U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

87–174 PDF 2014

OBAMACARE’S IMPACT ON PREMIUMS AND 

PROVIDER NETWORKS 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

DECEMBER 12, 2013 

Serial No. 113–86 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

Vacancy 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

STEPHEN CASTOR, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on December 12, 2013 ...................................................................... 1 

WITNESSES 

Mr. Jeffrey English, M.D., Neurologist, The Multiple Sclerosis Center of Atlanta 

Oral Statement ................................................................................................. 6 

Written Statement ............................................................................................ 9 

Ms. Patricia McLaughlin, M.D., Ophthalmologist, New York City 

Oral Statement ................................................................................................. 12 

Written Statement ............................................................................................ 15 

Eric N. Novack, M.D., Orthopaedic Surgeon, Orthoarizona 

Oral Statement ................................................................................................. 21 

Written Statement ............................................................................................ 23 

Avik S.A. Roy, M.D., Senior Fellow, Manhattan Institute for Policy Research 

Oral Statement ................................................................................................. 63 

Written Statement ............................................................................................ 66 

Judith Feder, Ph.D., Professor of Public Policy, McCourt School of Public 

Policy 

Oral Statement ................................................................................................. 71 

Written Statement ............................................................................................ 73 

Mr. Edmund F. Haislamaier, Senior Research Fellow, Health Policy Studies, 

The Heritage Foundation 

Oral Statement ................................................................................................. 79 

Written Statement ............................................................................................ 81 

APPENDIX 

Admendment to Testimony of Patricia A. McLaughlin, M.D. .............................. 102 

Statement of The National Association of Chain Drug Stores ............................ 106 

Statement of America’s Health Insureance Plans ................................................ 109 

Submitted for the record by Chairman Issa, a Wall Street Journal article 

‘‘Juking the ObamaCare Stats’’ ........................................................................... 122 

Submitted for the record by Chairman Issa a Bloomberg article entitled 

‘‘Recession Not Health Law May Be Responsible For Cost Curb’’ ................... 124 

(1) 

OBAMACARE’S IMPACT ON PREMIUMS AND 

PROVIDER NETWORKS 

Wednesday, December 12, 2013, 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

WASHINGTON, D.C. 

The committee met, pursuant to call, at 9:30 a.m., in Room 2154, 

Rayburn House Office Building, Hon. Darrell E. Issa [chairman of 

the committee] presiding. 

Present: Representatives Issa, Mica, Turner, Duncan, Jordan, 

Chaffetz, Walberg, Lankford, Gosar, DesJarlais, Farenthold, 

Woodall, Collins, Meadows, Bentivolio, DeSantis, Cummings, 

Maloney, Tierney, Clay, Lynch, Connolly, Speier, Cartwright, 

Duckworth, Davis, Cardenas, Horsford, Lujan Grisham, and Kelly. 

Staff Present: Brian Blase, Majority Senior Professional Staff 

Member; Molly Boyl, Majority Deputy General Counsel and Parliamentarian; Lawrence J. Brady, Majority Staff Director; Sharon 

Casey, Majority Senior Assistant Clerk; John Cuaderes, Majority 

Deputy Staff Director; Brian Daner, Majority Counsel; Adam P. 

Fromm, Majority Director of Member Services and Committee Operations; Linda Good, Majority Chief Clerk; Frederick Hill, Majority Deputy Staff Director of Communications and Strategy; Christopher Hixon, Majority Chief Counsel for Oversight; Mark D. 

Marin, Majority Deputy Staff Director for Oversight; Matthew 

Tallmer, Majority Investigator; Sharon Meredith Utz, Majority Professional Staff Member; Rebecca Watkins, Majority Communications Director; Krista Boyd, Minority Deputy Director of Legislation/Counsel; Courtney Cochran, Minority Press Secretary; Jimmy 

Fremgen, Minority Policy Advisor; Susanne Sachsman Grooms, Minority Deputy Staff Director/Chief Counsel; Jennifer Hoffman, Minority Communications Director; Chris Knauer, Minority Senior Investigator; Una Lee, Minority Counsel; Juan McCullum, Minority 

Clerk; Jason Powell, Minority Senior Counsel; Dave Rapallo, Minority Staff Director; Daniel Roberts, Minority Staff Assistant/Legislative Correspondent. 

Chairman ISSA. The committee will come to order. 

The Oversight Committee exists to secure two fundamental principles: first, Americans have a right to know that the money Washington takes from them is well spent and, second, Americans deserve an efficient, effective Government that works for them. Our 

duty on the Oversight and Government Reform Committee is to 

protect these rights. Our solemn responsibility is to hold Government accountable to taxpayers, because taxpayers have a right to 

know what they get from their Government. It is our job to work 

2 

tirelessly in partnership with citizen watchdogs to deliver the facts 

to the American people and bring genuine reform to the Federal 

bureaucracy. 

Today, as we view a continued rollout of the Affordable Care Act, 

we deal with the Administration’s selling technique. The Administration sold the health law to the American people with a simple, 

clear promise: if you like your plan, you can keep your plan; if you 

like your doctor, you can keep your doctor. 

After millions of Americans received notices that their plans 

were being canceled, the President was forced to acknowledge just 

how misleading he had been. The President apologized for people 

who were misled by his claim and found themselves in difficult circumstances. The quote is: ‘‘I am sorry that they are finding themselves in this situation based on assurances they got from me. 

We’ve got to work hard to make sure that they know we hear them 

and we are going to do everything we can to deal with folks who 

find themselves in tough positions as a consequence of this.’’ 

Now there is mounting evidence that the President’s second 

promise is also untrue. Americans cannot keep the plan they like, 

they cannot keep the doctor they like, and it is increasingly clear 

that more needs to be done to keep the President’s assurance that 

we will do for folks everything we can. 

Americans deserve to hear the truth. The Administration has 

been stringing them along with promises that every day are being 

broken. Many of these promises were predictable; many of these occurrences cannot be reversed. But to the extent that we can bring 

the American people the truth of what is happening and reverse, 

in any case we can, the lowering of access to care, we must do it. 

Initially, in Minnesota, for example, the Mayo Clinic was only 

going to be open to people virtually within walking distance. Now 

it is open, because of the backlash, to at least people in Minnesota. 

But as a Californian, the ability to get reimbursed, if I am a California exchange, for the Mayo Clinic does not exist; and this is true 

throughout the Country. 

Just last month, thousands of doctors were terminated from 

Medicare Advantage plan networks, including 2250 in Connecticut 

alone. Thousands of seniors are facing the loss of physicians they 

relied and trust on. 

In Florida there are areas of Southwest Florida in which no 

oncologist exists for patients who currently have life-threatening 

cancer. 

Many Americans who are shopping for plans on the Obamacare 

or Affordable Care exchanges have found that they offer extremely 

limited provider networks that exclude their preferred physicians, 

physicians who they have built relationships with. Many parents 

are finding out that their child’s pediatrician is no longer covered 

by their insurance plan. 

We now know that exchange plans exclude our Nation’s best hospitals, hospitals like Seattle’s Children and Sloan-Kettering, MD 

Anderson Cancer Center, and the like. Unfortunately, millions of 

Americans are likely to find out early next year that their new 

health insurance plan doesn’t cover the doctors who they most 

value and trust. Such limited plans demand that we ask the question: What quality of care will Obamacare actually provide? 

3 

The access shock has prompted many Americans to ask: Didn’t 

the President promise me that I could keep my doctor, period? 

On November 19th, the White House press secretary explained 

that the President meant by that ‘‘you can keep your doctor’’ was 

that, if you want coverage from your doctor, you can look and see 

if there’s a plan in which your doctor participates. Clearly, in the 

case of Federal and State exchanges, it is unlikely that the best, 

and perhaps most expensive, physicians will ever be available. 

Just this past Sunday a key architect of the law explained if you 

like your doctor, you can pay more for that doctor. Before the Affordable Care Act was passed, you had that right, and you had the 

right to pick a plan that suited you and paid for that doctor. 

In essence, the public is now being told, if you like your doctor, 

then you can try to find a plan that carries them, and then you can 

pay more for that plan. But you are already paying more for plans 

that include items you don’t want, items you didn’t need and likely 

will not need This is so unacceptable to the American people that 

there is no question, both through public polls and, if you will, even 

by Democrats no longer touting the main benefit of the Affordable 

Care Act being the improvement of affordability of healthcare, 

there is no doubt at all that if you could pass this bill again, you 

couldn’t pass it in this Congress. Even if you had not read it and 

you knew what was going to happen, you would not vote for it. 

When our Government, including the Congress, passed this law, 

we have a solemn duty to honestly inform the American people of 

what is going to happen. In this case, clearly the American people 

were misled. This duty is no more solemn when it affects Americans’ relationships with their physicians. That is a sacred trust; it 

is the most important thing in the life or death situation to many 

Americans, and it is a trust that has been broken. 

Today we will hear testimony from experts at think tanks and 

institutions. They will be on our second panel. We have concluded 

that the first panel should include three doctors who have actual 

life experience practicing with patients and realizing what can or 

cannot be done, what should or should not be done, and direct experience of what is happening under the Affordable Care Act not 

just to their practices, which are businesses, but to their patients, 

who are human beings in need of their care. Today the testimony 

from these physicians will describe in the most candid and personal 

terms exactly how the Affordable Care Act, or Obamacare, has affected these patients in their practices. 

I am sure these doctors will agree that there were problems in 

the healthcare system that needed to be reformed. The fact is 

America had an imperfect system developed with a number of public and private forms of money, tremendous Federal taxes, insurance companies that were often difficult to work with, and the like. 

But a broken system that is repaired by crashing it into a wall is 

not, in fact, a fixed system. 

With that, I would recognize the gentleman from Maryland for 

his opening statement. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman, and thank 

you for calling this hearing. This week I had the tremendous honor 

and privilege of traveling to South Africa as part of our Nation’s 

delegation to honor the life of the late President Nelson Mandela. 

4 

It was an inspirational trip, a life-altering trip because I had the 

opportunity to reflect on the amazing changes that one individual, 

working with determination over a lifetime, can bring to millions 

of others. 

There will always be forces aligned against progress, against 

equality, and against basic human dignity. But Nelson Mandela’s 

life reminds us that our mission on Earth is to transcend these destructive forces and always pursue the betterment of our fellow 

man. 

As I traveled back yesterday on the 20-hour flight home, I began 

thinking about today’s hearing, and I was amazed again at the significance of what our Nation accomplished with the Affordable 

Care Act. Before we passed this landmark law, millions of our own 

citizens could not obtain health insurance because they had preexisting conditions, and we allowed insurance companies to discriminate against them. They charged exorbitant premiums that 

were prohibitively expensive, they attached riders that excluded 

care for these illnesses, and in many cases they did not access the 

health insurance altogether. Think about this: Before we passed 

the Affordable Care Act, there were about 50 million people in the 

United States without health insurance. Fifty million. That is almost exactly the population of the entire country of South Africa. 

Before the Affordable Care Act, we had an entire Nation within a 

nation of people without coverage; no insurance for doctors’ visits, 

cancer treatments, prescription drugs, or hospital care. That was a 

shameful and immoral legacy for a Nation as prosperous as ours. 

Three years ago, after decades of inaction, Congress and the 

President passed the Affordable Care Act. We finally banned insurance companies from discriminating against people with preexisting conditions. We prohibited insurance companies from charging higher prices for women than for men. We eliminated junk 

plans that collected premiums, but then did not pay hospital bills 

when the people got sick. The result today is that tens of millions 

of people now have something they did not have before we passed 

this law: the opportunity and the ability to afford and obtain quality health insurance that will safeguard their financial security and 

recognize their dignity as human beings. 

Congress understood, when we passed the Affordable Care Act, 

that these changes would tend to increase premiums for a subset 

of people who already had insurance under the old discriminatory 

rules. So we put in place several measures to lower prices and control costs, including subsidies to help people buy insurance, a requirement that insurance companies spend at least 80 percent of 

premiums on healthcare services or offer rebates to consumers, and 

reviews of proposals by insurance companies to raise their rates by 

more than 10 percent in a year. 

The good news is that the actual premium rates have now been 

submitted by insurance companies, and they have come in much 

lower than expected. In September, the Department of Health and 

Human Services issued a report explaining that actual premium 

rates now being offered under the Affordable Care Act are 16 percent lower than projected. Based on this actual premium data, the 

Center for American Progress issued a report in October showing 

that these lower premiums will save the Federal Government $190 

5 

billion over the next 10 years, meaning 700,000 additional people 

will be able to obtain coverage. 

More broadly, the Centers for Medicare and Medicaid Services 

issued a report finding that national health spending has slowed to 

only 3.9 percent in the last three years, which is the lowest rate 

since the Government began keeping these statistics in 1960. 

I understand that we will consider two studies today that assert 

that premiums are increasing for the majority of people in the exchanges. Both reports have significant, very significant flaws. First, 

the Heritage report completely disregards the subsidies provided by 

the Affordable Care Act. Completely. As a result, it inaccurately inflates the actual cost of coverage for consumers across the Country. 

Second, although the Manhattan Institute study is better because 

it includes subsidies, it still compares ‘‘apples to avocados,’’ as one 

commenter explained. It compares five plans under the Affordable 

Care Act with the five cheapest plans offered before the law 

passed. The obvious problem is that the old cheap plans offered 

vastly inferior coverage. To me, the most significant problem with 

comparing premiums before and after the Affordable Care Act is 

that it disregards the 50 million people who could not get insurance. If someone could not afford a policy that covered a preexisting condition, the price of that prohibitively expensive plan is 

not considered. 

Let me close by offering a final thought. One of the things that 

Nelson Mandela will always be remembered for is his push for reconciliation. I respect the viewpoints of my colleagues on this committee, as well as those of our witnesses, and I understand that the 

Affordable Care Act is not perfect. I have said that many times. In 

that spirit, I hope that we can work together in a bipartisan way 

to improve the Affordable Care Act, rather than continuing to fight 

over its very existence. 

One of the things that the late President Mandela said, and I 

have thought about this a lot because it is so true, he said it always seems impossible until it is done. It always seems impossible 

until it is done. We can no longer disregard the experiences of 50 

million members of our population. We can no longer ignore the 

pain, the frustration, and the fundamental inequality of this Nation within a nation. 

And with that, Mr. Chairman, I yield back. 

Chairman ISSA. I thank the gentleman. 

Members may have seven days to submit opening statements 

and other extraneous material for the record. 

We now welcome our first panel of witnesses. Dr. Patricia 

McLaughlin, M.D., is an ophthalmologist in a private practice in 

New York City. Dr. Eric Novack, M.D., is an orthopaedic surgeon 

with the OrthoArizona practice in Phoenix, Arizona. 

And I would like to recognize the gentleman from Georgia, Mr. 

Woodall, to introduce his constituent, Dr. English. 

Mr. WOODALL. Thank you, Mr. Chairman. I appreciate that courtesy. We do have the great pleasure having Dr. Jeffrey English 

with us today. He has been a tremendous resource to the Georgia 

delegation, not just to me and Mr. Collins on the committee, but 

to the entire delegation. I want to tell you just a little bit about 

his background. 

6 

He earned his bachelor of arts in psychology at Boston College 

in 1991 and then graduated from Dartmouth Medical School in 

1995; served relatively close by here as chief resident in neurology 

at the University of Maryland in 1999; and to the great pleasure 

of all Georgians has chosen to call Norcross home, where he is now 

the Director of Clinical Research at the Multiple Sclerosis Center 

in Atlanta and President of the Georgia Chapter of Docs for Patient 

Care. 

It is with great pleasure that I welcome you today, Dr. English, 

and thank you so much for what you do for us not just on the committee, but for us back home. 

Thank you, Mr. Chairman. 

Chairman ISSA. Thank you. 

Pursuant to the committee rules, I would ask all three of our witnesses to rise to take the oath. And please raise your right hands. 

Do you solemnly swear or affirm the testimony you are about to 

give will be the truth, the whole truth, and nothing but the truth? 

[Witnesses respond in the affirmative.] 

Chairman ISSA. Please be seated. 

Let the record reflect that all witnesses answered in the affirmative. 

Dr. English, do you have time in your practice to watch C– 

SPAN? 

Dr. ENGLISH. [Nonverbal response.] 

Chairman ISSA. Well, then for all of you, I will give you a brief. 

First of all, with unanimous consent, all of your opening statements in their entirety will be placed in the record. In addition, 

any pertinent or even extraneous material you would like to submit 

now or for the next seven days will be included in the record. That 

leaves you free to use the entire five minutes on the clocks in front 

of you to say anything you would like to say, but I would ask that, 

as that runs down, you try to wrap up. 

Dr. English. 

WITNESS STATEMENTS 

STATEMENT OF JEFFREY ENGLISH, M.D. 

Dr. ENGLISH. Mr. Chairman and members of the committee, I 

want to thank you for inviting me to talk about how the Affordable 

Care Act is going to affect my patients. 

Practicing physicians who see real patients like myself, members 

on the panel, and the Group of Docs for Patient Care, who have 

the read the law and understand the law have already predicted 

some of these outcomes that you mentioned earlier. None of what 

you are seeing and are about to see is unforeseen. The Affordable 

Care Act’s problem is not a computer site. It would be common 

sense to me that a program that is designed in Washington, D.C. 

by people who don’t take care of patients, that is supposed to affect 

people from Maine to Oregon in a sort of a top-down fashion, with 

patients being so variable, is going to have a lot of unintended consequences, as you mentioned before. Unfortunately, those unintended consequences are the patients that we are going to talk 

about, and they are also your constituents and our fellow Americans. 

7 

I am a private practice doctor, but half of what I do is in a salaried position at the MS Center of Atlanta, which is a nonprofit for 

the treatment of patients with MS. What I am going to talk about 

is not isolated to MS, certainly. 

MS is a disease of the brain and spinal cord, and can be very disabling; affects about half a million Americans. Most of the patients 

are female and it affects them at a young age, twenties and forties. 

In the 1990s we had no medications; now we have ten. They are 

highly variable; patients’ response is highly variable and they can 

have life-threatening side effects. So the MS patients require twice 

the number of staff and twice the amount of time to take care of. 

So these people can present as young teachers, working mothers 

who all of a sudden can’t walk, a typical presentation. 

MS doctors must be able to identify risk factors and start to 

move very quickly to therapy. It takes a lot of experience to know 

how to do that, which is why we have about 5,000 patients that 

come from 28 States and 118 of our 159 counties in Georgia, and 

they look at us as their primary care providers because they see 

us so often. 

We are now set up with a healthcare plan where we are looking 

at things like metrics that different physicians will be weighed 

against, and I think my colleagues will probably touch on this too. 

The metrics, again, are set up by people, mostly in Washington, 

D.C., who don’t take care of patients. If you comply with these 

metrics, there are bonuses; if you don’t, there are penalties. And 

section 302 and 307 of the healthcare law actually states some of 

those penalties include removing physicians from Government-approved insurance. 

So I want to give you a couple of stories, and hopefully I can finish them in five minutes. 

Number one was a report by CMS, or Centers of Medicare-Medicaid Services, February of 2012, and it said that I was an overutilizer of MRIs, compared to my peers. MRIs are what we use to 

look at brain injury. They are a routine protocol for MS. Not to do 

so can lead to disability, so we obviously don’t want to not do the 

MRIs. So I called CMS and I said, first of all, who are my peers, 

were they other MS doctors? They said no. My other peers also included orthopaedic surgeons. And I also said are you aware that I 

am an MS doctor and that these are routine protocols, and I got 

nos to that as well. They did tell me on the report, though, that 

this information would be on the Medicare website in the future, 

and people would look and they would see that I did not meet their 

standards. Again, that will be on their website. 

I heard earlier in the opening testimonies about United 

Healthcare. Many of you have read United Healthcare dropped 

quite a few providers, and according to The Wall Street Journal article, it mentions that this was in part due to managing its network 

using Medicare’s new five star rating system that ties bonus payments that meet certain measures on cost and quality. 

Well, you are looking at now a downgraded physician. I am not 

off United Healthcare, but I am downgraded because of, again, in 

compared to my peers, which are fellow neurologists, general neurologists, they looked at cost and quality. And I want you to know 

that my quality was literally off the chart. There was a bell-shaped 

8 

curve. We were over here, thanks to my wonderful staff. However, 

because of cost, I was also too high, so that was what downgraded 

me. And the two areas of cost were, guess what, MRI, which we 

talked about, and the other was drug cost. MS drugs are expensive 

and I have absolutely no control over that. And, again, my peers 

are neurologists who send me their most complicated patients that 

require these therapies. 

So I actually reached out to CMS a few years ago with a question, and I want to ask United Healthcare, but besides a December 

2nd deadline to appeal, after three weeks of calling we still, now 

four weeks out, have not gotten through to United Healthcare to 

appeal after the deadline. So what I want to know, as a provider, 

am I supposed to not take care of MS patients, or do I just take 

care of them, but I don’t do what is required, and limit my MRIs 

and my medications in order to meet metrics. And I think, again, 

this is just an example. I think physicians will be stuck with, the 

way the law is written now, that we will be penalized for taking 

care of these more complicated patients. 

I will close by saying that I have submitted testimony on the 

State exchanges. They are going to have as equal a difficult time 

as far as access to medications and to providers who know how to 

care for certain types of patients like I do myself. 

With that, I will close and again I thank you for this opportunity. 

[Prepared statement of Dr. English follows:] 

9 


Insert offset folio 1 here 87174.001
10 


Insert offset folio 2 here 87174.002
11 


Insert offset folio 3 here 87174.003
12 

Chairman ISSA. Thank you, Dr. English. 

Dr. McLaughlin. 

STATEMENT OF PATRICIA MCLAUGHLIN, M.D. 

Dr. MCLAUGHLIN. Good morning, Mr. Chairman and members of 

the committee. I want to thank you for the invitation to be here, 

and I welcome that opportunity. I have submitted testimony which 

I hope you will all take the time to read; it is packed with details 

about the nuances of how these plans were designed and architecture with perhaps improper thoughts of the privates in the battlefield, and that being the patient and the doctor. 

You are all generals, and we respect the hard work that you have 

done to get this law passed. And as Mr. Cummings said, even in 

my own family I can personally attest the fear that came when my 

father passed away and my mother ,at the age of 61, with a terrible medical history, lost her insurance because it was companybased with my father’s company, and for four years she was essentially uninsured. So I have walked that road and I understand 

where you are coming from, and the President, in wanting to do 

something for the citizens of this Nation who had such fears as 

well. 

However, in taking care of that, unintentionally there were horrific events that are only starting to come to light, which is the part 

that concerns me so much. In my State society in ophthalmology, 

I serve as the third-party liaison, and I look at all things that insurances do as a patterned behavior and I report on them, and 

then we take appropriate action, as necessary; and most times, 

with good negotiations, we can sometimes make great strides. So 

I am an optimist at heart and I believe that everything can be 

fixed. 

My former training in college and my graduate work was an 

aerospace engineer, and I had hoped to become an astronaut, but, 

because of my mother’s health, my life took a vast change. And I 

must tell you a little divergent comment. The pay-for-performance 

structure that we have now in Medicare for bonus pay, to most 

physician colleagues, I think we can honestly say should be 

scrapped. We are trained to give our best to our patients. We are 

paid, supposedly, to give our best to patients. We shouldn’t be 

doing metrics that have no bearing on the field that we do. In my 

field of ophthalmology, some of the pay-for-performance measures 

could include something as ridiculous as being a body mass index. 

What does that have to do with the health of the eye or what the 

eye says about other conditions in the body? Nothing. 

So you are spending Medicare money for ridiculous measures, 

taking our time in clinical practice to document this for someone 

who is a statistician who wants to run numbers. This is not what 

the doctor-patient relationship is about, and that is the only thing 

that this is about. 

My comments have no bearing on politics or what brought us to 

this point. We are now at T minus 20 days and counting. The doctors and the patients are going to be having extreme difficulties in 

accessing care. 

13 

And yes, Mr. Cummings, I agree with you it is nice to carry a 

plastic insurance card to say you are insured. It is quite another 

thing to access the care. 

Whoever allowed the insurance companies to devise the current 

plans and how they are structured on the Affordable Care Act and, 

I might say, affecting small businesses, as well, outside or off the 

Affordable Care Act, leaves a lot to be desired. And I am glad that 

I was put in the middle of this, because for everything bad something good comes of it, and that is why I am here today. As a small 

business, I insured my family and my two employees, and I had 

wonderful insurance. I was pleased with it. It was a small business 

plan. And I might tell you a little fact now that you will find surprising. In 2008, just as you said, those premiums raised ridiculous 

amounts every year. One year it was 26 percent for this great insurance plan. I was in sticker shock. It got to the point, in 2008 

dollars, that each individual in my small business plan, to have a 

fully comprehensive plan, would have cost $859. These are 2008 

dollars. I did the math and I said I can’t possibly afford this, so 

I contacted my insurance broker, I said what are my options, and 

he mentioned the consumer-driven health plans. Not very familiar 

with it, a little bit leery about a new concept, I explored it. It took 

me two years to sign on, however. 

What that did in those 2008 dollars, without the Affordable Care 

Act legislation, the insurance company took my premium of $859 

and dropped it down to $300 for the same plan. So why? It did that 

because we had to assume a $2,000 first-pay deductible expense. 

That is where the risk got put. The insurance company lowered the 

premium by increasing the deductible. We didn’t have a deductible 

before for in-network coverage. We had a very modest deductible 

of $500 to go out of network. And I was blessed, yes, with an outof-network plan. I continued this plan for all those years and I was 

pleased. 

I was not pleased when I received a letter dated September 21st 

that my plan was going to be canceled, that it was not in compliance, it said, with the ACA. I am no one to judge that; I have not 

read that 2,000-page document. I am assuming the insurance company is telling me the truth. They said that plan would be replaced 

by something comparable, and I trusted them for that. I have been 

with this company for years. I was a participating provider with 

them for years. Just like patients have trust in their doctors, patients have trust, sometimes, in their insurance company too, and 

I was one of them. 

The new plan rolled out. It took away my out-of-network benefits, which I might say I might be able to live with because, under 

the high deductible plan, the in-network deductible was $2,000 for 

an individual, but the out-of-pocket was $3500. I was less likely, 

I must say, even in my position, and certainly my staff, to go to 

an out-of-network physician because those first dollar amounts 

would be ours to bear and, being a responsible individual, you 

should take care of your bills. 

The new plan does not give out-of-network benefits; not just to 

me, but to all small businesses. The Affordable Care Act insurances 

do not allow for individuals out-of-network benefits. 

14 

What I also noted with my new plan that was developed was a 

very crafted letter that implied that even though I was going to 

have an in-network plan, presumably of the same level as my current day plan, but only in-network, it would now be called an EPO. 

The EPO plan was not going to have the same network of physicians that my current plan did. Both EPO and PPOs had the same 

network. The HMO physicians were a smaller, different network. 

So some doctors, by their contract, had the ability to be in one or 

the other network, but by some contracts they had to be in all 

products. 

So what happened now was there was this term about I needed 

to be careful, as the administrator, and I needed to inform my employees that they needed to check to be sure that all of their doctors that they currently saw in-network—now, mind you, the same 

insurance company makes this a bit difficult, because you would 

assume if your doctor was in-network before, why wouldn’t your 

doctor be in-network afterwards? But that was where the catch 

was. 

The new network was given a fancy name, it was called Pathway, with variations; Pathway X, Pathway X Enhanced, or just 

simply Pathway. I didn’t understand that. I am a participating 

physician. I never heard Pathway before. I just knew that I took 

care of the EPO and PPO levels, I took care of the HMOs and the 

point of services. But I didn’t understand Pathway. I went to their 

website and I looked this up, and what I saw was that actually 

these pathways were very restricted. So we have now an inability 

to refer patients. As an ophthalmologist, I will need a neurologist, 

but if that neurologist is not in that network, how am I going to 

give the patient with optic neuritis and sudden loss of their sight 

the ability to see a fine physician that I have sitting on my right? 

We have to fix this, and we have to fix this now. We have no 

time to play with this. Patients lives are at stake. Acute care situations need a specific doctor to refer the patient to; it is not enough 

to send them to an emergency room. And, by the way, many hospitals are not in these networks either. 

I thank you so much for your time and I hope I can count on you 

to fix this. Thank you, sirs. 

[Prepared statement of Dr. McLaughlin follows:] 

15 


Insert offset folio 4 here 87174.004
16 


Insert offset folio 5 here 87174.005
17 


Insert offset folio 6 here 87174.006
18 


Insert offset folio 7 here 87174.007
19 


Insert offset folio 8 here 87174.008
20 


Insert offset folio 9 here 87174.009
21 

Chairman ISSA. Thank you, doctor. 

Dr. Novack. 

STATEMENT OF ERIC N. NOVACK, M.D. 

Dr. NOVACK. Mr. Chairman, members of the committee, thank 

you for having me back again. 

When President Obama made the case in 2009 that the U.S. 

needed to lower cost and improve access to healthcare, I agreed 

with him. On June 23rd, 2009, I told the House Subcommittee on 

Health that ‘‘The system within which you are allowed to provide 

care is as important to the delivery as the people providing it. So 

if we are not willing to put the same level of attention to detail into 

designing the system, it is doomed to fail.’’ 

During that same hearing, Congressman Dingell announced that 

he ‘‘would never presume to tell somebody how to take out an appendix or to replace a knee,’’ but he does know a little bit about 

drafting law; he’s been doing it for 50 years. 

Since then, the healthcare law has failed to deliver on nearly 

every promise, including if you like your doctor, you can keep her, 

and if you like your healthcare, you can keep it. 

The problems and failings certainly extend to Medicaid. 

In February 2013, the Obama Administration made clear their 

position about access to care for Medicaid patients in a court filing 

in the 9th Circuit: ‘‘There is no general mandate under Medicaid 

to reimburse providers for all or substantially all of their costs.’’ 

As Children’s Defense Fund President Marian Wright-Edelman 

said at that same hearing in June 2009, talking about a child on 

Medicaid who died, ‘‘His mother couldn’t get the dentist to take 

him because of low Medicaid reimbursement rates.’’ 

In addition, Obamacare architect Jonathan Gruber’s research 

and Austin Frakt’s research suggests that between 50 to 80 percent 

of all new Medicaid enrollees will actually lose private insurance 

as it is crowded out by Medicaid. 

And in Arizona, according to a 2013 Milliman report, most hospitals receive 70 percent of Medicare rates from Medicaid, which is 

unsustainable. 

While some will benefit from the expansion, the losers will far 

outnumber the winners. To respond to Congressman Dingell, he 

may not be saying how the surgery gets done, but he is certainly 

impacting who will get it and when. 

But the access problems do not end with Medicaid. As I wrote 

in August 2010, the healthcare exchanges are really just a variation of Arizona’s 100 percent Medicaid managed care system, 

which, the last time it was expanded, has actually cost over four 

times what was predicted by the supporters. 

The policies available through the exchanges, even with subsidies, are, for many, far more expensive than Democrats and the 

President promised, and many have higher deductibles, copays, 

and coinsurance, and very narrow provider networks. 

OrthoArizona, the group of over 70 musculoskeletal providers I 

am in, does not have a single exchange contract by choice. One reason is the required 90-day grace period for policies. This means we 

can provide two months of care, thinking the patient has coverage, 

and then we are on the hook for payment, and the insurers have 

22 

no responsibility. And OrthoArizona is not alone. At least one 

major Phoenix area hospital system does not yet have a single exchange contract, in large part because the rates being offered are 

at or near Medicaid rates. 

I recently spoke with a retired professor from an esteemed New 

York medical school. She feels Obamacare is morally right. But she 

notes that none of her personal doctors take Medicare, let alone 

Medicaid. Unwilling to make a moral stand and not go to those 

doctors, the professor is blaming the doctors and seeks to have 

Government force them and hospitals accept whatever payment the 

Government decides, even if they go out of business doing so. And 

I strongly suspect we will be hearing some variation of this very 

soon from the Administration. 

Those who do not wish to defend the failures of the law are quick 

to say, well, what is your solution? I know this hearing is not focused on alternatives, but I want to quickly mention three areas 

that should contribute to the many larger proposals that do exist. 

This year, Arizona passed a first in the Nation price transparency law. I would add, with significant bipartisan support. The 

law extends already ‘‘only in the Nation’ State constitutional rights 

to spend your own resources for legal healthcare services, but it 

also ends direct pay price discrimination based upon insurance status. This law goes into effect on January 1st. 

OrthoArizona, since its inception in 1994, has focused on quality, 

utilization, and cost. We have shown repeatedly with payers that 

local, same specialty physician accountability is a reproducible and 

effective way to lower healthcare costs while maintaining highquality orthopaedic care. 

Intelligent InSites, a software company with whom I work, is a 

company that provides a platform that takes automatically collected data and provide analytics on that data combined with other 

sources of information. Getting better, more accurate, unbiased information in the hands of everyone from transporters in the hospital to doctors to healthcare system CEOs to you, the policymakers in the Country, has never been more needed. 

Ultimately, we must move to policies that ensure patients and 

families maintain control of their healthcare decisions, and that includes access to quality physicians. 

[Prepared statement of Dr. Novack follows:] 

23 


Insert offset folio 10 here 87174.010
24 


Insert offset folio 11 here 87174.011
25 


Insert offset folio 12 here 87174.012
26 


Insert offset folio 13 here 87174.013
27 

Chairman ISSA. Thank you. I thank all three of you. I will recognize myself for a first round of questions. 

Dr. English, you said very well in five minutes a position. I just 

want to make sure I ask a question that makes it clear to all of 

us. Under the Affordable Care Act, what was often called rationed 

care is occurring simply because you are being told that if you take 

an expensive practice, you could be locked out, while a doctor who 

sends off, casts off the kinds of people you deal with, in other 

words, a doctor, a neurologist who says, look, anyone gets MS, I am 

going to dump them onto Dr. English because Dr. English costs 

more, and I am going to keep my costs down by not having those 

patients; he or she wins, you lose under this rating system. Is that 

pretty much a wrap-up of what you are dealing with? 

Dr. ENGLISH. Correct. That is my interpretation. 

Chairman ISSA. But you can fix that. You simply provide marginal care and do less MRIs and so on, and then you will be okay, 

is that right? 

Dr. ENGLISH. Or I stop working for the MS Center of Atlanta and 

just do general neurology, correct. 

Chairman ISSA. So you cannot take these difficult patients. And 

the same with an oncologist who says I am going to go into a practice where I only deal with people up until the time they have a 

serious cancer event, but after that I am going to dump that person. So the really sick, under the current system, unless we change 

it, find themselves undesirable either to get full care, which costs 

more, or, quite frankly, to get to the doctor at all. That is what you 

are dealing with unless we make these changes. 

Dr. ENGLISH. Yes. 

Chairman ISSA. Dr. Novack, transparency is a good thing, and 

certainly the person who walks in and writes a check or hands out 

cash for the service should not be disadvantaged. What happens, 

though, if—and I support that. I really, from the bottom of my 

heart, find it hard to believe that your cash customer pays more, 

as they do in almost every State and every hospital in America, 

and they don’t even know they are paying more because there is 

no transparency. But what would happen to the hospital system if 

everybody walked in and paid the Medicaid reimbursement, if that 

is the lowest rate? 

Dr. NOVACK. Mr. Chairman, in my conversations with a variety 

of hospital system C suite folks over the last few months, for the 

most part they feel that they need to be able to be profitable at 

Medicare rates, which, talking to, again, major hospital systems, 

meaning they need to actually cut their operating costs by 30 percent. So I can speak to Arizona, where the average hospital Medicaid reimbursement is 70 percent of Medicare. So, for example, for 

a total knee replacement, the average commercial payment is 

$24,000. Medicare pays 14; Medicaid pays 8. So were that to be extended further, there is simply no way that basically any of the 

hospitals, certainly in the Phoenix area, and I guess the bulk of the 

ones around the Country, would stay open. 

I would add, by the way, that that isn’t that unique a statement, 

because if you look at the Medicare actuary report that came out, 

there is an expectation that up to 25 percent of the hospitals won’t 

be able to survive this decade, anyway. 

28 

Chairman ISSA. So one of the things that we have to do is figure 

out how to stop cost-shifting. In other words, anyone, including the 

Federal Government, mandating a rate less than what it takes for 

an entity to stay in business, unless we are willing to work with 

that entity to make sure they can in fact live with that rate. 

Dr. NOVACK. That is correct. It is important to know, on the 

issue of transparency, as a very brief aside, remember that over 

100 million Americans get their insurance through a self-funded 

payer. So in the same example of transparency, what we found out 

was that, again, in Arizona, using hospital association data, that 

the commercial payment was $24,000. In Arizona, if you pay cash 

for a total knee replacement, it was $19,000. So as one of the executives of a privately held large company in the State said to me, 

in exchange for doing everything right for our employees and their 

spouses, we are paying $5,000 extra, or 20 percent more, for that 

knee replacement. 

So when we look at what the healthcare price transparency law 

has done in Arizona, is in effect it creates a mechanism where not 

only can we protect the uninsured, but ultimately we are going to 

protect the folks who are insured by hopefully lowering the difference between what they are going to pay. 

Chairman ISSA. One quick question. And I am going to respect 

the five minute clock very exactly today. The fact is that you are 

all seeing something else, I believe, and I would just like a yes or 

no if you have observed it. Federal reimbursement for a particular 

event at a clinic or a doctor’s hospital is almost always less than 

in a hospital, right? 

Dr. NOVACK. Correct. 

Chairman ISSA. So one of the interesting things is if a doctor’s 

hospital is more efficient than a hospital, a doctor’s office is more 

efficient than a hospital, we don’t say we are going to try to get 

people to the most efficient rate by paying a fair rate to the doctor; 

instead, we simply pay less to the doctor, more to the hospital, and 

it is causing hospitals to buy up doctors’ practices, which means we 

are paying more. Is that correct in all of your experience? 

Dr. NOVACK. Yes. 

Chairman ISSA. Thank you. 

The gentleman from Maryland, Mr. Cummings. 

Mr. CUMMINGS. Thank you very much, all of you, for your testimony. I appreciate your passion and what you do, and I want you 

to be effective and efficient in what you do. It is so important. 

Dr. English, you talked about the work that you do with multiple 

sclerosis patients. I am very familiar with that whole area. Johns 

Hopkins is smack dab in the middle of my district, so we spend a 

lot of time dealing with that issue. You also discussed the costs associated with it as being about $50,000 per year, is that right? 

Dr. ENGLISH. [Nonverbal response.] 

Mr. CUMMINGS. That is a hefty price tag. Dr. English, MS is, of 

course, a troubled disease and I sincerely appreciate the work that 

you do to treat those patients afflicted with it. And I know you 

have concerns about the Affordable Care Act, but I have serious 

concerns about what happens to the 20-year-old woman or the 40- 

year-old woman who is diagnosed with MS but does not have insurance. So do you agree with the Affordable Care Act’s prohibition on 

29 

discriminating against people with preexisting conditions? Do you 

agree with that? I can’t hear you, I am sorry. 

Dr. ENGLISH. Yes. Again, as we opened up, everyone agrees, I 

think, with the majority of your opening statement about the need 

to fix the healthcare system and preexisting conditions, so sure. 

Mr. CUMMINGS. Do you agree that if an uninsured person with 

MS were seeking healthcare coverage in the individual market 

prior to the ACA, that person would have been very unlikely to 

have gotten insurance? Would you agree? 

Dr. ENGLISH. No. In my experience, at least in my State, the majority of my patients had very good access to care. Those who were 

uninsured, there were methods of getting them care. Again, as 

Congressman Issa mentioned, I am cheap. The cost of seeing me 

is cheap. The medications are expensive, and those are usually subsidized. 

Mr. CUMMINGS. So prior to the ACA, insurance companies were 

allowed to discriminate against patients with preexisting conditions 

and exclude them from coverage, and that is a fact. But do you 

think that people with MS would have been able to get health insurance, or would it have been so cost-prohibitive that they 

wouldn’t have been able to afford it? 

Dr. ENGLISH. Well, again, I would agree with your original statement that we need to handle preexisting conditions. What I am 

seeing here is that patients are getting, again, as Dr. McLaughlin 

said, a card that gives them access to nothing. So I want to solve 

the problem that you exactly stated. I am on board with you 100 

percent, especially since at the time it was the University of Maryland that was the MS center. Now Hopkins has taken over, you are 

right. But at the University of Maryland, again, I was—— 

Mr. CUMMINGS. That is right, you graduated from Maryland? 

Dr. ENGLISH. From Maryland. 

Mr. CUMMINGS. Oh, wonderful. 

Dr. ENGLISH. I have two children born in your district. My wife 

got an MBA at Loyola. 

Mr. CUMMINGS. Fantastic. I am a Maryland graduate too. 

Dr. ENGLISH. Good. 

Mr. CUMMINGS. Go ahead. 

Dr. ENGLISH. So, yes, so we needed to solve that problem. I don’t 

think this, in my opinion, my experience, and what you have heard 

here, this didn’t solve that problem, and we are going to see these 

unintended consequences in the very near future and you are going 

to hear it from your constituents. 

Mr. CUMMINGS. Thank you. 

Dr. McLaughlin, I just couldn’t help but think about the things 

that you said about your mother not having insurance for a short 

period of time. A member of my immediate family had a, they 

found some precancerous cells with regard to the breast and could 

not get insurance, could not get it for four or five years; and this 

was a young woman. Couldn’t get it. As I listened to you, I can see 

that you all seem to understand the problem here. On the one 

hand, we want to make sure that treatment that is provided is the 

appropriate treatment and it does not—because we hear all these 

complaints about, and I know you have heard them, doctors giving 

too many tests and all this kind of thing, and at the same time we 

30 

want to get the results so that people can stay well or get well, if 

they are sick, because if they have to keep coming back it is only 

going to cost the system even more. 

The last thing you said, and this is written in the DNA of every 

cell of my brain. You said I want you to fix it. That is what you 

said, didn’t you? 

Dr. MCLAUGHLIN. Yes, sir. 

Mr. CUMMINGS. And I want to fix it. What suggestions do you 

have, based upon the things that you talked about today, that you 

would suggest to us about fixing it? 

Dr. MCLAUGHLIN. Well, I am glad you asked. Thank you so 

much. You see, the real problem with this, too, besides these networks being set up that are so restrictive, I also got a letter dismissing me as a participating provider from the insurance that 

would cover patients on the ACA. No one here intended that to 

happen, I am sure, but that is what is happening to us as physicians. Or we are being put on these panels without knowledge that 

we are because of contracts we signed 10 years ago that had all 

products clauses. And you might assume, as someone who owns a 

business, that if you were paid X number of dollars by the insurance company as a participating provider currently with them, 

wouldn’t you be offered the same fee just simply because you were 

taking care of the new Government law? Well, that is not the case. 

They are coming in with fees that are sometimes 50 percent of 

Medicare and, as businesses, we can’t survive. 

So back to your question, the other problem here is these 

deductibles, sir, is their subsidy, but that is for people who qualify 

for it. And maybe this is not universal across the Nation, but in 

a large city like New York City, a studio apartment is $2,000 a 

month. How is a person earning $50,000, which by most standards 

across this Country is not a terribly small amount of money, but 

someone earning $50,000 in New York City, paying $2,000 rent for 

a hole in the wall, cannot afford a $3,000 deductible for a plan that 

is being advertised as affordable because they take the bronze plan. 

The bronze plan in New York State, for something like Emblem, 

has a 50 percent coinsurance after that patient reaches that $3,000 

deductible. 

What we have found, when we went back to that 2008 level, is 

that just simply having these high deductible plans slowed down 

healthcare utilization because patients were afraid that they would 

have to pay that first deductible amount. Other patients saw good 

physicians, went to the hospitals, and then are in collections. We 

can’t have a whole Nation of patients in collection and we can’t 

have a whole Nation of physicians’ offices and hospitals fighting 

the system to get paid. And this isn’t fair to the patients. 

So when we talk or there is rumor about a single payer system, 

I think, in my heart, the quickest answer to help us in the next 

20 days is eliminate these networks. Let everybody who signed up 

stay in those plans, and those insurance companies must be made 

also to be transparent about what they will pay, which, by the way, 

up until this point they haven’t. I have colleagues that have no 

idea that they are even on these panels and they have no idea 

what they are going to be paid. So let the insurance companies, so 

not to hurt their business operations, because we all want them to 

31 

stay in business too for the rest of us, let them pay that same dollar amount as the access reference point, and then allow a negotiated fee between the patient and any doctor they want for a value 

for that service. Who is hurt by that? You will then establish a 

competition between physicians to keep prices controlled, unless 

you want to have one of those often spoken about concierge practices that charge enrollment fees of $24,000 for a certain one percent of this Nation. But everyone else will keep their prices in 

check with this negotiated amount. The doctors will be able to remain in private practice, keeping them out of the facilities that are 

going to cost everyone more money, and the patients will have the 

ability to see someone for a modest fee, if that is available, or they 

can negotiate some other fee. That is the only fix right now. But 

get rid of, please, those networks and allow the doctors to stay in 

business at the same time. 

Mr. CUMMINGS. Thank you, Mr. Chairman. 

Chairman ISSA. Thank you. 

I now ask unanimous consent that the article today in The Wall 

Street Journal, or actually yesterday in The Wall Street Journal, 

entitled Juking the Obamacare Stats, be placed in the record. 

Without objection, so ordered. 

Chairman ISSA. I now recognize the gentleman from Florida, Mr. 

Mica. 

Mr. MICA. Thank you, Mr. Chairman. Perfect lead-in, putting 

that into the record. 

The title of the hearing is Obamacare Impact on Premiums and 

Provider Networks. Let’s first talk generally about the impact on 

premiums and the people who have been affected so far that we 

know about. So far, the chairman just put this in, The Wall Street 

Journal said yesterday that between 4 million and 5.5 million people have had their plans liquidated. Isn’t it your observation that 

most of these people are now going to face a higher premium, Dr. 

English? Actually, a higher premium and lower deductibility. I 

mean higher deductibility and higher premiums, both. Would that 

be your guesstimate? 

Dr. ENGLISH. Well, I think there is so much variability, I think, 

as we have talked about. We want people to have—— 

Mr. MICA. But these people who had existing plans now have 

been notified that they are not getting them, with the new mandates in that. For example, I have been forced onto Obamacare. My 

deductibles are doubled or tripled, and my premiums are up, and 

I think that is what 4 million to 5.5 million have seen. What do 

you think, doctor? 

Dr. ENGLISH. I would answer that. I am reading what you are 

reading. I just can’t give you personal experience with my patients. 

Mr. MICA. Okay. 

Dr. ENGLISH. Some of them even don’t know yet; they don’t know 

what they are having. 

Mr. MICA. Well, again, with more mandates, the cost, the premiums are more. So they have shafted as many as 5.5 million in 

their premiums. 

Dr. Novack, any comment here? 

32 

Dr. NOVACK. No. Clearly, we are seeing that it is highly likely 

that the number of net losers are going to substantially outweigh 

the number of—— 

Mr. MICA. And they have signed up a whopping 364,682. 

Dr. NOVACK. And we don’t know if those are—since the Country 

is starting out with a 5.5 million negative number, so we don’t 

know who those people are. Are the 300,000 people or so just the 

people who previously had insurance but lost it? So we don’t know 

who those numbers are, let alone whether or not they paid for it. 

Mr. MICA. Let’s jump to the impact. Again, the title is Impact on 

Provider Networks. Here is another article from The Wall Street 

Journal about what the chairman talked about in his opening 

statement. In my State, which has many, many senior citizens residing in Southwest Florida, their primary oncologist provider was 

the Moffitt Hospital. That has been dropped. Thousands of seniors 

now do not have access to this critical care. Is that the kind of impact you are seeing? Again, this is on our seniors. This doesn’t involve Obamacare coverage, this is an existing Medicare Advantage, 

of which 28 percent, I guess, of all the Medicare people are on. This 

is an indirect result of Obamacare and what is going on in the marketplace. 

Is that correct, Dr. English? 

Dr. ENGLISH. Yes. I think Congressman Issa mentioned, again, 

the drafter of the law who was on the talk shows talked about paying more to see doctors on those plans. The State exchanges are set 

up, there are different exchanges in the State, so your providers, 

if they are in a different area, you can’t even move out of that exchange to see those people. 

Mr. MICA. What we are seeing is absolute turmoil in the marketplace. Seniors, they are the most vulnerable in our society and 

probably need the most medical coverage. Instead of getting coverage, they are searching for a doctor to serve them, as doctors 

have been thrown out in the cold. 

Dr. McLaughlin? 

Dr. MCLAUGHLIN. Well, absolutely, sir. I can tell you, in New 

York State, we are such a large State and, really, the behavior of 

the insurance companies has been quite different upstate New 

York as opposed to downstate New York. In the downstate area, 

2100 physicians were dismissed from Oxford United managed medical—— 

Mr. MICA. So it is not just Florida. 

Dr. MCLAUGHLIN. Absolutely no. 

Mr. MICA. We are seeing it across the Nation. 

Dr. MCLAUGHLIN. And there is a reason for that and there is a 

link to the ACA, because the CMS budget to these managed care 

companies was decreased from 17 percent to I believe the figure is 

about 8 percent to manage the Medicare beneficiaries. Now, with 

all due respect to the business operations of an insurance company, 

when they have a cut like that in their payments from the Government to manage these patients, as a business, they have to do 

something to cut their costs. Morally and ethically, none of us in 

here are happy with that, but I can understand where that came 

about. 

33 

Mr. MICA. Doctor, you had mentioned the panels that are being 

set up and I hear from seniors these rumors that certain ages, certain types of care is going to be cut off. Do you envision that happening? I heard rumor 73 you don’t get cancer treatment or there 

is a possibility of not getting transplants and things like that. 

What do you see—— 

Chairman ISSA. The gentleman’s time has expired. The 

gentlelady may answer, doctor. 

Dr. MCLAUGHLIN. May I answer? 

Chairman ISSA. Of course. 

Dr. MCLAUGHLIN. Okay. You know, a lot of that could be hearsay 

at this point. We heard rumors about death panels and things like 

that, but clearly rationing care is something that has to be part of 

this to make it work. It is not the appropriate answer, however. So 

I am not quite sure what the facts are about at what age some procedures will be limited, but I would not dare think that that may 

not come. 

Mr. MICA. Thank you. 

Chairman ISSA. If I could ask unanimous consent just to follow 

up for 30 seconds on this, because when the word death panel is 

used, Dr. Boustany and others who are serving in Congress have 

a real problem with it. 

Dr. McLaughlin, you do agree, I believe all of you, that medically 

sensible decisions about whether to use extreme healthcare options 

or not, in other words, decisions that are not always to do the most 

expensive and thorough do change with age, and that medical doctors need to make those decisions. So the term death panel hopefully does not mean that doctors don’t make a decision that extraordinary measures sometimes are not appropriate for the elderly. And I want to ask that because I think both Republicans and 

Democrats found that word to divide us, rather than unite us, on 

your making decisions about what is best. So just a yes or no, if 

you can. 

Dr. MCLAUGHLIN. The simple answer is most of us who are physicians will have a talk with the family and advise them what we 

feel is medically appropriate at the time and will do everything 

possible to sustain life where there is life and to allow the family 

to make a just decision. We hope most people will do advance beneficiary notices so that the individual has that choice and takes that 

burden away from the family. And if there is anything we can do 

as a society, we should be pushing individuals to make that decision. Thank you. 

Chairman ISSA. I appreciate that. I didn’t want that to divide 

this panel, because I think we are united on the need to fix 

healthcare. 

The gentlelady from Illinois, Ms. Duckworth. 

Ms. DUCKWORTH. Thank you, Mr. Chairman. Thank you for that 

comment. As someone who was accused of being involved in death 

panels at the VA, where they certainly use outcomes-based to deem 

what is appropriate for veterans, that is a very sensitive statement, 

so thank you very much for bringing that up, Mr. Chairman. 

Dr. English, I just wanted to follow up with you a little bit. You 

know, the goal of giving Americans access to affordable, quality, 

life-saving healthcare is critical. It is not only the moral thing to 

34 

do, to make sure that getting sick in America doesn’t lead families 

to bankruptcies, but, as far as I am concerned, it is common sense 

for our Country’s economic competitiveness and our Government’s 

fiscal health. I personally think that the Affordable Care Act made 

big steps in that right direction, but, as you have mentioned, there 

have been some real problems with it that need to be fixed. You 

spoke a little bit about the issues with CMS, for example, and how 

they rated your use of MRIs and incorrectly compared your use to 

others. I, myself, understand how different types of therapies will 

differ and associated diagnostic equipment that you need to do to 

treat that. 

Are you saying in your testimony that the CMS decisions on how 

you are evaluated with your use to this is specifically to the Affordable Care Act, or are you saying this is just part of their trying to 

improve the Medicare-Medicaid system? 

Dr. ENGLISH. I believe that outcomes measures are a major part 

of the Affordable Care Act, and they are using models like that. 

Some of those things were predated with the stimulus package, 

some of that started ahead of the Affordable Care Act, but that is 

big portion when we look at the Medicare cuts for the future. How 

will we evaluate outcomes and physicians and bonuses versus penalties, that is part of the Affordable Care Act. So it is a combination. 

Ms. DUCKWORTH. Do you support outcomes based on decisionmaking in medicine in terms of aggregate treatment and outcomes 

of those treatments for your patients, this particular procedure 

works better than others? I know you come from a very cuttingedge institution that is, according to your web page, very progressive and aggressive in treatment which, if I had MS, that is what 

I would want, but do you support looking at outcomes? 

Dr. ENGLISH. I do. I think when they come from as far away from 

where the actual patient care is occurring, the more mistakes are 

made, and I think the ACA really approaches this coming from 

D.C., which was the wrong way. I really wish specialty societies 

were encouraged to come up with metrics, given a few years to say 

what is appropriate care in MS, what is appropriate care in knee 

surgery, etcetera. That would have been a better way, in my opinion. 

Ms. DUCKWORTH. So what I am hearing is not so much that looking at outcomes is a bad thing, but that the way CMS is going 

about it, using accountants to look at it versus relying on the 

healthcare practitioners to be the ones who inform that process of 

developing what those guidelines are, so that if they are going to 

evaluate the outcomes, if they are going to use outcomes, base evaluation of physicians who deal with MS, they should probably have 

some MS physicians who would inform that process of developing 

those guidelines so that your use of MRI would be perfectly in 

keeping with other physicians who treat MS in an institution like 

in your setting, right? 

Dr. ENGLISH. Yes. As I stated, I think the Affordable Care Act, 

again, is going to have all of these unintended consequences because it is built from the top down, not from the ground up. So 

whether you like the law or not, I want you to understand these 

35 

things, these unintended consequences, are going to happen and 

they are not unforeseen. 

Ms. DUCKWORTH. Well, I happen to agree with you that we need 

to fix these unintended consequences, and I would love to be able 

to continue to focus on that. I don’t know that repealing the law 

or unfunding it or defunding it is the way to go, but I do agree with 

you that there are many problems that need to be fixed. But there 

are good things with it. I have a preexisting condition. I would assume that someone with MS would be considered to have a preexisting condition if they were to enter the marketplace or try to 

find their health insurance now. Have you had experience with MS 

patients on reaching lifetime caps from insurance companies for 

their treatment? 

Dr. ENGLISH. Well, first of all, I would say everybody in this 

room has a preexisting condition, it is just that some of us don’t 

know it yet. 

Ms. DUCKWORTH. Good point. 

Dr. ENGLISH. So you need to have an insurance that actually will 

follow you once that happens. If everybody owned their own insurance, then once they got sick there is no such thing as preexisting 

conditions. 

So in my practice the answer is no, I have never, to date, 13 

years in Atlanta at our center, not been able to get the care to my 

patients through one way or another. Even with gaps there have 

been ways to do that. 

Ms. DUCKWORTH. Let me fix that. I am talking about caps from 

insurance companies. I think your institution does a fantastic job 

of raising alternate funds as a charity, to provide charity dollars 

in order to cover patients who have lost the coverage from their 

own insurance companies. That is very different. I am glad that 

you can get the care to the patient. But the fact of the matter is 

you are using other techniques. And I would think it would be better if the patient had insurance that stayed with them and would 

cover so that they did not have to rely on charity. 

I am out of time. Thank you. 

Chairman ISSA. I thank you all. 

We now go to the gentleman from Michigan for his questions. 

Mr. WALBERG. Thank you, Mr. Chairman, and thanks to the panelists for being here. Thanks for the work you do, as well. 

Dr. Novack, let me go back to some questioning beforehand, and 

specifically what are your views on the Independent Payment Advisory Board, or IPAD? 

Dr. NOVACK. Sure. Thank you for that question. Obviously, the 

IPAD, which is supposed to be in existence, but no one has been 

nominated yet, to my knowledge, they say that it is not going to 

be involved and it doesn’t have the power to determine what care 

can or cannot be given, but as I believe not only are the people on 

the panel with me saying, but I think in the comments of the members implies, that what the IPAD can do is determine effectively 

how much you get paid for it. And if the payment for something 

drops to a point where you cannot stay in business or keep your 

doors open if you continue to provide it, less of it is going to be 

available. 

36 

So I think it is a bit of semantics and I think some of the words 

can cause division, but the ultimate reality and the ultimate goal 

of the Independent Payment Advisory Board, if Medicare expenditures go up faster than inflation, or 1 percent above inflation, is to 

reduce those costs, and they are going to go where the money is. 

So they are going to go to the expensive patients with MS and say 

we are just going to pay a lot less because we think that means 

that centers like Dr. English’s will just not make services available, 

and that is how they are going to lower the cost. 

Mr. WALBERG. So it takes away decisions from the patient and 

the healthcare provider. 

Dr. NOVACK. Correct. 

Mr. WALBERG. To a great degree. 

Dr. NOVACK. Correct. 

Mr. WALBERG. I would assume that that is, from what you say, 

a negative to the healthcare system. 

Dr. NOVACK. Well, I think that ultimately the question is how do 

we get the best healthcare to the mom who brings in their child 

to me after they fall at the park. 

Mr. WALBERG. The best healthcare, what we deserve. 

Dr. NOVACK. And the ultimate answer is trying to get patients 

and families involved on multiple levels to help try to make the 

best decision for them, because certainly in my world, taking care 

of a number of fractures and acute injuries, I don’t have the luxury 

of longstanding experiences with patients and families, so you need 

to be able to get data so that families can make the best decisions. 

Mr. WALBERG. Do you have any evidence, doctor, that competition and choice is a better way to increase value and reduce cost 

than Government bureaucracies and their expertise? 

Dr. NOVACK. Sure. Obviously, you have examples in certain parts 

of medicine where that does exist, but I think we can look, for example, in California more recently with what WellPoint has done 

with reference pricing for joint replacements, and by changing the 

structure, they have lowered the cost of joint replacements by 20 

percent in, I think, less than two years. So the idea of creating 

transparency and really giving the opportunity to create new creative ways where you bundle your services together, you can actually provide high-quality care at a lower cost that ultimately results in better patient satisfaction. 

Mr. WALBERG. Okay. Thank you. 

Dr. English, just to make sure it is clear where you stand, will 

Obamacare limit your patients’ treatments? 

Dr. ENGLISH. Yes. 

Mr. WALBERG. In your testimony you mentioned 10 medications 

for MS patients. A Washington Post article from two days ago said 

one-way insurance plans under Obamacare are keeping costs low 

by not covering widely used MS drugs and requiring doctors to prescribe drugs in a certain order, which would compel patients to 

take drugs more toxic to them, potentially. Have you found that to 

be the case? 

Dr. ENGLISH. This is our major concern, because I can’t impress 

upon you enough how variable patients are and the drugs that they 

need, and without the ability to move quickly to one and switch to 

37 

another. If I can’t do that anymore, that is what will get me out 

of medicine, not the reimbursement stuff. 

Mr. WALBERG. What does that do to your patients? 

Dr. ENGLISH. It is my teacher who is paralyzed, who I know I 

can do something for, but I can’t, and I have to watch her stay paralyzed. That is my concern. 

Mr. WALBERG. And puts them at risk, at the very least—— 

Dr. ENGLISH. Correct. 

Mr. WALBERG.—to take drugs that don’t impact them positively, 

let alone produce the change that is necessary. 

Dr. ENGLISH. Correct. 

Mr. WALBERG. You stated Obamacare punishes you because you 

care for the most vulnerable patients. How does it do that? 

Dr. ENGLISH. Well, let’s look at that. I think Congressman Issa 

had mentioned, too, or it might have been Congressman 

Cummings, about if our center closed down and I was looking for 

a job at a hospital, and 5,000 expensive patients were coming that 

was going to bankrupt my hospital, which ones do you think would 

sign up to take me on? I want to work, like University of Maryland, 

the trauma center, I learned there. That was incredible, taking 

care of the sickest of the sickest. But I loved doing that. And I don’t 

see how, under these payment models, that any hospital system is 

incentivized by taking care of the sickest patients; they would be 

disincentivized based on incomes. 

Mr. WALBERG. So what we are looking at is a two-tier, those that 

can afford it for specialized treatment, have the money to do that, 

and then all of the rest of us. 

Dr. ENGLISH. Correct. 

Chairman ISSA. I thank the gentleman. 

We now go to the gentlelady from New York, Mrs. Maloney. 

Mrs. MALONEY. Thank you, Mr. Chairman and ranking member 

for calling this hearing, and I thank all of the panelists for their 

testimony and participation, particularly Dr. McLaughlin, who is 

from the great State of New York, which I have the privilege of 

representing a portion of it. 

I do believe that you have raised some important concerns, but 

I truly do believe that the Affordable Care Act really is important 

legislation; and it is by no means perfect, but it really addresses 

some of the massive deficiencies in our Nation’s healthcare system, 

such as covering preexisting conditions and providing coverage to 

over 30 million Americans that did not previously have coverage. 

And while I do want to get to your concerns and understand them 

in a deeper way, I would like to take a moment to highlight some 

of the successes of the marketplace in my home State of New York. 

Earlier this week, the New York State of Health reported that 

over 314,000 New Yorkers had completed their applications for insurance and over 100,000 New Yorkers have enrolled for coverage 

starting on January 1st, 2014. And I understand that 70,000 selected a private insurance plan and one report stated that New 

York has the second highest raw enrollment numbers of any State. 

So there are some successes, but I do want to acknowledge that 

there is always room for improvement. And any massive new 

change in something as complicated as healthcare is going to have 

to face many improvements and we need to be willing to work toVerDate Aug 31 2005 13:43 Mar 26, 2014 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 C:\DOCS\87174.TXT APRIL
38 

gether on both sides of the aisle to correct deficiencies and challenges that we see during this implementation process. 

But, Dr. McLaughlin, I would like to understand the concerns 

that you raised today, and I want to make sure that I understand 

completely your situation. You stated that you received notice last 

month from an insurance company stating that you would not be 

extended participating status on the new insurance plans in the 

Pathway network. Is that correct? 

Dr. MCLAUGHLIN. Yes, councilwoman, that is correct. 

Mrs. MALONEY. And what about other insurers, did you get similar letters from other insurers? 

Dr. MCLAUGHLIN. Well, the way this works is the insurance companies can only approach those physicians that happen to be already networked with them, under contract to them. So, for instance, I am not in the Emblem system, so they cannot approach 

me or do anything to me involuntarily. And that is important to 

understand. 

Mrs. MALONEY. But can you approach them, another insurance 

company? Would you be willing to participate in any plan on the 

exchange? Can you approach another plan? 

Dr. MCLAUGHLIN. I am assuming that that door may be open; 

however, what is clearly evident by the plans that I am already 

under contract to, BlueCross for the main one, they made a decision, for whatever reason, that they had enough participating physicians to form this Pathway network, which I might add, by just 

looking at the ophthalmologists serving Manhattan in that list, 

came to less than 150 names, of which most of them were in solo 

practices with no affiliation to large group contracting forces. So 

these physicians happen to be under contract to that company for 

the lowest fee reimbursement for the same service that another 

physician who is part of a faculty practice or a large group practice 

would get. And as insane as that sounds for doing the same work, 

physicians are paid differently in the current system depending on 

how large a group you belong to and what negotiating power comes 

with those numbers. 

Mrs. MALONEY. Well, have you appealed the decision? I know 

that they are trying to save money. In fact, the New York State 

testified or released a report saying that the people that had enrolled, 100,000, were seeing premium rates that are as much as 53 

percent lower than the rates in effect in 2013 for comparable coverage. So that is great news for them, but they are looking for services that are more affordable. But you can appeal these decisions, 

as you know, and, as you know, particularly in New York State, 

that is being run by the State, and State insurance is regulated by 

the State, and you can appeal to the New York State Insurance 

Commissioner, and I would be happy to work with you in setting 

up such meetings if you would be so interested. But have you appealed the decision? 

Dr. MCLAUGHLIN. There was not an opportunity mentioned in 

that letter for appeal, it was a unilateral decision. There was no 

notice in there that I even had a right to appeal. I must say also 

that I had an amended contract to my United Healthcare participating status, and that also said that because I was not in an Oxford Liberty current network, I would not be put onto the AffordVerDate Aug 31 2005 13:43 Mar 26, 2014 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 C:\DOCS\87174.TXT APRIL
39 

able Care Act insurances. So that was an automatic opt-out. Not 

an automatic opt-out; I wouldn’t be in it. And for those doctors who 

were in the Oxford Liberty current plan, once they see their fee 

schedule, they could then opt-out. 

Mrs. MALONEY. And you can also get a navigator to help you or 

broker to determine what plan would be best and to help you with 

your appeal, but I would be delighted to help you with an appeal 

if you are so interested. 

Chairman ISSA. I thank the gentlelady. 

We now go to the gentleman from Oklahoma, the head of our Energy and Healthcare Subcommittee, Mr. Lankford. 

Mr. LANKFORD. Thank you, Mr. Chairman. 

Thank you all for what you do and the way you are taking care 

of patients. You are going through a lot of paperwork and a lot of 

process right now that I can imagine the incredible amount of frustration that every day you are getting a new regulation, a new 

rule, or a new something that is coming out at you while you are 

trying to just take care of people and patients, what you love to do. 

So I want you to know from us we appreciate what you are doing 

and how you are trying to focus on taking care of people. 

The problems are very, very real you all are experiencing on the 

ground. We hear about them in our offices all the time. The numbers are out. For the first two months of enrollment in the Affordable Care Act in my State, in Oklahoma, they are now up to just 

over 1,600 people have been able to sign up in my entire State. To 

give you a point of reference, 1400 companies got a letter two 

months ago that their insurance was canceled because they were 

in a small business group just in Oklahoma City. So just in one 

town in my district 1400 companies received a letter all in the 

same day that they had all been canceled because their association 

is no longer legal and they are out looking. And now we have had 

1600 people total in the entire State have been able to sign up. 

One of those was a small car dealership in Oklahoma City with 

14 employees. They now are having to select a different insurance 

policy, a different company, and as the owner of the car lots told 

me, we can either select a plan that is much more expensive than 

what we had last year, but keep our doctors, or pay the same as 

what we had last year, but we all have to switch doctors. But we 

can’t do both. We can’t both keep our plan and keep our doctors 

or keep the price and keep our doctors; we have to choose on it. 

And it has been a very difficult process for them as a small business, as it is facing a lot of small businesses across our area. 

Dr. McLaughlin, you mentioned that even with your own practice. That is becoming a big issue. It is one of those many things 

that is out there. 

So let me just ask a couple questions about processing. By one 

count, this law creates about 159 new boards or agencies. We asked 

the Congressional Research Service to try to determine how many 

boards or agencies are created by this. They said it is not knowable 

at this point exactly how many. 

Dr. English, you mentioned multiple times the difficulty of decisions being made in Washington, D.C. and getting passed on to 

you, and I have direct family members that have MS, and I am 

very familiar with the process and the drugs and what is going on. 

40 

So I am trying to process through 159 different agencies that are 

all setting these different rules and you get instructions about how 

to take care of your patients. What does that do for you day-to-day? 

Dr. ENGLISH. Well, let me give you an example. I have, for the 

first time in my career, had patients who are healthy previously 

not walking, etcetera, on a medication doing great who are crying 

in my office. People are really afraid, as you are seeing as well. 

They don’t know whether their medication is going to be covered. 

I am filling out forms. Patients who are stable on medications, but 

they are not on the list anymore of the restricted provider list. 

Mr. LANKFORD. So we are talking about people that are currently 

under medication doing better, stabilized in the process, that instructions are coming down to them to say we may have to switch 

the regimen for treatment to a different drug or a different treatment regimen when they are currently stabilized right now. 

Dr. ENGLISH. Correct. 

Mr. LANKFORD. That sounds like someone in Washington telling 

you how to take care of a patient that is doing well with their 

treatments, and saying we are going to experiment with a different 

way to do this with your patients. 

Dr. ENGLISH. And in the Georgia State exchange we have no idea 

what medications are going to be available to those patients and 

then, again, we are less than a month away from patients coming 

to my office on those insurance plans. 

Mr. LANKFORD. And the current system, as it has been set up, 

is there a discouragement to take the more complicated patients. 

So the more complex the case is, the more that that is discouraged 

financially and in every other way from the Federal Government 

and from the system, is that correct? 

Dr. ENGLISH. The current system in the ACA, the current system 

before—— 

Mr. LANKFORD. The current system, ACA, that is coming at us. 

Dr. ENGLISH. As we discussed in my testimony, there are many 

things that will be discouraging me to take care of the sickest patients, yes. 

Mr. LANKFORD. Dr. Novack, you mentioned before all the issues 

with Medicaid that are out there based on the reimbursement rates 

and the number of physicians that do that. Half of the people that 

have now signed up for insurance nationwide are not signing up for 

private insurance, they are in State Medicaid programs. While they 

have access to care on that, what are the issues that they are going 

to face in the days ahead? 

Dr. NOVACK. Well, I think the first issue, again, I think the 

crowd-out issue is something we really can’t discount. Jonathan 

Gruber, who was really the architect of Romneycare and he was 

really an architect of the Affordable Care Act, his own research 

that he did originally in the 1990s and then repeated in 2007 

showed half the people who ended up on the Government program 

lost private care. Again, the more recent study from Austin Frakt, 

I believe from one of the Boston area universities, showed that up 

to 80 percent of the people who will end up on expanded Medicaid 

will lose their private health insurance. 

When you look at the smaller networks, when you look at the 

lower payment rates that discourage people to accept it or create 

41 

long waiting lists to get access to it, I think, again, there will be 

a few winners, but ultimately the number of losers is going to be 

a lot greater. And we see in orthopaedics in Arizona that access to 

certain kinds of durable medical equipment, access to getting physical therapy after an injury in terms of limits, access to certain 

medications, all of those are severely restricted under Medicaid relative to what was existing in the commercial market. 

Mr. LANKFORD. There is a tremendous difference between the 

hope of what this would be and the reality of what it actually is 

on the ground. 

Dr. NOVACK. Yes. 

Mr. LANKFORD. With that, I yield back. 

Chairman ISSA. I thank the gentleman. 

We now go to the gentleman from Pennsylvania, Mr. Cartwright. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman, and thank you for 

all the witnesses appearing today. I believe the Affordable Care Act 

is a landmark law. It is obviously, by no means, perfect, it needs 

a lot of work, but all of us need to roll up our sleeves and work 

together and make it better. 

I had planned to ask all of the witnesses questions about provider networks, including Dr. Feder, but, unfortunately, the Majority didn’t inform us they decided to change the panel structure 

today. They didn’t inform Dr. Feder, either. Dr. Feder was here 

and ready to testify at 9:30. I would say that the fact that she is 

here and waiting for the second panel, while we are not including 

her now, is disappointing. 

But, Dr. McLaughlin, I was interested in your testimony and 

your comments, and I would like to follow up on some of the things 

that Congresswoman Maloney covered with you. It is my understanding that—well, a large part of your testimony has surrounded 

the fact that you got dropped by Empire BlueCross and BlueShield, 

right? 

Dr. MCLAUGHLIN. As a participating provider in the new plans 

that they are developing for small businesses off the Affordable 

Care Act exchange, as well as those serving the ACA. 

Mr. CARTWRIGHT. All right. And not to put too fine a point on it, 

you are still waiting to hear about the larger employers, whether 

you will be included in that coverage. 

Dr. MCLAUGHLIN. No, I am completely in that. 

Mr. CARTWRIGHT. You are in that. 

Dr. MCLAUGHLIN. For now, yes. 

Mr. CARTWRIGHT. Okay. So we want to look into why these 

things happen. You got less than a full explanation from Empire 

BlueCross and BlueShield, am I correct in that? 

Dr. MCLAUGHLIN. Yes. And everyone who is on my associated 

hospital staff had the same letter. This is not an isolated letter, 

this is clear across the board. 

Mr. CARTWRIGHT. Right. So if I am not mistaken, you got the 

Empire BlueCross Blue Shield letter on October 29th of this year, 

am I correct in that? 

Dr. MCLAUGHLIN. Yes. 

Mr. CARTWRIGHT. Okay, so I want to talk about what efforts you 

have made in the couple of months since then to go over what the 

situation is and see what light you can help us shed on the situaVerDate Aug 31 2005 13:43 Mar 26, 2014 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 C:\DOCS\87174.TXT APRIL
42 

tion. So I think you said you saw about 150 names of ophthalmologists who are included in the system, is that correct? 

Dr. MCLAUGHLIN. That is correct. 

Mr. CARTWRIGHT. Did you make an effort to compare different 

sets of facts, for example, compare your own credentials with those 

of the other ophthalmologists who made the list? I assume you are 

board certified, for example. 

Dr. MCLAUGHLIN. It is not based on that. We are all equal. What 

the basis clearly is is the original fee schedule of the networks that 

the doctors are in. And, as I said, if you are a complete solo practitioner, not part of a large group who negotiates a fee schedule with 

the insurance companies, you get what is called the standard rack 

rate from the insurance company, and those preferentially are 

those doctors that are on this network, they are the lowest paid of 

the physicians, and that is clearly what the decision is. 

Mr. CARTWRIGHT. I don’t mean to belabor the point, but are you 

saying you haven’t really engaged in a comparison of your own credentials with those of the 150? 

Dr. MCLAUGHLIN. There is nothing to compare. This is across the 

board. Everyone who is at my hospital was not offered the status. 

We are all of equal rankings, do the same work, the same exams. 

That is not what this is about. 

Mr. CARTWRIGHT. So you think it is more about pricing, it is 

about money. 

Dr. MCLAUGHLIN. It is clearly about money. 

Mr. CARTWRIGHT. All right. Well, let’s take that, then. Have you 

compared the pricing? Have you compared how much it costs people to get treated by you and the other people who got dropped 

versus the people who got accepted into the system? 

Dr. MCLAUGHLIN. Well, first of all, I would have no way to compare that. There are quite a bit of regulations on us, also, as far 

as fee schedules. We have antitrust regulations and we are not allowed to collectively negotiate, so, in honesty, I would have no idea 

to know pure facts as to what someone is being paid compared to 

myself. 

Mr. CARTWRIGHT. Well, obviously somebody engaged in that comparison; that is why some people made the list and some people 

didn’t. 

Dr. MCLAUGHLIN. That is right. That is maybe for you to find 

out. 

Mr. CARTWRIGHT. Thank you. 

Dr. MCLAUGHLIN. You are welcome. 

Mr. CARTWRIGHT. But another thing you mentioned was this 

idea, and I had heard it before, that if you want to protect yourself 

as a physician, you want to join groups, and the bigger the group 

you are in, the more protection you have as we enter the new age. 

You are a solo practitioner, am I correct in that? 

Dr. MCLAUGHLIN. That is correct. 

Mr. CARTWRIGHT. So intertwined with that thinking, you have 

the least protection of anybody entering the new age, and I want 

to ask you hadn’t you heard this, hadn’t you heard what I had 

heard, that you were going to protect yourself by joining medical 

groups? 

43 

Chairman ISSA. The gentleman’s time has expired. The doctor 

may answer. 

Dr. MCLAUGHLIN. Well, let me just share this with you. I had 

been, for eight years, a full-time faculty member at a major hospital in New York and enjoyed my time there. But I also saw the 

benefit of being able to be a physician, to make choices for the patient care in a way that I see fit, and the best care that I see fit 

for the patient that works for me and my patients. I don’t want to 

give up that freedom by joining a larger group that has a non-physician administrator telling me how fast I have to see a patient and 

what I can or cannot do for them. That is a choice that I have in 

this Country, thank God, and I want to keep it for my patients’ 

sake. 

Chairman ISSA. I thank you. 

We now go to somebody who knows about patients’ care, first on 

the list, Dr. Gosar. 

Mr. GOSAR. Thank you, chairman. 

Dr. Novack, can you discuss for me the confusion your patients 

are feeling about Obamacare, your services, and then also touch a 

little bit about urban and rural? You know, we are from Arizona, 

so there is definitely a dichotomy going on here. 

Dr. NOVACK. Sure. I think that if there is one term, regardless 

of your political party preference, that describes whether it is providers or patients or administrators or staff, it is confusion, because 

no one really knows. And I have 100 patients a week coming 

through, the bulk of whom will actually ask that question, because 

they know I am involved in different policy issues, and my answer 

is we just don’t know. They don’t know what plans are going to be 

available. They don’t know what services are going to be available. 

They don’t know what medications are going to be covered. They 

don’t know which hospitals they are going to be allowed to go to. 

So the issue here is basically abject confusion, and no one knows 

what is going to happen January 1st. And to say that that was an 

unforced error because of political realities, the great tragedy are 

really the tens of millions of Americans and hardworking American 

families that have been suffering emotionally because of the uncertainty that the law has created, because of work that was not done, 

the lack of transparency, the unwillingness to release regulations. 

I have patients who work for insurance companies, and I was 

hearing from them throughout the summer that they didn’t even 

know the requirements that they were going to be forced to put 

into the software that they had to write. We are hearing that they 

are being required to be responsible for the data on these servers, 

but they are not allowed to get access to the servers to be able to 

test the integrity of the data that they are being held responsible 

for. 

So at every single level, unfortunately, the claims that were 

made to pass the law are not the reality, and the losers—this is 

not about the three of us up here, it is not about the dentists, it 

is about the fact that we do need to do something about preexisting 

conditions, but that was a small part of the population. The same 

amount of people basically that folks have recently been saying 

that, oh, it is a small number, don’t worry about them that are getting their policies canceled, it was really only 10 to 15 million peoVerDate Aug 31 2005 13:43 Mar 26, 2014 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 C:\DOCS\87174.TXT APRIL
44 

ple that had these chronic conditions, and we could have addressed 

that. Instead, we have totally uprooted essentially everybody. 

Real quickly about the Medicare Advantage issue. There is nothing tangential to the changes in Medicare Advantage as it regards 

the Affordable Care Act. Remember that the Affordable Care Act 

cuts between $130 and $150 billion out of Medicare Advantage this 

decade, and that is why you are seeing these cuts to Medicare Advantage networks. 

Mr. GOSAR. So when you are talking about preexisting conditions, I am going to ask you and Dr. English, we just exchanged, 

as the ranking member talked about, a prejudice to preexisting 

conditions, we just traded one prejudice for another. Would you 

agree with that? 

Dr. NOVACK. Correct. 

Mr. GOSAR. Dr. English, would you agree with that? 

Dr. ENGLISH. Correct. You haven’t, in my opinion, increased care, 

you shifted care, and that is quite obvious. 

Mr. GOSAR. Well, I want to get to that and I really want to applaud you. I have family members and dear friends that have MS, 

so thank you very, very much. But there is prejudice now because 

we are talking about acute care versus chronic conditions, right, 

Dr. English? 

Dr. ENGLISH. Correct. 

Mr. GOSAR. So you are handicapped when we are talking about 

chronic care, are we not? 

Dr. ENGLISH. Correct. 

Mr. GOSAR. And so we are asking you to decrease time, reduce 

reimbursement, reduce the possibility of drugs, reduce your opportunity to individualize individual treatment modalities. But I have 

a question for you. Did you see any tort reform in this bill? 

Dr. ENGLISH. No, sir. 

Mr. GOSAR. Dr. Novack, did you see tort reform in this bill? 

Dr. NOVACK. No. 

Mr. GOSAR. Dr. McLaughlin, how about you? 

Dr. MCLAUGHLIN. Absolutely no. 

Mr. GOSAR. Have you ever heard of solving a problem without 

putting everything on the table, Dr. English? 

Dr. ENGLISH. Say that again, please? 

Mr. GOSAR. Have you ever heard of solving a problem, but not 

putting everything on the table? 

Dr. ENGLISH. No. 

Mr. GOSAR. It is foreign to me. 

Dr. NOVACK. And the law did actually approve the opportunity 

for some demonstration programs for medical liability reform, but 

in the law, the plain language of the law says you may not do any 

demonstration program that includes any limits on non-economic 

damages. So the constraints were fairly significant. 

Mr. GOSAR. Dr. McLaughlin, I want to go back to this. Reducing 

time for physicians to see their patients, we are reducing the reimbursement rates, we are reducing the panels, all choreographing 

hurting the patient. Would you agree? 

Dr. MCLAUGHLIN. Absolutely. 

45 

Mr. GOSAR. You made the comment that you want to practice 

medicine your way. You want to individualize, take your time, how 

you see fit, individualize the treatments, right? 

Dr. MCLAUGHLIN. Yes, sir. 

Mr. GOSAR. How do you feel most patients would like it, would 

they appreciate your thoughtfulness? 

Dr. MCLAUGHLIN. Absolutely, because over and over again I will 

have patients returning to me, perhaps even out of network, as 

they go to some of these larger group practices where physician extenders are employed to process patients literally through a 

quicker assembly line so that that facility can reap more benefits, 

cost-wise, out of the poorer reimbursements, but they may actually 

only have two to three minutes of face-to-face physician time in 

that. And most people are often told to bring a companion with 

them, because when you are the one that is seeking care, you are 

only observing half of the response from that physician, and you 

are losing the other half, which is why most of us actually face 

umpteen phone calls after the fact, because there is something they 

forgot to ask or something they didn’t understand. So you can only 

imagine how that problem is magnified with only two minutes of 

face-to-face time with the doctor. Patients are generally nervous 

under those conditions. 

Chairman ISSA. I thank the gentlelady. 

Dr. Novack, I just want to make sure the record is clear. When 

you were talking about what wasn’t in the Act in tort reform, you 

were talking prohibition on MICRA, like they have had in California since the 1970s, limitations on things over and above full 

compensation for actual loss, is that correct? 

Dr. NOVACK. Correct. I think there is a little bit of money for 

demonstration projects in the States, but in the law it actually says 

those demonstration projects may not include any demonstrations 

that include any limits on non-economic damages. 

Chairman ISSA. Thank you. 

The gentleman from Nevada, Mr. Horsford. 

Mr. HORSFORD. Thank you, Mr. Chairman. The title of this hearing is Obamacare’s Impact on Premiums and Provider Networks, 

but the majority of the opening testimony has largely focused on 

inadequate reimbursement from Medicare and Medicaid rates, 

which private insurance companies use, in large part, to set their 

own rates. So weren’t the issues related to reimbursement rates 

under Medicare and Medicaid issues for the provider community 

before Obamacare and the Affordable Care Act were even law? Yes 

or no? 

Dr. NOVACK. There is no question, but I think, and I will speak 

a little bit, is that if the title is about provider and provider networks, we need to look at this is not about us, right, it is about 

how do we get the maximum number of people the best personalized healthcare we possibly can. And the practical reality is our 

large group employs nearly 500 people—— 

Mr. HORSFORD. With all due respect, my question was are Medicare and Medicaid reimbursement issues issues that the provider 

community were dealing with prior to the Obamacare, Affordable 

Care Act ever becoming law, yes or no? 

Dr. NOVACK. Yes. 

46 

Mr. HORSFORD. The rest of the panel? 

Dr. MCLAUGHLIN. Yes. 

Dr. ENGLISH. Yes. 

Mr. HORSFORD. So isn’t the real issue that you all, as the provider community, want this Congress to focus on, as many of the 

doctors in my district in Nevada have talked to me about, is the 

need to reform the reimbursement rates under Medicare, specifically the SGR? Isn’t that the focus that would help to address a 

large part of this problem? 

Dr. NOVACK. I will speak for myself, and I would say, Congressman, I don’t think so. This isn’t about creating a new Washington 

system to have to figure out how to pay people to provide care. This 

is much more broadly about how do we establish policies to allow 

patients and families to remain in control of their healthcare and 

healthcare decisions. So—— 

Mr. HORSFORD. So why did you guys bring up the reimbursement 

rates under Medicare and Medicaid as one of the reasons why 

there is this lack of adequacy of network providers within some of 

the plans? 

Dr. NOVACK. I would say it is one of the reasons, so it makes an 

impact. 

Mr. HORSFORD. So if the Congress could help address the reimbursement rates and reform SGR, would that help or hurt the process? 

Dr. NOVACK. I think it all depends upon how it is done. And 

again I would refer you back to the position of the Obama Administration, who said in a court filing this year that there is no general 

mandate under Medicaid to reimburse providers, including hospitals and that, for all or substantially all of their costs. So the position of the Administration seems to be—— 

Mr. HORSFORD. But SGR is focused on Medicare. 

Dr. NOVACK. But I am just saying that the position is—— 

Mr. HORSFORD. It is not the same thing. You are giving me a reference that is not my question. My question is on the SGR, which 

is largely the basis for how reimbursement rates to doctors are established by the private insurance companies. 

Dr. NOVACK. I think that things would be improved if there was 

not an annual uncertainty every year for us to say that on January 

1st, 2014, we are getting a 25 percent cut, so we tell our patients 

that under those conditions we cannot continue to see you, so we 

have to decide if we are going to be willing to see Medicare patients 

until Congress chooses to fix the problem every year. 

Mr. HORSFORD. So if the Congress worked to fix the problem 

with the lack of reimbursement to cover the cost to the providers 

providing care under Medicare and Medicaid, that would help, not 

hurt, correct? 

Dr. NOVACK. I think it would—depending upon how it was done, 

it might help, but there is always the possibility that new policies 

could not be helpful. 

Mr. HORSFORD. Okay. Well, later today we will be voting on a 

budget deal that includes a rule on the SGR extension for another 

three months. Not reforming it, not increasing the reimbursement 

rates like doctors in my State of Nevada want us to do because 

they are not covering their costs, it is just extending it for another 

47 

three months. So I would just hope that at some point in the Government reform part of this committee we would work to bring forward those bills. I have signed letters with my colleagues on the 

other side in favor of these reforms. I am prepared to work on legislation to bring these needed reforms forward. 

But instead we are having kind of these dog and pony kind of 

show hearings that don’t get at any of the real reforms to make the 

law work better, or to address other issues that are unrelated to 

the law. Medicare and Medicaid reimbursement issues for doctors 

were a problem before Obamacare, before the Affordable Care Act 

was put into place, so to somehow suggest that it is because of the 

Obamacare that these issues are happening is to fail to recognize 

the history of the problems in the healthcare system to begin with. 

Chairman ISSA. Would the gentleman yield? 

Mr. HORSFORD. No, Mr. Chairman, I just want to conclude 

my—— 

Chairman ISSA. The gentleman’s time has expired. 

We now recognize the gentleman from Tennessee, Dr. DesJarlais. 

Mr. DESJARLAIS. Thank you, Mr. Chairman. I would be happy to 

yield a minute to you to finish your thought. 

Chairman ISSA. Thank you. 

I was only going to say that I wasn’t here in 1997, when they 

scored a big savings based on a theoretical reduction in the cost of 

doing business. You weren’t here. It is something that I agree with 

the gentleman, we need to realize that simply paying doctors less, 

and then reneging on agreeing to pay them less when the real costsavings didn’t occur because we never legislated or did anything to 

help drive down the cost of delivery, is in fact a very good point, 

and I agree with the gentleman that that fundamental change, 

which was scored before you and I got here, is not about just paying doctors more, because we did say we are going to find ways to 

be more efficient in what drives their cost up. So I look forward to 

working with the gentleman on that. It won’t come to our committee, but I would certainly be happy to work with the gentleman 

to try to drive down the cost of doctors delivering quality 

healthcare. 

And I thank the gentleman for yielding. 

Mr. DESJARLAIS. Certainly. Reclaiming my time. I will also add 

that we just had a Doctors Caucus meeting this morning. As you 

know, there are markups pending in Ways and Means and Energy 

and Commerce dealing with an SGR replacement. There is going 

to be a three-month patch, but we are working with the 15 members of our GOP Doctors Caucus, as well as our dentists and our 

nurses, and we are going to try to find something that has a sensible approach to reimbursing physicians, unlike the SGR, which 

over the past 15 years has yielded nothing, I think, but a 1.9 percent increase; and I think most industries would have a hard time 

making that work with rising costs in other areas. 

I wanted to put up a video, if we could. 

[Video shown.] 

Mr. DESJARLAIS. Okay, I am sure this is probably something 

most everyone in this room has seen or heard, maybe everyone 

across America, and practicing primary care medicine for the 20 

years before coming to Congress, I know that a lot of my patients 

48 

who had insurance probably believed the President. If you had an 

insurance plan that you liked and you had a doctor you liked, and 

you were given that clear assurance over and over again, right up 

through 2012, right before the election, I am sure a lot of your patients were secure that maybe this healthcare law wasn’t going to 

impact them. Well, now they are finding out that that is simply not 

the case. 

So I would ask you—we can just go down the line—what are 

your patients finding and feeling when they, all of a sudden, realize 

they have been duped? 

Dr. ENGLISH. Well, again, there is fear because they have an established relationship and patients will follow their doctors. What 

is wrong about the last part of that video is, as I said, if you are 

in a different part of Georgia and your exchange does not have me, 

but then you go into that exchange three hours away, now your primary doctor is three hours away too. So you can’t just pay more 

to see us anymore; you are excluded if we are not on that list. And 

United Healthcare’s website says I am non-preferred, so you can 

still see me, but you have to pay more because your doctor is being 

penalized because he takes care of sick people. 

Dr. MCLAUGHLIN. The patients are numb. I think that is about 

all I can say. 

Mr. DESJARLAIS. Okay. 

Dr. MCLAUGHLIN. And many of the patients who had a State 

subsidized plan in New York called Healthy New York received letters that that plan would end and they would have to go into the 

New York marketplace. I actually approached many of those patients that were in my practice; they never bothered to open the 

mail. They didn’t even know that their plan terminated; I was the 

one that informed them. So these patients are numb, they are 

upset. And as you know as a primary care doctor, you don’t work 

alone, you work with specialists. So Rahm Emmanuel had said that 

you can pay more for a plan that has your doctor. Well, it may 

have your doctor, one of them, but it may not have the four or five 

specialists that you see also. So there is a discontinuation of care 

no matter how you look at this. 

Mr. DESJARLAIS. Dr. Novack, I am going to finish because you 

bring up a great point. Supporters of the healthcare law claim that 

30 million people will gain insurance. Can you explain the difference between having a health insurance card, particularly one 

for a Government program, and having access for care? And I will 

just preface that with I came to Tennessee in 1993, a year before 

TennCare was instituted, which was a model for what we are experiencing now, and it didn’t work. So I think you know very well 

that somebody can come in with that card and they need maybe 

an orthopaedic surgeon, and if you are in a rural area, they may 

have to go 100 miles or more to try to find that doctor and you 

might have to hire extra staff just to stay on the line at night, after 

clinic hours, trying to find a referral or someone who can accept it. 

What are your experiences with that? Do you think it is a good 

idea to reform healthcare based on the expansion of Medicaid? 

Dr. NOVACK. I don’t think the data suggests that is a particularly 

good idea, and I think it is the unfortunate reality. And to touch 

on what you said, I know Congressman Gosar, the last time I was 

49 

here, made that point exactly in his opening remarks, that what 

we are seeing, unfortunately, is that a plan that was supposedly 

designed to help those who need the most, we are seeing in rural 

areas there are fewer and fewer doctors available, and we are seeing in inner cities the closure of clinics, the moving out of primary 

care doctors, the near complete absence of specialists in many 

cases. So, unfortunately, the groups that we really do want to do 

things to be able to help, unfortunately the law, while well intended, I just think we need to recognize is not doing what it said 

needed to be done. So this is beyond tinkering to make it better; 

this needs essentially a complete revamping and address the real 

problems. 

Chairman ISSA. I thank the gentleman. 

We now go to the gentleman from Virginia, Mr. Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman, and thank you to our 

three panelists. 

One might be forgiven, looking at this panel and the theater of 

it. Frankly, if Democrats had had the chance to put together a 

panel of three doctors, I guess we could ask you to wear your white 

coat. And I guess we could find three doctors, I know we could, who 

would praise the plan. But the idea, and this doesn’t in any way 

disparage the value of your opinion or your experience, but the idea 

that your experience is to be generalized as universal is false, and 

it is a false premise and it does a disservice, in my opinion, to this 

discussion. 

None of you are policy experts and none of you universally speak 

for your profession. You were asked at one point, by one of our colleagues, about how difficult it is to sign up. Well, if we are going 

through anecdotal experience, I can tell you that I and my entire 

staff must go on the exchange on Obamacare. All of us signed up, 

met the deadline. If you are under a certain age on my staff, the 

average premium cut ranges from 30 to 70 percent. They are happy 

as clams. The deductibles are comparable or better; the copays are 

comparable or better. I can tell you in my district of small businesses, who are crowing about the fact that when they went on the 

exchange they had better choices than they have currently. I talked 

to one the other day with four or five employees; he is going to save 

$6,000 to $7,000 a year. 

It isn’t an honest intellectual pursuit to deliberately cherry-pick 

facts and to deliberately put together a panel of critics of a piece 

of legislation that is admittedly complex. 

You were asked about tort reform, as if tort reform was dispositive on the cost of healthcare. It is not. It is a factor, but, of course, 

what the questioner didn’t say as a prelude to his question was, of 

course, on our side of the aisle we decided, a priori, to oppose it 

no matter what was in it. We didn’t give it a chance. And the fact 

that an entire party decided to take a powder on a major piece of 

legislation precisely meant tort reform wouldn’t be at the table in 

a meaningful way, at least as determined by them. Of course not. 

We had a prominent Republican Senator in the other body who 

said if we defeat healthcare—this was before we even knew what 

was going to be in it; it didn’t matter—it will be Obama’s Waterloo. 

That tells you everything you need to know. It wasn’t about 

healthcare. It wasn’t about the quality of healthcare. It wasn’t 

50 

about whether you are in a plan or you are properly reimbursed. 

It was about a political game to try to make him a one-term president, and it didn’t work. 

I hope some day we have a substantive hearing where we actually, as Republicans and Democrats, try to find out what is working, what isn’t, and make it better. That is the history of transformative legislation in this field. Unfortunately, it is not the history here. We spent 46 votes in this Congress to simply repeal it, 

defund it, or gut it; not based on substantive analysis, not based 

on experience, but based on a political predilection to oppose this 

bill and this President, even though there are elements in the bill 

that actually came from Republican think tanks, the individual 

mandate being one of them. Not a Democratic idea; a Republican 

idea. 

So I am glad you are here. Certainly have enjoyed listening to 

your testimony, but I have to put it in a different context. You will 

forgive me. And it is too bad that the panel couldn’t have been 

more balanced and it is too bad Dr. Feder is kept waiting, when 

she was under the impression, as were we, that she could join this 

panel to provide a different perspective. 

I yield back. 

Chairman ISSA. I now ask unanimous consent that the gentleman from Virginia, Mr. Connolly’s website, which I will put up 

there, from 2010 be placed in the record, in which he says, for the 

past years my constituents have told me we want health insurance 

reform, but only if it meets certain tests, Connolly said. Will it 

bring down premiums for families and small businesses, will it reduce the deficit and will it protect choice of plan and doctor? 

Without objection, so ordered. 

Chairman ISSA. We now go to the gentleman from—— 

Mr. CONNOLLY. Could I inquire of the chairman? 

Chairman ISSA. YES. 

Mr. CONNOLLY. Is it going to be the practice of this chairman to 

start to actually individually put members’ websites into the 

record? Because we would be glad to return the favor on this side 

of the aisle. 

Chairman ISSA. I have no problem at all. I asked for it because 

it was germane to your anecdotal statement of objection to their 

anecdotal statements, so it just seemed appropriate. And good 

staffing, as you know, Gerry, somebody looked and said, heck, 

Gerry used to be for what these people are testifying we are not 

getting, that is all. 

Mr. CONNOLLY. I stand by the website. Those were the three criteria I used, and that is why I voted for the bill and continue to 

support it, Mr. Chairman. So happy to have it. Just wanted to 

make sure—— 

Chairman ISSA. No, we put it in because it was a historic piece. 

And, candidly, the requested individual from your side of the aisle 

is on the next panel, along with all the other non-medical doctors, 

and that is the reason it was divided. Medical doctors who were 

giving their anecdotal examples of what they see as practitioners, 

current practitioners, and then the think tank crowd will be next. 

And hopefully you will not disparage the think tank crowd for not 

being doctors. 

51 

Mr. CONNOLLY. No, Mr. Chairman, absolutely not. 

Chairman ISSA. Thank you. 

Mr. CONNOLLY. There was no disparagement of doctors, there 

was just a cry of the heart that some Democratic doctors not be at 

the panel. 

Chairman ISSA. If you had suggested one, we might have had 

him. 

Mr. Cummings. 

Mr. CUMMINGS. Just for a second, Mr. Chairman. I would hope, 

Mr. Chairman, that we would not be engaged in putting members’ 

campaign website stuff up or whatever. 

Chairman ISSA. This is not a campaign. We would not—— 

Mr. CUMMINGS. Whatever. 

Chairman ISSA. No, we would not put a campaign website. 

Mr. CUMMINGS. What was that? 

Chairman ISSA. This is in fact official property of the House of 

Representatives. 

Mr. CUMMINGS. I just want to make sure. I am just so concerned 

that we stay focused on this and not be distracted by certain 

things. I thought it was a website campaign, and I think—but 

thank you very much. 

Chairman ISSA. No, no, I appreciate it. But the reason we chose 

this was that it was said on the floor of the House, it is on a Government site, and it is pursuant to exactly why we chose this question, which is what is the impact to doctors. I know a couple weeks 

ago, when we were looking at failures of the website, something 

that we all are working on reforms to fix, we had a discussion 

about what about what about the fundamentals of the healthcare. 

Mr. Cummings, I will say something to you here today. You and 

I do not control, we were not the committee of jurisdiction for the 

Affordable Care Act, but the exact problems that these doctors are 

talking about are what we have to take a leadership role in fixing. 

Mr. Horsford has left, but a lot of it began in the 1990s, when we 

thought we could simply pay less from the Federal docket in Medicare and Medicaid reimbursement. These are problems that are 

longstanding. The reason I am having them here today is I agree 

with what you said to me in a sidebar, which is when are we going 

to start fixing some of the individual parts of it. The Affordable 

Care Act is not going away in totality, but these doctors, and I take 

Dr. English particularly, are telling us about a chronic problem, 

which is are doctors being incentivized not to take the tough patients. And in some cases, and Mr. Cartwright alluded to this, in 

some cases it is our Government reimbursement. In some cases it 

is how insurance companies are reacting. 

And I will pledge to you today I will treat how the Government 

acts and how insurance companies act the same in trying to get 

these doctors to be able to practice what they do. And we can have 

a discussion about how much reimbursement comes out of tax dollars, but hopefully today, both in the first and second panel, we are 

dealing with what is happening currently so that we can fashion 

some legislation that has to be bipartisan if we are going to fix it. 

Mr. CUMMINGS. Well, thank you, Mr. Chairman. I just want to 

make sure we stay on track. I keep going back to what Dr. 

McLaughlin said. She said fix it, and it can be fixed. By the way, 

52 

Mr. Chairman, I appreciate what you said to Congressman 

Horsford, because he did raise some very legitimate concerns and 

I think that we can work in a bipartisan way. We can help these 

doctors be effective and efficient in what they do and help the 

American society. So thank you very much. 

Chairman ISSA. Thank you. 

The gentleman from Georgia. 

Mr. WOODALL. Thank you, Mr. Chairman. 

I thank you all for being here. My colleague from Virginia characterized you as Obamacare critics. I would not characterize you 

that way. I don’t know how you would characterize yourself. I 

would characterize you each as patient advocates. And if that leads 

you to be critical of the Obamacare legislation, then fair enough. 

But to the gentleman’s point, I thought he was exactly right: find 

out what is working and what is not, and make it better. I wish 

that had been the counsel this Congress had applied before the 

passage of the President’s healthcare bill, because each of you has 

made testimony about patients that you had, patients that were receiving care, patients that were given the individual attention that 

they need, who will no longer because of this new legislation. Those 

folks weren’t having problems; we created those problems. And you 

all are in the caretaking business much more than I am. 

But the stories that you tell that touched me the most are the 

tales of the problems that we create, the uncertainty that you mentioned, Dr. Novack. There is no way to take those fears away. 

Those fears are real for those families today. If, six months from 

now, those fears turn out to be unrealized, we still won’t be able 

to take away the pain and frustration those families have experienced today. 

I tell everyone at town hall meetings that I thought the President identified exactly the right challenges; that healthcare costs 

were rising too fast and that many Americans did not have reliable 

access to care. I thought he crafted exactly the wrong solution to 

do that. I think we can work together to solve those problems. The 

concern is that, certainly from your testimony and from the experience of my constituents, we have created a whole new batch of 

problems. 

I am going to ask you, Dr. English, you know my good friend 

Todd Williamson in Gwinnett County, Dr. Todd Williamson. He is 

a neurologist as well. He told me the other day—he is just a little 

bit older than you are—that here we are the largest county in the 

southeastern United States, one of the fastest growing. He has 

been in practice for more than 20 years. He has not seen a new 

neurologist come into Gwinnett County. I tried to look at the ages 

of folks in your practice. Are you the youngest in your practice or 

have you found some young neurologists coming in? 

Dr. ENGLISH. I am not the youngest anymore. I wish I was. 

Mr. WOODALL. Because that is one of those challenges. I look at 

the dollars that we have poured into the President’s healthcare bill. 

Just today the headlines: Chicago Tribune, Only 7,000 Illinoisans 

Enroll in Obamacare Plans in the First Two Months; Weekly 

Standard, HHS Awards Another $58 Million to Obamacare Navigators. The list goes on and on. Bergen County Record in New Jersey, 

Many New Jerseyans Stuck In Healthcare Limbo as December 

53 

23rd Deadline Nears; AP, 398 Alaskans Pick Marketplace Plans, 

Despite Untold Millions Spent There; Oregon Signs Up Just 44 

People for Obamacare, Despite Spending $300 Million. What would have happened if we had spent those $300 million 

on community health centers? I happen to be a huge community 

health center advocate. I believe folks are entitled to a level of care 

and I believe we can provide that interesting sliding scales, ability 

to pay. We already had such a mechanism in place. 

My colleague from Virginia called this a pony show. When the 

question came to you, Dr. English, does Obamacare limit your patients’ treatments and the answer came back yes, I don’t know why 

that is not the end of the conversation. I don’t know why there are 

not 435 members of Congress who say, you know what, we care 

about people and we care about people having access to care, and 

we want to improve the access to care for folks who don’t have it; 

but if you have access to care today and we are doing things in this 

body that limit the medical professionals’ ability to treat their patients, why can’t we all decide that is wrong and that we should 

go back and take another crack at that? 

The Affordable Care Act is important legislation, I heard from 

one of my colleagues, because it deals with preexisting conditions 

and access to care. I want to ask you, since you have been characterized as Obamacare critics, is there one of you, is there even one 

of you who does not believe that we should deal with preexisting 

conditions and that we should improve access to care? I will start 

with you, Dr. English. 

Dr. ENGLISH. Of course we have to do all those things. 

Mr. WOODALL. Have to do those things. Have to do those things. 

Dr. McLaughlin? 

Dr. MCLAUGHLIN. Sir, physicians have always given charity care, 

love of their heart, to people who couldn’t afford it. Always did. 

Mr. WOODALL. Always did. 

Dr. MCLAUGHLIN. And always will continue to do so. But what 

this has created, sir, is a roadblock of unsurmountable proportions. 

The high deductibles that were imposed on these patients is nothing more than them not having insurance. Can we understand 

that? 

Mr. WOODALL. Dr. Novack? 

Chairman ISSA. The gentleman may answer, of course, doctor. 

Dr. NOVACK. I agree with you. 

Mr. WOODALL. Mr. Chairman, I know my time has expired, but 

we have found that collection of ideas on which we can agree, and 

I agree with my colleagues on the other side of the aisle; we should 

begin working towards those goals and we should do that immediately. I yield back. 

Chairman ISSA. I thank the gentleman. 

We now go to the gentleman from Massachusetts for five minutes. 

Mr. TIERNEY. Thank you. 

Thank you for being here today. I wanted to ask. I think it was 

Dr. McLaughlin who made a comment that the insurance companies did not renew a patient’s policies and, as a result, that was 

an issue. I wanted to ask you whether or not, when you were having this discussion with your patients who had their policies not reVerDate Aug 31 2005 13:43 Mar 26, 2014 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 C:\DOCS\87174.TXT APRIL
54 

issued by their insurance companies, whether or not you looked 

and saw if those old policies had, as part of their coverage, the following services and benefits: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, including behavioral health treatment, prescription drugs, rehabilitative and 

habilitative services and devices, laboratory services, preventative 

and wellness services, and chronic disease management, pediatric 

services, including oral and vision care. Did your patients in each 

case have all of those benefits and services? 

Dr. MCLAUGHLIN. Sir, I can only speak of my small business plan 

because I—— 

Mr. TIERNEY. Well, let me ask you. You gave me information 

about your patients and what you thought were their situation, so 

I am asking you, before you reached a conclusion or an opinion on 

that, did you look at their policies to see whether or not they actually covered all of those benefits and services. 

Dr. MCLAUGHLIN. The policies I referred to is Healthy New York, 

or State-run, and, yes, they had all those benefits. 

Mr. TIERNEY. All of those services were in those. 

Dr. MCLAUGHLIN. But the reason why the State canceled—— 

Mr. TIERNEY. So you are going to tell me now that that policy 

had each and every one of those services in it? 

Dr. MCLAUGHLIN. Absolutely. 

Mr. TIERNEY. Okay. Did you look to see whether or not any of 

your patients that you are talking about had been advised by their 

insurance company that they could go to an exchange in New York 

and compare and contrast what they now were offered with whatever else might be on that exchange as an alternative? 

Dr. MCLAUGHLIN. They received notification of that, yes. 

Mr. TIERNEY. Okay. And do you know whether or not they have 

gone and checked that out? 

Dr. MCLAUGHLIN. I can’t tell you what patients do. 

Mr. TIERNEY. And do you know whether or not your patients 

were eligible for a subsidy, in other words, if they were earning less 

than over 400 percent of poverty? 

Dr. MCLAUGHLIN. Again, obviously, as a physician, we don’t 

know what a patient’s earnings are, but I can tell you from the careers that I see—— 

Mr. TIERNEY. Well, that wouldn’t be fair because—— 

Dr. MCLAUGHLIN. Well, it would be fair. 

Mr. TIERNEY. So did you ask them whether or not any of them 

qualified for a subsidy and, if so, how much? 

Dr. MCLAUGHLIN. Well, I can speak even of my own staff who 

were covered. Yes, they checked. 

Mr. TIERNEY. I want to know about these patients that you were 

referring to. 

Dr. MCLAUGHLIN. Yes. 

Mr. TIERNEY. You weren’t checking about your staff; you told us 

about patients. 

Dr. MCLAUGHLIN. Some checked. 

Mr. TIERNEY. And some? 

Dr. MCLAUGHLIN. And some had a subsidy, some did not. 

55 

Mr. TIERNEY. Okay. And do you know which of them or which, 

how many of each, and whether or not it covered all or some of 

what they thought was an increase in the policy? 

Dr. MCLAUGHLIN. The closer that an individual, these patients, 

get to the upper limit of what qualifies for that subsidy, they were 

told that they would only save about $5 a month on the premium. 

So a subsidy doesn’t cover everything. It depends on how far away 

from the maximum that is covered. 

Mr. TIERNEY. That is the idea of a sliding scale and a subsidy, 

right? 

Dr. MCLAUGHLIN. Correct. 

Mr. TIERNEY. Okay. Did you also talk with your patients about 

the medical loss ratio part of the Affordable Care Act, that part 

that says that insurance companies have to now use up to 80 percent of their premiums for actual health services, as opposed to 

overhead and management, things of that nature? 

Dr. MCLAUGHLIN. With all due respect to the patient population, 

sir, they don’t understand a medical loss ratio. 

Mr. TIERNEY. Do you? 

Dr. MCLAUGHLIN. I do. 

Mr. TIERNEY. Okay. So you are aware that in 2012 consumers saved $3.4 billion through lowered premiums based on those new 

standards? 

Dr. MCLAUGHLIN. My plan did not have that; I got no refund. 

Mr. TIERNEY. My question to you, though, was that if you are familiar with it, do you understand that in 2012 consumers saved 

$3.4 billion through lower premiums based on those new medical 

laws. 

Dr. MCLAUGHLIN. I understand that, yes. 

Mr. TIERNEY. And do you understand that, in addition, compa- nies that did not meet those standards issued $500 million in rebates? 

Dr. MCLAUGHLIN. Yes, I do. 

Mr. TIERNEY. Okay. Do you know whether or not any of your patients were beneficiaries of those rebates? 

Dr. MCLAUGHLIN. Some of them were, yes. 

Mr. TIERNEY. Okay. I just want to close out. I am not going to 

use all of my time on this, but with respect to a comment that was 

made earlier from somebody on the panel here about the history 

of this bill, and this was not a committee of jurisdiction, I was on 

one of the committees of jurisdiction. My memory is that during the 

coercive debate of this particular bill, tremendous effort was made 

to try and have it be a bipartisan measure, and we reached out and 

asked for participation of both sides of the aisle and one side decided not to participate. Incredibly, even when certain provisions 

that people thought were generally good, bills that were drawn by 

Republicans on that part were asked to be introduced, Republicans 

refused to introduce them. And even when some 12 to 15 of them 

were put in as amendments, those people who had drawn those 

original bills that were now the amendments voted against them. 

So I think it is some indication of the effort that has been made 

to try and have this be a joint effort all across the aisle, with everybody working on this, shows from the earliest parts of this whole 

exercise or whatever, a concerted effort, I think, with one part just 

56 

to not even be involved in it and not participate in trying to make 

it the best project it could possibly be, and I think that is part of 

what we are seeing a continuation of here. 

Chairman ISSA. Would the gentleman yield? 

Mr. TIERNEY. I am afraid I am out of time, according to your 

strict standards, Mr. Chairman. 

Chairman ISSA. Okay. The gentleman’s time has expired. 

The gentlelady, Dr. McLaughlin, you were cut off several times 

because of limited time, but is there anything that you did not get 

a chance to answer? 

Mr. TIERNEY. Mr. Chairman, is it your turn to question? Am I 

missing something here? 

Chairman ISSA. It is the requirement—— 

Mr. TIERNEY. You just asked for me to yield to you and I have 

no time to yield, so now you are just—— 

Chairman ISSA. No, no. I am not asking any questions. The prerogative of the chair under the rules is to make sure that there is 

a full and complete, clear answer, and to correct the record, if necessary. 

Mr. TIERNEY. That is not at all accurate. 

Chairman ISSA. I am not correcting the record. This is a longstanding practice under both Republicans and Democrats. The gentleman had limited time. The gentleman, in his limited time, cut 

you off several times. If the doctor had anything that she felt was 

germane, I have always allowed witnesses to continue answering 

even after time has expired. 

Was there anything, doctor, that you felt you needed to fully answer there was not time for? 

Dr. MCLAUGHLIN. The purpose of this committee is to talk about 

the limited networks and whether premiums were indeed lowered 

or not, was it not? 

Chairman ISSA. That is correct. 

Dr. MCLAUGHLIN. And as I said to Mr. Cummings, we have 20 

days to fix how we are going to provide care to patients with limited access, and there is no debating that. We talk about MS. I will 

talk about ophthmalogy for a second. 

Chairman ISSA. I apologize. I would love for you to do that. I just 

wanted to give you time on something that he had asked, which included subsidies. He cut you off during your statement on occupations of your patients and so on. Please, I am only trying to make 

sure the record is full. If there is anything you wanted to say about 

your patients and so on, that was the line. 

Dr. MCLAUGHLIN. The cutoff—— 

Mr. TIERNEY. Mr. Chairman, if it is an answer to my question—— 

Chairman ISSA. The gentleman is not in order. 

Mr. TIERNEY. The reason that the witness was asked to move to 

another subject was she was not being responsive to my question. 

Now, if you want to ask a new question in a different direction, get 

some time. 

Chairman ISSA. The gentleman is not in order, please. 

Mr. TIERNEY. Well, neither is the chair, and I think we have an 

issue here as to whether you are going to be some sort of arbiter 

57 

of what my questions were, and now you are going to shut the 

microphone off. 

Chairman ISSA. Yes. 

Mr. TIERNEY. You are just a model of leadership, I tell you. 

Chairman ISSA. Thank you. 

Please limit yourself to anything that you felt was asked that 

you were unable to answer. I certainly want you to be germane, 

that is why I did ask you to stay to what the gentleman asked. 

Dr. MCLAUGHLIN. Forty-five thousand dollars, I believe, is the income ceiling in New York to attain a subsidy. Forty-five thousand 

dollars in living in New York barely makes it. So most of the people who are going to be getting these insurance plans will not receive a subsidy, and they are going to have a difficult time paying 

these deductibles and paying their premiums. Thank you. 

Chairman ISSA. Thank you. 

The gentleman from Georgia, Mr. Collins. 

Mr. COLLINS. Thank you, Mr. Chairman. 

Look, I just have a couple simple questions. I have a daughter 

who fits the special needs category. Dr. English, I appreciate you 

being here from our home State, as well as the rest here. I am just 

going to ask a very broad sort of question and give a personal experience. One, I have heard it said many times, and I think one of 

the things that is being said here is there are a lot of things out 

there to fix. Well, this is one of the fixable laws, this is just one 

that is broken and it was inherently flawed. And that is just a disagreement that both sides of the aisle is going to have, and we are 

going to deal with that. I don’t believe it can, but there are things 

that can be done. But we have to now deal with reality. Reality is 

that, as in the case of my daughter, who has spina bifida, early in 

life, before six years old, she had 30 major surgeries, three of which 

went eight hours plus, ranging just a vast array of different things. 

Now she is fine, she is 21 years old, and she actually rules the 

house if nothing else is said. 

But doctors in her life, especially early on, were very important, 

and they still are. And we are making the transition, as I had a 

chance this morning to speak with Dr. English about the transition 

from pediatric to adult; and that is hard for a father, so I will just 

leave that at that. But she is a young woman. 

The problem I have here, and I want you to address—I am going 

to stop here and just sort of open it up, and then if you don’t have 

a lot to say, then, fine, we will be done and we will move forward. 

But the plans are hurting the very ones I believe they were intended to help, especially with the zones and especially with the 

areas of access, and especially on borders and especially those who 

need multidirectional or multi-physician care. Could you speak to 

that? Not the politics of this thing, but speak to what happens to 

a father who has a daughter named Jordan who may not be at 21, 

they may be at 6 or they may be at 5, and they are trying to get 

everything they can so that their daughter or son can move within 

the limitations of what you are now seeing. Can you speak to that 

for just a minute? 

Dr. English, would you start? And then anybody else who would 

like to pick up. 

58 

Dr. ENGLISH. I will start. The problem is, as you said, this is the 

group of patients that we really need to provide for. I know your 

area, you are about an hour from us without traffic, depending 

upon the time of day. 

Mr. COLLINS. Three and a half to four with traffic. 

Dr. ENGLISH. So that is not a far place to go for somebody like 

that to see a pediatric surgeon. Boston if you are from Massachusetts, going to Boston is not a big deal for anybody in Massachusetts. But if you are out of the exchange district, then you don’t 

have access and patients like your daughter will not have access; 

not to mention the Mayo Clinics of the world and Walter Reed and 

all of those places where a subset of patients have to go. So my concern is that, again, you have that card, but because of where you 

live, that is even going to restrict your access to the provider that 

you need. 

Mr. COLLINS. And that actually increases cost because you don’t 

have the collaborative effort that you could do in, say, a clinic setting or something else at times, and I think maybe you have that 

experience. 

Dr. McLaughlin? 

Dr. MCLAUGHLIN. You see, it is a team approach in many illnesses, and the whole team has to be with us, because this was allowed to be created now as all in-network coverage. Besides the 

high deductibles, all in-network coverage. That is not saying you 

can’t go to see a specialist like Dr. English, but you would have to 

pay for it; and that won’t go to satisfying your deductible or your 

out-of-pocket. So there are flaws in this. And I am not against the 

Affordable Care Act, but there are flaws in this that are increasing 

the costs to the patients, the very patients that you wanted to help, 

and this needs to be fixed. 

Mr. COLLINS. Dr. Novack? 

Dr. NOVACK. There will be some families who will see some improvement, but what we have changed with the law is really the 

set of who the winners and losers are. And again certainly to date, 

and there has been, frankly, not a shred of any actual, real-life evidence that the number of winners are going to even come close to 

approaching the number of losers. 

Mr. COLLINS. And I think that is the concern that we are seeing 

in my office. That is the concern that is coming on that was just 

a natural outflow of this, and there are things that have to be addressed. It is a passionate issue, not just for the folks on Capitol 

Hill. In fact, for the 535 of us on Capitol Hill, we are just reflections of, really, the people in our districts who are dealing with this 

every day. The hearing is entitled Obamacare’s Impact on Premiums and Provider Networks. Frankly, I appreciate the chairman 

bringing this and the ranking member being here, and the differences on both sides, but I would have to just say that 

Obamacare’s impact on premium provider networks is a generic 

term for Obamacare’s impact on the lives of people and families. 

And if we ever disconnect our discussions of insurance and 

healthcare and all this from the very people who need it, then we 

have made a mistake, and that is why this hearing is important, 

because it actually is dealing with those who actually need the help 

and the doctors that they need for day-to-day living. 

59 

I appreciate you being here. 

Mr. Chairman, I yield back. 

Chairman ISSA. I thank you, sir. 

We now go to the gentleman from Illinois, Mr Davis. 

Mr. DAVIS. Thank you very much, Mr. Chairman. I am pleased 

to report that I just came from a markup in Ways and Means, 

where, on a vote of 39 to 0, we voted to do a fix for three months 

of the SGR and kind of looking after the needs and concerns of doctors. 

I also want to take a moment to just associate myself with the 

comments of my friend from Georgia, Mr. Woodall, who just spoke 

glowingly about community health centers and the accessibility, as 

well as impact, that they have had. I happen to have worked for 

two of them in civilian life and also had the good fortune to be 

president of our national trade association at one time, and I certainly think that they are a tribute to what can happen in the development of ambulatory care. So I just want to thank him for that 

comment. 

As we begin, I want to make sure that we don’t lose sight of the 

fact that many of these policies that we have talked about did not 

include basic services, such as hospital care and prescription drugs. 

They were what many people call junk policies that provided very 

bare bones coverage that would have resulted in catastrophic medical debt if policyholders became seriously ill. Back in September, 

a young woman named Aqualine Lori requested to testify at a 

hearing before this committee, and although she ultimately did not 

testify, Ranking Member Cummings read part of her statement 

into the record. 

Like millions of other Americans, Ms. Lori had a preexisting condition, a rare blood disorder. In 2005 she needed emergency gallbladder surgery and suffered complications due to her condition. 

Although she had insurance at the time, her insurance company 

dropped her, refunded her premiums, and left her with a $50,000 

hospital bill. Although she spent years trying to appeal this decision, she was not successful. Eventually, the hospital she was 

treated at decided to forgive the bill. 

My question to each of you, all of you are in the business of providing healthcare. You clearly have all interacted with insurance 

companies and know about insurance. Was this type of policy recision common prior to the enactment of the reforms in the Affordable Care Act? And what were your experiences in each of your 

practices? And we could begin with you, Dr. Novack. 

Dr. NOVACK. Sure. In my 13 years of practice and then 5 years 

of training before that up in the Seattle area, I have not seen it, 

and I have taken well over 1,000 days of on-call at multiple hospitals and seen over 50,000 patients. Most States actually have 

laws already that preexisted the ACA that prevented inappropriate 

recisions, so that is a different issue that I think is being conflated 

a little bit incorrectly. So laws against canceling people’s policy because you get sick have been against the law in most States for a 

long time. That is a different problem than this idea of people’s insurance not being renewed. 

Now, the idea that people who had preexisting conditions not 

being able to find affordable insurance, there is not likely a person 

60 

in this room, there is not a person I have ever come across in my 

25 years of taking care of patients that doesn’t feel like we need 

to do something or make policy changes to address that. The conclusion, however, is that the policies that were put forth through 

the Affordable Care Act are actually making these problems worse, 

and not better. 

Mr. DAVIS. Dr. McLaughlin? 

Dr. MCLAUGHLIN. It was illegal to cancel the policy because of increased utilization of it for a serious medical illness. This wholesale 

nonrenewal of policies is shocking. It has been reported that the insurance companies felt that small businesses were a losing proposition to them economically, and this probably became a great opportunity to just rewrite those policies, which is why we are where 

we are today with so many small business policies being not renewed. 

Hospitals, again, have always taken care of acute care conditions 

when somebody is uninsured, but we have to fix the problem that 

we are facing now, as much as it laudable to see the people who 

have preexisting conditions can have insurance. Thank you 

Mr. DAVIS. Dr. English? 

Dr. ENGLISH. Due to time, I don’t really have much more to say 

than Dr. Novack. Obviously, we agree that there are changes that 

needed to occur, and now we are just pointing out that, unfortunately, this plan is having huge amounts of unintended consequences. 

Mr. DAVIS. Mr. Chairman, with your indulgence, could I just simply ask the panel if they would agree that many of these policies 

were in fact junk policies that we have been talking about? 

Dr. NOVACK. I don’t think that there is any evidence to date that 

the 5.5 million people who have had their policies cancelled, I 

haven’t seen exact numbers, what percentage those are ‘‘junk policies.’’ A lot of them were ones because they didn’t actually contain 

some of the new mandates in the law. 

Dr. MCLAUGHLIN. No one in my practice had a junk policy. 

Dr. ENGLISH. I have nothing else to add. 

Mr. DAVIS. Thank you very much. 

Mr. GOSAR. [Presiding.] I thank the gentleman from Illinois. 

I would now like to recognize the gentleman from Michigan, Mr. 

Bentivolio. 

Mr. BENTIVOLIO. Thank you, Mr. Chairman. Mr. Chairman, we 

now know that you can’t keep your insurance, even if you liked it. 

You can’t keep your doctor, even if you have been seeing him for 

the last 30 or 40 years. You can’t keep your hospital. Premiums are 

increasing and we have higher deductibles. Obamacare raided $700 

billion from Medicare, including $300 billion from Medicare Advantage alone, to pay for the ACA. 2,250 physicians were terminated 

from Medicare in Connecticut alone. Most of the orthopaedic surgeons in Dayton, Ohio dropped. In Florida, 250 physicians from one 

medical center dropped. 

In January, Mr. Chairman, I am sure we will discover thousands, if not tens of thousands, of people, to their dismay, that they 

thought they signed up for the ACA, but because of a glitch in 

Healthcare.gov did not. Mr. Chairman, the website itself is in question. A website that asks the most personal, intimate questions 

61 

does not have the proper security protocols to ensure the personal 

medical data of our citizens that are safe and secure. 

Obamacare created a panel of 15 unelected bureaucrats, called 

the Independent Payment Advisory Board, who have the power to 

control the types of treatment seniors receive through Medicare. 

And according to Dr. Jason Fullmer and Dr. David Gratso, this 

unelected body will have the unprecedented ability to singlehandedly change the allocation of healthcare resources should Medicare 

spending exceed medical inflation, which, for the record, it consistently does. 

Dr. Novack, what are your views on this IPAB, I believe it is 

called, the Independent Payment Advisory Board? 

Dr. NOVACK. Sure. As I mentioned earlier, I just think it is a serious area of concern. I don’t think that for those of us, and actually for most families, that creating another new layer of bureaucracy that are making determinations about accessibility is a step 

in the right direction. I would add that I think that there is fairly 

significant bipartisan opposition to the Independent Payment Advisory Board because of the way it is structured and how their decisions effectively have the ability to bypass Congress. 

Mr. BENTIVOLIO. Do you have evidence that competition and 

choice is a better way to increase value and reduce cost than Government bureaucracy and experts? 

Dr. NOVACK. I think there is a fair amount of evidence that if 

we increased transparency, provide more information to patients, 

that a lot of patients will make better decisions. That is also true 

on the physician side. And a lot of those solutions are a lot simpler 

and cost a lot less than the $2.5 trillion to $3 trillion we are spending on the Affordable Care Act over the next 10 years. 

Mr. BENTIVOLIO. Thank you. Do you think that many people 

signing up for coverage don’t know that their doctor or their children’s doctor will still be in their network and they will still be able 

to visit their family doctor? 

Dr. NOVACK. I think the evidence of this panel is not only do the 

patients not know, but we don’t know either. 

Mr. BENTIVOLIO. Mr. Chairman, we are consistently unearthing 

the lies, half truths, and distortions of this poorly conceived law. 

Dr. Novack, what do you anticipate will occur next year when 

people go to their doctor and find out they are no longer covered? 

Dr. NOVACK. Well, congressman, it gets back to this uncertainty 

issue, that already, on the provider side, we spend enormous 

amounts of time, as was mentioned, enormous number of phone 

calls trying to sort through some of these very complicated issues 

regarding health insurance. And, by the way, this is not just for 

people in the private market; it is not just for people on Medicaid; 

it is equally true for people with Medicare and the 130,000 pages 

of regulations that go along with Medicare. 

This is only going to grow. So at least for our practice, since we 

have no idea what the exchange will bring, and this 90-day grace 

period issue is such an enormous issue for us that we don’t feel 

that we can actually see patients under these exchange contracts 

that we were pushed into without choice until this body or other 

bodies actually figures out what the rules are going to be so we can 

continue to provide services and be able to pay our staff. 

62 

Mr. BENTIVOLIO. Thank you very much. 

Chairman ISSA. [Presiding.] Would the gentleman yield? 

Mr. BENTIVOLIO. Yes. 

Chairman ISSA. Dr. Novack, I just want to make it clear. Under this 90-day plan, if you have, let’s say, a $2 million practice, including the pay you pay all your people and so on, you could end up 

with, 90 days, one-quarter of that, $500,000 of patients that aren’t 

covered and don’t pay. That is the kind of exposure you could have, 

is paying all your people, paying out $500,000, and getting back 

none of it. That is the uncertainty that was in the law, is that correct? 

Dr. NOVACK. Right. And the concern is almost all insurance, is 

my understanding, there is always a 30-day grace period, right? 

Because sometimes we forget to send a check in. Things happen. 

But under the law the exchange plans have a 90-day grace period. 

For the first 30 days the insurers are required to actually pay the 

bill. But when we go do an insurance authorization on day 31, it 

is going to look like the patient has insurance, but the insurance 

company is going to hold payment, and if that premium is not paid 

by day 90, the insurance company says, well, it is not our problem, 

go collect it from the patient. And generally speaking, in those settings, talking to hospital people as well, your collection rate is 

about one or two cents on the dollar for that money. 

Interestingly, we had a conversation with one of the newer insurers that is going to be on the exchange in Arizona and we said we 

would like some kind of protection against this exact problem. We 

didn’t have an issue in terms of what the payment rate was going 

to be for services, we just said we need some kind of protection; 

and they were unwilling to provide us that protection, so we 

walked away from that contract. 

Chairman ISSA. I want to thank all our witnesses today. I certainly think that we closed on a good note. The fact that there is 

something that I think all the people on this side of the dais can 

agree on is that we certainly need to make sure, just as if you were 

taking a Visa or Mastercard and you checked it and it was good, 

your expectation is that when you let the gas or the other product 

leave your store, that it would be honored, and not that 60 or 90 

days later you would find out, retroactively, you weren’t going to 

get paid. So as we look at the many problems presented here on 

this first panel, I think that is certainly a good example of one that 

we look forward to working together to try to fix and fix quickly. 

Again, doctors, I thank you for remaining in this industry, remaining in your practices, and offering us some ideas of where we 

need to keep from driving you and doctors like you out. 

And I recognize the gentleman from Maryland for a closing. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. 

I want to thank all of you, too, for what you do every day. You 

have very, very important jobs. You bring a quality of life to life 

and in many instances save lives, saving sight. It is so important. 

I want you to be paid. I want you to be paid for what you do. At 

the same time, I also want people to have an attitude of staying 

well and, if they get sick, knowing that that insurance card that 

they have means something. And I heard what you said, Dr. 

McLaughlin, about the various situations that you found yourself 

63 

in with your mom. So some kind of way we have to balance all of 

this. 

You know, Congressman Tierney was so accurate. A lot of these 

things probably could have been resolved when the bill was being 

put together, but there was a lot of give and take and a lot of 

things happened that I think we could have avoided a lot of what 

we have here now. There are problems, but you are right, we have 

to fix this, and it has to be a can-do attitude, and not one of just 

throwing up our hands. Because you know what? The people who 

suffer are the very people that you try to help everyday. 

So I thank you for what you do. I also thank you for bringing 

the passion that you bring to your professions. We understand. You 

are just trying to help people, to get them well and keep them well, 

and we really appreciate you. Thank you. 

Dr. MCLAUGHLIN. I thank you so much for this opportunity. 

Chairman ISSA. Thank you all. And, again, you will have seven 

days, if you want to put additional statements or other material in 

the record. 

We will now take a short recess for the second panel. 

[Recess.] 

Chairman ISSA. I want to thank all of you for your patience. We 

will now welcome our second panel of witnesses. Professor Judith 

Feder is a Professor of Public Policy at the McCourt School of Public Policy at Georgetown University and a Fellow with the Urban 

Institute. Mr. Edmund Haislmaier, welcome back, is a Senior Research Fellow for Health Policy Studies at the Heritage Foundation. And Dr. Avik Roy, M.D., is a Senior Fellow at the Manhattan 

Institute for Policy Research. 

As you saw on the first panel, pursuant to the rules of the Committee, would you please rise and raise your right hands to take 

the oath. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth and nothing but 

the truth? 

[Witnesses respond in the affirmative.] 

Chairman ISSA. Please be seated. Let the record reflect all witnesses answered in the affirmative. Dr. Roy? 

STATEMENT OF AVIK S.A. ROY, M.D. 

Dr. ROY. Chairman Issa, Ranking Member Cummings and members of the Oversight Committee, thank you for inviting me to 

speak with you today about the Affordable Care Act. 

My name is Avik Roy, I am a Senior Fellow at the Manhattan 

Institute for Policy Research, in which capacity I conduct research 

on health care and entitlement reform. 

I am an advocate of market-based universal coverage. I believe 

that the wealthiest country in the world can and should strive to 

protect every American from financial ruin due to injury or illness. 

Furthermore, I believe that well-designed, subsidized insurance 

marketplaces are among the most attractive vehicles for achieving 

these goals. It is for these reasons that I am deeply concerned 

about the way the ACA’s insurance exchanges have been designed 

and implemented. Most of all, I am concerned that the law will 

64 

drive up the cost of health insurance, especially for people who 

shop for coverage on their own. 

As you know, the ACA makes substantial changes to the individual health insurance market. The law broadly bars from charging different rates to the sick and the healthy and requires insurers to raise rates on younger individuals in order to partially subsidize care for the old. It mandates that insurers cover a broad 

range of services that individuals might not otherwise choose to 

purchase. The law taxes premiums, pharmaceuticals and medical 

devices in a manner that has the net effect of increasing the cost 

of insurance. 

Earlier this fall, I and two colleagues from Manhattan Institute 

completed the most comprehensive study to date of individual market premiums in 2014 relative to 2013. We examined the five least 

expensive plans available in the individual market for every county 

in the United States, averaged their premiums and adjusted the result to take into account those who, due to pre-existing conditions, 

could not purchase insurance at those rates. We examined premiums for 27, 40 and 64 year old men and women. 

We then compared those rates to the five cheapest plans on the 

ACA exchanges, apples to apples comparison. Our analysis found 

that the average State would see a 41 percent increase in underlying premiums prior to the impact of subsidies. Among the States 

seeing large increases are Nevada, 179 percent, New Mexico, 142 

percent, North Carolina, 136 percent, Vermont, 117 percent, and 

Georgia, 92 percent. Our analysis did find that eight States will see 

average premiums decrease under the law, including Massachusetts of negative 20 percent, Ohio, negative 21 percent and New 

York, negative 40 percent. 

Of the six categories we studied, 27 year old men face the steepest increases with an average hike of 77 percent; 40 year old 

women received the mildest increase with an average of 18 percent. 

We also studied the impact of the law’s premium assistance payments on exchange premiums. Our analysis found that for individuals of average income, taxpayer funded, insurance subsidies primarily flow to those nearing retirement. This is because the elderly 

will stay pay more for insurance on average than younger individuals and because the subsidies are designed to fix a percentage of 

one’s income devoted to paying health insurance premiums. 

Taking subsidies into account, 64 year old men will pay on average 19 percent less for insurance under the ACA system, whereas 

27 year old men will pay 41 percent more. 

The Manhattan Institute analysis indicates that we are indeed 

likely to see a fair amount of adverse selection on the exchanges. 

People who consume an above average amount of health care services, such as sicker or older individuals, have a compelling economic incentive to enroll in the ACA marketplaces. Healthier and 

younger individuals, however, have less of an incentive, even when 

one takes into account the individual mandate. 

Our analysis did not directly examine the degree to which exchange-based plans have higher deductibles and narrower provider 

networks relative to plans available in 2013. There have been, however, many anecdotal reports of people paying higher premiums for 

plans with higher deductibles and narrower physician networks 

65 

than the plans they previously enjoyed. In particular, prestigious 

academic medical centers that specialize in the most complex cases 

in the various diseases tend to provide costlier care than the typical American hospital. These facilities have been mostly excluded 

from the exchange-based provider networks. 

It is not inherently a bad thing for individuals to choose plans 

with higher deductibles and narrower networks, especially if those 

choices allow Americans to reduce their monthly premiums. In theory, by encouraging price competition among health care providers, 

exchanges could exert a downward pressure on overall health costs. 

The problems is that in the case of the ACA, many individuals 

are reporting higher premiums for less attractive health coverage 

in a way that will all in all increase national health spending. It 

would be one thing if the ACA was forcing Americans off their old 

plans, and offering them more attractive plans at a lower price. 

But millions of Americans are likely to see less attractive coverage 

at a higher price. If they do, then the Affordable Care Act will not 

live up to its name, and its goal of universal coverage will remain 

unfulfilled. 

Thank you. 

[Prepared statement of Dr. Roy follows:] 

66 


Insert offset folio 14 here 87174.014
67 


Insert offset folio 15 here 87174.015
68 


Insert offset folio 16 here 87174.016
69 


Insert offset folio 17 here 87174.017
70 


Insert offset folio 18 here 87174.018
71 

Chairman ISSA. Thank you. 

Ms. Feder? 

STATEMENT OF JUDITH FEDER, Ph.D 

Ms. FEDER. Chairman Issa, Ranking Member Cummings and 

members of the Committee, I welcome the opportunity to speak 

with you today about the Affordable Care Act. My views are my 

own, not those of Georgetown University or the Urban Institute, 

where I have spent much of my career. And over my career there 

and elsewhere, I, like you, have watched the millions of Americans 

without health insurance rise to 50 million people and go without 

care, even as Americans who have health insurance spend more 

and more to hold onto it. At long last, the Affordable Care Act enables us to assure Americans access to affordable health care. We 

have a simple choice: effectively implement the law or resign ourselves to the unacceptable status quo, a status quo that I believe 

is quite different, the evidence tells us, from the rosy picture that 

we were left with in the last panel, where everybody gets their care 

and their doctor and all is well. 

My own research has contributed to a substantial body of literature demonstrating that insurance matters. Americans without 

health insurance get less care, get it later in the course of the illness and are more likely to die than Americans without it. And to 

the extent they get care, that care is paid for by those of us who 

have health insurance and our insurance premiums and through 

our local, State and Federal taxes. 

Who are the uninsured? They are mostly workers, or in families 

of workers, who are not offered coverage through their jobs the way 

most of us are. Pre-ACA, they have few options to protect themselves. Coverage in the non-group or individual market with denials of coverage for pre-existing conditions and limited benefits and 

non-renewals simply does not work for people with they get sick. 

Far from living up to the promise that people who have this insurance can keep their doctor or their doctors paid for, Mr. Chairman, 

as I heard you argue, the limits on their annual payments as well 

as other limitations frequently leave them high and dry, and that 

is what the evidence tells us. 

And while Medicaid provides an invaluable safety net for people 

who are eligible, it is far from an empty cart or an empty promise, 

and research shows us it actually does get people access to care. 

Except in a few States with waivers from Federal law, Medicaid excludes coverage of adults who are not parents of dependent children, no matter how poor they are. So the very same low and modest earners who can’t get coverage through their jobs can’t get public protection. 

It is these giant holes in our health financing structure that the 

ACA aims to fill. As Avik said, the ACA requires insurance to end 

discrimination based on pre-existing conditions, gender and other 

factors to cover the range of services health professionals typically 

provide and to eliminate dollar caps on annual and lifetime benefits. And so that people don’t wait until they get sick to enroll, the 

ACA accompanies these requirements on insurers with requirements on individuals, to purchase coverage or pay a penalty. And 

to make that requirement feasible and coverage affordable, the 

72 

ACA provides tax credits and other protection to limit people’s premiums and cost-sharing as a share of income. 

These policies together make it possible to transform what is an 

empty card in individual America today into what insurance is supposed to be: available, adequate and affordable. And the ACA addresses the holes in Medicaid by expanding its eligibility to people 

with incomes below 138 percent of the poverty level, regardless of 

their family status. Until 2017, that expansion is fully financed by 

the Federal Government with Federal financing gradually dropping 

to 90 percent for 2020 and subsequent years. States will ultimately 

pay 10 percent. 

Analysis shows that the expansion will make States financially 

better off by reducing the burden of uncompensated care, while 

contributing to the overall health of State economies. Indeed, research shows that because taxpayers in all States contribute to financing for the ACA, citizens in States that choose not to participate in Medicaid will actually pay for benefits in other States, 

without reaping any of the benefits for themselves, in addition to 

Federal funds. 

And while the ACA expanded coverage by improving the market 

outside employment, it is important to emphasize that the law 

leaves the employer-sponsored insurance that most of us depend on 

fundamentally as it is today. Despite claims to the contrary, the 

analyses by CBO, Rand and my colleagues at the Urban Institute 

show that employer-sponsored health insurance will remain the 

core of the American health insurance system. Essentially, we have 

left roughly 150 million people who rely on employer-sponsored insurance, their coverage is the same as it has been, not with some 

improvements, and not more effective. They were not the group 

that we were talking about this morning, and that is the coverage 

outside of employment. 

At the same time, I see my time going, we are seeing the slowest 

cost growth that we have seen in history, in part a function of the 

ACA’s elimination of overpayments to Medicare and promotion of 

initiatives to support efficient, higher quality care. And that is affecting everyone. 

By filling the gaps in our current financing structure and slowing 

the growth in our health care costs, the ACA has enormous potential to address the flaws in our health care system that all of us 

decry. The biggest barrier I see to realizing the law’s potential is 

the political resistance to its Implementation, with too many States 

unwilling to establish their own marketplaces or to expand Medicaid, despite the enormous advantage to their own citizens. 

Come January 1st, millions of Americans will for the first time 

have access to affordable insurance they can count on when they 

are sick, along with the benefits people are already reaping from 

the ACA. 

Chairman ISSA. The gentlelady’s entire statement will be placed 

into the record. 

[Prepared statement of Ms. Feder follows:] 

73 


Insert offset folio 19 here 87174.019
74 


Insert offset folio 20 here 87174.020
75 


Insert offset folio 21 here 87174.021
76 


Insert offset folio 22 here 87174.022
77 


Insert offset folio 23 here 87174.023
78 


Insert offset folio 24 here 87174.024
79 

Chairman ISSA. We now go to the gentleman—— 

Ms. FEDER. May I finish the sentence? I thought you said earlier 

that everybody got to finish their sentences. 

Chairman ISSA. You may finish the sentence, but not the entire 

script. You are one minute past, and you did say you were wrapping up. The gentlelady will finish the sentence. 

Ms. FEDER. I will be glad to. Along with the benefits that we see 

people already reaping, we need to move forward to implement the 

real promise of the ACA. Standing in its way and standing for the 

unacceptable status quo is simply wrong. 

Chairman ISSA. I thank the gentlelady. We now go to the next 

witness, Mr. Haislmaier. 

STATEMENT OF EDMUND F. HAISLMAIER 

Mr. HAISLMAIER. Thank you, Mr. Chairman, Ranking Member 

Cummings, for inviting me to testify today. 

I am focusing my testimony on the issue the committee asked me 

to talk about of limited provider networks in the exchange plans 

under the Patient Protection and Affordable Care Act. You have a 

copy of my written testimony. I will simply summarize a few of the 

points. 

Obviously, as you have heard in the panel before, provider contracting si nothing new. It is a two-way street. It is up to both the 

insurers and the providers to come to terms. If one of them doesn’t 

like the terms, you don’t have a contract. That shouldn’t surprise 

anyone. 

Is there something significant or different about the contracting 

and the networks in plans in the health insurance exchanges under 

the Patient Protection and Affordable Care Act? There appears to 

be, based on the widespread news reports, and by that I mean from 

all sectors of the Country and involving all different types of providers. With that said, nobody has at this point any definitive, conclusive handle on the extent to which those provider networks are 

different from the ones that we see out there today. We just simply 

don’t know, in part because some of those networks are still being 

built, or those contract negotiations are still ongoing. 

What we do know, though, is that in a number of cases, the insurers are offering network coverage that is significantly less than 

what they offer in plans outside of the exchanges. The thing I 

would direct the committee’s attention to as a policy matter is that 

what I see driving at least some of this, because the assumption 

has been that well, the consumers would be price sensitive, and the 

insurers are trying to keep prices down so they exclude providers. 

But I think the design of a portion of the law actually drives this. 

I am specifically referring to the cost-sharing subsidies. Most of the 

attention has focused on premium subsidies. But the law has a second set of cost-sharing subsidies that pays the insurer to reduce 

the cost-sharing for lower income enrollees. 

The problem with that is that because the cost-sharing for a significant portion of their expected enrollees is nominal, the insurers 

have reason to expect that there will be higher utilization, and indeed, HHS confirms that, HHS is adjusting the cost-sharing subsidies to reflect their estimate of higher utilization. 

80 

Essentially what is happening is the insurers will get paid, but 

the are no longer able to use a tool of cost-sharing to steer patients 

to be more prudent consumers. Thus they must rely on other tools, 

and that is, I think, one of the reasons we are seeing narrower networks in these plans. 

The other interesting thing that I found in research that I did 

which was published at the beginning of the month, and I think 

I am the only one who has done this so far, is I analyzed all of the 

insurers who are participating in the exchanges and looked at them 

and their businesses in the State today and sort of the insurers 

that are not as well, to see what kind of patterns emerge. 

One of the interesting patterns that has emerged from that is 20 

percent of the carriers who have gone into the exchange, their principal business in the State where they went into the exchange is 

Medicaid managed care. And indeed, we do find evidence that these 

plans recognize a structure, meaning the patient faces very low 

premiums and only nominal cost-sharing for a generous benefit 

package that looks a lot like what they are dealing with in Medicaid managed care. Indeed, I quote one of the CEOs of those plans 

saying, yes, it looks essentially the same, that is why we went in. 

Given that, my expectation of how this plays out is that individuals at the lower end of the 100 to 400 percent of poverty that 

would be subsidized, 100 to 200 percent will probably gravitate towards the silver plan, particularly if you have been uninsured. The 

tradeoff of low premiums and low cost-sharing for limited provider 

access is not necessarily something that you are going to be terribly 

upset about, especially if you are coming from not having insurance. 

However, somebody who is used to having insurance, who makes 

more money, who is maybe 300 to 400 percent of poverty, paying 

higher deductibles and co-pays for a limited provider network is 

not going to be attractive. So I expect those individuals would probably move to bronze plans or, certainly above 300 percent of poverty the subsidies are quite small, they might just look for coverage 

elsewhere. 

So I think that is going to be the dynamic that plays out. At this 

point it remains to be seen how many of these more limited networks we see in the coming days. But I expect that that will probably be fairly prevalent. 

My time is about to expire, Mr. Chairman, so I thank you again 

and would be happy to answer questions. 

[Prepared statement of Mr. Haislmaier follows:] 

81 


Insert offset folio 25 here 87174.025
82 


Insert offset folio 26 here 87174.026
83 


Insert offset folio 27 here 87174.027
84 


Insert offset folio 28 here 87174.028
85 


Insert offset folio 29 here 87174.029
86 


Insert offset folio 30 here 87174.030
87 


Insert offset folio 31 here 87174.031
88 

Chairman ISSA. Thank you. 

I now ask unanimous consent that an article in Bloomberg in 

September of this year be placed into the record. It is entitled Recession, Not Health Law, May Be Responsible for Cost Curbs. 

Without objection, so ordered. 

Dr. Roy, you mentioned free market as a better way to get a 

working system. Earlier on the first panel, I asked all three doctors 

about the practice that the Federal Government, in its reimbursement, pays different rates for the identical treatment depending 

upon where you have it. Isn’t that an example of an inherently 

flawed system in that if a hip replacement done in a clinic that 

specializes in it does therapeutically and equally good or better job 

with equal or better results, and does it for a more efficient way, 

whatever that term means, less overheard, generally, that by paying them less and by paying a hospital more, you are essentially 

driving up the cost of health care by subsidizing hospitals, even if 

they have higher overhead? Isn’t that correct? 

Dr ROY. It is. And it is a distortion that Medicare introduced into 

the market and has been around, and has gotten worse over time 

as Congress tries to tweak that problem and make it better. Sometimes there are unintended consequences that make it worse as 

well. 

Chairman ISSA. In my own State of California, we are seeing hospitals buying up clinics and physician practices at a high rate, paying them essentially as much as they, more than their practice is 

really worth, not because they are generous to the doctors, but because the anticipated revenue growth means that the same doctor 

doing the same job in the same facility, once they become part of 

a hospital, pays more. Therefore, the hospital is doing this in order 

to increase its revenue. 

Is that something that, in a small way, we should be attacking 

as part of our reform? 

Dr. ROY. We should. In fact, I believe MedPAC has recommended, modifying the reimbursement structures that Part B 

and Part A pay the same rate in that instance, so that this arbitrage can’t continue. I would also mention that hospital consolidation broadly, provider consolidation broadly, something that the 

ACA actually accelerates, is a serious problem which is driving up 

market power for these providers and driving up prices in the commercial market. 

Chairman ISSA. One last question, and I think for a couple of 

witnesses, in 1960, we spent 5 percent of GDP, a then smaller 

GDP, on health care. And we lived about 7 and a half years less 

long than we do today. Today we are spending roughly 18 percent 

of GDP, that is not just almost five times, four times the amount, 

but actually with GDP growth in constant dollars, we spend about 

five times as much on health care as we spent then. 

I will start with you, Doctor. As a physician, is there a real justification, in spite of all the improvements, is there a real justification for spending five times as much in real dollars on health care, 

or have we essentially built inefficiencies into the system? And if 

so, does the Affordable Care Act attack any of those inefficiencies? 

Dr. ROY. The Affordable Care Act increases the amount that we 

are going to spend on health care, unfortunately. And I do agree 

89 

that it would be nice to spend less. We don’t need to spend as 

much. There is an enormous amount of inefficiencies in the way we 

deliver and pay for health care. These are longstanding problems 

which some things about the Affordable Care Act may address, we 

hope. But broadly speaking, it goes in the other direction. 

Chairman ISSA. Mr. Haislmaier, just a couple of questions. First 

of all, you were at the table at Heritage during the Affordable Care 

Act markup, were you not? 

Mr. HAISLMAIER. I was at the Heritage Foundation, yes. I wasn’t 

participating in the markup. 

Chairman ISSA. I wasn’t at the table either, despite what Mr. 

Tierney said. But when you watched that process, were there any 

ideas that came out of Heritage or other, if you will, conservative 

Republican groups that you saw being accepted as amendments 

from any source? Particularly I want to talk about medical malpractice reforms such as MICRA. 

Mr. HAISLMAIER. No, on medical malpractice, actually, we had 

somewhat of a different opinion than some of our friends in Congress who wanted a Federal solution. We thought it should remain 

at the States. 

Chairman ISSA. But I am just saying, the Affordable Care Act 

barred it. 

Mr. HAISLMAIER. Yes, my observation is that frankly, the bipartisanship ended right about, and I could look up the exact date, it 

was July of 2009, it was the day they finished the Health Committee markup in the Senate. In that markup, the Republicans had 

made a number of substantive changes, all of which were voted 

down on a party line vote, and then proposed a lot of technical 

changes to which, in my opinion, was the worst-drafted of all the 

bills that were considered. And they accepted like a hundred of 

those and then announced they had a bipartisan bill. I think at 

that point is when the Republicans walked away. 

Because I had been working with members and there were 

things they were drafting to submit that at that point they just 

didn’t submit them. It was clear that there was not going to be any 

meaningful input. 

So the interest in doing something bipartisan pretty much 

stopped about mid-July from what I can tell, because the demands 

for me to help people draft things just evaporated. 

Chairman ISSA. Thank you. Mr. Cummings? 

Mr. CUMMINGS. Dr. Feder, according to doctors, for America some 

States ‘‘have much stronger requirements for general providers and 

also for essential community providers.’’ Some of these stronger 

State requirements include the following. The reason I am going to 

this is because the people on the panel before basically blame the 

Affordable Care Act for the reason why they may not be on a provider network. But these are some State guidelines and requirements. A provider covered person ratios by specialty or primary 

care, geographic accessibility, waiting times for appointments with 

participating providers, hours of operation, volume of technological 

and specialty services available to serve the needs of covered people 

who require advanced or specialty care. 

90 

Dr. Feder, so if there concerns within a State about the adequacy 

of provider networks, who can consumers go to and what actions 

can States take to address those concerns? 

Ms. FEDER. Mr. Cummings, you are rightly raising that the Affordable Care Act actually establishes requirements or calls for requirements for network adequacy. As in many areas of the law, it 

leaves it to the State to enforce those requirements. I think we 

need attention to them, it is a legitimate requirement. 

It does fall to the insurance commissioner in the State, and 

States have different degrees of willingness and ability to address 

it, and we are not seeing an active enough effort in that regard, 

and we need to attend to it. 

Mr. CUMMINGS. You have decades of experience in assessing, Dr. 

Feder, the health care system. We hoped to have you on our first 

panel, but here you are. Dr. Feder, one of the most critical features 

of the Affordable Care Act is the expansion of Medicaid eligibility 

to millions of low income adults. Prior to the ACA, Medicaid eligibility was restricted primarily to low income children, their parents, people with disabilities and seniors. In most States, adults 

without dependent children were not eligible. 

According to a study issued on October 23rd by Kaiser Family 

Foundation, only about 30 percent of poor, non-elderly adults had 

Medicaid coverage in 2012. Under the ACA, Medicaid eligibility can 

be expanded to cover all non-elderly adults with incomes below 138 

percent of the Federal poverty level. The Federal Government 

would pay the States 100 percent of the costs for the first three 

years, and then phase down its match to about 90 percent by 2020. 

Is that right? 

Ms. FEDER. It is correct, Mr. Cummings. 

Mr. CUMMINGS. Now, despite this huge level of Federal assistance, as many as 25 States have decided not to be a part of the 

expansion, leaving millions, literally millions of their own citizens 

without health care, is that right? 

Ms. FEDER. That is absolutely true. 

Mr. CUMMINGS. Now, Dr. Feder, what is your opinion of States 

that refuse to expand their Medicaid programs? 

Ms. FEDER. My opinion of the States, I am sad and disappointed 

for their citizens, both the citizens who need care and the citizens 

who are contributing to paying for care through their taxes and 

other States that do expand. Expansion, research shows from the 

Commonwealth Fund and the Urban Institute ran how much in the 

interest of States this expansion is. I believe it is only political opposition to this law that is depriving these citizens of access to care 

and the States of needed revenue. 

Mr. CUMMINGS. So by not participating, are they leaving significant resources on the table that could be used for their citizens? 

Ms. FEDER. They sure are. 

Mr. CUMMINGS. And sadly, a lot of these people are getting sick 

and sicker, and sadly, some of them will die early? 

Ms. FEDER. We know of that. Essentially the Institute of Medicine found that lack of insurance kills. So your statement is correct. 

Mr. CUMMINGS. Why is the expansion of Medicaid an important 

component of the Affordable Care Act? Why is that so important? 

91 

Ms. FEDER. Well, we have a big hole, as you point out, in our 

safety net coverage, our floor of protection. That is that if you are 

not the parent of a dependent child or disabled or old, you really 

are not eligible for coverage in most States. That hole is a vestige 

of an old-fashioned welfare system that kind of assumed that these 

people would get coverage through their jobs. They don’t get coverage through their jobs. They are left out of employer-sponsored 

coverage, and they are left out of the public safety net, and that 

is why they needed to expand it. 

Mr. CUMMINGS. Now, the Commonwealth Fund issued a study 

this month showing that States that expand Medicaid will gain important benefits beyond covering poor people, such as reducing uncompensated claims. Tell me something. I remember reading something about Missouri, and a lot of the hospital administrators came 

and said to the government, you have to accept this because our 

hospitals are going to be in trouble if we don’t provide for Medicaid 

expansion. Can you explain that to us? 

Ms. FEDER. Sure. Hospitals, although they don’t provide unlimited care, and people without insurance don’t get all they need, hospitals get stuck dealing with people who don’t have insurance coverage. And they have to provide emergency care, it doesn’t mean 

everything, but they are stuck and they don’t get paid. 

What this law created was the opportunity they get paid for patients who walk in the door and they are counting on it. 

Mr. CUMMINGS. Just one last question, Mr. Chairman. The same 

study says by choosing not to expand Medicaid, some States will 

lose billions of dollars, and I talked to Senator Cruz about this the 

other day. Texas, for example, will forego an estimated $9.58 billion in Federal funding in 2022, taking into account Federal taxes 

paid by Texas residents. The net cost to taxpayers and States in 

2022 will be more than $9.2 billion. 

Similarly, Florida’s decision not to participate will cost its tax- payers more than $5 billion in 2022, and Georgia, I could go on. 

Dr. Feder, what will this mean with regard to sick people in those 

States? By the way, in Texas, one out of every four persons has no 

insurance. 

Ms. FEDER. That is where most of our insurance is and it is going 

to stay there. Those people are left without access to care, and as 

you said, they are more likely to suffer and more likely to die as 

a result. 

Mr. CUMMINGS. Thank you very much. Thank you, Mr. Chairman. 

Mr. GOSAR. [Presiding] I thank the gentleman. 

Dr. Feder, are you a physician? 

Ms. FEDER. No, sir. 

Mr. GOSAR. Is Medicaid financially sustainable? Yes or no. It is 

an easy one. 

Ms. FEDER. It is not, actually. 

Mr. GOSAR. It is really easy. 

Ms. FEDER. No, it is not, because it is about long-term care, 

largely, which is what—— 

Mr. GOSAR. No. 

Ms. FEDER. Medicaid costs are growing very slowly. We have too 

many low-income people—— 

92 

Mr. GOSAR. Based on reimbursement rates it is unsustainable. 

Would you agree with that? 

Ms. FEDER. Not the—I thought you were talking about financially. 

Mr. GOSAR. It is financially unsustainable. Dr. Roy, would you 

agree with that? 

Dr. ROY. It is unsustainable, I should just say, I am not a physician, although I did go to medical school. 

Mr. GOSAR. Mr. Haislmaier, it Medicaid sustainable financially? 

Mr. HAISLMAIER. No, not in the present form. 

Mr. GOSAR. Not in its present form. Even expanding, it is not either, is it? 

Ms. HAISLMAIER. No, it is not sustainable in its present form, 

and the expansion will simply add to that in a number of ways. It 

could be, if you reformed it along different lines, but that is a different subject for a different day. 

Mr. GOSAR. Dr. Roy, you heard the comments and you saw Ms. 

Feder just talk about. What is your opinion in regard to, are we 

not just chasing our tail with the expansion of Medicaid? 

Dr. ROY. I recently published a book entitled How Medicaid Fails 

the Poor. It details in 48 pages how the reimbursement structure 

of the program, how it underpays physicians for care, has led to 

very poor access for those individuals. That is leading to poor 

health outcomes. So the most definitive study on the score was conducted in the State of Oregon, was published in the New England 

Journal of Medicine by a panel of esteemed health economists, 

which showed that Medicaid, compared to being uninsured, showed 

no Improvement in health outcome. 

Mr. GOSAR. So because you actually get a card, does it mean 

something when you have a card if you don’t have providers to see 

you? 

Dr. ROY. You heard the earlier panel this morning, just having 

a card that says you have health insurance is not the same thing 

as access to care. And that is a distinction that I fear that the Affordable Care Act has not understood well. 

Mr. GOSAR. So when we are reimbursing physicians below market rates, they don’t even make a profit, we just heard the gentleman basically make a comment that it is up to the States to enforce proper panels. So we are going to force physicians to take fees 

that they can’t even pay their own bills? 

Dr. ROY. In Massachusetts, under the most recent health reform 

bill they passed in 2012, they considered a provision that would 

have required all licensed physicians in the State to accept all 

forms of payment. The physicians rebelled and that was not included in the law. But that is something that we may see more of 

over time, an effort to do that. And that would be problematic. 

Mr. GOSAR. So let me ask the next question. You are very familiar with debt coming out of school. Are physicians coming out of 

school with less debt or more debt? 

Dr. ROY. More debt, unfortunately. The cost of medical school 

has skyrocketed, it has increased perhaps more than health inflation. 

Mr. GOSAR. So reducing their fees is going to help them better 

pay that? 

93 

Dr. ROY. It has discouraged a lot of new physicians from accepting Medicaid patients. And again today, all the studies and surveys 

show the percentage of physicians who are willing to accept new 

Medicaid patients is substantially lower than it is for private insurance in particular and Medicare, where that is also increasingly a 

problem. Over time, as States expand their Medicaid programs, 

they will face further fiscal pressures. The only real mechanism 

that States have to keep their budgets under control under Medicaid is to turn down the amount they pay physicians and hospitals 

to care for those patients. 

So this problem is only going to get worse over time, and Medicaid expansion will accelerate that. 

Mr. GOSAR. We heard earlier in the panel, the earlier panel talking about patient dumping. So this is like Federal patient dumping 

onto States for that jurisdiction. 

Dr. ROY. In my experience, physicians who are already caring for 

patients are really reluctant to let that patient go, just out of a humanitarian interest. But they are very reluctant to take on new patients, to commit to new patients under that reimbursement structure. 

Mr. GOSAR. Because it puts them in a harmful situation, does it 

not? Because they can’t abandon the patient, because that is a litigation issue. 

Dr. ROY. There are very ethical problems here 

Mr. GOSAR. So understanding rural and urban dictations, we are 

really skewing the benefits for rural. I am from rural Arizona. We 

are seeing huge catastrophic access issues. I mean, in the previous 

Administration, we tried to look at federally qualified health centers, which the gentlelady didn’t bring up, because they are not allowed to turn away anybody. It is a sliding fee scale, if I am not 

mistaken, right? 

Dr. ROY. Yes. 

Mr. GOSAR. They can’t turn anybody away. So that was part of 

the safety net. Unfortunately, I practiced kitty-corner from, when 

I saw the patients they didn’t want to see. Because they skewed 

the results. What they did is they Medicaid and Medicare patients 

and skewed them to a one percentage of the day and they took fee 

for service patients and insurance patients and they took them in 

at a regularly scheduled appointment. Very skewed results. 

Dr. ROY. One thing we should point out is that what the market 

price would bear would really be in a free market system for paying doctors and hospitals. We don’t know, because we don’t have 

a free market for health care, because Medicare in particular and 

also Medicaid have so distorted what the prices are for a lot of 

services. The evidence suggests that in general, the prices for these 

services in the United States are higher than they are in other 

countries. 

Mr. GOSAR. And I am going to take the liberty, since I gave the 

gentleman a little extra time, that is one of the reasons why we 

don’t have a lot of family care physicians, isn’t that true, is that 

government has skewed that process and the reimbursement rate, 

so that everybody goes into the specialty, because that is how you 

can make a living. 

94 

Dr. ROY. Which is what you will hear every physician say, they 

get paid for procedures, for writing prescriptions, they are not paid 

for their time. And that is what a lot of physicians like about socalled concierge or retainer practices, they are finally paid for their 

time and they can spend more time with their patients. Unfortunately, the evolution thereof may lead to a two-tiered system where 

you have the doctors treating Medicaid patients who don’t spend a 

lot of time with those patients. 

Mr. GOSAR. One last question. We hear of this downticking in expenditures for health care due to the ACA. I don’t agree with that, 

I think they have a lot to do with the economy. Would you agree? 

Dr. ROY. Yes, in fact, I have written about this. In general, 

across the OECD countries and developed world there has been a 

massive slowdown in the growth of health expenditures, driven by 

the global economy. Also, there has been substantial evolution in 

the United States of an increase in the use of high deductible plans 

with health savings accounts in the employer market. That is also 

leading to a slowdown in spending. 

Mr. GOSAR. I thank the gentleman. 

Mr. CUMMINGS. Would the gentleman yield for just a second? 

Mr. GOSAR. I would happily yield. 

Mr. CUMMINGS. Why don’t we want to give the President any 

credit? Any credit? I mean, I hear this over and over again, that 

the cost of insurance is going down, and you are trying to say that 

President Obama and his efforts with the Affordable Care Act have 

no effect? 

Dr. ROY. As you know, sir, the bulk of the Affordable Care Act 

has not been implemented yet. So it is very improbable that the Affordable Care Act is having a system-wide effect on health spending. 

Mr. CUMMINGS. Ms. Feder? 

Ms. FEDER. I think there are two challenges. I think we agree 

a lot on the power of the recession in bringing costs down. But 

what is missing from that picture is that Medicare, that in the Affordable Care Act, by making Medicare a more efficient, effective 

payer in terms of the reductions in overpayments, and there may 

be room to go, but that made a big difference to spending. 

And that the whole thrust of the Affordable Care Act on the cost 

containment side is to move to a more efficient delivery system in 

many of the ways that people on both sides of the aisle would like 

to see it move. That part has not had much effect yet I would 

agree. Although the Administration does point to the reductions in 

readmission rates to hospitals has already shown an influence of 

those policies. 

Mr. GOSAR. Mr. Haislmaier, I would like to give you the opportunity. 

Mr. HAISLMAIER. This really gets to the core of the debate over 

health care. The chairman was talking about the percent of GDP. 

We all know that we as a country spend more per capita, percent 

of GDP than any other country in the world on health care. We 

also are all pretty much across the political spectrum not satisfied 

with the results. 

Mr. GOSAR. Right. 

95 

Mr. HAISLMAIER. It is uneven, too many uninsured, et cetera. So 

I do this in my general audience talks, I make the observation that 

what we have here is a value problem. The value is the relationship between what we are spending and what we are getting, I 

don’t care whether you are buying a hamburger or you are buying 

health are. We are either paying too much for what we are getting 

or we are not getting enough for what we are paying. 

So the central challenge in health care is how do you improve 

value in the system. Ideally, what you would like to do is get more 

and pay less. I think we would all agree on that. I don’t think there 

is any disagreement on that. 

The problem comes in on how are you going to do it. As my colleague just pointed out, there is a view point that she holds and 

is embodied in this legislation that we can do this by having better 

micromanagement of doctors and hospitals and insurers and all the 

rest. 

The other view, that I hold and my other colleague holds is that 

the way you do this is to have Government limit itself to what it 

is competent at doing, which is pretty much in this case taking 

money from A and giving it to B and stay out of trying to run the 

rest of it. If you want to give B a little more money than C, that 

is fine too. But just move it to a patient-centered system where 

people can pick and choose and seek value and be rewarded for 

providing value. 

I look at the system as do folks on the other side, and we all look 

and we say well, gee, look at Merrill or Geisinger or InterMountain 

Health or Cleveland Clinic, they all provide better results at a 

lower price. And I look at the system and I say, okay, if that is 

true, why aren’t they eating everybody else’s lunch? Why aren’t 

other hospitals having to come to their standards or go out of business? Thanks to my office, I have a BlackBerry, but they aren’t so 

good, they are getting their lunch eaten by Apple. Why isn’t that 

happening in hospitals? Because we are propping them up with all 

these payments, et cetera. 

The other side looks at it and says, look, we can go into Merrill 

and study how they do it and then we are going to write a bunch 

of rules that tells everybody else how to do it, then we come out 

with the Affordable Care Act and the accountable care organizations. It is just a difference of how you go about doing it. 

Mr. GOSAR. I hear you. Thank you. 

I now recognize the gentlelady from New Mexico, Ms. Lujan Grisham. 

Ms. LUJAN GRISHAM. Thank you, Mr. Chairman, and I have to 

say I really appreciate the panels and this committee. I am not a 

doctor, although I have a J.D., and so Dr. Feder, thank you for 

your graduate work. I will tell you that I think I can be qualified 

as a health care expert for three reasons. I am a patient. Every single day, all the time, more than I want to be, try not to be, try to 

do everything right, doesn’t matter. 

Two, I am a primary caregiver for a chronically sick mother who 

is incredibly complicated. I don’t care what system you put her in, 

she is all by herself, she is navigating it, she is doing concierge, she 

is on Medicare, she is on Medicaid, she is on indigent care, she is 

on U and M care, she is on her own, she is married to a dentist, 

96 

doesn’t matter. It is exhausting, complicated, so complex I could 

spend the rest of my life explaining it to her. And she is a smart 

woman. Gave birth to me. 

But I can’t do it. And I have done health care and policy making 

for 30 years. 

So here is, for me, what is telling. You say that there has been 

an economic downturn, not that that is what you said, but the 

economy itself has played a huge role in the reduction of health 

care costs. CBO says exactly the opposite. We can work every single day, and we can get experts from every single place to give us 

a different opinion. We have the most complicated, convoluted system in the world. 

And the Affordable Care Act at least tries to level that in many 

ways, but I am one of those policy makers that think we need to 

go do a lot more. And I spent 20 years before the Affordable Care 

Act and before States were figuring out how to do Medicaid waivers, and before we made changes to Medicare. I watched HMOs 

and provider networks shift and change every time there was a 

profit motive to do that. Every single time. 

I dealt with patients who were left out, left under, left cold no 

matter how much they were privately paying for their health care. 

It depends on who you are, where you live, what is going on. And 

what I mean by who you are, you are more likely to be chronically 

sick or not and are you living in an urban center or not. 

So we are going to have to do not one size fits all, we have to 

do many sizes all the time. And this is a great experience about 

many people get better care as a result of the Affordable Care Act 

and get access. In New Mexico, we are paying some of the lowest 

rates in the Country because of the Affordable Care Act. Our problem is going to be insurance regulatory oversight and we don’t have 

enough insurance companies. I never thought I would say that in 

my entire life. But it happens to be true in this case, regardless of 

what my personal opinions are. It is true in this case. 

So what I am really interested in is using experts such as yourself and others to start thinking about ways, because we just cost 

shift in this Country. What we are even proposing to some degree 

is more cost shifting. Costs shift back to the States. Costs shift 

back to the individuals. Costs shift back to business. Costs shift 

back to veterans. What do we have, nine, ten, eleven independent 

systems of care that no other country has, and a not very robust 

public or community health system? Those are the real reasons 

that health care doesn’t quite work in the way that we want it to. 

And we hope that all three of you stay dedicated to help us navigate those critical next steps. Because I don’t think the Affordable 

Care Act is responsible for shifts and limited access. I think it may 

exacerbate that in some cases. I don’t think coverage means access. 

And I that will improve it in some way. I hope that we are wise 

and brave enough here to really use experts such as yourselves. I 

never mean to do these diatribes, but there are no simple questions, and there are certainly no simple answers. There are not. 

Except that if we don’t start leveling the playing field, and we 

don’t start really focusing on consumers and we are not brave 

enough here to deal with the folks who still have significant problems before the Affordable Care Act, with the Affordable Care Act, 

97 

through the Affordable Care Act, I pay more because of the Affordable Care Act. But that is because I am required to go to the D.C. 

exchange. Not because I am a consumer left to navigate through 

the Affordable Care Act rules in my own State. 

So it depends on the real details of those issues. So on the one 

hand, I can tell you that I am one of those folks who is complaining, and on the other hand, I can tell you that I am really glad 

that more people are helping me help you pay for my mother’s 

chronic care procedures every single day. And I will tell you that 

she is more than happy to help pay for everybody’s maternity care, 

so it all gets leveraged out. Because I was also county commissioner. 

Because it is not just Medicaid. Medicaid’s gaps are paid for by 

local government, which is paid for by taxpayers. It is all paid for 

by all of us, every single day, all of the time. 

So I guess my question is, and Mr. Chairman, thank you so very 

much. Is there a way that this committee can continue to work 

hard to get as much valid information about really what we can do, 

starting today? Because my provider networks changed. Because 

every time you do a reform we open a window for somebody to legally do adverse selection and cherry-picking. And that is not dealt 

with at the Federal level at all. And if I was a for-profit insurance 

company, and it is legal, why would I create a network that has 

the sickest patients? Why would you do that? You cannot. So you 

don’t. 

And that is not all the reasons that occurs, but make no mistake, 

in my opinion, there is no one here on any panel that can demonstrate that that is not part of the reason that this always happens. So thanks for being here, Dr. Feder and all the other doctors 

on the panel. I thank you for my diatribe. I feel great today, I can 

get my pens out of my finger and I am going to try not to be one 

of the expensive high-end users of health care no matter what I 

pay. 

Thank you, Mr. Chairman. 

Mr. GOSAR. I thank the lady from New Mexico and I had hoped 

that she would sign onto my bill on repealing McCain-Ferguson 

after listening to you. One of the things that you have to look at 

is getting to the least common denominator. And I will talk to you 

about that in a second. Mr. Cummings? 

Mr. CUMMINGS. Just briefly, Mr. Chairman, I will close. I want 

to go back very briefly to Dr. Roy, something you said. I am not 

asking questions, I am just giving a statement. On September 9th, 

2013, CBO Director Doug Elmendorf issued a paper entitled The 

Slowdown in Health Care Spending. Drawing from multiple 

sources, the paper concluded that health care spending growth had 

slowed dramatically across the Country. The slowdown in health 

care cost growth has been sufficiently broad and persistent to persuade us to make significant downward revisions to our projections 

of Federal health care spending, he said. 

He goes on to say specifically, CBO found that relative to a 2010 

baseline projection through 2020, Medicare spending is 15 percent 

lower than projected, Medicaid spending is 16 percent lower than 

projected. Now, this is the CBO. And private health insurance premiums, per enrollee, are 9 percent lower than projected. He goes 

98 

on to say, the paper also made clear, by the way, that these reductions, and listen to this, are apparently not because of the financial 

turmoil and recession but because of other factors affecting, and 

this goes to what you said, Dr. Feder, the behavior of beneficiaries 

and providers. 

And with that, I say this. Witnesses on the prior panel said, we 

have to get it right, we have to fix it. Chairman Issa a few minutes 

ago talking to one of our colleagues, Mr. Horsford from Nevada, 

said that there are things we have to do try to fix certain parts of 

this. And we have to. We have to get this done and get it done in 

a way where there is a win-win-win-win-win. I do believe that that 

is possible. And again, I say, coming from having traveled some 20 

hours on a plane to go to Nelson Mandela’s memorial, I have to tell 

you, I left there saying to myself, we are so fortunate in this Country, we are so fortunate to be where we are. We can accomplish 

anything. We just have to put our minds to it. 

And somebody once said, it is not that people don’t know what 

to do. It is whether they have the will do it and do it. So again, 

I want to thank you all. Your testimony has been extremely helpful. And we are going to go forward. 

Mr. GOSAR. I thank the gentleman. I would like to ask the gentleman a question. Do you believe the actuaries from the Centers 

for Medicare and Medicaid? 

Mr. CUMMINGS. Give me the specific question. 

Mr. GOSAR. Would you think that their oversight of spending 

would be more deliberative and more accurate than CBO? 

Mr. CUMMINGS. I am not sure, but one thing I do know. 

Mr. GOSAR. They deal with it every day, this is their due diligence, the actuarials deal with numbers. 

Mr. CUMMINGS. Well, the fact is, again, I quote what I just 

quoted, I do again, the costs are coming down according to CBO. 

And the reason why I got a little upset a few minutes ago, Mr. 

Chairman, and I appreciate your question, but it seems like this 

President gets no credit for anything. Nothing. Zilch. And over and 

over again, when everything goes well, some say it must have been 

a mistake, it must have been a fraud. If it goes bad, it was his 

fault. 

The fact is that there is a lot that can come out of this. We just 

have to have the will to get it done. And we will get it done. 

Mr. GOSAR. I just want to go back to my question. The actuaries 

at the Centers for Medicare and Medicaid Services, who do not answer to the White House, said yesterday in the Journal of Health 

Affairs that the costs eased because of the economy, not because of 

Obamacare. Would you agree with that, Dr. Roy? 

Dr. ROY. Yes, that is the overwhelming evidence. I would just 

add that I am an admirer of the President. If the Affordable Care 

Act is successful in achieving its stated goals, I will be absolutely 

thrilled. My concern is that it will not, and I think it is my obligation to alert the committee to the concerns that I have shown. 

Mr. CUMMINGS. You asked me a question, I just want to answer 

it in fairness to you. Earlier this year, the Centers for, they also 

said this. The Centers for Medicaid and Medicare and Services 

issued a report finding that national health spending had slowed 

to only 3.9 percent in the years between 2009 to 2011. This repVerDate Aug 31 2005 13:43 Mar 26, 2014 Jkt 000000 PO 00000 Frm 00102 Fmt 6633 Sfmt 6633 C:\DOCS\87174.TXT APRIL
99 

resents the lowest growth rate in health care spending since government began keeping these statistics in 1960. 

Mr. GOSAR. Being a dentist, just so that I am fair about this, I 

can tell you about that spending. And dentistry didn’t sell its soul 

to the Federal Government, for the most part. And there are problems don’t get me wrong. But the problem is expendable money. 

We have seen it go down. There is nobody who is flush with money 

in their pockets to buy increased care or to do investing in health 

care. There is none. 

I believe personally empowering patients. That is what Nelson 

Mandela would have wanted. Because empowering patients, not to 

make them cripples, but to make them entrepreneurs and to hold 

onto their health care and demand that system to benefit them. Patient centered, patient friendly. Has to start. And that is not what 

was included before Obamacare or in Obamacare. It is a government-dictated centric relationship. 

I want to see the patient benefit and be empowered, not to be 

a cripple. So I want to thank the witnesses for coming forward. We 

appreciate it. With that, we will adjourn this meeting. 

[Whereupon, at 1:12 p.m, the committee was adjourned.] 

(101) 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

102 


Insert offset folio 32 here 87174.032
103 


Insert offset folio 33 here 87174.033
104 


Insert offset folio 34 here 87174.034
105 


Insert offset folio 35 here 87174.035
106 


Insert offset folio 36 here 87174.036
107 


Insert offset folio 37 here 87174.037
108 


Insert offset folio 38 here 87174.038
109 


Insert offset folio 39 here 87174.039
110 


Insert offset folio 40 here 87174.040
111 


Insert offset folio 41 here 87174.041
112 


Insert offset folio 42 here 87174.042
113 


Insert offset folio 43 here 87174.043
114 


Insert offset folio 44 here 87174.044
115 


Insert offset folio 45 here 87174.045
116 


Insert offset folio 46 here 87174.046
117 


Insert offset folio 47 here 87174.047
118 


Insert offset folio 48 here 87174.048
119 


Insert offset folio 49 here 87174.049
120 


Insert offset folio 50 here 87174.050
121 


Insert offset folio 51 here 87174.051
122 


Insert offset folio 52 here 87174.052
123 


Insert offset folio 53 here 87174.053
124 


Insert offset folio 54 here 87174.054
125 


Insert offset folio 55 here 87174.055
126 

Æ 


Insert offset folio 56 here 87174.056