[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                    THE FISCAL YEAR 2020 HHS BUDGET

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 12, 2019

                               __________

                           Serial No. 116-16
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


      Printed for the use of the Committee on Energy and Commerce

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                        energycommerce.house.gov
                        
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
37-490 PDF                  WASHINGTON : 2020                     
          
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                    COMMITTEE ON ENERGY AND COMMERCE

                     FRANK PALLONE, Jr., New Jersey
                                 Chairman
BOBBY L. RUSH, Illinois              GREG WALDEN, Oregon
ANNA G. ESHOO, California              Ranking Member
ELIOT L. ENGEL, New York             FRED UPTON, Michigan
DIANA DeGETTE, Colorado              JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania             MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois             STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina    ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California          CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida                BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland           PETE OLSON, Texas
JERRY McNERNEY, California           DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont                 ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico            H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York                 GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice     BILL JOHNSON, Ohio
    Chair                            BILLY LONG, Missouri
DAVID LOEBSACK, Iowa                 LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon                BILL FLORES, Texas
JOSEPH P. KENNEDY III,               SUSAN W. BROOKS, Indiana
    Massachusetts                    MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California            RICHARD HUDSON, North Carolina
RAUL RUIZ, California                TIM WALBERG, Michigan
SCOTT H. PETERS, California          EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan             JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas                GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
                                 ------                                

                           Professional Staff

                   JEFFREY C. CARROLL, Staff Director
                TIFFANY GUARASCIO, Deputy Staff Director
                MIKE BLOOMQUIST, Minority Staff Director
                         Subcommittee on Health

                       ANNA G. ESHOO, California
                                Chairwoman
ELIOT L. ENGEL, New York             MICHAEL C. BURGESS, Texas
G. K. BUTTERFIELD, North Carolina,     Ranking Member
    Vice Chair                       FRED UPTON, Michigan
DORIS O. MATSUI, California          JOHN SHIMKUS, Illinois
KATHY CASTOR, Florida                BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland           H. MORGAN GRIFFITH, Virginia
BEN RAY LUJAN, New Mexico            GUS M. BILIRAKIS, Florida
KURT SCHRADER, Oregon                BILLY LONG, Missouri
JOSEPH P. KENNEDY III,               LARRY BUCSHON, Indiana
    Massachusetts                    SUSAN W. BROOKS, Indiana
TONY CARDENAS, California            MARKWAYNE MULLIN, Oklahoma
PETER WELCH, Vermont                 RICHARD HUDSON, North Carolina
RAUL RUIZ, California                EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan             GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire         GREG WALDEN, Oregon (ex officio)
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
LISA BLUNT ROCHESTER, Delaware
BOBBY L. RUSH, Illinois
FRANK PALLONE, Jr., New Jersey (ex 
    officio)
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     2
    Prepared statement...........................................     2
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     3
    Prepared statement...........................................     4
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     5
    Prepared statement...........................................     6
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     8
    Prepared statement...........................................     9

                               Witnesses

Alex Azar, Secretary, Department of Health and Human Services....    10
    Prepared statement...........................................    11
    Answers to submitted questions...............................   100

                           Submitted Material

Article of February 20, 2019, ``Texan Republican rejects Dems' 
  criticism of Homestead facility for migrant kids,'' Fort Worth 
  Star-Telegram, submitted by Mr. Burgess........................    92
Article of March 9, 2019, ``U.S. Continues to Separate Migrant 
  Families Despite Rollback of Policy,'' The New York Times, by 
  Miriam Jordan and Caitlin Dickerson, submitted by Ms. Eshoo....    94

 
                    THE FISCAL YEAR 2020 HHS BUDGET

                              ----------                              


                        TUESDAY, MARCH 12, 2019

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 12:01 p.m., in 
the John D. Dingell Room 2123, Rayburn House Office Building, 
Hon. Anna G. Eshoo (chairwoman of the subcommittee) presiding.
    Members present: Representatives Eshoo, Engel, Butterfield, 
Matsui, Castor, Sarbanes, Lujan, Schrader, Kennedy, Cardenas, 
Welch, Ruiz, Dingell, Kuster, Kelly, Barragan, Blunt Rochester, 
Rush, Pallone (ex officio), Burgess (subcommittee ranking 
member), Upton, Shimkus, Guthrie, Griffith, Bilirakis, Long, 
Bucshon, Brooks, Mullin, Hudson, Carter, Gianforte, and Walden 
(ex officio).
    Also present: Representatives DeGette, Schakowsky, and 
Tonko.
    Staff present: Kevin Barstow, Chief Oversight Counsel; 
Jacquelyn Bolen, Health Counsel; Jeffrey C. Carroll, Staff 
Director; Luis Dominguez, Health Fellow; Waverly Gordon, Deputy 
Chief Counsel; Tiffany Guarascio, Deputy Staff Director; Megan 
Howard, FDA Detailee; Zach Kahan, Outreach and Member Service 
Coordinator; Saha Khaterzai, Professional Staff Member; Chris 
Knauer, Oversight Staff Director; Una Lee, Senior Health 
Counsel; Kevin McAloon, Professional Staff Member; Joe Orlando, 
Staff Assistant; Kaitlyn Peel, Digital Director; Alivia 
Roberts, Press Assistant; Tim Robinson, Chief Counsel; Samantha 
Satchell, Professional Staff Member; Andrew Souvall, Director 
of Communications, Outreach and Member Services; Kimberlee 
Trzeciak, Senior Health Policy Advisor; Rick Van Buren, Health 
Counsel; C.J. Young, Press Secretary; Jennifer Barblan, 
Minority Chief Counsel, Oversight and Investigations; Mike 
Bloomquist, Minority Staff Director; Adam Buckalew, Minority 
Director of Coalitions and Deputy Chief Counsel, Health; Jordan 
Davis, Minority Senior Advisor; Margaret Tucker Fogarty, 
Minority Staff Assistant; Brittany Havens, Minority 
Professional Staff, Oversight and Investigations; Peter Kielty, 
Minority General Counsel; Ryan Long, Minority Deputy Staff 
Director; James Paluskiewicz, Minority Chief Counsel, Health; 
Brannon Rains, Minority Staff Assistant; Kristen Shatynski, 
Minority Professional Staff Member, Health; and Danielle 
Steele, Minority Counsel, Health.
    Ms. Eshoo. The Subcommittee on Health will now come to 
order.
    The Chair now recognizes herself for 5 minutes. Actually, I 
will only use 2, so that we can move things along today.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    We welcome the Secretary of Health and Human Services, Alex 
Azar, to testify on the President's fiscal year 2020 budget.
    Good morning, Mr. Secretary.
    This is the first time that Secretary Azar is testifying 
before the Energy and Commerce Committee in the new Congress, 
and his first stop on the Hill to testify on the President's 
budget is here. So thank you for starting with us.
    The President's budget certainly reflects the priorities of 
the administration, but I believe that our national budget 
should be a statement of our nation's national values, and I 
don't believe that the budget does that. The Trump 
administration has taken a hatchet to every part of the 
healthcare system, undermining the Affordable Care Act, 
proposing a fundamentally-restructured Medicaid, and slashing 
Medicare. This budget proposes to continue that sabotage.
    In November, the American people rejected the sabotage of 
healthcare that took place, and it is the reason that I am 
sitting in this chair and that the ratios of this committee and 
the Congress have changed.
    Our subcommittee has worked hard over the past two months 
to examine ways to undo the sabotage of the Affordable Care Act 
and advance legislation that will bring down healthcare costs 
for the American people, and we will continue that work.
    I hope, Secretary Azar, that you will be willing to be a 
partner in our work to lower healthcare costs for the American 
people, and we welcome your testimony and your presence here 
today.
    [The prepared statement of Ms. Eshoo follows:]

                Prepared Statement of Hon. Anna G. Eshoo

    Today we welcome the Secretary of Health and Human Services 
Secretary Alex Azar to testify on the President's Fiscal Year 
2020 Budget.
    This is the first time Secretary Azar has testified before 
the Energy and Commerce Committee in the new Congress.
    The Health Subcommittee is also Secretary Azar's first stop 
during his visit to Capitol Hill to testify on the President's 
Budget which was released yesterday. We're pleased you started 
with us.
    The President's Budget reflects the priorities of an 
Administration, and I believe the priorities of this 
Administration are misdirected.
    It's clear this Administration has very different 
aspirations for our country and what our healthcare system 
should look like.
    The Trump Administration has taken a hatchet to every part 
of our healthcare system, undermining the Affordable Care Act, 
proposing to fundamentally restructure Medicaid and slashing 
Medicare. This budget proposes to continue that sabotage,
    In November, the American people rejected the vision for 
our country that this budget represents.
    This Subcommittee has worked very hard over the past two 
months to examine ways to undo the sabotage of the Affordable 
Care Act and advance legislation that will bring down 
healthcare costs for the American people. And we will continue 
that work.
    Secretary Azar, I hope that you'll be a partner in our work 
to lower healthcare costs for the American people and we 
welcome your testimony.

    Ms. Eshoo. The Chair now recognizes Dr. Burgess, the 
ranking member of the subcommittee, for 5 minutes for his 
opening statement.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Chairwoman.
    And, Mr. Secretary, good afternoon. Welcome to our humble, 
little subcommittee. It is a pleasure to have you testifying 
before us today to hear your views about the fiscal year 2020 
budget proposal.
    The President's budget provides Congress with an important 
blueprint for our appropriations process and with the policies 
that this President and his administration would like to see in 
the coming fiscal year. As we know, under the Constitution, no 
money may be spent from the Treasury unless it is appropriated 
by Congress, and in a perfect world no money would be 
appropriated unless the expenditure has previously been 
authorized.
    The Energy and Commerce Committee is a principal 
authorizing committee of the United States House of 
Representatives. I believe this is a critical task and it is 
important to get input from the Department of Health and Human 
Services when we are authorizing or re-authorizing or reforming 
programs that are under your control.
    While we do hear from the boots on the ground in our 
districts, it is the agency that both oversees the 
implementation of these programs and provides funding to ensure 
that the organizations can carry out the initiatives' goals.
    Secretary Azar, thus far, in your tenure as the Secretary 
of the Department of Health and Human Services, you have proven 
to be immensely helpful to this committee and its work. You and 
your team have been responsive to our requests for information 
and for input, and you have made yourself available to Members, 
so that we can hear about your priorities and your intention to 
work with Congress on a number of initiatives.
    I will say this: of all the Secretaries of Health and Human 
Services over the years that I have been in Congress, I have 
found you to be the most transparent and accessible. And I look 
can forward to continuing to partner with you on your efforts 
to improve access and quality of healthcare for Americans.
    One issue that I have raised in each hearing in this 
Congress, and one that I hear consistently from constituents 
back home, is the cost and complexity of the healthcare system. 
North Texans frequently tell me that they can barely afford 
their insurance premiums, let alone the cost they must pay to 
seek the care they need, especially those with high-deductible 
plans.
    Secretary Azar, I know that addressing the cost of 
healthcare, and specifically drug prices, has been a priority 
for the Department under your leadership. I hope this 
committee, being the one with the primary jurisdiction over 
these issues, will work with you as we consider ways to solve 
these issues.
    Additionally, as the Energy and Commerce Committee 
primarily drafted landmark laws, including the 21st Century 
Cures and last year's opiate effort, the SUPPORT for 
Communities Act, we should conduct responsible oversight to 
ensure that the Department of Health and Human Services is 
implementing these laws in alignment with congressional intent.
    It is encouraging to see that the President's budget 
request seeks to expand treatment and recovery support for 
individuals suffering from substance use disorders, in addition 
to enhancing prevention of addiction in the first place. While 
it is important to stem the tide of addiction, we cannot ignore 
those who have a legitimate need for pain treatment, including 
cancer patients, patients with sickle cell anemia, and others. 
To that effect, the budget requests $500 million to use for the 
National Institute of Health to partner with private industry 
to work towards the development of non-addictive pain 
therapies, in addition to addiction treatments and overdose 
reversal technologies.
    Additionally, I am encouraged to see that the budget 
proposes a significant sum of money for childhood cancer 
therapies and significant money to defeat the HIV/AIDS 
epidemic. Both efforts are worthy of congressional support.
    Another important agency within Health and Human Services, 
the Office of Refugee Resettlement, is required to provide care 
for unaccompanied alien children, a task for which your agency 
was unprepared when this crisis began in 2012, when president 
Obama signed an Executive Order enacting the Deferred Action 
for Childhood Arrivals. While conditions and quality of care 
have improved, the number of illegal border crossings continues 
to increase. And let me be clear, the Office of Refugee 
Resettlement does not enforce immigration law. They receive 
children as a result of other agencies' enforcement activities.
    President Trump's budget includes $3.7 billion in fiscal 
year 2020 for the Unaccompanied Alien Children Program. 
Congress charged the Office of Refugee Resettlement with the 
care of unaccompanied alien children. And I hope this committee 
will support those dedicated HHS and ORR employees as they 
continue to work with integrity in the face of baseless 
allegations. If Congress does not want you to undertake that 
task, Congress should change the law. It is up to you; it is up 
to us.
    Ms. Eshoo. The gentleman's time has expired.
    Mr. Burgess. I yield back. Thank you.
    [The prepared statement of Mr. Burgess follows:]

             Prepared statement of Hon. Michael C. Burgess

    Thank you, Chairwoman Eshoo, and welcome to Secretary Azar. 
It is a pleasure to have you testifying before the Health 
Subcommittee this afternoon about the fiscal year 2020 budget 
proposal. The President's budget provides Congress with an 
important blueprint for our appropriations process and with 
policies that the President and his administration would like 
to see in the coming fiscal year.
    Under our Constitution, no money may be spent from the 
Treasury unless appropriated by Congress and, in a perfect 
world, no money would be appropriated unless the expenditure is 
previously authorized. The Energy and Commerce Committee is a 
principal authorizing committee of the U.S. House of 
Representatives. I believe this is a critical task and that it 
is important to get input from the Department of Health and 
Human Services when we are reauthorizing and reforming programs 
under its control. While we do hear from the boots on the 
ground in our districts, it the agency that both oversees the 
implementation of these programs and provides funding to ensure 
that organizations can carry out the initiatives' goals.
    Secretary Azar, thus far in your tenure as the Secretary of 
the Department of Health and Human Services, you have proven to 
be immensely helpful to this Committee and its work. You and 
your team have been responsive to our requests for information 
and input, and you have made yourself available to Members so 
that we can hear about your priorities and your intention to 
work with Congress on various initiatives. Of all the 
Secretaries of Health and Human Services over my years in 
Congress, I have found you to be the most transparent and 
accessible, and I look forward to continuing to partner with 
you on your efforts to improve access and quality of healthcare 
for Americans.
    One issue that I have raised in each hearing this Congress 
and one that I hear consistently from constituents is the cost 
and complexity of the healthcare system. North Texans 
frequently tell me that they can barely afford their insurance 
premiums, let alone the cost they must pay to seek the care 
they need, especially of those with high deductible plans. 
Secretary Azar, I know that addressing the cost of healthcare, 
and specifically drug prices, has been a priority for the 
Department under your leadership. I hope that this Committee, 
being the one with primary jurisdiction over these issues, will 
work with you as we consider ways to solve these issues.
    Additionally, as the Energy and Commerce Committee 
primarily drafted landmark laws, including 21st Century Cures 
and last year's opioid effort--the SUPPORT for and Communities 
Act, we should conduct responsible oversight to ensure that the 
Department of Health and Human Services is implementing these 
laws in alignment with Congressional intent. It is encouraging 
to see that the President's budget request seeks to expand 
treatment and recovery support services for individuals 
suffering from substance use disorders, in addition to 
enhancing prevention of addiction in the first place.
    While it is important to stem the tide of addiction, we 
cannot ignore those who have a legitimate need for pain 
treatment, including cancer patients, sickle cell anemia 
patients, and others. To that effect, the budget requests $500 
million to use for the National Institutes of Health to partner 
with private industry to work towards the development of non-
addictive pain therapies, in addition to addiction treatments 
and overdose-reversal technologies. Additionally, I am 
encouraged to see that the budget proposes $500 million for 
childhood cancer therapies, and $291 million to defeat the HIV/
AIDS epidemic. Both efforts are worthy of Congressional 
support.
    Another important agency within HHS, the Office of Refugee 
Resettlement, is required to provide care for unaccompanied 
alien children, a task for which it was woefully unprepared 
when this crisis began in 2012 when President Obama signed an 
executive order enacting the Deferred Action for Childhood 
Arrivals program. While conditions and quality of care have 
improved, the number of illegal border crossings continues to 
increase. Let me be clear, the Office of Refugee Resettlement 
does not enforce immigration law; they receive children as a 
result of ICE and CBP enforcement.
    President Trump's budget includes up to $3.7 billion in FY 
2020 for the Unaccompanied Alien Children program. Congress 
charged the Office of Refugee Resettlement with the care of 
unaccompanied alien children, and I hope this committee will 
support these dedicated HHS and ORR employees as they continue 
to work with integrity in the face of baseless allegations.
    Again, thank you to Secretary Azar for your willingness to 
testify and for taking the time out of your busy schedule to 
answer our questions.

    Ms. Eshoo. Thank you.
    I now would like to recognize the chairman of the full 
committee, Mr. Pallone, for his opening statement.

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

    Mr. Pallone. Thank you, Madam Chair.
    Last year, President Trump and Congressional Republicans 
passed a deficit-busting $2 trillion tax cut for the wealthy 
and corporations. At that time, we all knew who would take the 
hit when it came time for the administration to produce a 
budget. And now, President Trump proposes a sham of a budget 
that sticks it to average working Americans across the board.
    A budget is a reflection of priorities, and this budget 
makes clear that ensuring all Americans have access to quality 
healthcare is not a priority for this administration. The 
proposed budget for HHS cuts $1.4 trillion in essential 
healthcare programs that are critical to working families and 
to seniors across the nation. Under President Trump's 
leadership, HHS has played a major role in policies to sabotage 
the Affordable Care Act, slash funding for Medicaid, restrict 
access to women's contraception, and separate families at the 
border. This is a devastating record for an agency whose 
mission is to advance the health and well-being of all 
Americans.
    The fiscal year 2020 budget continues to sabotage by 
reviving the failed Graham-Cassidy ACA repeal proposal, which 
would lead to tens of millions of Americans losing their health 
insurance and would undermine protections for people with 
preexisting conditions.
    The President's budget also continues the administration's 
assault on the millions of hard-working families that rely on 
Medicaid for health insurance, proposing $1.5 trillion in cuts 
to Medicaid. It also continues the administration's illegal 
efforts to kick vulnerable Americans off Medicaid through work 
requirements, lockouts, and red tape. This misguided budget 
also includes over $500 billion in cuts to Medicare, putting 
healthcare for our seniors at risk. These are severe and 
extreme healthcare cuts for hard-working middle-class families, 
seniors, and our most vulnerable. This is a sham of a budget 
that has absolutely no chance of ever becoming a reality, but 
it shows the Trump administration's values, and not the values 
of everyday Americans.
    In addition to explaining the cruel cuts made by this 
budget, Secretary Azar will need to account for HHS's role in 
implementing the Trump administration's cruel policy of family 
separation. This policy has caused so much pain and trauma for 
thousands of children, and it is clear that children are still 
wrongly being separated from their parents.
    And finally, Secretary Azar will also have to answer for 
HHS's lack of cooperation with this committee's oversight 
requests. And I stress this, Mr. Secretary over the last two 
months, this committee has attempted to work with HHS in good 
faith in asking for information on a variety of topics from the 
Affordable Care Act to the administration's family separation 
policy. We are requesting important information that is 
critical to our ability to conduct oversight of the Trump 
administration.
    But HHS has been largely unresponsive to our requests, and 
our patience is wearing thin. If Secretary Azar can't commit to 
providing us all of the information we have requested, we are 
prepared to take additional steps to make sure that we get the 
information that we need to conduct this necessary and long-
overdue oversight. And I will get back to that when we get to 
our questions, Mr. Secretary.
    But I do want to thank the Chair for having this important 
budget hearing and thank the Secretary for appearing here 
today.
    Unless someone else would like some of my time, I am going 
to yield back. All right, I yield back, Madam Chair.
    [The prepared statement of Mr. Pallone follows:]

              Prepared statement of Hon. Frank Pallone Jr.

    Last year President Trump and Congressional Republicans 
passed a deficit busting $2 trillion tax cut for the wealthy 
and corporations. At that time, we all knew who would take the 
hit when it came time for the administration to produce a 
budget. And now, President Trump proposes a sham of a budget 
that sticks it to average working Americans across the board.
    A budget is a reflection of priorities, and this budget 
makes clear that ensuring all Americans have access to quality 
healthcare is not a priority for this administration. The 
proposed budget for HHS cuts $1.4 trillion dollars in essential 
healthcare programs that are critical to working families and 
to seniors across the nation. Under President Trump's 
leadership, HHS has played a major role in policies to sabotage 
the Affordable Care Act, slash funding for Medicaid, restrict 
access to women's contraception, and separate families at the 
border. This is a devastating record for an agency whose 
mission is to advance the health and well-being of all 
Americans.
    The FY 2020 budget continues this sabotage by reviving the 
failed Graham-Cassidy ACA repeal proposal, which would lead to 
tens of millions of Americans losing their health insurance and 
would undermine protections for people with pre-existing 
conditions.
    The President's budget also continues the administration's 
assault on the millions of hardworking families that rely on 
Medicaid for health insurance--proposing $1.5 trillion in cuts 
to Medicaid. It also continues the administration's illegal 
efforts to kick vulnerable Americans off Medicaid through work 
requirements, lock outs, and red tape.
    This misguided budget also includes over $500 billion in 
cuts to Medicare, putting healthcare for our seniors at risk.
    These are severe and extreme healthcare cuts for hard-
working middle-class families, seniors and our most vulnerable. 
This is a sham of a budget that has absolutely no chance at 
ever becoming a reality, but it shows this administration's 
values are not the values of everyday Americans.
    In addition to explaining the cruel cuts made by this 
budget, Secretary Azar will need to account for HHS' role in 
implementing the Trump administration's disgraceful and cruel 
policy of family separation. This policy has caused so much 
pain and trauma for thousands of children and it's clear that 
children are still wrongly being separated from their parents.
    Finally, Secretary Azar will also have to answer for HHS's 
lack of cooperation with this Committee's oversight requests. 
Over the last two months, this Committee has attempted to work 
with HHS in good faith in asking for information on a variety 
of topics from the ACA to the administration's family 
separation policy. We are requesting important information that 
is critical to our ability to conduct oversight of this 
administration. HHS has been largely unresponsive to our 
requests. Our patience is wearing thin. If Secretary Azar can't 
commit to providing us all the information we have requested, 
we are prepared to take additional steps to make sure that we 
get the information that we need to conduct this necessary and 
long overdue oversight.
    Thank you, I yield back.

    Ms. Eshoo. We thank the chairman of the full committee.
    I now would like to recognize Mr. Walden, the ranking 
member of the full committee, for his opening statement. Is he 
here? He is on his way? He is running?
    I think that we will recognize----
    Mr. Bucshon. I will claim the time on behalf of the 
chairman at this point.
    Ms. Eshoo. Are you going to----
    Mr. Bucshon. Yes, the ranking member is on the way. So I 
will start out, if that is OK with the chairwoman.
    Ms. Eshoo. Are you making his opening statement? Otherwise, 
we can just go----
    Mr. Bucshon. I am going to make my statement, and then, 
probably yield some of my time to the ranking member, yes.
    Ms. Eshoo. You can proceed.
    Mr. Bucshon. Thank you, Secretary Azar, for being here to 
discuss the President's budget. I think every member of this 
committee appreciates what you are doing, and I echo the 
ranking member of the subcommittee's comments that you have 
been open and accessible to Members of Congress, which is 
greatly appreciated.
    We will look forward to some of the questioning as we go 
along. I do think that we will have some concerns related to 
certain areas of the budget, including the National Institutes 
of Health budget as it relates to healthcare. As you know, I 
was a healthcare provider before.
    And I think we will have a good and solid discussion about 
our issues at our southern border. By the way, I have been 
there, and I believe that the Department of Health and Human 
Services is doing tremendous work with the situation they have 
been relegated to address. Hopefully, you will continue to do 
great work on behalf of all these people in the area of the 
humanitarian crisis that is the southern border.
    And with that, I yield to Mr. Walden, the ranking member of 
the full committee.

   OPENING STATEMENT OF HON. GREG WALDEN A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Well, thank you, Doctor. Appreciate it.
    To our witness, Mr. Secretary, thanks for being here.
    Madam Chair, thanks for having this hearing.
    We want to welcome Secretary Azar back to the committee. 
Thank you.
    On a bipartisan basis, this committee has led the way in 
delivering meaningful healthcare reforms and policies for the 
American people. Last year, we worked together to pass into law 
the SUPPORT for Patients and Communities Act. That was the most 
comprehensive legislation to address a single drug crisis in 
our nation's history. That bill gave your agency unprecedented 
resources and tools to stem the tide of the addiction crisis 
that is still devastating our communities.
    CDC data tell us there are more than 70,000 overdose deaths 
in 2017, and overdoses take the lives of more Oregonians than 
traffic accidents. Whenever we pass a major piece of 
legislation, I really think it is important to dive back in and 
do oversight to find out what is working, what projects are 
still ongoing, and what we need to do to do better. So I would 
love to hear from you today, Mr. Secretary, on the Department's 
work to combat addiction and how we can continue to be partners 
in getting help to those in need.
    We also extended and funded a number of important public 
health programs, including the longest extension of the 
Children's Health Insurance Program in the history of the 
program, 10 full years, with record funding for Community 
Health Centers, which are both important for my Oregon district 
and elsewhere across the country. I just met with the Community 
Health Center over the weekend in Klamath Falls. There are 12 
Community Health Centers, 63 sites, serving 240,000 Oregonians. 
It is really, really important work.
    We also need to continue our work on the cost of 
healthcare. I know the administration is looking at the cost of 
pharmaceutical drugs. From one end of the supply chain to the 
other, we need to continue that work, so I appreciate your 
personal interest in moving aggressively to bring down the cost 
of prescription drugs for patients.
    Last year, the FDA approved a record number of generic 
drugs, I would say, in part, because of the bipartisan 
legislation we passed here. It brings more competition to the 
market. It drives down prices at the pharmacy counter for 
consumers. But we have more work to do, and I look forward to 
continuing this committee's partnership with HHS to rein-in 
excessive costs for healthcare.
    I was also encouraged to see a focus in the President's 
budget on moving toward value-based care. As a country, we must 
move into a healthcare system that pays for value and quality 
of care, but those changes will require major shifts in policy 
and reimbursement. We must work together on those changes to 
get them right.
    The budget also provides new funding dedicated to the 
President's goal of ending the HIV epidemic. That is certainly 
a goal I think everyone on this committee can share.
    So in closing, Mr. Secretary, I appreciate your commitment 
to appear before our committee today, and I look forward to 
engaging in a thoughtful and meaningful discussion.
    If there is anybody else on our side that would like the 
final minute, I would be happy to yield. Otherwise, Madam 
Chair, I will yield back to you.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    Secretary Azar, welcome back to the Energy and Commerce 
Committee. Thank you for being so generous with your time here 
today, and for your leadership at the Department of Health and 
Human Services.
    On a bipartisan basis, this committee has led the way in 
delivering meaningful healthcare reforms and policies for the 
American people. Last year we passed into law the SUPPORT for 
Patients and Communities Act, the most comprehensive bill to 
address a single drug crisis in our nation's history. That bill 
gave HHS unprecedented resources and tools to stem the tide of 
the addiction crisis that is still devastating our communities. 
CDC data tells us there were over 70,000 overdose deaths in 
2017, and overdoses take the lives of more Oregonians than 
traffic accidents. Whenever we pass a major piece of 
legislation, I think it's important to dive back in and do 
oversight to find out what's working, what projects are still 
ongoing, and what we need to do better. I would love to hear 
from you today on the department's work to combat addiction and 
how we can continue to be partners in getting help to those in 
need.
    We also extended and funded a number of important public 
health programs, including the longest extension of the 
Children's Health Insurance Program (CHIP)-10 years--in history 
and record funding for community health centers, which are both 
important for my Oregon district. I just met with the community 
health center over the weekend in Klamath Falls, Oregon, and 
there are 12 community health centers with 63 sites that serve 
more than 240,000 Oregonians in my district. We also extended 
funding for teaching health centers and the special diabetes 
programs in the last Congress. Some of those are whose funding 
expires at the end of this fiscal year, and I look forward to 
working with my colleagues across the aisle to ensure these 
programs are extended and responsibly paid for.
    We also need to continue our work on the cost of 
healthcare, from one end of the supply chain to the other. I 
appreciate your personal interest in moving aggressively to 
bring down the costs of prescription drugs down for patients. 
Last year the FDA approved a record number of generic drugs, 
bringing more competition into the market and driving down 
prices at the pharmacy counter. We have more work to do, and I 
look forward to continuing this committee's partnership with 
HHS to reign in excessive costs for healthcare.
    I was also encouraged to see a focus in the President's 
budget on moving towards value-based care. As a country, we 
must move into a healthcare system that pays for value and 
quality of care, but those changes will require major shifts in 
policy and reimbursement. We must work together on those 
changes to get them right.
    The budget also provides new funding dedicated to the 
President's goal of ending the HIV epidemic--a goal I think all 
of us on this committee share.
    In closing, Mr. Secretary, I appreciate your commitment to 
appear before our committee today. I look forward to engaging 
in a thoughtful and meaningful discussion.

    Ms. Eshoo. We thank the gentleman.
    I would like to remind all the Members that, pursuant to 
committee rules, all Members' written opening statements shall 
be made part of the record.
    So now, welcome again, Mr. Secretary, and you have 5 
minutes to address our not-so-small subcommittee, but very 
powerful one. Welcome, and you have your 5 minutes to impart 
your testimony to us.

  STATEMENT OF ALEX AZAR, SECETARY, DEPARTMENT OF HEALTH AND 
                         HUMAN SERVICES

    Mr.Azar. Thank you very much. Chairman Pallone, Chairwoman 
Eshoo, Ranking Members Walden and Burgess, thank you for 
inviting me here to discuss the President's budget for fiscal 
year 2020.
    It is an honor to have spent the year since I last appeared 
before this committee leading the Department of Health and 
Human Services. The men and women of HHS have delivered 
remarkable results since then, including record new and generic 
drug approvals, new affordable health insurance options, and 
signs that the trend in drug overdose deaths is beginning to 
flatten and decline.
    The budget proposes $87.1 billion in FY 2020 discretionary 
spending for HHS, while moving towards our vision for a 
healthcare system that puts American patients first. It is 
important to note that HHS had the largest discretionary budget 
of any non-Defense Department in 2018, which means that staying 
within the caps set by Congress has required difficult choices 
that I am sure many will find quite hard to countenance.
    Today, I want to highlight how the President's budget 
supports a number of important goals for HHS. First, the budget 
proposes reforms to help deliver Americans truly patient-
centered, affordable healthcare. The budget would empower 
States to create personalized healthcare options that put you, 
as the American patient, in control and ensure you are treated 
like a human being, not a number. Flexibilities in the budget 
would make this possible while promoting fiscal responsibility 
and maintaining protections for people with preexisting 
conditions.
    Second, the budget strengthens Medicare to help secure our 
promise to America's seniors. The budget extends the solvency 
of the Medicare Trust Fund for eight years, while the program's 
budget will still grow at a 6.9 percent annual rate.
    In three major ways, the budget lowers costs for seniors 
and tackles special interests that are currently taking 
advantage of the Medicare program. First, we propose changes to 
discourage hospitals from acquiring smaller practices just to 
charge Medicare more. Second, we address overpayments to post-
acute providers. Third, we will take on drug companies that are 
profiting off of seniors and Medicare. Through a historic 
modernization of Medicare Part D, we will lower seniors' out-
of-pocket costs and create incentives for lower list prices. We 
also protect seniors by transferring funding for graduate 
medical education and uncompensated care from Medicare to the 
General Treasury Fund, so all taxpayers, not just our seniors, 
share these costs.
    I also want to acknowledge the work of this committee on 
lowering out-of-pocket drug costs. Thanks to legislation on 
pharmacy gag clauses that this committee sent to President 
Trump's desk, America's pharmacists can now always work with 
patients to get them the best deal on their medicines. I 
believe there are many more areas of common ground on drug 
pricing where we can work together to pass bipartisan 
legislation to help the American people.
    Finally, the budget fully supports HHS's five-point 
strategy for the opioid epidemic: better access to prevention, 
treatment, and recovery services; better targeting the 
availability of overdose-reversing drugs; better data on the 
epidemic; better research on pain and addiction, and better 
pain management practices. The budget provides $4.8 billion 
towards these efforts, including the $1 billion State Opioid 
Response Program in which we focused on access to medication-
assisted treatment, behavioral support, and recovery services.
    The budget also invests in other public health priorities, 
including fighting infectious disease at home and abroad. It 
proposes $291 million in funding for the first year of 
President Trump's plan to use the effective treatment and 
prevention tools we have today to end the HIV epidemic in 
America by 2030.
    Finally, I want to highlight an announcement from HHS 
today. As we commence a process to identify a new Commissioner 
of Food and Drugs as quickly as possible, I am pleased to 
announce that the current Director of the National Cancer 
Institute, Dr. Ned Sharpless, will serve as Acting Commissioner 
for Food and Drugs following the conclusion of Commissioner 
Gottlieb's incredibly successful tenure at some point in early 
April. NCI's Deputy Director, Dr. Douglas Lowy, will serve as 
Acting Director of the Institute while Dr. Sharpless is the 
Acting Commissioner.
    This year's budget will advance American healthcare. It 
will help deliver on promises we have made to the American 
people. I look forward to working with this committee on our 
shared priorities in the year ahead, and I look forward to your 
questions today.
    Thank you, Madam Chairwoman.
    [The prepared statement of Mr. Azar follows:]

                  Prepared Statement of Mr. Alex Azar

    The mission of the U.S. Department of Health and Human 
Services (HHS) is to enhance and protect the health and well-
being of all Americans by providing for effective health and 
human services and by fostering sound, sustained advances in 
the sciences underlying medicine, public health, and social 
services. This work is organized into five strategic goals, and 
is unified by a vision of our healthcare, human services, and 
public health systems working better for the Americans we 
serve. By undertaking these efforts in partnerships with 
States, territories, tribal governments, local communities, and 
the private sector, we will succeed at putting Americans' 
health first.
    Since I testified before this committee in 2018, the HHS 
team has delivered impressive results. This past year saw HHS, 
the Department of Labor, and the Department of Treasury open up 
new affordable health coverage options, at the same time the 
Affordable Care Act (ACA) exchanges were stabilized, with the 
national average benchmark premium on Healthcare.gov dropping 
for the first time ever. According to a report by the Council 
of Economic Advisers, actions taken by the administration, 
along with the elimination of the individual mandate penalty, 
are estimated to provide a net benefit to Americans of $453 
billion over the next decade.
    Congress worked with the administration to deliver new 
resources for fighting the opioid crisis, allowing HHS to make 
more than $2 billion in opioid-related grants to States, 
territories, tribes, and local communities in 2018. 
Prescriptions for medication-assisted treatment options and 
naloxone are up, while legal opioid prescribing is down. HHS 
also worked to bring down prescription drug prices, including 
by setting another record for most generic drug approvals by 
FDA in a fiscal year and working with Congress to ensure 
pharmacists can inform Americans about the lowest-cost 
prescription drug options.
    The President's Fiscal Year (FY) 2020 Budget supports HHS's 
continued work on these important goals by prioritizing key 
investments that help advance the administration's commitments 
to improve American healthcare, address the opioid crisis, 
lower the cost of drugs, and streamline Federal programs, while 
reforming the Department's programs to better serve the 
American people.
    The Budget proposes $87.1 billion in discretionary budget 
authority and $1.2 trillion in mandatory funding for HHS. It 
reflects HHS's commitment to making the Federal Government more 
efficient and effective by focusing spending in areas with the 
highest impact.
    HHS's Fiscal Year 2020 Budget reflects decisions not just 
to be prudent with taxpayer dollars, but also to stay within 
the budget caps Congress created in the Budget Control Act. 
With the largest non-defense discretionary appropriation of any 
cabinet agency in 2019, HHS must make large reductions in 
spending in order to stay within Congress's caps, set a prudent 
fiscal course, and provide for other national priorities. This 
budget demonstrates that HHS can prioritize its important work 
within these constraints, and proposes measures to reform HHS 
programs while putting Americans' health first.

    REFORM, STRENGTHEN, AND MODERNIZE THE NATION'S HEALTHCARE SYSTEM

    Reforming the Individual Market for Insurance

    The Budget proposes bold reforms to empower States and 
consumers to improve American healthcare. These reforms return 
the management of healthcare to the States, which are more 
capable of tailoring programs to their unique markets, 
increasing options for patients and providers, and promoting 
financial stability and responsibility, while protecting people 
with preexisting conditions and high healthcare costs.
    The Budget includes proposals to make it easier to open and 
use Health Savings Accounts and reform the medical liability 
system to allow providers to focus on patients instead of 
lawsuits.

    Lowering the Cost of Prescription Drugs

    Putting America's health first includes improving access to 
safe, effective, and affordable prescription drugs. The Budget 
proposes to expand the administration's work to lower 
prescription drug prices and reduce beneficiary out-of-pocket 
costs. The administration has proposed and, in many cases, made 
significant strides to implement bold regulatory reforms to 
increase competition, improve negotiation, create incentives to 
lower list prices, reduce out-of-pocket costs, improve 
transparency, and address foreign free-riding. Congress has 
already taken bipartisan action to end pharmacy gag clauses, so 
patients can work with pharmacists to lower their out-of-pocket 
costs. The Budget proposes to:

 Stop regulatory tactics used by brand manufacturers to impede 
    generic competition;
         Ensure Federal and State programs get their 
        fair share of rebates, and enact penalties to prevent 
        the growth of prescription drug prices beyond 
        inflation;
         Improve the Medicare Part D program to lower 
        seniors' out-of-pocket costs, create an out-of-pocket 
        cap for the first time, and end the incentives that 
        reward list price increases;
         Improve transparency and accuracy of payments 
        under Medicare Part B, including imposing payment 
        penalties to discourage pay-for-delay agreements; and
         Build on America's successful generic market 
        with a robust biosimilars agenda, by improving the 
        efficient approval of safe and effective biosimilars, 
        ending anticompetitive practices that delay or restrict 
        biosimilars market entry, and harnessing payment and 
        cost-sharing incentives to increase biosimilar 
        adoption.

    Reforming Medicare and Medicaid

    Medicare and Medicaid represent important promises made to 
older and vulnerable Americans, promises that President Trump 
and his administration take seriously. The Budget supports 
reforms to make these programs work better for the people they 
serve and deliver better value for the investments we make. 
This includes a plan to modernize Medicare Part D to lower drug 
costs for the Medicare program and for Medicare beneficiaries, 
as well as proposals to drive Medicare toward a value-based 
payment system that puts patients in control. The Budget also 
provides additional flexibility to States for their Medicaid 
program, putting Medicaid on a path to fiscal stability by 
restructuring its financing, reducing waste, and focusing the 
program on the low-income populations Medicaid was originally 
intended to serve: the elderly, people with disabilities, 
children, and pregnant women.

    Paying for Value

    The administration is focused on ensuring Federal health 
programs produce better care at the lowest possible cost for 
the American people. We believe that consumers, working with 
providers, are in the best position to determine value. The 
Budget supports an expansion of value-based payments in 
Medicare with this strategy in mind. That expansion, along with 
implementation of a package of other reforms, will improve 
quality, promote competition, reduce the Federal burden on 
providers and patients, and focus payments on value instead of 
volume or site of service. Two of these reforms are: (1) A 
value-based purchasing program for hospital outpatient 
departments and ambulatory surgical centers; and (2) a 
consolidated hospital quality program in Medicare to reduce 
duplicative requirements and create a focus on driving 
improvements in patients' health outcomes. Advancing value in 
Medicare along with the other reforms in the Budget will extend 
the life of the Medicare Trust Fund by eight years, while also 
helping to drive value and innovation throughout America's 
entire health system. Furthermore, in December the 
administration released a report entitled Reforming America's 
Healthcare System Through Choice and Competition, which 
contains a series of recommendations to improve the healthcare 
system by better engaging consumers and unleashing competition 
acrossproviders.

 PROTECT THE HEALTH OF AMERICANS WHERE THEY LIVE, LEARN, WORK, AND PLAY

    Combating the Opioid Crisis

    The administration has made historic investments to address 
opioid misuse, abuse, and overdose, but significant work must 
still be done to fully turn the tide of this public health 
crisis.

    The Budget supports HHS's five-part strategy to:

         Improve access to prevention, treatment, and 
        recovery services, including the full range of 
        medication-assisted treatments;
         Better target the availability of overdose-
        reversing drugs;
         Strengthen our understanding of the crisis 
        through better public health data and reporting;
         Provide support for cutting edge research on 
        pain and addiction; and
         Improve pain management practices.

    The Budget provides $4.8 billion to combat the opioid 
overdose epidemic. The Substance Abuse and Mental Health 
Services Administration (SAMHSA) will continue all opioid 
activities at the same funding level as FY 2019, including the 
successful State Opioid Response Program and grants, which had 
a special focus on increasing access to medication-assisted 
treatment-the gold standard for treating opioid addiction. At 
this level, the Budget also provides new funding for grants to 
accredited medical schools and teaching hospitals to develop 
substance use disorder treatment curricula.
    In FY 2020, the Health Resources and Services 
Administration (HRSA) will continue to make investments to 
address substance use disorder, including opioid use disorder, 
through the Rural Communities Opioid Response Program, the 
National Health Service Corps, behavioral health workforce 
programs, and the Health Centers Program.
    Medicare and Medicaid policies and funding will also play a 
critical role in combating the opioid crisis. The Budget 
proposes allowing States to provide full Medicaid benefits for 
one-year postpartum for pregnant women diagnosed with a 
substance use disorder. The Budget also proposes to set minimum 
standards for Drug Utilization Review programs, allowing for 
better oversight of opioid dispensing in Medicaid. 
Additionally, it proposes a collaboration between the Centers 
for Medicare & Medicaid Services and the Drug Enforcement 
Administration to stop providers from inappropriate opioid 
prescribing.

    The Ending HIV Epidemic Initiative

    Recent advances in HIV prevention and treatment create the 
opportunity to not only control the spread of HIV, but to end 
this epidemic in America. By accelerating proven public health 
strategies, HHS will aim to reduce new infections by 90 percent 
within 10 years, ending the epidemic in America. The Budget 
invests $291 million in FY 2020 for the first phase of this 
initiative, which will target areas with the highest infection 
rates with the goal of reducing the number of new diagnoses by 
75 percent in five years.
    This effort focuses on investing in existing, proven 
activities and strategies and putting new public health 
resources on the ground. The initiative includes a new $140 
million investment in the Centers for Disease Control and 
Prevention (CDC) to test and diagnose new cases, rapidly link 
newly infected individuals to treatment, connect at-risk 
individuals to Pre-exposure prophylaxis (PrEP), expand HIV 
surveillance, and directly support States and localities in the 
fight against HIV.
    Clients receiving medical care through the Ryan White HIV/
AIDS Program (RWHAP) were virally suppressed at a record level 
of 85.9 percent in 2017. The Budget includes $70 million in new 
funds for RWHAP within HRSA to increase direct healthcare and 
support services, further increasing viral suppression among 
patients in the target areas. The Budget includes $50 million 
in HRSA for expanded PrEP services, outreach, and care 
coordination in community health centers. Additionally, the 
Budget also prioritizes the reauthorization of RWHAP to ensure 
Federal funds are allocated to address the changing landscape 
of HIV across the United States.
    For the Indian Health Service (IHS), the Budget includes 
$25 million in new funds to screen for HIV and prevent and 
treat Hepatitis C, a significant burden among persons living 
with HIV/AIDS. The Budget also includes $6 million for the 
National Institutes of Health's regional Centers for AIDS 
Research to refine implementation strategies to assure 
effectiveness of prevention and treatment interventions.
    In addition to this effort, the Budget funds other 
activities that address HIV/AIDS including $54 million for the 
Minority HIV/AIDS Fund within the Office of the Secretary and 
$116 million for the Minority AIDS program in SAMHSA. These 
funds allow HHS to target funding to minority communities and 
individuals disproportionately impacted by HIV infection.

    Prioritizing Biodefense and Preparedness

    The Administration prioritizes the nation's safety, 
including its ability to respond to acts of bioterrorism, 
natural disasters, and emerging infectious diseases. HHS is at 
the forefront of the nation's defense against public health 
threats. The Budget provides approximately $2.7 billion to the 
Public Health and Social Services Emergency Fund within the 
Office of the Secretary to strengthen HHS's biodefense and 
emergency preparedness capacity. The Budget also proposes a new 
transfer authority that will allow HHS to enhance its ability 
to respond more quickly to public health threats. Additionally, 
the Budget supports the government-wide implementation of the 
President's National Biodefense Strategy.
    The Budget supports advanced research and development of 
medical countermeasures against chemical, biological, 
radiological, nuclear, and infectious disease threats, 
including pandemic influenza. The Budget also funds late-stage 
development and procurement of medical countermeasures for the 
Strategic National Stockpile and emergency public health and 
medical assistance to State and local Governments, protecting 
America against threats such as: anthrax, botulism, Ebola, 
chemical, radiological, and nuclear agents.

 STRENGTHEN THE ECONOMIC AND SOCIAL WELL-BEING OF AMERICANS ACROSS THE 
                                LIFESPAN

    Promoting Upward Mobility

    The Budget promotes independence and personal 
responsibility, supporting the proven notion that work empowers 
parents and lifts families out of poverty. To ensure Temporary 
Assistance for Needy Families (TANF) enables participants to 
work, the Budget includes a proposal to ensure States will 
invest in creating opportunities for low-income families, and 
to simplify and improve the work participation rate States must 
meet under TANF. The Budget also proposes to create Opportunity 
and Economic Mobility Demonstrations, allowing States to 
streamline certain welfare programs and tailor them to meet the 
specific needs of their populations.
    The Budget supports Medicaid reforms to empower individuals 
to reach self-sufficiency and financial independence, including 
a proposal to permit States to include asset tests in 
identifying an individual's economic need, allowing more 
targeted determinations than are possible with the use of a 
Modified Adjusted Gross Income standard alone.

    Improving Outcomes in Child Welfare

    The Budget supports implementation of the Family First 
Prevention Services Act of 2018 and includes policies to 
further improve child welfare outcomes and prevent child 
maltreatment. The Budget also expands the Regional Partnership 
Grants program, which addresses the considerable impact of 
substance use, including opioids use, on child welfare.

    Strengthening the Indian Health Service

    Reflecting HHS's commitment to the health and well-being of 
American Indians and Alaska Natives, the Budget provides $5.9 
billion for IHS, which is an additional $392 million above the 
FY 2019 Continuing Resolution. The increase supports direct 
healthcare services across Indian Country, including hospitals 
and health clinics, Purchased/Referred Care, dental health, 
mental health and alcohol and substance abuse services. The 
Budget invests in new programs to improve patient care, 
quality, and oversight. The Budget fully funds staffing for new 
and replacement facilities, new tribes, and Contract Support 
Costs, ensuring tribes have the necessary resources to 
successfully manage self-governance programs.

            FOSTER SOUND, SUSTAINED ADVANCES IN THE SCIENCES

    Promoting Research and Prevention

    NIH is the leading biomedical research agency in the world, 
and its funding supports scientific breakthroughs that save 
lives. The Budget supports strategic investments in biomedical 
research and activities with significant national impact.
    NIH launched the Helping to End Addiction Long-term (HEAL) 
initiative in April 2018 to advance research on pain and 
addiction. Toward this goal, NIH announced funding 
opportunities for the historic HEALing Communities Study, which 
will select several communities to measure the impact of 
investing in the integration of evidence-based prevention, 
treatment, and recovery across multiple health and justice 
settings. The Budget provides $500 million to continue the HEAL 
initiative in FY 2020.
    The Budget supports a targeted investment in the National 
Cancer Institute to accelerate pediatric cancer research. 
Cancer is the leading cause of death from disease among 
children in the United States. Approximately 16,000 children 
are diagnosed with cancer in the United States each year. While 
progress in treating some childhood cancers has been made, the 
science and treatment of childhood cancers remains challenging. 
Through this initiative, NIH will enhance drug discovery, 
better understand the biology of all pediatric cancers, and 
create a national data resource for pediatric cancer research. 
This initiative will develop safer and more effective 
treatments, and provide a path for changing the course of 
cancer in children.
    The new National Institute for Research on Safety and 
Quality (NIRSQ) proposed in the Budget will continue key 
research activities currently led by the Agency for Healthcare 
Research and Quality. These activities will support researchers 
by developing the knowledge, tools, and data needed to improve 
the healthcare system.

    Addressing Emerging Public Health Challenges

    CDC is the nation's leading public health agency, and the 
Budget supports its work putting science into action.
    Approximately 700 women die each year in the United States 
as a result of pregnancy or delivery complications or the 
aggravation of an unrelated condition by the physiologic 
effects of pregnancy. Findings from Maternal Mortality Review 
Committees indicate that more than half of these deaths are 
preventable. The Budget supports data analysis on maternal 
deaths and efforts to identify prevention opportunities.
    The United States must address emerging public health 
threats, both at home and abroad, to protect the health of its 
citizens. The Budget invests $10 million to support CDC's 
response to Acute Flaccid Myelitis (AFM), a rare but serious 
condition that affects the nervous system and weakens muscles 
and reflexes. With this funding, CDC will work closely with 
national experts, healthcare providers, and State and local 
health departments to thoroughly investigate AFM.
    The Budget also provides $100 million for CDC's global 
health security activities. Moving forward, CDC will implement 
a regional hub office model and primarily focus their global 
health security capacity building activities on areas where 
they have seen the most success: lab and diagnostic capacity, 
surveillance systems, training of disease detectives, and 
establishing strong emergency operation centers. In addition, 
CDC will continue on-going efforts to identify health 
emergencies, track dangerous diseases, and rapidly respond to 
outbreaks and other public health threats around the world, 
including continuing work on Ebola response.
    The Budget also strengthens the health security of our 
nation by continuing CDC's support to State and local 
Government partners in implementing programs, establishing 
guidelines, and conducting research to tackle public health 
challenges and build preparedness.

    Innovations in the Food and Drug Administration

    FDA plays a major role in protecting public health by 
assuring the safety of the nation's food supply and regulating 
medical products and tobacco. The Budget provides $6.1 billion 
for FDA, which is an additional $643 million above the FY 2019 
Continuing Resolution. The Budget includes resources to promote 
competition and foster innovation, such as modernizing generic 
drug review and creating a new medical data enterprise. The 
Budget advances digital health technology to reduce the time 
and cost of market entry, supports FDA opioid activities at 
international mail facilities to increase inspections of 
suspicious packages, strengthens the outsourcing facility 
sector to ensure quality compounded drugs, and pilots a 
pathogen inactivation technology to ensure the blood supply 
continues to be safe. FDA will continue to modernize the food 
safety system in FY 2020.

       PROMOTE EFFECTIVE AND EFFICIENT MANAGEMENT AND STEWARDSHIP

    Almost one quarter of total Federal outlays are made by 
HHS. The Department employs more than 78,000 permanent and 
temporary employees and administers more grant dollars than all 
other Federal agencies combined. Efficiencies in HHS management 
have a tremendous impact on Federal spending as a whole.

    Advancing Fiscal Stewardship

    HHS recognizes its immense responsibility to manage 
taxpayer dollars wisely. HHS ensures the integrity of all its 
financial transactions by leveraging financial management 
expertise, implementing strong business processes, and 
effectively managing risk.
    In an effort to operate Medicare and Medicaid efficiently 
and effectively, both to rein in wasteful spending and to 
better serve beneficiaries, HHS is implementing actions such as 
enhanced provider screening, prior authorization, and 
sophisticated predictive analytics technology, to reduce 
improper payments in Medicare and Medicaid without increasing 
burden on providers or delaying Americans' access to care or to 
critical medications. HHS continues to work with law 
enforcement partners to target fraud and abuse in healthcare, 
and the Budget increases investment in healthcare fraud and 
abuse activities. The Budget includes a series of proposals to 
strengthen Medicare and Medicaid oversight, including 
increasing prior authorization, enhancing Part D plans' ability 
to address fraud, and strengthening the Department's ability to 
recoup overpayments made to States on behalf of ineligible 
Medicaid beneficiaries.

    Implementing ReImagine HHS

    HHS eagerly took up the call in the Administration's 
government-wide Reform Plan to more efficiently and effectively 
serve the American people. HHS developed a plan --``ReImagine 
HHS''--organized around a number of initiatives.
    ReImagine HHS is identifying a variety of ways to reduce 
Federal spending and improve the functioning of HHS's programs 
through more efficient operations. For example, the Buy Smarter 
initiative streamlines HHS's procurement process by using new 
and emerging technologies.

    Conclusion

    Americans deserve healthcare, human services, and public 
health programs that work for them and make good use of 
taxpayer dollars. The men and women of HHS are committed, 
innovative, hardworking public servants who work each day to 
improve the lives of all Americans. President Trump's FY 2020 
Budget will help advance us toward that goal, accomplish the 
Department's vital mission, and put Americans' health first.

    Ms. Eshoo. Thank you, Mr. Secretary.
    We will now move to Member questions. Each Member, of 
course, will have 5 minutes to question the Secretary. And I 
will start by recognizing myself for 5 minutes.
    Mr. Secretary, the budget proposes to cut funding for 
premium tax credits which help Americans pay for comprehensive 
health insurance, but your agency's 1332 waiver guidance 
supports using Federal subsidies to pay for junk insurance 
plans that don't cover patients when they get sick. The budget 
also once again revives the failed Graham-Cassidy ACA repeal 
bill, and the Trump administration has refused to defend, 
obviously, the ACA in the Texas v. U.S. litigation, urging the 
court to invalidate the entirety of the ACA's major protections 
for people with preexisting conditions.
    Now, really, I call these items out because they scare the 
hell out of the American people. These policies have 
consequences. These words walk into people's lives.
    So where in your budget are those with preexisting 
conditions protected as well or better than they are protected 
under the ACA?
    Mr. Azar. Well, thank you, Chairwoman, for that question.
    Ms. Eshoo. Not really ``thank you,'' but----
    [Laughter.]
    Mr. Azar. No, that is a good question to have. It is a good 
question to have.
    Ms. Eshoo. You are a gentleman.
    Mr. Azar. And we need to have a debate about this because 
the position of many is that the Affordable Care Act solved all 
issues for people with preexisting conditions, and that is 
simply not the case, as 29 million Americans were priced out of 
the market with unaffordable care, and those who have access to 
that care, it may be under-insurance or a card that doesn't 
really provide for them.
    Ms. Eshoo. So will you work with us to strengthen that?
    Mr. Azar. Well, we want to work--actually, that is our 
proposal. It is a starting point.
    Ms. Eshoo. On preexisting conditions?
    Mr. Azar. It is the $1.2 trillion grant program.
    Ms. Eshoo. We will hold you to that.
    Now, on the actual numbers, $1.4 trillion over 10 years for 
Medicaid, close to $460 billion from Medicare. How do you 
reassure the American people that what they count on, what is 
really necessary in their lives, Medicare beneficiaries, 
Medicaid beneficiaries, that these numbers, what these numbers 
are going to do to them? These are massive cuts.
    Mr. Azar. So on Medicare, we are actually putting it on a 
sounder footing for the future, and these are provider cuts. 
Providers aren't going to be happy. Hospitals are not happy. 
The post-acute providers are not happy, and the drug companies 
are not happy.
    Ms. Eshoo. Well, how does that affect the beneficiaries?
    Mr. Azar. It actually reduces their cost-sharing because 
they actually pay a percent often of what we reimburse these 
providers. So as we end that abuse or minimize that abuse, 
their sharing goes down and we save taxpayers money.
    Ms. Eshoo. But why wouldn't providers lessen their coverage 
to the people that are enrolled with them, if you are going to 
take almost $460 billion out of it?
    Mr. Azar. Well, some of these are----
    Ms. Eshoo. Are we going to depend on the goodness of their 
hearts?
    Mr. Azar. Well, a lot of them need to be in Medicare. Your 
hospital is not going to be in existence long if it is not a 
Medicare provider. What is happening is, for instance, 
hospitals are gobbling up doctors' practices----
    Ms. Eshoo. Well, what about the patients----
    Mr. Azar [continuing]. And jacking up the rates.
    Ms.Eshoo [continuing]. The coverage for Medicare enrollees?
    Mr. Azar. I do not believe any of those three which are the 
major areas of reduction will impact in any way patient access 
to services there. I think these areas, like MedPAC----
    Ms. Eshoo. So you are stating that almost $460 billion, 
reducing that out of Medicare is not going to affect any 
beneficiary?
    Mr. Azar. I don't believe it should affect. I think it 
should reduce their out-of-pocket through their cost-sharing. 
These are abuses that MedPAC and others----
    Ms. Eshoo. I want to go back to the junk plans. They are 
receiving Federal subsidies, and they are required to disclose 
to an individual that the plan will not cover their medical 
bills when they get sick. How does this strengthen coverage for 
people across the country?
    Mr. Azar. So short-term, limited-duration plans are meant 
for people in a transition period. They are not right for 
everybody. And we actually enhanced the consumer disclosures 
from what the Obama administration had on them.
    Mr. Azar. So we are going to enhance disclosure? I am all 
for that. In fact, I offered legislation that would state to 
people on the cover of the policy, ``Be advised you are not 
covered for the following.'' So I think it needs a ``beware'' 
stamp on it.
    But my time has expired, and I will now recognize--who am I 
recognizing now?--the ranking member of the subcommittee, Dr. 
Burgess, for 5 minutes.
    Mr. Burgess. Thank you for the recognition.
    Mr. Secretary, again, thank you for being here today.
    Sometimes I feel like I am trapped in a Charles Dickens 
novel. It is the best of times; it is the worst of times.
    So just briefly, can you kind of give us a sense of what it 
has meant for 2.5 to 5 million people to have been brought back 
into the workforce, and now, perhaps have the availability of 
employer-sponsored insurance?
    Mr. Azar. With the booming economy and with the historic 
low unemployment rates, we have got individuals who now are not 
only having the pride and the long-term sustainability of job 
but have access to healthcare through their employers. But, of 
course, we have our safety nets. We have our programs like 
Medicaid. We have, as long as it is on the books, we have the 
Affordable Care Act and the subsidy program there. But what we 
are trying to do is expand the reach of available options and 
affordable insurance and coverage and access to care for the 
people who were shut out from that marketplace.
    Mr. Burgess. And I appreciate what you are trying to do. I 
actually have a question I will do for the record on just that 
issue.
    This past Sunday night, ``60 Minutes,'' a television 
program that I don't normally watch, aired a special on the 
research that the National Institute of Health has conducted on 
sickle cell disease. I worked with patients with sickle cell 
disease back in my residency at Parkland Hospital. I know what 
a devastating and painful illness that it is.
    We heard in this committee two Congresses ago how there had 
not been a new FDA-approved treatment for sickle cell in almost 
40 years. In the last Congress, we approved, and got signed 
into law, the first major sickle cell legislation, Danny Davis' 
bill from Illinois, and the President signed it into law.
    Can you talk just a little bit about what the American 
people saw on Sunday night as far as the potential treatment 
for sickle cell?
    Mr. Azar. What an incredible story that was. And I have 
talked to Francis Collins, our incredible Director of the NIH. 
I think we all believe we could be within five years of an 
actual cure for sickle cell anemia, an actual cure. And it is 
using the modern techniques we have of both identifying the 
defective genes that cause the disease, but then different 
vectors, whether it is CRISPR or, in the case of the sickle 
cell treatment you saw on ``60 Minutes,'' using a viral vector 
to actually just change the body's wiring. I mean, to see that 
young girl and the impact it has had on her life, it is a 
miracle and we are all so excited about that. We want to keep 
doing that across the work of NIH.
    Mr. Burgess. Well, again, for somebody who has taken care 
of sickle patients in crisis, we haven't had much to offer, and 
this is, indeed, groundbreaking research. You and your team are 
to be commended, and the administration, for putting their 
efforts behind this.
    So as you know, I have, since the passage of a bill that 
got rid of the sustainable growth rate formula--we used to 
fight about that every December; now we don't. And I believe 
this committee is still committed to the development of 
alternative payment models.
    The physician-led technical advisory panel of PTAC--I think 
they had a meeting this week--they have recommended over a 
dozen models, and physicians are just clamoring to join. I 
understand there is concern over the scalability of some of 
these models, but can we agree that this is a sign, a good 
sign, that APM providers want to participate and want to take 
place?
    Mr. Azar. Absolutely. And, in fact, I know there have been 
some rough spots in the interactions with the PTAC and HHS. We 
have met with leadership and the whole committee. We have 
shared, actually, the alignment of our philosophies around 
where we want to go on value-based transformation. I think we 
are going to see that the projects that they review will help 
align there. We have emphasized how important it is that these 
projects be scalable across the program. So I am actually quite 
optimistic about our work with PTAC. It is an incredible group 
of people on that committee, and we want to make sure we are 
getting the full advantage of their work and insight.
    Mr. Burgess. And would you agree that that was particularly 
visionary legislation that was passed by this Congress?
    Mr. Azar. Absolutely.
    Mr. Burgess. Thank you. I knew I could count on you.
    Well, thanks for your comments about Dr. Gottlieb. Again, 
what a leader he has been. And I appreciate your sharing with 
us that the agency is going to remain under capable hands. It 
is just so critically important. The generic throughput that 
has occurred under Dr. Gottlieb's leadership is going to make a 
big difference for patients and their pocketbooks. And your 
commitment is to continue that?
    Mr. Azar. Oh, absolutely, we are going to be carrying 
forward Commissioner Gottlieb's vision without him. His agenda 
is my agenda; my agenda is his agenda.
    Mr. Burgess. Very good. Again, we appreciate you being here 
today. Thank you.
    Ms. Eshoo. I thank the gentleman. I now would like to 
recognize the chairman of the full committee, Mr. Pallone, for 
5 minutes of questioning.
    Mr. Pallone. Thank you, Madam Chair.
    Mr. Secretary, on June 7th of last year, the administration 
declined to defend the ACA's protections for preexisting 
conditions. In this extraordinary decision, the Department of 
Justice sided with a group of Republican attorneys generals 
seeking to strike down the ACA and declined to defend the 
constitutionality of the guaranteed issue and community rating 
provisions of the ACA. And let me be crystal clear. In 
declining to defend these protections in the Texas v. U.S. 
lawsuit, the Trump administration is seeking to, once again, 
subject tens of millions of Americans with preexisting 
conditions to the discrimination they faced before the ACA, and 
I think it is appalling and indefensible.
    Now my questions are about documents. So I just want you to 
answer these questions yes or no about documents. That is what 
I am asking, not about policy here.
    On June 13, 2018, I sent you a letter regarding the 
Department of Health and Human Services' involvement in the 
DOJ's decision and requesting documents, communications, and 
responses to a series of questions. I was trying to find out 
whether the Department had conducted any analysis on the 
effects of eliminating these protections on costs and access to 
coverage, particularly for individuals with preexisting 
conditions. And I asked about the Department's contingency 
planning if the Trump administration prevails in this Texas 
lawsuit. And yes or no, did you receive this letter I am 
referring to?
    Mr. Azar. I am sure we did. I don't recall the letter, but 
I am sure we did.
    Mr. Pallone. Thank you.
    On December 7, 2018, a few months later, I sent you and 
Administrator Verma a follow-up letter reiterating my request. 
I requested a complete response to my letter, to my previous 
letter. Again, yes or no, did you receive this letter, to your 
knowledge?
    Mr. Azar. Again, I am certain that we did.
    Mr. Pallone. OK. So Secretary, my staff subsequently 
reached out to your staff on December 21st, January 2nd, 
January 11th, January 3rd, February 24th, February 26th, 
February 28th, March 3rd, March 7th, March 8th, up to now, and 
yesterday, to check on the status of the Department's document 
production. On each of those occasions, my staff has made clear 
that this inquiry regarding the Department's involvement in the 
Texas lawsuit is the No. 1 investigative priority for our 
committee, for our oversight. And it has been over nine months, 
and I still haven't received a response to my letter or a 
single document. So my question is, has the Department even 
begun a search of your records, and the records of others on 
your staff, in response to these letters, which, again, is how 
you responded to whether the DOJ is moving forward?
    Mr. Azar. So I apologize for the delay. I do want you to 
know that I met with our team, I think it was, in fact, just 
yesterday, and discussed our compliance with your requests 
there. And I hope they have communicated to Chairwoman 
DeGette's team. I believe they did yesterday or this morning. 
We are going to try to get as much of that material over as 
quickly as possible as we can around contingency planning and 
analysis.
    Mr. Pallone. Well, would you commit to providing those 
documents to this committee by the end of the week?
    Mr. Azar. I don't know about the date on it, but we have 
already met with, we have talked to the staff, I was told, and 
I was told the staff were happy with the discussion and will be 
producing that on a rolling basis of reviewing the material.
    Mr. Pallone. Well, look, let me----
    Mr. Azar. I have told them I want to give you as much as we 
can on that.
    Mr. Pallone. Let me explain. I am not asking about the CMS 
records, although those can be sent as well. I am asking about 
your own records. Will you commit to making your records 
available to search and ensure that the Department turns such 
records responsive over to the committee? I am not talking 
about CMS, but correspondence between--your own records, if you 
will, relative to this Texas----
    Mr. Azar. Well, obviously, materials that would involve 
potential executive privilege would have to be reviewed by 
interagency and the White House for review of that. But I have 
told my team I want to get whatever we can that doesn't 
implicate those types of concerns that we would have to work 
together on respective and reasonable accommodations; I want to 
get you materials that we can as quickly as possible.
    Mr. Pallone. I just want a commitment to make your records 
available to ensure that the Department turns these documents 
over to the committee as soon as possible.
    Mr. Azar. We will commit to be as responsive as we can, but 
I, obviously, can't waive various privileges of the President, 
if they are implicated.
    Mr. Pallone. OK. Now I just have one more question, Madam 
Chair.
    I am just concerned--again, I have explained. Nine months, 
no documents, no response. I just hope that this level of non-
cooperation doesn't continue moving forward with this Congress 
on these committees' informational requests. Because if not, we 
have to see what additional steps to ensure that the committee 
actually has legitimate oversight. So I mean, do you want to 
just respond? This level of cooperation is really not 
acceptable. Is this going to continue where we don't get 
anything or any response for nine months?
    Mr. Azar. I want you to know, I respect your role and this 
committee's role, and we have beefed up our oversight staffing. 
We have tried to build the teams, and we will hope to have a 
better relationship in the future going forward on any 
oversight issues.
    Mr. Pallone. All right.
    Mr. Azar. We want to have a good, constructive, productive 
relationship with you and this committee.
    Mr. Pallone. Well, I appreciate that, and I hope so. And we 
will continue to monitor it.
    Thank you, Madam Chair.
    Ms. Eshoo. Thank you, Mr. Chairman.
    And we will just count on you getting the information to 
us.
    And now, I would like to recognize the ranking member of 
the full committee, my friend, Mr. Walden, for 5 minutes.
    Mr. Walden. Thank you, Madam Chair. And again, thanks for 
holding this important hearing.
    Secretary Azar, I understand that 2018 marked the highest 
number of combined generic drug approvals and tentative 
approvals in the history of the Food and Drug Administration's 
Generic Drug Program. Can you just briefly speak to the savings 
that created for the American people?
    Mr. Azar. Well, this is thanks to the historic work of 
Commissioner Gottlieb and the team at FDA. It has just been 
incredible. They have shattered monthly and yearly generic drug 
approval records since 2017, approving generics that CEA has 
estimated have saved Americans since January of 2017 $26 
billion.
    Mr. Walden. Twenty-six billion dollars?
    Mr. Azar. And I believe that is only through June of 2018 
on that analysis. So that is on a rolling--that is going to 
keep on adding savings to the American people.
    Mr. Walden. That is really impressive. And I think part of 
that is the new tools that this committee and this Congress, in 
a bipartisan way, gave to your agency and certainly the FDA.
    By the way, I would just say I am really saddened that Dr. 
Gottlieb is leaving. I wish him godspeed and good health and 
every success in the world. He has been a fantastic FDA 
Director, and, frankly, Madam Chair, very cooperative, I think 
on both sides of aisle. I think he was up here four days in a 
row once testifying and participating. Sorry, but it was really 
helpful to our cause.
    Mr. Secretary, CMS has proposed a rule to change the 
formularies for patients in Part D protected classes. What 
assurances can you provide my constituents and those patients 
that they will still be able to get access to the medications 
they need?
    Mr. Azar. Yes, thank you for that question, because there 
is a lot of misunderstanding there.
    Of course, with the protected classes, what is happening 
is, we have, as a government, disabled these middlemen, the 
pharmacy benefit managers, from being able to negotiate against 
the drug companies to get discounts. So for the very drugs that 
in the commercial space may be yielding 30 percent average 
discounts, we are getting zero to six percent.
    So what we are proposing--and it is a proposal, and we are 
getting very important feedback from disease groups in, and we 
will look at that.
    Mr. Walden. Right.
     Secretary Azar. It is to allow some of the basic formulary 
management tools used in the commercial space for regular 
commercial employees. For instance, step therapy, try this drug 
before that drug.
    Mr. Walden. Right.
    Mr. Azar. Or prior authorization, make sure that this drug 
is actually being used for the right indication, with our 
speedy appeals and exceptions processes, and with the choice 
that is embedded into Part D, where you can pick a plan; if it 
is not meeting your needs, you can choose a different one.
    But we are hearing the feedback, and we have heard very 
vigorously back.
    Mr. Walden. Yes.
    Mr. Azar. We want to protect our beneficiaries, of course.
    Mr. Walden. Because I have heard from some patients today, 
before this becomes a rule, on step therapy, that they have a 
drug that works. They change plans or something. Something 
happens, and they are told they have to go back through all 
these drugs they know don't work to get to the one that does. 
And no patient wants to go through that. And so it is something 
we have got to pay attention to.
    Mr. Azar. I have heard that feedback, and obviously, we 
will take that very seriously.
    Mr. Walden. Yes, I think that is really, really important.
    Mr. Secretary, currently, over one-third of beneficiaries 
are choosing a Medicare Advantage Plan. And I know how 
important that is to Medicare beneficiaries, especially my 
colleague here to the left who has become one now. Can you 
detail why seniors are increasingly choosing private insurance 
options for their Medicare coverage?
    Mr. Azar. Well, you know, the Medicare Advantage Plans have 
become so popular. I think it is because so many of us as we 
age into Medicare--forgive me----
    Mr. Walden. Right.
    Mr. Azar [continuing]. We are used to having an integrated 
benefit package. We are used to having medical and drug 
benefits all together rather than those being managed 
separately. And so, it is a very convenient form, and it allows 
us, also, with Medicare Advantage, we can add supplemental 
benefits. The plans, we have actually authorized new 
supplemental benefits that these MA plans can offer people.
    Mr. Walden. And what would those look like, just quickly?
    Mr. Azar. Oh, that could be lower cost-sharing. I mean, you 
have Medicare Advantage Plans, for instance, that have zero-
dollar generic drug coverage in them. I mean, some of them are 
just incredible, the opportunities they offer people.
    Mr. Walden. So under H.R. 1384, known as Medicare for All, 
my understanding is private health insurance would be 
eliminated. So the 158 million Americans who get their health 
insurance through employer or union would lose those policies, 
but also--and something that has not been written much about--
my understanding is the Medicare for All Democrats' plan would 
also eliminate Medicare Advantage Plans. What would happen to 
those 20 million seniors?
    Mr. Azar. I believe that is the case under at least that 
plan. They would lose their Medicare Advantage Plan, and they 
would have to go to what is called Medicare Fee-for-Service, 
which has very high deductibles, very high cost-sharing. Now, 
for the wealthier people, you can buy a very expensive Medigap 
policy to cover some of that. I do not recall if that 
particular Medicare for All plan outlaws those Medigap plans or 
not. Being private insurance, it might. I am not sure.
    Mr. Walden. So seniors would lose their Medicare Advantage 
Plans under that legislation?
    Mr. Azar. I believe that to be the case. They are private 
plans.
    Mr. Walden. All right. Thank you, Madam Chair. My time has 
expired. I yield back.
    Ms. Eshoo. I thank the gentleman. I now would like to 
recognize a real gentleman, Mr. Butterfield, for 5 minutes.
    Mr. Butterfield. Thank you. I was about to say, Madam 
Chairman, Mr. Engel has stepped out for a few minutes. But 
thank you for----
    Ms. Eshoo. To your advantage.
    Mr. Butterfield. Thank you for the compliment.
    And thank you, Mr. Secretary, for your testimony here 
today.
    I started reading the President's budget very early this 
morning. It is not a very thick budget as compared to other 
Presidential budgets. But I started reading it this morning, 
and this is the first section that I went to. It appears to me 
that the President's budget would rip some $1.4-1.5 trillion 
out of Medicaid by turning it into a block grant or a per-
capita program.
    And, Madam Chair, if that weren't bad enough, the news 
organizations this morning are reporting that the 
administration has plans to bypass Congress entirely and issue 
guidance that will allow States to block grant or cap Medicaid. 
Now if you think the emergency declaration Executive Order that 
the President announced a few weeks ago to bypass Congress has 
created a firestorm, you just wait for the firestorm that this 
will create.
    One in five Americans, low-income Americans, depend on 
Medicaid. The President's budget doesn't represent the values 
of the American people. And so, this Medicaid play was one of 
the main features of the Republicans' failed attempt to repeal 
the ACA. Block-granting and capping Medicaid would endanger 
access to care for some of the most vulnerable people in the 
program, including children, children with complex medical 
needs, and our seniors, and individuals with disabilities.
    In September 2017, Avalere Health, a well-known consulting 
firm, found that the Republican block grant proposal would cut 
Federal spending on Medicaid by $4 trillion over the new two 
decades.
    Mr. Secretary, Congress has already rejected attempts to 
block grant Medicaid. So it is deeply troubling to see this 
administration double down. I will remind you, sir, that under 
Federal law, you only have the authority to allow demonstration 
projects. You know it and I know it. You only have the 
authority to allow demonstration projects that are likely to 
assist in promoting the objectives of the Medicaid program.
    And so, I am asking you, sir, on the record today, do you 
believe, does the administration believe that you have the 
authority to block grant Medicaid on your own without the 
participation of Congress?
    Mr. Azar. So States are able to propose waivers or 
demonstration projects, as you have described them, to reorient 
their benefits. And any State could come in requesting, for 
instance, an approach that might be what you describe as a 
block grant or capitated amount or different payment 
structures. If we get that kind of proposal, we have to assess 
that with our legal counsel and with OMB to----
    Mr. Butterfield. It appears you are going to be aggressive 
with this, aggressive with block-granting Medicaid and rolling 
it out.
    Mr. Azar. Absent statute, we can't force a State to do 
anything like that in Medicaid. That would have to be a 
governor and legislature coming to us, asking us if that is 
something that----
    Mr. Butterfield. Let me put it to you this way: can you 
guarantee this committee that capping Medicaid spending through 
a block grant will not cause any individuals to lose their 
health coverage or lose their benefits, or lose access to their 
doctors or jeopardize their care? Can you make that commitment 
to us?
    Mr. Azar. Well, you couldn't make that commitment about any 
type of waiver or demonstration in Medicaid because that is 
precisely the types of changes that are made----
    Mr. Butterfield. So it is conceivable? If a State came and 
asked for a waiver, it is conceivable that some of the 
beneficiaries could experience less care?
    Mr. Azar. That would be, that could be the case with any 
waiver that is already out there. We operate, my goodness, it 
must be hundreds of waivers already. And each of those has an 
impact that is redistributive among this beneficiary or that, 
or this class. It is ways of States prioritizing and focusing 
the benefits and the money that they have----
    Mr. Butterfield. I see the direction that you are going 
with this, and I don't like it. But you answer to the 
President, and the President has a notion of taking Medicaid in 
the wrong direction.
    The cap of Medicaid that the administration is proposing 
will only grow at the rate of inflation. That is what I am 
being told. Do you believe that the rate of inflation will keep 
pace with the rising cost of healthcare? Are they going to go 
up equally, do you believe?
    Mr. Azar. I think that is in the legislative proposal, 
which, of course, Congress would have to agree to. You would 
have to agree to that. And if that were the case, no, that 
would be regular CPI I believe is in the budget. I don't 
believe it is a CPI medical expense. And that is part of the 
savings that come from the ongoing--I think it is $300-and-some 
billion that would be part of the ongoing savings from those 
types of changes to per-capital or block grant options in this 
case.
    Mr. Butterfield. Thank you, Mr. Secretary. I only have 14 
seconds remaining. And I will say, as I close, that if this 
administration is serious about block-granting or otherwise 
readjusting and redefining Medicaid as we know it, we are going 
to be in for a real serious firestorm, not just from the 
Congress, but from the American people. So many people, low-
income folk, depend on Medicaid.
    Thank you, Madam Chair. I yield back.
    Ms. Eshoo. I thank the gentleman. I now would like to 
recognize the former chairman of the full committee, Mr. Upton 
of Michigan.
    Mr. Upton. Well, thank you, Madam Chair.
    And welcome, Mr. Secretary, back. We are pleased that you 
are here.
    And I wonder, as you know and you watch very carefully, 
every member of this committee supported 21st Century Cures a 
couple of years ago. Could you briefly give us an update as to 
how you think things are going three years now since President 
Obama signed it into law? Because I have a number of questions.
    Mr. Azar. Let me just be short about it. I believe it is 
directly attributable, and credit to you and this committee for 
the Cures Act, that we have had the record number of new drug 
approvals and the record number of generic drug approvals in 
our system that are leading to such significant savings for the 
system, for the American people, and frankly, leading to the 
type of cures like what I hope we are going to see on sickle 
cell, that the ranking member mentioned before.
    Mr. Upton. That is good. And I missed that show on ``60 
Minutes,'' but I am well aware of the progress that we are 
making on that and other fronts as well.
    Somewhat good news and bad news, it is my understanding 
that the childhood cancer funds in NCI, you have a nice 
increase for that in the proposal. But I must say that I was 
alarmed to read a Politico story just in the last couple of 
days that said, under the plan, the budget plan, the White 
House proposes an $897 million cut to the NCI, plus more than a 
billion dollars to institutes that do medical research. Is that 
story accurate?
    Mr. Azar. Well, it is. That is in the budget as the across-
the-board reduction to NIH. We are one of the biggest, if not 
the biggest, non-Defense discretionary budgets. We take a 12 
percent cut in the President's budget. At HHS, that is $12 
billion. It is a proportionate cut at NIH that is proposed. I 
understand the pain. I understand the concern there. And the 
NCI cut would be proportionate to the NIH one. I believe it is 
a 12 percent there also.
    Mr. Upton. One of the things that we did in Cures was that, 
when we saw increases, particularly in the NIH budget and FDA 
budget, we actually came up with offsets to make sure that 
those increases would come about. Are those offsets still in 
place? I mean, are these reductions----
    Mr. Azar. So we tried to prioritize certain funding within 
NIH around the opioid funding; of course, the Pediatric Cancer 
Initiative of the $500-million-over-10 package. And so, yes, 
there are certain priority areas that we have tried to wall off 
within that, but, overall, the budget does take that kind of 
proportional charge because, otherwise, there is just not 
enough money at HHS to go around to make that kind of a target.
    Mr. Upton. Now a number of us from the House and the Senate 
this last week participated in a pretty big opioid conference. 
What is the level of funding, as we try to help the States deal 
with this crisis that is impacting virtually every community 
and so many families that we personally know?
    Mr. Azar. The President keeps the opioid funding that this 
Congress has prioritized last year and that we worked together 
on. We are going to continue to strengthen our access to 
treatment and recovery. So that is $2.9 billion. That is an 
increase of 68 above what our FY19 allotment was across the 
Department. That is your State Opioid Response Grants, for 
instance, of $1.5 billion.
    Mr. Upton. We started that in Cures.
    Mr. Azar. And the STR, and that expanded with the State 
opioid responses in last year's appropriation. Fifty-eight 
million dollars for infectious disease and opioids, a critical 
part, also, in our HIV and Hep C work, the spread of those 
diseases caused through the opioid crisis; prioritizing 
surveillance activities. So really, a continuation of the great 
bipartisan work of Congress and the administration on the 
opioid crisis from last year is what is presented in the budget 
this year. I could give you details offline, if that is 
helpful.
    Mr. Upton. So the last question I have is, last week, a 
letter was sent up to reprogram monies for the Office of 
Refugee Resettlement. They found offsets for that increase. And 
I am interested to know, what is the fiscal year '20 budget 
request compared to the fiscal year '19 request? And is there a 
chance, then, that you will ask for additional monies to be 
reprogrammed again, following what happened last week for 
fiscal year '19?
    Mr. Azar. Thank you for that.
    So in FY19, I believe the budget request was $1 billion 
plus a $200 million contingency fund. And then, the 
appropriators also put some money into the regular non-UAC 
refugee program, knowing that usually doesn't spend that much 
money.
    For this budget request, what we have requested is actually 
$1.3 billion as an appropriation, and then, to create a $2 
billion mandatory fund that is a contingency fund with an 
assumption of $700- or-so million used in this year, plus 
transfer authority of up to 20 percent, which would be $361 
million. So we have requested quite a lot, but at the rate that 
we are going with the kids coming across the border, it is just 
an incredible burden financially.
    Mr. Upton. Thank you. My time has expired. Thank you, Mr. 
Secretary.
    Ms. Eshoo. We thank the gentleman. Now I have the pleasure 
of recognizing the gentlewoman from California, Ms. Matsui, for 
5 minutes.
    Ms. Matsui. Thank you, Madam Chair.
    And thank you, Mr. Secretary, for appearing before us 
today.
    I have to say I am extremely concerned by the priorities 
reflected in the President's budget, because this proposal 
directly and negatively impacts hardworking families who depend 
on crucial services. It guts Medicaid by over a trillion 
dollars. These cuts mean working single mothers in between 
jobs, families with a family member who suffers from addiction, 
and grandparents in long-term care facilities will have less 
access to care.
    I am disappointed that HHS, which has a mission to enhance 
and protect the health and well-being of all Americans, has 
presented a budget that targets the most vulnerable in our 
communities--women, children, people with disabilities and 
mental illness, and the LGBT community. I certainly hope that 
in our conversation today we can address the failings in HHS's 
budget vision and how the agency should, in fact, be working to 
protect all Americans.
    Now, Mr. Azar, you previously stated that one of your top 
goals as Secretary is to address the opioids crisis, and this 
committee shares that goal. Passing H.R. 6, the SUPPORT for 
Patients and Communities Act, was a highlight of last Congress. 
And I was pleased to see members of this committee and your 
administration begin to take meaningful steps toward tackling 
the opioid epidemic.
    Yet, I am concerned that your proposed budget, while it 
does include funding and investments for the Community Mental 
Health Services Block Grant and for Certified Community 
Behavioral Health Centers, it is accompanied by massive cuts to 
Medicaid, which is a vital source of coverage for mental health 
and substance use disorder treatment.
    The President's 2020 budget proposes to cut Medicaid by 
$1.5 trillion over 10 years and turning the vital program into 
a block grant to the States. Yet, shoring up Medicaid and 
strengthening that program is perhaps the single best thing we 
can do to expand access to mental health and substance use 
treatment services.
    As I am sure you know, Medicaid is the single most 
important financing source of mental health services in this 
country. Medicaid covers approximately a quarter of all adults 
with serious mental illness. The Medicaid program covers many 
inpatient and outpatient mental health services, such as 
psychiatric treatment, counseling, and prescription 
medications. And Medicaid coverage of mental health services is 
often more comprehensive than private insurance coverage. 
Medicaid also covers 4 in 10 non-elderly adults with opioid 
addiction, and those with Medicaid coverage are twice as likely 
as those with private insurance or no insurance to receive 
substance use treatment.
    Your rhetoric on mental health and addiction is not matched 
by your actions. Cutting the very insurance coverage that 
treats these people for ideological reasons, the coverage that 
provides critical mental health services and substance use 
treatment, will not help us address these critical issues.
    Secretary Azar, do you agree that Medicaid is a critical 
tool in helping individuals with mental health conditions or 
substance use disorders? I just want a yes or no.
    Mr. Azar. Yes, we do believe Medicaid is important for 
those individuals.
    Ms. Matsui. OK. Secretary Azar, will you commit to not 
taking any further action in this administration, as your 
predecessor and CMS Administrator already have, that would 
negatively impact the coverage that people with mental health 
or substance use disorders rely upon?
    Mr. Azar. Well, we actually, with our budget, are proposing 
changes that I think refocuses on the key core populations of 
Medicaid as opposed to just providing insurance to able-bodied 
potentially-working adults. So I actually think the budget lets 
us focus on these people with substance use disorder and mental 
illness, the disabled, those that really need it, instead the 
perverse incentives that we have got right now.
    Ms. Matsui. Well, I don't agree with you there. I also 
believe, too, that it is very difficult to get mental health 
services, and the population that needs them are certainly ones 
that don't game the system. They really are people who really 
need the services. And mental health and substance use services 
are so critical, and Medicaid is the means by which most of the 
population receives these services.
    Mr. Azar. If I could just point you to one thing in the 
budget that I hope you will support. It is we propose extending 
Medicaid for postpartum pregnant women for up to one year who 
have suffered from substance use disorder. So I do hope we 
could advance that.
    Ms. Matsui. That is really wonderful, but I am still 
talking about the vast population that needs the Medicaid 
services for mental health services.
    And let me just say this: that I want to reiterate the 
concerns of Ranking Member Walden regarding the protected 
classes. I have gotten many of my constituents coming forward 
and saying that they are really very concerned regarding the 
step therapy. They have medication that they already know 
works, and to think that they have to go back again and go 
through the steps, that would really bring them back to a place 
they don't want to be.
    And I have run out of time already. So I just want to make 
that point. Thank you.
    Ms. Eshoo. You yield back. I thank the gentlewoman.
    I think the issue that Ms. Matsui just mentioned, and Mr. 
Walden, and I think both sides hold the same view. So we need 
to move forward and correct that situation.
    I now would like to recognize my friend from Illinois, the 
gentleman from Illinois, Mr. Shimkus, for 5 minutes.
    Mr. Shimkus. Thank you, Chairman Eshoo.
    Secretary Azar, thanks for being here.
    Chairman Eshoo and I cosponsored a bill last Congress 
called the REVAMP Act. We have worked to address antibiotic 
drug resistance for over a decade with colleagues on both sides 
of the aisle. We have secured some wins, not the least of which 
is the GAIN Act.
    Mr. Secretary, can you tell me what your administration is 
doing to address this concern?
    Mr. Azar. Yes. So we actually announced what we called the 
AMR Challenge in September of last year at the United Nations 
General Assembly, which is a CDC Foundation initiative where we 
received commitments from, I think, over a hundred NGOs and 
private sector entities to commit around appropriate 
utilization.
    I am focused right now around AMR on what I view as a 
potential market failure issue there on antimicrobial 
resistance developing next-generation antibiotics, because here 
is the problem we have: we want new antibiotics, but, for AMR 
purposes, we need them not to be used. So that it almost 
presents a project bioshield-like scenario where we, as the 
Government, need to actually think about our role there as a 
purchaser to get developed and park antibiotics that are 
needed. That is the issue.
    Mr. Shimkus. I appreciate the way you finished up that, 
because what we always hear quite a bit is: how do you 
incentivize the private sector to produce a product that you 
hope they don't use? And that is kind of what we have been 
trying to deal with here.
    I wasn't here for Dr. Burgess' questioning, but he talked 
about alternative payment methods. I am a big fan of Medicare 
Advantage Plans. I understand the move and some discussions in 
some areas about Medicare for All. But how can using 
alternative payment methods affect quality and cost in the 
Medicare Advantage world?
    Mr. Azar. So I actually think we have been often thinking 
about things the wrong way when we think about, for instance, 
the Centers for Medicare and Medicaid innovation and our 
demonstration authorities. We tend to think of Fee-for-Service, 
the traditional Medicare, as where we need to innovate, and 
then, Medicare Advantage would just follow. Well, the 
competitive structures with Medicare Advantage and their 
customer responsiveness, and frankly, their ability to run 
plans--these are insurance companies; it is what they do. They 
know how to run insurance and integrated benefits and deliver 
outcomes that are quality outcomes.
    I have been trying to change our mentality to think about 
MA as more of the leading edge of innovation, and perhaps Fee-
for-Service is a fast follower there.
    Mr. Shimkus. Yes, let me follow up with that. What about 
waivers to the Stark and Anti-Kickback Statutes? Do you see 
that addressing it in that space might be helpful?
    Mr. Azar. Yes. So we actually have--it is called the 
Regulatory Sprint, which is an effort that our Deputy Secretary 
has been leading, looking at how the Anti-Kickback Statute 
interpretations and Stark laws could be barriers to 
integration, collaboration, and coordination. Because to get 
the kind of outcomes we want to pay for value, we have to stop 
paying just each individual provider in a procedure-based rifle 
shot and pay together, and have them work together, but we have 
the laws that say don't work together.
    So we have to look at it. We have to protect against fraud. 
We have to protect against abuse. But we have got to open up 
and make sure we allow that collaboration outside of common 
ownership structures.
    Mr. Shimkus. Thank you.
    When we knew about the hearing, we opened up to our social 
media for people to maybe direct a question or two to you. And 
Melody Tucker from Charleston, she actually submitted a whole 
bunch, like 30 of them. So I am not going to go through them 
all; we don't have time to do that. But one of the questions 
she had was--I am just going to read it the way she sent it--
``Will salaries of healthcare providers, including physicians 
and professional/paraprofessional staff, be determined by the 
Government?'' And she is in the reference to the Medicare for 
All debate. Would you see that as--and she goes on with saying, 
``If so, how is Medicare for All not socialized medicine?''
    Mr. Azar. Well, I think there is a real risk with Medicare 
for All that it become, depending on the plan, that it become a 
single-payer system. And if it is a single-payer system, one 
eventually may want to move maybe to actually own the providers 
that are under that, as we see with other countries' socialist 
systems around healthcare. And so, yes, that would end up with 
a system where we would, Congress or HHS would set salaries for 
providers. I hope we don't ever get to that point, but I do 
think that is a risk of single-payer systems. We have seen it 
in other countries.
    Mr. Shimkus. I appreciate that.
    Madam Chairman, my time has expired. I will just yield 
back.
    Ms. Eshoo. I thank the gentleman. I now have the pleasure 
of recognizing the gentlewoman from Florida, Ms. Castor.
    Ms. Castor. Thank you, Madam Chair.
    And thank you, Secretary Azar, for appearing before us 
today on the Trump budget.
    After reviewing the Trump budget, I know my neighbors back 
home in Florida would want me to ask you, why does the 
administration continue to undermine the law that protects them 
from discrimination by insurance companies for preexisting 
conditions? And they would want me to ask you, why does the 
administration continue to saddle families with higher 
healthcare costs, copayments, and premiums? And let's get into 
the specifics here.
    Your Department finalized a rule to expand short-term, 
limitation-duration health plans. These junk plans are not 
required to comply with the comprehensive consumer protections 
of the Affordable Care Act. Junk plans undermine protections 
for people with preexisting conditions. They increase costs. 
They leave American families with fewer financial protections 
and expose them to fraud.
    So yes or no, are you aware, and did you consider in 
rulemaking, that these junk plans discriminate against 
Americans with preexisting conditions?
    Mr. Azar. The short-term, limited-duration plans do not 
have to comply with the Affordable Care Act's full 
requirements, and we need to be sure people understand that.
    Ms. Castor. I will take that as, yes, you were aware?
    Mr. Azar. Some plans may and I believe are covering 
preexisting conditions; some are not. And that needs to be 
fully disclosed.
    Ms. Castor. Did you know, are you aware that--so, you are 
aware that these plans can exclude coverage for preexisting 
conditions or decline to offer coverage to individuals with 
preexisting conditions? Yes or no?
    Mr. Azar. That is correct.
    Ms. Castor. Yes.
    Mr. Azar. That is correct. And that is why people need to 
be fully aware of that, if they go into buying them.
    Ms. Castor. No, I think what should happen is that we 
should adhere to the law of the land, that we do allow 
discrimination against our neighbors with preexisting health 
conditions. That is what the law says.
    Mr. Azar. If that was the law of the land, then President 
Obama violated during his entire Presidency.
    Ms. Castor. Secretary Azar, yes or no, are you aware, and 
did you consider in rulemaking, that these junk plans exclude 
coverage for basic healthcare services, such as 
hospitalization, treatment for substance use disorders, or 
prescription drugs? Yes or no?
    Mr. Azar. Short-term, limited-duration plans may exclude 
coverage.
    Ms. Castor. So yes?
    Mr. Azar. That is exactly why they can be more affordable 
options for some people.
    Ms. Castor. So the Department also concluded that expanding 
junk plans will, and I quote, ``increase premiums and cause an 
increase in the number of individuals who are uninsured. Other 
nonpartisan estimates, including the CBO, have also projected 
that expanding junk plans will increase premiums.'' So yes or 
no, are you aware, and did you consider in rulemaking, that 
expanding junk plans will lead to higher premiums in the 
individual market?
    Mr. Azar. Did consider that. The CMS actuary had some 
analysis around that. But, given that we now pay for the 
insurance for everybody in the individual market--we are 
subsidizing, I think, over 87 percent of people's premium 
acquisition--nobody should be leaving subsidized insurance to 
buy one of these plans. If we are buying you a full insurance 
package, I don't know why you would leave and buy a short-term, 
limited-duration plan out of your own pocket.
    Ms. Castor. Well----
    Mr. Azar. It doesn't make any sense to me, but----
    Ms. Castor. Let me say, the CBO was very clear on this. 
They projected premiums will increase by at least three percent 
due to your junk plan rule. And other studies, including one of 
out of the Urban Institute, they have projected higher premium 
increases across the board as well.
    Mr. Azar. Well, the rule----
    Ms. Castor. You are going in the wrong direction.
    Mr. Azar. Well----
    Ms. Castor. Families need relief. And what is happening is 
you have sabotaged--allowing these junk plans is hurting 
everybody. And we had expert testimony last week from folks 
that are implementing in many States that said as much.
    Your Department also finalized a proposal in the final rule 
that would allow junk plans to be renewed for up to 36 months. 
This was not presented in the proposed rule, and stakeholders 
did not have an opportunity to provide input in rulemaking. Why 
did HHS sidestep the rulemaking process and finalize a major 
policy change that was not presented in the proposed rule?
    Mr. Azar. I don't believe we did, and my memory is that we 
asked the question whether there was legal authority for 
renewability, but I am not confident of that. But I thought we 
had asked that question, but I am not aware of any legal 
infirmity in the administrative processes there.
    Ms. Castor. So you are saying the Department's general 
counsel provided a legal opinion on the renewability provision?
    Mr. Azar. No, I am saying that I thought we had asked for 
comment in the Notice of Proposed Rulemaking around the 
question of renewability. I may be mistaken. My memory is----
    Ms. Castor. Would you please share those documents with the 
committee?
    Mr. Azar. No, I am saying we asked the question to the 
public as to whether--and asked for comment. You were asking 
about whether something was fairly included in the Notice of 
Proposed Rulemaking.
    Ms. Castor. Yes. Could you provide those documents that you 
said you provided to the public and any of the legal opinions 
or questions----
    Mr. Azar. It would be in The Federal Register because it 
would be--what I am saying is I think in the Notice of Proposed 
Rulemaking we asked that question. I may be mistaken.
    Ms. Castor. So you are saying you would not provide those 
documents if----
    Mr. Azar. I don't think you are listening to what I am 
saying, which is that it is in the Notice--I believe in the 
Notice of Proposed Rulemaking we asked the question, and----
    Ms. Castor. But your Department's general counsel's legal 
opinion would not be in The Federal Register. Would you please 
provide those documents to the committee?
    Mr. Azar. We would have to review that under a request for 
privilege and decide, and determine whether that is appropriate 
to share.
    Ms. Castor. I don't believe that you did.
    Ms. Eshoo. The gentlewoman's time has expired. I now would 
like to recognize the gentleman from Kentucky, Mr. Guthrie.
    Mr. Guthrie. Thank you.
    Thank you, Mr. Secretary. Just a couple of things before I 
get to my questions.
    I believe short-term duration plans were legal under the 
previous administration?
    Mr. Azar. That is correct. For the entirety of the Obama 
administration, they existed for 12 months, up until just the 
waning hours of the Obama administration, when they cut them 
back only to three months to try to drive people into the 
exchange market.
    Mr. Guthrie. All right. Thanks.
    Also, we are talking about per-capita caps, and I worked on 
this in the previous Congress. And I remember having a letter--
and it was entered in the record when we had a hearing--that 
each member, Democrat member of the Senate who had been serving 
at the time, who was still serving, who were serving in the 
1990s--I think it was '96--signed a letter for per-capita 
allotments through Medicaid and Medicare--Medicaid. I'm sorry.
    And former committee chairman Henry Waxman, in a 1996 
congressional hearing, said that, ``the Federal Government 
would maintain its commitment to sharing the costs of providing 
basic healthcare and long-term coverage to vulnerable 
Americans.'' And he correctly pointed out that ``States would 
have both incentives and the tools to manage Medicaid more 
efficiently.'' He did say that, obviously, the Federal 
assistance would have to change if there was increases beyond 
the control of States--hurricanes, floods, outbreaks of 
contagious diseases. But that was something that, in the '90s 
at least, was more bipartisan.
    Let me just get to--I had a lady who came into my office 
the other day. A lot of us have people that come regularly with 
different groups with diseases, and she has ovarian cancer, and 
it touched my heart. But her biggest struggle, when I was 
talking to her, was about her daughter--she had her 
grandchildren because her daughter had an opioid addiction. 
With everything she was going through, that was really on her 
heart and mind, and we talked about the opioid bill that we 
passed. I know that it is supported in this budget.
    And I particularly had an area called Comprehensive Opioid 
Recovery Centers Act, which would give comprehensive coverage. 
It became Section 7121 of H.R. 6. And could you talk about that 
specific section, if you have that information, and 
implementation of it moving forward, or just the overall 
implementation of H.R. 6 as well?
    Mr. Azar. I would be happy to get back to you. I am afraid 
I don't have details on that particular aspect of the 
implementation. We are, obviously, thankful to you and this 
committee and Congress for the SUPPORT Act and the tools that 
it provided us on the opioid epidemic.
    Nearly every part of HHS is involved in implementing the 
SUPPORT Act. It is such a comprehensive piece of legislation. 
We are driving forward under the direction of our Assistant 
Secretary for Health, Admiral Brett Giroir, and trying to make 
sure we meet all deadlines in implementing all the various 
provisions of the Act.
    Mr. Guthrie. Thank you very much.
    And also, I wanted to just kind of ask you this: The House 
Republicans strongly believe that it is important that we 
ensure protections for individuals with preexisting conditions. 
And this is a commitment by you and President Trump, correct?
    Mr. Azar. That is correct. The President has made clear he 
will sign no legislation that would change the Affordable Care 
Act that does not protect preexisting conditions. His budget 
mandates that, that if Congress were to pass it, the $1.2 
trillion American Healthcare Grant to States would have to have 
effective risk-pooling mechanisms or other genuine protections 
for preexisting conditions, which we have actually worked with 
States to do. I have granted, I believe, seven waivers to 
States under the Affordable Care Act to create reinsurance 
pools that have actually brought premiums down from 9 to 30 
percent as a result of these preexisting conditions pooling 
mechanisms.
    Mr. Guthrie. Thank you.
    And also, under the Obama administration, premiums in the 
individual market increased every year. But President Trump has 
enacted several deregulatory reforms, and premiums have 
decreased. Is this true?
    Mr. Azar. That is absolutely true. Premiums, for the first 
time in the history of the Affordable Care Act, actually went 
down almost two percent from 2018 to 2019, and we saw the first 
increase in the number of plans since 2015. These are directly 
attributable to steps that we have taken to try to stabilize 
the marketplace, including the first thing that we did on it 
was a marketplace stabilization rule that were the things the 
insurance industry said we need to be able to run a 
predictable, actuarially, non-gamed system.
    Mr. Guthrie. Thank you.
    Mr. Azar. So we think we have a way to try to protect, to 
make the premiums lower and choices better.
    Mr. Guthrie. OK. Thank you.
    There have been proposals for Medicare for All, a single-
payer, government-run Medicare for All bill. A 158 million 
Americans receive their insurance through their employer or 
their unions. What would happen to these 158 million employees 
if we passed Medicare for All, from the proposals you have 
seen?
    Mr. Azar. So CMS's data is actually 174 million Americans 
have their insurance through their employers. And under the 
plans, at least some that I have seen, your employer insurance 
would immediately go away because it would be outlawed; you 
would have to go on Medicare. Even plans that don't mandate 
that immediately would eventually cause the private sector 
plans to go away because you would create such a financial 
advantage for the Medicare plans, which I think pay 40 percent 
less to providers by law. They end up paying 40 percent less 
than commercial plans. It would effectively drive all private 
plans out of business. So one way or the other, the different 
iterations would lead to 174 million Americans not having the 
insurance they have today.
    Mr. Guthrie. Thank you.
    My time has expired. I yield back. Thank you.
    Ms. Eshoo. I thank the gentleman. I now have the pleasure 
of recognizing the gentleman from New York, Mr. Engel.
    Mr. Engel. Thank you, Madam Chair.
    And thank you, Mr. Secretary, for being here today.
    Fifteen months ago, the Republican tax scam bill passed and 
was signed into law. And I said at the time, and it is even 
more true today, the impact of that legislation has led to 
exploding deficits, and therefore, also has led to the 
President's budget calling for a 12 percent decrease in the HHS 
budget. This budget continues to promote the long-sought goal 
of dismantling the Affordable Care Act by another failed 
attempt at so-called repeal and replace the law and weakens 
protections for people with preexisting conditions. This would 
leave millions of Americans without meaningful health 
insurance.
    Over 10 years, this budget calls for a $1.5 trillion cut in 
Medicaid and a $500 billion cut in Medicare, partially offset 
by inadequate investments in health plans which bypass consumer 
protections. The cut in Medicaid is approximately $1 in $4 
spent today, resulting in millions of Americans losing their 
coverage.
    The budget does provide a very modest $291 million towards 
what the President call halting the spread of HIV. As chairman 
of the House Foreign Affair Committee, I am particularly 
opposed to cuts in funding for global AIDS programs. There is a 
22 percent cut in PEPFAR, used to treat millions 
internationally, mostly in Africa, a program started by 
President George W. Bush. There is also a proposal to water 
down the U.S. contribution in the global fund to fight AIDS, 
TB, and malaria from $1.35 to $1.1 billion.
    Inexplicitly, we also see budget slashes to the CDC of 
nearly 10 percent. Funding for the NIH takes a 12 percent cut 
of $4.5 billion, with the National Cancer Institute absorbing 
most of that hit. Can you imagine that?
    Now, Mr. Secretary, this HHS budget is completely 
unacceptable and is a direct threat to the health and well-
being of all Americans. I have a couple of questions.
    I would like to ask you, Mr. Secretary, yes or no, can you 
guarantee that cutting almost $26 billion from hospitals that 
serve low-income and uninsured individuals will not result in a 
reduction in services, endanger access to vulnerable 
populations, or contribute to hospital closures?
    Mr. Azar. I am not sure which particular cut to hospitals 
you are referring to in $26 billion. If it is the Medicare 
changes on hospitals gaming the system by jacking up private 
practice rates when they buy a physician practice----
    Mr. Engel DSH payments is what I am referring to. Under 
this formula, some of the largest DSH cuts will be on States 
like mine that chose to expand Medicaid, while States that 
rejected Medicaid expansion will get much smaller cuts. So will 
the additional DSH cuts you are proposing continue this policy 
of punishing states that expanded Medicaid with steeper 
hospital costs?
    Mr. Azar. Correct me if I am wrong, but I thought the point 
of the Medicaid expansion, actually, was tied to DSH payments 
going down. That was part of the funding mechanism in it. I may 
be mistaken, but I think that is actually part of the 
original--what President Obama and the Congress enacted, and we 
are sort of carrying through on that, I believe.
    Mr. Engel. Well, yes, how do the cuts in the CDC and NIH 
budgets promote lifesaving research for those Americans 
desperate for a cure?
    Mr. Azar. The cuts at CDC and NIH were a challenge and it 
is a starting point. With a tough budget environment, these are 
difficult choices. We have tried to prioritize, and I 
understand you or others will disagree with those choices. And 
we are happy to engage in an ongoing discussion. It is a 
starting point for that.
    Mr. Engel. Well, the choice I am really against is the 
choice that gives tax breaks to very wealthy people in exchange 
for what we are seeing right now in this budget, hurting the 
poor and the middle-class and their ability to have adequate 
healthcare.
    You have hospitals in my district and all the surrounding 
districts that serve a high number of Medicaid patients, and 
the uninsured are a critical part of our healthcare 
infrastructure. They ensure that our most vulnerable citizens 
have access to the care they need when they need it most. And 
these hospitals rely on funding. I know you know this. For the 
Medicaid Disproportionate Share Hospital, a DSH will help keep 
their doors open and their lights on. And Medicaid DSH payments 
help support hospitals across the country in all types of 
communities, urban and rural. And at the end of this year, 
hospitals will face substantial cuts to their DSH funds if 
Congress doesn't act.
    So the President's budget, the way I look at it, doesn't 
propose to reduce or delay these cuts. Instead, it doubles down 
and proposes increasing the size of these cuts over a longer 
period of time. And by your own objections, this would result 
in $25.9 billion in cuts to Medicaid DSH on top of a $44 
billion in DSH allotment reductions under current law. I don't 
see how hospitals will be able to sustain cuts of that size. 
Could you please explain to me how that would be possible?
    Mr. Azar. Again, I believe that is inherent in the 
Affordable Care Act's structure. And in terms of uncompensated 
care, I thought that the Medicaid expansion and the Affordable 
Care Act were supposed to get rid of the uncompensated care. I 
mean, we can't keep the old system and have the new system on 
top of it and keep paying the same amount of money. That is at 
least our perspective in the budget.
    Mr. Engel. But let me just say, Madam Chair, and then, I 
will end, to me, it doesn't matter as long as we are not 
pulling away help that people need now. It seems to me that, 
from these cuts, there is no way that you can call it any other 
thing, but we are taking money away and many, many more people 
will be left uninsured and will have no help. And to me, that 
is not the way we should be going, providing tax cuts for the 
wealthy in exchange for everybody else getting screwed.
    Ms. Eshoo. I thank the gentleman. I now have the pleasure 
of recognizing the gentleman from Virginia, Mr. Griffith, 5 
minutes for questioning.
    Mr. Griffith. Mr. Secretary, in trying to answer some of 
the questions just a minute or two ago, you were talking about 
the DSH payments and some of the bigger hospitals buying up 
small satellites in order to be able to get DSH payments they 
wouldn't otherwise be qualified for. Did you want to expand on 
that?
    Mr. Azar. I am afraid on the DSH payment issues I have to 
get back to you on that. If you have a question on that, on 
detail, I would be very happy to get back to you there.
    Mr. Griffith. That is fine.
    In regard to having socialized medicine and have it the 
same parameters as the current Medicare system, where you 
referenced that the medical folks are paid 40 percent less 
under Medicare, have you all done any studies on how many 
healthcare providers would leave the field?
    And let me tell you why I ask that question. My mother is 
88 years old, and obviously, she has been on Medicare for a 
while. Recently, her primary care physician retired. She 
started making phone calls and made a couple of calls and found 
that the doctors that she called were not taking any new 
Medicare patients because of the reduced payments that they 
were going to get. And she just decided she would work with her 
older doctors who were the specialists that dealt with the 
areas of concern, instead of having a primary care physician. 
So she is actually getting less care now than she got before.
    And it made me think that perhaps, at a 40 percent 
reduction, a fair number of healthcare providers, particularly 
those who might have other means of supporting themselves, 
might just go do something else. Have you all done any studies 
on that?
    Mr. Azar. I am not aware of any studies that have been 
conducted yet. I think that is a fruitful area for inquiry. We 
ought to look at that.
    We certainly see that with European socialist systems, 
though, that you get the better providers or hospitals who will 
often opt out of the socialist system because of underpayment. 
And what you get is a two-tier system. You will have basically 
an essential medicine, essential services systems, and then, 
you have others who can buy up in a private sector system, 
alternative providers and hospitals in there. That is not to 
say that these are bad healthcare systems, but it is a two-tier 
system.
    Mr. Griffith. And with our current system where a lot of 
people get it through their employer, it doesn't matter whether 
you are the CEO or the guy working the line or the lady working 
the line; you get the same system. And now we are headed toward 
a system that might actually have two tiers, where the people 
with the money can get that specialist, but the people who are 
working on the factory floor may not be able to get that 
specialist. Is that correct, yes or no?
    Mr. Azar. I am extremely concerned about a two-tier system 
like that.
    Mr. Griffith. And so, that is a yes?
    Mr. Azar. Yes, that is a yes. And let's protect everybody.
    Mr. Griffith. My time is slipping away from me. Just let me 
say this as you all look at things. We have got to figure out a 
way to do reimbursements for telemedicine across the board 
because telemedicine can save us money in the long term and 
provide better care in rural districts like mine. And I am a 
big proponent. And any way I can help you with that, I would 
greatly appreciate it.
    Also, you all have been looking at the DIR fees, the direct 
and indirect payments to pharmacists. It seems to me it is an 
inequitable situation that we have now, where, months later, a 
pharmacist who has sold a drug--and I have lots of these across 
my rural district, community pharmacies. They are not big 
companies. They are little, small, mom-and-pop operations. And 
they get notice that they owe tens of thousands of dollars six 
months after they have already filled the prescription. You 
can't go back to the patient and say, ``Oh, by the way, I told 
you it was a $20 drug. It turns out it was a $30 drug.'' You 
just can't do that, and the pharmacists are having to eat that. 
You all are working on that, and I appreciate that.
    You all, last year, in a Senate hearing, you stated that 
you were going to direct your agency's Office of Inspector 
General to conduct a study on these DIR fees and how these fees 
specifically impact community pharmacists. Has that study been 
completed and, if so, when do you expect to release the 
results?
    Mr. Azar. I believe it well underway and I hope it will 
come out quite soon.
    Mr. Griffith. All right. I appreciate that.
    I also want to talk about durable medical equipment, 
prosthetics, orthotics, and supplies, et cetera. Competitive 
bidding programs have been put on hold. I appreciate that. One 
of the concerns in a rural area is that you may only have one 
or two suppliers, and while the equipment might be available to 
somebody if they drive down the mountain in 45 minutes to an 
hour, but sometimes these folks aren't capable of doing that. 
And we are squeezing out the folks who would actually take the 
equipment to them.
    In that regard, the agency now has plans to include non-
invasive ventilators in the durable medical equipment program. 
Those, obviously, assist people that can't breathe on their 
own. Can you explain the rationale and clinical criteria used 
in the decision to include non-invasive ventilators in the next 
round of bidding?
    Mr. Azar. Sure. The Social Security Act gives us authority 
to phase in items that begin with the highest-cost and the 
highest-volume items or services and those items that we 
determine have the largest savings potential. And so, all of 
the items that we have selected for competitive bidding are 
high-cost, high-volume items with a very large savings 
potential.
    We have got a comprehensive monitoring program, and it has 
shown that beneficiary access and health status outcomes have 
been preserved under the program. We have been very concerned 
about the impact in rural. That is why we made the 
modifications that we did, I believe, midyear last year, and 
then, carrying forward, to attempt to ensure fair reimbursement 
and fair competition for rural areas especially.
    Mr. Griffith. I appreciate it, and yield back, Madam Chair.
    Ms. Eshoo. I thank the gentleman. I now have the pleasure 
of recognizing the gentleman from Maryland, Mr. Sarbanes, for 5 
minutes of questioning.
    Mr. Sarbanes. Thank you, Madam Chair.
    And thank you, Secretary Azar, for being here.
    I just wanted to make sure the record was clear on a couple 
of things. In response to Congresswoman Castor's questions with 
regard to the junk plans, I just want to point out that, while 
with respect to the renewability question of these plans it 
does look like the Department went through the normal course in 
terms of the NPR and allowing public comment there with respect 
to the extension of these plans to 36 months, that did not come 
until the final rule was proposed. And in that sense, it 
sidestepped the kind of transparency that I think we have a 
right to expect. So that is the first thing.
    The second thing I wanted to note is you have been asked a 
number of times about the cuts to NIH, and you really don't 
have a good answer for that, because I think it is indefensible 
and there is going to be a lot of continued inquiry in that 
regard. Because we want to stay on the cutting edge in terms of 
researching and finding cures to these life-threatening 
diseases that afflict so many Americans across the country.
    But I wanted to talk specifically about the opioid crisis 
and address the impact of the pharmaceutical manufacturer 
marketing efforts with respect to the crisis. On February 26th, 
a Washington Post article titled, ``Inside the House of 
OxyContin,'' detailed the actions of Purdue Pharmaceuticals and 
their owners, the Sackler family, in marketing opioids as safe 
and effective to the medical community. It highlighted, the 
article did, that Purdue pioneered direct-to-physician 
marketing and used this approach to lead a marketing strategy 
to persuade providers that opioids were both safe and effective 
for long-term use, despite a lot of scientific evidence to the 
contrary.
    One member of the Sackler family was quoted from an email 
in 1996 saying, quote, ``This strategy has outperformed our 
expectations, market research, and fondest dreams.'' End quote. 
Twenty years later, we are dealing with the consequences of 
this marketing strategy. And I don't need to remind my 
colleagues that opioid deaths hit a record high in 2017 with 
70,000 recorded opioid deaths that year.
    So how is HHS going to hold pharmaceutical manufacturers 
accountable for drug-marketing strategies that are boosting 
profits while harming our communities? Could you speak to that, 
please?
    Mr. Azar. Congressman, thank you for raising it. It is 
really important because, you are right, that is a big part of 
how we got into this opioid crisis, were the practices in 
getting legal opioids out there and getting them out in primary 
care and getting them extensively overprescribed. Is it five 
times, I think, the European average in terms of legal opioids?
    We have been aggressively working on that. We have actually 
gotten opioid, legal opioid prescribing down 22 percent, and on 
a morphine molecular equivalent, down 27 percent so far since 
January of 2017.
    The President has directed, and the Justice Department has 
been working. We will support fully the Justice Department in 
going after any manufacturers who engaged in illegal or 
unethical conduct. DOJ joined in the litigation by the States 
against these manufacturers, and that process is ongoing. But, 
certainly, we will take any cases anywhere the evidence goes. I 
share your concern. We are deeply disturbed, and we see the 
foundation of this crisis in the legal opioid use that started, 
I think, back in the '90s.
    Mr. Sarbanes. Well, I do think we need to step back and 
systematically look at what these marketing strategies are and 
decide whether we are going to lean against them going forward.
    What is the standard of scientific evidence at HHS and FDA 
in terms of what is required from pharmaceutical manufacturers 
when approving drug applications, especially in the case of 
opioids?
    Mr. Azar. New drug applications, I want to defer to my 
colleagues at FDA. So I would say my current belief, but, 
please, I will ask my colleagues, and we will correct it if I 
get it wrong.
    Usually, for an on-label indication, you would require two 
double-blind controlled studies, randomized clinical trials, to 
support a labeled indication. And then, for other information 
that you would provide about the drug, I believe it is a 
substantial evidence test, but I----
    Mr. Sarbanes. I am worried that whatever the standards are 
that are being applied are not achieving the goals that the 
public would want to see in terms of kind of rigorous decisions 
about what is safe and what is not safe. And you may have heard 
that the former FDA Commissioner, David Kessler, is concerned 
that opioids are being used in a way that was never proven to 
be safe or effective, particularly the decision on FDA's part 
to expand the label use of opioids to allow long-term use, 
which is something that probably should not have happened.
    So as I close, I just want to say that I think HHS and FDA 
have to put a plan in place for retroactively reviewing the 
safety and efficacy of existing opioid projects. Let's go look 
at what is happening right now because it could be continuing 
to fuel this opioid crisis. So it is not just retrospective 
here. This is about making decisions going forward that can 
help us get out of this crisis.
    With that, I yield back my time.
    Ms. Eshoo. I thank the gentleman. I now would like to 
recognize the gentleman from Florida, Mr. Bilirakis.
    Mr. Bilirakis. Thank you, Madam Chair. I appreciate it so 
very much.
    And welcome, Mr. Secretary. Appreciate it.
    I want to talk about Medicare Part D. When Congress created 
Medicare Part D, it did so with the belief that private sector 
organizations which are already administering employer-
sponsored drug benefits could be used to administer a Medicare 
drug benefit. We now have Medicare Part D, where drug plans 
compete against each other to provide the lowest price to 
beneficiaries. It is probably the only Federal program that 
consistently comes in under budget with premiums that have 
remained largely unchanged. And I know this has been going on 
for years. It is a very successful program.
    In my district, we have 191,000 seniors, and about 80 
percent of them are on either Medicare Part D or they 
participate in a Medicare Advantage program with a drug 
benefit. Some people have talked about changing Part D and 
having the Government negotiate drug prices. Do you think the 
Government can negotiate a better deal than what the plans have 
been able to negotiate over the past 15 years? Again, we want 
what is best for our constituents. We want low drug prices, and 
I know you do, too, and the President as well. So that is the 
question. Again, do you think the Government can negotiate a 
better deal than what the plans have been able to negotiate 
over the past 15 years?
    Mr. Azar. I do not believe that we could do a better job 
negotiating than these pharmacy benefit managers do, absent 
creating a highly-restrictive, uniform formulary for every 
senior citizen in America. And that is what Peter Orszag, the 
head of the Congressional Budget Office and President Obama's 
OBM Director, concluded also. These PBMs have significant 
market power. They negotiate discounts, where we let them, that 
are comparable to European OECD levels of discounting, is my 
understanding and experience.
    But we would have to create a single formulary. We would 
have to say that, every senior, you may have this drug; you may 
not have this drug. We have heard the bipartisan concern even 
today on step therapy and utilization management within 
protected classes. Imagine the outcry if we were to say to all 
seniors, ``You may have''--and I will just pick a drug--``You 
may have HUMIRA; you may not have Enbrel.'' That is the only 
way I could get better savings than the PBMs are able to 
negotiate.
    And I think a lot of the concerns would be here. I am not 
sure a lot of folks who ask us for that negotiation understand 
the implications from a beneficiary choice and access 
perspective. I am happy to have that discussion with both sides 
of the aisle on this, because we want to solve the drug pricing 
crisis. We want to solve that, but we want to solve it in the 
right way, with patients at the center.
    Mr. Bilirakis. All right. Thank you very much, Mr. 
Secretary.
    Again, yes, you are right. I mean, your heart is in the 
right place. The President's heart is in the right place. 
Everyone, we want lower drug prices, but, again, also choice 
and accessibility are so very important for our seniors.
    I assume that you have reviewed the Medicare for All 
proposal?
    Mr. Azar. I have seen and heard about different iterations 
of it, sir.
    Mr. Bilirakis. Yes, yes. So how would the Medicare for All 
proposal affect the successful Medicare Part D program, in your 
opinion?
    Mr. Azar. It would take it away because Medicare Part D is 
a private-plan-administered program with private insurance, is 
my understanding, at least of some of the versions of that.
    Mr. Bilirakis. Yes, and, in my opinion, it is not perfect, 
and we are going to close the donut hole. But it has been a 
very successful program. I hear from my seniors all the time.
    Medicare Advantage is very popular in my district. Fifty-
three percent of our seniors are on Medicare Advantage. They 
really love the program. How would Medicare for All affect the 
Medicare Advantage Program?
    Mr. Azar. I believe Medicare for All, under at least some 
versions of the Medicare for All program, that Medicare 
Advantage would disappear because it is a private insurance 
program administered by the Government. But I believe it would 
go away and all would go onto a Medicare Fee-for-Service, the 
old-style 1960s Medicare that people are increasingly not 
choosing because they want the more private sector, flexible, 
choice-full benefit package of Medicare Advantage.
    Mr. Bilirakis. Well, thank you very much. It would be a 
real shame if we lost that.
    Mr. Azar. Thank you.
    Mr. Bilirakis. Thank you very much. I yield back.
    Ms. Eshoo. I thank the gentleman. I now would like to 
recognize the gentleman from Oregon, a wonderful member of this 
committee, Mr. Schrader.
    Mr. Schrader. Thank you very much. I appreciate this.
    Thank you for being here today, Mr. Secretary. I appreciate 
it very much.
    I am not particularly a big fan of the budget that is 
rolled out for HHS, to be honest. We are a big fan of the ACA. 
This would repeal it, and the Medicaid program gets cut, cuts 
to research, those types of things.
    But I try to look at the silver linings here, and the 
prescription drug costs suggestions merit, I think, some good 
look-sees. In particular, generics are saving us $250 billion a 
year. It is a big area. I prefer, like my good colleague from 
Florida, market-based solutions in terms of how we encourage 
competition, as probably the best way to go about that.
    And in the generic space, we currently give manufacturers 
180 days exclusivity when they file for a new generic drug, but 
there have been some problems with that, with that exclusivity. 
Sometimes they don't just get around to marketing the drug in a 
timely manner, and that exclusivity drags out well beyond 180 
days, basically, blocking others from getting into the 
marketplace and further reducing costs for the consumer.
    So a couple of questions, if I may. One is, how often does 
a first filer block competition from subsequent generic 
manufacturers, and how long does that parking actually seem to 
last? Any examples recently?
    Mr. Azar. So my understanding is that, on average, we see 
about five of those instances a year where you will have that 
first-to-file, essentially, squat on their 180-day exclusivity. 
And on average, that leads to about a 12-month delay in 
generics coming to market. So it is a very significant access 
and financial issue.
    Mr. Schrader. All right. Any recent examples of that?
    Mr. Azar. I don't have a particular company or product in 
mind. We could try to get that to you. But those are the 
average numbers there.
    Mr. Schrader. All right. Well, it would be great to get 
that information, some real-life examples.
    And what is the motivation, basically, what is the 
advantage for these manufacturers to park their exclusivity, 
which seems sort of obvious, but what you seen?
    Mr. Azar. Well, there could be instances where they simply 
can't make the drug. There are often manufacturing problems. So 
somebody gets approved, but they are not able to bring it 
across the finish line and manufacture. But there may also be 
instances where there is a deal, where there is a deal between 
the generic company and the branded manufacture to forestall 
the starting of that 180-day clock, so that the branded company 
can keep selling the branded drugs.
    Mr. Schrader. I see. I see.
    Mr. Azar. It is a likely potential source of great abuse on 
access to generic medicines for our people.
    Mr. Schrader. Yes, and I think the goal would be, 
hopefully, to provide opportunity for folks to get into the 
market as soon as possible. Maybe some changes can be made, so 
that a second generic that comes to market in a timely manner 
would start triggering a clock.
    Mr. Azar. And the President's budget has that proposal in 
there. And I appreciate your leadership and Congressman 
Carter's leadership supporting reform here that would fix this 
real abuse of our generic system.
    Mr. Schrader. Last question is, some people argue that the 
forfeiture of that exclusivity that is currently in statute 
provides enough protections against the parking issue that we 
are talking about here. I understand there have been some 
problems, frankly, enforcing that forfeiture portion.
    Mr. Azar. Yes. I think the evidence would be to the 
contrary, that, in fact, we are seeing this as a real problem. 
And getting rid of that abuse by having the clock start as soon 
as the drug is available from an approval perspective, and if 
they don't launch as soon as there is a second drug available 
to come on, that clock should start or other different 
solutions. So the forfeiture provisions that are there are, 
obviously, not quite sufficient. We need to fix this 180-day 
clock issue.
    Mr. Schrader. Very good. Very good. Well, I appreciate your 
interest in that issue, and hopefully, it is one of many areas 
we can work together on.
    Mr. Azar. I hope so.
    Mr. Schrader. Thank you very much, and I yield back, Madam 
Chair.
    Ms. Eshoo. I thank the gentleman. And we are going to have 
a legislative hearing tomorrow on the very issue that you just 
raised with the Secretary. I hope that we have good bipartisan 
support on addressing that abuse.
    I now would like to recognize the gentleman from Indiana, 
Dr. Bucshon.
    Mr. Bucshon. Thank you.
    And welcome, Secretary Azar, to our subcommittee.
    I do agree with one of my colleagues on the other side that 
my constituents do need relief, but it is from the high 
deductibles and premiums created the ACA and the following 
years after that.
    Secretary Azar, I was pleased to see the administration's 
focus on the 340(b) program again this year in the budget, 
specifically, a call to require transparency regarding the use 
of program savings by 340(b) entities. This goes hand in hand 
with the important work done by this committee, the Energy and 
Commerce Committee, last Congress in the Oversight Subcommittee 
in highlighting the need for 340(b) reform, and also, in 
exploring specific legislative proposals aimed at strengthening 
the program.
    I was proud to sponsor a bill last Congress that would 
introduce common-sense data collection for 340(b) entities 
previously facing no oversight. It is very concerning to me 
that a significant number of hospitals in the 340(b) program 
may be providing low levels of charity care, despite the rapid 
growth in the program, recently, mostly through the acquisition 
of child sites, and face no requirements to report on their use 
of 340(b) savings.
    The first question I would have, would you support 
including a charity care requirement as a condition of 
eligibility for the program?
    Mr. Azar. I would have to look at that and see what the 
administration position would be there. In our budget, of 
course, we do propose that, to get the benefit of savings from 
our reimbursement change----
    Mr. Bucshon. Correct.
    Mr. Azar [continuing]. That you would have to provide, I 
believe, at least one percent charity care.
    Mr. Bucshon. One percent.
    Mr. Azar. So to be a beneficiary of the budget neutrality 
from the outpatient changes, you would have to do that. So we 
are at least partway there already.
    Mr. Bucshon. OK. Do you think that we should have a minimum 
charity care level met across all hospital networks at the main 
hospital, but also within their network?
    Mr. Azar. Well, it's certainly----
    Mr. Bucshon. It is a complicated question.
    Mr. Azar. The rationale on 340(b) is that you are providing 
that type of care. And so, it is something we need to be 
looking at. I am happy to work with you on that.
    Mr. Bucshon. I appreciate that.
    And based on your budget, would you agree that HRSA needs 
more authority to create clear and enforceful standards for the 
340(b) program?
    Mr. Azar. Absolutely. We need regulatory authority. We need 
oversight authority. We need transparency in 340(b). And we 
need a user fee program, so that those benefitting from 340(b) 
pay for the oversight that we need to provide over their use of 
the program.
    Mr. Bucshon. Thank you for that answer. And could you also 
agree that we need to require all 340(b) covered entities to 
report savings achieved from the 340(b) program and their uses?
    Mr. Azar. I think that type of transparency could be very 
useful. That is not, obviously, a formal statement of 
administration position, but we are generally in favor of that 
type of transparency.
    Mr. Bucshon. I understand. Thank you again for addressing 
340(b) in your budget.
    And I yield back.
    Mr. Burgess. Will the gentleman yield?
    Mr. Bucshon. The gentleman will yield to the ranking 
member, yes, I will.
    Mr. Burgess. I thank the gentleman for yielding.
    This is such an important topic. Of course, this committee, 
the Subcommittee on Oversight and Investigations did do a 
significant amount of body work and produced a report last 
Congress that I encourage people to look at.
    But, Mr. Secretary, there was something that occurred along 
the way in the 340(b) genesis that got us to this point. And 
that was the ability of a contract pharmacy to participate in 
the 340(b) program. Do you have any thoughts as to whether or 
not that is adding to our difficulties?
    Mr. Azar. It is adding to the difficulties and the issues 
around integrity of the program and just original purpose. And 
I do think it would be great if this committee could look into 
this question. It was a well-meaning idea at the start, which 
was, if a hospital doesn't want to run its own pharmacy for 
low-income patients when they come in, let somebody else run 
it. OK, that made perfect sense. But, then, it became, well, 
what if they need something a little closer to home? So extend 
the contract pharmacy out to pharmacies maybe in the 
neighborhood of the patients of that hospital. It has now 
become an industry. It has begun an industry of contract 
pharmacy, of basically shared profit between the pharmacies and 
these hospitals. It is worth looking at it to see the extent to 
which it is fulfilling the original purpose and what Congress 
really intends 340(b) to be about. I leave that to you all. But 
I do think it is worthy of being on your agenda.
    Mr. Burgess. Yes, and I completely agree, and to the extent 
that mergers and acquisitions might evolve out of those 340(b) 
contract pharmacies, it is worthy of our discussion.
    So I thank the gentleman for yielding. I will yield back to 
you.
    Mr. Bucshon. I yield back.
    Ms. Eshoo. I thank the gentleman. I now have the pleasure 
of recognizing the gentleman from New Mexico, Mr. Lujan.
    Mr. Lujan. Thank you very much, Madam Chair.
    Secretary Azar, yes or no, were you given advance warning 
of the Department of Justice's decision to not defend the law?
    Mr. Azar. I am sorry, you are speaking, I assume, about the 
Texas litigation? I just want to be sure I--you said ``the 
law''. I just want to make sure the law we are talking about--
--
    Mr. Lujan. Yes, Mr. Secretary.
    Mr. Azar [continuing]. Is the Affordable Care Act?
    Mr. Lujan. Yes, Mr. Secretary.
    Mr. Azar. Yes, I knew the filing that was going to happen 
on behalf of the United States.
    Mr. Lujan. How were you notified of the Department of 
Justice decision? Did you receive a phone call, an email, or a 
written letter?
    Mr. Azar. Our Department is involved in consultations 
regarding the filing of litigation in which the Department has 
interest or is a party. And so, we have communications with the 
Justice Department.
    Mr. Lujan. You had a phone call or was it an in-person 
meeting? Was it a letter? Was it a----
    Mr. Azar. The nature of the discussions that I have 
regarding deliberations on filing of the position of the United 
States in litigation in this case are not ones that I can have 
full discussion about.
    Mr. Lujan. You can't say? I understand that you have 
already refused to share those documents, but you can't say if 
it was a phone conversation or an in-person meeting?
    Mr. Azar. Our Department has discussions with the Justice 
Department and other officials regarding the position in highly 
significant cases of litigation on the position of the United 
States. And, yes, I had a----
    Mr. Lujan. Mr. Secretary, did you personally have those 
conversations?
    Mr. Azar. I did, indeed.
    Mr. Lujan. Look, it is simple. If the District Court ruling 
stays, millions of Americans would lose their health coverage, 
healthcare costs would skyrocket, and lifesaving healthcare 
would become unaffordable for American families. Secretary 
Azar, yes or no, did your Department conduct an analysis to 
evaluate the effects of the Department of Justice's position on 
consumer cost and coverage?
    Mr. Azar. I don't know if we did at the time, and as I 
spoke with Chairman Pallone earlier, we are working to gather 
up, if we do have analytics around impacts of the court 
decision in the case, we are working to provide those to the 
committee.
    Mr. Lujan. Can you commit to providing that, then, to the 
committee? That is something you will do?
    Mr. Azar. I asked my team to find any materials like that 
and provide those to the committee, that type of analytics, and 
to provide those to the committee. Absent some problem--and I 
think they have communicated with committee staff to that 
regard--absent something I am not aware of, I want to make sure 
you get that information.
    Mr. Lujan. So, Mr. Secretary, surrounding the initial 
questions that I asked as well, why is it that there is a 
reluctance to share that information with the committee?
    Mr. Azar. To share the analytics? I have----
    Mr. Lujan. Not the analytics, Mr. Secretary. Why is it that 
there is a reluctance from you to share the information, 
pursuant to the conversation surrounding the Department of 
Justice's decision to not defend the law in the Texas case?
    Mr. Azar. Well, obviously, discussions of individual 
Cabinet members at a certain level regarding positions of the 
United States in litigation are historically over the course of 
the history of this country highly-privileged, sensitive 
discussions, especially with pending litigation.
    Mr. Lujan. Well, Mr. Secretary, I think that there is a 
decision that was clearly made associated with positions of the 
administration. The question that I have, and why I am asking 
the questions that I am, is in your Senate confirmation 
hearings you repeatedly stated that you were committed to 
enforcing and upholding the Affordable Care Act. Is that 
correct?
    Mr. Azar. I absolutely am. As long as it is the law of the 
land, I will in my administrative authorities work to make it 
work for the American people, in my judgment, as best I can.
    Mr. Lujan. Well, Mr. Secretary----
    Mr. Azar. But that is not a statement of whether something 
is constitutional or not.
    Mr. Lujan. Mr. Secretary, if I may, the administration has 
made an unprecedented decision to throw away the responsibility 
to defend the Affordable Care Act and law.
    Mr. Azar. So I want to be very clear. Our policy position, 
as an administration and mine, is to protect preexisting 
conditions. You are speaking about a legal piece of litigation 
the Justice Department leads on. We want preexisting conditions 
protected. Our budget actually has a concept about how we can 
do that with a replacement of the Affordable Care Act. I am 
happy to work with this Congress on alternative ways and 
approaches. The President has made it very clear he will never 
sign any new legislation replacing the ACA that he does not 
believe does protect people who have preexisting conditions.
    Mr. Lujan. Well, Mr. Secretary, I am glad that you brought 
attention to the fact of the policy related to people with 
preexisting conditions because you and I very well know that 
the Trump administration has specifically disavowed ACA 
provisions that guarantee coverage and protect people with 
preexisting conditions. I think that that is ignoring what has 
occurred. Your testimony today seems to be ignoring positions 
that have been taken by this administration, that you, 
yourself, said you would uphold in court.
    Mr. Azar. I think you are probably referring to short-term, 
limitation-duration----
    Mr. Lujan. No, no, no. I know what I am referring to, Mr. 
Secretary.
    Mr. Azar. It is totally transparent----
    Mr. Lujan. And I think that it is critically important that 
we understand what is occurring here today and what is not 
occurring. And I certainly hope that you will reverse your 
refusal to share documents with this committee.
    And with that, Madam Chair, I yield back.
    Ms. Eshoo. I thank the gentleman.
    We have three votes on the floor. So the subcommittee will 
stand in recess until immediately after votes.
    We still have several members that are in line to question. 
I have 14 members. There are three that waved on, but that is 
still a large group.
    So, Mr. Secretary, it is a chance for you to take a 
stretch, relax for a few minutes, figure out how you might 
answer the questions that are to come.
    And we will return as soon as votes are completed.
    Thank you.
    [Recess.]
    Ms. Eshoo. I call the subcommittee back to order.
    Thank you, Mr. Secretary, for your patience.
    And we will move on with questions. It is a huge pleasure 
because she has been such a wonderful partner in so many 
things--the gentlewoman from Indiana, Mrs. Brooks, for 5 
minutes of questions.
    Mrs. Brooks. Thank you, Madam Chairwoman.
    And, Secretary Azar, we have talked about this in the past, 
the Pandemic and All-Hazards Preparedness Act, a program that, 
while we have reauthorized it once again in this Congress--and 
I really want to thank the chairwoman, Congresswoman Eshoo, who 
worked with me both last Congress and this Congress to get this 
across the finish line here in the House once again--it has not 
yet been reauthorized. We have not yet been able to get it 
through the Senate.
    It is supported by a host of public health groups, the 
Alliance for Biosecurity. And when we kicked off the 
Congressional Biodefense Caucus together, you participated and 
spoke at that Biodefense Caucus. And I thank you for speaking 
about the importance of PAHPA. During your remarks, you 
mentioned that you were involved in the writing in 2002 of the 
Bioterrorism Act. And I want to commend you because it appears 
that in the Public Health Services Emergency Fund there is, for 
the most part, either level funding or some increased funding 
relative to Pandemic and All-Hazards Preparedness.
    But can you share with us the negative impact of PAHPA not 
being authorized? And if we cannot get this through the 
Senate--there are several programs that actually expired in 
2018; I won't go into those--but what does this do for our 
private partners in the very critical public-private 
partnership in the Medical Countermeasures Enterprise?
    Mr. Azar. Well, thank you, Congresswoman Brooks, for your 
support of PAHPA and for your advocacy of the bioterrorism 
front.
    We are committed to reauthorization of PAHPA. We are 
committed to protecting Americans, and reauthorization of PAHPA 
is an important part of that.
    There are several expired provisions that HHS does need to 
be able to continue the important work in this area. There is a 
FOIA exemption. There is an antitrust exemption. There is a 
National Advisory Committee on Children and Disasters. And 
there is a provision for temporary reassignment of Federally-
funded personnel.
    And the expiration of these provisions does endanger our 
security and the broader Medical Countermeasures Development 
Enterprise that we have. These medical countermeasures are 
dependent upon a very unique and fragile U.S. Government-
industry partnership in this cradle-to-grave enterprise. 
Specifically, if a pandemic were to occur, BARDA, which is our 
research and development agency, would currently be unable to 
negotiate and bring together certain critical medical 
countermeasures manufacturers due to a lack of antitrust 
exemptions. That is just one example of how we are at risk 
right now.
    Mrs. Brooks. And I think because it is not commonly 
understood, that is because BARDA does sit with different 
manufacturers of vaccines to have a discussion. Is that 
correct?
    Mr. Azar. Exactly. We can convene competitors under the 
antitrust exemption, and they can speak freely in ways that 
they otherwise wouldn't be able to.
    Mrs. Brooks. And that provision has expired?
    Mr. Azar. That has expired.
    Mrs. Brooks. OK. So right now, they cannot convene that 
type of meeting if we were to have an unusual or a pandemic and 
have those discussions?
    Mr. Azar. If we had a pandemic and needed to scale-up 
production immediately for a pandemic flu vaccine, right now we 
would not be able to engage in those collaborative private-
public partnership discussions across industry.
    Mrs. Brooks. Right. Thank you.
    With respect to the funding, I certainly see that the 
National Disaster Medical System has actually been plused-up 
from $57 million in FY19 to $77 million. If I am not mistaken, 
that is bringing in medical providers from around the country 
to help us in cases of disaster, of which we have seen quite a 
bit. Is there anything you would like to say about that? And 
then, we also went down, though, a bit on the Hospital 
Preparedness Program by $7 million.
    Mr. Azar. Right. So the National Disaster Medical System is 
a bedrock of our preparedness and response program. So these 
are individuals who have day jobs, doctors, emergency medical 
technicians, veterinarians even, who work with us and allow us 
to surge in. For instance, you will see these people when you 
are at various events. Like the State of the Union, a lot of 
the medical professionals that are here are actually NDMS 
members here to protect you and me when we are here for 
national security events like that. And so, it is a vital, 
important program, and I am very glad that we have a proposal 
to continue the investment with them.
    Mrs. Brooks. Can you talk very briefly about the other 
provision that expired and the National Advisory Committee on 
Children and Disasters?
    Mr. Azar. So this is, of course, just getting advice from 
the best advisors out there on how we can focus on children in 
disasters. There are very unique needs and threats for children 
in the disaster situation, trauma, mental health, and we do 
want to get the best advice possible. PAHPA enables that.
    Mrs. Brooks. Well, thank you. We look forward to working 
with you to help us get that over the finish line in the 
Senate.
    Mr. Azar. Thank you.
    Mrs. Brooks. Thank you. I yield back.
    Ms. Eshoo. I thank the gentlewoman. It is a pleasure to 
recognize the gentleman from Massachusetts, Mr. Kennedy, for 5 
minutes of questioning.
    Mr. Kennedy. Thank you, Madam Chair.
    Mr. Secretary, thanks for being here. Thanks for your 
patience as we went over to vote.
    Last fall, Mr. Secretary, it was reported that your agency 
was considering establishing a legal definition of sex under 
Title IX. According to The New York Times, the memo would 
narrowly define gender as a biological condition determined at 
birth, and any dispute about one's sex would have to be 
clarified using genetic testing.
    Mr. Secretary, is that memo real?
    Mr. Azar. So there was litigation, I think it was at the 
end of the Obama administration, and a Federal court actually 
enjoined enforcement of--I think this is the Section 1557. Is 
that the provision that you are talking about?
    Mr. Kennedy. Yes, but does the memo exists? The New York 
Times said this memo exists.
    Mr. Azar. I am not going to comment on whether some 
preliminary memo exists. We are working on complying with the 
court's order to come up just how do we--the court said that 
the Obama administration's regulation was invalid. And we will 
just work to faithfully implement that across relevant 
agencies.
    Mr. Kennedy. Can you give us a copy of that memo? Can you 
give us a copy of that memo then?
    Mr. Azar. We will certainly look at that. I don't know. If 
it is an internal memo like that, if it is appropriate to 
disclose----
    Mr. Kennedy. It is potentially going to impact millions of 
Americans in not disclosing that, or at least hundreds of 
thousands----
    Mr. Azar. I wouldn't necessarily assume that is operative 
continued thinking, that whatever was in any previous 
document----
    Mr. Kennedy. Thank you.
    So moving on, sir, do you believe that healthcare is a 
right for all Americans in this country?
    Mr. Azar. I believe that we have an important duty, all of 
us, this committee and this administration, to make healthcare 
as affordable as possible for all Americans.
    Mr. Kennedy. So in a less than a year, nearly 20,000 low-
income people in Arkansas, sir, have lost their healthcare 
because of a work requirement that your agency approved. At the 
same time, the unemployment rate in Arkansas has barely budged. 
Is that a successful policy implementation?
    Mr. Azar. So at the request of the Arkansas Government, we 
did approve a community engagement waiver program with them. 
The individuals who have fallen off that program, we do not yet 
have data as to why they fell off the program.
    Mr. Kennedy. Have we asked them? Have you asked them?
    Mr. Azar. Yes. We are working with them. That is part of 
the data gathering. That is part of the learning process.
    Mr. Kennedy. And when do you expect to have that data back?
    Mr. Azar. I don't know if it is timely for that. It is 
quite new. It is quite new in its implementation. So tracing 
the data out to see that individuals, as you said, who advance 
into work with an employer insurance, and hence, do not qualify 
for Medicaid anymore, need Medicaid anymore, we just don't know 
at this point.
    Mr. Kennedy. Mr. Secretary, so in your agency's budget you 
propose implementing mandatory work requirements for Medicaid 
beneficiaries, not knowing what the impact will be across every 
single State. And according to some estimates, upwards of 4 
million Americans can lose access to healthcare, 83 percent of 
whom would only lose coverage because of onerous reporting 
requirements. You just said you are not sure why people are 
losing it. Yet, you have now said that you want to extend that 
to every single State. What is the logic in that?
    Mr. Azar. The logic behind that is we believe that it is a 
fundamental aspect for able-bodied adults, if you are receiving 
free healthcare from the taxpayer, it is not too much to ask 
that you engage in some form of community activity engagement, 
work training. That is consistent with TANF and the important 
welfare reforms that were bipartisan. The administration's 
budget proposal would actually harmonize these across all 
public welfare programs.
    Mr. Kennedy. Mr. Secretary, your mission is to try to make 
sure that everybody gets access to healthcare in this country. 
Can you point me to one study that says that work requirements 
make people healthier? One?
    Mr. Azar. We believe that individuals who have employment 
have healthier outcomes. I don't have the data to cite. We have 
used that in litigation, though.
    Mr. Kennedy. Sir, you run an agency responsible for 
healthcare for millions of Americans. Healthier people working 
does not mean that work requirements make people healthier. I 
assume you understand that?
    Mr. Azar. Well, we are dealing with--because of the Obama--
--
    Mr. Kennedy. Is that true, yes or no?
    Mr. Azar. Could you repeat the question?
    Mr. Kennedy. Healthier people working is not the same thing 
as work making people healthier? Is there any single study you 
can point to, yes or no, that shows that work requirements make 
people healthier?
    Mr. Azar. I would have to provide that in writing to you, 
if we have that.
    Mr. Kennedy. I look forward to the answer. Thank you.
     You are aware of studies in Ohio and Michigan that show 
that Medicaid expansion actually helped beneficiaries obtain 
jobs or remain employed? Are you aware of that, the studies?
    Mr. Azar. Medicaid can be a hand-up for individuals to help 
them with transitioning into work. The goal of all these 
programs should be to help people become independent, and that 
is all of our goal.
    Mr. Kennedy. Except the data that you are looking at seems 
to indicate that there are tens of thousands of people that are 
losing healthcare in a policy that you want to extend across 
the country without answering why.
    Mr. Azar. Well, we don't know if they lost their--if they 
fell out and stopped complying with the work or community 
engagement requirements because they are actually secured jobs 
and, they just didn't need to keep applying.
    Mr. Kennedy. And does cutting Medicare and Medicaid by $1.5 
trillion actually make this program easier to extend healthcare 
to more people?
    Mr. Azar. So what we want to do is we want to remove the 
Medicaid expansion for able-bodied adults----
    Mr. Kennedy. The budget indicates, Mr. Secretary----
    Mr. Azar [continuing]. And focus the program on the aged, 
blind, disabled----
    Mr. Kennedy. Yes or no, you are cutting these programs by 
$1.5 trillion?
    Mr. Azar. Our proposal does have a $1.4 trillion, I 
believe, cut over 10 years to Medicaid, yes.
    Mr. Kennedy. And so, I would imagine that cutting a program 
by $1.4 trillion doesn't actually make the program, strengthen 
the integrity of the program or make it easier for people to 
gain access to insurance.
    I would like to finally conclude with the basis for my 
comments on this, which is it is the perspective of at least 
this Member of Congress, and I think other colleagues of mine, 
that Medicaid work requirements are against the Social 
Security--the very statute that incorporates Medicaid, Section 
115 of the Social Security Act, and are illegal.
    I yield back.
    Ms. Eshoo. I thank the gentleman. Now I would like to 
recognize the gentleman from Oklahoma, Mr. Mullin, 5 minutes of 
questioning.
    Mr. Mullin. Thank you so much.
    Let me go back to the work requirements for just a little 
bit. Social Security is something that people paid into because 
they work and it is deducted out of their paycheck, and it is 
something they have earned. It is not an entitlement. It is 
something that they were required to pay into. And so, it is 
supposed to be there.
    If I am not mistaken, the work requirement, it only targets 
individuals that are abled individuals--able-bodied individuals 
means there is no disability; there is not a reason why they 
can't work. It is able-bodied individuals that are single with 
no dependents. Isn't that correct?
    Mr. Azar. Able-bodied individuals. I don't know about the 
single. They would need to be able-bodied and you wouldn't have 
pregnant women, and I believe with all of our waivers they have 
ensured that there is an exclusion of, for instance, women who 
have young children.
    Mr. Mullin. Right, with no dependents, right.
    Mr. Azar. Trying to be very simple about it.
    Mr. Mullin. And the proposal that I looked at was able-
bodied individuals with no dependencies.
    Mr. Azar. I would need to check if that is in the budget. 
That is certainly the theme of what we approved with waivers, 
has been ensuring that it is very common sense--individuals who 
there is no issue why they couldn't go do volunteer work or job 
training.
    Mr. Mullin. Right. And one of the things you were saying is 
you don't have the data because a lot of these able-bodied 
individuals, they were able to go get jobs and we have employer 
healthcare that could be covering them? There is no statistics 
out there to say one or the next. But if they dropped off, they 
probably went and got a job. Just like my employees, since I 
have had my very first employee back in '97, I provided 
healthcare for them. There is no need for them to be on there 
at that point, is that correct?
    Mr. Azar. Right. If the program has enabled--if the booming 
economy, the historic low unemployment rate, and this program 
has enabled individuals to secure jobs where they get employer 
insurance----
    Mr. Mullin. Right.
    Mr. Azar [continuing]. They don't need to be on Medicaid 
anymore. That seems to be a win for taxpayers and a win for 
them, a win all around.
    Mr. Mullin. Sure. I mean, listen, we have got 7.3 million-
plus job openings right now. We are all competing, all 
employers like myself, we are competing for that employee, and 
benefits sometimes is what puts it over the top.
    So I commend you for giving Arkansas and other States the 
ability to run their State as they see fit. Because we have got 
to put more people in the workforce. Otherwise, we are just 
going to be holding our economy back. So thank you so much for 
doing that and explaining it.
    Let me turn my attention right now to 42 CFR Part 2. Are 
you familiar with that, sir?
    Mr. Azar. I am, yes.
    Mr. Mullin. As you know, last year, we worked pretty 
tirelessly here in the House, had hearings on it. We were able 
to get it out of this committee to the floor. It passed 
overwhelmingly with bipartisan support, 357-to-57. And 
unfortunately, it goes to the Senate and dies, which so many 
great things do. And so, we are now faced with the real 
possibility that we are costing people's lives at this point. 
We have doctors that aren't able to really see the full 
patient's history. And we understand that HHS may be working on 
some rules that could help soften this a little bit. Is that 
correct?
    Mr. Azar. So we have been very public about the fact that 
we have heard the concerns from you, from patients, from family 
members about----
    Mr. Mullin. Physicians?
    Mr. Azar. Physicians, law enforcement, just around the care 
for people with serious mental illness and substance use 
disorder, and are they getting what they need or are our 
regulations artificially standing in the way, while still 
trying to protect their privacy needs? So yes, we are working 
on proposals where we might try reform there, and also, of 
course, we appreciate the work of Congress in looking to 
reconcile Part 2 with HIPAA's requirements. And thank you for 
your leadership and work on this issue.
    Mr. Mullin. It is vitally important. I think it has hit 
home to most people around the country right now, especially 
with the drug abuse that is taking place and the amount of 
opioids that are out there on the streets. So I appreciate it. 
Is there anything that we can help you with that HHS might be 
considering with 42 CFR Part 2?
    Mr. Azar. I would say certainly continuing Congress' 
efforts to look at reconciling Part 2 to HIPAA, to make sure 
that we have uniform standards. There is just so much confusion 
out there. And that is one of the things that I hear a lot, is 
with these privacy provisions, they are important privacy 
provisions, but you get a lot over-lawyering at hospitals and 
schools----
    Mr. Mullin. Right.
    Mr. Azar [continuing]. And otherwise, that basically tell 
people, no, you can't do this; no, you can't do that.
    Mr. Mullin. So true. Over-lawyering, I like that word.
    Mr. Azar. We try to correct it with FAQs. But, as you said, 
people's lives are actually at risk. If parents don't know 
their kid is suffering from an opioid addiction, that is a 
problem. If a patient goes back into the hospital and the 
providers don't know they are a recovering opioid addict, and 
they give them opioids and put them back on it in a procedure, 
that is a problem.
    Mr. Mullin. Right. I couldn't agree with you more.
    I don't have time to get to my IHS questions, but I do want 
to work with you in getting some of the recommendations that 
have been recommended for IHS. It is in disarray, especially 
with what just came to the light with the physician, the 
pediatrician who has been abusing the patients for over 25 
years, and there was a lot of missteps and opportunities to get 
him out. So we would love to work with you, and then, maybe see 
if we can implement just some standard SOPs through IHS and 
help modernize that system.
    Mr. Azar. I look forward to that. Thank you.
    Mr. Mullin. Thank you so much for your time.
    I yield back.
    Ms. Eshoo. I thank the gentleman. I would now like to 
recognize with pleasure the gentleman from California, Mr. 
Cardenas, 5 minutes for questions.
    Mr. Cardenas. Thank you, Secretary Azar. Welcome to the 
People's House, and thank you for coming today, for the 
opportunity to ask questions, and more importantly, to finally 
receive some of the answers in full view of the American 
public.
    There are certainly many topics to select today, but I want 
to spend some time focusing on an administrative policy that 
shocked the nation in the not-so-distant past, the policy of 
separating children from their families. Just recently, 
Secretary Nielsen testified before Congress on this same 
policy. But I am particularly interested to hear from you, 
Secretary Azar, considering your position leading the agency 
whose mission statement, as you said in your opening statement 
today, is: ``to enhance and protect the health and well-being 
of all Americans by providing for effective health and human 
services by fostering sound, sustained advances in sciences 
underlying medicine, public health, and social services.''
    That being the case, I am interested to hear what, if 
anything, was done to protect these children and what is being 
done to address these ill effects on the children and their 
physical and mental condition. So my first question is, in 
cases where a parent is separated from a child because of 
criminal conduct or safety-related concerns, what evidentiary 
standard is required to justify the separation? And what 
written guidance or policy, if any, is provided to your 
Department by DHS personnel making these determinations when it 
comes to the child's welfare and expertise that comes out of 
your Department?
    Mr. Azar. So we do not separate children.
    Mr. Cardenas. Correct, but, then, after that----
    Mr. Azar. Right, the decision to separate would be made 
over generally at DHS, and it would usually be CBP, sometimes 
ICE, over there.
    I do know there are standards in the TVPRA, the Trafficking 
Victims Protection Act, that certain felonies--where a felony 
conviction is required there, but I would have to defer to DHS 
on what the contours are. We don't actually have a say in what 
the standards are necessarily that they would use.
    We get children, and hopefully, we get as much information 
as possible why they are coming to us, either across the border 
or coming from a family unit.
    Mr. Cardenas. Thank you. Reclaiming my time, what I am 
trying to get at here is HHS is better qualified with expertise 
to deal with children, especially when they are separated from 
their family. DHS doesn't do that as well as you do. They turn 
them over to you, is that correct?
    Mr. Azar. That is correct, yes.
    Mr. Cardenas. OK. So the root of my question is this: that 
having been the case, and thousands and thousands of children 
having been turned over to HHS from DHS, is HHS engaged in 
advising DHS, so that they can make better decisions in the 
interest of the physical and mental health and well-being of 
that child?
    Mr. Cardenas. So I think that is a very fair question. I 
don't think we are fully engaged in the sense that they have 
their agents who have to make judgment calls on individual 
cases. They have their standards internally. I don't have 
those. I would, obviously, welcome the opportunity for HHS's 
child welfare professionals to provide advice and assistance to 
DHS in making those calls and setting standards for their SOPs. 
We may have done so. I apologize, if it is happening, I don't 
want to slight the process. But we would be very happy always 
to be engaged in that.
    Mr. Cardenas. And also, if HHS has been engaged in 
dialoging with DHS on these matters, if you could forward any 
of that to us, so we can understand the collaboration that is 
going on. So that, hopefully, should these separations ever 
continue--and it is my understanding that some children are 
still separated from their parents--that we would at least 
expect that in the United States of America, with all the 
resources and expertise we have, they would be minimizing the 
effects on these children's physical and mental well-being, 
adverse effects on their well-being. So if there is any 
information showing that that dialog is going on, to me, that 
is good. We would love to know what that is.
    Mr. Azar. Yes. Thank you. I mean, it is very important 
question and concern.
    Mr. Cardenas. Thank you.
    Mr. Azar. I appreciate your doing that.
    Mr. Cardenas. OK. And also, has HHS already instituted 
policies, protocols, and procedures to limit harm to children 
and their families during these separations? In other words, 
since these separations have become so public and the numbers 
have grown most recently, has HHS changed or instituted new 
policies? Because we are in a paradigm shift right now with the 
numbers being higher than they have probably ever been before 
in American history.
    Mr. Azar. So we have dramatically improved the information-
sharing practices, the IT systems between the Departments, so 
that we can track and make sure that we always have it very 
easy to keep the kids connected to the parent. We want to make 
sure they are in touch all the time. OK?
    All of our children who are separated, in one form or 
another, they all are under mental health evaluation. Within 24 
hours, they all get mental health evaluations. And I think we 
continue to learn how to deal with the particular traumas and 
mental health issues associated with being away from one's 
parents, whether back in Guatemala or in ICE custody. And so, I 
think we continue to try to be a learning organization and 
improve the quality of care for these kids while we are 
entrusted with them.
    Mr. Cardenas. My time has expired. Thank you, Madam Chair.
    Ms. Eshoo. I thank the gentleman. Now it is a pleasure to 
recognize the gentleman from North Carolina, Mr. Hudson.
    Mr. Hudson. I thank the Chair.
    Mr. Secretary, thank you for being here today what is 
almost three and a half hours now because of our vote. But I 
really appreciate you making yourself available for so much 
time.
    Your leadership at HHS has been exemplary. And in general, 
I really appreciate the efforts you are making on behalf of the 
American people to make healthcare more accessible and more 
affordable. I want to put that on the record in case my 
questions today make it appear that I only have concerns.
    But the first being that, on February 15th, I sent a letter 
with 22 of my colleagues, three of which are here today, to 
Commissioner Gottlieb in regard to recent proposal by the FDA 
on menthol cigarettes and e-cigarette sales in convenience 
stores. It was reported on March 1st that Commissioner Gottlieb 
presented his plan to the White House. Yet, the FDA has still 
not responded to serious concerns raised by colleagues and me 
about this proposal. Will you commit to getting FDA's response 
back to our letter before HHS moves forward with this proposal?
    Mr. Azar. We have different elements in what was publicly 
discussed by the Commissioner regarding both e-cigarettes, and 
then, there was a separate issue of menthol additives. And I am 
sorry you haven't had a response yet from Commissioner Gottlieb 
on that. I don't want to delay any process that may be 
underway, though, to take action, especially on this issue of 
the e-cigarette epidemic that we have. This is a real public 
health crisis with the access and the attractiveness to our 
teenagers and even middle school kids. And so, I don't want to 
do anything that might delay that process. It really is we are 
very, very concerned about this e-cigarette issue and what is 
happening to our kids.
    Mr. Hudson. Well, sure. And even if you share the goal of 
wanting to keep these out of the hands of kids, I think it is 
still important for us to understand the process and what kind 
of rules you are proposing. So we would appreciate a response.
    Mr. Azar. Anything that we do in this space would be 
subject, of course, whether it is rulemaking or good guidance 
practices, would be a public process with comment and feedback 
to make sure we are striking the right measure. We have to make 
sure with e-cigarettes--they can be a very important public 
health tool for getting adults who are addicted to combustible 
tobacco off of that. It is better to be on an alternative 
nicotine-delivery product than to be on combustible tobacco. 
But, at the same time, we can't allow it to become an on ramp 
to nicotine addiction or eventually combustible tobacco use by 
our middle school kids and teenagers, and just the utilization 
is soaring through the roof of those products there. So that 
balance, we will get feedback on that, and we will get input on 
that, on how to strike that right balance because it needs a 
balance.
    Mr. Hudson. I agree with that, and I think the industry, 
for the most part, except for some bad actors out there, and 
also, a concern about shipments from China of illegal product 
and counterfeit product, I think those are all things we need 
to work on, and I think we can agree to work on together.
    But I think the data shows this is a safe alternative. And 
so, the process is flowing one way where we are seeing people 
come off combustible tobacco to the vapor-type products, and we 
are not seeing the reverse as the case. And so, I do think it 
is a public health improvement and would appreciate being in 
the loop as much as we can, as you move forward and look at 
that.
    The second issue, I saw in the budget proposal HHS is 
proposing that FDA begin collecting user fees from the e-
cigarette industry to support regulation of the products. In 
general, I think FDA has demonstrated how beneficial user fees 
can be, especially in the drug and device space, to provide 
much-needed resources that an agency responsible for regulating 
one-fifth of every dollar spent by Americans. In the tobacco 
space, however, FDA has not had the same relationship. The 
Tobacco Control Act has been the law for a decade. Yet, FDA has 
approved zero products through the Modified Risk Tobacco 
Product pathway. Is it your intention that these new resources, 
through a user fee, would begin a new period of approval at 
FDA?
    Mr. Azar. Yes, that is the purpose of extending the user 
fees to the e-cigarettes as alternative tobacco products, would 
be to provide us the resources to enable us to build out the 
regulatory architecture and approval processes for these 
products, which we have executed regulatory forbearance on to 
date.
    Mr. Hudson. Right. I appreciate that.
    The last issue, changing course a little bit, the President 
has pledged in the State of the Union to eliminate new HIV 
infections by 2030, as a far-reaching and important goal for 
U.S. public health. The financial resources proposed in 
yesterday's budget release speaks to the President's commitment 
to improving diagnosis, testing, and linkage to care for HIV. I 
commend the President for taking such a monumental effort and 
hope to do what I can to support his plan.
    Given this goal, though, I must ask about a problem a 
number of my constituents that are HIV patients have raised 
with me. Medicare Part D provides for protected classes where 
Medicare must generally cover all drugs within that class. With 
HIV drugs being one of the current six classes--I am running 
out of time here--but my basic question is, how does HHS intend 
on balancing the goal of introducing cost-control measures such 
as prior authorization and step therapy with elimination of new 
HIV infections by maintaining patient adherence to working drug 
regimens in the HIV space?
    Mr. Azar. I am happy to get back to you in writing on that, 
for the chairwoman, if that is OK.
    Mr. Hudson. Sorry about that. An important issue, but I 
would appreciate the response.
    Mr. Azar. It is. It is a very important issue. Thank you.
    Mr. Hudson. Thanks.
    Ms. Eshoo. I was expecting a long answer from the 
Secretary. He is able to get back to you.
    I thank the gentleman for his questions. And now, I have 
the pleasure of recognizing the gentleman from Vermont, a high-
value member of this committee, Mr. Welch.
    Mr. Welch. Thank you very much.
    Secretary Azar, thank you so much for being here.
    You know, there are two things about healthcare. One is 
access related to cost, and the other is cost. There are two 
ways to bring down the overall cost of healthcare, restrict 
access or lower cost. And I am opposed to cutting access, but I 
am determined to work with you on your efforts to lower costs.
    And I want to say something. I believe that President Trump 
on prescription drug prices is intent on bringing down the 
cost. I believe you are. I thank you for your meeting. I 
believe you are committed to doing that. I know Chairwoman 
Eshoo is, and I believe Ranking Member Burgess and our ranking 
member, the entire committee who is here, Mr. Upton is. So we 
have got a chance.
    A couple of things. You have got some good things in the 
budget. It calls a statutory demonstration authority for up to 
five State Medicaid programs to test the closed formulary. And 
we can address that later.
    It proposes to authorize you to leverage Medicare Part D 
plans in negotiating power for certain drugs covered under Part 
B. So I support those.
    And the proposals you have made in the budget, they are in 
the budget, yes, about opposing delay tactics, where I think 
some of my colleagues like Mr. Carter, who has got a lot of 
experience in this, are totally supportive. My goal is for us 
to do those things, ideally do them together, because I think 
that will increase our prospects of success in the Senate, and 
a bipartisan approach on that would really be helpful.
    So I do have a couple of questions, just to see your 
position on a few other things. You do support, as I understand 
it, ending pay for delay. Is that the case?
    Mr. Azar. We do. In fact, our budget has a unique pay-for-
delay provision in it, in that if you do a pay-for-delay 
agreement, you would actually be penalized in the Medicare Part 
B system, yes.
    Mr. Welch. Right, and that is really good. And you want to 
curb the REMS abuses?
     Secretary Azar. Absolutely do. So the CREATES Act, I am 
working with you on that.
    Mr. Welch. Right. And the product hopping that has been 
occurring is another way. Are you opposed to that as well?
    Mr. Azar. I want to make sure I am understanding the 
product----
    Mr. Welch. It is the abuse of citizens--it is product 
hopping, the citizen petitions----
    Mr. Azar. Oh, the citizen issues, yes, we want to crack--
yes.
    Mr. Welch [continuing]. And other forms of evergreening.
    Mr. Azar. Yes, we want to crack----
    Mr. Welch. I mean, that is just manipulating the market.
    Mr. Azar. We want to crack down on any forms of 
manipulation or evergreening of patents and exclusivity beyond 
what the original deals were, absolutely.
    Mr. Welch. All right. And the President also indicated that 
he wants to require the drug companies to disclose the price of 
the products they are advertising----
    Mr. Azar. Yes.
    Mr. Welch [continuing]. Something Jan Schakowsky and our 
committee is championing.
    Mr. Azar. Right.
    Mr. Welch. Now, on this question of negotiation, you raised 
earlier what is the dilemma. If you want to get real savings, 
you need a strict formulary, and that restricts patient choice. 
But if you have no formulary, the cost is so highs it restricts 
patient access.
    And the way we approached this in Vermont is we did have a 
formulary created by physicians and pharmacists like Mr. 
Carter, but there was a failsafe. So that if the doctor said, 
``Peter, you just need the other drug,'' that would get me 
outside of the formulary.
    Are you open to exploring some ways to try to address I 
think the shared concern about not having a formulary restrict 
appropriate access, but to get the benefits of lower costs that 
would spread out across the system for all of us?
    Mr. Azar. So I agree with you that the simple fact is, if 
you don't have a formulary and the ability for someone, the 
middleman, the pharmacy benefit manager, to control and move 
share, they can't jam pharmaceutical companies for discounts 
and rebates. They need power.
    Mr. Welch. Right.
    Mr. Azar. They have got to be able to move. That is what 
our proposals in Part D and Medicare Advantage have been about, 
is how do we create power against the pharma companies to get 
discounts. But with the competition of D and MA, you can still 
choose. If the patient doesn't like the approach that one plan 
is making, they can choose a different----
    Mr. Welch. Right, but there has got to be that balance.
    Mr. Azar. Yes, these are difficult calls, absolutely.
    Mr. Welch. Right, but what I am trying to say here is that 
we share the desire for the patient to get what the doctor 
thinks----
    Mr. Azar. Yes.
    Mr. Welch [continuing]. The patient needs. But we want to 
get overall cost savings. So let's work together to try----
    Mr. Azar. Absolutely.
    Mr. Welch [continuing]. To address that concern.
    The other thing is high-cost specialty drugs don't have any 
competition, and the PBMs don't have any leverage, what you 
were just talking about, to use competition to lower net 
prices. Would you be open to negotiation to lower drug prices 
in these cases where competition simply doesn't work?
    Mr. Azar. So I am happy to work with you on ideas that keep 
the patient at the center. We propose foreign reference pricing 
in Part B----
    Mr. Welch. Right.
    Mr. Azar [continuing]. Where we don't have a competitive 
mechanism for pricing. And we are happy to look at different 
approaches that create proxies for effective pricing there.
    Mr. Welch. OK. I yield back.
    But thank you very much, Secretary Azar.
    And I hope, Madam Chair, that we are able to make some 
concrete progress with our Republican colleagues on this.
    Ms. Eshoo. I agree with you.
    Now I would like to recognize the gentleman from Georgia, 
the patient Mr. Carter, for 5 minutes of questioning.
    Mr. Carter. Thank you, Madam Chair.
    And, Mr. Secretary, thank you for being here.
    Mr. Secretary, as you know, for the past four years, I have 
been the only pharmacist currently serving in Congress, and I 
currently remain the only pharmacist.
    Prescription drug prices have been something that is 
extremely important to me and something that I have 
concentrated on. And I want to thank you for your work, and 
thank you, and your staff, in particular, particularly John 
O'Brien, who has done an outstanding job in helping us.
    This is something you are familiar with. You are familiar, 
having been a CEO of a pharmaceutical manufacturer, and that 
certainly gives you a unique insight. But I have dealt with it 
in over 30 years of practicing pharmacy and seeing the 
evolution of the middleman, of the pharmacy benefit managers, 
the PBMs, and the abuses that I feel like that they have had 
over the years.
    And now, the administration is finally addressing that. I 
can't tell you how much that means. And, Mr. Secretary, I feel 
like this will be your legacy, and I think it is an honorable 
legacy. And I want to thank you for that, and this 
administration as well, as was mentioned. This administration 
has made this a top priority, and I think it will be one of 
their legacies. There could not be a more honorable legacy, in 
my opinion, after having practiced pharmacy for 30 years and 
seeing the impact that high prescription prices has on people.
    I have seen it at the front counter. I have witnessed it. I 
have seen senior citizens have to make a decision between 
buying medicine and buying groceries. I have seen mothers in 
tears because they couldn't afford medications for their 
children. This is very serious and something that is 
bipartisan.
    Representative Schrader mentioned earlier a bill that we 
are working on in a bipartisan fashion, the BLOCKING Act, that 
will be brought up next week. That is something that is very 
important. We have to do away with the abuse of the generic 
manufacturers to delay this system like this.
    Two things have been proposed by HHS. One has to do with 
DIR fees. DIR fees are atrocious. Two weeks ago, I got a text 
from a pharmacist who showed me where they had been charged, 
his pharmacy has been charged over $300,000 in DIR fees for the 
year. Only this morning, I got another text from a pharmacist 
who owns seven drugstores, $500,000 in DIR fees. Mr. Secretary, 
you can't stay in business in that kind of business model. It 
is just not feasible.
    Moving the discounts to the point of sale, I have always 
said that the most immediate and most significant impact we can 
have on prescription drug pricing is to have transparency. This 
will help bring about transparency. Only this morning, United 
Healthcare announced that they are going to move this into the 
private sector as well. This is exactly what we need. This is 
exactly what we have been fighting for. That is why I want to 
thank you for this.
    I find it interesting that, in the rebate rule, that HHS 
and OIG, they have asked for three different scores. That is a 
little bit unusual, isn't it? Can you explain what has come 
about with that?
    Mr. Azar. Yes, absolutely. So the reason there are multiple 
scores in the proposed rule--and we wanted to be transparent 
about it, so we published them--is our actuary from CMS came 
out with a score. And you are trying to predict the behavior of 
private market actors, and I am sorry, actuaries are well-
meaning, but they don't predict how businesses and private 
actors will behaviorally change. You all see that with CBO and 
so-called lack of dynamic scoring around legislation. We have 
the same issue on regulations.
    And so, we wanted to get these different perspectives of 
what might happen in the marketplace. I firmly believe that, if 
we can work together to get this rebate rule out, we will bring 
$29 billion of savings to seniors at the point of sale at 
pharmacies, starting January 1st. And I believe that we will 
keep premiums stable in Part D because it is a highly-sensitive 
marketplace to premium, and I believe the Part D plans will 
manage that effectively. I think it will get list prices down. 
It is, I think, the best tool we can have to completely change 
how drugs are priced in this country for the benefit of our 
citizens.
    Mr. Carter. I couldn't agree with you more, Mr. Secretary. 
I just thank you for that and thank you for your efforts in 
this. And I hope you will continue on with this. This is 
exactly the route we need to be taking and exactly the 
direction we need to be having.
    Moving very quickly to the 340(b) program, look, we don't 
want to end the 340(b) program. It is a good program, but it 
needs some guardrails on it, and we understand that. And that 
is what we are trying to do, is just tighten it up, get some 
accountability, some transparency, make sure it is going where 
it was supposed to be going. We are not saying that anybody is 
cheating. We are just saying that it is not being done in the 
way that we intended it to be done. Your comments on that?
    Mr. Azar. We would love to be a partner with Congress and 
this committee on how we can bring that kind of transparency, 
oversight, and keep 340(b) effective for the purposes it was 
intended.
    Mr. Carter. Thank you, Mr. Secretary. Again, I want to 
thank you for your work, thank your staff for their work, the 
administration for this. This is about the patient. This will 
bring about lower cost for patients. It will bring about more 
accessibility, more affordability, and better healthcare in 
America. Thank you, Mr. Secretary.
    Mr. Azar. Thank you.
    Ms. Eshoo. I thank the gentleman. I now am pleased to 
recognize Mr. Ruiz from California for 5 minutes of 
questioning.
    Mr. Ruiz. Thank you. Thank you, Madam Chair.
    Secretary Azar, I am an emergency physician. And from the 
Coachella Valley farm worker community where I grew up to the 
hospitals where I worked as an emergency medicine physician, to 
the alleys and parks where I practiced street medicine, I have 
seen so many examples of how inadequate access to healthcare 
has devastated families, communities, and local economies.
    Passage of the Affordable Care Act, including Medicaid 
expansion, has dramatically improved access to care. According 
to California Healthcare Foundation, Medicaid enrollment in the 
Inland Empire region of California, where my district resides, 
increased by 57 percent in less than two years after Medicaid 
expansion.
    Instead of enacting policies that would shore up healthcare 
coverage, this administration has worked to undermine the ACA. 
In addition to selling junk health plans, dramatically rolling 
back enrollment outreach efforts, and refusing to make cost-
share reduction payments, this budget continues to try to 
repeal the ACA, turns Medicaid into a block grant program, and 
imposes barriers like Medicaid work requirements.
    In my district and across the nation, the effects of the 
budget would result in increased premiums, increased out-of-
pocket costs for consumers, and more people without insurance. 
According to data from Georgetown University, in my district 1 
in 4 adults are covered by Medicaid and 58 percent of children 
are covered by Medicaid or CHIP. Cutting this coverage is 
unacceptable, and I will stand up for my constituents and the 
millions of Americans across the country that rely on these 
programs.
    In addition, Secretary Azar, I would like to discuss the 
administration's final rule on the Title X family planning 
program issued late February that would make it more difficult 
to access essential services like birth control, HIV and STD 
testing, women's and men's healthcare, and pregnancy testing 
for individuals in underserved areas. This rule would directly 
hurt four Title-X-funded health centers in my district and 
thousands of my constituents who are served by them, often in 
underserved areas.
    Let me explain. The final rule prohibits Title X providers, 
like those in my district, from referring their patients for 
abortion services, despite being allowed under current law and 
even if the patient specifically requests it. Never mind that 
Title X already cannot fund any abortion. But that means 
doctors won't be able to provide the best medical advice to 
their patients.
    It also requires all Title X grantees to have strict 
financial and physical separation from any activities that fall 
outside the program scopes. That means a facility where 97 
percent of the services are for prevention, cancer screenings, 
oral contraceptives, STD screenings, would not be able to 
receive Title X funds. They would have to, in order to receive 
these funds, build an entirely different facility, which is 
costly, cost-prohibitive, and they wouldn't be able to do that. 
What most likely will happen, if this is allowed to go forward, 
is these clinics will shut down, making breast exams, pap 
smears, and other critical healthcare services unavailable for 
those who need it.
    So I want to get your sense, Secretary Azar. Do you believe 
that the Title X program has successfully served as a source of 
critical, preventative care for patients?
    Mr. Azar. The Title X program is very important. It 
provides important resources, contraceptive and comprehensive 
family planning for individuals. And that is why we fully 
funded it.
    Mr. Ruiz. Great.
    Mr. Azar. But we also want to ensure the fiscal integrity 
of the program.
    Mr. Ruiz. So let me ask you, then why has the 
administration chosen to move forward with changes to the 
program that would drastically alter how the current program 
operates and how patients can receive care?
    Mr. Azar. By definition, in the example you just gave, 
Federal taxpayer money is being used to support the provision 
of abortions. It is subsidizing that. If they wouldn't be able 
to run that business independently, absent our Title X money, 
it means that we are subsidizing that.
    Mr. Ruiz. But those monies cannot go towards abortion.
    Mr. Azar. Then they should be able to separate----
    Mr. Ruiz. Those monies help for breast exams, pap smears, 
and other preventative services. That is what they use those 
monies for. It is illegal for them to use that money for 
abortions.
    Can you explain why you believe that withholding necessary 
information from patients, from doctors, even when specifically 
requested, even if a patient specifically requests, ``What are 
your referrals? Where can I go if I am considering an 
abortion?'', et cetera, is appropriate under medical ethics?
    Mr. Azar. So under the final rule, we allow, as the statute 
allows, non-directive counseling, including related to 
abortion, and the provider is allowed to provide a list of 
service providers, including those that do provide abortions, 
but they are not allowed to just pick up the phone and actually 
directly refer them over.
    Mr. Ruiz. OK. Do you believe this rule will increase access 
to care for patients served by Title X?
    Mr. Azar. I think we actually may see an influx of 
additional providers willing to come in and be part of Title X. 
And these are fiscal integrity provisions----
    Mr. Ruiz. So in terms of access, in terms of a young 
woman's ability to get their pap smears going to an underserved 
area where the only providers are those receiving Title X 
funds, 98 percent of the services are for oral contraception, 
family planning, counseling, and breast exams, as well as pap 
smears, et cetera, for cancer prevention, you think by 
defunding them or making it hard for them to function in their 
clinic, when they are the only clinic in that community, is 
going to increase healthcare access for women?
    Mr. Azar. Not allowing them, through the Title X program 
affiliate, to support abortions----
    Mr. Ruiz. I would take that as a----
    Mr. Azar [continuing]. Shouldn't be a problem. It shouldn't 
impact their operations.
    Mr. Ruiz. But it will. That is the whole point of this 
conversation, is that it will. It creates barriers for those 
individuals who provide 98 percent of their services for basic 
primary care to deliver on those services.
    Ms. Eshoo. The gentleman's time has expired. It is an 
important conversation. Thank you, Mr. Ruiz.
    I would like to now recognize the gentleman from Montana, 
Mr. Gianforte.
    Mr. Gianforte. Thank you, Madam Chair.
    Secretary Azar, thank you for coming before the committee 
today.
    I want to note for the record that, after hours of 
testimony, you look fresh and energetic. I appreciate your 
endurance.
    I have four topics I want to touch on quickly, if I could. 
Many in Montana, especially our rural communities, struggle 
with meth and opioid abuse. The rural nature of Montana makes 
it challenging to ensure these individuals have access to 
treatment. The President's budget request $120 million for the 
Rural Communities Opioid Response Program, which supports 
treatment and prevention of all substance use disorders in the 
highest-risk rural communities. Could you touch briefly on how 
this program will help focus resources on reducing meth and 
opioid abuse, particularly in underserved communities?
    Mr. Azar. Absolutely. Thank you.
    And we are very concerned about not just the opioid issues, 
but any type of substance use disorder, especially in our rural 
areas. So that is why the program, Congress, on a bipartisan 
basis, enacted with the Rural Communities Opioid Response 
Program last year is so important. In '95, one year, our core 
planning awards were made to support rural communities to 
identify opioid use disorders in their communities and develop 
plans to resolve these issues. And we are going to introduce 
additional awards in FY 2019 that we hope will yield large-
scale organizational and infrastructure improvements at the 
rural and State level. And we also were going to develop a 
program just for rural and critical access hospitals, as well 
as Medicaid-certified rural health clinics, in an effort to 
expand MAT in rural communities.
    Mr. Gianforte. Yes. OK. Thank you. And our office stands 
ready to help----
    Mr. Azar. Thank you.
    Mr. Gianforte [continuing]. Particularly with rural.
    I want to switch topics. Suicide is among one of the 
leading causes of death in the United States, exceeding the 
rate of death for car accidents. Unfortunately, Montana has the 
highest rate of suicide per capita in the country. What is the 
administration doing to help us reduce the deaths from suicide?
    Mr. Azar. Yes. So on serious mental illness and mental 
healthcare, we have invested, I believe it is over a billion 
dollars in the budget that is dedicated towards serious mental 
illness. Suicide, as you know, is the 10th leading cause of 
death for adults, the second leading cause of death for our 
youth. As SAMHSA, our largest mental health program, the 
Community Mental Health Services Block Grant, actually provides 
formula funding to enable States for serious mental illness and 
emotional disturbance. The Community Mental Health Services 
Block Grant is funded at $722 million. Our total mental health 
budget is actually $1.506 billion just in SAMHSA. And our 
suicide prevention program is $74 million. And another very 
interesting program is the Assertive Community Treatment for 
Adults with Serious Mental Illness. That is actually increased 
to $15 million, allows a much more interactive approach to 
individuals who are facing risk of mental illness and suicide.
    Mr. Gianforte. OK. I appreciate your attention there. It is 
critically important to us back in Montana.
    Switching topics again, 18 percent of Montanans are over 
the age of 65. Your budget would allow these seniors to expand 
their ability to have health and medical savings accounts. 
These are options that are widely supported and encourage 
people to save for their healthcare needs. Can you just briefly 
detail how this works and why it is a good idea?
    Mr. Azar. So what we want to do is expand the ability of 
individuals to use tax-free savings to assist them in building 
the healthcare that they want. So for instance, in our health 
savings account proposal, we want to allow you to save more 
money. We want to allow the health savings account to be used 
not just for high-deductible plans, but really any plan that 
achieves a 70 percent actuarial evaluation. It is a technical 
insurance term. But it basically would allow HSAs to be used 
more frequently, expanding the use of, I think the old Archer, 
the Medicare Savings Accounts, to expand. It has been a fairly 
small program. We want to just create more options, especially 
in rural areas, and to take the money and be able to seek out 
alternatives that meet your needs.
    Mr. Gianforte. My last question, and you will be happy to 
hear it is a yes/no question, an easy one. Montana farmers grow 
a diverse range of crops. Last Congress I signed onto a bill 
that would allow industrial hemp farming. And the bill was 
signed into law as part of the farm bill. Now that hemp is 
legal, I am glad that the FDA has begun thinking about how to 
regulate CBD. Dr. Gottlieb had stated that the FDA planned to 
hold a public meeting on CBD regulation in April. Is the FDA 
still planning on having this hearing now that we have had a 
change in leadership?
    Mr. Azar. Yes.
    Mr. Gianforte. OK.
    Mr. Azar. Yes.
    Mr. Gianforte. So that is still going to occur?
    Mr. Azar. It is. It is an important issue. We have got to 
figure out how we deal with CBD oil and the constituent element 
issues around marijuana. So absolutely, yes.
    Mr. Gianforte. Great. Well, I want to thank you once again 
for your hard work. We have to work together across the aisle 
to get healthcare costs down and maintain access, and I 
appreciate your leadership.
    And with that, I yield back.
    Ms. Eshoo. I thank the gentleman. Now it is a pleasure to 
recognize the gentlewoman from New Hampshire, a new member of 
Energy and Commerce and the Health Subcommittee, Ms. Kuster.
    Ms. Kuster. Thank you very much, Madam Chair.
    And thank you, Secretary Azar, for your patience with us. 
This has been a long day for all of us.
    The ACA helped millions of Americans enroll in affordable 
comprehensive coverage. The law, Section 1332, provides States 
with the flexibility to experiment with health reforms, but the 
law makes clear that States seeking 1332 waivers must provide 
comprehensive affordable coverage to a comparable number of 
residences under the ACA.
    I have a few yes-or-no questions on 1332 waiver guidance. 
Simply yes or no, are you aware that the guidance could 
substantially raise costs for Americans with preexisting 
conditions?
    Mr. Azar. The guidance is guidance. We would have to see an 
individual request from a State. Nothing in the guidance 
changes the ACA. It just says that to States, please come in 
with plans if you want to enroll.
    Ms. Kuster. Well, these would be preexisting conditions. If 
they did not have coverage, would you agree that it would be 
more expensive?
    Mr. Azar. We are not able to approve any plans that waive 
preexisting conditions coverage under 1332. I think that is 
rock solid, is my understanding.
    Ms. Kuster. Are you aware that the guidance could 
substantially increase consumers' out-of-pocket costs and 
monthly premiums?
    Mr. Azar. The guidance cannot do that. A State plan would 
have to come in with a request, and that would certainly be 
something that we would evaluate as part of that process. The 
guidance is simply saying to States, you can come in with 
plans; we will look at them. There is no commitment to 
approve----
    Ms. Kuster. Well, would you acknowledge that insurance 
companies could substantially reduce the benefits that the 
product would cover?
    Mr. Azar. I don't know that, under 1332, we are able to 
waive the essential benefits coverage. I would have to check on 
that to get back to you on that.
    Ms. Kuster. Do you think it is appropriate to spend 
taxpayer dollars on junk insurance plans rather than 
comprehensive coverage for Americans?
    Mr. Azar. So one Washingtonian's view of junk could be to 
somebody in rural New Hampshire their lifeline of some form of 
insurance that they couldn't afford. Twenty-nine million 
Americans still are lacking insurance, and we are trying to 
make other options available for people. Short-term, limited-
duration is one, expansions to HRAs. No one has talked about 
this, which could actually add 10 million people into the ACA 
exchanges through the HRA regulation that we have proposed. So 
we are just trying to make more and more options available, so 
people can choose----
    Ms. Kuster. Well, can you explain why HHS has sidestepped 
the full rulemaking process in promulgating its guidance?
    Mr. Azar. Yes. The 1332 guidance was promulgated actually 
using, I believe, the identical processes that the Obama 
administration used in putting out their 1332 guidance.
    Ms. Kuster. Did your Department's general counsel provide a 
legal opinion on the guidance, including on the statutory 
guardrails and whether the guidance should be subject to the 
APA?
    Mr. Azar. I don't know, but I presume so, because any 
action coming out would normally be subjected to legal review. 
But it was put out exactly the same as Obama put out.
    Ms. Kuster. Will you commit to sharing this analysis with 
the committee? I am focused on your administration. Would you 
commit to sharing this analysis with the committee?
    Mr. Azar. We will look at it and determine if it is 
appropriate to share in terms of privilege.
    Ms. Kuster. And you will get back to the committee on that?
    Mr. Azar. Absolutely.
    Ms. Kuster. And the statutory text is clear that a State 
waiver must meet these four guardrails specified in the law. Do 
you agree that any State waiver has to meet the guardrails 
specified in statute in order to be approved by your 
Department?
    Mr. Azar. Well, of course. We have to act consistent with 
the statute, and we will do so.
    Ms. Kuster. And if a State submitted a waiver application 
that would provide less comprehensive or less affordable 
coverage to its State residents, would your Department approve 
it?
    Mr. Azar. I think we laid out in the guidance an 
alternative way of looking at the comprehensiveness aspects. 
What we found was that the previous administration had so 
interpreted the comprehensiveness aspects that no States were 
actually, whether red, blue, whatever, were willing to come in 
with requests because it was so confining and lacking in 
flexibility, and we thought violated the 1332----
    Ms. Kuster. Well, will you commit to upholding the law and 
only approving 1332 waivers that meet the guardrails specified 
in the statute?
    Mr. Azar. We certainly will only do so to meet the 
guardrails in the statute. We may in candor, though, you and I, 
our administrations may differ on what it means in terms of, 
what it may mean in terms of the comprehensiveness.
    I just want to correct something, if I could. Essential 
health benefits are actually waivable in the guidance. I 
misstated that. I mis-recollected. So I do want to clarify. I 
have been informed that essential health benefits would be 
waivable, and that is why it opened the door to short-term, 
limited-duration plans.
    Ms. Kuster. OK. I am going to switch gears now, if I could 
reclaim my time.
    Mr. Azar. Sorry. Sorry for the error there.
    Ms. Kuster. Is it true that your request in the budget cuts 
$52 million from the SAMHSA mental health programs?
    Mr. Azar. There may be a part of it that does, that does 
cut a part of the program that we find less effective.
    Ms. Kuster. And $31 million from substance abuse treatment 
programs?
    Mr. Azar. Well, I mean, we can play these games. There is 
$1.5 billion of serious mental illness and mental health 
programs within SAMHSA that we are requesting funding in the 
budget.
    Ms. Kuster. But, for example, the ONDCP has been cut 
completely? Or that is funded?
    Mr. Azar. First, ONDCP is not part of SAMHSA. What happened 
is, the one program which SAMHSA already administered, I 
believe the funding for that was actually moved over to SAMHSA 
to regularize how that is administered. I believe that was----
    Ms. Kuster. I am sorry, my time is over. I am just trying 
to follow this bouncing ball, because I think SAMHSA actually 
is losing over $160 million for this program, with this trick 
of moving the ONDCP funding.
    But I yield back.
    Ms. Eshoo. I thank the gentlewoman. I am now pleased to 
recognize the gentleman from Missouri, Mr. Long, 5 minutes for 
questioning----
    Mr. Long. Thank you, Madam Chairwoman. Thank you.
    Ms. Eshoo [continuing]. And a few seconds of something 
lighthearted.
    Mr. Long. I'm sorry?
    Ms. Eshoo. And a few seconds of something lighthearted.
    [Laughter.]
    Mr. Long. I will tell you, it has been a long day. I will 
tell you that. I don't know how much of that I have got in me 
right now.
    But I had another subcommittee hearing most of the day, why 
I was late getting in here, and I hope I don't repeat anything 
that was said earlier.
    But, Secretary Azar, I want to thank you for being here 
today. And I understand you have been here some four hours now. 
I want to commend you for all your hard work from all of us 
that you do.
    And I also want to recognize President Trump for proposing 
a fiscally-responsible budget which reflects the reality of the 
Budget Control Act. Can you detail what your priorities are and 
how you worked to restrain spending, in light of the current 
law?
    Mr. Azar. Thank you very much, Congressman.
    As you know, we are trying to submit a budget that complies 
with the cap's agreements. We have submitted a budget that 
tries to comply with the caps, the budget caps, that the 
Congress and President Obama actually put into statute. And so, 
to do that, it requires tough choices.
    So the prioritization that we used in looking at our 
budget, working with OMB and the White House, has been, first, 
fiscal discipline. So make sure that we are contributing across 
the board to the overall functioning of the budget. The second 
is ensuring responsible stewardship of taxpayer dollars. We 
actually eliminate 90 programs that we find to be ineffective 
or less effective than others, supporting and prioritizing 
direct service delivery. So where are we actually providing 
healthcare or human services to people as opposed to capacity-
building, and providing flexible funding to States and others, 
rather than just categorical programs. So those would be some 
of the ways.
    Obviously, there are some other areas like opioid funding 
that we have prioritized, ending the HIV epidemic that we have 
really prioritized funding, and bioterrorism preparedness, of 
course.
    Mr. Long. Yes, I always say that, of the 435 congressional 
districts, there is 435 of us that will swear that our district 
has the worst opioid epidemic in the country. So it is a huge 
problem.
    As you are well aware, the Community Health Center Fund 
expires on September 30, 2019, and the budget proposes to 
continue funding them at $4 billion in mandatory resources for 
each of the fiscal years 2020 and 2021. How do Community Health 
Centers serve as a gateway to integrated care for individuals 
for mental illnesses and substance disorders?
    Mr. Azar. The Community Health Center Program is absolutely 
vital to our efforts around substance use disorder, mental 
health, primary care provision. So, as you mentioned, the 
budget that we have on the Health Center Program, in that 
budget, in the FY 2020 proposal, we continue the $544 million 
of ongoing annual investment and expanded mental health and 
substance use disorder services related to the treatment, 
prevention, and awareness of opioid abuse, which were initially 
awarded in FYs 2016 through 2019.
    Mr. Long. OK. Community Health Centers are increasingly 
using telehealth, which is very important to rural districts 
like mine, to better meet patients' needs, especially in those 
rural areas where residents face long distances between home 
and healthcare providers, and sometimes it is just not worth 
it. The elderly don't want to drive 70 miles to get services, 
or 100 miles, or whatever the case may be. Do you see the value 
in allowing more use of telehealth in health centers?
    Mr. Azar. I am passionate believer in telehealth, 
especially as part of how we need to bring services to rural 
areas and other underserved areas. The HRSA Telehealth Network 
Grant Program is part of that, which provides funding. But we 
want to keep working with Congress to find other ways to help 
address the rural healthcare crisis in the country and the 
underserved crisis. Telehealth has to be a part of that.
    Mr. Long. HHS developed the reimagine HHS plan to increase 
the efficiency of the Department. Could you talk a little more 
about this plan and how it can improve the functioning of HHS's 
programs?
    Mr. Azar. Thank you very much. So with Reimagine HHS, what 
we did is, it is essentially taking the President's management 
agenda and looking at this $1.3 trillion agency with 80,000 
people, and we talk to our career people. I have got just 
tremendous respect over the two decades that I have been around 
HHS and the career officials we have at our Department. And we 
did a bottom-up process asking them, if you could run HHS 
differently, what would you do differently?
    And so, first, we want to make HHS the best place to work. 
We want high employee engagement. We want people to feel very 
fulfilled in the important mission of our work.
    We want to improve NIH's operations. So part of Reimagine 
HHS is to create, essentially, regional hubs within NIH where 
we can optimize several platform services there, not a single 
service provider for all of NIH, but create some collaborative 
hubs that will save money and, hopefully, improve efficiency 
and improve quality.
    We want to reform our acquisition processes, so that we can 
buy smarter.
    Just a couple of examples of good common-sense ways to run 
a massive department better using the genius of our own career 
people.
    Mr. Long. OK. I am going to have to stop you there. I don't 
have any time left, but if I did, I would yield it back.
    Ms. Eshoo. That was generous.
    [Laughter.]
    He is known for his generosity.
    The patient gentlewoman from Illinois, Ms. Kelly----
    Ms. Kelly. Thank you, Madam Chair.
    Ms. Eshoo [continuing]. Robin Kelly.
    Ms. Kelly. Thank you.
    I think we can all agree that, regardless of political 
affiliation, we should all want to ensure that children have 
access to healthcare. After years of decline, recently, the 
number of uninsured children in this country has been 
significantly increasing. In 2017, the first year of the Trump 
administration, according to the American Community Survey 
conducted by the Census Bureau, the number of uninsured 
children increased by 276,000. And according to HHS's data, in 
2018, the number of children enrolled in Medicaid and CHIP 
declined by nearly 600,000. There is no data showing that the 
number of children enrolled in private health insurance 
coverage increased by 600,000 over the same period. So it is 
pretty clear that hundreds of thousands more children will be 
uninsured.
    Since all of this is happening on your watch, I have a 
couple of questions. Your CMS Administrator, Seema Verma, likes 
to say that Medicaid will always be around for those who truly 
need it. But, according to these numbers, there are a 
significant number of children who are losing health coverage 
under Medicaid and CHIP, and many children going uninsured.
    Secretary, just yes or no, are low-income children included 
in your definition of those how truly need Medicaid?
    Mr. Azar. Absolutely. They are one of the core populations 
of Medicaid, of course, as well as our SCHIP program. 
Absolutely, the low-income children are a core of that, of the 
traditional--I mean, that is part of what we want to do, is 
really make sure we are not losing our focus on some of the 
core populations Medicaid was built for, and low-income 
children, absolutely.
    Ms. Kelly. What does the President's budget propose to stem 
the increase and return uninsurance rates among children to the 
historically low rate that the President inherited in 2016?
    Mr. Azar. So we haven't, to my knowledge--and if we have, I 
would like to know; if there is something that we have done in 
regulation, or otherwise, in Medicaid that is impacting that 
and access to Medicaid for low-income children, please let's 
talk about that.
    Ms. Kelly. OK.
    Mr. Azar. I would like to know that.
    Ms. Kelly. OK.
    Mr. Azar. And then, we can build interventions around that. 
So I would like to solve the problem. I am glad you are 
highlighting this for my attention, and I am happy to work with 
you on that.
    Ms. Kelly. OK. We would love to.
    In some States, you have approved waivers to take away 
health coverage from parents who failed to work a certain 
number of hours each month. We know from research that, when 
parents have health insurance, their children are more likely 
to be covered. Another yes-or-no question. Can you guarantee 
that no children will be affected by their parents' coverage 
loss in those States?
    Mr. Azar. Children should not be impacted by any of the 
work requirement or community engagement programs that I am 
aware of in terms of the waivers that we have granted. Even if 
the parent were to come off, they would have been qualified as 
able-bodied under Medicaid expansion populations. I want to 
double-check on that, though, if I could get back to you there. 
I would be very surprised if that would impact child coverage, 
but I just want to make sure that I am being accurate with you. 
If I could get back to you on that, to be sure----
    Ms. Kelly. I would appreciate it.
    Mr. Azar [continuing]. If you don't mind?
    Ms. Kelly. And just changing a little bit, I was asked by 
some young people to ask this. Menthol cigarettes have had a 
particularly devastating impact on young African-Americans. 
Seven out of ten African-American youths smoke menthol 
cigarettes. You prohibit tobacco companies from using cherry, 
strawberry, and other flavors to attract kids. It has been four 
years since the FDA announced that it would issue a proposed 
rulemaking on menthol. Can you assure me the FDA will soon 
issue a proposed rule to prohibit menthol cigarettes?
    Mr. Azar. So I share your concern about menthol as an 
additive in tobacco. I share the public health concern about 
attractiveness, especially in the African-American community, 
and some of the data that we've seen around possible fostering 
of addiction or attractiveness there. We want to make sure we 
are gathering all the public health information on this. And 
so, I do anticipate that we continue to run processes to learn 
here. I don't know that the first step would be a regulatory 
action as opposed to initiating a process to make sure we get--
we have to build the public health base very solid with 
evidence on rulemakings in that space.
    But I know your concern. I share your concern. Commissioner 
Gottlieb shares that concern. He addressed that in some public 
comments he made recently. And so, we want to keep moving on 
that. But I don't know the exact mechanism that the next one 
would be.
    Ms. Kelly. I will report your answer back.
    Mr. Azar. Thank you.
    Ms. Kelly. I yield back the rest of my time.
    Ms. Eshoo. OK, let's see. Now I would like to recognize the 
gentlewoman from California, a new member of the full committee 
and this subcommittee, Ms. Barragan.
    Ms. Barragan. Thank you, Madam Chairwoman.
    Mr. Azar, thank you for being here today.
    Have you had a chance to visit the Homestead detention 
facility in Florida?
    Mr. Azar. I have, yes.
    Ms. Barragan. When was that?
    Mr. Azar. It would have been about a month or a month and a 
half ago that I visited.
    Ms. Barragan. Do you remember when you visited the 
facility, roughly, how many children were being housed there?
    Mr. Azar. Actually, I may have that information. It should 
have been relatively stable. I don't have the actual census in 
front of me now. I don't want to speculate on a number.
    Ms. Barragan OK.
    Mr. Azar. I just don't have that in front of me at the 
moment.
    Ms. Barragan. And the Homestead facility, it is a temporary 
shelter, is that correct?
    Mr. Azar. It is what we call a temporary influx shelter. 
What we do, because the inflow of unaccompanied alien children 
across the border is so unpredictable, we build permanent 
shelters.
    Ms. Barragan. Right, but this is a temporary one?
    Mr. Azar. And we have temporary influx to give us flux 
capacity, but we keep working to try to add permanent capacity, 
because we would much prefer permanent capacity to temporary 
influx, absolutely.
    Ms. Barragan. OK. So when it is temporary, there is no 
requirement to get a license from the State of Florida, is that 
correct?
    Mr. Azar. So the temporary influx shelters are not subject 
to State licensure, but they are subject to all of ORR's 
regulatory requirements, yes.
    Ms. Barragan. Well, the permanent facilities have different 
requirements, is that right?
    Mr. Azar. A permanent facility actually does have to be 
licensed by the State----
    Ms. Barragan. OK.
    Mr. Azar [continuing]. As a temporary influx to be----
    Ms. Barragan. I just want to make sure we are clear. The 
permanent facilities actually do have regulations that are 
followed. The temporary ones don't have to follow those same 
regulations as the permanent ones?
    Mr. Azar. They do not have to be State licensed. They still 
have to follow all of the ORR's regulatory and practice 
requirements for----
    Ms. Barragan. Right, and they are different. I just want to 
note for the record----
    Mr. Azar. And they are subject to Florida's regulatory----
    Ms. Barragan [continuing]. That they are different, and a 
temporary has different requirements than a permanent one?
    Mr. Azar. That is correct.
    Ms. Barragan. OK. Why are we running emergency unlicensed 
facilities when there has been no unexpected surge of 
unaccompanied minor arrivals?
    Mr. Azar. No unexpected surge? We have had 120 percent 
unaccompanied alien children coming into this country in 
February over last year. I am sorry, we are in a crisis. We----
    Ms. Barragan. There is no surge, though, sir. If you take a 
look at your own numbers, in February 26, 2019, I was told 
there were 1600, per your own--actually, it is your own release 
that I have here. Sixteen hundred unaccompanied minors were 
housed there. There have been many, many more in the past, and 
there has been no surge to really need a temporary facility in 
which children really are being treated differently.
    Let me ask you, Mr. Secretary, about your visit when you 
were there. When you visited there, did you get to see the 
rooms that are really cold, where immigrants are being packed 
like sardines there? Did you see that when you were there?
    Mr. Azar. I saw dormitory rooms that had, I think there 
were 10 beds in the rooms, that had air conditioning. You are 
in southern Florida. They had air conditioning.
    Ms. Barragan. So did you not see----
    Mr. Azar. Sometimes the kids do complain that we keep the 
temperature a little cold.
    Ms. Barragan. Sir, I am asking you a very specific 
question. In your assessment when you went to go see there, did 
you see children being packed into these cold rooms?
    Mr. Azar. Of course not.
    Ms. Barragan. So you did not see what other people are 
seeing? You did not see 70, up to 250, kids in these rooms?
    Mr. Azar. Oh, so if what you are referring to is not the 
dormitory, the age 17 part of the facility on, I think it is 
the north campus, does have congregate living for the 17-year-
olds, I believe it is. And they are in a large, open area. And 
interestingly, I asked about exactly the thing you are asking. 
And what I was told--it may be incorrect--was that the kids 
actually prefer, that 17-year-olds actually prefer that more 
open, congregate setting, social setting.
    Ms. Barragan. Do we let the kids decide if they want to--
how they want to sleep? My understanding is that, beforehand, 
most kids would sleep in rooms of 12. Now you have children in 
these large rooms that sleep up to 70 to 250 kids. From my 
reports that I have seen, it is inhumane, the way kids are 
being treated there. It is inhumane that they are being 
situated there. They are certainly not a family setting. Would 
you say it is a family setting there?
    Mr. Azar. I would just dispute inhumane. I met with the 
student council representatives and----
    Ms. Barragan. Do you feel like it is a family setting 
there? Everything I have heard is that it is like a prison. And 
the kids, they form lines and----
    Mr. Azar. I have got to tell you, you know, these--I hope 
I----
    Ms. Barragan. Do you think that is an inaccurate 
assessment?
    Mr. Azar. It disgusts me when people refer to the grand----
    Ms. Barragan. Mr. Secretary, I am just asking you a very 
simple question.
    Mr. Azar. We are talking there----
    Ms. Barragan. Do you think it is like a prison setting or 
do you disagree?
    Mr. Azar. No, I do not. No, I do not.
    Ms. Barragan. You do not think it is like a prison setting?
    Mr. Azar. No, I do not.
    Ms. Barragan. OK. I want to ask you really quickly, sir, 
because I know my time is expiring here, do you agree that 
anytime that a child is abused in the care of ORR, that is one 
too many children?
    Mr. Azar. Any child abused is one too many children abused, 
absolutely.
    Ms. Barragan. OK. There have been reports of thousands of 
children who have had sexual abuse incidences in ORR custody. 
Do you know of any where there have been against staff?
    Mr. Azar. I am sorry, where what? Any where?
    Ms. Barragan. Any complaints where they have been against 
staff?
    Mr. Azar. Against staff?
    Ms. Barragan. Yes.
    Mr. Azar. Against ORR staff?
    Ms. Barragan. Yes.
    Mr. Azar. Absolutely not. ORR doesn't----
    Ms. Barragan. You don't know of one incident?
    Mr. Azar. ORR itself does not take care of the children. We 
have nonprofit grantees who take care of children.
    Ms. Barragan. But they are under your----
    Mr. Azar. No, but you asked about ORR staff. The grantees, 
we have received in the past four years over 4,000 complaints, 
including in the Obama administration, about a thousand sexual 
misconducts. Of those, 178 over four years involved allegations 
of children regarding staff members, adult-minor sexual abuse, 
all of which are reported to authorities and investigated. We 
will actually be putting a report out soon showing a very high 
rate of those being unsubstantiated, but we take each one 
deadly seriously, absolutely,
    Ms. Barragan. Well, they are under your jurisdiction, sir.
    Ms. Eshoo. The time has expired. I thank the gentlewoman. 
And now, I would like to recognize the gentlewoman from 
Delaware, Ms. Blunt Rochester, for 5 minutes of questioning.
    Ms. Blunt Rochester. Thank you, Madam Chairman.
    And thank you, Secretary, for being before our subcommittee 
today.
    Mr. Secretary, I get a lot of visits in my office. Even as 
recent as today, I had folks come in from the American College 
of Obstetrics and Gynecology. I had women from the sorority 
Delta Sigma Theta. There is a lot of concern, No. 1, about the 
budget proposals, everything from NIH funding to Medicare and 
Medicaid cuts.
    But one of the big things that people focused on was the 
real rollbacks to the Affordable Care Act and what people have 
witnessed as, from day one, actions that the administration and 
your Department have taken that have made it much harder for 
Americans to access and afford the vital health insurance 
coverage that they rely on.
    The administration has undermined the health insurance 
market by cutting off cost-sharing reductions, gutting ACA 
marketplace enrollment periods and outreach, reducing funding 
for the Navigator program, while promoting the sale of short-
term, limited plans, also known as junk plans, which don't 
comply with the ACA consumer protections, don't provide 
adequate healthcare coverage or financial protections for 
families.
    And so, my question, the first question is, Mr. Secretary, 
your Department recently proposed a rule that would change the 
formula for the ACA subsidies. Your Department's own analysis 
acknowledges that the proposed policy would increase premiums 
for 7 million individuals and cause hundreds of thousands to 
lose coverage. Mr. Secretary, in deciding to propose this 
policy, did you consider the fact that it would increase 
premiums and out-of-pocket costs for millions of Americans? And 
that is just a yes-or-no question.
    Mr. Azar. I want to make sure I am understanding what you 
are asking about. I think you might be talking about the notice 
with the premium indexing? Is that what you are referring to? 
Because, with the notice on premium indexing, it had been 
indexed just to employer increases in premiums. We proposed, 
actually, index the premium contribution based on a metric that 
would include employer as well as the individual market 
premiums, as the basis for what the individual maximum required 
contribution towards insurance coverage is. So I think that is 
what you are referring to.
    Ms. Blunt Rochester. But is it correct that it would 
increase premiums for 7 million individuals?
    Mr. Azar. The indexing, by increasing the index, it would 
increase for some individuals.
    Ms. Blunt Rochester. So yes? So the answer is----
    Mr. Azar. I don't know the 7 million, but it would 
increase, yes, the indexing increases to account for that.
    Ms. Blunt Rochester. OK. So 7 million people.
    Mr. Secretary, your Department also requested comment on a 
policy that would end the practice of automatically re-
enrolling consumers in the marketplace. The Department 
acknowledges that 2 million Americans rely on automatic re-
enrollment. Approximately 2 million individuals could lose 
coverage if the Department terminates this policy. So you are 
basically getting rid of one of the easiest pathways for 
Americans to get health coverage.
    The Department has also made a concerted effort to make it 
more difficult for people to obtain coverage in the exchanges 
by drastically reducing funding for outreach and education 
activities, as we mentioned, gutting the Navigator program and 
limiting the time of enrollment, ultimately, giving consumers 
less opportunities and less time to make informed choices.
    Secretary Azar, can you commit to ensuring that Americans 
wishing to enroll in coverage are well-informed about the 
opportunities to enroll?
    Mr. Azar. I think they are, and we see those results, I 
believe, through the enrollment numbers, which show actually a 
fairly consistent pathway on enrollment numbers year over year. 
And we saw, I think, historic levels of 90 percent satisfaction 
with call center interactions. We didn't even have to use the 
waiting room in the call center, I think for the second year in 
a row. I think we are----
    Ms. Blunt Rochester. Well, I am just going to jump in for a 
quick minute because I don't have that much time. But I know 
that it has been a challenge for folks to do the outreach. And 
I know that the budget in the past was cut by 90 percent for 
marketing and outreach. And so, if you could share with us 
specifically, with that kind of cut, what do you propose to 
reach out to folks?
    Mr. Azar. So we have had that, consistent with last year 
and this year, we have had more limited Federal spending around 
outreach. And what we have done is relied on the private plans, 
who have every incentive to get people enrolled in their plans 
to do so. And we have seen very efficient and effective 
enrollment seasons where I believe they have stayed relatively 
consistent, certainly in light of economic indicators. And so, 
I think it is actually working. They are bearing the burden, as 
they should----
    Ms. Blunt Rochester. You mentioned, also, something about 
enhanced disclosure. I am sorry, I only have 10 seconds. For 
the so-called junk plans, can you talk about what does an 
enhanced disclosure actually mean?
    Mr. Azar. We have required that they very clearly disclose 
that this is not compliant with the Affordable Care Act EHB 
provisions.
    Ms. Blunt Rochester. It is just inconsistent to cut off the 
marketing and outreach, but at the same time you are 
acknowledging that you need enhanced disclosure and more 
information to people. So my goal is that we would really make 
it more available to people, easier for them to get automatic 
enrollments, and more time for people to make informed choices.
    And thank you for your patience as well, for being here.
    Ms. Eshoo. I thank the gentlewoman for her excellent 
questions. Now I would like to recognize the gentleman from 
Illinois, Mr. Rush, for 5 minutes of discussion. And then, we 
will be moving to the second round of questions, and there are 
designated members that will participate in that.
    Mr. Rush, 5 minutes.
    Mr. Rush. I want to thank you, Madam Chairman.
    Secretary Azar, studies have found that short-term, 
limited-duration health plans, often referred to as junk plans, 
engage in deceptive marketing tactics and insurance brokers who 
are selling these plans fail to provide consumers with detailed 
plan information.
    I would like to share a story that a patient, Sam Bochar, a 
29-year-old patient from Chicago wrote in a testimony submitted 
to this subcommittee earlier year at a hearing entitled, 
``Strengthening our Healthcare Systems: Legislation to Reverse 
ACA Sabotage and Ensure Preexisting Conditions Protection''.
    Sam enrolled in a junk insurance policy after an insurance 
broker misled him about the benefits covered under the plan. 
Sam had been experiencing back pain. After enrolling in a junk 
insurance plan, Sam was diagnosed with cancer. His insurer 
refused to pay for his treatment, claiming that the cancer was 
a preexisting condition that was not covered because, Sam 
should have known that cancer was the cause of his back pain. 
He was left with almost a million dollars in medical bills.
    Mr. Secretary, your Department acknowledged that consumers 
who purchase junk plans and, then, get sick or, quote,``develop 
chronic conditions could face financial hardship as a result''. 
End quote.
    Mr. Secretary, yes or no, do you think that it takes this 
country in the right direction to go back to the days when a 
policy could be rescinded if you get sick or you get declined 
for preexisting conditions? Yes or no?
    Mr. Azar. We don't believe that. We believe people should 
have the option to have their preexisting conditions covered. 
The short-term, limited-duration plans, though, are helpful for 
the 29 million Americans who got shut out of the Affordable 
Care Act market.
    Mr. Rush. Thank you, Mr. Secretary. All right.
    A study by the Georgetown University Health Policy 
Institute found that many consumers enrolling in these 
deceptive plans are led to believe they are purchasing 
comprehensive policies, what, in fact, they are not. Plain and 
simple, these plans are nothing but garbage. The same study 
found that brokers often fail to disclose to consumers the junk 
plans are not comprehensive coverage and would deliberately 
steer consumers toward junk plans. For example, brokers selling 
junk plans over the phone pressure consumers to quickly 
purchase these plans without providing written information, 
including information on the benefits covered.
    Mr. Secretary, are you aware and did you consider in 
rulemaking that these plans often engage in aggressive 
marketing, and that means people do not understand what they 
are buying? Yes or no?
    Mr. Azar. So yes, we enhanced the protections compared to 
what the Obama administration had around the short-term 
duration plans that they had in their rulemaking.
    Mr. Rush. Mr. Secretary, are you aware that insurers of 
these junk plans currently engage in the practice post-claims 
underwriting, as the insurance Commissioner of Pennsylvania 
testified before this subcommittee?
    Mr. Azar. These plans are subject to State law and 
regulation. So that would be that insurance Commissioner's 
issue on how to regulate these plans.
    Mr. Rush. Secretary Azar, someone with insurance should not 
have to worry about filing for bankruptcy or not having access 
to lifesaving treatment. These junk plans are not about 
consumer choice and freedom. These products are a risk to 
people's health and to their economic security.
    Thank you, and I yield back the balance of my time.
    Ms. Eshoo. As previously discussed with the minority, we 
will now move to a second round of questions, which the 
Secretary has agreed to, from three Democratic members and 
three Republican members.
    I now would like to recognize Ms. DeGette of Colorado. 
Let's see, how much time? Five minutes? I recognize her for 5 
minutes in this round.
    Ms. DeGette. Thank you very much, Madam Chair, for 
recognizing me.
    Mr. Secretary, as you know, I am the Chair of the Oversight 
and Investigations Subcommittee, and we had hoped to have you 
here for our hearing that we had on the border separations, but 
we are glad to have you now.
    I wanted to just ask you a couple of questions about the 
zero tolerance policy, instituted on April 6th, 2018, under 
which nearly 3,000 children were separated from their parents. 
Secretary Azar, were you consulted prior to the issuance of 
this policy or informed it was under consideration?
    Mr. Azar. I was not aware that that policy was under 
consideration before the Attorney General announced it on 
April--was it April 6th, or so?
    Ms. DeGette. Now wouldn't you normally be, since HHS has 
the Office of Refugee Resettlement which would be taking these 
children, wouldn't it be normal to consult HHS before 
instituting a policy like this?
    Mr. Azar. I would have hoped so.
    Ms. DeGette. But they didn't talk to you beforehand?
    Mr. Azar. Not to me, no.
    Ms. DeGette. If you had been consulted, what would your 
recommendation have been?
    Mr. Azar. I think it is very hard now, looking back with 
all that we have been through, to do 20/20 backwards. You know, 
it is easy to Monday morning quarterback.
    Ms. DeGette. Do you think you may have said it was a good 
idea?
    Mr. Azar. I hope that I would have raised the significant 
child welfare issues, the significant issues around program and 
reputational----
    Ms. DeGette. But you are not sure if you would have?
    Mr. Azar. I just want to be fair to my colleagues and 
everyone else. It is very easy in retrospect to say----
    Ms. DeGette. But wait, let me ask you this: when did you 
learn about this? When did you learn about this policy?
    Mr. Azar. So this policy, let's be clear, the Attorney 
General, on April 6th, announced zero tolerance.
    Ms. DeGette. That is right.
    Mr. Azar. And then, I believe it was March 7th, announced 
the implementation of the zero tolerance and 100 percent 
referral.
    Ms. DeGette. Well, March 7th is before April.
    Mr. Azar. May, I am sorry, May 7th. May 7th, zero tolerance 
and----
    Ms. DeGette. But when did they start taking the kids from 
the parents?
    Mr. Azar. I don't know when they first started. I learned 
about the fact of the zero tolerance, of course, when it would 
have been in the press April 6th.
    Ms. DeGette. But when did you, as the head of HHS, learn 
that the children were starting to be taken from their parents 
and put into the custody of your agency?
    Mr. Azar. If you wouldn't mind, I will be happy to tell 
you. So April 6th, I would have seen it in the media or learned 
about it.I very quickly fell ill and was in the hospital for 
several weeks of hospital-at-home care in the month of April. 
Around when the Attorney General made his announcement of 
implementation May 7th, I would have known about the fact that 
that was coming out. But I want to be clear. I did not connect 
the dots that zero tolerance and 100 percent referral meant 
implications for our program, nor was there any indication from 
discussions with me.
    Ms. DeGette. Well, when did you learn of that?
    Mr. Azar. It would have been in the days and weeks 
following the announcement on May 7th.
    Ms. DeGette. May 7th?
    Mr. Azar. Yes. As we started seeing kids and seeing media 
stories around that.
    Ms. DeGette. Did you talk to the Attorney General, or 
anybody else, about that?
    Mr. Azar. I did not speak to the Attorney General himself 
about that, but there were various meetings----
    Ms. DeGette. Who did you talk to about it?
    Mr. Azar. We would have talked to the Department of 
Homeland Security.
    Ms. DeGette. Who did you, Secretary Azar, talk to?
    Mr. Azar. Talked to when and about what?
    Ms. DeGette. In the weeks after May 7th about this policy.
    Mr. Azar. In the weeks after May 7th, our immediate concern 
was taking care of these kids.
    Ms. DeGette. So no, no, no. Who did you talk to in the 
weeks after May 7th about this policy?
    Mr. Azar. I would have talked to, I would have spoken with 
the Secretary of Homeland Security routinely, the White House, 
the interagency policy process around immigration policy.
    Ms. DeGette. And what did you tell them at that time your 
agency's view was towards this policy?
    Mr. Azar. So our focus was on how do we take these kids in 
and deal with the issues----
    Ms. DeGette. So you didn't register an objection to it at 
that time?
    Mr. Azar. I did not.
    Ms. DeGette. OK. Now Commander White came before the 
Oversight and Investigations Subcommittee. He told us he raised 
concerns with HHS leadership about the family separation 
policy. Did you know of Commander White's concerns?
    Mr. Azar. I did not. In fact, I, unfortunately, did not 
know Commander White until I brought him in to help with this 
problem in June.
    Ms. DeGette. OK. And you don't recall him ever telling you 
or you never learned that he was expressing concerns throughout 
the agency?
    Mr. Azar. No, and----
    Ms. DeGette. OK. Can I just say, this is the frustration 
for us because he was there; you are here. We have asked for 
documents. Mr. Pallone is going to talk to you about it. But I 
would appreciate it if we could get those email communications 
to find out what the agency knew. You can work with us on that.
    Mr. Azar. We are certainly working on it. I believe we 
produced several thousands already, and we will keep working 
with you on a rolling basis on producing materials.
    Ms. DeGette. Thank you.
    One last thing. There was an article in The New York Times 
on the 9th of March, and it said that the separations are still 
happening; there are 245 children that have been removed since 
the policy was reversed. And it also says that staff members 
have raised questions with Border Control agents about what 
appear to be little or no justification. Do you have any 
knowledge of that?
    Mr. Azar. Yes, I do. And if I could answer?
    Ms. DeGette. If you can please answer?
    Mr. Azar. So separations have always happened, and they 
continue to happen under the TVPRA as well as just child 
welfare principles. So DHS will send us children where there is 
a felony conviction. Under the TVPRA, there are certain ones, 
especially violent crimes, where there is a concern about child 
welfare, where an individual claim to be a parent but isn't a 
parent. So we get those.
    In addition, my understanding is we get a small number of 
children at this point still where local officials use their 
discretion to prosecute the parent for a felony violation of 
immigration laws, only felony. We may have received some where 
it appears it was based only on a misdemeanor offense and 
prosecution. That is not the policy, is my understanding. I 
think our people, sometimes we don't always get full 
information why they were separated and sent to us. And so, I 
think, in fairness, some of our people have expressed concern 
about some cases saying, ``Why is this child being sent to us? 
I don't quite know and understand why you separated them. And 
does it''----
    Ms. Eshoo. I think your time has expired.
    Mr. Azar. All of that. All right.
    Ms. DeGette. Thank you. Madam Chair, I would just ask 
unanimous consent to place this New York Times article in the 
record. And also, we will be sending follow up questions. I 
would appreciate if the Secretary could answer them.
    Ms. Eshoo. So ordered.
    Ms. Eshoo. Now I would like to recognize the gentleman from 
Kentucky, Mr. Guthrie, for 5 minutes.
    Mr. Guthrie. Thank you, Madam Chair. I appreciate it very 
much.
    And just to reiterate what was said, because I was going to 
point this out, the decision to separate parents from their 
children, the immigration enforcement decisions are made by the 
Department of Justice and carried out by DHS. My understanding 
is HHS hasn't separated a single child. And while I do support 
strong enforcement of our borders by DHS and the Justice 
Department, I do not support separating families from their 
children. I don't know of anyone here that supports separating 
families from children. We want to keep children together.
    In a previous hearing, there were some allegations brought 
up about HHS, ORR, so within your Department. So I just want to 
bring these up.
    And so, recent reports have detailed allegations of abuse, 
including sexual abuse, of minors in ORR facilities over the 
past four years. This was an issue that this committee examined 
in 2014, upon learning of abuse detailed and reports published 
by the Houston Chronicle. I believe Dr. Burgess led that. And 
we remain concerned about recent reports.
    What is ORR's process for reporting and investigating 
sexual abuse allegations? And does this process differ, 
depending on if the allegations are between two unaccompanied 
minors or versus an unaccompanied child and an adult staff 
member?
    Mr. Azar. Yes, thank you. And obviously, any allegation of 
abuse or neglect against a child has to be taken very 
seriously, and especially sexual misconduct or abuses, 
absolutely unacceptable. And we want to work with you and make 
sure our processes and procedures protect against that.
    We received three types of sexual misconduct that fit into 
that group of about 1,000 a year of reports that we have gotten 
over the last four years, including in the previous 
administration. There is inappropriate sexual behavior. That 
can be as little as a child saying something inappropriate to 
another child, inappropriate touching. It can be sexual 
harassment. It could be child on child or, most seriously, 
sexual abuse.
    We received over the last four years, when we have had 
about 180-289 thousand children in that period, 178 allegations 
of sexual abuse of adult-on-child, staff member issues. Those 
sexual misconduct allegations must be reported to ORR within 
four hours. Sexual abuse cases must be reported to Federal, 
State, Local law enforcement officials, child safety welfare 
individuals, for investigation.
    ORR received these investigations. We have put in place a 
full-time prevention of sexual abuse coordinator in this 
administration. We have put together a committee to review 
allegations and ensure proper oversight. We receive reports on 
any developments in the case within 24 hours. So we try to 
aggressively pursue that. If we can improve our procedures, we 
are welcome to be a learning organization and get better and 
better at this. We do not want any of these cases ever to 
happen.
    Mr. Guthrie. To clarify, it was in another committee and 
with a different Secretary. And I know you have answered some 
questions in other departments. So they were asked about what 
is going on in your Department. So I just wanted to clarify.
    Recently, there has been some incorrect information 
regarding who the allegations are made against. When we say 
``staff,'' allegations against staff, does that mean HHS staff 
or ORR staff or an appointee or a contractee's staff?
    Mr. Azar. Thank you for asking for that clarification. 
These are allegations, where it involves staff, it would be 
staff of grantees. These are the nonprofit entities that run 
the approximately 100 facilities that we have to care for 
children. Obviously, still, we have oversight. We want a safe 
environment. We have to investigate. So it is not to diminish 
in any way responsibility that we have to ensure a safe 
environment. But, to my knowledge, I am not aware of any 
allegations against an actual HHS employee or ORR employee with 
regard to these children.
    Mr. Guthrie. When you see this--so, walk me through the 
process of--I know it may not get to your level, but what 
happens? I mean, what happens? So we understand how these 
children are being protected. I know that you want, we all want 
the children to be protected, and obviously, you do as well. So 
how do you react when your cabinet--well, I won't say 
``cabinets,'' what we call them in Kentucky--your Department 
react when you have an allegation?
    Mr. Azar. So the process, especially when we get a sexual 
abuse allegation, is that the grantee is required to alert 
immediately child protective services and State officials for 
potential prosecution and investigation for child welfare. We 
are alerted within four hours. That goes to this national 
sexual abuse prevention coordinator.
    We have in each of our grantee facilities actually a 
hotline. It is like a telephone booth. If you visit our 
facilities, you should see that, where a child may make a claim 
of sexual misconduct through that reporting hotline to make 
sure we learn of it immediately. Then, we conduct, of course, 
the regular oversight, and we take, I hope we take swift, 
appropriate, remedial action anytime there is a finding of 
inappropriate conduct.
    Mr. Guthrie. I believe there are three contractors--I am 
probably out of time--but three contractors that the most 
allegations have been against. Has anything happened with those 
three contractors?
    Mr. Azar. I would say most of the allegations you have 
heard about involve a contractor in the Arizona area. In that 
instance, we shut down before anything was public. There was a 
pulling-hair incident that you might have seen a video of. 
Before that was ever public, we actually shut that facility 
down. We pulled our children out of it. We shut another 
facility down, I believe, pulled children out of it. We stopped 
placement of children in the other six facilities of that 
grantee, revoked their licensure.
    And for any facilities to come back online, they would have 
to go through the State licensing procedure recertification, as 
well as ORR being satisfied that the leadership, policies, 
practices, everything had changed sufficiently for that, 
because we really have to ensure the safety of our children.
    Mr. Guthrie. OK. I thank the Chair for her indulgence.
    And thank you for your answers. I appreciate that. Thank 
you.
    Ms. Eshoo. I thank the gentleman for his important 
questions. Now the ever-patient, ever-present Ms. Schakowsky 
from Illinois is recognized for 5 minutes.
    Ms. Schakowsky. I thank the Chair for allowing me to wave 
on. This is such an important issue.
    According to the Government Accountability Office, months 
before the Attorney General's April 2018 zero tolerance policy 
memo was issued, the Office of Refugee Resettlement saw a 
tenfold increase in the number of children who were separated 
from their parents. Furthermore, ORR officials told GAO that, a 
few months prior to the April 2018 zero tolerance memo, they 
considered planning for a continued increase in the separated 
children, but HHS leaders advised them not to engage in such 
planning.
    So, Secretary Azar, were you aware that ORR officials were 
seeing a tenfold increase in the number of children who were 
separated from their parents?
    Mr. Azar. I was not. I wasn't actually aware of an issue of 
separating children at the time really until we got into that 
May timeframe.
    Ms. Schakowsky. I heard what you said, but, according to 
Commander White's testimony in front of this very committee, 
the Oversight and Investigations Subcommittee, though, the HHS 
leaders who told him not to plan for continued increase in 
separated children were Scott Lloyd, the head of ORR, and 
Maggie Wynne, your counsel for human services policy.
    So, Secretary Azar, before the issuance of the zero 
tolerance policy, did Mr. Lloyd or Ms. Wynne ever discuss 
family separation with you?
    Mr. Azar. Not to my knowledge. And I am disappointed that I 
didn't know that. I am disappointed they did not tell me if 
they were engaged in----
    Ms. Schakowsky. And has there been any consequence for them 
for not telling you something like separating children?
    Mr. Azar. So the issue is what would we have done 
differently, of course. I am concerned----
    Ms. Schakowsky. Stop separating children is one idea.
    Mr. Azar. First, we don't separate children. But the other 
is----
    Ms. Schakowsky. Whoa. Go back to that.
    Mr. Azar. We don't at HHS separate children.
    Ms. Schakowsky. I see.
    Mr. Azar. We have never--we at HHS do not separate 
children.
    Ms. Schakowsky. I know.
    Mr. Azar. We receive children sent to us.
    Ms. Schakowsky. Yes.
    Mr. Azar. And we just try to care for them the best we can.
    Ms. Schakowsky. Stop the policy though?
    Mr. Azar. I'm sorry?
    Ms. Schakowsky. You could have stopped the policy in some 
way, made a stink about it?
    Mr. Azar. Correct. If I had been alerted to it, I could 
have raised objections and concerns, absolutely. And I wish we 
had had more knowledge flow, and I wish more people had been 
engaged in these issues, absolutely. Of course.
    Ms. Schakowsky. So once you found out about all this, have 
you done anything at all in terms of raising this issue?
    Mr. Azar. So once we found out about it in May, we 
scrambled immediately towards dealing with the issues that we 
were dealing with. What I told our team, I convened our team, 
and I said, because I was seeing the same press stories you 
were seeing, and I was very disturbed by it, I said, ``I want 
every child to know where their parent is. I want every parent 
to know where their child is. I want every parent and child in 
regular communication, telephone or Skype. And I want us to 
begin an immediate reunification process to get them outplaced 
with sponsorship.''
    Now we use reunification differently than the later Judge 
Sabraw order. Reunification means placing, often with a level 1 
or level 2 sponsor, in the homeland. And so, I pulled in our 
Assistant Secretary for Preparedness and Response to add 
logistics capabilities on top of our normal----
    Ms. Schakowsky. Reclaiming my time, so tell me, Secretary 
Azar, as this nation's top health official, after separation 
began taking place, did you ever attempt to just put your foot 
down and stand up for the children, and tell DOJ, DHS, or the 
White House, that separation should be stopped?
    Mr. Azar. All of that was preempted. The President, on 
January 22nd, issued his Executive Order stopping separations. 
And at that point, we moved immediately towards compliance with 
the June 26th court order and reunifications. All of our 
efforts were focused on that.
    Ms. Schakowsky. Well, you say that, but did you read The 
New York Times on Sunday?
    Mr. Azar. As I mentioned to Congresswoman DeGette, the 
separations that are currently occurring, to my knowledge--
again, I don't separate children--are the types of separations 
that are normally happening for child welfare. They are from 
felony violations for child welfare, lack of parentage. There 
can be some felony prosecutions. I believe those are fairly 
rare.
    Ms. Schakowsky. OK. Well, let me quote. Let me tell you 
what some of your staff said. Staff members have in some cases 
raised questions with Border Patrol agents about separations 
with what appears to be little or no justification.
    Mr. Azar. And I am glad they are doing so, and I encourage 
them to do so. We don't always get--sometimes there is law 
enforcement sensitive information----
    Ms. Schakowsky. So what are you doing? People, American 
people are horrified by this. They see this, I see this as 
State-sponsored child abuse, I would say even State-sponsored 
kidnapping, children being taken away from their parents, 
hundreds, maybe thousands of children. And it's continuing. I 
want to know what you are doing, a sense of urgency to come 
from you about what you are doing about stopping this.
    Mr. Azar. I will not stop or advocate DHS to stop 
separating children from individuals who present a harm for 
child welfare. And if that is what is occurring, and that is 
what should be occurring----
    Ms. Schakowsky. OK, but you are the child welfare agency.
    Mr. Azar. That is what I will stand up for.
    Ms. Schakowsky. And you need to find out if these are 
legitimate child--because----
    Mr. Azar. And that is what I----
    Ms. Schakowsky [continuing]. It is also said that some of 
your staff found that the border agents said, ``No, we're not 
doing anything about this. We are going to separate the 
children.'' That is in that article. Read it.
    Ms. Eshoo. The gentlelady's time has expired. The 
gentleman, the ranking member of the full committee, Mr. 
Walden.
    Mr. Walden. From Oregon. Thank you, Madam Chair. I 
appreciate it.
    Mr. Secretary, thanks for being here and taking on these 
tough questions. We appreciate it.
    And I want to go back to part of this again to make clear 
that your professionals do not separate children?
    Mr. Azar. That is correct. We do not separate children.
    Mr. Walden. And tell me, how many children show up at these 
ORR facilities on a given day? I mean, you probably get some 
count. And you don't control that flow, right?
    Mr. Azar. We have no control over the flow of children to 
us. We currently have 11,668 children in our care. We received 
the other day, the last report we received, 229 children. We 
have seen rates up----
    Mr. Walden. In a given 24-hour period?
    Mr. Azar. In a day. In a day. We are seeing rates--it is 
surging--we are seeing rates upwards of 300 children coming 
over a day now. It is 120 percent increase in unaccompanied 
alien children crossing the border and being sent to us from a 
year ago February. We are in a crisis situation.
    Mr. Walden. And these children that are coming across, you 
say unaccompanied?
    Mr. Azar. Unaccompanied. This is a 12-year-old girl walking 
across the border or a coyote shoving her across the border by 
herself.
    Mr. Walden. So they have been separated from their 
parents----
    Mr. Azar. Their parents separating them by sending them 
here or they ran away on their own up to here. They are coming 
here by themselves. They are unaccompanied. And then, our job 
is to take care of them and try to find them some relative 
that, hopefully, is here in the States that we can vet and 
place them with that person who is responsible----
    Mr. Walden. And in the prior administration, didn't we 
learn that there were times where children, unaccompanied, were 
put with the wrong people?
    Mr. Azar. Yes. Yes. Unfortunately, we try to do as good a 
job as we can vetting individuals, the family members and 
others that we place as sponsors. But, yes, in the prior 
administration, there was one instance that became quite a 
cause celebre. The permanent Subcommittee on Investigations in 
the Senate held inquiries around children that Senator Portman 
was very focused on, children sent to sponsors in Ohio, who 
ended up actually with traffickers and working as, essentially, 
trafficked labor at an egg processing plant, if I remember 
correctly.
    Mr. Walden. So is that because they were pushed out of the 
ORR system into the wrong hands too fast?
    Mr. Azar. Obviously, the screening process and vetting 
process on sponsors failed.
    Mr. Walden. And have you changed anything to make sure that 
is not happening on your watch?
    Mr. Azar. So we try to ensure enhanced vetting of any 
individual that we put children with. We have case managers 
that work with us and with the grantees that take on these 
children's cases. And we vet the individuals. We fingerprint 
them. We fingerprint others as necessary, for instance, other 
household members. We send them for FBI background checks. We 
do common public record checks. I think we can check the child 
abuse files on them. We learn immigration status on them 
because that can be a relevant factor. For instance, placing a 
child with someone who is in the middle of a removal 
proceeding, that wouldn't be a stable environment. So we are 
constantly trying to improve the quality of our vetting process 
to place the children in a safe environment.
    Mr. Walden. And during that whole process, do these kids 
have the opportunity to talk to their families back in their 
home countries?
    Mr. Azar. Oh, yes. Yes. In fact----
    Mr. Walden. How often?
    Mr. Azar. I believe they are required to speak, to have the 
opportunity to speak at least twice a week. And we try to----
    Mr. Walden. They have to pay for those calls?
    Mr. Azar. No. No, no. We pay for that. And they have 
limited access to their attorneys, and they----
    Mr. Walden. Do they get access to any kind of healthcare?
    Mr. Azar. They get free healthcare, free mental healthcare, 
free vision.
    Mr. Walden. How often do they get mental health services?
    Mr. Azar. They are assessed for their mental health needs 
within 24 hours of arriving at an ORR intake facility.
    Mr. Walden. Within 24 hours, they see a mental health 
counselor?
    Mr. Azar. Yes.
    Mr. Walden. And how often do they get access to health 
services?
    Mr. Azar. They also receive that care immediately. I 
believe within 48 hours they are vaccinated and receive the 
suite of CDC vaccinations if they do not have documentation of 
prior vaccination. And then, we provide ongoing healthcare, 
including emergency services.
    Mr. Walden. What about educational services?
    Mr. Azar. We provide them with education services in all of 
our facilities, and--yes.
    Mr. Walden. Have you ever gone down to one of these 
facilities and met with these kids?
    Mr. Azar. I have, indeed. I meet with the children when I 
am there. I met with the student council when I was down at the 
Homestead facility.
    Mr. Walden. Wait a minute. They have student councils?
    Mr. Azar. They have an elected student council who----
    Mr. Walden. And what are the student councils? Are they 
free to tell you the good, bad, ugly?
    Mr. Azar. I beg them, I beg them, tell me any complaints 
and concerns that you have.
    Mr. Walden. What are their complaints?
    Mr. Azar. Well, there were three themes. The first thing 
they said was, ``We miss our parents who sent us here.'' The 
second thing they said was, ``We are grateful to America. We 
are safe and secure for the first times in our lives.'' It is 
actually heartwarming to see the gratitude on these beautiful 
children's faces. It was just such gratitude. And even any 
complaint they had, one girl wanted better sneakers. She felt 
so guilty saying it because she feels such gratitude to this 
country.
    Mr. Walden. What about food?
    Mr. Azar. They want pizza night. They want pizza night more 
often. That's the most common thing they say. They don't like 
our breakfast because they have to comply with the Federal 
nutrition standards. And so, they do complain about the 
breakfast.
    Mr. Walden. They are like other teenagers then?
    Mr. Azar. Yes.
    Mr. Walden. Yes.
    Mr. Azar. Yes, yes.
    Mr. Walden. All right. My time has expired, Madam Chairman. 
Thank you.
    And, Mr. Secretary, thank you for being here.
    Ms.Eshoo [presiding]. Thank you. Thank you very much, Mr. 
Walden.
    The Chair now recognizes the chairman of the full 
committee, Mr. Pallone, for 5 minutes.
    Mr. Pallone. Thank you, Madam Chair.
    I just wanted to explore, Mr. Secretary, the lessons 
learned from the family separation policy to see if we can 
figure out what went wrong.
    But, first, let me mention an issue of documentation. You 
know, I am very frustrated with the lack of documentation on 
this and other issues, as you know from my previous questions. 
The committee sent you a letter nearly two months ago 
requesting documents relating to family separations. What few 
documents we have received, sir, have been largely 
unresponsive. And in these cases, in these productions that we 
have received from you, we have received little substance, 
including very few communications from key HHS leaders.
    One weekly production, in other words, documents, included 
almost 800 pages, but only 14 of those pages was responsive to 
our request. Another time, the weekly production consisted of 
only seven pages of documents. And I think it is now fair to 
ask, what is HHS hiding? Mr. Secretary, we have been working 
with HHS in good faith, but our patience has really run out. So 
what explains this slow production? Are there certain documents 
you don't want us to see? I know, previously, you mentioned 
executive privilege. Would you commit today to fully cooperate 
with this investigation and produce all of our requested 
documents related to family separations?
    Mr. Azar. We are certainly working to do so. I believe we 
have produced over 2800 pages of materials. We are doing it on 
a rolling basis.
    Mr. Pallone. But very little of it responds to our 
questions, you know, on family separation.
    Mr. Azar. I am not personally sitting and reviewing each 
document that is going over. So I can't comment on that. I want 
to be cooperative. I want you to get the materials you need to 
do your job. There may be limited areas where we can provide 
materials to you or have to have an accommodation, an 
appropriate accommodation discussion. But your oversight is 
appropriate. We want----
    Mr. Pallone. Just please----
    Mr. Azar. I assure you I want to do the lessons learned on 
this. I want to learn how we can do better always.
    Mr. Pallone. Well, just please get back to us with the 
requested documents about family separation and responsive to 
our request.
    At our hearing last month on this topic, we heard from 
child welfare experts about the decades of research showing 
that family separations lead to toxic stress. There are often 
long-term traumatic consequences. Countless other organizations 
have spoken out about this harm.
    Mr. Secretary, why was this misguided policy allowed to 
engulf HHS and harm both children and their families and the 
reputation of this critical program, if you would?
    Mr. Azar. I share the concerns about child welfare, and I 
especially share the concerns that Commander White, who spoke 
to your committee--I have just the absolute highest respect and 
regard for Commander White and the advice----
    Mr. Pallone. Well, what is the reason why this was allowed 
to continue without--I mean, you agree that it wasn't good.
    Mr. Azar. The President's Executive Order on June 22nd was 
able to short circuit that right as we were in the throes of 
this. I focused immediately my energy on those three priorities 
I talked about, which is just ameliorating harm as quickly as 
possible, which was kids know where parents are; parents know 
where kids are. Get them in contact and get them placed, 
reunified or placed with sponsors as quickly as possible. And 
then, the Executive Order came along, and all of our energies 
switched over--that stopped--and switched over towards Judge 
Sabraw's order and compliance, which was a full-court press to 
do that. So I think the timing didn't really facilitate that, 
but the concerns are absolutely valid around child welfare. I 
share them. I said at the time nobody wants children separated 
from their parents.
    Mr. Pallone. No, I know, and I can't help, you know, there 
is that quote on the wall at your headquarters from Hubert 
Humphrey where he said, ``the moral test of a government is how 
that government treats those are in the dawn of life, the 
children; the twilight of life, the elderly; and the shadows of 
life, the sick, the needy and the handicapped.''
    I mean, you don't believe that this policy past the moral 
test that Vice President Humphrey spoke of? I mean, you would 
agree, right?
    Mr. Azar. I absolutely share the concern about child 
welfare, of separating children. I can't speak to the questions 
of enforcing. There are significant issues, though, about 
exempting someone. As long as Congress has the law on the books 
making it crime to cross our border, there are significant 
questions that this Congress has to focus on about exempting 
somebody from those laws simply because they have a child with 
them. That is a real concern.
    Mr. Pallone. I understand, but----
    Mr. Azar. As a lawyer, it is a concern I have.
    Mr. Pallone. All I really want is an assurance today. 
Because I don't know if I am the last person; I think I might 
be. But can you assure us today that wholesale family 
separations will never happen again under your watch?
    Mr. Azar. I will certainly advocate for the child welfare. 
There are three major concerns I have. One is child welfare. 
The second is the operational concerns that you raised about 
our program. The third is the reputational harm----
    Mr. Pallone. I just want an assurance that this kind of 
wholesale family separation is never going to happen again 
under your watch. Can you just say, answer that?
    Mr. Azar. Of course, I am not the President. I do not get 
the final judgment.
    Mr. Pallone. No, just you.
    Mr. Azar. I can tell you my perspective is I will always 
advocate for the child welfare concerns, the reputational 
concerns, and the operational concerns of our program.
    Mr. Pallone. No, I don't think that answers the question, 
but whatever.
    Thank you, Madam Chair.
    Ms. Eshoo. I would just take a moment to remind the witness 
that, if someone is coming across the border as a refugee, that 
is a legal entry.
    All right. The Chair would now recognize Dr. Burgess for 5 
minutes.
    Mr. Burgess. Thank you.
    And thank you, Mr. Secretary, for spending the day with us.
    I am going to mostly do the talking at this point. Feel 
free to interject whatever you may wish.
    First off, Madam Chairwoman, I am going to ask unanimous 
consent to place into the record a newspaper article from 
February 19th, 2019. The title of the article is, ``Texan 
Republican Rejects Democrats' Criticism of the Homestead 
Facility for Migrant Kids.'' I visited the facility, along with 
four of your colleagues, in February.
    You know, this was odd because they had a press conference 
after the visit but wouldn't let me participate in the press 
conference. So I actually called one of the reporters and 
provided a different perspective from what was reported.
    But I would like to place this article in the record.
    Ms. Eshoo. Without objection, the article is admitted.
    [The information appears at the conclusion of the hearing.]
    Mr. Burgess. I went to the Central American countries that 
are primarily involved with most of the children that are 
coming over. And just so people understand what is going on 
here, a family will decide to send their child north because 
perhaps they have other family members who have already made 
the trip and they want their child to go north.
    I actually asked Democrats to go with me on that CODEL. I 
couldn't get anyone to accompany me.
    One of the things that I learned that really concerns me is 
that it costs $6 to $10 thousand for a child to make that 
journey. That is no small sum of money in a country that is 
relatively poor. And I asked the question, ``Where do they get 
the money to make this journey?'' I was told that they borrow 
it from the bank. They borrow it from the bank, putting their 
home or their farm up as collateral. I don't know, this doesn't 
sound like a good system to me.
    Now part of that Homestead visit, I also went to the Bryan 
Walsh Children's Village that the Democrats did not go. That is 
a permanent facility that is down in Florida. One of the things 
that struck me about the Bryan Walsh Children's Village is they 
have got a big mural that they have drawn on the outside of one 
of the buildings. It is a mural of a train with children 
sitting on top of it. It is not like a ride at an amusement 
park. This is ``la Bestia.'' This is how those children get 
from Central America. They are brought by traffickers on the 
top of a train through the deserts of Central Mexico and 
deposited at our border.
    They are, then, brought across the river in the case of 
Texas. They are brought across the river by a coyote who leaves 
them in a small lot of people, and then, hopes that Customs and 
Border Patrol will find them before they dehydrate or burn 
under the Texas sun.
    It is not a good system that is being set up. And I cannot 
imagine why people wouldn't want that system to not exist 
anymore. Why would we continue to provide the magnet for people 
to want to make that dangerous journey or, worse yet, send 
their child on that dangerous journey?
    Now, Secretary Azar, during a House Judiciary Committee 
hearing on February 26th, there was, unfortunately, a gross 
mischaracterization of the work being done at HHS to care for 
unaccompanied alien children. And a member on the other side of 
the dias on the Judiciary Committee stated that, ``ORR created 
an environment of systemic sexual assaults by HHS staff on 
unaccompanied alien children.'' Close quote.
    So that accusation is false and it was made without this 
member, to the best of my knowledge, having ever visited an ORR 
facility. His comments discredit the efforts by ORR employees 
to deal with problems, and these problems date back to a 
previous administration. They weren't created when Donald Trump 
took his hand off the Bible.
    So Madam Chair, I have a letter that was written by 
Jonathan Hayes to this member of the Judiciary Committee, 
characterizing the remarks that were made and asking for an 
apology. And I ask unanimous consent to insert this letter into 
the record. And I would, further, ask that this committee ask 
Representative Deutch to issue an apology to the men and women 
at ORR and HHS who work every day to see that these children 
are well taken care of.
    And I will yield back my time.
    But I do ask unanimous consent----
    Ms. Eshoo [presiding]. That unanimous consent is not 
approved.
    Mr. Burgess. Is not approved?
    Ms. Eshoo. Is not approved.
    Mr. Burgess. You are not going to put this letter into the 
record?
    Ms. Eshoo. Is approved. I am sorry.
    Yes, it is a letter condemning another member, and I am not 
going to pursue taking the words down, but I am going to draw a 
line and not accept it for the record.
    Mr. Burgess. Madam Chair, could I appeal the ruling of the 
Chair?
    Ms. Eshoo. Let it remain--well, if you want to do that, you 
may, but I am not going to put those words in the record. I 
don't think they are fit for the record. And you have been in 
this chair, Mr. Burgess, and I think that, were you to hear me 
making that request, that you would do the same thing.
    Mr. Burgess. If it is any consolation for you, they are 
already in the record of the Rules Committee from yesterday.
    Ms. Eshoo. All right. Well, are you finished with your 
questioning?Azar. Madam Chairwoman? Madam Chairwoman?
    Ms. Eshoo. Who is asking for----
    Mr. Azar. Me, upfront.
    [Laughter.]
    Ms. Eshoo. Oh, I am sorry. I am sorry.
    Mr. Azar. I am terribly sorry to interrupt.
    If I could, I just wanted to clarify, I think in response 
to Chairman Pallone, when we were speaking, I made reference to 
approximately 2800 documents. My staff informs me I was 
incorrect. It is approximately 2,080 pages. I just wanted to be 
clear that they have corrected me. I made a mistake in my 
statement there, and I wanted to be sure to get that on the 
record. I am sorry about that. I apologize.
    Ms. Eshoo. You have got good staff behind you----
    Mr. Azar. I have got a good team.
    Ms. Eshoo [continuing]. Giving you the notes to make the 
correction.
    Mr. Azar. Thank you.
    Ms. Eshoo. So noted and appreciated.
    Hardly anyone is left, but I still want to put out the 
reminder that Members have 10 business days to submit their 
additional questions for the record.
     And, Mr. Secretary, there were many requests and you made 
several offers to provide the information that was requested. 
Please do that, and also respond promptly to the questions that 
are going to be submitted to you by Members.
    I just want to close this hearing. It has been a long one. 
We thank you, Mr. Secretary.
    It is the budget of our nation, and the budget of our 
nation is a statement of our national values. And there have 
been those that have supported some of the things that are in 
the budget. You have also heard those that have spoken out 
where they believe it doesn't meet our national values.
    I would just ask you to do the following: and that is, to 
go online and tap in President Ronald Reagan's last speech as 
President of the United States. It is one of the most 
magnificent set of remarks I have ever heard. It is a love 
letter to immigrants. Call me after you have watched that, and 
I want to have a discussion with you about it.
    With that, the committee has concluded its business for 
today and the end of the hearing.
    Thank you.
    [Whereupon, at 5:03 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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