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20–087 2017

THE FISCAL YEAR 2017 HHS BUDGET 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

FEBRUARY 24, 2016 

Serial No. 114–118 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

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 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

(III) 

SUBCOMMITTEE ON HEALTH

JOSEPH R. PITTS, Pennsylvania 

Chairman 

BRETT GUTHRIE, Kentucky 

Vice Chairman 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

CATHY MCMORRIS RODGERS, Washington 

LEONARD LANCE, New Jersey 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

SUSAN W. BROOKS, Indiana 

CHRIS COLLINS, New York 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

GENE GREEN, Texas 

Ranking Member 

ELIOT L. ENGEL, New York 

LOIS CAPPS, California 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

DORIS O. MATSUI, California 

BEN RAY LUJA ́ N, New Mexico 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(V) 

C O N T E N T S 

Page 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. Kathy Castor, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 4 

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

opening statement ................................................................................................ 6 

Prepared statement .......................................................................................... 7 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 8 

WITNESSES

Sylvia Mathews Burwell, Secretary, Department of Health and Human Services ......................................................................................................................... 10 

Prepared statement .......................................................................................... 12 

Answers to submitted questions ...................................................................... 73 

(1) 

THE FISCAL YEAR 2017 HHS BUDGET 

WEDNESDAY, FEBRUARY 24, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HEALTH, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

2123 Rayburn House Office Building, Hon. Joe Pitts (chairman of 

the subcommittee) presiding. 

Members present: Representatives Pitts, Barton, Guthrie, Whitfield, Shimkus, Murphy, Burgess, Blackburn, McMorris Rodgers, 

Lance, Griffith, Bilirakis, Long, Ellmers, Bucshon, Brooks, Collins, 

Upton (ex officio), Engel, Capps, Schakowsky, Butterfield, Castor, 

Sarbanes, Matsui, Schrader, Kennedy, Cardenas, and Pallone (ex 

officio). 

Staff present: Gary Andres, Staff Director; Mike Bloomquist, 

Deputy Staff Director; Leighton Brown, Press Assistant; Rebecca 

Card, Assistant Press Secretary; Karen Christian, General Counsel; Jerry Couri, Senior Environmental Policy Advisor; Jessica 

Donlon, Counsel, Oversight and Investigations; Paul Edattel, Chief 

Counsel, Health; David McCarthy, Chief Counsel, Environment 

and the Economy; Carly McWilliams, Professional Staff, Health; 

Katie Novaria, Professional Staff, Health; Tim Pataki, Member 

Services Director; James Paluskiewicz, Professional Staff, Health; 

Graham Pittman, Legislative Clerk, Health; Mark Ratner, Policy 

Advisor to the Chairman; Michelle Rosenberg, GAO Detailee, 

Health; Chris Santini, Policy Coordinator, Oversight and Investigations; Chris Sarley, Policy Coordinator, Environment and the Economy; Adrianna Simonelli, Legislative Associate, Health; Heidi Stirrup, Policy Coordinator, Health; John Stone, Counsel, Health; 

Sophie Trainor, Policy Advisor, Health; Josh Trent, Deputy Chief 

Counsel, Health; Christine Brennan, Minority Press Secretary; Jeff 

Carroll, Minority Staff Director; Waverly Gordon, Minority Professional Staff Member; Tiffany Guarascio, Minority Deputy Staff Director and Chief Health Advisor; Una Lee, Minority Chief Oversight Counsel; Rachel Pryor, Minority Health Policy Advisor; Tim 

Robinson, Minority Chief Counsel; Samantha Satchell, Minority 

Policy Analyst; Matt Schumacher, Minority Press Assistant; Andrew Souvall, Minority Director of Communications, Outreach and 

Member Services; Kimberlee Trzeciak, Minority Health Policy Advisor; and Arielle Woronoff, Minority Health Counsel. 

2 

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

OF PENNSYLVANIA 

Mr. PITTS [presiding]. The subcommittee will come to order. 

This is a pretty busy day. A lot of members will be here today. 

I will have to run a tight gavel, so everyone can get an opportunity 

to speak today. 

The Chair will recognize himself for an opening statement. 

Today the Health Subcommittee will examine the President’s 

budget for fiscal year 2017 for the Department of Health and 

Human Services. We are grateful the Secretary has agreed to appear before this subcommittee. Certainly there are a number of 

issues in the budget and at HHS that members will be interested 

in discussing. 

I appreciate the strong bipartisan record this committee has in 

working with Secretary Burwell, especially our work to solve the 

Medicare physician payment issue last year. Our committee has 

passed more bipartisan bills into law than any other committee in 

Congress, and we appreciate Secretary Burwell’s partnership to 

help make that possible. 

However, as I reviewed the budget, I have to say I am disappointed. This budget does not balance. Ever. The CBO warned 

that under current law the deficit will balloon from $616 billion 

this year to $1.4 trillion by 2026. Medicare is on course to be insolvent and unworkable in the year 2026. Federal debt will soar from 

$14 trillion this year to about $24 trillion by 2026. 

Economists warn us that our runaway federal health spending 

will eventually lead to an economic crisis, and drastic and disruptive cuts, higher taxes that harm workers and families, or some 

combination of all of these outcomes. I believe Congress and the administration have a moral responsibility and duty to solve the 

problems before they fail the millions of people who depend on 

them. 

Unfortunately, our long-term spending challenges have been 

worsened by changes to federal programs in recent years. Specifically, ObamaCare is over $2 trillion in new entitlement spending. 

Yesterday’s Washington Post highlighted a new report from the 

HHS Office of Inspector General which examined HHS’s mismanagement of Healthcare.Gov. As the report makes clear, there 

was more that failed beyond just a Web site. 

The OIG concluded, ‘‘We found that HHS and CMS made many 

missteps throughout development and implementation that led to 

the poor launch. Most critical was the absence of clear leadership, 

which caused delays in decisionmaking, lack of clarity in project 

tasks, and the inability of CMS to recognize the magnitude of problems as the project deteriorated...CMS’s organizational structure 

and culture also hampered progress.’’ 

Today a new report out from the GAO has new findings regarding mismanagement of the federal marketplace. The auditors find 

CMS is, quote ‘‘passive’’ in their approach to fraud prevention and 

has failed to resolve major inconsistencies in applications in 2014 

and 2015. Because of re-enrollments and CMS’s poor oversight, 

these problems are largely still ongoing. 

3 

Time and time again, HHS seems to be ignoring or flouting the 

law. For example, one issue I continue to be concerned about is the 

matter of illegal actions taken by the California Health Department with respect to their unilateral action requiring all health 

plans to cover abortions. This is in direct violation of federal law 

under the Weldon amendment and a direct assault on conscience 

rights. 

As you know, individuals have been harmed since August 22nd, 

2014 and filed complaints with the HHS Office of Civil Rights. And 

I have pleaded with you, Madam Secretary, give this matter your 

immediate attention and redress. To my knowledge, no action or 

redress has been taken by your agency. So, we hope and expect to 

receive real answers today. 

Madam Secretary, thank you for being here. We look forward to 

your testimony. 

I yield the remainder of my time to Mr. Burgess. 

[The prepared statement of Mr. Pitts follows:] 

PREPARED STATEMENT OF HON. JOSEPH R. PITTS

Today, the Health Subcommittee will examine the President’s budget for fiscal 

year 2017 for the Department of Health and Human Services. We are grateful the 

Secretary has agreed to appear before this Subcommittee. Certainly there are a 

number of issues in the budget and at HHS that Members will be interested in discussing. 

I appreciate the strong bipartisan record this Committee has in working with Secretary Burwell, especially our work to solve the Medicare physician payment issue 

last year. Our committee has passed more bipartisan bills into law than any other 

committee in Congress. We appreciate Secretary Burwell’s partnership to help make 

that possible. 

However, as I reviewed the budget, I have to say I am disappointed. This budget 

does not balance. Ever. 

The CBO warns that under current law, the deficit will balloon from $616 billion 

this year, to $1.4 trillion by 2026. Medicare is on course to be insolvent and unworkable in 2026. Federal debt will soar from $14 trillion this year to about $24 trillion 

by 2026. 

Economists warn us that our runaway federal health spending will eventually 

lead to an economic crisis, drastic and disruptive cuts, higher taxes that harm workers and families—or some combination of all of these outcomes. 

I believe Congress and the Administration have a moral responsibility and duty 

to solve the problems before they fail the millions of people who depend on them. 

Unfortunately, our long-term spending challenges have been worsened by changes 

to federal programs in recent years—specifically Obamacare’s over $2 trillion in new 

entitlement spending. 

Yesterday’s Washington Post highlighted a new report from the HHS Office of Inspector General, which examined HHS’ mismanagement of HealthCare.gov. As the 

report makes clear, there was more that failed beyond just a Web site. The OIG concluded: 

′′[W]e found that HHS and CMS made many missteps throughout development 

and implementation that led to the poor launch. Most critical was the absence of 

clear leadership, which caused delays in decision-making, lack of clarity in project 

tasks, and the inability of CMS to recognize the magnitude of problems as the 

project deteriorated. CMS’s organizational structure and culture also hampered 

progress.’’ 

Today, a new report out from the GAO has new findings regarding mismanagement of the Federal Marketplace. The auditors find CMS is ‘‘passive’’ in their approach to fraud prevention, and has failed to resolve major inconsistencies in applications in 2014 and 2015. Because of re-enrollments and CMS’s poor oversight, 

these problems are largely still ongoing. 

And time and time again, HHS seems to be ignoring or flouting the law. 

For example, one issue I continue to be concerned about is the matter of illegal 

actions taken by the California Health Department with respect to their unilateral 

4 

action requiring all health plans cover abortions. This is in direct violation of federal 

law under the Weldon amendment and a direct assault on conscience rights. 

As you know, individuals have been harmed since August 22, 2014 and have filed 

complaints with the HHS Office of Civil Rights. I have pleaded with you to give this 

matter your immediate attention and redress. To my knowledge, no action or redress has been taken by your agency. We hope and expect to receive real answers 

today. 

Madam Secretary, thank you for being here and we look forward to your testimony. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Secretary, welcome and thank you for coming to our subcommittee. 

Look, the President and I are never going to agree on the Affordable Care Act, but I do remain committed to making real improvements to healthcare right now for the American people. Unfortunately, the administration has persistently refused to acknowledge 

the failures within the Affordable Care Act, making it near impossible for Congress to reduce harm to people going forward. 

The chairman already outlined the statements in the Office of Inspector General’s report that recently became public. I hope that 

the agency will share with us the lessons learned from this exercise. Clearly, there will be other administrations; there will be 

other people in charge of the agency in the future. 

The lessons learned from the failures at healthcare.gov I think 

are important. I would like for you to share with us what the total 

cost of the Web site was. The published figure of $830 million I believe is way too low. I would like for you to share with us what the 

actual cost was. Were you able to recoup any of the costs from the 

product that was not delivered and was anybody paid a performance bonus for actually supplying a flawed product to the American 

people? 

I think these are questions that ongoing will need to be answered. We need to know what lessons your agency has learned 

from this process. 

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

Mr. PITTS. The Chair thanks the gentleman. 

Now, standing in for Ranking Member Green is Representative 

Castor of Florida. The Chair recognizes her for 5 minutes for an 

opening statement. 

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

Ms. CASTOR. Well, thank you, Mr. Chairman. 

Good morning, Madam Secretary. 

You and the administration have crafted a budget that works for 

American families. It strengthens Medicare, extends the life of the 

Hospital Trust Fund, Medicare Part A, for 15 years. It makes vital 

investments in cancer research, Alzheimer’s research, and in the 

NIH, and keeps those fabulous researchers across the country on 

the job, finding the treatments and cures of the future. 

I want to thank you for answering the call for help from communities and families across the country with more robust resources 

for mental healthcare and for the heroin prescription drug opioid 

epidemic. And you have done this at the same time while the overall budget reduces deficits by $2.9 trillion over the next 10 years, 

5 

and that is on top of the $4 to $5 trillion deficit reduction that we 

have achieved together since 2010. 

I would like to encourage you during your testimony to discuss 

the progress of states that are taking care of their citizens through 

the expansion of health services under Medicaid. This is smart fiscal policy, and the majority of states have realized that. But it is 

difficult to reconcile that we have the majority of states that have 

done it and, then, some states that have not, including my home 

State of Florida, because that puts my citizens at a disadvantage. 

So, I want to thank you for offering hope to those citizens in those 

states that have yet to expand Medicaid. 

Back to mental health, this is directly related to our ability to 

serve our neighbors with mental health services because the most 

important reform we can bring to communities for mental health 

would be expansion of Medicaid in those states. 

But on your watch, for the first time ever, more than 90 percent 

of Americans have health coverage, including 1.7 million in Florida 

this year on healthcare.gov. The Medicare Advantage premium has 

declined since the ACA became law. In Florida, $1.3 trillion is 

being put back into the pockets of my neighbors through closing 

the donut hole under the ACA. And the growth in premiums for 

employee-sponsored health insurance has slowed down. 

But we have more work to do. We will look forward to hearing 

your testimony. 

At this time, I yield a minute to my good friend Mr. Kennedy of 

Massachusetts. 

Mr. KENNEDY. Thank you, Congresswoman, for yielding. 

Madam Secretary, thank you for coming. Thank you. It is wonderful to see you again. 

Under your leadership, the Department of Health and Human 

Services confronts some of our nation’s most stubborn and systemic 

challenges head-on. With the reforms to Medicaid outlined in the 

President’s budget, we can enroll millions of vulnerable Americans 

who remain uninsured and risk losing a lifetime of savings due to 

a hospital bill. 

Expanding access to Medicaid is especially critical because the 

program’s beneficiaries are twice as likely to face mental illness 

than the general population. But we can’t limit our response to 

those enrolled in Medicaid. With an increase of $115 million for the 

mental health programs under SAMHSA, investments in community early intervention programs, and an end to the 190-day lifetime limit on inpatient psychiatric facilities, we can ensure millions 

of Americans receive the treatment they need and deserve. 

In the midst of an opiate epidemic that has had a devastating 

impact on the communities represented by everyone on this dais 

today, your request for a billion dollars to increase access and 

treatment should be quickly considered and approved by Congress. 

I also want to thank you and recognize your commitment to community health centers where the budget makes a sizeable investment, and also thank you and your staff for continuing to speak 

with our governor as we work on Medicaid waiver negotiations and 

our hospital system. 

6 

I am looking forward to hearing you talk more about these 

projects in some detail and ask you to just let us know how we can 

be a partner in your work ahead. 

Thank you, and I yield back. 

Mr. PITTS. The Chair thanks the gentlelady and now recognizes 

the chairman of the committee, Mr. Upton, 5 minutes for an opening statement. 

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

Mr. UPTON. Well, thank you, Mr. Chairman. 

Secretary Burwell, welcome back to the committee. Although we 

do have policy differences, I appreciate the professionalism that 

you have brought to the job from day one. It is most appreciated. 

I know that you were in Michigan last week regarding the tragic 

Flint water crisis. I appreciated the call last Friday when you were 

leaving and I thank you for your attention and look forward to 

closely working together to ensure that we make it up to the residents of Flint for the many unacceptable failures that have occurred at all levels. And I really appreciate that. 

We have also enjoyed our partnership in 21st Century Cures. 

You and your team have been terrific during this 2-year effort, 

working closely and providing valuable insight, technical assistance, and guidance, as we developed a bill that achieved 344 votes 

in the House. The momentum is building as the Senate now has 

taken real and bipartisan steps forward through their parallel innovation project. With a little more hard work and bipartisan cooperation, we are going to be able to get this done for patients 

across the country looking for hope for safer cures. 

And we are excited with President Obama tasking Vice President 

Biden to lead a moonshot effort to cure cancer. I know that you are 

part of that leadership team. Surely, we will bring a jolt of energy 

for this very important project, the goals of which are consistent 

with the bill passed by the House last summer. It is important to 

remember that time is a very precious resource, especially for 

countless patients across the country who can’t wait for another 

task force. The clock is ticking. They need action and they need 

cures now. 

It is my belief, shared by Chairman Alexander, that the way for 

policy to be enacted through 21st Century Cures and the Senate’s 

innovation project is by working together. We have done the hard, 

time-consuming work of listening, soliciting ideas, listening some 

more. Legwork is done and, as I mentioned, 344 votes in the 

House. The policies have been pressure-tested. We look forward to 

combining our efforts and the Vice President’s best ideas into one 

unified bill to improve our healthcare innovation ecosystem. We 

have got a great opportunity that we know that we have to deliver. 

This hearing also gives us an opportunity to discuss the important work of putting our fiscal house in order. As astounding $1 

trillion now flows through HHS. We have significant concerns that 

our budgetary path is on a dangerous trajectory towards disaster. 

Under this President’s budget, the national debt will more than 

double than when the President took office. The projections cannot 

be ignored, especially as health and entitlement spending will be 

7 

the main factor in driving additional debt on top of future generations. We can and must do better. 

And I yield the balance of time to Mrs. Blackburn. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Secretary Burwell, welcome back to the committee. Although we do have our policy differences, the professionalism that you have brought to the job is appreciated. 

I know you were in Michigan last week regarding the tragic Flint water crisis. I 

thank you for your attention and look forward to closely working together to ensure 

we make it up to the residents of Flint for the many unacceptable failures that have 

occurred at all levels. 

We have also enjoyed our partnership in 21st Century Cures. You and your team 

have been terrific during this over 2-year effort, working closely and providing valuable insight and guidance as we developed a bill that achieved 344 votes in the 

House. The momentum is building as the Senate has taken real and bipartisan 

steps forward through their parallel Innovation project. With a little more hard 

work, and bipartisan cooperation, we will be able to get this done for patients across 

the country looking for hope for safer cures. 

We were excited with President Obama tasking Vice President Biden to lead a 

‘‘moonshot’’ effort to cure cancer. The leadership of the vice president will surely 

bring a jolt of energy for this important project—the goals of which are consistent 

with the bill passed by the House last summer. It is important to remember that 

time is a precious resource, especially for countless patients across the country who 

can’t wait for another task force. They need action. They need cures now. 

It is my belief, shared by Chairman Alexander, that the way for policy to be enacted is through the 21st Century Cures Act and the Senate’s Innovation project. 

We’ve done the hard, time-consuming work of listening, soliciting ideas, and listening some more. The legwork is done, and as I mentioned, with 344 votes in the 

House, the policies have been pressure tested. We look forward to combining our efforts and the vice president’s best ideas into one unified bill to improve our health 

care innovation ecosystem. We have an incredible opportunity—let’s be sure that we 

deliver. 

This hearing also gives us an opportunity to discuss the important work of putting 

our fiscal house in order. An astounding $1 trillion now flows through HHS. We 

have significant concerns that our budgetary path is on a dangerous trajectory toward disaster. Under this budget, the national debt will more than double what it 

was when President Obama took office. The projections cannot be ignored, especially 

as health and entitlement spending will be the main factor in driving additional 

debt on top of future generations. We can and must do better. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

Madam Secretary, we do thank you for being here. 

There are a couple of things that I will want to hit and hear from 

you, as you talk today. First of all, I think HHS needs to look at 

a regulatory model that is going to enable innovators. Many of 

those innovators and healthcare informatics are in Tennessee. 

What they find many times is lack of certainty and clarity. So, let’s 

discuss that. Also, transparency as we work with these innovators. 

They are looking at these new delivery systems. 

Also, I know you are working on RAC reforms. We will want to 

discuss that, the RAC audit process, and look at whether or not a 

shot clock would be helpful in that. 

I appreciate your being here to give us insight into what the 

trends are with your budget and what your expectations are for reducing the size of that budget with your outlays. 

And so, thank you for being here, and I yield back. 

Mr. PITTS. The Chair thanks the gentlelady. 

I now recognize the ranking member of the full committee, Mr. 

Pallone, 5 minutes for an opening statement. 

8 

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

Mr. PALLONE. Thank you, Mr. Chairman. 

Thank you, Secretary Burwell, for joining us this morning. 

Today we are meeting to discuss the President’s fiscal year 2017 

Health and Human Services budget proposal. As is often said, 

budgets are about priorities, and I am pleased to see that the 

President’s proposed budget aligns quite well with what should be 

the top priority of this committee. That is ensuring access to highquality, affordable healthcare for all Americans. 

First and foremost, the budget recognizes the simple truth the 

Affordable Care Act is achieving its goals. As a result of the ACA, 

18 million Americans have gained access to both high-quality 

health insurance and the peace of mind that comes with maintaining coverage. Of course, more could be done, which is why I am 

pleased the President proposed additional incentives for the remaining states that have yet to expand Medicaid. 

Medicaid expansion has been life-changing for the millions of 

Americans that have been able to access health coverage through 

Medicaid, many for the first time in their lives. In the 19 states 

that have yet to expand Medicaid, more than 4 million people could 

gain coverage. States could realize major savings in other parts of 

their budgets, and over $4 billion in uncompensated care costs 

could be avoided. Democrats have already introduced legislation to 

put the President’s proposal into action, and Congress should act 

swiftly to enact that bill into law. 

Beyond building upon known successes, the budget also directs 

funding into known areas of need. To put it simply, our nation’s 

biomedical research budget is simply inadequate. As a committee, 

we have already recognized and acted upon this fact when we 

passed the bipartisan 21st Century Cures Act. In that same spirit, 

I applaud the proposed $755 million allocated for NIH and FDA 

through the Vice President’s National Cancer Moonshot Initiative. 

Over 1.6 million Americans will be diagnosed with cancer this year, 

and it is our responsibility to ensure that all Americans have the 

best shot at a cure. 

Finally, the President’s budget recognizes the devastating effects 

of the heroin and opioid abuse crisis. Sadly, my home State of New 

Jersey is not immune from this epidemic. In fact, if every one of 

our New Jersey residents addicted to heroin or prescription opioids 

lived in the same city, it would hold a population larger than that 

of New Jersey’s largest city. 

That is why I have introduced a comprehensive bill, H.R. 4396, 

The Heroin and Prescription Drug Abuse Prevention and Reduction 

Act, to address heroin and prescription drug abuse. I would like to 

thank you for your strong leadership on this issue, Madam Secretary, and I urge the committee to act quickly to put a halt to this 

public health emergency. 

Finally, just as a side note, Secretary Burwell, I know I will not 

have enough time to discuss this issue today, but I would like to 

have a followup conversation with you about the Indian Health 

Service. Specifically, I would like to address concerns that have 

been raised about the quality of care provided by hospitals in the 

9 

Great Plains area as well as to get an update on the continued implementation of the Indian Health Care Improvement Act, which, 

of course, was included in the ACA. 

But I have 2 minutes left. I would like split that between Representative Matsui and Representative DeGette, and yield one 

minute now to Representative Matsui. 

Ms. MATSUI. Thank you so much. 

Secretary Burwell, welcome. 

This budget definitely is something that makes critical investments in the long-term health and well-being of America’s families, 

from supporting the expansion of Medicaid of millions of low-income Americans, investing in medical research, to bolstering the 

behavioral health workforce, so that patients with mental illnesses 

have someplace to turn. I am especially pleased with the incentives 

you put in for community behavioral health centers. 

The Affordable Care Act has improved millions of Americans’ 

lives. Thanks to the ACA, nearly 18 million previously uninsured 

Americans no longer have to worry that they are one illness away 

from financial ruin. 

I am very pleased that this HHS’s budget makes critical investments to ensure the continued success of the Affordable Care Act, 

and this budget is intertwined in the fabric of our healthcare system. It is time that we move forward with implementing all aspects 

of it. 

Thank you very much, and I yield to my colleague. 

Mr. PALLONE. Ms. DeGette. 

Ms. DEGETTE. Thank you very much for yielding, Mr. Pallone. 

I just want to underscore something that both Chairman Upton 

and you talked about, and that is the importance of the 21st Century Cures Act, which passed this committee unanimously. To 

make the investments that we talk about in that bill effective, we 

need to provide leaders at the NIH the ability to make decisions 

with some kind of freedom from the back-and-forth budgeting and 

appropriations process. After all, it is that process that, coupled 

with damaging cuts from the sequestration, set our medical efforts 

back a long way. 

And that is why mandatory funding is created and the 21st Century Cures Act Innovation Fund is so important. For too long, 

budgetary pressures have kept promising research projects from 

being carried out. With the stability of the Innovation Fund, researchers could submit proposals that would not otherwise be guaranteed the funding needed to complete the science. That was the 

approach that the House overwhelmingly supported and that is the 

approach that we are trying to work on in the other body. 

So, as much as you can do, Madam Secretary, that really helps 

us out in our efforts. Thank you very much. 

And I thank you, Mr. Chairman, for the comity in allowing me 

to sit in on this subcommittee. 

Mr. PITTS. The Chair thanks the gentlelady. 

That concludes the opening statements. As usual, all members’ 

written opening statements will be made a part of the record. 

We will now go to our panel. I am happy to welcome the Honorable Sylvia Mathews Burwell, Secretary of the Department of 

Health and Human Services, as our witness today. 

10 

Thank you for coming. We have your testimony. The written testimony will be made part of the record. But you will be given 5 

minutes to summarize. 

So, at this point, the Chair recognizes Secretary Burwell, 5 minutes for her summary. 

STATEMENT OF HONORABLE SYLVIA MATHEWS BURWELL, 

SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES 

Secretary BURWELL. Thank you. Chairman Pitts, Chairman 

Upton, Ranking Member Pallone, and Representative Castor, Members of the Committee, I want to thank you all for the opportunity 

to come and discuss the President’s budget here today. 

As many of you all know, I believe that all of us actually share 

common interests and that we can find common ground. In the last 

legislative session, as was mentioned, this committee embraced 

that spirit of bipartisan leadership when it took the historic steps 

to pass the Medicare Access and CHIP Reauthorization Act of 

2015. And thank you very much for this leadership on this issue. 

The budget before you today is my final budget and the final 

budget of this administration. It makes critical investments to protect the health and well-being of the American people. It helps ensure that we can do our job to keep people safe and healthy, accelerate our progress in scientific research and medical innovation, 

and expands and strengthens our healthcare system. And it helps 

us continue to be responsible stewards of the taxpayers’ dollars. For HHS, the budget proposed is $82.8 billion in discretionary 

budget authority, and our request recognizes the constraints in our 

budget environment and includes targeted reforms to Medicare, 

Medicaid, and other programs. Over the next 10 years, these reforms to Medicare would result in net savings of $419 billion in 

Medicare. 

This budget invests in the safety and health of all Americans. 

Let me start with an issue we have been working on here at home 

and abroad. As we work to stop the spread of Zika, the administration is requesting $1.9 billion in emergency funding, including $1.5 

billion for HHS to enhance our ongoing efforts, both domestically 

and internationally. We appreciate the Congress’ consideration of 

this important request as we implement the essential strategies to 

prevent, detect, and respond to this virus. 

I know the rise in opioid misuse and abuse and overdose has affected many of those in your districts. Every day in America 78 

people die opioid-related deaths. And that is why this budget proposes significant funding, over $1 billion, to combat the opioid epidemic. 

Today too many of our nation’s children and adults with 

diagnosable mental health disorders don’t receive the treatment 

that they need. So, this budget proposes $780 million in new mandatory and discretionary resources over the next two years. This request will ensure that the behavioral healthcare system works for 

everyone. It will help expand behavioral health services and workforce capacity, so that more people can have access to care. And it 

will help individuals with serious mental illness get engaged and 

get the care that they need. 

11 

While we invest in the safety and health of Americans today, we 

must also relentlessly push forward the frontiers of science and 

medicine, and I know this committee is deeply involved and engaged in that issue. 

This budget invests in the Vice President’s Cancer Initiative. It 

is a vital investment for our future. Each 1 percent drop in cancer 

death rates saves our economy approximately $500 billion, not to 

mention the comfort and security it can bring to so many families. 

Today we are entering a new era of medical science with the proposed increases of $107 million in the Precision Medicine Initiative 

and the $45 million additional for the administration’s BRAIN Initiative. 

But, for Americans to benefit from these breakthroughs in medical science, we need to ensure that Americans have access to affordable, quality care. The Affordable Care Act has helped us make 

historic progress, and today more than 90 percent of Americans 

have health coverage, the first time in our nation’s history. 

This budget seeks to build on that progress by improving the 

quality of care that patients receive, spending our dollars more 

wisely and putting an engaged and empowered consumer at the 

center of care. By advancing and improving the way we pay doctors, coordinate care, and use health data and information, we are 

building a better, smarter, and healthier healthcare system. 

Finally, I just want to thank the employees of HHS. In the past 

year, they helped us with the Ebola outbreak in West Africa. They 

have advanced the frontiers of medical science. They have helped 

millions of Americans enroll in health coverage, and they have 

done the quiet day-to-day work that makes our country stronger. 

I am honored to be a part of the team. As members of this committee I hope know, I am personally committed to working closely 

with you and your staff to find common ground, so we can deliver 

for the American people. 

With that, I look forward to your questions. Thank you. 

[The prepared statement of Secretary Burwell follows:] 

12 


20087.001

Statement by 

Sylvia M. Burwell 

Secretary 

U.S. Department of Health and Human Services 

on 

The President's Fiscal Year 2017 Budget 

before 

Committee on Energy and Commerce Health Subcommittee 

U.S. House of Representatives 

February 24,2016 

Chairman Upton, Ranking Member Pallone, Chairman Pitts, Ranking Member Green, and 

Members of the Committee, thank you for the opportunity to discuss the President's FY 2017 

Budget for the Department of Health and Human Services (HHS). Last legislative session, this 

Committee took historic steps to pass the bipartisan Medicare Access and CHIP Reauthorization 

Act of2015. We thank you for your leadership on that important issue and look forward to 

working with you on implementation in the year ahead. 

The Department has made historic strides towards ensuring that all Americans have access to the 

building blocks of healthy and productive lives-a priority that I know we share. Thanks to the 

Affordable Care Act, we have helped millions of Americans find quality, affordable insurance, 

and slowed the growth in health care costs for families and taxpayers. At the same time, we have 

worked to improve the quality of coverage-with more protections and benefits, like well ness 

visits and some cancer screenings now offered at no extra cost-no matter where you get your 

insurance. Alongside this work, we have responded to a number of national and global health 

challenges. In coordination with our partners across the federal government, we led a response 

to the Ebola outbreak in West Africa and prepared our infrastructure here at home, and have 

helped to unite global health leaders to prevent and respond to future outbreaks. We continue 
13 


20087.002

these efforts to protect the public health in our work responding to the lead crisis in Flint, 

Michigan and implementing essential strategies to prevent, detect, and respond to the spread of 

Zika. We convened state leaders in our fight against prescription drug abuse as part of a 

nationwide three-pronged strategy to drive progress. And we advanced the frontier of medicine 

through cutting-edge research in genomics and technology. Through all these efforts, we have 

worked to ensure the responsible stewardship of taxpayer dollars by taking steps to further 

strengthen program integrity, saving money for the taxpayer and making sure our programs 

deliver in the best possible way for those we serve. 

The President's FY 2017 Budget for HIIS builds on this progress through critical investments in 

health care, science and innovation, and human services. The Budget proposes $82.8 billion in 

discretionary budget authority, and additional mandatory funding to further support specific 

initiatives in the discretionary budget. This includes investments in critical priorities that I know 

we share-cancer research, opioids abuse prevention and treatment, and behavioral health 

efforts. The Budget recognizes our continued commitment to balancing priorities within a 

constrained budget environment through legislative proposals that, taken together, would save on 

net an estimated $242 billion over 10 years. 

Building upon the Successes of the Affordable Care Act 

The FY 2017 Budget advances access, affordability, and quality in our nation's health care 

system-goals that we share with Congress and this Committee. Through targeted investments, 

the Budget expands access to care, particularly for rural and underserved populations, 

2 
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20087.003

strengthens services for American Indians and Alaska Natives, and supports primary and 

preventive care. 

Expanding Access to Health Insurance Coverage. The Affordable Care Act is expanding 

access to care for millions of Americans who would otherwise be uninsured, improving quality 

of care for people no matter how they get their insurance, while slowing the growth in healthcare 

costs nationwide. To encourage more states to expand Medicaid, the Budget would give any 

state that chooses to expand Medicaid eligibility three years of full federal support, no matter 

when the state expands. The Budget also funds the Children's Health Insurance Program 

through FY 2019 to ensure comprehensive and affordable coverage for beneficiaries as well as 

budget stability for states. We look forward to working with Congress to extend this program for 

the millions of children who depend upon it. 

Investing in Health Centers. For 50 years, health centers have delivered comprehensive, highquality, cost-effective primary health care to patients regardless oftheir ability to pay. Today, 

more than I ,300 health centers operate over 9,000 sites and provide health care services to I in 

14 people in the United States, including to nearly 1.2 million patients at 448 service delivery 

sites in Texas and 600,000 patients at 248 service delivery sites in Michigan. Health centers also 

play a role in reducing the use of costlier care through emergency departments and hospitals. 

The Budget invests $5.1 billion in health centers, including $3.75 billion in mandatory resources, 

to serve over 27 million patients across the country in FY 2017. 

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20087.004

Bolstering tlte Nation's Health Care Workforce. The Budget includes investments of nearly 

$14 billion over ten years in our Nation's health care workforce to improve access to healthcare 

services, particularly in rural and other underserved communities. This includes support for over 

I 0,150 National Health Service Corps clinicians serving the primary care, mental health and 

dental needs of more than 10.7 million patients in areas with limited access to care. The request 

includes additional funding to place providers in rural areas and other underserved communities 

in order to expand access to treatment for prescription opioid and heroin abuse and to improve 

access to crucial mental and behavioral health services. We know this is a priority for many of 

you on this Committee. 

Strengthening Health Outcomes in Indian Country. The FY 2017 Budget continues the 

Administration's commitment to support and strengthen services in Indian Country. The Budget 

funds the Indian Health Service (IHS) at $6.6 billion, an increase of$402 million over FY 2016, 

to bolster programs that serve over 2 million American Indians and Alaska Natives at over 650 

health care facilities across the United States. The Budget includes $67 million in new 

investments in the critical area of behavioral health to address high rates of mental illness, 

substance abuse, and suicide in tribal communities. The Budget also fully funds contract support 

costs, which provides critical overhead funding to tribes who operate facilities under selfdetermination and self-governance agreements. 

Strengthening Health Programs in the Territories. The Budget removes the cap on funding to 

Medicaid programs in the U.S. territories to better align territory Medicaid programs with those 

of States and expands eligibility to I 00 percent of the Federal poverty level in territories 

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20087.005

currently below this level. This proposal would gradually increase the share of Medicaid costs 

covered by the federal government as territories modernize their Medicaid programs-providing 

critical health care funding to Puerto Rico and helping to mitigate the effects of its fiscal crisis. 

Healthcare Delivery System Reform 

At HHS, we arc focused on moving towards a health care system that delivers better quality of 

care, spends dollars in a smarter way, and keeps people healthy. The Budget advances the 

Department's work in three critical areas: improving the way providers arc paid, finding better 

ways to deliver care, and creating better access to health care information for providers and 

patients. 

Improving the Way Providers Are Paid. Rather than paying for the quantity of tests and 

screenings that providers order-a common practice-the Department is moving toward paying 

for the quality of care given. For patients, this can lead to more frequent communication with 

their care provider and fewer unnecessary trips back to the hospital. The Budget includes 

proposals to establish competitive bidding for Medicare Advantage payments and introduce 

value-based purchasing for certain Medicare providers. The Budget also encourages 

participation in alternative payment models through a number of proposals, including creating a 

bonus payment for hospitals that collaborate with certain alternative payment models. The 

Department has already committed to moving Medicare fee-for-service payments to 30% in 

alternative payment models by the end of 2016, and 50% by 2018. We believe that we arc on 

track to meet our goal, and look forward to working with Congress to build on this progress. 

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20087.006

Improving Care Delivery. To drive progress in the way care is provided, HHS is focused on 

improving the coordination and integration of health care, engaging patients more fully in 

decision-making, and improving the health of patients-with an emphasis on prevention and 

wellness. As part of that, we are focused on improving access to care by investing in and 

supporting tclehealth, especially for rural areas. The Budget proposes to expand the ability of 

Medicare Advantage plans to deliver services via telehcalth, and to enable rural health clinics 

and federally qualified health centers to qualify as originating tclehealth sites under Medicare. 

Improving Access to Information. In an effort to promote transparency on price, cost, and 

billing for consumers, the Budget supports the standardization of billing documents and 

elimination of surprise out-of-network charges for privately insured patients receiving care at an 

in-network facility. The Budget also provides continued investments to achieve secure, seamless 

data interoperability in order to better serve individuals, providers, and payers, including a 

funding increase and new authorities for the Office of the National Coordinator for Health 

Information Technology. 

Building Evidence to Drive Systemic Improvement. Reforming the delivery system requires an 

evidence base of effective practices. The Budget proposes an increase of$24 million for health 

services research at the Agency for Health care Research and Quality (AHRQ) to advance and 

improve the performance of the healthcare system. For example, AI-IRQ data show that 87,000 

fewer patients died in hospitals due to patient harms from 20 I 0 to 20 14-saving nearly 

$20 billion. While we are encouraged by this progress, substantial challenges remain to build a 

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20087.007

health system that meaningfully involves patients in decision making, and consistently uses high 

quality evidence to provide safe and high quality care for all. 

Reducing the Cost of Prescription Drugs in Medicaid and Medicare. Nationally, prescription 

drug spending growth has accelerated to its highest rate since 2002 and is projected to drive 

overall healthcare cost growth. New therapies and cures change lives, but too many Americans 

struggle to afford the medications they need. The Department is focused on improving patient 

access to affordable prescription drugs, developing innovative purchasing strategies, and 

incorporating delivery system reform concepts like value- and outcome-based models into drug 

purchasing arrangements. The Budget includes a number of proposals, including Medicare Part 

D negotiation, aimed at improving access to necessary treatments and increasing the value that 

Americans are getting from their medications, while continuing to encourage important and 

lifesaving innovations. 

Improving Healthcarefor Dual Eligible Beneficiaries. As members of this Committee are 

aware, people enrolled in both Medicaid and Medicare have complex and often costly health care 

needs. The Budget includes legislative proposals to improve access for dual-eligible 

benetlciaries, while decreasing overlap and ineftlciencies that currently exist between the two 

payers. 

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20087.008

Keeping People Healthy and Safe 

The President's Budget builds on the Department's strategy to address prescription drug abuse, 

invests in crucial behavioral health services, and strengthens our nation's public health 

infrastructure. 

Preventing Prescription Drug Abuse. Prescription drug abuse impacts the lives of millions of 

people across the country-with 78 Americans dying in opioid-related deaths every single day. 

The Budget proposes significant new discretionary and mandatory funding totaling nearly 

$1.1 billion to build on investments funded by Congress in FY 2016 and to execute on the 

Department's three-pronged evidence-based approach to combat the opioids crisis: 

• Expanding the Use of Medication-Assisted Treatment. The new two-year, $1 billion 

mandatory funding investment will help ensure that every American who wants to get 

treatment for an opioid addiction will be able to. These funding levels will enable 

individuals with opioid use disorder to get treatment in FY 2017 and FY 2018 by 

reducing costs, engaging patients, and expanding access to treatment. 

• Improving Prescribing Practices. The Budget invests in programs that support improved 

prescribing practices, including by supporting improved uptake of CDC's upcoming 

prescribing guidelines for providers. The Budget also proposes to require states to track 

high prescribers and utilizers of prescription drugs in Medicaid-saving $770 million 

over 10 years-and bolsters other critical efforts to support providers with the tools they 

need. 

• Expanding the Development and Use of Naloxone. To best prepare communities and 

first responders, the Budget includes a total of $22 million for programs that support the 

8 
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20087.009

use of naloxone- a life-saving drug. Among other critical programs, the Budget invests 

in the Rural Opioid Overdose Reversal Grant program to target rural areas hit hardest by 

opioid abuse. 

Expanding Access to Mental and Other Behavioral Health Care. Despite the expanded 

behavioral health coverage for millions of Americans by the Affordable Care Act, less than half 

of children and adults with diagnosable mental health disorders receive the treatment they need. 

To address this gap. the Budget proposes a total of $999 million, including a new two-year 

$500 million investment in mental health care, to help engage individuals with serious mental 

illness in care, improve access to care by increasing service capacity through certified 

community behavioral health clinics, boost the behavioral health workforce, and ensure that 

behavioral health care systems work for everyone. A portion of the two-year, $500 million 

mandatory initiative will allow six additional states to participate in the Certified Community 

Behavioral Health Clinic Demonstration-established by section 223 of the Protecting Access to 

Medicare Act of2014 under this Committee's leadership. 

Combating Antibiotics Resistant Bacteria. The emergence of antibiotic-resistant bacteria 

continues to be a significant public health concern. The FY 2017 Budget includes $877 million 

to continue expanding the nation's ability to protect patients and communities by implementing 

interventions that reduce the emergence and spread of antibiotic-resistant pathogens. This 

1\.mding will also support ongoing ground-breaking research to aid the development of new drugs 

and diagnostic products, building the nation's treatment options for these dangerous pathogens. 

9 
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20087.010

Investing in Domestic and International Preparedness. The Department leads critical efforts to 

strengthen our public health infrastructure here at home and bolster the nation's preparedness 

against chemical, biological, nuclear and radiological attacks. The Budget invests $915 million, 

an increase of $2 million, for domestic and international public health infrastructure, including 

funding to expand implementation of the Global Health Security Agenda (GHSA) to strengthen 

capacity in Phase 2 countries to address public health emergencies. Over the next five years, the 

United States will work with more than 30 partner countries-representing over four billion 

people-to help them prevent, detect, and effectively respond to infectious disease threats. I am 

pleased to share that work with many of these countries has already begun. We appreciate the 

funding provided by Congress last year for this crucial priority. 

As we work aggressively to combat the spread of Zika, the Administration is requesting more 

than $1.8 billion in emergency funding, including $1.48 billion for HHS, to enhance our ongoing 

efforts both domestically and internationally. The requested resources will build on our ongoing 

preparedness efforts and will support essential strategies to combat this virus, such as rapidly 

expanding mosquito control programs; accelerating vaccine research and diagnostic 

development; enabling the testing and procurement of vaccines and diagnostics; educating health 

care providers, pregnant women and their partners; improving epidemiology and expanding 

laboratory and diagnostic testing capacity; improving health services and supports for lowincome pregnant women, and enhancing the ability of Zika-affected countries to better combat 

mosquitoes and control transmission. We appreciate the Congress's consideration of this 

important request. 

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20087.011

Serving Refugees and Unaccompanied Children. In light of a global displacement crisis, the 

Administration has committed to expanding the Refugee Admissions Program in FY 2016 and 

FY 2017. All refugees are subject to the highest level of security checks of any category of 

traveler to the United States. At HHS, the Administration for Children and Families' role is to 

link newly-arrived humanitarian populations, including refugees, asylees, Cuban entrants, and 

special immigrant visa-holders, to key resources necessary to becoming self-sufficient, integrated 

members of American society. The Budget provides initial financial and medical assistance for 

an estimated 213,000 entrants, including, 100,000 refugees, consistent with the Administration's 

commitment to admitting at least I 00,000 refugees in FY 2017. 

In addition to serving the populations discussed above, HHS is also legally required to provide 

care and custody to all unaccompanied children apprehended by immigration authorities until 

they are released to appropriate sponsors to care for them while their immigration cases are 

processed. Based upon the increase in unaccompanied children apprehended at the Southwest 

border this fall, ACF has taken prudent steps to add temporary capacity so that we are adequately 

prepared. To ensure that HHS can provide appropriate care for unaccompanied children in FY 

2017, the Budget includes the same amount oftotal base resources available in FY 2016, as well 

as a contingency fund that would trigger additional resources only if the caseload exceeds levels 

that could be supported with available funding. 

Leading the World in Science and Innovation 

The FY 2017 Budget builds on the historic gains the Department has made in medical and 

scientific research and lays the ground work for scientific and technological breakthroughs for 

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20087.012

the 21'' century. Thanks to biomedical research, including NIH investments, cardiovascular 

death rates in the United States have fallen by more than 70% in the last 60 years. Cancer death 

rates arc now falling 1-2% per year; each I% drop saves approximately $500 billion. 

Breakthroughs in HIV therapies enable people in their 20's to live a full life span. The FY 2017 

Budget includes $33.1 billion for the NIH, an increase of $825 million, to build on the funding 

provided by this Congress in order to advance our shared commitment to support research that 

promotes economic growth and job creation, and advances public health. 

Launching the Cancer Moonshot. Investments in research have led to significant developments 

in the prevention, screening, and treatment of cancer. To support the Vice President's Cancer 

Moonshot, the Budget includes a multi-year $755 million initiative that accelerates the nation's 

fight against cancer by expanding access to clinical trials, pursuing new vaccine technology, and 

funding exceptional opportunities in cancer research. These investments will drive scientific 

advances that aim to understand the causes of cancer, discover new prevention strategies, 

improve early detection and diagnosis, and develop effective treatments. 

Advancing Precision Medicine. Recent breakthroughs in genomics, computing, and molecular 

medicine have ushered in a new era where more treatments are based on the genetic 

characteristics of each patient. The Budget increases funding for the Precision Medicine 

Initiative by$ I 07 million to a total of $309 million to support critical new studies on therapies, 

and to continue to scale a cohort study to gather data on the interplay of environmental 

exposures, physical parameters, and genetic information. 

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20087.013

Investing in the BRAIN Initiative. Despite the advances in neuroscience in recent years, the 

underlying causes of most neurological and psychiatric conditions remain largely unknown due 

to the vast complexity of the human brain. To further revolutionize our understanding, the 

Budget provides an increase of $45 million, for a total of $195 million within NIH, for the 

BRAIN Initiative. This research has the potential to discover underlying pathologies in a vast 

array of brain disorders and provide new avenues to treat, cure, and even prevent common 

conditions, such as Alzheimer's disease, autism, depression, schizophrenia, and addiction. 

Building Blocks for Success at Every Stage of Life 

The Budget request supports the Department's efforts to serve Americans at every stage of life, 

including by promoting the safety and well-being of our nation's children, and helping older 

Americans live as independently as possible. 

Investing in Child Care and Early Learning. Research has shown the significant positive 

impact that early learning programs can have on a child's development and lifelong well-being. 

The Budget proposes strategic investments to make affordable, quality child care available to 

every low- and moderate-income family with young children; to build on investments to expand 

access to high quality early learning programs including both Head Start and the newly 

authorized Preschool Development Grant program; and to invest in voluntary, evidence-based 

home visiting programs that have long-lasting, positive impacts on child development. 

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20087.014

Supporting Child Welfare. The Department plays a critical role in supporting child welfare, 

particularly among vulnerable populations. The Budget includes $1.8 billion over I 0 years to 

ensure that child welfare professionals have the right training and skills-proven to be linked to 

better outcomes for children across a range of measures. The Budget also includes a package of 

investments designed to do more to prevent the need for foster care and assist children and 

families so that children can either be reunited with their biological parents or placed in a 

permanent home. 

Modernizing the Approach for Addressing Poverty. Finally, the Budget seeks to strengthen the 

nation's safety net to meet our 21st century poverty challenges. A total of 15.5 million children 

lived in poverty in 2014, a staggering number that translates into lost opportunity, productivity, 

quality of life, and lifespan. Twenty years after creating the Temporary Assistance for Needy 

Families (TANF) program, funds are proposed to reform and strengthen this critical program that 

serves approximately 3 million children per month. The Budget increases funding forT ANF to 

help offset some of the erosion to the block grant, while laying out the basic principles for 

reform-including moving towards a stronger accountability framework for states coupled with 

increased flexibility, ensuring better targeting of TANF funds, and creating a renewed focus on 

reducing child poverty. We look forward to working with lawmakers to strengthen the 

program's effectiveness in accomplishing its goals. 

Supporting Older Adults. As members of this Committee are aware, the population age 65 and 

over is projected to more than double to 98 million in 2060. In FY 2017, HHS continues to 

make investments to address the needs of older Americans, many of whom require some level of 

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20087.015

assistance to live independently and remain in their homes and communities for as long as 

possible. The Budget continues to propose reforms that help to protect older Americans from 

identity theft, to support access to counseling, respite, and nutrition services that will allow states 

to provide approximately 205 million meals to over 2 million older Americans nationwide. The 

Budget also continues the Department's commitment to support effective Alzheimer's disease 

research, education, and outreach, as well as patient, family, and caregiver services. 

Making the Department Stronger 

One of my top priorities as Secretary is to position the Department to most effectively fulfill its 

core mission by investing in key management priorities, including program integrity and 

cybersecurity. I appreciate the Committee's interest in these critical issues. 

Strengthening Program Integrity. The Budget continues to make cutting fraud, waste, and 

abuse a top Administration priority by requesting $199 million in new program integrity 

investments in FY 17. The Budget fully funds the llealth Care Fraud and Abuse Control 

(HCFAC) discretionary cap adjustment. In FY 14 alone the HCFAC program returned over 

$3.3 billion to the Federal government and private citizens. The Budget includes proposals that 

will expand and strengthen the tools available to CMS and states to combat fraud, waste, and 

abuse, including in state Medicaid programs. In total, proposed program integrity investments 

and authorities in the Budget will yield an estimated $25.7 billion in scorable and non-scorable 

savings to Medicare and Medicaid over ten years. 

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20087.016

Focusing on Stewardship. To improve the efficiency of the Medicare appeals system and 

reduce the backlog of appeals awaiting adjudication at the Office of Medicare Hearings and 

Appeals (OMHA), HI-IS has developed a comprehensive strategy that involves additional 

funding, administrative actions, and legislative proposals. The Budget includes resources at all 

levels of appeal to increase adjudication capacity and advances new strategies to alleviate the 

current backlog. The Budget also includes a package of legislative proposals that provide new 

authority and additional funding to address the backlog. 

Conclusion 

Members of the Committee, thank you for the opportunity to testify today and for your continued 

leadership on these important issues. I am grateful to have you as partners as we make the 

investments critical for today while laying a stronger foundation for tomorrow. I want to 

conclude by thanking the men and women of our Department, who work tirelessly every day to 

deliver impact for those we serve-the American people. I welcome your questions. 

16 
28 

Mr. PITTS. Thank you, Madam Secretary. 

I will begin the questioning and recognize myself for 5 minutes 

for that purpose. 

Secretary Burwell, on February 12th, the administration announced that they would be using billions of taxpayer dollars to 

make payments to insurance companies under the ObamaCare Reinsurance Program. There is a quote on the screen there from the 

ACA. It says, ‘‘Notwithstanding the preceding sentence, $2 billion 

for 2014, $2 billion for 2015, $1 billion for 2016 shall be deposited 

into the General Fund of the Treasury of the United States and 

may not be used for the Reinsurance Program.’’ 

So, the announcement that the administration made represents 

an illegal wealth transfer from hard-working taxpayers to insurance, and this law is very clear, $5 billion of reinsurance fees must 

be returned to the taxpayers. As you can see, Section 1341 of the 

ACA states that this $5 billion ‘‘shall be deposited’’ into the Treasury. And if that wasn’t clear enough, the law further states on 

down that these billions of taxpayer dollars ‘‘may not be used for 

the Reinsurance Program.’’ It seems clear. Yet, CMS to date has diverted $3.5 billion from the Treasury to health insurance companies, effectively bailing out insurance companies with taxpayer dollars. 

So, my question to you, Madam Secretary, is this: has any HHS 

official or any other administration official looked at the legality of 

these payments? Is there any legal memorandum or other analysis 

regarding the legality of these payments to insurers, and will you 

produce any such memorandum for the committee, if so? 

Secretary BURWELL. So, the Reinsurance Program is part of 

three different programs that are about making sure that we have 

downward pressure on costs for individuals in the health insurance 

system. That is downward pressure on premiums. 

This particular program is a limited program for 3 years, and 

that is all. Of the three programs, one extends, which is the Risk 

Adjustment Program. This one, the Reinsurance Program, does not. 

The Reinsurance Program, as I said, was put in place so that two 

things would happen for people entering the new market. In a new 

marketplace where they didn’t know, you didn’t want people not 

coming in and offering competition for downward price pressure because they feared that they would get people who are expensive. 

And then, in addition to that, it puts downward pressure, so that 

when you do get people that are expensive, you know in these first 

years, as you are understanding your book of business and doing 

your analysis to be able price correctly, that you have that opportunity. 

So, in making any decisions about these issues, we believe we do 

have the statutory authority with regard to this issue. In making 

the decisions—and this gets to a point that I think Ms. Blackburn 

raised in her opening comments—the issues of making sure we are 

clear about lessons learned. One of the most important lessons, 

customer at the center. The consumer or the citizen is what we 

have tried to put at the center, whether that is in the decisions of 

how we have done the technology or how we make decisions about 

ensuring that those dollars actually went to the place where they 

29 

would most help the consumer with regard to downward price pressure. 

It is our belief we have that authority. If it would be helpful, we 

can have staff come and brief in terms of why we believe we have 

those authorities. 

Mr. PITTS. Do you have a legal memorandum to that effect? 

Secretary BURWELL. With regard to the question of a legal 

memorandum, this is an issue, actually, we put out our guidance 

for public comment. We put out the guidance that articulated that 

we would do this. 

Mr. PITTS. OK. 

Secretary BURWELL. When we put out that guidance, we actually 

opened up for public comment specifically. 

Mr. PITTS. All right. 

Secretary BURWELL. And we can go through what public comments that we received with regard to that. 

Mr. PITTS. We have a legal memorandum. I will ask staff to deliver it. Before you should be a memo from the Congressional Research Service on this very issue. On page 8, highlighted, before 

you, the memo states that your action to divert funds from the 

Treasury ‘‘in conclusion, would appear to conflict with the plain 

reading of the law.’’ 

So, my question is, CRS has concluded that your action to divert 

billions to insurance companies appears to be unlawful. Did your 

Department receive any pressure from insurance companies to divert billions from taxpayers to pay off insurers? Did former CMS 

Administrator Marilyn Tavenner, now representing the insurance 

industry at AHIP, or other insurance company executives or officials ever pressure you or other Department officials on the reinsurance issue? 

Secretary BURWELL. Mr. Pitts, I would be happy to take a look. 

I have not seen this document that was just handed to me. We will 

be happy to take a look—— 

Mr. PITTS. Page 8. 

Secretary BURWELL [continuing]. At that document and get back. 

We do believe we have the authorities. As I said, I think I have 

given you the context and the approach we take to making these 

decisions. Since I have come to HHS, it is one of the key things. 

One of the key things that I started out with, with the whole team, 

is consumer at the center. As we make decisions, what we try to 

do is make those decisions by putting that customer and their 

needs, whether that is, as I said, in Web site decisions, in trying 

to make it easier to use, or with regard to matters like this in 

terms of where those funds go, so that we create that downward 

pressure as much as possible within statute to put downward pressure on premiums, instead of upward pressure on premiums. 

Mr. PITTS. The Chair thanks the gentlelady. 

Ms. CASTOR. Mr. Chairman, before you finish, can you identify 

the source of that slide? Because, as we know, in other congressional hearings in the past there has been a little funny business 

on where those slides come from. 

Mr. PITTS. That is a direct quote from the Affordable Care Act, 

from the statute. That is from the statute. 

30 

My time has expired. The Chair now recognizes the gentlelady, 

Ms. Castor—— 

Ms. CASTOR. Did you have a statutory cite on that? Because it 

didn’t appear to be a statutory—— 

Mr. PITTS. Yes, I cited it. It is Section 1341. 

The Chair now recognizes the lady from Florida for 5 minutes for 

her questions. 

Ms. CASTOR. Great. Thank you very much. 

Madam Secretary, I would like to ask you to give us an update 

on Medicaid expansion across the country. 

But, before you do that, I want everyone to be aware that a new 

bill was just dropped last night by Mr. Green, The Incentivizing 

Medicaid Expansion Act. It already has 15 cosponsors, including 

myself, Mr. Tonko, Mr. Butterfield, Ms. DeGette, Ms. Matsui, Mr. 

Pallone, Mr. Kennedy, Mr. Lujan, and others. It mirrors the very 

smart provision in the budget that provides a new incentive to the 

states that have not expanded Medicaid. Because, as I said in my 

opening, it simply is completely unfair that some citizens have the 

ability to seek Medicare care under the Medicaid expansion in 

some states and, because of politics in others, they don’t. 

So, we know what the Supreme Court said. It is not mandatory, 

but it is very important that we continue the incentive because it 

is smart fiscal policy. I know in my State we would save a lot of 

money, we would create jobs, and we would take care of our neighbors if the cadre that is control of the State government right now 

would listen to the people and expand Medicaid. 

But give us an update on how it is going and what the source 

of your incentive under the budget was for those states. 

Secretary BURWELL. We know right now 30 states plus the District of Columbia have done the expansions. The information that 

we are now receiving in terms of those expansion states, whether 

that is the benefit to individuals, which we are seeing many more 

people doing adherence in terms of those who have medical conditions going, taking their medication, and those sorts of things, because of the expansion. 

So, the benefit to the individual is both a health benefit as well 

as a financial benefit. But we also know that the benefit to states 

is something that we are seeing, and that conversation is going on 

all over the country, whether that is in Kansas or the legislature 

in Maine, in terms of proposals to go forward to try to have Medicaid expansion. 

A big part of it is the benefit. We know that in the State of Kentucky the estimates are that there will be 40,000 more jobs by 2021 

and $30 billion to the State in terms of money that will flow into 

the State. 

I think those benefits are already starting to be seen in states 

where what we are seeing in terms of rural hospital closures, an 

issue that I think many of us are concerned about, is that more of 

those closures are occurring in non-expansion states. 

The other part of this I think is the issue of uncompensated care. 

The estimates are, since the beginning of the Medicaid expansion 

and the coverage expansion that has resulted in the 90-percent coverage, that we estimate that there have been about $7.8 billion in 

a reduction in uncompensated care. Those reductions are not 

31 

spread evenly; 68 percent of that is in states that have expanded. 

So, both about the individual in terms of their financial and health 

well-being, but also in terms of the economics both of the state and 

the community. 

We believe this proposal is a proposal that supports governors’ 

desires. I spent a lot of time just last weekend, spend time all 

weekend, Friday, Saturday, Sunday, and Monday, with the governors that were here from the National Governors Association. 

These are important conversations that we are having with them 

about the economic needs in their state. 

Ms. CASTOR. Well, over 50 years ago, when the Congress first 

adopted Medicaid to provide that lifeline for children and our older 

neighbors, all states didn’t jump in right at first, but eventually, 

over time, didn’t they all join the Medicaid world? 

Secretary BURWELL. They do, and I think because of the benefits 

this will provide and a number of issues we will talk about, behavioral health is one I am sure we will spend time on in this committee. We know that that Medicaid expansion will make a difference in terms of these behavioral health issues as well. 

Ms. CASTOR. Thanks. 

And one other issue, there is a lot of bipartisan interest in Congress to address graduate medical education. If we can fix the doc 

fix, I know we can make progress on graduate medical education. 

We know we have a looming doctor shortage. We know that, since 

1997, there has been a cap and it has been static where residency 

slots exist across the country. 

But I think there is this newfound momentum, bipartisan, in the 

Congress to do some creative things, but we will need your help. 

Most folks don’t know that residency positions are paid for by 

Medicare. I think we can stretch that Medicare dollar by creating 

innovative partnerships with health providers and hospitals across 

the country. There is legislation to do so. Sean Cavanaugh came 

over and talked about it. He said this could be an area to take that 

Medicare dollar, expand it, and provide the doctors we need in the 

areas we need in the future. 

So, can you commit to doing that during your remaining time? 

Secretary BURWELL. I hope you see our GME policy for children’s 

GME. It responds to many of the concerns that were expressed to 

us last year in terms of the proposal we have now. So, we look forward to working on these issues. 

Mr. PITTS. The gentlelady’s time expired, and the Chair now recognizes the chairman of the full committee, Mr. Upton, 5 minutes 

for questions. 

Mr. UPTON. Again, thank you for being with us this morning. 

I really want to focus on two things: Cures and Flint. Let me ask 

you first about cures. When we get about halfway through the 

time, I hope not to be rude, but I want to make sure that we cover 

both. 

We have worked so closely on this. Again, I thank your staff for 

the technical assistance, particularly on precision medicine, which 

we included in the bill, which, as Ms. DeGette said, passed the 

committee 51-to-nothing. 

32 

I know that you are a part of the Vice President’s Task Force 

under the Executive order for the National Cancer Moonshot. You 

have had at least one meeting, maybe a couple. 

Mr. Pallone and myself and Ms. DeGette, as well as the Senators, have been working with the Vice President’s Office. We are 

hoping to sit down next week formally to see exactly where we are. 

But what are some of the ideas, in addition to what we have in 

Cures, that you think that we might be able to incorporate? Our 

idea, of course, is to take the House-passed bill already. The Senate 

has begun the markup stage in the last 2 weeks, and they are looking at doing a series of bills which are all bipartisan at this point, 

intend to be so, Mr. Alexander and Ms. Murray, and then, to look 

at injecting the Cancer Initiative as part of that process, go to conference, and accept all the goods parts, which is, in essence, the 

whole thing now. 

But what additional ideas are you all thinking about as part of 

that initiative as we begin to move forward? 

Secretary BURWELL. First, thank you for your leadership and the 

leadership of other members of this committee in the 21st Century 

Cures space, the PMI space, and now, this space as well. 

We are excited about working in that space. A couple of the 

things that I would be specific about in terms of places where I 

think we can build on the work that you all were already doing in 

your bill are some of the key areas we want to do investments in. 

Some of those have to do with immunology in terms of advancing 

that science, where we know that people’s own immune systems 

are some of the best ways that we can advance the ability to treat 

cancer, as well as it is good overlap with some of the proposals that 

we are thinking about in the cancer space related to genetics. That 

overlaps very directly with your PMI work. 

I would also mention—and I am sure you will have the conversation with the Vice President, and I always welcome it, too—as we 

think about making sure that FDA, I think you know we have suggested that FDA actually have a particular expertise and develop 

a part of FDA that is cancer- and oncology-focused. I think we 

think that is an important addition to our work. 

And so, those are some of the specifics of what we do. We also 

look forward to your ideas about how we can expand access to 

trials. That is something I think we want to have those conversations with you about and, as you reflected, before we get to the end 

of the process, have those conversations earlier. 

Mr. UPTON. Well, that is great, and we look forward to meeting 

with the new FDA Director. I don’t know if he was formally confirmed yesterday. I think he has been confirmed, but he has not 

been sworn in yet. 

Secretary BURWELL. He will, hopefully, be today at noon or 1 

o’clock. 

Mr. UPTON. We look forward to that. 

Let me just switch now to Flint. Again, your office has been most 

helpful. Dr. Laurie has had very good reviews. We have dispatched 

to Michigan over the last number of weeks. Our Michigan delegation, on a bipartisan basis, is meeting with her today. I know that 

you were there last week. 

33 

I talked to our governor earlier this week specifically about this, 

and I know that he has got a number of waiver requests that are 

in. CHIP expansion for pregnant women and children up to the age 

of 21, increased Medicaid eligibility for lead-abatement activities, a 

number of things. 

Can you tell me where you all think you are in terms of the requests that Michigan has put forward? 

Secretary BURWELL. As I articulated with the governor and when 

I was in Flint, I think we will be able to approve an expansion of 

Medicaid that will be for pregnant women and children. That will 

be a major expansion. It will also include something that is pretty 

important, which is comprehensive targeted approaches to individual management. So that when we understand that a child has 

had a certain level of exposure, that we make sure that they receive the comprehensive services that they do. That is another part 

of the waiver conversation. So, my expectation is that we will be 

able to do most of what is in that waiver and that we will get that 

done quickly. 

Mr. UPTON. Knowing that you were there last week, the water 

is still unsafe to drink, is that correct? 

Secretary BURWELL. With regard to the water, at this point people should either use the bottled water or filters. But, once you 

have a filter that is appropriately installed and you do the directions in terms of the changing and the cleaning of your filter that 

you need to do, that water should be safe. If you want it tested, 

though, call 211. Anyone should just call 211 to make sure, if that 

is what you want for comfort. If you are a pregnant woman or if 

you are a child under 6, we recommend, out of an abundance of 

caution, use the bottles. But, otherwise, filters applied, and those 

filters are being tested. EPA continues to test regularly. 

Mr. UPTON. Thank you. Yield back. 

Mr. PITTS. The chairman yields back. I now recognize the ranking member of the full committee, Mr. Pallone, 5 minutes for questions. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I wanted to ask Secretary Burwell, in your testimony you noted 

that part of the goal of the budget is to build upon the successes 

of the Affordable Care Act, and the latest round of open enrollment 

just recently ended. Can you tell us more about how this open enrollment has gone, including how many people signed up for health 

insurance, how many were eligible for tax credits to make insurance more affordable? 

Secretary BURWELL. With regard to this open enrollment, 12.7 

million Americans enrolled in this open enrollment. There are some 

other things that I think are important about the open enrollment 

that get to some of the broader issues that I am sure we are going 

to discuss. 

We know that, of those folks, there were 4 million new people 

that came in. Of the 4 million new, 60 percent of them signed up 

for coverage for January 1st. Why is that important? It says it is 

a product that they want and they want to start at the beginning 

of the year. It is also important because, from an insurance company or an issuer’s perspective, you want them in for the full year 

in terms of downward pressure, again, on price. 

34 

The other thing that happened in this open enrollment, in addition to that 12.7, is when you look at the people that were in before—so, I talked about the new, but the other folks—70 percent 

of the folks who had been enrolled last year and came back and are 

re-enrolled actually took some action. They came in, updated their 

information, or they shopped. This is an engaged, empowered, educated consumer making choices. 

If I asked in a setting where there is employer-based coverage, 

those numbers generally don’t even ever get above 10 percent in 

terms of the number of people who engage in a re-enrollment process. So, it is an engaged consumer. It is a consumer that is seeking 

that produce. And so, those are some of the highlights of what we 

have seen in this year’s open enrollment. 

Mr. PALLONE. OK. Thanks. 

I know that the gentlelady from Florida mentioned Medicaid expansion and the President has proposed these additional incentives 

for states to expand Medicaid. Could you describe the benefits that 

Medicaid expansion, that the states are experiencing and why it is 

so important that the remaining 19 states join them in moving forward? 

Secretary BURWELL. So, as I mentioned, it is the advantage and 

the benefit to the individual. I am sure you all meet folks every day 

who it makes a difference in terms of their ability to get the health 

coverage they need, whether that is the preventative services they 

need to prevent other things or when they have something going 

wrong, their ability to treat those. And so, that is the individual. 

But the economic benefits of this and the other benefits we have 

seen, that the number of people in the country now who are struggling with making their healthcare payments has gone down as a 

nation. We have seen The New England Journal of Medicine most 

recently put out a study saying that the changes through Medicaid 

expansion are affecting payer mix for hospitals and making a difference to them on the ground. 

And so, it is both about the individual, the communities, and the 

state, as we think about those benefits. 

Mr. PALLONE. Then, lastly, I wanted to ask about the proposals 

in the President’s budget to address the opioid abuse and overdose 

crisis. The President’s 2017 budget requests a billion in new mandatory funding over two years to expand access to treatment for 

prescription drugs and heroin use. Can you just walk us through 

this funding request? Why is this investment necessary? Why is 

our current treatment capacity insufficient? Why is it important 

that the billion dollars be provided in the form of mandatory funding over the two years, and how is this going to be allocated? 

Secretary BURWELL. With regard to the money that we have 

asked for, it is money to support an evidence-based strategy that 

we have talked about, and let me just hit those points because that 

is where the money will go. 

The first area is in the area of prescribing. We know that part 

of what has contributed to the issue of the opioid epidemic is overprescribing. And so, it is money to support the efforts of new guidelines that will come out from CDC and making sure that those 

guidelines are actually used, learned, and applied. 

35 

The second area is in the area of medication-assisted treatment. 

This is the space where the vast majority of this money goes. It 

goes to that and it will go to communities and states. This is money 

that will not be used at HHS, but will go to communities and 

states. 

This is part of what we know. Behavioral health is something 

that has been a local issue for so many years. It is paid for mainly 

at the state and local level. And so, making sure that communities 

can have the access. 

Right now, I was told 2 weeks ago that in 85 percent of the counties, rural counties, in this country that their ability to have behavioral health providers and access is quite limited. And so, that 

money, and that is the vast majority of the money in the budget. 

The last area is in the area of Naloxone or Narcan. That is, 

sadly, we know that in our communities people are overdosing. And 

so, to prevent them from dying, you apply Naloxone or Narcan. 

There will be money to go to the communities to get that access 

to that drug. So, in the last-case scenario where we have someone 

who has overdosed, we can at least have first responders and community members that can save lives. 

Mr. PALLONE. Thank you so much. 

Mr. PITTS. The Chair thanks the gentleman. 

I now recognize the Chair emeritus, Mr. Barton, 5 minutes for 

questions. 

Mr. BARTON. Thank you, Mr. Chairman. 

Before I ask my questions, I want to file a mild complaint. The 

Secretary called me on my cell phone the other day and was very 

charming and disarming. It makes it very difficult to ask her tough 

questions when she is so polite and receptive to my input. So, we 

may want to consider adopting a rule that Cabinet Secretaries, at 

least of the opposition party of the majority, cannot do that. 

[Laughter.] 

So, I just want to put that on the record. 

Mr. PITTS. We will take it under advisement. 

Mr. BARTON. All right. 

Madam Secretary, it is always a delight to have you come before 

the committee and answer questions that are usually not at all related to the budget which you are supposed to be prepared to answer. I have got a difficult question and an easy question. Which 

do you want first? 

Secretary BURWELL. Difficult. 

Mr. BARTON. The difficult question? I am surprised at that. 

Secretary BURWELL. I think you know me. 

Mr. BARTON. There are many of us that are very concerned about 

the issue of harvesting and selling what you could either call body 

baby parts or you can call it fetal tissue, whichever term you 

choose to use. I am very concerned about that, not opposed to family planning, not opposed to funding women’s health issues at all. 

My staff has done some research and found out that the last time 

the issue of fetal tissue research was studied was during the 

Reagan administration. There was a special commission appointed 

by the President that did a study. That is over 30 years ago. There 

have been tremendous changes in medical practice and medical research since that time. 

36 

The NIH is not currently funding such research internally, but externally they have supported about $76 million in such areas of 

research outside the NIH. 

Would you support a new commission to take a look at this issue, 

so that, regardless of which side you are on or the politics, we could 

at least know what the facts are? 

Secretary BURWELL. With regard to the issue, I agree with you 

that this is an issue of great emotion and focus on different sides 

of the issue, and I respect that there are differing opinions on the 

issue. 

With regard to the question of the use of this tissue as part of 

our research that we do, I think in terms of the basics of the question of the value of that research, we continue to see—and whether 

it is the fact that the measles vaccine, the mumps vaccine, hepatitis A are all products that have derived and come out of this research, to the fact that some of this research has helped us move 

in terms of the research that was done for the Ebola vaccine. And 

so, for us, the question of the research, when done appropriately 

and in accordance with the laws and the statutes, and no valuable 

consideration, are things we take extremely seriously. 

Mr. BARTON. But would you support a new commission to review 

the issue? 

Secretary BURWELL. We would welcome the opportunity to have 

the conversation. I think the question is to understand which issue. 

Because I think at its heart is the question of the value of this research and the question, I think, in terms of the guidelines that are 

put in, which are very strict, are there issues or problems with 

that? So, we would welcome the opportunity to understand more 

fully what you think are the issues around this that we would—— 

Mr. BARTON. Well, the gentlelady next to me on my right, Mrs. 

Blackburn, is heading up a select committee that I believe is going 

to be looking into this. 

Secretary BURWELL. And I think we have responded, both the 

Department and NIH, as an operating division, to your request, 

Ms. Blackburn. 

Mr. BARTON. Well, here is my easier question: the majority of 

this committee has sponsored a piece of legislation that we called 

the ACE Kids Act. It would change federal policy to create a medical home for families that have special needs children. It would 

allow there to be an anchor hospital that would, then, create a network. So that, if you had a child who was a special needs disadvantaged child with multiple medical conditions, they could come into 

the network and there would be a single home. We have a majority 

of the committee and we have almost a majority of the House of 

Representatives as cosponsors. 

Has your office taken a look at that legislation and, if so, what 

is your position on it? 

Secretary BURWELL. We welcome the leadership that you and 

others have provided in this area of complex cases. We are continuing to work right now with our administrative authorities to 

work with states in order to get the kind of care and service that 

you are talking about for parents and their children. And so, we 

want to continue to work on that. We have a proposal in our budget that extends that. Because one of the things is, when some of 

37 

the states do this, it carries over not for just children, but for larger 

populations. Sometimes that is why states are hesitating. 

So, we look forward to working in terms of, as I said, we have 

a proposal in our budget, would like to have the conversation 

about—I am not sure if your legislation includes that part of it or 

not. 

Mr. BARTON. OK. 

Secretary BURWELL. But I think we are with you on the objective 

of helping families with this complex care. 

Mr. BARTON. Thank you. Thank you. 

And I thank the chairman for his discretion. 

Mr. PITTS. The Chair thanks the gentleman, and now recognizes 

the gentlelady from California, Mrs. Capps, for 5 minutes for questions. 

Mrs. CAPPS. Thank you, Mr. Chairman. 

And thank you, Secretary Burwell, for your testimony today. 

The President’s budget proposal this year includes many important investments in our nation’s healthcare delivery system, workforce, and prevention programs. HHS programs touch each one of 

us in some way, whether as a Medicare beneficiary, someone needs 

a tobacco cessation program, or perhaps being cared for by a 

healthcare provider trained with federal funding. I recognize that 

balancing the many competing proprieties in this space is a challenge and appreciate your efforts on this. 

Today I would like to highlight two different programs that very 

much deserve your strong support and ask a question about each 

of them. Specifically, I would like to highlight the importance of the 

federal investment in the training and retention of the nursing 

workforce. Title VIII provides critical federal grants for nursing 

schools and organizations to advance their educational programs to 

promote diversity in the field, repay loans for nursing students who 

work in facilities with critical shortages, and train geriatric nurses. 

Our nation faces a significant challenge of caring for a growing 

patient population with limited resources. Title VIII nursing workforce programs, programs that have been around since 1964, are a 

key component to this effort because they train highly-skilled 

healthcare workers who can serve in hospitals, research labs, and 

communities. 

Will you discuss briefly what this budget request does to support 

the development of a highly-qualified healthcare workforce important today and known as the Title VIII programs, and ways that 

it can be continued? 

Secretary BURWELL. So, over $200 million in investment, and 

those are split, basically, in two different pieces. The first is actually education, as you mentioned, in terms of educating and training, in terms of that supporting the provider community. The second part is actually with loan forgiveness programs that help us 

have those trained professionals go to the places where we have 

shortages and needs. Those are the two main ways. 

But, throughout the budget and throughout the proposals that 

are before you now, there are a number of things that I think are 

supportive of the nursing community because we believe they are 

part of getting us to a system where we have better quality care 

in a more affordable way. And so, having nurses and other health 

38 

practitioners operate at the top of their license, and steps that we 

are taking. For instance, in our budget we actually propose with regard to buprenorphine, which is an important medication-assisted 

treatment for opioids, we are proposing that it is considered by the 

Congress to expand those that can prescribe, if they meet certain 

conditions. So, we are supporting it in terms of our funding, but 

also in terms of how we think about the role of the nurse in a system that can improve quality and reduce cost. 

Mrs. CAPPS. Thank you, Madam Secretary. 

And this is why I joined with my House Nursing Caucus CoChair to author bipartisan legislation to reauthorize Title VIII, The 

Nursing Workforce Development Programs, with my colleague, Mr. 

Joyce from Ohio. 

Another key priority for the administration and for many of us 

personally is making an impact on cancer treatment care and prevention. As you know, cancer continues to be one of the leading 

causes of death globally. With the number of new cancer cases expected to rise to 22 million within the next two decades, it is a 

huge number. 

As one of the Co-Chairs of the Cancer Caucus, I commend the 

administration for launching the National Cancer Moonshot Initiative. If we are going to win the war on cancer, we must take a comprehensive approach to this fight, as this initiative proposes to do. 

Only 5 percent of cancer patients in the United States participate 

in a clinical trial, and most do not have access to their own data. 

I believe participation in clinical trials is so essential to finding 

new treatments and, ultimately, a cure for cancer or cures for cancer. 

Increasing data-sharing is also critical, as it can help to advance 

a better understanding of the disease and how best to treat it. Increasing participation in clinical trials and ensuring these trials include a diverse range of participants, including of women of all 

backgrounds, ages, and risk levels, is something I have long advocated for. 

Secretary, how will you, through the National Cancer Moonshot 

Initiative, help to increase access to clinical trials in the area of 

cancer? 

Secretary BURWELL. With regard to the issue of trials, as I mentioned in responding to Mr. Upton, that is one of the issues that 

is a priority. 

In terms of things that we can do right now, and should do right 

now and are doing right now, this ties into the issues around electronic health records and precision medicine. Those are separate 

but related issues, as is the cancer part of this, which is making 

sure that patients and consumers can get access to their data. 

This, I think, also relates to the issue that we were talking about 

with regard to 21st Century Cures on this side. But on the Senate 

side, I think Mr. Alexander and Ms. Murray are thinking of including things that would prevent data-blocking. Data-blocking is when 

the providers of software to electronic health records, so a provider 

of software to a hospital, does things, and sometimes they might 

be about cost, but sometimes they may be about making things 

really hard for the consumer to get that data information. 

39 

And so, these are steps that I think we can take right now and 

are working on. I will actually be speaking at a conference of all 

the technology people as soon as this Monday with regard to getting commitments from the private sector to work against this 

data-blocking. Hopefully, we can get there, but I think it is important that, certainly, your colleagues on the other side are considering legislation which we are having conversations with them 

about. This would come together in the 21st Century Cures 

version, the House and the Senate coming together when you all 

come together in a conference. 

Mrs. CAPPS. Thank you very much. I yield back. 

Mr. PITTS. The Chair thanks the gentlelady. 

I now recognize the Vice Chair of the subcommittee, the gentleman from Kentucky, Mr. Guthrie, 5 minutes for questions. 

Mr. GUTHRIE. Thank you, Madam Secretary, for being here 

today. I really appreciate it and echo what my colleague said, willingness to work together. 

One of the big concerns I have had—I was in state government 

before in Kentucky—and since I have been here, it is the growth 

of Medicaid. We are looking at how we deal with the growth of 

Medicaid, how we cover the vulnerable, but we have to do it in a 

way that is sustainable for our budgets. 

I know you worked in the Clinton administration. I have a Congressional Record, a letter, so I can show the documentation. But 

it was Senator Murray and it was a letter that she sent to President Clinton, and I will quote what she said on the floor of the Senate. 

This letter is partisan in that it is signed by all Democrats, 

which would include the Vice President. At the time he was in the 

Senate. But it is my feeling that, as Americans, every Member of 

the Senate should have an opportunity to endorse the position described in the document. 

And I will just read the opening of the letter. It says, ‘‘We are 

writing to express our strong support for the Medicaid per-capita 

cap structure in your 7-year budget.’’ 

So, as we are looking at all options and dealing with Medicaid— 

Medicaid is now about three times what it was in 1995, three times 

the size. Would you support a per-capita cap structure or Congress 

adopting that structure? 

Secretary BURWELL. As we think about the issue of healthcare 

cost, which I think everyone agrees is what is driving our deficit 

over the long-term, I think one of the things is separating out two 

issues. One is per-capita costs, which is related to the issue you are 

talking about, and, also, the overarching cost. As we, as a nation, 

move to have more people covered and we have a baby-boom 

through Medicare, we are going to have to focus on those issues as 

we think about it. 

With regard to the question of caps and how that works, I think 

the question—and we are also seeing this right now in Puerto Rico 

in Zika, which basically has a blocked approach to Medicaid, a 

blocked approach—— 

Mr. GUTHRIE. Right, yes. 

Secretary BURWELL [continuing]. That right now we are having 

a very difficult time. That is part of why we will need the suppleVerDate Nov 24 2008 12:25 Sep 06, 2017 Jkt 037690 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-118 CHRIS
40 

mental money. That is part of why we have a proposal in our budget on Puerto Rico. 

And so, the concerns that we have around those issues are, one, 

that what happens is pressure gets put on the state or the beneficiary in ways that you end up with reductions in quality of care. 

Those are suggestions and ideas—I am sorry I am not familiar 

with the letter that you are—— 

Mr. GUTHRIE. But it was just that concept. I think that was in 

President Clinton’s budget proposals twice, I think, in the 1990s. 

And so, I was just showing that it had bipartisan support. Even the 

Vice President signed onto it in the Senate at the time. 

If that is the direction we need to go for that, is that something 

you would support? 

I do want to get to Kentucky. 

Secretary BURWELL. OK. 

Mr. GUTHRIE. I don’t want to be rude, though. I actually don’t 

want to be rude. 

Secretary BURWELL. Go ahead. Go ahead. We will come back if 

we have to. 

Mr. GUTHRIE. But you did meet with our governor. As you said, 

you met with the governors last week, and I understand from people I have talked to and him—I haven’t talked to him, but people 

with him—that it was very productive and they really appreciated 

the time. 

One of the concerns, though, as we move forward, because I 

know you quoted that a lot of money is going to flow to Kentucky 

through their Medicaid expansion, but also a proposal right now is 

like 9-percent cut in universities for 2 years. It is 18 percent over 

2 years to universities and other levels of government, just because 

it is not just Medicaid, but Medicaid is a big part of it. Part of it 

is public pensions, but Medicaid. And so, they are looking at ways 

to innovate, as you know, because you met with them. Like I said, 

I appreciate that. 

But there was a Vikki Wachino responding to some questions 

from the committee on Medicaid, the head of Medicaid at CMS. She 

wrote, ‘‘In some cases where new approaches are being tested, such 

as Healthy Indiana Plan 2.0, approved earlier in 2015, it is also important to evaluate the impact of new approaches being tested in 

1115 demonstrations before approving similar policies.’’ 

Can you give examples where you had to have evaluations before 

you could move forward on the others? Because I know I don’t 

think CMS does it for stuff like delivery system reform programs, 

premium assistance, managed long-term care service and supports, 

and managed care. So, is there a criteria saying you can’t move forward on a similar plan until we evaluate that? 

Secretary BURWELL. With regard to CMMI, the Centers for Medicaid and Medicare Innovation, you all actually gave us pretty high 

standards with regard to evaluation, and standards that, actually, 

I think it is good because I think we should meet the high standards before we take a demonstration and expand it. 

So, in that part of the work that we do, yes, we have seen that, 

similarly in the Medicare work and the delivery system reform 

work. I think what we want to do is make sure, when there are 

41 

things that are new and untested, that before we expand to other 

states that we know and understand. 

I think it is important to reflect that—— 

Mr. GUTHRIE. But this is CMS, not CMMI. It is CMS. 

Secretary BURWELL. CMMI is part, is the Center for Medicare 

and Medicaid Innovation, is what was created and is part of CMS 

in terms of how we are doing that. And so, there is that Center. 

There is the Medicaid Center. We work to align as much as possible. 

But I think to get to the core of the issue that I think you are 

raising, every state comes in with a different history and a different desire and need. Those are conversations that I think most 

governors will tell you on both sides that I welcome to have the 

conversation and that is what we will do. 

Mr. GUTHRIE. I understand that, but also in that quote was that 

innovations that work in some states may not work in other states. 

That is some of the question. So, if something doesn’t work in one 

state, it still could work in another state. 

But we appreciate your openness, and I know I am out of time. 

But we really need to make it work and we need to be innovative 

to make our Medicaid system work. So, I appreciate the opportunity. 

Secretary BURWELL. I think we want to make sure those folks 

stay covered and it is done in ways that improve quality and do 

downward pressure on cost as much as possible. So, we are agreeing. 

Mr. PITTS. The Chair thanks the gentleman. 

Did you want to submit your letter for the record? Did you want 

to submit the letter for the record? 

Mr. GUTHRIE. Well, it is in The Congressional Record for the 

1995 Senate, but I submit that for the record. 

Mr. PITTS. All right. Without objection, so ordered. 

[The information was unavailable at the time of printing.] 

Mr. PITTS. The Chair now recognizes the gentleman from Oregon, Dr. Schrader, 5 minutes for questions. 

Mr. SCHRADER. Thank you. 

Thanks for being here, Madam Secretary. 

Secretary BURWELL. Thank you. 

Mr. SCHRADER. I always enjoy it. 

Is it accurate to say that the total discretionary budget authority for your Department, HHS, is actually $658 million less than it 

was in 2016 for 2017? And even accounting for rescissions, it is 

$441 million less than in 2016? 

Secretary BURWELL. That is correct. 

Mr. SCHRADER. I appreciate it. There are very few agencies that 

come in, realizing we are in tough economic times, that are willing 

to take a little hit in the budget arena and make sure things balance, and it is not at the risk of patients, which I also appreciate. 

We are getting better healthcare out there, as you have testified. 

I also want to appreciate the fact that the administration is committing to 85 percent of Medicare payments being tied, frankly, to 

positive health outcomes by the end of 2016. I think that is the future. We are having great success on the CCO level in Oregon—— 

Secretary BURWELL. Yes. 

42 

Mr. SCHRADER [continuing]. And our Medicaid expansion project. 

We are actually getting more for less. The patients love it. The 

healthcare providers are very excited. We are getting great outcomes in terms of reduced hospital stays, less ER visits, more primary care attention. 

I had the mental healthcare providers in the other day, also part 

of the CCO expansion. So, it is not just your physical health; they 

are starting to get at the stuff that Congressman Murphy and 

many of us are trying to get at, to incorporate mental health into 

the holistic approach to folks. I think it is very, very, very exciting. 

I guess I would be interested in your update on the next generation of ACOs in the Medicare area, where we are going with the 

outcome-based care that we are talking about. 

Secretary BURWELL. So, in terms of this idea of getting an educated, empowered, and engaged consumer at the center of care, and 

we often call that delivery system reform, there are three basic 

tools that we are working against. 

One is payment reform, so that we are paying for that value 

versus volume. And you talked about that in terms of the statistics. 

This year we, hopefully, will meet the goal we set out that 30 percent of Medicare payments will be in value, not volume by the end 

of 2016. 

The second area of focus is changing the way we actually deliver 

care. This gets to some of the innovation projects that we are working on and measuring. One of those, for example, in terms of where 

we are seeing real progress, not to the point where it meets the 

standard of evaluation yet, that we would expand. But we are seeing that in terms of long-term care for people in the homes and 

making sure that we are doing certain types of care in the home, 

we see a reduction in hospital visits for those in the home and we 

see a 3,000 per Medicare beneficiary savings. 

Now we need to make sure that that can hold, but that is some 

of the progress that we are seeing in that space and changing the 

way delivery—keep people in their homes; give them the education 

they need; give them the tools they need to get the care they need, 

so they can stay at home, not be in hospitals. 

The third area is data and information. We talked a little bit 

about that with Ms. Capps. 

Mr. SCHRADER. Right. Well, I appreciate all that. I think the 

ACOs, Medicare Advantage is another way to get value-based to 

folks, and particularly in the home care settings. 

I have worked with Mr. Lance and Ms. McMorris Rodgers on several on several innovative programs that I hope the administration 

will look favorably on in terms of improving that healthcare delivery, getting it to the consumer, a nice bipartisan issue, regardless 

of your view of the ACA, in particular. 

I am hoping that HHS will continue to work with this committee 

and other Members on improving the innovation opportunities 

through Medicare Advantage and wonder if there are other things 

you are doing to improve things for beneficiaries in the Medicare 

Advantage Program. It is working really, really well out west in 

Oregon. 

Secretary BURWELL. With regard to the ACOs, that is a place 

where we have had measurable results, but we have seen the 

43 

measure had to be that you do not reduce quality, but you have 

savings. If you can increase quality, that is even better. 

Mr. SCHRADER. Yes. 

Secretary BURWELL. And we have seen that and the savings, 

$300–400 million in terms of that. And now, we have a new generation of ACOs, the Accountable Care Organizations. 

With regard to Medicare Advantage, the issue, one of the things 

I would highlight that we are working on right now is one of the 

challenges in Medicare Advantage is the question of people with socioeconomic difficulties and the star ratings, and how those ratings 

perhaps might disadvantage those who have a population who have 

a number of chronic conditions. 

And so, we have taken steps to weight—— 

Mr. SCHRADER. Good. 

Secretary BURWELL [continuing]. And include things for that socioeconomic. We are spending time to understand more fully. We 

want to make sure we analytically base what are the differences 

in changes people should have in payment if they are serving a 

more difficult population. 

Mr. SCHRADER. Great. 

Secretary BURWELL. But, in the interim, as we are finding more 

solutions, those are changes we are making. 

Mr. SCHRADER. Very cool. 

The last comment I guess I would make is I had insurance 

agents in my office just the other day working really hard to get 

people enrolled. When they have their circumstance change, they 

need special enrollment opportunity. They are having a little trouble accessing the Web site compared to during the open enrollment 

periods. So, if you could just reach out to them a little bit and work 

with them to help them help people make those changes, so that 

we save money, people get the healthcare they need, and they are 

not subject to penalties later on, I would appreciate that. 

Secretary BURWELL. Absolutely. We would like to reach out and 

find out, so we can reach out directly. 

Mr. SCHRADER. Thank you. 

Secretary BURWELL. We will do that. 

Mr. SCHRADER. I yield back Mr. Chair. 

Mr. PITTS. The Chair thanks the gentleman. 

I now recognize the gentleman from Kentucky, Mr. Whitfield, 5 

minutes for questions. 

Mr. WHITFIELD. Thank you, Mr. Chairman. 

And, Madam Secretary, thanks very much for being with us 

today. We all appreciate the phone call. 

There are three issues I want to talk about. First of all, alternative payment models for oncology. 

Secretary BURWELL. Yes. 

Mr. WHITFIELD. CMS has already developed a model, the Oncology Care Model, under the Center for Medicare and Medicaid Innovation. From conversations that I have had with oncologists and 

others, they find the sign-up process to be overly-complicated. They 

say that they are being encouraged to sever relationships with certain hospitals, and that many of them are not being informed on 

whether or not their application is being accepted. 

44 

Now, as you also know, Cathy McMorris Rodgers and Steve 

Israel introduced a bill called The Cancer Care Payment Reform 

Act, which we had the legislative hearing on in September of last 

year. That is an alternative model that the oncologists very much 

support. They are the ones providing this care. 

And so, the impression that we are getting is that you all are determined that you are going to move forward on your model. I simply would ask, would you work with the providers to see about developing a model that is acceptable to everyone? 

Secretary BURWELL. Absolutely. We would like to and we would 

like to follow up with your staff directly in terms of talking to some 

of the providers that you have talked to, so we can get their input 

directly. 

Mr. WHITFIELD. OK. Well, we appreciate that. Thank you very 

much. 

Secretary BURWELL. Yes. 

Mr. WHITFIELD. Now, on another matter, over a year ago, this 

committee and the Ways and Means Committee staff, which started working with HHS regarding a program with the Affordable 

Care Act that was authorized called the Basic Health Program. It 

was never funded. There was never an appropriation for that. 

There was a permanent appropriation for an Affordable Care Act 

program called the Premium Tax Credit. The administration has 

been taking money from that program, last year $1.3 billion, to 

fund the Basic Health Program. 

As I said, Ways and Means has been contacting you all on a regular basis about this. Energy and Commerce has been contacting 

you on a regular basis about this, asking for documents about how 

this is being funded without a direct appropriation. After a year of 

asking for these documents, Ways and Means still has not received 

them and the Energy and Commerce Committee has still not received them. 

Will you all work with us to provide this information that the 

staffs are asking for? 

Secretary BURWELL. I think we are and continue to work. We 

have been responsive in terms of letters. We have been responsive, 

actually, on the Ways and Means side. A briefing was asked for. 

We provided—— 

Mr. WHITFIELD. OK. Well, let me just say this: I mean, I appreciate that, but I am not there. I am not negotiating. I am not even 

discussing it. But the staffs on both Ways and Means and on our 

committee tell us that what has been provided is very meager, that 

it is not the documents that they are requesting. 

Secretary BURWELL. Well, I think we want to continue to work, 

and we will. 

Mr. WHITFIELD. OK. 

Secretary BURWELL. I think we are trying to work cooperatively 

with all of the issues of oversight which we think are important. 

In this particular case, in terms of the authorities, we believe the 

authorities exist. The authorities are for the same amount; they are 

the same types of money. 

Mr. WHITFIELD. So, you all feel like you don’t need a direct appropriation, that you have other authority to do it? 

Secretary BURWELL. We believe that the authority—— 

45 

Mr. WHITFIELD. And that is what we want, the document, I 

guess, that provides that authority, at least your interpretation. 

But you said that you will continue to work with our committee 

on it. We would appreciate that. 

Secretary BURWELL. We will. We will. 

Mr. WHITFIELD. One other thing I just want to bring up briefly, 

because I was involved in it, is the sunscreen legislation. As you 

know, skin cancer is the most common form of cancer in the U.S. 

Skin cancer is more prevalent than breast cancer, prostate cancer, 

lung cancer, and colon cancer combined. 

And so, these ingredients that have been on file at the FDA for 

approval since 2002, over 14 years, and many of these ingredients 

are being used in Asia, Europe, South America, around the world, 

and yet, we passed a bill specifically to encourage a process that 

is more applicable to this. And even since then, there has been no 

movement 14 months later. 

I know that Johnny Isakson, Senator Isakson, asked about it. I 

am asking about it. So, I hope that you all will tell us, do we need 

to do something? Is there anything that we can do to facilitate this? 

Secretary BURWELL. We would like to follow up because I think 

maybe you can help us. Our concern is it goes on the new products 

that are coming on. First, in Europe it is a cosmetic. We actually 

believe, because it is going on your children 24/7, that we need to 

make sure that what is going through, is it absorbable in the children’s skin? It is for everyone, but, of course, we are focused on 

children. And are those chemicals going to do something negative? 

Mr. WHITFIELD. Yes, yes. 

Secretary BURWELL. And so, I think if we have a conversation, 

there may be a way that you can be helpful—— 

Mr. WHITFIELD. OK. 

Secretary BURWELL [continuing]. In helping us get the information we need. 

Mr. WHITFIELD. No, we would love to do that because we definitely want to protect these children. But, also, when you have 

something pending for 14 years or 15 years, people are beginning 

to wonder a little bit. 

Secretary BURWELL. We would look forward to that. 

Mr. WHITFIELD. Thank you very much, and I yield back the balance of my time. 

Mr. PITTS. The Chair thanks the gentleman. 

I now recognize the gentleman from Massachusetts, Mr. Kennedy, 5 minutes for questions. 

Mr. KENNEDY. Thank you, Mr. Chairman. 

Madam Secretary, thank you again for making an appearance 

today. 

I would like to commend the President’s budget for including 

critical reforms to mental health and Medicaid, such as ending the 

190-day lifetime limit on psychiatric inpatient care for Medicare 

beneficiaries and for expanding the electronic health record incentive program for including behavioral health providers. It is a big 

step forward. 

I also support the President’s proposal to reinstate the primary 

care bump, which, according to one study, resulted in an increase 

of appointment availability by 7.7 percent. 

46 

Do you think it is fair to say, Madam Secretary, that this proposal could also expand the program so that mental health and behavioral health providers in Medicaid could benefit from the bump 

as well? 

Secretary BURWELL. Yes, we think that it is a continuum, and 

there are a number of different proposals, as you articulated, that 

are focused on getting us to a different level with regard to access 

to behavioral health and integration, as Mr. Schrader mentioned, 

in terms of integration of behavioral health. 

Mr. KENNEDY. So, would you agree that adequate reimbursement 

levels are a critical piece to expanding the workforce to ensure that 

Medicaid patients have access to timely care? 

Secretary BURWELL. We do. I think you know our proposal on 

primary care that we have in our budget is about making sure we 

do some of that. In addition, the proposal we have on behavioral 

health is actually focused specifically on some provider issues in 

terms of getting more providers, so we have that access. 

Mr. KENNEDY. The President’s budget I believe, Madam Secretary, also proposes lifting the federal exclusion that currently 

prevents some children from getting Medicaid coverage of early and 

periodic screening diagnosis and treatment services and limits 

terms. That means kids on Medicaid can’t get both mental health 

care and physical care while they are patients at certain facilities 

known as IMDs. 

Madam Secretary, can you tell us a little bit more about the importance of ensuring that all children, regardless of the setting, 

have access to comprehensive health? 

Secretary BURWELL. We think it is important, which is why we 

have the proposal. I think it is an issue that I’m sure we may discuss, also, with Mr. Murphy, in terms of making sure that these 

kids have that access. 

What happens, and if you visit facilities, when you are a parent 

and you are told, ‘‘Oh, here is a prescription. You have to go at a 

different time and a different place or it won’t be paid for in the 

same way,’’ that is prohibitive in terms of having a child get the 

services that they need as they need them. A warm handoff. So, 

whether it is in the facility itself and the payment mechanisms 

really make a difference to how children are receiving this kind of 

care. Our proposal is aimed at trying to help that along. 

Mr. KENNEDY. Thank you. 

I want to touch base a little bit on what Ms. Capps was getting 

at as well with regard to data. There are 14.1 million Americans 

in 31 states that have enrolled in Medicaid as a result of the Affordable Care Act, and an additional 4 million could gain coverage 

if the remaining states expand their Medicaid programs. These 

numbers represent, obviously, far more than just facts and figures. 

They are about prenatal appointments, cancer screenings, and lifesaving preventive care. 

Perhaps most noteworthy, Medicaid expansion means that millions of Americans now access mental and behavioral healthcare. 

Medicaid is the largest payer of mental health services in the 

United States and it has the greatest potential to reform a broken 

system. In order to make the necessary reforms and to bolster the 

program more effectively, we need to first know how CMS reimVerDate Nov 24 2008 12:25 Sep 06, 2017 Jkt 037690 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-118 CHRIS
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burses doctors and at what levels. However, when I talk to doctors 

and patients and I ask how much Medicaid reimburses for their 

services, no one is able to point to exact figures, given the nature 

of those reimbursement mechanisms across states. 

So, Madam Secretary, I would love your help in working with me 

on solutions to try to improve CMS’s data collection for each state, 

so that we can ensure that we know at least how those payments 

stack up against private insurance. 

Secretary BURWELL. We want to work on that issue. One of the 

things is because Medicaid is a state-run program. We are very dependent on the states in terms of their analytics, their data, and 

their systems. 

Having said that, we look forward to, because we want to know 

and understand that information. Transparency of data and information is something I think we think is a very important thing 

across the healthcare system. Whether that is the dashboard that 

we put up in the December timeframe on payments in drugs, so 

that people can actually know which drugs have had the largest increase in cost, creating that transparency for the consumer and 

providers in terms of putting up on a Web site who are the largest 

recipients of Medicare payments. And so, this is a whole space that 

we believe is going to improve quality and reduce price. 

Mr. KENNEDY. Thank you. 

If I can, I have got about 30 seconds left. You touched based in 

your written testimony, and as well I think with Mr. Schrader and 

a couple of other times, about the transition off of fee-for-service 

basis in Medicare. I was hoping that you could just provide a little 

bit more detail on the learning and action, how that is going and 

what you see going forward, and if there are ways we can be helpful, in 20 seconds or so. 

Secretary BURWELL. Important, thousands have joined. It is a 

means by which the government in its changes in payment tries to 

align with the private sector. So, we move together. We learn from 

each other. We get better results, and we prevent unintended consequences. And we are seeing that start to happen. 

Mr. PITTS. The Chair thanks the gentleman. 

I now recognize the gentleman from Pennsylvania, Dr. Murphy, 

5 minutes for questions. 

Mr. MURPHY. Thank you. 

Welcome, Madam Secretary. 

I am going to run through a lot of statistics, but it is an important issue because, as we are trying to deal with mental health reform legislation, one of the key issues is having more psychiatric 

beds because of the IMD exclusion. We used to have 500,000 psych 

beds in this country in the 1950s, and now we have less than 

40,000. We need 100,000 because people in an acute phase of a psychotic break need a place to go besides being given a five-point tiedown in an emergency room or being sent to a jail cell or being discharged back in the streets, where they have a high risk for suicide, victimization, et cetera. 

I want to do a couple of things. The consequence of non-treatment of serious mental illness, according to NIMH even back in 

2010, was pretty staggering. They said that 40 percent of schizophrenics and about 51 percent of people with bipolar illness are unVerDate Nov 24 2008 12:25 Sep 06, 2017 Jkt 037690 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-118 CHRIS
48 

treated and a large part of the homeless, about 200,000 or so, living in abysmal conditions, have high risk for other medical problems, and 28 percent of them get their food out of the garbage. So, 

high risk for a wide range of things. 

Out of those who are incarcerated, the seriously mentally ill 

make up 16 percent of the present population, about almost 50 percent of the overall prison population of mental illness, and high 

risk for other things. But I want to go through some of these 

things, too. 

People with delusions and hallucinations, the longer that they go 

without treatment, the worse it gets. The longer a person waits for 

treatment for a psychotic episode, the longer it takes to get their 

illness under control. For bipolar disorders, the sooner a person 

gets on lithium or other treatments, the better their treatment 

goes. 

But what happens here is you have a wide range of people with 

serious mental illness with Medicaid, with SSI and SSD recipients. 

The cost of untreated mental illness is pretty amazing. The direct 

cost that I see here for treatment of a serious mental illness, about 

$55 billion; indirect cost, about $70 billion. But, when you have 

added cost for emergency room care, private medical care, these 

costs go up considerably. The cost of untreated diabetes in America is about $245 billion. 

That is $176 billion is direct medical costs. The reason that is important is many people with serious mental illness have very high 

risk for diabetes. 

Similar high numbers are also there for cardiovascular disease, 

for pulmonary disease, for infectious disease, all of which have a 

higher mortality and morbidity rate for the mentally ill. And you 

probably know that studies have said the mentally ill tend to die 

25 to 10 years sooner, not because of suicide, but because of other 

medical complications. 

So, it comes down to this point: when we have asked the CBO 

to score the issue of what would happen if we looked at more hospital beds, they, quite frankly, admitted they couldn’t do that and 

they simply took a number and the number of hospital days, psychiatric hospital days in America, and said, ‘‘Well, if we pay for 

them all, it is going to cost somewhere between $40 and $60 billion 

in 10 years. We have no idea how to do this.’’ 

We really need your help, and I actually think this would be significant savings for Medicaid and Medicare if we get this right. If 

we already know that people with serious mental illness are overusing emergency rooms versus caring for themselves, if we know 

that they have a higher incidence of those chronic illnesses I mentioned before, and we know that if they are not treated, it gets 

worse, it makes a lot of sense and dollars if we have hospital beds 

for them when they have this acute illness, stabilize them, make 

sure they have outpatient care then, instead of doing what we have 

been doing. And that is, we have traded those beds in the asylums 

for prison cells, for blankets on a subway grate, for the emergency 

room gurney, and the county morgue. 

So, as we are going through this, I wonder if you have done any 

analysis here and can maybe talk about some direction that you 

are guiding CMS, because we need solid numbers of what it is costs 

49 

to not treat and what it costs to treat. I wonder if you could comment on that. 

Secretary BURWELL. So, our estimation is that, by 2020, actually, 

just the treatment cost for behavioral health and substance abuse 

will be $280 billion. And so, that doesn’t include even a number of 

the other things that you have talked about in terms of what this 

does as a nation. We agree, and as part of our behavioral health 

proposal, the idea of getting those people into care, our estimates 

are some of those people with severe issues don’t get into care for 

3 years. 

Mr. MURPHY. Three years? 

Secretary BURWELL. And that is about access. Yes. And so, making sure that we have the ability for access when it is severe or 

even before it is severe is an important part of the proposal. 

With regard to our IMD proposal that Mr. Kennedy raised, I 

think that there are ways that we could be helpful in having conversations about how we solve those economics and how that was 

scored in terms of what we did. We would be happy to do that. 

The other thing that I just think is an important part, sort of 

putting on my old OMB hat, so that we get to the place where we 

can understand how we spend money and what savings we get, and 

that sort of thing, is actually some of the money that we have 

asked for in this behavioral health money is about going ahead and 

doing the evidence-based work, evaluation. 

I know many times people don’t want to fund evaluation, but it 

is essential for the kinds of statistics that we need to show what 

you are talking about. But, in the meantime, we can work on 

our—— 

Mr. MURPHY. Thank you. Let’s do this, because I believe we can 

save a lot of money. This committee really needs this because, I 

will tell you, there is bipartisan support that we have got to fix this 

problem to help Americans. 

Thank you very much. I yield back. 

Mr. PITTS. The Chair thanks the gentleman. 

Now I recognize the gentlelady from California, Ms. Matsui, 5 

minutes for questions. 

Ms. MATSUI. Thank you, Mr. Chairman. 

Thank you, again, for being here, Secretary Burwell. I am glad 

you are here to highlight the ways that HHS plans to continue and 

expand critical investments in health and well-being of the American people. 

The first step toward reforming our nation’s healthcare system 

has been to improve access to healthcare by ensuring that everyone 

can obtain affordable healthcare coverage. We know that the Affordable Care Act has made great strides in that goal, and we must 

continue forward. We must also continue to be forward-looking and 

take the next steps in healthcare reform. We need to continue to 

make strikes toward ensuring that everyone has access to the right 

care at the right time at the right price. 

I believe that there is great potential in the power of technology 

to help us achieve our goals of healthcare delivery system reform. 

Electronic health records can improve providers’ ability to coordinate care, and technology such as face-to-face video between providers and patients and technology that allows providers to reVerDate Nov 24 2008 12:25 Sep 06, 2017 Jkt 037690 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-118 CHRIS
50 

motely monitor patients’ chronic conditions can increase access to 

needed care, improve patients’ outcomes, and reduce cost. 

I was very pleased that this year’s budget expands the ability of 

Medicare Advantage plans to deliver services via telehealth and enables rural health clinics and Federally Qualified Health Centers 

to qualify as originating telehealth sites under Medicare. 

Secretary Burwell, I am pleased with this progress, but I think 

there is still much more we can do. Can you talk a little bit about 

the inclusion of telehealth in the budget and any other proposals 

that HHS is currently considering in this space? 

Secretary BURWELL. So, I think we think that telemedicine and 

telehealth is an important part of getting access. We have talked 

about access. Certainly, in rural communities and other communities this is going to be an important tool. 

We have taken two, as you articulated, very specific steps in our 

budget, because we thing Medicare Advantage should pay and because part of the reason that the field is not developing as much 

is because people don’t get paid. So, if you don’t pay for the ability 

to do these services—that is part of the Medicare Advantage. 

The other part is finding the facilities that will meet qualifications, so you do it in an appropriate and safe way. And that is the 

proposal that you mentioned, and it is related to HRSA and our 

Federally Qualified Health Centers. We know that these health 

centers are serving literally millions and millions of Americans 

across the country, and most people actually have some in their 

district. And so, that idea that you can use them as a base. 

The other thing that we are working on right now is—and it gets 

to Mr. Pallone raised in his earlier comments the issues of IHS, Indian Health Service. Right now, we are suffering from a very serious problem on our reservations in terms of youth suicide. In order 

to get providers in places like Pine Ridge, it is very, very difficult. 

And so, we are using our ability to actually use telemedicine as a 

means by which we can quickly get providers. Because when you 

have these suicides, making sure those children have the support 

they need, other children, is a very, very difficult thing to do quickly—— 

Ms. MATSUI. Yes. 

Secretary BURWELL [continuing]. Because we can’t get the providers to go. 

And so, while we are working on permanent solutions, these may 

become the permanent solutions because they are stable. Providers 

come and go, but the telemedicine providers we think will be in a 

place where they are going to provide more care for a longer term. 

Ms. MATSUI. Thank you very much, and I look forward to continue to work with you on these issues. 

To ensure that Americans have the ability to access the right 

care at the right time, we must work hard to achieve that goal for 

the whole person, which includes access to mental health care. One 

of the goals of the delivery system reform is increased care coordination and behavioral health integration. We must ensure that 

people have access to a full spectrum of mental health services and 

that those services are integrated into medical care and coordinated across different providers. 

51 

I believe that the Excellence in Mental Health Demonstration 

Project, which I coauthored with my colleague, Congressman 

Lance, has the potential to reform our nation’s mental health system by improving access to community-based care, and by integrating and coordinating that care across different provider types. 

Secretary Burwell, thank you for including in the budget an expansion of this demonstration project to six more states. The more 

we can test out this model, the better chance we have of finding 

out what works, so we can expand it to those who so desperately 

need a better system of mental healthcare. 

Would you like to comment further on HHS’s work on this 

project and its potential? 

Secretary BURWELL. Yes. We think it is a very important part of 

our work in terms of getting this integration and getting it quickly 

and doing it in a way that we can both get integrated care and, 

also, move towards where people are paying for value, not volume, 

in terms of getting the right payment to providers. 

I think you know that, with your help and support, we have beat 

the statutory deadlines with regard to the implementation. And 

then, we have added to that by the proposal in the budget which 

we hope will be viewed favorably. 

Ms. MATSUI. Yes. Thank you very much. 

Mr. PITTS. The Chair thanks the gentlelady. 

Now I recognize the gentleman from Illinois, Mr. Shimkus, 5 

minutes for questions. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

Secretary Burwell, thank you, and thanks for reaching out. 

We gave you a heads-up to talk about this CMS Web site thing. 

Of course, when you put something up, that means time, effort, 

and energy was placed to prepare for this to actually happen. Of 

course, it was up, it was down. 

So, the basic question is, does CMS intend to go forward with 

this experiment? 

Secretary BURWELL. In terms of the—— 

Mr. SHIMKUS. The Part D drug payment model. 

Secretary BURWELL. So, with regard to this issue, I think as you 

appropriately reflect, this was something that came out ahead. 

With regard to the issue of high-cost drugs, which is what this 

issue is about in terms of the potential effort, what we have tried 

to do—and this is to the point of getting input in December—we 

had a meeting that had both those from the pharmaceutical industry and other stakeholders to come and talk about what can we do 

that maintains—— 

Mr. SHIMKUS. No, that is different than having a proposed rule. 

So, what you did was, what CMS did by shooting this publicly is 

raise a lot of red flags. Is there going to be a rule? When is there 

going to be a rule? When are you going to notify Congress? And so, 

that is why the questions. 

Secretary BURWELL. The questions, in terms of speaking to the 

specifics of the rule, in this particular place because things are 

market-sensitive, I have to be careful in terms of it. 

Mr. SHIMKUS. The market, that is why putting it up on the Web 

site, the market sensitivity to that, too, is just as bad. 

52 

Secretary BURWELL. That was an error. It was an error, and I 

think we have very clearly said it was an error. 

Mr. SHIMKUS. But it was a premonition of future things to come. 

Secretary BURWELL. In terms of specifically speaking to what 

and when we will do regulations, I want to be careful about that 

because of the market sensitivity. But what I think is fair to say 

is, with regard to this issue, we will speak to it more in the future. 

The issue at hand is, in Medicare Part B, in terms of how the 

payments are done, they are done in ways where you, as a provider, are incentivized by a percentage. That incentive is, if you are 

going to be paid a percentage of the cost of something, then what 

we are doing is we are encouraging you to prescribe the larger-cost 

item. And that is the substance of the issue at hand and why we 

are focused on it. 

With regard to the specifics, we hope to have more soon on that 

issue. 

Mr. SHIMKUS. OK. Let me move to this issue on margins. The 

NIH states that the use of this is not appropriate means for controlling prices. So, the question is, why haven’t you all responded 

in this process involved in the most recent petitions in this space 

and provide a sense of the agency’s current thinking on margins? 

Secretary BURWELL. We plan to respond to that. I think you are 

referring to the letter that I received from a number of Members 

in terms of the most recent questions, and we will respond to that 

letter. 

Mr. SHIMKUS. Because, then the followup is just, obviously, the 

R&D and the risk and return. We need some clarity on this process. 

Secretary BURWELL. Yes, and I think it gets to the bigger issue, 

which is what I was starting. It is the question of how we, as a 

nation—the high-cost drugs and the issue of drugs, when we look 

at Medicare expense and what we saw, the increases in 2014 came 

from mainly high-cost drugs. There were some changes in other 

things, but in terms of that, and what percentage of our Medicare 

budget will be paid to drugs continues to grow. And so, what we 

need to do is find approaches and strategies that balance both innovation—because we want that R&D to get the best things—but 

create some downward pressure. Because I think whether it is people in Medicare or individuals who actually pay for their drugs in 

employer-based care, everyone is seeing the difficulty in both specialty drugs, but in also some cases non-specialty drugs. 

Mr. SHIMKUS. And my last thing, let me talk about Medicaid for 

a second. Under current law, illegal immigrants are not supposed 

to get Medicaid. However, reasonable opportunity period exists. So, 

the debate that is going on in America is, why is there a reasonable 

opportunity period for illegal immigrants when there may not be— 

in fact, there is not—for citizens who don’t have this ‘‘reasonable 

opportunity period’’ to prove that they qualify, either through longterm care or because of their finances? And should that not be afforded to citizens the same as it is being afforded to illegal immigrants right now? 

Secretary BURWELL. In terms of the affording it to immigrants, 

are you referring to within Medicaid immigrants aren’t eligible? 

53 

Mr. SHIMKUS. That is correct, but, obviously, some are getting. 

There is a period of time in the law that requires—there is a reasonable opportunity period. So, there may be coverage for them to, 

then, either prove, yes, they are legal or not. So, then, the question 

is, why it is not afforded to legal citizens based upon finances and 

long-term care? 

Secretary BURWELL. I think in Medicaid it is applied both to 

any—— 

Mr. SHIMKUS. Can you just check on that for me? 

Secretary BURWELL. I will check on that. 

Mr. SHIMKUS. I appreciate it. Thank you. 

Secretary BURWELL. Because it may be the marketplace. It may 

be the distinction. Let us come back and find out because Medicaid 

is saying that it may be the marketplace. So, let’s come back, if 

that is the question. 

Mr. PITTS. All right. The gentleman’s time has expired. 

The Chair now recognizes the gentlelady from Illinois, Ms. Schakowsky, 5 minutes for questions. 

Ms. SCHAKOWSKY. Thank you, Secretary. I want to join in the 

congratulations to you on the Affordable Care Act. While all of us 

acknowledge that there are some problems, we have made such tremendous strides, and it would be wonderful if we could sit down 

and just fix the things that we could fix, make it even better. 

I had a whole bunch of questions to ask you. But, since July 

when abortion opponents released manufactured and highly-edited 

videos, my colleagues on the other side of the aisle have been on 

a mission to undermine women’s rights. And apparently, today isn’t 

any different. 

But facts matter and not a single claim made by the other side 

has been supported by a single shred of evidence. On the contrary, 

three congressional committees found no wrongdoing in their investigations of Planned Parenthood. The chairman of one of the committees investigating Planned Parenthood, Congressman Jason 

Chaffetz, went so far as to say, ‘‘Was there any wrongdoing? I 

didn’t find any,’’ when asked about his investigation. 

I would like to submit into the record, Mr. Chairman, a news article that includes this quote. 

Mr. PITTS. Without objection, so ordered.so ordered. 

[The information was unavailable at the time of printing.] 

Ms. SCHAKOWSKY. Moreover, every state that has concluded their 

investigations into Planned Parenthood has come up empty-handed. In fact, a Texas grand jury ended up indicting two persons associated with the Center for Medical Progress, including its leader, 

David Daleiden, after their investigation uncovered illegal activity 

conducted by those individuals, not by Planned Parenthood. 

I would like to submit into the record another article detailing 

that indictment. 

Mr. PITTS. Without objection, so ordered. 

[The information was unavailable at the time of printing.] 

Ms. SCHAKOWSKY. Finally, just this week, The Washington Post 

editorial board published an article calling the so-called investigation, what I believe it is, a witch hunt. Not only do they point out 

that every state and federal entity that has investigated Planned 

Parenthood has found nothing, but the article also mentions the 

54 

troubling document requests and subpoenas issued by the chairman of the Select Panel to Attack Women’s Health—that is what 

we call it—where I serve as the ranking member. I would like to 

submit that article into the record as well. 

Mr. PITTS. Without objection, so ordered. 

[The information was unavailable at the time of printing.] 

Ms. SCHAKOWSKY. The relentless targeting of Planned Parenthood, the attack on women’s health rights, and the disregard for 

facts have to stop. Here is what I want to ask you about this: research using fetal tissue conducted by reputable universities across 

the country has greatly contributed to our understanding and 

treatment of many diseases. I know you mentioned some of this before, but can you describe the importance of fetal tissue research 

and the advances that have been made possible because of it? 

Secretary BURWELL. So, a number of the advances, as I mentioned, hepatitis A, mumps, measles vaccines, in terms of that. We 

also know that the research that is ongoing actually helps with 

issues around Down’s, macular degeneration. Most recently, we 

have seen it contribute to our ability to work on getting an Ebola 

vaccine. 

And so, this research is an important part of the research in advancing science. As I articulated before, we take very seriously the 

constraints and rules around the research at HHS and following 

those. 

Ms. SCHAKOWSKY. So, there are definitely laws in place and regulations in place that make sure that this is done. Well, could you 

describe anything about the ethics of this? 

Secretary BURWELL. Two of the things that I think are probably 

the most important is no valuable consideration. In terms of that, 

that has to do with the question of payment. And then, the second 

issue is consent. That is another issue that many states have laws 

about in terms of what people do. I think those are probably the 

two most important that people on both sides of this conversation 

have focused on. 

Ms. SCHAKOWSKY. So, you can verify that there is no ability to 

make a profit on the sale of fetal tissue? 

Secretary BURWELL. We have turned these documents over—they 

have been requested of the NIH—in terms of the attestations that 

our grantees have with regard to fulfilling the state and federal 

laws, both, in terms of saying that none of those things have occurred. That occurs when the grant is given as well as at the point 

of renewal of grants. 

Ms. SCHAKOWSKY. Thank you. 

I also wondered, in the brief time I have remaining, if you could 

just say what impact has Planned Parenthood had on access to reproductive health services and what it means for both men and 

women if those health centers were to be closed. 

Secretary BURWELL. I think it is both reproductive health services, but I actually think it is important to recognize that it is 

broader service as well. So, about 3 million women receive services 

across the country every year, it is estimated. Those services are 

issues, also, of wellness and cancer screenings and others. So, reproductive health is one element, but it is broader in terms of the 

basic healthcare that women are receiving from this organization. 

55 

Ms. SCHAKOWSKY. Thank you so much. I yield back. 

Mr. PITTS. The Chair thanks the gentlelady. 

I recognize the gentleman, Dr. Burgess, 5 minutes for questions. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Madam Secretary, I apologize that I wasn’t available to take your 

call the day you called. I appreciated you leaving the message. I 

knew we would have had a chance to talk today. 

At the outset, let me just say I have got so much stuff that I 

need to cover, and I recognize we won’t get through it all. So, I will 

submit some of this for your written attention. 

Furthermore, because of the bill that repealed the sustainable 

growth rate formula last year, and now the payment reform that 

is going on in CMS—and Dr. Conway has been very good about 

coming in and talking to me—but I really think the ongoing dialog 

between HHS and the committee and Members of Congress, I 

mean, this will live on after this administration concludes and the 

next administration starts. It is so important that we get it right 

because this could form the basis, the nidus for what payment reform really looks like, not just in Medicare, but with other payers 

as well. 

It is critical we get it right because the whole purpose in doing 

the Medicare SGR repeal was we had too many doctors that were 

legally practicing medicine. SGR pulled the joy out of the practice. 

I think we are on the right foot now with getting this fixed, but 

it does have to be done correctly. 

But a couple of things I do want to cover with you. Somebody already referenced part of the Affordable Care Act, Section 1311(h), 

the part that deals with providers. It says—let me just read it, so 

I get it correct—that ‘‘Under the quality improvement,’’ which is 

Section (h) of 1311, ‘‘beginning on January 1st, 2015, a qualified 

health plan may contract with (a) a hospital,’’ and it goes through 

the parameters; ‘‘(b) a healthcare provider, only if such provider 

implements such mechanisms to improve healthcare quality as the 

Secretary by regulation may require.’’ 

Now can you understand why this makes many of the people 

that I interact with on a daily basis, the nation’s physicians, can 

you understand why that makes them nervous? Have you begun to 

promulgate those regulations? Are those going to be new rules that 

we can anticipate? What is happening under Section 1311(h)? 

Secretary BURWELL. Is it under 1332? 

Mr. BURGESS. No, it is 1311. 

Secretary BURWELL. So, I will have to come back on 1311. 

Mr. BURGESS. OK. 

Secretary BURWELL. We have done guidance under 1332. And I’m 

sorry, 1311(h) is not one that is front-burner, but we will come 

back. I apologize. Maybe I will know it by another name—— 

Mr. BURGESS. OK. 

Secretary BURWELL [continuing]. But I am not connecting. So, we 

will come back on that. For 1332, we have issued guidance on. That 

is the one I think that many people are raising on both sides, a lot 

of conversations about that one. 

Mr. BURGESS. Last summer you addressed the National Governors Association, I believe. I heard it on C–SPAN while I was 

driving around in my district through the miracle of satellite radio. 

56 

Governor Fallin from Oklahoma asked you some questions because 

of the problem she has in Oklahoma with prescription drug difficulties. She talked about a prescription drug monitoring program that 

she has developed in Oklahoma, but, apparently, Medicaid recipients fall outside of that. I think her question to you was can something be done to mandate the same prescription drug monitoring 

requirements that she has under her state through the federal part 

of the Medicaid program. 

Secretary BURWELL. So, I will have to go back. But I think with 

regard to the mandatory using of a PDMP, a prescription drug 

monitoring program, it is occurring at the state level. All but one 

state has it in place. But it is done on a state-by-state basis in 

terms of having the physicians use it. 

What we are trying to do—and I just met with the governors on 

opioids, and the governors produced a really good document that I 

would recommend for folks to look at in terms of their recommendations around this. Many of the states I think are trying 

to advance that. What we are trying to do is share best practices. 

I called two times, have called 50 states together, so that we can 

get the right procedures that are happening in some states applied 

to the others. If there are things we can do, we welcome the opportunity to do them. I think it is a state issue, but we will doubleback on that. 

Mr. BURGESS. But her specific request to you was she needed 

help in the Medicaid program because somehow it fell outside what 

she had available to her as a governor under State law. 

I will just say, speaking as a provider, we want to do the right 

thing. We want to be able to provide our patients who are in pain, 

we want to be able to provide them pain relief. At the same time, 

we want to participate in whatever diversionary prevention programs are out there. So, this is extremely important to providers, 

I will just tell you, having been on both sides of that issue. 

Let me, in the brief time I have left, the issue of the unaccompanied minors, of course, Texas, the Lower Rio Grande Valley sector, I have been down there several times. I met with DHS. I met 

with your people, with ACF and ORR. I will tell you I am disturbed. 

I am also on the Helsinki Commission. We had a hearing last fall 

on the Helsinki Commission where we heard from two victims of 

child trafficking. Both of these women were trafficked through family members, by family members, had come into the country illegally. Granted, OK, they broke the law. But they had very compelling testimony of why was no one looking out for us. They were delivered to a family, which subsequently, then, put them into a sex 

trafficking situation, and there was no respite, no help for these individuals. 

We have had so many people in the last 2 years, so many unaccompanied minors come across. They produce a telephone number 

from goodness knows where. This is an uncle. This is a brother. 

Look. Many, many years ago, I went through a child adoption 

process. I know how intrusive and exhaustive that was. We are just 

sending these people off to a telephone number that they happened 

to produce out of their back pocket when they are picked up out 

57 

of the river. And we wonder why now there are problems that are 

surfacing. 

Again, I ask for your help in interacting with your agency, ACF 

and the Office of Refugee Relocation. We have got to do a better 

job. Yes, I get the security side and we have got to do a better job 

on the border. But, if we also have a role for HHS with dealing 

with people who end up in the country, we have got to do a better 

job there. So, I do welcome the opportunity to talk to you and the 

agency more about that in the future. 

Secretary BURWELL. Thank you. We take it very seriously. We 

want those children to be safe. We have made a number of 

changes. We have ideas from PSI on the Senate side. We will be 

working to implement those. But, if there are other things we can 

do—we have put in an 800 number. The background checks have 

been expanded. There are a number of things that we are doing, 

followup calls, and that sort of thing. If there are other things that 

you see, having been through that same process you described, 

making sure you do everything you can to have children with safe 

people is something we think is extremely important. 

Mr. PITTS. The gentleman’s time has expired. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Mr. PITTS. The Chair now recognizes Judge Butterfield, 5 minutes for questions. 

Mr. BUTTERFIELD. Thank you very much, Mr. Chairman. 

Thank you, Secretary Burwell, for coming today, and thank you 

for your testimony. I was present when you testified, a couple of 

hours ago I guess it was. But thank you for coming and thank you 

for all the work that you do, and especially your willingness to embrace the people of Flint, Michigan. You and I had a brief conversation about that last week, and I want to thank you publicly for 

your willingness to engage in that very, very sad situation. 

Mr. Chairman, I want to go back to the issue of the Affordable 

Care Act. I know that is a subject that some on this committee 

have talked about endlessly. But I want to go back to it from my 

perspective and to continue to say that the ACA has made a positive difference for more than 18,000 constituents in eastern North 

Carolina, which is where I am from, 18,000 constituents. 

More than 18 million Americans who now have quality, affordable health insurance, that is, by any definition, progress. But 

many Americans, including 700,000 in North Carolina, are still 

missing out on the benefits of the ACA because our state governments have refused to expand the Medicaid program. It is absolutely a shame, and I will continue to say it every chance I get, it 

is a shame that 19 states in the United States have failed to expand Medicaid. They continue to block people from accessing 

healthcare funding which they have paid taxes for and rightfully 

deserve. 

I applaud the President’s efforts to ensure that all states, regardless of when they decide to expand Medicaid, are eligible for 100- 

percent federal support for Medicaid expansion during the first 

three years of participation. Yesterday Congress Green and other 

Democratic members of this committee and I introduced legislation 

to codify the President’s vision to incentivize Medicaid expansion. 

58 

I also appreciate the President’s efforts to combat health disparities for African-Americans and other subgroups in the 2017 budget 

request. The prevalence of health disparities is alarming and can 

be seen in all areas of health from access to care to susceptibility 

to illness, to the lack of diversity in the healthcare workforce and 

in clinical trials. The 2017 budget includes meaningful investments 

which can help improve access to care for underserved communities, develop new cures for diseases which disproportionately affect African-Americans. 

And so, as I close, Mr. Chairman, I simply want to ask the Secretary one, perhaps two, questions. At what point, Ms. Burwell, 

under current law will states that choose to expand Medicaid no 

longer be able to receive 100-percent federal support for their expansion? At what point do they lose it? 

Secretary BURWELL. At this point they would not start with 100 

percent in terms of next year. And so, that is why we have proposed the legislation, because I think we think it is important for 

any state, whenever they come in, to have that benefit of the 100 

percent. 

Mr. BUTTERFIELD. And so, it is your position and the President’s 

position that this would help encourage the states to expand their 

program? 

Secretary BURWELL. We do. 

Mr. BUTTERFIELD. You call it incentivizes the states to do it? 

Secretary BURWELL. We want to encourage the states. As I said 

many times in that same session that you heard, probably you 

heard me say to the governors, ‘‘I want to work with you to do it 

the way that works for your state.’’ And that means a conversation 

one-on-one with every state, but we are willing to do that. This is 

that important. I am personally engaged with every governor who 

wants to have that conversation. 

Mr. BUTTERFIELD. And I know you are, and I thank you for that. 

I yield back. 

Mr. PITTS. The Chair thanks the gentleman. 

I now recognize the gentleman from New Jersey, Mr. Lance, five 

minutes for questions. 

Mr. LANCE. Thank you, Mr. Chairman. 

Secretary, last August the Court of Appeals here for the District 

of Columbia Circuit issued a decision interpreting the Federal Vacancies Reform Act that would prohibit various acting federal officers from serving in positions for which they had been nominated 

but not yet confirmed by the Senate of the United States. 

The Department of Justice filed a petition seeking further review 

by the entire D.C. Circuit, and that was denied. A Washington Post 

article recently covered the story and quoted the Justice Department in saying that the Circuit Court decision here in the District 

of Columbia ‘‘casts a legal cloud over a number of acting government officials,’’ and I think it is in various departments, but your 

Department was cited. 

Do you know, Secretary, who is in an acting position in your Department subject to Senate confirmation who has not yet been confirmed by the Senate? 

Secretary BURWELL. I do. I do because my Deputy Secretary for 

the Department—and I think you all know we are having a budget 

59 

hearing. Right now, HHS is 25 percent of the federal budget. At 

HHS, it is over $1 trillion that we are managing. There is only one 

Deputy. At some departments, other departments, there are Under 

Secretaries. These are statutory constraints in terms of we have 

one Deputy. 

The Deputy that we have that we have nominated, we cannot 

find in our records or in the records of the administration anyone 

who has not been confirmed or had a hearing for that—— 

Mr. LANCE. Is that the only official in your Department who is 

before the Senate? 

Secretary BURWELL. No, no, no, no. 

Mr. LANCE. How many are there? How many are there, Secretary? 

Secretary BURWELL. I think it is actually important, though. This 

is an important part of the process of making sure that we can 

do—you are an important oversight committee. My ability to run 

the Department well is about my ability to actually have people in 

place. 

The second person is Dr. Karen DeSalvo. Dr. DeSalvo has bipartisan support, has been voted out of committee, and it has a hold 

and hasn’t been able to go to the floor because she has a hold. This 

is an ongoing—— 

Mr. LANCE. So, there are two officials in your Department? 

Secretary BURWELL. This has been ongoing for an extended period of time. We are working with our committee Chairs. We are 

working with others on both sides of the aisle. 

But the question of our ability to—— 

Mr. LANCE. No, I want to know how many there are. Are there 

two? Is that the answer to my question? 

Secretary BURWELL. That is the answer to the question who have 

been awaiting Senate confirmation. 

Mr. LANCE. And has your Department reviewed whether or not 

this violates the Vacancies Reform Act, as has been suggested by 

officials in the administration? 

Secretary BURWELL. We work with the Department of Justice to 

make sure that we are in compliance, and we work with them. The 

Department—— 

Mr. LANCE. And do you believe you are currently in compliance? 

Secretary BURWELL. We believe that our Secretaries, as they are 

in their positions, are appropriately acting, and work with the Department of Justice in terms of what will be the appropriate next 

step. 

But I think it actually is important, though. As a government, 

this question of our ability to function, and the fact that not only 

that, and I am very thankful and appreciative that today I hope 

while we are in this hearing that Rob Califf will be confirmed for 

the FDA, and thanks for the bipartisan support on that one. But 

there are others as well, in terms of two times we nominated a 

head of—— 

Mr. LANCE. I have concerns about the fact that I think that all 

agencies have to follow the Federal Vacancies Reform Act. And if 

a person has not received confirmation, there may be, under the 

Federal Vacancies Reform Act, a cloud over that person’s continuing in the office for which he or she has been nominated, not 

60 

yet confirmed. Obviously, the Senate is an equal partner in the 

process, confirmation, and initial appointment by the President. I 

would hope that your Department would review that. 

Regarding medical device regulation, when are we going to have 

regulations regarding medical gas regulation? I am very concerned 

about that issue. The lack of regulations and lack of an approved 

label for medical gases has created confusion for both the FDA and 

the regulated community. I believe this has been going on for four 

years. We would like to work with your Department. Might you be 

able to discuss with us when the FDA could meet the statutory 

deadline for regulations that are supposed to be in place by July 

of this year? 

Secretary BURWELL. I look forward to following up on specifically 

where we are in terms of that specific regulation. 

Mr. LANCE. Very good. I think regulations have to occur by July, 

and I am concerned that—— 

Secretary BURWELL. And it is medical device? 

Mr. LANCE. Medical gas regulation. 

Secretary BURWELL. Medical gas? 

Mr. LANCE. Yes. 

Secretary BURWELL. Thank you. Thank you. 

Mr. LANCE. Thank you. I will yield back 12 seconds. 

Mr. PITTS. The Chair thanks the gentleman. 

Now I recognize the gentleman from New York, Mr. Engel, five 

minutes for questions. 

Mr. ENGEL. Thank you very much, Mr. Chairman. 

Madam Secretary, welcome. I, too, received a call from, which I 

appreciated very much. I think it is just typical of your thoroughness and competency and the job you have done since you were appointed Secretary. And besides, my mother’s name was Sylvia, so 

I had to like you from the beginning. 

Secretary BURWELL. Thank you. 

Mr. ENGEL. I want to just piggyback at first on a comment that 

Mr. Butterfield made because it is something that has really been 

bothering me. I know that a lot of our friends on the other side of 

the aisle don’t like the Affordable Care Act, and we voted 62 or 63 

times to repeal it, which I think is a waste of time. 

Any major bills of this substance in the past have always been 

tweaked once the bill comes out and you see what works, what 

doesn’t work. Nothing is going to work 100 percent. And so, if a bill 

is not doing everything we wanted it to do, we could make some 

legislative changes, and that is really the way to do it, not try to 

repeal it. But our friends on the other side of the aisle have refused 

to do that. 

What also is frustrating is, again, when governors are refusing 

to expand the Medicaid program. My mother Sylvia used to have 

an expression, don’t cut off your nose to spite your face. And that 

is exactly what the Republican governors are doing that have refused to expand the Medicaid program to really help the citizens 

of their states. 

So, I am wondering if you could comment on anything I have just 

said. 

Secretary BURWELL. So, you know, as we have spoken about a 

number of times in this hearing, I think it is so important to make 

61 

that progress in terms of the coverage, in terms of the benefits that 

we can see through expansion. We see that both for individuals, 

and I have had the chance to meet those individuals as I have traveled across the country, in terms of what it means for them, whether it was someone being diagnosed with cancer and actually catching the cancer and being able to treat it, in terms of an extreme 

situation, or just the security of knowing that they have the coverage and can do prevention as well. 

But I think the economics are also equally important. That is 

about the individual, and that is important. But the economic 

issues in terms of hospital closures, in terms of uncompensated 

care, in terms of people’s ability to pay their bills, are all things 

that are important consequences that we believe other states are 

already seeing the benefits from. We would like to see the rest of 

the states and, as I have said before, we are willing to work with 

any state on the approach that they think is right with them. We 

just want to make sure we meet the standards that you all have 

given to us statutorily, which is making sure that affordable care 

is available. 

Mr. ENGEL. Thank you. 

I would like to ask you a few questions involving Puerto Rico because you had mentioned Puerto Rico before. You mentioned it in 

your submitted testimony. Could you please describe the current 

economic situation there and how it has negatively affected the 

healthcare system there? 

Secretary BURWELL. The economic situation is dire. Certainly, 

my colleague at the Treasury Department, Mr. Lew, has taken the 

lead in terms of both our talking about that issue as well as working with the Congress on fundamental issues that we think will 

make a difference to getting to a different place economically. 

But the healthcare issues are very closely intertwined. And so, 

the issues of legislation to help in terms of a way forward on the 

economics are very intertwined. The success of that is intertwined 

with healthcare. It is because, traditionally, payments have not 

been equitable, and we talked about that, touched on that a little 

bit earlier in one of the questions in terms of the payments on the 

Medicaid side. 

What that does is it leads to a number of things. Obviously, it 

leads to coverage issues in terms of what kind of coverage people 

get. It also leads to provider issues because providers aren’t paid. 

What we have proposed in our budget is a proposal that over 

time would bring the payments in Medicaid to a more equitable 

space and at the same time require reforms in terms of meeting 

certain standards of the performance of the Medicaid program. So, 

we think that we have a proposal before the Congress that can 

complement in an extremely important way. 

I think right now with Zika, the numbers continue to rise. Today, 

this morning I got my briefing, 111 cases in terms of the U.S. In 

Puerto Rico right now, they are being spread by the mosquito 

there. 

We know the penetration of both dengue and Chikungunya in 

Puerto Rico. And so, this health issue, if those children, if pregnant 

women get Zika and have children with microcephaly, the cost is 

between a million and $10 million per child. 

62 

Mr. ENGEL. So, it is really fair to say the situation in Puerto Rico 

is both an economic crisis and a healthcare crisis? That is what you 

are—— 

Secretary BURWELL. It is fair. 

Mr. ENGEL. And the President has laid out what I think is a very 

reasonable approach to addressing the issues at hand, and I hope 

this committee will give the President’s proposal serious consideration. 

I want to ask you about your testimony. You described several 

steps the President has proposed to address the Puerto Rican crisis. Can you elaborate on his plan and what it does and how it 

aims to solve the problem? 

Secretary BURWELL. So, I think the changes in Medicaid are the 

place where we have the most important proposal. It would do the 

changes over a period of time in terms of that payment. It would 

change the cap as well as change the payment matches over the 

period time, at the same time that reforms are required. 

Mr. ENGEL. And then, my last question is, wouldn’t you agree 

that Puerto Rico is a prime example of the tremendous risk we 

would face if Medicaid moved to a block grant system, because of 

Puerto Rico’s financing design, it is really not equipped with the 

flexibility it needs to adapt to financial downturns? 

Secretary BURWELL. Yes, which is why you see monies in the 

supplemental proposal that you will be reviewing from us. Yes is 

the answer, and that is part of why you will see funding in the supplemental, because now they have a crisis in Zika. 

Mr. ENGEL. Thank you. 

Thank you, Mr. Chairman. 

Mr. PITTS. The Chair thanks the gentleman. 

I recognize the gentleman from Virginia, Mr. Griffith, 5 minutes 

for questions. 

Mr. GRIFFITH. Thank you very much, Mr. Chairman. 

Thank you, Madam Secretary. 

This morning a new GAO, Government Accountability Office, report released found that in 2014 CMS did not resolve inconsistencies related to incarceration status for about 22,000 applications, 

with $68 million in associated subsidies in the Federal Exchange. 

Some of these areas appear to have continued into 2015 and, with 

unresolved inconsistencies, CMS is at risk of granting eligibility to 

and making subsidy payments on behalf of individuals who are ineligible to enroll in subsidized coverage. 

CMS told the Government Accountability Office ‘‘The agency 

elected to rely on applicant attestations on incarceration status.’’ In 

other words, CMS is literally taking criminals at their word and relying on them to tell the truth. 

I want to give you an opportunity, if you are familiar with that. 

But, based on that situation, you can understand, I would suspect, 

why Americans often don’t trust the agencies to not cut corners on 

administering the ACA, when they are not even going through and 

doing the due diligence, according to the Government Accountability Office, on making sure that folks who are incarcerated 

aren’t receiving subsidies. 

Of course, I am concerned about this as a 28-year criminal defense attorney before I came to Congress. A lot of these folks are 

63 

not known for telling the truth, and you all are relying on just a 

statement from them that they are not really in prison. 

Secretary BURWELL. So, with regard to this report, I think that 

this is a continuation of a previous study. And I apologize, but—— 

Mr. GRIFFITH. Yes, ma’am. 

Secretary BURWELL [continuing]. I think I have seen preliminary. 

In terms of the recommendations in this in the preliminary, we 

fully agree with those. 

But let me speak to the other. With regard to the issue of making sure the right people are getting any of the taxpayer subsidiaries, we take it very seriously. Last year alone, 1.6 million people 

were taken off or had chances because we didn’t have the information that we needed. That was done within a window, the statutory 

window, that we have given, which is about between 90 and 95 

days, and we continued. So, 1.6 million people in terms of aggressively working. 

When the GAO report originally came out—and I think you know 

it was a secret shopper. So, the actions that were taken by these 

individuals, if you weren’t the GAO, would have been criminal offenses that, as you know—— 

Mr. GRIFFITH. Yes, ma’am. 

Secretary BURWELL. And I wasn’t asking about that. My concern 

is—and, look, I do understand, so I don’t want anybody out there 

watching on TV to think that you should have already read this report, because I had an opportunity to read it while you were answering everybody else’s questions. 

[Laughter.] 

But it is of concern that it doesn’t appear that some of the folks 

who work for you are taking it seriously when the folks who show 

up on the PUPS list, the Prisoner Update Processing System, you 

all have decided not to use that in the case of ObamaCare, but you 

are using it in the cases that relate to Medicare. You are using it 

for other purposes, but they decided not to use it in this case, and 

then, they are just relying on somebody’s statement that they are 

not incarcerated. Each individual is different. Some may not be in 

there for a crime of moral turpitude but for some other crime, but, 

as a general rule, a lot of these folks are in jail because they lied 

about something in the first place or took money when they weren’t 

supposed to. And we are just going to rely on their word? 

I would ask you to check into it. I know you haven’t had a chance 

to read it, so I am not saying that you should have a ready-made 

answer. But I would say that you need to read it and you need to 

let us know, and we will do it as a followup, if you would. When 

do you suspect or when do you expect these problems to be fixed? 

Again, I am not expecting an answer this morning, but I would like 

to get an answer at some point in time. 

Secretary BURWELL. I would be happy to. Aggressively, as issues 

are raised, we want to take care of them. 

Mr. GRIFFITH. I do appreciate that. 

I had some other questions which I will have to submit. I see my 

time has run out and I don’t even have time to finish the question, 

much less get an answer. We will submit those to you afterwards 

as well, but they relate to testimony previously in front of the committee relating to not giving the ability for states to have work proVerDate Nov 24 2008 12:25 Sep 06, 2017 Jkt 037690 PO 00000 Frm 00069 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 114\114-118 CHRIS
64 

grams as a part of the Medicaid and CHIP services. And we will 

follow up with that afterwards because—— 

Secretary BURWELL. Thank you. 

Mr. GRIFFITH [continuing]. Like I said, it is a long question, and 

I don’t even have time to get through it. 

But I do appreciate your being here today and always being willing to answer our questions. 

Secretary BURWELL. Thank you. 

Mr. GRIFFITH. And I yield back, Mr. Chairman. 

Mr. PITTS. The Chair thanks the gentleman. 

Now I recognize the gentleman from California, Mr. Cardenas, 5 

minutes for questions. 

Mr. CARDENAS. Thank you very much, Mr. Chairman. 

In this committee we have been discussing the consequences of 

not properly investing in mental healthcare. The problem of insufficient mental healthcare shows up in our nation’s jails more than 

anywhere else in the country, particularly jails where kids are 

locked up. Federal law does not allow kids enrolled in Medicaid to 

receive federal funds while in detention. But nowhere in the law 

does it say that these kids have to be kicked off of Medicaid. Yet, 

that is exactly what states are doing around the country. For them, 

permanently terminating Medicaid coverage is easier than suspending it temporarily. That is the states. 

When kids who already were on Medicaid are allowed to resume 

their needed access to mental healthcare services once they return 

home, the government saves millions upon millions of dollars each 

year when crimes go down because these children have access to 

their mental healthcare instead of having to wait months and 

months and months to get back into the system. 

Madam Secretary, can you talk about the Department’s work to 

ensure that kids who are on Medicaid can stay on the program 

once they are back on the streets? 

Secretary BURWELL. With regard to this issue, I think it is related to our broader criminal justice work and our second-chance 

work that the President and the Attorney General are both very focused on. We are working hand-in-glove with the Attorney General 

and the Department of Justice to make sure that, both with regard 

to Medicaid or the marketplace, that we both meet the standards 

that Mr. Griffith has talked about, but, as well, making sure that 

those who come out have the opportunities that they need with regard to having healthcare. And so, it is across the board that we 

are working with the Department of Justice on it. 

Mr. CARDENAS. Thank you. 

Access to reproductive healthcare for women and families is very, 

very important. I am glad to see that the President understands 

the value of critical reproductive health programs like Title X and 

the Teen Pregnancy Prevention Program and Personal Responsibility Education Program. It reflects in his budget proposal as well. 

I am glad to see that. 

During a time where we continue to see attacks on the state 

level to restrict access to reproductive health, national investments 

in family planning, cancer screens, STD testing, and sex education 

are more important now than ever to keep our families and communities healthy and safe. Latinas, in particular, are more likely 

65 

to experience higher rates of reproductive cancers, unintended 

pregnancy, and face added cost and language barriers to getting 

healthcare. 

Secretary Burwell, could you talk about why it is important to 

invest in women’s health? Can you share any information about efforts to target hard-to-reach populations? 

Secretary BURWELL. So, the importance of the preventative services, I think everyone knows what difference they can make, 

whether it is in the whole area of reproductive health, but women’s 

health in general. Mothers often, they are the last to go in terms 

of taking care of those preventative services. 

And so, there are a number of things that I would highlight. One 

is the importance that for all folks, because of the Affordable Care 

Act, that there are free preventative services without co-pays. So 

many people don’t realize that and don’t use those services, whether that is everything from your flu shot to some pre-cancer 

screenings. 

I think particularly with hard-to-reach populations, one of the 

most important things that has happened over the last years is 

that the drop in uninsured in the Latino population is 4 million. 

So, those 4 million people now have access to quality, affordable 

care, and that is step one. 

Step two means, though, we have to take that coverage and 

make it actually care. They have the insurance, and so, doing that. 

And so, some of the programs that you mentioned and some of that 

work is in CDC in terms of the Center for Disease Control and Prevention. 

But we are working to make sure we are reaching those communities. We have something called Coverage to Care, which is an effort to make sure people who get that coverage understand how to 

access a primary care physician, understand how to go about using 

the care, because many people it may be for the first time they 

have it and they don’t know. So, it is about the insurance, but it 

is also about the care and, then, it is about the public health issues 

that we are supporting and promoting. 

A Million Hearts is another one where there is a disproportionate 

number in the Latino community who have heart disease. The Million Hearts efforts is specifically targeted toward heart disease. 

Mr. CARDENAS. Thank you for explaining what we are doing and 

what we should be doing more of. So, thank you. 

I was one of those uninsured for a portion of my life when I was 

a child. 

One way to make sure that we improve ourselves as a country 

is we need to pass the EACH Woman Act and Women’s Health Protection Act, two proactive bills that can turn the tide in the right 

direction. So, once again, thank you for doing what you can with 

the resources you have. 

One of my colleagues mentioned what we are doing on ORR. My 

question is, what can Congress do and are we providing you the 

services necessary to do the job that you need to do? 

Secretary BURWELL. We have a budget proposal with resources 

that we do need. So, I hope that will receive consideration. 

Mr. CARDENAS. Thank you, Mr. Chairman. 

Mr. PITTS. The Chair thanks the gentleman. 

66 

I now recognize the gentleman from Florida, Mr. Bilirakis, 5 

minutes for questions. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. I appreciate it. 

Thank you, Madam Secretary, for coming. And also, thank you 

for reaching out to us prior to the hearing as well. 

I have a couple of questions. CMS recently released a final rule 

for the Medicaid-covered outpatient drugs, but also requested comments on the definition of line extension drugs. As you know, there 

is a strong Member interest in ensuring that any further Medicaid 

drug regulations for line extensions specifically exempt abuse-deterrent formulations of drugs such as opioids to incentivize continued development of abuse-deterrent formulations. We believe CMS 

can do this under current statute. However, the budget includes a 

proposal to tweak the statute in this case. Is the budget proposal 

intended to clarify the law or is it requested because CMS does not 

have the authority to clarify this administratively? 

Secretary BURWELL. We would like statutory help with this. 

Mr. BILIRAKIS. OK. Well, that is the answer I wanted to hear because we can do that. 

Secretary BURWELL. We need that. We need the help. I think 

across the board this question of how we treat abuse-deterrent 

drugs, the recent changes we just announced at FDA for how we 

are going to review opioids, new opioids coming to market, that we 

will actually consider the issues of addiction as part of the decision, 

not just is this drug safe and effective for an individual. These are 

important things, and I think they weren’t necessarily always considered. 

Where we have administrative authority, we are going to use it. 

Where we believe we need some help, we are asking. 

Mr. BILIRAKIS. Very good. Thank you. Thank you. 

The next question, in the December of 2015 OIG report, the IG 

Office stated that CMS could not ensure that the advanced premium tax credit payments made to qualified health plan issuers 

were only for enrollees who had paid their premiums. CMS did not 

have a process in place to ensure that the premium tax credit payments were made only for enrollees who had paid their monthly 

premiums and was relying on insurance companies to provide that 

information. Does CMS now have policies and procedures in place 

to calculate premium tax credit payments on an individual level 

without relying on insurers’ attestation and assurances? 

Secretary BURWELL. Yes. We historically were using the processes we used for Medicare in terms of payments in that space, but 

we actually have gone ahead of that, and starting in January, it 

is on an individual basis. What that actually means—and you can 

see that it is happening—is the number—— 

Mr. BILIRAKIS. This past January? 

Secretary BURWELL. This January. 

Mr. BILIRAKIS. OK. 

Secretary BURWELL. So, in place and we have seen the results in 

that the number of those enrolled in the marketplace actually is 

lower because we had more people come out. Because we are reconciling with the issuers on a real-time basis, on a policy basis, instead of an aggregate basis, is the answer to your question. 

Mr. BILIRAKIS. Very good. Thank you. 

67 

The last question, on or about February 5th, CMS posted contractor instructions for its new demonstration that would test 

changes to the way Medicare reimburses Part B drugs—I know 

that Representative Shimkus touched on this—which currently 

uses the average sales price of the drug plus 6 percent. Those instructions appear to have been taken down at the moment. 

What additional payment changes is CMS considering beyond 

the modifications to the ASP reimbursement rate? How will CMS 

select the drugs to which these additional payment modifications 

will apply? 

Secretary BURWELL. So, with regard to that specific issue, it was 

an error. It went up. We will be coming out with followup on that 

soon. 

I think probably the most important issue that CMS is considering in this space is actually in the budget. So, it requires statutory change. It is the issue of negotiating authority for the Department with regard to specialty and high-cost drugs in terms of ability for the Department to negotiate. And so, that is the most important one that, when you ask what are we considering, we have a 

budget proposal. Obviously, now that is with the Congress in terms 

of its consideration. 

Mr. BILIRAKIS. All right. Thank you very much. I appreciate it, 

Madam Secretary. 

I yield back, Mr. Chairman. Thank you. 

Mr. PITTS. The Chair thanks the gentleman. 

I now recognize the gentleman from Indiana, Dr. Bucshon, 5 

minutes for questions. 

Mr. BUCSHON. Thank you, Mr. Chairman. 

Thank you, Secretary Burwell, for being here. 

The Affordable Care Act has resulted in about 30 million people 

still uninsured. Many, in fact, the majority of people gaining insurance are through Medicaid expansion, which, as a provider—I was 

a heart surgeon before—I can tell you it doesn’t guarantee access 

to the healthcare system, other than through the emergency room. 

On the exchanges, deductibles are increasing, premiums are up, 

insurance companies are losing billions of dollars, and there are reports that the administration, as was previously outlined by the 

chairman, is illegally making payments to prop up the exchanges. 

Non-exchange policy costs are skyrocketing, pricing businesses 

out of the marketplace. That is not my opinion. Just ask any business that is dealing with this. 

The 30-hour workweek requirements are hurting school districts, 

county governments, local governments on fixed budgets, resulting 

in loss of wages for the employees. 

The Meaningful Use Program, which, by the way, I am a supporter of electronic medical records—we had them in our practice 

since 2005—but the Meaningful Use Program, in my view, clearly 

needs pause because there are significant problems with it. The 

Doctor Caucus gave this opinion also to Dr. DeSalvo a couple of 

weeks ago. 

And the worst problem is the cost to healthcare is the biggest 

issue, in my view, and there is no significant effect on the cost of 

healthcare. Now that is true that payments through Medicare may 

68 

be globally down, but the individual costs for services actually continue to rise. 

I am going to focus my question, though, on the Healthy Indiana 

Plan 2.0, which is, as you know, Indiana’s answer to covering lowincome citizens, which is a program that is working. Last month 

Congresswoman Susan Brooks, Senator Dan Coats, and I sent you 

a letter expressing our concern about CMS’s decision to use what 

we consider a biased contractor to conduct ‘‘independent review’’ of 

Indiana’s Healthy Indian Plan 2.0. 

I know Governor Pence has been vocal about his concern with 

this second federal review led by a hired contractor that has a clear 

and documented bias against plans like Healthy Indian Plan 2.0. 

Mr. Chairman, I have a letter from Senator Coats, myself, and 

Susan Brooks that I would like to submit for the record. 

Mr. PITTS. Without objection, so ordered. 

[The information was unavailable at the time of printing.] 

Mr. BUCSHON. I just wanted to reiterate that I think it is the 

wrong approach since the contractor is previously on the record 

being critical of Indiana’s model and now is supposedly going to objectively help evaluate it. 

So, I am sure as you know, under the Federal Acquisition Rules, 

there are established organizational conflict-of-interest rules. In the 

interest of real objectivity, would you commit to sharing CMS’s 

analysis of the contractor’s adherence to those standards with the 

committee and myself? 

Secretary BURWELL. Congressman, I think I have responded to 

that. 

Mr. BUCSHON. You have and I have read that letter. I don’t have 

it on me, but I have read your letter. 

Secretary BURWELL. And in that response, I articulate that the 

individual that is mentioned in terms of the issue of conflict is not 

an individual that is part of the review with regard to that. 

With regard to the broader—— 

Mr. BUCSHON. Well, that is different than our understanding, the 

Governor’s, myself, our Senator, and a couple members of the Energy and Commerce Committee. 

Secretary BURWELL. Then, we should go back. Our understanding of the individual that was mentioned in the communications that we have had, it may be—— 

Mr. BUCSHON. Well, it is the Urban Institute. 

Secretary BURWELL. There is the issue of—— 

Mr. BUCSHON. So, how can CMS ensure the study is unbiased, 

given the Urban Institute’s documented institutional bias against 

consumer-directed healthcare plans in Medicaid? 

Secretary BURWELL. First, we run our usual contracting process, 

which you were referring to, in terms of that it is a separate contracting process, and Urban Institute does this type of work and 

has on a non-partisan basis for years. 

The question of the bias was in reference to an individual that 

is not affiliated with this piece of work. And so, maybe we have a 

misunderstanding. 

Mr. BUCSHON. Maybe we are at crosshairs there—— 

Secretary BURWELL. Yes. 

Mr. BUCSHON [continuing]. But the Governor and myself—— 

69 

Secretary BURWELL. Yes. 

Mr. BUCSHON [continuing]. Congresswoman Brooks, and Senator 

Coats didn’t quite see it that way. 

Secretary BURWELL. So, let’s go back and try to understand 

whether we are talking about a different individual—— 

Mr. BUCSHON. OK. I appreciate that. 

Secretary BURWELL [continuing]. Or making sure we understand 

fully the—— 

Mr. BUCSHON. Yes. Can you, then, submit to my office a further 

clarification of that? 

Secretary BURWELL. Sure. Absolutely. 

Mr. BUCSHON. I would appreciate that. 

RAC audits are an issue, and I know that was brought up. Both 

the contractors and in a couple of different areas, hospitals have 

millions of dollars sitting on the sidelines waiting after these audits 

saying they have improperly been paid through the Medicare program. And I have a list of the things that are supposed to be happening with the RAC audits to make sure they are accurate and 

fair, but I can just tell you that, from a practical standpoint, this 

is a big problem and they need to be reviewed further whether or 

not they are in compliance on an individual case-by-case basis. 

For example, there is an issue with Herceptin, which you probably know about, right? I can tell you my wife continues to practice 

anesthesia, and this is about multi-patient vials, so to speak. And 

I will submit that question for the record because I am behind. But 

the point is, in practicality, even though it says that you can use 

one vial for multiple patients, from a practical standpoint for safety 

reasons, liability reasons, that is difficult to do. So, I will submit 

that question, but that needs to be reviewed. 

Secretary BURWELL. And I think we have reached out to make 

sure that we get the information from your staff on those specific 

examples. 

Mr. BUCSHON. You have, yes. Thank you. 

I yield back. 

Mr. PITTS. The Chair thanks the gentleman. 

That concludes the questions of the members present. We have 

time for one followup on each side. The Chair recognizes Ms. Castor for a followup on this. 

Ms. CASTOR. Thank you, Mr. Chairman. And, Mr. Chairman, I 

want to compliment you for having this hearing today because I 

also serve on the Budget Committee. Unlike the Budget Committee, where there was a break with decades of tradition in not 

inviting the OMB Director to come before the committee to discuss 

the administration’s budget, you understand the importance of having this dialog and the ability to have members on both sides of 

aisle ask questions. So, thank you very much for holding the hearing today. 

And it is really too bad that the Budget Committee did not have 

that opportunity because, in order to tackle the long-term debt that 

faces this country, it is going to require bipartisan solutions. The 

CBO, the Congressional Budget Office, projects that the debt increase over the 10-year window will mainly be attributable to the 

aging of the population and its connected healthcare costs and 

Medicare and skilled nursing. 

70 

The number of people who are at least 65 will increase by 37 percent by 2026, from 48 million Americans to 66 million Americans. 

That is going to call on Medicare and skilled nursing like never before. So, we have got to work together to tackle these issues. 

And the problem with the Republican budget that has come out 

of the Budget Committee and, then, passed on the floor in the past 

years is that those fundamental overhauls such as block-granting 

Medicaid or turning Medicare into a voucher simply shifts the cost 

to Medicare beneficiaries, families, and states. And those are overly-simplistic solutions that are not going to work for American families, and it is not going to give us the opportunity to make the reforms in Medicare that are necessary to tackle the long-term debt. 

So, this is difficult. This requires bipartisan cooperation. There 

is no silver bullet. 

Madam Secretary, I would like to ask you here at the end of this 

hearing and after a few years in your job and as OMB Director, 

what gives you hope in reform? Is it prescription drug reform, the 

Accountable Care Organizations, payment reform? What do you 

recommend to us to work on in a bipartisan way to tackle the 

tough long-term debt issues driven by the aging American population? 

Secretary BURWELL. So, I think that what gives me energy and 

gives me hope is that I believe we are at a transformative time and 

what was passed was actually in terms of what you all passed and 

gave to us to implement, is tighter constraints than we even had 

before in terms of the rules and the changes, and how we will push 

through change. And so, we are working very hard to implement 

it. And so, those types of things are extremely important. 

But what is happening right now, whether it is in the private 

sector or the public sector, whether it is the issuers and insurers 

or private companies, large self-employed companies, they are 

ready to make the change, because we all can’t afford healthcare 

at these prices. And so, it is not just about Medicare. It is not just 

about the marketplace. 

I was thrilled to hear the commitment on delivery system reform, 

because for me that is probably the most important thing I can do 

in the next 10 to 11 months—it is actually under 11 months now— 

is make sure that we put in place the changes. Some of that has 

to do, we talked about the data and the data blocking and getting 

the help we need there. Some of it has to do with the support for 

the expansion of ACOs, the bundling, some of these other issues, 

understanding where we can make it better in terms of some of the 

oncology stuff we heard today. But that working in partnership is 

what I believe will make the long-term difference. 

And the other thing I think is extremely important, that this is 

owned by the Congress as well as the Executive Branch, because 

I think that will also make sure it is done in a way that is consumer-friendly and consumer-focused, as well as getting the change 

throughout the country. And it is not just about CMS or providers 

or insurers, but we can make it a broad change for the country. 

So, I am optimistic. This is hard, but I believe we are taking 

some of the steps that we know are going to get us there. 

Ms. CASTOR. Thank you very much. 

Mr. PITTS. The gentlelady yields back. 

71 

Madam Secretary, as we have discussed on the phone, in hearings, several occasions, the California Department of Managed 

Health Care issued a directive mandating that all plans immediately include coverage for all legal abortions. And this has resulted in pro-life churches/schools being forced to pay for abortion 

coverage in their health insurance plans. This action by California 

is a direct violation of the Weldon amendment, which your Department is tasked with enforcing. 

Last year when you testified before us, you said, ‘‘We have 

opened an investigation in the Office of Civil Rights at HHS to investigate. We take this seriously. We’re trying to move through the 

investigation as expeditiously as possible.’’ 

Now this directive was issued 18 months ago. The investigation 

was launched 15 months ago. Still, no corrective action has been 

taken. 

So, here is my question: first, would you consider this to be an 

expeditious investigation? And secondly, what specific details about 

the investigation can you provide? What steps have been taken? 

Why has this matter not been resolved? And will you set a date by 

which corrective action must be taken? 

Secretary BURWELL. Mr. Chairman, as you know, when you 

called, actually, originally, before the investigation started, yours 

was one of the calls. There are a number of your other colleagues 

that called. There were two or three colleagues that called. When 

you all had called, at that point I talked to OCR and we opened 

the investigation, because I take seriously the issues that you have 

raised and we are going to continue. 

The investigation is opened. It is not complete. Is it expeditious? 

I would have liked for it to have moved more quickly than it has 

moved, but the investigation is open and, until it is closed, I am 

not at a place to discuss in terms of what the investigation has 

yielded or will yield. 

With regard to the issue of timing, as I said, I am not satisfied 

with our speed, continue to work on that issue, but don’t feel I can 

give you a specific timeframe because it is an investigation and I 

need it to run its ability and its course. 

Mr. PITTS. Thank you. 

I will yield to Dr. Burgess. 

Mr. BURGESS. Thank you, Mr. Chairman. I will just take 30 seconds. 

You talked about an engaged patient. The Commonwealth Fund 

talks about an activated patient. Consumer-directed health plans, 

HSA-type plans can help with this. There is the availability of a 

Medicare MSA, but it is impossible to find one. Nobody at 1–800– 

MEDICARE knows anything about them. No place on your Web 

site at medicare.gov can you go and get information on a Medicare 

MSA. My feeling is this is something where really you could involve the patient in helping to control cost and payment reform and 

product delivery. 

So, we really do need to work on this. It is something that has 

been available since 1996, but they are just vacant on the Web site. 

Secretary BURWELL. It is not what I am familiar with. So, I will 

check and follow up and see where that stands. We will get back 

to you. 

72 

Mr. BURGESS. All right. Thank you. 

Mr. PITTS. Yield back. 

That concludes the questions that we have today. We will have 

followup written questions. We ask that you please respond. 

I remind the members they have 10 business days to submit 

questions for the record. So, they should submit their questions by 

the close of business on Wednesday, March the 9th. 

Again, Madam Secretary, you have been very patient, very forthright. Thank you very much for coming. A lot of good information 

here today. 

Without objection, the subcommittee hearing is adjourned. 

[Whereupon, at 12:33 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

73 


20087.017

Secretary Burwell's Hearing on 

"The President's Fiscal Year 2017 Budget" 

E&C Health Subcommittee 

February 24, 2016 

Attachment- Additional Questions for the Record 

Note: All responses are accurate as of February 24'h, 2016. 

The Honorable Joseph R. Pitts 

1. Arc you or anyone at HHS, working on an executive order with the White House to 

repeal the non-interference provision in Part D? If so, please expand. 

Answer: To my knowledge, we are not working with the White House on an Executive Order 

that would allow the government to negotiate prices. 

Having said that, drug costs arc not just the state and Federal governments' fastest growing cost, 

but are a real kitchen table issue for working families and retirees. Per capita Part D costs 

increased by II percent in 2014, driven primarily by increased spending on high cost drugs in 

the catastrophic phase of the benefit, which grew much faster than any other part of the 

program. 1 The extremely high cost of certain specialty drugs raises issues about whether 

beneficiaries have access to the drugs that they need most. The President's FY20 17 Budget 

proposes one potential solution for this issue: allowing the Secretary to negotiate prices for highcost drugs. 

Over the past several months, HHS has engaged with consumers, physicians, clinicians, 

employers, manufacturers, health insurance companies, representatives from state and Federal 

government, and other stakeholders to discuss ideas on how the health care system can meet the 

dual imperatives of encouraging drug development and innovation, while ensuring access and 

affordability for patients. 

We welcome continued engagement and feedback as we work together to address this rapidly 

growing cost center, while continuing to support innovation and access. 

2. As you may be aware Chairman Upton, Brady, Hatch and Alexander wrote to CMS 

concerning the "Medicare Drug Spending Dashboard" launched on December 21, 2015. 

In that letter, the Chairmen expressed concerns about the selective nature of the data 

presented and if it would be helpful without context. It is my understanding that CMS 

intends to add a hyperlink on Medicare Plan Finder to the Medicare Drug Spending 

Dashboard, estimating implementation for 2017 Open Enrollment in Fall2016. What 

do you plan to do to ensure that data related to the dashboard is presented in the 

appropriate context? 

1 https:/ /blog.cms. gov /20 15/11 /20/remarks-of-cms-acting-administrator-andy-slavitt-at-the-hhs-pharmaceuticalforum-innovation-access-affordability-and-bettcr-health/ 
74 


20087.018

Answer: As you noted, CMS intends to add a hyper! ink to the Medicare Drug Spending 

Dashboard on the Medicare Plan Finder on Medicare.gov, which estimates implementation for 

2017 Open Enrollment in Fall 2016. The CMS webpagc that includes the dashboard2 provides 

detailed information on the methodolog/ underlying the data presented as well as background 

information providing the context for this data release. CMS is committed to increasing the 

transparency of our programs by making more data available to the public. The release of the 

Medicare Drug Spending Dashboard is another step CMS is taking to further transparency. Our 

goal is that more information sharing will inform health care decisions, policy considerations and 

encourage collective problem solving around the important issues of providing more affordable 

and accessible medications to beneficiaries. 

The Medicare Dashboard is an important part of a larger story. By sharing this information and 

allowing people to analyze the data, we can increase the knowledge around drug spending and 

support efforts that to evaluate whether public dollars are being spent most effectively. While 

data on all Part Band Part D drugs are made available through our other annual public 

transparency releases, the Medicare Dashboard provides additional information and trends on a 

subset of significant drugs. Drugs are included in the dashboard if they are likely to have an 

impact on spending, noted by the highest total Medicare program spending, high spending per 

user, or large and impactful increases in their cost per unit. Thus, these drugs are likely to have 

an impact on spending and should spur public discussion of how these products arc affecting the 

Medicare program. 

We also seek to stimulate the release of additional data that will promote a more complete 

understanding of value and patient affordability. For example, the Agency for Healthcare 

Research and Quality's Evidence-based Practice Center reports are linked with the Medicare 

Dashboard, and synthesize the evidence regarding the effectiveness of some of these drugs when 

used by certain populations for specific conditions. We believe that there is complementary data 

now available from other entities on rebates. clinical etTectiveness, pharmacoeconomics, 

comparative effectiveness, safety. formulary placement and discounts on these drugs. Our hope 

is that over time outside parties will release this type of information in order to broaden the 

understanding of these drugs. 

At CMS, we are committed, as we always arc when we publish data, to receiving input to make 

sure the data arc accurate, fairly presented, constructive, and shown in a way that protects the 

identity of beneficiaries. Physicians, pharmacists, patients, manufacturers, researchers, and 

others arc encouraged to provide us with feedback to inform our understanding of these data and 

ensure they are presented appropriately. We welcome your input; please do not hesitate to have 

your staff reach out to my team to discuss this issue further. 

3. On Friday, October 30, 2015, the Centers for Medicare and Medicaid Services (CMS) 

released 2016 Medicare Physician Fee Schedule Final Rule. Within this rule were 

provisions relating to mandating the consultation of appropriate use criteria for select 

advanced imaging services under PAMA. This policy was scheduled to go into effect 

2 https:llwww.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reportsllnformation-onPrescription~Drugs/ 

3 https:llwww.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-onPrescription-Drugs/Downloads/Drug Spending Methods.pdf 

I 
75 


20087.019

January 2017. CMS has announced that they will not be able to meet the January 2017 

implementation deadline and in fact, stated that they will not commit to any datecertain for implementation. Please explain to the Committee why the Agency will not 

meet the implementation deadline of January 2017 and please tell the Committee a date 

certain as to when this program will be implemented. 

Answer: We believe the best implementation approach is one that is diligent, maximizes the 

opportunity for public comment and stakeholder engagement, and allows for adequate advance 

notice to physicians and practitioners, beneficiaries. AUC developers, and Clinical Decision 

Support mechanism developers. The number of clinicians impacted by the scope of this program 

is significant, as it will apply to every physician and practitioner who orders applicable 

diagnostic imaging services. This crosses almost every medical specialty and could have a 

particular impact on primary care physicians since their scope of practice can be quite vast. It is 

for these reasons we proposed a stepwise approach, adopted through rulemaking, to first define 

and lay out the process for the Medicare AUC program. In the Calendar Year (CY) 2017 

Physician Fee Schedule (PFS) rulemaking process, we will begin to identify priority clinical 

areas and expand them over time. We anticipate including further discussions and adopting 

polices regarding claims-hased reporting requirements in the CY 2017 and CY 2018 PFS 

rulemaking cycles. Also, in future rulemaking. we will develop and clarify our policy to identify 

outlier ordering professionals. We recognize the importance of moving expeditiously as well as 

ensuring transparency and working with stakeholders to accomplish a fully implemented 

program. 

The Affordable Care Act established the Independent Payment Advisory Board (IPAB), a 

board of unelected bureaucrats that are to reduce Medicare spending once certain 

spending triggers are hit. The President and Congress have not nominated any members to 

the Board and thus IPAB's authority falls to you. 

4. Based on current forecasting, when do you expect the IPAB trigger will be hit? 

Answer: The Chief Actuary of the Centers for Medicare and Medicaid Services (OACT) 

determines in the annual Medicare Trustees' Report when IPAB is triggered. According to the 

2015 Trustee's Report, IPAB will not be triggered for an implementation year before 2019. 

As you know, the Patient Access and Medicare Protection Act of2015 (PAMPA), P.L. 114-

115, should have prevented cuts in the Medicare payment rate for about 170 complex 

rehabilitation technology (CRT) codes. Unfortunately, CMS has delayed action, as 

directed by this law, until July 1. As a "fix", CMS has suggested that CRT providers 

"reb ill" for the difference in payment after July 1. 

5. What assurances do providers have from CMS that they will be able to recoup full 

payment as required by PAMPA? And how long will providers have to wait to receive 

that full payment from CMS? 

Answer: We appreciate your concerns regarding this issue. CMS began working on 

implementation of the Patient Access and Medicare Protection Act of2015 (PAMPA) when it 

first passed Congress in late December. Since PAMPA was signed into law at the end of 

2 
76 


20087.020

December, it would not have been feasible for us to implement it on January I, 2016. Given the 

amount of system changes required and the testing involved, the soonest we arc able to 

implement this change is July I, 2016. Until these changes are implemented, payments for these 

items will be based on the adjusted Durable Medical Equipment (DME) fee schedule amounts. 

The DME adjusted fee schedule rates are currently in a 50/50 blend during this six month 

transition period. The average reductions for these Group 3 complex rehabilitative wheelchair 

accessories are about 10 percent. On or after July 1, 2016, suppliers can adjust previously paid 

claims to receive the full fee schedule amount. 

Because the changes to the Medicare claims processing system cannot be implemented any 

sooner than July 1, the Part B Medicare contractors arc unable to process claims within 

established time limits and an advance payment may be available. Suppliers arc able to submit a 

single advance payment request for multiple claims for an eligible period of time. To apply for 

an advance payment, the Medicare supplier is required to submit the request to their appropriate 

Medicare Administrative Contractor. If a provider in your district has concerns or needs 

additional assistance they should contact their appropriate Medicare Administrative Contractor. 

CMS will be monitoring beneficiary access closely during this time to ensure that beneficiaries 

receive the wheelchairs and accessories that they need. 

6. For over half of the reimbursement codes, the "reb ill" amount will be less than $20. It 

is important to bear in mind that the CRT provider's administrative cost for billing is 

at least $20. Therefore, won't these providers end up losing money when they rebill 

Medicare? I do not understand how CMS can say this is a "fix," especially when 

providers end up losing money. 

Answer: CMS wanted suppliers to receive some payment for their claims on a timely basis 

rather than holding claims until July I, 2016, when the Medicare claims processing system could 

be updated to reflect this change given the amount of system changes and testing required. In 

addition, because the changes to the Medicare claims processing system cannot be implemented 

any sooner than that date and the Part B Medicare contractors are unable to process claims within 

established time limits; an advanced payment maybe available for suppliers. To minimize 

burden, suppliers may submit a single advance payment request for multiple claims during an 

eligible period of time, consolidating their administrative efforts, until system changes can be 

implemented. 

On or after July l, 2016, suppliers can adjust previously paid claims with dates of service on or 

after January I, 2016, to receive the full fee schedule amount. Since these Group 3 complex 

rehabilitative wheelchair accessories arc also used on other types of wheelchairs, suppliers would 

have to identify and submit previously submitted claims that would need to be adjusted on or 

after July l, 2016. For these items, the average adjustment to the 2016 rates in the transition 

period is a reduction of about I 0 percent. 

7. Has CMS provided any information to beneficiaries, providers, or other payers to let 

them know that Medicare is underpaying for certain CRT equipment until July 

1? And, has CMS offered any guidance on what the actual payment rates should be for 

CRT equipment? 
77 


20087.021

Answer: CMS has posted information regarding the delayed implementation of the PAMPA 

provision on the DME Spotlight web page, including a message to suppliers on how to receive 

advance payments until the system changes could be implemented. In addition to the DME 

Spotlight web page, CMS also alerted suppliers to the delayed implementation of PAMPA via 

two messages in newsletters in late January and earlier this month4

• 

CMS will be releasing the list of HCPCS codes for wheelchair accessories affected by PAMPA 

soon. Once the HCPCS codes are identified, suppliers can calculate the payment rates using the 

2015 DMEPOS fee schedule amounts multiplied by the 2016 DMEPOS fee schedule update 

factor available in the January 2016 DMEPOS Fee Schedule Update Change Request. The 

unadjusted 2016 fee schedule amounts for these wheelchair accessories will be posted as part of 

the July update to the DMEPOS fee schedule file. The July update files arc typically posted in 

early June. 

8. Shouldn't CMS, instead, be developing a process where CMS' contractors 

automatically reprocess these types of claims? That way, the provider would not have 

to reb ill. Since this system would need to be operational by July 1, that gives CMS 

plenty of time to implement such a system. Do you agree? 

Answer: CMS wanted suppliers to receive some payment for their claims on a timely basis 

rather than holding claims until the systems could be updated to rcnect this change. Because the 

changes to the Medicare claims processing system cannot be implemented any sooner than July 

I, the Part B Medicare contractors are unable to process claims within established time limits and 

an advance payment may be available. Suppliers are able to submit a single advance payment 

request for multiple claims for an eligible period of time. 

On or after July!, 2016, suppliers can adjust previously paid claims with dates of service on or 

after January I, 2016, to receive the full fee schedule amount. Since these Group 3 complex 

rehabilitative wheelchair accessories arc also used on other types of wheelchairs, suppliers would 

have to identify and submit previously submitted claims that would need to be adjusted on or 

after July 1, 2016. For these items, the average adjustment to the 2016 rates in the transition 

period is about a reduction of I 0 percent. 

Regarding reform of the Clinical Laboratory Fee Schedule (CLFS), as required by Section 

216 of the Protecting Access to Medicare Act of2014 (PAMA), statute required CMS to 

issue final rulemaking on CLFS reform by June 30,2015, providing both laboratories and 

the agency with sufficient time to create the necessary systems to collect, certify, report, 

and calculate data, with new reimbursement rates going into effect January 1, 2017. CMS 

has failed to meet this schedule. A proposed rule was not issued until October 1, 2015, and 

there still is no final rule. A January 1, 2017 effective date seems unlikely. 

9. What is the status of the final rule and what are CMS' plans to provide laboratories 

with sufficient time and guidance to comply with reporting requirements'? 

Answer: On October 1, 2015, CMS published a proposed rule to implement section 216 of the 

4 All responses are accurate as of February 24, 2016 

4 
78 


20087.022

Protecting Access to Medicare Act of 2014 (P AMA) requiring applicable clinical laboratories to 

report on how much private insurers pay for laboratory tests, which will be used as the basis for 

new Medicare payment rates. In the proposed rule, CMS proposed to define the term 

"laboratory" according to the definition used in the Clinical Laboratory Improvement 

Amendments (CLIA) regulations. CMS also addressed how to meet the statutory requirement 

that an "applicable laboratory" receive a majority of its Medicare revenues from the clinical 

laboratory fee schedule or the physician fee schedule. In addition, CMS proposed a low 

expenditure threshold to reduce the reporting burden on small laboratories, as authorized by 

PAMA. 

CMS is currently reviewing the public comments received in response to the proposed rule, 

including many comments regarding the definition of an "applicable laboratory". We will 

carefully consider those comments in developing a final rule implementing P AMA section 216. 

The House of Representatives has demonstrated a strong commitment to precision 

medicine through our 21st Century Cures initiative, and we remain committed to working 

with the Administration to enact comprehensive precision medicine legislation. One issue 

providers have brought to our attention is the complex set of Medicare billing rules, 

specifically the CMS 14-day Rule, for molecular and advanced diagnostic laboratory tests 

performed on specimens collected from hospital outpatients. As you know, specialty care is 

increasingly moving towards the hospital outpatient department, however, many of these 

advanced diagnostic laboratory tests are performed by independent laboratories separate 

from the hospital. Under this complex set of rules, the hospital where the specimen was 

collected is required to bill for the test in most cases even though the hospital did not 

actually perform the laboratory test. We have heard from cancer centers and others that 

they do not want to bill for a test that the institution did not perform. Congress previously 

required CMS to conduct a demonstration project on this issue and CMS issued a report in 

December 2015 that failed to provide recommendations. 

10. Would CMS be willing to address this issue as part of the annual rulemaking process 

this summer to modernize the rule so that the laboratory that performs the test bills 

Medicare for the test, which is consistent with how other diagnostic tests are billed 

when performed outside of the hospital? 

Answer: Thank you for your leadership on 21st Century Cures and your commitment to 

advancing scientific innovation. In general, Medicare makes only a single bundled payment to 

the hospital for all services furnished to inpatients and outpatients, including laboratory tests on 

specimens stored for up to 30 days. The "date of service" rule limits this policy to tests ordered 

not more than 14 days after the patient's discharge from the hospital. 

We are aware of challenges this policy may pose for laboratories performing certain advanced 

diagnostic tests on stored specimens. This was addressed through a two-year demonstration 

required by the Affordable Care Act, allowing separate direct payment to laboratories under 

certain circumstances. As you noted, CMS issued a report to Congress on this demonstration in 

2015, which noted extremely low participation in the demonstration. Given such low 

participation, we were unable to conduct a thorough assessment of the demonstration's effects or 

make meaningful recommendations on changes to the policy. 
79 


20087.023

Last fall, the Office for Civil Rights at HHS published a proposed regulation that is 

intended to implement section 1557 of the Affordable Care Act, which prohibits 

discrimination on the basis of race, color, national origin, sex, age, or disability in certain 

health programs and activities. Although the statute itself refers to any health program or 

activity that receives federal financial assistance, the proposed regulation goes much, much 

further by also, apparently, applying the new rules to employer-sponsored health plans 

that utilize the services of a third-party administrator. 

11. This overreach of regulatory authority is striking. How do you justify this 

inappropriate new and costly burden on plans that do not actually receive any form of 

federal financial assistance and that already comply with a fully articulated set of rules 

in many of these areas, especially those with respect to individuals with limited 

proficiency in English? 

Those employers sponsoring group health plans that utilize the services of a third-party 

administrator will most likely be forced to comply with the regulatory oversight of the 

proposed HHS nondiscrimination regulations under section 1557 of the Affordable Care 

Act. This will add significantly to the regulatory and compliance burden of these plans, 

from both an administrative and financial standpoint. Moreover, employer-sponsored 

plans in the future will likely try to avoid using the TPA services of insurers who offer 

plans through the Exchanges. If not concerned with the additional burden forced on plans, 

are you at least concerned with the potential impact on the Exchanges if more insurers 

were to exit as a result of this·regulation? 

Answer: While rappreciate your concern, the proposed rule to implement Section 1557 of the 

Affordable Care Act is consistent with the underlying statutory provision. It incorporates the 

long-standing civil rights principles under the four civil rights laws that Congress referenced in 

Section 1557. Accordingly, the proposed rule interprets the obligations under Section 1557 

consistent with the Civil Rights Restoration Act of 1987 (CRRA), which establishes that the 

entire program or activity is required to comply with the prohibitions on discrimination if any 

part of the program or activity receives Federal financial assistance. Therefore, it is consistent 

with existing civil rights laws and principles to hold a covered entity principally engaged in a 

health program or activity liable for all of its operations, as we do in the proposed rule. 

The proposed rule also reflects careful consideration of input from a variety of stakeholders in 

response to OCR's Request for Information. It also reflects feedback provided during listening 

sessions, including input on application of the rule to employers who provide employersponsored group health plans that utilize the services of a third-party administrator. As a result 

of OCR's consultations with HHS components, other Federal agencies, and stakeholders to 

develop the proposed rule, we do not believe it will result in issuers exiting the Exchanges or 

employers using third-party administrators who offer plans offered through the Exchanges. In 

addition, as set forth in the Regulatory Impact Analysis to the proposed rule, the cost to covered 

entities is limited because most obligations already exist under other civil rights laws and OCR is 

minimizing costs to the extent possible by developing training and material that covered entities 

6 
80 


20087.024

can use to meet their obligations. For the latest information on Section 1557 please see 

http://www .hhs.gov /c ivil-rights/for-individuals/section-155 7/.5 

In your 2011 regulations regarding the enforcement of federal health care provider 

conscience protection laws, you stated that the Department of Human Services (HHS) 

sought to strengthen longstanding protection statutes by ensuring there is a clear process 

for enforcement. The Office for Civil Rights (OCR) of HHS is the designated department to 

receive and address complaints of discrimination and coercion in violation of statutory 

protections. I would like to ask you about the adequacy of this enforcement process. 

12. How many complaints have been filed since 2011 when the enforcement regulations 

were finalized? 

13. How many of those complaints have been resolved? How many remain outstanding? 

14. On average, how long does it take to resolve a complaint under these regulations? On 

average, how long does it take to resolve a complaint filed under all other areas of OCR 

jurisdiction (Disability, Age, Religion, etc.)? 

15. Is it acceptable if a complaint is never resolved? 

16. Please provide a list of all actions taken by your department to notify the public and 

particularly health care providers of their rights under the abortion conscience laws 

covered in the 2011 regulation. 

17. As a general matter, not specific to complaints regarding abortion conscience 

protections, please explain how complaints filed with OCR are handled. Specifically, 

• What happens when a complaint is filed? 

• How are cases assigned? 

• On average how many people serve on a typical team assigned to investigate an 

OCR complaint? 

• What is the average length of time it takes to resolve a complaint filed with OCR? 

• Does OCR have the authority to stop an alleged violation while the complaint is 

being investigated'! 

18. Please provide information about abortion conscience complaints received and 

processed by OCR since 2011. Specifically, 

• How many abortion conscience complaints have been filed since 2011 when the 

enforcement regulations were finalized? 

5 All responses are accurate as of February 24,2016. 
81 


20087.025

• Is there a particular team assigned to these complaints? 

• How many people serve on the team(s) assigned to investigate abortion conscience 

complaints? 

• How many of those complaints have been resolved? 

• How many remain outstanding? 

• On average, how long does it take to resolve a complaint under these regulations? 

• Is it acceptable if a complaint is never resolved? 

In 2014 you opened an investigation into complaints that California violated the Weldon 

abortion conscience protection when it required all insurance plans under the authority of 

theCA Department of Managed Care to cover abortion. With regard to the complaints 

filed in response to the abortion coverage mandate in California: 

19. How many people arc assigned to investigate and resolve this issue? Please provide the 

names of the members of the team investigating and the amount of time each has spent 

on the investigation since it was opened. [alternatively if asking for names is risky: How 

many people are assigned to investigate and resolve this issue? Please indicate the 

cumulative amount of time that the team has spent on the investigation since it was 

opened.] 

20. How many meetings has OCR held on the issue internally? 

21. How many interviews or meetings have been conducted with the parties who have filed 

complaints (or their representatives) or California officials (or their representatives)? 

22. Has OCR discussed this case with any person or group other than those who filed 

complaints (or their representatives) or California officials (or their 

representatives)? If so, please list the parties consulted. 

23. How many times have you personally spoken with OCR staff regarding this complaint? 

Answer: The HHS Office for Civil Rights (OCR) ensures that individuals receiving services 

from HHS-funded programs are not subject to unlawful discrimination and that the privacy and 

security of individuals' health information is protected. OCR engages in investigations, 

technical assistance, voluntary compliance efforts, enforcement, policy development, and 

education to ensure that all people have access to health care and health services. As you are 

aware, OCR also enforces the Federal Health Care Conscience Protection Statutes, including the 

Church Amendments, the Weldon Amendment, the Public Health Service Act, and the 

Affordable Care Act. 

If an individual feels they have been discriminated against because of their race, color, national 

origin, disability, age, sex, or religion in programs or activities that HHS operates or to which 
82 


20087.026

HHS provides federal financial assistance, they can file a complaint with OCR. OCR receives 

more than 20,000 complaints per year; the length and scope of a particular investigation varies 

based on a number of factors, including the allegations of discrimination, the number of 

individuals or entities involved, and the types of legal issues that arc raised by the complaint. 

Once a complaint is received, OCR determines if it has the legal authority to review and 

investigate the complaint. When it becomes clear that OCR can accept the complaint, an 

investigation is opened and the complainant is notified. OCR has a variety of investigative tools 

that it can use, depending on the statute under which a complaint alleges discrimination. During 

the course of the investigation, OCR may interview the complainant, the covered entity, and any 

other parties that may have information relevant to the case. OCR may also obtain additional 

documentation through data requests and, if needed, can complete an on-site visit to the entity's 

location. Importantly, where areas of concern arise during an investigation, OCR may work with 

an entity to reach voluntary compliance. 

When the investigation is completed, OCR may take several actions, which are tailored 

depending on the type ofrelicfnecessary and remedies available under the law. If OCR 

determines that no violation has taken place, OCR sends a letter to the complainant and the 

covered entity providing the results of the investigation and closes the case. If a violation has 

occurred, OCR may work with an entity to provide corrective action, including updating policies 

and procedures, training staff members, requiring a service to be provided, or restoring lost 

benefits. In the rare case where an entity is unwilling to take corrective action, OCR may 

recommend the initiation of enforcement proceedings, which arc carried out by the Office for 

General Counsel or the Department of Justice. A final decision upholding a violation finding 

could result in the termination of Federal financial assistance to the recipient. 

HI IS supports clear and strong conscience protections for health care providers and entities that 

are opposed to performing abortions and is committed to enforcing these laws. Since January 

2011, OCR has received eight complaints alleging discrimination under the provider conscience 

protection statutes, six of which are currently open and undergoing investigation. Among those 

filed, OCR received three complaints alleging that the California Department of Managed Health 

Care directive violates the conscience clause protections of the Weldon Amendment. OCR has 

an open investigation to examine the allegations in these complaints. Because these are open 

cases, we cannot comment on the status of the review. 

Lastly, OCR includes information about its authority to enforce conscience protections in its 

overview of OCR's authorities when it does general outreach presentations. Notably, OCR has 

an entire section of its website dedicated to the provider conscience protection statutes. The 

website includes references to the laws it enforces, how to file a complaint, and detailed 

information about OCR's enforcement of these Jaws (including a PowerPoint presentation and a 

fact sheet).6 

24. SAMHSA administers the Now is the Time Project A WARE program which gives out 

grants to Local Educational Agencies (LEAs) to support training of school personnel to 

detect and respond to mental illness in our youth. However, these federal dollars have 

been interpreted to narrowly only apply to one specific type of mental health awareness 

6 All responses are accurate as February 24, 2016. 

9 
83 


20087.027

program, in lieu of other ones listed in their National Registry of Evidence-Based 

Programs and Practices (NREPP). Can you state the reasons why SAMHSA currently 

restricts the eligibility for Project AWARE dollars to only one program administered 

by one organization in lieu of others listed in their Registry? Do you believe it would be 

better if state and local agencies would be able to choose the evidence-based and proven 

program that works best suit the needs of their schools and communities? 

Answer: SAMHSA administers the Project A WARE Local Educational Agencies (LEA) 

programs in a manner that is consistent with Congressional direction. In the Consolidated 

Appropriations Act, 2014, Congress appropriated $15 million to SAMHSA for "Mental Health 

First Aid" and final Conference Report language directed SAMHSA "to focus on a broad public 

health safety approach when implementing the Mental Health First Aid program that offers 

training for both school officials and the range of actors in the public sphere that interact with 

youth." Consistent with Congressional direction, SAMHSA implements Mental Health First Aid 

training. This training is for teachers and other adults who interact with youth to detect and 

respond to mental illness in children and young adults, including how to encourage adolescents 

and families experiencing these problems to seek treatment. 

25. CMS told GAO it expects to issue guidance outlining how the Marketplace will 

determine whether an applicant has demonstrated a good faith effort to obtain the 

required documentation, and expects good faith extensions for applications for 2016 

coverage to be very limited. So, what precisely is CMS's policy for resolving 

inconsistencies now? And, based on past problems identified, are yon confident CMS's 

actions will eliminate the problems GAO identified with CMS protocols and processes 

for 2014 and 2015? 

Answer: The FFM takes action on a monthly basis for consumers with unresolved data 

matching issues who have not provided adequate documentation within 95 days for citizenship 

or immigration status data matching issues and within 90 days for household income 

inconsistencies. Consumers who do not submit sufficient documentation to resolve their annual 

household income data matching issue will have a recalculation of their APTC and/or CSRs 

based on available tax data. Individuals who have not provided the necessary documentation for 

their citizenship or immigration status will have their enrollment through the Marketplace 

terminated. As discussed in the response to the GAO, decisions to grant an extension under 45 

CFR 155.315(c) have been made on a case by case basis for a small number of applicants. 

CMS learned from the first year of implementation and made improvements in advance of and 

during the second and third open enrollments. CMS is continually improving its policies and 

procedures in order to fulfill its responsibility to protect taxpayer funds, while providing 

coverage to eligible consumers. Since May 2015, consumers have been able to call the 

Marketplace call center and representatives have access to near real-time data on the documents 

consumers have submitted to address their inconsistency. These program improvements will 

help address the issues raised by the GAO. 

26. The committee has been told that if a consumer who has exchange coverage wants to 

make a simple change to their coverage, say for example, to update their address, they 

must go through the entire exchange enrollment/eligibility process again. How long is 

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the average call or time online for consumers wanting to make a simple change like 

this? Why is CMS's process so difficult for consumers? 

Answer: CMS continually works to improve the customer experience including making it 

simple for consumers to keep their Marketplace information up to date. Consumers can report 

changes to their Marketplace coverage in three ways: online, by phone, or in-person. Consumers 

are not required to go through the entire enrollment process again for a simple change in contact 

information such as an email address or phone number. If a consumer's address change involves 

a change in ZIP code or county that results in access to different qualified health plans. the 

consumer may qualify for a Special Enrollment Period, in which case a new eligibility 

determination is required. Other changes that may impact eligibility and therefore require a new 

application include change in income or eligibility for other forms of health coverage. We 

encourage consumers to report income or household changes as soon as possible, since it may 

affect the coverage or savings for which they are eligible. We have also made an online tool 

available to give consumers a better sense of how changes will impact their premium tax credit 

amount. 

27. Next year, States that have expanded Medicaid to childless adults will start paying 5% 

of the costs for that population, as the full federal financing for this population declines. 

Your predecessor made headlines in recent months, criticizing one state's decision not 

to expand Medicaid under the ACA as "morally repugnant and economically stupid." I 

appreciate that you've often had a better tone than your predecessor. Isn't the budget 

proposal to extend to states that have not expanded Medicaid the full federal financing 

for newly eligible adults -isn't that proposal an implicit omission that State governors 

and legislators are not "economically stupid" but are actually making decisions based 

in part on their own economic interest? 

Answer: State decisions to extend Medicaid coverage to low-income adults have been proven to 

expand insurance coverage, reduce the uncompensated care burden on health care providers, and 

save states money. As of January 2016, 30 states and the District of Columbia have elected to 

expand Medicaid, and more states are actively discussing expansion (Louisiana will make the 

31" state). Through November 2015, an additional 14.1 million individuals have gained 

Medicaid or CHIP coverage, including over 335,000 Penns~lvanians; many of whom would not 

have been eligible for coverage absent Medicaid expansion . 

Research shows that expansion makes good fiscal sense for states and their residents. Medicaid 

coverage offers low-income families a set of affordable and comprehensive health benefits from 

preventive screening to prescription drug benefits. Adults with Medicaid report that they are able 

to access care and can afford the services they need. People with Medicaid coverage report also 

very high satisfaction, even higher than those who receive health insurance through their place of 

employment. Medicaid expansion has not only increased access to quality care, but it has also 

reduced costs for hospitals and other medical providers that may otherwise have burdened 

providers or be passed on to taxpayers and already insured individuals. According to the Council 

of Economic Advisers, if all states fully expanded Medicaid, uncompensated care costs would be 

about $8.9 billion lower in 2016 than they would be if no states expanded Medicaid. In 

7 https:f/www.medicaid.gov/medicaid-chip-program-information/program-information/downloads/november2015-enrollment-report.pdf 

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Kentucky, for example, expansion has been projected to add 40,000 jobs and $30 billion to state 

economy through 2021. 

As you say, the President's Budget includes a proposal to provide all states, regardless of when 

they choose to expand Medicaid, the same federal share as states that expanded right away by 

providing three years of full Federal funding for newly eligible adults. We believe that 

continuing to incentivize states to expand Medicaid coverage will benefit millions of people 

across the country, reduce the uncompensated care burden on urban and rural providers, and 

stimulate state economies. As you know, I am personally committed to working with states to 

find solutions that work best for their residents, while protecting certain fundamentals of the 

program. 

28. Today, under Medicaid expansion, it's a fact that many medical and law students in 

states that expanded Medicaid are enrolled in the program. That's in part because 

universities have dialed back their private coverage programs, due to Medicaid 

expansion. I worry this is just one more example of how the ACA's Medicaid expansion 

can often crowd out private coverage. Would CMS survey newly-eligible Medicaid 

beneficiaries to see what coverage they had before their current coverage? 

Answer: Research shows Medicaid expansion does not "crowd out" private coverage. While 

some colleges and universities may have dialed back their private coverage, much of this is 

attributable to the Affordable Care Act extending coverage under parents' health plans up to age 

26 and to elimination of low-benefit plans that once provided many students with subpar 

coverage. Not only does Medicaid expansion not "crowd out" other coverage, but it also 

increases the number of low-income Americans receive coverage through private insurers. Many 

of these individuals would otherwise have been unable to afford private insurance. Research 

from Oregon showed that an expansion of Medicaid coverage was associated with a 25 

percentage point increase in the probability of having insurance during the study period. This net 

increase in insurance appears to come entirely through a gross increase in Medicaid coverage, 

with little evidence of crowd-out of private insurance. 

In most of the states that have expanded Medicaid, newly eligible adults are enrolled in private 

managed care plans that contract with state Medicaid agencies to serve this population. And in 

states like Arkansas that have expanded using a premium assistance approach, some of the newly 

eligible adults receive coverage through private insurers through the Marketplaces; their 

premiums are paid by the state Medicaid program, with a contribution from the individual. 

As retlected in the President's FY 2017 Budget proposal to provide all states, regardless of when 

they choose to expand Medicaid, the same federal share as states that expanded right away, the 

agency is focused on decreasing the number of low-income Americans who are still without 

insurance coverage in states that have not yet decided to expand their Medicaid programs. 

29. The Committee has been very interested in CMS's vagne criteria for approving 1115 

waivers. In responses to the Committee, CMS admitted "we do not apply a standard 

federal definition of'low-income."' In fact, CMS went on to say that "in some cases, we 

have approved state requests for demonstrations involving populations at higher 

incomes levels when we determine that the program furthers the objectives of title XIX 

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in that state." CMS went on to explain that "approving a program that serves 

individuals with income above 250 percent FPL can further the objectives of title XIX, 

if the program helps keep individuals healthy, especially those who may be at risk of 

developing medical conditions that could cause them to lose income, which may cause 

the individuals to become Medicaid eligible." Given the positive correlations between 

participation in the labor force and health outcomes, why is CMS so ideologically 

opposed to states testing the utility of work requirements for the non-disabled 

population? 

Answer: Section 1115 of the Act authorizes the Secretary to waive provisions of section 1902 

of the Act to enable states to conduct demonstrations that would, in her judgment, be likely to 

assist in promoting the objectives of Title XIX. We have used this authority to enable states to 

conduct demonstrations that promote the objectives of the Medicaid program. Since 2009, we 

have approved new demonstrations in 29 states8 and approved 86 renewal actions 9 However, the 

Secretary does not have the authority to permit a state to require Medicaid beneficiaries to work 

or receive job training because that is not an objective of Title XIX. 

We are committed to working with states interested in pursuing new and innovative policy 

approaches in their Medicaid program. We do consider encouraging work an important state 

objective, and to that end we have worked with states to develop approaches that encourage work 

and job training participation. However, the structure of the ACA is built on every American 

having a guarantee of access to affordable health insurance. We cannot condition that access on 

any requirement, including work. It is also notable that nearly three out of four (72%) of the 

uninsured adults who could gain Medicaid coverage in non-expansion states live in a family with 

at least one full-time or part time worker and more than half (57%) are working full or part-time 

themselves. 

30. I have a question about Medicaid's approval offnnding for designated state health 

programs through 1115 waivers. I know CMS has explained that States deduct from 

their waiver requests any existing federal funding the state may have. But why is it 

appropriate for CMS to approve Medicaid federal financing of state-based healthcare 

workforce training and loan repayment programs, when there are already federallyfunded programs to do the same thing through HRSA? This is clearly duplicative of the 

existing federal funding stream-just within HHS. 

Answer: CMS and HRSA work together on the 11!5 waiver approval process to ensure that 

appropriate review to prevent duplication occurs. The 1115 waiver program is a research and 

demonstration mechanism for states to improve Medicaid and CHIP programs. These 1115 

waivers may include components related to workforce with the purpose of stabilizing and 

strengthening access to care for Medicaid and low-income populations in the state. 

HRSA workforce and loan repayment programs are statutorily defined programs through 

separate authorities and for a different purpose than 1115 waivers HRSA provides grants to 

academic institutions and other entities to train the health care workforce across the entire 

8 AL, AR, AZ, CO, DC, GA, lA. ID, IL, IN, KS, LA, Ml, MN, MO, MT, 1\D, NH, NJ, :-.:M, NV, OH. PA, Rl, TX, 

VA, \VA, WI,& WV 9 All responses accurate as of February 24, 2016. 

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trammg continuum. States are not eligible to compete for all HRSA-administered 

programs. . These programs provide separate but complementary efforts, which both work to 

address the Nation's healtheare workforce shortages. 

31. To help ensure the accuracy of eligibility determinations for the aged and disabled 

population in Medicaid, in 2008, Congress passed legislation that required States to 

implement electronic asset verification systems to verify the assets of aged, blind, or 

disabled applicants for Medicaid. The law provided for States' implementation of these 

systems to occur on a rolling basis, with all states required to have systems in place by 

the end of fiscal year 2013. The law also specifies that federal matching payments for 

expenditures for the populations subject to asset verification must be withheld should 

states fail to implement the required asset verification system, unless the State 

demonstrates a good faith effort to comply, submits a corrective action plan to remedy 

such noncompliance, and fulfills the terms of the corrective action plan within 12 

months. It is now fiscal year 2016, yet CMS does not even know which states have 

implemented these statutorily required systems intended to ensure the accuracy of 

Medicaid eligibility determinations. Does HHS or CMS not believe that the accuracy of 

Medicaid eligibility determinations is a high priority? Why hasn't CMS required states 

to submit corrective action plans within the time frames outlined in the law'? 

Answer: The accuracy of Medicaid eligibility decisions is a high priority and CMS has 

implemented a number of strategies to ensure program integrity. Pursuant to CMS regulations, 

states have implemented strategies to electronically verify a number of factors of eligibility, 

including income, citizenship, and eligible immigration status. 

Since 20 II, all states have either built new eligibility systems or have dramatically re-engineered 

legacy systems to implement new Medicaid eligibility rules. These new systems present an 

opportunity to automate the asset verification systems (A VS). However, states have faced a 

number of obstacles in the implementation of A VS. These include the cost of the product and 

availability of state funds, a limited number of vendors with an appropriate product, and, in some 

states, a reluctance/refusal of financial institutions to participate and provide data. 

CMS has been working to promote faster progress across states. In order to help states move 

toward full implementation of an A VS, CMS has issued guidance on A VS and provided 

extensive technical assistance to states. They have, for example, facilitated state-to-state 

discussions of ways to overcome implementation obstacles. Additionally, CMS is evaluating 

states' Advanced Planning Documents to ensure that plans for electronic asset verification are 

integrated into current and future system development/build schedules. 

CMS has approved Medicaid state plan amendments (SPA) to implement asset verification 

systems in 31 states 10• To date, 7 of these states have fully implemented an AVS and another 13 

expect to be live before the end of2016. CMS requested that each of the remaining 20 states 

10 These 31 states are Alabama, Arizona. Arkansas, California, Connecticut, Delaware, Florida, Georgia, Hawaii, 

Kentucky, Michigan, Minnesota, Mississippi, Missouri. Nevada, New Hampshire, New Jersey, New Mexico, New 

York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, Utah, Vermont, Virginia, 

Washington, Wisconsin and Wyoming. 

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submit a SPA to CMS for approval, along with a detailed work plan and timeline for full 

implementation. CMS is evaluating whether each state that has not yet implemented an A VS is 

making a good faith effort to comply with the statutory requirements. Any state determined not 

to be making a good faith effort will be required to submit a corrective action plan. 

As more states re-cngineer their eligibility systems for the aged, blind, and disabled populations, 

CMS expects that more will commit resources to complying with asset verification 

32. According to GAO, State Medicaid Directors raised concerns that Medicaid eligibility 

determinations made by the federal exchange were incorrect. Despite these concerns, at 

the time of their work, GAO noted that CMS was not assessing the accuracy of federal 

eligibility determinations, but that CMS officials indicated that the agency was 

planning to begin looking at such determinations in August 2015. What is CMS doing to 

examine the accuracy of federal eligibility determinations and what has CMS found? 

Answer: CMS agrees that it is important that determinations made by the FFM are accurate, and 

has a number of processes in place to support this goal. First, all business requirements for the 

FFM's systems were developed by federal subject matter experts who were involved in drafting 

the guiding regulations. particularly those pertaining to eligibility requirements. Second, as part 

of the normal CMS systems development lifecycle, FFM code goes through developer and 

independent testing, including regression testing as changes are introduced. Third, CMS 

routinely engages with a number of issuers who are able to do end-to-end testing of the eligibility 

and enrollment process to ensure accurate eligibility determinations and correct enrollment 

information. In this vein, CMS is leveraging this process to also ensure that Medicaid eligibility 

determinations are accurate by implementing a pilot program to test complex eligibility scenarios 

in three states. CMS will use this pilot program to refine the eligibility testing process and will 

gradually add more FFM states with routine, scheduled testing windows throughout the 

year. Lastly, CMS is constantly reviewing issues reported to our help desk and through other 

channels to determine whether improvements are required, and also receives continual feedback 

from state Medicaid and CHIP agency staff on any potential concerns. 

33. According to GAO, Medicaid quarterly expenditure reviews only assess whether 

expenditures for an enrollee that a State claims to be newly eligible is submitted under 

the newly eligible expenditure category. It does not whether the enrollee is truly newly 

eligible. Given the 100 percent federal funding for the newly eligible, States obviously 

have a financial incentive to increase the proportion of applicants and expenditures for 

that population. As such, what is CMS doing to ensure that expenditures claimed 

under the higher federal matching rate are indeed for individuals that are newly 

eligible? Can you also speak to CMS's oversight of matching rates with respect to 

CHIP, since many states have a very high CHIP matching rate? 

Answer: CMS is committed to ensuring that federal financial participation (FFP) paid to states 

for Medicaid and CHIP expenditures is accurate and appropriate. To ensure federal funding is 

provided at the appropriate Federal Medical Assistance Percentage (FMAP) and expenditures 

were for covered services CMS conducts expenditure reviews that contain a series of 

management controls and validation activities as oversight of states. These expenditure reviews 

do not include eligibility reviews which are handled by a separate process. However, the two 

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complementary processes collectively serve to provide appropriate oversight of the I'FP paid for 

state expenditures. The reviews for CHIP reported expenditures follow the same quarterly review 

and oversight process that is conducted for all claims for Federal matching funds. 

To specifically address oversight needs for the newly eligible expenditure category, CMS 

implemented new quarterly CMS-64 expenditure reporting and review procedures for the new 

adult group. CMS developed new financial reporting forms where states must separately report 

expenditures for newly eligible individuals and also provided significant training and guidance to 

states about how to accurately track and report these expenditures. CMS is also conducting 

rigorous financial management reviews of these expenditures. CMS samples claims and 

generalizes the results obtained from the sample review for purposes of deferring federal 

funding, as necessary. to ensure appropriate claiming and proper state corrective action. The 

deferral process allows CMS to withhold federal funding from a state while obtaining additional 

documentation from a state or requesting state corrective action, including the return of FFP 

when appropriate. CMS is also exploring additional ways to reinforce for Medicaid and CHIP 

enrolled consumers the need to report application changes to the applicable state agency. 

34. Last year CMS did not check for Medicaid coverage for the 1.96 million individuals 

who the agency auto-enrolled in qualified health plan for plan year 2015. This likely 

resulted in duplicate coverage and inaccurate federal payments. With open enrollment 

for plan year 2016 having just ended, what, if anything, did CMS do this year to check 

for Medicaid coverage before automatically enroll people'! 

Answer: The Marketplace checked whether enrollees were dually enrolled in Marketplace 

coverage with APTC and Medicaid or CHIP prior to Open Enrollment for 2016. Consumers 

who were identified as dually enrolled were notified that they should end their Marketplace 

coverage with APTC. In spring 2016, we will check again whether Marketplace enrollees with 

APTC are also enrolled in Medicaid or CHIP. Notices will be sent in May to consumers who 

were enrolled in both. 

36. Medicare expenditures this year will total nearly $570 billion, and are expected to 

roughly double over the coming decade. 11 1 The budget includes very modest structural 

changes to Medicare, but they would not be sufficient to make Medicare solvent. In 

fact, according to CBO, the Medicare Hospital Insurance Trust Fund will be insolvent 

in 2026-meaning the next president will inherit a program rapidly hurtling toward 

going belly up and jeopardizing care for millions of Americans. 121 As a former budget 

official, arc you content with this Administration's record on shoring up the Medicare 

program to protect it for current and future beneficiaries? 

37. I know we all agree Medicare is a critical program for Americans. There have been 

bipartisan proposals in the last eight years that would make needed changes to help 

save Medicare-plans like those from the president's fiscal commission; RivlinDomenici; Wyden-Ryan, and Lieberman-Coburn. Unfortunately, the Administration 

largely ignored these plans and used Medicare savings to make Obamacare look like it 

[l] https://www.cbo.gov/sltes/default/files/cbofi!es/attachments/44205-2015-03-Medicare.pdf 

121 https:(/www.cbo.gov/about/oroducts/budget economic data#S 

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reduced the deficit. Yet, the insolvency of the Medicare hospital trust fund is within 

sight, and Medicare continues to consume more general revenue. In addition to a few of 

the bipartisan proposals in the president's budget, do you acknowledge more needs to 

be done to help save Medicare? 

38. Each day about 10,000 baby boomers age into the Medicare program. The present 

value of Medicare taxes for a married couple earning the .average wage and retiring at 

65 is approximately $140,000 in payroll taxes but the lifetime average benefit is 

$422,000 roughly 3 times what is paid in payroll taxes. Can the current financial 

condition of the Medicare program sustain this growth? 

39. One could argue that the most serious threat to the nation's long-term prosperity is the 

rapid and unfinanced growth of entitlement spending. Left unchecked, spending 

commitments for these programs will consume future revenue. According to CBO, 

Medicare spending in 2015 "rose by $34 billion, or nearly 7 percent-the fastest rate of 

growth recorded for the program since 2009." This spending growth is expected to 

continue at roughly the same level over the next 10 years. Docs the Administration 

believe that the current Medicare program is sufficiently financed to be able to handle 

this growth without significant cuts to providers or decreases in benefits? 

40. The first Baby Boomers aged into the Medicare program 5 years ago with 10,000 more 

joining every day. By 2030 75 million seniors will be in the program, living longer than 

ever before while retirement age has stayed constant. While the budget proposes 

savings it is near silent on large structural reform designed to protect future benefits, 

why hasn't the Administration supported structural reforms such as raising the 

retirement age to correspond with Social Security? 

Answer: This Administration has taken historic steps to help change the trajectory of health 

care spending. The Affordable Care Act is contributing to the recent slow growth in health care 

costs, while expanding coverage and improving the quality of care for millions of people across 

the country - including through the provisions that reduce Medicare excessive payments and 

shift toward payment models that promote high-quality, efficient care. The continuation of slow 

growth for years after the recession and slow growth in Medicare, which is insulated from 

broader economic trends, both point to a major role for structural changes in the health care 

system in explaining recent slow health care cost growth. Work by outside researchers has 

reached similar conclusions. 

Since August 20 I 0, the Congressional Budget Office's projection of Medicare spending under 

current policy in 2020 has fallen by $123 billion. This decline represents a 15 percent reduction 

in projected spending and primarily reflects the recent slow growth in health care spending. 

Medicare spending per beneficiary rose just I percent in nominal terms in 2015, according to 

projections from the Centers for Medicare and Medicaid Services. This would make 2015 the 

sixth consecutive year in which per-enrollee Medicare spending was near or below economywide inflation. From 2000 to 20 I 0, per-enrollee Medicare spending exceeded overall inflation by 

an average of 3.6 percent per year, even after adjusting for the introduction of Medicare Part D. 

Since the enactment of the Affordable Care Act nearly I 0.7 million Medicare beneficiaries have 

received discounts over $20.8 billion on prescription drugs- an average of $1,945 per 

beneficiary. In 2015 alone, nearly 5.2 million seniors and people with disabilities received 

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discounts of over $5.4 billion, for an average of$1,054 per beneficiary. This is an increase in 

savings compared to 2014, when 5.1 million Medicare beneficiaries received discounts of$4.8 

billion, for an average of $941 per beneficiary. 

That said, we know we still have important work ahead. The Budget presents a balanced set of 

proposals aimed at creating a health care system that spends money in a smarter way, provides 

better care, and leads to healthier people. Specifically the Budget proposals promote highquality, efficient care, improve beneficiary access to care, address the rising cost of 

pharmaceuticals, align payments more closely with costs of care, and create incentives for 

beneficiaries to seek high-value services. 

The Budget also includes some structural reforms to Medicare, including increasing incomerelated premiums under Medicare Parts Band D, modifying the Part B deductible for new 

beneficiaries, introducing home health copayments for new beneficiaries, and encouraging the 

use of generic drugs by low-income beneficiaries. 

Together, the Medicare budget proposals would save a net $419 billion over ten years, slowing 

down the average annual growth in Medicare spending by approximately one percent. These 

proposals, plus additional tax proposals included in the Budget, would extend the life of the 

Medicare Hospital Insurance Trust Fund by over 15 years. I believe that the proposals in the 

Budget represent progress toward curbing Medicare spending, but I recognize that there is more 

that can be done. For instance, in January 2015, the Administration set a goal of tying 30 percent 

of traditional Medicare payments to quality or value through alternative payment models by the 

end of 2016 a goal which HilS estimates it has already met ahead of schedule, and tying 50 

percent of payments to these models by the end of 2018. I believe that the enactment of the 

Medicare Access and CHIP Reauthorization Act will help us achieve our goal by promoting 

participation in alternative payment models. I look forward to working with Congress on more 

bipartisan efforts to help ensure that the Medicare program is sustainable for current and future 

generations. 

The Honorable Marsha Blackburn 

1. In a report issued last October, the Congressional Budget Office stated that the growth 

of obesity in the US since 1980 poses "a significant public health challenge." CBO 

further stated that "obesity is associated with numerous diseases and higher than 

average health care spending." 

2. Is the department taking specific steps to address the impact of obesity on health care 

spending? Do you believe legislative proposals to address the obesity crisis might be 

useful in impacting incidence of obesity and the growing impact of obesity on other 

chronic conditions, and spending associated with obesity? 

Answer: The Department shares your concern about obesity. Currently, the Office of the 

Assistant Secretary for Health convenes a monthly HHS inter-agency workgroup on Healthy 

Weight, Nutrition and Physical Activity (HWNPA). Representatives from across HHS share 

information on their agencies' HWNPA activities, which range from school nutrition, childhood 

obesity, and healthy weight measures to walking and walkability. CMS is part of this workgroup. 

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In partnership with National League of Cities, HHS's Let's Move: Cities, Towns and Counties 

Initiative has engaged over 500 local municipalities. These cities have committed to improving 

nutrition standards and increasing physical activity, with a goal to reverse the tide of childhood 

obesity in a generation. Over 80 Million Americans now live in a city, town or county that have 

logged over 3000 local, voluntary policies ("promising practices") committed to this action. This 

includes a goal focused on increasing access to healthy nutrition programs in schools. 

Additionally, The Dietary Guidelines for Americans (DGAs), issued jointly by I-IHS and USDA 

every five years and most recently in January 2016, are the cornerstone of Federal nutrition 

policy and nutrition program activities. DGAs inform USDA and HHS food programs, from the 

National School Lunch Program to nutrition programs for older adults. Other departments, 

including the Departments of Defense and the Department of Veterans AlTa irs, also use the 

DGAs to inform things like menu standards in military dining facilities. 

Medicare covers diabetes self-management training for diagnosed diabetics, as well as diabetes 

screening tests for those with risk factors tor diabetes (including obesity). Medicare also covers 

medical nutrition therapy for persons diagnosed with diabetes or renal disease. In addition, 

Medicare covers intensive behavioral therapy for obesity in primary care settings. The 

availability and importance of these services would also be highlighted, as appropriate, in the 

one-time ''Welcome to Medicare" visit and the Annual Wellness Visit. 

Medicare also covers several types of bariatric surgery for beneficiaries with a Body Mass Index 

(BMI) of35 or greater and at least one co-morbidity related to obesity who have previously been 

unsuccessful with medical treatment for obesity. Medicare also covers intensive behavioral 

counseling for obesity for individuals with a BMI of30 or greater. 

Beyond these activities, proposals to ensure funding to scale up key proven obesity prevention 

initiatives arc important to maintain the declines that are being observed in children aged 2-5 

years and to stabilize the obesity growth observed in older youth and adults which is diminishing 

worker productivity and leading to health care spending on obesity and its related health 

conditions. 

CDC has promising strategies to address obesity. Although multiple individual factors can 

intlucnce obesity, strategies have primarily focused on changing the energy balance 

opportunities including caloric reduction and increased physical activity. 

The scientific literature shows us that we need a variety of approaches, not one single approach, 

to reduce obesity. These include behavioral changes and changes in the food and physical 

activity environment. Repot1s by a number of experts and expert bodies including CDC, the 

Institute of Medicine, the Surgeon General and the National Resource Center for Health and 

Safety in Child Care and Early Education have identified strategies based on the best available 

evidence combined with expert opinion. 

• Overall, these experts support a multi-component approach to addressing key 

behaviors that impact weight gain and healthy growth. These include the need to 

address both physical activity and diet, and the need to strengthen supports for 

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making healthy choices in the multiple places where people eat and have the potential 

to be active. 

In addition to these population level reports, the Clinical Preventive Services Task Force, as well 

as other expert medical groups, has recommended screening for obesity for all aged 6 years and 

older combined with referrals to intensive family-based pediatric weight management programs 

with nutrition and physical activity behavioral interventions for those at risk. CDC is working to 

promote adoption of these recommendations to promote reductions in BML 

CDC conducted the Childhood Obesity Research and Demonstration (CORD) project (20 11-

20 16) that focused on linking low-income children who have obesity to integrated primary care 

and community weight management initiatives. Early results show BMI reductions for children 

6-12 years of age. CDC is supporting these obesity prevention strategies, in part, through our 

Division of Nutrition, Physical Activity and Obesity which includes work with national partners, 

states, communities, and land grant universities to increase access to and consumption of healthy 

foods and beverages and promotion physical activity, particularly walking and the creation of 

walkable communities. 

On November 13, 2013 the FDA released a proposed rule on labeling changes for ANDA 

holders titled Supplemental Applications Proposing Labeling Changes for Approved Drugs 

and Biological Products, Docket No. FDA-2013-N-0500. The proposed rule mandates that 

generic drug firms unilaterally change their labels for drugs under approved AND As by 

submission of a Changes Being Effected Supplement- 0 days (CBE-0) to add warnings, 

precautions, adverse reactions, contraindications and certain other information (hereafter 

collectively referred to as "warning(s)" even if the corresponding branded company has not 

implemented the same labeling change. 

3. Secretary Burwell, your Administration and many of my colleagues on this Committee, 

have pointed out that more and more Americans arc concerned with the rising cost of 

prescription drugs. In fact, the President's FY17 budget proposes a number of 

solutions for Congress to consider as solutions to the problem. However, I'm concerned 

the Administration is talking out of both sides of their mouth on this issue. Since 2013, 

the FDA has considered finalizing a proposed rule on labeling changes for approved 

medicines. The rule takes an unprecedented approach to long standing laws and 

regulations requiring generics to have the same label as the brand. By some estimates, 

this change would increase the costs on the generic pharmaceutical industry by as much 

as $4 billion annually. And your Agency, in spite of receiving more than 23,000 

comments on the proposed rule, has never met with industry representatives to discuss 

it, nor have you made any effort to make a realistic estimate the rule would have on 

prescription drug costs and access. How can you tell me you're concerned about the 

rising cost of prescription drugs on one day, and then turn around and tell patients that 

you're going to finalize a rule that could add another $4 billion to the cost of their 

prescription drugs tomorrow? 

Answer: I share your concern regarding the rising cost of drugs, and like you believe that drug 

costs are not just the state and Federal governments' fastest growing cost, but also a real kitchen 

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table issue for working families and retirees. Per capita Part D costs increased by II percent in 

2014, driven primarily by increased spending on high cost drugs in the catastrophic phase of the 

benefit, which grew much faster than any other part of the program. The extremely high cost of 

certain specialty drugs raises issues about whether beneficiaries have access to the drugs that 

they need most. 

Our goal is to protect consumers' access to important drugs while encouraging research and 

innovation, and we have taken several steps to address this. The Affordable Care Act took steps 

to make Medicare drug coverage more affordable by closing the coverage gap- and 9.4 million 

seniors and people with disabilities saved over $15 billion on prescription drugs as a result. This 

year's the President's Budget also proposes to give the Secretary the authority to negotiate prices 

under the Part D program for biologics and high-cost drugs. 

Over the past several months, HHS has engaged with consumers, physicians, clinicians, 

employers, manufacturers, health insurance companies, representatives from state and Federal 

government, and other stakeholders to discuss ideas on how the health care system can meet the 

dual imperatives of encouraging drug development and innovation, while ensuring access and 

affordability for patients. This included a forum that brought together key stakeholders to share 

information focused on how to meet the overall goals of encouraging pharmaceutical innovation, 

assuring access to medications, and managing costs for Federal, state, and private health care 

purchasers. We welcome continued engagement and feedback as we work together to address 

this rapidly growing cost center, while continuing to support innovation and access. 

At the same time, we are focused on bringing new drugs to the market and encouraging 

competition and FDA is an important part of that work. FDA programs such as fast track and 

priority review help expedite getting new drugs and biologics into the hands of patients. The role 

of FDA is to ensure the safety and effectiveness of prescription drugs, both branded and generic. 

The proposed rule you reference is intended to improve the communication of important drug 

safety information to healthcare professionals and patients. FDA has received a great deal of 

public input from stakeholders during the comment period on the proposed rule regarding the 

best way to accomplish this important public health objective. 

FDA is carefully considering comments submitted to the public docket established for the 

proposed rule from a diverse group of stakeholders including: consumers and consumer groups, 

academia (including economists), health care associations, drug and pharmacy associations, 

brand and generic drug companies, law firms, state governments, and Congress. These comments 

include proposals of alternative approaches to communicating newly acquired safety-related 

information in a multi-source environment. FDA received approximately 200 comments; along 

with the one comment with over 23,000 signatures that you mention. These comments include a 

summary of FDA's meeting with the Generic Pharmaceutical Association on September 8, 2014, 

to listen to their comments and views regarding the proposed rule. 

In addition, in March 2015, FDA held a public meeting at which any stakeholder had the 

opportunity to present or comment on the proposed rule, or on any alternative proposals intended 

to improve communication of important, newly acquired drug safety information to health care 

professionals and the public. In the February 2015 notice announcing the public meeting, FDA 

reopened the comment period for the proposed rule until April 27, 2015, to allow the 

submissions of written comments concerning proposals advanced during the public meeting. 

21 
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FDA will determine next steps based on our analysis of comments on the proposed rule and 

additional information submitted as part of the public meeting. Any final rule will ref1ect FDA's 

consideration of public comments and be accompanied by an updated analysis of the economic 

impact of the regulatory change. 

4. During Dr. Robert Califrs confirmation hearing in the Senate HELP Committee he 

was asked about the status of finalizing the Supplemental Applications Proposing 

Labeling Changes for Approved Drugs and Biological Products labeling rule currently 

pending at FDA. In response to that question he said finalizing the rule was a "top 

priority" and added that "[FDA needs) to make sure that if there are problems with 

generic drugs that come up later, and they do, with better surveillance systems, that 

there's a way of making sure the labels are up-to-date and consistent across similar 

products." [emphasis added.) I believe the pending rule would require the generic 

company that identified the adverse event to unilaterally change their drug labeling 

information prior to the review and approval of the FDA, hut would NOT require the 

remaining generic companies or the brand to change their labeling; thus, continuing to 

allow for all labels of similar products to not be consistent- and conflicting directly 

with the Hatch-Waxman statute requiring "sameness", thwarting the law's objectives, 

and imposing significant confusion and costs on patients. In light of your desire to 

assure consistency and timely updates of information across similar products- a goal I 

share with you -why do you believe this proposed rule is necessary? 

Answer: The proposed rule is intended to improve the communication of important drug safety 

information to healthcare professionals and patients. FDA has received a great deal of public 

input from stakeholders during the comment period on the proposed rule regarding the best way 

to accomplish this important public health objective. 

Under current regulations, there is a difference between the brand and generic drug labeling 

during the period when FDA is reviewing a brand drug manufacturer's ·'changes being effected" 

or "CBE" supplement. Once FDA approves a change to the brand drug labeling, the generic 

drug manufacturer is required to revise its product labeling to conform to the approved labeling 

of the corresponding brand drug. FDA advises that this update should occur at the very earliest 

time possible; however, there may be a delay of varying lengths. The proposed rule, if finalized, 

would generally reduce the time in which all generic drug manufacturers make safety-related 

labeling changes by requiring conforming labeling changes within a 30-day timeframe. 

5. I am aware this proposed rule has been delayed 3 times. While I welcome those delays, 

the pharmaceutical industry deserves clarity on the Agency's intentions, especially in 

the closing months of this Administration. When will you make a final determination on 

whether to move forward with this rule? 

Answer: The Unified Agenda 11 currently lists an anticipated publication date of July 2016 for 

the final rule on "Supplemental Applications Proposing Labeling Changes for Approved Drugs 

11 Available at http.f!www.reginfo.gov/pub/icidoieAgendaViewRule" publd •201604&RIN 0910-AG94 

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and Biological Products." 12 The dates for rules in the Unified Agenda are projected dates that 

may be adjusted to reflect ongoing work on specific rules. 

6. On January 22,2014 Chairman Alexander and Chairman Upton lead a letter signed by 

twenty-eight House and Senate lawmakers noting grave concerns regarding the FDA's 

proposed rule on generic drug labeling, which would depart from more than two 

decades of established Hatch-Waxman "sameness standard" by allowing generic 

companies to unilaterally change their drug labeling information- conflicting directly 

with the Hatch-Waxman statute, thwarting the law's objectives, and imposing 

significant costs on health care consumers. Both in the proposed rule, and in the 

agency's response to this letter, the claim is made that the U.S. Supreme Court's 2011 

decision in Pliva v. Mensing somehow "alters the incentives for generic drug 

manufacturers to comply with current requirements to conduct robust post-marketing 

surveillance"- but the agency's response letter contradicts that statement by noting 

that the proposed rule "neither cites nor is based on evidence that generic drug 

manufacturers are not submitting to FDA required reports of spontaneous adverse 

event reports that they receive." It seems to me that the proposed rule is a solution in 

search of a problem. Does the FDA have any evidence or data to suggest that generic 

drug manufacturers are not complying with current reporting requirements? Has there 

been any reduction in adverse event reporting since the 2011 Supreme Court decision? 

Answer: The proposed rule focuses on the obligation to update labeling to reflect newly 

acquired information, not on the legal duties to report adverse drug events to FDA or more 

generally to meet postmarket surveillance requirements associated with adverse event reporting 

obligations. As the Agency has explained, the proposed rule neither cites nor is based on 

evidence that generic drug manufacturers are not submitting to FDA required reports of 

spontaneous adverse event reports that they receive. FDA has received a great deal of public 

input from stakeholders during the comment period on this proposed rule. 

• In the agency's response to this letter signed by twenty-eight Senate and House 

lawmakers outlining our concerns with the FDA's misguided proposed rule on 

generic drug labeling, the claim is made that during its review of a generic 

manufacturer's labeling changes in a CBE-0 supplement, the FDA "would make 

an approval decision on proposed labeling changes for the generic drug and the 

corresponding brand drug at the same time" to ensure the sameness of the 

labels, but labels could potentially be different for an indeterminate period of 

time. I am concerned that this explanation assumes that the FDA would receive 

only a single labeling change, from a single generic manufacturer, at a time. But 

we could easily imagine a scenario where multiple generic manufacturers- out 

of an overabundance of caution under the uncertain and unpredictable 

regulatory and legal environment created by this rule- submit multiple, 

potentially contradictory labeling changes to FDA at different times. How would 

the agency handle multiple labeling changes, received from multiple different 

generic manufacturers? And wouldn't this scenario result in multiple, different 

labels for identical products over an extended period? 

12 All responses are accurate as of February 24,2016. 

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20087.041

Answer: In the proposed rule, FDA considered the scenario in which generic drug manufacturers 

submit CBE-0 supplements with labeling changes that differ from each other and from the 

corresponding brand drug. FDA is carefully considering comments submitted to the public 

docket established for the proposed rule from a diverse group of stakeholders, including 

comments proposing alternative approaches to communicating newly acquired safety-related 

information in a multi-source environment. 

7. In a Senate HELP letter to the FDA regarding the agency's generic drug labeling rule, 

the Committee raised concerns with the provision in the rule that creates a public 

website where proposed label changes would be published before FDA consideration, 

since it would undermine the FDA's current role as the gatekeeper and deciding 

authority for changes to a drug's label. I remain concerned that by publishing this 

information prematurely, without J.'DA approval, the rule could provide the public and 

health care providers with potentially inaccurate and misleading information. How can 

health care providers, and the public, have confidence in the accuracy of this 

information? 

Answer: FDA's current regulations permit certain labeling changes based on newly acquired 

information about an approved drug to be implemented upon receipt by FDA of a supplemental 

application that includes the change. These supplements are commonly referred to as "changes 

being effected" or "CBE" supplements. FDA allows drug manufacturers to communicate certain 

safety-related labeling changes upon receipt by FDA of a CBE supplement-- and prior to FDA 

approval of the proposed labeling change-- in the interest of public health. FDA carefully 

reviews any labeling change proposed in a CBE supplement, as well as the underlying 

information or data supporting the change, and FDA has the authority to accept, reject, or request 

modifications to the proposed changes as the Agency deems appropriate. 

The Honorable Tim Murphy 

I. Section 223 of the Protecting Access to Medicare Act of2014 creates a demonstration 

project for new Certified Community Behavioral Health Clinics and one of the 

requirements for these new outpatient mental health clinics is that they "improve 

availability of, access to, and participation in assisted outpatient mental health 

treatment in the State." Now that the planning grants have gone out, can you please 

detail how this their criteria was in the decision making process for awarding the grants 

under Section 223 of the Protecting Access to Medicare Act of 2014? 

Answer: Award of the planning grants was based on the requirements in the statute. As you 

know, Pennsylvania was one of the funded states. Planning grant requirements are to solicit input 

with respect to the development of such a demonstration program from patients, providers, and 

other stakeholders; certify clinics as certified community behavioral health clinics (CCBHC) for 

purposes of participating in a demonstration program; and establish a prospective payment 

system for mental health services furnished by a certified community behavioral health clinic 

participating in a demonstration program. Selection of states participating in the demonstration 

program will be prioritized based on State plans that best meet the requirements in the law. 

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2. Section 224 of the Protecting Access to Medicare Act of 2014 establishes an Assisted 

Outpatient Treatment Grant Program For Individuals With Serious Mental Illness 

which was funded at the end of last year. Can you please provide an update on where 

the grants established under the stand in terms of being able to award the funds? 

Answer: The funding opportunity announcement will be issued this Spring, with an anticipated 

award date before the end of the fiscal year. 

3. When and how was the Common Data Platform (CDP) developed for the Substance 

Abuse and Mental Health Services Administration (SAMHSA)? 

Answer: Throughout the life of the contract, the CDP had several Contracting Officer 

Representatives (CORs) and Alternate CORs overseeing the contract implementation. These 

individuals were part of CBHSQ and reported up the chain of command to the CBHSQ Deputy 

and Center Director, who reported to the Office of the Administrator. 

The oversight of the CDP project was done by SAMIISA personnel; however, as the CDP's 

technical difficulties became increasingly evident, aspects of the approach to rectify the situation, 

including the decision to shut down the system and procure a new contract, were overseen and 

monitored by personnel from the Department. In addition, staff from the Department provided 

assistance and oversight in developing the next procurement. 

SAMHSA has taken steps to ensure a more comprehensive management approach. The new 

effort involves leadership across SAMHSA and is managed by a cross-Agency Governance 

Council comprising Deputies from all four Centers as well as the Office of Financial Resources. 

4. What was its intended purpose within the grants management system? 

Answer: The intended purpose of the Common Data Platform (COP) was to enable SAMHSA 

to collect and report data uniformly across its non-formula-based grantees. The intention was to 

provide SAMHSA staff access to uniform reports by which to manage its grant programs as well 

as to provide staff and leadership access to aggregate information across SAMHSA · s grant 

programs. The effort was also intended to case grantee burden for those who had grants from 

multiple SAMHSA Centers. 

Please describe: 

5. Under which legislative or regulatory authority were CDP-related funds allocated? 

Answer: CDP funding was appropriated under the statutory authorities Sections 501 and 505 of 

the Public Health Service Act, 42 U.S.C. 290aa and 42 U.S.C. 290aa-4. This funding is part of 

the Performance and Quality Information Systems funding line of Health Surveillance and 

Program Support. 

6. When and why the solicitation notice for CDP was developed and published? 

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20087.043

Answer: The CDP solicitation was published to procure a system for SAMHSA to provide 

access to uniform information, management reports, and data as described above. The 

solicitation, via a Request for Task Order Proposal, was issued on May 3, 2013. 

7. Which grant program(s) is/was CDP intended to support? 

Answer: CDP was intended to support SAMI-ISA's non formula-based grant portfolio across its 

three programmatic Centers. 

8. What were the specific deliverables and tasks required of the contractor in the CDP 

contract? 

Answer: The primary tasks and dcliverables of the contract were the development and 

implementation of a real-time data entry and reporting system for the collection and reporting of 

SAMHSA discretionary grant data. Specific tasks included: management, reporting, existing 

data management and archival database work, development and implementation of common data 

collection and reporting system, training and TA, and transition services. 

9. What procedure(s) were used to develop and award this contract? 

Answer: SAMHSA issued the Request for Task Order Proposal using the NIH NIT AAC CIOSP3 Small Business vehicle. NITAAC is an OMB-authorized government-wide acquisition 

contract (GW AC) for IT acquisitions. Once proposals were received, offerors' proposals were 

rated using an objective Technical Evaluation Panel (TEP) of federal employees. The contract 

was awarded to the offeror with the highest technical score and the lowest bid. 

10. Which contractor won the bid and is/has administered CDP for SAMHSA grantees? 

Answer: ACE Info was the contractor who won the bid and administered SAMHSA 's CDP. 

II. Have additional contracts or contractors been engaged to supplement the original 

process? If so, why'! 

Answer: Other contracts were not engaged to supplement the original CDP. A corresponding 

contract to provide training and technical assistance was released at the time of the CDP and was 

part of the original process. No additional contracts were used to supplement the COP during the 

system's operation. 

12. Who at SAMHSA is/was responsible for overseeing the CDP contract? Was there 

oversight by the HHS Secretary or other authorities other than SAMHSA personnel? 

Answer: Throughout the life of the contract, the CDP had several Contracting Officer 

Representatives (CORs) and Alternate CORs overseeing the contract implementation. These 

individuals were all part of CBHSQ and reported up the chain of command to the CBHSQ 

Deputy and Center Director, who reported to the Office of the Administrator. 

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20087.044

In order to ensure a more comprehensive management approach, the new effort involves 

leadership across SAMHSA. The new effort is managed by a cross-Agency Governance Council 

comprising Deputies from all four Centers as well as the Office of Financial Resources. 

The oversight of the COP project was only done by SAMHSA personnel; however, as the COP's 

technical difficulties became increasingly evident, all aspects of the approach to rectify the 

situation, including the decision to shut down the system and procure a new contract, were 

overseen and monitored by personnel from the Department. In addition, staff from the 

Department provided assistance and oversight in developing the next procurement. 

13. How many grantees (actual number aud percentage of total) had significant problems 

using CDP to enter consumer data that they are legally required to collect and submit 

to SAMHSA during FY2015? How many phone calls, emails and letters were received 

by SAMHSA from grantees that were unable to use CDP to report required 

information? 

Answer: SAM l-ISA received over 450 grantee notifications of technical difficulties to a central 

SAMHSA mailbox. In addition to these contacts. GPOs across SAMHSA received numerous 

phone and email contacts for all grant portfolios reporting issues. Some grant portfolios, e.g. 

Addiction Technology Transfer Centers and Access to Recovery, opted to utilize a single point 

of contact to relay concerns directly to SAMHSA leadership on behalf of the entire grant 

program. 

14. Has SAMHSA communicated with grantees in a prompt and clear manner about 

resolving any data collection problems involving CDP and/or to provide alternative 

reporting methods? 

Answer: Yes, SAMHSA Project Officers were communicating regularly with grantees regarding 

COP and issues grantees were having. SAMHSA leadership communicated formally with 

grantees in May, July, and October of20 15 alerting them to the status of the CDP and the plan to 

revert to legacy systems for reporting. All SAMHSA grantees arc currently using legacy 

systems for reporting. SAMHSA has received no inquiries or concerns from grantees on these 

systems. 

15. After months of advising grantees to retrain their staff to use a previous "Legacy" data 

collection tools (in lieu of the COP-compatible tool), why did SAMHSA wait until the 

day after SAMHSA's own deadline (wasting precious grantee resources) to rescind this 

instruction? 

Answer: SAMHSA has not rescinded its instruction for grantees to usc a previous legacy data 

collection tool; SAMHSA grantees are currently using legacy tools on which they have all been 

trained. 

16. Were General Project Officers (GPOs) given sufficient information and support to 

assist Grantees who were unable to use CDP to report data that they arc legally 

required to report? 

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20087.045

Answer: Project Officers were given initial training on the COP; however, technical difficulties 

proved too great to enable GPOs to use the system effectively. 

17. Were GPOs or their supervisors admonished to limit communications with grantees 

complaining about CDP for extended periods of time? Why was a GPO or their 

supervisor criticized for thoughtfully writing to (assigned) grantees to mitigate 

confusion about the contingency plans and data collection tools SAMHSA suggested 

(and then reversed) when CDP became unusable? 

Answer: SAMHSA leadership was never made aware of any admonishment of GPOs for 

communicating about COP. No guidance was ever given to supervisors or Center leadership to 

deliver such admonishment. 

18. Did SAMHSA relieve grantees of their legal reporting burden? 

Answer: Grantees were not relieved of any statutory or legal reporting burden. Grantees were 

required to continue official reporting such as continuation application, financial reports, and 

progress reports. Grantees were directed to continue to collect performance data for future 

submission once system issues were resolved. 

t 9. What specific outcome data has been developed from SAMHSA grantee data collected 

through CDP during FY 2015? How does the quantity and quality ofSAMHSA's 

outcome data differ from the quantity and quantity of outcome data that was expected 

from grants? How much money has SAMHSA expended on CDP to date'? 

Answer: FY 2015 outcome data were not available through the COP. The data collected 

through the CDP were not usable for outcomes reporting. The quality of the data collected 

through the COP differed greatly from the quality collected through previous legacy systems 

which contained automated validation and verification checks on the data. The COP did not 

contain these automated checks. The total spent on the CDP from the inception of the contract 

through its completion was $10,558,388. 

20. How much money did SAMHSA spend in FY2015 trying to resolve CDP problems or 

(in efforts) to replace the CDP system'! Did this money come from administrative or 

service program allocations? How were funds to fix or replace CDP identified, by 

whom, and were these approved by appropriate oversight authorities? 

Answer: SAMHSA spent an additional $1.8M for a modification to the ACE Info contract to 

attempt to resolve issues with the development and implementation of the COP. In addition, 

SAMHSA spent $7.6M to restore the legacy systems to cover a critical gap and assure continued 

compliance with reporting. Funding for these activities was primarily generated from delayed 

implementation of various initiatives within the CBHSQ portfolio. 

21. Is each state that receives a Projects for Assistance in Transition from Homelessness 

(PATH) grants required to document what they had spent on services for their 

homeless citizens (with behavioral health problems) and submit documentation that the 

state had continued its spending level at the same or greater level that it had prior to 

28 
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20087.046

receiving this federal money, or in other words required to show a "maintenance of 

effort (MOE)'"? 

Answer: Yes, states that receive a PATH grant are required to document what is spent on 

services, and submit an assurance that they are meeting the maintenance of effort requirement. 

22. How has SAMHSA instructed states to establish and submit documentation of their 

baseline spending levels and compliance with the PATH MOE? 

Answer: Since FY 2012, SAMHSA has been assessing state MOE compliance during the fiscal 

and programmatic site monitoring visits. If it is determined that a state has not adequately met 

the requirement, SAMHSA issues a required follow-up action statement in the site visit 

report. States who have received these statements are addressing the required corrective 

actions. Further guidance has been developed and will be issued to all states in summer 2016. 

23. How many states that received PATH funding submitted their baseline and yearly 

MOE documentation to SAMHSA? How many were required to do so by law? Has 

SAMHSA received requests from states for help in fulfilling this reporting obligation? 

Answer: There is no specific statutory requirement for states to provide baseline data. The 

submission of baseline data will be requested through the SAMHSA-developed MOE guidance 

once we share it with states. All states submitted signed assurances regarding MOE compliance. 

SAMHSA has received requests for technical support, and as indicated above, guidance is 

forthcoming. 

The Honorable Michael C. Burgess 

The Office of Refugee Resettlement (ORR) is responsible for taking tcmpora1-y custody of 

unaccompanied children crossing the border, and for placing them with a custodian 

capable of caring for them while immigration proceedings arc underway. ORR officials 

have acknowledged that, in recent years, their office relaxed standards for background 

checks of potential sponsors. ORR only checks on children after they arc placed with 

sponsors in a small number of cases. There have been reports of these children becoming 

victims of human trafficking, being neglected and abused, and being lost in the system 

forever. Over the course of several years I have had several meetings and asked very 

specific questions, but been unable to gain specific information from this Administration 

about the processes and policies in place to ensure it is not prioritizing volume over 

integrity in dealing with these children. In multiple meetings with ORR, and in a briefing 

to Committee staff, ORR has claimed that HHS has no statutory authority to take action to 

ensure the safety and wellbeing of a child post-placement, but ORR has failed to cite any 

statute limiting such authority. A February 11,2016, letter sent by members of the Energy 

and Commerce Committee to the Secretary requested specific information to explain the 

Department's legal position by February 25, 2016-IIHS has failed to provide such 

information. Please provide a response to the following questions: 

I. On what grounds does HHS claim the Department has no statutory authority to ensure 

for the well-being of children after they arc placed with sponsors? Please explain HHS's 

legal position. How is this position consistent with the Department's policy to follow up 

29 
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20087.047

with some unaccompanied children after they are placed with sponsors in limited cases? 

If HHS has no authority, which agency docs? Has HHS discussed this issue with other 

agencies such as the Department of .Justice or the Department of Homeland Security? 

Explain. 

Answer: HilS's longstanding view across administrations is that, under the authorities governing 

the Unaccompanied Children Program, once a child is released to a sponsor, ORR's legal and 

physical custody terminates. ORR's Unaccompanied Children Program is authorized by and 

operated in accordance with the Homeland Security Act of2002 and the Trafficking Victims 

Protection Reauthorization Act of2008 (TVPRA) The program is also operated consistent with 

the Flores Settlemenr Agreement. The authorities and the resources given to the Unaccompanied 

Children Program in ORR establish a system that is intended to temporarily care for children 

while in our physical custody, and releasing children to appropriate sponsors as expeditiously as 

is safely possible. 

But the fact that ORR's custody ends upon release does not mean that its commitment to 

providing resources, connecting children and sponsors to services, and protecting vulnerable 

children from abuse or exploitation ends. HilS has authorities that permit it to provide a range of 

services and resources after a child is released from the agency's custody, and it makes use of 

that authorization to establish policies and procedures that, among other things, are intended to 

protect those children that may be vulnerable to abuse or exploitation. ORR's ability to provide 

these services is hindered by the uncertainty of the total program needs compared to resources 

available. Budgeting for the unaccompanied children's program is particularly challenging for 

l-IHS because funding for the program is set at the beginning of the fiscal year, when the number 

of children who will require services and the timing of their referral to llHS is unknown. For 

these reasons, the President's FY 2017 Budget again proposes a contingency fund that would 

provide additional resources to serve unaccompanied children, if referrals exceeded what could 

be accommodated within existing resources. If enacted, the contingency fund would help ensure 

ORR had sufficient capacity to adjust to large and unpredictable fluctuations in need and more 

deliberately plan for all components of the program including post-release services. 

Within its current authorities, ORR deploys its resources in order to provide post-release services 

as effectively as possible. ORR provides post release services for any child who received a home 

study on a case-by-case basis if it is determined the child has mental health or other needs. 

In July 20 !5, ORR began a pilot project to provide post-release services to all unaccompanied 

children released to a non-relative or distant relative sponsor, as well as children whose 

placement has been disrupted or is at risk of disruption within 180 days of release and the child 

or sponsor has contacted ORR's hotline. 

In May 2015, ORR expanded the capability of an existing telephone hotline, which had 

traditionally been used to help parents locate children in ORR custody. Now the hotline accepts 

calls from children with safety-related concerns, as well as from sponsors with concerns or who 

need assistance connecting to community resources. Every child released to a sponsor is given a 

card with the hotline's phone number on it (Spanish language access as well) and all providers 

and sponsors are also provided with the hotline phone number. 

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20087.048

Starting last summer, care providers now call each household 30 days after the child is released 

from ORR care to check on the child's wellbeing and safety. 

If any of ORR's provider grantees or staff has reason to believe that a child is unsafe, they 

comply with mandatory reporting laws, state licensing requirements, and federal laws and 

regulations for reporting to local child protective agencies and/or law enforcement. 

2. Section 218(b) of the Protecting Access to Medicare Act (PAMA) (PL-113-93) 

established criteria to mandate the consultation of appropriate usc criteria (AU C) by 

ordering physicians prior to referring Medicare patients for select advanced diagnostic 

imaging services. This PAMA legislative policy, which passed the Congress with strong 

bipartisan and bicameral support, was scheduled to go into effect January 2017. This 

policy was intended to ensure proper utilization of advanced imaging studies based on 

clinical evidence, rather than merely burdening access with arbitrary 

restrictions. Despite the passage ofPAMA AUC provisions, the Obama 

Administration's Fiscal Year 2017 Budget for the Department of Health and Human 

Services, once again, calls for the implementation of a Medicare prior authorization 

program. Can you please update the committee on the January 1, 2017 effective date 

for the PAMA imaging AUC policy? Will the agency meet the January 1, 2017 effective 

date by which ordering physicians must begin consulting imaging appropriateness 

criteria as a condition for Medicare payment? If the Agency will not be meeting the 

January I, 2017 deadline, please explain why a delay is necessary, as well as when CMS 

expects to finalize implementing regulations? 

Answer: We believe the best implementation approach is one that is diligent, maximizes the 

opportunity for public comment and stakeholder engagement, and allows for adequate advance 

notice to physicians and practitioners, beneficiaries, AUC developers, and Clinical Decision 

Support mechanism developers. The number of clinicians impacted by the scope of this program 

is significant, as it will apply to every physician and practitioner who orders applicable 

diagnostic imaging services. This crosses almost every medical specialty and could have a 

particular impact on primary care physicians since their scope of practice can be quite vast. It is 

for these reasons we proposed a stepwise approach, adopted through rulemaking, to first define 

and lay out the process for the Medicare AUC program. In the Calendar Year (CY) 2017 

Physician Fee Schedule (PFS) rulemaking process, we will begin to identify priority clinical 

areas and expand them over time. We anticipate including further discussions and adopting 

polices regarding claims-based reporting requirements in the CY 20!7 and CY 2018 PFS 

rulcmaking cycles. Also, in future rulemaking, we will develop and clarify our policy to identify 

outlier ordering professionals. We recognize the importance of moving expeditiously as well as 

ensuring transparency and working with stakeholders to accomplish a fully implemented 

program. 

The Honorable Leonard Lance 

Last August, the U.S. Court of Appeals for the D.C. Circuit issued a decision interpreting 

the Federal Vacancies Reform Act of 1998 that would prohibit various acting federal 

officers from serving in positions for which they have been nominated. The Department of 

Justice filed a petition seeking further review of the case by the entire D.C. Circuit, which 

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was subsequently denied. A Washington Post article covering this story quoted the Justice 

Department saying a recent D.C. Circuit court decision casts a "legal cloud" over a number 

of acting government officials. The Justice Department wrote "the service of 

approximately a dozen current acting officers would be subject to question under the 

panel's opinion, including senior officials in the Department ... of Health and Human 

Services." 

I. Have you been briefed, or have you asked for a briefing, about the impact of the court's 

decision on the Vacancies Reform Act on the actions of certain senior HHS acting 

officers? If not, will you ask for such a briefing? When? 

2. Have you requested what changes will be made to be in compliance with the Vacancies 

Reform Act? If not, why not? 

I'm particularly concerned about this as it relates to the Anti-deficiency Act. As you know, 

this Act prohibits federal employees from making or authorizing an expenditure from, or 

creating or authorizing an obligation under, any appropriation or fund in excess of the 

amount available in the appropriation or fund unless authorized by law. 

3. According to a recent HHS financial audit "HilS's management determined that it may 

have potential violations of certain provisions of the Anti-Deficiency Act related to 

FY2014 and F2015 obligation of funds for conference spending and a potential violation 

related to the appointment of a presidentially-nominated official with the required 

information." Are you aware of these potential violations? Has any action been taken to 

address them? 

Answer: We arc aware of both matters and I have discussed the Vacancies Reform Act with the 

Office of the General Counsel. On conference spending, the consolidated appropriations acts for 

each of FY s 2013- 2015 included a government-wide general provision that limited the 

availability of funds appropriated in those acts, or any other acts, for expenses of conference 

activities that are not in compliance with OMB's memorandum M-12-12, dated May 11, 2012; 

which requires that such expenses be approved by certain specified agency officials prior to use 

of funds for such purposes. HI-IS has worked intensively to assure compliance with those 

appropriations acts provisions that restrict the usc of funds for conference expenses. Currently, 

the Department is reviewing the use of ACF's appropriations to award contracts for the 

performance of services in support of an ACF conference to determine if such obligations 

complied with the applicable appropriations acts provisions. With respect to the appointment of 

the agency official to which the audit referred, HHS is reviewing whether an !IHS appropriation 

was used to pay for the services of an individual who was carrying out the responsibilities of a 

position that required Senate advice and consent after the second nomination for that individual 

was returned to the President in violation of a government-wide general provision that prohibits 

the use of appropriations for such purpose. We are committed to being responsible stewards of 

taxpayers' funds in these areas and across our programs. 

The Honorable Brett Guthrie 

I am a cosponsor of Rep. Reichert's legislation, H.R. 2649, the Medicare Secondary Payer 

and Workers' Compensation Settlement agreements Act. This legislation includes 

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20087.050

language to authorize payment of amounts for future medical in workers' compensation 

settlements to be paid directly to meet MSP future medical obligations. HHS included in 

its FY 2017 budget request a provision to enable CMS to accept sum certain payments to 

meet Medicare Secondary Payer obligations, which projects $63 million in savings over the 

budget period. 

1. Would you please provide the data and assumptions used to determine the budget 

savings? 

2. In addition, has CMS provided technical assistance regarding H.R. 2649 to 

Congressional supporters and stakeholders? If not, would you please work with 

Congressional supporters and stakeholders on this issue? 

Answer: CMS has received a request for technical assistance on this legislation, and would be 

happy to discuss further with your office. 

The Honorable Morgan Griffith 

The Center for Medicare and Medicaid Innovation (CMMI) will be testing enhanced 

medication therapy management (MTM) models designed to find innovative approaches to 

MTM that will result in more efficient outreach and targeting of beneficiaries and create 

better alignment of program incentives. 

1. Given the important role retail community pharmacies play in medication 

management, how does CMMI plan to ensure that there is robust community 

pharmacy participation in the enhance MTM models? 

Answer: CMS believes that pharmacists serve a vital role in ensuring that Medicare 

beneficiaries receive and properly use the prescription drugs upon which they rely. The 

Enhanced MTM model aligns financial incentives and grants flexibility for basic, stand-alone 

Prescription Drug Plans (POPs) to test MTM interventions that could include increased reliance 

upon the pharmacist as a trusted community resource to ensure that targeted beneficiaries are 

taking their medications accurately and appropriately. 

When announcing the model, CMS noted that it expects sponsors to rely more heavily on more 

personalized strategies, such as contacts from trusted community pharmacists or their medical 

providers, because in many cases these will be more effective than call-center or mail contacts 

from the PDP. 

Moreover, CMS noted that it expects to see plan sponsors suggest protocols involving multipronged, proactive, and persistent efforts to make contact with Medicare beneficiaries and ensure 

their on-going participation and engagement, as well as use of diverse communication modalities 

such as person-to-person interactions, phone calls, and trusted community contacts and 

relationships (including community pharmacists and prescribers) to achieve significant 

engagement rates. 

2. Will the agency partner with Part D plans that propose to utilize retail pharmacies in 

their enhanced MTM model? 

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Answer: CMS is granting basic, stand-alone PDPs the flexibility to design enhanced MTM 

programs that incorporate interventions beyond the standard MTM programs under Medicare. As 

a result, plans may propose an expanded range of MTM activities, including contracting with 

pharmacists to provide enhanced engagement or other services. Any financial compensation to 

pharmacists under this model would be provided by the participating PDP or contracted vendors, 

not CMS. 

3. Additionally, does CMS plan on using its authority to expand successful approaches to 

the entire Part D MTM program before the end of the five year testing period? 

Answer: Under statute, successful Innovation Center models can be expanded if they either 

reduce Medicare expenditures without reducing the quality of care or improve the quality of care 

without increasing expenditures. If the Enhanced MTM model proves successful and satisfies 

these criteria, it could potentially be expanded (including on a national basis) under this 

authority. 

In addition to possible formal expansion, the results of this model could also be used to inform 

policy in other ways. Specifically, lessons from this model could inform potential changes to 

MTM policies and rules in integrated care models, or be adopted by other types of health plans, 

such as those in state Medicaid programs or exchange plans. 

In responses to Questions for the Record from testimony before the committee in July, 

Vikki Wachino, the head of the Centers for Medicaid and Chip Services (CMCS), claimed 

"the Secretary does not have the authority to permit a state to require Medicaid 

beneficiaries to work or receive job training because that is not an objective of Title 

19." Yet, at the same time, CMS has approved federal funding under 1115 waivers for 

designated state health programs (DSHP) for "DISH-pee") that provide job training. For 

example, one funded DSHP provides pre-vocational services for individuals with 

disabilities to help prepare them for paid employment. CMS states that this promotes 

Medicaid program objectives because the services can lead to better outcomes for Medicaid 

and low-income individuals. 

4. So, could you explain why you think CMS can fund pre-vocational services, but not 

approve required vocational engagement for the non-disabled population? 

Answer: Pre-vocational services for people with disabilities are a long-standing clement of 

Medicaid's benefit package. They involve services supporting improved function, including both 

physical and cognitive therapies. Pre-vocational services are designed to facilitate the ability of 

individuals to attain and maintain competitive employment. As such, they should be provided 

for a time-limited period in which individuals with disabilities are given the skills necessary to 

seek employment according to their strengths and preferences, such as: effective communication 

with supervisors, colleagues and customers; workplace conduct; the ability to follow directions 

and complete tasks; and problem solving skills. Medicaid funds pre-vocational services primarily 

through the home and community-based waiver and state plan authorities. This is one example 

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of a way in which CMS promotes employment among Medicaid beneficiaries without requiring 

employment as a condition of Medicaid eligibility. 

5. Since CMS has denied several requests from governors to utilize work requirements 

for the non-disabled population, I assume CMS examined this issue in some legal 

depth. Can you share such analysis with the committee? 

Answer: In reviewing state proposals for section 1115 demonstration programs, CMS does 

consider encouraging work an important state objective and has worked with states to develop 

approaches that encourage work and job training participation. Section 1115 of the Social 

Security Act gives the Secretary of Health and Human Services authority to approve 

demonstration projects only if they promote the objectives of the Medicaid and CHIP programs. 

However, requiring Medicaid beneficiaries to work or receive job training is not an objective of 

Title XIX. Consequently, 1115 demonstration programs may include services such as prevocational services that aim to promote the overall health of Medicaid beneficiaries involved, but 

Medicaid funding may not be used for work requirements or other work programs that have the 

primary goal of promoting work rather than promoting health. As noted earlier, the structure of 

the ACA is built on every American having a guarantee of access to affordable health insurance. 

We cannot condition that access on any requirement including work. I also noted earlier that we 

have approved demonstrations in which states promote employment through state programs 

outside of Medicaid. 

6. What do you make of the various studies that show how employment can help boost 

self-esteem, health, and lead to better outcomes for low-income individuals? 

Answer: Most Medicaid beneficiaries are employed or are in households where someone is 

working. In 2013, 79 percent of children who were Medicaid beneficiaries lived with at least one 

worker; 65 percent lived with at least one full-time worker. That year, 65 percent of adults with 

Medicaid were in a family with a worker; half were in a family with at least one full-time 

worker. Adults who qualify for Medicaid may be working but earning low wages and may not be 

able to afford private coverage. With Medicaid, such workers have health coverage and are likely 

to have a usual source of care, which helps them stay healthy and remain productive on the job. 

Such studies support section 1115 demonstrations including limited programs that help prepare 

beneficiaries for the workforce as a means of improving the health and wellbeing of those 

beneficiaries. This includes pro-vocational services for individuals with disabilities. The 

Medicaid program contains a number of incentives for beneficiaries to enter the workforce or to 

increase their hours. 

Additionally, health coverage through Medicaid promotes individuals' health and ability to 

participate in the workforce. There are several examples of how Medicaid promotes 

employment: First, in the case of individuals with disabilities, Medicaid disregards a certain 

amount of earnings in determining their eligibility for benefits; this enables these individuals to 

retain their Medicaid coverage while working. Second, for individuals with serious mental 

illness, Medicaid can provide supportive employment services to help these individuals find and 

maintain employment. I also note that as a result of Congressional action on MACRA, Medicaid 

continues to provide up to one year of transitional coverage for individuals who lose cash 

assistance due to earnings from employment. 

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The Honorable Gus Bilirakis 

HilS's FY2015 financial audit noted that HHS management determined that it may have 

potential violations of certain provisions of the Anti-Deficiency Act related to Fiscal Year 

2014 and Fiscal Year 2015 obligation of funds relating to conference spending, and a 

potential violation related to the appointment of a presidentially-nominated official without 

the required confirmation. 

1. What conferences and what presidentially-nominated officials are in question? 

Answer: HHS is currently reviewing obligations incurred for expenses of the Administration for 

Children and Families' Community Economic Development Conferences. The appointment 

matter in question relates to payments that HHS made for services performed by the former 

Acting Director of the Indian Health Service that may have been in violation of section 749 of 

Pub. L. No. 111-8, div. D, title VU, 123 Stat. 680,693 (2009). 

2. Has HHS actually determined if there was a violation? 

Answer: The Department is reviewing whether the obligations incurred for the ACF conferences 

violated provisions in the appropriations acts that restricted the usc of appropriations for 

expenses of conference activities not in compliance with OMB M-12-12. The relevant 

appropriations act provisions require that the Deputy Secretary approve in advance any 

conference sponsored or hosted by the agency (or by other Federal or non-Federal entities) 

where the net conference expenses to be paid by agency will exceed $100,000. The Department 

plans to complete its review, and to the extent any violations are determined, it will issue the 

required reports. As to the appointment matter, the Department is in the process of finalizing its 

review. 

3. Can you provide more information about this potential violation? 

Answer: For the two conferences in question, HHS is investigating whether the amount of the 

obi igations incurred or the amount of payments made exceed $100,000. and if so, whether ACF 

obtained the Deputy Secretary's approval prior to using its applicable appropriation for the 

conferences as required by the government-wide general provisions in the appropriations acts. 

For the appointment matter, section 749 of division D of Public Law 111-8 prohibits the usc of 

appropriated funds to pay an individual to act in a position after that individual's nomination to 

that position had been withdrawn or returned twice. As soon as HHS learned there was a 

potential problem, the former Acting Director of the Indian Health Service was reassigned. 

The Honorable Renee Ellmers 

1. As a nurse, I am committed to our seniors having a strong Medicare Advantage 

program. Today, encounter data by Medicare Advantage plans includes information on 

beneficiary diagnoses and medical services received, similar to fee-for-service claims 

data. These encounter data are reported to CMS, and beginning with CY 2016 are used 

to determine Medicare Advantage enrollee risk scores for the purpose of risk adjusting 

plan payments. Currently, CMS calculates risk scores using a blend that includes 10% 

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encounter data. However, in the 2017 Advanced Notice which came out Friday, CMS 

proposes to increase this amount to 50%. Although plans have been collecting and 

reporting encounter data to CMS since 2012, ongoing operational issues have prevented 

plans from submitting accurate data in a timely fashion to CMS and receiving data 

back from CMS necessary to understand how their enrollee risk scores will be 

impacted. How does CMS propose to implement such sweeping changes to the data 

sources used to calculate enrollee risk scores before resolving the slew of operational 

issues faced by the Agency in both data collection and reporting? 

Answer: I appreciate your feedback and know that CMS understands the challenges regarding 

the usc of encounter data for risk adjustment. CMS has been and continues to work in good faith 

with plans and other stakeholders on technical and operational issues to address encounter data 

acceptance, completeness, and quality. CMS is also working closely with health plans to respond 

to their questions and make changes, where needed, to address the issues cited. CMS's goal is to 

transition entirely from using diagnoses submitted to Risk Adjustment Processing System 

(RAPS) to using diagnoses from encounter data, and CMS intends to continue transitioning away 

from a reliance on RAPS data for calculating risk scores 

Encounter data submission rates have steadily increased while error rates have steadily 

decreased. CMS expects this trend to continue to improve as more experience is gained and for 

the data to stabilize by the time this blend would be in effect. 

2. The need for our country to be better prepared against biological threats is clear and 

has been recognized by this Committee and many policy experts, including the recent 

Blue Ribbon Study Panel on Biodefense. This need follows numerous failures to deal 

adequately with a series of recent global health threats: both naturally occurring, 

including the H1N1 and HSNl influenza pandemics, SARS, Ebola and now Zika; and 

bioterrorist threats like anthrax and smallpox. There is no reason to expect these 

threats will subside. Each of these threats provoked emergency actions and an 

accelerated response from many stakeholders, often in an uncoordinated way. In all 

cases, the response required massive efforts from the private sector racing against the 

clock. This scramble was often highly disruptive, and required companies to stop 

ongoing research and development programs, as well as manufacturing. This situation 

is sub-optimal and unsustainable. An alternative platform-based approach could allow 

for more timely readiness when a threat arises. It is my understanding that vaccine 

platform technologies could now be called upon to quickly develop a Zika vaccine and 

in general respond more expeditiously to the next outbreak or threat. What is 

BARDNHHS doing to support and facilitate platform-based technologies against 

known and emerging threats? 

Answer: ASPR/BARDA has made it a high priority to support advanced development and 

implementation of platform-based technologies to more rapidly and efficiently develop vaccines 

for existing and newly emerging threats. As part of its long-term strategy, ASPR has targeted 

investment in flexible and nimble capabilities designed to meet novel challenges like those posed 

by Ebola and now Zika. Specifically in response to current challenges. in October 2015, 

ASPRJBARDA issued a Board Agency Announcement in support of medical countermeasures 

platform development. ASPRJBARDA has engaged extensively with the private sector in the 

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area of platform-based technologies and is currently reviewing proposals that will utilize these 

approaches to develop Zika vaccine candidates as well as to make these platforms available to 

respond to other existing or emerging threats. 

3. One of the most urgent and predictable threats we face as a nation is pandemic 

influenza. As you know, the 2009 HlNI pandemic, a relatively mild pandemic, killed 

18,000 Americans and sickened 600,000 more. Pandemic influenza is not just a public 

health threat, it is indeed a national security threat. But unfortunately, preparedness 

against pandemic flu threats has been largely episodic since 2009. The vast majority of 

funding provided to HHS for pandemic flu was in emergency supplemental legislation 

during an outbreak. Since that time, sustained resources for HHS' pandemic flu 

readiness programs have dramatically declined. This has led to an aging stockpile that 

HHS has demonstrated doesn't match currently circulating strains, domestic 

manufacturing capabilities that must be sustained, and private sector partners who see 

waning a commitment and aren't sure if HHS is committed to this partnership that so 

critical to our readiness. We need to be prepared for the next pandemic BEFORE it 

happens. Do you believe HHS is ready to handle another outbreak like HlNl despite 

dramatic decreases in pan flu preparedness budgets? What steps are you taking to 

improve lUIS' pandemic influenza preparedness programs? 

Answer: HHS has made significant investments and progress toward pandemic preparedness, 

including the build out of critical infrastructure that will provide significant increases in the 

production capacity of influenza vaccine needed to respond to a pandemic outbreak. HHS has 

also supported the development and licensure of new influenza vaccines, including cell-based, 

recombinant and adjuvanted vaccines that will allow us to respond more quickly with a 

diversified portfolio of available vaccines in the event of a pandemic. HHS is continually 

exploring and implementing strategies to ensure that the USG will be able to respond to a 

pandemic outbreak. These strategies include the implementation of the established Centers for 

Innovation in Advanced Development and Manufacturing (CIADMs) as well as the Fill Finish 

Manufacturing Network (FFMN) as part of the National Medical Countermeasure Response 

Infrastructure (NMRI). These ClADMs and the FFMN offer flexible and nimble approaches that 

include surge capabilities to address urgent vaccine needs in the event of a pandemic. 

ASPR/BARDA has a Broad Agency Announcement open solicitation for the advanced 

development of medical countermeasures for pandemic influenza. This solicitation supports the 

advanced development of pandemic influenza medical countermeasures including personal 

protective equipment and ventilators, influenza test systems and diagnostic tools, therapeutics 

and vaccines. 

HHS is working closely with industry partners to develop and evaluate improved influenza 

vaccines with universal potential. These improved influenza vaccines will be broadly crossprotective and elicit longer, more durable immune responses as compared to existing influenza 

vaccines. 

4. HHS' efforts to prepare for and respond to pandemic flu are unclear, unorganized, and 

underfunded. I am disappointed that your 2017 budget request does not address these 

problems. Let me read you a quote from last year's budget where you said: "[The 

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current funding level of$72 million] impedes HHS' ability to maintain existing 

programs for pre-pandemic influenza vaccine stockpiling and development of influenza 

antiviral drugs and immunotherapeutics, which are central programs to address 

critical vulnerabilities for U.S. pandemic preparedness." Given that nothing has 

changed since last year, can you describe how our preparedness against pandemic 

influenza has suffered as a result? What are you doing to ensure HHS sustains 

readiness efforts against this threat? 

Answer: The FY 17 Budget requests an increase of +53 million, for a total of $125 million to 

support activities to address pandemic influenza threats. These activities include the advanced 

development of new vaccines and therapeutics, international collaboration and capacity building, 

stockpiling of existing medical countermeasures, and vaccine manufacturing improvements. We 

appreciate the support that has been provided to develop new influenza vaccines, therapeutics, 

diagnostics and other medical countermeasures needed to address a pandemic influenza 

outbreak. We have made significant investments and progress toward pandemic preparedness, 

including the development of critical infrastructure that provides a significant increase in the 

production capacity of vaccine needed to respond to a pandemic outbreak. HHS has prioritized 

the development to licensure of new influenza vaccines, including cell-based, recombinant and 

adjuvantcd vaccines that will allow us to respond more quickly with a diversified portfolio of 

available vaccines in the event of a pandemic. HHS has also supported the advanced 

development of new influenza diagnostics, antiviral drugs, ventilators and personal protective 

equipment 

!II IS has expanded our stockpile program to include vaccines that will generate immunity to 

avian influenza viruses that are perceived to pose the greatest risk to humans. This is determined 

by a USG interagency review of emerging viruses with pandemic risk, through the 

implementation of the Influenza Risk Assessment Tool. In addition, to address the material in the 

stockpile that has been in long-term storage, HHS has and continues to conduct clinical studies to 

assess the safe and effective use of these vaccines should they be needed to respond to a 

pandemic outbreak. These clinical data are compiled with additional analytical data on the longterm stability of the stored vaccines. HHS has determined that influenza vaccines and adjuvants 

stored in the stockpile remain stable, safe and immunogenic beyond what was originally 

anticipated from prior limited data; therefore extra funding is not currently needed to replace 

these vaccines and adjuvants. We thank you for your interest in this critical issue, and 

recognizing we still have much work to do, look forward to working with you to build on this 

progress as we move forward. 

5. Larry Summers recently said that global security for infectious diseases outbreaks is an 

area where the "urgent has crowded out the profoundly important." By this he means 

that we shouldn't let the threat of the moment- whether it be Ebola or Zikaovershadow our efforts to prepare against more predictable threats like pandemic 

influenza. As you know, the 2009 HINI pandemic killed 18,000 Americans aud sickened 

600,000 more. Pandemic influenza is not just a public health threat, it is indeed a 

national security threat. What arc you doing to ensure the threat of pandemic influenza 

continues to be addressed in the midst of the urgent demands of the Zika outbreak and 

ongoing Ebola and MERs outbreak efforts? 

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Answer: HHS is committed and dedicated to sustaining the level of pandemic preparedness and 

readiness that has been built to respond quickly in the event of a pandemic influenza outbreak. 

This includes the sustainment of: critical infrastructure to produce and manufacture available 

influenza vaccines; a National Pre-pandemic Influenza Vaccine Stockpile that contains vaccine 

and adjuvant to meet requirements as set out in the HHS Pandemic Influenza Plan; the National 

Medical Countermeasure Response Infrastructure that includes flexible manufacturing 

capabilities; clinical, non-clinical, and regulatory support for rapid surge response capabilities; 

and other core capabilities needed to respond to a novel infectious disease. I am personally 

briefed on this topic, even as I continue my extensive involvement in our response to the Zika 

virus and other critical issues. 

6. Public Health England- England's Center for Disease Control and Prevention- is 

taking the assertive stance that e-cigarettes are hugely less harmful than combustible 

cigarettes. In fact, Public Health England estimates that e-cigarettes are 95% less risky 

than combustible cigarettes. Public Health England thinks that it is critical for adult 

smokers to know this and consider shifting away from burning cigarettes. Do you share 

Public Health England's view? Do you think it would be appropriate for FDA to 

prepare and implement a similar program to tell current adult smokers that the health 

risks associated with smoke-free tobacco products, specifically e-cigarettes or electronic 

nicotine delivery systems, are significantly lower than the risks associated with cigarette 

smoking? Broadly speaking, what is your agency doing to encourage smokers who will 

not quit to move to less harmful forms of nicotine? 

Answer: Much remains to be learned about the health risks or benefits of e-cigarettes. They 

could benefit public health if they encourage people who would otherwise not quit smoking to 

stop smoking altogether, while not encouraging youth or others to start use of tobacco products 

or encouraging former users to relapse back to tobacco use. On the other hand, e-cigarettes could 

be a detriment to public health. E-cigarettes have the potential to re-normalizc smoking, 

encourage youth to initiate smoking, and/or prompt users to continue or to escalate to cigarette 

use-in effect, reversing the meaningful progress tobacco control initiatives have achieved to 

date. Other reported e-cigarette risks include dermal exposure to nicotine, childhood poisoning 

events, and physical harm from defective products (such as exploding batteries). Anecdotes 

illustrating both benefits and harms abound, but it is definitive scientific evidence that should 

drive the actions taken with respect toe-cigarettes. 

It is important to be aware that there are notable differences between the U.K. and the U.S. ecigarette marketplace. These include the sharp increase in youth usage of e-cigarettes in the 

United States. 

The 2015 National Youth Tobacco Survey found that between 2011 and 2015, current e-cigarette 

usc among high school students increased nearly 900 percent. This sharp increase in youth usage 

in the United States is of great concern. While youth usage in the U.K. has gone up, it hasn't 

gone up 900 percent. 

FDA is tasked with understanding the population level impact of e-cigarettes, which includes an 

assessment of the potential benefits and potential harms ofe-cigarettes. FDA is committed to 

using an evidence-based approach in applying the principles of harm reduction to tobacco 

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regulatory policy. Pre-market review of new tobacco products is one of FDA's core consumer 

protection responsibilities. Scientific evidence may demonstrate that certain products are less 

harmful than others at an individual level, but under the law FDA must also take into account the 

impact of the products on the health of the population as a whole, including both users and nonusers of tobacco products, in making regulatory decisions about these products. 

The Honorable Susan Brooks 

Secretary Burwell, as you know, Congress created Project BioShield's Special Reserve 

Fund (SRF) in 2004 for material threats and over the last decade, SRF funds have been 

used to stockpile millions of doses of drugs and vaccines against threats like anthrax, 

smallpox, nuclear radiation- and hopefully soon against Ebola and Zika. 

HilS released a budget last year for the SRF where you planned to procure over $870 

million in medical countermeasures in 2017. Yet this year's budget request only asks 

Congress for $350 million, about 40% of this amount. This request would decimate Project 

BioShield and our nation's preparedness against numerous biological threats and is 

actually in direct contradiction with your previous MCM plans. 

I. Do you understand the tremendous uncertainty you've created for your private sector 

partners by asking Congress to gut Project BioShield? 

2. Which MCM projects are you planning to scrap if Congress reduces funding for the 

SRF? 

3. What threats will we fail to be prepared for as a result? 

Answer: Project BioShield represents the government's commitment to industry that a market 

will exist for medical countermeasures targeted against agents for which Material Threat 

Determinations (MTDs) have been issued. Because most of these agents do not produce disease 

in civilian populations under normal circumstances, many of the medical countermeasures 

directed against them have no or next to no commercial market. HHS understands the 

importance of the Project BioShield commitment and the uncertainty that may be caused by 

fluctuations in the annual appropriation provided by Congress. 

The FY 2017 President's Budget will enable us to make meaningful progress on vital medical 

countermeasure procurements. Unlike a grant or research program that supports a steady and 

recurring level of effort, the Project BioShield budget is made up of a different set of discrete 

procurements in any given year when medical countermeasures are mature enough in 

development to meet FDA requirements for accessibility under Emergency Use 

Authorization. In FY 20 I 7 the new resources will enable the Department to procure several new 

chemical, biological, radiological and nuclear medical countermeasures, including: 

New Ebola vaccines and immunotherapeutics for the prevention and treatment ofEbola 

infections; 

New high throughput biodosimetry devices to measure internal radiation exposure 

following a detonation; 

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New antibiotics for the treatment of bacterial biothreats and high priority antimicrobial 

resistant bacteria; 

New diagnostics for the detection of anthrax in exposed persons; and 

Replenishment of anti-neutropenia cytokincs for the treatment of radiation-induced blood 

illnesses. 

At this time, ASPR is not planning to eliminate any medical countermeasure acquisition 

programs as a result of the reduced request. ASPR is currently working with the Department 

of Homeland Security to refresh the Material Threat Assessments (MTAs) and medical 

consequence modeling that inform HHS's medical countermeasure requirements and 

acquisition targets. The new requirements will incorporate: I) updated threat information, 

including a range of plausible scenarios identified in the new Anthrax MTA, 2) revised public 

health and medical consequence assessments, 3) consideration of desired MCM product 

characteristics, and 4) assessment of the national ability to effectively use anthrax MCMs in an 

emergency. These updated requirements, and the acquisition targets stemming from them, will 

be incorporated into research and development funding priorities and procurement decisions, 

including the 2016 Strategic National Stockpile (SNS) Annual Review (which will inform 

sustainment and procurement decisions for the SNS as early as FY 17). The revised MT A 

process underscores the fact that preparedness represents a spectrum; there are few threats for 

which we arc fully prepared and none for which we are entirely unprepared. The challenge the 

Public Health Emergency Medical Countermeasures Enterprise (Pl IEMCE) faces, given the 

inevitable funding constraints, is to allocate resources in a way that provides the greatest 

degree of preparedness against the greatest range of threats. 

ASPR and the PHEMCE are committed to maintaining our national preparedness and making 

sure that medical countermeasures are available when needed. Maintaining stockpiles of 

medical countermeasures typically entai Is large procurement costs and is associated with 

substantial carrying costs. In an era of constrained resources, BARD A and its PHEMCE 

partners are mindful of the need to meet established requirements, sustain preparedness, and be 

good stewards of the taxpayers' investments. To this end, the PHEMCE is currently working 

to refresh the material threat assessments that form the foundation for our requirements, many 

of which have not been reassessed in years. ASPR, for its part, emphasizes innovative 

approaches to totallifecycle cost-containment and strives to decrease the long-term costs of 

stockpiling medical countermeasures. 

Secretary Bunvell, just last week our colleagues on the Appropriations Committee sent a 

letter to the Office of Management Budget in response to the Zika virus funding request for 

$1.8 billion, The letter specifically spells out the fact that $1.4 billion is unobligated at HHS 

and $1.031 billion is unobligated at CDC. 

4, Can you please expand on what funds are currently available for the Zika response? 

Answer: The Administration is committed to taking necessary steps, as quickly as possible, to 

protect the American people from the Zika virus. On February 23, 1-IHS notified Congress of our 

plans to transfer and reprogram a total of up to $50 million in Fiscal Year 2016 resources within 

the Centers for Disease Control and Prevention for immediate Zika response needs. This 

included up to $5.75 transferred from the Strategic National Stockpile (SNS) and up to $44.25 

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million re-programmed from the Public Health and Emergency Preparedness (PHEP) 

Cooperative Agreement. 

Without reimbursement, the $5.75 million reduction ofSNS will result in decreased acquisition 

of20,000 vials of anthrax vaccine that would be used to treat or provide prophylaxis to 67,000 

individuals exposed to anthrax. The $44.25 million reduction ofPHEP will result in reduced 

preparedness awards to states and cities. 

In addition, CDC is making available $18 million in unobligated balances from the Public Health 

Prevention Fund for Zika control efforts, primarily in Puerto Rico. 

But, these repurposed funds are not enough. They only allow us to address the most immediate 

needs until Congress acts on the Administration's supplemental request. Emergency 

supplemental funding continues to be urgently needed for a robust and complete response to the 

Zika virus. 11 

5. Do you need Congress to legislate to allow for the flexible use of these unobligated funds 

from HHS? Please elaborate on how these funds are currently being used. 

Answer: The repurposed funds referenced above are being used for initial activities in the areas 

of mosquito control, surveillance, lab capacity, development of diagnostics and vaccines, and 

time-sensitive research activities. 

HHS currently has the flexibility needed to use these funds as indicated above. However, there 

are not sufficient funds to support the full range of activities needed to prevent, detect, and 

respond to further transmission of the Zika virus; and additional authorities requested in the 

Administration's supplemental request are needed to ensure the most effective response, 

including: 

l) The ability to add products purchased with the supplemental funds to the Strategic 

National Stockpile; 

2) Overseas auto purchase and insurance authority to allow supplemental funds to be used 

overseas for car purchase and usage; 

3) Flexibility to avoid burdensome matching requirements on grantees related to mosquito 

control; 

4) Construction authority for grantees to allow state and local health departments and other 

grantees to use funds for facilities that may be necessary to Zika response and prevention, 

such as laboratory facilities; and 

5) Funding transfer authority to allow CDC to move supplemental funds across CDC 

accounts to be able to more quickly respond to health security issues. 

In addition, several General Provisions also support CDC's response: 

13 All responses accurate as of February 24, 2016. 

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• Expanded overseas facilities authority: This proposal would allow CDC to "acquire, 

lease, construct, alter, renovate, equip, furnish, or manage facilities" overseas without 

having to send payments through the Department of State. 

• Hiring authorities: 

a. Personal service contracts: This authority would authorize CDC to use personal 

service contracts for response staffing. Although this authority has already 

existed globally, it does not currently exist domestically. People working under 

personal service contracts would NOT be Federal Government workers. 

b. Direct hire authority: This authority would allow expedited hiring authority for 

emergency positions. 

• Reimbursement authority: This authority will allow CDC to use emergency funds to 

backfill transfers and reprogramming used before supplemental funds were available. 

The FYI7 budget request proposes to combat opioid abuse by providing significant new 

resources to the Substance Abuse and Mental Health Services Administration (SAMSHA) 

within HHS. However, the request includes a $16.9 million reduction to the Screening, 

Brief Intervention and Referral to Treatment (SBIRT) program- from $46.9 million in 

FY16 to $30 million in the FY17 request. 

The SBIRT program helps reduce the number of individuals who misuse drugs and alcohol 

and intervenes early to ensure individuals improve their health and overall quality of 

life. The Indiana University School of Medicine (IUSM)'s SBIRT Medical Residency 

Program, funded by SAMHSA through its SBIRT program, plays a key role in educating 

future physicians about problematic substance abuse. 

6. Why docs your agency propose to cut the SBIRT program at a time when these funds 

arc in such drastic need by medical schools throughout the nation'? 

Answer: Programs of Regional and National Significance, which includes the Screening, Brief 

Intervention and Referral to Treatment (SBlRT) program, are intended to be test new and 

innovative approaches. The SBIRT program has been proven to be a successful model, and states 

therefore can use Substance Abuse and Prevention Block Grant funding to support these 

services. Lessons learned from these efforts will be used by SAMHSA to develop an 

implementation package for SB!RT to encourage its development and sustainability across 

healthcare settings. 

7. How will SAMSHA absorb the proposed reduction? 

Answer: The President's Budget request for the SHIRT program will serve 145,000 individuals 

in FY 2017, and continues support for all existing grants. Given SBIRT's proven success, 

SAMHSA will continue to encourage its implementation and sustainability across healthcare 

settings. 

The President's budget request includes a ten percent cut to Indirect Medical Educationamounting to $17.8 billion in cuts over the ten-year budget window. Many academic 

medical centers, like Indiana University Health in Indiana, already fund residency slots 

beyond the amounts reimbursed by Graduate Medical Education, and bear the additional 

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costs associated with educating the future doctors my state and our nation need to meet the 

growing demand for health care providers. 

8. How can the ten percent cut to IME be anything but contradictory to the 

administrations stated goal to increase access to care? 

Answer: HHS recognizes the importance of graduate medical education and indirect medical 

education funding. Nonetheless, like any other category of Medicare spending, payments to 

teaching hospitals must be justified by incurred costs. This proposal in the President's Budget 

will help graduate medical education programs promote high quality primary care services that 

address relevant public health needs by allowing the Secretary to target funding to training 

activities most effectively. HHS believes this proposal brings these payments closer to the 

appropriate level and provides incentives for promoting high-quality primary care. 

In addition, the Teaching Health Center Graduate Medical Education (THCGME) Program 

provides funding for residency training in primary care medicine and dentistry in communitybased, ambulatory settings. The THCGME Program seeks to not only bolster the primary care 

workforce through support for new and expanded primary care and dental residency programs, 

but also to improve the distribution of this workforce into needed areas through emphasis on 

undcrscrvcd communities and populations. The FY 2017 Budget includes $60 million in funding 

appropriated in MACRA, and an additional $527 million over FYs 2018-2020 to support up to 

876 residents. 

The Honorable Chris Collins 

l. With the recent release of the final rule on Medicaid Covered Outpatient Drugs, CMS 

has altered pharmacy reimbursement through newly formulated Federal Upper Limits 

and the use of Average Acquisition Cost-based reimbursement. How will CMS ensure 

that Medicaid patients continue to have access to their critical pharmacy services under 

the provisions of this final rule? I have heard concerns about how the President's 

budget proposal seeks to calculate Federal Upper Limits based only on generic drug 

prices, thereby jeopardizing fair and adequate pharmacy reimbursement. How will 

CMS address these concerns? 

Answer: We expect Medicaid beneficiaries will benefit from the finalized provisions of the 

Medicaid Covered Outpatient Drug regulations, which are designed to help control drug costs 

and ensure adequate pharmacy reimbursement through the transition to a pharmacy 

reimbursement system based on an actual acquisition cost (AAC) and a professional dispensing 

fee. These changes will provide adequate reimbursement to pharmacies, as states are required to 

calculate reimbursement prices based on the prices actually paid by pharmacy providers. 

Further, CMS affords the states the f1exibility to adjust their professional dispensing fees, when 

necessary, to assure sufficient access. 

When states arc proposing changes to either the ingredient cost reimbursement or the 

professional dispensing fee reimbursement, they are required to ensure that total reimbursement 

to the pharmacy provider complies with the statute. They must provide adequate data such as a 

state or national survey of retail pharmacy providers, or other reliable data other than a survey, to 

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support any proposed changes to either or both of the components of the reimbursement 

methodology. Prior to the publication of the final rule with comment, many states were already 

basing their ingredient cost reimbursement on an AAC methodology without causing pharmacies 

to leave the Medicaid program or having other adverse effects on patient care. 

With respect to the calculation of the Federal Upper Limits (FULs), CMS uses the most current 

monthly National Average Drug Acquisition Cost (NADAC) data that we collect, and compare 

this data to the FULs calculated at 175 percent of the weighted average of average manufacture 

prices. In situations where that FUL amount is less than the NADAC, CMS establishes the FUL 

using a higher multiplier so that the FUL amount equals the NADAC. This ensures that 

pharmacy providers have an upper limit reimbursement that is benchmarked to an acquisition 

cost. 

The President's budget proposal would exclude innovator multiple source drugs from the 

calculation of the FUL. The FULs should only be calculated using non innovator multiple source 

drug prices. Including the brand name drug (innovator multiple source drug) in the weighted 

average unduly inflates the FUL since the brand name drug is usually significantly more 

expensive than the generic equivalents. The FUL price also does not apply to the brand name 

drug, as it is obtained through a brand medically necessary override, and then paid at the state 

payment rate for non-FUL drugs. Clarifying that only the non-innovator multiple source drugs 

will be used in the calculation of the FUL provides reasonable reimbursement to pharmacies 

while ensuring that the FUL remains cost efficient. In addition, to encourage the use of generic 

drugs, states can pay pharmacies a higher dispensing fee for generic drugs than for brand name 

drugs. 

2. The Center for Medicare and Medicaid Innovation (CMMI) will be testing enhanced 

medication thempy management (MTM) models designed to find innovative 

approaches to MTM that will result in more efficient outreach and targeting of 

beneficiaries and create better alignment of program incentives. Given the important 

role retail community pharmacies play in medication management, how does CMMI 

plan to ensure that there is robust community pharmacy participation in the enhance 

MTM models? Will the agency partner with Part D plans that propose to utilize retail 

pharmacies in their enhanced MTM model? Additionally, does CMS plan on using its 

authority to expand successful approaches to the entire Part D MTM program before 

the end of the five year testing period? 

Answer: CMS believes that phannacists serve a vital role in ensuring that Medicare 

beneficiaries receive and properly use the prescription drugs upon which they rely. The 

Enhanced MTM model aligns financial incentives and grants flexibility for basic, stand-alone 

PDPs to test MTM interventions that could include increased reliance upon the pharmacist as a 

trusted community resource to ensure that targeted beneficiaries are taking their medications 

accurately and appropriately. 

When announcing the model, CMS noted that it expects sponsors to rely more heavily on more 

personalized strategies, such as contacts from trusted community pharmacists or their medical 

providers, because in many cases these will be more effective than call-center or mail contacts 

from the PDP. 

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Moreover, CMS noted that it would expect to see plan sponsors suggest protocols involving 

multi-pronged, proactive, and persistent efforts to make contact with Medicare beneficiaries and 

ensure their on-going participation and engagement, as well as use of diverse communication 

modalities such as person-to-person interactions, phone calls, and trusted community contacts 

and relationships (including community pharmacists and prescribers) to achieve significant 

engagement rates. 

CMS is granting basic, stand-alone POPs the flexibility to design enhanced MTM programs that 

incorporate interventions beyond the standard MTM programs under Medicare. As a result, plans 

may propose an expanded range ofMTM activities, including contracting with pharmacists to 

provide enhanced engagement or other services. Any financial compensation to pharmacists 

under this model would be provided by the participating PDP or contracted vendors, not CMS. 

Under statute, successful Innovation Center models can be expanded if they either reduce 

Medicare expenditures without reducing the quality of care or improve the quality of care 

without increasing expenditures. If the Enhanced MTM model proves successful and satisfies 

these criteria, it could potentially be expanded (including on a national basis) under this 

authority. 

In addition to possible formal expansion, the results of this model could also be used to inform 

policy in other ways. Specifically, lessons from this model could inform potential changes to 

MTM policies and rules in integrated care models, or be adopted by other types of health plans, 

such as those in state Medicaid programs or exchange plans. 

The Affordable Care Act provided for the establishment of CO-OPs, which were to be nonprofit health insurers to compete with private insurers. At the beginning of the program, 

the federal government spent $2.4 billion on 23 CO-OPs. One of these CO-OPs was Health 

Republic in New York, which officially failed in November of last year, costing taxpayers 

over $265 million. 

Immediately following the failure, the Oversight Subcommittee and I contacted the HHS 

Office of Inspector General as well as your office in order to obtain the documents your 

office used I) to approve Health Republic as a CO-OP in the first place and 2) to approve 

an additional $91 million grant to Health Republic after it lost $35 million its first 

year. Your office has provided the first of these documents, but not the second. 

3. When will you provide my office and the committee the report HHS used as a basis to 

grant Health Republic additional funds? 

Answer: My staff is happy to work with your staff on this request. 

4. Why was Health Republic not put on a corrective plan like other failing CO-OPs, even 

though it had wasted more taxpayer than other CO-OPs? 

Answer: CMS did not issue a corrective action plan to New York prior to the decision to wind 

down the CO-OP. However, CMS regularly uses enhanced oversight plans (EOPs) and 

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corrective action plans (CAPs) as part of our CO-OP monitoring and oversight process, as laid 

out in the CO-OP loan agreements and recommended by the HHS OIG. CMS places a CO-OP 

on an EOP or CAP when it identifies an issue that can be resolved through corrective action. 

CMS ordered an independent audit of Health Republic in summer 2015 based on early warning 

signs about the CO-OP's finances. This independent auditor found higher losses than the CO-OP 

had expected or projected in its financial reporting to CMS. In this case, the financial problems 

confronting Health Republic appeared to be too severe to address or correct through a CAP. In 

the interests of consumers and taxpayers, CMS worked with the State Department of Financial 

Services, which is the primary insurance regulator, to wind down the CO-OP and to ensure that 

consumers would have coverage through the end of the year. 

Madam Secretary, I understand that on January 15, the World Health Organization 

(WHO) issued draft "Guidance on Ending the Inappropriate Promotion of Foods for 

Infants and Young Children." The guidance proposes to establish significant new 

restrictions and prohibitions on the promotion and marketing of milk products for young 

children up to three years of age without providing any evidence, scientific substantiation 

or an impact analysis to justify the measures. I don't understand the logic of these 

recommendations, as we continue to hear that milk and milk products are good for our 

health, most recently in HHS' own Dietary Guidelines which note that a healthy eating 

pattern includes fat-free or low free-free dairy, including milk, yogurt, cheese, and/or 

fortified soy beverages. The HHS guidelines apply to individuals age 2 and older. The 

WHO also appears to contradict the nutritious food provided to children under three in the 

Special Supplemental Nutrition Program for Women, Infants and Children (WI C). 

5. Does HHS support these WHO draft guidelines? Why? 

6. What is HHS's role in influencing WHO in this process? 

7. How can we work together to ensure the WHO is developing science-based guidance to 

prevent unintended negative health consequences for young children and potentially 

violate World Trade Organization (WTO) trade rules, including imposing restrictions 

on the use of intellectual property by brand owners? 

Answer: As requested by Member States through a 2012 World Health Assembly (WI-lA) 

resolution, the World Health Organization (WHO) developed draft guidance on ending the 

inappropriate promotion of foods for infants and young children, and presented it to the WHO 

Executive Board (EB) for potential endorsement. This draft guidance aims to support countries 

in protecting and promoting breastfeeding and supporting appropriate and timely complementary 

child feeding during the first three years of life, a critical window for health and nutrition 

outcomes. The voluntary guidance is a technical document, which is not subject to negotiation by 

Member States, and is not binding on Member States or on other actors. 

The draft guidance does not seek to prohibit the marketing of all milk products consumed by 

young children or to limit product availability. The guidance aims to complement, not replace, 

domestic and global recommendations for feeding infants and young children, including the 

WHO Code of Marketing of Breast-milk Substitutes and current recommendations on feeding 

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breastfed and non-breastfed infants and young children. The document does recommend that 

countries prohibit the promotion of breast-milk substitutes marketed for feeding children up to 

three years of age. 

WHO developed the draft guidance using a Scientific and Technical Advisory Group (STAG) 

process. The STAG was convened in 2013 and produced several reports, including a draft of the 

guidance that was presented to WHO in 2015. WHO held online and in-person public 

consultations in August 2015, revised the guidance, and presented it to Member States for the 

WHO Executive Board (EB) meeting in January 2016. During the EB meeting, WHO agreed to 

hold an additional consultation from l-29 February 2016 to allow time for further Member State 

comments. 

HHS is leading a process to solicit input from relevant federal agencies and prepare a technical 

comment submission to WHO. HHS also met, individually and with other agencies, with 

multiple stakeholders on the matter. HHS will transmit comments and discuss them with WHO's 

Nutrition Department, conveying that revisions are needed to present countries with clear, 

evidence-based recommendations. We will continue to follow the issue closely as WHO revises 

the draft guidance for Member State consideration, and will discuss WHO's revised document, 

when available, with other agencies and with impacted stakeholders. 14 

The Honorable Gene Green 

I. Have the monies allocated by Congress in 2013 and in 2014 been fully released to the 

FDA when the BsUFA user fee trigger of $20 million was reached in 2015? I appreciate 

that the 2015 funding was released to the FDA, and also understand that the 2013 and 

2014 allocations were carried over to the next budget when the trigger amount was not 

reached in those years. Please explain the current status of these funds. 

Answer: The BsUF A program has met its spending trigger for all three years. Any funds not 

expended remain available to FDA and have been rolled over into the new fiscal year as 

carryover. Those funds will be used to support the process for the review ofbiosimilar 

biological product applications in the current or a future fiscal year. 

2. How much money is currently allotted for vector control in the United States? Given 

the challenges with vector control, how much new money is needed for vector control? 

What percentage of this funding should be set aside innovative techniques, as opposed 

to older chemicals, which you have said are not very effective, to suppress the Aedes 

Aegypti mosquito? 

Answer: As many of these resources are from local and state sources, it is difficult to estimate 

the total funds available for vector control across the nation. CDC has issued Zika vector control 

guidelines based on the principle of Integrated Vector Management (IVM). IVM principles 

include approaching mosquito control through careful planning, using a variety of interventions 

targeting both larval and adult mosquito control, and including both chemical and non-chemical 

methods. Properly planned and executed, IVM ensures a more effective !eve! of control than can 

be achieved by one single approach. 

14 All responses accurate as of February 24,2016. 

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With supplemental funds, CDC-supported investments in mosquito control will help States and 

cities identify and address areas where mosquitoes breed in order to drive down mosquito 

populations. Continued CDC work on development of innovative mosquito control tools, such as 

promising new products that may be safer and more effective than today's methods, will help 

States reduce the population of mosquitoes that can spread Zika and other diseases. In February, 

the Administration submitted to Congress a request for $1.9 billion in emergency supplemental 

funding to support the full range of activities aimed at preventing, detecting, and responding to 

further transmission of the Zika virus to protect the American public. 

The Honorable Frank Pallone, Jr. 

The Food Safety Modernization Act (FSMA) charged the FDA with transitioning our food 

safety system to one that was reactive, to one that is preventive. Despite receiving no 

additional funding as a part of this legislation, FDA has worked tirelessly to implement it, 

including finalizing five key rules related to Good Manufacturing Practice, Hazard 

Analysis, and Risk-Based Preventive Controls for Human Food and Animal Food; 

standards for growing, harvesting, packing and holding produce; Foreign Supplier 

Verification Programs for Importers; and accreditation of third-parties to conduct food 

safety audits. The agency has also actively been working on guidance related to Voluntary 

Qualified Importer Program, and has conducted outreach to those impacted by FSMA's 

requirements. 

l. The President's budget includes $1.5 billion for food safety activities and proposes user 

fees for food imports, food facility registration, and inspections. Will you please provide 

additional details regarding how this increased funding will assist the agency in 

implementation of FSMA? Further, will you please explain how the proposed user fees 

will be critical to the sustainability of FDA's food safety activities? 

Answer: The FY 2017 President's Budget includes two proposed user fees to support FSMA 

implementation. The first proposal, the import user fee, would enable FDA to modernize its 

import oversight program in ways that would facilitate the entry of safe food. These resources 

will benefit foreign food producers, U.S. food importers, and the general public. For importers 

in particular, the fee will result in an improved import program, and greater efficiency and 

predictability for their businesses. The improvements to the import process will not only 

facilitate the entry of safe products but also improve public health by enabling FDA to focus its 

attention on higher risk products. The ultimate result will be improved confidence in the safety 

of food from abroad, thus encouraging future trade opportunities in food. 

The fee would support several key areas: 

• Importer Support: To improve the safety of imported food, FDA will establish new systems 

to prevent the import of unsafe foods earlier in the process rather than detaining a product at 

the border. Additional funds will support the establishment of a '·Help Desk" that would 

assure importers of an availahle, responsive communications system to help address their 

concerns and answer their questions about the status of their shipments. 

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Port-of-Entry Streamlining: To help enhance food importers' ability to trade competitively, 

these funds will help develop and maintain improved risk analytics and IT systems that will 

allow FDA to target the highest risk imports, thus resulting in fewer detentions and less delay 

for lower-risk entries. This will include better integration with U.S. Customs and Border 

Protection (CBP) IT systems, and continuous improvement of FDA's import screening 

system. These systems will decrease reliance on paper notices and improve FDA's ability to 

exchange information electronically with industry during the import review process. These 

funds will also be used to expand the usc of analytical tools deployed on-site for faster 

screening and better targeting of high-risk samples going to traditional laboratories for 

lengthy analysis. These tools will include technology such as hand-held scanners and small, 

portable on-site testing capability. 

Increased Border Staffing: Additionally, these funds will increase FDA border coverage and 

extend hours of operations at high-priority locations. The result will be fewer instances when 

FDA investigators are not available to process an entry and will help facilitate a timely 

response. 

Second, the Food Facility Registration and Inspection user fee would enable FDA to fully 

modernize the FDA inspection program through the further development and implementation of 

new inspection models and tools. This includes training of FDA inspectors and compliance staff 

and their state counterparts in the new models, and information technology to improve targeting 

and risk-based efficiency of inspection. This investment will complement the investment in 

inspection modernization and training that can be achieved with the budget authority request and 

ensure that modernization is fully achieved on a timely basis. 

The fee revenue will also provide essential resources for investment in the state training and 

capacity needed to fully achieve the vision of a national integrated food safety system that 

provides high quality, consistent and coordinated food safety oversight nationwide. With this 

investment, FDA will be better able to make sustainable multi-year infrastructure investments to 

provide more uniform coverage and safety oversight of the food supply. 

2. What activities has FDA undertaken to work with the States in relation to an integrated 

national food safety system to enhance FSMA implementation? 

Answer: The National Integrated Food Safety System is crucial to successful implementation of 

FSMA because it will help ensure the quality. consistency, and effectiveness of local, state, and 

Federal efforts to protect the food supply. Funding in this area supports the goal of making state 

governments full partners in implementing the key preventive controls and producing safety 

components of FSMA. 

The requested FY 2017 increase will be used primarily to enhance state capacity to support 

implementation of the produce safety rule through funding of state cooperative agreements and 

grants. Successful implementation ofFSMA's new produce safety standards is especially 

dependent on pmtnerships between FDA and the states, both to deliver education and technical 

assistance and to provide on-going compliance support and oversight. Because of their 

relationships with and knowledge of local farming communities and practices, FDA believes the 

states can provide this oversight efficiently and effectively. 

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FDA has entered into a five-year cooperative agreement with the National Association of State 

Departments of Agriculture (NASDA) that brings together a range of state partners to 

collaboratively plan state support for implementation of the produce safety rule. Experts from 

FDA and NASDA are working together to develop a set of best practices for implementation of 

the produce rule. A coalition of states with strong interest in leading this implementation is 

actively participating in the development of these practices. NASDA will help facilitate industry 

training and will also play a role in delivering training to state regulators. 

3. Can you please provide additional detail regarding the activities the $20.2 million in 

new user fee will support? Further, will you provide additional information about the 

number of new full-time employees (FTEs) that the new user fee will support and the 

capabilities FDA will be hiring for'? 

Answer: FDA would conduct Center for Food Safety and Applied Nutrition (CFSAN) and 

Office of Regulatory Affairs (ORA) activities with the new user fee resources. The fees provide 

$13 million and 42 FTE for CFSAN to establish and maintain a Mandatory Cosmetic 

Registration Program; acquire, analyze, and apply scientific data and information to set U.S. 

cosmetic standards and review ingredient safety; maintain a strong U.S. presence in international 

standard-setting efforts; and provide education, outreach, and training to industry and consumers. 

The fees provide $4.7 million and 18 FTE for ORA to refine inspection and sampling of 

imported products and apply risk-based approaches to postmarket monitoring of domestic and 

imported products, inspection, and other enforcement activities. Examples of skills and 

capabilities that FDA would target in recruiting additional staff include analytical chemists, 

toxicologists/pharmacologists, microbiologists, IT specialists, risk analysts, regulatory project 

managers, dermatologists, and consumer safety officers. The fcc also includes $1.1 mi Ilion and 

3 FTE for program support activities and $1.5 million for rent activities. 

I know that there have been good and continuing discussions that FDA has had with the 

over-the-counter (OTC) medication industry. I understand that both the FDA and industry 

agree that the OTC Monograph system has slowed to an unworkable degree and that 

changes are necessary. 

4. I encourage FDA and the OTC industry to continue those conversations and hope that 

Congress can be helpfnl in aiding a solution to these problems that benefits consumers. 

Answer: Thank you. Yes, FDA continues to discuss with industry and stakeholders ideas to 

reform the Over-the-Counter (OTC) review process. We appreciate Congress' interest in this 

important area. 

5. What funding is available to FDA currently to fulfill its mission for OTC drugs? How 

has funding levels for OTC drug activities changes over the past 5-10 years? 

Answer: For OTC Monograph review activities, FDA expended approximately $7.9 million in 

FY 2014,$7.4 million in FY 2015 and is on track to expend $8.2 million in FY 2016. None of 

these funds come from user fee programs, since the Agency is not permitted to expend user fees 

on OTC monograph work, and there arc currently no user fees collected for OTC monograph 

work. These expenditures reflect non-user-fee work in the OTC monograph space, including the 

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work reported for sunscreens. The funding levels for OTC drug activities have remained 

relatively flat over the past 5-l 0 years. 

Many stakeholders have criticized FDA for not acting sooner to help address the opioid 

epidemic in this country. I was pleased when FDA released a multi-prong Opioids Action 

Plan. This plan is intended to take a number of steps towards addressing opioid abuse, such 

as: including additional warnings and safety information on labeling for immediate-release 

opioids, strengthening post-market requirements, providing guidance on the development 

of generic abuse-deterrent formulations, and reassessing the risk-benefit framework for 

approval of opioids. There is no one silver bullet for addressing opioid abuse and addiction, 

but it is clear that FDA has an important role to play as it weighs approval of new opioids. 

6. Will you please elaborate on how the funding request included in the FY 2017 budget to 

address the opioid epidemic will help support implementation of FDA's Opioid Action 

Plan? Further, can you also comment on how you will encourage a collaborative and 

collective approach throughout HilS in addressing this epidemic? 

Answer: HHS, including the FDA, is deeply concerned about the growing epidemic of opioid 

abuse, dependence and overdose in the United States and it is a persona! priority for me as 

Secretary. In response to this crisis, at my direction the agency developed a comprehensive 

action plan to take concrete steps toward reducing the impact of opioid abuse on American 

families and communities. Our initiative aims to improve prescribing practices, expand the use 

of naloxone, and expand the use of Medication-assisted Treatment (MAT). 

The President's FY17 Budget included critical investments to intensify efforts to reduce opioid 

abuse and overdose, including an increase of $1.1 billion in mandatory and discretionary funding 

to build on these and other investments proposed by the Administration and funded by the 

Congress in FY 2016. The prescribing aspect of the opioid epidemic is an important part of this 

complex public health issue, and using all of the tools available to us within HHS is a key part of 

our initiative to address opioid abuse and overdose. 

The Initiative is a coordinated, multi-faceted approach across the Department that relies on 

education, prevention and treatment strategies with the strongest evidence base. Assisting health 

care professionals in making informed prescribing decisions, increasing the use of naloxone and 

expanding access to medication-assisted treatment for opioid use disorder are the key areas 

where we are focusing our efforts through the initiative, to deliver the greatest impact. At the 

same time, it is critical to balance combatting opioid misuse with the use of these drugs for 

legitimate purposes and supporting appropriate pain management. We are working to get all 

these tools into the hands of local health professionals and law enforcement officers through 

grants in CDC, SAMHSA, and by approving new formulations of naloxone at FDA. 

As you note, FDA is taking steps to combat opioid abuse. The Agency has committed to work 

more closely with its advisory committees before making critical product and labeling decisions; 

enhancing safety labeling; requiring new data; and seeking to improve treatment of both 

addiction and pain. At the same time, the FDA will fundamentally re-examine the risk-benefit 

paradigm for opioids and ensure that the agency considers the wider public health effects. The 

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FDA is committed to taking all of these steps transparently and in close cooperation with its 

sister agencies and stakeholders. The FDA's actions include: 

• Expanding the use of advisory committees; 

• Developing warnings and safety information for immediate-release (IR) opioid labeling; 

• Strengthening postmarket requirements; 

• Updating the Risk Evaluation and Mitigation Strategy (REMS) Program; 

• Expanding access to abuse-deterrent formulations (ADFs) to discourage abuse; 

• Supporting better treatment; and 

• Reassessing the risk-benefit approval framework for opioid use. 

The Vice President's Cancer Moonshot Initiative would direct FDA to develop a virtual 

Oncology Center of Excellence to help support the development of cancer diagnostics and 

therapies. This center would pull together the expertise of regulatory scientists and 

reviewers across the various programs at FDA- drugs, biologics, and devices- to 

encourage an integrated approach to the evaluation of next generation cancer treatments, 

such as combination products and immunotherapies. The Center will also serve as a 

resource to investigators at the National Cancer Institute offering advice and support in the 

development of new treatments. 

7. Will you discuss how the proposed Oncology Center of Excellence and its integrated 

approach could help to expedite the development of novel cancer treatments? 

Answer: Increasingly, diagnostics and multiple therapeutic modalities, including drugs, 

biologics, and devices, are being used simultaneously or sequentially in the treatment of 

cancer. The optimal development and review of novel cancer therapies involves a thorough 

understanding of the overall disease context as well as the scientific basis of emerging 

diagnostics and therapeutic modalities. By integrating the perspective and expertise of the 

clinical reviewers from all of the medical product centers, teams from the Oncology Center of 

Excellence will readily be able to evaluate products in the context of existing diagnostic and 

therapeutic modalities, and be able to provide sponsors and other interested parties with the most 

informed advice regarding how to advance the development of novel products. This interaction 

will help to expedite the development and approval of important new cancer diagnostics and 

treatments. In addition, the Oncology Center of Excellence will serve as a single point of contact 

in the agency for all interested stakeholders, including patients, advocacy groups, medical 

societies, and industry. 

Cancer continues to effect far too many in this country with a more than 1.6 million people 

expected to be diagnosed with cancer in 2016, and more than 600,000 expected to succumb 

to this deadly disease. The cost of treating cancer is also continuing to rise predicted to 

reach $156 billion by 2020. 

We know that there are promising new developments in the cancer treatment space- such 

as companion diagnostics, cancer immunotherapies and combination therapies, and new 

genetic tests. In order to further encourage the development of these treatments, and 

ensure future patient access, we must also ensure that FDA is able to utilize all the 

regulatory tools the agency needs to in order to keep pace with the science. 

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8. Will you please discuss how the FY2017 budget request for the National Cancer 

Moonshot initiative will help to improve the evaluation of these new products within 

FDA? 

Answer: FDA is committed to establishing a cross-center program with the overall goal of 

fostering innovation, improving the evaluation process, and enhancing regulatory research. 

Funding in 20 I 7 will enhance FDA's efforts to continue modernizing and integrating FDA's 

management and review of oncology-related activities and foster collaboration and transparency, 

both internally and externally. 

Advancing precision medicine is one goal I know that many members on this Committee 

support. I believe that moving away from a "one-size-fits-all" treatment model to getting 

the right treatment to the right patient at the right time will greatly help to improve the 

way we treat complex diseases and conditions, while also improving bow we deliver care in 

this country. 

Since the launch of the Precision Medicine Initiative last year, FDA has approved a 

number of new Precision Medicine-based therapies and has been working with industry to 

help encourage the development of targeted therapies. One such effort has been the launch 

of precision FDA, a platform to help both the commercial and academic communities 

collaborate on testing and piloting new approaches to genetic tests to help inform treatment 

options. These are just a few of the ways the agency has played a role in advancing 

precision medicine. 

9. Greater collaboration between the public and private sectors can play a critical role in 

improving how we discover and develop innovative treatments to treat disease in this 

country. Will you discuss bow the FY 2017 budget request will help facilitate publicprivate collaboration in the area of precision medicine? 

Answer: The FY 2017 budget includes a request of $4.4 million, an increase of $2 million above 

FY 2016 for activities including supporting precisionFDA, working with the scientific 

community to develop new reference datasets for validating genetic tests, and developing a 

national device evaluation system. 

In the last year, FDA has approved several new Precision Medicine-based therapies and launched 

precisionFDA, a platform for academic and commercial collaboration. These efforts directly 

support precision medicine activities across HHS. 

FDA will use the requested FY17 increase to facilitate public-private partnerships through our 

continued work with the National Medical Device Evaluation System Planning Board to 

establish the National Medical Device Evaluation System. We envision that the proposed system 

would, among other attributes, help identify patients who would benefit from specific types of 

devices based on an evaluation ofpremarket and postmarket data, thereby advancing Precision 

Medicine. The device evaluation system will leverage real world data generated as a part of 

routine clinical practice to spur medical device innovation, allow for more timely patient access 

to safe and effective technologies, help identify medical devices associated with adverse events, 

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and reduce costs to the U.S. healthcare system. FDA will also continue to invest in 

precisionFDA, which provides a crowd-sourced, cloud-based platform to advance regulatory 

science around next generation sequencing based analytical tools and datasets. 

10. The President's FY2017 budget request proposes $18.4 million for compounding 

activities. Will you please provide additional details regarding how this proposed 

funding will assist with oversight of compounded drug products, including how such 

funding will be used to enforce the requirements outlined in DQSA? 

Answer: FDA will continue oversight of human drug compounding through inspections and 

enforcement, policy development and implementation, and state collaboration and coordination. 

Increased efforts in these areas will help to prevent patient injury and death associated with poor 

quality (e.g., contaminated) compounded drugs, and will provide clarity to compounders 

regarding FDA's expectations for compliance with the compounding provisions of the Federal 

Food, Drug and Cosmetic Act (FD&C Act), as amended by the DQSA. 

FDA continues to identify serious insanitary conditions at compounding facilities. For example, 

FDA recently recommended that a compounder cease operations and recall all sterile products 

within expiry when, during a surveillance inspection, FDA investigators identified the use of 

non-sterile drinking water for use in making injectable drug products; the use of non-sterile, nonpharmaceutical grade ingredients in making an injectable drug product; and the presence of dog 

beds and dog hairs within the facility, including in close proximity to the compounding room. 

To protect the public health, it is critical that FDA have sufficient resources to continue its 

inspection and enforcement efforts to address substandard practices and conditions for drug 

production that could compromise patient safety. 

In addition to continuing its inspection and enforcement efforts, numerous policy issues must be 

addressed in implementing the provisions of the FD&C Act applicable to compounding. For 

example, FDA intends to use funds to promulgate specific current good manufacturing practice 

requirements for outsourcing facilities. promulgate regulations to implement the DQSA, and 

develop the list of bulk drug substances that may be used in compounding under section 5038. 

Outsourcing facilities are also required to report adverse events associated with their products 

and FDA needs resources to review these reports and investigate the adverse events as 

appropriate. 

ll. Office use compounding continues to be an area of debate related to implementation of 

DQSA. In response to inquiries from Congress, FDA has said that "to qualify for 

exemptions from certain requirements, such as having to submit a new drug 

application, a compounder must obtain a prescription for an individually identified 

patient." Will you please provide additional information regarding the Department's 

position on office use compounding? 

Answer: The Department shares your concern about the safety issues associated with 

compounded drug products. Since enactment of the DQSA in 2013, FDA has conducted over 

250 inspections of compounders. During many of these inspections, FDA has identified serious 

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insanitary conditions that create a lack of sterility assurance of purportedly sterile drugs at the 

facility, prompting numerous pharmacies to recall purportedly sterile drug products and cease 

sterile drug production. FDA has also responded to serious adverse events associated with both 

sterile and non-sterile drugs compounded by state-licensed pharmacies that were as much as 

1,000 times their labeled potency. 

In April2016, FDA issued for public comment a draft guidance, Prescription Requirement 

Under Section 503A of' the Federal Food, Drug, and Cosmetic Act. As discussed in this draft 

guidance, compounding under section 503A of the FD&C Act must occur either after the receipt 

of a prescription for an identified individual patient (section 503A(a)(1 )), or in limited quantities 

before the receipt of a prescription for an identified individual patient (section 503A(a)(2)). 

Section 503A does not provide for the distribution of a compounded drug without the 

compounder first receiving a prescription for an identified individual patient (e.g., for office use). 

In contrast, entities that arc registered with FDA as outsourcing facilities under section 503B of 

the FD&C Act can distribute compounded drugs to health care facilities without receiving 

patient-specific prescriptions for office use. 

The prescription requirement in section 503A of the FD&C Act is critical to protecting patients. 

Although compounded drugs can serve an important need, they pose a higher risk to patients 

than FDA-approved drugs. Compounded drug products are not FDA-approved, which means 

they have not undergone FDA premarket review for safety, effectiveness and quality. In 

addition, licensed pharmacists and licensed physicians who compound drug products in 

accordance with section 503A are not required to comply with CGMP requirements. Because 

such compounders generally do not register their compounding facilities with FDA and are not 

under routine FDA surveillance, FDA is often not aware of potential problems with their 

compounded drug products or compounding practices unless it receives a complaint such as a 

report of a serious adverse event or visible contamination. As noted above, the limited number 

inspections that FDA has conducted of state-licensed pharmacies of which the Agency is aware 

have revealed serious deficiencies in drug production practices and conditions that could put 

patients at risk. 

For these reasons, patients should only receive compounded drugs if their needs cannot be met 

by an FDA-approved drug product. The prescription requirement is critical to ensure that 

compounding by state-licensed pharmacies and physicians under section 503A is based on 

individual patient need, to differentiate such compounding from conventional manufacturing, 

and to differentiate compounding by pharmacists and physicians who are primarily subject to 

state regulation from compounding by outsourcing facilities, which are primarily subject to FDA 

regulation. Compounding for office stock by 503A facilities would undermine the incentive for 

compounders to become outsourcing facilities, removing a critical measure in place to prevent 

another outbreak on the scale of the 2012 fungal meningitis outbreak, which resulted in over 60 

deaths and 750 cases of infection. 

In the Food and Drug Administration Safety and Innovation Act, FDA was directed to 

issue final regulations revising current medical gas regulations no later than July 9, 2016. If 

the agency does not act by the statutory deadline, FDA is directed to incorporate by 

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reference voluntary consensus safety and labeling standard developed by an accredited 

standard development organization until final regulations are issued. 

12. FDA's recent report to Congress on the regulation review identified that regulation 

changes for warning label statements and adverse event reporting may be needed. Will 

you please provide an update regarding FDA's current progress in finalizing regulation 

changes for medical gas and identify what additional topics, if any, the agency is 

considering for regulation changes? 

Answer: In 2006, FDA proposed a rule to address medical gas mix-ups that included revisions to 

the medical gas labeling regulation. These revisions, once finalized, may largely satisfy a 

FDASIA provision indicating that "warning statement[s]" for designated medical gases are to be 

promulgated through regulation. FDA is working hard to publish this rule by the FDASIAimposed deadline for rulcmaking on medical gases (July 9, 2016). FDA is continuing to 

consider whether rulemaking is needed to address adverse event reporting for medical gases, and 

will continue to evaluate the need for targeted rulemaking in other areas, tor medical gases as 

with other drug products, on an as-needed basis. However, as explained in our report to 

Congress 15 , FDA generally thinks medical gases can be appropriately regulated under the 

existing regulatory framework. In addition to the applicable regulations, FDA will utilize 

guidance documents (to provide recommendations) and inspection practices, and will continue 

our productive working relationships with state regulators, industry, and other 

stakeholders. Given numerous competing agency priorities, we do not see a compelling need to 

undertake the sweeping regulatory overhaul requested by the medical gas industry. 

FDA is working hard to ensure that medical gases continue to be appropriately regulated. In 

addition to our efforts to finalize the 2006 proposed rule, FDA has successfully implemented the 

key FDASIA medical gases provision- the new certification program for designated medical 

gases. Over 60 products have been certified. We are also actively revising, and will ultimately 

finalize, the existing draft guidance document on this topic the 2003 draft guidance on current 

good manufacturing practices (CGMPs) for medical gases- to provide updated 

recommendations. 

The September 2012 report released by FDA, "Strengthening Our National System for 

Medical Device Postmarket Surveillance", proposed a National Medical Device 

Surveillance System for improving and addressing limitations in the agency's current 

system for monitoring device safety. In 2015, FDA took a number of steps to lay the 

groundwork for national system including implementation of the unique device 

identification rule for high-risk devices, building registry capabilities, and establishing a 

Medical Device Registry Task Force to develop new and more efficient methods to study 

medical devices. 

13. Will you please provide additional information regarding the agency's progress in 

establishing a National Medical Device Surveillance System? What activities does the 

agency have planned for FY2017 to further facilitate the development of a national 

15 Available at http. 1/wwwfda.govldown/oadsiregulatoryinformationilegislation/significantamendmentstothefdcact/ 

fdasialucm.f53727pdf. 

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system? Further, what additional resources, if any, will be needed to assist with the 

development and implementation of this system? 

Answer: The current medical device reporting system which relies on an individual to detect 

an instance of actual or potential patient ham1, then make the connection between the harm and a 

device, and report the event- is important, but also has important limitations. 

FDA's Center for Devices and Radiological Health (CDRH), in collaboration with other 

stakeholders, is working to develop an active surveillance system, the National Evaluation 

System for Health Technology (NEST). This system would help generate evidence to enhance 

product development, innovation and safety; and support patient healthcare needs. Device 

manufacturers from across the spectrum- larger companies, and smaller manufacturers and 

startups patients, and the entire ecosystem would benefit from the postmarket information 

provided by the system, as well as the premarket advantages it would provide, including 

potential reductions in manufacturers' evidence generation for device approval or clearance. 

This system would not be owned or run by FDA, but rather would be operated by an independent 

public-private partnership, and governed by a board with representation from the primary 

medical device ecosystem communities, e.g., patients, providers, payers, industry, and 

government. Because the NEST is not an FDA-run system, we continue to work toward broad 

support in the medical device ecosystem, including from Congress, for this to be effective. 

FDA has worked collaboratively with patient and consumer advocacy groups, health care 

providers, payers, and industry to lay the foundation for a national evaluation system for medical 

devices. Over the past five years, FDA has completed or engaged in approximately 50 projects 

and spent more than $10 million to help establish the national evaluation system. 

In 2012 and 2013, CDRH set out a strategy and next steps toward creating the system; in 2015, 

two multi-stakeholder groups issued reports that endorsed the CDRII vision and made 

recommendations providing further direction for establishing the system; as part of its 2016-2017 

goals, CDRH will build on its accomplishments to move closer to achieving the ultimate goal of 

a robust, fully functional system. 

To accomplish these goals, CDRH will take several steps including: 

• Resources permitting, establish an organizational structure and development of 

infrastructure for the NEST as envisioned in the report 16 of the Engelberg Center for 

Health Care Reform Medical Device Postmarket Surveillance Planning Board and the 

Medical Device Registry Task Force Report. 17 

• Develop a framework for the incorporation of real-world evidence into CDRH regulatory 

decision making. 

16 Available at hllp:hvwwfila.govldownloads!AboutFDAICentersQffices!OfficeofMedica/ProductsandTobaccol 

CDRIN.'DRHReports:lJCMI35112.pdf 

17 A vai !able at http:!ilvww fda. gm/ dmv nloads: aboutfda: centerso[fices: officeofmedica/productsandl obacco/ 

cdrh!cdrhreportslucm459368.pdf 

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• Develop real-world evidence education and training for CDRH staff and industry. 

• Develop metrics to track progress on building a national evaluation system. 

The principal barrier to implementing the NEST is funding. 

Congress and industry invested in the Sentinel system for drugs and biologics, but there has not 

been a similar investment in NEST for medical devices. For the national evaluation system to 

become operational and become a valuable resource for patients, providers, payers, govemment, 

and industry, funding is needed to continue the work FDA and others are already doing. 

14. When will pilots begin to explore the feasibility of including UDI on claims forms? 

What would pilots look like and when will they begin? What additional resources, if 

any, does the agency need to begin this process? 

Answer: We share the important goal of improving patient safety through post-market 

surveillance and adverse event reporting for medical devices with UD!s. Because the Department 

firmly believes that post-market surveillance for medical devices is critical, we are moving 

forward with the incorporation ofUD!s into electronic health records. ONC's approach is a 

strong step towards incorporating UDI into electronic health record technology and making that 

information ready and accessible for patients and clinicians to use at the point of care. 

Additionally, incorporating UD!s into EHRs will allow the use of a device to be linked with a 

patient's experience with that device, thereby generating better information to enable patients 

and providers to make well-informed decisions, and facilitate medical device innovation and 

safety surveillance. 

In the meantime, CMS and the FDA look forward to continuing to explore options that would 

improve surveillance in a timely and effective manner. Both agencies are committed to capturing 

appropriate data and sharing information transparently to improve the quality and safety of care 

delivered to people across the nation. FDA and CMS also support the recommendation by the 

National Committee on Vital and Health Statistics to consider conducting voluntary pilot tests of 

the benefits, costs, and feasibility ofUDls in claims reporting. Voluntary pilots should address 

key challenges to adding UD!s to claims, including significant technological hurdles and costs 

(for providers, payers and others), as well as difficulties in validating UDis reported on claims. 

15. Please explain how open enrollment has gone over this past year, including the volume 

of interest and timing of their health plan enrollment? What can Congress and HHS do 

going forward to make open enrollment even more successful? What, if any, additional 

resources would help with the ACA's success? 

Answer: Hl!S' priority is to provide Marketplace customers with access to quality, affordable 

coverage. CMS currently operates federal Marketplaces in 34 States and supports four Statebased Marketplaces that use the HealthCare.gov platform. The Budget requests $535 million in 

budget authority, along with $1.6 billion in projected user fee collections, to maintain 

Marketplace operations in FY 2017 at approximately the same level as FY 2016. This funding 

supports oversight and operational activities for eligibility determination, enrollment, consumer 

outreach, quality improvement, and the supporting information technology. 

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At the end of open enrollment in January, about 12.7 million Americans selected or were 

automatically reenrolled in affordable, quality health plans for 2016 coverage through the 

Marketplaces. 18 Based on analysis through late December 2015, more than 8 in I 0 individuals 

who enrolled in a 2016 Marketplace plan qualified for an advance premium tax credit for the 

2016 plan year. 

4 million new people enrolled in coverage in HealthCare.gov states. Of the 9.6 million 

consumers who got coverage through HcalthCare.gov, about 42 percent were new to the 

Marketplace in 2016. 

More than ever, Marketplace consumers were engaged and satisfied with their coverage. About 

60 percent (2.4 million) of new enrollees in HealthCare.gov states signed up for January 1 

coverage compared to about 40 percent (1.9 million) of new enrollees last year. Instead of 

waiting until the last moment, as we saw in previous years, people signed up for coverage by the 

first deadline because they wanted coverage to start as soon as possible. 

About 7 in I 0 consumers with 2015 coverage came back to HealthCare.gov and actively selected 

a plan for 2016. Last year, about half of returning consumers actively selected a plan. 

More than 3.6 million people used the total cost calculator, provider or drug look up tools- yet 

another sign of the seriousness and time they put into their decisions and a sign that these tools 

were useful to them. 

Finally, this year, 2.7 million people ages 18 to 34 are signed up for coverage in HealthCare.gov 

states, and the percentage of new customers in that age range is higher than last year. The overall 

percentage of plan selections for those ages remains stable. 

Secretary Burwell, we hear a lot on this Committee about controlling costs and ensuring 

our programs are available for future beneficiaries. However, the Medicaid program is 

among the most efficient programs we have. And, it must be said that the open-ended 

financing nature of the Medicaid program is critical to allowing it to expand and contract 

with need. 

17. Secretary Burwell, isn't it true that over the past 30 years, Medicaid costs per 

beneficiary have tracked with costs in the health care system as a whole, public and 

private? 

Answer: From 1984-20 14, Medicaid expenditures per enrollee increased at an average annual 

rate of 4.5 percent, which was slower than the rate of growth for Medicare enrollees (5.7 percent) 

and private health insurance (7.0 percent). 

18. And, isn't it true that Medicaid's costs per beneficiary are substantially lower than 

private insurance and Medicare, and in recent years these costs have grown far more 

slowly than per-beneficiary costs under both private employer coverage and Medicare? 

18 https:(/www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-02-04.html 

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Answer: Since 2008 per enrollee Medicaid spending has increased approximately 3 percent 

($7,293 in 2008 to $7,523 in 2014). During the same time frame, Medicare per enrollee spending 

grew by about II percent ($10,520 in 2008 to $11,707 in 2014). Likewise, private health 

insurance expenditures per enrollee grew by about 27 percent ($4, I 08 in 2008 and $5,208 in 

2014). 19 

19. Ensuring Medicaid sustainability should mean promoting value-based care for 

beneficiaries, states and the federal government. Please describe CMS initiatives in the 

Medicaid program that promote value-based care for beneficiaries, states and the 

federal government. 

Answer: Medicaid is a payer with inherent flexibility and CMS has long supported states 

wanting to deliver services that improve the value of care. For decades, Medicaid has moved to 

change the delivery of long-term care from institutions to home and community based settings, 

highly valued by Medicaid beneficiaries for better meeting their long-term care needs in a more 

cost effective manner. Medicaid programs like the PACE program, Money follows the Person 

(MFP), Real Choice Systems Change Grant Program (RCSC), and the provision oftelehealth 

services have all helped states and providers to transform the delivery of long-term care to 

locations that better serve the needs of beneficiaries. In fact, today more than half of Medicaid 

long-term services and supports are provided in home and community-based settings. 

The Affordable Care Act, in addition to expanding coverage for more Americans, created 

additional opportunities for states to deliver value-based care. The law strengthened and 

expanded the MFP program allowing more states to apply and created the Medicaid "Health 

Homes'' program. The Affordable Care Act created an optional Medicaid State Plan benefit for 

states to establish Health Homes to coordinate care for people with Medicaid who have chronic 

conditions. This new programs allows states health home providers to operate under a "wholeperson" philosophy. Health Homes providers integrate and coordinate all primary, acute, 

behavioral health, and long-term services and supports to treat the whole person. 

In 2012 CMS released a series of new guidance on how states could move from fee-for-service 

reimbursement to "Integrated Care Models" (ICM) under current Medicaid authoritiesoutlining pathways using both non-waiver authority (e.g., state plan authority) and waiver 

authority. lCMs are described as accountable care delivery and payment methodologies aligned 

across payers and providers to ensure effective, seamless, and coordinated care. CMS 

specifically provided guidance on how states could structure shared savings models, episode 

based models and primary care case management programs. 

In addition to states providing care through established authority and state plan amendments 

(SPAs), Medicaid also supports innovative value-based care delivery models through a variety of 

I I 15 waivers, too numerous to detai I here. 

The Medicaid Managed Care proposed rule further supports states provision of value-based care 

by encouraging managed care plans, through their contractual agreements, to develop and 

participate in broad-ranging delivery system reform or performance improvement initiatives. 

19 https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-andReports/NationaiHealthExpendData/NationaiHealthAccountsl !istorical.html 

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This approach acknowledges the role of the managed care plan as an important partner in such 

initiatives and would provide the managed care plan the ability to participate as an equal 

collaborator with other payers and participants. 

In addition to encouraging participation in VBP activities, the proposed managed care rule 

authorizes states to require the managed care plan to establish reimbursement standards or fee 

schedules for providers that deliver a particular covered service to support timely access to 

care. The regulation also proposes to clarify states' ability to use incentive arrangements for 

managed care plans that meet quality or performance targets established through the contract and 

use withhold arrangements to encourage managed care plans to meet quality or performance 

targets established through the contract. 

The CMS Center for Medicare and Medicaid Innovation (Innovation Center) created the State 

Innovation Models (SIM) initiative for states that are prepared for or committed to planning, 

designing, testing, and supporting evaluation of new payment and service delivery models in the 

context of larger health system transformation. The SIM is providing financial and technical 

support to states for the development and testing of state-led, multi-payer health care payment 

and service delivery models that will improve health system performance, increase quality of 

care, and decrease costs for Medicare, Medicaid and CHIP beneficiaries. In Round One of the 

SlM Initiative, nearly $300 million was awarded to 25 states to design or test innovative health 

care payment and service delivery models in the form of Model Design, Model Pre-Test, and 

Model Test awards. ln Round Two, the SIM initiative is providing over $660 million to 32 

awardees (including 28 states, three territories, and the District of Columbia). 

To further spur innovation between CMS and the states, CMS created the Medicaid Innovation 

Accelerator Program (1/\P) with the goal of improving health and health care for Medicaid 

beneficiaries by supporting states' ongoing payment and service delivery-reform efforts. 

Through the lAP, states can receive targeted program support designed around their ongoing 

delivery and payment system innovation efforts. To date, lAP is providing direct support to 28 

state Medicaid programs through its four program areas, as well as its Medicare-Medicaid data 

integration support efforts. lAP will provide additional federal tools and resources to support 

states in advancing Medicaid-specific delivery system reform and by sharing lessons and best 

practices. 

These arc exciting times of forward movement for the Medicaid program as access to coverage is 

broadened, making the investment in delivery system and payment reform even more critical. 

20, Secretary Burwell, we have heard a great deal on this committee about the limitations 

of Medicaid data writ large. Please describe the work of CMS to transition to a more 

modernized Medicaid data structure, and any recommendations the Department has 

for future improvements in this area, 

Answer: CMS has been working actively to transition states to the Transformed-Medicaid 

Statistical Information System (T-MSlS) from the Medicaid Statistical Information System 

(MSIS). T-MSIS is a monthly, automated feed to CMS of states' beneficiary utilization and 

claims data as well as other key Medicaid and CHIP program information about providers and 

health plans. These data enable the agency to keep pace with the data needed to improve 

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beneficiary quality of care, assess beneficiary access to care and enrollment, improve program 

integrity, and support states, the private market, and stakeholders with key information. 

The federal side ofT-MSIS is ready for state submissions. There are seven states/agencies 

currently in production as of February 2016. CMS anticipates the majority of states to be 

complete with T-MSIS transition by December 3 I, 2016. However, this is predicated on state 

engagement and completion. Achieving state implementation will make national T-MSIS data 

available for stakeholder users. 

Examples of expected analysis include examination of nationwide data, including encounter, 

claims, and enrollment data trends, understand access to and the cost of care and monitor 

changes in beneficiary utilization of Medicaid and CHIP services. T-MSIS will also help 

streamline the reporting process by reducing the number of reports and data requests CMS 

currently requires of states. The enhanced data available from T-MSIS will support improved 

program and financial management, program integrity, and more robust evaluations of 

demonstration programs. 

Contrary to popular belief, health insurance and/or Medicare only covers very limited 

Long term care services and supports (LTSS). Most Americans who receive formal L TSS 

and don't qualify for Medicaid have to pay out-of-pocket. Individuals purchasing formal 

LTSS services will pay an average of $140,000 out of pocket, many until resources arc 

depleted enough for Medicaid coverage. More than 70 percent of individuals over the age 

of 65 will need LTSS. As the baby boomer wave continues, by the year 2050, the population 

of Americans over age 65 is expected to double and the population above 85 will triple. This 

will result in approximately 90 million Americans over age 65 by 2055, with half of these 

individuals over 75. At this trajectory, L TSS expenses are predicted to double as a share of 

the economy over the next 30 years. 

21. Long term care financing is truly in a crisis state. Please describe the pilot long term 

care state plan option, and any other recommendations the Department has to address 

this issue. Please include in your response any recommendations to rebalance care in 

less expensive and often preferable home and community based settings. 

Answer: The President's FY 2017 Budget includes several proposals to address LTC financing 

and increase states' use of home and community-based services. The proposal to pilot a 

Comprehensive Long Term Care State Plan Option for up to five states, with enhanced match. 

would pilot a single comprehensive long-term care Medicaid state plan option. This pilot 

program would eliminate the current institutional bias and fragmented service systems, replacing 

them with a simplified benefit providing equal access to all types of long term services and 

supports, based on assessed need and choice. It will test a comprehensive solution to Medicaid 

LTC service delivery and financing, which would be of interest to states that have reached limits 

in reforming LTC under the present rules. 20• 

Currently, children under 21 receiving inpatient psychiatric services are excluded 

statutorily from coverage of comprehensive preventive and medically necessary items and 

'"Cost projections based on the Long Term Care Scorecard. 

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services to which Medicaid enrolled children are otherwise entitled. However, the 

Department issued guidance in 2012 to mitigate this exclusion somewhat. 

22. Please describe, in light of 2012 guidance, why this proposal in the budget is critical to 

ensuring that children receiving inpatient psychiatric care receive the Medicaid benefits 

to which they are entitled. 

Answer: Section 1905(a)(l6) of the Social Security Act provides a limited exception for 

individuals under the age of 21 to the general exclusion of federal financial participation (FFP) 

for Medicaid beneficiaries who are patients of an Institution for Mental Diseases (IMD). This 

exception authorizes coverage and payment for only inpatient psychiatric services furnished to 

individuals under age 21 but not for other medically necessary services they may need pursuant 

to the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, which requires 

that states provide all medically necessary !90S( a) services to eligible individuals under age 

21. Due to this exception, children who receive inpatient psychiatric services for individuals 

under age 21 have had to go without needed services during a stay in an inpatient psychiatric 

hospital, an inpatient psychiatric program of a hospital, or a psychiatric facility that meets the 

requirements of federal law. 

The provision of quality, intensive behavioral health services to children, including in these 

inpatient settings, has been and continues to be a national priority. Amending the statute to 

provide Medicaid coverage for the full range of EPSDT services to children under age 21 who 

are receiving inpatient psychiatric services will ensure that children in inpatient psychiatric 

facilities do not lose access to coverage for critical preventive services, physical and behavioral 

health screenings, diagnostic and treatment services. It will also reduce the financial burden on 

states and Medicaid families associated with receiving related services from multiple facilities. 

23. The budget references a technical correction to the statute for Medicaid drug rebates 

with respects to abuse deterrent formulations. Please describe why this technical fix is 

critical in the fight against opioid abuse. 

Answer: There are two separate issues being addressed by this item in the budget. The first 

issue is a technical correction to the formula for the alternative calculation of the rebate liability 

that is required to be performed for line extension drugs. This technical correction would affect 

any drug identified as a line extension drug, and may result in a higher rebate liability. The 

current law was drafted using a formula that results in fewer drugs being subject to the higher 

rebate than was initially intended. The technical correction seeks to fix tbat formula so that the 

intended higher rebates may be collected. 

The second issue is not a technical correction, but rather a change to the identification of line 

extension drugs, which determines whether the alternative calculation is required. Currently, the 

Medicaid law detines a line extension drug as "a new formulation of the drug, such as an 

extended release formulation." Manufacturers and other stakeholders have challenged the notion 

that abuse deterrent formulations (ADFs) should be subject to higher potential rebates due to the 

reformulation of a non-ADF drug. ADFs are generally new formulations of drugs that contain 

properties that make them resistant to abuse. However, the statute does not exempt ADFs from 

the definition of line extensions and, therefore, ADFs may be subject to higher rebates under 

Medicaid. 

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The change proposed in the President's Budget for the definition of"line extension" will help 

address opioid abuse. Including ADFs in the definition of line extension drugs may discourage 

manufacturers from being innovative because these products will potentially be subject to higher 

rebates. Accordingly, the President's Budget asks Congress to revise the definition of line 

extension to exclude ADFs, thereby eliminating the potential disincentive for manufacturers to 

invest in ADF technology. 

Secretary Burwell, as you know the misuse and abuse of prescription opioids and of illicit 

drugs has become a true public health crisis, with overdose deaths quadrupling since 1999. 

I applaud you and the President for your work addressing this epidemic. 

One area that often gets lost in this debate is primary prevention. This is a critical part of 

our efforts to address opioid abuse- stopping it before it starts. Research supported by the 

National Institute on Drug Abuse (NIDA), Substance Abuse and Mental Health Services 

Administration (SAMHSA) and the Centers for Disease Control and Prevention (CDC) has 

found that early intervention can reduce risky behaviors during the teen years that lead to 

substance abuse. 

The research shows that we need to start prevention efforts at a younger age than we are 

now, before problems emerge. Addressing the very early risk signs- such as behavior and 

academic concerns in preschool or elementary school -and providing services that 

support parents as well as young children can have some ofthc biggest long-term payoffs. 

These interventions will not only help reduce substance misuse, they will also improve 

academic performance and reduce bullying, depression, violence, suicide, unsafe sexual 

behavior and other problems. 

There is 40 years of research behind a prevention first approach and there are models 

underway right now that are working, but most prevention strategies are not in widespread 

use. Making investments to bring innovations to scale and help communities implement 

proven approaches that promote positive protective factors- like safe, stable families, 

homes, schools and communities will help prevent youth substance use before it develops. 

My questions are: 

24. The Institute of Medicine has called for 10 percent of public funds spent on young 

people to be directed toward effective prevention interventions that promote healthy 

behaviors. Can you tell us what percentage of the President's opioids initiative 

would be directed toward prevention? Or what percentage from the overall HHS 

budget? 

25. Can you tell us how you plan to incorporate primary prevention into HHS' work 

addressing the opioid epidemic? How can we help communities to implement these 

interventions'! 

Answer: We know that preventing substance use during youth is a key factor in preventing 

future substance use, especially problematic substance usc in adulthood. Several NIDA-funded 

studies have found that universal, evidence-based prevention programs targeting youth such as 

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the Iowa Strengthening Families Program can reduce future nonmedical use of prescription 

opioids in high school and early adulthood. 

In general, youth are doing the better than other age groups with respect to opioids. Rates of 

nonmedical use of prescription opioids among people 12-17 years old have been declining since 

2002. In 2002, 7.6% of individuals 12-17 years old reported nonmedical use of prescription 

opioids in the past year compared to 4.7% in 2014. Similar, opioid-relatcd mortality has 

remained stable among 12-17 years since 2002. In 2014, there were 115 opioid-related overdose 

deaths among 12-17 year olds compared to 10 l in 2002. 

It is critical that we focus our resources on where we can have the greatest impact. As you 

know, my plan for combatting opioid abuse and overdose is a coordinated, multi-faceted 

initiative that relies on education, prevention, and treatment strategies with the strongest 

evidence base, and the Department has been working diligently to develop and implement these 

strategies. The Department also agrees that prevention services are critical in addressing the 

opioid epidemic across the country. In addition to continuing support for ongoing work 

associated with Substance Abuse Prevention through SAMHSA's 20% set-aside for prevention 

within the Substance Abuse Prevention and Treatment Block Grant and through their $10 million 

Strategic Prevention Framework Rx, the FY 2017 Budget includes improvements to prescribing 

practices as a key area where we can focus our efforts to prevent opioid misuse. While actions to 

address prescription opioid abuse must target both prescribers and high-risk patients, prescribers 

are the gatekeepers for preventing inappropriate access. Therefore, HHS is focused on 

increasing investments in state-based prescription drug monitoring programs (PDMPs) and 

adoption of e-prescribing practices, disseminating guidelines for opioid prescribing, and training 

providers. 

The FY 2017 President's Budget for the Centers for Disease Control and Prevention proposes a 

$10 million increase for Prescription Drug Overdose and Misuse Prevention, for a total of 

$80 million in discretionary resources, to support improved uptake of CDC's new "Guideline for 

Prescribing Opioids for Chronic Pain" among providers, and to provide ongoing support to all 

50 states and D.C. through the Prescription Drug Overdose program. In addition, the Budget 

proposes $5 million in new discretionary funding for the Office of the National Coordinator for 

Health Information Technology to harmonize technical standards in support of PDMPs, improve 

clinical decision-making, and further the adoption of electronic prescribing of controlled 

substances. In addition, the SAMHSA State Targeted Response Cooperative Agreement 

program, a $920 million effort over two years, will enable states to develop holistic approaches 

to addressing the opioid crisis, including prevention. 

26. There are multiple grant programs addressing prevention at the Department of 

Education, HHS and Justice. How is HHS coordinating with those departments to 

leverage resources? 

Answer: We must work across HHS, with our partner agencies and other stakeholders, as well as 

with Congress to identify and dismantle barriers as well as leverage our resources in order to 

effectively implement these strategies. Coordination ofHHS activities addressing opioid use 

disorders is being led by the Office of the Assistant Secretary for Planning and Evaluation. In 

addition, HHS continues to coordinate its efforts to address opioid addiction and overdose with 

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its federal agency partners through the Interagency Workgroup on Prescription Drug Abuse 

Prevention/Opioid Overdose Prevention led by the Office of National Drug Control Policy. The 

Department of Education and Justice are also members of this interagency group. An example of 

federal coordination taking place at this level is the $10 million FY 2017 President's Budget 

proposal to partner with the Department of Justice to implement a new BuprenorphinePrescribing Authority demonstration to expand the types of providers who can prescribe 

Medication-Assisted Treatment. 

The Honorable Eliot Engel 

The President's proposed budget again includes reduced funding for graduate medical 

education. Specifically, the FY17 budget proposes a cut of$17.8 billion over ten years. 

While the budget does include a small investment to train more primary care doctors, this 

effort- though appreciated- is not a substitute for supporting teaching hospitals. With the 

conn try facing a doctor shortage, this is not the time to put funding for physician training 

on the chopping block. 

My home state of New York has built a premier infrastructure for training doctors. In 

more than one-third of the 50 states, more than 10% of active physicians have been trained 

by New York institutions. If funding for graduate medical education is cut, top teaching 

hospitals in New York and across the U.S. may be forced to reduce the number of 

physicians they train. As a result, patient care nationwide would almost certainly suffer. 

The rationale for this provision is to "encourage workforce development through targeted 

and more accurate indirect medical education." While this is a worthwhile goal, $17.8 

billion in cuts to teaching hospitals will jeopardize their ability to train future doctors, thus 

hindering workforce development. Medicare funding for doctor training must remain 

stable- the stability of our country's teaching hospitals and the educations of future 

physicians are too important to put these funds at risk. 

I. Can you describe how the Administration expects teaching hospitals to absorb cuts to 

GME, and how we can in turn ensure that doctor training does not suffer? 

Answer: HHS recognizes the importance of graduate medical education. Nonetheless, like any 

other category of Medicare spending, payments to teaching hospitals must be justified by 

incurred costs. This proposal in the President's Budget will help graduate medical education 

programs promote high quality primary care services that address relevant public health needs by 

allowing the Secretary to target funding to training activities specific to issues. HHS believes this 

proposal brings these payments closer to the appropriate level and provides incentives for 

promoting high-quality primary care. In addition, the Teaching Health Center Graduate Medical 

Education (THCGME) Program provides funding for residency training in primary care 

medicine and dentistry in community-based, ambulatory settings. The THCGME Program seeks 

to not only bolster the primary care workforce through support for new and expanded primary 

care and dental residency programs, but also improve the distribution of this workforce into 

needed areas through emphasis on underserved communities and populations. In addition to the 

$60 million in funding appropriated in MACRA, the FY 2017 Budget includes an additional 

$527 million over FYs 2018-2020 to support up to 876 residents. 

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I'd like to address an area in which, I feel, Medicare has missed an opportunity to adopt 

approaches that have been proven in the private sector to both save money and improve 

patient care: home infusion therapy. 

Home infusion allows patients to receive vital treatment in a cost-effective, comfortable and 

clinically-beneficial setting. Home infusion is widely covered by commercial payers as a 

means of keeping patients out of institutions for infusion treatments. As a result, both 

patients and these payers have benefitted from fewer hospital-acquired infections, which 

HHS has devoted substantial resources to curb. 

Congressman Pat Tiberi and I have introduced H.R. 605, the Medicare Home Infusion Site 

of Care Act, to give patients the ability to receive life-saving therapies in their homes and 

avoid forcing them into institutional settings. This would, in turn, avoid unnecessary costs 

to the Medicare program and, most importantly, to patients' quality of life. 

2. Can you speak to any issues that you foresee with respect to providing Medicare 

coverage for home infusion drugs and services? I would be pleased to work with you to 

mitigate any concerns you may have, and to afford patients an opportunity to receive 

this life-saving care in their homes as soon as possible. 

Answer: Thank you for raising this important issue. Coordinating care is a cornerstone of the 

work the Department is doing around delivery system refonn. Our goal is to foster a health care 

system that leads in innovation, delivers the most affordable, highest quality medicines and 

results in healthier people. We are happy to continue to work with you and provide technical 

assistance on the legislation. 

In December 2014, Congress appropriated $576 million to the Assistant Secretary for 

Preparedness and Response (ASPR) for Ebola response and preparedness activities. This 

amount was higher than had initially been requested by the Obama Administration, in part 

because Congress wanted hospitals- particularly those designated as Ebola treatment 

centers in high risk areas- to be reimbursed for their preparedness costs to the greatest 

extent possible. 

Nearly 15 months later, $340 million of the appropriated amount still hasn't been allocated 

for designated treatment center preparedness. As a result, many centers will receive only a 

small fraction of their preparedness costs. Furthermore, the omnibus spending bill passed 

in late 2015 included language requesting that ASPR allocate a portion of that unspent 

Ebola funding to health care facilities that have incurred Ebola preparedness expenses. 

Even though Congress once more expressed its will on this matter, ASPR has not released 

the funding. 

I am very concerned that the failure to release this funding will discourage facilities from 

stepping forward to be designated centers for treatment in the future. As you know, 

Congress will soon debate funding to address the Zika virus, and we will once again need 

our nation's health care providers to help protect us from this new threat. Hospitals are not 

required by law to undertake this very expensive public service function, but do so in 

response to specific needs and requests by the federal and state governments. 

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Can you please explain why such a small proportion of the dollars appropriated for 

Ebola response and preparedness activities has been allocated by ASPR? How does 

HHS plan to use the remainder of the allocation, if not use it to reimburse hospitals? 

Answer: A total of$208 million ofEbola emergency funding appropriated to the Public Health 

and Social Services Emergency Fund was allocated to support the Hospital Preparedness 

Program to health care system preparedness and response to Ebola virus in the U.S. While the 

primary focus of the Hospital Preparedness Program Ebola funding is on preventing, preparing 

for, and responding to Ebola, as required by Title VI of Division G of the Consolidated and 

Continuing Appropriations Act, 2015, it is likely that preparedness for other novel, highly 

pathogenic diseases will also be enhanced through these activities. While HHS provides funds 

and provides guidance, ultimately decisions on the levels of funding for Ebola treatment centers 

arc made by the program's 62 awardees, the health departments in all 50 states, the District of 

Columbia, Chicago, Los Angeles County, New York City, and all U.S. territories and freely 

associated states. Funding allocations for HPP's Ebola funds were based on a formula that 

accounted for population and Ebola risk. The hospital preparedness supplemental funding also 

provided significant resources to establish nine regional Ebola and other special pathogen 

treatment centers. These facilities have enhanced capabilities to ensure they are the leading 

providers of care and treatment for Ebola patients in the U.S. and have the capabilities needed to 

manage other high containment, Ebola-like infectious diseases in the future. 

With the funding provided, States will be able to support treatment facilities, including academic 

health centers and other hospitals. States are also able to support a broad range of preparedness 

activities such as caring for clinical complex patients; maintaining enhanced readiness through 

increased training; increasing capacity to handle highly contaminated infectious waste; receiving 

and participating in training, peer review, and assessment of readiness to ensure adequate 

preparedness,; develop strategies to ensure health care worker readiness and safety; and integrate 

behavioral health considerations for patients and staff. 

HHS is assessing the direction from Congress on hospital preparedness in the FY 2016 

appropriations report and identifying the scope of current needs for building treatment capacity. 

For over 10 years, IIRSA has been overseeing UNOS work on a process to revise the organ 

donation system so that it is more needs-based than geography-based. Current liver 

distribution rules require donated livers from deceased people to be offered to the sickest 

person in that particular region, even if there arc suitable recipients in other regions who 

arc even sicker. Acknowledging these disparities, the UNOS Committee responsible for 

liver distribution reform is has been exploring alternative models for distribution. 

As this process has labored on, stakeholders in New York and elsewhere are eagerly 

awaiting a resolution, especially the many patients who remain on the organ transplant 

wait list. While UNOS has been careful to thoughtfully deliberate the adoption and 

implementation of liver distribution reform, needless deaths continue to occur under the 

current policy. It is therefore essential that UNOS reach a timely conclusion on a policy to 

remedy the current inequity that leads to these unfortunate and unnecessary deaths. 

3. Can you provide information about the timeline for a decision, and an update on what 

progress HRSA and UNOS are making with these deliberations? 

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Answer: Any change in the OPTN liver allocation policy must be consistent with the 

requirements and principles of the OPTN final rule, which articulates the goals to be achieved 

through OPTN organ allocation policies. These policies must, among other factors, be based on 

sound medical judgment and seek to achieve the best usc of donated organs, be designed to avoid 

the wastage of organs, avoid futile transplants, promote patient access to transplantation, 

promote the efficient management of organ placement, and not be based on a candidate's place 

of residence or listing (except to the extent necessary to satisfy other requirements). 

Consistent with OPTN processes and requirements for the development of changes to the liver 

allocation policy, the following recent steps have been taken with respect to the alternative 

approaches to liver allocation. 

• The Liver and Intestinal Organ Transplantation Committee (Liver Committee) released a 

"Concept Paper" in June 2014 to describe geographic challenges in access to liver 

transplants and outline allocation concepts under consideration, as well as alternative 

approaches. The publication was followed by a 60-day public comment period; 

• A public forum was held in September 2014, with over 400 people in attendance, to discuss 

the concept paper. Afterward, the OPTN convened subcommittees to address issues 

identified during the forum; 

• A second forum was held in 2015 during which subcommittees presented recommendations 

being considered by the Liver Committee as it develops a final proposal for proposed 

changes to the liver allocation policy; and 

• A Redistricting Subcommittee of the Liver Committee reviewed additional analyses of 

alternative approaches for liver allocation. This subcommittee is charged with developing 

implementation plans, and resource assessments for several options for redistricting, 

including the '"concentric circles" option raised at the most recent forum. In April 2016, 

the subcommittee presented its recommendations to the full Liver Committee during its 

meeting in Chicago. 

• The OPTN/UNOS Liver and Intestinal Organ Transplantation Committee, at its April2016 

meeting, agreed on a proposal to be shared with the public for input in order to improve 

liver distribution nationwide. The proposal, to be published for public comment in August 

2016, is intended to increase consistency in medical urgency scores at transplant for 

candidates in various areas of the country. 

The Honorable Jan Schakowsky 

Calorie labeling on restaurant menus allow Americans to make informed food choices for 

themselves and their families when eating out. Yet, the national meuu labeling law (Section 

4205 of the Patient Protection and Affordable Care Act of2010) has been delayed by six 

years since enactment. Most recently, a rider inserted in the FY2016 Omnibus 

Appropriations Act states: 

SEC. 747. None of the funds made available by this Act may be used to implement, administer, 

or enforce the final rule entitled "Food Labeling; Nutrition Labeling of Standard Menu Items 

in Restaurants and Similar Retail Food Establishments" published by the Food and Drug 

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Administration in the Federal Register on December I, 15 2014 (79 Fed. Reg. 7I156 et seq.) 

until the later of-

(1) December I, 2016; or 

(2) the tlate that is one year after the date on which the Secretary of Health and Human 

Services publishes Levell guidance with respect to nutrition labeling of standard menu items 

in restaurants and similar retail food establishments in accordance with paragraphs (g)(l)(i), 

(g)(J)(ii), (g)(l)(iii), and (g)(J)(iv) of section 10.115 of title 21, Code of Federal Regulations. 

1. Will you please confirm the impact of this rider if it delays the national menu labeling 

law even further by one year after the Food and Drug Administration finalizes its Draft 

Guidance for Industry: A Labeling Guide for Restaurants and Retail Establishments 

Selling Away-From-Home Foods- Part II (Menu Labeling Requirements in Accordance 

with 21 CFR 101.11)? 

Answer: The impact of this provision would delay enforcement of the menu labeling final rule 

well into 2017 for covered establishments to provide calorie and other nutrition information to 

consumers. Considering that consumers eat 1/3 of their meals in such establishments, further 

delay in enforcing this rule will leave consumers without important nutrition information 

necessary to make more healthful food choices. 

2. When can we expect the Department to finalize this guidance so that Americans can 

benefit from this important law? 

Answer: The Agency considers finalizing the guidance a priority and expects to publish the final 

guidance in May of this year. 

3. Dr. Thomas Frieden, the CDC director, said, "The finding that nine of ten adults and 

children still consume too much salt is alarming. The evidence is clear: too much 

sodium in our foods leads to high blood pressure, a major risk factor for heart disease 

and stroke. Reducing sodium in manufactured and restaurant foods will give 

consumers more choice and save lives." When can we expect the Food and Drug 

Administration to issue its voluntary guidance to the food industry on sodium 

reduction? 

Answer: FDA is aware of the potential public health benefits associated with a reduction in 

sodium intake over time and continues to be highly interested in strategies that support this goal. 

We are working on developing draft voluntary guidelines for commercially prepared foods with 

the goal of gradually lowering excessive sodium in the U.S. food supply in a safe, achievable and 

sustainable way. We anticipate publishing the draft voluntary guidance in the spring of2016. 

The Honorable G. K. Butterfield 

Secretary Burwell, although colorectal cancer death rates in the United States have 

declined by half since 1970, large geographic disparities persist. I happen to represent 

North Carolina's First Congressional District which has the alarming distinction of hosting 

one of the so-called colorectal cancer 'hot spots.' That means that death rates in my district 

are 9 percent higher than in other parts of the country for colo rectal cancer-a preventable 

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cancer in many ways. We need help in my district. Unfortunately, North Carolina was not 

one of the grant awardees from the CDC's Colo rectal Cancer Control Program (CRCCP). 

I know that the program has limited resources but I'd like to see CDC develop ways to help 

communities like mine that have an identified public health problem. 

1. Do you have any plans to expand the CRCCP nationally? 

Answer: In FY 2015, CDC began funding a new five-year cooperative agreement for the 

Colorectal Cancer Control Program (CRCCP). With available resources CDC was able to fund 

30 grantees, including 23 states, 6 universities and I tribal organization. CDC does not currently 

have plans to expand the program. 

2. How do you see the program moving forward? 

Answer: Despite strong evidence to support colorectal cancer (CRC) screening, currently, only 

65% of adults report being up-to-date with screening, with more than 22 million eligible adults 

who have not been screened. While the Affordable Care Act is helping to improve access to 

insurance coverage for CRC screening, many adults face other barriers which make it difficult 

for them to receive this effective preventive service. The goal of CDC's CRCCP is to increase 

population-level screening rates by implementing evidence-based interventions which affect 

broader health systems change and help to address these barriers. 

CRCCP grantees are working to increase screening rates within a partner health system 

(federally qualified health center, hospital/clinic network, etc.), and defined geographical area or 

disparate population. Grantees must implement at least two of four Community Guide 

recommended interventions (provider assessment/feedback, provider reminders, client 

reminders, or reducing structural barriers); and may also use secondary strategies such as patient 

navigation. Grantees are establishing baseline screening rates in the health systems with which 

they partner and will measure the change in screening rates over the five year program to assess 

the health impact of their efforts. 

To date, 226 clinics from a total of 78 health systems have been recruited for participation in the 

CRCCP. These clinics include nearly 441,000 patients ages 50-75 and nearly 2,000 primary care 

providers. The average baseline CRC screening rate for clinics is approximately 35%. 

Recruitment of partner health systems and their clinics will continue for the duration of the fiveyear grant period; therefore, we anticipate that program reach will expand considerably over 

time. A comprehensive evaluation ofthe program includes annual collection ofCRC screening 

rates for every participating clinic so we can closely monitor our primary outcome, which is to 

increase screening. CDC anticipates that over the five-year program period, grantees will show 

increases in population-level CRC screening rates within the health systems they arc 

collaborating with as a result of the evidence-based interventions they are executing. 

Secretary Burwell, I am a cosponsor of bipartisan legislation H.R. 1220, the Removing 

Barriers to Colorectal Cancer Screening Act. This legislation simply fixes a glitch in 

Medicare that charges beneficiaries a 20 percent copay when a polyp is found and removed 

during a screening colonoscopy. A colonoscopy is an A-rated service because you have the 

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opportunity to actually gain the mortality benefit through the screening process by 

removing the cancerous polyp. The intent of the ACA was to encourage preventive health 

by providing screening services for free. This financial barrier in Medicare works to 

discourage beneficiaries from getting their colo rectal screening. I was pleased to see the 

Administration support this legislation in the budget documents. 

3. Short oflcgislative action what else can be done to address cost barriers in Medicare 

and private insurance? 

Answer: As you noted, the President's Budget proposes to eliminate beneficiary 

coinsurance/copayments under Part B for screening colonoscopies that result in removal of a 

polyp or other diagnostic/therapeutic procedures. Under current law, Medicare beneficiaries 

do not have to pay the part B deductible or coinsurance/copayment when they have a 

screening colonoscopy. However, when a polyp is detected and removed during a screening 

colonoscopy or another procedure is performed, coinsurance/copayments arc applicable. In 

that case, the service is considered to be a diagnostic or therapeutic procedure (e.g., 

colonoscopy with polypectomy) rather than a screening colonoscopy and patients are billed 

coinsurance and/or copayments. The Affordable Care Act provides that the Part B deductible 

is not applied in such cases, but does not waive the coinsurance/copayment. This proposal 

would address the inequity in beneficiary cost-sharing by waiving coinsurance and 

copayments on a scheduled screening colonoscopy even when the procedure actually 

furnished is considered to be a diagnostic/therapeutic one. 

For private insurance, as you know, Section 2713 of the Public Health Service Act and its 

implementing regulations require non-grandfathered group health plans and health insurance 

coverage offered in the individual or group market to cover, without the imposition of any costsharing. evidence-based items or services that have in effect a rating of "A" or "B'' in the current 

recommendations of the United States Preventive Services Task Force (USPSTF) with respect to 

the individual involved. The USPSTF recommends screening for colorectal cancer using fecal 

occult blood testing. sigmoidoscopy, or colonoscopy in adults, beginning at age 50 years and 

continuing until age 75 years. The risks and benefits of these screening methods may vary. This 

recommendation received an A grade. If a recommendation or guideline docs not specify the 

frequency, method, treatment, or setting for the provision of a recommended preventive service, 

the plan or issuer may use reasonable medical management techniques to determine any such 

coverage limitations. 

HI-IS shares interpretative jurisdiction over this provision with the Departments of Labor and 

Treasury. Over the years, HHS, Labor and the Treasury (collectively, the Departments) have 

issued a series of FAQs to answer questions from stakeholders to help people understand the 

Affordable Care Act and benefit from it, as intended. The Departments recently issued FAQs on 

colonoscopies in particular. 21 

"https://www.crns.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-PartXXIX.pdf 

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4. It is my understanding that there is still a lack of clarity in both private insurance and 

Medicare around coverage for a colonoscopy that follows a positive FIT test. Right now, 

both seniors on Medicare and those with private insurance will be charged out of 

pocket for the follow-up test. Faced with the cost, it seems to me that they may skip the 

follow-up colonoscopy altogether. So, we've removed the ability to stop cancer before it 

starts. If you are going to pay for an initial screening tool like the FIT test and you find 

a problem, the follow-up screening of a colonoscopy should be covered. What is the 

rationale behind this strategy? 

5. Is there a plan to clarify this issue in Medicare and private insurance? 

Answer: A colonoscopy furnished under the circumstance you described is covered by 

Medicare but would be considered a diagnostic colonoscopy, not a screening colonoscopy, for 

which cost-sharing is not waived under current law. We would be glad to work with the 

Congress on any proposals to address this scenario. As noted above, a colonoscopy furnished 

under this scenario is covered by Medicare but cost-sharing is not waived under current law. We 

would be glad to work with the Congress on any proposals to address this issue. 

The Honorable Joseph Kennedy 

1. Madame Secretary, in light of President Obama's request for $1.8 billion in 

supplemental funding to address the ongoing Zika virus outbreak, can you tell us more 

about what mechanisms HHS currently has at its disposal to respond to emerging and 

re-emerging pandemic diseases like Ebola and the Zika virus? As these and other global 

health threats grab international attention and climate change allows vectors to spread 

to new territory, what steps can Congress take to strengthen HHS' ability to prevent 

the spread of disease, respond to outbreaks, and ensure the availability of treatments 

and vaccines? 

Answer: Today's world of increasing connectivity and mobility accelerates shared global health 

risks. New viral and bacterial pathogens continue to emerge and can quickly spread around the 

world. We do not know when or where the next threat will emerge from. Between March 2014 

and now, we have tracked over 200 outbreaks in 145 countries-in addition to Ebola. Most of 

the world is still unprepared to prevent, detect and respond to infectious disease threats. Fewer 

than I in 3 countries report that they arc fully prepared. 

The Global Health Security Agenda (GHSA) was launched in February 2014 to advance global 

health security against natural and man-made infectious diseases. Global health security is the 

road map for countries to become compliant with the Intcrnationalllcalth Regulations (IHR) 

which means they will be better able to identify and respond to disease outbreaks in their own 

country-reducing the numbers of people who get sick and die and preventing diseases from 

spreading across borders. 

With funding provided in the FY2015 Ebola emergency appropriation, HHS is working with 

other US government agencies to support 17 countries to develop and implement five-year plans 

to meet GHSA targets and comply with the II IR. 14 other countries and I region are also being 

supported to develop a five-year plan. Other countries in the G7 and countries like South Korea 

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are also supporting this work in additional countries. However, there are still many countries 

that have public health systems that are vulnerable to infectious disease threats. Until all 

countries are able to comply with IHR requirements, the whole world is at increased risk from 

infectious diseases. 

Even in countries with well-developed public health systems, infectious diseases can still cause a 

public health crisis. This was the case in South Korea with the introduction of MERS, though 

South Korea was able to contain further spread ofMERS. All countries, including the United 

States, need flexibility in order to be able to respond quickly to an emerging public health 

problem-before it becomes a full-blown international public health crisis. 

2. Additionally, it's my understanding that the FY2015 Ebola Emergency appropriations 

provided $597 million to CDC to establish and strengthen National Public Health 

Institutes and for other international preparedness activities. How have these funds 

been used in Latin America and what efforts are underway to utilize the National 

Public Health Institutes in the region for addressing the Zika outbreak? 

Answer: The FY20 15 emergency appropriations provided $597 million to support national 

public health institutes and global health security. These funds are critical to meeting the United 

States commitment to the Global Health Security Agenda (GHSA) to support 30 countries to 

increase their ability to detect infectious disease outbreaks, respond to outbreaks effectively in 

order to prevent international transmission. HHS and its interagency partners identified 17 

countries for initial implementation of GHSA based on an assessment of both public health 

vulnerability and readiness of the host country government to commit to achieving specific 

targets. Given the threat posed by Ebola at the time of the program launch, the initial focus was 

heavily weighted toward Africa. The 17 countries arc: Bangladesh, Burkina Faso, Cameroon, 

Cote D'lvoire, Ethiopia, India, Indonesia, Guinea, Kenya, Liberia, Mali, Pakistan, Senegal, 

Sierra Leone, Tanzania, Uganda and Vietnam. All of these countries have developed a five year 

plan to achieve GHSA targets, and have begun implementation of activities to strengthen their 

public health systems and develop their public health workforce in order to reduce their 

vulnerability to infectious disease threats. The US government is also working with 14 

additional countries and I region to begin their Gl!SA planning process. These countries are: 

Cambodia, Democratic Republic of Congo, Republic of Georgia, Ghana, Haiti, Jordan, 

Kazakhstan, Laos, Malaysia, Mozambique, Peru, Rwanda, Thailand, Ukraine, and the Caribbean 

region. 

In addition, three additional countries are currently supported by CDC with FY20 15 Ebola 

emergency appropriations to develop or strengthen their national public health institutes. These 

countries are: Colombia, Guatemala, and Morocco. Having an empowered national-level public 

health institute with strong management, organizational and communication capacities, invested 

with the proper legal authorities, are key for a country's ability to sustain infectious disease 

prevention, detection and response capacities, as well as to carry out other essential public health 

services. Two regional organizations, the African CDC and the West African Health 

Organization, are also being supported. 

HHS and the global community have been challenged to respond to two urgent public health 

threats in different parts of the world-Ebola in West Africa and Zika in the Americas. In 

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addition, MERS continues to raise public health concerns in the Middle East and beyond. 

Unfortunately, according the World Health Organization, 70% of the 194 countries that have 

ratified the International Health Regulations (IHR) have reported that they are unable to comply 

with the IHR requirements that keep the world safe from infectious diseases. GHSA is a critical 

tool to help increase global capacity to prevent, detect and respond to infectious disease but 

vulnerabilities remain. 

3. How are HHS-implementing agencies partnering with researchers in the affected 

countries to develop improved tools for detecting, treating, and preventing Zika virus 

infections? 

Answer: Various components of the Department are partnering with researchers abroad to better 

prevent, detect, and treat the Zika virus. 

General Collaboration and Partnerships 

ASPR is leading an I·IHS Zika Sample Sharing Working Group to identify domestic and 

international sources of Zika positive clinical specimens to support development and validation 

of diagnostics and medical countermeasures like vaccines. Through this effort, Zika-related 

material (virus specimens and diagnostic reagents) has been shared with a number of 

international partners to foster an environment for rapid global public health response to Zika. 

ASPR is working closely with CDC to implement a framework for sharing of samples among 

Global Health Security Initiative members (Canada, European Union, France, Germany, Italy, 

Japan, Mexico and UK). Access to a wider variety and larger quantity of live virus samples 

increases the U.S.'s ability to develop clinical diagnostic tools, vaccines, and other public health 

countermeasures. 

CDC is providing clinical and zoonotic specimens to selected laboratories (academia, 

government, and private sector) to spur the development of diagnostics (lab-based and point-ofcare), treatment regimens, and candidate vaccines. Already, we have had a notable success with 

the development of a next-generation molecular assay that simultaneously detects Zika virus and 

two others circulating in the region that can confound diagnosis and surveillance. This assay, the 

CDC Trioplex, has been approved by the FDA for clinical use under an Emergency Use 

Authorization. 

Additionally, CDC is actively working through our established surveillance sites within the 

Global Disease Detection network (Central America, Africa, and Asia) to monitor and identify 

Zika cases, deploy current diagnostics and prepare for next-gen diagnostics, treatments, and 

vaccines in the pipeline. Another active area of collaboration and study are effective mosquito 

control strategies- a lynchpin of prevention. Finally we are partnering with USAID to conduct 

joint Zika response activities. 

NIH released a Request for Applications for Zika-spccific investigations through a process which 

allows for expedited review to ensure new research is initiated quickly to address the Zika 

epidemic. See http://grants.nih.gov/grants/guide/pa-files/PAR-16-l 06.html 

Many HHS Operating and Staff Divisions, including OGA, NIH, CDC, FDA, ASPR, among 

others, are working closely and have participated in Zika coordination activities with WHO and 

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PAHO. NIH scientists have served as expert advisors and participants at PAHO and WHO 

convened meetings to help harmonize natural history study protocols and to identify research 

priorities. HHS is also providing direct technical assistance to PAHO, the WHO and affected 

countries and working with them to enable access to clinical samples and data to support 

diagnostic and vaccine development. As NIH-supported research activities proceed, NIH will 

closely coordinate these activities with PAHO and WHO, as appropriate. 

A Selection of Country-Specific Collaboration and Partnerships 

With regard to natural history, NIH is attempting to understand several key issues- the impact of 

Zika on pregnancy and congenital outcomes, the role of prior dengue exposure on the course of 

Zika infection, and the pathogenesis of Guillain-Barre syndrome. These studies include natural 

history research in multiple Caribbean, Central and South American sites. The largest project, 

co-sponsored by Fiocruz (Brazil's leading biomedical research organization), is the Zika in 

Infants and Pregnancy (ZIP) study, a multi-country, prospective cohort study of -I 0,000 

pregnant women at sites in Brazil, Colombia, Puerto Rico, Nicaragua and other locales. 

FDA has been working with ANVISA, Brazil's national regulatory agency, to assist them in their 

efforts to expedite the development of diagnostic tests and vaccines for Zika virus. 

NIH is supporting development of several vaccine candidates, and plans to begin clinical trials in 

endemic settings in early 2017. These activities build on existing collaborations with clinical trial 

sites and partners in the Caribbean and Brazil. Additional HHS-implementing agencies are 

providing technical and regulatory expertise to support the manufacturing infrastructure in Brazil 

at the Butantan Institute that facilitates in-country development and production of Zika vaccine 

candidate(s). 

NIH is partnering with FIOCRUZ (a leading scientific institution for research and development 

in biomedical sciences in Brazil) on a major study focused on Zika in pregnancy. 

CDC is providing on-the-ground support in Puerto Rico, Brazil, Guam, Colombia, American 

Samoa, the US Virgin islands, the Marshall Islands and Panama. This includes conducting 

studies to learn more about the link between Zika and microcephaly and GBS and collaborative 

surveillance and research. 

In Colombia, NIH is conducting a study to look at the links between Zika virus infection and 

birth defects. 

CDC in Mexico has been working collaborativcly with the Secretariat of Health/Department of 

Epidemiology to analyze municipality level surveillance data on Zika, including case reports in 

the border states with the US. These reports are published weekly to the border health working 

group. 

NIH/NIAID has just initiated a natural history study of Zika virus infection in Mexico, including 

assessment of the clinical spectrum of Zika virus disease, antibody responses, and rates of 

viremia. 

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Recently, OGA provided leadership for bilateral discussions on Zika with Brazil, Cuba and 

Argentina, including our collective research efforts. Internationally, l!HS is strengthening 

diplomatic support for U.S. policies on mechanisms for data and sample sharing and fora to 

advance understanding of the Zika virus in the international scientific community. 

4. And finally, how do the rates of microcephaly in Brazil compare to the rates of 

microcephaly in other I.atin American countries with ongoing Zika outbreaks? Are the 

rates in Brazil higher, and, if so, what are the suspected reasons for the higher rates? 

Answer: The rates of microcephaly in Brazil do appear to be higher than in other countries 

affected by the Zika virus outbreak. Some of this difference is attributable to phase of the 

outbreak in Brazil relative to that of other countries- the outbreak began earlier in Brazil, more 

women were infected early in their pregnancies and have since given birth and thus their babies 

can be properly evaluated. Other factors may be due to susceptibility to infection and more 

severe outcome in some populations as well as overestimates of microcephaly in some settings. 

Studies are underway in other countries (such as Colombia, Panama, Brazil) focusing on 

microcephaly and also Guilla in-Barre syndrome that should provide answers later this summer. 

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