[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                LOWERING UNAFFORDABLE COSTS: LEGISLATIVE 
                 SOLUTIONS TO INCREASE TRANSPARENCY AND 
                 COMPETITION IN HEALTHCARE

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 26, 2023

                               __________

                           Serial No. 118-27
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


     Published for the use of the Committee on Energy and Commerce

                   govinfo.gov/committee/house-energy
                        energycommerce.house.gov                        
                        
                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
55-326 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------                            
                        
                    COMMITTEE ON ENERGY AND COMMERCE

                   CATHY McMORRIS RODGERS, Washington
                                  Chair
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio                  Ranking Member
BRETT GUTHRIE, Kentucky              ANNA G. ESHOO, California
H. MORGAN GRIFFITH, Virginia         DIANA DeGETTE, Colorado
GUS M. BILIRAKIS, Florida            JAN SCHAKOWSKY, Illinois
BILL JOHNSON, Ohio                   DORIS O. MATSUI, California
LARRY BUCSHON, Indiana               KATHY CASTOR, Florida
RICHARD HUDSON, North Carolina       JOHN P. SARBANES, Maryland
TIM WALBERG, Michigan                PAUL TONKO, New York
EARL L. ``BUDDY'' CARTER, Georgia    YVETTE D. CLARKE, New York
JEFF DUNCAN, South Carolina          TONY CARDENAS, California
GARY J. PALMER, Alabama              RAUL RUIZ, California
NEAL P. DUNN, Florida                SCOTT H. PETERS, California
JOHN R. CURTIS, Utah                 DEBBIE DINGELL, Michigan
DEBBBIE LESKO, Arizona               MARC A. VEASEY, Texas
GREG PENCE, Indiana                  ANN M. KUSTER, New Hampshire
DAN CRENSHAW, Texas                  ROBIN L. KELLY, Illinois
JOHN JOYCE, Pennsylvania             NANETTE DIAZ BARRAGAN, California
KELLY ARMSTRONG, North Dakota, Vice  LISA BLUNT ROCHESTER, Delaware
    Chair                            DARREN SOTO, Florida
RANDY K. WEBER, Sr., Texas           ANGIE CRAIG, Minnesota
RICK W. ALLEN, Georgia               KIM SCHRIER, Washington
TROY BALDERSON, Ohio                 LORI TRAHAN, Massachusetts
RUSS FULCHER, Idaho                  LIZZIE FLETCHER, Texas
AUGUST PFLUGER, Texas
DIANA HARSHBARGER, Tennessee
MARIANNETTE MILLER-MEEKS, Iowa
KAT CAMMACK, Florida
JAY OBERNOLTE, California
                                 ------                                

                           Professional Staff

                      NATE HODSON, Staff Director
                   SARAH BURKE, Deputy Staff Director
               TIFFANY GUARASCIO, Minority Staff Director
                         Subcommittee on Health

                        BRETT GUTHRIE, Kentucky
                                 Chairman
MICHAEL C. BURGESS, Texas            ANNA G. ESHOO, California
ROBERT E. LATTA, Ohio                  Ranking Member
H. MORGAN GRIFFITH, Virginia         JOHN P. SARBANES, Maryland
GUS M. BILIRAKIS, Florida            TONY CARDENAS, California
BILL JOHNSON, Ohio                   RAUL RUIZ, California
LARRY BUCSHON, Indiana, Vice Chair   DEBBIE DINGELL, Michigan
RICHARD HUDSON, North Carolina       ANN M. KUSTER, New Hampshire
EARL L. ``BUDDY'' CARTER, Georgia    ROBIN L. KELLY, Illinois
NEAL P. DUNN, Florida                NANETTE DIAZ BARRAGAN, California
GREG PENCE, Indiana                  LISA BLUNT ROCHESTER, Delaware
DAN CRENSHAW, Texas                  ANGIE CRAIG, Minnesota
JOHN JOYCE, Pennsylvania             KIM SCHRIER, Washington
DIANA HARSHBARGER, Tennessee         LORI TRAHAN, Massachusetts
MARIANNETTE MILLER-MEEKS, Iowa       FRANK PALLONE, Jr., New Jersey (ex 
JAY OBERNOLTE, California                officio)
CATHY McMORRIS RODGERS, Washington 
    (ex officio)
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Brett Guthrie, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     2
    Prepared statement...........................................     4
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     6
    Prepared statement...........................................     8
Hon. Cathy McMorris Rodgers, a Representative in Congress from 
  the State of Washington, opening statement.....................    10
    Prepared statement...........................................    12
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................    16
    Prepared statement...........................................    18

                               Witnesses

Chiquita Brooks-LaSure, Administrator, Centers for Medicare and 
  Medicaid Services..............................................    20
    Prepared statement...........................................    22
    Answers to submitted questions...............................   331
Ashley Thompson, Senior Vice President, Public Policy Analysis 
  and Development, American Hospital Association.................    78
    Prepared statement...........................................    80
    Answers to submitted questions...............................   344
Kristin Bass, Chief Policy and External Affairs Officer, 
  Pharmaceutical Care Management Association.....................    92
    Prepared statement...........................................    94
    Answers to submitted questions...............................   347
Brian Connell, Executive Director, Federal Affairs, The Leukemia 
  & Lymphoma Society.............................................   108
    Prepared statement...........................................   110
Sean Cavanaugh, Chief Policy Officer, Aledade....................   116
    Prepared statement...........................................   118
Ilyse Schuman, Senior Vice President, Health Policy, American 
  Benefits Council...............................................   132
    Prepared statement...........................................   134
Loren Adler, Fellow and Associate Director, USC-Brookings 
  Schaeffer Initiative for Health Policy, Economic Studies, 
  Brookings Institution..........................................   157
    Prepared statement...........................................   159
    Answers to submitted questions...............................   350

                             Legislation
                             
\1\ Discussion Draft, H.R. ___, To amend title III of the Public 
  Health Service Act to ensure transparency and oversight of the 
  340B drug discount program
H.R. 977, the Patient Access to Higher Quality Care Act of 2023
H.R. 1613, the Drug Price Transparency in Medicaid Act of 2023
H.R. 2665, the Supporting Safety Net Hospitals Act
H.R. 2666, the Medicaid VBPs for Patients Act
H.R. 2679, the Pharmacy Benefits Manager Accountability Act

----------

\1\ The proposed legislation has been retained in committee files and 
is available at https://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=115801.
H.R. 2691, the Transparent Prices Required to Inform Consumer and 
  Employers Act
Discussion Draft, H.R. ___, To establish patient protections with 
  respect to highly rebated drugs
Discussion Draft, H.R. ___, To phase out certain services 
  designated as inpatient-only services under the Medicare 
  program
Discussion Draft, H.R. ___, To amend title XVIII of the Social 
  Security Act to increase price transparency of diagnostic 
  laboratory tests
Discussion Draft, H.R. ___, To amend title XVIII of the Social 
  Security Act to promote transparency of common ownership 
  interests under parts C and D of the Medicare program
Discussion Draft, H.R. ___, To amend title XVIII of the Social 
  Security Act to require payment for all hospital-owned 
  physician offices located off-campus be paid in accordance with 
  the applicable payment system for the items and services 
  furnished
Discussion Draft, H.R. ___, To amend title XI of the Social 
  Security Act to increase transparency of certain health-related 
  ownership information
Discussion Draft, H.R. ___, To require the Secretary of Health 
  and Human Services to consider, within the annual rulemaking 
  processes, the effect of regulatory changes to certain Medicare 
  payment systems on provider and payer consolidation, and for 
  other purposes
Discussion Draft, H.R. ___, To amend title XVIII of the Social 
  Security Act to provide for site neutral payments under the 
  Medicare program for certain services furnished in ambulatory 
  settings
Discussion Draft, H.R. ___, To amend title XVIII of the Social 
  Security Act to provide for parity in Medicare payments for 
  hospital outpatient department services furnished off-campus
Discussion Draft, H.R. ___, To amend titles XI and XVIII of the 
  Social Security Act to require each outpatient department of a 
  provider to include a unique identification number on claims 
  for services, and to require hospitals with an outpatient 
  department of a provider to submit to the Centers for Medicare 
  & Medicaid Services an attestation with respect to each such 
  outpatient department

                           Submitted Material

Inclusion of the following was approved by unanimous consent.
List of documents submitted for the record.......................   205
Letter of April 25, 2023, from Brent Gardner, Chief Government 
  Affairs Officer and Senior Vice President, Americans For 
  Prosperity.....................................................   207
Letter of April 25, 2023, from David Williams, President, 
  Taxpayers Protection Alliance, to Mrs. Rodgers, et al..........   209
Letter from Better Solutions for Healthcare to Mr. Guthrie and 
  Ms. Eshoo......................................................   210
Statement of the Association for Clinical Oncology by Lori J. 
  Pierce, Chair of the Board, April 26, 2023.....................   211
Letter of April 26, 2023, from Sterling N. Ransone, Jr., Board 
  Chair, American Academy of Family Physicians, to Mr. Guthrie 
  and Ms. Eshoo..................................................   213
Letter of April 26, 2023, from the Ambulatory Surgical Center 
  Association to Mr. Guthrie and Ms. Eshoo.......................   218
Letter of April 25, 2023, from Americans For Prosperity, et al., 
  to Members of Congress.........................................   221
Statement of the Infusion Providers Alliance, April 26, 2023.....   223
Statement of the Large Urology Group Practice Association by Evan 
  R. Goldfischer, President, April 26, 2023......................   226
Letter of April 26, 2023, from Andrew Lautz, Director of Federal 
  Policy, and Nicholas Johns, Policy and Government Affairs 
  Manager, National Taxpayers Union, to Mr. Guthrie and Ms. Eshoo   228
Statement of the Physicians Advocacy Institute, April 22, 2023...   232
Statement of the Partnership to Empower Physician-Led Care by 
  Kristen McGovern, Executive Director, April 26, 2023...........   238
Letter of April 24, 2023, from Mark Battaglini, Chief Strategy 
  Officer, Alliance for Regenerative Medicine, to Mr. Guthrie and 
  Ms. Eshoo......................................................   243
Letter of April 26, 2023, from Kevin Kuhlman, Vice President, 
  Federal Government Relations, NFIB, to Mr. Guthrie and Ms. 
  Eshoo..........................................................   244
Statement of Consumers First, April 26, 2023.....................   247
Report, ``Hospital Competition and Restrictions on Physician-
  Owned Hospitals,'' by Matthew C. Mandelberg, et al., February 
  5, 2023\2\
Statement of the Texas Medical Association, April 24, 2023.......   251
Report, ``Eligibility for Non-Citizens in Medicaid and CHIP,'' 
  Centers for Medicare & Medicaid Services, November 2014........   252
Statement of AHIP, April 26, 2023................................   265
Letter of April 25, 2023, from Andrew Mignatti, President and 
  Chief Executive Officer, Careviso, to Mrs. Rodgers and Mr. 
  Pallone........................................................   272
Web page, ``Immigration Status and the Marketplace,'' 
  HealthCare.gov.................................................   274
Statement of the Connecticut State Medical Society, April 26, 
  2023...........................................................   277
Statement of the California Medical Association, April 25, 2023..   278
Statement of the North Carolina Medical Society, April 26, 2023..   279
Statement of the Nebraska Medical Association, April 25, 2023....   281
Statement of the South Carolina Medical Association, April 26, 
  2023...........................................................   282
Statement of the Tennessee Medical Association, April 26, 2023...   283
Letter of April 24, 2023, from Kenneth E. Raske, President, 
  Greater New York Hospital Association, to the New York State 
  Congressional Delegation.......................................   284
Letter of April 25, 2023, from Bea Grause, President, Healthcare 
  Association of New York State, to the New York State 
  Congressional Delegation.......................................   286
Letter of April 19, 2023, letter from ACA Consumer Advocacy, et 
  al., to Hon. Charles Schumer, et al............................   288
Letter of April 20, 2023, from the Disability and Aging 
  Collaborative & the Consortium for Constituents with 
  Disabilities to Hon. Chuck Schumer, et al......................   293
Statement of the American Cancer Society Cancer Action Network, 
  et al., April 24, 2023.........................................   300
Statement of the American Academy of Family Physicians, et al., 
  April 24, 2023.................................................   302
Statement of the Association for Community Affiliated Plans by 
  Margaret A. Murray, Chief Executive Officer, April 19, 2023....   304
Letter of April 25, 2023, from Charles N. Kahn III, President and 
  Chief Executive Officer, Federation of American Hospitals, to 
  Mr. Guthrie and Ms. Eshoo......................................   306
Statement of the Partnership for Employer-Sponsored Coverage, 
  April 26, 2023.................................................   312
Letter of April 25, 2023, from the American Academy of Family 
  Physicians, et al., to Hon. Charles E. Schumer, et al..........   314
Statement of the U.S. Public Interest Research Group by Patricia 
  Kelmar, Senior Director, Health Care Campaigns, April 26, 2023.   316
Letter of April 25, 2023, letter from Kate Finkelstein, Director, 
  Government Affairs, Alliance of Safety-Net Hospitals...........   325
Letter of April 25, 2023, letter from Jordan Kough, Executive 
  Director, National Down Syndrome Congress, to Hon. Chuck 
  Schumer, et al.................................................   327
Statement of the American Academy of Pediatrics by Sandy Chung, 
  President, April 26, 2023......................................   330

----------

\2\ The report has been retained in committee files and is included in 
the Documents for the Record at https://docs.house.gov/meetings/IF/
IF14/20230426/115801/HHRG-118-IF14-20230426-SD004.pdf.

 
    LOWERING UNAFFORDABLE COSTS: LEGISLATIVE SOLUTIONS TO INCREASE 
               TRANSPARENCY AND COMPETITION IN HEALTHCARE

                              ----------                              


                       WEDNESDAY, APRIL 26, 2023

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m. in 
the John D. Dingell Room 2123 of the Rayburn House Office 
Building, Hon. Brett Guthrie (chairman of the subcommittee) 
presiding.
    Members present: Representatives Guthrie, Burgess, Latta, 
Griffith, Bilirakis, Johnson, Bucshon, Hudson, Carter, Pence, 
Crenshaw, Joyce, Harshbarger, Miller-Meeks, Obernolte, Rodgers 
(ex officio), Eshoo (subcommittee ranking member), Sarbanes, 
Cardenas, Ruiz, Dingell, Kuster, Kelly, Barragan, Blunt 
Rochester, Craig, Schrier, Trahan, and Pallone (ex officio).
    Also present: Representatives Allen, Matsui, and 
Schakowsky.
    Staff present: Alec Aramanda, Professional Staff Member, 
Health; Kate Arey, Digital Director; Jolie Brochin, Clerk, 
Health; Sarah Burke, Deputy Staff Director; Corey Ensslin, 
Senior Policy Advisor, Health; Seth Gold, Professional Staff 
Member, Health; Grace Graham, Chief Counsel, Health; Nate 
Hodson, Staff Director; Tara Hupman, Chief Counsel; Peter 
Kielty, General Counsel; Chris Krepich, Press Secretary; Carla 
Rafael, Senior Staff Assistant; Emma Schultheis, Staff 
Assistant; Michael Taggart, Policy Director; Dray Thorne, 
Director of Information Technology; Lydia Abma, Minority Policy 
Analyst; Jacquelyn Bolen, Minority Health Counsel; Waverly 
Gordon, Minority Deputy Staff Director and General Counsel; 
Tiffany Guarascio, Minority Staff Director; Stephen Holland, 
Minority Senior Health Counsel; Saha Khaterzai, Minority 
Professional Staff Member; Una Lee, Minority Chief Health 
Counsel; Rick Van Buren, Minority Senior Health Counsel; and 
C.J. Young, Minority Deputy Communications Director.
    Mr. Guthrie. The subcommittee will come to order.
    So the Chair recognizes himself for 5 minutes for an 
opening statement.

 OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    We are here today because the healthcare costs continue to 
rise, further limiting America's budgets that have already been 
stretched by the inflation driven by the spending in the last 
couple of years. We are considering 17 bills and discussion 
drafts to advance price transparency and improve competition 
within the healthcare system to ultimately lower costs.
    This legislation hearing builds on our bipartisan work last 
month. In our educational hearing we heard from experts and 
witnesses from across the political and policy spectrum who 
share our goal to lower costs for patients. Republicans and 
Democrats on this committee are reaching across the aisle to 
advance solutions, and these bipartisan efforts can be seen in 
many of the proposals before us today.
    Transparency can reveal the true value of each step in the 
healthcare supply chain and empower patients and employers to 
get the best deal on high-quality care. Many of our proposals 
before the subcommittee today will shine a light on 
prescription drug middlemen and further policies to make the 
healthcare system more competitive to lower costs. The 
Transparent Price Act, introduced by the leaders of the full 
committee, will help build upon the Trump administration's 
hospital and insurers' transparency rules to ensure patients 
and employers are getting the best deal possible.
    While transparency is necessary for a functioning market, 
there must also be competition to lower prices and increase 
quality. As such, we are reviewing a number of policies 
designed to reduce incentives to consolidate and require 
providers to compete with one another on both price and 
quality, all with the goal of benefiting patients. For example, 
today we will examine a number of proposals that will ensure 
patients aren't paying more for the same service in one care 
setting versus another. I look forward to hearing what the 
impacts of these policies could be for patients, both in the 
quality of care they would receive and how these would impact 
their out-of-pocket spending.
    One proposal recommended by MedPAC would save $1.7 billion 
annually. Similarly, another policy would simply require CMS to 
assess the impact that regulatory decisions may have on 
consolidation in healthcare to see if Federal regulations may 
be unintentionally driving consolidation. Improving competition 
will help ensure seniors maintain access to the highest quality 
healthcare services at the best possible prices.
    Another theme repeatedly heard during last month's 
bipartisan educational hearing is the need to address pricing 
practices by pharmacy middlemen. Patients are facing rising 
costs at the drug counter resulting from the growing influence 
of a small number of pharmacy benefit managers. Due 
consolidation within the PBM industry, 80 percent of all drug 
claims are adjudicated by three PBMs.
    It is the subcommittee's duty to ensure this consolidation 
is driving value and improving outcomes. That is why I strongly 
support the bipartisan PBM Accountability Act to provide key 
information to employers about the drug costs and their 
coverage for their employees. With that information, employers 
can truly know what benefit their PBM may be providing.
    There is also bipartisan legislation from the--from 
Representative Carter that would finally ban spread pricing in 
Medicaid. In 2019 it was reported that PBMs earned $123 billion 
in Kentucky alone through spread pricing. Medicaid programs 
should find a more transparent way to pay PBMs for their 
services.
    Finally, I want to thank Representative Eshoo for working 
with me on the MVP Act. The innovation coming the next few 
years is game changing, including potential one-time cures for 
rare diseases, sickle cell anemia, and hemophilia. However, the 
Medicaid system is not set up to pay for high-cost treatments. 
Medicaid programs operate on an annual budget and need more 
flexibility to help ensure patients gain access to these 
therapies. This bipartisan legislation builds on a Trump 
administration regulation that would give Medicaid programs the 
flexibility needed over time and enter into contracts that 
provide patients with access to novel cell and gene therapies. 
This payment model also ensures States aren't on the hook to 
pay for treatments that fail patients.
    In closing, I look forward to today's hearing to discuss 
these bipartisan ideas to lower healthcare costs, and look 
forward to working with my subcommittee colleagues to advance 
these policies.
    [The prepared statement of Mr. Guthrie follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. I yield back, and I now recognize the 
gentlelady from California, Representative Eshoo, for 5 minutes 
for an opening statement.

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

    Ms. Eshoo. Thank you, Mr. Chairman, and good morning, 
colleagues.
    Today we are considering 17 legislative proposals to lower 
costs and increase transparency in our healthcare system.
    Administrator Brooks-LaSure, welcome to the subcommittee. 
This is your first time, and we are very glad to have you with 
us.
    Our last hearing on this topic showed that the United 
States spends more on healthcare than our peer countries, but 
we have significantly worse health outcomes. Simply put, we are 
not getting the best value for our healthcare dollar.
    Hospital care is the largest health spending category in 
the United States, accounting for 31 percent of all healthcare 
spending in 2021. Since 2000, hospital prices have increased 
over 200 percent, and are predicted to continue rising in the 
coming years. When hospital prices increase, out-of-pocket 
costs for Medicare beneficiaries, who are often on fixed 
incomes, increase as well.
    The proposals before us today raise very interesting and 
important questions on how to lower costs and improve health 
outcomes, including how to implement targeted site-neutral 
policies, while protecting patient access and rural hospitals.
    Aligning payment rates across outpatient settings could 
save Medicare more than 141 billion--with a B--dollars over 10 
years. But we should heed MedPAC's recommendation to ensure 
that we prioritize safety and access when advancing our 
policies: how to bring more transparency to the 340B program 
without creating unnecessary barriers, how to further 
competition in the healthcare industry to better serve patients 
and to decrease costs.
    I am also pleased that we are discussing two bills that I 
am coleading. The PBM Accountability Act will finally shed a 
light on the opaque drug pricing system that PBMs use during 
their dealings with manufacturers and insurance plans to make 
enormous profits. It would also save the Government, the 
Federal Government, over $2 billion in the next 10 years.
    The Medicaid Value-Based Payments for Patients Act will 
codify a CMS rule to help ensure Medicaid enrollees have access 
to breakthrough gene therapies for dreaded diseases, as the 
chairman said, for sickle cell anemia and certain cancers. And 
I am pleased to partner with the chairman on this legislation, 
and continue--and I look forward to continuing to carefully 
craft and tailor it.
    Finally, we are considering bipartisan legislation to 
codify existing price transparency rules for hospitals and 
insurers and prevent payment reductions to disproportionate 
share hospitals under the Medicaid program. I fully support 
these bills.
    So thank you, Madam Administrator, for being with us today. 
We look forward to the--your answers to our questions. And I 
know we have a second panel, and I see some of the panelists in 
the hearing room--and thank you for being with us.
    [The prepared statement of Ms. Eshoo follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. And with that, Mr. Chairman, I yield back the 
balance of my time.
    Mr. Guthrie. Thank you. The gentlelady yields back. The 
Chair will now recognize the Chair of the full committee, Chair 
Rodgers, for 5 minutes for an opening statement.

      OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A 
    REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

    Mrs. Rodgers. Good morning, and welcome to Administrator 
Brooks-LaSure of the Centers for Medicare and Medicaid 
Services, and a range of stakeholders on proposals to lower the 
cost of healthcare for Americans through increased transparency 
and competition.
    This committee has a rich history of plowing the hard 
ground necessary to legislate and address issues from data 
privacy to mental health. And I am proud that we are coming 
together on another top priority for the American people.
    Each day it seems we hear a new and more unbelievable story 
of patients struggling to afford their care and navigate the 
system: a 4-year-old getting bills his parents can't protest; 
entire books dedicated to helping people challenge hospital 
bills and overcome denials of care issued by insurance 
companies that receive billions in premiums and subsidies each 
year. Addressing these challenges won't be easy, but I know 
this committee is up to the task.
    Transparency is essential for patients and employers to 
know and plan for their healthcare costs. It is foundational to 
rebuilding the doctor-patient relationship. Seven proposals 
before us improve transparency in the system, and I am thankful 
for Ranking Member Pallone for leading H.R. 2691, the 
Transparent Price Act, with me.
    Our bill has been years in the making, and it is a 
culmination of a lot of bipartisan work and discussions to 
bring price transparency to the forefront. Our bill builds on 
regulations released by the Trump administration and enforced 
by the Biden administration, which just had to levy two more 
fines against hospitals to comply.
    Thank you, Ranking Member Pallone, for working with me for 
years now on this important issue, starting with ensuring 
implementation of the rule and now building on it with 
legislation.
    More proposals also help people understand what happens 
when their insurer owns their doctor, pharmacy, a PBM, and if 
that is driving value and unaffordable costs for the system. 
Five bills and proposals look to reduce what patients and 
employers pay for medicines through transparency and 
competition.
    And lastly, a number address incentives for consolidation 
in Federal healthcare programs. At our bipartisan hearing last 
month we heard a story about a senior from Ohio with painful 
arthritis. The cost of her annual steroid injection increased 
from $30 to $1,400 because her office clinic reclassified as a 
hospital department, even though it was the exact same service 
with the--from the exact same provider and the exact same 
building.
    Today patients in Medicare pay more at hospitals than 
outpatient centers or physician offices for the same services. 
Several proposals would advance site-neutral payments for 
certain services that can be routinely done safely in a 
doctor's office, such as drug administration, diagnostic tests, 
imaging procedures, to name a few. For these services Medicare 
and patients would pay the same amount, regardless of where 
they are performed.
    Ideas for site-neutral payments are bipartisan. Presidents 
Obama and Trump proposed them in their budgets. Before this 
committee, Secretary Becerra committed to working on these 
policies. This is the right thing to do for patients. The 
Committee for a Responsible Federal Budget estimated site-
neutral payments would save Medicare patients $94 billion over 
10 years.
    Let's be clear. Hospitals are integral. They are integral 
parts of our communities. And we recognize the effects of high 
labor cost, inflation, and ever-increasing government 
regulation. But the question before us is this: Should we 
support hospitals through a complex and opaque network of 
cross-subsidies with unintended consequences like consolidation 
that increase costs for patients, or do we separately work on a 
transparent, accountable way to support hospitals that need it?
    I am glad that the American Hospital Association is here 
today, and I hope we can come together to address these issues 
for patients to get the care they need at the cost that they 
can afford.
    And as I close, I want to again thank Ranking Member 
Pallone and all my colleagues on this committee, the 
subcommittee Chair, the Ranking Member Eshoo, for leading--all 
the Members that are coming together--to lead on solutions in a 
bipartisan way. This is bigger than any one person or political 
party. It is about people, especially the most vulnerable, who, 
for way too long, have struggled in a healthcare system that is 
too expensive and too complex.
    Many are discussion drafts before us today, and we are 
having this hearing to understand what work needs to be done to 
move these policies forward. And I invite all the stakeholders 
to provide constructive feedback to inform our bipartisan work. 
Patients all over the country are hopeful that this Congress 
may finally work together to address healthcare costs and 
complexity, and I am proud that Energy and Commerce is leading 
the way.
    [The prepared statement of Mrs. Rodgers follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Rodgers. I yield back.
    Mr. Guthrie. Thank you. The gentlelady yields back. The 
Chair now recognizes the ranking member of the full committee, 
the gentleman from New Jersey, Rep. Pallone, for 5 minutes for 
opening statement.

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

    Mr. Pallone. Thank you, Mr. Chairman. And I want to start 
out by saying I appreciate Ranking Member Rodgers' comments 
about working with us on various legislation, but I am 
concerned that we are holding a hearing on legislative efforts 
to lower healthcare costs at the same time that the Republican 
leadership prepares to bring Speaker McCarthy's what I consider 
irresponsible and extreme Default on America Act to the House 
floor.
    The Speaker's bill will raise costs for American families, 
kick millions of people off their health insurance, and cut 
$100 billion from the Medicaid program so they can provide huge 
new giveaways to billionaires and big corporations. Republicans 
are manufacturing a debt crisis to justify these cruel cuts. 
They are holding the American economy hostage, and this 
brinkmanship will be catastrophic to our economy and make it 
harder for American families to make ends meet.
    Republicans are also rushing the bill to the floor without 
holding any hearings or a markup. So much for regular order. 
Last Congress, when Democrats were in charge, we held several 
days of markups that included robust debates for both the 
American Rescue Plan and the Inflation Reduction Act. But now 
they are in charge, and Republicans are moving to the Default 
on America Act without an open or transparent process, or any 
process at all, really. And we haven't had the opportunity to 
hear from experts about the bill's implications, probably 
because Republicans know how deeply unpopular these ideas are.
    So if Republicans succeed in cutting $100 billion from 
Medicaid, the consequences will be devastating and will be felt 
by every beneficiary, provider, and plan that relies on 
Medicaid. Republicans claim their bill would encourage Medicaid 
beneficiaries to work, but it is clear that this is just a 
pretext to cut Medicaid.
    As a reminder, the Congressional Budget Office found that 
Medicaid work requirements do not increase employment. They 
merely result in individuals losing coverage as a result of 
bureaucratic red tape. Two-thirds of adults on Medicaid are 
already working, and those who are not generally have caregiver 
responsibilities, are dealing with physical or mental health 
issues that make work difficult, or are experiencing other 
barriers to unemployment like lack of education or training. If 
Republicans actually cared about increasing employment among 
Medicaid beneficiaries, they would have included policies to 
address those barriers.
    Now, turning to the topic of today's hearing, I do believe 
we should be working together to bring greater transparency and 
competition to our healthcare system. But I have some concerns 
about the process leading up to today's hearing.
    My Republican colleagues shared a vast majority of the 
discussion drafts we will be discussing a week before the 
hearing was noticed. Given the broad array of topics and bills, 
I am disappointed that we did not have adequate time to fully 
vet some of these policies and provide the minority's input 
from the beginning.
    So I hope my Republican colleagues will commit to work in a 
bipartisan manner as we consider these policies moving forward. 
And I know that the Ranking Member Rodgers has already said 
that she is committed to that. After all, we have been working 
together on H.R. 2691, the Transparent Price Act, which I 
introduced with Chair Rodgers.
    Patients deserve greater transparency in the prices they 
pay for healthcare. Today consumers are not able to easily 
obtain price information on healthcare services. Sometimes the 
price information that is provided is inaccurate and 
misleading, making it difficult to compare across providers or 
determine the true value of the care. And I know that we are 
going to work on that together. I just heard the chairwoman, 
Chairwoman Rodgers, say that.
    I am also concerned by reports that many hospitals are 
either acting slowly or not yet complying with the hospital 
price transparency final rule, making it even more difficult 
for consumers to access price information. H.R. 2691 codifies 
the existing requirements for both hospitals and insurers, and 
it will also improve the accessibility and usability of the 
price information for consumers.
    I am also pleased we are considering two bills that will 
increase transparency into pharmacy benefit manager practices 
by helping employers, consumers, and State Medicaid agencies 
better understand drug price information which can help lower 
healthcare costs.
    We will also discuss legislation that I support to cancel 
the $8 billion in cuts currently scheduled for Federal payments 
to Medicaid disproportionate share hospitals, and a bill to 
require hospitals to disclose ownership data. Studies show that 
health consolidation is leading to higher care prices for 
consumers, and I am particularly concerned about the role of 
private equity in hospital consolidation. I look forward to 
hearing from the witnesses on how these trends may be impacting 
healthcare affordability and access to coverage.
    So I look forward to the witnesses' testimony.
    [The prepared statement of Mr. Pallone follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pallone. And with that, Mr. Chairman, I yield back.
    Mr. Guthrie. Thank you. The gentleman yields back. And I 
will just say that this is a bipartisan hearing, and we want to 
work together as we move forward to see if we can get the 
bipartisan solutions on the bills that you referenced, as the 
chairman committed to. So thanks.
    So this morning we have with us today the Administrator for 
Centers for Medicare and Medicaid Services.
    We appreciate you being here. And as you know, you have 5 
minutes for an opening statement, and the yellow light will 
give you kind of an update. And I know you have a tight 
timeframe, so we are going to try to keep our questions to the 
5 minutes as well. So we need to move forward so everybody gets 
a chance to answer their questions.
    So I would like to welcome the Administrator here today, 
Ms. Chiquita Brooks-LaSure, and we appreciate you being here, 
and you are now recognized for 5 minutes for your opening 
statement.

 STATEMENT OF THE HON. CHIQUITA BROOKS-LaSURE, ADMINISTRATOR, 
           CENTERS FOR MEDICARE AND MEDICAID SERVICES

    Ms. Brooks-LaSure. Thank you so much, Chairs McMorris 
Rodgers and Guthrie, Ranking Members Pallone and Eshoo, and 
members of the subcommittee. I just really want to thank you 
for the opportunity to discuss the Centers for Medicare and 
Medicaid Services' work to lower costs and increase 
transparency across the healthcare system.
    As the Nation's largest payer for healthcare, CMS plays a 
key role in incentivizing high-quality care and smarter 
spending across the healthcare system. And I would like to 
highlight some of the work we have been doing.
    Drug costs account for a growing portion of overall 
healthcare costs, and too often people are forced to choose 
between paying for their prescriptions or meeting other basic 
needs. CMS is hard at work implementing the Inflation Reduction 
Act. And thanks to this law, people with Medicare prescription 
drug coverage are already beginning to see lower out-of-pocket 
costs. This includes Medicare beneficiaries that need insulin, 
which now will no longer pay--will pay $35 for a month's 
supply.
    CMS has also taken action to discourage drug companies from 
increasing their prices faster than the rate of inflation. And 
we continue to work on the IRA provisions that cap total out-
of-pocket drug costs and allow Medicare to negotiate with drug 
manufacturers for the first time in the history of the program. 
Our efforts are lowering costs for people with Medicare and the 
program overall while improving access to innovative, 
lifesaving treatments.
    In addition to lowering costs, CMS's efforts to increase 
transparency across the healthcare system will incentivize 
competition, improve consumer experience, and result in 
additional savings for our healthcare system and for patients. 
People should know the cost of their healthcare services and 
what they will be required to pay before they seek care. CMS is 
working hard to get this information into their hands, the CMS 
hospital price transparency rules providing public access to 
standard hospital charges, and we will continue to work to 
ensure that available information is meaningful and useful.
    It is important that this information is available to all 
Americans, which is why we took action last year to increase 
the penalty for noncompliance to over $2 million annually. And 
I am pleased to announce today that we are updating our 
enforcement process to shorten the time by which hospitals must 
come into compliance after a deficiency is identified. Further, 
for hospitals that have not made any good-faith attempt to 
satisfy the requirements, we will no longer be sending a 
warning notice, and we will move straight to the corrective 
action plan phase.
    In addition to improving the transparency of hospital 
prices, we are working to improve transparency from private 
health plans so that people know the cost of a covered item or 
service before receiving care. These data will help people to 
make informed decisions, and allows third-party developers to 
create price transparency tools that will help people shop for 
health plans and for doctors. It is critical to provide 
Americans with cost information before they receive care.
    Additionally, CMS is also working to implement the No 
Surprises Act to protect patients from surprise medical bills 
after care has been received.
    We are also committed to expanding transparency efforts 
across healthcare consolidation and its impacts on prices. In 
particular, consolidation in healthcare can leave rural and 
underserved areas with inadequate or more expensive healthcare 
options.
    CMS is working to make public information on mergers, 
acquisitions, consolidations, and changes of ownership for 
hospitals and nursing homes enrolled in Medicare. Making 
facility ownership information available supports efforts to 
identify poor performers, better understand the impacts of 
consolidation, and help patients and caregivers make more 
informed decisions about their care.
    Thank you for allowing me to highlight some of CMS's 
efforts to lower costs and increase transparency while 
continuing to expand access to high-quality, affordable care. 
We are committed to building on the work that we have done to 
address rising healthcare costs in a way that helps us advance 
health equity, expand access, improve health outcomes, and 
increase transparency. Thank you.
    [The prepared statement of Ms. Brooks-LaSure follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. Thank you, I appreciate that. And I will say 
that you have a hard stop. We want everybody to have the 
opportunity to ask questions, so I am going to be enforcing the 
5-minute rule on questions.
    So don't ask a question with 10 seconds left to go. So I 
will get started. I will--the Chair will now recognize myself 
for 5 minutes for questions.
    And Administrator Brooks-LaSure, we will start with 
Alzheimer's disease. It has touched every family. And there has 
been a lot of attention to a decision to severely--by CMS--to 
severely restrict access to an entire class of FDA-approved 
Alzheimer's drug treatments. And the Veterans Administration 
announced it will cover one of these therapies, Lecanemab, 
which CMS will only cover in limited circumstances.
    And in the case of Lecanemab, what is unnecessary and 
unreasonable about this FDA-approved drug with the Medicare-age 
patients?
    And would you talk broader, or more of FDA and the 
Alzheimer treatments that have come forward that are only very 
limited cover by CMS?
    Ms. Brooks-LaSure. Thank you so much for the question about 
coverage of Alzheimer's drugs.
    As you know, and we all know, Alzheimer's disease is 
incredibly devastating. And I want to thank all the advocates 
who are caring for the millions of Americans who suffer from a 
devastating illness. And it touches so many families, including 
my own.
    I will start by saying it is CMS's responsibility to make 
sure, when we approach the coverage process, that we evaluate 
all the evidence and, of course, take in the work of the FDA. 
When FDA fully approves drugs--and in this case, for the 
treatment of Alzheimer's disease--that means that the FDA has 
made a determination that it will affect the disease itself. 
And when FDA fully approves drugs for Alzheimer's disease, CMS 
will cover it more broadly.
    What--our requirements are that, once the drug is fully 
approved by the FDA, we encourage doctors and ask doctors who 
are prescribing the medication to make sure that information is 
available through our registry. And we are doing that because 
we need to continue to develop evidence of and understand the 
impact on the drug. But we will----
    Mr. Guthrie. Do you believe CMS would benefit from Congress 
providing greater clarity into the phrase ``reasonable and 
necessary'' in the Medicare program?
    Ms. Brooks-LaSure. I would say that we have very clear 
guidelines, and we have outlined in our national coverage 
determinations how we approach our responsibility that we have 
from Congress, which is to evaluate coverage in Medicare 
populations. And we absolutely take the work that we get from 
the FDA as we consider our coverage.
    Mr. Guthrie. OK. I know there are--other Members are going 
to address that as well, so I want to get to one question on 
the bill before us before we move forward. But that is 
concerning to all of us. It is bipartisan. I have heard both 
sides of the aisle talk about the access to this drug for 
Alzheimer's patients, and we are all concerned about it.
    But before leaving office, President Trump finalized a 
Medicaid rule in place to permit manufacturers to submit 
multiple best prices, including a bundle sell option as well as 
value-based best price, to submit to a non-VBP best price 
opinion--option as well. We will have legislation, bipartisan 
legislation with myself and Chair--or Ranking Member Eshoo. 
H.R. 266, the MVP Act, would codify the rule. Will you commit 
to working with Ranking Member Eshoo and me to codify this 
rule?
    Ms. Brooks-LaSure. I will absolutely commit to working with 
you on outcomes-based options for Medicaid. This is something 
that we are very interested in in the administration, and have 
started to put together a proposal from the Innovation Center 
and would love to work with you on that.
    Mr. Guthrie. So could you go further, and just discuss how 
this rule--because we have talked about the expensive 
treatments for sickle cell, for hemophilia that could--people 
who suffer from these diseases could greatly benefit from these 
programs. Could you just go and discuss more how these 
therapies will help patients by providing flexibility for 
Medicaid programs to structure them?
    Ms. Brooks-LaSure. Certainly. And while I won't talk about 
specific proposals, I will say that what we have seen across 
States is them needing to have more strategies as innovative 
therapies come to market that affect a limited number of people 
but where these illnesses are incredibly devastating.
    And you talked about sickle cell disease. There are others, 
but sickle cell in particular, where it is so important that 
people know--that the doctors know how to treat that disease, 
and that they--people get those therapies. It is critical that 
States are able to cover those in a way that is affordable to 
them so that we can ensure access, and I would love to work 
with you on additional strategies.
    Mr. Guthrie. Yes, I remember talking with Dr. Francis 
Collins, the previous NIH director, and he said that--he said, 
``I never used the word 'cure' for a lot of diseases, but 
sickle cell can be cured with some of these treatments, and we 
need to make sure people have access to them.''
    Ms. Brooks-LaSure. Absolutely.
    Mr. Guthrie. And so we look forward to--all of us--working 
together with the administration and from our side of the 
Capitol, or the--of DC to make sure we work together to move 
this forward.
    My time has expired, and the Chair now recognizes the 
ranking member for 5 minutes for questions.
    Ms. Eshoo. Thank you, Mr. Chairman.
    I am very glad that the chairman raised the issue of 
Alzheimer's, the drug. We did not have a conversation with each 
other coming into this hearing, but I want to take up the same 
issue. And it is a demonstration that there is a really deep 
concern on both sides of the aisle on this.
    I see, as I expressed to you when we spoke, a disconnect 
between CMS, the FDA, and the VA on new treatments for mild 
Alzheimer's. By July 6th, as you know, the FDA will determine 
whether Lecanemab is--it is a new treatment for mild 
Alzheimer's--whether it--that it will qualify for full 
approval. This will be the traditional FDA approval that is the 
gold standard, not an accelerated approval. That is already in 
place.
    The VA has already said it will cover this drug as long as 
patients meet the criteria for use. Currently--and I am sure 
you are well aware--tens of thousands of veterans with mild 
Alzheimer's can go to their VA neurologist, be assessed, and 
receive a prescription. But it is unclear whether the estimated 
1 million Medicare patients who could benefit from the 
treatment would be able to access the FDA-approved drug in 
July. And in order to access the drug, they may need to enroll 
in what you described to me as a CMS-approved prospective 
comparative study like a registry.
    So I have just a few quick questions. They are not long 
answers, they are really yes-or-no.
    Has Medicare ever required participation in a registry for 
a fully FDA-approved drug before?
    Ms. Brooks-LaSure. Let me start by saying that registries 
are not a study. So--just to be clear.
    Ms. Eshoo. But have you ever done this before?
    Ms. Brooks-LaSure. We have. Registries are something that 
we have done, but I can get back to you on details about that.
    Ms. Eshoo. Has CMS published any details about the required 
registry for fully approved Alzheimer's treatments, besides the 
general description that is in the April 22 memo?
    Ms. Brooks-LaSure. Not beyond that, but we----
    Ms. Eshoo. OK.
    Ms. Brooks-LaSure [continuing]. Intend----
    Ms. Eshoo. Do you know of any doctors' offices or health 
systems who are prepared to enroll Medicare Alzheimer's 
patients in the registry beginning in July?
    Ms. Brooks-LaSure. We welcome doctors to do so.
    Ms. Eshoo. No, but have you--do you know of any that are 
prepared to enroll, any doctors----
    Ms. Brooks-LaSure. We wouldn't know that until----
    Ms. Eshoo [continuing]. Or health systems?
    Ms. Brooks-LaSure. We wouldn't know that until FDA fully--
--
    Ms. Eshoo. Have you published any information to 
Alzheimer's patients and their families explaining how to get 
the drug under Medicare?
    Ms. Brooks-LaSure. We will do so.
    Ms. Eshoo. But it is not done.
    Ms. Brooks-LaSure. That is correct.
    Ms. Eshoo. OK. So here is the thing. If doctors don't know, 
if patients don't know, and Medicare doesn't really seem to 
know what this registry entails, how are Medicare patients 
going to get the drug potentially beginning in July? That is 
really the $64,000 question in my mind.
    Let me describe to you two constituents. One is a 
grandfather and a veteran. He has coverage. He has been 
diagnosed. His wife was also diagnosed. She is not a veteran. 
How do I, or any of us, explain that to our constituents?
    This is, as you said and have said many times, this is a 
devastating disease, and I don't think this can be treated as 
17 months of a little additional hope.
    Any--this drug comes out, families across the country are 
going to be clamoring for it. Medicare is not prepared, from 
your answers. You are adding layers to this. The VA is doing 
something very different. And there is, as I said, there is a 
huge concern here.
    This is a progressive disease. We know that early 
intervention with progressive diseases is really essential.
    So I hope that you will leave this hearing with a new 
commitment and a new view of how to do this, because you are 
not prepared. And the beginning of July is, like, 2 months 
away--8, 9 weeks away.
    So I will give you the opportunity to----
    Mr. Guthrie. We are out of----
    Ms. Eshoo. Well, all right, yes.
    Mr. Guthrie. I am sorry, we are out of time. Hopefully, you 
will have a chance during the hearing to answer that----
    Ms. Eshoo. I really, really----
    Mr. Guthrie [continuing]. Because I want to hear your 
answer, as well.
    Ms. Eshoo. Well, OK.
    Mr. Guthrie. Absolutely.
    Ms. Eshoo. Thank you, Mr. Chairman.
    Mr. Guthrie. The Chair now recognizes Dr. Burgess for 5 
minutes for questions.
    Mr. Burgess. I thank the chairman and the ranking member 
for bringing this up. I will just stay in the same vein for a 
moment.
    The AMA puts out a--what is called a Morning Rounds every 
morning. Yesterday the AMA Morning Rounds was--talked about how 
scientists are targeting mild cognitive impairment, the early 
Alzheimer's stages, with aggressive treatment. And if we don't 
have these things in our armamentarium because--not because of 
the FDA, which is a perennial problem, but it is you, with a 
coverage determination that removes a tool from what doctors 
are able to use.
    It actually wasn't what I wanted to talk about. There's a 
lot of things. I am going to submit some stuff to you in--for 
questions for the record.
    I do have to say, you know, Texas has had an issue with 
expanding Medicaid coverage to 6 months, which they did in the 
last legislative session. It actually was blocked by CMS for 
reasons that I don't understand. You--I wrote you a letter, the 
Texas delegation wrote you a letter. You responded and said you 
received it last November, but it really wasn't a satisfactory 
response.
    I know the State legislature is working on something now. 
Yes, time marches on. Things are likely to change, but CMS 
needs to provide us an answer why they blocked this action by 
the Texas legislature, which I feel would have helped patients 
who were falling out of coverage after 3 months, as used to be 
standard practice. Granted, 6 months is not as good as 12 
months, but it was a start, and Texas should have been allowed 
to have that State flexibility.
    Now, what I really want to talk about is the bill that does 
away with the prohibition in Medicare physician-owned 
hospitals. And we have talked about this a lot in this 
committee. It is just fundamentally wrong that, because of an 
academic degree that I have, I am not able to engage in a 
lawful practice in this country. And yet you brought up in your 
testimony that consolidation in healthcare allows hospitals to 
own doctors. This is nuts. Hospitals can own doctors, but 
doctors can't own hospitals. Why is that OK?
    So I do have a number of statements for the record. I have 
got a study that I want to submit for the record, Mr. Chairman.
    Mr. Guthrie. Without objection, so ordered.
    Mr. Burgess. So let me just ask you, are you doing an 
analysis on--with this consolidation rulemaking that you are 
working on or anything in the CMMI model development, are you 
looking at removal of this prohibition on physician-owned 
hospitals?
    Ms. Brooks-LaSure. Thank you for the question. We need to 
follow the statute, which sets out what the requirements are 
and when--and in terms of physician-owned hospitals, which we 
are doing so.
    And in terms of consolidation, our focus and our authority 
is around transparency. And that is why we have been working 
very hard to make it clear where we have ownership in nursing 
homes, hospitals, hospice, home health. That is where our 
authority lies.
    Mr. Burgess. Well, look. It was a physician-owned hospital 
in the Rio Grande Valley that saved a lot of people during the 
pandemic. Had they not stepped up--and they had to get a 
special waiver from the agency in order to just take care of 
the patient population they had to take care of, all because 
they were a physician-owned hospital.
    So I am just simply going to ask, will you commit to work 
with me on this bipartisan issue to ensure CMS examines the 
considerations in the rulemaking process?
    Ms. Brooks-LaSure. I would be happy to work with you.
    Mr. Burgess. And let me further ask--CMS, in its recent 
inpatient prospective payment system proposed rule--you 
narrowed the opportunity for physician-owned hospitals to 
expand, raising barriers to entry and increasing costs. Will 
you work with me on that?
    Ms. Brooks-LaSure. I would absolutely work with you where--
notice and comment, and happy to work with you on it.
    Mr. Burgess. Are you aware of a working paper coauthored by 
the Department of Justice and Federal Trade Commission staff 
addressing hospital competition and restrictions on physician-
owned hospitals?
    Ms. Brooks-LaSure. I am definitely aware that DoJ is 
working on hospital consolidation.
    Mr. Burgess. So the Biden Executive order notes the need 
for improved labor market competition. This working paper notes 
that repealing the ban on physician-owned hospitals will 
increase labor market competition. Do you agree with that?
    Ms. Brooks-LaSure. I would have to review the document, 
thank you.
    Mr. Burgess. And we will make sure you have it available.
    Look, we talk about access and particularly rural access. 
Physician-owned hospitals is a way to rapidly provide that 
access. And again, it is just fundamentally wrong that a 
hospital can own a doctor, but a doctor can't own a hospital.
    Thank you, Mr. Chairman. I will yield back.
    Mr. Guthrie. Thank you. I thank the gentleman for yielding 
back. The Chair now recognizes my friend from New Hampshire, 
Ms. Kuster, for 5 minutes.
    Ms. Kuster. Thank you, Mr. Chairman, and thank you for 
holding this hearing.
    I want to thank all of the guests in the audience and my 
colleagues for addressing Alzheimer's. This was something that 
we lived with in our family, and I appreciate your advocacy.
    I am going to turn to a different topic. I am glad to see 
that my bill, the PBM Accountability Act, was included for 
discussion. I want to thank the Chair. It is great to work with 
you, Chairman Guthrie and Ranking Member Eshoo and Congressman 
Buddy Carter, to introduce this legislation that brings 
transparency to pharmacy benefit manager operations and lowers 
costs for patients.
    Administrator Brooks-LaSure, thanks so much for your 
testimony. I would like to focus on the challenges facing the 
Medicaid program, particularly the unwinding process and the 
threat from our colleagues on the other side of the aisle of 
work requirements.
    In the past 3 years, Medicaid enrollment has grown 
substantially and the number of uninsured Americans, 
fortunately, has dropped. Nearly 95 million people had health 
insurance through Medicaid as of March of 2023. As we move to a 
new phase of the pandemic with the end of the public health 
emergency and States beginning the process of redetermining who 
is eligible for Medicaid coverage, we must recognize the risk 
to individuals and their families and the public health risks 
that we all became so aware of during the pandemic.
    Estimates find that as many as 15 million Americans could 
lose health insurance coverage because of these 
redeterminations, including 6.8 million who would still be 
eligible for coverage and incorrectly lose their Medicaid. 
These numbers are staggering, but they can hide the true 
challenge that people in every single district across this 
country will experience.
    Picture a family who loses coverage and is unable to access 
care, preventative services, behavioral healthcare, necessary 
medications because of factors completely outside their 
control: 6.8 million people will have an experience where 
logistics lead to them getting kicked off the Medicaid rolls, 
whether it be agency staffing shortages, low electronic renewal 
rates, or outreach barriers.
    I want to ask you, Administrator, can you detail the 
efforts that CMS has made in coordination with States to 
prevent people from unnecessarily losing their Medicaid 
coverage?
    Ms. Brooks-LaSure. Thank you so much for highlighting how 
important of an issue it is for us to make sure we hold on to 
the millions of people who have coverage in the Medicaid 
program.
    If we have learned anything over the last couple of years, 
it is how important it is that everyone has access to 
affordable healthcare in this country. It is important for the 
individuals themselves, their families, and for all of us to be 
safe and secure. We are at record-low levels of uninsured 
across this country, with over 92 million people who are 
enrolled in Medicaid and CHIP, many of them caregivers, hard-
working individuals who have multiple jobs, who are in school, 
who are taking care of family and friends.
    And so, for--when we think about the unwinding, what we are 
doing here at CMS is working very closely with States both on 
the Medicaid side as well as the marketplace side, and thinking 
about healthcare.gov to make sure that people are aware of the 
need to update their contact information and update their 
information if they get unwinding letters from States. And we 
are encouraging States to automatically enroll as much as they 
can, to automatically rely on data that they have in house.
    We are also wanting to work with partners, community 
organizations, health plans, providers, everyone who touches a 
Medicare--Medicaid beneficiary. And I have been thrilled with 
some of the work that the private sector has been interested in 
doing and already beginning to make sure that people are aware 
of the importance of staying on their healthcare coverage.
    Ms. Kuster. Thank you. Medicaid, as we know, is the single 
largest payer for mental health services in the U.S. and is 
increasingly playing a larger role in the reimbursement for 
substance use disorder services.
    My time is very short, but I am very concerned that recent 
analysis shows that the work requirement in a Medicaid program 
would jeopardize access to care for 21 million people, leaving 
millions without critical coverage when seeking mental health 
and recovery. Would you--would instituting Medicaid work 
requirements affect how patients and communities respond?
    Ms. Brooks-LaSure. What we have found over time is that 
whenever we put up red tape barriers to people being able to 
enroll in coverage----
    Mr. Guthrie. Your time is expired.
    Ms. Brooks-LaSure [continuing]. It affects----
    Mr. Guthrie [continuing]. The 5 minutes. I apologize. 
Hopefully, you will have an opportunity to answer as we move 
forward.
    Ms. Kuster. Thank you very much, and I will----
    Mr. Guthrie. Thank you.
    Ms. Kuster [continuing]. Yield back.
    Mr. Guthrie. The gentlelady yields back. The Chair 
recognizes Mr. Latta from Ohio for 5 minutes for questions.
    Mr. Latta. Well, thanks, Mr. Chairman, and thanks for 
holding this very important hearing today.
    And, you know, there is broad bipartisan consensus that the 
price of healthcare is unaffordable and that government 
spending is out of control. As has been pointed out a little 
bit earlier, the United States spent about 4.3 trillion on 
healthcare in 2021, which represents about one-fifth of the 
U.S. gross domestic product. Unfortunately, without 
congressional action, healthcare spending is expected to 
increase to nearly 6.8 trillion by 2030. We all know this is 
unmanageable, and we need to find some solutions so we can put 
the patients first.
    And, you know, I--in reading your testimony, when you were 
talking about the income--or the Inflation Reduction Act, under 
the IRA you state that lowers prescription drug spending for 
millions of people with Medicare, redesigns Part D, and keeps 
drug premiums stable, and strengthens the Medicare program both 
now and in the long term.
    But let me ask this. You know, we know one thing: The 
United States leads the world out there in finding drug and new 
cures. And I know the gentlelady from California was talking 
about on the Alzheimer's side. But, you know, when we just went 
through COVID, I remember sitting in those early meetings 
around the table when COVID was just at its--we were just 
starting to deal with it. And sitting around with individuals 
from companies--and within a year, you know, we had three 
different types of medications out there. Nowhere else in the 
world could--did that occur but here in the United States. But 
it is because of--you know, we have here in this country.
    Is there a concern at CMS that with what has been placed in 
the law right now could inhibit the creation of these new drugs 
and cures?
    Because, again, it is just not one type of a cure out there 
that we need. In Alzheimer's, a cure that we have got to have--
and I know on both sides of our families that we have seen the 
devastating effect of that horrible, horrible disease. But I am 
really concerned about what is going to happen into the future 
for companies being able to go out there and find these drugs, 
and make--get these drugs to the market.
    Ms. Brooks-LaSure. We share the goal that--of making sure 
that drug companies still absolutely have the incentive to be 
as innovative as they have been. And you are so right, that the 
drug companies were incredible in making sure that we were safe 
from COVID-19 with coming--bringing vaccines to market. And it 
is our every intention at CMS to make sure that we run the drug 
negotiation process in a way that continues to foster 
innovation but also makes sure that we can provide it to 
Medicare beneficiaries.
    Mr. Latta. OK, let me follow up, though. Because when you 
say that you are going to have that innovation out there, how 
are you going to provide that?
    Because, again, this is something that everybody is talking 
about right now. But how is CMS going to make sure that you are 
going to be able to have--that the United States leads the 
world, and everybody sees is the envy of the world, in getting, 
you know, lifesaving cures to the market that we have to have?
    Ms. Brooks-LaSure. I would answer your question in two 
ways.
    First of all, we are working very closely with drug 
companies as we work on our guidance, and that is something I 
have personally done, as well as our staff have met with many, 
many companies and talked to them through what our process is 
going to be.
    Second of all, the drug negotiation is something drug 
companies do every day. They do it with companies all across 
America, as well as, of course, the world. But they do it in 
our drug benefit right now. And we are building on that work, 
and taking all of that into account.
    The drugs that we will be negotiating are drugs that have 
been on the market for many, many years. There are drugs that, 
by law, are going to be drugs that are top spenders where they 
have been on market for many years. But we will continue to 
work with policymakers and stakeholders to listen to concerns, 
listen to issues that they raise with their guidance, just like 
we are right this minute.
    Mr. Latta. Well, in my last 50 seconds--I know the chairman 
is being very good on keeping the time--because, you know, the 
United States--and we have had the hearings in here, we have 
seen the facts that around the--not only around the--you know, 
this hemisphere, but around the globe, when a lot of countries 
out there say what their costs are, really it is not apples to 
apples out there. It is really--because what is happening out 
there, we are seeing that the United States has a lot more 
drugs that could be provided, but other countries that are out 
there, they only have a certain number of drugs, and then those 
individuals might need a certain type of cancer drug, and the 
Government says, ``You can't have it, you are going to have to 
have this,'' but it might not be the drug that they are going 
to have to have for--to get them cured.
    So I just want to make sure that CMS always remembers that 
the United States is going to lead out there, because it is 
absolutely essential that we do to make sure that we have the 
best healthcare and the cures here, in the United States.
    Mr. Chairman, I yield back.
    Mr. Guthrie. Thank you. The gentleman yields back. The 
Chair now recognizes Mr. Cardenas from California for 5 
minutes.
    Mr. Cardenas. Thank you very much, Chairman Guthrie, and 
also Ranking Member Eshoo, for holding this hearing.
    And to Administrator Brooks-LaSure, thank you so much for 
weighing in on these transparency-related issues.
    Before discussing proposals we are considering today, I 
feel like I must mention the threats we are seeing to Medicaid. 
There is a bill before us this very week that will institute 
what amounts to a significant cut to Medicaid access under the 
guise of work requirements. In fact, just yesterday HHS 
released new analysis showing that around 21 million Americans' 
coverage and access to care would be threatened under the 
Medicaid work requirement proposal put forth by my Republican 
colleagues.
    We have seen this before. And not only does it force people 
out of their insurance, it does nothing to boost employment. We 
can look at Arkansas as a case study. The State implemented 
these work and reporting requirements, and, as a result, 
thousands of people were disenrolled for failure to comply. For 
many of these people, they were kicked off not just because 
they were--not because they were ineligible, but because it was 
so difficult to navigate the reporting process. And that is 
really the point. The proposal is cruel, and a thinly veiled 
attempt to restrict access to coverage to American citizens, 
which brings me to my question.
    Administrator Brooks-LaSure, why is access to Medicaid so 
critical, and how do work requirements and the reporting around 
them further disadvantage already vulnerable populations?
    Ms. Brooks-LaSure. Thank you so much for your question 
about how important coverage is.
    I think we have gotten a lesson, as a country, of how 
important it is, not only with the COVID-19 pandemic, where it 
was critical that people could have access to vaccines and 
treatments, but also when we think about tackling our other 
crises in this country like maternal health, where we need to 
make sure that women are getting healthcare before they are 
pregnant, while they are pregnant, and afterwards to address 
health outcomes and so on down the list in terms of mental 
health.
    You mentioned the experience that we saw in Arkansas, where 
people who would have met the requirements where they were 
working or where they would have been exempted lost coverage. 
That is what often happens in these situations. I spoke to a 
family during my time pre-CMS Administrator, when work 
requirements were in discussions. And I remember talking to a 
woman whose brother was disabled who absolutely would have 
qualified for an exemption, but she was very overwhelmed by the 
paperwork that she needed to fill out and the--and how 
confusing it was.
    That is what happens when we put up barriers to people 
getting care, and it is critical that we make sure that people 
in this country are covered, not just for them, but for all of 
us.
    Mr. Cardenas. Is depression a medical condition?
    Ms. Brooks-LaSure. Depression is a medical condition.
    Mr. Cardenas. Could somebody find themselves diagnosed with 
clinical depression and want to work but for a period of time 
is having a difficulty being employed?
    If that is the case, and the person isn't employed, and 
they are not able to navigate the system of paperwork, would 
that be denying somebody access to healthcare that they 
obviously critically need?
    Ms. Brooks-LaSure. It is so important that people are 
healthy so that they are able to work, so that they are able to 
live their lives. And absolutely, what we have seen is that 
people have gotten illnesses when they are uninsured, and that 
has prohibited their ability to be in the workforce. And that 
is what we don't want as a country. To make sure our economy 
continues to grow, to make sure that people are able to achieve 
the American dream, it is critical that we have that basic 
protection.
    Mr. Cardenas. Thank you. And I am very concerned about 
these requirements, and I am grateful for your defense of 
Medicaid on the record.
    Now I also want to be sure to discuss the role of safety 
net hospitals in providing critical care to medically 
underserved and low-income communities. I am glad to see policy 
proposals that would delay Medicaid DSH cuts, as this funding 
has been critical to upholding services in safety net settings.
    Administrator Brooks-LaSure, if we do not step in, what 
type of impact would you expect for safety net hospitals, many 
of which are still struggling in the wake of COVID-19 pandemic, 
which is still with us?
    Ms. Brooks-LaSure. Yes, hospitals have been on the 
forefront of the pandemic and have been keeping so many of us 
safe and healthy through the last couple of years.
    We know that the safety net has--disproportionately serves 
the underserved, and DSH payments do go to help support the 
payments for particularly them supporting the uninsured.
    Mr. Cardenas. Thank you so much. My time having been 
expired----
    Mr. Guthrie. OK, the----
    Mr. Cardenas [continuing]. I yield back.
    Mr. Guthrie. The gentleman yields back. I appreciate that. 
The Chair now recognizes the Chair of the full committee, Chair 
McMorris Rodgers, for 5 minutes.
    Mrs. Rodgers. Thank you, Mr. Chairman.
    Just to clarify regarding the proposal that the Republicans 
have on the floor for work requirements for Medicaid, the 
Democrats keep talking about millions. CBO just yesterday 
suggested that it estimated 600,000 may lose their Medicaid if 
these able-bodied adults with no children choose not to work, 
volunteer, or get training 20 hours a week. So if you are 
pregnant, you are not included. If you are a parent with 
children, not included. If you are mentally or physically 
unfit, the bill text is very clear, not included.
    And I just want to get that on the record, because I don't 
want people to be concerned, people that--we all believe it is 
very important that Medicaid is a very important safety net. 
What we are trying to do is protect that safety net and 
encourage the able-bodied adults without children to work, 
volunteer, or get some training, come alongside them, and it is 
their decision.
    Administrator, if--I wanted to ask some questions here. If 
you could ask Congress--you know, back to transparency now--if 
you could ask Congress for one specific improvement to price 
transparency rules, what would they be?
    Ms. Brooks-LaSure. What a question. I think that we have 
been given authority on price transparency, as we have talked 
about, with health plans and hospitals.
    I will say that some of our transparency--our guidance on 
hospitals is probably very limited; there is one sentence in 
the statute. But I really would love to work with you to 
increase our authority on price transparency.
    Mrs. Rodgers. OK, thank you for that. Ranking Member 
Pallone and I have proposed improvements to these rules, and I 
am glad that in your testimony you mentioned the importance of 
needing to standardize hospital price transparency data.
    I believe that you are still not doing enough with the 
authority that you have, and there hasn't been enough 
enforcement across the board. I am specifically disappointed 
that you did not mention enforcing the existing requirement 
that PBMs disclose their drug prices. That is something that is 
included in the bill. So I just would like to ask, what has 
kept you from doing more to enforce these requirements?
    Ms. Brooks-LaSure. Certainly, and thank you for your 
leadership on price transparency and the push to encourage all 
of the entities to submit data.
    On PBMs in particular, and price transparency on 
prescription drugs, because our rules interacted with new 
legislation that passed in No Surprises Act, we took a step and 
wanted to make sure it was coordinated, but we are committed to 
continuing to make sure----
    Mrs. Rodgers. So the----
    Ms. Brooks-LaSure [continuing]. That information----
    Mrs. Rodgers. Thank you. I will just take my--reclaiming my 
time. There is a lot more to be done. And this hearing is about 
competition, transparency. Healthcare businesses like PBMs 
continue to rapidly consolidate, finding new and innovative 
ways to add complexity, hide where the money is going. And we 
are fighting to pass strong transparency laws.
    I bring up these key transparency provisions because, from 
the last bipartisan effort to address cost, they are not being 
implemented. Congress banned gag clauses, but I routinely hear 
from employers who cannot access their own health claims data. 
Patients are supposed to get good-faith estimates on cost when 
they schedule an appointment, but CMS is not enforcing this for 
patients with employer-sponsored insurance.
    And I do not want this committee's efforts--we are going 
through a lot of work, hearings, bills to hopefully get a 
bill--you know, many bills--signed into law. I don't want it to 
languish for years while CMS prioritizes their other agenda. So 
failure to do the implementation harms the very patients that 
we are coming together to help in a bipartisan way. So will you 
commit to work with this committee to get properly implemented 
and enforced the bipartisan legislation?
    Ms. Brooks-LaSure. We continue to work to enforce the law, 
and absolutely will work with you on that.
    Mrs. Rodgers. Thank you. We are seeing a dramatic growth in 
a newer kind of consolidation under payers. In other words, 
insurance companies purchasing healthcare providers. And to a 
patient it means your insurance company might own the doctor 
you see, the pharmacy where you get your medicine, and the PBM 
that decides how much you pay for that medicine. And I think we 
all have questions about what that means for patients and the 
costs that they pay and the quality of care that they receive.
    Administrator, one of the proposals before us contemplates 
collecting numerous data points to tell us about the health of 
and the spending on patients who see doctors or pharmacies 
owned by insurance companies and PBMs, compared to patients 
that see independent doctors and pharmacies. Have you attempted 
to collect this data to better understand the effects of 
vertical integration?
    Ms. Brooks-LaSure. I do not believe we have authority to do 
so, but I am happy to look in at the issue.
    Mrs. Rodgers. OK.
    Ms. Brooks-LaSure. But we very much support transparency 
around ownership and increased transparency.
    Mrs. Rodgers. OK, lots more to come. Thanks for being here.
    I yield back.
    Mr. Guthrie. Thank you. The gentlelady yields back. The 
Chair recognizes the Ranking Member Pallone for 5 minutes.
    Mr. Pallone. Thank you, Mr. Chairman.
    Administrator Brooks-LaSure, thank you for coming here 
today. And as I am sure you have seen, last week the 
Republicans released their bill, what I call Default on America 
Act. And of course, it includes a provision that would threaten 
access to care for millions of low-income Americans and cut 
over $100 billion from Medicaid.
    So last Congress, when Democrats were moving through 
reconciliation, Republicans repeatedly complained about the 
lack of regular order. And of course, we put those bills 
through multiple days of markups, considered probably dozens of 
Republican amendments, and debated for hours. And Republicans 
are skipping all of that and trying to rush a bill to the floor 
without so much as a hearing today. So I am going to take this 
opportunity to ask some of the questions I would have asked if 
Republicans had been willing to hold themselves to the same 
standards they held Democrats to last Congress.
    And I know you have already been asked about the work 
requirements, but I want a little more information. Would you 
expect people to lose access to health insurance if Medicaid 
were to adopt a work requirement?
    Ms. Brooks-LaSure. I would expect that. And I would say 
again that it is not just people who are subject to the 
requirements that often get caught up in red tape. It is--can 
often be people who are exempted.
    So, for example, in Arkansas what we found is that there 
was an individual who had health insurance, who was working, 
didn't realize that he needed to fill out the paperwork, lost 
his job, lost his insurance, had a health condition that made 
him unable to work. That--those stories replicate across 
barriers so often.
    Mr. Pallone. Now, this--thank you. The Centers for Medicare 
and Medicaid Services have previously said that the 
administrative burden can make it difficult for beneficiaries 
to comply with Medicaid work requirements. Is it fair to say 
that many beneficiaries lose coverage because they get tangled 
up in red tape? And that is, I guess, your example, but if you 
want to----
    Ms. Brooks-LaSure. That is an example. I think we have seen 
it.
    It is also--States are in the process of working on 
unwinding. If--we want them focused on making sure they are 
meeting all the requirements that were established by the 
Congress at the end of the year and making sure, again, that we 
are holding on to coverage so that we are addressing health 
outcomes like maternal health, like mental health, and making 
sure we have a strong and healthy workforce.
    Mr. Pallone. So, Administrator, CMS has said that research 
shows that most Medicaid beneficiaries are either already 
working or subject to an exemption, and that this--and I 
quote--``this makes it challenging for such a work requirement 
to produce any meaningful impact on employment outcomes.''
    In other words, work requirements and Medicaid don't 
actually increase work. Is that correct?
    Ms. Brooks-LaSure. There has been no link when we have seen 
work requirements in States to an increase in employment.
    Mr. Pallone. All right. And to summarize, I mean, again, I 
know you have talked about this quite a bit with some of the 
previous Members asking questions, but to summarize, work 
requirements, in my opinion, won't increase employment. They 
will cause people to lose health insurance, and many of these 
people will still be eligible and just get caught up in the red 
tape, and is that correct?
    And if you wanted to talk about----
    Ms. Brooks-LaSure. That is certainly our expectation, and 
based on our experience over the last many, many decades. When 
we establish new requirements for people, they form barriers to 
the people who are subject to them as well as to others.
    Mr. Pallone. Well, thank you. It is clear from your answers 
that--you know, why Republicans wanted to skip regular order on 
this bill. And that is because the Republicans' so-called work 
requirements is nothing more than another attempt by 
Republicans to take health insurance away from people and cut 
over $100 billion from Medicaid. And I am disappointed that my 
colleagues are choosing to ram this cruel and harmful policy 
through the House of Representatives without so much as a 
hearing. And I hope my colleagues will join me in recognizing 
this bill for what it is: another transparent attempt to take 
healthcare away from millions of Americans, unfortunately.
    And with that, Mr. Chair, I yield back.
    Mr. Guthrie. The gentleman yields back. The Chair now 
recognizes Mr. Griffith of Virginia for 5 minutes for 
questions.
    Mr. Griffith. Good morning. In CMS's recent notice of 
benefit and payment parameters rule, CMS finalized a policy 
that your agency has originally estimated would render more 
than 60,000 plans illegal to be on the ACA exchange. As many as 
2.7 million people may lose their plan or have to scramble to 
try to find a new plan.
    You just finished a whole discussion of people getting 
caught up in the red tape. Madam Administrator, aren't you the 
red tape? Aren't you all the ones who are saying you can't do 
this, you can't do that, particularly when it comes to these 
ACA exchange programs?
    Ms. Brooks-LaSure. I would say that we are working very 
hard to make sure that people can enroll in coverage, and that 
they have good options.
    Mr. Griffith. But you have taken 60,000 options, plans off 
the table.
    Ms. Brooks-LaSure. So the provision that I think you are 
referring to is our requirement around making sure that people 
understand the difference between their plans. People will have 
many dozens of choices. What we found in research and what we 
found from this experience of States----
    Mr. Griffith. And that may be true in some areas, but there 
have been times in my district, a rural district that is 
economically stressed, where there has only been one plan 
available, and now that has changed. There's a couple of plans 
available, but we are not going to have dozens. And then you 
have taken 60,000 plans nationwide across the board off the 
table.
    And on top of that, we have seen price increases in the ACA 
plans. It stands to reason, does it not, that when you limit 
the number of plans, you create an incentive for price 
increases. Isn't that true?
    Ms. Brooks-LaSure. I would disagree.
    Mr. Griffith. OK, you disagree. I want to come back to that 
in a minute.
    Where I had originally planned on starting before you 
talked about getting caught up in red tape, and I am back here 
going, ``But you are the red tape,'' I wanted to talk about 
Alzheimer's. We have got a bunch of folks here from the 
Alzheimer's Association, including a former aide of mine in the 
Virginia legislature, Josh Myers, who is with us today. If you 
look around, you will see a lot of purple behind you.
    This committee worked hard to change the way the FDA did 
its work so that we could get things that--medicines that take 
a long time to show benefit or to have an impact out there on 
the marketplace, because Alzheimer's is not something that you 
cure in a day or a week or 2 weeks. You have got to have years 
of using these medicines, particularly the--if I am saying it 
right--the amyloid plaque medications. And we changed those 
rules. We worked hard in this committee, this subcommittee, so 
that the FDA could approve it.
    My question to you is then, the FDA has approved it; when 
did CMS decide or get authority to operate like a scientific 
regulatory body, when that is the FDA's job? And isn't that 
what you are doing? You have turned yourself into a regulating 
body, a scientific regulatory body, by denying paying for the 
Alzheimer's medication that this subcommittee, and this 
committee on a bipartisan basis, worked hard to make sure was 
available to the patients of Alzheimer's.
    Ms. Brooks-LaSure. Thank you for your question. And as we 
have all been talking about, Alzheimer's disease is incredibly 
devastating, both to the individuals who have it, and the 
families.
    What we--our requirement by law is to do a determination of 
whether a drug is covered--whether it is reasonable and 
necessary for the Medicare population.
    For the drugs that have been a--that have received 
accelerated approval----
    Mr. Griffith. And the FDA says it is reasonable and 
necessary. When the physician says it is reasonable and 
necessary--isn't it true you are just trying to cost shift?
    Ms. Brooks-LaSure. Our decisions are based on our 
requirements, the ones that we need to follow.
    Mr. Griffith. So you say we need to change your laws.
    Ms. Brooks-LaSure. Of course, Congress has the authority--
--
    Mr. Griffith. Has that authority.
    Ms. Brooks-LaSure [continuing]. To change our rules.
    Mr. Griffith. I just don't understand why you are going 
against what our clear wishes were from this committee, this 
subcommittee, and this--and the Congress of the United States.
    I have time maybe to go into one other direction. On those 
plans that you ruled illegal for the ACA, one of those is a 
company that has--is a disrupter. It is trying to try a new 
model where they get rid of a lot of the middlemen and 
therefore don't have a network. They approve all drugs approved 
by the FDA. They will pay for them. It is a novel approach 
coming out of Ohio. You all ruled if you don't have a network, 
you can't be on an ACA plan. How does that make any sense?
    Ms. Brooks-LaSure. I would say what CMS focuses on is 
making sure that we know that if someone is enrolled in a 
health plan, they will have access to their doctors. And so 
that is our----
    Mr. Griffith. Well, this plan allows them access to any 
doctor they want, unlike the other ACA plans. It sounds like to 
me this is exactly what you ought to be moving forward to 
approving.
    I appreciate your time, and I yield back.
    Mr. Guthrie. The time has expired, the gentleman yields 
back. The Chair now recognizes Dr. Ruiz for 5 minutes for 
questions.
    Mr. Ruiz. Thank you. Thank you for holding this important 
hearing.
    Lowering the cost of healthcare along with increasing 
access to care are two of my top priorities. So I am especially 
glad the Supporting Safety Net Hospitals Act, which will 
eliminate the pending cuts to disproportionate share hospital 
payments for the next 2 years, is included in this hearing for 
consideration.
    You see, I grew up, practiced medicine, and now represent a 
district that is woefully medically underserved and in dire 
need of better, more equitable access to healthcare. In my 
district alone, I have four DSH hospitals: Pioneer, El Centro, 
Palo Verde, and San Gorgonio hospitals, all of which will be 
significantly impacted by these cuts. These hospitals that care 
for our most underserved populations are already operating on 
razor-thin margins, and any cuts could mean hospital closures, 
and we certainly cannot risk that. Many of my constituents are 
already forced to travel a significant distance to get to a 
hospital, so any hospital closure will lead to even worse 
access.
    In addition to helping keep the doors open to DSH 
hospitals--or the DSH hospitals' doors open, such as El Centro, 
Pioneer, Palo Verde, San Gorgonio hospitals, we also need to 
address the healthcare provider shortage that is plaguing our 
country. One of the ways that we can do that is by increasing 
the utilization of community health workers and promotoras.
    Administrator Brooks-LaSure, you say in your testimony that 
proposals in the President's budget to invest $8 billion to 
enhance Medicare benefits, such as expanding access to diabetes 
prevention services, behavioral health services, including 
addiction services, nutrition and obesity counseling, and 
community health workers. Can you expand on what the 
administration wants to do to increase access to community 
health workers?
    And what is your understanding between the difference of 
community health workers and promotoras, and will those changes 
also help promotoras?
    Ms. Brooks-LaSure. Thank you so much for your focus on 
making sure that people, particularly the underserved, deliver 
care. And what we know is that there are so many types of 
organizations that are providing critical needs. And you 
mentioned safety net hospitals, which are on the forefront in 
many respects; Community Health Centers, where so many people 
get their private primary care----
    Mr. Ruiz. Let me just kind of refocus, because I only have 
a certain amount of time, and my specific question is can you 
expand on what the administration wants to do to increase 
access to community health workers, or promotoras?
    Ms. Brooks-LaSure. So we are very committed to making sure 
that people who are helping to make sure that folks are 
connected to healthcare coverage and healthcare services, we 
are using our authority where we can, and welcome the 
opportunity to continue.
    Mr. Ruiz. OK, thank you. I am working on legislation on--to 
increase access to community health workers and promotoras, and 
would love to partner with you on those efforts moving forward.
    Ms. Brooks-LaSure. Thanks.
    Mr. Ruiz. Good?
    Ms. Brooks-LaSure. Mm-hmm.
    Mr. Ruiz. OK. So switching topics to the No Surprises Act, 
this landmark policy was a huge win for patients who are now 
left out in the middle of paying--payment disputes between 
providers and insurance companies and are no longer receiving 
these balance bills, surprise medical bills.
    But as you mentioned in your testimony, there is a 
significant portion of backlog disputes that are pending 
eligibility determinations. And I am sure you can imagine that 
I am hearing from a lot of folks about this backlog and the 
significant amount of time it is taking to get a resolution on 
their cases. And I think that the unanticipated backlog is 
indicative of just how important it was that we addressed the 
issue of surprise billing.
    So I am pleased to hear you say that the departments are 
working to increase staff in order to address the backlog in 
eligibility determination, so that cases can be decided more 
quickly by the certified independent dispute resolution 
entities. So can you give us a status update on staffing, as 
well as how long you estimate it will take to clear the current 
backlog?
    Ms. Brooks-LaSure. I think you are very right in saying 
that the volume that we have gotten shows just how important of 
an issue No Surprises has been.
    Mr. Ruiz. So can you give us----
    Ms. Brooks-LaSure. But yes, we will----
    Mr. Ruiz [continuing]. A status update on staffing, as well 
as how long you estimate it will take to clear the current 
backlog?
    Ms. Brooks-LaSure. We are working very hard on that, and 
will continue to, and happy to follow up.
    Mr. Ruiz. OK. So I will follow up with you on that one for 
a status update. Staffing is going to be very important. I do 
think that there are a lot of rural hospitals who serve in 
underserved areas who rely on us making sure that this backlog 
is cleared as soon as possible.
    So with that, I thank you, and I yield back my time.
    Mr. Guthrie. Thank you. The gentleman yields back. The 
Chair now recognizes Mr. Carter from Georgia for 5 minutes.
    Mr. Carter. Thank you, Mr. Chairman, and thank you very 
much for this hearing. This is something you know that I am 
very passionate about, and I can't tell you how much I 
appreciate it.
    Administrator, thank you for being here. Just for the 
record, I am a pharmacist. I have practiced pharmacy over 40 
years before I became a Member of Congress. I started when I 
was 10, by the way.
    [Laughter.]
    Mr. Carter. But nevertheless, one of the issues that is 
most important to me is transparency and drug pricing. I was 
the one behind the counter who had to go and watch the senior 
citizen make a decision between buying groceries and buying her 
medicine. I was the one behind the counter who watched the 
mother in tears as she tried to find the money to pay for her 
child's antibiotic. And I set as my goal when I got here 8 
years ago to do something about that.
    The first thing I did was to go to the FTC and to ask them 
to look at the vertical integration that exists within the drug 
pricing chain, where the insurance company owns the PBM that 
owns the pharmacy that, in many cases, employs the provider. I 
asked them to look at that. Finally, after 7\1/2\ years, they 
undertook a study last summer to look at the impact that the 
practices of the PBMs are having on independent retail 
pharmacies.
    You know, this is a bipartisan issue. This is a nonpartisan 
issue. I never went to the counter and asked, ``Are you a 
Republican or a Democrat?'' The price was always the same. High 
drug prices impact everyone here in America, all Americans. 
That is why we have to do something about it.
    Chair Rodgers asked you a question a little while ago, and 
I want to get clarification and be fair here. I believe she 
asked you if you had--I don't know whether she was talking 
about transparency or about the vertical integration, and you 
said you had no authority in that area. Was it about the 
transparency?
    Ms. Brooks-LaSure. It was about vertical integration.
    Mr. Carter. About the--OK, fair enough. I do believe that 
is the responsibility of the FTC, and I think the FTC has 
failed, has failed Americans in not undertaking that 
responsibility. And that is why I applaud them for this study 
that they are doing right now.
    And it is not just pharmacy, and it is not just drug 
pricing. It is consolidation within healthcare, period. You 
know, we had in this committee--we had the CBO, the 
Congressional Budget Office, before us in a meeting. We had the 
Director and we had 20 staff members. I asked them directly to 
give me one--just one--example of where consolidation in 
healthcare has saved money. They could not give me one. One 
example of where consolidation in healthcare has saved money, 
and they could not give me one.
    You know, we all want the same things. Republicans and 
Democrats want the same thing. We want affordability, 
accessibility. We want quality in healthcare. That is what we 
want. And when we talk about accessibility, we have to talk 
about independent retail pharmacies, because 95 percent of all 
Americans live within 5 miles of a pharmacy, yet 4 percent of 
all independent retail pharmacies are going out of business 
every year as a result of the practices primarily of PBMs.
    Now, I have got a bill here. You know what spread pricing 
is, and you understand it. We have got a bill, Drug Pricing 
Transparency in Medicaid Act. You understand that the State of 
Ohio, the attorney general, has just recently undertaken a 
lawsuit against the PBMs, referring to them as gangsters. And 
that is exactly what they are.
    I just want to ask you, do you agree that more transparency 
is needed when PBMs are now vertically integrated, and own the 
insurance company that owns the PBMs that owns the pharmacy 
that in many cases employs the provider?
    Ms. Brooks-LaSure. I agree that transparency is important.
    Mr. Carter. Well----
    Ms. Brooks-LaSure. I did want to mention one thing that we 
have done--and it really did come from talking with 
pharmacists--was trying to increase the transparency with fees 
that are paid and to make sure that pharmacists would 
understand what the rules were. And it is something that we 
will continue to work on.
    Mr. Carter. What do you think you can do in helping us with 
transparency?
    Ms. Brooks-LaSure. I am happy to--our staff is happy to 
work with you on ideas around transparency.
    Mr. Carter. Well, we got plenty of them.
    If we eliminated spread pricing, do you think that we could 
save money here in America?
    Ms. Brooks-LaSure. I think it is--as with----
    Mr. Carter. If I could, there was a study done--and it is a 
little aged now, it was done a little bit over a year ago--by 
the Berkeley Research Group that showed--and listen, and if you 
remember one thing, then remember this: It showed that only 37 
percent of the price of a drug goes to the pharmaceutical 
manufacturer, which begs the question, where does the 63 
percent go? It goes to the PBM, it goes to the middlemen. That 
is where the problem is. That is where we can control drug 
prices at.
    I want to ask you to please commit that you will work with 
us to bring forth more drug transparency. We have got 
bipartisan legislation that we are working on now.
    Ms. Brooks-LaSure. I commit that we will work with you on--
--
    Mr. Carter. Thank you, and thank you for being here today, 
and I yield back.
    Mr. Guthrie. Thank you. The gentleman's time has expired. 
The Chair now recognizes Representative Barragan from 
California for 5 minutes for questions.
    Ms. Barragan. Thank you, Mr. Chairman, for holding this 
hearing.
    Thank you, Administrator Brooks-LaSure, for being here, for 
all the work that you do at CMS.
    Before I want to start, I want to recognize advocates out 
here in our purple-colored shirts that are advocating for 
Alzheimer's. As you know, as many people have heard, my mother 
has Alzheimer's. She is 82 years old. And the issue of 
Alzheimer's and access to care, access to drugs, and making 
sure it is equitable is an issue that is not only near and dear 
to me, but requires advocacy.
    Your testimony highlights that part of the goal that you 
have is to have equity. And it says ``efforts across the Agency 
are based on a foundation of goals that aim to advance health 
equity, eliminate avoidable differences in health outcomes 
experienced by people who are disadvantaged or underserved.''
    We know that Alzheimer's impacts all Americans. We know 
that Latino communities are growing, and they are at huge risk 
of being those that are going to be impacted by Alzheimer's. 
And I have seen firsthand--and a lot of our families have seen 
firsthand--the devastation.
    You and I have had conversation before, both through 
letters that I have sent to CMS asking them to reconsider its 
national coverage determination. We have had a meeting. You 
were very generous with your time. I appreciate your 
willingness to do that. I have held a press conference. I am 
going to continue to hold press conferences, and I have 
introduced legislation to try to fix--and what I see as a fix--
to CMS's unprecedented decision to tightly restrict coverage 
for a whole class of Alzheimer's drugs.
    And this is a bipartisan issue. This is something that we 
have heard from colleagues on both sides of the aisle and 
something that is, I think, meaningful and a failure, really, 
of CMS to provide meaningful coverage for the class of 
therapies targeting Alzheimer's disease. CMS's decision 
continues to concern me. And so I want to follow up to a letter 
I had sent to you and a response that you provided on March 
27th, just a couple of weeks ago.
    Administrator, you stated in your response letter to me on 
March 27th, when I urged you to reconsider the coverage 
policy--you said that--and I am quoting from the letter--``If 
the FDA approves a drug within this class based on a direct 
measure of clinical benefit, CMS will provide enhanced access 
and coverage for people with Medicare participating in CMS-
approved studies, such as nationwide, registry-based study.'' 
And I am ending the quote there.
    From my understanding, this means that CMS will continue 
its policy of only providing coverage for those enrolled in a 
CMS-approved study, which is concerning to me. Is that--is that 
accurate?
    Ms. Brooks-LaSure. No, in the sense of--I--and we will work 
to clarify what we mean by ``registry,'' because it is clear 
that there is a misunderstanding.
    When we say ``registry,'' all that we are indicating is 
that individuals who are taking the drug, their doctors will 
put that information in a privately owned registry so that some 
of the other factors that are prescribed by the drug can be 
included. But it in no way limits people from getting access to 
the drug.
    Ms. Barragan. But don't they have to be----
    Ms. Brooks-LaSure. Whatever is on the FDA label----
    Ms. Barragan. Don't they have to be part of a study?
    Ms. Brooks-LaSure. It is not a study in the sense of it 
will just be included. The people who will be eligible will be 
based on the FDA label. So whatever--when FDA approves the 
drug, they say it--whichever populations they say it is 
appropriate for, that will be the basis of which people will 
get the drug.
    Ms. Barragan. So you are basically saying that all patients 
indicated for--for example, the drug lecanemab--and any future 
therapies in the class will have coverage for the drug upon 
full approval?
    Ms. Brooks-LaSure. That is right.
    Ms. Barragan. Do you know when such registries will be 
ready for patients to enroll and begin receiving treatment?
    Ms. Brooks-LaSure. We encourage----
    Ms. Barragan. And will the registry be available the day of 
the FDA's approval, or will there be a delay?
    Ms. Brooks-LaSure. That is certainly our goal. Private-
sector entities right now can start setting them up.
    Ms. Barragan. OK. Administrator, can you tell us what other 
FDA-approved drug has been denied coverage by CMS?
    Ms. Brooks-LaSure. We have never denied a drug for an FDA-
approved drug. We have done coverage with evidence development, 
which we are doing here.
    Ms. Barragan. Well, except for this, right, except for this 
drug?
    Ms. Brooks-LaSure. We are not denying coverage. We have 
said that for an accelerated approval drug, it needs to be 
covered in the--under a clinical trial. And when it reaches 
Federal full approval by FDA, we will cover it more broadly.
    Ms. Barragan. I think that is a little inaccurate, and that 
is my concern, is it has been FDA approved, say, on an 
accelerated basis, and this is the first time that the CMS has 
not covered a drug, is my understanding----
    Mr. Guthrie. I believe we have extended our time.
    Ms. Barragan [continuing]. That was FDA-approved.
    Mr. Guthrie. I agree----
    Ms. Barragan. I am sorry.
    Mr. Guthrie [continuing]. That accelerated approval is full 
approval, my understanding.
    Ms. Barragan. I yield back.
    Mr. Guthrie. Thank you for that. But I agree with you, 100 
percent.
    The Chair recognizes Dr. Bucshon for 5 minutes for 
questions.
    Mr. Bucshon. Thank you, Chairman Guthrie, and thank you, 
Administrator, for appearing today.
    So following up on that, has the FDA told you that 
accelerated approval is not full approval and should be treated 
differently?
    Ms. Brooks-LaSure. We have many conversations with the FDA. 
We consider accelerated approval in a different category than 
full.
    Mr. Bucshon. OK, you do, but the FDA does not. So I want to 
just make that clear.
    I am sure, like all of us here today, that you support 
lowering drug costs for all Americans, particularly seniors on 
Medicare who live on a fixed income. So I am curious why CMS 
chose to increase the taxpayer cost of cancer drugs and other 
expensive medications for serious diseases by 37 percent 
recently.
    What I am referring to is that CMS traditionally paid 340B 
hospitals, which acquire drugs at a discount in order to reach 
more patients and expand care, which--I support the program--
and provide more comprehensive services to those folks at 
around 80 percent of the average sales price. But as of 
September 2022, CMS reimburses for these drugs at 6 percent 
above average sales price. Why?
    Ms. Brooks-LaSure. We--and as you probably are aware, under 
the previous administration the policy was changed, and we have 
gone back to the original policy, as dictated by Congress.
    Mr. Bucshon. OK. Actually, it was a Supreme Court ruling, 
probably, that has really----
    Ms. Brooks-LaSure. That is right.
    Mr. Bucshon [continuing]. Caused that. But for the record, 
Justice Kavanaugh, in the ruling, ruled that CMS's first option 
is to pay for 340B drugs based on hospital survey data. And I 
understand that CMS has that survey data, which indicates that 
it should be paying for 340B drugs, that average sales price, 
minus 28.7 percent. Just saying.
    So it is a little disingenuous to say you are--you know, 
and try to blame it on the Trump administration, and say you 
are going back to previous policy. It is based on a Supreme 
Court ruling. However, your interpretation of the ruling, I 
would argue, is inaccurate.
    I have one additional question as it relates to this 340B 
court case. It is my understanding that CMS has not yet 
announced how it will handle payments for 340B drugs made prior 
to last September 28th. What is the plan?
    Ms. Brooks-LaSure. We plan--intend to issue it very soon.
    Mr. Bucshon. So you don't have a plan that you have 
publicly issued yet?
    Ms. Brooks-LaSure. That is correct. We will publicly do so 
in the next couple----
    Mr. Bucshon. OK. Do you have an estimate about what the 
expense will be, what the cost will be?
    Ms. Brooks-LaSure. We will issue that as part of the rule.
    Mr. Bucshon. OK. It is going to be in the billions and 
billions of dollars. I understand that. I mean, I believe in 
our system, you know, and the court made a ruling, and there we 
go.
    Mr. Chairman, I don't really have any further questions. I 
just have a comment on the hearing in general. This is a great 
hearing for the American people. This is about lowering 
healthcare costs for all Americans regardless of your ZIP Code. 
It is about making sure Americans have access to FDA-approved 
drugs. It is about maintaining innovation and--in the 
healthcare marketplace. And at the end of the day, again, it is 
about access to quality, affordable healthcare services for the 
people that we all represent.
    So I just want to commend the committee and the chairman of 
the subcommittee and the staff on the Republican side and both 
sides of the aisle on Energy and Commerce for this hearing. I 
have been in Congress for 13 years. I am a healthcare provider. 
And I am not using hyperbole here, but I think this is 
potentially one of the most important healthcare hearings that 
I have participated in since I have been on the committee.
    Ms. Eshoo. Would the gentleman yield?
    Mr. Bucshon. I will yield.
    Ms. Eshoo. I thank the gentleman.
    I just would like to add something to the record in the 
exchange between Congresswoman Barragan on it takes over a 
year, Madam Administrator, up to 17 months for approval on 
medical devices in terms of what you are referencing, the 
system you want to use for this drug. That is not acceptable. 
It really isn't. And so I just wanted to get that down for the 
record. And I appreciate----
    Mr. Bucshon. Yes, and I would yield----
    Ms. Eshoo [continuing]. It, and I yield back.
    Mr. Bucshon. I reclaim my time. I want to make a comment on 
what Ms. Eshoo just said. I had--I am aware of a device in the 
past that I was involved in--many of us were--that took 5 years 
to get a national coverage decision of an FDA-approved medical 
device, limiting access. So the discussion around Alzheimer's 
drugs and other medications where CMS is not making quick 
decisions on drugs that have been through the FDA process needs 
to be looked at.
    I yield.
    Mr. Guthrie. The gentleman yields back. The Chair now 
recognizes Ms. Representative Lisa Blunt Rochester from 
Delaware for 5 minutes.
    Ms. Blunt Rochester. Thank you, Mr. Chairman, and thank 
you, Administrator Brooks-LaSure, for your testimony.
    I am grateful that we are considering policies to lower 
unaffordable healthcare costs, and I would like to focus on a 
few programs that protect the health and economic security of 
low-income seniors.
    I believe one of the most underdiscussed provisions of the 
Inflation Reduction Act is the expansion of the Medicare Part D 
low-income subsidy program, also called Extra Help. The low-
income subsidy program pays Medicare Part D prescription drug 
premiums and cost-sharing for over 13 million individuals with 
low incomes who meet certain resource criteria. An estimated 40 
percent of low-income Medicare beneficiaries spend 20 percent 
or more of their very modest income on premiums and other 
healthcare costs, which makes programs like the low-income 
subsidy program a lifeline for some seniors.
    The Inflation Reduction Act expanded cost-sharing 
assistance to enrollees in the low-income subsidy program 
beginning in 2024. Can you tell us how this provision will 
lower drug costs for vulnerable Americans and what CMS will do 
to ensure that all people who qualify can take advantage of 
this new benefit?
    Ms. Brooks-LaSure. Thank you, Congresswoman, for 
highlighting what is one of the most exciting provisions of the 
Inflation Reduction Act.
    Every year there are new provisions that take effect, and 
in 2024 we are very excited to expand coverage. We encourage 
seniors right now to look and see if they are eligible for what 
we call our Medicare savings programs and our low-income 
subsidy, because if you are already enrolled, you will 
automatically have access when next year starts to these 
additional protections around cost sharing.
    It also expands the number of people who are going to be 
eligible. And so, as part of our annual open enrollment period, 
we are very focused on trying to get the word out to everyone 
to make sure that they enroll in this coverage if they are 
eligible.
    Ms. Blunt Rochester. And you mentioned Medicare savings 
programs, and MSPs are also programs that help those with 
limited income and resources pay for Medicare Part A and B cost 
sharing. However, MedPAC has noted that many Medicare 
beneficiaries and providers do not know about the MSPs, and 
many beneficiaries who are eligible may be particularly--may be 
really difficult to reach them because they live in rural areas 
or they are homebound or have limited English proficiency or 
have vision, hearing, or cognitive difficulties.
    Furthermore, conflicting enrollment and eligibility 
requirements between the MSPs and related Federal programs 
serving similar low-income individuals like the LIS program 
have resulted in low-income individuals having--there are being 
just inefficiencies in the--and creating underenrollment.
    The President has proposed several reforms to ease the 
administrative burdens for States and remove enrollment 
barriers. Can you describe these proposals and how they would 
help low-income seniors afford their healthcare costs?
    Ms. Brooks-LaSure. We are incredibly focused on Medicare 
savings programs because so many people who are eligible for 
them are not enrolled, and that is something that we are very 
focused on. States administer them, and so we are really trying 
to make the connections even closer between the Medicare 
program--so when someone calls our call center, that they get 
connected to the State to get enrolled, and trying to limit the 
paperwork as--in terms of what people need to fill out.
    Ms. Blunt Rochester. I would also like to associate myself 
with the comments of many of my colleagues about how important 
this hearing is.
    Also, to the advocates who are here today, the Alzheimer's 
advocates wearing your purple, I always say, you know, as we 
said, this has touched so many of us, whether it is my 
grandmother, my mother, one of my good neighbors, that the 
reason why you wear purple is because this is not a red issue 
or a blue issue, it is an American issue. So thank you so much 
for your advocacy.
    And I yield back.
    Mr. Bucshon [presiding]. The gentlewoman yields back. I now 
recognize Mr. Johnson from Ohio for 5 minutes for his 
questioning.
    Mr. Johnson. Well, good morning and thank you, 
Administrator Brooks, for making time in your busy schedule to 
speak with our committee. As I understand it, this is the first 
time that you have been in front of Congress, despite being in 
your role for nearly 2 years.
    I take Congress' oversight role very seriously. And while 
we are on the topic of transparency in the healthcare space, I 
think it is reasonable to question the Biden administration's 
commitment to transparency, given that we haven't heard 
directly from you before our committee previously. So I 
appreciate having the opportunity to do that today.
    You know, in late 2019 the Trump administration proposed 
and later finalized rulemaking to increase price transparency 
for patients, giving the American people all of the information 
about their healthcare as vital to ensuring they receive the 
care and treatment they deem necessary for their own lives and 
the lives of their loved ones. Since that rule went into 
effect, there have been varying reports of price transparency 
compliance among hospitals. To date, CMS has issued only four 
penalties for noncompliance. Yet a number of academic and 
nongovernmental studies have concluded that the number is much, 
much higher.
    So my first question: Ms. Brooks, could you explain why 
there is such disagreement with concern to transparency 
compliance?
    I mean, what metrics is CMS using that would cause such 
confusion about who is following the rules and who isn't?
    Ms. Brooks-LaSure. Thank you for your questions about 
transparency and the work of the committee, and we are very 
committed to implementing the rule.
    Mr. Johnson. No, I want to--but I need you--Ms. Brooks, I 
need you to answer my question.
    Ms. Brooks-LaSure. Certainly.
    Mr. Johnson. What metrics are you using that would cause 
the confusion about who is and who isn't following the rules?
    Ms. Brooks-LaSure. Some of the differences that people have 
where--in the different studies, in terms of whether people are 
complying, is because people have been looking at different 
metrics. So we are looking at what our rules require. And I 
will give you an example, if that is helpful.
    So there have been some questions where hospitals, for 
example, might have ``N/A.'' The reason why they may do that is 
because they don't offer that service. And according to our 
rules, they don't need to do so.
    Mr. Johnson. Well, when cross-referencing hospital pricing 
data with insurance company data under transparency in 
coverage, patient advocate groups are finding real dollars-and-
cents amounts in insurance company price data fields, whereas 
hospitals have posted N/As, blanks, dashes, and hyphens. So it 
is not that they are not offering those services, because the 
insurance companies are saying they are.
    How can CMS consider hospitals that enter such data as 
compliant in good faith, as you did in an interview with NBC 
Nightly News, without first verifying the accuracy of the data?
    Ms. Brooks-LaSure. So as we have been talking about, we are 
working to implement the legislation. And when anyone lets us 
know that they think a hospital is in violation, we undertake a 
review, and we look to----
    Mr. Johnson. And you have only found that four times out of 
all of the hospitals?
    Ms. Brooks-LaSure. No, that is not right. What we have done 
is we send first a warning notice if they have met certain 
standards, if they--if--we send a warning notice, we ask them 
to do a corrective action plan.
    And what we have found is, by--the vast majority of 
hospitals, when they find out that they have not been in 
compliance, come into compliance, because that is our goal. Our 
goal is not to impose penalties, although we will absolutely do 
so, and we have increased our penalties. We are focused on 
getting hospitals into compliance, and that is why today we are 
shortening our timeframes.
    Mr. Johnson. Well, then why is CMS blindly accepting 
hospital files, some of which have been flagged by various 
outside groups as compliant, without first verifying that the 
rates are legitimate?
    Ms. Brooks-LaSure. We review when we get a complaint, and 
happy to follow up on specifics.
    Mr. Johnson. Well, I submit, Mr. Chairman, we are not going 
to get to transparency--and we all know what transparent does. 
Transparency improves competition, it ends up improving 
quality, and it lowers cost. That is across any industry. Price 
transparency is essential to lowering healthcare costs. And 
when you consider that healthcare costs are the most--are the 
largest part driving America's national debt, it is the most 
expensive part of what the Federal Government spends. This is a 
really important topic, Mr. Chairman.
    I yield back.
    Mr. Bucshon. The gentleman yields back. I now recognize Dr. 
Schrier from Washington for her 5 minutes for questions.
    Ms. Schrier. Thank you, Dr. Bucshon, Mr. Chairman, and 
thank you, Administrator Brooks-LaSure, for coming to speak 
with us today. It is great to see you, and welcome.
    You know, the last couple of years have been really hard 
for the medical community. Doctors and nurses and respiratory 
therapists were overwhelmed by the demands of the pandemic. 
Many put their health and their family's health at risk in 
order to care for patients. Some physicians had to pause 
elective procedures. Many shifted to telemedicine, as you know. 
And because of some of these financial strains, many small 
offices needed to close their doors.
    At the same time, every year we scramble and panic by the 
end of the year to prevent cuts to Medicare reimbursement 
rates. And this is happening at a time of inflation and high 
wages. And it is hard for small and large practices to keep 
their doors open. In fact, according to the AMA, the failure of 
Medicare reimbursement to keep pace with inflation has had such 
a big impact on physician payment, it translates to a 26 
percent drop in inflation-adjusted Medicare pay for doctors. 
And that is not a way to keep a system functioning.
    Add to that early resignations and retirements, and there 
is a lot of strain on the system. What happens, then, to these 
small practices is that the big ones eat them up, and you end 
up with consolidation and a lack of competition and higher 
prices. And if those large systems can't stay afloat, what they 
will do is number--limit the number of Medicaid and Medicare 
patients that they will see in order to get by, and then 
patient access is impacted.
    And so I am wondering, Administrator Brooks-LaSure, what do 
you see as the best way to bring down costs, increase 
transparency, have fair reimbursement, keep competition, and 
how can we help in Congress?
    Ms. Brooks-LaSure. Well, thank you so much for highlighting 
what we are hearing across the country, just how much doctors 
and other clinicians are struggling during--that is something 
that has been happening for many years, and certainly over the 
last couple of years, when the healthcare system has been 
incredibly strained. We are happy to work with you to continue 
to think about how we can support our workforce, how we can 
really try to make sure that all offices can continue to be 
able to thrive in different types of environments.
    Ms. Schrier. Let's work together on physician 
reimbursement. I know the community, and all of us at some 
point will really appreciate that.
    A quick question about transparency and pricing. I know we 
have talked a lot today about listing--list prices for 
procedures at hospitals, which seems really, really helpful on 
the surface, but it mostly applies to people who either have 
high deductibles or who are uninsured. And when I look at my 
explanation of benefits, there is a negotiated price that is 
far lower than that list price.
    And so I am just wondering, given that many--most Americans 
are not paying the sticker price or a percentage of that 
sticker price, how much impact are these listed prices really 
going to have on the cost of healthcare in this country?
    Ms. Brooks-LaSure. It is a really important point. So we do 
have rules and requirements around health plans providing 
information about the--about procedures. And I think, for 
people who are insured, that can be a more helpful 
understanding of what their costs are going to be. But yes, if 
you have health insurance, you are going to likely choose the 
doctors that--and who are in your network.
    The list prices, I would say, are a first step in 
transparency. They certainly are helpful for the uninsured, but 
also for third-party developers to use that information, and I 
know this committee heard from one such entity that can help 
with making the information more accessible.
    Ms. Schrier. Thank you. I have one other issue, and I don't 
expect an answer, I just look forward to working with you to 
ease this problem.
    I hear about this issue regularly from my patients, my 
constituents who are also patients, and it strikes a nerve with 
me because I have Type 1 diabetes, and have been using a pump 
for, like, almost 40 years. Patients on insulin pump therapy 
who have Medicare--even those who, like me, have been on a pump 
for decades and are stable and their doctor only thinks they 
need to come in once a year--they need to go see their 
physician every 3 months to get authorization to use an insulin 
pump. This puts them at risk for running out, it is a use of 
medical dollars that we shouldn't be spending. And I would just 
say that on these and other inefficiencies in the system, I 
would love to continue to work with you.
    I am out of time, and I yield back.
    Ms. Brooks-LaSure. I am happy to talk.
    Mr. Bucshon. The gentlelady yields back--I agree with you 
on the insulin pump issue--and at this point I yield to Mrs. 
Harshbarger from Tennessee for her line of questioning.
    Mrs. Harshbarger. Thank you, Mr. Chairman, and thank you 
for being here today, Madam Administrator.
    I was concerned by the about-face that your agency took in 
the last 2 weeks reversing decades of policy that has otherwise 
precluded Federal healthcare coverage for undocumented 
immigrants. In that rule your agency wrote, ``However, given 
the broad aim of the ACA to increase access to health coverage, 
we now assess that this rationale for excluding certain 
noncitizen groups from such coverage was not only statutorily 
mandated, it failed to best effectuate congressional intent in 
the ACA.''
    And I find it hard to believe that suddenly this 
administration, unlike the prior two administrations, now knows 
what congressional intent was and, all of a sudden, somehow you 
are aware of a statutory mandate that none of us knew about, 
including the Obama administration who passed the law.
    Now, there's two documents, Mr. Chairman. In fact, I have 
these documents from the Obama administration that made it 
clear that DACA recipients were not eligible for Medicare or 
Medicaid or ACA coverage. And I would like to submit these for 
the record, Mr. Chairman.
    So I guess my question----
    Mr. Bucshon. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mrs. Harshbarger. My question to you, Madam Administrator, 
is how can you legally justify this sudden departure from the 
law?
    Ms. Brooks-LaSure. The Biden-Harris administration is 
focused on making sure that everyone has access to affordable 
coverage consistent with the law. We have made a determination 
that people who are brought to this country when they were 
children, known as DACA recipients, a closed cohort, so 
everyone who is a DACA----
    Mrs. Harshbarger. Was that----
    Ms. Brooks-LaSure [continuing]. Under----
    Mrs. Harshbarger [continuing]. By Executive order, or----
    Ms. Brooks-LaSure. It is under----
    Mrs. Harshbarger. It is not congressional intent.
    Ms. Brooks-LaSure [continuing]. Administrative authority.
    Mrs. Harshbarger. All right. I want to change subjects 
right quick.
    In late 2021 CMS published a 9-page FAQ with the last Q&A 
stating, ``It is a Stark violation if medical practices simply 
mail or otherwise deliver an oral drug to a patient.'' And I 
have practices in my district and in my State like Tennessee 
Oncology, and they are alarmed because they routinely send 
these oral drugs to patients in rural areas like my area as a 
convenience, or as a medical necessity when the patient is too 
sick to pick the drug up.
    And as a pharmacist for over 35 years, I cannot understand, 
when an oral drug has been prescribed by a physician and 
dispensed for a patient, how in the world that constitutes a 
Stark violation when it actually costs that practice money to 
send it and mail it to a patient?
    And I am saying that because a number of my House 
colleagues and I will be sending a letter urging you to retract 
that FAQ. And very recently, even HHS Secretary Becerra said at 
one of our committee hearings he would absolutely work with me 
and our colleagues on this issue.
    So I just need a yes or no. Do you really intend that 
Medicare seniors who are too sick or without transportation to 
possibly go without their cancer drugs or any of these critical 
therapies?
    Ms. Brooks-LaSure. I am happy to work with you on this.
    Mrs. Harshbarger. Fantastic. And as my colleague, Buddy 
Carter, mentioned, we have heard a lot about PBMs today, and 
how they operate in the shadows. There's many, many things we 
could talk about that, and even Secretary Becerra recently told 
the Senate Appropriations Committee that, with regard to PBMs, 
transparency would be helpful to see how they are operating, 
and the moment we try to do something, we likely find ourselves 
in court. We are trying to move the dial. That came from the 
Secretary.
    And I have two questions, but I do want to tell you about a 
bill that I just put out this week. It is bipartisan 
legislation. It is called the PBM Sunshine Accountability Act. 
And what this would do would require public reporting of PBM 
information that the HHS Secretary already gets under current 
law. And it enhances the reporting to include the rebates and 
fees that PBMs and its financial affiliates receive from drug 
manufacturers and health insurers so we better understand the 
rebates and fees that companies are receiving when they are--
where they are coming from, and what is not passed on to the 
clients and the patients. Would you be in support of something 
like that?
    Ms. Brooks-LaSure. I would be happy to work with you on 
that.
    Mrs. Harshbarger. Absolutely. And I have got a couple other 
questions, but I know my time is about up, and it concerns the 
No Surprises Act. And in 2020, when it was passed into law, it 
required to make publicly available by June 27th, 2023, a 
report on drug rebates, drug reimbursements, and pricing trends 
in commercial health insurance. And are you on track to meet 
this deadline?
    Ms. Brooks-LaSure. We are working to do this provision, 
yes.
    Mrs. Harshbarger. OK. I know my time is up, so I yield 
back. Thank you.
    Mr. Bucshon. The gentlelady yields back. Is Ms. Kelly ready 
for her line of questioning?
    I yield now to Ms. Kelly for 5 minutes.
    Ms. Kelly. Hello, Administrator. Good to see you.
    Ms. Brooks-LaSure. Nice to see you.
    Ms. Kelly. Thank you, Chair Guthrie and Ranking Member 
Eshoo, for holding today's hearing.
    Administrator Brooks-LaSure, thank you for being here 
today.
    When we passed the American Rescue Plan, my legislation was 
included to extend Medicaid postpartum coverage from 60 days to 
1 full year. This extension has been a crucial lifeline for 
mothers and their infants, and I am proud to say that this is 
no longer a temporary measure. Currently, 32 States and 
Washington, DC, have already made this extension permanent. 
Even other States like Alabama, Tennessee, Kansas, Oklahoma, 
and Nebraska have enacted postpartum Medicaid extension 
legislation.
    The expansion of Medicaid postpartum coverage is a critical 
part of our efforts to address, as you know, the maternal 
health crisis in this country, as the Medicaid program finances 
about 4 in 10 births in the U.S.
    Sadly, mothers aren't the only victims of our maternity 
care system: 1 out of every 1,000 babies born in the U.S., 
approximately 6 babies die.
    Extending postpartum--Medicaid postpartum coverage to 1 
year is part of our ongoing efforts to break down barriers to 
accessing care. I am deeply concerned that work requirements--I 
know someone mentioned it before--in Medicaid will undo our 
progress. Administrator, are Medicaid work requirements a 
benefit or a hindrance to Congress' effort to make Medicaid 
more accessible to low-income individuals as well as new moms?
    Ms. Brooks-LaSure. Thank you so much for your work on 
maternal health, and it is very exciting that every time I talk 
we have more States that have come in to extend coverage 
postpartum.
    And I think it is really important, when we think about the 
maternal health crisis, to remember that part of it is making 
sure that women have coverage before they are pregnant. That is 
one of the key pieces, that people have coverage so they can 
live healthy lives, they can work. And the vast majority of 
people on the Medicaid program are working. They are 
caregivers. They are students.
    But what we have seen over time is that, when there are 
additional barriers to enrollment, that it creates people 
getting lost in the red tape. And that can mean people who are 
subject to the requirements, but very often it also means 
people who are exempt but need to make sure that they produce 
the right documents and produce the right forms and that they 
go through it. And let's remember who these people are. They 
are people working multiple jobs, who are juggling a lot of 
life.
    And so I think it is--as we have seen, it is critical for 
people to have health insurance coverage, both for themselves, 
for their families, and for us, as a country, to make sure that 
we are safe when a pandemic hits.
    Ms. Kelly. Thank you so much for your response.
    On August 1st, 2022, CMS finalized the proposed rule, and 
will award a birthing-friendly hospital designation in the fall 
of 2023 to hospitals that have participated in a national or 
statewide quality collaborative and carried out the recommended 
intervention. This is the first-ever hospital quality 
designation by HHS that specifically focuses on maternal 
health.
    How will these hospital programs be evaluated to ensure 
that the awarded organizations' outcomes are higher than the 
organizations without the designation?
    Ms. Brooks-LaSure. I am so excited about the work that we 
have been able to do on the birthing-friendly designation, 
particularly because the private sector has really partnered 
with us and is using it even more broadly. So more than half of 
the country will be able to look to see these designations for 
hospitals.
    These are hospitals that will have agreed to have taken the 
recommendations from their maternal health experts and included 
those, and we intend to continue to get information from the 
public commenters about quality measures that we will hold 
these hospitals accountable for.
    Ms. Kelly. I just want to thank you for all of your hard 
work, and your staff, and for being accessible and helping our 
office so much.
    Thank you, and I yield back.
    Mr. Bucshon. The gentlelady yields back. I now recognize 
Dr. Joyce for his 5 minutes for his line of questioning.
    Mr. Joyce. Thank you for yielding, Mr. Chairman, and for 
holding this hearing today.
    First, I would like to add my voice to the list of those 
concerned of what CMS has decided on restricting coverage for 
antiamyloid treatment for Alzheimer's disease. The CMS standard 
is defined in statute as ``reasonable and necessary for the 
diagnosis or treatment of illness or injury, or to improve 
functioning of a malformed body member.''
    I would like to thank my colleague, Rep. Barragan, for 
working on legislation with me to mitigate this misguided 
decision and would urge that this panel take lifesaving 
measures to address this issue.
    Administrator Brooks-LaSure, I was encouraged to see the 
President's Executive order on competition take on hospital 
consolidation by noting that this consolidation has left many 
areas, particularly rural communities, with inadequate or more 
expensive healthcare options. Can you please elaborate on 
actions--and please be specific--your agency has taken to 
address hospital consolidation?
    Ms. Brooks-LaSure. Thanks. Thank you so much, Congressman, 
for your mentioning of the administration's real focus on 
consolidation.
    Our authority at CMS on consolidation is really around 
transparency, and that is what we are focused on, making sure 
that there is ownership information available to people as they 
are choosing plans. There are other agencies across the 
administration with additional authority, of course. That is 
our focus.
    Mr. Joyce. Thank you. Building on this work, I am hopeful 
that you will be encouraged to see these bipartisan bills--
draft as a way to address the President's Executive order by 
removing incentives for greater hospital and provider 
consolidation. Importantly, they are built on a foundation of 
work from the presidential administrations from both parties, 
nonpartisan groups like MedPAC, and academics and think tanks 
across the ideological spectrum.
    Will you commit to work with us on these policies to 
mitigate consolidation and promote competition?
    Ms. Brooks-LaSure. I will absolutely do so.
    Mr. Joyce. This year over eight Humira biosimilars will 
launch in the U.S., with expectations of producing significant 
cost savings for patients and the healthcare systems. Medicare 
alone, it is estimated, could save over $2 billion if it had 
access to these biosimilars.
    In order for patients and the Medicare program to realize 
these savings, biosimilars must have immediate access to Part D 
formularies. What policy actions is CMS taking to ensure that 
these Humira biosimilars are available to beneficiaries?
    Ms. Brooks-LaSure. We are certainly excited about 
innovative drugs that come to market in particularly biologics 
and other generics. I am happy to talk in more depth about what 
we do to encourage Part D formularies--Part D plans to cover--
--
    Mr. Joyce. I personally welcome that discussion. I think it 
is so important for patients across America.
    Earlier this year I sent a bipartisan letter asking CMS to 
take action about biosimilars and formulary access. One point 
that I raised was having CMS update guidance to ensure 
maintenance charge--maintenance change policies were updated to 
include a broad array of biosimilars. What is the status of 
this request?
    And will you commit to doing a thorough review to ensure 
that biosimilar formulary access is not only permitted but is 
also done in a way that ensures patients can utilize them?
    Ms. Brooks-LaSure. We will follow up with your request, 
and----
    Mr. Joyce. Thank you.
    Ms. Brooks-LaSure [continuing]. I will get you a status 
update.
    Mr. Joyce. I appreciate that commitment.
    Finally, I would like to thank you, Mr. Chairman and 
Ranking Member Eshoo, for the work that you have done on the 
MVP Act and echo my support for this important legislation.
    One of the things that is so important about the MVP Act is 
it adequately is flexible for many different disease states. As 
a physician, I understand how different some outcomes could be 
across different disease states. For example, the outcomes that 
you might measure and the length of time you would measure them 
might look different for a gene therapy for muscular atrophy 
than outcomes for hemophilia. The multiple best price approach 
would allow payers and States to establish VBAs that could 
encompass multiple outcomes, including one for diseases where a 
pay-over-time arrangement is truly the most appropriate way.
    Can you discuss how important it is that the best price 
approach capture different types of VBAs in order for them to 
work across all disease states?
    Ms. Brooks-LaSure. I certainly agree, and am excited that 
the committee is going to focus on outcome-based proposals to 
make sure that we can--make sure that States can afford to 
cover drugs, that people have access to them, and ones that 
really support these innovative----
    Mr. Joyce. Thank you for----
    Ms. Brooks-LaSure [continuing]. Therapies.
    Mr. Joyce [continuing]. Your commitment to access.
    My time has expired, and I yield.
    Mr. Bucshon. The gentleman yields. I now recognize Mr. 
Sarbanes for 5 minutes.
    Mr. Sarbanes. Thank you very much, Mr. Chairman. I 
appreciate it.
    Administrator, thank you for being with us today and for 
your testimony about the many efforts that CMS is undertaking 
to create a more transparent, accessible, and affordable 
healthcare system. We certainly appreciate it.
    Last year, as you know, Congress finally--finally, after 
many, many decades, really--took the historic step of standing 
up to Big Pharma and enacting policies that are already--we are 
seeing it--lowering healthcare costs for millions of seniors in 
the Medicare program.
    As the Inflation Reduction Act reforms continue to be 
implemented over the coming years, we must continue to build on 
this success, and I am glad the subcommittee today is 
undertaking what is a bipartisan discussion of some of the 
issues that contribute to rising healthcare costs today.
    Too often, when asked to identify the driver of the high 
cost of prescription drugs, the various actors in the supply 
chain point the finger at others, and the veil of secrecy 
surrounding so many healthcare pricing and contracting 
practices makes it virtually impossible for anyone to fully and 
accurately--and certainly, not easily--follow the money trail. 
This is, in fact, an intentional design feature that allows Big 
Pharma to continue to increase its prices and, along with 
pharmacy benefit managers, its profits.
    So, Administrator, how can the administration's current 
work to increase transparency help policymakers better 
understand these pricing practices, get behind this design, and 
help patients make more informed decisions about their 
healthcare?
    Ms. Brooks-LaSure. Thank you for noting just how monumental 
the Inflation Reduction Act is.
    I get asked a lot of questions as CMS Administrator, but I 
don't know one that I get asked about the most more than 
prescription drug coverage and the ability of people to pay for 
their prescriptions in this country. And we are really moving 
forward and tremendously excited about the opportunity to bring 
additional benefits to negotiate, and we are committed to 
transparency as far as our authority allows and want to 
continue to work with you on all of the proposals that you are 
considering.
    Mr. Sarbanes. Let me turn to increasing transparency and 
better understanding of some of the drivers of healthcare 
costs. If we have a better understanding of these factors, we 
can address them more effectively, which will, in turn, improve 
patient access and care overall.
    In Maryland, as you know, we have been working to improve 
patient care while lowering systemwide healthcare costs for 
decades. Since the 1970s, we have had a hospital all-payer 
system. It is unique now. And our current total-cost-of-care 
model uses global hospital budgets to incentivize value-based 
care, eliminate the need for charity hospitals, and strengthen 
the quality and comprehensiveness of care provided to all 
individuals regardless of their geographic location in the 
State or their insurance status. It is really a visionary 
approach.
    And Maryland's total-cost-of-care model also allows our 
State to invest in other health system goals, like lowering the 
maternal mortality rate and the opioid overdose mortality rate, 
decreasing the number of children who visit emergency rooms for 
asthma, reducing adult Marylanders' risk of diabetes, and so 
on.
    So, Administrator, what benefits do patients and providers 
do value-based approaches like the one that we have done in 
Maryland offer, and how can we work to incentivize and expand 
similar approaches across the country in this effort to lower 
costs and improve access to care for all Americans?
    Ms. Brooks-LaSure. Thank you for raising Maryland's 
innovative approach to paying for care, and it is one of the 
models that, through our CMS Innovation Center, we are really 
focused on trying to create other opportunities for States for 
other types of programs to really be able to operate and move 
to much more of a value-based, outcomes-based program.
    We have a number of demonstrations that are underway and 
ones that we are intending to pursue, and really encourage all 
stakeholders to reach out to us about ideas.
    Mr. Sarbanes. Thanks very much. I look forward to 
continuing to engage with CMS and others to further strengthen 
Maryland's total-cost-of-care model and apply lessons learned 
from that success to drive future healthcare initiatives.
    I yield back, Mr. Chairman.
    Mr. Bucshon. The gentleman yields back. I now recognize 
Mrs. Miller-Meeks for her 5 minutes.
    Mrs. Miller-Meeks. Thank you, Mr. Chair, and thank you, Ms. 
LaSure, for being here.
    There were those of us who spoke very eloquently during the 
Affordable Care Act that provisions within the Affordable Care 
Act would lead to increased consolidation, both hospital 
ownership of physician practices, larger physician practices, 
and that consolidation would lead to procedures being done at 
hospitals at higher cost and ultimately would lead to increased 
healthcare costs.
    And in 2019 and in 2020, almost 50,000 physicians left 
private practice to work for hospitals or other corporate 
entities. Roughly 70 percent of physicians are now employed by 
larger systems, meaning just 3 out of 10 doctors practice 
independently. Hospitals are motivated to gobble up physician 
practices because they are able to bill Medicare roughly double 
the amount that private practices are.
    Not only do payment differences in Medicare cost the 
Government and taxpayers more money, but it costs seniors more 
because they are paying inflated coinsurance amounts for 
services that would cost significantly less if provided by a 
nonhospital-owned practice.
    For example, a level 2 nerve injection in 2023 done in a 
physician's office would result in a $226 payment from 
Medicare. That same injection provided by a hospital outpatient 
department would result in a $741 payment. Same service, but a 
$515 payment increase due to it being provided in a different 
location, putting the patient and the Government on the hook to 
cover the delta.
    And I am in a district that has numerous both critical 
access hospitals, community hospitals, and in-between 
hospitals. And so I am very sensitive to, you know, the 
concerns of my rural hospitals, but when we are talking about 
the entire healthcare system and the cost of the healthcare 
system and trying to provide increased access and increased 
quality care, I think this is concerning.
    A 2020 estimate from the Congressional Budget Office 
projected $141 billion in savings, and I think that has now 
been increased to 158 by some more recent studies, $158 billion 
over the next 10 years, if site-neutral payment reforms were 
implemented.
    And let me also say that I was a physician in academic 
medicine and in private practice, and a hospital-employed 
physician.
    MedPAC has also supported site-neutral payment reform, not 
only because it would reduce cost to beneficiaries but because 
it would reduce incentives for vertical integration or 
consolidation in our healthcare system, which, as we all know, 
drives up costs.
    Can you detail CMS's plans to implement site-neutral 
payment reform, and how can Congress help?
    Ms. Brooks-LaSure. Well, thank you so much for talking 
about how important rural hospitals are, which is something 
that I have been spending a lot of my time and travels just 
hearing from rural hospitals, their issues, as well as the 
issues around consolidation, which I think we all are very much 
concerned about.
    I would say that, as you know, for the most part, Medicare 
payment policy is determined by statute. And so we are 
following the way that we pay according to what Congress has 
passed. In some limited circumstances we have implemented site-
neutral payments where we feel that we have authority, but 
happy to work with you in ways that we can continue to make 
sure that people can get care in the most appropriate setting.
    Mrs. Miller-Meeks. And we are also seeing a concerning 
trend of physicians being purchased by payers, with one health 
insurance company now owning 7 percent of all physicians in the 
United States. So another vertical integration that is 
extraordinarily worrisome.
    And do you believe it is better or worse for patient care 
when physicians leave private practice?
    Ms. Brooks-LaSure. We certainly want to make sure that 
people have access to care and access to choices, and 
consolidation can be an issue with that.
    Mrs. Miller-Meeks. Thank you so much for your testimony and 
for being here.
    I want to also echo the sentiments--my mother had 
Alzheimer's, so I appreciate all of you here in purple 
supporting Alzheimer's and our support for getting drugs that 
have been approved through the FDA on to the marketplace and 
covered. So I echo the sentiments of my colleague.
    Thank you, Mr. Chair. I yield back.
    Mr. Bucshon. The gentlelady yields back. I now recognize 
Mrs. Trahan for 5 minutes.
    Mrs. Trahan. Thank you to the chairman and to ranking 
member for holding this important hearing today. Thank you to 
our witness, Administrator Brooks-LaSure.
    I first want to start my remarks by voicing my strong 
appreciation for our hospitals and their workers, for the 
unbelievable job that they do in our communities. Whether it is 
a global pandemic, a natural disaster, a marathon bombing, a 
mass shooting, our Nation's hospitals are always there, and 
American patients expect them to be there, capable of meeting 
their needs in times of crisis.
    You know, many of my colleagues on this committee know 
that, when appropriate, I will take opportunity to talk about a 
critical safety net hospital in my district: Lawrence General 
Hospital. Lawrence General serves a majority of Medicaid 
patients in a city that is 80 percent Hispanic or Latino. Under 
extremely challenging circumstances, the nurses, doctors, and 
administrators at Lawrence General have continued to deliver 
high-quality, affordable care to the underserved.
    Like many safety net hospitals coming out of COVID, 
Lawrence is struggling financially. Administrator Brooks-
LaSure, how important is it to maintain access to care for 
underserved areas like Lawrence, Massachusetts?
    And what is the agency doing to protect the Nation's safety 
net providers?
    Ms. Brooks-LaSure. Thank you so much for mentioning how 
important our Nation's hospitals are in all sorts of 
situations, but certainly over the last couple of years, as we 
have been going through the COVID-19 pandemic.
    We are absolutely committed to doing everything we can 
within our own authority and have been looking at ways that we 
can support a host of hospitals, certainly including safety net 
hospitals which care for the most underserved, and would love 
to continue to work with you all on that.
    Mrs. Trahan. So I fully believe this committee has the 
responsibility to legislate in a way that allows our hospitals 
to deliver care while also lowering costs for American 
patients. Many of the bills in this hearing today are in the 
discussion draft phase. So I do look forward to working with my 
Republican colleagues to finalize them in a bipartisan manner.
    Administrator Brooks-LaSure, it is my understanding--and as 
my colleague from Iowa just mentioned--that in recent years 
there have been efforts by CMS to implement site-neutral 
payment policies for certain services. However, there are 
exemptions to the statutory requirement for rural sole 
community hospitals, cancer hospitals, and children's hospital 
to maintain access to appropriate care. Has CMS measured how 
some exemptions to site-neutral payment policies have 
maintained access to care in underserved areas?
    And how would extending similar exemptions to the Nation's 
safety nets help them financially?
    Ms. Brooks-LaSure. I am happy to follow up with you on that 
question.
    Mrs. Trahan. Thank you. Safety net hospitals often rely 
heavily on Medicaid and Medicare reimbursements to provide care 
to underserved populations. And any reduction in reimbursement 
rates could potentially impact their financial sustainability 
and their ability to provide essential services in their 
communities.
    We know that CMS supports the Nation's hospitals. Can you 
share how CMS is thinking about lowering Medicare costs for 
patients while balancing the need to protect and defend these 
critical providers?
    Ms. Brooks-LaSure. We certainly, within our authority, are 
very focused on pulling all of the levers that we can, and 
happy to continue our discussions around that.
    Mrs. Trahan. Well, I look forward to following up. I mean, 
it is worth noting that site-neutral payments can be a complex 
issue. While I am here to lower healthcare costs for patients, 
promote price transparency, and encourage competition among 
healthcare providers, I do want to make sure we are keeping in 
mind any unintended consequences that may limit access to care 
because of the discussion drafts in the hearings today.
    So I look forward to working closely with you, with my 
Republican colleagues to continue to work on the policies 
before us today.
    And thank you, Mr. Chair. I yield back.
    Mr. Guthrie [presiding]. The gentlelady yields back. The 
Chair now recognizes Mr. Crenshaw from Texas for 5 minutes for 
questions.
    Mr. Crenshaw. Thank you, Mr. Chair.
    Thank you, Administrator, for being here. I think we all 
share the common ground of lowering healthcare costs and, 
especially, shoring up hospital safety nets. And without 
appropriate protections that stem from costs from charity care, 
access is impaired and everyone's healthcare costs go up.
    I want to talk about the Medicaid Disproportionate Share 
Hospital program, the DSH program. It is an example where we 
provide very transparent payment to hospitals that do provide 
that charity care. Our healthcare system is complex. It is 
highly regulated. But the DSH program goes around this by 
directly giving straightforward payments to hospitals that are 
doing the good work of serving patients without coverage.
    Unfortunately, this is often--this program has been cut in 
favor of other priorities like the Affordable Care Act, and it 
has been cut as a budget gimmick. Now, we have kicked the can 
down the road by delaying those cuts for years and years and 
years. I am proud to partner with Congresswoman Clarke on 
bipartisan legislation to create a fully paid-for, 2-year 
solution to Medicaid DSH funding, which covers the costs of 
safety net hospitals that treat these at-need, uninsured 
populations, avoiding these cuts also in a way that is more 
fiscally responsible.
    I just want you to comment on that and underscore how 
important the DSH program is. I mean, you know, which hospitals 
bear the brunt of potential DSH cuts?
    Ms. Brooks-LaSure. As you were mentioning, so many of our 
safety net hospitals are the ones who would lose payments, 
according to DSH, because DSH really focuses on people--on 
hospitals that serve a disproportionate share of uninsured or 
Medicaid beneficiaries.
    Mr. Crenshaw. So I am going to assume that you would agree 
that we should probably----
    Ms. Brooks-LaSure. Yes.
    Mr. Crenshaw [continuing]. Not cut those in the future.
    Ms. Brooks-LaSure. I would say that it is very important 
that we maintain coverage for safety net hospitals.
    Mr. Crenshaw. And do you agree with the assessment?
    I mean, the Affordable Care Act's cuts were problematic for 
these healthcare safety net programs.
    Ms. Brooks-LaSure. I would say that it is important that, 
particularly as we still have uninsured in the country, to make 
sure that hospitals are paid for caring for them.
    Mr. Crenshaw. Yes, I mean, I would point out for the 
record, I mean, one of the problems here was that the DSH cuts 
did come from the ACA. There was a miscalculation of how many 
Medicaid enrollees would be in the program. It doesn't matter 
if it was an expansion State or a nonexpansion State. I mean, I 
am--Ms. Clarke is helping me lead this, obviously, and that is 
New York.
    So the last question I have: Do you agree DSH payments are 
an accountable and direct mechanism with which to subsidize 
hospitals?
    And as we rethink incentives in the system, could DSH be a 
good model for transparency when we do need to support 
hospitals in need?
    Ms. Brooks-LaSure. I do think that DSH is an incredibly 
important program, and a way of really understanding who is 
serving the----
    Mr. Crenshaw. Well, it is an important program. But, I 
mean, the framework, the way it is actually----
    Ms. Brooks-LaSure. Yes, I would agree with you----
    Mr. Crenshaw [continuing]. Administered, do you think----
    Ms. Brooks-LaSure [continuing]. That there is----
    Mr. Crenshaw [continuing]. It is a good model?
    Ms. Brooks-LaSure. I think that there is a lot of wisdom to 
having some understanding of what the mixed-payer mix looks 
like in terms of payment.
    Mr. Crenshaw. I want to talk about primary care access in 
the Medicaid program. You know, a simple question: Do you think 
there is a physician shortage, and where do you see that most 
pronounced?
    Ms. Brooks-LaSure. I would agree with you that we are 
seeing workforce challenges, and it is not everywhere, but it 
is in so many of our rural areas. And you mentioned primary 
care. We absolutely have a lack of primary care in many parts 
of the country.
    Mr. Crenshaw. Yes. I am introducing bipartisan legislation 
that would seek to--open access to independent primary care 
physicians in State Medicaid programs, particularly through 
recurring preset payments. We call that direct primary care. 
And I am doing this because in too many parts of my State--and 
throughout the country, actually--there is a shortage of 
primary care physicians to serve this critical population. The 
patient-to-physician ratio in rural areas is 39 to 100,000 
people, compared to 53 to 100,000 in urban areas. And we are 
looking to have a shortage in the United States of as many as 
55,000 primary care doctors.
    So I think this is very important legislation. I urge my 
colleagues to support it for obvious reasons. You know, access 
to primary care reduces emergency room utilization, improves 
outcomes, probably reduces overall healthcare spending. You 
know, we often talk about getting people access to coverage, 
but that isn't care. I think this legislation would go far in 
allowing States to experiment with their own Medicaid programs.
    There is no question in there, but if you have any last 
remarks or positive things to say about that, go ahead.
    [Laughter.]
    Ms. Brooks-LaSure. Just to agree with you that it is 
crucial that we do more to support primary care in this 
country.
    Mr. Crenshaw. Great. Thank you.
    And I yield back.
    Mr. Guthrie. Thank you. The gentleman yields back. The 
Chair, seeing none on the minority side, will recognize Mr. 
Bilirakis from Florida for 5 minutes for questions.
    Mr. Bilirakis. Thank you. I appreciate it, Mr. Chairman.
    Administrator Brooks-LaSure, I have expressed concerns 
about the practice of large health systems purchasing 
independent, freestanding physician offices and then 
subsequently billing for the same services by the same 
providers at a significantly higher hospital rate. The Office 
of Inspector General and others have explained that this 
dynamic has created adverse incentives for consolidation and 
inappropriate billing practices that ultimately cost the 
Medicare program and cost patients who have to pay 20 percent 
copay for hospital outpatient services.
    So I wanted to ask you about the process CMS undertakes 
after a hospital purchases a physician office practice to 
subsequently bill at the hospital rate as a hospital outpatient 
department. Can you please tell us what CMS does and what the 
process involves to ensure that hospital-acquired freestanding 
physician offices are compliant with the relevant conditions of 
participation and other provider-based facility requirements in 
Medicare in order to bill as a hospital?
    And then I have a followup, as well.
    Ms. Brooks-LaSure. Certainly. And as I thank the committee 
for really focusing on hospital consolidation and our concerns 
around what that is meaning for physician offices, our role is 
to certainly put out, based on Congress, payment policies. And 
when hospitals agree to get payment from us, they agree to 
follow the rules around all of our guidances. And we certainly 
will investigate if a hospital is billing incorrectly.
    Mr. Bilirakis. Yes, that is my followup: Will you commit to 
work with members of this committee to ensure this process is 
efficient and effective and ensuring these facilities meet the 
necessary requirements to bill as hospitals?
    Ms. Brooks-LaSure. Yes.
    Mr. Bilirakis. OK. Very important for our patients too.
    Next, I also wanted to ask you about CMS's transitional 
coverage of emerging technologies rule. We are almost 2 years 
after the agency's repeal of the original MSET rule, which we 
had expressed was incredibly disappointing at the time. CMS 
promised to replace it with a new TSET rule to provide Medicare 
coverage for new medical breakthrough device technologies but 
has yet to do so despite the target date supposedly set for 
this month. That is why I led bipartisan legislation in this 
space to provide this pathway into law, since it is clear CMS 
has little interest in advancing innovation for patients.
    Again, Administrator, can you tell us when will CMS release 
and implement your final TSET rule?
    And what is CMS planning to do to ensure this simply isn't 
another CED process but instead a meaningful separate pathway 
for new devices with existing, sound data that does not require 
additional evidence generation?
    If you could answer that, I would appreciate that very 
much.
    Ms. Brooks-LaSure. Yes. We are committed to releasing 
updated guidance this spring, and I will just say that we have 
been working and talking with stakeholders, device companies to 
make sure that they have an understanding of our roles, and 
will--we will absolutely put that out very soon.
    Mr. Bilirakis. OK, very good. We are going to stay on you 
with that.
    One of the themes on our agenda today is about discouraging 
additional consolidation in the marketplace. In one of our 
draft bills, the Provider and Payers Compete Act would require 
HHS, during its annual rulemaking on Medicare provider 
payments, to consider the effects these regulatory changes have 
on further consolidation in the marketplace. I have been 
concerned about how the physician fee schedule, for example, is 
contributing to these trends.
    How will you ensure your agency is doing what it can, from 
a regulatory standpoint, to prevent additional consolidation, 
whether it is through the physician fee schedule or other rules 
that affect provider reimbursement?
    Ms. Brooks-LaSure. I would be happy to work with you on any 
and all ideas that you have for us in terms of our authority.
    Mr. Bilirakis. All right, very good. Thank you. I guess my 
time has run out.
    Thank you, Mr. Chairman. I yield back.
    Mr. Guthrie. The gentleman yields back, and that concludes 
all Members present who have asked questions or--questions. 
Thank you for being here today.
    I think just the one thing I can say both sides have 
absolutely agreed on, that we need to work on the Alzheimer 
drug and make sure that people have access as we move forward.
    I appreciate the opportunity for you--I appreciate you 
being here, but I did have three letters for the record I 
forgot to submit for the record. I showed the ranking member. 
It is for our bill, so it is supporting our bill together. And 
then Dr. Burgess offered one I am not sure I correctly 
submitted for the record.
    So without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Guthrie. Thank you for being here, and we appreciate 
your time, and we got you--our agreed-upon time, so we 
appreciate that. And now we will get ready for panel 2.
    [Pause.]
    Mr. Guthrie. The second--the hearing will come back to 
order, and we will be prepared for the second panel. I will 
introduce our witnesses, and then we will recognize each other 
for 5 minutes for questions.
    I think most of you have testified or seen this, that you 
all have a light. When--you have a green light. When the light 
gets yellow, it means to start summarizing, and to be ready to 
finish. And when it is red, it means time has expired. So you 
have 5 minutes for moving forward.
    So I am going to introduce the witnesses, and we will begin 
the questions--the opening statements.
    So first, Ms. Ashley Thompson, senior vice president of 
public policy analysis and development for the American 
Hospital Association.
    Next we have Karen [sic] Bass, chief policy and external 
affairs officer for the Pharmaceutical Care Management 
Association.
    Our next witness will be Brian Connell, executive director 
of Federal affairs for Leukemia & Lymphoma Society.
    The next witness is Sean Cavanaugh, chief policy officer 
for Aledade--sounded like a Kentucky Derby horse name, so --
that is coming up in a couple of weeks, so watch Kentucky.
    Our next witness will be Ilyse Schuman, a senior vice 
president of health policy for American Benefits Council.
    And then Mr. Loren Adler, associate director of the USC-
Brookings Schaeffer Initiative for Health Policy.
    We appreciate you all being here, taking the time. I know 
you have--most of you were able to listen to the first panel, 
and know what some of us are thinking and what our thoughts 
are, so we appreciate that. We appreciate you being here. All 
of us are going to be working together to work on these pieces, 
specific pieces of legislation before you today.
    And so with that I will begin with--our first witness will 
be Ashley Thompson, senior vice president of public affairs.

  STATEMENT OF ASHLEY THOMPSON, SENIOR VICE PRESIDENT, PUBLIC 
POLICY ANALYSIS AND DEVELOPMENT, AMERICAN HOSPITAL ASSOCIATION; 
   KRISTIN BASS, CHIEF POLICY AND EXTERNAL AFFAIRS OFFICER, 
  PHARMACEUTICAL CARE MANAGEMENT ASSOCIATION; BRIAN CONNELL, 
 EXECUTIVE DIRECTOR, FEDERAL AFFAIRS, THE LEUKEMIA & LYMPHOMA 
 SOCIETY; SEAN CAVANAUGH, CHIEF POLICY OFFICER, ALEDADE; ILYSE 
    SCHUMAN, SENIOR VICE PRESIDENT, HEALTH POLICY, AMERICAN 
    BENEFITS COUNCIL; AND LOREN ADLER, FELLOW AND ASSOCIATE 
DIRECTOR, USC-BROOKINGS SCHAEFFER INITIATIVE FOR HEALTH POLICY, 
            ECONOMIC STUDIES, BROOKINGS INSTITUTION

                  STATEMENT OF ASHLEY THOMPSON

    Ms. Thompson. Chair Rodgers, Ranking Member Pallone, Chair 
Guthrie, and Ranking Member Eshoo, and members of the committee 
and subcommittee, I appreciate the opportunity to testify on 
behalf of the American Hospital Association's 5,000 member 
hospitals and health systems.
    Hospitals and health systems are cornerstone of communities 
across our Nation. The more than 6 million people who work 
there provide care, compassion, and comfort for the sick and 
injured 24/7, 365 days a year. Last year they delivered 3.5 
million babies and provided emergency care for 123 million 
people. They are at the forefront of developing new techniques 
and technologies to prevent, diagnose, and treat disease and 
are responsible for training the next generation of doctors and 
other clinicians.
    While hospitals' commitments to caring never wavers, the 
reality is right now they are facing many significant 
challenges. These include historic workforce shortages 
resulting in a national crisis, soaring costs of providing 
care, cracks in the supply chain, overwhelming regulatory and 
administrative burdens, and severe underpayment by Medicare and 
Medicaid.
    These challenges are jeopardizing access to care and 
services for patients and communities. Some hospitals are being 
forced to cancel or close critical services, particularly in 
rural areas. Patients are experiencing longer wait times to 
receive care. As all of you are hearing, hospitals are boarding 
patients ready for discharge without any additional 
reimbursement because post-acute care facilities and nursing 
homes do not have space. Several hospitals are struggling to 
remain open.
    The AHA appreciates the subcommittee's dedication to 
healthcare affordability, a goal that all of our members 
fundamentally share. Thus, I appreciate the opportunity to 
comment on five of the issues addressed by the subcommittee's 
legislative proposals. Moreover, the AHA looks forward to 
discussing them further with committee members and staff over 
the next several weeks.
    First, as you know, the hospital price transparency rule 
went into effect 2 years ago during one of the most difficult 
periods of the pandemic. Since then, hospitals have made 
significant progress complying with these regulations. 
According to CMS, 70 percent of hospitals have adhered to both 
components of the rule, despite its complexity and lack of 
clarity. Hospitals are eager to continue their compliance 
efforts, and the Transparent Price Act affords an opportunity 
to continue to work together towards this goal.
    Secondly, the AHA strongly opposes legislation that would 
lead to additional site-neutral payment cuts and threaten 
access to patient care. There is nothing neutral about site-
neutral policies. Compared to other healthcare settings, 
hospital outpatient departments treat patients who are often 
older, poorer, sicker, and with more complex medical 
conditions. Hospital outpatient departments also must comply 
with more comprehensive licensing, accreditation, and 
regulatory requirements. Additionally, hospitals are required 
to maintain standby capacity for disasters, public health 
emergencies, and unexpected traumatic events, as well as 
deliver emergency care regardless of insurance status.
    Third, the AHA strongly supports the 340B drug discount 
program, which is crucial to helping hospitals stretch limited 
Federal resources and expand health services to patients and 
communities. We appreciate the subcommittee's interest in 
making sure all stakeholders meet 340B program integrity 
requirements. Already, 340B hospitals must attest to meeting 
all program requirements, recertify their eligibility annually, 
participate in audits conducted by HRSA and drug manufacturers, 
and maintain records and inventories of all 340B and non-340B 
prescription drugs. The AHA would oppose efforts to create 
significant new reporting requirements for 340B hospitals. In 
addition, any measures that increase transparency for 340B 
providers also should include greater transparency for drug 
companies.
    Fourth, the AHA opposes changes that would either expand 
the number of physician-owned hospitals or ease restrictions on 
the growth of existing facilities. Studies show that physician-
owned hospitals cherry-pick patients who are less medically 
complex and more financially lucrative, as well as provide 
limited or no emergency services.
    Finally, I would like to express strong support for the 
Medicaid DSH legislation. We appreciate that Congress has, on a 
bipartisan basis, kept the Medicaid DSH cuts from going into 
effect. Hospitals care for a significant number of low-income, 
uninsured, and Medicaid patients, and the Medicaid DSH program 
is critical to maintaining access to essential services for 
these individuals.
    Thank you for the opportunity to testify. I look forward to 
taking your questions.
    [The prepared statement of Ms. Thompson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. Thank you. Thank you for your statement. The 
Chair now recognizes Ms. Bass.
    You are recognized for 5 minutes for an opening statement.

                   STATEMENT OF KRISTIN BASS

    Ms. Bass. Good afternoon, Chairman Guthrie, Ranking Member 
Eshoo, and members of the subcommittee. My name is Kristin 
Bass, and I am the chief policy and external affairs officer 
for PCMA, the national association representing America's 
pharmacy benefit companies. I appreciate the invitation to 
share our industry's views on the legislation under 
consideration. We are grateful for the opportunity to work with 
both majority and minority staff, and your willingness to hear 
a variety of views.
    It is important to understand what pharmacy benefit 
companies do to best evaluate how legislative change may impact 
their ability to help secure drug savings and drive 
affordability for patients. We are proud that pharmacy benefit 
companies are hired to administer prescription drug plans for 
more than 275 million Americans who have health coverage 
through public and private employers, labor unions, Medicare, 
other Federal programs, and the exchanges, and we are proud of 
the physicians, pharmacists, and other health professionals who 
help design the prescription drug coverage options PBMs offer, 
and administer the medication quality and safety programs they 
provide.
    To be clear, no employer or plan sponsor has to hire or use 
a pharmacy benefit company, but virtually all choose to do so 
to secure savings on drugs and to better serve the patients in 
their plans. Employers select a PBM through a transparent and 
highly competitive bidding process. With over 70 full-service 
pharmacy benefit companies in the market and regular new 
entrants, plan sponsors can choose to contract with the company 
that best meets their unique needs. Some may choose based on 
scale and ability to negotiate deep discounts. Others 
prioritize innovative care management programs and different 
levels of service.
    As part of their bid request, plan sponsors define and 
appropriately demand what information, transparency, and audit 
rights they need, and those are memorialized in their 
contracts. Our companies provide their clients with a broad 
array of actionable, accurate information on price and quality 
to make efficient purchasing and plan design decisions. And in 
recent years, Congress and Federal regulators have added 
numerous additional requirements for PBMs to report to Federal 
agencies and to provide aggregated public reporting.
    So why do plan sponsors choose to use a pharmacy benefit 
company? They rely on our companies' expertise to secure 
savings through price concessions from drug companies, to 
partner with lower-cost, higher-quality pharmacies, and to 
prove medication adherence. For small employers who may 
struggle even to provide health benefits, pharmacy benefit 
companies offer options for cost predictability, enabling them 
to stretch their benefit dollars further.
    Plan sponsors also choose how best to use the savings that 
PBMs deliver, whether to lower premiums, lower costs at the 
pharmacy counter, or make benefits more robust. The pharmacy 
benefit company delivers the savings, and the employer plan 
sponsor decides how to use them.
    As we evaluate the legislation before the subcommittee 
today, we have two major concerns that carry through many of 
the bills proposed to address prescription drug costs.
    First, the legislation would limit choice by dictating 
terms to the market, taking away flexibility that is needed for 
managing drug costs, keeping health coverage affordable, and 
helping patients stay on their meds. We should avoid government 
mandates that could increase costs and decrease innovation.
    Second, none of the legislation being considered today 
would address the price of prescription drugs, but may instead 
increase costs not only by limiting choice but by stacking the 
deck in favor of drug companies when it comes to negotiations 
for rebates. We have to be cognizant of what happens when one 
side in a negotiation gets confidential information about their 
competitors' negotiated rates. It only leads to higher costs.
    Instead, we encourage the subcommittee to address the 
actual cause of the affordability challenge: the price set by 
the drug company and the rampant patent abuses that have 
blocked competition. To that end, we greatly appreciate the 
leadership of many members of this subcommittee who have 
supported policies to ensure more competition and choice by 
getting generics and biosimilars to market without delay.
    Thank you for inviting me to appear before the subcommittee 
today. Our companies exist to secure savings and improve health 
outcomes for plan sponsor employers, unions, and government 
programs, and, most importantly, the patients we serve. I hope 
that you will keep this important and valued role front of mind 
as you consider these bills as well as my written testimony, 
which details unintended consequences about the specific bills 
before you.
    We look forward to continuing our work with you and the 
patients and payers we serve to secure affordability, access, 
and adherence to the medications Americans need. I am happy to 
answer any questions.
    [The prepared statement of Ms. Bass follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. Thank you.
    Mr. Connell, you are now recognized for 5 minutes for your 
opening statement.

                   STATEMENT OF BRIAN CONNELL

    Mr. Connell. Thank you, Chairman Guthrie and Ranking Member 
Eshoo, and members of the committee. My name is Brian Connell, 
and I serve as the executive director of Federal affairs at the 
Leukemia & Lymphoma Society, where our mission is to cure blood 
cancer and to improve the quality of life for patients and 
their families.
    We were founded by 2 parents who had suffered the 
unimaginable loss of their 16-year-old son to leukemia. In the 
nearly 75 years since our founding, the nonprofit started by 
that one couple has invested $1.6 billion in research aimed at 
creating a world in which cancer patients survive their blood 
cancer and thrive after treatment.
    The good news is that we have made incredible progress. 
Several cancers considered death sentences not long ago, 
including the leukemia that sparked our founding, are now 
highly survivable. The bad news is that we have much more work 
to do, and it goes far beyond medical research. The work ahead 
includes both ensuring that every patient can access the care 
that they need and relieving patients of the terrible financial 
burden that comes with that care.
    The work is urgent. This year alone, more than 180,000 
Americans will receive the life-changing news that they have a 
blood cancer. Each of these individuals and their families will 
be thrust into an overwhelming, impersonal maze of provider 
institutions and insurance rules with potentially ruinous out-
of-pocket costs around every corner.
    For a patient with private insurance, a diagnosis of acute 
leukemia will rack up an average of more than $800,000 in 
treatment costs in the first year alone. The costs that are not 
borne directly by patients in the form of deductibles and 
copays are often foisted upon consumers and public insurance 
programs. Too often, those insurance companies and public 
officials then respond by inventing new ways to shift costs 
back onto patients. We see higher deductibles, additional 
noncovered care, increased coinsurance, rising premiums, more 
red tape, stricter eligibility criteria for insurance. The list 
goes on.
    And this is why patients need bold action to make sure that 
the system is sustainable for patients today and into the 
future. We are encouraged that many of the proposals that the 
committee is considering today to promote--will promote 
healthcare competition and encourage meaningful transparency. 
We share these goals because we believe that increased 
competition and transparency have real potential to realign 
incentives to achieve the improved outcomes--health outcomes 
that we are looking for while lowering costs for patients, 
consumers, employers, and taxpayers.
    The system is riddled with perverse incentives and a 
frustrating lack of transparency, so the opportunities are 
plentiful. I will just give two quick examples.
    First, the disparity in Medicare's reimbursement for the 
same service across provider settings is one of the incentives 
that has led to a dramatic rise in hospital acquisitions of 
physician practices. Hospitals acquiring physician offices 
leads to the result that we have seen in the past few years of 
the share of cancer drug infusions happening in hospital 
outpatient facilities has increased nearly 300 percent. And 
when a hospital purchases a physician practice, the shift in 
reimbursement increases the patient's out-of-pocket costs 
without corresponding improvement to the quality of their care. 
Cancer patients should not pay more simply because the 
nameplate on the clinic door says ``Hospital'' rather than 
``Physician Office.''
    Second, the lack of transparency in the pharmacy supply 
chain has led to the proliferation of so-called spread pricing. 
Spread pricing is a practice in which the PBM administering a 
drug's plan charges the plan far more for a drug than the 
acquisition cost. One study found that PBMs administering 
Medicaid pharmacy benefits across the country paid roughly $84 
per tablet for a critical cancer drug called Imatinib while 
charging the State Medicaid programs as much as $296 per tablet 
for the same drug. And this difference adds up. The State of 
Ohio reported that its Medicaid program had lost more than $233 
million in potential savings due to spread pricing in a single 
year.
    These are big problems, but we are encouraged by this 
committee's bipartisan work to take on these tough issues. 
Reforming these incentives will make a meaningful and lasting 
impact on the lives of patients with cancer. So we look forward 
to continuing to partner with you to promote transparency and 
competition across every area of the healthcare system. Thank 
you.
    [The prepared statement of Mr. Connell follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. Thank you. The Chair now recognizes Mr. 
Cavanaugh for 5 minutes for questions.
    Mr. Cavanaugh. Thank you, Mr. Chairman.
    Mr. Guthrie. I mean for--excuse me--to--your opening 
statement.

                  STATEMENT OF SEAN CAVANAUGH

    Mr. Cavanaugh. Thank you, Mr. Chairman, and I thank the 
subcommittee for inviting me today to discuss strategies for 
increasing transparency and competition in healthcare.
    My name is Sean Cavanaugh. I am the chief policy officer at 
Alidade. We help independent primary care practices deliver 
better care to their patients and thrive in value-based care. 
Previous to Alidade, I was at CMS Innovation Center and also 
served as director of the Center for Medicare. I am proud to 
continue the movement to better care at lower cost in the 
private sector.
    Alidade works with more than 1,500 independent primary care 
practices, including 200 FQHCs and rural health centers across 
45 States to make them successful in value-based care. These 
practices care for 2.2 million beneficiaries in value-based 
care contracts. More than half of the practices have fewer than 
10 clinicians. Sixty percent of them are in primary care 
shortage areas. And Alidade is now what is called a public 
benefit corporation. That means explicitly our mission is to 
improve healthcare in a way that is good for patients, good for 
practices, and good for society.
    And Alidade is producing meaningful results. Our estimates 
are that in 2022 our Medicare ACOs are projected to save 
Medicare more than $535 million. Prior-year data from CMS, 
official data, in 2021 Alidade sponsored 4 of the top 10 
performing ACOs in the United States. And one of those four, 
our Mississippi ACO, was an FQHC-only ACO, was the fourth-
highest saver in the United States.
    And these savings were generated through real improvements 
in the care for Medicare beneficiaries: more primary care 
delivering better diabetes control, more blood pressure 
screening leading to fewer hospitalizations and emergency room 
visits. The data clearly show that ACOs grounded in advanced 
primary care can deliver better care at lower cost. But that 
approach is under threat from consolidation and anticompetitive 
forces.
    And let's be clear: The evidence is overwhelming. Hospital 
mergers are steadily increasing. Horizontal consolidation leads 
to higher prices. Vertical consolidation leads to higher 
prices. And there is no clear evidence that consolidation leads 
to higher quality. Provider concentration increases the 
bargaining power of large health systems, which allows them to 
demand higher prices from health plans. And unfortunately, 
COVID may have accelerated these trends. Small physician 
practices and safety net hospitals entered the pandemic with 
vulnerable financial positions and were less likely to access 
emergency relief funding.
    This committee has an opportunity to take meaningful action 
to promote competition and transparency in this country. First 
and foremost, we need to invest more in primary care. That 
means both Community Health Centers but also independent 
practices. And I thank this committee for its work recently in 
looking at workforce, which is critical.
    Second, we need to put an end to unnecessary facility fees 
and move to site-neutral payments. Facility fees are part of 
the financial engine that hospitals rely on to acquire 
independent practices and reduce competition in their markets. 
Independent practices and Community Health Centers struggle to 
recruit new physicians because they cannot compete with 
hospitals that are receiving higher payments. And these 
facility fees, of course, also raise out-of-pocket costs to 
Medicare beneficiaries. Congress and CMS have taken some 
actions toward site neutrality, but the overwhelming majority 
of services are still receiving higher payments when they are 
in the hospital--provider-based clinics.
    I would also note there are other policies not in front of 
the committee today that the Congress should consider, 
including prohibiting anticompetitive contracting by healthcare 
providers such as gag clauses, antitiering, antisteering 
clauses, as well as all-or-nothing clauses.
    There are--we could optimize some of the incentives in the 
Medicare shared savings program. We have been talking to CMS 
about this, especially for rural providers. We could improve 
access to capital for independent practices, reform CON rules 
in States, reinvigorate antitrust enforcement, and regulate 
anticompetitive data sharing practices.
    Thank you again for the opportunity to testify, and I look 
forward to working with this committee on this bipartisan work.
    [The prepared statement of Mr. Cavanaugh follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. I thank you for your testimony. The Chair now 
recognizes Ms. Schuman for 5 minutes for your opening 
statement.

                   STATEMENT OF ILYSE SCHUMAN

    Ms. Schuman. Thank you. Chair Guthrie, Ranking Member 
Eshoo, and distinguished subcommittee members. Thank you for 
the opportunity to testify on behalf of the American Benefits 
Council.
    The council represents over 220 of the world's largest 
corporations advocating on a full range of employee benefit 
issues. Employers play a critical role in the healthcare system 
and have a vested interest in securing the health and well-
being of their employees.
    Employers are also deeply concerned about rising healthcare 
costs and are increasingly frustrated by fundamental failures 
in the healthcare marketplace that stifle competition, cloud 
line of sight into price and quality information, impede 
innovation, and ultimately increase costs.
    The only way to truly make healthcare more affordable for 
working families is to understand and address these root causes 
of rising healthcare costs by increasing transparency and 
competition.
    Hospital price increases are key drivers of recent spending 
growth among the privately insured. The most important driver 
of higher hospital prices is, in turn, the rise of hospital 
monopolies that use their market power to demand higher and 
higher prices. And at the same time, many hospital systems are 
becoming vertically integrated, with physician organizations 
raising prices. These higher hospital prices are coming without 
an improvement in the quality of care. In fact, provider 
consolidation leads to less bang for the buck.
    The Council strongly supports legislation to expand site-
neutral payment reforms. Often physician offices are being 
purchased by hospitals and simply rebranded as part of a 
hospital's outpatient department in order to collect the 
resulting higher payments. Such legislation, by aligning 
payment differentials across sites of service, removes a 
powerful incentive for provider consolidation and corrects a 
significant distortion leading patients to higher-care 
settings.
    Employers recognize that hospitals are an essential 
component of the Nation's health system, particularly during 
the pandemic, and understand that some hospitals are facing 
financial challenges. A recent Health Affairs article examined 
the financial performance of large, nonprofit hospital systems 
in the post-COVID era and revealed a more complex financial 
picture. Investment losses accounted for approximately 85 
percent of overall financial losses. This analysis suggests 
that investment losses are actually the primary driver of these 
losses, not increased labor and supply costs. Employers, 
patients, and taxpayers should not have to foot the bill for a 
hospital's risky financial position.
    Hospitals are also able to use a billing practice which is 
fueling acquisition of physician practices because they are not 
required to specify where services are provided. The Council 
strongly supports legislation that will promote honest billing 
practices by helping patients--payers to distinguish between 
sites of care.
    The Council also strongly supports the bipartisan 
Transparent Price Act. A competitive and value-driven 
healthcare market is predicated on transparency. Effective 
transparency tools in the hands of employers and consumers can 
be transformative, making healthcare both simpler and more 
affordable. Unfortunately, far too many hospitals across the 
country remain out of compliance, or meaningful compliance, 
with the hospital transparency rule. Codifying and 
strengthening the rule, including through increased maximum 
penalties, is essential to realizing its objective.
    The Council also strongly supports the PBM Accountability 
Act. The current rebate structure is complex and opaque, and 
employers continue to encounter barriers to PBM pricing 
transparency. With the three largest PBMs controlling 80 
percent of the market, employers--even very large employers--
are not going to have the leverage in contract negotiations 
that they need. Federal legislation requiring strong 
transparency and accountability for PBMs to employers, their 
primary clients, is essential to employer efforts to manage 
prescription drug costs.
    While employers continue innovating and exploring 
strategies to lower costs, Federal legislative solutions are 
needed to create a more competitive and transparent healthcare 
marketplace. This hearing and the solutions under review today, 
therefore, represent a critical step towards making healthcare 
more affordable.
    I appreciate the opportunity to testify, and look forward 
to answering any questions.
    [The prepared statement of Ms. Schuman follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. Thank you. I thank you for your testimony.
    The Chair now recognizes Mr. Adler for 5 minutes for your 
opening statement.

                    STATEMENT OF LOREN ADLER

    Mr. Adler. Thank you, Chairman Guthrie and Ranking Member 
Eshoo and members of the subcommittee. Thank you for the 
opportunity to testify today on the crucial topic of increasing 
transparency and competition in healthcare.
    My name is Loren Adler. I am a fellow and associate 
director at the USC-Brookings Schaeffer Initiative for Health 
Policy at the Brookings Institution here in DC. I study a wide 
range of topics, including healthcare market competition, 
provider payments, and prescription drug policy. And relevant 
to today's hearing, much of my current research is focused on 
private equity and health plan acquisitions of physician 
practices.
    The healthcare industry has experienced significant 
consolidation over the last decades. Horizontal consolidation, 
such as the merging of hospitals or physician groups within the 
same geographic market, unambiguously leads to higher prices 
for consumers, lower wages for workers, and seemingly actually 
diminished quality of care. With a greater market power as an 
employer locally, there is also evidence that hospital mergers 
reduce the wages paid to nurses and other hospital staff with 
industry-specific skills.
    And vertical consolidation involving hospitals and 
physician groups has also accelerated. Today about two in five 
doctors now work for a hospital or a practice that is at least 
partially owned by a hospital. And more and more evidence 
suggests that this vertical consolidation appears to drive up 
costs for consumers with unclear impacts on the quality of 
care.
    And now we are seeing growing vertical consolidation 
between health plans and physician groups, PBMs, and specialty 
pharmacies. And we have strong evidence that insurer-provider 
integration is being leveraged to accelerate coding of their 
Medicare Advantage enrollees to generate higher government 
payments than were intended, costing taxpayers billions.
    Fundamentally, I want to leave members of the subcommittee 
with one key message: We need to stop digging the hole deeper. 
Even with overwhelming evidence of the harms caused by provider 
consolidation, too little is done to just stop digging the hole 
deeper. We need to cut it out with policies that encourage 
consolidation, and we need better data to get a full picture of 
what is going on to better limit anticompetitive conduct.
    There are a wide array of policy options that could enhance 
competition in healthcare markets, you know, from greater 
antitrust oversight to Medicare Advantage reform to changes in 
Medicare payment policies. Today I will try to narrow my focus 
on two main points relevant to proposals that are under 
consideration by this subcommittee today.
    One, Medicare rates are intended to reflect the costs of 
providing services for an efficient provider. As such, Medicare 
should not be paying more for the same exact service when it is 
delivered in a hospital outpatient department rather than a 
physician's office, provided that the physician's office 
setting is safe and clinically effective for most patients. 
This policy change has widespread bipartisan support in the 
policy community, across--basically, any think tank you talk to 
supports this policy. Lobbyists are pretty much the only 
opposition, really, to this policy.
    Number two, increased transparency can both facilitate 
stronger research and oversight and, in certain circumstances, 
drive price competition by helping patients select lower-cost, 
higher-quality providers.
    With respect to site-neutral payments, to illustrate this 
issue I want to consider the example of a Medicare patient 
receiving a level two nerve injection, as I think one of the 
congressmen brought up earlier, because it is the example in a 
MedPAC report, so--right?
    Let's take this. If the patient receives this injection at 
a physician's office, she would owe $51 in coinsurance on a 
$256 total cost. Now, let's say that a hospital buys that 
physician's practice and converts it into a hospital outpatient 
department. The care remains the same. It is the same doctor 
providing the care, but now that same patient receiving the 
same service will owe nearly three times as much. They would 
owe $148 in coinsurance on a total payment of $741. This 
payment disparity not only increases costs for beneficiaries 
and taxpayers but encourages hospitals to buy up physician 
practices, leading to market consolidation and increased 
healthcare costs that spill over to the commercial market as 
well.
    Small efforts have been made to move toward site-neutral 
payments, but more work is needed. Legislative proposals under 
consideration today to eliminate this payment disparity for 
low-complexity services would result in substantial savings for 
beneficiaries and taxpayers while fostering greater competition 
in physician markets.
    And it is important to note here today that we are focused 
on lower-complexity services where we are saying to equalize 
payments. We are primarily here talking about office visits, 
imaging, and drug administration.
    And lastly, for transparency, that is also crucial. 
Specifically with systematic data about provider ownership 
arrangements and commercial market prices and volumes, 
researchers could better identify the effects of various forms 
of healthcare consolidation and elucidate solutions. The 
opacity of payment flows between specific actors in the drug 
supply chain similarly inhibits quality research, and evidence 
suggests that patients can make use of transparent pricing 
information for more shoppable services.
    The committee's focus on bipartisan policies to improve 
healthcare, competition, and transparency is a welcome sight. 
And thank you again for the opportunity to testify today.
    [The prepared statement of Mr. Adler follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. Thank you. We thank you for your testimony, 
all the witnesses' testimony. We will now move into Members' 
questions, and I will recognize myself for 5 minutes for 
questions.
    So, Ms. Bass, we were talking earlier that we had some of 
the same professors. You probably studied harder than I, so I 
appreciate that, and look forward to your responses on some of 
these questions that I have.
    But on the rebate model--so we are interested in the rebate 
model--and the, I guess, concern is that it incentivizes brand 
manufacturers to deliver higher rebates to ensure their 
products land on the formularies. And I know there is the 
opposite side that says the brand manufacturers choose to set 
up prices high. But the reality is that the rebate model seems, 
in our research, to incent manufacturers to keep prices high to 
get rebates to get on the formulary. And that affects 
somebody's paying out of pocket at the counter.
    So if the manufacturers could just lower their prices to 
get on the formulary, rather than give rebates, why wouldn't 
they?
    Ms. Bass. Thanks for that--the talk button helps, doesn't 
it?
    Thank you so much for that question. So you are asking 
about why manufacturers don't just lower their price. And I 
think we have seen recently that, in fact, manufacturers do 
sometimes lower their prices. We know that rebates are not 
correlated with pricing. Medicare Part B gets no rebates, and 
prices go up at virtually the same amount that is happening on 
the Medicare Part D side.
    The insulin example shows you that manufacturers will, in 
fact, lower their prices, and only manufacturers can control 
how the prices are set. So I think we just fundamentally 
disagree with the premise that rebates have anything to do with 
driving up prices.
    Mr. Guthrie. That is kind of the point. You know, we did 
have some--we had a hearing, and it the was oversight 
committee, actually, the oversight committee that Mr. Griffith 
now chairs. And we had all the manufacturers, we had the PBMs, 
we had all the group, and we really kind of focused on insulin 
prices. And coming out of that hearing is when, all of a 
sudden, the prices started dropping.
    So it just didn't seem like until we exposed the price, 
that it was--I mean, this is kind of the concern, is that --
what we want, what kind of came out of this, and kind of the 
genesis for a lot of this work for everybody--I am not just 
talking to you, Ms. Bass--is that people will react different 
if they know the price. And if it is inefficient, then the 
market is going to demand that it change and move forward.
    And so, Ms. Schuman, I have a kind of a conglomerate 
business in my area who have several businesses, but grocery 
stores and they have supplier retail pharmacy. And they came to 
me and says, ``Look, we are paying this amount of money for our 
employees to go to the pharmacy,'' and very few employers have 
this information because they pay for their employers to go the 
pharmacy benefit. But since they also own the pharmacy, they 
don't know what the pharmacy is getting reimbursed. And they 
sit down, and sit down with their insurance company, and the 
insurance company, ``Well, we will give you a break,'' because 
they were going to say we are not going to let you negotiate on 
our behalf anymore, because we don't--this is--look at the 
spread between what we are paying and what we are receiving. 
And so it gets back to making sure people have access to 
prices, and prices information, and how they react to that.
    And so my question: Do employers readily have access to 
information related to the prices that--so the PBMs will 
receive for their drug that they are selling it to you 
differently, do they have access to that information?
    Ms. Schuman. Employers don't know what they don't know. And 
I think that is the issue.
    And I think the definitions keep changing about whether 
something, a rebate, whether it is another fee. And as I 
mentioned in my testimony, trying to interject all of this 
transparency, which is, again, foundational for employer 
efforts to try to manage drug costs, you know, they don't 
necessarily have the leverage in those contract negotiations to 
make sure they have the specificity of definitions. And they 
are shapeshifting, perhaps, on the part of different revenue 
streams.
    And that is why I think this is a really critical market-
based solution to require transparency, to require sunshine and 
daylight, so employers truly know where that money trail is so 
they can make sure that they are spending their resources 
wisely.
    Mr. Guthrie. So it is just difficult to get information.
    And I guess what I am trying to get at, so the other 
argument would be--somebody has made this argument to me--is 
that, well, employers have the information, and they get to 
decide do they want to pay a lower monthly premium or do they 
want higher rebates and--a lower monthly premium and higher 
rebates, or they are going to have a higher monthly premium. 
Are you guys seeing that kind of information and making those 
kind of negotiations?
    Ms. Schuman. Well, you know, that is--even large employers, 
even very large employers have significant challenges, have run 
up to significant challenges just getting a hold of that 
information. And that information is so critical to have in 
hand for employers so they can decide what is the best way to 
make healthcare for their employees more affordable.
    Mr. Guthrie. OK, thank you.
    Well, I wish I had more time to ask questions. I only have 
5 more seconds, so I will yield back to myself and I will 
recognize the ranking member for 5 minutes for questions.
    Ms. Eshoo. Thank you, Mr. Chairman, and thank you to all of 
the witnesses. I have a few comments to make before I get to my 
questions.
    On PBMs, Ms. Bass, I am pleased to hear that you support 
getting generics and biosimilars to market, but I find it 
hypocritical when I hear time and time and time again that 
plans are often blocked by PBMs from offering the lowest-priced 
generic. Let me give you an example. The nonprofit Civica Rx in 
California has manufactured a prostate cancer drug for $160, 
but PBMs are not letting that cheap drug on insurers' 
formularies. Instead, the $160 drug is being blocked from the 
market so that PBMs can take a larger cut, and the larger cut 
is priced at $3,000.
    So I hope our committee really stands up to what needs to 
be done relative to PBMs, because there is a lot of work to do 
there.
    To the hospitals, on the whole issue of site neutral, we 
need to get a clear explanation from hospitals on why, after 
hospitals acquire physician practices, the prices for the 
services provided by the acquired physicians increases by 14 
percent. It is the same doctor, it is the same service, it is 
the same site, but 14 percent more really doesn't make sense.
    So I think that we are going to need more from the 
hospitals, and I say that really respectfully. Obviously, I 
love all the hospitals in my district, i.e., you have to love 
all the hospitals. Look what they have been through with their 
teams during the pandemic.
    To Ms. Schuman, thank you for the written testimony. I just 
want to highlight something, because hospitals are telling us 
about--so much about their losses that in--investment losses 
accounted for approximately 85 percent of overall financial 
losses.
    Now, there is some background in that, but for the large 
ones to have lost that kind of money because of what they 
invested in the stock market, I think that the committee needs 
to take that into consideration.
    So to Brian Connell, thank you for the work that you have 
done, your testimony today, and for working with us on 
spreading out the costs, which are capped, thank God, for 
Medicare beneficiaries and out of pocket, being able to spread 
that. I want to talk to you about the MVP.
    Can you explain why this new definition of best price is 
needed to allow for more value-based payment models?
    And in your testimony you recommend that value-based models 
need to protect patients from undue cost burdens. Do you have 
suggestions in that area for us, as we really hone the 
legislation and tailor it really well?
    Mr. Connell. Yes, thank you for the question, and thank you 
again for your work and many folks on this committee's work on 
lowering Part D costs. As you are referencing, this is 
incredibly important progress made last year.
    But to your question on Medicaid best price and its impact 
on value-based purchasing, we think value-based agreements have 
a lot of potential. In cancer care, where we have, you know, 
some potentially curative therapies, some therapies that, you 
know, might add a little bit of benefit, some that people 
question the benefit, there is no reason to pay the same for 
all of those different therapies. There should be rewards for 
innovation and for making a real impact on patient quality.
    And so what we see with the best price rules that we have 
today is that there is a challenge where, if you have an 
agreement between a manufacturer and a Medicaid program to pay 
less for a patient where the drug did not work for them, they 
didn't respond and it had no clinical benefit, right now that 
lower price that the--that would be reimbursed for that patient 
where there was no benefit, even if it is just 5 percent of 
patients did not respond, low--if you have a reduced cost, that 
cost could become--that price for the drug could become the 
price for all Medicaid patients because it is the lower price 
being paid by Medicaid.
    And so, without the flexibility to make sure that lower 
price can be allowed without drawing down the price for every 
patient--because there could be some patients that are 
responding perfectly to that, and really need a better price. 
So----
    Ms. Eshoo. That is----
    Mr. Connell. I think reforms are necessary there.
    Ms. Eshoo. That is helpful. Thank you for everything that 
you do.
    Mr. Loren, real quickly on the transparency for PBMs, I 
think it is a critical first step to their practices. It drives 
up drug prices, allows God knows what. What would you add to 
that?
    Mr. Adler. Sure. So----
    Ms. Eshoo. How would you address this?
    Mr. Adler. Yes, thank you for the question. So--sure, so I 
think you are right, and the Congressional Budget Office has 
said that they think there are some savings, if sort of 
temporary, to kind of giving some more information to employers 
so they know what is going on.
    I actually also think there is a lot of value that would be 
gained from transparency more broadly, and making available all 
of the various payment flows that go between actors, specific 
actors in the pharmaceutical supply chain, so we can really get 
at some basic questions in drug pricing that we just don't have 
the data for at the moment.
    Ms. Eshoo. Great, thank you.
    Mr. Guthrie. Thank you.
    Ms. Eshoo. Thank you to all the witnesses.
    Mr. Guthrie. The gentlelady----
    Ms. Eshoo. I yield back.
    Mr. Guthrie. Thank you. The gentlelady yields back. The 
Chair now recognizes Dr. Burgess from Texas for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman, and I do want to 
thank all of our witnesses for being here today.
    You can see how extremely important this is. And for all of 
the discussion that Congress never works together, I think you 
see the interest is genuine, and it is bipartisan.
    Ms. Thompson, let me start with you. We had a press release 
in September 2022 by the American Hospital Association that 
stated that 136 rural hospitals closed from 2010 to 2021. 
Obviously, we have got the pandemic in there, and a record 19 
closed in 2020 alone. We continue to receive requests for 
expanding payments to these hospitals. Many of those expanded 
payment requests are granted. And yet the closures continue to 
be reported or threatened.
    So the question I would have, is it possible that 
permitting a new type of entrepreneurial hospital, such as 
those built and owned by physicians, could be given a chance in 
rural--other areas, and it would not be risking existing 
hospitals at all because they are already closing in those 
areas?
    Ms. Thompson. Thank you very much for that question, 
Congressman Burgess, and thank you for your support of the 
Medicaid DSH bill. We really appreciate what that will do for 
vulnerable patients in vulnerable communities.
    Physician-owned hospitals are very different than 
freestanding community hospitals. Data has shown that physician 
hospitals can pick and choose the patients that they see, and 
those patients are typically wealthier and less complex to 
treat. The OIG, the GAO, MedPAC have had some studies in this 
space.
    And so additionally, some of these physician-owned 
hospitals don't have emergency rooms or backup services. And 
that means that patients, if something goes wrong, they rely on 
their community hospital. I think we would be concerned if 
physician-owned hospitals, given the workforce shortage, were 
to grow in rural areas such that they would pull workforce from 
the freestanding emergency--from the freestanding community 
hospital, and thus they might not be able to fulfill their 
mission of 24/7 backup services.
    Mr. Burgess. We are talking about areas where the existing 
hospitals have already closed, and we are trying to provide 
access for patients.
    Again, I do not understand why a fundamentally different 
model could not be entertained, even as a demonstration 
project. I have already referenced earlier in the previous 
panel, a hospital down on the Rio Grande Valley was doing an 
excellent job of providing service to uninsured and 
underinsured patients. They do that every day of the week down 
there. I mean, that is their business model.
    And I will just tell you, and I have shared with the 
committee before, a brilliant paper written in Health Affairs--
now it has probably been 10 years ago, I may have even been the 
one who wrote it--but look, as a physician, I want to go where 
my time is going to be maximized. And in a physician-owned 
hospital, a physician-owned-hospital-run operating room, I will 
just tell you they are much more efficient. There is the pride 
of ownership. Doctors care about how their patients are taken 
care of.
    And again, I know you have heard me say it over and over 
and over today, and you all have emphasized, as well, the 
vertical integration that is occurring where hospitals are 
buying doctors, and yet doctors can't buy hospitals. I mean, it 
just fundamentally makes no sense.
    Do you think that CMS appropriately adjusts payments to 
hospitals according to the risk of the patient?
    And if not, can you suggest how CMS could improve its risk 
adjustment methodology to prevent hospitals from cherry-picking 
sicker patients?
    Ms. Thompson. So I think that there is a lot to explore in 
terms of the risk adjustment. I think that different settings 
of care have different costs associated with them. The fact 
that freestanding community hospitals have the 24/7 emergency 
room and backup and standby services is more expensive. I know 
that we are held to higher regulatory requirements and 
conditions of participation, et cetera.
    Mr. Burgess. Well, let me ask you this. When an insurance 
company acquires a hospital and a hospital acquires a medical 
practice, do they require the doctors to use that hospital?
    Ms. Thompson. Depending on their insurance, my guess is 
yes.
    Mr. Burgess. Yes. The answer is yes.
    Thank you, Mr. Chairman. I yield back.
    Mr. Guthrie. Thank you. The gentleman yields back. The 
Chair now recognizes Mr. Cardenas from California for 5 
minutes.
    Mr. Cardenas. Thank you very much, Mr. Chairman. I would 
like to thank the witnesses for joining us and providing your 
expertise on these important issues, and also providing that 
not only to us but to the American people who are watching.
    At the last hearing we had on transparency in this 
committee, I asked about the use of non-English languages in 
both the insurance and hospital transparency rules. I am 
concerned that these rules do not take into consideration 
constituencies like the majority of the constituents in my 
district that primarily speak Spanish as their first language.
    Mr. Adler, do you have any idea how many hospitals and 
insurers post information in Spanish and other non-English 
languages?
    And how can requiring a greater range of languages improve 
access to critical care and information?
    Mr. Adler. Sure, thank you for the question, Congressman 
Cardenas.
    So I don't know that I have a concrete answer to exactly 
what share of hospitals or insurers have posted this 
information in Spanish or other languages. Certainly, it is 
some. I have seen, you know, some of these tools on insurer 
websites, where you can access this information in Spanish.
    I think you are kind of really focused on the consumer-
facing tools here, right? These sort of data have kind of the 
researcher side for people like me, and then the--right? And 
then the sort of consumer-facing angle here.
    I do think, you know, especially on sort of the insurer-
facing tools that are under consideration by this subcommittee 
today, to sort of expand upon, it would be useful to require, 
right? I mean, it is a very common language in this country to 
speak Spanish. So I think it is important to require that, 
right, that these data are available both in English----
    Mr. Cardenas. Would providing this important information in 
multiple languages, would that help with healthcare, or would 
it be not important?
    Mr. Adler. I think it would help. I think transparency can 
help. Transparent data on prices, particularly for folks who 
are in their deductible, so they are kind of bearing the full 
cost of these services--we have evidence that, on net, it does 
seem to lead to sort of better shopping, at least for a subset 
of services here--you know, imaging, for instance--and that it 
can lead to lower prices.
    I don't think this is, like, changing the whole healthcare 
system here----
    Mr. Cardenas. Sure.
    Mr. Adler. But I think it is--you know, modest steps in the 
right direction are important here.
    Mr. Cardenas. I think it would be an added benefit to 
everyone and to healthcare overall. So thank you.
    And also, as it relates to access, I am worried about the 
impact of hospital consolidation on access to care in medically 
underserved communities. Mr. Cavanaugh, in your testimony you 
note that consolidation has accelerated, and smaller providers 
and safety net hospitals are among the most likely to need the 
resources that bigger systems can provide. So, Mr. Cavanaugh, 
can you describe the impact of these consolidations?
    And also, would you expect there to be implications for 
access quality and affordability for patients because of 
accelerated consolidation?
    Mr. Cavanaugh. Certainly. Thank you for that question. Yes. 
As I said, we work with independent practices in 45 States. And 
if a practice is independent today, it is fiercely independent. 
It has had multiple opportunities to sell to an insurer, to a 
hospital system. So we have seen the impact of 
anticompetitive--when the hospitals do consolidate, and if a 
practice stays outside of that consolidation, we have seen 
difficulties in remaining in the hospital's own self-insured 
network.
    So literally we have had hospital systems say to our 
practices, ``If you want to see our employees, you need to 
join--either you sell your practice or join our CIN.'' So I 
think that impacts access. Certainly, as we have all documented 
on the Medicare side and other places, the facility fees raise 
the costs. Anytime costs go up, you need to be concerned about 
access, particularly for lower-income communities.
    So I think those are all legitimate concerns that flow from 
consolidation.
    Mr. Cardenas. Thank you.
    Ms. Schuman, I want to talk about transparency and PBMs. 
How would requiring reporting of certain drug pricing 
information held by the PBMs benefit employers and plan 
sponsors who provide health insurance coverage?
    Ms. Schuman. Well, first of all, they need to know where 
the money is going. They need to understand what the true cost 
of drugs are. They need to understand where these different 
revenue streams are going. Are they flowing back to the plan 
sponsor to the employer to share those savings with employees?
    And the fact remains that, as I said before, they don't 
know what they don't know. So having this transparency is 
really foundational to restoring, I think, competition in--with 
respect to drug pricing and, ultimately, enabling employers to 
have the tools they need to better manage those costs.
    Mr. Cardenas. Can you give an example of what this 
committee can do to help with that transparency and pricing 
issue?
    Ms. Schuman. Well, the PBM transparency legislation, for 
one, is just so critical to these efforts, again, to enshrine 
in legislation so there is this certainty that employers have, 
that they know that they are going to be able to have access to 
this information, to be able to have----
    Mr. Cardenas. Thank you.
    Ms. Schuman [continuing]. The definitional specificity----
    Mr. Cardenas. Thank you.
    Ms. Schuman [continuing]. About what is going to be 
covered. So, yes, that is a very important piece of 
legislation.
    Mr. Cardenas. Thank you.
    I yield back, Mr. Chairman.
    Mr. Guthrie. Thank you. The gentleman yields back. The 
Chair recognizes Mr. Griffith for 5 minutes for questions.
    Mr. Griffith. Thank you very much, Mr. Chairman.
    Mr. Adler, site-neutral payments, the examples that you 
gave in your oral testimony, I think it all makes sense. If you 
are getting, you know, a shot, outpatient, it doesn't matter 
whether it is in the doctor's office or at the hospital or a 
facility owned by the hospital.
    But on Ms. Thompson's side of the ledger--and this is what 
we have to try to sort out--you have a patient who is in the 
hospital. It may be the same procedure or the same shot that 
could, if that patient were in better health, be done 
outpatient. But they are not outpatient, they are in the 
hospital.
    So I noticed that you talked about outpatient in your oral 
testimony. You said outpatient comparisons. Is that because you 
recognize that if the patient has other issues and is already 
in the hospital, there is going to be more cost with having 
round-the-clock care?
    Mr. Adler. Sure. So thank you for that question, 
Congressman Griffith.
    So certainly, for--once the patient is on an inpatient 
basis--for instance, this is actually not--this doesn't apply, 
so there is a whole different Medicare payment system for 
inpatient. For--you know, if this is a drug administration, you 
know, billing on the outpatient side, even on the hospital's 
campus, right, I think it is an important--the argument that 
the--Ms. Thompson was making here, right, is important for why 
we might not want to equalize payments for more complex 
surgeries, like a--for a complex surgery or an emergency room 
visit.
    But the services that we are talking about today, or that 
the subcommittee bills are focused on today, are very--we are 
talking about low-complexity services, where we have not seen--
the data shows there aren't--don't seem to be any cost 
differences between providing that service to a----
    Mr. Griffith. Right.
    Mr. Adler [continuing]. Between a sicker patient or a less 
sick patient.
    Mr. Griffith. My next set of questions will be both to you 
and to Mr. Cavanaugh. And I don't--I am uncomfortable with all 
the consolidations. I agree with that.
    On the other side of the coin, in my district, particularly 
in the historical coal fields of southwest Virginia, is one of 
the most economically stressed regions in the country. None of 
us like the fact that we no longer have any competition. But we 
had two hospital chains a number of years ago. They looked at 
it. One of them was looking for a partner from outside the area 
so they could keep competition going. We couldn't keep our 
hospitals open if we didn't do something. And the two chains in 
east Tennessee, in Mrs. Harshbarger's district and in my 
district, they merged to form one. Is it ideal? No.
    But can you each recognize that sometimes in particularly 
economically stressed areas we may need that consolidation? I 
know it is a completely different animal when large hospital 
chains are buying up doctors' practices, but this is a little 
bit different animal. If you could each speak to that.
    Mr. Adler. Yes, I will jump in quickly. So, yes, I mean, I 
think fundamentally you are correct, that this is--I think you 
do need to think about it differently when you are talking 
about an area with lower population, and, you know, especially 
lower population and lower-income folks there, where there are 
inevitably going to be some rural areas in America that can 
just only really support one hospital.
    I want to say what I am sort of focusing on here is the 
sort of, you know, where a lot of people live, but in the 
bigger urban markets or suburban markets, where I think that 
competition----
    Mr. Griffith. And because I have time limitations, would 
that pretty much be your answer, as well, Mr. Cavanaugh, or do 
you have a different twist?
    Mr. Connell. Similar, except I would say, yes, rural 
hospitals, safety net hospitals--certainly don't want to hurt 
them financially. So if you wanted to do site neutral and then 
funnel some of that money back to those facilities through some 
other mechanism that doesn't incentivize consolidation, I think 
that would be fine.
    Mr. Griffith. All right. I appreciate that.
    PBMs, a lot of attention here today on that. My experience 
talking with constituents is there are occasions, Mr. Adler, 
where the PBMs, for whatever reasons, actually end up--if you 
use your insurance, which buys through the PBM, you are paying 
more than you would have paid if you just paid cash. Is that 
still the case?
    Mr. Adler. Yes, that is--in certain circumstances, yes.
    Mr. Griffith. Ms. Bass, how can that possibly be? I mean, 
if you all are looking out for the consumers, and you keep 
talking about how you are trying to save money, how can it 
possibly be that the consumer has to pay more if they use an 
insurance company that uses one of your affiliates, one of your 
corporate PBMs?
    Ms. Bass. Thank you for the question, Congressman. That is 
an unusual situation. Our companies are cognizant of it. Some 
of it has to do with the benefit design chosen by the 
employers. And as we have learned more about that, our 
companies have developed programs to address it.
    Mr. Griffith. So you wouldn't oppose our bill that says we 
are not going to let that happen anymore. I have got to move 
on.
    Ms. Schuman, you raised an issue on transparency earlier, 
and I do support transparency. And if you were--not that you 
had to, but if you were listening to my testimony earlier--or 
my questioning earlier when the witness was in front of us, I 
talked about a disrupter.
    This company allows you to get whatever drugs approved by 
the FDA, but you, based on transparency, can find where you can 
get it the cheapest. And if you get it below the median price, 
you get to put that money on account or hit a button that says 
send me the check. Do you like that concept, at least in 
principle?
    Ms. Schuman. Well, what I like the concept of is making 
sure you know that you are paying for value. And that is, 
ultimately, what we are talking about. And that is ultimately 
why transparency is so important to make sure employers and 
also patients and consumers are paying for value. And without 
transparency, they don't know that.
    Mr. Griffith. I appreciate it. My time is up.
    I yield back.
    Mr. Guthrie. Thank you. The gentleman yields back. The 
Chair now recognizes Ms. Blunt Rochester for 5 minutes for 
questions.
    Ms. Blunt Rochester. Thank you, Mr. Chairman, and thank you 
to our witnesses for being here today.
    I am pleased that we are holding this hearing so we can 
better understand how transparency can lead to lower cost for 
patients, particularly with respect to drug prices. And I would 
like to discuss the role of pharmacy benefit managers and the 
role that they play in the drug supply chain.
    We know that PBMs play a dual role in managing negotiations 
with pharmaceutical manufacturers to determine the price a plan 
will pay for drugs on their formulary, while at the same time 
working with insurance plans to determine how drugs for their 
enrollees will be covered.
    PBMs also manage relationships with pharmacies. My 
understanding is that many of these arrangements are opaque and 
hard to decipher, not only for patients but also for plan 
sponsors and other participants in the drug supply chain.
    Mr. Adler, can you clearly explain the role PBMs play in 
the drug supply chain and why the practices utilized by PBMs 
often lack transparency?
    Mr. Adler. Sure, thank you for the question. So, I mean, I 
think you described the sort of role well of PBMs, right? The--
fundamentally, the PBM's role is to negotiate lower drug prices 
on behalf of purchasers. And, certainly--right--and plans 
wouldn't hire them if they weren't getting them lower prices, 
right? I think that part is fundamental.
    Why there is a lack of transparency, fundamentally, because 
it is not in their competitive interest to have that data be 
transparent. They think it is in their--each PBM thinks it is 
in their interest to have that data be secret. And that is sort 
of why I think, you know, employers, for instance, very much 
want to see that data, and I think, from my researcher-biased 
perspective, I think I would very much like to see that data.
    Ms. Blunt Rochester. I think--you go right into my next 
question, which is do PBMs take advantage of misaligned 
incentives that allow them to retain profit instead of 
effectively lowering prices for patients at the pharmacy 
counter?
    Mr. Adler. Sure. So to some degree. But I do want to--
right--I think it is still worth noting that PBMs are 
generating lower costs than--and drug prices than they would be 
without them.
    But yes, I mean, I--to me, sort of the core issue in the 
PBM industry is just high levels of consolidation. There are 
three PBMs that dominate the market, and other insurers have to 
contract with those PBMs, for instance. Some of them have their 
own PBMs but often still have to use them. And I think one of 
the fears, from a sort of antitrust perspective here, is that 
those big PBMs might not give as good deals to the other 
insurers, and sort of entrench their market position there.
    Ms. Blunt Rochester. And I think this also goes without 
saying, because we have talked a lot about transparency, but do 
you believe increasing transparency related to PBM practices 
will provide plan sponsors with better tools to leverage power 
prices for--lower prices for patients?
    Mr. Adler. Sure. So on the margin, yes. So I do think, 
again, this is up--I agree with the Congressional Budget Office 
here, who has made this sort of point here, that there are some 
subset of purchasers here where having this information 
probably gives them information to lower prices. I don't know 
how long-term of a thing that is going to be, because there 
will be sort of--these are private actors, and they will try to 
renegotiate contracts and stuff like that. But there is always 
a little bit of a game of Whac-a-mole. But I do think there are 
benefits.
    Ms. Blunt Rochester. And my last question to you is how 
might comprehensive pharmacy DIR fee reform or clawbacks be an 
important element of the strategy to manage the rising drug 
costs for Americans?
    Mr. Adler. I think it could help. I mean, I will just sort 
of turn to--I think, when you are talking about drug prices, 
you know, the bigger picture issues are, you know, competition 
in the drug industry on the pharmaceutical, you know, 
manufacturer side of things, or price regulation in the form 
of, you know, provisions like in the Inflation Reduction Act.
    Ms. Blunt Rochester. OK. Thank you, Mr. Adler. I agree that 
increasing transparency is also an important tool to rein in 
PBM practices and reduce costs. And while these are important 
first steps, much more work, as you have said, will need to be 
done to address the role of PBMs in increasing patient out-of-
pocket costs. I am really pleased to be working with my 
colleague Congressman Buddy Carter on additional reforms, and I 
look forward to more discussions about PBMs, DIR fees, and 
insurance plan practices that keep patient costs from going 
higher and that really deal with making sure that the quality 
of care, the value of the care is what is our priority.
    Thank you, and I yield back.
    Mr. Guthrie. Thank you. The gentlelady yields back. The 
Chair now recognizes Mr. Latta of Ohio for 5 minutes for 
questions.
    Mr. Latta. Well, thanks, Mr. Chairman, and also thanks to 
our panel.
    Ms. Thompson, if I could start my questions with you. 
Currently over 62 percent of hospitals in the State of Ohio are 
operating in a loss, resulting in cuts to services within 
maternity wards and behavioral health clinics. And in my 
district, the 5th, which has many rural areas, tight budgets, 
staff burnout, and overregulation are often cited as the main 
contributing factors for reduction in care and facility 
closures. For example, over 50 percent of doctors and nurses 
say they spend more time in front of a screen fulfilling 
compliance requirements than they do treating patients.
    Would you discuss in detail any regulatory barriers or 
requirements that are hindering the workforce and provision of 
care?
    And what ideas would you have to fix it? Because I--the 
question I ask them every time I met one of our facilities in 
my district, because I look around and I go, you know, who is 
practicing medicine sometimes? But----
    Ms. Thompson. Thank you for that question. There are a 
number of regulatory burdens that are facing our hospitals and, 
really, our caregivers in those hospitals today.
    I think one of the biggest areas is prior authorization 
delays and denials, where physicians and others are spending 
more time on the phone, trying to get their patients into a new 
setting of care. You might be aware that it has been very 
difficult over the past year-plus for hospitals to discharge 
patients to the next level of care, whether that is a postacute 
care setting or whether it is a skilled nursing facility, 
mainly because it is hard to get patients out of the hospital 
due to workforce issues in other places, but also because of 
these delays and denials in care. So I think that one of the 
biggest areas where we might be able to find savings is there.
    And there's also just a lot of administrative expenses that 
I think can be streamlined and processed, so that we can both 
save some money in the system, make it more efficient, and then 
also to free up time for our clinicians so that they can see 
their patients.
    Mr. Latta. And just out of curiosity, a followup on that, 
because when, you know, you are on the phone and you are trying 
to get some procedure done, how often is it then that it 
finally does come through, they say, ``OK, you can go ahead and 
do it, you can get that procedure''?
    Ms. Thompson. You know, that is interesting. I don't have 
the exact statistic for you, but I do know that a lot of 
payment denials are overturned after--let me see, the OIG 
report, I think, said that there were 13 percent of payment 
denials or prior authorization denials, and maybe 18 percent of 
payment denials that were overturned because they actually 
adhered to Medicare fee-for-service requirements. So MA plans 
were putting on greater restrictions under fee-for-service.
    But how many times or how long it takes for those denials 
to get overturned, I don't even know. But it is an interesting 
statistic that we can try to find for you.
    Mr. Latta. Well, thank you very much.
    Ms. Schuman, you mentioned in your testimony that the 
national healthcare costs are expected to grow at an annual 
rate of 5.1 percent from 2021 to 2030. You know, in your 
opinion, how can Congress get more employers involved so that 
the burden of covering this increase does not fall on the 
Federal Government?
    Ms. Schuman. Yes, so absolutely. I mean, employers are, you 
know, as I said, deeply concerned about rising healthcare 
costs. And I think that is what is so critical for employers 
who ultimately are looking at ways to offer higher-quality, 
more affordable care to their employees about addressing the 
root causes of rising healthcare costs.
    And again, that is why the proposals that we are talking 
about today around transparency and competition are really 
handing tools to employers to be able to deliver higher-
quality, more equitable care to their employees. And I think, 
really, you know, taking aim at those payment policies, even 
in, you know, the Medicare space that really drive the broader 
market and broader distortions, and certainly Medicare payment 
policies that drive more consolidations impact not just 
Medicare patients but all patients.
    Mr. Latta. Well, you know, from the--from what you have 
heard here today, you know, are there any other proposals that 
you would have that might not be on the table today that would 
help?
    Ms. Schuman. Absolutely. I think just following up on the 
vein of really taking aim at some of these anticompetitive 
contracting clauses, for example, and I think that is something 
that Mr. Cavanaugh mentioned. What are hospitals able to do? 
Why are they taking advantage of this monopoly power? It is 
simple market dynamics. When you are a larger hospital system, 
you bought up the competitors, you bought up the rivals, you 
have more leverage, and you can charge higher prices.
    And you can also, with that leverage, enter into contracts 
with plans, with health plans that restrict their ability to 
try to promote higher-value care, to direct through plan 
design, to incentivize their employees to go to a different 
hospital, to a different practice that maybe is less expensive 
and higher quality.
    So I think, also, proposals that take aim at those 
anticompetitive contracting clauses that tie the hands of 
employers from pursuing these value-based designs is also 
really critical.
    Mr. Latta. Well, thank you very much.
    And Mr. Chair, my time is expired, and I yield back.
    Mr. Guthrie. Thank you. The gentleman yields back. The 
Chair just wants to make everybody aware there is a vote on the 
floor. So we are probably going to see where we can go, but 
probably get at least one more question in, and then we have to 
break and come back afterwards.
    So the Chair now recognizes the Chair of the full 
committee, Chair Rodgers, for 5 minutes.
    Mrs. Rodgers. Thank you, Mr. Chairman. I too have concerns 
about prior authorization and denials within Medicare. I just 
want everyone to be aware there is a bill in this package--it 
is one that I am leading--that would address the vertical 
integration and transparency.
    So we have heard in our previous hearings from experts, 
patients, and employers about how transparent prices can lower 
healthcare costs. And this morning Administrator Brooks-LaSure 
reaffirmed this administration's belief in price transparency. 
I wanted to ask each one of you, yes or no, do you believe that 
price transparency will put downward pressure on costs?
    Ms. Thompson. Yes.
    Ms. Bass. Price transparency that doesn't expose 
competitive data to competitors PBMs support.
    Mrs. Rodgers. Thank you.
    Mr. Connell. Yes.
    Mr. Cavanaugh. Yes.
    Ms. Schuman. Yes.
    Mr. Adler. Yes.
    Mrs. Rodgers. Thank you.
    Just as a followup, then, Ms. Bass, the overwhelming 
opinion from experts, including CBO, is that price transparency 
lowers cost. In virtually every other part of our economy, 
consumers know the price they pay. So just--I would like to 
hear some more about why you think PBMs should be treated 
specially and not required to be transparent.
    Ms. Bass. Thank you for that question. PBMs fully agree 
that data that will help lead to lower costs--that people can 
actually use to lower costs--should be transparent. We have no 
disagreement about that.
    But where we have a slight quibble is, for example, in 
Federal bidding for contracts, you don't have those bidders bid 
openly so that every competitor knows what the competitor's 
best price is. You don't do that. You make those sealed bids so 
that people will be incented to bid as low as possible to get 
the business. That is the kind of thing that we are concerned 
about. We think that if every drug manufacturer knew what the 
other's best deal was, they wouldn't be as willing to go as 
deep as they are currently going. That is the one quibble we 
have.
    Beyond that, we--our companies make tools available so 
that, at the prescribing point of prescription, doctors can 
just know what the cost sharing is going to be for a given 
patient, and that the patients know what is going to be on 
their formulary. Our companies are very transparent in their 
contracts with employers, and respond to employers' requests 
for information, and put that in contracts.
    So we respectfully think that, just with respect to 
competitors knowing what their competition's best bid is, that 
would be the problem.
    Mrs. Rodgers. OK, I appreciate that. Would--could you cite 
specific examples where price transparency has resulted in 
increased prices, cost?
    Ms. Bass. There have been cases in the past--there is a 
concrete case, and we have promised to get that information to 
your staff. The Justice Department, in a recent case, went 
through why it thought it was a bad idea to put competitors' 
information out. The FTC in the past has said that putting out 
competitors' information leads to tacit collusion. We strongly 
believe that this is basic economic theory and that when 
competitors know each other's data, prices go up.
    Mrs. Rodgers. Well, I understand that we have heard this 
before, that we have cited this concrete case. I will just say 
that this is based upon a study of Danish concrete in the 1990s 
that CBO's own words said ``was based on a small sample of 
plants over a short period,'' and how that is comparable to 
2023 American healthcare system I am not sure really applies, 
and I just encourage all of the stakeholders to bring 
constructive feedback to these proposals.
    Simply saying no to price transparency is unacceptable. And 
I think what you are hearing today is that both Republicans and 
Democrats are--believe that this is fundamental, that we must 
address the price transparency, and just--we are anxious to get 
your feedback and want to have future engagements that reflect 
that.
    Mr. Connell, the Leukemia & Lymphoma Society advocates on 
behalf of over 1.5 million Americans living with or in 
remission from blood cancers. Between 2015 and 2019, 
chemotherapy in free-standing provider offices fell by 5.4 
percent, while the volume of chemotherapy delivered for 
outpatients increased by 27.8 percent.
    What do seniors pay if they get chemotherapy in a 
provider's office, compared to a hospital outpatient setting?
    Mr. Connell. Significantly more is the short answer. It 
depends on the drug. But provider--or patients who are going to 
get their chemo at an outpatient facility, whether that is 
attached to a hospital or off campus, are paying significantly 
more than they would pay in out-of-pocket costs, which are 
astronomical, I will say, at the baseline.
    So when you start to multiply those, it gets really, really 
burdensome for patients, and it pays a lot more if you are at a 
hospital setting than if you are at the physician office----
    Mrs. Rodgers. So are there any reasons they should get the 
chemotherapy in a hospital outpatient setting?
    Mr. Connell. You know, there is--every clinical case is 
different. There are some patients who do need to get their 
care closer to a hospital, but there is no need at the baseline 
to say that a patient with the same risk score should be 
getting the same drug at a different price at a different 
setting.
    Mrs. Rodgers. OK. Thank you very much.
    Thank you, Mr. Chairman. I yield back.
    Mr. Guthrie. Thank you. The Chair yields back. We do have 
two more that are present we just sent to vote, so they showed 
up to do their questions, so we are going to have to adjourn 
and come back.
    However, we are going to do one more question. You have one 
on your side, and then we will return after votes. So we have a 
vice chair of the committee, Dr. Bucshon, 5 minutes.
    Mr. Bucshon. Thank you, Mr. Chairman. I thank the witnesses 
and everyone in the audience and everyone watching.
    You know, the ground has shifted on a lot of these issues, 
and I would encourage all the witnesses to recognize the 
shifting of the ground in a bipartisan way. I have been working 
on some of these issues for the 12 years I have been in 
Congress, talking to stakeholders, trying to find common 
ground. And by some of the testimony here today, it is pretty 
clear that that is not going to be possible, maybe, and that 
disappoints me.
    But I want to emphasize the resolve of Congress to address 
these issues on behalf of the people we represent. We are 
being--we are--every day, when I am in Indiana, people are 
demanding that we address these issues. And that is where this 
is coming from. And it is going to happen.
    Ms. Thompson, everybody here supports hospitals, but the 
fact of the matter is hospital expenses from 2019 to 2022 
increased by less than overall inflation. So did they go up? 
Yes, but inflation was higher overall. And the labor cost 
surges that many hospitals were experiencing during COVID, 
those were real. Every hospital had to have traveling nurses. 
Things like that are beginning to subside, and contract labor 
costs were down 20 percent year over year, in one recent report 
from HCA.
    In 2021, operating margins went up to a record high, 
despite COVID relief going down. And that is according to 
MedPAC. It is not my opinion.
    And in 2022, many hospitals said they have lost money, 
but--and that is probably true for the rural hospitals, and 
some that I represent, but the reality is there are serious 
questions in the larger hospitals. In fact, one study which has 
already been quoted a couple of times today of the--of 10 large 
nonprofits found that 85 percent of the losses were isolated to 
the hospitals' investment portfolios, and actual patient 
revenues year over year were slightly positive.
    Of course, the S&P 500 grew by nearly 90 percent from 2019 
to 2021. So yes, in 2022 we all lost money in the market, 
including hospitals.
    So I guess my question is, are nonprofit hospitals able to 
cover their investment losses with the gain, the market gains, 
they achieved prior to the market softening?
    I mean, what is the balance, what is on their balance 
sheet?
    Ms. Thompson. Well, thank you, Congressman Bucshon, for 
that question, and thank you for sponsoring the SAVE Act to 
protect our healthcare workers.
    Mr. Bucshon. You are welcome.
    Ms. Thompson. We appreciate that.
    Hospitals don't rely on--well, let me take that back. 
Because investments change every year, plus or minus, we really 
look at our patient care margins. And yes, MedPAC found a 
positive patient care margin. But when MedPAC looked at 
Medicare margins, they were down at negative 8-something 
percent in 2021, moving to negative 10 percent in 2023.
    So right now, Medicare is not covering the cost of its 
care. Because of that, it is important for hospitals to have 
financial reserves to cover such things like----
    Mr. Bucshon. OK, fair enough.
    Ms. Thompson [continuing]. A once-a-year pandemic.
    Mr. Bucshon. Fair enough. I have got other things.
    So, I mean, I just want to say Federal Government shouldn't 
be subsidizing losses in the stock market to some of the 
largest health systems in the country. And that is where 
transparency comes in. Honestly, I didn't even know myself the 
extent of the investment portfolios of some of the largest 
health systems in the country. It is in the billions and 
billions of dollars, as they come out and tell the public they 
are losing money. That is just not right. I mean, OK, you could 
be losing money on the patient volume, I understand, and on 
Medicare. But overall, I mean, come on.
    I mean--and so my goal is to reduce the--honestly, overall, 
it is to reduce incentives for hospitals to monopolize 
healthcare markets, which can increase costs for everyone. And 
I feel strongly about this because in 2005 my medical practice, 
in which I was a partner, was purchased by a hospital system in 
Evansville, Indiana, Ascension Hospital. And that was based 
essentially on neutral site building. It was based on the fact 
that we--the reimbursement had gone to where we couldn't 
recruit doctors, we just couldn't afford it because we were 
getting paid a third of what the hospital three blocks away 
would be for the same tests. The hospitals acquired the primary 
care doctors, forced them to send their ancillary services to 
the hospital. So not only were we getting paid less, but we 
didn't have the patients.
    So, I mean, I have been involved in this for 25 years, and 
the argument from the hospitals about their cost of care is 
totally valid. And I think I have told you that, some of the 
cases you make about complexity of care, and I am empathetic.
    But please, again, everybody, including the PBMs, work with 
this committee to find commonsense solutions to prevent 
consolidation and get the cost down. That is what I am asking.
    I yield back.
    Mr. Guthrie. Thank you. The gentleman yields back, so the 
committee will stand at recess and just be close by. And all 
you people here, that--if you haven't testified before, you 
know where to be, but just be close by. And as soon as the 
third--we have three votes, and as soon as the third vote is 
conducted, we will----
    Mr. Bucshon. Mr. Chairman?
    Mr. Guthrie [continuing]. Come straight back.
    Mr. Bucshon. Can I submit two things for the record real 
quickly, prior to the recess?
    Mr. Guthrie. Any objection to his submission to the record?
    Mr. Bucshon. One is a letter that Mr. Adler actually signed 
on to regarding reforms in neutral site billing, and one is a 
hot-off-the-presses article about how health system Kaiser 
Permanente is to combine with hospital operator Geisinger, and 
Kaiser is creating a new subsidiary called Risant Health, and 
their aim is to acquire four or five more hospital systems 
across the country, further evidence of consolidation.
    Mr. Guthrie. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Guthrie. So the committee will stand at recess until 
the call of the Chair following the third vote.
    [Recess.]
    Mr. Bucshon [presiding]. The committee will come to order.
    I now recognize the gentleman from Ohio for 5 minutes for 
his questioning.
    Mr. Johnson. Well, thank you, Mr. Chairman, and thank you 
to our panelists for being here this afternoon for this very 
important hearing.
    As this subcommittee looks at a number of proposed pieces 
of legislation to address staggering healthcare costs Americans 
face every day, it is crucially important to hear from all ends 
of the spectrum, from patients to hospitals. So thank you all, 
all of you witnesses here today, for engaging in this 
conversation.
    Like many of my colleagues, I am a believer in the power of 
the free market. Business will flow to quality and 
availability, and supply will dictate the demand when you have 
those. But for that to happen, all involved must have access to 
the necessary information to make informed decisions. Consumers 
must be able to know that they are buying--what they are 
buying, and patients must be able to know what the cost of care 
is to make those informed decisions.
    Now, I have heard from many in the healthcare space that 
the cost of implementing and complying with some of the 
proposed transparency legislation at issue today, legislation I 
believe is critically important, is too much of a burden. So my 
first question to Ashley Thompson--I don't--my glasses--there 
you are, way down at the end. Thank you, Ashley. Could you 
explain the impact of reporting requirements for hospitals, 
particularly those hospitals participating in the 340B program?
    Ms. Thompson. Yes, thank you for that question. The 340B 
program is of immense value to the patients and the communities 
we serve. And right now, hospitals are reporting--were 
reporting to CMS on the Medicare cost report, were reporting to 
the IRS on schedule H, and were reporting to HRSA right now, 
who audits the program and annually recertifies the ability for 
hospitals to participate. So there's a number of reporting 
requirements going on today.
    I understand that the bill that is before this committee 
would have additional reporting requirements, and I think that 
we would welcome the opportunity to discuss them. I think that 
they are metrics that are being gathered, that we have some 
concerns that they might not show the true value of the 
program. So collecting the metrics, you might not, for example, 
understand that hospitals are using the program to purchase or 
to hire----
    Mr. Johnson. Right.
    Ms. Thompson [continuing]. Two new behavioral health nurses 
for a clinic.
    Mr. Johnson. Right. Well, you know, I am a big fan of 340B. 
It is something I constantly hear about when I am talking to 
hospitals in my district. It is a very rural district. It is a 
lifeline to them. My district, like many other rural areas, 
relies on the 340B program to help healthcare--to make 
healthcare more affordable for patients. So I want the program 
to succeed in the long term, but I am getting increasingly 
concerned that some nonprofit 340B hospitals are abusing the 
program rules to actually deprive patients of the types of 
support that 340B was intended to provide.
    For example, many of our largest hospital systems, 
beneficiaries of the 340B program, complain about the cost of 
price transparency compliance, yet they have signed an HHS 
Health Sector Climate Pledge to, among other things, designate 
an executive-level lead for their work on reducing emissions by 
2023 and conduct an inventory of scope 3 emissions by the end 
of next year. Now, I am not sure how this relates to delivering 
affordable, quality healthcare, but it sounds awfully expensive 
to me.
    Mr. Chair, I ask to consent to put into the record the HHS 
list of hospitals that have signed that pledge.
    Mr. Bucshon. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Johnson. So, Ms. Thompson, back to you again. I find it 
hard to believe that some hospitals complain that they are 
unable to shoulder the burden of transparency--they say it 
costs too much--yet they can afford the not-so-little cost of 
climate-resilient infrastructure. Are hospitals taking 
advantage of the 340B program and, rather than ensuring the 
savings are being passed onto patients, are instead using these 
savings to further their liberal ESG agenda?
    Ms. Thompson. No, the hospitals that are participating in 
340B use those savings in a number of ways for their 
communities, whether it is to provide free and discounted drugs 
to those in need, whether it is mobile----
    Mr. Johnson. Well, that is what they are supposed to use 
them for. But how can they say that the cost of price 
transparency is too expensive when they are spending money--and 
they are a 340B hospital, they get money through the 340B 
program--price transparency is too expensive, but they have got 
the money to spend on ESG and climate change. Can you help me 
deconflict that?
    Ms. Thompson. I know that our hospitals are very supportive 
of price transparency. And as you heard earlier this morning, 
we are at 70 percent compliance with the rule. I know that 
those hospitals that are having the most problem with----
    Mr. Johnson. Well, compliant with the rule, but a lot of 
those hospitals are putting ``N/A'' and blanks and spaces in 
the data rather than putting the actual price. And we see 
that--we can see that because we are getting the prices from 
the insurance companies. So though we know that they have got 
the prices, they are just not putting them in the database.
    So I am just not sure there is not abuse here, Mr. 
Chairman. I yield back.
    Mr. Bucshon. The gentleman yields back. I now recognize Dr. 
Schrier for 5 minutes.
    Ms. Schrier. Thank you, Mr. Chairman, and thank you to all 
of the witnesses for coming today for this discussion about how 
we can increase transparency and lower costs and foster more 
competition and improve care for patients.
    Mr. Cavanaugh, I am going to start, and then my first 
question will be directed to you. I just wanted to talk a 
little bit about innovation and competition and creative ideas 
that we are getting ideas about all around the country on how 
to improve care and decrease cost, because our country spends a 
tremendous amount of money on healthcare with lackluster 
outcomes.
    I am a big supporter of the Innovation Center and CMS, 
CMMI, and there are lots of pilot projects out there. Not every 
model deployed is successful, but they are taking a stab at it. 
And so much work has gone on at the State level and State 
Medicare and Medicaid systems, thanks to flexibility for States 
to partner with local entities and just try out new ideas and 
see what works.
    Direct primary care is one example of that, and employers 
around the country are reporting up to 20 percent savings on 
the total cost of care for their employees by providing better 
healthcare up front, sort of loading more on the primary care 
provider in that setting, reducing unnecessary ER visits, 
hospital visits, specialty care, and drastically reducing 
expenses. So I am excited to be working with my colleague Dan 
Crenshaw on this--these efforts.
    Of course, direct primary care can also incentivize worse 
outcomes, right? It could discourage patients from coming in. 
It could mean that expensive tests just don't happen. And so it 
is really important to track outcomes. And what I haven't 
really seen is a larger effort to track what works and what 
doesn't, and where the successes are and what we should roll 
out in other States and around the country.
    And so I was just wondering, Mr. Cavanaugh, what has your 
experience been, even particularly with direct primary care, 
and what can Congress and industry do together to improve this 
work being done and roll it out elsewhere?
    Mr. Cavanaugh. Sure. Thank you for that question. Alidade 
practices are not direct primary care practices in the way that 
you mean, but there are some analogies, which is we are--our 
practices are going to Medicare, to Medicare Advantage plans, 
to Blue Cross plans, to--even to Medicaid plans and saying we 
will accept accountability for the total cost of care for your 
line beneficiaries.
    And importantly, and this is--gets to your question about 
skimping on care--also taking accountability for the quality of 
care that is delivered and the access, because you are--there's 
two ways to save money, a bad way and the right way, which is 
focusing on prevention, wellness, transitions. And that is 
what, I think, actually has been proven over and over again 
through the Medicare Shared Savings Program.
    There have been not just--Alidade is probably the biggest, 
but there are other organizations that have used this primary 
care approach, held accountable by Medicare and others on the 
quality measures, and been very successful in reducing costs. 
That is one of the reasons I am here today, which is we can't 
get everybody to do this because, if systems consolidate, there 
is no impetus for them to do this, right? If they are going to 
be able to consolidate and negotiate higher fee-for-service 
rates, why do the hard work of learning population health, 
preventive care? And trust me, it is hard work, and it is 
different from the way the health system was oriented in the 
past.
    So I would love to look at the bill you are developing. We 
are not a primary care--excuse me, we are not direct primary 
care. But I do see analogies of focusing on better care at 
lower cost through, primarily, primary care.
    Ms. Schrier. Thank you for mentioning consolidation, 
because that is another one of my concerns, and I am hearing a 
lot of echoes of that today with my colleagues.
    And you are right. When employers have a choice in who to 
contract with, their health insurance companies, they are 
looking at who can give the best bang for the buck, the best 
care. And when there is consolidation, there is no competition, 
prices go up, and care potentially can go down because there is 
no competition.
    Thank you, and I will--unless anybody else has a comment on 
direct primary care.
    Ms. Schuman. I just wanted to weigh in from the employer 
perspective, because you mentioned employers and really looking 
to get the best bang for their buck for their employees. And 
that means cost, and it means quality.
    And employers are really incubators of innovation, and have 
really looked to models like primary care as ways to drive a 
healthier workforce later on and saving healthcare costs later 
on. So we would love to just follow up with you on your 
efforts. Thank you.
    Ms. Schrier. Thank you. Perfect timing. I yield back.
    Mr. Bucshon. The gentlelady yields back. I now recognize 
the gentleman from Florida, Mr. Bilirakis, for 5 minutes.
    Mr. Bilirakis. Thank you, Doctor, I appreciate it.
    Mr. Cavanaugh, the Providers and Payers Compete Act draft 
would ensure HHS is taking into account the effect of 
regulatory changes to Medicare payment systems on provider and 
payer consolidation, both horizontally and vertically. I have 
been an advocate of ensuring that policies within the Medicare 
physician fee schedule, for example, work best for patients 
access--patient access and don't adversely cause local 
providers to close their doors and join a larger health system.
    You say in your testimony that both types of consolidation 
have led to higher prices for patients. Can you provide insight 
into this trend and perspective on whether HHS should be taking 
these considerations into account as it conducts annual payment 
rulemaking under Medicare?
    Mr. Cavanaugh. Certainly anything that gets policymakers to 
think longer and harder about whether public policy is 
contributing to consolidation is something that deserves 
support.
    I would just say, in the meantime, we know there are 
specific--rather than--I mean, in addition to focusing on 
future policies, we should look at existing policies that we 
know are part of the problem.
    This committee, to its credit, has site-neutral bills 
before it. I would encourage you to look there. But I agree 
that, if there's ways to get policymakers--and I was formerly 
one myself--to focus more on this--because I do think it is the 
major challenge before us in getting our health system to pivot 
to one that is focused on value and not just focused on price 
and consolidation.
    Mr. Bilirakis. Very good, thank you. As cochair of the 
Congressional Rare Disease Caucus, I know the challenges that 
rare disease patients face in terms of getting treatments to 
market in the first place.
    Despite the FDA regulatory challenges, we have seen some 
incredible advances in cell and gene therapies. Yet even after 
approval, unfortunately, the current pricing structure in place 
causes additional barriers, unfortunately, to access for these 
patients. That is why I am grateful for Chairman Guthrie's 
bill, the Medicaid VBPs for Patients, or the MVP Act, is on the 
docket.
    So, Mr. Connell, can you speak to the potential that 
reducing payment barriers can have, such as following for more 
value-based payment arrangements on blood cancer and other rare 
diseases?
    And how can we also ensure the innovation pipeline is 
strong to give hope to so many patients that currently don't 
have approved treatments or cures?
    If you could answer those questions, I would appreciate it. 
Elaborate, please.
    Mr. Connell. Yes, I appreciate that. You know, we--there is 
a truism that we get what we reward, and so we should be 
rewarding quality. We should be rewarding improved outcomes. We 
want patients to have better outcomes. That is what we should 
be paying for. So we want more value-based agreements.
    We want more ways that we can reimburse, whether it is to 
physicians or for drugs, in ways that actually do promote what 
we want, which is more investment in the type of innovation, 
the type of new therapies that are going to be really life-
changing for patients. Because you mentioned it is a challenge 
on the rare disease space, and blood cancers are largely rare 
diseases, a whole collection of them. Under the mantles of 
just, you know, three or four names are hundreds of diseases.
    And so the market is not there necessarily for any one 
disease in a way that really creates market problems now in 
terms of bringing products to patients. And so we see 
tremendous potential in trying to come up with value-based 
agreements that do reward that patient-centered innovation, 
that really make a difference for patients, and use that as a 
way forward to really get the type of drugs that are most 
valuable for cancer patients.
    Mr. Bilirakis. Thank you very much.
    And Mr. Chairman, I yield back the rest of my time.
    Mr. Bucshon. The gentleman yields back. I now yield to Dr. 
Joyce for 5 minutes.
    Mr. Joyce. Thank you for yielding, Dr. Bucshon. This 
hearing today is incredibly apropos because of the timing. I 
just received notification that Kaiser Permanente is acquiring 
Geisinger Health System in my home State of Pennsylvania.
    Let's start with addressing, first of all, though, H.R. 
977. We all know that our society is full of experts, each 
owning their own workplace. We know that lawyers own law firms. 
We know that auto mechanics own auto garages. We know that 
chefs own restaurants. Yet we stop doctors like myself from 
owning a hospital because they have earned a medical degree. I 
would like to add my voice to those who are supporting H.R. 
977, which would repeal this incredibly misguided restriction.
    One of the most disturbing trends that we see in healthcare 
that defies logic is the prices that insurers pay for medicines 
that have been broadly flat or declining. Yet patients continue 
to pay higher prices. In 2021 the net price for medicines, the 
price after all rebates are paid to PBMs, grew just 1 percent. 
Meanwhile, insurers and middlemen continue to increase their 
profits while pocketing the rebates and pocketing the discounts 
from patients.
    Mr. Connell, do you think it is fair that patients could 
pay more for their medicine than the insurer or the PBM paid? 
Does that not defeat the entire point of what insurance is for?
    Mr. Connell. I don't think it is fair. I think that we 
should try to make sure that patients pay the lowest amount 
possible, because we know that for every dollar you increase in 
someone's cost sharing, that patient is less likely to actually 
get the care that they need. And so we should be getting those 
copays as low as possible.
    Mr. Joyce. Thank you.
    Ms. Schuman, if prescription drug prices were more 
transparent, do you think that this would happen?
    Ms. Schuman. I think that prescription drug prices being 
more transparent is the only way for this to happen. It may not 
be the last step, but it has to be the first step.
    Mr. Joyce. And I agree that that first step must be taken, 
and I think that is one of the points of this hearing today.
    Currently, PBM compensation is, quote, ``linked'' to a 
percentage of the list price of a drug, which incentivizes 
higher list prices and more rebates that the insurers and PBMs 
pocket rather than passing it on to the patient.
    Do you believe, Ms. Schuman, that we should delink this 
compensation based on list price through the supply chain to 
encourage lower list price?
    Ms. Schuman. Well, I think we need to look at the entire 
ecosystem, the drug pricing ecosystem, and have more 
transparency throughout the entire drug pricing system.
    And why transparency is such a critical first step is you 
are able to see those links, you are able to see whether--what 
those incentives are, and what--and how that is really 
translating into, ultimately, lower costs for employers and, 
ultimately, employees too. So I think that is why I said 
transparency is, I think, the necessary first step, so 
employers have line of sight into whether or not they and their 
employees are actually benefiting from that.
    Mr. Joyce. And I agree, transparency is ultimately 
important, but the next step has to be de-linking the 
compensation based on the price list.
    On another subject, Mr. Connell, I understand that in 2022 
Medicare paid 141 percent more in a hospital outpatient setting 
than in a freestanding provider office for the first hour of 
chemotherapy infusion, including both the professional and the 
facility fees. Mr. Connell, what does this 141 percent premium 
for the hospital setting mean for cancer patients and the costs 
that they face at this incredibly important time of their 
lives?
    Mr. Connell. Yes, it means that they pay more. Right now, 
patients pay, essentially, 20 percent in Medicare Part B of 
whatever the cost, the underlying cost, of the service is. And 
so, if you have that higher underlying cost--so if you have 
that markup that happens when someone is getting that chemo at 
the hospital setting--then you have a patient who is paying 
more because they are paying a higher amount from their 20 
percent.
    And there are some ways to help patients deal with that. 
Medigap is one, but if you are a blood cancer patient you can't 
get a Medigap plan. If you get diagnosed, they will not sell 
you a Medigap plan. And so there are patients who are paying 
that full 20 percent, and they really feel it when the cost 
goes up like it does if you go to a hospital----
    Mr. Joyce. It certainly seems unfair at such a critical 
stage of their lives, as they are battling for the life that 
they want to lead.
    Mr. Adler, according to MedPAC, in 2022 Medicare paid 105 
percent more in on-campus hospital outpatient departments than 
in freestanding offices for a midlevel office visit. Can you 
please elaborate on the economic incentives such a payment 
disparity creates for consolidation and the acquisition of 
physician practices?
    And do you feel that there is a way to move to site-neutral 
payments for these visits without risking patient outcomes?
    Mr. Adler. Sure. So I think that is very important to move 
in that direction, right?
    I think the financial incentive created by this market 
distortion that you are describing is very large. So for an 
independent physician in 2016, integrating with a hospital 
would have increased the total annual Medicare payments for 
their services by $141,000. This is, like, per year, per 
physician, that is how much money is on the table. And as Mr. 
Cavanaugh was saying earlier, right, this is just a very big 
incentive for hospitals to buy out practices and for physicians 
to go work for hospitals because they just have a lot more 
money to deal with for the exact same set of services.
    I think if--just moving to site-neutral payments, where we 
are focused here on lower complexity services, right--it is 
imaging, drug administration, office visits, as you were just 
describing--it is hard to imagine there would be any adverse 
effects on patients, and we have not seen that from the steps 
that Congress took in this direction in 2015.
    Mr. Joyce. My time has expired, but I want to reiterate 
from the onset that any action this committee takes must 
carefully balance maintaining access to care across all 
communities, especially in rural settings.
    Thank you, Mr. Chairman, and I yield.
    Mr. Bucshon. The gentleman yields back now. I now recognize 
Mrs. Harshbarger for 5 minutes for her questions.
    Mrs. Harshbarger. Thank you, Mr. Chairman.
    Thank you all for being here. You know, I am glad to be 
talking about transparency. And, you know, I looked up the 
definition of ``transparency,'' and it says it is the quality 
of being easy to see through. That makes no sense about 
healthcare.
    But Ms. Schuman, this week I introduced a bipartisan bill, 
along with colleagues Reps. Spanberger and Miller-Meeks and 
Krishnamoorthi, and it is called the PBM Sunshine and 
Accountability Act. And what this bill does, it requires public 
reporting of PBM financial information that the HHS Secretary--
he already gets that, and--under current law--but it will 
enhance the reporting to include other things like the rebates, 
the fees that PBMs and its financial affiliates receive from 
drug manufacturers and health insurers.
    Would it be helpful to employers if group health plans were 
able to view publicly reported data on PBM aggregate rebates, 
including those captured by GPOs, or Group Purchasing 
Organizations?
    Ms. Schuman. I do believe that it would indeed be helpful 
to employers if they were able to view this publicly reported 
data on PBM aggregate rebates, including those by these Group 
Purchasing Organizations. Only with more fulsome transparency 
around the extent of drug manufacturer rebates received by PBMs 
can employers begin to understand the value that PBMs are 
generating from administering their drug benefit for their 
employer-sponsored plan.
    And with this increased information, employers will be 
better positioned to negotiate for reduced administrative fees 
from their PBMs.
    Mrs. Harshbarger. Yes, especially self-funded employers.
    Would it be helpful for employers to know the highest and 
lowest retained rebate percentages across all contracts, so 
employees could see where they fall?
    Ms. Schuman. Yes, absolutely. That also would be very 
helpful information for employers. It will help employers 
understand where their contract falls relative to other 
employers and whether they may have an opportunity to negotiate 
for additional pass-through rebate revenue.
    So again, I think it is really important to have this 
information to help manage a plan's----
    Mrs. Harshbarger. Yes.
    Ms. Schuman [continuing]. Overall drug spend and also 
ensure that there is no overcompensation.
    Mrs. Harshbarger. You know, we have--the biggest employer 
in Tennessee is in the city I live in, and if I went to tell 
their benefits manager about the discrepancy in payment from 
specific PBMs they had contracted with, do you know it would 
negate my contract? I could not tell them, because that was a 
stranglehold on me, and I think that is unacceptable, to try to 
save somebody's money and they tell you you can't do it.
    Mr. Connell, in your view, does it make sense that, if 
hospitals have to post laboratory test prices, that retail labs 
should be required to as well?
    Mr. Connell. Yes, yes, it does make sense. I know patients 
like patients with blood cancer get a lot of lab tests, and 
they get very frustrated by the lack of transparency we see 
today.
    Mrs. Harshbarger. Yes, because they are totally different, 
aren't they?
    Mr. Connell. Yes.
    Mrs. Harshbarger. Do you think patients would be able to 
compare cash prices, or should be able to compare cash prices 
for tests at retail labs versus hospital labs?
    Mr. Connell. Yes.
    Mrs. Harshbarger. Do you think competition makes everything 
better, Mr. Connell?
    [Laughter.]
    Mr. Connell. I think so, yes.
    Mrs. Harshbarger. I believe so.
    Mr. Connell. I think so.
    Mrs. Harshbarger. I think I agree with you.
    You know, something interesting, I know that in the 
healthcare world NPIs--if you have two different offices, 
physicians are required to have two NPIs, just like pharmacies 
are. And I have been reading some things about, you know, when 
hospitals buy provider practices, and the same provider 
practices then change your billing methods, you know, generally 
to generate higher reimbursement for their services. These 
providers, when they are purchased by hospitals, they can use 
that hospital's NPI. And I don't think that is--you know, there 
has to be some kind of differentiation. And there were three 
things that, you know, we have researched that looks like may 
help with that.
    If you require--do you think that if these--and this goes 
to Mr. Adler--do you think that if these hospitals or these 
off-campus facilities were required to get a different NPI, 
that that would fix a lot of this issue?
    Mr. Adler. Sure. So I think in the commercial market, which 
is where this would be meaningful--so I think it would help. I 
don't think it fixes everything, but certainly you talk to 
insurers, and sometimes they will say, ``We have a contract 
with the hospital that says we do not pay more for an off-
campus outpatient department visit,'' for instance, but they 
literally cannot figure out whether it is an off-campus 
facility or an on-campus facility.
    Mrs. Harshbarger. I know. How can you, if you have got the 
same NPI?
    Mr. Adler. Yes, exactly. And it is hard to do that.
    I mean, I think the Medicare policy is still where more of 
the money is, but I do think that is an important step.
    Mrs. Harshbarger. And Mr. Connell, we had the CMS 
Administrator here earlier talking about how it was a Stark law 
violation if, like, for example, Tennessee Oncology mailed to 
their patients in rural areas if they were too sick to pick the 
drug up, or if they didn't have transportation because it was a 
couple of weeks ago, and they interpreted an FAQ to do that. 
What do you think about that?
    Mr. Connell. I think there are so many ways in which things 
like Stark--and we talked about Medicaid best price--things 
that do have an important role also have unintended 
consequences that definitely need to be addressed.
    Mrs. Harshbarger. I think it was pretty ludicrous, and even 
the HHS Secretary told us he would work with our committee to 
change that, and negate that particular FAQ.
    And I guess, with that, I have asked the important 
questions, and so, Mr. Chairman, I yield back.
    Mr. Bucshon. The gentlelady yields back. I recognize Dr. 
Miller-Meeks, 5 minutes.
    Mrs. Miller-Meeks. Thank you, Mr. Chair, and thank you to 
all of our witnesses that--who are here today, testifying.
    Mr. Adler and--or Mr. Loren Adler, excuse me, thank you for 
testifying before the committee. As you know, we are 
considering multiple site-neutral payment bills, and I 
understand that you have written about this topic before.
    And let me also state that I am a physician who has done 
both military medicine, private practice, academic medicine, 
and then been a hospital employee.
    You stated specifically that site-neutral payments should 
ultimately be applied to a much broader set of clinical 
services, and then in the 2014 MedPAC recommendations at both 
off-campus and on-campus HOPDs as well as ambulatory surgery 
centers.
    Furthermore, you stated that increased hospital ownership 
of physician practices can also drive up costs for private 
payers by increasing the prices they pay for physician services 
and the possible hospital services as well. Can you detail how 
not having site-neutral payments harms our healthcare system 
and how vertical integration leads to increased costs for 
patients?
    Mr. Adler. Sure, and thank you for the question, 
Congresswoman.
    So, yes, I mean, I think fundamentally, not having site-
neutral payments creates a very large financial incentive to 
go--for a doctor to go work for the hospital, or for the 
hospital to go out and buy up physician practices. And as you 
are saying, right, that has effects on commercial markets, as 
well, right?
    We have more and more evidence now that this vertical 
consolidation, when the hospital goes and buys up a bunch of 
physician practices, has--tends to increase costs. And some of 
that is--it is straight arbitrage, right? This is taking 
advantage of a Medicare policy where--said earlier, it is 
basically--it is $140,000 more per year per physician that you 
get if you do the same set of services in a hospital outpatient 
department rather than an independent office. That is 2016 
numbers, so probably multiply that by a bit to get to modern 
dollars.
    Mrs. Miller-Meeks. It was one of the things that myself and 
others talked about during the debates on the Affordable Care 
Act, and we were very concerned about that amount of 
consolidation. And in 2010 there were 50 percent of physician 
practices that were independent, and now there is 20 percent. 
So thank you.
    Mr. Connell, Congress has always tried to make healthcare 
more affordable for patients as well as more accessible. But 
health plans and PBMs continue to increase deductibles, use 
more coinsurance than copays, and are making patients pay based 
on the list price of medicine. With ever-increasing insurance 
costs, millions of hardworking Americans are having to choose 
between affording, you know, lifesaving medicines or putting 
food on the table for their families.
    On top of that, PBMs have adopted schemes like accumulators 
and maximizers that force patients to pay even more out of 
pocket for their drugs, while PBMs, which lack transparency, 
pocket the money for their own profits.
    As a State senator in 2019, I actually passed PBM 
transparency in the State of Iowa. I was not able to get the 
rebates through, but we are still working on getting that 
transparent data all this time later.
    I also worked in a bipartisan manner to introduce HELP 
Copays Act with my colleagues Representative Carter, DeGette, 
Clarke, and others. This is a bipartisan bill that would 
prevent PBMs from enacting these schemes, and I am disappointed 
that it is not included in the hearing today, but I think that 
it will in the near future.
    Do you agree that PBMs and insurers should let cost-sharing 
assistance count towards patients' out-of-pocket costs and 
deductibles?
    Mr. Connell. Yes, it is a great question, and you are 
dealing with an enormous challenge that is really, really 
important for patients.
    I mean, we see patients, you know, get caught in the middle 
of a fight between payers and manufacturers of drugs. And so 
you have, you know, high costs that are dealt with with high 
cost sharing, and then you have manufacturer assistance, which 
is certainly an imperfect solution but to a real problem. And 
then you have copay accumulators, copay maximizers, these 
solutions that have tried to again continue this fight that 
happens with, really, industries with patients caught in the 
middle.
    And so we have heard situations where you have patients who 
have been caught, where their assistance goes away as a result 
of this back and forth between industries. And that is an 
enormous problem for patients, because if they are left holding 
the bag, if they are left with $5,000, $6,000 of out-of-pocket 
costs, that is prohibitive for a lot of people in this country. 
A lot of people cannot afford even a cancer medication if it is 
going to come with a cost so high.
    And so we do have patients--we have data patients will walk 
away from the pharmacy counter. I think Mr. Carter mentioned 
this earlier in his experience, and many people in healthcare 
have the same experience of working with folks who have a 
treatment, the good--the bad news is you get a cancer 
diagnosis, the good news is maybe you have a treatment that 
they think will work. You go to the pharmacy counter. Right now 
we have data that shows that that cost is over $2,000. Then you 
have 40 percent of patients walking away from the counter 
without that therapy.
    Mrs. Miller-Meeks. Thank you.
    And Mr. Loren Adler, does the current system ever expose 
patients to a situation where they might pay more than the net 
price of the drug?
    Mr. Adler. Sure. So there are certainly situations where 
that happens.
    Mrs. Miller-Meeks. Thank you.
    I yield back.
    Mr. Bucshon. The gentlelady yields back. I recognize Mr. 
Carter from Georgia for 5 minutes.
    Mr. Carter. Thank you, Mr. Chairman. I am going to jump 
right into it. You know where I am on this issue, so I don't 
think anybody needs to be prepped with it. Three companies 
controlling 80 percent of the market, the vertical integration 
that exists where the insurance company that owns the PBM that 
owns the pharmacy, and many times employees to provider, you 
are all aware of the FTC and the study they are doing, 
something I asked for 8 years ago. Finally, 7\1/2\ years later, 
it happens. Well, I am glad it is happening.
    You know, one of the most egregious practices that I ever 
witnessed in anything was the gag clause that I was able to get 
passed in legislation to do away with--where we and--as the 
pharmacists weren't able to tell--and the gentleman just 
mentioned--about sometimes the copay is more than the actual 
cost of the medication. But if we were to tell that, we would 
be kicked out of the network by the PBMs, another egregious 
practice of the PBMs.
    Ms. Bass, how--let me ask you, and Representative Miller-
Meeks just mentioned the HELPs copay bill, helping ensure lower 
patient copays, and how the accumulators are being used and not 
being used, and the fact that the patient assistance, the cost-
sharing assistance to patients aren't being credited to their 
copay or to their deductible.
    Why is that? What is the justification that the PBMs use 
not to do that? Why am I having to introduce this legislation 
that would force them to do that?
    Ms. Bass. [Inaudible.]
    Mr. Carter. I can't hear you, I am sorry.
    Ms. Bass. I keep forgetting to push the talk.
    Mr. Carter. That is OK.
    Ms. Bass. I apologize. I appreciate the question.
    Coupons are a marketing device by drug manufacturers who 
set high prices for their products. They are considered an 
illegal kickback in Medicare, and they are used by 
manufacturers to get around formularies.
    Formularies are designed by independent expert clinicians. 
And our company's view is that the plan sponsor has chosen a 
formulary, and that the cost-sharing----
    Mr. Carter. And what do you base that formulary on?
    Ms. Bass. The formulary is based on clinical evidence, 
independent clinical----
    Mr. Carter. Clinical evidence, and not ever on price. Price 
never enters into it?
    Ms. Bass. The P&T committees tell the PBM, ``These are the 
drugs you have to have on the formulary,'' and when there are 
drugs that are----
    Mr. Carter. They tell them that specific drug, or that 
class of drug?
    Ms. Bass. Sometimes specific drugs. And when there are 
drugs that compete with each other, they say, ``These are drugs 
that you can go out into the market and get to compete on''----
    Mr. Carter. And you base it purely on therapeutics, and not 
on price at all?
    Ms. Bass. The must-haves are purely on therapeutics, and 
the must-not-haves, because of safety issues.
    Mr. Carter. So you are saying, yes, you base it all on 
therapeutics, and never on price.
    Ms. Bass. I am saying----
    Mr. Carter. Mr. Connell, let me ask you. What kind of 
financial burdens in the--financial burdens, let's start with 
that first--does it create for patients when they are not able 
to use these cost-sharing cards for their deductible or for 
their copay?
    Mr. Connell. Well, benefit designs really foist a lot of 
expense onto patients, so deductibles are getting larger. A lot 
of times there is no separate deductible for pharmacy. And so, 
as a result, if you have a $5,000 deductible in your plan, then 
when you go to that pharmacy for the first time to fill that 
drug for the first time that year, you are going to pay 
$5,000----
    Mr. Carter. So we can really question whether or--excuse 
me, what the intent is of that cost sharing. It may be so that 
the patient can get the drug because they can't afford their 
copay, or they can't afford their deductible, and not that 
there is some marketing ploy, as was described.
    You know, let me ask you this--and, you know, never ask a 
question you don't know the answer to. What about adherence? 
What does it do to adherence?
    Mr. Connell. It has a tremendous impact on adherence. I 
think you mentioned the study that talks about $2,000, which is 
in Medicare Part D, and the same study also has information on 
commercial claims. And we see patients--over 30 percent, I 
think, and Part D, certainly over 40 percent--where, if they 
faced $2,000 for that first script--and you certainly face that 
with a high deductible--then if you face $2,000, you are--40 
percent of those patients are walking away from the pharmacy 
counter without it.
    Mr. Carter. Absolutely. And I can tell you, again, from 
experience as a pharmacist, that they don't it--that it 
decreases adherence, because they don't come back. They don't 
get their medication because they can't afford it. And I have 
witnessed that firsthand.
    Finally, Mr. Connell, let me ask you, do you agree that 
these cost-sharing plans should go toward the deductible and 
toward the cost-sharing?
    Mr. Connell. I think we should look at all the solutions. I 
am excited that you all have a solution out there that would 
try to, like, apply as much assistance as possible to patients 
who need it. You know, we have at LLS a copay assistance 
program. There's lots of nonprofits out there. Manufacturers--
--
    Mr. Carter. Absolutely, absolutely. And that is why we had 
to introduce this legislation. Again, as Representative Miller-
Meeks indicated, it is not on the--not in the markup right now, 
but I hope it will be, and I think it will be.
    And, Mr. Chairman, I thank you, and I yield back.
    Mr. Bucshon. The gentleman yields back.
    Ms. Bass, with all due respect, we know for a fact that 
PBMs keep drugs off of formularies because of cost.
    The gentleman has yielded, and I now yield to Ms. 
Schakowsky for 5 minutes.
    Ms. Schakowsky. Thank you so much, and I really appreciate 
the opportunity to waive on to this wonderful committee.
    So, you know, I have throughout my career been so concerned 
about the cost and accessibility of healthcare, and we have 
seen the cost continuing to get higher and higher. The, you 
know, higher premiums, higher out-of-pocket costs. And we know 
that right now over 40 percent of Americans face medical debt 
right now, and half of all Americans have difficulty affording 
their healthcare costs. Half of all Americans.
    And meanwhile we have seen hospital mergers, and 
acquisitions are growing. And there is plenty of evidence that 
are saying that, when that happens, studies have shown that it 
can also raise the cost. So Mr. Adler, you said--where are you? 
I am sorry, just walked in. There you go.
    Mr. Adler, in your testimony you do discuss the significant 
increase in consolidation and how it can lead to higher prices. 
I wonder--you have probably gone over that already, but I 
wonder if you could just say something about that, and if you 
think that there are any things that the Congress can actually 
do to address this issue.
    Mr. Adler. Sure. Thank you for the question, Congresswoman.
    So fundamentally, yes, you are 100 percent correct. The 
consolidation that we have seen, particularly of hospitals, two 
hospitals merging, one hospital acquiring another, has been 
very clear evidence at this point that that increases costs and 
tends to decrease quality, actually, right?
    Those costs then flow through to--right--we keep talking 
about kind of people paying a lot of money in their deductible. 
Fundamentally, that is because we have high healthcare prices, 
drug prices, or hospital prices. That is really kind of the 
crux of why folks are paying a lot of money here. And now we 
have a lot of evidence, there is new evidence that has come out 
that very clearly ties hospital mergers to reductions in 
employee wages. That--right--when hospitals merge----
    Ms. Schakowsky. Yes.
    Mr. Adler [continuing]. It means workers in the area get 
paid less.
    Ms. Schakowsky. So the workers have paid a price as well, 
you are saying.
    Mr. Adler. Correct.
    Ms. Schakowsky. Private equity has gotten involved. You 
know, we are talking about reimbursement to these companies, 
often from the Federal Government, because this is healthcare 
costs, and I wonder if you could talk a little bit about the 
role of private equity.
    Mr. Adler. Sure. So that is a--very happy to talk, this is 
where a lot of my research is nowadays.
    So, yes, we have seen--I think private equity has come in, 
particularly in the last decade or so, and been a very big 
accelerator of these consolidation trends we have seen, and 
also sort of picking out some areas where hospitals sort of 
hadn't done the consolidation already. So they got into 
dermatology or ophthalmology, where there wasn't a lot of 
hospital ownership, and really sort of drove things there such 
that you see, you know, 10 percent of docs and a lot of 
specialties work for a private equity company or--in research 
we have coming out soon--that more than 20 percent of emergency 
physicians work for a private equity company right now.
    Ms. Schakowsky. Oh, no. I have been fighting for lower 
healthcare costs and Medicare for All kinds of policies, and it 
just seems like now the Big Money people are getting in.
    Mr. Cavanaugh--let me see my time--you have also discussed 
in your testimony how consolidation is leading to higher costs, 
and I wonder if you could discuss ways that you think--if you 
think--that Congress can address this.
    Mr. Cavanaugh. Certainly. Thank you for the question. Yes, 
I think I would summarize it by saying consolidation is sort of 
the antithesis of value-based care.
    So we are all trying to do better care at lower cost. 
Medicare has programs through the Medicare shared savings 
program, and there has been success. But consolidation allows 
providers to avoid the need to move to value-based care, 
because it allows them to bargain more aggressively with 
insurers and get higher prices and not engage in the activities 
that would lead to better care at lower cost. So I think that 
is the real problem. Some of the bills get at some of the 
things that are feeding it, but ultimately that is the problem 
we need to address.
    Ms. Schakowsky. So let me just end with this. You know, I 
really support efforts to strengthen transparency so that we 
are even requiring that we get reports on ownership, we know 
who is owning, including private equity. I am not so sure that 
everyone is really aware of who is making the decisions, who is 
owning this maybe on the sidelines. And I really think that we 
ought to have transparency requirements. What do you think 
about that?
    Either one of you, anyone.
    Mr. Adler. I will just say that it is very difficult, as a 
researcher who has tried to do this, to nail down what sort of 
entities own physician practices, for instance. There really is 
not good data out there. And one of the bills before the 
subcommittee today would require entity-level reporting. So 
physician group and hospital-level reporting on the parent 
company name, the address, and the ownership structure of those 
physician practices, and make that data publicly available. I 
think that would do a huge service to being able to understand 
the effects of private equity and other corporate forms of 
ownership.
    Ms. Schakowsky. I really agree, Mr. Adler, and hopefully we 
can do something about it.
    Thank you, I yield back.
    Mr. Bucshon. The gentlelady----
    Ms. Schakowsky. Thank you so much.
    Mr. Bucshon [continuing]. Yields back. I now recognize Ms. 
Matsui for 5 minutes.
    Ms. Matsui. Thank you, Mr. Chairman and Ranking Member 
Eshoo, for holding this hearing and allowing us to waive on 
to--allowing me to waive on to join this important 
conversation. I would like to discuss the 340B drug pricing 
program, which is the subject of one of the transparency bills 
before the committee today.
    For years, I have worked to strengthen this program on a 
bipartisan basis. This includes transparency and 
accountability. While some of these bills are ostensibly about 
transparency, in reality I think they would disincentivize 
participation in 340B. I know HRSA has requested the authority 
to audit how entities use their savings, and I want to support 
their work. But this bill adds a number of burdensome reporting 
requirements that are unrelated to how 340B operates.
    Ms. Thompson, help us to understand why the reporting 
requirements in this bill do not actually reflect the true 
value of the true--of the 340B program.
    Ms. Thompson. Thank you for this question. As you know, 
hospitals already report quite a bit on the 340B program to CMS 
and its cost report to the IRS in Schedule H and as well to 
HRSA, as you mentioned.
    The provisions in the bill are metrics, and I think that 
those metrics, looking at payer mix and looking at every single 
clinic that receives 340B payment, I think that the metrics 
will mask all the good work that is being done from the 
program. It will be very difficult to identify, for example, 
that a hospital is using the savings to purchase or--sorry, I 
should say to hire a couple of behavioral health specialists to 
work in an opioid clinic, or to provide the amount of free or 
discounted drugs to needy patients or the mobile mammography 
unit that is out in the community finding breast cancer. I am 
not sure that those metrics will really be able to show the 
good works that are being done.
    Ms. Matsui. Right, thank you. You know, I support measures 
to strengthen program integrity, as we all should.
    In addition, I know there is already a movement towards 
transparency around 340B savings. For example, in your 
testimony you mentioned the good stewardship principles. Some 
hospitals in my district have adopted these to help them share 
how 340B benefits their communities. Ms. Thompson, is it 
possible to craft reporting requirements that demonstrate the 
true value of 340B?
    Ms. Thompson. Well, we would be very interested in working 
with you on that. I think that the good steward principles have 
been a good step forward, and we have been working with our 
hospitals to encourage them to share with their communities 
what they are doing with those savings as well. So we would 
be--welcome the opportunity to work with you here.
    Ms. Matsui. OK. So what kind of activities could we support 
that would not be captured by the requirements in this bill?
    Ms. Thompson. I think that we would really need to reflect 
on additional reporting requirements, because there are so many 
already upon hospitals. And I really do feel that HRSA has the 
authority to make sure that the program is being implemented as 
intended and that it audits hospitals to make sure that they 
are conforming to the program as written. So I am just not sure 
additional reporting requirements are needed at this time, but 
happy to speak with you and others on the committee to discuss 
further.
    Ms. Matsui. Thank you. At the last hearing on transparency, 
we heard from a witness from Pullman Regional Hospital. He 
explained how burdensome it already is for entities to 
participate in 340B. From certifying eligibility every year to 
preparing for audits to simply administering the program, it is 
a lot of work. And I am really concerned that some of these new 
requirements proposed would be near impossible for some 
entities to comply with.
    Ms. Thompson, would these requirements even be workable for 
hospitals, especially rural hospitals and others with limited 
resources?
    Ms. Thompson. I think that you are absolutely right. We 
have heard from many of our small, rural hospitals that are so 
grateful for this program, because out of everywhere, I think, 
the 340B savings in rural communities has really provided a 
lifeline for these hospitals.
    They have limited staff. You know, in many of the critical 
access hospitals, the CEO is also the COO----
    Ms. Matsui. Right.
    Ms. Thompson [continuing]. And the CFO and the janitor who 
changes the light bulb. So any additional requirements that's 
necessary, you hope that they are not so high a barrier that it 
decreases the ability of providers to access the funds that 
might be available. And for 340B, we all have to say that these 
are no additional costs to taxpayers or the Government. It is 
really savings on drugs.
    Ms. Matsui. Thank you very much, Ms. Thompson, and I look 
forward to working with you. Thank you.
    I yield back.
    Mr. Bucshon. The gentlelady yields back.
    Mr. Pence is going to--Mr. Pence, are you ready for your 5 
minutes?
    I now recognize the gentleman from Indiana, Mr. Pence, for 
his 5 minutes.
    Mr. Pence. Thank you, Chairs McMorris Rodgers, Guthrie, and 
Ranking Member Pallone and Eshoo for holding this hearing, and 
thank you to the witnesses today.
    Hoosiers and all Americans are facing higher medical costs 
and fewer options for care, particularly in rural communities. 
Complex medical fee structures, surprise billing, and confusing 
coverage plans have further eroded patient trust in our 
healthcare system. Improving healthcare price transparency, 
however, could inject needed competition for healthcare 
facilities and, ultimately, lower costs for patients. This is 
especially needed in the Hoosier State, which consistently 
ranks among having some of the highest hospital prices in the 
country.
    Across southern Indiana, rural facilities are closing at an 
alarming rate, going bankrupt, lowering access to care for 
vulnerable communities. Lack of competition has left patients 
with fewer alternatives to access care, particularly in rural 
communities across Indiana's 6th District, often an hour or 
more drive.
    These issues are exasperated by unsustainable workforce 
shortages and skyrocketing labor costs. There have been recent 
efforts to improve transparency, such as the Pence-Trump 
administration's 2019 HHS rule requiring hospitals to disclose 
standard charges, as well as the transparency and coverage 
requirements for health insurers. However, it is clear there is 
still more that needs to be done so that Hoosiers and all 
Americans can make the best medical decisions for themselves 
and their families.
    Mr. Adler, several years ago Congress took steps to 
harmonize Medicare payments between various sites of care for 
the same services provided through a site-neutral payment model 
for certain services. However, many outpatient facilities were 
grandfathered in by the legislation, making the services 
covered under the new policy a relatively small portion of 
outpatient services. If this policy were to be expanded, do you 
think there are ways to ensure rural hospitals continue to 
receive sufficient support and provide healthcare access to 
rural patients?
    Mr. Adler. Thank you, Congressman. So, yes, I think, as you 
say, right, this was a pretty small-step policy that was passed 
in 2015 that tried to move in this direction. Basically, it 
grandfathered anyone who was--even had their outpatient 
department under construction at the time back then. You know, 
the data is basically less than 1 percent of outpatient 
services were covered by that bill.
    I think moving towards getting rid of that grandfathering 
entirely would, right, save money for taxpayers and patients, 
reduce incentives to consolidate. And I don't--do not see that 
there would be--right? We are talking about pretty low-
complexity services here. To think that this would sort of have 
issues on access seems unlikely. And if you do, if you are 
concerned about that, this isn't the policy to sort of toy with 
that, right?
    I think Mr. Cavanaugh was saying this earlier, but if that 
is the issue, one, right, there is another bill that is, for 
instance, getting rid of the--or delaying the DSH cuts. Or you 
could increase the physician fee schedule or, you know, other 
hospital payment rates, right? Even if you did this without 
saving a ton of money, you would at least be still reducing the 
incentive for hospitals to consolidate and buy up all the 
physician practices in an area.
    I just think there are other policies that, if you want to 
kind of deal with that issue, that are better uses.
    Mr. Pence. All right, then, kind of from there, do you 
think it makes more sense to further explore transparent and 
accountable methods of directly supporting rural and medically 
underserved hospitals than an opaque and complicated network of 
cross-subsidies?
    Mr. Adler. Sure, right? I fundamentally think that if the 
goal is to support rural hospitals, I think directly doing that 
is the best way. Right now we have all of these policies that 
kind of do that, kind of don't do it perfectly. I think sort of 
directly funding that is a much better sense than having, oh, 
you get to--you know, when, you know, the hospital buys up your 
physician practice, all of a sudden you owe three times more 
money on the service you were getting a week ago.
    Mr. Pence. Yes, I--you know, just kind of as we are sitting 
here and I am wrapping up, you know, I have a number of rural 
hospitals. I will tell you that two of them are probably in the 
red right now in a big way. And one of them went bankrupt about 
3 years ago, and if it hadn't been some of the bailout or 
relief that was provided during COVID, they--some of them would 
be closed today.
    So I think we really have to figure out ways to kind of 
separate rural from some of the other conversations we have, 
and with that I yield back.
    Mr. Bucshon. The gentleman yields back. I now recognize Mr. 
Allen from Georgia for 5 minutes.
    Mr. Allen. Well, thank you, Mr. Chairman, and thank you for 
allowing me to waive on to this important hearing.
    Well, you know, we are going to repeat it again. What we 
are here today is to address costs by increasing transparency 
and competition rather than price setting that we have seen 
happen with some drug prices, or with this Medicare for All 
business. But--and that is where I come from, the business 
world, very competitive, very transparent. Our clients, our 
contracts provided for audits and things like that so that, you 
know, we hid nothing from them. And that is kind of the way the 
free market works out there. And what we have here is a little 
different.
    Mr. Adler, a bill that I cointroduced that we are 
discussing today, the Drug Price Transparency and Medicaid Act, 
would stop the harmful spread pricing practices some pharmacy 
benefit managers use, where they underreimburse pharmacies 
while overbilling State Medicaid programs.
    Last Congress the Congressional Budget Office estimated a 
version of this legislation would save approximately 1 billion 
in Federal dollars. Can you speak to the implications that the 
practice of spread pricing has on businesses, and the benefit 
that the healthcare markets would see if we were to implement a 
ban on spread pricing across the board?
    Mr. Adler. Sure, thank you for the question, Congressman.
    I think it is--honestly, I think it is hard to perfectly 
game things out, in part because these are private actors who 
will just come--try to come up with other ways to do very 
similar things. And you have already seen a lot of the big PBMs 
already kind of move away from spread pricing.
    I think an important thing just to keep in mind here is 
that, right, employers also often want maybe not spread 
pricing, but they are--right?--cost-sharing is part of the 
thing, right? There are two sides of this negotiation here. So 
often the employer sort of wants part of the benefit design as 
well here.
    I do think transparency is useful here to know exactly what 
money is flowing where, and I think that can be useful. But I 
think that is sort of where more of the sort of benefits are.
    Mr. Allen. Ms. Schuman, I have long been concerned with the 
lack of transparency in the healthcare industry, particularly 
as it relates to healthcare middlemen like pharmacy benefit 
managers. Can you talk more about PBM transparency and how we 
can restructure the current rebate system to be more easily 
understood by employers, plan participants, and beneficiaries?
    Ms. Schuman. Well, let me just thank you very much for that 
question, and let me just start off by saying that employers, 
even very large employers, are frustrated by the complexity and 
opaqueness of the rebate structure, and they need to have the 
information. They don't know what they don't know. I have 
repeatedly said that. But that is the issue. And that is why it 
is so critical for them to be able to have reporting from the 
PBMs about the revenue streams to be able to find out that, 
really, they are paying for value, that their patients, that 
their workers are paying for value.
    And I think it is so important to enshrine this in 
legislation because, number one, employers need the certainty 
of knowing that this is there. They also need to know that 
there's the clear definitions in statute about what needs to be 
reported. And I think, most importantly, the transparency needs 
to be robust enough that it captures the PBM business model not 
just today but how it is going to evolve tomorrow as well.
    Mr. Allen. Well, I served on the Healthy Future Task Force, 
and I couldn't have any of those experts that we talked to--
could tell me how to peel the onion back and find out where all 
the money is going.
    I recently took a trip to Israel, and pretty much I talked 
to folks about their healthcare, and they were pretty happy 
with it. Currently, Israel spends less than 8 percent of their 
GDP on healthcare. We are close to 20 percent. Obviously, we 
are in a worldwide competition here. We need to be looking 
where--at where our healthcare dollars are being spent.
    Many attribute our increased healthcare prices in part to 
consolidating by merging hospitals and to--consolidation by 
merging hospitals and pharmaceutical groups. Health 
Subcommittee, can you speak to how the hospital consolidation 
and acquisition of physician practices impacts employers, and 
why this is such an important issue to them?
    Ms. Schuman. Yes. Well, thank you. Thank you so much.
    And it impacts employers because it impacts employees. It 
impacts costs. I mean, ultimately, that is what we are here 
today, is figuring out what those root causes of higher 
healthcare costs are and to address them. And consolidation, 
overwhelmingly, is fueling higher healthcare costs.
    So if we are going to really tackle lower healthcare costs 
at their core, which is what employers want to be able to 
deliver--high value, affordable care for their employees--they 
care about consolidation, they care about Medicare policies 
that are fueling consolidation.
    Mr. Allen. Exactly, and the Federal Government. Yes. Thank 
you.
    Mr. Chairman, I am out of time, and I yield back.
    Mr. Guthrie [presiding]. Thank you. The gentleman yields 
back.
    Seeing no other Members present for questions, the first 
thing I will do is ask unanimous consent to insert in the 
record the documents included on the staff hearing documents 
list.
    Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Guthrie. You want to comment here? You are sitting 
here, do you have a final comment? You would just like a couple 
of minutes?
    Ms. Eshoo. I would just like to thank you, Mr. Chairman, 
all the members of the committee, most especially all of the 
witnesses. Whether I agree or disagree with you, it is very 
important that you are here. I think that, you know, to a 
person--well, maybe not to a--well, just--I am getting myself 
in a little trouble here.
    [Laughter.]
    Ms. Eshoo. You did a great job, and I think that you 
answered--with your answers you were highly instructive to all 
of the members of the committee. So I truly thank you.
    You heard Members complimenting the panel, and we usually 
do in a very nice way, but it was effusive today on both sides. 
So know that you are helping to move the needle, and it is so 
important for the people of our country. They are so hungry and 
so in need of these changes.
    And I often say to my constituents most people don't know 
who I am, they don't know what I am doing, but the words that 
we write walk into people's lives. So, Congress willing, we 
will write very good words to walk into people's lives. So 
thank you.
    Thank you, Mr. Chairman.
    Mr. Guthrie. Thank you. And I just want to sum up as well. 
Thanks for everybody being here. It has been a long day, very 
informative.
    We are going to be working together, because we want to 
deliver the world-class care that you all deliver at the price 
that--Ms. Schuman, representing the employer-based plans and 
the individuals who buy their own coverage that have the price 
that we can afford to pay, and then people know what the prices 
are so they can make decisions for themselves. So we really 
appreciate you being here.
    I will remind Members that they have 10 business days to 
submit questions for the record, and I ask the witnesses to 
respond to the questions promptly. Members should submit their 
questions by the close of business on May the 10th, so you 
should have questions before May the 10th, and I ask for your 
prompt consideration and responses.
    And without objection--I see no objection--the committee 
is--subcommittee is adjourned.
    [Whereupon, at 3:27 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                 [all]