[Senate Hearing 115-572]
[From the U.S. Government Publishing Office]
S. Hrg. 115-572
PRESIDENT'S FISCAL YEAR 2019
HEALTH CARE PROPOSALS
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HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 15, 2018
__________
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__________
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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 SHELDON WHITEHOUSE, Rhode Island
A. Jay Khosla, Staff Director
Joshua Sheinkman, Democratic Staff Director
(ii)
C O N T E N T S
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OPENING STATEMENTS
Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman,
Committee on Finance........................................... 1
Wyden, Hon. Ron, a U.S. Senator from Oregon...................... 4
ADMINISTRATION WITNESS
Azar, Hon. Alex M., II, Secretary, Department of Health and Human
Services, Washington, DC....................................... 8
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Azar, Hon. Alex M., II:
Testimony.................................................... 8
Prepared statement........................................... 47
Responses to questions from committee members................ 51
Hatch, Hon. Orrin G.:
Opening statement............................................ 1
Prepared statement........................................... 97
Wyden, Hon. Ron:
Opening statement............................................ 4
Prepared statement with attachments.......................... 99
Communication
Center for Fiscal Equity......................................... 109
(iii)
PRESIDENT'S FISCAL YEAR 2019
HEALTH CARE PROPOSALS
----------
THURSDAY, FEBRUARY 15, 2018
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 9:05 a.m.,
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G.
Hatch (chairman of the committee) presiding.
Present: Senators Grassley, Crapo, Thune, Isakson, Portman,
Toomey, Heller, Scott, Cassidy, Wyden, Stabenow, Cantwell,
Nelson, Menendez, Carper, Cardin, Brown, Casey, McCaskill, and
Whitehouse.
Also present: Republican staff: Jay Khosla, Staff Director;
Chris Armstrong, Chief Oversight Counsel; Brett Baker, Health
Policy Advisor; Ryan Martin, Senior Human Services Advisor;
Stuart Portman, Health Policy Advisor; and Caitlin Soto,
Oversight Counsel. Democratic staff: Joshua Sheinkman, Staff
Director; Laura Berntsen, Senior Advisor for Health and Human
Services; Anne Dwyer, Health-care Counsel; Michael Evans,
General Counsel; Elizabeth Jurinka, Chief Health Advisor; Matt
Kazan, Health Policy Advisor; and Arielle Woronoff, Senior
Health Counsel.
OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM
UTAH, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. The committee will come to order.
Before I begin, I want to express on behalf of the
committee the sadness we all feel in light of yesterday's
events in Florida.
I was firstly horrified as I watched the news unfold
yesterday, though I was also moved to hear some of the stories
of the heroism displayed by some of the students and teachers
at the school.
In times like these, I know that thoughts expressed from
those of us who are far away can sometimes seem empty and
meaningless in the face of such a terrible tragedy. I will
simply say that I am praying for all of those who were affected
by these acts of senseless violence. That, of course, includes
a member of our committee, who I know is mourning the loss and
pain felt by those in his own State.
May they all find peace, healing, and a speedy recovery.
Now, I welcome everybody here to today's hearing, which
will be our third and final hearing on the President's budget
for fiscal year 2019. We have already had the Treasury
Secretary and the Acting IRS Commissioner appear before us. And
today we will be talking with Secretary Azar from the
Department of Health and Human Services.
Secretary Azar, I want to thank you for being here and
cooperating with us, and welcome back. It has been just a
little over a month since you last appeared before us. This
could cause some nervous reactions, you never know.
Of course, you are still very new to your position, but we
are glad to have you back, because we have a lot to discuss.
Since you were last here, this committee has amassed a
number of legislative victories. I want to take a few minutes
to highlight these accomplishments, as many are within HHS's
jurisdiction.
Last month, as a result of countless hours of work by this
committee, Congress passed and the President signed a 6-year
CHIP extension. A few weeks later, we added another 4 years to
that extension as part of a bipartisan budget act. That is 10
more years of CHIP funding, which is, quite frankly, really a
historic accomplishment.
Senator Ted Kennedy and I created the CHIP program more
than 2 decades ago. And despite always enjoying bipartisan
support, at no point in the program's history have we been able
to deliver this much certainty and security for the families
and children who depend on CHIP.
I want to once again commend my colleagues on both sides
who joined in this effort and who share in this success, and
especially my colleague from Oregon. It was no small feat.
In addition to the CHIP extension, the CHRONIC Care Act,
another bipartisan legislative product out of this committee,
was also signed into law recently. This new law will improve
care for Medicare beneficiaries living with chronic conditions,
streamline care coordination, and improve quality outcomes
without worsening Medicare's shaky fiscal status.
Again, I want to thank everyone on this committee who
worked on this bill, most notably our ranking member, Senator
Wyden, as well as Senators Isakson and Warner, who were key
leaders in the drafting and passage of this very important
bill.
And it does not end there. The budget bill also included
the bipartisan Family First Prevention Services Act, which will
help keep more children safely with their families specifically
by funding substance abuse and mental health services that have
been shown to prevent children from entering foster care.
All of this success is testament to bipartisanship and
proves that it is possible for both parties to find common
ground and work together. As always, there is more work to be
done, and I am optimistic that we can be just as effective in
the coming months.
Of course, these recent achievements will not mean much if
they are not implemented properly.
Secretary Azar, I look forward to working with you as this
process moves forward.
Now, I would like to take a moment to talk about some of
the specifics in the President's budget which recognize the
need to eliminate wasteful spending, rein in our national debt,
and focus on protecting Americans at home.
I appreciate that the President's budget takes steps toward
a course correction that will hopefully lead to a more
economically sound future, all while still ensuring high-
quality and accessible health care.
One of the key and critical assumptions in the President's
budget is the repeal of Obamacare. The budget bakes in this
repeal and replaces it with a State-based grant system. All
told, the administration estimates that would save more than
$675 billion--that is with a ``b.''
Many of us on the committee, I think all of us on the
Republican side, share this desire to repeal Obamacare. And we
have actually done some great work on rolling back major
elements of the so-called Affordable Care Act this Congress.
For starters, our tax reform bill zeroed out the individual
mandate tax. The recent budget bill also included the so-called
Medicare extenders and repealed the Independent Payment
Advisory Board. And in that same bill, we extended previous
delays on other Obamacare taxes, including the medical device
tax, the health insurance, and the so-called ``Cadillac tax.''
But as the budget points out, we are not quite there yet. I
hope we can take additional steps in the future, and I look
forward to continuing our discussions on how we can stop the
skyrocketing costs of health care in a meaningful and a well-
governed way.
Beyond the critical repeal-and-replace efforts with
Obamacare, we also need to start getting serious about Medicare
and Medicaid reforms. Both of these programs need to be put on
more sustainable paths so that we can fulfill the promises of
these programs for future generations.
I know that any time a Republican mentions the fiscal
predicament of Medicare and Medicaid, we are essentially asking
to be accused of robbing the elderly and low-income families of
their health care. But none of these scare tactics will improve
the outlook of our Federal health-care programs. That is going
to take some hard work, and hopefully we can find a path
forward there as well.
Secretary Azar, during your confirmation hearing, you
emphasized that addressing rising drug prices would be one of
your top priorities. As you know, I have spent quite a bit of
time on this issue working to ensure that patients have access
to innovative and high-quality medications.
It can be tricky to balance the need to encourage
investment and development of new and effective drugs and
treatments while also working to make sure those in need can
obtain access to those potentially lifesaving and life-
improving products.
Some have made a crusade out of scapegoating the companies
that develop drugs and treatments. And when this almost
singular focus prevails, the result is policy that tends to be
less than perfect, to put it charitably. We saw an example of
this in last week's bipartisan budget act that increased the
discount that manufacturers were required to provide under the
so-called ``doughnut hole'' in Medicare Part D. Now, I voiced
my opposition to the inclusion of this provision in the budget
agreement on the Senate floor last week. I am working with my
colleagues who share my concern on the increased manufacturer
discount provision to mitigate its impact.
And we should all strive further. As this budget has a
number of other drug-related policy proposals, I implore the
administration to take care to strike a balance between access
and innovation. It is a balance that I hope that we should all
strive to achieve.
Now, Secretary Azar, you also emphasized that addressing
America's opioid crisis is another one of your top priorities.
I am happy to see that the President's budget stresses the
importance of working together to fight this epidemic.
The CDC estimates that each day our country experiences
more than 100 opioid-related deaths. My home State of Utah has
been especially hard hit. And while the drug-overdose rate has
risen over the past decade, we are starting to see a shifting
tide thanks to the leadership of many officials in my State.
With that said, they need Federal help. And I know that
many in Congress, including several members of this committee,
have been outspoken leaders in this effort. And I commend them
for their work.
We are committed to continuing our bipartisan committee
process to address the opioid epidemic, especially through
mandatory program proposals that can bring about meaningful and
enduring change to a system plagued with issues.
Mr. Secretary, I look forward to working with you in the
coming months as we look for solutions to address this crisis.
And I hope that we, as a committee, can continue our bipartisan
efforts to curtail this growing string of tragedies.
To close, let me just say that, as we all know, it is
Congress's responsibility to pass a budget. The President's
proposed budget merely sets the tone and provides us with the
baseline for debate. I hope that we can work together to
implement many of the
common-sense reforms we have been debating for so long, and I
hope that we can continue to work to set aside our differences
in order to find beneficial solutions.
I look forward to having an open and frank discussion with
Secretary Azar about these and other matters.
Before I close, I do want to note that because we were
unable to get a quorum yesterday, if at any point during the
hearing a suitable quorum is present, I intend to pause the
hearing and move to votes on the nominations of Mr. Dennis Shea
and Mr. C.J. Mahoney. Thereafter, we will resume our hearing.
With that, let me now turn to my friend, the ranking
member, for his opening remarks.
[The prepared statement of Chairman Hatch appears in the
appendix.]
The Chairman. Senator Wyden?
OPENING STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
Senator Wyden. Thank you very much, Mr. Chairman.
Mr. Chairman and colleagues, 18 school shootings this year.
And I am just going to begin by saying, when is enough? And we
watch these young people from the high schools, and I heard one
in effect say, you know, we are kids, we cannot fix this. You
adults get over it and deal with it. And that, to me, is
central to what we are talking about this morning, because we
are going to talk about health care.
And what we have been hearing on the news is, it sure
sounds like there are a lot of young people who are frightened
about what can happen at their school. So we deal with lots of
bills and lots of amendments, but like those students said, it
is time to get over it. It is time to act. And we have learned
in the last 24 hours enough is enough.
And, Mr. Chairman, I want to pick up first on the point you
made, because in the last couple of weeks on the health-care
front, as you have noted, we have had some very positive
developments here in the last few weeks.
If you had told me in the winter of 2017 that we would have
10-year CHIP reauthorization, everybody would have said, what
planet is this person residing on?
The CHRONIC Care bill, and I see Senator Isakson, who was
with me on day one--Senator Warner is not here--with Senator
Isakson in this room, we launched it.
Chairman Hatch, to his credit, pulled together a bipartisan
group of us.
Colleagues, let us make sure we understand what this
CHRONIC Care bill is all about. The CHRONIC Care bill is about
updating the Medicare guarantee and modernizing the program to
deal with where most of the money is going to be spent: on
cancer and diabetes and heart disease and strokes.
And when I was director of the Gray Panthers, it was a
really different Medicare program. You had Part A for hospitals
and you had Part B for doctors, and that was that. And
colleagues like Senator Isakson and Senator Warner and our
bipartisan group said, when you have 10,000 people turning 65
every day and it is going to happen for years and years to
come, you have got to dig in.
Chairman Hatch made that possible. I want to thank the
chairman.
And then, of course, a lot of people who work in the child
welfare field are saying that the Family First bill was what
they have been dreaming about for 3 full decades. And that came
together here in the last couple of weeks, and I want to thank
you for that, Mr. Chairman.
Now, on a not-so-positive note, the budget season is at
hand again, so the Trump agenda of health-care discrimination
is back. And I am going to go through the examples.
Start with discrimination against Americans with pre-
existing conditions. People who have pre-existing conditions
count on having a robust private insurance market with strong
consumer protections. What the Trump budget offers is chaos in
the private insurance market and the elimination of key
consumer protections.
The budget embraces the old Graham-Cassidy proposal that
lived a mercifully short life last fall because, in this room,
we blew the whistle on the fact that it did not lock in
protections for those who have pre-existing conditions.
On top of that, the administration is giving a green light
to junk insurance policies that revive the worst insurance
abuses of the past, such as skimpy coverage and dollar limits
on care. So for millions of people with pre-existing
conditions, the Trump administration seems dead-set on making
the care they need unaffordable and inaccessible.
Next on the agenda of health-care discrimination is
discrimination against women. When you get rid of the consumer
protections in the Affordable Care Act, you return to an era
when 75 percent of insurance plans in the individual market did
not cover maternity care or birth control.
And under the Trump budget, which arbitrarily attacks key
providers--Planned Parenthood and others--millions of women
would lose the right to see the doctor they trust, the doctor
of their choosing.
Then the Trump agenda of health-care discrimination goes
after Americans who walk an economic tightrope. One-point-four
trillion dollars cut from Medicaid, millions of Americans
locked out of the program, a scheme to wipe out key nationwide
protections and cap the program, essentially ending the
guarantee of care for those who qualify for Medicaid. Now the
administration reportedly is discussing lifetime limits for
Americans on Medicaid.
Both sides used to agree that lifetime limits in health
care were absolutely wrong, no exceptions. The ban on lifetime
limits in the Affordable Care Act was one of the core
protections that Republicans--Republicans--said ought to stay.
Introducing lifetime limits in Medicaid raises the
frightening question of, what happens if somebody maxes out
after cancer treatment at age 45? Are they going to be on the
street in old age, capped out of nursing home benefits? We are
going to be discussing that.
Finally, the Trump agenda of health-care discrimination
turns against older Americans. Slashing Medicaid to the bone
and transforming the program into a capped program is an
extraordinary threat to the welfare of older people. Medicare
helps to pay for two out of three seniors in nursing homes. And
it is essential for seniors who count on home-based care.
Even for older people at age 62 or 63, there is bad news.
The Trump budget hits them with an age tax, allowing insurance
companies to charge them far-higher rates than they charge
others.
Bottom line: the agenda of health-care discrimination is
out in force in this Trump budget. And in my view, it is a
comprehensive plan to drag the country back to the days when
the health-care system was basically working for people who are
healthy and wealthy and everybody else was on their own.
Finally, we are going to, I am sure, talk about the
question of prescription drugs. The President famously talked
about how drug companies were, quote, ``getting away with
murder.'' Those are his words, not mine. And the President said
they were getting away with murder by setting drug prices so
high. The way he talked about the problem, Americans thought he
was going to come out swinging with big solutions to the
challenge.
In the plan released last week, I still do not see a
solution to the fundamental issue: drug companies set prices
that are way too high.
There is not a debate about the fact that the system is
broken and it needs reform, but if pharmaceutical companies can
come out of the gate with unaffordable prices, patients will
suffer. And I do not see where you fix that with some efforts
to play catch-up ball.
The Trump prescription drug plan lets pharmaceutical
companies keep on--to borrow a phrase--getting away with
murder.
Finally, a lot of what the administration put forward last
week looks familiar. On the pharmaceutical side, some of it is
borrowed from legislation I proposed or recommendations that
came from outsiders. There is value in these ideas; there is an
opportunity to move on a bipartisan basis. But that is not what
the American people were promised.
The American people were promised a muscular approach, a
position where the American people would know that their
government was on their side and helping them deal with this
issue of how they are getting clobbered at the pharmaceutical
window when they go in to get their medicine.
I will wrap up by talking about a different part of the
Secretary's agenda vital to kids. Chairman Hatch and I have
both mentioned Family First. I am very proud of that effort,
because for too long the child welfare system has basically
been about splitting families apart. That is what Family First
seeks to reform because, instead of just two lackluster
options--leaving young people in a family setting where they
were still going to face problems or sending them off to a
future of uncertainty in foster care--we said we would allow
States to find safe ways to keep families together and families
healthier.
States could use foster care dollars to fund services like
substance abuse treatment, mental health and parenting
programs, with the goal of preventing a prolonged slide into
the crises that end with families breaking apart.
I share Chairman Hatch's view about the opioid epidemic. It
was good that additional funds were made available in the
recent budget agreement. And now what we have to do is make
sure that the Department moves quickly so that the States can
get away from business as usual and deal with the epidemic.
We look forward to hearing from you, Secretary Azar.
As I have said publicly, the Secretary indicated in our
pre-
nomination hearing that he was going to take the initiative and
be in touch on a regular basis to discuss the issues. And he
has already shown he is serious about that with a call here
recently. I appreciate it.
I look forward to our work together. And let us try to make
more of it look like what has happened out of this committee in
the last couple of weeks, and let us make less of it look like
the agenda of health-care discrimination that I believe is what
the budget is all about.
Thank you, Mr. Chairman.
The Chairman. Well, thank you, Senator.
[The prepared statement of Senator Wyden appears in the
appendix.]
The Chairman. Today we have the pleasure of being joined by
Mr. Alex M. Azar, the Secretary for Health and Human Services.
Mr. Azar, I want to thank you for taking time out of what I
know is a tremendous schedule and for your appearing here
today.
Because we heard two very eloquent introductions for you
just over a month ago, I will keep my introduction short and to
the point.
After graduating with his law degree from Yale University,
Mr. Azar also clerked for Justice Scalia on the Supreme Court
and later became a partner at Wiley, Rein, and Fielding before
being confirmed as General Counsel at HHS back in 2001.
Then in 2005, he was asked to serve as Deputy Secretary at
HHS, where he served as the chief operations officer for the
largest civilian Cabinet department in the United States of
America, in our government, with over 66,000 employees and a
budget of nearly $700 billion.
Following his service at HHS, Secretary Azar rejoined the
private sector as a senior vice president for corporate affairs
and communications at Eli Lilly and Company. He eventually went
on to become president of Lilly USA, LLC, the largest affiliate
of Eli Lilly.
Then just last month, Secretary Azar was confirmed to his
current role as Secretary of HHS.
So, Secretary Azar, we are grateful to have you here,
grateful for your time, grateful for your expertise, and
grateful for the service you have already given and continue to
give.
Please proceed with your statement.
STATEMENT OF HON. ALEX M. AZAR II, SECRETARY, DEPARTMENT OF
HEALTH AND HUMAN SERVICES, WASHINGTON, DC
Secretary Azar. Chairman Hatch, Ranking Member Wyden, and
members of the committee, thank you for inviting me here today
to discuss the President's budget for the Department of Health
and Human Services for fiscal year 2019.
I would like to begin, though, by joining Chairman Hatch
and Ranking Member Wyden in expressing our deepest sympathies
and prayers for the victims and their families in Florida.
It is an honor to be here today, and it is an honor to be
able to serve as Secretary of HHS thanks to the support of the
members of this committee.
Our mission at HHS is to enhance and protect the health and
well-being of all Americans. It is a vital mission, and the
President's budget clearly recognizes that.
The budget makes significant strategic investments in HHS's
work, boosting discretionary spending at the Department by 11
percent in fiscal year 2019 to $95.4 billion. Among other
targeted investments, that is an increase of $747 million for
the National Institutes of Health, a $473-million increase for
the Food and Drug Administration, and a $157-million increase
over 2018 funding for emergency preparedness across the
Department.
The President's budget especially supports four particular
priorities that we have laid out for the Department, issues
that the men and women of HHS are hard at work on already:
fighting the opioid crisis, increasing the affordability and
accessibility of health insurance, tackling the high price of
prescription drugs, and using Medicare to move our health-care
system in a value-based direction.
First, the President's budget brings a new level of
commitment to fighting the crisis of opioid addiction and
overdose that is stealing more than 100 American lives from us
every single day.
Under President Trump, HHS has already dispersed
unprecedented resources to support access to addiction
treatment. The budget would take total investment to $10
billion in a joint allocation to address the opioid epidemic
and related mental health challenges.
Second, we are committed to bringing down the skyrocketing
cost of health insurance, especially in the individual and
small-group markets, so more Americans can access quality,
affordable health care. This budget recognizes that this will
not be accomplished by one-size-fits-all solutions from
Washington. It will require giving States room to experiment
with models that work for them and allowing customers to
purchase individualized plans that meet their needs.
That is why the budget proposes a historic transfer of
resources and authority from the Federal Government back to the
States, empowering those who are closest to the people and can
best determine their needs. The budget would also restore
balance to the Medicaid program, fixing a structure that has
driven runaway costs without a commensurate increase in
quality.
Third, prescription drug costs in our country are too high.
President Trump recognizes this, I recognize this, and we are
doing something about it. This budget has a raft of proposals
to bring down drug prices, especially for America's seniors. We
propose a five-part reform plan to further improve the already
successful Medicare Part D prescription drug program.
These major changes will straighten out incentives that too
often serve program middlemen more than they do our seniors,
over the next 10 years adding to savings that we are already
generating with reforms to Medicare Part B payments under the
340B drug discount program.
The budget also proposes further reforms in Medicaid and
Medicare Part B to save patients money on drugs and provides
strong support for FDA's efforts to spur innovation and
competition in generic drug markets. We want programs like
Medicare and Medicaid to work for the people they serve. That
means empowering patients and providers with the right
incentives to pay for health and outcomes rather than
procedures and sickness.
Our fourth departmental priority is to use the tremendous
power we have through Medicare as the largest purchaser of
medical services in the United States to move our whole health-
care system in this direction. This budget takes steps towards
that by, for instance, eliminating price variation based on
where post-acute care is delivered, rationalizing payments to
physicians in hospital-owned outpatient facilities, supporting
investments in telehealth, and advancing the work of
Accountable Care Organizations.
The future of Medicare must be driven by value, quality,
and outcomes, not the current thicket of opaque, unproductive
incentives.
The President's budget will help accomplish three important
goals at HHS: first, making the programs we run really work for
the people they are meant to serve, including by making
insurance affordable for all Americans; second, making sure
that our programs are on a sound fiscal footing that will allow
them to serve future generations too; and third, making the
necessary investments to keep Americans safe from natural
disasters and infectious threats.
Making our programs work for today's Americans, sustaining
them for future generations, and keeping our country safe is a
sound vision for the Department of Health and Human Services,
and I am proud to support it.
Thank you, Mr. Chairman.
[The prepared statement of Secretary Azar appears in the
appendix.]
The Chairman. As you may know, the Finance Committee is
undertaking a bipartisan process to identify ways to address
the opioid crisis or epidemic in Medicare and Medicaid so that
the right incentives exist for addressing pain and addiction.
When you testified before this committee earlier this year,
you mentioned that addressing the opioid epidemic would be one
of your top priorities. Now, I am personally pleased to see a
number of proposals included in the President's budget on this
particular topic. And I am sure you have helped do that.
Will you commit to working with this committee to find
bipartisan solutions to address this epidemic within Medicare
and Medicaid?
Secretary Azar. Absolutely, Mr. Chairman.
The Chairman. Well, I appreciate that.
I am not going to ask any further questions at this time,
so we will turn to the ranking member, Senator Wyden.
Senator Wyden. Thank you very much, Mr. Chairman.
And I am going to start, Mr. Secretary--and we have talked
about this matter of junk insurance and particularly what seems
to be an administration plan to greenlight it. And I recognize
that this did not essentially commence on your watch, but you
are there now and so I have to make sure we are going to have a
sensible policy.
What junk insurance is all about is making sure that
insurance companies can charge more for people with pre-
existing conditions and include arbitrary caps on the amount of
care.
And in a lot of ways, junk insurance just turns back the
clock. And when I heard about this, the first thing I thought
about is, when I was director of the Gray Panthers, it was
common for an older person to have, like, 15, 20, 25 policies
that were sold to supplement their Medicare. They were called
Medigap.
And finally, we wrote a bipartisan law--Senator Dole, for
example, was very helpful in it--which drained the swamp, an
appropriate phrase for the time.
And now I look at what seems to be bubbling up again--
different population group, not seniors, but the same sort of
thing--that we are going to greenlight policies that are
appropriately called junk because they are not worth the paper
they are written on.
Idaho seems to have the most active effort: once again,
people spending hard-earned money on a plan they need, only to
find that they are being ripped off by an insurer.
So thus far, Blue Cross of Idaho is the only insurer that
has applied to sell the junk plans. And I have the application
here, and it seems all about finding out if people have pre-
existing conditions so they can discriminate against them,
charge them more. All the questions in section 5A deal with
that issue. Have you been pregnant? Have you been tested for
allergies? Has anybody had a claim over $5,000?
If an insurer is following the law banning discrimination
against those with pre-existing conditions, what are all those
questions about?
Secretary Azar. So, Senator Wyden, I have seen the media
reports about the Blue plan request and the actions in Idaho. I
have not yet seen the plan or received any type of waiver
request. I can assure you that if we do receive that and if
that does progress forward, we will be looking at that very
carefully and measuring it up against the standards of the law,
as is our duty.
Senator Wyden. I appreciate that. And I know this is new
for you, so this is a first impression.
This, as I understand it, is not a waiver. In effect, Idaho
is just saying, we are going to do this; we are going to do it
because we are a State that wants to do it.
But there is a Federal law, something I fought very hard
for. It was right in the heart of a bipartisan proposal, the
Healthy Americans Act, the centerpiece--seven Democrats, seven
Republicans--airtight protection, loophole-free, airtight
protection for those who would have a pre-existing condition.
And now, what this is going to be all about--and when we
talked in the office, I said you are not going to be sitting
around reading paperbacks in your job--this is going to be a
question of whether the Department is going to say Federal law,
which protects people from discrimination against pre-existing
conditions, controls or if Idaho can start something that just
moves America back towards yesteryear where we can have
insurers beat the stuffing out of people with a pre-existing
condition.
So let us do this. This is new for you. I would like you to
get back to me, let us say within 10 days, with respect to how
the Department is going to pursue this. Because I think that
this case is really being watched. This is the one that is
really going to determine whether States can just on their own
say, we are going back to yesteryear. So this has very, very
substantial implications.
And what I would like to do--two things, Mr. Chairman. I
would like to ask unanimous consent to enter the Blue Cross of
Idaho application form into the record. That would be my first
unanimous consent request.
[The application appears in the appendix on p. 101.]
Senator Wyden. My second unanimous consent request is to
enter in a letter to the Secretary from 15 organizations that
represent millions of patients expressing serious concerns with
essentially the points I am talking about, that Idaho is
breaking a Federal law.
In other words, the first time I heard about it, I said,
wow, maybe it is just a waiver, it will be complicated. I have
been very interested in waivers--a lot of Senators have--but
this is not a waiver. This is just saying, we are going to do
it.
So I want to enter into the record the letter from the 15
organizations that represent millions of patients expressing
the concerns I have with Idaho breaking the law, the harm it
will have on patients, the implications as a precedent.
[The letter appears in the appendix on p. 104.]
Senator Wyden. And then, is it acceptable to you that you
will get back in some way to outline how the Department intends
to pursue this within 10 days?
Secretary Azar. I am very happy to get back. I do not want
to commit on the 10 days because this has to run through a
process of, first, I guess they are applying to Idaho, and
Idaho will have to decide its own thing under its laws that it
has. And then anything would presumably come to us.
I will be happy to work with you and be very transparent
about that process. I just do not--I do not want to prematurely
be involved before there is even a matter in controversy at the
State level. So all we have seen is a press report that the
Blues have submitted an application. I do not know whether it
would even be approved by Idaho or certified as compliant under
the ACA. So it is really just a question of timing.
I can assure you we will be looking, at the right time,
looking very seriously at the legal requirements.
Senator Wyden. I am over my time. Here is what concerns me.
They are not planning to come to you and ask permission. They
have made the argument that they can just do it on their own.
So this idea that we are going to just sit in our offices back
here and wait for somebody to tell us, oh, we are going to
discriminate against people with pre-existing conditions, that
will not cut it with me. It does not cut it.
Secretary Azar. No, and that is not what I would propose.
Senator Wyden. How about if we say I will be told how the
Department is going to pursue this within 30 days?
Secretary Azar. I hope--I believe that would be acceptable.
My only issue is, I need a case in controversy; I need to know
that there is actually action that is happening.
Senator Wyden. I am over my time.
Secretary Azar. But I do not think we----
Senator Wyden. I think I have made my point. I am over my
time.
Secretary Azar. I do not think we have any difference about
the need of the Department to be engaged here, Senator.
The Chairman. Well, if you will do that, that would be, I
think, very helpful to the Senator.
Senator Crapo?
Senator Crapo. Thank you, Mr. Chairman.
And thank you for being here, Secretary Azar.
I am from Idaho, and I am very familiar with what Idaho is
doing. And once again, we are in--this is like Groundhog Day.
Every time a new idea for how to fix the health-care system
comes out, it is accused of eliminating pre-existing conditions
as well as every other possible attack that can be dreamed up
against it.
I think it is appropriate for you, Mr. Secretary, to wait
to see exactly what is developing and evaluate it carefully.
And I would encourage all of my colleagues to review what is
actually being done rather than just jumping right back in.
And my good friend from Oregon and I work very closely
together on many, many issues. I look forward to working with
you on this issue.
This plan, as I understand it, does not eliminate pre-
existing issues. When the Graham-Cassidy proposal was made, the
attack was that, as we give greater responsibilities to States
to be that incubator of new ideas and of new approaches to
health care, that it was going to get rid of pre-existing
conditions, that it was going to drive people out of the
marketplace, that it was going to cause people to lose their
insurance.
The reality is, the effort being undertaken by the people
in Idaho is one to protect and expand the opportunities and
access people have to insurance of their choice, insurance that
will work for them.
And yes, it does move away from the notion that the only
insurance policy anyone in America should be able to buy is one
that this committee or this Congress or this Federal Government
decides they can buy.
Fortunately in the tax legislation that we just passed, we
eliminated the tax penalty for people who do not want to buy
the product the Federal Government wants to force on them. And
now the States are seeking to have some flexibility.
In your testimony, Mr. Azar, you talked about the fact that
we want to encourage the States to experiment and that
additional resources are going to be provided to the States to
allow them to experiment.
And I understand what the law is. And as I evaluate this, I
do not see a violation at all. Idaho is still providing
Obamacare-
compliant plans for anyone who wants to purchase them, but they
are allowing others to have options. And if the idea is that
people in America can have options--comply with all the
Obamacare mandates for anyone who wants that but allow others
who want to buy a different kind of insurance policy to have an
option--the idea that that is a direction that we should choke
off right at the beginning is one that I resist.
And I would just like your--I know you cannot comment on
the Idaho situation specifically. But I would just like your
observation on the notion that we need to facilitate,
incentivize, and provide additional resources to the States so
that they can do exactly what many States are trying to do
right now, which is to find a way to give their citizens
greater choice and greater access.
Secretary Azar. Thank you, Senator. And as you said, I
think any consideration of a State proposal or any matter like
this requires great deliberation and caution and care in
assessing it. So I just simply cannot state a view based on
media reports around a State's program.
But I think what we are seeing here is a cry for help. It
is saying that where we are right now with our individual
market, because of the structure we have, is not serving enough
of our citizens and there are too many citizens who simply
cannot afford the insurance packages that we have in our
program because of the way the statute is designed and the way
it has been implemented.
And so that is why it is so important that we work to give
States flexibility so that we try to offer for those 28 million
Americans who cannot afford access to the individual market--
Affordable Care Act plans--that they can have other options to
choose from that may meet their needs, and then also try to fix
what is in the program to help make that as affordable as
possible, working together with the Congress.
Senator Crapo. Well, thank you. And I will just conclude
with an observation.
In addition to the program that my colleague from Oregon
referenced, I expect that Idaho, like many other States, is
probably going to apply for a waiver or two from HHS with
regard to some aspect of Federal law, as States are starting, I
think increasingly, to seek the flexibility that they can get
from the Federal Government to do this kind of creative work on
our health-care system to help us find the right path to
provide the best and the most effective and efficient and
inexpensive insurance that we can find.
And I would just encourage you--not just with regard to any
applications that Idaho provides, but with regard to all 50 of
the States as they seek to ask you, under the authorities you
have to grant waivers, to allow them to do this kind of thing
and to work to improve our health-care markets--to give those
applications very careful consideration.
Thank you.
The Chairman. Thanks, Senator.
Senator Carper?
Senator Carper. Thanks, Mr. Chairman.
Several of my colleagues have expressed their remorse and
sorrow over the latest shooting, mass shooting, this time down
in Parkland, FL. I share that.
I was born in West Virginia, but grew up in Virginia in a
family of hunters. My dad introduced me to hunting at a very
young age. I got my first BB gun when I was about 10. I got my
first shotgun from my dad, and my grandfather died and he
willed his shotgun to me. And I used it for many years hunting
as I grew up in Virginia with my dad.
My dad was a gun collector and sold guns until near the end
of his life down in Florida. I believe, my family believes in
the Second Amendment to the Constitution, the right to bear
arms.
I want to say, though, I am tired, sick and tired, of
opening a hearing like this and we express our remorse, again
another mass shooting. This has got to end.
My dad used to say we ought to use some common sense. In
this case, we ought to use some common sense with respect to
guns and gun legislation.
Senator Feinstein has legislation that has been introduced;
it is called a ``no-fly, no-buy'' bill. If you are on a
terrorist watch list, you should not be able to buy weapons.
And we cannot even get that passed. It is a sad commentary.
And, colleagues, we have to use some common sense and use
our hearts here. And enough of these expressions of remorse. I
know they are heartfelt, but enough. That is not what we are
here to talk about today.
I just want to say, Mr. Secretary, congratulations to you.
Thank you for the dialogue and the conversations that we had
during the nomination process. Thank you for the conversation
we had earlier this week. And I look forward to more as well.
Sometimes we vote our hopes over our fears here, and I
voted for you, for your confirmation, out of my hopes. And we
have this moral obligation I have talked to you about, to my
colleagues about, until they are sick of hearing it. We have a
moral obligation to the least of these, and that includes the
moral obligation to make sure people have access to health
care, everybody has access to health care.
We have a fiscal imperative to make sure we are doing it in
a fiscally responsible way. Among the ways that we do that is
Federally Qualified Health Centers, the CHIP program.
Congratulations, Mr. Chairman, on this latest extension of
your creation, that with Ted Kennedy.
As a recovering Governor, former chairman of the National
Governors Association, along with Mark Warner who was chairman
of the NGA, I know a little bit about what States can do when
they are given some flexibility.
By the same token, people can buy cheap insurance, and it
is not worth the paper that it is written on. And so we have to
be careful and be mindful of that.
I want to talk a little bit about our efforts to shift,
move away from fee-for-service payment to a value-based system,
Mr. Secretary. But before I do that, I want to just mention,
despite the efforts of the administration to, I would say,
undermine, even sabotage our insurance marketplaces, almost 9
million Americans, over 95 percent of the enrollment population
in 2007, signed up for insurance plans for 2018.
Americans support it, they want to keep the Affordable Care
Act. In contrast, the President's budget proposes to repeal the
ACA, replaces it with a proposal that eliminates subsidies that
make health insurance more affordable, and cuts more than $1.4
trillion out of Medicaid.
I know you were not in the administration when this
committee reviewed this proposal last year, so I just want to
make sure you know that nearly every patient group, every
physician group, every hospital group, health insurance group,
strongly opposes the President's proposal.
More than two-thirds of Governors urged Congress not to
pass that proposal. The Brookings Institution found that more
than 20 million Americans could lose insurance if we go that
path.
And individuals with pre-existing conditions could lose,
would lose the guarantee of affordable health insurance. And
with that, there is much concern from every corner of our
health-care system in this country.
Do you think it might be worthwhile to first reexamine this
proposal and work together with our patients, with our doctors,
with our health-care providers to make some substantive changes
before offering up this idea again?
Secretary Azar. So on this proposal, our concept is, of
course, to change it to a $1.2-trillion grant program to the
States that still retains protections for pre-existing
conditions, maternal care, newborn care, reconstructive surgery
after mastectomy, and certain coverage for those under the age
of 26 on family plans.
So I am very happy to work with you on details to see if we
can make this program work and have it make sense.
Where we are is not working for so many people, is the
challenge. Now, I will work with whatever the Congress has
given me to try to make it as affordable as possible for
individuals, with as much choice as possible. We would like to
pursue legislative change to see if this can be the approach.
Because insurance is so complex, I do not think, from the
Federal level, we can do it all.
Your colleague, Senator Cardin, has a State that has taken
a very different approach. Other States will take different
approaches. I love the laboratory of States trying things in
this very complex area.
Senator Carper. All right. Good.
Mr. Chairman, the administration actually--and our
Secretary has actually offered a couple of ways to stabilize
the exchanges. This administration, up until now, has been just
hell-bent on undermining the exchanges, destabilizing the
exchanges. But I just want to thank you for some encouraging
developments there.
And let us say--I think there are some things we can work
together on, including reinsurance. But we will talk about that
later. Thank you very much.
Secretary Azar. Thank you.
The Chairman. Well, thank you, Senator.
The Senator from Georgia, Senator Isakson.
Senator Isakson. Thank you, Mr. Chairman.
Well, I can testify that you hit the ground running,
because your first weekend on the job you were on the phone
long-distance with me talking about the CDC. And I appreciate
that very much.
I also know that you probably had no hand in the crafting
of this budget, because you were not onboard when it was
crafted, or at the least you saw it after it was done.
But with regard to the Centers for Disease Control and
Prevention in Atlanta, I am deeply concerned this has a $1-
billion reduction in funding for CDC from 11.9 to $10.9 billion
at a critical time for our containment laboratories and the
research and development that is done there, as well as our
preparedness at CDC.
CDC was on the job, ready to go when Ebola hit. It did not
need additional appropriations to hit the ground running. They
hit the ground running, and appropriations came later. We
stopped an epidemic which could have been a disaster, not just
in Africa, but around the world.
CDC had the first people on the ground here when anthrax
broke out after September 11, 2001 in Washington against
members of the Senate and the House.
They are the world's health center. They are our
protection, they are our safety blanket. It is the finest
facility that there is. And to cut them by almost 10 percent,
$1 billion, in one fell swoop, to me is unconscionable.
Have you had time to look at the CDC's budget? Will you
work to get it to an appropriate level to meet the needs that
we place on it every single day?
Secretary Azar. So, Senator, you know the care that I give
to CDC and the value I place on it, both domestically and
internationally.
As I look at the budget for CDC, the biggest part of change
there really is our two transfers that are part of the
reorganization that was begun at HHS. One is to move the
leadership of the Strategic National Stockpile and the
budgeting under the Assistant Secretary for Preparedness and
Response. So that just moves where it reports to; it does not
even change the Atlanta aspect, but just moves where it reports
to. That is one major chunk.
The other is the National Institute for Occupational Safety
and Health, to integrate that--again, not moving it, but
changing its leadership--to be reporting into the National
Institutes of Health because of the research function.
So net-net, it is actually only about a $100-million
reduction on the operations of CDC.
What I am really proud of is that we were able to get the
CDC budget regularized here in our proposal. So, you know, we
have been operating out of the prevention fund. We have now
moved that over to $900 million of discretionary, moved that
over so that the core operations of CDC are now regularized in
the budget and do not just sit there as a pay-for as we look at
other legislation. I think it is really critical to the long-
term stability of CDC that we show that that is not variable
each year, it is really built into the base of operations.
So I share the commitment and look forward to working with
you on CDC.
Senator Isakson. Well, as we transition to a new Director--
CDC is in a transitional leadership role right now--we need to
not lose focus on the importance of that agency and see to it
we are funding them to the level they need to be.
One other point on that funding: the containment
laboratories, again, are facing economic obsolescence and
practical obsolescence as early as next year.
Secretary Azar. Yes.
Senator Isakson. So it is time that we did some replacing.
And that is where all the bad, bad, bad pathogens are out
there. And a lot of young people risk their lives every day
working with dangerous things, trying to protect us, so we want
to make sure those laboratories are as safe as possible.
Secretary Azar. Yes, sir.
Senator Isakson. In the legislation on chronic care, we
also had another bill that went in that last night. When the
train left the station, there were a lot of cabooses on that
train. One of them was reimbursement for home infusion, which
you are probably familiar with. This is legislation I worked on
for a long time and has a deadline of January 1st of next year
for you to develop reimbursement under Part B to see to it
those reimbursements for home infusion therapy take place.
It is a real reduction in the cost to us, because home
infusion is a lot better than hospital infusion in terms of its
cost and what it costs the patient, as well as a better place
for the patient to receive care.
Would you work with me to see to it that by January 1st of
next year we get that in place so those reimbursements are
done?
Secretary Azar. Certainly. I am not familiar with that
provision, but I will certainly work with you to make sure we
get the job done on time.
Senator Isakson. I do not expect you to be familiar with
it, but I would never leave here this morning without making
you familiar with it.
Secretary Azar. Yes.
Senator Isakson. And one last point on that. The graduate
medical education programs were consolidated in the budget:
Medicare, Medicaid, and the children's graduate medical
education program into one program with a net decrease in
appropriation. Those programs are fantastic for creating good
physicians and new physicians in health care for children and
the elderly.
Will you work with me to see if we can get the maximum
appropriation appropriate to continue to meet the needs of the
people of the United States for graduate medical education?
Secretary Azar. Yes, absolutely, Senator. What we are doing
with the proposal on graduate medical education is trying to
pull the three different streams together and actually give
flexibility to make sure that we are able to invest in
specialties and underserved geographic areas that need it the
most.
Right now, we are very ossified from 1996 program levels
and sort of stuck there. This would grant flexibility to ensure
that the money, that scarce money, is going where needed most
for our health profession development, but I am happy to work
with you on that.
Senator Isakson. I look forward to working with you and
wish you the very best of luck in your new responsibility.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Cardin?
Senator Cardin. Thank you, Mr. Chairman.
Mr. Azar, a pleasure to see you here.
I want to talk about a few issues in the President's
budget, following up on some of our conversations from your
confirmation hearings and discussions that we have had.
You and I talked about our commitment in regards to
minority health and health disparities, the Institute of
Minority Health and Health Disparities at the National
Institutes of Health, and the Office of Minority Health at HHS.
I was disappointed to see that where we have put newer
resources into NIH--and I support that strongly--there was a
reduction of resources at the National Institute for Minority
Health and Health Disparities and a reduction of resources at
the Office of Minority Health within HHS.
Can you just share with me the rationale of those budget
cuts and reassure us of your commitment to the mission of
minority health and health disparities?
Secretary Azar. Yes, Senator Cardin. Thank you for raising
that.
The NIH issue, if I could, I would like to get back to you
on that, because I am not familiar--14 days on the job--with
that granular level within the NIH budget. We are delighted we
are able to actually keep NIH funding at the level it is, that
we are proposing. So I do not know about some of the ups and
downs there. I would like to get back to you on that if I
could.
On the Office of Minority Health, you know, it is still a
scarce and tight budget environment, and one thing that we
tried to do was to really prioritize direct service delivery
programs and actual scholarship, an underserved area, and
promotional activities around health professions.
So as we looked across the budget, a thematic approach that
was taken was, is this delivering direct care in minority
communities or is this supporting the development of health
professionals who will serve in underserved areas through
scholarship and reimbursement programs?
So that was the thesis that we tried to operate from. And
more general programmatic activities sometimes would have been
deemphasized against those in just the budget tradeoffs that
get made there.
So it is certainly not a minimization around minority
health programs. It is really the tradeoff and focus on service
delivery.
Senator Cardin. Well, that is helpful. If you could work
with our office so that we are aware of your strategies,
because I think together we can be more effective. We want to
make sure you have the resources that you need here and are
able to deal with the mission that we believe in: reducing
disparities in our communities. So if we could work together, I
would appreciate it.
Secretary Azar. Thank you.
Senator Cardin. I would just caution on another area in
regards to the budget and imposing some additional costs on
emergency care, which turns out to be non-emergency conditions.
And my concern here is that we are seeing an attack on the
prudent layperson's standard in the private insurance
marketplace. Congress has passed legislation on this to make it
clear that if it is prudent for you to seek emergency care, it
is going to be reimbursed. And we are very happy if you end up
in the emergency room and the condition is not life-
threatening--that is good news. But then you might get a shock
when you get the bill and recognize it is not being paid by
your insurance company.
So the policies in the government programs become
particularly important because they are used as goalposts by
the private companies. And it looks like you are now imposing
additional copayments and costs on emergency care, where the
individual may have gone into the emergency room for proper
reasons but now finds there is a cost issue, which could be
used to deter people who need it from seeking care.
Secretary Azar. So I believe you are referring to a
suggested proposal that is in the budget that would allow for
Medicaid copays for emergency room visits that are determined
to have been misuse of emergency room visits. I agree with you,
we have to be----
Senator Cardin. I did not know it was misuse. I thought it
was that it turned out not to be emergency care.
Secretary Azar. Well, yes. We would need, we would want to
work with you to make sure that any legislation there is done
in a common-sense way. There is zero desire that it should
deter anyone from going into emergency rooms for care that they
ought to be seeking. And we need to make sure there is enough
of a cushion there that is common-sense and that does not, as
you said, create a situation where it deters people from going
in when they ought to go in.
Senator Cardin. Thank you, because we worked a long time on
the prudent layperson's standards. We had horrible practices in
the private sector, preauthorizations and things like that,
that were jeopardizing people's health.
There is one last point I would like to make, and that is,
I disagree with the budget on the Medicaid cuts and the basis
behind the Medicaid cuts.
But I just want to raise one issue that I would urge you to
be very careful about. We do not really have a long-term care
policy in America. And the States have the lion's share of the
burdens under the Medicaid system for long-term care. And to
the extent that we put more pressure on the States on Medicaid
programs, we jeopardize long-term care, which is critically
important to our seniors in America.
And I just think it is important that, whatever policies we
adopt here at the Federal level, we are mindful of the negative
impact it could have on care for seniors.
We would like seniors to be able to pay for their long-term
care; we would love them to have third-party coverage. Most do
not and therefore fall under the Medicaid program. And if we
put too much of a strap on the Medicaid program, we are going
to jeopardize long-term care for our seniors.
The Chairman. Well, thank you, Senator.
Senator Portman?
Senator Portman. Thank you, Mr. Chairman.
And, Secretary Azar, thank you for coming before us. I
think you are now fully in place, and it is great to see the
good work that you already started to do.
I know you are very interested in this issue of substance
abuse and particularly the opioid crisis. You and I have talked
about it at some length. And I would ask you a couple of
questions about that.
First, with regard to the funding, I notice that in your
budget you have additional funding for HHS, for SAMHSA. We also
in this body in this fiscal year actually increased the funding
for the Comprehensive Addiction and Recovery Act programs over
the authorization level. We have $267 million for fiscal year
2017, for instance, which was over the roughly $181 million
that was authorized, because we think these evidence-based
programs are where we ought to be directing some of this
funding, rather than just throwing money after the problem to
find out what works.
And these are the right kinds of treatment programs: long-
term recovery programs, prevention programs, helping our first
responders.
My question to you is, with the President's budget
indicating that HHS would have additional funding and with our
recent budget indicating that there would be $6 billion
directed toward this effort over the next 2 years, would you
support additional funding for these evidence-based programs
under the Comprehensive Addiction and Recovery Act?
Secretary Azar. So I do not know where our breakdown is on
the additional $3 billion in 2018 and $3 billion that we are
allocating in 2019. If I can get back to you, I just want to
see if we have put in the allocation, the funding toward those
particular programs.
But I am just delighted by the support of Congress and of
the President here and the amount of funding. We are going to
be able to support our addiction and treatment programs at
historic levels. We also put more money out last year than ever
before in history to help with the opioid crisis. And then with
these 2 years' funding and the $10-billion total, I am excited
to be able to work with all of you on these efforts.
Senator Portman. Again, I would say that the $267 million,
which was unprecedented, that we appropriated for this fiscal
year is a relatively small amount compared to the $10-billion
issue, say, that HHS was budgeted without specificity, as I see
it, in your budget. And we just want to work with you to be
sure that funding is used for evidence-based programs that
really work.
We have an example of one, by the way, that works which I
am concerned that your budget is going to make less effective,
and that is the Drug Free Communities Act. And I was the author
of this many years ago in the House, so maybe I have a little
bit of a bias toward it, but I also spent 9 years as chair of
our local coalition which was funded initially with some seed
money from this program. Over 2,000 community coalitions have
been formed around the country in response to the Drug Free
Communities Act, which essentially provides some matching
funds, almost seed money, for a short period of time.
We required that these coalitions, by the way, have
performance measures so we know whether they are working or
not. We think this is a very effective prevention and education
program.
At the time of an opioid crisis, it seems to us to be
exactly the wrong thing to do to take something that is working
and risk its ability to be effective in the future by moving it
from, in the case of your budget, ONDCP to HHS to combine with
other prevention programs that are different in kind.
So I would ask you to take a look at that. If you can
explain to me this morning why you think it ought to be moved,
I would be interested to hear. But I would hope that you would
not promote this idea.
I frankly do not think Congress is going to go along with
it. If they do, I am going to fight against it. Again, when
something is not broken, let us not try to fix it, and
particularly at a time when we need desperately to have more
prevention and education out there.
Secretary Azar. So I hope that I am remembering the correct
program, but I believe the change that you may be referring to
is the movement of the program, the funding, from ONDCP to
SAMHSA.
Senator Portman. That is correct.
Secretary Azar. We already at SAMHSA administer that
program. And I think this is just regularizing where the
funding is, since ONDCP is not a grant-making organization,
does not have those capabilities and staffing around that we do
already. And it is just putting the money where the function
already is.
So I actually do not believe it is in any--I know it is in
no way a deemphasis of the program. It was much more a
regularizing of the function over to SAMHSA where the work was
already getting done. I believe that is the case. And I will be
happy to just confirm that.
Senator Portman. Yes. Again, it, you know, has gone back
and forth over the years. It was at DOJ for a while and HHS in
terms of administering some of the actual grants, the grant-
making that goes out, as we talked about, but the direction
comes from ONDCP, which has this ability to take an interagency
approach. And it does involve a number of different departments
and agencies ultimately, the prevention and education efforts.
So I would hope that you would take a look at that, because
it is something that is actually working out there at a time
when we need more help than ever.
So I thank you again for your service. My time is expired.
I have a couple of other questions I am going to submit for the
record. And again, I appreciate the fact that you have stepped
up, and I look forward to working with you on the opioid crisis
and other matters.
The Chairman. Okay. Senator Toomey?
Senator Toomey. Thank you, Mr. Chairman.
Secretary Azar, thank you for joining us. Good to see you
again.
The administration's budget in your area, I think, strikes
some constructive balances. You have emphasis in some important
priority areas, like Senator Portman has alluded to: opioid
abuse, research, and treatment. I do hope we will be doing more
to understand the root causes of addiction as well as treatment
of addiction. I think we have a long way to go there.
Also, ideas about lowering the costs of prescription drugs
and continued investment in medical research generally are all
good.
But I also want to commend you for addressing a huge, huge
fiscal challenge that we have, which I think your budget does
address, and which I am going to ask you to comment on in a
moment, and that is dealing with the unsustainable spending of
our entitlement programs.
I just think we cannot underscore enough that you cannot
tax your way out of a problem. There is no revenue solution to
Federal Government spending programs that are growing faster
than our economy, as ultimately tax revenue can never, for
long, grow at a rate faster than our economy.
It strikes me, it long has struck me, that one of the
sensible places to begin to address this is with Medicaid, in
part because it is the biggest net expenditure program in the
Federal Government. There is no dedicated revenue stream, as
with Social Security and Medicare.
So Medicaid has these huge, huge outlays. The growth has
been staggering, right? In 1980, the Federal spending on
Medicaid was 2.4 percent of our budget, half a percent of GDP.
Today, it is 10 percent of our budget and 2 percentage points
of GDP.
Yesterday, the CMS actuary report on national health
expenditures projects that Medicaid will continue to grow at 6
percent per year--6 percent. Nobody believes that our economy
is going to grow at 6 percent. So what that means is, this
program is going to continue to consume an ever-greater share
of Federal spending and the economy if we do not do something
about it.
Well, one of the things we might consider doing about it is
restructuring this program so that there are Federal caps on
spending on a per-capita basis. And this, of course, is a
completely bipartisan idea, first floated seriously by
President Bill Clinton, supported by Donna Shalala and Howard
Dean and the American Academy of Pediatrics. And at one point,
every Democrat in the United States Senate supported
establishing these per-capita caps in a restructure of
Medicaid.
And your budget, as I understand it, further would allow
this per-capita cap to grow every year and you would tie it to
a measure of inflation that we might actually be able to keep
up with, the CPI-U.
And so the net effect of all that is that Medicaid spending
every year would grow. Medicaid spending per beneficiary would
grow. But it might just grow at a rate that we could afford,
that we could keep up with.
Now, I think it is also critical that you tie this to
giving States more flexibility to discover ever more efficient
and effective ways to deliver services. My colleague from Rhode
Island and I discussed just yesterday how many opportunities
there are to encourage the development of more efficient ways
to deliver health-care services.
So I am just wondering if you would elaborate a little bit
on how you envision this reform idea, how it would still work
for the people who need this program, as that is a necessary
criterion for anything that could possibly be considered
successful.
And if you would care to elaborate on how appropriate
setting--I know you touched on that a moment earlier--how that
might fit into this, I would welcome your thoughts.
Secretary Azar. Well, thank you, Senator.
Actually, the President's budget goes exactly along the
lines of the concerns and the solutions that you just
expressed. And it adds into it, also helping to fix the
concerns that we have around the individual marketplace. So it
changes Medicaid to allow for these per-capita grants to the
States that then they would have tremendous flexibility with to
run their Medicaid program. They would have the skin in the
game to run that program, but within a
budget.
And it would combine money in a $1.2-trillion program out
to the States that would allow for coverage of what we
currently call the Medicaid expansion folks as well as the
individual markets--so money that could be used as States
determine to try to create really effective mechanisms to
provide affordable, flexible, tailored insurance for
individuals in their State that would still have protections
for pre-existing conditions, maternal care, newborn care, et
cetera.
And so that is what actually, I think, is one of the really
constructive aspects of this budget: putting all of those
people together gives the State a real tool to create effective
risk pools that can create sustainable, affordable insurance in
the future.
And even core Medicaid would grow from $400 billion to $453
billion over 10 years. So even the core traditional Medicaid,
as you said, would grow because of inflation adjustment.
So I am excited to work with Congress on this as a possible
idea.
Senator Toomey. Thanks very much. I look forward to working
with you.
Thank you, Mr. Chairman.
Senator Portman [presiding]. Senator Whitehouse?
Senator Whitehouse. Well, thank you, Mr. Chairman.
Senator Portman. You looked lonely down there at the end of
the panel.
Senator Whitehouse. I know; it is a long way down here, and
I am afraid Secretary Azar is going to get a crick in his neck
that will require medical treatment from having to turn so far
to see me. I appreciate it.
When we met in my office, I showed you, I think, one of my
favorite charts, which is this one, which shows the CBO
estimates for total Federal heatlh-care expenditures. And the
red line along the top was CBO's predicted total Federal
health-care expenditures as of 2010.
The Affordable Care Act went into effect and time went on,
and it turned out that instead of that red line, what actually
happened was that green line. And then here in 2017, CBO did
another forecast. So from this dot forward, the green line here
is the newer forecast.
As you know from our budget process, we think in 10-year
increments in the budget process. So this green area is the 10-
year budget window from 2018 through 2027. And in that period,
we estimate that anticipated Federal health-care spending is
$3.3 trillion lower.
Now, I do not know how that happened. And I have a terrific
staff, but they are not like your staff. I think it should be a
matter of urgency to try to really think hard about why that
happened. And I hope that you will take a look, because if we
can find $3.3 trillion in Federal health-care savings without
inflicting pain on seniors and other beneficiaries, that is a
goal worth fighting for.
Now my sense of it, to go from the global scale down to
local, is it has a lot to do with delivery system reform and
payment reform. And I want to focus on the group that I
mentioned to you, I think, also in our meeting, the Coastal
Medical provider group, a primary care group in Rhode Island,
which was one of the early ACOs.
In the 5 years that they have been an ACO, they have saved
an average of $558 per patient per year. And they were not
high-flyers to begin with. In 2016, which is the year we have
the last complete data for, they were down $700 from their
previous measure, but they were down a thousand dollars from
the average. So it is not like they were one of the most
expensive provider groups; they were actually doing better than
average when they began, and they still saved an average of
$558 per patient per year.
And the patients could not be happier, I can tell you
first-hand, because those savings came through better service
and better care.
So it seems to me that if you take $558 per patient per
year and you spread that across the Federal health-care system,
you start to look at numbers like $3.3 trillion, that there is
a connection perhaps between the payment reforms that empowered
Coastal Medical to change their means of practice to save that
money and better serve their patients and that big estimate of
savings that we are seeing.
So I just want to flag that for you. We saved CMS $28
million with what the Coastal Medical people did. Twenty-eight
million dollars is not big bucks to you. You would probably
have to put a ``b'' instead of an ``m'' in that. But in small
Rhode Island from one provider group, to save 28 million bucks
is pretty significant. And you start adding in the multipliers
nationally, and I think there is a big gain here.
So I really want to work with you on this. I would urge
that the more that we talk about repealing Obamacare and having
those fights, fine if that is what you want to do. I do not
think that is good policy. I do not think that is good for the
recipients. I do not think that is good at all.
But what I do not want is for you to get so involved in
that fight that you will not work on the delivery system reform
piece, which I think is strongly bipartisan, is completely
beside the Obamacare wars. I do not think the people who want
to repeal and replace Obamacare the most want to go back and
repeal and replace the ACOs. They would have an explosion from
their home-State doctors and providers if they tried. So I
think this is a safe bipartisan place where real progress can
be made.
And I just want to take my time with you today to urge
that. And we are counting on a visit from you at some point to
meet Dr. Kurose and his Coastal Medical team up in Rhode
Island. We have other primary care physicians who are producing
similar results. And there is a lot of excitement and
satisfaction around that.
Secretary Azar. Well, if I could say, I totally agree about
the need for the value-based transformation. I think it is a
bipartisan issue that we can improve quality, we can decrease
costs, and we can make all of our programs more sustainable the
more we can do that.
Senator Whitehouse. And I will just give you fair warning,
but I am going to be harassing your folks at the staff level
for more information out of, like, the MACRA program, the MIPS
program, the Center for Medicare and Medicaid Innovation, all
those things. So I hope I will get good answers to my
questions.
Thank you.
Senator Portman. Senator Cantwell?
Senator Cantwell. Thank you.
Welcome, Secretary Azar.
You mentioned GME in the discussion with our colleagues.
How would the proposal encourage medical training in community
clinics where most physicians actually care for patients? And
how would it help the community clinics that are not under the
current cap?
Secretary Azar. So in terms of the--is this the community
health center program on GME that you are referring to,
Senator?
Senator Cantwell. Your proposal to change the structure, so
I am just trying to understand how would it address a couple of
things that are in the need area----
Secretary Azar. Right.
Senator Cantwell [continuing]. Which is community-based
clinic training and teaching hospitals that are not under the
current cap program.
Secretary Azar. So we are not proposing a change to the
community health center-based training programs that we have.
Those are separate. These are the Medicare, Medicaid, and then
the HRSA-run children's hospital programs on GME. And it puts
those together so that we do not operate under these artificial
1996-based caps and instead can really focus on the providers
that can help train our physicians and get them to both make
sure we are funding in the underserved specialties and areas
where we need physicians the most to make----
Senator Cantwell. Including primary care.
Secretary Azar. Absolutely, absolutely, as well as
underserved areas. How can we make sure that we are dedicating
the money to get training to physicians that are or will serve
in areas that are lacking in appropriate physician care.
Senator Cantwell. Okay. So if you are saying you are
willing to take on the big behemoth of east coast teaching
institutions having most of the capacity, I am all with you,
okay? Because I think with the divergence of medicine and where
we are going, we need to train physicians in all sorts of ways.
So I am all for that.
I do not like the fact that you have actually then cut the
program. Because from my estimation and what I see in the
Pacific Northwest and our shortage and the whole notion of
everybody having a medical home--and we are very excited about
P4 medicine, you know, predictive, preventive, personalized,
participatory, so that physicians are being trained on what you
would, I hope, describe as a way to drive value into the system
and get off of fee-for-service.
So what about that number? Why cut the program when I am
pretty sure we need probably, like, four or five times that
amount?
Secretary Azar. Well, overall, one of the philosophies that
we had was to try to move some of our programs, where right now
we are having Medicare carry the burden across the whole
health-care profession. As we looked at how can we make
Medicare be more sustainable, you know, our proposals actually
stretch out the life of the program for another 8 years as a
result of it. And they are tough choices, I will admit that.
But right now, we are having Medicare and Medicaid fund
graduate medical education that private insurers, commercial
people get the benefit of. And so there is a bit of
recalibrating in there, from the Federal taxpayer perspective
and Medicare and Medicaid, that transition to cut that back a
bit. As a result, I think it is $48 billion off of where we
stand right now over 10 years.
Senator Cantwell. But if we examined the shortage and the
need, you would not cry if Congress basically boosted that
number.
Secretary Azar. I would have to do so within our budget
targets. So if that goes up, something else has to go down.
That is the age-old challenge of these budgets.
Senator Cantwell. Okay. Well, please mark me down as very
counter to what Senator Toomey just said.
I believe that we have a growth in our Medicare and
Medicaid population because we have a burgeoning baby boomer
population that is reaching retirement. So the notion that
somehow people think that you should cut Medicaid and Medicare
or block-grant Medicaid as a way to save dollars just because
the population is growing, because of the demographics in our
population, I just think is wrongheaded.
Now, do I think there are efficiencies? You and I have had
a chance to talk about rebalancing as one of those. That is a
huge, huge savings. But the notion that somebody, after giving
away billions of dollars in tax breaks to big corporations,
would want to come here and say, now we have to block-grant
Medicaid as the only solution because it is growing in numbers
because of demographics is just--I just do not agree with it.
As my providers have told me--hospitals--they view the block-
granting proposal as nothing but a budget mechanism to cut
Medicaid.
So what they do support are the efficiencies that we are
driving in the Northwest and implementing those in the system.
You know, who doesn't want to stay at home and get long-term
care, as my colleague just mentioned? Who doesn't want to do
that? That is one-third the cost.
And so, if you could, comment on rebalancing from nursing
home care to community-based care as a big savings.
Secretary Azar. For some individuals, institutional nursing
home care meets their needs and is what they need. But I am, as
I said at my confirmation hearings, a firm supporter of the
notion of home-based care and these alternatives ways that I
believe can save us money.
I believe that for many it can be the best solution. It can
be the way to age with dignity. So I am very supportive and
very much want to work with you on ways we can generalize that
more across the United States.
Senator Cantwell. Well, I appreciate that. I am just very
concerned about some of my colleagues. We have been very
suspicious that this is what might happen now after the tax
bill passed, that people are going to go back to trying to
block-grant Medicaid. And just mark me down as very opposed.
And basically, a much better--we are already doing the job.
We are already doing the job of reducing the costs. So the
notion that somebody wants to create a budget mechanism to cut
people off Medicaid, my providers--the community services, the
children's hospitals--they are just not going to support it.
Thank you, Mr. Chairman.
Senator Portman. Senator Nelson?
Senator Nelson. Mr. Chairman, thank you for the kind
comments of several of you with regard to the slaughter of 17
students and teachers.
And Senator Rubio and I will be addressing this issue on
the floor of the Senate at noon today.
Mr. Secretary, I want you to know that you are a very
prepared individual. You are a fine person.
When you were here on your confirmation hearing, I asked
you several questions about Medicaid and Medicare. And you
sidestepped the questions about cuts. And now, coming forth
just a few weeks later with the budget, sure enough you have
about $1.4 trillion over 10 years in cuts to Medicaid. And that
is going to shift costs to the States, and the States will have
to plug the holes by raising taxes or cutting other parts of
the budget that they are responsible for, like education.
A State alternatively could choose to cut Medicaid benefits
or drop people from the program or cut payments to providers.
How would you expect a State, like Florida, that has a big
population to afford to cover the higher cost, Mr. Secretary?
Secretary Azar. So on Medicare, one thing that I would want
to emphasize is, you know, we are proposing to Congress to make
some changes there in how we do various payments to providers.
We are actually not suggesting changes that would impact the
beneficiary. The only ones that we have that would impact
beneficiaries are around drug pricing that we think would have
a very positive effect for beneficiaries in terms of their out-
of-pocket spending.
What we do is, the net change to Medicare that we propose,
it is $250 billion over 10 years, which is about a 2.8-percent
reduction. But just to give a sense of perspective, that takes
Medicare, which is growing at a 9.1-percent annual rate of
growth over that 10-year period, and changes that to an 8.5-
percent rate of growth.
Senator Nelson. Now, you are talking about Medicare.
Secretary Azar. Yes, in Medicare.
Senator Nelson. Well, my question was Medicaid. My question
was Medicaid.
Well, let me ask you then on Medicaid--for example,
veterans rely on Medicaid. Seventy percent of seniors in
nursing homes rely on Medicaid in Florida. So capping Medicaid
benefits could lead to States cutting these veterans' benefits
and the seniors'. What do you say to that?
Secretary Azar. Well, we believe that States are in the
best position to decide how to use the money to allocate among
various populations.
So for instance, the core Medicaid continues and actually
grows from $400 billion to $453 billion over the 10-year
period. And then we replace the Medicaid expansion and the
Affordable Care Act individual markets program with a $1.2-
trillion grant out to States that is very flexible, that
actually, on the expansion population, the States then do not
have that 10 percent of copayment Federal matching that they
would have to come up with to do that. So it actually gives
them flexibility, and it is sort of found money for them in
that sense.
Senator Nelson. That is what is typically the case with a
block-grant program or turning it over to the States.
My State is subject to hurricanes. Puerto Rico is subject
to hurricanes. We saw what has happened with Medicaid. It has
to respond to a public health emergency in a natural disaster.
And if your response is that, oh, further Medicaid funding
would be provided after a hurricane, the fact is that Congress
waited nearly 5 months before passing disaster aid for
hurricane victims in Florida--5 months--and 32 months after
Flint, Michigan's lead poisoning.
I know what your answer is--you have provided it--and we
have a significant difference of opinion.
Let me ask you this specific question. States faced $1.3
billion in higher Medicaid drug costs with the introduction of
the then-new hepatitis C drug Sovaldi in 2014. By cutting
Medicaid, are you suggesting that States should not cover these
kind of breakthrough treatments that cure chronic conditions
and come with high costs?
Secretary Azar. Absolutely not. In fact, the Sovaldi case
is a really good example of how all of our payment systems are
really not equipped to deal with what we would call curative
therapies. And that is an area I would look forward to working
with you and the committee on.
Our payment systems just cannot handle the notion of a
high-cost drug that we would pay for but get the benefit then
over the course of somebody's entire lifetime, from a single
year's expenditure. We need to be creative and we have to think
about ways all of our programs, including the commercial
marketplace, can handle, in the future, products like that.
Senator Nelson. Mr. Chairman, in closing I just want to
point out that in a growth State like your State, especially my
State that is growing at a thousand people a day, where we
educate the doctors and then we do not have the residency
programs, they end up going and doing their residency outside
of the State of Florida, and they usually stay and practice
there. And yet we have borne the cost of educating them.
And when you start cutting $48 billion over 10 years to the
graduate medical education payments, it is going to severely
hurt a State like ours that is a growth State that desperately
needs those residency programs to keep our doctors.
Senator Scott [presiding]. Senator Casey?
Senator Casey. Thank you, Mr. Chairman.
Mr. Secretary, good to be with you. I guess you have been
on the job about a month.
Secretary Azar. Fourteen days.
Senator Casey. Fourteen days; okay, less than a month. We
are grateful you are here.
And you and I have had discussions before, and certainly in
this setting about Medicaid. Our approaches to it differ, so I
want to raise it with you in the context not just of the
program, but also what I believe the administration has been
trying to do with regard to Medicaid, and secondly some kind of
Pennsylvania-specific challenges.
When I think about the program, both the core Medicaid and
then the expansion, I try to think about it in terms of the
people who are impacted.
In our State--there are lots of ways to describe it, but
more than 2 million people are covered. But also, you could
think about it with three numbers: 40, 50, 60. Forty percent of
the children in Pennsylvania, 50 percent of individuals with
disabilities in our State, and 60 percent of individuals who
are in fact nursing home residents. So that is, as you can
tell, a big, big number--or three big numbers.
In our State, we have 48 rural counties out of 67. And just
in those rural counties, 180,000 people got the benefit of
Medicaid expansion for their health care.
And then another way of looking at it is the horror, which
you know well--the horror of the opioid epidemic and the
overdoses that come with that as well as related overdoses.
Just in Pennsylvania, when we look at it between 2015 and 2016,
the overdose death rate is up some 37 percent. It is higher
actually, in the low 40s, I guess, for rural areas.
You are a native; you have roots in Cambria County. That is
one of those counties, among many, not among a few, where the
overdose death rate has gone way up: 94 deaths just in Cambria
County in 2016.
So I raise all that because Medicaid is critically
important to our State. It is especially important, the
Medicaid expansion part of the story, to deal with the opioid
crisis, because it is basically the
number-one payer for those who need treatment and services.
My real concern is twofold. Number one is that the
administration, I believe, in a little more than a year now,
has been sabotaging the Affordable Care Act, taking
administrative actions, doing everything it can to undermine
the Affordable Care Act in the absence of getting full repeal
by way of legislation. I would hope that you would put an end
to that.
And then secondly, there appears to be an effort in the
budget to use the budget process over time not only to cut
Medicaid dramatically, but to end the Medicaid expansion.
So I would ask you two questions. Number one is, will you
commit to ending the sabotage through the efforts of an agency
like yours?
And secondly, tell us about the impact of the budget on
Medicaid and, in particular, Medicaid expansion.
Secretary Azar. Yes, thank you, Senator.
On the first point, as we have talked about before, you
have my commitment that I and my department will work to make
health insurance as affordable as possible, have as much choice
for people and meet their needs as much as we can, and do so
faithfully within the law of whatever programs we have.
I am about making our programs work as best they can. And I
can tell you, the team around me has that same commitment to do
so.
Now, you and I will often disagree ideologically about what
might work and what will not work, our understanding about
economics or insurance benefits and how they will function. Our
desire is the same. I want as many people as possible, as do
you, to have access to affordable health insurance and to help
those who cannot afford it get access within our fiscal
constraints. So I think we certainly share those goals.
On the second point of Medicaid----
Senator Casey. Just parenthetically to add, I hope your
goal also would be that no one loses coverage who is covered by
Medicaid now.
Secretary Azar. So our goal is to make sure people have
access to affordable insurance and that they have a choice of
those packages.
On Medicaid, you actually mentioned some populations that I
do care a lot about--and we care about all--but children, the
disabled, the elderly in nursing homes. One of the really odd
incentives of the way the expansion was done is, it created a
perverse incentive, because of the differential matching from
the Federal Government, to actually prioritize the expansion to
able-bodied, new-entry populations, over those traditional
Medicaid populations.
So I am actually concerned, and I hope that, through our
proposals and our work together, we can reorient Medicaid to
fix a lot of those counter-incentives there that are in what we
might call the traditional Medicaid populations. So I do worry
about that group.
Senator Casey. Well, I just hope that we are not at a point
where we are talking about access, that we are talking about
ensuring that people covered by Medicaid do not lose it, all
those folks who have a disability, all the children, all the
folks in nursing homes.
Let me just, Mr. Chairman, with your indulgence, have one
more minute.
You probably have not seen this yet because it was just
sent yesterday, but I have a letter that I have sent you about
what States are applying for in their waivers. I will just read
one sentence from the letter I sent you. I hope you will take a
close look at this and provide a response.
At the end of the first paragraph, I say, ``I urge you to
reject Medicaid waiver applications from States that would
further three things: limit, restrict, or block Americans'
guaranteed access to affordable coverage.''
So I just hope you take a close look at that and provide a
response.
Secretary Azar. I will. Thank you.
Senator Casey. Thank you.
Senator Cassidy [presiding]. Hi, Mr. Azar.
You know, as one of the authors of Graham-Cassidy--I was
not intending to, but I will at least open up with some
comments regarding that.
And as I have heard some of my Democratic colleagues speak
to this, it becomes clear that what I suspected is true, that
they really do not understand the legislation. Because what we
have been speaking to, Graham-Cassidy addressed.
For example, one of my colleagues said that there has been
a problem after natural disasters, that there were not dollars
made immediately available for Medicaid for those who were
impoverished because of the disaster. And of course, under
Graham-
Cassidy, we have either every 3 or 6 months a registration in
which the State would say, hey, these people are now eligible
so, therefore, we get money for them. And they would get money
on a risk-adjusted, per-person enrollment. And so indeed, the
State only gets money if they enroll somebody, aligning the
incentive to enroll.
It acknowledges something, which I have to say I was a
little surprised others are now acknowledging who were in the
Obama administration, which is that the status quo is not
working.
I just got an email from Bill Frist, if you will, one of
those emails everyone gets, the United States of Care, which is
a group of people including Andy Slavitt, Melanie Bella, Pat
Conway, Tom Daschle, a constellation of Democrats who were
concerned with or in the Obama administration--either nominated
or who actually served--saying that the status quo is not
working.
So it is interesting, people are defending a status quo
which is not working. And I would digress just a minute more to
speak about how it is not.
One, States in the individual market, if they are not
getting a subsidy, can no longer afford insurance. Folks in
Louisiana are paying as much as $40,000 a year for premiums.
Get that, $40,000 a year. Now, people like Andy Slavitt and
Melanie Bella are acknowledging that, but some folks up here
are not. This is not sustainable.
It is not sustainable for States. Oregon is having to pass
new taxes in order to pay for the State's share of Medicaid
expansion. I heard one person say who opposed it, she said,
hmm, we are excluding unions, but we are taxing individuals and
small businesses. They are the only ones without lobbyists. And
so those without lobbyists will pay the tax for everyone else.
Oregon is having to pass new taxes to afford the Medicaid
expansion.
So what Graham-Cassidy did is, it told States that if you
cannot afford the match, you do not have to put it up.
One other thing I will note. Senator Nelson from Florida
was concerned about the impact on his State. Under Graham-
Cassidy, Florida would have gotten $15 billion more than under
current law to care for those who are poor or poorly insured in
their State.
Why somebody would oppose--as a doctor who took care of the
uninsured for 25 years, why somebody would oppose $15 billion
more over 10 years to care for the poorly insured in their
State, I have no clue, no clue whatsoever, except a dogged
determination to support the status quo.
That said, now I will get to my question.
I had an intriguing conversation yesterday--I do not know
if it is true, but I would like your thoughts--that Medicaid
best price actually drives up the cost of medicines for
everybody else. Medicaid best price was put into place--only
one out of 11 Americans was covered by Medicaid, but now one
out of four Americans are.
By the way, this is not because of demographics, as
suggested earlier, because this is not age-based. It is rather
because of an expansion of Medicaid under Obamacare.
And just one-quarter of the population getting the best
price has a hydraulic effect, which, sure, if you lower the
price here--it does for Medicaid, but in turn, it raises the
costs for everybody else.
What are your thoughts about that?
Secretary Azar. Senator, I think that is a very perceptive
observation. And I think it is something that we have to be
careful of, not just when we talk about drug pricing, but when
we talk about our hospital physician services.
With Medicare and Medicaid, if we end up underpaying what
sort of natural market forces would lead to, we will see higher
rates in the commercial space, for instance, and we end up
having this, it is called the cross-subsidization problem, with
Medicare and Medicaid.
Senator Cassidy. I get that. Specifically on drug costs,
though--because that was obviously a major emphasis of the
Obama administration--does Medicaid pricing increase that cost?
Secretary Azar. If we underpay in Medicaid, it will
increase costs elsewhere; it will increase pricing elsewhere.
Senator Cassidy. Then let me ask you one more thing.
Related to that, I was also told some States have carved out
the pharmacy benefit from their managed-care contracts, and
carving out that allows them to get the rebates. And they are
preferentially going to name-brand drugs, the higher-priced
drug, because it increases their rebate. As long as the Federal
taxpayer is paying 90 percent in the Medicaid expansion, it is
a good deal for them. Sure, it increases what the Federal
taxpayer pays, but the State gets more in rebate. Have you
observed that?
Secretary Azar. I have seen that on the carve-outs. And
there is a bit of a perverse incentive in the Medicaid system
to carry branded drugs because the rebates are so high compared
to generic drugs. And so from the program perspective, it can
actually be beneficial to the State Medicaid program to receive
the branded rebate as opposed to paying the reimbursement to
the pharmacy, which is acquiring a generic drug at quite a low
price. It is an oddity in the system.
Senator Cassidy. So we have misaligned incentives, do we
not?
Secretary Azar. Yes. We need to work on that.
Senator Cassidy. Yes, and what I will say, as I close, is
that
Graham-Cassidy aligns incentives. It does not incentivize
States to do that sort of trickery, to hose, if you will, the
Federal taxpayer in order to make money for the general fund of
the State, but frankly, ultimately driving up costs for
everybody else.
Thank you. I may have a second round.
Senator Stabenow?
Senator Stabenow. Well, thank you very much, Mr. Chairman.
I do not know where to start. I greatly respect my
colleague who just spoke. We have such a different view of the
world in terms of health care. You know, it is not a commodity;
I think it ought to be a basic human right. We all get sick. It
is not like the way you can choose to buy a car or not buy a
car. And I would love everybody to buy a new car made in
Michigan, but if you do not, you know, it is not going to
affect everybody else's rates going up and so on. But health
care is just very different, because we are all human and we
all get sick.
So let me just say one other thing I had not originally
intended, which is when folks say ``status quo'' now, this is
the new status quo under the Trump administration where there
are no cost-
sharing payments, no reinsurance, no requirements that people
share in their own health care in terms of responsibility.
So we are back to junk plans, people buying insurance that
may not cover basics and they do not know it until they get
sick, and folks walking into emergency rooms without insurance
and everybody else is going to pay for it. That is what we
called uncompensated care. That is what it used to be.
Because of the Affordable Care Act and people being
involved and responsible in terms of being able to pay for
their health insurance, the State of Michigan actually saved
hundreds of millions of dollars last year, and group market
rates were flattened for a lot of small businesses in Michigan,
and so on.
So a very different view of the world; I look forward to
debating that as we go on.
I do want to start with something, though, a positive that
I have seen in the budget. A lot of things I disagree with
certainly, certainly as it relates to the view on Medicaid and
what that means for seniors and families and children in
Michigan when we see these kinds of cuts.
But part of the recent budget agreement, the caps
agreement, included a much-needed $6-billion investment over 2
years in combating the opioid crisis and mental illness, which
is a major focus for me and has been.
And I want to acknowledge the fact that in the budget, the
HHS budget actually recommends expanding what Senator Blunt and
I have been working on as certified behavioral health clinics
and being able to do with behavioral health what we have done
for health centers.
And so, one of my big frustrations has been the fact that
we literally pay for service, we pay providers that provide
physical health care, but for mental health or addiction
services we do something we would never do, which is, you know,
we provide service until the grant runs out.
So I cannot imagine, if somebody needs heart surgery, that
the doctor would say, gosh, I would love to provide your
surgery, but the grant ran out. And we do that every day for
mental illness and opioid addiction.
And we know this is part of multiple things that need to
happen around violence and even what we saw yesterday. So this
is, I believe, an all-hands-on-deck moment.
So I want to first say that I appreciate that that is in
the budget, that we have begun. Eight States have been fully
funded as demonstrations across the country: Minnesota,
Missouri, New Jersey, New York, Nevada, Oklahoma, Oregon, and
Pennsylvania. We are working to expand that.
I would like very much to work with you as we move forward
to expand comprehensive services in the community, including
24-hour psychiatric services and facilities so people are not
going either to the emergency room or to the jail, which is
exactly what is happening for folks right now. So I look
forward to working with you on that.
I am concerned, though, that if we go on to talk about
opioids and mental health, that when we look at the change, the
cuts in Medicaid, this time about $1.4 trillion--and we can
talk about grants again, I mean the sort of big grants rather
than small grants--I am very concerned that the Medicaid cuts
would really make it more difficult for us in Michigan and
across the country to fight the opioid crisis as well as expand
what we need to do in mental health.
In fact, expanding what we call Healthy Michigan--if we
were to end Healthy Michigan, the addiction treatment gap would
increase by 50 percent. And substance abuse disorders and
mental health funding would be cut over $5 billion across the
country.
So has HHS modeled the effect of the Medicaid cuts on
individuals with substance abuse or mental health disorders?
Secretary Azar. Not to my knowledge, but certainly the
points you raise are important concerns that we would want to
work with in any legislative package around Medicaid reform,
obviously ensuring that what we are doing there provides
adequate resourcing around substance abuse treatment.
Senator Stabenow. Do you believe that mental health and
substance abuse treatments should be included in all health-
care plans?
Secretary Azar. I believe so, but I think mental health--I
think our mental health parity requirements would provide that.
I would need to look at the statutes, but I believe that is
part of that.
Senator Stabenow. We do have mental health parity; I
authored the language in the ACA to make sure that this was
included in everything, because it had not been happening up
until then. And so it is part of the essential benefits package
that would, as I understand it, be eliminated under the kind of
approach, the large block-grant approach, that is being talked
about. So I am very concerned about that.
What would you suggest, I mean, if people lose coverage
under the budget? If these Medicaid cuts go through, what would
you recommend to the State of Michigan and those right now who
desperately need services?
Secretary Azar. So of course, the challenge we have now is
that, for 28 million Americans, what we have is simply not
affordable for them. As Senator Cassidy was speaking about
earlier, the status quo is leaving tens of millions out through
unaffordable options.
So we want to work together to try to see, what can we do
to build stable, good, affordable, flexible, tailored options
for individuals out there? Because that status quo is not
working for as many people as it ought to.
Senator Stabenow. And I would just close, Mr. Chairman, by
saying it has been a year and a half under a new administration
with a very aggressive approach, some would say a war, on
health care, and multiple changes that are raising costs. And
so the status quo today is a new status quo based on actions
that have been done and ramifications that will continue to be
felt as new insurance rates come out based on what has been
done as part of the tax bill as well as other decisions to roll
back efforts to keep health care affordable.
And I do want to say also, at some point we can debate how
Medicaid pricing is the reason drug companies are dramatically
raising their prices. If that was part of what you were saying
in terms of the pricing, I would have major concerns about
that.
Secretary Azar. I certainly did not mean to say that that
is the reason. Certainly, it is an economic incentive. And what
we have to do in addressing drug pricing is, how do we flip
those incentives around across the board?
Senator Stabenow. I understand.
Thank you, Mr. Chairman.
Senator Cassidy. Yes.
Senator Menendez?
Senator Menendez. Thank you, Mr. Chairman.
Mr. Secretary, welcome.
In New Jersey, one in 41 children is diagnosed as having
autism spectrum disorder, much higher than the national average
of one in 68. Is it true that the fiscal year 2019 budget
zeroes out a program that is of great interest to those in the
autism community, the Autism CARES Act program in HRSA?
Secretary Azar. I do not know that program in particular,
Senator. As you know, I am 14 days into this. And so I know we
have several programs that, as part of just prioritizing
direct-care delivery, direct-service delivery and underserved
care-service delivery, there are programs that simply we had to
recommend not funding because of the tradeoffs----
Senator Menendez. Well, let me help you out. You may be on
the job only 14 days. I have been here a little longer. It is
zero in the budget.
And in fiscal year 2018, the congressional justification
was that the Department believed that the same services could
be provided to the States through the Maternal and Child Health
Services Block Grant. Do you know if that is the same reasoning
today?
Secretary Azar. As I said, the challenge that we have is,
we are prioritizing direct-care service delivery, not----
Senator Menendez. I am asking a specific question. Is it
your view that the congressional justification in fiscal year
2018 that the services can be provided by States through the
Maternal and Child Health Services Block Grant is the reason
that you have zero in this budget?
Secretary Azar. No. I do not know if that is the reason why
the budget was prepared with that program zeroed out. It more
likely is the fact that if it is not a direct-care service
delivery program or was viewed as being less effective than
other expenditures of money in a scarce fiscal environment,
tough choices had to be made.
Senator Menendez. Well, yes. The autism community does not
need those tough choices. They have a tough life as it is
already, with their children who are trying to fulfill their
God-given capabilities and families that are enormously
challenged with that reality.
Well, I have a feeling that that is the justification. The
problem with that is that you also cut funding for the Maternal
and Child Health Services Block Grants as well. So I do not
know how--explain to me how you think that States are best
positioned to replace the education, training, and research
authorized by the Autism CARES Act with reduced funding for the
programs that you claim replicate HRSA's progress?
Secretary Azar. I did not claim that. What I have told you
is that we prioritized our direct care-delivery programs, and
these programs that are back-door support programs we had to
deprioritize against others or those direct service-delivery
programs would have been cut.
Senator Menendez. I can assure you, Mr. Secretary, they are
not back-door to these communities; they are front-door.
Secretary Azar. No, but it is actual direct care, providing
clinical care and service to individuals, is what we had to
prioritize in the budget to----
Senator Menendez. Well, let me ask you something. How is it
when I wrote QFRs in your confirmation, I specifically asked
you about working with me on reauthorizing the Autism CARES Act
and you provided a vague answer saying you were fully committed
to implementing the laws passed by Congress and improving
access in disadvantaged communities. That was your answer.
So explain to me, how does zero-out funding to implement a
law passed by Congress and signed into law by the President
allow you to do that?
Secretary Azar. In a budget--you are a member of the Senate
and part of setting the targets that we have to operate within.
And we operate within that and have to propose a budget. If you
have a tradeoff of another program you are willing to defund--
--
Senator Menendez. You are not fulfilling the law. The law
is clear.
Secretary Azar. There is not limitless money, Senator. I am
sorry.
Senator Menendez. I know. That is why we should not have
spent $1.5 trillion on tax cuts to the wealthiest people in
this country. Maybe we would not be having this debate now. And
maybe we would not be having this debate if we were not
spending tons of money in other things outside of our health-
care system.
But it is simply inexcusable to take a community that is so
challenged, that the law specifically directs the Department to
engage in, and then you zero that out. And how do you think
eliminating the Medicaid disproportionate share payments at the
same time you strip Medicaid funding to States--are hospitals
going to be able to deal with that?
Secretary Azar. That is a continuation of the Medicare
disproportionate share hospital payment reductions that are
part of the Affordable Care Act. And we continue to scale down
there as we have many other programs.
Senator Menendez. It is not a scale-down, it is an
elimination.
Secretary Azar. And we will be putting out $1.2 trillion in
the budget of the America's Health Care Grant program so that
we have alternative insurance vehicles that should be the
alternative, as with the Affordable Care Act, to
disproportionate share hospital subsidies.
Senator Menendez. Mr. Secretary, it is not a scaling down.
It is an elimination--elimination, zero, cero, nada. That is
not a scaling down. And I expect you to enforce the law. And
the law on autism is very clear. And I am going to challenge
this administration to respect the law and enforce it.
Thank you, Mr. Chairman.
Senator Cassidy. Senator Brown?
Senator Brown. Thanks, Mr. Chairman.
Mr. Secretary, welcome.
I concur with Senator Menendez and what he is saying about
the trillion-and-a-half-dollar tax cut, and then how you are
just taking away so much for so many people who are a whole lot
less privileged than CEOs and Cabinet Secretaries and members
of the Senate, starting about January 20th a year ago, going
after the health care law.
And you know, I mean the Republican approach of this
Congress has been to increase the deficit by billions of
dollars. You know, this is the party that cares so much about
deficits when there are Democratic Presidents, but not so much
now--tax relief to the richest individuals, and then you cut
programs that millions of working families rely on to pay for
those tax cuts. I mean, it is just morally reprehensible. I
would assume you think the same thing.
A few months ago, Mr. Secretary, the first lady and
Kellyanne Conway visited a facility in West Virginia, Lily's
Place, which provides treatment for babies born with neonatal
abstinence syndrome. We have a similar facility in Kettering,
OH right outside Dayton called Brigid's Path that is focused on
keeping families together and helping both moms and babies
overcome addiction and withdrawal.
I introduced a bill last year with a number of members of
this committee, including my colleague from Ohio, called the
CRIB Act. Our legislation would provide State Medicaid programs
with flexibility to reimburse residential pediatric recovery
facilities like Brigid's Path.
I understand yesterday you all announced it is approved,
you have approved reimbursement for this type of residential
treatment service in West Virginia. We should not have to do
this State by State. I would like to ask for your commitment,
Mr. Secretary, to ensure that babies in Ohio in a place like
Kettering have the same opportunities as those in West
Virginia, whether it be through administrative action or
through helping the five of us pass the CRIB Act. Would you
commit to doing that?
Secretary Azar. Senator, I do not know that particular
waiver approval, but I am happy to work with you and Governor
Kasich if that is a request that they have, to make sure it
goes through our process as expeditiously as possible if it
complies with our waiver requirements. Absolutely, it seems a
very noble purpose to me.
Senator Brown. Okay, thank you.
Another issue. I appreciate the efforts you have put in to
proposing some initiatives that would help lower the cost of
prescription drugs in Medicare and Medicaid as part of this
year's budget proposal. Some of them I agree with and support.
Can you, as you do this, point to a single proposal in this
budget that would force a pharmaceutical company to lower the
list price of a drug in a way where all Americans who rely on
that drug will benefit?
Secretary Azar. So actually, one of the things we are
trying to do in the budget proposal is to create the incentives
so that it will put downward pressure on the list price of
drugs. So one of the things that we are recommending, in that
catastrophic coverage in Part D, is changing the incentive
structure.
Right now, the government is on the hook for most of the
cost once a senior citizen gets to catastrophic coverage. We
propose to progressively switch that so that the insurer is on
the hook for that and will then have even more incentive to
fight against the branded drug companies to keep those list
prices down, as opposed to now where they have a lot of
incentive for those higher prices, to just drive into the
catastrophic coverage and offload that expense onto us. So that
is certainly one of them.
And this is just one step in working on the issue of drug
pricing. And this is the one that is in the context of the
budget and Medicare and Medicaid, many more things that we are
working on. And if you have ideas around list price, ways that
we can reverse those incentives on list, I would love to work
with you and hear them, because it is the most difficult
challenge as opposed to even net pricing.
Senator Brown. And I appreciate that, but it sounds to me
like relying on a middleman here--and none of these policies
actually goes after the pharmaceutical industry, your former
employers, the folks who set these prices in the first place.
None of these policies guarantees--I understand you work with
insurance companies to sort of incent them to push, but none of
these policies guarantees lower drug prices for individuals who
rely on drugs like insulin, who are not insured by Medicare or
Medicaid. Nothing that we can see so far will help individuals
who pay for drugs out of pocket and cannot benefit from a
rebate policy.
It seems the administration--an administration that
promised that it would make the drug companies pay, until the
President met with the drug company executives and came out
singing a very different song as he met with his CEO friends--
left out of its budget proposal any policy that would directly
target big pharma and hold them responsible for the prices they
set.
Rely on insurance companies, to be sure, but we need to do
better. We are ready to partner with the President. I note
Ranking Member Wyden from Oregon is willing to do that, to go
after pharmaceutical companies in ways that will not reduce
patient choice. I hope you will take us up on our willingness
and join us.
Secretary Azar. Well, I hope I will have the chance to meet
with you to brief you on our budget proposals, because in fact
there is a suite of proposals here that will dramatically
reduce senior citizens' out-of-pocket costs, which I would be
happy to walk you through.
In addition, in Part B, we are proposing an inflation cap
on list prices. So if you increase the price above inflation,
just like in Medicaid, the pharma company, there will be lower
reimbursement paid out through our Medicare Part B program. But
we have a whole suite that we believe will dramatically reduce
senior citizens' out-of-pocket costs when they walk into the
pharmacy for medicines and get their Part D drugs, which are
the physician-administered drugs.
And I would love to brief you and talk with you about that,
because I am quite proud--I think there is a lot that you
actually could get behind on this.
Senator Brown. That is good news, but that is Medicare.
What about everyone else? So we have lots to do.
Senator Cassidy. Senator Thune?
Senator Thune. Thank you, Mr. Chairman.
Mr. Secretary, thank you for being here today. I appreciate
the priorities you have laid out in the President's budget,
particularly the emphasis on addressing drug prices, opioids,
and reducing regulatory burdens.
And while it is not the jurisdiction of this committee, I
also want to point out that I appreciate the attention to the
Indian Health Service in your written testimony today.
And on that topic, it was great to see the proposed 8-
percent increase in funding for IHS and resources to help
facilities in the Great Plains area meet CMS's quality and
accreditation standards.
However, as I have said before, money alone cannot solve
those problems. And one thing I had hoped to see included in
the budget was a legislative proposal signaling the
administration's interest in working to reform the IHS
structurally, like the Restoring Accountability in the IHS Act
that we have discussed previously.
So my question is, is that legislative solution something
that the administration will continue to work with us on?
Secretary Azar. We will certainly work with you on that. I
have not been able to get deep into it yet myself, but I am
happy to work with you on that, Senator.
Senator Thune. Thank you.
As you recall, we talked at your confirmation hearing about
the pending interim final rule regarding the application of
competitive bidding rates in non-competitively bid areas for
durable medical equipment. And I realize you have only been
sworn in for a couple weeks, so I get that.
But I wanted to ask you to please provide a status update
on when that rule will be finalized and whether the President's
budget proposal on competitive bidding, which projects more
than $6 billion in savings, takes that rule into account.
Secretary Azar. I will be happy to do that. The proposal
that we have in the budget, I hope is sensitive to the
concerns. I am very focused on the concern of rural providers'
and rural citizens' access to durable medical equipment. And so
the proposal we have would have the DME bidding be targeted
towards the area in which it is bid, so rural, and also so that
the winners get compensated at what their bid was as opposed to
being pulled down to a median if you happen to win and be
entered into the process.
But I am concerned about access and affordability in rural
areas through the DME program. So I hope that, as we work on
legislative approaches here, that we can solve that problem.
Senator Thune. Okay, good. Well, that is what we like. The
issues you talked about are where we would like to see you
focus with respect to that issue.
While it was listed as having no budget impact, I am
encouraged by CMS's proposal to reduce reporting burdens and
eliminate low-value metrics of meaningful use.
I do think that there will be a positive impact on health-
care providers. And I have been working with others here on the
Finance Committee to address these challenges for many years.
In fact, one of the provisions to eliminate the requirement
for meaningful use standards to become more stringent over time
was just signed into law as part of the budget deal. Is this
change incorporated into your budget proposal? And what other
reforms do you expect to make in this space?
Secretary Azar. Senator, I do not know if the most recent
change on meaningful use has made it in. The budget is a rather
fast-
moving target, so I do not know if that was fully integrated
yet into that.
But the other aspect that you mentioned I am very proud of,
which is for physicians who are being paid under MACRA, the
incentive program for quality, what we are doing is taking a
whole host of physicians who not only will have reduced
reporting burdens, but maybe none under the MIPS part of that
program, where we would be able to independently look at data
ourselves to decide their compliance with the quality programs
rather than their having to even report anything. So I think it
is one of many significant regulatory burden relief efforts
that Administrator Seema Verma has been taking charge of.
Senator Thune. Okay. And so with respect to that as sort of
a follow-on, could you speak to or at least address the sort of
current all-or-nothing approach to meaningful use? You kind of
spoke to that a little bit in your answer.
Secretary Azar. Yes. So I want to delve more into the
current status of where we stand on meaningful use. For me, the
important thing is becoming not so much meaningful use but
actual interoperability. And it is not going to do us a lot of
good if we have everybody electrified and have simply converted
our records to electric format if they do not actually
communicate with each other.
Senator Thune. Right.
Secretary Azar. So my energies and focus are, how do we now
get those connected to each other? But I will be happy to get
back to you, if that is okay, on your meaningful use question.
I just want to make sure I answer that accurately for you.
Senator Thune. Got it. Okay. Thank you. We will look
forward to continuing to work with you on that and with your
team.
Mr. Chairman, thank you.
Senator Cassidy. Senator Scott?
Senator Scott. Thank you, Mr. Secretary. Thank you for
being here this morning.
I know that you have had a number of questions on opioids
and the abuse and the challenges that we face as a Nation. And
I will ask you another question that you may have answered in a
different way before.
The last time you and I had an opportunity to discuss
opioids was at your first hearing. Congratulations and
condolences as well.
We talked about the importance of addressing the growing
opioid abuse epidemic from the bottom up, from the local level.
In South Carolina, Horry County is a place where a lot of
folks come to vacation, the Myrtle Beach area, but it is also
the place where we have seen the highest opioid-related
overdoses in the State. More than a hundred folks have lost
their lives in Horry County, accounting for 16 percent of the
State's challenges on the opioid epidemic front.
In your response to my questions on the crisis, you
mentioned that there is not a one-size-fits-all approach to
opioid treatment and prevention programs. How does your
department plan to use the $6 billion to customize and to
create more flexibility for local jurisdictions to play a more
important role in addressing the challenges that we see?
Secretary Azar. So just by way of example, the $3 billion
initially that we have allocated in the 2019 funding that we
are proposing, we would have $1 billion in grants under the
State Targeted Response grant program, which is very flexible
for the States to be able to customize and target that money.
That is a doubling of the current funding of $500 million a
year.
So that is very flexible, and so the State of South
Carolina, for instance, could really work with communities on
coming up with community-based, very customized approaches.
Another program that we are really interested in is, at
HRSA we are going to be investing $150 million in rural
substance abuse programs to try to develop novel methods of
care and of treatment for addiction and dependence in more
rural communities because of the access issues and distribution
of resource issues, to focus there in the rural communities.
Senator Scott. Yes.
Secretary Azar. And then another $400 million of that goes
to quality incentive work with our community health centers,
again, localized.
Senator Scott. Excellent. Thank you very much.
I am not sure that you have answered a question on wellness
so far during this hearing.
I spent, as you may recall, a few years in the insurance
industry. And one of the things that we have done over the last
year is talk about the access to health insurance; we have
talked about the cost of health insurance. We have talked about
who is insured, who is not insured, who is underinsured. We
have talked about a lot of topics around the exploding costs of
health insurance.
But the underlying driver is obviously the exploding costs
of health care. And unless we spend more time talking about the
explosive costs of health care, we will not be able to address
the actual challenge of the explosive costs of health
insurance.
And many of the issues that we face from a health-care cost
perspective--and the costs continue to rise--are around issues
of the morbidities of diabetes and obesity as well as the
challenges around cancer. These are explosive drivers of our
health-care costs.
When it comes to encouraging healthy habits so that we can
prevent some of the challenges that we see, that too requires a
local, bottom-up approach to creating more flexibility in the
alternatives.
I know in South Carolina we have a unique population. Some
of the programs that we see that are very effective in the
State are programs that work with nonprofits, whether it is
churches or synagogues, whether it is the ability to create
wellness programs at your local community nonprofit, or
planting community gardens. We have found that these programs
have been quite successful in South Carolina.
What do you plan to do this year to empower and encourage
States to invest in this space of wellness programs so that we
can attempt to get control of future costs, perhaps before they
happen?
Secretary Azar. So, Senator Scott, I think you have put
your finger on some of the important drivers of health-care
costs in our system, which are the social and behavioral
determinants of health. And I am very committed in that space
that we help to provide alternatives to minimize both medical
spend and health-care spend if we can do so in alternative
ways.
But also, on the behavioral side, can we create adequate
incentives or create flexibility for adequate incentives on the
behavioral side?
Actually, when I was at HHS in the 2000s, we were involved
in helping to create greater flexibility through HIPAA, the
statute to allow employers and insurance plans to create
greater financial incentives for healthy behaviors. If you have
other ideas of things that we could work to address, barriers
where our programs or authorities are in the way, I would love
to learn more about that, because I think it can be very
constructive.
Senator Scott. Certainly, I look forward to having that
conversation with you perhaps at another time. There have been
a number of programs that focus on healthy alternatives and how
you avoid what it is that we find to be incredibly tasty but
may not long-term be very helpful for your arteries. So I look
forward to having that conversation.
Secretary Azar. Thank you.
Senator Scott. Thank you, Mr. Chairman.
Senator Cassidy. Mr. Secretary, we have these two folks, me
and the ranking member, to ask another set of questions, and
then you will be through.
Let me first observe--not related to you, but someone
earlier criticized the Tax Cuts and Jobs Act provision which
does not allow the deduction of State and local taxes. Excuse
me, they were criticizing the Tax Cuts and Jobs Act as a
benefit for the upper-income. But the same Senators who say
that also complain about the SALT tax provision. They complain
about that.
Well, the SALT tax provision disproportionately affects the
wealthy. So on the one hand, you cannot have the wealthy
getting taxed more and on the other hand having a bill which
benefits the wealthy. But that is one of the incongruities of
our debates up here.
Secondly, there were a couple of assertions about Graham-
Cassidy that I have to address.
One, we, under Graham-Cassidy, maintained the mental health
benefit. We encouraged provisions such as auto-enrollment,
which could increase enrollment relative to now. We allowed
pooling of the individual market and the Medicaid pools, which
I am told would lower premiums by 20 percent, therefore making
insurance more affordable.
Again, folks on the left just do not seem to care about
those
middle-class families paying $40,000 a year.
And I will say, the criticism of the status quo, the status
quo still includes the individual mandate. And I suppose all of
this is the reason that folks, like Andy Slavitt, Tom Daschle,
and Melanie Bella, are saying that we need to do something
different.
Now, to another question. You spoke earlier of the Part D
provision, I presume decreasing the out-of-pocket exposure for
a beneficiary. And I gather that is by increasing the mandates
pharmaceutical companies must pay. My concern is that these
rebates that they pay count towards the true out-of-pocket
cost. And so, if you will, it is pushing the senior more
rapidly into the catastrophic portion of the Medicare Part D
benefit, which means that the taxpayer is paying even more.
The other thing I have observed, and I think I have read
this as well, is that when drug companies have to increase the
rebate, they just increase the cost of the drug.
So if we are, going back to our earlier discussion, forcing
them to increase the cost of the drug if you are not on
Medicare and you are not on Medicaid, you are going to pay a
lot more. And if we are counting these rebates towards the true
out-of-pocket cost, then we are pushing people up into that
provision, the catastrophic coverage where the taxpayer is
paying more.
I am not sure I am seeing this as a great benefit for
society writ large. What are your comments, please?
Secretary Azar. So the proposals that we have in the budget
around drug pricing, really I think we need to look at them as
a holistic set of all five parts there, because they work
together in a related way.
First, we would require that the rebates that the drug
companies are paying the drug plans be offered to the senior
citizen, at least one-third of that benefit, when they arrive
at the pharmacy, at point of sale--so a real out-of-pocket
benefit for them on that.
Second, we would have a genuine out-of-pocket maximum in
Part D for the first time. Right now, even in catastrophic
coverage, the senior citizen has to pay 5 percent, which can be
a lot of money. That would now be zero.
We also would fix this incentive we have where the Federal
Government is picking up that catastrophic care to the tune of
80 percent and reverse that so that the insurance company pays
80 percent and we pay 20 in the future.
We would also have--to that true out-of-pocket-cost
question that you raised, Senator, we propose that we would not
count the coverage gap discount payments from the drug
companies against true out-of-pocket costs, again creating a
continued incentive for the plans to not hustle the beneficiary
to catastrophic, to unload them on us, and also to have higher
list prices to get them there.
And finally, for our low-income-subsidy seniors, free
generics.
Senator Cassidy. All that sounds fantastic. I am glad you
explained it. And as a package, it sounds better. But let us go
back to what we discussed in my earlier questioning about the
hydraulic effect upon those who are not on Medicare or
Medicaid.
Now they have Medicare and Medicaid, both of which are
getting large rebates and/or discounted pricing and/or taxes
upon the cost of the drug going back to the State, causing the
drug company to raise the price to make that up. Is that going
to increase the price that the person who is either paying cash
through a small-business group plan or through the individual
market pays for their drug?
Secretary Azar. I do not believe the mechanisms that we are
proposing would have that effect, because what we are trying to
get at in particular is the out-of-pocket to the patient, which
is much more a matter between them, the insurance company, and
us. And so we want to get that out-of-pocket from the patient
down and then reverse the incentives on list price. The net
could even remain the same to the program level.
I do hope that we will keep good incentives to keep driving
our net prices down, as we do quite effectively. It is that
list price that we have to reverse. As you have said, every
incentive towards that higher list price, we have to try to
flip those incentives backwards on that.
And this is a starting point on that, and I am going to
keep working with you all to come up with other ideas that can
either contain or actually pull back those list prices, create
financial incentives, create market forces that will actually
get those list prices down.
Senator Cassidy. I was following you on everything up until
the last 45 seconds, but we will have a follow-up conversation
on that.
Senator Wyden?
Senator Wyden. Thank you, Mr. Chairman.
Mr. Secretary, I want to come back to what Senator Brown
said and do it very quickly. Because as we have talked about,
we are going to have to spend a lot of time to really dig into
these issues.
So seniors, people in organizations, like the work I have
done with the Gray Panthers over the years; they talk about how
they are getting clobbered when they go to the pharmaceutical
window.
Senator Brown asked you about that, because I was with him
in Ohio and I heard seniors talking about it. And you said, you
know, what we are going to do is, we are going to change the
incentives, we are going to change the incentives for the
middlemen.
As you know, I have legislation to do that. That is a key
part of the puzzle. But what Senator Brown was saying and what
I am saying is--we will talk some more about it in the future--
you cannot solve this problem if you let the manufacturers off
the hook. And that is what the budget does, and that will be a
topic for another day.
My question for you deals with something our colleague and
someone I admire, Congressman Davis, talked to you about
yesterday in Ways and Means: this question of AFCARS, this
important rule, AFCARS, the adoption, the foster care kids.
This rule has, as far as I can tell, been blocked or put on
hold or something of this nature. This gives us critical data,
like how many foster kids get really terrorized in the sex-
trafficking system. We really want to get this out.
Are you supportive of this? Will you work with us? This is
what Congressman Davis was talking to you about yesterday.
Secretary Azar. And I did not have a chance yet to follow
up from his comment. That was the first I had heard of this
issue.
Obviously, I want to learn more from you about that and
work on this. If that is the impact, we want to be doing
everything in our power to solve that problem.
Senator Wyden. Good. The reason this is so important is, as
you know, a number of us are supportive of the idea of States
having a bigger role in these kinds of areas, but we have to
know what is going on at the State level and have this kind of
information to have this partnership. So that is that.
And then, because my friend is here, I am going to put
something into the record, because we have talked a fair amount
about
Graham-Cassidy, and sometimes people do not know this, but the
two of us talk often about health policy. I think Senator Hatch
thought at one point we were going to punch each other out in
the middle of the Graham-Cassidy debate.
Here is where it was left on the pre-existing condition
issue. And I am going to actually put it in the record, because
I suspect we are going to come back to that.
[The information on preexisting conditions appears in the
appendix on p. 106.]
Senator Wyden. When we had the hearing, I had received
voluminous amounts of information from doctors and hospitals
who were concerned that Graham-Cassidy did not protect people
with pre-existing conditions. My colleague said, ``That is not
right; those people mean well, but they are not right.''
So sitting on the far end of the table was a representative
from the Cancer Society. And the representative from the Cancer
Society looked at me and looked at my colleague and said, ``We
know something about pre-existing conditions, and this does
not,'' this being Graham-Cassidy, ``protect people with pre-
existing conditions.''
The reason I am going to put it in the record is I want my
colleague and others to have a chance to comment and be part of
the debate. But since Graham-Cassidy has come up several times
and I am particularly concerned about the trend apparently
started by Idaho to go back to junk insurance and, again, no
protection for people with pre-existing conditions, I want all
sides to have a fair chance to comment on this.
And we will put into the record what I have just given, a
shorthand description. I am sure my colleague sees this issue
differently. But at least we are going to be picking up where
it was left when we actually had our hearing.
Thank you, Mr. Chairman.
Senator Cassidy. Yes. And hopefully it will be noted that
that is rhetoric; it is not based upon fact.
By the way, Mr. Secretary, thank you for being here.
Thank you, my colleague, and all others who participated. A
very good hearing.
Since it appears we will not obtain a quorum, we will
postpone the markup scheduled for today to occur during a
rollcall vote of the Senate at a location to be determined that
will be off the floor.
I want to thank Secretary Azar for attending today.
I thank all my colleagues for participating.
For any of my colleagues who have written questions, I ask
that you submit them by the close of business next Thursday,
February 22nd.
With that, this hearing is adjourned.
[Whereupon, at 11:25 a.m., the hearing was concluded.]
A P P E N D I X
Additional Material Submitted for the Record
----------
Prepared Statement of Hon. Alex M. Azar II, Secretary,
Department of Health and Human Services
The mission of the Department of Health and Human Services (HHS) is
to enhance and protect the health and well-being of the American
people.
President Trump and all of us at HHS take that charge seriously.
So, when programs are not as effective as they can be, or cost more
than they ought to, or fail to deliver on their promise, change and
reform are necessary.
The President's fiscal year (FY) 2019 budget applies this reform
mindset to the work of the Department, making thoughtful and strategic
investments to protect the health and well-being of the American
people, while addressing the opioid crisis, promoting patient-centered
health care, strengthening services for American Indians and Alaska
Natives, encouraging innovation in America's health-care future,
addressing high drug prices, reforming the Department's regulations,
and generally focusing resources toward proven and effective
initiatives. The budget also recognizes the fiscal challenges our
country faces today, and the need to focus our investments and update
them to meet the needs of a rapidly changing world.
The President's budget for HHS also reflects proposals to meet the
President's comprehensive government-wide reform plan through a
Department initiative called ``ReImagine HHS.'' ReImagine HHS, through
a range of initiatives, aims to identify opportunities to improve the
work HHS does for the American people, in terms of its efficiency,
quality, and cost-effectiveness. In particular, ReImagine HHS offers a
unique opportunity for the experienced career staff of the Department
to lead initiatives that will advance the work of the Department and
revamp outdated processes and structures.
Across all of HHS's priorities, the budget makes clear that
business-as-usual will not suffice, and that the substantial
investments made every year at HHS ought to be allocated with
efficiency and toward programs that work.
tackling the opioid epidemic
One of the Department's top priorities is fighting the scourge of
opioid addiction facing our country.
Due to skyrocketing numbers of opioid overdoses, deaths by drug
overdose have become the leading cause of injury death in the United
States. In 2016, 174 Americans died each day from drug overdoses.
American life expectancy has dropped for the second year in a row--a
tragic development not seen in more than a half century.
The President's budget recognizes the devastation caused by this
crisis in communities across America, by providing a historic new
investment of $10 billion in HHS funding to address the opioid crisis
and serious mental illness, and building upon the work started under
the 21st Century Cures Act.
The budget's targeted investments advance the Department's five
part strategy, which complements work being done elsewhere in the
administration and covers:
Access: improving access to prevention, treatment, and
recovery services, including medication-assisted treatment;
Overdoses: targeting availability and distribution of
overdose-reversing drugs;
Data: strengthening our understanding of the epidemic through
better public health data and reporting;
Research: supporting cutting edge research on pain and
addiction; and
Pain: advancing better practices for pain management.
The budget proposes to improve ways in which the Federal Government
helps communities respond to the opioid epidemic. As just one example,
the budget directs resources to the Substance Abuse and Mental Health
Services Administration to improve access to medication-assisted
treatment services, boost State capacity to establish and operate
comprehensive prevention systems, and disseminate high-quality
resources on best practices for treatment.
The budget includes a total of $126 million to support efforts by
the Centers for Disease Control and Prevention (CDC) to prevent the
abuse and overdose of opioids. This investment supports key public
health and surveillance activities at the State level, recognizing that
States can best determine their unique needs. CDC will also continue to
increase the awareness and adoption of the CDC Guideline for
Prescribing Opioids for Chronic Pain. In all of these activities, CDC
will endeavor to support and execute programs that have a proven track
record of success.
We recognize that government at the Federal, State, and local
levels cannot defeat the opioid crisis alone, so HHS will continue to
leverage the resources and expertise of the private sector and academia
to develop new tools to end the epidemic. This includes a $500 million
investment in a National Institutes of Health (NIH) public-private
partnership to accelerate the development of new treatments for pain
and addiction.
To help address the drivers of the epidemic, current practices for
pain management must also be rethought, including in the work of
Federal agencies that prescribe painkillers. The FY 2019 budget will
support the Pain Management Best Practices Inter-Agency Task Force,
which will determine whether there are gaps or inconsistencies in pain
management best practices among Federal agencies; propose
recommendations on addressing gaps or inconsistencies; provide the
public with an opportunity to comment on any proposed recommendations;
and develop a strategy for disseminating information about these best
practices.
effectively treating serious mental illness
Serious mental illness, such as a psychotic or major depressive
disorder, afflicts nearly 10 million American adults each year, and
remains one of the Nation's most difficult health-care challenges.
Without treatment, many of these individuals cycle repeatedly among the
health, behavioral health, and criminal or juvenile justice systems,
with each system insufficiently prepared to meet their needs. According
to one report, 10 times as many Americans with serious mental illness
are in jail or prison than in inpatient psychiatric treatment, and
tragically, Americans with serious mental illness live lives at least
10 years shorter, on average, than others.
The budget recognizes that there are effective, proven forms of
treatment for those struggling with serious mental illness, which have
not always received the necessary support. One is ``assertive community
treatment,'' which places individuals in the care of a
multidisciplinary behavioral health staff to deliver comprehensive
services and treatment and has been shown to reduce hospitalization and
improve patient satisfaction compared with other interventions of the
same cost. The budget fully funds a new Assertive Community Treatment
for Individuals with Serious Mental Illness program, authorized by the
21st Century Cures Act.
Another effective approach to serious mental illness is the
budget's support of Certified Community Behavioral Clinics, funded as
part of the new $10 billion investment to address the opioid epidemic
and serious mental illness. The budget also continues to direct 10
percent of State allocations from the Community Mental Health Services
Block Grant to bring care more quickly to those experiencing a first
episode of psychosis, a proven intervention.
advancing health reform that works
A Washington-centric, one-size-fits-all approach to health care--
especially in insurance markets most affected by Obamacare--is simply
not working and must change. The President's budget proposes a bold
plan to redirect a significant amount of health-care funding back to
the States and individuals, where health-care decisions should be made,
while also taking major steps to encourage innovation and better
quality of care.
The budget supports repealing Obamacare and replacing the law with
flexibility for States to create a free and open health-care market
tailored to their citizens' needs. The two-part approach is modeled
closely after the Graham-Cassidy-Heller-Johnson amendment to H.R. 1628,
the American Health Care Act of 2017, and also includes additional
reforms to put health-care spending on a sustainable fiscal path.
The proposed Market-Based Health Care Grant Program will help
States stabilize their insurance markets and provide for a smooth
transition away from Obamacare. The budget would also fix the perverse
incentive structures created by Obamacare, by ending the disparity
between States that expanded Medicaid to new populations and those that
did not and providing States with a choice between a per capita cap and
a block grant.
The budget also proposes reforming our broken medical liability
system, to ensure it is not driving excess costs. Finally, the budget
proposes consolidating the byzantine system of graduate medical
education funding into a single, direct grant program that will
streamline incentives and better serve patients and providers.
Bringing Down Drug Prices
As President Trump has repeatedly made clear, the prices Americans
pay for prescription drugs are simply too high. The budget proposes a
range of legislative measures to build on the proven success of the
Medicare Part D prescription drug program, including through giving
drug plans more tools to negotiate with manufacturers and encourage use
of higher value drugs. In addition, the budget discourages rebate and
pricing strategies that increase spending for both beneficiaries and
the government and, for the first time in the program's history,
provides beneficiaries with more predictable annual drug expenses
through the creation of a new out-of-pocket spending cap for seniors
with especially high drug costs.
Sustainable Medicaid and Medicare Reforms
Millions of Americans rely on Medicaid and Medicare to meet their
everyday health-care needs. Together, Federal health care programs
comprise the largest portion of the Federal budget. The President's
budget proposes several legislative solutions to improve the programs,
promote greater efficiencies, advance patient-
centered care, and reduce government-imposed burden on providers.
The administration recognizes that the over-50-year-old structure
of the Medicaid program has failed to create a sustainable Federal-
State partnership that is capable of controlling costs. In fact, its
outdated design incentivizes cost increases without delivering
commensurate benefits or allowing for much-needed local health
innovation.
Our budget proposes a new future for Medicaid that will restructure
Medicaid financing, provide States with new flexibilities to better
serve their communities, improve the State plan and waiver processes,
and provide the right incentives to preserve the program for future
generations.
boosting upward economic mobility
There is no more effective anti-poverty program than helping
someone find a job. Recognizing this common-sense approach, the
President's budget re-focuses HHS's public assistance programs on
helping low-income Americans find gainful employment, providing them
with a sense of purpose, personal dignity, and independence.
Importantly, the budget proposes key reforms to the Temporary
Assistance for Needy Families program that reinforce its focus on
promoting work as the best pathway to self-sufficiency. Specifically,
the budget strengthens the program's accountability framework related
to work requirements and ensures that States allocate sufficient funds
to work, education, and training activities.
The budget also proposes establishing Welfare to Work Projects that
will allow States to streamline funding from multiple public assistance
programs and redesign service delivery to meet their constituents'
specific needs. Importantly, these Welfare to Work Projects would be
rigorously evaluated, expanding the evidence base that informs how
assistance programs can be most effectively structured to help
Americans achieve self-sufficiency.
In January, for the first time in the history of the Medicaid
program, the Federal Government indicated openness to State-led
innovations that promote work or community engagement activities for
working age, able-bodied enrollees. Productive work and community
engagement is associated with improved health and well-being, meaning
this reform can achieve the goals of the Medicaid program while also
supporting independence and economic self-sufficiency for millions of
able-
bodied adults.
promoting efficiency and innovation in scientific work
Supporting and encouraging scientific research is a longstanding
Federal priority, one that results in both a growing economy and longer
lives. Executing this responsibility demands that the Federal
Government regularly consider how to organize such support in the most
efficient manner possible.
The administration believes it is a priority to support NIH, a
crown jewel of American science, and proposes to do so not just through
continued financial investments but also through innovative
partnerships with non-federal entities, administrative reforms, and
better coordination and planning.
Among other efforts to derive maximum benefit from the substantial
Federal investments made in NIH research, the budget supports expanding
public-private partnerships that will challenge private sector partners
to match Federal investments; increasing coordination across NIH's
Institutes and Centers; focusing grant awards on projects with the
highest potential to accrue benefits for public health; assessing new
and current strategic investments in research; curtailing the rate at
which high researcher salaries at private institutions are reimbursed
with taxpayer dollars; and implementing burden reduction measures to
reduce costs for grant recipients.
The budget also supports administrative reforms for NIH, including
efforts to harmonize operational functions and break down silos within
the agency. In addition, the budget proposes to consolidate three other
major HHS research institutions in NIH to maximize the effectiveness of
their research.
The Food and Drug Administration (FDA) is another crown jewel of
American science. But its needs and priorities must change as the face
of medical innovation changes, too. The budget includes investments for
FDA to speed the development and approval of new drugs and medical
devices, and to increase the quality and safety of next generation
manufacturing practices, including approximately $500 million to
strengthen medical product safety development and access.
investing in our biodefense, preparedness, and
global health security programs
The President's budget aims to improve our Nation's preparedness
for, and capabilities to respond to, chemical, biological,
radiological, and nuclear threats; pandemic influenza; natural
disasters; emerging infectious diseases; and cybersecurity challenges.
In each area, smart investments that empower the private sector and
our global partners will help keep our country safe.
Chemical, Biological, Radiological, and Nuclear Threat Preparedness
The budget includes $512 million for the Biomedical Advanced
Research and Development Authority (BARDA) and $510 million for Project
BioShield, which fund successful public-private partnerships that
support the development and procurement of new medical products crucial
to defending our country against chemical, biological, radiological,
nuclear, and infectious disease threats. Prior HHS investments in these
programs have resulted in more than 190 medical countermeasure
candidates, 34 FDA-approved products from BARDA, and the procurement of
14 new products for the Strategic National Stockpile. Funding will also
be available for exercises to build preparedness for threats such as
emerging infectious diseases, natural disasters, and manmade
biological, chemical, nuclear, and radiation threats.
The budget proposes to transfer the Strategic National Stockpile to
the Office of the Assistant Secretary for Preparedness and Response, to
boost operational efficiencies and streamline development and
procurement of medical countermeasures. It also provides $575 million
to maintain and replenish the stockpile, the Nation's largest supply of
life-saving medical countermeasures that can be deployed in the event
of a public health emergency.
Natural Disaster Preparedness
Following the powerful hurricanes and historic wildfires of 2017,
HHS remains ready to respond to any and all hazards when disaster
strikes. The budget ensures the Department is able to support essential
emergency preparedness activities to refine our disaster responses. In
particular, Hospital Preparedness Program resources will continue to be
allocated to States and localities according to risk, ensuring
communities with more risk have the necessary coordination and
resources. The budget also continues to provide $50 million to support
the National Disaster Medical System. Through this cost-effective and
successful program, HHS trains and deploys teams of American health-
care professionals from across the country to provide medical care to
our fellow Americans in the event of an emergency.
Global Health Security
One of the most effective ways to protect Americans from the threat
of infectious diseases is to enable other countries to follow through
on their own commitments to contain and respond to disease threats.
Such investments are far less expensive than mounting an international
public health response to control an epidemic.
To support this goal, the budget provides a total of $409 million
for CDC's global health activities, which strengthens CDC's
international preparedness and response capabilities. The budget would
also build on substantial progress that has been made toward global
health security goals under the Global Health Security Agenda (GHSA),
including a $59 million investment that provides funding for CDC to
continue this work into FY 2020.
Cybersecurity
The budget recognizes that HHS must continue robust operations to
meet today's cybersecurity needs and includes $68 million to ensure the
Department is able to protect sensitive and critical information in an
ever-changing threat landscape. The Department will also focus on
support for and coordination with the health care and public health
sectors in close coordination with the Department of Homeland Security,
to promote information and resource sharing across levels of government
and the private sector.
strengthening the indian health service
Through the Indian Health Service (IHS), HHS is responsible for
providing quality health-care services to more than 2.2 million
eligible American Indians and Alaska Natives. The budget prioritizes
funding for this agency, and in particular for direct health services.
The budget also makes significant investments to assist IHS facilities
with meeting CMS quality health standards.
Looking forward, and consistent with our statutory authorities, we
recognize that how we provide quality health care in Indian Country and
beyond must change to achieve and ensure the high quality of these
services. More Tribes have assumed the responsibilities of providing
health care for their members with support from the IHS, and
investments in the budget reflect our support for the growth of tribal
self-governance in the provision of health care.
The President's 2019 budget for HHS recognizes the importance of
focusing government spending on programs that work and reforming our
Nation's health-care programs for a fast-changing world. This budget
recognizes that securing America's future demands sound fiscal
management and responsible decisions about our priorities. If we are
serious about fulfilling HHS's mission of enhancing and protecting the
well-being of all Americans, we must adopt the bold innovation and
direction espoused by the President's budget.
______
Questions Submitted for the Record to Hon. Alex M. Azar II
Questions Submitted by Hon. Orrin G. Hatch
Question. Mr. Azar, In the Medicare program, providers like doctors
and hospitals are experiencing extremely long wait times to resolve
appeals of Medicare payment decisions. These providers sometimes have
to wait months or years to resolve cases and get reimbursed. This
situation is mostly attributable to the backlog in appeals at the
Office of Medicare Hearings and Appeals. The Senate Finance Committee
passed the Audit and Appeals Fairness, Integrity, and Reforms in
Medicare Act, known as AFIRM out of committee in the last Congress, and
I believe the need for this legislation is just as important today. Mr.
Azar, please describe how the changes to the appeals process in the
President's budget will fix this backlog.
Answer. The budget includes several proposals to reform the
Medicare appeals process across all four levels within the Department,
at CMS, the Office of Medicare Hearings and Appeals, and the
Departmental Appeals Board. These proposals will improve the efficiency
and efficacy of the administrative appeals process. The strategies
include taking administrative actions to reduce the number of pending
appeals and encourage resolution of cases earlier in the process and
proposing legislative reforms that provide additional funding and new
authorities to address the appeals volume. The FY 2019 budget includes
significant funding increases for OMHA and the DAB along with a package
of legislative proposals that would provide the flexibilities needed
for both agencies to process their appeals workload more efficiently
and allow OMHA to resolve a portion of its appeal receipts at lower
cost.
In addition to increased financial resources for greater
adjudication of claims, the President's budget proposes legislative
authority to:
Remand appeals to the redetermination level with the
introduction of new evidence.
Increase the minimum amount in controversy for ALJ
adjudication of claims to equal amount required for judicial review.
Establish Magistrate adjudication for claims with amount in
controversy below new ALJ amount in controversy threshold.
Expedite procedures for claims with no material fact in
dispute.
Change the Medicare Appeal Council's standard of review from
de novo to an appellate-level standard of review (which would increase
its adjudication capacity by up to 30 percent, without increasing
costs).
Limit appeals when no documentation is submitted.
Require a good-faith attestation on all appeals.
Establish a post-adjudication user fee for unfavorable appeals
at the 3rd and 4th levels of appeal.
Taken together, these common sense reforms would significantly
reduce the backlog and ultimately allow suppliers and health-care
providers to more efficiently deliver services and goods to patients. I
look forward to working with you to help realize our shared goals in
this area.
Question. Mr. Azar, as you may know, this committee held a round
table discussion in 2015, as well as a hearing in 2016, to hear from
industry stakeholders on proposals to reform the Stark Law. Many of the
proposals and challenges faced by providers under the law are still
very relevant today. The President's budget contains a request for
additional authority to create exemptions from the self-referral law to
facilitate participation in alternative payment models and apply Stark
to physician-owned distributors.
How will additional exemptions and authorities under the Stark Law
help facilitate the transition to value-based care and assist in
implementation of Advanced Alternative Payment Models under MACRA?
Answer. We agree that the physician self-referral law must better
support and align with alternative payment models. The FY 2019
President's budget proposes establishment of a new exception to the
physician self-referral law for arrangements that arise due to
participation in Advanced Alternative Payment Models. The Department,
in consultation with the HHS Office of Inspector General, will identify
the types of arrangements and the minimum risk levels and level of
participation in the model required for such exceptions.
Question. I am concerned about the viability of independent,
especially small, physician practices. The past decade has seen a
significant uptick in hospital acquisitions of independent physician
practices. According to the Physician Advocacy Institute, hospital
acquisitions of physician practices rose 86 percent between 2012 and
2015, and physician employment by hospitals increased over 50 percent.
Is HHS actively evaluating how to better support independent practices
and develop policies that allow solo providers to compete on a level
playing field with hospitals and large health systems?
Answer. We bear in mind whether new burdens created by models or
programs or the scale they require for viability may be driving
consolidation in the health-care market. As a matter of principle, we
want to move to a system where we can be agnostic about ownership
structures, a system that will allow independent providers to group
together to drive innovation, quality, and competition. Independent,
small physician practices play an important role in the health-care
system. Technical assistance is available to help small practices
participate successfully in the Quality Payment Program, including
assistance with all aspects of the program and optimizing the use of
technology. This assistance is provided through the Small, Underserved
and Rural Support initiative, the Transforming Clinical Practice
Initiative and the Quality Improvement Organization program. I look
forward to examining this issue further and working with Congress to
support these practices.
Question. A 2014 law requires that ordering physicians consult
imaging appropriate use criteria (AUC) that are developed by national
medical specialty society or other provider-led entities prior to
referring Medicare patients for advanced diagnostic imaging services,
such as CTs, MRIs, and PET scans. In addition to facilitating improved
health-care outcomes through the use of physician-developed guidelines
and minimizing patient exposure to unnecessary radiation, this approach
was thought to be more physician-friendly than establishing an advanced
imaging prior authorization program that is typical among other payers.
Although the law called for ordering physicians to begin consulting AUC
for advanced diagnostic imaging procedures beginning on January 1,
2017, CMS, working iteratively through the rulemaking process, has set
a January 1, 2020 start date for the program. Can you affirm the
decision to start the program on this date?
Answer. The Medicare Appropriate Use Criteria (AUC) Program for
Advanced Diagnostic Imaging will begin in a manner that allows
practitioners more time to focus on and adjust to the Quality Payment
Program before being required to participate in the AUC program. The
Medicare AUC program will begin with an educational and operations
testing year in 2020, which means physicians are required to start
using AUCs and reporting this information on their claims. During this
first year, however, CMS will pay claims for advanced diagnostic
imaging services regardless of whether they correctly contain
information on the required AUC consultation. This allows both
clinicians and the agency to prepare for this new program.
In addition, physicians may begin exploring the AUC Program and the
use of clinical decision support mechanisms well in advance of the
start of the Medicare AUC program through the voluntary participation
period that will begin mid-2018 and run through 2019. During this time
CMS will collect limited information on Medicare claims to identify
advanced imaging services for which consultation with appropriate use
criteria took place.
Question. Mr. Azar, this budget puts forward a demonstration
related to the Medicaid Drug Rebate Program and State flexibility. I,
and many members on the dais, have long shared the goal of providing
States with flexibility to administer Medicaid programs in the most
appropriate way for their populations. However, this demonstration
should give us a moment of pause.
How will CMS evaluate these demonstrations to ensure that
beneficiaries will have access to the best therapies available? It is
very important that we have strong evaluations of such ideas before
making broader policy decisions.
Answer. The budget includes a new statutory demonstration authority
to allow up to five States more flexibility in negotiating prices with
manufacturers, rather than participate in the Medicaid Drug Rebate
Program, and to make drug coverage decisions that meet State needs.
Participating States will be required to include an appeals process so
beneficiaries can access non-covered drugs based on medical need. By
structuring the proposal as a limited demonstration opportunity, HHS
and participating States will have the tools to rigorously evaluate
these demonstrations, providing an assessment of the demonstrations'
impacts on cost and access to medications.
Question. Mr. Azar, I'm glad the budget proposes changes to the
financing of the child welfare system to help States keep more families
safely together instead of bringing more children into foster care. I'm
pleased to note that last week the President signed into law the Family
First Prevention Services Act as part of the government funding bill,
and this legislation is focused on achieving the same goals set out in
the President's budget. Will you commit to working with Senator Wyden
and I--and other members of this committee--to be sure this new law is
implemented quickly, so we can achieve our shared goal of keeping more
kids safely with their families and out of foster care?
Answer. We are committed to the implementation of the Family First
Prevention Services Act. As the act makes numerous significant changes
to Federal financing for child welfare, we must ensure that we take
into consideration the needs of children and families, State and tribal
challenges, and the landscape of available services as we implement the
law. Changes of this magnitude cannot be rushed, but we are working as
quickly as possible while continuing to work towards our goals of
permanency, safety and well-being for all children.
Question. Mr. Azar, as you may know, the Finance Committee is
undertaking a bipartisan process to identify ways to address the opioid
epidemic in Medicare and Medicaid so that the right incentives exist
for addressing pain and addiction. When you testified before this
committee earlier this year, you mentioned that addressing the opioid
epidemic would be one of your top priorities, and I'm pleased to see a
number of proposals included in the President's budget on this topic.
Will you commit to working with this committee to find bipartisan
solutions to address this epidemic within Medicare and Medicaid? Can
you please elaborate on the mandatory program changes included in the
President's budget to help move Medicare and Medicaid forward to better
confront this epidemic?
Answer. The budget includes several proposals that work to address
the impact that the opioid epidemic has on our Nation's seniors. The
Medicare population has among the highest and fastest-growing rates of
opioid use disorders, currently at more than six of every 1,000
beneficiaries. Many Medicare beneficiaries take multiple medications
and receive prescriptions from multiple doctors, making tracking and
controlling any misuse of these prescriptions a substantial challenge.
HHS has made tackling this issue, and the opioid epidemic more broadly,
a top priority.
The budget proposes to conduct a demonstration to expand access to
comprehensive substance abuse treatment for Medicare beneficiaries,
including medication-
assisted treatment. This demonstration would be expanded nationwide if
successful. A corresponding expansion of medication-assisted treatment
is also proposed for Medicaid beneficiaries, who likewise have rates of
opioid use disorder beyond those of other populations.
The budget also proposes to address opioid misuse in Medicare by
giving the Secretary authority to require plan participation in a
program to prevent prescription drug abuse in Part D, essentially
strengthening the statutory authority already provided through the
Comprehensive Addiction Recovery Act of 2016 to ``lock'' an at-risk
beneficiary into a single prescriber or pharmacy. To address
potentially abusive prescribing practices the budget proposes to allow
the Secretary to work with the Drug Enforcement Administration (DEA) to
revoke a provider's DEA Certificate of Registration after CMS revokes a
provider's Medicare enrollment based on a pattern of abusive
prescribing.
Question. The President's budget includes a proposal to authorize
the Secretary to consolidate certain drugs covered under Part B into
Part D. As the details would be helpful to evaluate this proposal, I
ask some initial questions. Has HHS identified certain conditions or
treatments that lend themselves to a transition from Part B to Part D?
What would be the implications for moving a drug from Part B to Part D
for beneficiaries, physicians, and the Medicare program?
Answer. Senator Hatch, thank you for raising this crucial issue and
bringing attention to an important proposal in the President's budget
to lower drug costs for American seniors. While I am unable to discuss
specific drugs or conditions that would be targeted, at this time, if
given this authority, HHS would carefully analyze the projected impacts
on beneficiary access and cost-sharing, as well as costs to the
Medicare program, before pursuing any drug consolidation approaches. We
look forward to working with you, your staff, and other interested
members of Congress on this proposal, and we would seek any opportunity
to find ways to reach our shared goal of bringing down the cost of
prescription drugs for all Americans.
______
Questions Submitted by Hon. Chuck Grassley
Question. As a strong supporter of Medicare Part D and as someone
who cares about those who will count on these programs today and for
many years to come, I have a responsibility to ensure the survival of
this program for future generations.
Please tell me how you will bring down drug prices and ensure the
Medicare Part D will continue to work as a free market solution for the
seniors who depend upon the program.
Is there need for more transparency in the Part D program? How
would you achieve that?
Answer. The budget modernizes the Part D drug benefit, based upon
12 years of program experience, to improve plans' ability to deliver
affordable drug coverage for seniors and reduce their costs at the
pharmacy counter. Seniors will benefit from the budget's proposals,
which are designed to better protect beneficiaries from high drug
prices, give plans more tools to manage spending, and address the
misaligned incentives of the Part D drug benefit structure. The
proposed changes enhance Part D plans' negotiating power with
manufacturers, encourage utilization of higher value drugs, discourage
drug manufacturers' price and rebate strategies that increase spending
for both beneficiaries and the Government, and provide beneficiaries
with more predictable annual drug expenses through the creation of a
new annual out-of-pocket spending cap.
Question. In the HHS budget justification, there is a proposal to
use centralized CMS screening for enrollment of providers who receive
Medicare, Medicaid, or CHIP funding.
Current regulations currently allow State Medicaid Agencies to rely
on CMS screening, but providers are still subject to duplicative
screening in many situations. I want to draw your attention to
bipartisan legislation that Senator Bennet and I introduced this week.
S. 2415, the Accelerating Kids Access to Care Act would streamline the
enrollment process for some pediatric providers while protecting
program integrity. I became aware of the need for this legislation when
I heard a child's heart surgery was delayed because a provider--who was
already credentialed in Medicaid in one state--could not be
credentialed by the referring State because he could not find his
original social security card. Thankfully, most children are well. But,
there are a few who need care for their complex medical needs. We
should not have artificial barriers to that care. Mr. Secretary, will
your office work with staff from my office and Senator Bennet's to get
this proposal off the ground?
Answer. We are available to work with your staff and review any
legislative language you may have in order to provide technical
assistance.
Question. Recent news investigators have reported on a wide variety
of generic medications that on certain insurance plans could be cheaper
when patients pay out of pocket instead of using their insurance
benefits, but a so-called Pharmacy Benefit Manager ``gag clause'' can
prevent some pharmacists from telling patients that they may be
overpaying for their prescription. Are you aware of these concerns
regarding ``gag clauses'' on pharmacies? Do you believe this is helpful
in promoting a competitive free market? What changes do you believe
need to be made in regard to PBM transparency?
Answer. Senator Grassley, as you know, we share the mutual desire
to ensure that Americans are paying the lowest possible price at the
pharmacy counter, and I have made it a top priority in my tenure as
Secretary to meet that goal, so I thank you for raising this important
issue. We are committed to looking further into this, and any other
issues that relate to Medicare Part D or other HHS programs that impact
the price of pharmaceuticals, and we look forward to working with you
and your staff to identify government policies which impede consumer
access to drugs and to develop patient-driven solutions to empower
patients.
Question. Community pharmacists in Iowa have reported increasing
use of price concessions and fees imposed by pharmacy benefit managers
months after prescriptions are filled, called Direct and Indirect
Remuneration (DIR) fees. CMS has now for several years recognized
issues with how DIR fees are reported by part D plan sponsors, how
these fees impact pharmacy business, and the resulting challenges they
create for Part D beneficiaries, including addressing it in the
President's budget. CMS recently proposed requiring that all DIR fees
would be reflected at the point of sale, and I joined with 20 of my
colleagues urging CMS to move forward with this proposal, which would
lower out of pocket costs for beneficiaries. Given the fact that these
``fees'' are detrimental to the Federal Government, Part D
beneficiaries and Part D pharmacy care providers, how will you work to
resolve these concerns?
Answer. In the proposed Parts C and D rule (CMS-4182-P), we
included a Request for Information in which we discussed considerations
related to and solicited comment on requiring sponsors to include at
least a minimum percentage of manufacturer rebates and all pharmacy
price concessions received for a covered Part D drug in the drug's
negotiated price at the point of sale. Feedback received will be used
for consideration in future rulemaking on this topic. HHS is committed
to enacting reforms to ensure our health-care programs work for the
American people, provide Americans with access to care that meets their
needs, increase options for patients and providers, and build financial
stability and responsibility.
______
Questions Submitted by Hon. John Cornyn
Question. Secretary Azar, you've talked about bringing more
competition into the market in Medicare Part B. What would that look
like?
Answer. I look forward to working with Congress to explore ways
that we can bring the negotiation strategies that are currently working
in Medicare Part D, where we receive the best deals of any payer in the
commercial marketplace, into Part B, which does not negotiate prices.
Additionally, the budget proposes to leverage Medicare Part D Plans'
negotiating power by providing HHS the authority to consolidate certain
drugs covered under Part B into Part D, when there are savings to be
gained from price competition.
Question. The Senate Finance Committee has consistently exhibited
broad bipartisan support to fix the competitive bidding program, and in
particular, the component in need of our immediate attention: the
payment rate cuts for DME supplied to rural areas or ``non-CBAs'' must
be reversed. While I appreciate the Medicare Program's goal to save
taxpayer money, I am greatly concerned that the payment reductions for
DME supplied to rural America are negatively impacting suppliers'
ability to reach Medicare's most needy beneficiaries. Congress shares
my concern, having established a temporary reprieve through The 21st
Century Cures Act, which reversed these cuts for 6 months through the
end of 2016. The cuts, however, were reinstated on January 1, 2017 and
remain in place today. Adversely impacting durable medical equipment
suppliers' ability to do their jobs is creating very real patient
access issues for Medicare beneficiaries in rural America, which in
turn undermines the quality of health care they rightfully depend upon.
We know that CMS leadership shares our concern, having prepared an
Interim Final Rule (IFR) for publication last year, known as the
``Durable Medical Equipment Fee Schedule; Adjustments to Resume the
Transitional 50/50 Blended Rates to Provide Relief in Non-Competitive
Bidding Areas'' (RIN: 0938-AT21). The IFR has been stalled at the
Office of Management and budget since last summer. This is both an
unfortunate and unacceptable way to treat our Medicare beneficiaries.
Please describe in detail the steps you have taken and will take to
ensure that OMB promptly releases the IFR to allow CMS to publish it
promptly. If there are any obstacles to the prompt publication of the
IFR, then please describe them to the committee, why they haven't been
removed, and what you will do to remove them.
Answer. Senator Cornyn, thank you for raising this important issue.
While this regulation is under review by the administration, and I am
unable to answer in specific details as you request at this time, I do
want to stress that I share your interest and commitment to ensuring
access to durable medical equipment for Medicare beneficiaries. The
Department is prioritizing actions to address the concerns you have
expressed.
Question. The Affordable Care Act included an effective ban on the
expansion of physician-owned hospitals, as well as a ban on the
construction of new hospitals. As you are aware, Hurricane Harvey
caused massive damage to hospitals in Texas, including the permanent
closure of one in Pasadena. This has resulted in a community of over
300,000 individuals having access to only one physician-owned hospital
with 65 beds. Do you support an exception that would allow physician-
owned hospitals in regions impacted by major disasters?
Answer. I understand that HHS and CMS staff have been providing
technical assistance on bill text that would lift the ban on the
expansion of physician-owned hospitals. I am happy to continue working
with your office to learn more about this issue.
Question. Most people would be surprised to know that State
Medicaid programs cannot negotiate--or get someone to negotiate on
their behalf--with drug manufacturers. Do you foresee State Medicaid
programs banding together to get the kind of scale that would drive
even greater rebates than the statutory rebates already required?
Answer. Under current Federal law, drug manufacturers must provide
Medicaid programs the best prices for prescription drugs that they
offer to any private payer. As part of an administration-wide effort to
address the high costs of prescription drugs and provide States more
purchasing flexibility, the budget proposes a new statutory
demonstration authority that will allow up to five States to test a
closed formulary under which they negotiate prices directly with
manufacturers, rather than participating in the Medicaid Drug Rebate
Program. I am happy to work with Congress regarding this legislation.
Question. Many agencies within HHS are pursuing the right things to
incentivize innovation in health care. For example, the FDA has a pilot
program that moves health-care technology into a 21st-century paradigm
by certifying a company and its development processes as a whole, as
opposed to each individual product. This shift enables rapid, iterative
development processes for lower-risk medical device software and aligns
with the rest of the consumer technology industry. How will the
Secretary work to align all of HHS policy on health IT and digital
health tools to foster private sector innovation in a similar manner to
the FDA's forward thinking approach in its pre-certification pilot?
Answer. The 21st Century Cures Act provided FDA some additional
important tools to help the agency ensure adequate and timely
implementation so that patients can realize the benefits, companies
have a clear and predictable path to bring these new advances to the
United States, and patients and consumers can realize the benefits of
new products while maintaining confidence that products will be
reasonably safe and effective. In the area of digital health, FDA has
released an action plan that includes the agency's precertification
pilot program (FDA Pre-Cert), which seeks to apply a tailored approach
toward digital health technology by looking at the software developer
or digital health technology developer, rather than primarily at the
product. The 21st Century Cures Act expands on policies advanced by the
Center for Devices and Radiological Health (CDRH) generally to make
clear that certain digital health technologies--such as clinical
administrative support software and mobile apps that are intended only
for maintaining or encouraging a healthy lifestyle--generally fall
outside the scope of FDA regulation. Such technologies tend to pose low
risk to patients but can provide great value to the health-care system.
I look forward to reviewing our current policies on health IT and
digital health tools to see where there may be other areas we can
expand this approach. Our policies should protect consumers, but at the
same time be flexible enough to allow innovation.
Question. The administration proposes creating savings in Medicare
Part D by allowing Part D plans more flexibility in managing their
formularies. Could the agency implement allowing plans to cover one
drug per class or would you need Congress to change the statute? What
other tools can CMS provide plans NOW under current authority?
Answer. CMS is committed to supporting flexibility and efficiency
throughout the MA and Part D programs. The MA and Part D programs have
been successful in allowing for innovative approaches for providing
Medicare and Part D benefits to millions of Americans. Our budget
includes this proposal for legislative authority because the statute
does not allow for plans to cover one drug per class. In the proposed
Parts C and D rule (CMS-4182-P) released in November 2017, CMS proposed
to provide more formulary flexibility to plan sponsors by, for
instance, permitting Part D sponsors to immediately substitute newly
released equivalent generics for brand name drugs at the same or lower
cost-sharing tier, if they meet revised requirements, including
generally advising enrollees beforehand that such changes can occur
without a specific advance notice and later providing information to
affected enrollees about any specific generic substitutions that occur.
______
Question Submitted by Hon. John Thune
Question. As discussed at your confirmation hearing, I have
concerns regarding how the Department of Veterans Affairs' (VA) change
in its electronic health record system would impact the Indian Health
Service (IHS), which relies on the same system. Last week, Secretary
Shulkin testified that he expects the VA's transition may require
maintaining the existing system for several years to come. While that
would likely be helpful to IHS for the short-term, I want to ensure
attention continues to be paid to this issue. I've been told that a
working group was formed to examine the current platform and how VA and
IHS will continue to collaborate when a transition occurs. Then-
Secretary Price expected that recommendations from the group would be
made by fall 2017. Have these recommendations been completed, and if
so, what are they?
Answer. The Indian Health Service (IHS) continues to work with the
Department of Veterans' Affairs (VA) about the VA's plans and
anticipated timelines. Similarly, the IHS remains engaged in
discussions with its stakeholder groups such as the Tribal Self-
Governance Advisory Committee, Direct Services Tribal Advisory
Committee, and Information Systems Advisory Committee. Monthly updates
are provided during the IHS All Tribes Call.
IHS published a Request for Information (RFI) in FedBizOps in
December 2017 seeking new and innovative solutions to the goals and
challenges which Federal and Tribal health programs seek to address in
the delivery of care. Over 40 vendors of commercial electronic health
record systems responded to the RFI describing a variety of software
platforms and various services. IHS will continue a robust dialogue
with a number of the respondents throughout Spring of 2018. Future
steps will be determined based on the developments resulting from our
work with all stakeholders.
______
Questions Submitted by Hon. Johnny Isakson
Question. We know and I suspect agree that Hospital Acquired
Pressure Ulcers (HAPUs) are an important problem that contributes to
morbidity, mortality, and cost for Medicare, Medicaid, and commercially
insured and uninsured beneficiaries. My question pertains to pain
management protocols and the prevalence and impact to human suffering
and associated medical costs of HAPUs, a national epidemic that kills
approximately 60,000 patients/year while impacting over 2 million
Americans and costing between $9-$11 billion (mid 2000's data from
AHRQ).
The data from the National Scorecard on Rates of Hospital-Acquired
Conditions 2010 to 2015: Interim Data From National Efforts To Make
Health Care Safer states that pressure ulcers had the lowest reduction
of hospital acquired conditions in the United States in that time span.
Specifically, more recent data from the Office of Enterprise Data and
Analytics at CMS shown in October 2017 identified pressure ulcer
discharges increased by 58.4% between Q1 2016 and Q1 2017, a concerning
trend. These data sets demonstrate the need to work together to
determine how we can improve our Nation's health-care outcomes by
reducing pressure ulcers and saving the government significant costs.
The aforementioned provides concerns for the lowest reduction and
rising state of one of the most preventable unintended consequences of
the Hospital-Acquired Condition (HAC) score used by CMS. The HAC
Reduction Program (HACRP) requires the Secretary of the Department of
Health and Human Services to adjust payments through the domain formula
with respect to risk-adjusted HAC quality measures. The CMS has the
ability to re-balance the domain formula in the HACRP to incentivize
the reduction of hospital acquired Pressure ulcers.
I would like to understand what HHS is doing to promote the
prevention of pressure ulcers. Specifically:
(1) What steps is CMS taking to implement an improved care
protocol to ensure the Hospital-Acquired Condition (HAC)
Reduction Program incentivizes hospitals to reduce HAPUs?
(2) Does HHS have statutory authority to test or implement new
scientifically based HAPU prevention protocols?
(3) Please describe how CMS can use existing tools like re-
balancing the domain formula in the Hospital-Acquired Condition
Reduction Program (HACRP) to reverse the trend and reduce HAPUs
and the time line for any such action?
Answer. We agree that pressure ulcers are a critical area to
address. We now have pressure ulcer quality measures for all of the
post-acute care providers (long-term care hospitals, inpatient
rehabilitation hospitals, skilled nursing facilities, and home health
agencies). The measure looks at the percent of patients with pressure
ulcers that are new or have worsened. In the acute care hospital
setting, there is not such an individual pressure ulcer measure;
however, there is a patient safety composite measure (the Patient
Safety and Adverse Events Composite) that includes pressure ulcers as
one of the eight components of this composite measure. In FY 2018, this
measure will comprise 15 percent of a hospital's score under the
Hospital Acquired Condition (HAC) Reduction program. In the HAC
Reduction Program, we solicit comments in our rulemaking on future
potential safety measures that could be added to the program. We are
always re-evaluating the measure set as well as the weights of the
measures and domains in the program, and are able to add and remove
measures, as needed. In addition, the Quality Improvement Organization
(QIO) Program has worked over the past several years to bring together
hospitals, nursing homes, physician practices, and patient advocates to
work on patient safety issues, including the reduction of pressure
ulcers. The Hospital Improvement Innovation Networks are part of the
QIO program, and pressure ulcers are one of the 11 areas of harm they
have been focused on.
Question. In the updated Unified Agenda, FDA Commissioner Gottlieb
identifies more than 70 actions the FDA will pursue this year to
deliver on its critical mission of protecting and promoting the public
health.
Across the FDA's broad regulatory portfolios, Commissioner Gottlieb
is prioritizing innovation, committing the FDA to:
. . . ``evaluating all aspects of its policies to make sure
we're protecting consumers, while promoting beneficial
innovation that has the potential to . . . improve public
health'' and taking ``steps to foster innovation and regulating
areas of promising new technology in ways that don't raise the
cost of development or reduce innovation.''
Examples of these steps include modernizing medical device pathways
to be more ``transparent, consistent, and objectively defined,''
supporting innovation in digital health products, establishing a new
regulatory framework for regenerative medicine policy to provide
``efficient access to potentially transformative products, while
ensuring safety and efficacy,'' and announcing a new regulatory
framework for nicotine that seeks to ``reduce(e) the addictiveness of
combustible cigarettes'' and supports ``innovation to lead to less
harmful products, which under FDA's oversight, could be part of a
solution.''
Will you commit to supporting Commissioner Gottlieb's vision for
fostering innovation in industries regulated by the FDA through
sensible regulatory pathways that don't raise costs or stifle
technological advancements? If yes, please provide examples of how you
will be supportive at the full agency level.
Answer. Yes, I am committed to supporting Commissioner Gottlieb's
vision for fostering innovation in industries regulated by FDA through
sensible regulatory pathways that do not raise costs or stifle
technological advancements. For example, I will support actions that
FDA has planned for 2018 in the areas of food safety, drug safety, and
broadening access to nonprescription drugs.
Question. Will you commit to supporting Commissioner Gottlieb's
efforts to modernize the FDA by focusing on making the FDA more
efficient, innovative, and transparent? If yes, please provide examples
of how you will be supportive at the full agency level.
Answer. Yes, I am committed to supporting Commissioner Gottlieb's
efforts to modernize FDA by focusing on making FDA more efficient,
innovative, and transparent. I support the following goals of FDA for
2018.
FDA is working to ensure efficiency of existing regulations--a key
focus of the Unified Agenda--by making sure that FDA's standards are
clearly defined, that they advance our public health goals and help
promote the protection of consumers, and achieve these goals in an
efficient way that does not place unnecessary burdens on those FDA
regulates. FDA also wants to ensure that our standards and regulations
are modern and reflect the latest science, and have not become
outdated, obsolete, or otherwise not applicable to the current
environment.
Harmonizing global standards: FDA will be updating its
requirements for accepting foreign clinical data used to bring new
medical devices to market. While helping to ensure the quality and
integrity of clinical trial data and the protection of study
participants, this rule should also reduce the burden on industry
because it will harmonize with the standards currently used in drug
regulation.
Modernizing mammography standards: FDA will be proposing a
rule to modernize mammography quality standards that will improve
women's health. FDA's aim is to recognize advances in technology and
help to ensure women get the most relevant, up-to-date information
about their breast density, which is now recognized as a risk factor
for breast cancer. This information can help doctors and patients make
more informed decisions about further imaging.
Embracing electronic submissions: FDA will propose a new
framework that will allow FDA and product developers to take greater
advantage of the efficiency of electronic, rather than paper,
submissions for devices and veterinary drugs.
Removing outdated rules: FDA will remove an outdated
inspection provision for biologics and outdated drug sterilization
requirements to remove barriers to the use of certain sterilization
techniques.
Question. Do you also believe that FDA regulatory pathways should
be modernized to be transparent, consistent, and objectively defined?
If yes, please describe what specific steps will you take to ensure
this happens at the FDA under your and Commissioner Gottlieb's watch?
Answer. Yes, I believe we should always look for ways to modernize
our regulatory approach. For example, FDA's new comprehensive tobacco
regulation plan (announced in July 2017) builds on current endeavors
and is part of an overall effort to reduce the adverse effects of
tobacco products, create clearer guideposts for the regulation of all
tobacco products, and account for the role of noncombustible products.
The components of the plan work together as a package to help
achieve our public health goals of reducing tobacco-related disease and
death. The agency's new tobacco regulatory framework has two primary
parts: exploring the reduction of the addictiveness of combustible
cigarettes while recognizing and clarifying the role that potentially
less harmful tobacco products could play in improving public health.
Several steps and components make up each part, and to be successful,
all these measures must be pursued together to allow FDA to address
known harms while establishing a framework for sustainable regulation
of all products going forward, including by encouraging innovations
that have the potential to help smokers quit cigarettes. FDA is taking
a fresh look at noncombustible tobacco products and recognizing the
potential for innovation to lead to less harmful products, which under
FDA's oversight could reduce risk while delivering satisfying levels of
nicotine for adults who still need or want it.
To encourage innovations that have the potential to make a notable
public health difference and to put foundational rules in place to
provide increased clarity and efficiency for industry, the agency
extended the premarket application compliance deadlines described in
the deeming rule for certain products. Specifically, FDA is deferring
enforcement of requirements to submit premarket applications for newly
regulated tobacco products that were on the market as of August 8,
2016. Under these revised timelines, applications for such newly
regulated combustible products, such as cigars, pipe tobacco, and
hookah tobacco, would be submitted by August 8, 2021, and applications
for such non-combustible products such as ENDS would be submitted by
August 8, 2022.
As another example, FDA continues to work to advance the field of
regenerative medicine and, in November 2017, issued a comprehensive
framework for the development and oversight of regenerative medicine
products, including novel cellular therapies.
Congress advanced the promise of this cutting-edge field when it
passed the 21st Century Cures Act which includes several provisions
that build upon FDA's previous efforts in the field of regenerative
medicine and provides the agency with tools to facilitate the
development and review of these important products. FDA's Center for
Biologics Evaluation and Research implementation of the regenerative
medicine-
related provisions of the Cures Act, including the new Regenerative
Medicine Advanced Therapy (RMAT) designation program, is a key part of
the agency's efforts to encourage the development of innovative, safe,
and effective regenerative medicine products.
______
Question Submitted by Hon. Rob Portman
Question. Secretary Azar, you noted that the President's budget
calls for $10 billion in funding to address the epidemic, but it does
not obligate any of these funds to specific programs. Because of this,
you stated that you could not commit at the time to seeing these funds
used to support existing programs, like those under the Comprehensive
Addiction and Recovery Act (CARA). What would the intended strategy be
for utilizing these proposed funds? Would HHS rely on existing programs
and infrastructure like those established under CARA, or would HHS seek
to establish new opportunities for addressing the epidemic?
Answer. The President's budget request for $10 billion reflects the
administration's strong commitment to addressing the opioid epidemic
and mental health. Of the $10 billion, an initial allocation provides
$1.2 billion to SAMHSA for a variety of new and expanded efforts to
fight the crisis. Of that amount, $1 billion is included to expand the
State Targeted Response Grants. Additional funds will also help States
provide services to reduce injection drug use and related HIV/AIDS and
Hepatitis C infection rates, allow communities to purchase naloxone for
first responders, and expand the use of drug courts, as well as
services to pregnant and postpartum women.
______
Questions Submitted by Hon. Ron Wyden
Question. During the Finance Committee hearing on your nomination
to be HHS Secretary, you proposed applying principles from Medicare
Part D to how Medicare pays for Part B drugs. In response to my
Question for the Record (QFR) on this topic, you reiterated your
interest in working with Congress on this proposal to ensure the
Medicare program pays the most appropriate rate for Part B drugs (and,
as a result, beneficiaries pay the lowest possible cost-sharing).
The FY 2019 President's budget includes a proposal to provide you,
as the Secretary of Health and Human Services (HHS), ``with the
authority to consolidate certain drugs currently covered under Medicare
Part B into Part D.'' Please provide detailed answers to the following
questions regarding this proposal.
If given this new authority, how would you, as HHS Secretary,
determine which Part B drugs to shift to Part D? What categories of
Part B drugs does HHS consider good candidates for shifting to Part D?
Are there any specific categories of Part B drugs that HHS does not
consider appropriate to shift to Part D?
The President's budget proposal states that the HHS Secretary would
exercise this authority when ``there are savings to be gained from
price competition.'' If given this new authority, how would you, as HHS
Secretary, determine whether there are savings to be gained from
shifting a specific Part B drug to Part D? In exercising this new
authority, how would HHS determine the savings gained from shifting a
drug from Part B to Part D would result from a lower price of the drug
rather than reduced utilization due to any access concerns? Would HHS
consider any factors other than potential savings when determining
whether to shift a Part B drug to Part D? If so, what other factors
would be considered?
Please describe in detail how HHS would implement this policy if
Congress were to adopt the President's budget proposal, including how
the policy would impact Medicare beneficiaries, physicians and other
health care providers, drug plan sponsors, and pharmacies. Do you
anticipate changes in Part D Plan premiums as a result of shifting
drugs to Part D? Would changes in beneficiary premiums as a result of
shifting drugs from Part B to Part D factor into savings estimates?
Answer. I look forward to working with Congress to explore ways
that we can bring the negotiation strategies that are currently working
in Medicare Part D, where we receive the best deals of any payer in the
commercial marketplace, into Part B, which does not negotiate prices. I
hope to work with you and your colleagues to develop legislation that
will provide us with the authority to re-classify Part B drugs into
Part D when appropriate, while taking into consideration the projected
impacts on beneficiary access and cost-sharing, as well as costs to the
Medicare program.
Question. The President's FY 2019 budget proposes to eliminate the
Medicaid expansion and impose a per capita cap or block grant on the
remainder of the Medicaid program, the combination of which would cut
an estimated $1.4 trillion from Medicaid just over the next 10 years.
When asked about these proposals during a hearing before the Senate
Finance Committee, you testified that these policies would help
``reorient Medicaid'' to fix what you called a ``perverse incentive''
in the Medicaid expansion program to ``prioritize the expansion able-
bodied new entry populations over those traditional Medicaid
populations,'' including children, the elderly, and individuals with
disabilities.
As demonstrated by the independent, nonpartisan Kaiser Family
Foundation in a report entitled ``Data Note: Data Do Not Support
Relationship between States' Medicaid Expansion Status and Home and
Community-Based Services Waiver Waiting Lists,'' expansion of the
Medicaid program has not lead to increased waiting lists for services
for those with disabilities. In fact, according to the analysis, among
States that saw their waiting lists grow over that time period, the
average increase was more than 2.5 times greater in non-expansion
States compared to expansion States. In fact, in 2015, the two States
with the largest HCBS waiver waiting lists--Texas and Florida--were
non-expansion States.
Given these data demonstrating that the claim that the decision to
expand Medicaid comes at the expense of access to HCBS for traditional
Medicaid beneficiaries is inaccurate, please explain how the Medicaid
expansion program creates a ``perverse incentive'' in this case.
Answer. Thank you for the opportunity to further explain the
structural defects in the PPACA which prioritize able-bodied adults
over the traditional Medicaid population, including Americans with
disabilities. As you know, States receive a larger Federal match (94
percent in 2018 which declines to 90 percent by 2020 and beyond) to
cover the able-bodied, but a Federal match ranging from 50-75 percent
to cover individuals with disabilities. Unfortunately, the report cited
above does not take into account a number of important factors which
might impact a State's decision to expand Medicaid or reduce its
waiting lists for individuals with disabilities such as the relative
size, wealth or tax base of a State, the differing demographics of
States, or other fiscal challenges within the States. In addition to
the study not controlling for critical differences among the States, it
is an undeniable feature of the Medicaid expansion to provide States a
significantly greater financial incentive to cover the able-bodied
expansion population (94 percent Federal share) instead of individuals
with disabilities (as low as 50 percent Federal share). Whether and how
to prioritize Medicaid coverage for their citizens varies significantly
among States due to a number of factors, but a significantly larger
Federal share of spending for one population over another is a clear
financial incentive to cover one group of citizens over another.
Question. Studies conducted by the independent Robert Wood Johnson
Foundation, Kaiser Family Foundation, and others have also demonstrated
that extending Medicaid coverage to low-income adults produces savings
for State governments. In fact, over 2015 and 2016, States that opted
not to expand their programs saw Medicaid costs rise at a faster rate
than the costs reported by expansion States. Such data suggests that
the Medicaid expansion program supports, rather than limits, the
ability of States to fund and support services for traditional Medicaid
beneficiaries and other individuals in State health care programs.
In light of these data, how does repealing the Medicaid expansion
program support State efforts to provide health-care coverage and
services?
Answer. The FY 2019 budget establishes a block grant or per capita
cap for the traditional Medicaid populations and repeals the PPACA
Medicaid expansion. States would have the option to cover the former
Medicaid expansion population through the new Market-Based Health Care
Grants included in the Graham-Cassidy-Heller-Johnson legislation. These
new financing mechanisms will harmonize the treatment of States over
time and allow States to better target resources to their most needy
citizens. To that end, we need reforms to provide States flexibility to
design their Medicaid programs to meet the spectrum of diverse needs of
their Medicaid populations. Currently, 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. Reforms like block
grants, when paired with additional authority and flexibility, can
incentivize and empower States to develop innovative solutions to
challenges like high drug costs and fraud, waste and abuse. We must
make health care more tailored to what individuals want and need in
their care. The President's FY 2019 budget takes a significant step in
that direction by putting the Medicaid program on a sustainable course
and returning local health-care decisions back to where they should be
made.
Question. Repealing the Medicaid expansion and capping the
traditional Medicaid program would have severe consequences for State
budgets by increasing the number of uninsured residents and leaving
State Medicaid programs with billions fewer dollars in Federal support.
Such cuts would force States to compensate by modifying their
traditional Medicaid programs by limiting enrollment, rolling back
optional benefits--including HCBS--and reducing provider payments, as
the non-partisan Congressional budget Office reported in 2017.
In light of these projections, how does this budget's proposal to
cut and cap the traditional Medicaid program ensure that low-income
children, seniors, and individuals with disabilities do not lose access
to the services and coverage they need?
Answer. The budget's Medicaid proposal is modeled after the Graham-
Cassidy-Heller-Johnson bill, which includes a modernization of Medicaid
financing and repeal of the Obamacare's Medicaid expansion. Medicaid
financing reform will empower States to design individual, State-based
solutions that prioritize Medicaid dollars for traditional Medicaid
populations and support innovations like community engagement
initiatives for able-bodied adults. Additionally, the Market-Based
Health Care Grant Program included in the Graham-Cassidy-Heller-Johnson
legislation will provide more equitable and sustainable funding to
States to develop affordable health-care options for their citizens.
The block grant program will empower States to improve the functioning
of their own health-care market through greater choice and competition,
with States and consumers in charge. Putting States back in charge of
their health-care decisions will allow them to better target resources
to low-income children, seniors and individuals with disabilities.
Question. In January, OCR and HHS issued a proposed rule regarding
protecting the conscience rights of providers that have objections to
certain activities based on their values or religious beliefs.
There is no language included in this proposed rule regarding
discrimination against gay, lesbian, bisexual or transgender
individuals.
Will you commit to including language in the final draft of this
rule to State that the rule does not permit discrimination against LGBT
populations or allow a provider to refuse care or services to an
individual that identifies as LGBT?
Answer. We are currently reviewing public comments on the proposed
rule, and we cannot predetermine the outcome of the notice and comment
process. The Federal conscience laws were passed by Congress with bi-
partisan support in order to prohibit discrimination and to further
diversity in health care. The proposed conscience regulation would
provide mechanisms for enforcement of current Federal laws that have
been under-enforced in the past. HHS is committed to faithfully
applying the facts to the law, and to treating all complainants fairly
under every statute it enforces.
Question. Mental illness affects millions of Americans, regardless
of culture, race, ethnicity, gender, or sexual orientation. As the
primary Federal agency for research on mental illness, the National
Institute of Mental Health (NIMH) is tasked with conducting clinical
research that advances prevention, treatments, and cures for mental
disorders. There is an urgent need for clinical research that addresses
immediate public health needs and reduces disparities among
underrepresented communities. At NIMH, clinical trials are vital to
discovering interventions that are culturally appropriate for each
community.
The Fiscal Year 2019 President's budget would increase funding to
the National Institute of Mental Health (NIMH) by $21 million.
How would NIMH balance the allocation of new resources between
basic and clinical research priorities?
Answer. NIMH strives to maintain a diverse portfolio of short-,
medium-, and long-term investments to maximize impact on public mental
health. Short-term investments include applied research, such as
clinical trials and implementation research; medium-term investments
involve research aimed at understanding mechanisms of illness; and
long-term investments focus on basic research to understand how the
brain works, how it is influenced by environment, and how it guides
behavior. By supporting this diversity of research across timeframes,
NIMH helps those who have mental illnesses now, and funds research that
leads to more effective treatment and prevention programs in the
future. Increased funding would enable NIMH to fund excellent science
across all timeframes that might otherwise go unfunded.
Question. How would NIMH use the additional funding to focus on
clinical research trials that test the effectiveness of mental health
interventions for minority groups and other underserved communities?
Answer. NIMH recognizes the compelling need to assess treatment
efficacy among minority groups and other underserved communities. NIMH
is committed to research focused on decreasing disparities, as
exemplified by the inclusion of mental health disparities as a theme
that cross-cuts its entire NIMH Strategic Plan for Research. NIMH
strives to include adequate numbers of men and women and members of
diverse racial/ethnic groups in research studies--from genomics to
services and clinical research--in order to detect and mitigate these
disparities. In addition, studies of diverse populations can contribute
to our understanding of risks for mental illnesses, responsiveness to
prevention and treatment interventions, and access to, and engagement
in, care.
Through current funding opportunity announcements, NIMH is seeking
research applications to specifically target the reduction and
elimination of mental health disparities. In addition, notable NIMH
clinical research trials directed toward underserved populations
include a safety study of the antipsychotic drug clozapine, and a
community-based study examining adherence to an HIV intervention. NIMH
will continue to support efforts to test effectiveness of mental health
interventions for minority groups. Research on sex, gender, age,
racial, and ethnic differences related to mental disorders will provide
information essential to the development of precision medicine and
personalized interventions.
Question. What steps will NIMH take to increase the diversity of
clinical trial participants across all NIMH funded clinical research
studies?
Answer. NIMH applies NIH policies on the inclusion of women,
minorities, and individuals across the lifespan in clinical
research.\1\, \2\ The NIH Grants Policy Statement (4.1.15.7-
8) requires that applicants address the inclusion of individuals based
on sex/gender, race, and ethnicity in research designs as appropriate
to the scientific objectives of the study.\3\ In addition, the NIMH
Recruitment of Participants in Clinical Research Policy requires
recruitment plans for all NIMH extramural-funded clinical research
studies proposing to enroll 150 or more subjects per study, and all
clinical trials, regardless of size. Consideration must be given to
recruitment plans for females and males, members of racial and ethnic
minority groups, and children. Grantees are encouraged to propose
outreach plans for research participation.\4\
---------------------------------------------------------------------------
\1\ https://grants.nih.gov/grants/funding/women_min/guidelines.htm.
\2\ https://grants.nih.gov/grants/guide/notice-files/NOT-OD-18-
116.html.
\3\ https://grants.nih.gov/grants/policy/nihgps/HTML5/section_4/
4.1_public_policy_
requirements_and_objectives.htm?tocpath=4%20Public%20Policy%20Requiremen
ts%2C%20
Objectives%20and%20Other%20Appropriation%20Mandates%7C4.1%20Public%20Pol
icy%
20Requirements%20and%20Objectives%7C4.1.15%20Human%20Subjects%20Protecti
ons%
7C_____7#4.1.15.7_Inclusion_of_Children_as_Subjects_in_Clinical_Research
\4\ https://www.nimh.nih.gov/funding/grant-writing-and-application-
process/nimh-recruitment-of-participants-in-clinical-research-
policy.shtml.
To increase awareness of opportunities to participate in research,
NIMH provides an online resource for studies conducted at the NIH
Clinical Center.\5\ NIMH also engages with mental health professional
and advocacy groups that focus on health disparities communities.\6\
These efforts provide a unique opportunity to reach diverse groups,
increase awareness about the opportunities to benefit from
participation in mental health research, and increase public access to
science-based mental health information.
---------------------------------------------------------------------------
\5\ https://www.nimh.nih.gov/labs-at-nimh/join-a-study/index.shtml.
\6\ https://www.nimh.nih.gov/outreach/partnership-program/
index.shtml.
Question. The President's FY 2019 budget proposes policies that
will undermine access to essential health services for millions of
---------------------------------------------------------------------------
women across the country.
The budget calls for Congress to exclude providers of abortion,
including Planned Parenthood from the Medicaid program. However,
Planned Parenthood provides preventive care to roughly 2.7 million
patients, at least 60 percent of whom rely on Medicaid or title X to
access care. Excluding Planned Parenthood and other providers from
Medicaid would block these beneficiaries from accessing primary care
and reproductive health services, including contraception, breast and
cervical cancer screenings, vaccines, and testing for sexually
transmitted diseases. As a result, these women could face higher rates
of unintended pregnancy or maternal mortality.
In over 20 percent of counties across America, a Planned Parenthood
health center is that county's only safety-net family planning
provider. How will you ensure access to health care for the women in
these counties?
Experts agree that community health centers do not have the
capacity to provide care to the millions of patients who rely on
Planned Parenthood. What steps will you take to protect access to care
for the 4 in 10 women who rely on Planned Parenthood and similar
providers as their only source of health care?
Answer. Preventing unintended pregnancy is important to women's
health. As I said in my opening statement to the committee, we must
make health care more affordable, more available, and more tailored to
the medical care individuals need. I look forward to working with
Congress to ensure that such a system is in place.
Question. Over 54 percent of Planned Parenthood health centers are
in health professional shortage or medically underserved areas. What
steps will you take to ensure that women in rural and underserved
regions of the country continue to have access to family planning
services?
Answer. Women should have access to the health care and services
they need. The Department is committed to ensuring that women in rural
and underserved regions have access to quality family planning
services. Accordingly, the most recent title X family planning services
funding opportunity announcement (FOA) encourages new applicants to
submit quality and innovative proposals, to expand subrecipient
partnerships in novel ways, and to extend services to those areas and
clients previously unserved or underserved.
Question. The budget also calls for Congress to bring back the
Graham-Cassidy-Heller proposal, which proposed establishing a new State
block grant program. This program would have permitted States to waive
certain consumer protection mandates for insurers, including the
requirement that insurers cover maternity care as an essential health
benefit. The non-partisan Congressional Budget Office projected that if
insurers are permitted to waive essential health benefits, many will
forgo coverage to maternity care given its high cost. Consistent with
this projection, prior to the Affordable Care Act, only 11 States
required maternity coverage on the individual and small-group markets.
Reducing access to coverage for maternity care will make it more
difficult for women to find plans that cover these services, and will
likely drive up the cost of plans that offer such services. Does this
administration believe women should have to pay more for coverage to
access care essential to women's health?
Does this administration support allowing States to decide whether
women should be guaranteed access to coverage for maternity care?
Answer. I support ensuring access to health care for all Americans.
I will work to promote a health-care system that will provide access to
quality care, while ensuring patients are able to make decisions that
work best for them. I will also work with States to help them achieve
their goals within the parameters and confines of the law.
Question. On January 25th, the Associate Attorney General for the
Department of Justice (DOJ) issued a memorandum to the DOJ's civil
litigating components instructing United States attorneys on the legal
enforceability of guidance for administrative enforcement actions. This
memorandum stated that going forward, noncompliance with guidance could
not create new legal obligations on regulated parties and could not be
used as a basis for proving legal violations, including in cases
brought under the False Claims Act.
Please explain how this Department of Justice memorandum will
impact the Department of Health and Human Services' efforts to combat
fraud and abuse in programs under the Senate Finance Committee's
jurisdiction, including the Medicare and Medicaid programs.
Answer. The Department of Justice memorandum instructs Department
civil litigators that they are prohibited from using guidance documents
to establish violations of law in affirmative civil enforcement
actions. While guidance documents can be helpful, too often
administrations have used them to circumvent the rulemaking process.
The Department of Justice's memorandum helps clarify that guidance
documents cannot create additional legal obligations. The relevant laws
covering fraud and abuse within Department programs, including Medicare
and Medicaid, are still in effect. I remain committed to fighting all
fraud, waste, and abuse in our programs and I look forward to
discussing with you how we can work together to do this.
Question. Please describe the justification for converting the
Maternal, Infant and Early Childhood Home Visiting program from a
mandatory to discretionary program.
Answer. The administration viewed the higher spending caps as an
opportunity to resolve some long-standing budget challenges across the
Federal budget, including the use of funding for types of activities
that would more typically be supported with discretionary resources.
Question. Medicaid is the single largest payer of substance use
disorder (SUD) 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 employed the Medicaid
expansion to increase access to MAT including Kentucky, 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. 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 President's budget aims
to directly undermine much of this progress by gutting the Medicaid
program.
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 $1.4 trillion 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. The Congressional Budget
Office projected millions of Americans would lose coverage under the
Graham-Cassidy-Heller-Johnson proposal. 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?
Answer. Our Medicaid program is an important tool in providing
health care to many Americans but we must put it on a stable, long-term
sustainable footing for it to be there for this and future generations.
That's the challenge that we have as we seek to empower the States with
the right incentives to deliver quality service. The FY 2019 budget
provides additional flexibilities to States, puts Medicaid on a path to
fiscal stability by restructuring Medicaid financing, and refocuses on
the populations Medicaid was intended to serve--the elderly, people
with disabilities, children, and pregnant women. Annual Federal
Medicaid spending will grow from $421 billion in FY19 to $702 billion
in FY28 over the budget window. The FY 2019 budget also repeals the
Medicaid expansion and the Exchange program subsidies and replaces
these programs with the $1.2 trillion Market-Based Health Care Grant
program through the Graham-Cassidy-Heller-Johnson legislation.
Opioid misuse, abuse, and overdose impose immense costs on the
Nation, contributing to two-thirds of deaths by drug overdose. Deaths
by drug overdose are the leading cause of injury death in the United
States. The FY 2019 President's budget recognizes the devastation
caused by the opioid crisis in communities across America and fulfills
the President's promise to mobilize resources across the Federal
Government to address the epidemic. The budget provides a historic
level of new resources across HHS to combat the opioid epidemic and
serious mental illness--$10 billion--to build upon the work started
under the 21st Century Cures Act.
The budget's targeted investments advance the Department's five
part strategy, which involves:
Improving access to prevention, treatment, and recovery
services, including medication-assisted treatment;
Targeting availability and distribution of overdose-reversing
drugs;
Strengthening our understanding of the epidemic through better
public health data and reporting;
Supporting cutting edge research on pain and addiction; and
Advancing better practices for pain management.
Question. Earlier this fall, ACF blocked for 2 years the
implementation of the AFCARS rule which would have provided decision
makers with new key information on children in the child welfare system
including children at-risk of sex trafficking. This information is used
to inform policy and help us understand what is happening with children
who are removed from their homes. The questions asked of States about
their children in foster care have NOT been updated since 1993. Since
then, several major laws have been enacted that statutorily mandate
that these upgrades take place and charge HHS with using new
enforcement tools.
Earlier this month I sent a letter to your department outlining
these issues. In my view, this 2-year delay is completely unreasonable.
Please explain the policy rationale for this 2-year delay.
Answer. HHS is publishing an Advance Notice of Proposed Rulemaking
(ANPRM) seeking public suggestions for streamlining the AFCARS data
elements and removing any undue burden related to reporting AFCARS. The
HHS Regulatory Reform Task Force identified the extensive additions to
the reporting system included in the December 2016 AFCARS final rule as
an area where there may be areas for reducing reporting burden and
where costs may exceed benefits. The proposed 2-year delay in
implementation of the new requirements would allow HHS time to consider
the comments to the ANPRM and use them to draft a NPRM proposing
revisions to the AFCARS consistent with the objectives and direction of
E.O. 13777. It would also allow title IV-E agencies ample time to
consider the full impact the data reporting from the 2016 AFCARS rule
and provide HHS with specific comments on the burden associated with
the 2016 rule.
Question. Do you believe delaying congressionally mandated data
collection is consistent with HHS's authority?
Answer. Section 479 of the Social Security Act requires us to
regulate the AFCARS requirements. There is no legislative deadline
established in the act for updating or issuing regulations. Therefore,
it is within our authority to issue regulations and revise the
regulations. Title IV-E agencies will continue to submit AFCARS data
per the requirements in regulations 45 CFR 1355.40 and the appendix to
part 1355.
Question. How do you square HHS's decision to delay this
improvement to child welfare data with your stated priorities related
to improving Federal data and program management?
Answer. The delay provides HHS with time to consider the best
approach to improving child welfare data that balances the need for
improved data with the burden of reporting by title IV-E agencies. Our
effort is to ensure that we are collecting the data required by law and
needed for program management, and not creating an unnecessary burden
for agencies when their time and resources could instead be used to
directly help children.
Question. In your questions for the record for your nominations
hearing, you cited data indicating support of the 1996 welfare reform
law in demonstrating increased employment rates for single mother-led
families and decreased poverty rates among single mother-led families.
It seems that you are supportive of TANF and how it has impacted
welfare in the United States. The President's budget included a 10% cut
in funding for TANF.
If TANF has been a successful program, why would the budget propose
to cut it?
Answer. TANF's 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, and, not
from the amount of dollars spent. Moreover, since TANF's inception,
cash assistance caseloads have fallen about 70 percent. 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.
Question. As a general matter, do you support cutting funding for
successful programs?
Answer. This administration supports using taxpayer funds as
efficiently as possible for the purposes they are intended. For
example, in the TANF program, many States are not sufficiently
investing their current dollars in TANF's key welfare-to-work
activities. In fiscal year 2016, States spent only about 31 percent of
their total TANF and State maintenance-of-effort funds on the
combination of work, work supports like child care and transportation
services, and case management services. States do not need more money
in the TANF program; they need to target the money more effectively to
help move individuals to stable work that can lead to self-sufficiency.
We are confident States could find ways to use more of their block
grant funds to increase engagement in work, and would be encouraged to
do so with the proposed spending floor. States use a significant amount
of TANF funds to fill State budget gaps in areas that are tangential,
at best, to the core purposes of TANF. This includes spending on
college scholarships for students from families who earn incomes well
above the Federal poverty level.
Question. In the President's proposed FY 2019 budget, the
administration makes clear that it intends to bring back the failed
Graham-Cassidy-Heller-Johnson proposal, legislation that would gut the
Affordable Care Act's consumer protections--legislation that the
American people clearly rejected last year. Indeed during the
committee's hearing on the Graham-Cassidy-Heller-Johnson proposal last
fall, the witness from the American Cancer Society confirmed that this
proposal would allow insurance companies to discriminate against
Americans with pre-existing conditions and impose annual caps on
coverage.
Does the administration believe insurers should be able to
discriminate against individuals with pre-existing conditions by
charging them more for their health insurance coverage or not covering
essential services?
Answer. The ACA statutory requirements here are very strict and
burdensome. While this may help some consumers, it also prevents States
from developing innovative solutions that are tailored to their
populations. I believe that when States are not permitted to innovate,
everyone is worse off. Affordability, accessibility, benefit options,
and procedural safeguards are all valuable, but our current top-down,
Federally driven approach is not working well for Americans. I will
work with States to allow innovation within the confines of the ACA.
Question. Does the administration believe that insurers should be
able to refuse to cover maternity care or birth control, as many States
allowed before the Affordable Care Act?
Answer. I look forward to working across the administration and
with Congress to ensure that women have access to the care they need--
that may include care for cancer, diabetes, maternity care, family
planning, cardiovascular health and many other issues affecting women,
men and families--while simultaneously implementing the many
conscience-protections that Congress has enacted.
Question. Does the administration believe that insurers should be
able to charge older Americans even more for their insurance premiums
than they are able to today, as AARP confirmed would happen under the
Graham-Cassidy-Heller-Johnson proposal?
Answer. There is an emerging bipartisan consensus that the ACA's
structure is fundamentally flawed in this area. The age rating
structure as currently in statute does not allow for functional risk
pooling. Under the ACA age rating requirements, insurance is
unaffordable for younger and healthier individuals. That is why older
enrollees currently represent the largest share of enrollees. As a
result, premiums have risen for older and younger Americans far beyond
anything that would have occurred in a stable risk pool even with a
more realistic age rating structure. This is a problem we must all work
together to solve, as effective and predictable risk pools are critical
to the success of any health insurance system. I pledge to work with
Congress on health-care reforms that create effective risk pools.
Question. During your confirmation hearing last month, you pledged
to be responsive to members of the Finance Committee. Following the
hearing, in response to questions for the record from Senator Casey,
you wrote that you would be responsive to all members of Congress.
Therefore, I was extremely concerned by the inadequate reply that three
congressional colleagues and I received in response to a January 31st
letter to you and Administrator Verma regarding changes to Idaho's
insurance regulations. On February 9th, Administrator Verma responded
to that letter without even attempting to answer the questions that had
been posed, before doubling down by saying that CMS ``does not have any
additional information to share.'' Absent any other correspondence,
Administrator Verma's letter appears to represent the Department's
position, which is simply unacceptable. It also appears to continue the
Department's general lack of responsiveness to Congress that has become
commonplace since the beginning of the Trump administration, and been
subject to criticism from both parties, most recently by Congressman
Gowdy in a letter to you. As such, let me take this opportunity to
restate Senator Casey's written question from your confirmation
hearing--do you commit to providing thorough, complete, and timely
responses to requests for information from all members of Congress,
including requests from members in the minority? Will you review the
letter that I and other colleagues sent you on January 31st and
Administrator Verma's response and let us know whether you will provide
answers to the questions we asked?
Answer. Thank you for bringing this matter to my attention.
Regarding this particular communication, it is my understanding that in
an effort to provide timely responses to incoming congressional
inquiries, and given that the Department had not yet received any
communication from the State, there was no additional information to
provide in response to the questions at that time.
I continue to pledge that I will work with my staff to ensure that
the Department's responses to requests from Congress are timely,
appropriate, and reasonable. However, at the time of this response, the
Department did not have information to share regarding the Idaho
bulletin.
Question. The Idaho Department of Insurance issued a Bulletin on
January 24th allowing insurers in Idaho to submit so-called ``State-
based health benefit plans'' or ``State-based plans.'' Idaho would
allow these plans to ignore many of the Affordable Care Act's consumer
protections including prohibitions on charging individuals more for
pre-existing conditions, annual limits, geography, as well as expanding
age rating ratios to 5:1. Recently, Blue Cross of Idaho announced that
they would be the first plan to submit insurance plans under this new
program. The application for these plans includes numerous questions
about the applicant's health status and family history, presumably to
medically underwrite the applicant.
Do you think it violates Federal law for an insurance company to
ask these kinds of very personal questions? If an insurer is following
the law barring discrimination against those with pre-existing
conditions, why would they need this information?
In your confirmation hearing, you committed to upholding the law.
Major patient groups and legal experts believe that Idaho is violating
the law. What specific actions are you taking and do you plan to take
to ensure that Idaho follows Federal law?
Why, if what Idaho is doing is illegal or wrong, is the
administration's proposal that allows issuers to sell similar or even
lower quality plans renamed as ``short-term plans,'' legal or not
wrong?
Answer. I am committed to working with States to grant flexibility
wherever appropriate to provide their citizens the best possible access
to health care. However, the Affordable Care Act remains the law. CMS
informed the State that its State-based plan proposal, as originally
issued, is inconsistent with the law.
The Department looks forward to working to explore ways in which
Idaho can achieve its policy goals ensuring that health insurance
coverage sold within the State complies with all applicable Federal
laws and requirements.
______
Questions Submitted by Hon. Maria Cantwell
Question. I understand the President's budget proposes statutory
changes similar to the so-called Graham-Cassidy legislation. Numerous
nonpartisan evaluations, including those performed by the Congressional
Budget Office, have found that
Graham-Cassidy would reduce insurance coverage and sharply lower
Federal Medicaid investment, relative to current law. I am concerned
that Graham-Cassidy would consequently lead to large spikes in hospital
uncompensated care levels. Does the administration project that
enacting the Graham-Cassidy legislation will not increase levels of
hospital uncompensated care, and if so, what is the administration's
rationale for that projection?
Answer. The administration is committed to rescuing States,
consumers, and taxpayers from the failures of Obamacare and to
supporting States as they transition to more sustainable health-care
programs that provide appropriate choices for their citizens. The
budget supports a two-step approach to repealing and replacing
Obamacare, starting with enactment of legislation modeled closely after
the Graham-Cassidy-Heller-Johnson bill, as soon as possible. The
administration supports the comprehensive Medicaid reform in the
Graham-Cassidy-Heller-Johnson bill, including modernization of Medicaid
financing and repeal of the Obamacare's Medicaid expansion. Medicaid
financing reform will empower States to design individual, State-based
solutions that prioritize Medicaid dollars for traditional Medicaid
populations and support innovations like community engagement
initiatives for able-bodied adults. Additionally, the Market-Based
Health Care Grant Program included in the Graham-Cassidy-Heller-Johnson
legislation will provide more equitable and sustainable funding to
States to develop affordable health-care options for their citizens.
The block grant program will empower States to improve the functioning
of their own health-care market through greater choice and competition,
with States and consumers in charge. The second step of the repeal and
replace proposal builds upon the Graham-Cassidy-Heller-Johnson bill to
make the system more efficient by including proposals to align the
Market-Based Health Care Grant Program, Medicaid per capita cap, and
block grant growth rates with the Consumer Price Index for all Urban
Consumers.
Question. In addition to proposing the Graham-Cassidy legislation,
I understand the President's budget calls for a net reduction of $69.5
billion in Medicare uncompensated care payments to hospitals over a 10
year period. What is the administration's policy rationale for this
proposal?
Answer. This proposal would remove uncompensated care payments from
the Inpatient Prospective Payment System and establishes a new process
to distribute uncompensated care payments to hospitals based on share
of charity care and non-Medicare bad debt. This proposal more closely
aligns Medicare payment policy with private insurers, who do not
typically cover uncompensated care.
Question. I appreciate that your budget includes a proposal to
expand beneficiary assignment rules for Medicare Accountable Care
Organizations (ACOs) to include primary care visits furnished by non-
physician providers. Your budget also projects that this statutory
change would yield $140 million in savings over 10 years, presumably to
the Medicare program. What are the administration's assumptions for
this cost-saving estimate, and does the administration believe that
more Medicare beneficiaries would participate in an ACO under this
proposal?
Answer. Effective CY 2019, this proposal allows the Secretary to
base beneficiary assignment on a broader set of primary care providers,
to include nurse practitioners, physician assistants, and clinical
nurse specialists, in addition to physicians. This option broadens the
scope of Accountable Care Organizations to better reflect the types of
professionals that deliver primary care services to fee-for-service
beneficiaries. Potentially assignable beneficiaries could increase for
ACOs that rely on non-physician practitioners for a majority of primary
care services, such as those in rural or underserved areas. As the
program's goals are to improve quality of care received by Medicare
fee-for-service beneficiaries while reducing overall growth in costs,
broader participation could help improve care received by beneficiaries
and lower Medicare expenditures.
By expanding the basis for beneficiary assignment to better reflect
the types of professionals that deliver primary care services, the
proposal would move more beneficiaries to value-based care.
Question. In the past, we have discussed the importance of
accelerating Medicare's transition from fee-for-service to a value-
based payment system. I understand that your budget proposes a
statutory change to the 5 percent bonus for participation in an
Advanced Alternative Payment Model (A-APM) under Medicare's new
physician payment framework. The HHS budget in brief document states
that this change will better incent clinicians to participate in A-
APMs. Could you further explain the mechanisms of this proposed change?
Specifically, could you explain whether HHS projects that, under this
proposal, the aggregate level of A-APM bonus payments would rise, fall,
or stay the same compared to current law? Additionally, why is HHS
unable to make a cost or savings estimate for this proposal?
Answer. The President's budget proposes to modify how the 5-percent
incentive payment is determined in order to better reward clinicians
who participate in Advanced Alternative Payment Models (APMs). Instead
of receiving a 5-percent incentive payment on all physician fee
schedule (PFS) payments if they meet or exceed certain payment or
patient thresholds, clinicians will receive a 5-percent incentive
payment on PFS revenues received through the Advanced APMs in which
they participate.
This proposal changes two major aspects of the QP determination
process and how the 5-percent incentive is calculated: it eliminates
the payment and patient thresholds for becoming a QP. All clinicians in
Advanced APMs would be eligible for incentive payments. It also alters
how the 5-percent incentive payment is calculated. Instead of being
calculated based on the total PFS payments from the previous year, it
is based on the payments clinicians received through the Advanced APM.
______
Questions Submitted by Hon. Bill Nelson
Question. Last week at the House Budget Committee hearing, the
Office of Management and Budget Director said the FDA will apply a new
set of standards to the cost-benefit analyses involved in the review of
premium cigar regulations. He also expressed a willingness to work with
Congress and all stakeholders on this issue moving forward. In light of
these commitments from the OMB, would HHS consider delaying upcoming
deadlines pending the release of the Advanced Notice of Proposed
Rulemaking (ANPRM)?
Answer. Thank you for the opportunity to clarify FDA's work in this
area. Due to the continued interest in the regulation of ``premium''
cigars, FDA intends to provide an opportunity for the public to provide
new information for the agency to consider. In particular, FDA is
seeking comments and scientific data related to how to define a
``premium'' cigar and the patterns of use and resulting public health
impacts from these products. This has taken the form of a new Advance
Notice of Proposed Rulemaking (ANPRM). While ANPRMs do not contain
cost-benefit analyses, the agency is seeking any information that may
inform regulatory actions FDA might take with respect to premium
cigars. The agency will explore any new and different questions raised
and consider additional data that is relevant to the regulatory status
of premium cigars.
In the meantime, the tobacco deeming rule, including upcoming
compliance dates, will remain in effect based on FDA's previous
determination that there was no appropriate public health justification
to exclude ``premium'' cigars from regulation.
Question. Last week, a former student at Marjory Stoneman Douglas
High School in northern Broward County, Parkland, Florida, walked on to
campus carrying an AR-15 assault rifle and opened fire killing 17
students and teachers.
This incident marked the 30th mass shooting in 2018 alone. The
victims of this act of gun violence were children--high school students
with promising futures. How many more lives must be lost until we say
enough is enough?
Sandy Hook elementary, 20 students killed. That wasn't enough. The
Pulse nightclub in Orlando, 49 people killed. That wasn't enough. Las
Vegas, 58 people killed, that wasn't enough. Or just a year ago also in
Broward county, Fort Lauderdale airport, five people killed. That
wasn't enough. In his speech addressing the Parkland shooting,
President Trump pledged to work with State and local leaders to
``tackle the difficult issue of mental health.'' Yet, the budget
proposal guts billions from programs critical to increasing access to
mental health treatment, including Medicaid--the single largest payer
of mental health services in the United States. It also slashes
spending for established programs within the Substance Abuse and Mental
Health Administration by over $600 million, and revives a tried and
failed approach to repealing the Affordable Care Act through the
Graham-Cassidy bill. This is the same bill that the National Alliance
on Mental Illness has said would allow States to drop the requirement
to cover mental health care.
Tell me, do you stand by your cuts to critical mental health
programs in light of the President's call to ``tackle'' mental health?
Answer. The FY 2019 budget includes funding for State and local
programs to help individuals with serious mental illness (SMI) and
serious emotional disturbances (SED), including: $563 million for the
Community Mental Health Services Block Grant, $15 million for a new
Assertive Community Treatment for Individuals with SMI program to help
communities establish, maintain, or expand evidence-based efforts to
avoid the ineffective cycling of patients with SMI, and directs up to
10 percent or $12 million of the Children's Mental Health Program to
new,
evidence-based demonstration grants for earlier intervention in a first
episode psychosis. The President's budget also includes $10 billion to
address the opioid crisis and SMI.
Question. Under the last administration, the National Institutes of
Health sponsored a new funding opportunity under the National Institute
of Mental Health and the National Institute on Alcohol Abuse and
Alcoholism for ``Research on the Health Determinants and Consequences
of Violence and its Prevention, Particularly Firearm Violence.'' The
gun violence research initiative has funded 14 firearm related research
projects for $11.4 million from January 2014 to January 2017 to help us
identify the causes and factors for the prevalence of gun violence in
our country. According to news reports, the NIH initiative expired in
January 2017 and has yet to be renewed.
Do you support the renewal of the gun violence research program at
the National Institutes of Health?
Answer. A key component of NIH's mission is to enhance health,
lengthen life, and reduce illness and disability. In the spirit of this
mission, NIH is committed to understanding effective public health
interventions to prevent violence, including firearm violence, and the
trauma, injuries, and mortality resulting from violence. NIH-funded
research on the causes and prevention of firearm violence addresses a
range of topics, such as parental roles in preventing injury--including
injuries from firearms--in the home and in other settings, the
relationship between alcohol abuse and gun violence, risk factors for
gun violence, appropriate containment measures to reduce risk of
suicide or accidental deaths among children and adolescents, as well as
determinants that make war veterans at higher risk for suicide with
guns.
NIH has supported research on firearm violence for many years, and
it will continue to support this area of research in the future.
Question. Amyotrophic Lateral Sclerosis (ALS) is a progressive
disease that results in the loss of muscle control and leads to death
within 2 to 5 years after diagnosis. They may stop walking, speaking,
eating, moving, or even breathing. The incidence of ALS in the military
is twice that of civilians, but it can affect anyone. There is no cure,
and treatments are extremely limited.
The National ALS Registry, at the Centers for Disease Prevention
and Control, is a unique patient and research asset for this
devastating disorder. The Registry connects people living with ALS with
information for clinical trials. To date, more than 100,000 email
notifications have been sent to people with ALS alerting them of
clinical trials and studies.
The Registry also includes a biorepository which collects
biological samples, which are a critical resource for researchers who
are investigating treatments and a cure for ALS. The Registry has
collaborated and assisted more than 35 institutions, both
pharmaceutical and academic, with recruitment for their clinical trials
and epidemiological studies. In addition, the ALS Registry has funded
13 research institutions to identify risk factors and possible causes
for ALS. The ALS Registry has received bipartisan support and is
typically funded with an appropriation of $10 million. Without the
registry, research on ALS would be set back considerably.
Please describe how the administration's FY 2019 budget request
will advance the operation of this essential initiative.
Answer. While the FY 2019 President's budget eliminates the
Amyotrophic Lateral Sclerosis (ALS) registry and related research
program, NIH-funded research on ALS will continue. External researchers
would still be able to use biospecimens previously obtained from the
ALS biorepository.
Question. The opioid crisis is devastating families across the
Nation. In Florida alone, 5,275 opioid-related deaths were reported in
2016--35 percent more than reported in 2015. Fentanyl killed 1,390
Floridians, nearly double the 705 Floridians killed by fentanyl a year
before. I've long called for a comprehensive solution that includes new
resources to prevent and treat the opioid epidemic before more lives
are lost. The President's budget proposes a $10-billion investment into
combating the opioid epidemic. I share this goal, but this modest
increase in funding is coupled with a massive cut to Medicaid--to the
tune of nearly $1.4 trillion in cuts. Medicaid is the largest payer of
substance abuse services in the country.
Explain how States like Florida can help communities fight the
opioid epidemic if you cut billions from Medicaid.
Answer. Our Medicaid program is an important tool in providing
health care to many Americans but we must put it on a stable long-term
sustainable footing for it to be there for this and future generations.
That's the challenge that we have as we seek to empower the States with
the right incentives to deliver quality service. The FY 2019 budget
provides additional flexibilities to States, puts Medicaid on a path to
fiscal stability by restructuring Medicaid financing, and refocuses on
the populations Medicaid was intended to serve--the elderly, people
with disabilities, children, and pregnant women. Annual Federal
Medicaid spending will grow from $421 billion in FY19 to $702 billion
in FY28 over the budget window. The FY 2019 budget also repeals the
Medicaid expansion and the Exchange subsidies and replaces these
programs with the $1.2 trillion Market-Based Healthcare Grant program
through the Graham-Cassidy-Heller-Johnson legislation.
Opioid misuse, abuse, and overdose impose immense costs on the
Nation, contributing to two-thirds of deaths by drug overdose. Deaths
by drug overdose are the leading cause of injury death in the United
States. The FY 2019 President's budget recognizes the devastation
caused by the opioid crisis in communities across America and fulfills
the President's promise to mobilize resources across the Federal
Government to address the epidemic. The budget provides a historic
level of new resources across HHS to combat the opioid epidemic and
serious mental illness--$10 billion--to build upon the work started
under the 21st Century Cures Act.
The budget's targeted investments advance the Department's five
part strategy, which involves:
Improving access to prevention, treatment, and recovery
services, including medication-assisted treatment;
Targeting availability and distribution of overdose-reversing
drugs;
Strengthening our understanding of the epidemic through better
public health data and reporting;
Supporting cutting edge research on pain and addiction; and
Advancing better practices for pain management.
Question. Over 5,658 cases of Zika virus have been reported across
the U.S. States and territories. No State has been hit harder by the
Zika outbreak than Florida. The State has seen more than 1,735 reported
cases of the Zika virus to date and reported 255 new cases of Zika in
2017. In 2016, I fought to secure funding to address the Zika crisis.
Congress ultimately approved $1.1 billion to combat the threat. These
funds made critical investments into agencies to support vaccine
development and better understand the virus; to bolster vector control
and enhance laboratory capacity; and to support Zika-related health
care, to name a few.
The administration's proposed budget slashes the very programs
Congress voted to fund in 2016 so they could help prevent, control and
research the spread of Zika. The cuts are numerous, but here are a few
highlights. Compared to 2017, it cuts $27 million from the CDC's
National Center on Birth Defects and Developmental Disabilities, $68
million from the CDC's Center for Emerging and Zoonotic Infectious
Disease, $58 million from CDC's National Center for Environmental
Health, and $602 million from the CDC's Office of Public Health
Preparedness and Response, all of which are central to Zika
surveillance and control.
Given these cuts, do you believe the administration is doing
everything it can to prepare for public health threats, like a Zika
outbreak?
How would you justify the cuts to Zika control programs to my
constituents in Florida with mosquito season right around the corner?
Answer. Preparedness for public health threats is of critical
importance to us at the Department. Specifically, the Centers for
Disease Control and Prevention (CDC) helps to protect America's health,
safety, and security by working to prevent, detect, and respond to a
wide range of public health threats, from anthrax and Ebola to
Salmonella food poisoning and Zika.
A large portion of the proposed cut to CDC includes a $575 million
reduction representing the transfer of the Strategic National Stockpile
from CDC to ASPR. Those funds will continue to be used to maintain and
replenish the Nation's largest supply of life-saving medical
countermeasures that can be deployed in the event of a public health
emergency. This transfer will streamline the medical countermeasure
development and procurement enterprise and will increase operational
efficiencies during emergency response by fully integrating the
Stockpile with other preparedness and response capabilities.
With the remaining funding requested by the administration, CDC
will prioritize efforts to maintain its critical preparedness and
response infrastructure. CDC may reduce ongoing core preparedness
activities (e.g., preparedness exercises, timeliness of reporting
critical information, applied research for first responders, select
agent training, etc.) and prioritize funds to address the most urgent
needs.
CDC's vector-borne diseases program is the core of our Nation's
capacity to detect, control, and prevent pathogens transmitted by ticks
and insects. The FY 2019 President's budget maintains the elevated
level of funding proposed in the FY 2018 President's budget for vector-
borne diseases at $49.459 million, which is $12.601 million above the
FY 2018 Annualized Continuing Resolution. At this funding level, CDC
would provide enhanced support for up to nine States at the greatest
risk for vector-borne disease outbreaks. Each vector program would
include increasing State entomological expertise, as well as support
for laboratory activities, case and outbreak investigation activities,
and vector control and management activities.
CDC's FY 2019 President's budget, also proposes a $10 million
investment to continue the Zika Pregnancy and Infant Registry in four
to eight high risk U.S. jurisdictions. With this investment, CDC will
be able to continue to follow the outcomes of babies exposed to Zika
during pregnancy in these jurisdictions, and provide on-the-ground
support to a small number of cities or counties at highest risk from
either local transmission or travel. Overall, this investment would
allow the CDC to understand the full spectrum of Zika-associated birth
defects, and maintain capacity at a small number of health departments
to identify and track emerging threats that potentially cause birth
defects or developmental disabilities.
Question. The Federal Government supports patient care and
physician training at the Nation's teaching hospitals through Medicare
Graduate Medical Education (GME) payments. The United States is facing
a massive physician shortage of up to 104,900 physicians by 2030.
Yet, the President's budget makes more than $48 billion in cuts
over the next 10 years to GME by consolidating GME spending from
Medicare, Medicaid, and the Children's Hospital GME program into a
single grant program. The budget proposes to adjust FY 2016 spending
levels each year by the Consumer Price Index (CPI-U) minus 1 percent.
This would cause enormous harm to the future physician supply in our
country, and threaten what is usually stable Medicare funding for
training doctors.
For the past several Congresses, I have introduced the Resident
Physician Shortage Reduction Act, this year with Senator Heller, to
increase the number of residency slots eligible for Medicare GME
support. Investing in the training of the next generation of physicians
will not only address our country's growing health-care needs, but it
will keep us as a leader in health-care innovation. We should pass my
bill and expand support of GME in this Nation, not enact draconian
cuts.
Please explain how the administration reconciles the need to
address the physician shortage while also proposing $50 billion in cuts
to GME funding?
How should teaching hospitals absorb these cuts?
Answer. The budget proposes to better focus Federal spending on GME
by consolidating spending that is currently in the Medicare, Medicaid,
and Children's Hospital GME Payment Program into a new capped Federal
grant program. In an effort to improve the distribution of specialties
in health care, to address health-care professional shortage areas, and
to incentive better training of professionals, funding would be
distributed to hospitals that are committed to building a strong
medical workforce and would be targeted to address medically
underserved communities and health professional shortages.
Payments would be distributed to hospitals based on the number of
residents at a hospital (up to its existing cap) and the portion of the
hospital's inpatient days accounted for by Medicare and Medicaid
patients. Funding for this consolidated, single grant program for
teaching hospitals would be equal to the sum of Medicare and Medicaid's
2016 payments for graduate medical education, plus 2016 spending on
children's hospitals graduate medical education, adjusted for
inflation. Funding would increase at a rate of inflation minus 1
percentage point each year.
In addition, the National Health Service Corps (NHSC) and Teaching
Health Center GME (THCGME) programs will continue to address health
professions shortages NHSC serves as a vitally important recruitment
tool for community health centers and other health-care entities
nation-wide operating in underserved areas where shortages of health-
care professionals exist. In FY 2017, the NHSC had over 2,000
physicians providing health-care services in NHSC-approved sites. In
addition, the THCGME program supports primary care medical and dental
residency programs in community-based ambulatory patient care settings.
In Academic Year 2017-2018, the THCGME program supports the training of
732 residents in 57 primary care residency programs.
______
Questions Submitted by Hon. Robert Menendez
Question. The FDA received additional funding for FY 2019. How much
of this money do you anticipate going to promote investment into
production of older generics that have only one or two producers to
keep costs low?
Answer. I understand the importance of having multiple generic
applications approved, including for older generics, to help provide
American consumers with lower-cost medicines. Under FDA's Manual of
Policy and Procedure (MAPP) on Prioritization of the Review of Original
ANDAs, Amendments, and Supplements (Prioritization MAPP), the agency
prioritizes the review of generic applications: (1) for ``sole source''
drug products, where there is only one approved drug product listed in
the Prescription Drug Product List (i.e., the ``active section'') of
FDA's Approved Drug Products With Therapeutic Equivalence Evaluations
(Orange Book) and for which there are no blocking patents or
exclusivities; and (2) for drug products for which there are not more
than three approved drug products listed in the Orange Book and for
which there are no blocking patents or exclusivities listed for
reference listed drug.
In addition, under the Commissioner's Drug Competition Action Plan
(DCAP), the agency has taken substantial steps to facilitate increased
competition through the approval of lower-cost generics medicines. In
the coming months, FDA will continue to take actions to enhance the
efficiency of the generic drug review process, to maximize scientific
and regulatory clarity with respect to generic drugs, and to reduce
``gaming tactics'' by brand name drug companies that delay the generic
competition Congress intended when it enacted the Hatch-Waxman
Amendments. All these actions are intended to help ensure consumers can
get the medicines they need at affordable prices.
FDA cannot determine the precise amount of funding that will go
toward older generics, as we do not ultimately control which drugs the
generics industry chooses to submit marketing applications for, but the
actions we are taking should help encourage industry to invest in the
development of older generics that have minimal competition.
Question. Will the FDA's New Medical Data Enterprise take into
account the current lack of true representation of all patient
populations in clinical trials and address the need for greater
inclusion of women and minorities in clinical trials?
Answer. The FDA will advance the use of real-world evidence to
better inform patient care and provide more efficient, robust, and
potentially lower-cost ways to develop clinical data that can inform
product review and promote innovation. The FDA will establish new
capabilities, including the development of data and analytical tools,
to conduct near-real-time evidence evaluation down to the level of
individual electronic health records for at least 10 million
individuals in a broad range of U.S. health-care settings and
populations beyond those who typically participate in clinical trials.
Toward these ends, an expanded use of natural language processing
for the assessment of information submitted to the agency would be
developed in an effort to markedly speed recognition and remediation of
emerging safety concerns in a variety of populations. The effort would
cover a broad range of medical products, including drugs, biologics,
and medical devices. The health-care settings would be carefully
selected to cover data gaps in the Sentinel and National Evaluation
System for health Technology (NEST) systems for FDA-regulated products
not currently easily assessed with existing systems.
Expanding the FDA's capacity to utilize real-world evidence to
evaluate the pre- and post-market safety and effectiveness of medical
products would generate processes that could improve the efficiency of
the regulatory process, better inform patients and providers about pre-
and post-market safety, reduce some of the burdens that drive up the
time and cost required to bring beneficial innovations to the market
and address barriers that can make certain important safety and
effectiveness information around the real-world use of products hard to
collect and evaluate (e.g., subpopulation evaluations based on sex,
gender, race, ethnicity, age). The use of real-world evidence may allow
subpopulation evaluations beyond those conducted in the controlled
setting of a clinical trial and expand our knowledge base to further
reflect actual usage and experience by a wider population.
The agency has already leveraged the use of real-world data to
reduce the time and cost of clinical evidence development resulting in
more timely and informative post-market data collection and more timely
and efficient approvals of new devices and expanded indications of
already marketed drugs and devices, including for drug-eluting stents,
pacing leads, companion diagnostics, a spinal cord stimulator, and a
pediatric ventricular assist device. In the case of transcatheter heart
valves, leveraging real-world evidence has already resulted in a
greater than 400-percent cost savings for industry, improved post-
market surveillance, and moved the United States from 42nd to, in some
cases, first-in-the-world approvals for life-saving technologies.
Question. The CDC's ability to study gun violence has been limited
by a 1996 amendment (the ``Dickey Amendment'') that prevents the agency
from collecting data to ``advocate or promote gun control.'' On
February 15, 2018, you told a House Energy and Commerce subcommittee
that a provision passed 2 decades ago limiting the CDC's work on gun
violence only prevents it from taking an advocacy position--not from
doing research. Specifically, you said, ``[m]y understanding is that
the [Dickey] rider does not in any way impede our ability to conduct
our research mission. . . . We believe we've got a very important
mission with our work with serious mental illness as well as our
ability to do research on the causes of violence and the causes behind
tragedies like [Parkland]. So that is a priority for us.''
As Secretary of Health and Human Services, will you direct the CDC
to conduct research into gun violence? If yes, please be specific as to
the steps you will take.
Answer. At HHS, we are always working to keep Americans safe from
public health threats including violence. CDC currently conducts and
funds research on a variety of related topics, including youth
violence, child abuse and neglect, domestic violence, and sexual
violence. These are the topical line items that are supported through
CDC's annual appropriation for both research and non-research
activities. In order to fund new research, we must make decisions about
moving funds from other important areas. We will continue to support
surveillance activities, epi-aid investigations, and analyses of
surveillance and other data to document the public health burden of
firearm injuries in the United States.
Question. Do you believe that gun violence is a public health
issue?
Answer. Violence is certainly a public health issue of importance
and one that HHS continues to study. We are committed to researching
and evaluating what causes individuals to commit violence. Public
health works to prevent health problems and to extend better care and
safety to entire populations. An important function of public health is
to prevent injuries and violence or to lessen their impact when they
occur.
Question. In your written responses during your confirmation
hearing, you seemed to acknowledge the importance of the CDC's work in
global health. The budget cuts $23 million from global health programs
at the CDC and reserves $59 million for the Global Health Security
Agenda. Coupled with cuts to the emerging and zoonotic of $60 million,
this is an overall reduction in investment against global health
threats.
How do you envision maintaining HHS's leadership on global health
policy in light of these cuts?
Answer. As announced by administration officials in Uganda in
October 2017 at the high-level ministerial meeting on the Global Health
Security Agenda (GHSA), the United States supports the extension of
that initiative through 2024. President Trump has himself emphasized
the importance of the GHSA, including at the UN General Assembly in
September 2017, by highlighting that the GHSA is one of several
programs that promotes better health and opportunities all over the
world.
President Trump's FY 2019 budget of $59 million in funding for
activities in support of the GHSA for FY 2019 for CDC demonstrates the
administration's commitment to global health leadership. If enacted,
this funding would also provide an important bridge to the extension of
the GHSA announced by the administration in October 2017 in Uganda. CDC
is engaged in a deliberative process regarding U.S. Government support
for the next phase of GHSA, led by the National Security Council.
At the reduced level proposed for Global Health activities overall
in the FY 2019 President's budget, CDC will continue supporting
scientific and technical experts at headquarters and in the field, but
will prioritize efforts across its disease specific programs including
global HIV and tuberculosis programs and polio and measles eradication
efforts. CDC will provide technical support to optimize staffing and
resources to address the highest disease burden areas. At this funding
level, CDC will also strategically limit reference laboratory services
and viral sequencing to priority areas, including CDC's polio, measles,
and rubella reference laboratories' diagnostic services, and HIV
reference lab services.
Question. Last month, several news outlets indicated that the CDC
may have to dramatically scale back operations undertaken as part of
the Global Health Security Agenda to help countries prevent and respond
to health threats such as infectious-disease epidemics from 49
countries to just 10 in 2019.
Will that drawdown still be necessary under this budget request?
Answer. With regard to the recent news about CDC reducing its
global presence, CDC is in the process of planning, as the $1.2 billion
supplemental Ebola/Global Health Security funding awarded to CDC in FY
2015 sunsets at the end of FY 2019. However, the U.S. commitment to
global health security and the Global Health Security Agenda (GHSA)
specifically, remains steadfast.
The FY 2019 President's budget includes $59 million for CDC to
continue activities that support Global Health Security Agenda
implementation--evidence of the continued commitment. The $59 million
for GHSA in the President's FY 2019 budget are bridging funds that
would be used to support the continued development of core public
health capabilities in GHSA priority countries as CDC transitions from
the funding surge provided by the emergency supplemental funding to the
next phase of GHSA implementation.
The U.S. Government strongly supports the GHSA and its objectives
to build capacity to prevent, detect, and respond to infectious disease
threats at their source. As President Trump has publicly stated, and as
reaffirmed by U.S. administration officials at the GHSA Ministerial
Meeting in Uganda in October 2017, the U.S. Government strongly
supports the extension of GHSA through 2024.
Question. If so, what countries will CDC staff be withdrawing from?
Answer. CDC is in the process of planning, as the $1.2 billion
supplemental Ebola/Global Health Security funding awarded to CDC in FY
2015 sunsets at the end of FY 2019. CDC is engaged in a deliberative
process regarding U.S. Government support for the next phase of GHSA,
led by the National Security Council. CDC's goals are to maximize
global impact and to plan responsibly. CDC will continue to respond to
outbreaks and build long-term capacity around the globe, utilizing
assets both in host countries and from headquarters.
Question. When will the drawdown take place?
Answer. CDC remains committed to the U.S. Government's July 2015
pledge to support the Global Health Security Agenda in 17 partner
countries through FY 2019. CDC is engaged in a deliberative process
regarding U.S. Government support for the next phase of GHSA, led by
the National Security Council. This process will inform decisions about
CDC's country presence and activities.
Question. What will be the capability of HHS to respond to the next
Ebola or Zika crisis with these budget cuts?
Answer. CDC's global programs, utilizing assets in countries and at
headquarters, build the capabilities required for countries to meet the
International Health Regulations and are essential to our national
defense, forming critical links in the U.S. prevention, detection, and
response chain for outbreaks--in collaboration with the Departments of
Defense and State, as well as the U.S. Agency for International
Development and other partners.
CDC, working with other partners, is making America safer from
public health threats. For the first time, countries are closing health
security gaps using standardized metrics. This has allowed for the
mobilization of significant contributions from other donor nations and
the private sector, as well as increased host government support from
low- and middle-income countries themselves. For example, in 2014-2016,
Liberia experienced more than 10,000 cases of Ebola and more than 4,800
deaths, as the initial response took more than 90 days from virus
detection to the initiation of a coordinated response. In April 2017,
in response to an outbreak of meningococcal disease, Liberia was able
to mobilize 14 U.S.-trained Liberian disease detectives, activate a new
public health emergency operations center, deploy a national rapid
response team, and, through local laboratory testing, rule out Ebola
within 24 hours. Rapid and coordinated response interventions helped
contain the outbreak within days, limiting it to 31 cases and 13
deaths. Rapid and high-quality response prevents an isolated outbreak
from spreading and potentially becoming a global catastrophe.
Similarly, CDC's health security personnel and resources were
indispensable in averting crisis during the 2017 responses to Ebola in
the Democratic Republic of the Congo and Marburg virus in Uganda.
CDC's global investments and continued domestic investments along
with other activities across HHS (including through ASPR) support
infrastructure that will allow HHS to respond to future public health
issues.
Question. It has been reported closures of CDC offices are planned
for some of the world's hot spots for emerging infectious diseases:
Congo, Haiti, Pakistan, etc. When will those closures take place?
Answer. HHS remains committed to the U.S. Government's July 2015
pledge to support implementation of the Global Health Security Agenda
in 17 partner countries through FY 2019. CDC is engaged in a
deliberative process regarding U.S. government support for the next
phase of GHSA, led by the National Security Council. This process will
inform decisions about CDC's country presence and activities.
In addition to Global Health Security-funded work, CDC's global
health work in polio eradication, HIV, and malaria, will continue in
many of the world's hot spots and CDC will continue to monitor and
respond to emerging and reemerging diseases and outbreaks where they
occur. CDC's global health security work in Haiti is funded through
earthquake supplemental reconstruction funds which will end in FY 2020.
Question. How would you characterize the change in risk and
vulnerability for these diseases reaching U.S. shores with the closure
of these 30 country programs?
Answer. With regard to the recent news about CDC reducing its
global presence, CDC is in the process of planning, as the $1.2 billion
supplemental Ebola/Global Health Security funding awarded to CDC in FY
2015 sunsets at the end of FY 2019. However, the U.S. commitment to
global health security and the Global Health Security Agenda (GHSA)
specifically, remains steadfast.
CDC, working with other Global Health Security Agenda partners, is
making America safer today. For the first time, countries are closing
health security gaps using standardized metrics. This has allowed for
the mobilization of significant contributions from other donor nations
and the private sector, as well as increased host government support
from low- and middle-income countries themselves. For example, in 2014-
2016, Liberia experienced more than 10,000 cases of Ebola and more than
4,800 deaths, as the initial response took more than 90 days from virus
detection to the initiation of a coordinated response. In April 2017,
in response to an outbreak of meningococcal disease, Liberia was able
to mobilize 14 U.S. trained Liberian disease detectives, activate a new
public health emergency operations center, deploy a national rapid
response team and through local laboratory testing rule out Ebola
within 24 hours. Rapid and coordinated response interventions helped
contain the outbreak within days, limiting it to 31 cases and 13
deaths. Rapid and high-quality response prevents an isolated outbreak
from spreading and potentially becoming a global catastrophe.
Similarly, CDC's health security personnel and resources were
indispensable in averting crisis during the 2017 responses to Ebola in
the Democratic Republic of the Congo and Marburg virus in Uganda.
CDC's global disease detection programs are designed to build the
capabilities required for countries to meet the International Health
Regulations. These programs support U.S. national defense, forming
critical links in the U.S. prevention, detection, and response chain
for outbreaks. CDC's global investments and continued domestic
investments along with other activities across HHS (including through
ASPR) support infrastructure that will allow HHS to respond to future
public health issues.
Question. How much of an investment is being made into the research
of pain and alternate forms of pain management?
Answer. Addressing the opioid crisis is one of my top four
priorities at the Department. One prong of our five-part opioid
strategy is to support cutting-edge research into pain and alternative
forms of pain management. Specifically, the budget provides $500
million to NIH for a public-private partnership to accelerate the
development of safe, non-addictive, and effective strategies to prevent
and treat pain, opioid misuse, and overdose. NIH holds a broad research
portfolio on pain, ranging from basic research into the molecular,
genetic, and bio-behavioral basis of chronic pain to large-scale
clinical studies of potential treatments, including an array of non-
pharmacological approaches. In addition, a long-term plan to coordinate
and advance pain research across the government, the Federal Pain
Research Strategy, was developed recently. It includes important
research priorities spanning basic to clinical research across the
continuum of acute to chronic pain, including development of non-opioid
pain medications and an expanded evidence base for non-
pharmacological treatments. These recommendations are being considered
as funding priorities by NIH and other Federal agencies and departments
that support pain research, including AHRQ, CDC, FDA, DoD, and VA.
Question. The FY19 budget provides $10 billion to fight the opioid
epidemic. However, the budget significantly reduces the availability of
resources to fight opioids and coordinate a national effort by
repealing the ACA and capitating Medicaid. How do you envision
stretching the $10 billion for all of the administration's aims?
Answer. Our Medicaid program is an important tool in providing
health care to many Americans but we must put it on a stable long-term
sustainable footing for it to be there for this and future generations.
That's the challenge that we have as we seek to empower the States with
the right incentives to deliver quality service. The FY 2019 budget
provides additional flexibilities to States, puts Medicaid on a path to
fiscal stability by restructuring Medicaid financing, and refocuses on
the populations Medicaid was intended to serve--the elderly, people
with disabilities, children, and pregnant women. Annual Federal
Medicaid spending will grow from $421 billion in FY19 to $702 billion
in FY28 over the budget window. The FY 2019 budget also repeals the
Medicaid expansion and the Exchange program subsidies and replaces
these programs with the $1.2 trillion Market-Based Health Care Grant
program through the Graham-Cassidy-Heller-Johnson legislation.
Opioid misuse, abuse, and overdose impose immense costs on the
Nation, contributing to two-thirds of deaths by drug overdose. Deaths
by drug overdose are the leading cause of injury death in the United
States. The FY 2019 President's budget recognizes the devastation
caused by the opioid crisis in communities across America and fulfills
the President's promise to mobilize resources across the Federal
Government to address the epidemic. The budget provides a historic
level of new resources across HHS to combat the opioid epidemic and
serious mental illness--$10 billion--to build upon the work started
under the 21st Century Cures Act.
The budget's targeted investments advance the Department's five
part strategy, which involves:
Improving access to prevention, treatment, and recovery
services, including medication-assisted treatment;
Targeting availability and distribution of overdose-reversing
drugs;
Strengthening our understanding of the epidemic through better
public health data and reporting;
Supporting cutting edge research on pain and addiction; and
Advancing better practices for pain management.
Question. The HHS FY 2019 budget proposes to both eliminate the
Medicaid Disproportionate Share payments and capitate Medicaid funding
to States. What will be the impact on hospitals?
Answer. The budget's Medicaid proposal is modeled after the Graham-
Cassidy-Heller-Johnson bill, which includes a modernization of Medicaid
financing and repeal of the Obamacare's Medicaid expansion. Medicaid
financing reform will empower States to design individual, State-based
solutions that prioritize Medicaid dollars for traditional Medicaid
populations and support innovations like community engagement
initiatives for able-bodied adults. Additionally, the Market-Based
Health Care Grant Program included in the Graham-Cassidy-Heller-Johnson
legislation will provide more equitable and sustainable funding to
States to develop affordable health-care options for their citizens.
The block grant program will empower States to improve the functioning
of their own health-care market through greater choice and competition,
with States and consumers in charge. By putting States back in charge
of their Medicaid dollars and decisions, hospitals will benefit from
the ability to locally partner with the State to innovate and target
resources to the most needy citizens and health-care providers.
______
Question Submitted by Hon. Sherrod Brown
Question. Last year, the President made the decision to stop paying
mandatory cost-sharing reduction (CSR) payments to Affordable Care Act
(ACA) insurers, saying that ``the gravy train end(s) the day I knocked
out the insurance companies' money.'' As a result of his decision,
insurers and State regulators in more than 40 States adjusted their
plan offerings by dramatically increasing the cost of their silver
plans--or ``silver loading.'' As a result, taxpayers are now supporting
larger payments to insurers through tax credits and subsidies than
would have been provided through the CSRs.
The President's budget proposal includes a provision that would
provide a mandatory appropriation for cost-sharing reduction (CSR)
payments for FY18 through the end of FY19. This means that insurers
that have been benefitting from higher premium payments for silver
plans will also now receive CSR payments on top of the taxpayer support
they are already receiving. In other words, the President's budget
proposal proposes to use taxpayer dollars to compensate insurers twice:
first through higher tax credits because of silver loading, and second
through the additional CSRs proposed in the budget. This seems to be
proposing two gravy trains.
Why is this administration reversing course on CSR payments?
Do you support paying insurance companies twice for FY18, as the
budget proposes?
Answer. In 2017, the administration conducted a legal review and
concluded that because Congress did not appropriate the money for Cost
Sharing Reductions, the administration could no longer legally make the
payments.
I am party to related litigation and am limited in what comments I
can make. The government's litigation position on cost sharing
reduction payments has not changed, and I refer any questions about the
litigation to the Department of Justice.
______
Questions Submitted by Hon. Thomas R. Carper
Question. In October, the President issued an executive order to
expand so-called ``short-term, limited-duration plans,'' which are
plans that can still discriminate based on pre-existing conditions,
charge older people more, exclude coverage for services such as
maternity care and treatment for opioid addiction, and impose annual
and lifetime limits. Furthermore, you recently proposed a new rule that
would expand short-term plan durations to 3 months to 12 months. Health
insurers and patient groups, including the American Cancer Society and
the American Heart Association, have said short term plans could ``lead
to higher premiums for consumers, particularly those with pre-existing
conditions'' and ``destabilize the health insurance markets.'' With
these concerns in mind, how will HHS ensure that these plans are
transparent with consumers about their lack of comprehensive benefits
and coverage?
Answer. Short-term limited duration insurance plans are flexible,
adaptable insurance products that can be particularly useful for those
entering the job market, those transitioning between jobs and other
forms of insurance, or who are otherwise priced out of unaffordable ACA
insurance markets. Americans need more insurance options with less
Federal micromanagement of those insurance options.
The status quo is not working for millions of Americans--whether it
is those who are in the insurance market or those who have been left
out of it. Although there are many Americans who may not be best served
by a short-term, limited-duration plan, expanding the availability of
such plans creates affordable options for those who understand how to
choose and use these flexible, short-term products. HHS will work with
the Departments of Labor and the Treasury, and across the executive
branch, to create a health insurance system that is more affordable and
accessible, where individuals and families can choose the type of
insurance coverage that works best for them, including the option of
short-term, limited-duration insurance. As part of the short-term,
limited-duration proposed rule, the Departments proposed standard
language that issuers of short-term, limited-duration insurance would
have to provide to applicants and enrollees that describes the
potential limitations of the short-term, limited-duration insurance and
how it is not Minimum Essential Coverage. I will also work to ensure
the least disruptive approach to implementing these policies, and to
appropriately consider the concerns expressed by stakeholders during
the rulemaking process.
Question. Secretary Sylvia Burwell, one of your predecessors at
HHS, laid out an ambitious goal of tying 90 percent of Medicare fee-
for-service payments to quality and value by the end of 2018, and
linking 50 percent of Medicare payments to innovative payment models
such as accountable care organizations by the end of 2018.
Unfortunately, CMS has indicated that it will no longer operate on the
timeline laid out by Secretary Burwell.
Without this goal in place, how specifically does CMS intend to
improve Medicare payments and better coordinate care for patients and
on what timeline will Medicare move away from fee-for-service payments
towards outcomes-based reimbursement? How can we include Medicare and
Medicaid's payment for drugs in the movement towards value and
outcomes-based payments? More broadly, how can HHS better work with the
private sector to encourage delivery system reforms and bring down the
cost of health coverage for Americans?
Answer. Senator, thank you for your questions. As you know, upon
taking office at HHS, I identified the value-based transformation of
our entire health-care system as one of the top priorities for our
Department. Value-based transformation in particular is not a new
passion for me. It became a top priority for Secretary Mike Leavitt
when I was working for him as deputy secretary, and it was taken
seriously by President Obama's administration as well.
It has been, at times, a frustrating process. But there is no
turning back to an unsustainable system that pays for procedures rather
than value. In fact, the only option is to charge forward--for HHS to
take bolder action, and for payers and providers to join with us.
Millions of Americans rely on Medicaid and Medicare to meet their
everyday health-care needs, and together these Federal health-care
programs comprise the largest portion of the Federal budget. As such,
the budget proposes several legislative solutions to improve the
programs, promote greater efficiencies, advance
patient-centered care, and reduce government-imposed burden on
providers.
The budget makes significant strides toward addressing and reining
in drug prices. The legislative solutions would benefit seniors by
protecting Medicare beneficiaries from high drug prices, giving plans
more tools to manage spending, and realigning incentives in the Part D
drug benefit structure. The proposed changes enhance Part D plans'
negotiating power with manufacturers; encourage utilization of higher
value drugs; discourage drug manufacturers' price and rebate strategies
that increase spending for both beneficiaries and the government; and
provide beneficiaries with more predictable annual drug expenses
through the creation of a new out-of-pocket spending cap.
I look forward to working with you, and any other stakeholders, who
will work with us toward our shared goal of transforming our health-
care system to make sure we are paying for quality, rather than
quantity.
Question. Mr. Secretary, the affordability of health-care coverage
continues to be a problem across our health-care system. One of the
ways the public and private sectors have been trying to address this
challenge is through value-based purchasing models. For example,
employers have been offering Accountable Care Organizations and we have
seen their growth and success in the Medicare Program. How can HHS
better work with the private sector to encourage delivery system
reforms and bring down the cost of health coverage for Americans?
For example, companies such as Boeing are operating accountable
care programs in cities across the country to improve the quality of
care their employees receive, enhance employees' experience with the
health-care system, and reduce costs. Over the last several years,
Boeing has seen improvement in their employees' health, including a
significant uptake in depression screenings and better control of blood
pressure and diabetes. Employees also like the customer-focus of these
programs and re-enroll at high rates. How will you increase this type
of innovation in Medicare, Medicaid, CHIP, and our other government
health-care programs?
Answer. One of the key commitments President Trump has made across
this administration has been to see the private sector as our partners,
not just as entities to be regulated or overseen. Upon taking office at
HHS, I identified the value-based transformation of our entire health-
care system as one of the top priorities for our department. Value-
based transformation in particular is not a new passion for me. It
became a top priority for Secretary Mike Leavitt when I was working for
him as Deputy Secretary, and it was taken seriously by President
Obama's administration as well. It has been, at times, a frustrating
process. But there is no turning back to an unsustainable system that
pays for procedures rather than value. In fact, the only option is to
charge forward--for HHS to take bolder action, and for payers and
providers to join with us.
There are four particular areas of emphasis that will be vital to
laying down new rules of the road, accelerating value-based
transformation, and creating a true market for health care. The four
areas of emphasis are: giving consumers greater control over health
information through interoperable and accessible health information
technology; encouraging transparency from payers and providers; using
experimental models in Medicare and Medicaid to drive value and quality
throughout the entire system; and removing government burdens that
impede this transformation.
Question. Obesity, tobacco, and lack of medication adherence cost
our health-care system more than $1 trillion each year. Part of the
challenge is our doctors don't know how to talk to patients about their
weight and Medicare and Medicaid beneficiaries don't understand how to
access services to treat obesity and addiction to tobacco products.
Will you commit to working together with me to redouble our efforts
to address these root causes of poor health outcomes and high costs?
Answer. The conditions that you mentioned are all complex public
health issues that deserve our attention. I believe we must implement
evidence-based programs and policies that are proven to make an impact
in these areas. I commit to ensuring that we are leveraging our
resources to the greatest extent possible to make advances in these
areas. The President's Fiscal Year (FY) 2019 budget supports the
mission of the Department of Health and Human Services (HHS) by making
thoughtful and strategic investments to protect the health and well-
being of the American people.
______
Questions Submitted by Hon. Thomas R. Carper
and Hon. Pat Roberts
Question. Secretary Azar, we applaud the inclusion of the provision
in CMS' Proposed Part D Rule revising the MLR requirements, which
clarifies that Part D medication therapy management (MTM) programs fall
under quality improving activities (QIA). This is the right approach
and policy, and we would strongly urge CMS to finalize this important
provision to increase proper medication adherence through better
utilization of MTM services.
How is CMS working to ensure multiple delivery options for MTM
services, either in person at retail or community pharmacies as well as
remotely, are included in the demo and available to beneficiaries?
When does CMS intend to expand the Enhanced MTM demo to Medicare
Advantage plans?
Answer. That said, the provision of Enhanced MTM items or services
may not be tied to use of specific network pharmacies for dispensing of
Part D drugs. The model does not waive Part D network access
requirements or any other Part D requirement not specifically listed in
the Enhanced MTM Request for Applications. CMS believes that a
successful participant in this model will design an MTM program that
effectively engages enrollees at risk for medication-related issues
``where they are'' as opposed to requiring the enrollee to come to the
plan or plan preferred providers for assistance in overcoming a barrier
to improved medication use.
The Enhanced MTM model tests design elements that give standalone
PDPs many tools that MA-PD plans already have (such as sharing Parts A
and B data with Part D sponsors), which would not make such plans
appropriate for the model as it is currently designed.
Question. Secretary Azar, we applaud the inclusion of the provision
in CMS' Proposed Part D Rule revising the MLR requirements, which
clarifies that Part D medication therapy management (MTM) programs fall
under quality improving activities (QIA). This is the right approach
and policy, and we would strongly urge CMS to finalize this important
provision to increase proper medication adherence through better
utilization of MTM services.
How is CMS working to ensure multiple delivery options for MTM
services, either in person at retail or community pharmacies as well as
remotely, are included in the demo and available to beneficiaries?
When does CMS intend to expand the Enhanced MTM demo to Medicare
Advantage plans?
Answer. That said, the provision of Enhanced MTM items or services
may not be tied to use of specific network pharmacies for dispensing of
Part D drugs. The model does not waive Part D network access
requirements or any other Part D requirement not specifically listed in
the Enhanced MTM Request for Applications. CMS believes that a
successful participant in this model will design an MTM program that
effectively engages enrollees at risk for medication-related issues
``where they are'' as opposed to requiring the enrollee to come to the
plan or plan preferred providers for assistance in overcoming a barrier
to improved medication use.
The Enhanced MTM model tests design elements that give standalone
PDPs many tools that MA-PD plans already have (such as sharing Parts A
and B data with Part D sponsors), which would not make such plans
appropriate for the model as it is currently designed.
______
Questions Submitted by Hon. Benjamin L. Cardin
Question. I am following up on the conversation we had regarding
the budget for the Office of Minority Health and the National Institute
on Minority Health and Health Disparities (NIMHD). I raised a concern
about the President's budget cutting the Office of Minority Health by
$2 million from the FY18 continuing resolution, and the NIMHD by $7
million. You stated that because you did not have a granular knowledge
of the budget that you would get back to me on the cuts to NIMHD. Would
you please share your rationale for these budget cuts?
Answer. The cuts you point out do not signify a lack of commitment
by this Department to minority health issues. Many programs throughout
HHS received small cuts to ensure that funding is more targeted towards
direct service delivery. Our strategy is to focus in on existing
programs that provide these services. The President's budget continues
to show its commitment to minority health by requesting $281 million
for the National Institute on Minority Health and Health Disparities
and $54 million for the Office of Minority Health.
Question. You offered a rationale regarding the cuts to the Office
of Minority Health. You stated that there is not a minimization around
minority health programs, rather a tradeoff and focus on service
delivery. Would you please share your strategies to increase the focus
on service delivery, where those resources are being reallocated from,
and the programs or initiatives that are having their funding reduced?
Answer. The cuts you point out do not signify a lack of commitment
by this Department to minority health issues. Many programs throughout
HHS received small cuts to ensure that funding is more targeted towards
direct service delivery. Our strategy is to focus in on existing
programs that provide these services. The President's budget continues
to show its commitment to minority health by requesting $281 million
for the National Institute on Minority Health and Health Disparities
and $54 million for the Office of Minority Health.
Question. The President's budget wishes to provide $10 billion in
funding to address the opioid epidemic. Nearly 12 percent of Medicaid
beneficiaries over the age of 18 have a substance use disorder. To me,
there seems to be a disconnect between trying to fund programs that
address the opioid epidemic, while also cutting Medicaid, a program
which so many people with substance use disorders rely on to get the
treatment and the care they need. Can you discuss how cutting Medicaid
and eliminating the Medicaid expansion under the Affordable Care Act
helps those with a substance use disorder?
Answer. Our Medicaid program is an important tool in providing
health care to many Americans but we must put it on a stable long-term
sustainable footing for it to be there for this and future generations.
That's the challenge that we have as we seek to empower the States with
the right incentives to deliver quality service. The FY 2019 budget
provides additional flexibilities to States, puts Medicaid on a path to
fiscal stability by restructuring Medicaid financing, and refocuses on
the populations Medicaid was intended to serve--the elderly, people
with disabilities, children, and pregnant women. Annual Federal
Medicaid spending will grow from $421 billion in FY19 to $702 billion
in FY28 over the budget window. The FY 2019 budget also repeals the
Medicaid expansion and the Exchange subsidies and replaces these
programs with the $1.2 trillion Market-Based Health Care Grant program
through the Graham-Cassidy-Heller-Johnson legislation.
Opioid misuse, abuse, and overdose impose immense costs on the
Nation, contributing to two-thirds of deaths by drug overdose. Deaths
by drug overdose are the leading cause of injury death in the United
States. The FY 2019 President's budget recognizes the devastation
caused by the opioid crisis in communities across America and fulfills
the President's promise to mobilize resources across the Federal
Government to address the epidemic. The budget provides a historic
level of new resources across HHS to combat the opioid epidemic and
serious mental illness--$10 billion--to build upon the work started
under the 21st Century Cures Act.
The budget's targeted investments advance the Department's five
part strategy, which involves:
Improving access to prevention, treatment, and recovery
services, including medication-assisted treatment;
Targeting availability and distribution of overdose-reversing
drugs;
Strengthening our understanding of the epidemic through better
public health data and reporting;
Supporting cutting edge research on pain and addiction; and
Advancing better practices for pain management.
Question. In our conversation regarding the prudent layperson
standard, you mentioned the proposal in the budget that would allow for
Medicaid to impose copayments on beneficiaries for emergency room
visits that are determined to be ``misuse of emergency room visits.''
You suggested that any legislation would need to be done in a common
sense way, and it should not deter anyone from going to the emergency
room for the care that they ought to be going in for. Would you please
provide your proposed language that would make this change in policy,
as well as provide your definition for ``misuse of emergency room
visits''?
Answer. Currently, States are required to obtain waiver authority
to charge copayments above the nominal statutory amounts for non-
emergency use of the emergency department. I am happy to work with
Congress to define the exact parameters of this proposal.
Question. Would there be a limit as to what States could charge for
ER copayments or surcharges for non-emergency use of the ER? Would
States be able to charge these individuals--many of which are making
less than $15,000 a year whatever amount they want?
Answer. The budget proposes to provide States the option to use
State plan authority to increase these copayments to encourage personal
financial responsibility and proper use of health-care resources.
Question. Under this proposal, how would the administration ensure
individuals have access to other, more appropriate care settings,
especially if the State no longer has to offer non-emergency
transportation?
Answer. We would want to work with you to make sure that any
legislation is done in a common sense way that does not deter anyone
from going to the emergency room for care when appropriate.
Question. As you know, working Americans may be unable to go
receive medical care in a less expensive setting because the ER is the
only provider open when they can go--whether that's late at night or on
the weekend. How will the administration work with States to ensure
that individuals who are not able to get time off or cannot afford
child care will be able to access these providers?
Answer. I am happy to work with Congress to develop this
legislation in a way that ensures that individuals maintain access to
emergency care when appropriate.
______
Questions Submitted by Hon. Sherrod Brown
Question. The President's HHS budget lists ``tackling the opioid
epidemic'' as its first priority, yet the proposal eliminates Medicaid
expansion and proposes additional cuts to Medicaid, the number one
source of addiction treatment services in Ohio.
During your testimony in front of the House Ways and Means
Committee, you mentioned that you had recently spoken with Governor
Kasich about Ohio's struggle with the addiction epidemic. You said that
we need to take best practices from one State and ensure other States
can benefit from those innovative practices in tackling this epidemic.
Yet the President's budget proposes the exact opposite--it would
actually eliminate Medicaid expansion, a program that is already
working in Ohio that could help other States across the country who
have yet to expand their programs. It would take this option away from
States. Medicaid expansion is an issue that Governor Kasich and I agree
on--without Medicaid expansion, hundreds of thousands of Ohioans
currently struggling with addiction and mental illness would lack
access to treatment. It's Ohio's number one tool in our fight against
addiction. Taking this option away from States and then making
additional cuts to Medicaid is not supporting our local communities--
it's abandoning them. We should be giving States the flexibility to
provide more services, not less.
If this administration is going to make the argument that States
are the best
decision-makers when it comes to the health-care options their
constituents need, then why eliminate a program that States like Ohio
have said are working?
Answer. Our Medicaid program is an important tool in providing
health care to many Americans, but we must put it on a stable long-term
sustainable footing for it to be there for this and future generations.
That's the challenge that we have as we seek to empower the States with
the right incentives to deliver quality service. The FY 2019 budget
provides additional flexibilities to States, puts Medicaid on a path to
fiscal stability by restructuring Medicaid financing, and refocuses on
the populations Medicaid was intended to serve--the elderly, people
with disabilities, children, and pregnant women. Annual Federal
Medicaid spending will grow from $421 billion in FY19 to $702 billion
in FY28 over the budget window. The FY 2019 budget also repeals the
Medicaid expansion and the Exchange program subsidies and replaces
these programs with the $1.2 trillion Market-Based Health Care Grant
program through the Graham-Cassidy-Heller-Johnson legislation.
Opioid misuse, abuse, and overdose impose immense costs on the
Nation, contributing to two-thirds of deaths by drug overdose. Deaths
by drug overdose are the leading cause of injury death in the United
States. The FY 2019 President's budget recognizes the devastation
caused by the opioid crisis in communities across America and fulfills
the President's promise to mobilize resources across the Federal
Government to address the epidemic. The budget provides a historic
level of new resources across HHS to combat the opioid epidemic and
serious mental illness--$10 billion--to build upon the work started
under the 21st Century Cures Act.
The budget's targeted investments advance the Department's five
part strategy, which involves:
Improving access to prevention, treatment, and recovery
services, including medication-assisted treatment;
Targeting availability and distribution of overdose-reversing
drugs;
Strengthening our understanding of the epidemic through better
public health data and reporting;
Supporting cutting edge research on pain and addiction; and
Advancing better practices for pain management.
Question. During your nomination process, I submitted a QFR about
the Low-
Income Heating Assistance Program (LIHEAP). I want to share my question
and your answer with you again in light of the new FY19 budget
proposal, and then re-phrase my question to you.
As you know, the Low-Income Heating Assistance Program, or LIHEAP,
plays a key role in helping the elderly and low-income families stay
warm in the winter and avoid dangerous heat in the summer. With the
sustained cold in Ohio this winter, we see firsthand how critical it is
to the nearly 450,000 households in my State that would otherwise be
forced to choose between keeping warm or going hungry. When your
predecessor was before the committee, he indicated that he supported
this program, then he proceeded to eliminate it in the FY18 budget
request.
If confirmed, would you propose to once again eliminate the
program?
Answer. If confirmed, I will prioritize programs that demonstrate
results for the populations they intend to serve. If resources for
LIHEAP continue to be appropriated by Congress, I will continue to
implement the program in the most effective and efficient manner
possible.
Question. The President's budget would eliminate LIHEAP in FY19.
How do you intent to ``implement the program in the most effective and
efficient manner possible'' without any funding? How do you justify the
elimination of this program?
Answer. After careful examination, the administration believes that
LIHEAP is 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 to individuals and families, including
policies in 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. While
this is the administration's proposal, as long as there continues to be
an appropriation of resources for this program I will continue to
implement the program in as effective and efficient manner as possible.
Question. As I said during last week's hearing, I appreciate the
efforts the administration has put into proposing some initiatives that
would help lower the cost of prescription drugs in Medicare and
Medicaid as part of this year's budget proposal, some of which I agree
with and support. During the hearing last week I asked you about
proposals to lower the list price of drugs for all Americans, not just
those who rely on Medicare or Medicaid, by putting pressure directly on
the pharmaceutical industry--not just through leveraging other entities
on the drug supply chain. In order to truly address the high cost of
drugs we can't just put pressure on insurers and pharmacy benefit
managers, we must also put pressure directly on manufacturers.
In your answer to one of my QFRs from your confirmation hearing,
you said: ``I believe that we need to institute policies that lower the
list prices of drugs while also maintaining innovative new research and
development.''
Are there any proposals in the proposed budget that will force a
pharmaceutical company to lower the list price of a drug in a way where
all Americans who rely on that drug will benefit?
Do you plan on pursuing any policies that go after pharmaceutical
manufacturers, in addition to these policies in the budget that target
insurance companies and pharmacy benefit managers? If so, what are
those policies?
Answer. The budget includes proposals to create incentives that
will put downward pressure on the list price of drugs. One proposal
involves changing the incentive structure in the catastrophic coverage
in Part D. Currently, the government is on the hook for most of the
cost once a senior citizen gets to catastrophic coverage phase. We
propose to progressively move to a system where the insurer bears the
risk for the catastrophic coverage phase, and will then have even more
incentive to negotiate with branded drug companies to keep those list
prices down. Currently, plan sponsors have incentives to accept higher
prices so that their enrollees reach the catastrophic coverage phase
sooner and that expense is offloaded on to the Federal government. In
addition, in Part B, the budget proposes an inflation cap on the
average sales price, so that the increase of the average sales price
above inflation will receive lower reimbursement paid out through
Medicare Part B. Another proposal requires Part D sponsors to apply at
least one-third of total rebates and price concessions at the point of
sale. This will improve price transparency and allow beneficiaries to
share more directly in the savings from discounts negotiated by plans.
Yet another proposal will improve manufacturers' reporting of average
sales prices to set accurate payment rates. This proposal would provide
the Secretary with the authority to apply penalties for manufacturers
who do not report required data. And finally, the budget proposes
increased plan formulary flexibility and negotiation power with
manufacturers. Increased competition for formulary placement will
provide plans with enhanced ability to negotiate lower prices with
manufacturers.
______
Question Submitted by Hon. Sherrod Brown
and Hon. Robert P. Casey, Jr.
Question. This year's budget represents a drastic change from last
year's budget in how it treats the Children's Hospitals Graduate
Medical Education (CHGME) payment program. Last year, the President's
budget proposed to maintain funding for the CHGME program at $295
million. This year, the budget proposes to eliminate the program and
combine it with other graduate medical education funding streams, while
reducing total Federal support for graduate medical education by almost
$50 billion over a decade.
Eliminating programs like CHGME that have helped to grow our
pediatric subspecialty workforce, and that currently train nearly half
the pediatric physician workforce, will weaken our training pipeline
and ultimately hurt access to care for children across the country. We
urge the Department and the White House to focus its attention on
working with Congress on finding ways to strengthen our commitment to
producing the next generation of doctors, both for children and adults.
What caused the President to reverse course on CHGME in this year's
budget proposal, as compared to last year's budget proposal?
If CHGME is eliminated, how will HHS ensure that our pediatric
workforce pipeline is protected and kids have access to the care we
need?
Answer. The President's budget supports continued funding for GME
in children's hospitals through a mandatory appropriation. The budget
proposes to better focus Federal spending on GME by consolidating
spending that is currently in the Medicare, Medicaid, and Children's
Hospital GME Payment Program into a new capped Federal grant program.
In an effort to improve the distribution of specialties in health care,
to address health care professional shortage areas, and to incentive
better training of professionals, funding would be distributed to
hospitals that are committed to building a strong medical workforce and
would be targeted to address medically underserved communities and
health professional shortages. Children's hospitals would remain
eligible for funding.
______
Questions Submitted by Hon. Robert P. Casey, Jr.
Question. The President's budget proposes moving control of the
Strategic National Stockpile from the Centers for Disease Control and
Prevention to the Office of the Assistant Secretary for Preparedness
and Response. My staff has been informed by HHS that this move is
already under way, and will be completed by the end of the current
fiscal year. I am concerned that such a significant change could
disrupt our public health emergency preparedness. Could you please
explain how this move will contribute to protecting the public health
and increase our capacity to respond to public health emergencies?
Answer. HHS is transferring the SNS from CDC to ASPR to improve
emergency response effectiveness. While placing the SNS at CDC made
historical sense, the creation and maturation of ASPR provides an
opportunity to better align the direct oversight and management of SNS
under ASPR. When disasters occur, ASPR leads the National Response
Framework, Emergency Support Function #8 as delegated by the Secretary,
thereby coordinating Federal public health and medical responses, such
as the recent string of high consequence hurricanes. (ASPR also
coordinates HHS's recovery functions under the Health and Social
Services Recovery Support Function of the National Disaster Recovery
Framework.) ASPR has a robust medical logistics capability that
supports the National Disaster Medical System (NDMS), moving medical
personnel, equipment, and supplies across the Nation within hours.
ASPR works closely with State and local emergency management
professionals, clinicians, health-care facilities, public health
officials and NDMS response teams who may be called upon to dispense
SNS medical products. ASPR plans to exercise different SNS dispensing
mechanisms and implement innovative approaches to improve stockpiling
and distribution practices, and to ensure SNS contents can continue to
be quickly dispensed and used locally in natural or manmade
emergencies. This reorganization also streamlines the medical
countermeasure development and procurement enterprise by fully
integrating the Stockpile with other preparedness and response
capabilities within ASPR.
The transfer of the SNS from CDC to ASPR is fully underway, and we
expect to complete this transition by October 1, 2018. Workgroups are
meeting often to ensure that all of the details of the move are
addressed. CDC personnel employed by the SNS will remain employed by
the SNS and will stay in Atlanta. In addition, CDC subject matter
experts will remain actively involved in the MCM enterprise, and ASPR
will continue to rely on CDC relationships with State and local public
health officials and the agency's scientific expertise.
Question. In recent years, policymakers and multiple
administrations have indicated an increased desire to pursue evidence-
based policies and programs, the hallmarks of which are providing an
objective set of criteria for evaluating programs, and an open and
transparent process for publishing the results of these evaluations.
The Teen Pregnancy Prevention Evidence Review does exactly that--it
identifies effective programs, based on rigorous evaluation, that
reduce teenage pregnancy, the behavioral risk factors underlying
teenage pregnancy and other associated risk factors. The Assistant
Secretary for Planning and Evaluation oversees this work. While the
review is supposed to be updated regularly, the last update was made in
June 2016 reflecting studies published through August 2015, and the new
evidence submitted by researchers in November 2016 has yet to be
incorporated into the review. This lack of action denies programs,
policymakers, and researchers access to the most up-to-date information
about what works. Please provide details on when the updated evidence
review will be published.
Answer. HHS is committed to research that informs programs. The
Office of the Assistant Secretary for Planning and Evaluation continues
to undertake review of the Teen Pregnancy Prevention program, and I
will ensure HHS shares any results with you and your office.
Question. January 4, 2017 was last year's submission date for home
visiting models to seek review for inclusion on the Home Visiting
Evidence of Effectiveness (HomeVEE) list under the Maternal, Infant,
and Early Childhood Home Visiting Program. As of today, submissions
from that round have not been reviewed. What is the timeline for
reviewing these submissions and responding to the models who have been
waiting for over a year to learn whether or not they will be included
on the HomeVEE list?
Answer. In September 2017, we released the results of HomVEE's
annual review for 2017, which took into consideration submissions of
studies through January 4, 2017. HomVEE will release the results of
2018's review in the fall of 2018.
Hundreds of models are considered in HomVEE's annual prioritization
process; many more models than there are resources to review. The
process is not first-come-first-served. Instead, HomVEE follows a
systematic and transparent process for selecting the models that will
be reviewed in a given year.
Specifically, each year, HomVEE screens all new research for
eligibility, according to its screening criteria (for details, see
https://homvee.acf.hhs.gov/Review-Process/4/Screening-Studies/19/3). To
determine which models HomVEE will review each year, points are
assigned to models based on published criteria (for details, see http:/
/homvee.acf.hhs.gov/Review-Process/4/Prioritizing-Program-Models-for-
Review/19/4). The number of models selected for review each year
depends on (1) the number of studies each of the models with the most
points has, (2) available resources, and (3) HHS policy and
programmatic needs. Studies identified for models not selected for
review in a given year remain in the queue and are considered in each
subsequent year's prioritization decisions. However, studies are not
reviewed until the model they are associated with is selected for
prioritization.
Models that HomVEE has studies on (including those received last
year during the call for studies which closed in January 2017) are
considered for prioritization each year until they are prioritized for
review. If a model is not prioritized for review, it means that other
models had higher points on the prioritization list based on their
available research. Studies on models that were not prioritized for
review in a particular year will be included in the prioritization
process until the model has enough studies and points (relative to
other models) to be prioritized for review.
HomVEE releases an annual update every fall. The annual release
announces the models that were reviewed that year and the results of
the review. Results may include adding new models to the list of models
HomVEE has reviewed (both evidence-based models and those that do not
meet evidence-based criteria) and/or updating findings on previously
reviewed models. As of September 2017, HomVEE had prioritized 45
program models for review, and completed reviews of 363 impact studies
and 274 implementation studies of these 45 models. These reviews have
resulted in HomVEE identifying 20 home visiting models that meet the
HHS criteria for an evidence-based early childhood home visiting
service delivery model.
Question. In the administration's fiscal year 2019 budget, you have
called for an extensive cut to Medicaid. Such a cut would
disproportionately affect people with disabilities. In the 2017 State
of the States in Developmental Intellectual and Developmental
Disabilities report, 76 percent of the public intellectual and
developmental disability funding goes to home and community based
services and supports making it possible for people with disabilities
to live in their own home, be independent, and be full participants in
their communities. A cut of the size you recommend would drastically
reduce Medicaid funding for States. How will you ensure that people
with disabilities who wish to live in their own homes and be part of
their communities will not be forced to return to nursing homes or
institutions if these cuts go into effect?
Answer. The budget's Medicaid proposal is modeled after the Graham-
Cassidy-Heller-Johnson bill, which includes a modernization of Medicaid
financing and repeal of the Obamacare's Medicaid expansion. Medicaid
financing reform will empower States to design individual, State-based
solutions that prioritize Medicaid dollars for traditional Medicaid
populations and support innovations like community engagement
initiatives for able-bodied adults. Additionally, the Market-Based
Health Care Grant Program included in the Graham-Cassidy-Heller-Johnson
legislation will provide more equitable and sustainable funding to
States to develop affordable health-care options for their citizens.
The block grant program will empower States to improve the functioning
of their own health-care market through greater choice and competition,
with States and consumers in charge. Putting States back in charge of
their Medicaid dollars and decisions will allow them to better serve
and target resources for needy citizens, such as individuals with
disabilities who wish to live in their own homes.
______
Question Submitted by Hon. Robert P. Casey, Jr.
and Hon. Rob Portman
Question. We introduced legislation last year, S. 486, the
Protecting Beneficiary Access to Complex Rehab Technology Act, that is
designed to permanently protect complex rehab wheelchairs from the
application of Medicare's Durable Medical Equipment (DME) Competitive
Bidding program. The legislation reiterates the language in the
Medicare Improvements for Patients and Providers Act of 2008 that
exempts complex rehab wheelchairs and accessories from the DME
competitive bidding program that was designed for standard DME items.
Last year, HHS reinterpreted a previous CMS response to a
``Frequently Asked Questions'' document from December of 2014 that
would have applied DME bid pricing for standard wheelchair accessories
to complex rehab wheelchair accessories. The problem is the HHS
reinterpretation only applies to those accessories provided on complex
power wheelchairs and not all complex wheelchairs.
While we appreciate the agency's reinterpretation on power
accessories, there needs to be a similar fix for manual accessories.
Why did the agency limit its regulatory relief to complex rehab power
wheelchair accessories and not all complex rehab wheelchair accessories
rather than use its authority to broaden the regulatory relief to also
include complex manual wheelchair accessories? It is our hope that can
happen in the future.
Answer. Section 1847(a)(2)(A) of the Social Security Act provides
the categories of items that are subject to the DME Competitive Bidding
Program and excludes certain complex rehabilitative power wheelchairs
recognized by the Secretary as classified within group 3 or higher (and
related accessories when furnished in connection with such
wheelchairs). We believe that this statutory exclusion should inform
our implementation of section 1834(a)(1)(F) of the Act such that the
fee schedule amounts for wheelchair accessories and back and seat
cushions used in conjunction with group 3 complex rehabilitative power
wheelchairs would not be adjusted based on DME competitive bidding
information. The fee schedule amounts for all other accessories used
with different types of base wheelchair equipment would be calculated
in accordance with the adjusted DME fee schedule methodology using DME
competitive bidding information.
______
Questions Submitted by Hon. Mark R. Warner
Question. Gabriella Miller, a 10-year old girl from Leesburg, VA
who suffered from pediatric brain cancer, became an extremely
impressive activist on behalf of childhood cancer awareness before her
untimely death. Her work led to the passage of the Gabriella Miller
Kids First Act in 2014, and NIH has been moving forward to implement
this law and expand pediatric research.
I have appreciated the steps NIH has taken to continue prioritizing
pediatric research, including brain tumor research. However, still the
amount of funding for research on adults far outpaces that for
children. I am hopeful that under your leadership there can be more
focus.
Will you commit to continuing to implement efforts to focus on
pediatric medical research--including focus on the Gabriella Miller
research fund?
Answer. We are committed to continuing support for pediatric
medical research, including childhood cancer research.
Pediatric research will continue to be an NIH priority. In fiscal
year (FY) 2017, the NIH funded over $4.1 billion in research grants and
projects directed specifically at pediatric research. The Eunice
Kennedy Shriver National Institute of Child Health and Human
Development (NICHD) funds the largest portion of pediatric research
among the 27 NIH Institutes, Centers, and Offices (ICOs), taking a
leadership role in many pediatric research efforts that involve trans-
NIH collaborations. However, all ICOs support aspects of pediatric
research; the NICHD accounts for only 19 percent of the total NIH
support for pediatric research. This reflects the breadth of the
research portfolio at the NIH dedicated to improving the health of
children everywhere.
The National Cancer Institute (NCI) is committed to addressing the
unique scientific challenges and opportunities that pediatric cancers
pose in ways that lead to better outcomes for children with cancer.
Conducting and supporting childhood cancer research remains a high
priority for NCI, and each year the Institute identifies the best
research opportunities to build upon the foundation of basic science,
expand scientific understanding of genetic drivers of childhood
cancers, identify promising new therapies, and improve the outlook for
pediatric cancer survivors. In addition to soliciting applications in
areas of scientific focus, NCI also remains committed to supporting a
number of key research efforts focused specifically on childhood
cancers. NCI has been renewing many of these programs for numerous 5-
year funding periods.
With regard to childhood cancer research, in addition to NCI-
supported efforts described above, NCI will also continue to implement
childhood cancer research efforts through two high priority pediatric
research opportunities within the Cancer MoonshotSM. The
first is fusion oncoproteins in pediatric cancers, as these distinctive
proteins are unique to childhood cancers and drive cancer growth and
survival. The second priority area is pediatric immunotherapy, and
specifically creating a translational science network devoted to
pediatric immunotherapy research. This is a critical research area as
it is likely that many immunotherapy treatments being developed for
adult cancers will not be applicable to childhood cancers.
The NIH is also committed to continuing support for the Gabriella
Miller Kids First Pediatric Research program, pending continued
appropriation of funds from the Pediatric Research Initiative Fund
created for this purpose.
Question. The National Alzheimer's Project Act became law in
January 2011. From that legislation came a national strategic plan to
address the rapidly escalating Alzheimer's disease crisis and the
coordination of Alzheimer's disease efforts across the Federal
Government. Additional data show that more than 5 million Americans are
suffering from Alzheimer's and dementia today with total costs
exceeding $200 billion annually and on the way to exceeding $1 trillion
annually by mid-century.
How are we measuring and tracking progress towards this goal? Do we
have the necessary resources and tools to achieve if it? If not, what
are we lacking? What more can Congress do to help achieve the goals of
the plan, including the 2025 goal as well as improving care and
supporting caregivers?
Answer. In order to track progress made at the Federal level on
Alzheimer's disease and related dementias, HHS continues to annually
update the National Plan to Address Alzheimer's Disease, with the 2018
Update expected later this summer. The National Plan establishes five
ambitious goals:
Prevent and effectively treat Alzheimer's disease and related
dementias by 2025;
Optimize care quality and efficiency;
Expand supports for people with Alzheimer's disease and
related dementias and their families;
Enhance public awareness and engagement; and
Track progress and drive improvement.
The activities outlined in the National Plan Update vary in scope
and impact and include: immediate actions that the Federal Government
has taken and will take; actions toward the goals that can be initiated
by the Federal Government or its public and private partners in the
near term; and longer-range activities that will require numerous
actions by Federal and non-Federal partners to achieve. Progress is
tracked through these annual updates of the Plan, as well as through
quarterly meetings of the Advisory Council on Alzheimer's Research,
Care, and Services. The Advisory Council receives updates from Federal
partners at each meeting and provides annual recommendations to HHS,
Congress, and other stakeholders about areas where they feel additional
work is necessary to achieve the goals of the National Plan.
Progress has been made on a number of fronts, particularly in
biomedical research, where NIH has been able to translate its yearly
increases in funding to nearly double the number of individual research
grants it has awarded, and continues to make strides towards the goal
of finding a cure for dementia. In the care and services sphere, CMS's
National Partnership to Improve Dementia Care in Nursing Homes
established a national goal in 2014 of reducing the use of
antipsychotic medications in long-stay nursing home residents by 25
percent by the end of 2015, and 30 percent by the end of 2016. Both
goals were achieved and new goals are currently under development.
One of the greatest successes of the past year was the National
Research Summit on Care and Services, held in October of 2017, and
sponsored by the Advisory Council. The goal of the Summit was to bring
together experts from across the country to focus on research that is
needed to improve quality of care and outcomes across care settings,
including quality of life and the lived experience of persons with
dementia and their caregivers. The Summit was a resounding success,
attended by over 500 people, and many others viewed the webcast online.
The Summit also produced a number of recommendations for Federal
agencies and non-Federal partners to pursue. These recommendations are
already being considered by the Federal members of the Advisory Council
as they pursue research projects and policy alterations in the coming
fiscal year.
Congress's continued engagement and commitment to the goals set out
in the National Plan are very helpful in spurring progress. The
Advisory Council has articulated a desire for congressional response to
their annual recommendations, particularly those directed at
legislative change and improvement. Implementation of caregiver support
programs and other services outlined in the President's budget will
help HHS make further progress on providing quality care for people
living with dementia and their caregivers.
Question. I have worked with bipartisan members of the Finance
Committee to expand the use of telehealth, especially in Medicare.
Recently, provisions were signed into law that expand telehealth
services offered through different providers of care that will benefit
seniors in rural areas and increase access to primary care services and
telestroke care. During your previous hearings before the committee you
have called telehealth an ``exciting innovation for rural and
underserved areas.''
As Secretary, I am hopeful that you will prioritize implementing
the important provisions that Congress just passed. I am also
interested in seeing you utilize HHS's existing authority to lower
barriers for telehealth and remote patient monitoring in Medicare. Do
you have any updates on projects that you are working on?
Answer. Telehealth can provide innovative means of making health
care more flexible and patient-centric. Innovation within the
telehealth space could help to expand access to care in rural and
underserved areas. We are working to implement the provisions of the
Bipartisan Budget Act of 2018 addressing telehealth, such as the
provisions increasing access to home dialysis-related care and stroke
care in Medicare, as well as providing certain Part B covered benefits
to Medicare Advantage enrollees, through telehealth.
Furthermore, the Centers for Medicare and Medicaid Services (CMS)
has previously sought information regarding ways that it might further
expand access to telehealth services within the current statutory
authority and pay appropriately for services that take full advantage
of communication technologies. CMS is carefully reviewing comments and
considering commenters' suggestions for future rulemaking and any
appropriate sub-regulatory changes.
I look forward to continued discussions on telehealth, including on
the best means to offer patients increased access, greater control, and
more choices that fit their medical needs.
Question. The declining cost of digital storage and Internet
connectivity have made it possible to connect a vast range of products
and services to the Internet, with medical devices and medical data at
the forefront of this trend.
However, manufacturers are often bringing insecure devices to
market, with few incentives to design the products with security in
mind, or to provide ongoing support to address vulnerabilities. For
example, there have been cases where implantable devices are
susceptible to unauthorized or malicious commands that are sent
remotely.
While I am pleased to see a spending boost for cybersecurity
efforts within HHS, I am concerned that the administration is proposing
to cut the Office of the National Coordinator for Health IT, ONC's,
budget by more than a third, from $60 million to $38 million, for FY
2019.
ONC has been some of the most technically adapt, along which FDA in
taking important steps to addressing cybersecurity in the Internet of
things. During your confirmation you said that you would continue
efforts to strengthen cybersecurity with the industry.
How does your Department have the expertise to fight and protect
cyber threats if those who have the appropriate knowledge and expertise
don't have the requite resources? Does the HHS have a perspective on
how best to improve our Nation's cybersecurity posture?
Answer. The HHS Deputy Secretary (currently Eric D. Hargan) serves
as the senior official responsible for coordinating cybersecurity
activities across the Department. Mr. Hargan convenes the HHS
Cybersecurity Working Group, which brings together representatives from
all Operating and Staff Divisions with cybersecurity responsibilities
for senior-level coordination on policy and program matters. The
Department takes seriously its role as the sector specific agency for
the Health care and Public Health Sectors with respect to cybersecurity
under, among other things, PPDs 21 and 41.
Various components of the Department, including the Office of the
National Coordinator for Health IT (ONC), the HHS Office for Civil
Rights (OCR), Assistant Secretary for Preparedness and Response (ASPR),
and the Department's Office of the Chief Information Officer (OCIO)
have formed strong partnerships within the Department--and with other
Federal partners such as the Department of Homeland Security and
National Institute for Standards and Technology. Through these
partnerships, HHS provides cybersecurity expertise with a health care
(including health IT) and public health focus. This also includes
participation in public-private initiatives, such as those related to
the National Health Information Sharing and Analysis Center (NH-ISAC)
and helping to communicate identified security threats to the health IT
community (e.g., ransomware attacks).
Question. The administration halved this years' Open Enrollment
period and significantly reduced funding for nonpartisan health-care
Navigators. Cuts to this important program greatly diminished their
ability to reach consumers during the enrollment period. The
information these Navigators and outreach efforts would have provided
would have been especially valuable given the high amount of confusion
surrounding the marketplace.
Now that you are leading the Department, what are you going to do
to ensure that consumers are well informed about the opportunity to
enroll? Are you committed to ensuring Americans wishing to enroll in
coverage, have access to unbiased application assistance from the
navigator program in years to come?
Answer. Please note that the previous administration proposed that
the open enrollment period be shortened to the current length starting
for the 2019 plan year, and that this policy aligns more closely with
the 1 month open enrollment periods we typically see in the employer-
sponsored insurance market and the 7 week Medicare open enrollment
period, the two markets where the vast majority of Americans are
successfully enrolled, year after year.
I will examine the data and work with the Administrator to make the
best,
evidence-based decisions, balancing prudent use of resources with
faithful execution of the law. As it relates to advertising
expenditures, it is my understanding that the current level of spending
is consistent with what is spent on promotion for Medicare Advantage
and Part D, and that Navigators were funded at levels based partly on
their ability to meet their enrollment goals from the prior year so as
to inject accountability into that program.
Question. As you may know, included in the Bipartisan Budget
Agreement of 2018 is a provision that reduces hospital payments when a
patient is transferred to hospice. I have concerns that this financial
penalty could discourage hospitals from giving patients a timely
referral to hospice. One way to help address this concern is for the
administration to develop new quality metrics that will allow
individuals as well as policymakers to identify models that honor
patient choice and provide high-quality care.
Can you provide an update on how the administration is approaching
quality measurement, especially with regard to honoring patient choice
at end of life?
Answer. This is an area of significant importance to our health-
care system and every family who ultimately faces challenging end of
life care questions. To your specific question, as required under
section 1814(i)(5) of the Social Security Act, CMS administers a
Hospice Quality Reporting Program. Section 1814(i)(5)(A)(i) of the act
requires that beginning with FY 2014 and each subsequent FY, the
Secretary shall reduce the market basket update by 2 percentage points
for any hospice that does not comply with the quality data submission
requirements for that FY. The Hospice Quality Reporting Program
includes data submitted by hospices through the Hospice Item Set (HIS)
data collection tool, and an experience of care survey, the Hospice
Consumer Assessment of Healthcare Providers and Systems (CAHPS).
The HIS captures information about patient choice at the end of
life through two of its National Quality Forum (NQF)-endorsed quality
measures: the Treatment Preferences measure, and the Beliefs/Values
Addressed measure. The CAHPS Hospice Survey is used to collect data on
the experiences of hospice patients and the primary caregivers listed
in their hospice records and is the first standardized national survey
available to collect information on patients' and informal caregivers'
experience of hospice care. Several of the CAHPS Hospice Survey NQF-
endorsed measures address patient choice at the end of life, including
the Communication with Family measure, the Treating Patients With
Respect measure, and the Emotional and Spiritual Support measure.
______
Questions Submitted by Hon. Claire McCaskill
Question. Mr. Azar, please describe any provisions in the
President's FY 2019 budget that would directly limit increases in
prescription drug list price. Additionally, please describe any
provisions in the President's FY 2019 budget that directly limit
increases in reimbursement for prescription drugs.
Answer. The budget includes proposals to create incentives that
will put downward pressure on the list price of drugs. One proposal
involves changing the incentive structure of the Part D benefit by
modifying the distribution of liability in the catastrophic phase.
Specifically, the proposal increases Part D plan sponsors' risk in the
catastrophic phase by increasing plan liability over 4 years from 15
percent to 80 percent, and simultaneously decreasing Medicare's
reinsurance liability from 80 to 20 percent. Additionally, beneficiary
coinsurance would decrease from 5 to 0 percent, creating a true out-of-
pocket maximum in Part D for the first time in the program's history.
Collectively, these changes provide beneficiaries with more predictable
annual drug expenses and incentivize plans to better manage spending
throughout the entirety of the benefit. Currently, plan sponsors have
incentives to accept higher prices so that their enrollees reach the
catastrophic coverage phase sooner and that expense is offloaded on to
the Federal Government These proposed modifications additionally
incentivize plans to negotiate with drug manufacturers to keep list
prices down as they now bear the majority of the financial risk in the
catastrophic phase. In addition, in Part B, the budget proposes an
inflation cap on the average sales price, so that the increase of the
average sales price above inflation will receive lower reimbursement
paid out through Medicare Part B. Another proposal to improve
manufacturers' reporting of average sales prices would provide the
Secretary with the authority to apply penalties to manufacturers who do
not report required data. Incomplete or inaccurate data leads to
Medicare paying more for drugs. Additionally, increased plan formulary
flexibility and negotiation power with manufacturers will provide plans
with enhanced ability to negotiate lower prices. This will improve
price transparency and allow beneficiaries to share more directly in
the savings from discounts negotiated by plans.
Question. Mr. Azar, there was nothing in the budget specifically
aimed at reining in the increases in direct-to-consumer prescription
drug advertising. Are there steps that the administration can take to
address the rise in direct-to-consumer prescription drug advertising?
If so, please describe.
Answer. I am working with Commissioner Gottlieb to examine whether
our approach to how we authorize and approve direct-to-consumer
prescription drug advertising, consistent with the law, including the
First Amendment.
When considering a change to the FDA's policy on direct-to-consumer
drug advertisements, the agency often examines and conducts research to
ensure that any changes are grounded in science and will have the
greatest benefit to public health. For this reason, the FDA conducts
research about the content and delivery of drug advertisements to
ensure it is delivered in a way that will optimize health-care
professional and patient understanding of the benefits and risks of
prescription drugs.
______
Questions Submitted by Hon. Sheldon Whitehouse
Question. As you know, Secretary Burwell announced specific payment
reform goals of tying 30 percent of Medicare fee-for-service payments
to quality or value through alternative payment models by the end of
2016 and 50 percent by 2018. These goals sent a strong signal that
galvanized the public and private sectors to participate in the
movement away from fee-for-service payment.
During your nomination hearing before the Health, Education, Labor,
and Pensions Committee, you acknowledged the importance of this work,
saying: It is, I think, one of the great legacies of Secretary
Burwell's tenure was launching off so many of the alternative payment
models that we have out there, and I would like to keep driving that
forward.
Should the Federal Government take a leadership role in moving our
health-care system away from fee-for-service payment?
On February 20th, The Washington Post reported that the Centers for
Medicare and Medicaid Services is no longer focused on achieving the
Medicare payment reform goals announced by Secretary Burwell in 2015
but instead on ``evaluating the impact of new payment models on
patients and providers.'' Do you plan to announce different goals and
targets for participation in value-based payment and alternative
payment models? Why can't evaluation of the past administration's
efforts be done at the same time CMS works toward those payment reform
goals?
How do you intend to monitor and measure overall progress related
to payment reform and implementation of new delivery models?
What is your plan for driving forward participation in alternative
payment models across public and private health-care sectors?
Answer. Upon taking office at HHS, I identified the value-based
transformation of our entire health-care system as one of the top
priorities for our department. Value-based transformation in particular
is not a new passion for me. It became a top priority for Secretary
Mike Leavitt when I was working for him as Deputy Secretary, and it was
taken seriously by President Obama's administration as well, including
under the leadership of Secretary Burwell.
It has been, at times, a frustrating process. But there is no
turning back to an unsustainable system that pays for procedures rather
than value. In fact, the only option is to charge forward--for HHS to
take bolder action, and for payers and providers to join with us.
There are four particular areas of emphasis that will be vital to
laying down new rules of the road, accelerating value-based
transformation, and creating a true market for health care. The four
areas of emphasis are: giving consumers greater control over health
information through interoperable and accessible health information
technology; encouraging transparency from payers and providers; using
experimental models in Medicare and Medicaid to drive value and quality
throughout the entire system; and removing government burdens that
impede this transformation.
The key theme uniting these four priorities is the recognition that
value is not accurately determined by outside authorities or central
planners.
Question. At your Health, Education, Labor, and Pensions Committee
nomination hearing, you said, ``As I indicated in my opening statement,
one of my top priorities as Secretary, if confirmed, will be to use the
power of Medicare and Medicaid to drive transformation of our health-
care system from a procedure-based system that pays for sickness to a
value-based system that pays for quality and outcomes. If given the
opportunity to serve I will use the appropriate tools within the
Department to meet this goal and measure our progress in reaching it.
''
What specific tools in the Department of Health and Human Services
will you use to meet and measure progress on transforming our health-
care system from a procedure-based system to a value-based system?
Answer. I am committed to value-based transformation of the health-
care system. We have a range of tools for using the Medicare and
Medicaid programs to pay for value, many created by the 2015 MACRA
legislation. The Center for Medicare and Medicaid Innovation, alongside
these tools, vests HHS with tremendous power to experiment with new
payment models. In addition, the President's budget especially supports
particular priorities that we have laid out for the Department,
including using Medicare to move our health system to a more value-
based direction.
Question. As we've previously discussed, I have observed a
recurring bias within the HHS for taking care of the middle of the pack
on major health initiatives. This type of policymaking makes political
sense because that is where most health-care providers are. But it
fails to drive and reward the health-care providers who take financial
and reputational risks by engaging early in new payment and delivery
models and investing in the tools and personnel needed to improve the
quality of care while reducing costs.
In a response to a question for the record on this topic, you
responded that we need to ``ensure that our programs do not penalize or
create any disincentives for those providers who are at the forefront
of leading us toward the desired future State of our health-care
system.'' What steps have you taken, and what steps do you intend to
take, to ensure HHS programs do not penalize or create disincentives
for the ``lead dogs,'' the providers at the forefront of payment and
delivery system reform?
Answer. I am committed to value-based transformation of the entire
health-care system and will work to ensure that providers at the
forefront of payment and delivery system reform are not penalized. One
example of a step that has been taken is the changes CMS has made to
the Medicare Shared Savings Program to encourage continued
participation from high performing ACOs. In addition, we are looking at
our efforts regarding ACOs to determine how we can improve results, and
we are looking at all alternative payment models to determine what is
and what is not working. Furthermore, under the Merit-based Incentive
Payment System (MIPS), one of two avenues under the Quality Payment
Program, the structure of the program incentivizes performance by
``lead dogs'' or high performers. The higher a clinician's or a group
practice's score, the higher the payment adjustment under MIPS. For
exceptional performance above an even higher performance threshold, an
additional MIPS payment adjustment factor is also available for the
first 6 years of the program.
Question. As you know, the framework for MACRA is laid out in
statute, but the administration has significant flexibility to adjust
the metrics by which clinician performance is measured and to exempt
clinicians from MACRA requirements.
What is your goal for the number of clinicians participating in the
advanced alternative payment model pathway in 2019 and 2020?
What is your goal for the number of clinicians participating in the
Merit-Based Incentive Payment System in 2019 and 2020?
Will you commit to pursuing higher performance standards in the
Merit-Based Incentive Payment System over time?
Answer. Although we do not have numerical participation goals for
clinicians in either the Merit-Based Incentive Payment System (MIPS) or
Advanced Alternative Payment Models (APMs), we have done extensive
outreach with clinicians, patients and other stakeholders, and created
seven strategic objectives for these programs. These objectives help to
guide our policies and future rulemaking so that we can design,
implement, and advance a program that aims to improve health outcomes,
promote efficiency, minimize burden of participation, and provide
fairness and transparency in operations.
These strategic objectives are: (1) To improve beneficiary outcomes
and engage patients through patient-centered Advanced APM and MIPS
policies; (2) to enhance clinician experience through flexible and
transparent program design and interactions with easy-to-use program
tools; (3) to increase the availability and adoption of robust Advanced
APMs; (4) to promote program understanding and maximize participation
through customized communication, education, outreach and support that
meet the needs of the diversity of physician practices and patients,
especially the unique needs of small practices; (5) to improve data and
information sharing on program performance to provide accurate, timely,
and actionable feedback to clinicians and other stakeholders; (6) to
deliver IT systems capabilities that meet the needs of users for data
submission, reporting, and improvement and are seamless, efficient and
valuable on the front and back-end; and (7) to ensure operation
excellence in program implementation and ongoing development; and to
design the program in a manner that allows smaller independent and
rural practices to be successful.
The first year of MIPS was established as a transition year, and in
the second year, we continued the transition and provided a gradual
ramp-up of the program and of the performance threshold. To allow the
Quality Payment Program to work for all stakeholders, we also recognize
that we must provide ongoing education, support, and technical
assistance so that clinicians can understand program requirements, use
available tools to enhance their practices, and improve quality and
progress toward participation in APMs if that is the best choice for
their practice.
Question. In response to a question for the record, you wrote, ``Of
course, we must exercise the power of CMMI and other authorities in
ways that are open and transparent, and that seek out collaboration and
input as much as possible.'' Last year, the Centers for Medicare and
Medicaid Services collected public comments on a Request for
Information on a new direction for the CMS Innovation Center. To date,
none of those comments have been released publicly.
Give your emphasis on openness and transparency, why hasn't CMS
released all of the public comments submitted to its ``new direction''
Request for Information?
Do you have a timeline for releasing all of the comments?
Answer. As you highlight, Senator Whitehouse, we share a commitment
to harnessing the power of the Center for Medicare and Medicaid
Innovation (Innovation Center) to advance and enhance the way health
care is provided in America. Our existing partnerships with health-care
providers, clinicians, States, payers and stakeholders have generated
important value and lessons and CMS is setting a new direction for the
Innovation Center. That is why, in September 2017, CMS released a
Request for Information \7\ (RFI) seeking public feedback on ways to
promote
patient-driven care and test market-driven reforms that empower
beneficiaries as consumers, provide price transparency, increase
choices and competition to drive quality, reduce costs, and improve
outcomes. We are grateful for the comments and thoughtful ideas that we
received in response to the RFI. Overall, through the close of the
comment period in November, CMS received approximately 1,000
submissions. CMS continues to review these submissions, and they will
be an integral source of information as CMS moves forward with the
agency-wide efforts to promote innovation, including through the design
and testing of additional Advanced APMs that will aim to improve the
patient-provider experience. However, our engagement with stakeholders
has not ended with this RFI and we look forward to continuing to work
with all stakeholders to make sure we are delivering results and
putting the patient in the driver's seat.
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\7\ https://innovation.cms.gov/Files/x/newdirection-rfi.pdf.
We are committed to following the Administrative Procedures Act
(APA) and while the comments were not solicited as part of any proposed
rule, and therefore CMS is not obligated to publish the comments, we
plan to make the comments available on the Innovation Center's website
and are happy to work with you and relevant stakeholders to share any
---------------------------------------------------------------------------
additional information as needed.
Question. How is CMS disseminating best practices from payment and
delivery models identified as working and lessons learned from those
that are not?
Answer. As required by section 1115A of the Social Security Act,
CMS conducts an evaluation of each model tested under such section. The
Innovation Center, using independent evaluators, routinely and
rigorously assesses the impact of each model on quality and cost. Each
evaluation report is posted on the Innovation Center's website. The
Innovation Center has also created model-specific learning
collaboratives that promote broad and rapid dissemination among model
participants of evidence-based best practices that have the potential
to deliver high quality and lower cost care for Medicare, Medicaid, and
CHIP beneficiaries. In addition, CMS has incorporated lessons from
models in other programs. For example, after the Pioneer Accountable
Care Organization (ACO) Model was determined to meet the statutory
requirements for expansion, CMS incorporated elements of the Pioneer
ACO Model into the Medicare Shared Savings Program.
Question. Please provide the following information about CMS
Innovation Center operations:
The number of FTEs working at the Center in 2016, 2017, and
2018 (to date).
Annual Center expenditures in 2016, 2017, and 2018 (to date).
A list of alternative payment models and initiatives that,
since 2016:
Have been announced or introduced by the Center;
Are being tested;
Have been terminated by the Center; and
Have been deemed eligible for expansion by the Center.
A list of alternative payment models for which there are
interim or final evaluations.
Answer. As of September 30, 2017, the Innovation Center had 581
staff. The Innovation Center's net outlays in FY 2016, 2017, and 2018
(to date) are $1,156 million, $1,136 million, and $1,278 million,
respectively. To date, the Innovation Center has tested or announced 39
models. A list of the models and information about their status is
available at https://innovation.cms.gov/initiatives/
index.html#views=models. Every Innovation Center model is independently
evaluated, and all evaluation reports are available at: https://
innovation.cms.gov/Data-and-Reports/index.html.
Question. I have heard from stakeholders that CMS does not have a
coherent, systematic strategy for resolving issues that arise--e.g.,
attribution of beneficiaries, expenditures, and savings--when health
care providers and beneficiaries participate in overlapping alternative
payment models. Instead, resolution of these issues is done on a one-
off, model-by-model basis, and that guidance is not made widely
available to the public. This lack of transparency and haphazard
approach creates uncertainty and confusion about the rules of the road
for participating in alternative payment models.
What is CMS's framework for resolving issues that rise related to
overlapping alternative payment models?
Will you direct CMS to make publicly available policy decisions
related to overlapping alternative payment models?
Answer. Transparent model design is one of the guiding principles
for models tested by CMS. Overlap between current and anticipated
alternative payment models is a factor that CMS considers in the design
of models. CMS has a system for aligning beneficiaries to models and
programs and ensuring that shared savings and
performance-based payments are only paid once for an individual
beneficiary. Generally, policies for overlap between models and other
initiatives are included in the Requests for Applications for models.
Question. An evaluation published in Health Affairs of the 2016
Medicare Shared Savings Program results showed that the longer
providers participate in the program, the more likely they were to
achieve shared savings. In addition, the data shows that physician-led
ACOs are more likely to achieve shared-savings payments than ACOs whose
membership includes hospitals. What is CMS's strategy for ensuring
physician-led ACOs are able to sustain their participation in the
Medicare Shared Savings Program?
Answer. I agree that physician-only ACOs continue to outperform
ACOs that include a hospital and that ACOs continue to show greater
improvement in financial and quality performance as they gain
experience in the program. We are looking at our efforts regarding ACOs
to determine how we can improve results. CMS has made changes to the
Medicare Shared Savings Program to encourage continued participation
from high performing ACOs, and we continue to consider ways to enhance
the program.
______
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 Finance Committee
hearing to consider the administration's fiscal year (FY) 2019 budget
request for the Department of Health and Human Services (HHS).
Before I begin, I want to express, on behalf of the committee, the
sadness we all feel in light of yesterday's events in Florida. I was
personally horrified as I watched the news unfold yesterday, though I
was also moved to hear some of the stories of the heroism displayed by
some of the students and teachers at the school.
In times like these, I know that thoughts expressed from those of
us who are far away can sometimes seem empty and meaningless in the
face of such a terrible tragedy. I will simply say that I am praying
for all of those who were affected by these acts of senseless violence.
That, of course, includes a member of our committee who I know is
mourning the loss and pain felt by those in his home State. May they
all find peace, healing, and a speedy recovery.
I welcome everyone to today's hearing, which will be our third and
final hearing on the President's budget for fiscal year 2019.
We've already had the Treasury Secretary and the Acting IRS
Commissioner appear before us. And today, we'll be talking with
Secretary Azar from the Department of Health and Human Services.
Secretary Azar, thank you for being here and welcome back. It has
been just a little over a month since you last appeared before us. Of
course, you are still very new to your position, but we are glad to
have you back because we have a lot to discuss.
Since you were last here, this committee has amassed a number of
legislative victories. I want to take a few minutes to highlight these
accomplishments as many are within HHS's jurisdiction.
Last month, as a result of countless hours of work by this
committee, Congress passed and the President signed a 6-year CHIP
extension. A few weeks later, we added another 4 years to that
extension as part of the Bipartisan Budget Act.
That is 10 more years of CHIP funding, which is, quite frankly, a
historic accomplishment.
Senator Ted Kennedy and I created the CHIP program more than 2
decades ago. And, despite always enjoying bipartisan support, at no
point in the program's history have we been able to deliver this much
certainty and security for the families and children who depend on
CHIP. I want to once again commend my colleagues on both sides who
joined in this effort and who share in this success.
It was no small feat.
In addition to the CHIP extension, the CHRONIC Care Act, another
bipartisan legislative product out of this committee, was also signed
into law recently. This new law will improve care for Medicare
beneficiaries living with chronic conditions, streamline care
coordination, and improve quality outcomes without worsening Medicare's
shaky fiscal status. Again, I want to thank everyone on this committee
who worked on this bill, most notably our ranking member, Senator
Wyden, as well as Senators Isakson and Warner, who were key leaders in
the drafting and passage of this important bill.
And it doesn't end there. The budget bill also included the
bipartisan Family First Prevention Services Act, which will help keep
more children safely with their families--specifically by funding
substance abuse and mental health services that have been shown to
prevent children from entering foster care.
All of this success is testament to bipartisanship and proves that
it is possible for both parties to find common ground and work
together. As always, there is more work to be done and I am optimistic
that we can be just as effective in the coming months.
Of course, these recent achievements won't mean much if they are
not implemented properly. Secretary Azar, I look forward to working
with you as this process moves forward.
Now, I'd like to take a moment to talk about some of the specifics
in the President's budget, which recognizes the need to eliminate
wasteful spending, rein in our national debt, and focus on protecting
Americans at home. I appreciate that the President's budget takes steps
toward a course correction that will hopefully lead to a more
economically sound future, all while still ensuring high-quality, and
accessible health care.
One of the key and critical assumptions in the President's budget
is the repeal of Obamacare. The budget bakes in this repeal, and
replaces it with a State-based grant system. All told, the
administration estimates that this would save more than $675 billion.
Many of us on the committee--I think all of us on the Republican
side--share this desire to repeal Obamacare, and we've actually done
some great work on rolling back major elements of the so-called
Affordable Care Act this Congress. For starters, our tax reform bill
zeroed out the individual mandate tax.
The recent budget bill also included the so-called Medicare
extenders and repealed the Independent Payment Advisory Board. And, in
that same bill, we extended previous delays on other Obamacare taxes,
including the medical device tax, the health insurance, and the so-
called Cadillac tax. But, as the budget points out, we are not quite
there yet. I hope we can take additional steps in the future and I look
forward to continuing our discussions on how we can stop the
skyrocketing cost of health care in a meaningful and well-governed way.
Beyond the critical repeal and replace efforts with Obamacare, we
also need to start getting serious about Medicare and Medicaid reforms.
Both of these programs need to be put on a more sustainable path, so
that we can fulfill the promises of these programs for future
generations.
I know that any time a Republican mentions the fiscal predicament
of Medicare and Medicaid, we're essentially asking to be accused of
robbing the elderly and low-income families of their health care. But,
none of these scare tactics will improve the outlook of our Federal
health-care programs. That's going to take some hard work and,
hopefully, we can find a path forward there as well.
Secretary Azar, during your confirmation hearing, you emphasized
that addressing rising drug prices would be one of your top priorities.
As you know, I've spent quite a bit of time on this issue, working to
ensure that patients have access to innovative and high-quality
medications. It can be tricky to balance the need to encourage
investment and development of new and effective drugs and treatments
while also working to make sure those in need can obtain access to
those potentially life-saving and life-improving products.
Some have made a crusade out of scapegoating the companies that
develop drugs and treatments.
And, when this almost singular focus prevails, the result is policy
that tends to be less than perfect, to put it charitably. We saw an
example of this in last week's Bipartisan Budget Act that increased the
discount that manufacturers are required to provide under the so-called
donut hole in Medicare Part D.
I voiced my opposition to the inclusion of this provision in the
budget agreement on the Senate floor last week. I am working with my
colleagues who share my concern on the increased manufacturer discount
provision to mitigate its impact.
Further, as this budget has a number of other drug-related policy
proposals, I implore the administration to take care to strike a
balance between access and innovation. It is a balance that I hope that
we should all strive to achieve.
Secretary Azar, you also emphasized that addressing America's
opioid crisis is another one of your top priorities. I am happy to see
that the President's budget stresses the importance of working together
to fight this epidemic.
The CDC estimates that, each day, our country experiences more than
100 opioid-related deaths.
My home State of Utah has been especially hard hit. And while the
drug overdose rate has risen over the past decade, we are starting to
see a shifting tide thanks to the leadership of many officials in my
State. With that said, they need Federal help.
And, I know that many in Congress, including several members of
this committee, have been outspoken leaders in this effort, and I
commend them for their work.
We are committed to continuing our bipartisan committee process to
address the opioid epidemic, especially through mandatory program
proposals that can bring about meaningful and enduring change to a
system plagued with issues.
Mr. Secretary, I look forward to working with you in the coming
months as we look for solutions to address this crisis, and I hope that
we, as a committee, can continue our bipartisan efforts to curtail this
growing string of tragedies.
To close, let me just say that, as we all know, it is Congress's
responsibility to pass a budget. The President's proposed budget merely
sets the tone and provides us with a baseline for debate. I hope that
we can work together to implement many of the common-sense reforms
we've been debating for so long. And I hope that we can continue to
work to set aside our differences in order to find beneficial
solutions.
I look forward to having an open and frank discussion with
Secretary Azar about these and other matters.
Before I close, I do want to note that because we were unable to
get a quorum yesterday, if, at any point during the hearing, a suitable
quorum is present, I intend to pause the hearing and move to votes on
the nominations of Mr. Dennis Shea and Mr. C.J. Mahoney. Thereafter,
we'll resume our hearing.
______
Prepared Statement of Hon. Ron Wyden,
a U.S. Senator From Oregon
It's budget season in Washington, which means the Trump agenda of
health care discrimination is back. This morning I'll run through the
plan example by example.
Let's start off with discrimination against Americans with pre-
existing conditions. People who have pre-existing conditions count on
having a robust private insurance market with strong consumer
protections. What the Trump budget offers is chaos in the private
insurance market and the elimination of key consumer protections.
The budget embraces the old Graham-Cassidy proposal, which lived a
mercifully short life last fall before it was blocked on a bipartisan
basis. But here it is once again, warts and all, another crack at
repealing the Affordable Care Act and forcing Americans to pay more for
less care. On top of that, the administration is giving a green light
to junk insurance policies that revive the worst industry abuses of the
past, such as skimpy coverage and dollar limits on care. So for
millions of people with pre-existing conditions, the Trump
administration seems dead-set on making the care they need unaffordable
and inaccessible.
Next up in the agenda of health-care discrimination is
discrimination against women. When you get rid of the consumer
protections in the Affordable Care Act, you're turning the clock back
to an era when 75 percent of insurance plans in the individual market
didn't cover maternity care or birth control. And under the Trump
budget, which arbitrarily attacks Planned Parenthood and other key
providers, millions of women would lose the right to see the doctor of
their choosing.
Then the Trump agenda of health-care discrimination goes after
Americans who are walking an economic tightrope: $1.4 trillion cut from
Medicaid. Millions of working Americans locked out of the program. A
scheme to wipe out key nationwide protections and cap the program,
essentially ending the guarantee of care for those who qualify for
Medicaid. Now the Trump administration is reportedly discussing
lifetime limits for Americans in Medicaid. Both sides used to agree
that lifetime limits in health care were absolutely wrong, no
exceptions. The ban on lifetime limits in the Affordable Care Act was
one of the core protections even Republicans said should stay.
Introducing lifetime limits in Medicaid raises the frightening question
of what happens if somebody maxes out after cancer treatment at age 45.
Are they going to be on the street in old age, capped out of the
nursing home benefit, for example?
Finally, the Trump agenda of health care discrimination turns
against older Americans. Slashing Medicaid to the bone and transforming
the program into a capped program is an enormous threat to the welfare
of seniors. Medicaid helps pay for two out of three seniors in nursing
homes, and it's essential for seniors who count on home-based care.
Even for Americans at age 62 or 63, there's bad news. The Trump budget
would hit them with an age tax, allowing insurance companies to charge
them at far higher rates than they charge others.
Bottom line, the agenda of health care discrimination is out in
force in this Trump budget. It is a comprehensive plan to drag America
back to the dark days when health care worked only for the healthy and
the wealthy.
Another issue the committee needs to address this morning is the
cost of prescription drugs. Donald Trump famously talked about how drug
companies were ``getting away with murder'' by setting drug prices so
high. The way he talked about the problem, Americans believed he was
going to come out swinging with big solutions to this challenge.
In the plan released late last week, I still don't see a solution
to the fundamental issue: drug companies set prices that are way too
high. Yes, the whole system is broken and needs reform. But if drug
companies can still come right out of the gate with unaffordable
prices, patients will still suffer. I'll put this simply. The Trump
prescription drug plan lets pharmaceutical companies keep on, to borrow
a phrase, getting away with murder.
That said, much of what the administration put forward last week
looks awfully familiar. That might be because a lot of it borrowed
directly from legislation I've proposed, or recommendations that came
from outside groups. There's value in these ideas, and much of it could
move forward on a bipartisan basis. But the American people are still
looking for the kind of muscular policies the President promised he'd
bring forward, and it's still not there.
Finally, I want to discuss a different part of Secretary Azar's
jurisdiction at HHS, but one that's vital to the well-being of kids
across the country. Last week, the Congress passed a bill Chairman
Hatch and I wrote called the Family First Prevention Services Act,
which amounts to the most consequential improvements to the child
welfare system in decades.
For too long, the child welfare system has defaulted to splitting
families apart. The Family First Act is all about finding safe ways to
keep families together and healthy. For the first time, States will get
to use foster care dollars to fund services like substance use
treatment, mental health treatment, and parenting programs with the
goal of preventing the kind of prolonged slide into crisis that ends
with families breaking apart.
Particularly with the opioid epidemic raging across the country,
this is a smart, new approach that can go a long way to helping
hundreds of thousands of families and kids. But now that Congress
passed the bill, it's up to HHS to implement it the right way. With
bipartisan legislation that has this much potential for good, it would
be criminal for HHS to stand pat and let States continue the status
quo.
______
Blue Cross of Idaho Application Form
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
______
Letter Submitted by Hon. Ron Wyden
February 14, 2018
Honorable Alex Azar
Secretary of Health and Human Services
U.S. Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201
Re: Idaho Department of Insurance Bulletin 18-01 (January 24, 2018)
Dear Secretary Azar:
The 15 undersigned organizations represent millions of patients facing
serious, acute, and chronic health conditions across the country. We
collectively stand ready to ensure that these patients have access to
affordable, adequate health insurance in order to treat and manage
their conditions. We write regarding the recent action by the State of
Idaho to authorize the issuance of health insurance plans that violate
numerous requirements of the Affordable Care Act (ACA) that provide
essential protections to individuals and families. We urge you to
address this issue in a timely manner, and provide clarification by the
Department of Health and Human Services that Idaho's Department of
Insurance Bulletin 18-01 is legally invalid.
Idaho's insurance bulletin would allow insurers to sell individual
market plans that do not comply with federal law.\1\ Because the Idaho
Bulletin purports to authorize the issuance of insurance coverage that
is prohibited by federal law, it is legally invalid. Under the
Affordable Care Act, a ``health insurance issuer'' is prohibited from
offering ``health insurance coverage'' in the individual or small group
market that violates the statute's consumer protection standards.\2\
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\1\ The Supremacy Clause of the United States Constitution (Article
V, Section 2) provides that federal laws ``shall be the supreme Law of
the Land; . . . any Thing in the Constitution or Laws of any State to
the Contrary notwithstanding.'' States therefore cannot authorize
companies to violate federal law.
\2\ See 42 U.S.C. Sec. Sec. 300gg and 300gg-4.
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Idaho's insurance bulletin would allow the sale of products that could:
Deny coverage of pre-existing conditions for those with a break
in coverage; \3\
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\3\ Federal law bars insurers from imposing pre-existing condition
exclusions (42 U.S.C. Sec. 300gg-3) or continuous coverage requirements
(42 U.S.C. Sec. 300gg-1), but the Idaho bulletin ( 3) permits such
exclusions for individuals who lack coverage in the prior 63 days.
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Charge older Americans up to five times as much as younger
Americans; \4\
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\4\ Federal law prohibits insurers from setting premium rates that
vary by more than a 3:1 age ratio and that vary by more than 50% for
tobacco use (42 U.S.C. Sec. 300gg and 300gg-4), but the Idaho bulletin
( 5) allows plans to vary their rates by a 5:1 age ratio.
---------------------------------------------------------------------------
Impose higher premiums on people with pre-existing conditions;
\5\
---------------------------------------------------------------------------
\5\ Federal law prohibits insurers from setting premium rates based
on health status (42 U.S.C. Sec. Sec. 300gg), but the Idaho bulletin (
5) allows plans to vary their rates based on a risk factor.
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Put a dollar limit on insurance benefits; \6\
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\6\ Federal law prohibits insurers from setting an annual limit on
the amount the insurer will pay (42 U.S.C. Sec. 300gg-11), but the
Idaho bulletin ( 6) permits an annual limit of no less than $1 million
per person.
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Increase consumers' annual out-of-pocket costs; \7\ and
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\7\ Federal law prohibits health insurance coverage that violates
the maximum out-of-pocket cost limit established by Federal law (42
U.S.C. Sec. 18002(c)), but the Idaho bulletin ( 7) applies the out-of-
pocket cost ceiling to the bulletin's more restrictive list of
essential health benefits (and therefore permits higher out-of-pocket
costs than does Federal law) and in addition permits separate maximums
for different types of services (e.g., one for prescription drugs and
another for other services), which is also contrary to Federal law.
---------------------------------------------------------------------------
Exclude key health benefits such as maternity care, newborn
care, habilitative services, and pediatric vision and dental services--
and potentially others such as contraceptive services, tobacco
cessation and cancer screening.\8\
---------------------------------------------------------------------------
\8\ Federal law prohibits individual market coverage that fails to
cover specified essential health benefits (42 U.S.C. Sec. Sec. 300gg-6
and 300gg-13), but the Idaho bulletin ( 4) permits plans that do not
cover a number of the essential health benefits specified under Federal
law: maternity care; newborn care; pediatric vision and dental care;
habilitative services; and the full set of preventive services, such as
contraceptive services, recommended cancer screening, and gestational
diabetes screening.
Idaho's action--if it is permitted to stand--would seriously injure
Idaho patients and consumers and significantly destabilize Idaho's
entire health insurance market. Individuals and families who purchase
these plans may not have insurance coverage for essential health
services and would likely pay more out of pocket for the services that
are covered--while older Americans and individuals with pre-existing
conditions, because of premium surcharges, would likely pay more for
less coverage. Further, older Americans could be charged up to five
times the premiums for younger Americans--much more than the three-to-
one limit in federal law. People with pre-existing conditions could be
charged up to 50 percent on top of what they otherwise would pay. And a
person who is both older and has a pre-existing condition could be
charged premiums up to 15 times more than a young, healthy American.\9\
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\9\ Tim Jost, ``Idaho's Proposal for State-Based Plans Violates the
Affordable Care Act,'' The Commonwealth Fund, February 8, 2018,
available at http://www.commonwealthfund.org/publications/blog/2018/
feb/idaho-state-based-plan.
Health-care providers that care for patients with these substandard
plans may find the plans won't cover the bills, resulting in medical
debt for patients or uncompensated care for providers. While the
Bulletin would require issuers who offer skinny plans to provide a
disclosure ``on the face of the policy that: The Policy is not fully
compliant with federal health insurance requirements,''\10\ we are
concerned that this disclosure is insufficient education to consumers
to warn them of the limitations of the plan's coverage.
---------------------------------------------------------------------------
\10\ Idaho Bulletin at 8.
The cap on insurers' payments and increased out-of-pocket limits for
families could impose serious financial burdens on Idaho families. For
instance, a person who has an accident and requires an expensive
medication after being hospitalized may pay twice the federal limit on
out-of-pocket spending of $7,350: once for medical care and a second
---------------------------------------------------------------------------
time for the prescriptions.
Individuals and families who continue to purchase plans that comply
with Federal law will likely pay more for it, because healthier
individuals are more likely to be siphoned off, which will unbalance
the risk pool for lawful plans.\11\ Insurers that do not offer these
plans will incur losses as their risk pools are left with sicker,
costlier patients.
---------------------------------------------------------------------------
\11\ Policy experts surmise that the skimpy plans will be
attractive to younger and healthier consumers, while older and sicker
individuals will gravitate to ACA-compliant plans ``rendering coverage
unaffordable for many Idahoans who don't qualify for the ACA's premium
tax subsidies and aren't young or healthy enough to afford the State-
based plans.'' This will result in higher Federal subsidies needed to
pay for the more expensive plans offered on the exchanges. See Sabrina
Corlette, ``Idaho Goes Rogue: State Authorizes Sale of Health Plans
That Violate the Affordable Care Act,'' Georgetown University Health
Policy Institute Center for Children and Families, February 1, 2018,
available at https://ccf.georgetown.edu/2018/02/01/idaho-goes-rogue-
state-authorizes-sale-of-health-plans-that-violate-the-affordable-care-
act/.
The Federal Government must uphold the requirements of Federal law that
protect patients, their families, and the health system against these
consequences. On behalf of our patients, and all Americans, we urge you
to make clear that Idaho cannot authorize the issuance of health
insurance coverage that violates federal law, and that any insurer that
---------------------------------------------------------------------------
issues such plans risks enforcement action and serious penalties.
Sincerely,
American Cancer Society Cancer Action Network
American Diabetes Association
American Heart Association
American Liver Foundation
American Lung Association
Cystic Fibrosis Foundation
Epilepsy Foundation
Hemophilia Federation of America
Leukemia and Lymphoma Society
Lutheran Services in America
March of Dimes
Mended Little Hearts
Muscular Dystrophy Association
National MS Society
National Organization for Rare Disorders
______
Excerpt From the Hearing to Consider the
Graham-Cassidy-Heller-Johnson Proposal
September 25, 2017
Senator Wyden. Mr. Chairman, one of our past great chairmen, Pat
Moynihan, said everybody is entitled to his own opinion, but not his
own facts. So let us hear from the American Cancer Society with respect
to the real facts. They have a lot of members who understand the hurt
that comes from being discriminated against for having a pre-existing
condition. Mr. Woodruff, what do you think with respect to this bill
and what it is going to do to people with a cancer fight on their
hands?
Mr. Woodruff. Well, it does not protect them, Senator. It basically
makes the patient protections that were enacted into law in the
Affordable Care Act discretionary on the part of each State. And each
State can decide to keep those patient protections or not. But what is
important about what the Act achieved is, it created a definition, a
national standard for what is adequate insurance and what is
affordable. And so with the essential health benefits, we actually have
an assurance that when you buy insurance, it is going to cover the
services that you need when you are sick, whether you have cancer or
any other disease. The essential health benefits are there to protect
you.
Senator Wyden. Thank you.
Mr. Woodruff. Sure.
Senator Wyden. And I want the American people to understand the
consequence of that statement. The Cancer Society knows something about
what it means for patients to get clobbered by an extraordinary
illness, and what they have said is, this opens up the door to charging
those people more.
______
Communication
----------
Center for Fiscal Equity
Statement of Michael G. Bindner
Chairman Hatch and Ranking Member Wyden, thank you for the opportunity
to submit these comments for the record to the Committee on Finance on
the HHS FY 2019 Budget Request.
Most of our proposals are about tax and entitlement policy and the
process of estimating discretionary spending, rather than specific
recommendations for departmental budgets. We are wondering, however,
why this hearing, which mainly presents discretionary budget request
data for the subject fiscal year, is still being held when on Friday
last an Omnibus Appropriation for the period in question was passed and
signed into law. For the record, we fully support the increases to the
NIH budget, which was horribly underfunded of late. Regardless, our
comments still apply so we will preface them with our comprehensive
four-part approach, which will provide context.
A Value-Added Tax (VAT) to fund domestic military spending and
domestic discretionary spending with a rate between 10% and 13%, which
makes sure very American pays something.
Personal income surtaxes on joint and widowed filers with net
annual incomes of $100,000 and single filers earning $50,000 per year
to fund net interest payments, debt retirement, and overseas and
strategic military spending and other international spending, with
graduated rates between 5% and 25%.
Employee contributions to Old-Age and Survivors Insurance (OASI)
with a lower income cap, which allows for lower payment levels to
wealthier retirees without making bend points more progressive.
A VAT-like Net Business Receipts Tax (NBRT), which is
essentially a subtraction VAT with additional tax expenditures for
family support , health care and the private delivery of governmental
services, to fund entitlement spending and replace income tax filing
for most people (including people who file without paying), the
corporate income tax, business tax filing through individual income
taxes and the employer contribution to OASI, all payroll taxes for
hospital insurance, disability insurance, unemployment insurance and
survivors under age 60.
Discretionary activities of the Department of Health and Human Services
would be funded by the VAT. While some of our VAT proposals call for
regional breakdowns of taxing and spending, they do not for this
department. While some activities, such as the Centers for Disease
Control, exist outside the Washington, DC metro area, even these are
site specific rather than spread out on a nation-wide basis to serve
the public at large. While some government activities benefit from
national and regional distribution, health research will not.
The one reform that might eventually be considered in this area is to
more explicitly link government-funded research with ownership of the
results, so that the Department might fund some of their operations
with license agreements for some of the resulting research, enabling an
expanded research agenda without demanding a higher budget allocation.
Of course, regionalization is possible if the Uniformed Public Health
Service is put into the role of seeing more patients, particularly
elderly patients and lower-income patients who are less than well
served by cost-containment strategies limiting doctor fees. Medicaid is
notoriously bad because so few doctors accept these patients due to the
lower compensation levels, although we are encouraged the health care
reform is attempting to reduce that trend. Medicare will head down that
road shortly if something is not done about the Doc Fix. It may become
inevitable that we expand the UPHS in order to treat patients who may
no longer be able to find any other medical care. If that were to
happen, such care could be organized regionally and funded with
regionally based taxes, such as a VAT.
The other possible area of cost savings has to do with care, now
provided for free, on the NIH campus. While patients without insurance
should be able to continue to receive free care, patients with
insurance likely could be required to make some type of payment for
care and hospitalization, thus allowing an expansion of care, greater
assistance to patients who still face financial hardship in association
with their illnesses and a restoration of some care that has been
discontinued due to budget cuts to NIH. This budget contains even more
cuts. These should not be allowed. Rather, previous cuts must be
restored.
The bulk of our comments have to do with health and retirement
security.
One of the most oft-cited reforms for dealing with the long-term
deficit in Social Security is increasing the income cap to cover more
income while increasing bend points in the calculation of benefits, the
taxability of Social Security benefits, or even means-testing all
benefits, in order to actually increase revenue rather than simply
making the program more generous to higher-income earners. Lowering the
income cap on employee contributions, while eliminating it from
employer contributions and crediting the employer contribution equally
removes the need for any kind of bend points at all, while the
increased floor for filing the income surtax effectively removes this
income from taxation. Means testing all payments is not advisable given
the movement of retirement income to defined contribution programs,
which may collapse with the stock market--making some basic benefit
essential to everyone.
Moving the majority of Old-Age and Survivors Tax collection to a
consumption tax, such as the NBRT, effectively expands the tax base to
collect both wage and non-wage income while removing the cap from that
income. This allows for a lower tax rate than would otherwise be
possible while also increasing the basic benefit so that Medicare Part
B and Part D premiums may also be increased without decreasing the
income to beneficiaries. Increasing these premiums essentially solves
their long term financial problems while allowing repeal of the Doc
Fix.
If personal accounts are added to the system, a higher rate could be
collected, however recent economic history shows that such investments
are better made in insured employer voting stock rather than in
unaccountable index funds, which give the Wall Street Quants too much
power over the economy while further insulating ownership from
management. Too much separation gives CEOs a free hand to divert income
from shareholders to their own compensation through cronyism in
compensation committees, as well as giving them an incentive to cut
labor costs more than the economy can sustain for consumption in order
to realize even greater bonuses.
Employee-ownership ends the incentive to enact job-killing tax cuts on
dividends and capital gains, which leads to an unsustainable demand for
credit and money supply growth and eventually to economic collapse
similar to the one most recently experienced.
Congress just adopted a Chained CPI, but no additional fund has been
proposed for poor seniors or the disabled, which means there will be
suffering. This should not be allowed without some readjustment of base
benefit levels, possibly by increasing the employer contribution and
grandfathering in all retirees. This is easily done using our proposed
NBRT, which replaces the Employer Contribution to OASI and all of DI
and should be credited equally to all workers rather than being a
function of income.
The NBRT base is similar to a Value-Added Tax (VAT), but not identical.
Unlike a VAT, an NBRT would not be visible on receipts and should not
be zero rated at the border--nor should it be applied to imports. While
both collect from consumers, the unit of analysis for the NBRT should
be the business rather than the transaction. As such, its application
should be universal--covering both public companies who currently file
business income taxes and private companies who currently file their
business expenses on individual returns.
A key provision of our proposal is consolidation of existing child and
household benefits, including the Mortgage Interest and Property Tax
Deductions, into a single refundable Child Tax Credit of at least $500
per month, per child, payable with wages and credited against the NBRT
rather than individual taxes. Ending benefits for families through the
welfare system could easily boost the credit to $1,000 per month for
every family, although the difference would also be made up by lowering
gross and net incomes in transition, even for the childless.
Assistance at this level, especially if matched by state governments
may very well trigger another baby boom, especially since adding
children will add the additional income now added by buying a bigger
house. Such a baby boom is the only real long-term solution to the
demographic problems facing Social Security, Medicare and Medicaid,
which are more demographic than fiscal. Fixing that problem in the
right way adds value to tax reform. Adopting this should be scored as a
pro-life vote, voting no should be a down check to any pro-life voting
record.
The NBRT should fund services to families, including education at all
levels, mental health care, disability benefits, Temporary Aid to Needy
Families, Supplemental Nutrition Assistance, Medicare and Medicaid.
Such a shift would radically reduce the budget needs of HHS, while
improving services to vulnerable populations, although some of these
benefits could be transferred to the Child Tax Credit.
The NBRT could also be used to shift governmental spending from public
agencies to private providers without any involvement by the
government--especially if the several states adopted an identical tax
structure. Either employers as donors or workers as recipients could
designate that revenues that would otherwise be collected for public
schools would instead fund the public or private school of their
choice. Private mental health providers could be preferred on the same
basis over public mental health institutions. This is a feature that is
impossible with the FairTax or a VAT alone.
To extract cost savings under the NBRT, allow companies to offer
services privately to both employees and retirees in exchange for a
substantial tax benefit, provided that services are at least as
generous as the current programs. Employers who fund catastrophic care
would get an even higher benefit, with the proviso that any care so
provided be superior to the care available through Medicaid. Making
employers responsible for most costs and for all cost savings allows
them to use some market power to get lower rates, but not so much that
the free market is destroyed. Increasing Part B and Part D premiums
also makes it more likely that an employer-based system will be
supported by retirees.
Enacting the NBRT is probably the most promising way to decrease health
care costs from their current upward spiral--as employers who would be
financially responsible for this care through taxes would have a real
incentive to limit spending in a way that individual taxpayers simply
do not have the means or incentive to exercise. While not all employers
would participate, those who do would dramatically alter the market. In
addition, a kind of beneficiary exchange could be established so that
participating employers might trade credits for the funding of former
employees who retired elsewhere, so that no one must pay unduly for the
medical costs of workers who spent the majority of their careers in the
service of other employers. Conceivably, NBRT offsets could exceed
revenue. In this case, employers would receive a VAT credit.
The Administration believes that the Affordable Care Act is failing. It
was not, but it will soon with the end of mandates. Rates will soon
start going up as incentives for the uninsured are not adequate in the
light of pre-existing condition reform to make them less risk averse
than investors in the private insurance market, the whole house of
cards may collapse--leading to either single payer or the enactment of
a subsidized public option (which, given the nature of capitalism, will
evolve into single payer). While no one knows how the uninsured will
react over time, the investment markets will likely go south at the
first sign of trouble.
We suggest to the Secretary that he have an option ready when this
occurs. Enactment of a tax like the NBRT will likely be necessary in
the unlikely event the ACA collapses. It could also be used to offset
non-wage income tax cuts proposed by the House, rather than cutting
coverage for older, poorer and sicker Americans. Single-payer is
inevitable unless the President is simply blowing smoke about the ACA
failing.
Thank you for the opportunity to address the committee. We are, of
course, available for direct testimony or to answer questions by
members and staff.
[all]