well as indirect or `grass roots' lobbying 
efforts by award recipients that are directed at inducing members of 
the public to contact their elected representatives at the Federal or 
State levels to urge support of, or opposition to, pending legislative 
proposals is prohibited. As a matter of policy, CDC extends the 
prohibitions to lobbying with respect to local legislation and local 
legislative bodies.''
    CDC is careful to monitor the use of Federal funding, and to ensure 
that grantees comply with Federal law and the specific guidance of the 
Funding Opportunity Announcement and conditions outlined in the AR-12. 
However, anti-lobbying provisions do not prohibit communities from 
interacting with policymakers through proper official channels, in 
order to educate them about the burden of chronic diseases and their 
associated risk factors, as well as evidence-based strategies to 
promote health. There are many activities that are allowable under 
Federal law which community leaders may decide to pursue; moreover, 
policy change does not have to include formal legislative action. For 
example, health departments may choose to work with local 
transportation and planning departments to ensure that urban design 
policies include opportunities for people to be active. Local 
businesses may voluntarily decide to change their food procurement 
policies and to provide a greater selection of healthy food options for 
employees in vending machines and cafeterias. Transit systems may 
determine on their own to make their trains and buses smoke-free. Each 
of these is an example of a type of policy change that impacts people 
in their daily lives, without requiring legislative action at the 
local, State, or Federal levels.
    CDC supports community efforts to foster these types of linkages 
between health departments and key stakeholders from multiple sectors 
across a community, while strictly adhering to all Federal laws 
prohibiting the use of Federal funds to lobby. CDC carefully monitors 
the activities of grantees and the use of Federal funds to ensure 
compliance with Federal law, the specific guidance of the Funding 
Opportunity Announcement, and conditions outlined in AR-12.
    Question. One of the major concerns I have heard from constituents 
about the new health law is that it will lead to government control and 
rationing. Treatment choices should be made between doctors and 
patients, rather than by folks in Washington, DC.
    While the FDA has announced its decision to withdraw its approval 
for Avastin for breast cancer treatment, the European equivalent (the 
EMEA) has confirmed the use of Avastin for breast cancer. Shouldn't 
American women on Medicare have access to this drug as well?
    Answer. I recognize the critical importance of the physician-
patient relationship, especially in deciding an appropriate drug 
therapy treatment. The Medicare statute authorizes coverage of items 
and services that are reasonable and necessary for the diagnosis or 
treatment of illness or injury in the Medicare population.
    At this time, CMS is not making any changes to its coverage or 
reimbursement policies for Avastin and is waiting until the resolution 
of the FDA process before deciding whether to make any changes. While 
we do periodically consider new evidence about Medicare-covered drugs 
or treatments to evaluate whether changes in coverage decisions are 
warranted, it would be premature to speculate on possible changes in 
Medicare coverage of Avastin, if any, that may be made in response to 
future FDA actions.
    Question. Avastin is an expensive treatment option. Can you affirm 
that the FDA was looking purely at science rather than the cost of the 
drug when making its decision?
    Answer. The Food and Drug Administration (FDA) is responsible for 
protecting the public health by ensuring that drugs and biologics are 
safe and effective. In determining whether a product should be labeled 
for a particular indication, FDA takes seriously our obligation to 
carefully weigh the risks and benefits for the patient. Specifically, 
FDA considers whether the benefits of the drug, including the magnitude 
of those benefits, outweigh the product's potential toxicities for the 
indicated use. The Food and Drug Administration does not factor costs 
into its drug approvals or safety related decisions. FDA's Center for 
Drug Evaluation and Research has proposed to remove Avastin's 
indication for metastatic breast cancer based on the Center's 
evaluation of efficacy and safety data available from clinical trials, 
without considering the cost of the drug. FDA has not yet reached a 
final decision on this proposal, and this matter will be the subject of 
a hearing in June 2011.
    Question. More than 40 States have laws in place to ensure those on 
private insurance have access to cancer drugs even if they are ``off-
label.'' Shouldn't women on Medicare have the same guarantee?
    Answer. At this time, CMS is not making any changes to its coverage 
or reimbursement policies for Avastin and is waiting until the 
resolution of the FDA process before deciding whether to make any 
changes. While we do periodically consider new evidence about Medicare-
covered drugs or treatments to evaluate whether changes in coverage 
decisions are warranted, it would be premature to speculate on possible 
changes in Medicare coverage of Avastin, if any, that may be made in 
response to future FDA actions. I would note, however, that, generally, 
Medicaid coverage of a drug is contingent upon that drug having FDA 
approval. I cannot speak to the process behind the coverage decisions 
of other insurance providers.
    Question. If many of the roughly 18,000 women using Avastin for 
metastatic breast cancer find it effective, and scientific experts at 
the National Comprehensive Cancer Network, the leading cancer 
compendia, support its use, can you assure me that Medicare will not 
restrict coverage of this product?
    Answer. I recognize the critical importance of the physician-
patient relationship, especially in deciding an appropriate drug 
therapy treatment. The Medicare statute authorizes coverage of items 
and services that are reasonable and necessary for the diagnosis or 
treatment of illness or injury in the Medicare population.
    At this time, CMS is not making any changes to its coverage or 
reimbursement policies for Avastin and is waiting until the resolution 
of the FDA process before deciding whether to make any changes. While 
we do periodically consider new evidence about Medicare-covered drugs 
or treatments to evaluate whether changes in coverage decisions are 
warranted, it would be premature to speculate on possible changes in 
Medicare coverage of Avastin, if any, that may be made in response to 
future FDA actions.
                                 ______
                                 
             Questions Submitted by Senator Lindsey Graham

    Question. Can you explain FDA's process for approving drugs for new 
indications?
    Answer. Secretary Sebelius: In order for a new indication for a 
drug or biologic product to be marketed in the United States, it must 
be shown to be safe and effective for its intended new use.
    In 1998, FDA published guidance for manufacturers planning to file 
applications for new indications of approved drugs or biologic 
products. In this guidance, FDA articulated its thinking on the 
quantity of evidence needed in particular circumstances to establish 
substantial evidence of effectiveness. The guidance discussed the 
standards and data requirements for approval of new indications so that 
duplication of data previously submitted in the original application 
could be avoided. In particular, FDA addressed situations in which a 
single adequate and well-controlled trial of a specific new use could 
be supported by information from other adequate and well-controlled 
trials, such as trials in other stages of a disease, or in closely 
related diseases.
    The new drug or biologics licensing application that is submitted 
by the manufacturer in support of a new indication must include the 
requisite clinical trial information demonstrating safety and 
effectiveness, and supportive clinical pharmacology, preclinical and 
product quality information, as needed. FDA scientists review the 
submitted information and determine whether or not the product may be 
approved for the new use if the benefits of treatment are found to 
outweigh the risks for the intended population.
    Question. Am I correct in my understanding that FDA does not 
consider the cost of a drug during its approval process? If cost is 
considered, how does that cost factor into FDA's decision to approve 
drugs for certain indications?
    Answer. Yes, you are correct. In deciding whether to approve a 
drug, FDA cannot and does not take price into account.
    Question. I am aware that Avastin is a very expensive drug, and I 
have been made aware of concerns that cost could have been a factor in 
FDA's decision to remove the breast cancer indication from Avastin's 
label. Did Avastin's cost play any role in FDA's decision regarding the 
drug?
    Answer. The Food and Drug Administration is responsible for 
protecting the public health by ensuring that drugs and biologics are 
safe and effective. In determining whether a product should be labeled 
for a particular indication, FDA takes seriously its obligation to 
carefully weigh the risks and benefits for the patient. Specifically, 
FDA considers whether the benefits of the drug, including the magnitude 
of those benefits, outweigh the product's potential toxicities for the 
indicated use. The Food and Drug Administration does not factor costs 
into its drug approvals or safety related decisions. FDA's Center for 
Drug Evaluation and Research has proposed to remove Avastin's 
indication for metastatic breast cancer based on the Center's 
evaluation of efficacy and safety data available from clinical trials, 
without considering the cost of the drug. FDA has not yet reached a 
final decision on this proposal, and this matter will be the subject of 
a hearing in June, 2011.
    Question. What is HHS's policy for awarding grants to organizations 
that advocate for specific policy positions?
    I have heard concerns that Federal stimulus dollars targeted to 
public health were awarded to advocacy organizations who lobby State 
and local governments for specific policy changes regarding food and 
beverages. Can you provide details regarding the grant-making process 
for public health programs including the information required for 
proposal when submitted and how often HHS audits grant recipients to be 
sure they are complying with the aims of the HHS' grant programs?
    Answer. Applicants for (and recipients of) Federal grants, 
cooperative agreements, contracts, and loans are prohibited by 31 
U.S.C. 1352, ``Limitation on use of appropriated funds to influence 
certain Federal contracting and financial transactions,'' from using 
appropriated Federal funds to pay any person for influencing or 
attempting to influence any officer or employee of an agency, a member 
of Congress, an officer or employee of Congress, or an employee of a 
Member of Congress with respect to the award, extension, continuation, 
renewal, amendment, or modification of any of these instruments. These 
requirements are implemented for HHS in 45 CFR part 93, which also 
describes types of activities, such as legislative liaison activities 
and professional and technical services that are not subject to this 
prohibition. Applicants for HHS grants with total costs expected to 
exceed $100,000 are required to certify that they: have not made, and 
will not make, such a prohibited payment; will be responsible for 
reporting the use of non-appropriated funds for such purposes; and will 
include these requirements in consortium agreements, other subawards, 
and contracts under grants that will exceed $100,000 and will obtain 
necessary certifications from those consortium participants and 
contractors.
    Disclosure reporting is required after award as indicated and must 
be certified annually either through providing submitting disclosure 
statements by doing so on the SF-LLL, Disclosure of Lobbying 
Activities. Where there are no disclosures to report the grantee 
certifies this fact by signing the face page of the application without 
the need to submit the forms. The grantee certifies that there are no 
lobbying activities to report when they sign the face page of the 
application.
    Consistent with Federal law, in its grant programs, CDC references 
Additional Requirement (AR)-12 ``Lobbying Restrictions'' in all of its 
Funding Opportunity Announcements (FOAs), and all prospective 
recipients must agree to these restrictions prior to receiving funds. 
The AR states, in part, ``Any activity designed to influence action in 
regard to a particular piece of pending legislation would be considered 
`lobbying.' That is, lobbying for or against pending legislation, as 
well as indirect or `grass roots' lobbying efforts by award recipients 
that are directed at inducing members of the public to contact their 
elected representatives at the Federal or State levels to urge support 
of, or opposition to, pending legislative proposals is prohibited. As a 
matter of policy, CDC extends the prohibitions to lobbying with respect 
to local legislation and local legislative bodies.''
    CDC is careful to monitor the use of Federal funding, and to ensure 
that grantees comply with Federal law, the specific guidance of the 
FOAs, and conditions outlined in AR-12. Grants or cooperative 
agreements funded by the American Recovery and Reinvestment Act are 
also subject to this policy. We note, however, that many organizations 
engage in advocacy using funding from other sources, and that this does 
not bar them from applying for and receiving funding from CDC. 
Recipients are permitted to use their own funds to lobby, so long as it 
can be demonstrated or shown that the funds that were used for lobbying 
were entirely separate from any appropriated funds they received from 
the Federal Government. Recipients are required to disclose all 
lobbying activities along with their application. CDC only provides 
funds to undertake activities outlined in the FOA.
    CDC's Procurement and Grants Office (PGO) provides specific 
budgetary oversight to ensure the appropriate use of Federal funds. CDC 
grants management specialists and program staff are significantly 
involved in the planning and monitoring of recipient activities, review 
and approval of spending details, and tracking of grantee drawdown of 
funds. PGO staff participate in annual site visits to all funded 
communities. One example is the Communities Putting Prevention to Work 
(CPPW) program, which has a robust plan for performance monitoring in 
order to ensure that Federal funds are used effectively and 
appropriately. The plan positions CDC staff to identify early warning 
signs that a program is using Federal funds for unauthorized and 
inappropriate activities. Furthermore, an electronic performance 
monitoring system provides a central repository for collecting 
information from a number of program monitoring sources. CDC also 
complies with other mandatory directives, such as OMB Circular A-133, 
which requires every organization receiving $500,000 in aggregate 
Federal grants to submit to annual financial audit. The results of 
these audits are used in periodic grantee reviews to identify grantees 
that may present a risk to the control or integrity of fund use.
    Question. I have heard concerns that Federal stimulus dollars 
targeted to public health were awarded to advocacy organizations who 
lobby State and local governments for specific policy changes regarding 
food and beverages. Can you provide details regarding the grant-making 
process for public health programs including the information required 
for proposal when submitted and how often HHS audits grant recipients 
to be sure they are complying with the aims of the HHS' grant programs?
    Answer. Applicants for (and recipients of) Federal grants, 
cooperative agreements, contracts, and loans are prohibited by 31 
U.S.C. 1352, ``Limitation on use of appropriated funds to influence 
certain Federal contracting and financial transactions,'' from using 
appropriated Federal funds to pay any person for influencing or 
attempting to influence any officer or employee of an agency, a Member 
of Congress, an officer or employee of Congress, or an employee of a 
Member of Congress with respect to the award, extension, continuation, 
renewal, amendment, or modification of any of these instruments. These 
requirements are implemented for HHS in 45 CFR part 93, which also 
describes types of activities, such as legislative liaison activities 
and professional and technical services that are not subject to this 
prohibition. Applicants for HHS grants with total costs expected to 
exceed $100,000 are required to certify that they: have not made, and 
will not make, such a prohibited payment; will be responsible for 
reporting the use of non-appropriated funds for such purposes; and will 
include these requirements in consortium agreements, other subawards, 
and contracts under grants that will exceed $100,000 and will obtain 
necessary certifications from those consortium participants and 
contractors.
    Disclosure reporting is required after award as indicated and must 
be certified annually either through providing submitting disclosure 
statements by doing so on the SF-LLL, Disclosure of Lobbying 
Activities. Where there are no disclosures to report the grantee 
certifies this fact by signing the face page of the application without 
the need to submit the forms. The grantee certifies that there are no 
lobbying activities to report when they sign the face page of the 
application.
    Consistent with Federal law, in its grant programs, CDC references 
Additional Requirement (AR)-12 ``Lobbying Restrictions'' in all of its 
Funding Opportunity Announcements (FOAs), and all prospective 
recipients must agree to these restrictions prior to receiving funds. 
The AR states, in part, ``Any activity designed to influence action in 
regard to a particular piece of pending legislation would be considered 
`lobbying.' That is, lobbying for or against pending legislation, as 
well as indirect or `grass roots' lobbying efforts by award recipients 
that are directed at inducing members of the public to contact their 
elected representatives at the Federal or State levels to urge support 
of, or opposition to, pending legislative proposals is prohibited. As a 
matter of policy, CDC extends the prohibitions to lobbying with respect 
to local legislation and local legislative bodies.''
    CDC is careful to monitor the use of Federal funding, and to ensure 
that grantees comply with Federal law, the specific guidance of the 
FOAs, and conditions outlined in AR-12. Grants or cooperative 
agreements funded by the American Recovery and Reinvestment Act are 
also subject to this policy. We note, however, that many organizations 
engage in advocacy using funding from other sources, and that this does 
not bar them from applying for and receiving funding from CDC. 
Recipients are permitted to use their own funds to lobby, so long as it 
can be demonstrated or shown that the funds that were used for lobbying 
were entirely separate from any appropriated funds they received from 
the Federal Government. Recipients are required to disclose all 
lobbying activities along with their application. CDC only provides 
funds to undertake activities outlined in the FOA.
    CDC's Procurement and Grants Office (PGO) provides specific 
budgetary oversight to ensure the appropriate use of Federal funds. CDC 
grants management specialists and program staff are significantly 
involved in the planning and monitoring of recipient activities, review 
and approval of spending details, and tracking of grantee drawdown of 
funds. PGO staff participate in annual site visits to all funded 
communities. One example is the Communities Putting Prevention to Work 
(CPPW) program, which has a robust plan for performance monitoring in 
order to ensure that Federal funds are used effectively and 
appropriately. The plan positions CDC staff to identify early warning 
signs that a program is using Federal funds for unauthorized and 
inappropriate activities. Furthermore, an electronic performance 
monitoring system provides a central repository for collecting 
information from a number of program monitoring sources. CDC also 
complies with other mandatory directives, such as OMB Circular A-133, 
which requires every organization receiving $500,000 in aggregate 
Federal grants to submit to annual financial audit. The results of 
these audits are used in periodic grantee reviews to identify grantees 
that may present a risk to the control or integrity of fund use.

                          SUBCOMMITTEE RECESS

    Senator Harkin. And with that, again, Madam Secretary, 
thank you and the subcommittee will stand recessed.
    [Whereupon, at 11:37 a.m., Wednesday, March 30, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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