[Senate Hearing 115-246]
[From the U.S. Government Publishing Office]








                                                        S. Hrg. 115-246

                      PRESIDENT'S FISCAL YEAR 2018
                         HEALTH CARE PROPOSALS

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

                                HEARING

                               before the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 8, 2017

                               __________










[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]











                                     
                                     

            Printed for the use of the Committee on Finance

                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

30-210 PDF                     WASHINGTON : 2018 





















                          COMMITTEE ON FINANCE

                     ORRIN G. HATCH, Utah, Chairman

CHUCK GRASSLEY, Iowa                 RON WYDEN, Oregon
MIKE CRAPO, Idaho                    DEBBIE STABENOW, Michigan
PAT ROBERTS, Kansas                  MARIA CANTWELL, Washington
MICHAEL B. ENZI, Wyoming             BILL NELSON, Florida
JOHN CORNYN, Texas                   ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota             THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina         BENJAMIN L. CARDIN, Maryland
JOHNNY ISAKSON, Georgia              SHERROD BROWN, Ohio
ROB PORTMAN, Ohio                    MICHAEL F. BENNET, Colorado
PATRICK J. TOOMEY, Pennsylvania      ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina            CLAIRE McCASKILL, Missouri
BILL CASSIDY, Louisiana

                     Chris Campbell, Staff Director

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)

























                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     1
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, 
  Committee on Finance...........................................     3

                         ADMINISTRATION WITNESS

Price, Hon. Thomas E., M.D., Secretary, Department of Health and 
  Human Services, Washington, DC.................................     5

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Grassley, Hon. Chuck:
    Letter from Senator Grassley, et al. to Administrator Verma, 
      May 19, 2017...............................................    45
Hatch, Hon. Orrin G.:
    Opening statement............................................     3
    Prepared statement...........................................    46
Price, Hon. Thomas E., M.D.:
    Testimony....................................................     5
    Prepared statement...........................................    48
    Responses to questions from committee members................    51
Wyden, Hon. Ron:
    Opening statement............................................     1
    Prepared statement...........................................    99

                             Communications

American Academy of Family Physicians (AAFP).....................   101
National Family Planning and Reproductive Health Association 
  (NFPRHA).......................................................   106
Oral Health America..............................................   107

                                 (iii)

 
                      PRESIDENT'S FISCAL YEAR 2018
                         HEALTH CARE PROPOSALS

                              ----------                              


                         THURSDAY, JUNE 8, 2017

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 9:54 a.m., 
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G. 
Hatch (chairman of the committee) presiding.
    Present: Senators Grassley, Roberts, Thune, Isakson, 
Toomey, Heller, Scott, Cassidy, Wyden, Stabenow, Cantwell, 
Nelson, Carper, Cardin, Brown, Bennet, Casey, and McCaskill.
    Also present: Republican Staff: Chris Campbell, Staff 
Director; Brett Baker, Health Policy Advisor; Kimberly Brandt, 
Chief Health-care Investigative Counsel; Jay Khosla, Chief 
Health Counsel and Policy Director; Jennifer Kuskowski, Health 
Policy Advisor; and Preston Rutledge, Tax Counsel. Democratic 
Staff: Joshua Sheinkman, Staff Director; Laura Berntsen, Senior 
Advisor for Health and Human Services; Anne Dwyer, Health-care 
Counsel; and Elizabeth Jurinka, Chief Health Counsel.

    The Chairman. The committee will come to order. We are 
going to first listen to the distinguished Senator from Oregon, 
who has to go to another committee hearing, so I will show that 
deference to him.
    I welcome everybody to this morning's hearing on the 
President's proposed budget for fiscal year 2018 with specific 
attention to the Department of Health and Human Services.
    I want to thank Secretary Price for being here. These 
hearings are an annual event for the Finance Committee. 
Secretary Price, since this is your first time around, I will 
just warn you that these hearings can be a little grueling, 
so--of course, you already know that.
    I am grateful that the President and HHS are eager to work 
with Congress to fix our health-care system in order to ensure 
Americans are able to access affordable health coverage.
    With that, I am going to turn to the ranking member, who 
needs to get to another hearing, and we will show that 
deference.

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Mr. Chairman, thank you very much for this 
courtesy. And I know this is a busy morning, and I am very 
grateful to you for doing this.
    I also want to say ``thank you'' to Senator Stabenow, who 
in my absence is going to do an excellent job, as she always 
does.
    This administration from day one has preferred 
``alternative facts'' and convenient spin to the truth. One of 
the most recent examples was its budget proposal which double-
counted $2 trillion to maintain some whiff of fiscal 
responsibility while it slashed health programs and protections 
for basic and essential needs.
    The budget math is fake, but the extreme agenda that would 
deprive millions of Americans of access to health care and wipe 
out living standards is not. Unfortunately, this morning I am 
going to be splitting my time between the Finance Committee and 
the Intelligence Committee, so I will be brief.
    There are several issues in the budget and the 
administration's agenda that I am going to touch on. First is 
Medicaid. Secretary Price is the captain of the President's 
health-care team. He has been the premier advocate for 
Trumpcare, a bill that cuts Medicaid by $834 billion in order 
to pay for massive tax breaks for the wealthy.
    Fourteen million Americans would lose coverage, and 
millions more would see caps on their care. And if that was not 
enough of a cut, the budget proposal that came out a few weeks 
ago goes even further.
    It slashes hundreds of billions more from Medicaid. In a 
program that covers nearly half of all births, 37 million kids, 
millions of working families and people with disabilities, and 
two out of three nursing home beds in America, these cuts would 
be a staggering blow to Americans of all generations.
    These facts and figures have been met by a wave of the hand 
from Secretary Price. When asked if his proposed cuts would 
result in millions of Americans losing access to Medicaid, he 
responded, ``Absolutely not.'' He went further, claiming 
``there are no cuts to the Medicaid program,'' and he also 
said, ``nobody will be worse off financially.''
    I have heard Secretary Price and others make the baffling 
argument that people are actually worse off when they have 
Medicaid coverage--that their health does not improve as a 
result of Medicaid coverage. Often this argument is based on a 
brief and outdated study performed in my home State.
    Here is the bottom line on Medicaid. Seventy-four million 
Americans rely on this program for basic health needs--parents 
with sick kids, people with disabilities, seniors in nursing 
homes who have nobody to turn to for help if their benefits 
disappear, and in addition, thousands of Oregonians who are 
healthy under my home State's model.
    It would be a tough sell to convince those people they are 
worse off being enrolled in Medicaid, or that the program needs 
more than a trillion dollars in cuts. And public opinion is 
very clear: two out of three enrollees are happy with the 
program. Seven out of ten Americans say Congress ought to leave 
it as it is--no block grants, no per-capita caps.
    Fortunately, the budget proposal hit the wall here in the 
Congress, and there is a lot of debate left to be had on 
Trumpcare. But right now, the administration is causing turmoil 
in the insurance markets, and it is already having disastrous 
effects for millions of families.
    The President issued a day-one executive order undermining 
the Affordable Care Act, and nobody on the Trump team can give 
a straight answer about whether the administration will 
continue making cost-sharing reduction payments that are key to 
making insurance affordable for working families. Because of 
this sabotage, insurers are pulling out of the markets, and 
people are left without plans to choose from.
    You do not have to take my word for it. The insurers are 
very clear about why they are making these decisions.
    Furthermore, on the campaign trail, the President said he 
would not cut Medicare. The Trumpcare bill shrinks the life of 
Medicare, and the budget proposal extends the mandatory cuts 
under the budget sequester by more than $30 billion. The Food 
and Drug Administration, the Centers for Disease Control, and 
the National Institutes of Health are all slashed in the 
budget. The same is true of programs aimed at basic human 
needs, programs that fund Meals on Wheels, child care, and 
foster care. This is the budget you write if you think seniors 
and working families have it too easy.
    I want to thank the Secretary for joining the committee. I 
apologize again for the hectic schedule. It is never an easy 
appointment for a Cabinet Secretary, and I think he knows there 
is going to be some vigorous discussion this morning.
    I also again want to express my thanks to the chairman for 
his very gracious and ongoing courtesies on these kinds of 
matters. Thanks, Senator Stabenow, for being willing to fill 
in, and I look forward to returning with our colleagues, and 
again, I thank the chair.
    The Chairman. Well, thank you, Senator.
    [The prepared statement of Senator Wyden appears in the 
appendix.]

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
              UTAH, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. Let me just say I am grateful that the 
President and HHS are, in essence, working on this effort, and 
are, in essence, eager to work with Congress to fix our health-
care system in order to ensure Americans are able to access 
affordable health coverage.
    This may not be something that is going to be that easy to 
do. And as we know, time is of the essence in regard to this 
effort.
    Earlier this week, we received word that Anthem is pulling 
out of Ohio's Obamacare marketplace, potentially leaving more 
than 10,000 patients and consumers in 20 counties without any 
insurance options on Ohio's exchange for 2018. Now, this news 
is particularly frightening as we expect to hear similar 
notices from Anthem as they reevaluate their participation in 
Obamacare exchanges throughout the United States, our whole 
country.
    Now, this recent story is just the latest in a long line of 
failures, but my colleagues on the other side seem to want to 
continue under the guise that this is working. It is not 
working. All of these failures demonstrate the need to move 
forward with repealing Obamacare and replacing it with a more 
workable approach, one that will take seriously the ballooning 
health-care costs impacting every American family.
    Let me talk for a few minutes about the specifics of the 
President's budget. The budget assumes $250 billion in total 
savings from the repeal and the replacement of Obamacare.
    Despite some insinuations to the contrary, the budget does 
not incorporate the specific legislative proposal, the American 
Health Care Act, that is before Congress right now. Therefore, 
it is not accurate to associate the specific Medicaid savings 
the CBO has estimated from enactment of the AHCA with the 
President's budget. To do so would assume a level of 
specificity that, for obvious reasons, is just not there.
    Moreover, the President's budget does not cut $1.5 trillion 
from Medicaid. Nor does it assume that the specific Medicaid-
reform proposals from the AHCA will be enacted into law. I am 
quite certain that we will hear a lot about that today, but any 
attempt to make that connection is simply unfounded. And any 
Senator who harps on the AHCA Medicaid numbers here today 
either does not understand the explicit language and estimates 
provided in the President's budget, or they are simply 
attempting to muddy the waters in order to scare Americans who 
rely on Medicaid for health-care coverage.
    Ultimately, the President's budget appears to accept the 
reality that the Senate will need to come up with its own 
health-care reform proposal that includes a fundamental fix to 
Medicaid, which is, quite frankly, long overdue. And anybody 
who does not agree with that just is not living in the real 
world.
    In addition to the savings assumed from the repeal of 
Obamacare, the budget also explicitly assumes $610 billion in 
savings from putting Medicare on a sustainable fiscal path by 
capping funding in fiscal year 2020 through per capita caps or 
block grants at the States' option.
    All told, most of the budget's overall Medicaid savings 
would be achieved by returning the focus of Medicaid to serving 
those with the greatest needs--the elderly, the disabled, and 
needy mothers and children--and by giving States more 
flexibility to run their own Medicaid programs.
    Any Senator who would like to argue that the Federal 
Government should spend more Medicaid dollars to provide 
coverage for non-disabled, childless adults at the expense of 
disabled patients who remain on waiting lists should explain 
why. Furthermore, any Senator who would like to argue that the 
States are ill-equipped to handle their Medicaid programs 
should explain why that is the case, given that the 
overwhelming consensus we have heard from Governors nationwide 
over the last several years is that States want more 
independence and flexibility to tailor the Medicaid program.
    Washington needs to stop measuring the success of a Federal 
program by how much money it spends, or how many other programs 
are a part of it. Instead, Washington needs to focus on how 
well a Federal program helps those it is intended to serve and 
how efficient the program is at fulfilling its mandate.
    Long story short, we need to stop focusing on spending and 
pay more attention to outcomes, because we may not be able to 
spend more. It does not appear that we are going to be able to. 
The rate things are going right now under the current system, 
it is a national tragedy.
    I think the President's budget, while it is by no means 
flawless, largely recognizes this reality, and the President 
and the administration deserve credit for that. Now, I look 
forward to having an open and frank discussion with Secretary 
Price about his thoughts on these and other matters.
    [The prepared statement of Chairman Hatch appears in the 
appendix.]
    The Chairman. But before we get to that, I would like to 
say today that we have the pleasure of being joined by 
Secretary Thomas E. Price.
    Secretary Price, I want to thank you for coming. Secretary 
Price was sworn in as the 23rd Secretary of Health and Human 
Services on February 10, 2017.
    As a policymaker and a physician--a surgeon, in 
particular--he brings to the Department a lifetime of service 
and dedication to advancing the quality of health care in 
America.
    Secretary Price first began his career in care for patients 
as an orthopaedic surgeon. He followed in the footsteps of his 
father and grandfather, and began a solo medical practice in 
Atlanta, GA. Since its founding, that practice has grown to be 
one of the largest non-academic orthopaedic practices in the 
country.
    Hoping to make a different type of impact on health care, 
Secretary Price ran for public office and was elected to four 
terms in the Georgia State Senate, and I believe would have 
continued on forever if he wanted to. During his tenure there, 
Secretary Price served as Minority Whip and later as the first 
Republican Senate Majority Leader in the history of Georgia.
    Most recently, Secretary Price served as U.S. 
Representative for Georgia's sixth congressional district from 
2005 to 2017. During his time in the House, Secretary Price 
served in various roles, including chairman of the House Budget 
Committee, chairman of the House Republican Policy Committee, 
and chairman of the Republican Study Committee.
    Secretary Price received his bachelor and doctorate of 
medicine degrees from the University of Michigan, after which 
he completed his orthopaedic surgery residency at Emory 
University.
    Now, Secretary Price, we are grateful to have you here and 
will be happy to have you proceed with your testimony here 
today.

STATEMENT OF HON. THOMAS E. PRICE, M.D., SECRETARY, DEPARTMENT 
          OF HEALTH AND HUMAN SERVICES, WASHINGTON, DC

    Secretary Price. Thank you so much, Mr. Chairman and 
Ranking Member Stabenow and members of the committee. I want to 
thank you for inviting me today to discuss the President's 
budget for the Department of Health and Human Services for 
fiscal year 2018. It truly is an honor to be with you.
    Whenever a budget is released, the most common question in 
this town, in Washington, is ``how much?'' How much does the 
budget spend on this program, how much does it cut from the 
other program?
    And as a former legislator, I understand the importance of 
this question. But too often, it is treated as the only 
question that is worth asking as it relates to the budget, as 
if how much a program spends is more important, or somehow more 
indicative of whether the program actually works.
    President Trump's budget request does not confuse 
government spending with government success. The President 
understands that setting a budget is about more than 
establishing topline spending levels. Done properly, the 
budgeting process is an exercise in reforming our Federal 
programs to make sure that they do their job and use tax 
dollars wisely.
    The problem with many of our Federal programs is not that 
they are too expensive or too underfunded. The real problem is 
that many of them simply do not work. Fixing a broken 
government program requires redesigning its structure and 
refocusing taxpayer resources to better serve those most in 
need. And that is exactly what President Trump's budget will do 
at HHS and across the government. Consider Medicaid, which has 
been discussed, the primary source of medical coverage for 
millions of low-income American families and seniors facing 
challenging health circumstances.
    If the amount of government spending were truly a measure 
of success, Medicaid would be hailed as one of the most 
successful programs in history. Twenty years ago, actual 
spending on Medicaid was less than $200 billion. Within the 
next decade, it is estimated to top $1 trillion a year.
    Despite these significant investments, one-third of 
physicians who ought to be seeing new Medicaid patients do not. 
Some research shows that enrolling in Medicaid does not 
necessarily improve your health outcomes for the newly eligible 
Medicaid population.
    This suggests that we need structural reforms that empower 
States to serve their unique Medicaid populations in a way that 
is both compassionate and sustainable. Now under current law, 
Federal rules prevent States from focusing on their most 
vulnerable communities and from testing new ideas to improve 
health outcomes and access to care. This budget changes that.
    HHS's mission of protecting the health of the American 
people involves far more than overseeing the Nation's health 
care and insurance programs. HHS is the world's leader in 
helping the health-care sector prepare for cyber-threats and 
responding to and protecting against public health emergencies.
    Recently, I witnessed this important work firsthand 
visiting Ebola survivors in Liberia and representing the United 
States at the G20 Health Ministerial Meeting in Berlin and the 
World Health Assembly in Geneva. To support HHS's unique 
Federal role in public health emergencies, preparedness, and 
response, the President's budget provides $4.3 billion for 
disaster services coordination and response planning, 
biodefense and emerging infectious disease research, and 
development and stockpiling of critical medical 
countermeasures.
    In addition, today America faces a new set of public health 
crises that we have been far less successful in resolving. 
Those are serious mental illness, the opioid crisis, and 
childhood obesity.
    As Secretary, I am committed to leading HHS to address each 
of these three challenges, and the President's budget calls for 
investments in policy reforms that will enable us to do that. 
The budget calls for investments in high-priority mental health 
initiatives for psychiatric care, suicide and homeless 
prevention, and children's mental health, focusing especially 
on those suffering from severe mental illness.
    In 2015, over 52,000 Americans died of overdose, most of 
them from opioids. This budget calls for $811 million to 
support the department's five-point strategy to fight this 
epidemic.
    To invest in the health of the next generation and help 
nearly the 20 percent of school-aged children who are obese 
lead healthy and happier lives, the President's budget 
establishes a new $500 million America's Health Block Grant.
    Additionally, the President's budget prioritizes women's 
health programs by investing in research to improve health 
outcomes for women and increasing funding for the Maternal and 
Child Health Block Grant and Healthy Start. Across HHS, funding 
is maintained for vital programs serving women, including 
community health centers, domestic violence programs, women's 
cancer screenings and support, mother and infant programs, and 
the Office of Women's Health. This budget demands some tough 
choices, and in this challenging fiscal environment, there are 
no easy answers. With this budget, however, the new 
administration charts a path toward a sustainable fiscal future 
and ensures the dedicated resources provided enhance and 
protect the health and well-being of the American people.
    Members of the committee, I want to thank you for the 
opportunity to be with you today and your continued support of 
the Department of Health and Human Services. It is my 
incredible privilege to serve as its Secretary.
    [The prepared statement of Secretary Price appears in the 
appendix.]
    The Chairman. We are proud of you, and we know that you 
were an excellent member of the House. And so far, it looks to 
me like you are getting on top of what these problems are, 
although you were pretty well on top of them before as a member 
of the House.
    The opioid crisis seems to be spreading across the country, 
affecting families and communities in unprecedented ways. In 
fact, The New York Times reported earlier this week that 
overdose deaths are at an all-time high. Tackling this crisis 
is a priority for you and for President Trump. So can you 
describe the efforts HHS is undertaking to address the ongoing 
opioid epidemic in the United States?
    Secretary Price. Mr. Chairman, this is one of the scourges 
across the Nation that tears your heart out. In 2015, 52,000--
as I mentioned--fellow Americans died of an overdose, 33,000 of 
those of an opioid overdose. We hear this day after day after 
day. What the Department has done is put in place a five-part 
strategy to make certain that we are identifying the kind of 
treatment and recovery efforts that work in assisting the 
States.
    We want to make certain that we have the overdose-reversing 
drugs available wherever they need to be available and know 
that we are trying to surveil and make certain that we know 
prior about strong drugs getting to the street, from a law-
enforcement standpoint.
    There is a public health aspect to this, obviously, to try 
to determine what the heck is going on. Why is this scourge as 
large as it is? And we are putting resources into that.
    In addition, we want to make certain we are doing the 
highest level of research to try to identify those pain 
treatments that are able to make it so that there is not a need 
for individuals to seek pain medication for its euphoric 
effect.
    And then finally, fifth, it is important to look at how we 
manage pain in this Nation. Twenty years ago, we started down 
this road of measuring pain as a fifth vital sign. Let me 
suggest to you that that has resulted in significantly greater 
use of opioids and prescription medication than would have 
otherwise been the case.
    So we have this five-part strategy. You have been 
incredibly helpful, Congress has been incredibly helpful, to 
make certain, through 21st Century Cures and otherwise, to 
provide resources so that we can allow the States to identify, 
again, those evidence-based programs that they have in place 
that can help mitigate this challenge.
    But we continue to move in the wrong direction, Mr. 
Chairman, and we will not rest at the Department or in the 
administration until we bend that curve in the other direction.
    The Chairman. Well, thank you so much.
    HHS recently published a report using the previous 
administration's data showing just how much health insurance 
premiums in the individual market have increased since 2013. 
Could you tell us what are the principle findings of that 
report?
    Secretary Price. Well, thank you so much.
    I know that when I visited with folks in my previous 
position, and then since I have been privileged to serve as 
Secretary, I hear over and over again how folks are just so 
terribly concerned about the cost of health coverage for them 
and their family. And there was this disconnect--you are going 
to have the individuals talking about the wonders of the 
program that was in place, but then you had all of these 
individuals who were so concerned because they did not have the 
ability to afford the coverage, or they did not have the 
ability to get the care.
    So this study that we undertook, that was undertaken at the 
Assistant Secretary for Planning and Evaluation group within 
HHS, identified that the average premium increase over the last 
4 years has been over 100 percent. It was 105 percent, so more 
than double, across the country. In fact, in three States, the 
increases were tripled--in Alaska, in Alabama, and in Oklahoma.
    And what that means is that there are individuals who (1) 
cannot afford the coverage, and (2) even when they can afford 
the coverage, the deductibles have increased to a significant 
degree so that they may have an insurance card, but they do not 
have any care, because they cannot afford the deductible.
    So that is the challenge that we are trying to address and 
make certain that Congress addresses so that individuals are 
able to afford the kind of coverage that folks want for 
themselves and for their families.
    The Chairman. Well, as you may be well aware, this 
committee has for several years now been keenly interested in 
the large backlog of Medicare claims under appeal at HHS. The 
most recent reports we have heard indicate that the backlog has 
been reduced from a high of nearly 1 million claims to a 
current number closer to 750,000 claims. Now, that number is 
still unacceptably high.
    Can you tell me what HHS is doing to address the 
unnecessary backlog of Medicare claims?
    Secretary Price. Yes. These are appeals where providers 
have said that they do not believe that the Federal Government 
is providing the kind of resources necessary for them to be 
able to care for their patients. And as you mentioned, the 
numbers are staggering: nearly a million claims. We are down to 
about 700,000 now.
    We can take care of somewhere around 20,000--up until 
recently--a year. What we have done is met with the 
individuals, and they are high-quality folks. These are folks 
just trying to get these appeals through the process and trying 
to make the right decision.
    We put a focus on that. We have encouraged them to talk to 
the stakeholders, talk to the individuals out there about why 
we have this increase in claims. There is a problem there. It 
means that the system is not working to the degree that it 
should to allow those individuals to care for those patients 
and be compensated for that care.
    We have identified the opportunity for the administrative 
law judges to be able to review higher claims and move in the 
direction of having magistrate judges review lower claims so 
that we can hopefully get through a larger volume of claims on 
an annual basis.
    And then we have tried to decrease the burden of reporting. 
We are working on trying to decrease the burden of reporting 
for the providers so that there is a less likely possibility 
that they would feel the need or desire to file a claim.
    So this is a major problem. We are working through it, and 
we are committed to getting that number down to a reasonable 
number.
    The Chairman. Well, I am happy to listen to you. You have 
inherited a tremendous number of problems, and I know that you 
are fully capable of solving those problems. I think you are 
well on your way.
    The distinguished ranking member has agreed with me to 
allow Senator Isakson to go next.
    Senator Isakson. Thank you, Mr. Chairman.
    Dr. Price, welcome back. The last time you were here, we 
were confirming you, and now we are getting a lecture from you 
on what we need to do to help you. And we are here to help you.
    Secretary Price. Thank you.
    Senator Isakson. All of the Georgians are proud of you and 
your service to our State.
    You just returned from your first trip overseas as 
Secretary, and you began that in Liberia, if I am not mistaken.
    Secretary Price. I did.
    Senator Isakson. What did you learn, particularly with 
respect to our response to the Ebola outbreak, which ground 
zero, I think, was Liberia?
    Secretary Price. It was indeed, Senator. Thank you so much. 
I appreciate your support and your service to our great State.
    My first trip overseas was--we stopped first in Liberia. I 
wanted to do that, because I wanted to express our appreciation 
to the Americans who were working over there, especially during 
that Ebola crisis, and to also demonstrate our continued 
commitment for global health security and to thank the Liberian 
government for what they had done to elevate and increase their 
ability in the area of infectious disease.
    What I saw was incredibly inspiring. And you all would be 
so remarkably proud of the American people who are forward 
deployed--if you will--in global health, individuals from the 
CDC, from the NIH, from HRSA, who are doing all that they can 
to make certain that we address the health challenges that 
exist around the world, especially around infectious disease.
    It paid off in absolutely remarkable benefits, and we saw 
that because of the most recent outbreak of meningitis that 
occurred in Liberia, and that outbreak--the surveillance that 
was done, the detection that was done, the prevention of spread 
that was done, and the treatment that was done, was only 
possible because of the work that had been done in Liberia 
since the Ebola outbreak and since that challenge was resolved.
    So I was just uplifted and inspired by the incredible work 
of the American people who are dedicating their lives to 
assisting the health of individuals overseas.
    Senator Isakson. Well, CDC did a phenomenal job, as did 
HHS.
    Secretary Price. Absolutely.
    Senator Isakson. I want to point out that the President's 
budget cuts by $136 million the Preparedness Fund, a lot of 
which went to the initial response to Ebola in Africa, along 
with a partnership with Emory University to have the first 
place we could actually bring some of those victims to the 
States. We need to work to see to it that the funding is there 
so we can have the same type of response the next time an 
outbreak takes place, wherever it is in the world, because we 
are the world's clinic, if you will, for emergencies and 
disasters like that.
    Secretary Price. Yes.
    Senator Isakson. Secondly, you had a partner by the name of 
John Knox, if I am not mistaken. Is that right?
    Secretary Price. I did.
    Senator Isakson. You may remember, John operated on my son, 
Kevin, 30 years ago and saved his leg from a terrible injury 
and a terrible accident. It took him 9 months to recover. Eight 
of those months he recovered at home.
    My wife and I went to school. We took lessons in how to 
clean ports and put the antibiotic drips into him so he could 
fight infection in his bone marrow while he recovered at home.
    Since 1989 when that accident took place, over time 
reimbursement for antibiotics and home infusion went away. In 
fact, there was a push to drive everybody into the hospital to 
recover and not as much reimbursement to encourage people to 
stay home.
    Fortunately, Senator Warner worked closely with us to see 
to it that we began focusing on reimbursement for durable 
medical equipment in the 21st Century Cures Act. I hope you 
will work with us to see to it we can expand coverage to get 
home infusion, wherever practical and possible, covered as a 
benefit so that we can have more people recovering in a less 
expensive, more hospitable environment than in hospitals and 
hospital facilities.
    Secretary Price. This is really important, Senator, because 
what we find--health care and medicine are dynamic. They change 
all the time. So what used to be able to be done only in a 
hospital, now can oftentimes be done as an outpatient or, in 
the instance of recovery, oftentimes at home. And home- and 
community-based services are absolutely imperative for us to 
have the flexibility to be able to do that.
    So that is one of the things that we are trying to 
concentrate on from a waiver standpoint in many different 
programs, as well as trying to incent the flexibility within 
existing programs so we can cover those kinds of treatments, 
not necessarily just in the venue that was previously selected 
when that was the standard of care, but in a new venue because 
it works better for the patient.
    Senator Isakson. Lastly, I just want to underscore what you 
said about experimenting to have our Medicaid coverage 
available and robust for our citizens. Your State and my State, 
Georgia, we have 1.9 million people on Medicaid--1.3 million of 
them are children. Fifty percent of all the live births in 
Georgia are paid for by Medicaid.
    So, as we go through the reforms that are necessary in 
Medicaid, we have to remember that we are talking about, first 
and foremost in our State--and I think in most others--children 
who benefit from those programs being robust or are hurt if 
they are cut. I look forward to working with you to see to it 
that we continue to provide the coverage that is necessary and 
experiment with ways to incentivize the program to meet the 
needs for our children in Georgia.
    Secretary Price. Thank you, Senator. Thank you for your 
leadership.
    Senator Isakson. Thank you, Mr. Secretary.
    The Chairman. Senator Stabenow?
    Senator Stabenow. Well, thank you very much, Mr. Chairman.
    Welcome, Secretary Price. There are so many things that I 
would like to talk to you about and actually debate with you in 
terms of what has been said and the positions of the 
administration. But I want to start with, I think, a very 
important basic assumption that you have made, and that is that 
the Affordable Care Act is falling apart. ``Oh my gosh, look 
what is happening. We have to dismantle it. Do something 
different, because it is falling apart.''
    And yet we know--to me it is like pulling the rug out from 
under somebody and saying, ``Oh my gosh they fell down.'' We 
have seen consistent moves by the administration, whether it 
was cutting in half the number of days that citizens have to 
sign up for insurance, whether it is no longer aggressively 
doing outreach to younger, healthier people, making sure 
everybody is in the pool so that costs do not go up, or whether 
it is doing what has been done to take away the commitments 
made to the insurance industry to make sure that they would be 
covering pre-existing conditions and have no caps on services, 
and so on.
    And it is laid out this morning in The Washington Post, 
when we look at the question of whether or not the White House 
is going to let the health-care system die. I want to just 
quote a little bit from there, because this is coming from the 
industry. The biggest source of industry anxiety right now is 
whether the administration and Congress will continue to fund 
cost-sharing subsidies that help 7 million Americans with ACA 
plans afford deductibles and co-pays, and, ``Absent that 
funding, I don't know if we are going to have much 
participation in the exchange market in 2018,'' said Tennessee 
Insurance Commissioner Julie Mix McPeak, a Republican who also 
serves as president-elect of the National Association of 
Insurance Commissioners.
    The uncertainty--the uncertainty is one of the top reasons 
insurers have cited when explaining why they are posting higher 
rates for the next year or withdrawing from markets altogether. 
Two weeks ago Blue Cross Blue Shield of North Carolina filed a 
rate increase of 22.9 percent. They said it would have been 8.8 
percent, not 22.9 percent, if the administration had committed 
to paying and basically keeping the commitments that were 
passed as part of health reform.
    And then finally, on Tuesday Anthem Blue Cross Blue Shield 
announced it was pulling out of the Federal exchange. You have 
mentioned that in Ohio. The President seemed to cheer that 
yesterday. I do not know why we are cheering that people are 
going to have less opportunity to have health care.
    If we spent a tenth of the time that has been spent 
undermining the health-care system working to make it better, 
we would be making terrific strides to lower costs for people.
    But here is what was said by Brad Wilson, the North 
Carolina chief executive of Blue Cross Blue Shield. ``We have 
to take a snapshot in time, which is right now. A lack of 
action by the administration,'' he added, ``yields a result we 
are currently seeing, higher premiums rather than lower 
premiums.''
    And so my question, Mr. Secretary, is, why do you believe 
it is in the best interest of American families to sabotage the 
health-care system that is today allowing American parents to 
take their children to the doctor?
    Secretary Price. Thank you, Senator.
    Well, let me just correct a few statements. Nobody is 
interested in the system dying. What we are interested in is 
making certain that the system works for patients and families 
and doctors. Nobody----
    Senator Stabenow. Then why are you not willing to--excuse 
me, but why are you not willing, then, to indicate that as long 
as we have the system we have, you are going to keep the 
commitments and reimburse the insurance companies so they have 
certainty?
    Secretary Price. Nobody is interested in sabotaging the 
system. Nobody is cheering the challenges that we have in the 
system.
    In your State alone, premiums were up 90 percent before 
this President came into office. The number of insurers was 
down before this President came into office. In your State, 
so----
    Senator Stabenow. Well, I can assure you, after meeting 
with the head of Blue Cross and Blue Shield of Michigan, they 
are going to file two rates when they file their rates: one if 
the administration keeps their commitments, and one if they do 
not. And if they do not, they are going to be much higher.
    So I think the question is, why would you not keep the 
commitments made? I understand you have a different view in 
terms of what the system should look like, which I disagree 
with. But in the meantime you have insurers--insurers--that are 
saying the reason the rates are going up is because of 
uncertainty and instability created by the administration. Why 
is that a good idea?
    Secretary Price. Actually, Senator, if you read further in 
that article, it talks about the increase in costs and 
decreasing insurance availability for individuals across this 
country before this administration came into office.
    So what we are trying to do is to fix the challenges that 
we have----
    Senator Stabenow. Well, let us start by keeping our 
commitments. I have more questions for another round, but let 
us start by making sure that the administration is keeping the 
current commitments, following the current law while we debate 
what should happen next.
    Thank you, Mr. Chairman.
    The Chairman. Did you have enough time to answer that 
question?
    Secretary Price. Yes, sir.
    The Chairman. Do you need more time?
    Secretary Price. No, I am fine. Thanks.
    The Chairman. Okay.
    Then we will turn now to Senator Cassidy.
    Senator Cassidy. Hello, Dr. Price.
    Secretary Price. Hello.
    Senator Cassidy. There are a couple of things I am 
encouraged by in your budget. Senator Cantwell and I last year 
put in a bill regarding direct primary care. For those 
unfamiliar with it, as physicians you and I know the way you 
lower cost is to empower the patient/physician relationship so 
that if the patient has a problem, instead of going to the ER, 
she can call her physician, and her physician can give her the 
advice.
    Direct primary care is a contractual relationship, and so 
there is more investment, perhaps, than in the other 
relationships that are out there, say an urgent care center 
where you might see the person once and never see them again.
    So Senator Cantwell and I put that together. And I like it, 
because it can decrease utilization. And by decreasing 
utilization, you decrease health-care costs, and ultimately we 
do not decrease the cost of insurance unless we decrease both 
utilization and the costs of health care.
    Secretary Price. Absolutely.
    Senator Cassidy. Do you have any comments on that direct 
primary care model and how robust you all plan to make that?
    Secretary Price. Well, it is an incredibly helpful program, 
and it gets to the point of the dynamism of health care.
    The opportunity that individuals may have to be able to 
have a personal physician, a primary care physician in all 
settings across our health system, would be, I think, 
absolutely beneficial to the ability for that patient, that 
individual patient, to get the kind of care that he or she 
needs.
    Right now, you cannot do that. So what we want to do is 
move toward a system that allows for more personalized care, 
and the DPC model--the direct primary care model--is one that I 
think holds great promise.
    Senator Cassidy. Now, if you will, it aligns the incentive 
between the patient and the physician.
    Secretary Price. Absolutely.
    Senator Cassidy. Let me talk a little bit about the per 
capita cap or, as I prefer to call it, the per beneficiary 
payment. And just a little history for those who may not know, 
it was first introduced by President Clinton as a concept, and 
Senators Phil Gramm and Rick Santorum simultaneously, as a way 
to align incentives between the patient, the State, and the 
Federal Government.
    I think we are actually seeing almost a modified version of 
that now as States are going to Medicaid managed care, aligning 
the incentive between the State as a payer with the Medicaid 
managed care company, and then the patient. I guess the way I 
look at the per beneficiary payment--because as you know, I 
introduced a bill in 2010; I do not know when it was, 112th 
Congress--which kind of brushed off the Phil Gramm-Bill Clinton 
proposal and updated it, if you will. It will align the 
incentive between the Federal and the State government.
    Secretary Price. Exactly, and it is so important because, 
as you know, having taken care of--as I did--Medicaid patients 
in our practices, the Medicaid population is not a monolithic 
population. There are individuals in the Medicaid population 
who are, as Senator Isakson said, healthy moms and kids. There 
are also individuals in the Medicaid population who are 
seniors, low-income seniors, and disabled, blind and disabled 
individuals.
    All of those individuals need to be treated uniquely, 
because they are unique individuals. And what we do as a 
system, by and large, is say, you have to take care of every 
one of those people exactly the same way, which does not allow 
for that kind of dynamism and flexibility in the program so 
that States can tailor their Medicaid programs to suit their 
Medicaid population.
    Senator Cassidy. And let me just say again I do not know if 
this is in the House bill, because the way we do the per 
beneficiary payment is a little bit different, is somewhat 
different than what the House does.
    But as an example of aligning incentives, as we know right 
now, if States recover waste, fraud, and abuse, they have to 
give back to the Federal Government the portion that the 
Federal taxpayer put in. So if it is a 60-percent State--40-
percent State, 60-percent Federal Government--60 percent of 
that recovery goes back to the Federal Government.
    That works to disincentivize the State to go after waste, 
fraud, and abuse, because they have to kick it back. Under the 
per beneficiary model that we put forward, the State would keep 
100 percent of recovered waste, fraud, and abuse, if you will, 
aligning the incentive for them to wring out that waste, fraud, 
and abuse.
    Secretary Price. It is those kinds of modifications and 
improvements to a system that I believe we all ought to be 
embracing, because it is those kinds of things that will then 
allow us to align the incentives, as you suggested, but also 
make certain that every individual in that interaction is 
working for the benefit of the patient, making certain that 
there is not the fraud and abuse, making certain that the 
patient is able to see the physician that he or she wants to 
see, making certain that the patient is able to have the kind 
of treatment that he or she desires.
    Senator Cassidy. Let me also point out that under the 
Medicaid Accountability and Care Act which I introduced, and 
then again in the Cassidy-Collins plan or the Patient Freedom 
Act, we have incorporated--States like California actually get 
more money, and some big blue States actually do well. Florida 
does better in terms of having more dollars for certain 
categories of patients in order to improve health care.
    So when I hear folks condemn it without understanding it, I 
feel like this could be an incredible missed opportunity to 
align those incentives to improve patient care, but also to 
protect the Federal and the State taxpayer.
    I look forward to working with you, and hopefully you will 
have folks on the other side of the aisle.
    I yield back.
    The Chairman. Okay.
    Senator Carper?
    Senator Carper. Thanks, Mr. Chairman.
    I want to take a moment just to began, if I could, Mr. 
Chairman, to commend you and Senator Grassley for something you 
did--gosh, I want to say 24 years ago. And what you did is, you 
cosponsored legislation authored by Senator John Chafee that 
called for creating in every State marketplaces, exchanges. You 
called for not only establishing the exchanges and marketplaces 
in every State, but to also say that, in order to make sure 
that the insurance companies had a healthy pool of people to 
insure, there would be an individual mandate, that people had 
to get coverage. You cannot force people to get coverage, but 
you say, you have to get coverage and fine them somehow if they 
do not, incentivize them to get the coverage.
    I want to congratulate you on cosponsoring legislation that 
provided for an employer mandate and that also provided for the 
idea that insurance cannot deny coverage to people who have a 
pre-
existing condition.
    All those ideas are a part of Romneycare in Massachusetts. 
And frankly, all of those are a part of the Affordable Care 
Act.
    And the parts of the Affordable Care Act that the 
Republican Congress seem to like the least are those ideas. I 
think there is a real irony in all this. I like those ideas. I 
studied economics at Ohio State. I was a Navy midshipman. I 
like market forces. I like trying to harness market forces and 
make them work.
    You came up with a good idea in 1993. And I just wish to 
heck that you would work with us to try to make sure that those 
good ideas have a chance of working. And the reason why the 
marketplaces are failing in places like you mentioned, in Ohio, 
in your statement, Mr. Chairman--the reason why they are not 
working is, we have basically undermined the individual mandate 
so that people know they do not really have to get coverage. 
The young people are not.
    We have taken off the training wheels, so to stabilize the 
marketplaces and insurance companies--they lost their shirts in 
2014 because of it. The lost less money in 2015. It got better. 
They raised their premiums, they raised their copays, they 
raised their deductibles, and they did better.
    A Standard and Poor's column said, rather than the 
marketplaces being in a death spiral at the end of 2016, they 
were actually recovering until our new administration came in 
and said, well we are not sure if we are going to enforce the 
individual mandate, and by the way, we do not know for sure 
whether we are going to extend the cost-sharing arrangements.
    That provides unpredictability, lack of certainty for the 
insurance companies. What do they do? They say, we are going to 
raise our premiums more. Well, you are destabilizing the very 
idea that these guys came up with 24 years ago.
    The Chairman. Well, if I could just interrupt for a second.
    Those were ideas that were against--it was part of the 
anti-Hillarycare bill.
    Senator Carper. They were good ideas. I commend you for 
them. If my life depended on it, I could not tell you what 
Hillarycare did. I could not tell you, but I know what your 
bill did. And frankly, they were good ideas.
    And now we are undermining, undercutting them. Why? Dr. 
Price, why?
    Secretary Price. Senator, I appreciate the observation. I 
would add to that that there are significant challenges out 
there, and there were before this administration started. In 
your State alone, premiums were up 108 percent before this 
administration started. In your State alone, there were fewer 
insurance companies offering coverage on the exchange before 
this administration started.
    So what we are trying to do is address, especially, that 
individual and small group market that is seeing significant 
increases in premiums, increases in deductions----
    Senator Carper. What are you doing? What are you doing to 
do that? How are you stabilizing the marketplaces? There are 
some good ideas. The three Rs, what are you doing on those--
reinsurance, risk adjustment, risk--what are you doing there?
    Secretary Price. We passed--we put in place a market 
stabilization rule earlier this year that identified the 
special enrollment periods and the grace periods to make 
certain that they were more workable for both individuals and 
for insurance companies.
    We allowed the States greater flexibility in determining 
what a qualified health plan was to try to provide greater 
stability for the market. We put out word to all Governors 
across this Nation on both 1115 and 1332 waivers with 
suggestions regarding what they can do to allow for greater 
market stabilization in their States.
    And we look forward to working with you and other Senators 
to try to make certain that all those individuals, not just in 
the individual and small group market, but every single 
American has the opportunity to gain access to the kind of 
coverage that works for them and their families.
    Senator Carper. Let me just mention Medicaid. When I came 
to the Congress a long time ago before I was Governor, I used 
to think that Medicaid was health-care coverage for mostly 
women with children, poor women and children. You know where we 
spend most of our money--you know this. Most of the money we 
spend in Medicaid today is for old people, and they are in 
nursing homes, and a bunch of them have dementia.
    When we talk about cutting $800 billion out of the program, 
it is not just the poor women and children who are going to get 
hurt, it is those old people. And it is a lot of people between 
the ages of 50 and 65 who are white males who are going to be--
so it is a lot of veterans. Their only hope and only chance of 
getting, in some cases, access to medical care, because they 
cannot get it--they do not qualify for VA coverage--is through 
Medicaid.
    The last thing I want to say is this. Mr. Chairman, here is 
an idea. This is--I extend this idea with good intent. I spent 
8 years as a Governor. I loved being a Governor. I love being a 
part of the National Governors Association.
    John Engler and I, Governor of Michigan, used to come here. 
And here in the Ways and Means Committee in the House, we used 
to testify on welfare reform. And we would say, these are the 
views of the Governors, Democrat and Republican. This is what 
we think we ought to do.
    This is an issue that cries out for getting Governors to 
sit at the table and say, here is how this is going to affect 
us. This is the way the system works or why it does not work. 
This is why we like the idea of per capita caps and why it does 
not work.
    That is what we ought to be doing. I must say, the 13 folks 
who have been picked to help figure out a Republican 
alternative to the House-passed mess--it would be a lot more 
informative if we could have that kind of hearing. This is 
fine. I am happy to see you, Dr. Price, but that is actually 
something that might move us to a principle of compromise and 
get things done. People want us to get stuff done, and the idea 
that we are going to do it all Democrat or all Republican is 
crazy.
    Thank you for joining us.
    Secretary Price. Mr. Chairman, if I may just comment on 
that, because I think it is important for people to appreciate 
the work that the Department is doing.
    We met with the National Governors Association, met with 
Governors on both sides of the aisle to try to solicit their 
input in the kinds of suggestions that they would have 
regarding 1115 and 1332 waivers, those that affect the Medicaid 
program and the individual market. So we are doing all that we 
can to try to make certain that States are able to address the 
challenges.
    Senator Carper. Dr. Price, just to be clear. When Barack 
Obama left office--was it a perfect administration? No.
    When he left office, there was an insurer in every county 
of every State in this country. Thank you.
    The Chairman. Senator Cardin?
    Senator Cardin. Secretary Price, thank you very much.
    I have heard your commitment to make sure that you will do 
everything you can to help all people in this country get 
access to quality health care. And that is something that we 
all agree on; that is what we want to get done.
    I want to get to some of the practical problems here. I was 
in Federalsburg on Monday. It is closer to where Senator Carper 
lives than where I live. It is on the Eastern Shore of 
Maryland, Caroline County. It is a very rural community.
    They do not have the same access to health-care providers 
that we have in our urban centers. And I visited the 
Federalsburg Elementary School Wellness Center, where we have 
the Choptank qualified center that provides direct services to 
our children within the elementary school.
    And they are capable of doing that. This is, for many of 
these children, their only real ability to get access to 
primary care and to have someone who can check up on their 
health. And Choptank is able to do that under current law. But 
they tell me, as the legislation is passing from the House to 
the Senate, that that direct reimbursement would be cut off.
    They also told me that if they cannot continue their flows 
through the Medicaid program, they will clearly not be able to 
continue the services that they are providing today in Caroline 
County.
    So my question to you--I understand your commitment to help 
all areas. Today our qualified centers are providing lifelines 
in many communities. They rely upon creative ways to provide 
care in rural areas, including within school settings. And they 
depend greatly on the reduced numbers of uninsured and those 
covered under the Medicaid program for comprehensive 
reimbursement in order to be able to maintain their presence.
    So how do we ensure that, as we go through this transition 
that the administration is talking about, the children in 
Caroline County are going to be able to continue to get their 
health-care needs met?
    Secretary Price. Well, I appreciate that, Senator. There 
are significant challenges in the rural areas of our Nation for 
the provision of health services, and those have been present 
for a long, long time. And there is a strong commitment on the 
part of our department, and certainly on the part of the 
President, to make certain that rural health services are 
available.
    So whether it is through grants to the States, whether it 
is through an opportunity for various health programs within 
schools or elsewhere to make certain the children have the kind 
of health care, and not just coverage, that they need, then we 
are absolutely committed.
    One of the things that our budget includes is something 
called a New American Health Block Grant, which would provide 
resources to States to do just this sort of thing, to make 
certain that folks in rural areas of States have the 
opportunity to gain the kind of coverage and care that they 
need.
    So I look forward to working with you to make certain that 
we are able to make that happen.
    Senator Cardin. The other area that I want to cover, you 
and I talked about in my office during the confirmation 
process, and I will bring it up again today. I want to know 
about your commitment to deal with minority health and health 
disparities.
    We have separate agencies today to deal with it. We have an 
institute at NIH. And as I go around and look at some of the 
historic discriminations within our health care and recognize 
that health care is not equally available, and our focus has 
not been to all communities equally--and we are trying to 
compensate for that today--I worry about what you are doing, in 
Medicaid particularly.
    Every minority community I go to, they mention to me 
Medicaid, and that there is no capacity at the State level to 
pick up the slack if the Federal Government withdraws its 
commitment, either in the numbers of people who are covered or 
in the benefits that are reimbursed.
    So how do you square a commitment to continue down the path 
to reduce minority health disparities in this country and, not 
only the reduction in the bill that passed the House, but also 
the President's budget with such a large cut in Medicaid?
    Secretary Price. This is incredibly important, and I cannot 
remember whether I mentioned it in this committee for my 
confirmation hearing or in the other one, in the HELP 
Committee. But the disparities and health outcomes are 
absolutely unacceptable to all, because what we see is its--and 
it is not just necessarily rural versus urban areas.
    There are areas within urban centers--I know of one in 
Atlanta where there is a zip code where the health outcomes, 
the disparities, are absolutely astounding in terms of the 
mortality that exists, the addiction that exists, the chronic 
disease that exists. And that is not because of lack of 
services close by, because it is in the center of the city. But 
imagine, if you would, please, a system that allowed for the 
Medicaid program in the State of Georgia to provide increasing 
resources to that zip code to provide a case manager--if you 
will--for every single individual in that zip code who has a 
chronic disease within the Medicaid program. That is now not 
possible. You cannot do that.
    That is the kind of waiver, that is the kind of 
partnership, that I think is so incredibly important to make it 
so that we actually identify those folks who need greater 
assistance if we are going to end the disparities that are out 
there, which you and I both have a commitment to ending.
    Senator Cardin. I am all for flexibility for the States. I 
appreciate that, but I also know the pressures on State 
budgets.
    And I know in my State of Maryland, where our Governor and 
legislature have been pretty aggressive in helping the Medicaid 
population, they cannot pick up the slack. A waiver will not 
give them what they need to be able to make that type of 
commitment to underserved areas.
    Thank you, Mr. Chairman.
    The Chairman. Okay. Senator Casey?
    Senator Casey. Thank you, Mr. Chairman.
    Secretary Price, good to be with you this morning.
    I want to start by referencing a letter that I and, I 
guess, 14 other Senators sent to you recently about the House 
bill H.R. 1628. But in particular, I wanted to reference the 
Congressional Budget Office report that just came out on the 
24th of May. Of course, this is a nonpartisan report by the 
Congressional Budget Office assisted by the Joint Committee on 
Taxation.
    I just delivered to the table, next to you there, a copy of 
the CBO report so you could go to the page. I direct your 
attention to page 17 of the CBO report. On that page, the 
following statement is set forth there: ``Medicaid enrollment 
would be lower throughout the coming decade, culminating in 14 
million fewer Medicaid enrollees by 2026,'' a reduction of 
about 17 percent from current numbers.
    It then references this chart which you will see on page 19 
showing the numbers going down for Medicaid over that time 
between 2018 and 2026, all bars going down.
    I reference that in the context of what you said on CNN on 
May 7th. I am quoting you now, and the transcript is right in 
front of you. ``There are no cuts to the Medicaid program.'' 
That is what you said.
    Do you still stand by that statement being made on CNN?
    Secretary Price. The Medicaid program under the President's 
budget would increase by----
    Senator Casey. Secretary Price, ``yes'' or ``no''? You can 
explain after that, but ``yes'' or ``no''? Do you stand by that 
statement you made on May 7th on CNN?
    Secretary Price. What I stand by is the statement that the 
President's budget----
    Senator Casey. Do you stand by that statement? That is a 
very--I think there are eight words.
    Secretary Price. What is the baseline?
    Senator Casey. ``There are no cuts to the Medicaid 
program.'' Do you stand by that statement?
    Secretary Price. What is the baseline?
    Senator Casey. I am not----
    Secretary Price. If there are no cuts, it is relevant.
    Senator Casey. You have the statement in front of you.
    Secretary Price. Yes, I stand by that statement.
    Senator Casey. Okay.
    Secretary Price. It is relative to something.
    Senator Casey. Go ahead. You can--go ahead.
    Secretary Price. If the baseline is today's amount of money 
being spent on Medicaid, the President's budget provides for an 
increase, a CPI medical or CPI medical plus-one increase, in 
Medicaid spending for the programs----
    Senator Casey. Are you saying the statement in the CBO 
report on page 17 is not accurate?
    Secretary Price. I am saying that the statement that CBO 
made does not include the constellation of activities within 
the administration regarding how we would move forward on 
health care.
    Senator Casey. CBO says there will be 14 million fewer 
Medicaid enrollees. So that is one.
    Secretary Price. Do you have the CBO report on the ACA when 
it was proposed in 2010, because what they said then----
    Senator Casey. I am talking about the House Republican bill 
that was passed. That is what we are talking about today.
    Secretary Price. I am talking about what the CBO did, 
because they had a similar graph about the number of 
individuals who would be covered now, and in fact, they were--
--
    Senator Casey. Let me direct your attention to the same CBO 
report you have in front of you, page 13. On the top of that 
page, it says the following; the introductory sentence is, 
``The total deficit reduction includes the following amounts 
shown in table 3 at the end of the document.'' The first bullet 
under that is, ``A reduction of $834 billion in Federal outlays 
for Medicaid.'' So do you still assert in light of that and in 
light of the previous CBO statement--do you still assert that 
there are no cuts to the Medicaid program? Do you stand by that 
statement?
    Secretary Price. Senator, as you understand, it depends----
    Senator Casey. All I am asking you to do, Mr. Secretary, is 
to tell us whether you stand by that statement or not.
    Secretary Price. I stand by that statement.
    Senator Casey. Okay.
    Finally, let me go to a statement that was made in the CBO 
report. Now I am going to page 19 and 20, which you have in 
front of you. At the bottom of page 19, the following is set 
forth: ``Under the act''--meaning under the Republican bill 
passed in the House--``premiums for older people could be five 
times larger than for those younger people in many States, but 
the size of the tax credits for older people would only be 
twice the size of credits for younger people. As a result''--
and here is the first bullet point--``for older people with 
lower income, net premiums would be much larger than under 
current law on average.''
    Then it refers to table 5 at the end of the report. So I 
ask you, in the context of another statement you made--now, 
this is ``Meet the Press'' in March--March 12th. You said that 
``nobody will be worse off financially as a result of the 
bill.'' Do you stand by that statement?
    Secretary Price. I do not believe that statement was in 
reference to the bill. It was in reference to the health-care 
plan that we have put forward, and I stand by that statement.
    The Chairman. Senator, your time is up.
    Senator Casey. Well, I hope that you focus more on, not 
just the proposed reforms you talk about for Medicaid, but I 
hope you focus on people like the 15 million Americans who get 
Medicaid because they have a disability.
    We are all for a discussion about making programs better. 
But I think you should focus more intensively on those people 
and be truthful when you are commenting about something as 
important to American lives as the Medicaid program.
    And I would argue, sir, you have been deliberately 
misleading based upon those statements.
    Secretary Price. Senator, with respect, that is precisely 
what we are focusing on. The American people understand and 
appreciate that the health-care system that we currently have, 
for many of them, is not working. For many of them in the 
Medicaid program, it is not working.
    And what we are trying to do--and we would love to have 
your support. What we are trying to do is to make certain that 
we have a system that responds to the wishes and needs and the 
health-care needs of all Americans.
    Senator Casey. We all agree on that. But I think you have 
to start being straight with people about what will happen.
    These are major cuts. The CBO said it in more ways than 
one. I think you should be truthful about that.
    The Chairman. Senator McCaskill?
    Senator McCaskill. Thank you, Mr. Chairman.
    Let me start by saying, Mr. Chairman, that you and Senator 
Grassley I have a great deal of respect and admiration for.
    So my first question that I would make of the chair is, 
will we have a hearing on the health-care proposal?
    The Chairman. Will we?
    Senator McCaskill. Yes.
    The Chairman. We have already had one, but----
    Senator McCaskill. No, I mean on the proposal that you are 
planning to bring to the floor of the Senate for a vote. Will 
there be a hearing?
    The Chairman. Well, I do not know that there is going to be 
another hearing, but we have invited you to participate and 
give your ideas and----
    Senator McCaskill. That is not true, Mr. Chairman. Let me 
just say, I watched carefully all of the hearings that went on 
on the Affordable Care Act. I was not a member of this 
committee at the time, although I would have liked to have 
been.
    Senator Grassley was the ranking member. Dozens of 
Republican amendments were offered and accepted in that hearing 
process. And when you say that you are inviting us, and I heard 
you, Mr. Secretary, just say, ``We would love your support.'' 
For what? We do not even know. We have no idea what is being 
proposed.
    There is a group of guys in a backroom somewhere who are 
making these decisions. There are no hearings in the House.
    I mean listen, this is hard to take, because I know we made 
mistakes on the Affordable Care Act, Mr. Secretary. And one of 
the criticisms we got over and over again was that the vote was 
partisan. Well, you could not have a more partisan exercise 
than what you are engaged in right now.
    We are not even going to have a hearing on a bill that 
impacts one-sixth of our economy. We are not going to have an 
opportunity to offer a single amendment.
    It is all being done with an eye to try to get it by with 
50 votes and the Vice President. I am stunned that that is what 
Leader McConnell would call ``regular order,'' which he 
sanctimoniously said would be the order of the day when the 
Republicans took the Senate over.
    We are now so far from regular order that new members do 
not even know what it looks like. And I know that does not make 
you happy, Mr. Chairman or Senator Grassley, because you have 
been in the Senate so long. You know the value of the hearing 
process and the amendment process.
    And even though the vote ended up being partisan, just as 
yours will be, the amendment process was not. Both of you had 
amendments that were put into that bill, as did other members 
of this committee. I want that opportunity. Give me that 
opportunity. Give me an opportunity to work with you. That is 
what is so discouraging about this process.
    So, Mr. Secretary, I want to ask you. There is a 27 year-
old young man who lives in Jefferson County, and he is finally 
making enough money that he can do one or two things. He can 
either buy a health insurance policy or he can buy a new 
Harley. And which do you think he is going to buy?
    Secretary Price. You tell me.
    Senator McCaskill. I think he is going to buy the new 
Harley, because he feels young and invincible. And he has 
wanted a Harley his whole life.
    He buys a new Harley. He lays it on the pavement on the 
interstate. An 18-wheeler cuts him off, and he is life-flighted 
to the hospital. Do you believe that hospital should treat him?
    Secretary Price. Absolutely. We have an obligation to do 
so.
    Senator McCaskill. In America, we treat you whether you are 
insured or not; correct?
    Secretary Price. Yes, and there is a mandate that he buy 
insurance right now.
    Senator McCaskill. Okay, but you are going to do away with 
that. So we are now----
    Secretary Price. In your scenario, is it working?
    Senator McCaskill. That is not my question. I am saying----
    Secretary Price. It was my question.
    Senator McCaskill. I am saying under your scenario, he does 
not have to buy insurance. He buys the Harley, he is life-
flighted to the hospital. He has traumatic brain injuries, and 
we deliver $3 million worth of care for him.
    My simple question to you, Mr. Secretary, is, who pays for 
it?
    Secretary Price. Well, sadly it is spread among the entire 
system, and frankly, nobody pays for it from the Federal 
Government standpoint.
    Senator McCaskill. Correct. So people pay for it.
    Secretary Price. Or people provide the services without any 
compensation whatsoever.
    Senator McCaskill. Well, they have to make it work out at 
the end of the year. So what the hospital does is, they call 
the insurance company and they say, ``We had X amount of 
uninsured care this year. We are going to have to raise your 
prices for labor and delivery, or we are going to have to raise 
your prices for an angioplasty.''
    And then that insurance company calls the small business 
down the road and says, ``I have bad news for you. We are going 
to have to raise your premiums because the hospital is charging 
us more, because we have to cover the uninsured care.''
    Secretary Price. And in your State, premiums were up 145 
percent between 2013 and 2017.
    Senator McCaskill. That is not true.
    Secretary Price. Yes, ma'am.
    Senator McCaskill. No.
    Secretary Price. We will be glad to show you the numbers.
    Senator McCaskill. I will be glad to debate you on the 
numbers. But the point is that when we add 24 million more 
uninsured, who is going to pay the bills?
    Secretary Price. Well, we will not be adding 24 million 
uninsured.
    Senator McCaskill. So you disagree with the CBO score?
    Secretary Price. Absolutely.
    Senator McCaskill. Okay.
    But if there are any more uninsured, if anybody is kicked 
off Medicaid, who pays those bills? I want to make sure 
everybody understands, we are just passing along these costs to 
people who have insurance policies.
    Secretary Price. There are 20 million individuals in 
America right now who do not have insurance under the current 
system. That is a problem.
    Senator McCaskill. I know, and we are paying their bills by 
higher premiums.
    Secretary Price. Exactly. And so what we are trying----
    Senator McCaskill. So we are going to increase that and 
create even more uninsured.
    Secretary Price. On the contrary.
    The Chairman. Okay. Okay. Your time is up.
    Secretary Price. We are trying to decrease the number----
    The Chairman. Senator Grassley has one question. He has 
been waiting here patiently, and----
    Senator McCaskill. Well, I was only over by 35 seconds, Mr. 
Chairman. I think I did okay. [Laughter.]
    The Chairman. You have done so much better than the rest of 
your colleagues. I am very proud of you.
    Senator Grassley?
    Senator Grassley. Mr. Secretary, I only have one question, 
because I have to run to another meeting. So I am going to ask 
you this one question and then submit other questions for you 
to answer in writing.
    The Rural Community Hospital Demonstration program was 
established in a bipartisan manner to protect patients' access 
to health care. These hospitals are collectively called 
``tweeners.''
    Another bipartisan piece of legislation, the 21st Century 
Cures Act, extended this program. The language was very, very 
clear. The program was to be extended beginning on the date 
immediately following the last day of the initial 5-year 
period.
    Despite this clear language, CMS proposes to begin 
implementation of this extension on or after October 1, 2017. 
This gap in implementation is inconsistent with congressional 
intent, which requires a seamless extension of this critical 
program. Furthermore, it is inconsistent with the way the 
agency implemented the first 5-year extension of this program.
    I have a bipartisan letter to Administrator Verma asking 
her to look at the alternative payment timing that was included 
in the proposed rule. I would like to submit the letter for the 
record, Mr. Chairman.
    The Chairman. Without objection.
    [The letter appears in the appendix on p. 45.]
    Senator Grassley. And by the way, you, Mr. Secretary, were 
cc'd on this letter.
    So, Dr. Price, a very simple question. I hope you can give 
consideration to this request in this letter, because in 
several States, many States, this is an issue, particularly 
rural States. One of them is Alaska, as an example. I hope you 
can help us make sure that we have a seamless implementation of 
this program.
    Secretary Price. Absolutely, Senator. And we will get back 
with you, because my understanding in looking into this is that 
the proposed rule was put out in April of this year and allowed 
for rural hospitals to apply to this program, literally, as we 
speak. I think the deadline was the latter part of May.
    But we have a commitment to it, and it is so incredibly 
important for rural areas. We will get back with you, and I 
look forward to working with you on it.
    Senator Grassley. Thank you.
    I yield back my time.
    The Chairman. Thank you.
    Senator Brown?
    Senator Brown. Thank you, Mr. Chairman.
    Mr. Secretary, thank you for joining us.
    You call the opioid epidemic a key public health priority, 
and you highlight how this year's budget proposes a $50-million 
increase in funding over previous levels, up to $811 million. 
Eight hundred eleven million dollars might seem like a lot of 
money, and it is. But do you know what is a bigger number? Nine 
hundred thirty-nine million dollars--$939 million is the amount 
of money one State, my home State of Ohio, spent on fighting 
the opioid epidemic last year alone. Nine hundred thirty-nine 
million dollars my State spent.
    This chart came from the Ohio Department of Medicaid's 
website, Republican Governor Kasich's website. In 2016, Ohio 
invested $939 million in fighting this opioid epidemic.
    Now, do you know where 70 percent of that total $939 
million came from? Six hundred fifty million dollars came from 
Medicaid, $650,200,000 came from Medicaid. Despite this 
investment, despite Governor Kasich investing nearly $1 billion 
in prevention, education, medication, assisted therapy, and 
other treatment, eight people--if today is like most days--
eight people in my State will die from an opioid overdose. Four 
thousand Ohioans died from overdoses last year. We are on track 
to far exceed that number. In some counties, we have already 
exceeded the number of the year before, and this is only June.
    Forty-three people died in Cuyahoga County, the State's 
largest or second-largest--it is really close now--county in 
the State. Forty-three people since Memorial Day.
    This epidemic continues to devastate communities in my 
State. I know you know that. I agree with what you wrote in 
your testimony: we are not winning this fight against this 
epidemic.
    But I am confident we would lose far more people, far more 
lives, have far more families turned upside down, if we were 
not spending this money, if Medicaid were not spending this 
$650 million. Do not take my word for it. Two weeks ago, my 
colleagues--both members of this committee--Senator Portman, my 
Ohio friend, Republican, and Senator Carper, my Delaware 
friend, Democrat, held an important hearing about this epidemic 
to discuss proposals.
    I want to quote from a couple of people. The witnesses on 
the second panel of that hearing were a doctor and a police 
chief from Newtown, OH, the most conservative part of our 
State. He was the former head of drug control policy and 
coroner from Cuyahoga County. Both voiced opposition to either 
ending the Medicaid expansion or cutting the program.
    The four experts brought by Senator Portman to his 
committee all said, do not cut Medicaid--do not cut it and do 
not end the expansion.
    The Cuyahoga County coroner noted anything like Medicaid 
expansion being eliminated that limits people's access to 
health care--I cannot see any good coming from that in this 
crisis, especially with the high rates of mortality. The police 
chief from Newtown, OH, a little town near Cincinnati, he is on 
the front lines of this fight. He said we should not be 
decreasing Medicaid.
    He talked about one of the programs that his teams are 
doing in the Hamilton County area, signing people up for 
Medicaid, then getting them into treatment. You sign them up 
for Medicaid, then you get them into treatment.
    Right now, 200,000 families in Ohio are getting opioid 
addiction treatment who have insurance because of Medicaid. Yet 
your administration continues to talk down, to criticize 
Medicaid expansion and to suggest cuts in Medicaid.
    He went on to say, taking away Medicaid would make this 
fight even more difficult. I do not even want to imagine the 
number of overdose deaths we would have had in Ohio if our 
Republican Governor--I am proud of what he did, and he has 
gotten a lot of criticism from President Trump, and a lot of 
criticism from your party--had not expanded Medicaid to those 
700,000 families.
    The budget proposal your team put together cuts Medicaid by 
$600 billion. That is in addition to the House ACA repeal which 
cuts Medicaid by $800 billion. Medicaid covers one-third of all 
substance abuse treatments in communities across Ohio. In Ohio 
it covers 50 percent of all medication-assisted treatment.
    You sit in front of us. You have taxpayer-funded health 
insurance. We have taxpayer-funded health insurance. The 200-
plus Republican members of the House who have taxpayer-
subsidized health insurance are all willing to take it away 
from these 200,000 Ohioans getting opioid treatment.
    You say you are interested in fighting the opioid epidemic, 
but your policy proposals tell a different story. You flat-fund 
substance abuse treatment grants. You actually reduce spending 
on prevention programs in the National Institute on Drug Abuse.
    You cannot treat the disease with just grant funding. You 
have all of a sudden found that we can do all kinds of things 
with grants. No you cannot. Compare it to the size of this 
problem. It is like, maybe you do not know many--but I do not 
want to go there.
    I think probably Senators do not meet enough people who are 
in these programs and who are benefitting from them. But you 
would never propose we fight cancer and pay cancer treatments 
through a $50-million increase in a grant program.
    You said in a recent op ed, and I appreciated it, in The 
Charleston Gazette Mail that increasing access to substance-use 
disorder treatment, including medication-assisted treatment, is 
part of your department's plans to address the opioid crisis. 
What you are not telling your West Virginia readers, Donald 
Trump's second-best State in the country, you are not telling 
them what you are really doing.
    So my question is--sorry for the preface, but how do you 
plan to increase access to treatment when you cut the single-
biggest source of funding for treatment by $600 billion in your 
budget? How does that possibly add up in the Trump math, the 
Trump-Price math of 2017?
    Secretary Price. Yes, Senator, you know that I visited your 
State, the southwest corner of your State, to visit with 
victims of opioid addiction, the parents of kids who died. One 
mom told me about her son who died in the bathroom of a Macy's 
from an overdose.
    The scourge that we have running across this country right 
now is absolutely unacceptable to you. It is unacceptable to 
me. It is unacceptable to the President.
    Our commitment is to make certain that what we put in place 
is a program that actually works. You have seen the graphs. The 
numbers continue to go in the wrong direction.
    So if we are going to be married to a system that has 
resulted in 52,000 overdose deaths in 2015, that is not a 
system I want to be married to. What I commit to you, and what 
I look forward to working with you on is a system that actually 
works for the parents who are suffering today because they have 
lost a loved one. What I commit to working with you on is a 
system that actually works for those who are addicted who want 
to gain recovery and treatment. So that is the system that I 
look forward to working with you on.
    Whether or not it is paid for through the Medicaid system 
or whether or not it is paid for through--imagine a system that 
actually isolates the individuals' treatment for addiction and 
takes it out of the current system that we have so that we can 
focus resources on those individuals who have the addiction.
    Imagine that kind of system, what that would do for (1) the 
ability to treat those folks, but (2) the ability for the 
system to actually thrive in a better way fiscally as well.
    Imagine a system that works better than the one that 
results in 52,000 Americans dying of overdoses.
    Senator Brown. It is a little curious to blame Medicaid, as 
you seem to be doing, for the system that has resulted in 
50,000 deaths. It is not because of Medicaid.
    I mean, how do you do this when 200,000 people right now 
are getting treatment in my State? They are getting treatment. 
They are not all successful. We know people are in and out, and 
it often takes three, or four, or five times, but if you cut 
Medicaid, as you want to bludgeon Medicaid, how are you--you 
can talk about a grant program and all of this good talk, and I 
know you mean it in terms of wanting to take care of people. 
You are a physician. I know all of that, but how does this 
possibly work if you are going to cut the biggest revenue 
stream that takes care of these families and puts them in these 
treatment programs?
    The Chairman. I will allow you to answer that. You are way 
over your time, Senator. Answer that, and then I am going to go 
to Senator Cantwell.
    Go ahead.
    Secretary Price. That is what I am trying to encourage us 
to look at, is a system that actually works for the individuals 
who are suffering from this addiction, a system that actually 
focuses attention and focuses treatment on it, a system that 
recognizes that we need greater public health surveillance, a 
system that recognizes that pain management in this Nation is 
flawed, a system that has not put the kind of resources into 
research so that we can turn this curve in an appropriate 
direction, which is down.
    We continue to tolerate a system that allows for these kind 
of addiction and overdose deaths in this Nation. It is 
unacceptable to me, and I will not stand for it.
    The Chairman. Senator Cantwell?
    Senator Cantwell. Thank you, Mr. Chairman.
    Secretary Price, I have a couple of questions. There have 
been press reports that the Department is working on a rule 
that would deny birth control for employees. Are you aware of 
this?
    Secretary Price. There is a proposed rule that is out 
currently on conscientious objection in the contraceptive 
mandate.
    Senator Cantwell. You are proposing that you will allow 
employers to discriminate against woman in having birth control 
be part of an insurance policy provided by employers?
    Secretary Price. What is currently occurring is 
solicitation of input, and in that process we are--I am not 
able to make any further comment.
    Senator Cantwell. You cannot make a comment whether you 
think that birth control should be part of basic health offered 
in insurance plans?
    Secretary Price. I think that for women who desire birth 
control, it ought to be available.
    Senator Cantwell. Are you promulgating the rule?
    Secretary Price. There is a proposed rule that has been put 
forward.
    Senator Cantwell. So you think that employers should offer 
birth control as part of insurance programs, and not be able to 
just say on a conscientious basis they do not believe in 
providing it?
    Secretary Price. No. I believe that women who desire to 
have access to birth control ought to be able to have access to 
birth control.
    Senator Cantwell. Through their employer?
    Secretary Price. I believe that women who desire to have 
access to birth control ought to have access to birth control.
    Senator Cantwell. Okay. This is a very big problem. Women 
cannot be discriminated against by their employer who wants to 
cherry-pick various aspects of women's health. So if this is 
the intent of this rule, I guarantee you, there will be a big 
fight on this issue.
    I want to ask you about proposed Medicare cuts, because I 
know the administration had said that they were not going to 
cut Medicare, but my understanding is that the budget includes 
a 2-year extension, a mandatory sequestration, which would 
impose a 2-
percent cut on Medicare providers, such as hospitals and rural 
hospitals. The extension of the mandatory sequester would be 
about a $30-billion cut from the Medicare program. So does your 
budget include that?
    Secretary Price. I think that what you are referring to is 
the continuation of current law, and the budget accommodates or 
reflects current law.
    Senator Cantwell. So you are saying that the extension of 
the mandatory sequester is not a cut to Medicare?
    Secretary Price. Again, it is the same kind of question 
that Mr. Casey had. It depends what your baseline is. If your 
baseline is current law, then there are no reductions.
    Senator Cantwell. Okay. And so you believe we should be 
making these reductions to rural health-care facilities?
    Secretary Price. I believe that what we should do is make 
sure we have a health-care system that is financially viable 
and feasible and makes it so that the American people have 
access to the kind of care that they need.
    Senator Cantwell. And you are behind the cut--okay. I will 
just take that as a ``yes,'' that you are behind this 
particular cut. And I would just say that our rural hospitals 
are struggling to make sure that we are providing good care.
    There are lots of efficiencies with the delivery system. I 
had a chance to ask you about this issue of rebalancing on the 
Medicaid budget. I do not know if you have had more time to 
look at that, to rebalance from nursing-home care to community-
based care. That is something that we wrote into the Affordable 
Care Act that States are doing, and it is a huge savings to the 
budget.
    Is that something that you think the administration can get 
further behind?
    Secretary Price. Yes. As I mentioned in answer to a couple 
other questions, the dynamism of the health-care market is so 
important to embrace, because we ought to be allowing and 
accommodating in our system for individuals to receive care 
where it best suits them and their providers.
    So you have identified an area where we ought to be able to 
accommodate that, and the system should allow for it.
    Senator Cantwell. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Nelson?
    Senator Nelson. Thank you, Mr. Chairman.
    Good morning, Mr. Secretary.
    Secretary Price. Good morning.
    Senator Nelson. Mr. Secretary, I just want to ask you, for 
clarification, about some things that are in the budget, in 
your proposed budget.
    Something that we have heard a lot about are the cost-
sharing reduction subsidies. Seventy-two percent of Florida's 
Affordable Care Act consumers benefit from these, and that is 
why I am asking.
    Now, it is hard to get a clear answer on this. The private 
market providers under the exchanges cannot take the 
uncertainty of knowing whether or not the subsidies are going 
to be there. Insurers have confirmed this to my questions, when 
proposing rate hikes or even pulling out of the markets because 
of the uncertainty.
    So can you confirm that the administration will continue to 
reimburse insurers for these subsidies that help so many of my 
constituents see a doctor? I notice it is in your budget 
through fiscal year 2018. What should we believe?
    Secretary Price. Senator, as you know, the answer may not 
prove satisfying to you, but the current court case is now 
House v. Price, and so I am the defendant in that case. So what 
I can tell you is just what you said, and that is that the 
budget reflects the payment of the CSR payments through 2018.
    Senator Nelson. So does that answer mean if the court case 
went in the favor of the administration that, basically, those 
subsidies would be cut?
    Secretary Price. What I can tell you--and again, I would 
like to be able to share more, but as the defendant in the 
case, I am not able to do so. But I can tell you, as you noted, 
that the budget accommodates and reflects CSR payments through 
2018.
    Senator Nelson. And the unfortunate dilemma is, Mr. 
Chairman, that because of the uncertainty, it predicts an 
outcome that--the ACA, the Affordable Care Act, is in the 
exchanges which are bringing health insurance to millions and 
millions of people who otherwise could not afford it. The 
uncertainty of whether or not those subsidies will be there in 
the future, in fact, is undermining the ability of insurers to 
be able to project what their premiums are going to be and, 
therefore, to protect themselves. What they are doing is 
jacking up their premiums, which is undercutting the whole 
reason for having the subsidies in the first place.
    Let me shift to the Zika virus, Mr. Secretary. As we 
discussed, you know there are a bunch of cases, 1,400 in 
Florida alone. And your administration's 2018 budget states, 
``Outbreaks like Zika will not be a onetime event. Capacity 
building at all levels as well as innovation in diagnostics are 
needed to prevent and control these outbreaks and understand 
more about these vectors.''
    Yet, the administration slashes the very programs designed 
to bolster capacity at all levels. So, Mr. Secretary, does your 
budget cut more than $7.2 billion from NIH?
    Secretary Price. As it relates to Zika, I cannot tell you 
how proud I am of the work that is being done at NIH to work on 
a vaccine. We are in the phase 2-B trials of a vaccine.
    The CDC is doing phenomenal work to make certain that the 
surveillance and detection is out----
    Senator Nelson. I understand all of that. Does the budget--
--
    Secretary Price. We believe that the budget accommodates 
for handling any challenge that may exist from the Zika threat.
    Senator Nelson. I understand. But the question is, does it 
cut $7.2 billion from NIH?
    Secretary Price. The proposed budget identifies reductions 
that we believe can be accomplished at NIH, and savings that 
can be accomplished at NIH, by increasing efficiencies and 
making certain that we have the core mission of NIH 
accomplished through the resources that are made available.
    Senator Nelson. Right. Efficiencies are great. But I just 
want to know black or white, does it cut $7.2 billion from NIH?
    Secretary Price. The reductions--I think your number is 
accurate. It depends, again, what the baseline is, but I think 
your neighbor is accurate.
    Senator Nelson. Okay.
    The Chairman. Okay.
    Senator Bennet?
    Senator Nelson. Wait a minute, Mr. Chairman. I have a 
couple other questions, just simple ``yes'' or ``no'' 
questions. May I get----
    The Chairman. Why don't you go ahead, but your time is up.
    Senator Nelson. Well, I understand, but----
    The Chairman. Go ahead. Go ahead.
    Senator Nelson [continuing]. It is hard to get a ``yes'' or 
``no'' answer.
    The Chairman. Go ahead.
    Senator Nelson. Thank you.
    Does the budget cut more than $600 billion from the 
Medicaid program on top of the cuts included in the House-
passed health care bill?
    Secretary Price. No.
    Senator Nelson. Your budget does not. Okay.
    Does it cut more than $1.3 billion from the CDC?
    Secretary Price. It is about a 10-percent reduction in 
resources available to CDC through appropriate priorities and 
identifying efficiencies within CDC. We believe strongly that 
the CDC budget is what is needed to continue to protect, not 
just the United States, but the world.
    Senator Nelson. So is that a ``yes,'' it cuts $1.3 billion 
from CDC?
    Secretary Price. What it is is a statement that affirms the 
President's desire to get folks to appreciate that you do not 
measure success of a program by the amount of money that is 
going into it. You measure it depending on whether or not the 
outcome and the mission are accomplished.
    And if we can accomplish the mission, the appropriate 
mission of CDC, with less resources, then one would think that 
that would be something to celebrate.
    Senator Nelson. Mr. Chairman, I understand all the 
reasoning behind it. I just want to know, does it cut $1.3 
billion from CDC?
    Secretary Price. As I said, there is about a 10-percent 
reduction in resources going to CDC.
    Senator Nelson. Does that equate to $1.3 billion?
    Secretary Price. I think your number is accurate.
    Senator Nelson. Great. Does it cut $850 million from the 
Food and Drug Administration?
    Secretary Price. I do not believe so. The FDA--what we 
envision in the FDA is to shift the resources coming to FDA, 
and I think, in fact, there is about a $500-million increase in 
resources coming to the FDA through a modification and an 
improvement in the user fee process.
    The Chairman. Senator, you are way over your time. You can 
submit questions in writing. I am sure the Secretary will 
answer them.
    Senator Bennet?
    Senator Bennet. Thank you, Chairman Hatch. If it is okay 
with you, I think I will yield to Senator Roberts who has been 
here waiting. And then I would like to go after him, if that is 
okay.
    The Chairman. That is very gracious of you, because he has 
been waiting.
    So I will go to Senator Roberts, and then I will come back 
to you.
    Senator Roberts. Mr. Chairman, are we under the 10-minute 
rule now, or 5, or 6, 7? What are we doing? I am assuming we 
are under the 5-minute rule.
    The Chairman. Right.
    Senator Roberts. I want to get in the weeds a little bit.
    Welcome back, Doctor.
    Secretary Price. Thank you. It is good to be back.
    Senator Roberts. There are statements that you are 
responsible for people dying in Ohio, all of the current 
problems in the Affordable Care Act for the last 8 years, 
reductions in funding in rural areas--which of course, I am 
very much interested in--the entire budget by the President, or 
to be more accurate, OMB. And the chairman has been chided for 
not having regular order where what we have in the Senate today 
is called cloture and delay. That is not regular order. And 
then I sort of lost my place--oh, the Zika virus--hindering 
eradication of the Zika virus.
    Are you enjoying yourself?
    Secretary Price. The job is a great challenge, and I am 
enjoying the challenge, yes, sir.
    Senator Roberts. I am going to get in the weeds here a 
little bit. In your prior life on this side of the witness 
table, I know you shared my frustration with the implementation 
of the competitive bidding program. I am not going to go too 
much further into this, except we do not have the providers 
that we used to have, and people are having to drive 150 miles 
with regards to durable medical equipment and access to it.
    Last year, we passed a 21st Century Cures Act. We sought to 
reduce, at least temporarily, the impact of these payment 
changes. So to preserve the intent of the program to improve 
the effectiveness of payment amounts and reduce the beneficiary 
costs, save the Medicare program money, do you think the agency 
needs to provide additional regulatory changes to its 
implementation and--what I am trying to do is get a sense of 
whether legislation is needed.
    Secretary Price. Legislation would be welcome that moved in 
the direction of allowing the durable medical equipment 
providers out there a greater opportunity to provide services 
to their clients, to the patients across the land. Regardless 
of whether legislation is forthcoming, the Department is 
looking very seriously at the issue of DME, because we believe 
strongly that the previous program that has been put in place 
is limiting the access to appropriate services for folks all 
across this land, especially in rural areas.
    Senator Roberts. I appreciate that. I have been sitting 
here listening to my friends across the aisle with regard to 
their concerns with what is happening to our health-care 
system. I had a question that could be repetitive. The chairman 
is here somewhere, and you have talked about it, about what is 
happening with our premiums and our copays--here it is. Blue 
Cross Blue Shield of Kansas City announced they are pulling out 
of Obamacare exchanges next year, leaving Kansas with less 
options. In Kansas and nationwide, premiums have doubled; in 
three States they have tripled.
    And yet I hear my colleagues saying ``stay the course'' or 
``full steam ahead,'' full funding, if, in fact, we could do 
that--keep funding what is not working.
    I must say that is 180 degrees from what has happened, and 
trying to pin it on you is rather amazing. This is like blaming 
Butch Cassidy and the Sundance Kid for jumping off the cliff. 
Or to be more accurate, we are in the Obama car, and it is a 
lot like being in the same car with Thelma and Louise, and we 
are going into the canyon.
    We have to get out of the car. I think that is what you are 
trying to do. And I wish you well in that. I do not think you 
are responsible for the entire budget that has been proposed by 
OMB.
    I am not really in favor of some of the things with regard 
to agriculture. And we plan to change that. We hope to get a 
budget. I do not know of any time the Senate has considered 
seriously any budget that came from a President since Reagan.
    And then this other business of regular order, with regard 
to the chairman. I was here during that whole episode of when 
we put Obamacare together, and days and nights, and days and 
nights. It started in the HELP Committee. That product is 
sitting on a shelf somewhere gathering dust.
    I had one amendment. It was on rationing--you know what I 
am talking about, with IPAB and all the rest of them. It failed 
on a party-line vote.
    And I came here. And again I had the same amendment on 
rationing. It failed on a party-line vote. And then the product 
went to the floor of the House and went behind closed doors in 
the Leader's office--sort of like Charlie Rich, singing 
``Behind closed doors.'' And out came Obamacare. And we have 
had 8 years of this now, and I just think blaming you for all 
of these deficiencies that we are trying to correct on a 
bipartisan basis has been over the top.
    And my time, sir, has expired.
    The Chairman. Well, thank you. And I endorse what you just 
said.
    Senator Bennet?
    Senator Bennet. Thank you, Mr. Chairman. I really am 
grateful for you holding this hearing.
    Mr. Secretary, it is great to see you again.
    Secretary Price. Good to see you.
    Senator Bennett. I want to start just by understanding the 
Medicaid cuts, or however you want to characterize them. But 
the numbers as I understand them are that there is about $834 
billion of cuts in the House bill, the House health-care bill.
    And there is about $610 billion in savings or cuts to the 
Medicaid program in the budget. Is it right to add those 
numbers together, or is there overlap among those numbers? I 
just want to make sure we are accurate.
    Secretary Price. I do not believe it is correct to add 
those numbers together. My understanding is the budget does not 
assume passage of the House bill.
    Senator Bennet. My understanding is that it absolutely does 
assume passage of the House bill.
    Secretary Price. It assumes as it relates to Medicaid.
    Senator Bennet. Yes.
    Secretary Price. It assumes that what is put in place is a 
per-cap or a block-grant program that will reflect over a 10-
year period of time a savings of $610 billion.
    Senator Bennet. Okay. If we could work together, I would 
appreciate the opportunity to work with your staff to see 
whether in the end we are talking about $834 billion or $1.4 
trillion. In either case, it is a huge cut to the Medicaid 
program. I mean, even if it is just $834 billion, I think that 
is a 25-percent cut to Medicaid.
    I would ask you--I asked the Governor's office in Colorado 
to tell me who is on Medicaid in my State. And here is what 
they said, and I would like to ask you whether you dispute any 
of this.
    They said that when you look at who is on Medicaid in 
Colorado, nearly half the program are children. Does that 
strike you as probably right?
    Secretary Price. That is in the ballpark for most States.
    Senator Bennet. And more than 40 percent of our Medicaid 
spending supports the disabled and seniors, many of whom are in 
long-term care facilities. So these are people in general who 
have spent down their life savings for the privilege of being 
in a nursing home funded by Medicaid. Would you agree that that 
is right?
    Secretary Price. It sounds a little higher than most 
States, but I think it is in the ballpark.
    Senator Bennet. Rough justice.
    And they say of the remaining adults on Medicaid, the vast 
majority work but still cannot afford health insurance on their 
own. Does that sound familiar to you in terms of Colorado or 
other States?
    Secretary Price. There are certainly individuals who have 
Medicaid coverage who are employed.
    Senator Bennet. Well, what they would say is, there is a 
tiny residual percentage of people who are not disabled, are 
not elderly, are not children, and do not work, but are on 
Medicaid. There is some small percentage of such people. Is 
Colorado different from other States, or do you think that is--
--
    Secretary Price. We can get you the numbers for your State, 
I am sure.
    Senator Bennet. That would be great, but do you see any 
reason to dispute what I just said?
    Secretary Price. I suspect that is----
    Senator Bennet. So here we have the Secretary--and I 
appreciate your candor--saying that Medicaid is not supporting 
a whole bunch of people who should be working and are not 
working. Would you agree with that?
    Secretary Price. I think it varies from State to State. 
There are certainly individuals who are able-bodied without 
kids on Medicaid who are not working.
    Senator Bennet. But that is a very small percentage of the 
people. I do not want to have to walk back through the list. I 
mean, I think we have agreed that that is a very small 
percentage.
    So I think it is important, because this is the Secretary 
of Health and Human Services, and he is not saying there are a 
whole bunch of Americans out there who are lazy, who are on 
Medicaid because they do not want to work. It does not comport 
with the evidence. It is not true, and it certainly is not true 
in my State.
    So the question then becomes, if we are going to cut the 
program by 25 percent, if you were running Colorado's Medicaid 
program--and I have a story that I will share with your staff 
from The Denver Post yesterday or the day before, a front-page 
story about the $700 million a year by 2023 that the State is 
going to have to come up with to compensate for the withdrawal 
of the Federal Government, the Medicaid reductions that are in 
just the House-passed bill, not your budget, but the House-
passed bill.
    What is your advice to us in our State about how we ought 
to handle those cuts, that $700 million to our State? When 40 
percent of the people on the program are poor children, when 
you have a whole bunch of people who are in nursing homes, when 
you have a whole bunch of people who are working but 
unfortunately cannot afford private insurance, what is my State 
supposed to do?
    Secretary Price. I think, again, the constellation of 
programs that we would envision would provide for greater 
opportunity for individuals to get health coverage as opposed 
to less right now. I would remind folks that, again, there are 
20 million Americans without health coverage. I do not know 
what the number, specifically, is in Colorado, but there is a 
significant number of individuals who do not have health 
coverage.
    What we would envision is a system that actually responds 
to those folks and individuals who find that it is better for 
them not to be covered on the Medicaid system, but on a system 
that actually is more responsive to them.
    Senator Bennet. My time is up. And with respect--and I do 
respect you a lot for your service in the House and the fact 
that you are a doctor--to believe what you just said, you would 
have to first reject the findings of the Congressional Budget 
Office that the House bill throws 23 million off insurance, 
that it creates 23 million more people who do not have 
insurance. You would have to believe that, and you would have 
to believe that, despite a 25-percent cut to Medicaid, which 
covers poor children, people in nursing homes, people who are 
already working and cannot afford insurance are somehow 
magically going to be able to buy health insurance under a 
system that no longer regulates the insurance industry.
    That is what we are being asked to believe. And I can tell 
you this, Mr. Secretary and Mr. Chairman--because the 
Republicans in the Senate have not yet taken up the bill, and I 
hope that we will--if you set out to design a bill less 
responsive to the critics of Obamacare in Colorado, to 
Republican critics of Obamacare, you could not write a bill 
less responsive than the House bill.
    So my hope is that--in the Senate you could not do it. My 
hope is that in the Senate, we will not do this in a partisan 
way, but we will come together as Democrats and Republicans and 
address the health-care system in a way that is actually 
believable to the people whom I represent.
    What you just have said is just not believable in any 
respect to people at home, and I am talking about Republicans, 
to say nothing of Democrats or Independents.
    The Chairman. Thank you, Senator.
    Senator Heller?
    Senator Heller. Mr. Chairman, thank you.
    Secretary Price----
    Secretary Price. Senator, how are you?
    Senator Heller. Thanks for taking time and taking some of 
our questions. I want to talk a little bit about Nevada and the 
AHCA, obviously; that seems to be the topic of discussion here.
    Our legislature just finished Monday. So as of 2 or 3 days 
ago, it adjourned for the next 2 years. One of the questions 
and comments that is being made is that if the AHCA in its 
current form, what came out of the House, were to pass, then it 
would put a $250-million annual hole in Nevada's budget.
    And these numbers and indications, I am getting out of the 
Governor's office also, from the State of Nevada. I would like 
your reflection on that. If it is $250 million a year, that is 
$500 million during a biennium, and we do not go back into 
session, obviously, for another couple of years. Their concern 
is that they will have to call a special session, obviously, in 
order to correct that kind of a budget offset.
    Do those figures sound accurate to you?
    Secretary Price. I do not think so, because--and again, the 
House bill does not, as I understand it, it does not anticipate 
any significant changes until 2019. So from a financing 
standpoint, 2020 would be the time when the majority of changes 
would come into play.
    So we would be happy to review the genesis of those numbers 
and see whether or not they are accurate, and if so, how we can 
address that.
    Senator Heller. Have you had an opportunity to do some 
research on Nevada? The reason I ask you this question is 
because we had a member of our delegation on the House who said 
that--he had a conversation with you and the Director of CMS.
    Between the two of you, you were able to convince him that 
these numbers, perhaps, are not as accurate or as dreadful as 
they come out of the Governor's office.
    Secretary Price. That is correct.
    Senator Heller. What kind of reflection did you have? Do 
you recall what kind of conversation you had?
    Secretary Price. Yes, in fact, I think that there was 
specific language that accommodated that concern. Which is why 
I say I do not believe that any changes would occur over the 
ensuing 2 years. But again, we would be happy to talk with you 
and work with you and the Governor and your State to see where 
they believe those numbers are coming from and determine their 
accuracy.
    Senator Heller. What do you anticipate being the growth 
rate of health-care costs over the next 10 years? What have you 
calculated?
    Secretary Price. It depends what population you are talking 
about. The Medicaid population annual growth rate has been in 
the range of 2.6, 2.8 as I recall, annually.
    Senator Heller. That is historic. What do you guys 
anticipate over the next 10 years?
    Secretary Price. I can get back to you on the specific 
amount. I think it is increasing a little bit, but I can get 
you the exact number. I do not have it on----
    Senator Heller. Are you working with leadership on our side 
as we go through the changes? I am going to guess that 
leadership on our side has had discussions with you, CMS, on 
some of the particular changes we are looking at.
    In other words, it is including growth rates. I do not know 
what the growth rate is going to be, if it is going to be CPI 
medical plus one, as they did in the AHCA, whether it is just 
CPI medical, or inflation for that matter.
    Have you had any discussions? I am trying to find an answer 
to this question, and I cannot get it out of our meetings. I 
was just wondering if you had any insight as to what the rate 
may be that we are proposing over the next couple of weeks to 
send to CBO?
    Secretary Price. Well, as it relates to Medicaid, the 
proposal within the budget is the CPI medical plus one for 
those aged and disabled, CPI medical for the others.
    Senator Heller. Do you still endorse that?
    Secretary Price. That is what is accommodated in the 
budget.
    Senator Heller. If it was anything below that, would you 
support it? In other words, if they went to inflation rate, 
would you support that?
    Secretary Price. I think it depends what the entire program 
looks like. If we are accommodating anybody who would have 
challenges with that in a supplemental manner, if you will, 
then I would have to look at that. But what I support, and what 
I think is important, is to make certain that every single 
American has access to the coverage that they need.
    Senator Heller. CPI plus one you said is for the disabled?
    Secretary Price. CPI medical plus one.
    Senator Heller. For disability, and what was the other----
    Secretary Price. Aged.
    Senator Heller. Now if that were to change, just to CPI 
medical or just inflation, would you oppose that?
    Secretary Price. As I said, it depends what the entire 
program looks like. In isolation, I think that might be a 
challenge.
    But that does not address what the entire constellation of 
whatever the program is, because there are other ways to 
accommodate individuals who need financial assistance. And we 
are committed to making certain that that happens.
    Senator Heller. Over the next 10 years, what is the rate 
increase overall then? What is the rate increase overall, over 
the next 10 years?
    Secretary Price. We will get that to you. I do not have it 
on the tip of my tongue.
    Senator Heller. If it is below that, would you have a 
problem with it? In other words, we figure it out, you tell me 
what it is, and if we have a proposal that is less than that, 
would you oppose it?
    Secretary Price. I think what is important in this 
conversation is to make certain that we accomplish the goals 
that we have set out, and that is to make certain that every 
single American has access to the coverage that they want. And 
when you have that as your goal, then it requires that you 
provide resources in an array of different ways to make certain 
that that is accomplished.
    Senator Heller. I just want to make sure with medical 
inflation, as it increases over the next 10 years, that the 
funding mechanism we have is not below that, because if it is, 
then we do not meet your goals.
    Secretary Price. In insolation, I would agree.
    Senator Heller. Okay. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Your time is up.
    Senator Thune?
    Senator Thune. Thank you, Mr. Chairman.
    Secretary Price, thanks for being here today. I appreciate 
the budget's attention to the need to repeal and replace the 
collapsing Affordable Care Act, the need for medical liability 
reform, as well as the budget program's integrity provisions. 
We have a number of important issues to tackle in the health-
care space. So again, I thank you for your work.
    Secretary Price. Thank you.
    Senator Thune. I want to--I discussed this with you at your 
confirmation hearing, but I have serious concerns, I think as 
you know, about the Indian Health Service. We continue to see 
significant problems even after two IHS facilities in South 
Dakota entered the systems improvement agreement with the 
Center for Medicare and Medicaid Services.
    CMS continues to find serious deficiencies at both 
facilities, with the Pine Ridge emergency department in 
immediate jeopardy status after a recent unannounced site visit 
from CMS. These systemic problems over the years are what 
prompted Senators Barrasso, Hoeven, and I to introduce the 
Restoring Accountability in the IHS Act.
    The bill will give IHS the flexibility to terminate poorly 
performing employees, streamline the hiring process so IHS can 
recruit talented medical professionals more quickly, and create 
incentives so those folks will stay on the job longer.
    My question is, will the Department commit to working with 
us on this legislation and other reforms to improve the quality 
of care at IHS?
    Secretary Price. Absolutely, Senator. I have been impressed 
with the commitment of individuals in IHS and the resources 
that we are trying to identify for new facilities, one of 
them--as you know, in South Dakota--to make sure that we are 
living up to our responsibility and the commitment that we have 
as a Nation in the IHS arena.
    Senator Thune. We would love to give you more tools to 
create the kind of accountability we need, and I think our 
legislation accomplishes that, so we would look forward to 
working with you on that.
    Last year you and I both worked on legislation to address 
the application of Medicare competitive bidding rates and 
noncompetitively bid areas. Ultimately, the 21st Century Cures 
Act provided a temporary delay in this reimbursement change and 
required the Department to study and report to the committees 
of jurisdiction on how payment adjustments affect beneficiary 
access. And that was supposed to have been done by January 12th 
of this year.
    I am just wondering if you could provide an update on the 
status of that report for the committee?
    Secretary Price. Yes. I think it remains in process, and we 
have a significant commitment to make certain that the DME 
program is functional and works for folks all across this land, 
especially in the rural areas.
    Senator Thune. And I guess I would say additionally, as you 
discuss regulatory relief--which I know is the priority for the 
administration, something that we very much agree with--what 
might the Department's approach be for addressing these 
beneficiary access challenges that are posed by the current 
reimbursement structure? Is there something you could do in the 
interim that would help bring some relief?
    Secretary Price. Absolutely. You cannot have a system that 
awards--as you well know--contracts to entities that have never 
provided services in a geographic area. And that is the system 
that we currently have, one that awards contracts to servicers 
or providers that have never demonstrated the capability to 
provide that service. And sadly, that is the system that we 
have in place right now.
    So what we are looking at is the entire array of the DME 
system. And again, the goal is to make certain that all 
Americans, regardless of where they live, have access to the 
kind of services, whether it is hospital beds, whether it is 
wheelchairs, whether it is home oxygen, whatever it may be in 
the DME space--these are quality of life issues for so many, 
many people. From my perspective, we have failed to date in 
making certain that we ensure the kind of accessibility that 
folks need.
    Senator Thune. Yes; thank you.
    And finally, during your confirmation hearing, we discussed 
CMS's 2009 rule requiring that all outpatient therapeutic 
services be provided under direct supervision, which has been 
delayed annually since then for small and rural hospitals. You 
expressed an interest in working with me on a permanent 
extension of the non-enforcement of this policy.
    I am wondering if you have an update on where things stand 
from the Department's perspective? I think the permanent non-
enforcement is part of a bill that we have out there, and we 
have been trying--we can sort of kick the stone down the road 
each year, but I am hoping that we can get a permanent solution 
somewhere. Could you tell us where you see things from your 
department's standpoint?
    Secretary Price. Senator, it is an area of significant 
interest, and I can tell you that it is a work in progress.
    Senator Thune. All right. Well, we hope that we can get 
some permanent relief there, and we look forward to working 
with you and your team on that going forward.
    Thank you, Mr. Chairman.
    Secretary Price. Yes, sir. Thank you, Senator.
    The Chairman. Thank you, Senator Thune.
    Senator Stabenow has a question or two, and we will wrap 
this up.
    Senator Stabenow. Well, thank you, Mr. Chairman. First I 
want to thank you for your courtesies this morning in allowing 
us to have thorough opportunities to ask questions.
    And Secretary Price, again, thank you for being here. There 
are so many issues that I continue to have great concerns 
about, and certainly when we look at this budget that in 
practicality cuts Medicaid, nursing home services, children's 
health care, rural health care, research on lifesaving drugs--I 
could go on and on.
    But one type of cut that I know we need is not in this 
budget, and that is a cut in the costs of prescription drugs. 
President Trump repeatedly stated he wanted to drastically 
bring down prescription drug prices through Medicare 
negotiation, saying pharmaceutical companies were getting away 
with murder.
    I support Medicare negotiation. I have for a long time, and 
90 percent of Americans support that. But this budget does not 
include any major proposals to bring down the cost of 
prescription drugs, whether it is Medicare negotiating, safe 
importation of prescription drugs, transparency, or any other 
policy for that matter, even though the prices of the most 
popular drugs have increased by 208 percent--208 percent in the 
last 10 years.
    However, the House Republican health care plan, and I 
assume the Senate one, that is proposed does give drug 
companies a huge $25-billion tax cut paid for by the people who 
are seeing their prescription drug prices go up: middle-class 
families and seniors.
    Given that this budget is the major policy document from 
the administration, is it fair to say that lowering 
prescription drug prices is no longer a priority?
    Secretary Price. No, absolutely not, Senator. In fact, we 
have, at the Department--the President has made this an 
absolute priority and has charged us with making 
recommendations to his office on reducing drug prices.
    And over the past 6 weeks, 8 weeks, we have had a half-
dozen to eight stakeholder meetings with all sorts of 
individuals. We have charged HRSA and FDA and CMS with coming 
up with specific proposals to make certain that we can provide 
the President with the most effective way to be able to reduce 
the increase in drug prices.
    So, no. It is an absolute priority, and we look forward to 
working with anybody who is interested in holding down or 
bringing down drug prices for the American people.
    Senator Stabenow. Should a family have to pay $700 for 
EpiPens for their child?
    Secretary Price. Well, regarding EpiPen, what has occurred 
in the past is that the ability for competition to hold down 
those prices, or to bring down those prices, was prevented by a 
previous decision through the previous administration. So we 
are looking, through the FDA, at exactly those kinds of things, 
because our goal is to make certain that the American people 
have access to the kind of medication that they need at a price 
that they can afford.
    Senator Stabenow. Which I wish was in this budget, because 
it is not in the budget at this point. But should someone who 
learns they have Hepatitis C have to pay $80,000 to get the 
drug they need to be cured?
    Secretary Price. Well, you are identifying a drug that is 
saving lives.
    Senator Stabenow. Eighty thousand dollars in order for 
someone to have the opportunity to save their life?
    Secretary Price. The question is, what is the right price 
for that drug?
    Senator Stabenow. Is that the right price?
    Secretary Price. There is a way to determine that price. 
And the question is, what is the right price for that, and how 
do we make certain that we incentivize innovation, and make it 
so that, in fact, companies are able to identify these 
remarkable cures that are out there?
    I do not know what the right price is, but I know how you 
figure out what the right price is.
    Senator Stabenow. Okay. Well, I will be anxious to know 
what you think the right price is.
    If you have cystic fibrosis and need the latest drug to 
improve lung function, should you have to pay $300,000?
    Secretary Price. No. What I think we ought to be doing is 
celebrating the incredible invention and work that individuals 
are doing to save lives in the area of cystic fibrosis.
    Senator Stabenow. I celebrate that. It is difficult if 
someone cannot afford what is put forward on the market. So we 
certainly celebrate innovation. That innovation needs to be 
affordable so that people actually have access to treatment 
that can save their life.
    Secretary Price. I would agree.
    Senator Stabenow. Is it appropriate to give pharmaceutical 
companies a $25-billion tax cut in the health-care reform bill 
when there is nothing to bring down the cost of prescription 
drugs in that bill?
    Secretary Price. Well, regarding what is in that bill as it 
relates to drug pricing, I am not sure that----
    Senator Stabenow. I am talking about the tax cut. Do you 
think it is appropriate to give a $25-billion tax cut to the 
pharmaceutical industry in a bill that is actually taking away 
health care from people and does nothing about lowering the 
cost of prescription drugs?
    Secretary Price. I do not know that that is what it does. 
What I am--what I do believe----
    Senator Stabenow. I do know that is what it does.
    Secretary Price. Well, then you do. What I do believe is 
that it is imperative that we have a system in place that 
incentivizes innovation so that we can realize the remarkable, 
remarkable productivity and entrepreneurship and innovative 
spirit of the American scientists at NIH and elsewhere who are 
discovering these wonderful kinds of drugs to save lives.
    Senator Stabenow. Well, I totally agree with that. Do you 
think that the industry should be spending more on R&D today 
than they spend on advertising drugs to us?
    Secretary Price. I think that, again, the system needs to 
be such that it incentivizes innovation so that we can realize 
the benefit of wonderful inventions.
    Senator Stabenow. Okay.
    Well, just for the record, all those ads are written off, 
and we pay for them as taxpayers. I would love to be helping 
them write off much more on R&D.
    Mr. Chairman, as I close, let me just say for the record--
we do not have to debate it today--but, Mr. Secretary, you have 
talked about a study, over and over again, about prices. And I 
just want for the record to say, this is a highly disputed 
study that you have been talking about that compares two 
different kinds of systems, does not include the tax credits 
that have substantially brought down out-of-pocket costs for 
real people.
    And so another day I look forward to debating with you what 
I believe and what I know, in Michigan, are very flawed 
numbers.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you.
    Let me just say that I have been in this health-care 
business for 41 years. And every year we demand more and more 
money, more and more spending, more and more Federal 
Government, more and more interference, more and more 
intrusion, and we wonder why it costs us so much.
    Now all I can say is, we have never had a better Secretary 
than you.
    Secretary Price. Thank you.
    The Chairman. Nor have we had anybody more patient in 
answering all of these questions. Now I want to thank you for 
participating the way you have. I especially want to thank you, 
Secretary Price, for attending today. I think we can all agree 
this is certainly not the most enjoyable activity that you 
could have participated in today. But it is nevertheless 
extremely important, and my colleagues have extremely important 
questions that they have asked.
    As I have said many times before, I would like to work with 
anyone, Republican or Democrat, who would like to resolve these 
important and pressing issues. Health care is no joke to any 
American, and to those with diminishing access, it means the 
world.
    So I look forward to hearing from each of you in the coming 
weeks, and I hope we can find ways to work together.
    Now for any of my colleagues who have written questions for 
the record, I ask that they submit them by June 15th----
    Senator Stabenow. I am sorry. I do not mean to interrupt, 
but Senator Carper----
    The Chairman. Oh, no, I am not going to--this is going to 
have to be it. I do not have any more time.
    Do you have to ask questions, Senator?
    Senator Carper. I have only been waiting for 2 hours, Mr. 
Chairman. That is okay.
    The Chairman. Well, you used 10 minutes before----
    Senator Carper. Well, 9.
    The Chairman. Excuse me?
    Senator Carper. Nine. [Laughter.]
    The Chairman. Well, you can----
    Senator Carper. He came in large part so he could answer 
one of my questions--it is not really a question. I just want 
to say one thing if I could. It will be very, very brief.
    The Chairman. Sure.
    Senator Carper. Mr. Chairman, I mentioned earlier that my 
colleagues get tired, Dr. Price, of hearing me describe myself 
as a recovering Governor, but I am. And I have enjoyed as a 
Governor sitting right where you are sitting, past Governor, 
and trying to provide a Governor's perspective on issues just 
like this one--just like this one.
    And one of the things we asked for--John Engler and I asked 
for for welfare reform--we said, give us the opportunity to 
have waivers. You guys pass the law, but give us the 
opportunity to apply for a waiver on what we are going to do on 
welfare reform. And that was granted.
    We asked for, when we did the Race to the Top, the 
education reform stuff in the last administration, we said, 
well, let us make sure the States can apply for waivers to the 
Federal law. And we do.
    And as it turns out with Medicaid, if I am not mistaken, 
States can apply for waivers. I think almost every State, maybe 
every State, has at least one or more waivers with Medicaid.
    There are some cases in the law where you cannot get a 
waiver, States cannot get a waiver. I think we ought to have a 
good discussion with Governors about whether that makes sense 
or whether there should be some further broadening with respect 
to waivers.
    As Governor, I always liked to have some flexibility, find 
out what works best in my State and maybe well in others, maybe 
not. But I think that could be a helpful thing to do.
    The other thing I want to ask for--just a UC request, Mr. 
Chairman--I have something here from Blue Cross Blue Shield of 
North Carolina, ``Premiums to rise in 2018 for Affordable Care 
Act.'' They say it in quotes. I will say just one sentence. 
``The single biggest reason''--this is Blue Cross Blue Shield, 
North Carolina--``the single biggest reason for the sharp 
increase in rates is lack''--again in the exchanges--``of 
Federal funding for cost-sharing reductions beginning in 
2018.''
    This is the program we have been talking about earlier. In 
the administration's budget, to their credit, they fund cost 
sharing. The President keeps talking it back in his tweets and 
other things. He is opposed to it, does not want to do this, 
raising questions. It is the questions, it is the lack of 
certainty, predictability for the insurance companies that 
drives up the prices, and so let us just keep that in mind.
    The Chairman. Well, thank you, Senator. You always add a 
great deal of understanding to these issues, and I appreciate 
you doing that.
    Senator Carper. In that case, could I have a couple more 
minutes, Mr. Chair? [Laughter.]
    The Chairman. No. I am going to kill you if you keep this 
up. [Laughter.]
    Senator Carper. I would die happy.
    The Chairman. No; I think you are doing a great job.
    Mr. Secretary, you have been very patient, and I personally 
really admire you. I know you know this field very, very well. 
I know you know the problems. I know you know how difficult it 
is to solve these problems, and I know you know that there are 
no quick answers to some of these questions that have been 
asked.
    You have handled these very well today, and I just want to 
personally thank you.
    With that, we will adjourn this meeting.
    Secretary Price. Thank you, Mr. Chairman.
    Senator Stabenow. Thank you, Mr. Chairman.
    [Whereupon, at 12:06 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


               Letter Submitted by Hon. Chuck Grassley, 
                        a U.S. Senator From Iowa

                     Congress of the United States

                          Washington, DC 20515

                              May 19, 2017

The Honorable Seema Verma
Administrator
Centers for Medicare and Medicaid Services
200 Independence Avenue, SW
Washington, DC 20201

RE: Rural Community Hospital, IPPS Proposed Rule (CMS-1677-P)

Dear Administrator Verma:

The Centers for Medicare and Medicaid Services (CMS) is conducting the 
Rural Community Hospital Demonstration Program (RCH), which was 
initiated by the Medicare Modernization Act of 2003 (MMA). The RCH was 
extended under the Affordable Care Act (ACA) and most recently under 
section 15003 of the 21st Century Cures Act. Congress directed CMS to 
create this program in response to the financial concerns of small 
rural hospitals.

As you know, the goal of the program is to evaluate cost based 
reimbursement for small rural hospitals with fewer than 51 beds. Each 
year since 2004, CMS has reported on the progress of this program. 
Eligibility is based on States with the lowest population densities and 
currently includes: Alaska, Arizona, Arkansas, Colorado, Idaho, Iowa, 
Kansas, Maine, Minnesota, Mississippi, Montana, Nebraska, New Mexico, 
North Dakota, Oklahoma, Oregon, South Dakota, Utah, and Wyoming.

Section 15003 of the 21st Century Cures Act extended the duration of 
this program by changing the language in the ACA from ``5 years'' to 
``10 years,'' beginning on the date immediately following the last day 
of the initial 5-year period. Despite this language, CMS proposes to 
begin implementation of this extension on a hospital's first cost 
reporting period beginning on or after October 1, 2017, following the 
announcement of the selection of additional hospitals to the RCH. This 
will result in a gap in the reasonable cost payment methodology paid to 
hospitals that previously participated in the program of up to 3 years.

In the proposed rule, CMS recognized the problem this gap creates for 
previously participating hospitals and an alternative approach was 
proposed. In that proposal, previously participating hospitals would 
begin the second 5 years of the 10-year extension period and the cost-
based payment methodology on the date immediately after the date the 
period of performance under the first 5-year extension period ended. 
For example, a hospital whose 5-year period of performance authorized 
by ACA ended June 30, 2016, the extension of the period under section 
15003 of Pub. L. 114-255 would be effective July 1, 2016. In the 
proposed rule, CMS states ``we believe that this alternative approach 
would be consistent with the language of section 410A of Pub. L. 108-
173 (as amended) . . .'' and we concur. We strongly encourage you to 
consider congressional intent as you finalize the rule.

The RCH program has been a lifeline for certain rural hospitals at risk 
of closure. Since 2010, more than 60 rural hospitals have closed 
nationwide. According to a report by iVantage Health, 673 more rural 
hospitals are at risk of closure.

For one rural hospital in Iowa, the delay in implementation of the 
extension will result in a loss of $1.1 million dollars. A second rural 
hospital will lose nearly $5 million. These rural hospitals operate on 
minimal margins and will not be able to keep the doors open if those 
losses continue. This will greatly impact the ability of Iowans to 
receive medical care in a timely manner.

One of the regional hospitals in Juneau, Alaska faces nearly $5 million 
in projected losses due to delay. The hospital is located in a 
geographically isolated area and has limited ability to take advantage 
of economies of scale due to a small population base, making programs 
like RCH critical to the hospital's success. The citizens that benefit 
from this hospital come from communities throughout Southeast Alaska by 
boat or plane and would be forced to travel even farther from home to 
receive care otherwise.

This gap in implementation is inconsistent with congressional intent, 
which requires a seamless extension of this critical program. It is 
also inconsistent with the way the agency implemented the first 5-year 
extension of this program. Most importantly, however, this proposal 
would cause financial hardship for many of the hospitals that have been 
participating in the RCH. As a result, we are concerned these hospitals 
will be forced to reduce or eliminate the services they offer to their 
communities, thereby further threatening access to health-care services 
for individuals living in these rural communities.

As the sponsors of the Rural Community Hospital Demonstration Extension 
Act of 2015--the basis for section 15003 of the 21st Century Cures 
Act--we encourage you to address this issue expeditiously and provide 
certainty to the previously participating hospitals as well as the new 
enrollees.

            Sincerely,

Charles E. Grassley                 Joni Ernst
United States Senator               United States Senator

Lisa Murkowski                      Dan Sullivan
United States Senator               United States Senator

Michael Bennet                      Don Young
United States Senator               Member of Congress

David Young                         Dave Loebsack
Member of Congress                  Member of Congress

Rod Blum                            Steve King
Member of Congress                  Member of Congress

cc: Secretary Tom Price, Department of Health and Human Services

                                 ______
                                 
              Prepared Statement of Hon. Orrin G. Hatch, 
                        a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah) 
today delivered the following opening statement at a hearing examining 
the Trump administration's fiscal year (FY) 2018 budget request for the 
Department of Health and Human Services (HHS):

    Welcome to this morning's hearing on the President's proposed 
budget for fiscal year 2018, with specific attention to the Department 
of Health and Human Services.

    I want to thank Secretary Price for being here. These hearings are 
an annual event for the Finance Committee. And, Secretary Price, since 
this is your first time around, I'll just warn you that these hearings 
can be a little grueling.

    Of course, you already know that.

    I am grateful that the President and HHS are eager to work with 
Congress to fix our health-care system in order to ensure Americans are 
able to access affordable health coverage. And, as we know, time is of 
essence in regard to this effort.

    Earlier this week, we received word that Anthem is pulling out of 
Ohio's Obamacare marketplace, potentially leaving more than 10,000 
patients and consumers in 20 counties without any insurance options on 
Ohio's exchange for 2018. This news is particularly frightening as we 
expect to hear similar notices from Anthem as they reevaluate their 
participation in Obamacare exchanges throughout the United States.

    This recent story is just the latest in a long line failures, all 
of them demonstrating the need to move forward with repealing Obamacare 
and replacing it with a more workable approach, one that will take 
seriously the ballooning health-care costs impacting every American 
family.

    Let me talk for a few minutes about the specifics of the 
President's budget.

    The budget assumes $250 billion in total savings from the repeal 
and replacement of Obamacare.

    Despite some insinuations to the contrary, the budget does not 
incorporate the specific legislative proposal--the American Health Care 
Act--that is before Congress right now.

    Therefore, it is not accurate to associate the specific Medicaid 
savings the CBO has estimated from enactment of the AHCA with the 
President's budget. To do so would assume a level of specificity that, 
for obvious reasons, is just not there.

    Moreover, the President's budget does not cut $1.5 trillion from 
Medicaid. Nor does it assume that the specific Medicaid-reform 
proposals from the AHCA will be enacted into law.

    I'm quite certain we'll hear a lot about that today. But any 
attempt to make that connection is simply unfounded. And any Senator 
who harps on the AHCA Medicaid numbers here today either does not 
understand the explicit language and estimates provided in the 
President's budget, or they are simply attempting to muddy the waters 
in order to scare Americans who rely on Medicaid for health-care 
coverage.

    Ultimately, the President's Budget appears to accept the reality 
that the Senate will need to come up with its own health-care reform 
proposal that includes a fundamental fix to Medicaid, which is, quite 
frankly, long overdue.


    In addition to the savings assumed from the repeal of Obamacare, 
the budget also explicitly assumes $610 billion in savings from putting 
Medicaid on a sustainable fiscal path by capping funding in FY 2020 
through per capita caps or block grants at the States' option.

    All told, most of the budget's overall Medicaid savings would be 
achieved by returning the focus of Medicaid to serving those with the 
greatest needs--the elderly, the disabled, and needy mothers and 
children--and by giving States more flexibility to run their own 
Medicaid programs.

    Any Senator who would like to argue that the Federal Government 
should spend more Medicaid dollars to provide coverage for non-
disabled, childless adults at the expense of disabled patients who 
remain on waiting lists should explain why.

    Furthermore, any Senator who would like to argue that the States 
are ill-equipped to handle their Medicaid programs should explain why 
that is the case given that the overwhelming consensus we've heard from 
governors nationwide over the last several years is that States want 
more independence and flexibility to tailor the Medicaid program.

    Washington needs to stop measuring the success of a Federal program 
by how much money it spends, or how many other programs are a part of 
it. Instead, Washington needs to focus on how well a Federal program 
helps those it is intended to serve and how efficient the program is at 
fulfilling its mandate.

    Long story short, we need to stop focusing on spending and pay more 
attention to outcomes.

    I think the President's budget, while it is by no means flawless, 
largely recognizes this reality, and the President and the 
administration deserve credit for that.

    I look forward to having an open and frank discussion with 
Secretary Price about his thoughts on these and other matters.

                                 ______
                                 
     Prepared Statement of Hon. Thomas E. Price, M.D., Secretary, 
                Department of Health and Human Services
                              introduction
    Chairman Hatch, Ranking Member Wyden, and members of the committee, 
thank you for inviting me to discuss the President's budget for the 
Department of Health and Human Services (HHS) in fiscal year (FY) 2018. 
It is an honor to be here.

    Whenever a budget is released, the most common question asked in 
Washington is ``how much?'' How much money does the budget spend on 
this program, how much does it cut from that other program?

    As a former legislator, I understand the importance of this 
question. But too often, it's treated as the only question worth asking 
about a budget--as if how much a program spends is more important than, 
or somehow indicative of, whether the program actually works.
                    measuring success, not spending
    President Trump's budget request does not confuse government 
spending with government success. The President understands that 
setting a budget is about more than establishing topline spending 
levels. Done properly, the budgeting process is an exercise in 
reforming our Federal programs to make sure they actually work--so they 
do their job and use tax dollars wisely.

    The problem with many of our Federal programs is not that they are 
too expensive or too underfunded. The real problem is that they do not 
work--they fail the very people they are meant to help. In Aid to 
Families with Dependent Children, we had a program that undermined 
self-sufficiency and work. Congress did well when it realized the 
devastating long-term harm this program had on children, in particular, 
and took action by creating Temporary Assistance for Needy Families 
(TANF)--a program that promoted the empowerment of parents through 
work. By helping more Americans climb out of poverty, TANF caseloads 
have declined by 75 percent through FY 2016. Under the TANF program, 
the employment of single mothers increased by 12 percent from 1996 
through 2000, and even after the 2008 recession, employment for this 
demographic is still higher than before welfare reform. In the wake of 
the recession, the emphasis on work in TANF has increased the job entry 
rate, retention rate, and earnings gain rate for program participants.

    Our budget reduces TANF spending in part because we understand that 
the amount spent in the program has not been the key to its success. 
Our goal is to continue and even expand on the progress made since 
enactment of Welfare Reform. Toward that end, we would welcome an 
opportunity to work with Congress to further strengthen TANF so that 
States, Territories, and Tribes can empower more low-income families to 
achieve financial independence.

    Fixing a broken government program requires a commitment to 
reform--redesigning its basic structure and refocusing taxpayer 
resources on innovative means to serve the people that the program is 
supposed to serve. And sometimes it requires recognition that the 
program is unnecessary because the need no longer exists or there are 
other programs that can better meet the needs of the people that the 
program was originally designed to serve. That's exactly what President 
Trump's budget will do, at HHS and across the Federal Government.

    Consider Medicaid, a critical safety net program that is the 
primary source of medical coverage for millions of low-income American 
families and seniors facing some of the most challenging health 
circumstances.

    If how much money the government spends on a program were truly a 
measure of success, Medicaid would be hailed as one of the most 
successful in history. Twenty years ago, annual government spending on 
Medicaid was less than $200 billion; within the next decade, that 
figure is estimated to top $1 trillion.

    Despite these significant investments, one-third of doctors in 
America do not accept new Medicaid patients. Some research has shown 
that enrolling in Medicaid does not necessarily lead to healthier 
outcomes for the newly eligible Medicaid population. The Oregon Health 
Insurance Study replicated a randomized clinical trial by enrolling 
some uninsured people in Medicaid through a lottery. Comparing this 
population to those who remained without coverage, the data showed an 
increase in emergency room use for primary care, the probability of a 
diagnosis of diabetes, and the use of diabetes medication, but no 
significant effects on measures of physical health such as blood 
pressure, cholesterol, or average glycated hemoglobin levels (a 
diagnostic criterion for diabetes). However, the same Oregon data 
showed a significant reduction in rates of depression among those 
enrolled in Medicaid.

    This mixed impact of Medicaid coverage on health outcomes suggests 
we need structural reforms that equip States with the resources and 
flexibility they need to serve their unique Medicaid populations in a 
way that is as compassionate and as cost-effective as possible.
       saving and strengthening medicaid through state innovation

    That's exactly what the President proposes in his budget. Under 
current law, outdated, one-size-fits-all Federal rules prevent States 
from prioritizing Federal resources to their most vulnerable 
populations. States are also limited in testing new ideas that will 
improve access to care and health outcomes. The President's budget will 
unleash State-level policymakers to advance reforms that are tailor-
made to meet the unique needs of their citizens.

    Over the next decade, these reforms will save American taxpayers an 
estimated $610 billion. They will achieve these savings by harnessing 
the innovative capacity of America's Governors and State legislators 
who, informed directly by the people and those providing the services, 
have a proven record of developing creative, effective ways to meet the 
health-care needs of friends and neighbors in need, while empowering 
them to manage their own health.

    Furthermore, the budget includes provisions to extend funding for 
the Children's Health Insurance Program. The budget proposes to 
rebalance the Federal-State partnership through a series of reforms, 
including ending the Obamacare requirement for States to move certain 
children from CHIP into Medicaid and capping eligibility at 250 percent 
of the Federal Poverty Level to return the focus of CHIP to the most 
vulnerable and low-income children.

    These reforms will go a long way toward improving access to health 
care in America. But there is more work to be done. That's why the 
President's budget commits to working with Congress to transition from 
the failures of Obamacare to a patient-centered system that empowers 
individuals, families, and doctors to make health-care decisions.
hhs advances the health security of the american people with a focus on 
  preparedness and response for medical and public health emergencies
    As everyone here knows, HHS's mission of protecting and promoting 
the health of the American people involves far more than overseeing the 
Nation's health-care and insurance systems.

    For generations, HHS has been the world's leader in responding to 
and protecting against public health emergencies--from outbreaks of 
infectious disease to chemical, biological, radiological, and nuclear 
threats--and assisting the health-care sector to be prepared for cyber-
threats. I recently had the privilege of seeing the importance of this 
work during an international trip to Africa and Europe.

    Visiting with Ebola survivors in Liberia and representing the 
United States at the G20 Health Ministerial Meeting in Berlin and then 
the World Health Assembly in Geneva reinforced just how vital a role 
HHS plays in preparing for, and responding to, domestic and global 
public health emergencies. To support HHS's unique Federal role in 
public health emergency preparedness and response, the President's 
budget provides $4.3 billion for disaster services coordination and 
response planning, biodefense and emerging infectious diseases 
research, and development and stockpiling of critical medical 
countermeasures. These investments help ensure that State and local 
governments have the support and resources they need to save lives, 
protect property, and restore essential services and infrastructure for 
affected communities.
         key public health priorities: serious mental illness, 
                 substance abuse, and childhood obesity
    In addition, today America faces a new set of public health crises 
that--if we're honest with ourselves--we have been far less successful 
in resolving. Those crises are: (1) serious mental illness; (2) 
substance abuse, particularly the opioid abuse epidemic; and (3) 
childhood obesity.

    As Secretary, I am committed to leading HHS to address each of 
these three challenges. The President's budget calls for the 
investments and policy reforms that will enable us to do just that.

    The budget invests in high-priority mental health initiatives to 
deliver hope and healing to the 43.1 million adults with mental 
illness,\1\ including nearly 10 million Americans suffering from a 
serious mental illness,\2\ as well as the 19.6 million adults with both 
mental and substance use disorders,\3\ the 3.0 million adolescents who 
have experienced a major depressive episode,\4\ and 350,000 adolescents 
with both a major depressive episode and substance use disorders.\5\ 
These initiatives will target resources for psychiatric care, suicide 
prevention, homelessness prevention, and children's mental health. For 
example, the budget proposes $5 million in new funding authorized by 
the 21st Century Cures Act for Assertive Community Treatment for 
Individuals with Serious Mental Illness. The budget also includes a 
demonstration within the Children's Mental Health Services program to 
test the applicability of new research from the National Institute of 
Mental Health on preventing or delaying the first episode of psychosis.
---------------------------------------------------------------------------
    \1\ Center for Behavioral Health Statistics and Quality (2016). Key 
substance use and mental health indicators in the United States: 
Results from the 2015 National Survey on Drug Use and Health (HHS 
Publication No. SMA 16-4984, NSDUH Series H-51). Pg. 27, retrieved from 
http://www.samhsa.gov/data/.
    \2\ Center for Behavioral Health Statistics and Quality (2016). Key 
substance use and mental health indicators in the United States: 
Results from the 2015 National Survey on Drug Use and Health (HHS 
Publication No. SMA 16-4984, NSDUH Series H-51). Pg 27, retrieved from 
http://www.samhsa.gov/data/.
    \3\ Center for Behavioral Health Statistics and Quality (2016). Key 
substance use and mental health indicators in the United States: 
Results from the 2015 National Survey on Drug Use and Health (HHS 
Publication No. SMA 16-4984, NSDUH Series H-51). Retrieved from http://
www.samhsa.gov/data/.
    \4\ Center for Behavioral Health Statistics and Quality (2016). Key 
substance use and mental health indicators in the United States: 
Results from the 2015 National Survey on Drug Use and Health (HHS 
Publication No. SMA 16-4984, NSDUH Series H-51). Pg 38, retrieved from 
http://www.samhsa.gov/data/.
    \5\ Center for Behavioral Health Statistics and Quality (2016). Key 
substance use and mental health indicators in the United States: 
Results from the 2015 National Survey on Drug Use and Health (HHS 
Publication No. SMA 16-4984, NSDUH Series H-51). Page 40, retrieved 
from http://www.samhsa.gov/data/.

    According to the Centers for Disease Control and Prevention (CDC), 
during 2015 drug overdoses accounted for 52,404 U.S. deaths, including 
33,091 (63.1 percent) that involved an opioid. To combat the opioid 
epidemic sweeping across our land, the budget calls for $811 million--
an increase of $50 million above the FY 2017 continuing resolution--in 
support for the five-part strategy that has guided our Department's 
---------------------------------------------------------------------------
efforts to fight this scourge:

        (1)  Improving access to treatment, including Medication-
        Assisted Treatment, and recovery services;

        (2)  Targeting availability and distribution of overdose-
        reversing drugs;

        (3)  Strengthening our understanding of the epidemic through 
        better public health data and reporting;

        (4)  Providing support for cutting edge research on pain and 
        addiction; and

        (5)  Advancing better practices for pain management.

    This funding increase will expand grants to Health Resources 
Services Administration (HRSA) Health Centers targeting substance abuse 
treatment services from $94 million to $144 million. Also within this 
total, the budget continues to fully fund the $500 million for State 
Targeted Response to the Opioid Crisis Grants that were authorized in 
the 21st Century Cures Act, which expand access to treatment for opioid 
addiction. Using evidence-based interventions, these grants address the 
primary barriers preventing individuals from seeking and successfully 
completing treatment and achieving and sustaining recovery.

    Finally, the President's budget invests in the health of the next 
generation by supporting services that promote healthy eating and 
physical activity, especially among the nearly 20 percent of school-
aged children in America who are obese. The budget establishes the new 
$500-million America's Health Block Grant, which will provide 
flexibility for States and Tribes to implement specific interventions 
that address leading causes of death and disability facing their 
specific populations. This could include interventions to spur 
improvements in physical activity and the nutrition of children and 
adolescents, and to treat leading causes of death such as heart 
disease.
                        other budget highlights
    The President's budget prioritizes women's health programs through 
investing in research to improve health outcomes, maintaining support 
for women's health services, empowering women and families, and 
emphasizing prevention. For instance, funding for the Maternal and 
Child Health Block Grant and Healthy Start is increased to improve the 
health of mothers, children, and adolescents, particularly those in 
low-income families. In addition, funding is maintained for a variety 
of vital programs serving women across HHS, including, community health 
centers, domestic violence programs, women's cancer screenings and 
support, mother and infant programs, and the Office on Women's Health.
                               conclusion

    Members of the committee, thank you for the opportunity to testify 
today and for your continued support of the Department. It is an 
incredible privilege to serve the American people as the Secretary of 
Health and Human Services and support its mission to protect the health 
and well-being of all Americans.

                                 ______
                                 
    Questions Submitted for the Record to Hon. Thomas E. Price, M.D.
               Questions Submitted by Hon. Chuck Grassley
                                vaccines
    Question. In 2006, Iowa was the center of one of the largest mumps 
outbreak in the United States.

    This past December, another increase in the number of cases of 
mumps was reported in Iowa.

    Mumps is a highly contagious disease that is easily passed from one 
person to another. It can have serious consequences. The good news is 
that it is preventable with vaccination.

    Dr. Price, State and local authorities often depend on Federal 
dollars to ensure protection against preventable diseases.

    Will you work to prioritize funding for these programs?

    Answer. Vaccines are one of the greatest success stories in public 
health and are among the most cost-effective ways to prevent disease. 
For example, for each dollar invested in the U.S. childhood 
immunization program, there are over $10 of societal savings and $3 in 
direct medical savings. Moreover, childhood immunizations over the past 
20 years have prevented 322 million illnesses, 732,000 deaths, and 
nearly $1.4 trillion in societal costs.\1\
---------------------------------------------------------------------------
    \1\ ``Benefits from Immunization During the Vaccines for Children 
Program Era--United States, 1994-2013,'' Centers for Disease Control 
and Prevention, Morbidity and Mortality Weekly Report, April 25, 2014/
63(16);352-355.

    The discretionary Immunization Program plays a fundamental role in 
achieving national immunization goals and sustaining high vaccination 
coverage rates to prevent death and disability from vaccine-preventable 
diseases. It is the backbone of our Nation's public health immunization 
system that supports the science that informs our national immunization 
policy and programs; provides a safety net of vaccines for uninsured, 
poor adults and use in outbreak response; monitors the safety and 
effectiveness of vaccines; educates providers and the public about the 
benefits of vaccines and the diseases they prevent; and conducts 
surveillance, laboratory testing, and epidemiology to respond to 
---------------------------------------------------------------------------
disease outbreaks.

    The CDC Immunization Program provides funding to all 50 States, the 
District of Columbia, 5 major cities and 8 territories. Currently, 90 
percent of immunization programs are entirely funded by Federal funds. 
At the funding level proposed in the FY 2018 President's budget 
request, CDC will continue to provide vaccines and funding for 
immunization infrastructure to the 64 awardees, but at a reduced level. 
CDC will continue providing technical assistance and laboratory support 
to States and local communities responding to vaccine-preventable 
disease investigations, including outbreaks, but at a reduced level.
                              hearing aids
    Question. Dr. Price, as a physician you know that hearing loss is 
serious issue for the Medicare population. But hearing aids cost over 
$4,600 a pair on average and 80 percent of the people that need them, 
don't get them--mostly because of the expense. There is a market-based, 
regulation-reducing solution. Both the National Academies of Science 
and the President's Council of Advisors on Science and Technology have 
recommended that FDA should allow hearing aids to be sold OTC for mild 
and moderate hearing loss, and FDA agrees.

    Senators Warren and I, along with Senators Isakson, Collins, and 
Hassan, have a bill that would direct FDA to do exactly that, S. 670.

    This legislation has the support of the Academy of Doctors of 
Audiology--experts in the recognition and treatment of hearing loss. 
The bill also has the support of AARP and the Hearing Loss Association 
of America.

    Bills don't get much better than this!

    This is a common-sense solution to provide high-quality hearing 
aids to the 80 percent of people who need one and don't get one under 
the current system.

    So I want to commend the FDA and ask that you support their 
efforts.

    I have letters of support from the audiologists, AARP, and the 
Hearing Loss Association.

    Answer. Thank you for your leadership in considering the creation 
of a class of over-the-counter hearing aids. The under-treatment of 
hearing loss in the United States is a significant public health issue. 
The President recently signed the Food and Drug Reauthorization Act of 
2017 which, thanks to your involvement, includes a section relating to 
the establishment of a category of over-the-counter hearing aids. The 
administration looks forward to the implementation of this section 
which has the potential to provide consumers with additional options in 
treating their hearing loss.

                                 ______
                                 
              Question Submitted by Hon. Patrick J. Toomey
    Question. Through legislation like the 21st Century Cures Act and 
recent appropriations bills, Congress has worked to strengthen our 
Nation's investment in medical research at the National Institutes of 
Health (NIH). These investments have shown incredible results in the 
related fields of scientific study and in my own Commonwealth, where 
brilliant researchers like Dr. Carl June at the University of 
Pennsylvania have used that funding to spur breakthroughs in using 
immunotherapies to fight against cancer. Increased investments in the 
NIH also will play a key role in unlocking the secrets of Alzheimer's 
disease, which already affects 5.5 million Americans and has no cure, 
effective treatment, and is 100-percent fatal.

    Will you work with me to reduce spending in other areas, so that we 
can preserve and hopefully increase our country's commitment to medical 
research?

    Answer. The Department is committed to medical research, including 
Alzheimer's disease research. The Department will assess and allocate 
funding to ensure that HHS invests in activities that are core to its 
mission and not duplicative of other efforts across the Federal 
Government.

                                 ______
                                 
                 Question Submitted by Hon. John Thune
    Question. Recently, Veterans Affairs Secretary David Shulkin 
announced that the VA plans to adopt a new Electronic Health Record 
(EHR) system and move away from using its current Veterans Health 
Information System and Technology Architecture (VistA) program. While I 
applaud the VA's efforts to improve its EHR system, I want to ensure 
work that has been done to improve IHS and VA coordination, 
particularly the sharing of medical records, is not undone during this 
transition. What steps can your Department take to ensure that changes 
to the VA EHR system doesn't degrade IHS-VA coordination? Will IHS also 
migrate to the new VA EHR system?

    Answer. The move by the Department of Veterans Affairs (VA) will 
impact the Indian Health Service (IHS) as the IHS Electronic Health 
Record (EHR) system is dependent on the VA's VistA system through 
shared software development. IHS adopted software developed by the VA 
and adapted it for use in its EHR without having to expend funds on the 
development.

    IHS will continue to have technical support for Resource and 
Patient Management System (RPMS) as long as the VA continues to produce 
new software patches. However, the VA will begin shifting from 
development that adds functionality to software development that 
focuses narrowly on patches that address patient safety and readies the 
system for archive.

    Prior to the announcement by the VA, IHS formed a workgroup to 
examine our current EHR platform. The workgroup is comprised of a broad 
range of stakeholders who offer various viewpoints based upon their 
role and interaction with our systems. The workgroup is expected to 
make recommendations by fall 2017 regarding the future of our EHR 
system. As the transition continues to evolve, IHS and VA will maintain 
open lines of communication to maintain our strong collaborative 
relationship.

                                 ______
                                 
                 Question Submitted by Hon. Pat Roberts
    Question. The Protecting Access to Medicare Act of 2014 included a 
provision to reform the Medicare Clinical Laboratory Fee Schedule 
(CLFS) so that it becomes a ``market-based'' fee schedule. While a 
market-based fee schedule should ultimately provide certainty for 
clinical laboratories and patients, my office has received reports that 
some labs found CMS guidance confusing and that most large hospital 
outreach laboratories were excluded from reporting, meaning that this 
segment of the laboratory community wouldn't be included in setting the 
payment rates. Can your office provide this committee with a summary of 
how many laboratories reported private market rates under PAMA and, of 
those labs, how many were hospital labs versus physician office labs or 
independent laboratories? Further, can your office detail efforts to 
protect against data errors that may lead to flawed rates?

    Answer. CMS is committed to the successful implementation of the 
new private payer rate-based clinical laboratory fee schedule (CLFS) 
and looks forward to working with the laboratory industry to ensure 
accurate payment rates. On March 30, 2017, CMS announced that it would 
exercise enforcement discretion until May 30, 2017, with respect to the 
data reporting period for reporting applicable information under the 
CLFS and the application of the Secretary's potential assessment of 
civil monetary penalties for failure to report applicable information. 
Since the enforcement discretion deadline of May 30th has now passed, 
CMS is currently performing a comprehensive analysis of the CLFS data. 
The administration will continue to review the operations of the 
program and look forward to feedback on how to improve the program.

                                 ______
                                 
                Questions Submitted by Hon. Dean Heller
    Question. Earlier this year when you came before this committee for 
your confirmation, I asked if I had your commitment to working with 
Congress and members of this committee to protect access to care for 
patients in Nevada, particularly the more than 600,000 Nevadans that 
are currently on Medicaid. Is this budget--which includes over $600 
billion in cuts to Medicaid--a reflection of that commitment?

    Answer. The administration remains committed to the mission of the 
Department to protect the health and well-being of the American 
people--the elderly, children, pregnant women, and individuals with 
disabilities--and working with States to ensure they are able to make 
the most use of available resources to serve their citizens. As you 
know, Medicaid is the primary source of medical coverage for millions 
of low-income American families and seniors facing health challenges. 
However, its costs have been growing drastically without improvement in 
outcomes. The problem isn't lack of funding; the problem is lack of 
flexibility. The FY 2018 budget puts Medicaid on a path to fiscal 
stability by restructuring Medicaid financing and reforming medical 
liability laws.

    Rigid and outdated Federal rules and requirements prevent States 
from pioneering delivery system reforms and from prioritizing Federal 
resources to their most vulnerable populations, which hurts access and 
health outcomes. The President's budget will give States as much 
freedom as possible to design reforms that meet the spectrum of diverse 
needs of their Medicaid populations.

    Question. To review, this budget proposes cutting Medicaid spending 
by $610 billion over 10 years--which is on top of the more than $800 
billion in cuts called for under the House-passed American Health Care 
Act. These are staggering numbers, and for me, it's a reminder of the 
more than 600,000 Nevadans, including the 200,000 newly eligible under 
Medicaid expansion, who rely on this program to meet their health-care 
needs. Under this budget proposal, can Nevadans be assured that their 
access to care will be protected?

    Answer. The President's FY18 budget does not incorporate specific 
legislation that was before Congress at the time of the hearing. 
Therefore, it is not accurate to apply the specific Medicaid savings 
the CBO has estimated for legislation before Congress to the 
President's budget. To do so would assume a level of specificity that 
does not exist in the budget. The budget calls for refocusing Medicaid 
on the elderly, children, pregnant women, and individuals with 
disabilities. In fact, under the budget, Medicaid spending will 
continue to grow over the next decade.

    Question. In my home State of Nevada, there are 1.3 million people 
with 
employer-sponsored health care who will be impacted by Obamacare's 40-
percent excise tax on employee health benefits, also known as the 
Cadillac tax. In the January 24th Finance hearing to consider your 
nomination, you committed to working with me to fully repeal the 
Cadillac tax, which I consider to be an unduly onerous tax. Is this 
still your commitment?

    Answer. Our budget calls for Congress to repeal and replace 
Obamacare, including the Cadillac tax. The administration looks forward 
to working with you to reform our health-care system.

    Question. As the Senate works to craft our own health-care 
legislation, there has been a lot of discussion on how to ensure 
Americans with pre-existing conditions will continue to have affordable 
coverage. As someone who hears from constituents on a daily basis on 
this issue, I am committed to ensuring Nevadans with pre-
existing conditions have the coverage they need. Since the House 
passage of the AHCA, this is a topic that you have addressed at length. 
Do you agree that individuals with pre-existing conditions should have 
access to affordable, high-quality insurance? Do you believe the House-
passed AHCA achieves this goal?

    Answer. The President's first principle of health reform is to 
ensure that no one will be denied insurance coverage for being sick. 
The House-passed AHCA explicitly prohibited insurers from denying 
coverage to individuals with pre-existing conditions.

    Question. The Children's Health Insurance Program (CHIP) is up for 
reauthorization this year. This is a vital program that provides 
medical coverage and care to more than 23,000 children in my home 
State. I'm encouraged that the administration favors a renewal of CHIP 
and proposes to extend CHIP funding for 2 years. I'm hopeful that 
Congress will act to reauthorize this critical program. Will you commit 
to working with Congress to ensure that children who rely on CHIP will 
have access to high-quality, affordable health coverage?

    Answer. As you noted, CHIP funding will expire at the end of FY 
2017, and without an extension of funding, children could lose health-
care coverage. This proposal would extend CHIP funding for 2 years 
through FY 2019. The administration remains committed to working with 
Congress to provide budgetary stability and additional flexibility to 
States while focusing the program on lower-income families.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
                             women's health
    Question. Under the Affordable Care Act (ACA), a record-number of 
women have gained access to health-care coverage and preventive care at 
no cost; maternity care was established as an essential health benefit 
(EHB); women were no longer discriminated against by health insurers 
for having a pre-existing condition, such as a previous Cesarean 
section or history of breast cancer; and health plans were not allowed 
to charge a woman more because of her gender.

    With the massive budget cuts proposed in the President's budget, 
how will you lead HHS to continue the progress the ACA achieved for 
women's health?

    Answer. (See answer provided below.)

    Question. Medicaid funds nearly half of all births in the country. 
With the proposed cuts in the hundreds of billions to Medicaid, how 
will you assure the country's most vulnerable women will have access to 
maternity care?

    Answer. The budget calls for refocusing Medicaid on the elderly, 
children, pregnant women, and individuals with disabilities. In fact, 
under the budget, Medicaid spending will continue to grow over the next 
decade.

    In addition, the budget increases funding for the Maternal and 
Child Health Block Grant by $30 million above the FY 2017 Continuing 
Resolution. The Maternal and Child Health Block Grant supports services 
to more than half of the pregnant women and nearly one-third of all 
infants and children in the country. The additional funding will 
support greater State investment to improve the health of all mothers, 
children, and adolescents, particularly those in low-income families. 
The FY 2018 budget also provides a $10 million increase above the FY 
2017 Continuing Resolution for the Healthy Start Program, which 
connects individuals with services that can reduce infant mortality and 
improve perinatal outcomes, while allowing grantees to tailor services 
according to community need.

    Question. According to a leaked draft of an HHS rule which you 
confirmed was proposed during the hearing, employers and insurers who 
have a religious or moral objection to providing birth control and 
related services would not be required to offer contraception to their 
employees or enrollees. This turns back the provision in the ACA that 
offers preventative benefits, including contraception, at no cost. What 
is the status of this leaked rule? Will you abide by procedures under 
the Administrative Procedure Act (APA) to solicit public comment before 
finalizing the rule? How will you consider the religious liberty of 
women who are seeking contraception when drafting this rule?

    Answer. The administration is not at liberty to discuss the details 
of pending regulations.

    Question. If enacted into law, the House-passed AHCA would defund 
Planned Parenthood health clinics of all Federal funding sources. The 
law injects funding into Community Health Centers (CHCs) as a 
substitute for Planned Parenthood health clinics. However, experts have 
repeatedly reported that CHCs do not have the capacity to absorb 2.4 
million Planned Parenthood patients. Additionally, the President's 
budget includes a rider to prohibit Planned Parenthood from 
participating in Federal programs. If Planned Parenthood is defunded, 
how will you assure access to health care for the women in the 21 
percent of America's counties that rely on a Planned Parenthood health 
center as a safety-net family planning provider? If CHCs are unable to 
absorb patients from Planned Parenthood health centers, what steps will 
you take to assure the 6 in 10 women who rely on these centers as their 
main source of health care that they will have access to primary care?

    Answer. The mission of the U.S. Department of Health and Human 
Services (HHS) is to protect the health and well-being of all 
Americans. The administration takes our mission seriously, and will 
work to support access to quality, affordable health care for all 
Americans. Health Centers have delivered affordable, accessible, 
quality primary health care to patients regardless of their ability to 
pay for more than 50 years. In 2015, Health Centers served 16.8 million 
female patients ages 15-65, of 24.3 million that they served.
                            short-term plans
    Question. Recently, 14 Republican Senators sent you a letter asking 
the Trump administration to reverse a regulation (Excepted Benefits; 
Lifetime and Annual Limits; and Short-Term, Limited-Duration Insurance, 
81 FR 75316) on the term of coverage for short-term, limited-duration 
health insurance plans. This regulation was initially promulgated to 
protect consumers from misconceptions about how limited short-term 
coverage can be and to align the duration of short-term policies with 
individual responsibility payment requirements, helping consumers make 
informed choices about their health coverage. The regulation 
effectively limits short-term coverage to 3 months and requires 
insurers to warn consumers that short-term coverage does not satisfy 
the individual responsibility to have adequate health coverage. You 
have previously stated that you do not want people with a pre-existing 
illness or injury not to be covered, but short-term plans don't abide 
by the same consumer protections as Qualified Health Plans under the 
Affordable Care Act.

    How do you plan to respond to the Republican Senators' letter on 
short-term plans? Do you support expanding the use of short-term plans 
or making any changes to the regulation?

    If you plan to expand the use of short-term plans, do you retract 
your comments about protecting those with pre-existing conditions when 
allowing for the expansion of this type of coverage that doesn't offer 
essential consumer protections to those with pre-existing conditions?

    How will you protect consumers from purchasing short-term coverage 
without knowing the risks?

    Answer. The administration remains committed to relieve Americans 
from Obamacare's burdensome regulations and mandates. The 
administration is evaluating policy options to restore choice and 
competition to the individual and small group markets, while increasing 
availability of health insurance options so that all Americans can 
purchase coverage that meets their needs while continuing to protect 
individuals with pre-existing conditions.
                           medicare sequester
    Question. During the campaign, President Trump promised: ``I'm not 
going to cut Social Security like every other Republican and I'm not 
going to cut Medicare or Medicaid.'' He also tweeted: ``I was the first 
and only potential GOP candidate to State there will be no cuts to 
Social Security, Medicare, and Medicaid. Huckabee copied me.''

    On page 50, the HHS FY18 budget in Brief states that ``[t]he budget 
does not include any direct Medicare cuts.'' However, in fact, the 
President's FY18 budget proposes to extend the sequester on mandatory 
spending--including Medicare--for an additional 2 years through 2027.

    At the hearing, Senator Cantwell asked you whether the President's 
budget includes ``a 2-year extension of mandatory sequestration, which 
would impose a 2 percent cut on Medicare providers.'' In response to 
her question, you stated that the President's budget reflects only the 
``continuation of current law.''

    Isn't it true that--under current law--the sequester on mandatory 
spending ends in 2025?

    Isn't it also true that the President's FY18 budget proposes 
extending the sequester on mandatory spending for an additional 2 years 
(through 2027)?

    How do you reconcile those facts with your response to Senator 
Cantwell that the President's budget reflects only the ``continuation 
of current law''--when, in fact, the President's budget includes a 2-
year extension that does not exist under current law?

    In total, how much would payments to Medicare providers, suppliers, 
and plans be cut as a result of the President's proposal?

    Answer. The President's budget reflects current law. In addition, 
the budget proposes to continue current law by extending sequestration 
by 2 years. This is not a cut to what Medicare currently pays to 
providers and does not change benefits or prices charged to 
beneficiaries generally.
                           value of medicaid
    Question. You have previously stated that Medicaid costs are 
growing without improvements in health outcomes. However, studies 
indicate that Medicaid has increased access to health services, 
including preventative care among formerly uninsured adults, a critical 
step to achieving improved health outcomes in the long run.

    For example, in a literature review, the Kaiser Family Foundation 
reported in April 2016 that Medicaid helps to improve access to health 
services, boost utilization of preventive health services, and reduce 
cost-sharing among beneficiaries. Several studies confirmed that 
Medicaid enrollees were able to access health services comparable to 
those offered under employer-based insurance, and that these services 
were accessed at a significantly lower per-person cost. For example, a 
2013 study published by Teresa Coughlin et al., at the Urban Institute 
reported that Medicaid beneficiaries' health-care costs would be over 
25 percent higher if they used employer-sponsor insurance. This was 
true even while Medicaid beneficiaries had similar access to and use of 
services like inpatient care, prescription drugs, and primary care 
doctors when compared with employer-insured individuals. Coughlin et 
al., also noted that out-of-pocket spending would increase threefold 
for Medicaid beneficiaries if they switched to private insurance, 
rising from $257 to $784 on average per year. This may in part be due 
to the fact that per capita spending for Medicaid enrollees has 
remained stable over time, as reported by John Inglehard and Benjamin 
Sommers in a 2015 New England Journal of Medicine study. The authors 
noted that Medicaid spending growth was driven primarily by increased 
enrollment in the program, and that per capita Medicaid spending stayed 
flat between 1998 and 2014 when adjusted for inflation.

    Do you agree that increasing access to primary care and 
preventative services has the capacity to save costs to the health-care 
system and improve health outcomes for beneficiaries over time? If so, 
would you agree that Medicaid has the capacity to protect and improve 
the health outcomes of covered individuals?

    Proposed cuts to Medicaid under the AHCA would compromise 
individuals' access to preventative and primary care services, 
especially for the 14 million low-income Medicaid beneficiaries who 
will be left uninsured and without access to affordable, comprehensive 
coverage. How will you use your capacity as the Secretary of Health and 
Human Services to provide these individuals with affordable coverage to 
access these services should the Medicaid expansion be repealed?

    If individuals are unable to access primary and preventative care, 
we could see an increase in the utilization of emergency departments to 
address medical conditions. How do you plan to allocate resources to 
compensate for the potential rise in costs associated with these 
emergency services?

    Answer. The FY 2018 budget calls for refocusing Medicaid on the 
elderly, children, pregnant women, and individuals with disabilities. 
The administration's goal is to ensure that all Americans have access 
to affordable coverage that best meets the needs of themselves and 
their families so that they can receive preventive care from the doctor 
of their choice in a primary care setting. The Department looks forward 
to collaborating with States to explore ways to support further 
adoption of Medicaid Direct Primary Care (DPC), which provides an 
enhanced focus on direct physician-patient relationships through 
enrolling Medicaid patients in DPC practices. Existing DPC practices 
enhance physicians' focus on patient care by simplifying healthcare 
payments for patients and doctors. DPC arrangements also often include 
benefits such as extended visits and electronic communication, which 
allow for improved patient access to primary care services.
             implications of direct primary care initiative
    Question. In its FY 2018 budget, the administration proposed a 
Medicaid Direct Primary Care Initiative to encourage State Medicaid 
programs to use Direct Primary Care practices. Under this model, a set 
price is paid to providers in exchange for improved access to primary 
care services. Some State Medicaid programs are currently experimenting 
with this model of primary care payment.

    Over 75 percent of Medicaid beneficiaries are enrolled in private 
plans that manage their care. Since so many Medicaid beneficiaries are 
enrolled in managed care, how would consumers enrolled in Medicaid 
managed care plans participate in the Direct Primary Care Initiative? 
Would there be a pathway to participation for Medicaid managed care 
plans?

    The Centers for Medicare and Medicaid Services (CMS) recently 
approved several Medicaid waivers testing new delivery system reforms 
that rely on provider-led organizations, such as in Alabama and New 
Hampshire. How would these new delivery models and organizations be 
affected by the Direct Primary Care Initiative?

    Would Medicaid beneficiaries have cost sharing obligations under 
the Initiative? If so, how would they be implemented?

    How does CMS plan to support States in these initiatives? It does 
not appear any new Federal support is made available under the proposal 
in the President's budget for such initiatives. Lack of Federal support 
coupled with hundreds of billions of dollars in cuts to Medicaid under 
the President's budget would hugely hamper States' ability to implement 
new innovative models of care delivery.

    Answer. The Department looks forward to collaborating with States 
to explore ways to support further adoption of Medicaid Direct Primary 
Care (DPC), which provides an enhanced focus on direct physician-
patient relationships through enrolling Medicaid patients in DPC 
practices. Such practices enhance physicians' focus on patient care by 
simplifying healthcare payments for patients and physicians. DPC 
arrangements also often include benefits such as extended visits and 
electronic communication, which allows for improved patient access to 
primary care services. Working with States and primary care physicians, 
HHS will support the development of DPC practices, identify barriers to 
their entry into Medicaid, and outline flexibilities under existing 
authorities to facilitate these innovative approaches to strengthening 
the relationships between patients and physicians. As the Department 
partners with States to advance this initiative, we look forward to 
gathering feedback about how this initiative will interact with the 
existing Medicaid program and State-based waivers and programs.
                             cms priorities
    Question. In addition to the President's proposals to cut Medicaid 
and the Children's Health Insurance Program (CHIP) by over $600 
billion, the President's FY 2018 budget includes a 10-percent cut to 
the budget of the agency running those programs and Medicare.

    How will proposed cuts to discretionary administration spending be 
distributed across CMS? How was this distribution determined?

    What staff positions will be eliminated as a result of these 
proposed cuts to discretionary administration spending? How would the 
loss of these positions impact the programs they support?

    How would the proposed cuts impact CMS programs' ability to meet 
their statutory objectives?

    How would CMS ensure its programs would be able to continue to meet 
the needs of their current beneficiaries?

    How would the administration measure the impact of the proposed 
cuts on vulnerable populations, including older Americans and people 
with disabilities?

    Answer. The FY 2018 discretionary budget request for CMS Program 
Management is about $3.6 billion, a decrease of $379 million below the 
FY 2017 Annualized Continuing Resolution level. This request will 
enable CMS to continue to effectively administer Medicare, Medicaid, 
and the Children's Health Insurance Program (CHIP). The FY 2018 budget 
reflects CMS's key priorities to: reduce costs through contract 
efficiencies; prioritize customer service; invest in program integrity; 
and strengthen the Federal workforce. Additionally, for FY 2018, the 
budget requests $723 million for CMS Federal administrative costs, $10 
million below the FY 2017 Annualized Continuing Resolution level. Of 
this total, $651 million will support a direct full-time equivalent 
level of 4,370, a decrease of 155 full-time equivalents below the FY 
2017 Annualized Continuing Resolution level. With this level of staff, 
CMS will be able to effectively and efficiently support operations, 
successfully carry out the Secretary's priorities, and focus on 
improving CMS's traditional programs. The reduction in workforce will 
occur through natural attrition across CMS.
                   testimony concerning premium hikes
    Question. During the June 8, 2017 hearing on the President's Fiscal 
Year 2018 budget, you cited statistics to demonstrate evidence of 
increasing health insurance premiums. For example, in one instance 
during an exchange with Senator McCaskill, you stated that premiums in 
Missouri had increased by 145 percent between 2013 and 2017.

    These statistics appear to have been drawn from a May 23, 2017 
report released by the Assistant Secretary for Planning and Evaluation 
(ASPE), which sought to measure the Affordable Care Act's (ACA's) 
impact by comparing Medical Loss Ratio data from 2013 and CMS 
Multidimensional Information and Data Analytics System data from 
HealthCare.gov in 2017. However, since its release, this report has 
been criticized by health-care experts for its methodology and 
misleading conclusions.

    Fundamentally, the comparison of premiums between 2013 and 2017 is 
inappropriate, as the ACA's reforms and affordability programs did not 
go into effect until 2014. This means that individual plans in 2013 are 
simply not comparable to those in 2017. In 2013, many plans failed to 
cover critical health services now included as Essential Health 
Benefits, including maternity care and mental health services. 
Moreover, before the ACA's consumer protections were in place, plans 
were permitted to exclude individuals with preexisting conditions. 
Finally, ASPE failed to take into account the use of subsidies in the 
ACA Health Insurance Marketplaces, which significantly lowers the 
actual cost of plans for individuals purchasing coverage through the 
Marketplaces. In fact, an earlier ASPE report released on October 24, 
2016 stated that 8 in 10 Marketplace enrollees can obtain insurance for 
$100 a month or less after subsidies are applied.

    Do you agree that by failing to take into account subsidies offered 
to individuals on the marketplace, the May 23, 2017 ASPE report does 
not accurately describe the average amount paid by consumers to acquire 
insurance on the individual market?

    Do you agree that plans in 2013 are not comparable to those offered 
to individuals in 2017 for individuals due to substantial protections 
for consumers and more comprehensive coverage?

    Do you agree that the American people have a right to sufficient 
and unbiased information to help them make apples-to-apples 
comparisons? If so, do you believe that the administration has a duty 
to provide it?

    Answer. Obamacare is a disaster, delivering high costs, few 
options, and broken promises. Americans across the country have seen 
their health insurance choices disappear and premiums spiral out of 
control, increasing by double and triple digits. This administration is 
committed to empowering consumers with providing more choices and 
access to the health care they want and deserve.
                        csrs and rising premiums
    Question. Since April, insurers in California, Colorado, 
Connecticut, Iowa, Maryland, New Hampshire, New Mexico, North Carolina, 
Pennsylvania, and Washington have expressed serious concerns about 
uncertainty in the private insurance market caused by the 
administration's actions and rhetoric.

    The specific actions from the administration include:

        A January 20th executive order to delay or halt the 
implementation of the ACA, which could undermine enforcement of the 
individual mandate;
        The administration's decision in January to stop advertising 
for open enrollment and to slash the budget for marketing and outreach 
by 20 percent for FY 2018;
        Threats directly from the President to let the marketplaces 
``explode'';
        And repeated warnings from the administration to buck the 
cost-sharing reduction payments (CSRs) owed to insurers who cover low- 
and moderate-
income Americans enrolled in marketplace plans.

    This last point is particularly urgent. Under the CSR program, 
insurers subsidize plans for individuals earning up to 250 percent of 
the Federal Poverty Level (FPL) to reduce their deductibles and out-of-
pocket expenses. Insurers report to HHS on how many enrollees they have 
provided CSRs, and then the Treasury Department reimburses insurers for 
these payments. More than 6.4 million individuals were enrolled in a 
CSR-eligible plan last year. Though the Trump administration has 
continued to reimburse insurers each month since taking office, the 
administration now refuses to state whether it will honor its financial 
commitment to insurers.

    Without this clarity, insurers have been unsure how to price 
premiums for the future, causing instability in the health-care market 
and driving up premiums across the country. Uncertainty surrounding CSR 
funding has also threatened the continued participation of insurers in 
the marketplace. In early June, Anthem withdrew from 20 counties in 
Ohio, citing these uncertain CSR payments as a key reason for its 
departure.

    In your testimony before the Senate Finance Committee on June 8, 
2017, you repeatedly made reference to rising premiums under the ACA. 
Do you agree, however, that the administration's refusal to honor these 
CSR payments has contributed to uncertainty in the marketplace and 
contributed to insurers' decisions to raise their premiums for 2018? 
Has HHS done any internal analysis to estimate the cost of this 
uncertainty to the taxpayers?

    The Kaiser Family Foundation has reported that a refusal to pay 
these subsidies could end up costing the Federal Government $2.3 
billion in added premium tax credits. Is refusing to reimburse insurers 
for the CSR program fiscally responsible for the Federal Government?

    Have rising premiums and insurers exiting the marketplace due to 
the administration's decision to withhold CSR payments already 
jeopardized the ability of Americans to continue accessing affordable 
coverage?

    The President's budget assumed $6.3 billion to continue funding 
CSRs. Do you agree with the President's budget that the Federal 
Government should honor its financial commitment to reimburse CSRs made 
by insurers? Will you commit to ensuring CSRs are paid in full by the 
Federal Government to insurers?

    Answer. The administration has emphasized the importance of 
reforming our health-care system to one that works better for patients 
and their providers, and The administration's budget calls for Congress 
to repeal and replace the Affordable Care Act. In the interim, we are 
evaluating policy options to relieve Americans from Obamacare's 
burdensome mandates and to restore choice and competition to the 
individual and small group markets, increasing availability of health 
insurance options so that all Americans can purchase coverage that 
meets their needs.

    Question. Rising premiums and the exit of insurers could have 
particularly dire consequences for patients residing in bare counties 
where no insurers are offering Marketplace plans. Do you agree that 
facilitating the ability of insurers to offer Marketplace plans in 
these counties would help patients better afford their medical care? Do 
you agree that facilitating the ability of insurers to offer these 
plans is a responsibility of HHS?

    Do you commit to encouraging insurers to offer plans to patients 
residing in bare counties? How do you plan to fulfill this commitment?

    Answer. Obamacare is a disaster, delivering high costs, few 
options, and broken promises. Americans across the country have seen 
their health insurance choices disappear. The administration is 
committed to empowering consumers with providing more choices and 
access to the healthcare they want and deserve.

    The administration recognizes that States are the primary 
regulators of health insurance, and it remains imperative for the 
executive branch to empower States with more flexibility and control. 
Among other regulatory actions and guidance documents, the Department 
also finalized a Market Stability Rule in April, which tightened 
special enrollment periods, made it more difficult for enrollees to 
skip premium payments, adjusted the open enrollment period to align 
with other healthcare markets, lifted one-size-fits-all requirements 
regarding network access, and widened the actuarial value bands within 
which insurers can offer plans to patients.
                   mylan taxpayer recovery (epipens)
    Question. The FY 2018 request increases funding for program 
integrity initiatives. Ensuring providers properly report relevant 
information and pay rebates to Medicaid under the Medicaid drug rebate 
program has been the topic of renewed focus following revelations that 
Mylan overcharged the American public by $1.27 billion by classifying 
EpiPen as a generic drug instead of a name-brand product. According to 
the Centers for Medicare and Medicaid Services (CMS), CMS informed 
Mylan they were misclassifying EpiPen several times, but Mylan failed 
to correct the classification of the product. In October, Mylan 
reported that it had reached an agreement in principle with the United 
States to pay $465 million. To date, the settlement has not be 
finalized.

    What are the specific activities that the U.S. Department of Health 
and Human Services (HHS) will employ to recover the remaining lost 
taxpayer money that the HHS Office of Inspector General (OIG) 
identified? Will HHS push for any further action against Mylan?

    Why was Mylan able to continue misclassifying the status of the 
EpiPen for purposes of the Medicaid drug rebate program and continue to 
pay a lower rebate based on that misclassification after they were made 
aware of the error?

    What additional provisions are being put in place to help prevent 
similar future errors?

    Mylan has also recently drawn public attention for price gouging 
its EpiPen product, raising the price six fold since 2007. What efforts 
will the administration make to protect Americans from similar price 
gouging on life-saving medications and help contain the costs of drug 
coverage?

    Answer. The U.S. Department of Health and Human Services (HHS) is 
actively reviewing the findings of the Office of the Inspector General 
and have also been in discussion with Members of Congress regarding 
their concerns over the EpiPen price. As you are aware, the public 
disclosure of any discussions on potential recoupment of funds or 
future decisions on classification could impact our ongoing efforts to 
evaluate the program. Please contact the Office of the Assistant 
Secretary for Legislation so that they can schedule a briefing to 
candidly inform you of our ongoing activities.
        medicaid and coverage for individuals with disabilities
    Question. For millions of Americans with disabilities, Medicaid is 
a critical program that allows them to access the services and care 
they need. Nationally, people with disabilities make up roughly 15 
percent of all Medicaid enrollees but account for approximately 40 
percent of all Medicaid spending.

    On June 6, 2017, NPR gave a face to these individuals with a 
profile on Mr. Evan Nodvin, a Medicaid beneficiary living in Georgia 
with Down syndrome. Mr. Nodvin, who works at a local fitness community 
center, credits his independence to the State's Medicaid program.

    For Mr. Nodvin and many families across the Nation like his, the 
proposed cuts to Medicaid spending contemplated in the FY 2018 budget--
$627-billion-plus in additional cuts to Medicaid--have caused serious 
concern as to what their future care will look like. Moreover, the 
proposed restructuring of Medicaid in the American Health Care Act 
would lead to $834 billion in cuts to Medicaid and an effective cap on 
care for individuals with disabilities.

    Will you commit to ensuring that individuals with disabilities are 
able to access the services and care they need to maintain the highest 
level of independence possible? How do you intend to fulfill this 
commitment in light of these proposed reductions to Medicaid spending?

    Do you anticipate the creation of additional Federal programs or 
requirements to protect these individuals' access to health services?

    If additional flexibility is granted to States in administering 
their Medicaid programs, how do you plan to maintain requirements to 
ensure adequate access to needed programs or services for people with 
disabilities?

    Answer. The administration remains committed to the mission of the 
department, to protect the health and well-being of the American 
people--this includes individuals with disabilities. The budget 
recognizes that States understand the unique needs of their citizens 
far better than Washington, and we intend to provide States with 
maximum flexibility to ensure that Medicaid prioritizes the most 
vulnerable Americans.
                        prescription drug prices
    Question. As the Secretary of the U.S. Department of Health and 
Human Services (HHS), you have broad power, independent of Congress, to 
impact the cost of prescription drugs. The agency is able, for example, 
to initiate rulemaking regarding payment for physician-administered 
drugs, while the Centers for Medicare and Medicaid Services has broad 
authority to test new payment models for prescription drugs.

    On January 18, 2017, in a hearing before our colleagues at the 
Senate Committee on Health, Education, Labor and Pensions, you 
committed to working with Congress to ``make sure drug pricing is 
reasonable.'' However, the President's FY 2018 budget proposed no 
policies to stop the rise of prescription drug prices.

    If the President is committed to lowering drug prices, why are 
there no proposals (even proposals he claimed to support on the 
campaign trail) included in the President's budget aimed at lowering 
drug prices?

    In responding to a question by Senator Stabenow, you stated the 
Department of HHS has held approximately 6-8 stakeholder meetings to 
discuss the issue of drug pricing. Could you please provide the 
individuals and organizations who attended those meetings?

    Also during that exchange with Senator Stabenow, the price of the 
Hepatitis C drug Sovaldi was discussed. In discussing whether or not 
Gilead's price is acceptable, you stated, ``I don't know what the right 
price is but I do know how to figure out what the right price is.'' Can 
you please provide the committee with how you would ``figure out the 
right price'' of Sovaldi and other high-cost prescription drugs coming 
on to market in the near future?

    Answer. High drug prices and costs are an issue of major concern 
for HHS and for the American people. This includes the millions of 
seniors who rely on Medicare for their drug coverage, and the taxpayers 
who have to foot the bill for government spending on this program. As 
you know, the President has made prescription drug prices an absolute 
priority and has charged the U.S. Department of Health and Human 
Services (HHS) with making recommendations to his office on reducing 
drug prices. HHS has been meeting with stakeholder groups from across 
the health-care spectrum over the past several months in order to 
understand where there are areas of consensus.

    It is important that we move forward quickly, but also carefully, 
so that our policies do not have unintended consequences. We need to 
balance the goal of ensuring affordability and access with the mandate 
to continue supporting development of lifesaving innovations.
                         chip funding extension
    Question. In FY 2016, the Children's Health Insurance Program 
(CHIP) covered nearly 9 million children in families who earn too much 
to qualify for Medicaid but still lack access to affordable private 
coverage. While this successful, bipartisan program is permanently 
authorized, funding is set to expire later this year. Secretary Price, 
during your nomination hearing you called for an 8-year extension of 
Federal funding for the Children's Health Insurance Program (CHIP). 
This multi-year extension is in line with other calls to renew the 
program for multiple years by the National Governor's Association, the 
Bipartisan Policy Center, and the independent Medicaid and CHIP Payment 
and Access Commission (MACPAC) in order to provide much deserved 
certainty to States and families. However, President Trump's budget 
proposes to extend Federal CHIP funding by only two additional years 
with additional cuts to the program including a cap on coverage for 
currently enrolled children in working families.

    Do you still support an 8-year extension of CHIP funding?

    Did you advise the President on his CHIP policy proposals? If so, 
what factors led the administration to decide that a 2-year extension 
was sufficient.

    The President's budget also includes a 20 percent cut in Federal 
support to States for CHIP. How does the administration plan for States 
to continue being able to provide valuable coverage to families in need 
despite these cuts?

    Children make up nearly half of those enrolled Medicaid. With 
billions of dollars in proposed cuts to the Medicaid program and a 20 
percent cut to Federal CHIP funding, how will you assure America's 
children continue to have access to affordable, comprehensive health 
care that meets their child-specific needs?

    Answer. The CHIP program needs to be looked at and extended. The 
budget proposes to extend funding for CHIP for two additional years 
through FY 2019. Extending CHIP funding for 2 years provides stability 
to States and families while the future of the program is addressed 
alongside other health reforms. This funding guarantees that the most 
vulnerable children will continue to have coverage.

    The budget also proposes a series of improvements that rebalance 
the State-
Federal partnership and increase State flexibility. This proposal ends 
the 23-
percentage point increase in the enhanced Federal match rate and the 
current law maintenance of effort requirement after FY 2017. The budget 
also proposes ending the Obamacare requirement for States to move 
certain children from CHIP into Medicaid and capping the level at which 
States could receive the CHIP enhanced Federal matching rate at 250 
percent of the Federal Poverty Level. These provisions would return the 
focus of CHIP to the most vulnerable and low-income children.
                       alaska reinsurance waiver
    Question. As you note in your March letter to Governors, Alaska 
significantly decreased projected premium increases for 2017 through a 
2-year reinsurance program. This program reduced both premium costs for 
consumers and tax credit expenditures by the Federal Government. In 
December 2016, Alaska released its application for a State Innovation 
Waiver under section 1332 of the Affordable Care Act (ACA) to 
sustainably implement the Alaska Reinsurance Program. The ACA's 1332 
waivers require States to maintain high standards for access to 
quality, affordable coverage while giving them the flexibility to 
improve market stability and lower costs for consumers.

    Given the benefits of reinsurance that you highlighted using 
Alaska's program, why has the pending Alaska reinsurance waiver not yet 
been approved?

    Does the March letter guidance still reflect the current position 
of the administration?

    Answer. The Centers for Medicare and Medicaid Services and the 
Department of Treasury announced approval of Alaska's section 1332 
waiver application on July 11, 2017.

    The administration stands ready to work with States to implement 
solutions that work for their local markets.
                       aca marketing and outreach
    Question. On January 26, 2017, the White House ordered the U.S. 
Department of Health and Human Services (HHS) to prematurely stop 
advertising for open enrollment for the Affordable Care Act's (ACA) 
health insurance marketplaces. This decision was made without clear 
explanation from the administration, other than a statement from HHS 
that the agency was looking for efficiencies. However, former officials 
under President Obama's administration confirmed news reports that 
these advertisements had already been paid for.

    Please provide an explanation for stopping the administration's 
marketing for open enrollment before its scheduled end date.

    What impact was anticipated by HHS prior to freezing marketing and 
outreach efforts? Please provide HHS's analysis used to make this 
decision, including money spent on advertisements that were not run.

    Do you agree closing advertising for open enrollment prematurely 
could have caused fewer individuals to sign-up for ACA coverage, 
especially younger individuals who historically sign up closer to the 
deadline?

    Do you agree that enrolling more individuals in the ACA marketplace 
helps distribute risk within the health insurance marketplaces? If so, 
would you agree that deciding to prematurely halt advertising for 2018 
enrollment could have been one of the sources of uncertainty that 
causes insurers to raise their premiums?

    In 2016, how much did HHS spend on marketing for enrollment for 
2017? How much is HHS projected to have spent this year for 2018 
enrollment?

    Were the marketing plans and contracts withdrawn in January 
previously paid for by President Obama's administration? If so, was HHS 
able to recapture the funds paid towards these outreach efforts? If 
not, was the loss of these funds considered in making the decision to 
prematurely halt advertising for enrollment? If these funds were 
recouped, where has the agency redistributed these funds, or where does 
the agency plan to allocate these funds in the future?

    The President's budget for Fiscal Year 2018 proposed a $310-million 
cut to the budget for the Federally-Facilitated Marketplace, which may 
hinder outreach efforts for future enrollment periods. In light of 
these cuts, how will you ensure that reduced funding will not lead to 
depressed enrollment for the future?

    Will you commit to engaging in full and uninterrupted outreach and 
marketing efforts to encourage individuals to enroll in ACA Marketplace 
plans during future open enrollment periods?

    Answer. Until Congress can act to repeal and replace Obamacare, the 
administration is carrying out its responsibilities under current law, 
including funding and maintenance of the exchange call center, even 
within a lean and efficient budget request. However, this budget 
reflects the goal of moving control of the health insurance market back 
to States and issuers. This includes recognition of the traditional 
role of States to perform outreach to their citizens, and the value of 
experienced agents and brokers to enroll individuals into health 
insurance. The Federal Government should not be duplicating these 
efforts.
                           oregon experiment
    Question. During the June 8, 2017 hearing on the President's FY 
2018 budget before the U.S. Senate Committee on Finance, you testified 
that Medicaid coverage does not lead to healthier outcomes for the 
newly eligible Medicaid population by reference to the Oregon 
experiment.

    However, I think it is important to talk about what the Oregon 
health experiment actually found. The study found that those who gained 
Medicaid coverage were more likely to get primary and preventive care, 
including screening and treatment for depression and diabetes. In 
addition, new Medicaid beneficiaries were 40 percent less likely to 
have suffered a decline in their health in the previous 6 months and 40 
percent less likely to go into medical debt or leave other bills unpaid 
to cover medical expenses, nearly eliminating all catastrophic out-of-
pocket medical expenditures. Finally, although the researchers also 
found that some patients' cholesterol levels fell, the small sample 
size and short duration of the study made it difficult to draw concrete 
conclusions about health outcomes.

    It's also important to note that since this study was conducted 
nearly a decade ago, Oregon has seen a transformation of its health-
care system to one of coordinated care and expanded Medicaid coverage 
to hundreds of thousands of low-income Oregonians--all while continuing 
to improve care. This has meant fewer emergency room visits, a 75-
percent increase in enrollment in patient-centered primary care homes, 
substantial increases in substance use disorder treatment, and 
reductions in preventable hospital admissions.

    Instead of focusing on what works and improving care, the House-
passed AHCA bill and the President's budget would rip health care away 
from millions of Medicaid beneficiaries, including as many as 465,000 
Oregonians. Millions more Americans could see caps and cuts to their 
coverage, including 65,000 Oregonians who rely on Oregon's Community 
First Choice option to receive community-based long-term care services 
and supports.

    While you cited the Oregon health experiment as providing evidence 
that Medicaid expansion leads to increased use of emergency departments 
for primary care, results from the Quarterly Legislative Report of 
Oregon's Health System Transformation demonstrate that Oregon's 
Medicaid program is increasing preventative care and reducing emergency 
department utilization among Oregon's Medicaid beneficiaries. Given 
this evidence and your reliance on Oregon's Medicaid program to draw 
your conclusions, do you plan to change your position on the effects of 
Medicaid for millions of Americans?

    According to the independent Congressional Budget Office, 14 
million Americans will lose Medicaid under the repeal of the Medicaid 
expansion included in the House-passed AHCA bill and end up uninsured, 
including hundreds of thousands of Oregonians. How do you think the 
health outcomes for these individuals would change when they no longer 
have access to affordable, comprehensive health care? Do you expect 
that these 14 million low-income Americans without insurance or access 
to affordable coverage would need to rely on emergency rooms even more 
than they do today? How do you think increasing the number of uninsured 
individuals in the United States by 23 million would impact rates of 
emergency room use across the country?

    Answer. As you know, Medicaid is the primary source of medical 
coverage for millions of low-income American families and seniors 
facing health challenges. However, its costs have been growing 
drastically without corresponding improvement in outcomes. The problem 
isn't lack of funding; the problem is lack of flexibility. The FY 2018 
budget puts Medicaid on a path to fiscal stability by restructuring 
Medicaid financing and reforming medical liability laws.

    Rigid and outdated Federal rules and requirements prevent States 
from pioneering delivery system reforms and from prioritizing Federal 
resources to their most vulnerable populations, which hurts access and 
health outcomes. The President's budget will give States as much 
freedom as possible to design reforms that meet the spectrum of diverse 
needs of their Medicaid populations.

    The administration is committed to making sure that States have the 
flexibility to design their Medicaid programs to meet the needs of the 
most vulnerable in their State. By strengthening the Federal and State 
Medicaid partnership, we will empower States to develop innovative 
solutions that meet their unique demographic, budgetary, and policy 
needs, rather than telling States how they should run their programs.
                                epm rule
    Question. On January 3, 2017, the Department of Health and Human 
Services (HHS) published a final rule implementing three new Episode 
Payment Models (EPMs) for Medicare Parts A and B and a Cardiac 
Rehabilitation (CR) incentive payment model through the Center for 
Medicare and Medicaid Innovation. Under the three new EPMs, acute care 
hospitals in certain selected geographic areas will participate in 
retrospective EPMs targeting care for Medicare fee-for-service 
beneficiaries receiving services during acute myocardial infarction 
(AMI), coronary artery bypass graft (CABG) and surgical hip/femur 
fracture treatment (SHFFT) episodes.

    On May 19, 2017, HHS published a final rule delaying the start date 
for the EPMs and CR from July 1, 2017, to January 1, 2018. The May 19, 
2017, final rule also reiterated HHS's position that ``these models 
will further [its] goals of improving the efficiency and quality of 
care for Medicare beneficiaries receiving care for these common 
clinical conditions and procedures.''

    Given HHS's statement that these models will further the goals of 
improving the efficiency and quality of care for Medicare 
beneficiaries, will you commit to implementing these EPMs and CR--
without any substantive changes--and adhering to the new January 1, 
2018 start date without any further delays?

    Answer. On March 21, 2017, the U.S. Department of Health and Human 
Services (HHS) published an interim final rule with comment period that 
delayed the effective date of the final rule titled ``Advancing Care 
Coordination Through Episode Payment Models (EPMs); Cardiac 
Rehabilitation Incentive Payment Model; and changes to the 
Comprehensive Care for Joint Replacement Model (CJR)'' to May 20, 2017, 
the applicability date of certain EPM regulations to October 1, 2017, 
and the effective date of certain CJR regulations to October 1, 2017. 
We received public comments suggesting changes to the overall design of 
the EPMs, CR incentive payment model and CJR model that were 
unfortunately outside of the scope of the March 21, 2017 IFC 
regulation. These comments touched on participation requirements, data, 
pricing, quality measures, episode length, CR and SNF waivers, 
beneficiary exclusions and notification requirements, repayment, 
coding, and model overlap issues. We consider these public comments to 
be outside of the scope of the March 21, 2017 IFC; and therefore, we 
did not address them in the May 19, 2017 final rule, which finalized 
the effective date of the rule as May 20, 2017 and the applicability 
date of certain EPM regulations and certain CJR regulations as January 
1, 2018. We may consider these public comments in future rulemaking.
                       medicaid additive effects
    Question. The President's FY 2018 budget proposes $627 billion in 
spending cuts to Medicaid. However, the President's budget also 
includes language that these $600-plus-billion in Medicaid reductions 
are on top of ``additional savings to Medicaid as a result of the 
administration's plan to repeal and replace Obamacare.'' According to 
the independent Congressional Budget Office, the American Health Care 
Act (AHCA) would reduce Medicaid by $834 billion, the result of which 
would be the removal of 14 million beneficiaries from the program and 
cuts to care for millions more.

    Secretary Price, for the record, what is the total amount of 
Medicaid cuts under the President's budget? Please note, I am not 
asking about government-wide savings target or total savings from 
``repeal and replace.'' I am simply asking the administration to 
clarify the total amount of assumed reductions to Medicaid under the 
President's budget. Without an exact number of the Medicaid-specific 
cuts assumed by the President in his budget, one can only assume that 
the ``additional savings to Medicaid as a result of the 
administration's plan to repeal and replace Obamacare'' is the over 
$800 billion in cuts included in the House-passed AHCA bill. If that is 
not accurate, please provide the total amount of Medicaid cuts in the 
budget combined with the AHCA.

    Answer. The President's FY 2018 budget does not incorporate 
specific legislation that is before Congress. Therefore, it is not 
accurate to apply the specific Medicaid savings the CBO has estimated 
for legislation before Congress to the President's budget. To do so 
would assume a level of specificity that does not exist in the budget. 
The budget calls for refocusing Medicaid on the elderly, children, 
pregnant women, and individuals with disabilities. The budget specifies 
savings of $610 billion by providing additional flexibility to States 
by reforming the fiscal structure of Medicaid, allowing a choice 
between per capita cap or a block grant, beginning in FY 2020. In fact, 
under the budget, Medicaid spending will continue to grow over the next 
decade.
                     section 1115 and 1332 waivers
    Question. Section 1115 of the Social Security Act provides the U.S. 
Department of Health and Human Services (HHS) Secretary with the 
authority to approve demonstration projects that promote the objectives 
of Medicaid and the Children's Health Insurance Program (CHIP).

    Section 1332 of the Patient Protection and Affordable Care Act 
(ACA) provides the Secretary with broad authority to approve waivers to 
certain ACA marketplace provisions. Applications must meet four 
criteria: individuals must get insurance coverage at least as 
comprehensive as provided under the ACA; insurance coverage offered to 
individuals must be at least as affordable as it would be under the 
ACA; as many people must be covered as would be under the ACA; and the 
proposal must not increase the Federal deficit.

    You have indicated your intention to streamline waiver rules and 
procedures. What changes, if any, does the administration intend to 
implement in its consideration of 1332 and 1115 waivers relative to 
standing guidance?

    What are HHS's internal controls for ensuring compliance with 
transparency as well as notice and comment requirements for 1332 and 
1115 waivers?

    What is your goal for the length of time it takes HHS to approve a 
waiver while upholding the letter of the law?

    Answer. In March, U.S. Department of Health and Human Services 
(HHS) sent letters to America's 50 Governors regarding 1332 waivers 
announcing the Department's commitment to letting States develop 
innovative strategies to adapt many of the Affordable Care Act's 
requirements to suit the State's specific needs. HHS and CMS 
Administrator Seema Verma then sent a separate letter to the Governors 
announcing our commitment to ushering in a new era for Federal and 
State Medicaid partnership where States have more flexibility to design 
programs that meet their unique needs.

    To receive approval for a 1332 State Innovation Waiver, a State 
must demonstrate that a proposed waiver will provide access to quality 
health care that is at least as comprehensive as would be provided 
without the waiver, will provide coverage and cost sharing protections 
against excessive out-of-pocket spending at least as affordable as 
would be provided without the waiver, will provide coverage to at least 
a comparable number of residents of the State as would be provided 
coverage without a waiver, and will not increase the Federal deficit. 
Further, before submitting its section 1332 waiver application the 
State must also provide a public notice and comment period, including 
public hearings, sufficient to ensure a meaningful level of public 
input, and have in place a law providing for its implementation of the 
waiver.

    HHS and the Department of Treasury jointly oversee and set 
standards for the application, review, and reporting process. Upon 
receipt of a State Innovation Waiver application, the Departments will 
work with the State on the review and approval process. A preliminary 
review by the Departments will occur within 45 days of submission to 
determine if the application is complete and a final decision will be 
issued no later than 180 days after the determination that an 
application is complete.

    CMS established a new ``fast-track'' process for reviewing 
proposals from States to extend established Medicaid and CHIP 1115 
demonstrations that reauthorize longstanding policies with proven 
program outcomes. States that want to be considered for the fast-track 
process must use the streamlined extension application for the 1115 
extension pathway under which it is requesting to be extended. The July 
24, 2015 CMCS Informational Bulletin contains additional guidance and 
information on the ``fast-track'' Federal review process.
             medicaid and substance use disorder treatment
    Question. Medicaid is the single largest payer of substance use 
disorder services in the Nation and pays for a third of all medication-
assisted treatment (MAT) in the United States. Many States with the 
highest opioid overdose death rates have used Medicaid to expand access 
to MAT including Kentucky, Maine, Pennsylvania, Ohio, and West Virginia 
as well as many other States being devastated by the opioid epidemic 
like my home State of Oregon. Under the ACA's Medicaid expansion, one 
out of three people covered through the Medicaid expansion have a 
mental illness, substance use disorder, or both. In fact, independent 
researchers estimate that repealing the Medicaid expansion would cut 
$4.5 billion from mental health and substance use services for low-
income Americans. In fact, according to SAMHSA, the Affordable Care 
Act, including the expansion of Medicaid, is expected to increase total 
spending on behavioral health by more than $7 billion per year by 2020. 
Unfortunately, the House-passed AHCA bill would undermine this 
investment and progress in addressing the opioid epidemic by causing 23 
million more individuals, including 14 million on Medicaid, to become 
uninsured.

    As Secretary of HHS, how do you intend to protect the gains in 
access to SUD treatment achieved through Medicaid expansion if Medicaid 
is cut by over $800 billion and the Medicaid expansion is repealed?

    One of the critical ways in which we see the importance of access 
to SUD treatment is by looking to the spread of the opioid epidemic, 
particularly in rural regions of the country. How do you plan to combat 
this epidemic if millions of Americans lose coverage for mental health 
and SUD treatment? Given the fact that this epidemic is particularly 
devastating for rural communities, do you have plans to combat opioid 
abuse that will target individuals in these regions?

    The House-passed AHCA bill repeals the requirement that States 
provide certain Medicaid beneficiaries with access to the essential 
health benefits including substance user disorder coverage. This 
coupled with the increased financial pressure placed on States through 
the repeal of the Medicaid expansion and conversion of Medicaid into a 
capped program may lead States with no option but to drop coverage for 
this critical benefit. How do you plan to work with States to ensure 
that they do not limit or drop coverage for substance use disorders?

    Answer. The U.S. Department of Health and Human Services (HHS) is 
keenly aware of the devastating impact that opioid addiction is having 
on our families and communities. The administration is committed to 
doing all that we can to end the scourge of opioids that is sweeping 
across this Nation.

    The administration is committed to bringing everything the Federal 
Government has to bear to address the health crisis opioids pose. The 
budget calls for $811 million in support of the five-pronged strategy 
guiding our Department's efforts to fight this scourge:

    1.  Improving access to prevention, treatment, and recovery 
services, including the full range of medication-assisted treatments;
    2.  Targeting availability and distribution of overdose-reversing 
drugs;
    3.  Strengthening our understanding of the crisis through better 
public health surveillance;
    4.  Providing support for cutting edge research on pain and 
addiction; and
    5.  Advancing better practices for pain management.

    This funding increase will expand grants to Health Resources 
Services administration (HRSA) Community Health Centers targeting 
substance abuse treatment services from $94 million to $144 million. 
Also within this total is $500 million for State Targeted Response to 
the Opioid Crisis Grants that were authorized in the 21st Century Cures 
Act, which expand access to treatment for opioid addiction. Using 
evidence-based interventions, these grants will help to address the 
primary barriers preventing individuals from seeking and successfully 
completing treatment and achieving and sustaining recovery.

    One of the key pillars of our approach is improving access to 
treatment and recovery services, including medication-assisted 
treatment (MAT) with naltrexone, buprenorphine, or methadone. As 
mentioned above, through the State Targeted Response to the Opioid 
Crisis grants authorized in the 21st Century Cures Act, HHS is 
expanding access to opioid addiction treatment through evidence-based 
interventions, including MAT. We are targeting the primary barriers to 
seeking and successfully completing treatment and achieving and 
sustaining recovery. This funding is critical to reversing the opioid 
epidemic.
            impacts of the ahca on rural and older americans
    Question. In a May 24th report, the nonpartisan Congressional 
Budget Office (CBO) provided an estimate of the coverage and budgetary 
effects of the House-passed American Health Care Act (AHCA). According 
to the CBO analysis, the AHCA would lead to 23 million more uninsured 
Americans, 14 million of which would lose insurance after only 1 year.

    Under the AHCA, insurers would be allowed to charge older Americans 
five times more than younger Americans for the same insurance plan. The 
AHCA would also replace the Affordable Care Act (ACA) ACA's tax credits 
with credits that raise premium costs for older and rural Americans. 
This is confirmed by CBO's analysis, which concluded that younger and 
healthier consumers would be able to obtain skimpier policies with 
lower premiums, while older and sicker enrollees would face higher 
costs. In addition, because the AHCA's tax credits do not account for 
local variation in health-care costs, rural Americans are more likely 
to face higher premium costs than non-rural Americans.

    A recent State-by-State analysis by the National Academy for State 
Health Policy (NASHP) confirmed the predicted negative effect of the 
AHCA on rural and older Americans. For example, with tax credits, a 60-
year-old in the Portland-metro area could see an increase in their 
premium from $2,480 under the ACA to $8,590 under the AHCA, a nearly 
400-percent increase, while a 27-year-old could only face premiums as 
low as $1,340. Meanwhile, in rural Umatilla County, a 60-year-old would 
see an increase in their premium from $2,480 under the ACA to $15,770 
under the AHCA, an over 600 percent increase, while a 27-year-old would 
pay premiums of $3,240.

    President Trump promised, ``We're going to have insurance for 
everybody. . . . There was a philosophy in some circles that if you 
can't pay for it, you don't get it. That's not going to happen with 
us.'' Secretary Price, the AHCA clearly would not keep President 
Trump's promise, especially for rural and older Americans. Does the 
administration support the AHCA even though it violates the President's 
promises?

    The MacArthur amendment would allow States to apply for waivers 
that would permit insurers to charge older Americans even more than the 
five times what they charge younger Americans for the same plan. These 
waivers would harm older adults and likely price them out of their 
coverage, again violating the President's promises. Does the 
administration support the MacArthur amendment to the AHCA even though 
it violates the President's promise?

    How do you defend the President's statement that no one would lose 
health insurance under his administration when CBO makes clear that 23 
million Americans will lose coverage?

    In a meeting with Republican senators, the President reportedly 
told them that the AHCA is ``mean.'' Do you agree with the President 
that the AHCA is mean? If not, please explain why causing 23 million 
Americans to lose their health coverage, causing older Americans to pay 
five times as much for coverage as younger Americans and cutting more 
than $800 billion from the Medicaid safety net--all to pay for tax cuts 
for the affluent--is not ``mean.''

    Answer. Americans across the country have seen their health 
insurance choices disappear and premiums spiral out of control, 
increasing by double and triple digits. Last year alone, 73 insurers 
left the exchanges. In one-third of counties, Americans have only one 
choice for a health-care provider on the exchanges. Without action, 
Americans are stuck with Obamacare's higher costs and fewer choices.

    The administration is committed to working with Congress to repeal 
and replace Obamacare. The budget proposal represents the President's 
commitment to rescue Americans from the failures of the Obamacare. The 
President supports a repeal and replace approach that provides 
individuals and families tools to choose the coverage that best meets 
their needs.
              actuarial soundness in medicaid managed care
    Question. In April 2016, the Centers for Medicare and Medicaid 
Services (CMS) posted the final rule for Medicaid and CHIP Managed 
Care. This rule finally updated Medicaid managed care regulations, the 
first formal update in over a decade. One of the key principles of the 
final rule was to update the standards for actuarial soundness in 
Medicaid managed care plans. In short, actuarial soundness requirements 
assure health plan rates are sufficient to reimburse provider networks 
for services they provide to Medicaid beneficiaries. Ensuring rates are 
actuarially sound is essential to ensuring beneficiaries can access the 
care they need under the Medicaid program, an issue you have 
highlighted as an area of focus in your past statements.

    Will you commit to ensure that Medicaid managed care plans achieve 
the Federal standard of actuarial soundness established in the Medicaid 
and CHIP Managed Care Final Rule?

    Will you uphold Federal oversight of rate-setting to assure health 
plans achieve Federal actuarial soundness requirements in all States 
and that beneficiaries have access to the care they need as required 
under the Medicaid statute?

    Answer. The U.S. Department of Health and Human Services (HHS) is 
conducting a full review of managed care regulations in order to 
prioritize beneficiary outcomes and State priorities.
               benefits of and funding for tanf and ssbg
    Question. You describe TANF as a program that promotes empowerment 
of families through work. However, only 8 percent of States' TANF funds 
are directed toward work.\2\ Rigorous studies also show that the 
employment gains from work requirements were short-lived: within 5 
years, recipients who were not subject to the work requirements were 
just as or more likely to work as those who were subject to them.\3\ 
Very few States collect data on the employment of families when they 
leave the welfare rolls, but the few that do show that the vast 
majority of former recipients are stuck in low-wage jobs or not working 
at all. Overall, few States have made steady progress toward increased 
earnings and more stable employment.
---------------------------------------------------------------------------
    \2\ http://www.cbpp.org/sites/default/files/atoms/files/4-8-
15tanf_0.pdf.
    \3\ http://www.cbpp.org/sites/default/files/atoms/files/6-6-
16pov3.pdf.

    Do you still believe that TANF, in its current state, is a program 
---------------------------------------------------------------------------
that promotes empowerment of families through work?

    Answer. TANF's fundamental focus on requiring work and establishing 
time limits on assistance has been transformative in changing the 
welfare policy landscape. These two pillars of the TANF program 
continue to be integral to TANF's framework. While there are areas of 
TANF that could be strengthened, this core framework continues to 
promote the empowerment of families through work. The administration 
looks forward to working with Congress to strengthen the work 
requirement to increase participant engagement in activities that will 
better help adult participants find jobs, remain employed, and advance 
in the workforce.

    Question. You tout the fact that so few families receive TANF as a 
sign of success: for every 100 families in poverty, only 23 receive 
cash assistance from TANF, down from 68 in 1996 when TANF was 
created.\4\ But, one of the consequences of welfare reform is a 
significant increase in the number of families who are deeply poor, 
including many who have no access to any stable income from either work 
or cash assistance, which we know has lifelong negative consequences 
for children.
---------------------------------------------------------------------------
    \4\ http://www.cbpp.org/sites/default/files/atoms/files/6-16-
15tanf.pdf.

    Do you believe that caseload decline, even if it puts children in 
---------------------------------------------------------------------------
harm's way, is an adequate measure of success?

    Answer. Caseload decline is only one piece of the TANF story and is 
not an adequate measure of success on its own. The goal is to move 
families off of TANF through work. Under the TANF program, the 
employment of single mothers increased by 12 percent from 1996 through 
2000, and even after the 2008 recession, employment for this 
demographic is still higher than before welfare reform.

    TANF's primary measure is the work participation rate, which 
measures the degree to which families with a work-eligible individual 
receiving cash assistance are engaged in specified work activities. 
States must engage families to meet their target rate or face a 
financial penalty. The goal is to help families prepare for and go to 
work in a way that increases their capacity to support their families 
financially and reduce their dependency on public benefit programs.

    Question. How do you reconcile your view that the TANF caseload 
decline is a measure of success with the scientific evidence that 
exposing children to high levels of stress negatively impacts their 
growth and development and has long-term negative consequences?

    Answer. The administration wants to support States in their efforts 
to move families from welfare to work. The administration believes the 
achievement of gainful employment and economic independence is 
critically important for the well-being of parents and their children. 
More than just a means of income, work creates opportunities for 
individual growth; instills personal dignity; promotes health and well-
being; and provides low-income families with a clear pathway to 
financial self-
sufficiency.

    Question. In your January 2017 responses to questions for the 
record related to TANF, you stated, ``I think the best way to measure 
the success of the law is to see where the Nation was prior to its 
passage and where we are now.'' The Center on Budget and Policy 
Priorities (CBPP) has reported that extreme poverty has more than 
doubled since the passage of TANF in 1996.\5\ HHS has also previously 
referred to TANF as an ``anti-poverty program.''
---------------------------------------------------------------------------
    \5\ Ibid.

    How do you reconcile your view that the TANF caseload decline is a 
measure of success with evidence that extreme poverty has more than 
---------------------------------------------------------------------------
doubled since the passage of TANF?

    Answer. As stated above, caseload decline is only one measure, and 
is not an adequate measure on its own. The administration believes the 
emphasis should be on moving families from welfare to work. On that 
score, TANF has been a clear success. The employment rate for never-
married mothers rose from 49 percent in 1995 to 66 percent in 2000 and 
has never returned to pre-welfare reform lows.

    As a result, the official poverty rate for single mothers and their 
children fell from 44 percent in 1994 to 33 percent in 2000 and, 
despite a still-recovering economy, the poverty rate for this group in 
2015 (36.5 percent) was still below the rates seen prior to welfare 
reform.

    Nevertheless, poverty--and in particular deep poverty--remains too 
high in our country, and we must implement policies that will build on 
the progress TANF made in helping many families experience financial 
stability and security through employment. The administration looks 
forward to working with you to find better ways to help low-income 
Americans rise out of poverty.

    Question. If you still believe that TANF is successful, then why, 
under your budget, would it face $22 billion in cuts over the next 
decade?

    Answer. TANF's success is not the result of the amount of dollars 
spent; rather its success comes from its restructuring of a welfare 
system to create a program that provides time-limited assistance, 
promotes empowerment through work, and fosters innovation.

    As you know, TANF is a State-run program that offers flexibility in 
the use of funds to achieve the program's purposes. While this 
flexibility has been essential to allowing States to create innovative 
and effective strategies for helping families gain self-sufficiency, 
States have also been able to use their funds for benefits that fail to 
serve the core intent of the program. For example, States have used 
their TANF funds on services that are not targeted to a low-income 
population, and have even replaced existing State spending with TANF 
dollars in an effort to fill State budget gaps. Over time, States have 
reduced the portions of their block grants spent on work programs. 
Under the budget proposal, States will be able to maintain and 
strengthen services that promote employment, family stability, and 
self-sufficiency--and thereby reduce the need for TANF cash assistance 
benefits--by renewing attention to the core purposes of the program.

    Question. Clearly if States could no longer transfer TANF funds to 
SSBG, they would spend their flexible TANF dollars within the purposes 
of TANF. It seems clear that the justification for cutting TANF as to 
``align'' with the proposed elimination of SSBG is nothing more than 
window dressing for reducing funding. How would you respond to 
governors across the Nation who are concerned by the proposed $22 
billion in cuts to funding that their States, citizens and service 
providers have come to rely upon?

    Answer. Many States are not sufficiently investing their current 
dollars in TANF's key welfare-to-work activities. In Fiscal Year 2015, 
States spent only about 28 percent of their total TANF and State 
maintenance-of-effort funds on the combination of work, work supports 
such as child care and transportation services, and case management 
services. States do not need more money in the TANF program; they need 
to use taxpayers' money more effectively to help move families 
dependent on public resources into stable work that can lead to self-
sufficiency, to the benefit of both parents and children.

    Question. In January 2017, you stated, ``As a 2011 GAO report 
pointed out, SSBG is a program of fragmentation, overlap, and 
duplication.'' You additionally stated that ``there is not a one-size 
fits all approach to how States might react should there be an 
elimination of any Federal program.''

    Could you specifically describe which 2011 GAO reported that SSBG 
is identified as a program of ``fragmentation, overlap, and duplication 
and provide page numbers to support this claim?''

    Answer. On March 1, 2011, the GAO released its report, 
``Opportunities to Reduce Potential Duplication in Government Programs, 
Save Tax Dollars, and Enhance Revenue'' (GAO-11-318SP). Its supplement 
report, ``List of Selected Federal Programs That Have Similar or 
Overlapping Objectives, Provide Similar Services, or Are Fragmented 
Across Government Missions,'' was released on March 18, 2011. On page 
14 of the supplement report, SSBG is cited as one of 80 Federal 
programs providing transportation services for transportation-
disadvantaged persons.
                      tpp biologics/stock trading
    Question. During your confirmation process before the Finance 
Committee, you were asked about meetings you may have had related to 
your holdings and purchases in an Australian pharmaceutical company--
Innate Immunotherapeutics (``Innate''). On June 1st, ProPublica 
reported in an article (``Tom Price Bought Drug Stocks. Then He Pushed 
Pharma's Agenda in Australia,'') that you discussed the pharmaceutical 
industry's trade agenda in meetings with Australian officials. Such 
discussions could have impacted the business of Innate and other 
pharmaceutical companies you held at the time of the meetings.

    Please describe any communications between you (or your staff) and 
the Office of the United States Trade Representative, representatives 
of the Government of Australia, or Members of Congress or their staff, 
with knowledge of the negotiations and implementation discussions 
regarding the TPP biologics commitments and their implementation by 
foreign governments between December 2015 and August 31, 2016. For each 
communication, please indicate the approximate date of the 
communication and the information provided.

    Please provide the itinerary for the April 2016 congressional 
delegation to Australia and the Philippines described in the ProPublica 
article noted above.

    Did you discuss biologics commitments and their implementation 
under the Trans-Pacific Partnership when you met with Australian 
government officials in April 2016? If so, please identify the meetings 
in the itinerary in which biologics commitments were raised, and 
describe the nature of any such discussion.

    Did you or your staff discuss biologics commitments and their 
implementation under the Trans-Pacific Partnership with any U.S. 
Government officials between December 2015 and August 31, 2016? If so, 
please identify the meetings in the itinerary in which biologics 
commitments were raised, and describe the nature of any such 
discussion.

    Answer. The administration is aware of the following 
communications/meetings that were undertaken between December 2015 and 
August 31, 2016 with individuals in the Office of the U.S. Trade 
Representative (USTR), representatives of the Australian Government, 
and Members of Congress (and staff) who may have had knowledge of the 
negotiations and implementation discussions regarding the Trans-Pacific 
Partnership (TPP) biologics commitments and their implementation.

Office of the United States Trade Representative

      The House Committee on Ways and Means hosted a members-only 
briefing with USTR Michael Froman on December 2, 2015.
      The Secretary and Warren Negri (Policy Advisor) met with USTR 
Michael Froman on April 29, 2016.

House Committee on Ways and Means

      The House Committee on Ways and Means hosted a members-only 
briefing on TPP on December 1, 2015.
      The House Committee on Ways and Means hosted a members-only 
briefing with USTR Michael Froman on December 2, 2015.
      Angela Ellard and Stephen Claeys, from the House Committee on 
Ways and Means, met with the Secretary and Kyle Zebley (Legislative 
Director) on March 23, 2016, to conduct a briefing on TPP prior to the 
Congressional Delegation (CODEL) trip to Australia in the spring of 
2016.
      Kyle Zebley (Legislative Director) conducted a phone call with 
Stephen Claeys on April 26, 2016, prior to the meeting with USTR 
Michael Froman on April 29, 2016.

The Government of Australia

    The Secretary's only interaction with the Government of Australia 
between December 2015 and August 31, 2016 took place during a CODEL 
from March 29, 2016 through April 7, 2016. The purpose of the CODEL was 
to meet with U.S., Australian, and Filipino defense officials and 
service members to evaluate U.S., ally, and partner installations, 
operations, and training in the Pacific region, with a particular focus 
on new U.S. programs, deployments, and installations in support of the 
Pacific rebalance. A complete manifest of the CODEL has been included.

    Congressional staff had no interaction with the Government of 
Australia between December 2015 and August, 31, 2016.

                                 ______
                                 
              Questions Submitted by Hon. Debbie Stabenow
                   mental health and substance abuse
    Question. Research from Harvard Medical School and New York 
University shows that eliminating Medicaid expansion increases the 
addiction treatment gap by 50 percent and takes away $5.5 billion per 
year from treatment for substance use disorders and mental health.

    Do you agree that the cut to Medicaid in the HHS budget will reduce 
access to substance use disorder and mental health services?

    Do you support the waivers in the American Health Care Act that 
would allow insurance companies to end the requirement that plans cover 
addiction services and mental health treatment?

    Answer. Addressing serious mental illness across our Nation and 
combating the opioid epidemic are two of the Department's top 
priorities. The U.S. Department of Health and Human Services (HHS) is 
keenly aware of the devastating impact that opioid addiction is having 
on our families and communities. The administration is committed to 
doing all that we can to end the scourge of opioids that is sweeping 
across this Nation.

    The administration is committed to bringing everything the Federal 
Government has to bear to address the health crisis opioids pose. The 
budget calls for $811 million in support of the five-pronged strategy 
guiding our Department's efforts to fight this scourge:

    1.  Improving access to prevention, treatment, and recovery 
services, including the full range of medication-assisted treatments;
    2.  Targeting availability and distribution of overdose-reversing 
drugs;
    3.  Strengthening our understanding of the crisis through better 
public health surveillance data and reporting;
    4.  Providing support for cutting edge research on pain and 
addiction; and
    5.  Advancing better practices for pain management.

    This funding increase will expand grants to Health Resources 
Services Administration (HRSA) Community Health Centers targeting 
substance abuse treatment services from $94 million to $144 million. 
Also within this total is $500 million for State Targeted Response to 
the Opioid Crisis Grants that were authorized in the 21st Century Cures 
Act, which expand access to treatment for opioid addiction. Using 
evidence-based interventions, these grants will help to address the 
primary barriers preventing individuals from seeking and successfully 
completing treatment and achieving and sustaining recovery.

    One of the key pillars of our approach is improving access to 
treatment and recovery services, including medication-assisted 
treatment (MAT) with naltrexone, buprenorphine, or methadone. As 
mentioned above, through the State Targeted Response to the Opioid 
Crisis grants authorized in the 21st Century Cures Act, HHS is 
expanding access to opioid addiction treatment through evidence-based 
interventions, including MAT. We are targeting the primary barriers to 
seeking and successfully completing treatment and achieving and 
sustaining recovery. This funding is critical to reversing the opioid 
epidemic.
                         healthy michigan plan
    Question. Last week in Lansing, business leaders, the Michigan 
Department of Health and Human Services, the State budget office, 
hospitals, health-care providers, and others held a meeting on 
Medicaid. There was widespread agreement that Medicaid is working in 
Michigan.

    The State's Budget Director said about our Healthy Michigan Plan: 
``This is not only the right thing to do, it's the smart and fiscally 
responsible thing to do. Reductions in delayed and uncompensated care 
and increase in healthier lifestyles provide benefits to us all in so 
many ways.''

    The HHS budget would cut Medicaid funding in half 10 years from 
now, and the American Health Care Act ends Medicaid expansion entirely.

    Do you think Michigan's Budget Director incorrectly assessed 
Michigan's Medicaid expansion?

    Do you disagree with research that shows Medicaid expansion in 
Michigan has led to job creation, cost savings, and insurance coverage?

    Answer. (See response below.)

    Question. The State's Budget Director said that the Medicaid cuts 
would create an $800-million per-year hole in the budget it could not 
afford.

    Do you agree that Michigan couldn't continue to fund health care, 
and that cuts would have to be made?

    Answer. The administration remains committed to ensuring that 
Medicaid is available for eligible beneficiaries, and working with 
States to ensure they are able to make the most use of available 
resources to serve their citizens. As you know, Medicaid is the primary 
source of medical coverage for millions of low-income American families 
and seniors facing health challenges. However, its costs have been 
growing drastically without improvement in outcomes.

    The problem isn't lack of funding; the problem is lack of 
flexibility. Rigid and outdated Federal rules and requirements prevent 
States from pioneering delivery system reforms and from prioritizing 
Federal resources to their most vulnerable populations, which hurts 
access and health outcomes. The administration is committed to giving 
States as much freedom as possible to design reforms that meet the 
spectrum of diverse needs of their Medicaid populations.

    Question. The budget doesn't include any information on the impact 
of Medicaid cuts.

    Has HHS evaluated what these cuts would mean for Michigan?

    Answer. The FY 2018 budget calls for refocusing Medicaid on the 
elderly, children, pregnant women, and individuals with disabilities. 
In fact, under the budget, Medicaid spending will continue to grow over 
the next decade.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
               affordable care act contraceptive benefit
    Question. On May 31, 2017, the media released a draft interim final 
rule by your department that in my understanding would allow any 
employer in the country to easily deny birth control to their 
employees. Multiple studies show that access to birth control without 
cost-sharing leads to better health, economic security, and lower rates 
of unintended pregnancies.

    Are you aware of the reports about this interim final rule?

    Are you familiar with the document that was released by the media?

    Is your department planning an interim final rule on this matter?

    Answer. The administration is not at liberty to discuss the details 
of pending rules and regulations.
        mandatory sequester and effect on medicare reimbursement
    Question. President Trump has repeatedly promised the American 
people that he won't cut Medicare.

    Does the President's FY18 budget propose to extend the mandatory 
sequester beyond OMB's current law baseline?

    Does the mandatory sequester reduce the aggregate amount of 
Medicare reimbursement that providers would receive, compared to an 
assumption of current law?

    Do you consider the mandatory sequester a cut to Medicare 
reimbursement?

    Answer. The President's budget reflects current law. In addition, 
the budget proposes to continue current law by extending sequestration 
by 2 years. This is not a cut to what Medicare currently pays to 
providers and does not change benefits or prices charged to 
beneficiaries generally.


                Questions Submitted by Hon. Bill Nelson
    Question. President Trump repeatedly promised that he would protect 
the Medicare and Medicaid programs from cuts during his campaign. 
Proposals to cut billions of dollars from the Medicare program, 
increase the Medicare eligibility age, turn Medicare into a voucher 
program, or increase out-of-pocket costs for seniors on Medicare would 
affect the over 4 million Floridians who depend on the program for 
financial security.

    The administration's budget extends the across-the-board cuts in 
Medicare provider payments by 2 years, effectively cutting $30 billion 
from the Medicare program. Do you agree that this is a cut to the 
Medicare program?

    Answer. The President's budget reflects current law. In addition, 
the budget proposes to continue current law by extending sequestration 
by 2 years. This is not a cut to what Medicare currently pays to 
providers and does not change benefits or prices charged to 
beneficiaries generally.

    Question. Last month, OMB Director Mulvaney made comments 
indicating that he would advise the President to not keep his promises 
to protect the Medicare program from cuts.

    As the President's top advisor on Medicare, do you agree with 
Director Mulvaney that next year's budget should cut Medicare?

    Answer. For 51 years, Medicare has played a crucial role in 
providing health care for America's senior citizens. Unfortunately, 
Medicare trustees have consistently told us that the Medicare program 
is in financial trouble. In light of that fact, my primary concern has 
always been to protect the program for seniors today and the 
generations to come. At HHS, we take seriously our responsibility to 
protect Medicare for this generation and those to come, and we are 
pursuing all available avenues to improve Medicare's sustainability in 
ways that put patients first.

    The Congressional Budget Office's (CBO) estimate for H.R. 1628, the 
American Health Care Act, shows just how much of a disaster this bill 
would be for American families. According to CBO:

      14 million Americans will lose their health insurance next year.
      $834 billion would be cut from the Medicaid program.
      Older Americans will pay more for less. In fact, the bill will 
result in ``substantially raising premiums for older people.''
      The uninsured rate ``would be disproportionately larger among 
older people with low incomes.''
      For example, in 2026, a 64-year old who earns just over $26,000 
in a non-waiver State would pay $16,100 in premiums rather than $1,750 
under the Affordable Care Act.

    Question. You stated that ``nobody will be worse off financially'' 
under the health plan. How is the bill better for Floridians? It ends 
the Medicaid program as we know it, charges older Americans more for 
less coverage, and ends the guarantee of coverage for people with 
preexisting conditions.

    Answer. Americans across the country have seen their health 
insurance choices disappear and premiums spiral out of control, 
increasing by double and triple digits. Last year alone, 73 insurers 
left the exchanges. In one-third of counties, Americans have only one 
choice for a health-care provider on the exchanges. Without action, 
Americans are stuck with Obamacare's higher costs and fewer choices.

    The administration is committed to working with Congress to repeal 
and replace Obamacare. The budget proposal represents the President's 
commitment to rescue Americans from the failures of Obamacare. The 
President supports a repeal and replace approach that provides 
individuals and families tools to choose the coverage that best meets 
their needs.

    Question. The administration's budget states, ``Outbreaks like Zika 
will not be a one-time event.'' Yet, the administration's budget cuts 
the very programs designed to respond to and prevent public health 
emergencies like the Zika virus. Please answer the following questions 
on the Zika virus with a yes or no answer, unless otherwise specified.

    Does your budget cut more than $7.2 billion from the National 
Institutes of Health (NIH)?

    Answer. The budget includes a total of $25.9 billion to support the 
highest priority biomedical research within the National Institutes of 
Health (NIH). NIH is the largest public funder of biomedical research 
in the world. NIH expands the biomedical knowledge base by funding 
cutting-edge research, improves health by seeking new treatment and 
prevention options, supports the training of the current and future 
biomedical workforce, and drives economic growth and productivity.

    The FY 2018 budget presents an opportunity for HHS and NIH to 
reexamine how to optimize Federal investment in a way that best serves 
the American people. The budget was developed to enhance the 
stewardship of taxpayer dollars by focusing our resources on innovative 
scientific research. The Department assessed opportunities within the 
NIH to determine where greater efficiencies may be possible.

    Additionally, the administration will propose a package of reforms 
to streamline Federal compliance requirements and reduce burden on NIH 
grantees. These targeted policies will reduce the time and expenses 
that grantees must currently spend to comply with overly burdensome 
Federal grant requirements, thus lowering grantees' administrative 
costs and mitigating the impact of lower reimbursements. The approach 
will also seek to develop a uniform indirect cost rate to all grants 
that mitigates the risk for fraud and abuse by simplifying and 
uniformly applying the rate for grantees.

    Question. Does it cut more than $600 billion from the Medicaid 
program, on top of many of the cuts included in the House-passed 
health-care bill?

    Answer. No. The President's FY 2018 budget does not incorporate 
specific legislation. Therefore, it is not accurate to apply the 
specific Medicaid savings the CBO has estimated for legislation before 
Congress to the President's budget. To do so would assume a level of 
specificity that does not exist in the budget. The budget calls for 
refocusing Medicaid on the elderly, children, pregnant women, and 
individuals with disabilities. The budget specifies savings of $610 
billion by providing additional flexibility to States by reforming the 
fiscal structure of Medicaid, allowing a choice between per capita cap 
or a block grant, beginning in FY 2020.

    Question. Does it cut more than $1.3 billion from the Centers for 
Disease Control and Prevention (CDC), including $35 million from the 
National Center of Birth Defects and Developmental Disabilities; $65 
million from the Center for Emerging and Zoonotic Infectious Disease; 
and $135 million from the Office of Public Health Preparedness and 
Response?

    Answer. The FY 2018 budget for CDC and the Agency for Toxic 
Substances and Disease Registry (ATSDR) is $11.1 billion. This total 
includes $5.1 billion in budget authority, $841 million from the 
Prevention and Public Health Fund, and $143 million in Public Health 
Service (PHS) Evaluation Funds.

    At this funding level, CDC will continue to protect the Nation and 
the world by: detecting, responding to, and stopping new and emerging 
health threats; preventing injuries, illness, and premature deaths; and 
discovering new ways to protect and improve the public's health through 
science and advanced technology. The budget prioritizes funding for key 
areas where CDC can have the greatest impact, including: continuing the 
fight against opioid abuse, misuse, and overdose; supporting efforts to 
combat childhood obesity; protecting the Nation's national security 
through medical countermeasure stockpiling; and investing in CDC's 
infrastructure to ensure the safety, security, and productivity of CDC 
staff.

    The budget provides CDC with increased flexibility to allocate 
resources and implement policies that best support mission-critical 
activities based on current science and public health expertise. This 
programmatic flexibility will enable the CDC to focus on programs that 
have been proven effective, while reducing costs and improving the 
efficient use of resources. The budget establishes the new America's 
Health Block Grant, reforming the model of existing State-based chronic 
disease programs to increase flexibility, allowing States to focus on 
leading public health challenges specific to their State.

    Question. Does it cut $850 million from the Food and Drug 
Administration and propose to replace this loss of budget authority 
with user fees? Under current law, user fees cannot currently be used 
to support public health work. Does this change under the 
administration's budget?

    The FY 2018 budget requests a total program level of $5.1 billion 
to support FDA's core mission to protect the Nation's public health by 
enhancing the safety of food and ensuring the safety and effectiveness 
of medical products. FDA's jurisdiction of products and activities is 
vast, ranging from analyzing the latest in medical technology to 
ensuring the safety of the Nation's food supply. The challenge of 
ensuring the safety and effectiveness of these products increases in 
complexity within a growing global market.

    In a constrained budget environment, the budget acknowledges 
medical product industries have sufficiently matured to assume a 
greater share of costs associated with FDA's administrative actions. 
User fees have been instrumental in allowing FDA to build capacity and 
improve the timeliness of the medical product review process without 
compromising the agency's high standards. The FY 2018 President's 
budget recalibrates FDA medical product user fees to over $2.5 billion 
in 2018, an increase of $1.2 billion over the annualized CR level. The 
budget supports, through 100-percent user fee funding, medical product 
review and approval activities associated with the prescription and 
generic drugs, biosimilar, medical device, and animal drugs programs, 
including operational and support costs associated with White Oak 
campus operations, rent payments to the General Services 
Administration, other commercial rent and rent-related charges, as well 
as anticipated FY 2018 inflation for rent costs. Legislative revisions 
will be needed for all of these programs to ensure continuity of review 
and approval activities. To support speeding patient access to safe and 
effective medical products, the budget also includes a portfolio of 
administrative actions to achieve regulatory efficiencies through 
program and process improvements.

    The FY 2018 budget request also includes reductions totaling $127.2 
million in budget authority, targeted to certain areas where better 
tools and policies will allow FDA to do more with less, while 
preserving core mission activities. These reductions will be coupled 
with policy efforts to improve the efficiency of the programs that see 
reductions, to improve effectiveness and take a risk-based approach to 
FDA's consumer protection mission.

    Question. Florida is relying on Medicaid to help prevent the spread 
of the Zika virus and treat those affected. With the broad Medicaid 
cuts outlined in both the administration's budget and the House-passed 
health-care bill, the State of Florida will have to choose between 
prevention and treating those affected by an epidemic, continuing to 
serve seniors in nursing homes, and caring for Florida's medically 
complex children.

    How would you recommend that States handle a public health threat 
like Zika, if their Medicaid funds are capped?

    Answer. Rigid and outdated Federal rules and requirements prevent 
States from pioneering delivery system reforms and from prioritizing 
Federal resources to their most vulnerable populations, which hurts 
access and health outcomes. The President's budget will give States as 
much freedom as possible to design reforms that meet the spectrum of 
diverse needs of their Medicaid populations.

    The administration is committed to making sure that States have the 
flexibility to design their Medicaid programs to meet the needs of the 
most vulnerable in their State. By strengthening the Federal and State 
Medicaid partnership, we will empower States to develop innovative 
solutions to challenges like Zika, rather than telling States how they 
should run their programs.

    Question. The opioid crisis is devastating Florida and the rest of 
the Nation. Over 2,500 Floridians died from opioids in the first half 
of 2016 alone. Yet the administration's budget cuts over $600 billion 
from Medicaid, in addition to many of the cuts included in the House-
passed health-care bill; cuts 9 percent from the Substance Abuse and 
Mental Health Services Administration; cuts $355 million from the 
National Institute of Mental Health; and cuts $235 million from the 
National Institute on Drug Abuse.

    During his campaign, President Trump promised to give people 
addicted to opioids access to the help they need. Given the cuts 
outlined above, how does the administration's budget prioritize giving 
people with opioid addiction the help they need?

    Answer. (See answer provided below)

    Question. As the single largest payer for substance use services 
and treatments, Medicaid plays a critical role in the fight against the 
opioid epidemic. Changing the Medicaid program through block grants or 
caps, as the administration's budget proposes, will shift costs to 
States, eliminate critical Federal protections, and hurt the more than 
4 million Floridians who rely on the program, including those with 
opioid addiction.

    If these cuts are made, how do you propose States like Florida 
provide the necessary services to help individuals with substance use 
disorders?

    Answer. Addressing serious mental illness across our Nation and 
combating the opioid epidemic are two of the Department's top 
priorities. The U.S. Department of Health and Human Services (HHS) is 
keenly aware of the devastating impact that opioid addiction is having 
on our families and communities. The administration is committed to 
doing all that we can to end the scourge of opioids that is sweeping 
across this Nation.

    The administration is committed to bringing everything the Federal 
Government has to bear to address the health crisis opioids pose. The 
budget calls for $811 million in support of the five-pronged strategy 
guiding our Department's efforts to fight this scourge:

    1.  Improving access to prevention, treatment, and recovery 
services, including the full range of medication-assisted treatments;
    2.  Targeting availability and distribution of overdose-reversing 
drugs;
    3.  Strengthening our understanding of the crisis through better 
public health surveillance data and reporting;
    4.  Providing support for cutting edge research on pain and 
addiction; and
    5.  Advancing better practices for pain management.

    This funding increase will expand grants to Health Resources 
Services Administration (HRSA) Community Health Centers targeting 
substance abuse treatment services from $94 million to $144 million. 
Also within this total is $500 million for State Targeted Response to 
the Opioid Crisis Grants that were authorized in the 21st Century Cures 
Act, which expand access to treatment for opioid addiction. Using 
evidence-based interventions, these grants will help to address the 
primary barriers preventing individuals from seeking and successfully 
completing treatment and achieving and sustaining recovery.

    One of the key pillars of our approach is improving access to 
treatment and recovery services, including medication-assisted 
treatment (MAT) with naltrexone, buprenorphine, or methadone. As 
mentioned above, through the State Targeted Response to the Opioid 
Crisis grants authorized in the 21st Century Cures Act, HHS is 
expanding access to opioid addiction treatment through evidence-based 
interventions, including MAT. We are targeting the primary barriers to 
seeking and successfully completing treatment and achieving and 
sustaining recovery. This funding is critical to reversing the opioid 
epidemic.

    The administration's objective is ensuring all Americans have 
access to the best and highest quality coverage and care. Having 
coverage is not meaningful if one cannot access the care they need or 
the quality of care leaves them worse off--we must work toward both 
coverage and care.

    Question. I recently heard from a constituent whose son has Down 
Syndrome. After years of being on the Medicaid waiver list, he finally 
began receiving benefits. At this point, his life drastically changed 
for the better. He began to participate in an adult supervised day 
program. He receives transportation so that he can socialize with his 
peers. Overall, his quality of life has improved.

    Have you considered what a Medicaid cap or block grant would look 
like for this constituent and his family? Limiting State Medicaid 
funding will force States to limit eligibility and/or benefits, and 
create lengthy waiting lists for Floridians who are sick and/or 
disabled. What do I tell his parents when programs that improve their 
child's quality of life are cut? What about all of the other Floridians 
who rely on Medicaid?

    Answer. The administration remains committed to ensuring that 
Medicaid is available for eligible beneficiaries, and working with 
States to ensure they are able to make the most use of available 
resources to serve their citizens. As you know Medicaid is the primary 
source of medical coverage for millions of low-income American families 
and persons with disabilities. However, its costs have been growing 
drastically without improvement in outcomes.

    The problem is not lack of funding; the problem is lack of 
flexibility. Rigid and outdated Federal rules and requirements prevent 
States from pioneering delivery system reforms and from prioritizing 
Federal resources to their most vulnerable populations, which hurts 
access and health outcomes. The administration is committed to giving 
States as much freedom as possible to design reforms that meet the 
spectrum of diverse needs of their Medicaid populations.

    Question. For 20 years, the Children's Health Insurance Program 
(CHIP) has provided low-cost health coverage to children in families 
that earn too much money to qualify for Medicaid.

    The Medicaid and CHIP Payment and Access Commission (MACPAC) 
recommends a 5-year extension of CHIP funding through fiscal year 2022. 
MACPAC also recommends extending the enhanced 23-percentage-point 
Federal match and Maintenance of Effort requirement through fiscal year 
2022.

    At your confirmation hearing, you recommended an 8-year extension, 
as did CMS Administrator Verma. Despite its critical need, CHIP is 
extended for just 2 years in the administration's budget. The budget 
proposes to end the enhanced 23-percent Federal match for States, as 
well as the Maintenance of Effort requirement.

    What is the rationale for attempting to disrupt a stable source of 
health coverage for 8.4 million children, including 375,000 in Florida?

    Answer. The budget proposes to extend funding for CHIP for 2 
additional years through FY 2019. Extending CHIP funding for 2 years 
provides stability to States and families while the future of the 
program is addressed alongside other health reforms. This funding 
guarantees that the most vulnerable children will continue to have 
coverage.

    The budget also proposes a series of improvements that rebalance 
the State-
Federal partnership and increase State flexibility. This proposal ends 
the 23-
percentage point increase in the enhanced Federal match rate and the 
current law maintenance of effort requirement after FY 2017. The budget 
also proposes ending the Obamacare requirement for States to move 
certain children from CHIP into Medicaid and capping the level at which 
States could receive the CHIP enhanced Federal matching rate at 250 
percent of the Federal Poverty Level. These provisions would return the 
focus of CHIP to the most vulnerable and low-income children.

    Question. ALS is a progressive neuromuscular disease that typically 
leads to death within 2 to 5 years of symptom onset. Studies by the 
National Institutes of Health (NIH) and Department of Defense (DOD) 
have documented that military veterans are about twice as likely to die 
from ALS. We know this because the National ALS Registry, housed at the 
CDC, analyzes information from the DOD, the Department of Veterans 
Affairs, NIH, and CMS, as well as from individuals living with ALS.

    The National ALS Registry is a critical resource for (1) providing 
data to researchers focused on developing treatments and prevention 
strategies; and (2) matching patients to potential clinical trials. 
Unfortunately, the administration's budget called for the elimination 
of the National ALS Registry.

    I'm concerned that if funding for the National ALS Registry were 
eliminated, people living with ALS would lose their opportunity to be 
contacted directly for a wide range of clinical trials and other 
important research. Moreover, public and private researchers would lose 
their access to the unique data and patients needed to drive 
understanding of the disease and development of therapies.

    Do you think we should keep this unique and valuable resource that 
researchers and patients rely on?

    Answer. In a constrained budget environment, difficult funding 
decisions must be made to ensure that HHS invests in activities that 
are core to its mission and not duplicative of other efforts across the 
Federal Government. NIH-funded research on ALS will continue, and 
external researchers may still use biospecimens previously obtained 
from the ALS biorepository.

    Question. The Pandemic and All Hazards Preparedness Act (PAHPA) 
created the office of the Assistant Secretary for Preparedness and 
Response--a leader in preventing and responding to public health 
emergencies like the Zika virus. Unfortunately, the administration's 
budget cuts $25 million from this critical office and many other 
programs that are critical to our Nation's public health emergency 
preparedness.

    How do you intend to use lessons learned from past public health 
emergencies, like Hurricane Matthew, Ebola, and now the Zika virus, to 
improve coordination and communication among Federal agencies involved 
in emergency preparedness?

    Answer. Incorporating lessons learned into policies, plans, and 
procedures is a vital component of emergency preparedness. It ensures 
that issues identified in past events do not reoccur during future 
responses. ASPR is continually evaluating its responses to public 
health and medical events, developing lessons learned, and implementing 
actions to improve coordination and communication. Such lessons are 
also provided to emergency response planners and are incorporated into 
future exercises and responses. Lessons learned from past natural 
hazard incidents and disease outbreaks such as Hurricane Matthew, Zika, 
and Ebola, guide strategies for improvement throughout the Department, 
including information sharing; intra/inter-agency coordination; State, 
local, tribal, and territorial coordination; and the management of 
public health and medical assets.

    Following the Ebola response, HHS initiated and participated in a 
number of actions to improve interagency coordination. For instance, we 
recognized a need to codify how infectious disease emergencies are 
managed under the National Response Framework (NRF). This was 
accomplished through significant updates and alignment of the 
Biological Incident Annex (BIA) to the NRF. The BIA now provides the 
overarching framework under which the interagency (the Federal 
executive departments and agencies) organizes and coordinates. This 
includes identifying the thresholds for triggering such coordination, 
particularly for a high-consequence event/threat. The final draft BIA 
was approved by the interagency Domestic Resilience Group (DRG), which 
was convened by the White House in January 2017.

    In addition, HHS has collaborated with the Department of Defense 
(DoD) to leverage their Interagency Transportation Support Framework 
(ITSF) Concept of Operations (CONOPS), which is an agreement between 
HHS and DoD (NORTHCOM) to facilitate the rapid airlift of personnel and 
equipment during a domestic response. This new ITSF CONOPS (post-Haiti 
response) allows HHS to request DoD airlift much faster than previous 
responses because HHS personnel and equipment are now planned and 
integrated into DoD transportation (airlift) systems prior to a 
response.

    Building on lessons learned during the Ebola response, early in the 
Zika outbreak, ASPR convened partners in HHS and across the U.S. 
Government with a goal of sharing information about the supply chain 
and planned procurements of Zika insecticide, traps, and repellents. In 
each of those working groups, members determined how to coordinate to 
make the desired products more readily available to the private sector 
and non-Federal government partners. ASPR is now developing a 
formalized mechanism for coordination of purchases with the Critical 
Infrastructure Partnership Advisory Council.

    Another example of using lessons learned from Ebola is the approach 
taken for planning during the initial stages of the Zika outbreak. HHS, 
led by ASPR and CDC, has developed a draft Federal operational plan 
that builds on the HHS Zika Virus Disease Preparedness and Response 
Goals and Objectives. The Zika planning construct displays the 
connections and relationships between the HHS-led Zika plans and other 
planning efforts. The U.S. Government Zika Virus Disease Contingency 
Response Plan describes the Unified Coordination Group's operational 
coordination and synchronization, as well as the steps necessary among 
Federal agency partners and State representatives to assist HHS in 
response activities. In the event of a large scale Federal response 
where the impact of a particular incident overwhelms State and local 
resources or the lead Federal agency, HHS would determine whether 
interagency support is or will be required.

    Finally, the Department has utilized the lessons learned from the 
2009/2010 pandemic experience and other public health responses to 
ensure that the Department is better prepared for the next pandemic 
influenza incident. The Department recently published its 2017 update 
to its Pandemic Influenza Plan. Originally adopted in 2005 and last 
updated in January 2009, the 2017 Pandemic Influenza Plan Update 
applies the public health lessons learned since January 2009.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
                       autism cares act programs
    Question. The Autism CARES Act of 2014, which I authored and which 
was passed unanimously by Congress, reauthorized Federal autism 
programs through fiscal year 2019. These programs include training 
programs, research, and State systems grants. The proposed budget 
eliminates all funding for these programs, despite the well-recognized 
and growing need for the services they facilitate.

    The Leadership Education in Neurodevelopmental and Related 
Disabilities (LEND) program supports the interdisciplinary training of 
graduate-level professionals in improving the quality of care to fit 
the unique needs of young people with disabilities. This program 
currently funds 52 projects in 44 States across the country, including 
at Rutgers University in my home State of New Jersey. Collectively, 
these projects share information with each other as part of a national 
network. Does the department believe that supporting the training of 
professionals to provide care for people with autism and other 
disabilities is no longer a Federal responsibility?

    Answer. The President's budget prioritizes programs that support 
direct health-care services and give States and communities the 
flexibility to meet local needs. Some of these activities could be 
continued by States using their Maternal and Child Health Block Grant 
awards.

    Question. The Interdisciplinary Technical Assistance Center (ITAC), 
authorized by the Autism CARES Act, provides technical assistance to 
LEND programs and Developmental-Behavioral Pediatrics (DBP) programs 
and helps to coordinate activities at programs that receive funding as 
a result of the Autism CARES Act. Do you believe that funding the 
coordination and sharing of information between LEND and DBP programs 
is no longer a Federal priority?

    Answer. The President's budget prioritizes programs that support 
direct health-care services and give States and communities the 
flexibility to meet local needs. Some of these activities could be 
continued by States using their Maternal and Child Health Block Grant 
awards.

    Question. The fiscal year 2018 HHS budget justification for Autism 
CARES Act programs States, ``The budget prioritizes programs that 
support direct health-care services and give States and communities the 
flexibility to meet local needs.'' Do you believe that the challenges 
that a person with autism faces are any less a priority based on if 
they live in a specific State or community?

    Answer. The President's budget continues support for programs, such 
as the Maternal and Child Health Block Grant, which enable States and 
communities to determine how to best support training of professionals 
to provide care for people with autism and other disabilities in their 
State.
             supporting diversity in the health professions
    Question. The FY18 proposed budget eliminates funding for programs 
such as the Health Careers Opportunity Program, Centers of Excellence, 
and Scholarships for Disadvantaged Students. These programs have 
collectively assisted in the education and training of tens of 
thousands of health-care professionals from under-
represented minority populations.

    Federal programs that provide funding to facilitate the education 
and training of under-represented minorities in the health professions 
have historically been shown to have increased the number of health-
care professionals willing to practice in medically underserved areas. 
The fiscal year 2018 HHS budget justification for these programs states 
that the budget is prioritizing funding for clinicians who serve ``in 
areas of the United States where there is a shortage of health 
professionals.'' Aren't medically underserved areas by definition 
suffering from a shortage of health professionals?

    Answer. The budget prioritizes funding for training and education 
programs that include a service obligation which ensures that 
clinicians are serving these medically underserved communities. The 
budget's investment in scholarships and loan repayment programs ensures 
a direct impact on the provision of services in areas experiencing 
shortages of providers.

    In addition, the budget also proposes funding for the Teaching 
Health Center Graduate Medical Education (THCGME) program in which 
approximately 77 percent of residents received training in medically 
underserved communities and approximately 23 percent of residents 
reported coming from a financially or educationally disadvantaged 
background, characteristics which are both correlated with likelihood 
of practicing in underserved areas. In fact, 50 percent of THCGME 
residents report that they intend to practice in a medically 
underserved and/or rural area.

    Question. The Association of American Medical Colleges released a 
survey in 2016 on diversity in medical education. In 2015, over 51 
percent of matriculating students at medical colleges who were black or 
African-American reported that they were planning on practicing 
primarily in a medically underserved area. Over 39 percent of Hispanic 
or Latino students, 37 percent of American Indian or Alaska Native 
students, and over 34 percent of Native Hawaiian or other Pacific 
Islander students reported the same. This compares to 22 percent of 
white and Asian students, who together comprise 71 percent of all 
matriculating students at U.S. medical colleges. In the absence of 
Federal programs whose primary goal is to assist under-
represented minority populations achieve careers in the health 
professions, how does the Department intend on addressing the needs of 
medically underserved areas, some of which have to do with cultural 
competency?

    Answer. HRSA's key loan repayment and scholarship programs, the 
National Health Service Corps (NHSC) and NURSE Corps, improve the 
health of the Nation's underserved by recruiting and retaining health-
care providers to serve in health professional shortage areas. These 
programs tend to attract higher percentages of health professions 
students and clinicians who are underrepresented minorities and from 
rural and disadvantaged backgrounds relative to the broader health 
workforce.


Diversity Among Physicians, Dentists, and Nurse Practitioners Within the
               NHSC as  Compared to the National Workforce
------------------------------------------------------------------------
                                        Hispanic/      American  Indian/
                 African  American      Latino(a)        Alaskan Native
------------------------------------------------------------------------
Total NHSC                  13.5%              12.2%               2.6%
 Field
------------------------------------------------------------------------
MD/DO
    NHSC                    17.2%              18.1%               1.3%
    National                 4.1%               4.4%               0.4%
------------------------------------------------------------------------
DDS
    NHSC                    15.2%              14.0%               1.7%
    National                 2.9%               8.1%                ---
------------------------------------------------------------------------
NP
    NHSC                    17.6%               7.4%               2.9%
    National                 8.2%               2.5%                ---
------------------------------------------------------------------------


    NHSC providers have higher retention in poorer and less educated 
communities, where participants select into Health Professional 
Shortage Areas based on their preferences for serving underserved 
populations.\6\ Former NHSC participants also are more likely than non-
participants to serve low-income patients--they tend to have high 
levels of Medicaid participation, practice in community health centers, 
and locate in areas with a health professional shortage (and counties 
with high percentages of minorities and people living in 
poverty).\7\, \8\, \9\
---------------------------------------------------------------------------
    \6\ Sebastian Negrusa, Projesh Ghosh, and John T. Warner. 
``Provider Retention in High Need Areas.'' Prepared for Assistant 
Secretary for Planning and Evaluation. Submitted by The Lewin Group, 
Inc. December 22, 2014. https://aspe.hhs.gov/report/provider-retention-
high-need-areas.
    \7\ Bhatavadekar, N.B., R.G. Rozier, et al. (2011). ``Holding up 
the oral health safety net: the role of National Health Service Corps 
alumni dentists in North Carolina.'' Int. Dent. J. 61(3): 136-43. 
https://www.ncbi.nlm.nih.gov/pubmed/21692784.
    \8\ Porterfield, D.S., T.R. Konrad, et al. (2003). ``Caring for the 
underserved: current practice of alumni of the National Health Service 
Corps.'' J. Health Care Poor Underserved 14(2): 256-71. https://
www.ncbi.nlm.nih.gov/pubmed/12739304.
    \9\ Probst, J.C., M.E. Samuels, et al. (2003). ``The National 
Health Service Corps and Medicaid inpatient care: experience in a 
southern State.'' South. Med. J. 96(8): 775-83. https://
www.ncbi.nlm.nih.gov/pubmed/14515918.


    Diversity Among Registered Nurses, Nurse Faculty, and Nurse Practitioners Within the PNURSE Corps (NC) as
                                       Compared to the National Workforce
----------------------------------------------------------------------------------------------------------------
                                                                                                     American
                                                  African         Hispanic/          Asian          Indian/ N.
                                                  American        Latino(a)                          Hawaiian
----------------------------------------------------------------------------------------------------------------
Total NC Field                                           16%               6%               5%             2.7%
----------------------------------------------------------------------------------------------------------------
Registered Nurse
    NC                                                 17.6%               7%             5.5%             3.5%
    National                                           12.2%             6.6%             8.7%              N/A
----------------------------------------------------------------------------------------------------------------
Nurse Faculty
    NC                                                 15.3%             3.4%               2%              .9%
    National                                              7%               3%               2%              .6%
----------------------------------------------------------------------------------------------------------------
Nurse Practitioner
    NC                                                 14.6%             6.1%             5.5%             2.7%
    National                                            6.0%             3.0%             1.0%              N/A
----------------------------------------------------------------------------------------------------------------


    Question. The budget justification for the Scholarships for 
Disadvantaged Students Program argues that students from disadvantaged 
backgrounds could simply seek assistance from ``private and non-profit 
scholarships and other Federal loan programs that support student 
education.'' Such a justification seems to simply disregard the 
significant institutional barriers that people of color and people from 
disadvantaged backgrounds face as they seek to achieve success. 
According to HHS's own data, 65 percent of students with SDS 
scholarships during fiscal year 2015 were members of under-represented 
minority groups. What proportion of the students currently served by 
SDS do you believe would receive assistance by other means?

    Answer. Grants and loans are the major forms of Federal financial 
aid for degree/certificate-seeking undergraduate students, including 
students from disadvantaged backgrounds. The largest Federal grant 
program available to undergraduate students is the Pell Grant program. 
In order to qualify for a Pell Grant, a student must demonstrate 
financial need. Federal loans, on the other hand, are available to all 
students. In addition to Federal financial aid, grants from State and 
local governments, institutions, and private sources are available, as 
are private loans. There are also Parent Loans for Undergraduate 
Students (PLUS) and other loans made directly to parents. The 
Department of Education offers assistance in finding and applying to 
private and Federal scholarship and loan opportunities here: https://
studentaid.ed.gov/sa/types.

    While the administration defers to Department of Education about 
the specifics for under-represented minorities, 86 percent of first-
time, full-time degree/certificate-seeking undergraduate students were 
awarded financial aid in academic year 2014-2015 at 4-year degree-
granting postsecondary institutions.\10\
---------------------------------------------------------------------------
    \10\ See: https://nces.ed.gov/fastfacts/display.asp?id=31.
---------------------------------------------------------------------------
                  children's health insurance program
    Question. The FY18 proposed budget makes several changes to the 
Children's Health Insurance Program that stand to increase costs to 
States and put health-care coverage for some of our most vulnerable 
citizens--our children--at risk. These proposals include ending the 23 
percentage point increase in the enhanced Federal match rate for CHIP 
funding, ending the maintenance of effort provision that requires 
States to maintain their eligibility levels and prevents States from 
imposing more restrictive standards for eligibility or enrollment, and 
for the first time imposing a cap on the enhanced Federal match rate at 
250 percent of the Federal poverty level.

    New Jersey currently allows for enrollment in CHIP for children in 
families whose income does not exceed 355 percent of the Federal 
poverty level. Analysis by New Jersey Policy Perspective suggests that 
a cap on the enhanced Federal match rate would threaten the health-care 
coverage of 35,000 children in New Jersey. The Department's proposal 
would weaken the flexibility that high-cost States like New Jersey have 
used to increase eligibility levels to fit their State's needs. How 
does the Department expect high-cost States like New Jersey to continue 
to provide care to those that it has decided should be eligible for it?

    Should the maintenance of effort provision, which does not expire 
until the end of fiscal year 2019, be ended early by congressional 
action, which States do you expect will enact policies that will 
restrict eligibility levels for CHIP or create new burdens to 
enrollment in CHIP?

    Answer. The 2-year extension included in the budget provides 
budgetary stability and additional flexibility to States while focusing 
the program on lower-income families. The budget would allow States the 
flexibility to set eligibility levels and features of their CHIP 
programs that reflect individual State needs and populations. This 2-
year extension would provide stability during the period of health 
system reforms, including the implementation of the Medicaid reforms 
and new flexibilities for States.
               centers for disease control and prevention
    Question. The FY18 proposed budget makes deep cuts to a variety of 
programs at the CDC, at a time when our Nation continues to face 
significant public health challenges. This includes the elimination of 
several vital programs that have made a positive contribution to public 
health.

    The FY18 budget request reduces funding for Public Health 
Preparedness and Response by $136.3 million. The budget justification 
States that resources will be directed to the States with the 
``greatest need.'' In FY16, New Jersey received more than $20 million 
in funding through the Public Health Emergency Preparedness, Public 
Health Preparedness and Response, and Hospital Preparedness Programs, 
including funding for the public health response to the Zika virus. In 
FY15, New Jersey received more than $25 million through these programs 
to assist in the response to the Ebola virus. How do you define 
``greatest need?'' How would the Department determine what States are 
prioritized at the expense of others?

    Answer. The FY 2018 President's budget restructures HHS 
preparedness grants to direct resources to States with the greatest 
need and to provide more innovative approaches. As outlined in the 
proposed FY 2018 budget, the Public Health Emergency Preparedness 
(PHEP) cooperative agreement will gain efficiencies, address gaps, and 
incentivize innovation by incorporating a competitive and risk-based 
component.

    The PHEP program works to protect the health and safety of the 
population during a public health event or emergency. Therefore, the 
historical risk component is a population-based formula and is intended 
to direct more resources to those jurisdictions with higher 
populations. The proposed new funding formula is not yet final; 
however, all current 62 PHEP award recipients will continue to receive 
funding to ensure some level of sustainability and maintenance of 
public health preparedness and response capacity and capability.
      maternal, infant, and early childhood home visiting program
    Question. The Maternal, Infant, and Early Childhood Home Visiting 
(MIECHV) program has been incredibly successful since I successfully 
incorporated it as part of the Affordable Care Act in 2010. Through 
this program, nurses, social workers, or other professionals visit at-
risk families in their homes to evaluate their living situation and 
provide information on resources available to improve the health, 
educational, and economic opportunities for at-risk children. These 
resources include services such as health care, early education, 
parenting skills, child abuse prevention, and nutrition education or 
assistance. Nearly 1 million home visits were made to over 160,000 
program participants as a result of this program in FY16.

    I am pleased that the Department supports the continuation of this 
program, which is set to expire at the end of the current fiscal year. 
However, I am concerned that the Department's budget request asks only 
for funding to continue through fiscal year 2019. Is it the stated 
policy of the Department to allow the MIECHV program to expire at the 
end of fiscal year 2019?

    Answer. The Maternal, Infant, and Early Childhood Home Visiting 
program is one of five HRSA programs that is funded through FY 2017 
under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). 
The FY 2018 President's budget requests 2-year funding for Fiscal Years 
2018 and 2019 for Home Visiting and the other four MACRA-funded 
programs--Health Centers, the National Health Service Corps, Teaching 
Health Center Graduate Medical Education, and Family-to-Family Health 
Information Centers. Funding decisions for resources beyond FY 2019 
will be decided in future year budgets.

                                 ______
                                 
              Questions Submitted by Hon. Thomas R. Carper
    Question. I understand that reducing childhood obesity and opioid 
addiction are two of your top priorities as the Secretary of the Health 
and Human Services Department. Is that right? Can you discuss your 
efforts to address these two critical challenges facing our country? 
What is your strategy for reducing obesity among our youngest children 
when the budget eliminated $4 million for the early child care obesity 
program, which has reduced childhood obesity rates in 10 States?

    Answer. Reducing childhood obesity and opioid addiction are 
critical priorities for HHS, along with addressing serious mental 
illness.

    The FY 2018 President's budget calls for $811 million in support of 
the five-pronged strategy guiding the Department's efforts to reduce 
opioid misuse and abuse:

      Improving access to prevention, treatment, and recovery 
services, including the full range of medication-assisted treatment;

      Promoting targeted availability and distribution of overdose-
reversing drugs;

      Strengthening our understanding of the epidemic through better 
public health surveillance;

      Providing support for cutting edge research on pain and 
addiction; and

      Advancing better practices for pain management.

    This funding increase will expand grants to Health Resources 
Services Administration (HRSA) Community Health Centers targeting 
substance abuse treatment services from $94 million to $144 million. 
Also within this total is $500 million for State Targeted Response to 
the Opioid Crisis Grants that were authorized in the 21st Century Cures 
Act, which expand access to treatment for opioid addiction. Using 
evidence-based interventions, these grants will help to address the 
primary barriers preventing individuals from seeking and successfully 
completing treatment and achieving and sustaining recovery.

    CDC's activities are focused on equipping States with resources and 
scientific expertise to address opioid overdose. Some examples of State 
activities include maximizing the use of prescription drug monitoring 
programs (PDMPs), linking across sectors including public health, 
public safety, and treatment, and the analysis of State-level policies 
to evaluate efficacy and inform strategies that can be scaled up across 
States. CDC is also working to improve opioid overdose data, by making 
it more timely and higher quality. The better we understand the opioids 
problem, the better we can respond to it--on the national, State, and 
local levels.

    With respect to childhood obesity, approximately 12 million 
children in the United States are obese, putting them at increased risk 
for serious and costly health and social consequences. A two-pronged 
approach is needed to: (1) prevent obesity for children by achieving 
and maintaining a healthy weight, and (2) treat the millions of 
children struggling with obesity.

    Preventing obesity requires addressing a number of specific risk 
factors including poor nutrition, low levels of physical activity, 
inadequate sleep, and sedentary behaviors. The National Academies 
recommend that nutrition and physical activity interventions occur in 
the places where children spend their time. HHS grantees, therefore, 
address these risk factors through supporting providers and families in 
key community settings where children learn, live, and play through 
data, resources, and training including: community settings, schools, 
and early care and education settings.

    Question. I believe we both share the goal of ensuring that 
Medicare is an efficient and effective payer and that it derives the 
greatest value that it can for both patients and taxpayers. I have 
heard from various parties that outcomes-based contracts can help drive 
our system from fee-for-service to value-based. However, I understand 
that there are several regulatory barriers in place, including Medicaid 
Best Price, that are serving as deterrents to our fully being able to 
realize the potential of these types of value-based arrangements. Can I 
count on you and others in the administration to seek to address these 
regulatory barriers?

    Answer. (See response below.)

    Question. Today, we stand on the cusp of very exciting developments 
in biomedical science, including but not limited to cell and gene 
therapies. However, as we have seen great advances in science, Medicare 
and Medicaid have lagged in appropriately reimbursing these 
technologies. What changes to our public payer systems would you 
suggest to ensure that this innovation continue and that these 
technologies are both recognized and appropriately reimbursed?

    Answer. HHS is committed to achieving the President's goal of 
eliminating barriers to innovation, whether through regulatory relief 
or other actions to spur innovation on behalf of patients. The 
administration has included as part of this budget a set of actions to 
provide regulatory relief to the industry and speed the development of 
safe and effective medical products.

    Question. I have heard from insurers that the continuous coverage 
requirement in the American Health Care Act will not be an adequate 
replacement for the individual mandate. Some of my Republican 
colleagues have pointed to the auto-
enrollment individuals into health insurance plans as another way to 
ensure that insurers have adequate risk pools to spread risk and 
restrain premiums. From your perspective, what are the pros and cons of 
continuous coverage and auto-enrollment?

    Answer. The individual mandate has not worked and millions of 
Americans are not buying into the notion of Washington-controlled 
health care. In January 2017, the IRS reported that around 6.5 million 
Americans paid $3 billion in penalties to the IRS rather than buy 
unaffordable Obamacare plans in 2015. Americans should have the freedom 
to make the decisions that are right for them and their families, and 
should have more choices and access to the health care they want and 
deserve.

    Obamacare is failing the American people, delivering high costs, 
few options, and broken promises. The administration has supported 
legislation including the House-passed AHCA that replaced the failing 
individual mandate with policies that encouraged continuous coverage. 
The devastating effects of Obamacare go beyond the flawed individual 
mandate. If we do not act, many more Americans could lose access to 
care.

    The administration is taking steps to increase patient choice and 
provide greater flexibility for issuers to help attract healthy 
consumers, with the aim of improving the risk pool and bringing 
stability to the individual and small group markets. On April 13, 2017, 
CMS finalized the Market Stabilization rule, which includes policies to 
ease issuer burden and provide States with greater flexibility.

    Question. Last year, 60,000 Americans died from a drug overdose. 
Drug addictions are now the leading cause of death among Americans 
under 50. As you have held listening sessions on the opioid epidemic 
around the country, what are the most important recommendations that 
Congress and the Federal Government should heed? Last month, Senator 
Portman and I held a hearing on the opioid and drug addiction crisis 
ravaging our country. Our second panel included a police chief and a 
medical examiner from Ohio, a physician from Delaware, and Michael 
Botticelli, the drug czar in the Obama administration. Every one of 
them expressed concerns that the AHCA's $800 billion dollar cut to 
Medicaid would decimate their efforts to stem the opioid addiction 
epidemic. How many of the experts and patients that you have heard from 
have encouraged you to reduce Medicaid coverage or to eliminate private 
health insurance protections that guarantee coverage for drug addiction 
treatment? If you have received those types of recommendations, please 
share those suggestions with me and the other members of this committee 
in writing.

    Answer. The U.S. Department of Health and Human Services (HHS) is 
keenly aware of the devastating impact that opioid addiction is having 
on our families and communities. The administration is committed to 
doing all that we can to end the scourge of opioids that is sweeping 
across this Nation.

    The administration is committed to bringing everything the Federal 
Government has to bear to address the health crisis opioids pose. The 
budget calls for $811 million in support of the five-pronged strategy 
guiding our Department's efforts to fight this scourge:

    1.  Improving access to prevention, treatment, and recovery 
services, including the full range of medication-assisted treatments;
    2.  Targeting availability and distribution of overdose-reversing 
drugs;
    3.  Strengthening our understanding of the crisis through better 
public health surveillance data and reporting;
    4.  Providing support for cutting edge research on pain and 
addiction; and
    5.  Advancing better practices for pain management.

    This funding increase will expand grants to Health Resources 
Services Administration (HRSA) Community Health Centers targeting 
substance abuse treatment services from $94 million to $144 million. 
Also within this total is $500 million for State Targeted Response to 
the Opioid Crisis Grants that were authorized in the 21st Century Cures 
Act, which expand access to treatment for opioid addiction. Using 
evidence-based interventions, these grants will help to address the 
primary barriers preventing individuals from seeking and successfully 
completing treatment and achieving and sustaining recovery.

    One of the key pillars of our approach is improving access to 
treatment and recovery services, including medication-assisted 
treatment (MAT) with naltrexone, buprenorphine, or methadone. As 
mentioned above, through the State Targeted Response to the Opioid 
Crisis grants authorized in the 21st Century Cures Act, HHS is 
expanding access to opioid addiction treatment through evidence-based 
interventions, including MAT. We are targeting the primary barriers to 
seeking and successfully completing treatment and achieving and 
sustaining recovery. This funding is critical to reversing the opioid 
epidemic.

    We will continue to explore additional opportunities for States to 
provide a full continuum of care for people struggling with addiction 
and develop a more streamlined approach for section 1115 substance 
abuse treatment demonstrations. We look forward to building upon 
initial efforts, including previous collaborations, amongst the States.

    Question. Our Republican colleagues are working behind closed doors 
with no public hearings, discussion, or transparency to pass a health-
care bill that, according to the Congressional Budget Office, cuts 
funding to Medicaid by more than $800 billion over 10 years and 
requires seniors to endure an 800 percent increase in their health 
insurance premiums. CBO found that the House Republicans' health-care 
bill would create unstable health insurance markets in a sixth of the 
country where sicker Americans would be priced out of insurance 
coverage. Maternity care and substance abuse treatment would become 
unaffordable for many lower-income Americans. President Trump has said 
that his health-care plan will result in ``insurance for everybody'' 
with ``much better health care . . . at much less money.'' Can you 
explain how unaffordable maternity care and substance abuse treatment 
meets the standard of ``much better health care'' for ``less money''?

    Answer. President Trump is committed to signing a bill into law 
that will provide all Americans access to quality, affordable health-
care coverage, and will provide individuals and families tools to 
choose the coverage that best meets their needs.

    Question. You rightly noted when we first met that the cost-sharing 
reduction payments are the most important issue for health insurers 
deciding whether to remain on the health insurance marketplaces. Do you 
think that cost-sharing reduction payments will remain in place through 
2018? What have you recommended to President Trump regarding the cost-
sharing reduction payments?

    Answer. (See response below.)

    Question. Does the President understand that his threats to 
discontinue the cost-sharing reduction payments has forced insurers to 
exit some insurance marketplaces or increased premiums by as much as 20 
percent? What was the President's response to your recommendations?

    Answer. The administration has emphasized the importance of 
reforming our health-care system to one that works better for patients 
and their providers. Our budget calls for Congress to repeal and 
replace the Affordable Care Act. In the interim, we are evaluating 
policy options to relieve American's from Obamacare's burdensome 
mandates and to restore choice and competition to the individual and 
small group markets, increasing availability of health insurance 
options so that all Americans can purchase coverage that meets their 
needs.

    Question. The President has said repeatedly he wants to force 
Democrats to the table on health-care reform. That's a ridiculous 
statement. I, and every Democrat I know, have been at the table since 
before the ACA was passed, getting stood up for the last 8 years. To 
your knowledge, has the President ever called or spoken to a Democratic 
member of Congress, on the House or the Senate, about a bipartisan path 
forward to improve our health-care system? Since your confirmation, how 
many substantive conversations have you had with a Democrat in Congress 
about improving the individual health insurance market and Medicaid?

    Answer. Obamacare is failing the American people, and it's 
devastating effects are more apparent every day. The administration is 
eager to work with Congress--Republicans and Democrats--to rescue 
Americans from the failures of the Obamacare.

                                 ______
                                 
               Questions Submitted by Hon. Sherrod Brown
            national institutes of health (nih) total budget
    Question. In your recent testimony before the House Energy and 
Commerce Committee, you praised the ``incredibly important'' work of 
the NIH. As a physician, you can appreciate the value of basic 
biomedical research leading to the development of novel medications and 
discovery of new medical procedures, both with the support of NIH 
funding, which lead to advances in patient outcomes and survival.

    On June 6th, President Trump publically announced that he planned 
to keep Dr. Francis Collins as the director of the NIH. Just last year, 
Dr. Collins asked for $33.136 billion for FY17, and in fact, the 
Presidential budget request for NIH has not been below the President 
Trumps FY18 ask of $26.92 billion since FY 2002. That is almost two 
decades.

    Based on your supportive stance on the NIH and the history of the 
NIH budget request, can you please explain why you think a 22 percent 
cut in the NIH budget from FY17 to FY18 is even feasible?

    Answer. The FY 2018 budget presents an opportunity for HHS and NIH 
to reexamine how to optimize Federal investment in a way that best 
serves the American people. This policy will enhance the stewardship of 
taxpayer dollars by focusing our resources on innovative scientific 
research. The Department assessed opportunities within the NIH to 
determine where greater efficiencies may be possible.

    Additionally, the administration will propose a package of reforms 
to streamline Federal compliance requirements and reduce burden on NIH 
grantees. These targeted policies will reduce the time and expenses 
that grantees must currently spend to comply with overly burdensome 
Federal grant requirements, thus lowering grantees' administrative 
costs and mitigating the impact of lower reimbursements. The approach 
will also seek to develop a uniform indirect cost rate to all grants 
that mitigates the risk for fraud and abuse by simplifying and 
uniformly applying the rate for grantees.

    Question. A cut of this magnitude will greatly impact the United 
States' seniority and leadership in biomedical and clinical research. I 
have heard repeatedly from constituents who remind me that research 
projects are not conducted in just a few months; clinical trials are 
not completed within one calendar year. The extreme fluctuations in 
funding levels suggested by this budget will drive American research 
progress to a halt. But the impact of such a cut goes beyond the 
research. NIH funding supports nearly 17,000 jobs in Ohio. At a recent 
House Energy and Commerce hearing, Representative Nita Lowey cited that 
the proposed NIH cuts would result in up to 8,000 fewer grants awarded, 
and decimate the economy by eliminating 90,000 jobs at medical 
institutions across the country.

    Do you envision that adoption of the President's budget will have 
no economic impact?

    How do you envision such a dramatic budget cut to the NIH will not 
yield wide-spread scientific and economic impacts across this country?

    Answer. Thank you for recognizing both the long arc of research and 
the economic value of NIH investments. The Department supports the 
administration's agenda of creating a more effective and efficient 
government and to support economic growth. The FY 2018 budget presents 
an opportunity for HHS and NIH to reexamine how to optimize Federal 
investment in a way that best serves the American people. These changes 
will enhance the stewardship of taxpayer dollars by focusing our 
resources on innovative scientific research rather than administrative 
and overhead costs.
                             indirect costs
    Question. In your March testimony before the House Energy and 
Commerce Committee, you commented that the facilities and 
administration, or indirect costs, covered by NIH grants are 
``inefficiencies.'' These ``inefficiencies'' include essentials like 
the facilities where research is conducted, utilities that keep 
freezers and incubators on, and the staff that manage the grants and 
keep the research enterprise running. Currently, research grants 
awarded to your former employer, Emory University, put aside 
approximately 35 percent towards these indirect costs.

    One argument I have heard is that many private foundations offer 
research grants with only 10 percent set aside to cover indirect costs. 
NIH Director Dr. Collins commented on this in his recent testimony 
before the House Appropriations Labor, HHS-Education Subcommittee, 
noting that universities are only able to accept grants with these 
lower indirect cost rates because of the support they already receive 
from the NIH. He stated that even NIH grants are not sufficient for 
covering all indirect costs associated with research projects. Dr. 
Collins warned that if NIH grants dropped indirect cost rates to 10 
percent, many small- to mid-sized universities, especially State 
schools, would no longer be able to afford NIH-funded research.

    If you reduce indirect costs to a cap of 10 percent, how do you 
expect a medical institution of any size to pick up the slack 
overnight? Will it be in decreasing the number of staff? Number of 
medical and graduate students? Number of patients the hospital can 
take? Increasing tuition?

    Answer. The effect on grantees will vary by institution, depending 
on the current indirect cost rate and a variety of other factors. The 
impact will likely be greater on institutions that have a higher 
percentage of NIH funding compared to total funding, or a lower ability 
to cover indirect costs from other sources (e.g., donations, endowment 
income, State government, tuition). The Department continues to work on 
specific details of the NIH indirect cost policy for FY 2018 and will 
assess the impact on grantees once the policy is finalized.
                     the public-private partnership
    Question. Secretary Price, in your nomination hearing QFR 
responses, you stated that the ``NIH plays a leading role in so many 
public-private initiatives'' and that you are ``. . . keenly aware of 
the progress that has been made and still to be made through important 
research initiatives that are fully or partially funded by the Federal 
Government.''

    I agree that partnerships between academia and the private sector 
are important, especially for the efficient translation of new research 
into cures and treatments for patients. I also want to enforce that 
relying on private funding to cover differences imposed by NIH budget 
cuts is not a feasible option. In that same House Appropriations Labor, 
HHS-Education Subcommittee hearing last month, Dr. Collins commented on 
a recent meeting in the White House, involving biotech CEOs and 
academic scientists and their descriptions of public-private 
partnerships. Dr. Collins reflected that the biotech leaders ``were 
quite clear . . . that their stockholders would not necessarily 
appreciate their putting money into things that are not directly 
connected to a product.''

    What are concrete examples that you can offer to medical schools on 
how they can ``cut corners'' when they lose 20+ percent of an NIH grant 
based on this proposed budget?

    How do you expect the United States to maintain its role as a 
leader in innovation in biomedical research and patient care under 
these proposed cuts?

    Answer. Working with industry is a powerful tool to improving the 
health of our Nation and our economy. Officials from across the U.S. 
Department of Health and Human Services (HHS), including leadership of 
the NIH and FDA, have begun discussions with pharmaceutical companies 
about developing non-addictive pain medications and new formulations of 
opioid antidotes. The United States is a leader in biomedical research 
due, in no small part, to our ability to marshal the strengths of the 
public and private sectors to address the health-care needs of America. 
HHS is not currently involved in the budgetary decisions made by 
medical schools and will continue to defer to medical schools to 
determine future investment strategies.

    Additionally, the FY 2018 President's budget presents an 
opportunity for HHS and NIH to reexamine how to optimize Federal 
investments in a way that best serves the American people. The FY 2018 
request changes the reimbursement of indirect costs for NIH grants, 
which will be capped as a percentage of total research, in order to 
better target available funding toward high priority research. In 
addition, Federal research requirements for grantees will be 
streamlined to reduce grantee burden through targeted approaches as 
proposed by NIH. HHS is working with NIH to identify strategies to 
streamline processes and increase efficiencies, including reforming 
policies to release grantees from the costly and time-consuming 
indirect rate setting process and reporting requirements. These 
targeted policies will reduce the time and expenses that grantees must 
currently spend to comply with overly burdensome Federal grant 
requirements, thus lowering grantees' indirect costs and mitigating the 
impact of lower reimbursements.
             low-income heating assistance program (liheap)
    Question. During your nomination process, I submitted two QFRs 
about the Low-Income Heating Assistance Program (LIHEAP). I want to 
share my questions and your answers with you again in light of the new 
FY18 budget proposal, and then re-phrase my question to you.

    As you may know, the LIHEAP program plays a key role in helping 
low-income families stay warm in the winter and avoid dangerous heat in 
the summer. It is a program that is critical to nearly 450,000 
households in Ohio that otherwise would be forced to choose between 
keeping warm or going hungry.

    If confirmed, will you commit to maintaining the program as 
currently structured?

    Answer. If I am confirmed, I will implement the program dutifully 
in as effective and efficient manner as possible.

    Question. Nationwide, nearly 7 million of our Nation's poorest and 
most vulnerable households rely on the program. Will you commit to 
maintaining and possibly even supporting an increase in the program's 
annual appropriation?

    Answer. If I am confirmed, I will implement the program dutifully 
in as effective and efficient manner as possible. Should circumstances 
on the ground change, and current resources are found to be 
insufficient, I will inform Congress and work with them on finding 
solutions.

    Question. The President's budget calls for no funding for LIHEAP in 
FY18. How do you intend to ``implement the program dutifully in as 
effective and efficient manner as possible'' without any funding?

    Answer. At the time of the confirmation hearing, the administration 
was in the process of reviewing programs and formulating the 
administration's budget. LIHEAP has been unable to demonstrate strong 
performance outcomes. In addition, we reviewed programs and policies of 
utility companies and State and local governments and found that they 
provide significant heating and cooling assistance and the majority of 
States prohibit utilities from discontinuing heating during the winter 
months. With our limited resources and based on that review, we 
determined that continued funding of the LIHEAP program is not the best 
use of taxpayer dollars and have proposed eliminating future funding 
for this program. However, as long as there continues to be an 
appropriation of resources for this program, the U.S. Department of 
Health and Human Services (HHS) will continue to implement the program 
in as effective and efficient manner as possible.
                  public health emergency preparedness
    Question. Secretary Price, in your testimony you touted HHS's 
successful history of responding to and protecting Americans from 
public health emergencies. You talked about your recent trip to Liberia 
and the incredible work of the Centers for Disease Control and 
Prevention in the region combatting Ebola. In this increasingly 
globalized world, serious public health threats are just a plane ride 
away, as you alluded to in your comments about Ebola.

    Given the cuts in the President's budget to public health emergency 
preparedness and the hospital preparedness program, how will the 
administration make sure that communities and health systems are 
prepared to respond to increasingly frequent public health emergencies?

    Answer. Public Health Emergency Preparedness: HHS, through the CDC, 
will continue to support States, cities, and territories through PHEP 
cooperative agreements. CDC will award PHEP cooperative agreement funds 
to all current 62 recipients to ensure some level of sustainability and 
maintenance of public health preparedness and response capacity and 
capability. The FY 2018 budget proposal achieves program efficiencies 
by modifying the PHEP funding formula to prioritize funding to areas 
with greatest risk and by adding a competitive component. The proposed 
new funding formula is not yet final; however, formula changes will 
allow PHEP awardees to address capability gaps, identify opportunities, 
and incentivize innovation. Through PHEP, CDC will continue to provide 
expertise and support to State and local health departments' efforts to 
prepare for and respond to more localized emergencies, including those 
requiring coordinated healthcare and public health responses.

    Through increasing efficiencies and streamlining processes, CDC 
will continue to support critical infrastructure and research to 
facilitate preventing, and responding to, public health emergencies. 
Key ongoing activities will include:

      Regulating and monitoring ownership, use, and transfer of 
dangerous biological agents and toxins;

      Activating CDC's Emergency Operations Center to ensure effective 
and efficient response operations;

      Developing standard Laboratory Response Network protocols and 
providing training and quality assurance for testing biological and 
chemical threat agents;

      Advancing the development of a surveillance system for the 
timely exchange of syndromic data; and

      Developing and expanding partnerships with other Federal 
agencies, national organizations, and the private sector to identify 
opportunities to leverage resources to accomplish common goals.

    At the proposed funding level, CDC would be able to replace most 
expiring Strategic National Stockpile countermeasures in FY 2018. CDC 
will provide training and exercise support in FY 2018 to sustain State 
and local capabilities critical to effectively distribute and dispense 
stockpiled medical countermeasures to ensure access for individuals 
exposed to public health threats.

    In addition to PHEP funding and maintaining the Strategic National 
Stockpile, CDC will continue to provide rapid epidemiological and 
laboratory assistance to States during public health emergencies. CDC's 
unique scientific expertise includes the ability to detect and track a 
broad range of microbes and respond to disease threats from many 
different pathogens, including emerging and resistant infections like 
Candida Auris. In FY 2018, CDC will also continue to invest in the 
Epidemiology and Laboratory Capacity for Infectious Diseases platform, 
a nationwide cooperative agreement focusing on building the essential 
epidemiology and laboratory capabilities in all grantees.

    Hospital Preparedness Program: The Hospital Preparedness Program 
(HPP), administered by ASPR, intends to create a lean and effective 
program in FY 2018 by focusing on those States and jurisdictions with 
the greatest risk. For health-care preparedness, ``risk'' will be 
determined through evidence and science-based tools that consider 
population, national security issues, and the potential for natural 
disasters.

    Under the Department's proposal, those States and jurisdictions 
with the greatest risk will be prioritized to receive health-care 
preparedness and response funding. ASPR strives to assist all 
jurisdictions with preparing for, responding to, and recovering from 
emergencies and disasters. When disaster strikes, ASPR provides 
critical services to protect public health and help communities recover 
faster. For example, ASPR provides substantive preparedness and 
response technical assistance to jurisdictions and systems by 
connecting them with resources and subject matter experts (SMEs) 
through ASPR's Technical Resources Assistance Center and Information 
Exchange (TRACIE).

    TRACIE provides evidence-based applications, technology, and proven 
best practices to help States and communities build enhanced capacity 
and improve their knowledge and effectiveness. TRACIE also provides 
surge assistance and resources during and after incidents.

    With a reduced level of funding, HPP will, through its FY 2018 
budget proposal, direct Federal funds to those jurisdictions at 
greatest risk. Meanwhile, HPP will continue to provide all 
jurisdictions with technical assistance to inform their preparedness 
and response efforts.
                          cdc and vaccinations
    Question. The CDC plays an important role in infectious disease 
control by releasing guidelines and recommendations for vaccinations, 
reducing health disparities by ensuring vaccine access to all Americans 
regardless of insurance status, and conducts research to inform 
policies and practices involving immunizations. With Minnesota's recent 
measles outbreak, now totaling more cases in that one State by June 
than the entire country recorded in all of 2016, it is clear that 
promoting vaccine education and access is still essential.

    Given the deep cut to Immunization and Respiratory Disease in the 
CDC budget, does the administration support widespread adoption of 
vaccines as a method of infectious disease prevention?

    Answer. Vaccines are one of the greatest success stories in public 
health and are among the most cost-effective ways to prevent disease. 
For each dollar invested in the U.S. childhood immunization program, 
there are over $10 of societal savings and $3 in direct medical 
savings. Childhood immunizations over the past 20 years have prevented 
322 million illnesses, 732,000 deaths, and nearly $1.4 trillion in 
societal costs.\11\
---------------------------------------------------------------------------
    \11\ ``Benefits from Immunization During the Vaccines for Children 
Program Era--United States, 1994-2013,'' Centers for Disease Control 
and Prevention, Morbidity and Mortality Weekly Report, April 25, 2014/
63(16);352-355.

    Question. How will the administration ensure people have access to 
vaccines in light of this financial cut to State and local public 
---------------------------------------------------------------------------
health department capacity?

    Answer. The discretionary Immunization Program plays a fundamental 
role in achieving national immunization goals and sustaining high 
vaccination coverage rates to prevent death and disability from 
vaccine-preventable diseases. It is the backbone of our Nation's public 
health immunization system that supports the science that informs our 
national immunization policy and programs; provides a safety net of 
vaccines for uninsured, poor adults and use in outbreak response; 
monitors the safety and effectiveness of vaccines; educates providers 
and the public about the benefits of vaccines and the diseases they 
prevent; and conducts surveillance, laboratory testing, and 
epidemiology to respond to disease outbreaks.

    The CDC Immunization Program provides funding to all 50 States, the 
District of Columbia, 5 major cities and 8 territories. In FY17, 
Congress appropriated $607 million for this important program. At the 
funding level proposed in the FY 2018 President's budget request, CDC 
will continue to provide vaccines and funding for immunization 
infrastructure to the 64 awardees at a reduced level. CDC will also 
continue providing technical assistance and laboratory support to 
States and local communities responding to vaccine-preventable disease 
investigations, including outbreaks, at a reduced level.
           individual marketplace and the affordable care act
    Question. At your confirmation hearing earlier this year, you 
repeated to members of this committee over and over again, that every 
American should have access to health insurance. However, the actions 
your agency is taking and the proposals in this budget do not live up 
to that promise.

    As you know, earlier this week we learned that Anthem will not be 
participating in the individual insurance market in Ohio next year. 
Here's what Anthem said when asked about why they made this decision: 
``The lack of certainty of funding for cost sharing reduction 
subsidies, the restoration of taxes on fully insured coverage, and an 
increasing lack of overall predictability simply does not provide a 
sustainable path forward to provide affordable plan choices for 
consumers.''

    This decision affects more than 66,000 Ohioans, and leaves up to 20 
counties in Ohio with no insurer for next year. What's worse, is it 
leaves more than 10,000 people in my State without ANY access to 
insurance next year.

    You are in charge of the Department of Health and Human Services. 
Your party is in charge of the House and the Senate and the White 
House. Your President, who you advise on health-care issues, has the 
power to help ensure certainty and create a sustainable path forward 
for insurers in the marketplaces by guaranteeing cost-sharing reduction 
(CSR) payments, and by pushing regulations that provide consistency and 
stability as opposed to Executive orders that direct sabotage.

    You have the power to fix this and to ensure that the individuals 
in my State that currently have coverage do not lose it next year.

    Why did you let this happen, and what are you going to do to fix it 
and provide certainty to these Ohio families?

    Answer. (See response below.)

    Question. What are you going to do to fulfill your promise that the 
10,000 Ohioans without any choices next year have access to insurance?

    Answer. Obamacare is a disaster, delivering high costs, few 
options, and broken promises. Americans across the country have seen 
their health insurance choices disappear and premiums spiral out of 
control, increasing by double and triple digits. This administration is 
committed to empowering consumers with providing more choices and 
access to the health care they want and deserve.

    The administration recognizes that States are the primary 
regulators of health insurance, and it remains imperative for the 
executive branch to empower States with more flexibility and control. 
The Department finalized a Market Stability Rule in April, which 
tightened special enrollment periods, made it more difficult for 
enrollees to skip premium payments, adjusted the open enrollment period 
to align with other health-care markets, lifted one-size-fits-all 
requirements regarding network access, and widened the actuarial value 
bands within which insurers can offer plans to patients.

    Our budget calls for Congress to repeal and replace the Affordable 
Care Act. In the interim, we are evaluating policy options to relieve 
American's from Obamacare's burdensome mandates and to restore choice 
and competition to the individual and small group markets, increasing 
availability of health insurance options so that all Americans can 
purchase coverage that meets their needs.
               children's health insurance program (chip)
    Question. The Children's Health Insurance Program, or CHIP, is a 
bipartisan success story. Thanks to the leadership of Senator Hatch and 
former Senator Kennedy, more than 6 million kids across the country--
including approximately 100,000 in Ohio--have access to quality, 
affordable health care. The program will celebrate its 20th anniversary 
this August.

    Throughout its history, Congress has acted to reauthorize and 
improve the program several times. Most recently, we extended funding 
for CHIP for 2 years when we passed MACRA, which passed the Senate by 
an overwhelming vote of 92-8. Thanks to these efforts, fewer children 
remain uninsured than ever before.

    During your confirmation hearing, I was pleased to hear your 
enthusiasm for the CHIP program, and I was thrilled when I asked if you 
would support a 5-year extension of the program and you instead 
suggested Congress act to extend funding for the program for 8 years.

    Much to my disappointment, however, the President's budget only 
proposes a 2-year extension of the program and compromises the CHIP 
program by eliminating a provision that helps kids get covered and 
lowers administrative costs, while cutting support to States. During 
your recent testimony, you mentioned a meeting with the National 
Governor's Association. On May 11th, NGA sent a letter to Congress 
requesting a fast, clean 5-year extension to CHIP. Though you clearly 
value the Governors' input and have, in the past, spoken out for 
States' rights, the FY18 budget does not reflect the recommendations of 
the Nation's Governors regarding CHIP.

    If an 8-year extension is better than 5, as you said earlier this 
year, isn't 8 years also better than the FY18 proposed budget's 2-year 
extension?

    Does the President disagree with your policy recommendation of an 
8-year CHIP extension?

    Do you agree with his proposal, which could hurt kids and working 
families, as well as State budgets?

    Answer. CHIP funding will expire at the end of FY 2017, and without 
an extension of funding, children could lose health-care coverage. This 
proposal would extend CHIP funding for 2 years through FY 2019. The 
administration remains committed to working with Congress to provide 
budgetary stability and additional flexibility to States while 
providing additional help to lower income families.

    Question. Despite the recommendations of the National Governors 
Association and MACPAC, you recommend just a 2-year extension of CHIP 
in the budget proposal. But you go even beyond that, in making 
substantial cuts to CHIP and shifting about $3.5 billion in CHIP costs 
to States through eliminating the enhanced matching rate. You also 
propose to repeal the Maintenance of Eligibility requirement that runs 
through 2019 that requires States to maintain their existing Medicaid 
and CHIP eligibility levels for children and not make it harder for 
eligible children to enroll.

    Do you think it's a good idea to undermine everything we and the 
States have accomplished on a strongly bipartisan basis since the 
enactment of CHIP in 1997?

    Answer. This proposal would extend CHIP funding for 2 years to 
guarantee that the most vulnerable children will continue to have 
coverage. CHIP has made substantial progress in making health-care 
coverage available to children, but there is more work to do. Extending 
CHIP funding for 2 years provides stability to States and families 
while the future of the program is addressed alongside other health 
reforms.

    Question. The budget proposal ends the 23 percent enhanced matching 
rate effective almost immediately. This is a significant cut to States, 
which have planned CHIP implementation based on this matching rate, 
which was to extend through FY 2019.

    Do you expect States to call special sessions for their State 
legislatures in order to develop an emergency contingency plan if this 
significant cut is approved and implemented as proposed, by the end of 
the fiscal year?

    Answer. CMS plans to work with States to achieve flexibility in 
their CHIP programs.
                        medicaid savings in chip
    Question. Your proposed budget assumes over $16 billion in savings 
to the Medicaid program through reducing Medicaid payments in a 2 year 
extension of CHIP. This is a huge cost to States and leaves their hands 
tied with what services they can offer with a drastically reduced 
budget.

    Can you walk me through the policy proposals you considered to 
arrive at this level of savings? Please be specific; a policy is not 
just a number, though it is the way that your staff attempted to 
explain the cuts to Senate health staff at a budget overview briefing 
in May.

    Answer. (See response below.)

    Question. The President's budget proposes capping coverage for 
children on CHIP at 250 percent of the Federal Poverty Level. That's a 
single mom with two kids trying to support her family on $50,000 a 
year. That's a married couple with three kids, working hourly jobs for 
a combined income of $70,000 a year.

    How will you ensure that these families won't face any higher cost-
sharing or any cuts to the benefits that they rely on today if States 
are given complete control over what they will provide, with no Federal 
guidance for minimum standards of care?

    Answer. (See response below.)

    Question. In 2009, the CHIP reauthorization bill included the 
Express Lane Eligibility tool in order to effectively and efficiently 
enroll or renew CHIP-eligible children in the program. This tool helps 
kids get covered while also lowers the administrative cost of running 
enrollment processes.

    Do you not support the effective, cost-saving mechanisms provided 
through Express Lane Eligibility?

    Answer. It is important that every child has access to high-quality 
health coverage, particularly children in lower income families. This 
proposal would extend CHIP funding for 2 years to guarantee that the 
most vulnerable children will continue to have coverage. CMS plans to 
work with States to achieve flexibility in their CHIP programs, while 
focusing resources on lower-income families.

    The budget proposes a 2-year extension of CHIP through fiscal year 
2019, with reforms to rebalance the Federal-State partnership. The 
score of the CHIP proposal reflects the cost of an extension to the 
CHIP program ($13.9 billion). However, because children would move to 
Medicaid or other Federal programs in the absence of extending CHIP, 
this proposal results in savings to Medicaid of $16.7 billion and 
savings to other Federal programs and accounts of $3.0 billion. 
Therefore, this proposal results in net Federal savings over 10 years a 
result of children remaining on CHIP and not migrating to Medicaid or 
other Federal programs.
 syringe exchange programs or syringe services programs (seps and ssps)
    Question. You recently conducted a listening tour in States most 
affected by the opioid epidemic, including a stop in Wilmington, OH. 
One strategy I did not see you mention in your op-eds following your 
tour is the use of syringe exchange programs (SEPs) to stop the spread 
of infectious diseases associated with the opioid epidemic.

    I know you conducted a diverse tour geographically and in terms of 
affected individuals that you met with. Were SEPs discussed as an 
effective method for decreasing devastating clinical side-effects of 
opioid abuse?

    Answer. Please see answer below.

    Question. I asked a few questions of you regarding SEPs following 
your nomination hearing, and your answers did not convince me that you 
understood the value of these programs, and would help States most 
affected by the opioid epidemic to find ways to fund these successful 
programs. Cuyahoga County in Ohio was awarded a ``determination of 
need'' request by CDC in 2016 due to high rates of Hepatitis and HIV 
resulting from injection drug use. Because of the current limitations 
on Federal dollars, the HHS funds going to Cuyahoga County cannot be 
used to purchase needles or syringes to replace used ones.

    You have been the Director of HHS for approximately 4 months now. 
Your clinical knowledge should allow you to assess SEP program 
effectiveness without bias. Furthermore, you have the authority to make 
suggestions to the President and to Congress about effective measures 
to protect the public health of all Americans, including those with 
devastating addictions.

    Will you urge the President and Congress to consider lifting the 
funding ban on clean needles and syringes through federally funded 
SEPs?

    Answer. The rising rates of Hepatitis C and other health 
consequences associated with injection drug use are of great concern. 
The administration is committed to bringing everything the Federal 
Government has to bear to address the health crisis opioids pose, and 
HHS is deploying a comprehensive strategy to address the opioid abuse 
crisis and opioid-related harms. HHS has identified five specific 
strategies that we can bring to the fight: improving access to 
prevention, treatment, and recovery services, including the full range 
of medication-assisted treatments; targeting availability and 
distribution of overdose-reversing drugs; strengthening our 
understanding of the crisis through better public health surveillance; 
providing support for cutting-edge research on pain and addiction; and 
advancing better practices for pain management. In recent years, 
Congress has provided HHS limited authority to support components of 
syringe exchange programs. HHS looks forward to continuing to work with 
Congress on this issue and will implement the law as directed.
                    advisory role of cabinet members
    Question. I am frustrated by many of your answers to your 
nomination QFRs when discussing your role as a Cabinet member. You 
often commented that you would be an administrator and not a 
legislator, implying your limited influence on policy changes. However, 
as a chosen Cabinet member, the President relies on you as a trusted 
adviser to inform his decisions regarding your areas of expertise; I 
fully expect that you are indeed serving as a policy adviser and not 
just waiting in the wings for congressional action.

    In developing the FY18 budget, what was your role in informing the 
President regarding his suggested changes to the HHS budget?

    Answer. Anyone who has worked on the President's budget knows it is 
second only to passing legislation in terms of the compromise, 
collaboration, and commitment required. Director Mulvaney and the U.S. 
Department of Health and Human Services (HHS) maintained open lines of 
communication during the budget process. The President's FY 2018 budget 
reflects difficult decisions made across the Federal agencies, 
including at HHS. Implementing this budget is step one in the 
President's plan to improve our Nation's fiscal stability and HHS 
supports the President's goals.

    Question. During the hearing, I spoke about the huge financial 
impact that the Medicaid program has on Ohio's ability to fight the 
opioid epidemic. You have spoken about your recent visit to Ohio, and 
it seems an unnecessary trip if you are not using that interaction as a 
way to inform policy changes that the President may suggest. According 
to the FY18 proposed budget, that ``policy change'' is a cut of $618 
million from the Medicaid program.

    What was your thought process, as an adviser to the President, in 
arriving at such a drastic cut to the Medicaid program? What is the 
justification for the cuts, and what are your actual policy suggestions 
that States can functionally use to absorb these deep cuts and continue 
to serve their residents?

    Answer. The budget provides additional flexibility to States and 
reforms the fiscal structure of Medicaid, allowing a choice between a 
per capita cap or a block grant beginning in FY 2020. Rigid and 
outdated Federal rules and requirements prevent States from 
prioritizing Federal resources to their most vulnerable populations and 
from innovating and testing new ideas that will improve access to care 
and health outcomes. This proposal will free States to advance 
solutions that best serve their unique populations--for example, 
encouraging work, promoting personal responsibility, and meeting the 
spectrum of diverse needs of their Medicaid populations. States, as 
administrators of the program, are in the best position to assess the 
unique needs of their populations. The administration is determined to 
work with Congress to put in place a plan to give States the 
flexibility they need to achieve better health outcomes for patients 
while putting Medicaid on a more sustainable fiscal trajectory.
                           tobacco cessation
    Question. In the QFRs for your nomination, I asked a few questions 
about tobacco cessation programs and services. In one answer, you noted 
that the ``availability of cessation programs is important.'' I agree, 
as tobacco is the number one cause of preventable deaths in the United 
States and sees exceptionally high use in Ohio.

    The President's FY18 budget eliminates the CDC's Office on Smoking 
and Health, which plays an important role in tobacco use reduction 
through a variety of cessation campaigns and programs, as well as 
research initiatives to develop innovative ways to curb tobacco use in 
the country. The proposed block grant does not sufficiently replace a 
proven program.

    How do you justify the elimination of funding for a program with 
proven success against the number one cause of preventable death in the 
United States?

    Answer. The President's FY 2018 budget does not eliminate funding 
for tobacco control. Instead, it frees CDC and the States to address 
tobacco use within a holistic chronic disease prevention portfolio and 
funding structure.

    Question. Do you disagree that tobacco cessation programs should be 
available in every State through a Federal program with funding 
dedicated to assistance for those fighting tobacco addiction?

    Answer. Seven in 10 adult smokers want to quit, and quitting 
smoking is beneficial at any age. Efforts that combine media campaigns, 
quitlines, barrier-free tobacco cessation treatments, and environmental 
and policy approaches are most effective. This includes (1) high-impact 
tobacco education campaigns such as CDC's Tips From Former Smokers, 
which has helped an estimated half a million Americans quit for good; 
(2) State tobacco quitlines, which have broad reach and are effective 
with diverse populations; (3) counseling and FDA-approved cessation 
medications, which are effective for treating tobacco dependence, 
especially when used together; and (4) smoke-free indoor environments 
that reduce tobacco consumption and support quitting.

    The proposed block grant would allow every State to dedicate 
Federal funding to tobacco cessation efforts, which are important for 
preventing and reducing tobacco-related death and disease.
                       domestic tuberculosis (tb)
    Question. The proposed HHS Budget in Brief, the description for 
HIV/AIDS, Viral Hepatitis, STIs and TB Prevention funding only mentions 
suggested changes for HIV programs, but funds for domestic TB programs 
through the CDC is decreased by $11.986 million. TB is the number one 
infectious disease killer in the world, and increasing globalization 
threatens to continue the spread of new TB infections in the United 
States. There is still much work to be done into research for new 
treatments, especially for multi-drug-resistant TB, as well as better 
preventive measures including surveillance and other public health 
methods.

    TB is far from eradication, and funding that goes towards better 
treatments for existing infections and methods to prevent new 
infections is greatly needed. How do you justify cutting the CDC budget 
for domestic TB by 10 percent?

    Answer. The FY 2018 President's budget request describes that CDC 
will continue to focus efforts on maintaining TB control within the 
United States. CDC will also continue to support States to conduct TB 
surveillance and contact tracing, focusing on States with the highest 
prevalence of TB.

    Preliminary 2016 TB surveillance data indicate a 2.7 percent 
decline in reported cases and a 3.4 percent decline in case rate per 
100,000 from 2015. Although declines have occurred, progress has 
stalled, with TB rates remaining at levels 29 times higher than the 
Nation's goal of eliminating this disease in the foreseeable future.

    CDC has made advances in developing a new short-course therapy for 
latent TB infection (LTBI) which will provide opportunities to improve 
efficiency. Randomized controlled trials led by CDC have shown that a 
new combination regimen of isoniazid and rifapentine administered 
weekly for 12 weeks is as effective for preventing TB as other regimens 
and is more likely to be completed than the previous U.S. standard 
regimen of 9 months of INH daily. Preventing TB by treating LTBI is a 
cornerstone of the U.S. strategy for TB elimination, so this new 
regimen offers many advantages.

    Over the last 20 years, TB control efforts have prevented as many 
as 300,000 TB cases across the U.S., averting over $6 billion in 
costs.\12\ Eliminating TB will require both strengthening systems to 
diagnose and treat active TB disease and intensifying efforts to 
identify and treat latent TB infection (LTBI) among Americans infected 
with TB bacteria who are not yet sick. CDC estimates that up to 13 
million Americans have LTBI, which develops in some people exposed to 
an active case of TB disease; about 5-10 percent of them will develop 
TB disease later in life without treatment.
---------------------------------------------------------------------------
    \12\ Castro, K.G., Marks, S.M., Chen, M.P., Hill, A.N., Becerra, 
J.E., Miramontes, R., Winston, C.A., Navin, T.R., Pratt, R.H., Young, 
K.H., and LoBue, P.A., ``Estimating tuberculosis cases and their 
economic costs averted in the United States over the past two 
decades.'' International Journal of Tuberculosis and Lung Disease. 
2016; 20(7):926-933.
---------------------------------------------------------------------------
                              cdc staffing
    Question. In your response to my nominations hearing QFR question 
about domestic tuberculosis, you commented that you look forward to 
working with the CDC on combating this disease. I want to remind you of 
a letter my colleagues and I sent to you last week, highlighting the 
vacancies of nearly 700 positions at the CDC.

    The CDC is a vital agency for protecting the public health of all 
Americans, including through the prevention of the spread of TB. How do 
you envision the CDC can continue its programs to combat diverse public 
health issues by decreasing the budget by 17 percent and allowing the 
continuation of extensive vacancies?

    Answer. The FY 2018 budget request includes a number of 
programmatic reductions and eliminations, while maintaining key 
priorities that will allow CDC to advance its core public health 
mission.

    Question. Is it your plan to continue the hiring freeze and 
continue to stifle the important work of the CDC?

    Answer. HHS continues to follow guidance provided by the Office of 
Management and Budget (OMB) relating to its April Memorandum, 
Comprehensive Plan for Reforming the Federal Government and Reducing 
the Federal Civilian Workforce, to ensure efficient and effective 
delivery of services while continuing its critical health and safety 
responsibilities.
                            refugee programs
    Question. Several Ohio refugee resettlement agencies have had to 
close their doors or lay off staff as a result of the President's 
Executive order targeting refugees. The President has also proposed 
drastic cuts to HHS's refugee assistance programs in the FY18 budget.

    In what ways is HHS continuing to support resettlement 
organizations in light of the President's executive actions and 
proposed 30 percent budget cut to HHS Refugee Programs?

    Answer. HHS continues to support the resettlement of refugees 
through funding in significant program areas. We continue to issue 
grant funding to States and nonprofit agencies that provide health 
coverage, cash assistance, medical screenings, and employment services 
to refugees and other eligible populations. Through grants administered 
by participating States, we also provide specialized foster care for 
refugees and other populations of youth, as authorized by law. The 
proposed cuts to these benefits and services in the President's budget 
are partially a result of the decrease in projected arrivals.

    Additionally, we continue to provide funding to ethnic community-
based organizations, non-profit agencies, and resettlement agencies for 
additional specialized programs, such as services for survivors of 
torture.

    When changes in the program affect our partners, we communicate 
through Dear Colleague Letters, such as the letter announcing the 
change in the Cuban and Haitian social services set-aside program, and 
through in-person meetings and phone calls.

    Question. How will you ensure refugee resettlement remains a 
priority at the Department?

    Answer. HHS is increasing efforts to engage receiving communities, 
and we are working to improve the program. Successful resettlement 
requires positive collaboration between refugees and receiving 
communities in multiple environments, including workplaces, schools, 
neighborhoods, and places of worship. We work to facilitate and enhance 
this collaboration, particularly within the private sector. As part of 
this community outreach, the Director of the Office of Refugee 
Resettlement (ORR) visited several agencies that serve refugees in 
northern California in May, and has visited resettlement agencies in 
Charlottesville, VA, and Boston, MA, in July.

    The ORR Director and staff will continue to participate in meetings 
with government representatives and NGO participants, like the United 
Nations' Annual Tripartite Consultations on Resettlement, which the ORR 
Director attended in June.
                        prescription drug prices
    Question. President Trump has been outspoken both as a nominee and 
in his current role about the high costs of prescription drugs, yet 
there is no indication of this being a priority through the notable 
absence of funds to address the issue in the proposed FY18 budget. In 
your budget hearing, you stated that the President has charged your 
department with developing policy suggestions to combat this issue, and 
that you have begun holding roundtable discussions with certain 
stakeholders. You also mentioned that you would like to engage with 
others interested in lowering drug prices; I am interested in doing so, 
and have already worked with Senate colleagues to introduce multiple 
bills this year to combat this issue.

    Is there a reason that prescription drug costs did not make it into 
the President's FY18 proposed budget?

    Please share with me the stakeholders who you are including in your 
discussions to work on this issue, and a timeline of your plan to share 
your policy suggestions with the President and Members of Congress.

    Answer. High drug prices and costs are an issue of major concern 
for HHS and for the American people. This includes the millions of 
seniors who rely on Medicare for their drug coverage, and the taxpayers 
who have to foot the bill for government spending on this program. As 
you know, the President has made prescription drug prices an absolute 
priority and has charged the U.S. Department of Health and Human 
Services (HHS) with making recommendations to his office on reducing 
drug prices. HHS has been meeting with stakeholder groups from across 
the health-care spectrum over the past several months in order to 
understand where there are areas of consensus.

    It is important that we move forward quickly, but also carefully, 
so that our policies do not have unintended consequences. We need to 
balance the goal of ensuring affordability and access with the mandate 
to continue supporting development of lifesaving innovations.

                                 ______
                                 
 Questions Submitted by Hon. Robert P. Casey, Jr. and Hon. Rob Portman
                             complex rehab
    Question. Complex Rehab wheelchairs and accessories are used by a 
small population of people with high levels of disabilities such as 
ALS, cerebral palsy, multiple sclerosis, muscular dystrophy, spinal 
cord injury and traumatic brain injury. For this reason, Congress 
exempted Complex Rehab Technology from the competitive bidding program 
established in the Medicare Improvements for Patients and Providers Act 
(MIPPA) of 2008.

    Unfortunately, in 2014 CMS announced it intended to apply Medicare 
competitive bidding program pricing to Complex Rehab wheelchair 
accessories effective January 1, 2016. We expressed our concern to CMS 
at the time but the agency chose to move forward. Congress has delayed 
these reductions through legislation twice; however, the cuts are 
scheduled to take effect July 1, 2017.

    Mr. Secretary, we remain concerned with CMS's interpretation of the 
competitive bidding program which will reduce access to CRT accessories 
when provided on complex rehab wheelchairs for people with 
disabilities. We urge you to use your administrative authority to stop 
these cuts prior to June 30 and ask what plans you have to provide 
assistance in this area.

    Answer. CMS is committed to providing beneficiaries with access to 
the services and medical devices they need. On June 23, 2017, CMS 
issued a new policy on how adjustments to the fee schedule based on 
information from competitive bidding programs apply to wheelchair 
accessories and back and seat cushions used with group 3 complex 
rehabilitative power wheelchairs. As a result, retroactive to July 1, 
2017, payment for these items are based on the standard unadjusted fee 
schedule amounts through December 31, 2018. By continuing these higher 
payments, this new action will help to protect access to complex 
rehabilitative power wheelchair accessories on which people with 
significant disabilities depend.
                                 aging
    Question. Secretary Price, on February 24th, after having traveled 
across Pennsylvania, I sent you a letter regarding administration 
proposals that threaten the financial and health security of older 
Americans and their families, questions that you failed to answer 
during the confirmation process. On April 4th, I sent you a letter 
regarding the administration's efforts to undermine the Affordable Care 
Act through executive action. In that letter, I requested you provide a 
letter reportedly presented to House Republicans from President Trump 
outlining the ACA regulations the administration could repeal on its 
own. On May 8th, I sent you, Treasury Secretary Mnuchin, and OMB 
Director Mulvaney a letter regarding the administration's efforts to 
sabotage the ACA. That letter called on the administration to commit to 
making cost-sharing reduction payments and requested documents and 
communications. You have not responded to any of these letters.

    Do you commit to providing responses to each of these letters in 
writing as well as producing the documents requested in the letters?

    Answer. I have provided responses to all of the letters listed 
above.
                        cost-sharing reductions
    Question. Secretary Price, you and other members of this 
administration have repeatedly stated that the ACA marketplaces are 
failing, yet Pennsylvania's Insurance Commissioner Teresa Miller 
recently announced aggregate rates for the 2018 plan year, and these 
increases were in the single digits. Her statement also noted that if 
the administration eliminated cost-sharing reduction payments, premiums 
would increase by over 20 percent. She further noted that if 
Republicans repealed the individual mandate, premiums would increase by 
over 23 percent. If both of those changes happened, premiums would go 
up over 36 percent. On May 8th, I, along with Ranking Member Wyden and 
11 other Senators, sent you a letter calling on the administration to 
halt its efforts to undermine the Affordable Care Act and permanently 
commit to continuing to make cost-sharing reduction payments. The 
administration has failed to do so. It's clear that Pennsylvania's 
market would be on path to stability if the administration and 
Republicans would just stop their sabotage of the ACA. Health insurers, 
medical providers, and business leaders have all said that continuing 
cost-sharing reduction payments is key to the success of the health 
insurance marketplaces and is the ``most critical action'' the 
administration could take regarding the ACA.

    Will you commit today to permanently funding cost-sharing 
reductions payments?

    Answer. The administration has emphasized the importance of 
reforming our health-care system to one that works better for patients 
and their providers. Our budget calls for Congress to repeal and 
replace the Affordable Care Act. In the interim, we are evaluating 
policy options to relieve American's from Obamacare's burdensome 
mandates and to restore choice and competition to the individual and 
small group markets, increasing availability of health insurance 
options so that all Americans can purchase coverage that meets their 
needs.

                                 ______
                                 
              Questions Submitted by Hon. Claire McCaskill
    Question. On February 17, 2017, I sent a letter to Acting 
Commissioner Stephen Ostroff asking a number of question regarding the 
Food and Drug Administration's role in overseeing the dietary 
supplement industry. To date I have not received a reply. Please 
provide the date on which I will receive a complete response, including 
all documents and other requested materials.

    Answer. HHS, and all of our component agencies, are committed to 
providing meaningful responses to correspondence from Members of 
Congress. FDA is working to provide you with a complete response and 
they will keep you updated on their progress.

    Question. The administration's budget cuts funding for rural health 
outreach funding. In Missouri, this funding has been used to expand 
access to services. Will these cuts result in reduced access to care, 
if enacted? If not, what steps will the administration take to preserve 
the expanded access to services?

    Answer. The FY 2018 President's budget provides $51 million to 
target funding for the Rural Health Network and Quality Improvement 
Grants Outreach. These investments will support the existing awards and 
fund new awards to improve access to quality healthcare services in 
rural and underserved areas.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    This administration, from day one, has preferred ``alternative 
facts'' and convenient spin to the truth. One of the most recent 
examples was its budget proposal, which double-counted $2 trillion to 
maintain some whiff of fiscal responsibility while it slashed health 
programs and protections for basic living standards.

    The budget math is fake, but the extreme agenda that would deprive 
millions of Americans of access to health care and wipe out living 
standards is not.

    Unfortunately, this morning I have to split time between the 
Finance Committee and the Intelligence Committee, so I'll keep my 
remarks brief. But there are a few issues in the President's budget and 
the administration's agenda I'd like to address.

    First is Medicaid. Secretary Price is the captain of the 
President's health-care team. He's been the top advocate for Trumpcare, 
a bill that cuts Medicaid by $834 billion to pay for massive tax breaks 
for the wealthy.

    Fourteen million Americans would lose coverage, and millions more 
would see caps on their care. As if that wasn't enough of a cut, the 
budget proposal that came out a few weeks ago goes even further, 
slashing hundreds of billions more from Medicaid. In a program that 
covers nearly half of all births, 37 million kids, millions of working 
families and people with disabilities and two out of three nursing home 
beds in America, that would be an enormous blow to people across the 
generations.

    These facts and figures have been met by a wave of the hand from 
Secretary Price. When asked if his proposed cuts would result in 
millions of Americans losing access to Medicaid, he responded, 
``Absolutely not.'' He went further, claiming ``there are no cuts to 
the Medicaid program,'' and he also said, ``nobody will be worse off 
financially.'' I've heard Secretary Price and others make the baffling 
argument that people are actually worse off on Medicaid--that their 
health doesn't improve as a result of gaining coverage. Often this 
argument is based on a brief, old study performed in my home State.

    Here's the bottom line on Medicaid. Seventy-four million Americans 
rely on this program for health coverage--parents with sick kids, 
people with disabilities, seniors in nursing homes who have nobody to 
turn to for help if their benefits disappear, and thousands of 
Oregonians who are healthier under my home State's model. It would be a 
tough sell to convince those people that they're worse off being 
enrolled in Medicaid, or that the program needs more than a trillion 
dollars in cuts.

    And public opinion is clear: two out of three enrollees are happy 
with the program. Seven out of 10 Americans say Congress should leave 
it as is--no block grants, no per-capita caps.

    Fortunately, the budget proposal hit the wall here in Congress and 
there's a lot of debate left to be had on Trumpcare. But right now, the 
administration is causing turmoil in insurance markets, and it's 
already having disastrous effects for millions of families. The 
President issued a day-one Executive order undermining the Affordable 
Care Act. And nobody on the Trump team can give a straight answer about 
whether the administration will continue making cost-sharing reduction 
payments that are key to making insurance affordable for working 
families. And because of that sabotage, insurers are pulling out of 
markets, and people are left without plans to choose from.

    You don't have to take my word for it. The insurers are quite clear 
about why they're making these decisions.

    Furthermore, on the campaign trail, the President said he wouldn't 
cut Medicare. But the Trumpcare bill shrinks the life of the program, 
and the budget proposal extends the mandatory cuts under the sequester 
by more than $30 billion. The Food and Drug Administration, the Centers 
for Disease Control and the National Institutes of Health--all slashed 
in the budget. The same is true in programs aimed at basic living 
standards--programs that fund Meals on Wheels, child care, and foster 
care.

    This is the budget you write if you think seniors and working 
families have it too easy.

    I want to thank Secretary Price for joining the committee today. 
This is never any easy appointment for a Cabinet Secretary, and I'm 
sure there will be some rigorous debate this morning. As I mentioned, 
I'm double-booked with the Intelligence Committee, so I want to thank 
Senator Stabenow for generously offering her time to fill in for me 
today. Thank you, Chairman Hatch.

                                 ______
                                 

                             Communications

                              ----------                              


              American Academy of Family Physicians (AAFP)

                            AAFP Headquarters

                      11400 Tomahawk Creek Parkway

                         Leawood, KS 66211-2680

                      800-274-2237  913-906-6000

                              [email protected]

                         AAFP Washington Office

                1133 Connecticut Avenue, NW, Suite 1100

                       Washington, DC 20036-1011

                    202-232-9033  Fax: 202-232-9044

                            [email protected]

On behalf of the American Academy of Family Physicians (AAFP), which 
represents 129,000 family physicians and medical students across the 
country, thank you for the opportunity to submit a statement for the 
record to the Committee on Finance regarding the Trump Administration's 
Fiscal Year 2018 Budget Request.

On the whole, the AAFP is deeply troubled by the Administration's FY 
2018 budget, and its implications for patient health, safety, and 
access to care. The AAFP believes that if implemented, the spending 
reductions and policy changes requested in the budget would create a 
domino effect of damage that ultimately will harm the health of America 
on both an individual and community-wide basis. Below, the AAFP sets 
forth its principal concerns with the budget, as well as qualified 
support for selected policies.

    1.  The Committee Should Reject the Administration's Position on 
Repeal and Replace of the Affordable Care Act

The AAFP supports health care coverage for all, consistent with the 
public-health mission of the specialty of family medicine. The AAFP 
promotes this in the form of ``a primary care benefit design featuring 
the patient-centered medical home, and a payment system to support 
it,'' for everyone in the United States.\1\ AAFP believes that all 
Americans should have access to primary-care services without patient 
cost sharing. This primary care benefit is especially important today 
in high-deductible health plans. The AAFP believes that universal 
health care also should include services outside the medical home 
(e.g., hospitalizations) with reasonable and appropriate cost sharing 
allowed, but with protections from financial hardship. Supporting 
access to primary care is also consistent with the ``triple aim'' of 
improving patient experience, improving population health, and lowering 
the total cost of health care in the United States. Research supports 
the AAFP's view that having both health insurance and a usual source of 
care (e.g., through an ongoing relationship with a family physician) 
contributes to better health outcomes, reduced disparities along 
socioeconomic lines, and reduced costs.\2\
---------------------------------------------------------------------------
    \1\ AAFP, ``Health Care for All'' (2014), available at http://
www.aafp.org/about/policies/all/health-care-for-all.html.
    \2\ See, e.g., The Robert Graham Center, ``The Importance of Having 
Health Insurance and a Usual Source of Care,'' Am. Fam. Physician 
(September 15, 2004), available at http://www.aafp.org/afp/2004/0915/
p1035.html.

The AAFP applauded the passage of the Affordable Care Act (ACA) in 2010 
as an incomplete yet important step toward the goal of universal 
coverage. While the AAFP does not oppose repeal and replacement of the 
Affordable Care Act per se, the AAFP has clearly articulated to 
Congressional leaders its grave concerns with any approach to replacing 
the ACA that would increase the number of uninsured, degrade the 
health-care safety net, or eliminate important patient protections in 
the health-insurance marketplace. After the Congressional Budget Office 
(CBO) issued its report dated March 13, 2017, projecting that H.R. 1628 
(the American Health Care Act or AHCA) would ``increase the number of 
uninsured people relative to the number under current law . . . to 24 
million in 2026,'' the AAFP expressed to House leaders its formal 
opposition to that bill--based in large part on this projection about 
insurance coverage. The AAFP subsequently expressed ``deep 
disappointment'' when the House passed the current version of the AHCA 
on May 3rd (a later CBO report dated May 24, 2017 projected that under 
the modified version of the AHCA, the number of uninsured would 
increase to 23 million, 9 million of whom would have been insured 
---------------------------------------------------------------------------
through employer-based or private non-group coverage).

Although the Administration has never precisely articulated its vision 
for repealing and replacing the ACA, it states in this FY 2018 budget 
that it ``continues to support a repeal and replace approach'' to the 
Affordable Care Act (see Budget in Brief at 2) that broadly tracks the 
AHCA framework of tax credits, expanded health savings accounts, high-
risk pools, and changes to Medicaid financing. The Administration 
proposal ``eliminates Obamacare's onerous taxes and mandates, provides 
funding for states to stabilize markets and ensure a smooth transition 
away from Obamacare, and helps Americans purchase the coverage they 
want through the use of tax credits and expanded Health Savings 
Accounts,'' all of which matches the AHCA. (Id.) The Administration has 
also indicated (through a Statement of Administration Policy dated 
March 22, as well as a public event held in the White House Rose Garden 
on May 3rd) that it ``strongly supports'' the AHCA--both the version 
approved by the House Budget Committee and the version that the House 
passed on May 3rd.

Although the Administration has not made its own projection about 
coverage losses under its repeal-and-replace proposal, it is clear that 
the Administration's proposal is equivalent to the AHCA, and thus gives 
rise to the same concerns about loss of insurance coverage. The AAFP 
urges this Committee to reject the Trump Administration's vision for 
repeal and replace, and instead adopt reforms that extend affordable 
insurance to more Americans, strengthen the health-care safety net, and 
lower the overall cost of health care by investing in a stronger 
primary-care foundation.

    2.  The Committee Should Reject the Administration's Proposals to 
Cap Medicaid Financing

The AAFP and its members are committed to ensuring that all 
individuals, regardless of their socio-economic status, have access to 
health care coverage. This commitment is focused on individuals and 
families who do not have access to employer-based health insurance and/
or are economically unable to secure health care coverage through the 
individual market. Our commitment to low-income individuals and 
families is reflected in family physicians' participation in the 
Medicaid program. More than two-thirds (68%) of AAFP's members accept 
new Medicaid patients into their practices. Participation in Medicaid 
by family physicians is at its highest level since the AAFP began 
monitoring the issue in 2004.

The Administration's budget proposal ``reforms Medicaid funding to 
States starting in FY 2020 through either a per capita cap or a block 
grant'' (see Budget in Brief at 3). The Administration projects that 
these changes will reduce federal Medicaid spending by $610 billion 
over 10 years. Amazingly, the budget also contemplates ``additional 
savings to Medicaid as a result of the Administration's plan to repeal 
and replace Obamacare with solutions that focus Medicaid on the most 
vulnerable Americans--the elderly people, with disabilities, children, 
and pregnant women--those Medicaid was intended to serve'' (see Budget 
in Brief at 61). Office of Management and Budget (OMB) Director Mick 
Mulvaney confirmed \3\ that the Medicaid reductions in the budget 
proposal are to be added to those found in the AHCA ($834 billion per 
the CBO report dated May 24, 2017), yielding a potential total of more 
than $1.4 trillion in federal funds removed from Medicaid over 10 
years. This strongly suggests that the CBO's estimate that 14 million 
Medicaid beneficiaries would lose their health coverage by 2026 is a 
floor, not a ceiling. President Trump's proposal would likely 
significantly reduce support to states, causing even more low-income 
Americans to lose Medicaid coverage--an unacceptable result to 
America's family physicians.
---------------------------------------------------------------------------
    \3\ See White House, off-camera briefing of the FY18 budget by 
Office of Management and Budget Director Mick Mulvaney (May 22, 2017): 
``We assume the Affordable Health Care Act that passed out of the House 
passes. That has some Medicaid changes into it. We wrap that into our 
budget proposals. We go another half a step further and ratchet down 
some of the growth rates that are assumed in the AHCA. So if you assume 
growth rates--I can't remember what the exact measure is--it's a CPI-
plus measure. We take a measure that we think is closer to what the 
actual growth rates look like.''

The AAFP has consistently stated opposition to the means by which the 
Administration achieves its budgetary goals in Medicaid (by shifting 
costs onto states, localities, providers, and patients). Rather, the 
AAFP supports maintaining the current financing structure of Medicaid: 
the federal medical assistance percentage (FMAP) system. Capping 
federal financial participation in Medicaid by definition shifts risk 
of medical loss to states, localities, and ultimately to patients 
themselves. Eventually, under the fixed federal contributions with the 
growth rate set forth in the AHCA, states will be unable to fill 
funding shortfalls, and will be forced to reduce payments to providers 
and managed-care organizations (MCOs). Many more providers will drop 
out of Medicaid, and many MCOs will shrink their provider networks, 
providing still fewer choices for Medicaid patients, and rendering 
states unable to fulfill the equal-access mandate of the Medicaid 
program. As federal contributions cover less and less of the total cost 
of care over time, some state Medicaid programs may ultimately create 
waiting lists for patients, and other forms of rationing for non-
emergent services. And of course, for the 14 million or more who will 
lose coverage altogether, they will have no access to care at all save 
for charity and uncompensated care. The AAFP strenuously opposes such a 
fundamental undermining of the Medicaid entitlement and the damage that 
---------------------------------------------------------------------------
it would do to Americans' public health.

    3.  Congress Should Provide Long-Term Support for the Teaching 
Health Center Graduate Medical Education Program

The budget proposal ``maintains funding for the Teaching Health Center 
Graduate Medical Education Program and requests $60 million in new 
mandatory funding in both FY 2018 and FY 2019'' (see Budget in Brief at 
22). The AAFP commends the Administration for its recognition of the 
importance of the THCGME program, which will expire on September 30, 
2017, absent Congressional intervention.

The THCGME currently provides training for 742 medical and dental 
residents. Residents in the THCGME program train exclusively in 
primary-care medical specialties and dentistry--two thirds of whom are 
training in family medicine and pediatrics.\4\ Residents in the program 
train in community health centers (including federally qualified health 
centers), and tend to be concentrated in rural and other underserved 
areas that need access to more providers, particularly primary-care 
physicians.
---------------------------------------------------------------------------
    \4\ Health Resources and Services Administration, ``Teaching Health 
Center Graduate Medical Education Program, Academic Year 2014-2015,'' 
available at https://bhw.hrsa.gov/sites/default/files/bhw/nchwa/
teaching-health-center-graduate-highlights.pdf.

THCGME, which funded its first class of residents in 2011, is already 
achieving Congress's intent to get more doctors practicing in rural and 
underserved areas. The most effective way to get family and other 
primary-care physicians into rural and underserved areas is to train 
them in these underserved areas. American Medical Association Physician 
Masterfile data confirms that a majority of family medicine residents 
practice within 100 miles of their residency training location.\5\ By 
comparison, fewer than 5 percent of physicians who complete training in 
hospital-based GME programs provide direct patient care in rural 
areas.\6\
---------------------------------------------------------------------------
    \5\ E. Blake Fagan, M.D., et al., ``Family Medicine Graduate 
Proximity to Their Site of Training,'' Family Medicine, Vol. 47, No. 2, 
at 126 (February 2015).
    \6\ Candice Chen, M.D., MPH, et al., ``Toward Graduate Medical 
Education (GME) Accountability: Measuring the Outcomes of GME 
Institutions,'' Academic Medicine, Vol. 88, No. 9, p. 1269 (September 
2013).

The AAFP stresses to Congress that the Administration's proposal to 
fund the program at $60 million per year is not enough to continue 
financing the program at its current size. The Health Resources and 
Services Administration (HRSA) has completed a study documenting that 
``the median overall cost of training a resident in a THC in FY 2017 is 
estimated to be $157,602.'' \7\ Therefore, the annual cost to maintain 
the current size of the THCGME program is at least $117 million per 
year. The AAFP views this as the bare minimum that the program should 
receive in order to prevent reductions in existing levels of primary-
care training. However, given that Congress devotes some $15 billion 
per year to training residents, Congress could fund the THCGME program 
at $150 million per year and still account for only one percent of the 
overall spending on GME. The AAFP urges Congress in the strongest 
possible terms to dramatically expand and make permanent this highly 
successful and bipartisan GME program.
---------------------------------------------------------------------------
    \7\ Health Resources and Services Administration, ``Cost Estimates 
for Training Residents in a Teaching Health Center,'' available at 
https://bhw.hrsa.gov/sites/default/files/bhw/grants/thc-costing-fact-
sheet.pdf.

    4.  The Committee Should Swiftly Approve a ``Clean'' Long-Term 
---------------------------------------------------------------------------
Extension of CHIP Funding

    The AAFP urges the Committee to swiftly approve a bipartisan long-
term extension of CHIP, in order to promote stability and health 
security for 8.9 million low-income children \8\ and their families. 
Time is of the essence in completing this work in order to ensure 
continuous access to primary and preventive services for this 
vulnerable population, protect progress in public health and allow 
States to adequately plan. Although the Administration's budget 
``proposes to extend funding for CHIP for two additional years through 
FY 2019'' (see Budget in Brief at 66), the AAFP believes that Secretary 
Price articulated a better position during his January 24th 
confirmation hearing in this Committee when he suggested that an 8-year 
extension would be preferable.\9\
---------------------------------------------------------------------------
    \8\ Centers for Medicare and Medicaid Services, 2016 Enrollment 
Report, available at https://www.medicaid.gov/chip/downloads/fy-2016-
childrens-enrollment-report.pdf.
    \9\ During his testimony, then-Representative Price stated about 
CHIP (in response to Senator Brown): ``Well, if we could extend it for 
8 [years] it would probably be better than 5 [years].''

The AAFP has supported CHIP since its inception in 1997, and during 
each subsequent reauthorization and extension of funding (2007, 2009, 
and 2015), as a way to extend health coverage to uninsured children 
whose families do not meet eligibility requirements for Medicaid. Since 
the enactment of the Medicare Access and CHIP Reauthorization Act of 
2015 (MACRA), the AAFP has reiterated support for CHIP funding beyond 
the current end-date of September 30, 2017--through letters to this 
Committee and to Congressional Leadership. Although the AAFP does not 
collect member survey data on CHIP participation, we know (due to the 
close connection between Medicaid and CHIP--including the fact that 
some states operate combined Medicaid/CHIP programs--and the fact that 
family physicians perform so many pediatric services) that family 
physicians are helping to carry out Congress's intent behind CHIP: 
treating low-income children, many of whom would be uninsured without 
---------------------------------------------------------------------------
the program.

Family physicians play an important role in addressing the health needs 
of American children. According to the AAFP's latest member census, 
published December 31, 2016, over 80 percent of AAFP members care for 
adolescents, and 73 percent care for infants and children.\10\ Other 
AAFP member survey data reflect that about 20 percent of AAFP's members 
deliver babies as part of their practice, with roughly 6 percent 
delivering more than 30 babies in a recent calendar year.\11\ Of AAFP 
active members with full hospital privileges, 70 percent provide 
newborn care in the hospital, and 64 percent provide pediatric care in 
the hospital.\12\ This is consistent with family medicine's traditional 
role of practicing in the entire scope of the physician license, in 
order to meet the needs of the community in which the family physician 
practices. A family physician who serves a small rural community 
without a pediatrician, for example, will often perform most or all 
pediatric care for that community.
---------------------------------------------------------------------------
    \10\ AAFP Member Census (December 31, 2016), available at http://
www.aafp.org/about/the-aafp/family-medicine-facts/table-13.html.
    \11\ AAFP, 2015 Practice Profile Survey (July 15, 2016).
    \12\ Id.

The AAFP urges the Committee to pass a ``clean'' extension of CHIP with 
a minimum of unnecessary policy changes. Accordingly, the Committee 
should extend the current enhanced federal medical assistance 
percentage (FMAP), as well as the current maintenance of effort (MOE) 
provisions, which are both in effect through September 30, 2019, in 
order to align with an extension of CHIP funding. For example, if 
Congress extends CHIP funding for 8 years, then it should extend the 
enhanced FMAP and MOE provisions for 6 years. The Administration 
proposal does quite the opposite--it ``ends the 23 percentage point 
increase in the enhanced Federal match rate and the current law 
maintenance of effort requirement after FY 2017'' (see Budget in Brief 
at 66), which would terminate these important policies this year--two 
years earlier than Congress had envisioned. The AAFP opposes scaling 
back what our current bipartisan commitments to the nation's most 
---------------------------------------------------------------------------
vulnerable children.

    5.  The AAFP Welcomes Efforts to Expand Direct Primary Care in 
Medicaid

The Administration proposes to ``expand Medicaid Direct Primary Care 
(DPC), which provides an enhanced focus on direct physician patient 
relationships through enrolling Medicaid patients in DPC practices. 
These practices enhance physicians' focus on patient care by 
simplifying health care payments for patients and physicians'' (see 
Budget in Brief at 62). The AAFP supports the physician and patient 
choice to, respectively, provide and receive health care in any ethical 
health care delivery system model, including the DPC practice setting.

Payments in all primary-care models should be appropriate to ensure an 
adequate supply of participating family and other primary-care 
physicians. Just as the fee-for-service payments in Medicaid should be 
at least at Medicare levels, periodic payments in Medicaid DPC should 
be comparable to payment levels from other third-party payers such as 
employers and Medicare Advantage plans, in order to allow family 
physicians to appropriately serve this patient population in this 
unique model.

    6.  The Committee Should Work to Ensure That CMS is Adequately 
Funded in Order to Implement the Many Programs Under the Committee's 
Jurisdiction

The Administration proposes to reduce CMS program management by $379 
million in FY 2018--a 13-percent reduction in the agency's FY 2017 
budget (see Budget in Brief at 71). Given that CMS is responsible for 
the administration of Medicare, Medicaid, CHIP, and the Affordable Care 
Act federal marketplaces, as well as over one trillion dollars in 
corresponding annual payments, the AAFP advises the Committee to work 
with the Appropriators to resist such a large and unwarranted reduction 
to the CMS operating budget in FY 2018. The vast majority of AAFP 
members participate in one or more of Medicare, Medicaid, and CHIP, and 
the millions of newly insured under the ACA have looked to America's 
family physicians for primary care--many for the first time in their 
lives. Accordingly, ensuring the smooth functioning of CMS is critical 
to the ability of so many Americans--the elderly, the low-income, those 
insured in the marketplaces, and others--to receive high-quality 
primary care.

Moreover, the AAFP continues to invest significant resources preparing 
its members for the Medicare Quality Payment Program (OPP), established 
in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and 
launched on January 1, 2017. AAFP members are now reorienting their 
practices to prepare to report quality and other measures to CMS 
through the Merit-Based Incentive Payment System (MIPS) or one of the 
advanced alternative payment models (A-APMs) such as the Comprehensive 
Primary Care Plus (CPC+) model, rolled out earlier this year by the 
Centers for Medicare and Medicaid Innovation (CMMI). The AAFP has also 
submitted an original primary-care advanced payment model proposal to 
the Physician-Focused Payment Model Technical Advisory Committee 
(PTAC)--an expert panel established in MACRA to help review and approve 
new models for use under the OPP. These efforts to make the OPP a 
success will be compromised unless CMS receives adequate funding to 
implement them. The FY 2017 funding level of $2.82 billion already 
represents less than one-half of one percent of the $1 trillion in 
program payments flowing through the agency this year; the AAFP fails 
to apprehend the rationale for such a steep cut to program management 
in FY 2018 when it accounts for such a tiny fraction of the agency's 
overall budget.

The AAFP commends the administration for its statement that it wants to 
``work to reduce provider burden [under the OPP] while providing 
incentives for providing high quality care'' (see Budget in Brief at 
53). However, in the AAFP's experience, depriving CMS of resources to 
implement the QPP and other programs is not conducive to implementing 
bold initiatives like regulatory reform. Accordingly the AAFP urges 
Congress to reject a draconian cut to CMS program management.

    7.  Title X Funding

The Administration's FY 2018 Budget Request ``provides $286 million-the 
same level as the FY 2017 Continuing Resolution-to support low-income 
individuals with comprehensive family planning and related preventive 
health services through the Title X Family Planning Program'' (see 
Budget in Brief at 24). The AAFP agrees that this important program 
should, at a minimum, receive $286 million for the upcoming fiscal 
year, in order to continue supporting existing Title X clinics, which 
offer preventive services such as: screening for sexually transmissible 
infections, cancer screenings, HIV testing, and contraceptive care.

                                 ______
                                 
               National Family Planning and Reproductive 
                      Health Association (NFPRHA)

                   1025 Vermont Avenue, NW, Suite 800

                          Washington, DC 20005

             Testimony of Clare Coleman, President and CEO

My name is Clare Coleman; I am the President and CEO of the National 
Family Planning and Reproductive Health Association (NFPRHA), a 
national membership association representing providers and 
administrators committed to helping people get the family planning 
education and care they need to make the best choices for themselves 
and their loved ones. Many of NFPRHA's members receive federal funding 
from Medicaid and through Title X of the federal Public Health Service 
Act, the only federally funded, dedicated family planning program for 
low-income and uninsured people. These cornerstones of the nation's 
public health safety net are essential resources for those providing 
access to high-quality services in communities across the country. As a 
result, NFPRHA respectfully disagrees with the administration's 
priorities laid out in its fiscal year (FY) 2018 budget.

Publicly funded family planning services are provided through state, 
county, and local health departments as well as hospitals, family 
planning councils, Planned Parenthoods, federally qualified health 
centers, and other private nonprofit organizations. For decades, these 
diverse provider networks have helped ensure that millions of poor and 
low-income individuals as well as those who are underinsured or 
uninsured receive access to high-quality family planning and other 
preventive health services in all 50 states, the District of Columbia, 
and U.S. territories.

Oppose Cuts to Medicaid

The President's proposal advances congressional proposals that, if 
enacted, would cut more than $627 billion from Medicaid, alter the 
structure and financing of the program, and dismantle the provider 
network, deepening a crisis in public health. NFPRHA opposes the end to 
or rollback of Medicaid expansion, either of which would reduce the 
number of people with access to Medicaid, thereby leading to fewer 
people getting health care, even-greater increases in rates of sexually 
transmitted diseases, and a reversal of the reduction in rates of 
unintended pregnancy.

Furthermore, these proposed changes to the structure and financing of 
Medicaid will compound the demands being place on the publicly funded 
family planning safety net. NFPRHA opposes both per capita caps and 
block grants. Both proposals would inevitably shift costs to states, 
forcing them to make choices about program eligibility, benefits, and 
provider payments in order to adapt to new funding constraints. 
Medicaid beneficiaries would also likely face new barriers to coverage, 
such as premiums and other cost-sharing requirements.

Increase Support for Title X

An analysis published in the American Journal of Public Health last 
year found that, in order for publicly funded providers to meet the 
needs of all low-income, uninsured women of reproductive age for family 
planning services, the Title X program would need to be supported with 
approximately $737 million annually. This estimate is based on the 
presumption that the Medicaid expansion resulting from the Affordable 
Care Act remains unchanged. The president's budget requests only level 
funding ($286.5 million), a fraction of what is needed to serve low-
income, uninsured women across the country. It is also important to 
note that the Title X program also supports men, so the resource needs 
identified in the analysis are extremely conservative. Since FY 2010, 
Title X has dropped from $317.5 million annually to $286.5 million 
annually, leading to a loss of approximately 1.2 million patients from 
the network.

The ongoing threat of the Zika virus has only increased demand on Title 
X providers. The CDC confirmed causal linkage between babies born with 
microcephaly and pregnant women infected with the Zika virus reinforced 
the simple concept that in a time of public health emergency, women 
will turn to Title X-funded providers for thorough counseling, risk 
assessment, and access to family planning services. As summer returns 
throughout the United States, public health experts expect the Zika 
virus to continue to spread domestically and demand for education and 
services to rise again.

Oppose Cuts to Other Safety Net Programs

NFPRHA is further troubled by proposals to eliminate several maternal-
child health programs, the Social Services Block Grant, and the Teen 
Pregnancy Prevention Program. Each of these programs is a vital part of 
the federal government's role in fostering healthy women, children, and 
families. NFPRHA also opposes the harmful reductions to the National 
Center for HIV/AIDS, Viral Hepatitis, STIs, and TB Prevention; 
Temporary Assistance for Needy Families; Special Supplemental Nutrition 
Program for Women, Infants, and Children; Ryan White HIVIAIDS program; 
and rural health programs. Budgets for each of these programs are 
already stretched thin, and these further reductions will harm the 
patients our providers serve.

Oppose Harmful Budget Riders

NFPRHA is deeply concerned by the harms to the Title X network and 
other health care programs that would be caused by the budget rider 
that seeks to prohibit any funding in the Labor-HHS appropriations bill 
from going to essential community providers that provide abortions or 
contract with abortion providers and that received more than $23 
million in Title X funding in FY 2016. The implicit intention of this 
proposed rider is to exclude Planned Parenthood affiliates, which are 
key networks within the publicly funded family planning safety net. A 
recent analysis by the Guttmacher Institute found that Planned 
Parenthood serves 32% of all safety-net contraceptive clients despite 
having just 6% of the nation's safety-net family planning providers. 
Our members, from federally qualified health centers to local public 
health departments to universities and school-based programs to private 
non-profits, rely on Planned Parenthood to offer patients high quality 
services and share the patient load in communities with high levels of 
need for publicly funded family planning.

Conclusion

Millions of low-income women and men depend on the safety-net programs 
for affordable access to the family planning and preventive health 
services that help them stay healthy. However, this budget would 
jeopardize the capacity of our nation's public health infrastructure to 
help these vulnerable individuals and families as well as the broader 
social services and health care safety net. NFPRHA urges the Committee 
to reject the President's budget proposal.

                                 ______
                                 
                          Oral Health America

                   180 N. Michigan Avenue, Suite 1150

                           Chicago, IL, 60601

                       www.oralhealthamerica.org

                          phone (312) 836-9900

                           fax (312) 836-9986

June 19, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chair                               Ranking Member
U.S. Senate                         U.S. Senate
 Committee on Finance               Committee on Finance
219 Dirksen Senate Office Building  219 Dirksen Senate Building
Washington, DC 20510                Washington, DC 20510

Re: CHIP Reauthorization is Essential to Children's Oral Health and 
Well-being

Dear Chairman Hatch and Ranking Member Wyden:

On behalf of Oral Health America (OHA), a leading nationwide 
organization dedicated to changing the lives by connecting communities 
with resources to increase access to care, education, and advocacy for 
all, especially those most vulnerable; I write to submit a statement 
for the record following the Senate Committee on Finance's June 8, 2017 
hearing on ``The President's Fiscal Year 2018 Budget.'' OHA requests 
the importance of extending funding for the Children's Health Insurance 
Program (CHIP) be taken into strong consideration by the Committee as 
the September 30 deadline approaches. Specifically, OHA urges Congress 
to support a five-year extension through to fiscal year 2022 as has 
been widely-recommended. OHA is deeply concerned the president's FY 
2018 budget cuts CHIP by an estimated $6 billion, or a 20% cut, despite 
the program being extended through to 2019.

Since 1997, CHIP has helped children whose families have incomes too 
high to qualify for Medicaid, but too low to afford private health 
insurance. CHIP has reduced the number of uninsured children by more 
than 50% while improving health outcomes and access to care for 
children and pregnant women across the nation. Of direct interest to 
the oral health community is the fact CHIP is the only insurance that 
guarantees eight million children a dental health benefit that includes 
coverage for screenings and exams, cleanings, fluoride, and sealants. 
Untreated tooth decay can cause pain that may lead to difficulty 
eating, sleeping, and concentrating in school, leading to poor school 
attendance, and academic performance. Without CHIP, these children 
would lose much needed medical and dental coverage. According to the 
Medicaid and CHIP Payment and Access Commission (MACPAC), without CHIP 
some families would be susceptible to additional premiums and cost 
sharing to access dental services in marketplace plans and/or employer-
sponsored insurance. This is particularly concerning for low-income 
families and children. Furthermore, CHIP contributes to overall cost-
savings to the system by decreasing the number of emergency room visits 
that are 10-times more expensive than routine, preventative care.\1\
---------------------------------------------------------------------------
    \1\ Health Policy Institute American Dental Association, Thomas 
Wall, Marko Vujicic, ``Emergency Department Use for Dental Conditions 
Continues to Increase,'' April 2015.

Historically, CHIP has had bipartisan support. It gives states 
flexibility in designing their programs, allowing them to implement the 
program by expanding Medicaid, creating a separate program, or a 
combination of both approaches.\2\ With that flexibility, states can 
design a program that works best for their state and its children. 
Simply stated, CHIP provides states needed ``certainty'' in planning 
their budgets. MACPAC estimates all states would exhaust federal CHIP 
funding at some point in FY18, with four states and the District of 
Columbia running out of federal funds as early as December 2017.\3\ 
Therefore, time is of the essence. OHA urges Congress to act soon with 
a five-year CHIP funding extension.
---------------------------------------------------------------------------
    \2\ https://www.hhs.gov/about/budget/fy2017/budget-in-brief/cms/
chip/Index.html.
    \3\ https://www.macpac.gov/topics/chip/.

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Respectfully submitted,

Beth Truett
CEO and President

                                  [all]