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S. HRG. 113–591 

NOMINATION OF SYLVIA MATHEWS BURWELL 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

ON THE

NOMINATION OF 

SYLVIA MATHEWS BURWELL, TO BE SECRETARY, 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

MAY 14, 2014 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

RON WYDEN, Oregon, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

SHERROD BROWN, Ohio 

MICHAEL F. BENNET, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

MARK R. WARNER, Virginia 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

ROB PORTMAN, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

JOSHUA SHEINKMAN, Staff Director 

CHRIS CAMPBELL, Republican Staff Director 

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee on 

Finance .................................................................................................................. 1 

Hatch, Hon. Orrin G., a U.S. Senator from Utah ................................................. 3 

Rockefeller, Hon. John D., IV, a U.S. Senator from West Virginia ..................... 6 

CONGRESSIONAL WITNESS 

Coburn, Hon. Tom, a U.S. Senator from Oklahoma ............................................. 5 

ADMINISTRATION NOMINEE 

Burwell, Hon. Sylvia Mathews, nominated to be Secretary, Department of 

Health and Human Services, Washington, DC ................................................. 9 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Burwell, Hon. Sylvia Mathews: 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 53 

Biographical information ................................................................................. 56 

Responses to questions from committee members ......................................... 68 

Coburn, Hon. Tom: 

Testimony .......................................................................................................... 5 

Hatch, Hon. Orrin G.: 

Opening statement ........................................................................................... 3 

Prepared statement .......................................................................................... 155 

Rockefeller, Hon. John D., IV: 

Opening statement ........................................................................................... 6 

Wyden, Hon. Ron: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 158 

(III) 

(1) 

NOMINATION OF SYLVIA MATHEWS 

BURWELL, TO BE SECRETARY, DEPARTMENT 

OF HEALTH AND HUMAN SERVICES 

WEDNESDAY, MAY 14, 2014 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 2:19 p.m., in 

room SH–216, Hart Senate Office Building, Hon. Ron Wyden 

(chairman of the committee) presiding. 

Present: Senators Rockefeller, Schumer, Stabenow, Cantwell, 

Nelson, Menendez, Carper, Cardin, Brown, Casey, Warner, Hatch, 

Grassley, Crapo, Roberts, Enzi, Cornyn, Thune, Isakson, Portman, 

and Toomey. 

Also present: Democratic Staff: Joshua Sheinkman, Staff Director; Jocelyn Moore, Deputy Staff Director; Michael Evans, Chief 

Counsel; Elizabeth Jurinka, Chief Health Policy Advisor; Anderson 

Heiman, Tax Policy Analyst; and Juan Machado, Professional Staff 

Member. Republican Staff: Chris Campbell, Staff Director; Kimberly Brandt, Chief Counsel, Oversight; Jay Khosla, Policy Director; Tony Coughlan, Tax Counsel; Nicholas Wyatt, Tax and Nominations Professional Staff Member; and Anna Bonelli, Detailee. 

OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR 

FROM OREGON, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The Finance Committee will come to order. 

The Finance Committee meets today to discuss the nomination 

of Sylvia Mathews Burwell to be the Secretary of the Department 

of Health and Human Services. If one thing has become clear in 

the month since the President announced Ms. Burwell’s nomination, it is that she is tremendously well-respected, not only by those 

she has led and worked with in the administration, but by Democrats and Republicans in the Congress as well. 

That should not come as any big surprise. Last year, the Senate 

confirmed her nomination to be the Director of the Office of Management and Budget by a vote of 96–0. That was a big and welldeserved bipartisan endorsement, and Ms. Burwell’s accomplished 

background and long record of results show why she has earned 

that respect. 

She is a graduate of Harvard and Oxford, where she was a 

Rhodes Scholar. She served in the Clinton administration as a top 

economic advisor to the President and the Secretary of the Treasury, and she has years of experience in the non-profit sector. First, 

2 

as chief executive officer and then as president of Global Development at the Gates Foundation, she led efforts to address some of 

the most pressing global health challenges of our times. As the 

head of the WalMart Foundation, she was a tireless advocate for 

the veterans’ hiring programs, and she was a leader in the fight 

against hunger in our communities. 

Ms. Burwell has also been a steady hand and an effective, communicative leader at the Office of Management and Budget. She 

helped navigate the difficulties of the government shutdown last 

fall, and, in the year that she has served as Director, the Federal 

deficit has continued to plummet. 

There is also one other important fact to keep in mind as the 

committee considers Ms. Burwell’s nomination. That is, you simply 

cannot lead this generation’s Office of Management and Budget 

without being thoroughly steeped in health care. Health care is 

simply the biggest structural challenge in the budget and an essential part of the job. 

Now, everyone understands the biggest task ahead for Ms. 

Burwell, should she be confirmed as HHS Secretary. The Affordable Care Act will be her central focus each day she serves as Secretary. My view is, there are plenty of ways both parties can work 

together to improve the law and ensure America does not go back 

to the days when health care was just for the healthy and the 

wealthy. 

Now, there is also a great deal of promising news about Medicare 

for Ms. Burwell to build on as Secretary. For example, Medicare’s 

rate of spending growth is slowing. According to the latest data, 

spending went up by only 1.9 percent over a 2-year period. That 

is slower than the overall economy, and it is far behind the historic 

pace. The cause of lower premiums and a stronger, more secure future for Medicare is significantly boosted by these developments. 

With the bipartisan support of members of this committee, there 

have been big improvements in Medicare transparency. As the 

country’s largest single purchaser of health care, Medicare has to 

lead the way in making sure that all consumers and taxpayers 

have the information they need to get the best value for their dollar. We look forward to working with you, once you are confirmed, 

to continue that effort, Ms. Burwell. 

Next, the Congress has never been closer to repealing the flawed 

Medicare physician payment system and replacing it with bipartisan reforms that reward the quality of care rather than the quantity of care. I am looking forward to working with you again, Ms. 

Burwell, once you are confirmed, to fix the Medicare physician payment system this year. After that is accomplished, the committee 

looks forward to working with you on what I view as the single biggest challenge for Medicare’s future, that is, dealing with chronic 

disease. 

Outside of the health care arena, the committee is going to have 

to maintain its close relationship with the HHS Secretary on issues 

like foster care, child welfare, and family support services. Today 

I will wrap up by congratulating our nominee and thank her for 

joining the committee today. The Senate’s 96–0 confirmation vote 

for your current role was clear evidence that you are respected for 

your commitment to work with people and for your thoughtfulness. 

3 

Following a thorough review, I hope to have your nomination approved by the committee and the Senate as quickly as possible and 

with equally strong bipartisan support. 

[The prepared statement of Chairman Wyden appears in the appendix.] 

The CHAIRMAN. Let me recognize Senator Hatch now. 

OPENING STATEMENT OF HON. ORRIN G. HATCH, 

A U.S. SENATOR FROM UTAH 

Senator HATCH. Well, thank you, Chairman Wyden. I appreciate 

you convening this hearing to consider the nomination of Sylvia 

Mathews Burwell to serve as Secretary of the Department of 

Health and Human Services. I am very pleased that you have one 

of my all-time favorite Senators here to testify for you, really a doctor in the Senate, who has served the Senate very, very well. 

I want to thank Director Burwell for her willingness to serve in 

this capacity. It is a tough job. Director Burwell, let me start by 

saying something that I think you already know. If you are confirmed to this position, you will have your work cut out for you. 

The size and scope of the Department of Health and Human Services surpasses that of any other Federal Cabinet-level department. 

The HHS fiscal year 2014 budget totals almost $1 trillion, which 

makes it larger than that of even the Department of Defense, basically double what the Department of Defense is. More importantly, 

HHS touches the lives of hundreds of millions of people. From cradle to grave, HHS oversees many programs, from finding and approving new treatments for diseases to providing a safety net for 

those who have run out of other options. The agencies under the 

HHS umbrella include the National Institutes of Health, the Food 

and Drug Administration, the Centers for Disease Control, and the 

Centers for Medicare and Medicaid Services, or what we call CMS. 

CMS alone is the world’s largest health insurer, with an annual 

budget of roughly $860 billion. While I believe you have the qualification to do the job, there is still much you will need to do in 

order to assure members of this committee that HHS is heading in 

the right direction and that your leadership will help steer the 

agency through the very turbulent times that we know lie ahead. 

One of the greatest challenges facing HHS is shoring up the Federal and State-based health insurance exchanges. Ensuring that 

the exchanges are operating efficiently and effectively will be one 

of your biggest challenges. Recent reports of the numerous issues 

being faced by the State exchanges attempting to implement the 

law have been cause for great concern among many members of 

Congress, including some on this committee. 

As part of the Affordable Care Act, States are required to have 

an online health care exchange where citizens can go and shop for 

health insurance. States have the option of either building their 

own exchange, using the exchange provided by the Federal Government, or a hybrid. Every State is given a $1-million grant for the 

purpose of determining what type of exchange they would implement. Additional grants were given in stages for those States that 

are building all or part of their own health care exchange. HHS 

also awarded seven early innovator grants to States that quickly 

4 

decided to build their own exchange, in order to help support the 

development and implementation of the necessary IT systems. 

In total, HHS paid $4.7 billion to help States build their exchanges. What is troubling is that at least seven States and the 

District of Columbia failed to build a successful website and exchange. These seven failing States received more than $1.25 billion 

from HHS to build their exchanges. That is a huge amount of taxpayer dollars that has apparently been spent with little or no accountability. 

Now, many of these States are looking to rebuild their systems 

and are seeking additional funds from the Federal Government. 

That is why today I am joining Senator Barrasso in introducing the 

State Exchange Accountability Act. This bill requires States that 

operated a State-based exchange in 2014 and then decided to abandon that exchange to repay all of the establishment and early innovator grants that they received from HHS. 

In addition to overseeing this massive new expansion of benefits 

the exchanges have created, you are also going to be charged with 

helping to ensure the longevity and the solvency of the existing 

Medicare trust fund, which is projected to go bankrupt in 2024. All 

told, between now and 2030, 76 million baby boomers will become 

eligible for Medicare. Even factoring in deaths over that period, the 

program will grow from approximately 47 million beneficiaries 

today to roughly 80 million beneficiaries in 2030. Maintaining the 

solvency of the Medicare program while continuing to provide care 

for an ever-increasing beneficiary base is going to require creative 

solutions and a skillful Secretary at the helm working with CMS, 

and I am counting on you to be that. 

Finally, one of the most important responsibilities that you have 

to this committee is to be responsive. I have heard several commitments made by nominees in these confirmation hearings about providing timely and substantive responses. More often than not, I 

have been deeply disappointed. So I hope today that your commitment will stand the test of time beyond your confirmation, because 

words and promises matter a great deal to me, and I think to other 

members of the committee. I hope you will be up to that challenge. 

Like I said, overseeing the complex infrastructure of a department like HHS is not a job for the faint of heart. Naturally, I wish 

you the best of luck as you work to address these challenges and 

as you continue going through the confirmation process. You are 

going to need all the luck you can get. But I am grateful to people 

like you who are willing to take on these tough responsibilities and 

lend your best expertise to them. We are grateful that you are willing to serve. 

Thanks, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Hatch. As we have done ever 

since Chairman Baucus went to China, you and I will be working 

very closely in a bipartisan way on this, and I thank you for it. 

Senator HATCH. I think we will. Thank you. 

[The prepared statement of Senator Hatch appears in the appendix.] 

The CHAIRMAN. Director Burwell, before we get started with your 

testimony, it is a Finance Committee tradition to have the nominee 

5 

introduce any family members who are here today, so why don’t 

you do that? 

Ms. BURWELL. Thank you. Thank you, Mr. Chairman. I would 

like to introduce my husband Stephen Burwell, my sister Stephanie O’Keefe, and two very good old friends, Jackie Long Ebert and 

Linda Lurie. Thank you. 

The CHAIRMAN. Thank you. We are glad you are here. As Senator 

Hatch noted, public service is not, for a family, exactly for the 

faint-hearted either, so we are glad that all of you are here. 

Now, the ever-gracious Chairman Rockefeller, who is here to welcome another West Virginian, has as always been very gracious. 

Dr. Coburn is on a tight time schedule. Dr. Coburn, why don’t we 

begin with you, and then we will have an introduction from homeState Senator, Senator Rockefeller. 

STATEMENT OF HON. TOM COBURN, 

A U.S. SENATOR FROM OKLAHOMA 

Senator COBURN. Thank you very much, Mr. Chairman. First of 

all, let me say what a privilege and an honor it is to be able to introduce Ms. Burwell to the committee. I have worked with her for 

the last year or so and prior to her confirmation as OMB Director. 

I actually look for people who have strong traits, and the fact 

that she is willing to make this family sacrifice—and it is a family 

sacrifice—to me is very reassuring for us as a country. 

I thought I would talk about five areas of Sylvia Burwell that 

maybe not everybody else knows. The first is, she is competent. To 

me that says something, because so often we have people placed in 

positions in Washington who are not competent for the task at 

hand. 

The second thing is, she has an outstanding character, and I 

have experienced that over the past year in working very closely 

with her and the people at OMB on the problems that we have 

seen at Homeland Security, both on cyber and other areas. So the 

fact is, when you have somebody who is competent and also has 

strong character, you find a way to get past your differences to try 

to solve problems. 

Third, as Senator Hatch mentioned, responsiveness is a key for 

the Congress. I have to tell you, I found her remarkably responsive. 

My partner at Homeland Security, Tom Carper, has as well. That 

comes along with her commitment. The fact is, she is going to be 

committed to do the right things and to keep Congress involved. I 

will let her answer those questions on her own. 

Another trait that I think will make her an outstanding Secretary is, she is a great listener. Even when she has her mind 

made up, which sometimes happens, she will listen to another 

point of view to gain information that she might not have. That is 

a characteristic too often that we do not see as members of Congress and members of the administration, whether they are Republican or Democrat. 

Then finally, because she is from West Virginia, Hinton, a town 

of 3,000 people, she comes to Washington with a lot of common 

sense. My favorite quote is, ‘‘There’s a thimble and a half full now 

of common sense in Washington, and she’s the half.’’ 

6 

So it is my pleasure to recommend her to my colleagues on the 

Finance Committee. I will support her nomination on the floor, and 

I will do everything to help her be successful at Health and Human 

Services, if she is so given that responsibility. I thank the committee. 

The CHAIRMAN. Senator Coburn, thank you very much for those 

powerful words and the focus on competence, common sense, and 

accountability. That is really the coin of the realm in terms of a 

nominee, so we are very pleased that you are here. I know you are 

on a tight time schedule, and we will excuse you at this time. 

Chairman Rockefeller is here for another West Virginian. 

OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 

A U.S. SENATOR FROM WEST VIRGINIA 

Senator ROCKEFELLER. I too want to thank Senator Coburn. Ms. 

Burwell, it is not usual to get introduced by him in such terms. He 

has a very strict judge of character and has a strong moral aspect 

to everything he does. I am very happy that he has introduced you. 

It is an easy thing for me to do. 

But first I have to point out something of interest. The Commerce Committee was going to have a really interesting hearing in 

this room today on the NCAA and the whole concept of the student 

athlete, or is that really athlete student, and what are we doing, 

what is the NCAA doing, what are universities doing, to make sure 

that athletes are getting the academic training that they need to. 

I think it is going to be a very interesting hearing. 

The reason we were going to come to this room is because it was 

going to be absolutely packed, because it is a subject of great controversy, and the NCAA is very unhappy that we are having the 

hearing. But then we were pushed aside by a higher order. 

But for today’s hearing, actually this room is not even half full. 

What makes me happy about that is, I think there is a general understanding in this body, and certainly on this committee, that you 

are that really competent person who relishes challenges and can 

balance challenges with family responsibilities. I mean, you are 

just that way, and that is one of the wonderful things about growing up in a small community. 

So I introduced you for the first time 16 years ago, and you were 

becoming Deputy Director of the OMB at that point. More recently, 

I introduced you again to become Director, and that was easily 

done. Today, I could not be more proud to speak for you and to 

present you to this committee. 

I have done this a lot with people, but I do not think I have ever 

been as proud of the person, and as sure of my feelings, as I am 

about you. I have respect for your intelligence, for your integrity, 

what I would call a ferocious integrity. You have a work ethic beyond contemplation, but all the while you are relaxed. You appear 

relaxed, anyway. 

As Senator Coburn said, you do listen. You are a very good listener. That is terribly important. The business of writing letters 

you will do, not because you have to do it but because it is in your 

interest to do it, and you will find a way to do it. I think you are 

going to be a superb, superb Secretary. 

7 

The Department is absolutely gargantuan in size, and it affects 

millions and millions of Americans. It is food and drug supply, protection of our country from outbreaks of disease or bio-terror attacks, the medical research that we rely on for cutting-edge treatments but which we are under-funding, and the Federal investments in global health, which I think most people do not know that 

much about and do not necessarily associate with your position. 

I think it is impossible to overstate how important it is that the 

Secretary of HHS have that degree of organizational intuitive skill, 

not that they have to work at it hard, but it is just borne with 

them, and it is part of how they do things. People come to understand that, and they draw people to them because of, in the words 

of Senator Coburn, competency. Competency is a cherished commodity. When people are in a very high position and have that, 

people want to come work for them. People want to work harder 

for them. The country feels prouder of them, and maybe even the 

press is nice to them. 

So anyway, here you are, a proven manager, both public and private, and so much the right person for this job that it is just a 

cliche ́ to even say it. Yes, the fact that you are a proud native of 

Hinton, WV, 3,000 people, is very important. It is very important 

in character formation and in one’s world view. In that case, not 

a large world view, but in the currents of your life, a total world 

view. 

I have known Sylvia her entire life and her wonderful parents, 

Cleo and Bill, and her family and friends from Hinton. I have attended church with your family. I was at your wedding reception. 

You interviewed me, I think you told me, when you were 6 years 

old on the Hinton County courthouse steps. I have no idea what 

the question was, but I probably did not answer it very well. I was 

probably terrified. [Laughter.] 

But the effect then is that I just have a deep and abiding feeling 

about you and, because of you, your family. I think your family and 

you come together in a perfect way in American life. 

You are brilliant—you will not say that, so I will have to do it 

for you—as has been indicated—Harvard, Rhodes Scholar—and yet 

somehow you remain humble, always hardworking. 

Again, I use this term ‘‘ferocious integrity,’’ which means everything to me. Sort of the central devotion of your purpose of public 

service is to help people better their position in life. You do not 

focus just on one group, but everybody has to have a better shot 

in life, and you are possessed by that public passion. That had to 

come partly from your grandparents, because they got here and 

they somehow helped instill that in you. 

You could have made a fortune when you graduated from Harvard and gone to anyplace in the world, any law firm. You did not. 

You headed directly into public service. You spent the majority of 

your life in public service, which is filled with controversy and not 

enormously high wages, a lot of frustration, and a lot of sleepless 

nights. 

When you have not been doing that, you have been working for 

organizations that were trying to do that: the Gates Foundation 

and out in Bentonville, that foundation. In both cases, you were 

working on a worldwide basis, and when we met in my office we 

8 

were talking about one of the things I want to work on after I leave 

the Senate, which is on baby teeth, the health of teeth, which most 

people overlook but which is absolutely essential in the morale and 

self-confidence development of any young person, and in Appalachia is a real problem. You have spent a great deal of your time 

at the WalMart Foundation doing exactly that. 

When it comes down to it, you want people to have health insurance. You want them to have that peace of mind. I do not need to 

do this, but I am going to do it because I so enjoy doing it. Your 

service in the Federal Government is absolutely unmatched—the 

Clinton administration Staff Director for the National Economic 

Council. Well, wow. I mean, that is complex stuff. Not that anybody 

could tell you what goes on there, but the future of the country depends enormously on what does go on there. 

Chief of Staff to Secretary Robert Rubin, Deputy Chief of Staff 

to the President of the United States, Deputy Director of the Office 

of Management and Budget, and then Director of that agency—you 

were central to crafting the Clinton budget in the late 1990s, which 

led to budget surpluses for 3 years in a row, something almost impossible to imagine, and enormous growth economically in our 

country. 

You learned—I have down here through your work with the Clinton administration, but that is nonsense. You just worked because 

of the way you are; you could work across the aisle with other people. It is your instinct to try to find common ground. 

You are very, very tough. I am thinking of the example that we 

discussed about the respirable dust decision in underground mines. 

I wanted it to be one, it is now two—I apologize to the audience 

for not going into this—and Ms. Burwell did the right thing and 

she came down at 1.5, which was the first time in 41 years that 

the U.S. Government had addressed the problem of breathable 

dust—or unbreathable and die dust—leading to Black Lung. I 

mean, it was a remarkable decision. You made that decision, and, 

because of it, it is now in effect. 

Your philanthropic works speak for themselves. You are going to 

be speaking for yourself. I just cannot think of anybody more perfect to head HHS. There were so many bumps in the road. I think 

that is innate, and we discussed that—enormous programs with 

vast consequences. I do not think it ends. 

I think there will be a period of 15, 20 years before things kind 

of settle out and the various nooks and crannies are taken care of 

and people feel comfortable. All of a sudden, they will just realize 

they feel comfortable, and then you just get down to the business 

of doing health care. 

So we need you, Sylvia Mathews Burwell, very, very much. I 

think you can gather from my statement that I am probably going 

to vote for you. [Laughter.] 

But you are not just about budgets. You are about people, and 

you are about fighting for people whom other people will not fight 

for, and you are about fighting for people who could use a little 

help, and you are fair to people who do not need any help. You are 

just a fair person, a tough manager, and probably the smartest person in the city. 

9 

Mr. Chairman, I am proud to present to you Sylvia Mathews 

Burwell. 

The CHAIRMAN. Thank you, Chairman Rockefeller. That was a 

wonderful introduction. I will tell you, Director Burwell, I am really curious what you interviewed Chairman Rockefeller on when you 

were 6. [Laughter.] So perhaps we will learn that secret one day. 

Now at this point, we would like you to deliver your testimony, 

then we have four standard questions for nominees that we will, 

I think, be able to deal with quickly, and then we will begin questions from the Senators. So we will make your prepared remarks 

a part of the record in their entirety, and please proceed. 

STATEMENT OF HON. SYLVIA MATHEWS BURWELL, NOMINATED TO BE SECRETARY, DEPARTMENT OF HEALTH AND 

HUMAN SERVICES, WASHINGTON, DC 

Ms. BURWELL. Thank you, Chairman Wyden and Ranking Member Hatch, members of the committee. I want to thank you for inviting me here today. I am honored that President Obama has 

nominated me for the Secretary of Health and Human Services, 

and it is a privilege to appear before this committee. 

I want to thank Senator Rockefeller and Dr. Coburn for their 

kind words. I am honored to be introduced by two such extraordinary public servants who have both spent their lives helping others and delivering for the American people. 

I am especially grateful to my husband Stephen and our children 

for their tremendous support. And, while my parents could not be 

here with us today, I want to recognize them for their instilling 

within me and my sister the enduring value of public service. 

As a second-generation Greek immigrant, I was raised to be 

thankful for the tremendous opportunities this great Nation offers 

and to appreciate the responsibilities that come with those opportunities. Throughout my childhood in Hinton, WV, my father, an optometrist and small business owner, and my mother, a teacher, set 

a great example for me and my sister through their engagement in 

service through our community and our church. It is that example 

that is an important part of why I stand here today. 

Whether in the public or private sector, working across a range 

of issues, I focus my work on three things: building strong teams, 

strengthening relationships, and delivering results. In my role as 

OMB Director, I have worked closely with members of this committee and others to support efforts to return the budget process 

to regular order and drive towards progress on issues that we all 

care deeply about. 

If confirmed, I look forward to working alongside the remarkable 

men and women of the Department of Health and Human Services 

to build on their work to ensure that children, families, and seniors 

have the building blocks of healthy and productive lives. These 

issues are fundamental to all of us, whether it is the chronic condition of a child we love or the safety of the food we eat every day, 

so I respect and appreciate the importance of the challenges before 

us. 

As we meet here today, scientists and researchers at the National Institutes of Health are working to find cures for some of the 

world’s most serious diseases, and experts at the Centers for DisVerDate Mar 15 2010 19:10 Mar 13, 2015 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 R:\DOCS\93658.000 TIMD
10 

ease Control and Prevention are working to prevent them from 

spreading. The Food and Drug Administration is protecting the 

food we eat and the medications our doctors prescribe us. Our parents and grandparents rely on the Centers for Medicare and Medicaid Services, and millions of our children benefit from Head Start. 

Thanks to the Administration for Community Living, millions of 

Americans are living with dignity in their own communities. The 

Department’s work to ensure accessible, affordable, quality health 

care through the implementation of the Affordable Care Act is 

making a difference in the lives of our families and our communities, while strengthening the economy. Together, all this work 

forms the foundation of a stronger middle class, a more prosperous 

economy, and healthier communities. 

Mr. Chairman and members of this committee, thank you again 

for the invitation to speak with you today. I have valued the conversations that we have had over the course of the past several 

weeks, and I am hopeful that we will have the opportunity to continue to work together closely in the months ahead to deliver impact for the American people. 

With that, I would be pleased to answer your questions. Thank 

you. 

[The prepared statement of Ms. Burwell appears in the appendix.] 

The CHAIRMAN. Director Burwell, thank you. We have several 

questions that are essentially standard questions for all nominees, 

so let me just go through those now. 

Is there anything that you are aware of in your background that 

might present a conflict of interest with the duties of the office to 

which you have been nominated? 

Ms. BURWELL. No, sir. 

The CHAIRMAN. Do you know of any reason, personal or otherwise, that would in any way prevent you from fully and honorably 

discharging the responsibilities of the office to which you have been 

nominated? 

Ms. BURWELL. I do not. 

The CHAIRMAN. Do you agree without reservation to respond to 

any reasonable summons to appear and testify before any duly constituted committee of Congress, if confirmed? 

Ms. BURWELL. I do. 

The CHAIRMAN. Do you commit to provide a prompt response in 

writing to any questions addressed to you by any Senator of this 

committee? 

Ms. BURWELL. Yes, sir. 

The CHAIRMAN. Very good. 

What we will do now, colleagues, is we will all proceed with 

questions, and we will go with the 5-minute round. 

Let me, if I might, start with a question about another priority 

of the committee—we have already identified that we will have 

many questions about the Affordable Care Act. That question is 

about fixing this broken-down system of reimbursing physicians 

under Medicare. What has happened is, we have a system that is 

poorly coordinated and does not reward quality. 

What the Congress does is just put patch after patch after patch 

on it. We are now on something like our 17th patch. During the 

11 

most recent debate, Senator Murphy was in the chair when we 

were discussing this, and he is the youngest U.S. Senator. I looked 

up and said, I do not want, when Senator Murphy is eligible for 

Medicare, for us to still be patching and patching and patching 

some more. 

So the President, in his budget, made a commitment to working 

with the Congress to reform this, and particularly to repeal the 

SGR and replace it with a system that would reward coordinated 

care and reward quality. Our colleague Senator Hatch, in my view, 

deserves a great deal of credit for this effort. If confirmed, will you 

commit to repealing and replacing the current broken Medicare reimbursement system for physicians before the end of this year? 

Ms. BURWELL. Senator, I am very glad that you have raised the 

issue, and I am very glad that in my meetings—and this is something that is bipartisan—this issue has come up and that, even 

though there is a fix that takes us till March, people are interested 

and excited about a permanent fix. 

There is bipartisan legislation, bicameral support, for changes 

that can help get us there. You yourself have played a leadership 

role in proposals that will make a difference. If I am confirmed, 

and in my current role, I am excited about the opportunity that we 

can work together to get a permanent solution that has both reforms which are important and a permanent solution that helps 

our physicians have predictability through time. So for those reasons, that is something that I would look forward, if confirmed, to 

working on, and in my current role am excited to work on as well. 

The CHAIRMAN. Thank you. It is clearly urgent business, because 

we can get it right now at rock-bottom prices. I mean, it is only 

going to get more and more expensive, so we appreciate your commitment on that. 

Let us turn to chronic disease. There has been bipartisan interest 

in this committee on it. I see my colleague Senator Isakson; Senator Toomey and Senator Bennet have had a great interest in this. 

The reality is, Medicare in 2014 is dramatically different than 

Medicare when the program began in 1965. It is largely about cancer and diabetes and stroke and heart disease and Alzheimer’s. So, 

if a senior breaks their ankle, and we certainly hope that does not 

happen, that is something like 15 percent of Medicare. It is really 

all about chronic disease. 

I would be interested in your thoughts about how Medicare can 

step up and address this extraordinary challenge, because this is 

really going to be what Medicare is all about. I am very appreciative of my colleague from Georgia. He and I have introduced a 

bill which my colleague, Senator Isakson, appropriately named the 

Better Care, Lower Cost Act. Congressman Welch and Congressman Paulsen in the other body have been supportive as well. As 

I mentioned, Senator Toomey, Senator Bennet, and a number of 

Senators have interest in this. 

What is your take about the next best steps to address what is 

going to be the premier challenge for Medicare in the years ahead? 

Ms. BURWELL. The issue of chronic disease is one that I actually 

think cuts across the entire Department. Certainly Medicare is 

where it is being paid for, and a big part of the delivery of that 

service is with regard to chronic care. But I actually think one also 

12 

needs to back up to NIH and the issues of research and all through 

the issues of CDC and actual delivery, as well as the Health Resources and Services Administration, in terms of how we train our 

providers. 

So the issue of chronic disease, I think, is one of the things—as 

we think about many health care issues, but particularly one as 

large and influential as this—that you need to think about across 

the pieces that are within the Department so that we are getting 

the right solutions in place, the right data and analytics that show 

us how we can work on these issues at the front end of them, before they get to the point where they are costing us so much. 

We work on the delivery systems in terms of how we, as both 

communities and directly within hospital systems and insurance 

systems, are providing that care. So I think Medicare is an important part of it—and the tools that we can use in Medicare, because 

it is such a large and influential part of the system—but I think 

we have to think about it across a number of different areas, including with providers. 

The CHAIRMAN. Let me see if I can get one other question in, because I am in effect starting the questioning. Obviously with the 

ACA, it is all about improving access, improving quality, decreasing 

costs. But I think, as with any landmark law, there are challenges. 

Since we are starting now, I think it would be helpful if you 

could just briefly outline—because you are going to get plenty of 

other questions, we know—what are going to be your priorities in 

terms of ensuring the success of the Affordable Care Act? 

Ms. BURWELL. With regard to the Affordable Care Act specifically, when I think about the Act, there are three main things that 

seem to be, for me, the North Stars: one is access; the second is 

affordability, and that is affordability for the individual, affordability for actually the government in terms of all that we spend 

that has been mentioned, as well as affordability for our economy; 

and the third issue is quality. 

When I think about the Act and the implementation of it, what 

I want to do is, if I am confirmed, work to try to maximize against 

all three of those areas and think about the ways that we can do 

better. 

The CHAIRMAN. Senator Hatch? 

Senator HATCH. Well, thank you, Mr. Chairman. 

Ms. Burwell, one of the most sacred responsibilities that we as 

public servants have is to safeguard the hard-earned taxpayer dollars that American families entrust to us. Now, seven States, including the District of Columbia, are having a dismal time building 

their own exchanges. In fact, the failure in some of these States is 

nothing short of spectacular. 

Two of the States are abandoning their broken websites. Based 

on the most recent reports, these States have received more than 

$1.25 billion to plan and build their exchanges. Now, some of these 

States are looking for additional Federal funds to continue their 

failed experimentation, at least in my view. 

So I have two very simple questions to ask you, and I would really appreciate a ‘‘yes’’ or ‘‘no’’ answer to these, if you can. First, do 

you believe that these States that have so negligently managed 

their funds should be required to reimburse the taxpayers for their 

13 

incredible failures? If you could say ‘‘yes’’ or ‘‘no,’’ I would appreciate it. 

Ms. BURWELL. Senator, with regard to the specifics of each of the 

State cases, that is something, if confirmed, I would want to learn 

about. I think what I would say ‘‘yes’’ to is that we need to understand and, where the Federal Government and the taxpayer had 

funds misused, we need to use the full extent of the law to get 

those funds back for the taxpayer. 

Senator HATCH. All right. The second question is, can you give 

me and the American taxpayers a public commitment today that 

HHS will not give any more dollars to those failed exchanges for 

more failed experiments? 

Ms. BURWELL. Senator, with regard to the specifics of how the 

exchanges and those funds go forward, I guess what I would do is 

right now—because I am not familiar with the specifics because I 

am not there—there are three things: (1) we have to understand 

what went wrong; (2) when we do understand that, as I said, we 

need to go to the full extent of the law, if there are contractors or 

others that have misled through their contracts or other things, to 

fully recover; and (3) I think we need to make sure that we both 

learn from the mistakes of the exchanges that are not working and 

learn from the exchanges that are, such as Washington State’s 

where Senator Cantwell is from. 

Senator HATCH. All right. 

Now, your first and foremost responsibility as an appointed official is to be accountable to Congress and the American people. 

Now, one important way Congress fulfills its obligation to the taxpayers is by asking for information about your Department’s activities. Over the past year, we have sent at least five letters to HHS 

that have gone unanswered. Responses to questions for the record 

take months. In fact, we now need action-forcing events like this 

confirmation hearing to get answers, which are often incomplete. 

My colleagues all share similar frustrating experiences. So I 

have, again, two straightforward questions to you: (1) do I have 

your public commitment today that you will respond to our inquiries in no more than 30 days? 

Ms. BURWELL. Senator, with regard— 

Senator HATCH. Unless you ask us for extra time. 

Ms. BURWELL. Senator, you have my commitment that, with regard to being responsive, that is something I consider important. 

And I think, hopefully, you have heard from your colleagues who 

have had the chance to work with me in the past year that it is 

something I prioritize in terms of responsiveness and communication. 

Senator HATCH. I was very impressed with what Senator Coburn 

had to say, and I agree with that, by the way, and will appreciate 

that. 

Now the second question is, what, in your opinion, should be our 

recourse as a committee if this public commitment is not kept? 

Ms. BURWELL. Senator, with regard to, if there are frustrations, 

and if I am confirmed, I hope that you would pick up the phone 

and call me. 

Senator HATCH. All right. 

14 

Ms. BURWELL. One of the things that I think actually is a very 

important part of working and getting to a solution, as I think Dr. 

Coburn said, is we do not always agree. But if we can have conversations and those conversations can be specific, I think that is 

something we can use to figure most things out, even at times 

when we may not agree. 

Senator HATCH. Thank you. Director Burwell, to date, the administration has made at least 22 unilateral changes to Obamacare 

without consulting any of us up here in Congress. Most recently, 

HHS announced it was raiding a Medicare fund to provide extra 

payments to Medicare Advantage plans to forestall benefit cuts. On 

April 10th, I asked Secretary Sebelius whether or not there would 

be any more changes to Obamacare, and her answer, in my opinion, was not very reassuring. 

So again, I have two questions for you. Will you commit to considering Congress in obtaining legislative changes to the law in the 

future? 

Ms. BURWELL. Senator, with regard to the issues of implementation, when there are things in place—I think the core objective is 

common-sense implementation and improvements within the context of the law, and, where one needs changes with the law, we 

should seek that. In the President’s current budget, actually we do 

seek changes, and they have to do with small businesses and some 

of the tax issues. That is a place where we think that we can improve that, and we need the support of the Congress in order to 

do that. 

Senator HATCH. All right. My last question: if you do expect more 

changes or delays to Obamacare, what will they be? 

Ms. BURWELL. Senator, with regard to the implementation of 

such a large and complex thing that is such a large part of our 

economy, I am not sure that I can sit and predict. But I think what 

is important, as one moves along and is implementing, is listening 

and learning as you go, making those common-sense changes within the context of the law and, where there are changes that require 

legislative changes, to work with the Congress to make them. 

It is a very complex system. It was complex before the Affordable 

Care Act. Our health care system in the United States is a large, 

complex system. The law itself will hopefully make, and is making, 

improvements, but it is a complex system that I think will be evolutionary as we learn. One of the things that I am hopeful about, 

if I am Secretary, is that listening and learning and hearing and 

making changes that are appropriate is something that one would 

want to do. 

Senator HATCH. Well, thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Rockefeller? 

Senator ROCKEFELLER. Director Burwell, there is an understandable rage for lowering costs. I remember—Ron, I am not sure if you 

were here or not—when Dick Darman was in your present position, 

and he came before the Finance Committee at that time to talk 

about the runaway costs of health care. 

He was sheet-white. He had sort of disappeared for a week. That 

was the impression; nobody knew what he was going to say or 

could ask him any questions. Then he came and he was sheetVerDate Mar 15 2010 19:10 Mar 13, 2015 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 R:\DOCS\93658.000 TIMD
15 

white, and he just predicted—he had this horrible, dire prediction 

of the cost of health care eating everything up and squashing other 

good programs, which leads to my question. Making things costeffective and cutting costs, lowering costs, which Democrats love to 

boast about, runs sometimes—let us take, for example, the dualeligibles—into the providing of adequate and good care. 

That is sort of a sloppy, philosophical thing to say, but there 

come very difficult decisions when it is more expensive to take care 

of certain kinds of people, certain kinds of illnesses. When we lifted 

the annual cap and then the lifetime cap, that, you see, was quite 

the opposite. That was saying, oh, it is important to spend more 

money because having really good health care for people is what 

we are here for. 

So those things are in conflict with each other. I wonder if you 

have sort of an operating philosophy? 

Ms. BURWELL. I think there are difficult choices, and I think that 

is a key and operative word: choices. At the Office of Management 

and Budget, we have had the opportunity, under what are tight 

budget levels, our current 2015 levels—when you take into account 

FHA receipts and the growth of veterans’ benefits, our levels are 

the same as last year. 

So one of the things I think about, when I think about making 

these difficult choices, is getting as many of the facts as one can 

and making sure that you lay out the different choices as best you 

can. And some things are hard to compare and choose between, but 

I think that is part of putting budgets together and part of the 

kinds of choices that we are going to have to make in the health 

care space, understanding quality as well as understanding cost. 

Senator ROCKEFELLER. You have been Director of OMB, which I 

think one could also say is one of the most difficult positions 

around. Your life is full of choices, and many of them are ones that 

only you can make, in effect. So you have your experience as Deputy Director and Director. It is your inclination—when you have 

difficult problems, you love that. You devour the facts and nuances 

of difficult problems and try to solve them. 

But from your OMB experience, as you look at HHS at large, 

there have to be some things that occur to you, impressions from 

the position of OMB about HHS and how, over the years—I do not 

just mean the recent years, but over the years—how things have 

not always gone as smoothly as we would like. 

Ms. BURWELL. With regard to that issue, I do have impressions 

in terms of beyond the Affordable Care Act and the Department as 

a whole. One of the things that I believe in about setting priorities 

in a new organization when I go to something new—and it reflects 

one of the comments that Dr. Coburn made—is listening. That is 

why I am very appreciative of all of your time. I actually have had 

the opportunity to speak with each of you in terms of what your 

priorities are. 

The second thing I think I need to do is listen to stakeholders, 

and I cannot do that until the Senate speaks and this process 

moves further. And then the third thing is the Department. Once 

I have heard and listened, that is the point, I think, at which one 

has the correct information to set priorities, which I think is an important part of managing any situation. 

16 

Senator ROCKEFELLER. I have 44 seconds. One of the things that 

has always interested me, and as a citizen, neither liberal nor conservative, it has always amazed me that in very large and powerful 

organizations with a lot at stake, where people wear stars on their 

shoulders and where people have reputations built up over a lifetime, that they become deficient, and they clearly become deficient. 

They probably know it; you would probably know it. 

It is the question of people never being held ultimately accountable. For strange reasons, and not always kind reasons, the only 

thing Americans will settle for is that somebody is fired, because 

that shows that ‘‘the administration really means it.’’ 

I do not necessarily walk away from that action at all, but there 

are other ways of disciplining people, but they have to somehow radiate out to the American people also. So the symbolism of reigning 

in and controlling your department and how you do it is important 

to me. What say you? 

Ms. BURWELL. I agree that it is important. I think one of the 

things that is very important is actually having people around you 

who actually tell you when you are wrong as a leader. That is a 

very important thing, making sure you create a culture where it is 

rewarded for people to actually question you in terms of your leadership and make sure they are pointing out if there are other facts 

you should know or things like that. I think that is an important 

part of it. 

With regard to creating accountability, one of the most important 

things I think you do in an organization, when you come in, is clarify what the goals are, move to what people’s roles are, and articulate their responsibility. By setting that out at the front end, I 

think it makes it much easier to check yourself at the back end in 

terms of how people delivered. 

Senator ROCKEFELLER. Thank you. 

The CHAIRMAN. Thank you, Senator Rockefeller. 

Senator Crapo? 

Senator CRAPO. Thank you, Mr. Chairman. 

Ms. Burwell, I appreciate you being before us today. I also appreciate the good working relationship that we have had as you have 

been involved in a number of different aspects of this administration. 

Ms. BURWELL. Thank you. 

Senator CRAPO. I want to use my time today to talk to you about 

Medicare, and particularly Medicare Advantage, and secondly 

about some of the implementation concerns I had with regard to 

Obamacare in general. 

With regard to Medicare, back during the debate over the Affordable Care Act, there were massive cuts to Medicare in the Act. We 

debated that at the time. I am not trying to go through that debate 

right now, but, as a part of that, many of us pointed out that there 

were significant reductions to Medicare Advantage included in 

what the Affordable Care Act itself did and that that was probably 

the most popular part of Medicare today among seniors. 

In fact, we are now seeing that the cuts to Medicare Advantage 

are real, they are occurring, and, in addition, the administration 

seems to be pushing for additional cuts to Medicare Advantage beyond even those that were contained in the Affordable Care Act. 

17 

I will not go through all the statistics I have here about how the 

CMS analysis shows one thing and then other analyses from independent sources indicate other things. The bottom line is, from all 

the analysis that I am seeing, what we are viewing coming down 

the pike with regard to Medicare Advantage is that the program 

will be facing double-digit reductions over 2 years. 

In Idaho, we have already started to see the effects of this: eight 

counties in Idaho no longer even offer Medicare Advantage options. 

In Adams County, where 44 percent of the Medicare beneficiaries 

have chosen Medicare Advantage plans, the beneficiaries saw their 

plan options limited in 2014 down to just five plans from nine in 

2013. We see this dynamic continuing. 

My question to you is, do you understand the dynamic that is 

happening in Medicare Advantage? Do you agree with the observations I have made? Do you believe it is reasonable to implement additional cuts on Medicare as we see this dramatic impact the 

downsizing is already having? 

Ms. BURWELL. Two starting premises. Thank you for the question; I think it is important. I will start by saying it is something 

which is, Medicare Advantage, I think, a very important part of the 

system. 

Senator CRAPO. Good. 

Ms. BURWELL. The second thing is, it is an issue that we have 

talked about and I am sure we will talk about more, which is the 

question of health care costs as an important part of achieving fiscal responsibility and lowering our deficits in the out-years. So 

those are two guiding premises that I think we need to keep our 

eyes on with regard to Medicare Advantage. 

When I think about Medicare Advantage, I think about the starting point that you mentioned, in terms of going back to where 

those initial changes were put in place and the predictions of what 

would happen with those changes. I know of two different sets of 

changes we are talking about. 

With the context there, we had a situation where Medicare Advantage was put in place, and we thought it was going to make 

things cheaper. However, we saw 14-percent cost overruns to regular Medicare patients, so how do we think about that within the 

system? 

We made some changes. We have seen those changes. Medicare 

Advantage has grown. One-third of people are now part of Medicare Advantage. We have seen Medicare Advantage premiums drop 

by 10 percent as those changes have been implemented. The other 

thing we have seen is an increase in quality. Thirty-seven percent 

of the people had 4- or 5-star ratings in terms of that quality. That 

is now up to 50 percent. 

The question of the additional changes that are being put in 

place—— 

Senator CRAPO. Right. 

Ms. BURWELL [continuing]. Need to be monitored and watched 

with regard to—I think everyone’s objectives are to keep that quality access and to keep premiums under control. So I think the proposals that are in place, we believe are things that could work. But 

we need to understand and keep monitoring if we are seeing things 

18 

that are not working, which are some of the things I think you are 

starting to describe. 

Senator CRAPO. All right. I appreciate that. I am concerned that 

what you are going to see as you monitor it is that we have done 

some unnecessary damage to the program. But I hope that your 

commitment to supporting it and to helping it become stronger and 

more viable is going to work out. 

In my just 1 minute left, let me ask one other quick question. 

Changing quickly to Obamacare in general, a recent McKinsey survey found that only 26 percent of individuals who gained insurance 

under the Patient Protection and Affordable Care Act were previously uninsured. If this statistic is accurate, it means that the 

vast majority of individuals who are now covered under the Act 

previously had health insurance that was canceled due to the mandates in the law. 

First of all, the administration has allowed non-compliant plans 

to continue through 2014. Do you support allowing this continuation of non-compliant plans to qualify or can Americans expect another round of cancellations this fall? 

Ms. BURWELL. With regard to where we are in terms of the current plans and what will be continued or not, I think we have 

made all the decisions and announcements that will take us 

through the next enrollment season. 

With regard to what we want to do, I think we need to watch 

and manage. As with Medicare Advantage, one of the things I 

think is important is, how do we do common-sense implementation 

that works for people? The system needs to work for individuals, 

it needs to work for insurers, and actually providers as well. 

Senator CRAPO. Well, thank you. I have a lot more questions. My 

time is up. I will submit those to you in writing. 

[The questions appear in the appendix.] 

Ms. BURWELL. Thank you. Thank you. 

Senator CRAPO. Thank you. 

The CHAIRMAN. Senator Stabenow? 

Senator STABENOW. Welcome. Thank you very much, Mr. Chairman. Congratulations on well-deserved support and praise. 

Ms. BURWELL. Thank you. 

Senator STABENOW. I am looking forward to working with you on 

so many different issues. 

Let me first follow up on my friend and colleague’s statement on 

Medicare Advantage and just share this. During the process of 

writing the Affordable Care Act, I will never forget the Budget Office telling us that, even if we capped the payments to Medicare 

Advantage at 150 percent of what doctors and hospitals receive 

under regular Medicare, we would save money—even capping it at 

150 percent. 

So given that fact, I think it was the right thing for us to do to 

deal with cost overruns. And I certainly share with my colleague 

the view that we want to make sure that services are there and 

provided. But clearly there were cost overruns. 

The good news is, as we brought down the costs connected with 

Medicare, we saved money. And yet, at the same time, we provide 

annual check-ups with no out-of-pocket costs, and we are seeing 

19 

prescription drug costs going down about $1,200 per person, back 

in their pocket to help pay for medication. So it is all good news. 

In general, I want to ask about the Affordable Care Act, because 

the good news is we have more than 8 million people who have 

been able to sign up for a better plan at better prices—in Michigan, 

over 270,000 people, which is way more than we thought, over 

100,000 more than we thought were going to be signing up. 

In fact, even though Michigan did not start until April 1st on the 

Medicaid expansion, we have enrolled about one-third of people 

who are eligible. So that means low-income working folks working 

minimum wage, 40 hours a week, trying to make it, finally are 

going to have the opportunity to see a doctor and take their kids 

to the doctor. 

So my question is related to the ACA overall. When we look at 

the fact that CBO announced last month that, due to lower-thanexpected premium rates, the Affordable Care Act will reduce the 

deficit another $104 billion over the next 10 years—I know in 

Michigan we are seeing Pioneer Accountable Care Organizations 

that are already, within 2 years, showing savings, a big piece of 

this, to bring down costs for our businesses, for our economy, for 

families. 

So what do you see as the opportunities to continue to use the 

tools in the Affordable Care Act to really bring down costs the right 

way, not by taking away service but by dealing with the costs in 

the system? 

Ms. BURWELL. I think that one of the things is continued implementation. CBO, when they score the changes that are in the Act 

from 2014 to 2020, has a $900-billion reduction in health care 

costs. So, implementation. 

But I think there are a number of tools and opportunities, and 

they are related to the delivery system and moving the delivery 

system into a space where it is both about quality as well as cost 

reduction. I think there are a number of tools. You mentioned 

using Accountable Care Organizations that are moving to that 

space as a way to think about how one can do both of those things. 

I think the other thing is looking at the innovations. I think 

there are innovations State by State. Some of the things that I had 

the opportunity to hear about in the conversations that I had with 

a number of you were specific examples of things that are either 

focused on quality improvements, either hospital readmissions, 

falls, other issues, or actually cost improvements, and some of 

those come together. 

So I think what we need to do is look at those models, figure out 

which of the models deliver the greatest impact with regard to both 

costs and quality, and then figure out which ones are scalable, because I think that is the issue. I think sometimes you can get 

things to work. My experience in grant-making is, you get things 

to work at a small level, but the question is, can you scale it? 

Senator STABENOW. I agree. 

One other comment and then one other quick question. I know 

we are following up to have a discussion about the pilot project we 

have just passed on community mental health funding for critical 

expansions of quality and care in the community for mental health. 

I understand in talking with you that your mom works in commuVerDate Mar 15 2010 19:10 Mar 13, 2015 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 R:\DOCS\93658.000 TIMD
20 

nity mental health, so I feel much better now because I know we 

have a secret ally there whom we are looking forward to enlisting. 

So I look forward to working with you as we implement this very 

important 8-State effort that Senator Blunt and I were pleased to 

work on. 

Finally, Alzheimer’s disease. One out of eight people is diagnosed 

with Alzheimer’s. What is important for us in this context is that 

$1 out of every 5 Medicare dollars—that is a lot, $1 out of 5 Medicare dollars—is spent on someone with Alzheimer’s. 

So I do not know if you have had an opportunity to really focus 

on this yet. One out of 5 Medicare dollars, and yet we have less 

than 0.25 percent that goes to research. I know things are—the 

President is focusing on the brain research effort, and so on. But 

we certainly want to work with you on more effective ways to address what is clearly a disease affecting every family in America. 

I do not know if you have any comments, if you have had a 

chance to look at this at all, but certainly I want your commitment—we would appreciate it—to really focus on this. 

Ms. BURWELL. Senator, first, thank you for your leadership in 

the mental health space and on Alzheimer’s. These are both issues 

that I think are very important. I think, as you articulated, they 

are important both in the form of research as well as delivery of 

care, and care for those who are caregivers. 

I think the issue of Alzheimer’s cuts across the research we need 

to treat and help prevent the problem—if we can find that out, 

what we do to treat patients who are currently suffering—and also 

how we treat the families, because that is a part of the care that 

is very important for those individuals as well. 

Senator STABENOW. I look forward to working with you. 

Ms. BURWELL. Thank you. 

Senator STABENOW. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Stabenow. 

Senator Grassley? 

Senator GRASSLEY. Congratulations, Ms. Burwell. I have just two 

questions. I want to start with what I consider a very important 

function that I have of oversight on the use of taxpayers’ dollars. 

I think I take that job very seriously. I have done so both under 

Republican and Democratic administrations. 

So my first question to you is, would you commit to answering 

the letters I send to your department promptly, fully, and without 

reservation? 

Ms. BURWELL. Senator, I will work to make sure that we are giving you all the tools you need to do the work that you need to do. 

Senator GRASSLEY. Yes. 

I have a long lead-in before my next question, so please be patient. When you were nominated, I said that anyone put in charge 

of Obamacare would be set up to fail. The theme of this law really 

has been ‘‘by any means necessary.’’ The legislative process certainly was by any means necessary, and the implementation has 

operated similarly. 

The department we are considering you for has ignored the plain 

read of the statute whenever it was considered necessary. Deadlines were considered to be written in pencil. If a statute needed 

21 

to be creatively reinterpreted to make the program work, the Department did so. 

As I said on the day that you were nominated, you have a fresh 

start with Congress and with the public. But, if you are going to 

make the most of that opportunity, you are going to have to do 

things differently than they have been done. 

I will use Marilyn Tavenner as an example. She sat in the same 

chair you are in a few months ago. She committed to do things differently. Now it seems like she has gone into the Witness Protection Program, it has been so long since she was last in the chair 

or at my door. I hope that does not happen with you. I hope you 

do not disappear into the same bunker. 

But this is what you face moving forward. The Department is 

supposed to implement the employer mandate a year overdue and 

significantly altered from the statute. The Department is supposed 

to implement risk corridors this year, though the legal authority to 

distribute funds is questionable and the standards used to make 

those distributions will likely be kept very quiet. 

Speaking of things that will be kept quiet, Congress is going to 

want to know what the premiums will be for next year. We consider the information important and relevant. Iowa is considered to 

be one of those States where we might have the highest premium 

spike. 

The Department will want to use any means necessary to hide 

the premiums until after the November elections, unless of course 

the premium numbers are good, and then the Department will 

shout from the rooftops how low they are, much as I think was 

done in the case of enrollment numbers. 

Now, we can be very cordial today, but, if you want to change 

the relationship your department has with Congress, you are going 

to have to be willing to break the ‘‘by any means necessary’’ mindset that we have seen for the past 5 years. 

My question to you then is this: do you think it is possible for 

you to change the ‘‘by any means necessary’’ culture at HHS that 

some of us in Congress view as bordering on lawless? 

Ms. BURWELL. Senator, thank you. Hearkening to my experience 

and what I have done at the Office of Management and Budget, 

there are challenging issues. And, as I look around this dais, I 

think with many of you I have had the opportunity to have to call 

with things that are positive, and actually to call about things that 

are difficult in terms of a number of the members. 

That is something that I consider my responsibility to do, and I 

hope that people feel, in my role at OMB, that I have done that. 

Whether that is moving to more timely responses, the regulatory 

agenda, it is something that actually is sometimes a controversial 

thing. But since I have been the director of OMB, we have been 

on time, getting that out in both the spring and the fall. 

The mid-session review—a document that has a lot of numbers 

that some may use one way or some may use another—came out 

a week early. That is something that actually I did not have to 

wait for numbers from the Congress to do. So I take the issues very 

seriously. And as I have said, this is a space where I actually hope 

that there will be direct communication if there are concerns. 

22 

Senator GRASSLEY. I will yield back my time, Mr. Chairman. 

Thank you. 

The CHAIRMAN. Thank you, Senator Grassley. 

Senator Nelson is next. 

Senator NELSON. Senator Grassley, Senator Rockefeller assures 

me that anybody from Hinton, WV, population less than 5,000, is 

going to do okay. I would assume that you can tell a lot about 

where a person is going by where they have been. 

You have had such accolades from no less than Senator Coburn, 

and the same from me, for the way that you have handled yourself 

in a very difficult department that is as hard-headed, from this 

Senator’s perspective, as is HHS, and yet you were there, you were 

responsive, and I want you to know I appreciate it, and I think 

there are a lot of other folks here who do as well. 

I want to just ask you quickly about Medicaid and Medicare. If 

our Governor and legislature in the State of Florida expanded Medicaid under the ACA, it would cover an additional 1.2 million people who otherwise, when they get sick, are going to end up in the 

emergency room. And all the rest of us are going to end up paying 

for them through our insurance premiums, not even to speak to the 

fact that it is the humanitarian thing to do for people to have access to health care. But the State legislature and the Governor 

have so chosen not to do it for two legislative sessions. We have 

tried to show them that there is a local tax base that is paying for 

a lot of things for low-income people already. 

Now, what the legislature’s position has been is, they want you 

to expand the Medicaid waiver so that they can continue offering 

Medicaid through an HMO, but they do not want, under the ACA, 

to expand that Medicaid population up to 138 percent of poverty. 

So we have shown them an ingenious way that you can utilize if 

the State does not want to pay their 10 percent in the 4th year and 

in the future years, where they can actually utilize what is already 

being used in a local property tax or sales tax for these low-income 

people. 

So what I would ask is, if the State chooses not to expand Medicaid up to 138 percent, what would you think the Department 

would plan to handle the States’ request to consider continuing 

doing business as usual? 

Ms. BURWELL. Senator, with regard to the specifics of the negotiations that are occurring between HHS and the States, that is 

something that, in my current role, I am not familiar with. 

What I can talk about, though, is my philosophy with regard to 

how to think about these issues in terms of Medicaid and the Medicaid waivers. There are a couple of principles. One is, I actually 

think it is very important in starting the conversation to be clear 

about what are the fundamental core principles that are essential 

to implementing it, whether that is the implementation of the Affordable Care Act or the other State waivers that some States may 

be applying for. 

I think the second thing that is a principle that I think is important is flexibility. I think that States do have different situations 

and we need to consider that, but bringing those two things together, I think, is an important thing to do from the beginning of 

23 

the conversation as one works through how to get to a potential 

‘‘yes.’’ 

Senator NELSON. Ground zero for Medicare fraud is South Florida. Just yesterday there was another bust. Law enforcement took 

down 50 more people. But the problem is, in the past, when you 

take them down, they have already fleeced the system. Do you 

have any thoughts? 

Ms. BURWELL. Well, a couple of things. I think that we need to 

work towards a system that is not pay-and-chase, by getting in 

front of the system before the dollars go out. That is the place 

where we need to have a system. I think there are a number of 

tools that we need to use. 

I think we need to use some of the things that we see in the private sector in terms of predictive capabilities, in terms of using 

technology. I think the partnership that actually did do the work 

that you were referring to yesterday that was across the Nation, 

the strike force with the Justice Department, is an important part 

of making sure we do that. 

The issue of Medicare fraud is something I take very seriously, 

and, in my current role as OMB Director, the issue of improper 

payments is one that I have focused on across the entire government. As we all know, the numbers are very large in Medicare, so 

it is a place that we need to focus on deeply. 

So I would hope, if I am confirmed, to be able to bring some of 

the focus that we have had on broad improper payments across the 

Federal Government to the issues that are specific in Medicare and 

Medicaid as well. 

The CHAIRMAN. Senator Cornyn? 

Senator CORNYN. Thank you, Mr. Chairman. 

Ms. Burwell, congratulations on your nomination. 

Ms. BURWELL. Thank you, Senator. 

Senator CORNYN. Thank you for meeting with me and my staff 

in my office. I am glad to hear your answer about getting away 

from pay-and-chase. There are not enough resources in the Federal 

Government or through the False Claims Act or otherwise to go 

after all the fraudsters. 

The only way you are going to get ahead of them is to screen who 

gets paid on the front end, and there are a lot of very powerful and 

loud people who will complain to high heaven if you do that. But 

I appreciate your commitment to deal with pay-and-chase, because 

it just does not work, and it will not work. 

So McKinsey, which you once worked for in addition to other aspects of your distinguished career, has just come out with an estimate that about 22 percent of the 8 million people whom the administration was celebrating enrolling in exchanges, only 22 percent were people who previously did not have insurance coverage, 

which means that only about 1 out of 5 people were newly added 

to the insurance rolls who previously did not have coverage. 

The President said, when he sold the idea of the Affordable Care 

Act, that if you like what you have you can keep it, your premiums 

as a family of four would go down $2,500, and oh, by the way, if 

you like your doctor, you can keep your doctor. 

In many, many, many—too many—instances, that has proven 

not to be true, which has been very damaging not only to the PresiVerDate Mar 15 2010 19:10 Mar 13, 2015 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 R:\DOCS\93658.000 TIMD
24 

dent’s credibility but to the credibility of anybody who is saying 

that the Affordable Care Act will work as advertised. 

Are you aware, since to my knowledge there have been no official 

figures released by the Federal Government or by the administration, whether there are any figures available which contradict or 

disagree with what the McKinsey study estimates, that only about 

1 in 5 of the 8 million people did not have insurance? 

Ms. BURWELL. Senator, in my current role, with regard to knowing what the insurance companies have said to HHS, that is not 

something I do know. What I do know are the public figures that 

we have seen. While we have seen the McKinsey numbers, I have 

not delved into the analytics. The question of, did some people 

switch for quality reasons, I am not sure if McKinsey divides that 

out. 

The other thing is, what we have seen is, we have seen Gallup 

and a number of other organizations show numbers in terms of the 

percentage drop in uninsured in the Nation, and those provide different numbers. But with regard to specifics from the government, 

I do not, in my current role, have access or know. But the insurers 

are the point at which that information will be provided. 

Senator CORNYN. Well, the distinguished Senator from West Virginia who introduced you earlier talked about 20 or 30 years. I do 

not know whether he was suggesting that there would be 20 or 30 

years before we got health care right or not. Maybe we will have 

that conversation later. But right now there are a lot of people who 

feel enormously discouraged and misled, frankly, about the promises made over the implementation of Obamacare. 

Let me ask you, in the short time I have remaining—my notes 

indicated that Health and Human Services employs roughly 78,000 

people—78,000 people—and is authorized to spend about $888 billion. There is another government organization in the news these 

days, the Veterans Administration, that has 278,000 employees. It 

has got, if the reports are to be believed, enormous problems with 

regard to delivering the promise of health care to veterans who 

have earned that right. 

Could you tell me how you would deal with an organization that 

has the sorts of problems that are being reported in the VA today? 

I realize that that is much bigger than what you are getting ready 

to take on at HHS, but I am not asking you how to fix the VA in 

particular, but I am asking about how you, with your experience, 

which is considerable, would approach an organization of that size 

that has that many problems. 

Ms. BURWELL. I think first is getting to what is causing the problems and the magnitude of the problem. Anytime you have a situation like that in an organization, I think you quickly have to establish, what is the problem coming from and how large is it? Is it systemic or is it cultural, or is it something that is a targeted problem? 

I think once you understand what type of problem you are dealing with, then you have different types of solutions depending on 

what it is. If it is a cultural issue, you are going to need to do 

change management, and that is something that takes energy, effort, leadership, buy-in, and problem-solving that works from the 

ground up. 

25 

If it is something in a targeted space, that is a different kind of 

problem. So what I would want to do very quickly is understand 

what is the problem, the magnitude of it, and, as I said, is it systemic or otherwise, and then go about creating a solution based on 

that. At least my experience is, setting culture, sending signals, 

and how one goes about doing that, are important parts to changing if there are problems in an organization. 

Senator CORNYN. And do you think that that approach that you 

just described would be appropriate for Congress to take or just 

somebody in your position? 

Ms. BURWELL. With regard to—I think there is a role that Congress and the executive branch play together. There is an important oversight role that the Congress plays, and I think that is 

about a back-and-forth in a conversation. 

I think it is one of the places where working together is the way 

to get the greatest impact, coming up with the solutions, listening 

and understanding that there are ideas that come from experience 

that is on the ground. I think one of the most important things 

that in my visits I hear is, you represent what happens in your 

States. 

What I hear when I have a conversation and ask you about priorities, it is a means by which one hears from the American people 

as directly as you can. So I think there is an important role in how 

one goes about doing these solutions and working with Congress to 

do it. 

Senator CORNYN. Thank you. 

The CHAIRMAN. Thank you, Senator Cornyn. 

Senator Menendez? 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Congratulations on your nomination. 

Ms. BURWELL. Thank you, Senator. 

Senator MENENDEZ. Yesterday, the Star Ledger, a major newspaper in my State of New Jersey, reported that while 140,000 people were successfully enrolled in Medicaid, at least another 25,000 

still have their application waiting to clear the backlog and another 

7,000 are waiting for their Medicaid cards. 

Now, I realize this is a problem whose solution lies predominantly at the State level, but I also know that CMS has a vital role 

in making sure that States get all applications processed in a timely manner. 

If confirmed, will you commit to prioritizing this issue so families 

in New Jersey and across the country can rest assured that their 

Medicaid enrollment has been processed and that they are able to 

receive the care they need, and have CMS work to educate individuals and providers about their presumptive eligibility rights so 

they are able to receive and provide health care while they are 

waiting for their formal enrollment? 

Ms. BURWELL. Senator, if I am confirmed, I would look forward 

to working with you and CMS on that issue. 

Senator MENENDEZ. Because the promise of the Act—if, at the 

end of the day, you do everything that is right and you register and 

apply and qualify but you are just not processed, at the end of the 

day, that is really unfortunate. 

26 

As you may know from our conversation, New Jersey has the 

highest rate of autism incidents in the Nation, with 1 in every 48 

children diagnosed by the age of 8. That is why one of my top 

health care priorities is ensuring that individuals with autism have 

the therapies and services they need to fulfill their God-given potential. 

Now, one of the steps I took to try to achieve this goal was ensuring autism services were required under the essential health benefits package for plans sold on the health insurance marketplace. 

Despite this requirement, however, I am worried that plans are not 

living up to the standards that I envisioned when I wrote this provision into the law, especially in States without existing State coverage requirements. 

Specifically, I am concerned that plans are taking advantage of 

the regulation that allows them to use non-dollar caps on benefits 

since they are no longer allowed to impose dollar limits. So this is 

clearly in violation of the intent of the provision as I authored it 

and that is part of the law, and it has the potential to deny access 

to care to families across the country. 

But can you assure me that, under your leadership, HHS will 

conduct the necessary oversight of plan benefit structures to ensure 

that they are providing all of the required benefits? 

Ms. BURWELL. Senator, thank you. I appreciate your leadership 

in this space and our conversation about this issue. If I am confirmed, this is something we will want to work to figure out so we 

can make sure that those children and adults are receiving the 

benefits and health care that they need. 

Senator MENENDEZ. Two last questions. One of the issues I have 

been involved with over the last year is responding to CMS’s socalled ‘‘2-midnight rule,’’ which is designed to create an unambiguous policy that a beneficiary spending more than 2 days in the 

hospital is designated as an inpatient. However, the rule failed to 

acknowledge an instance where a beneficiary needs a high level of 

inpatient care for a shorter amount of time, even if the physician 

determines it is medically necessary or appropriate. 

Now, I am pleased to see that CMS took the initiative and is soliciting comments on this issue as part of the fiscal year 2015 inpatient payment rules, but I am afraid that a year might not be 

enough time. Once the current delay is over, we will still be in a 

situation where the rule is unworkable and unenforceable. 

Can you provide an assurance that CMS will have policies in 

place that ensure the rule’s viability once the statutory enforcement delay expires next year? 

Ms. BURWELL. Senator, this is one of the issues I have heard 

about from a number of your colleagues in all of my visits, so it 

is one where I think we need to continue getting the best ideas 

that people have for implementation, and that is something that I 

hope, if I am confirmed, I can work on with CMS and others to get 

that input on. 

Senator MENENDEZ. All right. Thank you. 

Finally, delivery system reform and quality improvement. For 

those of us who supported the Affordable Care Act, we saw it as 

not only about having more health care accessibility for families 

across the country who did not have health care, but also about 

27 

controlling costs, about changing the nature of health care from a 

disease base to a preventative base, and also changing the nature 

of how we pay for it and how we deal with health care, from alternative payment and delivery models, bundled payments, patientcentered medical homes, to performance and outcome. 

I had suggested, for example, multi-dosing when it is appropriate 

to reduce prescription drug costs. So are you open to consider these 

types of initiatives as a primary effort to try to change the nature 

of how we pursue both our outcomes and how we pay for them? 

Ms. BURWELL. Senator, I think that the delivery system reform 

issues are a very important priority that we need to focus on. And 

I believe the way that we are going to focus on them is by taking 

examples and models and figuring out which of those provide the 

best quality and the best cost, and then which of those we can scale 

quickly. I think it is important to get things in place, start to get 

traction on changing the system to one that moves towards what 

you described, as quickly as possible. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Menendez. 

Senator Thune? 

Senator THUNE. Thank you, Mr. Chairman. 

Ms. Burwell, congratulations on your nomination, and thank you 

as well for taking time to meet with me. We have, of course, serious disagreements about the substance of Obamacare, but, as I 

conveyed to you in our meeting, I am more concerned at the moment—well, I am very concerned about the substance, but, since we 

cannot change that, I am very concerned about what is going on 

with regard to the enforcement of Obamacare, the selective enforcement of Obamacare, with regard to certain groups. We have seen 

exemptions, delays, parts of the law ignored as they pertain to certain favored, it would appear, political groups. 

One of those is the reinsurance tax, which was imposed on selfinsured, self-administered plans to help pay for covering people 

with preexisting conditions. Under your direction at OMB, there 

was a rule issued that carves a lot of plans out from that tax. I 

guess my question has to do with whether or not that is appropriate and whether or not that is fair. 

I want to read for you a quote that came out shortly after that 

rule was issued. It said, ‘‘Asked for clarification on how the change 

would affect other plans’ rates and fees for 2015 and 2016, Health 

and Human Services officials said it is true that the fee will be 

higher for plans that do not have to pay the fee in 2015 because 

some plans are exempt.’’ 

So, in your view, is that an accurate statement, that others are 

going to have to pay a higher tax, the reinsurance tax that is paid 

by self-insured, self-administered plans, because groups like unions 

got carved out? 

Ms. BURWELL. Senator, with regard to the specific provision that 

you are referring to, I think this does fall into trying to improve 

and find better ways to implement the law. While some unions are 

exempted, this does apply to some, many unions it does not apply 

to, and it applies to other groups. It has to do with the definition 

as well of self-administered versus third-party administered, in 

terms of what the law was trying to do. 

28 

Those are not synonymous terms, and the reason they are not is 

because, what we found as we were moving forward is, there actually are plans that are self-administered not using the third party 

administrator, and creating that distinction was a way to provide 

better clarity. That is what was intended in terms of what was 

being done. 

Senator THUNE. My understanding is, it does affect about 25 percent of union plans. And it is something that I believe that they 

requested. So the question is really a very simple one. I mean, it 

does not require a lot of subjectivity, it is just simply a function of 

math. If there are groups exempted from that reinsurance tax, does 

that not mean that those who are subject to the tax are going to 

have to pay higher taxes? 

Ms. BURWELL. I think the question is, what was higher and what 

was lower is one question, and one is implementing what your 

starting point is. So yes, it is a smaller group, but what was the 

actual starting point in terms of what is higher? 

Senator THUNE. Well, but we know what the tax is supposed to 

raise. It is a finite amount. It was very clear. If you are going to 

raise a certain amount of revenue and it is going to be paid for by 

a certain number of people, if that pool shrinks, the people who are 

left in the pool are going to pay more. That is simple math. I mean, 

I think the answer is ‘‘yes,’’ and I would like to hear you say ‘‘yes.’’ 

Ms. BURWELL. Senator, I think with regard to what was intended, it was to implement the law in a better way that was 

common-sense, that was responding to a situation that was not just 

unions, and then put the pool in place—— 

Senator THUNE. But that is—— 

Ms. BURWELL [continuing]. Whatever the size of the pool is, to 

get the numbers. 

Senator THUNE. That is theory. Again, this is mathematics. Are 

people going to pay more? The answer is ‘‘yes.’’ That is what I am 

saying when it comes to this issue of selective enforcement. I do not 

think that is fair. I mean, you have had exemptions now twice for 

small businesses under the employer exemption. 

You have had, I think, 20-some exemptions or delays or other 

parts of the law that have been sort of waived, I guess, just unilaterally. But this particular provision is really problematic for the 

people who still have to pay the reinsurance tax. 

All I am simply saying is, as a matter of fairness in the way that 

this is implemented, carving out favored groups should not be the 

modus operandi. We ought to be going about this in a way that 

treats everybody fairly under the law. 

I do not think you can argue that, based on the number of exemptions, the number of carve-outs, the number of delays that 

have been issued already, that that is the case. This particular one 

was a rule that was issued by OMB under your direction. 

Ms. BURWELL. Senator, with regard to the implementation, I 

think what one does seek to do is, when one finds places where you 

can implement better within the law, that you seek to do that. 

With regard to the question of employer responsibility, what we 

heard is that the private sector was having difficulties in terms of 

meeting the reporting requirements that they would need to meet 

to do this accurately. 

29 

With regard to other complex pieces of legislation, one of which 

is Part D, and there are others—we have not had anything as large 

and complex as this in a while, but we have had examples—as one 

moves to implement, you do listen and try to implement in a better 

fashion in terms of trying to hear, listen, and make the transition 

one that is workable. On the individual side, what one sees is an 

opportunity for individuals to apply for hardship exemptions in 

terms of trying to make that transition a plan that works. 

Senator THUNE. Mr. Chairman, in the interest of transparency, 

though, some of these things, these waivers and delays, would you 

agree to submit, when you get them from the insurance company, 

the new filing rates that they file for next year? Because the enrollment date has been delayed now until later this year. 

The date at which plans get approved has been delayed until, I 

think, the day right before the election, which is very convenient. 

But we know they are going to be filing rates, we know there are 

going to be real-world impacts on these things. In the interest of 

transparency, which you have talked a lot about, would you submit 

to us those rates when you get them from the insurers? 

Ms. BURWELL. Senator, the issue of premiums and rates is one 

I think that we all are very interested in and all actually want to 

see move in the same direction. With regard to the specifics of 

what HHS receives and when and how, that is something, in my 

current role, I am not familiar with and would want to look into 

when I get to the Department. What I will say, Senator, is, if I am 

confirmed, that is something that I want to understand and work 

with you on. 

Senator THUNE. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Thune. And just very briefly, 

Ms. Burwell, I very much appreciate your reference to Part D, because I was one who voted for Part D. It was George Bush’s major 

domestic initiative. We worked in a bipartisan way. I hope we will 

be able to work in a bipartisan way in the days ahead on the ACA, 

and I appreciate your reference. 

Senator Cardin? 

Senator CARDIN. Thank you, Mr. Chairman. 

Ms. Burwell, thank you very much. I want to thank you, and I 

want to thank your family—because this is a family service—for allowing you to continue in public service. 

The Affordable Care Act sets up the right structure for moving 

forward in the right manner to achieve quality, affordable health 

care for all Americans. There are many provisions of the law that 

I would like to see strengthened and improved, and I hope we can 

work together to do that. 

In the few minutes I have, I want to go over a couple of issues 

that you and I have had a chance to talk about that I want to get 

on the record. First, the Affordable Care Act established Offices of 

Minority Health in several agencies of the Department of Health 

and Human Services and elevated the National Center on Minority 

Health and Health Disparities at NIH to an Institute. There are 

reasons for that. 

I gave you the example of Baltimore, which was the focus of a 

study funded by that Institute, where life expectancies across the 

city vary by as much as 30 years—an entire generation—depending 

30 

on the zip code in which you live. A significant part of that is related to access to and quality of health care and to the social determinants of health. The statistics on the incidence and prevalence 

of specific diseases and the differences between various racial and 

ethnic populations are well-documented. It is imperative that we 

address these disparities if we are to achieve health equity and reduce health care costs. 

So Congress intended that the focus on minority health and 

health disparities would be a priority as we try to improve our Nation’s health care system and correct some of the previous failures 

in this area. I was disturbed when I looked at the President’s budget that was submitted for fiscal year 2015. The budgets of six Institutes at NIH did not get any increase at all. The National Institute 

for Minority Health and Health Disparities was one of those Institutes that was frozen in the budget proposal. 

Are you committed to implementing the intent of Congress to put 

a priority and spotlight on minority health and health disparities? 

Ms. BURWELL. Yes, Senator, and thank you for your leadership 

in this space. The issue of minority health is one that is important 

and is, I think, being addressed in parts by the Affordable Care 

Act, as well as the President’s budget. 

When one looks at the National Health Service Corps and the 

doctors who are being trained, a number of those, in terms of percentages, disproportionately represent minorities. I think that is an 

important part of getting providers to the types of communities 

that we are talking about. In addition, in the NIH budget this year, 

for the first time there is a program to actually promote researchers, minority researchers, in the work that NIH does. 

In addition, as we work across the whole realm of implementing 

the Affordable Care Act, as well as other parts and provisions— 

whether that is some of the work in preventive care or community 

health centers—thinking about how those entities and parts of implementation of care can help minority communities is something 

that I think is very important. 

Senator CARDIN. I thank you for that answer. I think it is important that you put together the coordinated strategy and be very 

open in presenting it so it gives confidence that you have indeed 

given achieving health equity the high priority it deserves. 

One area related to that is Federally Qualified Health Centers. 

One of the great stories of the Affordable Care Act is the significant 

resources that are being made available to the FQHCs. I have visited most of our centers in Maryland. They have expanded prenatal 

care, and the number of low birth-weight babies being born now is 

down, and infant survival rates are up. 

We now have dental services in the community that were not 

available before, mental health services have been expanded. All 

that is a result of the Affordable Care Act and the added funding 

for FQHCs. We are going to need your support to continue that as 

a priority, because the ACA is not just about more third-party coverage, it is about access to comprehensive quality care and prevention, and the health centers provide those opportunities. 

I want to ask you one more question dealing with dental care, 

which is another problem in low-income and minority communities 

across America. In Maryland, we experienced the tragedy of 12- 

31 

year-old Deamonte Driver, who died in 2007 because he was unable 

to get access to needed oral health care. The CHIP Act, the Children’s Health Insurance Program, as well as the Affordable Care 

Act, provided for pediatric dental coverage. 

However, in the ACA, exchanges can offer stand-alone dental insurance plans. We talked about this previously, and I just really 

want to get your response. We have to make the pediatric dental 

benefit as seamless as possible. That is, because it is an essential 

benefit, families need to have access to pediatric dental without 

separate deductibles and without additional out-of-pocket limits. 

Will you look into how we can make pediatric dental a seamless 

benefit, as Congress intended under the Affordable Care Act? 

Ms. BURWELL. Senator, this is an issue I know you have provided 

leadership on, and Senator Rockefeller actually brought it up in his 

comments as well. Having had the opportunity to actually work a 

little bit on the issue of dental, both pediatric and adult, in my 

foundation work, it is something that I would look forward to working on, figuring out how we can get those services delivered to people in a way that works for them, both in terms of how they can 

access it and use it, in ways that actually prevent the kinds of 

problems that you have described with the 12-year-old that actually extend through adulthood for many. 

Senator CARDIN. Absolutely. I look forward to working with you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Cardin. 

Senator Isakson is next. 

Senator ISAKSON. Thank you, Mr. Chairman. 

Ms. Burwell, congratulations on your nomination, and congratulations to your family, or condolences to your family, one way or 

another, for their loyal support. We appreciate the time you are donating to let her serve us, the United States. 

At the hearing before the HELP Committee, I opened with an 

apology to the committee for bringing up a parochial issue, and I 

have already discussed with the chairman that I was going to do 

it one more time. But in that meeting I told you I had no more important responsibility as a member of the U.S. Senate, including 

your confirmation, than bringing about a resolution to the Savannah Harbor Expansion Project and that we had hit a bump in the 

road upon the submission of the President’s budget by OMB earlier 

in the year and I did not know a way forward. I wanted to bring 

about clarity on a way forward, because I wanted to see to it, before you were gone from OMB, that we had a road forward to see 

that project through to reality. 

To confirm what Dr. Coburn said about competence and responsiveness, within an hour of that hearing you contacted, or your 

staff contacted, our office, arranged an appointment on Tuesday of 

this week, which was yesterday, with your Chief Legal Counsel, 

your Deputy Director, your Chief of Legislative Liaison, and the 

Under Secretary of the Army, Jo-Ellen Darcy, over at the Corps of 

Engineers, where we reached an agreement on a way forward 

which I want to just memorialize with your concurrence at this 

hearing today, which was: (1) we need to pass the authorization for 

the 902, for the authorization of SHEP, which is in the final conference agreement—I have seen that; (2) the Corps has to initiate 

32 

* The Water Resources Reform and Development Act of 2014. 

and begin a partnership agreement negotiation with the Port Authority of Savannah and with OMB; and (3) the State needs to 

agree to forward-fund initial construction money for which it will 

receive credit towards its required match during the course of the 

expansion project. 

Do I have a correct representation of the steps forward to complete this project? 

Ms. BURWELL. Senator, you do. I am very hopeful that WRRDA* 

will pass quickly and we can get on our way with this important 

project. 

Senator ISAKSON. Well, I want to thank you for responding to my 

question that day, and thank you on behalf of the people of Georgia, and really the trade of the United States of America and Ambassador Froman’s responsibilities to expand and improve our exports around the world. But thank you very much for the responsiveness on that. 

I was a real estate guy, but I had a little insurance agency in 

my company. We sold some small group health policies back in the 

good old days for which our agents, who were independent agents, 

received commissions. When the Affordable Care Act passed, it put 

in place a medical loss ratio threshold for small group plans and 

large group plans at 80 and 85 percent. 

Your department, which you were not the head of then, determined that commissions were a part of the administrative costs of 

the plan, which meant you would have to pay the commission and 

administer the program out of the 15 percent, which basically put 

all the independent agents selling health insurance out of business 

and was a reason why we had to hire navigators to help people find 

their way through the exchanges. 

I would like, when you become head of the Department, for you 

to look at that decision and revisit it, in terms of the efficiency for 

the plan, to allow small group salespeople and large group salespeople to get back in the business of selling insurance. 

It will save costs for the government in terms of not having to 

have as many navigators, and it will put people back in business 

who were, I think, unintentionally put out of business by the Affordable Care Act. 

Ms. BURWELL. Senator, if I am confirmed, I look forward to looking into and understanding that, thinking about it both from the 

perspective of insurers—having had the opportunity to have been 

on the board of an insurance company, I understand the independent agent issue—as well as the issue of how we think about 

premium issues, which are some of the issues that a number of 

people have brought up today, and how those two things interact. 

So I look forward to, if I am confirmed, learning more about how 

to think about that issue. 

Senator ISAKSON. And I appreciate that. 

On the SGR—which was brought up by the chairman and some 

of the other members—on the question of our need to finally fix it 

now that we have a window opening, I had the occasion to watch 

you in action for eight successive weeks at the White House when 

our little group of eight had dinner with the President, Dennis 

33 

McDonough, and yourself, trying to find a way forward on deficit 

and debt reduction. We talked about ways in which we could reduce obligations over time. 

I do not want to get into a long question, but I would like for 

you to just consider leaving all options on the table in terms of fixing the SGR, in terms of where we find the money to do so. As you 

will remember in our discussions, some structural reforms to Medicare in the out-years can bring about tremendous savings without 

hurting beneficiaries, and we talked about those in those meetings. 

That could be a part of the equation that helps us to find a way 

to pay for the SGR, permanently fix it, and never again be stuck 

in these 1-year renewals over and over again. So I would appreciate your leaving all opportunities on the table, not committing 

yourself to every opportunity, but leave them all on the table for 

discussion. 

Ms. BURWELL. Senator, I welcome the idea of leaving all opportunities on the table. I think as we reflect in our budget, we have a 

wide range of opportunities that range from the type you are talking about to revenue as well. So, all on the table—I hear you. 

Senator ISAKSON. Thank you very much. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Isakson. 

Senator Roberts? 

Senator ROBERTS. Thank you, Mr. Chairman. 

Ms. Burwell, when we spoke during your hearing before the Senate HELP Committee, I asked you questions about the Independent 

Payment Advisory Board, IPAB—— 

Ms. BURWELL. Yes, sir. 

Senator ROBERTS [continuing]. That is the acronym for it—and 

what could happen with Medicare rationing if they in fact came 

into being. In response, you stated that you are hopeful that IPAB 

‘‘never needs to be used’’ and, by your estimates, during your time 

as HHS Secretary ‘‘would never get triggered.’’ 

With the outstanding comments about your ability and leadership by Senator Rockefeller and Senator Coburn, as a follow-up, 

since you do not believe IPAB will have to be activated, with your 

leadership, would you just simply support its repeal? 

Ms. BURWELL. Senator, with regard to IPAB, first, I think it is 

important to reflect that IPAB as currently written would not affect beneficiaries. That is a very important part of the law with regard to, if it is implemented. 

With regard to the repeal and that question, I think, Senator, 

one of the things that is hopefully a helpful thing is having belts 

and suspenders in place to help us all get to the place we need to 

with regard to reducing health care costs. 

Senator ROBERTS. I do not know about a belt and suspenders. 

Maybe barbed wire would be a better way to put it. 

I would echo my colleagues’ comments to you regarding your responsiveness and willingness to work with this committee and all 

members of Congress. I would also like to add relevant Medicare 

stakeholders to that list. Just this past week, I had the Kansas 

Hospital Association in my office sharing their frustrations about 

the lack of responsiveness from HHS. Here is a copy. That is not 

their letter, these scratchings are mine, but this is the same letter 

34 

they sent your predecessor in January. They have yet to receive a 

response regarding the Medicare Recovery Audit Contractors, what 

we lovingly call in rural American the RAC. They do not like to be 

put on the RAC. 

On the Office of Medicare Hearings and Appeals’ 2-year moratorium on assigning new cases to the administrative law judges, they 

are still waiting a response. Now, I know the RACs have returned 

savings to the Medicare trust fund. It is vital that these local hospitals, suppliers, and other Medicare providers, however, have access to timely appeals of these audits. 

We are talking about 65 administrative law judges and now 

357,000 claims for Medicare services, which I understand is the 

reason for the delay or the suspension. It is rather incredible. We 

have gone from pending appeals, in just 2 years, of 92,000 claims 

to 460,000 claims. 

Then the weekly receipts in the Central Operations Division 

went from about 1,250 to 15,000 per week. The reason is obvious, 

and that is, hospitals win 70 percent of the time, which means 

these independent contractors come into a hospital, many times 

they have never seen them before, and they are being fined for regulations they do not know anything about. If you are in a small 

hospital, you really have a problem trying to figure out whether 

you are going to appeal or not, and now we find that the appeals 

are suspended. 

So I would add to my list, what can be done to better balance 

the need to recover improper payments—and we are all for that— 

while not imposing undue administrative burdens on providers, 

particularly those in our rural areas? 

Ms. BURWELL. Senator, with regard to this issue of the RACs, as 

well as the balancing of having hospitals be able to process things 

quickly at the same time that we are trying to prevent abuse of 

Medicare, those are the principles we need to balance. 

If I am confirmed, this is an issue that I think is going to require 

a quick look, a fresh look, and we will need to think about how we 

get the balance and what processes can be used to balance the two 

interests, because I think you are appropriately reflecting, in terms 

of the speed and the processing, it is not where we want to be in 

terms of the system. 

Senator ROBERTS. In last year’s Inpatient Prospective Payment 

Systems rule, that is the IPPS rule—a rule, by the way, which you 

signed off on at OMB—HHS implemented a payment clarification 

that requires that physicians admitting a patient into a critical access hospital certify that the patient must be discharged or transferred within 96 hours. 

This payment clarification, which is not in line with the critical 

access hospital’s condition of participation for Medicare, in my view 

and in their view, is crippling the ability of many of these facilities 

to provide care in their rural communities. It is inhibiting doctors’ 

abilities to confer with their patients. One doctor in Dodge City told 

me, ‘‘I usually met 12 minutes, now just 3 minutes because of the 

96-hour rule, and then I decide on the best course of action for 

their care.’’ It is another example, in my opinion, of having to tell 

CMS, if it is not broken, then there is no need to fix it. 

35 

If confirmed, will you do all you can to see if we can reverse this 

payment issue so that our rural seniors can continue to receive 

care in their local community? 

Ms. BURWELL. Senator, the issue of critical access hospitals and 

care in rural communities is something, because of my background, 

that I consider very important. The issue of the 96-hour rule, which 

we discussed a little bit before, is one that we clearly need to get 

the right input on in terms of, how do we get to a place where the 

original objectives of the rule can be achieved in a way that they 

do not have the unintended consequences that you are articulating? 

Senator ROBERTS. Thank you very much. My time has expired. 

The CHAIRMAN. Thank you, Senator Roberts. 

Senator Warner? 

Senator WARNER. Thank you, Mr. Chairman. 

Let me say, Ms. Burwell, thank you again for your service. It 

looks like you are coming around the bend here and close to being 

done. I have a number of things I want to get on the record. First 

of all, I want to add my voice to comments made by Senator Isakson and Senator Roberts. I think the displacement of agents and 

brokers was a challenge and a mistake, and I hope you will 

re-review that process. 

Let me also add my voice to what Senator Roberts said. I hear 

repeatedly from particularly my rural hospitals, but all hospitals, 

about the RAC audits. We do need to make sure we avoid waste 

and fraud, but I hope you will take a fresh look at that. 

Let me move to three or four other items very quickly that I 

want to get in. One, the Treasury Department recently finalized reporting rules that will deal with the employer and individual mandates. There are a lot of complexities about these rules, and some 

of these complexities were highlighted by the American Bar Association’s Section of Taxation. 

This is not just a Treasury/IRS issue. HHS also plays an important role in administering these subsidies. The way the rules are 

currently issued, there is a potential end-of-year contentious debate 

between business and the IRS, with the IRS kind of being a referee. I raised this with you before. 

I have introduced legislation, S. 2176—we have eight co-sponsors, and it is endorsed by a number of employer groups—which 

would basically allow employers to report prospectively or forwardleaning rather than having this monthly reporting requirement 

that, for particularly small entrepreneurs, is a burden. 

Now, this approach we are taking would not give a complete safe 

haven, but it would require the kind of up-front collaboration between HHS and Treasury that might remove one of the administrative burdens that we hear enormous amounts about around ACA. 

My hope is that, if you are approved, and I hope you will be, that 

you will help work with us on either this legislation or other ways 

that we can improve this reporting requirement and, again, look at 

this prospective action rather than simply doing it retroactively. 

Ms. BURWELL. Senator, if I am confirmed, as the administration 

and the President have said, we welcome the opportunity to think 

about ways, legislatively and otherwise, that we can improve the 

implementation of the Affordable Care Act. 

Senator WARNER. I will take that as a ‘‘yes.’’ 

36 

It is also my understanding that CMS signed agreements with a 

number of web-based entities that were to allow private exchanges 

to enroll tax subsidy individuals pursuant to regulations issued by 

HHS in March of 2012, again, something we talked about. This effort was stymied due to inefficient technology integration with 

these entities. 

I understand there have been some small steps taken by HHS, 

but not a lot has really taken place. To my mind, this should be 

a no-brainer if we can get some of these sites that are perhaps 

more user-friendly as an additive effort to Healthcare.gov. I hope 

that you will work with me and these web-based entities to ensure 

that there is better technology integration in this area. 

Ms. BURWELL. Senator, I welcome the opportunity to think about 

the best way to do distribution. It is hearkening back to Senator 

Isakson’s question and your comment in terms of that question of 

a distribution mechanism, in terms of how people can easily access 

and receive health care, and I think the web-based model is a very 

promising approach. 

Senator WARNER. And clearly there are certain sites that may 

have been private-sector sites that have a better reputation, perhaps, than the Federal exchange. If we can find ways to utilize that 

and integrate that technology, to me it seems like we want to expand the sign-ups. I hope that we can work together on this. 

Again, I would like to discuss an issue that I raised with you, 

which is a little more complicated, about CMS’s recently issued 

changes in the hospice benefit. I think, as this is being rolled out, 

it is confusing and placing a lot of unnecessary burdens on hospice 

patients’ families and the hospice provider community. 

The guidance says that Part D plans should reject prescription 

drugs billed to them after a patient has enrolled in hospice unless 

the hospice provider submits a prior authorization form to justify 

why a drug is unrelated to the terminal illness and should be covered by the Part D plan. 

Obviously, if it is related to the terminal illness, we understand, 

but if you have glaucoma and a terminal illness, glaucoma is not 

related, and shouldn’t the hospice provider be able to get reimbursed for that? Now, obviously there are some major problems 

with the implementation on this. My hope would be that as we dig 

down—there are two or three other layers of difficulty with this 

issue—that you will work with me and CMS to see if we can get 

this resolved in a way that these hospice providers are not unduly 

penalized. 

Ms. BURWELL. Senator, I look forward to working on that issue 

in terms of how we can figure out how we are paying for the right 

things, and doing it in a way that is implementable. 

Senator WARNER. In a lightning round with 4 seconds left, as a 

former Governor, let me just say that one of the things that we 

often try to do as States is look at innovative programs to try to 

get a waiver, whether it is with Medicaid or CHIP. 

Yet a lot of these programs, they never move from kind of innovative test models to actually become permanent parts of a State’s 

program. This, to me, again, is an area that is ripe for some administrative review, and at some point you ought to either be proving 

37 

your case and be accepted as part of the State program or be rejected. Again, I hope you will work with me on this. 

Ms. BURWELL. I will, Senator. 

Senator WARNER. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Warner. 

Senator Portman? 

Senator PORTMAN. Thank you, Mr. Chairman. 

Ms. Burwell, thank you for your willingness to step forward for 

what will be a very challenging task. As a former OMB Director 

and part of that fellowship of folks who have had the honor to have 

the worst job in Washington, I congratulate you on seeking a promotion. [Laughter.] 

But I do think you come at it, therefore, with a different perspective than other HHS Secretaries have had in modern times, which 

is that of a budget cutter and somebody who has had responsibility 

for oversight and trying to find efficiencies. I think that is really 

important right now. I hope you will continue to have that attitude 

at HHS. 

I am going to focus on Medicare because I think you would agree 

with me that, when you look at not just the health care issues, but 

also the fiscal issues, if we do not figure out a way to reform this 

incredibly important but unsustainable program, we will have a 

difficult time ever getting our fiscal house in order. 

And, as you found out when you were at OMB, this is not an 

easy task, because there is obviously a lot of difficulty in touching 

any aspect of Medicare. But the reality is that the trust fund, 

which is the Part A trust fund covering hospital care, skilled nursing, and so on, is expected to be insolvent by 2026 according to the 

most recent trustees’ report. 

Even if that were not true, we know that Medicare as a program currently offers about $3 in benefits for every $1 in taxes that a 

retiree contributes. That is your typical family in Cincinnati or 

here in Washington, DC. So it is a program already that is heavily 

subsidized by general revenues and heading toward, again, this insolvency, even with the significant general revenue contribution. 

So my question to you is this. In this confluence of OMB and 

HHS that may well come together here with your confirmation, 

what are your thoughts about it? Let me ask you a very specific 

question that I think you should be able to answer in the affirmative. 

In the President’s budget over the last couple of years, he has included a change in the way in which the recipients of Part B and 

Part D benefits pay their premiums. He said there ought to be additional premiums paid for folks who make over a certain amount, 

170,000 bucks roughly per couple in retirement. Some have called 

that affluence-testing or means-testing. In the President’s proposal, 

he saves $56 billion, as you will probably recall since it was in your 

budget, over a 10-year period. But interestingly, all the analysis indicates, it is well over $400 billion over the next 10 years. In other 

words, it is one of those changes on the mandatory side of the 

budget, which is now the largest and fastest-growing part of the 

budget, that has significant out-year changes, which is really what 

we ought to be focusing on here in Congress and with the administration. 

38 

So my question to you is: (1) I assume you support the President’s budget proposal, but (2) would you support it as a standalone? In other words, would you be willing to work with us on 

means-testing under Medicare to be able to deal—and Johnny 

Isakson talked about SGR, and my question is really with regard 

to deficit reduction and how we come together—with a problem 

that has been difficult politically for us to handle over the last few 

years here in Congress? Would you support that proposal as a 

stand-alone measure? 

Ms. BURWELL. Senator, I agree with you. I think one of the real 

benefits of the income-testing for premiums has to do with the fact 

that it is a structural change and you get those large benefits in 

the out-years that are important to the over-arching numbers in 

the deficit space. 

When I think about the deficit issues in my role at OMB, one of 

the things that I think is important is understanding that the drivers are both the issue of health care costs in the Medicare system 

and also our demographics. 

Because of that, the magnitude of the problem, when one gets to 

the specifics of what you are going to do to resolve that issue, I 

think it actually takes a combination of things to do that. I think 

it takes things, as you are discussing, that are on the beneficiary 

side. I think it takes things that are on the provider side. 

Senator PORTMAN. Well, we certainly— 

Ms. BURWELL. I think it takes things like revenue. 

Senator PORTMAN. But, as you know, we have certainly done a 

lot on the provider side already. My question for you is, it is in the 

President’s budget. I assume you support the policy. Would you be 

able to support that as a policy initiative, whether it is in the context of SGR, in the context of deficit reduction, or in the context 

of tax extenders, or whatever it is? Do you support the proposal? 

Ms. BURWELL. I support the proposal in the context in which the 

President’s budget presented it, and it returns to what Mr. Isakson 

said: all things on the table. As we suggest, these things are on the 

table, but we also believe revenue has to be a part of the conversation. 

Senator PORTMAN. Tell me why revenue has to be part of the 

conversation with regard to means-testing. 

Ms. BURWELL. With regard to the question that I think we are 

addressing specifically, it is the issue of deficit reduction in the 

long term. When one looks at the numbers overall, actually getting 

the specifics, when you get to the specifics of what you need to do 

from a premium perspective, from a beneficiary perspective, from 

the perspective of providers, there are other parts that you need. 

That is where I was going with the issue of immigration as well. 

Senator PORTMAN. I only have a few moments left. So you were 

saying that, with regard to means-testing on premiums, that there 

have to be tax increases. Let me just ask you this. When someone 

pays a higher premium, are they not paying the government more? 

Is that not in essence a taxpayer over a certain income paying the 

government more for a benefit than they would otherwise have to 

pay? 

Ms. BURWELL. Senator, these are both things that do affect highincome people. But I think what is important is, when one is lookVerDate Mar 15 2010 19:10 Mar 13, 2015 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 R:\DOCS\93658.000 TIMD
39 

ing at or talking about a package, I think one needs to see what 

is in the package, what it is that we are paying for, and what are 

the offsets you use. 

Senator PORTMAN. Yes. Let us just look at this logic just for a 

second. Mr. Chairman, please indulge me. So you are saying that 

you would insist on raising taxes on wealthier individuals in order 

that wealthier individuals could pay more to the government in a 

way, by the way, that the Congressional Budget Office says is also 

revenue, which is premiums being paid to the government. Is that 

the logic? 

Ms. BURWELL. Senator, as the President’s budget is presented, it 

has a number of different elements that do everything from corporate tax reform to other things. That is why I actually think it 

is important to look at a package in its entirety to understand 

those ramifications for whether it is high-income people or other 

beneficiaries. 

Senator PORTMAN. I know my time is expiring here. Let me just 

make the obvious point that it is going to be very difficult for us 

to take even the baby steps forward on deficit reduction if we cannot even agree that, when people have to pay more to the government, that that is something that can be done outside of them having to pay more to the government. In other words, the logic does 

not seem to fit for me. 

I hope we can begin to make progress on these issues. I am hopeful that, given your background at OMB, that, despite what you 

have said here today, that you would be willing to work with us 

on that and other issues to make some steps in the right direction 

to deal with these long-term deficit problems. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Portman. 

Senator Schumer? 

Senator SCHUMER. Thank you, Director Burwell. I am delighted 

you are here. You are just a fabulous OMB Director, and I think 

you will make a great Secretary. I am in enthusiastic support, and 

I predict you are going to get passed by a large bipartisan majority. 

The only person’s superlatives I could not exceed were my good 

friend Senator Coburn’s in praising you for this nomination. 

I have two questions on immediate issues of concern to me. The 

first is about something called Palcohol, powdered alcohol. Recently, in April, the Treasury Department’s TTB, the Trade and 

Tax Bureau, approved the labels for a new product called Palcohol. 

It is not in stores yet. 

It is just as it sounds. Powdered alcohol can be mixed with 

water, sprinkled onto food, even snorted. TTB rescinded its original 

approval for the labels, but only due to an issue with the amount 

of powder in each package. 

So once this is resolved, Palcohol makers have indicated they will 

seek labels for their product to be reapproved. It is on track to be 

on the shelves in the fall. It is really troubling to me. Obviously, 

you can drink a lot more alcohol in powdered form than in liquid 

form just because of the volume. 

You can put it on food. Kids can sneak it into dances, concerts, 

sporting events, in their pockets and their shoes. It is really troubling. The only hope we have of stopping Palcohol from getting on 

40 

the shelves—and Mothers Against Drunk Driving is very concerned 

with this—is the FDA. You will oversee the FDA, so I believe that 

the FDA should get involved. It is our premier consumer agency. 

I hope they can investigate this new substance, just as they did 

with Four Loko, which was alcohol and caffeine mixed, which they 

banned. I would hope they could do the same thing here because 

that was proven unsafe. I believe this will be also. So all I am asking you is, will you commit to having the FDA look into this new 

alcohol product for health and safety reasons? 

Ms. BURWELL. Senator, if I am confirmed—this is a new issue. 

This is one that I would want to understand better and understand 

exactly which jurisdiction is appropriate and why it is currently at 

Treasury, as you described, in terms of being a tax issue, I understand that, but why it has not previously been looked at by FDA. 

Senator SCHUMER. Yes. They have not looked at it, and I hope 

you would urge them to do so. 

Ms. BURWELL. I will investigate it further, if I am confirmed. 

Senator SCHUMER. All right. Thank you. 

Next is another issue that I care about, which is Zohydro, where 

the FDA has been worse, and it is not such a new issue. We have 

opiate abuse all over the country, all over. It is in urban areas, suburban areas, rural areas. In 2013, October, a pure form of the powerful painkiller hydrocodone was approved by the FDA to go to 

market without the same tamper-proof protections aimed at curbing abuse that are in place for drugs that are less potent: Vicodin, 

Oxycontin. 

FDA approved this, despite the recommendations of an advisory 

panel against it and in opposition of many Senators. It is a serious 

issue that has physicians, addiction experts, and law enforcement 

officials from around the country alarmed. 

There are ways to make it tamper-proof; there are ways to make 

it so you cannot turn it into a powder and snort it or inject it. You 

know the scourge of prescription drug abuse that we face in every 

part of the country. Will you review the decision by the FDA on 

Zohydro once you get into office? 

Ms. BURWELL. Senator, the issue of prescription drug abuse is 

one, being from a rural community in southern West Virginia, 

where I have seen the issues first-hand in terms of how damaging 

they are to both health as well as the economy, so these are things 

I take very seriously. 

With regard to engagement with FDA, one of the things I want 

to do, if I am confirmed, is make sure that I work with FDA on 

science-based decisions. If I am confirmed, this is a case where I 

will want to understand how the decision was made. 

Senator SCHUMER. Again, I hope you will be actively involved. I 

realize the necessary caution when you are sitting at that table, 

but I know who you are, and I think you will get involved. 

Medicare Advantage. Senator Crapo talked about this, so I do not 

want to get into details. I only have 27 seconds left. All I would 

ask you is to look at the difference. There are some Medicare Advantage plans that are abusive, take advantage, rip off the Federal 

Government. There are some that are great, many of which are in 

upstate New York. We have a ton of them in Rochester. 

41 

I think 65 percent of all Medicare recipients are on Medicare Advantage, and most of them are very happy. You do not have to— 

I just would urge you to separate the wheat from the chaff. Some 

people on my side of the aisle, the minute they hear Medicare Advantage, they say it is terrible. It is just not true, not in my experience in my State. They are all across the board. I just hope that, 

when you look at Medicare Advantage, you will give it a careful 

look and not take one broad brush and say programs are all bad, 

because they are not. 

Ms. BURWELL. Thank you, Senator. 

Senator SCHUMER. Thank you. 

The CHAIRMAN. Thank you, Senator Schumer. 

Let’s see. Next is Senator Carper, then Senator Toomey. 

Senator CARPER. Thank you, Mr. Chairman. 

Ms. Burwell, nice to see you. Congratulations on your nomination. 

Ms. BURWELL. Thank you. 

Senator CARPER. It is one of those deals where I have mixed emotions. I chair this committee that has a very close relationship with 

OMB, and, if you are confirmed for this position, it means we lose 

you at OMB. I was kidding with some of my colleagues. I said, you 

know, if Sylvia is confirmed for Secretary of HHS, the President is 

going to nominate Tom Coburn to be head of OMB. Two of my colleagues said, well, we cannot vote to confirm her. [Laughter.] So I 

just want to make it clear, that is not the plan. That is not the 

plan. We love working with you at OMB, love working with the 

team that you have put together. 

One of the things we focused on, as you well know, is how do we 

get better health care results for less money? For most things, in 

terms of being successful in government, in academia, in business, 

whatever it might be, the key is leadership, leadership. 

One of the reasons why the Department of Health and Human 

Services, which for years was kind of the laughingstock when it 

came to being a manager of finances, actually last year, wonder of 

wonders, they actually were auditable, but they got a clean audit. 

After 20-some years, the Department of Defense still has not done 

that, but DHHS has done that. The key is leadership, leadership. 

In terms of actually making further progress in reducing improper 

payments—what were they last year, $50 billion in Medicare and 

probably $20 billion in Medicaid—the key is leadership. 

Talk with us about leadership, what you have learned, what you 

have brought with you to OMB, what you have learned there about 

how we can make further progress at the Department of Health 

and Human Services. What have you learned in your current job 

that will enable us to get better results for less money in some of 

these very expensive programs where we need to save money? 

Ms. BURWELL. I think one of the things I have learned is being 

very specific about what you are trying to achieve in the space and 

very quickly getting to what are the most important levers. I think 

in our conversation today there have been a number of things 

where, actually, there are conflicting interests. 

I think what is important is, as the leadership, to be able to 

quickly get to the problem-solving in terms of articulating, what 

are those conflicting interests and how do you weigh how you go 

42 

forward? It will be imperfect. In order to make the progress we 

need on Medicare fraud, it comes back to the issue we were discussing with regard to RACs and what tools are we using. 

Some of those tools will be effective, but there will be places 

where they are not, so you have to be continuously thinking 

through where is the place you are going to focus on, what is the 

core objective, and how are you going to continuously improve? 

Those are some of the elements that I think are making a difference in the results we have seen in improper payments, which 

have gone from 5.3 percent down to 3.5 for the entire Federal Government and which this Medicare and Medicaid issue will be a 

large portion of. 

Senator CARPER. Dr. Coburn, after he introduced you, he and I 

left and we went off to meet at a secure briefing from the Secretary 

of Homeland Security. We talked about border security, we talked 

about all the folks who are coming up across the border now, not 

from Mexico, but Honduras, El Salvador, Guatemala. The reason 

why is because they are living hellish lives in those countries and 

they want to get out of there, and they will do almost anything to 

get out of there and to try to get up here. 

I said to Secretary Johnson and to Dr. Coburn, it is not enough 

just for us to build bigger walls, stronger walls, more border patrols. We have to figure out the underlying causes, the underlying 

causes that are compelling all those people who want to risk life 

and limb to get up here to this country for a better life. 

I want to talk about underlying causes with respect to obesity, 

underlying causes with respect to medication adherence. We know 

that obesity is a huge driver for medical costs in our country. Look 

at diabetics, all the money that we spend on that sort of thing. If 

you look at the medical adherence, where folks are actually able to 

afford their medicines and take their medicines, comply with their 

medication as they are directed, you see how much money we could 

save. 

Talk to me in terms of helping to get better results for less 

money with respect to those kinds of things, the Program of Allinclusive Care for the Elderly, where we treat our dual-eligibles, 

folks that are Medicaid-eligible and Medicare-eligible, a very 

thoughtful approach. It is a little more expensive at first, but actually we save money in the long run. Would you just talk about how 

medication adherence programs like the PACE program actually 

are going to be helpful or can be helpful? 

Ms. BURWELL. I think it comes down to the fact that prevention 

is such an important part of reducing costs. If we can get in front 

of these things, it is actually a similar concept to what we were 

talking about earlier with regard to, instead of pay-and-chase, you 

get in front. Things are generally cheaper, better, and easier if you 

can get in front of them. 

I think some of the things that we need to do are, we need to 

help make sure we have the analytics that show what works in 

terms of whether it is obesity or diabetes prevention. I think there 

are models. We need to make sure those analytics are rigorous. 

The second thing we need to do is make sure we are educating 

and communicating. Whether that is in the space that we are talking about with regard to prevention or in the space of making sure 

43 

people understand the rules of the road with regard to Medicare, 

the question is one of educating and making sure people have the 

right information. 

The last thing is about tools. In my experience, at least in working on some of these issues at the WalMart Foundation, with regard to how people use healthy eating, you can provide the food. 

So the company would reduce the cost of fruits and vegetables— 

the goal was $1 billion—taking those costs out. But with the communities and populations, it actually took educational programs to 

teach people. When you are shopping and you are a mother or a 

father and you are in the grocery store for a very short period of 

time, you need to get home, you need to fix that meal, in terms of 

serving and using things you have never used before, there is an 

educational component in order that you can actually use the tools. 

Share Our Strength is an organization that did that. 

So I think working through all the elements of first the proof, the 

education, and then the tools, are all three elements that I think 

are necessary to make the kind of progress we need, especially on 

the prevention and diabetes front. 

Senator CARPER. Great. Thanks for your service so far. Good 

luck, Godspeed. Thank you. 

Ms. BURWELL. Thank you, Senator. 

The CHAIRMAN. Thank you, Senator Carper. 

Senator Toomey? 

Senator TOOMEY. Thank you, Mr. Chairman. 

Director Burwell, thank you very much for being here and for 

very open and cooperative discussions that we have had leading up 

to this. I have a couple of questions for you. 

First is about Alzheimer’s. We talked about this a little bit in my 

office. It is estimated that over 5 million Americans have been diagnosed with Alzheimer’s. My understanding is that about 11 percent of all Americans over the age of 65 and something like a third, 

33 percent of all Americans over the age of 85, have Alzheimer’s. 

It seems that if you live long enough, chances are very, very high 

you are going to get Alzheimer’s. It is 100-percent fatal. We have 

no cure. We have no meaningful treatment really, even. Yet in fiscal year 2013, only 1.7 percent of the NIH budget went to Alzheimer’s research. Does that strike you as proportionate to the 

challenges that Alzheimer’s presents? 

Ms. BURWELL. With regard to the budget and Alzheimer’s, our 

overall plan on Alzheimer’s, there were increases. But I think you 

know, on the discretionary side, for anything to get increases in the 

current budget environment was a very difficult thing to do. 

Senator TOOMEY. No, I am talking about within the allocation 

that goes to NIH, the $30 billion that they get, they then control 

where that goes. That does not get appropriated by Congress specifically. Does 1.7 percent sound about right? 

Ms. BURWELL. I think that the question of what is the right percentage is something that I actually, if I am confirmed, would want 

to spend time with Francis Collins on, to find out how they think 

about distribution. It is one of the issues you and I discussed, and 

I did follow up to try to find out exactly how it is done. A lot of 

it is done based on history. When one does something based on history and there are changes, one may need to reexamine. 

44 

Senator TOOMEY. Well, I appreciate that, and I hope you will revisit that, because the history has changed. Alzheimer’s has become 

ever more serious and grave a threat. 

I want to follow up briefly on Senator Portman’s discussion with 

you, because I have to say I do find it troubling, at least what I 

understood you to be saying. If the idea seems to be that Republicans and the President’s budget have both broadly felt that it is 

appropriate to ask very wealthy Americans to pay more for the 

Medicare benefits they get, it is disconcerting to hear that the price 

for getting an agreement to ask wealthy Americans to pay more for 

their Medicare is to raise taxes on wealthy Americans. It is going 

to be hard to reach agreement if something as common-sense as 

asking wealthy Americans to pay more for their Medicare has to 

come at the price of, in addition, raising taxes. 

Ms. BURWELL. Senator, I think when one thinks about it, and 

why I talked about an entire package, is some of the revenue raisers and things in the President’s budget are not like that. There 

are elements of the President’s budget on the revenue side that are 

actually in the Camp plan in terms of what has been proposed on 

the House side, but have been proposed by Republicans. There is 

overlap. 

That is why I actually think what is important in most of the 

issues that we are talking about today, whether on the health care 

side or on the deficit side, is actually to look at the specifics, to actually put together pieces and plans. I think when we all try to 

take a piece out, that that becomes difficult. If we can look at it 

in its entirety, I think we can make progress. 

Senator TOOMEY. Well, look, I am in favor of a broad, comprehensive reform, but if that remains as elusive as it has been, a simple 

idea of asking the wealthiest Americans to pay more for the benefit 

they get strikes me as a very reasonable thing in and of itself. I 

would hope we do not have to raise taxes on people to get there. 

But I want to follow up on a separate issue which you and I discussed, and that is the budget reclassification of the risk card or 

payment. So my understanding is that the payments that will go 

to insurers or come from insurers now that the Federal Government is in partnership financially with the health insurers, that 

that has gone from what would have been its own account to a 

CMS general program management account. 

As you and I have discussed, my interest is just to ensure that 

we will have transparency in this account. I am hoping that you 

can commit that, for whatever reason that was done, and at least 

on an annual basis, we will be able to know how much money came 

from insurers or goes to insurers through this account, what the 

source was, whether it is a surplus or whether it is an expense. 

Ms. BURWELL. Senator, as you and I had the chance to discuss, 

this is part of a larger rulemaking at OMB, it is part of 12866, 

which is an executive order which says I cannot discuss specifics. 

In general terms, what I would like to say is, Senator, this is something I want to work with you on with regard to the question of 

transparency. 

I hear what it is about, which is knowing the numbers of what 

comes in and what goes out. I think that is the fundamental question you are asking and one that I would look forward to working 

45 

with you on. Having been at OMB and worked on budgets and accounts, I think that is something I would like to work—— 

Senator TOOMEY. Does the rule that restricts you from commenting on rules forbid you from making a commitment to having 

transparency in this account? 

Ms. BURWELL. With regard to the commitment to transparency, 

that is something that I think we have talked about throughout 

this hearing, which is, transparency and accuracy are the two 

things that I want to do in a timely fashion. This committee has 

my commitment on that. 

Senator TOOMEY. All right. Thank you, Mr. Chairman. 

The CHAIRMAN. Staying in the State of Pennsylvania, Senator 

Casey. 

Senator CASEY. Mr. Chairman, thanks very much. 

Director, I know we are getting to the end, so we are rounding— 

whatever the baseball analogy is—we are getting close to home 

plate. So we are grateful for your patience, we are grateful for your 

testimony and your willingness to serve, again in very difficult public service, so we are grateful for that. I know we had a chance to 

discuss some children’s health insurance issues in the Health, Education, Labor, and Pensions Committee. 

I was noting that we do not have a lot of time for questions beyond maybe the two that I have, but just some of the numbers in 

Pennsylvania on enrollment have been pretty significant. I know 

we have all heard the national numbers, 8 million enrolled, almost 

5 million in the Medicaid Children’s Health Insurance Program 

area. I know that Senator Rockefeller has done so much work on 

both programs for so many years. 

In Pennsylvania, the marketplace plan selection is a little more 

than 318,000 in Medicaid, CHIP enrollment is almost 41,000, a little shy of that. So almost 360,000 people, so some big numbers. 

But I will move from ACA to at least two children’s issues. One 

is title IV–E waivers regarding child welfare. We have in our State, 

as many States do, counties taking advantage of that waiver, 

where they are working to make sure they are trying to invest in 

evidence-based programs and incentives to reduce the long stays in 

what we used to call group homes in Pennsylvania to try to get 

children into better settings, but also to make sure that, as we do 

that, we are using the evidence-based strategies. 

We have five counties in our State, five out of 67, that have used 

that waiver—two big ones, Allegheny and Philadelphia, among the 

five. But I would ask you to work with us on, I guess, two aspects 

of this: working for comprehensive reform of child welfare, number 

one, and also, as we do that, to help all children in that system; 

and secondly, to promote as best we can better outcomes and 

evidence-based practices. 

So I would just ask for your commitment to work with us on 

that, and I would welcome anything you would want to say about 

it. 

Ms. BURWELL. Senator, I would like to work with you on that. 

These issues are issues that I think are very important. Even in 

my current role at OMB, in terms of evidence-based practices and 

these issues, one of the things that I was very interested in and 

highly supportive of was the psychotropic drug provision that is 

46 

part of the President’s budget, which is analytically based. Whether 

you use the numbers that the administration has, which are that 

17 percent of all children in the system are on psychotropic drugs, 

or up to 34 percent in terms of some of the other studies, we should 

be using data to understand where things are going right or where 

things can be improved. So I would look forward to working with 

you across the range of issues for children in this space. 

Senator CASEY. I appreciate that. 

Secondly and finally, one of the areas of policy which probably 

does not get a lot of national attention but is showing some promise is the so-called CCMI program, where you have the Centers for 

Medicare and Medicaid Innovation. I know a lot of the innovation 

is focused on Medicare, and appropriately so. 

What I hope, though, is that through both Medicaid and CHIP, 

through both of those programs and within the rubric of CCMI, we 

can have enough testing of new models so that we can get some 

of the benefits of that innovation for children in addition to the results that have prevailed for Medicare, and I would ask for your 

help on that. 

Ms. BURWELL. Yes. I think we do want to get the benefits for 

both systems. Both systems are important. We actually have examples in our own budget, the President’s budget, where we actually 

are taking things that are working in Medicaid and trying to have 

those shift to Medicare in terms of things that are working, in 

terms of effective health care that is cost-effective. 

Senator CASEY. Well, I appreciate that. I know I am out of time, 

but I wanted to just make one final point. We know that anyone 

who has had anything to do with child advocacy over many years 

would tell us that children are not small adults, so we need specialized strategies and approaches for kids that may be different from 

how we treat or care for adults. But we are grateful for your commitment. 

Ms. BURWELL. Thank you. My 61⁄2- and 41⁄2-year-old prove that 

every day. 

Senator CASEY. Thank you. 

The CHAIRMAN. Very good. 

Senator Cantwell? 

Senator CANTWELL. Thank you, Mr. Chairman. 

Director Burwell, thank you very much for your willingness to 

serve and thank you for your time in the Pacific Northwest: 10 

years as the head of the Bill and Melinda Gates Foundation for 

Global Development and then on the board at the University of 

Washington Medical Center. I am sure that time on the board will 

come in very helpful here in this post. 

I wanted to ask you about two things as they relate to the Affordable Care Act and priorities, and see how you plan to manage 

them. One, section 3007—I do not expect you to know that section, 

but, knowing Sylvia Burwell, she actually might know that section—but we are talking about altering the payment formula by 

adding a quality-to-cost ratio that will reward providers for lowcost quality and penalize providers that do not—essentially, it 

moves the Nation out of our current model to an outcome-based 

model. 

47 

Now, we had some discussion—this is part of the implementation. I think the Secretary was required to start a process this year 

or the beginning of the formulation of the regulation this year, and 

probably it had to be published next year, and then the SGR bill 

that we were recently looking at had a provision in here that reformed that. 

So what steps do you plan to take on implementing that valuebased payment system? Are you for what was in the SGR bill? Are 

you planning on just proceeding with the rule? Do you think that 

that is a better process? Tell me your philosophy on the implementation of this provision. 

Ms. BURWELL. With regard to the specifics of implementation 

that are currently at HHS, that is something, if confirmed, I want 

to look at. But with regard to the question of philosophy, I believe 

that the question of how we are going to be able to articulate quality and connect payment to quality will be a very important part 

of transitioning the entire system; that is, transitioning the system 

in terms of government and how we pay, but also the private sector. 

I think what we will have to do is work on it from the perspective of the government side and how we do it. It is a complex thing 

in terms of, is the quality of your hip surgery because the surgeon 

did the front surgery versus the back? Is it the anesthesiologist? 

How do we determine those things? But I think what we need to 

do is work to get measures in place and start making progress. I 

also think that we can turn to the private sector, because, in some 

cases, they are already doing that as well. 

Senator CANTWELL. Well, that is my point. The Pacific Northwest 

has already done this, already shown great results. 

Ms. BURWELL. Yes. 

Senator CANTWELL. So now the debate here in Washington seems 

to be, can we overturn the Affordable Care Act or ignore this, or 

can we put a provision in? I did support the SGR proposal, but 

should we put a provision in that gets the rest of the country to 

start doing this but in a very slow, incremental way, or do we go 

with the results that we know all across the country are working 

and get it implemented and push people to implement it in a more 

rapid fashion, given what we are looking at from a population bubble, and retirement, and everything else? 

We need to make these reforms. So I hope that you understand 

you are going to hear a lot from me and from people from the Pacific Northwest. We do not want to go slow, we want to go faster. 

We do not want to see proposals that some of my colleagues are 

proposing on Social Security or Medicare to privatize them instead 

of doing these important outcome-based, better performance reforms. 

I will note, even in the Affordable Care Act, there were a lot of 

States that took us up on rebalancing from nursing home care to 

community-based care, saving lots of money. These are States and 

Governors that said they did not even like the Act, and now they 

are implementing one of the biggest cost savings that exists. So, I 

hope we will run faster on that. 

The second issue is on the implementation of the basic health 

plan, which was an option in the legislation to assist those people 

48 

who earn too much to qualify for the Medicaid coverage. But the 

private coverage struggle to make marketplace premiums—this 

was something that we gave States an option on, so I want to know 

what you will do. 

The Department was very late in getting those rules developed. 

They finally came out in September. They were supposed to be 

done previously, so I want to know what you will do to make sure 

that States who choose that option will be fully operational by January 1, 2015. 

Ms. BURWELL. Senator, if I am confirmed, one of the things I 

want to do is quickly find out about the sequencing of all the things 

that need to get done and the information that States need to have, 

as well as the technology we need to get in place to make sure that 

the next year runs smoothly. That is something, if I am confirmed, 

that would be one of the first things to do, to understand who 

needs which information when and how we are going to work to 

implement. 

Senator CANTWELL. If you do not know enough about it right 

now, you do not need to discuss it, but you can write it. But I need 

an answer from you whether you support the basic health plan as 

an option for States as written in the statute. The agency has ignored that program for a long time, finally got it together, yet has 

put States behind. So I want to get a firm answer from you, so you 

can do that for the record. 

Ms. BURWELL. Certainly. I would be happy to, Senator. 

Senator CANTWELL. All right. And then, just the last thing. Well, 

I guess I am 16 seconds over. 

The CHAIRMAN. Go for it. 

Senator CANTWELL. Maybe I can have a little bit of extra time, 

being the last member. 

The CHAIRMAN. You can. 

Senator CANTWELL. I do not know, Mr. Chairman, if anybody 

brought up GME, but on graduate medical education and paying 

for graduate medical education, I do not know what role you think 

the agency is going to play in helping identify the need for filling 

that gap of primary care physicians that we need. Obviously we are 

not going to get there if we do not have a graduate medical education expansion. 

Ms. BURWELL. So I think the President’s current proposal in the 

budget does some of that expansion, in terms of making sure that 

we do two things: that we increase our providers, and that we target the help to primary care as you suggested and where we have 

shortages in specialties. In addition, expanding the National 

Health Service Corps is another means by which we hope to improve and push on getting more providers out in the field. 

The other thing is that some of the proposals in the budget also 

expand what certain government programs can benefit in terms of, 

not just the physicians themselves, but also other physicians’ assistants and nurses, in terms of some of the primary care needs we 

have. It is a place where I think we have to focus and use all the 

tools. 

The other thing I think we have to do is to make sure that the 

money is going against what one is trying to do when one is doing 

GME and focus it on the right kinds of issues, which is why the 

49 

proposal is focused mainly on primary care, in terms of the new 

GME proposal. 

Senator CANTWELL. Yes. We think it is a good start, but hopefully we will have a discussion about how big the need is as it relates to implementing a medical home for people and why we need 

to focus on moving forward on graduate medical education. But 

thank you. 

Ms. BURWELL. Thank you. 

Senator CANTWELL. And thank you for your willingness to serve. 

Ms. BURWELL. Thank you. 

The CHAIRMAN. Thank you, Senator Cantwell. 

Just a couple of additional matters, and then we are going to liberate you, Director Burwell. This is your second nomination hearing in less than a week, and we appreciate your answers today. 

We have focused for the most part on the agency’s very extensive 

health care portfolio, and that is why I thought it was very good 

that Senator Casey began to touch on the human services aspect 

of the agency’s work, and particularly programs like foster care and 

Temporary Assistance to Needy Families. You all have a very extensive workload there. Can you give us some sense of what your 

priorities would be on the human services side of your budget? 

Ms. BURWELL. Senator, with regard to setting those priorities in 

those areas, in a number of my conversations with the members of 

this committee and the HELP Committee, they have articulated 

some of those priorities. 

I would want to, as we discussed, also hear from the stakeholders and from the Department itself before setting exactly what 

those priorities are, but they are broad and they are numerous, and 

they include everything from an issue that is in the news today— 

which is bio-security in terms of the MERS issues and issues like 

that—to some of the issues that we have been talking about in 

terms of FDA. 

The Administration for Community Living, I think, touches on 

some of the issues that we talked about today with regard to hospice and how we think about care for people in communities. How 

long can we keep people there? Is it both cost-effective and better 

in terms of quality? So I think the range of those issues is something I want to hear about and then quickly set priorities. 

The CHAIRMAN. And by way of wrapping up, just a couple of comments. First, on the Medicare Advantage issue, I think you know 

that the Pacific Northwest has some of the highest rates of utilization in Medicare Advantage. It is good, Medicare Advantage. 

We have been at it for decades in my hometown and Senator 

Cantwell’s hometown. Obviously, we heard Senators on both sides 

of the aisle touch on it. I just want to walk through what I heard, 

because it was very constructive. 

You made the point that the premiums are down, the coverage 

is up, and a number of the questionable operators have been 

squeezed out. I think that is very good, because I remember some 

of the tremendous abuses we saw in the early days of Medicare Advantage. We had oversight hearings on it in this committee, and 

it was just really gross, some of those practices. That has really 

been driven out of the field. 

50 

In response to the Senators’ questions, Senator Crapo, Senator 

Schumer, and others, you essentially said—and I think this is 

where the Senators were going—that we ought to proceed carefully 

and get the latest data and work through these various issues to 

essentially continue on the track. That is what I heard the Senator 

say, and I think that is how you addressed it, and I think that is 

very welcome and very constructive. 

The last point I want to mention is a reflection on the last 21⁄2

hours and watching you also in the other committee that held a 

hearing on your confirmation. We have been at it for something 

like 21⁄2 hours or thereabouts, and from the beginning, where you 

had this extraordinary bipartisan send-off from Dr. Coburn and 

Chairman Rockefeller, who I would note has not budged for the 

last 21⁄2 hours, your ultimate loyalist I think it would be fair to 

say—— 

Ms. BURWELL. Thank you. 

The CHAIRMAN [continuing]. What you have done is, in my view, 

tried to respond to important questions about a landmark law and 

big health care challenges in a way that ought to bring people together. That is why I referenced your point with respect to Part D, 

because a lot of the stories in the early days about the ACA resembled the early stories about Part D. Part D, we now know, has 

come in at 30 percent-plus in terms of cost reduction beyond what 

CBO projected, and the satisfaction among seniors has been enormous. 

Senators, no matter how they voted on Part D, came together 

and said, we are going to try to make this work, and we are going 

to try to do that on this committee. I think you can be a very powerful agent, once you are confirmed—and we are going to do everything we can to make that possible quickly—in terms of trying to 

bring people together and to get us to that point that you touched 

on, post the enactment of Part D, of trying to bring people together 

regardless of how they voted. 

So that is my take-away from the last 21⁄2 hours: that you can 

be that kind of member of the Cabinet to really help us cut through 

some of the polarization we have seen over the last few months. I 

think that it will be an extraordinary service to the country. 

Senator Rockefeller, is there anything you would like to add? 

Senator ROCKEFELLER. Only that, in a Senate so full of toxicity 

and partisanship, I think your sort of attitude, your listening, your 

energy, your knowledge, your ability to defer properly things which 

you have not yet done because you are still in another job but are 

anxious to get at, is in a sense what the chairman is saying. That 

is, how do you begin to take down the walls on a subject so enormously important as the provision of health care, such an enormous piece of legislation with such vast implications for the country? I think it is very interesting, just in your performance this 

afternoon, that also obviously, in your position that I am sure you 

are going to have, you seem to just fit very comfortably. 

Ms. BURWELL. Thank you, Senator. Thank you. 

The CHAIRMAN. Director Burwell, let me just close by thanking 

my colleagues on the other side of the aisle, led by Senator Hatch. 

They have been very helpful in terms of allowing us to move forward. They have indicated that members could have until 6 p.m. 

51 

on Thursday to submit questions for the record, so clearly we are 

moving ahead. 

It is my intent to work very closely with Senator Hatch and all 

committee members to report your nomination promptly after the 

answers to the questions are received. We thank you for your patience. 

With that, the Finance Committee is adjourned. 

[Whereupon, at 4:56 p.m., the hearing was concluded.] 

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93658107.eps