    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                        THE FISCAL YEAR 2017 HHS BUDGET

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

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               FEBRUARY 24, 2016

                                   __________

                               Serial No. 114-118

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

                                 _________

                    U.S. GOVERNMENT PUBLISHING OFFICE

     20-087                  WASHINGTON : 2017
    ____________________________________________________________________
     For sale by the Superintendent of Documents, U.S. Government Publishing Office,
    Internet:bookstore.gpo.gov. Phone:toll free (866)512-1800;DC area (202)512-1800
      Fax:(202) 512-2104 Mail:Stop IDCC,Washington,DC 20402-001

                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman
    JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
      Chairman Emeritus                    Ranking Member
    ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
    JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
    JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
    GREG WALDEN, Oregon                  GENE GREEN, Texas
    TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
    MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
    MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
      Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
    STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
    ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
    CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
    GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
    LEONARD LANCE, New Jersey            JERRY McNERNEY, California
    BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
    PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
    DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
    MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
    ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
    H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
    GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
    BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III,
    BILLY LONG, Missouri                     Massachusetts
    RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
    LARRY BUCSHON, Indiana
    BILL FLORES, Texas
    SUSAN W. BROOKS, Indiana
    MARKWAYNE MULLIN, Oklahoma
    RICHARD HUDSON, North Carolina
    CHRIS COLLINS, New York
    KEVIN CRAMER, North Dakota
                             Subcommittee on Health

                         JOSEPH R. PITTS, Pennsylvania
                                     Chairman
    BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
      Vice Chairman                        Ranking Member
    ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
    JOHN SHIMKUS, Illinois               LOIS CAPPS, California
    TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
    MICHAEL C. BURGESS, Texas            G.K. BUTTERFIELD, North Carolina
    MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
    CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
    LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
    H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
    GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
    BILLY LONG, Missouri                 JOSEPH P. KENNEDY, III,
    RENEE L. ELLMERS, North Carolina         Massachusetts
    LARRY BUCSHON, Indiana               TONY CARDENAS, California
    SUSAN W. BROOKS, Indiana             FRANK PALLONE, Jr., New Jersey (ex
    CHRIS COLLINS, New York                  officio)
    JOE BARTON, Texas
    FRED UPTON, Michigan (ex officio)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Joseph R. Pitts, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................     1
        Prepared statement...........................................     3
    Hon. Kathy Castor, a Representative in Congress from the State of
      Florida, opening statement.....................................     4
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, opening statement....................................     6
        Prepared statement...........................................     7
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     8

                                   Witnesses

    Sylvia Mathews Burwell, Secretary, Department of Health and Human
      Services.......................................................    10
        Prepared statement...........................................    12
        Answers to submitted questions...............................    73

                        THE FISCAL YEAR 2017 HHS BUDGET

                                  ----------

                          WEDNESDAY, FEBRUARY 24, 2016

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:00 a.m., in
    room 2123 Rayburn House Office Building, Hon. Joe Pitts
    (chairman of the subcommittee) presiding.
        Members present: Representatives Pitts, Barton, Guthrie,
    Whitfield, Shimkus, Murphy, Burgess, Blackburn, McMorris
    Rodgers, Lance, Griffith, Bilirakis, Long, Ellmers, Bucshon,
    Brooks, Collins, Upton (ex officio), Engel, Capps, Schakowsky,
    Butterfield, Castor, Sarbanes, Matsui, Schrader, Kennedy,
    Cardenas, and Pallone (ex officio).
        Staff present: Gary Andres, Staff Director; Mike
    Bloomquist, Deputy Staff Director; Leighton Brown, Press
    Assistant; Rebecca Card, Assistant Press Secretary; Karen
    Christian, General Counsel; Jerry Couri, Senior Environmental
    Policy Advisor; Jessica Donlon, Counsel, Oversight and
    Investigations; Paul Edattel, Chief Counsel, Health; David
    McCarthy, Chief Counsel, Environment and the Economy; Carly
    McWilliams, Professional Staff, Health; Katie Novaria,
    Professional Staff, Health; Tim Pataki, Member Services
    Director; James Paluskiewicz, Professional Staff, Health;
    Graham Pittman, Legislative Clerk, Health; Mark Ratner, Policy
    Advisor to the Chairman; Michelle Rosenberg, GAO Detailee,
    Health; Chris Santini, Policy Coordinator, Oversight and
    Investigations; Chris Sarley, Policy Coordinator, Environment
    and the Economy; Adrianna Simonelli, Legislative Associate,
    Health; Heidi Stirrup, Policy Coordinator, Health; John Stone,
    Counsel, Health; Sophie Trainor, Policy Advisor, Health; Josh
    Trent, Deputy Chief Counsel, Health; Christine Brennan,
    Minority Press Secretary; Jeff Carroll, Minority Staff
    Director; Waverly Gordon, Minority Professional Staff Member;
    Tiffany Guarascio, Minority Deputy Staff Director and Chief
    Health Advisor; Una Lee, Minority Chief Oversight Counsel;
    Rachel Pryor, Minority Health Policy Advisor; Tim Robinson,
    Minority Chief Counsel; Samantha Satchell, Minority Policy
    Analyst; Matt Schumacher, Minority Press Assistant; Andrew
    Souvall, Minority Director of Communications, Outreach and
    Member Services; Kimberlee Trzeciak, Minority Health Policy
    Advisor; and Arielle Woronoff, Minority Health Counsel.

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

        Mr. Pitts [presiding]. The subcommittee will come to order.
        This is a pretty busy day. A lot of members will be here
    today. I will have to run a tight gavel, so everyone can get an
    opportunity to speak today.
        The Chair will recognize himself for an opening statement.
        Today the Health Subcommittee will examine the President's
    budget for fiscal year 2017 for the Department of Health and
    Human Services. We are grateful the Secretary has agreed to
    appear before this subcommittee. Certainly there are a number
    of issues in the budget and at HHS that members will be
    interested in discussing.
        I appreciate the strong bipartisan record this committee
    has in working with Secretary Burwell, especially our work to
    solve the Medicare physician payment issue last year. Our
    committee has passed more bipartisan bills into law than any
    other committee in Congress, and we appreciate Secretary
    Burwell's partnership to help make that possible.
        However, as I reviewed the budget, I have to say I am
    disappointed. This budget does not balance. Ever. The CBO
    warned that under current law the deficit will balloon from
    $616 billion this year to $1.4 trillion by 2026. Medicare is on
    course to be insolvent and unworkable in the year 2026. Federal
    debt will soar from $14 trillion this year to about $24
    trillion by 2026.
        Economists warn us that our runaway federal health spending
    will eventually lead to an economic crisis, and drastic and
    disruptive cuts, higher taxes that harm workers and families,
    or some combination of all of these outcomes. I believe
    Congress and the administration have a moral responsibility and
    duty to solve the problems before they fail the millions of
    people who depend on them.
        Unfortunately, our long-term spending challenges have been
    worsened by changes to federal programs in recent years.
    Specifically, ObamaCare is over $2 trillion in new entitlement
    spending. Yesterday's Washington Post highlighted a new report
    from the HHS Office of Inspector General which examined HHS's
    mismanagement of Healthcare.Gov. As the report makes clear,
    there was more that failed beyond just a Web site.
        The OIG concluded, ``We found that HHS and CMS made many
    missteps throughout development and implementation that led to
    the poor launch. Most critical was the absence of clear
    leadership, which caused delays in decisionmaking, lack of
    clarity in project tasks, and the inability of CMS to recognize
    the magnitude of problems as the project deteriorated...CMS's
    organizational structure and culture also hampered progress.''
        Today a new report out from the GAO has new findings
    regarding mismanagement of the federal marketplace. The
    auditors find CMS is, quote ``passive'' in their approach to
    fraud prevention and has failed to resolve major
    inconsistencies in applications in 2014 and 2015. Because of
    re-enrollments and CMS's poor oversight, these problems are
    largely still ongoing.
        Time and time again, HHS seems to be ignoring or flouting
    the law. For example, one issue I continue to be concerned
    about is the matter of illegal actions taken by the California
    Health Department with respect to their unilateral action
    requiring all health plans to cover abortions. This is in
    direct violation of federal law under the Weldon amendment and
    a direct assault on conscience rights.
        As you know, individuals have been harmed since August
    22nd, 2014 and filed complaints with the HHS Office of Civil
    Rights. And I have pleaded with you, Madam Secretary, give this
    matter your immediate attention and redress. To my knowledge,
    no action or redress has been taken by your agency. So, we hope
    and expect to receive real answers today.
        Madam Secretary, thank you for being here. We look forward
    to your testimony.
        I yield the remainder of my time to Mr. Burgess.
        [The prepared statement of Mr. Pitts follows:]

                   Prepared statement of Hon. Joseph R. Pitts

        Today, the Health Subcommittee will examine the President's
    budget for fiscal year 2017 for the Department of Health and
    Human Services. We are grateful the Secretary has agreed to
    appear before this Subcommittee. Certainly there are a number
    of issues in the budget and at HHS that Members will be
    interested in discussing.
        I appreciate the strong bipartisan record this Committee
    has in working with Secretary Burwell, especially our work to
    solve the Medicare physician payment issue last year. Our
    committee has passed more bipartisan bills into law than any
    other committee in Congress. We appreciate Secretary Burwell's
    partnership to help make that possible.
        However, as I reviewed the budget, I have to say I am
    disappointed. This budget does not balance. Ever.
        The CBO warns that under current law, the deficit will
    balloon from $616 billion this year, to $1.4 trillion by 2026.
    Medicare is on course to be insolvent and unworkable in 2026.
    Federal debt will soar from $14 trillion this year to about $24
    trillion by 2026.
        Economists warn us that our runaway federal health spending
    will eventually lead to an economic crisis, drastic and
    disruptive cuts, higher taxes that harm workers and families--
    or some combination of all of these outcomes.
        I believe Congress and the Administration have a moral
    responsibility and duty to solve the problems before they fail
    the millions of people who depend on them.
        Unfortunately, our long-term spending challenges have been
    worsened by changes to federal programs in recent years--
    specifically Obamacare's over $2 trillion in new entitlement
    spending.
        Yesterday's Washington Post highlighted a new report from
    the HHS Office of Inspector General, which examined HHS'
    mismanagement of HealthCare.gov. As the report makes clear,
    there was more that failed beyond just a Web site. The OIG
    concluded:
        "[W]e found that HHS and CMS made many missteps throughout
    development and implementation that led to the poor launch.
    Most critical was the absence of clear leadership, which caused
    delays in decision-making, lack of clarity in project tasks,
    and the inability of CMS to recognize the magnitude of problems
    as the project deteriorated. CMS's organizational structure and
    culture also hampered progress.''
        Today, a new report out from the GAO has new findings
    regarding mismanagement of the Federal Marketplace. The
    auditors find CMS is ``passive'' in their approach to fraud
    prevention, and has failed to resolve major inconsistencies in
    applications in 2014 and 2015. Because of re-enrollments and
    CMS's poor oversight, these problems are largely still ongoing.
        And time and time again, HHS seems to be ignoring or
    flouting the law.
        For example, one issue I continue to be concerned about is
    the matter of illegal actions taken by the California Health
    Department with respect to their unilateral action requiring
    all health plans cover abortions. This is in direct violation
    of federal law under the Weldon amendment and a direct assault
    on conscience rights.
        As you know, individuals have been harmed since August 22,
    2014 and have filed complaints with the HHS Office of Civil
    Rights. I have pleaded with you to give this matter your
    immediate attention and redress. To my knowledge, no action or
    redress has been taken by your agency. We hope and expect to
    receive real answers today.
        Madam Secretary, thank you for being here and we look
    forward to your testimony.

        Mr. Burgess. Thank you, Mr. Chairman.
        Secretary, welcome and thank you for coming to our
    subcommittee.
        Look, the President and I are never going to agree on the
    Affordable Care Act, but I do remain committed to making real
    improvements to healthcare right now for the American people.
    Unfortunately, the administration has persistently refused to
    acknowledge the failures within the Affordable Care Act, making
    it near impossible for Congress to reduce harm to people going
    forward.
        The chairman already outlined the statements in the Office
    of Inspector General's report that recently became public. I
    hope that the agency will share with us the lessons learned
    from this exercise. Clearly, there will be other
    administrations; there will be other people in charge of the
    agency in the future.
        The lessons learned from the failures at healthcare.gov I
    think are important. I would like for you to share with us what
    the total cost of the Web site was. The published figure of
    $830 million I believe is way too low. I would like for you to
    share with us what the actual cost was. Were you able to recoup
    any of the costs from the product that was not delivered and
    was anybody paid a performance bonus for actually supplying a
    flawed product to the American people?
        I think these are questions that ongoing will need to be
    answered. We need to know what lessons your agency has learned
    from this process.
        Thank you, Mr. Chairman. I will yield back.
        Mr. Pitts. The Chair thanks the gentleman.
        Now, standing in for Ranking Member Green is Representative
    Castor of Florida. The Chair recognizes her for 5 minutes for
    an opening statement.

      OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF FLORIDA

        Ms. Castor. Well, thank you, Mr. Chairman.
        Good morning, Madam Secretary.
        You and the administration have crafted a budget that works
    for American families. It strengthens Medicare, extends the
    life of the Hospital Trust Fund, Medicare Part A, for 15 years.
    It makes vital investments in cancer research, Alzheimer's
    research, and in the NIH, and keeps those fabulous researchers
    across the country on the job, finding the treatments and cures
    of the future.
        I want to thank you for answering the call for help from
    communities and families across the country with more robust
    resources for mental healthcare and for the heroin prescription
    drug opioid epidemic. And you have done this at the same time
    while the overall budget reduces deficits by $2.9 trillion over
    the next 10 years, and that is on top of the $4 to $5 trillion
    deficit reduction that we have achieved together since 2010.
        I would like to encourage you during your testimony to
    discuss the progress of states that are taking care of their
    citizens through the expansion of health services under
    Medicaid. This is smart fiscal policy, and the majority of
    states have realized that. But it is difficult to reconcile
    that we have the majority of states that have done it and,
    then, some states that have not, including my home State of
    Florida, because that puts my citizens at a disadvantage. So, I
    want to thank you for offering hope to those citizens in those
    states that have yet to expand Medicaid.
        Back to mental health, this is directly related to our
    ability to serve our neighbors with mental health services
    because the most important reform we can bring to communities
    for mental health would be expansion of Medicaid in those
    states.
        But on your watch, for the first time ever, more than 90
    percent of Americans have health coverage, including 1.7
    million in Florida this year on healthcare.gov. The Medicare
    Advantage premium has declined since the ACA became law. In
    Florida, $1.3 trillion is being put back into the pockets of my
    neighbors through closing the donut hole under the ACA. And the
    growth in premiums for employee-sponsored health insurance has
    slowed down.
        But we have more work to do. We will look forward to
    hearing your testimony.
        At this time, I yield a minute to my good friend Mr.
    Kennedy of Massachusetts.
        Mr. Kennedy. Thank you, Congresswoman, for yielding.
        Madam Secretary, thank you for coming. Thank you. It is
    wonderful to see you again.
        Under your leadership, the Department of Health and Human
    Services confronts some of our nation's most stubborn and
    systemic challenges head-on. With the reforms to Medicaid
    outlined in the President's budget, we can enroll millions of
    vulnerable Americans who remain uninsured and risk losing a
    lifetime of savings due to a hospital bill.
        Expanding access to Medicaid is especially critical because
    the program's beneficiaries are twice as likely to face mental
    illness than the general population. But we can't limit our
    response to those enrolled in Medicaid. With an increase of
    $115 million for the mental health programs under SAMHSA,
    investments in community early intervention programs, and an
    end to the 190-day lifetime limit on inpatient psychiatric
    facilities, we can ensure millions of Americans receive the
    treatment they need and deserve.
        In the midst of an opiate epidemic that has had a
    devastating impact on the communities represented by everyone
    on this dais today, your request for a billion dollars to
    increase access and treatment should be quickly considered and
    approved by Congress.
        I also want to thank you and recognize your commitment to
    community health centers where the budget makes a sizeable
    investment, and also thank you and your staff for continuing to
    speak with our governor as we work on Medicaid waiver
    negotiations and our hospital system.
        I am looking forward to hearing you talk more about these
    projects in some detail and ask you to just let us know how we
    can be a partner in your work ahead.
        Thank you, and I yield back.
        Mr. Pitts. The Chair thanks the gentlelady and now
    recognizes the chairman of the committee, Mr. Upton, 5 minutes
    for an opening statement.

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

        Mr. Upton. Well, thank you, Mr. Chairman.
        Secretary Burwell, welcome back to the committee. Although
    we do have policy differences, I appreciate the professionalism
    that you have brought to the job from day one. It is most
    appreciated. I know that you were in Michigan last week
    regarding the tragic Flint water crisis. I appreciated the call
    last Friday when you were leaving and I thank you for your
    attention and look forward to closely working together to
    ensure that we make it up to the residents of Flint for the
    many unacceptable failures that have occurred at all levels.
    And I really appreciate that.
        We have also enjoyed our partnership in 21st Century Cures.
    You and your team have been terrific during this 2-year effort,
    working closely and providing valuable insight, technical
    assistance, and guidance, as we developed a bill that achieved
    344 votes in the House. The momentum is building as the Senate
    now has taken real and bipartisan steps forward through their
    parallel innovation project. With a little more hard work and
    bipartisan cooperation, we are going to be able to get this
    done for patients across the country looking for hope for safer
    cures.
        And we are excited with President Obama tasking Vice
    President Biden to lead a moonshot effort to cure cancer. I
    know that you are part of that leadership team. Surely, we will
    bring a jolt of energy for this very important project, the
    goals of which are consistent with the bill passed by the House
    last summer. It is important to remember that time is a very
    precious resource, especially for countless patients across the
    country who can't wait for another task force. The clock is
    ticking. They need action and they need cures now.
        It is my belief, shared by Chairman Alexander, that the way
    for policy to be enacted through 21st Century Cures and the
    Senate's innovation project is by working together. We have
    done the hard, time-consuming work of listening, soliciting
    ideas, listening some more. Legwork is done and, as I
    mentioned, 344 votes in the House. The policies have been
    pressure-tested. We look forward to combining our efforts and
    the Vice President's best ideas into one unified bill to
    improve our healthcare innovation ecosystem. We have got a
    great opportunity that we know that we have to deliver.
        This hearing also gives us an opportunity to discuss the
    important work of putting our fiscal house in order. As
    astounding $1 trillion now flows through HHS. We have
    significant concerns that our budgetary path is on a dangerous
    trajectory towards disaster. Under this President's budget, the
    national debt will more than double than when the President
    took office. The projections cannot be ignored, especially as
    health and entitlement spending will be the main factor in
    driving additional debt on top of future generations. We can
    and must do better.
        And I yield the balance of time to Mrs. Blackburn.
        [The prepared statement of Mr. Upton follows:]

                     Prepared statement of Hon. Fred Upton

        Secretary Burwell, welcome back to the committee. Although
    we do have our policy differences, the professionalism that you
    have brought to the job is appreciated. I know you were in
    Michigan last week regarding the tragic Flint water crisis. I
    thank you for your attention and look forward to closely
    working together to ensure we make it up to the residents of
    Flint for the many unacceptable failures that have occurred at
    all levels.
        We have also enjoyed our partnership in 21st Century Cures.
    You and your team have been terrific during this over 2-year
    effort, working closely and providing valuable insight and
    guidance as we developed a bill that achieved 344 votes in the
    House. The momentum is building as the Senate has taken real
    and bipartisan steps forward through their parallel Innovation
    project. With a little more hard work, and bipartisan
    cooperation, we will be able to get this done for patients
    across the country looking for hope for safer cures.
        We were excited with President Obama tasking Vice President
    Biden to lead a ``moonshot'' effort to cure cancer. The
    leadership of the vice president will surely bring a jolt of
    energy for this important project--the goals of which are
    consistent with the bill passed by the House last summer. It is
    important to remember that time is a precious resource,
    especially for countless patients across the country who can't
    wait for another task force. They need action. They need cures
    now.
        It is my belief, shared by Chairman Alexander, that the way
    for policy to be enacted is through the 21st Century Cures Act
    and the Senate's Innovation project. We've done the hard, time-
    consuming work of listening, soliciting ideas, and listening
    some more. The legwork is done, and as I mentioned, with 344
    votes in the House, the policies have been pressure tested. We
    look forward to combining our efforts and the vice president's
    best ideas into one unified bill to improve our health care
    innovation ecosystem. We have an incredible opportunity--let's
    be sure that we deliver.
        This hearing also gives us an opportunity to discuss the
    important work of putting our fiscal house in order. An
    astounding $1 trillion now flows through HHS. We have
    significant concerns that our budgetary path is on a dangerous
    trajectory toward disaster. Under this budget, the national
    debt will more than double what it was when President Obama
    took office. The projections cannot be ignored, especially as
    health and entitlement spending will be the main factor in
    driving additional debt on top of future generations. We can
    and must do better.

        Mrs. Blackburn. Thank you, Mr. Chairman.
        Madam Secretary, we do thank you for being here.
        There are a couple of things that I will want to hit and
    hear from you, as you talk today. First of all, I think HHS
    needs to look at a regulatory model that is going to enable
    innovators. Many of those innovators and healthcare informatics
    are in Tennessee. What they find many times is lack of
    certainty and clarity. So, let's discuss that. Also,
    transparency as we work with these innovators. They are looking
    at these new delivery systems.
        Also, I know you are working on RAC reforms. We will want
    to discuss that, the RAC audit process, and look at whether or
    not a shot clock would be helpful in that.
        I appreciate your being here to give us insight into what
    the trends are with your budget and what your expectations are
    for reducing the size of that budget with your outlays.
        And so, thank you for being here, and I yield back.
        Mr. Pitts. The Chair thanks the gentlelady.
        I now recognize the ranking member of the full committee,
    Mr. Pallone, 5 minutes for an opening statement.

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

        Mr. Pallone. Thank you, Mr. Chairman.
        Thank you, Secretary Burwell, for joining us this morning.
        Today we are meeting to discuss the President's fiscal year
    2017 Health and Human Services budget proposal. As is often
    said, budgets are about priorities, and I am pleased to see
    that the President's proposed budget aligns quite well with
    what should be the top priority of this committee. That is
    ensuring access to high-quality, affordable healthcare for all
    Americans.
        First and foremost, the budget recognizes the simple truth
    the Affordable Care Act is achieving its goals. As a result of
    the ACA, 18 million Americans have gained access to both high-
    quality health insurance and the peace of mind that comes with
    maintaining coverage. Of course, more could be done, which is
    why I am pleased the President proposed additional incentives
    for the remaining states that have yet to expand Medicaid.
        Medicaid expansion has been life-changing for the millions
    of Americans that have been able to access health coverage
    through Medicaid, many for the first time in their lives. In
    the 19 states that have yet to expand Medicaid, more than 4
    million people could gain coverage. States could realize major
    savings in other parts of their budgets, and over $4 billion in
    uncompensated care costs could be avoided. Democrats have
    already introduced legislation to put the President's proposal
    into action, and Congress should act swiftly to enact that bill
    into law.
        Beyond building upon known successes, the budget also
    directs funding into known areas of need. To put it simply, our
    nation's biomedical research budget is simply inadequate. As a
    committee, we have already recognized and acted upon this fact
    when we passed the bipartisan 21st Century Cures Act. In that
    same spirit, I applaud the proposed $755 million allocated for
    NIH and FDA through the Vice President's National Cancer
    Moonshot Initiative. Over 1.6 million Americans will be
    diagnosed with cancer this year, and it is our responsibility
    to ensure that all Americans have the best shot at a cure.
        Finally, the President's budget recognizes the devastating
    effects of the heroin and opioid abuse crisis. Sadly, my home
    State of New Jersey is not immune from this epidemic. In fact,
    if every one of our New Jersey residents addicted to heroin or
    prescription opioids lived in the same city, it would hold a
    population larger than that of New Jersey's largest city.
        That is why I have introduced a comprehensive bill, H.R.
    4396, The Heroin and Prescription Drug Abuse Prevention and
    Reduction Act, to address heroin and prescription drug abuse. I
    would like to thank you for your strong leadership on this
    issue, Madam Secretary, and I urge the committee to act quickly
    to put a halt to this public health emergency.
        Finally, just as a side note, Secretary Burwell, I know I
    will not have enough time to discuss this issue today, but I
    would like to have a followup conversation with you about the
    Indian Health Service. Specifically, I would like to address
    concerns that have been raised about the quality of care
    provided by hospitals in the Great Plains area as well as to
    get an update on the continued implementation of the Indian
    Health Care Improvement Act, which, of course, was included in
    the ACA.
        But I have 2 minutes left. I would like split that between
    Representative Matsui and Representative DeGette, and yield one
    minute now to Representative Matsui.
        Ms. Matsui. Thank you so much.
        Secretary Burwell, welcome.
        This budget definitely is something that makes critical
    investments in the long-term health and well-being of America's
    families, from supporting the expansion of Medicaid of millions
    of low-income Americans, investing in medical research, to
    bolstering the behavioral health workforce, so that patients
    with mental illnesses have someplace to turn. I am especially
    pleased with the incentives you put in for community behavioral
    health centers.
        The Affordable Care Act has improved millions of Americans'
    lives. Thanks to the ACA, nearly 18 million previously
    uninsured Americans no longer have to worry that they are one
    illness away from financial ruin.
        I am very pleased that this HHS's budget makes critical
    investments to ensure the continued success of the Affordable
    Care Act, and this budget is intertwined in the fabric of our
    healthcare system. It is time that we move forward with
    implementing all aspects of it.
        Thank you very much, and I yield to my colleague.
        Mr. Pallone. Ms. DeGette.
        Ms. DeGette. Thank you very much for yielding, Mr. Pallone.
        I just want to underscore something that both Chairman
    Upton and you talked about, and that is the importance of the
    21st Century Cures Act, which passed this committee
    unanimously. To make the investments that we talk about in that
    bill effective, we need to provide leaders at the NIH the
    ability to make decisions with some kind of freedom from the
    back-and-forth budgeting and appropriations process. After all,
    it is that process that, coupled with damaging cuts from the
    sequestration, set our medical efforts back a long way.
        And that is why mandatory funding is created and the 21st
    Century Cures Act Innovation Fund is so important. For too
    long, budgetary pressures have kept promising research projects
    from being carried out. With the stability of the Innovation
    Fund, researchers could submit proposals that would not
    otherwise be guaranteed the funding needed to complete the
    science. That was the approach that the House overwhelmingly
    supported and that is the approach that we are trying to work
    on in the other body.
        So, as much as you can do, Madam Secretary, that really
    helps us out in our efforts. Thank you very much.
        And I thank you, Mr. Chairman, for the comity in allowing
    me to sit in on this subcommittee.
        Mr. Pitts. The Chair thanks the gentlelady.
        That concludes the opening statements. As usual, all
    members' written opening statements will be made a part of the
    record.
        We will now go to our panel. I am happy to welcome the
    Honorable Sylvia Mathews Burwell, Secretary of the Department
    of Health and Human Services, as our witness today.
        Thank you for coming. We have your testimony. The written
    testimony will be made part of the record. But you will be
    given 5 minutes to summarize.
        So, at this point, the Chair recognizes Secretary Burwell,
    5 minutes for her summary.

       STATEMENT OF HONORABLE SYLVIA MATHEWS BURWELL, SECRETARY,
                DEPARTMENT OF HEALTH AND HUMAN SERVICES

        Secretary Burwell. Thank you. Chairman Pitts, Chairman
    Upton, Ranking Member Pallone, and Representative Castor,
    Members of the Committee, I want to thank you all for the
    opportunity to come and discuss the President's budget here
    today.
        As many of you all know, I believe that all of us actually
    share common interests and that we can find common ground. In
    the last legislative session, as was mentioned, this committee
    embraced that spirit of bipartisan leadership when it took the
    historic steps to pass the Medicare Access and CHIP
    Reauthorization Act of 2015. And thank you very much for this
    leadership on this issue.
        The budget before you today is my final budget and the
    final budget of this administration. It makes critical
    investments to protect the health and well-being of the
    American people. It helps ensure that we can do our job to keep
    people safe and healthy, accelerate our progress in scientific
    research and medical innovation, and expands and strengthens
    our healthcare system. And it helps us continue to be
    responsible stewards of the taxpayers' dollars.
        For HHS, the budget proposed is $82.8 billion in
    discretionary budget authority, and our request recognizes the
    constraints in our budget environment and includes targeted
    reforms to Medicare, Medicaid, and other programs. Over the
    next 10 years, these reforms to Medicare would result in net
    savings of $419 billion in Medicare.
        This budget invests in the safety and health of all
    Americans. Let me start with an issue we have been working on
    here at home and abroad. As we work to stop the spread of Zika,
    the administration is requesting $1.9 billion in emergency
    funding, including $1.5 billion for HHS to enhance our ongoing
    efforts, both domestically and internationally. We appreciate
    the Congress' consideration of this important request as we
    implement the essential strategies to prevent, detect, and
    respond to this virus.
        I know the rise in opioid misuse and abuse and overdose has
    affected many of those in your districts. Every day in America
    78 people die opioid-related deaths. And that is why this
    budget proposes significant funding, over $1 billion, to combat
    the opioid epidemic.
        Today too many of our nation's children and adults with
    diagnosable mental health disorders don't receive the treatment
    that they need. So, this budget proposes $780 million in new
    mandatory and discretionary resources over the next two years.
    This request will ensure that the behavioral healthcare system
    works for everyone. It will help expand behavioral health
    services and workforce capacity, so that more people can have
    access to care. And it will help individuals with serious
    mental illness get engaged and get the care that they need.
        While we invest in the safety and health of Americans
    today, we must also relentlessly push forward the frontiers of
    science and medicine, and I know this committee is deeply
    involved and engaged in that issue.
        This budget invests in the Vice President's Cancer
    Initiative. It is a vital investment for our future. Each 1
    percent drop in cancer death rates saves our economy
    approximately $500 billion, not to mention the comfort and
    security it can bring to so many families.
        Today we are entering a new era of medical science with the
    proposed increases of $107 million in the Precision Medicine
    Initiative and the $45 million additional for the
    administration's BRAIN Initiative.
        But, for Americans to benefit from these breakthroughs in
    medical science, we need to ensure that Americans have access
    to affordable, quality care. The Affordable Care Act has helped
    us make historic progress, and today more than 90 percent of
    Americans have health coverage, the first time in our nation's
    history.
        This budget seeks to build on that progress by improving
    the quality of care that patients receive, spending our dollars
    more wisely and putting an engaged and empowered consumer at
    the center of care. By advancing and improving the way we pay
    doctors, coordinate care, and use health data and information,
    we are building a better, smarter, and healthier healthcare
    system.
        Finally, I just want to thank the employees of HHS. In the
    past year, they helped us with the Ebola outbreak in West
    Africa. They have advanced the frontiers of medical science.
    They have helped millions of Americans enroll in health
    coverage, and they have done the quiet day-to-day work that
    makes our country stronger. I am honored to be a part of the
    team. As members of this committee I hope know, I am personally
    committed to working closely with you and your staff to find
    common ground, so we can deliver for the American people.
        With that, I look forward to your questions. Thank you.
        [The prepared statement of Secretary Burwell follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Pitts. Thank you, Madam Secretary.
        I will begin the questioning and recognize myself for 5
    minutes for that purpose.
        Secretary Burwell, on February 12th, the administration
    announced that they would be using billions of taxpayer dollars
    to make payments to insurance companies under the ObamaCare
    Reinsurance Program. There is a quote on the screen there from
    the ACA. It says, ``Notwithstanding the preceding sentence, $2
    billion for 2014, $2 billion for 2015, $1 billion for 2016
    shall be deposited into the General Fund of the Treasury of the
    United States and may not be used for the Reinsurance
    Program.''
        So, the announcement that the administration made
    represents an illegal wealth transfer from hard-working
    taxpayers to insurance, and this law is very clear, $5 billion
    of reinsurance fees must be returned to the taxpayers. As you
    can see, Section 1341 of the ACA states that this $5 billion
    ``shall be deposited'' into the Treasury. And if that wasn't
    clear enough, the law further states on down that these
    billions of taxpayer dollars ``may not be used for the
    Reinsurance Program.'' It seems clear. Yet, CMS to date has
    diverted $3.5 billion from the Treasury to health insurance
    companies, effectively bailing out insurance companies with
    taxpayer dollars.
        So, my question to you, Madam Secretary, is this: has any
    HHS official or any other administration official looked at the
    legality of these payments? Is there any legal memorandum or
    other analysis regarding the legality of these payments to
    insurers, and will you produce any such memorandum for the
    committee, if so?
        Secretary Burwell. So, the Reinsurance Program is part of
    three different programs that are about making sure that we
    have downward pressure on costs for individuals in the health
    insurance system. That is downward pressure on premiums.
        This particular program is a limited program for 3 years,
    and that is all. Of the three programs, one extends, which is
    the Risk Adjustment Program. This one, the Reinsurance Program,
    does not.
        The Reinsurance Program, as I said, was put in place so
    that two things would happen for people entering the new
    market. In a new marketplace where they didn't know, you didn't
    want people not coming in and offering competition for downward
    price pressure because they feared that they would get people
    who are expensive.
        And then, in addition to that, it puts downward pressure,
    so that when you do get people that are expensive, you know in
    these first years, as you are understanding your book of
    business and doing your analysis to be able price correctly,
    that you have that opportunity.
        So, in making any decisions about these issues, we believe
    we do have the statutory authority with regard to this issue.
    In making the decisions--and this gets to a point that I think
    Ms. Blackburn raised in her opening comments--the issues of
    making sure we are clear about lessons learned. One of the most
    important lessons, customer at the center. The consumer or the
    citizen is what we have tried to put at the center, whether
    that is in the decisions of how we have done the technology or
    how we make decisions about ensuring that those dollars
    actually went to the place where they would most help the
    consumer with regard to downward price pressure.
        It is our belief we have that authority. If it would be
    helpful, we can have staff come and brief in terms of why we
    believe we have those authorities.
        Mr. Pitts. Do you have a legal memorandum to that effect?
        Secretary Burwell. With regard to the question of a legal
    memorandum, this is an issue, actually, we put out our guidance
    for public comment. We put out the guidance that articulated
    that we would do this.
        Mr. Pitts. OK.
        Secretary Burwell. When we put out that guidance, we
    actually opened up for public comment specifically.
        Mr. Pitts. All right.
        Secretary Burwell. And we can go through what public
    comments that we received with regard to that.
        Mr. Pitts. We have a legal memorandum. I will ask staff to
    deliver it. Before you should be a memo from the Congressional
    Research Service on this very issue. On page 8, highlighted,
    before you, the memo states that your action to divert funds
    from the Treasury ``in conclusion, would appear to conflict
    with the plain reading of the law.''
        So, my question is, CRS has concluded that your action to
    divert billions to insurance companies appears to be unlawful.
    Did your Department receive any pressure from insurance
    companies to divert billions from taxpayers to pay off
    insurers? Did former CMS Administrator Marilyn Tavenner, now
    representing the insurance industry at AHIP, or other insurance
    company executives or officials ever pressure you or other
    Department officials on the reinsurance issue?
        Secretary Burwell. Mr. Pitts, I would be happy to take a
    look. I have not seen this document that was just handed to me.
    We will be happy to take a look----
        Mr. Pitts. Page 8.
        Secretary Burwell [continuing]. At that document and get
    back.
        We do believe we have the authorities. As I said, I think I
    have given you the context and the approach we take to making
    these decisions. Since I have come to HHS, it is one of the key
    things. One of the key things that I started out with, with the
    whole team, is consumer at the center. As we make decisions,
    what we try to do is make those decisions by putting that
    customer and their needs, whether that is, as I said, in Web
    site decisions, in trying to make it easier to use, or with
    regard to matters like this in terms of where those funds go,
    so that we create that downward pressure as much as possible
    within statute to put downward pressure on premiums, instead of
    upward pressure on premiums.
        Mr. Pitts. The Chair thanks the gentlelady.
        Ms. Castor. Mr. Chairman, before you finish, can you
    identify the source of that slide? Because, as we know, in
    other congressional hearings in the past there has been a
    little funny business on where those slides come from.
        Mr. Pitts. That is a direct quote from the Affordable Care
    Act, from the statute. That is from the statute.
        My time has expired. The Chair now recognizes the
    gentlelady, Ms. Castor----
        Ms. Castor. Did you have a statutory cite on that? Because
    it didn't appear to be a statutory----
        Mr. Pitts. Yes, I cited it. It is Section 1341.
        The Chair now recognizes the lady from Florida for 5
    minutes for her questions.
        Ms. Castor. Great. Thank you very much.
        Madam Secretary, I would like to ask you to give us an
    update on Medicaid expansion across the country.
        But, before you do that, I want everyone to be aware that a
    new bill was just dropped last night by Mr. Green, The
    Incentivizing Medicaid Expansion Act. It already has 15
    cosponsors, including myself, Mr. Tonko, Mr. Butterfield, Ms.
    DeGette, Ms. Matsui, Mr. Pallone, Mr. Kennedy, Mr. Lujan, and
    others. It mirrors the very smart provision in the budget that
    provides a new incentive to the states that have not expanded
    Medicaid. Because, as I said in my opening, it simply is
    completely unfair that some citizens have the ability to seek
    Medicare care under the Medicaid expansion in some states and,
    because of politics in others, they don't.
        So, we know what the Supreme Court said. It is not
    mandatory, but it is very important that we continue the
    incentive because it is smart fiscal policy. I know in my State
    we would save a lot of money, we would create jobs, and we
    would take care of our neighbors if the cadre that is control
    of the State government right now would listen to the people
    and expand Medicaid.
        But give us an update on how it is going and what the
    source of your incentive under the budget was for those states.
        Secretary Burwell. We know right now 30 states plus the
    District of Columbia have done the expansions. The information
    that we are now receiving in terms of those expansion states,
    whether that is the benefit to individuals, which we are seeing
    many more people doing adherence in terms of those who have
    medical conditions going, taking their medication, and those
    sorts of things, because of the expansion.
        So, the benefit to the individual is both a health benefit
    as well as a financial benefit. But we also know that the
    benefit to states is something that we are seeing, and that
    conversation is going on all over the country, whether that is
    in Kansas or the legislature in Maine, in terms of proposals to
    go forward to try to have Medicaid expansion.
        A big part of it is the benefit. We know that in the State
    of Kentucky the estimates are that there will be 40,000 more
    jobs by 2021 and $30 billion to the State in terms of money
    that will flow into the State.
        I think those benefits are already starting to be seen in
    states where what we are seeing in terms of rural hospital
    closures, an issue that I think many of us are concerned about,
    is that more of those closures are occurring in non-expansion
    states.
        The other part of this I think is the issue of
    uncompensated care. The estimates are, since the beginning of
    the Medicaid expansion and the coverage expansion that has
    resulted in the 90-percent coverage, that we estimate that
    there have been about $7.8 billion in a reduction in
    uncompensated care. Those reductions are not spread evenly; 68
    percent of that is in states that have expanded. So, both about
    the individual in terms of their financial and health well-
    being, but also in terms of the economics both of the state and
    the community.
        We believe this proposal is a proposal that supports
    governors' desires. I spent a lot of time just last weekend,
    spend time all weekend, Friday, Saturday, Sunday, and Monday,
    with the governors that were here from the National Governors
    Association. These are important conversations that we are
    having with them about the economic needs in their state.
        Ms. Castor. Well, over 50 years ago, when the Congress
    first adopted Medicaid to provide that lifeline for children
    and our older neighbors, all states didn't jump in right at
    first, but eventually, over time, didn't they all join the
    Medicaid world?
        Secretary Burwell. They do, and I think because of the
    benefits this will provide and a number of issues we will talk
    about, behavioral health is one I am sure we will spend time on
    in this committee. We know that that Medicaid expansion will
    make a difference in terms of these behavioral health issues as
    well.
        Ms. Castor. Thanks.
        And one other issue, there is a lot of bipartisan interest
    in Congress to address graduate medical education. If we can
    fix the doc fix, I know we can make progress on graduate
    medical education. We know we have a looming doctor shortage.
    We know that, since 1997, there has been a cap and it has been
    static where residency slots exist across the country.
        But I think there is this newfound momentum, bipartisan, in
    the Congress to do some creative things, but we will need your
    help. Most folks don't know that residency positions are paid
    for by Medicare. I think we can stretch that Medicare dollar by
    creating innovative partnerships with health providers and
    hospitals across the country. There is legislation to do so.
    Sean Cavanaugh came over and talked about it. He said this
    could be an area to take that Medicare dollar, expand it, and
    provide the doctors we need in the areas we need in the future.
        So, can you commit to doing that during your remaining
    time?
        Secretary Burwell. I hope you see our GME policy for
    children's GME. It responds to many of the concerns that were
    expressed to us last year in terms of the proposal we have now.
    So, we look forward to working on these issues.
        Mr. Pitts. The gentlelady's time expired, and the Chair now
    recognizes the chairman of the full committee, Mr. Upton, 5
    minutes for questions.
        Mr. Upton. Again, thank you for being with us this morning.
        I really want to focus on two things: Cures and Flint. Let
    me ask you first about cures. When we get about halfway through
    the time, I hope not to be rude, but I want to make sure that
    we cover both.
        We have worked so closely on this. Again, I thank your
    staff for the technical assistance, particularly on precision
    medicine, which we included in the bill, which, as Ms. DeGette
    said, passed the committee 51-to-nothing.
        I know that you are a part of the Vice President's Task
    Force under the Executive order for the National Cancer
    Moonshot. You have had at least one meeting, maybe a couple.
        Mr. Pallone and myself and Ms. DeGette, as well as the
    Senators, have been working with the Vice President's Office.
    We are hoping to sit down next week formally to see exactly
    where we are.
        But what are some of the ideas, in addition to what we have
    in Cures, that you think that we might be able to incorporate?
    Our idea, of course, is to take the House-passed bill already.
    The Senate has begun the markup stage in the last 2 weeks, and
    they are looking at doing a series of bills which are all
    bipartisan at this point, intend to be so, Mr. Alexander and
    Ms. Murray, and then, to look at injecting the Cancer
    Initiative as part of that process, go to conference, and
    accept all the goods parts, which is, in essence, the whole
    thing now.
        But what additional ideas are you all thinking about as
    part of that initiative as we begin to move forward?
        Secretary Burwell. First, thank you for your leadership and
    the leadership of other members of this committee in the 21st
    Century Cures space, the PMI space, and now, this space as
    well.
        We are excited about working in that space. A couple of the
    things that I would be specific about in terms of places where
    I think we can build on the work that you all were already
    doing in your bill are some of the key areas we want to do
    investments in. Some of those have to do with immunology in
    terms of advancing that science, where we know that people's
    own immune systems are some of the best ways that we can
    advance the ability to treat cancer, as well as it is good
    overlap with some of the proposals that we are thinking about
    in the cancer space related to genetics. That overlaps very
    directly with your PMI work.
        I would also mention--and I am sure you will have the
    conversation with the Vice President, and I always welcome it,
    too--as we think about making sure that FDA, I think you know
    we have suggested that FDA actually have a particular expertise
    and develop a part of FDA that is cancer- and oncology-focused.
    I think we think that is an important addition to our work.
        And so, those are some of the specifics of what we do. We
    also look forward to your ideas about how we can expand access
    to trials. That is something I think we want to have those
    conversations with you about and, as you reflected, before we
    get to the end of the process, have those conversations
    earlier.
        Mr. Upton. Well, that is great, and we look forward to
    meeting with the new FDA Director. I don't know if he was
    formally confirmed yesterday. I think he has been confirmed,
    but he has not been sworn in yet.
        Secretary Burwell. He will, hopefully, be today at noon or
    1 o'clock.
        Mr. Upton. We look forward to that.
        Let me just switch now to Flint. Again, your office has
    been most helpful. Dr. Laurie has had very good reviews. We
    have dispatched to Michigan over the last number of weeks. Our
    Michigan delegation, on a bipartisan basis, is meeting with her
    today. I know that you were there last week.
        I talked to our governor earlier this week specifically
    about this, and I know that he has got a number of waiver
    requests that are in. CHIP expansion for pregnant women and
    children up to the age of 21, increased Medicaid eligibility
    for lead-abatement activities, a number of things.
        Can you tell me where you all think you are in terms of the
    requests that Michigan has put forward?
        Secretary Burwell. As I articulated with the governor and
    when I was in Flint, I think we will be able to approve an
    expansion of Medicaid that will be for pregnant women and
    children. That will be a major expansion. It will also include
    something that is pretty important, which is comprehensive
    targeted approaches to individual management. So that when we
    understand that a child has had a certain level of exposure,
    that we make sure that they receive the comprehensive services
    that they do. That is another part of the waiver conversation.
    So, my expectation is that we will be able to do most of what
    is in that waiver and that we will get that done quickly.
        Mr. Upton. Knowing that you were there last week, the water
    is still unsafe to drink, is that correct?
        Secretary Burwell. With regard to the water, at this point
    people should either use the bottled water or filters. But,
    once you have a filter that is appropriately installed and you
    do the directions in terms of the changing and the cleaning of
    your filter that you need to do, that water should be safe. If
    you want it tested, though, call 211. Anyone should just call
    211 to make sure, if that is what you want for comfort. If you
    are a pregnant woman or if you are a child under 6, we
    recommend, out of an abundance of caution, use the bottles.
    But, otherwise, filters applied, and those filters are being
    tested. EPA continues to test regularly.
        Mr. Upton. Thank you. Yield back.
        Mr. Pitts. The chairman yields back. I now recognize the
    ranking member of the full committee, Mr. Pallone, 5 minutes
    for questions.
        Mr. Pallone. Thank you, Mr. Chairman.
        I wanted to ask Secretary Burwell, in your testimony you
    noted that part of the goal of the budget is to build upon the
    successes of the Affordable Care Act, and the latest round of
    open enrollment just recently ended. Can you tell us more about
    how this open enrollment has gone, including how many people
    signed up for health insurance, how many were eligible for tax
    credits to make insurance more affordable?
        Secretary Burwell. With regard to this open enrollment,
    12.7 million Americans enrolled in this open enrollment. There
    are some other things that I think are important about the open
    enrollment that get to some of the broader issues that I am
    sure we are going to discuss.
        We know that, of those folks, there were 4 million new
    people that came in. Of the 4 million new, 60 percent of them
    signed up for coverage for January 1st. Why is that important?
    It says it is a product that they want and they want to start
    at the beginning of the year. It is also important because,
    from an insurance company or an issuer's perspective, you want
    them in for the full year in terms of downward pressure, again,
    on price.
        The other thing that happened in this open enrollment, in
    addition to that 12.7, is when you look at the people that were
    in before--so, I talked about the new, but the other folks--70
    percent of the folks who had been enrolled last year and came
    back and are re-enrolled actually took some action. They came
    in, updated their information, or they shopped. This is an
    engaged, empowered, educated consumer making choices.
        If I asked in a setting where there is employer-based
    coverage, those numbers generally don't even ever get above 10
    percent in terms of the number of people who engage in a re-
    enrollment process. So, it is an engaged consumer. It is a
    consumer that is seeking that produce. And so, those are some
    of the highlights of what we have seen in this year's open
    enrollment.
        Mr. Pallone. OK. Thanks.
        I know that the gentlelady from Florida mentioned Medicaid
    expansion and the President has proposed these additional
    incentives for states to expand Medicaid. Could you describe
    the benefits that Medicaid expansion, that the states are
    experiencing and why it is so important that the remaining 19
    states join them in moving forward?
        Secretary Burwell. So, as I mentioned, it is the advantage
    and the benefit to the individual. I am sure you all meet folks
    every day who it makes a difference in terms of their ability
    to get the health coverage they need, whether that is the
    preventative services they need to prevent other things or when
    they have something going wrong, their ability to treat those.
    And so, that is the individual.
        But the economic benefits of this and the other benefits we
    have seen, that the number of people in the country now who are
    struggling with making their healthcare payments has gone down
    as a nation. We have seen The New England Journal of Medicine
    most recently put out a study saying that the changes through
    Medicaid expansion are affecting payer mix for hospitals and
    making a difference to them on the ground.
        And so, it is both about the individual, the communities,
    and the state, as we think about those benefits.
        Mr. Pallone. Then, lastly, I wanted to ask about the
    proposals in the President's budget to address the opioid abuse
    and overdose crisis. The President's 2017 budget requests a
    billion in new mandatory funding over two years to expand
    access to treatment for prescription drugs and heroin use. Can
    you just walk us through this funding request? Why is this
    investment necessary? Why is our current treatment capacity
    insufficient? Why is it important that the billion dollars be
    provided in the form of mandatory funding over the two years,
    and how is this going to be allocated?
        Secretary Burwell. With regard to the money that we have
    asked for, it is money to support an evidence-based strategy
    that we have talked about, and let me just hit those points
    because that is where the money will go.
        The first area is in the area of prescribing. We know that
    part of what has contributed to the issue of the opioid
    epidemic is overprescribing. And so, it is money to support the
    efforts of new guidelines that will come out from CDC and
    making sure that those guidelines are actually used, learned,
    and applied.
        The second area is in the area of medication-assisted
    treatment. This is the space where the vast majority of this
    money goes. It goes to that and it will go to communities and
    states. This is money that will not be used at HHS, but will go
    to communities and states.
        This is part of what we know. Behavioral health is
    something that has been a local issue for so many years. It is
    paid for mainly at the state and local level. And so, making
    sure that communities can have the access.
        Right now, I was told 2 weeks ago that in 85 percent of the
    counties, rural counties, in this country that their ability to
    have behavioral health providers and access is quite limited.
    And so, that money, and that is the vast majority of the money
    in the budget.
        The last area is in the area of Naloxone or Narcan. That
    is, sadly, we know that in our communities people are
    overdosing. And so, to prevent them from dying, you apply
    Naloxone or Narcan. There will be money to go to the
    communities to get that access to that drug. So, in the last-
    case scenario where we have someone who has overdosed, we can
    at least have first responders and community members that can
    save lives.
        Mr. Pallone. Thank you so much.
        Mr. Pitts. The Chair thanks the gentleman.
        I now recognize the Chair emeritus, Mr. Barton, 5 minutes
    for questions.
        Mr. Barton. Thank you, Mr. Chairman.
        Before I ask my questions, I want to file a mild complaint.
    The Secretary called me on my cell phone the other day and was
    very charming and disarming. It makes it very difficult to ask
    her tough questions when she is so polite and receptive to my
    input. So, we may want to consider adopting a rule that Cabinet
    Secretaries, at least of the opposition party of the majority,
    cannot do that.
        [Laughter.]
        So, I just want to put that on the record.
        Mr. Pitts. We will take it under advisement.
        Mr. Barton. All right.
        Madam Secretary, it is always a delight to have you come
    before the committee and answer questions that are usually not
    at all related to the budget which you are supposed to be
    prepared to answer. I have got a difficult question and an easy
    question. Which do you want first?
        Secretary Burwell. Difficult.
        Mr. Barton. The difficult question? I am surprised at that.
        Secretary Burwell. I think you know me.
        Mr. Barton. There are many of us that are very concerned
    about the issue of harvesting and selling what you could either
    call body baby parts or you can call it fetal tissue, whichever
    term you choose to use. I am very concerned about that, not
    opposed to family planning, not opposed to funding women's
    health issues at all.
        My staff has done some research and found out that the last
    time the issue of fetal tissue research was studied was during
    the Reagan administration. There was a special commission
    appointed by the President that did a study. That is over 30
    years ago. There have been tremendous changes in medical
    practice and medical research since that time.
        The NIH is not currently funding such research internally,
    but externally they have supported about $76 million in such
    areas of research outside the NIH.
        Would you support a new commission to take a look at this
    issue, so that, regardless of which side you are on or the
    politics, we could at least know what the facts are?
        Secretary Burwell. With regard to the issue, I agree with
    you that this is an issue of great emotion and focus on
    different sides of the issue, and I respect that there are
    differing opinions on the issue.
        With regard to the question of the use of this tissue as
    part of our research that we do, I think in terms of the basics
    of the question of the value of that research, we continue to
    see--and whether it is the fact that the measles vaccine, the
    mumps vaccine, hepatitis A are all products that have derived
    and come out of this research, to the fact that some of this
    research has helped us move in terms of the research that was
    done for the Ebola vaccine. And so, for us, the question of the
    research, when done appropriately and in accordance with the
    laws and the statutes, and no valuable consideration, are
    things we take extremely seriously.
        Mr. Barton. But would you support a new commission to
    review the issue?
        Secretary Burwell. We would welcome the opportunity to have
    the conversation. I think the question is to understand which
    issue. Because I think at its heart is the question of the
    value of this research and the question, I think, in terms of
    the guidelines that are put in, which are very strict, are
    there issues or problems with that? So, we would welcome the
    opportunity to understand more fully what you think are the
    issues around this that we would----
        Mr. Barton. Well, the gentlelady next to me on my right,
    Mrs. Blackburn, is heading up a select committee that I believe
    is going to be looking into this.
        Secretary Burwell. And I think we have responded, both the
    Department and NIH, as an operating division, to your request,
    Ms. Blackburn.
        Mr. Barton. Well, here is my easier question: the majority
    of this committee has sponsored a piece of legislation that we
    called the ACE Kids Act. It would change federal policy to
    create a medical home for families that have special needs
    children. It would allow there to be an anchor hospital that
    would, then, create a network. So that, if you had a child who
    was a special needs disadvantaged child with multiple medical
    conditions, they could come into the network and there would be
    a single home. We have a majority of the committee and we have
    almost a majority of the House of Representatives as
    cosponsors.
        Has your office taken a look at that legislation and, if
    so, what is your position on it?
        Secretary Burwell. We welcome the leadership that you and
    others have provided in this area of complex cases. We are
    continuing to work right now with our administrative
    authorities to work with states in order to get the kind of
    care and service that you are talking about for parents and
    their children. And so, we want to continue to work on that. We
    have a proposal in our budget that extends that. Because one of
    the things is, when some of the states do this, it carries over
    not for just children, but for larger populations. Sometimes
    that is why states are hesitating.
        So, we look forward to working in terms of, as I said, we
    have a proposal in our budget, would like to have the
    conversation about--I am not sure if your legislation includes
    that part of it or not.
        Mr. Barton. OK.
        Secretary Burwell. But I think we are with you on the
    objective of helping families with this complex care.
        Mr. Barton. Thank you. Thank you.
        And I thank the chairman for his discretion.
        Mr. Pitts. The Chair thanks the gentleman, and now
    recognizes the gentlelady from California, Mrs. Capps, for 5
    minutes for questions.
        Mrs. Capps. Thank you, Mr. Chairman.
        And thank you, Secretary Burwell, for your testimony today.
        The President's budget proposal this year includes many
    important investments in our nation's healthcare delivery
    system, workforce, and prevention programs. HHS programs touch
    each one of us in some way, whether as a Medicare beneficiary,
    someone needs a tobacco cessation program, or perhaps being
    cared for by a healthcare provider trained with federal
    funding. I recognize that balancing the many competing
    proprieties in this space is a challenge and appreciate your
    efforts on this.
        Today I would like to highlight two different programs that
    very much deserve your strong support and ask a question about
    each of them. Specifically, I would like to highlight the
    importance of the federal investment in the training and
    retention of the nursing workforce. Title VIII provides
    critical federal grants for nursing schools and organizations
    to advance their educational programs to promote diversity in
    the field, repay loans for nursing students who work in
    facilities with critical shortages, and train geriatric nurses.
        Our nation faces a significant challenge of caring for a
    growing patient population with limited resources. Title VIII
    nursing workforce programs, programs that have been around
    since 1964, are a key component to this effort because they
    train highly-skilled healthcare workers who can serve in
    hospitals, research labs, and communities.
        Will you discuss briefly what this budget request does to
    support the development of a highly-qualified healthcare
    workforce important today and known as the Title VIII programs,
    and ways that it can be continued?
        Secretary Burwell. So, over $200 million in investment, and
    those are split, basically, in two different pieces. The first
    is actually education, as you mentioned, in terms of educating
    and training, in terms of that supporting the provider
    community. The second part is actually with loan forgiveness
    programs that help us have those trained professionals go to
    the places where we have shortages and needs. Those are the two
    main ways.
        But, throughout the budget and throughout the proposals
    that are before you now, there are a number of things that I
    think are supportive of the nursing community because we
    believe they are part of getting us to a system where we have
    better quality care in a more affordable way. And so, having
    nurses and other health practitioners operate at the top of
    their license, and steps that we are taking. For instance, in
    our budget we actually propose with regard to buprenorphine,
    which is an important medication-assisted treatment for
    opioids, we are proposing that it is considered by the Congress
    to expand those that can prescribe, if they meet certain
    conditions. So, we are supporting it in terms of our funding,
    but also in terms of how we think about the role of the nurse
    in a system that can improve quality and reduce cost.
        Mrs. Capps. Thank you, Madam Secretary.
        And this is why I joined with my House Nursing Caucus Co-
    Chair to author bipartisan legislation to reauthorize Title
    VIII, The Nursing Workforce Development Programs, with my
    colleague, Mr. Joyce from Ohio.
        Another key priority for the administration and for many of
    us personally is making an impact on cancer treatment care and
    prevention. As you know, cancer continues to be one of the
    leading causes of death globally. With the number of new cancer
    cases expected to rise to 22 million within the next two
    decades, it is a huge number.
        As one of the Co-Chairs of the Cancer Caucus, I commend the
    administration for launching the National Cancer Moonshot
    Initiative. If we are going to win the war on cancer, we must
    take a comprehensive approach to this fight, as this initiative
    proposes to do.
        Only 5 percent of cancer patients in the United States
    participate in a clinical trial, and most do not have access to
    their own data. I believe participation in clinical trials is
    so essential to finding new treatments and, ultimately, a cure
    for cancer or cures for cancer.
        Increasing data-sharing is also critical, as it can help to
    advance a better understanding of the disease and how best to
    treat it. Increasing participation in clinical trials and
    ensuring these trials include a diverse range of participants,
    including of women of all backgrounds, ages, and risk levels,
    is something I have long advocated for.
        Secretary, how will you, through the National Cancer
    Moonshot Initiative, help to increase access to clinical trials
    in the area of cancer?
        Secretary Burwell. With regard to the issue of trials, as I
    mentioned in responding to Mr. Upton, that is one of the issues
    that is a priority.
        In terms of things that we can do right now, and should do
    right now and are doing right now, this ties into the issues
    around electronic health records and precision medicine. Those
    are separate but related issues, as is the cancer part of this,
    which is making sure that patients and consumers can get access
    to their data.
        This, I think, also relates to the issue that we were
    talking about with regard to 21st Century Cures on this side.
    But on the Senate side, I think Mr. Alexander and Ms. Murray
    are thinking of including things that would prevent data-
    blocking. Data-blocking is when the providers of software to
    electronic health records, so a provider of software to a
    hospital, does things, and sometimes they might be about cost,
    but sometimes they may be about making things really hard for
    the consumer to get that data information.
        And so, these are steps that I think we can take right now
    and are working on. I will actually be speaking at a conference
    of all the technology people as soon as this Monday with regard
    to getting commitments from the private sector to work against
    this data-blocking. Hopefully, we can get there, but I think it
    is important that, certainly, your colleagues on the other side
    are considering legislation which we are having conversations
    with them about. This would come together in the 21st Century
    Cures version, the House and the Senate coming together when
    you all come together in a conference.
        Mrs. Capps. Thank you very much. I yield back.
        Mr. Pitts. The Chair thanks the gentlelady.
        I now recognize the Vice Chair of the subcommittee, the
    gentleman from Kentucky, Mr. Guthrie, 5 minutes for questions.
        Mr. Guthrie. Thank you, Madam Secretary, for being here
    today. I really appreciate it and echo what my colleague said,
    willingness to work together.
        One of the big concerns I have had--I was in state
    government before in Kentucky--and since I have been here, it
    is the growth of Medicaid. We are looking at how we deal with
    the growth of Medicaid, how we cover the vulnerable, but we
    have to do it in a way that is sustainable for our budgets.
        I know you worked in the Clinton administration. I have a
    Congressional Record, a letter, so I can show the
    documentation. But it was Senator Murray and it was a letter
    that she sent to President Clinton, and I will quote what she
    said on the floor of the Senate.
        This letter is partisan in that it is signed by all
    Democrats, which would include the Vice President. At the time
    he was in the Senate. But it is my feeling that, as Americans,
    every Member of the Senate should have an opportunity to
    endorse the position described in the document.
        And I will just read the opening of the letter. It says,
    ``We are writing to express our strong support for the Medicaid
    per-capita cap structure in your 7-year budget.''
        So, as we are looking at all options and dealing with
    Medicaid--Medicaid is now about three times what it was in
    1995, three times the size. Would you support a per-capita cap
    structure or Congress adopting that structure?
        Secretary Burwell. As we think about the issue of
    healthcare cost, which I think everyone agrees is what is
    driving our deficit over the long-term, I think one of the
    things is separating out two issues. One is per-capita costs,
    which is related to the issue you are talking about, and, also,
    the overarching cost. As we, as a nation, move to have more
    people covered and we have a baby-boom through Medicare, we are
    going to have to focus on those issues as we think about it.
        With regard to the question of caps and how that works, I
    think the question--and we are also seeing this right now in
    Puerto Rico in Zika, which basically has a blocked approach to
    Medicaid, a blocked approach----
        Mr. Guthrie. Right, yes.
        Secretary Burwell [continuing]. That right now we are
    having a very difficult time. That is part of why we will need
    the supplemental money. That is part of why we have a proposal
    in our budget on Puerto Rico.
        And so, the concerns that we have around those issues are,
    one, that what happens is pressure gets put on the state or the
    beneficiary in ways that you end up with reductions in quality
    of care. Those are suggestions and ideas--I am sorry I am not
    familiar with the letter that you are----
        Mr. Guthrie. But it was just that concept. I think that was
    in President Clinton's budget proposals twice, I think, in the
    1990s. And so, I was just showing that it had bipartisan
    support. Even the Vice President signed onto it in the Senate
    at the time.
        If that is the direction we need to go for that, is that
    something you would support?
        I do want to get to Kentucky.
        Secretary Burwell. OK.
        Mr. Guthrie. I don't want to be rude, though. I actually
    don't want to be rude.
        Secretary Burwell. Go ahead. Go ahead. We will come back if
    we have to.
        Mr. Guthrie. But you did meet with our governor. As you
    said, you met with the governors last week, and I understand
    from people I have talked to and him--I haven't talked to him,
    but people with him--that it was very productive and they
    really appreciated the time.
        One of the concerns, though, as we move forward, because I
    know you quoted that a lot of money is going to flow to
    Kentucky through their Medicaid expansion, but also a proposal
    right now is like 9-percent cut in universities for 2 years. It
    is 18 percent over 2 years to universities and other levels of
    government, just because it is not just Medicaid, but Medicaid
    is a big part of it. Part of it is public pensions, but
    Medicaid. And so, they are looking at ways to innovate, as you
    know, because you met with them. Like I said, I appreciate
    that.
        But there was a Vikki Wachino responding to some questions
    from the committee on Medicaid, the head of Medicaid at CMS.
    She wrote, ``In some cases where new approaches are being
    tested, such as Healthy Indiana Plan 2.0, approved earlier in
    2015, it is also important to evaluate the impact of new
    approaches being tested in 1115 demonstrations before approving
    similar policies.''
        Can you give examples where you had to have evaluations
    before you could move forward on the others? Because I know I
    don't think CMS does it for stuff like delivery system reform
    programs, premium assistance, managed long-term care service
    and supports, and managed care. So, is there a criteria saying
    you can't move forward on a similar plan until we evaluate
    that?
        Secretary Burwell. With regard to CMMI, the Centers for
    Medicaid and Medicare Innovation, you all actually gave us
    pretty high standards with regard to evaluation, and standards
    that, actually, I think it is good because I think we should
    meet the high standards before we take a demonstration and
    expand it.
        So, in that part of the work that we do, yes, we have seen
    that, similarly in the Medicare work and the delivery system
    reform work. I think what we want to do is make sure, when
    there are things that are new and untested, that before we
    expand to other states that we know and understand.
        I think it is important to reflect that----
        Mr. Guthrie. But this is CMS, not CMMI. It is CMS.
        Secretary Burwell. CMMI is part, is the Center for Medicare
    and Medicaid Innovation, is what was created and is part of CMS
    in terms of how we are doing that. And so, there is that
    Center. There is the Medicaid Center. We work to align as much
    as possible.
        But I think to get to the core of the issue that I think
    you are raising, every state comes in with a different history
    and a different desire and need. Those are conversations that I
    think most governors will tell you on both sides that I welcome
    to have the conversation and that is what we will do.
        Mr. Guthrie. I understand that, but also in that quote was
    that innovations that work in some states may not work in other
    states. That is some of the question. So, if something doesn't
    work in one state, it still could work in another state.
        But we appreciate your openness, and I know I am out of
    time. But we really need to make it work and we need to be
    innovative to make our Medicaid system work. So, I appreciate
    the opportunity.
        Secretary Burwell. I think we want to make sure those folks
    stay covered and it is done in ways that improve quality and do
    downward pressure on cost as much as possible. So, we are
    agreeing.
        Mr. Pitts. The Chair thanks the gentleman.
        Did you want to submit your letter for the record? Did you
    want to submit the letter for the record?
        Mr. Guthrie. Well, it is in The Congressional Record for
    the 1995 Senate, but I submit that for the record.
        Mr. Pitts. All right. Without objection, so ordered.
        [The information was unavailable at the time of printing.]
        Mr. Pitts. The Chair now recognizes the gentleman from
    Oregon, Dr. Schrader, 5 minutes for questions.
        Mr. Schrader. Thank you.
        Thanks for being here, Madam Secretary.
        Secretary Burwell. Thank you.
        Mr. Schrader. I always enjoy it.
        Is it accurate to say that the total discretionary budget
    authority for your Department, HHS, is actually $658 million
    less than it was in 2016 for 2017? And even accounting for
    rescissions, it is $441 million less than in 2016?
        Secretary Burwell. That is correct.
        Mr. Schrader. I appreciate it. There are very few agencies
    that come in, realizing we are in tough economic times, that
    are willing to take a little hit in the budget arena and make
    sure things balance, and it is not at the risk of patients,
    which I also appreciate. We are getting better healthcare out
    there, as you have testified.
        I also want to appreciate the fact that the administration
    is committing to 85 percent of Medicare payments being tied,
    frankly, to positive health outcomes by the end of 2016. I
    think that is the future. We are having great success on the
    CCO level in Oregon----
        Secretary Burwell. Yes.
        Mr. Schrader [continuing]. And our Medicaid expansion
    project. We are actually getting more for less. The patients
    love it. The healthcare providers are very excited. We are
    getting great outcomes in terms of reduced hospital stays, less
    ER visits, more primary care attention.
        I had the mental healthcare providers in the other day,
    also part of the CCO expansion. So, it is not just your
    physical health; they are starting to get at the stuff that
    Congressman Murphy and many of us are trying to get at, to
    incorporate mental health into the holistic approach to folks.
    I think it is very, very, very exciting.
        I guess I would be interested in your update on the next
    generation of ACOs in the Medicare area, where we are going
    with the outcome-based care that we are talking about.
        Secretary Burwell. So, in terms of this idea of getting an
    educated, empowered, and engaged consumer at the center of
    care, and we often call that delivery system reform, there are
    three basic tools that we are working against.
        One is payment reform, so that we are paying for that value
    versus volume. And you talked about that in terms of the
    statistics. This year we, hopefully, will meet the goal we set
    out that 30 percent of Medicare payments will be in value, not
    volume by the end of 2016.
        The second area of focus is changing the way we actually
    deliver care. This gets to some of the innovation projects that
    we are working on and measuring. One of those, for example, in
    terms of where we are seeing real progress, not to the point
    where it meets the standard of evaluation yet, that we would
    expand. But we are seeing that in terms of long-term care for
    people in the homes and making sure that we are doing certain
    types of care in the home, we see a reduction in hospital
    visits for those in the home and we see a 3,000 per Medicare
    beneficiary savings.
        Now we need to make sure that that can hold, but that is
    some of the progress that we are seeing in that space and
    changing the way delivery--keep people in their homes; give
    them the education they need; give them the tools they need to
    get the care they need, so they can stay at home, not be in
    hospitals.
        The third area is data and information. We talked a little
    bit about that with Ms. Capps.
        Mr. Schrader. Right. Well, I appreciate all that. I think
    the ACOs, Medicare Advantage is another way to get value-based
    to folks, and particularly in the home care settings.
        I have worked with Mr. Lance and Ms. McMorris Rodgers on
    several on several innovative programs that I hope the
    administration will look favorably on in terms of improving
    that healthcare delivery, getting it to the consumer, a nice
    bipartisan issue, regardless of your view of the ACA, in
    particular.
        I am hoping that HHS will continue to work with this
    committee and other Members on improving the innovation
    opportunities through Medicare Advantage and wonder if there
    are other things you are doing to improve things for
    beneficiaries in the Medicare Advantage Program. It is working
    really, really well out west in Oregon.
        Secretary Burwell. With regard to the ACOs, that is a place
    where we have had measurable results, but we have seen the
    measure had to be that you do not reduce quality, but you have
    savings. If you can increase quality, that is even better.
        Mr. Schrader. Yes.
        Secretary Burwell. And we have seen that and the savings,
    $300-400 million in terms of that. And now, we have a new
    generation of ACOs, the Accountable Care Organizations.
        With regard to Medicare Advantage, the issue, one of the
    things I would highlight that we are working on right now is
    one of the challenges in Medicare Advantage is the question of
    people with socioeconomic difficulties and the star ratings,
    and how those ratings perhaps might disadvantage those who have
    a population who have a number of chronic conditions.
        And so, we have taken steps to weight----
        Mr. Schrader. Good.
        Secretary Burwell [continuing]. And include things for that
    socioeconomic. We are spending time to understand more fully.
    We want to make sure we analytically base what are the
    differences in changes people should have in payment if they
    are serving a more difficult population.
        Mr. Schrader. Great.
        Secretary Burwell. But, in the interim, as we are finding
    more solutions, those are changes we are making.
        Mr. Schrader. Very cool.
        The last comment I guess I would make is I had insurance
    agents in my office just the other day working really hard to
    get people enrolled. When they have their circumstance change,
    they need special enrollment opportunity. They are having a
    little trouble accessing the Web site compared to during the
    open enrollment periods. So, if you could just reach out to
    them a little bit and work with them to help them help people
    make those changes, so that we save money, people get the
    healthcare they need, and they are not subject to penalties
    later on, I would appreciate that.
        Secretary Burwell. Absolutely. We would like to reach out
    and find out, so we can reach out directly.
        Mr. Schrader. Thank you.
        Secretary Burwell. We will do that.
        Mr. Schrader. I yield back Mr. Chair.
        Mr. Pitts. The Chair thanks the gentleman.
        I now recognize the gentleman from Kentucky, Mr. Whitfield,
    5 minutes for questions.
        Mr. Whitfield. Thank you, Mr. Chairman.
        And, Madam Secretary, thanks very much for being with us
    today. We all appreciate the phone call.
        There are three issues I want to talk about. First of all,
    alternative payment models for oncology.
        Secretary Burwell. Yes.
        Mr. Whitfield. CMS has already developed a model, the
    Oncology Care Model, under the Center for Medicare and Medicaid
    Innovation. From conversations that I have had with oncologists
    and others, they find the sign-up process to be overly-
    complicated. They say that they are being encouraged to sever
    relationships with certain hospitals, and that many of them are
    not being informed on whether or not their application is being
    accepted.
        Now, as you also know, Cathy McMorris Rodgers and Steve
    Israel introduced a bill called The Cancer Care Payment Reform
    Act, which we had the legislative hearing on in September of
    last year. That is an alternative model that the oncologists
    very much support. They are the ones providing this care.
        And so, the impression that we are getting is that you all
    are determined that you are going to move forward on your
    model. I simply would ask, would you work with the providers to
    see about developing a model that is acceptable to everyone?
        Secretary Burwell. Absolutely. We would like to and we
    would like to follow up with your staff directly in terms of
    talking to some of the providers that you have talked to, so we
    can get their input directly.
        Mr. Whitfield. OK. Well, we appreciate that. Thank you very
    much.
        Secretary Burwell. Yes.
        Mr. Whitfield. Now, on another matter, over a year ago,
    this committee and the Ways and Means Committee staff, which
    started working with HHS regarding a program with the
    Affordable Care Act that was authorized called the Basic Health
    Program. It was never funded. There was never an appropriation
    for that. There was a permanent appropriation for an Affordable
    Care Act program called the Premium Tax Credit. The
    administration has been taking money from that program, last
    year $1.3 billion, to fund the Basic Health Program.
        As I said, Ways and Means has been contacting you all on a
    regular basis about this. Energy and Commerce has been
    contacting you on a regular basis about this, asking for
    documents about how this is being funded without a direct
    appropriation. After a year of asking for these documents, Ways
    and Means still has not received them and the Energy and
    Commerce Committee has still not received them.
        Will you all work with us to provide this information that
    the staffs are asking for?
        Secretary Burwell. I think we are and continue to work. We
    have been responsive in terms of letters. We have been
    responsive, actually, on the Ways and Means side. A briefing
    was asked for. We provided----
        Mr. Whitfield. OK. Well, let me just say this: I mean, I
    appreciate that, but I am not there. I am not negotiating. I am
    not even discussing it. But the staffs on both Ways and Means
    and on our committee tell us that what has been provided is
    very meager, that it is not the documents that they are
    requesting.
        Secretary Burwell. Well, I think we want to continue to
    work, and we will.
        Mr. Whitfield. OK.
        Secretary Burwell. I think we are trying to work
    cooperatively with all of the issues of oversight which we
    think are important.
        In this particular case, in terms of the authorities, we
    believe the authorities exist. The authorities are for the same
    amount; they are the same types of money.
        Mr. Whitfield. So, you all feel like you don't need a
    direct appropriation, that you have other authority to do it?
        Secretary Burwell. We believe that the authority----
        Mr. Whitfield. And that is what we want, the document, I
    guess, that provides that authority, at least your
    interpretation.
        But you said that you will continue to work with our
    committee on it. We would appreciate that.
        Secretary Burwell. We will. We will.
        Mr. Whitfield. One other thing I just want to bring up
    briefly, because I was involved in it, is the sunscreen
    legislation. As you know, skin cancer is the most common form
    of cancer in the U.S. Skin cancer is more prevalent than breast
    cancer, prostate cancer, lung cancer, and colon cancer
    combined.
        And so, these ingredients that have been on file at the FDA
    for approval since 2002, over 14 years, and many of these
    ingredients are being used in Asia, Europe, South America,
    around the world, and yet, we passed a bill specifically to
    encourage a process that is more applicable to this. And even
    since then, there has been no movement 14 months later.
        I know that Johnny Isakson, Senator Isakson, asked about
    it. I am asking about it. So, I hope that you all will tell us,
    do we need to do something? Is there anything that we can do to
    facilitate this?
        Secretary Burwell. We would like to follow up because I
    think maybe you can help us. Our concern is it goes on the new
    products that are coming on. First, in Europe it is a cosmetic.
    We actually believe, because it is going on your children 24/7,
    that we need to make sure that what is going through, is it
    absorbable in the children's skin? It is for everyone, but, of
    course, we are focused on children. And are those chemicals
    going to do something negative?
        Mr. Whitfield. Yes, yes.
        Secretary Burwell. And so, I think if we have a
    conversation, there may be a way that you can be helpful----
        Mr. Whitfield. OK.
        Secretary Burwell [continuing]. In helping us get the
    information we need.
        Mr. Whitfield. No, we would love to do that because we
    definitely want to protect these children. But, also, when you
    have something pending for 14 years or 15 years, people are
    beginning to wonder a little bit.
        Secretary Burwell. We would look forward to that.
        Mr. Whitfield. Thank you very much, and I yield back the
    balance of my time.
        Mr. Pitts. The Chair thanks the gentleman.
        I now recognize the gentleman from Massachusetts, Mr.
    Kennedy, 5 minutes for questions.
        Mr. Kennedy. Thank you, Mr. Chairman.
        Madam Secretary, thank you again for making an appearance
    today.
        I would like to commend the President's budget for
    including critical reforms to mental health and Medicaid, such
    as ending the 190-day lifetime limit on psychiatric inpatient
    care for Medicare beneficiaries and for expanding the
    electronic health record incentive program for including
    behavioral health providers. It is a big step forward.
        I also support the President's proposal to reinstate the
    primary care bump, which, according to one study, resulted in
    an increase of appointment availability by 7.7 percent.
        Do you think it is fair to say, Madam Secretary, that this
    proposal could also expand the program so that mental health
    and behavioral health providers in Medicaid could benefit from
    the bump as well?
        Secretary Burwell. Yes, we think that it is a continuum,
    and there are a number of different proposals, as you
    articulated, that are focused on getting us to a different
    level with regard to access to behavioral health and
    integration, as Mr. Schrader mentioned, in terms of integration
    of behavioral health.
        Mr. Kennedy. So, would you agree that adequate
    reimbursement levels are a critical piece to expanding the
    workforce to ensure that Medicaid patients have access to
    timely care?
        Secretary Burwell. We do. I think you know our proposal on
    primary care that we have in our budget is about making sure we
    do some of that. In addition, the proposal we have on
    behavioral health is actually focused specifically on some
    provider issues in terms of getting more providers, so we have
    that access.
        Mr. Kennedy. The President's budget I believe, Madam
    Secretary, also proposes lifting the federal exclusion that
    currently prevents some children from getting Medicaid coverage
    of early and periodic screening diagnosis and treatment
    services and limits terms. That means kids on Medicaid can't
    get both mental health care and physical care while they are
    patients at certain facilities known as IMDs.
        Madam Secretary, can you tell us a little bit more about
    the importance of ensuring that all children, regardless of the
    setting, have access to comprehensive health?
        Secretary Burwell. We think it is important, which is why
    we have the proposal. I think it is an issue that I'm sure we
    may discuss, also, with Mr. Murphy, in terms of making sure
    that these kids have that access.
        What happens, and if you visit facilities, when you are a
    parent and you are told, ``Oh, here is a prescription. You have
    to go at a different time and a different place or it won't be
    paid for in the same way,'' that is prohibitive in terms of
    having a child get the services that they need as they need
    them. A warm handoff. So, whether it is in the facility itself
    and the payment mechanisms really make a difference to how
    children are receiving this kind of care. Our proposal is aimed
    at trying to help that along.
        Mr. Kennedy. Thank you.
        I want to touch base a little bit on what Ms. Capps was
    getting at as well with regard to data. There are 14.1 million
    Americans in 31 states that have enrolled in Medicaid as a
    result of the Affordable Care Act, and an additional 4 million
    could gain coverage if the remaining states expand their
    Medicaid programs. These numbers represent, obviously, far more
    than just facts and figures. They are about prenatal
    appointments, cancer screenings, and lifesaving preventive
    care.
        Perhaps most noteworthy, Medicaid expansion means that
    millions of Americans now access mental and behavioral
    healthcare. Medicaid is the largest payer of mental health
    services in the United States and it has the greatest potential
    to reform a broken system. In order to make the necessary
    reforms and to bolster the program more effectively, we need to
    first know how CMS reimburses doctors and at what levels.
    However, when I talk to doctors and patients and I ask how much
    Medicaid reimburses for their services, no one is able to point
    to exact figures, given the nature of those reimbursement
    mechanisms across states.
        So, Madam Secretary, I would love your help in working with
    me on solutions to try to improve CMS's data collection for
    each state, so that we can ensure that we know at least how
    those payments stack up against private insurance.
        Secretary Burwell. We want to work on that issue. One of
    the things is because Medicaid is a state-run program. We are
    very dependent on the states in terms of their analytics, their
    data, and their systems.
        Having said that, we look forward to, because we want to
    know and understand that information. Transparency of data and
    information is something I think we think is a very important
    thing across the healthcare system. Whether that is the
    dashboard that we put up in the December timeframe on payments
    in drugs, so that people can actually know which drugs have had
    the largest increase in cost, creating that transparency for
    the consumer and providers in terms of putting up on a Web site
    who are the largest recipients of Medicare payments. And so,
    this is a whole space that we believe is going to improve
    quality and reduce price.
        Mr. Kennedy. Thank you.
        If I can, I have got about 30 seconds left. You touched
    based in your written testimony, and as well I think with Mr.
    Schrader and a couple of other times, about the transition off
    of fee-for-service basis in Medicare. I was hoping that you
    could just provide a little bit more detail on the learning and
    action, how that is going and what you see going forward, and
    if there are ways we can be helpful, in 20 seconds or so.
        Secretary Burwell. Important, thousands have joined. It is
    a means by which the government in its changes in payment tries
    to align with the private sector. So, we move together. We
    learn from each other. We get better results, and we prevent
    unintended consequences. And we are seeing that start to
    happen.
        Mr. Pitts. The Chair thanks the gentleman.
        I now recognize the gentleman from Pennsylvania, Dr.
    Murphy, 5 minutes for questions.
        Mr. Murphy. Thank you.
        Welcome, Madam Secretary.
        I am going to run through a lot of statistics, but it is an
    important issue because, as we are trying to deal with mental
    health reform legislation, one of the key issues is having more
    psychiatric beds because of the IMD exclusion. We used to have
    500,000 psych beds in this country in the 1950s, and now we
    have less than 40,000. We need 100,000 because people in an
    acute phase of a psychotic break need a place to go besides
    being given a five-point tiedown in an emergency room or being
    sent to a jail cell or being discharged back in the streets,
    where they have a high risk for suicide, victimization, et
    cetera.
        I want to do a couple of things. The consequence of non-
    treatment of serious mental illness, according to NIMH even
    back in 2010, was pretty staggering. They said that 40 percent
    of schizophrenics and about 51 percent of people with bipolar
    illness are untreated and a large part of the homeless, about
    200,000 or so, living in abysmal conditions, have high risk for
    other medical problems, and 28 percent of them get their food
    out of the garbage. So, high risk for a wide range of things.
        Out of those who are incarcerated, the seriously mentally
    ill make up 16 percent of the present population, about almost
    50 percent of the overall prison population of mental illness,
    and high risk for other things. But I want to go through some
    of these things, too.
        People with delusions and hallucinations, the longer that
    they go without treatment, the worse it gets. The longer a
    person waits for treatment for a psychotic episode, the longer
    it takes to get their illness under control. For bipolar
    disorders, the sooner a person gets on lithium or other
    treatments, the better their treatment goes.
        But what happens here is you have a wide range of people
    with serious mental illness with Medicaid, with SSI and SSD
    recipients. The cost of untreated mental illness is pretty
    amazing. The direct cost that I see here for treatment of a
    serious mental illness, about $55 billion; indirect cost, about
    $70 billion. But, when you have added cost for emergency room
    care, private medical care, these costs go up considerably.
        The cost of untreated diabetes in America is about $245
    billion. That is $176 billion is direct medical costs. The
    reason that is important is many people with serious mental
    illness have very high risk for diabetes.
        Similar high numbers are also there for cardiovascular
    disease, for pulmonary disease, for infectious disease, all of
    which have a higher mortality and morbidity rate for the
    mentally ill. And you probably know that studies have said the
    mentally ill tend to die 25 to 10 years sooner, not because of
    suicide, but because of other medical complications.
        So, it comes down to this point: when we have asked the CBO
    to score the issue of what would happen if we looked at more
    hospital beds, they, quite frankly, admitted they couldn't do
    that and they simply took a number and the number of hospital
    days, psychiatric hospital days in America, and said, ``Well,
    if we pay for them all, it is going to cost somewhere between
    $40 and $60 billion in 10 years. We have no idea how to do
    this.''
        We really need your help, and I actually think this would
    be significant savings for Medicaid and Medicare if we get this
    right. If we already know that people with serious mental
    illness are overusing emergency rooms versus caring for
    themselves, if we know that they have a higher incidence of
    those chronic illnesses I mentioned before, and we know that if
    they are not treated, it gets worse, it makes a lot of sense
    and dollars if we have hospital beds for them when they have
    this acute illness, stabilize them, make sure they have
    outpatient care then, instead of doing what we have been doing.
    And that is, we have traded those beds in the asylums for
    prison cells, for blankets on a subway grate, for the emergency
    room gurney, and the county morgue.
        So, as we are going through this, I wonder if you have done
    any analysis here and can maybe talk about some direction that
    you are guiding CMS, because we need solid numbers of what it
    is costs to not treat and what it costs to treat. I wonder if
    you could comment on that.
        Secretary Burwell. So, our estimation is that, by 2020,
    actually, just the treatment cost for behavioral health and
    substance abuse will be $280 billion. And so, that doesn't
    include even a number of the other things that you have talked
    about in terms of what this does as a nation. We agree, and as
    part of our behavioral health proposal, the idea of getting
    those people into care, our estimates are some of those people
    with severe issues don't get into care for 3 years.
        Mr. Murphy. Three years?
        Secretary Burwell. And that is about access. Yes. And so,
    making sure that we have the ability for access when it is
    severe or even before it is severe is an important part of the
    proposal.
        With regard to our IMD proposal that Mr. Kennedy raised, I
    think that there are ways that we could be helpful in having
    conversations about how we solve those economics and how that
    was scored in terms of what we did. We would be happy to do
    that.
        The other thing that I just think is an important part,
    sort of putting on my old OMB hat, so that we get to the place
    where we can understand how we spend money and what savings we
    get, and that sort of thing, is actually some of the money that
    we have asked for in this behavioral health money is about
    going ahead and doing the evidence-based work, evaluation.
        I know many times people don't want to fund evaluation, but
    it is essential for the kinds of statistics that we need to
    show what you are talking about. But, in the meantime, we can
    work on our----
        Mr. Murphy. Thank you. Let's do this, because I believe we
    can save a lot of money. This committee really needs this
    because, I will tell you, there is bipartisan support that we
    have got to fix this problem to help Americans.
        Thank you very much. I yield back.
        Mr. Pitts. The Chair thanks the gentleman.
        Now I recognize the gentlelady from California, Ms. Matsui,
    5 minutes for questions.
        Ms. Matsui. Thank you, Mr. Chairman.
        Thank you, again, for being here, Secretary Burwell. I am
    glad you are here to highlight the ways that HHS plans to
    continue and expand critical investments in health and well-
    being of the American people.
        The first step toward reforming our nation's healthcare
    system has been to improve access to healthcare by ensuring
    that everyone can obtain affordable healthcare coverage. We
    know that the Affordable Care Act has made great strides in
    that goal, and we must continue forward. We must also continue
    to be forward-looking and take the next steps in healthcare
    reform. We need to continue to make strikes toward ensuring
    that everyone has access to the right care at the right time at
    the right price.
        I believe that there is great potential in the power of
    technology to help us achieve our goals of healthcare delivery
    system reform. Electronic health records can improve providers'
    ability to coordinate care, and technology such as face-to-face
    video between providers and patients and technology that allows
    providers to remotely monitor patients' chronic conditions can
    increase access to needed care, improve patients' outcomes, and
    reduce cost.
        I was very pleased that this year's budget expands the
    ability of Medicare Advantage plans to deliver services via
    telehealth and enables rural health clinics and Federally
    Qualified Health Centers to qualify as originating telehealth
    sites under Medicare.
        Secretary Burwell, I am pleased with this progress, but I
    think there is still much more we can do. Can you talk a little
    bit about the inclusion of telehealth in the budget and any
    other proposals that HHS is currently considering in this
    space?
        Secretary Burwell. So, I think we think that telemedicine
    and telehealth is an important part of getting access. We have
    talked about access. Certainly, in rural communities and other
    communities this is going to be an important tool.
        We have taken two, as you articulated, very specific steps
    in our budget, because we thing Medicare Advantage should pay
    and because part of the reason that the field is not developing
    as much is because people don't get paid. So, if you don't pay
    for the ability to do these services--that is part of the
    Medicare Advantage.
        The other part is finding the facilities that will meet
    qualifications, so you do it in an appropriate and safe way.
    And that is the proposal that you mentioned, and it is related
    to HRSA and our Federally Qualified Health Centers. We know
    that these health centers are serving literally millions and
    millions of Americans across the country, and most people
    actually have some in their district. And so, that idea that
    you can use them as a base.
        The other thing that we are working on right now is--and it
    gets to Mr. Pallone raised in his earlier comments the issues
    of IHS, Indian Health Service. Right now, we are suffering from
    a very serious problem on our reservations in terms of youth
    suicide. In order to get providers in places like Pine Ridge,
    it is very, very difficult. And so, we are using our ability to
    actually use telemedicine as a means by which we can quickly
    get providers. Because when you have these suicides, making
    sure those children have the support they need, other children,
    is a very, very difficult thing to do quickly----
        Ms. Matsui. Yes.
        Secretary Burwell [continuing]. Because we can't get the
    providers to go.
        And so, while we are working on permanent solutions, these
    may become the permanent solutions because they are stable.
    Providers come and go, but the telemedicine providers we think
    will be in a place where they are going to provide more care
    for a longer term.
        Ms. Matsui. Thank you very much, and I look forward to
    continue to work with you on these issues.
        To ensure that Americans have the ability to access the
    right care at the right time, we must work hard to achieve that
    goal for the whole person, which includes access to mental
    health care. One of the goals of the delivery system reform is
    increased care coordination and behavioral health integration.
    We must ensure that people have access to a full spectrum of
    mental health services and that those services are integrated
    into medical care and coordinated across different providers.
        I believe that the Excellence in Mental Health
    Demonstration Project, which I coauthored with my colleague,
    Congressman Lance, has the potential to reform our nation's
    mental health system by improving access to community-based
    care, and by integrating and coordinating that care across
    different provider types.
        Secretary Burwell, thank you for including in the budget an
    expansion of this demonstration project to six more states. The
    more we can test out this model, the better chance we have of
    finding out what works, so we can expand it to those who so
    desperately need a better system of mental healthcare.
        Would you like to comment further on HHS's work on this
    project and its potential?
        Secretary Burwell. Yes. We think it is a very important
    part of our work in terms of getting this integration and
    getting it quickly and doing it in a way that we can both get
    integrated care and, also, move towards where people are paying
    for value, not volume, in terms of getting the right payment to
    providers.
        I think you know that, with your help and support, we have
    beat the statutory deadlines with regard to the implementation.
    And then, we have added to that by the proposal in the budget
    which we hope will be viewed favorably.
        Ms. Matsui. Yes. Thank you very much.
        Mr. Pitts. The Chair thanks the gentlelady.
        Now I recognize the gentleman from Illinois, Mr. Shimkus, 5
    minutes for questions.
        Mr. Shimkus. Thank you, Mr. Chairman.
        Secretary Burwell, thank you, and thanks for reaching out.
        We gave you a heads-up to talk about this CMS Web site
    thing. Of course, when you put something up, that means time,
    effort, and energy was placed to prepare for this to actually
    happen. Of course, it was up, it was down.
        So, the basic question is, does CMS intend to go forward
    with this experiment?
        Secretary Burwell. In terms of the----
        Mr. Shimkus. The Part D drug payment model.
        Secretary Burwell. So, with regard to this issue, I think
    as you appropriately reflect, this was something that came out
    ahead. With regard to the issue of high-cost drugs, which is
    what this issue is about in terms of the potential effort, what
    we have tried to do--and this is to the point of getting input
    in December--we had a meeting that had both those from the
    pharmaceutical industry and other stakeholders to come and talk
    about what can we do that maintains----
        Mr. Shimkus. No, that is different than having a proposed
    rule. So, what you did was, what CMS did by shooting this
    publicly is raise a lot of red flags. Is there going to be a
    rule? When is there going to be a rule? When are you going to
    notify Congress? And so, that is why the questions.
        Secretary Burwell. The questions, in terms of speaking to
    the specifics of the rule, in this particular place because
    things are market-sensitive, I have to be careful in terms of
    it.
        Mr. Shimkus. The market, that is why putting it up on the
    Web site, the market sensitivity to that, too, is just as bad.
        Secretary Burwell. That was an error. It was an error, and
    I think we have very clearly said it was an error.
        Mr. Shimkus. But it was a premonition of future things to
    come.
        Secretary Burwell. In terms of specifically speaking to
    what and when we will do regulations, I want to be careful
    about that because of the market sensitivity. But what I think
    is fair to say is, with regard to this issue, we will speak to
    it more in the future.
        The issue at hand is, in Medicare Part B, in terms of how
    the payments are done, they are done in ways where you, as a
    provider, are incentivized by a percentage. That incentive is,
    if you are going to be paid a percentage of the cost of
    something, then what we are doing is we are encouraging you to
    prescribe the larger-cost item. And that is the substance of
    the issue at hand and why we are focused on it.
        With regard to the specifics, we hope to have more soon on
    that issue.
        Mr. Shimkus. OK. Let me move to this issue on margins. The
    NIH states that the use of this is not appropriate means for
    controlling prices. So, the question is, why haven't you all
    responded in this process involved in the most recent petitions
    in this space and provide a sense of the agency's current
    thinking on margins?
        Secretary Burwell. We plan to respond to that. I think you
    are referring to the letter that I received from a number of
    Members in terms of the most recent questions, and we will
    respond to that letter.
        Mr. Shimkus. Because, then the followup is just, obviously,
    the R&D and the risk and return. We need some clarity on this
    process.
        Secretary Burwell. Yes, and I think it gets to the bigger
    issue, which is what I was starting. It is the question of how
    we, as a nation--the high-cost drugs and the issue of drugs,
    when we look at Medicare expense and what we saw, the increases
    in 2014 came from mainly high-cost drugs. There were some
    changes in other things, but in terms of that, and what
    percentage of our Medicare budget will be paid to drugs
    continues to grow. And so, what we need to do is find
    approaches and strategies that balance both innovation--because
    we want that R&D to get the best things--but create some
    downward pressure. Because I think whether it is people in
    Medicare or individuals who actually pay for their drugs in
    employer-based care, everyone is seeing the difficulty in both
    specialty drugs, but in also some cases non-specialty drugs.
        Mr. Shimkus. And my last thing, let me talk about Medicaid
    for a second. Under current law, illegal immigrants are not
    supposed to get Medicaid. However, reasonable opportunity
    period exists. So, the debate that is going on in America is,
    why is there a reasonable opportunity period for illegal
    immigrants when there may not be--in fact, there is not--for
    citizens who don't have this ``reasonable opportunity period''
    to prove that they qualify, either through long-term care or
    because of their finances? And should that not be afforded to
    citizens the same as it is being afforded to illegal immigrants
    right now?
        Secretary Burwell. In terms of the affording it to
    immigrants, are you referring to within Medicaid immigrants
    aren't eligible?
        Mr. Shimkus. That is correct, but, obviously, some are
    getting. There is a period of time in the law that requires--
    there is a reasonable opportunity period. So, there may be
    coverage for them to, then, either prove, yes, they are legal
    or not. So, then, the question is, why it is not afforded to
    legal citizens based upon finances and long-term care?
        Secretary Burwell. I think in Medicaid it is applied both
    to any----
        Mr. Shimkus. Can you just check on that for me?
        Secretary Burwell. I will check on that.
        Mr. Shimkus. I appreciate it. Thank you.
        Secretary Burwell. Because it may be the marketplace. It
    may be the distinction. Let us come back and find out because
    Medicaid is saying that it may be the marketplace. So, let's
    come back, if that is the question.
        Mr. Pitts. All right. The gentleman's time has expired.
        The Chair now recognizes the gentlelady from Illinois, Ms.
    Schakowsky, 5 minutes for questions.
        Ms. Schakowsky. Thank you, Secretary. I want to join in the
    congratulations to you on the Affordable Care Act. While all of
    us acknowledge that there are some problems, we have made such
    tremendous strides, and it would be wonderful if we could sit
    down and just fix the things that we could fix, make it even
    better.
        I had a whole bunch of questions to ask you. But, since
    July when abortion opponents released manufactured and highly-
    edited videos, my colleagues on the other side of the aisle
    have been on a mission to undermine women's rights. And
    apparently, today isn't any different.
        But facts matter and not a single claim made by the other
    side has been supported by a single shred of evidence. On the
    contrary, three congressional committees found no wrongdoing in
    their investigations of Planned Parenthood. The chairman of one
    of the committees investigating Planned Parenthood, Congressman
    Jason Chaffetz, went so far as to say, ``Was there any
    wrongdoing? I didn't find any,'' when asked about his
    investigation.
        I would like to submit into the record, Mr. Chairman, a
    news article that includes this quote.
        Mr. Pitts. Without objection, so ordered.so ordered.
        [The information was unavailable at the time of printing.]
        Ms. Schakowsky. Moreover, every state that has concluded
    their investigations into Planned Parenthood has come up empty-
    handed. In fact, a Texas grand jury ended up indicting two
    persons associated with the Center for Medical Progress,
    including its leader, David Daleiden, after their investigation
    uncovered illegal activity conducted by those individuals, not
    by Planned Parenthood.
        I would like to submit into the record another article
    detailing that indictment.
        Mr. Pitts. Without objection, so ordered.
        [The information was unavailable at the time of printing.]
        Ms. Schakowsky. Finally, just this week, The Washington
    Post editorial board published an article calling the so-called
    investigation, what I believe it is, a witch hunt. Not only do
    they point out that every state and federal entity that has
    investigated Planned Parenthood has found nothing, but the
    article also mentions the troubling document requests and
    subpoenas issued by the chairman of the Select Panel to Attack
    Women's Health--that is what we call it--where I serve as the
    ranking member. I would like to submit that article into the
    record as well.
        Mr. Pitts. Without objection, so ordered.
        [The information was unavailable at the time of printing.]
        Ms. Schakowsky. The relentless targeting of Planned
    Parenthood, the attack on women's health rights, and the
    disregard for facts have to stop. Here is what I want to ask
    you about this: research using fetal tissue conducted by
    reputable universities across the country has greatly
    contributed to our understanding and treatment of many
    diseases. I know you mentioned some of this before, but can you
    describe the importance of fetal tissue research and the
    advances that have been made possible because of it?
        Secretary Burwell. So, a number of the advances, as I
    mentioned, hepatitis A, mumps, measles vaccines, in terms of
    that. We also know that the research that is ongoing actually
    helps with issues around Down's, macular degeneration. Most
    recently, we have seen it contribute to our ability to work on
    getting an Ebola vaccine.
        And so, this research is an important part of the research
    in advancing science. As I articulated before, we take very
    seriously the constraints and rules around the research at HHS
    and following those.
        Ms. Schakowsky. So, there are definitely laws in place and
    regulations in place that make sure that this is done. Well,
    could you describe anything about the ethics of this?
        Secretary Burwell. Two of the things that I think are
    probably the most important is no valuable consideration. In
    terms of that, that has to do with the question of payment. And
    then, the second issue is consent. That is another issue that
    many states have laws about in terms of what people do. I think
    those are probably the two most important that people on both
    sides of this conversation have focused on.
        Ms. Schakowsky. So, you can verify that there is no ability
    to make a profit on the sale of fetal tissue?
        Secretary Burwell. We have turned these documents over--
    they have been requested of the NIH--in terms of the
    attestations that our grantees have with regard to fulfilling
    the state and federal laws, both, in terms of saying that none
    of those things have occurred. That occurs when the grant is
    given as well as at the point of renewal of grants.
        Ms. Schakowsky. Thank you.
        I also wondered, in the brief time I have remaining, if you
    could just say what impact has Planned Parenthood had on access
    to reproductive health services and what it means for both men
    and women if those health centers were to be closed.
        Secretary Burwell. I think it is both reproductive health
    services, but I actually think it is important to recognize
    that it is broader service as well. So, about 3 million women
    receive services across the country every year, it is
    estimated. Those services are issues, also, of wellness and
    cancer screenings and others. So, reproductive health is one
    element, but it is broader in terms of the basic healthcare
    that women are receiving from this organization.
        Ms. Schakowsky. Thank you so much. I yield back.
        Mr. Pitts. The Chair thanks the gentlelady.
        I recognize the gentleman, Dr. Burgess, 5 minutes for
    questions.
        Mr. Burgess. Thank you, Mr. Chairman.
        Madam Secretary, I apologize that I wasn't available to
    take your call the day you called. I appreciated you leaving
    the message. I knew we would have had a chance to talk today.
        At the outset, let me just say I have got so much stuff
    that I need to cover, and I recognize we won't get through it
    all. So, I will submit some of this for your written attention.
        Furthermore, because of the bill that repealed the
    sustainable growth rate formula last year, and now the payment
    reform that is going on in CMS--and Dr. Conway has been very
    good about coming in and talking to me--but I really think the
    ongoing dialog between HHS and the committee and Members of
    Congress, I mean, this will live on after this administration
    concludes and the next administration starts. It is so
    important that we get it right because this could form the
    basis, the nidus for what payment reform really looks like, not
    just in Medicare, but with other payers as well.
        It is critical we get it right because the whole purpose in
    doing the Medicare SGR repeal was we had too many doctors that
    were legally practicing medicine. SGR pulled the joy out of the
    practice. I think we are on the right foot now with getting
    this fixed, but it does have to be done correctly.
        But a couple of things I do want to cover with you.
    Somebody already referenced part of the Affordable Care Act,
    Section 1311(h), the part that deals with providers. It says--
    let me just read it, so I get it correct--that ``Under the
    quality improvement,'' which is Section (h) of 1311,
    ``beginning on January 1st, 2015, a qualified health plan may
    contract with (a) a hospital,'' and it goes through the
    parameters; ``(b) a healthcare provider, only if such provider
    implements such mechanisms to improve healthcare quality as the
    Secretary by regulation may require.''
        Now can you understand why this makes many of the people
    that I interact with on a daily basis, the nation's physicians,
    can you understand why that makes them nervous? Have you begun
    to promulgate those regulations? Are those going to be new
    rules that we can anticipate? What is happening under Section
    1311(h)?
        Secretary Burwell. Is it under 1332?
        Mr. Burgess. No, it is 1311.
        Secretary Burwell. So, I will have to come back on 1311.
        Mr. Burgess. OK.
        Secretary Burwell. We have done guidance under 1332. And
    I'm sorry, 1311(h) is not one that is front-burner, but we will
    come back. I apologize. Maybe I will know it by another name--
    --
        Mr. Burgess. OK.
        Secretary Burwell [continuing]. But I am not connecting.
    So, we will come back on that. For 1332, we have issued
    guidance on. That is the one I think that many people are
    raising on both sides, a lot of conversations about that one.
        Mr. Burgess. Last summer you addressed the National
    Governors Association, I believe. I heard it on C-SPAN while I
    was driving around in my district through the miracle of
    satellite radio. Governor Fallin from Oklahoma asked you some
    questions because of the problem she has in Oklahoma with
    prescription drug difficulties. She talked about a prescription
    drug monitoring program that she has developed in Oklahoma,
    but, apparently, Medicaid recipients fall outside of that. I
    think her question to you was can something be done to mandate
    the same prescription drug monitoring requirements that she has
    under her state through the federal part of the Medicaid
    program.
        Secretary Burwell. So, I will have to go back. But I think
    with regard to the mandatory using of a PDMP, a prescription
    drug monitoring program, it is occurring at the state level.
    All but one state has it in place. But it is done on a state-
    by-state basis in terms of having the physicians use it.
        What we are trying to do--and I just met with the governors
    on opioids, and the governors produced a really good document
    that I would recommend for folks to look at in terms of their
    recommendations around this. Many of the states I think are
    trying to advance that. What we are trying to do is share best
    practices. I called two times, have called 50 states together,
    so that we can get the right procedures that are happening in
    some states applied to the others. If there are things we can
    do, we welcome the opportunity to do them. I think it is a
    state issue, but we will double-back on that.
        Mr. Burgess. But her specific request to you was she needed
    help in the Medicaid program because somehow it fell outside
    what she had available to her as a governor under State law.
        I will just say, speaking as a provider, we want to do the
    right thing. We want to be able to provide our patients who are
    in pain, we want to be able to provide them pain relief. At the
    same time, we want to participate in whatever diversionary
    prevention programs are out there. So, this is extremely
    important to providers, I will just tell you, having been on
    both sides of that issue.
        Let me, in the brief time I have left, the issue of the
    unaccompanied minors, of course, Texas, the Lower Rio Grande
    Valley sector, I have been down there several times. I met with
    DHS. I met with your people, with ACF and ORR. I will tell you
    I am disturbed.
        I am also on the Helsinki Commission. We had a hearing last
    fall on the Helsinki Commission where we heard from two victims
    of child trafficking. Both of these women were trafficked
    through family members, by family members, had come into the
    country illegally. Granted, OK, they broke the law. But they
    had very compelling testimony of why was no one looking out for
    us. They were delivered to a family, which subsequently, then,
    put them into a sex trafficking situation, and there was no
    respite, no help for these individuals.
        We have had so many people in the last 2 years, so many
    unaccompanied minors come across. They produce a telephone
    number from goodness knows where. This is an uncle. This is a
    brother.
        Look. Many, many years ago, I went through a child adoption
    process. I know how intrusive and exhaustive that was. We are
    just sending these people off to a telephone number that they
    happened to produce out of their back pocket when they are
    picked up out of the river. And we wonder why now there are
    problems that are surfacing.
        Again, I ask for your help in interacting with your agency,
    ACF and the Office of Refugee Relocation. We have got to do a
    better job. Yes, I get the security side and we have got to do
    a better job on the border. But, if we also have a role for HHS
    with dealing with people who end up in the country, we have got
    to do a better job there. So, I do welcome the opportunity to
    talk to you and the agency more about that in the future.
        Secretary Burwell. Thank you. We take it very seriously. We
    want those children to be safe. We have made a number of
    changes. We have ideas from PSI on the Senate side. We will be
    working to implement those. But, if there are other things we
    can do--we have put in an 800 number. The background checks
    have been expanded. There are a number of things that we are
    doing, followup calls, and that sort of thing. If there are
    other things that you see, having been through that same
    process you described, making sure you do everything you can to
    have children with safe people is something we think is
    extremely important.
        Mr. Pitts. The gentleman's time has expired.
        Mr. Burgess. Thank you, Mr. Chairman.
        Mr. Pitts. The Chair now recognizes Judge Butterfield, 5
    minutes for questions.
        Mr. Butterfield. Thank you very much, Mr. Chairman.
        Thank you, Secretary Burwell, for coming today, and thank
    you for your testimony. I was present when you testified, a
    couple of hours ago I guess it was. But thank you for coming
    and thank you for all the work that you do, and especially your
    willingness to embrace the people of Flint, Michigan. You and I
    had a brief conversation about that last week, and I want to
    thank you publicly for your willingness to engage in that very,
    very sad situation.
        Mr. Chairman, I want to go back to the issue of the
    Affordable Care Act. I know that is a subject that some on this
    committee have talked about endlessly. But I want to go back to
    it from my perspective and to continue to say that the ACA has
    made a positive difference for more than 18,000 constituents in
    eastern North Carolina, which is where I am from, 18,000
    constituents.
        More than 18 million Americans who now have quality,
    affordable health insurance, that is, by any definition,
    progress. But many Americans, including 700,000 in North
    Carolina, are still missing out on the benefits of the ACA
    because our state governments have refused to expand the
    Medicaid program. It is absolutely a shame, and I will continue
    to say it every chance I get, it is a shame that 19 states in
    the United States have failed to expand Medicaid. They continue
    to block people from accessing healthcare funding which they
    have paid taxes for and rightfully deserve.
        I applaud the President's efforts to ensure that all
    states, regardless of when they decide to expand Medicaid, are
    eligible for 100-percent federal support for Medicaid expansion
    during the first three years of participation. Yesterday
    Congress Green and other Democratic members of this committee
    and I introduced legislation to codify the President's vision
    to incentivize Medicaid expansion.
        I also appreciate the President's efforts to combat health
    disparities for African-Americans and other subgroups in the
    2017 budget request. The prevalence of health disparities is
    alarming and can be seen in all areas of health from access to
    care to susceptibility to illness, to the lack of diversity in
    the healthcare workforce and in clinical trials. The 2017
    budget includes meaningful investments which can help improve
    access to care for underserved communities, develop new cures
    for diseases which disproportionately affect African-Americans.
        And so, as I close, Mr. Chairman, I simply want to ask the
    Secretary one, perhaps two, questions. At what point, Ms.
    Burwell, under current law will states that choose to expand
    Medicaid no longer be able to receive 100-percent federal
    support for their expansion? At what point do they lose it?
        Secretary Burwell. At this point they would not start with
    100 percent in terms of next year. And so, that is why we have
    proposed the legislation, because I think we think it is
    important for any state, whenever they come in, to have that
    benefit of the 100 percent.
        Mr. Butterfield. And so, it is your position and the
    President's position that this would help encourage the states
    to expand their program?
        Secretary Burwell. We do.
        Mr. Butterfield. You call it incentivizes the states to do
    it?
        Secretary Burwell. We want to encourage the states. As I
    said many times in that same session that you heard, probably
    you heard me say to the governors, ``I want to work with you to
    do it the way that works for your state.'' And that means a
    conversation one-on-one with every state, but we are willing to
    do that. This is that important. I am personally engaged with
    every governor who wants to have that conversation.
        Mr. Butterfield. And I know you are, and I thank you for
    that.
        I yield back.
        Mr. Pitts. The Chair thanks the gentleman.
        I now recognize the gentleman from New Jersey, Mr. Lance,
    five minutes for questions.
        Mr. Lance. Thank you, Mr. Chairman.
        Secretary, last August the Court of Appeals here for the
    District of Columbia Circuit issued a decision interpreting the
    Federal Vacancies Reform Act that would prohibit various acting
    federal officers from serving in positions for which they had
    been nominated but not yet confirmed by the Senate of the
    United States.
        The Department of Justice filed a petition seeking further
    review by the entire D.C. Circuit, and that was denied. A
    Washington Post article recently covered the story and quoted
    the Justice Department in saying that the Circuit Court
    decision here in the District of Columbia ``casts a legal cloud
    over a number of acting government officials,'' and I think it
    is in various departments, but your Department was cited.
        Do you know, Secretary, who is in an acting position in
    your Department subject to Senate confirmation who has not yet
    been confirmed by the Senate?
        Secretary Burwell. I do. I do because my Deputy Secretary
    for the Department--and I think you all know we are having a
    budget hearing. Right now, HHS is 25 percent of the federal
    budget. At HHS, it is over $1 trillion that we are managing.
    There is only one Deputy. At some departments, other
    departments, there are Under Secretaries. These are statutory
    constraints in terms of we have one Deputy.
        The Deputy that we have that we have nominated, we cannot
    find in our records or in the records of the administration
    anyone who has not been confirmed or had a hearing for that----
        Mr. Lance. Is that the only official in your Department who
    is before the Senate?
        Secretary Burwell. No, no, no, no.
        Mr. Lance. How many are there? How many are there,
    Secretary?
        Secretary Burwell. I think it is actually important,
    though. This is an important part of the process of making sure
    that we can do--you are an important oversight committee. My
    ability to run the Department well is about my ability to
    actually have people in place.
        The second person is Dr. Karen DeSalvo. Dr. DeSalvo has
    bipartisan support, has been voted out of committee, and it has
    a hold and hasn't been able to go to the floor because she has
    a hold. This is an ongoing----
        Mr. Lance. So, there are two officials in your Department?
        Secretary Burwell. This has been ongoing for an extended
    period of time. We are working with our committee Chairs. We
    are working with others on both sides of the aisle.
        But the question of our ability to----
        Mr. Lance. No, I want to know how many there are. Are there
    two? Is that the answer to my question?
        Secretary Burwell. That is the answer to the question who
    have been awaiting Senate confirmation.
        Mr. Lance. And has your Department reviewed whether or not
    this violates the Vacancies Reform Act, as has been suggested
    by officials in the administration?
        Secretary Burwell. We work with the Department of Justice
    to make sure that we are in compliance, and we work with them.
    The Department----
        Mr. Lance. And do you believe you are currently in
    compliance?
        Secretary Burwell. We believe that our Secretaries, as they
    are in their positions, are appropriately acting, and work with
    the Department of Justice in terms of what will be the
    appropriate next step.
        But I think it actually is important, though. As a
    government, this question of our ability to function, and the
    fact that not only that, and I am very thankful and
    appreciative that today I hope while we are in this hearing
    that Rob Califf will be confirmed for the FDA, and thanks for
    the bipartisan support on that one. But there are others as
    well, in terms of two times we nominated a head of----
        Mr. Lance. I have concerns about the fact that I think that
    all agencies have to follow the Federal Vacancies Reform Act.
    And if a person has not received confirmation, there may be,
    under the Federal Vacancies Reform Act, a cloud over that
    person's continuing in the office for which he or she has been
    nominated, not yet confirmed. Obviously, the Senate is an equal
    partner in the process, confirmation, and initial appointment
    by the President. I would hope that your Department would
    review that.
        Regarding medical device regulation, when are we going to
    have regulations regarding medical gas regulation? I am very
    concerned about that issue. The lack of regulations and lack of
    an approved label for medical gases has created confusion for
    both the FDA and the regulated community. I believe this has
    been going on for four years. We would like to work with your
    Department. Might you be able to discuss with us when the FDA
    could meet the statutory deadline for regulations that are
    supposed to be in place by July of this year?
        Secretary Burwell. I look forward to following up on
    specifically where we are in terms of that specific regulation.
        Mr. Lance. Very good. I think regulations have to occur by
    July, and I am concerned that----
        Secretary Burwell. And it is medical device?
        Mr. Lance. Medical gas regulation.
        Secretary Burwell. Medical gas?
        Mr. Lance. Yes.
        Secretary Burwell. Thank you. Thank you.
        Mr. Lance. Thank you. I will yield back 12 seconds.
        Mr. Pitts. The Chair thanks the gentleman.
        Now I recognize the gentleman from New York, Mr. Engel,
    five minutes for questions.
        Mr. Engel. Thank you very much, Mr. Chairman.
        Madam Secretary, welcome. I, too, received a call from,
    which I appreciated very much. I think it is just typical of
    your thoroughness and competency and the job you have done
    since you were appointed Secretary. And besides, my mother's
    name was Sylvia, so I had to like you from the beginning.
        Secretary Burwell. Thank you.
        Mr. Engel. I want to just piggyback at first on a comment
    that Mr. Butterfield made because it is something that has
    really been bothering me. I know that a lot of our friends on
    the other side of the aisle don't like the Affordable Care Act,
    and we voted 62 or 63 times to repeal it, which I think is a
    waste of time.
        Any major bills of this substance in the past have always
    been tweaked once the bill comes out and you see what works,
    what doesn't work. Nothing is going to work 100 percent. And
    so, if a bill is not doing everything we wanted it to do, we
    could make some legislative changes, and that is really the way
    to do it, not try to repeal it. But our friends on the other
    side of the aisle have refused to do that.
        What also is frustrating is, again, when governors are
    refusing to expand the Medicaid program. My mother Sylvia used
    to have an expression, don't cut off your nose to spite your
    face. And that is exactly what the Republican governors are
    doing that have refused to expand the Medicaid program to
    really help the citizens of their states.
        So, I am wondering if you could comment on anything I have
    just said.
        Secretary Burwell. So, you know, as we have spoken about a
    number of times in this hearing, I think it is so important to
    make that progress in terms of the coverage, in terms of the
    benefits that we can see through expansion. We see that both
    for individuals, and I have had the chance to meet those
    individuals as I have traveled across the country, in terms of
    what it means for them, whether it was someone being diagnosed
    with cancer and actually catching the cancer and being able to
    treat it, in terms of an extreme situation, or just the
    security of knowing that they have the coverage and can do
    prevention as well.
        But I think the economics are also equally important. That
    is about the individual, and that is important. But the
    economic issues in terms of hospital closures, in terms of
    uncompensated care, in terms of people's ability to pay their
    bills, are all things that are important consequences that we
    believe other states are already seeing the benefits from. We
    would like to see the rest of the states and, as I have said
    before, we are willing to work with any state on the approach
    that they think is right with them. We just want to make sure
    we meet the standards that you all have given to us
    statutorily, which is making sure that affordable care is
    available.
        Mr. Engel. Thank you.
        I would like to ask you a few questions involving Puerto
    Rico because you had mentioned Puerto Rico before. You
    mentioned it in your submitted testimony. Could you please
    describe the current economic situation there and how it has
    negatively affected the healthcare system there?
        Secretary Burwell. The economic situation is dire.
    Certainly, my colleague at the Treasury Department, Mr. Lew,
    has taken the lead in terms of both our talking about that
    issue as well as working with the Congress on fundamental
    issues that we think will make a difference to getting to a
    different place economically.
        But the healthcare issues are very closely intertwined. And
    so, the issues of legislation to help in terms of a way forward
    on the economics are very intertwined. The success of that is
    intertwined with healthcare. It is because, traditionally,
    payments have not been equitable, and we talked about that,
    touched on that a little bit earlier in one of the questions in
    terms of the payments on the Medicaid side.
        What that does is it leads to a number of things.
    Obviously, it leads to coverage issues in terms of what kind of
    coverage people get. It also leads to provider issues because
    providers aren't paid.
        What we have proposed in our budget is a proposal that over
    time would bring the payments in Medicaid to a more equitable
    space and at the same time require reforms in terms of meeting
    certain standards of the performance of the Medicaid program.
    So, we think that we have a proposal before the Congress that
    can complement in an extremely important way.
        I think right now with Zika, the numbers continue to rise.
    Today, this morning I got my briefing, 111 cases in terms of
    the U.S. In Puerto Rico right now, they are being spread by the
    mosquito there.
        We know the penetration of both dengue and Chikungunya in
    Puerto Rico. And so, this health issue, if those children, if
    pregnant women get Zika and have children with microcephaly,
    the cost is between a million and $10 million per child.
        Mr. Engel. So, it is really fair to say the situation in
    Puerto Rico is both an economic crisis and a healthcare crisis?
    That is what you are----
        Secretary Burwell. It is fair.
        Mr. Engel. And the President has laid out what I think is a
    very reasonable approach to addressing the issues at hand, and
    I hope this committee will give the President's proposal
    serious consideration.
        I want to ask you about your testimony. You described
    several steps the President has proposed to address the Puerto
    Rican crisis. Can you elaborate on his plan and what it does
    and how it aims to solve the problem?
        Secretary Burwell. So, I think the changes in Medicaid are
    the place where we have the most important proposal. It would
    do the changes over a period of time in terms of that payment.
    It would change the cap as well as change the payment matches
    over the period time, at the same time that reforms are
    required.
        Mr. Engel. And then, my last question is, wouldn't you
    agree that Puerto Rico is a prime example of the tremendous
    risk we would face if Medicaid moved to a block grant system,
    because of Puerto Rico's financing design, it is really not
    equipped with the flexibility it needs to adapt to financial
    downturns?
        Secretary Burwell. Yes, which is why you see monies in the
    supplemental proposal that you will be reviewing from us. Yes
    is the answer, and that is part of why you will see funding in
    the supplemental, because now they have a crisis in Zika.
        Mr. Engel. Thank you.
        Thank you, Mr. Chairman.
        Mr. Pitts. The Chair thanks the gentleman.
        I recognize the gentleman from Virginia, Mr. Griffith, 5
    minutes for questions.
        Mr. Griffith. Thank you very much, Mr. Chairman.
        Thank you, Madam Secretary.
        This morning a new GAO, Government Accountability Office,
    report released found that in 2014 CMS did not resolve
    inconsistencies related to incarceration status for about
    22,000 applications, with $68 million in associated subsidies
    in the Federal Exchange. Some of these areas appear to have
    continued into 2015 and, with unresolved inconsistencies, CMS
    is at risk of granting eligibility to and making subsidy
    payments on behalf of individuals who are ineligible to enroll
    in subsidized coverage.
        CMS told the Government Accountability Office ``The agency
    elected to rely on applicant attestations on incarceration
    status.'' In other words, CMS is literally taking criminals at
    their word and relying on them to tell the truth.
        I want to give you an opportunity, if you are familiar with
    that. But, based on that situation, you can understand, I would
    suspect, why Americans often don't trust the agencies to not
    cut corners on administering the ACA, when they are not even
    going through and doing the due diligence, according to the
    Government Accountability Office, on making sure that folks who
    are incarcerated aren't receiving subsidies.
        Of course, I am concerned about this as a 28-year criminal
    defense attorney before I came to Congress. A lot of these
    folks are not known for telling the truth, and you all are
    relying on just a statement from them that they are not really
    in prison.
        Secretary Burwell. So, with regard to this report, I think
    that this is a continuation of a previous study. And I
    apologize, but----
        Mr. Griffith. Yes, ma'am.
        Secretary Burwell [continuing]. I think I have seen
    preliminary. In terms of the recommendations in this in the
    preliminary, we fully agree with those.
        But let me speak to the other. With regard to the issue of
    making sure the right people are getting any of the taxpayer
    subsidiaries, we take it very seriously. Last year alone, 1.6
    million people were taken off or had chances because we didn't
    have the information that we needed. That was done within a
    window, the statutory window, that we have given, which is
    about between 90 and 95 days, and we continued. So, 1.6 million
    people in terms of aggressively working.
        When the GAO report originally came out--and I think you
    know it was a secret shopper. So, the actions that were taken
    by these individuals, if you weren't the GAO, would have been
    criminal offenses that, as you know----
        Mr. Griffith. Yes, ma'am.
        Secretary Burwell. And I wasn't asking about that. My
    concern is--and, look, I do understand, so I don't want anybody
    out there watching on TV to think that you should have already
    read this report, because I had an opportunity to read it while
    you were answering everybody else's questions.
        [Laughter.]
        But it is of concern that it doesn't appear that some of
    the folks who work for you are taking it seriously when the
    folks who show up on the PUPS list, the Prisoner Update
    Processing System, you all have decided not to use that in the
    case of ObamaCare, but you are using it in the cases that
    relate to Medicare. You are using it for other purposes, but
    they decided not to use it in this case, and then, they are
    just relying on somebody's statement that they are not
    incarcerated. Each individual is different. Some may not be in
    there for a crime of moral turpitude but for some other crime,
    but, as a general rule, a lot of these folks are in jail
    because they lied about something in the first place or took
    money when they weren't supposed to. And we are just going to
    rely on their word?
        I would ask you to check into it. I know you haven't had a
    chance to read it, so I am not saying that you should have a
    ready-made answer. But I would say that you need to read it and
    you need to let us know, and we will do it as a followup, if
    you would. When do you suspect or when do you expect these
    problems to be fixed? Again, I am not expecting an answer this
    morning, but I would like to get an answer at some point in
    time.
        Secretary Burwell. I would be happy to. Aggressively, as
    issues are raised, we want to take care of them.
        Mr. Griffith. I do appreciate that.
        I had some other questions which I will have to submit. I
    see my time has run out and I don't even have time to finish
    the question, much less get an answer. We will submit those to
    you afterwards as well, but they relate to testimony previously
    in front of the committee relating to not giving the ability
    for states to have work programs as a part of the Medicaid and
    CHIP services. And we will follow up with that afterwards
    because----
        Secretary Burwell. Thank you.
        Mr. Griffith [continuing]. Like I said, it is a long
    question, and I don't even have time to get through it.
        But I do appreciate your being here today and always being
    willing to answer our questions.
        Secretary Burwell. Thank you.
        Mr. Griffith. And I yield back, Mr. Chairman.
        Mr. Pitts. The Chair thanks the gentleman.
        Now I recognize the gentleman from California, Mr.
    Cardenas, 5 minutes for questions.
        Mr. Cardenas. Thank you very much, Mr. Chairman.
        In this committee we have been discussing the consequences
    of not properly investing in mental healthcare. The problem of
    insufficient mental healthcare shows up in our nation's jails
    more than anywhere else in the country, particularly jails
    where kids are locked up. Federal law does not allow kids
    enrolled in Medicaid to receive federal funds while in
    detention. But nowhere in the law does it say that these kids
    have to be kicked off of Medicaid. Yet, that is exactly what
    states are doing around the country. For them, permanently
    terminating Medicaid coverage is easier than suspending it
    temporarily. That is the states.
        When kids who already were on Medicaid are allowed to
    resume their needed access to mental healthcare services once
    they return home, the government saves millions upon millions
    of dollars each year when crimes go down because these children
    have access to their mental healthcare instead of having to
    wait months and months and months to get back into the system.
        Madam Secretary, can you talk about the Department's work
    to ensure that kids who are on Medicaid can stay on the program
    once they are back on the streets?
        Secretary Burwell. With regard to this issue, I think it is
    related to our broader criminal justice work and our second-
    chance work that the President and the Attorney General are
    both very focused on. We are working hand-in-glove with the
    Attorney General and the Department of Justice to make sure
    that, both with regard to Medicaid or the marketplace, that we
    both meet the standards that Mr. Griffith has talked about,
    but, as well, making sure that those who come out have the
    opportunities that they need with regard to having healthcare.
    And so, it is across the board that we are working with the
    Department of Justice on it.
        Mr. Cardenas. Thank you.
        Access to reproductive healthcare for women and families is
    very, very important. I am glad to see that the President
    understands the value of critical reproductive health programs
    like Title X and the Teen Pregnancy Prevention Program and
    Personal Responsibility Education Program. It reflects in his
    budget proposal as well. I am glad to see that.
        During a time where we continue to see attacks on the state
    level to restrict access to reproductive health, national
    investments in family planning, cancer screens, STD testing,
    and sex education are more important now than ever to keep our
    families and communities healthy and safe. Latinas, in
    particular, are more likely to experience higher rates of
    reproductive cancers, unintended pregnancy, and face added cost
    and language barriers to getting healthcare.
        Secretary Burwell, could you talk about why it is important
    to invest in women's health? Can you share any information
    about efforts to target hard-to-reach populations?
        Secretary Burwell. So, the importance of the preventative
    services, I think everyone knows what difference they can make,
    whether it is in the whole area of reproductive health, but
    women's health in general. Mothers often, they are the last to
    go in terms of taking care of those preventative services.
        And so, there are a number of things that I would
    highlight. One is the importance that for all folks, because of
    the Affordable Care Act, that there are free preventative
    services without co-pays. So many people don't realize that and
    don't use those services, whether that is everything from your
    flu shot to some pre-cancer screenings.
        I think particularly with hard-to-reach populations, one of
    the most important things that has happened over the last years
    is that the drop in uninsured in the Latino population is 4
    million. So, those 4 million people now have access to quality,
    affordable care, and that is step one.
        Step two means, though, we have to take that coverage and
    make it actually care. They have the insurance, and so, doing
    that. And so, some of the programs that you mentioned and some
    of that work is in CDC in terms of the Center for Disease
    Control and Prevention.
        But we are working to make sure we are reaching those
    communities. We have something called Coverage to Care, which
    is an effort to make sure people who get that coverage
    understand how to access a primary care physician, understand
    how to go about using the care, because many people it may be
    for the first time they have it and they don't know. So, it is
    about the insurance, but it is also about the care and, then,
    it is about the public health issues that we are supporting and
    promoting.
        A Million Hearts is another one where there is a
    disproportionate number in the Latino community who have heart
    disease. The Million Hearts efforts is specifically targeted
    toward heart disease.
        Mr. Cardenas. Thank you for explaining what we are doing
    and what we should be doing more of. So, thank you.
        I was one of those uninsured for a portion of my life when
    I was a child.
        One way to make sure that we improve ourselves as a country
    is we need to pass the EACH Woman Act and Women's Health
    Protection Act, two proactive bills that can turn the tide in
    the right direction. So, once again, thank you for doing what
    you can with the resources you have.
        One of my colleagues mentioned what we are doing on ORR. My
    question is, what can Congress do and are we providing you the
    services necessary to do the job that you need to do?
        Secretary Burwell. We have a budget proposal with resources
    that we do need. So, I hope that will receive consideration.
        Mr. Cardenas. Thank you, Mr. Chairman.
        Mr. Pitts. The Chair thanks the gentleman.
        I now recognize the gentleman from Florida, Mr. Bilirakis,
    5 minutes for questions.
        Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it.
        Thank you, Madam Secretary, for coming. And also, thank you
    for reaching out to us prior to the hearing as well.
        I have a couple of questions. CMS recently released a final
    rule for the Medicaid-covered outpatient drugs, but also
    requested comments on the definition of line extension drugs.
    As you know, there is a strong Member interest in ensuring that
    any further Medicaid drug regulations for line extensions
    specifically exempt abuse-deterrent formulations of drugs such
    as opioids to incentivize continued development of abuse-
    deterrent formulations. We believe CMS can do this under
    current statute. However, the budget includes a proposal to
    tweak the statute in this case. Is the budget proposal intended
    to clarify the law or is it requested because CMS does not have
    the authority to clarify this administratively?
        Secretary Burwell. We would like statutory help with this.
        Mr. Bilirakis. OK. Well, that is the answer I wanted to
    hear because we can do that.
        Secretary Burwell. We need that. We need the help. I think
    across the board this question of how we treat abuse-deterrent
    drugs, the recent changes we just announced at FDA for how we
    are going to review opioids, new opioids coming to market, that
    we will actually consider the issues of addiction as part of
    the decision, not just is this drug safe and effective for an
    individual. These are important things, and I think they
    weren't necessarily always considered.
        Where we have administrative authority, we are going to use
    it. Where we believe we need some help, we are asking.
        Mr. Bilirakis. Very good. Thank you. Thank you.
        The next question, in the December of 2015 OIG report, the
    IG Office stated that CMS could not ensure that the advanced
    premium tax credit payments made to qualified health plan
    issuers were only for enrollees who had paid their premiums.
    CMS did not have a process in place to ensure that the premium
    tax credit payments were made only for enrollees who had paid
    their monthly premiums and was relying on insurance companies
    to provide that information. Does CMS now have policies and
    procedures in place to calculate premium tax credit payments on
    an individual level without relying on insurers' attestation
    and assurances?
        Secretary Burwell. Yes. We historically were using the
    processes we used for Medicare in terms of payments in that
    space, but we actually have gone ahead of that, and starting in
    January, it is on an individual basis. What that actually
    means--and you can see that it is happening--is the number----
        Mr. Bilirakis. This past January?
        Secretary Burwell. This January.
        Mr. Bilirakis. OK.
        Secretary Burwell. So, in place and we have seen the
    results in that the number of those enrolled in the marketplace
    actually is lower because we had more people come out. Because
    we are reconciling with the issuers on a real-time basis, on a
    policy basis, instead of an aggregate basis, is the answer to
    your question.
        Mr. Bilirakis. Very good. Thank you.
        The last question, on or about February 5th, CMS posted
    contractor instructions for its new demonstration that would
    test changes to the way Medicare reimburses Part B drugs--I
    know that Representative Shimkus touched on this--which
    currently uses the average sales price of the drug plus 6
    percent. Those instructions appear to have been taken down at
    the moment.
        What additional payment changes is CMS considering beyond
    the modifications to the ASP reimbursement rate? How will CMS
    select the drugs to which these additional payment
    modifications will apply?
        Secretary Burwell. So, with regard to that specific issue,
    it was an error. It went up. We will be coming out with
    followup on that soon.
        I think probably the most important issue that CMS is
    considering in this space is actually in the budget. So, it
    requires statutory change. It is the issue of negotiating
    authority for the Department with regard to specialty and high-
    cost drugs in terms of ability for the Department to negotiate.
    And so, that is the most important one that, when you ask what
    are we considering, we have a budget proposal. Obviously, now
    that is with the Congress in terms of its consideration.
        Mr. Bilirakis. All right. Thank you very much. I appreciate
    it, Madam Secretary.
        I yield back, Mr. Chairman. Thank you.
        Mr. Pitts. The Chair thanks the gentleman.
        I now recognize the gentleman from Indiana, Dr. Bucshon, 5
    minutes for questions.
        Mr. Bucshon. Thank you, Mr. Chairman.
        Thank you, Secretary Burwell, for being here.
        The Affordable Care Act has resulted in about 30 million
    people still uninsured. Many, in fact, the majority of people
    gaining insurance are through Medicaid expansion, which, as a
    provider--I was a heart surgeon before--I can tell you it
    doesn't guarantee access to the healthcare system, other than
    through the emergency room.
        On the exchanges, deductibles are increasing, premiums are
    up, insurance companies are losing billions of dollars, and
    there are reports that the administration, as was previously
    outlined by the chairman, is illegally making payments to prop
    up the exchanges.
        Non-exchange policy costs are skyrocketing, pricing
    businesses out of the marketplace. That is not my opinion. Just
    ask any business that is dealing with this.
        The 30-hour workweek requirements are hurting school
    districts, county governments, local governments on fixed
    budgets, resulting in loss of wages for the employees.
        The Meaningful Use Program, which, by the way, I am a
    supporter of electronic medical records--we had them in our
    practice since 2005--but the Meaningful Use Program, in my
    view, clearly needs pause because there are significant
    problems with it. The Doctor Caucus gave this opinion also to
    Dr. DeSalvo a couple of weeks ago.
        And the worst problem is the cost to healthcare is the
    biggest issue, in my view, and there is no significant effect
    on the cost of healthcare. Now that is true that payments
    through Medicare may be globally down, but the individual costs
    for services actually continue to rise.
        I am going to focus my question, though, on the Healthy
    Indiana Plan 2.0, which is, as you know, Indiana's answer to
    covering low-income citizens, which is a program that is
    working. Last month Congresswoman Susan Brooks, Senator Dan
    Coats, and I sent you a letter expressing our concern about
    CMS's decision to use what we consider a biased contractor to
    conduct ``independent review'' of Indiana's Healthy Indian Plan
    2.0.
        I know Governor Pence has been vocal about his concern with
    this second federal review led by a hired contractor that has a
    clear and documented bias against plans like Healthy Indian
    Plan 2.0.
        Mr. Chairman, I have a letter from Senator Coats, myself,
    and Susan Brooks that I would like to submit for the record.
        Mr. Pitts. Without objection, so ordered.
        [The information was unavailable at the time of printing.]
        Mr. Bucshon. I just wanted to reiterate that I think it is
    the wrong approach since the contractor is previously on the
    record being critical of Indiana's model and now is supposedly
    going to objectively help evaluate it.
        So, I am sure as you know, under the Federal Acquisition
    Rules, there are established organizational conflict-of-
    interest rules. In the interest of real objectivity, would you
    commit to sharing CMS's analysis of the contractor's adherence
    to those standards with the committee and myself?
        Secretary Burwell. Congressman, I think I have responded to
    that.
        Mr. Bucshon. You have and I have read that letter. I don't
    have it on me, but I have read your letter.
        Secretary Burwell. And in that response, I articulate that
    the individual that is mentioned in terms of the issue of
    conflict is not an individual that is part of the review with
    regard to that.
        With regard to the broader----
        Mr. Bucshon. Well, that is different than our
    understanding, the Governor's, myself, our Senator, and a
    couple members of the Energy and Commerce Committee.
        Secretary Burwell. Then, we should go back. Our
    understanding of the individual that was mentioned in the
    communications that we have had, it may be----
        Mr. Bucshon. Well, it is the Urban Institute.
        Secretary Burwell. There is the issue of----
        Mr. Bucshon. So, how can CMS ensure the study is unbiased,
    given the Urban Institute's documented institutional bias
    against consumer-directed healthcare plans in Medicaid?
        Secretary Burwell. First, we run our usual contracting
    process, which you were referring to, in terms of that it is a
    separate contracting process, and Urban Institute does this
    type of work and has on a non-partisan basis for years.
        The question of the bias was in reference to an individual
    that is not affiliated with this piece of work. And so, maybe
    we have a misunderstanding.
        Mr. Bucshon. Maybe we are at crosshairs there----
        Secretary Burwell. Yes.
        Mr. Bucshon [continuing]. But the Governor and myself----
        Secretary Burwell. Yes.
        Mr. Bucshon [continuing]. Congresswoman Brooks, and Senator
    Coats didn't quite see it that way.
        Secretary Burwell. So, let's go back and try to understand
    whether we are talking about a different individual----
        Mr. Bucshon. OK. I appreciate that.
        Secretary Burwell [continuing]. Or making sure we
    understand fully the----
        Mr. Bucshon. Yes. Can you, then, submit to my office a
    further clarification of that?
        Secretary Burwell. Sure. Absolutely.
        Mr. Bucshon. I would appreciate that.
        RAC audits are an issue, and I know that was brought up.
    Both the contractors and in a couple of different areas,
    hospitals have millions of dollars sitting on the sidelines
    waiting after these audits saying they have improperly been
    paid through the Medicare program. And I have a list of the
    things that are supposed to be happening with the RAC audits to
    make sure they are accurate and fair, but I can just tell you
    that, from a practical standpoint, this is a big problem and
    they need to be reviewed further whether or not they are in
    compliance on an individual case-by-case basis.
        For example, there is an issue with Herceptin, which you
    probably know about, right? I can tell you my wife continues to
    practice anesthesia, and this is about multi-patient vials, so
    to speak. And I will submit that question for the record
    because I am behind. But the point is, in practicality, even
    though it says that you can use one vial for multiple patients,
    from a practical standpoint for safety reasons, liability
    reasons, that is difficult to do. So, I will submit that
    question, but that needs to be reviewed.
        Secretary Burwell. And I think we have reached out to make
    sure that we get the information from your staff on those
    specific examples.
        Mr. Bucshon. You have, yes. Thank you.
        I yield back.
        Mr. Pitts. The Chair thanks the gentleman.
        That concludes the questions of the members present. We
    have time for one followup on each side. The Chair recognizes
    Ms. Castor for a followup on this.
        Ms. Castor. Thank you, Mr. Chairman. And, Mr. Chairman, I
    want to compliment you for having this hearing today because I
    also serve on the Budget Committee. Unlike the Budget
    Committee, where there was a break with decades of tradition in
    not inviting the OMB Director to come before the committee to
    discuss the administration's budget, you understand the
    importance of having this dialog and the ability to have
    members on both sides of aisle ask questions. So, thank you
    very much for holding the hearing today.
        And it is really too bad that the Budget Committee did not
    have that opportunity because, in order to tackle the long-term
    debt that faces this country, it is going to require bipartisan
    solutions. The CBO, the Congressional Budget Office, projects
    that the debt increase over the 10-year window will mainly be
    attributable to the aging of the population and its connected
    healthcare costs and Medicare and skilled nursing.
        The number of people who are at least 65 will increase by
    37 percent by 2026, from 48 million Americans to 66 million
    Americans. That is going to call on Medicare and skilled
    nursing like never before. So, we have got to work together to
    tackle these issues.
        And the problem with the Republican budget that has come
    out of the Budget Committee and, then, passed on the floor in
    the past years is that those fundamental overhauls such as
    block-granting Medicaid or turning Medicare into a voucher
    simply shifts the cost to Medicare beneficiaries, families, and
    states. And those are overly-simplistic solutions that are not
    going to work for American families, and it is not going to
    give us the opportunity to make the reforms in Medicare that
    are necessary to tackle the long-term debt.
        So, this is difficult. This requires bipartisan
    cooperation. There is no silver bullet.
        Madam Secretary, I would like to ask you here at the end of
    this hearing and after a few years in your job and as OMB
    Director, what gives you hope in reform? Is it prescription
    drug reform, the Accountable Care Organizations, payment
    reform? What do you recommend to us to work on in a bipartisan
    way to tackle the tough long-term debt issues driven by the
    aging American population?
        Secretary Burwell. So, I think that what gives me energy
    and gives me hope is that I believe we are at a transformative
    time and what was passed was actually in terms of what you all
    passed and gave to us to implement, is tighter constraints than
    we even had before in terms of the rules and the changes, and
    how we will push through change. And so, we are working very
    hard to implement it. And so, those types of things are
    extremely important.
        But what is happening right now, whether it is in the
    private sector or the public sector, whether it is the issuers
    and insurers or private companies, large self-employed
    companies, they are ready to make the change, because we all
    can't afford healthcare at these prices. And so, it is not just
    about Medicare. It is not just about the marketplace.
        I was thrilled to hear the commitment on delivery system
    reform, because for me that is probably the most important
    thing I can do in the next 10 to 11 months--it is actually
    under 11 months now--is make sure that we put in place the
    changes. Some of that has to do, we talked about the data and
    the data blocking and getting the help we need there. Some of
    it has to do with the support for the expansion of ACOs, the
    bundling, some of these other issues, understanding where we
    can make it better in terms of some of the oncology stuff we
    heard today. But that working in partnership is what I believe
    will make the long-term difference.
        And the other thing I think is extremely important, that
    this is owned by the Congress as well as the Executive Branch,
    because I think that will also make sure it is done in a way
    that is consumer-friendly and consumer-focused, as well as
    getting the change throughout the country. And it is not just
    about CMS or providers or insurers, but we can make it a broad
    change for the country.
        So, I am optimistic. This is hard, but I believe we are
    taking some of the steps that we know are going to get us
    there.
        Ms. Castor. Thank you very much.
        Mr. Pitts. The gentlelady yields back.
        Madam Secretary, as we have discussed on the phone, in
    hearings, several occasions, the California Department of
    Managed Health Care issued a directive mandating that all plans
    immediately include coverage for all legal abortions. And this
    has resulted in pro-life churches/schools being forced to pay
    for abortion coverage in their health insurance plans. This
    action by California is a direct violation of the Weldon
    amendment, which your Department is tasked with enforcing.
        Last year when you testified before us, you said, ``We have
    opened an investigation in the Office of Civil Rights at HHS to
    investigate. We take this seriously. We're trying to move
    through the investigation as expeditiously as possible.''
        Now this directive was issued 18 months ago. The
    investigation was launched 15 months ago. Still, no corrective
    action has been taken.
        So, here is my question: first, would you consider this to
    be an expeditious investigation? And secondly, what specific
    details about the investigation can you provide? What steps
    have been taken? Why has this matter not been resolved? And
    will you set a date by which corrective action must be taken?
        Secretary Burwell. Mr. Chairman, as you know, when you
    called, actually, originally, before the investigation started,
    yours was one of the calls. There are a number of your other
    colleagues that called. There were two or three colleagues that
    called. When you all had called, at that point I talked to OCR
    and we opened the investigation, because I take seriously the
    issues that you have raised and we are going to continue.
        The investigation is opened. It is not complete. Is it
    expeditious? I would have liked for it to have moved more
    quickly than it has moved, but the investigation is open and,
    until it is closed, I am not at a place to discuss in terms of
    what the investigation has yielded or will yield.
        With regard to the issue of timing, as I said, I am not
    satisfied with our speed, continue to work on that issue, but
    don't feel I can give you a specific timeframe because it is an
    investigation and I need it to run its ability and its course.
        Mr. Pitts. Thank you.
        I will yield to Dr. Burgess.
        Mr. Burgess. Thank you, Mr. Chairman. I will just take 30
    seconds.
        You talked about an engaged patient. The Commonwealth Fund
    talks about an activated patient. Consumer-directed health
    plans, HSA-type plans can help with this. There is the
    availability of a Medicare MSA, but it is impossible to find
    one. Nobody at 1-800-MEDICARE knows anything about them. No
    place on your Web site at medicare.gov can you go and get
    information on a Medicare MSA. My feeling is this is something
    where really you could involve the patient in helping to
    control cost and payment reform and product delivery.
        So, we really do need to work on this. It is something that
    has been available since 1996, but they are just vacant on the
    Web site.
        Secretary Burwell. It is not what I am familiar with. So, I
    will check and follow up and see where that stands. We will get
    back to you.
        Mr. Burgess. All right. Thank you.
        Mr. Pitts. Yield back.
        That concludes the questions that we have today. We will
    have followup written questions. We ask that you please
    respond.
        I remind the members they have 10 business days to submit
    questions for the record. So, they should submit their
    questions by the close of business on Wednesday, March the 9th.
        Again, Madam Secretary, you have been very patient, very
    forthright. Thank you very much for coming. A lot of good
    information here today.
        Without objection, the subcommittee hearing is adjourned.
        [Whereupon, at 12:33 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]