U.S. GOVERNMENT PUBLISHING OFFICE

30–210—PDF WASHINGTON : 2018

S. HRG. 115–246 

PRESIDENT’S FISCAL YEAR 2018 

HEALTH CARE PROPOSALS 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

JUNE 8, 2017 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

ORRIN G. HATCH, Utah, Chairman 

CHUCK GRASSLEY, Iowa 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

ROB PORTMAN, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

DEAN HELLER, Nevada 

TIM SCOTT, South Carolina 

BILL CASSIDY, Louisiana 

RON WYDEN, Oregon 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

SHERROD BROWN, Ohio 

MICHAEL F. BENNET, Colorado 

ROBERT P. CASEY, JR., Pennsylvania 

MARK R. WARNER, Virginia 

CLAIRE MCCASKILL, Missouri 

CHRIS CAMPBELL, Staff Director 

JOSHUA SHEINKMAN, Democratic Staff Director 

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Wyden, Hon. Ron, a U.S. Senator from Oregon .................................................... 1 

Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, Committee on 

Finance .................................................................................................................. 3 

ADMINISTRATION WITNESS 

Price, Hon. Thomas E., M.D., Secretary, Department of Health and Human 

Services, Washington, DC ................................................................................... 5 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Grassley, Hon. Chuck: 

Letter from Senator Grassley, et al. to Administrator Verma, May 19, 

2017 ................................................................................................................ 45 

Hatch, Hon. Orrin G.: 

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

Prepared statement .......................................................................................... 46 

Price, Hon. Thomas E., M.D.: 

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

Prepared statement .......................................................................................... 48 

Responses to questions from committee members ......................................... 51 

Wyden, Hon. Ron: 

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

Prepared statement .......................................................................................... 99 

COMMUNICATIONS

American Academy of Family Physicians (AAFP) ................................................ 101 

National Family Planning and Reproductive Health Association (NFPRHA) .... 106 

Oral Health America ............................................................................................... 107 

(III) 

(1) 

PRESIDENT’S FISCAL YEAR 2018 

HEALTH CARE PROPOSALS 

THURSDAY, JUNE 8, 2017 

U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC. 

The hearing was convened, pursuant to notice, at 9:54 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Orrin G. Hatch 

(chairman of the committee) presiding. 

Present: Senators Grassley, Roberts, Thune, Isakson, Toomey, 

Heller, Scott, Cassidy, Wyden, Stabenow, Cantwell, Nelson, Carper, 

Cardin, Brown, Bennet, Casey, and McCaskill. 

Also present: Republican Staff: Chris Campbell, Staff Director; 

Brett Baker, Health Policy Advisor; Kimberly Brandt, Chief 

Health-care Investigative Counsel; Jay Khosla, Chief Health Counsel and Policy Director; Jennifer Kuskowski, Health Policy Advisor; 

and Preston Rutledge, Tax Counsel. Democratic Staff: Joshua 

Sheinkman, Staff Director; Laura Berntsen, Senior Advisor for 

Health and Human Services; Anne Dwyer, Health-care Counsel; 

and Elizabeth Jurinka, Chief Health Counsel. 

The CHAIRMAN. The committee will come to order. We are going 

to first listen to the distinguished Senator from Oregon, who has 

to go to another committee hearing, so I will show that deference 

to him. 

I welcome everybody to this morning’s hearing on the President’s 

proposed budget for fiscal year 2018 with specific attention to the 

Department of Health and Human Services. 

I want to thank Secretary Price for being here. These hearings 

are an annual event for the Finance Committee. Secretary Price, 

since this is your first time around, I will just warn you that these 

hearings can be a little grueling, so—of course, you already know 

that. 

I am grateful that the President and HHS are eager to work with 

Congress to fix our health-care system in order to ensure Americans are able to access affordable health coverage. 

With that, I am going to turn to the ranking member, who needs 

to get to another hearing, and we will show that deference. 

OPENING STATEMENT OF HON. RON WYDEN, 

A U.S. SENATOR FROM OREGON 

Senator WYDEN. Mr. Chairman, thank you very much for this 

courtesy. And I know this is a busy morning, and I am very grateful to you for doing this. 

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I also want to say ‘‘thank you’’ to Senator Stabenow, who in my 

absence is going to do an excellent job, as she always does. 

This administration from day one has preferred ‘‘alternative 

facts’’ and convenient spin to the truth. One of the most recent examples was its budget proposal which double-counted $2 trillion to 

maintain some whiff of fiscal responsibility while it slashed health 

programs and protections for basic and essential needs. 

The budget math is fake, but the extreme agenda that would deprive millions of Americans of access to health care and wipe out 

living standards is not. Unfortunately, this morning I am going to 

be splitting my time between the Finance Committee and the Intelligence Committee, so I will be brief. 

There are several issues in the budget and the administration’s 

agenda that I am going to touch on. First is Medicaid. Secretary 

Price is the captain of the President’s health-care team. He has 

been the premier advocate for Trumpcare, a bill that cuts Medicaid 

by $834 billion in order to pay for massive tax breaks for the 

wealthy. 

Fourteen million Americans would lose coverage, and millions 

more would see caps on their care. And if that was not enough of 

a cut, the budget proposal that came out a few weeks ago goes even 

further. 

It slashes hundreds of billions more from Medicaid. In a program 

that covers nearly half of all births, 37 million kids, millions of 

working families and people with disabilities, and two out of three 

nursing home beds in America, these cuts would be a staggering 

blow to Americans of all generations. 

These facts and figures have been met by a wave of the hand 

from Secretary Price. When asked if his proposed cuts would result 

in millions of Americans losing access to Medicaid, he responded, 

‘‘Absolutely not.’’ He went further, claiming ‘‘there are no cuts to 

the Medicaid program,’’ and he also said, ‘‘nobody will be worse off 

financially.’’ 

I have heard Secretary Price and others make the baffling argument that people are actually worse off when they have Medicaid 

coverage—that their health does not improve as a result of Medicaid coverage. Often this argument is based on a brief and outdated study performed in my home State. 

Here is the bottom line on Medicaid. Seventy-four million Americans rely on this program for basic health needs—parents with sick 

kids, people with disabilities, seniors in nursing homes who have 

nobody to turn to for help if their benefits disappear, and in addition, thousands of Oregonians who are healthy under my home 

State’s model. 

It would be a tough sell to convince those people they are worse 

off being enrolled in Medicaid, or that the program needs more 

than a trillion dollars in cuts. And public opinion is very clear: two 

out of three enrollees are happy with the program. Seven out of ten 

Americans say Congress ought to leave it as it is—no block grants, 

no per-capita caps. 

Fortunately, the budget proposal hit the wall here in the Congress, and there is a lot of debate left to be had on Trumpcare. But 

right now, the administration is causing turmoil in the insurance 

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markets, and it is already having disastrous effects for millions of 

families. 

The President issued a day-one executive order undermining the 

Affordable Care Act, and nobody on the Trump team can give a 

straight answer about whether the administration will continue 

making cost-sharing reduction payments that are key to making insurance affordable for working families. Because of this sabotage, 

insurers are pulling out of the markets, and people are left without 

plans to choose from. 

You do not have to take my word for it. The insurers are very 

clear about why they are making these decisions. 

Furthermore, on the campaign trail, the President said he would 

not cut Medicare. The Trumpcare bill shrinks the life of Medicare, 

and the budget proposal extends the mandatory cuts under the 

budget sequester by more than $30 billion. The Food and Drug Administration, the Centers for Disease Control, and the National Institutes of Health are all slashed in the budget. The same is true 

of programs aimed at basic human needs, programs that fund 

Meals on Wheels, child care, and foster care. This is the budget you 

write if you think seniors and working families have it too easy. 

I want to thank the Secretary for joining the committee. I apologize again for the hectic schedule. It is never an easy appointment 

for a Cabinet Secretary, and I think he knows there is going to be 

some vigorous discussion this morning. 

I also again want to express my thanks to the chairman for his 

very gracious and ongoing courtesies on these kinds of matters. 

Thanks, Senator Stabenow, for being willing to fill in, and I look 

forward to returning with our colleagues, and again, I thank the 

chair. 

The CHAIRMAN. Well, thank you, Senator. 

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

OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. 

SENATOR FROM UTAH, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. Let me just say I am grateful that the President 

and HHS are, in essence, working on this effort, and are, in essence, eager to work with Congress to fix our health-care system 

in order to ensure Americans are able to access affordable health 

coverage. 

This may not be something that is going to be that easy to do. 

And as we know, time is of the essence in regard to this effort. 

Earlier this week, we received word that Anthem is pulling out 

of Ohio’s Obamacare marketplace, potentially leaving more than 

10,000 patients and consumers in 20 counties without any insurance options on Ohio’s exchange for 2018. Now, this news is particularly frightening as we expect to hear similar notices from Anthem as they reevaluate their participation in Obamacare exchanges throughout the United States, our whole country. 

Now, this recent story is just the latest in a long line of failures, 

but my colleagues on the other side seem to want to continue under 

the guise that this is working. It is not working. All of these failures demonstrate the need to move forward with repealing Obamacare and replacing it with a more workable approach, one that will 

4 

take seriously the ballooning health-care costs impacting every 

American family. 

Let me talk for a few minutes about the specifics of the President’s budget. The budget assumes $250 billion in total savings 

from the repeal and the replacement of Obamacare. 

Despite some insinuations to the contrary, the budget does not 

incorporate the specific legislative proposal, the American Health 

Care Act, that is before Congress right now. Therefore, it is not accurate to associate the specific Medicaid savings the CBO has estimated from enactment of the AHCA with the President’s budget. 

To do so would assume a level of specificity that, for obvious reasons, is just not there. 

Moreover, the President’s budget does not cut $1.5 trillion from 

Medicaid. Nor does it assume that the specific Medicaid-reform proposals from the AHCA will be enacted into law. I am quite certain 

that we will hear a lot about that today, but any attempt to make 

that connection is simply unfounded. And any Senator who harps 

on the AHCA Medicaid numbers here today either does not understand the explicit language and estimates provided in the President’s budget, or they are simply attempting to muddy the waters 

in order to scare Americans who rely on Medicaid for health-care 

coverage. 

Ultimately, the President’s budget appears to accept the reality 

that the Senate will need to come up with its own health-care reform proposal that includes a fundamental fix to Medicaid, which 

is, quite frankly, long overdue. And anybody who does not agree 

with that just is not living in the real world. 

In addition to the savings assumed from the repeal of Obamacare, the budget also explicitly assumes $610 billion in savings 

from putting Medicare on a sustainable fiscal path by capping 

funding in fiscal year 2020 through per capita caps or block grants 

at the States’ option. 

All told, most of the budget’s overall Medicaid savings would be 

achieved by returning the focus of Medicaid to serving those with 

the greatest needs—the elderly, the disabled, and needy mothers 

and children—and by giving States more flexibility to run their 

own Medicaid programs. 

Any Senator who would like to argue that the Federal Government should spend more Medicaid dollars to provide coverage for 

non-disabled, childless adults at the expense of disabled patients 

who remain on waiting lists should explain why. Furthermore, any 

Senator who would like to argue that the States are ill-equipped 

to handle their Medicaid programs should explain why that is the 

case, given that the overwhelming consensus we have heard from 

Governors nationwide over the last several years is that States 

want more independence and flexibility to tailor the Medicaid program. 

Washington needs to stop measuring the success of a Federal 

program by how much money it spends, or how many other programs are a part of it. Instead, Washington needs to focus on how 

well a Federal program helps those it is intended to serve and how 

efficient the program is at fulfilling its mandate. 

Long story short, we need to stop focusing on spending and pay 

more attention to outcomes, because we may not be able to spend 

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more. It does not appear that we are going to be able to. The rate 

things are going right now under the current system, it is a national tragedy. 

I think the President’s budget, while it is by no means flawless, 

largely recognizes this reality, and the President and the administration deserve credit for that. Now, I look forward to having an 

open and frank discussion with Secretary Price about his thoughts 

on these and other matters. 

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

The CHAIRMAN. But before we get to that, I would like to say 

today that we have the pleasure of being joined by Secretary Thomas E. Price. 

Secretary Price, I want to thank you for coming. Secretary Price 

was sworn in as the 23rd Secretary of Health and Human Services 

on February 10, 2017. 

As a policymaker and a physician—a surgeon, in particular—he 

brings to the Department a lifetime of service and dedication to advancing the quality of health care in America. 

Secretary Price first began his career in care for patients as an 

orthopaedic surgeon. He followed in the footsteps of his father and 

grandfather, and began a solo medical practice in Atlanta, GA. 

Since its founding, that practice has grown to be one of the largest 

non-academic orthopaedic practices in the country. 

Hoping to make a different type of impact on health care, Secretary Price ran for public office and was elected to four terms in 

the Georgia State Senate, and I believe would have continued on 

forever if he wanted to. During his tenure there, Secretary Price 

served as Minority Whip and later as the first Republican Senate 

Majority Leader in the history of Georgia. 

Most recently, Secretary Price served as U.S. Representative for 

Georgia’s sixth congressional district from 2005 to 2017. During his 

time in the House, Secretary Price served in various roles, including chairman of the House Budget Committee, chairman of the 

House Republican Policy Committee, and chairman of the Republican Study Committee. 

Secretary Price received his bachelor and doctorate of medicine 

degrees from the University of Michigan, after which he completed 

his orthopaedic surgery residency at Emory University. 

Now, Secretary Price, we are grateful to have you here and will 

be happy to have you proceed with your testimony here today. 

STATEMENT OF HON. THOMAS E. PRICE, M.D., SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES, WASHINGTON, DC 

Secretary PRICE. Thank you so much, Mr. Chairman and Ranking Member Stabenow and members of the committee. I want to 

thank you for inviting me today to discuss the President’s budget 

for the Department of Health and Human Services for fiscal year 

2018. It truly is an honor to be with you. 

Whenever a budget is released, the most common question in 

this town, in Washington, is ‘‘how much?’’ How much does the 

budget spend on this program, how much does it cut from the other 

program? 

6 

And as a former legislator, I understand the importance of this 

question. But too often, it is treated as the only question that is 

worth asking as it relates to the budget, as if how much a program 

spends is more important, or somehow more indicative of whether 

the program actually works. 

President Trump’s budget request does not confuse government 

spending with government success. The President understands that 

setting a budget is about more than establishing topline spending 

levels. Done properly, the budgeting process is an exercise in reforming our Federal programs to make sure that they do their job 

and use tax dollars wisely. 

The problem with many of our Federal programs is not that they 

are too expensive or too underfunded. The real problem is that 

many of them simply do not work. Fixing a broken government 

program requires redesigning its structure and refocusing taxpayer 

resources to better serve those most in need. And that is exactly 

what President Trump’s budget will do at HHS and across the government. Consider Medicaid, which has been discussed, the primary source of medical coverage for millions of low-income American families and seniors facing challenging health circumstances. 

If the amount of government spending were truly a measure of 

success, Medicaid would be hailed as one of the most successful 

programs in history. Twenty years ago, actual spending on Medicaid was less than $200 billion. Within the next decade, it is estimated to top $1 trillion a year. 

Despite these significant investments, one-third of physicians 

who ought to be seeing new Medicaid patients do not. Some research shows that enrolling in Medicaid does not necessarily improve your health outcomes for the newly eligible Medicaid population. 

This suggests that we need structural reforms that empower 

States to serve their unique Medicaid populations in a way that is 

both compassionate and sustainable. Now under current law, Federal rules prevent States from focusing on their most vulnerable 

communities and from testing new ideas to improve health outcomes and access to care. This budget changes that. 

HHS’s mission of protecting the health of the American people 

involves far more than overseeing the Nation’s health care and insurance programs. HHS is the world’s leader in helping the healthcare sector prepare for cyber-threats and responding to and protecting against public health emergencies. 

Recently, I witnessed this important work firsthand visiting 

Ebola survivors in Liberia and representing the United States at 

the G20 Health Ministerial Meeting in Berlin and the World 

Health Assembly in Geneva. To support HHS’s unique Federal role 

in public health emergencies, preparedness, and response, the 

President’s budget provides $4.3 billion for disaster services coordination and response planning, biodefense and emerging infectious 

disease research, and development and stockpiling of critical medical countermeasures. 

In addition, today America faces a new set of public health crises 

that we have been far less successful in resolving. Those are serious mental illness, the opioid crisis, and childhood obesity. 

7 

As Secretary, I am committed to leading HHS to address each of 

these three challenges, and the President’s budget calls for investments in policy reforms that will enable us to do that. The budget 

calls for investments in high-priority mental health initiatives for 

psychiatric care, suicide and homeless prevention, and children’s 

mental health, focusing especially on those suffering from severe 

mental illness. 

In 2015, over 52,000 Americans died of overdose, most of them 

from opioids. This budget calls for $811 million to support the department’s five-point strategy to fight this epidemic. 

To invest in the health of the next generation and help nearly 

the 20 percent of school-aged children who are obese lead healthy 

and happier lives, the President’s budget establishes a new $500 

million America’s Health Block Grant. 

Additionally, the President’s budget prioritizes women’s health 

programs by investing in research to improve health outcomes for 

women and increasing funding for the Maternal and Child Health 

Block Grant and Healthy Start. Across HHS, funding is maintained 

for vital programs serving women, including community health centers, domestic violence programs, women’s cancer screenings and 

support, mother and infant programs, and the Office of Women’s 

Health. This budget demands some tough choices, and in this challenging fiscal environment, there are no easy answers. With this 

budget, however, the new administration charts a path toward a 

sustainable fiscal future and ensures the dedicated resources provided enhance and protect the health and well-being of the American people. 

Members of the committee, I want to thank you for the opportunity to be with you today and your continued support of the Department of Health and Human Services. It is my incredible privilege to serve as its Secretary. 

[The prepared statement of Secretary Price appears in the appendix.] 

The CHAIRMAN. We are proud of you, and we know that you were 

an excellent member of the House. And so far, it looks to me like 

you are getting on top of what these problems are, although you 

were pretty well on top of them before as a member of the House. 

The opioid crisis seems to be spreading across the country, affecting families and communities in unprecedented ways. In fact, The 

New York Times reported earlier this week that overdose deaths 

are at an all-time high. Tackling this crisis is a priority for you and 

for President Trump. So can you describe the efforts HHS is undertaking to address the ongoing opioid epidemic in the United States? 

Secretary PRICE. Mr. Chairman, this is one of the scourges across 

the Nation that tears your heart out. In 2015, 52,000—as I mentioned—fellow Americans died of an overdose, 33,000 of those of an 

opioid overdose. We hear this day after day after day. What the Department has done is put in place a five-part strategy to make certain that we are identifying the kind of treatment and recovery efforts that work in assisting the States. 

We want to make certain that we have the overdose-reversing 

drugs available wherever they need to be available and know that 

we are trying to surveil and make certain that we know prior about 

8 

strong drugs getting to the street, from a law-enforcement standpoint. 

There is a public health aspect to this, obviously, to try to determine what the heck is going on. Why is this scourge as large as 

it is? And we are putting resources into that. 

In addition, we want to make certain we are doing the highest 

level of research to try to identify those pain treatments that are 

able to make it so that there is not a need for individuals to seek 

pain medication for its euphoric effect. 

And then finally, fifth, it is important to look at how we manage 

pain in this Nation. Twenty years ago, we started down this road 

of measuring pain as a fifth vital sign. Let me suggest to you that 

that has resulted in significantly greater use of opioids and prescription medication than would have otherwise been the case. 

So we have this five-part strategy. You have been incredibly 

helpful, Congress has been incredibly helpful, to make certain, 

through 21st Century Cures and otherwise, to provide resources so 

that we can allow the States to identify, again, those evidencebased programs that they have in place that can help mitigate this 

challenge. 

But we continue to move in the wrong direction, Mr. Chairman, 

and we will not rest at the Department or in the administration 

until we bend that curve in the other direction. 

The CHAIRMAN. Well, thank you so much. 

HHS recently published a report using the previous administration’s data showing just how much health insurance premiums in 

the individual market have increased since 2013. Could you tell us 

what are the principle findings of that report? 

Secretary PRICE. Well, thank you so much. 

I know that when I visited with folks in my previous position, 

and then since I have been privileged to serve as Secretary, I hear 

over and over again how folks are just so terribly concerned about 

the cost of health coverage for them and their family. And there 

was this disconnect—you are going to have the individuals talking 

about the wonders of the program that was in place, but then you 

had all of these individuals who were so concerned because they 

did not have the ability to afford the coverage, or they did not have 

the ability to get the care. 

So this study that we undertook, that was undertaken at the Assistant Secretary for Planning and Evaluation group within HHS, 

identified that the average premium increase over the last 4 years 

has been over 100 percent. It was 105 percent, so more than double, across the country. In fact, in three States, the increases were 

tripled—in Alaska, in Alabama, and in Oklahoma. 

And what that means is that there are individuals who (1) cannot afford the coverage, and (2) even when they can afford the coverage, the deductibles have increased to a significant degree so that 

they may have an insurance card, but they do not have any care, 

because they cannot afford the deductible. 

So that is the challenge that we are trying to address and make 

certain that Congress addresses so that individuals are able to afford the kind of coverage that folks want for themselves and for 

their families. 

9 

The CHAIRMAN. Well, as you may be well aware, this committee 

has for several years now been keenly interested in the large backlog of Medicare claims under appeal at HHS. The most recent reports we have heard indicate that the backlog has been reduced 

from a high of nearly 1 million claims to a current number closer 

to 750,000 claims. Now, that number is still unacceptably high. 

Can you tell me what HHS is doing to address the unnecessary 

backlog of Medicare claims? 

Secretary PRICE. Yes. These are appeals where providers have 

said that they do not believe that the Federal Government is providing the kind of resources necessary for them to be able to care 

for their patients. And as you mentioned, the numbers are staggering: nearly a million claims. We are down to about 700,000 now. 

We can take care of somewhere around 20,000—up until recently—a year. What we have done is met with the individuals, 

and they are high-quality folks. These are folks just trying to get 

these appeals through the process and trying to make the right decision. 

We put a focus on that. We have encouraged them to talk to the 

stakeholders, talk to the individuals out there about why we have 

this increase in claims. There is a problem there. It means that the 

system is not working to the degree that it should to allow those 

individuals to care for those patients and be compensated for that 

care. 

We have identified the opportunity for the administrative law 

judges to be able to review higher claims and move in the direction 

of having magistrate judges review lower claims so that we can 

hopefully get through a larger volume of claims on an annual basis. 

And then we have tried to decrease the burden of reporting. We 

are working on trying to decrease the burden of reporting for the 

providers so that there is a less likely possibility that they would 

feel the need or desire to file a claim. 

So this is a major problem. We are working through it, and we 

are committed to getting that number down to a reasonable number. 

The CHAIRMAN. Well, I am happy to listen to you. You have inherited a tremendous number of problems, and I know that you are 

fully capable of solving those problems. I think you are well on 

your way. 

The distinguished ranking member has agreed with me to allow 

Senator Isakson to go next. 

Senator ISAKSON. Thank you, Mr. Chairman. 

Dr. Price, welcome back. The last time you were here, we were 

confirming you, and now we are getting a lecture from you on what 

we need to do to help you. And we are here to help you. 

Secretary PRICE. Thank you. 

Senator ISAKSON. All of the Georgians are proud of you and your 

service to our State. 

You just returned from your first trip overseas as Secretary, and 

you began that in Liberia, if I am not mistaken. 

Secretary PRICE. I did. 

Senator ISAKSON. What did you learn, particularly with respect 

to our response to the Ebola outbreak, which ground zero, I think, 

was Liberia? 

10 

Secretary PRICE. It was indeed, Senator. Thank you so much. I 

appreciate your support and your service to our great State. 

My first trip overseas was—we stopped first in Liberia. I wanted 

to do that, because I wanted to express our appreciation to the 

Americans who were working over there, especially during that 

Ebola crisis, and to also demonstrate our continued commitment 

for global health security and to thank the Liberian government for 

what they had done to elevate and increase their ability in the area 

of infectious disease. 

What I saw was incredibly inspiring. And you all would be so remarkably proud of the American people who are forward deployed—if you will—in global health, individuals from the CDC, 

from the NIH, from HRSA, who are doing all that they can to make 

certain that we address the health challenges that exist around the 

world, especially around infectious disease. 

It paid off in absolutely remarkable benefits, and we saw that because of the most recent outbreak of meningitis that occurred in Liberia, and that outbreak—the surveillance that was done, the detection that was done, the prevention of spread that was done, and 

the treatment that was done, was only possible because of the work 

that had been done in Liberia since the Ebola outbreak and since 

that challenge was resolved. 

So I was just uplifted and inspired by the incredible work of the 

American people who are dedicating their lives to assisting the 

health of individuals overseas. 

Senator ISAKSON. Well, CDC did a phenomenal job, as did HHS. 

Secretary PRICE. Absolutely. 

Senator ISAKSON. I want to point out that the President’s budget 

cuts by $136 million the Preparedness Fund, a lot of which went 

to the initial response to Ebola in Africa, along with a partnership 

with Emory University to have the first place we could actually 

bring some of those victims to the States. We need to work to see 

to it that the funding is there so we can have the same type of response the next time an outbreak takes place, wherever it is in the 

world, because we are the world’s clinic, if you will, for emergencies 

and disasters like that. 

Secretary PRICE. Yes. 

Senator ISAKSON. Secondly, you had a partner by the name of 

John Knox, if I am not mistaken. Is that right? 

Secretary PRICE. I did. 

Senator ISAKSON. You may remember, John operated on my son, 

Kevin, 30 years ago and saved his leg from a terrible injury and 

a terrible accident. It took him 9 months to recover. Eight of those 

months he recovered at home. 

My wife and I went to school. We took lessons in how to clean 

ports and put the antibiotic drips into him so he could fight infection in his bone marrow while he recovered at home. 

Since 1989 when that accident took place, over time reimbursement for antibiotics and home infusion went away. In fact, there 

was a push to drive everybody into the hospital to recover and not 

as much reimbursement to encourage people to stay home. 

Fortunately, Senator Warner worked closely with us to see to it 

that we began focusing on reimbursement for durable medical 

equipment in the 21st Century Cures Act. I hope you will work 

11 

with us to see to it we can expand coverage to get home infusion, 

wherever practical and possible, covered as a benefit so that we can 

have more people recovering in a less expensive, more hospitable 

environment than in hospitals and hospital facilities. 

Secretary PRICE. This is really important, Senator, because what 

we find—health care and medicine are dynamic. They change all 

the time. So what used to be able to be done only in a hospital, 

now can oftentimes be done as an outpatient or, in the instance of 

recovery, oftentimes at home. And home- and community-based 

services are absolutely imperative for us to have the flexibility to 

be able to do that. 

So that is one of the things that we are trying to concentrate on 

from a waiver standpoint in many different programs, as well as 

trying to incent the flexibility within existing programs so we can 

cover those kinds of treatments, not necessarily just in the venue 

that was previously selected when that was the standard of care, 

but in a new venue because it works better for the patient. 

Senator ISAKSON. Lastly, I just want to underscore what you said 

about experimenting to have our Medicaid coverage available and 

robust for our citizens. Your State and my State, Georgia, we have 

1.9 million people on Medicaid—1.3 million of them are children. 

Fifty percent of all the live births in Georgia are paid for by Medicaid. 

So, as we go through the reforms that are necessary in Medicaid, 

we have to remember that we are talking about, first and foremost 

in our State—and I think in most others—children who benefit 

from those programs being robust or are hurt if they are cut. I look 

forward to working with you to see to it that we continue to provide 

the coverage that is necessary and experiment with ways to incentivize the program to meet the needs for our children in Georgia. 

Secretary PRICE. Thank you, Senator. Thank you for your leadership. 

Senator ISAKSON. Thank you, Mr. Secretary. 

The CHAIRMAN. Senator Stabenow? 

Senator STABENOW. Well, thank you very much, Mr. Chairman. 

Welcome, Secretary Price. There are so many things that I would 

like to talk to you about and actually debate with you in terms of 

what has been said and the positions of the administration. But I 

want to start with, I think, a very important basic assumption that 

you have made, and that is that the Affordable Care Act is falling 

apart. ‘‘Oh my gosh, look what is happening. We have to dismantle 

it. Do something different, because it is falling apart.’’ 

And yet we know—to me it is like pulling the rug out from under 

somebody and saying, ‘‘Oh my gosh they fell down.’’ We have seen 

consistent moves by the administration, whether it was cutting in 

half the number of days that citizens have to sign up for insurance, 

whether it is no longer aggressively doing outreach to younger, 

healthier people, making sure everybody is in the pool so that costs 

do not go up, or whether it is doing what has been done to take 

away the commitments made to the insurance industry to make 

sure that they would be covering pre-existing conditions and have 

no caps on services, and so on. 

12 

And it is laid out this morning in The Washington Post, when we 

look at the question of whether or not the White House is going 

to let the health-care system die. I want to just quote a little bit 

from there, because this is coming from the industry. The biggest 

source of industry anxiety right now is whether the administration 

and Congress will continue to fund cost-sharing subsidies that help 

7 million Americans with ACA plans afford deductibles and copays, and, ‘‘Absent that funding, I don’t know if we are going to 

have much participation in the exchange market in 2018,’’ said 

Tennessee Insurance Commissioner Julie Mix McPeak, a Republican who also serves as president-elect of the National Association 

of Insurance Commissioners. 

The uncertainty—the uncertainty is one of the top reasons insurers have cited when explaining why they are posting higher rates 

for the next year or withdrawing from markets altogether. Two 

weeks ago Blue Cross Blue Shield of North Carolina filed a rate increase of 22.9 percent. They said it would have been 8.8 percent, 

not 22.9 percent, if the administration had committed to paying 

and basically keeping the commitments that were passed as part 

of health reform. 

And then finally, on Tuesday Anthem Blue Cross Blue Shield announced it was pulling out of the Federal exchange. You have mentioned that in Ohio. The President seemed to cheer that yesterday. 

I do not know why we are cheering that people are going to have 

less opportunity to have health care. 

If we spent a tenth of the time that has been spent undermining 

the health-care system working to make it better, we would be 

making terrific strides to lower costs for people. 

But here is what was said by Brad Wilson, the North Carolina 

chief executive of Blue Cross Blue Shield. ‘‘We have to take a snapshot in time, which is right now. A lack of action by the administration,’’ he added, ‘‘yields a result we are currently seeing, higher 

premiums rather than lower premiums.’’ 

And so my question, Mr. Secretary, is, why do you believe it is 

in the best interest of American families to sabotage the healthcare system that is today allowing American parents to take their 

children to the doctor? 

Secretary PRICE. Thank you, Senator. 

Well, let me just correct a few statements. Nobody is interested 

in the system dying. What we are interested in is making certain 

that the system works for patients and families and doctors. Nobody—— 

Senator STABENOW. Then why are you not willing to—excuse me, 

but why are you not willing, then, to indicate that as long as we 

have the system we have, you are going to keep the commitments 

and reimburse the insurance companies so they have certainty? 

Secretary PRICE. Nobody is interested in sabotaging the system. 

Nobody is cheering the challenges that we have in the system. 

In your State alone, premiums were up 90 percent before this 

President came into office. The number of insurers was down before this President came into office. In your State, so—— 

Senator STABENOW. Well, I can assure you, after meeting with 

the head of Blue Cross and Blue Shield of Michigan, they are going 

to file two rates when they file their rates: one if the administraVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 R:\DOCS\30210.000 TIM
13 

tion keeps their commitments, and one if they do not. And if they 

do not, they are going to be much higher. 

So I think the question is, why would you not keep the commitments made? I understand you have a different view in terms of 

what the system should look like, which I disagree with. But in the 

meantime you have insurers—insurers—that are saying the reason 

the rates are going up is because of uncertainty and instability created by the administration. Why is that a good idea? 

Secretary PRICE. Actually, Senator, if you read further in that article, it talks about the increase in costs and decreasing insurance 

availability for individuals across this country before this administration came into office. 

So what we are trying to do is to fix the challenges that we 

have—— 

Senator STABENOW. Well, let us start by keeping our commitments. I have more questions for another round, but let us start 

by making sure that the administration is keeping the current commitments, following the current law while we debate what should 

happen next. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Did you have enough time to answer that question? 

Secretary PRICE. Yes, sir. 

The CHAIRMAN. Do you need more time? 

Secretary PRICE. No, I am fine. Thanks. 

The CHAIRMAN. Okay. 

Then we will turn now to Senator Cassidy. 

Senator CASSIDY. Hello, Dr. Price. 

Secretary PRICE. Hello. 

Senator CASSIDY. There are a couple of things I am encouraged 

by in your budget. Senator Cantwell and I last year put in a bill 

regarding direct primary care. For those unfamiliar with it, as physicians you and I know the way you lower cost is to empower the 

patient/physician relationship so that if the patient has a problem, 

instead of going to the ER, she can call her physician, and her physician can give her the advice. 

Direct primary care is a contractual relationship, and so there is 

more investment, perhaps, than in the other relationships that are 

out there, say an urgent care center where you might see the person once and never see them again. 

So Senator Cantwell and I put that together. And I like it, because it can decrease utilization. And by decreasing utilization, you 

decrease health-care costs, and ultimately we do not decrease the 

cost of insurance unless we decrease both utilization and the costs 

of health care. 

Secretary PRICE. Absolutely. 

Senator CASSIDY. Do you have any comments on that direct primary care model and how robust you all plan to make that? 

Secretary PRICE. Well, it is an incredibly helpful program, and it 

gets to the point of the dynamism of health care. 

The opportunity that individuals may have to be able to have a 

personal physician, a primary care physician in all settings across 

our health system, would be, I think, absolutely beneficial to the 

14 

ability for that patient, that individual patient, to get the kind of 

care that he or she needs. 

Right now, you cannot do that. So what we want to do is move 

toward a system that allows for more personalized care, and the 

DPC model—the direct primary care model—is one that I think 

holds great promise. 

Senator CASSIDY. Now, if you will, it aligns the incentive between 

the patient and the physician. 

Secretary PRICE. Absolutely. 

Senator CASSIDY. Let me talk a little bit about the per capita cap 

or, as I prefer to call it, the per beneficiary payment. And just a 

little history for those who may not know, it was first introduced 

by President Clinton as a concept, and Senators Phil Gramm and 

Rick Santorum simultaneously, as a way to align incentives between the patient, the State, and the Federal Government. 

I think we are actually seeing almost a modified version of that 

now as States are going to Medicaid managed care, aligning the incentive between the State as a payer with the Medicaid managed 

care company, and then the patient. I guess the way I look at the 

per beneficiary payment—because as you know, I introduced a bill 

in 2010; I do not know when it was, 112th Congress—which kind 

of brushed off the Phil Gramm-Bill Clinton proposal and updated 

it, if you will. It will align the incentive between the Federal and 

the State government. 

Secretary PRICE. Exactly, and it is so important because, as you 

know, having taken care of—as I did—Medicaid patients in our 

practices, the Medicaid population is not a monolithic population. 

There are individuals in the Medicaid population who are, as Senator Isakson said, healthy moms and kids. There are also individuals in the Medicaid population who are seniors, low-income seniors, and disabled, blind and disabled individuals. 

All of those individuals need to be treated uniquely, because they 

are unique individuals. And what we do as a system, by and large, 

is say, you have to take care of every one of those people exactly 

the same way, which does not allow for that kind of dynamism and 

flexibility in the program so that States can tailor their Medicaid 

programs to suit their Medicaid population. 

Senator CASSIDY. And let me just say again I do not know if this 

is in the House bill, because the way we do the per beneficiary payment is a little bit different, is somewhat different than what the 

House does. 

But as an example of aligning incentives, as we know right now, 

if States recover waste, fraud, and abuse, they have to give back 

to the Federal Government the portion that the Federal taxpayer 

put in. So if it is a 60-percent State—40-percent State, 60-percent 

Federal Government—60 percent of that recovery goes back to the 

Federal Government. 

That works to disincentivize the State to go after waste, fraud, 

and abuse, because they have to kick it back. Under the per beneficiary model that we put forward, the State would keep 100 percent of recovered waste, fraud, and abuse, if you will, aligning the 

incentive for them to wring out that waste, fraud, and abuse. 

Secretary PRICE. It is those kinds of modifications and improvements to a system that I believe we all ought to be embracing, beVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 R:\DOCS\30210.000 TIM
15 

cause it is those kinds of things that will then allow us to align the 

incentives, as you suggested, but also make certain that every individual in that interaction is working for the benefit of the patient, 

making certain that there is not the fraud and abuse, making certain that the patient is able to see the physician that he or she 

wants to see, making certain that the patient is able to have the 

kind of treatment that he or she desires. 

Senator CASSIDY. Let me also point out that under the Medicaid 

Accountability and Care Act which I introduced, and then again in 

the Cassidy-Collins plan or the Patient Freedom Act, we have incorporated—States like California actually get more money, and 

some big blue States actually do well. Florida does better in terms 

of having more dollars for certain categories of patients in order to 

improve health care. 

So when I hear folks condemn it without understanding it, I feel 

like this could be an incredible missed opportunity to align those 

incentives to improve patient care, but also to protect the Federal 

and the State taxpayer. 

I look forward to working with you, and hopefully you will have 

folks on the other side of the aisle. 

I yield back. 

The CHAIRMAN. Okay. 

Senator Carper? 

Senator CARPER. Thanks, Mr. Chairman. 

I want to take a moment just to began, if I could, Mr. Chairman, 

to commend you and Senator Grassley for something you did— 

gosh, I want to say 24 years ago. And what you did is, you cosponsored legislation authored by Senator John Chafee that called for 

creating in every State marketplaces, exchanges. You called for not 

only establishing the exchanges and marketplaces in every State, 

but to also say that, in order to make sure that the insurance companies had a healthy pool of people to insure, there would be an 

individual mandate, that people had to get coverage. You cannot 

force people to get coverage, but you say, you have to get coverage 

and fine them somehow if they do not, incentivize them to get the 

coverage. 

I want to congratulate you on cosponsoring legislation that provided for an employer mandate and that also provided for the idea 

that insurance cannot deny coverage to people who have a preexisting condition. 

All those ideas are a part of Romneycare in Massachusetts. And 

frankly, all of those are a part of the Affordable Care Act. 

And the parts of the Affordable Care Act that the Republican 

Congress seem to like the least are those ideas. I think there is a 

real irony in all this. I like those ideas. I studied economics at Ohio 

State. I was a Navy midshipman. I like market forces. I like trying 

to harness market forces and make them work. 

You came up with a good idea in 1993. And I just wish to heck 

that you would work with us to try to make sure that those good 

ideas have a chance of working. And the reason why the marketplaces are failing in places like you mentioned, in Ohio, in your 

statement, Mr. Chairman—the reason why they are not working is, 

we have basically undermined the individual mandate so that peoVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 R:\DOCS\30210.000 TIM
16 

ple know they do not really have to get coverage. The young people 

are not. 

We have taken off the training wheels, so to stabilize the marketplaces and insurance companies—they lost their shirts in 2014 because of it. The lost less money in 2015. It got better. They raised 

their premiums, they raised their copays, they raised their 

deductibles, and they did better. 

A Standard and Poor’s column said, rather than the marketplaces being in a death spiral at the end of 2016, they were actually recovering until our new administration came in and said, well 

we are not sure if we are going to enforce the individual mandate, 

and by the way, we do not know for sure whether we are going to 

extend the cost-sharing arrangements. 

That provides unpredictability, lack of certainty for the insurance 

companies. What do they do? They say, we are going to raise our 

premiums more. Well, you are destabilizing the very idea that 

these guys came up with 24 years ago. 

The CHAIRMAN. Well, if I could just interrupt for a second. 

Those were ideas that were against—it was part of the antiHillarycare bill. 

Senator CARPER. They were good ideas. I commend you for them. 

If my life depended on it, I could not tell you what Hillarycare did. 

I could not tell you, but I know what your bill did. And frankly, 

they were good ideas. 

And now we are undermining, undercutting them. Why? Dr. 

Price, why? 

Secretary PRICE. Senator, I appreciate the observation. I would 

add to that that there are significant challenges out there, and 

there were before this administration started. In your State alone, 

premiums were up 108 percent before this administration started. 

In your State alone, there were fewer insurance companies offering 

coverage on the exchange before this administration started. 

So what we are trying to do is address, especially, that individual 

and small group market that is seeing significant increases in premiums, increases in deductions—— 

Senator CARPER. What are you doing? What are you doing to do 

that? How are you stabilizing the marketplaces? There are some 

good ideas. The three Rs, what are you doing on those—reinsurance, risk adjustment, risk—what are you doing there? 

Secretary PRICE. We passed—we put in place a market stabilization rule earlier this year that identified the special enrollment periods and the grace periods to make certain that they were more 

workable for both individuals and for insurance companies. 

We allowed the States greater flexibility in determining what a 

qualified health plan was to try to provide greater stability for the 

market. We put out word to all Governors across this Nation on 

both 1115 and 1332 waivers with suggestions regarding what they 

can do to allow for greater market stabilization in their States. 

And we look forward to working with you and other Senators to 

try to make certain that all those individuals, not just in the individual and small group market, but every single American has the 

opportunity to gain access to the kind of coverage that works for 

them and their families. 

17 

Senator CARPER. Let me just mention Medicaid. When I came to 

the Congress a long time ago before I was Governor, I used to 

think that Medicaid was health-care coverage for mostly women 

with children, poor women and children. You know where we spend 

most of our money—you know this. Most of the money we spend 

in Medicaid today is for old people, and they are in nursing homes, 

and a bunch of them have dementia. 

When we talk about cutting $800 billion out of the program, it 

is not just the poor women and children who are going to get hurt, 

it is those old people. And it is a lot of people between the ages 

of 50 and 65 who are white males who are going to be—so it is a 

lot of veterans. Their only hope and only chance of getting, in some 

cases, access to medical care, because they cannot get it—they do 

not qualify for VA coverage—is through Medicaid. 

The last thing I want to say is this. Mr. Chairman, here is an 

idea. This is—I extend this idea with good intent. I spent 8 years 

as a Governor. I loved being a Governor. I love being a part of the 

National Governors Association. 

John Engler and I, Governor of Michigan, used to come here. 

And here in the Ways and Means Committee in the House, we 

used to testify on welfare reform. And we would say, these are the 

views of the Governors, Democrat and Republican. This is what we 

think we ought to do. 

This is an issue that cries out for getting Governors to sit at the 

table and say, here is how this is going to affect us. This is the way 

the system works or why it does not work. This is why we like the 

idea of per capita caps and why it does not work. 

That is what we ought to be doing. I must say, the 13 folks who 

have been picked to help figure out a Republican alternative to the 

House-passed mess—it would be a lot more informative if we could 

have that kind of hearing. This is fine. I am happy to see you, Dr. 

Price, but that is actually something that might move us to a principle of compromise and get things done. People want us to get 

stuff done, and the idea that we are going to do it all Democrat or 

all Republican is crazy. 

Thank you for joining us. 

Secretary PRICE. Mr. Chairman, if I may just comment on that, 

because I think it is important for people to appreciate the work 

that the Department is doing. 

We met with the National Governors Association, met with Governors on both sides of the aisle to try to solicit their input in the 

kinds of suggestions that they would have regarding 1115 and 1332 

waivers, those that affect the Medicaid program and the individual 

market. So we are doing all that we can to try to make certain that 

States are able to address the challenges. 

Senator CARPER. Dr. Price, just to be clear. When Barack Obama 

left office—was it a perfect administration? No. 

When he left office, there was an insurer in every county of every 

State in this country. Thank you. 

The CHAIRMAN. Senator Cardin? 

Senator CARDIN. Secretary Price, thank you very much. 

I have heard your commitment to make sure that you will do everything you can to help all people in this country get access to 

18 

quality health care. And that is something that we all agree on; 

that is what we want to get done. 

I want to get to some of the practical problems here. I was in 

Federalsburg on Monday. It is closer to where Senator Carper lives 

than where I live. It is on the Eastern Shore of Maryland, Caroline 

County. It is a very rural community. 

They do not have the same access to health-care providers that 

we have in our urban centers. And I visited the Federalsburg Elementary School Wellness Center, where we have the Choptank 

qualified center that provides direct services to our children within 

the elementary school. 

And they are capable of doing that. This is, for many of these 

children, their only real ability to get access to primary care and 

to have someone who can check up on their health. And Choptank 

is able to do that under current law. But they tell me, as the legislation is passing from the House to the Senate, that that direct reimbursement would be cut off. 

They also told me that if they cannot continue their flows 

through the Medicaid program, they will clearly not be able to continue the services that they are providing today in Caroline County. 

So my question to you—I understand your commitment to help 

all areas. Today our qualified centers are providing lifelines in 

many communities. They rely upon creative ways to provide care 

in rural areas, including within school settings. And they depend 

greatly on the reduced numbers of uninsured and those covered 

under the Medicaid program for comprehensive reimbursement in 

order to be able to maintain their presence. 

So how do we ensure that, as we go through this transition that 

the administration is talking about, the children in Caroline County are going to be able to continue to get their health-care needs 

met? 

Secretary PRICE. Well, I appreciate that, Senator. There are significant challenges in the rural areas of our Nation for the provision of health services, and those have been present for a long, long 

time. And there is a strong commitment on the part of our department, and certainly on the part of the President, to make certain 

that rural health services are available. 

So whether it is through grants to the States, whether it is 

through an opportunity for various health programs within schools 

or elsewhere to make certain the children have the kind of health 

care, and not just coverage, that they need, then we are absolutely 

committed. 

One of the things that our budget includes is something called 

a New American Health Block Grant, which would provide resources to States to do just this sort of thing, to make certain that 

folks in rural areas of States have the opportunity to gain the kind 

of coverage and care that they need. 

So I look forward to working with you to make certain that we 

are able to make that happen. 

Senator CARDIN. The other area that I want to cover, you and I 

talked about in my office during the confirmation process, and I 

will bring it up again today. I want to know about your commitment to deal with minority health and health disparities. 

19 

We have separate agencies today to deal with it. We have an institute at NIH. And as I go around and look at some of the historic 

discriminations within our health care and recognize that health 

care is not equally available, and our focus has not been to all communities equally—and we are trying to compensate for that 

today—I worry about what you are doing, in Medicaid particularly. 

Every minority community I go to, they mention to me Medicaid, 

and that there is no capacity at the State level to pick up the slack 

if the Federal Government withdraws its commitment, either in the 

numbers of people who are covered or in the benefits that are reimbursed. 

So how do you square a commitment to continue down the path 

to reduce minority health disparities in this country and, not only 

the reduction in the bill that passed the House, but also the President’s budget with such a large cut in Medicaid? 

Secretary PRICE. This is incredibly important, and I cannot remember whether I mentioned it in this committee for my confirmation hearing or in the other one, in the HELP Committee. But the 

disparities and health outcomes are absolutely unacceptable to all, 

because what we see is its—and it is not just necessarily rural 

versus urban areas. 

There are areas within urban centers—I know of one in Atlanta 

where there is a zip code where the health outcomes, the disparities, are absolutely astounding in terms of the mortality that exists, the addiction that exists, the chronic disease that exists. And 

that is not because of lack of services close by, because it is in the 

center of the city. But imagine, if you would, please, a system that 

allowed for the Medicaid program in the State of Georgia to provide 

increasing resources to that zip code to provide a case manager— 

if you will—for every single individual in that zip code who has a 

chronic disease within the Medicaid program. That is now not possible. You cannot do that. 

That is the kind of waiver, that is the kind of partnership, that 

I think is so incredibly important to make it so that we actually 

identify those folks who need greater assistance if we are going to 

end the disparities that are out there, which you and I both have 

a commitment to ending. 

Senator CARDIN. I am all for flexibility for the States. I appreciate that, but I also know the pressures on State budgets. 

And I know in my State of Maryland, where our Governor and 

legislature have been pretty aggressive in helping the Medicaid 

population, they cannot pick up the slack. A waiver will not give 

them what they need to be able to make that type of commitment 

to underserved areas. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Okay. Senator Casey? 

Senator CASEY. Thank you, Mr. Chairman. 

Secretary Price, good to be with you this morning. 

I want to start by referencing a letter that I and, I guess, 14 

other Senators sent to you recently about the House bill H.R. 1628. 

But in particular, I wanted to reference the Congressional Budget 

Office report that just came out on the 24th of May. Of course, this 

is a nonpartisan report by the Congressional Budget Office assisted 

by the Joint Committee on Taxation. 

20 

I just delivered to the table, next to you there, a copy of the CBO 

report so you could go to the page. I direct your attention to page 

17 of the CBO report. On that page, the following statement is set 

forth there: ‘‘Medicaid enrollment would be lower throughout the 

coming decade, culminating in 14 million fewer Medicaid enrollees 

by 2026,’’ a reduction of about 17 percent from current numbers. 

It then references this chart which you will see on page 19 showing the numbers going down for Medicaid over that time between 

2018 and 2026, all bars going down. 

I reference that in the context of what you said on CNN on May 

7th. I am quoting you now, and the transcript is right in front of 

you. ‘‘There are no cuts to the Medicaid program.’’ That is what you 

said. 

Do you still stand by that statement being made on CNN? 

Secretary PRICE. The Medicaid program under the President’s 

budget would increase by—— 

Senator CASEY. Secretary Price, ‘‘yes’’ or ‘‘no’’? You can explain 

after that, but ‘‘yes’’ or ‘‘no’’? Do you stand by that statement you 

made on May 7th on CNN? 

Secretary PRICE. What I stand by is the statement that the 

President’s budget—— 

Senator CASEY. Do you stand by that statement? That is a very— 

I think there are eight words. 

Secretary PRICE. What is the baseline? 

Senator CASEY. ‘‘There are no cuts to the Medicaid program.’’ Do 

you stand by that statement? 

Secretary PRICE. What is the baseline? 

Senator CASEY. I am not—— 

Secretary PRICE. If there are no cuts, it is relevant. 

Senator CASEY. You have the statement in front of you. 

Secretary PRICE. Yes, I stand by that statement. 

Senator CASEY. Okay. 

Secretary PRICE. It is relative to something. 

Senator CASEY. Go ahead. You can—go ahead. 

Secretary PRICE. If the baseline is today’s amount of money being 

spent on Medicaid, the President’s budget provides for an increase, 

a CPI medical or CPI medical plus-one increase, in Medicaid spending for the programs—— 

Senator CASEY. Are you saying the statement in the CBO report 

on page 17 is not accurate? 

Secretary PRICE. I am saying that the statement that CBO made 

does not include the constellation of activities within the administration regarding how we would move forward on health care. 

Senator CASEY. CBO says there will be 14 million fewer Medicaid 

enrollees. So that is one. 

Secretary PRICE. Do you have the CBO report on the ACA when 

it was proposed in 2010, because what they said then—— 

Senator CASEY. I am talking about the House Republican bill 

that was passed. That is what we are talking about today. 

Secretary PRICE. I am talking about what the CBO did, because 

they had a similar graph about the number of individuals who 

would be covered now, and in fact, they were—— 

Senator CASEY. Let me direct your attention to the same CBO report you have in front of you, page 13. On the top of that page, it 

21 

says the following; the introductory sentence is, ‘‘The total deficit 

reduction includes the following amounts shown in table 3 at the 

end of the document.’’ The first bullet under that is, ‘‘A reduction 

of $834 billion in Federal outlays for Medicaid.’’ So do you still assert in light of that and in light of the previous CBO statement— 

do you still assert that there are no cuts to the Medicaid program? 

Do you stand by that statement? 

Secretary PRICE. Senator, as you understand, it depends—— 

Senator CASEY. All I am asking you to do, Mr. Secretary, is to 

tell us whether you stand by that statement or not. 

Secretary PRICE. I stand by that statement. 

Senator CASEY. Okay. 

Finally, let me go to a statement that was made in the CBO report. Now I am going to page 19 and 20, which you have in front 

of you. At the bottom of page 19, the following is set forth: ‘‘Under 

the act’’—meaning under the Republican bill passed in the House— 

‘‘premiums for older people could be five times larger than for those 

younger people in many States, but the size of the tax credits for 

older people would only be twice the size of credits for younger people. As a result’’—and here is the first bullet point—‘‘for older people with lower income, net premiums would be much larger than 

under current law on average.’’ 

Then it refers to table 5 at the end of the report. So I ask you, 

in the context of another statement you made—now, this is ‘‘Meet 

the Press’’ in March—March 12th. You said that ‘‘nobody will be 

worse off financially as a result of the bill.’’ Do you stand by that 

statement? 

Secretary PRICE. I do not believe that statement was in reference 

to the bill. It was in reference to the health-care plan that we have 

put forward, and I stand by that statement. 

The CHAIRMAN. Senator, your time is up. 

Senator CASEY. Well, I hope that you focus more on, not just the 

proposed reforms you talk about for Medicaid, but I hope you focus 

on people like the 15 million Americans who get Medicaid because 

they have a disability. 

We are all for a discussion about making programs better. But 

I think you should focus more intensively on those people and be 

truthful when you are commenting about something as important 

to American lives as the Medicaid program. 

And I would argue, sir, you have been deliberately misleading 

based upon those statements. 

Secretary PRICE. Senator, with respect, that is precisely what we 

are focusing on. The American people understand and appreciate 

that the health-care system that we currently have, for many of 

them, is not working. For many of them in the Medicaid program, 

it is not working. 

And what we are trying to do—and we would love to have your 

support. What we are trying to do is to make certain that we have 

a system that responds to the wishes and needs and the healthcare needs of all Americans. 

Senator CASEY. We all agree on that. But I think you have to 

start being straight with people about what will happen. 

These are major cuts. The CBO said it in more ways than one. 

I think you should be truthful about that. 

22 

The CHAIRMAN. Senator McCaskill? 

Senator MCCASKILL. Thank you, Mr. Chairman. 

Let me start by saying, Mr. Chairman, that you and Senator 

Grassley I have a great deal of respect and admiration for. 

So my first question that I would make of the chair is, will we 

have a hearing on the health-care proposal? 

The CHAIRMAN. Will we? 

Senator MCCASKILL. Yes. 

The CHAIRMAN. We have already had one, but—— 

Senator MCCASKILL. No, I mean on the proposal that you are 

planning to bring to the floor of the Senate for a vote. Will there 

be a hearing? 

The CHAIRMAN. Well, I do not know that there is going to be another hearing, but we have invited you to participate and give your 

ideas and—— 

Senator MCCASKILL. That is not true, Mr. Chairman. Let me just 

say, I watched carefully all of the hearings that went on on the Affordable Care Act. I was not a member of this committee at the 

time, although I would have liked to have been. 

Senator Grassley was the ranking member. Dozens of Republican 

amendments were offered and accepted in that hearing process. 

And when you say that you are inviting us, and I heard you, Mr. 

Secretary, just say, ‘‘We would love your support.’’ For what? We 

do not even know. We have no idea what is being proposed. 

There is a group of guys in a backroom somewhere who are making these decisions. There are no hearings in the House. 

I mean listen, this is hard to take, because I know we made mistakes on the Affordable Care Act, Mr. Secretary. And one of the 

criticisms we got over and over again was that the vote was partisan. Well, you could not have a more partisan exercise than what 

you are engaged in right now. 

We are not even going to have a hearing on a bill that impacts 

one-sixth of our economy. We are not going to have an opportunity 

to offer a single amendment. 

It is all being done with an eye to try to get it by with 50 votes 

and the Vice President. I am stunned that that is what Leader 

McConnell would call ‘‘regular order,’’ which he sanctimoniously 

said would be the order of the day when the Republicans took the 

Senate over. 

We are now so far from regular order that new members do not 

even know what it looks like. And I know that does not make you 

happy, Mr. Chairman or Senator Grassley, because you have been 

in the Senate so long. You know the value of the hearing process 

and the amendment process. 

And even though the vote ended up being partisan, just as yours 

will be, the amendment process was not. Both of you had amendments that were put into that bill, as did other members of this 

committee. I want that opportunity. Give me that opportunity. Give 

me an opportunity to work with you. That is what is so discouraging about this process. 

So, Mr. Secretary, I want to ask you. There is a 27 year-old 

young man who lives in Jefferson County, and he is finally making 

enough money that he can do one or two things. He can either buy 

23 

a health insurance policy or he can buy a new Harley. And which 

do you think he is going to buy? 

Secretary PRICE. You tell me. 

Senator MCCASKILL. I think he is going to buy the new Harley, 

because he feels young and invincible. And he has wanted a Harley 

his whole life. 

He buys a new Harley. He lays it on the pavement on the interstate. An 18-wheeler cuts him off, and he is life-flighted to the hospital. Do you believe that hospital should treat him? 

Secretary PRICE. Absolutely. We have an obligation to do so. 

Senator MCCASKILL. In America, we treat you whether you are 

insured or not; correct? 

Secretary PRICE. Yes, and there is a mandate that he buy insurance right now. 

Senator MCCASKILL. Okay, but you are going to do away with 

that. So we are now—— 

Secretary PRICE. In your scenario, is it working? 

Senator MCCASKILL. That is not my question. I am saying—— 

Secretary PRICE. It was my question. 

Senator MCCASKILL. I am saying under your scenario, he does 

not have to buy insurance. He buys the Harley, he is life-flighted 

to the hospital. He has traumatic brain injuries, and we deliver $3 

million worth of care for him. 

My simple question to you, Mr. Secretary, is, who pays for it? 

Secretary PRICE. Well, sadly it is spread among the entire system, and frankly, nobody pays for it from the Federal Government 

standpoint. 

Senator MCCASKILL. Correct. So people pay for it. 

Secretary PRICE. Or people provide the services without any compensation whatsoever. 

Senator MCCASKILL. Well, they have to make it work out at the 

end of the year. So what the hospital does is, they call the insurance company and they say, ‘‘We had X amount of uninsured care 

this year. We are going to have to raise your prices for labor and 

delivery, or we are going to have to raise your prices for an 

angioplasty.’’ 

And then that insurance company calls the small business down 

the road and says, ‘‘I have bad news for you. We are going to have 

to raise your premiums because the hospital is charging us more, 

because we have to cover the uninsured care.’’ 

Secretary PRICE. And in your State, premiums were up 145 percent between 2013 and 2017. 

Senator MCCASKILL. That is not true. 

Secretary PRICE. Yes, ma’am. 

Senator MCCASKILL. No. 

Secretary PRICE. We will be glad to show you the numbers. 

Senator MCCASKILL. I will be glad to debate you on the numbers. 

But the point is that when we add 24 million more uninsured, who 

is going to pay the bills? 

Secretary PRICE. Well, we will not be adding 24 million uninsured. 

Senator MCCASKILL. So you disagree with the CBO score? 

Secretary PRICE. Absolutely. 

Senator MCCASKILL. Okay. 

24 

But if there are any more uninsured, if anybody is kicked off 

Medicaid, who pays those bills? I want to make sure everybody understands, we are just passing along these costs to people who have 

insurance policies. 

Secretary PRICE. There are 20 million individuals in America 

right now who do not have insurance under the current system. 

That is a problem. 

Senator MCCASKILL. I know, and we are paying their bills by 

higher premiums. 

Secretary PRICE. Exactly. And so what we are trying—— 

Senator MCCASKILL. So we are going to increase that and create 

even more uninsured. 

Secretary PRICE. On the contrary. 

The CHAIRMAN. Okay. Okay. Your time is up. 

Secretary PRICE. We are trying to decrease the number—— 

The CHAIRMAN. Senator Grassley has one question. He has been 

waiting here patiently, and—— 

Senator MCCASKILL. Well, I was only over by 35 seconds, Mr. 

Chairman. I think I did okay. [Laughter.] 

The CHAIRMAN. You have done so much better than the rest of 

your colleagues. I am very proud of you. 

Senator Grassley? 

Senator GRASSLEY. Mr. Secretary, I only have one question, because I have to run to another meeting. So I am going to ask you 

this one question and then submit other questions for you to answer in writing. 

The Rural Community Hospital Demonstration program was established in a bipartisan manner to protect patients’ access to 

health care. These hospitals are collectively called ‘‘tweeners.’’ 

Another bipartisan piece of legislation, the 21st Century Cures 

Act, extended this program. The language was very, very clear. The 

program was to be extended beginning on the date immediately following the last day of the initial 5-year period. 

Despite this clear language, CMS proposes to begin implementation of this extension on or after October 1, 2017. This gap in implementation is inconsistent with congressional intent, which requires a seamless extension of this critical program. Furthermore, 

it is inconsistent with the way the agency implemented the first 5- 

year extension of this program. 

I have a bipartisan letter to Administrator Verma asking her to 

look at the alternative payment timing that was included in the 

proposed rule. I would like to submit the letter for the record, Mr. 

Chairman. 

The CHAIRMAN. Without objection. 

[The letter appears in the appendix on p. 45.] 

Senator GRASSLEY. And by the way, you, Mr. Secretary, were cc’d 

on this letter. 

So, Dr. Price, a very simple question. I hope you can give consideration to this request in this letter, because in several States, 

many States, this is an issue, particularly rural States. One of 

them is Alaska, as an example. I hope you can help us make sure 

that we have a seamless implementation of this program. 

Secretary PRICE. Absolutely, Senator. And we will get back with 

you, because my understanding in looking into this is that the proVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 R:\DOCS\30210.000 TIM
25 

posed rule was put out in April of this year and allowed for rural 

hospitals to apply to this program, literally, as we speak. I think 

the deadline was the latter part of May. 

But we have a commitment to it, and it is so incredibly important for rural areas. We will get back with you, and I look forward 

to working with you on it. 

Senator GRASSLEY. Thank you. 

I yield back my time. 

The CHAIRMAN. Thank you. 

Senator Brown? 

Senator BROWN. Thank you, Mr. Chairman. 

Mr. Secretary, thank you for joining us. 

You call the opioid epidemic a key public health priority, and you 

highlight how this year’s budget proposes a $50-million increase in 

funding over previous levels, up to $811 million. Eight hundred 

eleven million dollars might seem like a lot of money, and it is. But 

do you know what is a bigger number? Nine hundred thirty-nine 

million dollars—$939 million is the amount of money one State, my 

home State of Ohio, spent on fighting the opioid epidemic last year 

alone. Nine hundred thirty-nine million dollars my State spent. 

This chart came from the Ohio Department of Medicaid’s 

website, Republican Governor Kasich’s website. In 2016, Ohio invested $939 million in fighting this opioid epidemic. 

Now, do you know where 70 percent of that total $939 million 

came from? Six hundred fifty million dollars came from Medicaid, 

$650,200,000 came from Medicaid. Despite this investment, despite 

Governor Kasich investing nearly $1 billion in prevention, education, medication, assisted therapy, and other treatment, eight 

people—if today is like most days—eight people in my State will 

die from an opioid overdose. Four thousand Ohioans died from 

overdoses last year. We are on track to far exceed that number. In 

some counties, we have already exceeded the number of the year 

before, and this is only June. 

Forty-three people died in Cuyahoga County, the State’s largest 

or second-largest—it is really close now—county in the State. 

Forty-three people since Memorial Day. 

This epidemic continues to devastate communities in my State. 

I know you know that. I agree with what you wrote in your testimony: we are not winning this fight against this epidemic. 

But I am confident we would lose far more people, far more lives, 

have far more families turned upside down, if we were not spending this money, if Medicaid were not spending this $650 million. 

Do not take my word for it. Two weeks ago, my colleagues—both 

members of this committee—Senator Portman, my Ohio friend, Republican, and Senator Carper, my Delaware friend, Democrat, held 

an important hearing about this epidemic to discuss proposals. 

I want to quote from a couple of people. The witnesses on the 

second panel of that hearing were a doctor and a police chief from 

Newtown, OH, the most conservative part of our State. He was the 

former head of drug control policy and coroner from Cuyahoga 

County. Both voiced opposition to either ending the Medicaid expansion or cutting the program. 

26 

The four experts brought by Senator Portman to his committee 

all said, do not cut Medicaid—do not cut it and do not end the expansion. 

The Cuyahoga County coroner noted anything like Medicaid expansion being eliminated that limits people’s access to health 

care—I cannot see any good coming from that in this crisis, especially with the high rates of mortality. The police chief from Newtown, OH, a little town near Cincinnati, he is on the front lines of 

this fight. He said we should not be decreasing Medicaid. 

He talked about one of the programs that his teams are doing 

in the Hamilton County area, signing people up for Medicaid, then 

getting them into treatment. You sign them up for Medicaid, then 

you get them into treatment. 

Right now, 200,000 families in Ohio are getting opioid addiction 

treatment who have insurance because of Medicaid. Yet your administration continues to talk down, to criticize Medicaid expansion 

and to suggest cuts in Medicaid. 

He went on to say, taking away Medicaid would make this fight 

even more difficult. I do not even want to imagine the number of 

overdose deaths we would have had in Ohio if our Republican Governor—I am proud of what he did, and he has gotten a lot of criticism from President Trump, and a lot of criticism from your 

party—had not expanded Medicaid to those 700,000 families. 

The budget proposal your team put together cuts Medicaid by 

$600 billion. That is in addition to the House ACA repeal which 

cuts Medicaid by $800 billion. Medicaid covers one-third of all substance abuse treatments in communities across Ohio. In Ohio it 

covers 50 percent of all medication-assisted treatment. 

You sit in front of us. You have taxpayer-funded health insurance. We have taxpayer-funded health insurance. The 200-plus Republican members of the House who have taxpayer-subsidized 

health insurance are all willing to take it away from these 200,000 

Ohioans getting opioid treatment. 

You say you are interested in fighting the opioid epidemic, but 

your policy proposals tell a different story. You flat-fund substance 

abuse treatment grants. You actually reduce spending on prevention programs in the National Institute on Drug Abuse. 

You cannot treat the disease with just grant funding. You have 

all of a sudden found that we can do all kinds of things with 

grants. No you cannot. Compare it to the size of this problem. It 

is like, maybe you do not know many—but I do not want to go 

there. 

I think probably Senators do not meet enough people who are in 

these programs and who are benefitting from them. But you would 

never propose we fight cancer and pay cancer treatments through 

a $50-million increase in a grant program. 

You said in a recent op ed, and I appreciated it, in The Charleston Gazette Mail that increasing access to substance-use disorder 

treatment, including medication-assisted treatment, is part of your 

department’s plans to address the opioid crisis. What you are not 

telling your West Virginia readers, Donald Trump’s second-best 

State in the country, you are not telling them what you are really 

doing. 

27 

So my question is—sorry for the preface, but how do you plan to 

increase access to treatment when you cut the single-biggest source 

of funding for treatment by $600 billion in your budget? How does 

that possibly add up in the Trump math, the Trump-Price math of 

2017? 

Secretary PRICE. Yes, Senator, you know that I visited your 

State, the southwest corner of your State, to visit with victims of 

opioid addiction, the parents of kids who died. One mom told me 

about her son who died in the bathroom of a Macy’s from an overdose. 

The scourge that we have running across this country right now 

is absolutely unacceptable to you. It is unacceptable to me. It is unacceptable to the President. 

Our commitment is to make certain that what we put in place 

is a program that actually works. You have seen the graphs. The 

numbers continue to go in the wrong direction. 

So if we are going to be married to a system that has resulted 

in 52,000 overdose deaths in 2015, that is not a system I want to 

be married to. What I commit to you, and what I look forward to 

working with you on is a system that actually works for the parents who are suffering today because they have lost a loved one. 

What I commit to working with you on is a system that actually 

works for those who are addicted who want to gain recovery and 

treatment. So that is the system that I look forward to working 

with you on. 

Whether or not it is paid for through the Medicaid system or 

whether or not it is paid for through—imagine a system that actually isolates the individuals’ treatment for addiction and takes it 

out of the current system that we have so that we can focus resources on those individuals who have the addiction. 

Imagine that kind of system, what that would do for (1) the ability to treat those folks, but (2) the ability for the system to actually 

thrive in a better way fiscally as well. 

Imagine a system that works better than the one that results in 

52,000 Americans dying of overdoses. 

Senator BROWN. It is a little curious to blame Medicaid, as you 

seem to be doing, for the system that has resulted in 50,000 

deaths. It is not because of Medicaid. 

I mean, how do you do this when 200,000 people right now are 

getting treatment in my State? They are getting treatment. They 

are not all successful. We know people are in and out, and it often 

takes three, or four, or five times, but if you cut Medicaid, as you 

want to bludgeon Medicaid, how are you—you can talk about a 

grant program and all of this good talk, and I know you mean it 

in terms of wanting to take care of people. You are a physician. I 

know all of that, but how does this possibly work if you are going 

to cut the biggest revenue stream that takes care of these families 

and puts them in these treatment programs? 

The CHAIRMAN. I will allow you to answer that. You are way over 

your time, Senator. Answer that, and then I am going to go to Senator Cantwell. 

Go ahead. 

Secretary PRICE. That is what I am trying to encourage us to 

look at, is a system that actually works for the individuals who are 

28 

suffering from this addiction, a system that actually focuses attention and focuses treatment on it, a system that recognizes that we 

need greater public health surveillance, a system that recognizes 

that pain management in this Nation is flawed, a system that has 

not put the kind of resources into research so that we can turn this 

curve in an appropriate direction, which is down. 

We continue to tolerate a system that allows for these kind of addiction and overdose deaths in this Nation. It is unacceptable to 

me, and I will not stand for it. 

The CHAIRMAN. Senator Cantwell? 

Senator CANTWELL. Thank you, Mr. Chairman. 

Secretary Price, I have a couple of questions. There have been 

press reports that the Department is working on a rule that would 

deny birth control for employees. Are you aware of this? 

Secretary PRICE. There is a proposed rule that is out currently 

on conscientious objection in the contraceptive mandate. 

Senator CANTWELL. You are proposing that you will allow employers to discriminate against woman in having birth control be 

part of an insurance policy provided by employers? 

Secretary PRICE. What is currently occurring is solicitation of 

input, and in that process we are—I am not able to make any further comment. 

Senator CANTWELL. You cannot make a comment whether you 

think that birth control should be part of basic health offered in insurance plans? 

Secretary PRICE. I think that for women who desire birth control, 

it ought to be available. 

Senator CANTWELL. Are you promulgating the rule? 

Secretary PRICE. There is a proposed rule that has been put forward. 

Senator CANTWELL. So you think that employers should offer 

birth control as part of insurance programs, and not be able to just 

say on a conscientious basis they do not believe in providing it? 

Secretary PRICE. No. I believe that women who desire to have access to birth control ought to be able to have access to birth control. 

Senator CANTWELL. Through their employer? 

Secretary PRICE. I believe that women who desire to have access 

to birth control ought to have access to birth control. 

Senator CANTWELL. Okay. This is a very big problem. Women 

cannot be discriminated against by their employer who wants to 

cherry-pick various aspects of women’s health. So if this is the intent of this rule, I guarantee you, there will be a big fight on this 

issue. 

I want to ask you about proposed Medicare cuts, because I know 

the administration had said that they were not going to cut Medicare, but my understanding is that the budget includes a 2-year extension, a mandatory sequestration, which would impose a 2- 

percent cut on Medicare providers, such as hospitals and rural hospitals. The extension of the mandatory sequester would be about 

a $30-billion cut from the Medicare program. So does your budget 

include that? 

Secretary PRICE. I think that what you are referring to is the 

continuation of current law, and the budget accommodates or reflects current law. 

29 

Senator CANTWELL. So you are saying that the extension of the 

mandatory sequester is not a cut to Medicare? 

Secretary PRICE. Again, it is the same kind of question that Mr. 

Casey had. It depends what your baseline is. If your baseline is 

current law, then there are no reductions. 

Senator CANTWELL. Okay. And so you believe we should be making these reductions to rural health-care facilities? 

Secretary PRICE. I believe that what we should do is make sure 

we have a health-care system that is financially viable and feasible 

and makes it so that the American people have access to the kind 

of care that they need. 

Senator CANTWELL. And you are behind the cut—okay. I will just 

take that as a ‘‘yes,’’ that you are behind this particular cut. And 

I would just say that our rural hospitals are struggling to make 

sure that we are providing good care. 

There are lots of efficiencies with the delivery system. I had a 

chance to ask you about this issue of rebalancing on the Medicaid 

budget. I do not know if you have had more time to look at that, 

to rebalance from nursing-home care to community-based care. 

That is something that we wrote into the Affordable Care Act that 

States are doing, and it is a huge savings to the budget. 

Is that something that you think the administration can get further behind? 

Secretary PRICE. Yes. As I mentioned in answer to a couple other 

questions, the dynamism of the health-care market is so important 

to embrace, because we ought to be allowing and accommodating 

in our system for individuals to receive care where it best suits 

them and their providers. 

So you have identified an area where we ought to be able to accommodate that, and the system should allow for it. 

Senator CANTWELL. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Senator Nelson? 

Senator NELSON. Thank you, Mr. Chairman. 

Good morning, Mr. Secretary. 

Secretary PRICE. Good morning. 

Senator NELSON. Mr. Secretary, I just want to ask you, for clarification, about some things that are in the budget, in your proposed 

budget. 

Something that we have heard a lot about are the cost-sharing 

reduction subsidies. Seventy-two percent of Florida’s Affordable 

Care Act consumers benefit from these, and that is why I am asking. 

Now, it is hard to get a clear answer on this. The private market 

providers under the exchanges cannot take the uncertainty of 

knowing whether or not the subsidies are going to be there. Insurers have confirmed this to my questions, when proposing rate hikes 

or even pulling out of the markets because of the uncertainty. 

So can you confirm that the administration will continue to reimburse insurers for these subsidies that help so many of my constituents see a doctor? I notice it is in your budget through fiscal 

year 2018. What should we believe? 

Secretary PRICE. Senator, as you know, the answer may not 

prove satisfying to you, but the current court case is now House v. 

30 

Price, and so I am the defendant in that case. So what I can tell 

you is just what you said, and that is that the budget reflects the 

payment of the CSR payments through 2018. 

Senator NELSON. So does that answer mean if the court case 

went in the favor of the administration that, basically, those subsidies would be cut? 

Secretary PRICE. What I can tell you—and again, I would like to 

be able to share more, but as the defendant in the case, I am not 

able to do so. But I can tell you, as you noted, that the budget accommodates and reflects CSR payments through 2018. 

Senator NELSON. And the unfortunate dilemma is, Mr. Chairman, that because of the uncertainty, it predicts an outcome that— 

the ACA, the Affordable Care Act, is in the exchanges which are 

bringing health insurance to millions and millions of people who 

otherwise could not afford it. The uncertainty of whether or not 

those subsidies will be there in the future, in fact, is undermining 

the ability of insurers to be able to project what their premiums 

are going to be and, therefore, to protect themselves. What they are 

doing is jacking up their premiums, which is undercutting the 

whole reason for having the subsidies in the first place. 

Let me shift to the Zika virus, Mr. Secretary. As we discussed, 

you know there are a bunch of cases, 1,400 in Florida alone. And 

your administration’s 2018 budget states, ‘‘Outbreaks like Zika will 

not be a onetime event. Capacity building at all levels as well as 

innovation in diagnostics are needed to prevent and control these 

outbreaks and understand more about these vectors.’’ 

Yet, the administration slashes the very programs designed to 

bolster capacity at all levels. So, Mr. Secretary, does your budget 

cut more than $7.2 billion from NIH? 

Secretary PRICE. As it relates to Zika, I cannot tell you how 

proud I am of the work that is being done at NIH to work on a 

vaccine. We are in the phase 2–B trials of a vaccine. 

The CDC is doing phenomenal work to make certain that the 

surveillance and detection is out—— 

Senator NELSON. I understand all of that. Does the budget—— 

Secretary PRICE. We believe that the budget accommodates for 

handling any challenge that may exist from the Zika threat. 

Senator NELSON. I understand. But the question is, does it cut 

$7.2 billion from NIH? 

Secretary PRICE. The proposed budget identifies reductions that 

we believe can be accomplished at NIH, and savings that can be 

accomplished at NIH, by increasing efficiencies and making certain 

that we have the core mission of NIH accomplished through the resources that are made available. 

Senator NELSON. Right. Efficiencies are great. But I just want to 

know black or white, does it cut $7.2 billion from NIH? 

Secretary PRICE. The reductions—I think your number is accurate. It depends, again, what the baseline is, but I think your 

neighbor is accurate. 

Senator NELSON. Okay. 

The CHAIRMAN. Okay. 

Senator Bennet? 

Senator NELSON. Wait a minute, Mr. Chairman. I have a couple 

other questions, just simple ‘‘yes’’ or ‘‘no’’ questions. May I get—— 

31 

The CHAIRMAN. Why don’t you go ahead, but your time is up. 

Senator NELSON. Well, I understand, but—— 

The CHAIRMAN. Go ahead. Go ahead. 

Senator NELSON [continuing]. It is hard to get a ‘‘yes’’ or ‘‘no’’ answer. 

The CHAIRMAN. Go ahead. 

Senator NELSON. Thank you. 

Does the budget cut more than $600 billion from the Medicaid 

program on top of the cuts included in the House-passed health 

care bill? 

Secretary PRICE. No. 

Senator NELSON. Your budget does not. Okay. 

Does it cut more than $1.3 billion from the CDC? 

Secretary PRICE. It is about a 10-percent reduction in resources 

available to CDC through appropriate priorities and identifying efficiencies within CDC. We believe strongly that the CDC budget is 

what is needed to continue to protect, not just the United States, 

but the world. 

Senator NELSON. So is that a ‘‘yes,’’ it cuts $1.3 billion from 

CDC? 

Secretary PRICE. What it is is a statement that affirms the President’s desire to get folks to appreciate that you do not measure success of a program by the amount of money that is going into it. You 

measure it depending on whether or not the outcome and the mission are accomplished. 

And if we can accomplish the mission, the appropriate mission 

of CDC, with less resources, then one would think that that would 

be something to celebrate. 

Senator NELSON. Mr. Chairman, I understand all the reasoning 

behind it. I just want to know, does it cut $1.3 billion from CDC? 

Secretary PRICE. As I said, there is about a 10-percent reduction 

in resources going to CDC. 

Senator NELSON. Does that equate to $1.3 billion? 

Secretary PRICE. I think your number is accurate. 

Senator NELSON. Great. Does it cut $850 million from the Food 

and Drug Administration? 

Secretary PRICE. I do not believe so. The FDA—what we envision 

in the FDA is to shift the resources coming to FDA, and I think, 

in fact, there is about a $500-million increase in resources coming 

to the FDA through a modification and an improvement in the user 

fee process. 

The CHAIRMAN. Senator, you are way over your time. You can 

submit questions in writing. I am sure the Secretary will answer 

them. 

Senator Bennet? 

Senator BENNET. Thank you, Chairman Hatch. If it is okay with 

you, I think I will yield to Senator Roberts who has been here waiting. And then I would like to go after him, if that is okay. 

The CHAIRMAN. That is very gracious of you, because he has been 

waiting. 

So I will go to Senator Roberts, and then I will come back to you. 

Senator ROBERTS. Mr. Chairman, are we under the 10-minute 

rule now, or 5, or 6, 7? What are we doing? I am assuming we are 

under the 5-minute rule. 

32 

The CHAIRMAN. Right. 

Senator ROBERTS. I want to get in the weeds a little bit. 

Welcome back, Doctor. 

Secretary PRICE. Thank you. It is good to be back. 

Senator ROBERTS. There are statements that you are responsible 

for people dying in Ohio, all of the current problems in the Affordable Care Act for the last 8 years, reductions in funding in rural 

areas—which of course, I am very much interested in—the entire 

budget by the President, or to be more accurate, OMB. And the 

chairman has been chided for not having regular order where what 

we have in the Senate today is called cloture and delay. That is not 

regular order. And then I sort of lost my place—oh, the Zika 

virus—hindering eradication of the Zika virus. 

Are you enjoying yourself? 

Secretary PRICE. The job is a great challenge, and I am enjoying 

the challenge, yes, sir. 

Senator ROBERTS. I am going to get in the weeds here a little bit. 

In your prior life on this side of the witness table, I know you 

shared my frustration with the implementation of the competitive 

bidding program. I am not going to go too much further into this, 

except we do not have the providers that we used to have, and people are having to drive 150 miles with regards to durable medical 

equipment and access to it. 

Last year, we passed a 21st Century Cures Act. We sought to reduce, at least temporarily, the impact of these payment changes. So 

to preserve the intent of the program to improve the effectiveness 

of payment amounts and reduce the beneficiary costs, save the 

Medicare program money, do you think the agency needs to provide 

additional regulatory changes to its implementation and—what I 

am trying to do is get a sense of whether legislation is needed. 

Secretary PRICE. Legislation would be welcome that moved in the 

direction of allowing the durable medical equipment providers out 

there a greater opportunity to provide services to their clients, to 

the patients across the land. Regardless of whether legislation is 

forthcoming, the Department is looking very seriously at the issue 

of DME, because we believe strongly that the previous program 

that has been put in place is limiting the access to appropriate 

services for folks all across this land, especially in rural areas. 

Senator ROBERTS. I appreciate that. I have been sitting here listening to my friends across the aisle with regard to their concerns 

with what is happening to our health-care system. I had a question 

that could be repetitive. The chairman is here somewhere, and you 

have talked about it, about what is happening with our premiums 

and our copays—here it is. Blue Cross Blue Shield of Kansas City 

announced they are pulling out of Obamacare exchanges next year, 

leaving Kansas with less options. In Kansas and nationwide, premiums have doubled; in three States they have tripled. 

And yet I hear my colleagues saying ‘‘stay the course’’ or ‘‘full 

steam ahead,’’ full funding, if, in fact, we could do that—keep funding what is not working. 

I must say that is 180 degrees from what has happened, and trying to pin it on you is rather amazing. This is like blaming Butch 

Cassidy and the Sundance Kid for jumping off the cliff. Or to be 

more accurate, we are in the Obama car, and it is a lot like being 

33 

in the same car with Thelma and Louise, and we are going into the 

canyon. 

We have to get out of the car. I think that is what you are trying 

to do. And I wish you well in that. I do not think you are responsible for the entire budget that has been proposed by OMB. 

I am not really in favor of some of the things with regard to agriculture. And we plan to change that. We hope to get a budget. I 

do not know of any time the Senate has considered seriously any 

budget that came from a President since Reagan. 

And then this other business of regular order, with regard to the 

chairman. I was here during that whole episode of when we put 

Obamacare together, and days and nights, and days and nights. It 

started in the HELP Committee. That product is sitting on a shelf 

somewhere gathering dust. 

I had one amendment. It was on rationing—you know what I am 

talking about, with IPAB and all the rest of them. It failed on a 

party-line vote. 

And I came here. And again I had the same amendment on rationing. It failed on a party-line vote. And then the product went 

to the floor of the House and went behind closed doors in the Leader’s office—sort of like Charlie Rich, singing ‘‘Behind closed doors.’’ 

And out came Obamacare. And we have had 8 years of this now, 

and I just think blaming you for all of these deficiencies that we 

are trying to correct on a bipartisan basis has been over the top. 

And my time, sir, has expired. 

The CHAIRMAN. Well, thank you. And I endorse what you just 

said. 

Senator Bennet? 

Senator BENNET. Thank you, Mr. Chairman. I really am grateful 

for you holding this hearing. 

Mr. Secretary, it is great to see you again. 

Secretary PRICE. Good to see you. 

Senator BENNETT. I want to start just by understanding the 

Medicaid cuts, or however you want to characterize them. But the 

numbers as I understand them are that there is about $834 billion 

of cuts in the House bill, the House health-care bill. 

And there is about $610 billion in savings or cuts to the Medicaid 

program in the budget. Is it right to add those numbers together, 

or is there overlap among those numbers? I just want to make sure 

we are accurate. 

Secretary PRICE. I do not believe it is correct to add those numbers together. My understanding is the budget does not assume 

passage of the House bill. 

Senator BENNET. My understanding is that it absolutely does assume passage of the House bill. 

Secretary PRICE. It assumes as it relates to Medicaid. 

Senator BENNET. Yes. 

Secretary PRICE. It assumes that what is put in place is a percap or a block-grant program that will reflect over a 10-year period 

of time a savings of $610 billion. 

Senator BENNET. Okay. If we could work together, I would appreciate the opportunity to work with your staff to see whether in the 

end we are talking about $834 billion or $1.4 trillion. In either 

34 

case, it is a huge cut to the Medicaid program. I mean, even if it 

is just $834 billion, I think that is a 25-percent cut to Medicaid. 

I would ask you—I asked the Governor’s office in Colorado to tell 

me who is on Medicaid in my State. And here is what they said, 

and I would like to ask you whether you dispute any of this. 

They said that when you look at who is on Medicaid in Colorado, 

nearly half the program are children. Does that strike you as probably right? 

Secretary PRICE. That is in the ballpark for most States. 

Senator BENNET. And more than 40 percent of our Medicaid 

spending supports the disabled and seniors, many of whom are in 

long-term care facilities. So these are people in general who have 

spent down their life savings for the privilege of being in a nursing 

home funded by Medicaid. Would you agree that that is right? 

Secretary PRICE. It sounds a little higher than most States, but 

I think it is in the ballpark. 

Senator BENNET. Rough justice. 

And they say of the remaining adults on Medicaid, the vast majority work but still cannot afford health insurance on their own. 

Does that sound familiar to you in terms of Colorado or other 

States? 

Secretary PRICE. There are certainly individuals who have Medicaid coverage who are employed. 

Senator BENNET. Well, what they would say is, there is a tiny 

residual percentage of people who are not disabled, are not elderly, 

are not children, and do not work, but are on Medicaid. There is 

some small percentage of such people. Is Colorado different from 

other States, or do you think that is—— 

Secretary PRICE. We can get you the numbers for your State, I 

am sure. 

Senator BENNET. That would be great, but do you see any reason 

to dispute what I just said? 

Secretary PRICE. I suspect that is—— 

Senator BENNET. So here we have the Secretary—and I appreciate your candor—saying that Medicaid is not supporting a whole 

bunch of people who should be working and are not working. 

Would you agree with that? 

Secretary PRICE. I think it varies from State to State. There are 

certainly individuals who are able-bodied without kids on Medicaid 

who are not working. 

Senator BENNET. But that is a very small percentage of the people. I do not want to have to walk back through the list. I mean, 

I think we have agreed that that is a very small percentage. 

So I think it is important, because this is the Secretary of Health 

and Human Services, and he is not saying there are a whole bunch 

of Americans out there who are lazy, who are on Medicaid because 

they do not want to work. It does not comport with the evidence. 

It is not true, and it certainly is not true in my State. 

So the question then becomes, if we are going to cut the program 

by 25 percent, if you were running Colorado’s Medicaid program— 

and I have a story that I will share with your staff from The Denver Post yesterday or the day before, a front-page story about the $700 million a year by 2023 that the State is going to have to come 

up with to compensate for the withdrawal of the Federal GovernVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 R:\DOCS\30210.000 TIM
35 

ment, the Medicaid reductions that are in just the House-passed 

bill, not your budget, but the House-passed bill. 

What is your advice to us in our State about how we ought to 

handle those cuts, that $700 million to our State? When 40 percent 

of the people on the program are poor children, when you have a 

whole bunch of people who are in nursing homes, when you have 

a whole bunch of people who are working but unfortunately cannot 

afford private insurance, what is my State supposed to do? 

Secretary PRICE. I think, again, the constellation of programs 

that we would envision would provide for greater opportunity for 

individuals to get health coverage as opposed to less right now. I 

would remind folks that, again, there are 20 million Americans 

without health coverage. I do not know what the number, specifically, is in Colorado, but there is a significant number of individuals who do not have health coverage. 

What we would envision is a system that actually responds to 

those folks and individuals who find that it is better for them not 

to be covered on the Medicaid system, but on a system that actually is more responsive to them. 

Senator BENNET. My time is up. And with respect—and I do respect you a lot for your service in the House and the fact that you 

are a doctor—to believe what you just said, you would have to first 

reject the findings of the Congressional Budget Office that the 

House bill throws 23 million off insurance, that it creates 23 million more people who do not have insurance. You would have to believe that, and you would have to believe that, despite a 25-percent 

cut to Medicaid, which covers poor children, people in nursing 

homes, people who are already working and cannot afford insurance are somehow magically going to be able to buy health insurance under a system that no longer regulates the insurance industry. 

That is what we are being asked to believe. And I can tell you 

this, Mr. Secretary and Mr. Chairman—because the Republicans in 

the Senate have not yet taken up the bill, and I hope that we 

will—if you set out to design a bill less responsive to the critics of 

Obamacare in Colorado, to Republican critics of Obamacare, you 

could not write a bill less responsive than the House bill. 

So my hope is that—in the Senate you could not do it. My hope 

is that in the Senate, we will not do this in a partisan way, but 

we will come together as Democrats and Republicans and address 

the health-care system in a way that is actually believable to the 

people whom I represent. 

What you just have said is just not believable in any respect to 

people at home, and I am talking about Republicans, to say nothing 

of Democrats or Independents. 

The CHAIRMAN. Thank you, Senator. 

Senator Heller? 

Senator HELLER. Mr. Chairman, thank you. 

Secretary Price—— 

Secretary PRICE. Senator, how are you? 

Senator HELLER. Thanks for taking time and taking some of our 

questions. I want to talk a little bit about Nevada and the AHCA, 

obviously; that seems to be the topic of discussion here. 

36 

Our legislature just finished Monday. So as of 2 or 3 days ago, 

it adjourned for the next 2 years. One of the questions and comments that is being made is that if the AHCA in its current form, 

what came out of the House, were to pass, then it would put a 

$250-million annual hole in Nevada’s budget. 

And these numbers and indications, I am getting out of the Governor’s office also, from the State of Nevada. I would like your reflection on that. If it is $250 million a year, that is $500 million 

during a biennium, and we do not go back into session, obviously, 

for another couple of years. Their concern is that they will have to 

call a special session, obviously, in order to correct that kind of a 

budget offset. 

Do those figures sound accurate to you? 

Secretary PRICE. I do not think so, because—and again, the 

House bill does not, as I understand it, it does not anticipate any 

significant changes until 2019. So from a financing standpoint, 

2020 would be the time when the majority of changes would come 

into play. 

So we would be happy to review the genesis of those numbers 

and see whether or not they are accurate, and if so, how we can 

address that. 

Senator HELLER. Have you had an opportunity to do some research on Nevada? The reason I ask you this question is because 

we had a member of our delegation on the House who said that— 

he had a conversation with you and the Director of CMS. 

Between the two of you, you were able to convince him that these 

numbers, perhaps, are not as accurate or as dreadful as they come 

out of the Governor’s office. 

Secretary PRICE. That is correct. 

Senator HELLER. What kind of reflection did you have? Do you 

recall what kind of conversation you had? 

Secretary PRICE. Yes, in fact, I think that there was specific language that accommodated that concern. Which is why I say I do 

not believe that any changes would occur over the ensuing 2 years. 

But again, we would be happy to talk with you and work with you 

and the Governor and your State to see where they believe those 

numbers are coming from and determine their accuracy. 

Senator HELLER. What do you anticipate being the growth rate 

of health-care costs over the next 10 years? What have you calculated? 

Secretary PRICE. It depends what population you are talking 

about. The Medicaid population annual growth rate has been in the 

range of 2.6, 2.8 as I recall, annually. 

Senator HELLER. That is historic. What do you guys anticipate 

over the next 10 years? 

Secretary PRICE. I can get back to you on the specific amount. 

I think it is increasing a little bit, but I can get you the exact number. I do not have it on—— 

Senator HELLER. Are you working with leadership on our side as 

we go through the changes? I am going to guess that leadership on 

our side has had discussions with you, CMS, on some of the particular changes we are looking at. 

In other words, it is including growth rates. I do not know what 

the growth rate is going to be, if it is going to be CPI medical plus 

37 

one, as they did in the AHCA, whether it is just CPI medical, or 

inflation for that matter. 

Have you had any discussions? I am trying to find an answer to 

this question, and I cannot get it out of our meetings. I was just 

wondering if you had any insight as to what the rate may be that 

we are proposing over the next couple of weeks to send to CBO? 

Secretary PRICE. Well, as it relates to Medicaid, the proposal 

within the budget is the CPI medical plus one for those aged and 

disabled, CPI medical for the others. 

Senator HELLER. Do you still endorse that? 

Secretary PRICE. That is what is accommodated in the budget. 

Senator HELLER. If it was anything below that, would you support it? In other words, if they went to inflation rate, would you 

support that? 

Secretary PRICE. I think it depends what the entire program 

looks like. If we are accommodating anybody who would have challenges with that in a supplemental manner, if you will, then I 

would have to look at that. But what I support, and what I think 

is important, is to make certain that every single American has access to the coverage that they need. 

Senator HELLER. CPI plus one you said is for the disabled? 

Secretary PRICE. CPI medical plus one. 

Senator HELLER. For disability, and what was the other—— 

Secretary PRICE. Aged. 

Senator HELLER. Now if that were to change, just to CPI medical 

or just inflation, would you oppose that? 

Secretary PRICE. As I said, it depends what the entire program 

looks like. In isolation, I think that might be a challenge. 

But that does not address what the entire constellation of whatever the program is, because there are other ways to accommodate 

individuals who need financial assistance. And we are committed 

to making certain that that happens. 

Senator HELLER. Over the next 10 years, what is the rate increase overall then? What is the rate increase overall, over the next 

10 years? 

Secretary PRICE. We will get that to you. I do not have it on the 

tip of my tongue. 

Senator HELLER. If it is below that, would you have a problem 

with it? In other words, we figure it out, you tell me what it is, 

and if we have a proposal that is less than that, would you oppose 

it? 

Secretary PRICE. I think what is important in this conversation 

is to make certain that we accomplish the goals that we have set 

out, and that is to make certain that every single American has access to the coverage that they want. And when you have that as 

your goal, then it requires that you provide resources in an array 

of different ways to make certain that that is accomplished. 

Senator HELLER. I just want to make sure with medical inflation, 

as it increases over the next 10 years, that the funding mechanism 

we have is not below that, because if it is, then we do not meet 

your goals. 

Secretary PRICE. In insolation, I would agree. 

Senator HELLER. Okay. Thank you. 

Thank you, Mr. Chairman. 

38 

The CHAIRMAN. Your time is up. 

Senator Thune? 

Senator THUNE. Thank you, Mr. Chairman. 

Secretary Price, thanks for being here today. I appreciate the 

budget’s attention to the need to repeal and replace the collapsing 

Affordable Care Act, the need for medical liability reform, as well 

as the budget program’s integrity provisions. We have a number of 

important issues to tackle in the health-care space. So again, I 

thank you for your work. 

Secretary PRICE. Thank you. 

Senator THUNE. I want to—I discussed this with you at your confirmation hearing, but I have serious concerns, I think as you 

know, about the Indian Health Service. We continue to see significant problems even after two IHS facilities in South Dakota entered the systems improvement agreement with the Center for 

Medicare and Medicaid Services. 

CMS continues to find serious deficiencies at both facilities, with 

the Pine Ridge emergency department in immediate jeopardy status after a recent unannounced site visit from CMS. These systemic problems over the years are what prompted Senators Barrasso, Hoeven, and I to introduce the Restoring Accountability in 

the IHS Act. 

The bill will give IHS the flexibility to terminate poorly performing employees, streamline the hiring process so IHS can recruit talented medical professionals more quickly, and create incentives so those folks will stay on the job longer. 

My question is, will the Department commit to working with us 

on this legislation and other reforms to improve the quality of care 

at IHS? 

Secretary PRICE. Absolutely, Senator. I have been impressed with 

the commitment of individuals in IHS and the resources that we 

are trying to identify for new facilities, one of them—as you know, 

in South Dakota—to make sure that we are living up to our responsibility and the commitment that we have as a Nation in the 

IHS arena. 

Senator THUNE. We would love to give you more tools to create 

the kind of accountability we need, and I think our legislation accomplishes that, so we would look forward to working with you on 

that. 

Last year you and I both worked on legislation to address the application of Medicare competitive bidding rates and noncompetitively bid areas. Ultimately, the 21st Century Cures Act provided 

a temporary delay in this reimbursement change and required the 

Department to study and report to the committees of jurisdiction 

on how payment adjustments affect beneficiary access. And that 

was supposed to have been done by January 12th of this year. 

I am just wondering if you could provide an update on the status 

of that report for the committee? 

Secretary PRICE. Yes. I think it remains in process, and we have 

a significant commitment to make certain that the DME program 

is functional and works for folks all across this land, especially in 

the rural areas. 

Senator THUNE. And I guess I would say additionally, as you discuss regulatory relief—which I know is the priority for the adminisVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 R:\DOCS\30210.000 TIM
39 

tration, something that we very much agree with—what might the 

Department’s approach be for addressing these beneficiary access 

challenges that are posed by the current reimbursement structure? 

Is there something you could do in the interim that would help 

bring some relief? 

Secretary PRICE. Absolutely. You cannot have a system that 

awards—as you well know—contracts to entities that have never 

provided services in a geographic area. And that is the system that 

we currently have, one that awards contracts to servicers or providers that have never demonstrated the capability to provide that 

service. And sadly, that is the system that we have in place right 

now. 

So what we are looking at is the entire array of the DME system. 

And again, the goal is to make certain that all Americans, regardless of where they live, have access to the kind of services, whether 

it is hospital beds, whether it is wheelchairs, whether it is home 

oxygen, whatever it may be in the DME space—these are quality 

of life issues for so many, many people. From my perspective, we 

have failed to date in making certain that we ensure the kind of 

accessibility that folks need. 

Senator THUNE. Yes; thank you. 

And finally, during your confirmation hearing, we discussed 

CMS’s 2009 rule requiring that all outpatient therapeutic services 

be provided under direct supervision, which has been delayed annually since then for small and rural hospitals. You expressed an 

interest in working with me on a permanent extension of the nonenforcement of this policy. 

I am wondering if you have an update on where things stand 

from the Department’s perspective? I think the permanent nonenforcement is part of a bill that we have out there, and we have 

been trying—we can sort of kick the stone down the road each 

year, but I am hoping that we can get a permanent solution somewhere. Could you tell us where you see things from your department’s standpoint? 

Secretary PRICE. Senator, it is an area of significant interest, and 

I can tell you that it is a work in progress. 

Senator THUNE. All right. Well, we hope that we can get some 

permanent relief there, and we look forward to working with you 

and your team on that going forward. 

Thank you, Mr. Chairman. 

Secretary PRICE. Yes, sir. Thank you, Senator. 

The CHAIRMAN. Thank you, Senator Thune. 

Senator Stabenow has a question or two, and we will wrap this 

up. 

Senator STABENOW. Well, thank you, Mr. Chairman. First I want 

to thank you for your courtesies this morning in allowing us to 

have thorough opportunities to ask questions. 

And Secretary Price, again, thank you for being here. There are 

so many issues that I continue to have great concerns about, and 

certainly when we look at this budget that in practicality cuts Medicaid, nursing home services, children’s health care, rural health 

care, research on lifesaving drugs—I could go on and on. 

But one type of cut that I know we need is not in this budget, 

and that is a cut in the costs of prescription drugs. President 

40 

Trump repeatedly stated he wanted to drastically bring down prescription drug prices through Medicare negotiation, saying pharmaceutical companies were getting away with murder. 

I support Medicare negotiation. I have for a long time, and 90 

percent of Americans support that. But this budget does not include any major proposals to bring down the cost of prescription 

drugs, whether it is Medicare negotiating, safe importation of prescription drugs, transparency, or any other policy for that matter, 

even though the prices of the most popular drugs have increased 

by 208 percent—208 percent in the last 10 years. 

However, the House Republican health care plan, and I assume 

the Senate one, that is proposed does give drug companies a huge 

$25-billion tax cut paid for by the people who are seeing their prescription drug prices go up: middle-class families and seniors. 

Given that this budget is the major policy document from the administration, is it fair to say that lowering prescription drug prices 

is no longer a priority? 

Secretary PRICE. No, absolutely not, Senator. In fact, we have, at 

the Department—the President has made this an absolute priority 

and has charged us with making recommendations to his office on 

reducing drug prices. 

And over the past 6 weeks, 8 weeks, we have had a half-dozen 

to eight stakeholder meetings with all sorts of individuals. We have 

charged HRSA and FDA and CMS with coming up with specific 

proposals to make certain that we can provide the President with 

the most effective way to be able to reduce the increase in drug 

prices. 

So, no. It is an absolute priority, and we look forward to working 

with anybody who is interested in holding down or bringing down 

drug prices for the American people. 

Senator STABENOW. Should a family have to pay $700 for 

EpiPens for their child? 

Secretary PRICE. Well, regarding EpiPen, what has occurred in 

the past is that the ability for competition to hold down those 

prices, or to bring down those prices, was prevented by a previous 

decision through the previous administration. So we are looking, 

through the FDA, at exactly those kinds of things, because our goal 

is to make certain that the American people have access to the 

kind of medication that they need at a price that they can afford. 

Senator STABENOW. Which I wish was in this budget, because it 

is not in the budget at this point. But should someone who learns 

they have Hepatitis C have to pay $80,000 to get the drug they 

need to be cured? 

Secretary PRICE. Well, you are identifying a drug that is saving 

lives. 

Senator STABENOW. Eighty thousand dollars in order for someone 

to have the opportunity to save their life? 

Secretary PRICE. The question is, what is the right price for that 

drug? 

Senator STABENOW. Is that the right price? 

Secretary PRICE. There is a way to determine that price. And the 

question is, what is the right price for that, and how do we make 

certain that we incentivize innovation, and make it so that, in fact, 

41 

companies are able to identify these remarkable cures that are out 

there? 

I do not know what the right price is, but I know how you figure 

out what the right price is. 

Senator STABENOW. Okay. Well, I will be anxious to know what 

you think the right price is. 

If you have cystic fibrosis and need the latest drug to improve 

lung function, should you have to pay $300,000? 

Secretary PRICE. No. What I think we ought to be doing is celebrating the incredible invention and work that individuals are 

doing to save lives in the area of cystic fibrosis. 

Senator STABENOW. I celebrate that. It is difficult if someone cannot afford what is put forward on the market. So we certainly celebrate innovation. That innovation needs to be affordable so that 

people actually have access to treatment that can save their life. 

Secretary PRICE. I would agree. 

Senator STABENOW. Is it appropriate to give pharmaceutical companies a $25-billion tax cut in the health-care reform bill when 

there is nothing to bring down the cost of prescription drugs in that 

bill? 

Secretary PRICE. Well, regarding what is in that bill as it relates 

to drug pricing, I am not sure that—— 

Senator STABENOW. I am talking about the tax cut. Do you think 

it is appropriate to give a $25-billion tax cut to the pharmaceutical 

industry in a bill that is actually taking away health care from people and does nothing about lowering the cost of prescription drugs? 

Secretary PRICE. I do not know that that is what it does. What 

I am—what I do believe—— 

Senator STABENOW. I do know that is what it does. 

Secretary PRICE. Well, then you do. What I do believe is that it 

is imperative that we have a system in place that incentivizes innovation so that we can realize the remarkable, remarkable productivity and entrepreneurship and innovative spirit of the American 

scientists at NIH and elsewhere who are discovering these wonderful kinds of drugs to save lives. 

Senator STABENOW. Well, I totally agree with that. Do you think 

that the industry should be spending more on R&D today than 

they spend on advertising drugs to us? 

Secretary PRICE. I think that, again, the system needs to be such 

that it incentivizes innovation so that we can realize the benefit of 

wonderful inventions. 

Senator STABENOW. Okay. 

Well, just for the record, all those ads are written off, and we pay 

for them as taxpayers. I would love to be helping them write off 

much more on R&D. 

Mr. Chairman, as I close, let me just say for the record—we do 

not have to debate it today—but, Mr. Secretary, you have talked 

about a study, over and over again, about prices. And I just want 

for the record to say, this is a highly disputed study that you have 

been talking about that compares two different kinds of systems, 

does not include the tax credits that have substantially brought 

down out-of-pocket costs for real people. 

And so another day I look forward to debating with you what I 

believe and what I know, in Michigan, are very flawed numbers. 

42 

Thank you, Mr. Chairman. 

The CHAIRMAN. Well, thank you. 

Let me just say that I have been in this health-care business for 

41 years. And every year we demand more and more money, more 

and more spending, more and more Federal Government, more and 

more interference, more and more intrusion, and we wonder why 

it costs us so much. 

Now all I can say is, we have never had a better Secretary than 

you. 

Secretary PRICE. Thank you. 

The CHAIRMAN. Nor have we had anybody more patient in answering all of these questions. Now I want to thank you for participating the way you have. I especially want to thank you, Secretary 

Price, for attending today. I think we can all agree this is certainly 

not the most enjoyable activity that you could have participated in 

today. But it is nevertheless extremely important, and my colleagues have extremely important questions that they have asked. 

As I have said many times before, I would like to work with anyone, Republican or Democrat, who would like to resolve these important and pressing issues. Health care is no joke to any American, and to those with diminishing access, it means the world. 

So I look forward to hearing from each of you in the coming 

weeks, and I hope we can find ways to work together. 

Now for any of my colleagues who have written questions for the 

record, I ask that they submit them by June 15th—— 

Senator STABENOW. I am sorry. I do not mean to interrupt, but 

Senator Carper—— 

The CHAIRMAN. Oh, no, I am not going to—this is going to have 

to be it. I do not have any more time. 

Do you have to ask questions, Senator? 

Senator CARPER. I have only been waiting for 2 hours, Mr. Chairman. That is okay. 

The CHAIRMAN. Well, you used 10 minutes before—— 

Senator CARPER. Well, 9. 

The CHAIRMAN. Excuse me? 

Senator CARPER. Nine. [Laughter.] 

The CHAIRMAN. Well, you can—— 

Senator CARPER. He came in large part so he could answer one 

of my questions—it is not really a question. I just want to say one 

thing if I could. It will be very, very brief. 

The CHAIRMAN. Sure. 

Senator CARPER. Mr. Chairman, I mentioned earlier that my colleagues get tired, Dr. Price, of hearing me describe myself as a recovering Governor, but I am. And I have enjoyed as a Governor sitting right where you are sitting, past Governor, and trying to provide a Governor’s perspective on issues just like this one—just like 

this one. 

And one of the things we asked for—John Engler and I asked for 

for welfare reform—we said, give us the opportunity to have waivers. You guys pass the law, but give us the opportunity to apply 

for a waiver on what we are going to do on welfare reform. And 

that was granted. 

We asked for, when we did the Race to the Top, the education 

reform stuff in the last administration, we said, well, let us make 

43 

sure the States can apply for waivers to the Federal law. And we 

do. 

And as it turns out with Medicaid, if I am not mistaken, States 

can apply for waivers. I think almost every State, maybe every 

State, has at least one or more waivers with Medicaid. 

There are some cases in the law where you cannot get a waiver, 

States cannot get a waiver. I think we ought to have a good discussion with Governors about whether that makes sense or whether 

there should be some further broadening with respect to waivers. 

As Governor, I always liked to have some flexibility, find out 

what works best in my State and maybe well in others, maybe not. 

But I think that could be a helpful thing to do. 

The other thing I want to ask for—just a UC request, Mr. Chairman—I have something here from Blue Cross Blue Shield of North 

Carolina, ‘‘Premiums to rise in 2018 for Affordable Care Act.’’ They 

say it in quotes. I will say just one sentence. ‘‘The single biggest 

reason’’—this is Blue Cross Blue Shield, North Carolina—‘‘the single biggest reason for the sharp increase in rates is lack’’—again 

in the exchanges—‘‘of Federal funding for cost-sharing reductions 

beginning in 2018.’’ 

This is the program we have been talking about earlier. In the 

administration’s budget, to their credit, they fund cost sharing. The 

President keeps talking it back in his tweets and other things. He 

is opposed to it, does not want to do this, raising questions. It is 

the questions, it is the lack of certainty, predictability for the insurance companies that drives up the prices, and so let us just keep 

that in mind. 

The CHAIRMAN. Well, thank you, Senator. You always add a 

great deal of understanding to these issues, and I appreciate you 

doing that. 

Senator CARPER. In that case, could I have a couple more minutes, Mr. Chair? [Laughter.] 

The CHAIRMAN. No. I am going to kill you if you keep this up. 

[Laughter.] 

Senator CARPER. I would die happy. 

The CHAIRMAN. No; I think you are doing a great job. 

Mr. Secretary, you have been very patient, and I personally really admire you. I know you know this field very, very well. I know 

you know the problems. I know you know how difficult it is to solve 

these problems, and I know you know that there are no quick answers to some of these questions that have been asked. 

You have handled these very well today, and I just want to personally thank you. 

With that, we will adjourn this meeting. 

Secretary PRICE. Thank you, Mr. Chairman. 

Senator STABENOW. Thank you, Mr. Chairman. 

[Whereupon, at 12:06 p.m., the hearing was concluded.] 

(45) 

A P P E N D I X 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

LETTER SUBMITTED BY HON. CHUCK GRASSLEY, 

A U.S. SENATOR FROM IOWA

Congress of the United States 

Washington, DC 20515 

May 19, 2017 

The Honorable Seema Verma 

Administrator 

Centers for Medicare and Medicaid Services 

200 Independence Avenue, SW 

Washington, DC 20201 

RE: Rural Community Hospital, IPPS Proposed Rule (CMS–1677–P) 

Dear Administrator Verma: 

The Centers for Medicare and Medicaid Services (CMS) is conducting the Rural 

Community Hospital Demonstration Program (RCH), which was initiated by the 

Medicare Modernization Act of 2003 (MMA). The RCH was extended under the Affordable Care Act (ACA) and most recently under section 15003 of the 21st Century 

Cures Act. Congress directed CMS to create this program in response to the financial concerns of small rural hospitals. 

As you know, the goal of the program is to evaluate cost based reimbursement for 

small rural hospitals with fewer than 51 beds. Each year since 2004, CMS has reported on the progress of this program. Eligibility is based on States with the lowest 

population densities and currently includes: Alaska, Arizona, Arkansas, Colorado, 

Idaho, Iowa, Kansas, Maine, Minnesota, Mississippi, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, and Wyoming. 

Section 15003 of the 21st Century Cures Act extended the duration of this program 

by changing the language in the ACA from ‘‘5 years’’ to ‘‘10 years,’’ beginning on 

the date immediately following the last day of the initial 5-year period. Despite this 

language, CMS proposes to begin implementation of this extension on a hospital’s 

first cost reporting period beginning on or after October 1, 2017, following the announcement of the selection of additional hospitals to the RCH. This will result in 

a gap in the reasonable cost payment methodology paid to hospitals that previously 

participated in the program of up to 3 years. 

In the proposed rule, CMS recognized the problem this gap creates for previously 

participating hospitals and an alternative approach was proposed. In that proposal, 

previously participating hospitals would begin the second 5 years of the 10-year extension period and the cost-based payment methodology on the date immediately 

after the date the period of performance under the first 5-year extension period 

ended. For example, a hospital whose 5-year period of performance authorized by 

ACA ended June 30, 2016, the extension of the period under section 15003 of Pub. 

L. 114–255 would be effective July 1, 2016. In the proposed rule, CMS states ‘‘we 

believe that this alternative approach would be consistent with the language of section 410A of Pub. L. 108–173 (as amended) . . .’’ and we concur. We strongly encourage you to consider congressional intent as you finalize the rule. 

46 

The RCH program has been a lifeline for certain rural hospitals at risk of closure. 

Since 2010, more than 60 rural hospitals have closed nationwide. According to a report by iVantage Health, 673 more rural hospitals are at risk of closure. 

For one rural hospital in Iowa, the delay in implementation of the extension will 

result in a loss of $1.1 million dollars. A second rural hospital will lose nearly $5 

million. These rural hospitals operate on minimal margins and will not be able to 

keep the doors open if those losses continue. This will greatly impact the ability of 

Iowans to receive medical care in a timely manner. 

One of the regional hospitals in Juneau, Alaska faces nearly $5 million in projected 

losses due to delay. The hospital is located in a geographically isolated area and has 

limited ability to take advantage of economies of scale due to a small population 

base, making programs like RCH critical to the hospital’s success. The citizens that 

benefit from this hospital come from communities throughout Southeast Alaska by 

boat or plane and would be forced to travel even farther from home to receive care 

otherwise. 

This gap in implementation is inconsistent with congressional intent, which requires 

a seamless extension of this critical program. It is also inconsistent with the way 

the agency implemented the first 5-year extension of this program. Most importantly, however, this proposal would cause financial hardship for many of the hospitals that have been participating in the RCH. As a result, we are concerned these 

hospitals will be forced to reduce or eliminate the services they offer to their communities, thereby further threatening access to health-care services for individuals 

living in these rural communities. 

As the sponsors of the Rural Community Hospital Demonstration Extension Act of 

2015—the basis for section 15003 of the 21st Century Cures Act—we encourage you 

to address this issue expeditiously and provide certainty to the previously participating hospitals as well as the new enrollees. 

Sincerely, 

Charles E. Grassley Joni Ernst 

United States Senator United States Senator 

Lisa Murkowski Dan Sullivan 

United States Senator United States Senator 

Michael Bennet Don Young 

United States Senator Member of Congress 

David Young Dave Loebsack 

Member of Congress Member of Congress 

Rod Blum Steve King 

Member of Congress Member of Congress 

cc: Secretary Tom Price, Department of Health and Human Services 

PREPARED STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM UTAH

WASHINGTON—Senate Finance Committee Chairman Orrin Hatch (R–Utah) today 

delivered the following opening statement at a hearing examining the Trump administration’s fiscal year (FY) 2018 budget request for the Department of Health 

and Human Services (HHS): 

Welcome to this morning’s hearing on the President’s proposed budget for fiscal 

year 2018, with specific attention to the Department of Health and Human Services. 

I want to thank Secretary Price for being here. These hearings are an annual 

event for the Finance Committee. And, Secretary Price, since this is your first time 

around, I’ll just warn you that these hearings can be a little grueling. 

Of course, you already know that. 

I am grateful that the President and HHS are eager to work with Congress to 

fix our health-care system in order to ensure Americans are able to access affordable 

health coverage. And, as we know, time is of essence in regard to this effort. 

Earlier this week, we received word that Anthem is pulling out of Ohio’s 

Obamacare marketplace, potentially leaving more than 10,000 patients and consumers in 20 counties without any insurance options on Ohio’s exchange for 2018. 

47 

This news is particularly frightening as we expect to hear similar notices from Anthem as they reevaluate their participation in Obamacare exchanges throughout the 

United States. 

This recent story is just the latest in a long line failures, all of them demonstrating the need to move forward with repealing Obamacare and replacing it 

with a more workable approach, one that will take seriously the ballooning healthcare costs impacting every American family. 

Let me talk for a few minutes about the specifics of the President’s budget. 

The budget assumes $250 billion in total savings from the repeal and replacement 

of Obamacare. 

Despite some insinuations to the contrary, the budget does not incorporate the 

specific legislative proposal—the American Health Care Act—that is before Congress right now. 

Therefore, it is not accurate to associate the specific Medicaid savings the CBO 

has estimated from enactment of the AHCA with the President’s budget. To do so 

would assume a level of specificity that, for obvious reasons, is just not there. 

Moreover, the President’s budget does not cut $1.5 trillion from Medicaid. Nor 

does it assume that the specific Medicaid-reform proposals from the AHCA will be 

enacted into law. 

I’m quite certain we’ll hear a lot about that today. But any attempt to make that 

connection is simply unfounded. And any Senator who harps on the AHCA Medicaid 

numbers here today either does not understand the explicit language and estimates 

provided in the President’s budget, or they are simply attempting to muddy the 

waters in order to scare Americans who rely on Medicaid for health-care coverage. 

Ultimately, the President’s Budget appears to accept the reality that the Senate 

will need to come up with its own health-care reform proposal that includes a fundamental fix to Medicaid, which is, quite frankly, long overdue. 

In addition to the savings assumed from the repeal of Obamacare, the budget also 

explicitly assumes $610 billion in savings from putting Medicaid on a sustainable 

fiscal path by capping funding in FY 2020 through per capita caps or block grants 

at the States’ option. 

All told, most of the budget’s overall Medicaid savings would be achieved by returning the focus of Medicaid to serving those with the greatest needs—the elderly, 

the disabled, and needy mothers and children—and by giving States more flexibility 

to run their own Medicaid programs. 

Any Senator who would like to argue that the Federal Government should spend 

more Medicaid dollars to provide coverage for non-disabled, childless adults at the 

expense of disabled patients who remain on waiting lists should explain why. 

Furthermore, any Senator who would like to argue that the States are illequipped to handle their Medicaid programs should explain why that is the case 

given that the overwhelming consensus we’ve heard from governors nationwide over 

the last several years is that States want more independence and flexibility to tailor 

the Medicaid program. 

Washington needs to stop measuring the success of a Federal program by how 

much money it spends, or how many other programs are a part of it. Instead, Washington needs to focus on how well a Federal program helps those it is intended to 

serve and how efficient the program is at fulfilling its mandate. 

Long story short, we need to stop focusing on spending and pay more attention 

to outcomes. 

I think the President’s budget, while it is by no means flawless, largely recognizes 

this reality, and the President and the administration deserve credit for that. 

I look forward to having an open and frank discussion with Secretary Price about 

his thoughts on these and other matters. 

48 

PREPARED STATEMENT OF HON. THOMAS E. PRICE, M.D., SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES

INTRODUCTION

Chairman Hatch, Ranking Member Wyden, and members of the committee, thank 

you for inviting me to discuss the President’s budget for the Department of Health 

and Human Services (HHS) in fiscal year (FY) 2018. It is an honor to be here. 

Whenever a budget is released, the most common question asked in Washington 

is ‘‘how much?’’ How much money does the budget spend on this program, how 

much does it cut from that other program? 

As a former legislator, I understand the importance of this question. But too 

often, it’s treated as the only question worth asking about a budget—as if how much 

a program spends is more important than, or somehow indicative of, whether the 

program actually works. 

MEASURING SUCCESS, NOT SPENDING

President Trump’s budget request does not confuse government spending with 

government success. The President understands that setting a budget is about more 

than establishing topline spending levels. Done properly, the budgeting process is 

an exercise in reforming our Federal programs to make sure they actually work— 

so they do their job and use tax dollars wisely. 

The problem with many of our Federal programs is not that they are too expensive or too underfunded. The real problem is that they do not work—they fail the 

very people they are meant to help. In Aid to Families with Dependent Children, 

we had a program that undermined self-sufficiency and work. Congress did well 

when it realized the devastating long-term harm this program had on children, in 

particular, and took action by creating Temporary Assistance for Needy Families 

(TANF)—a program that promoted the empowerment of parents through work. By 

helping more Americans climb out of poverty, TANF caseloads have declined by 75 

percent through FY 2016. Under the TANF program, the employment of single 

mothers increased by 12 percent from 1996 through 2000, and even after the 2008 

recession, employment for this demographic is still higher than before welfare reform. In the wake of the recession, the emphasis on work in TANF has increased 

the job entry rate, retention rate, and earnings gain rate for program participants. 

Our budget reduces TANF spending in part because we understand that the 

amount spent in the program has not been the key to its success. Our goal is to 

continue and even expand on the progress made since enactment of Welfare Reform. 

Toward that end, we would welcome an opportunity to work with Congress to further strengthen TANF so that States, Territories, and Tribes can empower more 

low-income families to achieve financial independence. 

Fixing a broken government program requires a commitment to reform—redesigning its basic structure and refocusing taxpayer resources on innovative means 

to serve the people that the program is supposed to serve. And sometimes it requires recognition that the program is unnecessary because the need no longer exists or there are other programs that can better meet the needs of the people that 

the program was originally designed to serve. That’s exactly what President 

Trump’s budget will do, at HHS and across the Federal Government. 

Consider Medicaid, a critical safety net program that is the primary source of 

medical coverage for millions of low-income American families and seniors facing 

some of the most challenging health circumstances. 

If how much money the government spends on a program were truly a measure 

of success, Medicaid would be hailed as one of the most successful in history. Twenty years ago, annual government spending on Medicaid was less than $200 billion; 

within the next decade, that figure is estimated to top $1 trillion. 

Despite these significant investments, one-third of doctors in America do not accept new Medicaid patients. Some research has shown that enrolling in Medicaid 

does not necessarily lead to healthier outcomes for the newly eligible Medicaid population. The Oregon Health Insurance Study replicated a randomized clinical trial by 

enrolling some uninsured people in Medicaid through a lottery. Comparing this population to those who remained without coverage, the data showed an increase in 

emergency room use for primary care, the probability of a diagnosis of diabetes, and 

the use of diabetes medication, but no significant effects on measures of physical 

health such as blood pressure, cholesterol, or average glycated hemoglobin levels (a 

49 

diagnostic criterion for diabetes). However, the same Oregon data showed a significant reduction in rates of depression among those enrolled in Medicaid. 

This mixed impact of Medicaid coverage on health outcomes suggests we need 

structural reforms that equip States with the resources and flexibility they need to 

serve their unique Medicaid populations in a way that is as compassionate and as 

cost-effective as possible. 

SAVING AND STRENGTHENING MEDICAID THROUGH STATE INNOVATION

That’s exactly what the President proposes in his budget. Under current law, outdated, one-size-fits-all Federal rules prevent States from prioritizing Federal resources to their most vulnerable populations. States are also limited in testing new 

ideas that will improve access to care and health outcomes. The President’s budget 

will unleash State-level policymakers to advance reforms that are tailor-made to 

meet the unique needs of their citizens. 

Over the next decade, these reforms will save American taxpayers an estimated 

$610 billion. They will achieve these savings by harnessing the innovative capacity 

of America’s Governors and State legislators who, informed directly by the people 

and those providing the services, have a proven record of developing creative, effective ways to meet the health-care needs of friends and neighbors in need, while empowering them to manage their own health. 

Furthermore, the budget includes provisions to extend funding for the Children’s 

Health Insurance Program. The budget proposes to rebalance the Federal-State 

partnership through a series of reforms, including ending the Obamacare requirement for States to move certain children from CHIP into Medicaid and capping eligibility at 250 percent of the Federal Poverty Level to return the focus of CHIP to 

the most vulnerable and low-income children. 

These reforms will go a long way toward improving access to health care in America. But there is more work to be done. That’s why the President’s budget commits 

to working with Congress to transition from the failures of Obamacare to a patientcentered system that empowers individuals, families, and doctors to make healthcare decisions. 

HHS ADVANCES THE HEALTH SECURITY OF THE AMERICAN PEOPLE WITH A FOCUS ON

PREPAREDNESS AND RESPONSE FOR MEDICAL AND PUBLIC HEALTH EMERGENCIES

As everyone here knows, HHS’s mission of protecting and promoting the health 

of the American people involves far more than overseeing the Nation’s health-care 

and insurance systems. 

For generations, HHS has been the world’s leader in responding to and protecting 

against public health emergencies—from outbreaks of infectious disease to chemical, 

biological, radiological, and nuclear threats—and assisting the health-care sector to 

be prepared for cyber-threats. I recently had the privilege of seeing the importance 

of this work during an international trip to Africa and Europe. 

Visiting with Ebola survivors in Liberia and representing the United States at the 

G20 Health Ministerial Meeting in Berlin and then the World Health Assembly in 

Geneva reinforced just how vital a role HHS plays in preparing for, and responding 

to, domestic and global public health emergencies. To support HHS’s unique Federal 

role in public health emergency preparedness and response, the President’s budget 

provides $4.3 billion for disaster services coordination and response planning, biodefense and emerging infectious diseases research, and development and stockpiling 

of critical medical countermeasures. These investments help ensure that State and 

local governments have the support and resources they need to save lives, protect 

property, and restore essential services and infrastructure for affected communities. 

KEY PUBLIC HEALTH PRIORITIES: SERIOUS MENTAL ILLNESS, 

SUBSTANCE ABUSE, AND CHILDHOOD OBESITY

In addition, today America faces a new set of public health crises that—if we’re 

honest with ourselves—we have been far less successful in resolving. Those crises 

are: (1) serious mental illness; (2) substance abuse, particularly the opioid abuse epidemic; and (3) childhood obesity. 

As Secretary, I am committed to leading HHS to address each of these three challenges. The President’s budget calls for the investments and policy reforms that will 

enable us to do just that. 

50 

1 Center for Behavioral Health Statistics and Quality (2016). Key substance use and mental 

health indicators in the United States: Results from the 2015 National Survey on Drug Use and 

Health (HHS Publication No. SMA 16–4984, NSDUH Series H–51). Pg. 27, retrieved from 

http://www.samhsa.gov/data/. 2 Center for Behavioral Health Statistics and Quality (2016). Key substance use and mental 

health indicators in the United States: Results from the 2015 National Survey on Drug Use and 

Health (HHS Publication No. SMA 16–4984, NSDUH Series H–51). Pg 27, retrieved from 

http://www.samhsa.gov/data/. 3 Center for Behavioral Health Statistics and Quality (2016). Key substance use and mental 

health indicators in the United States: Results from the 2015 National Survey on Drug Use and 

Health (HHS Publication No. SMA 16–4984, NSDUH Series H–51). Retrieved from http:// 

www.samhsa.gov/data/. 4 Center for Behavioral Health Statistics and Quality (2016). Key substance use and mental 

health indicators in the United States: Results from the 2015 National Survey on Drug Use and 

Health (HHS Publication No. SMA 16–4984, NSDUH Series H–51). Pg 38, retrieved from 

http://www.samhsa.gov/data/. 5 Center for Behavioral Health Statistics and Quality (2016). Key substance use and mental 

health indicators in the United States: Results from the 2015 National Survey on Drug Use and 

Health (HHS Publication No. SMA 16–4984, NSDUH Series H–51). Page 40, retrieved from 

http://www.samhsa.gov/data/. 

The budget invests in high-priority mental health initiatives to deliver hope and 

healing to the 43.1 million adults with mental illness,1 including nearly 10 million 

Americans suffering from a serious mental illness,2 as well as the 19.6 million 

adults with both mental and substance use disorders,3 the 3.0 million adolescents 

who have experienced a major depressive episode,4 and 350,000 adolescents with 

both a major depressive episode and substance use disorders.5 These initiatives will 

target resources for psychiatric care, suicide prevention, homelessness prevention, 

and children’s mental health. For example, the budget proposes $5 million in new 

funding authorized by the 21st Century Cures Act for Assertive Community Treatment for Individuals with Serious Mental Illness. The budget also includes a demonstration within the Children’s Mental Health Services program to test the applicability of new research from the National Institute of Mental Health on preventing 

or delaying the first episode of psychosis. 

According to the Centers for Disease Control and Prevention (CDC), during 2015 

drug overdoses accounted for 52,404 U.S. deaths, including 33,091 (63.1 percent) 

that involved an opioid. To combat the opioid epidemic sweeping across our land, 

the budget calls for $811 million—an increase of $50 million above the FY 2017 continuing resolution—in support for the five-part strategy that has guided our Department’s efforts to fight this scourge: 

(1) Improving access to treatment, including Medication-Assisted Treatment, 

and recovery services; 

(2) Targeting availability and distribution of overdose-reversing drugs; 

(3) Strengthening our understanding of the epidemic through better public 

health data and reporting; 

(4) Providing support for cutting edge research on pain and addiction; and 

(5) Advancing better practices for pain management. 

This funding increase will expand grants to Health Resources Services Administration (HRSA) Health Centers targeting substance abuse treatment services from 

$94 million to $144 million. Also within this total, the budget continues to fully fund 

the $500 million for State Targeted Response to the Opioid Crisis Grants that were 

authorized in the 21st Century Cures Act, which expand access to treatment for 

opioid addiction. Using evidence-based interventions, these grants address the primary barriers preventing individuals from seeking and successfully completing 

treatment and achieving and sustaining recovery. 

Finally, the President’s budget invests in the health of the next generation by 

supporting services that promote healthy eating and physical activity, especially 

among the nearly 20 percent of school-aged children in America who are obese. The 

budget establishes the new $500-million America’s Health Block Grant, which will 

provide flexibility for States and Tribes to implement specific interventions that address leading causes of death and disability facing their specific populations. This 

could include interventions to spur improvements in physical activity and the nutrition of children and adolescents, and to treat leading causes of death such as heart 

disease. 

51 

1 ‘‘Benefits from Immunization During the Vaccines for Children Program Era—United States, 

1994–2013,’’ Centers for Disease Control and Prevention, Morbidity and Mortality Weekly Report, April 25, 2014/63(16);352–355. 

OTHER BUDGET HIGHLIGHTS

The President’s budget prioritizes women’s health programs through investing in 

research to improve health outcomes, maintaining support for women’s health services, empowering women and families, and emphasizing prevention. For instance, 

funding for the Maternal and Child Health Block Grant and Healthy Start is increased to improve the health of mothers, children, and adolescents, particularly 

those in low-income families. In addition, funding is maintained for a variety of vital 

programs serving women across HHS, including, community health centers, domestic violence programs, women’s cancer screenings and support, mother and infant 

programs, and the Office on Women’s Health. 

CONCLUSION

Members of the committee, thank you for the opportunity to testify today and for 

your continued support of the Department. It is an incredible privilege to serve the 

American people as the Secretary of Health and Human Services and support its 

mission to protect the health and well-being of all Americans. 

QUESTIONS SUBMITTED FOR THE RECORD TO HON. THOMAS E. PRICE, M.D. 

QUESTIONS SUBMITTED BY HON. CHUCK GRASSLEY

VACCINES

Question. In 2006, Iowa was the center of one of the largest mumps outbreak in 

the United States. 

This past December, another increase in the number of cases of mumps was reported in Iowa. 

Mumps is a highly contagious disease that is easily passed from one person to 

another. It can have serious consequences. The good news is that it is preventable 

with vaccination. 

Dr. Price, State and local authorities often depend on Federal dollars to ensure 

protection against preventable diseases. 

Will you work to prioritize funding for these programs? 

Answer. Vaccines are one of the greatest success stories in public health and are 

among the most cost-effective ways to prevent disease. For example, for each dollar 

invested in the U.S. childhood immunization program, there are over $10 of societal 

savings and $3 in direct medical savings. Moreover, childhood immunizations over 

the past 20 years have prevented 322 million illnesses, 732,000 deaths, and nearly 

$1.4 trillion in societal costs.1

The discretionary Immunization Program plays a fundamental role in achieving 

national immunization goals and sustaining high vaccination coverage rates to prevent death and disability from vaccine-preventable diseases. It is the backbone of 

our Nation’s public health immunization system that supports the science that informs our national immunization policy and programs; provides a safety net of vaccines for uninsured, poor adults and use in outbreak response; monitors the safety 

and effectiveness of vaccines; educates providers and the public about the benefits 

of vaccines and the diseases they prevent; and conducts surveillance, laboratory 

testing, and epidemiology to respond to disease outbreaks. 

The CDC Immunization Program provides funding to all 50 States, the District 

of Columbia, 5 major cities and 8 territories. Currently, 90 percent of immunization 

programs are entirely funded by Federal funds. At the funding level proposed in the 

FY 2018 President’s budget request, CDC will continue to provide vaccines and 

funding for immunization infrastructure to the 64 awardees, but at a reduced level. 

CDC will continue providing technical assistance and laboratory support to States 

and local communities responding to vaccine-preventable disease investigations, including outbreaks, but at a reduced level. 

52 

HEARING AIDS

Question. Dr. Price, as a physician you know that hearing loss is serious issue for the Medicare population. But hearing aids cost over $4,600 a pair on average and 

80 percent of the people that need them, don’t get them—mostly because of the expense. There is a market-based, regulation-reducing solution. Both the National 

Academies of Science and the President’s Council of Advisors on Science and Technology have recommended that FDA should allow hearing aids to be sold OTC for 

mild and moderate hearing loss, and FDA agrees. 

Senators Warren and I, along with Senators Isakson, Collins, and Hassan, have 

a bill that would direct FDA to do exactly that, S. 670. 

This legislation has the support of the Academy of Doctors of Audiology—experts 

in the recognition and treatment of hearing loss. The bill also has the support of 

AARP and the Hearing Loss Association of America. 

Bills don’t get much better than this! 

This is a common-sense solution to provide high-quality hearing aids to the 80 

percent of people who need one and don’t get one under the current system. 

So I want to commend the FDA and ask that you support their efforts. 

I have letters of support from the audiologists, AARP, and the Hearing Loss Association. 

Answer. Thank you for your leadership in considering the creation of a class of 

over-the-counter hearing aids. The under-treatment of hearing loss in the United 

States is a significant public health issue. The President recently signed the Food 

and Drug Reauthorization Act of 2017 which, thanks to your involvement, includes 

a section relating to the establishment of a category of over-the-counter hearing 

aids. The administration looks forward to the implementation of this section which 

has the potential to provide consumers with additional options in treating their 

hearing loss. 

QUESTION SUBMITTED BY HON. PATRICK J. TOOMEY

Question. Through legislation like the 21st Century Cures Act and recent appropriations bills, Congress has worked to strengthen our Nation’s investment in medical research at the National Institutes of Health (NIH). These investments have 

shown incredible results in the related fields of scientific study and in my own Commonwealth, where brilliant researchers like Dr. Carl June at the University of 

Pennsylvania have used that funding to spur breakthroughs in using immunotherapies to fight against cancer. Increased investments in the NIH also will play 

a key role in unlocking the secrets of Alzheimer’s disease, which already affects 5.5 

million Americans and has no cure, effective treatment, and is 100-percent fatal. 

Will you work with me to reduce spending in other areas, so that we can preserve 

and hopefully increase our country’s commitment to medical research? 

Answer. The Department is committed to medical research, including Alzheimer’s 

disease research. The Department will assess and allocate funding to ensure that 

HHS invests in activities that are core to its mission and not duplicative of other 

efforts across the Federal Government. 

QUESTION SUBMITTED BY HON. JOHN THUNE

Question. Recently, Veterans Affairs Secretary David Shulkin announced that the 

VA plans to adopt a new Electronic Health Record (EHR) system and move away 

from using its current Veterans Health Information System and Technology Architecture (VistA) program. While I applaud the VA’s efforts to improve its EHR system, I want to ensure work that has been done to improve IHS and VA coordination, 

particularly the sharing of medical records, is not undone during this transition. 

What steps can your Department take to ensure that changes to the VA EHR system doesn’t degrade IHS–VA coordination? Will IHS also migrate to the new VA 

EHR system? 

Answer. The move by the Department of Veterans Affairs (VA) will impact the 

Indian Health Service (IHS) as the IHS Electronic Health Record (EHR) system is 

dependent on the VA’s VistA system through shared software development. IHS 

53 

adopted software developed by the VA and adapted it for use in its EHR without 

having to expend funds on the development. 

IHS will continue to have technical support for Resource and Patient Management 

System (RPMS) as long as the VA continues to produce new software patches. However, the VA will begin shifting from development that adds functionality to software development that focuses narrowly on patches that address patient safety and 

readies the system for archive. 

Prior to the announcement by the VA, IHS formed a workgroup to examine our 

current EHR platform. The workgroup is comprised of a broad range of stakeholders 

who offer various viewpoints based upon their role and interaction with our systems. The workgroup is expected to make recommendations by fall 2017 regarding 

the future of our EHR system. As the transition continues to evolve, IHS and VA 

will maintain open lines of communication to maintain our strong collaborative relationship. 

QUESTION SUBMITTED BY HON. PAT ROBERTS

Question. The Protecting Access to Medicare Act of 2014 included a provision to 

reform the Medicare Clinical Laboratory Fee Schedule (CLFS) so that it becomes a 

‘‘market-based’’ fee schedule. While a market-based fee schedule should ultimately 

provide certainty for clinical laboratories and patients, my office has received reports that some labs found CMS guidance confusing and that most large hospital 

outreach laboratories were excluded from reporting, meaning that this segment of 

the laboratory community wouldn’t be included in setting the payment rates. Can 

your office provide this committee with a summary of how many laboratories reported private market rates under PAMA and, of those labs, how many were hospital labs versus physician office labs or independent laboratories? Further, can your 

office detail efforts to protect against data errors that may lead to flawed rates? 

Answer. CMS is committed to the successful implementation of the new private 

payer rate-based clinical laboratory fee schedule (CLFS) and looks forward to working with the laboratory industry to ensure accurate payment rates. On March 30, 

2017, CMS announced that it would exercise enforcement discretion until May 30, 

2017, with respect to the data reporting period for reporting applicable information 

under the CLFS and the application of the Secretary’s potential assessment of civil 

monetary penalties for failure to report applicable information. Since the enforcement discretion deadline of May 30th has now passed, CMS is currently performing 

a comprehensive analysis of the CLFS data. The administration will continue to review the operations of the program and look forward to feedback on how to improve 

the program. 

QUESTIONS SUBMITTED BY HON. DEAN HELLER

Question. Earlier this year when you came before this committee for your confirmation, I asked if I had your commitment to working with Congress and members 

of this committee to protect access to care for patients in Nevada, particularly the 

more than 600,000 Nevadans that are currently on Medicaid. Is this budget—which 

includes over $600 billion in cuts to Medicaid—a reflection of that commitment? 

Answer. The administration remains committed to the mission of the Department 

to protect the health and well-being of the American people—the elderly, children, 

pregnant women, and individuals with disabilities—and working with States to ensure they are able to make the most use of available resources to serve their citizens. As you know, Medicaid is the primary source of medical coverage for millions 

of low-income American families and seniors facing health challenges. However, its 

costs have been growing drastically without improvement in outcomes. The problem 

isn’t lack of funding; the problem is lack of flexibility. The FY 2018 budget puts 

Medicaid on a path to fiscal stability by restructuring Medicaid financing and reforming medical liability laws. 

Rigid and outdated Federal rules and requirements prevent States from pioneering delivery system reforms and from prioritizing Federal resources to their 

most vulnerable populations, which hurts access and health outcomes. The President’s budget will give States as much freedom as possible to design reforms that 

meet the spectrum of diverse needs of their Medicaid populations. 

54 

Question. To review, this budget proposes cutting Medicaid spending by $610 billion over 10 years—which is on top of the more than $800 billion in cuts called for 

under the House-passed American Health Care Act. These are staggering numbers, 

and for me, it’s a reminder of the more than 600,000 Nevadans, including the 

200,000 newly eligible under Medicaid expansion, who rely on this program to meet 

their health-care needs. Under this budget proposal, can Nevadans be assured that 

their access to care will be protected? 

Answer. The President’s FY18 budget does not incorporate specific legislation that 

was before Congress at the time of the hearing. Therefore, it is not accurate to apply 

the specific Medicaid savings the CBO has estimated for legislation before Congress 

to the President’s budget. To do so would assume a level of specificity that does not 

exist in the budget. The budget calls for refocusing Medicaid on the elderly, children, pregnant women, and individuals with disabilities. In fact, under the budget, 

Medicaid spending will continue to grow over the next decade. 

Question. In my home State of Nevada, there are 1.3 million people with 

employer-sponsored health care who will be impacted by Obamacare’s 40-percent excise tax on employee health benefits, also known as the Cadillac tax. In the January 

24th Finance hearing to consider your nomination, you committed to working with 

me to fully repeal the Cadillac tax, which I consider to be an unduly onerous tax. 

Is this still your commitment? 

Answer. Our budget calls for Congress to repeal and replace Obamacare, including the Cadillac tax. The administration looks forward to working with you to reform our health-care system. 

Question. As the Senate works to craft our own health-care legislation, there has 

been a lot of discussion on how to ensure Americans with pre-existing conditions 

will continue to have affordable coverage. As someone who hears from constituents 

on a daily basis on this issue, I am committed to ensuring Nevadans with preexisting conditions have the coverage they need. Since the House passage of the 

AHCA, this is a topic that you have addressed at length. Do you agree that individuals with pre-existing conditions should have access to affordable, high-quality insurance? Do you believe the House-passed AHCA achieves this goal? 

Answer. The President’s first principle of health reform is to ensure that no one 

will be denied insurance coverage for being sick. The House-passed AHCA explicitly 

prohibited insurers from denying coverage to individuals with pre-existing conditions. 

Question. The Children’s Health Insurance Program (CHIP) is up for reauthorization this year. This is a vital program that provides medical coverage and care to 

more than 23,000 children in my home State. I’m encouraged that the administration favors a renewal of CHIP and proposes to extend CHIP funding for 2 years. 

I’m hopeful that Congress will act to reauthorize this critical program. Will you commit to working with Congress to ensure that children who rely on CHIP will have 

access to high-quality, affordable health coverage? 

Answer. As you noted, CHIP funding will expire at the end of FY 2017, and without an extension of funding, children could lose health-care coverage. This proposal 

would extend CHIP funding for 2 years through FY 2019. The administration remains committed to working with Congress to provide budgetary stability and additional flexibility to States while focusing the program on lower-income families. 

QUESTIONS SUBMITTED BY HON. RON WYDEN

WOMEN’S HEALTH

Question. Under the Affordable Care Act (ACA), a record-number of women have 

gained access to health-care coverage and preventive care at no cost; maternity care 

was established as an essential health benefit (EHB); women were no longer discriminated against by health insurers for having a pre-existing condition, such as 

a previous Cesarean section or history of breast cancer; and health plans were not 

allowed to charge a woman more because of her gender. 

With the massive budget cuts proposed in the President’s budget, how will you 

lead HHS to continue the progress the ACA achieved for women’s health? 

Answer. (See answer provided below.) 

55 

Question. Medicaid funds nearly half of all births in the country. With the proposed cuts in the hundreds of billions to Medicaid, how will you assure the country’s 

most vulnerable women will have access to maternity care? 

Answer. The budget calls for refocusing Medicaid on the elderly, children, pregnant women, and individuals with disabilities. In fact, under the budget, Medicaid 

spending will continue to grow over the next decade. 

In addition, the budget increases funding for the Maternal and Child Health Block Grant by $30 million above the FY 2017 Continuing Resolution. The Maternal 

and Child Health Block Grant supports services to more than half of the pregnant 

women and nearly one-third of all infants and children in the country. The additional funding will support greater State investment to improve the health of all 

mothers, children, and adolescents, particularly those in low-income families. The 

FY 2018 budget also provides a $10 million increase above the FY 2017 Continuing 

Resolution for the Healthy Start Program, which connects individuals with services 

that can reduce infant mortality and improve perinatal outcomes, while allowing 

grantees to tailor services according to community need. 

Question. According to a leaked draft of an HHS rule which you confirmed was 

proposed during the hearing, employers and insurers who have a religious or moral 

objection to providing birth control and related services would not be required to 

offer contraception to their employees or enrollees. This turns back the provision in 

the ACA that offers preventative benefits, including contraception, at no cost. What 

is the status of this leaked rule? Will you abide by procedures under the Administrative Procedure Act (APA) to solicit public comment before finalizing the rule? 

How will you consider the religious liberty of women who are seeking contraception 

when drafting this rule? 

Answer. The administration is not at liberty to discuss the details of pending regulations. 

Question. If enacted into law, the House-passed AHCA would defund Planned Parenthood health clinics of all Federal funding sources. The law injects funding into 

Community Health Centers (CHCs) as a substitute for Planned Parenthood health 

clinics. However, experts have repeatedly reported that CHCs do not have the capacity to absorb 2.4 million Planned Parenthood patients. Additionally, the President’s budget includes a rider to prohibit Planned Parenthood from participating in 

Federal programs. If Planned Parenthood is defunded, how will you assure access 

to health care for the women in the 21 percent of America’s counties that rely on 

a Planned Parenthood health center as a safety-net family planning provider? If 

CHCs are unable to absorb patients from Planned Parenthood health centers, what 

steps will you take to assure the 6 in 10 women who rely on these centers as their 

main source of health care that they will have access to primary care? 

Answer. The mission of the U.S. Department of Health and Human Services 

(HHS) is to protect the health and well-being of all Americans. The administration 

takes our mission seriously, and will work to support access to quality, affordable 

health care for all Americans. Health Centers have delivered affordable, accessible, 

quality primary health care to patients regardless of their ability to pay for more 

than 50 years. In 2015, Health Centers served 16.8 million female patients ages 15– 

65, of 24.3 million that they served. 

SHORT-TERM PLANS

Question. Recently, 14 Republican Senators sent you a letter asking the Trump 

administration to reverse a regulation (Excepted Benefits; Lifetime and Annual 

Limits; and Short-Term, Limited-Duration Insurance, 81 FR 75316) on the term of 

coverage for short-term, limited-duration health insurance plans. This regulation 

was initially promulgated to protect consumers from misconceptions about how limited short-term coverage can be and to align the duration of short-term policies with 

individual responsibility payment requirements, helping consumers make informed 

choices about their health coverage. The regulation effectively limits short-term coverage to 3 months and requires insurers to warn consumers that short-term coverage does not satisfy the individual responsibility to have adequate health coverage. You have previously stated that you do not want people with a pre-existing 

illness or injury not to be covered, but short-term plans don’t abide by the same consumer protections as Qualified Health Plans under the Affordable Care Act. 

How do you plan to respond to the Republican Senators’ letter on short-term 

plans? Do you support expanding the use of short-term plans or making any 

changes to the regulation? 

56 

If you plan to expand the use of short-term plans, do you retract your comments 

about protecting those with pre-existing conditions when allowing for the expansion 

of this type of coverage that doesn’t offer essential consumer protections to those 

with pre-existing conditions? 

How will you protect consumers from purchasing short-term coverage without 

knowing the risks? 

Answer. The administration remains committed to relieve Americans from Obamacare’s burdensome regulations and mandates. The administration is evaluating 

policy options to restore choice and competition to the individual and small group 

markets, while increasing availability of health insurance options so that all Americans can purchase coverage that meets their needs while continuing to protect individuals with pre-existing conditions. 

MEDICARE SEQUESTER

Question. During the campaign, President Trump promised: ‘‘I’m not going to cut 

Social Security like every other Republican and I’m not going to cut Medicare or 

Medicaid.’’ He also tweeted: ‘‘I was the first and only potential GOP candidate to 

State there will be no cuts to Social Security, Medicare, and Medicaid. Huckabee 

copied me.’’ 

On page 50, the HHS FY18 budget in Brief states that ‘‘[t]he budget does not include any direct Medicare cuts.’’ However, in fact, the President’s FY18 budget proposes to extend the sequester on mandatory spending—including Medicare—for an 

additional 2 years through 2027. 

At the hearing, Senator Cantwell asked you whether the President’s budget includes ‘‘a 2-year extension of mandatory sequestration, which would impose a 2 percent cut on Medicare providers.’’ In response to her question, you stated that the 

President’s budget reflects only the ‘‘continuation of current law.’’ 

Isn’t it true that—under current law—the sequester on mandatory spending ends 

in 2025? 

Isn’t it also true that the President’s FY18 budget proposes extending the sequester on mandatory spending for an additional 2 years (through 2027)? 

How do you reconcile those facts with your response to Senator Cantwell that the 

President’s budget reflects only the ‘‘continuation of current law’’—when, in fact, the 

President’s budget includes a 2-year extension that does not exist under current 

law? 

In total, how much would payments to Medicare providers, suppliers, and plans 

be cut as a result of the President’s proposal? 

Answer. The President’s budget reflects current law. In addition, the budget proposes to continue current law by extending sequestration by 2 years. This is not a 

cut to what Medicare currently pays to providers and does not change benefits or 

prices charged to beneficiaries generally. 

VALUE OF MEDICAID

Question. You have previously stated that Medicaid costs are growing without improvements in health outcomes. However, studies indicate that Medicaid has increased access to health services, including preventative care among formerly uninsured adults, a critical step to achieving improved health outcomes in the long run. 

For example, in a literature review, the Kaiser Family Foundation reported in 

April 2016 that Medicaid helps to improve access to health services, boost utilization 

of preventive health services, and reduce cost-sharing among beneficiaries. Several 

studies confirmed that Medicaid enrollees were able to access health services comparable to those offered under employer-based insurance, and that these services 

were accessed at a significantly lower per-person cost. For example, a 2013 study 

published by Teresa Coughlin et al., at the Urban Institute reported that Medicaid 

beneficiaries’ health-care costs would be over 25 percent higher if they used employer-sponsor insurance. This was true even while Medicaid beneficiaries had similar access to and use of services like inpatient care, prescription drugs, and primary 

care doctors when compared with employer-insured individuals. Coughlin et al., also 

noted that out-of-pocket spending would increase threefold for Medicaid beneficiaries if they switched to private insurance, rising from $257 to $784 on average 

per year. This may in part be due to the fact that per capita spending for Medicaid 

enrollees has remained stable over time, as reported by John Inglehard and BenVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00060 Fmt 6601 Sfmt 6621 R:\DOCS\30210.000 TIM
57 

jamin Sommers in a 2015 New England Journal of Medicine study. The authors 

noted that Medicaid spending growth was driven primarily by increased enrollment 

in the program, and that per capita Medicaid spending stayed flat between 1998 

and 2014 when adjusted for inflation. 

Do you agree that increasing access to primary care and preventative services has 

the capacity to save costs to the health-care system and improve health outcomes 

for beneficiaries over time? If so, would you agree that Medicaid has the capacity 

to protect and improve the health outcomes of covered individuals? 

Proposed cuts to Medicaid under the AHCA would compromise individuals’ access 

to preventative and primary care services, especially for the 14 million low-income 

Medicaid beneficiaries who will be left uninsured and without access to affordable, 

comprehensive coverage. How will you use your capacity as the Secretary of Health 

and Human Services to provide these individuals with affordable coverage to access 

these services should the Medicaid expansion be repealed? 

If individuals are unable to access primary and preventative care, we could see 

an increase in the utilization of emergency departments to address medical conditions. How do you plan to allocate resources to compensate for the potential rise in 

costs associated with these emergency services? 

Answer. The FY 2018 budget calls for refocusing Medicaid on the elderly, children, pregnant women, and individuals with disabilities. The administration’s goal 

is to ensure that all Americans have access to affordable coverage that best meets 

the needs of themselves and their families so that they can receive preventive care 

from the doctor of their choice in a primary care setting. The Department looks forward to collaborating with States to explore ways to support further adoption of 

Medicaid Direct Primary Care (DPC), which provides an enhanced focus on direct 

physician-patient relationships through enrolling Medicaid patients in DPC practices. Existing DPC practices enhance physicians’ focus on patient care by simplifying healthcare payments for patients and doctors. DPC arrangements also often 

include benefits such as extended visits and electronic communication, which allow 

for improved patient access to primary care services. 

IMPLICATIONS OF DIRECT PRIMARY CARE INITIATIVE

Question. In its FY 2018 budget, the administration proposed a Medicaid Direct 

Primary Care Initiative to encourage State Medicaid programs to use Direct Primary Care practices. Under this model, a set price is paid to providers in exchange 

for improved access to primary care services. Some State Medicaid programs are 

currently experimenting with this model of primary care payment. 

Over 75 percent of Medicaid beneficiaries are enrolled in private plans that manage their care. Since so many Medicaid beneficiaries are enrolled in managed care, 

how would consumers enrolled in Medicaid managed care plans participate in the 

Direct Primary Care Initiative? Would there be a pathway to participation for Medicaid managed care plans? 

The Centers for Medicare and Medicaid Services (CMS) recently approved several 

Medicaid waivers testing new delivery system reforms that rely on provider-led organizations, such as in Alabama and New Hampshire. How would these new delivery models and organizations be affected by the Direct Primary Care Initiative? 

Would Medicaid beneficiaries have cost sharing obligations under the Initiative? 

If so, how would they be implemented? 

How does CMS plan to support States in these initiatives? It does not appear any 

new Federal support is made available under the proposal in the President’s budget 

for such initiatives. Lack of Federal support coupled with hundreds of billions of dollars in cuts to Medicaid under the President’s budget would hugely hamper States’ 

ability to implement new innovative models of care delivery. 

Answer. The Department looks forward to collaborating with States to explore 

ways to support further adoption of Medicaid Direct Primary Care (DPC), which 

provides an enhanced focus on direct physician-patient relationships through enrolling Medicaid patients in DPC practices. Such practices enhance physicians’ focus on 

patient care by simplifying healthcare payments for patients and physicians. DPC 

arrangements also often include benefits such as extended visits and electronic communication, which allows for improved patient access to primary care services. 

Working with States and primary care physicians, HHS will support the development of DPC practices, identify barriers to their entry into Medicaid, and outline 

flexibilities under existing authorities to facilitate these innovative approaches to 

58 

strengthening the relationships between patients and physicians. As the Department partners with States to advance this initiative, we look forward to gathering 

feedback about how this initiative will interact with the existing Medicaid program 

and State-based waivers and programs. 

CMS PRIORITIES

Question. In addition to the President’s proposals to cut Medicaid and the Chil- dren’s Health Insurance Program (CHIP) by over $600 billion, the President’s FY 

2018 budget includes a 10-percent cut to the budget of the agency running those 

programs and Medicare. 

How will proposed cuts to discretionary administration spending be distributed 

across CMS? How was this distribution determined? 

What staff positions will be eliminated as a result of these proposed cuts to discretionary administration spending? How would the loss of these positions impact the 

programs they support? 

How would the proposed cuts impact CMS programs’ ability to meet their statutory objectives? 

How would CMS ensure its programs would be able to continue to meet the needs 

of their current beneficiaries? 

How would the administration measure the impact of the proposed cuts on vulnerable populations, including older Americans and people with disabilities? 

Answer. The FY 2018 discretionary budget request for CMS Program Manage- ment is about $3.6 billion, a decrease of $379 million below the FY 2017 Annualized 

Continuing Resolution level. This request will enable CMS to continue to effectively 

administer Medicare, Medicaid, and the Children’s Health Insurance Program 

(CHIP). The FY 2018 budget reflects CMS’s key priorities to: reduce costs through 

contract efficiencies; prioritize customer service; invest in program integrity; and 

strengthen the Federal workforce. Additionally, for FY 2018, the budget requests 

$723 million for CMS Federal administrative costs, $10 million below the FY 2017 

Annualized Continuing Resolution level. Of this total, $651 million will support a 

direct full-time equivalent level of 4,370, a decrease of 155 full-time equivalents 

below the FY 2017 Annualized Continuing Resolution level. With this level of staff, 

CMS will be able to effectively and efficiently support operations, successfully carry 

out the Secretary’s priorities, and focus on improving CMS’s traditional programs. 

The reduction in workforce will occur through natural attrition across CMS. 

TESTIMONY CONCERNING PREMIUM HIKES

Question. During the June 8, 2017 hearing on the President’s Fiscal Year 2018 

budget, you cited statistics to demonstrate evidence of increasing health insurance 

premiums. For example, in one instance during an exchange with Senator McCaskill, you stated that premiums in Missouri had increased by 145 percent between 

2013 and 2017. 

These statistics appear to have been drawn from a May 23, 2017 report released 

by the Assistant Secretary for Planning and Evaluation (ASPE), which sought to 

measure the Affordable Care Act’s (ACA’s) impact by comparing Medical Loss Ratio 

data from 2013 and CMS Multidimensional Information and Data Analytics System 

data from HealthCare.gov in 2017. However, since its release, this report has been 

criticized by health-care experts for its methodology and misleading conclusions. 

Fundamentally, the comparison of premiums between 2013 and 2017 is inappropriate, as the ACA’s reforms and affordability programs did not go into effect until 

2014. This means that individual plans in 2013 are simply not comparable to those 

in 2017. In 2013, many plans failed to cover critical health services now included 

as Essential Health Benefits, including maternity care and mental health services. 

Moreover, before the ACA’s consumer protections were in place, plans were permitted to exclude individuals with preexisting conditions. Finally, ASPE failed to 

take into account the use of subsidies in the ACA Health Insurance Marketplaces, 

which significantly lowers the actual cost of plans for individuals purchasing coverage through the Marketplaces. In fact, an earlier ASPE report released on October 

24, 2016 stated that 8 in 10 Marketplace enrollees can obtain insurance for $100 

a month or less after subsidies are applied. 

Do you agree that by failing to take into account subsidies offered to individuals 

on the marketplace, the May 23, 2017 ASPE report does not accurately describe the 

average amount paid by consumers to acquire insurance on the individual market? 

59 

Do you agree that plans in 2013 are not comparable to those offered to individuals 

in 2017 for individuals due to substantial protections for consumers and more comprehensive coverage? 

Do you agree that the American people have a right to sufficient and unbiased 

information to help them make apples-to-apples comparisons? If so, do you believe 

that the administration has a duty to provide it? 

Answer. Obamacare is a disaster, delivering high costs, few options, and broken 

promises. Americans across the country have seen their health insurance choices 

disappear and premiums spiral out of control, increasing by double and triple digits. 

This administration is committed to empowering consumers with providing more 

choices and access to the health care they want and deserve. 

CSRS AND RISING PREMIUMS

Question. Since April, insurers in California, Colorado, Connecticut, Iowa, Maryland, New Hampshire, New Mexico, North Carolina, Pennsylvania, and Washington 

have expressed serious concerns about uncertainty in the private insurance market 

caused by the administration’s actions and rhetoric. 

The specific actions from the administration include: 

• A January 20th executive order to delay or halt the implementation of the 

ACA, which could undermine enforcement of the individual mandate; • The administration’s decision in January to stop advertising for open enrollment and to slash the budget for marketing and outreach by 20 percent for 

FY 2018; • Threats directly from the President to let the marketplaces ‘‘explode’’; • And repeated warnings from the administration to buck the cost-sharing reduction payments (CSRs) owed to insurers who cover low- and moderateincome Americans enrolled in marketplace plans. 

This last point is particularly urgent. Under the CSR program, insurers subsidize 

plans for individuals earning up to 250 percent of the Federal Poverty Level (FPL) 

to reduce their deductibles and out-of-pocket expenses. Insurers report to HHS on 

how many enrollees they have provided CSRs, and then the Treasury Department 

reimburses insurers for these payments. More than 6.4 million individuals were enrolled in a CSR-eligible plan last year. Though the Trump administration has continued to reimburse insurers each month since taking office, the administration now 

refuses to state whether it will honor its financial commitment to insurers. 

Without this clarity, insurers have been unsure how to price premiums for the 

future, causing instability in the health-care market and driving up premiums 

across the country. Uncertainty surrounding CSR funding has also threatened the 

continued participation of insurers in the marketplace. In early June, Anthem withdrew from 20 counties in Ohio, citing these uncertain CSR payments as a key reason for its departure. 

In your testimony before the Senate Finance Committee on June 8, 2017, you repeatedly made reference to rising premiums under the ACA. Do you agree, however, 

that the administration’s refusal to honor these CSR payments has contributed to 

uncertainty in the marketplace and contributed to insurers’ decisions to raise their 

premiums for 2018? Has HHS done any internal analysis to estimate the cost of this 

uncertainty to the taxpayers? 

The Kaiser Family Foundation has reported that a refusal to pay these subsidies 

could end up costing the Federal Government $2.3 billion in added premium tax 

credits. Is refusing to reimburse insurers for the CSR program fiscally responsible 

for the Federal Government? 

Have rising premiums and insurers exiting the marketplace due to the administration’s decision to withhold CSR payments already jeopardized the ability of 

Americans to continue accessing affordable coverage? 

The President’s budget assumed $6.3 billion to continue funding CSRs. Do you 

agree with the President’s budget that the Federal Government should honor its financial commitment to reimburse CSRs made by insurers? Will you commit to ensuring CSRs are paid in full by the Federal Government to insurers? 

Answer. The administration has emphasized the importance of reforming our 

health-care system to one that works better for patients and their providers, and 

The administration’s budget calls for Congress to repeal and replace the Affordable 

Care Act. In the interim, we are evaluating policy options to relieve Americans from 

60 

Obamacare’s burdensome mandates and to restore choice and competition to the individual and small group markets, increasing availability of health insurance options so that all Americans can purchase coverage that meets their needs. 

Question. Rising premiums and the exit of insurers could have particularly dire 

consequences for patients residing in bare counties where no insurers are offering 

Marketplace plans. Do you agree that facilitating the ability of insurers to offer 

Marketplace plans in these counties would help patients better afford their medical 

care? Do you agree that facilitating the ability of insurers to offer these plans is a 

responsibility of HHS? 

Do you commit to encouraging insurers to offer plans to patients residing in bare 

counties? How do you plan to fulfill this commitment? 

Answer. Obamacare is a disaster, delivering high costs, few options, and broken 

promises. Americans across the country have seen their health insurance choices 

disappear. The administration is committed to empowering consumers with providing more choices and access to the healthcare they want and deserve. 

The administration recognizes that States are the primary regulators of health insurance, and it remains imperative for the executive branch to empower States with 

more flexibility and control. Among other regulatory actions and guidance documents, the Department also finalized a Market Stability Rule in April, which tightened special enrollment periods, made it more difficult for enrollees to skip premium 

payments, adjusted the open enrollment period to align with other healthcare markets, lifted one-size-fits-all requirements regarding network access, and widened the 

actuarial value bands within which insurers can offer plans to patients. 

MYLAN TAXPAYER RECOVERY (EPIPENS)

Question. The FY 2018 request increases funding for program integrity initiatives. 

Ensuring providers properly report relevant information and pay rebates to Medicaid under the Medicaid drug rebate program has been the topic of renewed focus 

following revelations that Mylan overcharged the American public by $1.27 billion 

by classifying EpiPen as a generic drug instead of a name-brand product. According 

to the Centers for Medicare and Medicaid Services (CMS), CMS informed Mylan 

they were misclassifying EpiPen several times, but Mylan failed to correct the classification of the product. In October, Mylan reported that it had reached an agreement in principle with the United States to pay $465 million. To date, the settlement has not be finalized. 

What are the specific activities that the U.S. Department of Health and Human 

Services (HHS) will employ to recover the remaining lost taxpayer money that the 

HHS Office of Inspector General (OIG) identified? Will HHS push for any further 

action against Mylan? 

Why was Mylan able to continue misclassifying the status of the EpiPen for purposes of the Medicaid drug rebate program and continue to pay a lower rebate based 

on that misclassification after they were made aware of the error? 

What additional provisions are being put in place to help prevent similar future 

errors? 

Mylan has also recently drawn public attention for price gouging its EpiPen product, raising the price six fold since 2007. What efforts will the administration make 

to protect Americans from similar price gouging on life-saving medications and help 

contain the costs of drug coverage? 

Answer. The U.S. Department of Health and Human Services (HHS) is actively 

reviewing the findings of the Office of the Inspector General and have also been in 

discussion with Members of Congress regarding their concerns over the EpiPen 

price. As you are aware, the public disclosure of any discussions on potential 

recoupment of funds or future decisions on classification could impact our ongoing 

efforts to evaluate the program. Please contact the Office of the Assistant Secretary 

for Legislation so that they can schedule a briefing to candidly inform you of our 

ongoing activities. 

MEDICAID AND COVERAGE FOR INDIVIDUALS WITH DISABILITIES

Question. For millions of Americans with disabilities, Medicaid is a critical program that allows them to access the services and care they need. Nationally, people 

with disabilities make up roughly 15 percent of all Medicaid enrollees but account 

for approximately 40 percent of all Medicaid spending. 

61 

On June 6, 2017, NPR gave a face to these individuals with a profile on Mr. Evan 

Nodvin, a Medicaid beneficiary living in Georgia with Down syndrome. Mr. Nodvin, 

who works at a local fitness community center, credits his independence to the 

State’s Medicaid program. 

For Mr. Nodvin and many families across the Nation like his, the proposed cuts 

to Medicaid spending contemplated in the FY 2018 budget—$627-billion-plus in additional cuts to Medicaid—have caused serious concern as to what their future care 

will look like. Moreover, the proposed restructuring of Medicaid in the American 

Health Care Act would lead to $834 billion in cuts to Medicaid and an effective cap 

on care for individuals with disabilities. 

Will you commit to ensuring that individuals with disabilities are able to access 

the services and care they need to maintain the highest level of independence possible? How do you intend to fulfill this commitment in light of these proposed reductions to Medicaid spending? 

Do you anticipate the creation of additional Federal programs or requirements to 

protect these individuals’ access to health services? 

If additional flexibility is granted to States in administering their Medicaid programs, how do you plan to maintain requirements to ensure adequate access to 

needed programs or services for people with disabilities? 

Answer. The administration remains committed to the mission of the department, 

to protect the health and well-being of the American people—this includes individuals with disabilities. The budget recognizes that States understand the unique 

needs of their citizens far better than Washington, and we intend to provide States 

with maximum flexibility to ensure that Medicaid prioritizes the most vulnerable 

Americans. 

PRESCRIPTION DRUG PRICES

Question. As the Secretary of the U.S. Department of Health and Human Services 

(HHS), you have broad power, independent of Congress, to impact the cost of prescription drugs. The agency is able, for example, to initiate rulemaking regarding 

payment for physician-administered drugs, while the Centers for Medicare and Medicaid Services has broad authority to test new payment models for prescription 

drugs. 

On January 18, 2017, in a hearing before our colleagues at the Senate Committee 

on Health, Education, Labor and Pensions, you committed to working with Congress 

to ‘‘make sure drug pricing is reasonable.’’ However, the President’s FY 2018 budget 

proposed no policies to stop the rise of prescription drug prices. 

If the President is committed to lowering drug prices, why are there no proposals 

(even proposals he claimed to support on the campaign trail) included in the President’s budget aimed at lowering drug prices? 

In responding to a question by Senator Stabenow, you stated the Department of 

HHS has held approximately 6–8 stakeholder meetings to discuss the issue of drug 

pricing. Could you please provide the individuals and organizations who attended 

those meetings? 

Also during that exchange with Senator Stabenow, the price of the Hepatitis C 

drug Sovaldi was discussed. In discussing whether or not Gilead’s price is acceptable, you stated, ‘‘I don’t know what the right price is but I do know how to figure 

out what the right price is.’’ Can you please provide the committee with how you 

would ‘‘figure out the right price’’ of Sovaldi and other high-cost prescription drugs 

coming on to market in the near future? 

Answer. High drug prices and costs are an issue of major concern for HHS and 

for the American people. This includes the millions of seniors who rely on Medicare 

for their drug coverage, and the taxpayers who have to foot the bill for government 

spending on this program. As you know, the President has made prescription drug 

prices an absolute priority and has charged the U.S. Department of Health and 

Human Services (HHS) with making recommendations to his office on reducing drug 

prices. HHS has been meeting with stakeholder groups from across the health-care 

spectrum over the past several months in order to understand where there are areas 

of consensus. 

It is important that we move forward quickly, but also carefully, so that our policies do not have unintended consequences. We need to balance the goal of ensuring 

62 

affordability and access with the mandate to continue supporting development of 

lifesaving innovations. 

CHIP FUNDING EXTENSION

Question. In FY 2016, the Children’s Health Insurance Program (CHIP) covered 

nearly 9 million children in families who earn too much to qualify for Medicaid but 

still lack access to affordable private coverage. While this successful, bipartisan program is permanently authorized, funding is set to expire later this year. Secretary 

Price, during your nomination hearing you called for an 8-year extension of Federal 

funding for the Children’s Health Insurance Program (CHIP). This multi-year extension is in line with other calls to renew the program for multiple years by the National Governor’s Association, the Bipartisan Policy Center, and the independent 

Medicaid and CHIP Payment and Access Commission (MACPAC) in order to provide 

much deserved certainty to States and families. However, President Trump’s budget 

proposes to extend Federal CHIP funding by only two additional years with additional cuts to the program including a cap on coverage for currently enrolled children in working families. 

Do you still support an 8-year extension of CHIP funding? 

Did you advise the President on his CHIP policy proposals? If so, what factors led 

the administration to decide that a 2-year extension was sufficient. 

The President’s budget also includes a 20 percent cut in Federal support to States 

for CHIP. How does the administration plan for States to continue being able to provide valuable coverage to families in need despite these cuts? 

Children make up nearly half of those enrolled Medicaid. With billions of dollars 

in proposed cuts to the Medicaid program and a 20 percent cut to Federal CHIP 

funding, how will you assure America’s children continue to have access to affordable, comprehensive health care that meets their child-specific needs? 

Answer. The CHIP program needs to be looked at and extended. The budget proposes to extend funding for CHIP for two additional years through FY 2019. Extending CHIP funding for 2 years provides stability to States and families while the future of the program is addressed alongside other health reforms. This funding guarantees that the most vulnerable children will continue to have coverage. 

The budget also proposes a series of improvements that rebalance the StateFederal partnership and increase State flexibility. This proposal ends the 23- 

percentage point increase in the enhanced Federal match rate and the current law 

maintenance of effort requirement after FY 2017. The budget also proposes ending 

the Obamacare requirement for States to move certain children from CHIP into 

Medicaid and capping the level at which States could receive the CHIP enhanced 

Federal matching rate at 250 percent of the Federal Poverty Level. These provisions 

would return the focus of CHIP to the most vulnerable and low-income children. 

ALASKA REINSURANCE WAIVER

Question. As you note in your March letter to Governors, Alaska significantly decreased projected premium increases for 2017 through a 2-year reinsurance program. This program reduced both premium costs for consumers and tax credit expenditures by the Federal Government. In December 2016, Alaska released its application for a State Innovation Waiver under section 1332 of the Affordable Care 

Act (ACA) to sustainably implement the Alaska Reinsurance Program. The ACA’s 

1332 waivers require States to maintain high standards for access to quality, affordable coverage while giving them the flexibility to improve market stability and lower 

costs for consumers. 

Given the benefits of reinsurance that you highlighted using Alaska’s program, 

why has the pending Alaska reinsurance waiver not yet been approved? 

Does the March letter guidance still reflect the current position of the administration? 

Answer. The Centers for Medicare and Medicaid Services and the Department of 

Treasury announced approval of Alaska’s section 1332 waiver application on July 

11, 2017. 

The administration stands ready to work with States to implement solutions that 

work for their local markets. 

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ACA MARKETING AND OUTREACH

Question. On January 26, 2017, the White House ordered the U.S. Department 

of Health and Human Services (HHS) to prematurely stop advertising for open enrollment for the Affordable Care Act’s (ACA) health insurance marketplaces. This 

decision was made without clear explanation from the administration, other than 

a statement from HHS that the agency was looking for efficiencies. However, former 

officials under President Obama’s administration confirmed news reports that these 

advertisements had already been paid for. 

Please provide an explanation for stopping the administration’s marketing for 

open enrollment before its scheduled end date. 

What impact was anticipated by HHS prior to freezing marketing and outreach 

efforts? Please provide HHS’s analysis used to make this decision, including money 

spent on advertisements that were not run. 

Do you agree closing advertising for open enrollment prematurely could have 

caused fewer individuals to sign-up for ACA coverage, especially younger individuals 

who historically sign up closer to the deadline? 

Do you agree that enrolling more individuals in the ACA marketplace helps distribute risk within the health insurance marketplaces? If so, would you agree that 

deciding to prematurely halt advertising for 2018 enrollment could have been one 

of the sources of uncertainty that causes insurers to raise their premiums? 

In 2016, how much did HHS spend on marketing for enrollment for 2017? How 

much is HHS projected to have spent this year for 2018 enrollment? 

Were the marketing plans and contracts withdrawn in January previously paid 

for by President Obama’s administration? If so, was HHS able to recapture the 

funds paid towards these outreach efforts? If not, was the loss of these funds considered in making the decision to prematurely halt advertising for enrollment? If these 

funds were recouped, where has the agency redistributed these funds, or where does 

the agency plan to allocate these funds in the future? 

The President’s budget for Fiscal Year 2018 proposed a $310-million cut to the 

budget for the Federally-Facilitated Marketplace, which may hinder outreach efforts 

for future enrollment periods. In light of these cuts, how will you ensure that reduced funding will not lead to depressed enrollment for the future? 

Will you commit to engaging in full and uninterrupted outreach and marketing 

efforts to encourage individuals to enroll in ACA Marketplace plans during future 

open enrollment periods? 

Answer. Until Congress can act to repeal and replace Obamacare, the administration is carrying out its responsibilities under current law, including funding and 

maintenance of the exchange call center, even within a lean and efficient budget request. However, this budget reflects the goal of moving control of the health insurance market back to States and issuers. This includes recognition of the traditional 

role of States to perform outreach to their citizens, and the value of experienced 

agents and brokers to enroll individuals into health insurance. The Federal Government should not be duplicating these efforts. 

OREGON EXPERIMENT

Question. During the June 8, 2017 hearing on the President’s FY 2018 budget before the U.S. Senate Committee on Finance, you testified that Medicaid coverage 

does not lead to healthier outcomes for the newly eligible Medicaid population by 

reference to the Oregon experiment. 

However, I think it is important to talk about what the Oregon health experiment 

actually found. The study found that those who gained Medicaid coverage were more 

likely to get primary and preventive care, including screening and treatment for depression and diabetes. In addition, new Medicaid beneficiaries were 40 percent less 

likely to have suffered a decline in their health in the previous 6 months and 40 

percent less likely to go into medical debt or leave other bills unpaid to cover medical expenses, nearly eliminating all catastrophic out-of-pocket medical expenditures. Finally, although the researchers also found that some patients’ cholesterol 

levels fell, the small sample size and short duration of the study made it difficult 

to draw concrete conclusions about health outcomes. 

It’s also important to note that since this study was conducted nearly a decade 

ago, Oregon has seen a transformation of its health-care system to one of coordiVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00067 Fmt 6601 Sfmt 6621 R:\DOCS\30210.000 TIM
64 

nated care and expanded Medicaid coverage to hundreds of thousands of low-income 

Oregonians—all while continuing to improve care. This has meant fewer emergency 

room visits, a 75-percent increase in enrollment in patient-centered primary care 

homes, substantial increases in substance use disorder treatment, and reductions in 

preventable hospital admissions. 

Instead of focusing on what works and improving care, the House-passed AHCA 

bill and the President’s budget would rip health care away from millions of Medicaid 

beneficiaries, including as many as 465,000 Oregonians. Millions more Americans 

could see caps and cuts to their coverage, including 65,000 Oregonians who rely on 

Oregon’s Community First Choice option to receive community-based long-term care 

services and supports. 

While you cited the Oregon health experiment as providing evidence that Medicaid expansion leads to increased use of emergency departments for primary care, 

results from the Quarterly Legislative Report of Oregon’s Health System Transformation demonstrate that Oregon’s Medicaid program is increasing preventative 

care and reducing emergency department utilization among Oregon’s Medicaid beneficiaries. Given this evidence and your reliance on Oregon’s Medicaid program to 

draw your conclusions, do you plan to change your position on the effects of Medicaid for millions of Americans? 

According to the independent Congressional Budget Office, 14 million Americans 

will lose Medicaid under the repeal of the Medicaid expansion included in the 

House-passed AHCA bill and end up uninsured, including hundreds of thousands 

of Oregonians. How do you think the health outcomes for these individuals would 

change when they no longer have access to affordable, comprehensive health care? 

Do you expect that these 14 million low-income Americans without insurance or access to affordable coverage would need to rely on emergency rooms even more than 

they do today? How do you think increasing the number of uninsured individuals 

in the United States by 23 million would impact rates of emergency room use across 

the country? 

Answer. As you know, Medicaid is the primary source of medical coverage for millions of low-income American families and seniors facing health challenges. However, its costs have been growing drastically without corresponding improvement in 

outcomes. The problem isn’t lack of funding; the problem is lack of flexibility. The 

FY 2018 budget puts Medicaid on a path to fiscal stability by restructuring Medicaid financing and reforming medical liability laws. 

Rigid and outdated Federal rules and requirements prevent States from pioneering delivery system reforms and from prioritizing Federal resources to their 

most vulnerable populations, which hurts access and health outcomes. The President’s budget will give States as much freedom as possible to design reforms that 

meet the spectrum of diverse needs of their Medicaid populations. 

The administration is committed to making sure that States have the flexibility 

to design their Medicaid programs to meet the needs of the most vulnerable in their 

State. By strengthening the Federal and State Medicaid partnership, we will empower States to develop innovative solutions that meet their unique demographic, 

budgetary, and policy needs, rather than telling States how they should run their 

programs. 

EPM RULE

Question. On January 3, 2017, the Department of Health and Human Services 

(HHS) published a final rule implementing three new Episode Payment Models 

(EPMs) for Medicare Parts A and B and a Cardiac Rehabilitation (CR) incentive 

payment model through the Center for Medicare and Medicaid Innovation. Under 

the three new EPMs, acute care hospitals in certain selected geographic areas will 

participate in retrospective EPMs targeting care for Medicare fee-for-service beneficiaries receiving services during acute myocardial infarction (AMI), coronary artery 

bypass graft (CABG) and surgical hip/femur fracture treatment (SHFFT) episodes. 

On May 19, 2017, HHS published a final rule delaying the start date for the 

EPMs and CR from July 1, 2017, to January 1, 2018. The May 19, 2017, final rule 

also reiterated HHS’s position that ‘‘these models will further [its] goals of improving the efficiency and quality of care for Medicare beneficiaries receiving care for 

these common clinical conditions and procedures.’’ 

Given HHS’s statement that these models will further the goals of improving the 

efficiency and quality of care for Medicare beneficiaries, will you commit to impleVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00068 Fmt 6601 Sfmt 6621 R:\DOCS\30210.000 TIM
65 

menting these EPMs and CR—without any substantive changes—and adhering to 

the new January 1, 2018 start date without any further delays? 

Answer. On March 21, 2017, the U.S. Department of Health and Human Services 

(HHS) published an interim final rule with comment period that delayed the effective date of the final rule titled ‘‘Advancing Care Coordination Through Episode 

Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and 

changes to the Comprehensive Care for Joint Replacement Model (CJR)’’ to May 20, 

2017, the applicability date of certain EPM regulations to October 1, 2017, and the 

effective date of certain CJR regulations to October 1, 2017. We received public comments suggesting changes to the overall design of the EPMs, CR incentive payment 

model and CJR model that were unfortunately outside of the scope of the March 

21, 2017 IFC regulation. These comments touched on participation requirements, 

data, pricing, quality measures, episode length, CR and SNF waivers, beneficiary 

exclusions and notification requirements, repayment, coding, and model overlap 

issues. We consider these public comments to be outside of the scope of the March 

21, 2017 IFC; and therefore, we did not address them in the May 19, 2017 final 

rule, which finalized the effective date of the rule as May 20, 2017 and the applicability date of certain EPM regulations and certain CJR regulations as January 1, 

2018. We may consider these public comments in future rulemaking. 

MEDICAID ADDITIVE EFFECTS

Question. The President’s FY 2018 budget proposes $627 billion in spending cuts 

to Medicaid. However, the President’s budget also includes language that these 

$600-plus-billion in Medicaid reductions are on top of ‘‘additional savings to Medicaid as a result of the administration’s plan to repeal and replace Obamacare.’’ According to the independent Congressional Budget Office, the American Health Care 

Act (AHCA) would reduce Medicaid by $834 billion, the result of which would be 

the removal of 14 million beneficiaries from the program and cuts to care for millions more. 

Secretary Price, for the record, what is the total amount of Medicaid cuts under 

the President’s budget? Please note, I am not asking about government-wide savings 

target or total savings from ‘‘repeal and replace.’’ I am simply asking the administration to clarify the total amount of assumed reductions to Medicaid under the 

President’s budget. Without an exact number of the Medicaid-specific cuts assumed 

by the President in his budget, one can only assume that the ‘‘additional savings 

to Medicaid as a result of the administration’s plan to repeal and replace Obamacare’’ is the over $800 billion in cuts included in the House-passed AHCA bill. If 

that is not accurate, please provide the total amount of Medicaid cuts in the budget 

combined with the AHCA. 

Answer. The President’s FY 2018 budget does not incorporate specific legislation 

that is before Congress. Therefore, it is not accurate to apply the specific Medicaid 

savings the CBO has estimated for legislation before Congress to the President’s 

budget. To do so would assume a level of specificity that does not exist in the budget. The budget calls for refocusing Medicaid on the elderly, children, pregnant 

women, and individuals with disabilities. The budget specifies savings of $610 billion by providing additional flexibility to States by reforming the fiscal structure of 

Medicaid, allowing a choice between per capita cap or a block grant, beginning in 

FY 2020. In fact, under the budget, Medicaid spending will continue to grow over 

the next decade. 

SECTION 1115 AND 1332 WAIVERS

Question. Section 1115 of the Social Security Act provides the U.S. Department 

of Health and Human Services (HHS) Secretary with the authority to approve demonstration projects that promote the objectives of Medicaid and the Children’s 

Health Insurance Program (CHIP). 

Section 1332 of the Patient Protection and Affordable Care Act (ACA) provides the 

Secretary with broad authority to approve waivers to certain ACA marketplace provisions. Applications must meet four criteria: individuals must get insurance coverage at least as comprehensive as provided under the ACA; insurance coverage offered to individuals must be at least as affordable as it would be under the ACA; 

as many people must be covered as would be under the ACA; and the proposal must 

not increase the Federal deficit. 

You have indicated your intention to streamline waiver rules and procedures. 

What changes, if any, does the administration intend to implement in its consideration of 1332 and 1115 waivers relative to standing guidance? 

66 

What are HHS’s internal controls for ensuring compliance with transparency as 

well as notice and comment requirements for 1332 and 1115 waivers? 

What is your goal for the length of time it takes HHS to approve a waiver while 

upholding the letter of the law? 

Answer. In March, U.S. Department of Health and Human Services (HHS) sent 

letters to America’s 50 Governors regarding 1332 waivers announcing the Department’s commitment to letting States develop innovative strategies to adapt many of 

the Affordable Care Act’s requirements to suit the State’s specific needs. HHS and 

CMS Administrator Seema Verma then sent a separate letter to the Governors announcing our commitment to ushering in a new era for Federal and State Medicaid 

partnership where States have more flexibility to design programs that meet their 

unique needs. 

To receive approval for a 1332 State Innovation Waiver, a State must demonstrate that a proposed waiver will provide access to quality health care that is 

at least as comprehensive as would be provided without the waiver, will provide coverage and cost sharing protections against excessive out-of-pocket spending at least 

as affordable as would be provided without the waiver, will provide coverage to at 

least a comparable number of residents of the State as would be provided coverage 

without a waiver, and will not increase the Federal deficit. Further, before submitting its section 1332 waiver application the State must also provide a public notice 

and comment period, including public hearings, sufficient to ensure a meaningful 

level of public input, and have in place a law providing for its implementation of 

the waiver. 

HHS and the Department of Treasury jointly oversee and set standards for the 

application, review, and reporting process. Upon receipt of a State Innovation Waiver application, the Departments will work with the State on the review and approval process. A preliminary review by the Departments will occur within 45 days 

of submission to determine if the application is complete and a final decision will 

be issued no later than 180 days after the determination that an application is complete. 

CMS established a new ‘‘fast-track’’ process for reviewing proposals from States 

to extend established Medicaid and CHIP 1115 demonstrations that reauthorize 

longstanding policies with proven program outcomes. States that want to be considered for the fast-track process must use the streamlined extension application for 

the 1115 extension pathway under which it is requesting to be extended. The July 

24, 2015 CMCS Informational Bulletin contains additional guidance and information 

on the ‘‘fast-track’’ Federal review process. 

MEDICAID AND SUBSTANCE USE DISORDER TREATMENT

Question. Medicaid is the single largest payer of substance use disorder services 

in the Nation and pays for a third of all medication-assisted treatment (MAT) in 

the United States. Many States with the highest opioid overdose death rates have 

used Medicaid to expand access to MAT including Kentucky, Maine, Pennsylvania, 

Ohio, and West Virginia as well as many other States being devastated by the 

opioid epidemic like my home State of Oregon. Under the ACA’s Medicaid expansion, one out of three people covered through the Medicaid expansion have a mental 

illness, substance use disorder, or both. In fact, independent researchers estimate 

that repealing the Medicaid expansion would cut $4.5 billion from mental health 

and substance use services for low-income Americans. In fact, according to 

SAMHSA, the Affordable Care Act, including the expansion of Medicaid, is expected 

to increase total spending on behavioral health by more than $7 billion per year by 

2020. Unfortunately, the House-passed AHCA bill would undermine this investment 

and progress in addressing the opioid epidemic by causing 23 million more individuals, including 14 million on Medicaid, to become uninsured. 

As Secretary of HHS, how do you intend to protect the gains in access to SUD 

treatment achieved through Medicaid expansion if Medicaid is cut by over $800 billion and the Medicaid expansion is repealed? 

One of the critical ways in which we see the importance of access to SUD treatment is by looking to the spread of the opioid epidemic, particularly in rural regions 

of the country. How do you plan to combat this epidemic if millions of Americans 

lose coverage for mental health and SUD treatment? Given the fact that this epidemic is particularly devastating for rural communities, do you have plans to combat opioid abuse that will target individuals in these regions? 

67 

The House-passed AHCA bill repeals the requirement that States provide certain 

Medicaid beneficiaries with access to the essential health benefits including substance user disorder coverage. This coupled with the increased financial pressure 

placed on States through the repeal of the Medicaid expansion and conversion of 

Medicaid into a capped program may lead States with no option but to drop coverage for this critical benefit. How do you plan to work with States to ensure that 

they do not limit or drop coverage for substance use disorders? 

Answer. The U.S. Department of Health and Human Services (HHS) is keenly 

aware of the devastating impact that opioid addiction is having on our families and 

communities. The administration is committed to doing all that we can to end the 

scourge of opioids that is sweeping across this Nation. 

The administration is committed to bringing everything the Federal Government 

has to bear to address the health crisis opioids pose. The budget calls for $811 million in support of the five-pronged strategy guiding our Department’s efforts to fight 

this scourge: 

1. Improving access to prevention, treatment, and recovery services, including the 

full range of medication-assisted treatments; 

2. Targeting availability and distribution of overdose-reversing drugs; 

3. Strengthening our understanding of the crisis through better public health surveillance; 

4. Providing support for cutting edge research on pain and addiction; and 

5. Advancing better practices for pain management. 

This funding increase will expand grants to Health Resources Services administration (HRSA) Community Health Centers targeting substance abuse treatment 

services from $94 million to $144 million. Also within this total is $500 million for 

State Targeted Response to the Opioid Crisis Grants that were authorized in the 

21st Century Cures Act, which expand access to treatment for opioid addiction. 

Using evidence-based interventions, these grants will help to address the primary 

barriers preventing individuals from seeking and successfully completing treatment 

and achieving and sustaining recovery. 

One of the key pillars of our approach is improving access to treatment and recovery services, including medication-assisted treatment (MAT) with naltrexone, buprenorphine, or methadone. As mentioned above, through the State Targeted Response 

to the Opioid Crisis grants authorized in the 21st Century Cures Act, HHS is expanding access to opioid addiction treatment through evidence-based interventions, 

including MAT. We are targeting the primary barriers to seeking and successfully 

completing treatment and achieving and sustaining recovery. This funding is critical 

to reversing the opioid epidemic. 

IMPACTS OF THE AHCA ON RURAL AND OLDER AMERICANS

Question. In a May 24th report, the nonpartisan Congressional Budget Office 

(CBO) provided an estimate of the coverage and budgetary effects of the Housepassed American Health Care Act (AHCA). According to the CBO analysis, the 

AHCA would lead to 23 million more uninsured Americans, 14 million of which 

would lose insurance after only 1 year. 

Under the AHCA, insurers would be allowed to charge older Americans five times 

more than younger Americans for the same insurance plan. The AHCA would also 

replace the Affordable Care Act (ACA) ACA’s tax credits with credits that raise premium costs for older and rural Americans. This is confirmed by CBO’s analysis, 

which concluded that younger and healthier consumers would be able to obtain 

skimpier policies with lower premiums, while older and sicker enrollees would face 

higher costs. In addition, because the AHCA’s tax credits do not account for local 

variation in health-care costs, rural Americans are more likely to face higher premium costs than non-rural Americans. 

A recent State-by-State analysis by the National Academy for State Health Policy 

(NASHP) confirmed the predicted negative effect of the AHCA on rural and older 

Americans. For example, with tax credits, a 60-year-old in the Portland-metro area 

could see an increase in their premium from $2,480 under the ACA to $8,590 under 

the AHCA, a nearly 400-percent increase, while a 27-year-old could only face premiums as low as $1,340. Meanwhile, in rural Umatilla County, a 60-year-old would 

see an increase in their premium from $2,480 under the ACA to $15,770 under the 

AHCA, an over 600 percent increase, while a 27-year-old would pay premiums of 

$3,240. 

68 

2http://www.cbpp.org/sites/default/files/atoms/files/4-8-15tanf_0.pdf. 3http://www.cbpp.org/sites/default/files/atoms/files/6-6-16pov3.pdf. 

President Trump promised, ‘‘We’re going to have insurance for everybody. . . . 

There was a philosophy in some circles that if you can’t pay for it, you don’t get 

it. That’s not going to happen with us.’’ Secretary Price, the AHCA clearly would 

not keep President Trump’s promise, especially for rural and older Americans. Does 

the administration support the AHCA even though it violates the President’s promises? 

The MacArthur amendment would allow States to apply for waivers that would 

permit insurers to charge older Americans even more than the five times what they 

charge younger Americans for the same plan. These waivers would harm older 

adults and likely price them out of their coverage, again violating the President’s 

promises. Does the administration support the MacArthur amendment to the AHCA 

even though it violates the President’s promise? 

How do you defend the President’s statement that no one would lose health insurance under his administration when CBO makes clear that 23 million Americans 

will lose coverage? 

In a meeting with Republican senators, the President reportedly told them that 

the AHCA is ‘‘mean.’’ Do you agree with the President that the AHCA is mean? If 

not, please explain why causing 23 million Americans to lose their health coverage, 

causing older Americans to pay five times as much for coverage as younger Americans and cutting more than $800 billion from the Medicaid safety net—all to pay 

for tax cuts for the affluent—is not ‘‘mean.’’ 

Answer. Americans across the country have seen their health insurance choices 

disappear and premiums spiral out of control, increasing by double and triple digits. 

Last year alone, 73 insurers left the exchanges. In one-third of counties, Americans 

have only one choice for a health-care provider on the exchanges. Without action, 

Americans are stuck with Obamacare’s higher costs and fewer choices. 

The administration is committed to working with Congress to repeal and replace 

Obamacare. The budget proposal represents the President’s commitment to rescue 

Americans from the failures of the Obamacare. The President supports a repeal and 

replace approach that provides individuals and families tools to choose the coverage 

that best meets their needs. 

ACTUARIAL SOUNDNESS IN MEDICAID MANAGED CARE

Question. In April 2016, the Centers for Medicare and Medicaid Services (CMS) 

posted the final rule for Medicaid and CHIP Managed Care. This rule finally updated Medicaid managed care regulations, the first formal update in over a decade. 

One of the key principles of the final rule was to update the standards for actuarial 

soundness in Medicaid managed care plans. In short, actuarial soundness requirements assure health plan rates are sufficient to reimburse provider networks for 

services they provide to Medicaid beneficiaries. Ensuring rates are actuarially sound 

is essential to ensuring beneficiaries can access the care they need under the Medicaid program, an issue you have highlighted as an area of focus in your past statements. 

Will you commit to ensure that Medicaid managed care plans achieve the Federal 

standard of actuarial soundness established in the Medicaid and CHIP Managed 

Care Final Rule? 

Will you uphold Federal oversight of rate-setting to assure health plans achieve 

Federal actuarial soundness requirements in all States and that beneficiaries have 

access to the care they need as required under the Medicaid statute? 

Answer. The U.S. Department of Health and Human Services (HHS) is conducting 

a full review of managed care regulations in order to prioritize beneficiary outcomes 

and State priorities. 

BENEFITS OF AND FUNDING FOR TANF AND SSBG

Question. You describe TANF as a program that promotes empowerment of families through work. However, only 8 percent of States’ TANF funds are directed toward work.2 Rigorous studies also show that the employment gains from work requirements were short-lived: within 5 years, recipients who were not subject to the 

work requirements were just as or more likely to work as those who were subject 

to them.3 Very few States collect data on the employment of families when they 

69 

4http://www.cbpp.org/sites/default/files/atoms/files/6-16-15tanf.pdf. 

5 Ibid. 

leave the welfare rolls, but the few that do show that the vast majority of former 

recipients are stuck in low-wage jobs or not working at all. Overall, few States have 

made steady progress toward increased earnings and more stable employment. 

Do you still believe that TANF, in its current state, is a program that promotes 

empowerment of families through work? 

Answer. TANF’s fundamental focus on requiring work and establishing time limits on assistance has been transformative in changing the welfare policy landscape. 

These two pillars of the TANF program continue to be integral to TANF’s framework. While there are areas of TANF that could be strengthened, this core framework continues to promote the empowerment of families through work. The administration looks forward to working with Congress to strengthen the work requirement to increase participant engagement in activities that will better help adult 

participants find jobs, remain employed, and advance in the workforce. 

Question. You tout the fact that so few families receive TANF as a sign of success: 

for every 100 families in poverty, only 23 receive cash assistance from TANF, down 

from 68 in 1996 when TANF was created.4 But, one of the consequences of welfare 

reform is a significant increase in the number of families who are deeply poor, including many who have no access to any stable income from either work or cash 

assistance, which we know has lifelong negative consequences for children. 

Do you believe that caseload decline, even if it puts children in harm’s way, is 

an adequate measure of success? 

Answer. Caseload decline is only one piece of the TANF story and is not an adequate measure of success on its own. The goal is to move families off of TANF 

through work. Under the TANF program, the employment of single mothers increased by 12 percent from 1996 through 2000, and even after the 2008 recession, 

employment for this demographic is still higher than before welfare reform. 

TANF’s primary measure is the work participation rate, which measures the degree to which families with a work-eligible individual receiving cash assistance are 

engaged in specified work activities. States must engage families to meet their target rate or face a financial penalty. The goal is to help families prepare for and go 

to work in a way that increases their capacity to support their families financially 

and reduce their dependency on public benefit programs. 

Question. How do you reconcile your view that the TANF caseload decline is a 

measure of success with the scientific evidence that exposing children to high levels 

of stress negatively impacts their growth and development and has long-term negative consequences? 

Answer. The administration wants to support States in their efforts to move families from welfare to work. The administration believes the achievement of gainful 

employment and economic independence is critically important for the well-being of 

parents and their children. More than just a means of income, work creates opportunities for individual growth; instills personal dignity; promotes health and wellbeing; and provides low-income families with a clear pathway to financial selfsufficiency. 

Question. In your January 2017 responses to questions for the record related to 

TANF, you stated, ‘‘I think the best way to measure the success of the law is to 

see where the Nation was prior to its passage and where we are now.’’ The Center 

on Budget and Policy Priorities (CBPP) has reported that extreme poverty has more 

than doubled since the passage of TANF in 1996.5 HHS has also previously referred 

to TANF as an ‘‘anti-poverty program.’’ 

How do you reconcile your view that the TANF caseload decline is a measure of 

success with evidence that extreme poverty has more than doubled since the passage of TANF? 

Answer. As stated above, caseload decline is only one measure, and is not an adequate measure on its own. The administration believes the emphasis should be on 

moving families from welfare to work. On that score, TANF has been a clear success. The employment rate for never-married mothers rose from 49 percent in 1995 

to 66 percent in 2000 and has never returned to pre-welfare reform lows. 

As a result, the official poverty rate for single mothers and their children fell from 

44 percent in 1994 to 33 percent in 2000 and, despite a still-recovering economy, 

70 

the poverty rate for this group in 2015 (36.5 percent) was still below the rates seen 

prior to welfare reform. 

Nevertheless, poverty—and in particular deep poverty—remains too high in our 

country, and we must implement policies that will build on the progress TANF 

made in helping many families experience financial stability and security through 

employment. The administration looks forward to working with you to find better 

ways to help low-income Americans rise out of poverty. 

Question. If you still believe that TANF is successful, then why, under your budget, would it face $22 billion in cuts over the next decade? 

Answer. TANF’s success is not the result of the amount of dollars spent; rather 

its success comes from its restructuring of a welfare system to create a program that 

provides time-limited assistance, promotes empowerment through work, and fosters 

innovation. 

As you know, TANF is a State-run program that offers flexibility in the use of 

funds to achieve the program’s purposes. While this flexibility has been essential to 

allowing States to create innovative and effective strategies for helping families gain 

self-sufficiency, States have also been able to use their funds for benefits that fail 

to serve the core intent of the program. For example, States have used their TANF 

funds on services that are not targeted to a low-income population, and have even 

replaced existing State spending with TANF dollars in an effort to fill State budget 

gaps. Over time, States have reduced the portions of their block grants spent on 

work programs. Under the budget proposal, States will be able to maintain and 

strengthen services that promote employment, family stability, and self-sufficiency— 

and thereby reduce the need for TANF cash assistance benefits—by renewing attention to the core purposes of the program. 

Question. Clearly if States could no longer transfer TANF funds to SSBG, they 

would spend their flexible TANF dollars within the purposes of TANF. It seems 

clear that the justification for cutting TANF as to ‘‘align’’ with the proposed elimination of SSBG is nothing more than window dressing for reducing funding. How 

would you respond to governors across the Nation who are concerned by the proposed $22 billion in cuts to funding that their States, citizens and service providers 

have come to rely upon? 

Answer. Many States are not sufficiently investing their current dollars in 

TANF’s key welfare-to-work activities. In Fiscal Year 2015, States spent only about 

28 percent of their total TANF and State maintenance-of-effort funds on the combination of work, work supports such as child care and transportation services, and 

case management services. States do not need more money in the TANF program; 

they need to use taxpayers’ money more effectively to help move families dependent 

on public resources into stable work that can lead to self-sufficiency, to the benefit 

of both parents and children. 

Question. In January 2017, you stated, ‘‘As a 2011 GAO report pointed out, SSBG 

is a program of fragmentation, overlap, and duplication.’’ You additionally stated 

that ‘‘there is not a one-size fits all approach to how States might react should there 

be an elimination of any Federal program.’’ 

Could you specifically describe which 2011 GAO reported that SSBG is identified 

as a program of ‘‘fragmentation, overlap, and duplication and provide page numbers 

to support this claim?’’ 

Answer. On March 1, 2011, the GAO released its report, ‘‘Opportunities to Reduce 

Potential Duplication in Government Programs, Save Tax Dollars, and Enhance 

Revenue’’ (GAO–11–318SP). Its supplement report, ‘‘List of Selected Federal Programs That Have Similar or Overlapping Objectives, Provide Similar Services, or 

Are Fragmented Across Government Missions,’’ was released on March 18, 2011. On 

page 14 of the supplement report, SSBG is cited as one of 80 Federal programs providing transportation services for transportation-disadvantaged persons. 

TPP BIOLOGICS/STOCK TRADING

Question. During your confirmation process before the Finance Committee, you 

were asked about meetings you may have had related to your holdings and purchases in an Australian pharmaceutical company—Innate Immunotherapeutics (‘‘Innate’’). On June 1st, ProPublica reported in an article (‘‘Tom Price Bought Drug 

Stocks. Then He Pushed Pharma’s Agenda in Australia,’’) that you discussed the 

pharmaceutical industry’s trade agenda in meetings with Australian officials. Such 

71 

discussions could have impacted the business of Innate and other pharmaceutical 

companies you held at the time of the meetings. 

Please describe any communications between you (or your staff) and the Office of 

the United States Trade Representative, representatives of the Government of Australia, or Members of Congress or their staff, with knowledge of the negotiations 

and implementation discussions regarding the TPP biologics commitments and their 

implementation by foreign governments between December 2015 and August 31, 

2016. For each communication, please indicate the approximate date of the communication and the information provided. 

Please provide the itinerary for the April 2016 congressional delegation to Australia and the Philippines described in the ProPublica article noted above. 

Did you discuss biologics commitments and their implementation under the 

Trans-Pacific Partnership when you met with Australian government officials in 

April 2016? If so, please identify the meetings in the itinerary in which biologics 

commitments were raised, and describe the nature of any such discussion. 

Did you or your staff discuss biologics commitments and their implementation 

under the Trans-Pacific Partnership with any U.S. Government officials between 

December 2015 and August 31, 2016? If so, please identify the meetings in the 

itinerary in which biologics commitments were raised, and describe the nature of 

any such discussion. 

Answer. The administration is aware of the following communications/meetings 

that were undertaken between December 2015 and August 31, 2016 with individuals in the Office of the U.S. Trade Representative (USTR), representatives of the 

Australian Government, and Members of Congress (and staff) who may have had 

knowledge of the negotiations and implementation discussions regarding the TransPacific Partnership (TPP) biologics commitments and their implementation. 

Office of the United States Trade Representative 

• The House Committee on Ways and Means hosted a members-only briefing with 

USTR Michael Froman on December 2, 2015. 

• The Secretary and Warren Negri (Policy Advisor) met with USTR Michael 

Froman on April 29, 2016. 

House Committee on Ways and Means 

• The House Committee on Ways and Means hosted a members-only briefing on 

TPP on December 1, 2015. 

• The House Committee on Ways and Means hosted a members-only briefing with 

USTR Michael Froman on December 2, 2015. 

• Angela Ellard and Stephen Claeys, from the House Committee on Ways and 

Means, met with the Secretary and Kyle Zebley (Legislative Director) on March 

23, 2016, to conduct a briefing on TPP prior to the Congressional Delegation 

(CODEL) trip to Australia in the spring of 2016. 

• Kyle Zebley (Legislative Director) conducted a phone call with Stephen Claeys 

on April 26, 2016, prior to the meeting with USTR Michael Froman on April 

29, 2016. 

The Government of Australia 

The Secretary’s only interaction with the Government of Australia between December 2015 and August 31, 2016 took place during a CODEL from March 29, 2016 

through April 7, 2016. The purpose of the CODEL was to meet with U.S., Australian, and Filipino defense officials and service members to evaluate U.S., ally, 

and partner installations, operations, and training in the Pacific region, with a particular focus on new U.S. programs, deployments, and installations in support of the 

Pacific rebalance. A complete manifest of the CODEL has been included. 

Congressional staff had no interaction with the Government of Australia between 

December 2015 and August, 31, 2016. 

QUESTIONS SUBMITTED BY HON. DEBBIE STABENOW

MENTAL HEALTH AND SUBSTANCE ABUSE

Question. Research from Harvard Medical School and New York University shows 

that eliminating Medicaid expansion increases the addiction treatment gap by 50 

72 

percent and takes away $5.5 billion per year from treatment for substance use disorders and mental health. 

Do you agree that the cut to Medicaid in the HHS budget will reduce access to 

substance use disorder and mental health services? 

Do you support the waivers in the American Health Care Act that would allow 

insurance companies to end the requirement that plans cover addiction services and 

mental health treatment? 

Answer. Addressing serious mental illness across our Nation and combating the 

opioid epidemic are two of the Department’s top priorities. The U.S. Department of 

Health and Human Services (HHS) is keenly aware of the devastating impact that 

opioid addiction is having on our families and communities. The administration is 

committed to doing all that we can to end the scourge of opioids that is sweeping 

across this Nation. 

The administration is committed to bringing everything the Federal Government 

has to bear to address the health crisis opioids pose. The budget calls for $811 million in support of the five-pronged strategy guiding our Department’s efforts to fight 

this scourge: 

1. Improving access to prevention, treatment, and recovery services, including the 

full range of medication-assisted treatments; 

2. Targeting availability and distribution of overdose-reversing drugs; 

3. Strengthening our understanding of the crisis through better public health surveillance data and reporting; 

4. Providing support for cutting edge research on pain and addiction; and 

5. Advancing better practices for pain management. 

This funding increase will expand grants to Health Resources Services Administration (HRSA) Community Health Centers targeting substance abuse treatment 

services from $94 million to $144 million. Also within this total is $500 million for 

State Targeted Response to the Opioid Crisis Grants that were authorized in the 

21st Century Cures Act, which expand access to treatment for opioid addiction. 

Using evidence-based interventions, these grants will help to address the primary 

barriers preventing individuals from seeking and successfully completing treatment 

and achieving and sustaining recovery. 

One of the key pillars of our approach is improving access to treatment and recovery services, including medication-assisted treatment (MAT) with naltrexone, buprenorphine, or methadone. As mentioned above, through the State Targeted Response 

to the Opioid Crisis grants authorized in the 21st Century Cures Act, HHS is expanding access to opioid addiction treatment through evidence-based interventions, 

including MAT. We are targeting the primary barriers to seeking and successfully 

completing treatment and achieving and sustaining recovery. This funding is critical 

to reversing the opioid epidemic. 

HEALTHY MICHIGAN PLAN

Question. Last week in Lansing, business leaders, the Michigan Department of 

Health and Human Services, the State budget office, hospitals, health-care providers, and others held a meeting on Medicaid. There was widespread agreement 

that Medicaid is working in Michigan. 

The State’s Budget Director said about our Healthy Michigan Plan: ‘‘This is not 

only the right thing to do, it’s the smart and fiscally responsible thing to do. Reductions in delayed and uncompensated care and increase in healthier lifestyles provide 

benefits to us all in so many ways.’’ 

The HHS budget would cut Medicaid funding in half 10 years from now, and the 

American Health Care Act ends Medicaid expansion entirely. 

Do you think Michigan’s Budget Director incorrectly assessed Michigan’s Medicaid 

expansion? 

Do you disagree with research that shows Medicaid expansion in Michigan has 

led to job creation, cost savings, and insurance coverage? 

Answer. (See response below.) 

Question. The State’s Budget Director said that the Medicaid cuts would create 

an $800-million per-year hole in the budget it could not afford. 

73 

Do you agree that Michigan couldn’t continue to fund health care, and that cuts 

would have to be made? 

Answer. The administration remains committed to ensuring that Medicaid is 

available for eligible beneficiaries, and working with States to ensure they are able 

to make the most use of available resources to serve their citizens. As you know, 

Medicaid is the primary source of medical coverage for millions of low-income American families and seniors facing health challenges. However, its costs have been 

growing drastically without improvement in outcomes. 

The problem isn’t lack of funding; the problem is lack of flexibility. Rigid and outdated Federal rules and requirements prevent States from pioneering delivery system reforms and from prioritizing Federal resources to their most vulnerable populations, which hurts access and health outcomes. The administration is committed 

to giving States as much freedom as possible to design reforms that meet the spectrum of diverse needs of their Medicaid populations. 

Question. The budget doesn’t include any information on the impact of Medicaid 

cuts. 

Has HHS evaluated what these cuts would mean for Michigan? 

Answer. The FY 2018 budget calls for refocusing Medicaid on the elderly, children, pregnant women, and individuals with disabilities. In fact, under the budget, 

Medicaid spending will continue to grow over the next decade. 

QUESTIONS SUBMITTED BY HON. MARIA CANTWELL

AFFORDABLE CARE ACT CONTRACEPTIVE BENEFIT

Question. On May 31, 2017, the media released a draft interim final rule by your 

department that in my understanding would allow any employer in the country to 

easily deny birth control to their employees. Multiple studies show that access to 

birth control without cost-sharing leads to better health, economic security, and 

lower rates of unintended pregnancies. 

Are you aware of the reports about this interim final rule? 

Are you familiar with the document that was released by the media? 

Is your department planning an interim final rule on this matter? 

Answer. The administration is not at liberty to discuss the details of pending 

rules and regulations. 

MANDATORY SEQUESTER AND EFFECT ON MEDICARE REIMBURSEMENT

Question. President Trump has repeatedly promised the American people that he 

won’t cut Medicare. 

Does the President’s FY18 budget propose to extend the mandatory sequester beyond OMB’s current law baseline? 

Does the mandatory sequester reduce the aggregate amount of Medicare reimbursement that providers would receive, compared to an assumption of current law? 

Do you consider the mandatory sequester a cut to Medicare reimbursement? 

Answer. The President’s budget reflects current law. In addition, the budget proposes to continue current law by extending sequestration by 2 years. This is not a 

cut to what Medicare currently pays to providers and does not change benefits or 

prices charged to beneficiaries generally. 

QUESTIONS SUBMITTED BY HON. BILL NELSON

Question. President Trump repeatedly promised that he would protect the Medicare and Medicaid programs from cuts during his campaign. Proposals to cut billions of dollars from the Medicare program, increase the Medicare eligibility age, 

turn Medicare into a voucher program, or increase out-of-pocket costs for seniors on 

Medicare would affect the over 4 million Floridians who depend on the program for 

financial security. 

74 

The administration’s budget extends the across-the-board cuts in Medicare provider payments by 2 years, effectively cutting $30 billion from the Medicare program. Do you agree that this is a cut to the Medicare program? 

Answer. The President’s budget reflects current law. In addition, the budget proposes to continue current law by extending sequestration by 2 years. This is not a 

cut to what Medicare currently pays to providers and does not change benefits or 

prices charged to beneficiaries generally. 

Question. Last month, OMB Director Mulvaney made comments indicating that 

he would advise the President to not keep his promises to protect the Medicare program from cuts. 

As the President’s top advisor on Medicare, do you agree with Director Mulvaney 

that next year’s budget should cut Medicare? 

Answer. For 51 years, Medicare has played a crucial role in providing health care 

for America’s senior citizens. Unfortunately, Medicare trustees have consistently 

told us that the Medicare program is in financial trouble. In light of that fact, my 

primary concern has always been to protect the program for seniors today and the 

generations to come. At HHS, we take seriously our responsibility to protect Medicare for this generation and those to come, and we are pursuing all available avenues to improve Medicare’s sustainability in ways that put patients first. 

The Congressional Budget Office’s (CBO) estimate for H.R. 1628, the American 

Health Care Act, shows just how much of a disaster this bill would be for American 

families. According to CBO: 

• 14 million Americans will lose their health insurance next year. 

• $834 billion would be cut from the Medicaid program. 

• Older Americans will pay more for less. In fact, the bill will result in ‘‘substantially raising premiums for older people.’’ 

• The uninsured rate ‘‘would be disproportionately larger among older people with 

low incomes.’’ 

• For example, in 2026, a 64-year old who earns just over $26,000 in a non-waiver 

State would pay $16,100 in premiums rather than $1,750 under the Affordable 

Care Act. 

Question. You stated that ‘‘nobody will be worse off financially’’ under the health 

plan. How is the bill better for Floridians? It ends the Medicaid program as we 

know it, charges older Americans more for less coverage, and ends the guarantee 

of coverage for people with preexisting conditions. 

Answer. Americans across the country have seen their health insurance choices 

disappear and premiums spiral out of control, increasing by double and triple digits. 

Last year alone, 73 insurers left the exchanges. In one-third of counties, Americans 

have only one choice for a health-care provider on the exchanges. Without action, 

Americans are stuck with Obamacare’s higher costs and fewer choices. 

The administration is committed to working with Congress to repeal and replace 

Obamacare. The budget proposal represents the President’s commitment to rescue 

Americans from the failures of Obamacare. The President supports a repeal and replace approach that provides individuals and families tools to choose the coverage 

that best meets their needs. 

Question. The administration’s budget states, ‘‘Outbreaks like Zika will not be a 

one-time event.’’ Yet, the administration’s budget cuts the very programs designed 

to respond to and prevent public health emergencies like the Zika virus. Please answer the following questions on the Zika virus with a yes or no answer, unless otherwise specified. 

Does your budget cut more than $7.2 billion from the National Institutes of 

Health (NIH)? 

Answer. The budget includes a total of $25.9 billion to support the highest priority 

biomedical research within the National Institutes of Health (NIH). NIH is the largest public funder of biomedical research in the world. NIH expands the biomedical 

knowledge base by funding cutting-edge research, improves health by seeking new 

treatment and prevention options, supports the training of the current and future 

biomedical workforce, and drives economic growth and productivity. 

The FY 2018 budget presents an opportunity for HHS and NIH to reexamine how 

to optimize Federal investment in a way that best serves the American people. The 

budget was developed to enhance the stewardship of taxpayer dollars by focusing 

75 

our resources on innovative scientific research. The Department assessed opportunities within the NIH to determine where greater efficiencies may be possible. 

Additionally, the administration will propose a package of reforms to streamline 

Federal compliance requirements and reduce burden on NIH grantees. These targeted policies will reduce the time and expenses that grantees must currently spend 

to comply with overly burdensome Federal grant requirements, thus lowering grantees’ administrative costs and mitigating the impact of lower reimbursements. The 

approach will also seek to develop a uniform indirect cost rate to all grants that 

mitigates the risk for fraud and abuse by simplifying and uniformly applying the 

rate for grantees. 

Question. Does it cut more than $600 billion from the Medicaid program, on top 

of many of the cuts included in the House-passed health-care bill? 

Answer. No. The President’s FY 2018 budget does not incorporate specific legislation. Therefore, it is not accurate to apply the specific Medicaid savings the CBO 

has estimated for legislation before Congress to the President’s budget. To do so 

would assume a level of specificity that does not exist in the budget. The budget 

calls for refocusing Medicaid on the elderly, children, pregnant women, and individuals with disabilities. The budget specifies savings of $610 billion by providing additional flexibility to States by reforming the fiscal structure of Medicaid, allowing a 

choice between per capita cap or a block grant, beginning in FY 2020. 

Question. Does it cut more than $1.3 billion from the Centers for Disease Control 

and Prevention (CDC), including $35 million from the National Center of Birth Defects and Developmental Disabilities; $65 million from the Center for Emerging and 

Zoonotic Infectious Disease; and $135 million from the Office of Public Health Preparedness and Response? 

Answer. The FY 2018 budget for CDC and the Agency for Toxic Substances and Disease Registry (ATSDR) is $11.1 billion. This total includes $5.1 billion in budget 

authority, $841 million from the Prevention and Public Health Fund, and $143 million in Public Health Service (PHS) Evaluation Funds. 

At this funding level, CDC will continue to protect the Nation and the world by: 

detecting, responding to, and stopping new and emerging health threats; preventing 

injuries, illness, and premature deaths; and discovering new ways to protect and improve the public’s health through science and advanced technology. The budget 

prioritizes funding for key areas where CDC can have the greatest impact, including: continuing the fight against opioid abuse, misuse, and overdose; supporting efforts to combat childhood obesity; protecting the Nation’s national security through 

medical countermeasure stockpiling; and investing in CDC’s infrastructure to ensure the safety, security, and productivity of CDC staff. 

The budget provides CDC with increased flexibility to allocate resources and implement policies that best support mission-critical activities based on current science 

and public health expertise. This programmatic flexibility will enable the CDC to 

focus on programs that have been proven effective, while reducing costs and improving the efficient use of resources. The budget establishes the new America’s Health 

Block Grant, reforming the model of existing State-based chronic disease programs 

to increase flexibility, allowing States to focus on leading public health challenges 

specific to their State. 

Question. Does it cut $850 million from the Food and Drug Administration and 

propose to replace this loss of budget authority with user fees? Under current law, 

user fees cannot currently be used to support public health work. Does this change 

under the administration’s budget? 

The FY 2018 budget requests a total program level of $5.1 billion to support 

FDA’s core mission to protect the Nation’s public health by enhancing the safety of 

food and ensuring the safety and effectiveness of medical products. FDA’s jurisdiction of products and activities is vast, ranging from analyzing the latest in medical 

technology to ensuring the safety of the Nation’s food supply. The challenge of ensuring the safety and effectiveness of these products increases in complexity within 

a growing global market. 

In a constrained budget environment, the budget acknowledges medical product 

industries have sufficiently matured to assume a greater share of costs associated 

with FDA’s administrative actions. User fees have been instrumental in allowing 

FDA to build capacity and improve the timeliness of the medical product review 

process without compromising the agency’s high standards. The FY 2018 President’s 

budget recalibrates FDA medical product user fees to over $2.5 billion in 2018, an 

76 

increase of $1.2 billion over the annualized CR level. The budget supports, through 

100-percent user fee funding, medical product review and approval activities associated with the prescription and generic drugs, biosimilar, medical device, and animal 

drugs programs, including operational and support costs associated with White Oak 

campus operations, rent payments to the General Services Administration, other 

commercial rent and rent-related charges, as well as anticipated FY 2018 inflation 

for rent costs. Legislative revisions will be needed for all of these programs to ensure continuity of review and approval activities. To support speeding patient access 

to safe and effective medical products, the budget also includes a portfolio of administrative actions to achieve regulatory efficiencies through program and process improvements. 

The FY 2018 budget request also includes reductions totaling $127.2 million in 

budget authority, targeted to certain areas where better tools and policies will allow 

FDA to do more with less, while preserving core mission activities. These reductions 

will be coupled with policy efforts to improve the efficiency of the programs that see 

reductions, to improve effectiveness and take a risk-based approach to FDA’s consumer protection mission. 

Question. Florida is relying on Medicaid to help prevent the spread of the Zika 

virus and treat those affected. With the broad Medicaid cuts outlined in both the 

administration’s budget and the House-passed health-care bill, the State of Florida 

will have to choose between prevention and treating those affected by an epidemic, 

continuing to serve seniors in nursing homes, and caring for Florida’s medically 

complex children. 

How would you recommend that States handle a public health threat like Zika, 

if their Medicaid funds are capped? 

Answer. Rigid and outdated Federal rules and requirements prevent States from 

pioneering delivery system reforms and from prioritizing Federal resources to their 

most vulnerable populations, which hurts access and health outcomes. The President’s budget will give States as much freedom as possible to design reforms that 

meet the spectrum of diverse needs of their Medicaid populations. 

The administration is committed to making sure that States have the flexibility 

to design their Medicaid programs to meet the needs of the most vulnerable in their 

State. By strengthening the Federal and State Medicaid partnership, we will empower States to develop innovative solutions to challenges like Zika, rather than 

telling States how they should run their programs. 

Question. The opioid crisis is devastating Florida and the rest of the Nation. Over 

2,500 Floridians died from opioids in the first half of 2016 alone. Yet the administration’s budget cuts over $600 billion from Medicaid, in addition to many of the 

cuts included in the House-passed health-care bill; cuts 9 percent from the Substance Abuse and Mental Health Services Administration; cuts $355 million from 

the National Institute of Mental Health; and cuts $235 million from the National 

Institute on Drug Abuse. 

During his campaign, President Trump promised to give people addicted to 

opioids access to the help they need. Given the cuts outlined above, how does the 

administration’s budget prioritize giving people with opioid addiction the help they 

need? 

Answer. (See answer provided below) 

Question. As the single largest payer for substance use services and treatments, 

Medicaid plays a critical role in the fight against the opioid epidemic. Changing the 

Medicaid program through block grants or caps, as the administration’s budget proposes, will shift costs to States, eliminate critical Federal protections, and hurt the 

more than 4 million Floridians who rely on the program, including those with opioid 

addiction. 

If these cuts are made, how do you propose States like Florida provide the necessary services to help individuals with substance use disorders? 

Answer. Addressing serious mental illness across our Nation and combating the 

opioid epidemic are two of the Department’s top priorities. The U.S. Department of 

Health and Human Services (HHS) is keenly aware of the devastating impact that 

opioid addiction is having on our families and communities. The administration is 

committed to doing all that we can to end the scourge of opioids that is sweeping 

across this Nation. 

77 

The administration is committed to bringing everything the Federal Government 

has to bear to address the health crisis opioids pose. The budget calls for $811 million in support of the five-pronged strategy guiding our Department’s efforts to fight 

this scourge: 

1. Improving access to prevention, treatment, and recovery services, including the 

full range of medication-assisted treatments; 

2. Targeting availability and distribution of overdose-reversing drugs; 

3. Strengthening our understanding of the crisis through better public health surveillance data and reporting; 

4. Providing support for cutting edge research on pain and addiction; and 

5. Advancing better practices for pain management. 

This funding increase will expand grants to Health Resources Services Administration (HRSA) Community Health Centers targeting substance abuse treatment 

services from $94 million to $144 million. Also within this total is $500 million for 

State Targeted Response to the Opioid Crisis Grants that were authorized in the 

21st Century Cures Act, which expand access to treatment for opioid addiction. 

Using evidence-based interventions, these grants will help to address the primary 

barriers preventing individuals from seeking and successfully completing treatment 

and achieving and sustaining recovery. 

One of the key pillars of our approach is improving access to treatment and recovery services, including medication-assisted treatment (MAT) with naltrexone, buprenorphine, or methadone. As mentioned above, through the State Targeted Response 

to the Opioid Crisis grants authorized in the 21st Century Cures Act, HHS is expanding access to opioid addiction treatment through evidence-based interventions, 

including MAT. We are targeting the primary barriers to seeking and successfully 

completing treatment and achieving and sustaining recovery. This funding is critical 

to reversing the opioid epidemic. 

The administration’s objective is ensuring all Americans have access to the best 

and highest quality coverage and care. Having coverage is not meaningful if one 

cannot access the care they need or the quality of care leaves them worse off—we 

must work toward both coverage and care. 

Question. I recently heard from a constituent whose son has Down Syndrome. 

After years of being on the Medicaid waiver list, he finally began receiving benefits. 

At this point, his life drastically changed for the better. He began to participate in 

an adult supervised day program. He receives transportation so that he can socialize 

with his peers. Overall, his quality of life has improved. 

Have you considered what a Medicaid cap or block grant would look like for this 

constituent and his family? Limiting State Medicaid funding will force States to 

limit eligibility and/or benefits, and create lengthy waiting lists for Floridians who 

are sick and/or disabled. What do I tell his parents when programs that improve 

their child’s quality of life are cut? What about all of the other Floridians who rely 

on Medicaid? 

Answer. The administration remains committed to ensuring that Medicaid is 

available for eligible beneficiaries, and working with States to ensure they are able 

to make the most use of available resources to serve their citizens. As you know 

Medicaid is the primary source of medical coverage for millions of low-income American families and persons with disabilities. However, its costs have been growing 

drastically without improvement in outcomes. 

The problem is not lack of funding; the problem is lack of flexibility. Rigid and 

outdated Federal rules and requirements prevent States from pioneering delivery 

system reforms and from prioritizing Federal resources to their most vulnerable 

populations, which hurts access and health outcomes. The administration is committed to giving States as much freedom as possible to design reforms that meet 

the spectrum of diverse needs of their Medicaid populations. 

Question. For 20 years, the Children’s Health Insurance Program (CHIP) has provided low-cost health coverage to children in families that earn too much money to 

qualify for Medicaid. 

The Medicaid and CHIP Payment and Access Commission (MACPAC) recommends a 5-year extension of CHIP funding through fiscal year 2022. MACPAC 

also recommends extending the enhanced 23-percentage-point Federal match and 

Maintenance of Effort requirement through fiscal year 2022. 

78 

At your confirmation hearing, you recommended an 8-year extension, as did CMS 

Administrator Verma. Despite its critical need, CHIP is extended for just 2 years 

in the administration’s budget. The budget proposes to end the enhanced 23-percent 

Federal match for States, as well as the Maintenance of Effort requirement. 

What is the rationale for attempting to disrupt a stable source of health coverage 

for 8.4 million children, including 375,000 in Florida? 

Answer. The budget proposes to extend funding for CHIP for 2 additional years 

through FY 2019. Extending CHIP funding for 2 years provides stability to States 

and families while the future of the program is addressed alongside other health 

reforms. This funding guarantees that the most vulnerable children will continue 

to have coverage. 

The budget also proposes a series of improvements that rebalance the StateFederal partnership and increase State flexibility. This proposal ends the 23- 

percentage point increase in the enhanced Federal match rate and the current law 

maintenance of effort requirement after FY 2017. The budget also proposes ending 

the Obamacare requirement for States to move certain children from CHIP into 

Medicaid and capping the level at which States could receive the CHIP enhanced 

Federal matching rate at 250 percent of the Federal Poverty Level. These provisions 

would return the focus of CHIP to the most vulnerable and low-income children. 

Question. ALS is a progressive neuromuscular disease that typically leads to 

death within 2 to 5 years of symptom onset. Studies by the National Institutes of 

Health (NIH) and Department of Defense (DOD) have documented that military veterans are about twice as likely to die from ALS. We know this because the National 

ALS Registry, housed at the CDC, analyzes information from the DOD, the Department of Veterans Affairs, NIH, and CMS, as well as from individuals living with 

ALS. 

The National ALS Registry is a critical resource for (1) providing data to researchers focused on developing treatments and prevention strategies; and (2) matching 

patients to potential clinical trials. Unfortunately, the administration’s budget called 

for the elimination of the National ALS Registry. 

I’m concerned that if funding for the National ALS Registry were eliminated, people living with ALS would lose their opportunity to be contacted directly for a wide 

range of clinical trials and other important research. Moreover, public and private 

researchers would lose their access to the unique data and patients needed to drive 

understanding of the disease and development of therapies. 

Do you think we should keep this unique and valuable resource that researchers 

and patients rely on? 

Answer. In a constrained budget environment, difficult funding decisions must be 

made to ensure that HHS invests in activities that are core to its mission and not 

duplicative of other efforts across the Federal Government. NIH-funded research on 

ALS will continue, and external researchers may still use biospecimens previously 

obtained from the ALS biorepository. 

Question. The Pandemic and All Hazards Preparedness Act (PAHPA) created the 

office of the Assistant Secretary for Preparedness and Response—a leader in preventing and responding to public health emergencies like the Zika virus. Unfortunately, the administration’s budget cuts $25 million from this critical office and 

many other programs that are critical to our Nation’s public health emergency preparedness. 

How do you intend to use lessons learned from past public health emergencies, 

like Hurricane Matthew, Ebola, and now the Zika virus, to improve coordination 

and communication among Federal agencies involved in emergency preparedness? 

Answer. Incorporating lessons learned into policies, plans, and procedures is a 

vital component of emergency preparedness. It ensures that issues identified in past 

events do not reoccur during future responses. ASPR is continually evaluating its 

responses to public health and medical events, developing lessons learned, and implementing actions to improve coordination and communication. Such lessons are 

also provided to emergency response planners and are incorporated into future exercises and responses. Lessons learned from past natural hazard incidents and disease 

outbreaks such as Hurricane Matthew, Zika, and Ebola, guide strategies for improvement throughout the Department, including information sharing; intra/interagency coordination; State, local, tribal, and territorial coordination; and the management of public health and medical assets. 

79 

Following the Ebola response, HHS initiated and participated in a number of actions to improve interagency coordination. For instance, we recognized a need to 

codify how infectious disease emergencies are managed under the National Response Framework (NRF). This was accomplished through significant updates and 

alignment of the Biological Incident Annex (BIA) to the NRF. The BIA now provides 

the overarching framework under which the interagency (the Federal executive departments and agencies) organizes and coordinates. This includes identifying the 

thresholds for triggering such coordination, particularly for a high-consequence 

event/threat. The final draft BIA was approved by the interagency Domestic Resilience Group (DRG), which was convened by the White House in January 2017. 

In addition, HHS has collaborated with the Department of Defense (DoD) to leverage their Interagency Transportation Support Framework (ITSF) Concept of Operations (CONOPS), which is an agreement between HHS and DoD (NORTHCOM) to 

facilitate the rapid airlift of personnel and equipment during a domestic response. 

This new ITSF CONOPS (post-Haiti response) allows HHS to request DoD airlift 

much faster than previous responses because HHS personnel and equipment are 

now planned and integrated into DoD transportation (airlift) systems prior to a response. 

Building on lessons learned during the Ebola response, early in the Zika outbreak, 

ASPR convened partners in HHS and across the U.S. Government with a goal of 

sharing information about the supply chain and planned procurements of Zika insecticide, traps, and repellents. In each of those working groups, members determined how to coordinate to make the desired products more readily available to the 

private sector and non-Federal government partners. ASPR is now developing a formalized mechanism for coordination of purchases with the Critical Infrastructure 

Partnership Advisory Council. 

Another example of using lessons learned from Ebola is the approach taken for 

planning during the initial stages of the Zika outbreak. HHS, led by ASPR and 

CDC, has developed a draft Federal operational plan that builds on the HHS Zika 

Virus Disease Preparedness and Response Goals and Objectives. The Zika planning 

construct displays the connections and relationships between the HHS-led Zika 

plans and other planning efforts. The U.S. Government Zika Virus Disease Contingency Response Plan describes the Unified Coordination Group’s operational coordination and synchronization, as well as the steps necessary among Federal agency 

partners and State representatives to assist HHS in response activities. In the event 

of a large scale Federal response where the impact of a particular incident overwhelms State and local resources or the lead Federal agency, HHS would determine 

whether interagency support is or will be required. 

Finally, the Department has utilized the lessons learned from the 2009/2010 pandemic experience and other public health responses to ensure that the Department 

is better prepared for the next pandemic influenza incident. The Department recently published its 2017 update to its Pandemic Influenza Plan. Originally adopted 

in 2005 and last updated in January 2009, the 2017 Pandemic Influenza Plan Update applies the public health lessons learned since January 2009. 

QUESTIONS SUBMITTED BY HON. ROBERT MENENDEZ

AUTISM CARES ACT PROGRAMS

Question. The Autism CARES Act of 2014, which I authored and which was 

passed unanimously by Congress, reauthorized Federal autism programs through 

fiscal year 2019. These programs include training programs, research, and State 

systems grants. The proposed budget eliminates all funding for these programs, despite the well-recognized and growing need for the services they facilitate. 

The Leadership Education in Neurodevelopmental and Related Disabilities 

(LEND) program supports the interdisciplinary training of graduate-level professionals in improving the quality of care to fit the unique needs of young people with 

disabilities. This program currently funds 52 projects in 44 States across the country, including at Rutgers University in my home State of New Jersey. Collectively, 

these projects share information with each other as part of a national network. Does 

the department believe that supporting the training of professionals to provide care 

for people with autism and other disabilities is no longer a Federal responsibility? 

Answer. The President’s budget prioritizes programs that support direct healthcare services and give States and communities the flexibility to meet local needs. 

80 

Some of these activities could be continued by States using their Maternal and 

Child Health Block Grant awards. 

Question. The Interdisciplinary Technical Assistance Center (ITAC), authorized by 

the Autism CARES Act, provides technical assistance to LEND programs and Developmental-Behavioral Pediatrics (DBP) programs and helps to coordinate activities at 

programs that receive funding as a result of the Autism CARES Act. Do you believe 

that funding the coordination and sharing of information between LEND and DBP 

programs is no longer a Federal priority? 

Answer. The President’s budget prioritizes programs that support direct healthcare services and give States and communities the flexibility to meet local needs. 

Some of these activities could be continued by States using their Maternal and 

Child Health Block Grant awards. 

Question. The fiscal year 2018 HHS budget justification for Autism CARES Act 

programs States, ‘‘The budget prioritizes programs that support direct health-care 

services and give States and communities the flexibility to meet local needs.’’ Do you 

believe that the challenges that a person with autism faces are any less a priority 

based on if they live in a specific State or community? 

Answer. The President’s budget continues support for programs, such as the Maternal and Child Health Block Grant, which enable States and communities to determine how to best support training of professionals to provide care for people with 

autism and other disabilities in their State. 

SUPPORTING DIVERSITY IN THE HEALTH PROFESSIONS

Question. The FY18 proposed budget eliminates funding for programs such as the 

Health Careers Opportunity Program, Centers of Excellence, and Scholarships for 

Disadvantaged Students. These programs have collectively assisted in the education 

and training of tens of thousands of health-care professionals from underrepresented minority populations. 

Federal programs that provide funding to facilitate the education and training of 

under-represented minorities in the health professions have historically been shown 

to have increased the number of health-care professionals willing to practice in 

medically underserved areas. The fiscal year 2018 HHS budget justification for 

these programs states that the budget is prioritizing funding for clinicians who 

serve ‘‘in areas of the United States where there is a shortage of health professionals.’’ Aren’t medically underserved areas by definition suffering from a shortage 

of health professionals? 

Answer. The budget prioritizes funding for training and education programs that 

include a service obligation which ensures that clinicians are serving these medically underserved communities. The budget’s investment in scholarships and loan 

repayment programs ensures a direct impact on the provision of services in areas 

experiencing shortages of providers. 

In addition, the budget also proposes funding for the Teaching Health Center 

Graduate Medical Education (THCGME) program in which approximately 77 percent of residents received training in medically underserved communities and approximately 23 percent of residents reported coming from a financially or educationally disadvantaged background, characteristics which are both correlated with likelihood of practicing in underserved areas. In fact, 50 percent of THCGME residents 

report that they intend to practice in a medically underserved and/or rural area. 

Question. The Association of American Medical Colleges released a survey in 2016 

on diversity in medical education. In 2015, over 51 percent of matriculating students 

at medical colleges who were black or African-American reported that they were 

planning on practicing primarily in a medically underserved area. Over 39 percent 

of Hispanic or Latino students, 37 percent of American Indian or Alaska Native students, and over 34 percent of Native Hawaiian or other Pacific Islander students 

reported the same. This compares to 22 percent of white and Asian students, who 

together comprise 71 percent of all matriculating students at U.S. medical colleges. 

In the absence of Federal programs whose primary goal is to assist underrepresented minority populations achieve careers in the health professions, how 

does the Department intend on addressing the needs of medically underserved 

areas, some of which have to do with cultural competency? 

Answer. HRSA’s key loan repayment and scholarship programs, the National 

Health Service Corps (NHSC) and NURSE Corps, improve the health of the Nation’s 

underserved by recruiting and retaining health-care providers to serve in health 

81 

6Sebastian Negrusa, Projesh Ghosh, and John T. Warner. ‘‘Provider Retention in High Need 

Areas.’’ Prepared for Assistant Secretary for Planning and Evaluation. Submitted by The Lewin 

Group, Inc. December 22, 2014. https://aspe.hhs.gov/report/provider-retention-high-need-areas. 7 Bhatavadekar, N.B., R.G. Rozier, et al. (2011). ‘‘Holding up the oral health safety net: the 

role of National Health Service Corps alumni dentists in North Carolina.’’ Int. Dent. J. 61(3): 

136–43. https://www.ncbi.nlm.nih.gov/pubmed/21692784. 8Porterfield, D.S., T.R. Konrad, et al. (2003). ‘‘Caring for the underserved: current practice of 

alumni of the National Health Service Corps.’’ J. Health Care Poor Underserved 14(2): 256–71. 

https://www.ncbi.nlm.nih.gov/pubmed/12739304. 9Probst, J.C., M.E. Samuels, et al. (2003). ‘‘The National Health Service Corps and Medicaid 

inpatient care: experience in a southern State.’’ South. Med. J. 96(8): 775–83. https:// 

www.ncbi.nlm.nih.gov/pubmed/14515918. 

professional shortage areas. These programs tend to attract higher percentages of 

health professions students and clinicians who are underrepresented minorities and 

from rural and disadvantaged backgrounds relative to the broader health workforce. 

Diversity Among Physicians, Dentists, and Nurse Practitioners Within the NHSC as 

Compared to the National Workforce 

African 

American 

Hispanic/ 

Latino(a) 

American 

Indian/Alaskan 

Native 

Total NHSC Field 13.5% 12.2% 2.6% 

MD/DO 

NHSC 17.2% 18.1% 1.3% 

National 4.1% 4.4% 0.4% 

DDS 

NHSC 15.2% 14.0% 1.7% 

National 2.9% 8.1% --- 

NP 

NHSC 17.6% 7.4% 2.9% 

National 8.2% 2.5% --- 

NHSC providers have higher retention in poorer and less educated communities, 

where participants select into Health Professional Shortage Areas based on their 

preferences for serving underserved populations.6 Former NHSC participants also 

are more likely than non-participants to serve low-income patients—they tend to 

have high levels of Medicaid participation, practice in community health centers, 

and locate in areas with a health professional shortage (and counties with high percentages of minorities and people living in poverty).7, 8, 9

Diversity Among Registered Nurses, Nurse Faculty, and Nurse Practitioners Within the 

NURSE Corps (NC) as Compared to the National Workforce 

African 

American 

Hispanic/ 

Latino(a) Asian 

American 

Indian/ 

N. Hawaiian 

Total NC Field 16% 6% 5% 2.7% 

Registered Nurse 

NC 17.6% 7% 5.5% 3.5% 

National 12.2% 6.6% 8.7% N/A 

Nurse Faculty 

NC 15.3% 3.4% 2% .9% 

National 7% 3% 2% .6% 

Nurse Practitioner 

NC 14.6% 6.1% 5.5% 2.7% 

National 6.0% 3.0% 1.0% N/A 

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10See: https://nces.ed.gov/fastfacts/display.asp?id=31. 

Question. The budget justification for the Scholarships for Disadvantaged Students Program argues that students from disadvantaged backgrounds could simply 

seek assistance from ‘‘private and non-profit scholarships and other Federal loan 

programs that support student education.’’ Such a justification seems to simply disregard the significant institutional barriers that people of color and people from disadvantaged backgrounds face as they seek to achieve success. According to HHS’s 

own data, 65 percent of students with SDS scholarships during fiscal year 2015 

were members of under-represented minority groups. What proportion of the students currently served by SDS do you believe would receive assistance by other 

means? 

Answer. Grants and loans are the major forms of Federal financial aid for degree/ 

certificate-seeking undergraduate students, including students from disadvantaged 

backgrounds. The largest Federal grant program available to undergraduate students is the Pell Grant program. In order to qualify for a Pell Grant, a student must 

demonstrate financial need. Federal loans, on the other hand, are available to all 

students. In addition to Federal financial aid, grants from State and local governments, institutions, and private sources are available, as are private loans. There 

are also Parent Loans for Undergraduate Students (PLUS) and other loans made 

directly to parents. The Department of Education offers assistance in finding and 

applying to private and Federal scholarship and loan opportunities here: https:// 

studentaid.ed.gov/sa/types. 

While the administration defers to Department of Education about the specifics 

for under-represented minorities, 86 percent of first-time, full-time degree/certificate-seeking undergraduate students were awarded financial aid in academic year 

2014–2015 at 4-year degree-granting postsecondary institutions.10

CHILDREN’S HEALTH INSURANCE PROGRAM

Question. The FY18 proposed budget makes several changes to the Children’s 

Health Insurance Program that stand to increase costs to States and put healthcare coverage for some of our most vulnerable citizens—our children—at risk. These 

proposals include ending the 23 percentage point increase in the enhanced Federal 

match rate for CHIP funding, ending the maintenance of effort provision that requires States to maintain their eligibility levels and prevents States from imposing 

more restrictive standards for eligibility or enrollment, and for the first time imposing a cap on the enhanced Federal match rate at 250 percent of the Federal poverty 

level. 

New Jersey currently allows for enrollment in CHIP for children in families whose 

income does not exceed 355 percent of the Federal poverty level. Analysis by New 

Jersey Policy Perspective suggests that a cap on the enhanced Federal match rate 

would threaten the health-care coverage of 35,000 children in New Jersey. The Department’s proposal would weaken the flexibility that high-cost States like New Jersey have used to increase eligibility levels to fit their State’s needs. How does the 

Department expect high-cost States like New Jersey to continue to provide care to 

those that it has decided should be eligible for it? 

Should the maintenance of effort provision, which does not expire until the end 

of fiscal year 2019, be ended early by congressional action, which States do you expect will enact policies that will restrict eligibility levels for CHIP or create new 

burdens to enrollment in CHIP? 

Answer. The 2-year extension included in the budget provides budgetary stability 

and additional flexibility to States while focusing the program on lower-income families. The budget would allow States the flexibility to set eligibility levels and features of their CHIP programs that reflect individual State needs and populations. 

This 2-year extension would provide stability during the period of health system reforms, including the implementation of the Medicaid reforms and new flexibilities 

for States. 

CENTERS FOR DISEASE CONTROL AND PREVENTION

Question. The FY18 proposed budget makes deep cuts to a variety of programs 

at the CDC, at a time when our Nation continues to face significant public health 

challenges. This includes the elimination of several vital programs that have made 

a positive contribution to public health. 

83 

The FY18 budget request reduces funding for Public Health Preparedness and Response by $136.3 million. The budget justification States that resources will be directed to the States with the ‘‘greatest need.’’ In FY16, New Jersey received more 

than $20 million in funding through the Public Health Emergency Preparedness, 

Public Health Preparedness and Response, and Hospital Preparedness Programs, including funding for the public health response to the Zika virus. In FY15, New Jersey received more than $25 million through these programs to assist in the response 

to the Ebola virus. How do you define ‘‘greatest need?’’ How would the Department 

determine what States are prioritized at the expense of others? 

Answer. The FY 2018 President’s budget restructures HHS preparedness grants 

to direct resources to States with the greatest need and to provide more innovative 

approaches. As outlined in the proposed FY 2018 budget, the Public Health Emergency Preparedness (PHEP) cooperative agreement will gain efficiencies, address 

gaps, and incentivize innovation by incorporating a competitive and risk-based component. 

The PHEP program works to protect the health and safety of the population during a public health event or emergency. Therefore, the historical risk component is 

a population-based formula and is intended to direct more resources to those jurisdictions with higher populations. The proposed new funding formula is not yet final; 

however, all current 62 PHEP award recipients will continue to receive funding to 

ensure some level of sustainability and maintenance of public health preparedness 

and response capacity and capability. 

MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING PROGRAM

Question. The Maternal, Infant, and Early Childhood Home Visiting (MIECHV) 

program has been incredibly successful since I successfully incorporated it as part 

of the Affordable Care Act in 2010. Through this program, nurses, social workers, 

or other professionals visit at-risk families in their homes to evaluate their living 

situation and provide information on resources available to improve the health, educational, and economic opportunities for at-risk children. These resources include 

services such as health care, early education, parenting skills, child abuse prevention, and nutrition education or assistance. Nearly 1 million home visits were made 

to over 160,000 program participants as a result of this program in FY16. 

I am pleased that the Department supports the continuation of this program, 

which is set to expire at the end of the current fiscal year. However, I am concerned 

that the Department’s budget request asks only for funding to continue through fiscal year 2019. Is it the stated policy of the Department to allow the MIECHV program to expire at the end of fiscal year 2019? 

Answer. The Maternal, Infant, and Early Childhood Home Visiting program is one 

of five HRSA programs that is funded through FY 2017 under the Medicare Access 

and CHIP Reauthorization Act of 2015 (MACRA). The FY 2018 President’s budget 

requests 2-year funding for Fiscal Years 2018 and 2019 for Home Visiting and the 

other four MACRA-funded programs—Health Centers, the National Health Service 

Corps, Teaching Health Center Graduate Medical Education, and Family-to-Family 

Health Information Centers. Funding decisions for resources beyond FY 2019 will 

be decided in future year budgets. 

QUESTIONS SUBMITTED BY HON. THOMAS R. CARPER

Question. I understand that reducing childhood obesity and opioid addiction are 

two of your top priorities as the Secretary of the Health and Human Services Department. Is that right? Can you discuss your efforts to address these two critical 

challenges facing our country? What is your strategy for reducing obesity among our 

youngest children when the budget eliminated $4 million for the early child care 

obesity program, which has reduced childhood obesity rates in 10 States? 

Answer. Reducing childhood obesity and opioid addiction are critical priorities for 

HHS, along with addressing serious mental illness. 

The FY 2018 President’s budget calls for $811 million in support of the fivepronged strategy guiding the Department’s efforts to reduce opioid misuse and 

abuse: 

• Improving access to prevention, treatment, and recovery services, including the 

full range of medication-assisted treatment; 

84 

• Promoting targeted availability and distribution of overdose-reversing drugs; 

• Strengthening our understanding of the epidemic through better public health 

surveillance; 

• Providing support for cutting edge research on pain and addiction; and 

• Advancing better practices for pain management. 

This funding increase will expand grants to Health Resources Services Administration (HRSA) Community Health Centers targeting substance abuse treatment 

services from $94 million to $144 million. Also within this total is $500 million for 

State Targeted Response to the Opioid Crisis Grants that were authorized in the 

21st Century Cures Act, which expand access to treatment for opioid addiction. 

Using evidence-based interventions, these grants will help to address the primary 

barriers preventing individuals from seeking and successfully completing treatment 

and achieving and sustaining recovery. 

CDC’s activities are focused on equipping States with resources and scientific expertise to address opioid overdose. Some examples of State activities include maximizing the use of prescription drug monitoring programs (PDMPs), linking across 

sectors including public health, public safety, and treatment, and the analysis of 

State-level policies to evaluate efficacy and inform strategies that can be scaled up 

across States. CDC is also working to improve opioid overdose data, by making it 

more timely and higher quality. The better we understand the opioids problem, the 

better we can respond to it—on the national, State, and local levels. 

With respect to childhood obesity, approximately 12 million children in the United 

States are obese, putting them at increased risk for serious and costly health and 

social consequences. A two-pronged approach is needed to: (1) prevent obesity for 

children by achieving and maintaining a healthy weight, and (2) treat the millions 

of children struggling with obesity. 

Preventing obesity requires addressing a number of specific risk factors including 

poor nutrition, low levels of physical activity, inadequate sleep, and sedentary behaviors. The National Academies recommend that nutrition and physical activity 

interventions occur in the places where children spend their time. HHS grantees, 

therefore, address these risk factors through supporting providers and families in 

key community settings where children learn, live, and play through data, resources, and training including: community settings, schools, and early care and 

education settings. 

Question. I believe we both share the goal of ensuring that Medicare is an efficient 

and effective payer and that it derives the greatest value that it can for both patients and taxpayers. I have heard from various parties that outcomes-based contracts can help drive our system from fee-for-service to value-based. However, I understand that there are several regulatory barriers in place, including Medicaid Best 

Price, that are serving as deterrents to our fully being able to realize the potential 

of these types of value-based arrangements. Can I count on you and others in the 

administration to seek to address these regulatory barriers? 

Answer. (See response below.) 

Question. Today, we stand on the cusp of very exciting developments in biomedical 

science, including but not limited to cell and gene therapies. However, as we have 

seen great advances in science, Medicare and Medicaid have lagged in appropriately 

reimbursing these technologies. What changes to our public payer systems would 

you suggest to ensure that this innovation continue and that these technologies are 

both recognized and appropriately reimbursed? 

Answer. HHS is committed to achieving the President’s goal of eliminating barriers to innovation, whether through regulatory relief or other actions to spur innovation on behalf of patients. The administration has included as part of this budget 

a set of actions to provide regulatory relief to the industry and speed the development of safe and effective medical products. 

Question. I have heard from insurers that the continuous coverage requirement 

in the American Health Care Act will not be an adequate replacement for the individual mandate. Some of my Republican colleagues have pointed to the autoenrollment individuals into health insurance plans as another way to ensure that 

insurers have adequate risk pools to spread risk and restrain premiums. From your 

perspective, what are the pros and cons of continuous coverage and auto-enrollment? 

85 

Answer. The individual mandate has not worked and millions of Americans are 

not buying into the notion of Washington-controlled health care. In January 2017, 

the IRS reported that around 6.5 million Americans paid $3 billion in penalties to 

the IRS rather than buy unaffordable Obamacare plans in 2015. Americans should 

have the freedom to make the decisions that are right for them and their families, 

and should have more choices and access to the health care they want and deserve. 

Obamacare is failing the American people, delivering high costs, few options, and 

broken promises. The administration has supported legislation including the Housepassed AHCA that replaced the failing individual mandate with policies that encouraged continuous coverage. The devastating effects of Obamacare go beyond the 

flawed individual mandate. If we do not act, many more Americans could lose access 

to care. 

The administration is taking steps to increase patient choice and provide greater 

flexibility for issuers to help attract healthy consumers, with the aim of improving 

the risk pool and bringing stability to the individual and small group markets. On 

April 13, 2017, CMS finalized the Market Stabilization rule, which includes policies 

to ease issuer burden and provide States with greater flexibility. 

Question. Last year, 60,000 Americans died from a drug overdose. Drug addictions 

are now the leading cause of death among Americans under 50. As you have held 

listening sessions on the opioid epidemic around the country, what are the most important recommendations that Congress and the Federal Government should heed? 

Last month, Senator Portman and I held a hearing on the opioid and drug addiction 

crisis ravaging our country. Our second panel included a police chief and a medical 

examiner from Ohio, a physician from Delaware, and Michael Botticelli, the drug 

czar in the Obama administration. Every one of them expressed concerns that the 

AHCA’s $800 billion dollar cut to Medicaid would decimate their efforts to stem the 

opioid addiction epidemic. How many of the experts and patients that you have 

heard from have encouraged you to reduce Medicaid coverage or to eliminate private 

health insurance protections that guarantee coverage for drug addiction treatment? 

If you have received those types of recommendations, please share those suggestions 

with me and the other members of this committee in writing. 

Answer. The U.S. Department of Health and Human Services (HHS) is keenly 

aware of the devastating impact that opioid addiction is having on our families and 

communities. The administration is committed to doing all that we can to end the 

scourge of opioids that is sweeping across this Nation. 

The administration is committed to bringing everything the Federal Government 

has to bear to address the health crisis opioids pose. The budget calls for $811 million in support of the five-pronged strategy guiding our Department’s efforts to fight 

this scourge: 

1. Improving access to prevention, treatment, and recovery services, including the 

full range of medication-assisted treatments; 

2. Targeting availability and distribution of overdose-reversing drugs; 

3. Strengthening our understanding of the crisis through better public health surveillance data and reporting; 

4. Providing support for cutting edge research on pain and addiction; and 

5. Advancing better practices for pain management. 

This funding increase will expand grants to Health Resources Services Administration (HRSA) Community Health Centers targeting substance abuse treatment 

services from $94 million to $144 million. Also within this total is $500 million for 

State Targeted Response to the Opioid Crisis Grants that were authorized in the 

21st Century Cures Act, which expand access to treatment for opioid addiction. 

Using evidence-based interventions, these grants will help to address the primary 

barriers preventing individuals from seeking and successfully completing treatment 

and achieving and sustaining recovery. 

One of the key pillars of our approach is improving access to treatment and recovery services, including medication-assisted treatment (MAT) with naltrexone, buprenorphine, or methadone. As mentioned above, through the State Targeted Response 

to the Opioid Crisis grants authorized in the 21st Century Cures Act, HHS is expanding access to opioid addiction treatment through evidence-based interventions, 

including MAT. We are targeting the primary barriers to seeking and successfully 

completing treatment and achieving and sustaining recovery. This funding is critical 

to reversing the opioid epidemic. 

86 

We will continue to explore additional opportunities for States to provide a full 

continuum of care for people struggling with addiction and develop a more streamlined approach for section 1115 substance abuse treatment demonstrations. We look 

forward to building upon initial efforts, including previous collaborations, amongst 

the States. 

Question. Our Republican colleagues are working behind closed doors with no public hearings, discussion, or transparency to pass a health-care bill that, according 

to the Congressional Budget Office, cuts funding to Medicaid by more than $800 billion over 10 years and requires seniors to endure an 800 percent increase in their 

health insurance premiums. CBO found that the House Republicans’ health-care bill 

would create unstable health insurance markets in a sixth of the country where 

sicker Americans would be priced out of insurance coverage. Maternity care and 

substance abuse treatment would become unaffordable for many lower-income 

Americans. President Trump has said that his health-care plan will result in ‘‘insurance for everybody’’ with ‘‘much better health care . . . at much less money.’’ Can 

you explain how unaffordable maternity care and substance abuse treatment meets 

the standard of ‘‘much better health care’’ for ‘‘less money’’? 

Answer. President Trump is committed to signing a bill into law that will provide 

all Americans access to quality, affordable health-care coverage, and will provide individuals and families tools to choose the coverage that best meets their needs. 

Question. You rightly noted when we first met that the cost-sharing reduction 

payments are the most important issue for health insurers deciding whether to remain on the health insurance marketplaces. Do you think that cost-sharing reduction payments will remain in place through 2018? What have you recommended to 

President Trump regarding the cost-sharing reduction payments? 

Answer. (See response below.) 

Question. Does the President understand that his threats to discontinue the costsharing reduction payments has forced insurers to exit some insurance marketplaces or increased premiums by as much as 20 percent? What was the President’s 

response to your recommendations? 

Answer. The administration has emphasized the importance of reforming our 

health-care system to one that works better for patients and their providers. Our 

budget calls for Congress to repeal and replace the Affordable Care Act. In the interim, we are evaluating policy options to relieve American’s from Obamacare’s burdensome mandates and to restore choice and competition to the individual and 

small group markets, increasing availability of health insurance options so that all 

Americans can purchase coverage that meets their needs. 

Question. The President has said repeatedly he wants to force Democrats to the 

table on health-care reform. That’s a ridiculous statement. I, and every Democrat 

I know, have been at the table since before the ACA was passed, getting stood up 

for the last 8 years. To your knowledge, has the President ever called or spoken to 

a Democratic member of Congress, on the House or the Senate, about a bipartisan 

path forward to improve our health-care system? Since your confirmation, how 

many substantive conversations have you had with a Democrat in Congress about 

improving the individual health insurance market and Medicaid? 

Answer. Obamacare is failing the American people, and it’s devastating effects are 

more apparent every day. The administration is eager to work with Congress—Republicans and Democrats—to rescue Americans from the failures of the Obamacare. 

QUESTIONS SUBMITTED BY HON. SHERROD BROWN

NATIONAL INSTITUTES OF HEALTH (NIH) TOTAL BUDGET

Question. In your recent testimony before the House Energy and Commerce Committee, you praised the ‘‘incredibly important’’ work of the NIH. As a physician, you 

can appreciate the value of basic biomedical research leading to the development of 

novel medications and discovery of new medical procedures, both with the support 

of NIH funding, which lead to advances in patient outcomes and survival. 

On June 6th, President Trump publically announced that he planned to keep Dr. 

Francis Collins as the director of the NIH. Just last year, Dr. Collins asked for 

$33.136 billion for FY17, and in fact, the Presidential budget request for NIH has 

87 

not been below the President Trumps FY18 ask of $26.92 billion since FY 2002. 

That is almost two decades. 

Based on your supportive stance on the NIH and the history of the NIH budget 

request, can you please explain why you think a 22 percent cut in the NIH budget 

from FY17 to FY18 is even feasible? 

Answer. The FY 2018 budget presents an opportunity for HHS and NIH to reexamine how to optimize Federal investment in a way that best serves the American 

people. This policy will enhance the stewardship of taxpayer dollars by focusing our 

resources on innovative scientific research. The Department assessed opportunities 

within the NIH to determine where greater efficiencies may be possible. 

Additionally, the administration will propose a package of reforms to streamline 

Federal compliance requirements and reduce burden on NIH grantees. These targeted policies will reduce the time and expenses that grantees must currently spend 

to comply with overly burdensome Federal grant requirements, thus lowering grantees’ administrative costs and mitigating the impact of lower reimbursements. The 

approach will also seek to develop a uniform indirect cost rate to all grants that 

mitigates the risk for fraud and abuse by simplifying and uniformly applying the 

rate for grantees. 

Question. A cut of this magnitude will greatly impact the United States’ seniority 

and leadership in biomedical and clinical research. I have heard repeatedly from 

constituents who remind me that research projects are not conducted in just a few 

months; clinical trials are not completed within one calendar year. The extreme fluctuations in funding levels suggested by this budget will drive American research 

progress to a halt. But the impact of such a cut goes beyond the research. NIH funding supports nearly 17,000 jobs in Ohio. At a recent House Energy and Commerce 

hearing, Representative Nita Lowey cited that the proposed NIH cuts would result 

in up to 8,000 fewer grants awarded, and decimate the economy by eliminating 

90,000 jobs at medical institutions across the country. 

Do you envision that adoption of the President’s budget will have no economic impact? 

How do you envision such a dramatic budget cut to the NIH will not yield widespread scientific and economic impacts across this country? 

Answer. Thank you for recognizing both the long arc of research and the economic 

value of NIH investments. The Department supports the administration’s agenda of 

creating a more effective and efficient government and to support economic growth. 

The FY 2018 budget presents an opportunity for HHS and NIH to reexamine how 

to optimize Federal investment in a way that best serves the American people. 

These changes will enhance the stewardship of taxpayer dollars by focusing our resources on innovative scientific research rather than administrative and overhead 

costs. 

INDIRECT COSTS

Question. In your March testimony before the House Energy and Commerce Committee, you commented that the facilities and administration, or indirect costs, covered by NIH grants are ‘‘inefficiencies.’’ These ‘‘inefficiencies’’ include essentials like 

the facilities where research is conducted, utilities that keep freezers and incubators 

on, and the staff that manage the grants and keep the research enterprise running. 

Currently, research grants awarded to your former employer, Emory University, put 

aside approximately 35 percent towards these indirect costs. 

One argument I have heard is that many private foundations offer research 

grants with only 10 percent set aside to cover indirect costs. NIH Director Dr. Collins commented on this in his recent testimony before the House Appropriations 

Labor, HHS-Education Subcommittee, noting that universities are only able to accept grants with these lower indirect cost rates because of the support they already 

receive from the NIH. He stated that even NIH grants are not sufficient for covering 

all indirect costs associated with research projects. Dr. Collins warned that if NIH 

grants dropped indirect cost rates to 10 percent, many small- to mid-sized universities, especially State schools, would no longer be able to afford NIH-funded research. 

If you reduce indirect costs to a cap of 10 percent, how do you expect a medical 

institution of any size to pick up the slack overnight? Will it be in decreasing the 

number of staff? Number of medical and graduate students? Number of patients the 

hospital can take? Increasing tuition? 

88 

Answer. The effect on grantees will vary by institution, depending on the current 

indirect cost rate and a variety of other factors. The impact will likely be greater 

on institutions that have a higher percentage of NIH funding compared to total 

funding, or a lower ability to cover indirect costs from other sources (e.g., donations, 

endowment income, State government, tuition). The Department continues to work 

on specific details of the NIH indirect cost policy for FY 2018 and will assess the 

impact on grantees once the policy is finalized. 

THE PUBLIC-PRIVATE PARTNERSHIP

Question. Secretary Price, in your nomination hearing QFR responses, you stated 

that the ‘‘NIH plays a leading role in so many public-private initiatives’’ and that 

you are ‘‘. . . keenly aware of the progress that has been made and still to be made 

through important research initiatives that are fully or partially funded by the Federal Government.’’ 

I agree that partnerships between academia and the private sector are important, 

especially for the efficient translation of new research into cures and treatments for 

patients. I also want to enforce that relying on private funding to cover differences 

imposed by NIH budget cuts is not a feasible option. In that same House Appropriations Labor, HHS-Education Subcommittee hearing last month, Dr. Collins commented on a recent meeting in the White House, involving biotech CEOs and academic scientists and their descriptions of public-private partnerships. Dr. Collins reflected that the biotech leaders ‘‘were quite clear . . . that their stockholders would 

not necessarily appreciate their putting money into things that are not directly connected to a product.’’ 

What are concrete examples that you can offer to medical schools on how they 

can ‘‘cut corners’’ when they lose 20+ percent of an NIH grant based on this proposed budget? 

How do you expect the United States to maintain its role as a leader in innovation 

in biomedical research and patient care under these proposed cuts? 

Answer. Working with industry is a powerful tool to improving the health of our 

Nation and our economy. Officials from across the U.S. Department of Health and 

Human Services (HHS), including leadership of the NIH and FDA, have begun discussions with pharmaceutical companies about developing non-addictive pain medications and new formulations of opioid antidotes. The United States is a leader in 

biomedical research due, in no small part, to our ability to marshal the strengths 

of the public and private sectors to address the health-care needs of America. HHS 

is not currently involved in the budgetary decisions made by medical schools and 

will continue to defer to medical schools to determine future investment strategies. 

Additionally, the FY 2018 President’s budget presents an opportunity for HHS 

and NIH to reexamine how to optimize Federal investments in a way that best 

serves the American people. The FY 2018 request changes the reimbursement of indirect costs for NIH grants, which will be capped as a percentage of total research, 

in order to better target available funding toward high priority research. In addition, Federal research requirements for grantees will be streamlined to reduce 

grantee burden through targeted approaches as proposed by NIH. HHS is working 

with NIH to identify strategies to streamline processes and increase efficiencies, including reforming policies to release grantees from the costly and time-consuming 

indirect rate setting process and reporting requirements. These targeted policies will 

reduce the time and expenses that grantees must currently spend to comply with 

overly burdensome Federal grant requirements, thus lowering grantees’ indirect 

costs and mitigating the impact of lower reimbursements. 

LOW-INCOME HEATING ASSISTANCE PROGRAM (LIHEAP)

Question. During your nomination process, I submitted two QFRs about the LowIncome Heating Assistance Program (LIHEAP). I want to share my questions and 

your answers with you again in light of the new FY18 budget proposal, and then 

re-phrase my question to you. 

As you may know, the LIHEAP program plays a key role in helping low-income 

families stay warm in the winter and avoid dangerous heat in the summer. It is 

a program that is critical to nearly 450,000 households in Ohio that otherwise would 

be forced to choose between keeping warm or going hungry. 

If confirmed, will you commit to maintaining the program as currently structured? 

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Answer. If I am confirmed, I will implement the program dutifully in as effective 

and efficient manner as possible. 

Question. Nationwide, nearly 7 million of our Nation’s poorest and most vulnerable households rely on the program. Will you commit to maintaining and possibly 

even supporting an increase in the program’s annual appropriation? 

Answer. If I am confirmed, I will implement the program dutifully in as effective 

and efficient manner as possible. Should circumstances on the ground change, and 

current resources are found to be insufficient, I will inform Congress and work with 

them on finding solutions. 

Question. The President’s budget calls for no funding for LIHEAP in FY18. How 

do you intend to ‘‘implement the program dutifully in as effective and efficient manner as possible’’ without any funding? 

Answer. At the time of the confirmation hearing, the administration was in the 

process of reviewing programs and formulating the administration’s budget. 

LIHEAP has been unable to demonstrate strong performance outcomes. In addition, 

we reviewed programs and policies of utility companies and State and local governments and found that they provide significant heating and cooling assistance and 

the majority of States prohibit utilities from discontinuing heating during the winter 

months. With our limited resources and based on that review, we determined that 

continued funding of the LIHEAP program is not the best use of taxpayer dollars 

and have proposed eliminating future funding for this program. However, as long 

as there continues to be an appropriation of resources for this program, the U.S. 

Department of Health and Human Services (HHS) will continue to implement the 

program in as effective and efficient manner as possible. 

PUBLIC HEALTH EMERGENCY PREPAREDNESS

Question. Secretary Price, in your testimony you touted HHS’s successful history 

of responding to and protecting Americans from public health emergencies. You 

talked about your recent trip to Liberia and the incredible work of the Centers for 

Disease Control and Prevention in the region combatting Ebola. In this increasingly 

globalized world, serious public health threats are just a plane ride away, as you 

alluded to in your comments about Ebola. 

Given the cuts in the President’s budget to public health emergency preparedness 

and the hospital preparedness program, how will the administration make sure that 

communities and health systems are prepared to respond to increasingly frequent 

public health emergencies? 

Answer. Public Health Emergency Preparedness: HHS, through the CDC, will 

continue to support States, cities, and territories through PHEP cooperative agreements. CDC will award PHEP cooperative agreement funds to all current 62 recipients to ensure some level of sustainability and maintenance of public health preparedness and response capacity and capability. The FY 2018 budget proposal 

achieves program efficiencies by modifying the PHEP funding formula to prioritize 

funding to areas with greatest risk and by adding a competitive component. The 

proposed new funding formula is not yet final; however, formula changes will allow 

PHEP awardees to address capability gaps, identify opportunities, and incentivize 

innovation. Through PHEP, CDC will continue to provide expertise and support to 

State and local health departments’ efforts to prepare for and respond to more localized emergencies, including those requiring coordinated healthcare and public 

health responses. 

Through increasing efficiencies and streamlining processes, CDC will continue to 

support critical infrastructure and research to facilitate preventing, and responding 

to, public health emergencies. Key ongoing activities will include: 

• Regulating and monitoring ownership, use, and transfer of dangerous biological 

agents and toxins; 

• Activating CDC’s Emergency Operations Center to ensure effective and efficient 

response operations; 

• Developing standard Laboratory Response Network protocols and providing 

training and quality assurance for testing biological and chemical threat agents; 

• Advancing the development of a surveillance system for the timely exchange of 

syndromic data; and 

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11 ‘‘Benefits from Immunization During the Vaccines for Children Program Era—United 

States, 1994–2013,’’ Centers for Disease Control and Prevention, Morbidity and Mortality Weekly Report, April 25, 2014/63(16);352–355. 

• Developing and expanding partnerships with other Federal agencies, national 

organizations, and the private sector to identify opportunities to leverage resources to accomplish common goals. 

At the proposed funding level, CDC would be able to replace most expiring Strategic National Stockpile countermeasures in FY 2018. CDC will provide training 

and exercise support in FY 2018 to sustain State and local capabilities critical to 

effectively distribute and dispense stockpiled medical countermeasures to ensure access for individuals exposed to public health threats. 

In addition to PHEP funding and maintaining the Strategic National Stockpile, 

CDC will continue to provide rapid epidemiological and laboratory assistance to 

States during public health emergencies. CDC’s unique scientific expertise includes 

the ability to detect and track a broad range of microbes and respond to disease 

threats from many different pathogens, including emerging and resistant infections 

like Candida Auris. In FY 2018, CDC will also continue to invest in the Epidemiology and Laboratory Capacity for Infectious Diseases platform, a nationwide cooperative agreement focusing on building the essential epidemiology and laboratory 

capabilities in all grantees. 

Hospital Preparedness Program: The Hospital Preparedness Program (HPP), administered by ASPR, intends to create a lean and effective program in FY 2018 by 

focusing on those States and jurisdictions with the greatest risk. For health-care 

preparedness, ‘‘risk’’ will be determined through evidence and science-based tools 

that consider population, national security issues, and the potential for natural disasters. 

Under the Department’s proposal, those States and jurisdictions with the greatest 

risk will be prioritized to receive health-care preparedness and response funding. 

ASPR strives to assist all jurisdictions with preparing for, responding to, and recovering from emergencies and disasters. When disaster strikes, ASPR provides critical 

services to protect public health and help communities recover faster. For example, 

ASPR provides substantive preparedness and response technical assistance to jurisdictions and systems by connecting them with resources and subject matter experts 

(SMEs) through ASPR’s Technical Resources Assistance Center and Information Exchange (TRACIE). 

TRACIE provides evidence-based applications, technology, and proven best practices to help States and communities build enhanced capacity and improve their 

knowledge and effectiveness. TRACIE also provides surge assistance and resources 

during and after incidents. 

With a reduced level of funding, HPP will, through its FY 2018 budget proposal, 

direct Federal funds to those jurisdictions at greatest risk. Meanwhile, HPP will 

continue to provide all jurisdictions with technical assistance to inform their preparedness and response efforts. 

CDC AND VACCINATIONS

Question. The CDC plays an important role in infectious disease control by releasing guidelines and recommendations for vaccinations, reducing health disparities by 

ensuring vaccine access to all Americans regardless of insurance status, and conducts research to inform policies and practices involving immunizations. With Minnesota’s recent measles outbreak, now totaling more cases in that one State by June 

than the entire country recorded in all of 2016, it is clear that promoting vaccine 

education and access is still essential. 

Given the deep cut to Immunization and Respiratory Disease in the CDC budget, 

does the administration support widespread adoption of vaccines as a method of infectious disease prevention? 

Answer. Vaccines are one of the greatest success stories in public health and are 

among the most cost-effective ways to prevent disease. For each dollar invested in 

the U.S. childhood immunization program, there are over $10 of societal savings and 

$3 in direct medical savings. Childhood immunizations over the past 20 years have 

prevented 322 million illnesses, 732,000 deaths, and nearly $1.4 trillion in societal 

costs.11

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Question. How will the administration ensure people have access to vaccines in 

light of this financial cut to State and local public health department capacity? 

Answer. The discretionary Immunization Program plays a fundamental role in 

achieving national immunization goals and sustaining high vaccination coverage 

rates to prevent death and disability from vaccine-preventable diseases. It is the 

backbone of our Nation’s public health immunization system that supports the 

science that informs our national immunization policy and programs; provides a 

safety net of vaccines for uninsured, poor adults and use in outbreak response; monitors the safety and effectiveness of vaccines; educates providers and the public 

about the benefits of vaccines and the diseases they prevent; and conducts surveillance, laboratory testing, and epidemiology to respond to disease outbreaks. 

The CDC Immunization Program provides funding to all 50 States, the District 

of Columbia, 5 major cities and 8 territories. In FY17, Congress appropriated $607 

million for this important program. At the funding level proposed in the FY 2018 

President’s budget request, CDC will continue to provide vaccines and funding for 

immunization infrastructure to the 64 awardees at a reduced level. CDC will also 

continue providing technical assistance and laboratory support to States and local 

communities responding to vaccine-preventable disease investigations, including 

outbreaks, at a reduced level. 

INDIVIDUAL MARKETPLACE AND THE AFFORDABLE CARE ACT

Question. At your confirmation hearing earlier this year, you repeated to members 

of this committee over and over again, that every American should have access to 

health insurance. However, the actions your agency is taking and the proposals in 

this budget do not live up to that promise. 

As you know, earlier this week we learned that Anthem will not be participating 

in the individual insurance market in Ohio next year. Here’s what Anthem said 

when asked about why they made this decision: ‘‘The lack of certainty of funding 

for cost sharing reduction subsidies, the restoration of taxes on fully insured coverage, and an increasing lack of overall predictability simply does not provide a sustainable path forward to provide affordable plan choices for consumers.’’ 

This decision affects more than 66,000 Ohioans, and leaves up to 20 counties in 

Ohio with no insurer for next year. What’s worse, is it leaves more than 10,000 people in my State without ANY access to insurance next year. 

You are in charge of the Department of Health and Human Services. Your party 

is in charge of the House and the Senate and the White House. Your President, who 

you advise on health-care issues, has the power to help ensure certainty and create 

a sustainable path forward for insurers in the marketplaces by guaranteeing costsharing reduction (CSR) payments, and by pushing regulations that provide consistency and stability as opposed to Executive orders that direct sabotage. 

You have the power to fix this and to ensure that the individuals in my State 

that currently have coverage do not lose it next year. 

Why did you let this happen, and what are you going to do to fix it and provide 

certainty to these Ohio families? 

Answer. (See response below.) 

Question. What are you going to do to fulfill your promise that the 10,000 Ohioans 

without any choices next year have access to insurance? 

Answer. Obamacare is a disaster, delivering high costs, few options, and broken 

promises. Americans across the country have seen their health insurance choices 

disappear and premiums spiral out of control, increasing by double and triple digits. 

This administration is committed to empowering consumers with providing more 

choices and access to the health care they want and deserve. 

The administration recognizes that States are the primary regulators of health insurance, and it remains imperative for the executive branch to empower States with 

more flexibility and control. The Department finalized a Market Stability Rule in 

April, which tightened special enrollment periods, made it more difficult for enrollees to skip premium payments, adjusted the open enrollment period to align with 

other health-care markets, lifted one-size-fits-all requirements regarding network 

access, and widened the actuarial value bands within which insurers can offer plans 

to patients. 

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Our budget calls for Congress to repeal and replace the Affordable Care Act. In 

the interim, we are evaluating policy options to relieve American’s from Obamacare’s burdensome mandates and to restore choice and competition to the individual 

and small group markets, increasing availability of health insurance options so that 

all Americans can purchase coverage that meets their needs. 

CHILDREN’S HEALTH INSURANCE PROGRAM (CHIP)

Question. The Children’s Health Insurance Program, or CHIP, is a bipartisan success story. Thanks to the leadership of Senator Hatch and former Senator Kennedy, 

more than 6 million kids across the country—including approximately 100,000 in 

Ohio—have access to quality, affordable health care. The program will celebrate its 

20th anniversary this August. 

Throughout its history, Congress has acted to reauthorize and improve the program several times. Most recently, we extended funding for CHIP for 2 years when 

we passed MACRA, which passed the Senate by an overwhelming vote of 92–8. 

Thanks to these efforts, fewer children remain uninsured than ever before. 

During your confirmation hearing, I was pleased to hear your enthusiasm for the 

CHIP program, and I was thrilled when I asked if you would support a 5-year extension of the program and you instead suggested Congress act to extend funding 

for the program for 8 years. 

Much to my disappointment, however, the President’s budget only proposes a 2- 

year extension of the program and compromises the CHIP program by eliminating 

a provision that helps kids get covered and lowers administrative costs, while cutting support to States. During your recent testimony, you mentioned a meeting with 

the National Governor’s Association. On May 11th, NGA sent a letter to Congress 

requesting a fast, clean 5-year extension to CHIP. Though you clearly value the 

Governors’ input and have, in the past, spoken out for States’ rights, the FY18 

budget does not reflect the recommendations of the Nation’s Governors regarding 

CHIP. 

If an 8-year extension is better than 5, as you said earlier this year, isn’t 8 years 

also better than the FY18 proposed budget’s 2-year extension? 

Does the President disagree with your policy recommendation of an 8-year CHIP 

extension? 

Do you agree with his proposal, which could hurt kids and working families, as 

well as State budgets? 

Answer. CHIP funding will expire at the end of FY 2017, and without an extension of funding, children could lose health-care coverage. This proposal would extend 

CHIP funding for 2 years through FY 2019. The administration remains committed 

to working with Congress to provide budgetary stability and additional flexibility to 

States while providing additional help to lower income families. 

Question. Despite the recommendations of the National Governors Association and 

MACPAC, you recommend just a 2-year extension of CHIP in the budget proposal. 

But you go even beyond that, in making substantial cuts to CHIP and shifting about 

$3.5 billion in CHIP costs to States through eliminating the enhanced matching 

rate. You also propose to repeal the Maintenance of Eligibility requirement that 

runs through 2019 that requires States to maintain their existing Medicaid and 

CHIP eligibility levels for children and not make it harder for eligible children to 

enroll. 

Do you think it’s a good idea to undermine everything we and the States have 

accomplished on a strongly bipartisan basis since the enactment of CHIP in 1997? 

Answer. This proposal would extend CHIP funding for 2 years to guarantee that 

the most vulnerable children will continue to have coverage. CHIP has made substantial progress in making health-care coverage available to children, but there is 

more work to do. Extending CHIP funding for 2 years provides stability to States 

and families while the future of the program is addressed alongside other health 

reforms. 

Question. The budget proposal ends the 23 percent enhanced matching rate effective almost immediately. This is a significant cut to States, which have planned 

CHIP implementation based on this matching rate, which was to extend through FY 

2019. 

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Do you expect States to call special sessions for their State legislatures in order 

to develop an emergency contingency plan if this significant cut is approved and implemented as proposed, by the end of the fiscal year? 

Answer. CMS plans to work with States to achieve flexibility in their CHIP programs. 

MEDICAID SAVINGS IN CHIP

Question. Your proposed budget assumes over $16 billion in savings to the Medicaid program through reducing Medicaid payments in a 2 year extension of CHIP. 

This is a huge cost to States and leaves their hands tied with what services they 

can offer with a drastically reduced budget. 

Can you walk me through the policy proposals you considered to arrive at this 

level of savings? Please be specific; a policy is not just a number, though it is the 

way that your staff attempted to explain the cuts to Senate health staff at a budget 

overview briefing in May. 

Answer. (See response below.) 

Question. The President’s budget proposes capping coverage for children on CHIP 

at 250 percent of the Federal Poverty Level. That’s a single mom with two kids trying to support her family on $50,000 a year. That’s a married couple with three 

kids, working hourly jobs for a combined income of $70,000 a year. 

How will you ensure that these families won’t face any higher cost-sharing or any 

cuts to the benefits that they rely on today if States are given complete control over 

what they will provide, with no Federal guidance for minimum standards of care? 

Answer. (See response below.) 

Question. In 2009, the CHIP reauthorization bill included the Express Lane Eligibility tool in order to effectively and efficiently enroll or renew CHIP-eligible children in the program. This tool helps kids get covered while also lowers the administrative cost of running enrollment processes. 

Do you not support the effective, cost-saving mechanisms provided through Express Lane Eligibility? 

Answer. It is important that every child has access to high-quality health coverage, particularly children in lower income families. This proposal would extend 

CHIP funding for 2 years to guarantee that the most vulnerable children will continue to have coverage. CMS plans to work with States to achieve flexibility in their 

CHIP programs, while focusing resources on lower-income families. 

The budget proposes a 2-year extension of CHIP through fiscal year 2019, with 

reforms to rebalance the Federal-State partnership. The score of the CHIP proposal 

reflects the cost of an extension to the CHIP program ($13.9 billion). However, because children would move to Medicaid or other Federal programs in the absence 

of extending CHIP, this proposal results in savings to Medicaid of $16.7 billion and 

savings to other Federal programs and accounts of $3.0 billion. Therefore, this proposal results in net Federal savings over 10 years a result of children remaining 

on CHIP and not migrating to Medicaid or other Federal programs. 

SYRINGE EXCHANGE PROGRAMS OR SYRINGE SERVICES PROGRAMS (SEPS AND SSPS)

Question. You recently conducted a listening tour in States most affected by the 

opioid epidemic, including a stop in Wilmington, OH. One strategy I did not see you 

mention in your op-eds following your tour is the use of syringe exchange programs 

(SEPs) to stop the spread of infectious diseases associated with the opioid epidemic. 

I know you conducted a diverse tour geographically and in terms of affected individuals that you met with. Were SEPs discussed as an effective method for decreasing devastating clinical side-effects of opioid abuse? 

Answer. Please see answer below. 

Question. I asked a few questions of you regarding SEPs following your nomination hearing, and your answers did not convince me that you understood the value 

of these programs, and would help States most affected by the opioid epidemic to 

find ways to fund these successful programs. Cuyahoga County in Ohio was awarded a ‘‘determination of need’’ request by CDC in 2016 due to high rates of Hepatitis 

and HIV resulting from injection drug use. Because of the current limitations on 

94 

Federal dollars, the HHS funds going to Cuyahoga County cannot be used to purchase needles or syringes to replace used ones. 

You have been the Director of HHS for approximately 4 months now. Your clinical 

knowledge should allow you to assess SEP program effectiveness without bias. Furthermore, you have the authority to make suggestions to the President and to Congress about effective measures to protect the public health of all Americans, including those with devastating addictions. 

Will you urge the President and Congress to consider lifting the funding ban on 

clean needles and syringes through federally funded SEPs? 

Answer. The rising rates of Hepatitis C and other health consequences associated 

with injection drug use are of great concern. The administration is committed to 

bringing everything the Federal Government has to bear to address the health crisis 

opioids pose, and HHS is deploying a comprehensive strategy to address the opioid 

abuse crisis and opioid-related harms. HHS has identified five specific strategies 

that we can bring to the fight: improving access to prevention, treatment, and recovery services, including the full range of medication-assisted treatments; targeting 

availability and distribution of overdose-reversing drugs; strengthening our understanding of the crisis through better public health surveillance; providing support 

for cutting-edge research on pain and addiction; and advancing better practices for 

pain management. In recent years, Congress has provided HHS limited authority 

to support components of syringe exchange programs. HHS looks forward to continuing to work with Congress on this issue and will implement the law as directed. 

ADVISORY ROLE OF CABINET MEMBERS

Question. I am frustrated by many of your answers to your nomination QFRs 

when discussing your role as a Cabinet member. You often commented that you 

would be an administrator and not a legislator, implying your limited influence on 

policy changes. However, as a chosen Cabinet member, the President relies on you 

as a trusted adviser to inform his decisions regarding your areas of expertise; I fully 

expect that you are indeed serving as a policy adviser and not just waiting in the 

wings for congressional action. 

In developing the FY18 budget, what was your role in informing the President 

regarding his suggested changes to the HHS budget? 

Answer. Anyone who has worked on the President’s budget knows it is second 

only to passing legislation in terms of the compromise, collaboration, and commitment required. Director Mulvaney and the U.S. Department of Health and Human 

Services (HHS) maintained open lines of communication during the budget process. 

The President’s FY 2018 budget reflects difficult decisions made across the Federal 

agencies, including at HHS. Implementing this budget is step one in the President’s 

plan to improve our Nation’s fiscal stability and HHS supports the President’s goals. 

Question. During the hearing, I spoke about the huge financial impact that the 

Medicaid program has on Ohio’s ability to fight the opioid epidemic. You have spoken about your recent visit to Ohio, and it seems an unnecessary trip if you are 

not using that interaction as a way to inform policy changes that the President may 

suggest. According to the FY18 proposed budget, that ‘‘policy change’’ is a cut of 

$618 million from the Medicaid program. 

What was your thought process, as an adviser to the President, in arriving at 

such a drastic cut to the Medicaid program? What is the justification for the cuts, 

and what are your actual policy suggestions that States can functionally use to absorb these deep cuts and continue to serve their residents? 

Answer. The budget provides additional flexibility to States and reforms the fiscal 

structure of Medicaid, allowing a choice between a per capita cap or a block grant 

beginning in FY 2020. Rigid and outdated Federal rules and requirements prevent 

States from prioritizing Federal resources to their most vulnerable populations and 

from innovating and testing new ideas that will improve access to care and health 

outcomes. This proposal will free States to advance solutions that best serve their 

unique populations—for example, encouraging work, promoting personal responsibility, and meeting the spectrum of diverse needs of their Medicaid populations. 

States, as administrators of the program, are in the best position to assess the 

unique needs of their populations. The administration is determined to work with 

Congress to put in place a plan to give States the flexibility they need to achieve 

better health outcomes for patients while putting Medicaid on a more sustainable 

fiscal trajectory. 

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TOBACCO CESSATION

Question. In the QFRs for your nomination, I asked a few questions about tobacco 

cessation programs and services. In one answer, you noted that the ‘‘availability of 

cessation programs is important.’’ I agree, as tobacco is the number one cause of 

preventable deaths in the United States and sees exceptionally high use in Ohio. 

The President’s FY18 budget eliminates the CDC’s Office on Smoking and Health, 

which plays an important role in tobacco use reduction through a variety of cessation campaigns and programs, as well as research initiatives to develop innovative 

ways to curb tobacco use in the country. The proposed block grant does not sufficiently replace a proven program. 

How do you justify the elimination of funding for a program with proven success 

against the number one cause of preventable death in the United States? 

Answer. The President’s FY 2018 budget does not eliminate funding for tobacco 

control. Instead, it frees CDC and the States to address tobacco use within a holistic 

chronic disease prevention portfolio and funding structure. 

Question. Do you disagree that tobacco cessation programs should be available in 

every State through a Federal program with funding dedicated to assistance for 

those fighting tobacco addiction? 

Answer. Seven in 10 adult smokers want to quit, and quitting smoking is beneficial at any age. Efforts that combine media campaigns, quitlines, barrier-free tobacco cessation treatments, and environmental and policy approaches are most effective. This includes (1) high-impact tobacco education campaigns such as CDC’s 

Tips From Former Smokers, which has helped an estimated half a million Americans quit for good; (2) State tobacco quitlines, which have broad reach and are effective with diverse populations; (3) counseling and FDA-approved cessation medications, which are effective for treating tobacco dependence, especially when used together; and (4) smoke-free indoor environments that reduce tobacco consumption 

and support quitting. 

The proposed block grant would allow every State to dedicate Federal funding to 

tobacco cessation efforts, which are important for preventing and reducing tobaccorelated death and disease. 

DOMESTIC TUBERCULOSIS (TB)

Question. The proposed HHS Budget in Brief, the description for HIV/AIDS, Viral 

Hepatitis, STIs and TB Prevention funding only mentions suggested changes for 

HIV programs, but funds for domestic TB programs through the CDC is decreased 

by $11.986 million. TB is the number one infectious disease killer in the world, and 

increasing globalization threatens to continue the spread of new TB infections in the 

United States. There is still much work to be done into research for new treatments, 

especially for multi-drug-resistant TB, as well as better preventive measures including surveillance and other public health methods. 

TB is far from eradication, and funding that goes towards better treatments for 

existing infections and methods to prevent new infections is greatly needed. How 

do you justify cutting the CDC budget for domestic TB by 10 percent? 

Answer. The FY 2018 President’s budget request describes that CDC will continue 

to focus efforts on maintaining TB control within the United States. CDC will also 

continue to support States to conduct TB surveillance and contact tracing, focusing 

on States with the highest prevalence of TB. 

Preliminary 2016 TB surveillance data indicate a 2.7 percent decline in reported 

cases and a 3.4 percent decline in case rate per 100,000 from 2015. Although declines have occurred, progress has stalled, with TB rates remaining at levels 29 

times higher than the Nation’s goal of eliminating this disease in the foreseeable 

future. 

CDC has made advances in developing a new short-course therapy for latent TB 

infection (LTBI) which will provide opportunities to improve efficiency. Randomized 

controlled trials led by CDC have shown that a new combination regimen of isoniazid and rifapentine administered weekly for 12 weeks is as effective for preventing TB as other regimens and is more likely to be completed than the previous 

U.S. standard regimen of 9 months of INH daily. Preventing TB by treating LTBI 

is a cornerstone of the U.S. strategy for TB elimination, so this new regimen offers 

many advantages. 

96 

12 Castro, K.G., Marks, S.M., Chen, M.P., Hill, A.N., Becerra, J.E., Miramontes, R., Winston, 

C.A., Navin, T.R., Pratt, R.H., Young, K.H., and LoBue, P.A., ‘‘Estimating tuberculosis cases and 

their economic costs averted in the United States over the past two decades.’’ International 

Journal of Tuberculosis and Lung Disease. 2016; 20(7):926–933. 

Over the last 20 years, TB control efforts have prevented as many as 300,000 TB cases across the U.S., averting over $6 billion in costs.12 Eliminating TB will require 

both strengthening systems to diagnose and treat active TB disease and intensifying 

efforts to identify and treat latent TB infection (LTBI) among Americans infected 

with TB bacteria who are not yet sick. CDC estimates that up to 13 million Americans have LTBI, which develops in some people exposed to an active case of TB disease; about 5–10 percent of them will develop TB disease later in life without treatment. 

CDC STAFFING

Question. In your response to my nominations hearing QFR question about domestic tuberculosis, you commented that you look forward to working with the CDC 

on combating this disease. I want to remind you of a letter my colleagues and I sent 

to you last week, highlighting the vacancies of nearly 700 positions at the CDC. 

The CDC is a vital agency for protecting the public health of all Americans, including through the prevention of the spread of TB. How do you envision the CDC 

can continue its programs to combat diverse public health issues by decreasing the 

budget by 17 percent and allowing the continuation of extensive vacancies? 

Answer. The FY 2018 budget request includes a number of programmatic reductions and eliminations, while maintaining key priorities that will allow CDC to advance its core public health mission. 

Question. Is it your plan to continue the hiring freeze and continue to stifle the 

important work of the CDC? 

Answer. HHS continues to follow guidance provided by the Office of Management 

and Budget (OMB) relating to its April Memorandum, Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce, to 

ensure efficient and effective delivery of services while continuing its critical health 

and safety responsibilities. 

REFUGEE PROGRAMS

Question. Several Ohio refugee resettlement agencies have had to close their doors 

or lay off staff as a result of the President’s Executive order targeting refugees. The 

President has also proposed drastic cuts to HHS’s refugee assistance programs in 

the FY18 budget. 

In what ways is HHS continuing to support resettlement organizations in light 

of the President’s executive actions and proposed 30 percent budget cut to HHS Refugee Programs? 

Answer. HHS continues to support the resettlement of refugees through funding 

in significant program areas. We continue to issue grant funding to States and nonprofit agencies that provide health coverage, cash assistance, medical screenings, 

and employment services to refugees and other eligible populations. Through grants 

administered by participating States, we also provide specialized foster care for refugees and other populations of youth, as authorized by law. The proposed cuts to 

these benefits and services in the President’s budget are partially a result of the 

decrease in projected arrivals. 

Additionally, we continue to provide funding to ethnic community-based organizations, non-profit agencies, and resettlement agencies for additional specialized programs, such as services for survivors of torture. 

When changes in the program affect our partners, we communicate through Dear 

Colleague Letters, such as the letter announcing the change in the Cuban and Haitian social services set-aside program, and through in-person meetings and phone 

calls. 

Question. How will you ensure refugee resettlement remains a priority at the Department? 

Answer. HHS is increasing efforts to engage receiving communities, and we are 

working to improve the program. Successful resettlement requires positive collaboration between refugees and receiving communities in multiple environments, inVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00100 Fmt 6601 Sfmt 6621 R:\DOCS\30210.000 TIM
97 

cluding workplaces, schools, neighborhoods, and places of worship. We work to facilitate and enhance this collaboration, particularly within the private sector. As part 

of this community outreach, the Director of the Office of Refugee Resettlement 

(ORR) visited several agencies that serve refugees in northern California in May, 

and has visited resettlement agencies in Charlottesville, VA, and Boston, MA, in 

July. 

The ORR Director and staff will continue to participate in meetings with government representatives and NGO participants, like the United Nations’ Annual Tripartite Consultations on Resettlement, which the ORR Director attended in June. 

PRESCRIPTION DRUG PRICES

Question. President Trump has been outspoken both as a nominee and in his current role about the high costs of prescription drugs, yet there is no indication of this 

being a priority through the notable absence of funds to address the issue in the 

proposed FY18 budget. In your budget hearing, you stated that the President has 

charged your department with developing policy suggestions to combat this issue, 

and that you have begun holding roundtable discussions with certain stakeholders. 

You also mentioned that you would like to engage with others interested in lowering 

drug prices; I am interested in doing so, and have already worked with Senate colleagues to introduce multiple bills this year to combat this issue. 

Is there a reason that prescription drug costs did not make it into the President’s 

FY18 proposed budget? 

Please share with me the stakeholders who you are including in your discussions 

to work on this issue, and a timeline of your plan to share your policy suggestions 

with the President and Members of Congress. 

Answer. High drug prices and costs are an issue of major concern for HHS and 

for the American people. This includes the millions of seniors who rely on Medicare 

for their drug coverage, and the taxpayers who have to foot the bill for government 

spending on this program. As you know, the President has made prescription drug 

prices an absolute priority and has charged the U.S. Department of Health and 

Human Services (HHS) with making recommendations to his office on reducing drug 

prices. HHS has been meeting with stakeholder groups from across the health-care 

spectrum over the past several months in order to understand where there are areas 

of consensus. 

It is important that we move forward quickly, but also carefully, so that our policies do not have unintended consequences. We need to balance the goal of ensuring 

affordability and access with the mandate to continue supporting development of 

lifesaving innovations. 

QUESTIONS SUBMITTED BY HON. ROBERT P. CASEY, JR. AND HON. ROB PORTMAN

COMPLEX REHAB

Question. Complex Rehab wheelchairs and accessories are used by a small population of people with high levels of disabilities such as ALS, cerebral palsy, multiple 

sclerosis, muscular dystrophy, spinal cord injury and traumatic brain injury. For 

this reason, Congress exempted Complex Rehab Technology from the competitive 

bidding program established in the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008. 

Unfortunately, in 2014 CMS announced it intended to apply Medicare competitive 

bidding program pricing to Complex Rehab wheelchair accessories effective January 

1, 2016. We expressed our concern to CMS at the time but the agency chose to move 

forward. Congress has delayed these reductions through legislation twice; however, 

the cuts are scheduled to take effect July 1, 2017. 

Mr. Secretary, we remain concerned with CMS’s interpretation of the competitive 

bidding program which will reduce access to CRT accessories when provided on complex rehab wheelchairs for people with disabilities. We urge you to use your administrative authority to stop these cuts prior to June 30 and ask what plans you have 

to provide assistance in this area. 

Answer. CMS is committed to providing beneficiaries with access to the services 

and medical devices they need. On June 23, 2017, CMS issued a new policy on how 

adjustments to the fee schedule based on information from competitive bidding programs apply to wheelchair accessories and back and seat cushions used with group 

98 

3 complex rehabilitative power wheelchairs. As a result, retroactive to July 1, 2017, 

payment for these items are based on the standard unadjusted fee schedule 

amounts through December 31, 2018. By continuing these higher payments, this 

new action will help to protect access to complex rehabilitative power wheelchair accessories on which people with significant disabilities depend. 

AGING

Question. Secretary Price, on February 24th, after having traveled across Pennsylvania, I sent you a letter regarding administration proposals that threaten the financial and health security of older Americans and their families, questions that 

you failed to answer during the confirmation process. On April 4th, I sent you a letter regarding the administration’s efforts to undermine the Affordable Care Act 

through executive action. In that letter, I requested you provide a letter reportedly 

presented to House Republicans from President Trump outlining the ACA regulations the administration could repeal on its own. On May 8th, I sent you, Treasury 

Secretary Mnuchin, and OMB Director Mulvaney a letter regarding the administration’s efforts to sabotage the ACA. That letter called on the administration to commit to making cost-sharing reduction payments and requested documents and communications. You have not responded to any of these letters. 

Do you commit to providing responses to each of these letters in writing as well 

as producing the documents requested in the letters? 

Answer. I have provided responses to all of the letters listed above. 

COST-SHARING REDUCTIONS

Question. Secretary Price, you and other members of this administration have repeatedly stated that the ACA marketplaces are failing, yet Pennsylvania’s Insurance 

Commissioner Teresa Miller recently announced aggregate rates for the 2018 plan 

year, and these increases were in the single digits. Her statement also noted that 

if the administration eliminated cost-sharing reduction payments, premiums would 

increase by over 20 percent. She further noted that if Republicans repealed the individual mandate, premiums would increase by over 23 percent. If both of those 

changes happened, premiums would go up over 36 percent. On May 8th, I, along 

with Ranking Member Wyden and 11 other Senators, sent you a letter calling on 

the administration to halt its efforts to undermine the Affordable Care Act and permanently commit to continuing to make cost-sharing reduction payments. The administration has failed to do so. It’s clear that Pennsylvania’s market would be on 

path to stability if the administration and Republicans would just stop their sabotage of the ACA. Health insurers, medical providers, and business leaders have all 

said that continuing cost-sharing reduction payments is key to the success of the 

health insurance marketplaces and is the ‘‘most critical action’’ the administration 

could take regarding the ACA. 

Will you commit today to permanently funding cost-sharing reductions payments? 

Answer. The administration has emphasized the importance of reforming our 

health-care system to one that works better for patients and their providers. Our 

budget calls for Congress to repeal and replace the Affordable Care Act. In the interim, we are evaluating policy options to relieve American’s from Obamacare’s burdensome mandates and to restore choice and competition to the individual and 

small group markets, increasing availability of health insurance options so that all 

Americans can purchase coverage that meets their needs. 

QUESTIONS SUBMITTED BY HON. CLAIRE MCCASKILL

Question. On February 17, 2017, I sent a letter to Acting Commissioner Stephen 

Ostroff asking a number of question regarding the Food and Drug Administration’s 

role in overseeing the dietary supplement industry. To date I have not received a 

reply. Please provide the date on which I will receive a complete response, including 

all documents and other requested materials. 

Answer. HHS, and all of our component agencies, are committed to providing 

meaningful responses to correspondence from Members of Congress. FDA is working 

to provide you with a complete response and they will keep you updated on their 

progress. 

Question. The administration’s budget cuts funding for rural health outreach 

funding. In Missouri, this funding has been used to expand access to services. Will 

99 

these cuts result in reduced access to care, if enacted? If not, what steps will the 

administration take to preserve the expanded access to services? 

Answer. The FY 2018 President’s budget provides $51 million to target funding 

for the Rural Health Network and Quality Improvement Grants Outreach. These investments will support the existing awards and fund new awards to improve access 

to quality healthcare services in rural and underserved areas. 

PREPARED STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM OREGON

This administration, from day one, has preferred ‘‘alternative facts’’ and convenient spin to the truth. One of the most recent examples was its budget proposal, 

which double-counted $2 trillion to maintain some whiff of fiscal responsibility while 

it slashed health programs and protections for basic living standards. 

The budget math is fake, but the extreme agenda that would deprive millions of 

Americans of access to health care and wipe out living standards is not. 

Unfortunately, this morning I have to split time between the Finance Committee 

and the Intelligence Committee, so I’ll keep my remarks brief. But there are a few 

issues in the President’s budget and the administration’s agenda I’d like to address. 

First is Medicaid. Secretary Price is the captain of the President’s health-care 

team. He’s been the top advocate for Trumpcare, a bill that cuts Medicaid by $834 

billion to pay for massive tax breaks for the wealthy. 

Fourteen million Americans would lose coverage, and millions more would see 

caps on their care. As if that wasn’t enough of a cut, the budget proposal that came 

out a few weeks ago goes even further, slashing hundreds of billions more from 

Medicaid. In a program that covers nearly half of all births, 37 million kids, millions 

of working families and people with disabilities and two out of three nursing home 

beds in America, that would be an enormous blow to people across the generations. 

These facts and figures have been met by a wave of the hand from Secretary 

Price. When asked if his proposed cuts would result in millions of Americans losing 

access to Medicaid, he responded, ‘‘Absolutely not.’’ He went further, claiming ‘‘there 

are no cuts to the Medicaid program,’’ and he also said, ‘‘nobody will be worse off 

financially.’’ I’ve heard Secretary Price and others make the baffling argument that 

people are actually worse off on Medicaid—that their health doesn’t improve as a 

result of gaining coverage. Often this argument is based on a brief, old study performed in my home State. 

Here’s the bottom line on Medicaid. Seventy-four million Americans rely on this 

program for health coverage—parents with sick kids, people with disabilities, seniors in nursing homes who have nobody to turn to for help if their benefits disappear, and thousands of Oregonians who are healthier under my home State’s 

model. It would be a tough sell to convince those people that they’re worse off being 

enrolled in Medicaid, or that the program needs more than a trillion dollars in cuts. 

And public opinion is clear: two out of three enrollees are happy with the program. Seven out of 10 Americans say Congress should leave it as is—no block 

grants, no per-capita caps. 

Fortunately, the budget proposal hit the wall here in Congress and there’s a lot 

of debate left to be had on Trumpcare. But right now, the administration is causing 

turmoil in insurance markets, and it’s already having disastrous effects for millions 

of families. The President issued a day-one Executive order undermining the Affordable Care Act. And nobody on the Trump team can give a straight answer about 

whether the administration will continue making cost-sharing reduction payments 

that are key to making insurance affordable for working families. And because of 

that sabotage, insurers are pulling out of markets, and people are left without plans 

to choose from. 

You don’t have to take my word for it. The insurers are quite clear about why 

they’re making these decisions. 

Furthermore, on the campaign trail, the President said he wouldn’t cut Medicare. 

But the Trumpcare bill shrinks the life of the program, and the budget proposal extends the mandatory cuts under the sequester by more than $30 billion. The Food 

and Drug Administration, the Centers for Disease Control and the National Institutes of Health—all slashed in the budget. The same is true in programs aimed at 

100 

basic living standards—programs that fund Meals on Wheels, child care, and foster 

care. 

This is the budget you write if you think seniors and working families have it too 

easy. 

I want to thank Secretary Price for joining the committee today. This is never any 

easy appointment for a Cabinet Secretary, and I’m sure there will be some rigorous 

debate this morning. As I mentioned, I’m double-booked with the Intelligence Committee, so I want to thank Senator Stabenow for generously offering her time to fill 

in for me today. Thank you, Chairman Hatch. 

(101) 

1 AAFP, ‘‘Health Care for All’’ (2014), available at http://www.aafp.org/about/policies/all/ 

health-care-for-all.html. 2See, e.g., The Robert Graham Center, ‘‘The Importance of Having Health Insurance and a 

Usual Source of Care,’’ Am. Fam. Physician (September 15, 2004), available at http:// 

www.aafp.org/afp/2004/0915/p1035.html. 

COMMUNICATIONS

AMERICAN ACADEMY OF FAMILY PHYSICIANS (AAFP) 

AAFP Headquarters 

11400 Tomahawk Creek Parkway 

Leawood, KS 66211–2680 800–274–2237 • 913–906–6000 fp@aafp.org 

AAFP Washington Office 

1133 Connecticut Avenue, NW, Suite 1100 

Washington, DC 20036–1011 202–232–9033 • Fax: 202–232–9044 capitol@aafp.org 

On behalf of the American Academy of Family Physicians (AAFP), which represents 

129,000 family physicians and medical students across the country, thank you for 

the opportunity to submit a statement for the record to the Committee on Finance 

regarding the Trump Administration’s Fiscal Year 2018 Budget Request. 

On the whole, the AAFP is deeply troubled by the Administration’s FY 2018 budget, 

and its implications for patient health, safety, and access to care. The AAFP believes that if implemented, the spending reductions and policy changes requested in 

the budget would create a domino effect of damage that ultimately will harm the 

health of America on both an individual and community-wide basis. Below, the 

AAFP sets forth its principal concerns with the budget, as well as qualified support 

for selected policies. 

1. The Committee Should Reject the Administration’s Position on Repeal 

and Replace of the Affordable Care Act 

The AAFP supports health care coverage for all, consistent with the public-health 

mission of the specialty of family medicine. The AAFP promotes this in the form 

of ‘‘a primary care benefit design featuring the patient-centered medical home, and 

a payment system to support it,’’ for everyone in the United States.1 AAFP believes 

that all Americans should have access to primary-care services without patient cost 

sharing. This primary care benefit is especially important today in high-deductible 

health plans. The AAFP believes that universal health care also should include services outside the medical home (e.g., hospitalizations) with reasonable and appropriate cost sharing allowed, but with protections from financial hardship. Supporting access to primary care is also consistent with the ‘‘triple aim’’ of improving 

patient experience, improving population health, and lowering the total cost of 

health care in the United States. Research supports the AAFP’s view that having 

both health insurance and a usual source of care (e.g., through an ongoing relationship with a family physician) contributes to better health outcomes, reduced disparities along socioeconomic lines, and reduced costs.2

The AAFP applauded the passage of the Affordable Care Act (ACA) in 2010 as an 

incomplete yet important step toward the goal of universal coverage. While the 

AAFP does not oppose repeal and replacement of the Affordable Care Act per se, 

the AAFP has clearly articulated to Congressional leaders its grave concerns with 

any approach to replacing the ACA that would increase the number of uninsured, 

degrade the health-care safety net, or eliminate important patient protections in the 

health-insurance marketplace. After the Congressional Budget Office (CBO) issued 

its report dated March 13, 2017, projecting that H.R. 1628 (the American Health 

102 

3See White House, off-camera briefing of the FY18 budget by Office of Management and 

Budget Director Mick Mulvaney (May 22, 2017): ‘‘We assume the Affordable Health Care Act 

that passed out of the House passes. That has some Medicaid changes into it. We wrap that 

into our budget proposals. We go another half a step further and ratchet down some of the 

growth rates that are assumed in the AHCA. So if you assume growth rates—I can’t remember 

what the exact measure is—it’s a CPI-plus measure. We take a measure that we think is closer 

to what the actual growth rates look like.’’ 

Care Act or AHCA) would ‘‘increase the number of uninsured people relative to the 

number under current law . . . to 24 million in 2026,’’ the AAFP expressed to House 

leaders its formal opposition to that bill—based in large part on this projection 

about insurance coverage. The AAFP subsequently expressed ‘‘deep disappointment’’ 

when the House passed the current version of the AHCA on May 3rd (a later CBO 

report dated May 24, 2017 projected that under the modified version of the AHCA, 

the number of uninsured would increase to 23 million, 9 million of whom would 

have been insured through employer-based or private non-group coverage). 

Although the Administration has never precisely articulated its vision for repealing 

and replacing the ACA, it states in this FY 2018 budget that it ‘‘continues to support a repeal and replace approach’’ to the Affordable Care Act (see Budget in Brief 

at 2) that broadly tracks the AHCA framework of tax credits, expanded health savings accounts, high-risk pools, and changes to Medicaid financing. The Administration proposal ‘‘eliminates Obamacare’s onerous taxes and mandates, provides funding for states to stabilize markets and ensure a smooth transition away from 

Obamacare, and helps Americans purchase the coverage they want through the use 

of tax credits and expanded Health Savings Accounts,’’ all of which matches the 

AHCA. (Id.) The Administration has also indicated (through a Statement of Administration Policy dated March 22, as well as a public event held in the White House 

Rose Garden on May 3rd) that it ‘‘strongly supports’’ the AHCA—both the version 

approved by the House Budget Committee and the version that the House passed 

on May 3rd. 

Although the Administration has not made its own projection about coverage losses 

under its repeal-and-replace proposal, it is clear that the Administration’s proposal 

is equivalent to the AHCA, and thus gives rise to the same concerns about loss of 

insurance coverage. The AAFP urges this Committee to reject the Trump Administration’s vision for repeal and replace, and instead adopt reforms that extend affordable insurance to more Americans, strengthen the health-care safety net, and lower 

the overall cost of health care by investing in a stronger primary-care foundation. 

2. The Committee Should Reject the Administration’s Proposals to Cap 

Medicaid Financing 

The AAFP and its members are committed to ensuring that all individuals, regardless of their socio-economic status, have access to health care coverage. This commitment is focused on individuals and families who do not have access to employerbased health insurance and/or are economically unable to secure health care coverage through the individual market. Our commitment to low-income individuals 

and families is reflected in family physicians’ participation in the Medicaid program. 

More than two-thirds (68%) of AAFP’s members accept new Medicaid patients into 

their practices. Participation in Medicaid by family physicians is at its highest level 

since the AAFP began monitoring the issue in 2004. 

The Administration’s budget proposal ‘‘reforms Medicaid funding to States starting 

in FY 2020 through either a per capita cap or a block grant’’ (see Budget in Brief 

at 3). The Administration projects that these changes will reduce federal Medicaid 

spending by $610 billion over 10 years. Amazingly, the budget also contemplates 

‘‘additional savings to Medicaid as a result of the Administration’s plan to repeal 

and replace Obamacare with solutions that focus Medicaid on the most vulnerable 

Americans—the elderly people, with disabilities, children, and pregnant women— 

those Medicaid was intended to serve’’ (see Budget in Brief at 61). Office of Management and Budget (OMB) Director Mick Mulvaney confirmed 3 that the Medicaid reductions in the budget proposal are to be added to those found in the AHCA ($834 

billion per the CBO report dated May 24, 2017), yielding a potential total of more 

than $1.4 trillion in federal funds removed from Medicaid over 10 years. This 

strongly suggests that the CBO’s estimate that 14 million Medicaid beneficiaries 

would lose their health coverage by 2026 is a floor, not a ceiling. President Trump’s 

proposal would likely significantly reduce support to states, causing even more lowincome Americans to lose Medicaid coverage—an unacceptable result to America’s 

family physicians. 

103 

4 Health Resources and Services Administration, ‘‘Teaching Health Center Graduate Medical 

Education Program, Academic Year 2014–2015,’’ available at https://bhw.hrsa.gov/sites/default/files/bhw/nchwa/teaching-health-center-graduate-highlights.pdf. 5 E. Blake Fagan, M.D., et al., ‘‘Family Medicine Graduate Proximity to Their Site of Training,’’ Family Medicine, Vol. 47, No. 2, at 126 (February 2015). 6 Candice Chen, M.D., MPH, et al., ‘‘Toward Graduate Medical Education (GME) Accountability: Measuring the Outcomes of GME Institutions,’’ Academic Medicine, Vol. 88, No. 9, p. 

1269 (September 2013). 7 Health Resources and Services Administration, ‘‘Cost Estimates for Training Residents in a 

Teaching Health Center,’’ available at https://bhw.hrsa.gov/sites/default/files/bhw/grants/ 

thc-costing-fact-sheet.pdf. 

The AAFP has consistently stated opposition to the means by which the Administration achieves its budgetary goals in Medicaid (by shifting costs onto states, localities, providers, and patients). Rather, the AAFP supports maintaining the current 

financing structure of Medicaid: the federal medical assistance percentage (FMAP) 

system. Capping federal financial participation in Medicaid by definition shifts risk 

of medical loss to states, localities, and ultimately to patients themselves. Eventually, under the fixed federal contributions with the growth rate set forth in the 

AHCA, states will be unable to fill funding shortfalls, and will be forced to reduce 

payments to providers and managed-care organizations (MCOs). Many more providers will drop out of Medicaid, and many MCOs will shrink their provider networks, providing still fewer choices for Medicaid patients, and rendering states unable to fulfill the equal-access mandate of the Medicaid program. As federal contributions cover less and less of the total cost of care over time, some state Medicaid 

programs may ultimately create waiting lists for patients, and other forms of rationing for non-emergent services. And of course, for the 14 million or more who will 

lose coverage altogether, they will have no access to care at all save for charity and 

uncompensated care. The AAFP strenuously opposes such a fundamental undermining of the Medicaid entitlement and the damage that it would do to Americans’ 

public health. 

3. Congress Should Provide Long-Term Support for the Teaching Health 

Center Graduate Medical Education Program 

The budget proposal ‘‘maintains funding for the Teaching Health Center Graduate 

Medical Education Program and requests $60 million in new mandatory funding in 

both FY 2018 and FY 2019’’ (see Budget in Brief at 22). The AAFP commends the 

Administration for its recognition of the importance of the THCGME program, 

which will expire on September 30, 2017, absent Congressional intervention. 

The THCGME currently provides training for 742 medical and dental residents. 

Residents in the THCGME program train exclusively in primary-care medical specialties and dentistry—two thirds of whom are training in family medicine and pediatrics.4 Residents in the program train in community health centers (including federally qualified health centers), and tend to be concentrated in rural and other underserved areas that need access to more providers, particularly primary-care physicians. 

THCGME, which funded its first class of residents in 2011, is already achieving 

Congress’s intent to get more doctors practicing in rural and underserved areas. The 

most effective way to get family and other primary-care physicians into rural and 

underserved areas is to train them in these underserved areas. American Medical 

Association Physician Masterfile data confirms that a majority of family medicine 

residents practice within 100 miles of their residency training location.5 By comparison, fewer than 5 percent of physicians who complete training in hospital-based 

GME programs provide direct patient care in rural areas.6

The AAFP stresses to Congress that the Administration’s proposal to fund the program at $60 million per year is not enough to continue financing the program at 

its current size. The Health Resources and Services Administration (HRSA) has 

completed a study documenting that ‘‘the median overall cost of training a resident 

in a THC in FY 2017 is estimated to be $157,602.’’ 7 Therefore, the annual cost to 

maintain the current size of the THCGME program is at least $117 million per 

year. The AAFP views this as the bare minimum that the program should receive 

in order to prevent reductions in existing levels of primary-care training. However, 

given that Congress devotes some $15 billion per year to training residents, Congress could fund the THCGME program at $150 million per year and still account 

for only one percent of the overall spending on GME. The AAFP urges Congress in 

104 

8 Centers for Medicare and Medicaid Services, 2016 Enrollment Report, available at https:// 

www.medicaid.gov/chip/downloads/fy-2016-childrens-enrollment-report.pdf. 9During his testimony, then-Representative Price stated about CHIP (in response to Senator 

Brown): ‘‘Well, if we could extend it for 8 [years] it would probably be better than 5 [years].’’ 10 AAFP Member Census (December 31, 2016), available at http://www.aafp.org/about/theaafp/family-medicine-facts/table-13.html. 11 AAFP, 2015 Practice Profile Survey (July 15, 2016). 12 Id. 

the strongest possible terms to dramatically expand and make permanent this highly successful and bipartisan GME program. 

4. The Committee Should Swiftly Approve a ‘‘Clean’’ Long-Term Extension of CHIP Funding 

The AAFP urges the Committee to swiftly approve a bipartisan long-term extension of CHIP, in order to promote stability and health security for 8.9 million lowincome children 8 and their families. Time is of the essence in completing this work 

in order to ensure continuous access to primary and preventive services for this vulnerable population, protect progress in public health and allow States to adequately 

plan. Although the Administration’s budget ‘‘proposes to extend funding for CHIP 

for two additional years through FY 2019’’ (see Budget in Brief at 66), the AAFP 

believes that Secretary Price articulated a better position during his January 24th 

confirmation hearing in this Committee when he suggested that an 8-year extension 

would be preferable.9

The AAFP has supported CHIP since its inception in 1997, and during each subsequent reauthorization and extension of funding (2007, 2009, and 2015), as a way 

to extend health coverage to uninsured children whose families do not meet eligibility requirements for Medicaid. Since the enactment of the Medicare Access and 

CHIP Reauthorization Act of 2015 (MACRA), the AAFP has reiterated support for 

CHIP funding beyond the current end-date of September 30, 2017—through letters 

to this Committee and to Congressional Leadership. Although the AAFP does not 

collect member survey data on CHIP participation, we know (due to the close connection between Medicaid and CHIP—including the fact that some states operate 

combined Medicaid/CHIP programs—and the fact that family physicians perform so 

many pediatric services) that family physicians are helping to carry out Congress’s 

intent behind CHIP: treating low-income children, many of whom would be uninsured without the program. 

Family physicians play an important role in addressing the health needs of American children. According to the AAFP’s latest member census, published December 

31, 2016, over 80 percent of AAFP members care for adolescents, and 73 percent 

care for infants and children.10 Other AAFP member survey data reflect that about 

20 percent of AAFP’s members deliver babies as part of their practice, with roughly 

6 percent delivering more than 30 babies in a recent calendar year.11 Of AAFP active members with full hospital privileges, 70 percent provide newborn care in the 

hospital, and 64 percent provide pediatric care in the hospital.12 This is consistent 

with family medicine’s traditional role of practicing in the entire scope of the physician license, in order to meet the needs of the community in which the family physician practices. A family physician who serves a small rural community without a 

pediatrician, for example, will often perform most or all pediatric care for that community. 

The AAFP urges the Committee to pass a ‘‘clean’’ extension of CHIP with a minimum of unnecessary policy changes. Accordingly, the Committee should extend the 

current enhanced federal medical assistance percentage (FMAP), as well as the current maintenance of effort (MOE) provisions, which are both in effect through September 30, 2019, in order to align with an extension of CHIP funding. For example, 

if Congress extends CHIP funding for 8 years, then it should extend the enhanced 

FMAP and MOE provisions for 6 years. The Administration proposal does quite the 

opposite—it ‘‘ends the 23 percentage point increase in the enhanced Federal match 

rate and the current law maintenance of effort requirement after FY 2017’’ (see Budget in Brief at 66), which would terminate these important policies this year— 

two years earlier than Congress had envisioned. The AAFP opposes scaling back 

what our current bipartisan commitments to the nation’s most vulnerable children. 

5. The AAFP Welcomes Efforts to Expand Direct Primary Care in Medicaid 

The Administration proposes to ‘‘expand Medicaid Direct Primary Care (DPC), 

which provides an enhanced focus on direct physician patient relationships through 

105 

enrolling Medicaid patients in DPC practices. These practices enhance physicians’ 

focus on patient care by simplifying health care payments for patients and physicians’’ (see Budget in Brief at 62). The AAFP supports the physician and patient 

choice to, respectively, provide and receive health care in any ethical health care delivery system model, including the DPC practice setting. 

Payments in all primary-care models should be appropriate to ensure an adequate 

supply of participating family and other primary-care physicians. Just as the feefor-service payments in Medicaid should be at least at Medicare levels, periodic payments in Medicaid DPC should be comparable to payment levels from other thirdparty payers such as employers and Medicare Advantage plans, in order to allow 

family physicians to appropriately serve this patient population in this unique 

model. 

6. The Committee Should Work to Ensure That CMS is Adequately Funded in Order to Implement the Many Programs Under the Committee’s 

Jurisdiction 

The Administration proposes to reduce CMS program management by $379 million 

in FY 2018—a 13-percent reduction in the agency’s FY 2017 budget (see Budget in 

Brief at 71). Given that CMS is responsible for the administration of Medicare, Medicaid, CHIP, and the Affordable Care Act federal marketplaces, as well as over one 

trillion dollars in corresponding annual payments, the AAFP advises the Committee 

to work with the Appropriators to resist such a large and unwarranted reduction 

to the CMS operating budget in FY 2018. The vast majority of AAFP members participate in one or more of Medicare, Medicaid, and CHIP, and the millions of newly 

insured under the ACA have looked to America’s family physicians for primary 

care—many for the first time in their lives. Accordingly, ensuring the smooth functioning of CMS is critical to the ability of so many Americans—the elderly, the lowincome, those insured in the marketplaces, and others—to receive high-quality primary care. 

Moreover, the AAFP continues to invest significant resources preparing its members 

for the Medicare Quality Payment Program (OPP), established in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and launched on January 1, 

2017. AAFP members are now reorienting their practices to prepare to report quality and other measures to CMS through the Merit-Based Incentive Payment System 

(MIPS) or one of the advanced alternative payment models (A–APMs) such as the 

Comprehensive Primary Care Plus (CPC+) model, rolled out earlier this year by the 

Centers for Medicare and Medicaid Innovation (CMMI). The AAFP has also submitted an original primary-care advanced payment model proposal to the PhysicianFocused Payment Model Technical Advisory Committee (PTAC)—an expert panel 

established in MACRA to help review and approve new models for use under the 

OPP. These efforts to make the OPP a success will be compromised unless CMS receives adequate funding to implement them. The FY 2017 funding level of $2.82 billion already represents less than one-half of one percent of the $1 trillion in program payments flowing through the agency this year; the AAFP fails to apprehend 

the rationale for such a steep cut to program management in FY 2018 when it accounts for such a tiny fraction of the agency’s overall budget. 

The AAFP commends the administration for its statement that it wants to ‘‘work 

to reduce provider burden [under the OPP] while providing incentives for providing 

high quality care’’ (see Budget in Brief at 53). However, in the AAFP’s experience, 

depriving CMS of resources to implement the QPP and other programs is not conducive to implementing bold initiatives like regulatory reform. Accordingly the AAFP 

urges Congress to reject a draconian cut to CMS program management. 

7. Title X Funding 

The Administration’s FY 2018 Budget Request ‘‘provides $286 million-the same level 

as the FY 2017 Continuing Resolution-to support low-income individuals with comprehensive family planning and related preventive health services through the Title 

X Family Planning Program’’ (see Budget in Brief at 24). The AAFP agrees that this 

important program should, at a minimum, receive $286 million for the upcoming fiscal year, in order to continue supporting existing Title X clinics, which offer preventive services such as: screening for sexually transmissible infections, cancer 

screenings, HIV testing, and contraceptive care. 

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NATIONAL FAMILY PLANNING AND REPRODUCTIVE

HEALTH ASSOCIATION (NFPRHA) 

1025 Vermont Avenue, NW, Suite 800 

Washington, DC 20005 

Testimony of Clare Coleman, President and CEO 

My name is Clare Coleman; I am the President and CEO of the National Family 

Planning and Reproductive Health Association (NFPRHA), a national membership 

association representing providers and administrators committed to helping people 

get the family planning education and care they need to make the best choices for 

themselves and their loved ones. Many of NFPRHA’s members receive federal funding from Medicaid and through Title X of the federal Public Health Service Act, the 

only federally funded, dedicated family planning program for low-income and uninsured people. These cornerstones of the nation’s public health safety net are essential resources for those providing access to high-quality services in communities 

across the country. As a result, NFPRHA respectfully disagrees with the administration’s priorities laid out in its fiscal year (FY) 2018 budget. 

Publicly funded family planning services are provided through state, county, and 

local health departments as well as hospitals, family planning councils, Planned 

Parenthoods, federally qualified health centers, and other private nonprofit organizations. For decades, these diverse provider networks have helped ensure that millions of poor and low-income individuals as well as those who are underinsured or 

uninsured receive access to high-quality family planning and other preventive 

health services in all 50 states, the District of Columbia, and U.S. territories. 

Oppose Cuts to Medicaid 

The President’s proposal advances congressional proposals that, if enacted, would 

cut more than $627 billion from Medicaid, alter the structure and financing of the 

program, and dismantle the provider network, deepening a crisis in public health. 

NFPRHA opposes the end to or rollback of Medicaid expansion, either of which 

would reduce the number of people with access to Medicaid, thereby leading to 

fewer people getting health care, even-greater increases in rates of sexually transmitted diseases, and a reversal of the reduction in rates of unintended pregnancy. 

Furthermore, these proposed changes to the structure and financing of Medicaid will 

compound the demands being place on the publicly funded family planning safety 

net. NFPRHA opposes both per capita caps and block grants. Both proposals would 

inevitably shift costs to states, forcing them to make choices about program eligibility, benefits, and provider payments in order to adapt to new funding constraints. 

Medicaid beneficiaries would also likely face new barriers to coverage, such as premiums and other cost-sharing requirements. 

Increase Support for Title X 

An analysis published in the American Journal of Public Health last year found 

that, in order for publicly funded providers to meet the needs of all low-income, uninsured women of reproductive age for family planning services, the Title X program 

would need to be supported with approximately $737 million annually. This estimate is based on the presumption that the Medicaid expansion resulting from the 

Affordable Care Act remains unchanged. The president’s budget requests only level 

funding ($286.5 million), a fraction of what is needed to serve low-income, uninsured 

women across the country. It is also important to note that the Title X program also 

supports men, so the resource needs identified in the analysis are extremely conservative. Since FY 2010, Title X has dropped from $317.5 million annually to 

$286.5 million annually, leading to a loss of approximately 1.2 million patients from 

the network. 

The ongoing threat of the Zika virus has only increased demand on Title X providers. The CDC confirmed causal linkage between babies born with microcephaly 

and pregnant women infected with the Zika virus reinforced the simple concept that 

in a time of public health emergency, women will turn to Title X-funded providers 

for thorough counseling, risk assessment, and access to family planning services. As 

summer returns throughout the United States, public health experts expect the Zika 

virus to continue to spread domestically and demand for education and services to 

rise again. 

Oppose Cuts to Other Safety Net Programs 

NFPRHA is further troubled by proposals to eliminate several maternal-child health 

programs, the Social Services Block Grant, and the Teen Pregnancy Prevention ProVerDate Sep 11 2014 16:31 May 31, 2018 Jkt 000000 PO 00000 Frm 00110 Fmt 6601 Sfmt 6621 R:\DOCS\30210.000 TIM
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gram. Each of these programs is a vital part of the federal government’s role in fostering healthy women, children, and families. NFPRHA also opposes the harmful reductions to the National Center for HIV/AIDS, Viral Hepatitis, STIs, and TB Prevention; Temporary Assistance for Needy Families; Special Supplemental Nutrition 

Program for Women, Infants, and Children; Ryan White HIVIAIDS program; and 

rural health programs. Budgets for each of these programs are already stretched 

thin, and these further reductions will harm the patients our providers serve. 

Oppose Harmful Budget Riders 

NFPRHA is deeply concerned by the harms to the Title X network and other health 

care programs that would be caused by the budget rider that seeks to prohibit any 

funding in the Labor-HHS appropriations bill from going to essential community 

providers that provide abortions or contract with abortion providers and that received more than $23 million in Title X funding in FY 2016. The implicit intention 

of this proposed rider is to exclude Planned Parenthood affiliates, which are key networks within the publicly funded family planning safety net. A recent analysis by 

the Guttmacher Institute found that Planned Parenthood serves 32% of all safetynet contraceptive clients despite having just 6% of the nation’s safety-net family 

planning providers. Our members, from federally qualified health centers to local 

public health departments to universities and school-based programs to private nonprofits, rely on Planned Parenthood to offer patients high quality services and share 

the patient load in communities with high levels of need for publicly funded family 

planning. 

Conclusion 

Millions of low-income women and men depend on the safety-net programs for affordable access to the family planning and preventive health services that help them 

stay healthy. However, this budget would jeopardize the capacity of our nation’s 

public health infrastructure to help these vulnerable individuals and families as 

well as the broader social services and health care safety net. NFPRHA urges the 

Committee to reject the President’s budget proposal. 

ORAL HEALTH AMERICA

180 N. Michigan Avenue, Suite 1150 

Chicago, IL, 60601 

www.oralhealthamerica.org 

phone (312) 836–9900 

fax (312) 836–9986 

June 19, 2017 

The Honorable Orrin Hatch The Honorable Ron Wyden 

Chair Ranking Member 

U.S. Senate U.S. Senate 

Committee on Finance Committee on Finance 

219 Dirksen Senate Office Building 219 Dirksen Senate Building 

Washington, DC 20510 Washington, DC 20510 

Re: CHIP Reauthorization is Essential to Children’s Oral Health and Wellbeing 

Dear Chairman Hatch and Ranking Member Wyden: 

On behalf of Oral Health America (OHA), a leading nationwide organization dedicated to changing the lives by connecting communities with resources to increase 

access to care, education, and advocacy for all, especially those most vulnerable; I 

write to submit a statement for the record following the Senate Committee on Finance’s June 8, 2017 hearing on ‘‘The President’s Fiscal Year 2018 Budget.’’ OHA 

requests the importance of extending funding for the Children’s Health Insurance 

Program (CHIP) be taken into strong consideration by the Committee as the September 30 deadline approaches. Specifically, OHA urges Congress to support a fiveyear extension through to fiscal year 2022 as has been widely-recommended. OHA 

is deeply concerned the president’s FY 2018 budget cuts CHIP by an estimated $6 

billion, or a 20% cut, despite the program being extended through to 2019. 

Since 1997, CHIP has helped children whose families have incomes too high to qualify for Medicaid, but too low to afford private health insurance. CHIP has reduced 

the number of uninsured children by more than 50% while improving health outcomes and access to care for children and pregnant women across the nation. Of 

direct interest to the oral health community is the fact CHIP is the only 

insurance that guarantees eight million children a dental health benefit 

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1 Health Policy Institute American Dental Association, Thomas Wall, Marko Vujicic, ‘‘Emergency Department Use for Dental Conditions Continues to Increase,’’ April 2015. 2https://www.hhs.gov/about/budget/fy2017/budget-in-brief/cms/chip/Index.html. 

3https://www.macpac.gov/topics/chip/. 

that includes coverage for screenings and exams, cleanings, fluoride, and 

sealants. Untreated tooth decay can cause pain that may lead to difficulty eating, 

sleeping, and concentrating in school, leading to poor school attendance, and academic performance. Without CHIP, these children would lose much needed medical 

and dental coverage. According to the Medicaid and CHIP Payment and Access 

Commission (MACPAC), without CHIP some families would be susceptible to additional premiums and cost sharing to access dental services in marketplace plans 

and/or employer-sponsored insurance. This is particularly concerning for low-income 

families and children. Furthermore, CHIP contributes to overall cost-savings to the 

system by decreasing the number of emergency room visits that are 10-times more 

expensive than routine, preventative care.1

Historically, CHIP has had bipartisan support. It gives states flexibility in designing 

their programs, allowing them to implement the program by expanding Medicaid, 

creating a separate program, or a combination of both approaches.2 With that flexibility, states can design a program that works best for their state and its children. 

Simply stated, CHIP provides states needed ‘‘certainty’’ in planning their budgets. 

MACPAC estimates all states would exhaust federal CHIP funding at some point 

in FY18, with four states and the District of Columbia running out of federal funds 

as early as December 2017.3 Therefore, time is of the essence. OHA urges Congress 

to act soon with a five-year CHIP funding extension. 

Respectfully submitted, 

Beth Truett 

CEO and President 

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