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76–007 2012

PRESIDENT’S FISCAL YEAR 2011 BUDGET FOR 

THE DEPARTMENT OF HEALTH AND HUMAN 

SERVICES 

HEARING 

BEFORE THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

FEBRUARY 4, 2010 

Serial No. 111–95 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 


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COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California, Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JANICE D. SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

PARKER GRIFFITH, Alabama 

ROBERT E. LATTA, Ohio 


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C O N T E N T S 

Page 

Hon. Henry Waxman, a Representative in Congress from the State of California, opening statement .................................................................................... 2 

Prepared statement .......................................................................................... 4 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 13 

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

New Jersey, opening statement .......................................................................... 14 

Hon. Nathan Deal, a Representative in Congress from the State of Georgia, 

opening statement ................................................................................................ 15 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 18 

WITNESSES

Kathleen Sebelius, Secretary, United States Department of Health and 

Human Services ................................................................................................... 20 

Prepared statement .......................................................................................... 24 

Answers to submitted questions ...................................................................... 76 

SUBMITTED MATERIAL

Letter of September 14, 2009, from the Committee to the Department of 

Health and Human Services, submitted by Mr. Deal ....................................... 69 

Letter of February 3, 2010, from Mr. Engel to the Department of Health 

and Human Services, submitted by Mr. Engel .................................................. 74 


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PRESIDENT’S FISCAL YEAR 2011 BUDGET FOR 

THE DEPARTMENT OF HEALTH AND HUMAN 

SERVICES 

THURSDAY, FEBRUARY 4, 2010 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The committee met, pursuant to call, at 2:15 p.m., in Room 2123, 

Rayburn House Office Building, Hon. Henry A. Waxman [chairman 

of the committee] presiding. 

Present: Representatives Waxman, Dingell, Markey, Pallone, 

Gordon, Rush, Eshoo, Engel, Green, DeGette, Capps, Harman, 

Schakowsky, Gonzalez, Weiner, Butterfield, Melancon, Barrow, 

Matsui, Christensen, Castor, Sarbanes, Space, McNerney, Sutton, 

Braley, Barton, Upton, Deal, Whitfield, Shimkus, Shadegg, Blunt, 

Buyer, Pitts, Bono Mack, Terry, Myrick, Murphy of Pennsylvania, 

Burgess, Blackburn, Gingrey and Scalise. 

Staff Present: Phil Barnett, Staff Director; Kristin Amerling, 

Chief Counsel; Bruce Wolpe, Senior Advisor; Karen Nelson, Deputy 

Committee Staff Director for Health; Andy Schneider, Chief Health 

Counsel; Rachel Sher, Counsel; Jack Ebeler, Senior Advisor on 

Health Policy; Brian Cohen, Senior Investigator and Policy Advisor; 

Robert Clark, Policy Advisor; Elana Stair, Policy Advisor; Katie 

Campbell, Professional Staff Member; Tim Gronniger, Professional 

Staff Member; Virgil Miller, Professional Staff Member; Anne Morris, Professional Staff Member; Alvin Banks, Special Assistant; Allison Corr, Special Assistant; Eric Flamm, FDA Detailee; Camille 

Sealy, Fellow; Andrew Bindman, Fellow (Robert Wood Johnson); 

Karen Lightfoot, Communications Director, Senior Policy Advisor; 

Lindsay Vidal, Special Assistant; Earley Green, Chief Clerk; Jen 

Berenholz, Deputy Clerk; Mitchell Smiley, Special Assistant; Matt 

Eisenberg, Staff Assistant; Mark Noble, Director of New Media; 

David Cavicke, Minority Chief of Staff; Katie Wheelbarger, Minority Deputy Chief of Staff; Amanda Mertens Campbell, Minority 

General Counsel; Brandon Clark, Minority Professional Staff Member; Marie Fishpaw, Minority Professional Staff Member; Ryan 

Long, Minority Counsel; Aarti Shah, Minority Counsel; Clay 

Alspach, Minority Counsel; Melissa Bartlett, Minority Counsel; 

Will Carty, Minority Professional Staff Member; Peter Kielty, Minority Legislative Analyst; and Cedric James, Minority Legislative 

Analyst. 


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

Mr. WAXMAN. The meeting will come to order. 

This afternoon we will hear from the distinguished Secretary of 

the Department of Health and Human Services, Kathleen Sebelius. 

She will testify on the health proposals in the President’s fiscal 

year 2011 budget for which her department has responsibility. 

This responsibility is daunting. The department she leads has a 

budget of over $900 billion in fiscal year 2011. The programs that 

her department administers will directly affect the Nation’s public 

health and will ensure access to needed health care to over 100 

million Americans enrolled in Medicare, Medicaid, and the Child 

Health Insurance Program. 

As President Obama reminded us on Monday, our Nation is at 

war, and our economy has lost 7 million jobs over the last 2 years. 

The deficit that greeted this administration stood at $1.3 trillion. 

Successful efforts over the past year to rescue the economy and the 

financial system from collapse have unavoidably added to that deficit. 

We clearly need to solve the deficit problem, but we can’t do it 

overnight, and the President’s budget wisely does not try to do so. 

The budget strikes a careful balance, helping unemployed families 

by creating jobs and protecting them against the loss of health insurance, investing in next-generation health care technologies, and 

taking steps to reduce the deficit while protecting the most important investments. 

In the health area, the President’s budget recognizes that certain 

investments are essential while the economic recovery is still underway. The budget supports the enactment of health reform, 

which will provide affordable coverage for over 30 million uninsured Americans while we reducing the unsustainable rate of increase in health care costs. The budget recognizes the need to protect the ability of America’s seniors to see their doctors by repairing Medicare’s physician payment system. The budget provides additional help to States that are struggling to maintain their Medicaid programs in the face of increased demand and reduced revenues. 

The budget increases funding for community health centers to 

provide cost-effective primary care, and it invests in prevention and 

wellness activities to improve the Nation’s health and to reduce the 

need for expensive medical care. The budget increases resources for 

FDA that will enable the agency to improve its oversight of medical 

products, strengthen its food safety efforts, and implement its new 

responsibility for tobacco. 

It is the duty of Congress to consider the President’s budget proposals as it makes its spending and revenue decisions for the coming fiscal year. Secretary Sebelius is here to assist the members of 

this committee in carrying out that responsibility by giving us a 

better understanding of the proposals and their rationale. Through 

this conversation, we can together make Federal health programs 

work as effectively and efficiently as possible. I look forward to 

hearing from her. 


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I want to recognize for the purpose of an opening statement the 

ranking member of the committee, Mr. Barton, for 5 minutes. 

[The prepared statement of Mr. Waxman follows:] 


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Opening Statement of Rep. Henry A. Waxman 

Chairman, Committee on Energy and Commerce 

"Secretary Kathleen Sebelius: The President's Fiscal Year 

2011 Budget" 

February 4, 2010 

This afternoon, we will hear from the distinguished 

Secretary of the Department of Health and Human Services, 

Kathleen Sebelius. She will testifY on the health proposals in 

the President's Fiscal Year 2011 Budget for which her 

Department has responsibility. 

This responsibility is daunting. The Department she leads 

has a budget of over $900 billion in FY 2011. The programs 

that her Department administers will directly affect the nation's 

public health and will ensure access to need health care by over 

100 million Americans enrolled in Medicare, Medicaid, and the 

Child Health Insurance Program. 
5 


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As President Obama reminded us on Monday, our nation is 

at war, and our economy has lost 7 million jobs over the last two 

years. The deficit that greeted his Administration stood at $1.3 

trillion. Our successful efforts over the past year to rescue the 

economy and the financial system from collapse have 

unavoidably added to that deficit. 

We clearly need to solve the deficit problem. But we can't 

do it overnight, and the President's budget wisely does not try to 

do so. 

The budget strikes a careful balance-helping unemployed 

families by creating jobs and protecting them against the loss of 

health insurance; investing in next-generation health care 

technologies; and taking steps to reduce the deficit while 

protecting the most important investments. 

2 
6 


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In the health area, the President's budget recognizes that 

certain investments are essential while the economic recovery is 

still underway: 

• The budget supports the enactment of health reform, 

which will provide affordable coverage for over 30 

million uninsured Americans while reducing the 

unsustainable rate of increase in health care costs. 

• The budget recognizes the need to protect the ability of 

America's seniors to see their doctors by repairing 

Medicare's physician payment system. 

• The budget provides additional help to states that are 

struggling to maintain their Medicaid programs in the 

face of increased demand and reduced revenues. 

• The budget increases funding for community health 

centers to provide cost-effective primary care, and it 

invests in prevention and wellness activities to improve 

the nation's health and to reduce the need for expensive 

medical care. 

3 
7 


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• The budget increases resources for FDA that will enable 

the agency to improve its oversight of medical products, 

strengthen its food safety efforts, and implement its new 

responsibilities for tobacco. 

It is the duty of Congress to consider the President's budget 

proposals as it makes its spending and revenue decisions for the 

coming fiscal year. 

Secretary Sebelius is here to assist the Members of this 

Committee in carrying out that responsibility by giving us a 

better understanding of the proposals and their rationale. 

Through this conversation, we can together make federal 

health programs work as effectively and efficiently as possible. 

I look forward to learning from her. 

4 
8 

Mr. BARTON. Mr. Chairman, before I do that, I have a parliamentary inquiry. 

Mr. WAXMAN. The gentleman will make his parliamentary inquiry. 

Mr. BARTON. What is the position of the Chair for today’s hearing 

in terms of opening statements by Members on both sides of the 

aisle? 

Mr. WAXMAN. We will divide the opening statements equally between the Chair of the full committee, the Chair of the subcommittee, the ranking member of the full committee, and the 

ranking member of the subcommittee. And we will then go right to 

the hearing with the Secretary. After that, every member will have 

an opportunity for 5 minutes. They can use that for their statements, they can use that for questions, they can use it however 

they see fit. But under the rules adopted by the committee, we anticipated that there would be an occasion like this where, while we 

ordinarily like to let members have opening statements, we just 

can’t accommodate all the members that would like to make opening statement and be able to get to the Secretary and meet 

everybody’s schedule. I regret that. We have made accommodations 

notwithstanding the rules on a number of other occasions, but we 

are going to have to stick tight to the rules at this time. 

Mr. BARTON. Mr. Chairman, so what you are saying is that the 

only members that can make an opening statement are the chairman, the subcommittee chairman, the ranking member of the full 

committee and the subcommittee, and no other member; is that 

correct? 

Mr. WAXMAN. Yes. And that would include Mr. Dingell, which we 

have always done in all of our hearings. 

Mr. BARTON. Based on that, Mr. Chairman, I would move to 

postpone the hearing. 

Mr. WAXMAN. There is a motion before us to postpone the hearing. All those in favor of the motion say aye. Aye. All those opposed 

say no. No. The nos have it, the motion is not agreed to. 

Mr. BARTON. Mr. Chairman, on that, I would request a roll call 

vote. 

Mr. WAXMAN. I would like to ask the gentleman to refrain from 

doing that. We do have the Secretary here. We try to accommodate 

you. We are not doing this out of any malice or meanness, but we 

tried to accommodate Dr. Burgess in his request, we have tried to 

accommodate people with opening statements. Usually we try to 

get the meeting started earlier so we can do opening statements; 

we are not able to do that today. And I think it is self-defeating. 

Mr. BARTON. I opposed the rule that you implemented—— 

Mr. WAXMAN. But you lost. 

Mr. BARTON. We did lose, but I have the right to request a roll 

call vote, and I am going to do that. And that is in the rules. But 

if you have chosen to not do it, then we are going to use the rules 

that we have. I am going to request a roll call vote. 

Mr. WAXMAN. The gentleman requests a roll call vote. The Chair 

is going to inquire of the parliamentarian if this motion—— 

The Clerk will call the roll. 

The CLERK. Mr. Waxman? 

Mr. WAXMAN. No. 


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The CLERK. Mr. Waxman votes no. 

Mr. Dingell? 

[No response.] 

The CLERK. Mr. Markey? 

[No response.] 

The CLERK. Mr. Boucher? 

[No response.] 

The CLERK. Mr. Pallone? 

Mr. PALLONE. No. 

The CLERK. Mr. Pallone votes no. 

Mr. Gordon? 

Mr. GORDON. No. 

The CLERK. Mr. Gordon votes no. 

Mr. Rush? 

[No response.] 

The CLERK. Ms. Eshoo? 

Ms. ESHOO. No. 

The CLERK. Ms. Eshoo votes no. 

Mr. Stupak? 

[No response.] 

The CLERK. Mr. Engel? 

Mr. ENGEL. No. 

The CLERK. Mr. Engel votes no. 

Mr. Green? 

Mr. GREEN. No. 

The CLERK. Mr. Green votes no. 

Ms. DeGette? 

Ms. DEGETTE. No. 

The CLERK. Ms. DeGette votes no. 

Mrs. Capps? 

Mrs. CAPPS. No. 

The CLERK. Mrs. Capps votes no. 

Mr. Doyle? 

[No response.] 

The CLERK. Ms. Harman? 

Ms. HARMAN. No. 

The CLERK. Ms. Harman votes no. 

Ms. Schakowsky? 

Ms. SCHAKOWSKY. No. 

The CLERK. Ms. Schakowsky votes no. 

Mr. Gonzalez? 

Mr. GONZALEZ. No. 

The CLERK. Mr. Gonzalez votes no. 

Mr. Inslee? 

[No response.] 

The CLERK. Ms. Baldwin? 

[No response.] 

The CLERK. Mr. Ross? 

[No response.] 

The CLERK. Mr. Weiner? 

[No response.] 

The CLERK. Mr. Matheson? 

Mr. MATHESON. No. 

The CLERK. Mr. Matheson votes no. 


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Mr. Butterfield? 

Mr. BUTTERFIELD. No. 

The CLERK. Mr. Butterfield votes no. 

Mr. Melancon? 

Mr. MELANCON. No. 

The CLERK. Mr. Melancon votes no. 

Mr. Barrow? 

Mr. BARROW. No. 

The CLERK. Mr. Barrow votes no. 

Mr. Hill? 

[No response.] 

The CLERK. Ms. Matsui? 

Ms. MATSUI. No. 

The CLERK. Ms. Matsui votes no. 

Mrs. Christensen? 

[No response.] 

The CLERK. Ms. Castor? 

Ms. CASTOR. No. 

The CLERK. Ms. Castor votes no. 

Mr. Sarbanes? 

Mr. SARBANES. No. 

The CLERK. Mr. Sarbanes votes no. 

Mr. Murphy of Connecticut? 

[No response.] 

The CLERK. Mr. Space? 

[No response.] 

The CLERK. Mr. McNerney? 

[No response.] 

The CLERK. Ms. Sutton? 

Ms. SUTTON. No. 

The CLERK. Ms. Sutton votes no. 

Mr. Braley? 

Mr. BRALEY. No. 

The CLERK. Mr. Braley votes no. 

Mr. Welch? 

[No response.] 

The CLERK. Mr. Barton? 

Mr. BARTON. Aye. 

The CLERK. Mr. Barton votes aye. 

Mr. Hall? 

[No response.] 

The CLERK. Mr. Upton? 

Mr. UPTON. Aye. 

The CLERK. Mr. Upton votes aye. 

Mr. Stearns? 

[No response.] 

The CLERK. Mr. Deal? 

Mr. DEAL. Aye. 

The CLERK. Mr. Deal votes aye. 

Mr. Whitfield? 

Mr. WHITFIELD. Aye. 

The CLERK. Mr. Whitfield votes aye. 

Mr. Shimkus? 

Mr. SHIMKUS. Aye. 


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The CLERK. Mr. Shimkus votes aye. 

Mr. Shadegg? 

[No response.] 

The CLERK. Mr. Blunt? 

Mr. BLUNT. Aye. 

The CLERK. Mr. Blunt votes aye. 

Mr. Buyer? 

Mr. BUYER. Aye. 

The CLERK. Mr. Buyer votes aye. 

Mr. Radanovich? 

[No response.] 

The CLERK. Mr. Pitts? 

Mr. PITTS. Aye. 

The CLERK. Mr. Pitts votes aye. 

Mrs. Bono Mack? 

Mrs. BONO MACK. Aye. 

The CLERK. Mrs. Bono Mack votes aye. 

Mr. Walden? 

[No response.] 

The CLERK. Mr. Terry? 

Mr. TERRY. Aye. 

The CLERK. Mr. Terry votes aye. 

Mr. Rogers? 

[No response.] 

The CLERK. Mrs. Myrick? 

Mrs. MYRICK. Aye. 

The CLERK. Mrs. Myrick votes aye. 

Mr. Sullivan? 

[No response.] 

The CLERK. Mr. Murphy of Pennsylvania? 

Mr. MURPHY of Pennsylvania. Aye. 

The CLERK. Mr. Murphy of Pennsylvania votes aye. 

Mr. Burgess? 

Dr. BURGESS. Aye. 

The CLERK. Mr. Burgess votes aye. 

Mrs. Blackburn? 

Mrs. BLACKBURN. Aye. 

The CLERK. Mrs. Blackburn votes aye. 

Mr. Gingrey? 

Mr. GINGREY. Aye. 

The CLERK. Mr. Gingrey votes aye. 

Mr. Scalise? 

Mr. SCALISE. Aye. 

The CLERK. Mr. Scalise votes aye. 

Mr. Rush? 

Mr. RUSH. No. 

The CLERK. Mr. Rush votes no. 

The CLERK. Mr. Weiner. 

Mr. WEINER. No. 

The CLERK. Mr. Weiner votes no. 

Mr. Space? 

Mr. SPACE. No. 

The CLERK. Mr. Space votes no. 

Mr. Dingell? 


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Mr. DINGELL. No. 

The CLERK. Mr. Dingell votes no. 

Mr. Markey? 

Mr. MARKEY. No. 

The CLERK. Mr. Markey votes no. 

Mr. Shadegg? 

Mr. SHADEGG. Aye. 

The CLERK. Mr. Shadegg votes aye. 

The CLERK. Mr. McNerney? 

Mr. MCNERNEY. No. 

The CLERK. Mr. McNerney votes no. 

Mr. WAXMAN. Have all members responded? The clerk will count 

the votes and announce them. 

The CLERK. On this vote, Mr. Chairman, the ayes are 17, the 

nays are 25. 

Mr. WAXMAN. 17 ayes, 25 noes. The motion is not agreed to. 

Mr. Barton, do you wish to have an opening statement? 

Mr. BARTON. I wish to have another parliamentary inquiry based 

on my opening statement. 

Mr. WAXMAN. The gentleman will state his parliamentary inquiry. 

Mr. BARTON. Under the Chairman’s prerogative, you are not allowing opening statements except for two members on each side, 

the Chair, the subcommittee Chair, the ranking member of the full 

and the subcommittee. 

Mr. WAXMAN. And Mr. Dingell. 

Mr. BARTON. And Mr. Dingell. Within that group, are members 

allowed to sublease their time? For example, if I don’t want to use 

my 5 minutes, can I sublease 1 minute to Dr. Gingrey and 1 

minute to Dr. Burgess under your ruling, as long as I don’t take 

more than 5 minutes total? 

Mr. WAXMAN. I have no objection if you want to use your time 

and distribute it to other members, but we have to stay within the 

time. 

Mr. GREEN. Mr. Chairman, parliamentary inquiry. 

Mr. WAXMAN. The gentleman will state his parliamentary inquiry. 

Mr. GREEN. Mr. Chairman, I understood that when each of us 

get our 5 minutes, we can either make a statement or we can ask 

questions. 

Mr. WAXMAN. Absolutely. That is, of course, after the Secretary 

testifies. 

Mr. GREEN. I just wanted to make sure that we will have the 

chance to either make a statement or ask questions. Thank you. 

Mr. WAXMAN. Without objection, the Chair will yield to Mr. Barton his 10 minutes—your 5 minutes. 

Mr. BARTON. I will take 10, Mr. Chairman. 

Mr. WAXMAN. We will yield to you your 5 minutes. 

Mr. BARTON. I will take 20 if you will give me 20. 

Mr. WAXMAN. Well, you have already taken a lot of time. 

Mr. BARTON. Well, I think it is important that members on both 

sides, Mr. Chairman, have the right—— 

Mr. WAXMAN. The gentleman is recognized for 5 minutes; it is 

his time to do with as he sees fit. 


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OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. All right. I will make this statement: The little exercise that we just went through is to give every member of this 

committee an opportunity to talk to the President’s designee for 

health care before she gives her opening statement. I think that is 

important for every member of this committee on both sides of the 

aisle. I strongly disagree with the rule that was implemented at 

the start of this Congress. I can’t prevent its implementation because the majority did vote to give Chairman Waxman that power 

and he has used it; I think he has used it mistakenly, but he does 

have the right to do that. 

Having said that, Mr. Chairman, we are delighted to have our 

Secretary of Health and Human Services before us. We have received the President’s budget and we understand that she is prepared to explain that budget. We also hope that she will be willing 

to answer some questions about what the President intends to do 

in terms of his health care policy given what has happened in Massachusetts and in the other body. 

With that, I would be happy to yield to Dr. Gingrey for 1 minute 

if he would wish to make a brief opening statement. 

Mr. GINGREY. Mr. Chairman, I thank the gentleman for yielding. 

Madam Secretary, I thank you for being here. 

The President’s $911 billion budget request for the Department 

of HHS represents a 10 percent increase in spending over last 

year’s budget. While there are some laudable things included in 

this proposal, this budget rests on cutting $500 billion from the 

Medicare program. These cuts, according to, Madam Secretary, 

your chief actuary of the Medicare program, will ‘‘result in less generous benefits, and might result in physicians who treat Medicare 

seniors ending their participation in the program.’’ 

Eleven million seniors are enrolled in Medicare Advantage plans, 

roughly a quarter of all Medicare beneficiaries are at considerable 

risk, and they will incur hundreds of dollars in annual cost increases to make up for these cuts. Trimming the fat from the program is one thing, but gutting the program is certainly another. 

Mr. Chairman, let me say again, our seniors’ health care program and their pocketbooks should not be used as a piggy bank to 

fund a government one-size-fits-all takeover of our health care system. 

I yield back the time and I thank the gentleman for yielding. 

Mr. BARTON. I now want to yield to the vice ranking member, 

Mr. Blunt of Missouri, for 1 minute. 

Mr. BLUNT. Thank you, Mr. Barton, for yielding to me. 

Frankly, Mr. Barton and members of the committee, I think this 

budget does not accurately reflect our current economic situation. 

The so-called ‘‘spending freeze’’ doesn’t even go into effect until 

next year. The budget has a complete lack of detail when it comes 

to Medicare cost containment, much less detail than the budget the 

President submitted last year. 

There are also discrepancies that make the administration’s 

goals unclear because this budget seems to assume that health care 

reform would already be enacted. I would be interested particularly 

to hear why high-risk pools are excluded from the budget and what 


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the administration’s plans for these programs will be. Currently, 

this program serves thousands of Missourians that otherwise would 

be uninsured. I would like to see it expanded rather than eliminated from the budget. I hope to learn today that that is not the 

goal of the budget, even though the budget excludes high-risk programs. 

I yield back. 

Mr. BARTON. Is there anybody else on my final 11⁄2 minutes that 

wishes to say something before I finish up? Seeing no hands raised, 

let me conclude my time, Mr. Chairman, by simply saying that 

when the President was sworn into office, at our first meeting in 

the White House he promised a health care reform package that 

wouldn’t add one net dime to the national debt. As we all know, 

the plan that has come out of the Congress, or at least out of the 

House, is a huge unfunded mandate. In this particular budget that 

has been presented, it appears that there will be even more spending on health care. We don’t see how that is reconcilable. We do 

know that over 60 percent of the population in this country has expressed their disapproval of the plan that is languishing, the different plans in the House and the Senate. We would hope, Mr. 

Chairman and Madam Secretary, that the President will reach out 

to everybody on both sides of the aisle, start over and deliver an 

honest, bipartisan effort to try to get a health care plan that is affordable, that is real reform, and it does provide more health care 

for more Americans. 

With that, Mr. Chairman, I yield back the remaining 10 seconds 

of my time. 

Mr. WAXMAN. The gentleman yields back his time. 

Mr. Pallone. 

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

Mr. PALLONE. Thank you, Mr. Chairman. 

I want to welcome the Secretary here this afternoon. We always 

enjoy it when you visit the committee. 

It is often said that budgeting is about setting priorities: how do 

we allocate our resources to those things that we value? And this 

is no easy task especially amid concerns of rising deficits and debt. 

But it is clear to me that based on the President’s budget proposal, 

health care remains a top priority for this administration. I am 

happy that this is the case because as we all know the health care 

problems that American families face are getting worse and need 

our attention. 

Millions of Americans have lost their jobs amid the recession and 

with it access to their employer-sponsored health insurance. In 

order to help provide some relief to these families, last year we 

passed the American Reinvestment and Recovery Act, which included additional money to help maintain State Medicaid programs 

in the face of increasing enrollment and fewer State dollars. In addition, we provided laid-off workers with a new 65 percent subsidy 

to help them purchase COBRA coverage. 

As unemployment stubbornly hovers at 10 percent, we need to 

maintain these safety net programs. That is why I was glad to see 


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the President’s request for an additional $25.5 billion to extend the 

temporary FMAP increase, as well as another extension of the subsidy for COBRA continuation coverage. These immediate investments are critically important to making sure those families who 

continue to fall on hard times have the support they need from 

Washington. 

This budget also plans for long-term investments in our health 

care system. For example, the efforts already underway and the investments the administration plans to make in the area of health 

information technology, or HIT, will help modernize our health care 

system, thereby improving the quality of care, improving efficiency, 

and lowering health care costs in the long run. 

And Madam Secretary, this budget builds on a lot of our accomplishments from last year. That much is clear to me. But as you 

know, there is still a lot more to be done. We must rein in out-ofcontrol health care costs that are choking America’s working families, businesses, and the government. We need to improve access to 

affordable and quality health care coverage for the millions of 

Americans who are currently without health insurance or on the 

verge of losing the coverage that they currently have. And we need 

to put an end to the abuses and outright discrimination used by insurance companies to deny people the care they need and increase 

their profits. 

In sum, we need a comprehensive health reform bill. And I look 

forward to working with you and the President on the many priorities laid out in this budget, especially enacting comprehensive 

health reform this year. 

I thank you, Mr. Chairman, and also the Secretary for being here 

today, as always. Thank you. 

Mr. WAXMAN. Thank you, Mr. Pallone. 

The Chair recognizes Mr. Deal, the ranking member of the subcommittee. 

Mr. DEAL. Mr. Chairman, I have 5 minutes; could I allocate time 

also among members? 

Mr. WAXMAN. The gentleman is recognized for 5 minutes to use 

as he sees fit. 

OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA 

Mr. DEAL. Thank you, Mr. Chairman. 

This budget proposal, of course, leaves many unanswered questions; one, of course, is the question of the impact of the proposed 

health care reform legislation that is still pending. The budget, as 

I see it, leaves a placeholder with a projected savings of $150 billion, but there are certainly questions relating to that. We know 

that the original proposal was to cut Medicare and help pay for the 

cost of any proposed new legislation. I would be interested to hear 

what the Secretary says with regard to the administration’s position on that. 

Also, the budget appears to write off almost $400 billion in anticipation of the SGR fix. We obviously would be interested in 

knowing what is going to take the place of SGR and whether or not 

that new program would anticipate curbing over-utilization of 

Medicare services. But for many of us, Medicaid is one of the bigVerDate Mar 15 2010 08:59 Nov 06, 2012 Jkt 076007 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 E:\HR\OC\A007.XXX A007

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gest areas of concern. Under this budget, the Federal share of Medicaid outlays would be $297 billion for fiscal year 2011. That is a 

7.8 percent increase over fiscal year 2010 and a $95.4 billion, or a 

47.4 percent increase, over fiscal year 2008 spending. That is of 

concern as we see the mandated expansion of Medicaid under the 

proposed bills that are now still pending. Those are concerns as to 

how the government—and States, of course, too—are going to be 

expected to pay for those expanded coverages. 

I will yield at this time 1 minute to Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Deal. And Madam Secretary, welcome. 

Today we are in the process of increasing the debt limit on the 

floor of the House. I think it is the fifth time that we have increased the debt limit since the Democrats have been in control of 

Congress, and we are doing so again. 

Instead of freezing, can’t we find one penny on the dollar savings 

across the board in Federal spending, just one cent of a dollar? I 

think we can, and that is why we have difficulty with this budget. 

The discretionary end, as you know, is only about one-fourth of 

the budgetary spending. If we are not talking about the entitlement programs of Medicare and Medicaid, we are not addressing 

the real problems that we have in this catastrophic budget deficit 

and the debt that we are incurring. And as you know, on the entitlement programs of Medicaid, as they expand, which these health 

care plans do, we force the States to pay in more money that they 

don’t have. 

So we have a lot of questions, Mr. Chairman. I wish we had more 

time. I look forward to the rest of the questions that we have to 

offer, and I yield back. 

Mr. DEAL. I yield to Mr. Murphy. 

Mr. MURPHY of Pennsylvania. Thank you. 

Madam Secretary, thank you for being here. Sometimes it is not 

a pleasant thing to be in front of Members of Congress. But I just 

thought I would make a recommendation of something that hopefully you will have some power or control of doing, and that is, as 

we look at health care issues, one of the things that I think is so 

important is looking at how we can save money, not deal with 

health care by raising taxes, not deal with health care by spending 

more, but sometimes look at our Medicare and Medicaid programs. 

As you know, they were founded in the 1960s and have thousands of things they pay but—for none of us still drive a 1965 car— 

we hope not, unless it has been overhauled a few times. There are 

still incredible inefficiencies in those programs in things that unfortunately take an act of Congress to change, and things are not 

there yet in some programs. We should be doing more coordinating 

care. 

The paperwork, the procedures, the prescription errors are still 

a problem for us. It takes months to get a motorized wheelchair. 

If someone gets some emergency medicine and they need more 

until a prescription arrives, the amount of paperwork physicians 

have to do, it just adds more to that. 

Home infusion therapy is still not permitted even if someone is 

capable of doing that. That takes an act of Congress to change, too. 

So I hope that you will use your leadership and your position to 


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help streamline a lot of this. Quite frankly, I think we can save billions of dollars and tens of thousands of lives by making things better in this whole process. And there I think we will see an awful 

lot of savings which you can use to deal more with our health care 

in America. 

With that, I yield back my time. 

Mr. DEAL. I would be glad to yield to any other members on the 

Republican side who want time. If not, I yield back my time, Mr. 

Chairman. 

Mr. WAXMAN. The gentleman yields back his time. 

Mr. Dingell, do you wish to make an opening statement? 

Mr. DINGELL. Mr. Chairman, thank you. I would like to welcome 

the Secretary to the committee. Her father, as we all remember, 

was a distinguished member of this committee and this body, and 

her father-in-law was a distinguished Republican Member of the 

Congress. Welcome. 

In the interest of time, and out of my respect for my colleagues, 

I ask unanimous consent to insert my statement in the record. 

[The prepared statement of Mr. Dingell follows:] 


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Statement of 

The Honorable John D. Dingell 

Committee on Energy and Commerce Hearing 

"President's Fiscal Year 2011 Budget for the Department of 

Health and Human Services" 

February 4, 2010 

Thank you, Mr. Chairman. Madam Secretary, it is an honor to have 

you here today. I look forward to your testimony. 

The budget that you are presenting to us today is a responsible 

document that recognizes the challenges of the recession while also making 

fiscal responsibility a key priority. Your commitment to reducing waste, 

fraud and abuse in the health care system is to be commended. The American 

taxpayers deserve to know how their dollars are being spent and should have 

full confidence that no penny is going to people or organizations that are 

cheating the system. 

I am particularly pleased to see health care reform in your budget and I 

am confident we will see success on this front this year. Our nation's fiscal 

health depends on it. 

If we are to truly get serious about the federal budget deficit, we must 

press ahead on comprehensive health care freeform. Just today we learned 

that health care costs consumed 17.3 percent of the GDP last year. The 

Congressional Budget Office predicts that if we do nothing, health care costs 

will grow to 25 percent in 2025,37 percent in 2050, and 49 percent in 2082. 

This projected path is unsustainable to the federal government, businesses, 

and American families. 

We are closer to enacting comprehensive health care reform than ever 

before and we can not stop now. 

The President's budget shows a clear commitment to programs critical 

to our people during our tough economic times: 
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• 6-month extension of the Recovery Act FMAP funding; 

• Improvements in the LIHEAP program; 

• Increased funding for child care assistance programs; 

• Expansion of Community Health Centers. 

I also note the President's sound commitment to science, including an 

increase in NIH and comparative effectiveness funding, and additional 

funding for the FDA. 

Ensuring that the Food and Drug Administration the authority and 

resources it needs to properly protect the American people has been a long 

priority of mine. I am thankful for your partnership on this issue during our 

deliberations on food safety. I look forward to working with you on 

legislation on medical product safety in the near future. My hope is to 

provide the necessary authorities and resources to take FDA regulation into 

the 21 5t century. 

Thank you again. I yield back the balance of my time. 
20 

Mr. WAXMAN. Thank you, Mr. Dingell. 

Madam Secretary, we are delighted you are here. We have been 

looking forward to hearing from you. We wish we had been able to 

hear from you earlier, but we are delighted to recognize you now 

and to have you make such statements as you wish to make to us 

about the budget matter. 

STATEMENT OF KATHLEEN SEBELIUS, SECRETARY, UNITED 

STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES 

Secretary SEBELIUS. Thank you very much. 

Chairman Waxman, Chairman Emeritus Dingell, Ranking Member Barton, Representative Pallone, Representative Deal, and 

members of the committee, thank you for inviting me here to discuss the 2011 budget for the Department of Health and Human 

Services. 

We think the budget builds on the themes that the President laid 

out in his State of the Union, strengthening security and opportunity for America’s working families, investing to build a foundation for future growth, and bringing in a level of accountability and 

transparency to government. It abides by the pledge to root out 

programs that are redundant and obsolete. 

Under this budget, we seek to provide the health and human 

services that Americans depend on more effectively and more focused results. We will make necessary investments that our country has been putting off for years, including investments in fighting 

health care fraud, strengthening our public health infrastructure, 

and getting serious about prevention and wellness. 

The budget is a major step toward a healthier, stronger America, 

and we think that this budget and comprehensive health reform 

will make families healthier, create jobs, and give them the security and stability they need. 

We are firmly committed to health insurance reform, and as the 

President reaffirmed, we are always willing to listen to ideas and 

work with anyone who is interested in finding a comprehensive solution to the health care crisis. Reform is still the best way to help 

millions of Americans without health insurance and millions more 

who are underinsured or who have a preexisting condition. 

It is still the best way to help Americans who are just a pink slip 

away from losing their insurance. The administration continues to 

reach out to Members of Congress, doctors, nurses, hospitals, and 

other key partners in this effort. 

But the investments we are making in 2011 support the goals of 

reform, improving America’s access to the high-quality health care 

they need. I look forward to discussing the importance of these reforms with you, but I want to give you just a brief overview of the 

budget priorities for this year and then look forward to the questions. 

From day one, the President said we need to put science first, 

and that is really how our Department is run, it is reflected in the 

budget. Whether it is fighting a pandemic or protecting food safety 

or transforming the health care system with electronic medical 

records, the investments we are making are guided by some of the 

best scientific and medical experts in the world. We are also guided 

by a constant vigilance about using taxpayer dollars wisely. 


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At a time when so many American families are scraping together 

every last dollar to pay their medical bills, fraud, waste and abuse 

are unacceptable. That is why this budget contains an historic investment in cracking down on the health care fraudsters who steal 

from taxpayers, endanger patients, and jeopardize Medicaid and 

Medicare’s future. The investment allows us to build on efforts that 

began last May when the President asked the Attorney General 

and me to put together a new fraud task force known as HEAT. 

It is an unprecedented partnership, bringing together high-level 

leaders from both departments to share information, spot trends, 

coordinate strategies, and develop new fraud, prevention and prosecution teams. 

One year ago today, we extended access to millions of children 

through the CHIP Reauthorization Act. In 2009, we know that 2.5 

million more children who were previously uninsured got health 

care coverage from Medicaid or CHIP. Now part of that landmark 

legislation contains funds to help us reach out to the approximately 

4 to 5 million children who are eligible but not yet enrolled in those 

critical programs. 

We are also investing new funds in what I consider to be the 

backbone of the American health care system, community health 

centers. Thanks to this investment, the neighborhood centers will 

provide high-quality primary care for 20 million people a year, 3 

million more than were able to be served in 2008. The budget ensures up-to-date care for seniors and people with disabilities who 

depend on Medicare. On top of that, we have almost $1 billion in funding to strengthen and support our country’s health care workforce. We increase 

funds for the Indian health service. American Indians and Alaska 

Natives historically have not gotten the care they have been promised and deserve, but we are working to change this because, regardless of race, ethnicity, gender, disability or geography, every 

American deserves high-quality, affordable care. 

We are investing in next-generation health care technologies to 

help providers raise the quality of care for all Americans. The 

adoption by doctors and hospitals of electronic health records reduces medical errors, helps coordinate care, and cuts cost and paperwork. 

This budget does assume a zero percent update for physician 

payments. Everyone agrees that the scheduled Medicare physician 

payment cuts are not sustainable and would seriously damage access to care for Medicare beneficiaries. So we are recognizing this 

as an honest budget that reflects Congress’ continued action in this 

area. And we look forward to working with you, Mr. Chairman, and 

your committee to develop the payment policy to give physicians incentives to improve quality and efficiency. 

Our budget is based on our growing understanding that health 

is influenced by many factors outside a doctor’s office. Where you 

live matters, what you eat and drink matters, even what you watch 

on television. And to help more Americans live healthy lifestyles, 

the budget continues the work of rebuilding the public health infrastructure. What we have today is overwhelmingly a sick care system, where we wait until something goes wrong to intervene. We 

are trying to build a true health care system. To that end, the 


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budget creates a new program at the Centers for Disease Control 

and Prevention that will work to reduce the rates of disability and 

morbidity due to chronic disease in 10 of our biggest U.S. cities. It 

will allow us to begin the serious fight against obesity, a problem 

costing our health care system almost $150 billion a year. 

There is a significant increase to help us build a 21st century 

food safety system to go along with our 21st century food market 

where nearly half our fruit and over three-quarters of our seafood 

come from overseas. We are expanding the efforts of the new Food 

Safety Working Group that I cochair with Agriculture Secretary 

Tom Vilsack. The additional funding allows us to update food safety standards, enhance surveillance and response, and hire 350 additional food inspectors. It makes a serious investment in our battle 

against smoking. The budget provides significant funds for educating children about the dangers of smoking and new research to 

help us develop better ways to stop Americans from smoking. 

While we continue to do the steady work of promoting health 

care, we also need to prepare for public health emergencies, whether their cause is mother nature or our fellow man. Some of the best 

defenses are medical countermeasures—vaccines, treatments, respirators, among other things, that help reduce the spread of infections, reduce health consequences, and ultimately save lives. 

This flu season we got a wake-up call about the readiness of our 

countermeasures. Even as our scientists and private sector partners scrambled to produce a safe, effective vaccine in six months— 

three months faster than it usually takes—we saw temporary vaccine shortages because the vaccine grew slowly in chicken eggs, an 

unpredictable process we have used for the last 50 years. So the 

budget includes a half billion dollars to upgrade countermeasures. 

Just as important, it contains significant funds for NIH for research that continues many of the breakthroughs that make these 

countermeasures possible. 

We are also taking a comprehensive review of our entire countermeasure production process, from laboratory to the doctor’s office, 

and we will have a report to give this committee later this year. 

Strengthening America’s health is half of our mission, and our 

budget goes a long way to restoring health security for Americans, 

but the other half of the mission is providing security and opportunity for America’s working families. Middle class families aren’t 

just taking care of their children these days—and we have provided 

some additional help with child care—but they are also often dealing with aging parents. Eighty percent of the long-term care services in this country are provided by family members; great for older 

Americans to be cared for by their loved ones, but often financially 

and physically exhausting for caregivers. So there is significant 

new support for those family caregivers, including counseling and 

information about how to best care for elders, adult day care centers to help drop parents off for a day, and transportation to get 

seniors to the doctor or the grocery store. Investments help give 

caregivers relief and help them keep their loved ones at home as 

long as possible. 

And finally, the budget extends relief that we provided last year 

for States and communities facing budget cuts across this country, 


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helping States maintain essential supports and services at a time 

when working Americans need them most. 

There is no question that hardworking people of this country 

have been tested over the last few years. As President Obama said 

in his State of the Union, we urge Americans to rise to the challenges posed by our current difficulties and pledge that as a country we will face these challenges together. 

We are closer than ever to passing health reform, and we intend 

to work with you to finish the job for the American people. The 

2011 budget will support an enhanced reform, making long-overdue 

investments in strengthening our health care and public health 

systems, keeping all of us healthy and more secure while targeting 

relief directly to working Americans who need it most. My department clearly can’t accomplish any of these goals alone, it will require all of us working together. 

Thank you, and I look forward to your questions. 

[The prepared statement of Secretary Sebelius follows:] 


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STATEMENT OF 

KA THLEEN SEBELIUS 

SECRETARY 

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 

ON 

THE PRESIDENT'S FISCAL YEAR 2011 BUDGET 

BEFORE THE 

COMMITTEE ON ENERGY AND COMMERCE 

UNITED STATES HOUSE OF REPRESENTATIVES 

FEBRUARY 4, 2010 
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Chainnan Waxman, Chairman Emeritus Dingell, Ranking Member Barton, 

Representative Pallone, Representative Deal and Members of the Committee, thank you 

for the invitation to discuss the President's FY 201 I Budget for the Department of Health 

and Human Services (HHS). 

Last week, in his State of the Union, President Obama laid out an aggressive agenda to 

create jobs, strengthen opportunity for working families, and lay a foundation for longtenn growth. His fiscal year (FY) 201 I budget is the blueprint for putting that vision into 

action. 

At HHS, we are supporting that agenda by working to keep Americans healthy, ensure 

they get the health care they need, and provide children, families, and seniors with the 

essential human services they depend on. 

OUf budget will make sure that the critical health and human services our Department 

offers to the American people are of the highest quality and are directly helping families 

stay healthy, safe, and secure-espccially as we continue to climb out of a recession. 

It promotes projects that will rebuild our economy by investing in next generation 

research and the advanced development of technology that will help us find cures for 

diseases, innovative new treatments, and new ways to keep Americans safe, whether we 

are facing a pandemic or a potential terrorist attack. 

But this budget isn't just about new programs or new priorities or new research. It is also 

about a new way of doing business with the taxpayers' money. Where there is waste and 

fraud, we must root it out. Where there are loopholes, we must close them. And where 

we have opportunities to increase transparency, accountability, and program integrity, we 

must take them. These are top priorities of the President. They are top priorities of mine. 

And our budget will make them top priorities for my department as well. 

The President's FY 201 I Budget for HBS totals $911 billion in outlays, 90 percent of 

which is within the jurisdiction of the Committee on Energy and Commerce. 

Reducillg Hea/th Care Fraud 

When American families are struggling to make every dollar count, we need to be just as 

vigilant about how their money is spent. That's why the Obama Administration is 

cracking down on criminals who steal ITom taxpayers, endanger patients, and jeopardize 

the future of our government health insurance programs. 

Last May, President Obama instructed Attorney General Holder and me to create a new 

Health Care Fraud Prevention and Action Team, whieh we eall HEAT for short. HEAT 

is an unprecedented partnership that brings together high-level leaders from both 

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departments so that we can share information, spot trends, coordinate strategy, and 

develop new fraud prevention tools. 

As part ofthis new partnership, we are developing tools that will allow us to identifY 

criminal activity by analyzing suspicious patterns in claims data. Medicare claims data 

used to be scattered among several databases belonging to different contractors. If we 

wanted to find out how many claims had been made for a certain kind of wheelchair, we 

had to go look in several different places. But now, we are combining all Medicare paid 

claims data into a singlc, searchable database. Which means that for the tirst time ever, 

we'll have a complete picture of what kinds of claims are being filed across the country 

and where they're being filed from. 

Our FY 20 I I Budget includes $1.7 billion in funding to fight fraud, including $561 

million in discretionary funds, to strengthen these Mcdicare and Medicaid program 

integrity activities, with a particular emphasis on fighting health care fraud in the field, 

increasing Medicare and Medicaid audits, and strengthening program oversight while 

reducing costs. 

This investment, will better equip the Federal government to minimize inappropriate 

payments, pinpoint potential weaknesses in program integrity oversight, target emerging 

fraud schemes by provider and type of service, and establish safeguards to correct 

programmatic vulnerabilities. This multi-year discretionary investment will save $9.9 

billion over ten years. 

The Budget also includes a set of new administrative and legislative program integrity 

proposals that will give HHS the necessary tools to fight fraud by enhancing provider 

enrollment scrutiny, increasing claims oversight and improving Medicare's data analysis 

capabilities and will save approximately $ I 4.7 billion over ten years. 

Improving Quality of and Access to Health Care 

At HHS, we continue to find ways to better serve the American public, especiaJly those 

citizens least able to help themselves. We are working to improve the quality of and 

access to health care for all Americans by supporting programs intended to enhance the 

health care workforce and the quality of health carc infonnation and treatments through 

the advancement of health information technology (IT) and the modernization of the 

health care system. 

As Congress continues its work to provide security and stability for Americans with 

health insurance and expand coverage to those Americans who do not havc insurance, 

HHS maintains its efforts towards achieving those goals through activities with the 

Children's Health Insurance Program (CHIP), health IT, patient-centered health research, 

prevcntion and well ness, community health centers, and the health workforce. 

Additional resources distributed to States and Territories after the enactment of the 

Children's Health Insurance Program Reauthorization Act of2009 (CHIPRA) resulted in 

19 States expanding or improving child health coverage in FY 2009. Forty-seven States 

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now cover children in families with incomes at or above 200 percent of the Federal 

poverty guidelines. In September of2009, CMS awarded $40 million in grants to assist 

in enrolling the over 5 million children who are uninsured but eligible for either Medicaid 

orCH!P. 

The Budget includes $3.6 billion to strengthen the ability of the Centers for Medicare & 

Medicaid Services (CMS) to meet current administrative workload demands resulting 

from recent legislative requirements and continued beneficiary growth. The funding 

provides targeted investments to revamp IT systems and optimize staffing levels so that 

CMS can meet the future challenges of Medicare and Medicaid while being an active 

purchaser of high quality and efficient care. 

For example, $110 million will support a comprehensive Health Care Data Improvement 

Initiative to transform CMS's data environment from one focused primarily on claims 

processing to one also focused on state-of-the art data analysis and information sharing. 

These changes are vital to modernizing the Medicare and Medicaid programs by making 

CMS a leader in value-based purchasing, improving systems security, and increasing 

analytic capabilities and data sharing with key stakeholders. 

Everyone agrees that the scheduled Medicare physician payment cuts are not sustainable 

and would likely impact access to care for our Medicare beneficiaries. We look forward 

to working with Congress to reform Medicare's payment policy and give physicians 

incentives to improve quality and efficiency. The Budget assumes a zero perccnt update 

for physician payments. This is not a proposed policy but an honest and transparent 

budget display reflecting the Administration's best estimate of future Congressional 

action based on what Congress has donc in reccnt years for physician payments. 

The Budget includes $995 million for the Health Resources and Services Administration 

(HRSA) for a wide range of programs to strengthen and support our Nation's health care 

workforce. This funding will enhance the capacity of nursing schools, increase access to 

oral health care through dental workforce development grants, target minority and low 

income students, and place an increascd emphasis on ensuring that America's senior 

population gets the care and treatment it needs. 

The Budget includes an increase of$290 million to ensure better access to health centers 

through further expansions of health center services and integration of behavioral health 

into health centers' primary care system. This funding builds on investments made undcr 

thc American Recovery and Reinvestment Act (Recovery Act) of2009 and will enable 

health centers to serve more than 20 million patients in FY 20 11, which is more than 3 

million patients than were served in FY 2008. 

The President is committed to improving health outcomes and reducing health disparities 

for American Indian and Alaska Native communities. The Budget includes nearly 

$5.4 billion in budget authority and collections, an increase of$354 million, enabling the 

Indian Health Service (mS) to focus on reducing health disparities, supporting Tribal 

efforts to deliver high-quality care, ensuring that IHS services can be supplemented by 

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care purchased outside the Indian health system where necessary. and funding health 

facility and medical equipment upgrades. 

The Budget advances the President's health IT initiative by accelerating health IT 

adoption and electronic health records (EHRs) utilization - essential tools for 

modernizing the health care system. The Budgct includes $78 million, an increase of$17 

million, for the Office of the National Coordinator for Health Information Technology 

(ONC) to continue its current efforts as the Federal health IT leader and coordinator. 

During FY 20 II, HHS will also begin providing an estimated $25 billion over 10 years of 

Recovery Act Medicare and Medicaid incentive payments to physicians and hospitals 

who demonstrate meaningful use of certified EHRs, which will improve the reporting of 

clinical quality measures and promote health care quality. efficiency, and patient safety. 

To continue to fulfill the President's commitment to ensuring access to health care for 

millions of Americans. the Budget includes a proposal to extend by an additional 

six months, through June 20 I I, the temporary Federal Medical Assistance Percentage 

(FMAP) increase provided by the Recovery Act. The extension will result in an 

additional $25.5 billion to States and Territories tor maintaining support for children and 

families helped by Medicaid and promoting economic recovery by helping State budgets. 

The Budget supports HHS-wide patient-centered health research, including $286 million 

within the Agency tor I-Iealthcare Research and Quality (AHRQ). HHS also continues to 

invest the $1.1 billion providcd by the Recovery Act to improve health care quality by 

providing patients and physicians with state-of-the-art. evidence-based information to 

enhance medical decision-making. 

Promoting Public Health 

Whether responding to pandemic flu or preventing food-borne illness, I-II-IS will continue 

its unwavering commitment to keeping Americans healthy and safe. 

The President is committed to securing our Nation's food supply by transforming and 

improving our food safety system. The Budget includes $1.4 billion, an increase of 

$327 million. for food safety efforts that will strengthen the ability of the Food and Drug 

Administration (FDA) and the Centers for Disease Control and Prevention (CDC) to 

prioritize prevention, strengthen surveillance and enforcement, and improve response and 

recovery - key priorities of the Food Safety Working Group the President established in 

March 2009. 

In June 2009. the President signed the Family Smoking Prevention and Control Act, 

providing FDA with new authorities and responsibilities for regulating tobacco use and 

establishing the FDA Center for Tobacco Products. The Budget includes $450 million 

from user fees to reduce tobacco use in minors by regulating marketing and distribution 

of tobacco products. promote public health understanding of harmful constituents of 

tobacco products, and reduce the toll oftobacco-relate·d disease, disability, and mortality. 

In addition, $504 million in funding for CDC. the National Institutes of Health (NIH). 

and the Substance Abuse and Mental I-Iealth Services Administration (SAMHSA) will 

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further help reduce smoking among teens and adults and will support research on 

preventing tobacco use, understanding the basic science of the consequences of tobacco 

use, and improving treatments for tobacco-related illnesses. 

The Budget includes over $3 billion, an increase of$70 million, for CDC and HRSA to 

enhance HIV/AIDS prevention, care, and treatment. This increase includes $31 million 

for CDC to integrate surveillance and monitoring systems, address high-risk populations, 

and support HIV lArDS coordination and service integration with other infectious 

diseases. It also includes $40 million for HRSA's Ryan White program to expand access 

to care for underserved populations, provide life-saving drugs, and improve the quality of 

life for people living with HIV/AlDS. 

Reducing the burden of chronic disease, collecting and using health data to inform 

decision-making and research, and building an interdisciplinary public health workforce 

are critical components to successful prevention efforts. The Budget includes $20 million 

for a CDC initiative to reduce the rates of morbidity and disability due to chronic disease 

in up to ten of the largest U.S. cities. These cities will be able to incorporate the lessons 

learned from implementing evidence-based prevention and well ness strategies of the 

Recovery Act's Communitics Putting Prevention to Work Initiative. 

The Budget also includes $10 million at CDC for a new Health Prevention Corps, which 

will recruit, train, and assign a cadre of public health professionals in State and local 

health departments. This program will target disciplines with known shortages, such as 

epidcmiology. environmental health. and laboratory scienec. 

To improve CDC's ability to collect data on the health of the Nation for use by 

policy-makers and Fedcral, State, and local leaders, the Budget provides $162 million for 

Health Statistics, an increase 01'$23 million above FY 2010. This increase will ensure 

data availability on key national health indicators by supporting electronic birth and death 

records in States and enhancing national surveys. 

There is $222 million, an increase of $16 million, included in the Budget to address 

Autism Spectrum Disorders (ASD). NIH research will pursue comprehensive and 

innovative approaches to defining the genetic and environmental factors that contribute to 

ASD, investigate epigenetic changes in the brain, and accelerate clinical trials of novel 

pharmacological and behavioral interventions. CDC will expand autism monitoring and 

surveillancc and support an autism awareness campaign. HRSA will increase resources to 

support children and families affected by ASD through screening programs and 

evidence-based interventions. 

To support teen and unintended pregnancy prevention activities in the Office of Public 

Health and Science and CDC, the Budget provides $205 million in funds. 

To invest in innovative approaches to prevent and treat substance abuse through 

cvidence-based community prevention programs, a warning system to detect emerging 

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drug threats, and the expansion of drug courts capacity, the Budget includes $93 million 

within SAMHSA, 

The Budget includes $352 million, an increase of $16 million, for CDC Global Health 

Programs to build global public health capacity by strcngthening the global public health 

workforce; intcgrating maternal, newborn, and child health programs; and improving 

global access to clean water, sanitation, and hygiene, Additionally, the Budget includes 

$6.4 million in the Office of Global Health Affairs to support global health policy 

leadership and coordination, 

Finally, for FDA's medical product safety initiative to increase inspections and invest in 

tools that will cnhance the safety of increasingly complex drugs, medical devices, and 

biological products, the Budget provides $1.4 billion, an increase of $1 0 1 million above 

the FY 2010 funding level. 

Protecting Americans/rom Public Health Threats and Terrorism 

Continued investments in countermeasure development and pandemic preparedness will 

help ensure HHS's preparedness to protect the American people in natural or man-made 

public health emergencies. 

The Budget includes $476 million, an increase of$ 136 million, for the Biomedical 

Advanced Research and Development Authority to sustain the support of next generation 

countermcasure development in high priority areas by allowing the BioShield Special 

Reserve Fund to support both procurement activities and advanced research and 

development 

Reassortment of avian, swine, and human influenza viruses has led to the emergence of a 

new strain ofHlNl influenza A virus, 2009 HINI flu, that is transmissible among 

humans, On June 24, 2009, Congress appropriated $7.65 billion to HHS for pandemic 

influenza preparedness and response to 2009 HI N I flu, HHS has used these resources to 

support HI N 1 preparedness and response in States and hospitals, to invest in the HI N 1 

vaccine production, and to conduct domestic and international response activities. The 

Budget includes $302 million for ongoing pandemic influenza preparedness activities at 

CDC NIH, FDA, and the Office of the Secretary for international activities. virus 

detection, communications, and research. In addition, the use of balances from the June 

2009 funds, including approximately $330 million in FY 2011, will enable HHS to 

continue advanced development of cell-based and recombinant vaccincs, antivirals, 

respirators, and other activities that will help ensure the Nation's preparedness for future 

pandemics. 

Improving the Wellbeing o/Children, Seniors, and Households 

In addition to supporting efforts to increase our security in ease of an emergency, the 

HHS Budget also seeks to increase economic security for families and open up doors of 

opportunity to those Americans who need it most 

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The Budget provides critical support of the President's Zero to Five Plan to enhance 

quality early care and education for our Nation's children. The Budget lays the 

groundwork for a reauthorization of the Child Care and Development Block Grant and 

entitlement funding for child care, including a total of $6.6 billion for the Child Care and 

Development Fund (discretionary and entitlement child care assistance), an increase of 

$1.6 billion. These resources will enable 1.6 million children to receive child care 

assistance in FY 20 II, approximately 235,000 more than could be served in the absence 

of these additional funds. 

The Administration'S principles for reform of the Child Care and Development Fund 

include establishing a high standard of quality across child carc settings, expanding 

professional development opportunities for the child care workforce, and promoting 

coordination across the spectrum of early childhood education programs. The 

Administration looks forward to working with Congress to begin crafting a 

reauthorization proposal that will make needed reforms to ensure that children receive 

high quality care that mects the diverse needs offamilies and fosters healthy child 

development. 

To enable families to better care for their aging relatives and support seniors trying to 

remain independent in their communities. the Budget provides $102.5 million for a new 

Caregiver Initiative at the Administration on Aging. This funding includes $50 million 

for caregiver services, such as counseling, training, and respite care for the families of 

elderly individuals; $50 million for supportive services, such as transportation, 

homemaker assistance. adult day care, and personal care assistance tor elderly individuals 

and their families; and $2.5 million for respite care for family members of people of all 

ages with special needs. This funding wiII support 755,000 caregivers with 12 million 

hours of respite care and more than 186,000 caregivers with counseling, peer support 

groups, and training. 

The Head Start program, run by the Administration for Children and Families (ACF), 

will serve an estimated 971,000 children, an increase of approximately 66,500 children 

over FY 2008. Early Head Start will serve approximately 116.000 infants and toddlers, 

nearly twice as many as were served in FY 2008. The Budget includes an additional $989 

million for Head Start to sustain and build on these historic increases enabled by 

Recovery Act investments. The increase includes $118 million in funds to improve 

program quality, and the Administration plans to implement key provisions of the 2007 

Head Start Act reauthorization related to grantee recompetition, program performance 

standards, and technical assistance that will improve the quality of services provided to 

Head Start children and families. 

To continue to fulfill the President's commitment to improving the development, safety, 

well-being, and permanency of children and youth in foster care, adoption assistance, and 

guardianship assistance, the Budget includes a proposal to extend by an additional 

six months, through June 20 11, the temporary FMAP increase for foster care and 

adoption assistance provided by the Recovery Act. This extension will result in an 

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additional $237 million to States for maintaining critical services to vulnerable children 

and youth. 

The Budget includes an extension of the Temporary Assistance for Needy Families 

(T ANF) block grant and related programs, including the Contingency Fund and 

Supplemental Grants, through FY 20 II. The Budget also incorporates the Healthy 

Marriage and Responsible Fatherhood grant funding into a new $500 million Fatherhood, 

Marriage, and Families Innovation Fund. The fund will provide competitive grants to 

States to conduct and rigorously evaluate comprehensive responsible fatherhood 

programs and new demonstrations geared towards improving child outcomes by 

improving outcomes for custodial parents with serious barriers to self-suniciency. 

Because the T ANF Emergency Fund helps States to create subsidized jobs for 

unemployed low-income individuals, the Budget also includes an additional $2.5 billion 

for the T ANF Emergency Fund and makes several changes to facilitate State efforts to 

create jobs and provide work supports for needy families. 

The Budget includes a one-year, $669 million extension of the Federal match to States' 

reinvestment of incentive payments into Child SUPPOl1 Enforcement programs. Without 

this critical extension of resources, it is estimated that States would reduce program 

expenditures by 10 percent. The Budget also includes two proposals focused on 

increasing child support collections and a proposal to expand resources for non-custodial 

parents' access to and visitation with their children. 

The Budget proposes a new way to fund the Low Income Home Energy Assistance 

Program (LIHEAP) to help low-income households heat and cool their homes. Our 

request provides $3.3 billion in discretionary funding. The proposed new trigger would 

provide under our current estimates $2 billion in mandatory funding. Energy prices are 

volatile, making it difficult to match funding to the needs of low-income families. so 

under this proposal, mandatory funds will be automatically released in response to 

quarterly spikes in energy prices or annual changes in the number of people living in 

poverty. The $2 billion estimate is based on current projections of Supplemental Nutrition 

Assistance Program usage and energy prices. 

Investing in Scientific Research and Development 

The investments that HHS is proposing in our human services budget will expand 

economic opportunity but another critical way to grow and transform our economy is 

through a healthy investment in research that will not only save lives but also create jobs. 

The Budget includes a program level of $32.2 billion for NIH, an increase of $1 billion, 

to support innovative projects from basic to clinical research. This effort will be guided 

by NIH's five areas of exceptional research opportunities: supporting genomics and other 

high-throughput technologies; translating basic science into new and better treatments; 

reinvigorating the biomedical research community; using science to enable health care 

reform; and focusing on global health. The Administration interest for the high-priority 

areas of cancer and autism fits well into these five NIH theme areas. In FY 20 II. NIH 

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estimates it will support a total of37.001 research project grants. including 9.052 new 

and competing awards. 

The additional $1 billion will enable NIH to capitalize upon recent successful 

investments in biomedical research, such as the I·!uman Genome Project. that have 

provided a powerful foundation for a deeper level of understanding human biology and 

have opened another window into the causes of disease. New partnerships between 

academia and industry are working to revitalize the drug development pipeline. An era of 

personalized medicine is emerging where prevention. diagnosis. and treatment of disease 

can be tailored to an individual rather than using the one-size-fits-all approach that all too 

often falls short. wasting health care resources and potentially subjecting patients to 

unnecessary and dangerous medical treatments and diagnostic procedures. 

To advance regulatory science at FDA, the Budget provides $25 million. This initiative 

builds on the President's commitment to harness the power of science for America's 

benefit and includes $15 million for nanotechnology related research. which holds great 

promise for advances in medical products and cosmetics. The additional resources will 

also enable FDA to update review standards and provide regulatory pathways for new 

technologies. such as biosimilars. 

Recovery Act 

Since the Recovery Act was passed in February 2009, HHS has made great strides in 

improving access to health and social services, stimulating job creation, and investing in 

the future of health care reform through advances in health IT, prevention, and scientific 

research. HHS Recovery Act funds have had an immediate impact on the lives of 

individuals and communities across the country affected by the economic crisis and the 

loss of jobs. 

As of September 30.2009. the $31.5 billion in Federal Payments to States helped 

maintain State Medicaid services to a growing number of beneficiaries and provided 

fiscal relief to States. The National Institutes of Health awarded $5 billion for biomedical 

research in over 12,000 grants. Area agencies on aging provided more than 350,000 

seniors with over 6 million meals delivered at home and in community settings. Health 

Centers provided primary health care services to over one million new patients. 

These programs and activities will continue in FY 20 I 0, as more come on line. For 

example, 64.000 additional children and their families will participate in a Head Start or 

Early Head Start experience. Approximately 30.000 American Indian and Alaska 

Natives' homes will have safe drinking water and adequate waste disposal facilities. HHS 

will be assisting States and communities to develop capacity, technical assistance and a 

trained workforce to support the rapid adoption of health IT by hospitals and clinicians. 

The CDC will support community efforts to reduce the incidence of obesity and tobacco 

use. New research grants will be awarded to improve health outcomes by developing and 

disseminating evidence-based information to patients, clinicians, and other decisionmakers about what interventions are most effective for patients under specific 

circumstances. 

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The Recovery Act provides HHS programs an estimated $141 billion for 

Fiscal Years 2009 2019. While most provisions in HHS programs involve rapid 

investments, the Recovery Act also includes longer term investmentsin health IT 

(primarily through Medicare and Medicaid). As a result. HHS plans to have outlays 

totaling $87 billion through FY 2010. 

Conclusion 

This testimony reflects just some of the ways that HHS programs improve the everyday 

lives of Americans. Under this budget, we will provide greater security for working 

families as we continue to recover from the worst recession in 70 years. 

We will invest in research on breakthrough solutions for health care that will save money, 

improve the quality of care, and energize our economy. And we will push forward our 

goal of making government more open and accountable. 

My department cannot accomplish any of these goals alone. It will require all of us to 

work together. And I look forward to working with you to advance the health, safety, 

and well-being ofthc American people. Thank you for this opportunity to speak with 

you today. I look forward to answering your questions. 

11 
35 

Mr. WAXMAN. Thank you very much, Madam Secretary. That 

was an excellent review of the budget. 

I want to start off the questions. First of all, I want to say how 

pleased I am with the President’s continued commitment to health 

care reform. It is a goal that we share. I know that you have done 

a lot of thinking about how to make sure that we are ready for reform and that your budget reflects critical building blocks in that 

effort. Members of this committee have been particularly concerned 

to make reform work, and we need to ensure access through more 

health centers and training of health professionals, and to take advantage of new health information technologies, and to recommit to 

prevention and public health. 

I want to ask you some specific questions, however, about Medicare. There are two critical priority areas I see in this particular 

area. First, we need to improve Medicare coverage of prescription 

drug costs by filling in the donut hole in the drug benefit. Seniors 

should not have to go without needed medicines due to lack of coverage. And second, beneficiaries must be able to get the care they 

need from their physicians, and that requires fair and predictable 

payment. So we must permanently reform the broken physician 

payment system in Medicare. 

Could you elaborate on the administration’s policies in these two 

areas? 

Secretary SEBELIUS. Certainly, Mr. Chairman. 

I think that the donut hole, the reduction of the excess costs that 

too many seniors have to pay when they reach their limits in the 

prescription drug program are parts of both the House and Senate 

plans on health reform. They are not repeated in this budget; we 

are assuming that we will move ahead on health reform and have 

those as part of the critical future. But as you know, it is one of 

the most serious issues for seniors across this country, and way too 

many people hit that gap and don’t have the wherewithal to pay 

100 percent out of pocket for the drugs that keep them out of the 

hospital and keep them well. 

The most serious challenge facing Medicare beneficiaries right 

now is the 21 percent scheduled budget cut to their doctors. I talk 

to doctors every day, I talk to seniors every day, and they tell me 

that that isn’t possible that we would have a system guaranteeing 

health care for seniors and cutting those payments. Our budget assumes that over the next 10 years, we will not cut those payments 

21 percent. We look forward to working with you, Mr. Chairman, 

to find a specific policy—as you know, both the House and the Senate have addressed this plan in the past. 

We look forward to both the House and Senate addressing it, but 

it is a problem looming, facing the 43 million Americans who depend on Medicare benefits. If that kind of cut were to occur, we 

would not have providers to deliver those essential services. 

Mr. WAXMAN. Well, I am pleased that you are committed, as we 

are, to deal with both of those issues, and we have to find a way 

to do it. 

I want to ask you a question about Medicaid. When unemployment goes up, families lose their incomes and their health insurance, so the need for Medicaid increases. At the same time, State 

revenues necessary to pay for Medicaid decline. To help States 


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maintain their Medicaid programs during the recession, the Recovery Act we enacted last year included a temporary increase in the 

Federal Medicaid Matching Payments, or FMAP. Each State received at least a 6.2 percent increase, and States with very high 

unemployment received more. This temporary FMAP increase will 

expire at the end of December. Unfortunately, many States are still 

expecting high unemployment and sharp declines in revenues well 

into 2011. The President’s budget recognizes this problem and requests an extension of the FMAP increase through June 2011. The 

House has twice passed such a 6-month extension, once in the 

health reform bill and once in the jobs bill. 

My question for you, Madam Secretary, is, what happens next 

January if we fail to extend this FMAP increase? What are the implications for State budgets, for health care providers, for health 

care workers, for Medicaid beneficiaries? 

Secretary SEBELIUS. Well, Mr. Chairman, as you know, I came 

to this Cabinet position directly from a governorship in the State 

of Kansas, where I served until the very end of April last year. So 

I was a governor cutting the very budgets you talk about. And I 

can tell you from my personal experience how the stimulus package, the Recovery Act funds, not only helped us to make sure that 

we did not have to slash essential benefits at a time when additional Kansans needed those benefits, but, in fact, saved jobs. 

State budgets are largely education funding and health care 

funding. Those are often somewhere between 75 and 90 percent of 

the budget. If we did not have those additional resources to help 

keep health services, in fact, we would have laid off teachers, we 

would have laid off correctional officers, highway patrol, jobs all 

over because there is no place else to get that money. 

So not only is it an essential service, but I think it is directly related to thousands of jobs in my State and hundreds of thousands, 

perhaps millions of jobs around the country. 

Every governor in this country—and I talk to my former colleagues on a regular basis—describe this as one of their top priorities, the continuation of the FMAP assistance through June of 

next year, which is the State fiscal year. This will get most States 

through their next fiscal year. I think it is absolutely an essential 

part of our recovery moving forward. Absent that, the modest 

progress now being made in States that they hope will be more significant progress over the next several months, focusing on jobs, on 

new development, on innovation will take a major step back. 

Mr. WAXMAN. Thank you very much. 

Mr. Barton. 

Mr. BARTON. Thank you, Mr. Chairman. Thank you, Madam Secretary, for being here. 

Before I ask questions, let me just compliment you on one part 

of our budget, or the President’s budget. The budget for the community health centers was increased by $290 million. That is something that I think most Republicans support; I know I do. The community health centers in my district do excellent work and they do 

it very efficiently. So I want to be positive about that, and I am 

sure that you are very supportive of that, too. 

Back in September, myself and Congressman Walden, the ranking member of the Oversight Subcommittee, sent you a letter about 


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the use of title 42 funding. Title 42 gives the Health and Human 

Services Department the ability to pay certain of its employees 

above the general schedule to attract the very top talented NIH in 

certain research situations. This title 42 authority is explicitly limited to Health and Human Services. In the last 10 years, over 3,000 

employees have been given this designation by HHS, some of them 

make well over $300,000 a year. That, in and of itself, is not necessarily a bad thing. I think it is something we need to look at in 

the terms of tight budget authority. 

But my question today and the question in the letter, the Environmental Protection Agency is now using title 42 authority. And 

my question to you first is, is the EPA now part of Health and 

Human Services? 

Secretary SEBELIUS. Not to my knowledge. 

Mr. BARTON. Is the Surgeon General an employee or a part of 

Health and Human Services? 

Secretary SEBELIUS. Yes, sir. The Surgeon General has always— 

I don’t know always, but certainly is a part of our Department 

under the Office of Public Health and Science. 

Mr. BARTON. Could you construe the administrator at EPA to be 

the Surgeon General? 

Secretary SEBELIUS. No, sir. We have a Surgeon General, Regina 

Benjamin is the Surgeon General of the United States. 

Mr. BARTON. OK. Then why in the world do you allow the Environmental Protection Agency to use title 42 authority—which is explicit to your Department—to create a program at EPA to put their 

employees in the special designation by the hundreds of people? 

Are you aware that that is happening? 

Secretary SEBELIUS. Sir, I am aware of your letter, and I have 

had some discussions with the staff. We are trying to get the most 

complete answer we can. But as far as I know, there has been no 

explicit or implicit designation of authority to the Environmental 

Protection Agency. 

Mr. BARTON. Well, you just gave more information in the last 30 

seconds than we have gotten in the last six months. 

Secretary SEBELIUS. Well, as I say, series of events, I was not 

here. I don’t know when this practice started. We are working on 

your letter. We want to get you a thorough and complete answer. 

I am telling you what I know at this point, but we will fully answer 

your letter and I intend to. 

Mr. BARTON. Well, I have another copy of the letter; I am more 

than willing to give it to you again. 

We have a situation where the Environmental Protection Agency 

appears to be completely without authority to set up a program. 

They even have a manual, apparently, at the EPA on how to convert their employees to title 42 employees. Now, you just said, 

rightfully so—and I commend you for being honest—that the Environmental Protection Agency is not a part of HHS, and the EPA 

administrator can in no way be construed to be the Surgeon General. 

So you understand the law. My request is that you now enforce 

the law with the EPA and answer the letter—which we sent copies 

to Mr. Waxman and Mr. Stupak, Mr. Walden and I—so we can 

stop this practice. I mean, do you agree with me that the EPA 


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should not be setting up a title 42 program since title 42 is explicitly designed to give some additional financial encouragement and 

compensation to our highest scientists and researchers at NIH and 

FDA? 

Secretary SEBELIUS. Mr. Barton, what I can assure you is that 

I will thoroughly investigate this and I will get you a complete answer to your letter as promptly as we possibly can. 

Mr. WAXMAN. The gentleman’s time has expired. 

Mr. Pallone. 

Mr. PALLONE. Thank you, Mr. Chairman. 

Madam Secretary, I mentioned in my opening statement, I think 

I mentioned both the FMAP increase and the COBRA subsidy have 

been critical in helping Americans who have been hard hit by the 

recession. Chairman Waxman already asked you about extending 

the FMAP increase, which I support, but I wanted to also ask you 

about extending the COBRA subsidy. And essentially what would 

be the impact if we didn’t make this COBRA subsidy expansion, 

not looking for numbers, but just generally why that is important 

and what would happen if we didn’t do it? 

Secretary SEBELIUS. Well, Congressman Pallone, I think that, as 

you well know, COBRA is an effective tool, but often not financially 

viable for way too many folks, particularly folks who have lost their 

jobs in a downturn. The opportunity to purchase 100 percent of 

their previous coverage is a nice offer, but often out of reach. So 

what this bridge program allows is, with some additional help from 

the Federal Government, workers who are laid off and their families can continue to have essential health services. Again, absent 

health reform, which could create an alternate, more viable, more 

affordable market, this is an essential way to make sure that hardworking families who have lost their job through no fault of their 

own continue to have health services. 

Mr. PALLONE. Well, let me say I do hear from a lot of these people because, as you know, before they made the current extension 

there were a lot of people that were in danger, or actually already 

had—I think there was a week or so there when some actually had 

lost their subsidy, and many of them did call my office and said 

they wouldn’t be able to continue their coverage. Do we have any 

idea the numbers that might not be able to make that 100 percent 

without the subsidy? Do we have any idea? Maybe can you get back 

to me on that. 

Secretary SEBELIUS. I would be glad to. I think it is likely, 

though, a laid off worker is almost guaranteed not to be able, unless they have a huge nest egg, to be able to pay out of pocket for 

100 percent of the previously covered employer costs. 

Mr. PALLONE. So you think it is actually—maybe not 100 percent, but very close to it. 

Secretary SEBELIUS. That was certainly, again, not only my personal experience talking to me, but what I saw across the country. 

They are scrambling to pay rent, buy food, and unfortunately 

health insurance is often something that has to go by the boards. 

As desperately as they would like to continue it, it just isn’t a viable option. 

Mr. PALLONE. Thank you. 


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Let me ask you about SCHIP also. Today literally marks the 1 

year anniversary since the President signed into law the CHIPRA 

program, which is a variation on SCHIP that we passed in the last 

year or so. I am particularly proud of that legislation because we 

worked in a bipartisan fashion to increase access for, I think, about 

11 million children. 

Can you tell me how implementation of CHIPRA has gone over 

the past year; how has insurance coverage and the quality of the 

coverage improved for kids; and how have you been working with 

the States to increase coverage and improve retention rates? 

Secretary SEBELIUS. Well, what I am pleased to report, Congressman Pallone, is that, in spite of the downturn in the budget of most 

States across the country, State leaders are seeing ensuring our 

children a fundamental piece of making sure we have a healthy, 

prosperous future. So States are actually increasing coverage for 

children. Many States have actually increased the threshold of the 

poverty level for whom the CHIP program applies. 

Congress, I think wisely, provided some outreach funds. So we 

have put those funds in the hands of State leaders and State partners to actually try and enroll kids. It is one thing to have them 

eligible, it is another thing to find and enroll children. Those partnerships are very creative and underway with faith-based communities and medical outreach centers with community health centers. I just did an event today with Secretary Vilsack looking at the 

opportunity to try and make sure that enrollment is as easy as possible, and as a family is signing up for the supplemental nutrition 

program, they also can sign up their children for health insurance. 

And what we know is that about 2.5 million additional children in 

the year since CHIPRA has been extended have been signed up 

and enrolled, again, in spite of very difficult budget times, and I 

think that is good news. 

Mr. PALLONE. That is very good news. And I thank you for all 

your efforts. And those outreach programs I think are particularly 

important. 

Thank you. 

Mr. WAXMAN. The gentleman’s time has expired. 

Mr. Blunt. 

Mr. BLUNT. Thank you, Mr. Chairman. 

Madam Secretary, thanks for being here today. I would have said 

that earlier, but I was in a rush to get my 1 minute in about a couple of things I am concerned about. 

Something you mentioned earlier about the donut hole in Medicare part D, you said too many seniors have to pay because they 

get into this donut hole. Do all seniors pay that get into this donut 

hole or are poorer seniors at some level exempted from the donut 

hole? 

Secretary SEBELIUS. Well, you don’t actually hit the donut hole 

unless you extend beyond the limits that the initial provision of 

part D pays for. 

Mr. BLUNT. I know that. So the seniors that get above that limit, 

do poorer seniors have to pay if they get into the donut hole, the 

poorest seniors? 

Secretary SEBELIUS. I want to make sure I am giving you accurate information. They do not, sir. 


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Mr. BLUNT. They do not. And I think that number is, what is it, 

135 percent of poverty; or is it a different number than that? 

Secretary SEBELIUS. 150 percent of poverty. 

Mr. BLUNT. So poor seniors don’t pay. Under your proposal, 

would all seniors be exempted in this donut hole from having any 

expense? 

Secretary SEBELIUS. Sir, we did not have in the budget closing 

of the donut hole. What I was referring to with the chairman is the 

provisions that are in both, and they are different in both versions 

of the Senate and House health reform legislation. Both majorities 

sought to close the donut hole, but our budget—— 

Mr. BLUNT. Well, since you talked about, can we talk about it for 

a minute? Closing the gap, among other things, suddenly there is 

no disincentive, it would seem to me, for all seniors, including the 

richest seniors, not to use generic drugs, not to look for an alternative product if there is no reason not to get into this high level 

of spending. What I have wondered about is if 150 percent of poverty isn’t a good enough number to help seniors who can’t afford 

it, what is the best number? This idea that all seniors, no matter 

how wealthy, deserve for the Federal Government, through part D, 

to help them pay for their drugs doesn’t seem to really benefit the 

system or be the kind of reforms we need in Medicare generally. 

And I am just troubled by this idea that somehow all seniors are 

disadvantaged by this, and no matter how much money they have, 

they shouldn’t have to worry about this donut hole. 

Secretary SEBELIUS. Well, Senator—I mean Congressman, running for Senator Congressman. We would be happy to work with 

you if you would like to talk about a cap or a limit for applicability 

to close the donut hole. At this point I think there is no differential 

if you are a wealthy senior or a poor senior. 

Mr. BLUNT. Well, of course there is a differential. You just said 

there was, 150 percent of poverty. 

Secretary SEBELIUS. No, I am saying at the original benefits of 

the program there isn’t a differential. I think if you are ill, if you 

are wealthy or poor you are likely, much more likely to hit the cap 

than if you are in great shape. It has I think more to do with someone’s health and well-being than economic status. 

Mr. BLUNT. I actually thought it had to do with the capacity to 

pay. The chairman said seniors should not have to go without their 

medicine due to lack of money. Now I don’t disagree with that at 

all. I do disagree with the idea that somehow a problem that can’t 

be solved any way other than eliminating this one area where you 

have to think about whether you get above a spending cap or not. 

Mr. WAXMAN. Would the gentleman yield? 

Mr. BLUNT. I don’t have much time, Mr. Chairman. I don’t think 

I probably can. 

On the question of high risk pools, I don’t know, Governor, if 

Kansas had one or not, Missouri says—and we have both used 

them and are both familiar with them. Do you have any idea why 

there is no money in this budget for high risk pools? 

Secretary SEBELIUS. Well, Congressman, at least in Kansas, and 

I think it is true across the country, the Federal Government really 

provides very little in the way of support for—— 

Mr. BLUNT. On this budget they provide nothing. 


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Secretary SEBELIUS. I understand. It is about 2 percent. And 

what was anticipated with the passage of health reform that we 

would actually have a whole different situation with high risk 

pools. Many of the people in Kansas in high risk pools are those 

who are blocked out of the insurance market, because insurance 

companies refused to take them with preexisting conditions. Health 

reform solves that piece of the puzzle, they would have affordable 

coverage. So there was money in health reform for a new basis of 

high risk pools that could create some stop loss policies for those 

and a stop gap method between now and the time the exchanges 

are set up, but we anticipated that actually the high risk pool as 

they are seen right now, which is a very modest safety net, often 

way to expensive for most people to afford, would cease to exist. 

That is why the budget—— 

Mr. BLUNT. I think the percentage of the premium in Missouri 

is about 135 percent of what the normal premium would be. I 

would certainly be glad to work with you on, assuming where we 

are today on this issue, that we can figure out ways to expand access to the high risk pools. 

Mr. Chairman, I am over my time. 

Mr. WAXMAN. The gentleman’s time has expired. Mr. Dingell. 

Mr. DINGELL. Chairman, thank you. Again Madam Secretary, 

welcome. Madam Secretary, there have been a lot of scandals and 

unfortunate news about food safety and foods. You will recall last 

year this committee reported unanimously with the support of both 

sides. My Republican colleague Mr. Barton was one of the cosponsors as was our chairman and Mr. Pallone and other members of 

this committee. That was a bill which passed the House with an 

overwhelming vote and it is now sitting in—I hope in a position 

where maybe we could get it up to the floor so it could get to conference and we can pass it to law. 

Do you have the authority you need now to protect the American 

people, yes or no, from unsafe food products both in this country 

and coming in from abroad? 

Secretary SEBELIUS. No, sir. 

Mr. DINGELL. Madam Secretary, I am very pleased at the commitment to medical product safety in the bill and also to food. Do 

you believe that Food and Drug authorities have the authorities 

they need to carry their regulation in the 21st century? 

Secretary SEBELIUS. Not at this time. 

Mr. DINGELL. Now in the bill that was introduced by my colleagues, I, Mr. Stupak and the others, it had a number of things, 

annual registration fees, increased inspections, strong new enforcement tools, greater responsibility for manufacturers to identify the 

control risks, tougher scrutiny of ingredient and raw materials supplies, documentation of safety for imported food products, and of 

course the ability to see to it that good manufacturing practices are 

followed around the world. Do you need that authority? 

Secretary SEBELIUS. Yes, sir. 

Mr. DINGELL. Madam Secretary, I note that that has some $220 

million in food registration and inspection user fees, that those are 

in the President’s budget. Are they necessary for the Food and 

Drug Administration to carry out its proper responsibilities? 

Secretary SEBELIUS. Yes, sir, I think they are. 


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Mr. DINGELL. Madam Secretary, we now confront a serious problem about health care data improvement. The President has included 110 million for comprehensive health care data improvement initiative at CMS. The initiative appears to be a key part of 

the Medicare and Medicaid delivery system reform puzzle. It appears that the administration is on to something here. 

I have wrestled with a number of department agencies over the 

past of their adequacy and of their systems to upgrade these matters. They have had good motivation and noble intentions, but the 

implementation was also lacking, causing substantial waste and 

confusion. 

Madam Secretary, regarding the 110 million, is this to be a onetime investment? 

Secretary SEBELIUS. No, sir, this is I think a multiyear strategy 

to actually build a 21st century—— 

Mr. DINGELL. Should we anticipate, Madam Secretary, that you 

will be coming back up here to continue to move toward adequate 

resources to sustain this project over the years? 

Secretary SEBELIUS. Yes, we will. 

Mr. DINGELL. Madam Secretary, one matter of concern, will you 

provide the necessary and proper oversight of contractors and HHS 

employees responsible for seeing this project through? 

Secretary SEBELIUS. Yes. And we finally have an information officer who also is helping us oversee this project who is not directly 

connected with CMS. 

Mr. DINGELL. Madam Secretary, is your plan to consult appropriate stakeholders to ensure that all potential issues are properly 

identified and addressed? 

Secretary SEBELIUS. Yes, sir. 

Mr. DINGELL. And I am sure, Madam Secretary, that you will do 

the things that are necessary to ensure a smooth and effective 

transition. 

Secretary SEBELIUS. It is my plan to do just that. 

Mr. DINGELL. Madam Secretary, last year the President signed 

a monumental tobacco bill into law. I am pleased to see the administration’s commitment to the FDA tobacco program in this year’s 

budget. However, I have been concerned about the recent court activity surrounding FDA’s actions related to tobacco products. 

Can you give us a very brief update here and then further information and a submission for the record on the progress of the tobacco program and comment on the administration’s thoughts on 

some recent unfortunate court decisions? 

Secretary SEBELIUS. Well, Congressman Dingell, we are taking 

the responsibility to regulate tobacco products very seriously and I 

would say approaching them—— 

Mr. DINGELL. I am satisfied you are, but I note that the courts 

have just recently said you couldn’t regulate electronic cigarettes. 

Secretary SEBELIUS. Right. 

Mr. DINGELL. I note that electronic cigarettes were set forth as 

a device, which is a device which would inject narcotics or drugs 

into the human system. I note that the court has held that they 

are not. I find this most curious. I note you have appealed this 

matter, and I ask do you need additional authorities to address 

that problem? 


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Secretary SEBELIUS. Well, once we hear back from the court we 

may well be back in Congress with some request for additional authorities, but we have a new center, we have a new director, we 

are publishing regulations. We have taken on the flavored cigarettes, we are looking at the avenues that were outlined by Congress. And when we hit a logjam we may well return to you for legislative clarification. 

Mr. PALLONE [presiding]. Mr. Chairman, Chairman Dingell, I 

know your time is over and it is also that we have a vote. 

Mr. DINGELL. My time is up. I am going to yield. Go ahead. 

Mr. PALLONE. Thank you. We have two votes coming up and 

those are the last votes of the day. But I am going to try to get 

in two more people. So I just want everyone to know we are going 

to go to Mr. Deal if he is ready. 

Mr. DEAL. Yes. 

Mr. PALLONE. And then we will go to Mr. Engel and then we will 

break for the votes and come back. 

Mr. DEAL. Thank you, Mr. Chairman. Mr. Chairman, I would ask 

unanimous consent to include in the record the letter of September 

14th, 2009, which was the letter that Mr. Barton referred to that 

was addressed to the Secretary. 

Mr. WAXMAN [presiding]. Without objection, that will be the 

order. 

[The information appears at the conclusion of the hearing.] 

Mr. DEAL. Madam Secretary, welcome. 

Secretary SEBELIUS. Thank you. 

Mr. DEAL. I am going to refer to a letter also. This is one that 

was sent to the Acting Administrator at CMS by Mr. Barton, myself, and Mr. Walden on June the 17th. It is a letter that asked 

for information as to the potential impact on State Medicaid programs with the proposed expansion of Medicaid under the House 

version of health care reform. And I would ask if you would—we 

have not received a response to this June letter and I would ask 

if you would please try to get us an answer to that. 

Secretary SEBELIUS. I will do that, sir. We are collecting that 

data. It is not data that we hold and the States hold, and we are 

working on collecting that right now. 

Mr. DEAL. Thank you. 

In that regard the best I can determine and the best information 

that we can get from CBO is that the House version would add 

about 15 million Americans to the Medicaid rolls and would 

produce about $34 billion in unfunded mandates on the States between the years 2015 and 2019. 

Now you mentioned earlier you had been talking to Governors 

about other issues. I wondered if you have talked to any Governors 

who support this mandatory expansion of their State Medicaid programs and, if so, would you be courageous enough to tell us who 

they might be? 

Secretary SEBELIUS. Sir, I have had lots of conversations with 

Governors. Clearly they would like as much help as possible on 

critical health needs, not only expended FMAP but if the Federal 

Government were to pay for 100 percent of Medicaid coverage on 

into the future they would be very grateful. They are appreciative 

of the notion that there are changes in the drug reimbursement 


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rules also anticipated. There are changes in the way that States 

would be treated in terms of qualifying for various services. 

So we have tried on a case-by-case basis to give States regular 

kind of updates on what impact the various versions of various 

measures were and we will continue to do that. 

Certainly the President’s inclusion of the FMAP extension in his 

budget is an indication, I think, that he takes very seriously the 

States’ situation with regard to FMAP. We are also working with 

a lot of Governors on the dual eligible situation, which is currently 

one of the more expensive populations that any Governor deals 

with and looking at ways through our current CMS authority that 

we can give more flexibility to States, more innovative abilities to 

coordinate and manage care and hopefully return some of those 

savings to States. 

Mr. DEAL. As you may know, one of the provisions of the House 

bill, which is section 1703, with regard to expanded Medicaid and 

the enhanced FMAP, is the requirement that States enter into a 

maintenance of effort requirement. And our understanding is that 

that would prevent States from implementing any new procedures 

to reduce the prevalence of fraud in their Medicaid program, for example, because the language is that if it is more restrictive than 

the procedures in effect on June the 16th, 2009, and it may very 

well be that States would want to enhance their antifraud provisions and make it more restrictive than what was in effect last 

summer. 

I wonder if as Governor of Kansas you would have taken very 

kindly to us telling the States that they would be prohibited from 

incorporating any new antifraud provisions into their State Medicaid program. And is that your interpretation of that section? 

Secretary SEBELIUS. It certainly is not. I think that there is no 

question this administration and I think the Congress takes fraud 

and abuse very seriously. We have actually enhanced and have in 

not only the budget but in health reform a number of enhancements for fraud and abuse efforts. I think that the maintenance of 

effort language that you refer to has been in place since the Recovery Act was passed. It was defined to legislators—I mean to Governors. I was certainly as I say a Governor at the time. No one ever 

suggested that maintenance of effort meant that you could not enhance antifraud efforts in the State. And in fact we had very aggressive antifraud efforts in Kansas and have for years. 

Mr. DEAL. Does the maintenance of effort requirement that was 

part of the stimulus money, does that requirement expire upon the 

expiration of the stimulus funds received by the States? 

Secretary SEBELIUS. Yes, it does. 

Mr. DEAL. Thank you, Mr. Chairman. 

Mr. WAXMAN. The gentleman’s time has expired. Mr. Engel. 

Mr. ENGEL. Thank you, Mr. Chairman. Madam Secretary, welcome. I have three issues which I am going to raise quickly and I 

would like your comments on them. I chair the Western Hemisphere Subcommittee in the Foreign Affairs Committee, and I have 

been really grateful for all the wonderful support the Obama administration has given in the immediate and ongoing aftermath of 

the earthquake in Haiti, but as you know the hard work continues. 

We expect a great number of Haitians to join their relatives in New 


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York and in other areas of the country. We welcome these children 

and families, but we need to ensure the States and localities have 

enough resources to give them and our existing students the support and education they require. And as you know, our States and 

localities are already cash strapped during this difficult economic 

time. 

Within the HHS Office of Refugee Resettlement, the Refugee 

School Impact Grant Program has stayed flat funded at $15 million 

for the past 5 years, even in this year’s budget which came out 

after the earthquake. 

In a letter that Senator Gillibrand and I sent you yesterday, we 

asked if the administration would support either a one-time emergency grant program for school districts that receive a high influx 

of Haitians or alternatively if you would increase the funding for 

the Refugee School Impact Program. While the broader social services and refugee program which funds the school impact program 

was granted an extra 25 million in the fiscal year 2011 budget, 

your staff said the school impact program would be unlikely to see 

a bump in funding. I find that troubling. So I would like to ask 

you, would you commit to working with me on this important issue 

to give our schools and communities the support they need if there 

is an influx, and we know there will be, of Haitian children putting 

strains on school districts. 

Secretary SEBELIUS. Congressman, we would be glad to work 

with you on all the ramifications of the Haitian situation, which as 

you know we are just beginning to try and sort out. But yes, I 

would be very happy to continue that dialogue. 

Mr. ENGEL. Thank you very much. 

Madam Secretary, the New York delegation last week or the 

week before met with you, and I thank you for meeting with us, 

and we had a very good discussion about 9/11 health issues. As you 

know when we had discussed it, all Americans 9 years after September 11th, first responders who came and were selflessly trying 

to save and help others now find themselves because of the toxicity 

of the air sick. We estimate there are about 20,000 people who are 

sick, coming from 431 of the 435 districts across the country. And 

some have died unfortunately, others are disabled. 

We were hit, New York was hit, not because we were New York, 

but because we were a symbol of this country, and it is an ongoing 

fight in the war against terror. We had had a discussion about 

whether the administration would commit to funding in the bill the 

health that we need—the health care that we need for this bill. I 

know we are talking about it. 

So I am going to ask you if you would commit to working with 

us to pass comprehensive 9/11 health care that is paid for. 

Secretary SEBELIUS. I would very much like to work with you on 

that issue. As you know, the President’s budget doubles the 

amount of funding in the project for 2011 and we look forward to 

working with you and others in the delegation on a long-term permanent solution. 

Mr. ENGEL. Thank you. My final question, in last Congress the 

ALS Registry Act, Lou Gehrig’s disease, a bill that I authored with 

my friend Lee Terry on the other side of the aisle was signed into 


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law. It came through this committee, it had great bipartisan support and over in the Senate as well. 

I was disappointed though to see that the administration cut the ALS registry’s funding by over $200,000 in fiscal year 2011 from 

what Congress appropriated last year. And Congress did not appropriate the full money. The act was authorized for over $10 million 

per year and it is funded at just under 5.8 million. So to take 

200,000 away from the underfunding of 5.8 million is something 

that is very disappointing. 

So I will ask you again, will you continue to work me and with 

Congress to ensure that the CDC has the resources it needs to fully 

implement the ALS registry? 

Secretary SEBELIUS. We are aggressively, Congressman, moving 

toward the implementation of the full registry which we anticipate 

having online at 2011. The full funding that you refer to, the $10 

million, is not essential during the planning phases, and the cut 

that you are referring to is really out of travel and some contracting cuts that the leadership of the CDC felt could be made 

without at all jeopardizing the implementation timetable or the full 

implementation of the registry. So we would look forward to working with you on that. 

Mr. ENGEL. Thank you. And Mr. Chairman, may I just ask unanimous consent that my letter to Secretary Sebelius on the funding 

for the HHS Refugee Resettlement Office be included in the record. 

Mr. WAXMAN. Without objection, that will be the order. 

[The information appears at the conclusion of the hearing.] 

Mr. WAXMAN. Madam Secretary, we are going to take a recess. 

We have two votes, and as soon as we have completed the two 

votes we will come back and reconvene. 

Thank you. 

[Recess.] 

Mr. WAXMAN. The committee will come back to order. Who seeks 

recognition? The gentleman is recognized. 

Mr. WHITFIELD. Mr. Chairman, thank you. And Madam Secretary, we appreciate you taking time to be with us this afternoon. 

Last weekend President Obama came over to Baltimore to meet 

with our caucus and I am sure you read some about that. One of 

his comments that he made, we were talking about the right to 

keep your current insurance policy if this health care reform bill 

passes. And he said, I think some of the provisions that were put 

into this bill have violated my pledge to allow people to keep their 

insurance if they want to keep it. And when I look at section 202 

of the House bill, which is about 3 or 4 pages in that section relating to protecting the choice to keep current coverage, there are all 

sorts of exceptions in here. And one of the frustrating things that 

I personally have is we keep hearing this you can keep your coverage, you can keep your coverage, you can keep your coverage. 

And even the President said there were provisions put in at the 

last bit that cannot guarantee that. 

Now is that your understanding, that there is no guarantee that 

a person can keep their current insurance coverage if this bill 

passes? 

Secretary SEBELIUS. Well, Congressman, I can’t speak for exactly 

what the President was talking about. I do know that in today’s 


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market nothing ensures an employee that his or her employer is 

going to continue employer based coverage. Nothing ensures that 

if you have employer based coverage that that employer will use 

the same network or the same doctors. That changes every day 

with contracts. So I don’t know if that is what he is—I really don’t 

know. But clearly there is not a way to guarantee. I think that the 

attempt has been to say we are not mandating anybody have to 

move—— 

Mr. WHITFIELD. I really appreciate your saying that because, to 

use his exact words, he said some of the provisions that were snuck 

in have violated that pledge. And when we hear people emphatically saying you have the right to keep your existing insurance policy, that is really not true. And so I am delighted that you clarified 

that—— 

Secretary SEBELIUS. In the current market, I am saying absent 

any health reform legislation, no one is sort of guaranteed that. 

Mr. WHITFIELD. Right. One more comment I would make, if this 

bill passes we know that the coverage for Medicaid is going to be 

expanded, so the States normally pick up that cost and we are trying to provide additional funds from the Federal Government because the States need it. The fact that bothers me about that is 

that the Federal Government needs money, too. So basically we 

have a program here that is expanding, that is going to cost the 

States more money. And because they need more money from us, 

it is going to cost the Federal Government more money. 

But the part of this process that has bothered me the most, and 

I think because I have heard so many comments from people not 

only in my district but really from all over the place, and that is 

the whole process when you are endeavoring to comprehensively 

change the health care system in America and you see side deals 

being cut, when all of us represent the same taxpayer and you see 

Nebraska getting a special deal, you see Vermont getting a special 

deal, you see Massachusetts getting a special deal, you see three 

counties in Florida where they are able to keep their Medicare Advantage program and yet in my district we have 15,000 people on 

Medicare Advantage that may not be able to keep theirs because 

of the reduction in money available for Medicare Advantage. It is 

just patently unfair. 

And I am assuming that HHS worked with some of the staff on 

cutting some of these deals, which we understand is done to obtain 

votes, but as a citizen does it bother you that if you are in a certain 

State or you are in a certain county that you get benefits that other 

taxpayers simply are not going to be able to have? 

Secretary SEBELIUS. Congressman, I think that unfortunately it 

seems to be endemic of any legislative process that money is never 

distributed exactly equally and it always is a problem for those 

who don’t get the resources, and I think this is no different. But 

it has been my experience that that is unfortunately a pattern, 

whether it is appropriations or where projects are sited, or who is 

on the committee, there often is not an actually equal distribution 

of any course of resources, and I think it does make people unhappy. 

Mr. WHITFIELD. I think so, too, and I think that the one area 

where we should get away from that is in the health care area. 


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Thank you very much, Mr. Chairman. 

Mr. PALLONE [presiding]. The gentlewoman from California, Ms. 

Eshoo. 

Ms. ESHOO. Thank you, Mr. Chairman. And welcome, Madam 

Secretary. It is wonderful to see you. A warm welcome to our great 

friend who was with the committee for years and I think will always be part of this family, and that is Bridgett Taylor. It is really 

great to see you. 

Madam Secretary, thank you first for—— 

Secretary SEBELIUS. She is now part of our family. 

Ms. ESHOO. That is right, that is right, but she was a long-time 

member of ours. You are lucky to have her. 

Thank you for your very, very thorough responses to letters that 

I wrote to you. I appreciate that. It took some time to get the responses, but they were worth waiting for because there were direct 

answers about exploring the use of adjuvants and vaccines and thimerosal as well as promoting the new generation of subculturebased vaccines and on the issue of BioShield and BARDA. 

It is more than refreshing to see an HHS budget that emphasizes 

science. We have gotten away from it in our country for too long. 

I think we paid a price for that because time is really the most precious thing that we are given. And for almost a decade we lost that 

time relative to science. So rather than applying political science 

we now are honoring science, and I think that that really honors 

the American people. 

I also would like to applaud many different parts of the budget 

because they are, I believe—and this budget is most frankly what 

I hear from my constituents, from my constituents mostly about. 

Most of the e-mails, questions, factions, meetings have something 

to do with your budget, with HHS. So I think it is a good one. 

Now, on the issue—I know there is an emphasis on fraud and an 

effort to root it out, which I think is really very important. The last 

time we visited that is in the Clinton administration. That is a long 

time ago. I remember Secretary Shalala sitting there and describing for us what they were undertaking. 

How much of a return do you expect from the HEAT effort and 

I know that there is $1.7 billion invested in that. What do you 

think the return is going to be? 

Secretary SEBELIUS. The most conservative estimate I would say is that we get somewhere from $1.10 to $1.50 on every dollar invested. The Attorney General’s numbers look more than 4 to 1. Our 

actual experience with the current fraud efforts are that we get 

somewhere between $14 and $17 for every dollar invested. So we 

have a wide range. What we know is we get back more than we 

spend. 

Ms. ESHOO. Well, it is an area that is galling to the American 

people. There have been things on 60 Minutes, you know, these 

store front ripoffs. It really is the private sector ripping off the public sector. But I think that this HEAT effort better be white hot because there is a lot of money to be found in this, and I wish you 

well on that. 

The other area that I want to ask you about is the area of, as 

I mentioned earlier, on BioShield and BARDA. There have been 

dollars that have been moved around, not a lot but you have 


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moved, I think, 36 million or 136 million out of one area to another, 

and that is the—what I am concerned about is the SRF and you 

have moved some funding out of that. Admittedly it is not a ton, 

but I worry about what remains because the whole area of developing and acquiring chemical, biological, radiological, and nuclear 

medical countermeasures is very important for our country. I mean 

we have just gone through H1N1. I think that is something that 

will look like something out of a seed catalogue, God forbid, if our 

country, God forbid, had to endure a bio attack. 

So are you comfortable with that? I mean why the movement of 

the funds, how much is left? 

I know that you said in your prepared remarks that there is 

going to be a report due on March 31st of this year. Maybe we can 

revisit this when the report comes to us. If you could see that the 

committee gets that ASAP when you put it out. But it is an area 

that Mr. Rogers and I both worked on, and I have a continuing interest in it both from this committee’s standpoint and also from the 

other hat that I wear from the Intelligence Committee. 

And lastly, I want to say something, I know that—let me just say 

this. 

Mr. PALLONE. The gentlewoman’s time is over, but go ahead, finish. 

Ms. ESHOO. I am going to take about 30 seconds. And that our 

colleagues on the other side of the aisle are continually banging on 

all kind of drums relative to health care, all kinds of ideas, offer 

everything to everyone, cure everyone, give everyone insurance, 

and it is not going to cost a cent. I don’t know where your budget 

is on this, but I think you need to put it on the table. 

Furthermore, most frankly, you were in control for a long time 

and you are on this committee that has—— 

Mr. PALLONE. The gentlewoman is a minute over. 

Mr. GINGREY. Regular order, Mr. Chairman. 

Ms. ESHOO. Why didn’t you pass all these things when you were 

in control? 

Mr. GINGREY. Regular order. 

Mr. PALLONE. Move on. 

Ms. ESHOO. Answer the question. You don’t like it when someone 

raises it. 

Thank you, Mr. Chairman. 

Mr. PALLONE. Gentleman from Illinois, Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. I think that the benefit 

of having the President in Baltimore is that we did give him the 

package of gop.gov and I want to encourage my colleagues on the 

other side to take a look at those, because I do think, Madam Secretary, when we met with the RFC before the bill moved to the 

floor, I did talk about private insurance, a national health exchange, and a way to do it on a market based solution. The Democrat leadership did not decide to go in that manner. I hope we 

relook at that. If we really want to move legislation and provide 

health care to all Americans, there is a compromise out there and 

you can model it out a Medicare D. That is what I proposed, I don’t 

know, a year ago, or 8 months ago, but we could really get there 

if we shelve the centralized control, one big government solution 

and go back to the market. 


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But for my questions, according to the Congressional Budget Office, the House-passed health reform bill would add 15 million 

Americans to the Medicaid rolls, producing 34 billion in unfunded 

mandates on States during the 2015–2019 period. Now this is following up from Mr. Deal’s question, which he asked has any Governor said, no, this is a bad idea. You failed to answer that question, and I am wondering if based upon—did you have any Governor say I don’t want these additional unfunded mandates because 

we know Medicaid requires the State, some States a 50/50 share, 

some States 70/30 share, depends on the State. Do you have any 

Governors that said no, don’t do this, the Medicaid expansion is 

bad, we can’t afford it? 

Secretary SEBELIUS. We have had Governors who have expressed 

that they want more adequate Federal funding if there is expansion and other Governors who are very enthusiastic about the plan. 

So we have had both. 

Mr. SHIMKUS. So there are 35 States right now moving referendums against this, and I think the Virginia Senate just passed legislation through the Virginia Senate against the expansion of Medicaid. 

Secretary SEBELIUS. My understanding is the Virginia issue 

deals with a mandate to purchase insurance coverage. 

Mr. SHIMKUS. Well, I think that 35 States—yes, we can address 

that, but the issue is States are saying no, they can’t afford it. Illinois is broke, California is broke. 

Secretary SEBELIUS. And many States, as you know, Representative already exceeding the 133 percent. So we have States that are 

kind of all over the place. 

Mr. SHIMKUS. I would just say expanding Medicaid to States who 

can’t afford to expand it by mandate, and that is where the debate 

comes, so then the Federal Government, which doesn’t have a balanced budget requirement that many States do, that is where then 

we pick up the tab and we go into historic national debt as we find 

ourselves today just passing an increased—it is not mine—an increase in the debt limit. 

Let me go to—would the President sign the Senate health care 

reform bill into law as it is alone? 

Secretary SEBELIUS. Sir, you would have to ask the President. 

Maybe you did in Baltimore. 

Mr. SHIMKUS. Let me set the groundwork. When you came here 

the first time the health bill was just in draft form, so you refused 

to take any questions on the health reform bill. You promised to 

return, which that never happened. So a lot of the frustration 

today is not having a chance to talk to you in the committee process to debate health care reform that was going to go through this 

committee. So that is where a lot of this angst and now we are only 

given 21⁄2 hours to—no one is allowed to give opening statements 

as a whole and then we are—yes, they did extend it for an hour, 

but we had votes, two votes in between. And that is part of the incredible frustration here. 

So does the President support cutting half a trillion dollars from 

Medicare as do the Senate and House reform bills? 

Secretary SEBELIUS. Does—— 


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Mr. SHIMKUS. Yes or no? I will use the John Dingell approach, 

yes or no. 

Secretary SEBELIUS. The President supports the health reform 

bill. 

Mr. SHIMKUS. So he supports cutting $500 billion from Medicare? 

Secretary SEBELIUS. He supports making sure that Medicare is 

solvent into the future. 

Mr. SHIMKUS. So that is a yes. The President supports cutting 

500 billion? The Senate bill says 500 billion, the House bill 

says—— 

Secretary SEBELIUS. Well, they had different numbers in them, 

but the President—— 

Mr. SHIMKUS. So the President supports cutting $500 billion in 

Medicare, yes or no? 

Secretary SEBELIUS. The President is supportive of the health reform legislation. 

Mr. SHIMKUS. Is that a yes? 

Secretary SEBELIUS. I said yes, sir. 

Mr. SHIMKUS. OK, thank you. 

Let me just talk about one issue that was hit on with Mr. Whitfield. These three counties are what we talk about as Gatorade, the 

negotiated deal that Florida cut for their Medicare Advantage 

folks. These three counties, Palm Beach, Broward and Miami Dade, 

will not feel the effect of the Medicare cuts for Medicare Advantage. Was HHS involved in negotiating this deal with the Senate? 

Secretary SEBELIUS. Sir, I was not—— 

Mr. SHIMKUS. No HHS staffer was involved? 

Mr. PALLONE. The gentleman’s time is over. 

Mr. SHIMKUS. Thank you. 

Mr. PALLONE. Sure. 

The gentleman from Texas, Mr. Green. 

Mr. GREEN. Thank you, Mr. Chairman. And welcome, Madam 

Secretary. And obviously our country has had a problem with excessive spending for decades. And I hate to keep reminding our colleagues on the Republican side, we had a balanced budget in 1999 

and 2000 and we ended PAYGO the next year or two, and literally 

for the first part of this decade, for the first 7 years, we spent without worrying about it, everything went to the national debt. And 

now we are trying to do so many things with 10 percent unemployment. 

Let me get back to health care and the President’s budget. First 

of all, I appreciate you being a longtime champion to community 

health centers and the sponsor of the most recent health care center authorization. And as the sponsor of the most recent health 

care reauthorization that passed our committee in 2008, I want to 

commend the President’s budget for the proposed increase in 

health center funding. Although it is below the amount we have 

authorized given the physical constraints you are working with, I 

am very much appreciate this increase. I am especially grateful the 

administration appears to propose that a portion of this increase 

goes toward ensuring that operating funds that health centers receive through the Recovery Act will continue. I know in my own 

district a number of our community-based health centers expanded, 

see more patients and are actually hiring personnel. It was part of 


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the stimulus bill. Health centers to date extended care to 1 million 

Americans using this funding and expect to surpass their goal of 

two million new patients by the end of the stimulus period. 

Can you confirm for us that you intend for existing health centers to continue to receive the funding in order to maintain the capacity to care for the new patients they have added over the past 

year? 

Secretary SEBELIUS. Certainly, Congressman, it is our intent to 

provide resources so that the health centers can deliver care to the 

20 million people. 

Mr. GREEN. Of course community-based health centers really is 

a bipartisan issue. President Bush suggested increases that we 

tried to match. Because the district I represent has the highest uninsured rates in the country, I want to significantly expand the 

health centers program because of their 40-year track record for 

providing high quality and cost effective care. I support the efforts 

of the President to continue access to care for those two million 

served by the health centers through the stimulus bill and to continue to grow the health centers program by providing the $290 

million increase that is in the budget. 

Would you agree that this funding request is based on what you 

see is possible through the limitations and the discretionary appropriations process that is even more significant growth through 

dedicated funding or has been proposed in both the House and Senate reform bills is still necessary, that growth is still necessary 

even though we have seen both the House and Senate health care 

bills? 

Secretary SEBELIUS. Well, I absolutely think that delivery of primary care services through community health centers is one of the 

great success stories. Low cost, high quality care, and really dealing with the whole family. So I am very supportive, I try to visit 

those centers wherever I go in the country, and they are remarkable, community based centers that deliver high quality, lower cost 

primary care. 

Mr. GREEN. If we get to pass the health care bill, I consider that 

the boots on the ground is our community-based health centers 

throughout the country. 

I also appreciate you being an outspoken proponent that schools 

can play in vaccination, both with seasonal and pandemic influenza 

and appreciate your leadership on that. I do have some concern, in 

2008 I was the sponsor and we passed the Tuberculosis Elimination Act. I strongly support increased funding for TB. TB is the 

second leading global infectious disease killer and because it is an 

airborne infectious disease it has always been a present danger in 

the U.S. 

Many States, such as California and Texas, where I represent, 

are struggling with steady increasing rates of drug resistant TB, 

which is extremely costly and complicated to treat. Yet the TB will 

receive a funding cut under the President’s proposed 2011 budget. 

Public health history in the U.S. has shown that cutting back on 

TB control programs can cause costly resurgence of the disease 

such as happened in the U.S. in 1988 to 1992, when New York City 

had to spend over a billion dollars to regain control over TB. 


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Can you assure us that the States will adequately be equipped 

to protect our communities if we have outbreaks, additional outbreaks of the drug resistant tuberculosis. 

Secretary SEBELIUS. Congressman, I look forward to having a 

chance to visit with you more about this issue where you clearly 

have some considerable expertise. Our new Director of the Centers 

for Disease Control and Prevention, Dr. Tom Frieden, did a large 

portion of his work on TB. He takes it very, very seriously. So I 

think working with him and you to make sure we have the resources available is something that I am committed to doing. 

Mr. GREEN. Again, thank you for being here. 

Mr. Chairman, I actually didn’t ask for any extra time. 

Mr. PALLONE. I appreciate it. Thank you. 

The gentlewoman from California. 

Mrs. BONO MACK. Thank you, Mr. Chairman. And Madam Secretary, welcome. I have two brief questions that I would appreciate 

your insight regarding two requests I have pending before your Department. 

Right now at least two and a half million adolescents suffer from 

substance abuse disorders and surveys sponsored by your Department showed continued and increasing trends of the abuse of prescription drugs like Vicodin, Xanax and in my opinion the very 

powerful and deadly OxyContin. This problem has been largely ignored in the health care reform debate. I have concerns that proposed generalized programs like the Prepared Communities Program and counterparts at the DOE will dilute the important focus 

on drug addiction and prevention. 

So my first question for you is will you ensure that a clear focus 

remains on strategies aimed directly at preventing drug use and 

underaged drinking? 

Secretary SEBELIUS. I look forward to working with you on that, 

absolutely. 

Mrs. BONO MACK. Thank you. 

Last year, I asked the FDA—late last year—some specific questions regarding a new formulation which, from what I am hearing, 

it is not tamper-proof, actually it might allow the drug OxyContin 

to be more abused. So I wrote a letter to the FDA with these specific questions, given the tragic abuse of prescription drugs among 

our Nation’s youth. I am hopeful you can encourage your staff to 

respond to this inquiry. 

Secretary SEBELIUS. I would be very happy to do that. And Congresswoman, I would like to also have our new Director of the Substance Abuse and Mental Health Administration get in touch with 

you. As you probably know, substance abuse with prescription 

drugs is only slightly behind alcohol abuse right now and rising 

dramatically among children. It is an issue that she takes very seriously, has done a lot of work on. We are using her to help inform 

a number of our outreach and strategy efforts. So again, I think it 

is going to be a renewed and specific emphasis throughout our Department. 

Mrs. BONO MACK. I am encouraged to hear that, and I thank 

you. I think it is very, very important for us to do that. 

Finally, I request your assistance with an issue that is important 

to our shared goal of rooting out waste, fraud and abuse. In my disVerDate Mar 15 2010 08:59 Nov 06, 2012 Jkt 076007 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 E:\HR\OC\A007.XXX A007

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trict, the 45th District of California, a tribal TANF program is operating, and the tribe has received over $30 million a year, on average, to administer this program. It is troubling that government 

audits have shown a repeated misuse of Federal taxpayer dollars, 

including Federal allegations of misuse of $6 million alone in 2002 

and 2003. Years later, penalties assessed to the program have still 

not been resolved. 

I recently requested that the IG at HHS and ACF investigate 

this matter further. The IG stated that the concerns would be best 

addressed by ACF. Knowing the charge of the IG’s office, I hope 

that they and the ACF can aggressively seek answers and come to 

a resolution of what appears to be years of insufficient accounting 

and a wasteful use of taxpayer dollars. I fear that prolonging this 

problem only hurts the Native Americans for which this program 

was designed to serve in this difficult economy. 

Are you willing to consider protecting taxpayer dollars by withholding new funds until the situation can be resolved? 

Secretary SEBELIUS. Congresswoman, I must confess, I am not 

aware of this situation, but I will commit to going back and dealing 

with both the head of ACF and the IG’s office and putting together 

the information. I can’t commit to anything until I know what the 

situation is and what the history is, but I will definitely take that 

as a personal commitment. 

Mrs. BONO MACK. Thank you very much. I think it is extremely 

important. It is a very blatant example of this waste, fraud, and 

abuse, and it is hurting the people that are designed to be helped 

by this kind of a program. 

Lastly, I am sorry that my colleague from California left, Ms. 

Eshoo. I just would like to say that her questions about what has 

happened in the past on health care really ring hollow to my constituents; they care about what is happening today. And I can tell 

you that they do not like government takeover of health care in 

any way, shape or form. But I am sorry that she has left, but I did 

need to say my frustration as well that pointing the finger, my constituents are tired of that argument. They want to have answers, 

and government takeover of health care is not what they want to 

hear. 

So I appreciate your being here today, and I look forward to 

working with you in the future. 

I yield back the balance of my time. 

Mr. PALLONE. Thank you. 

Next is the gentlewoman from Illinois, Ms. Schakowsky. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. And thank you, 

Madam Secretary, for being here and sticking with us this afternoon. 

I wanted to just make a comment about the exchange that you 

had earlier on the issue of the donut hole. I wanted to make it very 

clear that as important as the low-income assistance is for people 

up to 150 percent of poverty, we have to understand how low an 

income that is and what difficulty people over that—150 percent of 

poverty is $16,250, and to suggest that seniors that make that 

much money can even think about getting out of a donut hole that 

is $3,500, it doesn’t really compute for me if you think about the 

other expenses. 


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So based on your experience, is a $3,500 coverage gap just for 

prescription drugs—that doesn’t count premiums and copays—just 

for prescription drugs affordable for someone whose income is 

$16,500? 

Secretary SEBELIUS. Well, certainly not at that income level. And 

while there may be, as I told the Congressman in his follow-up discussion, some individuals at a very high income level, I think typically we are talking about people using prescriptions who tend to 

be sicker needing more medicine, which also is often a problem because they are spending more expenses on all kinds of other areas. 

So 150 percent of poverty is not a wealthy senior. 

Ms. SCHAKOWSKY. Is $20,000 a year—I would even ask if $35,000 

a year, if that is what you make, to get out of the donut hole at 

about $3,500. These prices are exorbitant, and as you say, these 

are the sicker people. 

Secretary SEBELIUS. Well, unfortunately, what at least my experience is working with seniors, is that too often there really is not 

a great deal of understanding of what is going to happen. So filling 

that next prescription, you are suddenly out of any kind of assistance, and you go from paying—and you continue to pay your premium for part D. 

Ms. SCHAKOWSKY. Absolutely. 

Secretary SEBELIUS. So you pay a premium, and you are paying 

out of pocket 100 percent of the cost. And I know what happens 

all too often is people just don’t fill the prescriptions, do not take 

the medicine, and can’t keep themselves out of the hospital. 

Ms. SCHAKOWSKY. That is why I prefer the House bill, of course, 

that actually does eliminate the donut hole altogether. 

You may not have the answer because it is kind of an esoteric 

question, but I want to pose this to you and maybe you can get 

back to me. We have some nursing home reform advocacy groups 

in Illinois, Illinois Citizens for Better Care for one, and this is a 

problem that was brought to my attention. Recently there was a 

change that means they can no longer obtain Aspen survey data on 

disk, but have to get case-by-case reports on paper, which is a big 

cost burden and time burden to them. So I hope that you will review that decision in order to reduce the burdens on small not-forprofit groups that do inspections, they monitor how nursing homes 

are doing—and of course it is a huge problem—quality care in 

nursing homes, and to ensure transparency. So if you could just 

look into that. 

Secretary SEBELIUS. We will be glad to and get back to you about 

that. 

Ms. SCHAKOWSKY. Thank you. I yield back. 

Mr. PALLONE. Thank you. 

Mr. Terry is next. 

Mr. TERRY. Governor, I appreciate you being here. 

First of all, what is your understanding of where the health care 

legislation is today? Are there plans that you are discussing with 

the White House and congressional leadership to move the House 

bill or the Senate bill? Or is there a movement that you are aware 

of to throw those two away, start anew, where we could focus on 

consensus items? 


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Secretary SEBELIUS. Congressman, I think there are lots of discussions going on. As you know, the House passed a bill and the 

Senate passed a bill—— 

Mr. TERRY. I asked you what is your understanding, not what 

other people are doing. 

Secretary SEBELIUS. I am telling you what my understanding is. 

Mr. TERRY. I am sorry, you said that you didn’t know what other 

people were doing, so—— 

Secretary SEBELIUS. No. There are lots of discussions going on. 

Mr. TERRY. So you are not going to answer the question? 

Secretary SEBELIUS. There are lots of discussions going on. That 

is the answer to the question. There is no one single discussion—— 

Mr. TERRY. OK. Then would you be specific about the ones that 

you are involved with, what are the options? I am sorry, I wasn’t 

more clear in my question evidently. 

Secretary SEBELIUS. Congressman, I think no matter who you 

talk to, any number of options are on the table, start again—— 

Mr. TERRY. What are the options that you are advocating? 

Secretary SEBELIUS. I don’t have a single advocacy piece other 

than let’s move the health reform forward. I favor, as the President 

does, a comprehensive plan. I favor looking at the similarities in 

the House and Senate version and hopefully finding a way to move 

comprehensive legislation forward as quickly as possible. 

Mr. TERRY. OK. During the exchange with the gentlelady—this 

wasn’t on my list to ask, but I have to now—— 

Secretary SEBELIUS. Which gentlelady? 

Mr. TERRY. Ms. Eshoo. There was a comment that you agreed to 

that in regard to looking for fraud, nothing has been done since the 

Clinton—— 

Secretary SEBELIUS. Sir, that was her statement—— 

Mr. TERRY. Well, you agreed with it. 

Secretary SEBELIUS. I sat here. 

Mr. TERRY. Well, let me ask you; do you agree that the Bush administration has done nothing in 8 years to find fraud and waste? 

Because that was the statement, and you didn’t counter that at all. 

Secretary SEBELIUS. Sir, I don’t have any expertise on what the 

Bush administration did or what the Clinton administration did. I 

assume that—— 

Mr. TERRY. Is it your opinion they have done nothing? 

Secretary SEBELIUS. It is not my opinion one way or the other. 

I don’t want to offer opinions. 

Mr. TERRY. Well, you didn’t correct the gentlelady, so I assume 

since you had the opportunity to say there has been efforts. Well, 

with the HEAT program in place, wouldn’t it be beneficial that you 

looked at what past administrations have done? 

Secretary SEBELIUS. We certainly have looked at what past administrations have done. I know—— 

Mr. TERRY. So what has the Bush administration done? You just 

said you didn’t know. 

Secretary SEBELIUS. I am very sorry. I am happy to go back and 

document. I don’t want to give you incorrect information. I am not 

an expert on what the Bush administration did, or as Congresswoman Eshoo said, what the Clinton administration did, so I didn’t 


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enter into that discussion. I would be happy to come back and report to you. 

There clearly has been a fraud and abuse effort underway. There 

never has been the effort put forward by this President which asks 

the Justice Department and HHS to collaborate and cooperate at 

the Cabinet level to put strike forces on the ground to try to get 

out ahead. It has been a pay-and-chase operation, often auditing 

sometimes well after the fact has been in place for a long time. 

Mr. TERRY. OK. Well, very good. 

I have had some of my pharmacies back home tell me they have 

yet to get their inspections, even with the extension that Congress 

passed, to allow them to get their appropriate license to sell durable medical goods. Is there another effort by HHS to give them an 

opportunity to get licensed or whatever the appropriate language 

would be? It has already been extended once. 

Secretary SEBELIUS. I can’t answer that specifically, but I would 

be happy to get back to you. I don’t know the reference, the time 

frame that you are referring to. 

Mr. TERRY. Well, I only have 28 more seconds. 

Lastly, in the environmental health section of the budget, it is 

reduced a little bit. There are two programs in here that I would 

appreciate you taking a look at, one is the Healthy Homes Child 

Lead Poisoning program. That is an extremely important program 

in Omaha. We are a Superfund site for lead, but if you ask our 

health folks, they will tell you that most of the lead poisoning that 

is occurring is from unhealthy homes that are significantly older 

than 1973. So for that to be one of the programs cut is a concern 

to me. The other is the ALS registration, which seems to be already 

below what the CDC has said they need to do the registration, and 

that is one that is cut. 

One that is a new program put in—it seems to be sucking up a 

lot of the money from the programs that are cut—is the Built Environment and Health Initiative. Can you tell me what that is? 

Secretary SEBELIUS. Congressman, I am sorry, I cannot, but I 

would be happy to get that answer back to you. 

Mr. TERRY. I am just curious. Thank you. 

Mr. PALLONE. I thank the gentleman. 

Next is the gentlewoman from the Virgin Islands, Mrs. 

Christensen. 

Mrs. CHRISTENSEN. Thank you, Mr. Chairman. And thank you, 

Madam Secretary, for being here. 

We appreciate the increases that we are seeing in the 2011 budget, and hopefully we can do some more with health care reform as 

we move on from here. 

You know of our commitment to stopping the preventable early 

excess deaths in African Americans and other people of color, and 

yet as I try to get a handle on what is happening in the Department, I seem to sense a moving away from focusing on racial and 

ethnic minority populations in the Department’s efforts to eliminate these huge disparities that have existed far too long. 

So one of my questions, which applies to the Office of Minority 

Health, the National Center for Minority and Health Disparity Research and the National Minority AIDS Education and Training 

Center, can you reassure me that the needed focus on the racial 


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and ethnic minority populations will continue—not because they 

are minority populations per se, but because they are so disproportionately burdened by disease, and would you support, as we are 

trying to do in health care reform and in other stand-alone bills as 

well, the strengthening and expanding of the Office of Minority 

Health to other agencies and the elevation of the national center 

at NIH to an institute? 

Secretary SEBELIUS. Congresswoman, I would definitely commit 

to you that there has been no lack of focus or attention or interest 

in closing the gap in health disparities, which continue to be alarming and appalling. The new Assistant Secretary of Health, Dr. 

Howard Koh, also takes that very seriously. He is the umbrella 

agency supervising a number of the offices that you have just described. 

Mrs. CHRISTENSEN. So the Office of Minority Health, for example, 

will stay Office of Minority Health; it is not going to not change the 

disparity and move away from minority that you know of. It is 

going to stay Office of Minority Health. The Office of Minority 

Health will continue to be the Office of Minority Health? 

Secretary SEBELIUS. Yes. 

Mrs. CHRISTENSEN. With all of the other AIDS Education and 

Training Centers open to everyone, and given the need for cultural 

competency and the fact that 70 percent or more of the patients 

with HIV and AIDS are people of color, we have this one National 

Minority AIDS Education and Training Center, it works with all of 

the minority-serving institutions, community-based organizations, 

race and ethnicity, but it seems as though HRSA is changing how 

they are dealing with this particular center, trying to fix something 

that is not broken, putting barriers in the way of minority-serving 

institutions, continuing to provide the service at a time when minorities are still disproportionately burdened by HIV and AIDS. 

So do you know yourself what is happening within National Minority AIDS Education and Training Center; is there a move within your Department to open that up to every majority institution, 

better funded, better able to compete, or can we try to keep that 

within a minority-serving institution? 

Secretary SEBELIUS. Well, again, Congresswoman, I think the 

very good news is that President Obama has taken very seriously 

the commitment to have a very aggressive domestic AIDS/HIV 

agenda, feeling that while the focus of PEPFAR has been a great 

success globally, we have really not paid as careful attention to 

what was happening in the United States. And as you just stated, 

the overwhelming number of new infections and new cases are focused directly in the minority community, in African Americans, in 

Latinos, and in American Indians. 

First, I would tell you that I just participated in greeting and 

swearing in the new PACHA Council, a diverse and very committed group of individuals. We intend to have a very aggressive 

focus that is well funded, and our office is clearly a part of that. 

And I will have that conversation with Dr. Wakefield. 

Mrs. CHRISTENSEN. Understanding the need to focus on racial 

and ethnic minorities, who are hardest hit. 

I would just like to get in a word about ADAP, $20 million this year, $20 million next year. They need more than $200 million to 


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end the waiting lists. We would like to see a stronger commitment 

to ensuring that everyone with HIV and AIDS has access to treatment and not lose sight of the fact that not only will people die as 

they wait on these waiting lists, but that treatment is a major form 

of prevention as well. So it is very important that we try to close 

that gap for ADAP. 

Mr. WAXMAN. The gentlewoman’s time has expired. Thank you. 

The gentleman from Texas, Mr. Burgess. 

Dr. BURGESS. Thank you, Mr. Chairman. 

Madam Secretary, last week—I hope you are aware that this 

committee took up the business of a resolution of inquiry to obtain 

documents from the White House and from your Department on 

deals that were made with six major stakeholders early in the 

health care reform debate. Thanks to Chairman Waxman, we had 

a unanimous vote in this committee in support of obtaining many 

of the documents that I think the committee really should have to 

see how the legislative process might have been circumvented. So 

Chairman Waxman and Ranking Member Barton will be delivering 

to you a letter detailing the six areas where we would like more 

information. 

Do I have your commitment to work with Chairman Waxman 

and this committee to obtain those documents from your Department? 

Secretary SEBELIUS. Yes, sir. 

Dr. BURGESS. Thank you. 

Now, yesterday you testified at Senate Finance that you and 

your staff were not enveloped in health care reform negotiations. 

Was that correct testimony to the Senate Finance Committee yesterday? 

Secretary SEBELIUS. Congressman, what I testified to was that I 

don’t have a vote in the committee. I have certainly been present 

at not only dozens of conversations with Members of Congress and 

the White House, I have traveled all over this country talking to 

stakeholders and seniors, doctors and nurses, teachers, union members. I have been involved literally in hundreds of meetings—— 

Dr. BURGESS. I am sorry. I am going to interrupt you because 

time is going to run out. It was reported in the New York Times 

yesterday quoting you, ‘‘I am not a principal in the negotiations.’’ 

So you were present, but—— 

Secretary SEBELIUS. What I said is we play a role of providing 

technical advice and assistance. We certainly have encouraged people, but I don’t have a principal’s vote. I have been a member of 

the executive branch and the legislative branch, I am not a legislator at this point. 

Dr. BURGESS. I am not meaning to interrupt, but in Politico on 

December 2, it was reported that there were strategy sessions that 

involved yourself, Interior Secretary Ken Salazar, White House 

health czar Nancy-Ann DeParle and White House Deputy Chief of 

Staff Jim Messina. Is that an accurate reportage, is that an accurate assessment? 

Secretary SEBELIUS. I have no idea what they are referring to. 

I have certainly been in a room with those folks. And again, I will 

go through my calendar and give you information. 


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Dr. BURGESS. That gets then to my question, will you be willing 

to provide us any notes or e-mails that you had, for example, with 

the health care czar Nancy-Ann DeParle or the White House Deputy Chief of Staff, Jim Messina—— 

Secretary SEBELIUS. Sir, I will look at the request as it comes to 

me and assure you we will get back to you. 

Dr. BURGESS. Well, here is the frustration, we are the committee 

that is charged with writing the legislation. And the President, to 

his credit, last March said that he was going to set boundaries and 

deadlines, but the committees were going to write the legislation. 

And then we find out that last May and June there were all kinds 

of deals cut with American Hospital Association, AHIP and 

PHARMA down at the White House, the AMA. We don’t get to be 

privy to any of those deals. The AMA endorsed the bill before we 

even got it in committee. What did they give, what did they get? 

Why did that happen that way? Why was it in the Senate Finance 

Committee last fall that Senator Nelson, when he was trying to 

work some of the cost cutting that was going on, the whole bill had 

to go back to CBO to be scored because the hospital said we had 

a different deal? 

You can understand the frustration at the legislative side with 

trying to deal with legislation that is this complex—and we all 

agree that it is complex—and yet we don’t know on the legislative 

side what deals you have made on the administrative side. So that 

is very frustrating. In fact, I think it disrespects the role of this 

committee to not be privy to those discussions that were carried on 

behind closed doors, especially when the President promised over 

and over and over again that this would be a transparent process— 

you mentioned that in your opening statement, that transparency 

was going to be critical, and yet we have had nothing that resembles transparency, everything has been opaque from the administration in regards to how these health care deals were worked out. 

Secretary SEBELIUS. Well, again, Congressman, I would suggest 

this conversation basically has gone on for a year. There have been 

hundreds of hearings, lots of C–SPAN coverage, lots of public forums and town hall meetings over and over and over again, three 

different committees have now tons of amendments—— 

Dr. BURGESS. I am well aware of that, I don’t need to hear that 

recitation. But the Senate confirmed you as the President’s principal health care advisor; is that correct? You went through the 

Senate confirmation process? 

Secretary SEBELIUS. Confirmed me as the Secretary, yes. 

Dr. BURGESS. Then it seems like—and what you tell this committee, what you told Mr. Terry is, well, you are really not a principal in these negotiations. Is that because the President doesn’t 

trust you to carry on this type of negotiation? 

Secretary SEBELIUS. Congressman, what I said yesterday, and I 

will say it again, is I am not a principal to vote on the bill. I am 

not a member of the legislative body, I am a member of the executive branch. 

Dr. BURGESS. You are the primary adviser to the President of the 

United States on health care policy, you were confirmed by the 

Senate. It is your obligation to be a principal in these discussions. 


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Mr. PALLONE. The gentleman’s time has expired. The gentleman 

has expressed his opinion, we have to move on. 

Next is the gentleman from North Carolina, Mr. Butterfield. 

Mr. BUTTERFIELD. Thank you very much, Mr. Chairman. Let me 

start by thanking you for being here today. I know it has been a 

long afternoon for you, but thank you very much for your patience. 

Let me also thank you for your leadership throughout this whole 

health care reform debate. I happen to believe that you have been 

an integral part of this debate and you have played a very valuable 

role in this debate. And even though my friend from the other side 

of the aisle may feel that you were not at the table, I believe that 

you were. So thank you for your leadership. 

Madam Secretary, I am particularly interested in the area of 

health IT and the investments made in the Office of the National 

Coordinator of Health IT. Your testimony makes mention of the administration’s plan to encourage the adoption of electronic health 

records through Medicare and Medicaid incentive payments, as 

provided in the recovery bill. I think this should be applauded, and 

I appreciate the leadership the administration has shown on the 

issue. 

I must express some concern, however, with the proposed rule 

issued by CMS on the definition of meaningful use of EHRs, particularly regarding the requirements for hospitals and doctors to 

receive the incentive payments. How will rural hospitals, including 

critical access hospitals, be able to meet these objectives? I happen 

to be from a low-income district, and you and I have had that conversation many times. I represent a very low-income district with 

major chronic health issues prevalent among constituents. How will 

those hospitals that serve low-income communities have the resources to meet these objectives? Can you help me with this? 

Secretary SEBELIUS. Certainly, Congressman. I think, as you 

know, that Congress anticipated the Office of Technology would develop a definition for ‘‘meaningful use,’’ it is part of the legislative 

mandate, it is part of the law moving forward. There is an assumption that small providers, small critical care hospitals, those who 

are not necessarily as technologically savvy right now, haven’t 

started this process, may need more assistance, which is why I 

think wisely the legislation also anticipates these regional extension centers which will be available. And their primary charge is 

to focus on underserved areas, to focus on more reduced poverty 

populations, on hospitals and providers who need additional assistance. So that is part of the framework that is moving forward. So 

there will be financial incentives, but more than that, there will be 

actual practical help resource centers, kind of hands-on assistance. 

Mr. BUTTERFIELD. But it is not only the small hospitals, it is the 

medium-size hospitals as well; they just don’t have the resources 

to meet these objectives. 

Secretary SEBELIUS. That is right. Well, the resources will be 

part of the incentives as the bill moves forward. As quickly as people are ready to become part of meaningful users again with assistance and help and support, they will be able to qualify for the payments that Congress allocated in the measure. 

Mr. BUTTERFIELD. Let me conclude by thanking you for your support for community health centers. That is a big deal in rural comVerDate Mar 15 2010 08:59 Nov 06, 2012 Jkt 076007 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 E:\HR\OC\A007.XXX A007

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munities as you well know. You have been very sensitive to our 

needs. This administration has been sensitive. And the President’s 

budget speaks to increased community health centers. The bill that 

we reported out of this committee was very strong on community 

health centers. And I just want to thank you and urge you to continue to support the concept of community health centers. They are 

very valuable in low-income communities. 

Thank you. I yield back. 

Mr. PALLONE. I thank the gentleman. 

And next is the gentleman from Georgia, Mr. Gingrey. 

Mr. GINGREY. Mr. Chairman, thank you. Madam Secretary, 

thank you for your patience and staying with us. 

We have an entitlement crisis on our hands. And the unfunded 

liability, as you know, Madam Secretary, for Medicare alone is $35 

trillion by the year 2075, $35 trillion. If left unaddressed, this obligation alone could ruin our future economy. Yet in the President’s 

budget, this $3.8 trillion budget request, I don’t see any concrete 

proposals to improve the Medicare solvency outside the $251 million that you mentioned in your budget increase to fight waste, 

fraud and abuse. Surely there are more initiatives available. They 

certainly are needed to strengthen the Medicare program for our 

seniors. Why are there no other initiatives included in the budget 

request so that we can extend the Medicare solvency? 

Secretary SEBELIUS. Well, Congressman, again, the budget was 

put together as a companion piece to a number of the features in 

health reform, and we hope to be able to move forward aggressively 

in both fronts. 

Moving toward more of a coordinated care strategy on bundled 

payments, which is a way to actually ensure that we can do everything from reducing the return of one out of every five Medicare 

patients to the hospital and keep folks not only healthier, but at 

home, working on hospital-based infections which not only kill 

100,000 Americans every year, but actually cost hundreds of millions of dollars year in and year out, those strategies are very much 

a part of the look forward. We are beginning to focus more of the 

payment on primary care and general practitioners recognizing 

that keeping people well at the front end—— 

Mr. GINGREY. Madam Secretary, I am going to interrupt you. I 

have a couple more questions I want to ask. I agree with you on 

that point, certainly wellness is the way to go rather than waiting 

until people get sick. I certainly don’t disagree with you on that as 

a physician member. 

The mandatory part of our budget is probably 60 percent of our 

spending, and yet in the President’s budget there is some shifting 

of some of the discretionary spending, particularly on the money 

that was going to be given to the States to help create these highrisk pools—I think something like $55 million—and make that 

mandatory spending. It makes it easy, of course, to freeze discretionary and fulfill his pledge to do that over a 3-year period, but 

it seems to me it is pretty irresponsible to create additional mandatory spending of any amount at a time when we are suffering so 

badly with these $1.6 trillion deficits as far as the eye can see. 

Would you agree with me that creating additional mandatory 

spending is certainly not in our best interests? 


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Secretary SEBELIUS. Well, I think any additional mandatory 

spending needs to be looked at very carefully. I would certainly 

agree with that. 

Mr. GINGREY. Well, thank you, Madam Secretary. I appreciate 

that response. 

Let me ask you one quick last question. You know from previous 

times that you have been with us I have always had some concern 

over the amount of money that we spent on H1N1 and where that 

money goes and what we do with the amount that is left over, and 

indeed what we do with the vaccine that is not used. Under the 

CDC portion of the budget I see there are $225 million listed as 

balances from the pandemic flu fund that was passed in June. Just to be clear, how much of the original $7.7 billion that was 

given to the President in June to combat H1N1 virus remains? 

How much of that money has been unspent at this point? 

Secretary SEBELIUS. Congressman, I don’t want to give you an 

incomplete answer. What I would very much like to do is give you 

a very thorough breakdown of where exactly the money has been 

spent and where it is. I know that a portion of the supplemental 

funding, that 209 supplemental funding that was designed to deal 

with the H1N1—— 

Mr. GINGREY. Madam Secretary, fair enough. If you would give 

me—I know you don’t have time now, and I want to ask you one 

last thing, but if I would give me a report back on that, I would 

very much appreciate if you would get back to me in a timely fashion. 

Secretary SEBELIUS. I would be glad to do that. 

Mr. GINGREY. The last thing real quickly. In regard to the stockpile of H1N1, how many people have we actually reached that have 

been vaccinated? And of the remaining stockpile, what percentage 

actually of the stockpile remains, what happens with that next 

year? Can we utilize that in any effective way or do we have to discard it? 

Secretary SEBELIUS. Congressman, my last numbers from CDC I 

think were in the 64–65 million range in terms of people who have 

been vaccinated. States are continuing to order vaccine, as you 

know. Just at the first of the year the vaccine opportunities opened 

up, so seniors are beginning to be vaccinated, populations who 

weren’t in the high-risk pool are being vaccinated. And what is 

happening is that the bulk antigen is absolutely able to be used for 

future vaccinations. The fill and finish has a more limited time period, so there has been an attempt not to fill and finish every 

amount of the bulk antigen that has been purchased, and that is 

being looked at. But the States are continuing to order vaccine, and 

so we are looking at that issue very carefully. 

Mr. GINGREY. Madam Secretary, thank you. Thank you for your 

patience. 

I yield back. 

Mr. PALLONE. I thank the gentleman. 

The gentlewoman from Florida, Ms. Castor. 

Ms. CASTOR. Thank you, Mr. Chairman. And welcome, Madam 

Secretary. 

The collective cheer you heard from Florida families and hospitals last Friday afternoon was the result of your effort to work 


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with us on a 1115 Medicaid waiver, an amendment to that. I want 

to thank you very much, and Sydney Mann and Bridgett Taylor 

and your entire team for helping us get that done. 

And then you came to our aid again this week because HHS 

rightfully activated the National Disaster Medical System because 

after the January 12 earthquake in Haiti, hundreds of evacuees 

have come to the State of Florida for medical care and treatment 

that is not available in Haiti. In fact, the State of Florida has treated 618 people from Haiti who were injured in the earthquake. 

Many are still in our hospitals receiving treatment, and that National Disaster Medical System is helping evacuate Americans and 

Haitians, and we really appreciate it. 

Here is my question: How long will it remain activated? 

Secretary SEBELIUS. I think, Congresswoman, that is a question 

that we are not quite sure that we can answer right now. What 

was clear in the conversations with your Governor and other State 

officials like yourself is that the disproportionate brunt that Florida 

was bearing did not seem appropriate when there was really a national and international response to the crisis. 

The effort is to stand up medical care in Haiti as quickly as possible. A number of the people being evacuated right now are actually doing post-op care. They have surgical treatment on the USNS 

Comfort and then need to be brought somewhere for care. That, 

hopefully, will be available in Haiti in the very near future. There 

is a 325 bed hospital that should be up and running within days, 

literally, that can be expanded to 1,000 beds, doctors and medical 

supplies being gathered. So the government of Haiti, and others, 

would far prefer, frankly, that we help build those assets in Haiti, 

and that is what really the international community is responding 

to. So this is a stopgap, but I can’t tell you exactly how long. 

Ms. CASTOR. So we will continue to have a dialogue on that. 

And Florida’s Department of Children and Families has begun 

repatriation efforts for more than 25 Haitians following the earthquake. Under the current law, Haitians who are granted temporary 

protective status are considered Cuban Haitian entrants and they 

are, therefore, eligible for medical Federal assistance such as Medicaid for 7 years after they arrive in the United States. Consequently, Florida, and I am sure other States, will have a sizeable 

number of newly Medicaid-eligible residents for years to come. 

Does the administration’s budget consider this? I know that the 

budget probably was mostly put together before this time, so does 

it consider this? 

Secretary SEBELIUS. No. The budget really was put together before the earthquake hit, and so we are having conversations not 

only in our agency, but government-wide, about what this assistance needs to encompass. 

Ms. CASTOR. So you will continue to work with us—— 

Secretary SEBELIUS. Your Office of Children and Families has 

been absolutely spectacular. 

Ms. CASTOR. Well, I appreciate that, and I will pass that on to 

the Secretary. 

Will this be handled through FMAP or some other means? Or we 

will have that dialogue going forward. 


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Secretary SEBELIUS. Currently, Congresswoman, there are lots of 

alternatives. Our Office of Refugee Assistance is one, there are 

other avenues, but those conversations are really underway. 

Ms. CASTOR. OK. In a somewhat related vein, there are many 

States that are prone to natural disasters. For example, in Florida, 

in recent years we were hit by seven hurricanes, and it skewed our 

FMAP calculation because after the hurricanes we had a huge runup of reconstruction and jobs so that when the recession hit, the 

formula really hurt us, we didn’t have the money coming in under 

FMAP. Now, fortunately through the Recovery Act we have made 

some of that up. But I would like to look at a permanent solution 

for States that run into these kind of problems so that at the worst 

time we are not penalized just because of a post-disaster run-up in 

employment. 

Would you work with me on that type of solution, or do you have 

any recommendations at this time on how to—— 

Secretary SEBELIUS. No, I think that is a very real issue and 

problem that is not unique to Florida. It has been experienced by 

a number of States, and I think there are also a number of Members who think that the entire FMAP formula needs to be revisited. 

So this could be one aspect of that. 

Ms. CASTOR. Thank you very much. 

Mr. PALLONE. The gentlewoman’s time is expired. 

The gentleman from Maryland, Mr. Sarbanes. 

Mr. SARBANES. I know you are delighted to see me because I am 

the last one to ask you questions. 

Secretary SEBELIUS. Always delighted to see you, Congressman. 

Mr. SARBANES. Thank you. 

First of all, I want to commend you on your remarkable 

composure, which I judge as remarkable because if I had to sit 

where you are sitting and bear some of the hectoring that you did 

today, I don’t think I would have been able to exhibit the same 

composure. And you don’t have to respond to that. 

I do want to say that I think you are doing a wonderful job in 

your position. And you have a bearing which I think will stand the 

agency in good stead and has been very effective in dealing with 

the public on all manner of issues, including the H1N1 flu virus, 

and others. We are really blessed to have you there. 

It cannot have been easy to put this budget together given what 

a moving target the health reform bill has been. And regardless of 

what happens with that reform effort, your work will remain really 

at the center of the health system, and particularly the public 

health system. So I thank you for the work you are doing. You 

have clearly put together a tremendous staff that I know is working around the clock on these issues. 

There are so many good things that are in those health reform 

bills, and many of them are ones that your budget reflects as well. 

I just wanted to point to a couple of them and ask a couple of questions. 

First of all, there is a discussion of these Medicare demonstration 

projects and some other initiatives to determine how to better align 

provider payments with the kinds of outcomes and treatments and 

regimens that we want to see. I have been long fascinated by the, 

I think, overemphasis on procedure reimbursement versus time 


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spent with patients. I am wondering if you could just speak to 

whether some of these demonstration projects are intended to determine how we can enhance outcomes and treatment approaches 

if we look to providing better reimbursement so that physicians can 

be rewarded for spending a little extra time with their patients. 

Secretary SEBELIUS. Well, I think that is certainly one of the outcomes that would be most desirable, not only providing financial incentives to spend more time, but certainly the kind of coordinated 

care strategies which we know work well with not just physicians, 

but sort of medical teams that, following a patient’s release from 

a hospital, can be much more effective at keeping that patient well 

and healthy and on a pathway to success. So we have added Medicare to a demonstration project that is going on in the Northeast, 

which we think can be a great success. 

We know that too often physicians—and, Dr. Gingrey, you may 

have this experience—talk about not being able to see people on a 

regular basis to keep them well, but they get the incentives tilt toward sick care and not health care. So I think we have got a great 

deal of opportunity to move into that preventative care, wellness 

strategy space with financial incentives and other strategies to 

make sure that providers can be providers. 

Mr. SARBANES. Great. I wanted to congratulate you on the resources going towards the National Health Service Corps, enhancing the number of primary care providers out there, and other initiatives which include as a component of helping students with the 

debt burden that they carry—that is something that I am particularly focused on across the board and authored a provision that actually the President mentioned the other day relating to loan forgiveness for those who go into public service. So I really encourage 

that effort. 

The last thing I will just mention, because I am running out of 

time, is I am very interested as well in this idea of what I call 

place-based health care, which is to think about instead of relying 

on the patient to come to our health care system, we think about 

how we can bring the system to the patient, and think about where 

people are already gathered, where there is a captive audience. The 

most obvious example of this is schools. I would love to continue 

to work with your office on all things school-based when it comes 

to health initiatives because I think there is tremendous opportunity there to provide screening and preventive services and other 

things, potentially even help with the enrollment around CHIP, although I know that is something that has to be worked through 

perhaps on a State-by-State basis, but there is tremendous potential there. And you know that the H1N1 outbreak in New York 

City, for example, was spotted by a school nurse. There is so much 

more we can do to enhance the public health infrastructure of the 

country if we focus in on these places where people already are. So 

I look forward to continued efforts in that regard as well. 

Secretary SEBELIUS. Well, Congressman, I think not only is your 

effort in that area appreciated, but one of the great success stories 

of H1N1 will be the school-base vaccination clinics, where schools 

really were great partners. They were even better when there was 

a school-based health clinic that was then reaching out to the parents and grandparents and younger siblings of those children. 


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I can tell you that the new Secretary of Education and I have already had discussions about how we can accelerate and encourage 

more school-based health clinics because I agree with you, it is a 

great way to provide cost-effective health care and reach folks 

where they are comfortable and coming on a regular basis. Unfortunately, the number of school-based health clinics is kind of frozen. It was a large investment, and then it has kind of flattened 

out. But I think the way community health centers have become 

part of the infrastructure, I think school-based health clinics also 

need to be looked at as one of the ways to expand access site and 

deliver low-cost, high-quality preventative care not only to children, 

but to their parents and grandparents, to the neighborhoods 

around the schools and have the schools be a health center. 

Mr. PALLONE. Thank you, Madam Secretary. 

Mr. SHIMKUS. Mr. Chairman, I ask unanimous consent for a second round of questions. 

Ms. CASTOR. Objection. 

Mr. SHIMKUS. Is the gentlewoman from Florida the one who objected? I am just trying to identify which person objected in the 

front row. Is it the gentlelady from Florida? 

Mr. PALLONE. She did object. 

Mr. SHIMKUS. Objected to a second round of questions of the Secretary? I would like to thank her. 

Mr. Chairman, point of order. 

Mr. PALLONE. Let me just respond to you. 

The chairman, Chairman Waxman, made it very clear from the 

beginning that what we were doing is having everyone have 5 minutes to either ask questions or make a comment, or whatever. It 

was quite clear that we were not having a second round and that 

that is what we were doing today. So I am not going to proceed to 

a second round because I think it was quite clear from the beginning that that is not what we were doing. 

Mr. SHIMKUS. A unanimous consent request, Mr. Chairman. Just 

for anyone who has questions to be able to submit them to the Secretary. 

Mr. PALLONE. Yes, absolutely. 

Mr. SHIMKUS. I don’t know if that question was made prior. 

Mr. PALLONE. I know you have some written questions you would 

like to submit to the Secretary, I know others will, so we will 

allow—I mean, we always do, but I will specifically say today that 

we will have some written questions, and we would like you to get 

back to us in a timely fashion, Madam Secretary. 

Mr. SHIMKUS. Mr. Chairman, will there be a time limit that we 

expect these responses to be made? As we saw, some came quick, 

quite a few came long. 

Mr. PALLONE. I believe that, generally speaking—but I don’t 

want to put you in any kind of a straitjacket here—but generally 

speaking, we ask the Members to submit those questions within 10 

days, I believe. And I would ask that for whatever you get within 

those 10 days, that you get back to us in a reasonable time, a few 

weeks. 

Mr. SHIMKUS. Mr. Chairman, is this the last time we will see the 

Secretary this year before this committee? 


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Mr. PALLONE. I certainly hope not. I have thoroughly enjoyed 

seeing her. 

Mr. SHIMKUS. Part of the frustration is we have the head of one 

of the largest departments in the Federal Government and we have 

3 hours with her. 

Mr. PALLONE. I understand. 

Mr. SHIMKUS. With the major policy decisions that health care 

has been, with a promise that she would have been here after the 

rollout of the bill, which never occurred. So that is our frustration, 

and we would like to have more time. 

Mr. PALLONE. Well, we are not doing it today. We will see if 

there is another opportunity, but I don’t want to make any commitments at this time. 

But I do want to thank you for being here today. I know it was 

suggested that it was tough; it wasn’t really that tough compared 

to some of our meetings. But we do appreciate all that you have 

done really, not only on health reform, but also on all the different 

health issues that come before your Department. Thanks so much. 

Without objection, this committee is adjourned. 

[Whereupon, at 5:20 p.m., the committee was adjourned.] 

[Material submitted for inclusion in the record follows:] 


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'io"PYA WAXMAN C4UfORNiA C!!AiIlMAN 

ONE HUNDRED ELEVENTH CONGRESS 

~ongrcss of tbc Wlnitcb $tatcs 

:i!Jom.ic of l\cprc5Clttatibc5 

COMMITIEE ON ENERGY AND COMMERCE 

2125 RAYBURN HOUSE OFFICE BUILDJNG 

WASHINGTON, DC 20515-6115 

energycommerce.house.gov 

September 14, 2009 

The Honorable Kathleen Sebelius 

Secretary 

Department of Health and Human Services 

200 Independence Avenue, S. W. 

Washington, D.C. 20201 

Dear Secretary Sebelius: 

Jor BA~¥O'l. r[XAS ;jANK'''(,Mr~f8[1i 

We write to request information from the Department of Health and Human Services 

(HHS) relating to the Environmental Protection Agency (EPA) use of HHS special pay 

authorities under Title 42, particularly 42 U.S.C. §209(1) related to the appointment of "special 

consultants." Section 209(1) provides: "In accordance with regulations, special consultants may 

be employed to assist and advise in the operations of the [Public Health} service. Such 

consultants may be appointed without regard to the civil-service laws." HHS uses 209(1) as a 

recruiting or retention tool to pay HHS scientific employees much higher salaries than the 

salaries these employees could get under federal Civil Service systems. 

We have leamed that the EPA is using HHS special pay authorities for EPA employees. 

In its commentary for the implementing regulation, EPA claimed it acquired Title 42 pay 

authorities from The Interior, Environment, and Related Agencies Appropriations Act 0[2006 

(Public Law 109-54). That act included language that the EPA could appoint up to five research 

fellows "to the Office of Research and Development" in any fiscal year through fiscal year 2011. 

We note the Administration's Budget for FY 2010 requested employment of up to 30 persons at 

anyone time in the EPA's Office of Research and Development under the authority provided in 

42 U.S.C. §209, and that this provision was enacted as part of the Omnibus Appropriations Act 

of2009, Public Law 111-8. Further, the Department of the Interior, Environment, and Related 

Agencies Appropriations Act of2010 (H.R. 2996) as passed by the House on June 26, 2009, 

included a provision extending the Title 42 program at EPA through fiscal year 2015. 
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Letter to the Honorable Kathleen Sebelius 

Page 2 

There is reason to believe that EPA is using the research fellow program as a way to 

expand 209(1) authority into a comprehensive pay system similar to the HHS Title 42 program. 

In the summary for the direct fmal rule issued on April 4, 2006, EPA stated that the agency was 

taking direct final action on the implementation of statutory authority in the 2006 Appropriations 

Act "that will allow the EPA to establish fellowships in environmental protection research, 

appoint fellows to conduct this research, and appoint special research consultants to advise on 

environmental protection research. " (Emphasis added.) EPA regulation 40 C.F .R. § 18.1 0 

authorizes the appointment of special research consultants for environmental protection ''to assist 

and advise in the operations of the EPA" in addition to these fellowship appointments established 

by 40 C.F.R. § 18.2. The EPA Order 3110.22 on "Title 42 Special Hiring Authority - Policy, 

Responsibilities, Requirements" (September 19,2006) specifically cites 42 U.S.C. §209(1)-(g) as 

authorities. Although Title 42 appointments are limited to EPA's Office of Research and 

Development, we note that EPA has established a comprehensive set of policies and tools to 

govern the implementation of the authority, including a Title 42 Operations Manual and various 

forms and worksheets. One of the forms is a template that can be used by EPA employees 

seeking voluntary conversion to a Title 42 position (see attachment). EPA has also established a 

pay range. The bottom of the range is defined as the maximum pay rate of the tenth step for a 

GS-15 (including locality pay) and the top armual pay is currently $250,000, with total armual 

compensation for a Title 42 position up to $275,000. 

EPA is an independent agency, not part of HHS or the Public Health Service. While the 

Appropriations Act referenced the statutory authority of 42 U.S.C. §209 with respect to EPA 

appointments to the EPA Office of Research and Development, the language of the underlying 

statute 42 U.S.c. §209 was not amended to extend coverage to the EPA. We are curious how 

EPA can legally use statutory authority explicitly committed to the Public Health Service and the 

Surgeon General, particularly the special consultant authority in 209(1), and whether HHS has 

made any kind of interpretation of its statutory authority of 42 U .S.C. §209 that would relate in 

any way to EPA. 

It is understandable why EPA would desire the HHS Title 42 pay authorities. Over the 

last decade, HHS and three of its Public Health Service agencies have expanded the use of209(f) 

special consultants to convert individuals from continuing, full-time federal positions into special 

consultants to perform the same official duties but at much higher salaries. According to HHS 

data provided to the Minority Committee staff in August 2008, since 1999, 1,246 employees 

have been converted from the federal Civil Service to 209(1) status. Due to these conversions, 

HHS spent $19,064,942 in increased salaries, an average increase in armual salary of$15,301 per 

conversion. Further, since January 1, 1999, 1,858 individuals have been hired directly under 

209(f). As mentioned previously, the salaries of many of these individuals are far greater than 

would be paid under the General Schedule. For example, as of August 2008, HHS was paying 

378 individuals armual salaries above Executive Levell ($191,000), with 323 at the National 

Institutes of Health (NIH), 19 at the Food and Drug Administration (FDA), 35 at the Centers for 

Disease Control and Prevention (CDC), and one at the Office of the Secretary (OS). 
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Letter to the Honorable Kathleen Sebelius 

Page 3 

Most senior scientific officials at NIH, FDA, and the CDC earn salaries well in excess of 

the salary of the Vice President. For example, according to publicly available 2008 Office of 

Personnel Management data, at least seven Institute Directors at the NIH received $300,000 or 

more in base salary, up to $335,000 in annual salary. One of the justifications for HHS 

expanding 209(f) authority was to facilitate the Department's ability to retain scientists through 

higher 209(f) salaries that would not otherwise be possible due to Civil Service compensation 

restrictions. 

In addition, individuals receiving 209(f) salaries can also get retention bonuses. As of 

August 2008, HHS reported to Minority Committee staff that HHS and HHS agencies had paid 

$6,392,683.49 since 1999 in retention bonuses to individuals getting 209(f) pay (208 retention 

bonuses affecting 76 employees - an average of $30,845 per bonus). 

In light of our concerns over use by EPA ofHHS authority under 42 U.S.C. §209, we 

respectfully request HHS to provide technical assistance in the interpretation of its statute and 

that responses in writing to the following questions be provided within two weeks of the date of 

this letter: 

1. Is the EPA part of the Public Health Service? Does the meaning of "Surgeon 

General" in 42 U.S.C. §209(g) include the Administrator of the EPA? What agencies 

outside ofHHS are included in the definition of the "Public Health Service" andlor 

have 209(f) or (g) authority? How are such determinations made? Since EPA states it 

is relying on HHS statutory authority under 42 U.S.C. §209, must EPA in tum rely on 

HHS' administration of the provision or can EPA issue its own implementing 

regulations? 

2. If the Title 42 pay authorities can be applied to the EPA, could they be applied to any 

federal department or agency merely by asserting 42 U.S.C. §209 authority in that 

department's or agency's appropriations law? As a matter of statutory interpretation, 

is it correct that 42 U.S.C. §209(f) is not limited in application to scientist employees? 

As a matter of statutory interpretation, is it correct that there are no salary caps 

imposed by either 42 U.S.C. §209(f) or 42 U.S.C. §209(g)? 

3. Did HHS delegate authority or authorize the EPA to appoint and compensate 

individuals under 42 U.S.C. §209(f) andlor 42 U.S.C. §209(g)? IfHHS did delegate 

this authority to EPA, what is the legal basis of this delegation? 

4. Did HHS (including any HHS agencies) provide any kind of assistance to EPA 

related to special pay authorities under 42 U.S.c. §209? If so, please explain in detail 

the nature of the assistance, the dates such assistance was provided, and the names 

and titles of the officials who provided such assistance. Did any of this assistance 

involve any legislation related to special pay authorities under 42 U.S.C. §209? 
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Letter to the Honorable Kathleen Sebelius 

Page 4 

We appreciate your attention to this important issue. Please do not hesitate to contact the 

Minority Committee staff at (202) 225-3641 if you have any questions about this matter. 

Sincerely, 

9LJ~ Ranking Me er 

Subcommittee on Oversight and Investigations 

cc: The Honorable Henry A. Waxman, Chairman 

The Honorable Bart Stupak, Chairman 

Subcommittee on Oversight and Investigations 
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EPA Title 42 Operations Manual Appendix 6 

TITLE 42 VOLUNTARY CONVERSIONS AND EMPLOYMENT NOTICE 

I, (employee name), voluntarily request the conversion from my current civil service position 

under Title 5 U.S.C. to a position under Title 42, Sections 209(t) or 209(g), within the 

Environmental Protection Agency, Office of Research and Development, 

(Laboratory/Center/Office name). 

Specifically, I understand that I am converting from my current position of (position title, series. 

grade, step), with an annual salary of (salary) to the position of (position title, series), with an 

annual salary of (Title 42 salary). I understand that I will be assigned to a position description 

for the position I am accepting. 

I understand that the Title 42 appointment does not represent a permanent position within the 

Federal service. I understand that this appointment is for (lime period) and may be extended in 

one to five-year increments, subject to appropriate reviews and approval. 

I understand that as a Title 42 employee, I will be placed on a performance plan appropriate for 

my position. J understand that my performance will be formally reviewed at least twice a year. 

I understand that pay increases will be determined by, among other things, my performance, the 

Title 42 total compensation ceiling, and the availability offunds. I further understand that the 

Title 42 appointment may be terminated prior to the expiration date ofthe appointment for any 

lawful reason. 

I understand that as a Title 42 employee, I will retain any reinstatement eligibility to which I am 

currently entitled. If! wish to return to the civil service under Title 5 in the future, I understand 

that I must apply and be selected for the position. 

I hereby acknowledge and accept the terms and conditions above: 

Employee Name Date 
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ctCongrc£)£) of tbc Wnttcb .i>tatc£) 

aalSbington, :mE: 20510 

The Honorable Kathleen Sebelius 

Secretary 

February 3, 2010 

U.S. Department of Health & Human Services 

200 Independence Avenue, S.W. 

Washington, D.C. 20201 

Dear Secretary Sebelius; 

We are requesting the Department of H .Ith and Human Services, through the Office of Refugee 

Resettlement (ORR), to provide add .onal financial assistance to school districts that are 

currently seeing an influx of Haitiru refugees, Haitian immigrants and Haitian-Americans 

returning to the U.S. after the recent e, rthquake. Due to these unique circumstances, there is a 

need for immediate emergency funding for local school districts, and a funding increase to the 

School Impact grant progrrun, above thr Sl5 million allocated in the Administration for Children 

and Frunilies FYII Congressional Justi ,cation. 

As you are aware, the earthquake on January 12, 20 I 0 devastated the country of Haiti. Over one 

hundred thousand have been confirmed killed, countless buildings have been destroyed, and 

frunilies tom apart. The conditions in Haiti have made it impossible for Haitians to retum to 

their home country, prompting U.S. Secretary of Homeland Security Secretary Napolitano to 

respond to our request and grant Temporary Protected Status (TPS) for those already in the U.S. 

Along with the large number of Haitians who will remain here under TPS, many HaitianAmericans are returning to the U.S., as well as Haitian-Americans trying to bring minor children 

to the U.S. who may not have frunily left to take care of them in Haiti. In the coming weeks and 

months, there is an expectation that a great number of refugees will arrive in the U.S., many who 

will relocate near friends and family in New York. It is our responsibility to assist our local 

school districts to educate these newly arrived refugees, and provide them with the proper 

resources so they may fully integrate into our society. 

As the Congressman and Senator representing a large concentration of Haitians and HaitianAmericans, local school district superintendents in Rockland County have already made clear the 

need for additional financial assistance required at this time. In addition to the Refugee School 

Impact grant progrrun currently offered by ORR, there is a strong need for an emergency grant 

progrrun for local school districts outside of the limited Refugee School Impact grant progrrun, 

which uses a two year project cycle and backward looking refugee data. It is shocking to note 

that during FYI0, FY09, FY08, and FY07 the funding for the Refugee School Impact grant 

progrrun has not increased over $15 million. Within the Administration for Children and 

Frunilies FYll Congressional Justification, a request is made again for only $15 million for this 

grant progrrun. However, an additional $25 million was allocated for Social Service grant 
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programs to assist Emerging Populations programs, which does not include assistance for school 

districts. We support fully funding President Obama's FYll budget request to fund the Social 

Services programs of the ORR at $253 million, an increase of $25 million above FYlO. 

However, we strongly encourage you to use some of this additional funding to implement a one 

time emergency grant program for the most heavily affected school districts and increase the 

funding above $15 million Refugee School Impact grant program. 

In today's tough economic times, the vital services provided by local school districts to refugees 

will be stretched even thinner without additional financial support from the Office of Refugee 

Resettlement, particularly through the Refugee School Impact grant program. 

As members of the House Foreign Affairs and Senate Foreign Relations Committees and 

Congressman Engel as senior member of the Energy & Commerce Health Subcommittee, we 

would like to thank you for the assistance that you are already providing to states, localities, and 

school districts in providing needed resources for newly arrived refugee populations. We look 

forward to working with you in providing additional financial resources to assist our local school 

districts and communities with the resettlement of Haitian refugees. 

[~ L.J;~ 

Eliot L. Engel 

Member of Congress 

Sincerely, 

Kirsten Gillibrand 

United States Senator 

cc. Director Eskinder Negash, Office of Refugee Resettlement 
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:vhlrch L 201 U 

Tht: Honorable Kathh:~n Sebelius 

Secretary 

of I kallh and f hllll,i!1 Scrdccs 

llumphrc~' Building 

200 Independence r\\\~nw .. '. S\\' 

\Vashington. 1)(' 202(} 1 

D.:ar l\:bJam Sccrdmy: 

('hank you ft)j" appcuflng h ... fore th~ Commith:e on Fntrgy ~HHJ COmn1Cf(C on -t 

:2010, <.H the hl.'aring r.:garding the Pre~idc11l's 1'15C31 yC~jr 2011 Bl1J~d the D\,.'panm:..:nt 

1 kalth and 1 JU111un S..:rvic,.:s. 

Pursuant to the Cummith.:c·::,: Rule:;;, attached ~m.' \-Hlth:n questions !~)f th-: J\,'Ct1rd dirl.:'ctcd 

to :ou [1'0111 cl'fwin l\kmhc]'s of the Cummith:t.:. In pn.:pnrin,:; ::Clur answers, pk~IS:: addn:s::;:: l\Ur 

rCE\ponsc to the J\iemhef VdlO suhmith::d the qu('s!10ns. 

Please proyide YOUl 

2 J 25 (>( the Ru> burn House 

Altlchml.!nt 

J kn!) .. \. \\'<.l).,man 

C'hairman 
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The Honorable Bobby L. Rush 

1. Madame Secretary, I do notice some substantial iuereases in the proposed 

budget in certain key areas that serve low-income populations and communities. 

I would like to learn more about how increases in priority spending in the 

budget addresses childhood obesity, funding for community health centers, and 

minority health care disparities. 

Improving health outcomes for Americans through a broad-range of programs and 

targeted efforts including. reduction of childhood obesity, improving access to high 

quality care through community health centers. and eliminating racial and ethnic minority 

health and healthcare disparities is a priority for the Department of Health and Human 

Services. 

Childhood Obesity 

The President's 2011 Budget Request for the Centers for Disease Control and Prevention 

includes increases for two programs that help address childhood obesity. 

First, the President's request includes $61,520,000 for School Health in FY 2011. an 

increase of$3,875.000 above the FY 2010 Omnibus. With the additional funding, CDC 

will support local education agencies through training and technical assistance to assure 

continued coordination of efforts with state health departments. This investment will 

increase CDC's ability to reach more children and youth through quality school health 

programs. 

This funding will support efforts to combat childhood obesity by focusing on strategies 

aimed at: 

• Increasing the number of school districts that prohibit junk foods in vending 

machines, school stores, canteens, or snack bars; 

• Increasing the number of states with policies to improve nutritional quality of 

competitive foods in schools; 

Increasing the percentage of high school students who attend physical education 

class daily; 

• Increasing the number of states that have multi-component policies that support 

quality physical education; 

• Increasing the number of states that require elementary schools to provide 

students with regularly scheduled recess; and 

• Increasing the number of schools that have policies prohibiting tobacco use on 

school property. 

Second. the President's 2011 Budget also includes a request for $20 million to fund up to 

10 cities with populations over 1.5 million people. to implement evidence-based 

programs targeting three public health priorities obesity prevention and control, tobacco 
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prevention and control: and chronic disease detection and management. The initiative 

will impact childhood obesity through the following key elements: 

• Promoting healthy communities through policy, environmental, and systems 

changes that support people to be more physically active. eat a healthy diet, and 

maintain a healthy weight. Examples of interventions that would impact 

childhood obesity include: 

o Improving access through reduced-cost fruits and vegetables; and 

o Changing the local infrastructure to support walking and bicycling. 

• Promoting healthy schools that enable students through policies, curricula, and 

health services, to be physically active. eat a healthy diet, and maintain a normal 

weight. Examples of interventions that would impact childhood obesity include: 

o Strengthening school-based physical education; 

o Increasing opportunities for students to engage in physical activity; and 

o Ensuring student access to healthy food and beverage choices. 

Community Health Centers 

The FY 2011 Budget Request also includes $2.479 billion for the Health Center Program, 

an increase of$289 million over the FY 2010 Appropriation. The request includes $249 

million to continue providing services to an estimated 2.1 million health center patients 

served under the Recovery Act, I million of which are uninsured. This funding level will 

support the development of approximately 25 new access points, expanding access to 

primary health care services to an estimated 150,000 additional health center patients. 

The requested increase also includes $25 million for substance abuse/behavioral health 

grants. Overall, the increase in the Health Center Program funding level will support the 

goal of increasing access to care for our Nation's most vulnerable populations and the 

medically underserved. 

Minority Health and Health Disparities 

The President's FY 2011 Budget request for the Office of Minority Health (OMH) is $58 

million, which represents an increase of$2 million. This funding includes support for 

demonstration programs that support community-level strategies to engage racial and 

ethnic minorities in health care and ultimately reduce health disparities. a national 

campaign called "A Healthy Baby Begins with You" that targets elimination of health 

disparities in infant mortality among African Americans in particular, and 

implementation of a National Plan for Action to end health disparities. This National Plan 

for Action is near completion and I look forward to sharing more information about this 

plan in the coming weeks. 

2. I am concerned about the very modest increase to the Office of Minority Health 

of only $2 million. Can you discuss any reasons why this particular office did not 

see as much improvement in the budget in relation to the large focus placed on 

eliminating health disparities during the current heaIthcare reform process? 

2 
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There has been no lack of focus or attention or interest in closing the gap in health 

disparities, which continue to be alarming and appalling. The new Assistant Secretary of 

Health. Dr. Howard Koh. also takes the issue of disparities very seriously. The Office of 

Minority Health (OMH). formerly located within the Office of Public Health and 

Science, has been funded through the General Departmental Management (GDM) 

appropriation. 

The just-enacted Patient Protection and Affordable Care Act (PPACA) relocates OMH in 

the Office ofthe Secretary, with the Deputy Assistant Secretary for Minority Health 

reporting directly to the Secretary. In addition, the PPACA establishes Offices of 

Minority Health in six HHS agencies (CDC, HRSA, SAMHSA. AHRQ, FDA and CMS). 

The Secretary must designate funds for those offices out of the appropriated funds for 

each agency for carrying out the activities of each agency Office of Minority Health. 

OMH is leading the development and implementation of the National Plan for 

Action which focuses on the increased awareness of the significance of health disparities, 

their impact on the nation. and the actions necessary to improve health outcomes. In 

addition. among the programs and activities funded in GDM, the OMH request is a 

3.5 percent increase over FY 2010, while the rcquests for much of the organization are 

either level-funded or a decrease for FY 2011. 

Additionally, through the leadership of the National Center for Minority Health and 

Health Disparities. the National Institutes of Health (NIH) continues to advance minority 

health and the elimination of health disparities, thereby improving health outcomes and 

prolonging lives. The President's FY2011 Budget request for the NCMHD is $219 

million. an increase of$8 million. The NCMHD leadership assures effective trans-NIH 

coordination of biomedical and behavioral research activities to address the diseases and 

conditions that disproportionately impact minority health and other health disparity 

populations. In their own right. NCMHD's research programs have focused on cutting 

edge translational and trans-disciplinary research that links the biological and nonbiological determinants of health and have led to discoveries that have contributed 

significantly to the understanding of racial and ethnic differences in disease conditions. 

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The Honorable Lois Capps 

Global Health 

In your testimony, you noted that global health programs, including those that 

address maternal and child health, will rcceive an increase of 16 million dollars. The 

budget also includes several ambitious targets to be reached by 2014, including 

reducing maternal mortality by 30%. However, even in these modern times, women 

in the U.S. continue to die during pregnancy or childbirth. 

1. Can you discuss any efforts being made domestically to reduce our maternal 

mortality numbers and can you also mention any efforts to address disparities 

among different racial and ethnic groups? 

The rate of maternal deaths in the U.S. is a concern that the Department of Health and 

Human Services takes very seriously. The Maternal and Child Health (MCH) block 

grant, administered by HRSA, provides access to comprehensive prenatal and postnatal 

care for women. The grant also supports federal and state partnerships that provide 

maternal health services to more than 2.6 million women. HHS also provides funding 

through the Healthy Start Program, which provides services tailored to the needs of highrisk pregnant women, infants and mothers in geographically, racially. ethnically and 

linguistically diverse low-income communities. The Healthy Start program helps ensure 

that pregnant women have ongoing sources of primary and preventive healthcare and that 

their basic needs are met. Pregnant women are linked to a medical home and followed, at 

a minimum. from entry into prenatal care through two years after delivery. 

The Centers for Disease Control and Prevention also play an important role in HHS' 

work in this area. The cornerstone of CDC's efforts to understand and reduce maternal 

mortality is surveillance. The Pregnancy Mortality Surveillance System (PMSS) is 

CDC's primary surveillance system to be Iter understand the number, racial and ethnic 

health disparities, and geographic spread of deaths related to pregnancy in the United 

States. The PMSS is a collaboration between CDC and states' Divisions of Vita! 

Statistics. Medical epidemiologists inspect all of the information found on death, birth, 

and fetal death certificates to make a reasoned medical decision about the cause and 

timing of death, the outcomc of the involved pregnancy and the relationship oCthe 

woman's death to her pregnancy. 

Regarding applied public health research, CDC is building maternal and child health 

(MCH) epidemiology and data capacity at the state. local, and tribal levels to effectively 

use epidemiologic research and scientific information to improve the health of women, 

children, and families. The MCH-EPI program design allows for expertise and assistance 

with priority projects such as: maternal and infant mortality and morbidity, flu 

preparedness, and tobacco cessation in pregnant women. The budget request for FY 

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2011, will support 14 MCI! assignees in states. In addition, CDC epidemiologists will 

continue to provide technical assistance to all states including state maternal mortality 

review committees. 

CDC is working with professional healthcare organizations, such as the American 

Congress of Obstetrics and Gynecology (ACOG), to educate practicing physicians 

regarding evidence-based interventions to reduce maternal mortality. Work with ACOG 

also includes highlighting new and emerging issues in maternal health. 

In response to the significant disparities in infant mortality and maternal deaths among 

African American women, the Office of Minority Heath launched the "A Healthy Baby 

Begins with You" campaign. The campaign is a call to action and seeks to educate 

women, men, family members, health professionals, and others about the significant 

disparities for African Americans, and engage stakeholders in addressing the problem. 

The "A Healthy Baby Begins with You" campaign also has a Preconception Peer 

Educator Program (PPE) that focuses on maintaining good health throughout a lifetime, 

but in particular before a woman becomes pregnant. The goals of the PPE program are 

to: 

I. Reach the African-American college-age population with targeted health messages 

emphasizing preconception health and healthcare. 

2. Train minority college students as peer educators. 

3. Arm peer educators with evidence-based materials, activities, and education support 

that assists their efforts to inform peers in college and in the community at large about 

being healthy. 

Tonya Lewis Lee, wife of film-maker Spike Lee, is the National Spokesperson for the 

campaign which has provided education and contributed to PPE and awareness events all 

across the country. These efforts are reinforced by OMH demonstration projects within 

its Community Partnership program that seek community-based approaches to improving 

health and health outcomes. 

Climatc Changc 

Climate change is an emerging public health issue. It is expected to worsen many 

health problems, including weather-related illness and injury, and infectious 

diseases. 

2. Secretary Sebelius, what is being done across the Department to prevent and 

prepare for the health effects of climate change? 

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Many state and local health officials do not believe they currently have the expertise 

or capacity to address climate change. 

The Department of Health and Human Services is participating in the Interdepartmental 

Work Group on Climate Change and Health reeently established by the U.S. Global 

Change Research Program. Within HHS, I have designated Assistant Secretary for 

Health Howard Koh to serve as the Departmental lead on elimate change. In this 

capacity, Dr. Koh has convened an HHS Climate Change and Health Working Group 

comprised of representatives from the agencies and offices within HHS that have climate 

change portfolios. This group serves to enhance Departmental communication and 

collaboration on climate change activities. 

The Center for Disease Control and Prevention (CDC) is doing significant work to 

address the effects of climate change. Congress appropriated $7.5 million to establish 

CDC's Climate Change Program in FY 2009. This funding supported pilot projects to 

conduct needs assessments in five states and six localities to enhance state climate change 

expertise and capacity, to support workforce development programs, to fund applied 

research grants, to conduct cross-agency coordination of climate change efforts, and to 

incorporate climate change into existing agency work. In FY 2010, CDC will improve its 

support to state and local health departments by using a two-tiered approach: 

1) Expanding climate change capacity in state and local health departments to identify 

what the health impacts will be and which populations will be most threatened. 

2) Expanding support in health departments that know their climate change needs and 

their vulnerable populations and now need to develop a strategy to protect those 

communities. 

This funding will be made available to 10 to 12 state and local health departments for 

three years. CDC's assistance will: 

• Provide technical assistance, training and decision tools to help state and local 

health officials conduct needs assessments to inform strategic planning; 

• Conduct investigations to better understand the relationship between climate 

change and adverse human health outcomes; 

• Translate surveillance and research on climate-related health impacts into 

methods and best practices to inform state and local health practitioners; and 

• Improve coordination and integration of climate change aeross CDC. 

The National Institutes of Health (NIH) support research on a variety of health outcomes, 

ranging from heart disease to malaria, whieh may be affected by changes in elimate. In 

addition, there is a growing portfolio of research focuscd more specifically on improving 

our ability to assess the health consequences of climate change. For example, as part of 

the Ameriean Recovery and Reinvestment Act of2009, NIH funded five research 

proposals that will model heat morbidity and mortality, respiratory and cardiovascular 

effects of wildfires, asthma, skin cancer, salmonellosis, cholera, and diseases associated 

with climate-induced population movement. 

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Other agencies within HHS are working on this issue as well. The Center for Food 

Safety and Applied Nutrition (CFSAN) of the Food and Drug Administration is working 

to characterize the risks to the food supply in face of changing climate conditions. The 

Office ofthe Assistant Secretary for Preparedness and Response (ASPR) works with 

partners in the Federal and State governments, the private sector, and communities to 

strengthen the Nation's ability to prepare for, protect against, respond to, and recover 

from a wide range of catastrophic possibilities, including those that are potentially related 

to climate change. The Office of Global Health Affairs (OGHA) plays a key role in 

interacting with multilateral organizations and other countries on the topic of climate 

change. 

3. How else can the Department and CDC support state and local heath officials 

and provide them with the technical assistance and expertise they need to 

address the health effects of climate change? 

In addition to all of the programs mentioned above, the CDC will continue to fund state 

and local health departments to address the impact of climate change, and will continue 

to invest in workforce development and training programs for state and local officials. I 

would like to continue working with you and your colleagues in Congress on this issue. 

Together we can consider ways that current programs could enhance our efforts to 

address the impacts of climate change, or explore new ideas, such as enhancing applied 

research to provide state and local officials with the best scientific information on which 

to base actions and policy. 

Health IT 

I'm very excited by the prospects of widespread Health Information Technology 

adoption and applaud the increased investment both through the Recovery Act last 

year and now in this year's budget. But I have heard concerns from some hospitals 

and physicians about the timeline and requirements for adoption. For example, 

some of the timeframes for meeting the definition of meaningful use are difficult to 

achieve before the penalties begin. Further complicating this is the lack of finalized 

standards put forth by the HIT Coordinator. 

4. Are you aware of the concerns of the medical community regarding how soon 

requirements for assuring "meaningful use" must be achieved? And what is the 

Administration doing to work with providers to alleviate their concerns so that 

they may be eligible for incentive payments sooner? 

The Administration has now issued draft regulations for all three components, 

including Notices of Proposed Rulemakng (NPRM) for meaningful use and a 

certification process, and an Interim Final Rule for certification criteria and standards. 

We believe that this will enable sufficient time for motivated vendors and providers to 

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achieve Stage I meaningful use in 20 II and 2012. 

The meaningful use (MU) requirements have been published in draft through an 

NPRM, and are currently in a public comment period. Commenters will provide 

feedback on the requirements and other areas of the program. Wc will carefully 

review the comments received and may make adjustments depending on what we hear 

from the public. 

Some providers may need more assistance in meeting the standards that have been set, 

and Congress wisely anticipated this need by creating the Regional Extension Centers 

(REC) grants program in the HlTECH Act. The regional centers will offer technical 

assistance, guidance, and information on best practices to support and accelerate 

health care providers' efforts to become meaningful users of Electronic Health 

Records (EHRs). The REC program will establish an estimated 70 regional centers, 

each serving a defined geographic area. The regional centers will support at least 

100,000 primary care providers. through participating non-profit organizations, in 

achieving meaningful use ofEHRs and enabling nationwide health infonnation 

exchange. 32 of the REC grants were awarded in mid-February, and the remaining 

REC grants were awarded on April 6,20] O. 

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The Honorable Tammy Baldwin 

1. In terms of your new proposal to create a "Health Prevention Corps," which 

includes a focus on laboratory professionals, is there anything Congress needs to 

do to support you in this area, or can you proceed with this initiative? I see your 

budget for FYIl allows for a one year planning phasc; how long do you expect it 

will take the CDC to enlist Corps members? How will this new Health 

Prevention Corps interact with current workforce developmcnt and fellowship 

programs funded by the CDC? 

The Health Prevention Corps (HPC) is a new initiative in the FY 2011 President's 

Budget, which will recruit new talent into service in disciplines with known shortages 

such as epidemiology, environmental health. and laboratory science. CDC is currently 

assessing whether it has sufficient authority to proceed with this initiative under existing 

Public Health Service Act authorities. 

This proposal is modeled after CDC's existing, successful fellowship programs and will 

require a similar level of effort to ensure successful program implementation. The timing 

of recruitment and placement of the first class of Health Prevention Corps participants 

will take approximately one year from the receipt of funding for the program. 

The majority of CDC's current fellowship programs arc designed for candidates who are 

studying for or who have completed a master's or doctoral degree. The Health Prevention 

Corps complements these fellowships and targets a largely untapped market-- those at the 

entry-level who have recently completed a bachelor's degree in sciences related to 

epidemiology, environmental health, or laboratory science-to try to draw them into 

public health careers. The Health Prevention Corps is an important effort for CDC to 

attract new talent to public health. 

2. I was pleased to see that your budget justification states that the CDC will used 

increased funds in the area of Prevention, Detection and Control of Infectious 

Diseases in order to build the workforce capacity, laboratory facilities and skills 

sets within state and local health departments. However, I see that the 

Epidemiology and Laboratory Capacity (ELC) program is flat funded. Could 

you explain how the ELC and other CDC initiatives will intcract to support state 

labs? 

CDC has invested in creating a flexible and adaptable infrastructure to be able to identify 

and respond to emerging infectious diseases. This infrastructure creates the core capacity 

needed at the state and local level to detect and control infectious disease threats by 

building a sufficient and competent workforce, laboratory facilities and capacities, and 

epidemiologic, statistical, and communication skills. This infrastructure serves as a 

foundation for many of the infectious disease activities supported by CDC and enables 

state and loeal health departments to build capacity and address infectious diseases in a 

more coordinated and efficient way. 

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The Epidemiology and Laboratory Capacity (ELC) for Infectious Diseases cooperative 

agreement program builds epidcmiology, laboratory, and information system capacities 

in all SO states, six local health departments, and two territories to assist frontline state 

and local programs to monitor, detect, and respond to new and emerging infectious 

diseases. For FY 20 I 0, planned funding for the Epidemiology & Laboratory Capacity 

program is approximately $S5 million, which includes $S million in American Recovery 

and Rcinvestment Act funds. However, because this program serves as a mechanism to 

provide grants to health departments for epidemiology and laboratory capacity activities 

funded by other CDC initiatives (i.e. food safety, antimicrobial resistance, influenza, etc.) 

the total ELC funding for FY 2010 will not be finalized until the end of the fiscal year. 

Similarly, total funding for FY 2011 for the ELC grant program will be available at the 

end of that fiscal year as well. The FY 2011 Budget includes an increase of$20 million 

for emerging infectious diseases, which will support surveillance, and infectious disease 

laboratories and other key state and local health programs. 

With this program, CDC will: 

Support and enhance state and loeal ability to detect, prevent, and control a broad 

spectrum of important infectious diseases including influenza, foodborne disease, 

vaccine preventable infections, and vector-borne diseases; 

Build infectious disease public health workforce capacity by providing reagents to 

the states, as well as laboratory support and laboratory training; 

Build and enhance state/locallaboratory capacity by providing funding to 

purchase and maintain state-of-the-art laboratory technology, including equipment 

for molecular assays such as pulsed field gel electrophoresis (PFGE), reverse 

transcription-polymerase chain reaction (RT-PCR); and 

Implement cutting-edge information technology solutions that support rapid, 

secure, and accurate information exchange; diverse types of information; and 

linking of information among local, state, and federal public health agencies, 

healthcare facilitics, and laboratories. 

3. I am also pleased to see the increase for the budget for health statistics, and that 

you will use this increase to improve the National Health Interview Survey. As 

you know, I have worked with colleagues over the past few years to increase our 

collective knowledge about health disparities, including LGBT health disparities. 

With the $18 million increase in your budget, can you commit to adding a 

demographic question on the LGBT community to the National Health 

Interview Survey? 

There is a compelling need for better information on health disparities, including the 

health ofLGBT popUlations. To continue to improve information on health disparities, 

high quality data from a national, representative sample that is large enough to allow 

researchers to conduct detailed analyses of the health of popUlations of interest is needed. 

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The National Health Interview Survey (NHIS) obtains data allowing for analysis of 

health disparities and is a potential vehicle for collecting data on LOBT populations. 

Prior experience with asking questions about sexual orientation in other national surveys 

has shown that it is essential to address the methodological issues that could impact this 

data collection. Pilot testing of the questions is also important to ensure that valid and 

useable data are obtained and plans have been developed to undertake this research and 

testing. 

The FY 2011 budget request proposes increased health statistics funding to be directed to 

specific improvements in the NHIS as well as the National Ambulatory Medical Care 

Survey and the National Vital Statistics System. The proposed increase for the NHIS is 

intended to increase the sample size. This will allow HHS to obtain state and community 

estimates for most states and for large metropolitan areas. It will also provide for 

improved disparities data in general. We have not yet specifically identified funds for the 

methodological and pilot studies needed to add questions on the LOBT population or to 

incorporate the questions into the ongoing NHIS, but we are continuing to explore 

opportunities. 

This department is committed to improving the health of all disparity populations, 

including thc LOBT population, and will continue to pursue options that will allow us to 

expand data collections to achieve this objective. 

4. I have been working with NIH to learn what the Institutes are currently doing in 

terms of research into LGBT health disparities. I note that your proposed 

budget included an increase of nearly $8 million for the Center that studies this 

issue. I'm aware that the 10M is undertaking an 18-month review of the state of 

the science on LGBT health research, but what work can NIH undertake in the 

meantime to demonstrate its commitment to tackling LGBT health disparities? 

NIH is supporting a number of important studies to advance the health ofLOBT 

populations. In FY 2009, the NIH funded 272 grants, at just over $239 million. These 

figures do not represent the full extent of the funded research related to LOBT health, 

however. because they include only those grant applications that specifically identified 

LOBT populations. 

In addition to research funded by the National Institute of Allergy and Infectious 

Diseases targeting HIV/AIDS. the following are examples of the important research 

efforts underway in other areas: 

• The National Institute on Drug Abuse is supporting research on the role of social 

networks in the sexual health of lesbian women to ascertain factors that may otTer 

protection against sexually transmitted diseases; 

• The Eunice Kennedy Shriver National Institute of Child Health and Human 

Development (NICHD) continues its long history of research on how gender 

characteristics develop over time in girls with congenital adrenal hyperplasia. a 

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genetic condition that involve excessive or deficient production of sex steroids that 

can alter the development of primary or secondary sex characteristics in some 

affected infants, children, or adults. 

• The National Cancer Institute is examining the molecular epidemiology of HIV 

and/or human papilloma virus in men to improve cancer screening accuracy. 

• The National Center on Minority Health and Health Disparities is conducting 

research to identify best practices in reaching LOBT popUlations with health 

messages through a project on strategies to increase minority populations' 

participation in internet HIV prevention activities. 

The NIH recognizes that it is critical to involve young investigators in these areas of 

research. The NICHD is funding research infrastructure for a training program for preand post-doctoral LOBT researchers, and the National Institute on Aging provided 

funding that allowed an early career investigator to move into HIV / AIDS research. 

NIH's budget proposal included a request for additional funding for NICHD's Center for 

Population Research. The funds would help support additional research on reproductive 

health, prevention of sexually transmitted diseases, and behavioral and social sciences 

research, issues that are also important to LOBT health. 

In 2009, the National Institutes of Health (NIH) received inquiries from both Members of 

Congress and the research community about the range and status of currently funded NIH 

research on lesbian, gay, bisexual and transgender (LOBT) health, including research to 

identify important sexual orientation and gender identity-related health disparities. 

Noting that gaps in knowledge and research do exist, the NIH commissioned the Institute 

of Medicine to conduct a study and submit a report on "the state of knowledge regarding 

LOBT health, health risks and protective factors, and health disparities," with a particular 

focus on "the developmental process from childhood across the life span, in the context 

of family and social networks," and the effects of age, race and ethnicity, socio-economic 

status and geography. The [OM is charged with identifying research gaps, improved 

methodological approaches, opportunities (including training needs) and priorities for 

conducting research with the LOBT populations. The report is expected in the spring of 

2011. 

While many challenges remain to conducting research in LOBT populations, the NIH is 

looking forward to the 10M report and continuing to work with the research community 

to address the research gaps and opportunities in this area. 

5. I was concerned to see that the hemophilia program at CDC's Blood Disorders 

Division was zeroed out in the President's Budget, because this program 

provides critical support for hemophilia treatment centers which provide an 

excellent standard of care for people with bleeding disorders in Wisconsin and 

across the country. I see that a new "Public Health Approach to Blood 

Disorders" account was added. With the elimination of the hemophilia 

program, will CDC maintain its commitment to hemophilia treatment centers 

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and the other hemophilia outreach and education programs currently 

supported? 

CDC's FY 2011 request includes a proposal to realign the Blood Disorders program. 

Realigning CDC's approach to blood disorders will allow the Agcncy to truly address the 

public health problems facing the entire population of people affectcd with blood 

disorders. Support for Hemophilia Treatment Centers (HTC) will be included in this new 

initiative. We are not eliminating the HTC program; we are, instead, incorporating the 

program into a broader approach. Program activities are currently under review and will 

be considered for expansion or refocus to ensure our efforts are efficient, effective, and 

provide a measurable public health impact for the population of persons with blood 

disorders. 

FY 20 II resources will support a portfolio of activities that include work to improve 

access and application of scientific information about blood disorders, to increase 

collaboration between members within the blood disorders community; and to advance 

science through surveillance and its application to public health efforts. 

6. I know that the Administration is proposing to increase ADAP spending by $20 

million for fiscal year 2011, but I fear this is not enough - and not soon enough 

to help states in crisis now. What are we going to do in the meantime to get 

medications to these people who need them now? Would you support emergency 

funding for the ADAP program this year? 

As you know, ADAP is a critical program that helps provide access to medications for 

people with HIV IAIDS who have limited or no prescription drug coverage. We share 

your concern for getting medications to people in need now. The Health Resources and 

Services Administration (HRSA) is providing technical assistance to States to help them 

maximize all possible funding sources for these medications. 

HRSA is also working with states to assure that they are providing assistance to clients 

who have no other way to pay for their drugs, such as by helping states obtain access to 

medications for their clients from pharmaceutical manufacturer's Patient Assistance 

Programs (PAPs). If additional funds are made available to address the waiting lists in 

states, we will work with the affected states to assure that these funds are used 

immediately to provide the medications to people in need. 

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The Honorable Jim Matheson 

Secretary Sebelius, I want to share with you some priorities that I hope your 

department will continue to work with me on in the coming months. 

I. Lead in Plates 

As you reference in your testimony, the Department has made a significant 

commitment to securing our nation's food supply by increasing the budget for food 

safety efforts by $327 million. I too support this goal and the hard work of my 

colleagues on this committee to pass important legislation last year. 

As you know, the Food and Drug Administration regulates the lead levels of ceramic 

ware and has set acceptable levels of lead allowed in ceramic ware used in food 

preparation and currently has a safety warning designating ceramic items not 

intended for food use. However, thcrc is currently no label alerting consumers that 

the ceramic products they purchased for food use/preparation (i.e. plates, cups, etc) 

contain any lead. 

I sponsored an amendment that requires labels on plates and packaging for 

ceramicware/cookware containing lead for an intended functional purpose and sets 

up an educational program on its website to further educate consumers about these 

issues and about safe practices. 

1. Can I count on your office to continue to work with me to ensure that these 

measures are included in a final food safety bill and that you stand with me to 

better protect children and families from the potential problems caused by 

incorrectly fired ceramic ware and lead leaching from ceramics? 

I appreciate and share your concern about the health hazards posed by lead in 

ceramicware. To protect consumers, the Food and Drug Administration at HHS has 

established maximum limits for leachable lead in ceramicware. Pieces that exceed these 

limits are subject to recall or other enforcement action. such as refusal of admission into 

the United States for imported goods. These limits are based on how a piece of 

ceramicware is used. the type and temperature of the food it holds, and how long the food 

stays in contact with the piece. For example, cups, mugs, and pitchers have the lowest 

action levels because they can be expected to hold hot foods. e.g .. coffee, or in the case of 

pitchers, to hold foods longer. allowing more time for lead to leach out of the glaze. 

Commercial ceramicware manufacturers typically employ strict manufacturing controls 

to ensure that their ceramicware meets FDA's requirements. However, small potters 

often cannot effectively control their manufacturing processes to meet FDA's 

requirements for leachable lead. Therefore. FDA recommends that consumers who 

purchase ceramicware that is not commercially made should ensure that the ware is made 

using a non-lead glaze. 

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We share your interest in educating consumers about these hazards and would be happy 

to continue to work with you on this important public health issue. 

II. Comparative Effectiveness 

Secretary Sebelius, you've been clear that the goal of com parative 

effectiveness research is to improve the information available to a patient and his or 

her provider so they can make informed decisions about care. Some opponents of 

CER have raised concerns about the research may be used for other means. 

2. As a representative of innovative teaching and research institutes, my providers 

want to know how will the Department assure that patients and providers have 

input into the research process? What steps do you see taking to achieve this? 

In order for Patient-Centered Health Research to be successful, it must be meaningful to 

patients and their health care providers, which means that both groups must be involved 

in every aspect of the research. The Agency for Healthcare Research and Quality 

(AHRQ) has many mechanisms in place to insure that stakeholder involvement occurs 

throughout the research process, which helps to ensure the relevance of the research to all 

of those making health care decisions. For example, AHRQ encourages stakeholders to 

engage in the following activities with respect to its patient-centered health research: 

Nominating research topics 

Identifying meaningful health outcomes 

Commenting on draft research questions before research has begun 

Commenting on draft Research Reviews and Comparative Effectiveness Reviews 

Providing expert input or scientific information to inform a report 

Participating in focus groups that help translate research findings for patients and 

clinicians 

Participating in inter-active listening sessions to provide focused comments on 

issues important to the Effective Health Care Program (the home of AHRQ's 

Patient-Centered Health Research), such as research topics, program structure, 

and scientific methods. 

In addition, as you may know, AHRQ supports the Effective Health Care Program which 

funds individual researchers, research centers, and academic organizations to 

work together with AHRQ to produce comparative effectiveness research for providers, 

patients, and policymakers. More information about opportunities for stakeholder input 

into the Patient-Centered Health Research process is available on the Effective Health 

Care Program Web site at www.EffectiveHealthCare.ahrg.gov. 

Finally, AHRQ is using Recovery Act funds to establish and support a Citizen Forum on 

Effective Health Care in order to formally engage the public, including patients and 

providers, through a variety of transparent and inclusive mechanisms, at the critical 

stages of identifying research needs, study design. interpretation of results, development 

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of products. and research dissemination. Funds will be used to develop formal processes 

for input. convene citizen panels, and convene a Workgroup on Patient-Centered Health 

Research to provide formal advice and guidance to the program. Funds will also support 

programs to enhance citizens' awareness of the availability of this scientific evidence in 

health care decision-making. These programs, developed under the guidance of the 

Citizen Forum, will include town hall meetings, Web-based information exchange, and 

community-based grassroots awareness efforts. 

III. Pedigree 

I, along with my colleague Rep. Buyer, am working on legislation to ensure safety in 

our nation's drug supply chain. As you may be familiar, CA enacted legislation last 

year to tackle this issue and I believe that this is an issue where we need a uniform, 

national system to ensure that we do not have a patchwork of regulations. This is a 

proactive piece of legislation to further build on what works in our current system 

and adapt to the new, and high tech ways counterfeits enter drug distribution 

channels around the world. 

3. Will your office continue to work with me on creating a framework that ensures 

a safe and secure drug distribution channel? 

We appreciate your efforts and the efforts of Representative Buyer to ensure safety in our 

nation's drug supply chain. As we have indicated in past correspondence. we support the 

intent of the discussion draft that you provided and look forward to continuing to work 

together as your legislation takes shape. Thank you for the opportunity to work with you 

on this critically important issue. 

IV. HINI 

Seeretary Sebelius, I agree with your assessment that the HINI pandemic served as 

a "wake-up call," and I am pleased that you are in the process of reviewing our 

national readiness and response efforts. As we assess the adequaey of our vaccine 

production infrastructure, we must also evaluate tbe availability of the drug 

delivery devices, including needles and syringes, which are critical to administering 

vaccines. 

4. Given that the supplemental funding approved last year remains available for 

pandemic influenza activities, bave you considered using your discretion to 

direct any excess supply of drug delivery devices under contract for the current 

HINI immunization campaign to tbe Strategic National Stockpile to ensure that 

we are better prepared for future events? 

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We appreciate your support for pandemic preparedness with the FY 2009 

Supplemental Appropriations Bill and the continued interest you have shown in 

making our programs successful. 

Regarding your request to direct any unused drug delivery devices from the 2009 

HI N 1 response, like syringes and needles, to the Strategic National Stockpile (SNS), 

options for their disposition will be developed and reviewed. Storage of these 

supplies in the SNS, as you suggest, is one option that will certainly be considered. 

HHS remains committed to the establishment of domestic infrastructure and medical 

surge capacity, including those for medical products. Fortunately, the U.S. has a 

manufacturing surge capacity for syringes and needles that meets pandemic demands. 

However, we recognize that other events occurring simultaneously may negatively 

impact this capacity. 

1 appreciate your strong commitment to public health preparedness and look forward 

to continuing to work with you and your colleagues in Congress on these important 

issues. 

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The Honorable Peter Welch and the Honorable Bruce Braley 

The Deficit Reduction Act of 2005 made serious changes to pharmacy Medicaid 

reimbursement, moving to average manufacturer price (AMP) to set federal upper 

limits for generic drugs. As part of healthcare reform legislation, both the House 

and Senate made changes to the AMP-based system, since several government 

studies have concluded that in many cases this system would reimburse pharmacies 

below their cost to obtain prescription medications. This low reimbursement 

for prescription drugs is compounded by the fact that pharmacy dispensing fees are 

also below pharmacies' costs to dispense prescription medications. 

I am concerned that these factors, as well as the potential for states to make 

additional provider reimbursement cuts as a result of budget issues, will result in 

pharmacies leaving the Medicaid program. Community pharmacies playa critical 

role as primary health care providers in all communities across the United States 

and often serve as the only resource to millions of lower income Americans for their 

daily health care needs. 

1. As you know, federal law (42 U.S.C § 1396a(a)(30» requires Medicaid 

reimbursement be set at levels to ensure that Medicaid patients have the same 

access to providers as the general population. What steps is the agency taking to 

measure beneficiary access, and ensure that Medicaid patients maintain access 

to prescription drugs and pharmacy services'? 

We are currently limited in our ability to implement certain provisions of the current 

AMP regulation due to a preliminary court injunction. Though we cannot specifically 

comment on an issue of pending litigation, we agree that equitable and appropriate 

reimbursement to pharmacies for prescription drugs helps to ensure that Medicaid 

patients maintain access to prescription drugs and pharmacy services. 

As you note, the recent health reform legislation passed by Congress would directly 

address this issue by amending the definition of AMP and increasing the 

reimbursement for generic drugs above the level set in the Deficit Reduction Act 

(ORA). We will continue to work with you and Congressional leadership to ensure 

that we have an effective Medicaid drug pricing program and ensure adequate access 

to prescription drug for all Medicaid beneficiaries. 

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The Honorable Mary Bono Mack 

I wanted to first thank you for your commitment at the hearing on the 4th to bring 

together the HHS Inspector General and Administration for Children and Families 

to examine the use of Federal funds by a tribal TANF program operating in 

southern California. Below are further questions that may help to guide your 

internal review and help Congress to better understand the situation. 

1. The Torres Martinez Tribal TANF program receives its annual federal award of 

more than $20 million based on an estimated monthly caseload of 5,238 families. 

This caseload numbcr was apparently set by both federal law (which calls for 

basing it on a formnla using 1994 AFDC figures) and the tribe's contention to 

ACF that Native Americans were undercounted in Riverside and Los Angeles 

counties. 

Yet in 2007, six years into the Torres-Martinez program, it was serving fewer 

than 400 families per month -- 7 percent of its initial projections. Despite this, 

the Torres-Martinez program's federal award was unchanged, and the program 

also received about $15 million a year in grants from the state of California 

based on the federal caseload formula. 

Today, the Torres-Martinez program's caseload is still only about one-fourth of 

what was projected when its program was formulated. 

a. Why has there been no examination of whether to reduce the TorresMartinez program's annual award, given its far lower caseloads'! 

The case load used to establish the amount of Federal funds for this grant was 

based on the State-reported FY 1994 AFDC caseload and expenditure data, 

adjusted in negotiations between the State and Tribe and agreed to by both parties. 

This easeload is not an "estimated monthly case load" in the sense of being a 

minimum requirement, projection. or target number of cases to be served. The 

amount of State maintenance of effort (MOE) funds provided is determined solely 

by the State and is not fixed to any Federal formula. 

In the same manner that the Federal funds received by a State, also set at the FY 

1994 level, have not been reduced in spite of the dramatically reduced caseloads 

being served, once Tribal T ANF block grant awards are established they are not 

adjusted based on current program caseload levels. 

b. Has there been a consideration by ACF of whether the TorresMartinez, a tribe of about 400 members whose reservation is in a 

remote part of the Southern California desert, should no longer 

operate a program in urban Los Angeles County, the nation's most 

populous county by far, some 130 miles away from the tribe's 

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reservation? Especially given the program's failure to increase its 

participation rates to expected levels over the course of nearly a 

decade? Why or why not? 

We have been working to help the Tribe develop an approach to expand services 

throughout its service area in a prudent manner. This has been done with 

considcration of the ability of needy families within the Tribe's target population 

in Los Angeles to continue receiving services from Los Angcles County until 

such time as critical program and financial deficicncies were addressed and 

program expansion could proceed in a well planned manner. 

c. Has there been an examination by ACF of whether the TorresMartinez program is failing in its mission, given that nearly a decade 

into the program, it is reaching far fewer Native American families 

than anticipated? Why or why not? 

Although the base caseloads were derived in conformity with the statute and 

regulations for identifying funding levels for tribes, as previously noted, the 

historical FY 1994 case load and expenditure data are not viewed as a minimum 

required or target level for families to be served. One key consideration under 

T ANF has been the extent to which States and Tribcs could use these funds to 

address underlying barriers to self-sufficiency and to provide work supports, as 

opposed to only providing cash support to needy families. ACF has worked with 

the Tribe to promote a range of supportive/barrier removal/family preservation 

services designed to achieve the Tribe's own goals for promoting the well being 

of the children and families they serve. The Tribe indicates that it has expanded 

beyond the cash assistance case load to a larger population for whom 

supportive/barrier removal/family preservation services have been made 

available. We anticipate a similar approach in Los Angeles County. The Tribe 

has been responsive, at both the T ANF program level and the Tribal Council 

level, in providing information on current and planned program activities and 

enhanced internal oversight mechanisms. 

2. ACF imposed a more than $1.5 million penalty on the Torres-Martinez tribe for 

misuse ofTANF funds in fiscal years 2002 and 2003. The 2002 portion of the 

penalty -- $625,380 - was to be paid in escalating quarterly installments 

commencing in September 2006 and concluding on Sept. 30,2009. The 2003 

portion of the penalty -- $912,500 - was to be paid in escalating quarterly 

installments starting in March 2008 and paid in full by Dec. 21, 2011. 

In an Aug. 12,2009, letter to ACF Director of Office of Family Assistance 

Sidonie Squier, Torres-Martinez Tribal Chairwoman Mary L. Resvaloso said 

the tribe had "diligently made payments, in good faith, for a total of$250,000 to 

date." 

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But according to ACF spokesman Kenneth Wolfe, the tribe has made a total of 

one payment for both penalties, for $275,000, on Sept. 22, 2009 - more than a 

month after Resvaloso's letter, and three years after payments were supposed to 

start. 

a. According to Wolfe, ACF agreed to reduce payments required of the 

Torres-Martinez on the penalty following a January 2008 letter from 

tribal officials citing financial hardship. The payments were reduced 

to $25,000 per quarter to cover both the 2002 and 2003 misuse of 

TANF funds penalties. But the tribe never made even the reduced 

payments. 

T ANF penalty regulations require that the Tribe repay its penalties by substituting 

its own finds to cover expenditures that it would have made with Federal TANF 

funds. Based on instructions from ACF, the Tribe was depositing its own funds to 

its TANF grant account, and they were available for use. However, the Tribe did 

not have sufficient expenditures to offset the T ANF penalty amount. Therefore, 

ACF requested that the Tribe forward the funds it had set aside to the HHS 

Program Support Center. This is the payment made in September 2009. In early 

March, Torres Martinez sent an additional $75,000; they are up-to-date on their 

reduced quarterly installment plan for the 2002 penalty and $50,000 in arrears on 

the 2003 penalty. 

b. Why did ACF not take action when the tribe for years was not paying 

its penalty payments? This appears to have been the only imposition 

on the tribe for misspending at least $1.5 million in taxpayer funds 

intended to help the needy, but it was no imposition at all, in that the 

tribe was at no time paying the penalty. 

Please see the answer above. The Tribe had deposited its own funds, as required 

by ACF, into its TANF fund. 

c. What actions can ACF consider if the penalty payments continue to 

be unpaid? And is the agency considering them? 

The total penalty amount for FY 2002 and FY 2003 was $1,543,888 ($625,388 for 

FY 2002 plus $912,500 for FY 2003); to date, the Tribe has paid back $350,000. 

The Tribal TANF regulations provide that should the Tribe fail to make the 

penalty payments, additional penalties may be applied and the annual grant award 

reduced. 

Recently, the Tribe, as permitted by the Tribal T ANF regulations, requested that 

ACF consider reducing the Tribe's current annual Tribal Family Assistance Grant 

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(TF AG) for FY 20 I 0 by the total balance due, plus an additional two percent 

penalty to be applied to the total TFAG for FY 20 I O. The total balance due is 

$1,589,064. This amount is based on the following calculation: $1,537,888 (the 

full penalty amount for FY 2002 and FY 2003) minus $350,000 (the amount paid 

directly by the Tribe) plus $40l,l76 (the amount ofthe additional penalty of two 

percent). ACF has accepted the request and the balance due will be taken from the 

Tribe's TFAG for the two remaining quarters ofFY 2010. 

3. Tribal officials, and to some extent California and federal officials, have 

indicated the Torres-Martinez Tribal TANF program's problems are largely 

problems of the past. That the tribe has made progress in its areas of deficiency 

in recent years, particularly because new management and professional staff was 

put in place. But the tribe continues to have material weakness findings in every 

annual audit. 

And a review by The Desert Sun of auditors' findings year to year seems to show 

the same major problems recurring and many of the same promises by tribal 

officials that fixes were in place or on the way. (See here: 

http://www.mydesert.com/article/201 00117 /NEWS06/1160359/T ANF+ Timeline+ 

+Promises+madc++yeHproblems+persisted ) 

a. What actions did ACF take when the same major problems were 

occurring in the Torres-Martinez Tribal TANF program every year, 

including an inability to reliably track how the program spent and 

disbursed money, and whether it was following federal laws, rules and 

guidelines? Do yon believe those actions were sufficient? 

ACF has engaged in on-site program and financial oversight and meets 

periodically with the Tribe in the Regional Off1ce to follow-up on outstanding 

program and financial issues. We believe that these efforts have facilitated 

significant progress by the Tribe in administration of the program and ensuring 

compliance with pertinent laws and regulations. 

4. HHS's National External Audit Review Center issued alerts against the TorresMartinez tribe every year from 2002 through at least 2006. The alerts detailed 

the significant findings of financial accountability problems within the tribe's 

TANF program. HHS's Office ofInspector General was carbon copied on each 

of those "NEAR Alerts." 

a. What actions were taken by ACF, by HHS and by the Office of 

Inspector General in particular as a result of these alerts year after 

year? 

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Torres Martinez has submitted audits to the National External Audit Review 

Center (NEARC) that cover its operations through September 30, 2008. NEARC 

is a component of the Office ofInspector General (OlG). Through NEARC, OlG 

reviewed the 2002 through 2006 independent audit reports on the Torres-Martinez 

Tribal T ANF program and referred to ACF the audit reports along with alerts 

describing the independent auditors' findings of internal control weaknesses. 

These alerts were also forwarded to OIG's Office ofInvestigations. Referral to 

the grant-making agency is OIG's typical practice, as the responsibility for 

imposing corrective action in response to single audit findings lies with the grantmaking agency. 01G also referred to ACF information on allegations of misuse 

of grant funds by the Torres-Martinez Tribal program that OIG had received in 

2003. ACF has worked with the Tribe to ensure it develops appropriate corrective 

action plans in response to the audit findings. Because of the Tribe's difficulty in 

retaining a stable management team, corrective actions have not always been 

implemented timely. The 2008 audit shows that a number of previous problems 

have been resolved. 

b. Why did the Office of Inspector General never do its own 

investigation of the Torres-Martinez Tribal TANF program, 

particularly after the most serious findings of mismanagement and 

waste in the 2002 and 2003 audits? What does OIG investigate if not 

this? 

The HHS Office ofInspector General (OIG) reviewed the 2002 and 2003 

independent audit reports on the Torres-Martinez Tribal T ANF program, and our 

National External Audit Review Clearinghouse (NEARC) referred to ACF the 

audit repOlis along with an alert describing the independent auditors' findings of 

internal control weaknesses. This is NEARC's typical practice, as the 

responsibility for imposing corrective action in response to single audit findings 

lies with the grant-making agency, i.e., ACF in this case. NEARC also referred to 

ACF information on allegations of misuse of grant funds by the Torres-Martinez 

Tribal program that OIG had received in 2003. OIG's understanding is that ACF 

imposed a corrective action plan on the program to address the internal control 

weaknesses. NEARC recently received a single audit report on the TorresMartinez Tribal T ANF program for 2008, and we are currently reviewing this 

report. 

5. A 2002 draft audit by the Torres-Martinez's auditor, The Sells Group, stated, 

"An HHS 'auditor' from San Francisco conducted on-site visits, apparently 

without looking at documentation, and applauded everything he was told. But if 

he had looked at the substance rather than the form, he should have been more 

critical ... management was directly involved in putting a positive spin on very 

high-risk behaviors, and the consultants responded to that by playing down the 

risks and playing up the accomplishments." 

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This account seems supported by an e-mailed shared with The Desert Sun by 

former Torres-Martinez T ANF program executive director Virginia Hill. The email, dated Jan. 23, 2003, shows it sent to Hill by James Henry, then a tribal 

program specialist for Administration for Children and Families' San Francisco 

office. 

The e-mail discussed Henry's on-site visit to the Torres-Martinez tribal welfare 

program in 2002. (Bolding added.) 

"Since there are no official or unofficial review tools, the trip report is the 

format we currently use," Henry stated. 

"It was a good opportunity to see what the program has been doing and the 

benefits being provided to native communities ... Based on my initial visit, the 

program is progressing well." 

a. Are there still "no official or unofficial review tools" of Tribal 

TANF programs by ACF? 

Tribal TANF, like State T ANF, is a block grant that is governed by title IV -A of 

the Social Security Act. The single audit is the primary mechanism that we have 

under the law to monitor State and Tribal TANF operations. 

The single audit is generally conducted by a private audit firm hired by the Tribal 

T ANF grantee. The audit firm looks at a myriad of administrative, program, and 

financial operations to ensure that the Tribal TANF grantee is operating in 

compliance with the Social Security Act, the implementing regulations at 45 eFR 

Part 286, the approved TT ANF plan, and the appropriate financial management 

regulatory provisions at 2 eFR and 45 eFR Part 92. 

In addition, the single audit mechanism has been supplemented with on site 

program and financial reviews conducted by our Regional Office staff. These 

onsite reviews also provide technical assistance to our Tribal TANF grantees 

when problems or operational deficiencies are brought to our attention. 

b. How does ACF review and determine the effectiveness of Tribal 

T ANF programs? 

In addition to the methods listed in the previous answer, the program also submits 

monthly work participation reports on a quarterly basis and quarterly financial 

reports. 

c. Under the criteria cited in b., is the Torres-Martinez Tribal TANF 

program effective? Why or why not? 

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Under the T ANF statute, HHS does not have general authority to determine 

"effectiveness" of efforts by States and Tribes. Rather, HHS' authority is limited 

to determining whether States or Tribes are subject to penalties for specified 

violations, like failure to meet the work participation rate. When a state or tribe 

fails to achieve applicable participation rate targets, a penalty may be imposed. 

The Tribe has not been assessed any such penalties. The Tribe failed to achieve its 

ncgotiated participation rates in FY 2004. However, as provided in the 

regulations, the Tribe submitted a corrective compliance plan and achieved its 

required rates in FY 2005. As noted earlier, ACF has also worked with the Tribe 

to promote a range of supportive services designed to achieve the Tribe's own 

goals for promoting the well being of the children and families they serve. 

6. The Desert Sun reviewed the Form SF-SAC reports for Tribal TANF programs 

nationwide, through the Federal Audit Clearinghouse. Forty-four of the 52 

programs nationwide had forms where T ANF grants were discernable. Of 

those, more than one-third of programs had either significant deficiencies, 

material weaknesses or both in each of their past three audits. Ncarly half of the 

programs nationwide had such audit findings in at least two of the past three 

years. 

a. Does this indicate to ACF that there may be a more systemic 

problem going on? Is there a need for more federal involvement 

with tribes to ensure their financial accountability with taxpayer 

funds? 

Section 409(a)( I) of the Social Security Act, which was amended with the 

enactment of welfare reform in 1996, requires the audit process to be used as our 

primary oversight vehicle for the various TANF programs operated by States, DC, 

Guam, Puerto Rico, the Virgin Islands, federally recognized Indian Tribes and 

Alaska Native organizations. The audit process along with the T ANF penalty 

process (which is also contained in Section 409) provides for the resolution of 

adverse audit findings with an emphasis on the implementation of corrective 

actions to remedy any identified operating deficiencies. The correction of these 

deficiencies is a worthwhile goal and the Tribal T ANF grantees that follow our 

audit compliance supplement have been responsive to this process. Moreover, 

these Tribal TANF grantees are sensitive to adverse audit findings and routinely 

ask for technical assistance in order to implement and operate efficient and 

effective systems. In fact we have established mechanisms that provide technical 

assistance to our Tribal T ANF grantees and we intend to continue in this 

important initiative. 

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The Honorable Lee Terry 

1. Given the overall budget crisis and calls for across the board cuts, does the 

current request reflect any shift in HHS spending priorities in the near, mid, or long 

term, especially with regard to medical countermeasures directed at Category A 

biological threats? 

The Department of Health and Human Services remains committed to protecting the 

American people through developing medical countermeasures to biological threats. 

The FY20II Budget Request for the Biomedical Advanced Research and 

Development Authority (BARDA) in the Office of the Assistant Secretary for 

Preparedness and Response (ASPR) is $476,194.000, representing an increase of 

$135,663,000 above the FY 20 I 0 funding level. This funding will support advanced 

research and development of the highest priority medical countermeasures among the 

12 biological threat agents and radiological/nuclear threats identified in the PHEMCE 

Strategy and Implementation Plans, including Category A biological threats such as 

anthrax, plague and tularemia. 

The BARDA budget request for FY 201 1 reflects the efforts ofBARDA/ASPR, in 

coordination with the National Institute of Allergy and Infectious Diseases (NIAID) 

at the National Institutes of Health (NIH), and the Department of Defense to identifY 

and fund only those programs mature enough for advanced research and 

development. The near and mid term priorities include anthrax, smallpox, 

radiological and nuclear threats. and broad spectrum antimicrobials. Working under 

the Integrated National Biodefense Portfolio, ASPRIBARDA, NIHINIAID, and DoD 

will coordinate efforts to support programs for other high priority threats that are at 

earlier stages of development. This will ensure a smooth transition to 

ASPRIBARDA's advanced research and development portfolio in the long term. 

Additionally, the Centers for Disease Control and Prevention (CDC), with guidance 

from BARDA and the Public Health Emergency Medical Countermeasure Enterprise 

(PHEMCE), will continue to purchase, warehouse, and manage medical 

countermeasures necessary for treating affected populations, preventing additional 

illness, and providing medical supplies and equipment in response to a catastrophic 

public health event. CDC will also continue to work with FDA and the FDA shclflife extension program to extend the usable life of many countenneasures. 

2. Specifically with regard to anthrax, it is important that thc United States 

maintain an adequate reserve of licensed FDA-approved vaccine in the Strategic 

National Stockpile, a fact made all the more clear through the eomments of recent 

remarks by the WMD commission and others about our domestic preparedness. Is 

it your intent to continue purchasing the entire supply of approved anthrax vaccine 

in an effort to achieve protection for 75 million individuals? 

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Anthrax vaccine absorbcd (A V A or BioThrax®) is the only licensed vaccine to 

prevent anthrax infection. HHS and 000 together have been purchasing nearly all of 

this anthrax vaccine manufactured each year by Emergent BioSolutions. Under 

contracts with ASPRIBARDA, Emergent delivered has 28.75 million doses of 

vaccine to the Strategic National Stockpile (SNS). In 2008, the procurement of the 

vaccine was transitioned to the Centers for Disease Control and Prevention (CDC) 

and SNS, which awarded a contract for delivery of 14.5 million doses of vaccine; 

deliveries are currently ongoing under that contract. 

Studies have supported an extension of the expiry dating from 3 to 4 years for the 

Emergent anthrax vaccine product, which decreases the cost burden of maintaining 

the anthrax vaccine stockpile. Emergent also continues to generate data to support 

FDA approval for a post-exposure prophylaxis indication. Finally, HHS remains 

committed to the development of next generation anthrax vaccines. 

3. Regarding funds expended for new countermeasure development, it is essential 

that HHS use these funds efficiently and effectively which can be achieved by not 

letting the development process for new countermeasures become a long, extended 

one. My understanding is that while the development of the next generation 

anthrax vaccines has involved multiple candidates to increase likelihood of success, 

HHS has instead of conducting a competitive review, made a sole source award to 

only one of the developers. What steps is HHS taking to ensure that we do not place 

our reliance on any single company or approach? Will HHS be providing the 

needed funding to multiple candidates? 

The Department remains committed to the devclopment of medical countermeasures 

(MCM), including anthrax vaccines, from multiple suppliers, through a full and open 

competitive contractual process that complies with the Federal Acquisition Regulations. 

Including many next generation anthrax vaccine candidates in the process will help 

ensure that several candidates mature and meet HHS and FDA requirements. 

In February 2008, the Biomedical Advanced Research and Development Authority 

(BARDA) in the Office of the Assistant Secretary for Preparedness and Response 

(ASPR) released a full and opcn competitive Request for Proposals (RFP) under Project 

BioShield, for late stage development and acquisition ofrPA anthrax vaccine. A Project 

BioShield RFP was intended 10 take mature medical countermeasures at late stage 

development, and support them through the final safety and efficacy testing, to achieve 

licensure within a Project BioShield statutory maximum of up to 8 years and deliver 25 

million vaccine courses to the Strategic National Stockpile. 

In accordance with the HHS Acquisition Regulations, multiple comprehensive technical 

reviews of the proposals were conducted. Despite multiple proposal revisions and site 

visits, the Source Selection Authority within HHS dctermined that there were no Offerors 

that could meet the U.S. Government's statutory, scientific, and technical requirements. 

Therefore, ASPRJBARDA cancelled the RFP on December 7, 2009. Awarding contracts 

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to candidates that were deemed not mature enough would present an unreasonably high 

risk of failure for both prospective Contractors and the U.S. Government. 

ASPRIBARDA issued on December 7, 2009, Special Instructions to an existing full and 

open competition through a Broad Agency Announcement (BAA) solicitation, which 

called for proposals for advanced development of next generation anthrax vaccines. 

Multiple proposals were received by the Feb. 2, 20 I 0 deadline. The technical review 

process is underway and ASPRIBARDA expects to award contracts in 2010. 

Additionally, another proposal was received recently by ASPRIBARDA in response to a 

separate BAA under full and open competition for innovation of anthrax vaccines. 

In late February 2010, HHS modified an existing contract with Pharmathene to increase 

the funding level on the contract for development and clinical product manufacturing 

activities within the scope of the original contract awarded by NIH. The ultimate goal of 

the original contract was to produce an rPA anthrax vaccine using a validated 

manufacturing process. Funding under the current contract modification funds those 

activities. Therefore, this was not a sole source award but a modification of an existing 

contract. The active ASPRIBARDA solicitation for advanced development of next 

generation anthrax vaccines is a full and open competition. 

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The Honorable Michael Burgess M.D. 

1. Madam Secretary, it has been over a year that Centers for MedicareIMedicaid 

Services has gone without an appointed head administrator, with all due respect, 

how can CMS properly function without a eonfirmed Administrator? Medicare 

and Medicaid are the largest insurance companies in the country and 51 % of the 

Health and Human Services proposed budget is supposed to flow through CMS, 

how are decisions being made for the programs when there is no director? The 

Obama Administration has had more than a year to appoint a new director, 

have you (or) why have you not advised President Obama to naming a new 

Director? 

During the past year, two outstanding health policy leaders, Jonathan Blum and Cindy 

Mann, have been running Medicare and Medicaid. Under their leadership, CMS has 

helped serve millions of Americans and undertaken landmark efforts to fight fraud, 

help enroll children in the Children's Health Insurance Program and Medicaid, and 

distribute billions in Recovery Act resources to States. 

In February 20 I 0, Marilyn Tavenner, Dr. Peter Budetti and Tony Rodgers joined 

CMS as Principal Dcputy Administrator, Deputy Administrator for Program Integrity, 

and Deputy Administrator for Strategic Planning, respectively. Their knowledge 

and experience gives us more resources to enhance our efforts to fight thud and 

waste and to increase our focus on improving quality for our beneficiaries. 

I also believe it is important to look at all that CMS has accomplished in this 

Administration. CMS has continued to issue regulations - and on time. The deadline 

was met for such important payment regulations as the physician fee schedule and the 

HITECH regulations that outlinc mcaningful usc and incentive payments for 

electronic records. 

CMS has continued to make decisions and issue guidance, like the compensation 

requirements for agents and brokers that sell Medicare Advantage plans and helped 

ensure that beneficiaries who needed to change their Medicare Advantage or 

Prescription drug plans had the tools and information they needed to make those 

changes. 

CMS met the statutory deadlines for Medicare Advantage reimbursement rates and is 

issuing guidance to states implementing provisions of the Recovery Act and the 

Children's Health Insurance Program Reauthorization Act, and before the end of the 

year, provided performance awards to a number of states that are actively reaching 

new CHIP eligible families and children. 

CMS was one of the first agencies that made funds available under the Recovery Act 

- funds to allow states to continue to provide health care coverage to the most 

vulnerable Americans through Medicaid. 

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We have accomplished a great deal, and I'm confident we will continue to move 

forward in the years ahead. 

2. I strongly support a new $400 million initiative included in the budget that will 

allow for private capital investment in low-income communities that are high 

investment risks. The funds would be divided between U.S Department of 

Agriculture, Health and Human Services and the Department of Treasury. 

Specifically, the budget includes $250 million in New Market Tax Credit 

allocations to spur private supermarket investments in underserved 

communities. Currently, there are a record number of people using food stamps; 

however many times grocery stores arc not available within reasonable location 

to food stamp users. With this program in the budget, the New Market Tax 

Credit allocations could create jobs, better neighborhoods, address obesity and 

lower cost to the Medicaid program. This is an issue that I think is critically 

important and while not under the direct jurisdiction of this Committee I will 

urge the greatest oversight ofthis program if it is appropriated. Secretary 

Sebelius, how do you foresee the coordination of this new proposed program as 

well as your expected results? How do you plan to design and implement this 

program and create measures for its evaluation - assuming the President's 

budget request is granted? 

The Department of Health and Human Services specializes in community-based efforts 

to improve the economic and physical health of people in distressed areas. While the 

bulk of the $400 million Healthy Food Financing Initiative will bc administered at the 

Department of Treasury, such as the New Market Tax Credit, or at the Department of 

Agriculture, HHS will dedicate up to $20 million in Community Economic Development 

(CEO) program funds to the Initiative. Through the CEO program, HHS will award 

competitive grants to Community Development Corporations that support projects to 

finance grocery stores, farmers markets, and other sources of fresh nutritious food. These 

projects will serve the dual purposes of facilitating access to healthy food options while 

also creating jobs and business development opportunities in low-income communities, 

particularly since grocery storcs often serve as anchor institutions in commercial centers. 

The existing CEO program utilizes three indicators in the annual Report to Congress to 

measure progress or success. The indicators are: I) the number of jobs created; 2) the 

number of businesses created or expanded; and 3) the amount of non-CEO funds secured 

or leveraged by grantees in addition to their CEO award to implement the proposed 

project. Grantees often secure additional non-CEO funds to implement their project; these 

funds are not required by statute but may be helpful to execute the project. In addition to 

these established measures in the CEO program, the Department is working with other 

agencies to develop evaluation measures for the initiative across programs. 

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3. I feel that medical liability reform is strongly needed within the healthcare 

system. Why is liability reform, including limitations on non-economic damages 

not included in any of the health care reform bills passed by Congress? 

Currently, quality patient care is at high risk due to excessive liability costs 

placed on health care providers. Lawsuits against health care providers are 

hindering access to care and many doctors are abandoning high-risk 

procedures. Medical liability reform would help to provide more quality care 

for patients and more reassurance for doctors. Not only is a strong majority of 

the public in favor of medical liability reform, reform would also control 

premiums and increase the availability of medical professionals, especially in 

high-risk specialties. If President Obama is serious about reforming our medical 

justice system, will he advocate for comprehensive liability reform? 

I agree that our medical liability system necds to be cxamined to ensure that it meets four 

goals: putting patient safety first and working to reduce preventable injuries; fostering 

better communication between doctors and their patients; ensuring that patients are 

compensated in a fair and timcly manncr for medical injuries, while also reducing the 

incidence of frivolous lawsuits; and reducing liability premiums. 

President Obama and I both recognize the importance of an effective mcdicalliability 

system to promote patient safety as well as balance the interests of providers and patients. 

As a first step towards this goal, in September 2009, the President announced his 

proposal to invest in innovative strategies to better manage medical liability claims. In 

response to the President's directive, HHS committed $25 million for this three-pronged 

initiative, which includes (I) a review of previous reform models to better inform our 

efforts; (2) grants for up to three years to jump-start and evaluate evidence-based patient 

safety and medical liability demonstrations; and (3) one year grants to support state 

planning efforts for medical liability and patient safety models. 

The Agency for Healthcare Research and Quality (AHRQ) recently completed the review 

of previous reform models, which demonstrated the need for further study of the impact 

of various reform options, and the need for states and health systems to be able to 

innovate in this regard. AHRQ has completed the process of requesting applications for 

the planning and demonstration grants to be awarded under this initiative, and they are 

currently undergoing scientific peer review. AHRQ anticipates that it will make funding 

announcements of grantees by this summer. 

Finally, HHS will continue our patient safety and medical liability efforts as we 

implement additional state demonstration programs to evaluate medical liability systems, 

as authorized and appropriated in the Patient Protection and Affordable Care Act. This 

provision authorizes an additional $50 million over five years to support states with 

planning and demonstration grants, as well as evaluations to learn more about what 

elements work together in promoting paticnt safety and improving state medical liability 

systcms. 

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4. The President's FY 2011 Budget includes passage of health care reform which 

states that when passed, it will reduce the deficit by $150 billion from the years 

2011-2020. Can you explain why this figure does not align with either the CBO 

score of the House or the Senate bill? 

The most recent CBO score of March 20, 2010 based on the Senate bill and the proposed 

reconciliation changes shows deficit reduction of$143 billion betl'veen 2010 and 2019. 

The $150 billion in savings provided earlier this year was based on the average receipts 

of the House and Senate bills, the average net outlays, and then trended forward to 2020 

to provide a 10 year window from 20 II. 

5. The way the Presidents budget is presented, the placeholder manner of health 

reform hides the growth in government that would result from either the House 

or Senate bill. Once transparency is applied to the bill it is obvious that when 

fully implemented, the health reform proposal does not include the $2.3 trillion 

in new spending over 10 years in the Senate bill and $3 trillion in new spending 

in the House bill. Why is that? 

The report issued by CBO on March 20, 2010 makes clear the investments and savings 

attributable to health reform result in $143 billion in net savings. The budget was 

developed over many months prior to the passage of health reform when many policies 

were still under consideration. As a result, the Administration was unable to include 

specific policies in the proposed budget. Now that health reform has passed, we will work 

diligently to make it a success. 

6. Based on the information we received from past findings, have the Medicare 

Actuaries produced any new findings on the proposed Medicare budget and 

health reform? Do you mind detailing any discrepancies? 

The CMS Office of the Actuary (OACT) last released an analysis of the Senatepassed health reform bill on January 8,2010. On the basis of that bill, the Actuary 

found that health refonn will extend the life of the Medicare Trust Fund by 9 years. 

The President's FY 2011 Budget Request included an underlying assumption that 

health insurance reform would be enacted, and therefore, showed deficit reduction 

totaling $150 billion in FY 2011 - FY 2020, based on the CBO estimates of the 

"average budgct impacts of the House- and Senate-passed health care reform bills, 

extrapolated to 2020 and adjusted to remove the effects offour provisions already 

included explicitly as 2011 Budget proposals." It is not uncommon for CBO and 

OACT estimates to vary slightly, due to minor differences in economic assumptions 

and scoring methodology. 

7. In recent press reports, it has been indicated that House and Senate Democrats 

are again working behind closed doors on a reconciliation strategy to make 

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changes to the Senate bill. Press reports speculate that the package could cost as 

much as $300 billion in new spending. If this health reform package is being 

compiled, why have we heard nothing from budget committee? It seems obvious 

from press reports that in order to have full usage of the health reform 

placeholder, Democrats are attempting to pass the bill through quiet 

compromise. Furthermore, ifthis is true, why does press seem to have more 

information than the House and Senate Republicans? 

The President posted a proposed package of amendments to the Senate bill on February 

22, 2010. This was followed by 7 hours of bipartisan public discussion on C-Span. The 

final reconciliation package, reflecting the President's proposal as well as ideas raised by 

Republicans in that discussion, was posted online on March 18, which was 72 hours 

before any votes occurred. The CBO score posted on March 20 showed $143 billion in 

deficit reduction, $25 billion more deficit reduction than that achieved thc Scnate bill. 

The $143 billion in savings is not a placeholder but the final score of the legislation as 

passed by the House on March 21, 2010. 

8. How do you find it fiscally responsible to claim the effects of health reform 

legislation when the bills considered by Congress remain controversial? This is 

not a bipartisan policy or a shift in payment rate- it is 2,000 pages of 

controversy. The budget assumes passage and at the same time (based ou CBO 

scores of the bills we do have) seems to fudge potential costs, is that not 

misleading at best? 

This legislation has undergone the most intensive scrutiny of any legislation in memory, 

including weeks and months of televised debate through Committee hearings, mark-ups, 

and floor debate. The savings in the first decade are projected to increase to about $1 

trillion in the next decade and savings are projcctcd to continue into the following 

decades. 

9. The President has called for a freeze on non-defense discretionary spending. 

There is no doubt that the Departments budget needs to reflect this net freeze as 

well. Can you concur and explicate that the budget does in fact emulate this 

freeze? Obviously, some accounts would require an increase in expenses which, 

in turn, would require a more significant decrease in other accounts. Please 

clarify for this committee which accounts in your Department will be targeted by 

this reduction? 

We have gone through the budget carefully and are eliminating the non-national security 

discretionary programs that don't work while investing in, and reforming, programs that 

do. We are investing in the things that help spur job creation and economic growth. The 

freeze would cut $250 billion from the deficit over the next decade. Under the 2011 

budget, non-security discretionary spending would fall to its lowest share of the economy 

in more than 50 years by the middle of the decade. 

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10. Does your budget actually reflect a true physical comparison of year to year 

spending or does the budget reflect spending provided by the stimulus package? 

Isn't the $1 billion increase in spending an addition to the $10 billion provided in 

the stimulus bill for NIH research in 2009 and 2010? Essentially, NIH isn't 

getting a $1 billion increase over last year- it is getting an increase on top of 

spending provided by ARRA. 

The $10.4 billion provided to NIH in the American Recovery and Reinvestment Act of 

2009 was a one-time appropriation in FY 2009 which NIH can obligate over two years 

through FY 20 10. This raised the combined total appropriated to NIH for FY 2009 to 

$40.95 billion. Because of their one-time nature, these ARRA funds were not continued 

and are not part ofthe FY 2010 appropriation of$31.2 billion for NIH. Consequently, 

the $32.2 billion requested for NIH in the FY 20 II President's Budget is an increase of 

$1 billion over an FY 20 I 0 base that does not include any ARRA funding. 

11. What details can you provide for how funding was spent at NIH, CDC, and HHS 

generally that was provided by the stimulus package? Can you provide audits to 

this Committee on how this money was disbursed? 

The American Recovery and Reinvestment Act provides HHS programs an estimated 

$141 billion for fiscal years 2009-2019. While most provisions for HHS programs 

involve rapid investments, ARRA also includes longer term investments in health 

information technology. HHS plans to have obligated $102 billion through FY 2010. 

As of March 19, 2010, HHS has obligated $72.4 billion in ARRA funding. The largest 

single program is the increased Medicaid Federal Medical Assistance Percentage 

(FMAP) which has obligated $53.7 billion to States. NIH has obligated $4.8 billion in 

scientific research, $192 million in comparative effectiveness research. $716 million in 

extramural construction, $109 million in shared instrumentation, and $68 million for 

buildings and facilities. CDC has obligated $461 million for evidence-based clinical and 

community-based prevention strategies, $204 million for section 317 immunization 

activities, and $48 million to reduce healthcare associated infections. 

The HHS Office ofInspector General performs audits on Recovery Act grant or contract 

awards, and these audits will be posted on Recovery.gov when they are complete. 

Additionally. the Single Audit Act requires non-federal entities to have an annual audit of 

all their Federal grant or contract funds, including ARRA funds. Within 9 months from 

the close of an entity's fiscal year, the entity is required to submit their audit reports to 

the Federal Audit Clearinghouse (FAC), which is part of the Department of Commerce. 

Many non-Federal entities. particularly states, will submit their annual Single Audit by 

March 30. 20 I 0 (for entities with fiscal year-end June 30, 2009). The FAC will prepare a 

report about the audit findings. Ifan audit report has no findings. the report remains with 

the FAC. When there are audit findings, the F AC forwards the report for action to the 

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relevant Federal agencies. To date, HHS has awarded more than 20,000 grants and 

contracts with ARRA funds. The large majority of these reports will have no findings. 

12. Under the President's adjusted baseline, Medicare is projected to spend $6.955 

trillion over the next ten years (2011- 2020). This includes a $371 billion proposal 

to fix the Medicare Sustainable Growth Rate (SGR) formula for physician 

reimbursement. In the adjusted budget however, the proposed Medicare fix is 

not paid for. With the Presidents current baseline, what reforms to the SGR do 

you envision and are there identified accounts to offset this policy? 

The Administration supports comprehensive but fiscally responsible reforms to the 

SGR payment formula. In the 2010 physician fee schedule final rule, we removed 

physician-administered drugs from the calculation of allowed and actual expenditures 

under the SGR, which could reduce the cost of fixing the scheduled cut by about $130 

billion over ten years. However. in the FY 2011 President's Budget Request. the 

Administration is not proposing any specific policy. Rather. to promote more honest 

and transparent budgeting, the FY 2011 Budget includes an adjustment totaling $371 

billion over ten years (FY 20 11-FY 2020) to reflect the Administration's best estimate 

of the impact of presumed future Congressional action, based on Congress' repeated 

interventions to prevent scheduled reductions in physician payments in recent years. 

The Budget does not include an offset. The Administration chose to reflect this 

adjustment in the FY 20 II Budget because it more accurately reflects recent 

Congressional practice. acknowledges the important role Congress plays in 

appropriating funding. and allows for a more understandable and accurate budget 

process. 

The Administration believes Medicare and the country need to move toward a system 

in which doctors face better incentives for delivering high-quality care, rather than 

simply more care. I look forward to working with Congress and other stakeholders to 

reform Medicare's payment methodology for physicians' services. 

13. In addition, Medicaid is also projected to spend $3.602 trillion over the next ten 

years (2011-2020). However, the President's budget does not show how Medicaid 

spending will increase as a result of enactment of health reform as it is proposed 

in his budget. Once again, why is health reform passage assumed for savings and 

not for costs? 

The savings that are achieved are net of costs. The CBO score makes clear that these 

savings accrue net of coverage expansions. The 2011 budget could not reflect those costs 

and savings since health reform had not passed when the budget was introduced. 

14. The President's budget also includes a set of proposals intended to reduce waste, 

fraud and abuse in Medicare, Medicaid, and the Children's Health Insurance 

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Program (CHIP). Together these measures, aimed at improving program 

integrity, are expected to save $37 billion over the next years. However, despite 

the increase in fraud prevention spending roughly the same numbers of cases 

have been pursued. I have heard the deficiency in pursued cases is not in 

investigation but in prosecution. Has Health and Human Services requested an 

increase in funding to supply more federal prosecutors with a background in 

health fraud? Obviously finding fraudulent cases greatly reduces the cost to the 

government but if we do not prosecute and prevent future cases, what is the 

point in wasting funds to find fraudulent cases? 

The FY 2011 President's Budget makes fighting fraud a priority by investing an 

additional $250 million in new resources in 2011 as part of a multi-year strategy and 

supporting a package oflegislative and administrative changes that will give HHS new 

tools that enhance program integrity oversight. Over ten years, these actions will result in 

over $24 billion in estimated savings. This proposal includes a significant investment in 

support of the newly established joint HHS-DOJ Health Care Fraud Prevention and 

Enforcement Action Team (HEAT) initiative. The HEAT initiative is a joint effort 

between HHS and DO] that has made fighting health care fraud a Cabinet level priority. 

It brings together the best minds and resources from two Departments to share best 

practices, prosecute criminals, and recover billions in taxpayer dollars. 

Strike Forces are a key component of the HEAT enforcement strategy. The Strike Force 

teams use innovative investigation and prosecution methods to identify, investigate, and 

prosecute criminals involved in certain health care fraud schemes in a more expeditious 

manner. Each Strike Force team includes OIG and FBI agents and DOJ attorneys, 

supported by at least one designated CMS program expert in each Strike Force location. 

Through the HEAT initiative, DOJ is training prosecutors specifically for prosecuting 

health care fraud, and then relocating them to cities with a Strike Force team. Through 

HEAT, OIG and DOJ have expanded our Strike Force teams from two to seven 

locations. Collectively, Strike Forces have resulted in approximately 270 convictions, 

indictments of more than 500 defendants, and more than $240 million in court-ordered 

restitutions, fines, and penalties. 

In addition to efforts with HEAT, OIG has historically worked closely with DOJ to 

ensure that health care fraud investigations are suecessfully prosecuted. OIG 

investigators work with DO] prosecutors on a case-by-case basis, while senior leadership 

coordinates efforts to ensure results are achieved. Moreover, OIG special agents and 

attorneys work with DOJ as Special Assistant United States Attorneys to assist in the 

prosecution of health care fraud cases. It is the results of these collaborative efforts that 

form the basis for successful outcomes. We will defer to DOJ in assessing the need and 

resources for additional prosccutorial efforts. 

15. The President's budget also includes an increase to expand and improve FDA's 

efforts to protect America's food supply. First, the budget includes a $318 

million increase in total program level which is over a 30 percent increase in 

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spending and an $80 million increase in budget authority, which is a 6.2 percent 

increase. However, food safety legislation passed by the House and Senate has 

yet to be resolved. Which particular bill or policies in this pending legislation did 

you take into account when deciding on this increase? 

The President's budget request for FY 2011 includes FDA's Transforming Food Safety 

Initiative, which reflects President Obama's vision ofa new food safety system to protect 

the American public. Some of the key components of the Initiative are new performance 

standards for food safety, expanded laboratory capacity, piloting a track and trace system 

for foods, strengthening the Agency's import safety program, and improving data 

collection and risk analysis. These initiatives are reflected both in the budget and in the 

food safety bills in the House and Senate. 

The House and Senate food safety bills will provide important new authorities that 

provide the basis for the improvements noted abovc. They also provide authority for new 

user fees proposed in the budget for facilities registration and reinspections. The House 

bill (H.R. 2749) authorizes both of these fees, while the Senate bill (S. 510) provides for 

the reinspection fee and a recall fee, but not a registration fee. 

The registration and reinspections fees in the President's budget will support the direct 

costs of registering and inspecting food manufacturing and processing facilities and 

conducting reinspections offaci1ities that fail an inspection. They will also help provide 

a consistent funding source to support other critical food safety activities, such as import 

review and product sampling. 

o 

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