Congressional Record, Volume 144 Issue 150 (Tuesday, October 20, 1998)

[Congressional Record Volume 144, Number 150 (Tuesday, October 20, 1998)]
[Senate]
[Pages S12688-S12693]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

NOMINATION OF DR. JANE HENNEY TO THE FDA

Mr. NICKLES. Mr. President, I wish to speak on the nomination of Dr.
Jane Henney to be Commissioner of FDA.
Mr. President, the nomination of the FDA commissioner is one of the
most important nominations the Senate has considered this year. The FDA
regulates products comprising twenty-five cents of every dollar spent
by consumers in this country. It deals with literally life and death
issues on a daily basis. Given the significant impact the FDA has on
the life of every American, it is important that the Senate exercise
caution to ensure the next Commissioner is qualified and capable of
leading the Agency.
I have let Dr. Henney know, and I let Secretary Shalala know, that I
had some concern with FDA as it has been administered for the last few
years. The FDA should be a non-partisan science based Agency which
focuses solely on its mission to ensure the safety of food and to
expeditiously review drugs and medical devices which are intended to
save and extend lives. And for this reason I felt I needed personal
assurance from Dr. Henney that under

[[Page S12689]]

her leadership the FDA would focus on its Congressionally mandated
mission.
FDA is supposed to be an agency that works to improve our health,
that works to make sure that drugs and other medical devices are safe
and effective. What we have found, under Dr. Kessler's regime,
particularly during the Clinton administration, was that the FDA was
involved in a lot of political activity. Under the leadership of David
Kessler, the Agency too often became a tool of the Administration to
push its liberal political agenda. One area where this was particularly
offensive was the FDA's attempt to regulate tobacco.
Let me give an example of where I believe they exceeded their
authority. In my State, just recently--I tell my colleagues, this is
going to happen in every State--an FDA talking paper announced that
``FDA Partners With Oklahoma To Protect Children From Tobacco.''

The Food and Drug Administration has contracted with the
Oklahoma State Dept. of Health to enforce the FDA's new
regulation that prohibits retailers from selling cigarettes
and smokeless tobacco to children under 18.

I will go on:

Under the contract, the State of Oklahoma will receive
[$312,000] to conduct approximately 4,500 unannounced retail
compliance checks over the next 12 months.

It goes on:

The FDA will seek a fine of $250 for the second violation,
$1,500 for the third [violation], $5,000 for the fourth, and
$10,000 for the fifth.

So, if a convenience store doesn't comply and they don't check IDs--
and they have to check IDs up to age 27. In Oklahoma, it is legal to
smoke when you are 18--but if a youngster, who is maybe 19, working in
a convenience store, doesn't check somebody's identification who might
be 26 or 27 years old, they can be fined up to $10,000. Somebody might
say, ``Where is this idea originating? It is legal for them to smoke,
but if they don't check IDs of somebody up to age 27 they can be fined
$10,000?''
This is implementing FDA's regulation. FDA's regulation, in my
opinion, is unconstitutional. They don't have the authority to write
the law.
The Constitution says in article I, section 1:

All legislative Powers herein granted shall be vested in a
Congress of the United States, which shall consist of a
Senate and House of Representatives.

Where did this regulation come from? It came from FDA, and it came
from the FDA Administrator, working with the Clinton administration, to
basically implement a very, I think, political agenda. I might mention
that the regulations are being contested in court, and most of those
regulations are being thrown out. In fact, on August 14, 1998, the
Fourth Circuit Court of Appeals ruled that Congress did not intend to
give the U.S. Food and Drug Administration (FDA) the authority to
regulate tobacco. In a 2-1 decision the Appeals Court tossed out a 1997
federal district court ruling that gave FDA only limited power to
regulate tobacco. ``The FDA has exceeded the authority granted to it by
Congress.'' So said Circuit Judge H. Emory Widener Jr., on behalf of
the three-member panel.
I happen to favor regulation on tobacco, but I think Congress needs
to act on it. The FDA does not have the authority to create it out of
whole cloth, which is certainly what they did. I favor some decent
regulations. I don't favor the idea of having a team of people making
4,500 unannounced retail compliance checks all over my State and the
Federal Government spending over $300,000 implementing this type of
plan, or having the regs be so ridiculous we are going to be checking
IDs up to age 27. I don t support regulations that allow the FDA to
fine people and businesses who don't comply, up to $10,000 per
violation, basically, fining them out of existence. That doesn't make
sense.
Mr. President, I ask unanimous consent that at the conclusion of my
statement, an FDA talking paper, which announces this implementing
regulation which has the force and effect of fines up to $10,000, be
printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mr. NICKLES. Mr. President, another area where I have seen FDA become
very involved in the political arena deals with the abortion drug RU-
486. I have a press release that is dated May 16, 1994. The headline
is: ``Roussel Uclaf Donates U.S. Patent Rights for RU-486 to Population
Council.''
The first paragraph says:

Then further in the press release it says:

``FDA will do all it can to quickly evaluate
mifepristone,'' said Shalala.

I ask unanimous consent that this press release be printed in the
Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 2.)
Mr. NICKLES. Mr. President, this is an administration that had FDA go
out and recruit a company that manufactures RU-486, a French company,
to donate its patent rights to a group which is an abortion proponent
in the United States and then was doing everything they could to
expedite the process.
RU-486 is an abortion pill which terminates the life of a human
embryo between FOUR weeks and NINE weeks. It is NOT a contraceptive as
some would have us believe. It is a drug which will stop the beating
heart of an unborn child.
In January 1993, President Clinton issued a memo to Sec. Shalala
directing her to promptly ``assess initiatives by which HHS can promote
the testing and manufacturing of RU-486 in the US.''
Thereafter, the FDA engaged in negotiations with Roussel Uclaf,
French manufacturer and holder of US Patent rights, regarding the
testing and marketing of RU-486 in the US.

In May 1994, Shalala issued this press release, I
mentioned, announcing the deal and promising FDA would do
everything it could to ``quickly evaluate the drug.'' FDA
pushed the drug through the review process in a fraction of
time required for most drugs.

FDA's Center for Drug Evaluation and Research reported that the
median total review time for new drug applications in 1996 was 14.8
months. FDA review time for RU-486 was only 6 months.
At a time when the agency was struggling to approve drugs which cure
diseases and save lives, the Agency was focusing a great deal of time
and effort on a political agenda which would end the life of an unborn
child.
I am offended by that, and I asked Dr. Henney:
Are you going to be promoting an abortion drug? Is that what an FDA
Commissioner is supposed to do? Is that their purpose?
I thought the purpose of FDA was to make sure drugs were safe and
effective and that medical devices are safe and effective so people can
have some confidence in these products. I didn't know it was the
purpose of FDA to recruit companies to bring abortion drugs to into
this country. That is clearly not their purpose.
After talking with Dr. Henney, she assured me that wasn't her
intention. She gave me a letter, and I ask unanimous consent that it be
printed in the Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 3.)
Mr. NICKLES. Mr. President, the concluding sentence of her letter
says:

If I am confirmed as Commissioner, I would not solicit a
manufacturer for RU-486.

She also says:

As a general matter, I believe the Agency should only
solicit product applications in extraordinary circumstances
in which there is a clear public health need.

Certainly trying to recruit a manufacturer and provider of abortion
drugs doesn't fit in that category, and I appreciate her statement she
will not solicit a manufacturer of RU-486.
It bothers me that the Secretary of Health and Human Services and
this Clinton administration have done so much to circumvent the
process, to use FDA in the process. I think it is politicizing an
agency that is supposed to be focused on its mission to protect the
public health and to expeditiously review drugs and medical devices
that will save and extend life.
Mr. President, I also met with Secretary Shalala a couple of times
and

[[Page S12690]]

wanted assurances from her that the Department of Health and Human
Services would interpret the law as written, would enforce the law as
written and not try to rewrite it.
Unfortunately, we found out that the Department of Health and Human
Services was trying to redefine the Hyde amendment which Congress
defined. They were trying to redefine it to broaden the exceptions.
The Hyde amendment, as most of my colleagues know, says we will not
have Federal funding for abortion except for in cases of rape, incest
or to save the life of the mother. There is not a mental health
exemption in that. Many people have tried to put it in. The
administration has. But we clearly defined it, Congress defined it as
the Hyde amendment, no mental health exception.
I have a letter from Secretary Shalala that says this activity will
cease and they will interpret the Hyde amendment as written.
We also found, Mr. President, that under the Kidcare Program HHS had
misinterpreted the abortion language. We made it very clear in three
different sections in that law that abortion was not going to be a
fringe benefit which we were going to provide for teenagers. We made
the language very, very clear.
Much to my consternation, we were contacted by officials of the State
of Virginia who said HHS was trying to mandate that they have abortion
services covered even though it was certainly their wish and option
that they didn't want that to be the case.
After meeting with Secretary Shalala, and after an exchange of
several letters, she finally assured me that wasn't the case. I will
insert her letters and mine and Representative Bliley's letter into the
Record. But we now have assurances from Secretary Shalala. I will read
the last part of her letter sent to me on October 15:

States are not required to provide abortion services,
including abortion services for which coverage is permissible
under title XXI of the Social Security Act, under any of the
S-CHIP--

That is the State Children's Health Insurance Program--

benefit package options in section 2103. No State will be
denied approval of its S-CHIP plan because its benefit
package under section 2103 does not include coverage of
abortion services, including abortion services for which
coverage is permissible under title XXI.
Thank you for your interest in this matter.

I am pleased that Secretary Shalala agreed with us that she would
interpret the law as written, and that includes both the Hyde language
and language in the Kidcare program dealing with abortion. I am pleased
that I have assurances from Dr. Henney that if she is confirmed
Commissioner of FDA, she will not recruit manufacturers and providers
for an abortion drug, including RU-486.
Mr. President, I ask unanimous consent that this entire set of
letters be printed in the Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 4.)
Mr. NICKLES. Mr. President, it is my intent to support the nomination
of Dr. Henney. After meeting with her a couple of times, and having
discussions on these and other issues, I am confident that she will be
a very able administrator who will not play politics. In my opinion,
she doesn't have a political agenda, and I believe she will try to
administer the Food and Drug Administration as a professional
organization to make sure that drugs and medical devices are safe and
effective for America's population, and that she won't try to implement
legislation through regulation.
Mr. President, I wasn't the only Senator who had reservations about
this nominee. I had reservations until we could get certain
clarifications. I received those. I have asked they be printed in the
Record to substantiate the progress that was made, and I urge my
colleagues to support her nomination.
I yield the floor.

Exhibit 1

[From FDA Talk Paper, Oct. 2, 1998]

FDA Partners With Oklahoma To Protect Children From Tobacco

The Food and Drug Administration (FDA) has contracted with
the Oklahoma State Dept. of Health to enforce FDA's new
regulation that prohibits retailers from selling cigarettes
and smokeless tobacco products to children under 18.
Under the contract, the State of Oklahoma will receive
$312,386.75 to conduct approximately 4,500 unannounced retail
compliance checks over the next 12 months. Minors in typical
dress, accompanied by an adult, will attempt to purchase
cigarettes or spit tobacco in retail stores throughout the
State of Oklahoma.
Information about the compliance checks will be sent to
FDA, which will issue a warning for the first violation to
retailers found selling to the adolescents. These retailers
will be subject to repeat inspections. FDA will seek a fine
of $250 for the second violation, $1,500 for the third,
$5,000 for the fourth, and $10,000 for the fifth.
The first provisions of FDA's final rule to protect
children from tobacco took effect Feb. 28, 1997, making age
18 the national minimum age to purchase tobacco products and
requiring retailers to check photo IDs of anyone under age
27. These measures are part of a comprehensive program
designed to reduce by half the number of young people who
smoke in the next seven years. FDA published the final rule
Aug. 28, 1996, with provisions that limit access by children
and adolescents to tobacco products and reduce the appeal
these products have for underage smokers.
Children and adolescents have long had easy access to
tobacco products. In 13 studies reviewed by the Surgeon
General, minors were successfully able to buy cigarettes 67
percent of the time.
In fact, 3,000 children and adolescents become regular
smokers every day, and nearly 1,000 will die prematurely from
a smoking-related disease.
On Aug. 14, 1998, a majority of a three-judge panel of the
U.S. Court of Appeals for the Fourth Circuit in Richmond,
Va., ruled that FDA lacks the jurisdiction to regulate
tobacco products, reversing the decision of the U.S. District
Court for the Middle District of North Carolina. However, the
Department of Justice is seeking review of this decision by
the full Fourth Circuit. Under the court of appeals' rules,
unless otherwise directed by the Fourth Circuit, the effect
of the decision is automatically stayed, meaning the status
quo is maintained until the Court has the opportunity to rule
on the government's rehearing request. This means, pending
the Court's review, the parts of the FDA tobacco program that
have been in effect since February 1997 will remain in effect
and that state contracts such as this one with Oklahoma
continue to be awarded and implemented.
This case involves an appeal of an April 25, 1997, decision
from Judge William Osteen of the U.S. District Court in
Greensboro, N.C. He ruled that FDA has jurisdiction under the
Food, Drug and Cosmetic Act to regulate nicotine-containing
cigarettes and smokeless tobacco. The court upheld all
restrictions involving youth access and labeling, including
the two provisions that went into effect Feb. 28.
The State of Oklahoma is one of 53 states and territories
that are eligible to contract with FDA. FDA will use a
portion of the $34 million it has budgeted this year to
assist states in enforcing the regulation and to educate
retailers and the general public on the new provisions that
went into effect in last February. President Clinton has
requested $134 million for tobacco regulation in his FY 1999
budget submission to Congress.
____

Exhibit 2

[From Eagle Forum, Oct. 9, 1998]

Roussel Uclaf Donates U.S. Patent Rights for RU-486 to Population
Council

HHS Secretary Donna E. Shalala announced today that French
pharmaceutical company Roussel Uclaf, at the encouragement of
the Clinton administration, is donating, without
remuneration, its United States patent rights for
mifepristone (RU-486) to the Population Council, Inc., a not-
for-profit corporation.
RU-486 has been marketed for non-surgical termination of
pregnancies in France, the United Kingdom and Sweden. The
drug is also under study for labor induction, contraception,
Cushing's syndrome, endometriosis, meningioma and breast
cancer.
``We strongly believe that women in America should have
access to the full range of safe and effective alternatives
to surgical abortion,'' Shalala said. ``The donation
announced today is a big step in that direction.''
On Jan. 22, 1993, President Clinton signed a Presidential
Memorandum directing the Department of Health and Human
Services to assess initiatives to promote the testing and
licensing of RU-486 in the United States.
Shalala commended Roussel Uclaf and the Population Council
for coming to closure after months of complex negotiations
amid repeated urging from the Clinton administration.
Shalala emphasized, however, that the donation does not
mean RU-486 has been approved for use in the United States.
The Population Council must conduct clinical trials, identify
a manufacturer and submit a new drug application to the Food
and Drug Administration.
``The FDA will do all it can to quickly evaluate
mifepristone,'' said Shalala. ``FDA's decision will be based
solely on the scientific and medical evidence as to the
safety and efficacy of the drug. That is our responsibility
to the women of America.''

[[Page S12691]]

____
HHS Fact Sheet

mifepristone (ru-486). brief overview, may 16, 1994

On Jan. 22, 1993, in one of his first official acts,
President Clinton issued a memorandum directing HHS Secretary
Donna E. Shalala to assess initiatives to promote the testing
and licensing of mifepristone (RU-486) in the United States.
During early 1993, Secretary Shalala and FDA Commissioner
David Kessler communicated with senior Roussel Uclaf
officials to begin efforts to pave the way for bringing RU-
486 into the American marketplace.
In April 1993, representatives of FDA, Roussel Uclaf and
the Population Council, a not-for-profit organization, met to
discuss U.S. clinical trials and licensing of RU-486. Over
the last year, the parties continued their negotiations,
culminating in the donation announced today. Roussel Uclaf
will transfer, without remuneration, its United States
patient rights to mifepristone to the Population Council. In
turn, the Population Council will take the necessary steps to
bring RU-486 to the American market.
Mifepristone was developed by the French firm Roussel
Uclaf. The drug has been marketed for use to non-surgically
terminate pregnancy in France, the United Kingdom and Sweden.
There are several investigative trials underway with FDA for
other uses of the drug, including contraception, labor
induction, Cushing's syndrome, endometriosis, meningioma and
breast cancer.
It must be recognized that termination of a pregnancy is
not a simple medical procedure, whether it is done surgically
or through a medical regimen. In France, the United Kingdom
and Sweden, where RU-486 has been administered to
approximately 150,000 women, the procedure requires several
visits to the medical facility, a precisc dosing scheme using
two different drugs, and close monitoring to care for women
who may experience excessive bleeding or other complications.
Any use of mifepristone in the United States would have to
follow the same type of strict distribution and use
conditions.
____

Exhibit 3

October 14, 1998.
Hon. Don Nickles,
Assistant Majority Leader,
U.S. Senate, Washington, DC.
Dear Senator Nickles: Thank you for meeting with me and
Secretary Shalala concerning my nomination to be Commissioner
of the Food and Drug Administration (FDA). I appreciate the
time and consideration that you have given to my nomination.
I want to take this opportunity to restate that during my
earlier service at FDA (1992-1994) I was not involved either
in the solicitation or the review of the RU-486 application.
As a general matter, I believe the Agency should only solicit
product applications in extraordinary circumstances in which
there is a clear public health need.
If I am confirmed as Commissioner, I would not solicit a
manufacturer for RU-486.
Thank you again for considering my nomination.
Sincerely,
Jane E. Henney, M.D.
______

Exhibit 4

Congress of the United States,

Washington, DC, October 7, 1998.
Hon. Donna E. Shalala,
Secretary, Department of Health and Human Services,
Washington, DC.
Dear Madam Secretary: Last July, the Health Care Financing
Administration (HCFA) sent to state Medicaid directors a note
correctly interpreting the Hyde Amendment as it was enacted
in your Department's appropriations bill for FY 1998.
``The recently enacted Appropriations Act contained new
requirements for federally funded abortions. One of those
requirements is that, in order to receive federal funding, a
physician must certify that a woman suffers from a physical
disorder, physical injury, or physical illness, including a
life-endangering physical condition caused or arising from
the pregnancy itself, that would place the woman in danger of
death unless an abortion is performed.''
That directive forecloses any possible consideration
concerning mental health. Yet it now appears that a HCFA
departmental meeting has been scheduled to discuss whether
some mental problems that have a physical origin might make a
patient eligible for a taxpayer-funded abortion. This is the
worst kind of bureaucratic loophole-knitting. It must stop.
We, therefore, call upon you to take immediate action to
investigate and stop any activities that may be taken by
officials at HCFA in an effort to circumvent the Hyde
Amendment. We also request that you report back to us, by
November 1, 1998, your findings regarding this investigation
and the action taken by you to halt these activities.
Sincerely,
Don Nickles,
Assistant Majority Leader,
U.S. Senate.
Henry J. Hyde,
Chairman, Committee on the Judiciary,
U.S. House of Representatives.
____

Department of

Health and Human Services,

Washington, DC, October 12, 1998.
Hon. Don Nickles,
Assistant Majority Leader, U.S. Senate, Washington, DC.
Dear Senator Nickles: Thank you for the letter from you and
Chairman Hyde concerning the Department's interpretation of
the Hyde amendment as it affects federally funded abortions.
As you know, I take very seriously the Department's
obligation to fully implement the law as enacted by the
Congress, Nancy Ann DeParle, the Administrator of the Health
Care Financing Administration (HCFA), shares this commitment.
Let me assure you that in order for federal funds to be
used to cover abortion, a physician must certify that a woman
suffers from a physical disorder, physical injury, or
physical illness, including a life-endangering physical
condition caused or arising from the pregnancy itself, that
would place the woman in danger of death unless an abortion
is performed.
We have no intention to instruct states on this issue other
than to reiterate the statutory obligation that must be met
to utilize federal funds for legally permissible abortions.
I trust this addresses your concerns. Please let me know if
I can be of further assistance in this matter. An identical
letter has been sent to Chairman Hyde.
Sincerely,
Donna E. Shalala.
____

U.S. Senate, Office of

Assistant Majority Leader,

Washington, DC, October 7, 1998.
Hon. Donna E. Shalala,
Secretary, U.S. Department of Health and Human Services,
Washington, DC.
Dear Madam Secretary: It has come to our attention that the
Health Care Financing Administration (HCFA) is wrongly
interpreting provisions included in the Balanced Budget Act
of 1997 (BBA) regarding Title XXI of the Social Security Act.
Despite the clarity of the law, your agency is seeking to
compel States to cover abortions under their State Children's
Health Insurance Program (S-CHIP) plans HCFA's actions are in
direct contravention of the Balanced Budget Act of 1997.
As you are aware, Congress codified the Hyde language in
the new Title XXI language establishing the S-CHIP program
(See sections 2105(c)(1), 2105(c)(7) and 2110(a)(16)). This
language prohibits the use of funds under this program to pay
for any abortion or to assist in the purchase, in whole or in
part, of health benefit coverage that includes coverage of
abortion except where the abortion is necessary to save the
life of the mother or if the pregnancy is the result of an
act of rape or incest.
Of particular relevance to the current dispute is the fact
that in each of the aforementioned sections, even this
limited scope of permissible abortion payment or coverage is
triggered by the extent (if any) to which a State elects to
include abortion payment or coverage in its S-CHIP State
plan. As a result, there exists no requirement that States
cover abortions in the case of rape, incest, or life
endangerment. Rather, these are the only instances in which a
State which chooses to pay for abortions or abortion coverage
may do so.
In addition to codifying the Hyde amendment, Congress
explicitly distinguished in BBA between abortion and
medically necessary services under Title XIX of the Social
Security Act (See section 4707(e)(1)). By citing abortion as
an exception to the standard of medical necessity, Congress
removed the basis upon which Medicaid coverage of abortion
was previously required.
Based on these provisions of law, HCFA has no authority to
require any State to provide abortion coverage as part of
their Title XXI program. As a result, any disapproval of a
State plan on these grounds is contrary to law. We request
your immediate written assurance that HCFA will no longer
require States to cover abortions under their S-CHIP plans.
Sincerely,
Don Nickles,
Assistant Majority Leader.
Tom Bliley,
Chairman, Committee on Commerce.
____

Department of Health

and Human Services,

Washington, DC, October 3, 1998.
Hon. Don Nickles,
Assistant Majority Leader, U.S. Senate, Washington, DC.
Dear Senator Nickles: Thank you for the letter from you and
Chairman Bliley concerning abortion coverage under the Title
XXI State Children's Health Insurance Program (S-CHIP). As
explained in greater detail below, states do have the
discretion to determine whether to provide coverage for
permissible abortion services in their S-CHIP programs.
First, let me say that we have gone to great lengths to
ensure that the Department's implementation of the S-CHIP
program is consistent with congressional intent and flexible
to meet the needs and circumstances of individual states. We
have consulted frequently with Members of Congress and staff
on a bipartisan basis, and have worked with state officials
to facilitate the implementation of their programs. To date,
we have approved 42 state plans under the Title XXI program.
In addition to the Title XXI Medicaid expansion option,
states have three options for insurance coverage under the S-
CHIP program, Benchmark, Benchmark-Equivalent, or Secretary-
Approved Coverage. States are

[[Page S12692]]

free to exclude coverage for permissible abortion services in
their Benchmark (provided a state's Benchmark plans does not
cover abortions) or Benchmark-Equivalent options.
To ensure as much consistency as possible in our approval
process, we have limited the exercise of our discretion under
the third option, Secretary-Approved Coverage, to cases in
which the benefits offered under a state's S-CHIP program are
the same as under its Medicaid plan. This provided state with
the flexibility to use their existing Medicaid programs and
structures without have to extend an entitlement to new S-
CHIP enrollees. Given the substantial flexibility in design
their benefit packages that states enjoy under the Benchmark
and Benchmark-Equivalent options, this limited approach to
Secretary-Approved Coverage does not unduly constrain the
benefits options available to states.
Please let me know if I can be of further assistance on
these issues. An identical letter has been sent to Chairman
Bliley.
Sincerely,
Donna E. Shalala.
____

U.S. Senate, Office of Assistant Majority Leader,
Washington, DC, October 13, 1998.
Hon. Donna E. Shalala,
Secretary, U.S. Department of Health and Human Services,
Washington, DC.
Dear Madam Secretary: Thank you for your recent letter.
While I appreciate your timely response, I would like
specific answers to the concerns that were raised in my
earlier letter. On behalf of chairman Bliley and me, I
request your direct response to the following questions:
(1) On the basis of your letter dated October 13, 1998, is
it the Department's view that the Hyde language contained in
the S-CHIP program does not require states to provide
abortion coverage in the circumstances where the abortion is
necessary to save the life of the mother or if the pregnancy
is the result of an act of rape or incest (See section
2105(c)(1), 2105(c)(7), and 2110(a)(16))?
(2) Is it your contention that a state which covers
elective abortions under Medicaid and which opts to offer
``Secretary-approved coverage'' under S-CHIP must cover
elective abortions for teenage girls under its S-CHIP
program?
(3) In light of your letter, is it your contention that
abortion is no longer considered a ``medically necessary''
service under the Medicaid program (See section 4707(e)(1)?
(4) In what manner do you view abortion as ``appropriate
coverage for the population of targeted low-income children
proposed to be provided such coverage'' by Virginia or any
other state which submits an application for Secretary-
approved coverage (See section 2103(a)(4))?
Again, I request your immediate written response to the
questions above. Thank you in advance for your cooperation.
Sincerely,
Don Nickles,
Assistant Majority Leader.
____

Department of

Health and Human Services,

Washington, DC, October 14, 1998.
Hon. Don Nickles,
Assistant Majority leader, U.S. Senate, Washington, DC.
Dear Senator Nickles: Thank you for your most recent letter
and the opportunity to clarify our October 13, 1998 response
concerning coverage of abortion services under the Title XXI
State Children's Health Insurance Program (CHIP).
I would like to clarify my response to you concerning the
conditions under which I would approve CHIP benefit packages
for Title XXI non-Medicaid state programs (S-CHIP). In
general, our policy has been that a state must provide a
benefit package that is equal to, or better than, Benchmark
or Benchmark-Equivalent Coverage. In my letter to you
yesterday, I stated that we have limited the exercise of our
discretion under the Secretary-Approved Coverage option to
cases in which the benefits offered under a state's S-CHIP
program are the same as under its Medicaid plan. Indeed, we
decided as a matter of policy in devising our S-CHIP
implementation process that this approach provided an
important benefit option that states might not otherwise
have.
However, after asking staff to review our records
yesterday, it appears that in addition to Medicaid plans, we
may have considered as Secretary-Approved Coverage other
benefit packages. This occurred in instances in which a state
provided benefits in excess of the statutorily defined
Benchmarks. Apparently, there was discussion in the
Department that it might be desirable to use the Secretary-
Approved Coverage option for states that want to provide more
benefits than required by law without requiring them to
submit a formal actuarial estimate.
As a result of this review of our records and staff
deliberations, I have decided that as long as a state
proposed to provide benefits in excess of Benchmark Coverage,
states will not be required to cover permissible abortion
services under the Secretary-Approved Coverage option. We
have already informed you that states are free to exclude
coverage for permissible abortion services in their Benchmark
(provided a state's Benchmark plan does not cover abortions)
or Benchmark-Equivalent options.
I would like to address the specific questions you raised
in your October 13, 1998 letter.
(1) On the basis of your letter dated October 13, 1998, is
it the Department's view that the Hyde language contained in
the S-CHIP program does not require states to provide
abortion coverage in the circumstances where the abortion is
necessary to save the life of the mother or if the pregnancy
is the result of an act of rape or incest (See Section 2105
(c)(1), 2105 (c)(7), 2110 (a)(16))?
As discussed above, states are not required to provide
permissible abortion services under any of the three S-CHIP
program options. However, to the extent that a state chooses
a package that covers abortion services under the Benchmark
option, they must provide these services to the extent they
are allowed under the CHIP statute.
(2) Is it your contention that a state which covers
elective abortions under Medicaid and which opts to offer
``Secretary-approved coverage'' under S-CHIP must cover
elective abortions for teenage girls under its S-CHIP
program?
As discussed above, states are not required to cover
permissible abortion services in order to receive Secretary-
Approved Coverage. States do, however, have to offer at least
the scope of benefits provided in their Benchmark plan.
(3) In light of your letter, is it your contention that
abortion is no longer considered a ``medically necessary''
service under the Medicaid program (See section 4707(e)(1))?
We do not believe that Section 4707(e)(1) affects whether
abortion services are medically necessary services under
Medicaid. As a general matter, this section of the law
describes the intermediate sanction regime a state must put
in place in implementing the law. It does not affect the
scope of benefits required under a state plan. Specifically,
Section (e)(1)(A) permits states to provide for sanctions
against any Medicaid managed care organization contracting
with a state if that organization fails substantially to
provide medically necessary items and services under the law
or the organization's contract. Accordingly, if a managed
care entity has agreed by contract to provide those services
and does not do so, it may be sanctioned by operation of this
section of the law. Notwithstanding that provision, Section
(e)(1)(B) instructs that there shall not be any sanction
imposed on a managed care entity that has contracted with a
state and that fails or refuses to provide abortion services,
so long as the contract itself reflects no obligation to
provide such services. Moreover, the inclusion of these
provisions strongly indicates that abortion services are
medically necessary services under the Medicaid program,
otherwise an exception to the general rule would not have
been included.
(4) In what manner do you view abortion as ``appropriate
coverage for the population of targeted low-income children
proposed to be provided such coverage'' by Virginia or any
other state which submits an application for Secretary-
approved coverage (See Section 2103(a)(4))?
Abortion services may be covered under Section 2103(a)(4)
to the extent that a state chooses to include coverage for
permissible abortion services in its otherwise qualified
plan. Limited abortion services qualify as covered services
under Section 2110(a)(16) of the CHIP law.
I hope this information addresses your concerns. Please let
me know if you would like to discuss this matter further.
Sincerely,
Donna E. Shalala.
____

U.S. Senate, Office of Assistant Majority Leader,
Washington, DC, October 15, 1998.
Hon. Donnal E. Shalala,
Secretary, U.S. Department of Health and Human Services,
Washington, DC.
Dear Madam Secretary: Thank you for your letter of October
14. Chairman Bliley and I have analyzed your responses to the
questions posed in the October 13 letter and continue to have
grave concerns about the manner in which the Department
interprets the plain legislative language of Title XXI of the
Social Security Act. In particular, your most recent response
states, in part, that ``to the extent that a state chooses a
package that covers abortion services under the Benchmark
option, they must provide these services to the extent they
are allowed under the CHIP [sic] statute.'' (emphasis added)
This interpretation has no basis in the statutory language
of the State Children's Health Insurance Program (SCHIP).
Section 2103 defines the various options that states have in
crafting the benefits package offered through their SCHIP
plan. In every instance, states are given the full discretion
to establish the specific benefits to be offered to children
covered under the state's SCHIP plan. We call your attention
to the explicit use of the terms ``equivalent'' in Section
2103(a)(1) relating to Benchmark Coverage and Section
2103(a)(2) relating to Benchmark-Equivalent Coverage. We also
call your attention to the ability of states to ``modify''
the benefits package offered through Section 2103(a)(3), as
provided in 2103(d)(2).
We appreciate your recognition, as stated in your October
14 response, that ``states are not required to provide
permissible abortion services under any of the three S-CHIP
program options.'' We also appreciate your recognition, as
stated in the same letter, that states are not required to
provide abortion coverage under the Secretary-Approved
Coverage option (Section 2103(a)(4).
However, your continuing assertion that any requirement
exists in Title XXI of the Social Security Act compelling
states to

[[Page S12693]]

provide abortion coverage or services is unacceptable and
contrary to public law.
Once again, we request your immediate written response to
the concerns stated above. In addition, I invite your staff
to meet with our staff as soon as possible to explain the
legal basis for the interpretation presented to us in your
October 14 letter. Thank you in advance for your cooperation.
Sincerely,
Don Nickles,
Assistant Majority Leader.
____

Department of

Health and Human Services,

Washington, DC, October 15, 1998.
Hon. Don Nickles,
Assistant Majority Leader, U.S. Senate, Washington, DC.
Dear Senator Nickles: I wanted to provide further
information with respect to issues discussed in our recent
correspondence.
States are not required to provide coverage of abortion
services, including abortion services for which coverage is
permissible under Title XI of the Social Security Act, under
any of the S-CHIP benefit package options in section 2103. No
state will be denied approval of its S-CHIP plan because its
benefit package under section 2103 does not include coverage
of abortion services, including abortion services for which
coverage is permissible under Title XXI.
Thank you for your interest in this matter.
Sincerely,
Donna E. Shalala.

____________________