[Senate Hearing 113-591]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 113-591
 
                  NOMINATION OF SYLVIA MATHEWS BURWELL
=======================================================================

                                HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                                 ON THE
                                 
                             NOMINATION OF

                SYLVIA MATHEWS BURWELL, TO BE SECRETARY,
                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                               __________

                              MAY 14, 2014

                               __________
                               
                               
                               
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                          COMMITTEE ON FINANCE

                      RON WYDEN, Oregon, Chairman

JOHN D. ROCKEFELLER IV, West         ORRIN G. HATCH, Utah
Virginia                             CHUCK GRASSLEY, Iowa
CHARLES E. SCHUMER, New York         MIKE CRAPO, Idaho
DEBBIE STABENOW, Michigan            PAT ROBERTS, Kansas
MARIA CANTWELL, Washington           MICHAEL B. ENZI, Wyoming
BILL NELSON, Florida                 JOHN CORNYN, Texas
ROBERT MENENDEZ, New Jersey          JOHN THUNE, South Dakota
THOMAS R. CARPER, Delaware           RICHARD BURR, North Carolina
BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
SHERROD BROWN, Ohio                  ROB PORTMAN, Ohio
MICHAEL F. BENNET, Colorado          PATRICK J. TOOMEY, Pennsylvania
ROBERT P. CASEY, Jr., Pennsylvania
MARK R. WARNER, Virginia

                    Joshua Sheinkman, Staff Director

               Chris Campbell, Republican Staff Director

                                  (ii)




                            C O N T E N T S

                               __________

                           OPENING STATEMENTS

                                                                   Page
Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee 
  on Finance.....................................................     1

Hatch, Hon. Orrin G., a U.S. Senator from Utah...................     3

Rockefeller, Hon. John D., IV, a U.S. Senator from West Virginia.     6

                         CONGRESSIONAL WITNESS

Coburn, Hon. Tom, a U.S. Senator from Oklahoma...................     5

                         ADMINISTRATION NOMINEE

Burwell, Hon. Sylvia Mathews, nominated to be Secretary, 
  Department of Health and Human Services, Washington, DC........     9

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Burwell, Hon. Sylvia Mathews:
    Testimony....................................................     9
    Prepared statement...........................................    53
    Biographical information.....................................    56
    Responses to questions from committee members................    68

Coburn, Hon. Tom:
    Testimony....................................................     5

Hatch, Hon. Orrin G.:
    Opening statement............................................     3
    Prepared statement...........................................   155

Rockefeller, Hon. John D., IV:
    Opening statement............................................     6

Wyden, Hon. Ron:
    Opening statement............................................     1
    Prepared statement...........................................   158

                                 (iii)


                      NOMINATION OF SYLVIA MATHEWS



                  BURWELL, TO BE SECRETARY, DEPARTMENT


                      OF HEALTH AND HUMAN SERVICES

                              ----------                              


                        WEDNESDAY, MAY 14, 2014

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 2:19 p.m., 
in room SH-216, Hart Senate Office Building, Hon. Ron Wyden 
(chairman of the committee) presiding.
    Present: Senators Rockefeller, Schumer, Stabenow, Cantwell, 
Nelson, Menendez, Carper, Cardin, Brown, Casey, Warner, Hatch, 
Grassley, Crapo, Roberts, Enzi, Cornyn, Thune, Isakson, 
Portman, and Toomey.
    Also present: Democratic Staff: Joshua Sheinkman, Staff 
Director; Jocelyn Moore, Deputy Staff Director; Michael Evans, 
Chief Counsel; Elizabeth Jurinka, Chief Health Policy Advisor; 
Anderson Heiman, Tax Policy Analyst; and Juan Machado, 
Professional Staff Member. Republican Staff: Chris Campbell, 
Staff Director; Kimberly Brandt, Chief Counsel, Oversight; Jay 
Khosla, Policy Director; Tony Coughlan, Tax Counsel; Nicholas 
Wyatt, Tax and Nominations Professional Staff Member; and Anna 
Bonelli, Detailee.

   OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM 
             OREGON, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The Finance Committee will come to order.
    The Finance Committee meets today to discuss the nomination 
of Sylvia Mathews Burwell to be the Secretary of the Department 
of Health and Human Services. If one thing has become clear in 
the month since the President announced Ms. Burwell's 
nomination, it is that she is tremendously well-respected, not 
only by those she has led and worked with in the 
administration, but by Democrats and Republicans in the 
Congress as well.
    That should not come as any big surprise. Last year, the 
Senate confirmed her nomination to be the Director of the 
Office of Management and Budget by a vote of 96-0. That was a 
big and well-deserved bipartisan endorsement, and Ms. Burwell's 
accomplished background and long record of results show why she 
has earned that respect.
    She is a graduate of Harvard and Oxford, where she was a 
Rhodes Scholar. She served in the Clinton administration as a 
top economic advisor to the President and the Secretary of the 
Treasury, and she has years of experience in the non-profit 
sector. First, as chief executive officer and then as president 
of Global Development at the Gates Foundation, she led efforts 
to address some of the most pressing global health challenges 
of our times. As the head of the WalMart Foundation, she was a 
tireless advocate for the veterans' hiring programs, and she 
was a leader in the fight against hunger in our communities.
    Ms. Burwell has also been a steady hand and an effective, 
communicative leader at the Office of Management and Budget. 
She helped navigate the difficulties of the government shutdown 
last fall, and, in the year that she has served as Director, 
the Federal deficit has continued to plummet.
    There is also one other important fact to keep in mind as 
the committee considers Ms. Burwell's nomination. That is, you 
simply cannot lead this generation's Office of Management and 
Budget without being thoroughly steeped in health care. Health 
care is simply the biggest structural challenge in the budget 
and an essential part of the job.
    Now, everyone understands the biggest task ahead for Ms. 
Burwell, should she be confirmed as HHS Secretary. The 
Affordable Care Act will be her central focus each day she 
serves as Secretary. My view is, there are plenty of ways both 
parties can work together to improve the law and ensure America 
does not go back to the days when health care was just for the 
healthy and the wealthy.
    Now, there is also a great deal of promising news about 
Medicare for Ms. Burwell to build on as Secretary. For example, 
Medicare's rate of spending growth is slowing. According to the 
latest data, spending went up by only 1.9 percent over a 2-year 
period. That is slower than the overall economy, and it is far 
behind the historic pace. The cause of lower premiums and a 
stronger, more secure future for Medicare is significantly 
boosted by these developments.
    With the bipartisan support of members of this committee, 
there have been big improvements in Medicare transparency. As 
the country's largest single purchaser of health care, Medicare 
has to lead the way in making sure that all consumers and 
taxpayers have the information they need to get the best value 
for their dollar. We look forward to working with you, once you 
are confirmed, to continue that effort, Ms. Burwell.
    Next, the Congress has never been closer to repealing the 
flawed Medicare physician payment system and replacing it with 
bipartisan reforms that reward the quality of care rather than 
the quantity of care. I am looking forward to working with you 
again, Ms. Burwell, once you are confirmed, to fix the Medicare 
physician payment system this year. After that is accomplished, 
the committee looks forward to working with you on what I view 
as the single biggest challenge for Medicare's future, that is, 
dealing with chronic disease.
    Outside of the health care arena, the committee is going to 
have to maintain its close relationship with the HHS Secretary 
on issues like foster care, child welfare, and family support 
services. Today I will wrap up by congratulating our nominee 
and thank her for joining the committee today. The Senate's 96-
0 confirmation vote for your current role was clear evidence 
that you are respected for your commitment to work with people 
and for your thoughtfulness.
    Following a thorough review, I hope to have your nomination 
approved by the committee and the Senate as quickly as possible 
and with equally strong bipartisan support.
    [The prepared statement of Chairman Wyden appears in the 
appendix.]
    The Chairman. Let me recognize Senator Hatch now.

           OPENING STATEMENT OF HON. ORRIN G. HATCH, 
                    A U.S. SENATOR FROM UTAH

    Senator Hatch. Well, thank you, Chairman Wyden. I 
appreciate you convening this hearing to consider the 
nomination of Sylvia Mathews Burwell to serve as Secretary of 
the Department of Health and Human Services. I am very pleased 
that you have one of my all-time favorite Senators here to 
testify for you, really a doctor in the Senate, who has served 
the Senate very, very well.
    I want to thank Director Burwell for her willingness to 
serve in this capacity. It is a tough job. Director Burwell, 
let me start by saying something that I think you already know. 
If you are confirmed to this position, you will have your work 
cut out for you. The size and scope of the Department of Health 
and Human Services surpasses that of any other Federal Cabinet-
level department.
    The HHS fiscal year 2014 budget totals almost $1 trillion, 
which makes it larger than that of even the Department of 
Defense, basically double what the Department of Defense is. 
More importantly, HHS touches the lives of hundreds of millions 
of people. From cradle to grave, HHS oversees many programs, 
from finding and approving new treatments for diseases to 
providing a safety net for those who have run out of other 
options. The agencies under the HHS umbrella include the 
National Institutes of Health, the Food and Drug 
Administration, the Centers for Disease Control, and the 
Centers for Medicare and Medicaid Services, or what we call 
CMS.
    CMS alone is the world's largest health insurer, with an 
annual budget of roughly $860 billion. While I believe you have 
the qualification to do the job, there is still much you will 
need to do in order to assure members of this committee that 
HHS is heading in the right direction and that your leadership 
will help steer the agency through the very turbulent times 
that we know lie ahead.
    One of the greatest challenges facing HHS is shoring up the 
Federal and State-based health insurance exchanges. Ensuring 
that the exchanges are operating efficiently and effectively 
will be one of your biggest challenges. Recent reports of the 
numerous issues being faced by the State exchanges attempting 
to implement the law have been cause for great concern among 
many members of Congress, including some on this committee.
    As part of the Affordable Care Act, States are required to 
have an online health care exchange where citizens can go and 
shop for health insurance. States have the option of either 
building their own exchange, using the exchange provided by the 
Federal Government, or a hybrid. Every State is given a $1-
million grant for the purpose of determining what type of 
exchange they would implement. Additional grants were given in 
stages for those States that are building all or part of their 
own health care exchange. HHS also awarded seven early 
innovator grants to States that quickly decided to build their 
own exchange, in order to help support the development and 
implementation of the necessary IT systems.
    In total, HHS paid $4.7 billion to help States build their 
exchanges. What is troubling is that at least seven States and 
the District of Columbia failed to build a successful website 
and exchange. These seven failing States received more than 
$1.25 billion from HHS to build their exchanges. That is a huge 
amount of taxpayer dollars that has apparently been spent with 
little or no accountability.
    Now, many of these States are looking to rebuild their 
systems and are seeking additional funds from the Federal 
Government. That is why today I am joining Senator Barrasso in 
introducing the State Exchange Accountability Act. This bill 
requires States that operated a State-based exchange in 2014 
and then decided to abandon that exchange to repay all of the 
establishment and early innovator grants that they received 
from HHS.
    In addition to overseeing this massive new expansion of 
benefits the exchanges have created, you are also going to be 
charged with helping to ensure the longevity and the solvency 
of the existing Medicare trust fund, which is projected to go 
bankrupt in 2024. All told, between now and 2030, 76 million 
baby boomers will become eligible for Medicare. Even factoring 
in deaths over that period, the program will grow from 
approximately 47 million beneficiaries today to roughly 80 
million beneficiaries in 2030. Maintaining the solvency of the 
Medicare program while continuing to provide care for an ever-
increasing beneficiary base is going to require creative 
solutions and a skillful Secretary at the helm working with 
CMS, and I am counting on you to be that.
    Finally, one of the most important responsibilities that 
you have to this committee is to be responsive. I have heard 
several commitments made by nominees in these confirmation 
hearings about providing timely and substantive responses. More 
often than not, I have been deeply disappointed. So I hope 
today that your commitment will stand the test of time beyond 
your confirmation, because words and promises matter a great 
deal to me, and I think to other members of the committee. I 
hope you will be up to that challenge.
    Like I said, overseeing the complex infrastructure of a 
department like HHS is not a job for the faint of heart. 
Naturally, I wish you the best of luck as you work to address 
these challenges and as you continue going through the 
confirmation process. You are going to need all the luck you 
can get. But I am grateful to people like you who are willing 
to take on these tough responsibilities and lend your best 
expertise to them. We are grateful that you are willing to 
serve.
    Thanks, Mr. Chairman.
    The Chairman. Thank you, Senator Hatch. As we have done 
ever since Chairman Baucus went to China, you and I will be 
working very closely in a bipartisan way on this, and I thank 
you for it.
    Senator Hatch. I think we will. Thank you.
    [The prepared statement of Senator Hatch appears in the 
appendix.]
    The Chairman. Director Burwell, before we get started with 
your testimony, it is a Finance Committee tradition to have the 
nominee introduce any family members who are here today, so why 
don't you do that?
    Ms. Burwell. Thank you. Thank you, Mr. Chairman. I would 
like to introduce my husband Stephen Burwell, my sister 
Stephanie O'Keefe, and two very good old friends, Jackie Long 
Ebert and Linda Lurie. Thank you.
    The Chairman. Thank you. We are glad you are here. As 
Senator Hatch noted, public service is not, for a family, 
exactly for the faint-hearted either, so we are glad that all 
of you are here.
    Now, the ever-gracious Chairman Rockefeller, who is here to 
welcome another West Virginian, has as always been very 
gracious. Dr. Coburn is on a tight time schedule. Dr. Coburn, 
why don't we begin with you, and then we will have an 
introduction from home-State Senator, Senator Rockefeller.

                 STATEMENT OF HON. TOM COBURN, 
                  A U.S. SENATOR FROM OKLAHOMA

    Senator Coburn. Thank you very much, Mr. Chairman. First of 
all, let me say what a privilege and an honor it is to be able 
to introduce Ms. Burwell to the committee. I have worked with 
her for the last year or so and prior to her confirmation as 
OMB Director.
    I actually look for people who have strong traits, and the 
fact that she is willing to make this family sacrifice--and it 
is a family sacrifice--to me is very reassuring for us as a 
country.
    I thought I would talk about five areas of Sylvia Burwell 
that maybe not everybody else knows. The first is, she is 
competent. To me that says something, because so often we have 
people placed in positions in Washington who are not competent 
for the task at hand.
    The second thing is, she has an outstanding character, and 
I have experienced that over the past year in working very 
closely with her and the people at OMB on the problems that we 
have seen at Homeland Security, both on cyber and other areas. 
So the fact is, when you have somebody who is competent and 
also has strong character, you find a way to get past your 
differences to try to solve problems.
    Third, as Senator Hatch mentioned, responsiveness is a key 
for the Congress. I have to tell you, I found her remarkably 
responsive. My partner at Homeland Security, Tom Carper, has as 
well. That comes along with her commitment. The fact is, she is 
going to be committed to do the right things and to keep 
Congress involved. I will let her answer those questions on her 
own.
    Another trait that I think will make her an outstanding 
Secretary is, she is a great listener. Even when she has her 
mind made up, which sometimes happens, she will listen to 
another point of view to gain information that she might not 
have. That is a characteristic too often that we do not see as 
members of Congress and members of the administration, whether 
they are Republican or Democrat.
    Then finally, because she is from West Virginia, Hinton, a 
town of 3,000 people, she comes to Washington with a lot of 
common sense. My favorite quote is, ``There's a thimble and a 
half full now of common sense in Washington, and she's the 
half.''
    So it is my pleasure to recommend her to my colleagues on 
the Finance Committee. I will support her nomination on the 
floor, and I will do everything to help her be successful at 
Health and Human Services, if she is so given that 
responsibility. I thank the committee.
    The Chairman. Senator Coburn, thank you very much for those 
powerful words and the focus on competence, common sense, and 
accountability. That is really the coin of the realm in terms 
of a nominee, so we are very pleased that you are here. I know 
you are on a tight time schedule, and we will excuse you at 
this time.
    Chairman Rockefeller is here for another West Virginian.

       OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
               A U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. I too want to thank Senator Coburn. 
Ms. Burwell, it is not usual to get introduced by him in such 
terms. He has a very strict judge of character and has a strong 
moral aspect to everything he does. I am very happy that he has 
introduced you. It is an easy thing for me to do.
    But first I have to point out something of interest. The 
Commerce Committee was going to have a really interesting 
hearing in this room today on the NCAA and the whole concept of 
the student athlete, or is that really athlete student, and 
what are we doing, what is the NCAA doing, what are 
universities doing, to make sure that athletes are getting the 
academic training that they need to. I think it is going to be 
a very interesting hearing.
    The reason we were going to come to this room is because it 
was going to be absolutely packed, because it is a subject of 
great controversy, and the NCAA is very unhappy that we are 
having the hearing. But then we were pushed aside by a higher 
order.
    But for today's hearing, actually this room is not even 
half full. What makes me happy about that is, I think there is 
a general understanding in this body, and certainly on this 
committee, that you are that really competent person who 
relishes challenges and can balance challenges with family 
responsibilities. I mean, you are just that way, and that is 
one of the wonderful things about growing up in a small 
community.
    So I introduced you for the first time 16 years ago, and 
you were becoming Deputy Director of the OMB at that point. 
More recently, I introduced you again to become Director, and 
that was easily done. Today, I could not be more proud to speak 
for you and to present you to this committee.
    I have done this a lot with people, but I do not think I 
have ever been as proud of the person, and as sure of my 
feelings, as I am about you. I have respect for your 
intelligence, for your integrity, what I would call a ferocious 
integrity. You have a work ethic beyond contemplation, but all 
the while you are relaxed. You appear relaxed, anyway.
    As Senator Coburn said, you do listen. You are a very good 
listener. That is terribly important. The business of writing 
letters you will do, not because you have to do it but because 
it is in your interest to do it, and you will find a way to do 
it. I think you are going to be a superb, superb Secretary.
    The Department is absolutely gargantuan in size, and it 
affects millions and millions of Americans. It is food and drug 
supply, protection of our country from outbreaks of disease or 
bio-terror attacks, the medical research that we rely on for 
cutting-edge treatments but which we are under-funding, and the 
Federal investments in global health, which I think most people 
do not know that much about and do not necessarily associate 
with your position.
    I think it is impossible to overstate how important it is 
that the Secretary of HHS have that degree of organizational 
intuitive skill, not that they have to work at it hard, but it 
is just borne with them, and it is part of how they do things. 
People come to understand that, and they draw people to them 
because of, in the words of Senator Coburn, competency. 
Competency is a cherished commodity. When people are in a very 
high position and have that, people want to come work for them. 
People want to work harder for them. The country feels prouder 
of them, and maybe even the press is nice to them.
    So anyway, here you are, a proven manager, both public and 
private, and so much the right person for this job that it is 
just a clichee to even say it. Yes, the fact that you are a 
proud native of Hinton, WV, 3,000 people, is very important. It 
is very important in character formation and in one's world 
view. In that case, not a large world view, but in the currents 
of your life, a total world view.
    I have known Sylvia her entire life and her wonderful 
parents, Cleo and Bill, and her family and friends from Hinton. 
I have attended church with your family. I was at your wedding 
reception. You interviewed me, I think you told me, when you 
were 6 years old on the Hinton County courthouse steps. I have 
no idea what the question was, but I probably did not answer it 
very well. I was probably terrified. [Laughter.]
    But the effect then is that I just have a deep and abiding 
feeling about you and, because of you, your family. I think 
your family and you come together in a perfect way in American 
life.
    You are brilliant--you will not say that, so I will have to 
do it for you--as has been indicated--Harvard, Rhodes Scholar--
and yet somehow you remain humble, always hardworking.
    Again, I use this term ``ferocious integrity,'' which means 
everything to me. Sort of the central devotion of your purpose 
of public service is to help people better their position in 
life. You do not focus just on one group, but everybody has to 
have a better shot in life, and you are possessed by that 
public passion. That had to come partly from your grandparents, 
because they got here and they somehow helped instill that in 
you.
    You could have made a fortune when you graduated from 
Harvard and gone to anyplace in the world, any law firm. You 
did not. You headed directly into public service. You spent the 
majority of your life in public service, which is filled with 
controversy and not enormously high wages, a lot of 
frustration, and a lot of sleepless nights.
    When you have not been doing that, you have been working 
for organizations that were trying to do that: the Gates 
Foundation and out in Bentonville, that foundation. In both 
cases, you were working on a worldwide basis, and when we met 
in my office we were talking about one of the things I want to 
work on after I leave the Senate, which is on baby teeth, the 
health of teeth, which most people overlook but which is 
absolutely essential in the morale and self-confidence 
development of any young person, and in Appalachia is a real 
problem. You have spent a great deal of your time at the 
WalMart Foundation doing exactly that.
    When it comes down to it, you want people to have health 
insurance. You want them to have that peace of mind. I do not 
need to do this, but I am going to do it because I so enjoy 
doing it. Your service in the Federal Government is absolutely 
unmatched--the Clinton administration Staff Director for the 
National Economic Council. Well, wow. I mean, that is complex 
stuff. Not that anybody could tell you what goes on there, but 
the future of the country depends enormously on what does go on 
there.
    Chief of Staff to Secretary Robert Rubin, Deputy Chief of 
Staff to the President of the United States, Deputy Director of 
the Office of Management and Budget, and then Director of that 
agency--you were central to crafting the Clinton budget in the 
late 1990s, which led to budget surpluses for 3 years in a row, 
something almost impossible to imagine, and enormous growth 
economically in our country.
    You learned--I have down here through your work with the 
Clinton administration, but that is nonsense. You just worked 
because of the way you are; you could work across the aisle 
with other people. It is your instinct to try to find common 
ground.
    You are very, very tough. I am thinking of the example that 
we discussed about the respirable dust decision in underground 
mines. I wanted it to be one, it is now two--I apologize to the 
audience for not going into this--and Ms. Burwell did the right 
thing and she came down at 1.5, which was the first time in 41 
years that the U.S. Government had addressed the problem of 
breathable dust--or unbreathable and die dust--leading to Black 
Lung. I mean, it was a remarkable decision. You made that 
decision, and, because of it, it is now in effect.
    Your philanthropic works speak for themselves. You are 
going to be speaking for yourself. I just cannot think of 
anybody more perfect to head HHS. There were so many bumps in 
the road. I think that is innate, and we discussed that--
enormous programs with vast consequences. I do not think it 
ends.
    I think there will be a period of 15, 20 years before 
things kind of settle out and the various nooks and crannies 
are taken care of and people feel comfortable. All of a sudden, 
they will just realize they feel comfortable, and then you just 
get down to the business of doing health care.
    So we need you, Sylvia Mathews Burwell, very, very much. I 
think you can gather from my statement that I am probably going 
to vote for you. [Laughter.]
    But you are not just about budgets. You are about people, 
and you are about fighting for people whom other people will 
not fight for, and you are about fighting for people who could 
use a little help, and you are fair to people who do not need 
any help. You are just a fair person, a tough manager, and 
probably the smartest person in the city.
    Mr. Chairman, I am proud to present to you Sylvia Mathews 
Burwell.
    The Chairman. Thank you, Chairman Rockefeller. That was a 
wonderful introduction. I will tell you, Director Burwell, I am 
really curious what you interviewed Chairman Rockefeller on 
when you were 6. [Laughter.] So perhaps we will learn that 
secret one day.
    Now at this point, we would like you to deliver your 
testimony, then we have four standard questions for nominees 
that we will, I think, be able to deal with quickly, and then 
we will begin questions from the Senators. So we will make your 
prepared remarks a part of the record in their entirety, and 
please proceed.

   STATEMENT OF HON. SYLVIA MATHEWS BURWELL, NOMINATED TO BE 
SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES, WASHINGTON, 
                               DC

    Ms. Burwell. Thank you, Chairman Wyden and Ranking Member 
Hatch, members of the committee. I want to thank you for 
inviting me here today. I am honored that President Obama has 
nominated me for the Secretary of Health and Human Services, 
and it is a privilege to appear before this committee.
    I want to thank Senator Rockefeller and Dr. Coburn for 
their kind words. I am honored to be introduced by two such 
extraordinary public servants who have both spent their lives 
helping others and delivering for the American people.
    I am especially grateful to my husband Stephen and our 
children for their tremendous support. And, while my parents 
could not be here with us today, I want to recognize them for 
their instilling within me and my sister the enduring value of 
public service.
    As a second-generation Greek immigrant, I was raised to be 
thankful for the tremendous opportunities this great Nation 
offers and to appreciate the responsibilities that come with 
those opportunities. Throughout my childhood in Hinton, WV, my 
father, an optometrist and small business owner, and my mother, 
a teacher, set a great example for me and my sister through 
their engagement in service through our community and our 
church. It is that example that is an important part of why I 
stand here today.
    Whether in the public or private sector, working across a 
range of issues, I focus my work on three things: building 
strong teams, strengthening relationships, and delivering 
results. In my role as OMB Director, I have worked closely with 
members of this committee and others to support efforts to 
return the budget process to regular order and drive towards 
progress on issues that we all care deeply about.
    If confirmed, I look forward to working alongside the 
remarkable men and women of the Department of Health and Human 
Services to build on their work to ensure that children, 
families, and seniors have the building blocks of healthy and 
productive lives. These issues are fundamental to all of us, 
whether it is the chronic condition of a child we love or the 
safety of the food we eat every day, so I respect and 
appreciate the importance of the challenges before us.
    As we meet here today, scientists and researchers at the 
National Institutes of Health are working to find cures for 
some of the world's most serious diseases, and experts at the 
Centers for Disease Control and Prevention are working to 
prevent them from spreading. The Food and Drug Administration 
is protecting the food we eat and the medications our doctors 
prescribe us. Our parents and grandparents rely on the Centers 
for Medicare and Medicaid Services, and millions of our 
children benefit from Head Start. Thanks to the Administration 
for Community Living, millions of Americans are living with 
dignity in their own communities. The Department's work to 
ensure accessible, affordable, quality health care through the 
implementation of the Affordable Care Act is making a 
difference in the lives of our families and our communities, 
while strengthening the economy. Together, all this work forms 
the foundation of a stronger middle class, a more prosperous 
economy, and healthier communities.
    Mr. Chairman and members of this committee, thank you again 
for the invitation to speak with you today. I have valued the 
conversations that we have had over the course of the past 
several weeks, and I am hopeful that we will have the 
opportunity to continue to work together closely in the months 
ahead to deliver impact for the American people.
    With that, I would be pleased to answer your questions. 
Thank you.
    [The prepared statement of Ms. Burwell appears in the 
appendix.]
    The Chairman. Director Burwell, thank you. We have several 
questions that are essentially standard questions for all 
nominees, so let me just go through those now.
    Is there anything that you are aware of in your background 
that might present a conflict of interest with the duties of 
the office to which you have been nominated?
    Ms. Burwell. No, sir.
    The Chairman. Do you know of any reason, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Ms. Burwell. I do not.
    The Chairman. Do you agree without reservation to respond 
to any reasonable summons to appear and testify before any duly 
constituted committee of Congress, if confirmed?
    Ms. Burwell. I do.
    The Chairman. Do you commit to provide a prompt response in 
writing to any questions addressed to you by any Senator of 
this committee?
    Ms. Burwell. Yes, sir.
    The Chairman. Very good.
    What we will do now, colleagues, is we will all proceed 
with questions, and we will go with the 5-minute round.
    Let me, if I might, start with a question about another 
priority of the committee--we have already identified that we 
will have many questions about the Affordable Care Act. That 
question is about fixing this broken-down system of reimbursing 
physicians under Medicare. What has happened is, we have a 
system that is poorly coordinated and does not reward quality.
    What the Congress does is just put patch after patch after 
patch on it. We are now on something like our 17th patch. 
During the most recent debate, Senator Murphy was in the chair 
when we were discussing this, and he is the youngest U.S. 
Senator. I looked up and said, I do not want, when Senator 
Murphy is eligible for Medicare, for us to still be patching 
and patching and patching some more.
    So the President, in his budget, made a commitment to 
working with the Congress to reform this, and particularly to 
repeal the SGR and replace it with a system that would reward 
coordinated care and reward quality. Our colleague Senator 
Hatch, in my view, deserves a great deal of credit for this 
effort. If confirmed, will you commit to repealing and 
replacing the current broken Medicare reimbursement system for 
physicians before the end of this year?
    Ms. Burwell. Senator, I am very glad that you have raised 
the issue, and I am very glad that in my meetings--and this is 
something that is bipartisan--this issue has come up and that, 
even though there is a fix that takes us till March, people are 
interested and excited about a permanent fix.
    There is bipartisan legislation, bicameral support, for 
changes that can help get us there. You yourself have played a 
leadership role in proposals that will make a difference. If I 
am confirmed, and in my current role, I am excited about the 
opportunity that we can work together to get a permanent 
solution that has both reforms which are important and a 
permanent solution that helps our physicians have 
predictability through time. So for those reasons, that is 
something that I would look forward, if confirmed, to working 
on, and in my current role am excited to work on as well.
    The Chairman. Thank you. It is clearly urgent business, 
because we can get it right now at rock-bottom prices. I mean, 
it is only going to get more and more expensive, so we 
appreciate your commitment on that.
    Let us turn to chronic disease. There has been bipartisan 
interest in this committee on it. I see my colleague Senator 
Isakson; Senator Toomey and Senator Bennet have had a great 
interest in this.
    The reality is, Medicare in 2014 is dramatically different 
than Medicare when the program began in 1965. It is largely 
about cancer and diabetes and stroke and heart disease and 
Alzheimer's. So, if a senior breaks their ankle, and we 
certainly hope that does not happen, that is something like 15 
percent of Medicare. It is really all about chronic disease.
    I would be interested in your thoughts about how Medicare 
can step up and address this extraordinary challenge, because 
this is really going to be what Medicare is all about. I am 
very appreciative of my colleague from Georgia. He and I have 
introduced a bill which my colleague, Senator Isakson, 
appropriately named the Better Care, Lower Cost Act. 
Congressman Welch and Congressman Paulsen in the other body 
have been supportive as well. As I mentioned, Senator Toomey, 
Senator Bennet, and a number of Senators have interest in this.
    What is your take about the next best steps to address what 
is going to be the premier challenge for Medicare in the years 
ahead?
    Ms. Burwell. The issue of chronic disease is one that I 
actually think cuts across the entire Department. Certainly 
Medicare is where it is being paid for, and a big part of the 
delivery of that service is with regard to chronic care. But I 
actually think one also needs to back up to NIH and the issues 
of research and all through the issues of CDC and actual 
delivery, as well as the Health Resources and Services 
Administration, in terms of how we train our providers.
    So the issue of chronic disease, I think, is one of the 
things--as we think about many health care issues, but 
particularly one as large and influential as this--that you 
need to think about across the pieces that are within the 
Department so that we are getting the right solutions in place, 
the right data and analytics that show us how we can work on 
these issues at the front end of them, before they get to the 
point where they are costing us so much.
    We work on the delivery systems in terms of how we, as both 
communities and directly within hospital systems and insurance 
systems, are providing that care. So I think Medicare is an 
important part of it--and the tools that we can use in 
Medicare, because it is such a large and influential part of 
the system--but I think we have to think about it across a 
number of different areas, including with providers.
    The Chairman. Let me see if I can get one other question 
in, because I am in effect starting the questioning. Obviously 
with the ACA, it is all about improving access, improving 
quality, decreasing costs. But I think, as with any landmark 
law, there are challenges.
    Since we are starting now, I think it would be helpful if 
you could just briefly outline--because you are going to get 
plenty of other questions, we know--what are going to be your 
priorities in terms of ensuring the success of the Affordable 
Care Act?
    Ms. Burwell. With regard to the Affordable Care Act 
specifically, when I think about the Act, there are three main 
things that seem to be, for me, the North Stars: one is access; 
the second is affordability, and that is affordability for the 
individual, affordability for actually the government in terms 
of all that we spend that has been mentioned, as well as 
affordability for our economy; and the third issue is quality.
    When I think about the Act and the implementation of it, 
what I want to do is, if I am confirmed, work to try to 
maximize against all three of those areas and think about the 
ways that we can do better.
    The Chairman. Senator Hatch?
    Senator Hatch. Well, thank you, Mr. Chairman.
    Ms. Burwell, one of the most sacred responsibilities that 
we as public servants have is to safeguard the hard-earned 
taxpayer dollars that American families entrust to us. Now, 
seven States, including the District of Columbia, are having a 
dismal time building their own exchanges. In fact, the failure 
in some of these States is nothing short of spectacular.
    Two of the States are abandoning their broken websites. 
Based on the most recent reports, these States have received 
more than $1.25 billion to plan and build their exchanges. Now, 
some of these States are looking for additional Federal funds 
to continue their failed experimentation, at least in my view.
    So I have two very simple questions to ask you, and I would 
really appreciate a ``yes'' or ``no'' answer to these, if you 
can. First, do you believe that these States that have so 
negligently managed their funds should be required to reimburse 
the taxpayers for their incredible failures? If you could say 
``yes'' or ``no,'' I would appreciate it.
    Ms. Burwell. Senator, with regard to the specifics of each 
of the State cases, that is something, if confirmed, I would 
want to learn about. I think what I would say ``yes'' to is 
that we need to understand and, where the Federal Government 
and the taxpayer had funds misused, we need to use the full 
extent of the law to get those funds back for the taxpayer.
    Senator Hatch. All right. The second question is, can you 
give me and the American taxpayers a public commitment today 
that HHS will not give any more dollars to those failed 
exchanges for more failed experiments?
    Ms. Burwell. Senator, with regard to the specifics of how 
the exchanges and those funds go forward, I guess what I would 
do is right now--because I am not familiar with the specifics 
because I am not there--there are three things: (1) we have to 
understand what went wrong; (2) when we do understand that, as 
I said, we need to go to the full extent of the law, if there 
are contractors or others that have misled through their 
contracts or other things, to fully recover; and (3) I think we 
need to make sure that we both learn from the mistakes of the 
exchanges that are not working and learn from the exchanges 
that are, such as Washington State's where Senator Cantwell is 
from.
    Senator Hatch. All right.
    Now, your first and foremost responsibility as an appointed 
official is to be accountable to Congress and the American 
people. Now, one important way Congress fulfills its obligation 
to the taxpayers is by asking for information about your 
Department's activities. Over the past year, we have sent at 
least five letters to HHS that have gone unanswered. Responses 
to questions for the record take months. In fact, we now need 
action-forcing events like this confirmation hearing to get 
answers, which are often incomplete.
    My colleagues all share similar frustrating experiences. So 
I have, again, two straightforward questions to you: (1) do I 
have your public commitment today that you will respond to our 
inquiries in no more than 30 days?
    Ms. Burwell. Senator, with regard--
    Senator Hatch. Unless you ask us for extra time.
    Ms. Burwell. Senator, you have my commitment that, with 
regard to being responsive, that is something I consider 
important. And I think, hopefully, you have heard from your 
colleagues who have had the chance to work with me in the past 
year that it is something I prioritize in terms of 
responsiveness and communication.
    Senator Hatch. I was very impressed with what Senator 
Coburn had to say, and I agree with that, by the way, and will 
appreciate that.
    Now the second question is, what, in your opinion, should 
be our recourse as a committee if this public commitment is not 
kept?
    Ms. Burwell. Senator, with regard to, if there are 
frustrations, and if I am confirmed, I hope that you would pick 
up the phone and call me.
    Senator Hatch. All right.
    Ms. Burwell. One of the things that I think actually is a 
very important part of working and getting to a solution, as I 
think Dr. Coburn said, is we do not always agree. But if we can 
have conversations and those conversations can be specific, I 
think that is something we can use to figure most things out, 
even at times when we may not agree.
    Senator Hatch. Thank you. Director Burwell, to date, the 
administration has made at least 22 unilateral changes to 
Obamacare without consulting any of us up here in Congress. 
Most recently, HHS announced it was raiding a Medicare fund to 
provide extra payments to Medicare Advantage plans to forestall 
benefit cuts. On April 10th, I asked Secretary Sebelius whether 
or not there would be any more changes to Obamacare, and her 
answer, in my opinion, was not very reassuring.
    So again, I have two questions for you. Will you commit to 
considering Congress in obtaining legislative changes to the 
law in the future?
    Ms. Burwell. Senator, with regard to the issues of 
implementation, when there are things in place--I think the 
core objective is common-sense implementation and improvements 
within the context of the law, and, where one needs changes 
with the law, we should seek that. In the President's current 
budget, actually we do seek changes, and they have to do with 
small businesses and some of the tax issues. That is a place 
where we think that we can improve that, and we need the 
support of the Congress in order to do that.
    Senator Hatch. All right. My last question: if you do 
expect more changes or delays to Obamacare, what will they be?
    Ms. Burwell. Senator, with regard to the implementation of 
such a large and complex thing that is such a large part of our 
economy, I am not sure that I can sit and predict. But I think 
what is important, as one moves along and is implementing, is 
listening and learning as you go, making those common-sense 
changes within the context of the law and, where there are 
changes that require legislative changes, to work with the 
Congress to make them.
    It is a very complex system. It was complex before the 
Affordable Care Act. Our health care system in the United 
States is a large, complex system. The law itself will 
hopefully make, and is making, improvements, but it is a 
complex system that I think will be evolutionary as we learn. 
One of the things that I am hopeful about, if I am Secretary, 
is that listening and learning and hearing and making changes 
that are appropriate is something that one would want to do.
    Senator Hatch. Well, thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Rockefeller?
    Senator Rockefeller. Director Burwell, there is an 
understandable rage for lowering costs. I remember--Ron, I am 
not sure if you were here or not--when Dick Darman was in your 
present position, and he came before the Finance Committee at 
that time to talk about the runaway costs of health care.
    He was sheet-white. He had sort of disappeared for a week. 
That was the impression; nobody knew what he was going to say 
or could ask him any questions. Then he came and he was sheet-
white, and he just predicted--he had this horrible, dire 
prediction of the cost of health care eating everything up and 
squashing other good programs, which leads to my question. 
Making things cost-
effective and cutting costs, lowering costs, which Democrats 
love to boast about, runs sometimes--let us take, for example, 
the dual-
eligibles--into the providing of adequate and good care.
    That is sort of a sloppy, philosophical thing to say, but 
there come very difficult decisions when it is more expensive 
to take care of certain kinds of people, certain kinds of 
illnesses. When we lifted the annual cap and then the lifetime 
cap, that, you see, was quite the opposite. That was saying, 
oh, it is important to spend more money because having really 
good health care for people is what we are here for.
    So those things are in conflict with each other. I wonder 
if you have sort of an operating philosophy?
    Ms. Burwell. I think there are difficult choices, and I 
think that is a key and operative word: choices. At the Office 
of Management and Budget, we have had the opportunity, under 
what are tight budget levels, our current 2015 levels--when you 
take into account FHA receipts and the growth of veterans' 
benefits, our levels are the same as last year.
    So one of the things I think about, when I think about 
making these difficult choices, is getting as many of the facts 
as one can and making sure that you lay out the different 
choices as best you can. And some things are hard to compare 
and choose between, but I think that is part of putting budgets 
together and part of the kinds of choices that we are going to 
have to make in the health care space, understanding quality as 
well as understanding cost.
    Senator Rockefeller. You have been Director of OMB, which I 
think one could also say is one of the most difficult positions 
around. Your life is full of choices, and many of them are ones 
that only you can make, in effect. So you have your experience 
as Deputy Director and Director. It is your inclination--when 
you have difficult problems, you love that. You devour the 
facts and nuances of difficult problems and try to solve them.
    But from your OMB experience, as you look at HHS at large, 
there have to be some things that occur to you, impressions 
from the position of OMB about HHS and how, over the years--I 
do not just mean the recent years, but over the years--how 
things have not always gone as smoothly as we would like.
    Ms. Burwell. With regard to that issue, I do have 
impressions in terms of beyond the Affordable Care Act and the 
Department as a whole. One of the things that I believe in 
about setting priorities in a new organization when I go to 
something new--and it reflects one of the comments that Dr. 
Coburn made--is listening. That is why I am very appreciative 
of all of your time. I actually have had the opportunity to 
speak with each of you in terms of what your priorities are.
    The second thing I think I need to do is listen to 
stakeholders, and I cannot do that until the Senate speaks and 
this process moves further. And then the third thing is the 
Department. Once I have heard and listened, that is the point, 
I think, at which one has the correct information to set 
priorities, which I think is an important part of managing any 
situation.
    Senator Rockefeller. I have 44 seconds. One of the things 
that has always interested me, and as a citizen, neither 
liberal nor conservative, it has always amazed me that in very 
large and powerful organizations with a lot at stake, where 
people wear stars on their shoulders and where people have 
reputations built up over a lifetime, that they become 
deficient, and they clearly become deficient. They probably 
know it; you would probably know it.
    It is the question of people never being held ultimately 
accountable. For strange reasons, and not always kind reasons, 
the only thing Americans will settle for is that somebody is 
fired, because that shows that ``the administration really 
means it.''
    I do not necessarily walk away from that action at all, but 
there are other ways of disciplining people, but they have to 
somehow radiate out to the American people also. So the 
symbolism of reigning in and controlling your department and 
how you do it is important to me. What say you?
    Ms. Burwell. I agree that it is important. I think one of 
the things that is very important is actually having people 
around you who actually tell you when you are wrong as a 
leader. That is a very important thing, making sure you create 
a culture where it is rewarded for people to actually question 
you in terms of your leadership and make sure they are pointing 
out if there are other facts you should know or things like 
that. I think that is an important part of it.
    With regard to creating accountability, one of the most 
important things I think you do in an organization, when you 
come in, is clarify what the goals are, move to what people's 
roles are, and articulate their responsibility. By setting that 
out at the front end, I think it makes it much easier to check 
yourself at the back end in terms of how people delivered.
    Senator Rockefeller. Thank you.
    The Chairman. Thank you, Senator Rockefeller.
    Senator Crapo?
    Senator Crapo. Thank you, Mr. Chairman.
    Ms. Burwell, I appreciate you being before us today. I also 
appreciate the good working relationship that we have had as 
you have been involved in a number of different aspects of this 
administration.
    Ms. Burwell. Thank you.
    Senator Crapo. I want to use my time today to talk to you 
about Medicare, and particularly Medicare Advantage, and 
secondly about some of the implementation concerns I had with 
regard to Obamacare in general.
    With regard to Medicare, back during the debate over the 
Affordable Care Act, there were massive cuts to Medicare in the 
Act. We debated that at the time. I am not trying to go through 
that debate right now, but, as a part of that, many of us 
pointed out that there were significant reductions to Medicare 
Advantage included in what the Affordable Care Act itself did 
and that that was probably the most popular part of Medicare 
today among seniors.
    In fact, we are now seeing that the cuts to Medicare 
Advantage are real, they are occurring, and, in addition, the 
administration seems to be pushing for additional cuts to 
Medicare Advantage beyond even those that were contained in the 
Affordable Care Act.
    I will not go through all the statistics I have here about 
how the CMS analysis shows one thing and then other analyses 
from independent sources indicate other things. The bottom line 
is, from all the analysis that I am seeing, what we are viewing 
coming down the pike with regard to Medicare Advantage is that 
the program will be facing double-digit reductions over 2 
years.
    In Idaho, we have already started to see the effects of 
this: eight counties in Idaho no longer even offer Medicare 
Advantage options. In Adams County, where 44 percent of the 
Medicare beneficiaries have chosen Medicare Advantage plans, 
the beneficiaries saw their plan options limited in 2014 down 
to just five plans from nine in 2013. We see this dynamic 
continuing.
    My question to you is, do you understand the dynamic that 
is happening in Medicare Advantage? Do you agree with the 
observations I have made? Do you believe it is reasonable to 
implement additional cuts on Medicare as we see this dramatic 
impact the downsizing is already having?
    Ms. Burwell. Two starting premises. Thank you for the 
question; I think it is important. I will start by saying it is 
something which is, Medicare Advantage, I think, a very 
important part of the system.
    Senator Crapo. Good.
    Ms. Burwell. The second thing is, it is an issue that we 
have talked about and I am sure we will talk about more, which 
is the question of health care costs as an important part of 
achieving fiscal responsibility and lowering our deficits in 
the out-years. So those are two guiding premises that I think 
we need to keep our eyes on with regard to Medicare Advantage.
    When I think about Medicare Advantage, I think about the 
starting point that you mentioned, in terms of going back to 
where those initial changes were put in place and the 
predictions of what would happen with those changes. I know of 
two different sets of changes we are talking about.
    With the context there, we had a situation where Medicare 
Advantage was put in place, and we thought it was going to make 
things cheaper. However, we saw 14-percent cost overruns to 
regular Medicare patients, so how do we think about that within 
the system?
    We made some changes. We have seen those changes. Medicare 
Advantage has grown. One-third of people are now part of 
Medicare Advantage. We have seen Medicare Advantage premiums 
drop by 10 percent as those changes have been implemented. The 
other thing we have seen is an increase in quality. Thirty-
seven percent of the people had 4- or 5-star ratings in terms 
of that quality. That is now up to 50 percent.
    The question of the additional changes that are being put 
in place----
    Senator Crapo. Right.
    Ms. Burwell [continuing]. Need to be monitored and watched 
with regard to--I think everyone's objectives are to keep that 
quality access and to keep premiums under control. So I think 
the proposals that are in place, we believe are things that 
could work. But we need to understand and keep monitoring if we 
are seeing things that are not working, which are some of the 
things I think you are starting to describe.
    Senator Crapo. All right. I appreciate that. I am concerned 
that what you are going to see as you monitor it is that we 
have done some unnecessary damage to the program. But I hope 
that your commitment to supporting it and to helping it become 
stronger and more viable is going to work out.
    In my just 1 minute left, let me ask one other quick 
question. Changing quickly to Obamacare in general, a recent 
McKinsey survey found that only 26 percent of individuals who 
gained insurance under the Patient Protection and Affordable 
Care Act were previously uninsured. If this statistic is 
accurate, it means that the vast majority of individuals who 
are now covered under the Act previously had health insurance 
that was canceled due to the mandates in the law.
    First of all, the administration has allowed non-compliant 
plans to continue through 2014. Do you support allowing this 
continuation of non-compliant plans to qualify or can Americans 
expect another round of cancellations this fall?
    Ms. Burwell. With regard to where we are in terms of the 
current plans and what will be continued or not, I think we 
have made all the decisions and announcements that will take us 
through the next enrollment season.
    With regard to what we want to do, I think we need to watch 
and manage. As with Medicare Advantage, one of the things I 
think is important is, how do we do common-sense implementation 
that works for people? The system needs to work for 
individuals, it needs to work for insurers, and actually 
providers as well.
    Senator Crapo. Well, thank you. I have a lot more 
questions. My time is up. I will submit those to you in 
writing.
    [The questions appear in the appendix.]
    Ms. Burwell. Thank you. Thank you.
    Senator Crapo. Thank you.
    The Chairman. Senator Stabenow?
    Senator Stabenow. Welcome. Thank you very much, Mr. 
Chairman. Congratulations on well-deserved support and praise.
    Ms. Burwell. Thank you.
    Senator Stabenow. I am looking forward to working with you 
on so many different issues.
    Let me first follow up on my friend and colleague's 
statement on Medicare Advantage and just share this. During the 
process of writing the Affordable Care Act, I will never forget 
the Budget Office telling us that, even if we capped the 
payments to Medicare Advantage at 150 percent of what doctors 
and hospitals receive under regular Medicare, we would save 
money--even capping it at 150 percent.
    So given that fact, I think it was the right thing for us 
to do to deal with cost overruns. And I certainly share with my 
colleague the view that we want to make sure that services are 
there and provided. But clearly there were cost overruns.
    The good news is, as we brought down the costs connected 
with Medicare, we saved money. And yet, at the same time, we 
provide annual check-ups with no out-of-pocket costs, and we 
are seeing prescription drug costs going down about $1,200 per 
person, back in their pocket to help pay for medication. So it 
is all good news.
    In general, I want to ask about the Affordable Care Act, 
because the good news is we have more than 8 million people who 
have been able to sign up for a better plan at better prices--
in Michigan, over 270,000 people, which is way more than we 
thought, over 100,000 more than we thought were going to be 
signing up.
    In fact, even though Michigan did not start until April 1st 
on the Medicaid expansion, we have enrolled about one-third of 
people who are eligible. So that means low-income working folks 
working minimum wage, 40 hours a week, trying to make it, 
finally are going to have the opportunity to see a doctor and 
take their kids to the doctor.
    So my question is related to the ACA overall. When we look 
at the fact that CBO announced last month that, due to lower-
than-expected premium rates, the Affordable Care Act will 
reduce the deficit another $104 billion over the next 10 
years--I know in Michigan we are seeing Pioneer Accountable 
Care Organizations that are already, within 2 years, showing 
savings, a big piece of this, to bring down costs for our 
businesses, for our economy, for families.
    So what do you see as the opportunities to continue to use 
the tools in the Affordable Care Act to really bring down costs 
the right way, not by taking away service but by dealing with 
the costs in the system?
    Ms. Burwell. I think that one of the things is continued 
implementation. CBO, when they score the changes that are in 
the Act from 2014 to 2020, has a $900-billion reduction in 
health care costs. So, implementation.
    But I think there are a number of tools and opportunities, 
and they are related to the delivery system and moving the 
delivery system into a space where it is both about quality as 
well as cost reduction. I think there are a number of tools. 
You mentioned using Accountable Care Organizations that are 
moving to that space as a way to think about how one can do 
both of those things.
    I think the other thing is looking at the innovations. I 
think there are innovations State by State. Some of the things 
that I had the opportunity to hear about in the conversations 
that I had with a number of you were specific examples of 
things that are either focused on quality improvements, either 
hospital readmissions, falls, other issues, or actually cost 
improvements, and some of those come together.
    So I think what we need to do is look at those models, 
figure out which of the models deliver the greatest impact with 
regard to both costs and quality, and then figure out which 
ones are scalable, because I think that is the issue. I think 
sometimes you can get things to work. My experience in grant-
making is, you get things to work at a small level, but the 
question is, can you scale it?
    Senator Stabenow. I agree.
    One other comment and then one other quick question. I know 
we are following up to have a discussion about the pilot 
project we have just passed on community mental health funding 
for critical expansions of quality and care in the community 
for mental health. I understand in talking with you that your 
mom works in community mental health, so I feel much better now 
because I know we have a secret ally there whom we are looking 
forward to enlisting. So I look forward to working with you as 
we implement this very important 8-State effort that Senator 
Blunt and I were pleased to work on.
    Finally, Alzheimer's disease. One out of eight people is 
diagnosed with Alzheimer's. What is important for us in this 
context is that $1 out of every 5 Medicare dollars--that is a 
lot, $1 out of 5 Medicare dollars--is spent on someone with 
Alzheimer's.
    So I do not know if you have had an opportunity to really 
focus on this yet. One out of 5 Medicare dollars, and yet we 
have less than 0.25 percent that goes to research. I know 
things are--the President is focusing on the brain research 
effort, and so on. But we certainly want to work with you on 
more effective ways to address what is clearly a disease 
affecting every family in America.
    I do not know if you have any comments, if you have had a 
chance to look at this at all, but certainly I want your 
commitment--we would appreciate it--to really focus on this.
    Ms. Burwell. Senator, first, thank you for your leadership 
in the mental health space and on Alzheimer's. These are both 
issues that I think are very important. I think, as you 
articulated, they are important both in the form of research as 
well as delivery of care, and care for those who are 
caregivers.
    I think the issue of Alzheimer's cuts across the research 
we need to treat and help prevent the problem--if we can find 
that out, what we do to treat patients who are currently 
suffering--and also how we treat the families, because that is 
a part of the care that is very important for those individuals 
as well.
    Senator Stabenow. I look forward to working with you.
    Ms. Burwell. Thank you.
    Senator Stabenow. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Stabenow.
    Senator Grassley?
    Senator Grassley. Congratulations, Ms. Burwell. I have just 
two questions. I want to start with what I consider a very 
important function that I have of oversight on the use of 
taxpayers' dollars. I think I take that job very seriously. I 
have done so both under Republican and Democratic 
administrations.
    So my first question to you is, would you commit to 
answering the letters I send to your department promptly, 
fully, and without reservation?
    Ms. Burwell. Senator, I will work to make sure that we are 
giving you all the tools you need to do the work that you need 
to do.
    Senator Grassley. Yes.
    I have a long lead-in before my next question, so please be 
patient. When you were nominated, I said that anyone put in 
charge of Obamacare would be set up to fail. The theme of this 
law really has been ``by any means necessary.'' The legislative 
process certainly was by any means necessary, and the 
implementation has operated similarly.
    The department we are considering you for has ignored the 
plain read of the statute whenever it was considered necessary. 
Deadlines were considered to be written in pencil. If a statute 
needed to be creatively reinterpreted to make the program work, 
the Department did so.
    As I said on the day that you were nominated, you have a 
fresh start with Congress and with the public. But, if you are 
going to make the most of that opportunity, you are going to 
have to do things differently than they have been done.
    I will use Marilyn Tavenner as an example. She sat in the 
same chair you are in a few months ago. She committed to do 
things differently. Now it seems like she has gone into the 
Witness Protection Program, it has been so long since she was 
last in the chair or at my door. I hope that does not happen 
with you. I hope you do not disappear into the same bunker.
    But this is what you face moving forward. The Department is 
supposed to implement the employer mandate a year overdue and 
significantly altered from the statute. The Department is 
supposed to implement risk corridors this year, though the 
legal authority to distribute funds is questionable and the 
standards used to make those distributions will likely be kept 
very quiet.
    Speaking of things that will be kept quiet, Congress is 
going to want to know what the premiums will be for next year. 
We consider the information important and relevant. Iowa is 
considered to be one of those States where we might have the 
highest premium spike.
    The Department will want to use any means necessary to hide 
the premiums until after the November elections, unless of 
course the premium numbers are good, and then the Department 
will shout from the rooftops how low they are, much as I think 
was done in the case of enrollment numbers.
    Now, we can be very cordial today, but, if you want to 
change the relationship your department has with Congress, you 
are going to have to be willing to break the ``by any means 
necessary'' mind-set that we have seen for the past 5 years.
    My question to you then is this: do you think it is 
possible for you to change the ``by any means necessary'' 
culture at HHS that some of us in Congress view as bordering on 
lawless?
    Ms. Burwell. Senator, thank you. Hearkening to my 
experience and what I have done at the Office of Management and 
Budget, there are challenging issues. And, as I look around 
this dais, I think with many of you I have had the opportunity 
to have to call with things that are positive, and actually to 
call about things that are difficult in terms of a number of 
the members.
    That is something that I consider my responsibility to do, 
and I hope that people feel, in my role at OMB, that I have 
done that. Whether that is moving to more timely responses, the 
regulatory agenda, it is something that actually is sometimes a 
controversial thing. But since I have been the director of OMB, 
we have been on time, getting that out in both the spring and 
the fall.
    The mid-session review--a document that has a lot of 
numbers that some may use one way or some may use another--came 
out a week early. That is something that actually I did not 
have to wait for numbers from the Congress to do. So I take the 
issues very seriously. And as I have said, this is a space 
where I actually hope that there will be direct communication 
if there are concerns.
    Senator Grassley. I will yield back my time, Mr. Chairman. 
Thank you.
    The Chairman. Thank you, Senator Grassley.
    Senator Nelson is next.
    Senator Nelson. Senator Grassley, Senator Rockefeller 
assures me that anybody from Hinton, WV, population less than 
5,000, is going to do okay. I would assume that you can tell a 
lot about where a person is going by where they have been.
    You have had such accolades from no less than Senator 
Coburn, and the same from me, for the way that you have handled 
yourself in a very difficult department that is as hard-headed, 
from this Senator's perspective, as is HHS, and yet you were 
there, you were responsive, and I want you to know I appreciate 
it, and I think there are a lot of other folks here who do as 
well.
    I want to just ask you quickly about Medicaid and Medicare. 
If our Governor and legislature in the State of Florida 
expanded Medicaid under the ACA, it would cover an additional 
1.2 million people who otherwise, when they get sick, are going 
to end up in the emergency room. And all the rest of us are 
going to end up paying for them through our insurance premiums, 
not even to speak to the fact that it is the humanitarian thing 
to do for people to have access to health care. But the State 
legislature and the Governor have so chosen not to do it for 
two legislative sessions. We have tried to show them that there 
is a local tax base that is paying for a lot of things for low-
income people already.
    Now, what the legislature's position has been is, they want 
you to expand the Medicaid waiver so that they can continue 
offering Medicaid through an HMO, but they do not want, under 
the ACA, to expand that Medicaid population up to 138 percent 
of poverty. So we have shown them an ingenious way that you can 
utilize if the State does not want to pay their 10 percent in 
the 4th year and in the future years, where they can actually 
utilize what is already being used in a local property tax or 
sales tax for these low-income people.
    So what I would ask is, if the State chooses not to expand 
Medicaid up to 138 percent, what would you think the Department 
would plan to handle the States' request to consider continuing 
doing business as usual?
    Ms. Burwell. Senator, with regard to the specifics of the 
negotiations that are occurring between HHS and the States, 
that is something that, in my current role, I am not familiar 
with.
    What I can talk about, though, is my philosophy with regard 
to how to think about these issues in terms of Medicaid and the 
Medicaid waivers. There are a couple of principles. One is, I 
actually think it is very important in starting the 
conversation to be clear about what are the fundamental core 
principles that are essential to implementing it, whether that 
is the implementation of the Affordable Care Act or the other 
State waivers that some States may be applying for.
    I think the second thing that is a principle that I think 
is important is flexibility. I think that States do have 
different situations and we need to consider that, but bringing 
those two things together, I think, is an important thing to do 
from the beginning of the conversation as one works through how 
to get to a potential ``yes.''
    Senator Nelson. Ground zero for Medicare fraud is South 
Florida. Just yesterday there was another bust. Law enforcement 
took down 50 more people. But the problem is, in the past, when 
you take them down, they have already fleeced the system. Do 
you have any thoughts?
    Ms. Burwell. Well, a couple of things. I think that we need 
to work towards a system that is not pay-and-chase, by getting 
in front of the system before the dollars go out. That is the 
place where we need to have a system. I think there are a 
number of tools that we need to use.
    I think we need to use some of the things that we see in 
the private sector in terms of predictive capabilities, in 
terms of using technology. I think the partnership that 
actually did do the work that you were referring to yesterday 
that was across the Nation, the strike force with the Justice 
Department, is an important part of making sure we do that.
    The issue of Medicare fraud is something I take very 
seriously, and, in my current role as OMB Director, the issue 
of improper payments is one that I have focused on across the 
entire government. As we all know, the numbers are very large 
in Medicare, so it is a place that we need to focus on deeply.
    So I would hope, if I am confirmed, to be able to bring 
some of the focus that we have had on broad improper payments 
across the Federal Government to the issues that are specific 
in Medicare and Medicaid as well.
    The Chairman. Senator Cornyn?
    Senator Cornyn. Thank you, Mr. Chairman.
    Ms. Burwell, congratulations on your nomination.
    Ms. Burwell. Thank you, Senator.
    Senator Cornyn. Thank you for meeting with me and my staff 
in my office. I am glad to hear your answer about getting away 
from pay-and-chase. There are not enough resources in the 
Federal Government or through the False Claims Act or otherwise 
to go after all the fraudsters.
    The only way you are going to get ahead of them is to 
screen who gets paid on the front end, and there are a lot of 
very powerful and loud people who will complain to high heaven 
if you do that. But I appreciate your commitment to deal with 
pay-and-chase, because it just does not work, and it will not 
work.
    So McKinsey, which you once worked for in addition to other 
aspects of your distinguished career, has just come out with an 
estimate that about 22 percent of the 8 million people whom the 
administration was celebrating enrolling in exchanges, only 22 
percent were people who previously did not have insurance 
coverage, which means that only about 1 out of 5 people were 
newly added to the insurance rolls who previously did not have 
coverage.
    The President said, when he sold the idea of the Affordable 
Care Act, that if you like what you have you can keep it, your 
premiums as a family of four would go down $2,500, and oh, by 
the way, if you like your doctor, you can keep your doctor.
    In many, many, many--too many--instances, that has proven 
not to be true, which has been very damaging not only to the 
President's credibility but to the credibility of anybody who 
is saying that the Affordable Care Act will work as advertised.
    Are you aware, since to my knowledge there have been no 
official figures released by the Federal Government or by the 
administration, whether there are any figures available which 
contradict or disagree with what the McKinsey study estimates, 
that only about 1 in 5 of the 8 million people did not have 
insurance?
    Ms. Burwell. Senator, in my current role, with regard to 
knowing what the insurance companies have said to HHS, that is 
not something I do know. What I do know are the public figures 
that we have seen. While we have seen the McKinsey numbers, I 
have not delved into the analytics. The question of, did some 
people switch for quality reasons, I am not sure if McKinsey 
divides that out.
    The other thing is, what we have seen is, we have seen 
Gallup and a number of other organizations show numbers in 
terms of the percentage drop in uninsured in the Nation, and 
those provide different numbers. But with regard to specifics 
from the government, I do not, in my current role, have access 
or know. But the insurers are the point at which that 
information will be provided.
    Senator Cornyn. Well, the distinguished Senator from West 
Virginia who introduced you earlier talked about 20 or 30 
years. I do not know whether he was suggesting that there would 
be 20 or 30 years before we got health care right or not. Maybe 
we will have that conversation later. But right now there are a 
lot of people who feel enormously discouraged and misled, 
frankly, about the promises made over the implementation of 
Obamacare.
    Let me ask you, in the short time I have remaining--my 
notes indicated that Health and Human Services employs roughly 
78,000 people--78,000 people--and is authorized to spend about 
$888 billion. There is another government organization in the 
news these days, the Veterans Administration, that has 278,000 
employees. It has got, if the reports are to be believed, 
enormous problems with regard to delivering the promise of 
health care to veterans who have earned that right.
    Could you tell me how you would deal with an organization 
that has the sorts of problems that are being reported in the 
VA today? I realize that that is much bigger than what you are 
getting ready to take on at HHS, but I am not asking you how to 
fix the VA in particular, but I am asking about how you, with 
your experience, which is considerable, would approach an 
organization of that size that has that many problems.
    Ms. Burwell. I think first is getting to what is causing 
the problems and the magnitude of the problem. Anytime you have 
a situation like that in an organization, I think you quickly 
have to establish, what is the problem coming from and how 
large is it? Is it systemic or is it cultural, or is it 
something that is a targeted problem?
    I think once you understand what type of problem you are 
dealing with, then you have different types of solutions 
depending on what it is. If it is a cultural issue, you are 
going to need to do change management, and that is something 
that takes energy, effort, leadership, buy-in, and problem-
solving that works from the ground up.
    If it is something in a targeted space, that is a different 
kind of problem. So what I would want to do very quickly is 
understand what is the problem, the magnitude of it, and, as I 
said, is it systemic or otherwise, and then go about creating a 
solution based on that. At least my experience is, setting 
culture, sending signals, and how one goes about doing that, 
are important parts to changing if there are problems in an 
organization.
    Senator Cornyn. And do you think that that approach that 
you just described would be appropriate for Congress to take or 
just somebody in your position?
    Ms. Burwell. With regard to--I think there is a role that 
Congress and the executive branch play together. There is an 
important oversight role that the Congress plays, and I think 
that is about a back-and-forth in a conversation.
    I think it is one of the places where working together is 
the way to get the greatest impact, coming up with the 
solutions, listening and understanding that there are ideas 
that come from experience that is on the ground. I think one of 
the most important things that in my visits I hear is, you 
represent what happens in your States.
    What I hear when I have a conversation and ask you about 
priorities, it is a means by which one hears from the American 
people as directly as you can. So I think there is an important 
role in how one goes about doing these solutions and working 
with Congress to do it.
    Senator Cornyn. Thank you.
    The Chairman. Thank you, Senator Cornyn.
    Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman.
    Congratulations on your nomination.
    Ms. Burwell. Thank you, Senator.
    Senator Menendez. Yesterday, the Star Ledger, a major 
newspaper in my State of New Jersey, reported that while 
140,000 people were successfully enrolled in Medicaid, at least 
another 25,000 still have their application waiting to clear 
the backlog and another 7,000 are waiting for their Medicaid 
cards.
    Now, I realize this is a problem whose solution lies 
predominantly at the State level, but I also know that CMS has 
a vital role in making sure that States get all applications 
processed in a timely manner.
    If confirmed, will you commit to prioritizing this issue so 
families in New Jersey and across the country can rest assured 
that their Medicaid enrollment has been processed and that they 
are able to receive the care they need, and have CMS work to 
educate individuals and providers about their presumptive 
eligibility rights so they are able to receive and provide 
health care while they are waiting for their formal enrollment?
    Ms. Burwell. Senator, if I am confirmed, I would look 
forward to working with you and CMS on that issue.
    Senator Menendez. Because the promise of the Act--if, at 
the end of the day, you do everything that is right and you 
register and apply and qualify but you are just not processed, 
at the end of the day, that is really unfortunate.
    As you may know from our conversation, New Jersey has the 
highest rate of autism incidents in the Nation, with 1 in every 
48 children diagnosed by the age of 8. That is why one of my 
top health care priorities is ensuring that individuals with 
autism have the therapies and services they need to fulfill 
their God-given potential.
    Now, one of the steps I took to try to achieve this goal 
was ensuring autism services were required under the essential 
health benefits package for plans sold on the health insurance 
marketplace. Despite this requirement, however, I am worried 
that plans are not living up to the standards that I envisioned 
when I wrote this provision into the law, especially in States 
without existing State coverage requirements.
    Specifically, I am concerned that plans are taking 
advantage of the regulation that allows them to use non-dollar 
caps on benefits since they are no longer allowed to impose 
dollar limits. So this is clearly in violation of the intent of 
the provision as I authored it and that is part of the law, and 
it has the potential to deny access to care to families across 
the country.
    But can you assure me that, under your leadership, HHS will 
conduct the necessary oversight of plan benefit structures to 
ensure that they are providing all of the required benefits?
    Ms. Burwell. Senator, thank you. I appreciate your 
leadership in this space and our conversation about this issue. 
If I am confirmed, this is something we will want to work to 
figure out so we can make sure that those children and adults 
are receiving the benefits and health care that they need.
    Senator Menendez. Two last questions. One of the issues I 
have been involved with over the last year is responding to 
CMS's so-called ``2-midnight rule,'' which is designed to 
create an unambiguous policy that a beneficiary spending more 
than 2 days in the hospital is designated as an inpatient. 
However, the rule failed to acknowledge an instance where a 
beneficiary needs a high level of inpatient care for a shorter 
amount of time, even if the physician determines it is 
medically necessary or appropriate.
    Now, I am pleased to see that CMS took the initiative and 
is soliciting comments on this issue as part of the fiscal year 
2015 inpatient payment rules, but I am afraid that a year might 
not be enough time. Once the current delay is over, we will 
still be in a situation where the rule is unworkable and 
unenforceable.
    Can you provide an assurance that CMS will have policies in 
place that ensure the rule's viability once the statutory 
enforcement delay expires next year?
    Ms. Burwell. Senator, this is one of the issues I have 
heard about from a number of your colleagues in all of my 
visits, so it is one where I think we need to continue getting 
the best ideas that people have for implementation, and that is 
something that I hope, if I am confirmed, I can work on with 
CMS and others to get that input on.
    Senator Menendez. All right. Thank you.
    Finally, delivery system reform and quality improvement. 
For those of us who supported the Affordable Care Act, we saw 
it as not only about having more health care accessibility for 
families across the country who did not have health care, but 
also about controlling costs, about changing the nature of 
health care from a disease base to a preventative base, and 
also changing the nature of how we pay for it and how we deal 
with health care, from alternative payment and delivery models, 
bundled payments, patient-centered medical homes, to 
performance and outcome.
    I had suggested, for example, multi-dosing when it is 
appropriate to reduce prescription drug costs. So are you open 
to consider these types of initiatives as a primary effort to 
try to change the nature of how we pursue both our outcomes and 
how we pay for them?
    Ms. Burwell. Senator, I think that the delivery system 
reform issues are a very important priority that we need to 
focus on. And I believe the way that we are going to focus on 
them is by taking examples and models and figuring out which of 
those provide the best quality and the best cost, and then 
which of those we can scale quickly. I think it is important to 
get things in place, start to get traction on changing the 
system to one that moves towards what you described, as quickly 
as possible.
    Senator Menendez. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Menendez.
    Senator Thune?
    Senator Thune. Thank you, Mr. Chairman.
    Ms. Burwell, congratulations on your nomination, and thank 
you as well for taking time to meet with me. We have, of 
course, serious disagreements about the substance of Obamacare, 
but, as I conveyed to you in our meeting, I am more concerned 
at the moment--well, I am very concerned about the substance, 
but, since we cannot change that, I am very concerned about 
what is going on with regard to the enforcement of Obamacare, 
the selective enforcement of Obamacare, with regard to certain 
groups. We have seen exemptions, delays, parts of the law 
ignored as they pertain to certain favored, it would appear, 
political groups.
    One of those is the reinsurance tax, which was imposed on 
self-insured, self-administered plans to help pay for covering 
people with preexisting conditions. Under your direction at 
OMB, there was a rule issued that carves a lot of plans out 
from that tax. I guess my question has to do with whether or 
not that is appropriate and whether or not that is fair.
    I want to read for you a quote that came out shortly after 
that rule was issued. It said, ``Asked for clarification on how 
the change would affect other plans' rates and fees for 2015 
and 2016, Health and Human Services officials said it is true 
that the fee will be higher for plans that do not have to pay 
the fee in 2015 because some plans are exempt.''
    So, in your view, is that an accurate statement, that 
others are going to have to pay a higher tax, the reinsurance 
tax that is paid by self-insured, self-administered plans, 
because groups like unions got carved out?
    Ms. Burwell. Senator, with regard to the specific provision 
that you are referring to, I think this does fall into trying 
to improve and find better ways to implement the law. While 
some unions are exempted, this does apply to some, many unions 
it does not apply to, and it applies to other groups. It has to 
do with the definition as well of self-administered versus 
third-party administered, in terms of what the law was trying 
to do.
    Those are not synonymous terms, and the reason they are not 
is because, what we found as we were moving forward is, there 
actually are plans that are self-administered not using the 
third party administrator, and creating that distinction was a 
way to provide better clarity. That is what was intended in 
terms of what was being done.
    Senator Thune. My understanding is, it does affect about 25 
percent of union plans. And it is something that I believe that 
they requested. So the question is really a very simple one. I 
mean, it does not require a lot of subjectivity, it is just 
simply a function of math. If there are groups exempted from 
that reinsurance tax, does that not mean that those who are 
subject to the tax are going to have to pay higher taxes?
    Ms. Burwell. I think the question is, what was higher and 
what was lower is one question, and one is implementing what 
your starting point is. So yes, it is a smaller group, but what 
was the actual starting point in terms of what is higher?
    Senator Thune. Well, but we know what the tax is supposed 
to raise. It is a finite amount. It was very clear. If you are 
going to raise a certain amount of revenue and it is going to 
be paid for by a certain number of people, if that pool 
shrinks, the people who are left in the pool are going to pay 
more. That is simple math. I mean, I think the answer is 
``yes,'' and I would like to hear you say ``yes.''
    Ms. Burwell. Senator, I think with regard to what was 
intended, it was to implement the law in a better way that was 
common-sense, that was responding to a situation that was not 
just unions, and then put the pool in place----
    Senator Thune. But that is----
    Ms. Burwell [continuing]. Whatever the size of the pool is, 
to get the numbers.
    Senator Thune. That is theory. Again, this is mathematics. 
Are people going to pay more? The answer is ``yes.'' That is 
what I am saying when it comes to this issue of selective 
enforcement. I do not think that is fair. I mean, you have had 
exemptions now twice for small businesses under the employer 
exemption.
    You have had, I think, 20-some exemptions or delays or 
other parts of the law that have been sort of waived, I guess, 
just unilaterally. But this particular provision is really 
problematic for the people who still have to pay the 
reinsurance tax.
    All I am simply saying is, as a matter of fairness in the 
way that this is implemented, carving out favored groups should 
not be the modus operandi. We ought to be going about this in a 
way that treats everybody fairly under the law.
    I do not think you can argue that, based on the number of 
exemptions, the number of carve-outs, the number of delays that 
have been issued already, that that is the case. This 
particular one was a rule that was issued by OMB under your 
direction.
    Ms. Burwell. Senator, with regard to the implementation, I 
think what one does seek to do is, when one finds places where 
you can implement better within the law, that you seek to do 
that. With regard to the question of employer responsibility, 
what we heard is that the private sector was having 
difficulties in terms of meeting the reporting requirements 
that they would need to meet to do this accurately.
    With regard to other complex pieces of legislation, one of 
which is Part D, and there are others--we have not had anything 
as large and complex as this in a while, but we have had 
examples--as one moves to implement, you do listen and try to 
implement in a better fashion in terms of trying to hear, 
listen, and make the transition one that is workable. On the 
individual side, what one sees is an opportunity for 
individuals to apply for hardship exemptions in terms of trying 
to make that transition a plan that works.
    Senator Thune. Mr. Chairman, in the interest of 
transparency, though, some of these things, these waivers and 
delays, would you agree to submit, when you get them from the 
insurance company, the new filing rates that they file for next 
year? Because the enrollment date has been delayed now until 
later this year.
    The date at which plans get approved has been delayed 
until, I think, the day right before the election, which is 
very convenient. But we know they are going to be filing rates, 
we know there are going to be real-world impacts on these 
things. In the interest of transparency, which you have talked 
a lot about, would you submit to us those rates when you get 
them from the insurers?
    Ms. Burwell. Senator, the issue of premiums and rates is 
one I think that we all are very interested in and all actually 
want to see move in the same direction. With regard to the 
specifics of what HHS receives and when and how, that is 
something, in my current role, I am not familiar with and would 
want to look into when I get to the Department. What I will 
say, Senator, is, if I am confirmed, that is something that I 
want to understand and work with you on.
    Senator Thune. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Thune. And just very 
briefly, Ms. Burwell, I very much appreciate your reference to 
Part D, because I was one who voted for Part D. It was George 
Bush's major domestic initiative. We worked in a bipartisan 
way. I hope we will be able to work in a bipartisan way in the 
days ahead on the ACA, and I appreciate your reference.
    Senator Cardin?
    Senator Cardin. Thank you, Mr. Chairman.
    Ms. Burwell, thank you very much. I want to thank you, and 
I want to thank your family--because this is a family service--
for allowing you to continue in public service.
    The Affordable Care Act sets up the right structure for 
moving forward in the right manner to achieve quality, 
affordable health care for all Americans. There are many 
provisions of the law that I would like to see strengthened and 
improved, and I hope we can work together to do that.
    In the few minutes I have, I want to go over a couple of 
issues that you and I have had a chance to talk about that I 
want to get on the record. First, the Affordable Care Act 
established Offices of Minority Health in several agencies of 
the Department of Health and Human Services and elevated the 
National Center on Minority Health and Health Disparities at 
NIH to an Institute. There are reasons for that.
    I gave you the example of Baltimore, which was the focus of 
a study funded by that Institute, where life expectancies 
across the city vary by as much as 30 years--an entire 
generation--depending on the zip code in which you live. A 
significant part of that is related to access to and quality of 
health care and to the social determinants of health. The 
statistics on the incidence and prevalence of specific diseases 
and the differences between various racial and ethnic 
populations are well-documented. It is imperative that we 
address these disparities if we are to achieve health equity 
and reduce health care costs.
    So Congress intended that the focus on minority health and 
health disparities would be a priority as we try to improve our 
Nation's health care system and correct some of the previous 
failures in this area. I was disturbed when I looked at the 
President's budget that was submitted for fiscal year 2015. The 
budgets of six Institutes at NIH did not get any increase at 
all. The National Institute for Minority Health and Health 
Disparities was one of those Institutes that was frozen in the 
budget proposal.
    Are you committed to implementing the intent of Congress to 
put a priority and spotlight on minority health and health 
disparities?
    Ms. Burwell. Yes, Senator, and thank you for your 
leadership in this space. The issue of minority health is one 
that is important and is, I think, being addressed in parts by 
the Affordable Care Act, as well as the President's budget.
    When one looks at the National Health Service Corps and the 
doctors who are being trained, a number of those, in terms of 
percentages, disproportionately represent minorities. I think 
that is an important part of getting providers to the types of 
communities that we are talking about. In addition, in the NIH 
budget this year, for the first time there is a program to 
actually promote researchers, minority researchers, in the work 
that NIH does.
    In addition, as we work across the whole realm of 
implementing the Affordable Care Act, as well as other parts 
and provisions--whether that is some of the work in preventive 
care or community health centers--thinking about how those 
entities and parts of implementation of care can help minority 
communities is something that I think is very important.
    Senator Cardin. I thank you for that answer. I think it is 
important that you put together the coordinated strategy and be 
very open in presenting it so it gives confidence that you have 
indeed given achieving health equity the high priority it 
deserves.
    One area related to that is Federally Qualified Health 
Centers. One of the great stories of the Affordable Care Act is 
the significant resources that are being made available to the 
FQHCs. I have visited most of our centers in Maryland. They 
have expanded prenatal care, and the number of low birth-weight 
babies being born now is down, and infant survival rates are 
up.
    We now have dental services in the community that were not 
available before, mental health services have been expanded. 
All that is a result of the Affordable Care Act and the added 
funding for FQHCs. We are going to need your support to 
continue that as a priority, because the ACA is not just about 
more third-party coverage, it is about access to comprehensive 
quality care and prevention, and the health centers provide 
those opportunities.
    I want to ask you one more question dealing with dental 
care, which is another problem in low-income and minority 
communities across America. In Maryland, we experienced the 
tragedy of 12-year-old Deamonte Driver, who died in 2007 
because he was unable to get access to needed oral health care. 
The CHIP Act, the Children's Health Insurance Program, as well 
as the Affordable Care Act, provided for pediatric dental 
coverage.
    However, in the ACA, exchanges can offer stand-alone dental 
insurance plans. We talked about this previously, and I just 
really want to get your response. We have to make the pediatric 
dental benefit as seamless as possible. That is, because it is 
an essential benefit, families need to have access to pediatric 
dental without separate deductibles and without additional out-
of-pocket limits.
    Will you look into how we can make pediatric dental a 
seamless benefit, as Congress intended under the Affordable 
Care Act?
    Ms. Burwell. Senator, this is an issue I know you have 
provided leadership on, and Senator Rockefeller actually 
brought it up in his comments as well. Having had the 
opportunity to actually work a little bit on the issue of 
dental, both pediatric and adult, in my foundation work, it is 
something that I would look forward to working on, figuring out 
how we can get those services delivered to people in a way that 
works for them, both in terms of how they can access it and use 
it, in ways that actually prevent the kinds of problems that 
you have described with the 12-year-old that actually extend 
through adulthood for many.
    Senator Cardin. Absolutely. I look forward to working with 
you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Cardin.
    Senator Isakson is next.
    Senator Isakson. Thank you, Mr. Chairman.
    Ms. Burwell, congratulations on your nomination, and 
congratulations to your family, or condolences to your family, 
one way or another, for their loyal support. We appreciate the 
time you are donating to let her serve us, the United States.
    At the hearing before the HELP Committee, I opened with an 
apology to the committee for bringing up a parochial issue, and 
I have already discussed with the chairman that I was going to 
do it one more time. But in that meeting I told you I had no 
more important responsibility as a member of the U.S. Senate, 
including your confirmation, than bringing about a resolution 
to the Savannah Harbor Expansion Project and that we had hit a 
bump in the road upon the submission of the President's budget 
by OMB earlier in the year and I did not know a way forward. I 
wanted to bring about clarity on a way forward, because I 
wanted to see to it, before you were gone from OMB, that we had 
a road forward to see that project through to reality.
    To confirm what Dr. Coburn said about competence and 
responsiveness, within an hour of that hearing you contacted, 
or your staff contacted, our office, arranged an appointment on 
Tuesday of this week, which was yesterday, with your Chief 
Legal Counsel, your Deputy Director, your Chief of Legislative 
Liaison, and the Under Secretary of the Army, Jo-Ellen Darcy, 
over at the Corps of Engineers, where we reached an agreement 
on a way forward which I want to just memorialize with your 
concurrence at this hearing today, which was: (1) we need to 
pass the authorization for the 902, for the authorization of 
SHEP, which is in the final conference agreement--I have seen 
that; (2) the Corps has to initiate and begin a partnership 
agreement negotiation with the Port Authority of Savannah and 
with OMB; and (3) the State needs to agree to forward-fund 
initial construction money for which it will receive credit 
towards its required match during the course of the expansion 
project.
    Do I have a correct representation of the steps forward to 
complete this project?
    Ms. Burwell. Senator, you do. I am very hopeful that WRRDA* 
will pass quickly and we can get on our way with this important 
project.
---------------------------------------------------------------------------
    * The Water Resources Reform and Development Act of 2014.
---------------------------------------------------------------------------
    Senator Isakson. Well, I want to thank you for responding 
to my question that day, and thank you on behalf of the people 
of Georgia, and really the trade of the United States of 
America and Ambassador Froman's responsibilities to expand and 
improve our exports around the world. But thank you very much 
for the responsiveness on that.
    I was a real estate guy, but I had a little insurance 
agency in my company. We sold some small group health policies 
back in the good old days for which our agents, who were 
independent agents, received commissions. When the Affordable 
Care Act passed, it put in place a medical loss ratio threshold 
for small group plans and large group plans at 80 and 85 
percent.
    Your department, which you were not the head of then, 
determined that commissions were a part of the administrative 
costs of the plan, which meant you would have to pay the 
commission and administer the program out of the 15 percent, 
which basically put all the independent agents selling health 
insurance out of business and was a reason why we had to hire 
navigators to help people find their way through the exchanges.
    I would like, when you become head of the Department, for 
you to look at that decision and revisit it, in terms of the 
efficiency for the plan, to allow small group salespeople and 
large group salespeople to get back in the business of selling 
insurance.
    It will save costs for the government in terms of not 
having to have as many navigators, and it will put people back 
in business who were, I think, unintentionally put out of 
business by the Affordable Care Act.
    Ms. Burwell. Senator, if I am confirmed, I look forward to 
looking into and understanding that, thinking about it both 
from the perspective of insurers--having had the opportunity to 
have been on the board of an insurance company, I understand 
the independent agent issue--as well as the issue of how we 
think about premium issues, which are some of the issues that a 
number of people have brought up today, and how those two 
things interact. So I look forward to, if I am confirmed, 
learning more about how to think about that issue.
    Senator Isakson. And I appreciate that.
    On the SGR--which was brought up by the chairman and some 
of the other members--on the question of our need to finally 
fix it now that we have a window opening, I had the occasion to 
watch you in action for eight successive weeks at the White 
House when our little group of eight had dinner with the 
President, Dennis McDonough, and yourself, trying to find a way 
forward on deficit and debt reduction. We talked about ways in 
which we could reduce obligations over time.
    I do not want to get into a long question, but I would like 
for you to just consider leaving all options on the table in 
terms of fixing the SGR, in terms of where we find the money to 
do so. As you will remember in our discussions, some structural 
reforms to Medicare in the out-years can bring about tremendous 
savings without hurting beneficiaries, and we talked about 
those in those meetings.
    That could be a part of the equation that helps us to find 
a way to pay for the SGR, permanently fix it, and never again 
be stuck in these 1-year renewals over and over again. So I 
would appreciate your leaving all opportunities on the table, 
not committing yourself to every opportunity, but leave them 
all on the table for discussion.
    Ms. Burwell. Senator, I welcome the idea of leaving all 
opportunities on the table. I think as we reflect in our 
budget, we have a wide range of opportunities that range from 
the type you are talking about to revenue as well. So, all on 
the table--I hear you.
    Senator Isakson. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Isakson.
    Senator Roberts?
    Senator Roberts. Thank you, Mr. Chairman.
    Ms. Burwell, when we spoke during your hearing before the 
Senate HELP Committee, I asked you questions about the 
Independent Payment Advisory Board, IPAB----
    Ms. Burwell. Yes, sir.
    Senator Roberts [continuing]. That is the acronym for it--
and what could happen with Medicare rationing if they in fact 
came into being. In response, you stated that you are hopeful 
that IPAB ``never needs to be used'' and, by your estimates, 
during your time as HHS Secretary ``would never get 
triggered.''
    With the outstanding comments about your ability and 
leadership by Senator Rockefeller and Senator Coburn, as a 
follow-up, since you do not believe IPAB will have to be 
activated, with your leadership, would you just simply support 
its repeal?
    Ms. Burwell. Senator, with regard to IPAB, first, I think 
it is important to reflect that IPAB as currently written would 
not affect beneficiaries. That is a very important part of the 
law with regard to, if it is implemented.
    With regard to the repeal and that question, I think, 
Senator, one of the things that is hopefully a helpful thing is 
having belts and suspenders in place to help us all get to the 
place we need to with regard to reducing health care costs.
    Senator Roberts. I do not know about a belt and suspenders. 
Maybe barbed wire would be a better way to put it.
    I would echo my colleagues' comments to you regarding your 
responsiveness and willingness to work with this committee and 
all members of Congress. I would also like to add relevant 
Medicare stakeholders to that list. Just this past week, I had 
the Kansas Hospital Association in my office sharing their 
frustrations about the lack of responsiveness from HHS. Here is 
a copy. That is not their letter, these scratchings are mine, 
but this is the same letter they sent your predecessor in 
January. They have yet to receive a response regarding the 
Medicare Recovery Audit Contractors, what we lovingly call in 
rural American the RAC. They do not like to be put on the RAC.
    On the Office of Medicare Hearings and Appeals' 2-year 
moratorium on assigning new cases to the administrative law 
judges, they are still waiting a response. Now, I know the RACs 
have returned savings to the Medicare trust fund. It is vital 
that these local hospitals, suppliers, and other Medicare 
providers, however, have access to timely appeals of these 
audits.
    We are talking about 65 administrative law judges and now 
357,000 claims for Medicare services, which I understand is the 
reason for the delay or the suspension. It is rather 
incredible. We have gone from pending appeals, in just 2 years, 
of 92,000 claims to 460,000 claims.
    Then the weekly receipts in the Central Operations Division 
went from about 1,250 to 15,000 per week. The reason is 
obvious, and that is, hospitals win 70 percent of the time, 
which means these independent contractors come into a hospital, 
many times they have never seen them before, and they are being 
fined for regulations they do not know anything about. If you 
are in a small hospital, you really have a problem trying to 
figure out whether you are going to appeal or not, and now we 
find that the appeals are suspended.
    So I would add to my list, what can be done to better 
balance the need to recover improper payments--and we are all 
for that--while not imposing undue administrative burdens on 
providers, particularly those in our rural areas?
    Ms. Burwell. Senator, with regard to this issue of the 
RACs, as well as the balancing of having hospitals be able to 
process things quickly at the same time that we are trying to 
prevent abuse of Medicare, those are the principles we need to 
balance.
    If I am confirmed, this is an issue that I think is going 
to require a quick look, a fresh look, and we will need to 
think about how we get the balance and what processes can be 
used to balance the two interests, because I think you are 
appropriately reflecting, in terms of the speed and the 
processing, it is not where we want to be in terms of the 
system.
    Senator Roberts. In last year's Inpatient Prospective 
Payment Systems rule, that is the IPPS rule--a rule, by the 
way, which you signed off on at OMB--HHS implemented a payment 
clarification that requires that physicians admitting a patient 
into a critical access hospital certify that the patient must 
be discharged or transferred within 96 hours.
    This payment clarification, which is not in line with the 
critical access hospital's condition of participation for 
Medicare, in my view and in their view, is crippling the 
ability of many of these facilities to provide care in their 
rural communities. It is inhibiting doctors' abilities to 
confer with their patients. One doctor in Dodge City told me, 
``I usually met 12 minutes, now just 3 minutes because of the 
96-hour rule, and then I decide on the best course of action 
for their care.'' It is another example, in my opinion, of 
having to tell CMS, if it is not broken, then there is no need 
to fix it.
    If confirmed, will you do all you can to see if we can 
reverse this payment issue so that our rural seniors can 
continue to receive care in their local community?
    Ms. Burwell. Senator, the issue of critical access 
hospitals and care in rural communities is something, because 
of my background, that I consider very important. The issue of 
the 96-hour rule, which we discussed a little bit before, is 
one that we clearly need to get the right input on in terms of, 
how do we get to a place where the original objectives of the 
rule can be achieved in a way that they do not have the 
unintended consequences that you are articulating?
    Senator Roberts. Thank you very much. My time has expired.
    The Chairman. Thank you, Senator Roberts.
    Senator Warner?
    Senator Warner. Thank you, Mr. Chairman.
    Let me say, Ms. Burwell, thank you again for your service. 
It looks like you are coming around the bend here and close to 
being done. I have a number of things I want to get on the 
record. First of all, I want to add my voice to comments made 
by Senator Isakson and Senator Roberts. I think the 
displacement of agents and brokers was a challenge and a 
mistake, and I hope you will 
re-review that process.
    Let me also add my voice to what Senator Roberts said. I 
hear repeatedly from particularly my rural hospitals, but all 
hospitals, about the RAC audits. We do need to make sure we 
avoid waste and fraud, but I hope you will take a fresh look at 
that.
    Let me move to three or four other items very quickly that 
I want to get in. One, the Treasury Department recently 
finalized reporting rules that will deal with the employer and 
individual mandates. There are a lot of complexities about 
these rules, and some of these complexities were highlighted by 
the American Bar Association's Section of Taxation.
    This is not just a Treasury/IRS issue. HHS also plays an 
important role in administering these subsidies. The way the 
rules are currently issued, there is a potential end-of-year 
contentious debate between business and the IRS, with the IRS 
kind of being a referee. I raised this with you before.
    I have introduced legislation, S. 2176--we have eight co-
sponsors, and it is endorsed by a number of employer groups--
which would basically allow employers to report prospectively 
or forward-leaning rather than having this monthly reporting 
requirement that, for particularly small entrepreneurs, is a 
burden.
    Now, this approach we are taking would not give a complete 
safe haven, but it would require the kind of up-front 
collaboration between HHS and Treasury that might remove one of 
the administrative burdens that we hear enormous amounts about 
around ACA. My hope is that, if you are approved, and I hope 
you will be, that you will help work with us on either this 
legislation or other ways that we can improve this reporting 
requirement and, again, look at this prospective action rather 
than simply doing it retroactively.
    Ms. Burwell. Senator, if I am confirmed, as the 
administration and the President have said, we welcome the 
opportunity to think about ways, legislatively and otherwise, 
that we can improve the implementation of the Affordable Care 
Act.
    Senator Warner. I will take that as a ``yes.''
    It is also my understanding that CMS signed agreements with 
a number of web-based entities that were to allow private 
exchanges to enroll tax subsidy individuals pursuant to 
regulations issued by HHS in March of 2012, again, something we 
talked about. This effort was stymied due to inefficient 
technology integration with these entities.
    I understand there have been some small steps taken by HHS, 
but not a lot has really taken place. To my mind, this should 
be a no-brainer if we can get some of these sites that are 
perhaps more user-friendly as an additive effort to 
Healthcare.gov. I hope that you will work with me and these 
web-based entities to ensure that there is better technology 
integration in this area.
    Ms. Burwell. Senator, I welcome the opportunity to think 
about the best way to do distribution. It is hearkening back to 
Senator Isakson's question and your comment in terms of that 
question of a distribution mechanism, in terms of how people 
can easily access and receive health care, and I think the web-
based model is a very promising approach.
    Senator Warner. And clearly there are certain sites that 
    ..................................................................................................................................................................................................
may have been private-sector sites that have a better 
reputation, perhaps, than the Federal exchange. If we can find 
ways to utilize that and integrate that technology, to me it 
seems like we want to expand the sign-ups. I hope that we can 
work together on this.
    Again, I would like to discuss an issue that I raised with 
you, which is a little more complicated, about CMS's recently 
issued changes in the hospice benefit. I think, as this is 
being rolled out, it is confusing and placing a lot of 
unnecessary burdens on hospice patients' families and the 
hospice provider community.
    The guidance says that Part D plans should reject 
prescription drugs billed to them after a patient has enrolled 
in hospice unless the hospice provider submits a prior 
authorization form to justify why a drug is unrelated to the 
terminal illness and should be covered by the Part D plan.
    Obviously, if it is related to the terminal illness, we 
understand, but if you have glaucoma and a terminal illness, 
glaucoma is not related, and shouldn't the hospice provider be 
able to get reimbursed for that? Now, obviously there are some 
major problems with the implementation on this. My hope would 
be that as we dig down--there are two or three other layers of 
difficulty with this issue--that you will work with me and CMS 
to see if we can get this resolved in a way that these hospice 
providers are not unduly penalized.
    Ms. Burwell. Senator, I look forward to working on that 
issue in terms of how we can figure out how we are paying for 
the right things, and doing it in a way that is implementable.
    Senator Warner. In a lightning round with 4 seconds left, 
as a former Governor, let me just say that one of the things 
that we often try to do as States is look at innovative 
programs to try to get a waiver, whether it is with Medicaid or 
CHIP.
    Yet a lot of these programs, they never move from kind of 
innovative test models to actually become permanent parts of a 
State's program. This, to me, again, is an area that is ripe 
for some administrative review, and at some point you ought to 
either be proving your case and be accepted as part of the 
State program or be rejected. Again, I hope you will work with 
me on this.
    Ms. Burwell. I will, Senator.
    Senator Warner. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Warner.
    Senator Portman?
    Senator Portman. Thank you, Mr. Chairman.
    Ms. Burwell, thank you for your willingness to step forward 
for what will be a very challenging task. As a former OMB 
Director and part of that fellowship of folks who have had the 
honor to have the worst job in Washington, I congratulate you 
on seeking a promotion. [Laughter.]
    But I do think you come at it, therefore, with a different 
perspective than other HHS Secretaries have had in modern 
times, which is that of a budget cutter and somebody who has 
had responsibility for oversight and trying to find 
efficiencies. I think that is really important right now. I 
hope you will continue to have that attitude at HHS.
    I am going to focus on Medicare because I think you would 
agree with me that, when you look at not just the health care 
issues, but also the fiscal issues, if we do not figure out a 
way to reform this incredibly important but unsustainable 
program, we will have a difficult time ever getting our fiscal 
house in order.
    And, as you found out when you were at OMB, this is not an 
easy task, because there is obviously a lot of difficulty in 
touching any aspect of Medicare. But the reality is that the 
trust fund, which is the Part A trust fund covering hospital 
care, skilled nursing, and so on, is expected to be insolvent 
by 2026 according to the most recent trustees' report.
    Even if that were not true, we know that Medicare as a 
program currently offers about $3 in benefits for every $1 in 
taxes that a retiree contributes. That is your typical family 
in Cincinnati or here in Washington, DC. So it is a program 
already that is heavily subsidized by general revenues and 
heading toward, again, this insolvency, even with the 
significant general revenue contribution.
    So my question to you is this. In this confluence of OMB 
and HHS that may well come together here with your 
confirmation, what are your thoughts about it? Let me ask you a 
very specific question that I think you should be able to 
answer in the affirmative.
    In the President's budget over the last couple of years, he 
has included a change in the way in which the recipients of 
Part B and Part D benefits pay their premiums. He said there 
ought to be additional premiums paid for folks who make over a 
certain amount, 170,000 bucks roughly per couple in retirement. 
Some have called that affluence-testing or means-testing. In 
the President's proposal, he saves $56 billion, as you will 
probably recall since it was in your budget, over a 10-year 
period. But interestingly, all the analysis indicates, it is 
well over $400 billion over the next 10 years. In other words, 
it is one of those changes on the mandatory side of the budget, 
which is now the largest and fastest-growing part of the 
budget, that has significant out-year changes, which is really 
what we ought to be focusing on here in Congress and with the 
administration.
    So my question to you is: (1) I assume you support the 
President's budget proposal, but (2) would you support it as a 
stand-alone? In other words, would you be willing to work with 
us on means-testing under Medicare to be able to deal--and 
Johnny Isakson talked about SGR, and my question is really with 
regard to deficit reduction and how we come together--with a 
problem that has been difficult politically for us to handle 
over the last few years here in Congress? Would you support 
that proposal as a stand-alone measure?
    Ms. Burwell. Senator, I agree with you. I think one of the 
real benefits of the income-testing for premiums has to do with 
the fact that it is a structural change and you get those large 
benefits in the out-years that are important to the over-
arching numbers in the deficit space.
    When I think about the deficit issues in my role at OMB, 
one of the things that I think is important is understanding 
that the drivers are both the issue of health care costs in the 
Medicare system and also our demographics.
    Because of that, the magnitude of the problem, when one 
gets to the specifics of what you are going to do to resolve 
that issue, I think it actually takes a combination of things 
to do that. I think it takes things, as you are discussing, 
that are on the beneficiary side. I think it takes things that 
are on the provider side.
    Senator Portman. Well, we certainly--
    Ms. Burwell. I think it takes things like revenue.
    Senator Portman. But, as you know, we have certainly done a 
lot on the provider side already. My question for you is, it is 
in the President's budget. I assume you support the policy. 
Would you be able to support that as a policy initiative, 
whether it is in the context of SGR, in the context of deficit 
reduction, or in the context of tax extenders, or whatever it 
is? Do you support the proposal?
    Ms. Burwell. I support the proposal in the context in which 
the President's budget presented it, and it returns to what Mr. 
Isakson said: all things on the table. As we suggest, these 
things are on the table, but we also believe revenue has to be 
a part of the conversation.
    Senator Portman. Tell me why revenue has to be part of the 
conversation with regard to means-testing.
    Ms. Burwell. With regard to the question that I think we 
are addressing specifically, it is the issue of deficit 
reduction in the long term. When one looks at the numbers 
overall, actually getting the specifics, when you get to the 
specifics of what you need to do from a premium perspective, 
from a beneficiary perspective, from the perspective of 
providers, there are other parts that you need. That is where I 
was going with the issue of immigration as well.
    Senator Portman. I only have a few moments left. So you 
were saying that, with regard to means-testing on premiums, 
that there have to be tax increases. Let me just ask you this. 
When someone pays a higher premium, are they not paying the 
government more? Is that not in essence a taxpayer over a 
certain income paying the government more for a benefit than 
they would otherwise have to pay?
    Ms. Burwell. Senator, these are both things that do affect 
high-income people. But I think what is important is, when one 
is looking at or talking about a package, I think one needs to 
see what is in the package, what it is that we are paying for, 
and what are the offsets you use.
    Senator Portman. Yes. Let us just look at this logic just 
for a second. Mr. Chairman, please indulge me. So you are 
saying that you would insist on raising taxes on wealthier 
individuals in order that wealthier individuals could pay more 
to the government in a way, by the way, that the Congressional 
Budget Office says is also revenue, which is premiums being 
paid to the government. Is that the logic?
    Ms. Burwell. Senator, as the President's budget is 
presented, it has a number of different elements that do 
everything from corporate tax reform to other things. That is 
why I actually think it is important to look at a package in 
its entirety to understand those ramifications for whether it 
is high-income people or other beneficiaries.
    Senator Portman. I know my time is expiring here. Let me 
just make the obvious point that it is going to be very 
difficult for us to take even the baby steps forward on deficit 
reduction if we cannot even agree that, when people have to pay 
more to the government, that that is something that can be done 
outside of them having to pay more to the government. In other 
words, the logic does not seem to fit for me.
    I hope we can begin to make progress on these issues. I am 
hopeful that, given your background at OMB, that, despite what 
you have said here today, that you would be willing to work 
with us on that and other issues to make some steps in the 
right direction to deal with these long-term deficit problems.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Portman.
    Senator Schumer?
    Senator Schumer. Thank you, Director Burwell. I am 
delighted you are here. You are just a fabulous OMB Director, 
and I think you will make a great Secretary. I am in 
enthusiastic support, and I predict you are going to get passed 
by a large bipartisan majority. The only person's superlatives 
I could not exceed were my good friend Senator Coburn's in 
praising you for this nomination.
    I have two questions on immediate issues of concern to me. 
The first is about something called Palcohol, powdered alcohol. 
Recently, in April, the Treasury Department's TTB, the Trade 
and Tax Bureau, approved the labels for a new product called 
Palcohol. It is not in stores yet.
    It is just as it sounds. Powdered alcohol can be mixed with 
water, sprinkled onto food, even snorted. TTB rescinded its 
original approval for the labels, but only due to an issue with 
the amount of powder in each package.
    So once this is resolved, Palcohol makers have indicated 
they will seek labels for their product to be reapproved. It is 
on track to be on the shelves in the fall. It is really 
troubling to me. Obviously, you can drink a lot more alcohol in 
powdered form than in liquid form just because of the volume.
    You can put it on food. Kids can sneak it into dances, 
concerts, sporting events, in their pockets and their shoes. It 
is really troubling. The only hope we have of stopping Palcohol 
from getting on the shelves--and Mothers Against Drunk Driving 
is very concerned with this--is the FDA. You will oversee the 
FDA, so I believe that the FDA should get involved. It is our 
premier consumer agency.
    I hope they can investigate this new substance, just as 
they did with Four Loko, which was alcohol and caffeine mixed, 
which they banned. I would hope they could do the same thing 
here because that was proven unsafe. I believe this will be 
also. So all I am asking you is, will you commit to having the 
FDA look into this new alcohol product for health and safety 
reasons?
    Ms. Burwell. Senator, if I am confirmed--this is a new 
issue. This is one that I would want to understand better and 
understand exactly which jurisdiction is appropriate and why it 
is currently at Treasury, as you described, in terms of being a 
tax issue, I understand that, but why it has not previously 
been looked at by FDA.
    Senator Schumer. Yes. They have not looked at it, and I 
hope you would urge them to do so.
    Ms. Burwell. I will investigate it further, if I am 
confirmed.
    Senator Schumer. All right. Thank you.
    Next is another issue that I care about, which is Zohydro, 
where the FDA has been worse, and it is not such a new issue. 
We have opiate abuse all over the country, all over. It is in 
urban areas, suburban areas, rural areas. In 2013, October, a 
pure form of the powerful painkiller hydrocodone was approved 
by the FDA to go to market without the same tamper-proof 
protections aimed at curbing abuse that are in place for drugs 
that are less potent: Vicodin, Oxycontin.
    FDA approved this, despite the recommendations of an 
advisory panel against it and in opposition of many Senators. 
It is a serious issue that has physicians, addiction experts, 
and law enforcement officials from around the country alarmed.
    There are ways to make it tamper-proof; there are ways to 
make it so you cannot turn it into a powder and snort it or 
inject it. You know the scourge of prescription drug abuse that 
we face in every part of the country. Will you review the 
decision by the FDA on Zohydro once you get into office?
    Ms. Burwell. Senator, the issue of prescription drug abuse 
is one, being from a rural community in southern West Virginia, 
where I have seen the issues first-hand in terms of how 
damaging they are to both health as well as the economy, so 
these are things I take very seriously.
    With regard to engagement with FDA, one of the things I 
want to do, if I am confirmed, is make sure that I work with 
FDA on science-based decisions. If I am confirmed, this is a 
case where I will want to understand how the decision was made.
    Senator Schumer. Again, I hope you will be actively 
involved. I realize the necessary caution when you are sitting 
at that table, but I know who you are, and I think you will get 
involved.
    Medicare Advantage. Senator Crapo talked about this, so I 
do not want to get into details. I only have 27 seconds left. 
All I would ask you is to look at the difference. There are 
some Medicare Advantage plans that are abusive, take advantage, 
rip off the Federal Government. There are some that are great, 
many of which are in upstate New York. We have a ton of them in 
Rochester.
    I think 65 percent of all Medicare recipients are on 
Medicare Advantage, and most of them are very happy. You do not 
have to--I just would urge you to separate the wheat from the 
chaff. Some people on my side of the aisle, the minute they 
hear Medicare Advantage, they say it is terrible. It is just 
not true, not in my experience in my State. They are all across 
the board. I just hope that, when you look at Medicare 
Advantage, you will give it a careful look and not take one 
broad brush and say programs are all bad, because they are not.
    Ms. Burwell. Thank you, Senator.
    Senator Schumer. Thank you.
    The Chairman. Thank you, Senator Schumer.
    Let's see. Next is Senator Carper, then Senator Toomey.
    Senator Carper. Thank you, Mr. Chairman.
    Ms. Burwell, nice to see you. Congratulations on your 
nomination.
    Ms. Burwell. Thank you.
    Senator Carper. It is one of those deals where I have mixed 
emotions. I chair this committee that has a very close 
relationship with OMB, and, if you are confirmed for this 
position, it means we lose you at OMB. I was kidding with some 
of my colleagues. I said, you know, if Sylvia is confirmed for 
Secretary of HHS, the President is going to nominate Tom Coburn 
to be head of OMB. Two of my colleagues said, well, we cannot 
vote to confirm her. [Laughter.] So I just want to make it 
clear, that is not the plan. That is not the plan. We love 
working with you at OMB, love working with the team that you 
have put together.
    One of the things we focused on, as you well know, is how 
do we get better health care results for less money? For most 
things, in terms of being successful in government, in 
academia, in business, whatever it might be, the key is 
leadership, leadership.
    One of the reasons why the Department of Health and Human 
Services, which for years was kind of the laughingstock when it 
came to being a manager of finances, actually last year, wonder 
of wonders, they actually were auditable, but they got a clean 
audit. After 20-some years, the Department of Defense still has 
not done that, but DHHS has done that. The key is leadership, 
leadership. In terms of actually making further progress in 
reducing improper payments--what were they last year, $50 
billion in Medicare and probably $20 billion in Medicaid--the 
key is leadership.
    Talk with us about leadership, what you have learned, what 
you have brought with you to OMB, what you have learned there 
about how we can make further progress at the Department of 
Health and Human Services. What have you learned in your 
current job that will enable us to get better results for less 
money in some of these very expensive programs where we need to 
save money?
    Ms. Burwell. I think one of the things I have learned is 
being very specific about what you are trying to achieve in the 
space and very quickly getting to what are the most important 
levers. I think in our conversation today there have been a 
number of things where, actually, there are conflicting 
interests.
    I think what is important is, as the leadership, to be able 
to quickly get to the problem-solving in terms of articulating, 
what are those conflicting interests and how do you weigh how 
you go forward? It will be imperfect. In order to make the 
progress we need on Medicare fraud, it comes back to the issue 
we were discussing with regard to RACs and what tools are we 
using.
    Some of those tools will be effective, but there will be 
places where they are not, so you have to be continuously 
thinking through where is the place you are going to focus on, 
what is the core objective, and how are you going to 
continuously improve?
    Those are some of the elements that I think are making a 
difference in the results we have seen in improper payments, 
which have gone from 5.3 percent down to 3.5 for the entire 
Federal Government and which this Medicare and Medicaid issue 
will be a large portion of.
    Senator Carper. Dr. Coburn, after he introduced you, he and 
I left and we went off to meet at a secure briefing from the 
Secretary of Homeland Security. We talked about border 
security, we talked about all the folks who are coming up 
across the border now, not from Mexico, but Honduras, El 
Salvador, Guatemala. The reason why is because they are living 
hellish lives in those countries and they want to get out of 
there, and they will do almost anything to get out of there and 
to try to get up here.
    I said to Secretary Johnson and to Dr. Coburn, it is not 
enough just for us to build bigger walls, stronger walls, more 
border patrols. We have to figure out the underlying causes, 
the underlying causes that are compelling all those people who 
want to risk life and limb to get up here to this country for a 
better life.
    I want to talk about underlying causes with respect to 
obesity, underlying causes with respect to medication 
adherence. We know that obesity is a huge driver for medical 
costs in our country. Look at diabetics, all the money that we 
spend on that sort of thing. If you look at the medical 
adherence, where folks are actually able to afford their 
medicines and take their medicines, comply with their 
medication as they are directed, you see how much money we 
could save.
    Talk to me in terms of helping to get better results for 
less money with respect to those kinds of things, the Program 
of All-inclusive Care for the Elderly, where we treat our dual-
eligibles, folks that are Medicaid-eligible and Medicare-
eligible, a very thoughtful approach. It is a little more 
expensive at first, but actually we save money in the long run. 
Would you just talk about how medication adherence programs 
like the PACE program actually are going to be helpful or can 
be helpful?
    Ms. Burwell. I think it comes down to the fact that 
prevention is such an important part of reducing costs. If we 
can get in front of these things, it is actually a similar 
concept to what we were talking about earlier with regard to, 
instead of pay-and-chase, you get in front. Things are 
generally cheaper, better, and easier if you can get in front 
of them.
    I think some of the things that we need to do are, we need 
to help make sure we have the analytics that show what works in 
terms of whether it is obesity or diabetes prevention. I think 
there are models. We need to make sure those analytics are 
rigorous.
    The second thing we need to do is make sure we are 
educating and communicating. Whether that is in the space that 
we are talking about with regard to prevention or in the space 
of making sure people understand the rules of the road with 
regard to Medicare, the question is one of educating and making 
sure people have the right information.
    The last thing is about tools. In my experience, at least 
in working on some of these issues at the WalMart Foundation, 
with regard to how people use healthy eating, you can provide 
the food. So the company would reduce the cost of fruits and 
vegetables--the goal was $1 billion--taking those costs out. 
But with the communities and populations, it actually took 
educational programs to teach people. When you are shopping and 
you are a mother or a father and you are in the grocery store 
for a very short period of time, you need to get home, you need 
to fix that meal, in terms of serving and using things you have 
never used before, there is an educational component in order 
that you can actually use the tools. Share Our Strength is an 
organization that did that.
    So I think working through all the elements of first the 
proof, the education, and then the tools, are all three 
elements that I think are necessary to make the kind of 
progress we need, especially on the prevention and diabetes 
front.
    Senator Carper. Great. Thanks for your service so far. Good 
luck, Godspeed. Thank you.
    Ms. Burwell. Thank you, Senator.
    The Chairman. Thank you, Senator Carper.
    Senator Toomey?
    Senator Toomey. Thank you, Mr. Chairman.
    Director Burwell, thank you very much for being here and 
for very open and cooperative discussions that we have had 
leading up to this. I have a couple of questions for you.
    First is about Alzheimer's. We talked about this a little 
bit in my office. It is estimated that over 5 million Americans 
have been diagnosed with Alzheimer's. My understanding is that 
about 11 percent of all Americans over the age of 65 and 
something like a third, 33 percent of all Americans over the 
age of 85, have Alzheimer's.
    It seems that if you live long enough, chances are very, 
very high you are going to get Alzheimer's. It is 100-percent 
fatal. We have no cure. We have no meaningful treatment really, 
even. Yet in fiscal year 2013, only 1.7 percent of the NIH 
budget went to Alzheimer's research. Does that strike you as 
proportionate to the challenges that Alzheimer's presents?
    Ms. Burwell. With regard to the budget and Alzheimer's, our 
overall plan on Alzheimer's, there were increases. But I think 
you know, on the discretionary side, for anything to get 
increases in the current budget environment was a very 
difficult thing to do.
    Senator Toomey. No, I am talking about within the 
allocation that goes to NIH, the $30 billion that they get, 
they then control where that goes. That does not get 
appropriated by Congress specifically. Does 1.7 percent sound 
about right?
    Ms. Burwell. I think that the question of what is the right 
percentage is something that I actually, if I am confirmed, 
would want to spend time with Francis Collins on, to find out 
how they think about distribution. It is one of the issues you 
and I discussed, and I did follow up to try to find out exactly 
how it is done. A lot of it is done based on history. When one 
does something based on history and there are changes, one may 
need to reexamine.
    Senator Toomey. Well, I appreciate that, and I hope you 
will revisit that, because the history has changed. Alzheimer's 
has become ever more serious and grave a threat.
    I want to follow up briefly on Senator Portman's discussion 
with you, because I have to say I do find it troubling, at 
least what I understood you to be saying. If the idea seems to 
be that Republicans and the President's budget have both 
broadly felt that it is appropriate to ask very wealthy 
Americans to pay more for the Medicare benefits they get, it is 
disconcerting to hear that the price for getting an agreement 
to ask wealthy Americans to pay more for their Medicare is to 
raise taxes on wealthy Americans. It is going to be hard to 
reach agreement if something as common-sense as asking wealthy 
Americans to pay more for their Medicare has to come at the 
price of, in addition, raising taxes.
    Ms. Burwell. Senator, I think when one thinks about it, and 
why I talked about an entire package, is some of the revenue 
raisers and things in the President's budget are not like that. 
There are elements of the President's budget on the revenue 
side that are actually in the Camp plan in terms of what has 
been proposed on the House side, but have been proposed by 
Republicans. There is overlap.
    That is why I actually think what is important in most of 
the issues that we are talking about today, whether on the 
health care side or on the deficit side, is actually to look at 
the specifics, to actually put together pieces and plans. I 
think when we all try to take a piece out, that that becomes 
difficult. If we can look at it in its entirety, I think we can 
make progress.
    Senator Toomey. Well, look, I am in favor of a broad, 
comprehensive reform, but if that remains as elusive as it has 
been, a simple idea of asking the wealthiest Americans to pay 
more for the benefit they get strikes me as a very reasonable 
thing in and of itself. I would hope we do not have to raise 
taxes on people to get there.
    But I want to follow up on a separate issue which you and I 
discussed, and that is the budget reclassification of the risk 
card or payment. So my understanding is that the payments that 
will go to insurers or come from insurers now that the Federal 
Government is in partnership financially with the health 
insurers, that that has gone from what would have been its own 
account to a CMS general program management account.
    As you and I have discussed, my interest is just to ensure 
that we will have transparency in this account. I am hoping 
that you can commit that, for whatever reason that was done, 
and at least on an annual basis, we will be able to know how 
much money came from insurers or goes to insurers through this 
account, what the source was, whether it is a surplus or 
whether it is an expense.
    Ms. Burwell. Senator, as you and I had the chance to 
discuss, this is part of a larger rulemaking at OMB, it is part 
of 12866, which is an executive order which says I cannot 
discuss specifics. In general terms, what I would like to say 
is, Senator, this is something I want to work with you on with 
regard to the question of transparency.
    I hear what it is about, which is knowing the numbers of 
what comes in and what goes out. I think that is the 
fundamental question you are asking and one that I would look 
forward to working with you on. Having been at OMB and worked 
on budgets and accounts, I think that is something I would like 
to work----
    Senator Toomey. Does the rule that restricts you from 
commenting on rules forbid you from making a commitment to 
having transparency in this account?
    Ms. Burwell. With regard to the commitment to transparency, 
that is something that I think we have talked about throughout 
this hearing, which is, transparency and accuracy are the two 
things that I want to do in a timely fashion. This committee 
has my commitment on that.
    Senator Toomey. All right. Thank you, Mr. Chairman.
    The Chairman. Staying in the State of Pennsylvania, Senator 
Casey.
    Senator Casey. Mr. Chairman, thanks very much.
    Director, I know we are getting to the end, so we are 
rounding--whatever the baseball analogy is--we are getting 
close to home plate. So we are grateful for your patience, we 
are grateful for your testimony and your willingness to serve, 
again in very difficult public service, so we are grateful for 
that. I know we had a chance to discuss some children's health 
insurance issues in the Health, Education, Labor, and Pensions 
Committee.
    I was noting that we do not have a lot of time for 
questions beyond maybe the two that I have, but just some of 
the numbers in Pennsylvania on enrollment have been pretty 
significant. I know we have all heard the national numbers, 8 
million enrolled, almost 5 million in the Medicaid Children's 
Health Insurance Program area. I know that Senator Rockefeller 
has done so much work on both programs for so many years.
    In Pennsylvania, the marketplace plan selection is a little 
more than 318,000 in Medicaid, CHIP enrollment is almost 
41,000, a little shy of that. So almost 360,000 people, so some 
big numbers.
    But I will move from ACA to at least two children's issues. 
One is title IV-E waivers regarding child welfare. We have in 
our State, as many States do, counties taking advantage of that 
waiver, where they are working to make sure they are trying to 
invest in 
evidence-based programs and incentives to reduce the long stays 
in what we used to call group homes in Pennsylvania to try to 
get children into better settings, but also to make sure that, 
as we do that, we are using the evidence-based strategies.
    We have five counties in our State, five out of 67, that 
have used that waiver--two big ones, Allegheny and 
Philadelphia, among the five. But I would ask you to work with 
us on, I guess, two aspects of this: working for comprehensive 
reform of child welfare, number one, and also, as we do that, 
to help all children in that system; and secondly, to promote 
as best we can better outcomes and 
evidence-based practices.
    So I would just ask for your commitment to work with us on 
that, and I would welcome anything you would want to say about 
it.
    Ms. Burwell. Senator, I would like to work with you on 
that. These issues are issues that I think are very important. 
Even in my current role at OMB, in terms of evidence-based 
practices and these issues, one of the things that I was very 
interested in and highly supportive of was the psychotropic 
drug provision that is part of the President's budget, which is 
analytically based. Whether you use the numbers that the 
administration has, which are that 17 percent of all children 
in the system are on psychotropic drugs, or up to 34 percent in 
terms of some of the other studies, we should be using data to 
understand where things are going right or where things can be 
improved. So I would look forward to working with you across 
the range of issues for children in this space.
    Senator Casey. I appreciate that.
    Secondly and finally, one of the areas of policy which 
probably does not get a lot of national attention but is 
showing some promise is the so-called CCMI program, where you 
have the Centers for Medicare and Medicaid Innovation. I know a 
lot of the innovation is focused on Medicare, and appropriately 
so.
    What I hope, though, is that through both Medicaid and 
CHIP, through both of those programs and within the rubric of 
CCMI, we can have enough testing of new models so that we can 
get some of the benefits of that innovation for children in 
addition to the results that have prevailed for Medicare, and I 
would ask for your help on that.
    Ms. Burwell. Yes. I think we do want to get the benefits 
for both systems. Both systems are important. We actually have 
examples in our own budget, the President's budget, where we 
actually are taking things that are working in Medicaid and 
trying to have those shift to Medicare in terms of things that 
are working, in terms of effective health care that is cost-
effective.
    Senator Casey. Well, I appreciate that. I know I am out of 
time, but I wanted to just make one final point. We know that 
anyone who has had anything to do with child advocacy over many 
years would tell us that children are not small adults, so we 
need specialized strategies and approaches for kids that may be 
different from how we treat or care for adults. But we are 
grateful for your commitment.
    Ms. Burwell. Thank you. My 6\1/2\- and 4\1/2\-year-old 
prove that every day.
    Senator Casey. Thank you.
    The Chairman. Very good.
    Senator Cantwell?
    Senator Cantwell. Thank you, Mr. Chairman.
    Director Burwell, thank you very much for your willingness 
to serve and thank you for your time in the Pacific Northwest: 
10 years as the head of the Bill and Melinda Gates Foundation 
for Global Development and then on the board at the University 
of Washington Medical Center. I am sure that time on the board 
will come in very helpful here in this post.
    I wanted to ask you about two things as they relate to the 
Affordable Care Act and priorities, and see how you plan to 
manage them. One, section 3007--I do not expect you to know 
that section, but, knowing Sylvia Burwell, she actually might 
know that section--but we are talking about altering the 
payment formula by adding a quality-to-cost ratio that will 
reward providers for low-cost quality and penalize providers 
that do not--essentially, it moves the Nation out of our 
current model to an outcome-based model.
    Now, we had some discussion--this is part of the 
implementation. I think the Secretary was required to start a 
process this year or the beginning of the formulation of the 
regulation this year, and probably it had to be published next 
year, and then the SGR bill that we were recently looking at 
had a provision in here that reformed that.
    So what steps do you plan to take on implementing that 
value-based payment system? Are you for what was in the SGR 
bill? Are you planning on just proceeding with the rule? Do you 
think that that is a better process? Tell me your philosophy on 
the implementation of this provision.
    Ms. Burwell. With regard to the specifics of implementation 
that are currently at HHS, that is something, if confirmed, I 
want to look at. But with regard to the question of philosophy, 
I believe that the question of how we are going to be able to 
articulate quality and connect payment to quality will be a 
very important part of transitioning the entire system; that 
is, transitioning the system in terms of government and how we 
pay, but also the private sector.
    I think what we will have to do is work on it from the 
perspective of the government side and how we do it. It is a 
complex thing in terms of, is the quality of your hip surgery 
because the surgeon did the front surgery versus the back? Is 
it the anesthesiologist? How do we determine those things? But 
I think what we need to do is work to get measures in place and 
start making progress. I also think that we can turn to the 
private sector, because, in some cases, they are already doing 
that as well.
    Senator Cantwell. Well, that is my point. The Pacific 
Northwest has already done this, already shown great results.
    Ms. Burwell. Yes.
    Senator Cantwell. So now the debate here in Washington 
seems to be, can we overturn the Affordable Care Act or ignore 
this, or can we put a provision in? I did support the SGR 
proposal, but should we put a provision in that gets the rest 
of the country to start doing this but in a very slow, 
incremental way, or do we go with the results that we know all 
across the country are working and get it implemented and push 
people to implement it in a more rapid fashion, given what we 
are looking at from a population bubble, and retirement, and 
everything else?
    We need to make these reforms. So I hope that you 
understand you are going to hear a lot from me and from people 
from the Pacific Northwest. We do not want to go slow, we want 
to go faster. We do not want to see proposals that some of my 
colleagues are proposing on Social Security or Medicare to 
privatize them instead of doing these important outcome-based, 
better performance reforms.
    I will note, even in the Affordable Care Act, there were a 
lot of States that took us up on rebalancing from nursing home 
care to community-based care, saving lots of money. These are 
States and Governors that said they did not even like the Act, 
and now they are implementing one of the biggest cost savings 
that exists. So, I hope we will run faster on that.
    The second issue is on the implementation of the basic 
health plan, which was an option in the legislation to assist 
those people who earn too much to qualify for the Medicaid 
coverage. But the private coverage struggle to make marketplace 
premiums--this was something that we gave States an option on, 
so I want to know what you will do.
    The Department was very late in getting those rules 
developed. They finally came out in September. They were 
supposed to be done previously, so I want to know what you will 
do to make sure that States who choose that option will be 
fully operational by January 1, 2015.
    Ms. Burwell. Senator, if I am confirmed, one of the things 
I want to do is quickly find out about the sequencing of all 
the things that need to get done and the information that 
States need to have, as well as the technology we need to get 
in place to make sure that the next year runs smoothly. That is 
something, if I am confirmed, that would be one of the first 
things to do, to understand who needs which information when 
and how we are going to work to implement.
    Senator Cantwell. If you do not know enough about it right 
now, you do not need to discuss it, but you can write it. But I 
need an answer from you whether you support the basic health 
plan as an option for States as written in the statute. The 
agency has ignored that program for a long time, finally got it 
together, yet has put States behind. So I want to get a firm 
answer from you, so you can do that for the record.
    Ms. Burwell. Certainly. I would be happy to, Senator.
    Senator Cantwell. All right. And then, just the last thing. 
Well, I guess I am 16 seconds over.
    The Chairman. Go for it.
    Senator Cantwell. Maybe I can have a little bit of extra 
time, being the last member.
    The Chairman. You can.
    Senator Cantwell. I do not know, Mr. Chairman, if anybody 
brought up GME, but on graduate medical education and paying 
for graduate medical education, I do not know what role you 
think the agency is going to play in helping identify the need 
for filling that gap of primary care physicians that we need. 
Obviously we are not going to get there if we do not have a 
graduate medical education expansion.
    Ms. Burwell. So I think the President's current proposal in 
the budget does some of that expansion, in terms of making sure 
that we do two things: that we increase our providers, and that 
we target the help to primary care as you suggested and where 
we have shortages in specialties. In addition, expanding the 
National Health Service Corps is another means by which we hope 
to improve and push on getting more providers out in the field.
    The other thing is that some of the proposals in the budget 
also expand what certain government programs can benefit in 
terms of, not just the physicians themselves, but also other 
physicians' assistants and nurses, in terms of some of the 
primary care needs we have. It is a place where I think we have 
to focus and use all the tools.
    The other thing I think we have to do is to make sure that 
the money is going against what one is trying to do when one is 
doing GME and focus it on the right kinds of issues, which is 
why the proposal is focused mainly on primary care, in terms of 
the new GME proposal.
    Senator Cantwell. Yes. We think it is a good start, but 
hopefully we will have a discussion about how big the need is 
as it relates to implementing a medical home for people and why 
we need to focus on moving forward on graduate medical 
education. But thank you.
    Ms. Burwell. Thank you.
    Senator Cantwell. And thank you for your willingness to 
serve.
    Ms. Burwell. Thank you.
    The Chairman. Thank you, Senator Cantwell.
    Just a couple of additional matters, and then we are going 
to liberate you, Director Burwell. This is your second 
nomination hearing in less than a week, and we appreciate your 
answers today.
    We have focused for the most part on the agency's very 
extensive health care portfolio, and that is why I thought it 
was very good that Senator Casey began to touch on the human 
services aspect of the agency's work, and particularly programs 
like foster care and Temporary Assistance to Needy Families. 
You all have a very extensive workload there. Can you give us 
some sense of what your priorities would be on the human 
services side of your budget?
    Ms. Burwell. Senator, with regard to setting those 
priorities in those areas, in a number of my conversations with 
the members of this committee and the HELP Committee, they have 
articulated some of those priorities.
    I would want to, as we discussed, also hear from the 
stakeholders and from the Department itself before setting 
exactly what those priorities are, but they are broad and they 
are numerous, and they include everything from an issue that is 
in the news today--which is bio-security in terms of the MERS 
issues and issues like that--to some of the issues that we have 
been talking about in terms of FDA.
    The Administration for Community Living, I think, touches 
on some of the issues that we talked about today with regard to 
hospice and how we think about care for people in communities. 
How long can we keep people there? Is it both cost-effective 
and better in terms of quality? So I think the range of those 
issues is something I want to hear about and then quickly set 
priorities.
    The Chairman. And by way of wrapping up, just a couple of 
comments. First, on the Medicare Advantage issue, I think you 
know that the Pacific Northwest has some of the highest rates 
of utilization in Medicare Advantage. It is good, Medicare 
Advantage.
    We have been at it for decades in my hometown and Senator 
Cantwell's hometown. Obviously, we heard Senators on both sides 
of the aisle touch on it. I just want to walk through what I 
heard, because it was very constructive.
    You made the point that the premiums are down, the coverage 
is up, and a number of the questionable operators have been 
squeezed out. I think that is very good, because I remember 
some of the tremendous abuses we saw in the early days of 
Medicare Advantage. We had oversight hearings on it in this 
committee, and it was just really gross, some of those 
practices. That has really been driven out of the field.
    In response to the Senators' questions, Senator Crapo, 
Senator Schumer, and others, you essentially said--and I think 
this is where the Senators were going--that we ought to proceed 
carefully and get the latest data and work through these 
various issues to essentially continue on the track. That is 
what I heard the Senator say, and I think that is how you 
addressed it, and I think that is very welcome and very 
constructive.
    The last point I want to mention is a reflection on the 
last 2\1/2\ hours and watching you also in the other committee 
that held a hearing on your confirmation. We have been at it 
for something like 2\1/2\ hours or thereabouts, and from the 
beginning, where you had this extraordinary bipartisan send-off 
from Dr. Coburn and Chairman Rockefeller, who I would note has 
not budged for the last 2\1/2\ hours, your ultimate loyalist I 
think it would be fair to say----
    Ms. Burwell. Thank you.
    The Chairman [continuing]. What you have done is, in my 
view, tried to respond to important questions about a landmark 
law and big health care challenges in a way that ought to bring 
people together. That is why I referenced your point with 
respect to Part D, because a lot of the stories in the early 
days about the ACA resembled the early stories about Part D. 
Part D, we now know, has come in at 30 percent-plus in terms of 
cost reduction beyond what CBO projected, and the satisfaction 
among seniors has been enormous.
    Senators, no matter how they voted on Part D, came together 
and said, we are going to try to make this work, and we are 
going to try to do that on this committee. I think you can be a 
very powerful agent, once you are confirmed--and we are going 
to do everything we can to make that possible quickly--in terms 
of trying to bring people together and to get us to that point 
that you touched on, post the enactment of Part D, of trying to 
bring people together regardless of how they voted.
    So that is my take-away from the last 2\1/2\ hours: that 
you can be that kind of member of the Cabinet to really help us 
cut through some of the polarization we have seen over the last 
few months. I think that it will be an extraordinary service to 
the country.
    Senator Rockefeller, is there anything you would like to 
add?
    Senator Rockefeller. Only that, in a Senate so full of 
toxicity and partisanship, I think your sort of attitude, your 
listening, your energy, your knowledge, your ability to defer 
properly things which you have not yet done because you are 
still in another job but are anxious to get at, is in a sense 
what the chairman is saying. That is, how do you begin to take 
down the walls on a subject so enormously important as the 
provision of health care, such an enormous piece of legislation 
with such vast implications for the country? I think it is very 
interesting, just in your performance this afternoon, that also 
obviously, in your position that I am sure you are going to 
have, you seem to just fit very comfortably.
    Ms. Burwell. Thank you, Senator. Thank you.
    The Chairman. Director Burwell, let me just close by 
thanking my colleagues on the other side of the aisle, led by 
Senator Hatch. They have been very helpful in terms of allowing 
us to move forward. They have indicated that members could have 
until 6 p.m. on Thursday to submit questions for the record, so 
clearly we are moving ahead.
    It is my intent to work very closely with Senator Hatch and 
all committee members to report your nomination promptly after 
the answers to the questions are received. We thank you for 
your patience.
    With that, the Finance Committee is adjourned.
    [Whereupon, at 4:56 p.m., the hearing was concluded.]
                            A P P E N D I X

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