[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]





 
                    THE FISCAL YEAR 2017 HHS BUDGET

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 24, 2016

                               __________

                           Serial No. 114-118


      Printed for the use of the Committee on Energy and Commerce

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                     Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            G.K. BUTTERFIELD, North Carolina
MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILLY LONG, Missouri                 JOSEPH P. KENNEDY, III, 
RENEE L. ELLMERS, North Carolina         Massachusetts
LARRY BUCSHON, Indiana               TONY CARDENAS, California
SUSAN W. BROOKS, Indiana             FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     3
Hon. Kathy Castor, a Representative in Congress from the State of 
  Florida, opening statement.....................................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     6
    Prepared statement...........................................     7
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     8

                               Witnesses

Sylvia Mathews Burwell, Secretary, Department of Health and Human 
  Services.......................................................    10
    Prepared statement...........................................    12
    Answers to submitted questions...............................    73


                    THE FISCAL YEAR 2017 HHS BUDGET

                              ----------                              


                      WEDNESDAY, FEBRUARY 24, 2016

                  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 
room 2123 Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Barton, Guthrie, 
Whitfield, Shimkus, Murphy, Burgess, Blackburn, McMorris 
Rodgers, Lance, Griffith, Bilirakis, Long, Ellmers, Bucshon, 
Brooks, Collins, Upton (ex officio), Engel, Capps, Schakowsky, 
Butterfield, Castor, Sarbanes, Matsui, Schrader, Kennedy, 
Cardenas, and Pallone (ex officio).
    Staff present: Gary Andres, Staff Director; Mike 
Bloomquist, Deputy Staff Director; Leighton Brown, Press 
Assistant; Rebecca Card, Assistant Press Secretary; Karen 
Christian, General Counsel; Jerry Couri, Senior Environmental 
Policy Advisor; Jessica Donlon, Counsel, Oversight and 
Investigations; Paul Edattel, Chief Counsel, Health; David 
McCarthy, Chief Counsel, Environment and the Economy; Carly 
McWilliams, Professional Staff, Health; Katie Novaria, 
Professional Staff, Health; Tim Pataki, Member Services 
Director; James Paluskiewicz, Professional Staff, Health; 
Graham Pittman, Legislative Clerk, Health; Mark Ratner, Policy 
Advisor to the Chairman; Michelle Rosenberg, GAO Detailee, 
Health; Chris Santini, Policy Coordinator, Oversight and 
Investigations; Chris Sarley, Policy Coordinator, Environment 
and the Economy; Adrianna Simonelli, Legislative Associate, 
Health; Heidi Stirrup, Policy Coordinator, Health; John Stone, 
Counsel, Health; Sophie Trainor, Policy Advisor, Health; Josh 
Trent, Deputy Chief Counsel, Health; Christine Brennan, 
Minority Press Secretary; Jeff Carroll, Minority Staff 
Director; Waverly Gordon, Minority Professional Staff Member; 
Tiffany Guarascio, Minority Deputy Staff Director and Chief 
Health Advisor; Una Lee, Minority Chief Oversight Counsel; 
Rachel Pryor, Minority Health Policy Advisor; Tim Robinson, 
Minority Chief Counsel; Samantha Satchell, Minority Policy 
Analyst; Matt Schumacher, Minority Press Assistant; Andrew 
Souvall, Minority Director of Communications, Outreach and 
Member Services; Kimberlee Trzeciak, Minority Health Policy 
Advisor; and Arielle Woronoff, Minority Health Counsel.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts [presiding]. The subcommittee will come to order.
    This is a pretty busy day. A lot of members will be here 
today. I will have to run a tight gavel, so everyone can get an 
opportunity to speak today.
    The Chair will recognize himself for an opening statement.
    Today the Health Subcommittee will examine the President's 
budget for fiscal year 2017 for the Department of Health and 
Human Services. We are grateful the Secretary has agreed to 
appear before this subcommittee. Certainly there are a number 
of issues in the budget and at HHS that members will be 
interested in discussing.
    I appreciate the strong bipartisan record this committee 
has in working with Secretary Burwell, especially our work to 
solve the Medicare physician payment issue last year. Our 
committee has passed more bipartisan bills into law than any 
other committee in Congress, and we appreciate Secretary 
Burwell's partnership to help make that possible.
    However, as I reviewed the budget, I have to say I am 
disappointed. This budget does not balance. Ever. The CBO 
warned that under current law the deficit will balloon from 
$616 billion this year to $1.4 trillion by 2026. Medicare is on 
course to be insolvent and unworkable in the year 2026. Federal 
debt will soar from $14 trillion this year to about $24 
trillion by 2026.
    Economists warn us that our runaway federal health spending 
will eventually lead to an economic crisis, and drastic and 
disruptive cuts, higher taxes that harm workers and families, 
or some combination of all of these outcomes. I believe 
Congress and the administration have a moral responsibility and 
duty to solve the problems before they fail the millions of 
people who depend on them.
    Unfortunately, our long-term spending challenges have been 
worsened by changes to federal programs in recent years. 
Specifically, ObamaCare is over $2 trillion in new entitlement 
spending. Yesterday's Washington Post highlighted a new report 
from the HHS Office of Inspector General which examined HHS's 
mismanagement of Healthcare.Gov. As the report makes clear, 
there was more that failed beyond just a Web site.
    The OIG concluded, ``We found that HHS and CMS made many 
missteps throughout development and implementation that led to 
the poor launch. Most critical was the absence of clear 
leadership, which caused delays in decisionmaking, lack of 
clarity in project tasks, and the inability of CMS to recognize 
the magnitude of problems as the project deteriorated...CMS's 
organizational structure and culture also hampered progress.''
    Today a new report out from the GAO has new findings 
regarding mismanagement of the federal marketplace. The 
auditors find CMS is, quote ``passive'' in their approach to 
fraud prevention and has failed to resolve major 
inconsistencies in applications in 2014 and 2015. Because of 
re-enrollments and CMS's poor oversight, these problems are 
largely still ongoing.
    Time and time again, HHS seems to be ignoring or flouting 
the law. For example, one issue I continue to be concerned 
about is the matter of illegal actions taken by the California 
Health Department with respect to their unilateral action 
requiring all health plans to cover abortions. This is in 
direct violation of federal law under the Weldon amendment and 
a direct assault on conscience rights.
    As you know, individuals have been harmed since August 
22nd, 2014 and filed complaints with the HHS Office of Civil 
Rights. And I have pleaded with you, Madam Secretary, give this 
matter your immediate attention and redress. To my knowledge, 
no action or redress has been taken by your agency. So, we hope 
and expect to receive real answers today.
    Madam Secretary, thank you for being here. We look forward 
to your testimony.
    I yield the remainder of my time to Mr. Burgess.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    Today, the Health Subcommittee will examine the President's 
budget for fiscal year 2017 for the Department of Health and 
Human Services. We are grateful the Secretary has agreed to 
appear before this Subcommittee. Certainly there are a number 
of issues in the budget and at HHS that Members will be 
interested in discussing.
    I appreciate the strong bipartisan record this Committee 
has in working with Secretary Burwell, especially our work to 
solve the Medicare physician payment issue last year. Our 
committee has passed more bipartisan bills into law than any 
other committee in Congress. We appreciate Secretary Burwell's 
partnership to help make that possible.
    However, as I reviewed the budget, I have to say I am 
disappointed. This budget does not balance. Ever.
    The CBO warns that under current law, the deficit will 
balloon from $616 billion this year, to $1.4 trillion by 2026. 
Medicare is on course to be insolvent and unworkable in 2026. 
Federal debt will soar from $14 trillion this year to about $24 
trillion by 2026.
    Economists warn us that our runaway federal health spending 
will eventually lead to an economic crisis, drastic and 
disruptive cuts, higher taxes that harm workers and families--
or some combination of all of these outcomes.
    I believe Congress and the Administration have a moral 
responsibility and duty to solve the problems before they fail 
the millions of people who depend on them.
    Unfortunately, our long-term spending challenges have been 
worsened by changes to federal programs in recent years--
specifically Obamacare's over $2 trillion in new entitlement 
spending.
    Yesterday's Washington Post highlighted a new report from 
the HHS Office of Inspector General, which examined HHS' 
mismanagement of HealthCare.gov. As the report makes clear, 
there was more that failed beyond just a Web site. The OIG 
concluded:
    "[W]e found that HHS and CMS made many missteps throughout 
development and implementation that led to the poor launch. 
Most critical was the absence of clear leadership, which caused 
delays in decision-making, lack of clarity in project tasks, 
and the inability of CMS to recognize the magnitude of problems 
as the project deteriorated. CMS's organizational structure and 
culture also hampered progress.''
    Today, a new report out from the GAO has new findings 
regarding mismanagement of the Federal Marketplace. The 
auditors find CMS is ``passive'' in their approach to fraud 
prevention, and has failed to resolve major inconsistencies in 
applications in 2014 and 2015. Because of re-enrollments and 
CMS's poor oversight, these problems are largely still ongoing.
    And time and time again, HHS seems to be ignoring or 
flouting the law.
    For example, one issue I continue to be concerned about is 
the matter of illegal actions taken by the California Health 
Department with respect to their unilateral action requiring 
all health plans cover abortions. This is in direct violation 
of federal law under the Weldon amendment and a direct assault 
on conscience rights.
    As you know, individuals have been harmed since August 22, 
2014 and have filed complaints with the HHS Office of Civil 
Rights. I have pleaded with you to give this matter your 
immediate attention and redress. To my knowledge, no action or 
redress has been taken by your agency. We hope and expect to 
receive real answers today.
    Madam Secretary, thank you for being here and we look 
forward to your testimony.

    Mr. Burgess. Thank you, Mr. Chairman.
    Secretary, welcome and thank you for coming to our 
subcommittee.
    Look, the President and I are never going to agree on the 
Affordable Care Act, but I do remain committed to making real 
improvements to healthcare right now for the American people. 
Unfortunately, the administration has persistently refused to 
acknowledge the failures within the Affordable Care Act, making 
it near impossible for Congress to reduce harm to people going 
forward.
    The chairman already outlined the statements in the Office 
of Inspector General's report that recently became public. I 
hope that the agency will share with us the lessons learned 
from this exercise. Clearly, there will be other 
administrations; there will be other people in charge of the 
agency in the future.
    The lessons learned from the failures at healthcare.gov I 
think are important. I would like for you to share with us what 
the total cost of the Web site was. The published figure of 
$830 million I believe is way too low. I would like for you to 
share with us what the actual cost was. Were you able to recoup 
any of the costs from the product that was not delivered and 
was anybody paid a performance bonus for actually supplying a 
flawed product to the American people?
    I think these are questions that ongoing will need to be 
answered. We need to know what lessons your agency has learned 
from this process.
    Thank you, Mr. Chairman. I will yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    Now, standing in for Ranking Member Green is Representative 
Castor of Florida. The Chair recognizes her for 5 minutes for 
an opening statement.

  OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Ms. Castor. Well, thank you, Mr. Chairman.
    Good morning, Madam Secretary.
    You and the administration have crafted a budget that works 
for American families. It strengthens Medicare, extends the 
life of the Hospital Trust Fund, Medicare Part A, for 15 years. 
It makes vital investments in cancer research, Alzheimer's 
research, and in the NIH, and keeps those fabulous researchers 
across the country on the job, finding the treatments and cures 
of the future.
    I want to thank you for answering the call for help from 
communities and families across the country with more robust 
resources for mental healthcare and for the heroin prescription 
drug opioid epidemic. And you have done this at the same time 
while the overall budget reduces deficits by $2.9 trillion over 
the next 10 years, and that is on top of the $4 to $5 trillion 
deficit reduction that we have achieved together since 2010.
    I would like to encourage you during your testimony to 
discuss the progress of states that are taking care of their 
citizens through the expansion of health services under 
Medicaid. This is smart fiscal policy, and the majority of 
states have realized that. But it is difficult to reconcile 
that we have the majority of states that have done it and, 
then, some states that have not, including my home State of 
Florida, because that puts my citizens at a disadvantage. So, I 
want to thank you for offering hope to those citizens in those 
states that have yet to expand Medicaid.
    Back to mental health, this is directly related to our 
ability to serve our neighbors with mental health services 
because the most important reform we can bring to communities 
for mental health would be expansion of Medicaid in those 
states.
    But on your watch, for the first time ever, more than 90 
percent of Americans have health coverage, including 1.7 
million in Florida this year on healthcare.gov. The Medicare 
Advantage premium has declined since the ACA became law. In 
Florida, $1.3 trillion is being put back into the pockets of my 
neighbors through closing the donut hole under the ACA. And the 
growth in premiums for employee-sponsored health insurance has 
slowed down.
    But we have more work to do. We will look forward to 
hearing your testimony.
    At this time, I yield a minute to my good friend Mr. 
Kennedy of Massachusetts.
    Mr. Kennedy. Thank you, Congresswoman, for yielding.
    Madam Secretary, thank you for coming. Thank you. It is 
wonderful to see you again.
    Under your leadership, the Department of Health and Human 
Services confronts some of our nation's most stubborn and 
systemic challenges head-on. With the reforms to Medicaid 
outlined in the President's budget, we can enroll millions of 
vulnerable Americans who remain uninsured and risk losing a 
lifetime of savings due to a hospital bill.
    Expanding access to Medicaid is especially critical because 
the program's beneficiaries are twice as likely to face mental 
illness than the general population. But we can't limit our 
response to those enrolled in Medicaid. With an increase of 
$115 million for the mental health programs under SAMHSA, 
investments in community early intervention programs, and an 
end to the 190-day lifetime limit on inpatient psychiatric 
facilities, we can ensure millions of Americans receive the 
treatment they need and deserve.
    In the midst of an opiate epidemic that has had a 
devastating impact on the communities represented by everyone 
on this dais today, your request for a billion dollars to 
increase access and treatment should be quickly considered and 
approved by Congress.
    I also want to thank you and recognize your commitment to 
community health centers where the budget makes a sizeable 
investment, and also thank you and your staff for continuing to 
speak with our governor as we work on Medicaid waiver 
negotiations and our hospital system.
    I am looking forward to hearing you talk more about these 
projects in some detail and ask you to just let us know how we 
can be a partner in your work ahead.
    Thank you, and I yield back.
    Mr. Pitts. The Chair thanks the gentlelady and now 
recognizes the chairman of the committee, Mr. Upton, 5 minutes 
for an opening statement.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman.
    Secretary Burwell, welcome back to the committee. Although 
we do have policy differences, I appreciate the professionalism 
that you have brought to the job from day one. It is most 
appreciated. I know that you were in Michigan last week 
regarding the tragic Flint water crisis. I appreciated the call 
last Friday when you were leaving and I thank you for your 
attention and look forward to closely working together to 
ensure that we make it up to the residents of Flint for the 
many unacceptable failures that have occurred at all levels. 
And I really appreciate that.
    We have also enjoyed our partnership in 21st Century Cures. 
You and your team have been terrific during this 2-year effort, 
working closely and providing valuable insight, technical 
assistance, and guidance, as we developed a bill that achieved 
344 votes in the House. The momentum is building as the Senate 
now has taken real and bipartisan steps forward through their 
parallel innovation project. With a little more hard work and 
bipartisan cooperation, we are going to be able to get this 
done for patients across the country looking for hope for safer 
cures.
    And we are excited with President Obama tasking Vice 
President Biden to lead a moonshot effort to cure cancer. I 
know that you are part of that leadership team. Surely, we will 
bring a jolt of energy for this very important project, the 
goals of which are consistent with the bill passed by the House 
last summer. It is important to remember that time is a very 
precious resource, especially for countless patients across the 
country who can't wait for another task force. The clock is 
ticking. They need action and they need cures now.
    It is my belief, shared by Chairman Alexander, that the way 
for policy to be enacted through 21st Century Cures and the 
Senate's innovation project is by working together. We have 
done the hard, time-consuming work of listening, soliciting 
ideas, listening some more. Legwork is done and, as I 
mentioned, 344 votes in the House. The policies have been 
pressure-tested. We look forward to combining our efforts and 
the Vice President's best ideas into one unified bill to 
improve our healthcare innovation ecosystem. We have got a 
great opportunity that we know that we have to deliver.
    This hearing also gives us an opportunity to discuss the 
important work of putting our fiscal house in order. As 
astounding $1 trillion now flows through HHS. We have 
significant concerns that our budgetary path is on a dangerous 
trajectory towards disaster. Under this President's budget, the 
national debt will more than double than when the President 
took office. The projections cannot be ignored, especially as 
health and entitlement spending will be the main factor in 
driving additional debt on top of future generations. We can 
and must do better.
    And I yield the balance of time to Mrs. Blackburn.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    Secretary Burwell, welcome back to the committee. Although 
we do have our policy differences, the professionalism that you 
have brought to the job is appreciated. I know you were in 
Michigan last week regarding the tragic Flint water crisis. I 
thank you for your attention and look forward to closely 
working together to ensure we make it up to the residents of 
Flint for the many unacceptable failures that have occurred at 
all levels.
    We have also enjoyed our partnership in 21st Century Cures. 
You and your team have been terrific during this over 2-year 
effort, working closely and providing valuable insight and 
guidance as we developed a bill that achieved 344 votes in the 
House. The momentum is building as the Senate has taken real 
and bipartisan steps forward through their parallel Innovation 
project. With a little more hard work, and bipartisan 
cooperation, we will be able to get this done for patients 
across the country looking for hope for safer cures.
    We were excited with President Obama tasking Vice President 
Biden to lead a ``moonshot'' effort to cure cancer. The 
leadership of the vice president will surely bring a jolt of 
energy for this important project--the goals of which are 
consistent with the bill passed by the House last summer. It is 
important to remember that time is a precious resource, 
especially for countless patients across the country who can't 
wait for another task force. They need action. They need cures 
now.
    It is my belief, shared by Chairman Alexander, that the way 
for policy to be enacted is through the 21st Century Cures Act 
and the Senate's Innovation project. We've done the hard, time-
consuming work of listening, soliciting ideas, and listening 
some more. The legwork is done, and as I mentioned, with 344 
votes in the House, the policies have been pressure tested. We 
look forward to combining our efforts and the vice president's 
best ideas into one unified bill to improve our health care 
innovation ecosystem. We have an incredible opportunity--let's 
be sure that we deliver.
    This hearing also gives us an opportunity to discuss the 
important work of putting our fiscal house in order. An 
astounding $1 trillion now flows through HHS. We have 
significant concerns that our budgetary path is on a dangerous 
trajectory toward disaster. Under this budget, the national 
debt will more than double what it was when President Obama 
took office. The projections cannot be ignored, especially as 
health and entitlement spending will be the main factor in 
driving additional debt on top of future generations. We can 
and must do better.

    Mrs. Blackburn. Thank you, Mr. Chairman.
    Madam Secretary, we do thank you for being here.
    There are a couple of things that I will want to hit and 
hear from you, as you talk today. First of all, I think HHS 
needs to look at a regulatory model that is going to enable 
innovators. Many of those innovators and healthcare informatics 
are in Tennessee. What they find many times is lack of 
certainty and clarity. So, let's discuss that. Also, 
transparency as we work with these innovators. They are looking 
at these new delivery systems.
    Also, I know you are working on RAC reforms. We will want 
to discuss that, the RAC audit process, and look at whether or 
not a shot clock would be helpful in that.
    I appreciate your being here to give us insight into what 
the trends are with your budget and what your expectations are 
for reducing the size of that budget with your outlays.
    And so, thank you for being here, and I yield back.
    Mr. Pitts. The Chair thanks the gentlelady.
    I now recognize the ranking member of the full committee, 
Mr. Pallone, 5 minutes for an 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.
    Thank you, Secretary Burwell, for joining us this morning.
    Today we are meeting to discuss the President's fiscal year 
2017 Health and Human Services budget proposal. As is often 
said, budgets are about priorities, and I am pleased to see 
that the President's proposed budget aligns quite well with 
what should be the top priority of this committee. That is 
ensuring access to high-quality, affordable healthcare for all 
Americans.
    First and foremost, the budget recognizes the simple truth 
the Affordable Care Act is achieving its goals. As a result of 
the ACA, 18 million Americans have gained access to both high-
quality health insurance and the peace of mind that comes with 
maintaining coverage. Of course, more could be done, which is 
why I am pleased the President proposed additional incentives 
for the remaining states that have yet to expand Medicaid.
    Medicaid expansion has been life-changing for the millions 
of Americans that have been able to access health coverage 
through Medicaid, many for the first time in their lives. In 
the 19 states that have yet to expand Medicaid, more than 4 
million people could gain coverage. States could realize major 
savings in other parts of their budgets, and over $4 billion in 
uncompensated care costs could be avoided. Democrats have 
already introduced legislation to put the President's proposal 
into action, and Congress should act swiftly to enact that bill 
into law.
    Beyond building upon known successes, the budget also 
directs funding into known areas of need. To put it simply, our 
nation's biomedical research budget is simply inadequate. As a 
committee, we have already recognized and acted upon this fact 
when we passed the bipartisan 21st Century Cures Act. In that 
same spirit, I applaud the proposed $755 million allocated for 
NIH and FDA through the Vice President's National Cancer 
Moonshot Initiative. Over 1.6 million Americans will be 
diagnosed with cancer this year, and it is our responsibility 
to ensure that all Americans have the best shot at a cure.
    Finally, the President's budget recognizes the devastating 
effects of the heroin and opioid abuse crisis. Sadly, my home 
State of New Jersey is not immune from this epidemic. In fact, 
if every one of our New Jersey residents addicted to heroin or 
prescription opioids lived in the same city, it would hold a 
population larger than that of New Jersey's largest city.
    That is why I have introduced a comprehensive bill, H.R. 
4396, The Heroin and Prescription Drug Abuse Prevention and 
Reduction Act, to address heroin and prescription drug abuse. I 
would like to thank you for your strong leadership on this 
issue, Madam Secretary, and I urge the committee to act quickly 
to put a halt to this public health emergency.
    Finally, just as a side note, Secretary Burwell, I know I 
will not have enough time to discuss this issue today, but I 
would like to have a followup conversation with you about the 
Indian Health Service. Specifically, I would like to address 
concerns that have been raised about the quality of care 
provided by hospitals in the Great Plains area as well as to 
get an update on the continued implementation of the Indian 
Health Care Improvement Act, which, of course, was included in 
the ACA.
    But I have 2 minutes left. I would like split that between 
Representative Matsui and Representative DeGette, and yield one 
minute now to Representative Matsui.
    Ms. Matsui. Thank you so much.
    Secretary Burwell, welcome.
    This budget definitely is something that makes critical 
investments in the long-term health and well-being of America's 
families, from supporting the expansion of Medicaid of millions 
of low-income Americans, investing in medical research, to 
bolstering the behavioral health workforce, so that patients 
with mental illnesses have someplace to turn. I am especially 
pleased with the incentives you put in for community behavioral 
health centers.
    The Affordable Care Act has improved millions of Americans' 
lives. Thanks to the ACA, nearly 18 million previously 
uninsured Americans no longer have to worry that they are one 
illness away from financial ruin.
    I am very pleased that this HHS's budget makes critical 
investments to ensure the continued success of the Affordable 
Care Act, and this budget is intertwined in the fabric of our 
healthcare system. It is time that we move forward with 
implementing all aspects of it.
    Thank you very much, and I yield to my colleague.
    Mr. Pallone. Ms. DeGette.
    Ms. DeGette. Thank you very much for yielding, Mr. Pallone.
    I just want to underscore something that both Chairman 
Upton and you talked about, and that is the importance of the 
21st Century Cures Act, which passed this committee 
unanimously. To make the investments that we talk about in that 
bill effective, we need to provide leaders at the NIH the 
ability to make decisions with some kind of freedom from the 
back-and-forth budgeting and appropriations process. After all, 
it is that process that, coupled with damaging cuts from the 
sequestration, set our medical efforts back a long way.
    And that is why mandatory funding is created and the 21st 
Century Cures Act Innovation Fund is so important. For too 
long, budgetary pressures have kept promising research projects 
from being carried out. With the stability of the Innovation 
Fund, researchers could submit proposals that would not 
otherwise be guaranteed the funding needed to complete the 
science. That was the approach that the House overwhelmingly 
supported and that is the approach that we are trying to work 
on in the other body.
    So, as much as you can do, Madam Secretary, that really 
helps us out in our efforts. Thank you very much.
    And I thank you, Mr. Chairman, for the comity in allowing 
me to sit in on this subcommittee.
    Mr. Pitts. The Chair thanks the gentlelady.
    That concludes the opening statements. As usual, all 
members' written opening statements will be made a part of the 
record.
    We will now go to our panel. I am happy to welcome the 
Honorable Sylvia Mathews Burwell, Secretary of the Department 
of Health and Human Services, as our witness today.
    Thank you for coming. We have your testimony. The written 
testimony will be made part of the record. But you will be 
given 5 minutes to summarize.
    So, at this point, the Chair recognizes Secretary Burwell, 
5 minutes for her summary.

   STATEMENT OF HONORABLE SYLVIA MATHEWS BURWELL, SECRETARY, 
            DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Secretary Burwell. Thank you. Chairman Pitts, Chairman 
Upton, Ranking Member Pallone, and Representative Castor, 
Members of the Committee, I want to thank you all for the 
opportunity to come and discuss the President's budget here 
today.
    As many of you all know, I believe that all of us actually 
share common interests and that we can find common ground. In 
the last legislative session, as was mentioned, this committee 
embraced that spirit of bipartisan leadership when it took the 
historic steps to pass the Medicare Access and CHIP 
Reauthorization Act of 2015. And thank you very much for this 
leadership on this issue.
    The budget before you today is my final budget and the 
final budget of this administration. It makes critical 
investments to protect the health and well-being of the 
American people. It helps ensure that we can do our job to keep 
people safe and healthy, accelerate our progress in scientific 
research and medical innovation, and expands and strengthens 
our healthcare system. And it helps us continue to be 
responsible stewards of the taxpayers' dollars.
    For HHS, the budget proposed is $82.8 billion in 
discretionary budget authority, and our request recognizes the 
constraints in our budget environment and includes targeted 
reforms to Medicare, Medicaid, and other programs. Over the 
next 10 years, these reforms to Medicare would result in net 
savings of $419 billion in Medicare.
    This budget invests in the safety and health of all 
Americans. Let me start with an issue we have been working on 
here at home and abroad. As we work to stop the spread of Zika, 
the administration is requesting $1.9 billion in emergency 
funding, including $1.5 billion for HHS to enhance our ongoing 
efforts, both domestically and internationally. We appreciate 
the Congress' consideration of this important request as we 
implement the essential strategies to prevent, detect, and 
respond to this virus.
    I know the rise in opioid misuse and abuse and overdose has 
affected many of those in your districts. Every day in America 
78 people die opioid-related deaths. And that is why this 
budget proposes significant funding, over $1 billion, to combat 
the opioid epidemic.
    Today too many of our nation's children and adults with 
diagnosable mental health disorders don't receive the treatment 
that they need. So, this budget proposes $780 million in new 
mandatory and discretionary resources over the next two years. 
This request will ensure that the behavioral healthcare system 
works for everyone. It will help expand behavioral health 
services and workforce capacity, so that more people can have 
access to care. And it will help individuals with serious 
mental illness get engaged and get the care that they need.
    While we invest in the safety and health of Americans 
today, we must also relentlessly push forward the frontiers of 
science and medicine, and I know this committee is deeply 
involved and engaged in that issue.
    This budget invests in the Vice President's Cancer 
Initiative. It is a vital investment for our future. Each 1 
percent drop in cancer death rates saves our economy 
approximately $500 billion, not to mention the comfort and 
security it can bring to so many families.
    Today we are entering a new era of medical science with the 
proposed increases of $107 million in the Precision Medicine 
Initiative and the $45 million additional for the 
administration's BRAIN Initiative.
    But, for Americans to benefit from these breakthroughs in 
medical science, we need to ensure that Americans have access 
to affordable, quality care. The Affordable Care Act has helped 
us make historic progress, and today more than 90 percent of 
Americans have health coverage, the first time in our nation's 
history.
    This budget seeks to build on that progress by improving 
the quality of care that patients receive, spending our dollars 
more wisely and putting an engaged and empowered consumer at 
the center of care. By advancing and improving the way we pay 
doctors, coordinate care, and use health data and information, 
we are building a better, smarter, and healthier healthcare 
system.
    Finally, I just want to thank the employees of HHS. In the 
past year, they helped us with the Ebola outbreak in West 
Africa. They have advanced the frontiers of medical science. 
They have helped millions of Americans enroll in health 
coverage, and they have done the quiet day-to-day work that 
makes our country stronger. I am honored to be a part of the 
team. As members of this committee I hope know, I am personally 
committed to working closely with you and your staff to find 
common ground, so we can deliver for the American people.
    With that, I look forward to your questions. Thank you.
    [The prepared statement of Secretary Burwell follows:]
   
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
    
    Mr. Pitts. Thank you, Madam Secretary.
    I will begin the questioning and recognize myself for 5 
minutes for that purpose.
    Secretary Burwell, on February 12th, the administration 
announced that they would be using billions of taxpayer dollars 
to make payments to insurance companies under the ObamaCare 
Reinsurance Program. There is a quote on the screen there from 
the ACA. It says, ``Notwithstanding the preceding sentence, $2 
billion for 2014, $2 billion for 2015, $1 billion for 2016 
shall be deposited into the General Fund of the Treasury of the 
United States and may not be used for the Reinsurance 
Program.''
    So, the announcement that the administration made 
represents an illegal wealth transfer from hard-working 
taxpayers to insurance, and this law is very clear, $5 billion 
of reinsurance fees must be returned to the taxpayers. As you 
can see, Section 1341 of the ACA states that this $5 billion 
``shall be deposited'' into the Treasury. And if that wasn't 
clear enough, the law further states on down that these 
billions of taxpayer dollars ``may not be used for the 
Reinsurance Program.'' It seems clear. Yet, CMS to date has 
diverted $3.5 billion from the Treasury to health insurance 
companies, effectively bailing out insurance companies with 
taxpayer dollars.
    So, my question to you, Madam Secretary, is this: has any 
HHS official or any other administration official looked at the 
legality of these payments? Is there any legal memorandum or 
other analysis regarding the legality of these payments to 
insurers, and will you produce any such memorandum for the 
committee, if so?
    Secretary Burwell. So, the Reinsurance Program is part of 
three different programs that are about making sure that we 
have downward pressure on costs for individuals in the health 
insurance system. That is downward pressure on premiums.
    This particular program is a limited program for 3 years, 
and that is all. Of the three programs, one extends, which is 
the Risk Adjustment Program. This one, the Reinsurance Program, 
does not.
    The Reinsurance Program, as I said, was put in place so 
that two things would happen for people entering the new 
market. In a new marketplace where they didn't know, you didn't 
want people not coming in and offering competition for downward 
price pressure because they feared that they would get people 
who are expensive.
    And then, in addition to that, it puts downward pressure, 
so that when you do get people that are expensive, you know in 
these first years, as you are understanding your book of 
business and doing your analysis to be able price correctly, 
that you have that opportunity.
    So, in making any decisions about these issues, we believe 
we do have the statutory authority with regard to this issue. 
In making the decisions--and this gets to a point that I think 
Ms. Blackburn raised in her opening comments--the issues of 
making sure we are clear about lessons learned. One of the most 
important lessons, customer at the center. The consumer or the 
citizen is what we have tried to put at the center, whether 
that is in the decisions of how we have done the technology or 
how we make decisions about ensuring that those dollars 
actually went to the place where they would most help the 
consumer with regard to downward price pressure.
    It is our belief we have that authority. If it would be 
helpful, we can have staff come and brief in terms of why we 
believe we have those authorities.
    Mr. Pitts. Do you have a legal memorandum to that effect?
    Secretary Burwell. With regard to the question of a legal 
memorandum, this is an issue, actually, we put out our guidance 
for public comment. We put out the guidance that articulated 
that we would do this.
    Mr. Pitts. OK.
    Secretary Burwell. When we put out that guidance, we 
actually opened up for public comment specifically.
    Mr. Pitts. All right.
    Secretary Burwell. And we can go through what public 
comments that we received with regard to that.
    Mr. Pitts. We have a legal memorandum. I will ask staff to 
deliver it. Before you should be a memo from the Congressional 
Research Service on this very issue. On page 8, highlighted, 
before you, the memo states that your action to divert funds 
from the Treasury ``in conclusion, would appear to conflict 
with the plain reading of the law.''
    So, my question is, CRS has concluded that your action to 
divert billions to insurance companies appears to be unlawful. 
Did your Department receive any pressure from insurance 
companies to divert billions from taxpayers to pay off 
insurers? Did former CMS Administrator Marilyn Tavenner, now 
representing the insurance industry at AHIP, or other insurance 
company executives or officials ever pressure you or other 
Department officials on the reinsurance issue?
    Secretary Burwell. Mr. Pitts, I would be happy to take a 
look. I have not seen this document that was just handed to me. 
We will be happy to take a look----
    Mr. Pitts. Page 8.
    Secretary Burwell [continuing]. At that document and get 
back.
    We do believe we have the authorities. As I said, I think I 
have given you the context and the approach we take to making 
these decisions. Since I have come to HHS, it is one of the key 
things. One of the key things that I started out with, with the 
whole team, is consumer at the center. As we make decisions, 
what we try to do is make those decisions by putting that 
customer and their needs, whether that is, as I said, in Web 
site decisions, in trying to make it easier to use, or with 
regard to matters like this in terms of where those funds go, 
so that we create that downward pressure as much as possible 
within statute to put downward pressure on premiums, instead of 
upward pressure on premiums.
    Mr. Pitts. The Chair thanks the gentlelady.
    Ms. Castor. Mr. Chairman, before you finish, can you 
identify the source of that slide? Because, as we know, in 
other congressional hearings in the past there has been a 
little funny business on where those slides come from.
    Mr. Pitts. That is a direct quote from the Affordable Care 
Act, from the statute. That is from the statute.
    My time has expired. The Chair now recognizes the 
gentlelady, Ms. Castor----
    Ms. Castor. Did you have a statutory cite on that? Because 
it didn't appear to be a statutory----
    Mr. Pitts. Yes, I cited it. It is Section 1341.
    The Chair now recognizes the lady from Florida for 5 
minutes for her questions.
    Ms. Castor. Great. Thank you very much.
    Madam Secretary, I would like to ask you to give us an 
update on Medicaid expansion across the country.
    But, before you do that, I want everyone to be aware that a 
new bill was just dropped last night by Mr. Green, The 
Incentivizing Medicaid Expansion Act. It already has 15 
cosponsors, including myself, Mr. Tonko, Mr. Butterfield, Ms. 
DeGette, Ms. Matsui, Mr. Pallone, Mr. Kennedy, Mr. Lujan, and 
others. It mirrors the very smart provision in the budget that 
provides a new incentive to the states that have not expanded 
Medicaid. Because, as I said in my opening, it simply is 
completely unfair that some citizens have the ability to seek 
Medicare care under the Medicaid expansion in some states and, 
because of politics in others, they don't.
    So, we know what the Supreme Court said. It is not 
mandatory, but it is very important that we continue the 
incentive because it is smart fiscal policy. I know in my State 
we would save a lot of money, we would create jobs, and we 
would take care of our neighbors if the cadre that is control 
of the State government right now would listen to the people 
and expand Medicaid.
    But give us an update on how it is going and what the 
source of your incentive under the budget was for those states.
    Secretary Burwell. We know right now 30 states plus the 
District of Columbia have done the expansions. The information 
that we are now receiving in terms of those expansion states, 
whether that is the benefit to individuals, which we are seeing 
many more people doing adherence in terms of those who have 
medical conditions going, taking their medication, and those 
sorts of things, because of the expansion.
    So, the benefit to the individual is both a health benefit 
as well as a financial benefit. But we also know that the 
benefit to states is something that we are seeing, and that 
conversation is going on all over the country, whether that is 
in Kansas or the legislature in Maine, in terms of proposals to 
go forward to try to have Medicaid expansion.
    A big part of it is the benefit. We know that in the State 
of Kentucky the estimates are that there will be 40,000 more 
jobs by 2021 and $30 billion to the State in terms of money 
that will flow into the State.
    I think those benefits are already starting to be seen in 
states where what we are seeing in terms of rural hospital 
closures, an issue that I think many of us are concerned about, 
is that more of those closures are occurring in non-expansion 
states.
    The other part of this I think is the issue of 
uncompensated care. The estimates are, since the beginning of 
the Medicaid expansion and the coverage expansion that has 
resulted in the 90-percent coverage, that we estimate that 
there have been about $7.8 billion in a reduction in 
uncompensated care. Those reductions are not spread evenly; 68 
percent of that is in states that have expanded. So, both about 
the individual in terms of their financial and health well-
being, but also in terms of the economics both of the state and 
the community.
    We believe this proposal is a proposal that supports 
governors' desires. I spent a lot of time just last weekend, 
spend time all weekend, Friday, Saturday, Sunday, and Monday, 
with the governors that were here from the National Governors 
Association. These are important conversations that we are 
having with them about the economic needs in their state.
    Ms. Castor. Well, over 50 years ago, when the Congress 
first adopted Medicaid to provide that lifeline for children 
and our older neighbors, all states didn't jump in right at 
first, but eventually, over time, didn't they all join the 
Medicaid world?
    Secretary Burwell. They do, and I think because of the 
benefits this will provide and a number of issues we will talk 
about, behavioral health is one I am sure we will spend time on 
in this committee. We know that that Medicaid expansion will 
make a difference in terms of these behavioral health issues as 
well.
    Ms. Castor. Thanks.
    And one other issue, there is a lot of bipartisan interest 
in Congress to address graduate medical education. If we can 
fix the doc fix, I know we can make progress on graduate 
medical education. We know we have a looming doctor shortage. 
We know that, since 1997, there has been a cap and it has been 
static where residency slots exist across the country.
    But I think there is this newfound momentum, bipartisan, in 
the Congress to do some creative things, but we will need your 
help. Most folks don't know that residency positions are paid 
for by Medicare. I think we can stretch that Medicare dollar by 
creating innovative partnerships with health providers and 
hospitals across the country. There is legislation to do so. 
Sean Cavanaugh came over and talked about it. He said this 
could be an area to take that Medicare dollar, expand it, and 
provide the doctors we need in the areas we need in the future.
    So, can you commit to doing that during your remaining 
time?
    Secretary Burwell. I hope you see our GME policy for 
children's GME. It responds to many of the concerns that were 
expressed to us last year in terms of the proposal we have now. 
So, we look forward to working on these issues.
    Mr. Pitts. The gentlelady's time expired, and the Chair now 
recognizes the chairman of the full committee, Mr. Upton, 5 
minutes for questions.
    Mr. Upton. Again, thank you for being with us this morning.
    I really want to focus on two things: Cures and Flint. Let 
me ask you first about cures. When we get about halfway through 
the time, I hope not to be rude, but I want to make sure that 
we cover both.
    We have worked so closely on this. Again, I thank your 
staff for the technical assistance, particularly on precision 
medicine, which we included in the bill, which, as Ms. DeGette 
said, passed the committee 51-to-nothing.
    I know that you are a part of the Vice President's Task 
Force under the Executive order for the National Cancer 
Moonshot. You have had at least one meeting, maybe a couple.
    Mr. Pallone and myself and Ms. DeGette, as well as the 
Senators, have been working with the Vice President's Office. 
We are hoping to sit down next week formally to see exactly 
where we are.
    But what are some of the ideas, in addition to what we have 
in Cures, that you think that we might be able to incorporate? 
Our idea, of course, is to take the House-passed bill already. 
The Senate has begun the markup stage in the last 2 weeks, and 
they are looking at doing a series of bills which are all 
bipartisan at this point, intend to be so, Mr. Alexander and 
Ms. Murray, and then, to look at injecting the Cancer 
Initiative as part of that process, go to conference, and 
accept all the goods parts, which is, in essence, the whole 
thing now.
    But what additional ideas are you all thinking about as 
part of that initiative as we begin to move forward?
    Secretary Burwell. First, thank you for your leadership and 
the leadership of other members of this committee in the 21st 
Century Cures space, the PMI space, and now, this space as 
well.
    We are excited about working in that space. A couple of the 
things that I would be specific about in terms of places where 
I think we can build on the work that you all were already 
doing in your bill are some of the key areas we want to do 
investments in. Some of those have to do with immunology in 
terms of advancing that science, where we know that people's 
own immune systems are some of the best ways that we can 
advance the ability to treat cancer, as well as it is good 
overlap with some of the proposals that we are thinking about 
in the cancer space related to genetics. That overlaps very 
directly with your PMI work.
    I would also mention--and I am sure you will have the 
conversation with the Vice President, and I always welcome it, 
too--as we think about making sure that FDA, I think you know 
we have suggested that FDA actually have a particular expertise 
and develop a part of FDA that is cancer- and oncology-focused. 
I think we think that is an important addition to our work.
    And so, those are some of the specifics of what we do. We 
also look forward to your ideas about how we can expand access 
to trials. That is something I think we want to have those 
conversations with you about and, as you reflected, before we 
get to the end of the process, have those conversations 
earlier.
    Mr. Upton. Well, that is great, and we look forward to 
meeting with the new FDA Director. I don't know if he was 
formally confirmed yesterday. I think he has been confirmed, 
but he has not been sworn in yet.
    Secretary Burwell. He will, hopefully, be today at noon or 
1 o'clock.
    Mr. Upton. We look forward to that.
    Let me just switch now to Flint. Again, your office has 
been most helpful. Dr. Laurie has had very good reviews. We 
have dispatched to Michigan over the last number of weeks. Our 
Michigan delegation, on a bipartisan basis, is meeting with her 
today. I know that you were there last week.
    I talked to our governor earlier this week specifically 
about this, and I know that he has got a number of waiver 
requests that are in. CHIP expansion for pregnant women and 
children up to the age of 21, increased Medicaid eligibility 
for lead-abatement activities, a number of things.
    Can you tell me where you all think you are in terms of the 
requests that Michigan has put forward?
    Secretary Burwell. As I articulated with the governor and 
when I was in Flint, I think we will be able to approve an 
expansion of Medicaid that will be for pregnant women and 
children. That will be a major expansion. It will also include 
something that is pretty important, which is comprehensive 
targeted approaches to individual management. So that when we 
understand that a child has had a certain level of exposure, 
that we make sure that they receive the comprehensive services 
that they do. That is another part of the waiver conversation. 
So, my expectation is that we will be able to do most of what 
is in that waiver and that we will get that done quickly.
    Mr. Upton. Knowing that you were there last week, the water 
is still unsafe to drink, is that correct?
    Secretary Burwell. With regard to the water, at this point 
people should either use the bottled water or filters. But, 
once you have a filter that is appropriately installed and you 
do the directions in terms of the changing and the cleaning of 
your filter that you need to do, that water should be safe. If 
you want it tested, though, call 211. Anyone should just call 
211 to make sure, if that is what you want for comfort. If you 
are a pregnant woman or if you are a child under 6, we 
recommend, out of an abundance of caution, use the bottles. 
But, otherwise, filters applied, and those filters are being 
tested. EPA continues to test regularly.
    Mr. Upton. Thank you. Yield back.
    Mr. Pitts. The chairman yields back. I now recognize the 
ranking member of the full committee, Mr. Pallone, 5 minutes 
for questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to ask Secretary Burwell, in your testimony you 
noted that part of the goal of the budget is to build upon the 
successes of the Affordable Care Act, and the latest round of 
open enrollment just recently ended. Can you tell us more about 
how this open enrollment has gone, including how many people 
signed up for health insurance, how many were eligible for tax 
credits to make insurance more affordable?
    Secretary Burwell. With regard to this open enrollment, 
12.7 million Americans enrolled in this open enrollment. There 
are some other things that I think are important about the open 
enrollment that get to some of the broader issues that I am 
sure we are going to discuss.
    We know that, of those folks, there were 4 million new 
people that came in. Of the 4 million new, 60 percent of them 
signed up for coverage for January 1st. Why is that important? 
It says it is a product that they want and they want to start 
at the beginning of the year. It is also important because, 
from an insurance company or an issuer's perspective, you want 
them in for the full year in terms of downward pressure, again, 
on price.
    The other thing that happened in this open enrollment, in 
addition to that 12.7, is when you look at the people that were 
in before--so, I talked about the new, but the other folks--70 
percent of the folks who had been enrolled last year and came 
back and are re-enrolled actually took some action. They came 
in, updated their information, or they shopped. This is an 
engaged, empowered, educated consumer making choices.
    If I asked in a setting where there is employer-based 
coverage, those numbers generally don't even ever get above 10 
percent in terms of the number of people who engage in a re-
enrollment process. So, it is an engaged consumer. It is a 
consumer that is seeking that produce. And so, those are some 
of the highlights of what we have seen in this year's open 
enrollment.
    Mr. Pallone. OK. Thanks.
    I know that the gentlelady from Florida mentioned Medicaid 
expansion and the President has proposed these additional 
incentives for states to expand Medicaid. Could you describe 
the benefits that Medicaid expansion, that the states are 
experiencing and why it is so important that the remaining 19 
states join them in moving forward?
    Secretary Burwell. So, as I mentioned, it is the advantage 
and the benefit to the individual. I am sure you all meet folks 
every day who it makes a difference in terms of their ability 
to get the health coverage they need, whether that is the 
preventative services they need to prevent other things or when 
they have something going wrong, their ability to treat those. 
And so, that is the individual.
    But the economic benefits of this and the other benefits we 
have seen, that the number of people in the country now who are 
struggling with making their healthcare payments has gone down 
as a nation. We have seen The New England Journal of Medicine 
most recently put out a study saying that the changes through 
Medicaid expansion are affecting payer mix for hospitals and 
making a difference to them on the ground.
    And so, it is both about the individual, the communities, 
and the state, as we think about those benefits.
    Mr. Pallone. Then, lastly, I wanted to ask about the 
proposals in the President's budget to address the opioid abuse 
and overdose crisis. The President's 2017 budget requests a 
billion in new mandatory funding over two years to expand 
access to treatment for prescription drugs and heroin use. Can 
you just walk us through this funding request? Why is this 
investment necessary? Why is our current treatment capacity 
insufficient? Why is it important that the billion dollars be 
provided in the form of mandatory funding over the two years, 
and how is this going to be allocated?
    Secretary Burwell. With regard to the money that we have 
asked for, it is money to support an evidence-based strategy 
that we have talked about, and let me just hit those points 
because that is where the money will go.
    The first area is in the area of prescribing. We know that 
part of what has contributed to the issue of the opioid 
epidemic is overprescribing. And so, it is money to support the 
efforts of new guidelines that will come out from CDC and 
making sure that those guidelines are actually used, learned, 
and applied.
    The second area is in the area of medication-assisted 
treatment. This is the space where the vast majority of this 
money goes. It goes to that and it will go to communities and 
states. This is money that will not be used at HHS, but will go 
to communities and states.
    This is part of what we know. Behavioral health is 
something that has been a local issue for so many years. It is 
paid for mainly at the state and local level. And so, making 
sure that communities can have the access.
    Right now, I was told 2 weeks ago that in 85 percent of the 
counties, rural counties, in this country that their ability to 
have behavioral health providers and access is quite limited. 
And so, that money, and that is the vast majority of the money 
in the budget.
    The last area is in the area of Naloxone or Narcan. That 
is, sadly, we know that in our communities people are 
overdosing. And so, to prevent them from dying, you apply 
Naloxone or Narcan. There will be money to go to the 
communities to get that access to that drug. So, in the last-
case scenario where we have someone who has overdosed, we can 
at least have first responders and community members that can 
save lives.
    Mr. Pallone. Thank you so much.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the Chair emeritus, Mr. Barton, 5 minutes 
for questions.
    Mr. Barton. Thank you, Mr. Chairman.
    Before I ask my questions, I want to file a mild complaint. 
The Secretary called me on my cell phone the other day and was 
very charming and disarming. It makes it very difficult to ask 
her tough questions when she is so polite and receptive to my 
input. So, we may want to consider adopting a rule that Cabinet 
Secretaries, at least of the opposition party of the majority, 
cannot do that.
    [Laughter.]
    So, I just want to put that on the record.
    Mr. Pitts. We will take it under advisement.
    Mr. Barton. All right.
    Madam Secretary, it is always a delight to have you come 
before the committee and answer questions that are usually not 
at all related to the budget which you are supposed to be 
prepared to answer. I have got a difficult question and an easy 
question. Which do you want first?
    Secretary Burwell. Difficult.
    Mr. Barton. The difficult question? I am surprised at that.
    Secretary Burwell. I think you know me.
    Mr. Barton. There are many of us that are very concerned 
about the issue of harvesting and selling what you could either 
call body baby parts or you can call it fetal tissue, whichever 
term you choose to use. I am very concerned about that, not 
opposed to family planning, not opposed to funding women's 
health issues at all.
    My staff has done some research and found out that the last 
time the issue of fetal tissue research was studied was during 
the Reagan administration. There was a special commission 
appointed by the President that did a study. That is over 30 
years ago. There have been tremendous changes in medical 
practice and medical research since that time.
    The NIH is not currently funding such research internally, 
but externally they have supported about $76 million in such 
areas of research outside the NIH.
    Would you support a new commission to take a look at this 
issue, so that, regardless of which side you are on or the 
politics, we could at least know what the facts are?
    Secretary Burwell. With regard to the issue, I agree with 
you that this is an issue of great emotion and focus on 
different sides of the issue, and I respect that there are 
differing opinions on the issue.
    With regard to the question of the use of this tissue as 
part of our research that we do, I think in terms of the basics 
of the question of the value of that research, we continue to 
see--and whether it is the fact that the measles vaccine, the 
mumps vaccine, hepatitis A are all products that have derived 
and come out of this research, to the fact that some of this 
research has helped us move in terms of the research that was 
done for the Ebola vaccine. And so, for us, the question of the 
research, when done appropriately and in accordance with the 
laws and the statutes, and no valuable consideration, are 
things we take extremely seriously.
    Mr. Barton. But would you support a new commission to 
review the issue?
    Secretary Burwell. We would welcome the opportunity to have 
the conversation. I think the question is to understand which 
issue. Because I think at its heart is the question of the 
value of this research and the question, I think, in terms of 
the guidelines that are put in, which are very strict, are 
there issues or problems with that? So, we would welcome the 
opportunity to understand more fully what you think are the 
issues around this that we would----
    Mr. Barton. Well, the gentlelady next to me on my right, 
Mrs. Blackburn, is heading up a select committee that I believe 
is going to be looking into this.
    Secretary Burwell. And I think we have responded, both the 
Department and NIH, as an operating division, to your request, 
Ms. Blackburn.
    Mr. Barton. Well, here is my easier question: the majority 
of this committee has sponsored a piece of legislation that we 
called the ACE Kids Act. It would change federal policy to 
create a medical home for families that have special needs 
children. It would allow there to be an anchor hospital that 
would, then, create a network. So that, if you had a child who 
was a special needs disadvantaged child with multiple medical 
conditions, they could come into the network and there would be 
a single home. We have a majority of the committee and we have 
almost a majority of the House of Representatives as 
cosponsors.
    Has your office taken a look at that legislation and, if 
so, what is your position on it?
    Secretary Burwell. We welcome the leadership that you and 
others have provided in this area of complex cases. We are 
continuing to work right now with our administrative 
authorities to work with states in order to get the kind of 
care and service that you are talking about for parents and 
their children. And so, we want to continue to work on that. We 
have a proposal in our budget that extends that. Because one of 
the things is, when some of the states do this, it carries over 
not for just children, but for larger populations. Sometimes 
that is why states are hesitating.
    So, we look forward to working in terms of, as I said, we 
have a proposal in our budget, would like to have the 
conversation about--I am not sure if your legislation includes 
that part of it or not.
    Mr. Barton. OK.
    Secretary Burwell. But I think we are with you on the 
objective of helping families with this complex care.
    Mr. Barton. Thank you. Thank you.
    And I thank the chairman for his discretion.
    Mr. Pitts. The Chair thanks the gentleman, and now 
recognizes the gentlelady from California, Mrs. Capps, for 5 
minutes for questions.
    Mrs. Capps. Thank you, Mr. Chairman.
    And thank you, Secretary Burwell, for your testimony today.
    The President's budget proposal this year includes many 
important investments in our nation's healthcare delivery 
system, workforce, and prevention programs. HHS programs touch 
each one of us in some way, whether as a Medicare beneficiary, 
someone needs a tobacco cessation program, or perhaps being 
cared for by a healthcare provider trained with federal 
funding. I recognize that balancing the many competing 
proprieties in this space is a challenge and appreciate your 
efforts on this.
    Today I would like to highlight two different programs that 
very much deserve your strong support and ask a question about 
each of them. Specifically, I would like to highlight the 
importance of the federal investment in the training and 
retention of the nursing workforce. Title VIII provides 
critical federal grants for nursing schools and organizations 
to advance their educational programs to promote diversity in 
the field, repay loans for nursing students who work in 
facilities with critical shortages, and train geriatric nurses.
    Our nation faces a significant challenge of caring for a 
growing patient population with limited resources. Title VIII 
nursing workforce programs, programs that have been around 
since 1964, are a key component to this effort because they 
train highly-skilled healthcare workers who can serve in 
hospitals, research labs, and communities.
    Will you discuss briefly what this budget request does to 
support the development of a highly-qualified healthcare 
workforce important today and known as the Title VIII programs, 
and ways that it can be continued?
    Secretary Burwell. So, over $200 million in investment, and 
those are split, basically, in two different pieces. The first 
is actually education, as you mentioned, in terms of educating 
and training, in terms of that supporting the provider 
community. The second part is actually with loan forgiveness 
programs that help us have those trained professionals go to 
the places where we have shortages and needs. Those are the two 
main ways.
    But, throughout the budget and throughout the proposals 
that are before you now, there are a number of things that I 
think are supportive of the nursing community because we 
believe they are part of getting us to a system where we have 
better quality care in a more affordable way. And so, having 
nurses and other health practitioners operate at the top of 
their license, and steps that we are taking. For instance, in 
our budget we actually propose with regard to buprenorphine, 
which is an important medication-assisted treatment for 
opioids, we are proposing that it is considered by the Congress 
to expand those that can prescribe, if they meet certain 
conditions. So, we are supporting it in terms of our funding, 
but also in terms of how we think about the role of the nurse 
in a system that can improve quality and reduce cost.
    Mrs. Capps. Thank you, Madam Secretary.
    And this is why I joined with my House Nursing Caucus Co-
Chair to author bipartisan legislation to reauthorize Title 
VIII, The Nursing Workforce Development Programs, with my 
colleague, Mr. Joyce from Ohio.
    Another key priority for the administration and for many of 
us personally is making an impact on cancer treatment care and 
prevention. As you know, cancer continues to be one of the 
leading causes of death globally. With the number of new cancer 
cases expected to rise to 22 million within the next two 
decades, it is a huge number.
    As one of the Co-Chairs of the Cancer Caucus, I commend the 
administration for launching the National Cancer Moonshot 
Initiative. If we are going to win the war on cancer, we must 
take a comprehensive approach to this fight, as this initiative 
proposes to do.
    Only 5 percent of cancer patients in the United States 
participate in a clinical trial, and most do not have access to 
their own data. I believe participation in clinical trials is 
so essential to finding new treatments and, ultimately, a cure 
for cancer or cures for cancer.
    Increasing data-sharing is also critical, as it can help to 
advance a better understanding of the disease and how best to 
treat it. Increasing participation in clinical trials and 
ensuring these trials include a diverse range of participants, 
including of women of all backgrounds, ages, and risk levels, 
is something I have long advocated for.
    Secretary, how will you, through the National Cancer 
Moonshot Initiative, help to increase access to clinical trials 
in the area of cancer?
    Secretary Burwell. With regard to the issue of trials, as I 
mentioned in responding to Mr. Upton, that is one of the issues 
that is a priority.
    In terms of things that we can do right now, and should do 
right now and are doing right now, this ties into the issues 
around electronic health records and precision medicine. Those 
are separate but related issues, as is the cancer part of this, 
which is making sure that patients and consumers can get access 
to their data.
    This, I think, also relates to the issue that we were 
talking about with regard to 21st Century Cures on this side. 
But on the Senate side, I think Mr. Alexander and Ms. Murray 
are thinking of including things that would prevent data-
blocking. Data-blocking is when the providers of software to 
electronic health records, so a provider of software to a 
hospital, does things, and sometimes they might be about cost, 
but sometimes they may be about making things really hard for 
the consumer to get that data information.
    And so, these are steps that I think we can take right now 
and are working on. I will actually be speaking at a conference 
of all the technology people as soon as this Monday with regard 
to getting commitments from the private sector to work against 
this data-blocking. Hopefully, we can get there, but I think it 
is important that, certainly, your colleagues on the other side 
are considering legislation which we are having conversations 
with them about. This would come together in the 21st Century 
Cures version, the House and the Senate coming together when 
you all come together in a conference.
    Mrs. Capps. Thank you very much. I yield back.
    Mr. Pitts. The Chair thanks the gentlelady.
    I now recognize the Vice Chair of the subcommittee, the 
gentleman from Kentucky, Mr. Guthrie, 5 minutes for questions.
    Mr. Guthrie. Thank you, Madam Secretary, for being here 
today. I really appreciate it and echo what my colleague said, 
willingness to work together.
    One of the big concerns I have had--I was in state 
government before in Kentucky--and since I have been here, it 
is the growth of Medicaid. We are looking at how we deal with 
the growth of Medicaid, how we cover the vulnerable, but we 
have to do it in a way that is sustainable for our budgets.
    I know you worked in the Clinton administration. I have a 
Congressional Record, a letter, so I can show the 
documentation. But it was Senator Murray and it was a letter 
that she sent to President Clinton, and I will quote what she 
said on the floor of the Senate.
    This letter is partisan in that it is signed by all 
Democrats, which would include the Vice President. At the time 
he was in the Senate. But it is my feeling that, as Americans, 
every Member of the Senate should have an opportunity to 
endorse the position described in the document.
    And I will just read the opening of the letter. It says, 
``We are writing to express our strong support for the Medicaid 
per-capita cap structure in your 7-year budget.''
    So, as we are looking at all options and dealing with 
Medicaid--Medicaid is now about three times what it was in 
1995, three times the size. Would you support a per-capita cap 
structure or Congress adopting that structure?
    Secretary Burwell. As we think about the issue of 
healthcare cost, which I think everyone agrees is what is 
driving our deficit over the long-term, I think one of the 
things is separating out two issues. One is per-capita costs, 
which is related to the issue you are talking about, and, also, 
the overarching cost. As we, as a nation, move to have more 
people covered and we have a baby-boom through Medicare, we are 
going to have to focus on those issues as we think about it.
    With regard to the question of caps and how that works, I 
think the question--and we are also seeing this right now in 
Puerto Rico in Zika, which basically has a blocked approach to 
Medicaid, a blocked approach----
    Mr. Guthrie. Right, yes.
    Secretary Burwell [continuing]. That right now we are 
having a very difficult time. That is part of why we will need 
the supplemental money. That is part of why we have a proposal 
in our budget on Puerto Rico.
    And so, the concerns that we have around those issues are, 
one, that what happens is pressure gets put on the state or the 
beneficiary in ways that you end up with reductions in quality 
of care. Those are suggestions and ideas--I am sorry I am not 
familiar with the letter that you are----
    Mr. Guthrie. But it was just that concept. I think that was 
in President Clinton's budget proposals twice, I think, in the 
1990s. And so, I was just showing that it had bipartisan 
support. Even the Vice President signed onto it in the Senate 
at the time.
    If that is the direction we need to go for that, is that 
something you would support?
    I do want to get to Kentucky.
    Secretary Burwell. OK.
    Mr. Guthrie. I don't want to be rude, though. I actually 
don't want to be rude.
    Secretary Burwell. Go ahead. Go ahead. We will come back if 
we have to.
    Mr. Guthrie. But you did meet with our governor. As you 
said, you met with the governors last week, and I understand 
from people I have talked to and him--I haven't talked to him, 
but people with him--that it was very productive and they 
really appreciated the time.
    One of the concerns, though, as we move forward, because I 
know you quoted that a lot of money is going to flow to 
Kentucky through their Medicaid expansion, but also a proposal 
right now is like 9-percent cut in universities for 2 years. It 
is 18 percent over 2 years to universities and other levels of 
government, just because it is not just Medicaid, but Medicaid 
is a big part of it. Part of it is public pensions, but 
Medicaid. And so, they are looking at ways to innovate, as you 
know, because you met with them. Like I said, I appreciate 
that.
    But there was a Vikki Wachino responding to some questions 
from the committee on Medicaid, the head of Medicaid at CMS. 
She wrote, ``In some cases where new approaches are being 
tested, such as Healthy Indiana Plan 2.0, approved earlier in 
2015, it is also important to evaluate the impact of new 
approaches being tested in 1115 demonstrations before approving 
similar policies.''
    Can you give examples where you had to have evaluations 
before you could move forward on the others? Because I know I 
don't think CMS does it for stuff like delivery system reform 
programs, premium assistance, managed long-term care service 
and supports, and managed care. So, is there a criteria saying 
you can't move forward on a similar plan until we evaluate 
that?
    Secretary Burwell. With regard to CMMI, the Centers for 
Medicaid and Medicare Innovation, you all actually gave us 
pretty high standards with regard to evaluation, and standards 
that, actually, I think it is good because I think we should 
meet the high standards before we take a demonstration and 
expand it.
    So, in that part of the work that we do, yes, we have seen 
that, similarly in the Medicare work and the delivery system 
reform work. I think what we want to do is make sure, when 
there are things that are new and untested, that before we 
expand to other states that we know and understand.
    I think it is important to reflect that----
    Mr. Guthrie. But this is CMS, not CMMI. It is CMS.
    Secretary Burwell. CMMI is part, is the Center for Medicare 
and Medicaid Innovation, is what was created and is part of CMS 
in terms of how we are doing that. And so, there is that 
Center. There is the Medicaid Center. We work to align as much 
as possible.
    But I think to get to the core of the issue that I think 
you are raising, every state comes in with a different history 
and a different desire and need. Those are conversations that I 
think most governors will tell you on both sides that I welcome 
to have the conversation and that is what we will do.
    Mr. Guthrie. I understand that, but also in that quote was 
that innovations that work in some states may not work in other 
states. That is some of the question. So, if something doesn't 
work in one state, it still could work in another state.
    But we appreciate your openness, and I know I am out of 
time. But we really need to make it work and we need to be 
innovative to make our Medicaid system work. So, I appreciate 
the opportunity.
    Secretary Burwell. I think we want to make sure those folks 
stay covered and it is done in ways that improve quality and do 
downward pressure on cost as much as possible. So, we are 
agreeing.
    Mr. Pitts. The Chair thanks the gentleman.
    Did you want to submit your letter for the record? Did you 
want to submit the letter for the record?
    Mr. Guthrie. Well, it is in The Congressional Record for 
the 1995 Senate, but I submit that for the record.
    Mr. Pitts. All right. Without objection, so ordered.
    [The information was unavailable at the time of printing.]
    Mr. Pitts. The Chair now recognizes the gentleman from 
Oregon, Dr. Schrader, 5 minutes for questions.
    Mr. Schrader. Thank you.
    Thanks for being here, Madam Secretary.
    Secretary Burwell. Thank you.
    Mr. Schrader. I always enjoy it.
    Is it accurate to say that the total discretionary budget 
authority for your Department, HHS, is actually $658 million 
less than it was in 2016 for 2017? And even accounting for 
rescissions, it is $441 million less than in 2016?
    Secretary Burwell. That is correct.
    Mr. Schrader. I appreciate it. There are very few agencies 
that come in, realizing we are in tough economic times, that 
are willing to take a little hit in the budget arena and make 
sure things balance, and it is not at the risk of patients, 
which I also appreciate. We are getting better healthcare out 
there, as you have testified.
    I also want to appreciate the fact that the administration 
is committing to 85 percent of Medicare payments being tied, 
frankly, to positive health outcomes by the end of 2016. I 
think that is the future. We are having great success on the 
CCO level in Oregon----
    Secretary Burwell. Yes.
    Mr. Schrader [continuing]. And our Medicaid expansion 
project. We are actually getting more for less. The patients 
love it. The healthcare providers are very excited. We are 
getting great outcomes in terms of reduced hospital stays, less 
ER visits, more primary care attention.
    I had the mental healthcare providers in the other day, 
also part of the CCO expansion. So, it is not just your 
physical health; they are starting to get at the stuff that 
Congressman Murphy and many of us are trying to get at, to 
incorporate mental health into the holistic approach to folks. 
I think it is very, very, very exciting.
    I guess I would be interested in your update on the next 
generation of ACOs in the Medicare area, where we are going 
with the outcome-based care that we are talking about.
    Secretary Burwell. So, in terms of this idea of getting an 
educated, empowered, and engaged consumer at the center of 
care, and we often call that delivery system reform, there are 
three basic tools that we are working against.
    One is payment reform, so that we are paying for that value 
versus volume. And you talked about that in terms of the 
statistics. This year we, hopefully, will meet the goal we set 
out that 30 percent of Medicare payments will be in value, not 
volume by the end of 2016.
    The second area of focus is changing the way we actually 
deliver care. This gets to some of the innovation projects that 
we are working on and measuring. One of those, for example, in 
terms of where we are seeing real progress, not to the point 
where it meets the standard of evaluation yet, that we would 
expand. But we are seeing that in terms of long-term care for 
people in the homes and making sure that we are doing certain 
types of care in the home, we see a reduction in hospital 
visits for those in the home and we see a 3,000 per Medicare 
beneficiary savings.
    Now we need to make sure that that can hold, but that is 
some of the progress that we are seeing in that space and 
changing the way delivery--keep people in their homes; give 
them the education they need; give them the tools they need to 
get the care they need, so they can stay at home, not be in 
hospitals.
    The third area is data and information. We talked a little 
bit about that with Ms. Capps.
    Mr. Schrader. Right. Well, I appreciate all that. I think 
the ACOs, Medicare Advantage is another way to get value-based 
to folks, and particularly in the home care settings.
    I have worked with Mr. Lance and Ms. McMorris Rodgers on 
several on several innovative programs that I hope the 
administration will look favorably on in terms of improving 
that healthcare delivery, getting it to the consumer, a nice 
bipartisan issue, regardless of your view of the ACA, in 
particular.
    I am hoping that HHS will continue to work with this 
committee and other Members on improving the innovation 
opportunities through Medicare Advantage and wonder if there 
are other things you are doing to improve things for 
beneficiaries in the Medicare Advantage Program. It is working 
really, really well out west in Oregon.
    Secretary Burwell. With regard to the ACOs, that is a place 
where we have had measurable results, but we have seen the 
measure had to be that you do not reduce quality, but you have 
savings. If you can increase quality, that is even better.
    Mr. Schrader. Yes.
    Secretary Burwell. And we have seen that and the savings, 
$300-400 million in terms of that. And now, we have a new 
generation of ACOs, the Accountable Care Organizations.
    With regard to Medicare Advantage, the issue, one of the 
things I would highlight that we are working on right now is 
one of the challenges in Medicare Advantage is the question of 
people with socioeconomic difficulties and the star ratings, 
and how those ratings perhaps might disadvantage those who have 
a population who have a number of chronic conditions.
    And so, we have taken steps to weight----
    Mr. Schrader. Good.
    Secretary Burwell [continuing]. And include things for that 
socioeconomic. We are spending time to understand more fully. 
We want to make sure we analytically base what are the 
differences in changes people should have in payment if they 
are serving a more difficult population.
    Mr. Schrader. Great.
    Secretary Burwell. But, in the interim, as we are finding 
more solutions, those are changes we are making.
    Mr. Schrader. Very cool.
    The last comment I guess I would make is I had insurance 
agents in my office just the other day working really hard to 
get people enrolled. When they have their circumstance change, 
they need special enrollment opportunity. They are having a 
little trouble accessing the Web site compared to during the 
open enrollment periods. So, if you could just reach out to 
them a little bit and work with them to help them help people 
make those changes, so that we save money, people get the 
healthcare they need, and they are not subject to penalties 
later on, I would appreciate that.
    Secretary Burwell. Absolutely. We would like to reach out 
and find out, so we can reach out directly.
    Mr. Schrader. Thank you.
    Secretary Burwell. We will do that.
    Mr. Schrader. I yield back Mr. Chair.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from Kentucky, Mr. Whitfield, 
5 minutes for questions.
    Mr. Whitfield. Thank you, Mr. Chairman.
    And, Madam Secretary, thanks very much for being with us 
today. We all appreciate the phone call.
    There are three issues I want to talk about. First of all, 
alternative payment models for oncology.
    Secretary Burwell. Yes.
    Mr. Whitfield. CMS has already developed a model, the 
Oncology Care Model, under the Center for Medicare and Medicaid 
Innovation. From conversations that I have had with oncologists 
and others, they find the sign-up process to be overly-
complicated. They say that they are being encouraged to sever 
relationships with certain hospitals, and that many of them are 
not being informed on whether or not their application is being 
accepted.
    Now, as you also know, Cathy McMorris Rodgers and Steve 
Israel introduced a bill called The Cancer Care Payment Reform 
Act, which we had the legislative hearing on in September of 
last year. That is an alternative model that the oncologists 
very much support. They are the ones providing this care.
    And so, the impression that we are getting is that you all 
are determined that you are going to move forward on your 
model. I simply would ask, would you work with the providers to 
see about developing a model that is acceptable to everyone?
    Secretary Burwell. Absolutely. We would like to and we 
would like to follow up with your staff directly in terms of 
talking to some of the providers that you have talked to, so we 
can get their input directly.
    Mr. Whitfield. OK. Well, we appreciate that. Thank you very 
much.
    Secretary Burwell. Yes.
    Mr. Whitfield. Now, on another matter, over a year ago, 
this committee and the Ways and Means Committee staff, which 
started working with HHS regarding a program with the 
Affordable Care Act that was authorized called the Basic Health 
Program. It was never funded. There was never an appropriation 
for that. There was a permanent appropriation for an Affordable 
Care Act program called the Premium Tax Credit. The 
administration has been taking money from that program, last 
year $1.3 billion, to fund the Basic Health Program.
    As I said, Ways and Means has been contacting you all on a 
regular basis about this. Energy and Commerce has been 
contacting you on a regular basis about this, asking for 
documents about how this is being funded without a direct 
appropriation. After a year of asking for these documents, Ways 
and Means still has not received them and the Energy and 
Commerce Committee has still not received them.
    Will you all work with us to provide this information that 
the staffs are asking for?
    Secretary Burwell. I think we are and continue to work. We 
have been responsive in terms of letters. We have been 
responsive, actually, on the Ways and Means side. A briefing 
was asked for. We provided----
    Mr. Whitfield. OK. Well, let me just say this: I mean, I 
appreciate that, but I am not there. I am not negotiating. I am 
not even discussing it. But the staffs on both Ways and Means 
and on our committee tell us that what has been provided is 
very meager, that it is not the documents that they are 
requesting.
    Secretary Burwell. Well, I think we want to continue to 
work, and we will.
    Mr. Whitfield. OK.
    Secretary Burwell. I think we are trying to work 
cooperatively with all of the issues of oversight which we 
think are important.
    In this particular case, in terms of the authorities, we 
believe the authorities exist. The authorities are for the same 
amount; they are the same types of money.
    Mr. Whitfield. So, you all feel like you don't need a 
direct appropriation, that you have other authority to do it?
    Secretary Burwell. We believe that the authority----
    Mr. Whitfield. And that is what we want, the document, I 
guess, that provides that authority, at least your 
interpretation.
    But you said that you will continue to work with our 
committee on it. We would appreciate that.
    Secretary Burwell. We will. We will.
    Mr. Whitfield. One other thing I just want to bring up 
briefly, because I was involved in it, is the sunscreen 
legislation. As you know, skin cancer is the most common form 
of cancer in the U.S. Skin cancer is more prevalent than breast 
cancer, prostate cancer, lung cancer, and colon cancer 
combined.
    And so, these ingredients that have been on file at the FDA 
for approval since 2002, over 14 years, and many of these 
ingredients are being used in Asia, Europe, South America, 
around the world, and yet, we passed a bill specifically to 
encourage a process that is more applicable to this. And even 
since then, there has been no movement 14 months later.
    I know that Johnny Isakson, Senator Isakson, asked about 
it. I am asking about it. So, I hope that you all will tell us, 
do we need to do something? Is there anything that we can do to 
facilitate this?
    Secretary Burwell. We would like to follow up because I 
think maybe you can help us. Our concern is it goes on the new 
products that are coming on. First, in Europe it is a cosmetic. 
We actually believe, because it is going on your children 24/7, 
that we need to make sure that what is going through, is it 
absorbable in the children's skin? It is for everyone, but, of 
course, we are focused on children. And are those chemicals 
going to do something negative?
    Mr. Whitfield. Yes, yes.
    Secretary Burwell. And so, I think if we have a 
conversation, there may be a way that you can be helpful----
    Mr. Whitfield. OK.
    Secretary Burwell [continuing]. In helping us get the 
information we need.
    Mr. Whitfield. No, we would love to do that because we 
definitely want to protect these children. But, also, when you 
have something pending for 14 years or 15 years, people are 
beginning to wonder a little bit.
    Secretary Burwell. We would look forward to that.
    Mr. Whitfield. Thank you very much, and I yield back the 
balance of my time.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from Massachusetts, Mr. 
Kennedy, 5 minutes for questions.
    Mr. Kennedy. Thank you, Mr. Chairman.
    Madam Secretary, thank you again for making an appearance 
today.
    I would like to commend the President's budget for 
including critical reforms to mental health and Medicaid, such 
as ending the 190-day lifetime limit on psychiatric inpatient 
care for Medicare beneficiaries and for expanding the 
electronic health record incentive program for including 
behavioral health providers. It is a big step forward.
    I also support the President's proposal to reinstate the 
primary care bump, which, according to one study, resulted in 
an increase of appointment availability by 7.7 percent.
    Do you think it is fair to say, Madam Secretary, that this 
proposal could also expand the program so that mental health 
and behavioral health providers in Medicaid could benefit from 
the bump as well?
    Secretary Burwell. Yes, we think that it is a continuum, 
and there are a number of different proposals, as you 
articulated, that are focused on getting us to a different 
level with regard to access to behavioral health and 
integration, as Mr. Schrader mentioned, in terms of integration 
of behavioral health.
    Mr. Kennedy. So, would you agree that adequate 
reimbursement levels are a critical piece to expanding the 
workforce to ensure that Medicaid patients have access to 
timely care?
    Secretary Burwell. We do. I think you know our proposal on 
primary care that we have in our budget is about making sure we 
do some of that. In addition, the proposal we have on 
behavioral health is actually focused specifically on some 
provider issues in terms of getting more providers, so we have 
that access.
    Mr. Kennedy. The President's budget I believe, Madam 
Secretary, also proposes lifting the federal exclusion that 
currently prevents some children from getting Medicaid coverage 
of early and periodic screening diagnosis and treatment 
services and limits terms. That means kids on Medicaid can't 
get both mental health care and physical care while they are 
patients at certain facilities known as IMDs.
    Madam Secretary, can you tell us a little bit more about 
the importance of ensuring that all children, regardless of the 
setting, have access to comprehensive health?
    Secretary Burwell. We think it is important, which is why 
we have the proposal. I think it is an issue that I'm sure we 
may discuss, also, with Mr. Murphy, in terms of making sure 
that these kids have that access.
    What happens, and if you visit facilities, when you are a 
parent and you are told, ``Oh, here is a prescription. You have 
to go at a different time and a different place or it won't be 
paid for in the same way,'' that is prohibitive in terms of 
having a child get the services that they need as they need 
them. A warm handoff. So, whether it is in the facility itself 
and the payment mechanisms really make a difference to how 
children are receiving this kind of care. Our proposal is aimed 
at trying to help that along.
    Mr. Kennedy. Thank you.
    I want to touch base a little bit on what Ms. Capps was 
getting at as well with regard to data. There are 14.1 million 
Americans in 31 states that have enrolled in Medicaid as a 
result of the Affordable Care Act, and an additional 4 million 
could gain coverage if the remaining states expand their 
Medicaid programs. These numbers represent, obviously, far more 
than just facts and figures. They are about prenatal 
appointments, cancer screenings, and lifesaving preventive 
care.
    Perhaps most noteworthy, Medicaid expansion means that 
millions of Americans now access mental and behavioral 
healthcare. Medicaid is the largest payer of mental health 
services in the United States and it has the greatest potential 
to reform a broken system. In order to make the necessary 
reforms and to bolster the program more effectively, we need to 
first know how CMS reimburses doctors and at what levels. 
However, when I talk to doctors and patients and I ask how much 
Medicaid reimburses for their services, no one is able to point 
to exact figures, given the nature of those reimbursement 
mechanisms across states.
    So, Madam Secretary, I would love your help in working with 
me on solutions to try to improve CMS's data collection for 
each state, so that we can ensure that we know at least how 
those payments stack up against private insurance.
    Secretary Burwell. We want to work on that issue. One of 
the things is because Medicaid is a state-run program. We are 
very dependent on the states in terms of their analytics, their 
data, and their systems.
    Having said that, we look forward to, because we want to 
know and understand that information. Transparency of data and 
information is something I think we think is a very important 
thing across the healthcare system. Whether that is the 
dashboard that we put up in the December timeframe on payments 
in drugs, so that people can actually know which drugs have had 
the largest increase in cost, creating that transparency for 
the consumer and providers in terms of putting up on a Web site 
who are the largest recipients of Medicare payments. And so, 
this is a whole space that we believe is going to improve 
quality and reduce price.
    Mr. Kennedy. Thank you.
    If I can, I have got about 30 seconds left. You touched 
based in your written testimony, and as well I think with Mr. 
Schrader and a couple of other times, about the transition off 
of fee-for-service basis in Medicare. I was hoping that you 
could just provide a little bit more detail on the learning and 
action, how that is going and what you see going forward, and 
if there are ways we can be helpful, in 20 seconds or so.
    Secretary Burwell. Important, thousands have joined. It is 
a means by which the government in its changes in payment tries 
to align with the private sector. So, we move together. We 
learn from each other. We get better results, and we prevent 
unintended consequences. And we are seeing that start to 
happen.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from Pennsylvania, Dr. 
Murphy, 5 minutes for questions.
    Mr. Murphy. Thank you.
    Welcome, Madam Secretary.
    I am going to run through a lot of statistics, but it is an 
important issue because, as we are trying to deal with mental 
health reform legislation, one of the key issues is having more 
psychiatric beds because of the IMD exclusion. We used to have 
500,000 psych beds in this country in the 1950s, and now we 
have less than 40,000. We need 100,000 because people in an 
acute phase of a psychotic break need a place to go besides 
being given a five-point tiedown in an emergency room or being 
sent to a jail cell or being discharged back in the streets, 
where they have a high risk for suicide, victimization, et 
cetera.
    I want to do a couple of things. The consequence of non-
treatment of serious mental illness, according to NIMH even 
back in 2010, was pretty staggering. They said that 40 percent 
of schizophrenics and about 51 percent of people with bipolar 
illness are untreated and a large part of the homeless, about 
200,000 or so, living in abysmal conditions, have high risk for 
other medical problems, and 28 percent of them get their food 
out of the garbage. So, high risk for a wide range of things.
    Out of those who are incarcerated, the seriously mentally 
ill make up 16 percent of the present population, about almost 
50 percent of the overall prison population of mental illness, 
and high risk for other things. But I want to go through some 
of these things, too.
    People with delusions and hallucinations, the longer that 
they go without treatment, the worse it gets. The longer a 
person waits for treatment for a psychotic episode, the longer 
it takes to get their illness under control. For bipolar 
disorders, the sooner a person gets on lithium or other 
treatments, the better their treatment goes.
    But what happens here is you have a wide range of people 
with serious mental illness with Medicaid, with SSI and SSD 
recipients. The cost of untreated mental illness is pretty 
amazing. The direct cost that I see here for treatment of a 
serious mental illness, about $55 billion; indirect cost, about 
$70 billion. But, when you have added cost for emergency room 
care, private medical care, these costs go up considerably.
    The cost of untreated diabetes in America is about $245 
billion. That is $176 billion is direct medical costs. The 
reason that is important is many people with serious mental 
illness have very high risk for diabetes.
    Similar high numbers are also there for cardiovascular 
disease, for pulmonary disease, for infectious disease, all of 
which have a higher mortality and morbidity rate for the 
mentally ill. And you probably know that studies have said the 
mentally ill tend to die 25 to 10 years sooner, not because of 
suicide, but because of other medical complications.
    So, it comes down to this point: when we have asked the CBO 
to score the issue of what would happen if we looked at more 
hospital beds, they, quite frankly, admitted they couldn't do 
that and they simply took a number and the number of hospital 
days, psychiatric hospital days in America, and said, ``Well, 
if we pay for them all, it is going to cost somewhere between 
$40 and $60 billion in 10 years. We have no idea how to do 
this.''
    We really need your help, and I actually think this would 
be significant savings for Medicaid and Medicare if we get this 
right. If we already know that people with serious mental 
illness are overusing emergency rooms versus caring for 
themselves, if we know that they have a higher incidence of 
those chronic illnesses I mentioned before, and we know that if 
they are not treated, it gets worse, it makes a lot of sense 
and dollars if we have hospital beds for them when they have 
this acute illness, stabilize them, make sure they have 
outpatient care then, instead of doing what we have been doing. 
And that is, we have traded those beds in the asylums for 
prison cells, for blankets on a subway grate, for the emergency 
room gurney, and the county morgue.
    So, as we are going through this, I wonder if you have done 
any analysis here and can maybe talk about some direction that 
you are guiding CMS, because we need solid numbers of what it 
is costs to not treat and what it costs to treat. I wonder if 
you could comment on that.
    Secretary Burwell. So, our estimation is that, by 2020, 
actually, just the treatment cost for behavioral health and 
substance abuse will be $280 billion. And so, that doesn't 
include even a number of the other things that you have talked 
about in terms of what this does as a nation. We agree, and as 
part of our behavioral health proposal, the idea of getting 
those people into care, our estimates are some of those people 
with severe issues don't get into care for 3 years.
    Mr. Murphy. Three years?
    Secretary Burwell. And that is about access. Yes. And so, 
making sure that we have the ability for access when it is 
severe or even before it is severe is an important part of the 
proposal.
    With regard to our IMD proposal that Mr. Kennedy raised, I 
think that there are ways that we could be helpful in having 
conversations about how we solve those economics and how that 
was scored in terms of what we did. We would be happy to do 
that.
    The other thing that I just think is an important part, 
sort of putting on my old OMB hat, so that we get to the place 
where we can understand how we spend money and what savings we 
get, and that sort of thing, is actually some of the money that 
we have asked for in this behavioral health money is about 
going ahead and doing the evidence-based work, evaluation.
    I know many times people don't want to fund evaluation, but 
it is essential for the kinds of statistics that we need to 
show what you are talking about. But, in the meantime, we can 
work on our----
    Mr. Murphy. Thank you. Let's do this, because I believe we 
can save a lot of money. This committee really needs this 
because, I will tell you, there is bipartisan support that we 
have got to fix this problem to help Americans.
    Thank you very much. I yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    Now I recognize the gentlelady from California, Ms. Matsui, 
5 minutes for questions.
    Ms. Matsui. Thank you, Mr. Chairman.
    Thank you, again, for being here, Secretary Burwell. I am 
glad you are here to highlight the ways that HHS plans to 
continue and expand critical investments in health and well-
being of the American people.
    The first step toward reforming our nation's healthcare 
system has been to improve access to healthcare by ensuring 
that everyone can obtain affordable healthcare coverage. We 
know that the Affordable Care Act has made great strides in 
that goal, and we must continue forward. We must also continue 
to be forward-looking and take the next steps in healthcare 
reform. We need to continue to make strikes toward ensuring 
that everyone has access to the right care at the right time at 
the right price.
    I believe that there is great potential in the power of 
technology to help us achieve our goals of healthcare delivery 
system reform. Electronic health records can improve providers' 
ability to coordinate care, and technology such as face-to-face 
video between providers and patients and technology that allows 
providers to remotely monitor patients' chronic conditions can 
increase access to needed care, improve patients' outcomes, and 
reduce cost.
    I was very pleased that this year's budget expands the 
ability of Medicare Advantage plans to deliver services via 
telehealth and enables rural health clinics and Federally 
Qualified Health Centers to qualify as originating telehealth 
sites under Medicare.
    Secretary Burwell, I am pleased with this progress, but I 
think there is still much more we can do. Can you talk a little 
bit about the inclusion of telehealth in the budget and any 
other proposals that HHS is currently considering in this 
space?
    Secretary Burwell. So, I think we think that telemedicine 
and telehealth is an important part of getting access. We have 
talked about access. Certainly, in rural communities and other 
communities this is going to be an important tool.
    We have taken two, as you articulated, very specific steps 
in our budget, because we thing Medicare Advantage should pay 
and because part of the reason that the field is not developing 
as much is because people don't get paid. So, if you don't pay 
for the ability to do these services--that is part of the 
Medicare Advantage.
    The other part is finding the facilities that will meet 
qualifications, so you do it in an appropriate and safe way. 
And that is the proposal that you mentioned, and it is related 
to HRSA and our Federally Qualified Health Centers. We know 
that these health centers are serving literally millions and 
millions of Americans across the country, and most people 
actually have some in their district. And so, that idea that 
you can use them as a base.
    The other thing that we are working on right now is--and it 
gets to Mr. Pallone raised in his earlier comments the issues 
of IHS, Indian Health Service. Right now, we are suffering from 
a very serious problem on our reservations in terms of youth 
suicide. In order to get providers in places like Pine Ridge, 
it is very, very difficult. And so, we are using our ability to 
actually use telemedicine as a means by which we can quickly 
get providers. Because when you have these suicides, making 
sure those children have the support they need, other children, 
is a very, very difficult thing to do quickly----
    Ms. Matsui. Yes.
    Secretary Burwell [continuing]. Because we can't get the 
providers to go.
    And so, while we are working on permanent solutions, these 
may become the permanent solutions because they are stable. 
Providers come and go, but the telemedicine providers we think 
will be in a place where they are going to provide more care 
for a longer term.
    Ms. Matsui. Thank you very much, and I look forward to 
continue to work with you on these issues.
    To ensure that Americans have the ability to access the 
right care at the right time, we must work hard to achieve that 
goal for the whole person, which includes access to mental 
health care. One of the goals of the delivery system reform is 
increased care coordination and behavioral health integration. 
We must ensure that people have access to a full spectrum of 
mental health services and that those services are integrated 
into medical care and coordinated across different providers.
    I believe that the Excellence in Mental Health 
Demonstration Project, which I coauthored with my colleague, 
Congressman Lance, has the potential to reform our nation's 
mental health system by improving access to community-based 
care, and by integrating and coordinating that care across 
different provider types.
    Secretary Burwell, thank you for including in the budget an 
expansion of this demonstration project to six more states. The 
more we can test out this model, the better chance we have of 
finding out what works, so we can expand it to those who so 
desperately need a better system of mental healthcare.
    Would you like to comment further on HHS's work on this 
project and its potential?
    Secretary Burwell. Yes. We think it is a very important 
part of our work in terms of getting this integration and 
getting it quickly and doing it in a way that we can both get 
integrated care and, also, move towards where people are paying 
for value, not volume, in terms of getting the right payment to 
providers.
    I think you know that, with your help and support, we have 
beat the statutory deadlines with regard to the implementation. 
And then, we have added to that by the proposal in the budget 
which we hope will be viewed favorably.
    Ms. Matsui. Yes. Thank you very much.
    Mr. Pitts. The Chair thanks the gentlelady.
    Now I recognize the gentleman from Illinois, Mr. Shimkus, 5 
minutes for questions.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Secretary Burwell, thank you, and thanks for reaching out.
    We gave you a heads-up to talk about this CMS Web site 
thing. Of course, when you put something up, that means time, 
effort, and energy was placed to prepare for this to actually 
happen. Of course, it was up, it was down.
    So, the basic question is, does CMS intend to go forward 
with this experiment?
    Secretary Burwell. In terms of the----
    Mr. Shimkus. The Part D drug payment model.
    Secretary Burwell. So, with regard to this issue, I think 
as you appropriately reflect, this was something that came out 
ahead. With regard to the issue of high-cost drugs, which is 
what this issue is about in terms of the potential effort, what 
we have tried to do--and this is to the point of getting input 
in December--we had a meeting that had both those from the 
pharmaceutical industry and other stakeholders to come and talk 
about what can we do that maintains----
    Mr. Shimkus. No, that is different than having a proposed 
rule. So, what you did was, what CMS did by shooting this 
publicly is raise a lot of red flags. Is there going to be a 
rule? When is there going to be a rule? When are you going to 
notify Congress? And so, that is why the questions.
    Secretary Burwell. The questions, in terms of speaking to 
the specifics of the rule, in this particular place because 
things are market-sensitive, I have to be careful in terms of 
it.
    Mr. Shimkus. The market, that is why putting it up on the 
Web site, the market sensitivity to that, too, is just as bad.
    Secretary Burwell. That was an error. It was an error, and 
I think we have very clearly said it was an error.
    Mr. Shimkus. But it was a premonition of future things to 
come.
    Secretary Burwell. In terms of specifically speaking to 
what and when we will do regulations, I want to be careful 
about that because of the market sensitivity. But what I think 
is fair to say is, with regard to this issue, we will speak to 
it more in the future.
    The issue at hand is, in Medicare Part B, in terms of how 
the payments are done, they are done in ways where you, as a 
provider, are incentivized by a percentage. That incentive is, 
if you are going to be paid a percentage of the cost of 
something, then what we are doing is we are encouraging you to 
prescribe the larger-cost item. And that is the substance of 
the issue at hand and why we are focused on it.
    With regard to the specifics, we hope to have more soon on 
that issue.
    Mr. Shimkus. OK. Let me move to this issue on margins. The 
NIH states that the use of this is not appropriate means for 
controlling prices. So, the question is, why haven't you all 
responded in this process involved in the most recent petitions 
in this space and provide a sense of the agency's current 
thinking on margins?
    Secretary Burwell. We plan to respond to that. I think you 
are referring to the letter that I received from a number of 
Members in terms of the most recent questions, and we will 
respond to that letter.
    Mr. Shimkus. Because, then the followup is just, obviously, 
the R&D and the risk and return. We need some clarity on this 
process.
    Secretary Burwell. Yes, and I think it gets to the bigger 
issue, which is what I was starting. It is the question of how 
we, as a nation--the high-cost drugs and the issue of drugs, 
when we look at Medicare expense and what we saw, the increases 
in 2014 came from mainly high-cost drugs. There were some 
changes in other things, but in terms of that, and what 
percentage of our Medicare budget will be paid to drugs 
continues to grow. And so, what we need to do is find 
approaches and strategies that balance both innovation--because 
we want that R&D to get the best things--but create some 
downward pressure. Because I think whether it is people in 
Medicare or individuals who actually pay for their drugs in 
employer-based care, everyone is seeing the difficulty in both 
specialty drugs, but in also some cases non-specialty drugs.
    Mr. Shimkus. And my last thing, let me talk about Medicaid 
for a second. Under current law, illegal immigrants are not 
supposed to get Medicaid. However, reasonable opportunity 
period exists. So, the debate that is going on in America is, 
why is there a reasonable opportunity period for illegal 
immigrants when there may not be--in fact, there is not--for 
citizens who don't have this ``reasonable opportunity period'' 
to prove that they qualify, either through long-term care or 
because of their finances? And should that not be afforded to 
citizens the same as it is being afforded to illegal immigrants 
right now?
    Secretary Burwell. In terms of the affording it to 
immigrants, are you referring to within Medicaid immigrants 
aren't eligible?
    Mr. Shimkus. That is correct, but, obviously, some are 
getting. There is a period of time in the law that requires--
there is a reasonable opportunity period. So, there may be 
coverage for them to, then, either prove, yes, they are legal 
or not. So, then, the question is, why it is not afforded to 
legal citizens based upon finances and long-term care?
    Secretary Burwell. I think in Medicaid it is applied both 
to any----
    Mr. Shimkus. Can you just check on that for me?
    Secretary Burwell. I will check on that.
    Mr. Shimkus. I appreciate it. Thank you.
    Secretary Burwell. Because it may be the marketplace. It 
may be the distinction. Let us come back and find out because 
Medicaid is saying that it may be the marketplace. So, let's 
come back, if that is the question.
    Mr. Pitts. All right. The gentleman's time has expired.
    The Chair now recognizes the gentlelady from Illinois, Ms. 
Schakowsky, 5 minutes for questions.
    Ms. Schakowsky. Thank you, Secretary. I want to join in the 
congratulations to you on the Affordable Care Act. While all of 
us acknowledge that there are some problems, we have made such 
tremendous strides, and it would be wonderful if we could sit 
down and just fix the things that we could fix, make it even 
better.
    I had a whole bunch of questions to ask you. But, since 
July when abortion opponents released manufactured and highly-
edited videos, my colleagues on the other side of the aisle 
have been on a mission to undermine women's rights. And 
apparently, today isn't any different.
    But facts matter and not a single claim made by the other 
side has been supported by a single shred of evidence. On the 
contrary, three congressional committees found no wrongdoing in 
their investigations of Planned Parenthood. The chairman of one 
of the committees investigating Planned Parenthood, Congressman 
Jason Chaffetz, went so far as to say, ``Was there any 
wrongdoing? I didn't find any,'' when asked about his 
investigation.
    I would like to submit into the record, Mr. Chairman, a 
news article that includes this quote.
    Mr. Pitts. Without objection, so ordered.so ordered.
    [The information was unavailable at the time of printing.]
    Ms. Schakowsky. Moreover, every state that has concluded 
their investigations into Planned Parenthood has come up empty-
handed. In fact, a Texas grand jury ended up indicting two 
persons associated with the Center for Medical Progress, 
including its leader, David Daleiden, after their investigation 
uncovered illegal activity conducted by those individuals, not 
by Planned Parenthood.
    I would like to submit into the record another article 
detailing that indictment.
    Mr. Pitts. Without objection, so ordered.
    [The information was unavailable at the time of printing.]
    Ms. Schakowsky. Finally, just this week, The Washington 
Post editorial board published an article calling the so-called 
investigation, what I believe it is, a witch hunt. Not only do 
they point out that every state and federal entity that has 
investigated Planned Parenthood has found nothing, but the 
article also mentions the troubling document requests and 
subpoenas issued by the chairman of the Select Panel to Attack 
Women's Health--that is what we call it--where I serve as the 
ranking member. I would like to submit that article into the 
record as well.
    Mr. Pitts. Without objection, so ordered.
    [The information was unavailable at the time of printing.]
    Ms. Schakowsky. The relentless targeting of Planned 
Parenthood, the attack on women's health rights, and the 
disregard for facts have to stop. Here is what I want to ask 
you about this: research using fetal tissue conducted by 
reputable universities across the country has greatly 
contributed to our understanding and treatment of many 
diseases. I know you mentioned some of this before, but can you 
describe the importance of fetal tissue research and the 
advances that have been made possible because of it?
    Secretary Burwell. So, a number of the advances, as I 
mentioned, hepatitis A, mumps, measles vaccines, in terms of 
that. We also know that the research that is ongoing actually 
helps with issues around Down's, macular degeneration. Most 
recently, we have seen it contribute to our ability to work on 
getting an Ebola vaccine.
    And so, this research is an important part of the research 
in advancing science. As I articulated before, we take very 
seriously the constraints and rules around the research at HHS 
and following those.
    Ms. Schakowsky. So, there are definitely laws in place and 
regulations in place that make sure that this is done. Well, 
could you describe anything about the ethics of this?
    Secretary Burwell. Two of the things that I think are 
probably the most important is no valuable consideration. In 
terms of that, that has to do with the question of payment. And 
then, the second issue is consent. That is another issue that 
many states have laws about in terms of what people do. I think 
those are probably the two most important that people on both 
sides of this conversation have focused on.
    Ms. Schakowsky. So, you can verify that there is no ability 
to make a profit on the sale of fetal tissue?
    Secretary Burwell. We have turned these documents over--
they have been requested of the NIH--in terms of the 
attestations that our grantees have with regard to fulfilling 
the state and federal laws, both, in terms of saying that none 
of those things have occurred. That occurs when the grant is 
given as well as at the point of renewal of grants.
    Ms. Schakowsky. Thank you.
    I also wondered, in the brief time I have remaining, if you 
could just say what impact has Planned Parenthood had on access 
to reproductive health services and what it means for both men 
and women if those health centers were to be closed.
    Secretary Burwell. I think it is both reproductive health 
services, but I actually think it is important to recognize 
that it is broader service as well. So, about 3 million women 
receive services across the country every year, it is 
estimated. Those services are issues, also, of wellness and 
cancer screenings and others. So, reproductive health is one 
element, but it is broader in terms of the basic healthcare 
that women are receiving from this organization.
    Ms. Schakowsky. Thank you so much. I yield back.
    Mr. Pitts. The Chair thanks the gentlelady.
    I recognize the gentleman, Dr. Burgess, 5 minutes for 
questions.
    Mr. Burgess. Thank you, Mr. Chairman.
    Madam Secretary, I apologize that I wasn't available to 
take your call the day you called. I appreciated you leaving 
the message. I knew we would have had a chance to talk today.
    At the outset, let me just say I have got so much stuff 
that I need to cover, and I recognize we won't get through it 
all. So, I will submit some of this for your written attention.
    Furthermore, because of the bill that repealed the 
sustainable growth rate formula last year, and now the payment 
reform that is going on in CMS--and Dr. Conway has been very 
good about coming in and talking to me--but I really think the 
ongoing dialog between HHS and the committee and Members of 
Congress, I mean, this will live on after this administration 
concludes and the next administration starts. It is so 
important that we get it right because this could form the 
basis, the nidus for what payment reform really looks like, not 
just in Medicare, but with other payers as well.
    It is critical we get it right because the whole purpose in 
doing the Medicare SGR repeal was we had too many doctors that 
were legally practicing medicine. SGR pulled the joy out of the 
practice. I think we are on the right foot now with getting 
this fixed, but it does have to be done correctly.
    But a couple of things I do want to cover with you. 
Somebody already referenced part of the Affordable Care Act, 
Section 1311(h), the part that deals with providers. It says--
let me just read it, so I get it correct--that ``Under the 
quality improvement,'' which is Section (h) of 1311, 
``beginning on January 1st, 2015, a qualified health plan may 
contract with (a) a hospital,'' and it goes through the 
parameters; ``(b) a healthcare provider, only if such provider 
implements such mechanisms to improve healthcare quality as the 
Secretary by regulation may require.''
    Now can you understand why this makes many of the people 
that I interact with on a daily basis, the nation's physicians, 
can you understand why that makes them nervous? Have you begun 
to promulgate those regulations? Are those going to be new 
rules that we can anticipate? What is happening under Section 
1311(h)?
    Secretary Burwell. Is it under 1332?
    Mr. Burgess. No, it is 1311.
    Secretary Burwell. So, I will have to come back on 1311.
    Mr. Burgess. OK.
    Secretary Burwell. We have done guidance under 1332. And 
I'm sorry, 1311(h) is not one that is front-burner, but we will 
come back. I apologize. Maybe I will know it by another name--
--
    Mr. Burgess. OK.
    Secretary Burwell [continuing]. But I am not connecting. 
So, we will come back on that. For 1332, we have issued 
guidance on. That is the one I think that many people are 
raising on both sides, a lot of conversations about that one.
    Mr. Burgess. Last summer you addressed the National 
Governors Association, I believe. I heard it on C-SPAN while I 
was driving around in my district through the miracle of 
satellite radio. Governor Fallin from Oklahoma asked you some 
questions because of the problem she has in Oklahoma with 
prescription drug difficulties. She talked about a prescription 
drug monitoring program that she has developed in Oklahoma, 
but, apparently, Medicaid recipients fall outside of that. I 
think her question to you was can something be done to mandate 
the same prescription drug monitoring requirements that she has 
under her state through the federal part of the Medicaid 
program.
    Secretary Burwell. So, I will have to go back. But I think 
with regard to the mandatory using of a PDMP, a prescription 
drug monitoring program, it is occurring at the state level. 
All but one state has it in place. But it is done on a state-
by-state basis in terms of having the physicians use it.
    What we are trying to do--and I just met with the governors 
on opioids, and the governors produced a really good document 
that I would recommend for folks to look at in terms of their 
recommendations around this. Many of the states I think are 
trying to advance that. What we are trying to do is share best 
practices. I called two times, have called 50 states together, 
so that we can get the right procedures that are happening in 
some states applied to the others. If there are things we can 
do, we welcome the opportunity to do them. I think it is a 
state issue, but we will double-back on that.
    Mr. Burgess. But her specific request to you was she needed 
help in the Medicaid program because somehow it fell outside 
what she had available to her as a governor under State law.
    I will just say, speaking as a provider, we want to do the 
right thing. We want to be able to provide our patients who are 
in pain, we want to be able to provide them pain relief. At the 
same time, we want to participate in whatever diversionary 
prevention programs are out there. So, this is extremely 
important to providers, I will just tell you, having been on 
both sides of that issue.
    Let me, in the brief time I have left, the issue of the 
unaccompanied minors, of course, Texas, the Lower Rio Grande 
Valley sector, I have been down there several times. I met with 
DHS. I met with your people, with ACF and ORR. I will tell you 
I am disturbed.
    I am also on the Helsinki Commission. We had a hearing last 
fall on the Helsinki Commission where we heard from two victims 
of child trafficking. Both of these women were trafficked 
through family members, by family members, had come into the 
country illegally. Granted, OK, they broke the law. But they 
had very compelling testimony of why was no one looking out for 
us. They were delivered to a family, which subsequently, then, 
put them into a sex trafficking situation, and there was no 
respite, no help for these individuals.
    We have had so many people in the last 2 years, so many 
unaccompanied minors come across. They produce a telephone 
number from goodness knows where. This is an uncle. This is a 
brother.
    Look. Many, many years ago, I went through a child adoption 
process. I know how intrusive and exhaustive that was. We are 
just sending these people off to a telephone number that they 
happened to produce out of their back pocket when they are 
picked up out of the river. And we wonder why now there are 
problems that are surfacing.
    Again, I ask for your help in interacting with your agency, 
ACF and the Office of Refugee Relocation. We have got to do a 
better job. Yes, I get the security side and we have got to do 
a better job on the border. But, if we also have a role for HHS 
with dealing with people who end up in the country, we have got 
to do a better job there. So, I do welcome the opportunity to 
talk to you and the agency more about that in the future.
    Secretary Burwell. Thank you. We take it very seriously. We 
want those children to be safe. We have made a number of 
changes. We have ideas from PSI on the Senate side. We will be 
working to implement those. But, if there are other things we 
can do--we have put in an 800 number. The background checks 
have been expanded. There are a number of things that we are 
doing, followup calls, and that sort of thing. If there are 
other things that you see, having been through that same 
process you described, making sure you do everything you can to 
have children with safe people is something we think is 
extremely important.
    Mr. Pitts. The gentleman's time has expired.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Pitts. The Chair now recognizes Judge Butterfield, 5 
minutes for questions.
    Mr. Butterfield. Thank you very much, Mr. Chairman.
    Thank you, Secretary Burwell, for coming today, and thank 
you for your testimony. I was present when you testified, a 
couple of hours ago I guess it was. But thank you for coming 
and thank you for all the work that you do, and especially your 
willingness to embrace the people of Flint, Michigan. You and I 
had a brief conversation about that last week, and I want to 
thank you publicly for your willingness to engage in that very, 
very sad situation.
    Mr. Chairman, I want to go back to the issue of the 
Affordable Care Act. I know that is a subject that some on this 
committee have talked about endlessly. But I want to go back to 
it from my perspective and to continue to say that the ACA has 
made a positive difference for more than 18,000 constituents in 
eastern North Carolina, which is where I am from, 18,000 
constituents.
    More than 18 million Americans who now have quality, 
affordable health insurance, that is, by any definition, 
progress. But many Americans, including 700,000 in North 
Carolina, are still missing out on the benefits of the ACA 
because our state governments have refused to expand the 
Medicaid program. It is absolutely a shame, and I will continue 
to say it every chance I get, it is a shame that 19 states in 
the United States have failed to expand Medicaid. They continue 
to block people from accessing healthcare funding which they 
have paid taxes for and rightfully deserve.
    I applaud the President's efforts to ensure that all 
states, regardless of when they decide to expand Medicaid, are 
eligible for 100-percent federal support for Medicaid expansion 
during the first three years of participation. Yesterday 
Congress Green and other Democratic members of this committee 
and I introduced legislation to codify the President's vision 
to incentivize Medicaid expansion.
    I also appreciate the President's efforts to combat health 
disparities for African-Americans and other subgroups in the 
2017 budget request. The prevalence of health disparities is 
alarming and can be seen in all areas of health from access to 
care to susceptibility to illness, to the lack of diversity in 
the healthcare workforce and in clinical trials. The 2017 
budget includes meaningful investments which can help improve 
access to care for underserved communities, develop new cures 
for diseases which disproportionately affect African-Americans.
    And so, as I close, Mr. Chairman, I simply want to ask the 
Secretary one, perhaps two, questions. At what point, Ms. 
Burwell, under current law will states that choose to expand 
Medicaid no longer be able to receive 100-percent federal 
support for their expansion? At what point do they lose it?
    Secretary Burwell. At this point they would not start with 
100 percent in terms of next year. And so, that is why we have 
proposed the legislation, because I think we think it is 
important for any state, whenever they come in, to have that 
benefit of the 100 percent.
    Mr. Butterfield. And so, it is your position and the 
President's position that this would help encourage the states 
to expand their program?
    Secretary Burwell. We do.
    Mr. Butterfield. You call it incentivizes the states to do 
it?
    Secretary Burwell. We want to encourage the states. As I 
said many times in that same session that you heard, probably 
you heard me say to the governors, ``I want to work with you to 
do it the way that works for your state.'' And that means a 
conversation one-on-one with every state, but we are willing to 
do that. This is that important. I am personally engaged with 
every governor who wants to have that conversation.
    Mr. Butterfield. And I know you are, and I thank you for 
that.
    I yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from New Jersey, Mr. Lance, 
five minutes for questions.
    Mr. Lance. Thank you, Mr. Chairman.
    Secretary, last August the Court of Appeals here for the 
District of Columbia Circuit issued a decision interpreting the 
Federal Vacancies Reform Act that would prohibit various acting 
federal officers from serving in positions for which they had 
been nominated but not yet confirmed by the Senate of the 
United States.
    The Department of Justice filed a petition seeking further 
review by the entire D.C. Circuit, and that was denied. A 
Washington Post article recently covered the story and quoted 
the Justice Department in saying that the Circuit Court 
decision here in the District of Columbia ``casts a legal cloud 
over a number of acting government officials,'' and I think it 
is in various departments, but your Department was cited.
    Do you know, Secretary, who is in an acting position in 
your Department subject to Senate confirmation who has not yet 
been confirmed by the Senate?
    Secretary Burwell. I do. I do because my Deputy Secretary 
for the Department--and I think you all know we are having a 
budget hearing. Right now, HHS is 25 percent of the federal 
budget. At HHS, it is over $1 trillion that we are managing. 
There is only one Deputy. At some departments, other 
departments, there are Under Secretaries. These are statutory 
constraints in terms of we have one Deputy.
    The Deputy that we have that we have nominated, we cannot 
find in our records or in the records of the administration 
anyone who has not been confirmed or had a hearing for that----
    Mr. Lance. Is that the only official in your Department who 
is before the Senate?
    Secretary Burwell. No, no, no, no.
    Mr. Lance. How many are there? How many are there, 
Secretary?
    Secretary Burwell. I think it is actually important, 
though. This is an important part of the process of making sure 
that we can do--you are an important oversight committee. My 
ability to run the Department well is about my ability to 
actually have people in place.
    The second person is Dr. Karen DeSalvo. Dr. DeSalvo has 
bipartisan support, has been voted out of committee, and it has 
a hold and hasn't been able to go to the floor because she has 
a hold. This is an ongoing----
    Mr. Lance. So, there are two officials in your Department?
    Secretary Burwell. This has been ongoing for an extended 
period of time. We are working with our committee Chairs. We 
are working with others on both sides of the aisle.
    But the question of our ability to----
    Mr. Lance. No, I want to know how many there are. Are there 
two? Is that the answer to my question?
    Secretary Burwell. That is the answer to the question who 
have been awaiting Senate confirmation.
    Mr. Lance. And has your Department reviewed whether or not 
this violates the Vacancies Reform Act, as has been suggested 
by officials in the administration?
    Secretary Burwell. We work with the Department of Justice 
to make sure that we are in compliance, and we work with them. 
The Department----
    Mr. Lance. And do you believe you are currently in 
compliance?
    Secretary Burwell. We believe that our Secretaries, as they 
are in their positions, are appropriately acting, and work with 
the Department of Justice in terms of what will be the 
appropriate next step.
    But I think it actually is important, though. As a 
government, this question of our ability to function, and the 
fact that not only that, and I am very thankful and 
appreciative that today I hope while we are in this hearing 
that Rob Califf will be confirmed for the FDA, and thanks for 
the bipartisan support on that one. But there are others as 
well, in terms of two times we nominated a head of----
    Mr. Lance. I have concerns about the fact that I think that 
all agencies have to follow the Federal Vacancies Reform Act. 
And if a person has not received confirmation, there may be, 
under the Federal Vacancies Reform Act, a cloud over that 
person's continuing in the office for which he or she has been 
nominated, not yet confirmed. Obviously, the Senate is an equal 
partner in the process, confirmation, and initial appointment 
by the President. I would hope that your Department would 
review that.
    Regarding medical device regulation, when are we going to 
have regulations regarding medical gas regulation? I am very 
concerned about that issue. The lack of regulations and lack of 
an approved label for medical gases has created confusion for 
both the FDA and the regulated community. I believe this has 
been going on for four years. We would like to work with your 
Department. Might you be able to discuss with us when the FDA 
could meet the statutory deadline for regulations that are 
supposed to be in place by July of this year?
    Secretary Burwell. I look forward to following up on 
specifically where we are in terms of that specific regulation.
    Mr. Lance. Very good. I think regulations have to occur by 
July, and I am concerned that----
    Secretary Burwell. And it is medical device?
    Mr. Lance. Medical gas regulation.
    Secretary Burwell. Medical gas?
    Mr. Lance. Yes.
    Secretary Burwell. Thank you. Thank you.
    Mr. Lance. Thank you. I will yield back 12 seconds.
    Mr. Pitts. The Chair thanks the gentleman.
    Now I recognize the gentleman from New York, Mr. Engel, 
five minutes for questions.
    Mr. Engel. Thank you very much, Mr. Chairman.
    Madam Secretary, welcome. I, too, received a call from, 
which I appreciated very much. I think it is just typical of 
your thoroughness and competency and the job you have done 
since you were appointed Secretary. And besides, my mother's 
name was Sylvia, so I had to like you from the beginning.
    Secretary Burwell. Thank you.
    Mr. Engel. I want to just piggyback at first on a comment 
that Mr. Butterfield made because it is something that has 
really been bothering me. I know that a lot of our friends on 
the other side of the aisle don't like the Affordable Care Act, 
and we voted 62 or 63 times to repeal it, which I think is a 
waste of time.
    Any major bills of this substance in the past have always 
been tweaked once the bill comes out and you see what works, 
what doesn't work. Nothing is going to work 100 percent. And 
so, if a bill is not doing everything we wanted it to do, we 
could make some legislative changes, and that is really the way 
to do it, not try to repeal it. But our friends on the other 
side of the aisle have refused to do that.
    What also is frustrating is, again, when governors are 
refusing to expand the Medicaid program. My mother Sylvia used 
to have an expression, don't cut off your nose to spite your 
face. And that is exactly what the Republican governors are 
doing that have refused to expand the Medicaid program to 
really help the citizens of their states.
    So, I am wondering if you could comment on anything I have 
just said.
    Secretary Burwell. So, you know, as we have spoken about a 
number of times in this hearing, I think it is so important to 
make that progress in terms of the coverage, in terms of the 
benefits that we can see through expansion. We see that both 
for individuals, and I have had the chance to meet those 
individuals as I have traveled across the country, in terms of 
what it means for them, whether it was someone being diagnosed 
with cancer and actually catching the cancer and being able to 
treat it, in terms of an extreme situation, or just the 
security of knowing that they have the coverage and can do 
prevention as well.
    But I think the economics are also equally important. That 
is about the individual, and that is important. But the 
economic issues in terms of hospital closures, in terms of 
uncompensated care, in terms of people's ability to pay their 
bills, are all things that are important consequences that we 
believe other states are already seeing the benefits from. We 
would like to see the rest of the states and, as I have said 
before, we are willing to work with any state on the approach 
that they think is right with them. We just want to make sure 
we meet the standards that you all have given to us 
statutorily, which is making sure that affordable care is 
available.
    Mr. Engel. Thank you.
    I would like to ask you a few questions involving Puerto 
Rico because you had mentioned Puerto Rico before. You 
mentioned it in your submitted testimony. Could you please 
describe the current economic situation there and how it has 
negatively affected the healthcare system there?
    Secretary Burwell. The economic situation is dire. 
Certainly, my colleague at the Treasury Department, Mr. Lew, 
has taken the lead in terms of both our talking about that 
issue as well as working with the Congress on fundamental 
issues that we think will make a difference to getting to a 
different place economically.
    But the healthcare issues are very closely intertwined. And 
so, the issues of legislation to help in terms of a way forward 
on the economics are very intertwined. The success of that is 
intertwined with healthcare. It is because, traditionally, 
payments have not been equitable, and we talked about that, 
touched on that a little bit earlier in one of the questions in 
terms of the payments on the Medicaid side.
    What that does is it leads to a number of things. 
Obviously, it leads to coverage issues in terms of what kind of 
coverage people get. It also leads to provider issues because 
providers aren't paid.
    What we have proposed in our budget is a proposal that over 
time would bring the payments in Medicaid to a more equitable 
space and at the same time require reforms in terms of meeting 
certain standards of the performance of the Medicaid program. 
So, we think that we have a proposal before the Congress that 
can complement in an extremely important way.
    I think right now with Zika, the numbers continue to rise. 
Today, this morning I got my briefing, 111 cases in terms of 
the U.S. In Puerto Rico right now, they are being spread by the 
mosquito there.
    We know the penetration of both dengue and Chikungunya in 
Puerto Rico. And so, this health issue, if those children, if 
pregnant women get Zika and have children with microcephaly, 
the cost is between a million and $10 million per child.
    Mr. Engel. So, it is really fair to say the situation in 
Puerto Rico is both an economic crisis and a healthcare crisis? 
That is what you are----
    Secretary Burwell. It is fair.
    Mr. Engel. And the President has laid out what I think is a 
very reasonable approach to addressing the issues at hand, and 
I hope this committee will give the President's proposal 
serious consideration.
    I want to ask you about your testimony. You described 
several steps the President has proposed to address the Puerto 
Rican crisis. Can you elaborate on his plan and what it does 
and how it aims to solve the problem?
    Secretary Burwell. So, I think the changes in Medicaid are 
the place where we have the most important proposal. It would 
do the changes over a period of time in terms of that payment. 
It would change the cap as well as change the payment matches 
over the period time, at the same time that reforms are 
required.
    Mr. Engel. And then, my last question is, wouldn't you 
agree that Puerto Rico is a prime example of the tremendous 
risk we would face if Medicaid moved to a block grant system, 
because of Puerto Rico's financing design, it is really not 
equipped with the flexibility it needs to adapt to financial 
downturns?
    Secretary Burwell. Yes, which is why you see monies in the 
supplemental proposal that you will be reviewing from us. Yes 
is the answer, and that is part of why you will see funding in 
the supplemental, because now they have a crisis in Zika.
    Mr. Engel. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    I recognize the gentleman from Virginia, Mr. Griffith, 5 
minutes for questions.
    Mr. Griffith. Thank you very much, Mr. Chairman.
    Thank you, Madam Secretary.
    This morning a new GAO, Government Accountability Office, 
report released found that in 2014 CMS did not resolve 
inconsistencies related to incarceration status for about 
22,000 applications, with $68 million in associated subsidies 
in the Federal Exchange. Some of these areas appear to have 
continued into 2015 and, with unresolved inconsistencies, CMS 
is at risk of granting eligibility to and making subsidy 
payments on behalf of individuals who are ineligible to enroll 
in subsidized coverage.
    CMS told the Government Accountability Office ``The agency 
elected to rely on applicant attestations on incarceration 
status.'' In other words, CMS is literally taking criminals at 
their word and relying on them to tell the truth.
    I want to give you an opportunity, if you are familiar with 
that. But, based on that situation, you can understand, I would 
suspect, why Americans often don't trust the agencies to not 
cut corners on administering the ACA, when they are not even 
going through and doing the due diligence, according to the 
Government Accountability Office, on making sure that folks who 
are incarcerated aren't receiving subsidies.
    Of course, I am concerned about this as a 28-year criminal 
defense attorney before I came to Congress. A lot of these 
folks are not known for telling the truth, and you all are 
relying on just a statement from them that they are not really 
in prison.
    Secretary Burwell. So, with regard to this report, I think 
that this is a continuation of a previous study. And I 
apologize, but----
    Mr. Griffith. Yes, ma'am.
    Secretary Burwell [continuing]. I think I have seen 
preliminary. In terms of the recommendations in this in the 
preliminary, we fully agree with those.
    But let me speak to the other. With regard to the issue of 
making sure the right people are getting any of the taxpayer 
subsidiaries, we take it very seriously. Last year alone, 1.6 
million people were taken off or had chances because we didn't 
have the information that we needed. That was done within a 
window, the statutory window, that we have given, which is 
about between 90 and 95 days, and we continued. So, 1.6 million 
people in terms of aggressively working.
    When the GAO report originally came out--and I think you 
know it was a secret shopper. So, the actions that were taken 
by these individuals, if you weren't the GAO, would have been 
criminal offenses that, as you know----
    Mr. Griffith. Yes, ma'am.
    Secretary Burwell. And I wasn't asking about that. My 
concern is--and, look, I do understand, so I don't want anybody 
out there watching on TV to think that you should have already 
read this report, because I had an opportunity to read it while 
you were answering everybody else's questions.
    [Laughter.]
    But it is of concern that it doesn't appear that some of 
the folks who work for you are taking it seriously when the 
folks who show up on the PUPS list, the Prisoner Update 
Processing System, you all have decided not to use that in the 
case of ObamaCare, but you are using it in the cases that 
relate to Medicare. You are using it for other purposes, but 
they decided not to use it in this case, and then, they are 
just relying on somebody's statement that they are not 
incarcerated. Each individual is different. Some may not be in 
there for a crime of moral turpitude but for some other crime, 
but, as a general rule, a lot of these folks are in jail 
because they lied about something in the first place or took 
money when they weren't supposed to. And we are just going to 
rely on their word?
    I would ask you to check into it. I know you haven't had a 
chance to read it, so I am not saying that you should have a 
ready-made answer. But I would say that you need to read it and 
you need to let us know, and we will do it as a followup, if 
you would. When do you suspect or when do you expect these 
problems to be fixed? Again, I am not expecting an answer this 
morning, but I would like to get an answer at some point in 
time.
    Secretary Burwell. I would be happy to. Aggressively, as 
issues are raised, we want to take care of them.
    Mr. Griffith. I do appreciate that.
    I had some other questions which I will have to submit. I 
see my time has run out and I don't even have time to finish 
the question, much less get an answer. We will submit those to 
you afterwards as well, but they relate to testimony previously 
in front of the committee relating to not giving the ability 
for states to have work programs as a part of the Medicaid and 
CHIP services. And we will follow up with that afterwards 
because----
    Secretary Burwell. Thank you.
    Mr. Griffith [continuing]. Like I said, it is a long 
question, and I don't even have time to get through it.
    But I do appreciate your being here today and always being 
willing to answer our questions.
    Secretary Burwell. Thank you.
    Mr. Griffith. And I yield back, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    Now I recognize the gentleman from California, Mr. 
Cardenas, 5 minutes for questions.
    Mr. Cardenas. Thank you very much, Mr. Chairman.
    In this committee we have been discussing the consequences 
of not properly investing in mental healthcare. The problem of 
insufficient mental healthcare shows up in our nation's jails 
more than anywhere else in the country, particularly jails 
where kids are locked up. Federal law does not allow kids 
enrolled in Medicaid to receive federal funds while in 
detention. But nowhere in the law does it say that these kids 
have to be kicked off of Medicaid. Yet, that is exactly what 
states are doing around the country. For them, permanently 
terminating Medicaid coverage is easier than suspending it 
temporarily. That is the states.
    When kids who already were on Medicaid are allowed to 
resume their needed access to mental healthcare services once 
they return home, the government saves millions upon millions 
of dollars each year when crimes go down because these children 
have access to their mental healthcare instead of having to 
wait months and months and months to get back into the system.
    Madam Secretary, can you talk about the Department's work 
to ensure that kids who are on Medicaid can stay on the program 
once they are back on the streets?
    Secretary Burwell. With regard to this issue, I think it is 
related to our broader criminal justice work and our second-
chance work that the President and the Attorney General are 
both very focused on. We are working hand-in-glove with the 
Attorney General and the Department of Justice to make sure 
that, both with regard to Medicaid or the marketplace, that we 
both meet the standards that Mr. Griffith has talked about, 
but, as well, making sure that those who come out have the 
opportunities that they need with regard to having healthcare. 
And so, it is across the board that we are working with the 
Department of Justice on it.
    Mr. Cardenas. Thank you.
    Access to reproductive healthcare for women and families is 
very, very important. I am glad to see that the President 
understands the value of critical reproductive health programs 
like Title X and the Teen Pregnancy Prevention Program and 
Personal Responsibility Education Program. It reflects in his 
budget proposal as well. I am glad to see that.
    During a time where we continue to see attacks on the state 
level to restrict access to reproductive health, national 
investments in family planning, cancer screens, STD testing, 
and sex education are more important now than ever to keep our 
families and communities healthy and safe. Latinas, in 
particular, are more likely to experience higher rates of 
reproductive cancers, unintended pregnancy, and face added cost 
and language barriers to getting healthcare.
    Secretary Burwell, could you talk about why it is important 
to invest in women's health? Can you share any information 
about efforts to target hard-to-reach populations?
    Secretary Burwell. So, the importance of the preventative 
services, I think everyone knows what difference they can make, 
whether it is in the whole area of reproductive health, but 
women's health in general. Mothers often, they are the last to 
go in terms of taking care of those preventative services.
    And so, there are a number of things that I would 
highlight. One is the importance that for all folks, because of 
the Affordable Care Act, that there are free preventative 
services without co-pays. So many people don't realize that and 
don't use those services, whether that is everything from your 
flu shot to some pre-cancer screenings.
    I think particularly with hard-to-reach populations, one of 
the most important things that has happened over the last years 
is that the drop in uninsured in the Latino population is 4 
million. So, those 4 million people now have access to quality, 
affordable care, and that is step one.
    Step two means, though, we have to take that coverage and 
make it actually care. They have the insurance, and so, doing 
that. And so, some of the programs that you mentioned and some 
of that work is in CDC in terms of the Center for Disease 
Control and Prevention.
    But we are working to make sure we are reaching those 
communities. We have something called Coverage to Care, which 
is an effort to make sure people who get that coverage 
understand how to access a primary care physician, understand 
how to go about using the care, because many people it may be 
for the first time they have it and they don't know. So, it is 
about the insurance, but it is also about the care and, then, 
it is about the public health issues that we are supporting and 
promoting.
    A Million Hearts is another one where there is a 
disproportionate number in the Latino community who have heart 
disease. The Million Hearts efforts is specifically targeted 
toward heart disease.
    Mr. Cardenas. Thank you for explaining what we are doing 
and what we should be doing more of. So, thank you.
    I was one of those uninsured for a portion of my life when 
I was a child.
    One way to make sure that we improve ourselves as a country 
is we need to pass the EACH Woman Act and Women's Health 
Protection Act, two proactive bills that can turn the tide in 
the right direction. So, once again, thank you for doing what 
you can with the resources you have.
    One of my colleagues mentioned what we are doing on ORR. My 
question is, what can Congress do and are we providing you the 
services necessary to do the job that you need to do?
    Secretary Burwell. We have a budget proposal with resources 
that we do need. So, I hope that will receive consideration.
    Mr. Cardenas. Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from Florida, Mr. Bilirakis, 
5 minutes for questions.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it.
    Thank you, Madam Secretary, for coming. And also, thank you 
for reaching out to us prior to the hearing as well.
    I have a couple of questions. CMS recently released a final 
rule for the Medicaid-covered outpatient drugs, but also 
requested comments on the definition of line extension drugs. 
As you know, there is a strong Member interest in ensuring that 
any further Medicaid drug regulations for line extensions 
specifically exempt abuse-deterrent formulations of drugs such 
as opioids to incentivize continued development of abuse-
deterrent formulations. We believe CMS can do this under 
current statute. However, the budget includes a proposal to 
tweak the statute in this case. Is the budget proposal intended 
to clarify the law or is it requested because CMS does not have 
the authority to clarify this administratively?
    Secretary Burwell. We would like statutory help with this.
    Mr. Bilirakis. OK. Well, that is the answer I wanted to 
hear because we can do that.
    Secretary Burwell. We need that. We need the help. I think 
across the board this question of how we treat abuse-deterrent 
drugs, the recent changes we just announced at FDA for how we 
are going to review opioids, new opioids coming to market, that 
we will actually consider the issues of addiction as part of 
the decision, not just is this drug safe and effective for an 
individual. These are important things, and I think they 
weren't necessarily always considered.
    Where we have administrative authority, we are going to use 
it. Where we believe we need some help, we are asking.
    Mr. Bilirakis. Very good. Thank you. Thank you.
    The next question, in the December of 2015 OIG report, the 
IG Office stated that CMS could not ensure that the advanced 
premium tax credit payments made to qualified health plan 
issuers were only for enrollees who had paid their premiums. 
CMS did not have a process in place to ensure that the premium 
tax credit payments were made only for enrollees who had paid 
their monthly premiums and was relying on insurance companies 
to provide that information. Does CMS now have policies and 
procedures in place to calculate premium tax credit payments on 
an individual level without relying on insurers' attestation 
and assurances?
    Secretary Burwell. Yes. We historically were using the 
processes we used for Medicare in terms of payments in that 
space, but we actually have gone ahead of that, and starting in 
January, it is on an individual basis. What that actually 
means--and you can see that it is happening--is the number----
    Mr. Bilirakis. This past January?
    Secretary Burwell. This January.
    Mr. Bilirakis. OK.
    Secretary Burwell. So, in place and we have seen the 
results in that the number of those enrolled in the marketplace 
actually is lower because we had more people come out. Because 
we are reconciling with the issuers on a real-time basis, on a 
policy basis, instead of an aggregate basis, is the answer to 
your question.
    Mr. Bilirakis. Very good. Thank you.
    The last question, on or about February 5th, CMS posted 
contractor instructions for its new demonstration that would 
test changes to the way Medicare reimburses Part B drugs--I 
know that Representative Shimkus touched on this--which 
currently uses the average sales price of the drug plus 6 
percent. Those instructions appear to have been taken down at 
the moment.
    What additional payment changes is CMS considering beyond 
the modifications to the ASP reimbursement rate? How will CMS 
select the drugs to which these additional payment 
modifications will apply?
    Secretary Burwell. So, with regard to that specific issue, 
it was an error. It went up. We will be coming out with 
followup on that soon.
    I think probably the most important issue that CMS is 
considering in this space is actually in the budget. So, it 
requires statutory change. It is the issue of negotiating 
authority for the Department with regard to specialty and high-
cost drugs in terms of ability for the Department to negotiate. 
And so, that is the most important one that, when you ask what 
are we considering, we have a budget proposal. Obviously, now 
that is with the Congress in terms of its consideration.
    Mr. Bilirakis. All right. Thank you very much. I appreciate 
it, Madam Secretary.
    I yield back, Mr. Chairman. Thank you.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from Indiana, Dr. Bucshon, 5 
minutes for questions.
    Mr. Bucshon. Thank you, Mr. Chairman.
    Thank you, Secretary Burwell, for being here.
    The Affordable Care Act has resulted in about 30 million 
people still uninsured. Many, in fact, the majority of people 
gaining insurance are through Medicaid expansion, which, as a 
provider--I was a heart surgeon before--I can tell you it 
doesn't guarantee access to the healthcare system, other than 
through the emergency room.
    On the exchanges, deductibles are increasing, premiums are 
up, insurance companies are losing billions of dollars, and 
there are reports that the administration, as was previously 
outlined by the chairman, is illegally making payments to prop 
up the exchanges.
    Non-exchange policy costs are skyrocketing, pricing 
businesses out of the marketplace. That is not my opinion. Just 
ask any business that is dealing with this.
    The 30-hour workweek requirements are hurting school 
districts, county governments, local governments on fixed 
budgets, resulting in loss of wages for the employees.
    The Meaningful Use Program, which, by the way, I am a 
supporter of electronic medical records--we had them in our 
practice since 2005--but the Meaningful Use Program, in my 
view, clearly needs pause because there are significant 
problems with it. The Doctor Caucus gave this opinion also to 
Dr. DeSalvo a couple of weeks ago.
    And the worst problem is the cost to healthcare is the 
biggest issue, in my view, and there is no significant effect 
on the cost of healthcare. Now that is true that payments 
through Medicare may be globally down, but the individual costs 
for services actually continue to rise.
    I am going to focus my question, though, on the Healthy 
Indiana Plan 2.0, which is, as you know, Indiana's answer to 
covering low-income citizens, which is a program that is 
working. Last month Congresswoman Susan Brooks, Senator Dan 
Coats, and I sent you a letter expressing our concern about 
CMS's decision to use what we consider a biased contractor to 
conduct ``independent review'' of Indiana's Healthy Indian Plan 
2.0.
    I know Governor Pence has been vocal about his concern with 
this second federal review led by a hired contractor that has a 
clear and documented bias against plans like Healthy Indian 
Plan 2.0.
    Mr. Chairman, I have a letter from Senator Coats, myself, 
and Susan Brooks that I would like to submit for the record.
    Mr. Pitts. Without objection, so ordered.
    [The information was unavailable at the time of printing.]
    Mr. Bucshon. I just wanted to reiterate that I think it is 
the wrong approach since the contractor is previously on the 
record being critical of Indiana's model and now is supposedly 
going to objectively help evaluate it.
    So, I am sure as you know, under the Federal Acquisition 
Rules, there are established organizational conflict-of-
interest rules. In the interest of real objectivity, would you 
commit to sharing CMS's analysis of the contractor's adherence 
to those standards with the committee and myself?
    Secretary Burwell. Congressman, I think I have responded to 
that.
    Mr. Bucshon. You have and I have read that letter. I don't 
have it on me, but I have read your letter.
    Secretary Burwell. And in that response, I articulate that 
the individual that is mentioned in terms of the issue of 
conflict is not an individual that is part of the review with 
regard to that.
    With regard to the broader----
    Mr. Bucshon. Well, that is different than our 
understanding, the Governor's, myself, our Senator, and a 
couple members of the Energy and Commerce Committee.
    Secretary Burwell. Then, we should go back. Our 
understanding of the individual that was mentioned in the 
communications that we have had, it may be----
    Mr. Bucshon. Well, it is the Urban Institute.
    Secretary Burwell. There is the issue of----
    Mr. Bucshon. So, how can CMS ensure the study is unbiased, 
given the Urban Institute's documented institutional bias 
against consumer-directed healthcare plans in Medicaid?
    Secretary Burwell. First, we run our usual contracting 
process, which you were referring to, in terms of that it is a 
separate contracting process, and Urban Institute does this 
type of work and has on a non-partisan basis for years.
    The question of the bias was in reference to an individual 
that is not affiliated with this piece of work. And so, maybe 
we have a misunderstanding.
    Mr. Bucshon. Maybe we are at crosshairs there----
    Secretary Burwell. Yes.
    Mr. Bucshon [continuing]. But the Governor and myself----
    Secretary Burwell. Yes.
    Mr. Bucshon [continuing]. Congresswoman Brooks, and Senator 
Coats didn't quite see it that way.
    Secretary Burwell. So, let's go back and try to understand 
whether we are talking about a different individual----
    Mr. Bucshon. OK. I appreciate that.
    Secretary Burwell [continuing]. Or making sure we 
understand fully the----
    Mr. Bucshon. Yes. Can you, then, submit to my office a 
further clarification of that?
    Secretary Burwell. Sure. Absolutely.
    Mr. Bucshon. I would appreciate that.
    RAC audits are an issue, and I know that was brought up. 
Both the contractors and in a couple of different areas, 
hospitals have millions of dollars sitting on the sidelines 
waiting after these audits saying they have improperly been 
paid through the Medicare program. And I have a list of the 
things that are supposed to be happening with the RAC audits to 
make sure they are accurate and fair, but I can just tell you 
that, from a practical standpoint, this is a big problem and 
they need to be reviewed further whether or not they are in 
compliance on an individual case-by-case basis.
    For example, there is an issue with Herceptin, which you 
probably know about, right? I can tell you my wife continues to 
practice anesthesia, and this is about multi-patient vials, so 
to speak. And I will submit that question for the record 
because I am behind. But the point is, in practicality, even 
though it says that you can use one vial for multiple patients, 
from a practical standpoint for safety reasons, liability 
reasons, that is difficult to do. So, I will submit that 
question, but that needs to be reviewed.
    Secretary Burwell. And I think we have reached out to make 
sure that we get the information from your staff on those 
specific examples.
    Mr. Bucshon. You have, yes. Thank you.
    I yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    That concludes the questions of the members present. We 
have time for one followup on each side. The Chair recognizes 
Ms. Castor for a followup on this.
    Ms. Castor. Thank you, Mr. Chairman. And, Mr. Chairman, I 
want to compliment you for having this hearing today because I 
also serve on the Budget Committee. Unlike the Budget 
Committee, where there was a break with decades of tradition in 
not inviting the OMB Director to come before the committee to 
discuss the administration's budget, you understand the 
importance of having this dialog and the ability to have 
members on both sides of aisle ask questions. So, thank you 
very much for holding the hearing today.
    And it is really too bad that the Budget Committee did not 
have that opportunity because, in order to tackle the long-term 
debt that faces this country, it is going to require bipartisan 
solutions. The CBO, the Congressional Budget Office, projects 
that the debt increase over the 10-year window will mainly be 
attributable to the aging of the population and its connected 
healthcare costs and Medicare and skilled nursing.
    The number of people who are at least 65 will increase by 
37 percent by 2026, from 48 million Americans to 66 million 
Americans. That is going to call on Medicare and skilled 
nursing like never before. So, we have got to work together to 
tackle these issues.
    And the problem with the Republican budget that has come 
out of the Budget Committee and, then, passed on the floor in 
the past years is that those fundamental overhauls such as 
block-granting Medicaid or turning Medicare into a voucher 
simply shifts the cost to Medicare beneficiaries, families, and 
states. And those are overly-simplistic solutions that are not 
going to work for American families, and it is not going to 
give us the opportunity to make the reforms in Medicare that 
are necessary to tackle the long-term debt.
    So, this is difficult. This requires bipartisan 
cooperation. There is no silver bullet.
    Madam Secretary, I would like to ask you here at the end of 
this hearing and after a few years in your job and as OMB 
Director, what gives you hope in reform? Is it prescription 
drug reform, the Accountable Care Organizations, payment 
reform? What do you recommend to us to work on in a bipartisan 
way to tackle the tough long-term debt issues driven by the 
aging American population?
    Secretary Burwell. So, I think that what gives me energy 
and gives me hope is that I believe we are at a transformative 
time and what was passed was actually in terms of what you all 
passed and gave to us to implement, is tighter constraints than 
we even had before in terms of the rules and the changes, and 
how we will push through change. And so, we are working very 
hard to implement it. And so, those types of things are 
extremely important.
    But what is happening right now, whether it is in the 
private sector or the public sector, whether it is the issuers 
and insurers or private companies, large self-employed 
companies, they are ready to make the change, because we all 
can't afford healthcare at these prices. And so, it is not just 
about Medicare. It is not just about the marketplace.
    I was thrilled to hear the commitment on delivery system 
reform, because for me that is probably the most important 
thing I can do in the next 10 to 11 months--it is actually 
under 11 months now--is make sure that we put in place the 
changes. Some of that has to do, we talked about the data and 
the data blocking and getting the help we need there. Some of 
it has to do with the support for the expansion of ACOs, the 
bundling, some of these other issues, understanding where we 
can make it better in terms of some of the oncology stuff we 
heard today. But that working in partnership is what I believe 
will make the long-term difference.
    And the other thing I think is extremely important, that 
this is owned by the Congress as well as the Executive Branch, 
because I think that will also make sure it is done in a way 
that is consumer-friendly and consumer-focused, as well as 
getting the change throughout the country. And it is not just 
about CMS or providers or insurers, but we can make it a broad 
change for the country.
    So, I am optimistic. This is hard, but I believe we are 
taking some of the steps that we know are going to get us 
there.
    Ms. Castor. Thank you very much.
    Mr. Pitts. The gentlelady yields back.
    Madam Secretary, as we have discussed on the phone, in 
hearings, several occasions, the California Department of 
Managed Health Care issued a directive mandating that all plans 
immediately include coverage for all legal abortions. And this 
has resulted in pro-life churches/schools being forced to pay 
for abortion coverage in their health insurance plans. This 
action by California is a direct violation of the Weldon 
amendment, which your Department is tasked with enforcing.
    Last year when you testified before us, you said, ``We have 
opened an investigation in the Office of Civil Rights at HHS to 
investigate. We take this seriously. We're trying to move 
through the investigation as expeditiously as possible.''
    Now this directive was issued 18 months ago. The 
investigation was launched 15 months ago. Still, no corrective 
action has been taken.
    So, here is my question: first, would you consider this to 
be an expeditious investigation? And secondly, what specific 
details about the investigation can you provide? What steps 
have been taken? Why has this matter not been resolved? And 
will you set a date by which corrective action must be taken?
    Secretary Burwell. Mr. Chairman, as you know, when you 
called, actually, originally, before the investigation started, 
yours was one of the calls. There are a number of your other 
colleagues that called. There were two or three colleagues that 
called. When you all had called, at that point I talked to OCR 
and we opened the investigation, because I take seriously the 
issues that you have raised and we are going to continue.
    The investigation is opened. It is not complete. Is it 
expeditious? I would have liked for it to have moved more 
quickly than it has moved, but the investigation is open and, 
until it is closed, I am not at a place to discuss in terms of 
what the investigation has yielded or will yield.
    With regard to the issue of timing, as I said, I am not 
satisfied with our speed, continue to work on that issue, but 
don't feel I can give you a specific timeframe because it is an 
investigation and I need it to run its ability and its course.
    Mr. Pitts. Thank you.
    I will yield to Dr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman. I will just take 30 
seconds.
    You talked about an engaged patient. The Commonwealth Fund 
talks about an activated patient. Consumer-directed health 
plans, HSA-type plans can help with this. There is the 
availability of a Medicare MSA, but it is impossible to find 
one. Nobody at 1-800-MEDICARE knows anything about them. No 
place on your Web site at medicare.gov can you go and get 
information on a Medicare MSA. My feeling is this is something 
where really you could involve the patient in helping to 
control cost and payment reform and product delivery.
    So, we really do need to work on this. It is something that 
has been available since 1996, but they are just vacant on the 
Web site.
    Secretary Burwell. It is not what I am familiar with. So, I 
will check and follow up and see where that stands. We will get 
back to you.
    Mr. Burgess. All right. Thank you.
    Mr. Pitts. Yield back.
    That concludes the questions that we have today. We will 
have followup written questions. We ask that you please 
respond.
    I remind the members they have 10 business days to submit 
questions for the record. So, they should submit their 
questions by the close of business on Wednesday, March the 9th.
    Again, Madam Secretary, you have been very patient, very 
forthright. Thank you very much for coming. A lot of good 
information here today.
    Without objection, the subcommittee hearing is adjourned.
    [Whereupon, at 12:33 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    
    
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