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




 
                           THE DEPARTMENT OF


                    HEALTH AND HUMAN SERVICES (HHS)


                    FISCAL YEAR 2017 BUDGET REQUEST

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

                                HEARING

                               before the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 10, 2016

                               __________

                          Serial No. 114-FC09

                               __________

         Printed for the use of the Committee on Ways and Means
         
         
         
         
         
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                      COMMITTEE ON WAYS AND MEANS

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
DEVIN NUNES, California              CHARLES B. RANGEL, New York
PATRICK J. TIBERI, Ohio              JIM MCDERMOTT, Washington
DAVID G. REICHERT, Washington        JOHN LEWIS, Georgia
CHARLES W. BOUSTANY, JR., Louisiana  RICHARD E. NEAL, Massachusetts
PETER J. ROSKAM, Illinois            XAVIER BECERRA, California
TOM PRICE, Georgia                   LLOYD DOGGETT, Texas
VERN BUCHANAN, Florida               MIKE THOMPSON, California
ADRIAN SMITH, Nebraska               JOHN B. LARSON, Connecticut
LYNN JENKINS, Kansas                 EARL BLUMENAUER, Oregon
ERIK PAULSEN, Minnesota              RON KIND, Wisconsin
KENNY MARCHANT, Texas                BILL PASCRELL, JR., New Jersey
DIANE BLACK, Tennessee               JOSEPH CROWLEY, New York
TOM REED, New York                   DANNY DAVIS, Illinois
TODD YOUNG, Indiana                  LINDA SANCHEZ, California
MIKE KELLY, Pennsylvania
JIM RENACCI, Ohio
PAT MEEHAN, Pennsylvania
KRISTI NOEM, South Dakota
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri
ROBERT J. DOLD, Illinois
TOM RICE, South Carolina

                     David Stewart, Staff Director

         Janice Mays, Minority Chief Counsel and Staff Director


                            C O N T E N T S

                               __________
                                                                   Page

Advisory of February 10, 2016 announcing the hearing.............     2

                               WITNESSES

The Honorable Sylvia Burwell, Secretary, United States Department 
  of Health and Human Services...................................     8

                       SUBMISSION FOR THE RECORD

National Association of Chain Drug Stores, statement.............   142

                        QUESTIONS FOR THE RECORD

The Honorable Sylvia Burwell.....................................    81


                           THE DEPARTMENT OF



                    HEALTH AND HUMAN SERVICES (HHS)



                    FISCAL YEAR 2017 BUDGET REQUEST

                              ----------                              


                      WEDNESDAY, FEBRUARY 16, 2016

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:00 p.m., in 
Room 1100, Longworth House Office Building, the Honorable Kevin 
Brady, [chairman of the committee] presiding.
    [The advisory announcing the hearing follows:]
    
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    Chairman BRADY. Thank you for joining us today, Secretary 
Burwell. We appreciate your time and welcome to the Ways and 
Means Committee to speak about the President's fiscal year 2017 
budget request for the Department of Health and Human Services.
    I would like to begin the day by speaking generally about 
this year's budget. Even though the President knows that he 
does not have much time left in office to solve real problems, 
he has decided to put forward in my view a budget that really 
is not rooted in reality for yet another year's budget proposed 
trillions of dollars of new tax increases and more wasteful 
Washington spending.
    The President's efforts to secure his liberal legacy does 
not come cheap. While the United States likes to break records, 
the American people are not cheering for the most expensive 
budget in our Nation's history.
    The President has chosen to completely ignore the very real 
fiscal challenges our country faces in the immediate future. 
This budget is a missed opportunity, especially for the 
programs at your department that impact the lives of millions 
of Americans.
    For example, last year when you testified at the Energy and 
Commerce Committee you said the Affordable Care Act was leading 
to substantial savings for households, businesses, and the 
Federal Government, but we know that is not the case today.
    In fact, the nonpartisan Congressional Budget Office 
recently found the government spending on health care programs 
would grow from $1.1 trillion this year to $2 trillion in 2026.
    We also know that many Affordable Care Act recipients are 
watching their premiums increase by double digits every year. 
And the Medicare Hospital Insurance Trust Fund that our seniors 
rely on will be exhausted in 2026, four years earlier than 
projected.
    These are serious problems that need real solutions, but 
these solutions are nowhere to be found in this irresponsible 
and very expensive budget.
    To add insult to injury, the budget also duplicates 
programs that already exist at your own agency. One proposal 
calls for a new program to provide short-term financial help to 
those in need, even though that is already the central purpose 
of the Temporary Assistance for Needy Families Program.
    Another calls for a new Home Visiting Program run by the 
Ag. Department, despite the current Home Visiting Program run 
by HHS.
    Instead of duplicating programs we already have, Washington 
needs to effectively reform our welfare program and finally 
help more Americans climb the economic ladder through work, and 
while we will disagree more than we agree today, I do believe 
there are some important areas of cooperation.
    I am glad the White House has finally faced reality in one 
area and agreed that the so-called Cadillac tax simply is not 
workable.
    We must also work to put Medicare on a sustainable path, 
and while we do not agree with the specifics in the proposal 
presented today, we do agree we need to address spending on 
post-acute care and medical education.
    I believe we can also find some common ground in the TANF 
reauthorization proposal that includes many of the items that 
were released by this Committee last July in its TANF 
discussion draft.
    And when it comes to child welfare, there is broad 
agreement about the need to keep kids from entering foster care 
in the first place. We share the belief that all programs 
should be evaluated and held accountable for making a positive 
difference in the lives of children across our country.
    So, Secretary, thank you again for joining us today. I now 
yield to the distinguished ranking member from Michigan, Mr. 
Levin, for the purposes of an opening statement.
    Mr. LEVIN. Thank you, Mr. Chairman.
    And, Madam Secretary, a warm welcome.
    I think this will be your last appearance at least as you 
plan before us unless there is a special call, and I hope you 
will not brag about it, but you come with a sense of 
accomplishment and pride in those accomplishments.
    If you just look back a few years, there has been so much 
positive change. Eighteen million previously uninsured 
Americans now have health insurance, 18 million. The growth of 
health care cost has been substantially reduced. One hundred 
and twenty-nine million Americans now do not have to worry 
about having their health care coverage denied or their 
premiums increased because of preexisting conditions.
    The tens of millions who now have free preventive care and 
we do not see the consequences perhaps in this Committee, but 
they are real.
    The re-admissions have gone down also because of ACA, and 
the last enrollment period, and we hope you will cover on this, 
13 million, 13 million signed up.
    About ten days ago I met a woman who told us this story. 
She had breast cancer. She lost her job. She lost her health 
insurance. Because of ACA, she was able now to be covered, and 
then her breast cancer reoccurred, and she looked at all of us 
and essentially said, ``I would not be here today if it were 
not for health care reform and ACA.''
    There are millions of people like this, some with breast 
cancer, some with diabetes, some with other chronic ailments 
who have coverage, and without that coverage would be sicker, 
without that coverage they may not have survived.
    So you will hear a lot of ideology today. We have been 
through that so many times on the floor of the House, efforts 
to repeal, but I think the realities are so different than that 
ideology.
    The President's budget also proposes important reforms to 
Medicare. I hope you will cover on those.
    And for Mr. Blumenauer and myself and others, there has 
been finalized advanced care planning codes, which is 
important. The Administration is also suggesting that we head 
on tackle the opioid abuse epidemic, as well as providing some 
additional money for mental health.
    I want to close by touching on a real health crisis. I was 
in Flint two days this weekend. What has happened there is not 
only intolerable, inexcusable, but with consequences that we 
cannot foretell. Dan Kildee has proposed a bill with the 
support of a lot of us to address the needs there.
    This is a national crisis. The Senate is now debating a 
bill, and there is an effort by two Senators from Michigan to 
add some funds to help address this crisis, this human crisis, 
in Flint for families and especially for children.
    And so I will be asking you questions about the possible 
role of HHS. I think you have already begun.
    I think it highlights what is really in the end the test 
for all of us. Behind these statistics, behind all of the data 
are the lives of individuals in this country, and all of us who 
supported ACA are proud to have done that, and as we go forth 
in our district and beyond, we see what it has meant in the 
lives of the people in our district and this country.
    I yield back.
    Chairman BRADY. Without objection, all the members' opening 
statements will be made part of the record.
    Our sole witness today is the Honorable Sylvia Matthew 
Burwell, Secretary of the U.S. Department of Health and Human 
Services. Sworn in on June 9th, 2014, Secretary Burwell is the 
22nd Secretary of Health and Human Services.
    Prior to serving at HHS, Secretary Burwell was the Director 
of the Office of Management and Budget.
    Welcome, Secretary Burwell. The committee has received your 
written statement. It will be made part of the formal hearing 
record, and you have five minutes to deliver your remarks, and 
you may begin when you are ready.
    Welcome.

 STATEMENT OF THE HONORABLE SYLVIA BURWELL, SECRETARY, UNITED 
         STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Secretary BURWELL. Thank you, Mr. Chairman and Ranking 
Member Levin, as well as Members of the Committee. I want to 
thank you for the opportunity to discuss the President's budget 
for the Department of Health and Human Services.
    As many of you know, I believe that all of us share common 
interests and that we can find common ground. The last 
legislative session, this Committee embraced the spirit of 
bipartisan leadership when it took historic steps to pass the 
Medicare Access and CHIP Reauthorization Act of 2015, and I 
want to thank you for your leadership on that issue.
    The budget before you today is the final budget for this 
Administration and my final budget. The budget makes critical 
investments to protect the health and wellbeing of the American 
people. It helps ensure that we can do our job to keep people 
safe and healthy. It accelerates our progress in scientific 
research and medical innovation and expands and strengthens our 
health care system, and it helps us to be responsible stewards 
of the taxpayers' dollars.
    For HHS, the budget proposes $82.8 billion in discretionary 
budget authority. Our request recognizes the constraints in our 
budget environment and includes targeted reforms to Medicare, 
Medicaid, and other programs.
    Over the next ten years, these reforms to Medicare would 
result in net savings of $419 billion.
    This budget invests in the safety and health of all 
Americans. An issue that we have been working on at home and 
abroad I want to start with and that is as we work to stop the 
spread of the Zika virus, the Administration is also requesting 
more than $1.8 billion in emergency funding, with $1.48 billion 
for HHS.
    We appreciate the Congress' consideration of this important 
and timely request so that we can implement the essential 
strategies to combat this virus.
    I know the rise in opioid misuse and abuse and overdose has 
affected many of your constituents. Affected every day in 
America, 78 people die of opioid related deaths, and that is 
why this budget proposes significant funding in this space, 
over $1 billion to combat the opioid epidemic.
    Today too many of our Nation's adults and children with 
diagnosable mental health disorders do not receive the 
treatment that they need. So this budget proposes $780 million 
to close that gap.
    Research shows that early interventions can set the course 
of a child's success, and that is why we propose extending and 
expanding the Home Visiting Program to help even more families 
in need support their children's growth.
    While we invest in the safety and health of Americans 
today, we must also relentlessly push forward on the frontiers 
of science and medicine. This budget invests in the Vice 
President's Cancer Initiative. This is a vital investment for 
our future. Each one percent drop in cancer death rates saves 
our economy approximately $500 billion, not to mention the 
comfort and security that it brings families across the 
country.
    Today we are entering a new era in medical science. With a 
proposed increase of $107 million for the Precision Medicine 
Initiative and $45 million for the Administration's Brain 
Initiative, we can continue that progress.
    But for Americans to benefit from these breakthroughs in 
medical science, we need to ensure that all Americans have 
quality, affordable and accessible health care. The Affordable 
Care Act has helped make historic progress. Today more than 90 
percent of Americans have health coverage. This is the first 
time in our Nation's history that this has been true.
    This budget seeks to build on that progress by improving 
the quality of care that patients receive, spending our health 
dollars more wisely and putting an engaged, empowered, and 
educated consumer at the center of their care. By advancing and 
improving the way we pay doctors, coordinate care, and use 
health data and information, we are building a better, smarter, 
healthier system.
    Finally, I want to thank the employees of HHS. In the past 
year they have helped to end 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 Nation 
healthier and stronger, and I am honored to be a part of this 
team.
    As members of this Committee, I think, know, I am 
personally committed to working closely with you and your staff 
to find common ground and deliver impact for the American 
people.
    With that, thank you and I am happy to take your questions.
    [The prepared statement of Ms. Burwell follows:]
    
    
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    Chairman BRADY. Thank you for your testimony.
    We will now proceed to the question and answer session.
    Secretary, exchange enrollment for 2016 will be 
significantly lower than the nonpartisan Congressional Budget 
Office projected when the law passed, in fact, about half that 
level, and it has been lower for every year since the law 
passed, and despite spending over $1.7 trillion on coverage, 
poor enrollment results show Americans just are not buying what 
the President is selling on this law. In fact, millions would 
rather pay the punitive individual mandate tax penalty than buy 
Washington designed insurance they do not want and often cannot 
see their preferred doctors or hospitals.
    So it is not surprise the law is not working as advertised, 
and that is because the theories behind this, the Washington 
designed products, punitive mandates are just fundamentally 
flawed.
    So do you believe the exchange enrollment projections--I am 
not talking Medicaid--exchange enrollment projections made by 
CBO at the time of the law's passage and not met each year 
since are fundamentally flawed?
    Secretary BURWELL. So with the----
    Chairman BRADY. Is the CBO wrong or is it the enrollment 
just continues to fail to even come close?
    Secretary BURWELL. I think with regard to the most recent 
CBO numbers, as we look at those numbers, the most important 
thing to focus on is the number of uninsured, and when we look 
at CBO's original projection there, in terms of that drop, and 
what we have achieved as a Nation, we are actually slightly 
higher in terms of the number of reduction of uninsured.
    And I think we all would accept that in terms of how we get 
to that reduction, it is good when we have a lower unemployment 
rate, and that often leads to fewer people being uninsured. It 
is good when it comes through the marketplace, and it also 
happens through Medicaid.
    With regard to the comparison of the numbers, I think you 
know that at the end of this open enrollment, CBO's adjusted 
number is around 13 million. Our number is about 12.7 in terms 
of the enrollment in the marketplace, and one of the big 
changes from CBO's original estimates, CBO estimated a couple 
of things.
    One is that there would be great movement from the 
employer-based market to the marketplace, and that we have not 
seen, and as part of CBO's changes, I think that is an 
important part of what they are considering.
    We now have the numbers before us, and one of the numbers 
that CBO expressed, whether it is a concern or not, is that 
people would move from their employer-based care to the 
marketplace care, and when we have not seen that, but you see 
an uninsured number going down, but you do not see as many 
people in the marketplace as they originally projected.
    Chairman BRADY. Two thoughts. One, you focused on what 
happens in the insured, including Medicaid, when the question 
is really related to the exchange enrollment area, and the 
numbers you cite are enrolled, not paying customers within 
that, which we know it will lower again taking us below the 
projections.
    We just see structural problems, disagree with the approach 
of this law. This Congress, this Committee will continue to 
work toward repealing it and replacing it with more patient-
centered care.
    Final question while you are here. I want to talk to you 
about my requests for information regarding the Obamacare Cost 
Sharing Reduction Program. For more than a year, both Energy 
and Commerce and this Committee have been asking HHS for 
documents and interviews about how the Administration decided 
to funds cost sharing reduction payments from an account 
dedicated to something else, premium tax credits.
    The law is very clear. It states payments from the premium 
tax credit account only may be made for tax refunds and 
refundable tax credits. Cost sharing reduction payments are 
neither of these. They are payments made to insurers to 
reimburse for additional benefits provided to eligible 
beneficiaries.
    Nevertheless, this Administration has paid out more than $5 
billion in these payments in clear disregard of the law. This 
Committee has the constitutional obligation to oversee how the 
Administration implements the programs paid for by American 
taxpayers and has waited patiently for the necessary 
information.
    In response to our inquiry on January 19th of this year 
your assistant secretary wrote that Congress did not have a 
legitimate oversight need for the information requested. This 
does not represent a good faith attempt to respond to 
congressional oversight. This Committee determines what 
constitutes legitimate oversight, not a HHS assistant 
secretary.
    So let me be clear. It should not be necessary to subpoena 
the information this Committee needs to conduct oversight, but 
if HHS does not respond to this Committee's information 
request, I will not hesitate to issue subpoenas for these 
documents.
    So my question to you, and you can resolve this today: will 
you provide this Committee the documents requested and allow 
requested employees to speak with staff, or will I have to 
compel your cooperation?
    Secretary BURWELL. Mr. Chairman, my understanding of where 
we are, and we have had letters back and forth, I have had an 
opportunity to speak with Chairman Upton where this is also in 
terms of your committee and Chairman Upton's committee that we 
are having both of these conversations; have spoken directly 
with him, and my understanding is with regard to that issue 
that we are at a place in terms of an agreement of what our 
next steps forward are in that space.
    I think with regard to the substance of the issue at hand, 
which was the question of the authorities, that we believe and 
have cited we believe that the authority exists in U.S. Code 
13-3124, which I think is the exact provision. We have filed 
our brief as recently as last week.
    I think you know this is a matter where the House of 
Representatives is suing the department and myself with regard 
to this issue, and so we have filed that brief. I think we are 
in conversations with your staff to provide in terms of the 
issues in the conversation that you have asked for.
    And so I think that we are taking that next step right now, 
is my understanding of where we are.
    Chairman BRADY. I do not think that is the case, but here 
is my point. This Committee has oversight interests separate 
from the House's litigation. We have responsibilities and 
oversight that extend well beyond this particular program that 
the Administration's actions have affected.
    The law is clear. The dollars will be spent. The 
Administration spent it in complete disregard to that law. That 
is why we are investigating this action, and so we are going to 
continue to seek those documents, and I am hopeful that the 
agency will be forthcoming both on the documents and making 
those staff available for interviews because we will not give 
up in this regard.
    So with that I would like to recognize the distinguished 
Ranking Member from Michigan, but I have been instructed that 
the House will adhere to the 15 minute rule very tightly. So we 
are going to recess until after these three votes, Madam 
Secretary, and then we will be back at that point.
    The committee is recessed.
    [Recess.]
    Chairman BRADY. Secretary, thank you for being patient. We 
just took a short hearing and made it shorter. So after Mr. 
Levin questions, we will be going to three-minute questioning, 
and it will be strictly enforced. We want as many members to be 
able to visit with you today as possible.
    I will now recognize the distinguished ranking member, Mr. 
Levin.
    Mr. LEVIN. Thank you.
    In order to expedite, Mr. Chairman, everybody's 
opportunity, I will limit myself to three minutes.
    Thank you.
    There was discussion here about the cost sharing issue. I 
just want to mention, Mr. Chairman, the Republicans decided to 
file a lawsuit, and now they want to take depositions outside 
of that lawsuit. I am not sure what the motivation might be.
    You mentioned in your opening statement about TANF. I think 
you and I agreed that we would have an effort on a bipartisan 
basis with the subcommittee leadership on both sides to work 
out possible changes, and I hope we will proceed on that basis.
    Let me just ask you about Flint. There is a panel 
discussion going on now. The person who first came across, I 
think, the deep problems there is testifying. I think also the 
Mayor of Flint is there.
    So if you would discuss the HHS role because there are so 
many health aspects to this in terms of the CDC role, in terms 
of health care for these kids in their schools, et cetera.
    So could you briefly describe what you are undertaking? The 
State failed in its responsibility. The Federal Government is 
stepping up to the plate here. Tell us what you contemplate.
    Secretary BURWELL. So the President asked HHS to take the 
lead in terms of the interagency effort, working with EPA, HUD, 
USDA and FEMA, and we have done that. The Assistant Secretary 
for Preparedness and Response, Dr. Nicki Lurie, is leading that 
effort from an HHS perspective with Dr. Karen DeSalvo, the 
nominee for the office of the Assistant Secretary for Health. 
So that is our lead team.
    Our efforts are focused on two fundamental things in terms 
of where we are and the go forward, supporting the State, the 
county and the community in two fundamental things.
    The first is clean water and water that is potable, 
drinkable, and usable for the community. That has some short-
term issues, and that has to do with things like FEMA helping 
get bottled water out, the installation of filters, which HUD 
is helping with, in terms of making sure people are putting in 
those filters right.
    So there is the short-term solution, and then there is the 
longer term solution in terms of piped water being clean and 
usable. Focusing on that part, EPA obviously is leading much of 
the Federal Government's work in that space.
    The second part of our effort in terms of what we are 
focused on in our plan is to support the local community as 
well as the State in determining the extent of the problem 
cost. In other words, how many children are suffering from 
elevated levels of lead, and then the attendant circumstances 
from a public health's perspective that come with that?
    As we determine that, then determine how we go forward and 
assist in mitigating those circumstances.
    Mr. LEVIN. And in terms of health services, in particular, 
if you would just describe that because in mental health I was 
deeply troubled to learn there is one social worker, I think, 
for the entire elementary school system, and you have here a 
major health crisis for thousands of children who are now 
threatened through no fault of their families at all. Tell us a 
bit about that.
    Secretary BURWELL. So the mental health and the behavioral 
health we think is an extremely important thing, and when we 
activated our efforts and the President asked us to go in, we 
activated SAMHSA, the Substance Abuse and Mental Health part of 
HHS so that they are supporting and providing behavioral health 
for the children, for the parents, for everyone.
    We do that in crisis whether that is where other kind of 
crises occur, natural disasters, shootings or other things. And 
so SAMHSA is also a part of our extended effort on behavioral 
health.
    With regard to other parts of the health issue, we have 
worked with USDA, and USDA is making sure that WIC will pay for 
a formula that does not need to be water mixed.
    Mr. LEVIN. If it is mixed with water, it makes it worse.
    Secretary BURWELL. Right. So USDA is taking those steps. So 
we are working on the health issues both in a preventative 
form, in terms of pregnant mothers, as well as making sure that 
these children are getting tested.
    And we are using our HHS facilities and sites to help with 
that, and whether that is using our health centers that are 
funded through HHS or using our Head Start facilities to get 
the information correctly to parents so they know that they 
need to get tested, and so we are supporting the State and the 
local community in that effort to get the children tested and 
then to do the follow-up services needed.
    Testing is also something paid for in Medicaid.
    Mr. LEVIN. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you.
    Mr. Johnson, you are recognized for three minutes.
    Mr. JOHNSON. Thank you, sir.
    Madam Secretary, I would like to start by asking you about 
the President's budget for refugee resettlement. Is it not 
correct that he proposes increasing the number of refugees to 
at least 100,000?
    Secretary BURWELL. That is correct, by 2017. By 2016, 85.
    Mr. JOHNSON. Now, that is an increase of over 30,000 from 
2015, with many of those refugees coming from Syria. It is no 
secret I oppose the President's plan. We just cannot take the 
chance of a terrorist slipping through because we cannot vet 
these folks.
    Since Texas receives about ten percent of all refugees, my 
constituents are very troubled, but you know what else is 
troubling? These refugees end up on social welfare programs 
like food stamps and Medicaid, and for more than just a few of 
them. In fact, in 2013, over 91 percent of Middle East refugees 
received food stamps while fewer than half worked any point in 
the last five years.
    Madam Secretary, with all of these Syrian refugees coming 
in, how much is this going to cost the American taxpayer, given 
their long-term use of social welfare programs?
    And what are we looking at? After all, we are over $19 
trillion in debt right now.
    Secretary BURWELL. So with regard to the issue and our role 
in the refugees, I think you know our role is at the point at 
which the refugees have been placed that we do limited support 
to the local communities and to the refugees for a limited 
space of time.
    I would be interested in making sure we get the numbers 
that you have with regard to the work numbers because the 
numbers that I have seen are generally higher than that in 
terms of the percentage of people that actually through our 
refugee programs that end up working. So I would love to make 
sure we can follow up with your staff to understand if there is 
a difference in the numbers that we are seeing because that is 
related to this issue of the estimates of the total cost to 
communities and other services.
    Mr. JOHNSON. Yes, we would be glad to get those to you.
    Where are you on issuing new Medicare cards without Social 
Security numbers? Are you still on track to reissue all 
Medicare cards by 2019?
    Secretary BURWELL. Congressman, this is one that you and I 
had both similar interests and similar questions, and in terms 
of 2019 and that time frame, yes, we are very much on track to 
meet those deadlines that have been legislated. I have actually 
pushed the team to see if there is any way that we can beat 
those deadlines, but we are certainly on track at this point.
    Mr. JOHNSON. Thank you, ma'am.
    Mr. Rangel, you are recognized.
    Mr. RANGEL. Thank you, Mr. Chairman.
    Welcome. Puerto Rico, I understand that you have had some 
changes with the DSH formula as well as removing the cap from 
Medicaid, but since I have been in the Congress, Puerto Rico's 
health care system has been far below the national in terms of 
the access to quality health care, and as a result of the 
recent fiscal crisis, it is my understanding a lot of doctors 
and health providers have left the island.
    This changing in the formula, what does this mean in 
dollars and cents as relates to $82 billion discretionary funds 
that you have?
    Secretary BURWELL. So with regard to the proposal that we 
currently have, I think as you said, what we want to do is try 
and get the Medicaid efforts to a place where they are more 
similar to those for the rest of Americans in the country.
    Mr. RANGEL. They are crippled now, and all I want to know 
is in terms of fiscal relief, I mean, what you talk about is 
equity and fairness that we should have had. Now they are 
crippled for a variety of reasons, and health care is a major 
reason.
    In the three minutes I have, could you tell me out of your 
budget how much is set aside to try to give assistance to our 
citizens, most of whom are not Muslim, but to make it easier; 
how much money is set aside to help them in this fiscal crisis?
    Secretary BURWELL. So there are a number of places in the 
President's budget that----
    Mr. RANGEL. Total, if you brought them all together, what 
would it amount to?
    Secretary BURWELL. That I will have to go because I need to 
work with my colleagues at Treasury and we will get back to 
you.
    Mr. RANGEL. Why do you not give an estimate so I will have 
some idea of the degree of urgency that HHS has placed on this?
    Because a large part of their problem is within the power 
of HHS.
    Secretary BURWELL. I think at this point I will have to get 
back in terms of the number. The number is a large one.
    Mr. RANGEL. Well, whatever formulas you have changed, when 
we do anything on the committee, we have to put a dollar 
estimate on what is it going to cost.
    Secretary BURWELL. And we do have a dollar estimate in the 
budget, and I will get back on the number. I am----
    Mr. RANGEL. You could not even guess how much of the 82 
billion we are changing the formula, bringing equity and 
fairness, bringing it up to Stateside, providing more money for 
a disproportionate share, Medicaid caps removed.
    Secretary BURWELL. With regard, there are a series of 
proposals throughout the budget----
    Mr. RANGEL. How soon can I brag about how your office has 
comes to the assistance of our citizens in Puerto Rico?
    Secretary BURWELL. You will be able to do it by the end of 
the day.
    Mr. RANGEL. That is fair enough. I pass.
    Chairman BRADY. Thank you.
    Mr. Tiberi, you are recognized.
    Mr. TIBERI. Thank you, Mr. Chairman.
    Secretary Burwell, thank you for being here.
    As you know, I think you would agree--maybe not--
Obamacare's co-ops have been a disaster, and after using 
American taxpayers' piggybank, more than half have failed. This 
morning, the Columbus Dispatch, my hometown newspaper, I was 
greeted with this headline: ``Customers mad about late notice. 
Ohio Health dropped.''
    So Ohio Health is the largest hospital system in central 
Ohio, the largest, and these articles, and there is a second 
one that I am going to submit for the record, Mr. Chairman, 
both of them, and we will get you a copy of both of these 
articles.
    They indicate that a company called InHealth, which is a 
co-op, headquartered in Westerville, Ohio, is under enhanced 
oversight, which means CMS is concerned about its financial 
stability and it is closely monitoring its operations.
    The article that I read this morning says about 9,000 
Ohioans are enrolled in InHealth, and they recently got some 
bad and surprising news. At the last minute, InHealth decided 
to drop most Ohio Health hospitals and doctors from their 
network, leaving them with few options now that the enrollment 
period has passed.
    So this article from this morning's paper talks about a 
couple in Marion, Ohio. Marion County has one hospital. It is 
an Ohio Health hospital. So this couple now has to drive over 
20 miles to go to a hospital outside of the county to get an 
in-network hospital rather than go to the one just down the 
road that they have been using for years.
    Another article from last week quotes a man from 
Westerville where InHealth is headquartered in my district, 
also had a preferred hospital, Ohio Health, that he went to 
that is now out of network for him.
    So these folks in this article have been going to doctors 
and hospitals that they wanted to until they got onto this co-
op that was created under Obamacare. So the article goes on to 
talk about how this co-op is struggling, and the article now 
also says that these folks are now going to have a narrower 
provider network because of the mandates and regulations under 
Obamacare.
    So what I do not understand is how the Administration that 
has been crowing about consumer and patient protections in the 
President's health care law allow a co-op that was created 
under the health care law, can allow this co-op that is 
supposed to be closely monitored, pull the wool out.
    And you will see the article here. Some of these people are 
just devastated from losing their doctors and hospitals, to 
allow a provider to pull out of a provider network, provide a 
major announcement, major changes, after the enrollment period 
has passed.
    [The information follows:]
    
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    Secretary BURWELL. With regard----
    Chairman BRADY. Madam Secretary, I apologize. Time has 
expired in the three minutes, and hopefully you will get a 
chance to respond to that a little later.
    Dr. McDermott, you are recognized.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    I will respond. The Republicans gutted the risk corridor 
money, and so these co-ops are going down. That is what 
happened in Ohio. So there is no mystery to what happened.
    The newspaper just did not go to the fact that the 
Republicans in the Congress had taken away the risk corridor 
money.
    Mr. TIBERI. Will the gentleman yield?
    Mr. MCDERMOTT. No. I have got only three minutes.
    I want to ask you a question about drug costs because drug 
costs are scaring the living daylights out of people, and when 
we put Part D in the law, the Republicans put it in by caving 
to the pharmaceutical industry and tied the hands of the 
Secretary and taped his or her mouth shut so you cannot 
negotiate any kind of reductions in drug prices; is that 
correct?
    Secretary BURWELL. At this point I do not have negotiating 
authority. That is one of the things we had asked for in our 
budget, for specialty and high cost drugs. That is one of the 
proposals that is in the President's budget right now.
    Mr. MCDERMOTT. Does the Veterans Administration have the 
ability to negotiate reductions?
    Secretary BURWELL. Yes, they do.
    Mr. MCDERMOTT. Do you know the percentage reductions that 
they have negotiated there?
    Secretary BURWELL. We know that they have been able to 
achieve cost savings.
    Mr. MCDERMOTT. Twenty percent, 30 percent?
    Secretary BURWELL. I would have to ask the Secretary of the 
VA.
    Mr. MCDERMOTT. You do not know them?
    Secretary BURWELL. Yes.
    Mr. MCDERMOTT. How much money do you spend in Medicare on 
pharmaceuticals?
    Secretary BURWELL. The number, the percentage continues to 
risk, and that is why this is one of the areas of focus for us 
in terms of we know that in the most recent year for 
statistics, 2014, we saw a 12 percent increase in just the 
pharmaceutical costs.
    Mr. MCDERMOTT. What is the dollar amount that you spend?
    Secretary BURWELL. We can get back on the dollar amount. In 
percentage terms it is a growing percentage of the overall 
Medicare budget, which is 52 percent of all of the entitlements 
at HHS.
    Mr. MCDERMOTT. Let's say you spent $100 billion on 
pharmaceuticals, right? Just for a hypothetical.
    Secretary BURWELL. Yes.
    Mr. MCDERMOTT. If you reduced that, if you could negotiate 
a 20 percent reduction, that would be $20 billion saved; is 
that correct?
    Secretary BURWELL. Yes, it is.
    Mr. MCDERMOTT. If you could negotiate a 40 percent 
reduction, it would be 40 billion, right?
    That is what the Veterans Administration says, somewhere 
between 40 and 60 percent reduction, and it seems to me that 
you have asked for that in this budget. Tell us about what is 
in the budget as far as negotiating ability.
    Secretary BURWELL. So there are number of things that are 
in the budget with regard to the high cost drug issue. This is 
one of them in terms of negotiating authority. We have also 
asked for the authority for us to pool with States and Medicaid 
to create Medicaid pools so that the States can negotiate in a 
more effective way in terms of drug costs for the States.
    The third thing that I would mention in the area of high 
cost drugs that is in this budget that I think is important is 
speeding up the closure of the doughnut hole for our seniors. 
Right now through the ACA, the closure that originally occurred 
has saved $20 billion for ten million seniors in the country, 
and so working through our ability to do that are three of the 
priorities we have.
    Chairman BRADY. Thank you. All time has expired.
    Mr. Reichert.
    Mr. REICHERT. Thank you, Mr. Chairman.
    Thank you, Madam Secretary.
    I just want to cover quickly some of my major concerns with 
the President's budget. Reduces biologics market exclusivity 
from 12 to seven years, a serious impact on TPP and the 
biologics industry.
    It cuts medical education payments to hospital by ten 
percent; cuts reimbursement to critical access hospitals, which 
are the small rural hospitals like Sequim Valley Hospital that 
you are familiar with coming from Washington State for those 
many years; cuts payments to long-term care hospitals, skilled 
nursing facilities, home health agencies; cuts Medicare Hospice 
payments. Those are some of my major concerns.
    But I want to also in my short time thank you for your work 
with the Bill and Melinda Gates Foundation, for promoting 
women's health, children's health, and fighting global poverty, 
and all those things that you have done. You know, I know your 
heart. It is a caring heart, and so I am going to move away 
from partisanship messages for a moment and ask for your help, 
and I'm going to ask for the President's help and the Vice 
President's help, the Administration's help on this.
    I am on a mission, and I want you to be a part of the 
mission, and the mission is this. The President has said we are 
taking a moon shot on cancer, $755 million in this effort. But 
here is a group of people I am going to share with you who are 
left out.
    One of the most common side effects from cancer treatments 
is lymphedema. It afflicts an estimated 15 percent of all 
survivors and 40 percent of all breast cancer patients. As 
beneficiaries live longer, an even greater emphasis must be 
placed on self-care. These lymphedema patients need these 
compression garments. I am asking today, Madam Secretary, for 
your help, the Administration's help in providing the care for 
40 percent of breast cancer survivors who need these garments.
    The money we save, the health issues that we can avoid, 
providing these garments, well, they are not measurable. Can 
you help us with that?
    Secretary BURWELL. Congressman, I will look at it and 
follow up and follow up directly with you.
    Mr. REICHERT. Can you help us with that?
    Secretary BURWELL. I assume it is a payment issue in terms 
of what we do and do not pay for? Is that what it is?
    Mr. REICHERT. We just need your help. Yes. Would you help 
us with that?
    Secretary BURWELL. I will look into it and work to see what 
we can do within our authorities. You know, when it is a 
payment issue----
    Mr. REICHERT. It has been years, and the $755 million we 
are asking for, the President asked for, at least some 
consideration for the help of these people suffering from this 
disease should be considered.
    I yield back.
    Chairman BRADY. Thank you.
    Mr. Lewis, you are recognized.
    Mr. LEWIS. Thank you very much, Mr. Chairman.
    Madam Secretary, welcome.
    Secretary BURWELL. Thank you.
    Mr. LEWIS. Thank you for your service and for all your 
great and good work.
    Madam Secretary, as you well know, the CDC is headquartered 
in my congressional district. Can you talk about public health 
preparedness generally? Are we ready? Are we prepared?
    My understanding is that the Zika cases have already been 
reported in the United States. Do we have an estimate or the 
potential cost of this virus?
    Secretary BURWELL. So the Zika virus, I think, is part of 
the broader preparedness, and fortunately, the work that we did 
in Ebola has put us in a place where there are a number of 
things that help us.
    But with regard to the Zika virus specifically, I think it 
is important to note a number of things that are very 
important. First of all, the most important concern we have 
right now is pregnant women, and I think you know we have put 
out the guidance that indicates that any woman that is 
pregnant, the CDC recommends you do not travel to any of the 
regions because microcephaly, the birth defect, that while we 
have not been able to scientifically put the causal link, we 
have enough concern that we have made that recommendation.
    So focus on pregnant women. Next is we need to make sure 
that we are focusing on controlling the mosquitos that cause 
it. This is different, and I think many people will harken back 
to Ebola, but this is fundamentally different because it is 
passed by a mosquito biting someone who has the disease and 
then biting another person.
    Eighty percent of the people that have it do not know, and 
so this is a part of what is a very large problem, and for 
those that do have it, it is about a week's worth of fever, and 
sometimes they think that it is the flu or something else.
    With regard to our domestic preparedness, we have a plan 
together with the CDC, the NIH, the Assistant Secretary for 
Preparedness Response in terms of our homeland preparedness.
    What we need to do though, and we have the supplemental 
that we have proposed, is make sure that we are able as Nation 
to be prepared as we go into the summer months, especially in 
the South.
    So there are two mosquitos that transmit this. One is a 
very efficient transmitter, meaning it will bite four 
individuals in a meal, and so you can imagine how that gets 
passed. The other mosquito, that mosquito is limited into the 
Deep South in our country. The other mosquito can cover almost 
up to 20 or so States. That one bites other things, but I still 
may be a transmitter.
    So we need to get in place the right communications, the 
right public health, and the right mosquito control before we 
hit the South.
    Right now in the United States no continental cases have 
been passed by a mosquito to a person. It is travelers coming 
back, and one sexual transmission in Dallas. In Puerto Rico, we 
have a situation where already we are seeing mosquito pest 
cases.
    And so those are the elements we need to do. We have a 
plan. That is why we have asked for the funding.
    Mr. LEWIS. Thank you, Madam Secretary.
    Chairman BRADY. Thank you.
    Dr. Boustany, you are recognized.
    Mr. BOUSTANY. Thank you, Mr. Chairman.
    Secretary Burwell, I want to get the Administration's 
clarification on health reimbursement arrangement or health 
reimbursement accounts. In 2013, harsh penalties were applied 
to small business owners who use these health reimbursement 
accounts for their employees to the tune of $100 per day per 
employee.
    I questioned Secretary Lew about this last year during the 
budget talks, and subsequently the Administration put this on 
hold for less than a year.
    I heard from Randy Noel in Louisiana, who is a small 
business owner, he has been advised to pay these penalties 
because the time in which this was put on hold was less than a 
year.
    There has been so much uncertainty, but this is a very 
draconian penalty. Is the Administration going to eliminate 
this penalty or would you work with us? Because Mike Thompson 
and I have bipartisan legislation; it is bicameral and it is 
also bipartisan in the Senate, to eliminate these harsh 
penalties.
    Secretary BURWELL. Is this the rulemaking that you spoke 
with Marilyn Tavenner about? Is it that particular rulemaking?
    Mr. BOUSTANY. I actually had a conversation with Secretary 
Lew about this. I think I did raise this with Marilyn Tavenner 
as well.
    Secretary BURWELL. I want to follow up because there are 
two different provision, and I am not sure which one we are 
talking about here.
    Mr. BOUSTANY. Well, this is specifically about the health 
reimbursement arrangements which allow for employers to provide 
dollars' assistance to their employees. It is fine under ACA, 
but for some reason the Administration going back to 2013 
imposed a $100 per day per employee penalty.
    It is very draconian on these small businesses, and 
Secretary Lew admitted it was a problem last year. It was put 
on hold, but for really less than a year. I think it was like 
six or seven months, and now we have this penalty re-imposed.
    These small business owners do not know what to do. We 
think it ought to be eliminated. These employers are trying to 
help their employees and provide for insurance.
    Secretary BURWELL. Let me check and follow up. It is on the 
tax side though. Is that why you went to Secretary Lew?
    Mr. BOUSTANY. Well, I did raise it because it is a tax 
issue, but it also is a health issue.
    Secretary BURWELL. Okay. I will follow up on our end.
    Mr. BOUSTANY. I intend to ask Secretary Lew about it when 
we have him in front of the committee as well.
    Secretary BURWELL. Okay. I will follow up with the 
Secretary. This one probably sits with them, but as you 
reflect, it is an important part of the----
    Mr. BOUSTANY. It is a health issue.
    Secretary BURWELL. Yes. So I will follow up.
    Mr. BOUSTANY. Thank you.
    I yield back.
    Chairman BRADY. Thank you.
    Mr. Neal, you are recognized.
    Mr. NEAL. Thank you, Mr. Chairman.
    Thank you, Madam Secretary.
    Madam Secretary, the Massachusetts delegation lunched today 
with Michael Botticelli and the Sheriffs' Association of 
Massachusetts to talk about the opiate crisis. Governor Baker, 
to his credit, has suggested that more than 1,200 to 1,300 
people died last year in Massachusetts of opiate addiction.
    Heroin is being sold on the streets of Springfield and 
Hartford for $2.50 a bag, and clearly the movie HBO presented 
called ``Heroin on Cape Cod'' is riveting. I would recommend it 
to anybody who might be interested in what has happened.
    The President's Drug Czar today, Mr. Michael Botticelli, 
said that part of the problem clearly is the overuse of 
prescription drugs, and that it has heralded a new era in how 
to treat addiction.
    Seventy-eight people as you noted lose their lives every 
day as a result of these drugs, and you have offered several 
proposals in your budget to deal with this alarming epidemic.
    Could you give us greater detail as to how you suggest that 
we might proceed?
    And applause to the President for suggesting $1 billion in 
new expenditure to address this issue.
    Secretary BURWELL. So an issue that is deeply important to 
me. As many of you know, I am from the State of West Virginia 
where the problem has been acute for many, many years. So a 
priority since I came.
    When I came to HHS, we put together a three-part strategy 
in order to make progress on it. The first has to do with 
prescribing. We know in 2012 there were 250 million 
prescriptions of opioids. I think you all know how many adults 
there are in our country, and the idea that in 2012 there were 
250 million prescriptions, the overprescribing is a problem. We 
need to take that on.
    As part of that, the CDC will be issuing new regulations. 
We know pain is important. It is important to be treated, but 
the overprescribing that has occurred, we need better 
direction. So that's part one.
    Part two is medication assisted treatment, and right now as 
you reflect in terms of the numbers that are in your State and 
in many of the States represented here, we need these people to 
be in medication assisted treatment. There is not access to the 
treatment, and that is one of the major parts of the funding 
that you mentioned. It is to create an ability for States and 
communities.
    So the money would go to SAMHSA and a little bit to HRSA, 
and that money would then go on to States and communities 
because we need to build the capacity for the medication 
assisted treatment for these people because right now they come 
into law enforcement.
    You were just meeting with the sheriffs. I have met with 
the sheriffs. I met with them in Massachusetts with Governor 
Baker. What they will tell you is we are not social workers, 
but we see these people time and time again and have nowhere to 
send them.
    The third element of the strategy, and sadly we have to 
have this element, is naloxone or some people call it Narcan, 
which is the drug when people have overdosed because sadly we 
have so many people that are in a state from either heroin or 
prescription drugs and they have overdosed, and at that point 
we are just trying to save lives.
    And so some of the money will go to move and fund naloxone 
at the community level.
    Much of the money we are asking for is about moving it to 
the States and communities that are in need so that they can 
build their capacity to work against these three strategies.
    Chairman BRADY. Thank you.
    Mr. Roskam, you are recognized.
    Mr. ROSKAM. Thank you.
    Madam Secretary, two quick issues. I think they are pretty 
straightforward and pretty simple. The House has inquired about 
the basic health program, and I was able to receive a briefing 
from your Assistant Secretary for Financial Management, Elaine 
Murray, who is here today and came and gave me some good 
insight into the process.
    Out of that discussion, we put forward a request for 
documents on something that we learned about, and that was a 
document called ``the big ugly table'' that she said was 
critical in putting together the basic health plan.
    Now, recognizing that we are not in litigation so that 
there is no concern there, we have requested this document and 
other documents, including the memorandum of understanding 
between CMS and the IRS.
    The results have not been forthcoming. We have gotten, you 
know, redacted information followed up, back-forth, back-forth. 
The latest was literally a 234-page printout of public 
information from the CMS Web site that is submitted to 
Congress.
    In the spirit of Congressman Rangel and the dispatch with 
which you were able to easily answer his inquiry, can you get 
us this ``big ugly table'' by the end of the day along with the 
CMS-IRS memorandum of understanding?
    Secretary BURWELL. So, Congressman, my understanding is 
that we have turned over documents. We----
    Mr. ROSKAM. They have not been responsive.
    Secretary BURWELL. So I would like to follow up with staff 
to understand. Our staffs need to get together to understand 
this.
    Mr. ROSKAM. Great. It is a complete mystery, and time is 
short. So I want to move to another issue, but it is to the 
point of absurdity. So if you can intervene and get us the 
``big ugly table,'' which according to the briefing was 
critical to the decision making, along with the memorandum of 
understanding between CMS and IRS, that would be helpful.
    Secondly, we heard testimony at the Oversight Subcommittee 
about the fraud and erroneous payment rate from CMS. The Deputy 
Administrator said the number is 12.7 percent. The remedy or 
part of a solution Mr. Blumenauer and I are working together 
for a common access card using the same technology that DoD 
uses and has used in the financial services arena.
    We received some technical assistance, but it was like 
pulling teeth from CMS; had to get the Administrator personally 
involved to get this done. Okay. Because he is meeting people 
who do not want to change things.
    But this, Madam Secretary, as we both know, is a system 
that desperately needs to change. Would you be willing to help 
Mr. Blumenauer and me, as we are trying to move forward, get 
the technical assistance and put together a common access card 
pilot program that we can see if it works and if it saves 
money?
    We are persuaded it will do that, but we need your help and 
we need your personal help substantively because we are meeting 
a lot of passive-aggressive folks that do not want to be 
helpful.
    Will you help us?
    Secretary BURWELL. I will look into seeing what we can do 
in terms of whether we have--is it statutory? Is that why we 
are providing technical assistance?
    Mr. ROSKAM. Yes.
    Secretary BURWELL. Because it is statutory. Okay. Then let 
us look into it and understand because I think hopefully this 
is the kind of thing that will move us along the electronic 
health benefits end using technology and data to do delivery 
system reform. So I would like to understand it more fulsome 
and figure out if we can provide technical assistance if it is 
statutory.
    Chairman BRADY. Thank you. All time has expired.
    Mr. Doggett, you are recognized.
    Mr. DOGGETT. Thank you, Mr. Chairman.
    And, Madam Secretary, the President's budget indicates 
that, quote, ``The Administration is deeply concerned about 
rapidly growing prescription drug prices.''
    Certainly that is a concern that is so real to many 
consumers who are basically faced with the choice: your money 
or your life.
    While I am fully supportive of the Biden Cancer Moon Shot 
Initiative that you referred to to try to convert some of the 
pain and grief that he and so many families have, unless the 
Moon Shot addresses accessibility for so many of our neighbors, 
it will really be just a shot in the dark.
    The one thing that we already know without any more 
research on drug effectiveness is that an unaffordable drug is 
100 percent ineffective. I applaud each of the budget's 
legislative proposals that you outlined to Mr. McDermott. 
Together they would save taxpayers over $172 billion.
    Republicans are always telling us about how entitlements 
need to be brought under control and Medicare is unsustainable. 
I think the place to begin is by cutting those who think they 
are entitled to charge the highest drug prices in the world to 
Medicare and Medicare consumers.
    Clearly legislation is required, but you and I know that 
lightning could strike the Capitol dome in the same place not 
twice but ten times, and this Congress would not be willing to 
stand up to the pharmaceutical lobby. It is essential that the 
Administration use every tool at its disposal to prevent price 
gouging.
    You are aware that 50 of our colleagues have asked that you 
and the NIH use existing authority to at least set some 
standards for prices when taxpayers paid for the research that 
led to a drug. Can you assure that our request is receiving 
your thorough consideration?
    Secretary BURWELL. It is. It is. Your letter we have 
received. Thank you, and we are continuing to try and pursue 
every administrative option.
    We have proposed legislative and statutory changes as part 
of the budget but are looking at a wide array, which we welcome 
your letter and your suggestion.
    Mr. DOGGETT. I am pleased with your Dashboard, with your 
proposal on Part B payment models. I hope you can build on the 
oncology care model from the Innovation Center.
    I believe that when you ask that we mandate pharmaceutical 
companies to provide certain information that is vital, that is 
a good idea, but I hope that you will consider requesting that 
they voluntarily provide that information this year and will 
continue to look for ways to bundle pharmaceuticals with other 
services, will implement your bio-similar reimbursement rule, 
and take every step you can, knowing this Congress will do 
little, but there are still steps you can take to help American 
families on pharmaceutical price gouging.
    Thank you so much.
    Chairman BRADY. Thank you. All time has expired.
    Mr. Smith, you are recognized.
    Mr. SMITH of Nebraska. Thank you, Mr. Chairman.
    And thank you, Secretary, for your presence here today.
    I do want to follow up on a characterization made earlier 
that it is Republicans' fault for removing some funds, 
therefore causing the co-ops, the Obamacare consumer oriented 
and operated plans to collapse.
    I do want to add though that on April 11th, 2014, from a 
fact sheet from CMS they stated that, quote, ``We anticipate 
that risk corridors' collections will be sufficient to pay for 
all risk corridors' payments.'' I just want the record to 
reflect that.
    But certainly the collapse of CoOpportunity Health for 
Nebraska and Iowa has been a huge deal in Nebraska. Many 
Nebraskans are still smarting from it. Actually a constituent 
named Pam has lost her coverage three times, thanks to the 
Obamacare, the entire plan that certainly denied her the 
coverage she was told she could keep, that she could afford, 
that covered her preexisting condition.
    And so I do have a question though. As it relates to the 
Administrators of CoOpportunity Health for Nebraska and Iowa, 
it is my understanding that they kind of saw trouble on the 
horizon. So they requested the opportunity to suspend 
enrollment, and that request was denied.
    Can you speak to that?
    Secretary BURWELL. We discussed this, I think, last year 
when I was before the committee, and I would like to follow up 
in terms of where they felt the request because we did not, 
when I followed up, feel that there was a request at all that 
came into us and that was denied.
    So I would love to follow up because when I followed up on 
this before, we had not received that request.
    Mr. SMITH of Nebraska. Okay.
    Secretary BURWELL. And so let us understand because we work 
with all of the co-ops on this issue. Our number one priority 
is the consumer, as you are indicating. That is our priority as 
well. That is why, to be honest, a number of the co-ops came 
out before this open enrollment as we worked with the States 
that are their primary regulator. We worked with the States on 
that issue.
    So the consumer is the number one concern. So if we can 
understand how they felt they did that because if there was a 
process that is unclear or something there, I think it would 
serve everyone else if we can learn from this example.
    Mr. SMITH of Nebraska. Right. And overall, you know, we 
heard a couple of months ago I think it was that the co-op 
program is on sound footing, and yet we have now learned that 
Maine, I believe, who was the only one at one point turning a 
profit, is now beginning to lose money.
    Where do we stand on that entire issue? Are they on as 
solid footing as we were told some weeks ago?
    Secretary BURWELL. So with regard to that, as you know, at 
that point as when we came to open enrollment, we worked with 
all the States to make sure that the State Commissioners of 
Insurance and we felt they were.
    With the facts that we have and had at that time, that is 
where we are. I think we also have taken steps to help the co-
ops in terms of how they can access capital if they need it. 
That guidance was put out about two weeks ago as well.
    We are going to continue to monitor closely with the 
States.
    Mr. SMITH of Nebraska. Thank you.
    Thank you.
    Chairman BRADY. All time has expired.
    Mr. Thompson, you are recognized.
    Mr. THOMPSON. Thank you, Mr. Chairman.
    Madam Secretary, thank you very much for being here and the 
outstanding work that you and your team do.
    I've got a couple of issues I would like to get a response 
on. The first is the recovery audit contractors, the RACs. I 
have had dealings with these folks in my district, and I am 
assuming other folks on the committee have as well.
    The idea that a provider would have to wait 800 days for a 
decision is just wrong, and I am hoping that you are going to 
be able to tell me that you are working on fixing that.
    And I know that the Provider Relations Coordinator Program 
has done some good in this area. Are there plans to expand that 
so we can get this number down to let people in some cases stay 
in business?
    And then also I want to talk to you a little bit about 
TeleHealth. Congressman Black and I have legislation that would 
expand TeleHealth. It is a way that you can accomplish two I 
think very important goals. One is to save money, and the other 
and most important is to save lives.
    I know the President's budget has provisions in there to 
expand the venues whereby TeleHealth can be used, and also to 
allow it to be used in Medicare Advantage.
    And I would be interested in knowing if you have some sort 
of means by which to collect data on the cost savings because 
if we can quantify that, I am sure it will help us expand 
TeleHealth even more.
    Secretary BURWELL. With regard to the first issue in the 
RACs, we have made changes. And so if it goes beyond the 60 
days, they don't get the money, in terms of the RACs. We've 
actually put in place changes with the feedback.
    Mr. THOMPSON. With the contractors?
    Secretary BURWELL. Yes. Yes. And so if it goes beyond that 
period of time, it doesn't. If at any point the decisions are 
overturned in the process, they don't get the money either. And 
so we put in place a number of steps in response to the 
criticisms that we have heard about RACs. With regard to the 
telemedicine issue, as you stated, we have several proposals in 
our budget. We think this is an important place to make a 
difference, both in terms of quality of care that we can 
provide, access in rural areas, particularly. It's very 
important.
    And right now, we have, we have those numbers scored. And 
so we have been able to score the savings that we think can 
occur by using telemedicine. And so we can get to you all as 
you all are considering your legislation how we score those 
numbers. And there are two different provisions, both in terms 
of our federally qualified and rural health clinics being 
initiation sites for telemedicine, as well as making sure that 
in Medicare Advantage it can be paid for. Which is sometimes 
one of the prohibitive things with telemedicine.
    Mr. THOMPSON. Well, we'd like to see those numbers and that 
methodology, and also would love a commitment from you to work 
with us to make sure we can further expand telemedicine. 
Because it does save lives and does safe money.
    Secretary BURWELL. Yes. And we'll probably come to it, I 
think, if we're going to talk about the Indian Health Service 
as well.
    Mr. THOMPSON. Thank you.
    Chairman BRADY. Thank you. Ms. Jenkins, you're recognized.
    Ms. JENKINS. Thank you, Madam. Or, Mr. Chairman. Thank you, 
Madam Secretary, for being here. As many of my colleagues on 
this Committee have already mentioned, the President's health 
care law has continued to fail so many Americans. Over the past 
few weeks, I've hosted almost 20 town halls throughout Kansas. 
And folks back home often tell me how they face increased 
premiums with fewer options for care. 2016 premiums are 
expected to increase by 15 to 25 percent in my home state of 
Kansas. This simply is not right, especially in the face of a 
failed economic recovery. And I, along with my colleagues here, 
continue to work to replace Obamacare, repeal it, find 
proposals that drive competition, lower cost and improve health 
care quality for all Americans. One particular provision of 
Obamacare that's especially cumbersome and drives up healthcare 
costs for the everyday American is the requirement that 
individuals have a prescription from a physician in order to 
purchase over the counter medicine with their health savings 
accounts and flexible savings accounts. And I have worked on a 
bill, HR1270, the Restoring Access to Medication Act, which 
would eliminate this unnecessary requirement that's both 
confusing and frankly, it's just a waste of time for patients 
and physicians. And we've worked closely on this legislation 
now for three years, with my colleague, Representative Kind, 
from Wisconsin. When you testified in front of our committee 
last June, I asked if you would support us on this type of 
legislation. At the time you indicated you weren't familiar 
with the issue. Have you had a chance within the last year to 
review it now? And if so, would you support the legislation?
    Secretary BURWELL. With regard to the issue in terms of 
driving down the costs on the over the counter prescriptions, I 
apologize in terms of the specifics of the legislation. We'll 
need to come back to you on that. In terms of the basic 
concepts of making things simpler and easier, we're working at 
that across the board. And whether it's the announcement that 
occurred yesterday with Walgreens about over the counter and 
Niloxone and other drugs like that. So the concept of this is 
something that I think we want to continue to work on. With 
regard to the specifics, I will need to get back.
    Ms. JENKINS. Okay. Well, I believe this is just a few easy, 
common sense approach. It's bi-partisan. If the Administration 
will just take a look at it. It's kind of frustrating, year 
after year after year to have you come before us as if you're 
not interested in looking for some of these common sense 
solutions to help all Americans, especially when they do have 
bi-partisan support. So thank you. I yield back.
    Chairman BRADY. Thank you. Mr. Paulsen, you're recognized.
    Mr. PAULSEN. Thank you, Mr. Chair, and thank you Secretary. 
Secretary Burwell, Mr. Larson. Thank you, Secretary, Madam 
Secretary, for being here. Madam Secretary, several states have 
closed down their exchanges, and many other states are facing 
some challenging financial situations with self-sustainability. 
That includes MNsure, which is Minnesota's exchange in the 
program. And a new audit found out that over a five month 
period last year, MNsure repeatedly failed to properly 
determine the eligibility of enrollees, resulting in 
potentially 271 million dollars in overpayments. That's 271 
million dollars of taxpayer money. And this is the headline 
from the Minneapolis Star Tribune, just a week and a half ago. 
I'd like to enter this for the record, Mr. Chairman. And these 
are overpayments that occurred despite the fact that a report a 
few months earlier had warned MNsure that it was not accurately 
applying eligibility requirements. Now, the President's health 
care law, it does require that state-based marketplaces, that 
they be self-sufficient. It requires that they follow the law. 
But HHS doesn't really seem to be doing anything to enforcement 
it on the enforcement side. Instead, they've acknowledged or 
they've given more money, in terms of no-cost extension 
requests through the end of this year. And so it seems there's 
no gatekeeper. There's no enforceable plan.
    And this is really not about being against Obamacare. It's 
about enforcing the law and making sure the taxpayers are 
protected, and continuing to hold these exchanges accountable 
is going to ensure that patients ultimately are not going to be 
hurt when there's a change in health insurance. So my 
understanding also is that after all these reports, after all 
these audits, throwing away millions of dollars in taxpayer 
money, HHS's own inspection, Inspector General, is also going 
to be coming out potentially with a report in a few weeks that 
will explore issues with MNsure's internal controls. So your 
own Inspector General is acknowledging some of these problems. 
So can you just share anything with us about the upcoming 
report that might be coming out? And more importantly, just can 
you give a little bit of plan of action for making sure that 
MNsure is following the law?
    Secretary BURWELL. So with regard to the state based 
marketplaces, as you reflected, a number of them are in various 
states and have been able to achieve certain things and not. 
And when they're not, you know, the Administration has engaged. 
And HHS has engaged with them. And whether that's in Hawaii or 
security issues in other state exchanges. And so we do engage 
on that. The IG's report is something we look forward to, and 
will be a part of us determining what are the appropriate next 
steps for us in terms of that engagement.
    But across the board, as different state based marketplaces 
have had different issues, I think you probably know we have 
engaged and at various points and times needed to switch them 
to the platform, if they aren't able to meet certain of the 
conditions that you articulated. That they are making sure that 
there are adequate networks. That there are different types of 
issues. Most have been technology related, but not all.
    Mr. PAULSEN. Okay. So we'll see some enforcement 
mechanisms, some follow ups, some follow through?
    Secretary BURWELL. We look forward to the IG's report, when 
we will receive it. I think you know; we work with the IG as 
part of program integrity across the Affordable Care Act. It's 
something we work for. But also we want to let them have their 
independent view. And then they come back and tell us what they 
have found.
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    Chairman BRADY. Thank you. Mr. Larsen, you're recognized.
    Mr. LARSON. Thank you, Mr. Chairman. And thank you for 
holding this hearing. And Secretary Burwell, it's always a 
pleasure to have you here. And I wanted to thank you sincerely 
for your continuing outreach. You are a model of how we believe 
that the relationship between the executive and legislative 
branches should work. And I want to thank you. I want to 
commend the President and you for the budget. And especially, 
as Mr. Neal has addressed already, the more than billion 
dollars that have been put forward to address this long term 
epidemic that we're facing with heroin overdoses and opiates. 
And I also want to commend Senator Shaheen and Congressman 
Courtney. The New England delegation has come together in 
looking head on at this epidemic. I think this is something 
that affects every member in this institution, in all states. 
There's nothing partisan about it. We are in the throes of an 
epidemic. And it is my hope that while I think the billion is 
appropriate, by the time that we get through sorting out and 
going to regular order, if in fact we do, that too many more 
people are going to have passed away. And so what we're hoping, 
in the New England delegation, I hope that Members of the 
Committee can join with us in sending a letter to the 
President. I think we need emergency supplemental funding now, 
along the lines of Senator Shaheen and Congress Courtney have 
called for, that would provide the 600 million dollars that 
could be used immediately by those on the front lines of trying 
to deal with this, this epidemic. I would note that just since 
January 28th in New London, Connecticut, 24 deaths occurred. 
The Zika virus is something certainly that needs our attention, 
et cetera. But I dare say that this is a far greater epidemic 
and needs our immediate attention. And for so long, has been 
swept under the floor. I commend Mr. Neal for bringing this to 
the attention of the entire New England delegation. It's my 
sincere hope that the committee can join together to see if we 
can't get supplemental funding. I hope you can join us in that 
effort.
    Secretary BURWELL. We look forward to working with the 
Congress across the board in whatever appropriate way to get 
the funding that we need. We think the funding and moving it to 
communities is important, and we'll look forward to working 
with the Congress.
    Mr. LARSON. Thank you.
    Chairman BRADY. Thank you. Mr. Marchant, you're recognized.
    Mr. MARCHANT. Thank you, Mr. Chairman. Ms. Burwell, one of 
the most significant things that's happened in Texas in this 
last year as far as health care was that at least one of the 
largest health care providers, it may be our largest, Blue 
Cross, Blue Shield, completely walked away from and abandoned 
its PPO program. And anybody that had an individual policy had 
to convert to basically their HMO plan. That's, that has 
basically created most of the calls about health care in my 
office this year.
    You're proposing, and you've just given notice of a benefit 
and payment parameters regimen that's coming up. And my concern 
is, does this new regimen that you're laying out, force the 
private insurance companies more into abandoning their PPOs and 
more into an HMO plan? Or will it provide them sufficient room 
to where they can actually operate a PPO model?
    Secretary BURWELL. Well, with regard to the, the rule 
making and where that will go, I don't think it is something. I 
think there are a number of things that these companies are 
considering when they're making these decisions. And I think 
they are two different things. There's the marketplace, in 
terms of those folks who are going to the individual 
marketplace. And then there's the employer based market. And 
what we know in both of those marketplaces--and obviously the 
employer based market is separate from the marketplace that we 
see some narrowing of the networks.
    One of the things in the marketplace though is that you 
must have an adequate network. That there's at least a test for 
that for the marketplace in terms of what we're doing. And so 
many companies are making these decisions. They're making the 
decisions. It is a private market. And they're following the 
consumer. In terms of what we saw statistically, what happened 
from 13 to 14 and 14 to 15, what we saw is the consumer 
actually making choices that they were choosing a narrower 
network and lower price versus a broader network and higher 
price. And I think we see the insurers responding to that in 
both the private market as well as the marketplace market, the 
employer based market. And so we want to do this to make sure 
that choice is available. And this year in the marketplace, in 
nine out of ten counties for most of the marketplace 
participants, there were three or more choices. And that's a 
part of getting to that space. And this comes back to the other 
question about the networks. What I think we believe is an 
important part of this is downward pressure on overall 
healthcare costs. Because that's what's driving insurer 
decisions. And that's why this concept of delivery system 
reform, an engaged, empowered, educated consumer at the center, 
where we pay for value, not volume, where we use data and 
information and where we change the way we deliver care, is the 
important when we think over the long term.
    Mr. MARCHANT. Mr. Chairman, if I can just ask one final 
question. Is there a place that I can go----
    Chairman BRADY. I'm sorry, Mr. Marchant. All time has 
expired. Mr. Reed, you're recognized.
    Mr. REED. Thank you, Mr. Chairman. Welcome, Madam 
Secretary. Madam Secretary, a limited time, I'm looking for an 
area where we may be able to advance some legislation this year 
in regards to reform that we can agree upon. And one of those 
areas is welfare reform. And I read the budget in particular. 
And I was very interested in pages 55 through 59 of the summary 
of the budget, dealing with TANF, and the issue of flexibility 
and the Upward Mobility Project. Could you touch on what the 
Administration's looking at in regards to giving greater 
flexibility to local and state entities that you reference in 
the summary portion of the budget in regards to things like 
Upward Mobility and others?
    Secretary BURWELL. I think this is something we'd want to 
work with the Congress on. And think as was indicated that 
there has been bi-partisan work in the space of what we need to 
do further. I think we're very focused on the work elements and 
making sure that the money goes, the TANF money. And our 
approach is about that. And so this is a place where I think we 
welcome the opportunity to work with Congress.
    Mr. REED. And are there any areas in particular you could 
identify for us in regards to greater flexibility, the 
Administration would be willing to engage in a conversation 
giving to local and state entities that are in this space doing 
this much needed work?
    Secretary BURWELL. I think we'd like to come back and have 
that conversation. Is it all right if we follow up with staff? 
Because I think the bi-partisan effort that was moving last 
year had a number of these elements that I think we thought 
were, were good and positive and would like to support, if we 
can be specific.
    Mr. REED. Are there any, any areas in particular you can 
identify?
    Secretary BURWELL. I'd like to come back on the specifics.
    Mr. REED. Well, we'd appreciate having that conversation 
and being involved in that conversation, as it's an issue that 
we're taking up in our office. As we want to reform this area. 
The other area that I'm looking at is if there is a better way 
that in your opinion, Madam Secretary, that we could measure 
the success of these outcomes? Often I find in this area 
measurement of the success is how much money we spend in this 
regard. Is there anything in your personal opinion you think we 
could do better, other than just measuring cash or dollars 
spent on these programs? That maybe we could have that 
conversation of changing the metrics. Is there anything you 
personally would like to work with us on in regards to changing 
those metrics from a cash basis?
    Secretary BURWELL. I think one of the metrics that we all 
want is knowing how many people actually get into gainfully 
employed situations for an extended period of time.
    Mr. REED. Oh, I so appreciate that.
    Secretary BURWELL. That's not the only measure, in terms 
of----
    Mr. REED. Are there any other measures you have?
    Secretary BURWELL. But that is one that I do think is an 
important one. And why, we believe, the money should be more 
targeted than it currently is in terms of what it's being for 
in states.
    Mr. REED. I so appreciate, commend to that metric change. 
Because I think it is much needed in this culture, to measure 
the outcome based on success in regards to people getting into 
a self-sufficiency mode, standing on their own two feet 
themselves. Is there any other metric you'd be willing to 
discuss personally that you think is a better metric, to see 
how these programs are doing?
    Secretary BURWELL. I think when we come back on the 
specifics of the flexibility, let's have that conversation.
    Mr. REED. I look forward to that. And I thank you always 
for your hard work, and appreciate working with your office in 
regards to the issues that we have addressed with you before. 
With that, I yield back.
    Secretary BURWELL. Thank you.
    Chairman BRADY. Thank you. Mr. Becerra, you are recognized.
    Mr. BECERRA. Thank you, Mr. Chairman. Madam Secretary, 
thank you very much. And always a pleasure to have you with us. 
Ma'am, before I ask my question, can I just say thank you for 
what I know you had a hand in, in the President's proposed 
budget, to try to deal with Medicaid reimbursement for citizens 
on the island of Puerto Rico. And the fact that right now 
Puerto Rico's going through a very difficult time financially, 
they're trying to right the ship. And one of the worst things 
that they can face is a situation where they are having a 
really difficult time funding the healthcare that their 
residents need. Which ultimately becomes an even worse crisis 
if people aren't getting care now, before things get really 
bad. So thank you for that proposal to try to balance the way 
we treat the U.S. citizen on the island of Puerto Rico.
    I'm interested in, if you can give me comment on the 
Affordable Care Act's provision that expanded the use of 
Medicaid so that families that are working but earn very modest 
incomes can still qualify for healthcare through, if not the 
exchange, then the Medicaid Expansion Program. I know a number 
of states have incorporated that Medicaid Expansion Program. 
Others haven't. Those states that haven't, can you tell us how 
many states have not yet incorporated Medicaid? How many 
individuals including children are impacted by not having 
health insurance, as a result of states refusing to adopt 
Medicaid Expansion? And can you tell us what the impact has 
been for those states that have incorporated the Medicare--
Medicaid Expansion Program into their healthcare?
    Secretary BURWELL. So right now, 30 states plus the 
District of Columbia have done the expansion. And if all the 
rest of the states that aren't expanded did it, we estimate 
that there would be four million additional people who would no 
longer be uninsured. 3.1 million directly in terms of the 
individuals that would become eligible. But in all the states 
where expansion has occurred, there are portions of the 
population that were eligible but do not sign up, but as part 
of the expansion, come to sign up. So the total number becomes 
four million.
    With regard to the proposal in our budget, in the 
conversations with many governors across the country that are 
not in, one of their concerns is, ``Will the Federal Government 
stay and be a part?'' That's a question that, that I am 
consistently asked. Our proposal gets to that fundamental of 
making sure they know for the first three years, they know what 
their budgeting will be, which is an important consideration 
for governors. In terms of the benefits we're seeing to the 
individual, the health and financial security that it means is 
something that I think everyone can understand. With regard to 
the economics, in Kentucky, we know that the estimates are 
40,000 jobs created by 2021. 30 billion dollars into the 
state's finances. In addition, when we have analyzed those 
places where there are hospital closures--and we know that's 
happening across the country for a number of reasons. But in 
the states that have expanded, the hospital closures as a 
percentage are smaller. And we believe that's attributable to 
uncompensated care that is no longer occurring.
    Mr. BECERRA. Thank you. Thank you, Mr. Chairman.
    Chairman BRADY. Thank you. Mr. Young, you're recognized.
    Mr. YOUNG. Thank you, Mr. Chairman. Madam Secretary, I 
appreciate being here. I, I came here a few years ago. I 
haven't spent a lifetime doing this. And I came here to solve 
problems. And I have to say I've been frustrated in the last 
few years. And frustrated because of what I hear back from my 
constituents. One of the main things I hear from my 
constituents is that Obamacare isn't working. That they don't 
like it. That their costs are going up. They regard their 
health insurance as all but useless. Deductibles are 
skyrocketing. Premiums are going up. And there's, there's data 
to support these things. Premiums for example, CBO expects an 
increase in seven and a half percent. Cost of bench mark plan, 
across the 37 states that utilize the federal exchange. But you 
know, eyes start to glaze over, when I talk to my constituents 
about all of the specific numbers. They just want us to fix 
this thing. And you know, meanwhile it's been talked about, 
that availability of coverage continues to narrow. And you 
know, I came here to solve these problems. It doesn't seem like 
we have a functioning system when so many of my constituents 
decide instead to pay the IRS tax penalty instead of buying 
insurance. That seems like a real problem. It doesn't seem like 
we have a functioning system when costs continue to go up. When 
the American people are told that their premiums would instead 
go down or be the other direction.
    It doesn't seem like we have a functioning system, when in 
the state of Indiana, one of our largest insurers, Assurant, a 
national carrier, left the exchange. And so forth. And so I 
guess in the interest of trying to solve problems, I've asked 
this before. It's become a big ideological totemic battle 
between Republicans and Democrats, conservatives and liberals. 
But are there mandates that you as Secretary would be willing 
to work with Congress on repealing, vis-a-vis Obamacare? If not 
all of them. Which has been the position of the Administration 
in the past. Are there specific mandates that you would be 
willing to work with us on repealing? And I'll give you the 
remaining 40 seconds to offer a response. And you can offer 
whatever else you might have in writing, please.
    Secretary BURWELL. There are many things I think most 
people in America don't want to go back to a place where pre-
existing conditions keep you off your healthcare. Where if your 
child had cancer at the age of 15, that they've reached annual 
and lifetime limits. And these are some of the important 
changes that----
    Mr. YOUNG. Is Obamacare working? I guess I'll just 
interject here. And you can supplement it with written 
testimony.
    Secretary BURWELL. Yes. So, yes. And I believe in the area 
of access we've seen strong improvements.
    Mr. YOUNG. Because I'm not hearing that from Hoosiers. I am 
not hearing consistently that Obamacare is working.
    Secretary BURWELL. I think the question is----
    Mr. YOUNG. Do you have surveys that substantiate that?
    Secretary BURWELL. Yes, in terms of actually people in the 
marketplace. We have seen the marketplace satisfaction----
    Mr. YOUNG. I'm talking Americans more generally. Do they 
like Obamacare?
    Secretary BURWELL. Americans more generally? But what 
Americans like is, that you don't have to worry about pre-
existing conditions. Is that the question that's asked?
    Chairman BRADY. Thank you. All time has expired.
    Secretary BURWELL. That is a different question that he has 
asked?
    Chairman YOUNG. We can deal with that issue together in a 
different way. Thank you. And I yield back.
    Chairman BRADY. Thank you, Madam Secretary. I'm going to--
--
    Secretary BURWELL. And I think there are places we can.
    Chairman BRADY. Thank you. I'm going to recognize Mr. 
Kelly. And then we're going to back to one. I just wanted to 
make sure we can get everyone on. Mr. Kelly, you're recognized.
    Mr. KELLY. Thank you, Chairman and Madam Secretary. I 
appreciate your being here. We talked before, on the side. My 
concern is, when it comes to the quality incentive payments in 
the Medicare Advantage Plan--this is what we were talking 
about--I don't expect you to be able to answer this now. I know 
you're going to get back to me about it. But those plans were 
set up to incentivize a more efficient operation. And under the 
rule-making process, Mr. Kind and I have a piece of legislation 
also with Mr. Doyle and Mr. Guthrie. And so it's bi-partisan. 
Under the bench mark caps, we're rolling the QIPs into that and 
saying, ``This is the cap.'' So if you're a four or five star 
rated plan, there's no incentive for you to go beyond that. I 
mean, it just isn't reachable. So essentially you're being paid 
at the same rate. I mean, the cap sets a cap. You can get paid 
lower amounts but you can't get paid higher amounts. And the 
result of that--and I'm asking you--do you have to have 
legislation to do that, or can you do it internally? I think 
it's an interpretation of the benchmark cap.
    Secretary BURWELL. And we will come back on whether or not 
we have the statutory authorities across the board in terms of 
the work that we're doing in the CMI, the Innovation Center, in 
terms of making sure you have that ability to have that upward 
movement for good, strong players. We have changed that. And so 
this is a particular case I just need to understand what we 
have. In the most recent proposals on our accountable care 
organizations, we use the logic that you just articulated and 
have made fixes. So in this particular area on the four and 
five stars, do we have those still?
    Mr. KELLY. Yeah. And I appreciate it. Because I think the 
real issue is, how soon can we get this done? Because if it's 
an incentive, then it has to truly be an incentive.
    Secretary BURWELL. For good behavior.
    Mr. KELLY. It can't be a non-incentive that's described as 
an incentive.
    Secretary BURWELL. Yes.
    Mr. KELLY. So we will get that to you in writing. If you 
can get back to us quickly, I appreciate that. With that I 
yield back, Chairman.
    Chairman BRADY. Thank you. Mr. Blumenauer, you are 
recognized.
    Mr. BLUMENAUER. Thank you, Mr. Chairman. Madam Secretary, 
I'm going to send you a little note about end of life care. And 
I appreciate that I'm not talking to you about, ``Can we make 
the change?'' It's made. I'm interested in how we can implement 
it more effectively. And I would really appreciate a chance to 
visit with you about that at some point. But I want to pick up 
where Mr. Young left off. Because I feel sometimes like I'm in 
an alternative universe. I have roundtable discussion in Oregon 
repeatedly. And yeah, there are hiccups and problems. But it's 
an entirely different universe. Providers like what's going on. 
We've expanded service. We've put millions, hundreds of 
millions of dollars into the system. Now, my friend from Kansas 
talked about the problems. That's a state that didn't expand 
it. And the question I would ask to you is, gee, if Kansas had 
been one of the 30 states that had actually expanded the 
program and had hundreds of millions of dollars in their health 
care system, being able to take care of people who were too 
poor to qualify for the ACA, would it make a difference?
    Or in the case of Indiana, which has sort of expanded it, 
but not in a clean, straight-forward way, it appears from an 
untrained eye to be kind of a jerry-rigged system that doesn't 
really work well in terms of the expansion. Can you talk for a 
moment about what difference that would make and why I'm 
getting almost universally positive reactions from hospitals, 
insurance providers and people on the street? None of the evil 
things that were rumored happened. Inflation is down. Premiums 
are not skyrocketing like they used to. I remember the debates 
we had. And my friends who are concerned have not been working 
over the five years to refine it. They're trying to blow it up 
or to chip away at it. What difference would it make if there 
was actual straight-forward expansion in states like Indiana 
and Kentucky?
    Secretary BURWELL. I think the point you raised about the 
premium increases, it is one of the things that, as we look at 
historically what premium increases were before, in the 
individual market they were in the double digit space. In the 
employer based market right now, over time, for a family, what 
that, what we have seen is four out of the five years have been 
the four lowest on record since these records were kept in 
1999. That is, that means things are increasing but they're 
increasing at a much lower rate, to your point.
    I understand that still feels like increases for consumers, 
which is why we've got to move to delivery system reform. With 
regard to the issue of Medicaid Expansion, I think we do see in 
many of the states that have expanded, those benefits in terms 
of what it means in the community and the money. It's the money 
and the paid for services. In addition, for individuals, we see 
many more people being treated for diabetes. That leads to 
longer term reduction in cost if we can get ahead of diabetes.
    Chairman BRADY. Thank you. Mr. Renacci, you're recognized.
    Mr. RENACCI. Thank you, Mr. Chairman. Secretary Burwell, 
thank you for being here and thank you for reaching out to my 
office before the hearing. I'm sorry we were not able to 
connect, but I really appreciate you reaching out to all the 
committee members. I think that's important. You do not have an 
easy job. We all recognize that. So thank you for what you do. 
I'm hoping that as this year comes to an end, we can work on 
some things together. As you know, the ACA included a new 
program aimed at reducing hospital readmissions, called the 
Hospital Readmission Reduction Program. The goal of this 
program is one that I and many of my colleagues support. In 
fact it's estimated that nearly 18 billion per year is wasted 
on avoidable readmissions of Medicare patients alone.
    Secretary BURWELL. Yes.
    Mr. RENACCI. However, the implementation of this program 
has been problematic, especially for those hospitals serving 
low income populations. Evidence suggests that economically 
disadvantaged patients, especially patients eligible for both 
Medicare and Medicaid, are much more likely to be readmitted 
within 30 days of discharge, regardless of a physician's 
efforts to educate them on proper post-discharge care. This has 
also an effect of disproportionately harming hospitals that 
take care of those that need it most. I've said all along, this 
is not a Republican or Democrat issue. This is really an issue 
of fairness of service to those individuals. Do you believe 
that readmission program criteria can be improved by adding 
clear adjustments for dual-eligible status, as well as for 
other plan readmissions, such as those following trauma?
    Secretary BURWELL. We do believe in our studying and we 
appreciate the money that the Congress gave us to do the actual 
analytics, which should be completed by October. In the space 
of dual-eligibles people with chronic conditions and the socio-
economic issues that you're talking about, those things come 
together and they come together in high-cost people. And so we 
are doing the work to understand analytically. We had put out a 
proposal for some changes related to other areas where it has a 
negative impact if you are taking. We got comments back that 
people didn't like that as a solution.
    So we we did not go forward with that as a change. But we 
do believe this is a space where we need to understand where it 
makes a difference and how our rules can help support those 
that are taking care of those that are difficult to take care 
of. You may also know about the piece we just announced, that 
the Center for Medicaid and Medicare Innovation, where we're 
actually funding the efforts to do support. So you connect 
those people with the right services. As a means by which we're 
going to test whether that improves quality and lowers cost. So 
there are a number of steps we're taking. We believe it's an 
issue that we are looking closely at.
    Mr. RENACCI. Thank you. I have a bill that I know has 75 
co-sponsors, Republicans and Democrats. So I hope we can work 
together on fixing this issue. Thank you, and I yield back, Mr. 
Chairman.
    Chairman BRADY. Thank you.
    Mr. Kind in the corner you're recognized.
    Mr. KIND. Thank you, Mr. Chairman.
    Madam Secretary, thanks for your testimony today and for 
the job that you're doing. See, I want to direct your 
attention. Chairman Brady and I have been working on 
legislation reform in the post-acute care setting for increased 
efficiency, better outcomes, cost savings. So we'd like to 
engage your office to make sure we're heading in the right 
direction so we can get moving on that legislation.
    Secretary BURWELL. We look forward to engaging.
    Mr. KIND. Also, as you know, I've been a real stickler when 
it comes to payment reform in the healthcare system, trying to 
drive the system to more quality value outcome-based payments. 
And there's a lot churning right now. I just want to give you 
some time today to give us an update and what's been going on 
to get to a value-based reimbursement system and if we're 
starting to see some cost savings as a result.
    Secretary BURWELL. Yes. So the commitment that we made last 
January for the first time I committed that Medicare payments, 
30 percent of them would be in value, not volume. It was the 
first time we'd made that sort of commitment for Medicare, and 
I am hopeful and expecting that we will meet our 2016 goal of 
reaching that. We hope that by 2018 it will be 50 percent. 
Obviously I will not be here, but we'll be here to make sure 
that we are on that trajectory. And in terms of what that does 
in terms of the savings, we believe that those are real.
    The other place where we're actually starting to see 
numbers and dollars in terms of the savings is in the 
accountable care organizations, and we have done the models and 
the demonstrations. You statutorily gave us standards that had 
to be met. Quality could not be decreased and we had to have 
savings in order for them to scale. The actuaries have scored 
these, and we are able to meet that test. We've seen several 
hundred million in just a one- and two-year period of time, and 
so we are starting to see that.
    We have taken the input and have rolled out an additional 
group of the ACOs, the accountable care organizations, and 
actually just today you saw the governor of Alabama speak 
because we're working with him on Medicaid in this space as 
well, and those are regional accountable care organizations.
    Mr. KIND. We've also been seeing in recent years some 
remarkable cost savings on a per capita basis in the Medicare 
program in particular, but without a reduction in benefits for 
the services that our seniors are receiving. Can you give us an 
update on that?
    Secretary BURWELL. Yes. We are in terms of those per capita 
costs, and that's what we have to focus on. Because we have a 
growing population in Medicare, focusing on the per capita is 
where we're keeping our eye on the ball. And that's everything 
from reducing those costs to making sure they're going into the 
prevention and getting those free preventative services that 
help us save costs over time. We're seeing some increase, we'd 
like to see more.
    Mr. KIND. I think if we keep setting those financial 
incentives to value quality, we're going to see a lot of 
innovation, a lot of reform by our providers themselves. We're 
going to work very hard to hit the mark. So I encourage you to 
keep your eye on the ball in that regard. I think it's one of 
the keys to how successful healthcare reform is ultimately 
going to be in the future.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you.
    Mr. Meehan, you're recognized.
    Mr. MEEHAN. Thank you.
    Secretary, I was appreciative of your commentary regarding 
the over-prescription of the opioids and the tremendous 
precursor implications of that with the heroine problem. We 
have a group of former prosecutors working on a comprehensive 
approach. I would really enjoy if you would communicate back 
with us while we're looking at this so we can collaborate on 
this issue rather than discovering later what the intentions 
are. Can I switch my comments for a moment?
    And I appreciated your opening with the idea of a patient-
centered delivery model. You opened with discussions about 
bringing healthcare to children at home, and the value of the 
home now in a changing healthcare perspective in creating not 
only just efficiency, but you know yourself when you can 
deliver healthcare personnel into that setting, the 
observations they make with respect to the patient and the 
environment, support of the family, ability to maintain their 
drug regimen, things of that nature have so many other 
benefits.
    And yet we're seeing a recommendation by the budget to 
reduce compensation for copays, introduction of copays for home 
healthcare that isn't generated after a hospital stay, home-
infusion therapy, another thing in which we can take an 
opportunity for a patient to not have to go to a more expensive 
setting for that same kind of service. These are examples and 
ways in which I think we can find that home-centered care as a 
way to drive down health costs as well as continue to see real 
quality enhanced.
    And I hope you can work on that and give me a sense why 
would we be looking at copays when Congress actually in the 
1970s found that that was counterproductive.
    Secretary BURWELL. I think the overall concept is what 
we're moving towards generally, and so with those specific 
examples that you've given you need to understand why those 
specific examples. Because the general premise in terms of the 
demonstrations, the funding that we're doing is all about that 
home-based care because we do believe it can both increase 
quality and reduce price. And so most of the changes are going 
in that direction. So I don't know if there are exceptions to 
the----
    Mr. MEEHAN. I know you've got the data exclusivity from 
biologics and I know we're looking at that seven-year standard. 
I have real concerns about what it's going to do for 
innovation, and I hope that you will be able to characterize 
what it is going to do. I mean we are all working on the 
reduction of costs, but there's also going to be an impact. 
That number of 12 years was reached for a reason, and it wasn't 
something that was arbitrary.
    And so the concern we have with a seven-year standard is 
what it will mean and particularly as we're looking at new 
challenges from Zika viruses to great new pathways to deal with 
cancer. But that's an issue for another moment, and I thank 
you, and I yield back.
    Chairman BRADY. Thank you.
    Mr. Pascrell, you're recognized.
    Mr. PASCRELL. Thank you, Mr. Chairman.
    Secretary Burwell, thank you for being here today. You've 
been an outstanding secretary, and you've got a year to go. I 
don't know who's going to take your place. Maybe Dr. Kevorkian, 
who knows.
    Last year at this very budget hearing, you pledged to work 
with the Congress to find a solution to incorporate unique 
device identifiers, UDIs, and to health insurance claims to 
help improve patient safety and quality of care. I'm reading 
and hearing day after day from all over the country about a 
major problem which we are not addressing.
    CMS has put forward no solution. CMS has indicated that it 
would support pilot programs to demonstrate the feasibility of 
UDI in claims. But to my knowledge, no such pilot has been 
launched. CMS has not taken any steps to ensure that such a 
pilot gets off the ground. Even if one were to launch today, 
results would be back for years, and we would miss our 
opportunity to implement this important policy that can help 
save lives.
    Quite frankly, the time is up. CMS has failed to come up 
with a solution to incorporate UDI in its claims databases as 
recommended by the FDA. Device safety experts have recommended 
it and even you during your confirmation hearing. As you know, 
CMS works for you, so what steps do you plan to take to ensure 
that the agency starts to proactively support UDI in claims 
using every tool at their disposal. And I would claim before 
you answer the question that the industry itself, the industry 
itself, it's looked at very, very carefully at chapter and 
verse about this industry.
    Madam Secretary.
    Secretary BURWELL. With regard to UDIs since our last 
conversation about this, we have made progress in terms of what 
we've done on the Office of the National Coordinator's side and 
actually put out guidance that says that the UDIs will be a 
part of the electronic health records. And when we think about 
why we want the UDIs in terms of having a place where one can 
go and find out if someone had something--if we need to track 
back, having that be a part of the individual's record we think 
moves a long way with regard to the questions of ensuring and 
using this tool as a tool for safety. And so have taken steps 
in that particular space.
    With regard to those who make--we have external guidance 
that comes from external boards on when we make differences and 
changes in the claims and what we do in terms of claims 
records. At this point they have not come to making a 
recommendation. We still continue to engage and have those 
conversations. But with regard to getting to the safety----
    Chairman BRADY. Madam Secretary, I apologize. The time has 
expired.
    Ms. Black, you're recognized.
    Mrs. BLACK. Thank you, Mr. Chairman.
    Secretary, thank you for being here today. These are a lot 
of topics, and I'd like to say that these are topics that are 
certainly important to our taxpayers, they're important to our 
patients as well, and I appreciate you being here to answer 
these questions.
    I want to hold up a report that just came out yesterday, 
the Senate report that there were illegal benefits benefitted 
from $750 billion in Obamacare subsidies. And the report goes 
onto talk about how there is not a coordination between HHS and 
the IRS on these subsidies. The report says that there were 
over 500,000 immigrants that got these tax credits, but there 
wasn't verification and never was there verification sent in to 
show even after the tax credits went out that these folks were 
here legally in the country.
    And so what we've seen in other programs where the money 
goes out the door, it's very difficult to get that money back 
again. So there seems to be a lack of coordination in verifying 
that these folks are here in the country legally, and this is 
hard-earned taxpayer money that is going out the door. And so I 
want to know what your plan is to make sure that before these 
dollars go out the door that we can verify someone's status 
because we know that once the IRS has to go back and try to 
chase the money, very little of that money comes back. So do 
you have a plan for making sure that this does not occur?
    Secretary BURWELL. So with regard to one of the things I 
think that was important in the report is it did reflect that 
we don't know whether they were illegal or not. What we know is 
they didn't provide the documentation. And as we----
    Mrs. BLACK. And so how long a time period would you have 
let go by with these tax credits going out before there was a 
verification.
    Secretary BURWELL. With regard to that, we follow he 
statutory guidelines, and that's about 90 days. And so last 
year 470,000 folks were cut off within that approximately 90-
day timeframe. And the thing that I think is also important to 
recognize in terms of the connects that you're talking about is 
those individuals that did not have verification will not be 
able to get the tax credits. And the other thing is the IRS 
will follow up in terms of their filing.
    Mrs. BLACK. But the tax credits already went out the door.
    Secretary BURWELL. For the period of time that is----
    Mrs. BLACK. Yes. For that period of time, so----
    Secretary BURWELL [continuing]. We follow the statutory--we 
follow the statutory guidelines, and we don't know if there----
    Mrs. BLACK. $750 million went out the door.
    Secretary BURWELL. But we do not know that they weren't 
supposed to receive them. Many of the people that go through 
the process of verification actually have the right 
documentation.
    Mrs. BLACK. Excuse me. I'm running out of time, but I want 
to tell you I do have a bill that says no subsidies without 
verification whether that's in the self-cessation, verification 
needs to be done before the money goes out the door. We have 
seen this in so many of the entitlement programs where the 
money goes out, we can't verify and there are billions--
literally billions of dollars that are going out in these 
programs, and I just don't understand why someone can't come up 
with their verification. I mean if I make out an application 
for something and it's not complete, then I don't get whatever 
service it is that I'm applying for. I think that's really the 
direction we have to go.
    Chairman BRADY. Thank you. Whole time has expired.
    Mr. Davis.
    Mr. DAVIS. Thank you very much, Mr. Chairman.
    There are many things that I really like about this 
proposed budget, especially the continuous support for 
federally qualified health centers, home visiting, the 
addressment of behavior health, issues relative to substance 
abuse prevention and treatment. But I also have some serious 
concerns about the proposed funding for graduate medical 
education.
    Madam Secretary, I noticed that your budget once again 
calls for a 10 percent cut in indirect medical education 
payments to teaching hospitals. Yet my teaching hospitals tell 
me that the cost of these programs are significantly greater 
than the direct and indirect GME payments they receive.
    In fact, most of the major teaching hospitals in Chicago 
are training an excess of 100 doctors over the residency cap 
and we still face significant access to care problems in my 
community. I'm concerned that these cuts that are proposed 
would result in fewer doctors being trained. That will heighten 
the access to care problem. Wouldn't it make more sense or be 
better to lift the cap and train more rather than fewer 
physicians?
    Secretary BURWELL. I think the changes that we propose on 
both sides, on the Medicare side as well as the children's GME 
side, are about trying to make sure that we do get the right 
numbers of physicians and types of physicians. And so the 
proposals that we put forth are both about targeting in terms 
of higher need, higher-need communities as well as primary care 
and the specialties where we don't. And that's what are changes 
are targeted towards in terms of making sure that we are in the 
Medicare space paying for those physicians that will do 
Medicare and Medicare hospitals and making sure that we're 
targeting the right things. And that's the objective of the 
proposals.
    Mr. DAVIS. And I note that you're also seeking authority to 
kind of move more towards primary care.
    Secretary BURWELL. That's correct.
    Mr. DAVIS. Position training and I'm certainly in agreement 
with that. But when I look at the aging of our population with 
10,000 new seniors every day, don't we also need specialists, 
cardiologists and neurologists to deal with the needs of this 
population group?
    Secretary BURWELL. Yes, we are targeting both primary care 
underserved, getting positions to go to underserved as well as 
the issue of specialties where we are short. And so we are 
trying to have all of this assistance in the medical education 
be more targeted to those areas. It is----
    Mr. DAVIS. Thank you very much. I thank you for doing a 
great job and I yield back the balance of my time.
    Secretary BURWELL. Thank you.
    Chairman BRADY. Thank you.
    Ms. Noem, you're recognized.
    Mrs. NOEM. Thank you, Mr. Chairman.
    Secretary Burwell, I wanted to draw attention today to an 
emergency situation I have in South Dakota with my Native 
American constituents that aren't getting healthcare. And I 
certainly know you're aware of the situation, but I want to 
hear today how you plan to fix it.
    The Federal Government has a responsibility to our tribes 
to provide for their healthcare because of treaty obligations. 
And frankly they failed to follow through on their promise to 
do so. In fact, in the Great Plains area, we have reports of 
inappropriate conduct including nepotism, favoritism in hiring 
practices, reassignment of employees who are underperforming or 
have been poorly trained as well all leading to very low 
quality delivery of healthcare.
    In fact, a bombshell 2010 Senate report laid out a lot of 
these allegations, and these problems have been going on for 
long before I've been in Congress, for a decade or more. And 
the fraud, the abuse, the waste is rampant in the Great Plains 
area.
    And since then, even since that 2010 report, little has 
changed within IHS. And I know you'll speak to funding levels, 
but, before a Senate committee last week, your acting deputy 
secretary specifically stated that there has been an increase 
of 43 percent in funding into IHS in recent years. So we know 
we can't simply throw more money at the problem, that there has 
to be a whole culture change at IHS that has to happen.
    And what I'm concerned about is that last year CMS 
inspections of the facilities in Rosebud and Pine Ridge showed 
that it was a dangerous situation. In fact, what was so ironic 
was that CMS said that it was going to terminate its provider 
agreements to IHS and the irony of that is that we have one 
federal agency saying it won't make federal payments to another 
federal agency when they're both housed within the same 
department. And it shows the bureaucratic absurdity of the 
situation we have going on in South Dakota.
    And at this very minute, my Rosebud tribal members are 
driving over an hour to get emergency healthcare services 
because the IHS's hospital ER was closed due to dangerous care 
being provided there. So it's not necessarily just funding; 
there's other issues as well. The mismanagement, the misconduct 
in the Great Plains area needs to be dealt with and frankly it 
goes from one administrator to the next. I know that one has 
recently been reassigned, but then I also hear that he's come 
to Washington D.C. to a different position, wasn't necessarily 
penalized for his lack of doing his job in South Dakota and in 
the Great Plains area.
    I want to hear your strategies for how you're going to 
implement change in culture in this Great Plains region. But I 
also believe that buried within your IHS budget justification 
this year you have a paragraph that says IHS places a high 
priority on corrective action in the Great Plains area. The 
problem is that this paragraph appears to be literally copied 
and pasted from the justifications over the last four years.
    So there's nothing that indicates to me that we're going to 
have a change. It tells me that, yes, you're aware of the 
problem, but I don't know that you have a plan to fix it. And 
frankly we're putting people's lives in jeopardy in South 
Dakota. And we have emergency rooms that are closed down and an 
agency that will not reimburse another agency because we have 
people addicted to drugs and alcohol doing procedures on 
people, sterilization of utensils that's happening by 
handwashing.
    So I need your answers, probably written, because I'm out 
of time. I hope you know how serious I am about this. But if 
you'd respond to me in written form, I would be eternally 
grateful.
    Secretary BURWELL. Yes, and I would just say this is a 
place where I think we may need your help as well.
    Mrs. NOEM. I will help.
    Secretary BURWELL. Because I am committed but I don't have 
a year--I have 11 months and days left.
    Mrs. NOEM. Yeah.
    Secretary BURWELL. But I believe we need to get a different 
answer and outcome. And so this is a place where I may come 
back to you for help and assistance.
    Mrs. NOEM. I'm there. Thank you.
    Secretary BURWELL. Because changing culture is both the 
relationships on the ground. You know better than I do being 
from the region. It's going to take a lot, but Dr. Wakefield 
and I are committed.
    Chairman BRADY. Thank you.
    Mrs. NOEM. Thank you.
    Chairman BRADY. Madam Secretary, thank you.
    Mr. Crowley, you're recognized.
    Mr. CROWLEY. Thank you, Mr. Chairman.
    Madam Secretary, welcome. I, too, think you're doing a 
great job. I'm pleased to see the Administration's initiative 
to improve funding for mental and behavioral healthcare issues. 
One of the often overlooked benefits of the Affordable Care Act 
is that it's extending insurance coverage to millions of 
Americans. It also has improved access to previously 
unavailable or unaffordable mental health treatments.
    For example, a recent GAO examined six of the states that 
adopted the ACA's Medicaid expansion and found improved access 
to behavioral healthcare. There is more work that needs to be 
done in this area. Which the fiscal year 2017 budget 
highlights. Can you talk generally about the changes we face in 
expanding access to treatment for mental and behavioral 
healthcare and how the President's budget proposed to address 
some of those changes?
    Secretary BURWELL. It's on a number of fronts, this money 
will be used, and I think one is about actually supporting the 
access to care in communities. And that's a big part of what 
the money is about is making sure that we have the access to 
care. The other is for providers, and this gets back to the 
issue we were just discussion. The IHS is an incredible example 
of this in the tribes in terms of making sure we have the right 
providers.
    Parts of this money actually will be directed towards the 
IHS and other places to make sure we have enough providers that 
can provide the care. The final element of the strategy is 
about making sure for those who have severe mental illness that 
we get them into care early. That's about connecting to them 
and having places for them to go.
    Mr. CROWLEY. One of the other areas that I'm very excited 
about that you address in the budget is the issue of child 
care. It's so critical to a child's development for school and 
for life and it's also critical to helping working families, 
minimum--who are trying to get into the workforce and stay in 
the workforce, to make sure the child is taken care of in an 
enriching environment, a loving environment. Can you discuss 
very quickly or briefly the Administration's proposal to 
improve access to the quality of child care in this country?
    Secretary BURWELL. There are two elements to it. It is, 
one, the implementation that we have been given in terms of 
improving childcare and direction. We've been given 
discretionary funding that will be used to implement what the 
Congress has given us. But I think you also know we have a 
large mandatory proposal that would be about expanding 
childcare so that people could have that access and go to work 
and do the things that they want to do as a family in terms of 
young children and having care for them as they go to work. And 
that is a large proposal that's on the mandatory side that 
would be quality, but expansion in terms of those served.
    Mr. CROWLEY. I'm very familiar with it because I'm working 
with Senator Casey and with Congressman Frankel on this very 
issue itself and sponsoring it----
    Secretary BURWELL. We're excited about that legislation.
    Mr. Crowley [continuing]. Here in the House. But thank you 
for the proposal within the budget and for the great work that 
you're doing. So with that, Mr. Chairman, I yield back the 
balance of my time.
    Chairman BRADY. Thank you.
    Mr. Rice, you're recognized.
    Mr. RICE. Thank you, Mr. Chairman.
    And thank you, Secretary Burwell, for being here. I 
appreciate you reaching out to me earlier in the week. Very 
thoughtful, and I appreciate the information you provided to 
the Committee. I have a couple of questions, one with respect 
to the Medicaid expansion and the 20 states that haven't 
expanded.
    I don't know if you heard, but the United States has $18 
trillion in debt and both the Office of Management and Budget 
and the Congressional Budget Office, they don't agree on many 
things, but they agree we're on an unsustainable path. So let 
me ask you: If you had a wonderful uncle who loved you so and 
said, look, if you'll buy a house, maybe a more expensive house 
that you can afford, I'll make the payments for you. And let's 
say that uncle was just going into bankruptcy. Would you take 
him up on his offer?
    Secretary BURWELL. The question of the analogy, I would 
just recognize that we've reduced the deficit in this country 
by $4 trillion. And the budget that's before us right now has 
an additional $2.9 trillion over a period in terms of 
reduction. And so I think in terms of the accuracy of the 
analogy in terms of where we are as a nation, in the 
President's budget, we will keep the deficit-to-GDP ratio--will 
get down to that 2.7 level which we haven't been in many years.
    Mr. RICE. I served on the Budget Committee for three years, 
and every official from OMB and CBO that I talked to that 
entire time said that we are on an unsustainable path.
    Let me ask you this: The South Carolina Exchange was the 
ninth Obamacare exchange to close. It closed in December out of 
23 that were formed nationwide. Twenty-two of the twenty-three 
lost money in 2014. Nineteen of the twenty-three had claims in 
excess of premiums. Why is that?
    Secretary BURWELL. With regard to the issue of the co-ops, 
when we think about the co-ops entering and we think about 
business, often stable players that have been in a business 
enter new spaces. Or sometimes what we have is a situation 
where you have new players entering an old business. In the 
case of the marketplace----
    Mr. RICE. Why are they losing money? Is it because our 
government is inept to run the healthcare system, or is it 
because we just did really bad projections and we didn't know 
that we were going to actually pay out more in claims that we 
collected in premiums? How could we have missed it that bad?
    Secretary BURWELL. The co-ops are private businesses. I 
think you're referring to the co-ops, not----
    Mr. RICE. Yeah, I----
    Secretary BURWELL. The co-ops are private companies. And 
with regard to the decisions of those companies, you're right. 
Those are business decisions that a company is making that we 
the government do not have control over.
    Mr. RICE. Weren't they created with government money, 
taxpayer money?
    Secretary BURWELL. They were created with government loans, 
loans that were cut in terms of----
    Mr. RICE. Let me ask you this.
    Secretary BURWELL [continuing]. The support that they were 
going to get.
    Mr. RICE. I'm running out of time, but let me ask you this: 
Eight million people in 2014 paid a penalty for not signing up 
for Obamacare. How many were enrolled?
    Secretary BURWELL. In terms of the enrollment?
    Mr. RICE. Yeah.
    Secretary BURWELL. Last year at the end of open enrollment 
it was about 11.6 million folks.
    Mr. RICE. So almost as many chose to pay a penalty rather 
than sign up. Why is that?
    Secretary BURWELL. Many people are making----
    Chairman BRADY. Madam Secretary, if you would answer that 
in writing, I apologize. All the time is expired. I know your 
hard stop was 4:30. We have two members who have waited 
patiently. Can we finish these out? And we understand your 
schedule is----
    Secretary BURWELL. Okay. I actually can delay the--yes, 
let's stay.
    Chairman BRADY. Great.
    Mr. Smith, you're recognized.
    Thank you, Madam Secretary.
    Mr. SMITH of Missouri. Thank you, Mr. Chairman.
    Ms. Secretary, 37 percent of Medicare Advantage 
beneficiaries have annual incomes below $20,000 annually. I 
represent one of the poorest congressional districts in the 
country. So protecting the Medicare Advantage program for low 
income beneficiaries is extremely important to my constituents. 
The Medicare Advantage program offers extra financial 
protection such as maximum out-of-pocket limits, extra benefits 
and care coordination activities.
    If plans are focused to restrict some of these benefits as 
a result of the funding cuts in the President's budget of 
roughly $77 billion, do you believe that these cuts could 
result negatively, impact low income beneficiaries who may then 
face higher cost out of pocket?
    Secretary BURWELL. So what we've seen in terms of the 
changes that we've done to date in Medicare Advantage, the 
program continues to grow and grow in a healthy pace. We've 
seen premiums not have great increases and 99 percent of folks 
have access and coverage. And so in terms of what we've done to 
date, we have tried to take steps that are in ways that will 
not have the kind of impact that you've described. We believe 
what we're proposing won't.
    We also know that when we compare--and this gets to the 
entitlement issues that we began this hearing with, and it's 
appropriate to end here, is the issue of in a world where we 
know that the fee for service Medicare recipients on a per 
capita basis are paying much less than these Medicare 
Advantage. And MedPAC and other have analyzed that there are 
changes that are important to saving the taxpayer money.
    And so we're trying to get that balance so we don't have 
the outcome you described. We don't want that. But also make 
sure that as the taxpayers' money is being used in Medicare 
Advantage that it's being used wisely.
    Mr. SMITH of Missouri. So, yes or no, do you think the $77 
billion cut is going to affect my constituents on Medicare 
Advantage?
    Secretary BURWELL. No, we think that what it will do is 
create many of the changes we're proposing about competition 
coming back to the earlier point about markets. And so we 
believe that what we're proposing will not have those negative 
impacts.
    Mr. SMITH of Missouri. Okay. Thank you.
    Chairman BRADY. Thank you.
    Mr. Dold for the final question.
    Mr. DOLD. Thank you, Mr. Chairman. Madam Secretary, first 
of all, thank you so much for reaching out to our office. I 
certainly appreciate that. And I also want to thank you for 
being willing to work with the Committee. And I think that some 
of the things that we want to do is we want very much the same 
things. We want to access to quality care at an affordable 
rate, and that's certainly what I'm hearing from my 
constituents. That's what we're looking for.
    Unfortunately, as you may know, we had some market 
disruptions in Illinois in the fall of 2015. One of the most 
popular PPO plans basically said we're not going to offer the 
PPO. 173,000 Illinoisans were forced to scramble to find a new 
plan in a much narrower network. And ultimately we heard--I 
heard on a regular basis that moms would have to choose between 
their oncologist or the pediatrician that they take their kids 
to or those types of things.
    The other interesting part of is that is that since open 
enrollment has closed, several of those insurance companies 
have expressed their concerns about remaining in the exchanges 
for 2017. So the question I have for you is: What are you doing 
or is the agency doing to try to help prevent market 
disruptions going forward?
    Secretary BURWELL. With regard to that in terms of the 
marketplace, the two things are, one, is it a product the 
customer demands, and, two, the issuers in the marketplace. We 
just ended with 12.7 folks in. The issue of market stability, 
we saw nine out of ten folks in the marketplace be in counties 
where there are three or more issuers, which is about choice 
and competition.
    We know we have more work to do, though, to your point. And 
we are taking those steps. We announced that there would not be 
a special enrollment period for tax issues this year, and we 
did that before December 15th to get people to come in before 
January 1st. We've eliminated a number of special enrollment 
periods. I'm sure you've heard this from a number of the 
issuers. That's one of the things that they think will 
contribute to stability.
    The other thing they asked us for is estimates of their 
risk adjustment numbers early. So there are a series of steps 
that we're taking to continue to promote a stable marketplace.
    Mr. DOLD. I appreciate that. A couple things with regard to 
the budget. I want to thank you on the mental health side of 
things, and there's a lot more work that needs to happen there. 
But I also want to share my concerns with my good friend from 
Illinois on the funding for graduate medical education, and I 
also want to make sure I'm raising a concern on the biologics. 
Taking it down to seven years I think is an enormous concern 
with regard to innovation, and I think, again, signals 
something that we have a 12-year date exclusivity right now. To 
take it to seven is problematic in my view.
    Finally, I wanted to just talk to you about something that 
I think is important as we talk about waste fraud with in 
Medicare, and that's the Medicare Common Access Card, something 
I've worked with Congressman Blumenauer on, Congressman Roskam. 
We're losing approximately $60 billion in fraud admittedly by 
CMS. And what the Medicare Common Access Card would do is have 
a chip in it. Right now we've got identity theft running 
rampant. This is an issue for seniors. Would CMS be interested 
or at least open to a pilot program doing a Medicare Common 
Access Card?
    Secretary BURWELL. As I mentioned when Mr. Roskam asked 
about it, I want to look into figuring out what are our 
authorities and how this would work.
    Mr. DOLD. I certainly appreciate that. Thank you, Madam 
Secretary.
    Chairman BRADY. Thank you all. Time has expired. We had an 
earlier discussion about the comparisons between Part D and the 
VA. Without objection, I'll submit for the record a letter from 
CBO outlining their reasons why it would simply not result in 
savings. So ordered.
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    Chairman BRADY. Madam Secretary, I want to thank you for 
appearing for us and extending your time. While we have 
disagreements, you have been very professional, very responsive 
and clearly dedicated to your job. So thank you very much for 
being here today. Members may submit written questions be 
answered later in writing. Those questions and your answers 
will be made part of the formal hearing. With that, to Madam 
Secretary and others, the Committee stands adjourned.
    [Whereupon, at 4:42 p.m., the Committee was adjourned.]
    [Questions for the record follow:]
    
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