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THE VIEWS OF THE DEPARTMENT OF HEALTH 

AND HUMAN SERVICES ON REGULATORY REFORM: AN UPDATE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

JUNE 13, 2011 

Serial No. 112–60 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chair 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

CLIFF STEARNS, Florida 

Chairman 

LEE TERRY, Nebraska 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

CORY GARDNER, Colorado 

H. MORGAN GRIFFITH, Virginia 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

DIANA DEGETTE, Colorado 

Ranking Member 

JANICE D. SCHAKOWSKY, Illinois 

MIKE ROSS, Arkansas 

KATHY CASTOR, Florida 

ANTHONY D. WEINER, New York 

EDWARD J. MARKEY, Massachusetts 

GENE GREEN, Texas 

DONNA M. CHRISTENSEN, Virgin Islands 

JOHN D. DINGELL, Michigan 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 5 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 8 

Prepared statement .......................................................................................... 10 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement .............................................................................................. 48 

WITNESS

Sherry Glied, Assistant Secretary for Planning and Evaluation, Department 

of Health and Human Services ........................................................................... 12 

Prepared statement .......................................................................................... 15 

Answers to submitted questions ...................................................................... 49 

SUBMITTED MATERIAL

Chart, ‘‘Estimates of the Cumulative Percentage of Employer Plans Relinquishing Their Grandfathered Status, High-End Estimate,’’ from June 17, 

2010, Federal Register, submitted by Mr. Stearns ........................................... 3 

(1) 

THE VIEWS OF THE DEPARTMENT OF 

HEALTH AND HUMAN SERVICES ON REGULATORY REFORM: AN UPDATE 

MONDAY, JUNE 13, 2011 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 2:07 p.m., in room 

2322 of the Rayburn House Office Building, Hon. Cliff Stearns 

(chairman of the subcommittee) presiding. 

Members present: Representatives Stearns, Bilbray, Scalise, and 

Waxman (ex officio). 

Staff present: Allison Busbee, Legislative Clerk; Todd Harrison, 

Chief Counsel, Oversight and Investigations; Sean Hayes, Counsel, 

Oversight and Investigations; Debbee Keller, Press Secretary; Alan 

Slobodin, Deputy Chief Counsel, Oversight; Sam Spector, Counsel, 

Oversight; John Stone, Associate Counsel; Kristin Amerling, Minority Chief Counsel and Staff Director for Oversight; Brian Cohen, 

Minority Senior Policy Advisor and Staff Director for Investigations; Karen Lightfoot, Minority Communications Director and Senior Policy Advisor; Bruce Wolpe, Minority Senior Advisor; Anne 

Tindall, Minority Counsel; Stacia Cardille, Minority Counsel; and 

Ali Neubauer, Minority Investigator. 

Mr. STEARNS. Good morning, everybody, and the Subcommittee 

on Oversight and Investigations is convened. I will start with my 

opening statement. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

We have convened this hearing of the subcommittee to examine 

how the Department of Health and Human Services is implementing President Obama’s executive order, which was announced 

on January 18, entitled ‘‘Improving Regulation and Regulatory Review.’’ Regulatory reform has been a priority of this subcommittee 

in the 112th Congress and will remain so as long as Americans suffer from prolonged high unemployment and sluggish economic 

growth. 

A 2/10 study commissioned by President Obama’s Small Business 

Administration places the total annual compliance cost of federal 

regulations at $1.75 trillion, a number that trumps the record federal budget deficit. Cass Sunstein, the head of the office of Information and Regulatory Affairs, a primary overseer of the administraVerDate Nov 24 2008 10:22 Dec 19, 2011 Jkt 037690 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\112-060 HHS REG REFORM-AWAITING APPROVAL\112-60 HHS REG REFORM PEND
2 

tion’s reform efforts, disagreed with this study in his testimony before this subcommittee on June 3. This seemed to be a theme of 

the administration. If a study or report comes out that they disagree with, it is denounced as inaccurate or labeled an outlier, even 

if the administration actually commissioned the study themselves. 

Case in point is a White House response to a recently released 

study by the McKinsey Group, indicating a radical restructuring of 

employer-sponsored health benefits, following the passage of the 

President’s health care plan. 

Overall, 30 percent of the employers surveyed said that they will 

definitely or probably stop offering health care coverage in the 

years after 2014, due to the overwhelming burden and expense of 

Obamacare, and an incredible 50 percent of employers with a high 

awareness of the laws say they will stop offering coverage. 

White House Deputy Chief of Staff Nancy-Ann DeParle shrugged 

off the report saying it misses some key points and doesn’t provide 

the complete picture. This study, however, is not an outlier. Two 

other reports have been released by reputable independent experts 

within the last month. Each one concludes that the Obamacare has 

made coverage more expensive and that many individuals who like 

their current plan will simply be dropped from it. 

In fact, according to the administration’s own estimate cited in 

the interim final rule implementing the grandfathered health 

plans, its regulations will force half of all employers and as many 

as 80 percent of small businesses to give up their coverage in the 

next 2 years, as this graph clearly shows. 

[The information follows:] 

3 

4 

President Obama’s executive order requires agencies, when promulgating rules, to consider costs and benefits to ensure that the 

benefits justify the costs and to select the least burdensome alternatives. It requires increased public participation. It directs agencies to take steps to harmonize, simplify, and coordinate rules. And 

finally, it directs agencies to consider flexible approaches that reduce burdens and maintains freedom of choice for the public. 

I do not see how the regulations that will force as many as 80 

percent of small businesses to drop their employees’ health coverage can possibly pass any of these tests and criteria that the 

President outlined. Quite frankly, it seems like Obamacare itself 

has received a waiver from this executive order itself. 

In addition to prospective requirement agencies are supposed to 

adhere to while promulgating regulations, the executive order directs agencies to conduct ongoing, retrospective analyses to identify 

rules that should be streamlined, reduced, improved, or eliminated. 

HHS arguably touches more aspects of America’s daily lives than 

any other agency. FDA in itself regulates more than 25 percent of 

the U.S. economy. We need to ensure that the regulations it has 

on the books as well as the ones it is currently drafting promote 

public health as well as private sector innovation and job creation. 

After all, the health and well being of our citizens is inherently tied 

to the health and well being of our economy. The number and size 

of the regulations that have been expedited through the review 

process at HHS and ORIA is matched only by the number and size 

of the rules still in the queue. Among these is the establishment 

of an essential benefits package, which will increase premiums and 

further put people’s coverage at risk. 

Hopefully our witnesses today—our witness today will share with 

us what HHS has learned from the process used to promulgate 

such rules and regulations as the grandfathered health plans rule. 

HHS will hopefully do better, while reviewing the essential benefits 

package and other large rules coming down the pike. 

An unprecedented amount of authority has been delegated to 

HHS and other agencies in the administration. The principles 

President Obama affirms in his executive order are important. We 

agree. I am just concerned they are being ignored when it comes 

to the actual implementation of large scale government program 

such as the President’s health care plan. 

I would like to welcome our witness, Sherry Glied, who is the assistant secretary for planning and evaluation at the Health and 

Human Services Department. And with that, I recognize the ranking member of Energy and Commerce, the distinguished Henry 

Waxman from California. 

[The prepared statement of Mr. Stearns follows:] 

5 

6 

7 

8 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you, Mr. Chairman. The subject of regulatory reform deserves review, and Congress has a legitimate interest in making sure that the administration is living up to its promises with regard to making the regulatory process simple and more 

transparent. But as we investigate regulatory reform, we need to 

make sure we consider both the costs and the benefits of regulations. 

This is the third hearing in this committee on regulatory reform 

this year. In these hearings, the administration’s opponents have 

relentlessly focused on the negative with no regard for why we 

need regulations or for the good that they do. Regulations aren’t 

pulled out of thin air for no reason. They exist to implement laws 

Congress enacted to help protect taxpayers’ funds, improve public 

health and safety, keep our air and water clean, and keep consumers safe. 

Today’s hearing is a good illustration. Some of the administration’s recent health regulations will do enormous good for American 

families. New food safety regulations promulgated by FDA will reduce salmonella contamination and prevent as many as 79,000 illnesses each year. New tobacco control regulations promulgated by 

FDA will protect children and adolescents from the dangers of addiction to cigarettes and smokeless tobacco. 

New regulations issued by CMS under the Affordable Care Act 

will end the insurance industry’s worst abuses. They will prevent 

health insurers from rescinding policies when beneficiaries get sick, 

end discrimination against children with preexisting conditions, 

prohibit the imposition of lifetime caps on coverage and require all 

health plans to put more of consumers premium dollars into actual 

care and less into insurance company profits. 

Another set of CMS regulations also authorized by the Affordable 

Care Act will cut Medicare and Medicaid fraud and save taxpayers 

millions of dollars. No one wants unnecessary or duplicative regulations, but at the same time, no one should want to eliminate regulations that save taxpayers money and protect the health and welfare of America’s families. 

That is why we must look at both the costs and benefits of regulations. When we focus solely on costs, as often seems to happen 

in this committee, we lose sight of the critical benefits these regulations provide. 

Before I yield back my time, I want to note that Ranking Member Diana DeGette regrets being unable to attend this hearing. 

Today is a return day. We don’t have votes until 6:30, and unfortunately the ranking member of the subcommittee was not consulted 

about the hearing that was going to be called today before 6:30. In 

the last Congress, we engaged in a lot of these consultations. I 

think they are useful for everybody involved, and I would urge the 

majority to be sure to consult with the minority so that the minority ranking members of the subcommittee can change their schedules or can be accommodated in some possible way. 

I have completed my opening statement. I want to welcome Ms. 

Glied to be here. We are looking forward to your testimony. I think 

9 

what HHS is doing by way of regulations is very important, very 

worthwhile, and while any regulation may have some downsides, 

we have to realize that many of them have very, very important 

upside for the American people. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Waxman follows:] 

10 

11 

12 

Mr. STEARNS. I thank the gentleman from California. I would 

point out that we gave 1 week’s notice according to the rules for 

this hearing, but I also want to again reiterate we welcome Sherry 

Glied. She again is the assistant secretary for planning and evaluation at the U.S. Department of Health and Human Services. 

And, madam, as you know, the testimony that you are about to 

give is subject to Title 18, Section 1001 of the United States Code. 

When holding an investigative hearing, this committee has a 

practice of taking testimony under oath. Do you have any objection 

to testifying under oath? 

Ms. GLIED. No, sir. 

Mr. STEARNS. The chair then advises you that under the rules of 

the House and the rules of the committee, you are entitled to be 

advised by counsel. Do you desire to be advised by counsel during 

your testimony today? 

Ms. GLIED. No, sir. 

[Witness sworn.] 

Mr. STEARNS. You may now give your 5-minute opening statement. Thank you. 

TESTIMONY OF SHERRY GLIED, ASSISTANT SECRETARY FOR 

PLANNING AND EVALUATION, U.S. DEPARTMENT OF 

HEALTH AND HUMAN SERVICES 

Ms. GLIED. Mr. Chairman, Congressman Waxman, other members of the subcommittee, my name is Sherry Glied, and I am the 

Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services. I am grateful to have the 

opportunity to appear before you today to discuss issues relating to 

regulation and to Executive Order 13563, Improving Regulation 

and Regulatory Review. 

I will focus in particular on the retrospective review of the existing rules. The President’s order laid the foundations for a regulatory system that is designed to protect public health and welfare 

while also promoting economic growth, innovation, competitiveness, 

and job creation. On May 18 and in compliance with the executive 

order, HHS released our preliminary plan. HHS’s systematic review of regulations will focus on eliminating rules that are no 

longer necessary and strengthening or modernizing rules where appropriate. 

For example, the Centers for Medicare and Medicaid services is 

working to address conflicting requirements between Medicaid and 

Medicare that potentially create barriers to high quality, seamless, 

and cost-effective care for dual eligible beneficiaries. 

The Administration for Children and Families is also encouraging State’s child support programs to use cost-effective technologies like electronic signature and document storage. And the 

Food and Drug Administration is going paperless with its adverse 

events reporting requirements for medical devices. 

HHS’s retrospective review plan has 4 goals: to increase transparency, to increase opportunities for public participation, to set 

retrospective review priorities, and to strengthen analysis of regulatory options. This administration believes that retrospective regulatory review must be accompanied by efforts to make more inforVerDate Nov 24 2008 10:22 Dec 19, 2011 Jkt 037690 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 F:\112-060 HHS REG REFORM-AWAITING APPROVAL\112-60 HHS REG REFORM PEND
13 

mation available to all interested parties and that regulations and 

the regulatory process should be as clear as possible. 

HHS will increase transparency in its regulatory process by making available to the extent feasible and permitted by law information that is useful for businesses, States, local and travel government, and the public. It is essential that people be able to understand the basis of a proposed regulatory activity including the 

science or evidence base for a regulation. 

Public participation is a very important part of our retrospective 

review plan. We are currently soliciting public comment on the 

HHS preliminary plan on the www.hhs.gov/open Web site through 

June 30. Suggestions are welcome, and HHS will carefully review 

all comments before finalizing our plans. HHS also intends to increase the breadth and quality of public participation in its rolemaking and retrospective review activities. 

All HHS agencies already reach out to obtain public input and 

advice on regulation subject to review and modification. For example, twice a year, FDA sends letters to State and local elected officials and to small businesses, highlighting upcoming regulations 

and seeking suggestions o FDA’s regulatory activities. 

FDA also recently established a new web page specifically devoted to its regulatory review activities. CMS conducts monthly 

open-door forums and provider outreach activities. Feedback from 

these activities allows CMS to identify and change obsolete regulatory requirements and to reduce regulatory burden. 

Moving forward, HHS is establishing a public participation task 

force within the department to explore way to increase interactivity 

in the public comment process including the use of podcasts, 

webinars, video teleconference sessions, wickeys, YouTube, and 

other social media. 

HHS has also actively encouraged public participation as we implement the Affordable Care Act. For example, we solicited public 

comment even before putting out rules around medical loss ratios, 

grandfathered health plans, and rate review. Similarly, CMS held 

public forums on wellness and exchanges to provide opportunities 

for public input by effected stakeholders. 

The last cornerstone of our plan is to strengthen the use of regulatory analysis such as cost/benefit analysis. The secretary has 

asked me to establish an agency-wide analytics team to share information, make the quality of analysis more consistent across the department, and ensure the integration of such analysis into regulatory decision making to improve the quality of the regulations we 

promulgate. 

We have also redoubled our longstanding commitment to making 

regulatory review an integral part of our operations and culture. 

As our work continues in the months and years to come, we will 

rely on the four key principles I have just highlighted: increasing 

transparency, improving public participation, being clear about our 

priorities, and ensuring that analysis guides our efforts. Our department’s mission is to protect the health and safety of all Americans. The plan we will be discussing today does that while promoting economic growth, job creation and innovation. 

I look forward to working with you in this endeavor and am 

happy to answer any questions. 

14 

[The prepared statement of Ms. Glied follows:] 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

Mr. STEARNS. Dr. Glied, thank you very much. I will start the 

questions here. What we have in the Oversight and Investigation 

Subcommittee is a little different. We try to get succinct answers 

because we are more of an investigative body rather than a legislative body. So if you possibly can, just keep your comments short. 

Just by background, I understand you are an economics professor 

at Columbia. Is that correct? 

Ms. GLIED. Yes, sir. 

Mr. STEARNS. Did your background include any health-related 

things at being an academic professor at Columbia? 

Ms. GLIED. Yes, sir. 

Mr. STEARNS. Did you—is this your first job working in the administration? 

Ms. GLIED. No, sir. 

Mr. STEARNS. What other administrations did you work for? 

Ms. GLIED. I worked for the first Bush administration back in 

1992 and for the Clinton administration in 1993 at the Council of 

Economic Advisors. 

Mr. STEARNS. And was that dealing with health too? 

Ms. GLIED. Yes, sir. 

Mr. STEARNS. So when you walked into this job, you didn’t feel 

like you were walking into a brand new storybook? 

Ms. GLIED. No, sir. 

Mr. STEARNS. OK, how does Health and Human Service identify 

which rules that are already on the books will be reviewed? 

Ms. GLIED. We have laid out, after process of public comment, a 

set of principles that are going to guide which rules we want to 

look at. And we have also opened our plan up to the public for further comment so they can also suggest rules they would like us to 

look at. But the main principles that guide our decisions are situations where circumstances have changed since the rule was originally promulgated, where new technologies or innovations have 

come along that should lead us to change how we do something, or 

there has been a failure to realize public health benefits that were 

anticipated on passing a rule. 

So for example, HRSA, the Human Resources and Services Administration, has rules that were promulgated back in the 1970s 

defining health professional shortage areas. That is a real priority 

for us to go after because it has been a long time since we have 

looked at those rules. 

Mr. STEARNS. You indicated there might be public comment to 

or— 

Ms. GLIED. Yes, sir. 

Mr. STEARNS. —the public can submit to you rules that they 

think are outdated too. 

Ms. GLIED. That is correct. The Web site is open for comment 

through June 30. 

Mr. STEARNS. Once a rule is identified for review, possibly reform 

or elimination if it goes back to 1970, what is the next step, and 

how long does the process take? 

Ms. GLIED. I think that we will see that as we go through each 

rule. Each rule will go through a careful analysis including redoing 

the regulatory impact, trying to assess what the impact of that rule 

25 

is, and what potential for modification or rescission of that rule 

might be appropriate. 

Mr. STEARNS. So is it possible that you could interpret through 

your office a way to enforce a rule in a totally different manner? 

Ms. GLIED. We have to abide by the statutory authority under 

which the rule was promulgated, but we could look at that rule and 

come up with better ways of doing it. 

Mr. STEARNS. But you are saying you could also decide not to enforce it. 

Ms. GLIED. Only if that would be consistent with the statutory 

authority under which the rule was promulgated. 

Mr. STEARNS. Well, if it is on the books and it is statutory authority, how could you suddenly decide not to enforce it? 

Ms. GLIED. We would have to enforce it. We might come up with 

a different way to enforce it, a different way to implement the authority. 

Mr. STEARNS. So you would come up with a new interpretation? 

Ms. GLIED. Correct. 

Mr. STEARNS. Would this go to public comment? 

Ms. GLIED. All of our laws do go to public comment, yes. 

Mr. STEARNS. And how long is that public comment? 

Ms. GLIED. There is a standard process where we might put out 

a notice of proposed rulemaking and seek public comment on that. 

I don’t remember exactly how long it is. A couple of months, I 

think. 

Mr. STEARNS. Have you identified any rules already? I mean how 

many rules have you identified today? 

Ms. GLIED. The first part of this process was for the various 

agencies within HHS to identify rules that they thought were important. We have identified many rules. I would say dozens of rules 

already that we are looking at. In a separate and parallel effort, 

CMS has looked at its own ways of doing business and has identified 80 practices including rules that it is going after. So there is 

a large number that we are investigating. 

Mr. STEARNS. So you are saying at this date you have identified, 

in your office, 12 rules? 

Ms. GLIED. No. 

Mr. STEARNS. You said dozens. 

Ms. GLIED. More than dozens. More than a dozen. 

Mr. STEARNS. More than? So would you say 48 or 24? 

Ms. GLIED. I don’t have the exact number before me, and we are 

waiting for public comment to get more rules in. So we anticipate 

that we will get quite a few. 

Mr. STEARNS. Anybody on your staff that could tell you how 

many rules you have identified so far? Just approximately. 

Ms. GLIED. Probably—— 

Mr. STEARNS. Are we talking about 10? 

Ms. GLIED [continuing]. 20, 25 so far. 

Mr. STEARNS. Twenty? Twenty-five, OK. 

Ms. GLIED. I am not—I don’t want to be, you know—— 

Mr. STEARNS. No, I am not going to hold you to it. It is just a 

round figure. 

Ms. GLIED. And we are waiting for public comment to get many 

more. 

26 

Mr. STEARNS. Of any of those 25, have you decided not to enforce 

any of those 25? 

Ms. GLIED. We haven’t—no, we have not decided not to enforce 

any of them. We are looking at ways to revise them. For example, 

to recalculate how we would determine to help professional shortage area or to change the way we use symbols and device labeling 

at FDA. 

Mr. STEARNS. And so the criteria—I would like to understand 

how you decided to select those roughly 20 rules. How did you single those out? Was it age on the books or based upon implementation not working, or is it based upon not clear? What— 

Ms. GLIED. We laid out five, a series of criteria including that 

there were new technologies, that there had been changes—— 

Mr. STEARNS. Which you mentioned earlier. 

Ms. GLIED. Right, the ones that I had mentioned earlier. 

Mr. STEARNS. Those are the criteria you mentioned earlier. 

Ms. GLIED. So we looked at them. We asked all of the agencies 

to look at the rules on their own books to see ones that made the 

most sense to modify where they had opportunities to modify those 

rules and see that it looked like it was important. And now we 

have opened it up for public comment so that other people can also 

tell us where they think we should be looking. 

Mr. STEARNS. It seems to me that, you know, the executive 

branch issued this executive order to look at these rules, but as I 

recollect, it is already on the books that HHS should be doing this 

on a regular fashion. Isn’t that true? 

Ms. GLIED. That is true. There are several authorities under 

which we already look at rules, the Regulatory Flexibility Act. 

Mr. STEARNS. So would it be fair to say that the executive order 

really wasn’t necessary because the legislation is already on the 

books to do exactly what you are doing, and it wasn’t necessary for 

the executive order to be issued? 

Ms. GLIED. We have routinely within the department looked over 

our rules, and we—even before the executive order came forward, 

we had rules that we were working on. But the executive order 

does tell us to prioritize this activity, and that is what we have 

done. 

Mr. STEARNS. In your plan, it says ‘‘the priority will be to identify 

regulations that agencies can easily modify, streamline, or rescind 

to address regulatory burdens or inefficiency.’’ You feel this is 

strong enough? 

Ms. GLIED. I think those make sense as a criteria for us to look 

at, yes. 

Mr. STEARNS. And you are saying one of your criteria is to take 

and prioritize regulations that are easiest to fix. Wouldn’t also you 

determine what is the most impact? 

Ms. GLIED. Of course, you want to look at both—— 

Mr. STEARNS. I mean I would think that that would be the criteria rather than easiest to fix because you might be putting a parentheses somewhere, and that is easiest to fix. But it really is a 

meaningless regulation. Whereas you might have a whole set within that 20 that has huge impact, that would impact constituents. 

27 

Ms. GLIED. As you know, Chairman Stearns, we want to weigh 

the costs and benefits of everything we do, including which regulations to pick. The ones that are—— 

Mr. STEARNS. Do you actually weigh the cost benefits? 

Ms. GLIED. Yes. 

Mr. STEARNS. Do you do an economic analysis? 

Ms. GLIED. We do. For any regulation we put forward, we do an 

economic—— 

Mr. STEARNS. Even if it is easiest to fix? 

Ms. GLIED. Well, if it is easiest to fix, the cost of repairing it are 

very small, and that has to be taken into account. So we take into 

account both what can be done easily and what is most important 

to do, and both of those things need to be weighed. 

Mr. STEARNS. Now, I am sure this is pretty easy to understand 

for you. Aren’t the most burdensome regulations the ones that are 

most complex? Is that a fair statement? 

Ms. GLIED. Not necessarily, Chairman. Sometimes there could be 

very burdensome regulations that are very simple. 

Mr. STEARNS. Let me give you an example. Under the President’s 

health care plan, this is a regulation that those covering medical 

loss ratios—and I have talked to insurance companies about this— 

accountable care organizations and grandfathered health plans, 

these are pretty complex rules. Wouldn’t you agree? 

Ms. GLIED. Some of them are complex, yes. 

Mr. STEARNS. OK, yet your plan says that that complexity on important rules would make it not a priority for your review. That is 

what we understand. That because of the complexity of it, you have 

not done a review. Yet everywhere I go, people are talking about 

medical loss ratio, how complicated it is and the impact it is going 

to have. It seems like that one would be one you would look at together with, as I mentioned, the grandfathered health plans, what 

that means in accountable care organizations. 

Ms. GLIED. So, Chairman, you have spoken about three of our 

very important regulations under the Affordable Care Act, which 

promulgate regulations to really put forward a change in the U.S. 

health care system that I think is very important. Those regulations have only very recently been passed. So we are not going to 

look at them not because of their lack of complexity, but because 

there has been no change in circumstances. There have been no 

new technologies or innovations. There is really not much that has 

changed since we promulgated those rules that would lead it to 

make sense from a—to look at them again within this short period 

of time. 

Mr. STEARNS. We both agree that you would look at burdensome 

regulations if they had a huge economic impact. I think you said 

you would. 

Ms. GLIED. We have just completed doing the economic impact 

analysis of those regulations. So we have already weighed their 

benefits and costs and shown that their benefits considerably exceed their costs. 

Mr. STEARNS. Well, if I identified—let us take medical loss 

ratio—as having huge economic impact, is it safe to say that you 

are going to look at that regulation in detail and allow public to 

comment on it in the very near future? 

28 

Ms. GLIED. Chairman, that regulation was actually developed 

after an extensive period of public comment, and we had assessed 

the cost and benefits. We estimate that the cost of that regulation 

for insurers are on the order of $100,000 per insurer for insurance 

to set up the plan and $25,000 per insurer to continue maintaining 

the plan over time. And then it is going to generate $3 billion in 

benefits to American consumers over the period from 2011 to 2013. 

That is a great benefit/cost ratio. 

Mr. STEARNS. Now those analyses that you did are within—your 

department made those projections, right? 

Ms. GLIED. That is correct. 

Mr. STEARNS. That was not done by an outside accounting firm 

or an outside economic group? It was done by your people, right? 

Ms. GLIED. As with all regulatory impact analyses, those are conducted within the agency and reviewed by OIRA. 

Mr. STEARNS. Have you actually sat down with the people that 

have been impacted, insurance companies? Do they agree? Because 

I heard—I have not heard any of them think that it is just going 

to cost $100,000 plus the very small figures that you—none of them 

have told me that. So I don’t know where you get your figures. 

Ms. GLIED. Chairman Stearns, the rules for the medical loss 

ratio were actually developed by the National Association of Insurance Commissioners, which is an organization of all the state insurance commissioners from around the country. They are the ones 

who developed these rules, and we worked on the regulatory impact analysis in conjunction with those rules that that had developed. 

Mr. STEARNS. Well, as you know, between the cup and the lip, 

if you develop a regulation based upon someone else, there could 

be some nuisances of parse language. Because the insurance companies are not coming back, at least to this member, and feeling 

the costs are so diminutive that you pointed out. Let me go to another series of questions here. I think I have the opportunity to 

speak a little longer. I assume that there is no one on the Democrat side, and I am sure they would want me to use my time as 

wisely as I could so that I will continue. Dr. Glied, if you don’t 

mind, we will—I will be glad to—if another member shows up, I 

would be glad to—I am told Mr. Waxman might come back. I hope 

he will. He had very good questions to offer you too. 

Dr. Glied, you have released your preliminary plan for retrospective review of existing rules. Is that correct? 

Ms. GLIED. Yes, sir. 

Mr. STEARNS. This is a retrospective plan though. Is that correct? 

Ms. GLIED. This particular part of the plan is retrospective, yes 

Mr. STEARNS. Because it only looks backwards. 

Ms. GLIED. Many of the principles in the plan are also encapsulated in existing HHS practices, so the President actually specifically called for retrospective review. But we actually have implemented those principles both going prospectively and looking the 

regulations we are about to promulgate and concurrently, the regulations that we are working on right now as well as retrospectively, 

sir 

29 

Mr. STEARNS. That is a pretty good answer. You have it both 

ways there. Of the 20 regulations, how many of those are retrospective and how many... 

Ms. GLIED. But those are retrospective. That is part of our retrospective review plan, but we are engaging... 

Mr. STEARNS. Do you have any prospectively? 

Ms. GLIED. So prospectively, we are working on many regulations 

right now, and we have already implemented those efforts by, for 

example, increasing the transparency with which we put forward 

those regulations, by putting them up on our Web sites in a much 

more easy to access way, and by getting public comment even before we start the rulemaking process 

Mr. STEARNS. It is interesting with the passage of the President’s 

health care plan, there is so much regulation that involves moving 

prospectively forward. And so yet you are talking at this point of 

retrospective. So I guess the question is how would your office address prospectively all of the regulations from the President’s 

health care? Because as this is presented and enforced every year, 

there is going to be much complexity and much angst. 

As you saw the graph I showed, small, medium, and large businesses, particularly small businesses have decided, almost 80 percent in the next 2 years, they are going to give up their health care 

plan, and they are going to go to the government option. So you 

see the angst is out there. So I guess the question is how does your 

plan address these prospective regulations that are all part of the 

President’s new health care plan? 

Ms. GLIED. Sir, the Affordable Care Act offers great new opportunities for small businesses. As you know, they are already eligible 

for tax credits, and they will be able to buy insurance on much better terms. We can really level the playing field once those exchanges get going. 

As we develop those plans to get the exchanges going to move 

into 2014, we are soliciting a lot of public comment, both in advance of rulemaking and as part of the rulemaking process, including a lot of public comment from small businesses, from providers, 

from insurers, from all affected groups. 

Mr. STEARNS. Dr. Glied, I think that what you can hear from me 

is, based upon the graph I showed you and the angst that is out 

there, that retrospective is fine, but there is a huge, burdensome 

number of regulations that are being implemented as we move forward. And I just—I think on this side of the aisle, we would certainly like to feel that you are using your general principles that 

you mentioned in your opening statement are being applied to the 

rules from—for the President’s health care. 

So that in addition to looking at rules that are obsolete, not effective, burdensome, complex, that same thing applies in probably a 

larger sense based upon what we see and the statistics and based 

upon that graph, that we would urge you to also concentrate and 

focus your energy on the President’s health care plan moving forward. 

With that, my time is expired, and we recognize the gentleman 

from California, Mr. Waxman. 

Mr. WAXMAN. Thank you, Mr. Chairman. Dr. Glied, regulations 

have two sides to them. There are downsides because we are reVerDate Nov 24 2008 10:22 Dec 19, 2011 Jkt 037690 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 F:\112-060 HHS REG REFORM-AWAITING APPROVAL\112-60 HHS REG REFORM PEND
30 

quiring some industries to have to do something often or regulations mean we are regulating certain activities. But there is an upside to it, and sometimes we don’t hear about the upside, especially 

in this committee. For instance, there are estimated 19.4 million 

children living in this country with preexisting conditions. Until 

last year, it was perfectly legal for insurance companies to discriminate against these children, issuing riders that excluded coverage 

for critical medical problems or refusing to cover these children at 

all. 

And when the Republicans said they wanted to repeal the ACA 

and then replace it, I would have thought they were saying they 

were going to replace some of these very same provisions. Otherwise, what are they doing to help children and families, Americans 

that can’t get insurance because they are being discriminated 

against? 

Is it true that extending coverage to children with preexisting 

conditions provides benefits to the children, their families, to the 

country as a whole? 

Ms. GLIED. Yes, sir, it certainly does, and I think it also improves 

the efficiency of our economy because my providing coverage to 

children with preexisting conditions, we make it easier for their 

parents to choose the right job for themselves and to really seek 

employment opportunities that might not otherwise be available to 

them. 

Mr. WAXMAN. Now, HHS has also issued regulations to end the 

lifetime caps on coverage, prevent insurance companies from using 

decades-old paperwork errors to justify canceling someone’s insurance as soon as they get sick. These practices also have costs. They 

may cut into the insurance industry’s bottom line. But, Dr. Glied, 

in issuing regulations that ban the practices, did HHS determine 

that such bans would have significant benefits? 

Ms. GLIED. They certainly did. We certainly did. In fact, the estimates that those consumer protections and the patient bill of rights 

would increase insurance premiums by 4/100ths of 1 percent—between 4/100ths of 1 percent and 2/10ths of 1 percent, a tiny increase in costs. And in exchange for that, all Americans would get 

reliable valuable coverage. And about 25,000 people who already 

exhausted the lifetime limits in their coverage would actually have 

meaningful insurance for the first time. 

Mr. WAXMAN. We hear a lot about burdens on industry from our 

Republican colleagues, but I think a conversation about HHS regulations, their focus is exclusively on costs borne by the insurance 

industry is dangerously misleading. To understand the real impact 

of regulations, we have to consider the health benefits and cost savings offered to consumers as well. And I assume that HHS considered the full range of both costs and benefits in issuing these regulations? 

Ms. GLIED. Yes, sir, we did. 

Mr. WAXMAN. Many of my colleagues on the other side of the 

aisle have raised concerns that these regulations, under the affordable care act, were not subject to retrospective review that HHS 

conducted. In the executive order issued in January, President 

Obama cited a number of principles of regulatory review. The 

President required regulations to be proposed or adopted only when 

31 

benefits justified costs. He asked for regulations to be tailored to 

impose the least burden on society. Then he called for regulations 

to be adopted through a process that involves public participation. 

Dr. Glied, I would like to ask you some questions about regulations issued under the Affordable Care Act and the manner in 

which they were promulgated. Did the department issue regulations under the ACA only when it found the benefits of a rule outweighing the costs? 

Ms. GLIED. Yes, sir, we did. 

Mr. WAXMAN. Can you provide some examples of regulations 

issued under the Affordable Care Act where the benefits outweigh 

the costs? 

Ms. GLIED. Well, for example, the regulation that requires that 

insurers allow young adults up to age 26 to remain on their parents’ insurance coverage is estimated to increase premiums by 

about 1 percent for families and to cover over a million young 

adults, up to a million young adults. And that will improve the 

earnings of those young adults, reduce uncompensated care, improve job mobility within the American economy, so the benefits 

are enormous. 

Mr. WAXMAN. In his executive order, President Obama emphasized the importance of public participation in the rulemaking process. He wrote ‘‘regulations shall be based to the extent feasible and 

consistent with the law on the open exchange of information and 

perspectives among state, local, and tribal officials, experts in relevant disciplines, effected stake holders in the private sector, and 

the public as a whole.’’ Dr. Glied, can you explain how HHS incorporated public participation into the ruling making process under 

the Affordable Care Act? 

Ms. GLIED. Yes, sir. As you know, the rulemaking process has periods of public comment built into it, but we went well beyond 

those required periods of public comment and actually solicited 

public comment even in advance of beginning our rule making 

around the medical loss ratios, rate review exchanges, and so on. 

We held open forums around external review and co-ops. We have 

been very proactive in getting out there and asking stakeholders to 

give us their views. 

Mr. WAXMAN. Well, I know that the Republicans have a fervent 

opposition to the whole law, but I hope that that doesn’t cloud their 

ability to thoughtfully examine the administration’s steps to apply 

executive order principles to the health reform regulatory process. 

I know that they would want those principles applied to all regulations, which is what the President intended in opposition to a certain law. It is the law. Shouldn’t affect their appreciation that the 

department, in your case of HHS, has tried to keep within the 

President’s executive order in following the regulatory procedures 

that would weigh the benefits and the costs and do what is best 

after full participation of all the parties in establishing those regulations. 

Thank you, Mr. Chairman. I yield back my time. 

Mr. STEARNS. I thank the gentleman. We recognize the gentleman from Louisiana, Mr. Scalise, for 5 minutes. 

Mr. SCALISE. Thank you, Mr. Chairman. If I could, I would like 

to ask a little bit about the waivers that have been issued for 

32 

Obamacare. We had a hearing on the issue in general. A lot of unanswered questions regarding the number of entities, both businesses and labor unions that have requested and received waivers. 

A lot of unanswered questions about who has requested and been 

denied waivers. So first if you can give me kind of the broad brush 

of the administration’s policy on this. How long have waivers been 

granted? And can you further expand on who has not been granted 

waivers and why? 

Ms. GLIED. So the criteria that we use for providing waivers 

around the annual limits within the Affordable Care Act, and those 

waivers are waivers that allow farms in the short run as a bridge 

to when we provide people with much better coverage in 2014, to 

continue to have plans that have annual limits in them. 

So the waivers allow plans to maintain those annual limits just 

until 2014. We have—the criteria that have been established to 

grant waivers are up on the HHS Web site and are available, as 

is the complete list of all of the entities that have been granted 

waivers. And, sir, fewer than 10 percent—sorry, fewer than 2 percent of the health insurance market has been—is in plans that 

have been associated with waivers. So the waiver—— 

Mr. SCALISE. How many—if roughly 1,400 entities have been 

granted waivers, those are the most updated numbers I have. I 

don’t know if you have more updated numbers. I think 1,372 entities, employers, unions, other entities have been granted waivers. 

What numbers do you have? 

Ms. GLIED. Those are the numbers. I am not familiar with other 

numbers, sir. 

Mr. SCALISE. OK, so you would say that that is a fair number 

to use? 

Ms. GLIED. I believe so. 

Mr. SCALISE. And that is who have been granted. Do you know 

how many have been denied, who have requested a waiver but 

have not been granted it? 

Ms. GLIED. I believe the list of entities that requested waivers 

and were denied them was actually given to this committee. So you 

actually have those. 

Mr. SCALISE. OK, and I will pull those if they are here. When 

you talk about fewer than 2 percent, have—I guess that is of all 

the companies that provide health care for their employees, fewer 

than 2 percent of the companies have been granted a waiver? 

Ms. GLIED. Less than 2 percent of the market is affected by these 

waivers, yes. 

Mr. SCALISE. Yes, and when you say affected, this gets, I guess, 

into the bigger question. You know when I talk to small business 

owners, and this last week we had a district work period. And 

again I was meeting with small businesses throughout my district, 

and I hear this from other colleagues of mine. Small businesses I 

talk to, they don’t even know that there is the ability to go get a 

waiver. Many of these companies you talk to are struggling right 

now with how they are going to comply with Obamacare. One thing 

they do know is that it is going to be very difficult for them to comply, and they still don’t know what all the rules and regulations 

are because there are still many rules and regs still yet to come 

out. 

33 

But what they do know from what they have already seen and 

what they have calculated, it is going to be very difficult for them 

to comply. And when I ask them about this waiver process and talk 

to them about the nearly 1,400 entities, many of whom were ironically entities that were asking for the bill to be passed. I mean you 

get groups like AARP, a lot of these organized union groups who 

were up here at the Capitol saying we need this law. It is going 

to be so great. And then they went and kind of got this secret deal 

with the White House to get a waiver. 

A lot of these small businesses that didn’t want Obamacare in 

the first place don’t even know you can go get a waiver. So, you 

know, was this kind of some secret memo that was leaked? I mean 

why is it that our small businesses, who are on the front lines of 

creating jobs in America, who many of whom can’t go and create 

new jobs because of this law and other regulations like it, they 

don’t even know that this process is out there. 

When I tell them about it, they say look, I would love to get the 

waiver. And of course, you know, they are not even aware of it. I 

direct them, you know, to go apply. I would love everybody to be 

able to get a waiver from the entire law, meaning repeal of the law. 

But, you know, can you tell me what process you all use to promote 

it? Because it seems like a lot of the administration’s friends know 

about it and got the waiver, and a lot of small businesses across 

America don’t even know it exists. 

Ms. GLIED. The waiver process is—the information of the waiver 

process is publically available on our Web sites. And I think insurers particularly are very well aware of it. They are the ones who 

are selling the policies to small businesses that have the annual 

limits, if they have annual limits in them. Remember that the 

waiver is only applicable to 1 piece of the Affordable Care Act. 

Mr. SCALISE. Right, I mean it is an important piece of it though, 

and it is a piece that many employers seem to have a problem with 

compliance on. In many cases, it is going to be yet another determining factor on whether or not these employers can continue to 

provide health care to their employees, and their employees like 

the health care plan. 

Ms. GLIED. So it is providing—the annual limit regulation means 

that the health insurance that people buy actually has real value 

to them if they get sick. And the annual limit waiver process is 

simply a bridge to allow people to keep that coverage only until 

2014 when we will have a much better insurance system available, 

particularly to small businesses. 

Mr. SCALISE. Well, they are already paying higher premiums, but 

hopefully we don’t have Obamacare on the books anymore, but it 

just seems like there was a favoritism that was shown because, like 

I said, ironically a lot of the companies and entities that have received the waivers were many of the same that were working with 

the administration to pass the law, and many of the people, our 

small businesses, our job creators across the country who didn’t 

want this in the first place, don’t even know it exists. 

So, you know, again it just seems like a real peculiar situation 

that seems like some of the biggest proponents of the law and the 

favorites of the administration are the ones who know about it and 

34 

got the waivers. People who don’t want it don’t even know it existed. I yield back. 

Mr. STEARNS. I thank the gentleman. I will continue with my 

questions. Mr. Waxman made some points in his opening statement. I thought I would follow up, Dr. Glied. He referred to the 

ban on preexisting exclusions for children. Are you aware that 

since passage of the President’s health care plan, many insurers 

have opted not to offer child-only policies? So because of what the 

regulation says, they are getting around it by offering no child policies. Did you know that? 

Ms. GLIED. I think it is horrifying, Chairman Stearns, that any 

insurer would choose to deny providing coverage to children who 

are sick, and I think it is one of the reasons that we needed the 

Affordable Care Act in the first place. Beginning in 2014, these 

practices will not be possible, and insurers will be providing insurance to all Americans. 

In the meantime, the administration has taken serious steps to 

make sure that children who have been denied coverage because of 

insurance company practices can get it within every state. 

Mr. STEARNS. So how would, for example, in the State of Florida, 

if the insurance company did not provide it, how would a person 

get it for their child? 

Ms. GLIED. Chairman, I will have to get back to you about the 

details in Florida. Different arrangements have been made in different States. 

Mr. STEARNS. Let us take your State of New York. How would 

you do it in New York? 

Ms. GLIED. There is not a problem in New York because we have 

community rating and guaranteed issue already. 

Mr. STEARNS. So a person would just apply? 

Ms. GLIED. Yes, there is no problem in New York. 

Mr. STEARNS. This whole question—we wrote a letter to Mr. 

Waxman, in all deference to him, last year, asking for a hearing 

on this. We never heard back. So he is making a point about this, 

but I just want to make it clear that we are on record of asking 

for a hearing on this. 

He also mentioned that the ban on annual limits. This obviously 

could lead to increases in the premiums or loss of coverage. Don’t 

you agree? 

Ms. GLIED. Mr. Chairman, the basic economics of insurance that 

says insurance is most important and most valuable to people 

when it protects them against catastrophic losses, that is very high 

losses. Insurance that includes annual limits doesn’t meet that 

basic economic test for value. It is really critical that we get rid of 

those lousy policies. 

Mr. STEARNS. Mr. Scalise mentioned the waivers. These waivers 

are only good for one year, right? 

Ms. GLIED. Correct. 

Mr. STEARNS. So these 1,400 people that got waivers, McDonald’s, Waffle House, seven States, they are all going to have to 

come back in a year, right? Would you be giving them waivers 

again? 

Ms. GLIED. I believe that the annual limit waiver process is 

under discussion right now. I am not aware of where it is going. 

35 

Mr. STEARNS. But isn’t the reason why you have these annual 

limits—this is why you have annual limit waivers. Is that correct? 

Ms. GLIED. The reason we have annual limit waivers is that we 

need to get from here to 2014. These provide a bridge until people 

can be assured of better, more valuable insurance coverage. 

Mr. STEARNS. When you passed legislation and you suddenly give 

out 1,400 waivers, what does that—wouldn’t that tell you something about the angst, the feeling of the people who are asking for 

those waivers, they can’t comply? Don’t you think that that shows 

that perhaps—and as Mr. Scalise said, I don’t think anybody in my 

congressional district knows they could get a waiver either. So if 

you really put the word out, I think you would find thousands of 

people asking for waivers. 

Ms. GLIED. That would be very disappointing, Chairman Stearns, 

because it would suggest that the magnitude of the problem of really lousy insurance policies in the United States is much greater 

than we had anticipated. 

Mr. STEARNS. That is funny. I would interpret it different. That 

is your—my interpretation is people do not want the President’s 

health care plan, and they can’t comply with the existing strategies 

and objectives that are outlined in your legislation, and they want 

out. Because if they thought it was going to be something they 

could comply with, they wouldn’t ask for a waiver. And in fact, the 

graph that we showed you clearly shows the most—that small businesses, 80 percent, and going to get out and just say forget it. We 

are not going to be bothered. We will just pay a fee and just let 

all our employees go into the government plan. So that is my opinion. 

Anyway, let me ask you another question. The key to this whole 

health care debate is what is the essential benefits package. That, 

I think, people have been asking me. What is the essential benefit 

package? And everybody is talking generalities. But what is the administration going to require, and what is the rule? Are you familiar with the rule yourself? 

Ms. GLIED. Yes, sir. 

Mr. STEARNS. And when will it be released? What date? 

Ms. GLIED. Sir, we are waiting for the Institute of Medicine, 

which was commissioned to do a duty to provide us with principles 

for determining the essential benefits package. And that report 

from the Institute of Medicine, which is this expert group, is not 

expected until late September. Beginning then, we will be working 

on developing the notice of proposed rulemaking that will include 

the principles around that. 

Mr. STEARNS. Within the legislation, they had sort of outlined 

what the essential benefits package. So here we are sometime after 

the passage, and yet you are saying that the essential rule will be 

released in September of this year. Is that fair to say? 

Ms. GLIED. The Institute of Medicine—so the President’s plan 

says that all Americans should be guaranteed a package that includes 10 critical categories of benefits—— 

Mr. STEARNS. Right. 

Ms. GLIED [continuing]. And that is similar to that offered to a 

typical—by a typical employer today. So that is a very basic standard of benefits that all Americans should be entitled to. 

36 

Mr. STEARNS. So it has to be 10? It couldn’t be 11? 

Ms. GLIED. There are 10 categories—— 

Mr. STEARNS. 10 categories. 

Ms. GLIED [continuing]. That have passed. 

Mr. STEARNS. But there could be more categories, or is 10 

the—— 

Ms. GLIED. It says that there are at least 10 categories that are 

laid out—— 

Mr. STEARNS. At least, OK. 

Ms. GLIED [continuing]. In the legislation. 

Mr. STEARNS. OK. 

Ms. GLIED. Those are things like hospital benefits, pharmaceutical benefits, things like that. 

Mr. STEARNS. Right. 

Ms. GLIED. Those are the categories. We have asked the Institute 

of Medicine, which is an august body of experts, to help us in defining a process for developing those benefits. 

Mr. STEARNS. All right. 

Ms. GLIED. They have been meeting for 6 or 8 months—— 

Mr. STEARNS. No, I understand. 

Ms. GLIED [continuing]. And have had a lot of public—— 

Mr. STEARNS. It is—— 

Ms. GLIED. It is a very challenging project. 

Mr. STEARNS [continuing]. Challenging. 

Ms. GLIED. But we are trying to get to get as much information 

as possible. 

Mr. STEARNS. And not everybody is going to be in agreement on 

these 10 essential benefits. I understand that, but I would just like 

to pin down a date. Can I say by 15 September this rule will be 

released? 

Ms. GLIED. No, sir, we are waiting for the—— 

Mr. STEARNS. How about 15 of September next year? 

Ms. GLIED. The Institute of Medicine is coming back in—— 

Mr. STEARNS. Well—— 

Ms. GLIED. Wait, the—pardon me. The Institute of Medicine is 

coming back in September. Then we will go into the rulemaking 

process. We are likely to put out a notice of proposed rulemaking. 

Then, of course, you would want us to wait for public comment on 

that before we finalize the rule. 

Mr. STEARNS. And public comment would be 60 days? 

Ms. GLIED. It will be—I don’t know how long it will be. I believe 

that there is a minimum, and I confess. I apologize. I don’t know 

what that minimum is. It can go longer than that. 

Mr. STEARNS. No, I understand, but let us just try to come up 

with a timeline. You are saying the report, this analysis, this study 

will be done by September. 

Ms. GLIED. At some point in September. 

Mr. STEARNS. And then after September, they will issue a rule 

within 30 days, 60 days? 

Ms. GLIED. I don’t exactly know. I am not privy to what exactly 

the timeline is. 

Mr. STEARNS. Get a rule for—— 

Ms. GLIED. We are working on that rule. 

Mr. STEARNS [continuing]. Before next year? 

37 

Ms. GLIED. We are working on the development of that rule, and 

there was be a notice of proposed rulemaking that will go out and 

that will lay out that and other elements. 

Mr. STEARNS. So when you sit in a meeting and you talk about 

the most important aspect about the President’s health care bill, 

what the essential benefits package is, no one ever says there is 

a drop dead date when we have to get this done? No one ever says 

that in the meeting? No one ever says we should get this done by 

X time? They just say we will just do it when we do it? Generally 

in planning of something of that magnitude, there is generally a 

timeline. You and I both know, and I think you would respect the 

fact, in your position, you would come up with a date. Let us shoot 

for this date, but you are telling me there is no date. There is no 

one that has asked the question what is the drop date, and you are 

just sort of winging along month after month? 

Ms. GLIED. We know that we need to give this information to 

States and exchanges so that they can lay out—— 

Mr. STEARNS. What date do you have to give it by? 

Ms. GLIED. The exchanges need to be up and—— 

Mr. STEARNS. Anyone on staff could tell us what date you expect 

to give it to the States? 

Ms. GLIED. I don’t think that there is a date that has been written down. We are trying to figure out when we can do this, and 

there are a lot of issues that are pending right now. 

Mr. STEARNS. It is a little puzzling, don’t you think? 

Ms. GLIED. The key here, I think, sir, is that the basic structure 

of the plan is very much defined in the legislation itself which calls 

for it to mimic a typical employer plan. So there isn’t that much 

leeway here. We are trying to lay down the specifics of this and 

many other provisions in the law through regulation, and this is 

one of them. 

Mr. STEARNS. You are building a ship, and you got 10 aspects, 

categories of the ship that have to be built, and they have to be 

coordinated and everybody agrees upon it. But I will tell you, there 

is a date when that ship expects to be done, when that ship is complete and everybody knows it. So you are telling me here that the 

essential benefits package, no one in your office, no one in any 

meeting has ever said to you when there is going to be a date when 

we can provide, one, for the public comment, two, hopefully for the 

States to comply. You can’t have it—— 

Ms. GLIED. Sir, I believe—— 

Mr. STEARNS [continuing]. 2014. 

Ms. GLIED. I am aware that the noticed of proposed rulemaking 

which will include the essential health benefits is supposed to come 

out this fall. I don’t have an exact date when in the fall. 

Mr. STEARNS. OK, I mean you are not going to go through a trap 

door if—— 

Ms. GLIED. No, I don’t know exactly what date it is in the fall. 

It is—— 

Mr. STEARNS. Because this trap door doesn’t exist. All you have 

to do in your best estimation—— 

Ms. GLIED. It will be in the fall though. 

Mr. STEARNS [continuing]. As the crowning chief here is to give 

us a little date. 

38 

Ms. GLIED. Fall, the fall. When in the fall? I don’t know. 

Mr. STEARNS. OK, the leaves turn in October. 

Ms. GLIED. The leaves turn in October. It is likely to be in October. 

Mr. STEARNS. OK. 

Ms. GLIED. It could be in November, sir. There you go. 

Mr. STEARNS. So we are going to say in October is when the rule 

will be released. Now, if you come back—— 

Ms. GLIED. It may be November. I don’t want to be held to October, sir. I don’t know. 

Mr. STEARNS. Now, if I was a businessman and I felt that I wanted to work with you—— 

Ms. GLIED. Yes, sir. 

Mr. STEARNS [continuing]. This uncertainty that you are creating 

by sort of double taking on this date provides me a feeling that I 

better not do anything until I start to see this essential rule. So 

you are an economics professor. You and I both know that uncertainty in the marketplace is not a good thing. Isn’t that correct? 

Ms. GLIED. That is correct, sir. 

Mr. STEARNS. So you are creating uncertainty by giving us such 

a nebulous span here of you are not sure of a critical aspect for the 

rule to be released on the essential benefit package. So I would just 

suspect that if I went back to your people, you could say look, why 

don’t we give the Oversight and Investigation Committee the best 

guess of what we can do because that would be better certainty 

than you are giving me today. 

Ms. GLIED. I will be very happy to go back and see if we have 

a date that we would be able to give to the Oversight Committee. 

Mr. STEARNS. Now, during this process here, are you going to 

meet with stakeholders? 

Ms. GLIED. Yes, sir. We actually have an extensive plan for public comment. That is one of the reasons we want to get the NPRN 

out. 

Mr. STEARNS. What individuals in the administration has HHS 

discussed this rule with, if any? 

Ms. GLIED. Within the administration? 

Mr. STEARNS. Yes, in other words, I assume these 10 categories, 

that you are talking to other people within HHS about these. I 

mean who is this cadre that we are talking with? 

Ms. GLIED. Well, the 10 categories, of course, are laid out in the 

legislation itself as is required... 

Mr. STEARNS. I know the categories are, but how about the people? 

Ms. GLIED. And we have already done work. We have released, 

for example, a report from the Department of Labor looking at 

what typical employer plans include. 

Mr. STEARNS. I am not being too clear on the question. When the 

FCC came up with the broadband plan, they went out and brought 

all these stakeholders in to help them write it. We didn’t like some 

of it, and then they paid them money. And they also had staff, but 

you are not doing that. 

Ms. GLIED. No—— 

Mr. STEARNS. You are not bringing in stakeholders to help you 

write the essential benefits package. You all are doing it in house. 

39 

Ms. GLIED. No, sir. That is actually one of the reasons we went 

to the IOM. The IOM is actually already engaged in a long period 

of public engagement. 

Mr. STEARNS. Who is the IOM? 

Ms. GLIED. The Institute of Medicine. 

Mr. STEARNS. OK. 

Ms. GLIED. They actually held two large public meetings back in 

January and April. They are—— 

Mr. STEARNS. Will they be writing the rule? 

Ms. GLIED [continuing]. Eventually going to be—they will be providing us with this process. We will then be working on the rule. 

We will be engaging stakeholders. We are actually developing a 

plan for actively engaging all types of stakeholders. Then we will 

release an NPRM and get even more stakeholder comment. 

Mr. STEARNS. OK. 

Ms. GLIED. This is actually anticipated to be a very public process, but we have to wait for the IOM report since we did commission it. 

Mr. STEARNS. OK, my time is expired. The gentleman from California, Mr. Bilbray, is recognized for 5 minutes. 

Mr. BILBRAY. Thank you. Look, Doctor, I would like to try to do 

something very unique in the Oversight hearing process. I would 

like to work with you to come to a consensus of a strategy we 

should go to. Rather than talking about stakeholders to, you know, 

someone to the left means political activist stakeholder. Somebody 

to the political right means business community. Let us talk FDA, 

and let us talk about real stakeholders, patients, people who are 

ill—— 

Ms. GLIED. Yes, sir. 

Mr. BILBRAY [continuing]. People who are dying, people who are 

waiting patiently for something to save their lives. Let us take a 

look at something that I think all of us can agree was a bipartisan 

effort that probably did—was more of a medical movement or success than anything we have seen probably since polio, and that is 

in the ’90s. We not only put massive amounts of research out there, 

but we changed our FDA oversight and regulatory guidance for 

AIDS. We did things to fight the AIDS epidemic that we basically 

hadn’t done in the past, at least the near past, and we haven’t done 

since as far as I know. 

And sadly, I think what happened was we were so successful 

that we walked away from that success and said OK, we have really done a great breakthrough here and pat ourselves on the back. 

But we left it at that. And this is what my challenge would be to 

you. What is the possibility of Democrats and Republicans getting 

together, taking a look at what we did in the ’90s to put AIDS in 

that situation, move it from acute to a chronic, basically make it 

a livable, survivable process? 

What is the possibility of us going back and saying damn it, we 

had a successful formula here? Why don’t we go back and take a 

look at that? And one of the most important successful formulas 

was not one of you got to have a bureaucracy that is totally insulated from the private sector so they are not polluted by capitalism. 

Or we have to have somebody who has some reality and connection 

to the industry so they know the physical movements. 

40 

And let me tell you something as somebody who comes from local 

government, a former mayor and county chairman, building inspectors are required to have had private sector involvement. And that 

is one of the most successful local government aspect. But that 

aside, I think the one place we should be able to agree is that we 

should be looking at implementing the stakeholders’ place at the 

table with all of these FDA reviews, not just on AIDS. 

And what is the possibility, do you think, of the administration 

working with us at modifying the FDA process at least—maybe it 

is some targeted issues. Maybe we talk about cancer. Maybe we 

talk about diabetes, but changing the oversight process to allow patients, not advocates, patients at the table like we did with AIDS. 

What is the possibility of us resurrecting that model and applying 

it as being the happy medium, some place the Democrats and Republicans can agree on? 

Ms. GLIED. That sounds like a very interesting idea, and I am 

actually not very familiar with the FDA is doing now to enhance 

patient engagement around medical innovation. I know that they 

have—they are working very hard to try and improve the speed 

and innovation process on several different fronts. But I am not actually sure how much patient engagement has played a part in 

that. 

Mr. BILBRAY. OK, let me just tell you—— 

Ms. GLIED. I will get back to you on that. 

Mr. BILBRAY. Doctor, if there is any place that I think the administration really is very vulnerable, and I praise the administration 

on—secretary of energy. I praise him what I think has been—you 

know, praise him about the team he put together for national defense. But if you look at the timelines since this administration has 

taken over—and granted it might be a timeline that started a little 

bit before this administration. 

Patients are watching the clock slow down. They are watching it 

so much to where we end up with what happened this week where 

you had the First Lady, rightfully so, point out that obesity is a 

major crisis here. And at the same time, the FDA telling a drug 

company that may have a major breakthrough in obesity, we are 

going to require you to go 60,000 test site number, and they are 

just basically saying forget it. They are packing up and going to 

Europe. 

At the same time that our system is doubling in certain applications, Europe is reducing their numbers with no more adverse impact. So if I can say frankly to you, I think we are in crisis at the 

FDA, and I am trying, rather than just screaming bloody murder 

about patients waiting, you know, on a death list, while the bureaucrats are fiddling. Why don’t we take a look at, OK, let us go 

back and maybe we can both work together and learn from the 

past and move it forward. 

Ms. GLIED. You know, the FDA has to balance patient protection 

and trying to take care of patients in need, and I understand that 

you know that too. Let me get back to you on some ideas that we 

have. 

Mr. BILBRAY. OK, my biggest point is this. As somebody that has 

worked 35 years in bureaucracy, I don’t care if it is FDA, I don’t 

care if it is a planning director, I don’t care if it is somebody putVerDate Nov 24 2008 10:22 Dec 19, 2011 Jkt 037690 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 F:\112-060 HHS REG REFORM-AWAITING APPROVAL\112-60 HHS REG REFORM PEND
41 

ting up stop signs. It is much easier to say stop than it is to say 

go. There is risk at go. The fact is the bureaucrat doing the oversight isn’t at risk when he says stop. The patient who is dying of 

cancer, who is dying of AIDS, they are at risk, and they should be 

able to sit at the table and be able to look the bureaucrat in the 

eye, like they did on AIDS. 

Ms. GLIED. Let me get back to you on what is happening on the 

FDA because I am just not very familiar with that, sir. 

Mr. BILBRAY. OK, then I will ask that we look at this and bring 

in some balance, and I think that we have to understand there isn’t 

balance now. As long as you have somebody who is coming out of 

the government structure and has no personal vested interest in 

the outcome, you are going to have it. 

Now, some people say business there would have too much financial vested interest, but I think we should both agree that patients 

have the right type of vested interest. And so they will encourage 

and, let me say, force the process to be more responsive without it 

opening itself up to being abused by the private sector. And I hope 

they will leave that as an open invitation. 

Ms. GLIED. OK. 

Mr. BILBRAY. Thank you. I yield back, Mr. Chairman. 

Mr. STEARNS. The gentleman yields back. The gentleman from 

Louisiana, Mr. Scalise, is recognized for 5 minutes. 

Mr. SCALISE. All right. Thank you, Mr. Chairman. When Mr. 

Stearns was asking you kind of a follow-up about the waiver, you 

had made a comment that when he said, you know, all of these 

1,300, almost 1,400 people have received a waiver from the component that would take effect in 2014, you had said that that shows 

that there is a lot of lousy plans out there. I am not sure if you 

are familiar. They are not asking for a waiver from their plan. 

They are asking for a waiver from Obamacare. So can you explain 

what you meant by that comment? 

Ms. GLIED. Yes, sir. 

Mr. SCALISE. It is an odd comment to make. 

Ms. GLIED. They are asking for a waiver from the requirement 

in the Affordable Care Act that says that plans may not limit the 

amount that an insurance plan will pay out to a person who is very 

ill. So right now, there are plans before the Affordable Care Act 

came out, that would say this plan covers you unless you have 

more than $5,000 in medical expenses. Now, after $5,000, hey, 

buddy, you are on your own. Which actually means hey, the rest 

of us, we get to pay your bills because you are not going to be able 

to do it. 

Mr. SCALISE. So—— 

Ms. GLIED. The Affordable Care Act—— 

Mr. SCALISE. You know, I guess what you are saying is that you 

have defined that yourself as that is a lousy plan. Is that what you 

are saying? 

Ms. GLIED. Basic economic theory—— 

Mr. SCALISE. You referred to it as a lousy plan. 

Ms. GLIED. —as well as, I think, U.S. taxpayers ought to see that 

as a lousy plan because we are going to pay your cost for you if 

you have any. 

42 

Mr. SCALISE. So if a family has that plan and they like that plan, 

you are sitting here in your ivory tower saying that is a lousy plan. 

We need to fix it. We need to go and change the rules in a way 

that your employer might drop your coverage all together. Because 

that is what these employers are saying. 

The employers aren’t saying, you know, I want to try to figure 

out how to add cost to health care in a way that they can’t afford, 

they might go bankrupt. They have decided I can either provide 

health care to my employees or not provide it. And if I can provide 

a plan that gives their family something that their family likes, 

you are sitting here saying that is a lousy plan. We are going to 

change the law in a way that now you can’t afford the plan anymore. 

The companies have told you. This isn’t me suggesting it. You 

granted them the waiver because they said they can’t afford it. 

They are going to have to dump all their employees off of that 

health care plan that you just called lousy. They liked the plan. 80 

percent of the employees like those plans, and you are calling them 

lousy saying no. But if you get a waiver, you can keep doing it. But 

if you don’t get the waiver, your employer is going to dump the 

plan because they can’t afford to do it anymore. So now you don’t 

have any insurance and you are off fending for yourself out there 

because you decided in some ivory tower that their plan that they 

liked was lousy. 

Now, you don’t understand how a lot of people have trouble with 

that concept that somebody in Washington is now going to determine that their plan that they like is no longer valid, and if they 

get a waiver, they can keep getting it. But if they don’t get a waiver from you, their employer said they can’t provide it anymore. 

They are going to have to stop providing health coverage to their 

employees all together. And now that plan that they liked is no 

longer available for them. 

Ms. GLIED. That, sir, is why we need to move to 2014 when everybody will have much better, more affordable coverage available 

to them. And the reason for the waivers is just to keep those plans, 

which we recognize are better than nothing, in existence until we 

can provide people with much better coverage that is comprehensive and that protects them against catastrophic expenses beginning in 2014. 

Mr. SCALISE. There is a big flaw with that theory, and I am glad 

you acknowledge now that maybe it is a good plan because you 

were calling it a lousy plan earlier. That employee likes the plan. 

You might think it is lousy. That is not your decision. It shouldn’t 

be your decision. I mean under Obamacare, I guess it is your decision. You can take it away from them. But the President said—I 

mean he pledged it time and time again before, during, and after 

this debate that if you like what you have, you can keep it. 

And frankly that is a tenet that ought to be established in the 

law, and it is not. Because if you like what you have, you are going 

to lose it in many cases, and there was a study done by McKenzie 

and Company. I don’t know if you had looked at it, but a very wellrespected firm who did an in-depth study, the only one I have seen 

out there that really goes into detail about employers who do provide health care. It said 30 percent of employers would drop their 

43 

coverage when all the costly requirements of Obamacare become 

law. 

Now, I don’t know if you have disputed the McKenzie study, but 

it is out there. It has a lot of factual basis behind it. They talked 

to real people. They talked to employers who provide health care, 

to employees who like the care, and so when the President says if 

you like what you have, you can keep it. According to this study, 

over 30 percent of those companies said they are not going to be 

able to keep providing it. So the employees lose the care they like. 

That breaks the President’s pledge. 

Now I would like to see what your response is to the McKenzie 

study. Maybe it was flawed in how they asked the question. Maybe 

you think it is going to be a lot rosier when all those lousy plans 

are dumped, as you categorize them. 

Ms. GLIED. Sir, we have actually seen many studies. The 

McKenzie study is only the most recent in a very long series of 

studies. Virtually all of them have not found anything like that result. They found very small changes in employer offering including 

previous surveys of employers. So the McKenzie study—— 

Mr. SCALISE. Would you dispute the findings of the McKenzie 

study? 

Ms. GLIED. Wait a second. And moreover, we have one real world 

example of what happens when you do something very much like 

the Affordable Care Act, which is what happened in Massachusetts. 

And what happened in Massachusetts is that the number of employers offering coverage increased substantially and significantly 

even as the rest of the country—— 

Mr. SCALISE. Well, we have heard all kind of problems with Massachusetts, but regardless of that—— 

Ms. GLIED. Well, certainly whatever—— 

Mr. SCALISE [continuing]. This isn’t Massachusetts. This is the 

United States, and you have 1,400 companies that your office has 

said they need a waiver. Otherwise, they are going to have to drop 

the plan. I mean if 1,400 entities, you know, unions and all kind 

of other groups that were supporting this law said we can’t provide 

the health care anymore unless we get the waiver. 

Well, what happens at 2014 when they can’t get the waiver anymore? What happens to the countless others who have asked for 

the waiver and couldn’t even get it, now 30 percent of them according to study. But even if you don’t go by this study, 1,400 according 

to your own numbers of who you gave waivers to said they couldn’t 

provide health care to their employees anymore. They were going 

to have to dump them if they didn’t get the waiver from the component of the law. 

Ms. GLIED. Beginning in 2014, everyone is going to be insured 

much better, more comprehensive, and affordable coverage. Right 

now, fewer than 2 percent—— 

Mr. SCALISE. I guess something magical happens in 2014 where 

today they are going to have to drop—they can’t even comply with 

the law. But in 2014, somehow everything is going to be rosy, and 

then they can comply with the law even though nothing has 

changed because all of these other companies have said they can’t 

comply. They are going to have to dump the health care that their 

employees liked. 

44 

Ms. GLIED. 2014 will have a new, much more competitive, patient-centered insurance marketplace in which people will be able 

to get coverage they can afford so—— 

Mr. SCALISE. Hopefully by 2014, the law is repealed, and then 

people really can keep what they like that they currently have. 

Thanks, I yield back. 

Mr. STEARNS. Gentleman yields back. I have a series of questions 

here. Dr. Glied, are you familiar with the recent rule HHS released 

on accountable care organizations? 

Ms. GLIED. Yes, sir, I am. 

Mr. STEARNS. Are you aware that a number of premier organizations, such as the Mayo Clinic, wrote the administration saying 

that more than 90 percent of its members would not participate because the rules as written are so burdensome it would be impossible to succeed? 

Ms. GLIED. Yes, sir. That is exactly why we want to have a robust public comment after we put forward a notice of proposed 

rulemaking. 

Mr. STEARNS. OK, if less than 90 percent of the groups that you 

need to participate would not do so, how did it come about that a 

rule was ever released? 

Ms. GLIED. There are many—we have received many, many comments on the notice of proposed rulemaking, and they vary considerably in what they think should and should not be in the rule. 

The administration has to chart a course between all the different 

goals that we are trying to do here, and we really want to bend the 

cost curve and change the delivery system. So we are listening to 

all the comments, and we will incorporate them in the final rule. 

Mr. STEARNS. But wouldn’t you think that the reaction was pretty dramatic here that the Mayo Clinic—I mean if you try to create 

these efficient rules and balance the competing interests, so-called, 

versus the government versus the private sector, you know, 

shouldn’t the reaction to a rule like this not be so harsh? I mean 

wouldn’t you—doesn’t that tell you something? 

Ms. GLIED. There are—this is a very important rule. This is one 

of the main goals of the administration is to bend the cost curve 

by changing the incentives that face the health care system today. 

And, of course, there are lots and lots of opinions about how it 

ought to be done. It is not at all a surprise that we have heard a 

lot of feedback. We also took a lot of public comment before we 

wrote the rule that is incorporated in it already. 

Mr. STEARNS. The complete rejection of this rule by organizations 

you would need to rely on for its simple success seems quite lopsided. I mean that is our opinion. Do you agree? 

Ms. GLIED. It will be very—it is important to wait until the final 

rule is promulgated, the program is supposed to take effect at the 

beginning of next year. And I think we should wait and see what 

happens at that point. We are really working on improving the rule 

and listening to the comment, and I can’t really speak to it any 

much more than that. 

Mr. STEARNS. I think this quote is from the Wall Street Journal. 

It called it, ‘‘these regulations have been called overly prescriptive, 

operationally burdensome, and the incentives are too difficult to 

45 

achieve to make this voluntary program attractive.’’ In light of 

these statements, shouldn’t this rule be completely reworked? 

Ms. GLIED. We are responding to the rule by looking at the comments that we have received. Remember that we have to balance 

the protection of the Medicare trust fund against our desire to 

change the incentives in the health care system. Both of those are 

competing interests, and we are working on them. 

Mr. STEARNS. So you don’t think the rule should be reworked? 

Ms. GLIED. Mr. Chairman, after an NPRM, we rework a rule before we finalize it. We listen to the comments, and we change it 

around. 

Mr. STEARNS. So it can be reworked? 

Ms. GLIED. That is the point of this process. 

Mr. STEARNS. Does the President’s executive order require you to 

do this? Do you consider that, or is this just part of your normal 

procedure? 

Ms. GLIED. It is part of our normal procedure. 

Mr. STEARNS. Yes, OK. One thing many have wondered in the 

aftermath of the rule, how did this rule come to be? For example, 

we talked earlier about you communicating with stakeholders. Evidently you didn’t communicate with stakeholders in this case. Is 

that true you didn’t communicate with stakeholders? That is why 

the reaction was so harsh? 

Ms. GLIED. No, sir, we had extensive communications with stakeholders, and this has actually been an area where there has been 

tremendous public comment. 

Mr. STEARNS. The stakeholders didn’t alert you to the problems 

back then before you issued it? 

Ms. GLIED. Different stakeholders had different opinions, sir. 

Mr. STEARNS. OK, so you are going to reach out to these same 

groups again, I guess, and does that mean that—did you reach out 

to the Mayo Clinic? 

Ms. GLIED. The rule is closed for comment on June 6. We received many, many comments on the rule. 

Mr. STEARNS. OK, so you are saying to me this morning that— 

this afternoon you will probably redo this rule? 

Ms. GLIED. We are looking at the comments, and we will revisit 

the rule and look at what we need to do to address those comments. 

Mr. STEARNS. OK, I think I will probably conclude here shortly 

much to the loyal opposition’s concern. I want to talk about the 

Data Quality Act. 

Ms. GLIED. Sure. 

Mr. STEARNS. To comply with President’s January executive 

order, doesn’t HHS have to base its regulation on the best available 

science? 

Ms. GLIED. We endeavor to do so at all times. 

Mr. STEARNS. Sure, OK, what is this best available science that 

you use? 

Ms. GLIED. That would depend, sir, on the question that is, you 

know, the question that is being addressed by the scientists. 

Mr. STEARNS. In addition to or prior to the President’s executive 

order, did HHS have to base its regulation on the best available 

science pursuant to the Data Quality Act? 

46 

Ms. GLIED. We have always tried to base our regulations on the 

best available science. 

Mr. STEARNS. I will take that as a yes. Since that is the case, 

can you represent to the committee today that all HHS regulatory 

efforts since you have assumed office have applied the Data Quality Act and are in compliance with the Data Quality Act? 

Ms. GLIED. I believe so, but let me get back to you because I am 

not familiar with the precise details of the Data Quality Act. 

Mr. STEARNS. That is a fair answer. Would you agree that if 

HHS is to base regulations or regulatory decisions on the best 

available science that HHS cannot act on the basis of conflicting 

studies? For example, if you decide on certain areas and you have 

conflicting studies, I guess the question is how are you going to 

make your regulatory decisions? 

Ms. GLIED. Chairman Stearns, if we waited for science to come 

to a definitive conclusion on everything, we would never be able to 

act. It is always going to be—there are always going to be conflicting studies. The best available evidence doesn’t mean that 

there are no conflicting studies. I means that the preponderance of 

sensible evidence leads in a particular direction. Scientists thrive 

on controversy. 

Mr. STEARNS. OK, Mr. Scalise brought up the McKenzie study, 

and I think your indication was that you weren’t discrediting it, 

but you said there is more than one study. And I think the White 

House has tried to discredit this study calling it an outlier and implying that the McKenzie study isn’t a respected, independent organization. Did you know of that criticism? 

Ms. GLIED. I think one of the concerns that we have about that 

study is that we haven’t been able to see the methods that they 

used, and they haven’t made those public. So I can’t speak to 

whether that is a good study or not because I personally have not 

seen the methods used. 

Mr. STEARNS. So you are not implying that the McKenzie Organization is not a credible organization? 

Ms. GLIED. I believe the McKenzie Organization is a credible organization. I can’t speak for this specific study. 

Mr. STEARNS. OK, and I agree with you. The Federal Government has awarded McKenzie and Company over $182 million in 

government contracts to perform consulting and analysis work. 

And as you are aware, that $182 million that is disclosed on U.S. 

spending, more than $122 million of it comes from the Obama administration, $21 million of which are contracts with HHS. So 

clearly the Obama administration thinks McKenzie is doing reliable and honest work or they wouldn’t employ them and they are 

spending money with them. 

Doesn’t McKenzie say what distinguishes this study from others 

is that McKenzie educated respondents on the President’s health 

care requirements that will take effect in 2014? What I am trying 

to establish is once McKenzie went out and explained the implications, that is how they got their study, and that distinguished 

many other studies which just do analysis without asking and educating people about the impact of the President’s health care plan? 

So I guess the answer is yes or no. So all I am saying is—— 

47 

Ms. GLIED. We don’t know how they educated them, so I don’t 

know what that—I can’t—I don’t know what I can say about that. 

Mr. STEARNS. OK, so you can’t answer it. OK, I think we have 

covered most of the questions here. We thank you for your patience 

and with nothing else, no more on the minority side, the subcommittee is—before I adjourn, I would just like to let all members 

have an opportunity to offer their opening statements, and I ask 

unanimous consent that the written opening statements of all 

members be introduced in the record. Without objection, and I ask 

unanimous consent that the slide we had be put in part of the 

record. And with that, the subcommittee is adjourned. 

[Whereupon, at 3:25 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

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