Transcripts For CSPAN2 Senate Finance Cmte. On 2019 Health Human Services Budget 20180216

President s would weve ever had. And a grandfather, whirl wind johnson hosted a tennis camp including for Althea Gibson and arthur ashe. My grandfather, a phenomenal physician, but somehow managed to be a student of the tennis game and transform that learning into a program that would, for decades, provide players an opportunity for africanamericans to integrate the sport. Watch the cspan cities tour saturday beginning at 5 p. M. Eastern, sunday at 2 p. M. On American History tv on cspan 3. Working with our cable affiliates as we explore america. Health and Human Services secretary, alex azar spoke before the Senate Finance committee this week about the president s proposed 2019 budget. He answered questions on a range of issues, including funding for medicare and medicaid, the Opioid Epidemic, Community Based clinic training and autism and also discussed the administrations approach for lowering Health Care Costs including Prescription Drugs. Mr. Azar was sworn in as hhs secretary in january of 2018. Hes a former deputy secretary and general counsel of the department under president george w. Bush. He was also an executive with the Pharmaceutical Company eli lilly. This half Hour Committee was led by senator orrin hatch. Okay. The committee will come to order. Before i begin, i want to express on behalf of the committee the sadness we all feel in light of yesterdays events in florida. I was personally horrified, as i watched the news unfold yesterday, though i was also moved to hear some of the stories of the heroism displayed by tomorrow of the students and teachers at the school. In times like these, i know that thoughts expressed from those of us who are far away can sometimes seem empty and meaningless in the face of such a terrible tragedy. I will simply say that i am praying for all of those who are affected by these acts of senseless violence. That, of course, includes a member of our committee who i know is mourning the loss and pain felt by those in his home state. May they all find peace, healing and a speedy recovery. Now, i welcome everybody here to todays hearing which will be our third and final hearing on the president s budget for fiscal year 2019. And weve already had the treasury secretary and the acting irs commissioner an i peer before us and today well be talking with secretary azar from the department of health and Human Services. Secretary azar, i want to thank you for being here and cooperating with us and welcome back. Its been just a little over a month since you last appeared before us. This could cause some nervous reactions, you never know. Of course, you are still very new to your position, but we are glad to have you back because we have a lot to discussion. Since you were last year, this committee has amassed a number of legislative victories, i want to take a few minutes to highlight these accomplishments as many are within hhss jurisdiction. Last month, as a result of countless hours of work by this committee, Congress Passed and the president signed a six year chip extension. A few weeks later, we had another four years to that extension as part of a bipartisan budget act. Thats ten more years of chip funding, which is, quite frankly, really a historic accomplishment. Senator ted kennedy and i created the chip more than two decades ago and despite always enjoying bipartisan support at no point in the programs history have we been able to deliver this much certainty and security for the families and children who depend on chip. I want to once again commend my colleagues on both sides who joined in this effort, who share in this success, especially my colleague from oregon. It was no small feat. In addition to the chip extension, the chronic care act, another bipartisan legislative product out of this committee, was also signed into law recently. This new law will improve care for Medicare Beneficiaries living with chronic conditions, streamlined care coordination and improved quality outcomes without worsening medicares shaky fiscal status. Again, i want to thank everyone on this committee who worked on this bill, most notably our Ranking Member, senator widen, as well as senator warner and another in the key passing of this bill and it doesnt end there, the bipartisan family Preventions Services act which will help keep more children safely with their families, specifically by funding Substance Abuse and Mental Health services that have shown to prevent children from entering foster care. All of this success is testament to bipartisanship and proves that it is possible for both parties to find Common Ground and Work Together, as always, theres more work to be done and i am optimistic that we can be just as effective in the coming months. Of course, these recent achievements wont mean much if theyre not implemented properly. Secretary azar, i look forward to working with you as this process moves forward. Id like to take a moment and talk about some of the specifics in the president s budget which recognize the need to eliminate wasteful spending. I rein in our National Debt for people at home. And i look at the president s course that could lead to an economical future. And one of those is the repeal of obamacare. The budget bakes in this repeal and replaces it with a statebased grant system. All told, the administration estimates that this would save more than 675 billion. Thats with a b. Many of us on the committee, i think all of us on the republican side share the desire to repeal obamacare and weve done some great work rolling back some elements of the socalled Affordable Care act. This congress. The starters, tax zeroed out the mandate tax and the recent budget bill, the socalled medicare extenders and repealed the independent payment advisory board, and in that same bill, we extended previous delays on other obamacare taxes, including the medical device tax, the Health Insurance and the socalled cadillac tax. But as the budget points out, we are not quite there yet. I hope we can take additional steps in the future and i look forward to continuing our discussions on how we can stop the skyrocketing costs of health care in a meaningful and a well governed way. Beyond the critical repeal and replace efforts with obamacare, we also need to start getting serious about medicare and medicaid reforms. Both of these programs need to be put on a more sustainable path so that we can fulfill the promises of these programs for future generations. I know that anytime a republican mentions the fiscal predicament of medicare and medicaid, were essentially being accused of robbing the elderly and low income families of their health care, but none of these scare tactics will improve the outlook of our federal health care programs. Thats going to take some hard work and hopefully we can find a path forward there as well. Secretary azar, during your confirmation hearing, you emphasized that addressing rising drug prices would be one of your Top Priorities. As you know, ive spent quite a bit of time on this issue, working to ensure that patients have access to innovative and high quality medications. It can be tricky to balance the need to encourage investment and development of new and effective drugs and treatments while also working to make sure those in need could obtain access to those potentially life saving and life improving products. Some have made a crusade out of scapegoating the companies that develop drugs and treatments. And when this almost singular focus prevails, the result is policy that tends to be less than perfect. To put it charitybly. We saw an example of this in last weeks bipartisan budget act that increased the discount that manufacturers were required to provide under the socalled donut hole in Medicare Part d. Now, i voiced my opposition to the inclusion of this provision in the budget. Excuse me. In the budget agreement on the senate floor last week. I am working with my colleagues who share my concern on the increased manufacturer discount provision to mitigate its impact. And we should all strive further, as this budget has a number of other drugrelated policy proposals, implore that we should have a balance that we should all try to achieve. Secretary azar, you also emphasize that addressing americas Opioid Crisis is another one of your Top Priorities. I am happy to see that the president s budget stresses the importance of working together to fight this epidemic. The c. D. C. Estimates that each day our country experiences more than 100 opioid related deaths my home state of utah has been especially hard hit and while the Drug Overdose rate has risen over the past decade, were starting to see a shifting tide thanks to the leadership of many foreclosures in my state. With that said, they need federal help and i know that many in congress, including several members of this committee, have been outspoken leaders in this effort. And i can commend them for their work. We are committed to continuing our Bipartisan Committee process to address the Opioid Epidemic, especially through mandatory program proposals, that can bring about meaningful and enduring change to a system plagued with issues. Now, mr. Secretary, i look forward to working with you in the coming months as we look for solutions to address this crisis, and i hope that we as a committee can continue our bipartisan efforts to curtail this growing string of tragedies. To close, let me say as we all know, its congresss responsibility to pass a budget. The president s proposed budget merely sets the tone and provides us with the baseline for a debate. I hope that we can Work Together to implement many of the common sense reforms weve been debating for so long and i hope that we can continue to work to set aside our differences in order to find beneficial solutions. I look forward to having an open and frank discussion with secretary azar about these and other matters. Before i close, i do want to note that we constantly were unable to get a quorum yesterday. If at any point a suitable quorum is present, i intend to pause the hearing and move to votes on the nominations of mr. Dennis shea, and mr. Cj mahoney. Thereafter well resume the hearing. Let me turn to my friend the ranking minority the Ranking Member for his opening remarks. New very much, mr. Chairman. Mr. Chairman and colleagues, 18 School Shootings this year. And im just going to continue by saying, when is enough . Enou enou enough. And we watch these young people from the high schools and i heard one in effect say you know, were kids. We cant fix this. You adults get over it and deal with it. And that, to me, is central to what were talking about this morning. Because were going to talk about health care and what weve been hearing on the news is that it sure sounds like there are a lot of young people that are frightened about what can happen at their schools. So we deal with lots of bills and lots of amendments, but like those students said, time to get over it, its time to act and weve learned in the last 24 hours enough is enough. And mr. Chairman, i want to pick up first on the point you made because in the last couple of weeks on the health care front, as you noted, weve had some very positive developments here in the last few weeks. If you had told me in the winter of 2017 that wed have a 10year chip reauthoritization, everybody would have said, what planet is this person residing on . The chronic care bill, and i see senator isaacson who is with me on day one, senator warners not here, senator isaacson in this room, we launched to chairman hatch, to his credit, and pulled together a Bipartisan Group of colleagues. Lets make sure we understand what this chronic care bill is all about. When you have 10,000 people turning 65 every day happening for years and years to come you have to dig in. Chairman hatch made that possible. I want to thank the chairman, then of course a lot of people who worked in the Child Welfare field are saying that the Families First bill was what they had been dreaming about for three full decades. That came together here in the last couple weeks and i want to thank you for that, mr. Chairman. Now, on a not so positive note the budget season is at hand again so the trump agenda of Health Care Discrimination is back. Im going to go through the examples. Start with discrimination against americans with preexisting conditions. People who have preexisting conditions count on having a robust private Insurance Market with strong Consumer Protections. What the trump budget offers is chaos in the private Insurance Market and the elimination of key Consumer Protections. The budget embraces the old grahamcassidy proposal. That live ad mercifully short life last fall because in this room we blew the whistle on the fact it didnt lock in protections for those who have preexisting conditions. On top of that the administration is giving a green light to junk insurance policies that revived the worst insurance abuses of the past, such as skimpy coverage and dollar limits on care. So for millions of people with preexisting conditions the Trump Administration seems dead set making the care they need unaffordable and inaccessible. Next on the agenda of Health Care Discrimination is discrimination against women. When you get rid of the Consumer Protections in the Affordable Care act you return to an era when 75 of insurance plans in the individual market dont cover Maternity Care orbiter control. And under the trump budget, which arbitrarily attacks key providers, planned parenthood and others, millions of women would lose the right to see the doctor they trust, the doctor of their choosing. Then the trump again today Health Care Discrimination goes after americans who walk an economic tightrope. 1. 4 trillion cut from medicaid. Millions of americans locked out of the program. A scheme to wipe out key nationwide protections to cap the program especially end guarranty of those who qualify for medicaid. Now the Administration Reportedly is discussing lifetime limits for americans on medicaid. Both side used to agree that life time limits in health care were absolutely wrong, no exceptions. The ban on lifetime limits in the Affordable Care act was one of the core protections and republicans, republicans said they ought to stay, introducing lifetime limits in medicaid. Raises the frightening question of what happens if somebody maxes out of a Cancer Treatment at age 45 . Are they going to be on the street in old age, capped out of nursing home benefits . Well be discussing that. Finally the trump agenda of Health Care Discrimination turns against Older Americans slashing the medicaid to the bone and transforming program into a cap program is extraordinarily threat to welfare of older people. Medicare helps to pay for two out of three seniors in Nursing Homes. It is essential for seniors that count on homebased care. Even for people 62 or 63, the trump budget hits them with an age tax, allowing Insurance Companies charge them far higher rates than they charge others. Bottom line, the agenda of Health Care Discrimination is out in force in this trump budget. And in my view, it is a comprehensive plan to drag the country back to the days when the Health Care System was basically working for people who are healthy and wealthy and everybody else was on their own. Finally were going to im sure talk about the question of Prescription Drugs. The president famously talked about how Drug Companies were quote, getting away with murder. Those are his words, not mine. The president said they were getting away with murder by setting drug prices so high. The way he talked about the problem americans thought he was going to come out swinging with Big Solutions to the challenge. In the plan last week i still dont see a solution to the fundamental issue, Drug Companies set prices that are way too high. There is not a debate about the fact that the system is broken and it needs reform. But if pharmaceutical companies can come out of the gate with unaffordable prices patients will suffer and i dont see where you fix that with some efforts to play catchup ball. The trump Prescription Drug plan lets pharmaceutical Companies Keep on to borrow a phrase, getting away with murder. Finally, a lot of what the administration put forward last week looks familiar. On the pharmaceutical side some of it is borrowed from legislation i proposed a or recommendations that came from outsiders. There is value in these ideas. There is opportunity to move on bipartisan basis. That is not what the American People were promised. The American People were promised a muscular approach, a position where the American People would know that their government was on their side an helping them deal with this question, theyre getting clobbered as the pharmaceutical window, when they go in to get their medicine. I will wrap up talking about the different part of secretarys agenda, vital to kids. Chairman and i both mentioned family first. Very proud of that effort, for too long the Child Welfare system basically has been about splitting families apart. That is what family first seeks to reform because instead of just two lackluster options, leaving young people in a family setting where they were still going to face problems or sending them off to a future of uncertainty in foster care, we said we would allow states to find safe ways to keep Families Together and families healthier. States could use foster care dollars to Fund Services like Substance Abuse treatment, Mental Health, parenting programs with the goal of preventing a prolonged slide into the crises that end with families breaking apart. I share chairman hatchs view about the Opioid Epidemic. It was good Additional Fund were made available in the recent budget agreement. Now what weve got to do is make sure that the department moves quickly so that the states can get away from business as usual and deal with the epidemic. We look forward to hearing from you, secretary azar. As i said publicly, the secretary indicated in our prenomination hearing and take the initiative be in touch on regular basis to touch on issues. He already has shown he is serious about that with a call here recently. I appreciate it. Look forward to our Work Together and lets try to make more of it look like whats happened out of this committee in the last couple of weeks. Lets make less of it look like the agenda of Health Care Discrimination that i believe is what the budget is all about. Thank you, mr. Chairman. Thank you, senator. Today we have pleasure of being joined by mr. Alex m. Azar. Secretary of health an Human Services. Mr. Azar i want to thank you for taking time out of what i know is a tremendous schedule and for your appearing here today. Because we heard two very eloquent introductions for you just over a month ago i will keep my introduction short and to the point. After graduating with his law degree from yale university, mr. Azar also clerked for the Justice Scalia on the Supreme Court and later became a partner at wiley, ryan before being confirmed as general counsel at hhs back in turn. Then in 2005 he was asked to serve as deputy secretary at hhs where he served as the chief Operations Officer for the largest civilian Cabinet Department in the United States of america. In our government with over 66,000 employees, and a budget of nearly 700 billion. Following his service at hhs secretary azar rejoined the private sector as Senior Vice President for Corporate Affairs and communications at eli lilly and company. He eventually went on tobecome president of lily usa, the largest affiliate of eli lilly. Just last month secretary azar was confirm at his role at hhs greatful for to have you here, grateful for your time, grateful for your expertise and grateful for the service you are giving and about to give. Please proceed with your statement. Chairman hatch and Ranking Member widen and members of the committee, thank you for inviting me here today to discuss the president s department of budget for health and Human Services for fiscal 2019. I would like to begin by joining chairman hatch and Ranking Member wyden our deepest sympathies and prayers for the victims and their families in florida. It is an honor to be here today and it is an honor to serve as secretary of hhs thanks to the support of members of this committee. Our mission at hhs is to enhance the health and well being of all americans. Its a Vital Mission and the president s budget clearly recognizes that. The budget makes significant Strategic Investments in hhss work, boosting Discretionary Spending at the department by 11 in fy2019 to 95. 4 billion. Among other targeted investments that is an increase of 747 million for the National Institutes of health, a 473 milliondollar increase for the food and Drug Administration and a 157 milliondollar increase 2018 funding for. Men and women are hard at work on already, fighting Opioid Crisis, increasing affordability and accessibility of Health Insurance. Tackling the high price of Prescription Drugs an using medicare to move Health Care System in value based direction. First the president s budget bringings a new level of commitment to fighting the crisis of opioid addiction and overdose stealing more than 100 american lives from us every single day. Under President Trump hhs has already dispersed unprecedented resources to support access to Addiction Treatment. The budget would take total investment to 10 billion in a joint allocation to address the Opioid Epidemic and related Mental Health challenges. Second, were committed to bringing down the skyrocketing cost of Health Insurance, especially in the individual and Small Group Markets so more americans can access quality, Affordable Health care. This budget recognizes that this will not be accomplished by one size fits all solutions from washington. It will require giving states room to experiment with models that work for them and allowing customers to purchase individualized plans that meet their needs. Thats why the budget propose as historic transfer of resources and authority from the federal Government Back to the states, empowering those who are closest to the people and can best determine their needs. The budget would also restore ball to the Medicaid Program, fixing a structure that has driven run runaway costs without commensurate increase in quality. Third, Prescription Drug costs in our country are too high. President trump recognizes this, i recognize this and were doing something about it. This budget has a raft of proposals to bring down drug prices especially for americas seniors. We propose a fivepart reform plan to further improve the already successful Medicare Partd Prescription Drug program. These major changes will straighten out incentives that too often Serve Program middlemen more than they do our seniors. Over the next 10 years adding to savings that were already generating with reforms to Medicare Part b payments under the 340b drug discount program. The budget also proposes further reforms in medicaid and Medicare Part b to save patients money on drugs and provides strong support for fda efforts to spur innovation and competition in generic drug markets. We want programs like medicare and medicaid to work for the people they serve. That means empowering patients and providers with the right incentives to pay for health and outcomes, rather than procedures and sickness. Our fourth departmental priority is to use the tremendous power we have through medicare as the largest purchaser of medical services in the United States to move our whole Health Care System in this direction. This budget takes step towards that by for instance, eliminating price variation based on where postacute care is delivered, rationalizing payments to physicians and supporting investments in telehealth and advancing the work of Accountable Care organizations. The future of medicare must be driven by value, quality and outcomes, not the current thicket of opaque, unproductive incentives. The president s budget will help accomplish three important goals at hhs. First making the programs we run really work for the people theyre meant to serve including making insurance affordable for all americans. Second, making sure the programs are on a sound fiscal footing that will allow them to serve future generations too. And third, making the necessary investments keeping americans safe from natural disasters and infectious threats. Making our perhaps work for todays americans, sustaining them for future generations and keeping our country safe is a sound vision for the department of health and Human Services and im proud to support it. Thank you, mr. Chairman. As you may know the finance committee is undertaking a bipartisan process to identify ways to address the Opioid Crisis or epidemic in medicare and medicaid so that the right incentives exist for addressing pain and addiction. When you testified before this Committee Earlier this year you mentioned that addressing the Opioid Epidemic would be one of your Top Priorities and im personally pleased to see a number of proposals included in the president s budget on this particular topic. Im sure you helped do that. Will you commit to working with this committee to find Bipartisan Solutions to address this epidemic within medicare and medicaid . Absolutely, mr. Chairman. Well i appreciate that. I am not going to ask any further questions at this time. Well turn to the Ranking Member. Senator wyden. Thank you very much, mr. Chairman. And im going to start, mr. Secretary, as we have talked about this matter of junk insurance and particularly what seems to be an Administration Plan to green light it. I recognize this didnt essentially commence on your watch but youre there now, so i got to make sure were going to have a sensible policy. Would junk insurance is all about is making sure that Insurance Companies can charge more for people with preexisting conditions and include arbitrary caps on the amount of care n a lot of ways junk insurance just turns back the clock. When i heard about this, the first thing i thought about when i was director of the gray panthers it was common for an older person to have 15, 20, 25 policies that were sold to supplement their medicare. They were called medi gap. Finally we wrote a bipartisan law, senator dole, for example was very helpful in it, which drained the swamp on appropriate phrase for the time. It would seem to be what is bubbling up again, different population group, not seniors, but the same sort of thing. Were going to green light policies that are appropriately called junk because they arent worth the paper they were written on. Idaho seems to have the most active effort. Once again people spending hardearned money on a plan they need only to find that theyre being ripped off by an insurer. So thus far blue cross of idaho is the only insurer who has applied to sell the junk plans and ive got the application here and it looks all about finding out if people have preexisting conditions so they can discriminate against them, charge them more. All the questions in section 5a deal with that issue. Have you been pregnant . Have you been tested for allergies . Has anybody had a claim over 5000 . If an insurer is following the law banning discrimination against those with preexisting ing conditions, what are all those questions about . So, senator wyden, i have seen the media reports about the blue plan request and the actions in idaho. I have not yet seen the plan or have received any type of waiver request. I can assure you that if we do receive that, if that does progress forward well be looking at that very carefully and measuring it up against the standards of the law as is our duty. I appreciate that. I know this is new for you. As i understand it is not a waiver. Idaho say were going to do this were going to do this because were a state that wants to do it but there is a federal law, something i fought very hard for. It was right in the bipartisan proposal. Center peas, seven democrats, seven republicans. Airtight protection, airtight protection for those that would have preexisting condition. Now what this is going to be all about, and, as, when we talked in the office, youre not sitting around reading paper backs in your job. This will be a question whether the department will say federal law, which protects people from discrimination against preexisting conditions controls or idaho can start something that just moves america back towards yesterdayter year where we can have insurers beat the stuffing out of people with a preexisting conditions. So lets do, this is new for you. Id like you to get back to me, let us say within 10 days, with respect to how the department is going to pursue this. Because i think that this case is really being watched. This is the one that is really going to determine whether states can just on their own say were going back to yesteryear. So this has very, very substantial implication and to have the blue cross id hoe form. My second request is enter a letter from the secretary to 15 organizations that represent millions of patients expressing serious concerns with essentially the points im talking about. That idaho is breaking a federal law. The first time i heard about it, maybe its a waiver and will be complicated. Im, this knit a waiver. Well do it. I want to enter into the letter from the 15 organizations that represent millions of patients expressing concerns that i have with idaho breaking the law, the harm it will have on patients, implications as a precedent. And then is it satable to you will get back in some way to outline how the department mans to pursue this within 10 days . Im very happy to get back. I dont want to commit to the 10 days. This has to run first theyre applying to idaho. Idaho will have to decide its own thing under its laws that it has. And then anything would presumably come to us. I will be happy to work with you and be very transparent about that process. I just dont, i dont want to prematurely be involved there is even a matter in controversy at the state level. So all weve seen is a press report that the blues have submitted an application. I dont know whether it would even be approved by idaho or certified compliant under the aca. Its a question of timing. I can assure you well be looking at the right time, looking very searching against the legal requirements. Im over my time. Here is what concerns me. Theyre not planning to come to you and ask permission. They have made the argument they can just do it on their own. So this idea that were going to just sit in our offices back here and wait for somebody to tell us, oh, were going to discriminate against people with preexisting conditions, that will not cut it with me. It doesnt cut it. No, that is neither what i propose. How about if we say i will be told how the departments going to pursue this within 30 days . I hope, i believe that would be acceptable. My only issue is, i need a case in controversy. I need to know there is actually something happening. Im over my time. I made the point. Dont see any difference the need for the department to be engaged. That will be helpful to the senator. Senator crapo. Thank you, mr. Chairman and thank you for being here, secretary azar. I am from idaho. Im very familiar with what idaho is doing, once again, this is like groundhog day. Every time a new idea for how to fix the Health Care System comes out it is accused of eliminating preexisting conditions as well as every other possible attack that can be dreamed up against it. I think it is appropriate for you, mr. Secretary, to wait to see exactly what is developing and evaluate it carefully. And i would encourage all of my colleagues to review what is actually being done rather than just jumping right back in and, my good friend from oregon and i worked very closely together on many, many issues. I look forward to working with you on this issue. This plan, as i understand it, does not eliminate preexisting conditions. When we did, when the grahamcassidy proposal was made attack was as we give greater responsibilities to states to be that incubator of new ideas and new approaches to health care that it was going to get rid of preexisting conditions. That it was going to drive people out of the marketplace. That it was going to cause people to lose their insurance. The reality is the efforts being undertaken by the people in idaho is one to protect and expand the opportunities and access for people have to insurance of their choice, insurance that will work for them, and yes it does move away from the notion that the only insurance policy anyone in america should be able to buy is one from this committee or this congress or this federal government decides they can buy. Fortunately in the tax legislation that we just passed we eliminated the tax penalty for people who do not want to buy the product the federal government wants to force on them. And now the states are seeking to have some flexibility. In your testimony, mr. Azar, you talked about the fact that we want to encourage the states to experiment and that Additional Resources are going to be provided to the states to allow them to experiment. I understand what the law is and as i evaluate this, i dont see a violation at all. Idaho is still providing obamacarecompliant plans for anyone who wants to purchase them but they are allowing others to have options. And if the idea that people in america can have options, comply with all the obamacare mandates for anyone who wants it, but allow others who want to buy a different kind of insurance policy to have an option, the idea that is a direction that we should choke off right at the beginning is one that i resist. I would just like i know you cant comment on the idaho situation specifically but i would just like your observation on the notion that we need to facilitate and incentivize and provide Additional Resources to the states so that they can do exactly what many states are trying to do right now, which is to find a way to give their citizens greater choice and greater access . Thank you, senator. I think any consideration of a state proposal or any matter requires great deliberation and caution and care. I cant simply state a view around media reports about a States Program but i think what were seeing here is a cry for help. Its saying that where we are right now with our individual market because of the structure we have is not serving enough of our citizens and there are too many citizens who simply can not afford the insurance packages we have in our program because the way the statute is designed and the way it has been implemented. So that is why it is so important that we work to give states flexibility, so we try to offer for those 28 million americans who can not afford access to the individual market, Affordable Care act plans, that they can have other options to choose from that may meet their needs. Then also try to fix whats in the, in the program also to help make that as affordable as possible working together with the congress. Well thank you. I will just conclude with an observation. In addition to the program that my colleague from oregon referenced, i expect that idaho like many other states is probably going to apply for a waiver or two from hhs with regard to some aspect of federal law. As states are starting, i think increasingly to seek the flexibility that they can get from the federal government to do this kind of Creative Work on our Health Care System, to help us find the right path to provide the best and the most effective and efficient and inexpensive insurance that we can find. And i would just encourage you not just with regard to any applications that idaho provides but with regard to all 50 of the states as they seek to ask you under the authorities you have, to grant waivers to allow them to do this kind of thing and to work to improve our Health Care Markets that you give those applications very careful consideration. Thank you. Thanks senator. Senator carper. Thanks, mr. Chairman. Several of my colleagues have expressed their remorse and sorrow over the latest mass shooting in florida, parkland, florida. I share that. I grew up, born in West Virginia, grew up in virginia. A family of hunters. My dad introduced me to hunting at very young age. Got my first bb gun, when i was 10. My grandfather died, he willed his shotgun to me. I used it many years hunting in virginia with my dad. My dad was a gun collector, sold guns, and until near the end of his life in florida. I believe, my family believes in the second, the Second Amendment to the constitution, the right to bear arms. I want to say though, im tired, sick and tired of opening a hearing like this and we express our remorse yet another mass shooting. This has got to end. My dad used to say we ought to use some common sense. In this case we ought to use common sense with respect to guns and gun legislation. Senator feinstein has legislation, nofly, no buy bill. If youre on terrorist watch list you shouldnt be able to buy weapons. We cant even get that passed. A sad commentary. It is colleagues, we got to use some common sense and use our hearts here. Enough, enough of these expressions of remorse. I know theyre heartfelt but enough. That is not what were here to talk about today. I just want to say, mr. Secretary, congratulations to you. Thank you for the dialogue and conversations that we had during the nomination process. Thank you for the conversation we had earlier this week. I look forward to that as well. Sometimes we vote our hopes over our fears here. I voted for you for your confirmation out of my hopes. We have this moral obligation i talked to you about with my colleagues until theyre sick of hearing it. We have moral obligation to the least of these. Moral obligation to make sure everybody has a access to health care. We have fiscal imperative to make sure we do it in fiscallyresponsible way. The one of the Ways Community federal health centers. Chip program, latest extension of your creation with ted kennedy. Recovering governor, former chairman of National Governors association along with mark warner chairman of the nga we know what states can do given flexibility. By the same token people can buy cheap insurance. It is not worth the paper it is written on. We have to be careful, be mindful of that i want to talk a little bit our efforts to move afrom feeforservice or value based system, mr. Secretary. I want to before i do that, i want to mention despite efforts of administration to, id say to undermine even sabotage our Insurance Marketplaces almost nine million americans, over 95 of the enrolled population in 2007 signed up for insurance plans for 2018. Americans support, want to keep the Affordable Care act in contrast. President s budget proposes to repeal the aca. Replace it with proposal for subsidies that make insurance more affordable and cuts 1. 4 trillion out of medicaid. You were not in the administration when the committee reviewed this proposal last year. Nearly every patient group, nearly every physician group, every hospital group, Health Insurance group, strongly oppose the president s proposal. More than 2 3 of governors urged congress not to pass that proposal. Brookings institute found more than 20 million americans could lose insurance if we go that path. Individual with preexisting conditions could lose, would lose guarranty of affordable Health Insurance. With that much concern from every corner of our Health Care System in this country you think it might be worthwhile first to recampaign the proposal, work with patients, doctors, health care providers, to make substantive changes before offering this idea up again . Please. Our proposal to change it to 1. 2 trillion Grant Program to the states, retains protection for preexisting care, newborn care, reconstruction after mastectomy, coverage for those under age 26 under family plans. Im happy to work with you on details to make this program work to have it make sense. Where we are isnt working for some people its a challenge. I will work with whatever the congress has given me to try to make it as affordable as possible for individuals, as much choice as possible. We would like to pursue legislative change to see if this can be the approach that, because insurance is so complex i dont think, from the federal level we can do it all. Your colleague senator cardin has a state that will take a different approach. I Love Laboratory of states looking at this very complex area. Very good. Our secretary offered a couple of way to stablize exchanges. This administration up until now is hellbent undermine the exchanges, destablizing exchanges. I want to thank you for encouraging developments there and lets say i think there are things we can Work Together, including reinsurance but well talk about that later. Thank you very much. Thank you. Senator, senator from georgia. Senator isakson. Thank you, mr. Chairman. I have can testify that you hit the ground running your first weekend on the job on the phone Long Distance with me talking about the cdc i appreciate that very much. I also know you had no hand in crafting this budget. You were not on board when it was crafted or on hand when it was done. With regard to the centers for Disease Control in atlanta, im greatly concerned this has one billion dollar reduction at a critical time for our containment laboratories and research and Development Done there as well as our preparedness at cdc. Cdc was on the job ready to go when ebola hit. Didnt need additional appropriations. Hit the ground running. Appropriations came later. We stopped an epidemic that would not strass have hit after from but around the world. Cdc was on the ground after anthrax broke out in 2001 in washington against members of the senate and house. Theyre our safety blanket. It is finest facility that there is. To cut almost 10 , one billion dollars in one fell swoop to me is unconscionable. Have you had time to look at cdc budget . Will you work to get it to an appropriate level to meet the need we place on it every single day . Senator, you know care i give the cdc, value i place domestically an internationally. As i look at budget for cdc, the biggest part of change there is really two transfers part of the reorganization that was begun at hhs. One is to move the leadership of the Strategic National stockpile and budgeting under assistant secretary of preparedness and response. That move where it reports to. Doesnt even change the atlanta aspect. It just moves where it reports to. That is one major chunk. The other is National Institute of Occupational Safety and health, integrate that. Not moving it, but leadership to be reporting into the National Institutes of health because of the research function. Netnet it is only about 100 milliondollar reduction on the operations of cdc. What im really proud of is that we were able to get the cdc budget regularized here in our proposal. Weve been operating out of prevention, the prevention fund. We have now moved that over to 900 million of discretionary. Moved that over, so that the core operations of dcc are regularized in the budget and dont just sit there as a payfor as we look at other legislation. I think that is really critical to the longterm stability of cdc, that we show that that is not variably here. It is really built into the base of operations. So i share the commitment. Look forward to working with you on cdc. We transition to a new director, cdc is in transitional leadership role right now, we dont need to lose focus on importance of that agency and see to it were funding them to the level they need to be. One other point on the funding containment laboratories, economic obsolescence, practical obsolescence, replacement next year. That is where a lot of bad, bad pathogens are out there. They work every day with dangerous pathogens, so we want to make sure those laboratories are as safe as possible. Yes, sir. We had another bill that went through, when the train went through, left the station a lot of cabooses on the train, one was reimbursement for Home Infusion. Familiar with the legislation i worked on a long time. Has deadline of january 1st next year to develop reimbursement on under part b to see to it those reimbursements of Home Infusion therapy take place. Its a real reduction in the cost to us, Home Infusion is lot better than hospital infusion in terms of its cost and what it costs the patient, better place for the patient to receive care. Would you work with me to see to it january 1st next year we get that in place so those reimbursements are done . Im not familiar with that provision. I will work with you to make sure we get the job done on time. I would not expect you to be familiar with it but i would not expect you to leave here without being made familiar with it. Children graduate medical Education Program and one program with a net decrease in the appropriation. We have those programs are fantastic for creating good physicians and new physicians in health care for children and elderly. Will you work with me to see if we get the maximum appropriation, appropriate to continue to meet the need of people of the United States for graduate medical education . Yes, absolutely, senator. What were doing with the proposal on graduate medical education is to try to pull the three different streams together and actually give flexibility to make sure that were able to invest in specialties and underserved geographic areas that need it the most. Right now were very ossified from 1996 Program Levels and sort of stuck there. This would grant flexibility to insure that the money, that scarce money is going most needed for Health Profession development. Happy to work with you on that. Looking forward to work with you, wish you best of luck in your responsibility. Thank you, mr. Chairman. Thank you, senator. Senator cardin. Thank you, mr. Chairman. Secretary azar pleasure to see you here. I want to talk about a few issues in the president s budget following our conversations at your confirmation hearings and discussions that weve had. You and i talked about our commitment in regard to Minority Health and Health Disparities. The institute of Minority Health and Health Disparity at National Institutes of health and the off off offices for Minority Health included in the hhs. I was disoop pointed to see we disappointed to see we put more resources in hhs strongly. There was reduction in the National Institute for Minority Health and Health Disparities and reintroduction of the resources at Minority Health at hhs. Can you share with me the rationale of those budget cuts and reassure us of your commitment to the mission of Minority Health and Health Disparities. Yes, senator cardin. Thank you for raising that. At the nih issue i if i could i would like to get you on that, i wasnt familiar, 14 days on the job at that granular level with the nih budget. We were delighted to keep nih funding at level it is were proposing. I dont know about some of the ups and downs, i would like to get back to you on that if i could. Office of Minority Health, one thing is still and scarce tight budget environment. One thing we tried to do is really prioritize direct Service Delivery programs and scholarship and underserved area, promotional activities around Health Professions. So as we looked across the budget, thematic approach was taken, is this delivering direct care in minority communities or is this supporting the development of Health Professionals who will serve in underserved areas through scholarship and reimbursement programs . So that was the thesis that we tried to operate from. More general problemtic activities would be programmatic activities would be deemphasized in the budget tradeoffs there. It is not minimization of Minority Health problems. It was tradeoff on be focus on health and Service Delivery. That is helpful. If you could work with our office so were aware of your strategies. Together we could be more effective. Be sure you have the resources that you need here. Able to deal with the mission that we believe in reducing disparities in our absolutely. If we could Work Together i appreciate it. I would just caution on another area in regards to the budget imposing some additional costs on Emergency Care which turns out to be nonemergency conditions and my concern here is that were seeing an attack on the prudent layperson standard in the private Insurance Marketplace. Congress has passed legislation on this to make it clear if it is prudent for you to seek Emergency Care it is going to be reimbursed and were very happy if you end up in the emergency room and the condition is not lifethreatening. Thats good news but then you might get a shock when you get the bill and recognize it is not being paid by your insurance company. So the policies in the Government Programs become particularly important because they are used as goalposts by the private companies and it looks like youre now imposing additional copayment and costs on Emergency Care where the individual may have gone into the emergency room for proper reasons but now find there is a cost issue which could be used to deter people from seeking care who need it. So i believe youre referring to a suggested proposal thats in the budget would allow for a medicaid copays for emergency room visits that are determined to have been misuse of emergency room visits. I agree with you i didnt know it was misuse. I thought it turned out not to be Emergency Care. The standard, we would need, we would want to work with you to make sure any legislation there is done in a common sense way. There is, zero desire that it should deter anyone from going to Emergency Rooms for care they ought to be going into. We need to make sure there is enough of a cushion that is common sense and doesnt, as you said, create a situation where it deters people to go in when they ought to go in. We work adlong time on the prudent lay standards. There were horrible standard in the private sector, preauthorizations and things like that jeopardizing peoples health. One point i would like to make, i disagree with the budget on the medicaid cuts and basis behind the medicaid cuts but i want to raise one issue would urge you to be very careful about. We dont really have a longterm care policy in america. And the states have the lions share of the burdens under the medicaid system for longterm care. To the extent that we put more pressure on the states on Medicaid Programs, we jeopardize longterm care which is a criticallyimportant it our seniors in america. And i just think it is important that whatever policies we adopt here at the federal level, were mindful of the negative impact it could have on care for seniors. We would like seniors to be able to pay for their longterm care. We would love them to have third party coverage. Most do not. And therefore fall under the Medicaid Program. And if we put too much of a strap on the Medicaid Program, were going to dep adjacent longterm care for our seniors. Thank you, senator. Senator portman. Thank you, mr. Chairman. Thank you for coming before us. You are now fully in place. It is great to see the good work you already started to to do. Interested in this issue of Substance Abuse and particularly the Opioid Crisis. I talked about it at some length. I would ask you a couple questions about that. First with regard to the funding i notice in your budget you have Additional Funding for hhs and samhsa. In this body, this fiscal year, actually increased funding for comprehensive Addiction Recovery act programs over the authorization level. We have 267 million for fy17 for instance, over roughly 181 authorized because we think these evidencebased programs are ought to be where we direct some of this funding, rather than throwing money after the problem to find out what works and this is the right kinds of treatment programs, longterm recovery programs, prevention programs, helping our firstresponders. My question to you, with the president s budget indicating that hhs would have Additional Funding and with our recent budget indicating there would be 6 billion directed toward the effort over next two years, would you support Additional Funding for these evidencebased programs under the comprehensive Addiction Recovery act . I dont know where the breakdown is on the additional 3 billion in 18 and 3 billion were allocating in 19. If i could get back to you. I want to see if we put in the allocation funding for those particular programs. Im just delighted by the support of congress and of the president here and amount of funding. Were going to be able to support our addiction and treatment programs at historic levels. We already put more money out last year than ever before in history to help with the Opioid Crisis. With these two years funding and 10 billion total im excited to be able to work with all of you on these efforts. I would say that the 267 million that was unprecedented we appropriated for this fiscal year is relatively small amount compared to the 10 billion you say hhs was budgeted without specificity as i see it in your budget. We want to work with you to make sure the funding is used for evidencebased programs that work. We have example of one that works. Im concerned that your budget will make less effective, the drugfree communities act. I was author of this many years ago in the house. Maybe i have a little bit of bias toward it but i also spent nine years as chair of our local coalition which was funded initially with seed money from this program, over 2000 Community Coalitions were formed around the country in response to the drugfree communities act which essentially provide matching fund, almost seed money for a short period of time. We required that these coalitions by the way have performance measures. So we know whether theyre working or not. We think this is very effective prevention and Education Program at the time of an Opioid Crisis. It seems it us exactly the wrong thing to do. To take something thats working and risk its ability to be effectivity in the future from case of your budget, ocp to hhs to combine with other prevention programs different in kind. I would ask you to take a look at that. If you can explain to me this morning why you think it ought to be moved. I would hope you frankly would not promote this idea. I dont think congress will go along with the idea. If they dont i will fight against it. If it aint broken, lets not try to fix it when we desperately need prevention and education out there. I hope im remembering the correct program. I believe the change that you may be referring to is the movement of the program from funding from omdcp to samhsa. Thats correct. We are regularizing the funding, omcdp is not granting organization or dont have the capabilities or staffing. We do that already. Putting the money where the function already is. I dont believe it is in any i in no way deemphasize of the program. It was more regularizing the function over to samhsa where the work was getting done. I believe that was the case. I will be happy to just confirm that. It has gone back and forth over the years. It was doj for a while and hhs in terms of grant making we talked about but direction comes from omcd and taking inneragency approach and involves a number of departments an and agencies. This is something that is actually working out there at a time we need more help than ever. I thank you again for your service. My time is expired. Exempt for the questions i will submit for the record. Again, appreciate the fact that you have stepped up and look forward to working with you on the Opioid Crisis and other matters. Senator toomey. Thank you, mr. Chairman. Secretary azar, thank you for joining us. Good to see you again. The, administrations budget in your area i think strikes some constructive balances. You have emphasis on some important Priority Areas like senator portman has alluded to, opioid Abuse Research and treatment. I do hope well be doing more to understand root causes of addiction as well as treatment of addiction. I think we have a long way to go there. Also, ideas about lowering cost of Prescription Drugs and medical research generally. All good. I also want to commend you for addressing a huge, huge fiscal challenge we have which your budget does address and i will ask you to comment on in a moment, dealing with the unsustainable spending of our entitlement programs. I think we cant underscore enough, you can not tax your way out of a problem. There is no revenue solution to federal Government Spending programs that are growing faster than our economy. Ultimately tax revenue can never for long grow at a rate faster than our economy. It strikes me as long struck me one of the sensible places to begin to address this is with medicaid, in part because it is the biggest Net Expenditure Program in the federal government. There is no dead dedicated revenue scream as Social Security and medicare. Medicaid has huge outlays. It has been staggering. In 1980 the federal spending on medicaid was 2. 4 of our budget, half a percent of gdp. Today it is 10 percent of our budget and two Percentage Points of gdp. Yesterday the cms act wear run on our National Health expenditures medicaid will grow at 6 a year. 6 . Nobody believes that our economy is going to grow at 6 . That means this program will continue to consume ever greater share of federal spending an the economy if we dont do something about it. Well one of the things we might consider doing about it is restructuring this program so that there are federal caps on spending on a per capita basis. This of course is a completely bipartisan idea. First floated seriously by president bill clinton, supported by Donna Shalala and howard dean and the American Academy of pediatrics. At one point every democrat in the United States senate supported a establishing these per capita caps in a restructure of medicaid. And your budget, as i understand it, further would allow this per capita cap to grow every year, and you would tie it to a measure of inflation we might actually be able to keep up with, the cpiu. And so the net effect of that, medicaid spending every year would grow. Medicaid spending per beneficiary would grow, but it might just grow at a rate we could afford, that we could keep up with. Now i think it is also critical thaw tie this to giving states more flexibility to discover ever more efficient and effective ways to deliver services. My colleague from rhode island and i justed yesterday how many important and how many opportunities there are to encourage the development of more efficient ways to deliver health care services. So im just wonder if you elaborate a little bit how you envision this reform idea. How it would still work for the people who need this program. That as a necessary criteria of anything that could possibly be considered successful and, and if you would care to elaborate on how appropriate setting, i know you touched on that a moment earlier, how that might fit in this, i welcome your thoughts. Thank you, senator. Actually the president s budget goes exactly along the lines of the concerns and the solution you just expressed. It adds into it also helping to fix the concerns that we have around the individual marketplace. So changes medicaid to allow these per capita grants to the states, they would have tremendous flexibility how to run their Medicare Program but they would have all, they would have the skin in that game to run that program but within a budget. And it would combine money in 1. 2 trillion program out to the states that would allow for coverage of, what we currently call the Medicaid Expansion folks as well as the individual market. So money could be used as states determine to create really effective mechanisms to provide choice, tailored insurance for individuals in their state that would still have protections for preexisting conditions, maternal care, newborn care, et cetera. That is what i think is the really constructive aspects of this budget is putting all of those people together. It gives the state a real tool to create effective risk pools, that can create sustainable, affordable insurance in the future and even core medicaid would grow from 400 billion to 453 approximately dollars over ten years. So it is still, even the core traditional medicaid, as you said would grow because of inflation adjustment. Im excited to work with congress on this as a possible idea. Thanks very much. I look forward to working with you. Thank you, mr. Chairman. Senator whitehouse. Well, thank you, chairman. You looked lonely down there the at end of the panel. Its a long way down here and im afraid secretary azar will get a crick in his neck requiring medical treatment turning so far to see me. [inaudible] i appreciate it. When we met in my office, i showed you, i think, one of my favorite charts which is this one, which shows the cbo estimates for total federal medical expenditure. And the red line along the top was the predicted total medical expenditure as of 2010. And then the Affordable Care act went into effect and time went on. It turned out instead of that red line, what actually happened was the green line. Here in 2017, cbo did another forecast, so from this dot forward, the green line here is the newer forecast. As you know from our budget process we think in 10year increements in the budget process. So this green area is the 10year budget window from 2018 from 2018 to 2027. In that period we reduced anticipated federal Health Care Costs by 3. 3 trillion, according to those estimates. Now, i dont know how that happened and ive got a terrific staff but theyre not like your staff. I think it should be a matter of urgency to try to really think hard about why that happened. And i hope that you will take a look because if we can find 3. 3 trillion if federal Health Care Savings without inflicting pain on seniors and other beneficiaries, that is a goal worth fighting for. Now my, sense of it, to go from the global scale down to the local is it has a lot to do with Delivery System reform and payment reform. I want to focus on the group i mentioned to you in our meeting, the coastal medical Provider Group, a primary care Provider Group in rhode island which was one of the early pioneer acos. In the five years that they have been an aco, they have reduced their costs per patient per year by 700. And they werent highflyers to begin with. In 2016, which the year we have the last complete data for, they were down 700 from their previous measure but they were down 1000 from the average. So it is not like they were one of the most expensive people saving when they began. They still saved 700 per patient per year. The patients couldnt be happier. I can tell you firsthand. Those savings came through better service, better care. So it seems to me if you take 700 per patient per year and spread that across the federal Health Care System you look at numbers like 3. 3 trillion. There is a connection perhaps between the payment reforms that empowered coastal medical to change their means of practice to save that money and better serve their patients and that big projection savings that were seeing. From one Provider Group to save 28 million bucks is pretty significant and you start adding in the multipliers nationally and i think theres a big gain. So i really want to work with you on this here i would urge that the more that we talk about repealing obamacare and having those fights, fine if thats what you want to do, i dont think thats good policy. I dont think thats good for the recipients. I dont think thats good at all. But what i dont want is for you to get so involved in that fight that you wont work on the Delivery System reform piece which i think is strongly bipartisan, completely beside the obamacare wars. I dont think the people to who want to repeal and replace obamacare the most want to go back and repeal and replace. They have an explosion from the home state doctors and providers if they tried to think this is a safe bipartisan place where Real Progress can be made at a just want to take my time with you today to urge that, and we are counting on a visit from you at some point to meet our team up in rhode island with other primary care physicians who are producing some of the results and theres a lot of excitement and satisfaction about that. If i could say, i totally agree about the need for the valuebased transformation. I i think its a proper bipartisan issue. We can improve quality, decrease costs and make a program sustainable. Ill be harassing your folks at the staff level for more information out of like the macro program, the center for medical innovation, all those things. I hope i will get good answers to my questions. Thank you. Senator cantwell. Thank you. Welcome, sector azor. You mentioned the discussion with our called account with a proposal coach medical training and Community Clinics where most physicians actually care for patients and how would it help the Community Clinics that are not under the current cap . So in terms of, is this the Community Health Center Program on gme youre referring to . Your proposal to change the structure. So just try to understand how would it address a couple of things that are in the need area like Community Based clinics training and Teaching Hospitals that are not under the current, you know, current cap program. We are not proposing a change to the Community Health centerbased Training Programs that we have. Those are separate. These are the medicare, medicaid and the childrens run hospital programs on gme. It puts those together so that we dont operate under these artificial 1996 base caps and instead can really focus on their providers that can help train our physicians and get them to both make sure were funding in the underserved specialties, areas where we need physicians the most to make including primary care . Absolutely. As well as underserved areas, how going make sure the money to get training and physicians that are or will serving areas that are lacking appropriate physician care. So if youre saying youre willing to take on the big behemoths east coast teaching institutions, having most of the capacity, im all with you, okay . Because i think the divergence of medicine and where were going we need to train physicians in all sorts of ways. Im all for that. I dont like the fact that youve actually then cut the program, because from a estimation what i see in the Pacific Northwest and a shortage and the whole notion of everybody having a medical home, and we very excited about p for medicine, prescription, preventive, personalized so the physicians are being trained on what you would i hope describe as a way to drive value into the system and get off of feeforservice. So what about that number . Why cant the program went by pretty sure need probably like four or five times that amount . Well, the overall come one of the philosophies we had was to try to move some of our programs were right now we having medicare kerry diverted across the the whole healthcare profession, as a look how do we make medicare more sustainable. Our proposals stretch of the life of the program for another eight years as a result of it and its a tough choices i will admit that, but right now we are having medicare and Medicaid Fund graduate medical education that private insurers, commercial people get the benefit of. Theres a bit of recalibrating in there that from the federal l taxpayer perspective and medicare, medicaid, that transition to get that back a bit as a result i think its 48 billion all of where we stand right now, over ten. But if we examine the shortage of the need you wouldnt cry if congress basically boosted that number . I would have to do so within our budget targets. If that goes up Something Else has to go down. Thats the age old challenge of these budgets. Please mark me down as very counter to what senator toomey just that. I believe that we have a growth in our medicare, medicaid population because we have a burgeoning baby boomer population that reaching retirement. So the notion that some people think that you should get medicaid and medicare or block grant medicaid as a way to save dollars just because the population is growing because of the demographics in our population i just make is wrongheaded. Do i think there is the efficiencies . Weve had a chance to talk about rebalancing, thats a huge, huge savings but the notion that somebody after giving away billions of dollars in tax breaks to big corporations want to conferencing now we have to block grant medicaid as the only solution because its growing in numbers because of demographics, is just, i just dont agree with it, as my providers have told they come hospitals, they do e plot granting proposal is nothing but a budget mechanism to cut medicaid. So what did you support is the efficiencies that were driving in the northwest and implementing those in the system which are driving, who doesnt want to stay at home and get longterm care . My college just mentioned who doesnt want to do that . That is onethird the cost. If you could comment on rebalancing from nursing home care to communitybased care as a big savings. For some individuals, institutional nursing home care meets their needs and is what they need. I and as i said at my confirmation hearings a firm supporter of the notion of homebased care and these alternative ways i believe can save us money. I believe for many it can be the best solution. It can be the way to age with dignity. I am very supportive and very much want to work with you on ways we can generalize that more across the United States. I appreciate that. I just am very concerned about some of my colleagues. We have been very suspecting that this is what might happen after the tax bill passes that people go back to try to block grant medicaid, and Markley Dennis very opposed and we are already doing the job. We are already doing the job of reducing the cost. So the notion somebody wants to create a budget mechanism to cut people off medicaid, my providers, community services, they are just not going to support it. Thank you, mr. Chairman. Senator nelson. Mr. Chairman, thank you for the kind comments, at of severl with you, with regard to the slaughter of 17 students and teachers. And senator rubio and i will be addressing this issue on the floor of the senate at noon today. Mr. Secretary, i want you to know that you are a very prepared individual. You are a fine person. When you hear on your confirmation hearing i asked you several questions about medicaid and medicare, and you sidestep the questions. About cuts. And now coming forth just a few weeks later with the budget, sure enough you have about 1. 4 trillion over ten years in cats to medicaid cuts and the states will have to plug the holes by raising taxes or cutting other parts of the budget that they are responsible for, like education. Estate alternatively could choose to cut medicaid benefits or drop people from the program or cut payments to providers. How would you expect the state like florida that has a big population to afford to cover the higher cost . So on medicare one thing that i would want to emphasize, we are proposing to congress to make some changes and how we do various payments to providers but we are actually not suggesting changes that would impact the beneficiary. The only ones we have would impact beneficiaries are around truck pricing that we think would have a very positive effect for beneficiaries in terms of their outofpocket spending. What we do is the net changes to medicare the we propose is 250 billion over ten years, which is about a 2. 8 reduction, but just to give a sense of perspective that takes medicare which is going at 9. 1 annual rate of growth over that ten year timeframe and changes that the 8. 5 rate of growth. You are talking about medicare. My question was medicaid. Let me ask you then on medicaid. For example, veterans rely on medicaid 70 of seniors in Nursing Homes rely on medicaid in florida. So captain medicaid benefits capping could lead to states cutting these benefits to veterans and seniors get what you say to them . We believe states and the best position to decide how to use the money to allocate among various population. So for instance, the core medicaid continues, grow some 400 billion, to 430 voting over the ten year timeframe and they will replace the Medicaid Expansion and the Affordable Care act, individual markets program with the 1. 2 trillion grant, thats very flexible, on expansion population the states and then do not have that 10 copayment federal matching that they would have to come up with to do that. It actually gives them flexibility and it is found money for them in that sense. Thats what is typically the case with a block Grant Program or turning it over to the states. My state is subject to hurricanes. Puerto rico is subject to hurricanes. We saw whats happened with medicaid. It has to respond to a Public Health emergency in a natural disaster, and if your response is that oh, further Medicaid Funding would be provided after a hurricane, the fact is that congress waited nearly five months before passing disaster aid for hurricane victims in florida, five months, and 32 months after Flint Michigans lead poisoning. I know what your answer is and you will provide it and we have a significant difference. Let me ask you this specific question. States faced a 1. 3 billion in higher medicaid drug costs with the introduction of the then new hepatitis c drug in 2014 by cutting medicaid. Are you suggesting that states should cover, not cover these kind of breakthrough treatments that cure chronic conditions and come with high cost . Absolutely not. In fact, that case is a really good example of how all of our Payment Systems are really not equipped to deal with what we would call curative therapies. I look for to working with you and commit on our Payment Systems, just cant handle the notion of a high cost drug that we would pay for but get the benefit that over the course of some of these entire lifetime from a single years expenditure. We need to be creative and well get to think about ways all of our programs including the commercial marketplace can handle in the future products like that. Mr. Chairman, in closing i just want to point out that in a gross state like your state, especially my state thats growing at 1000 people a day, where we educate the doctors and then we dont have the residency programs, they end up going doing the residency outside of the state of florida and they usually stay and practice there, and yet we aboard the cost of educating them. And when you start cutting 48 billion in cuts over ten years to the graduate medical education payments, its going to severely hurt a state like ours that is a gross state that desperately needs those residency programs to keep our doctors. Mr. Casey. Thank you, mr. Chairman. Mr. Secretary, good to be with you. I guess you been on the job about a month. 14 14 days, okay. Less than a month. We are grateful you are here and you and i have had discussions before, and certainly in this setting about medicaid. Our approaches to it differ so i want to raise it with you in the context not just of the program but also what i believe the administration has been trying to do with regard to medicaid. And secondly, some kind of pennsylvania specific challenges. Challenges. When i think about the program, both the core medicaid and then expansion, ill try to think about in terms of the people that are impacted. In our state lots way to discover, more eventually people have been, but also you can think about it with three numbers, 40, 50, 60. 60. 40 of the children in pennsylvania, the 2 of individuals with disabilities in our state, and 60 50 of individuals and 60 of individuals who are, in fact, nursing home residents. That as you can tell is a big, big number, or three big numbers. In our state with 48 Rural Counties out of 67. 67. And just in those Rural Counties, 180,000 people got the benefit of Medicaid Expansion. For their healthcare. Then another way of looking at it is the horror which you know well, the horror of the Opioid Epidemic and the overdose, overdoses that come with that as well as related overdoses. Just in pennsylvania we look at it between 151650 overdose death rate is up some 37 . Its higher actually in the low 40s i guess for rural areas. You are a native compute roots in pennsylvania. The overdose death rate has gone way up, 94 deaths just in Cambria County in 2016. So i raise all that because medicaid is critically important to our state. Its especially important to Medicaid Expansion part of the story is especially important to deal with the Opioid Crisis. Because its basically the number one payer for those who need treatment and services. My real concern is twofold. Number one is that the administration i believe, more than a year now, has been sabotaging the Affordable Care act, taking administrative actions doing everything it can to undermine the Affordable Care act in the absence of getting full repeal by way of legislation. I would hope that you put in and to that. And then secondly, what appears to be an effort in the budget to use the budget process over time, not only to cut medicaid dramatically, but you in the Medicaid Expansion. So i ask you to question. Number one, would you commit to anything that thats sabotage the efforts of agencies like yours, and secondly tell us about the impact of the budget on medicaid, and in particular Medicaid Expansion. Thank you, senator. On the first point as we talked about before, you have my commitment that i in my department will work to make Health Insurance as affordable as possible, to have as much choice for people and meet their needs as we cant and do so faithfully within the law of what other programs with. And the making of programs work as best as they can. I can tell you the team around me has that same commitment to do so. You and i will often disagree about what might work and what wont work. Are anything about economics or Insurance Benefits and how they will function, our desire is the same. I want as many people as possible as to you to have access to affordable Health Insurance and to help those who cant afford to get access within our fiscal constraints. We certainly share those goals. On the second point of medicaid parenthetically, i hope google also would be no one loses coverage. So our goal is to make sure people have access to affordable insurance and the choice of those packages. On medicaid you actually mention some populations that you care a lot about, i care about all but those, children, the disabled, the elderly in Nursing Homes. One of the really odd incentives of the way the expansion was done was to create a perverse incentive because of the differential matching from the federal government. Actually prioritize the expansion ablebodied, new entry populations over those traditional medicaid populations. Im actually concerned, i hope through our proposals and Work Together we can reorient medicaid to fix a lot of those counter incentives that are invalid michael traditional medicaid populations. I do worry about that. I just hope that were not just adequate what were talking about access, that were talking of people covered by medicaid do not lose it. All those folks who have a disability, all the children come all the folks in Nursing Homes. Mr. Chairman, with your indulgence one more minute. You probably have not seen this yet because of said yesterday but i have a letter i sent you about what states are applying for the waivers. I will just read one sentence from the letter i sent you. Hope youll take a close look at this and provide a response. At the end of the first paragraph i say, i urge you to reject medicaid waiver applications from states that would further, three things, limit, restrict or block americans guaranteed access to affordable coverage. I just hope you take a close look at that and provide a response. I will, thank you. Thank you. As one of the authors of grahamcassidy i wasnt into but an open up with, to regarding that. As safer to my democratic colleagues speak to this, it becomes clear what i suspect it is true that the really to understand the legislation because what weve been speaking to grahamcassidy addressed. For example, one of my colleagues said that theres been a problem after natural disasters that there was not dollars made immediately available for medicaid for those over impoverished because of the disaster. And, of course, under grahamcassidy we have every either three or six months registration in which a state would say hey, these people are not eligible so, therefore, we get money for the period they would get money on a riskadjusted perperson enrollee. The state only gets money if they enroll somebody aligning the incentive to enroll. It acknowledges something which i have to say i was a little surprised others are now acknowledging or in the obama administration, which is the status quo is not working. I just got an email from bill frisk, if you will come when of those emails and the gets, the United States of care in which a group of people including andy slavitt, melanie, pat conroy, tom daschle, a constellation of democrats who were concerned or in the administration either nominated or actually served saying the status quo is not working. Its interesting people are defending the status quo which is not working and i will digress and minimal to speak about how its not. One, states in their individual market, if youre not getting the subsidy can no longer afford insurance. Folks in louisiana are paying as much as 40,000 a year for premiums. Get that. 40,000 a year. Now people like andy slavitt and melanie are acknowledging that some folks appear or not. This is not sustainable. Its not sustainable for states. Oregon is having to pass new taxes in order to pay for the states share of Medicaid Expansion. I heard one person say, she said we are excluding unions but we are taxing individuals and Small Businesses. They are the only ones without lobbyists. And so those without lobbyists will pay the tax for everyone else. Oregon having to pass new taxes to for the Medicaid Expansion. So what grahamcassidy did is it told states if you cant afford the match, you dont have to put it up. One of the things i will note, senator nelson from florida was concerned about the impact on his day. Under grahamcassidy florida wouldve gotten 15 billion more than under current law to care for those who are poor or poorly insured interstates why somebody would oppose as a doctor who took care of the uninsured for 25 years, why somebody would oppose 15 billion more over ten years to care for the poorly insured interstate, i have no clue. No clue whatsoever, except a dogged determination to support status quo. That said, now i will get to my question. I heard an intriguing conversation yesterday. Dont know if its true but i would like your thoughts, that medicaid best price actually drives up the cost of healthcare, excuse me, for medicine for everybody else. When medicaid best price is put into place only one out of 11 americans were covered by medicaid. Now one out of four americans are. By the way this is not because of demographics. Because this is not agebased. It is rather because of an expansion of medicaid under obamacare. This one quarter of the population getting the best price has an hydraulic effect which if you lower the price here, thats for medicaid, but in turn raises the cost of everybody else. What are your thoughts about that . I think thats a very perceptive observation and rethink it something went to be careful of not just when we talk about drug pricing but when we talk about just our Hospital Physician services, with medicare, medicaid. If we end up underpaying what the market and what Natural Market forces would lead to, we will see higher rates in the commercial space, for instance, and would end up having this, its called i get that. Specific drug costs are because thats obvious a major emphasis of the obama administration. Does medicaid pricing increase that cost . If we underpay and mitigate it will increase costs elsewhere. Let me ask you one more thing. Related to that i was also told some states have carved out the pharmacy benefit from the managed care contracts, and carving out that allows them to get the rebates, and they are preferentially going to namebrand drugs, the highpriced drug because it increases their rebate as long as the federal taxpayers pay 90 new make it expansion its a good deal for them. Sure, it increases increases with the federal taxpayer pays but the state gets more in rebate. Have you after that . I have seen that on the carveouts and there is a bit of a perverse incentive in a medicaid system to carry branded drugs because of the rebates are so high compared to generic drugs. So from the Program Perspective it can be beneficial to the state Medicaid Program to receive the branded rebate as opposed to paying the reimbursement to the pharmacy which is acquiring a generic drug at a low price. Its an oddity in the system. We have a misalignment of incentives. The grahamcassidy aligned incentives, it does not incentivize states to do that sort of trickery to host if you will the federal taxpayer in order to make money for the general fund of the state. But, frankly, ultimately driving up costs or everybody else. Thank you. I may have a second round. Senator stabenow. Thank you very much mr. Chairman. I dont know where to start. I greatly respect my colleague you just spoke. With such a different view of the world in terms of healthcare. Its not a commodity. I think it ought to be a basic human right. We all get sick. Its not like you can choose to buy a car not buy a car. I would love everybody to buy a new car made in michigan but if you dont, its likely that everybody else whose rates are going up and so on. Healthcare is just very different because we are all human and we all get sick. Let me just say one other thing. When folks say status quo now, this is the new status quo under the Trump Administration are there are no costsharing payments, no Reinsurance Company requirements that people share in their own health care in terms of responsibility. We are back to junk plans, people buy insurance that may not cover basics and they dont know it until they get sick. And folks walking into Emergency Rooms without insurance and everybody else is going to pay for it. Thats what we call uncompensated care. Thats what it used to be. Because of the Affordable Care act of people being involved in responsible in terms of when they can to build up a further Health Insurance, state of michigan actually saved hundreds of millions of dollars last year and group market rates were flattened for a lot of Small Businesses in michigan its ordered so very different view of the world. I look forward to debating that as we go on. I do want to start with something though that, a positive vaccine, a lot of things are discreet with certainly, certainly as relates to the view on medicaid and what that means for seniors and families and children in michigan when you see these kinds of cuts. But part of the recent budget agreement, the caps agreement, included a muchneeded 6 billion investment over two years in combating the Opioid Crisis and Mental Illness which is a major focus for me and has been. I want to acknowledge the fact that in the budget, the hhs budget actually recommends expanding what senator blunt and i been working on as certified behavioral clinics, health clinics, and being able to do what Behavioral Health what weve done for health centers. One of my big frustrations has been the fact that we literally, we pay for service, we pay providers that provide physical healthcare, but for Mental Health or Addiction Services we do something we would never do which is we provide service until the grant runs out. I cant imagine if somebody needs heart surgery at the doctor would say gosh, id love to provide your surgery at the grant ran out. We do that every day for Mental Illness and opioid addiction, and we know this is part of multiple thinks the need to have about violence, and even what we saw yesterday. This is at least an all hands on deck moment. I want to first say that i appreciate that that is in the budget that we have begun eight states have been fully funded as demonstrations across the country, minnesota, missouri, new jersey, new york, nevada, oklahoma, oregon, pennsylvania. Were working to expand that. I would like very much to work with you as we move forward to expand comprehensive services in the community, including 24 hour Psychiatric Services and facilities so people are not going either to the emergency room or to the jail, which is exactly whats happening for folks right now. I look forward to working with you on that. I am concerned though that if we go into talking about opioids and Mental Health that when we look at the change, the cuts in medicaid, this time about 1. 4 trillion, we can talk about grants again. Again, sort of a grants rather than small grants, but i am very concerned that the medicaid cuts would really make it more difficult for us in michigan and across the country to fight the Opioid Crisis as well as expand what we need to do in Mental Health. In fact, expanding what we call healthy michigan, if we were to end healthy michigan the Addiction Treatment gap would increase by 50 , and Substance Abuse disorders and Mental Health funding would be cut over 5 billion across the country. Has hhs modeled the effect of the medicaid cuts on individuals with Substance Abuse or Mental Health disorders . So not to my knowledge, but certainly the points you raise are important concerns that we would want to work with in any legislative package around medicaid reform. Obviously ensuring that what we are doing provide adequate resourcing around Substance Abuse treatment. Do you believe that Mental Health and Substance Abuse treatment should be included at all healthcare plans . I believe so. I think Mental Health, our Mental Health parity requirements would provide that. I would need to look at the statutes but i believe thats part of that. We give Mental Health parity but i authored the language in the aca to make sure that this was included in everything because it hasnt been happening up until then. So its part of the essential benefits package that would as i understand it eliminated under the kind of approach that the large block grant approach is being talked about. So i am very concerned about that. What would you suggest to be if people lose coverage under the budget come if these medicaid cuts go through, what would you recommend to the state of michigan and those right now that desperately need services . Of course the challenge we have about is that for 28 million americans what weve got a simply, its simply not affordable for them as senator cassidy was speaking about. Thats the status quo is leaving tens of millions out of affordable options that we want to Work Together to drive to see what can we do to build stable, good, affordable choice, tailored options for individuals out there because that status quo isnt working for his many people as it ought to. On which is close, mr. Chairman, basing its been a year and half under the new administration with a very aggressive approach, somewhat sick and war on healthcare, multiple changes that are raising costs. So the status quo today is a new status quo based on actions that have been done and ramifications that will continue to be felt as to insurance rates come out based on what has been done as part of the tax bill as well as other decisions to roll back efforts to keep healthcare affordable. And i do want to say also, some point we can debate how medicaid pricing is the reason Drug Companies are dramatically raising their prices. If that was part of what youre saying, in terms of pricing, i would have Major Concerns about that. Certainly did that need to be saying that that is the reason. Its an economic incentive and thats what we ought to do in addressing drug pricing had with what those incentives around . Thank you, mr. Chairman. Senator menendez. Thank you, mr. Chairman. Affordable care mr. Secretary,. Integers one in four 40 which e diagnosed as having autism spectrum disorder, much higher than the National Average of 168 in new jersey is it to the budget suzette a a program thas of great interest to those in the Autism Community, autism care act program . I do not know that particular program. I have 14 days into this and so i know we have several programs that as as part of just prioritizing direct care delivery, direct Service Delivery and underserved care Service Delivery there are programs that simply we had to not recommend funding because its in the tradeoffs let me help you out, on the job only 14 days. Its zero in the budget. In fy 18, the congressional justification was that the department believe the same services could be provided to the states with the maternal and Child Health Care grip is at the same recent . That challenges we have is where prioritizing direct care Service Delivery speeded up asking a specific question. Is it your view that the congressional justification for fy 18 that the services can be provided to states for maternal and child health blocker is a a reason yet zero in this budget . No. I do not know if thats the reason why the budget was prepared with the program zeroed out. It more likely is the fact that if its not a direct care Service Delivery program or was viewed as being less effective than other expenditures of money in a scarce physical environment, top choices have to be made. The Autism Community doesnt need those tough choices. They have a tough life as it is already with her children were trying to fill their godgiven capabilities and families that are enormously challenged with that reality. Well, i have a feeling that is the justification. The problem is you also cut funding for maternal and child d health block grants as well. So i dont know how, explain o me how you think that states are best positioned to replace the Education Training research authorized by the autism carers act with reduce funding for the programs that supposedly hrsa, that you can claim that you replicate hrsa progress. I didnt claim that their what i told you is that are programs that we prioritize our director delivery programs and these programs that are where to deploy ties against others. They are not backdoor to these committees. They are front doors. Direct care to individually had to prioritize in the budget. Let me ask you something. How is it when i wrote qfrs in your confirmation, i specifically asked you about working with me on reauthorizing the autism carers act and you provide a base and to senior flu committed in submitting the law passed by congress. And improving access to disadvantage committees. Explain to me how does zero out funding to implement a law passed by congress and signed into law by the president allow you to do that . In a budget, you are a member of the senate a part of the setting the target that operate within and we operate within that come have to propose a budget speedy you have a tradeoff. You are not the filling the law. The law is clear. There is not limited was money. Soy. I know. Thats what we shouldnt spend 1. 5 trillion on tax cuts to the wealthiest. Maybe we would not be having this debate and maybe we wouldnt be having this debate if we were not spending tons of money and other things outside of our healthcare system. But it simply inexcusable to take a community that is so challenged that the law specifically directs the department to engage in and then use it out. And then you do that. How do you think eliminating the medicaid disproportionate share payment the same time you strip Medicaid Funding to states are going, how are houseless credibility do with that . That the continuation of the medicare disproportionate Share Hospital payment reductions that are part of the Affordable Care act and we continue to scale down as we its an elimination. We many other programs that will be putting out 1. 2 trillion in the budget of the americas healthcare Grant Program so that we have alternative insurance vehicles that should be the alternative as with the Affordable Care act, the disproportionate hospitals its not a a scaling can. Its an elimination. Elimination, zero, nothing. Thats not a scaling down. I expect you to enforce the law, and the law on autism is very clear. Im going to challenge this administration to respect the law and enforce it. Thanks, mr. Chairman. Senator brown. Thanks, mr. Chair. Secretary, welcome. I concur with senator menendez in what hes saying about the 1. 5 to enforce tax cut than how you are just taking away so much in so many people that are whole. Net privilege than ceos and cabinet secretaries and members of the senate come starting about january 20 a year ago going after the healthcare law. The republican approach to Congress Event to increase the deficit by billions of dollars. This is the party that care so much about deficits when there are democratic president s but not so much now. Tax leaked to the richest individuals and then you cut programs to millions of working families to pay for those tax cuts. Its just morally reprehensible. I would assume you think the same thing. A few months ago, mr. Secretary, the first lady and Kellyanne Conway visited a facility in West Virginia which provides treatment for babies born with neonatal abstinence syndrome. We have a similar facility in ohio right outside dayton called reach its path that is folks are keeping found together and helping both moms and babies overcome addiction and withdrawal. I introduced a bill lester with a number of members of this committee including my colleague from a while called the crib act. Legislation would provide state Medicaid Programs with flexibility to reimburse residential pediatric Recovery Facilities like bridges have to understand yesterday you all announced its approved reimbursement for this type of residential treatment, services in West Virginia. We shouldnt have to do this statebystate. Id like to ask for your commitment, mr. Secretary, to ensure that babies in a while in a place like kettering had the same opportunities as is in West Virginia whether it be through administrative action or through helping the five of us pass the crib act. Would you commit to that . I dont know that particular waiver approval but it happy to work with you and governor kasich and thats a request have to make sure it goes to our processes expeditiously as possible that complies with our waiver requirements, absolutely. Seems a very noble purpose to meet. Thank you. I appreciate the effort you put into proposing some initiatives that would help lower the cost of Prescription Drugs in medicare and medicaid. As part of issues Budget Proposal, some of them i i agre with and support. As you do this can you point to a single proposal in this budget that would force the Pharmaceutical Company to lower the list price of a drug in the way were all americans rely on the drug will benefit . So actually thats one of the things were trying to do in the Budget Proposal is to create the incentives so it will have downward pressure on the list price of drugs. One of the things were recommending is in that catastrophic coverage in part d is changing the incentive structure. The government is on the hook for most of the cost once a Senior Citizen gets the catastrophic coverage. We propose to switch that so that the insurer is on the hook for that and will have even more incentive to fight against the branded Drug Companies to keep those list prices down as opposed to now there are a lot of incentive for those higher prices to just drive into the catastrophic coverage and offload that expense onto us. Thats one of them. This is just one step in working on the issue of drug pricing, and this is the one that in the context of budget, and medicare and medicaid. Many more things that we are working on, and if i do get around list price, ways we can reverse those incidents on list i would love to work with you and your them. Its a difficult challenge as opposed to even it sound and appreciate that but it sounds to me like relying on the middleman here. Note that these policies actually go after the pharmaceutical industry, your former employers. None of these policies guarantee, i i understand you k with Insurance Companies to push, but none of these prices guarantee guaranteed lower drug prices for individuals who rely on drugs like insulin nor not injured by medicare, medicaid. Nothing will help that we can see so far help individuals who pay for drugs at a pocket. Cant benefit from a rebate policy. Seems the administration that promised that he would make the Drug Companies pay until the president met with the drug Company Executives and came up singing a different song as he met with his ceo france, but it seems the administration left out of its Budget Proposal any policy that would directly target egg farm and hold them responsible for the prices they said, rely on Insurance Companies to be sure that we need to do better. Were ready to partner with the president. I know Ranking Member wyden from oregon is willing to do that to go after pharmaceutical companies that will not reduce patient choice. I hope you were joined us. I hope ill have the chance to meet with you to brief you because, in fact, it is a suite of proposals that will dramatically reduce Senior Citizen outofpocket cost. Id be happy to walk you through in addition in part be with proposing an inflation cap on list prices. If you increase the price above inflation just like in medicaid, the pharma company, there would be lower reverse and paid up to a Medicare Part b program but we have a whole suite we believe will dramatically reduce Senior Citizens out of pocket when you walk into the pharmacy for medicines and getting their part b drugs which are the physician administered drugs, and love to bring here pearson with you abt that because i think theres a lot you can get behind on. Thats good news but thats medicare. What about everyone else . Weve got lots to do. Senator thune. Thank you, mr. Chairman. Mr. Secretary, thank you for being here today. I appreciate the priorities you laid out in the president s budget particularly the emphasis on addressing drug prices, opioids and reducing Regulatory Burdens. While its not the jurisdiction of this Committee Also want to point out that i appreciate the attention to the indian Health Service in your testimony today on that topic. It was great to see the increase in funding for ihs. Juvenile to help facilities in t plains area meet cms called it an accreditation standards. As a said before money alone cant solve those problems. One thing i hope to see included in the budget was a legislative proposal signaling the interest in working to reform the ihs structurally, like restoring accountability and ihs act that weve discussed previously. My question is, is that legislative solution something that the administration will continue to work with us on . We will sort of work with you on that. Ive never been able to get deep into it myself but happy to work with you on that. As you recall we talk at her confirmation hearing about the final rule regarding application of Competitive Bidding rates and noncompetitive bid aerie for durable medical equipment. I realize youve only been sworn in for a couple of weeks, so i get that, but it wanted to ask you to please provide a status update on wind that rule would be finalized and whether the president Budget Proposal on Competitive Bidding which projects more than 6 billion savings takes that rule into account. Ill be happy to do that. The proposal we have in the budget i hope is sensitive to the concerns. Im very focused on the concert of rural providers in and rural citizens access to durable medical equipment. The proposal we have with have the bidding, be targeted towards the area in which it is good. So moral and also so the winners get compensated at what their bid was as opposed to being pulled down to a median if you happen to win and be entered into the process. I am concerned about access, affordable, affordability and rural areas i i hope as a workn legislative approaches your that we can solve that problem. Good. Thats what we like, the issues you talk about is like to see you focus. While it was was having no budget impact i am encouraged by cms proposal to reduce reporting burdens and eliminate low value metrics of meaningful use. I do think that there will be a positive impact on Healthcare Providers and ive been working with others on the finance committee to address these challenges for many years. In fact, one of the provisions to eliminate the requirement for meaningful use standards to become more stringent overtime which was signed into law as part of the budget deal, is this change incorporate into your Budget Proposal and what of the reforms do you expect to make in this space . I dont know if the most recent change on meaningful use has made into the budget, rather fastmoving targets i dont know if those fully integrated yet into that but the other aspect you mentioned im very proud of, which is for physicians who are being paid under mack truck, Vincent Program for quality what were doing is taking a whole host of physician not only will have reduce reporting burdens that may be none where we be able to independently look at data ourselves to decide the compliance with the quality programs rather than having to report anything i think its one of many significant Regulatory Burden really efforts that administrators have been taking charge of. With respect to that sort of followup but could you speak or at least address the sort of current, all or nothing approach that you spoke a little bit . I want to delve more into the current status of where we stand on meaningful use. For me the important thing is becoming up so much meaningful use as it is actual interoperability. Its not going to do something him him ill be happy to get back to you if thats okay on your mini meeting for use ques. I would make sure i answer accurately. Look forward to continue to work with you. The last time you and i had an opportunity discussed opioids was at your first hearing. Congratulations and condolences as well. We talked about the importance of addressing the growing opioid abuse epidemic from the bottom up, from the local level. In South Carolina, a place where a lot of folks come to vacation, myrtle beach area. More than 100 folks have lost their lives in accounting for 16 of the states challenges on the Opioid Epidemic front. Your response to my request on the crisis you mentioned there isnt a a onesizefitsall approach to opioid treatment and prevention programs. How did your Department Plan to use the 6 million to customize and create more flexibility for local jurisdictions to play a more Important Role in addressing the challenges that we see . So just by way of example the 3 billion initially that weve allocated in the 2019 funding were proposing, we would have 1 billion in grants under the state target program and so very flexible to the states people to customize and target that money. That is a doubling of the current funding of 500 million a year. So that is very flexible and so the state of South Carolina can really work with communities, coming up with customized approaches. Another program we are really interested in, we will be investing 150 million in rural Substance Abuse programs to try to develop novel methods that your entry for addiction and dependence in more Rural Communities because the access issues and distribution issues to focus in rural community. Then another 400 million that goes to quality instant work with our Community Health centers, localize. Thank you very much. Im not sure that you answered the question on wellness so far during this hearing. I spent as you may recall a few years in the Insurance Industry and one of things we have done over the last year is talked about the access to Health Insurance. We talked about the cost of Health Insurance, talked about who is insured, was not injured, who is underinsured. We talked about a lot of topics around the exploiting costs of Health Insurance. The underlying driver is exploding cost of healthcare. Unless we spend time talking about the explosive cost of healthcare we wont be able to address the actual challenge of explosive cost of Health Insurance. Many of the issues we face from a Health Care Cost expensive, the cost continue to arise, issues of morbidity, diabetes, obesity as well as the challenges around cancer. These are explosive drivers over healthcare costs. When it comes to connecting Healthy Habits so that we can prevent some of the challenges we see, that requires a local bottom up approach to creating more flexibility in the alternatives. I know in South Carolina we have unique population. Some of the programs that we see are very effective in the state, our programs to work with nonprofits, whether its churches or synagogues, whether its the bit. Ly to create Wellness Programs at your local Community Nonprofit or Planning Committee gardens. We found that these programs have been quite successful in South Carolina. What do you plan to do this you to empowering and encourage states to invest in the space of Wellness Programs so that we can attempt to get the control of future costs perhaps before they happen . So i think you put your finger on what other more important drivers of healthcare costs in our system, which are the social and behavioral determinants of health and very competitive in that space that we help to provide alternatives to minimize medical spent an healthcare span if we can do so in alternative ways, but also on the behavioral side can we treat adequate incentives or flexibility for adequate incentives on the behavioral side . When i was at hhs in the 2000s we were involved in helping to create greater flexibility through hipaa to allow employers and insurance plans to create greater financial incentives for healthy behaviors. If you other ideas of things we can work to address common barriers where are programs are in a way id love to learn more about that because i think it would be very constructive. Look for to having that conversation with you perhaps another time. A number of programs that focus on healthy alternatives and how do you make what it is that we find to be incredibly tasty but may not longterm be very helpful for the arteries. Look forward to having that conversation. Mr. Secretary, weve got these two folks, b and the ranking the people asked another set of questions and then you will be free. Let me first observe, not related to you but somewhat earlier criticized the tax cut and jobs act provision which doesnt allow the deduction of state and local taxes, excuse me, criticizing the tax cut and jobs act as a benefit for the upper income. But the same senators who say that also complain about the salt tax provision. They complain about that. The salt tax provision disproportion affects the wealthy. So on one hand you can have the wealthy getting textbook and on the other having a bill that if its the wealthy. Secondly theres a couple of assertions about grahamcassidy i have to address. We maintain a minimum health benefit. We encouraged provisions such as auto enrollment which could increase enrollment relative to now. We allowed pooling of individual markets in the medicaid pools which im told would lower premiums by 20 , therefore, making interest more affordable. Again, folks on the left dont seem to care about those middleclass families paying 40,000 a year. I will say the criticisms and the status quo, the status quo still includes the individual mandate the last few minutes of this year, a quick reminder watch this in its entirety anytime online at cspan. Org just type health and Human Services budget into the v