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

                   EXAMINING THE FISCAL YEAR 2016 HHS BUDGET

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

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION
                                   __________

                               FEBRUARY 26, 2015
                                   __________

                               Serial No. 114-13

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov
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                        COMMITTEE ON ENERGY AND COMMERCE

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

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

                                 C O N T E N T S

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

                                   Witnesses

    Sylvia Mathews Burwell, Secretary, Department of Health and Human
      Services.......................................................    10
        Prepared statement...........................................    12
        Answers to submitted questions \1\

                               Submitted Material

    Congressional Research Service memorandum, submitted by Mr.
      Griffith.......................................................    81
    Congressional Research Service report, \2\ submitted by Mr.
      Griffith.......................................................    62
    Statement of the American Academy of Actuaries, submitted by Mr.
      Burgess........................................................    91
    Statement of nearly 60 patient groups............................    94
    Article entitled, ``How Medicaid for Children Partly Pays for
      Itself,'' The New York Times, January 12, 2015, submitted by
      Mr. Pallone....................................................    97
    Article entitled, ``Save the Children's Insurance: Hillary
      Clinton and Bill Frist on Health Care for America's Kids,'' The
      New York Times, February 12, 2015, submitted by Mr. Pallone....   101

    ----------
    \1\ Secretary Burwell did not respond to submitted questions by
      the time of printing.
    \2\ Available at: http://docs.house.gov/meetings/if/if14/
      20150226/103028/hmtg-114-if14-20150226-sd008.pdf

                   EXAMINING THE FISCAL YEAR 2016 HHS BUDGET

                                  ----------

                          THURSDAY, FEBRUARY 26, 2015

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:03 a.m., in
    room 2123 of the Rayburn House Office Building, Hon. Joe Pitts
    (chairman of the subcommittee) presiding.
        Members present: Representatives Pitts, Guthrie, Barton,
    Whitfield, Shimkus, Murphy, Burgess, Lance, Griffith,
    Bilirakis, Ellmers, Bucshon, Collins, Upton (ex officio),
    Green, Engel, Capps, Schakowsky, Butterfield, Castor, Sarbanes,
    Matsui, Lujan, Schrader, Kennedy, Cardenas, and Pallone (ex
    officio).
        Staff present: Clay Alspach, Chief Counsel, Health; Gary
    Andres, Staff Director; Sean Bonyun, Communications Director;
    Leighton Brown, Press Assistant; Noelle Clemente, Press
    Secretary; Andy Duberstein, Deputy Press Secretary; Paul
    Edattel, Professional Staff Member, Health; Robert Horne,
    Professional Staff Member, Health; Charles Ingebretson, Chief
    Counsel, Oversight and Investigations; Peter Kielty, Deputy
    General Counsel; Carly McWilliams, Professional Staff Member,
    Health; Emily Newman, Counsel, Oversight; Katie Novaria,
    Professional Staff Member, Health; Tim Pataki, Professional
    Staff Member; Michelle Rosenberg, GAO Detailee, Health; Krista
    Rosenthall, Counsel to Chairman Emeritus; Adrianna Simonelli,
    Legislative Clerk; Alan Slobodin, Deputy Chief Counsel,
    Oversight; Heidi Stirrup, Health Policy Coordinator; Josh
    Trent, Professional Staff Member, Health; Traci Vitek,
    Detailee, HHS; Ziky Ababiya, Democratic Policy Analyst; Jeff
    Carroll, Democratic Staff Director; Eric Flamm, Democratic FDA
    Detailee; Hannah Green, Democratic Public Health Analyst;
    Tiffany Guarascio, Democratic Deputy Staff Director and Chief
    Health Advisor; Rachel Pryor, Democratic Health Policy Advisor;
    Tim Robinson, Democratic Chief Counsel; and Arielle Woronoff,
    Democratic Health Counsel.

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

        Mr. Pitts. The subcommittee will come to order. Chair will
    recognize himself for an opening statement.
        I would like to thank Secretary Burwell for appearing
    before the subcommittee to discuss the Administration's fiscal
    year 2016 budget request for the Department of Health and Human
    Services. Earlier this year, Madam Secretary, you stated that,
    ``The hallmark of effective leadership is instilling a culture
    of transparency, ownership, and accountability.'' These are all
    laudable goals, and I appreciate your verbal commitment to
    these principles, however, your department's actions have
    failed to adhere to the same standard. For example, we have
    only heard silence from the White House on how the
    Administration is preparing for an adverse ruling in King v.
    Burwell. We did receive a reply from you, and I thank you for
    that courtesy.
        But your letter contained no substantive answers to our
    questions. During your testimony to the Senate Finance
    Committee you were again asked about the Administration's
    plans, and again you repeatedly declined to provide a direct
    answer. And this is not the transparency that we had hoped for.
    Understandably, we were very frustrated with the Administration
    witnesses artfully dodging the questions that we ask here. So I
    am asking you today, please let your guard down a little, and
    give us direct and complete answers to our questions.
        In 2009 the President correctly said, ``The real problem
    with our long term deficit actually has to do with our
    entitlement obligations.'' Since then we have had the Simpson-
    Bowles Commission, a super-committee, sequestration, and a
    government shutdown, and never once in all this time did the
    Administration propose a plan to get the Nation's fiscal house
    in order by recommending reforms to entitlements. The 2014
    Medicare Trustees' Report, which you signed, tells us that
    Medicare will be bankrupt very soon. We recently had Senator
    Joe Lieberman and former OMB Director Alice Rivlin here, and
    they told us much the same. And we stand ready to do the hard
    work of saving and strengthening Medicare, but we need a
    willing partner.
        Once again, the President's budget fails to propose serious
    entitlement reform. The proposals in the budget related to
    Medicaid amount to saving just 15 days' worth of program
    spending over the next 10 years. The plan, apparently, is to
    let Medicare expenditures continue to grow without any of the
    structural reforms needed to strengthen and save this critical
    program, and this is not taking ownership. If we are going to
    save and strengthen our safety net programs for the most
    vulnerable, we have to do better than the President's budget.
    Both parties have to work together. You, we, the President need
    to work together to save our entitlement programs, make them
    sustainable, so we ask that you please work with us.
        On another subject, you may also remember that in early
    November of last year we spoke on the phone about why HHS has
    so far failed to hold California accountable under Federal law.
    As you know, on August 22, 2014 the California Department of
    Managed Health care, DMHC, issued a directive mandating that
    all plans under DMHC authority immediately include coverage for
    all legal abortions. This is in direct violation of the Weldon
    Amendment, a civil rights statute that prohibits Federal
    taxpayer funding for Federal agencies and state or local
    governments that discriminate because a health care entity does
    not pay for or provide coverage of, or refer for abortions.
        What California is doing is clearly illegal. It is also
    morally wrong, and violates the fundamental principles of
    freedom and conscience that our democracy is founded on, and it
    is your job to stop them, and so for that hasn't happened. So I
    will have more to say about this when we get to the questions.
        In the meantime, Madam Secretary, we look forward to your
    testimony. We hope that you will stay to answer all of our
    questions. And, with only 5 minutes of questions per member, we
    respectfully ask that you keep your answers concise and to the
    point.
        [The prepared statement of Mr. Pitts follows:]

                   Prepared statement of Hon. Joseph R. Pitts

        The Subcommittee will come to order.
        The Chair will recognize himself for an opening statement.
        I would like to thank Secretary Burwell for appearing
    before the Subcommittee to discuss the Administration's FY2016
    budget request for the Department of Health and Human Services.
        Earlier this year, Madam Secretary, you stated that ``the
    hallmark of effective leadership is instilling a culture of
    transparency, ownership, and accountability.''
        These are all laudable goals and I appreciate your verbal
    commitment to these principles. However, your Department's
    actions have failed to adhere to the same standard.
        For example, we have only heard silence from the White
    House on how the Administration is preparing for an adverse
    ruling in King v. Burwell.
        We did receive a reply from you, and I thank you for that
    courtesy. But your letter contained no substantive answers to
    our questions.
        During your testimony to the Senate Finance Committee, you
    were again asked about the Administration's plans. Again, you
    repeatedly declined to provide a direct answer.
        This is not the transparency you promised. Understandably,
    we are very frustrated with Administration witnesses artfully
    dodging the questions we ask here. So I'm asking you: please
    let your guard down a little today, and give us direct and
    complete answers to our questions.
        In 2009, the President correctly said, ``The real problem
    with our long-term deficit actually has to do with our
    entitlements obligations.''
        Since then we have had the Simpson-Bowles Commission, a
    Supercommittee, Sequestration, and a government shut down.
    Never once in all this time did the Administration propose a
    plan to get the nation's fiscal house in order by recommending
    reforms to entitlements.
        The 2014 Medicare Trustees Report, which you signed, tells
    us that Medicare will be bankrupt very soon. We recently had
    Senator Joe Lieberman and former OMB Director Alice Rivlin
    here. They told us much the same. We stand ready to do the hard
    work of saving Medicare, but we need a willing partner.
        Once again, the President's budget fails to propose serious
    entitlement reform. The proposals in the budget related to
    Medicaid amount to saving just 15 days' worth of program
    spending over the next ten years.
        The plan, apparently, is to let Medicare expenditures
    continue to grow without any of the structural reforms needed
    to strengthen and save this critical program.
        This is not taking ownership.
        If we are going to save and strengthen our safety net
    programs for the most vulnerable, we have to do better than the
    President's budget. Both parties have to work together. You,
    we, and the President need to work together to save our
    entitlement programs and make them sustainable. Please work
    with us.
        On another subject, you may also remember that, in early
    November of last year, we spoke on the phone about why HHS has
    so far failed to hold California accountable under federal law.
        As you know, on August 22, 2014, the California Department
    for Managed Health Care (DMHC) issued a directive mandating
    that all plans under DMHC authority immediately include
    coverage for all legal abortions.
        This is in direct violation of the Weldon Amendment, a
    civil rights statute that prohibits federal taxpayer funding
    for Federal agencies and state or local governments that
    discriminate because a health care entity does not provide, pay
    for, provide coverage of, or refer for abortions.
        What California is doing is clearly illegal. It is also
    morally wrong, and violates the fundamental principles of
    freedom and conscience that our democracy is founded on. It is
    your job to stop them, and so far that hasn't happened. I'll
    have more to say about this when we get to questions.
        In the meantime, Madam Secretary, we look forward to your
    testimony. We hope that you will stay to answer all of our
    questions, and, with only five minutes of questions per Member,
    we respectfully ask that you keep your answers concise and to
    the point.
        Thank you, and I yield the remainder of my time to Rep. --
    --------------------------------.

        Mr. Pitts. And, Dr. Burgess, do you want the remaining
    time?
        Mr. Burgess. Thank you, Mr. Chairman, that is very kind of
    you. And, Secretary, thank you for coming to our humble little
    subcommittee. I am frustrated over the Administration's lack of
    transparency, and the ability for Congress to get information
    that, realistically, we have been asking for for the last 4 or
    5 years, but specifically around ACA created entities, the
    Center for Medicare and Medicaid Innovation, the Prevention and
    Public Health Fund, the Consumer--the Office of Consumer
    Information and Insurance Oversight, and the Patient Center for
    Outcomes and Research Initiative. Year after year they have
    failed to achieve their mission of reducing health care costs
    and improving quality. We can't hold them accountable if we
    don't know how you are spending the dollars. So you and I have
    talked about this, and I do look forward to your responses and
    being able to finally get that information regarding those
    agencies under your----
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    Ranking Member, Mr. Green, 5 minutes for opening statement.

       OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. Green. Good morning, and thank you, Secretary Burwell,
    for being here today to discuss the President's FY '16 budget
    proposal for the Department of Health and Human Services. A
    budget is more than a line of items on a page. It is a
    reflection of the priorities of our country. Our commitment
    must be to protect the progress that we made, and to make
    strategic investments so that progress will continue in the
    future.
        This year marks the 50th anniversary of the creation of
    Medicare and Medicaid. Since the Children's Health Insurance
    Program was created to ensure America's children have
    insurance, most recently Congress passed the Affordable Care
    Act, dramatically expanding access to health coverage and high
    quality care. The Affordable Care Act took historic--steps
    toward laying the foundation for a better and more efficient
    health care system, and expanding access to cover for millions
    of Americans for whom it was previously out of reach. It also
    took important steps to restore the fiscal solvency of our
    health care system. According to the most recent estimates by
    the Congressional Budget Office, the Affordable Care Act will
    reduce the deficit by more than $100 billion for the first
    decade, and by more than a trillion in the second decade.
        As we have seen through the second enrollment period, the
    Affordable Care Act has already succeeded in ensuring every
    American can have access to high quality affordable coverage.
    Thanks to the ACA, nearly 30 million Americans got covered.
    These are people who would otherwise be uninsured. We have made
    great progress, but the work is not done. I thank the agency
    for implementing the landmark health reform law, and continuing
    to work with us so that we can build on these successes.
        In addition to prioritizing essential services and
    programs, I was pleased to see that the budget makes strategic
    investments to improve our health care system, and clear the
    way for the progress into the future. This includes funding to
    support training of the next generation of health care
    providers, national preparedness against threats to public
    health, biomedical research, drug safety, and mental health
    services. The budget invests in community health centers to
    support the care they provide for 22 million patients. In their
    role of providing an accessible, reliable source of primary
    care in underserved communities, health centers will continue
    to be a critical element of our health system.
        The President's proposal takes a critical important step by
    including four years of funding for the Children's Health care
    Insurance Program. Currently more than 10 million children get
    health insurance through CHIP. Additional funding for CHIP must
    be authorized so that there is no disruption in coverage, and
    the states are able to continue operating their programs. The
    budget proposes an increase in NIH funding. Since its creation,
    NIH has fostered remarkable advancements in human health, but
    for the past decade NIH has suffered inadequate funding.
    Without significant funding increases, the U.S. will lose its
    status as a global leader in science and innovation. Additional
    resources will help defeat our Nation's most harmful diseases,
    and ensure that the United States continues to lead biomedical
    research and scientific breakthroughs.
        The budget proposal strengthens national preparedness for
    threats to public health, including naturally occurring
    threats, and deliberate attacks. It also includes funding to
    reinforce our Nation's ability to move quickly to detect
    infectious disease outbreaks through new advanced molecular
    detection initiative, maintaining strong expertise at the
    Centers of Disease Control and Prevention. These are just a few
    highlights of what is included in the proposed HHS budget. I
    look forward to hearing more about the Administration's
    proposal during today's hearing.
        Thank you, Madam Secretary, for joining the committee to
    discuss the HHS budget. And if someone would like about a
    minute and 20 seconds? My colleague from California, Ms.
    Matsui.
        Ms. Matsui. Thank you very much for yielding the time, and
    welcome, Secretary Burwell. I appreciate the goals the
    President and you have laid forth in the fiscal budget 2016
    Department of HHS Services Budget. Building on the improvements
    made by the Affordable Care Act, we are seeking to move our
    Nation's health system by rewarding volume, and forgetting
    about the waste business. So--do this is working to achieve the
    triple aim in health care, better care, better outcomes, and
    reduced costs. We do this by making health insurance more
    affordable, by emphasizing prevention and public health, by
    encouraging scientific and clinical research, by taking
    advantage of the benefits of technology, and building up our
    Nation's mental health system.
        Many of the proposals in the budget find savings in the
    Medicare and Medicaid programs by streamlining processes and
    realigning systems to ensure that patients get the right
    service at the right time. The budget would make the SGR fix
    permanent, which we need to do to provide stability for
    doctors, and for seniors, and people with disabilities in the
    Medicare program. The budget would also extend the Children's
    Health Insurance Program, or CHIP, that provides much needed
    pediatric coverage to our Nation's children.
        To conclude, I want to emphasize the Affordable Care Act is
    working. Over 11 million Americans signed up this year,
    including 500,000 in California alone. The Administration just
    announced that since the law was enacted in 2010, 9.4 million
    people with Medicare have saved over $15 billion in
    prescription drugs. This is what we set out to do, and I
    appreciate working with you as we move forward. Thank you.
    Yield back.
        Mr. Pitts. Gentlelady yields back. Chair now recognizes
    Chairman of the full Committee, Mr. Upton, for 5 minutes for an
    opening statement.

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

        Mr. Upton. Well, thank you, Mr. Chairman. Secretary
    Burwell, welcome. Today marks your first official appearance
    before the Health Subcommittee, but I know that this is not
    your first time in this room, as you participated in one of our
    21st Century Cures roundtables last year, and we very much
    appreciate that participation.
        Your testimony does come at a very pivotal point in health
    policy, from our exciting cures effort, to next week's Supreme
    Court oral arguments. We look forward to hearing the
    Administration's perspective on the many important issues
    facing the American people. You have said during your tenure at
    HHS that transparency, ownership, and accountability are
    important values for the Department of demonstrate, which we
    certainly welcome.
        In that spirit, we look forward to gaining straightforward
    answers here today about implementation of the President's
    health care law. There have been quite a few red flags raised
    in recent weeks on the continued struggles to implement key
    pieces of that health law. Just in the last week, 800,000
    households learned that key tax forms sent out by the
    Administration contained major errors. Those Americans were
    asked to delay tax filing, therefore also delaying their
    refunds. A recent analysis from H&R Block estimates that the
    majority of Obamacare customers are being forced to pay back
    some of those subsidies. Millions of Americans are also
    learning about the law's IRS fines for failing to comply with
    the individual mandate.
        The backlash has been so intense that the Administration
    has resorted to yet another special enrollment period to quell
    some of the anger of those who are just coming to learn about
    the individual mandate penalty. In this last week, the
    healthcare.gov CEO, Kevin Counihan, suggested that the backend
    functions of the exchange would undergo a 2-year development
    plan. That means that this key part of the law will not be
    fully complete until President Obama leaves the White House.
        Collectively, these revelations suggest that the health
    care law is still not working. Our constituents deserve better,
    we know that. That is why I have worked on introducing the
    Patient Care Act, a health care reform blueprint, with my
    colleagues in the Senate, Chairman Hatch and Mr. Burr. I look
    forward to working with my colleagues about these ideas to
    improve health care in America by empowering states and
    families, not Washington.
        Yes, we have concerns with the President's signature law,
    but there are other important health care areas that we believe
    are fertile for collaboration. For the past year, almost year
    and a half, this committee has undertaken the bipartisan 21st
    Century Cures Initiative to accelerate the pace of the
    discovery, development, and delivery of new treatments and
    cures for American patients.
        I would like to thank you for your personal engagement on
    the 21st Century Cures Initiative. As you know, this is a top
    priority for our committee this year. Patients and families in
    my district in Michigan, as well as across the country are
    looking for hope, and that is what we seek to instill. And this
    effort is also important to many job creators, whether it be
    Stryker, Perrigo, or Pfizer in southwest Michigan. I also want
    to thank the staff throughout the administration, particularly
    at the FDA and the NIH for their work, their time, and effort
    to help us improve the ideas released by our committee at the
    end of last month. We have established a very good foundation,
    I think, for bipartisan success. And I will yield to other
    Republican members on this side. Seeing none----
        Mr. Pitts. Anyone seeking time?
        Mr. Upton [continuing]. Yield back.
        [The prepared statement of Mr. Upton follows:]

                     Prepared statement of Hon. Fred Upton

        Secretary Burwell, welcome. Today marks your first official
    appearance before the Health Subcommittee--but I know it isn't
    your first time this room as you participated in one of our
    21st Century Cures roundtables last year. Your testimony today
    comes at a pivotal point in health policy, from our exciting
    cures effort to next week's Supreme Court oral arguments. We
    look forward to hearing the administration's perspective on the
    many important issues facing the American people. You have said
    that during your tenure at HHS, transparency, ownership, and
    accountability are important values for the department to
    demonstrate, which we welcome.
        In that spirit, we look forward to gaining straightforward
    answers here today about implementation of the president's
    health care law. There have been quite a few red flags raised
    in recent weeks on the continued struggles to implement key
    pieces of the health law.
        Just in the past week, 800,000 households learned that key
    tax forms sent out by the administration contained major
    errors. Those Americans were asked to delay tax filing,
    therefore also delaying refunds. A recent analysis from H&R
    Block estimates that the majority of Obamacare customers are
    being forced to pay back some of their subsidies.
        Millions of Americans are also now learning about the law's
    IRS fines for failing to comply with the individual mandate.
    The backlash has been so intense that the administration has
    resorted to yet another ``special enrollment period'' to quell
    some of the anger of those who are just coming to learn about
    the individual mandate penalty.
        And this week, the HealthCare,gov CEO Kevin Counihan
    suggested that the back-end functions of the exchanges would
    undergo a two-year development plan. That means this key part
    of the law will not be fully complete until President Obama
    leaves the White House.
        Collectively, these revelations suggest that the health
    care law is still not working. Our constituents deserve better.
    That is why I have worked on introducing the Patient CARE Act,
    a health care reform blueprint with my colleagues in the
    Senate, Chairman Hatch, and Mr. Burr. I look forward to working
    with my colleagues about these ideas to improve health care in
    America by empowering states and families, not Washington.
        Yes we have concerns with the president's signature law.
    But there are other important health areas that we believe are
    fertile for collaboration. For the past year, this committee
    has undertaken the bipartisan 21st Century Cures initiative to
    accelerate the pace of the discovery, development, and delivery
    of new treatments and cures for American patients.
        I would like to thank you for your personal engagement on
    the 21st Century Cures initiative. As you know, this is a top
    priority for our committee this year. Patients and families in
    my district in Michigan and across the country are looking for
    hope, and that's what we seek to instill. And this effort is
    also important to many job creators as well, firms like
    Stryker, Perrigo, and Pfizer in southwest Michigan. I would
    also like to thank the staff throughout the administration,
    particularly at the FDA and NIH, their time, work, and effort
    to help us improve the ideas released by our committee at the
    end of January. We have established a great foundation for
    bipartisan success.

        Mr. Pitts. The Chair thanks the gentleman, and now
    recognizes the Ranking Member of the full Committee, Mr.
    Pallone, 5 minutes for an opening statement.

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

        Mr. Pallone. Thank you, Chairman Pitts, and welcome,
    Secretary Burwell. Thank you for being with us today. Today we
    are going to hear about the President's fiscal year 2016 Health
    and Human Services budget proposal, and there are many
    important provisions in the President's budget that we in
    Congress must work to support. I was pleased to see that the
    budget proposed a funding increase of $1 billion for the NIH,
    investing in early stage basic research, is one of the most
    promising ways that we can accelerate the discovery of new
    treatments and cures. And support for NIH is critical to
    building our economy as well. Every dollar of NIH funding
    generates over $2 in local economic growth, yet we have let NIH
    purchasing power decline by over 20 percent since 2003, and
    that is why finding a way to significantly increase funding for
    NIH will be my top priority, as the 21st Century Cures
    Initiative continues.
        I was also pleased to see that the budget fully funds a 4-
    year extension of the Children Health Insurance Program, or
    CHIP. We must act on this proposal immediately. With more than
    \4/5\ of state legislatures adjourning the by the end of June,
    lack of action and clarify from Congress will make budgeting
    and planning virtually impossible. By every measure, CHIP has
    become enormously successful, and always has had strong
    bipartisan support, so extending CHIP funding should be the top
    priority of this committee to ensure consistent coverage for
    the millions of children who depend on this program. And I
    think we can all agree that no child should be left worse off
    because of the actions, or lack thereof, of Congress.
        The budget also adopts the framework of the bipartisan,
    bicameral SGR repeal and replace legislation that Congress
    agreed to last year. I believe that because the Sustainable
    Growth Rate is the result of a budget gimmick, and we already
    spent $169 billion paying to fix the problem, that offsets,
    especially those within our health programs, are not necessary.
    And if we must include offsets, the war savings, which are
    known as the Overseas Contingency Operation Funds, could be
    used. I know some on the other side of the aisle don't share
    this view. What I do hope is that we can agree that, first, SGR
    should not be paid off of the backs of the beneficiaries.
    Beneficiaries will already pay for their share of the cost of
    SGR repeal through higher premiums, and half of all
    beneficiaries live on less than $23,500.
        And that is why some of the proposals in the President's
    budget concern me. The President's budget proposes to further
    increase Part B and Part D premiums, increase the Part B
    deductible for new enrollees, and impose a new surcharge on the
    Part B premium for beneficiaries with certain Medigap policies,
    and also institutes a $100 copayment per home health episode.
    And this increases out of pocket costs on beneficiaries, and I
    think that we have seen enough of that. Beneficiaries may
    forego necessary services, and, in result, use more high cost
    acute care services, and such policies will disproportionately
    affect lower and middle income beneficiaries who are not poor
    enough for Medicaid, nor have access to employer sponsored
    retiree health care. So I urge the President and my colleagues
    to be extremely cautious when proposing cuts to Medicare, and
    consider impacts on our seniors.
        The last thing I wanted to mention is--well, first to
    commend you, Secretary, for your agency's hard work
    implementing the Affordable Care Act. Because of your efforts,
    19 million uninsured Americans will be covered in this year,
    2015. And I recognize the challenge your agency faces in
    implementing this law with limited resources, however, despite
    what I call Republican obstructionism, the Affordable Care Act
    is working.
        In sum, I think this is a sound budget, and I look forward
    to hearing from you today. And I would yield the remainder of
    my time to the gentlewoman from Florida, Ms. Castor.
        Ms. Castor. Well, I thank the Ranking Member for yielding
    time, and I welcome Secretary Burwell. We are very excited to
    hear about the budget, the investments in medical research and
    Children's Health Insurance, improvements in Medicare, and the
    Centers for Disease Control. But I couldn't help but ask Mr.
    Pallone for a minute to highlight the Florida enrollment
    numbers under the ACA. It is remarkable. And I know you have
    seen them, and we have talked about it. As of February 15, over
    1.6 million Floridians have signed up for health insurance in
    the federally facilitated marketplace. We are surprised. This
    exceeded all of our expectations, to beat California and Texas,
    especially in a state that had many fits and starts over
    whether to assist our neighbors in signing up.
        But I wanted to highlight a couple of stories. A 27-year-
    old third year law student at the University of South Florida
    got assistance from a navigator. His income is about $16,000 a
    year in scholarships. He was able to find insurance for
    approximately $10 per month, zero deductible. It is his second
    year enrolling in the marketplace. He is very happy with his
    coverage. There are stories like that again, and again, and
    again, so I look forward to talking about it. Thank you.
        Mr. Pitts. Gentlelady yields back. That concludes the oral
    opening statements. As usual, all the written opening
    statements of the members will be made a part of the record.
    And so we will go now to Secretary Burwell. First of all, thank
    you for appearing before us today, Madam Secretary. Your
    written testimony will be made a part of the record. You will
    be given 5 minutes to summarize your testimony, and we
    certainly appreciate you being here this morning. And you are
    recognized for 5 minutes for your summary.

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

        Secretary Burwell. Thank you Chairman Pitts, Chairman
    Upton, Ranking Member Pallone, and Ranking Member Green, and
    members of the committee. I appreciate the invitation to be
    here today. I want to thank you for the opportunity to discuss
    the President's budget for the Department of Health and Human
    Services.
        I believe firmly that we all share common interests, and
    therefore we have a number of opportunities for common ground,
    from preventing and treating substance abuse, to advancing the
    promise of precision medicine, to building an innovation
    economy, and strengthening the American middle class. The
    budget before you makes critical investments in health care,
    science, innovation, and human services. It maintains our
    responsible stewardship of the taxpayers' dollars. It
    strengthens our work together with the Congress to prepare our
    Nation for key challenges, both at home and abroad.
        For HHS, it proposes $83.8 billion in discretionary budget
    authority, and this is a $4.8 billion increase, which will
    allow our department to deliver impact today, and lay a strong
    foundation for tomorrow. It is a fiscally responsible budget,
    which, in tandem with accompanying legislative proposals, would
    save taxpayers a net estimated $250 billion over the next
    decade. In addition, it is projected to continue slowing the
    growth of Medicare. It could secure 423 billion in savings as
    we build a smarter, healthier, better system.
        In terms of providing all Americans with access to quality,
    affordable health care, it builds upon our historic progress in
    reducing the number of uninsured, and improving coverage for
    families who already have insurance. We saw a recent example of
    this progress with the about 11.4 million Americans who either
    signed up or re-enrolled in this past open enrollment. It
    extends CHIP for 4 years, it covers newly eligible adults in
    the 28 states, plus D.C., which have expanded Medicaid, and it
    improves access to health for Native Americans. To support
    communities throughout the country, including underserved
    communities, it invests $4.2 billion in health centers, and
    $14.12 billion to bolster our Nation's health workforce. It is
    more than 50,000 National Health Service Corps clinicians,
    serving nearly 16 million patients in high need areas across
    the country. With health center mandatory funding ending in
    2016, we estimate that more than seven million Americans may
    lose access to essential cost-effective primary care, and this
    could approximately result in 40,000 jobs lost.
        To advance our common interests in building a better,
    smarter, healthier delivery system, the budget supports
    improvements to the way care is delivered, providers are paid,
    and information is distributed. On an issue for which there is
    bipartisan agreement, it replaces Medicare's flawed sustainable
    growth rate formula, and supports a long term policy solution
    to fix the SGR. The Administration supports the type of
    bipartisan, bicameral efforts that the Congress took last year.
        To advance our shared vision for leading the world in
    science and innovation, it increases funding for the NIH by a
    billion dollars to advance biomedical and behavioral research.
    In addition, it invests 250 million for the Precision Medicine
    Initiative, an effort to focus on developing treatments,
    diagnostics, and prevention strategies tailored to individual
    genetic characteristics. To further our common interests in
    providing Americans with the building blocks for success at
    every stage of life, this budget outlines an ambitious plan to
    make affordable quality child care available to every working
    class--middle class family.
        To keep Americans health, the budget strengthens our public
    health infrastructure, with $975 million for domestic and
    international preparedness, including critical funds to the
    Global Health Security Agenda. The budget will support CDC's
    critical infrastructure and cost-cutting research to facilitate
    rapid response to public health emergencies, and other public
    health threats, like the recent measles outbreak. It also
    invests in behavioral health sciences, and substance use
    prevention. Finally, as we look to leave our department
    stronger, the budget invests in our shared priorities of
    cracking down on waste, fraud, and abuse initiatives, and are
    projected to yield $22 billion in gross savings for Medicare.
    We are also addressing our Medicare appeals backlog with a
    variety of approaches, and we are investing in cybersecurity.
        As a close, I want to make one final point, and that is I
    am personally committed to responding quickly and thoughtfully
    to the concerns of Congress and members. Since I was confirmed,
    I have made it the top priority of our department to respond
    promptly and thoroughly, and work with you as we can. I also
    just want to take one moment to thank the HHS employees for all
    their work on Ebola, unaccompanied children, and all the other
    issues. With that, I look forward to your questions. Thank you.
        [The prepared statement of Secretary Burwell follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Pitts. Thank you, Madam Secretary. I will begin the
    questioning, and recognize myself for 5 minutes for that
    purpose.
        Let me start with King v. Burwell. In a few short days, the
    Supreme Court will be hearing oral arguments in the King v.
    Burwell case that could have a major impact on Obamacare. In
    January we sent you a letter, asking for any actions, analysis,
    and/or contingency plans that HHS has undertaken to prepare if
    the IRS rule is overturned. And while we received a letter from
    you earlier this week, your response failed to actually answer
    our question. The letter simply stated that you believed no
    administrative action by HHS could reverse the effects of a
    decision in favor of the Plaintiffs.
        Madam Secretary, your statement of opinion in the letter
    does not answer a simple question, so let me ask you the
    question this way. Have you or senior Department officials
    instructed counselors within HHS to prepare any potential
    actions or approaches if the Supreme Court rules against the
    IRS?
        Secretary Burwell. Mr. Chairman, with regard to what is in
    the letter, one of the things that I think is important to
    reflect that is in the letter is the analysis of what would
    happen. That is a part of the letter. And in terms of what
    would happen--and I first should state that we believe that the
    Court will decide in favor of the position we hold, which is we
    believe that this law says that--people have traveled across
    the country--people in Texas should have the same subsidies as
    people in New York. It is an important starting point.
        But with regard to what would happen, because I think that
    is an important part of answering the question, first, what
    would happen is, when those subsidies go away, 11.4 million
    people, that was the number I gave you--as of January 30, when
    we did our most recent analysis, 87 percent of the individuals
    in the marketplace are eligible for subsidies. Those subsidies
    are, on average, estimated to be $268 per individual, per
    month. Those subsidies, number one, would go away.
        Mr. Pitts. Yes.
        Secretary Burwell. That would lead to a number----
        Mr. Pitts. Madam Secretary, I understand that. I am asking
    if you know of any plan to respond to approaches if the Supreme
    Court rules against the IRS? Has the White House, has OMB, or
    other Administration officials directed or asked you about any
    approaches in response to King v. Burwell, or to work with the
    Treasury Department on potential responses? That is my
    question.
        Secretary Burwell. So, in order to respond to the question,
    Mr. Chairman, in order to think about the question of a plan,
    one needs to, I think, analyze the problem, which is what I was
    articulating, in terms of the three major things that would
    occur if the Court decides with the Plaintiffs.
        Mr. Pitts. Let me ask it a different way. I would like to
    provide you some more information as to why we expect an answer
    from you today. The Committee received recently specific
    information from a source within your department about the
    existence of an approximately 100-page document related to
    potential actions HHS may take if the Supreme Court rules
    against the Administration in King v. Burwell. Are you, or
    senior staff at HHS, aware of this document?
        Secretary Burwell. Mr. Chairman, this is a document I am
    not aware of.
        Mr. Pitts. OK.
        Secretary Burwell. With regard to the question that you
    have asked, as I said in the letter, we believe--and I think it
    is very important to understand the damage, because it is
    related to the answer. The damage comes in the number of
    uninsured that would occur. Number two, it occurs in what
    happens in the individual marketplace, where a group of less
    health individuals come in, and that drives premiums up in that
    marketplace. And, number three, the indigent care that occurs
    from the uninsured, and what that means in both those states,
    in terms of their economies, as well as what it means for
    employer base. Those are the ramifications. With regard to
    those things, which we believe are the damage, as I state in
    the letter, we believe we do not have any administrative
    actions, and, therefore, there is not----
        Mr. Pitts. All right, let me go on to another issue. I, as
    you know, as we discussed over the phone, am deeply concerned
    about the lack of HHS action regarding California, and the DMHC
    authority to immediately include coverage for abortion. And
    this mandate, California mandate is a clear violation of the
    Weldon Amendment, which provides civil rights protections, and
    prohibits funding to government entities discriminating against
    health care entities for following their conscience. Do you
    agree that the Weldon Amendment prohibits funding for states
    that mandate abortion coverage in insurance plans?
        Secretary Burwell. We take the Weldon Amendment very
    seriously. And since you spoke with me, Mr. Chairman, and we
    received those letters, we have opened an investigation in the
    Office of Civil Rights at HHS to investigate the concerns that
    you and others have articulated. We take this seriously, and
    are trying to move through that investigation as expeditiously
    as possible.
        Mr. Pitts. So since it is clear that California is in
    violation of Federal law, can you project a date by which you
    expect the violation to be stopped?
        Secretary Burwell. With regard to the issue of the
    investigation, Mr. Chairman, that is not something--I need to
    let the investigation go, and I have asked the team to make
    sure they do it as expeditiously as possible, but in order--
    that I stay away from the investigation, in terms of my
    interference in any way. I want to let them go forward, but I
    have asked for due speed.
        Mr. Pitts. OK. We will follow up. Thank you. Chair
    recognizes the Ranking Member Green, 5 minutes for questions.
        Mr. Green. Thank you, Mr. Chairman.
        Madam Secretary, it has been almost 5 years since the
    Affordable Care Act was passed, and have yet to see any
    legislation introduced by my Republican colleagues to replace
    the Affordable Care Act, even though we have had at least 56
    votes on the House floor to repeal it. Given all this talk of
    repealing the Affordable Care Act, are you aware of any request
    for technical assistance from Republicans on legislation that
    would replace the Affordable Care Act with a credible proposal
    to provide comprehensive health coverage to millions of
    Americans?
        Secretary Burwell. I am not aware of those requests.
        Mr. Green. Madam Secretary, over the last couple days we
    have heard a lot about contingency plans. If the millions of
    Americans who received financial help through the Affordable
    Care Act would lose them, are you aware of any Republican
    legislative proposals that would provide millions of Americans
    with the financial assistance to help them with affordable
    health care coverage?
        Secretary Burwell. I am not aware.
        Mr. Green. Secretary, I want to get your input on an issue
    that I know you are concerned--I appreciate you addressing it
    in your opening remarks, that myself, and a lot of members of
    our committee--there is a funding cliff that is facing our
    community health centers. Health centers serve nearly 22
    million patients, and are projected to serve 28.6 million
    patients in over 9,000 locations across the country in the
    fiscal year of 2016. Because of the current patient
    demographics and statutory mandate to locate in underserved
    areas, or to serve underserved populations, health centers are
    well positioned to provide health care service to millions of
    newly insured Americans. They are particularly important in our
    district, which is a federally designated underserved community
    in Houston, Texas.
        Secretary Burwell, I was pleased to see the President's
    budget included a multi-year extension of mandatory funding for
    health centers. As you know, the health centers patients face a
    major loss of access in a few months if we don't act to prevent
    the funding cliff caused by the expiration of the mandatory
    funding at the end of the fiscal year. Can you speak about the
    importance of community health centers within our health system
    as we look at the issues of access, quality, and cost?
        Secretary Burwell. We believe that they are a fundamental
    underpinning, and not just in terms of health care in
    communities, but they are also an important part of the
    economics of communities, when you think about the fact that we
    could lose up to 40,000 estimated jobs in terms of who we don't
    extend. But as you think about the numbers, thinking that 1 in
    15 Americans actually are served by these health centers, how
    integral they are to providing primary care throughout the
    country.
        And so we think it is extremely important to continue that
    so that we can--as we have reduced the number of uninsured, we
    also want to make sure that those people are having care, and
    those that had care before still have access to that care,
    especially in our underserved communities across the country,
    not all, but many of which are very rural.
        Mr. Green. Can you comment on the impact that the funding
    cuts would have on patients' access to care? Can you estimate
    how many fewer people would be able to receive services at our
    local health centers?
        Secretary Burwell. Our estimates are that if we aren't able
    to extend, that it could be up to seven million patients who
    would no longer be able to have access to that care. We
    estimate that perhaps over 2,000 of the centers would shut down
    without that, and that--then there are the patients who would
    not be served because people would have to scale back in a
    number of the centers with reduced funding.
        Mr. Green. In those 2,000 centers, do you know how many
    jobs we lost?
        Secretary Burwell. Approximately--the estimates are up to
    40,000.
        Mr. Green. OK. Thank you. The health centers are a crucial
    part of our Nation's primary care infrastructure for 50 years,
    and have long had truly bipartisan support. In the last year,
    along with my colleagues on both sides, including
    Representative Lance, support--reiterating our support for
    health centers, and calling for a bipartisan solution, we had
    250 co-signers, including 31 members of our committee. A
    similar letter in the Senate gathered 60--gained 66 votes, and
    more than 100 national organizations have called for a fix.
    Consensus is something must be done, and we have to act as soon
    as possible.
        This issue is a top priority of mine, and I know a lot of
    other members, literally, Republican and Democrat across the
    country, who look forward to working with you and our
    colleagues on the committee on a bipartisan basis to find a
    solution to avert that funding cliff.
        Mr. Chairman, I have 43 seconds left, and I would like to
    yield for somebody for that 43 seconds on our side. Anybody
    want about 30 seconds now? OK. Well, Mr. Chairman, I yield
    back.
        Mr. Pitts. Thank you. Chair now recognizes the Chairman of
    the full Committee, Mr. Upton, 5 minutes for questions.
        Mr. Upton. Thank you again, Mr. Chairman. Secretary
    Burwell, there are a number of health care law implementation
    issues that continue to trouble us. In the interest of time, I
    would ask that you submit answers to the following questions in
    writing within 2 weeks.
        The CEO of healthcare.gov recently stated that there is a 2
    year development plan for the backend of the healthcare.gov. If
    you could provide us an estimate of when the backend will
    finally be fully automated, would be great. Second one is HHS
    recently announced that 800,000 Americans enrolled in coverage
    through healthcare.gov received inaccurate tax forms under the
    ACA. We would like a detailed assessment on when the Department
    expects these taxpayers will have accurate information in hand
    so that they can file their taxes. And third, many Americans
    were automatically re-enrolled in exchange plans, raising
    concerns that individuals and families may be getting
    unexpected premium bills, or inaccurate exchange subsidies in
    2015. We would ask that you submit specific data on the number
    of Americans who have been automatically re-enrolled in those
    exchange plans. So that would be helpful.
        Now I will return to 21st Century Cures, and again,
    appreciate your personal assistance with this. And I, for the
    record, want to certainly thank Dr. Collins, Commissioner
    Hamburg, Dr. Woodcock, and Dr. Shuren, countless others at your
    department for the help on 21st Century Cures. Because of that
    participation, and participation of folks from across the
    country, we have been able to learn more about the status of
    innovation in this country, and we hear about ways to
    accelerate the discovery, development, delivery of cures and
    treatments for patients.
        As we heard at our first roundtable, there are over 10,000
    diseases, and we have only cures and treatments for about 500,
    so we have a great deal of work ahead to do. We released a
    discussion document last month, and have been working with
    Congresswoman DeGette, Ranking Member Pallone, Mr. Green, other
    members of our Committee, and on both sides of the aisle to
    improve that document. One area that includes a placeholder is
    precision medicine, something the President talked about in the
    State of the Union Address, and subsequently a White House
    event a couple weeks ago. We did put that placeholder into the
    draft, and we look forward to continuing to work with you, and
    the White House, the Administration, on that important issue.
    Could you give us a background on the Administration's
    precision medicine policy, and what we should look forward to?
        Secretary Burwell. Thank you, and thank you for the
    partnership, as we work through these issues together, and it
    is exciting to have the energy around these issues, including
    the precision medicine, which is, I think, a subset of the
    broader issues you are looking at. Our precision medicine
    initiative is $215 million, with regard to--as we think about
    it from a budget perspective.
        But I think thinking about it from the pieces and what it
    is doing, one part of the initiative is creating a very large
    database of a million people through NIH, but we will access
    that through other channels, so that we are drawing from
    existing databases to get the information we need, because, as
    we are talking about what this is, precision medicine, or
    personalized medicine, is getting the information so that we
    can do treatments that are to the individual.
        I was at NIH recently, had the opportunity to both see the
    tumors and meet the cancer patient of a kidney cancer patient,
    where he had a group of tumors removed. They came back, but
    then, using precision medicine, which meant looking
    specifically at the genetic makeup of his tumors--be treated in
    a different way. I met him. That happened months ago, and now
    he--the patient was there, discussing it with me, and is a very
    different place. So, one, that large database. Two,
    specifically focusing in the area of cancer, because we already
    are seeing some progress there, and we believe that place is
    right for it.
        The other thing we need to do is FDA. Make sure that, as we
    think about precision medicine, we regulate, and think about
    how to improve these things in ways of a different type of
    medicine. And then finally, we need the health records, the
    Office of National Coordinator for Health--Electronic Health
    Records to be a part of making sure this will do with payments,
    and how clinicians will use. Those are the elements.
        Mr. Upton. Well, I just want to say, that is very helpful,
    and we are excited as well. And though I have been out to the
    NIH a number of times in the past number of years, I want to
    remind members here that we have got a committee trip--I have
    invited, I think, all the members on this subcommittee to go
    out to the NIH next Monday morning. Dr. Collins has been very
    interested in having us out to kick the tires, like you saw
    yourself.
        And I know that, because we have votes tomorrow, Friday,
    and again on Monday, and perhaps over the weekend, there may be
    more of us here over the weekend than originally thought. So I
    want to remind members that they are invited to join with us
    and not miss votes come Monday on a trip there, and I yield
    back. Thank you very much.
        Mr. Pitts. Chair thanks the gentlemen. Now recognize the
    Ranking Member of the full Committee, Mr. Pallone, 5 minutes
    for questions.
        Mr. Pallone. Hello, Secretary Burwell. I am sure you can
    sense that I am very proud of the Affordable Care Act, and
    concerned about Republican efforts to repeal it, or now take it
    to court, in the case of King vs. Burwell.
        Are you aware of any Republican bill that would reduce the
    number of uninsured in this country by 11 million people--I
    said 11, it is actually 19 million people, the way that the
    Affordable Care Act does? I mean, obviously I am saying this
    because I don't see them coming up with any alternative.
        Secretary Burwell. You know, we haven't, and I think it is
    important to reflect, historically, when one looks at the
    history, and actually I have gone back to Teddy Roosevelt, and
    the quotations from Teddy Roosevelt forward, through both
    Republican and Democratic administrations, we see--whether it
    was President Bush, President Nixon, President--Republican and
    Democrat, President Clinton, the conversation about how we make
    this next step forward, with regard to reducing uninsured, is
    something that we struggled with as a Nation.
        And this is the first time, and someone reflected on the
    anniversary of Medicare, and that 50 year anniversary, this is
    the first time that we have seen that. And so the plan that we
    have in place, the implementation of the Affordable Care Act,
    has done that. But we have not seen any alternatives.
        Mr. Pallone. All right. Let me ask you about CHIP. All the
    Democrats on the Committee recently introduced a bill to extend
    the CHIP program, and I want to emphasize again that we have to
    act on this legislation immediately, when we consider SGR,
    which expires at the end of March. While funding may not expire
    until the end of September for CHIP, in fact, 20 states will
    finish their legislative sessions by the end of April, and more
    than half by June 1, so it is clear that Congress needs to act
    swiftly to ensure states can budget appropriately for CHIP, and
    avoid any disruption in children's coverage. So, given the
    bipartisan history of this program, I see no reason why
    Congress can't act very soon.
        Can you comment on the impact on states if the CHIP funding
    isn't extended soon?
        Secretary Burwell. I would comment on that from two
    different perspectives, one as former director of OMB, and the
    issues of predictability of funding, and the issues of
    management, and ability to manage. And so, for the states to be
    able to do that, this is something that is important. When we
    have had predictability in our own budget system, we have seen
    the benefits of that economically throughout the past years--2
    years.
        And the other thing I would say is, having just spent a lot
    of time with the governors this weekend when they were in town,
    this is a very important issue to them. We have seen that
    letter that 40 governors have signed with regard to knowing
    that they have that predictability of a program that is
    providing great benefits to the children in their states.
        Mr. Pallone. Now, the Senate and House Republicans have
    released a CHIP proposal this week, however, this proposal
    would institute a 12-month waiting period, needlessly forces
    low income children off of Medicaid and onto CHIP, and reduces
    or completely discontinues coverage for children above 250
    percent of the Federal poverty level, despite the choice of 28
    states around our Nation to cover those kids. Can you discuss
    the impact of policies like this on some of our most vulnerable
    children?
        Secretary Burwell. So we think that the CHIP program is a
    program--bipartisan program, and a program that is working a
    delivering results, in terms of that quality health care for
    those children, and has worked. We believe, that is in our
    budget, a 4-year extension of the program, is a very important
    thing, and that we need to do that in a timely fashion to both
    make sure those children are covered, and receive the care that
    they need, but also, in addition, to have that predictability
    for states, especially those states that are in their
    legislative process right now.
        Mr. Pallone. And I know you mentioned the 4-year extension.
    The budget includes a 4-year extension of the CHIP program. Can
    you talk about why that full extension of 4 years is so
    critical for the kids that depend on this health coverage? And
    maybe also mention, as part of the extension, the budget
    includes a permanent extension of express lane eligibility. If
    you would talk about the success of express lane eligibility as
    an option for states?
        Secretary Burwell. So the express lane eligibility, and
    those issues, we--folks ask us to try and figure out ways to
    simplify, to make things easier, and that is making things
    easier in two ways. When we hear from folks, it is about both
    the customer, in terms of when they came in, as well as the
    states. And we believe this is a program that has been
    successful in getting to that simplicity, and the simplicity
    often can work to create either A, better quality, or B, lower
    costs, and so we think that is important--4 years, we believe
    that is a good amount of time, and the right amount of time for
    us to do this extension. There will be interaction with the
    Affordable Care Act, we know that, and we believe that the 4-
    year period is the right period for us to understand and look
    at that.
        Mr. Pallone. Thank you. Mr. Chairman, I would like to
    submit for the record two CHIP articles. The first is an op-ed
    published in the New York Times this month by former Secretary
    Hilary Clinton, and former Senator Bill Frist, discussing the
    long term bipartisan history of the program, and the importance
    of a 4-year extension. And the second article was published in
    the New York Times last month, shows how health coverage for
    children pays for itself, and all the research showing that
    when children have health coverage, future earnings are
    boosted. If I could----
        Mr. Pitts. Without objection----
        Mr. Pallone. Thank you, Mr.----
        Mr. Pitts [continuing]. Ordered.
        Mr. Pallone [continuing]. Chairman.
        Mr. Pitts. The gentleman yields back. Chair now recognizes
    the Chair Emeritus of the full Committee, Mr. Barton, 5 minutes
    for questions.
        Mr. Barton. Thank you, Mr. Chairman. Thank you, Secretary,
    for being here. As I have talked to you before, there are lots
    of problems that we have to deal with, you in your position,
    and the Committee in our position. But there are some
    opportunities for bipartisanship, and one of them is a piece of
    legislation that we call the Ace Kids Act. The original co-
    sponsors are Ms. Castor of Florida, I think Ms. Eshoo of
    California, Mr. Green of Texas, myself, on the Republican side,
    along with several other members of this committee on the
    majority side.
        You said in your opening statement that Medicaid is going
    to be about $345 billion this year, an increase, I believe, of
    over 16 billion. Well, there is one piece of legislation we
    could pass on a bipartisan basis that would actually save money
    in Medicaid, and that is the Ace Kids Act. It creates a home
    for families that have medically complex children, based on an
    anchor hospital concept with the major children's hospitals in
    America. I think there are about 60 of them. So if a parent has
    a child that is medically complex, and qualifies for the
    program, that child gets access to the network on kind of a one
    stop shop. All the specialties, all the various procedures are
    provided, and Medicaid is billed on time. We think there are
    about 12 million children that would qualify for the program,
    and we believe that it will save billions of dollars over a 10
    year period.
        It has been introduced in the Senate, the identical bill,
    with three Republican co-sponsors, three Democrat co-sponsors.
    So here is a rare piece of legislation that both sides of the
    aisle support. The Republican leadership supports it. Chairman
    Upton supports it. Chairman Pitts supports it. Does your
    department have a position on the bill, and if so, could you
    explain to the Committee what that position is?
        Secretary Burwell. So with regard to the specific
    legislation, I don't think we, as an administration, have
    issued--but what I would say is all of the concepts, we agree,
    and we welcome the opportunity. The idea that we can improve
    both quality and cost for these children, who are very complex,
    and who are moving state to state, and the current system
    doesn't afford us the opportunity, both with regard to making
    sure we don't have duplicative payments, we obviously do not
    want that, fiscal responsibility, and we want that ease that
    the parent can have the child at the right place with the right
    care, even if it is across state lines.
        So I would just say we look forward to working with you,
    welcome the opportunity, if there are questions and ways that
    we can provide technical assistance and other things as part of
    this, we welcome that opportunity, because we agree with the
    fundamental of what we are trying to do here, and believe this
    is something that could improve both cost and quality.
        Mr. Barton. Well, I would encourage you and your department
    to take a look at the bill. It is not illegal or immoral for
    the Administration to issue a letter of support, and this is
    one that I think, with Chairman Upton and Chairman Pitts, and
    the Ranking Member in the full Committee and Subcommittee, and
    leadership on both sides of the aisle of the House said this
    bill could go. It could be a part of Chairman Upton's 21st
    Century effort, or it could be a stand-alone bill.
        I also, in the brief time I have, want to concur with what
    Ranking Member Green said about community health centers. I
    hope we can work together in a bipartisan fashion to find an
    answer to keep those funded. I know there is a funding issue
    this year that we need to address, and reauthorize the program.
    I have a number of those health centers in my Congressional
    district, and they are very helpful, providing indigent care.
        And, finally, I wasn't going to ask this question, but I am
    a little bit puzzled. When Chairman Pitts asked you the
    question about this report that deals with planning in case----
        Secretary Burwell. Yes.
        Mr. Barton [continuing]. The health exchanges at the state
    level under the Affordable Care Act are found to not be legal
    the way they are currently funded, if there was a plan, and if
    you had seen the plan, I take you at your word that you haven't
    seen the plan, but don't you think it is prudent that there
    should be a plan? I hope I don't have a primary opponent, I
    hope I don't have a general election opponent, but I have a
    plan in case I do. I know you hope that the Court upholds your
    position, but shouldn't the Administration and your agency have
    a plan in case it fails?
        Secretary Burwell. Congressman, what we state in the
    letter, and what we believe is, if the Court decides, which we
    don't believe they will, but if the Court decides on behalf of
    the Plaintiffs, if the Supreme Court of the United States says
    that the subsidies are not available to the people of Texas, we
    don't have an administrative action that we could take. So the
    question of having a plan, we don't have an administrative
    action that we believe can undo the damage.
        And that is why, when I was answering the Chairman, I think
    it is important to understand what the damage is, because then
    it comes to the question of--we don't believe we have any
    administrative----
        Mr. Barton. So, my time has expired, but if the Court
    strikes it down, the Administration is just going to hold up
    your hands and say, we surrender?
        Secretary Burwell. We believe the law as it stands is how
    it should be implemented.
        Mr. Barton. I understand.
        Secretary Burwell. And with regard to--when the Supreme
    Court speaks, if the Supreme Court speaks to this issue, we do
    not believe that there is an administrative authority that we
    have in our----
        Mr. Barton. All right.
        Secretary Burwell [continuing]. To undo it. And so that
    is----
        Mr. Barton. That is----
        Secretary Burwell [continuing]. Something we don't believe
    we have and----
        Mr. Barton. That is puzzling but I accept that. Thank you,
    Mr. Chairman, for your courtesy, and the minority, for letting
    me have extra time.
        Mr. Pitts. Chair thanks the gentleman, and now recognize
    the gentleman from New York, Mr. Engel, 5 minutes for
    questions.
        Mr. Engel. Thank you very much, Mr. Chairman, and welcome,
    Secretary Burwell. Let me piggyback on a backup plan. I was
    part of this committee. I participated in months and months of
    deliberations for the Affordable Health care Act. We had weeks
    of markups, this committee did, and not once was there mention
    of subsidies not being available to individuals in states that
    did not set up their own exchanges. I have heard a lot of
    complaints on the other side of the aisle about the law, but
    never was this issue discussed until they lost at the Supreme
    Court in 2012.
        Some of my friends signed on to amicus briefs, and wasting
    credible time forcing votes on the full repeal of the law, yet
    they are upset that the Administration doesn't have a backup
    plan, should the Supreme Court ruling threaten the availability
    of subsidies for 8.6 million Americans. And I think it is
    somewhat ironic that my Republican friends are demanding that
    this Administration fix problems that they themselves created,
    and have shown zero interest in fixing. Should Republicans get
    what they want, and the Supreme Court rules in favor of King, I
    would urge my colleagues, if that should happen, to pass
    legislation to ensure that Americans have continued access to
    affordable coverage through the Federally facilitated exchange,
    just as Democrats intended.
        Next month the Affordable Care Act will have been the law
    of the land for 5 years. It is not a perfect law, and there are
    issues that need to be changed with it, but I would like to see
    those issues addressed. And let us both of us, in a bipartisan
    way, turn our focus on improving the law, and enabling more
    quality coverage options for our constituents, instead of
    trying to kill it, repeal it, take it to court, and things like
    that. So I just wanted to say that I am sure that you agree
    with what I just said.
        Secretary Burwell. Yes. We look forward to moving forward,
    and we do want to make improvements as we can.
        Mr. Engel. Thank you. And I want to use my home State of
    New York as a great example of what is possible when the
    Federal Government has a willing and enthusiastic partner in
    the Affordable Health care implementation. As a result of our
    successful exchange and Medicaid expansion, more than 2.1
    million New Yorkers have quality health care coverage. Our
    state's uninsured rate has dropped to only 10 percent. And
    there is clear evidence we are reaching the right people too,
    since 88 percent of people who obtained coverage through the
    exchange reported being uninsured at the time they enrolled, so
    it is really working in New York. And the health insurance
    options available through New York State of Health are on
    average 50 percent cheaper than the comparable coverage
    available before the exchange was established.
        So I want you to know, I am sure you know it, that the ACA
    is working, and working well in New York, and that is why I
    really think it is terrible that I have been forced to take
    more than 50 votes to repeal some or all of this law. We should
    fix what is wrong. But in my state, it has really been a
    tremendous success.
        Secretary Burwell. And, fortunately, I have had the
    opportunity to travel the country and see the individuals,
    those are the numbers, and the individuals, and whether it is
    Laura in Florida, 26 years old, married to someone who is a
    truck driver, who does not have coverage. She is training to be
    an X-ray tech, they have two children. They did not have
    insurance. She now has insurance with a premium of $41 a month.
    Or a woman who had MS in the State of Texas, and for 17 years
    she had not had health insurance. And so how people go about--
    she treated her MS through the emergency room, and she has four
    children, and she works. And so, when it would get bad enough,
    that is what she would do. And so the stories of what it means
    to people, in terms of their financial and health security, I
    think are--the numbers are important, but it is those stories
    which really make this real.
        Mr. Engel. And Secretary Burwell, I understand that we have
    seen robust exchange enrollment nationwide, even in states
    where Republican governors refuse to set up a state exchange,
    or expand their Medicaid programs. Isn't this true?
        Secretary Burwell. So the numbers--and I spoke to this
    yesterday, when we would been able to look at the numbers, 53
    percent of the enrollees in the marketplace this year, in the
    Federal marketplace, are new enrollments. And so I think that
    is indicating that--the demand for the product, and the need
    for the product.
        Mr. Engel. Thank you. I want to second Mr. Pallone's
    positive discussions about CHIP. I have always been a strong
    supporter, and, as of July 2014, an estimated 476,000 children
    were enrolled in this affordable coverage option for their care
    in New York, and so I think that that is really, really
    important. I was pleased, therefore, to see with the budget
    proposal for fiscal year 2016 included funding for CHIP for the
    next 4 years, through fiscal year 2019. So can you elaborate on
    why you believe increasing tobacco taxes is a viable means for
    funding this program while we sort out the transition issues
    associated with the Affordable Care Act?
        Secretary Burwell. We believe one of the things of trying
    to be fiscally responsible, and indicating how we are paying
    for things, we believe that this is a legitimate way to pay for
    things, especially in the context of we are providing health
    care, and something that will hopefully create a deterrent, and
    help health care, in terms of the issue of a tobacco tax. As
    one analyzes across the Department, and whether it is at CMS or
    CDC, the impact that tobacco has on health in our Nation, and
    the cost of health care in our Nation, is one that we think is
    a fair place to go to pay for this care for the children.
        Mr. Engel. I agree with you. And, finally, I want to talk
    about graduate medical education, because I was concerned that
    the Administration's proposal to cut enduring GME funding--one
    in six physicians in America obtains training in my home State
    of New York, and we have some of the finest academic medical
    centers in the country. So you require significant funding and
    time to develop the infrastructure and expertise necessary to
    ensure quality care is available. So how do we ensure stability
    for these academic medical centers, and the patients they
    serve, if we put GME funding at risk?
        Secretary Burwell. We believe and hope that our proposal
    does not do that, and meets the objectives of making sure we
    are training appropriate positions for both primary care and
    specialties, where we don't have as many as we should, at the
    same time, making sure we target it. There is $100 million for
    pediatric, and then a wider pool for competition. It is an
    issue that we want to meet the same objectives at the same time
    we do it in a fiscally responsible way.
        Mr. Engel. Thank you. Thank you, Mr. Chairman.
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    Vice Chairman of the Subcommittee, Mr. Guthrie, 5 minutes for
    questions.
        Mr. Guthrie. Thank you, Madam Secretary for coming, and I
    really look forward to working on 21st Century Cures, and all
    the things that we could work on over the next years as Vice
    Chair.
        But first I would like to direct your attention to the cost
    share reduction program contained in the ACA, specifically
    Sections 1402 and 1412. Does any part of this budget request,
    or does any part of this budget that we are talking about today
    request any new authority, including any transfer authority to
    pay insurers under the cost share reduction program?
        Secretary Burwell. With regard to the program, which, as a
    program, as you know, is about making sure that the costs of
    health care to this individuals that are coming into the
    marketplace is something that they afford, that is what it is
    about, and we believe that we do have the authorities to do the
    cost sharing.
        Mr. Guthrie. Is there any new authority requested in this
    budget?
        Secretary Burwell. No new language.
        Mr. Guthrie. There is no new language? And so we do know it
    is up and running. I think we spent $3 billion already on the
    cost share reduction program, that are then paid to insurers
    with taxpayer funds. The budget that is being submitted
    estimates 11.2 billion over 2015-2016, and CBO says 175 billion
    over the next 10 years is what they have estimated. And could
    you cite where the appropriations authority is? You said you do
    believe you have the--can you cite where that is?
        Secretary Burwell. We do believe we do, and I am sure you
    know that right now this is an issue that is under litigation,
    and a court case that has been brought. And so, with regard to
    that, that is an issue that I will let our colleagues at the
    Justice Department speak to, because of the place it is in
    litigation.
        Mr. Guthrie. I understand that, but we are doing oversight
    here. I am not an attorney, so--when you were at OMB in 2014,
    there actually was a request in the 2014 budget for direct
    appropriation, and that didn't happen, for whatever reason, but
    we are spending money. So whether we spend a penny or 100--this
    is $175 billion over 10 year program. We feel like we--this is
    an oversight hearing, and so we feel like it is our
    responsibility to make sure to our taxpayers that we have good
    answers on where this is coming from. So we are just asking for
    where the appropriation comes from authority.
        Secretary Burwell. I understand and I appreciate the
    question, and I am sorry that it is in litigation. I wish we
    weren't in a place where we are in litigation, but once
    something has entered into that place, it does create a
    difficult circumstance. I respect the issue of oversight, but
    because the litigation has been brought by the House----
        Mr. Guthrie. Yes.
        Secretary Burwell [continuing]. On this issue, we are in a
    place where I think that is the appropriate place for this
    conversation.
        Mr. Guthrie. We are really--I am just not aware of any
    pending litigation exception at oversight hearing questions,
    and--is there, like, a legal case, or authority, or did the
    Justice Department say you don't have to----
        Secretary Burwell. With regard to issues that are being
    litigated, generally those are matters that we refer, and let
    the Justice Department continue on.
        Mr. Guthrie. And--that we have never been able to get an
    answer from the Administration for where the language--nobody
    has even been able to point to us where that appropriation
    language comes from. And it was--and you previously had
    requested appropriation.
        Let me ask you another question. You had recently said--you
    received--I think 18 employer groups sent you a letter, urging
    that small groups be maintained at 50 employees. And they were
    citing an actuarial analysis that showed when they go to 50--to
    51, actuarial analysis said that it would--estimated that \2/3\
    of the members--so they would receive an increase, and--of 18
    percent. And I just don't believe that these small employers,
    50 to 100 employees, can accept an 18 percent increase in their
    premiums. Also, the promise that if you like the plan, you can
    keep it, because if the 50 to 100 have to go into the new plan,
    they will have to meet the requirements of the health care law
    that--essential benefits, and the other things that have caused
    other people to lose the plans that they liked, that they could
    keep.
        And due to this impact, would you support allowing states
    to keep their market at 50 or below, not go to the 51 to 100?
        Secretary Burwell. This is an issue that we are looking at
    and examining because we have a number of comments on it. And
    what I would say is I would welcome the opportunity to see the
    piece of work that you are talking about and referring to so
    that we can see and understand that. I think what we want to do
    is understand the facts around this type of thing, so I would
    welcome the opportunity to see the study and piece of work that
    you are articulating.
        Mr. Guthrie. OK. My understanding, it has been submitted, a
    letter from these 18 employers, but we will make sure that that
    is----
        Secretary Burwell. OK.
        Mr. Guthrie. Well, thank you, Mr. Chairman. I yield back.
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    gentlelady from Illinois, Ms. Schakowsky, 5 minutes for
    questions.
        Ms. Schakowsky. Thank you, Mr. Chairman, and thank you,
    Madam Secretary, for being here today. I wanted to ask you if
    you are aware of any Republican legislative proposal that would
    keep insurance companies from denying coverage from people with
    pre-existing conditions, like cancer, or dropping someone from
    coverage because they got in an accident, or got sick?
        Secretary Burwell. I am not aware of a piece----
        Ms. Schakowsky. That is right.
        Secretary Burwell [continuing]. Of legislation that would
    take care of that issue.
        Ms. Schakowsky. And are you aware of any Republican
    legislative proposal that would provide access to preventive
    services, like cancer screenings, yearly wellness exams, and do
    that at no additional out of pocket cost to consumers?
        Secretary Burwell. I am not aware of a piece of legislation
    that would do that in the way that the ACA does.
        Ms. Schakowsky. Thank you. I wanted to talk a little bit
    about something that is a growing concern, and that is
    Alzheimer's disease, and the cost that it is in personal lives,
    and also in funding. So scores of public agencies, including
    many HHS agencies, as well as numerous private and non-profit
    organizations, are trying to address this challenge of
    preventing Alzheimer's, serving those who have dementia today,
    finding a cure. Shouldn't the Federal Government be
    coordinating a plan on Alzheimer's?
        Secretary Burwell. In terms of the issue of coordination,
    there is a body, an advisory group, that includes both people
    from the Federal Government, as well as external folks, to be a
    part of putting together our thoughts and strategies, and it
    has informed the way that we are doing investments. There are
    members of the Federal Government across the government, as
    well as external bodies that are a part of that.
        With regard to the work at the Department, the work cuts
    across a number of different areas. NIH and research is
    generally what comes to mind for most people, but where the
    biggest dollars are spent is actually in CMS, and making sure
    that we are thinking through the issues in that space, because
    that is where the dollars--the other thing is the
    Administration for Community Living is where we work on and
    think about things like those that are caregivers, and those
    that are going through that process of dementia, and how they
    deal with it. So at the Department we work through all of
    those. There is this overall advisory group that we have
    externally, and includes internal members.
        Ms. Schakowsky. So the population is aging rapidly,
    obviously, and Alzheimer's is taking a much bigger toll than
    ever on families, on health care systems, on people who have
    the disease, and the number of people living with dementia will
    continue to grow as baby boomers age. So you had mentioned the
    research that is going on, so what is HHS, NIH doing to find a
    cure?
        Secretary Burwell. So in this budget you see a 24 percent
    increase to funding for Alzheimer's, which is much greater than
    the percentage increase even within the other NIH, so focusing
    deeply on doing that. It is also part of the BRAIN Initiative,
    as we think through their specific issues. But we are also
    making progress on something called TAL, which is a protein
    that is indicative of Alzheimer's. That is one of the pieces of
    research that is going on, and if we can make progress there--
    the other piece of research is seeing if there are ways that we
    can slow the progression by understanding how the neural
    channels move, and what is happening in the disease. Those are
    pieces of research that we are starting, we believe that, with
    the funding we are asking for, that we can move that research--
    we can broaden it, and we can make it faster.
        Ms. Schakowsky. So dementia is a major focus of work in the
    United Kingdom and other developed countries. Are we keeping up
    with the rest of the world in research activities and
    investments?
        Secretary Burwell. You know, we believe that we are, with
    regard to that, and I have been in touch with my colleagues and
    the secretary--or the minister in the U.K., and continue to
    have those conversations. So we make sure that we are leaning,
    and staying connected to our colleagues, especially that
    particular example, where I have been in touch with Mr. Hunt,
    and will continue to do that so that we make sure that we are
    learning everything we can from our colleagues. And in places
    where we can work together, see if we can leverage the efforts
    that are going on in each of our countries. And that is both
    across the research, the regulation, as well as the more social
    issues.
        Ms. Schakowsky. And who is on the Alzheimer's Advisory
    Committee? I am asking that because shouldn't there be a person
    with Alzheimer's as part of the group?
        Secretary Burwell. I want to get back to you directly, but
    it is my understanding that there is a person, that there is a
    slot, and that either there is or will be a person that does
    have that is part of the committee. I will want to get back to
    you on that, though, specifically.
        Ms. Schakowsky. Well, I want to thank you for the focus,
    and, as the coach here of the Seniors Task Force of the
    Democratic Caucus, I really want to work with you on that,
    because this is a problem affecting so many families and
    individuals. I appreciate it, and yield back.
        Secretary Burwell. Thank you.
        Mr. Pitts. Chair thanks the gentlelady. Now recognize the
    gentleman from Kentucky, Mr. Whitfield, 5 minutes for
    questions.
        Mr. Whitfield. Thank you. Well, Secretary Burwell, I also
    want to thank you for being with us today, and I want to just
    follow up on my colleague Brett Guthrie's question. We are
    concerned about this cost sharing program because it is $170-
    some billion dollars over a number of years, and we understand
    that that is one of the issues involved in the lawsuit. But all
    we are asking you is, since you all are dispersing the money,
    what is your opinion as to where the appropriation is
    designated that you are working from?
        Secretary Burwell. This is an issue--as I said, I
    understand the question. We believe we have the authorities.
    With regard to the specifics of that, because we are in
    litigation----
        Mr. Whitfield. But you can't tell us where the money is
    coming from?
        Secretary Burwell. With regard to having that conversation,
    that is what the----
        Mr. Whitfield. Were you instructed by DOJ not to answer
    that question?
        Secretary Burwell. With regard to that specific issue, that
    is at the root of the litigation.
        Mr. Whitfield. Were you instructed by DOJ not to answer the
    question?
        Secretary Burwell. With regard to--when there are issues of
    litigation like this, our standard----
        Mr. Whitfield. Well, yesterday we had Gina McCarthy here,
    and we were talking about 111(d), which is before the Supreme
    Court right now, and she gave us her theory of why she thought
    she was right. We are not saying that we are right or you are
    right, we are simply asking what is your theory? Where does the
    money come from, in your view?
        Secretary Burwell. That is something, as I said--why don't
    I work to get back to you on where we feel comfortable----
        Mr. Whitfield. OK.
        Secretary Burwell [continuing]. With regard to where the
    litigation is, and I would like to come back on that.
        Mr. Whitfield. Well, I must say, I have been impressed with
    your facility to use numbers. You are really tuned into the
    budget, responding to Mr. Pitts, responding to Mr. Green about
    the community health centers. I was at a Rotary Club meeting
    recently----
        Secretary Burwell. Yes.
        Mr. Whitfield [continuing]. And I was asked the question--
    they said, Congressman, can you tell us what dollar amount has
    been incurred by the Federal Government as a result of state
    expansion of Medicaid programs pursuant to the Affordable Care
    Act? Because we picked up a larger percentage of the normal
    cost.
        Secretary Burwell. Yes.
        Mr. Whitfield. And I would ask you that question. I didn't
    know the answer, but could you tell me what is the total dollar
    amount incurred by the Federal Government by the expansion of
    the state Medicaid programs as a result of the Affordable Care
    Act?
        Secretary Burwell. In terms of the Federal dollars versus
    the state dollars?
        Mr. Whitfield. Yes, just the additional dollar----
        Secretary Burwell. Yes, I----
        Mr. Whitfield [continuing]. Amount incurred by us.
        Secretary Burwell. Let me go back and look, because the
    question of being able to disaggregate whether a person came in
    because of expansion, or were under the old rules, I think--I
    would want to make sure that we could----
        Mr. Whitfield. But you don't have a dollar amount for that?
        Secretary Burwell. I don't know. I will check with the
    Department if we do. The one thing that I think we----
        Mr. Whitfield. You would think that you all would
    definitely know that--we can all talk about the advantages and
    disadvantages of this program, but there is a big additional
    cost to the Federal Government, and I am asking what is that
    total dollar amount incurred?
        Secretary Burwell. I think the question that I am not sure
    is how one breaks out the actual number from expansion. Because
    when people come through----
        Mr. Whitfield. Well, let me ask you this question----
        Secretary Burwell [continuing]. That is where----
        Mr. Whitfield [continuing]. At what year does--the states
    were encouraged to expand Medicaid, which is fine, because the
    Federal Government is picking up more of that dollar amount.
        Secretary Burwell. Yes.
        Mr. Whitfield. But at some point in the future the Federal
    Government is not going to be picking up those additional
    costs. What year is that?
        Secretary Burwell. What year that is is--the Federal
    Government never goes below a 90 percent of the payment of the
    additional, and that is----
        Mr. Whitfield. Until when?
        Secretary Burwell [continuing]. 2020 is----
        Mr. Whitfield. 2020?
        Secretary Burwell. And so 2016 is the year through which
    there is 100 percent.
        Mr. Whitfield. OK.
        Secretary Burwell. And in your own state----
        Mr. Whitfield. Well, do you have any projected cost over
    that period of time for the Federal----
        Secretary Burwell. We do have those incorporated in our
    budget. But one of the things, in terms of these cost issues,
    that I think are important in the State of Kentucky----
        Mr. Whitfield. OK. Well, that is OK. Listen, you can't
    answer the question, but I appreciate it anyway. Let me ask you
    this. I noticed that you all made $2.5 billion in loans in the
    co-ops, and Kentucky has a good co-op program as well. We sent
    a letter last year, and we were concerned about the solvency of
    some of these co-ops. And the Federal Government, as I said,
    has loaned $2.5 billion. We now see that in Iowa and Nebraska,
    those co-ops are in bankruptcy. Have you all done any analysis
    to project--are there other states that there is a chance that
    these co-ops will go into bankruptcy? Are you looking at that?
        Secretary Burwell. We are looking at the co-ops. The one
    thing I think is very important to note is the cuts, the deep
    cuts in the funding for co-ops. When the program was originally
    designed, and the passage of the Affordable Care Act occurred,
    the amount of money for the co-ops to do the loans, and the
    loans that states like Iowa felt would have made a difference,
    at the end, because those monies were cut, they were cut as
    part of sequestration. They were cut in '12, they were cut in
    '11, they were cut in '13.
        Mr. Whitfield. So are you saying the bankruptcy occurred
    because of sequestration?
        Secretary Burwell. What I am saying is that, had we had
    more funding in order to provide the additional loans to the
    co-ops, it could have made a difference. With regard to the
    fundamental of your question, which was are we looking at the
    co-ops? And there are two things that we want to do, understand
    whether they are stable, and then the second is where we can
    provide technical assistance.
        Mr. Whitfield. Well, those questions that you couldn't
    answer, or were not familiar with, I do hope that you will get
    back with us with those answers soon.
        Secretary Burwell. Be happy----
        Mr. Whitfield. Within 7 days, if possible. Thank you.
        Secretary Burwell. I will----
        Mr. Whitfield. Thank you.
        Secretary Burwell [continuing]. Want to make sure that--we
    will get back as quickly as----
        Mr. Whitfield. Because I have got to be back at that Rotary
    Club next week.
        Secretary Burwell. As a neighboring state, I appreciate
    that.
        Mr. Pitts. Gentleman yields back. Chair recognizes
    gentlelady from Florida, Ms. Castor, 5 minutes.
        Ms. Castor. Thank you, Mr. Chairman. Madam Secretary, thank
    you again on behalf of the 1.6 million Floridians that were
    able to buy affordable health insurance in our exchange. I will
    give you due credit, and everyone at HHS, but I think the real
    credit goes to our terrific navigators that were on the ground,
    hospitals across the State of Florida, community health
    centers, and family members that probably put in a good word
    for their sons and daughters, or aunts and uncles, to sign up.
    You probably want to give them a pat on the back yourself this
    morning. I encourage you to do that.
        Secretary Burwell. I do. I want to express appreciation. I
    have seen the local stakeholders, and met with them across this
    country, and it was the communities coming together, it was
    individuals, it was people in the community health centers, as
    was mentioned, it was the businesspeople, it was everyone. When
    I would visit, the hospitals would be there, everyone would be
    around the table working on this issue together, and it was
    that kind of work--and then the individuals that I visited----
        Ms. Castor. OK.
        Secretary Burwell [continuing]. On Second Sunday in Texas--
    actually was given the opportunity to speak at one of the
    churches. And it was all of that coming together to give this
    information to people so that they could make choices, and have
    that financial and health security.
        Ms. Castor. So, in Florida, we have a very competitive
    marketplace as well. Consumers could choose from 14 different
    issuers in the marketplace this year. That was up from last
    year, where we had 11. And Florida consumers could choose from
    an average of 42 health plans in their county for 2015
    coverage.
        So with 1.6 million now enrolled, it really demonstrates
    the high stakes involved with the Supreme Court case that the
    Court will hear next week. I cannot imagine that the Court
    would rule to take that away from over a million and a half
    Floridians, and then millions more all across the country. And
    just like Representative Engel said, I was here during the
    hearings in advance of the Affordable Care Act, the adoption,
    during the markup, during the amendment process, during
    negotiations with the United States Senate. Never in those
    discussions was there any dichotomy between a state exchange,
    and a Federal exchange, and the availability of tax credits.
    Have you seen any evidence to the contrary, in your review of
    the record, and the case that is before the Supreme Court?
        Secretary Burwell. With regard--I would let the Justice
    Department, who has reviewed everything--but the thing that I
    agree with is we we just don't believe that that is what the
    law says, or what was intended by the law either.
        Ms. Castor. Yes, and I can say straightforwardly, as a
    member of this committee, what the legislative intent was, and
    it was for those tax credits to be available to every American,
    no matter if they are in the state marketplace or a Federal
    marketplace. But I would say if the Court rules otherwise, they
    are going to create chaos, and they are going to strike right
    at the heart of the economic security of so many of my
    neighbors in Florida, and many Americans. So I know that they
    will study the legislative intent, and I hope they rule the
    right way, and we don't have the address that chaotic
    situation.
        But I think, with the Affordable Care Act, the real untold
    story is what has happened to people who have insurance,
    because I can cheer on the million and a half Floridians that
    now have it, but most of my neighbors already had insurance,
    private insurance or Medicare, and I noticed some more good
    news that was announced this week for my neighbors that rely on
    Medicare. Just in Florida alone, Floridians have saved almost a
    billion dollars since 2010 because of the ACA's donut hole
    discount. Almost 350,000 beneficiaries saw savings in 2014, to
    the tune of about $300 million last year. The average discount
    per beneficiary was $884.
        Then, for private insurance--how come we haven't been able
    to get the word out on how much better an insurance policy is
    that a consumer can't be kicked off if they get sick? In
    Florida alone, over 200,000 young adults can stay on their
    parents' plan. Floridians have received millions of dollars in
    rebates because the law says, you have new rights and
    protections, and insurance companies cannot spend that money on
    profits. It has to go to--it can't spend the profits on
    salaries and excessive profits. It has to go to health care.
    What else can the administration do to tell this good news
    story?
        Secretary Burwell. I think we can do a better job of making
    sure people do know. And another area is the issue of
    preventative care, and the importance of the fact that your
    childhood visits and those things are no longer--require co-
    pays or cost sharing, in terms of when you go in for that, or
    measles, an important thing, I think, right now, and a timely
    thing. And so I think we need to do a better job of making sure
    people know about those improvements to quality.
        Ms. Castor. Thank you. I yield back.
        Mr. Pitts. Chair thanks the gentlelady. Now recognize the
    gentleman from Illinois, Mr. Shimkus, 5 minutes for questions.
        Mr. Shimkus. Thank you. Secretary Burwell, thank you. I
    talked to your staff prior. I appreciate your outreach, trying
    to call. It was a crazy day, and I talked to them before you--
    --
        Secretary Burwell. Thank you.
        Mr. Shimkus [continuing]. Came to the table. And I do have
    great respect for that. But I also want to make sure that, you
    know, this happy clap talk about how great health care is, and
    the Affordable Care Act, is moderated by real concerns out
    there.
        Remember, the bill that passed, signed into law, we had
    nothing to do with on the House side. It was a Senate health
    bill that came over to us that we passed, all right? So that is
    the health care law that we have today, and the language of the
    law is pretty clear, and I am concerned also that the Supreme
    Court will rule that the Federal exchanges and states are not
    authorized to receive subsidies, and we need to be prepared for
    that here, and I would hope the Administration would be too.
        I promised two ladies from my Congressional district that I
    would mention their names. Angie Esker from Teutopolis, who is
    pro-life, a strong family, and she cannot buy a policy that
    does not have abortion coverage. And for millions of Americans,
    this is a really important issue, and she--this is an
    emotional--just like on the other side, you know how this
    debate is.
        Secretary Burwell. Yes.
        Mr. Shimkus. And I think part of the agreement from some of
    my pro-life Democrats was to ensure that that option would be
    available----
        Secretary Burwell. Yes.
        Mr. Shimkus [continuing]. And it is just not for her. The
    other one is Debbie McKinney-Huff from a town called Highland.
    She is a Democrat. Her premiums went up astronomically last
    year. This year they have gone up another $2,000, with a
    $10,000 deductible, and she can't afford it. So for all the
    happy dances, there are challenges out there that--we don't do
    our constituents service if we don't understand that there are
    problems that have to be resolved. There are some budget
    requests that I want to talk about, so I am going to move
    forward, but I just put that in the record.
        I am a big supporter of Medicare Advantage. I was here when
    we passed it. Seniors didn't have any prescription drug
    coverage. It has been very successful, it is very popular. The
    budget request makes a reduction again in that, where the
    enrollment is going up, favorable are high, and 670,000 people
    weren't able to access Medicaid Advantage. And if you are from
    rural parts of this country, that option is very limited, or it
    doesn't exist. So I would ask that we look at that, so that
    seniors who want to have this option can choose that. And our
    concern is your budget hurts the ability for that to happen.
        Secretary Burwell. So with regard to the first issue, in
    terms of your two constituents, want to make sure we understand
    that. On the issue of the question of abortion, and that----
        Mr. Shimkus. Well, let us just answer this question,
    because I have got to keep more on budget----
        Secretary Burwell [continuing]. Medicare Advantage issue.
        Mr. Shimkus. Thank you.
        Secretary Burwell. With regard to that, we want to make
    sure--the program during the period of changes that we have
    had, we have seen a large increase in the number of people in
    Medicare Advantage plans. I want to understand your 670,
    because 99 percent of beneficiaries have access to MA plans,
    and there may be something, and so I would like to understand
    that 670 better.
        The third thing is that we know that those number of plans
    quality that have gone from four stars to the higher ratings,
    we have offered 67 percent in the two highest rating
    categories, 17 percent to 67 percent, so we are improving
    quality. More people are coming in the system, and there is
    premium control, so I want to understand the 670. We want to
    make sure, and are listening. We alter our plans as we hear
    concerns. That is why I want to understand that 670, because we
    believe that we can continue making these changes. It comes
    back to some of the points the Chairman raised with regard to
    deficits, and making sure that----
        Mr. Shimkus. OK.
        Secretary Burwell [continuing]. We are being responsible.
    MedPAC and the GAO have recommended that there is upcoding, and
    we need to work on it.
        Mr. Shimkus. OK. Thank you. Are you aware of any efforts by
    FDA to accelerate the next round of user fee negotiations? And
    our concern is, if they are, and they are not doing due
    diligence about the fees and the return on investment, we would
    hope that they would not accelerate it until due diligence is
    done.
        And the last thing I wanted to address was the Biologics
    Price Competition and Innovation Act. Stakeholders have to be
    involved in that. That is really part of the 21st Century Cures
    debate, not just having bureaucrats or panels, but bringing
    patients, bringing physicians, bringing in alike--and our
    concern is that is not happening on this--on the Biologics
    Price Competition and Innovation Act, and those concerns.
        So if you would take that for suggestions, and if you want
    to come back and follow up on a lot of these issues, we would
    be happy to talk with you again. I do appreciate you reaching
    out personally, and I look forward to working with you.
        Secretary Burwell. I do appreciate this issue of
    stakeholder input. We think it is important to making sure we
    get this right.
        Mr. Shimkus. Thank you very much.
        Mr. Pitts. Chair thanks the gentleman. Chair now recognizes
    gentlelady from California, Ms. Matsui, for 5 minutes for
    questions.
        Ms. Matsui. Thank you, Mr. Chairman. Secretary Burwell,
    thank you for being here. I want to talk about mental health.
    When we think about health, we need to consider the whole
    person. Mental health has historically taken a back seat to
    physical health, but the head is connected to the body, and one
    affects the other.
        I have been working for years with my colleagues on both
    sides of the aisle, and both sides of the Capitol, to make
    changes to fix our broken mental health system. And as you
    know, a demonstration project based on the Excellence in Mental
    Health Act, that I co-authored with my colleague here,
    Congressman Lance, into law last year, and I look forward to
    working with you and the Administrator to make sure this is
    implemented properly, and in a way that states can demonstrate
    success.
        I also look forward to working with you to make further
    changes and improve our mental health system. I was pleased to
    see that the budget will eliminate Medicare's 190 day mental
    health services more in line--and keep that more in line with
    physical, for which no limit exists. Can you briefly talk about
    that policy, and how it would benefit seniors and people with
    disabilities who need psychiatric services?
        Secretary Burwell. Our overall approach in the mental
    health space, and it is one that we consider a priority, is to
    try and get, in terms of both care and payment, to parity with
    how we think about other health issues. And there are steps
    that we are taking throughout the budget, and whether it is the
    implementation of the piece of legislation that you referred
    to, and the issue that your colleague just raised about
    stakeholder engagement, and making sure we are getting that
    input as we implement. So we are implementing, and thinking
    about the policies to promote behavioral and mental health
    through our payment system, and making sure that there is
    parity. That seems to be something that is been important.
        We are trying to focus on access, because many people--the
    question of access to the right types of providers, in terms of
    behavioral health, that is something you see in some of our now
    is the time budgeting work, in terms of making sure that SAMSA
    and others are ensuring that we have providers. And then there
    is access, and that is an issue for all people of all ages, but
    especially young people getting the access that they need.
        So as we think about all the pieces working together, about
    the funding, about the access, and then that there are
    providers that can provide.
        Ms. Matsui. I appreciate that, and as we move forward,
    there is a continuum of mental health issues that we need to
    address. And it is a complicated issue, and we would certainly
    like to work with you as we move forward on that.
        And now I would also like to talk about seniors, because
    that is a special interest area of mine too. And, as we
    consider changes to the Medicare program, our first priority
    should always be seniors, especially knowing that seniors spend
    about 14 percent of their household income on health care
    costs, compared to five percent--households who do not have a
    Medicare beneficiary. And we need to find ways to save money in
    the Medicare program, and we have been, but not by cutting
    benefits, but by re-aligning incentives to improve outcomes in
    patient care. If a senior gets the right care at the right
    time, it is not only better for the senior, but also saves the
    system a lot of money.
        Now, I appreciate some of the provisions in the budget, and
    I would like to discuss these further with you. The budget
    seeks to save money by restoring drug rebates for the dual-
    eligible population on Medicare. Secretary Burwell, can you
    please elaborate on that?
        Secretary Burwell. In terms of the dual-eligible----
        Ms. Matsui. Yes, right. The drug rebates for dual-eligible
    population.
        Secretary Burwell. One of the things that--the dual-
    eligible population has two elements to it. Is both a very
    complicated population----
        Ms. Matsui. Yes.
        Secretary Burwell [continuing]. Because they are people who
    have a number of different conditions that are being treated in
    different ways. It is also a very expensive population. And as
    we work to improve both the quality and affordability of the
    care, that is what we are trying to do, as we look at these
    proposals. And it is all a part of the broader issue of
    delivery system reform, which you touched on a little bit, and
    we have set out clear goals.
        For the first time ever we have said that in the area of
    Medicare, that by 2016 we have set a goal that 30 percent of
    all payments will be in different payment systems, where we are
    not paying for volume, but paying for value. And as a part of--
    we move forward to this change system, we want to do that. That
    is about price, but it is also about quality, and this is a
    proposal that we are trying to move forward on both.
        Ms. Matsui. And I know that this is going to be difficult
    because there are areas where you have to look at the budget,
    but as we look at this, we have to also look at the seniors.
    And that is really why, when we look at this--I know you seek
    to increase the skin in the game for Medicare beneficiaries,
    however, I would argue that seniors already have a lot skin in
    the game, and Medicare, and the additional cost sharing, will
    not bring down costs in the program.
        And as you know, as they have increased costs, you look
    at--most of them are supported by Social Security, and then
    that--what they do is shift over the costs to pay for their
    health care from Social Security. So I think it is something we
    really have to look at more holistically. So thank you very
    much for everything that you are doing.
        Secretary Burwell. Thank you.
        Ms. Matsui. Yield back.
        Mr. Pitts. Chair thanks the gentlelady, now recognizes the
    gentleman from Pennsylvania, Dr. Murphy, 5 minutes for
    questions.
        Mr. Murphy. Welcome here, Madam Secretary. We appreciate
    you being here. I also want to associate myself with the
    comments of my friend, Ms. Matsui of California, about mental
    health, and look forward to working with you on those things.
        In a related area, we have had a number of hearings here
    regarding mental health, and among them has been the Substance
    Abuse and Mental Health Service Administration. We have asked
    them repeatedly for information over almost a year for getting
    some records. Chairman Upton and I have asked for these things.
    We have not gotten those documents, and we are concerned about
    their delays. I wonder if you could help us get some assurance
    that we will get those documents from SAMSA?
        Secretary Burwell. As you and I had the opportunity to
    discuss, this is something that we are working on, and I am
    hopeful that very soon you will have some of those documents,
    and we will continue to work with you on it.
        Mr. Murphy. Thank you. I appreciate your teamwork on this.
    On another question, when we passed the SGR patch, I think it
    was last year, there was also a demo project, which is what Ms.
    Matsui was also referring to, for certified community
    behavioral health clinics to improve access.
        Secretary Burwell. Yes.
        Mr. Murphy. Now, as part of this, we also attached
    something for AOT, assisted outpatient treatment, for counties
    and communities to also have access to some grants to
    facilitate that, as long as they also were--so those community
    behavioral health clinics would get those--to also help for
    those who are cycling through with histories of violence,
    prison, homelessness, et cetera. That small one percent of one
    percent that are persistent chronically mentally ill going
    through the system.
        One of the things I want to make sure and find out from you
    is--the way this was designed is to make sure that only those
    counties who really have AOT would be eligible for those grant
    programs, if they are going to attach those to those community
    health centers. Is that something you are aware of, and can you
    work with us to make sure that those grant programs are
    available in that sense?
        Secretary Burwell. We do want to work with you on that, and
    yes, we are working on that, and would like to work with you to
    make sure that we do have those standards in----
        Mr. Murphy. Thank you. Another one has to do with a program
    that was discussed by SAMSA which is called iCare, which is to
    help with those going into emergency rooms----
        Secretary Burwell. Yes.
        Mr. Murphy [continuing]. To deal with those in crisis. One
    of the concerns I have, and certainly we have seen headlines,
    some tragic, sad cases, such as that with the Virginia Senator,
    Creigh Deeds, his son Gus. The problem is that there are
    thousands this occurs in this country every year, where there
    just simply aren't enough psychiatric hospital beds, and so
    people languish in emergency rooms, often in a five point tie-
    down, and given chemical sedatives until a room opens up. It
    could be hours, or days, or weeks, in some cases. We wouldn't
    have this problem if we had more psych beds.
        And so I am hoping that, since the demand for psychiatric
    beds exceeds the current supply of inpatient psychiatric beds,
    that is something else you can work with us in legislation to
    say, we ought to have a place for those in crisis to get
    stabilized, not go to jail, not sit in a jail cell and languish
    there, or sit in an emergency room, but work with us on that.
    Would you be willing to work with us on that too?
        Secretary Burwell. Yes, looking----
        Mr. Murphy. Thank you.
        Secretary Burwell [continuing]. Forward to that.
        Mr. Murphy. And another issue, then, related to the
    assisted outpatient treatment grant program as a stand-alone
    thing, I want to show you--I think I have a poster here of--I
    just want to show you some of the outcome measures. This comes
    out of a Duke University study.
        Secretary Burwell. Yes.
        Mr. Murphy. And when you have assisted outpatient
    treatment, so working with someone from the court, or judge,
    working with a person, saying, you need to stay in treatment
    for a number of months, outpatient treatment, not inpatient,
    take your medication, see this person to report back, like with
    the mental health court or something, they saw an 87 percent
    reduction in incarcerations, an 83 percent reduction in
    arrests, 77 percent reduction in psychiatric inpatient
    hospitalizations, and a 33 percent reduction in ER
    hospitalizations. So I just want to show you that too. And, by
    the way, the costs are cut in half for these folks too.
        But there is one that--in working with the issues of CBO
    scoring, et cetera, we are really going to have to, I think,
    team up together on this, and say there ought to be some
    options for people to be in outpatient care. And this is
    psychiatry, psychology, peer support, social workers, people
    helping with job training, housing, all those things together,
    but there has to be this coordination of programs. You will
    work with us on this too?
        Secretary Burwell. Well--and I think it is part of the
    broader issue of delivery system reform, and how we deliver
    quality. You are focused in a very important area, in mental
    health. When we look at diabetes, in the clinics that I have
    visited across the country, when we get these adherence numbers
    up, and people participating, and that usually has to do with
    coordinated care, and the type of interaction and communication
    you are talking about, we get adherence, we get less of the
    disease or problem, and we get lower costs because the things
    that happen when we have the bad things that go wrong when
    people aren't adhering.
        Mr. Murphy. Yes, it is going to require that different view
    of some things. And I think you may be familiar with the
    hearing we had in the Oversight Committee 2 weeks ago, where a
    GAO report identified--I was amazed by this--112 Federal
    agencies and programs, scattered across eight departments, that
    deal with mental illness. They said the interagency
    coordination program supporting individuals with serious mental
    illness is lacking. It was, to me, a really dizzying and sad
    description of the process here. I hope you will also work with
    us as we work to coordinate those programs. And can I have that
    assurance from you as well?
        Secretary Burwell. We will, and we do coordinate. We
    coordinate them across the overarching issue, and then within
    their areas, like veterans' homelessness, and the issues that
    relate. And so I want to have the conversation about how we
    think about where we can strengthen those things.
        Mr. Murphy. Thank you. Let us continue work with that.
    Thank you, Mr. Chairman. I yield back.
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    gentleman from Oregon, Mr. Schrader, 5 minutes for questions.
        Mr. Schrader. Thank you, Mr. Chairman. Thank you for being
    here, Madam Secretary.
        Secretary Burwell. Thank you.
        Mr. Schrader. Last year health care spending grew at the
    slowest rate on record since 1960. Health care price inflation
    is at its lowest rate in 50 years, and the ACA's gotten a lot
    of attribution by CBO for making a big difference in that
    result. Have you seen Republican legislative language that
    would give us that same result?
        Secretary Burwell. We haven't seen a proposal that would
    continue us on our path with regard to some of the changes we
    have put in place.
        Mr. Schrader. Seniors have also benefitted dramatically
    from the ACA. Prescription drug costs are a big issue for them.
        Secretary Burwell. Yes.
        Mr. Schrader. Over eight million seniors have actually
    benefitted from, and saved, over $11 billion, as I understand
    it, on prescription drugs since the enactment of the ACA. Is
    there a Republican proposal out there that does a similar
    thing?
        Secretary Burwell. We haven't seen a proposal that would
    take care of this issue, the donut hole. And, actually, on
    Tuesday we actually were able to update our numbers in that
    space, and it is now $15 billion in terms of the savings. And
    on average in the country, that is about $1,600 per----
        Mr. Schrader. I find that ironic, that my colleagues on the
    other side of the aisle keep asking for a contingency plan from
    the Administration on this bogus lawsuit, and yet, as a firm
    believer in Article I, legislative supremacy, with all due
    respect, Madam Secretary, I think it is our responsibility, and
    the majority party controls both chambers, where the heck is
    their contingency plan? That is a rhetorical question, Madam
    Secretary.
        One of the things that has been really good, I think, in my
    state is the expansion of the Affordable Care Act into the
    Medicaid population and into the private sector. We have had
    some unqualified success. Emergency room visits are down, like,
    21 percent. We have actually gotten hospital admissions,
    complications from diabetes alone down nine percent, not to
    mention other diseases. COPD, Chronic Obstructive Pulmonary
    Disease, hospital stays down almost 50 percent. Are you getting
    any of the same--those same type of results from other states?
    What--could you----
        Secretary Burwell. So we are, and recently, actually, in
    the last 2 weeks, out of the State of Kentucky, we have seen a
    piece of analysis done by the University of Louisville in
    Deloitte, and that piece of analysis showed they did it at the
    beginning of the expansion, and then they did the analysis now.
    And what the analysis showed is that the expansion will
    contribute to 40,000 jobs in the State of Kentucky, and will
    contribute to their GDP by $30 billion. And that is the period
    to 2021, so that is over a period of time. But we are starting
    to see both the economic and job impacts, as well as some of
    the health impacts that you were describing.
        Mr. Schrader. Well, contrary to popular demagoguery on
    right-wing radio and TV, this is a marketplace system we set
    up. Federal Government is the facilitator in that. The state--
    some of the state exchanges are a facilitator. Like everyone, I
    think, here, we all believe in the power of marketplace
    competition. My own state, for instance, over the last year,
    instead of seeing the double digit increases in insurance
    premiums on average, ours actually stayed level, or decreased
    slightly.
        That, to me, is a key indicator for the working or non-
    working of the Affordable Care Act. Our uninsured rate in
    Oregon went down 63 percent. I have had testimonials from
    hospitals and doctors about how people actually have health
    care access at this point in time. Could you talk about what
    you see nationally in increased competition----
        Secretary Burwell. So with regard to the issue of increased
    competition, we saw 25 percent more issuers come into the
    marketplace this year, and so more issuers means more plans and
    competition.
        Mr. Schrader. They wouldn't be doing this if they weren't
    making some money at this, and the program wasn't working,
    Madam Secretary.
        Secretary Burwell. And so--and also, with regard to the
    issue of competition, what we know is, in many plans that are
    employer-based plans, people do not come in and shop. They just
    automatically re-enroll. And, as you know, we had that as part
    of the marketplace this year. But we know that, actually, the
    majority of people came in and shopped. And that, I think, is
    related to the competition, and it is related to a consumer who
    wants to make the best choice. And that choice, sometimes based
    on benefit, that choice sometimes based on cost, and cost has a
    number of different elements, whether that is premium or
    deductible.
        Mr. Schrader. Correct.
        Secretary Burwell. So we are seeing more players come in,
    and we are also seeing the consumer behave in a way that is
    indicative that they want that competition and shopping.
        Mr. Schrader. I would like to call out some kudos on the
    GME increase in the budget, the money you put in for Medicare
    appeals. Back home we do a lot of work, of course, with people
    that are having trouble navigating the system big time, and the
    investment in primary care docs. I think that is important.
        Quick little comment, the only thing I am a little
    concerned about is if we are going for bundled payments and
    increased competition, why we are hammering on the Medicare
    Advantage plans a little bit?
        Secretary Burwell. As I mentioned to your colleague, I
    think what we are trying to do is balance, making sure that
    those plans are good and strong, and we have seen that over the
    period of the changes we have done. We try and do the changes
    in a measured way that gets to things that actually have to do
    with what we believe is strong representation of the taxpayer,
    in terms of places where we believe there are issues, like up-
    coding, that is occurring, and that MedPAC has articulated
    those, and others. We always want to listen and hear, and we
    want to watch carefully if we are seeing problems that occur
    with the changes, and to date, we haven't.
        Mr. Schrader. Thank you, and I yield back.
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    gentleman from New Jersey, Mr. Lance, 5 minutes for questions.
        Mr. Lance. Thank you, Mr. Chairman. Madam Secretary,
    regarding King vs. Burwell, I understand what you have said,
    that there can be no administrative action should the Plaintiff
    win the case. You have stated that explicitly, and repeatedly,
    and that this not my question. My question relates back to the
    Chairman, who said in his opening line of questioning, that we
    have a specific source within your department that there is a
    document related to what HHS might do, should the Supreme Court
    rule against the Administration. I understand that your point
    of view is that there can be no administrative action. You have
    stated that explicitly. Are you aware of any such document? And
    I am not asking you about your position on administrative
    action. I am asking about a document in this regard.
        Secretary Burwell. Congressman, if there is this document,
    and you know of it, I would certainly like to know of the
    document, because I don't have knowledge of a 100 page----
        Mr. Lance. I didn't say 100 page, now did I?
        Secretary Burwell. Sorry.
        Mr. Lance. I just said a document.
        Secretary Burwell [continuing]. Chairman----
        Mr. Lance. I don't know how many pages it is. You are not
    aware of any document?
        Secretary Burwell. As I have said, there isn't
    administrative action----
        Mr. Lance. Yes, I have made that clear that I understand
    your point of view on that. Is there a document as to a
    reaction from HHS should the case be won by the Plaintiff in
    the Supreme Court?
        Secretary Burwell. With regard to a reaction, as I said--
    because I have articulated that--I want to be careful, because
    I have articulated----
        Mr. Lance. As I have tried to be careful.
        Secretary Burwell [continuing]. The problems with regard to
    the question of what will happen, we know how many people are
    in the marketplace, how many----
        Mr. Lance. Yes. That is filibustering. I understand that. I
    am asking whether there is any document, we have a source
    indicating there is a document, as to what might be the
    response from HHS?
        Secretary Burwell. I am not familiar with the document you
    are referring to.
        Mr. Lance. And let me say that a former CMS administrator,
    Tom Scully of, I believe, the Bush Administration has said, of
    course they have a document. He said, of course they have one,
    I think he referred to a document, they should all resign if
    they don't. I would hope that your department, Madam Secretary,
    would have some sort of contingency plan should the Court rule
    for Plaintiff. Do you believe that the suit is bogus?
        Secretary Burwell. With regard to the lawsuit, as I said,
    what I believe is that the law is clear----
        Mr. Lance. Yes, I understand that. Do you believe the suit
    is bogus?
        Secretary Burwell. That is a characterization. I--my point
    about the suit is--what I believe is that we hold the right
    position, and that our position----
        Mr. Lance. Yes, I understand that, and it will be argued
    next week, and a decision will be made by the end of June.
    Formerly, when I asked questions about this, not from you, but
    regarding prior officials, there was the impression that it was
    a frivolous suit. Do you believe the suit is frivolous or
    bogus?
        Secretary Burwell. What I believe is that we should
    continue making progress for the American people on three
    things that the Affordable Care Act----
        Mr. Lance. Yes, I am aware of that. Do you believe the suit
    is----
        Secretary Burwell [continuing]. Access----
        Mr. Lance [continuing]. Frivolous or bogus?
        Secretary Burwell. May I finish, Congressman? I believe
    that we, as the Executive Branch and the Legislative Branch,
    should be working together on three things we agree with. That
    is affordability, access, and quality.
        Mr. Lance. I agree with all----
        Secretary Burwell. And what I would hope that we can do is
    build on the progress that we have seen. And that progress is
    that 11.4 million people----
        Mr. Lance. Reclaiming my time, do you believe that the
    Supreme Court is likely rule unanimously on this decision?
        Secretary Burwell. As I have indicated, we believe that the
    Court will rule in our favor.
        Mr. Lance. Yes. Do you believe the suit is bogus or
    frivolous?
        Secretary Burwell. With regard to characterization, what I
    think is valuable is that we believe that our position is the
    position that will stand, and that we believe we are right. The
    people in the State of New Jersey should not have their
    subsidies taken away because they do or don't have a
    marketplace, when people right across the border in New York
    will get those----
        Mr. Lance. I believe, Madam Secretary, in equal justice
    under law, as is inscribed across the street on the Supreme
    Court building. I believe this is a very serious case. I think
    it is closely contested. Under no circumstances do I believe
    that Plaintiff will win nine to nothing. I think there are good
    arguments on both sides. I have read the briefs, all of the
    briefs. I have read the Solicitor General's brief. I have read
    the brief of the Plaintiff. I think it is a very serious case,
    and you and I may disagree on the case. I respect that, and I
    understand that.
        It is frustrating to me that, here in Washington, there
    cannot be an intellectual argument as to pros and cons, and I
    certainly would encourage the Administration to have a
    contingency plan, and to work with us in Congress, including
    the Republican majority in both the House and the Senate,
    should the Court rule for Plaintiff. Thank you, Mr. Chairman.
        Secretary Burwell. Congressman, with regard to the question
    of our authorities, what you just ended with was the issue of
    the legislation, and I want to make sure that I touch on that.
    As we have said all along, we are willing, and look forward to
    working with the Congress on any legislation that would work on
    those three things we talked about, affordability, access, and
    quality, and preserves the economy, and supports working middle
    class. That is how we will look at legislation. We want to do
    that now, and we want to do that in any----
        Mr. Lance. And I was part of a group that had an
    alternative piece of legislation that didn't see the light of
    day put forth by the Tuesday lunch group, of whom I am a member
    of that group. It was different from the Affordable Care Act,
    but it was an alternative piece of legislation. Of course, it
    didn't see the light of day in any way, shape, or form in 2009
    and 2010. Thank you, Mr.----
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    gentleman from Massachusetts, Mr. Kennedy, 5 minutes for
    questions.
        Mr. Kennedy. Thank you very much, Mr. Chairman. Madam
    Secretary, thank you very much for being here. You touched on,
    a moment ago, about legislation that you said you were eager to
    work with Democrats and Republicans on. Have you seen any such
    legislation?
        Secretary Burwell. With regard to legislation that would
    promote and move forward on those three things, making sure we
    are expanding that insured population, have not seen things
    that would work toward that.
        Mr. Kennedy. Madam Secretary, are you aware of how many
    bills were passed and signed--or bills were passed by the 115th
    Congress?
        Secretary Burwell. I don't know the exact number.
        Mr. Kennedy. Give or take a few, 931, ballpark, sound about
    right? Any idea on how many of those bills were signed into
    law? 296 sound about right? Any idea how many times in my first
    term in Congress we repealed all or part of the Affordable Care
    Act? 55 sound about right? Any idea how many times those were
    signed into law? None.
        Secretary Burwell. None.
        Mr. Kennedy. Are you aware of how many times we voted on
    some sort of replacement bill to the Affordable Care Act, that
    we voted to repeal 55 times, to provide Americans with quality
    affordable access and financial assistance to access to health
    care that they deserve? None.
        Secretary Burwell. I think the number is none.
        Mr. Kennedy. OK. I would agree with you. So I think, given
    all of the discussion we have had over the course of the past
    several hours about contingencies, about other options, in the
    time that I have been in Congress, over 55 times in my first
    term, including another time in my second term, to repeal all
    or part of the Affordable Care Act, and under the time that I
    have been here under Republican leadership, to not have a
    single bill that has seen the House floor to vote on an
    alternative to provide quality, affordable, accessible health
    care to millions of Americans, I would respectfully ask, as my
    colleagues have, for the Administration to work with Democrats
    and Republicans to work on any such legislation, should they
    decide to bring that to the light of day.
        Secretary Burwell. And in our budget, I would just like to
    mention we actually do have a proposal to improve the small
    business provisions of the Affordable Care Act, to try and both
    simplify and make the tax credits better for small businesses.
    That is feedback we have received about that, and that is
    something that is included in our budget.
        Mr. Kennedy. Now, turning to a couple--well, hopefully more
    substantive questions that I can get to with you, Madam
    Secretary, I was pleased to see that the Democratic CHIP
    reauthorization bill, that the was included in the President's
    budget extended the Medicaid primary care payment increase. The
    rate of increase that was initially included in the ACA has
    been absolutely critical, and for the last 2 years, it has
    boosted payments to doctors who treat the most vulnerable
    populations, making access an attainable goal, not just an
    aspirational target.
        According to a recent report from the Urban Institute,
    however, the expiration of that payment bump at the end of last
    year will result in Medicaid provider payments that are going
    to be cut on average of 43 percent, and over 50 percent in some
    states. The impact on wait times could be drastic and
    immediate. I was hoping, Madam Secretary, you might be able to
    comment on the importance of parity between Medicare and
    Medicaid payment to our primary care providers, and when they
    have to choose between seeing some of most vulnerable
    populations like seniors, pregnant women, and children, why
    would there possibly be a reimbursement discrepancy?
        Secretary Burwell. So, I think, as you are indicating, why
    we have proposed the continuation of these payments is because
    we believe it is making a difference, and it is making a
    difference to the access and coverage that people are getting
    in the system. And so we have proposed it as a continuation,
    and we hope that that is something that the Congress will
    consider and support.
        Mr. Kennedy. Thank you. The second topic that I want to
    touch on today, actually, my colleague, Mr. Murphy, touched on
    it quite extensively in his comments, but it is about substance
    abuse and mental health. Back in Massachusetts, Madam
    Secretary, I see communities on the front lines of a growing
    and extraordinarily devastating opiate abuse crisis, and we are
    looking to the Federal Government for some support as
    prescription drug abuse, and a number of heroin overdoses,
    continue to mount.
        Madam Secretary, I was a prosecutor before I ran for
    office. I saw the impacts of this on a daily basis, not just in
    terms of addiction and people needing treatment, but in terms
    of property crimes, personal crimes for folks that are looking
    to try to find a way to get help, but the treatment options
    just aren't there. There are not enough doctors. There are not
    enough beds, as Mr. Murphy indicated. There are not enough
    wrap-around services. There are not enough care. And I was
    hoping that you might be able to touch on the importance of
    actually creating these incentives through Medicaid largely,
    which is our largest mental health provider, to actually make
    sure that--not just another grant program, but to make sure the
    incentives are in place to allow that marketplace to provide
    that care?
        Secretary Burwell. So the bad news is, as you indicate,
    there were 259 million prescriptions for painkillers, opioids,
    during 2012. That is more than one per adult in the Nation.
    That is the bad news. The good news is that I believe that
    there is bipartisan support for us to do something, and I
    believe that that is both in the Executive and Legislative
    Branch here in Washington, D.C., as well as with the governors,
    who I met with over the weekend on this issue.
        I think with regard to payment, it is an important place,
    but there are three fundamental things that we believe we need
    to work with the Congress and work with the governors to do.
    One is, in terms of the prescribing, that is at the root of
    much of the problem. We have seen progress in states like
    Florida, where they are watching the prescribing. The plans
    that states can put in place to oversee that is an important
    part, but we have a part two. Second is the issue of things
    like--and access to those, which I think gets to some of the
    payment issues. And the third is making sure there is medical
    treatment, and I think that was the third part of what you were
    mentioning. Those three elements, I think, is--that is a basic
    agreed upon.
        And whether it is Senator Portman and Senator Widen, or Mr.
    Rogers, or--it is across the board. There is bipartisan support
    because states from Massachusetts to Kentucky, and West
    Virginia, my own home state, are suffering in devastating ways.
    And the one piece you didn't mention, which is the economic
    impact. And, having come from a large employer like Walmart,
    what it means in terms of having an employee base that can pass
    a drug test.
        Mr. Kennedy. Thank you, Madam Secretary.
        Secretary Burwell. Thank you.
        Mr. Pitts. Chair thanks the gentleman. Chair will note that
    we have just been joined by a group of students from the
    Houston area. The Ranking Member has informed me--you want to
    say anything, Gene?
        Mr. Green. Mr. Chairman, I would just like to recognize a
    number of our chiropractic students from the Houston area, and
    Dr. Mossad, who actually retired as the president of our
    chiropractic college in Pasadena, Texas. And I invited them
    last night because I wanted to show how the health care policy
    is made in the health care subcommittee. Thank you, Mr. Chair.
        Mr. Pitts. Thank you. You are certainly welcome to be here.
    And the Chair now recognize the gentleman from Virginia, Mr.
    Griffith, 5 minutes for questions.
        Mr. Griffith. Thank you, Mr. Chairman, I appreciate that.
    Appreciate the students being here. We may have some
    disagreements today, but I will tell you that the Ranking
    Member, Mr. Green, and I worked very hard on a health care bill
    that was signed into law last year, so no matter what you may
    see today, we do get along more often than the press lets you
    know. All right.
        That being said, Madam Secretary, in response to a previous
    question, you indicated you weren't aware of any of the laws
    being signed in. I am sitting here with a CRS report,
    Congressional Research Service, indicating that there are 12
    bills that repealed parts of Obamacare that were, in fact,
    signed into law. You are not aware of that, is that correct, in
    relationship to your previous answer?
        Secretary Burwell. With regard to the specifics of the
    answer, those were repeal questions, I thought.
        Mr. Griffith. Yes, and this was part----
        Secretary Burwell. Full repeal.
        Mr. Griffith. He said----
        Secretary Burwell. Full repeal was----
        Mr. Griffith. He said full or a part. So you were mistaken,
    and weren't aware of these 12 that were partially repeals?
        Secretary Burwell. I was referring to the issue of full
    repeal.
        Mr. Griffith. But you are aware of these?
        Secretary Burwell. I would have to look and see----
        Mr. Griffith. OK. And if I could just have this entered
    into the record, I would appreciate----
        Mr. Pitts. Without objection, so ordered. \1\
    ---------------------------------------------------------------------------
        \1\ The report has been retained in committee files and is also
    available at http://docs.house.gov/meetings/if/if14/20150226/103028/
    hmtg-114-if14-20150226-sd008.pdf.
    ---------------------------------------------------------------------------
        Mr. Griffith. Thank you, Mr. Chair. Also, are you familiar
    with my H.R. 130?
        Secretary Burwell. Apologize, don't know what that bill is.
    Maybe if it is described I might----
        Mr. Griffith. And are you--it is a bill that deals with the
    black lung provisions of Obamacare.
        Secretary Burwell. I am not familiar with that----
        Mr. Griffith. I appreciate that. Are you----
        Secretary Burwell [continuing]. Legislation.
        Mr. Griffith [continuing]. Familiar with my H.R. 790, which
    is the Compassionate Freedom of Choice Act?
        Secretary Burwell. Not familiar with the specific names of
    the legislation----
        Mr. Griffith. And I appreciate that. And are you familiar
    with H.R. 793, which deals with preferred pharmacy networks and
    Part D?
        Secretary Burwell. Depending on a----
        Mr. Griffith. Another one of mine.
        Secretary Burwell [continuing]. Description, that may----
        Mr. Griffith. And so the reason I ask those questions is--
    been very well orchestrated today, from a political standpoint.
    The other side of the aisle has asked you repeatedly are you
    aware of Republican legislation that deals with the issues that
    we are dealing with related to Obamacare? I would submit to you
    that, in some way or another, the three points that you pointed
    out, each one of those bills did. You are not intimately
    familiar with them, and I understand that, and I am not blaming
    you, because you have been put into that unenviable position
    that sometimes happens, where there is a difference between
    negative evidence, and a lack of evidence. And what you
    presented today is a lack of evidence, and I appreciate that.
        That doesn't mean that these bills don't exist, just as I
    gave you the numbers on those three. It doesn't mean that there
    aren't other bills that other members have that are out there
    that are Republican proposals to take care of the American
    citizen while we are in the process of repealing Obamacare. And
    so you are just submitting that you are not aware of it, but
    there are, in fact, bills out there that may be doing that, and
    also further discussions behind the scenes that may be doing
    that that you are unaware of. Isn't that correct?
        Secretary Burwell. Would welcome--there was a veterans'
    bill that we all agreed on. The firefighters, I haven't----
        Mr. Griffith. I am just saying, though, that----
        Secretary Burwell [continuing]. Legislation----
        Mr. Griffith [continuing]. When you say, though, in the
    answer to any number of members on the other side of the aisle
    that you aren't aware, that doesn't mean they don't exist, it
    just means you are not aware, am I correct? Yes? All right, we
    will move on.
        The President's fiscal year 2016 budget calls for 92
    million for the Office of National Coordinator, ONC, for
    purposes including the transition to a governance approach for
    health information exchange. In 2012, an HHS request for
    information noted that Congressional authorities granted to the
    ONC in the 2009 High Tech Act would support this governance
    mechanism. Madam Secretary, I hold in my hand a copy of a
    Congressional Research Report dated January 7, 2015 that
    suggests ONC does not have the authority to support the ONC
    governance structure outlined in the President's budget. Don't
    you agree that when agencies take action they should be
    supported by congressional authorization?
        Secretary Burwell. Not familiar with the report, would
    welcome seeing it. With regard to the Office of the National
    Coordinator, I think you know we just came out with the plan to
    continue moving us towards electronic medical records. We back
    that up with specific things. We continue to work on something
    that cuts across many of the issues, and whether it is----
        Mr. Griffith. But you would agree with the principle, that
    there ought to be congressional authority for an agency to take
    action, would you not? Yes or no?
        Secretary Burwell. I would agree that we----
        Mr. Griffith. Yes, ma'am.
        Secretary Burwell [continuing]. Need----
        Mr. Griffith. And, Mr. Chairman, if I could also have that
    Congressional Research Service report placed into the record, I
    would----
        Mr. Pitts. Without objection, so ordered.
        Mr. Griffith. As a part of its governance push, ONC awarded
    a contract to RTI to develop its Health IT Safety Center. RTI
    said at the time of the award that it would define the focus,
    functions, governance, and value of the national health IT
    safety content. I am just concerned, as I pointed out a minute
    ago, that when you have these comments being made--now, we
    haven't seen it yet, and the report that I just had entered
    into the record shows we haven't seen the final analysis of
    what they are going to do, but when you have comments that they
    are planning to work on governance, and they don't have that
    authority, I am concerned, when the experts are telling me,
    both legal and otherwise, that this agency is going beyond its
    scope of authority, that this is a problem in this
    Administration, and that we should be careful that we have any
    agency moving forward without congressional authority.
        I am going to ask you to work with me as we move forward on
    this. I am going to follow up with some questions and some
    other things, and ask that you work with me to make sure that
    the ONC does not overstep its authority granted to it in
    legislation by this Congress.
        Secretary Burwell. I would like to work with you to
    understand, and understand what these concerns on governance
    are. This is new to me, and so I would like to----
        Mr. Kennedy. Yes, ma'am.
        Secretary Burwell [continuing]. Understand further what the
    concern is.
        Mr. Griffith. And I appreciate that, and I yield back.
    Thank you, Mr. Chairman.
        Secretary Burwell. Yes.
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    gentlelady from California, Ms. Capps, 5 minutes for questions.
        Mrs. Capps. I thank my Chair--colleague for yielding me
    time, and I do have a different topic to discuss with you,
    Secretary Burwell, but my colleague from Texas has asked for 10
    seconds.
        Mr. Green. I will do my 10 seconds. I want to thank the
    Congressman from Virginia, but I think the clarification is
    that up until Congressman Kennedy, all our statements were
    repeal the Affordable Care Act without an alternative. Now,
    there were bills that were passed, and none of us--up until----
        Secretary Burwell. That is right.
        Mr. Green [continuing]. Congressman Kennedy, but there is
    no repeal and replace. There is only repeal for 56 times. And
    thank you for----
        Secretary Burwell. And that is why I responded to full
    repeal. It was----
        Mrs. Capps. I want--thank you. You know, I want to go back
    to the President's budget this year, which I think, on the
    whole, strikes an important balance between controlling
    spending and promoting public health. These public health
    topics are what I want to bring to your attention.
        I was pleased to see that there was continued support for
    nursing workforce development. I believe, and I know you did
    too, a strong nursing workforce improves the health of our
    communities, as well as the quality of the health care system.
    And we now have the significant challenge in our Nation of
    caring for a growing patient population with limited resources.
    And I am a nurse, so I know that we can't reach our health care
    goals without a strong health care workforce made up of a range
    of health care professionals. And these are the development
    programs, such as Title 8, that are proven to be a solution
    that can help address this challenge.
        And so would you please discuss briefly, because I have two
    more topics, what this budget request does to make sure that we
    have a diverse health care workforce, well equipped, and large
    enough to meet our needs?
        Secretary Burwell. I will just be very brief----
        Mrs. Capps. Sure.
        Secretary Burwell [continuing]. Which is, I think one of
    the core and anchor places that we do that is making sure that
    we are funding our National Health Service Corps. And the
    increases that we have asked for are a very important part of
    that across, and it is especially important because we serve
    that group of people--30 percent are diverse in that----
        Mrs. Capps. Yes.
        Secretary Burwell [continuing]. Group. And in the Nation as
    a whole, the number is 10 percent, so we are over-indexing for
    that, and we think that is a very important place.
        Mrs. Capps. Right.
        Secretary Burwell. I will stop. There are other things, but
    I want to----
        Mrs. Capps. Right, because this one that I am going to
    mention is near and dear to my heart, and that is the maternal,
    infant, and early childhood home visiting programs. Such bang
    for the buck that you get with this. If you have ever seen it
    as I have, been part of one, it is such a proactive and
    preventive service. And there is an increase in commitment in
    this home visiting program in the budget for 2016. These are
    evidence-based, as you know, bipartisan programs, helping to
    ensure that all children across the board get an opportunity to
    be healthy and successful. And they are so critical to
    improving health outcomes for both women and children and
    families.
        So my question is how increased funding for these programs
    is going to address disparities and improve the health? How can
    we make it better?
        Secretary Burwell. So with regard to this issue, because I
    am a mother of a 5- and a 7-year-old, I have----
        Mrs. Capps. There you go.
        Secretary Burwell [continuing]. Learned the importance of
    that information very recently, in terms of being able to give
    your children what they need. And so the program that you are
    describing, and why we think it is important to continue on the
    pace, it is an evidence-based program. We have seen----
        Mrs. Capps. Yes.
        Secretary Burwell [continuing]. The results in terms of
    reading, and other analytical skills, up to 12 years old, in
    terms of the benefits. That is as far as it has been tested.
    And we see that has happened. When we give mothers and parents
    that opportunity to get the information they need in home----
        Mrs. Capps. Yes.
        Secretary Burwell [continuing]. When you go to them, it is
    making the difference. And so we believe this is a very
    important part, and part of a continuum that you see in the
    budget. That home visiting, next comes to that early child
    care, and making sure that we fund child care so working
    Americans can be a part of that. And then the issues of Head
    Start, and improving Head Start, both in terms of the length of
    day, the time of year, and the quality that we require. So it
    is a continuum in terms----
        Mrs. Capps. Yes.
        Secretary Burwell [continuing]. Of making sure we are
    taking care of those children along the way for working
    families, and pressing ourselves to improve quality.
        Mrs. Capps. Right. And, to build on that, and the focus on
    children and family, this question was asked about graduate
    medical education, but I want to focus on children's hospital
    GME, because children's hospitals programs are so critical for
    training pediatricians, pediatric specialists, and pediatric
    researchers. It is less than one percent of hospitals. They
    train 51 percent of all pediatric specialists, and the
    children's hospital graduate medical education programs
    currently receive much less funding than other, you know,
    children don't lobby. We have to do this on their behalf. And
    would you explain the proposed changes to funding for
    children's hospital graduate medical education programs, and
    what steps are being taken to ensure that we are meeting the
    demand for pediatric care?
        Secretary Burwell. We want to meet that demand, and we want
    to meet that demand for both primary care, and the specialties
    where we don't necessarily have the number of practicing
    physicians that we need. And so the proposal that we have tries
    to respond to the criticisms that we received last year with
    our proposal, and that there is $100 million that is dedicated
    firmly to the children's programs. In addition to that, they
    are able to compete. Right now what we do is we cover the
    direct costs, but we don't continue to cover the indirect cost.
        Mrs. Capps. Thank you very much.
        Mr. Pitts. Chair thanks the gentlelady. Now recognize the
    gentleman from Texas, Dr. Burgess, 5 minutes for questions.
        Mr. Burgess. Thank you, Mr. Chairman. Again, Madam
    Secretary, my apologies for being out of the hearing, at
    another hearing. And I also apologize for not having the
    President's budget here with me this morning. But the President
    did outline a number of savings in the Medicare space in the
    Presidential budget, is that correct? Do I understand----
        Secretary Burwell. Yes.
        Mr. Burgess [continuing]. That correctly?
        Secretary Burwell. That is correct.
        Mr. Burgess. And in general, as the head of HHS, are you
    supportive of those proposals in the President's budget?
        Secretary Burwell. Yes.
        Mr. Burgess. Let me ask you a question, then. You know that
    one of the things--I mean, I have just been pounding my head
    against the wall for 12 years on the sustainable growth rate
    formula. We were very close last year. We almost cracked the
    nut, but we didn't quite get there. But I thought we had a good
    proposal, and we are very close to introducing the same policy
    language again in this Congress. Offsets have been difficult,
    as everyone would expect.
        So let me just ask you, those savings that the President
    identified, those Medicare savings that the President
    identified in the Presidential budget, do you think it would be
    a good idea to apply those savings toward the permanent repeal
    of the sustainable growth rate formula?
        Secretary Burwell. With regard to how we pay for it in the
    President's budget, it is within the baseline, and we include
    it that way. With regard to the specific question of just using
    our approach to the Medicare, those savings are part of a
    broader context. It is a budget, and we put the budget together
    in its entirety. We view that those savings need to be paired
    with other elements of the budget.
        Mr. Burgess. But to the extent that those savers are
    identified, and those offsets are identified in the budget, it
    seems to me that would perhaps be a reasonable place to begin
    the discussion of what are the offsets that are used to put in
    place for the permanent, universal, complete, forever repeal of
    the sustainable growth rate formula.
        Secretary Burwell. First, I want to agree with the concept
    that we are talking about. In my opening remarks, I
    specifically said that we support the bipartisan, bicameral
    concepts that were put forward, and so on that we agree. With
    regard to the question of offsets, why I started with how we do
    it, which is building it into the baseline, is because that is
    the way we believe it should be done, and that uses the balance
    of things that we use to pay for things in our entire budget.
        So, in terms of where we start, and what we believe, we
    believe that it needs to be a range of things, and not simply
    focused on those.
        Mr. Burgess. Yes, but at the same time, as you know, the
    difficulty with the sustainable growth rate formula is the
    budget baseline, and the fact that it was built in years ago,
    and it accumulates over time. It is never corrected, even
    though a number of patches have been passed by Congress. We
    basically paid for this damn thing at least 1.4 times----
        Secretary Burwell. I am----
        Mr. Burgess [continuing]. Over the past 12 years. Again----
        Secretary Burwell. Yes.
        Mr. Burgess [continuing]. I just want you to know that. I
    like the fact that the President put forward cost savers in his
    budget. Fair warning to you that these are where I am going to
    go. The lack of participation and people who are willing to
    come forward and talk seriously about offsets leads me to go
    the President's budget as the only place I can go for
    Democratic ideas for an offset. And that is the critical
    missing piece in getting this SGR settled.
        Secretary Burwell. I think your colleague, Mr. Pallone,
    actually mentioned his specific idea for this when he spoke to
    this issue. And you may disagree with that, but that was in
    terms of contributing to the debate.
        Mr. Burgess. And my door is always open to Mr. Pallone, and
    I await his invitation, and I will be glad to come to his
    office.
        Let me ask you a question. I know you probably are tired of
    hearing about King vs. Burwell, but I will bring it up yet one
    more time, since I haven't been here, it is not exhausting to
    me yet. On the whole concept around contingency plans, the
    American Academy of Actuaries, is concerned because insurance
    companies are supposed to disclose the data upon which they are
    basing their rates in May, but there could be something that
    changes the equation in June. So, to the extent that the
    insurance companies are having to deal with an unsettled
    future, I mean, they are going to have to deal with contingency
    plans, are they not? Why should the Department not have a
    contingency plan, as recommended by the American Academy of
    Actuaries?
        Secretary Burwell. So, with regard to things that I have
    authority to plan for, I will plan for. In the current budget
    that you see in front of you, the unaccompanied children issue,
    one that I know is a difficult issue, and that there is
    controversy around, we have put in monies to plan up to 60,
    have asked for a contingency fund in case. We don't believe it
    will, but in case the numbers--where there are places that I
    can plan, we will.
        With regard to this issue, while the letter was simple, it
    actually gets to the core and the fundamental. We do not
    believe we have administrative authorities--if the Court makes
    a decision, and as I want to always repeat, we don't believe
    the Court will decide this way, but if the Court makes a
    decision and rules for Plaintiff, and says that those subsidies
    are not available, we don't believe we have an authority to
    undo the damage that would then occur, which is subsidies go
    away, individuals can no longer pay. They go off of their
    insurance, they become uninsured, it drives premiums up in that
    marketplace. They become uninsured, there is indigent care, it
    goes up.
        We don't believe that we have an authority. It is the
    Court, makes that decision at that level, that we have an
    authority to do it, and therefore that is why you are not
    hearing a plan. It is because we don't have an authority.
        Mr. Burgess. Well, I think you have to agree it will change
    the structure of the risk pools for the insurance companies.
    And, Mr. Chair, for that reason, I would like to submit the
    letter from the American Academy of Actuaries for the record.
    And I will yield back.
        Mr. Pitts. Without objection----
        Secretary Burwell. I do think, though----
        Mr. Pitts [continuing]. So ordered.
        Secretary Burwell [continuing]. That is why one does see
    those companies filing their briefs that they had filed in the
    case, that articulate the point you are making.
        [The information appears at the conclusion of the hearing.]
        Mr. Pitts. Gentleman yields back. Chair recognizes the
    Maryland, Mr. Sarbanes, 5 minutes for questions.
        Mr. Sarbanes. Thank you, Mr. Chairman. Thank you, Madam
    Secretary. First, thank you for stepping into public service as
    you have done. Your tenure at OMB, and now at HHS, is, I think,
    a real service to the country.
        I wanted to talk about this concept of full repeal, which
    has been a drumbeat for years, it seems, now from the other
    side of the aisle, to understand the implications of a full
    repeal. And so I wanted to go through some of the things that
    were part of the ACA, and ask you--and it may not be that every
    one of them is jeopardized by a full repeal, but I think
    certainly some of them are, the ACA included a measure that
    would allow young people to stay on their parents' health care
    up to age 26, and I think upwards of three million younger
    adults have benefitted from that. If there was a full repeal of
    the ACA, would that benefit and provision be in jeopardy, do
    you know?
        Secretary Burwell. It was part of the original Act, so yes.
        Mr. Sarbanes. Then there was an effort to begin closing the
    donut hole on prescription drugs under the Part D program,
    which has bedeviled many of our seniors, who kind of fall into
    that doughnut hole, often at a critical stage, in terms of
    needing to access prescription drugs. And the ACA reform
    included an effort that is begin, it is underway, to close that
    doughnut hole. Would that be in jeopardy if there was a full
    repeal?
        Secretary Burwell. It would, and the $15 billion in savings
    that those seniors have received to date would stop.
        Mr. Sarbanes. Right. Then there was terrific provisions, in
    terms of benefits and reimbursement. So, on the benefits side,
    for Medicare beneficiaries, you had more preventive care being
    covered fully, eliminating co-payments for certain kinds of
    preventive care, screening for annual wellness visits, et
    cetera. That was part of the ACA. A full repeal, I imagine,
    would jeopardize that reform as well?
        Secretary Burwell. Yes, and we actually just were able to
    have the numbers, and we have seen an increase in the number of
    seniors that are using that preventative are. And the
    percentage of seniors that are using at least one preventative
    service continues to go up.
        Mr. Sarbanes. Excellent. We put in some enhanced payment
    and reimbursement for primary care physicians, recognizing that
    we need to make sure we are incentivizing that part of the
    profession, in terms of getting into the pipeline, and also
    having the opportunity to spend more time with their patients,
    and have there be some economic rewards for that, which the
    patients themselves also want. I presume that that would be a
    peril with a full repeal as well?
        Secretary Burwell. A full repeal would imperil.
        Mr. Sarbanes. What about the provisions that have
    eliminated discrimination based on pre-existing conditions? Of
    course, we have started right out of the gate eliminating that
    discrimination in the case of children, now that is been
    expanded more broadly. But I imagine that also would be
    undermined by a full----
        Secretary Burwell. It----
        Mr. Sarbanes [continuing]. Repeal?
        Secretary Burwell. It would, and, having had the chance to
    meet a young woman who had cancer when she was 7--when she was
    12 years old she first had colon cancer, and then had thyroid
    cancer later, and now is in her 20s, and was engaged, but not
    continuing her graduate education or getting married because
    her focus was paying for her health care. And now the
    opportunity to have affordable care--because she had a pre-
    existing condition, obviously, is now allowing her to go on
    with her life. The issues of health security are very
    important, but for many individuals, the financial security is
    as well.
        Mr. Sarbanes. Thank you for those comments. The medical
    loss ratio requirement that now requires insurance plans to
    direct more of the insurance premium dollar to care, as opposed
    to overhead costs and so forth, that was part of the ACA,
    adhering to a particular standard. That would be eliminated, I
    would expect, in a full repeal?
        Secretary Burwell. In full repeal.
        Mr. Sarbanes. Subsidies and tax credits for small
    businesses who want to do the right thing and provide health
    care coverage for their employees was part of the ACA, so small
    businesses would be impacted by a full repeal, in terms of
    their ability to offer that kind of benefit to their workers,
    isn't that correct?
        Secretary Burwell. It would take away the tax credit if it
    were a full repeal.
        Mr. Sarbanes. So even before we get to a discussion of the
    pros and cons of the health exchanges, which have now offered
    up coverage to millions of Americans, there are so many other
    reasons, in addition to that, that we wouldn't want to repeal
    the Affordable Care Act. Thank you very much for being here. I
    appreciate your testimony.
        Secretary Burwell. Thank you.
        Mr. Pitts. The Chair thanks the gentlemen. Now recognize
    the gentleman from Florida, Mr. Bilirakis, for questions.
        Mr. Bilirakis. Thank you, Mr. Chairman, very much. Thank
    you, Madam Secretary for your testimony. Thanks for your
    appearance, welcome. I want to talk about Medicare Advantage.
    According to 2012 data, there were about 145,000 seniors in my
    district. About 40 percent of them are on Medicare Advantage, a
    little higher than the national average. They love their plans,
    and they want to keep their plans. They love their benefits,
    and their choices. Unfortunately, this Administration may not
    love Medicare Advantage as much as my seniors.
        The actuarial firm of Oliver Wyman did an analysis of the
    proposed 2016 Medicare Advantage rate notice. Reading the
    report, I am troubled to learn that it estimates that the
    combined impact of cuts from 2014 to 2016 will cost seniors on
    an average of $60 to $160 a month, or as much as $1,920 a year.
    Many of the seniors in my district live on a modest income--
    fixed income. Why is the Administration forcing many seniors to
    pay more than $100 a month to keep the plan they like?
        Secretary Burwell. So, with regard to the issue of Medicare
    Advantage, first I want to say we think the program is a good
    program. During the period when changes have been enacted, we
    have seen the program expand by, I think, well over 40 percent.
    We have seen a number of Medicare Advantage plans that have the
    top two ratings go from 17 percent to 67 percent. And we have
    seen that premiums have not been increasing, in terms of the
    changes that we have done to date.
        Why we are proposing these changes is they have been
    recommended by MedPAC and others with regard to over-coding
    that is occurring, and as part of our efforts to make sure we
    are using the taxpayer dollar wisely. We want to promote the
    program, we want to keep the program healthy, but we also
    believe that there are opportunities for those who may be not
    using the system as well as they might. And that is what our
    changes are about, and that is what we are trying to do,
    preserve and build the system, but make sure we do it in the
    fiscally responsible way.
        Mr. Bilirakis. Thank you, Madam Secretary. Many seniors who
    like the Medicare Advantage program they have are going to lose
    it in the following years. In fact, a recent--Milliman report
    details a nearly four-fold increase in the number of U.S.
    counties that no longer have Medicare Advantage as an option,
    growing from 55 counties in 2012 to 211 counties in 2015. Isn't
    it concerning to you that seniors are losing the ability to
    choose a Medicare plan that provides high quality and
    coordinated care? This is a very successful program, and,
    again, this is extremely important to my constituents.
        Secretary Burwell. Agreed that it is a very important
    program, and we want to make sure that it continues, want to
    see the studies and the underpinning of that. The most recent
    numbers that I have seen are that 99 percent of beneficiaries
    have access, and so those numbers may not align with that most
    recent study, and I want to understand what the difference in
    that is.
        Mr. Bilirakis. Thank you, Madam Secretary. One more
    question. The impact of seniors to Medicare Advantage,
    according to Oliver Wyman, could result in seniors losing
    access to their current coverage, or facing higher premiums,
    reduced benefits, and changes to their network as a result of
    the proposed cuts. When I talked with seniors in my district
    about Medicare Advantage, again, they believe the Medicare
    Advantage model offers high quality coordinated care. Yet
    further cuts will disrupt the benefits upon which millions of
    seniors rely.
        Your agency likes to tout the so-called affordable premiums
    and better consumer choices under the Affordable Care Act, but
    when it comes to Medicare Advantage, why is the Administration
    pursuing policies that would increase premiums and reduce
    choices for seniors? And, again, this is very concerning.
        Secretary Burwell. I think the responses with regard to the
    issue that we have seen, with the changes we have done to date,
    have not had the premium pressure that is described. We want to
    continue to watch and monitor. And also that we have seen more
    people enter in, and the quality improved. And so that is what
    we have seen to date. We want to continue to work and monitor.
    We want the program to succeed. We want to support it, and we
    want to try and do it in the way that is the most fiscally
    responsible.
        Mr. Bilirakis. Well, thank you, Madam Secretary. I
    appreciate it. I yield back, Mr. Chairman.
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    gentleman from California, Mr. Cardenas, 5 minutes for
    questions.
        Mr. Cardenas. Thank you very much, Mr. Chairman. Appreciate
    the opportunity to have this public dialogue for the benefit
    not only of the members, but for the public as well.
        Preserving access to prescription drugs that work for every
    senior is important, I think, to everybody on this dais, and I
    think every person who cares about a senior in this country,
    which probably makes everybody. So my question has to do with
    what proposals in the President's budget would increase access
    for seniors?
        Secretary Burwell. With regard to the specific access for
    seniors, across the board on prescription drugs, I think, in
    terms of the programs, whether that is the way we use some of
    the programs we have just been discussing, but I also think one
    of the most important things that has happened is that seniors
    have access to preventative services that they historically may
    not have. And just announced on Tuesday that what we are seeing
    is, because the seniors have that access to those preventative
    services, they are increasing the use of that.
        I think throughout our budget one the things we are
    attempting to do is work very hard to do a delivery system
    reform, which means getting better quality at a better price
    for the Nation. And I recently announced, about 3 weeks ago,
    that in the Medicare space, we are going to try and move to 30
    percent of all Medicare payments will be in new payment models,
    payment models that are about improving that quality and
    reducing that cost. And so those are some of the areas that I
    think the budget focuses on this.
        Mr. Cardenas. Now, that effort, is it likely to create an
    environment, individual by individual, that is likely to
    increase their quality of extended life versus--because when we
    are talking about access to preventative care, that means that
    if you catch something in its early stages--we all know what
    today's modern medicine, and opportunities--you can actually
    thwart it, or actually overcome it, versus finding something
    late in stages, it might even take your life, correct?
        Secretary Burwell. And across the department there are a
    number of investments that get to that, and whether that is the
    NIH investments in research, or in the Center for Innovation in
    Medicare and Medicaid, one of the things where we have out--a
    proposal that we are getting response to has to do with hospice
    and curative care, and how to combine those two in a way that
    will maximize for the quality of the patient. And so it is
    throughout the budget these issues of cost and quality are
    things that we focus on.
        Mr. Cardenas. Thank you. On that note, I would also like to
    add for the record, if you would allow me unanimous consent,
    Mr. Chairman, to submit a letter for the record from my office
    that lays out the issues that we are discussing at the moment.
        Mr. Pitts. Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Secretary Burwell. Thank you.
        Mr. Cardenas. I keep hearing a lot from some of my
    colleagues about their constituents losing choices. But, then
    again, one of the things that--it is my understanding, please
    clarify, that when people are talking about losing choices,
    they may be describing policies that were, in fact more
    expensive on the front, and perhaps didn't have minimum
    benefits standards to the person paying. Is that, in many
    cases, what people are describing when people are losing
    choices?
        Secretary Burwell. It can be. I would want to understand
    the specific----
        Mr. Cardenas. And that is why I say the word maybe----
        Secretary Burwell [continuing]. In the marketplace.
        Mr. Cardenas. Maybe, yes.
        Secretary Burwell. Within the marketplace, there are 25
    percent more issuers, which means more choice. The essential
    health benefits do important things, I think, as you are
    reflecting, and they get to some of the issues that Mr. Murphy
    and Ms. Matsui--on mental health. And having those benefits be
    clear and incorporated is extremely important. So, without
    understand the specific case, I think it is a little hard to
    know.
        Mr. Cardenas. But there are, in fact, in some areas where
    certain kinds of policies are not allowed, but that was--that
    is based on a new minimum standard, correct?
        Secretary Burwell. That is correct.
        Mr. Cardenas. And one of the things that I have discussed
    with some of my constituents, and my staff, and some of the
    providers, and experts that we pulled together, we registered
    at least over 1,000 families. And I personally tried to speak
    to as many of those individuals as possible. And what was sad
    is many of them were even scared to be there. They were
    thinking about this big Obamacare dragon that was going to
    obliterate either their finances or their health care.
        But what--almost to a person, every person that got up
    from--once they sat down and figured out what was available to
    them, or what have you, had a big smile on their face, and they
    were very pleased, and very relieved, and glad they came. And
    in one instance I was talking to a gentleman who was paying $60
    a month. He was making $9 an hour, single income family. He had
    a wife and a daughter, and I met all three of them. And when he
    was done, he had a big smile on his face. He almost got up and
    left when he met me. But when he was done, he actually realized
    that he now was able to provide for his family without having
    to spend $60 a month, and now his entire family has coverage.
    So I think that is a perfect example of what this is--what is
    good in the Affordable Care Act.
        Thank you, Mr. Chairman. I yield back my time.
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    gentleman from Indiana, Dr. Buschon, 5 minutes for questions.
        Mr. Buschon. Thank you, Secretary Burwell, and thanks for
    coming. And, first of all, I want to thank you for working with
    Governor Mike Pence of Indiana on Health Indiana Plan 2.0,
    which will help to cover 350,000 low income Hoosiers in a
    state-based program that, I think, has been shown historically
    to not only save money, but is very popular with the enrollees,
    so thank you very much for that work.
        Before I came to Congress, I was a cardiothoracic surgeon,
    and I treated most of my patients for many weeks after their
    surgery. And, as you probably know, that falls under a global
    payment, a 90-day global surgical payment by CMS. Now CMS wants
    to repeal that rule, and eliminate global payments for surgical
    services. Why?
        Secretary Burwell. With regard to our understanding of how
    the global payments are used, the reason that we want to do
    this is to make sure that, while we are promoting quality care,
    that we do it in a way that is most cost-effective for the
    taxpayer. Most of the changes that we do in the Medicare space
    are focused on those two things, and trying to balance those
    two.
        Mr. Buschon. OK. And has HHS or CMS looked into the
    administrative costs the new systems will have on doctors and
    CMS? The reason I ask is, in my practice--I will give you some
    examples of how this actually will work----
        Secretary Burwell. Yes.
        Mr. Buschon [continuing]. Or won't work if you do it. We
    would bill a global payment, for everything, including follow-
    up visits.
        Secretary Burwell. Yes.
        Mr. Buschon. And now doctors will be billing for the
    surgery, every hospital round that they make, every follow-up
    appointment, all separately, let me finish. And not only would
    the medical practice have to pay employees to submit what I
    consider excessive claims, but then CMS will have to process
    each claim. And how can that not cost CMS more money, not less?
    That is my first question.
        Secretary Burwell. With regard to the global payment issue,
    and one of the things--Dr. Patrick Conway--we try and have
    physicians who are practicing at the table as we have these
    conversations. Want to understand the point that you are making
    and how we believe--I want to look into this one, in terms of a
    specific answer to your----
        Mr. Buschon. It will be a dramatic increase. Let me tell
    you why. If I did an open heart surgery on a patient, I would
    see them in the ICU anywhere from 3 to 5 days every day, and
    then probably two to three follow-up appointments. That is all
    under a global.
        Secretary Burwell. Yes.
        Mr. Buschon. And so now that--those numbers will be
    submitted as individual bills. From a surgeon's perspective, I
    see this as--and I think seniors should be paying attention to
    these comments. This is going to be a dramatic pay cut for
    surgeons across this country, and that is--in my view, that is
    where any potential savings will be coming from. So as you look
    at this, you should really--I would encourage you to pay
    attention to that, because what will happen is there is going
    to have to be re-evaluation of every code, re-evaluation of
    every follow-up appointment. You are going to have to discern
    whether there is duplicate billing. For example, if I see a
    patient post-op in the ICU, and a critical care physician is
    also seeing my patient that day, who gets paid, who doesn't get
    paid? There will be increased denials. My point is this. Global
    payments were put in place to save money----
        Secretary Burwell. Yes.
        Mr. Buschon [continuing]. Administratively, and also
    simplify, and I think improve, quality of health care. And I
    think going backwards away from that is regressing backwards.
    Yes, it will save money. This will save money by dramatically
    cutting provider reimbursement. And if that is the intent, that
    is unfortunate, because what will also result is access issues
    for seniors for health care services, and, I would argue, less
    quality health care.
        And so, most of these bundles are re-examined every few
    years by--and so the argument that overbilling is occurring, if
    that were to be true, then these bundles are looked at every
    couple years and re-evaluated, so, on that subject, I would
    encourage you to take a really hard look at global payments.
    They save money, and they don't cost money. The savings will be
    on the backs of seniors' access to health care, and quality, in
    my opinion.
        The other thing is the President's budget would seek to
    save 20.9 billion in savings over the next 10 years by
    strengthening the IPAD Board, a board of unelected members
    selected by the President to cut--in my view, to cut Medicare
    payments to providers. I understand the President has not yet
    nominated anyone to sit on the IPAD Board, so it could not
    recommend Medicare cuts this year. So in what year under the
    President's budget will IPAD begin to make recommendations on
    Medicare costs?
        Secretary Burwell. In the current President's budget, IPAD
    would not kick in until 2019.
        Mr. Buschon. 2019?
        Secretary Burwell. That is right.
        Mr. Buschon. OK. Thank you. Thank you, Mr. Chairman. I
    yield back.
        Mr. Pitts. Chair thanks the gentleman. Now recognize the
    gentleman from New York, Mr. Collins, 5 minutes for questions.
        Mr. Collins. Thank you, Mr. Chairman, and thank you,
    Secretary, for being here today. I am from Western New York,
    which is a very rural community. We have one of the highest
    enrollments for Medicare Advantage. I know prior to the
    Affordable Care Act I would say that without a doubt one of the
    bright spots in the delivery of health care in the United
    States was Medicare Advantage. Dealt with the donut hole. It
    was a lot of comfort for the seniors to be able to go in, much
    like we do with HMOs--a great program. And yet, as was brought
    out earlier, and I want to get into this, it seems as though
    the President, and the Administration, and HHS views Medicare
    Advantage with some level of disdain, in that it is the piece
    that keeps getting cut.
        And as I look through some of the data, and I am kind of a
    data-driven guy, the interesting thing I found about Medicare
    Advantage, there are over seven million enrollees, represents
    almost 30 percent of the Medicare population, which would
    indicate it works. Number two, when you look at who uses it,
    lower income beneficiaries have a higher enrollment in Medicare
    Advantage than do wealthier individuals, which means it is
    serving best some of the lower income populations. We have also
    seen that, when I look at the rural plans, again, in rural
    America, which I represent, a higher percentage of folks from
    rural America are using it.
        So I am just asking the question, as--and the interesting
    thing too, the--that information we got today was from AHIP.
    They said the current 0.9 percent, the 0.9 percent cut that is
    coming now in the subsidy to insurance companies for Medicare
    Advantage, is going to add another $20 a month to
    beneficiaries, either in higher premiums, or reduced benefits.
    So could you speak to just the opinion of older Americans on
    Medicare, that they are being used as the funding source for
    the expansion in Medicaid, and all of those increased costs on
    the back of our seniors, who have depended on this great
    program for all these years? A frustration level exists within
    that population.
        Secretary Burwell. Appreciate that, and as I responded to
    your colleague with regard to the issues of Medicare Advantage,
    I would say we support the program, believe the program is a
    good program, but also believe that our responsibility, where
    we think there are things that are happening, whether that is
    up-coding or other things, that we try and take care of that.
        The changes that we have done, we have tried to transition
    those changes. We have tried to do those changes slowly so that
    we watch and monitor. We have seen an increase in the number of
    people in Medicare Advantage. We have seen premiums hold
    steady. We have seen an increase in quality. So the negative
    impacts that were articulated at the beginning of those
    proposals, we have not seen. We want to continue to monitor and
    make sure that we don't see some of the negative impacts that
    you were talking about. We value the program. We think the
    changes--they have been recommended by MedPAC and others.
        We understand the concerns, but trying to operate in a
    world--and with regard to the other issue that you mentioned, I
    would just say across the board--and whether it is the issue
    that your colleague just mentioned, with regard to--or the $780
    million we do in discretionary cuts, we try to spread these
    things across the entire parts of our budget.
        Mr. Collins. But are you aware that there now over 200
    counties in the United States that don't have a Medicare
    Advantage plan at all to offer their seniors as a direct result
    of the cuts you have made? So when you say it hasn't had this
    impact, there are seniors in over 200 counties in the United
    States that can't even buy the coverage.
        Secretary Burwell. So 99 percent of the Nation has
    coverage, in terms of the beneficiaries' accessibility.
        Mr. Collins. But yet the number who don't has increased,
    from 55 counties before the ACA to over 200 today. So there is
    a direct impact. I mean, the data is the data. You can't make
    it go away.
        Secretary Burwell. With regard to those numbers, as I said,
    I have the number of the current coverage, and would want to
    understand the change over the----
        Mr. Collins. Yes. What I am trying to point out is it has
    had--the reason you are looking for this funding is to pay for
    the expansion of Medicaid. I mean, whether it is the health
    insurance tax, or the individual mandate, or whatever, the big
    cost driver has been this huge expansion in Medicaid, would be
    my observation.
        Secretary Burwell. What I would observe is some of the
    comments that have been stated about the question of overall
    entitlements and the growth, we have a bulge of population. We
    have a large group of people who are elderly in Medicare. The
    Medicare costs, even though we have controlled per capita costs
    for Medicare over the period of what we are seeing, because
    more people from the baby boom are retiring and older, that is
    an issue that we, as a Nation, are going to have to look at and
    deal with. Medicare costs are going to continue to increase
    because of volume, even if we can control per capita cost.
        And so with regard to the questions of what will be costing
    the Nation money over periods of time, the issue of Medicare is
    one on a--because we are going to have the baby boom, and the
    echo come through, we are going to continue to have to make
    good on the commitments we have made. And that will cost us,
    because even if you control it per capita, volume is greater.
        Mr. Collins. Well, thank you for the answer. My time has
    expired. Yield back.
        Mr. Pitts. Chair recognize the gentleman from New Mexico,
    Mr. Lujan, 5 minutes for questions.
        Mr. Lujan. Thank you very much, Mr. Chairman, and I would
    yield to our Ranking Member, Mr. Green, for a quick response as
    well.
        Mr. Green. Thank you, Mr. Chairman. I want to respond to my
    colleague from New York. I have not had any of my seniors
    question the expansion of Medicaid, based on what is happening
    with Medicare. The Affordable Care Act was totally paid for,
    and, in fact, Medicare was improved under the Affordable Care
    Act. And, Madam Secretary, this is the first I have heard that
    seniors are complaining that the Medicaid expansion is being
    paid out of Medicare. That is just not, in fact, that I hear
    about. Did you have any information on that?
        Secretary Burwell. That is the first that I have heard that
    anyone felt that that was an issue, with regard to the Federal
    budget, because I assume that is what they are referring to.
        Mr. Collins. If the gentleman would yield one minute----
        Mr. Lujan. Thank you. Reclaiming my time, thank you, Madam
    Secretary, for your testimony today. I want to reiterate what
    many of my colleagues have said, that we must repeal the SGR,
    but not on the backs of seniors, and that a strong CHIP
    extension must be included with the SGR in March as well. Also
    that the Affordable Care Act is working, despite an attempt of
    over 50 Republican repeal attempts. The ACA has had a positive
    impact on New Mexico, in my home state. In my home district,
    25,000 people now have quality, affordable health coverage
    because of the Affordable Care Act that didn't before, and
    overall the numbers of uninsured has declined by 17 percent.
        With the law now full in effect, Americans can never be
    discriminated against because of pre-existing conditions. Women
    can never be charged more for coverage because of their gender,
    and Americans will never be sold health insurance policies that
    disappear when they need coverage most, when they hit those
    lifetime caps, and suddenly coverage goes away. I think that it
    is time that we come together and work to strengthen the law,
    and stop playing political games that will strip millions of
    Americans of the health coverage they depend on. As my father
    would say, enough is enough.
        Madam Secretary, in your opinion, has the Affordable Care
    Act had a positive impact on places around the country,
    including my home state of New Mexico?
        Secretary Burwell. Yes, and I think it has in three areas,
    affordability, access, and quality. With regard to the issues
    of quality, you touched upon a number of the areas where I
    believe there is been an improvement in quality, and those are
    the fact that people can have their children covered up to 26,
    the quality that you don't--if you have a pre-existing
    condition, you can't be kept out, or thrown off of your health
    care. If you take your child in for their wellness visit, there
    isn't co-insurance. You don't have to pay, in terms of that
    preventative care. So increases in quality. We have also seen
    increases in quality through partnerships we are doing with
    physicians, and we have seen a 17 percent reduction in harms.
    Those are things like infections and falls in hospitals. That
    is also about saving lives, but it is also about money.
        With regard to the issue of affordability, and the progress
    that we have made on affordability, while we can all still
    continue to make more, we have in that space, and what we have
    seen is that, in the years 2011, '12, and '13, we have seen a
    record in terms of per capita health care cost growth. It is
    one of the lowest that we have seen on record, and we have seen
    that. That is in the broader marketplace.
        With regard to the individual market, what we have seen is
    that people--the vast majority, over 8 in 10 folks in the
    marketplace can find coverage using a subsidy that is $100 or
    less in a month. That is affordability in that marketplace.
    With regard to affordability and the taxpayer, CBO estimates
    pre the Affordable Care Act would have estimated that spending
    in Medicare would have been $116 billion greater. Affordability
    for the taxpayer.
        Lastly, access. The question of access, and the fact that
    11.4 million people have come through the marketplace this
    time, but let us even use last year's number, where we saw a 10
    million person drop in the number of uninsured. So, against the
    three fundamental measures, that is how I would think about it.
        Mr. Lujan. I appreciate that, Madam Secretary. Thank you
    for your response there, and I do want to raise an issue that
    has great concern to my constituents and to myself back in New
    Mexico. It has now been over 18 months since the State of New
    Mexico claimed credible allegations of fraud, or their
    allegations of fraud, against 15 behavioral health providers,
    resulting in the eventual closure or replacement by five
    Arizona behavioral health providers. This transition and
    turmoil has raised significant concerns across access to care,
    especially in light of recent reports that the new providers
    are financially unstable. In fact, one provider is already
    pulling out of New Mexico.
        The recently elected New Mexico Attorney General has also
    released the audit that led to the suspension, and it shows a
    lack of underlying basis for many of the allegations of fraud.
    My staff has had several meetings with CMS, and I am very
    concerned that we are not making progress. When payment
    suspensions are put into place, what CMS do to ensure states
    are acting in good faith, and what is CMS doing to stop the
    reoccurrence of this happening, both in New Mexico and other
    states, and can I have your commitment that we can work
    together on this particular issue and met with the delegation?
        Secretary Burwell. Do want to work with you on this issue.
    Know it is one of concern, in terms of making sure that people
    have access to those benefits.
        Mr. Lujan. I appreciate that. Thank you very much. I yield
    back the balance of my time.
        Mr. Pitts. Thank the gentleman. Now recognize the
    gentlelady from North Carolina, Ms. Ellmers, 5 minutes for----
        Mrs. Ellmers. Thank you. And thank you, Madam Secretary,
    for being with us today. I do have three different questions to
    ask you about, but I do want to address the issue of Medicare,
    and our seniors who are concerned. It is my recollection, and I
    am just going back to history, that over $700 billion was taken
    out of Medicare in order to pay for Obamacare. About 300
    billion of that was Medicare Advantage. So to the question of
    whether or not our seniors are concerned about that, I say yes,
    they are concerned about that, and they want to make sure that
    they will be able to continue to get the care they deserve.
        I want to start off by talking about Medicare reimbursement
    in relation to the two percent sequester cuts that were put in
    place a number of years ago, which dramatically affected our
    chemotherapy drugs and Part B drugs. As you know, this has
    affected our industry. Back on January 14 of 2013, Office of
    Management and Budget put out a letter asking Federal agencies
    to, ``use any available flexibility to reduce operational
    risks, and minimize impacts of the agency's core mission in
    service of the American people.''
        Some adverse things happened as a result. of the two
    percent cut over 16 months, after CMS started applying the two
    percent cut, We basically ended up with 25 community oncology
    clinics closing, one of which was a very large clinic in my own
    district. Seventy five others merged with hospitals. CMS's own
    numbers show that it costs $6,500 more per year per patient on
    oncology services if they are part of the hospital system,
    versus the clinic setting, or outpatient setting, which is
    about $650 more out of pocket.
        Why hasn't CMS taken the recommendation of OMB and
    addressed that situation?
        Secretary Burwell. Congresswomen, we agree with you about
    sequester, and in this budget, we fully get rid of sequester,
    both on the mandatory side, and on the discretionary side. We
    believe there are other choices that are better choices, and so
    agree with you, this is not an approach--when you use an
    approach like this----
        Mrs. Ellmers. Yes.
        Secretary Burwell [continuing]. You end up doing things
    like the types of things you are talking about. And so what we
    want to do is fully replace it, and that is what our budget
    does. We are willing to make other choices, in terms of how we
    get those savings.
        Mrs. Ellmers. Thank you. And I will go on to a very
    important question, having to do, essentially, with our tobacco
    products. My question for you is, do you agree with Mitch
    Zeller, Director of FDA Center for Tobacco Products, that if
    the smokers, and I am quoting him, ``who are otherwise unable
    or unwilling to quit were to completely switch to smokeless
    tobacco products, it would be good for the public health.'' Do
    you agree with this statement?
        Secretary Burwell. I would have to understand the context
    in which he made that statement. With regard to the question, I
    think, you know, we want to promote the public health. We want
    to----
        Mrs. Ellmers. Yes.
        Secretary Burwell [continuing]. Make sure we are doing the
    right research to understand that, and put in place the right
    guidelines and regulations to do it.
        Mrs. Ellmers. Well, thank you. I do want to add that there
    are no government Web sites that help promote or address this
    issue, including CDC, FDA, NIH. It would be helpful for the
    public to understand that there are the non-tobacco products
    available, and this is an approach we need to make. I would
    welcome the ability to continue to work with you, and your
    office, on any way that we can better help to get the
    information out, and address the needs from a scientific basis,
    using the scientific research that is out there.
        I do want to switch gears to our vaccines and to BARDA.
    Right now BARDA maintains a stockpile of roughly $1.7 billion
    worth of pandemic influenza vaccine. This year's budget, I
    believe, is about $20 million in order to take care of that
    stockpile and maintain it. Does the 2016 budget increase that
    amount, and how does BARDA plan on dealing with those issues,
    especially when our situation is very timely?
        Secretary Burwell. Across the board our budget has worked
    to do a couple of things with regard to the preparedness,
    making sure that that vaccine stockpile, and that the issues
    that BARDA handles----
        Mrs. Ellmers. Yes.
        Secretary Burwell [continuing]. Which are making sure that
    what we have on hand in stockpile, and that we have the ability
    to work with manufacturers to bring new products online, where
    that is appropriate----
        Mrs. Ellmers. Yes.
        Secretary Burwell [continuing]. For different types of
    issues that we as a Nation may face, either man-made or
    otherwise. But we also have paired that with things in our
    budget which are about the preparedness in our communities----
        Mrs. Ellmers. Yes.
        Secretary Burwell [continuing]. And we have seen that front
    and center, certainly, in our time period. We are implementing
    the dollars we appreciate from Congress as part of that, in
    terms of Ebola, but also broader preparedness----
        Mrs. Ellmers. Yes.
        Secretary Burwell [continuing]. Where we have been given
    that authority by the Congress.
        Mrs. Ellmers. Thank you, Secretary Burwell, for being here
    today. I truly appreciate your input. Thank you.
        Secretary Burwell. Thank you.
        Mr. Pitts. Chair thanks the gentlelady. That concludes the
    questions of the members who are present. I am sure we will
    have lots of follow up and written questions from some of the
    members, so we will get those to you promptly. We ask that you
    please respond to the questions promptly. I remind members that
    they have 10 business days to submit questions for the record,
    and that means they should submit their questions by the close
    of business on Thursday, March the 12th.
        Thank you very much, Madam Secretary, for your attendance
    today and your answers. Without objection, subcommittee is
    adjourned.
        [Whereupon, at 12:55 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
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        [Secretary Burwell did not respond to submitted questions
    by the time of printing.]

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