Transcripts For CSPAN2 Senate Health Committee On Lowering Health Care Costs 20240714

Enclosures in the best way forward and handling payment disputes. This is two hours and 20 minutes [inaudible conversations] the committee on Health Education labor and will come to order. Senator murray has an important meeting right now and she has asked me to proceed with the hearing because we have six excellent witnesses and we want to make sure that we hear from each of you. We want the senators to have a chance to ask questions of each of these so patty should arrive around 10 lock. When she comes we will enter and let her make her Opening Statement and then we will resume the hearing. Good morning senator murphy. Nearly a year ago after brent james from the National Academy testified before the Senate Health committee with a startling statistic. Up 21 2 of what the American People spend on Health Care May be unnecessary. Let me repeat that. Up to half of the 3. 5 trillion the United States collectively spent on health care in 2017 was unnecessary according to dr. James and many of the other witnesses at our hearings agreed with that. Thats 1. 8 trillion, three times as much as we spend on oliver national defense, 60 times as much as we spend on pell grants for College Students and 550 times as much as we spend the national parks. A recent gallup poll found the cost of health care was the biggest financial problem facing American Families. Like every American Family both democrat and republican United States senators are concerned about the cost of health care. Health care becomes a tax on the federal and state government. Warren buffett called it a payfor on the american economy. Over the last two years this committee has held 16 hearings on a wide range of topics related to reducing the cost of health care specifically how do we reduce what the American People pay out of their own pocket for health care . Hearings on the cost of Prescription Drugs on the Discount Program or primary care on the importance of vaccines. Last december i sent a letter to experts at the American Enterprise institute and the Brookings Institution. Doctors economist governor reince insurers and other Health Care Innovators asking for specific steps that congress could take to lower the cost of health care. We received over 400 recommendations some as many as 50 pages long. In may senator murray and i released the discussion of the Lower Health Care costs at a 2019. The package of nearly three dozen proposals from 16 republican senators and 14 democratic senators. That is designed to reduce what americans pay out of their own pocket for health care. Since then we have received over 400 additional comments on the legislation. Todays hearing we are scheduled to hear your feedback on this legislation that will reduce what americans pay out of their own pocket for health care. Second the legislation creates more transparency. There are seven bipartisan proposals in the bill that will eliminate anticompetitive terms of insurance contracts designated nonprofit entity for claims for employers, band pharmacy benefit than charging more than the pvm pay for the deck and require patients to beget more information on the cost and quality of their care. You cant lower your Health Care Costs until you know what your Health Care Costs actually are. Third it increases Prescription Drug competition. There are nine bipartisan proposals within this legislation to bring lowercost generic and similar drugs to patients. Thats about 90 of the drugs that are prescribed. Here are a few of the ways this legislation will Lower Health Care costs. Sure the patients dont receive a surprise medical bill which is when you receive a 300dollar bill or maybe a 3000dollar bill two months after your surgery because one of your doctors was outside of your insurance network. Many senators including senator cassidy, senator hasson, senator murkowski and an be many others want to end surprise billing. To lower the cost of Prescription Drugs by developing speed up drug facility by a certain happen database. They have worked on this provision. Approving the drug patent database by keeping a more today to help Generic Drug Companies speed up Drug Development proposal offered by senator cassidy and senator durbin. Im mentioning mentioning the senators names on purpose because i wanted to be clear how much work has been done by democratic as well as republican senators together on the provisions of this bill. Prevent the abuse of petitions that can be used to unnecessarily delay drug approval presenters governor shaheen cassady Bennett Cramer and braun clarified that the makers of brand biological products such as insulin are not gaming the system to delay lower cost from coming onto the market. Sandra Smith Cassidy and cramer. Eliminating the loophole that allows Drug Companies to get exclusivity just by making small tweets to an old drug proposal from senators roberts cassidy and smith. It bans gag clauses to prevent employers of patients from knowing the price and quality of the health care service. This proposal from senators cassidy and that it would allow an employer to know for example that any replacement might cost 50,000. 1 hospital and 35,000 another. Required Health Care Facilities provide a summary of services when a patient is discharged from a hospital to make it easier to track bills and requires hospitals to send all bills within 30 Business Days to prevent unexpected ills many months aftercare. Thats from senator inslee and senator casey. Requires doctors and insurers to provide patients with the price quote unexpected outofpocket costs so patients are able to shop around a proposal from a number of senators including Cassidy Young murkowski ernst kennedy sold and cramer Kennedy Braun hasson Harper Bennett around carton Casey Whitehouse and rosen it increases vaccination rates to prevent disease outbreaks with a new proposal by senator Robert Peterson there are more proposals. Banning anticompetitive terms of Health Insurance contracts and prevents patients from seeing other lowercost, higherquality providers. The wall street journal identified dozens of cases where anticompetitive terms and contacts including Health Insurers Hospital Systems increased premiums and reduce premium choice. Banning pharmacy benefit managers for pbm, charging employers. Health Insurance Plan more for drugs than the pbm paid to acquire the drug which is known as spread pricing. Eliminating the loophole allowing a first generic drug to submit an application that can block other generic dose from being approved. Provisions to help americans stay healthy by preventing obesity and improving care for expectant moms and their babies. Her visions to make it is easy to get your personal medical records as it is to book an airplane flights are provisions to incentivize Health Care Organizations to use their best cybersecurity practices to protect your Health Information privacy. Other senators may have additional ideas that we hope to be able to vote on in the markup later this month. For example senators murphy and senator cassidy are working to improve access to Mental Health care building on their work in this Committee Last year that became a part of the support acts. Im optimistic that we could get to an agreement to include something on that in this bill as well. Other committees and the senator also working on their own packages of legislation to lower the cost of health care. Since january senator murray and i have been working in parallel with senator grassley and senator wyden who are on the finance committee. They are working on their own bipartisan bill which they plan to markup the summer. The Senate Judiciary committee is working on bipartisan bills to address high drug costs and held a hearing on consolidation in health care. The house of Representatives Energy and commerce ways means Judiciary Committee have all reported out bipartisan bills deliver the cost of Prescription Drugs. Secretary azar and the department of health and Human Services have been extremely helpful in reviewing and providing Technical Advice in a timely way on various proposals to reduce Health Care Costs. The president has called for ending surprise billing and reducing the cost of Prescription Drugs. The administration has taken steps to increase transparency subfamilies and employers can better understand their Health Care Costs. For the last Decade Congress has been locked in an argument about the individuals Health Insurance market were 6 of americans get their Health Insurance. Especially for americans without subsidies. The cost of Health Insurance remains a way to expensive and i am sure theres there is a debate about how to fix that and it will continue. That is not this discussion. This is a different discussion. We will never have lower lowercost Health Insurance until we have lower Cost Health Care which is why our lowerCost Health Care contract of 2019 take steps that will bring down the cost of health care that americans pay out of their own pockets. The bill will lead to Doctors Hospital Insurance Companies and employers providing americans a better experience, better outcome at a lower cost. I want to thank senator murray and her staff. She is not here at the moment that her staff is. We have worked together to find three dozen proposals that democrats and republicans agree on to reduce Health Care Costs. This is not unusual for a committee because we have found a way to provide solutions to difficult problems that members of both republican and democratic caucuses can support. We did that with fixing no child left behind. We did with 21st century cures act in user fee funding for the food and Drug Administration and most recently in the midst of all the fireworks over justice and i we had 72 senators on from both parties working together to produce the legislation that dealt with the opioid crisis. Our goal for this legislation to Lower Health Care costs act of 2019 is to be one mark sample of that sort of cooperation because the American People expect us to Work Together to provide ways to reduce what they pay for health care out of their own pocket. As i mentioned earlier we will proceed with witness testimony. I will introduce the witnesses now. When senator murray comes with alaska or to make her Opening Statement and it will proceed with the witnesses and then well go to questions from the senators. Im pleased to welcome the six witnesses. Sean kavanagh is the first he serves as chief Administrative Officer at a la dave. The start up was founded in 2014 the works to develop and strengthen the Care Organizations in order to reduce Health Care Costs and improve care. He joined it in 2017 the same year he served as the adviser for an Innovative Health Technology Company as well as all modern health. Prior to 2017 as the administrator and director of the center for medicare the u. S. Centers for medicare and medicaid services. He now sits on the board of directors for the center for medicare advocacy. He is at and shoot at the university of pennsylvania and received his masters in Public Health at johns hopkins. That or Benedic Ippolito is an Economic Research fellow at the American Enterprises institute. He focuses on Health Economics and Health Policy. A lot of his recent work contains price regulation specifically surprise medical billing. He graduated from emory before receiving his masters and ph. D. Of economics at the university of wisconsinmadison. Tom nickels is executive Vice President for Public Policy of the American Hospital association represent approximate 43,000 individuals and had served nearly 5000 hospital and Health Care Systems and health care providers. Mr. Nickels has been with American Hospital Association Since 1994. He was director of the American College of Emergency Physicians in the Washington Office before that. Senator collins would you like to introduce mr. Mitchell . Thank you mr. Chairman and mr. Chairman on behalf of all the members of the committee i welcome you back and its great to see you looking so well. Thank you. I very much appreciate the opportunity to introduce elizabeth mitchell. Although she is testifying in her role as the president and ceo of the Business Group on health i want the committee to know that she is a native main are or do we hope is only temporarily living on the west coast. Her for her work took her across the country ms. Mitchell fled a multitude of Health Care Organizations in the state of maine including serving as ceo of the Maine Health Management Coalition and the network for Regional Health care improvement in both roles she was a powerful catalyst for Health Care Transparency and quality improvement. She also served in the maine state legislature. Although ms. Mitchell and i are in different Political Parties i can tell you that i have always found her work to be insightful, practical and nonpartisan. Given her extensive efforts to improve health care and transparency and quality i was pleased to recommend ms. Mitchell for the payment model type advisory committee, one of the longest committee names possible where she served as vice chair. I very much look forward to hearing elizabeths testimony this morning from an employer perspective. Thank you chairman. Thank you senator collins and welcome ms. Mitchell. Mr. Frederick isasi is executive director of families, that is right, right . Nonprofit Consumer Health Advocacy Organization highquality affordable and patient communities centered health systems. He was once Health Division director at of the Bipartisan National Governors Association center for best practices. In addition to his work with the governors he has served as Vice President for Health Policy and Advisory Board commission and a senior legislative counsel on both the finance committee in the Senate Pension committee for friend former senator. Welcome in their final with this is Marilyn Bartlett coordinator for the state of montanas commissioner of securities and insurance. She is recognized as a leader in Health Care Cost reforms and legislative initiatives as well as improving benefit plan cost effectiveness before working for the montana commissioner. She served as health care and benefits Division Administrator for montana and managed health care for 33,000 individuals just you be the 200 million in annual benefits. She is credited with negotiating down the States Health care plan costs and increasing Health Care Price transparency in montana. Thanks to all of you for coming. Mr. Cavanaugh lets begin with you. Welcome. Thank you mr. Chairman. I am sean sean cavanaugh. We partner with independent physicians in 24 states in diabetes payment models. Mr. Chairman you mention dr. James testimony where he talks about the enormous amount of waste in our health care system. I think we all make the fundamental decision of how we will get rid of that weighs in at boils down to a choice of two approaches. One is competition in the other speculation. I personally have a background in regulation. Im what you might say theyll commit regular. I published regulations all year long essentially ministering prices. A previous grant awards at the maryland hospital where he sat all Care Hospital race in maryland and im here to tell you whenever possible you should rely on competition, not regulation. This approach can be taken to ensure competition works wherever possible. We believe maintaining a robust independent physicians sectors essential to supporting competition and highvalue care. Unfortunately this approach is at risk as hospitals have aggressively than purchasing physician practices. A hospital consolidation is a growing impediment to competition and highvalue care. Over half the market in this country is highly consolidated by objective standards of hospital consolidation. We know what hospitals merged tresses increase and quality stagnates. How can you argue it leads more corrugated care when the evidence doesnt this fared this out. Surprise billing occurs because of the market failure. Patients who have the time of the information necessary to avoid these bills. We applaud this committees willingness to take on this issue. And multiple issues and put patients interests at first. Databases, for many years the study of Healthcare Claims data, problematic because medicare is very different than the private insurance sector. The patients are different as well. Many competitive behaviors have been exposed by seeing different databases. Such as the healthcare cost institution. Spread pricing, ppm should be competing on the basis of right highvalue health plans. They should generate the revenue that way. Not by taking advantages of the information between drug manufacturers and employers. Finally well a support time limits on provider building, i think thats very patient centric, we were quite a few small practices and rural practices and we wonder whether some of them might struggle with a 30 day limit. We should consider if small practices should have a different timeframe. Please consider in future legislations, eliminate consulting fees that are provided in a physicians office. These fees are unnecessary. They have helped fuel hospitalization. Anything you can do to support a physician and in an independent practice. Would be great. We encourage the community to reform restricted cnn rule. The fo often give hospitals monopoly powers. Specifically, grant the mct to review potentially anti competitive behavior by hospitals. Finally, our personal story and validates that we believe hospitals should be required to share patient centric data. There is literature that shows that when a patient is discharged from the hospital and sees a primary care physician shortly thereafter, they do better. They have fewer readmissions. Thats one of our big strategies. We go to local hospitals and say we will bear the cost of the interface, we will bear the cost of setting up you and alerting us when these patients are discharged. Most hospitals comply because they realize its good for the patients. But there are some hospitals who refuse to share this data because of competitive reasons. We think hospitals should be compelled to share this information. There in support of that but anything that fosters patient centric Data Information is good. Thank you for your time. Thank you mr. Cavanaugh, for your testimony. Thank you very much, members of the committee, thank you for the opportunity to appear before you today to discuss the Lower Health Costs act. My name is benedict, American Enterprise institute. I first want to apply the committee on evidencebased and constructive proposal. Together, the provisions in the bill, will meaningfully transparency. If enacted this legislation will lower Insurance Premium and drug prices for consumers. It would ensure patients are no longer exposed to Surprise Medical Bills. By lowering costs, this bill would also improve access to healthcare. Its a lawful proposal in one of the most impressive Health Policy goals in recent years. Too much of my written testimony will echo by Health Policy experts earlier this year. In my remarks this morning, im going to focus on two provisions of the lower healthcare costs act. Establishing a Transparency Organization to lower healthcare costs, and sending Surprise Medical Bills. First the provision of establishing that will assemble and data for commercial insurance, would meaningful improve our understanding of the private healthcare market. Im very much going to echo for these comments. The federal government already regulates many parts of the private healthcare market. Yet, much of our understanding that healthcare has traditionally come from public peers. Medicare. As it was previously noted, this is a problem. Ensuring these vibrant and competitive market, policymakers are not flying blind. The sibling National Data on the private market in this matter, would improve research and entered, improve policymaking. Second i like to discuss the pride of medical billing. The future of the Healthcare System receives considerable attention. All three proposals included in the draft legislation represent serious attempts to resolve this issue. With that said, adopting an in network guarantee is the best option. It represents a straightforward and market oriented way to stop Surprise Medical Bills, before they ever occur rather than adjudicating them after the fact. By hospitals are assuring they are insured patients. They would need to barter prices themselves. Rather than having those prices set by arbitration. They would have two choices. Either they could come to an agreement with the insurer as many already do. Or, they could choose to be paid by the hospital they prefer. This would force the small number of bad actors to stop surprise billing patients and impose little additional burdens on the majority of providers who do not engage in this behavior. This approach subsidies from a wide array of experts including those at the Brookings Institution the Center Georgetown law, yell university, at aei. Scholars of booking note, the end network guarantee is the only option that would fully address the market failure gives rise to surprise bills. Annas economists at yale further emphasized, the resulting payments would be generated by Market Forces. I agree with these assessments. I really think this is a. Worth emphasizing. Within an in network guarantee, there are no more surprise bills to adjudicate after the fact we need not rely on an arbitrator to tell us which of either the provider or the insured is being more reasonable. To be simply do not happen and we have passed market actors that would figure out what an appropriate market prices. An alternative option would be adjudicated by ann arbor. While i understand the appeal of this process, i think in practice, arbitration represents an inferior version of setting a simple benchmark. The arbiter ultimately must decide what a reasonable price rate services. Like any price center word. Moreover, the processes los transparent and includes unnecessary expenses, it can be unpredictable and take the resolution out of the hands of market actors. It is not surprise bills from occurring in the first place. An arbitration scheme, is not the best option for resolving Surprise Medical Bills. Now some pieces are yet to be finalized, i do want to be very clear on one thing. This bill represents a very impressive bipartisan effort to meaningfully lower healthcare costs are americans. I applaud your efforts and i genuinely thank you for the opportunity to be here today. I look forward to your questions. Thank you doctor ippolito. Senator murrays asked that we continue with the witness statements and that she will make her statement at the end of this comments. Ms. Nichols, welcome. Mr. Nichols. My name is tom nichols. Im here to represent our 5000 member hospitals. The committee has identified several important areas where we can make the Healthcare System work better and cost los for patients. On each of these, we stand ready to work with you. I surprise medical billing, bottom line is that we must protect patients from Surprise Medical Bills and we support the federal legislation to do so. Protecting patients is limiting their cost. And keep them out of any subsequent negotiations. Once a patient is protected, providers and payers should be allowed to determine a fair and appropriate reversal. The committee put forward in this discussion draft, three options. The endnote guarantee our Network Matching approach would acquire is only based contract with every plan for which the facility hamza contract. This approach interferes with the fundamental relationship between hospitals and their physician partners. His overly limits the negotiating terms. Particulate heart for rural areas that are already challenged to recruit practitioners. We believe health plan should not be exalt of their core function of establishing Provider Networks and negotiating rates with providers. The second option is independent dispute process. Ajay believes hospitals and payers should negotiate reimbursement. Without government involvement, there may be our role for a dispute resolution process not for Hospital Services but certainly for physician claims. We encourage the committee to look at the features of s1531 with some modifications, as an option for determining out of network. Marketbased inflexible negotiation to take place. Much of the structure outlines as 31 is positive, we do believe that automatic payment prior to initiating the fair reimbursement. Similar to what new york state and other states have implemented, does not include hospitals, it appears to be an efficient process. Places to response the responsibility how plan not patient. Studies have shown that 34 percent reduction in network billing. Still between providers and payers. Not an noticeable inflationary impact on the cost. The third option is a National Rate. Graphically adjusted. It would not be able to capture all that the providers and practitioners should consider. Disincentive for insurers to make adequate Network Providers. We also share increasing transparency however we have serious concerns with a couple of the policies proposals. For example, discussion draft would prevent providers from claiming an fair imposed by insurance. It would infringe on provider and Health Plan Contracting in ways that could limit our members ability to pursue new care delivery models and by arrangements. Put another way, commercial insurers cannot be allowed to have it both ways. Enjoy the savings from providers shouldering financial risk while simultaneously encouraging those same patients to go elsewhere for care. Likewise, it would be unfair for a rural hospital to allow commercial cherry picked which hospital in the system they contract with. We strongly urge the committee to remove those provisions. On think the committee for looking for ways to improve the health and well being of all americans by making an investment in Health Priorities like vaccinations and health Data Information. As hospitals improve to work processes. I also want to thank you for your efforts to reduce drug prices, runaway drug prices many of our patients cannot afford their medications. We support the drug provider pricing provisions of the bill, each seek to increase competition. We also enter test mode identify additional actions the committee may consider such as further increasing transparency in pricing to the fair act. Mr. Chairman we have an opportunity to help patients. We look forward to working with you in the committee on those efforts. Thank you very much. Thank you mr. Nichols. Ms. Mitchell, welcome. Scenic thank you. My heart and soul in maine. [laughter] thank you for this opportunity, Pacific Business hello health group. We seek to hide we seek to have the right discussion. Thank you for the bipartisan discussion. 100 billion are spent annually purchasing healthcare on their employees. Our members are deeply committed to the health and wellbeing of their employees. Buying Healthcare Services that promote optimal health. We even the largest private purchasers of healthcare in the world cannot overcome the current industry consolidation, opacity anti competitive practices and equations pricing and use healthcare. It may seem somewhat surprising that an organization representing Large Private Sector Companies would seek privatesector solutions. The market is simply broken. A functional market does not regularly drive families into bankruptcy. It does not depend on go find me campaigns for treatment cost. It does not absorb its decade of us wage growth. If the Worlds Largest and most sophisticated companies are challenged by highquality Affordable Care, is simply unfair to expect that of Small Businesses or families. The dysfunction is so profound that we are seeking your support to make a functional market in the us Healthcare System possible. We believe that this bill goes a long way to achieving that. There are several important points but three that i want highlight. There is strong evidence that the costeffective delivery highquality care is possible and it should be expected. Although we prefer market solutions, to the problem of high cost of reaction is needed. We also support your efforts to control drug pricing and we would urge you to go even further. And to include provisions that support primary care and Mental Health. Most importantly, we want to say that it is possible and we have golden innovations driven by our employer members. Most and partly, walmart for Specialty Services. This is a program the employer centered Excellent Network designed walmart, for it but any replacement surgeries. We set high quality standards. The best facilities in the country. I provided for your reference a recent Harvard Review on the resulting company. Patient participated reported 9d better patient reported outcomes. Readmission and convocation rates were markedly lower. The program was is possible to save money by reducing Unnecessary Services and improving outcomes and patient experience. While highlighting the practices this bill, barriers to Widespread Adoption of this model. Additionally, we support the elements that would remove gag causes on the sharing of price and quality information by providers. Its hard to imagine the providers are barred from sharing information about quality and cost of patients. We strongly support the elements of the bill that would ban anti competitive practices. Including anti fearing all unearthing and similar causes that are used to gain market power, and raise prices irregardless of quality for variable performance. We urge congress to enable equal beneficiaries to identify and similar program. We also strongly support the protection of patients from out of network deductibles, surprise billing, and we support options for benchmark for payment. We strongly recommend seven payments based on average payments to physicians, especially physicians i. E. Hundred and 25 percent of medicare rate. While it may be unusual to have us as for price setting, we believe it fairly captures the cost, we also think this the most reported efficient and transparent approach to regulating these prices. I think it best solution would be the use of payments based on medium contracted payment rates, although we are concerned that the resulting match bars under the bus would reflect prices that are already too high. We strongly also recommend that the definition of services in surprise billing be expanded to include ground and air ambulance services. We are pleased that you have acknowledge this is a problem. We understand that states are limited in addressing this problem due to authorities and it is up to congress to fix us directly. We strongly support all of the transparency initiatives. Would urge you to can complete data access including pricing for the utility of this database, we would ask the physicians and patients have key roles in the governance of such a database. And that these data sets are mutually acceptable and communicated with regional and state databases. We look forward to additional questions and discussions amongst most of the provisions in the spell. Particularly and finally, we strongly support everything included in the bill that would address drug pricing. We ask you to actually go further and also strongly support the elements that would require transparent reporting from pharmacy benefit managers to plan sponsors. The lack of transparency makes is impossible for most employers didnt even know prices, rebates and other processes prices. Much los negotiate lower prices. Thank you. Thank you ms. Mitchell. Mr. Isasi. Welcome. Thank you very much. I am the executive director of usa for nearly 40 years we have served, it is a leading National Voices for healthcare consumers. But here in washington and on state level. Our mission is to allow every individual to limit their greatest potential by entering their best health and healthcare are equally accessible and affordable to all. Thank you for the opportunity to testify. The cost and quality of the american healthcare, is a profound economic and Public Health problem. Utterly bipartisan issue. The most half of the public cannot see a dr. When they need to because of cost. About one third say they had trouble paying for basic necessities because of healthcare costs. Nearly two thirds of the public believe that we as a nation, do not get good value from the us Healthcare System. In analyses of our Healthcare System support the publics perception. Despite spending two or three times more than other wealthy nations on healthcare, we live shorter lives than those in other wealthy nations. The us Healthcare System is more likely to sell his people and even on moms and our babies are dying at higher rates. As a nation, we can do better for families and it is well past time that the Healthcare System change. Families across the country who face ever increasing healthcare costs often are forced to make an attainable decisions. Pay a medical bill or buy groceries. Pin electric bill to keep the heat on or by a childs medication. That is worse, lack of high quality can be truly devastating. I like to talk to you about deborah from the chairmans home state of tennessee a remarkable woman, who shared her story with family usa story day. Deborah worked hard. She went to college. She studied, she graduated and she for many years worked in a successful career as a microbiologist through the state of tennessee. Then in 2012, after going in the hospital for a routine replacement, deborah replaced a hospital acquired infection. This created a multiyear cycle of an infection and enlist the resulted in her losing her job, and losing a most everything should work for. Following the surgery, and infection spread from her hips to her vertebrae and us, and by 2016, she was at risk for full spinal collapse. She had ten back surgeries. At a time she was placed in a drug used. Today, deborah is bedridden and in extreme pain. Since our first surgery, she has moved from employer coverage to marketplace and now medicare. Despite this coverage, thank for her care has taken all of her savings. Deborah told us that i had about 2 million in surgeries plus a bunch of other expenses. Including an intravenous antibiotic that cost about 850 a day. Before this, i had a brandnew house, id brandnew car, the car was repossessed, and i almost went into foreclosure. Deborah was in the hospital when i when the repo papers came. I played my life 20 years ago, and i didnt expect this to happen. He hit me so hard. And it took everything. This isnt what i thought would happen to me. Any of us could be deborah. Any of us could be building our lives and saving and contributing to society and then because of poor health color care quality and outofcontrol cost, all that we worked for can be taken from us. It is time for a nation to take a long hard look at our Healthcare System. The system should work for families to ensure the best possible healthcare. Not to threaten us. Families usa strongly support the lower healthcare costs act. It is an important step in the right direction. We provide written comments recommendations about the legislation. Before i can include this. The legislation prohibition. Your legislation would end this practice and profound security creates. The most critical aspect would band charging patients out of while receiving and network care. This is most critical. The legislation also would establish a mechanism to ensure that providers cant charge outrageous month for these categories. About have network services. Recent studies have shown it has reached an alltime high, providers are led to leveraging competition to charge high prices. These prices are at an essential reason that the premeds continue to escalate. We strongly support look for your support and prohibit a net marks a price bill but also the outrageous being charged for the services. The work you do in this committee is vital to launch the health and wellbeing in this person in this country. We hope it will be enacted this year. Thank you for the opportunity to testify. Thank you very much. Chairman alexander, distinguished members of the committee, im honored to speak today about my success in lowering healthcare costs for montana. When i was appointed administrator, the Montana State Employee Health plan, reserves for projected to be at a minus 9 million in los than three years. Instead, the reforms that we implemented, resulted in a reserved balance of a hundred and 12 million to the positive in that timeframe. I then joined Montana Insurance can commensurate to research and draft read legislation aimed at lowering prostrate Prescription Drug costs. The most montana benefit was provided through purchasing cooperative seven different contracts. I researched the contracts, resource the data files, i found spread pricing and limited data access, arbitrary pharmacy reimbursement. Limited rebate passthrough. I terminated these agreements. We contracted with the pbm that offers transparent full passthrough model, with ability. When cbs, refused to accept our level of reimbursement, i kick them out of the network. Immediately saved 1. 6 million for montana. And just the first year, on a new program, we saved 7. 4 million. 23 percent. Now that might not sound like a lot, but in the us, privately insured market, has 140 billion in farm stands. 23 percent reduction could generate 32 billion savings. The spread pricing to generate healthcare savings. Bill also addresses compensation disclosure for brokers and consultants. The Current System is flawed. The broker consultant axes the buyers agent but most often it gets paid by the sellers to confidential agreements. My colleagues found that after 17 undisclosed Revenue Streams for brokers, consultants, ptas, associations and other employer within player payment plans. I needed consultant expertise to help us make the changes they had to take place in the montana plan. I contracted with elias, who had my back the whole time. The contract only allows for direct compensation to them. From the plan. Compensation is closer for brokers and consultants is a good step. However, i recommend that the committee strongly considers sending these three wire is to all third parties that provide products or services to the plan. Transparency trance intended to put downward pressure on cost by increasing disability. In my experience, i found these transparency efforts are only effective in reducing total cost if you also Pay Attention to the prices. The prices must be fair. As i have into these claims data, i found extraordinary variations in pricing charged by identical procedures by different hospitals. He confirms his level of variation across the United States. Hospitals develop a secret charge master for the prices. You cannot see it. They set prices by the charge master. Insurance companies or the pta comes in and negotiates a secret discount off of that charge master. When i delved into our information, it was very plain to see we had no control. I contracted with allegiance and management plan, as rcp eight together and we negotiated reimbursement rates as a multiple of medicare and contracted with all montana hospitals. Including our 48 rural hospitals. Medicare pricing is a common public reference and repave multiple of it. We are now paying a transparent and a fair price and the change on its own saved millions of dollars in montana. Hospital 40 to 50 percent of plans resources. I urge the committee to consider provisions to force hospitals to justify the prices. Not just disclose them. Im an accountant, i followed the money. I said Montana State millions of dollars. While not making employee or employer contributions over a fiveyear period i did despite demanding transparency and pricing and fighting a right partners and taking the money out of the system and getting it back to the taxpayers and the members. It was my fiduciary duty to do so. Better Business Practices from the Healthcare Industry and i thank you for that for demanding it. Thank you ms. Miss bartlett and all of the witnesses. Well have questions then. Thanks very much and thank you to all of our Witnesses Today for your excellent testimonies. I too have heard from families across my home state of washington that are really struggling to afford healthcare. Ive been absolutely clever the start the democrats are at the table, we are eager to work with republicans to bring costs down. The delaware talk about today, is an important step in the right direction. It is also proof that went from republicans and Democrats Join us and put partisanship aside and put our families first, we can find Common Ground and help the people who are looking to us for relief on healthcare. People like stacy, shes a woman from seattle. She rubs my office about how she got an unexpected er bill for over a thousand dollars after she had a bike accident because all at the hospital she visited, was in network, one of the doctors who treated her was not. Stacy also shared with me how her mother has struggled with high healthcare costs two. Because after her mother was diagnosed with type one diabetes, she was forced to move in with stacy so she could afford her insulin. So her families like stacys and so many of them are really looking to us for help. Im really glad her legislation works to address the surprise going to patients like stacy will no longer get caught off guard by exorbitant charges for outofnetwork care. No fault of their own. I especially want to thank for their work on this issue. This bill also works to open the doors for a cheaper generic insulin which could bring down costs for patients like stacys mom. It would make it hard for Drug Companies to gain the system and put up roadblocks to competition from cheaper generic drugs. I want to thank senators kane, shaheen, smith Casey Cassidy collins and roberts and many others for working together on many of the ideas of this bill. Those are just a few of the many comments as we were able to come together on. Thanks to the work of senator peters and doug were the robbers, this bill includes the strong response to the threat of ache seen hesitancy. It supports to counter misinformation and increase vaccination rates in communities that are risk of outbreaks. It includes investments in Public Health data system pushed for by senators kane king and isaacsons, to better protect families against Public Health risks. And would ensure that state local and Tribal Health departments have important guidance on the cd prevention efforts. Thanks to senators john and scott. It also proven includes proposal to help expand the echo of medicine bonsallo which regarding opium crisis. Help address even more healthcare needs. In includes proposals to update Electronic Health records, make health data more accessible to providers and patients alike, and it would take a muchneeded step to respond to our countries Maternal Mortality mortality prices. Providing implicit bias training you women of color in particular, are dying at an acceptably higher rates. Overall, this bill offers a lot of good bipartisan steps. Mr. Chairman i hope we can continue to improve by continuing to work on proposals such as sender baldwin and smith and zero cassies important drug Price Transparency bill. I do want to say, to be clear, for really going to bring down costs across the board and help families who are struggling, this is no place to stop. Even if this bill offers family relief. They rejected democrats efforts to dissent or to action for people with preexisting conditions coverage for people nationwide, from a partisan lawsuit that is now moving through our course. President trump has allowed Insurance Companies to go back to selling junk plans to leave people with preexisting conditions vulnerable. And refused to take significant action to curb drug prices despite campaign costs. And he has slashed investments to help people navigate the Healthcare System make the plans that are right forum. A finer. On it, when your car is total, you cant fix the windshield and expect to start driving. So we have a lot of work ahead to do with us. I am really glad that we are here together on this legislation and im going to keep making it clear that it needs to be a first step the last one. Democrats understand and i know families do as well and we have a lot of critical work ahead of us and beyond this. Thank you very much mr. Chairman. Soon i thank you senator murray and before you came, i said much the same thing there. This is a healthcare and its big topic and a number of areas which we disagree and which we will continue to debate but one thing that we have been able to do and i think senator murray and the members and the staffs for this is identify nearly three dozen provisions about 16 from republicans and 14 from democrats and we have a few more that were working on such as Cassidy Murphy provision on healthcare and another that senator murphy mentioned. All of these are aimed at reducing the cost of healthcare paid for out of your own pocket. So these are first steps, i agree with her on that, there are other issues that we need to work on but we have been able to in this committee to fix no child left behind in the 21st year of abuse and other major issues that to identify the issues we do agree on. Mom had an in a meaningful ways. I think her for working in that way and i complemented both staffs before she came. Now i only have five minutes just like each senator does so i hope we can have an efficient backandforth because i have two or three questions id like to ask mr. Cavanaugh, you being a cms, youve seen the healthcare in a broad sense, this legislation basically seems to me to do three things. In surprise billing, all series of provisions aimed at transparency. Increasing transparency. So on the theory you cant reduce the cost until you know the cost. And the third thing, is to and you mentioned this yourself as a former regulator, we got a nine provisions to try and increase competition for generic and by similar drugs which are 90 percent of all of the drugs subs prescribed. If you look at those three areas surprise Billing Transparency increasing competition. Do you see those as meaningful steps in which one would have the most impact on reducing the cost of what people pay out of their own pocket for healthcare question mark. I actually dont see them that different. I feel like when you have surprise billing is addressing a failure of the market where consumer is not in a position to be an informed consumer making choices. There are in distress. Theyre going somewhere without full information. Transparency is what makes markets work so people know what theyre doing. These are also be procompetitive. And thats why i applaud the committee. I had to quantify the magnitude, i think the title iii, the ones that are specifically labeled probe competition about certain hospital negotiating tactics, i think that will have the most direct and immediate. But i think they are all willing and going in the same direction. Let me ask you this, transparency is a big theme that we have talked about here. On 340b program, hospitals put on their websites where the money goes. 340b is a law that says drug discounts should go to help low low income people. Why shouldnt hospitals be required to report that same information to herself. Is there a big problem with that transparency in your view . Where all four o transparency. We have a voluntary initiative on 340b members over 1100 members have complied. Then why dont you just take that information given to her so we can. I think our plan art is by the end of the summer, we will have all of this information to give people time. It can be complicated but we do intend on providing the names of the folks who have signed up and access to the data. A from my. Of view in the Community Health centers have to do that, you have to love the snow have abundant money. Were going to talk about transparency in the law says the money is to be spent for low income folks. We at least see how it is spent. That doesnt mean were going to tell you how is fit its how it is bent. This go back to surprise billing for a minute. A lot of senators have worked on that. Youve spent some time on it. It seems to me that if the problem is out of network doctors. That the solution is to have in our doctors. It seems to me to be the simplest. And it also saves the most money. All three proposal we put out, take the patient out of it. There are no more surprise bills. So the question is, how do we do reduce healthcare costs the most. The other two provisions are the benchmark type permit provisions which the house seem to prefer. In arbitration. You talked about some in your testimony but is it isnt arbitration really a sort of benchmark. I dont see much difference between the two and one of the problems with arbitration as opposed to a house benchmark proposal or the one that ive instinctively like the best which is to make everybody in the network. The short answer to your question is theres not much difference in practice between an arbitration system and a benchmark system. The reason is basically that if you think about what the arbor is doing, they have to make the same decision that the person chooses the move benchmark is going to have to make. They have two offers in front of them, they have to choose which one is more reasonable. The only way you can do that is you have to know what the reasonable number is which one is closer. So when i look at that just in terms of practice, i think it is very similar. There are some differences between those two options. It is to be a little los transparent, it is to be a little more expensive and over the longterm number of experts have worried that it might be a little bit los predictable about how its going to evolve over time. But generally speaking, the answer is there quite sweat similar at the core. Tell me what your preferences. This tmac i like the in Network Matching specifically because its the way we solve this problem in every other market. When you go to your car replaced, you dont have to worry about an unexpected bill from the person who repainted the bumper. It is not because we have an arbitration system to litigate bumper bill. It is because we go with all in pricing in most markets. Thats how we solve this issue. To me that seems the most accurate. My time is up. Thank you mr. Cameron. Senator alexander asked you about the 340b program which requires pharmaceutical prop programs to provide discounts on crucial outpatient drugs for low income high need patients. In other words, 340b, is one of the most effective programs as managing hydro because that we currently have. There arent any taxpayer funds involved in providing those discounts, correct . Correct drug company funds. The best way to receive this program were not talking about wasting taxpayer dollars. Mr. Nichols, hospitals do a lot of reporting as part of their participation in medicare. As part of their reports, do hospitals report on labor costs, Physical Plant expenses and marketing costs and everything question mark. All of the above. Medicare . We still report them. Mr. Isasi families usa supported the establishment of an man up medical loss ratio for loss. Does number plan to report like marketing and executive market . Sumac yes. We do have a bill requiring bills to report Drug Companies to report price increases over 10 percent. Do you think that is helpful information. We think its critically important. These drugs are lifeanddeath to a lot of people. This information should be available to the public and the policymakers. You would support that approach . 100 percent. As well as increases. Ms. Mitchell, many states including my home state of washington in past legislation to and Surprise Medical Bills. Your Organization Works with Large Organizations to bring down below the cost of healthcare. Why is it important at the federal government to act. We have multistate employers and its often variation across the state. It really increases the challenge forum so we need federal legislation in this area. One of the issues that we are debating, is what is the appropriate rate for it and insurer to pay dividers for a surprise bill. What impact do you think the proposal that we have in our discussion on and rolling premiums and access to care question mark. Are extremes in california that it has no effect on premiums. Actually believe that we can achieve very fair pricing at a hundred and 25 percent of medicare. Evidence shows that. 25 percent of hospitals are actually succeeding under medicare rates. We think that there are significant opportunities for business practical improvements and increased efficiency. Mr. Nichols, the bill that we are talking about here today addresses a number of Public Health issues that are critical to conversations regarding healthcare costs. One issue of increasing construction that ive heard so much about is the rise in maternal or tallow the rates. We have to do more help reduce those preventable deaths in many of the staffs occurred not during child her childbirth itself but during the weeks before and after childbirth. Can you tell us how hospitals are working with women that they have the information in the health care that they need to avoid this . Two thirds do not occur during childbirth. As before and after as you know. I am working with Community Partners that is led by a cog for many years to try and address the better. What your bill does provide more funding and more focus. The senate took action last year. Theres legislation in the house that we support. We need to do as much to solve this problem and we have a deadline where we really solve this problem nationally. Thank you very much. Mr. Nichols, on one of their topic, over a thousand cases of measles. Have been reported in the us. The greatest number in nearly three decades. More than 90 of those were in my home state of washington. Those outbreaks, good families and put an unnecessary strain on her system. I was overwhelmed by what i saw in clark county where we found the majority of these in the cost that it took to the Public Health officials, the community itself, all the reporting looking for people. So i am really glad the bill we are talking about that is in front of us includes combats misinformation. How can Healthcare Facilities providings and Health Professionals Work Together to increase vaccine confidence. We are very supportive of that. I think you go a long ways in that direction. We are of our members increasingly about the Measles Outbreak and what its doing to the communities and one is doing to their facilities but we all need to Work Together. You put your finger on it. Its the misinformation thats out there thats causing this problem that has to be fixed. Thank you. Thank you senator collins. Thank you mr. Chairman. Ms. Mitchell. You dedicated a substantial proportion of your career towards promoting more transparency. In healthcare pricing as well as higher quality. As a result the state of maine is one of the best states where you have all payer claims database. Im joined senators rick scott and cory gardner in introducing a bill that would create a consumer friendly database for Prescription Drug prices. In your written testimony, you talked about two powerful examples. Have an employer was overpaying for Prescription Drugs. One was for any patient, or the employer cost was a hundred and 38000 every two weeks, now looks like its going to go down to 26000. The other was a pediatric patient that cause for the employer with 750,000 and now using a different hospital, that cost maybe only a third of that amount. So what led to those Success Stories . Was it greater transparency, was someone negotiating for the employer, what produced those kinds of results . Thank you senator collins and i think those are important examples of both the problems in the system and also the opportunity to fix them. These cases could not have been addressed without transparent pricing information. It only these very large employers can have access to that information often times. We believe with greater transparency, more doctors or employers or insurance word identify Solutions Like this. I want to. Out that particularly in the case of the pediatric patient, does annual cost of 750,000 were brought down to 250,000 a year, same drug. They were administrated at home at the request of the family. This was a winwin for the employer and for the patient. We believe that transparency would enable more Success Stories like that. Thank you mr. Nichols. Some of the rural hospitals in maine are worried about increased transparency. Because the prices because of the smaller patients hot populations, that theyre serving, tend to be higher than their urban counterparts. Those rural hospitals are really important to communities and it will allow people to live where they can get care. So how do we balance the need to maintain Rural Infrastructure for healthcare and the need to lower prices which is imperative. Absolutely right and i think we need to be very mindful of the impact of any of these policies on Rural America and the unattended consequences that these policies could have. Rate setting which is discussed here a little bit. Because rural hospitals are higher in the margins are smaller they have a more difficult time getting staff physicians and nurses et cetera. We can have a National Rate imposed on them it will be basically a race to the bottom. Whatever we do here, any surprise bills, everybody agrees on that. There are provisions in the bill that do that. There are other provisions like ratesetting that worry is a lot particulate the impact on rules. List returned to ms. Mitchell for my final question. By a large one of the categories of drugs that are most expensive. Its a committee which i chaired at a number of hearings on this issue and what we found is that the brandname manufacturer often put patent ticket that prevents bio similars from coming to the market. By contrast the bio similar uptake in europe is much more prevalent than in the United States and in fact, the fda, commissioners has estimated that all the bio similars that have improved by fda actually made it to market in a timely fashion. American consumers would say more than 4. 5 billion. Do you have any thoughts and do you support the provisions in our bill that attempts to prevent the gaming of the patents system to delay the advent of bio similars to the marketplace question mark. Absolutely. We strongly support any of the changes that will enable increase access to by similars and anything that prevents we believe there needs to be strong action on drug pricing. We strongly support your provision. Thank you. Thank you senator collins. Senator passes. Thank you. I also want to give a special thank you to your staff. These are complex issues. Therefore lots of income your staff has been terrific free americans have, and congress to act. Ipod members of this committee. Im encouraged by the momentum behind our work and practice of Surprise Medical Bills. People get Health Insurance precisely so they wont be surprised by healthcare bills. So it is completely unacceptable to people do everything theyre supposed to do to ensure their care is in their insurance network. And still ends up with large and expected bills from an outofnetwork provider. As we mentioned ive been working with mr. Cassidy and mccaskey to address this issue in a bipartisan way. We work for over a year now. Weve received feedback from any of you on this panel. Im grateful for your testimony. Mr. Cavanagh, id like to start with a question to you. My colleagues and our Bipartisan Group agree the patients must be removed from surprise billing disputes. What has become clear that there are so benchmark payment rate plans and providers can agree would be inappropriate onesizefitsall approach. During your time there you experience how difficult it is to set uniform rates that work will across the country. Can you tell us why that was a challenging question wrecked. Sure. If you think about the Medicare Advantage. Its an analogy. If you go out of network, there has limits on balance billing. There is a set rate. The provider will be paid because its highly regulated. Thats built on it in normas infrastructure on the Service Program that takes thousand of employees in baltimore working every day. There is an infrastructure that has been refined over time but is not perfect but it is built on something. If you were together benchmark group, we support all three of four project because you are protecting the consumer and we dont have a preference after that. I do think in the legislation tries to anticipate that you will run into, the benchmark rate is ratesetting. You will run into some unanticipated consequences. Someone needs to figure out how to adjudicate those. Youre starting from scratch. Is it fair to say that even when you do establish a benchmark rate and is hard to maintain that as an applicable rate across the country for all providers question mark. I think what youre getting at is i do think there is unanticipated consequences that will if you decide to go that way that we dont learn that would take more than any of us could anticipate. It is one of the approaches. Thank you. Mr. Nichols, weve heard a lot of disagreements throughout this process on how to best create a best payment that works for all parties. Yes or no, based on your race. Do you believe there is a benchmark rate that you and your colleagues in the provider and Pair Community could agree to which congress could then legislate into federal law and apply across the country customer. We did not. Given the lack of consensus around when it correct benchmark payment rate would be, it seems unwise to me for congress to legislate and flexible benchmark especially when we know that if we get it wrong, it would take another act of congress to undo it. Do you believe in an independent dispute resolution framework similar to whats already in place or a law in 12 states would be workable for hospital providers and payers and why or why not . I believe as i mentioned in the three options, that is the most preferable option. We would prefer to continue to negotiate with our insurance colleagues. Would like to do that particularly for physicians critically for the rural physicians. At the dispute resolution system, much like in new york state which is proven effective, efficient would be the best option that is in the bill. Thank you very much. Im done with the remainder of my time. Senator cassidy,. I like much of your testimony and by the way i read an article about you in these be still my heart. We did in montana, and i if i wasnt married to my life and i dont know your status [laughter] but that said. [laughter] two stories. My daughter got kicked off alice in wonderland and we took her to the emergency room, shes bleeding from her forehead. Ver is that we dont have a plastic i go to his office. I got a bill for 3000 per glue that the guy put in the taking five seconds. I was in a tennis match and all of a sudden i get this black spot, i call it in ophthalmology from the mind and he said youre having a retinal tear go to the eer right away. The air said you need an er coming you need to sit vc the ophthalmologist and you need to see him tomorrow morning. I got a bill for 1500. Both outofnetwork. Does Network Matching help me any of the art of the in which i was not saying in a hospital but rather preferred to the physicians office. Argued question. The end network guarantee, would take care of a very large portion of the surprise bill but they are the ones that occur as you are in network facility. On the other hand, [laughter] i do gather that under the proposal that she and i have, i wouldve been cared for in both situations in which there would have been in and out of work price, and so the wouldve been an outofnetwork dispute. But i wouldve paid 3000 for 20 seconds worth of glue. Or 1500 because it in network because i got marital back but nonetheless it was outofnetwork. I want to say there is a superiority. I think were naive if we dont look at this. There would be more migration out of the end Network Hospital into a study not covered in a network. If we were were to put restrictions on which if physician could bill. I would clarify one point arbitration and a benchmark system covered you in that case. So therefore you must pay doctors in alaska more Market Forces if you will so i suspect even in florida there are different rates if you are in miami we get more than a rural area you would get fewer. But they have the benchmark to require complexity that reflects those different states as well as different areas within the state and they do think that is a complexity there. The reason why have the benchmark and those arbitration options based on the average in network rate in the area. Im not sure that it has. And what you have mentioned in your testimony. Also i want to make the point the states that have laboratories of democracies or arbitration models and tennessee orange is the benchmark so empirically among the states and Washington State has purple. I would clarify one thing that most hospitals do not produce outofnetwork bills so to map that would suggest getting as part of the dispute resolution so in your testimony you suggested that it should be more expensive but cbo scores the savings of that capacity proposal at 17 billion where matching is only 9 billion so it could be expensive but it is less expensive than Network Matching highyield back. The future alexander the tattoo back has been really good work done on this bill and for you to testify and answer those questions but i believe the number one thing that i hear about from minnesotans across the board is the rising cost of healthcare into the rising cost of Prescription Drugs so i am glad that proposal before us includes good drug pricing provisions and the bill with senator cassidy is included which would help more low cost bio similars into the market and the proposal to the insurer innovation act for their those to make minor tweaks in their formularies is anti competitive strategy to benefit the Drug Companies and not the consumers perk i know your organization has done a lot of work on the issue of lowering the cost of Prescription Drugs. That what is your feedback on those proposals of this bill and what else do you think we should be doing . Mimic we should support those proposals. It is very important but not nearly far enough and we strongly support strongly support the notion that price is the problem and we need to address drug pricing we need the government to get in there to fight for fair pricing. Exactly and increased transparency is useful but thats not the only thing to lower drug pricing i appreciate you lowering the bill that essentially it would allow subsequent generic to share exclusivity so they dont have that in the ashley does something about the exclusivity. As you say it would allow us to refocus the drug industry and innovation and not reward smart lawyers. Not that we have anything against smart lawyers. [laughter] however. And other issue that is important to minnesota that has to do with the all payer claims database. And this has been incredibly useful to help us get a handle on what is happening with the drug products like insulin and how much they pay on average and how those prices have risen over time perk was given our department of health a very important tool for addressing some of these issues. And how important it is to look at this on a regional level. So the bill before us does work for all payer claims database. But i heard some concerns from the Minnesota Department of health and others how this would work in real time and for the states to get the information that they need. You know that the concerns that we have had with this so how do you respond to the concerns that they have raised specifically the legislation before us was drafted may not provide timely access to the data that they need from selfinsured plans quick. There are multiple plans to achieve the same goal. And i understand as an effort to try to create a database for those plans but then to combine the data with the federal data. So to the extent that is a Sticking Point and add a baseline from the theory. As im about to run out of time i am eager to resolve this issue so this can proceed at the state level as well as at the federal level. Thank you i am out of time. The chairman is left for committee and will be back. A wish we did have more than five minutes is such an important topic to understand those 14 proposals from the other side of the island 16 from our side. This is a big deal. I am approaching this as a ceo of a company it needs to be there not hr if we will ever fix it. To have a little bit of history on what i did but i was is frustrated that every year it was the same issue. Premiums kept rising. A smirk youre lucky its only going at five or 10 percent per year letting the industry know that we are with you and it is a crisis. And to challenge the industry we should need 14 proposals and 16 on the side what is 18 percent of gdp and with that competition and transparency with those profits at work elsewhere. And through that frustration hears what worked for us and to be incorporated in these ideas we are talking about. I figured out back then completely atrophied to be involved in the market but the Insurance Companies say part of this is the fact people that use it never ask how much does it cost and thats important with everything you can get including Health Savings accounts will this not remediation and then to cut cost out of the game by 50 percent with no caps on coverage which we need to do as part of obama care and we need to get with it. Now with a premium increase my employees are engaged with the Healthcare System to see how much it cost despite the industry not doing much to accommodate. We are running out of time employers are getting frustrated most are not as passionate as i am with the group in california. And there is a clear alternative on the other side. You ought to be fixing it yourselves not having us here that would not occur in any other sector maybe we can get more in on another round. For ms. Mitchell, in your group which looks like it has a lot of large employers im sure what i said resonates. What have you done to look at the other end of the equation . To have full transparency and the desire to give the best choice of quality. Do you think the consumer or the employee has atrophied that if we do make it more transparent and we get the industry will we have people willing to have skin in the game quick. The patients and family to help with their families but they are in a completely untenable situation providers are not even allowed to share information. We asked them to be responsible consumers but then dont allow them to do so. Our members are trying any innovative approach to work with their employees to address their concerns so we absolutely believe transparency is necessary and have active involvement. So you do have skin in the game but you do have to cap the cost where you never go broke if you have a bad accident and i would love to share those details with you and it did work but i thank you say the same thing i am. It is the most important thing out there. Miller being growing higher than healthcare cost so to take this as a warning and a challenge it wont happen unless we go to the other plan which is medicare for all we are at a moment in time that we have to reform itself. Industry wake up. Thank you. I am encouraged by the committees effort to address those health costs. But i am very frustrated to hold those Drug Companies accountable for jacking up drug prices or existing medications. And those that have increased to ten times the rate of inflation reaching far too many families those that are seeing bigger paychecks that the ceo pay increased by 39 percent in 2018 the highestpaid executives making between 20 and 50 million per year. That is why i worked with colleagues on both sides of the aisle including senators braun and murkowski and smith with basic transparency when the increase the existing drug. And with those lower healthcare costs measure Drug Companies spending 172 million in lobbying last year. They worked hard to defend and distract from their price increase ease one increases to show large investment in developing new cures. Showing the opposite one study shows nearly 8 percent of every dollar spent by big Drug Companies does something other than research and development. The market is clearly broken and taxpayers deserve to know that we are getting for our money so why do we need to include the fair drug pricing act in this package to ensure transparency for increases and why is it important for companies to report specific metrics Like Research and expenditures and other items quick. We strongly support education and its very important as you point out industry is currently broken with those legal tactics and these drugs are lifesaving set the very least they should be able to objectify like the Insurance Plans do and what those increases are for. They ask them to report more information on their pricing decisions Innovative Companies to invest significant resources in research and development to have the opportunity to demonstrate the value of their investment to the public and this bill would do nothing to prevent a manufacturer from increasing prices. Can you explain discuss how more data and expenditures will help policymakers and other stakeholders make better healthcare decisions . This is critically come on important most of the drug pipeline has dried up and converted to generic drugs. They have huge price spikes dont have the most competition not necessarily the most effective we should have transparent information why the price is going up because of real innovation but what is happening right now the Drug Companies are making more and more money not because theyre saving lives but because they are distorting the market. And everything we talk about with rebates but that was an estimate because you cant get insight into the actual price of the drug. Its just a starting point. Thank you Ranking Member i appreciate the most critical issue for the American Family. I very much sympathize that Prescription Drugs is an area of a focus for this committee where an opportunity is apparent to help the american consumer. And as a measure to help in this regard to ensure that those individuals for Prescription Drugs is based on the net price not the retail price of the drug. And then to have the advantage and hope that becomes part of the final bill but most of this discussion today focusing at different points of view so to focus on that area. You indicated one of the challenges with the benchmark you have a huge network of people setting medicare rates if that doesnt exist with the benchmark system. She indicated she was at the benchmark based on those medicare rates so what you are concerned about is to set a benchmark rate and do that based upon one. 2 five times but to use that as a benchmark is that the complexity quick. Yes the point i was trying to make with Medicare Advantage the benchmark rate operates this way but it is publicly known what that rate is in every community for every service this legislation is one of the options to create a new benchmark rate with a new methodology it wasnt meant to be a bigger point than that. We think this is the most straightforward and transparent way. Does anybody want to comment on the advantage or disadvantage with that arbitration process . Im concerned at first blush it will be highly complex with after the fact negotiations and arbitrators that may not be familiar with those specific circumstances wouldnt it be easier to tie into the medicare rate . Yes i would have a different view. Our concern is first of all it is well documented and congresses own Advisory Board says medicare does not pay the cost for hospitals that are fair. So to base anything on medicare rate second there is no difference between that and medicare for all. And third one of the concerns is if it is out there if there is a default rate why will the insurer go to the default rate . They wont have those Broad Networks and then we come back to medicare for all. So to follow up, to be clear going to the arbitration process we are using a benchmark ultimately we do the same thing so i would say if you think medicare is too low and that is fine that doesnt mean you cant use it times two or times three and that advantage is that isolates it to be gained by market actors trying to engage to change that benchmark rate that is one advantage. 25 percent of us hospitals manage their cost well enough that they are successful under medicare and we are not talking yet about cost. The recent report shows that they build commercial players taxpayers 240 percent of medicare so what is the actual cost and how do we agree on a common standard . We believe 125 percent is fair. Thank you very much. Thank you for the Ranking Member and the work you have done we are doing a lot of juggling today that mister chairman i want to raise something i know you are aware of and we are trying to get it done this is a reform regulated overthecounter drugs to have an interest to make sure that any Prescription Drug is safe and effective with the most up to date Information Available with a Bipartisan Legislation senator isakson and i have worked on for several years. And we are hoping we can get it done so for the record can you push ahead to pass this overthecounter vonnegut monogram legislation . You know that i think it is very important. Thank you for the question. Not that it was essential and we are trying to move it forward. So moved to a question some developments that have played out over the last several years was something even more alarming that has arose the last couple of weeks we know this committee is engaged in a process to bring down the cost of healthcare as long as Prescription Drugs and that undermines those efforts what can only be described as sabotaged by the administration with the Healthcare System with regard to what happens with the exchanges as well as medicaid itself. I will not dwell on that today. We do know from data released early this year 7 million fewer people have healthcare there is a good article that describes this that the number of uninsured americans has gone up by 7 million. This has compounded by what the administration is undertaking with the measure and we know if the proposal is adopted in the chain cpi and i reading from a letter that i drafted because that shows lower inflation over time fewer americans are well below the property line. Here is what it affects health and Human Services on the official poverty measure threshold like medicaid, childrens Health Insurance program, the block grant, Community Services block grant, head start, on and on so this is the letter that we have sent to the administration to reconsider the proposal and i want to direct the question so what is your view was what we are trying to do to Lower Health Care cost to make we are incredibly proud of the work of this committee to address Health Care Cost that would American Families want is to be healthy and not get on not go bankrupt and with real meaningful coverage it is the opposite of that goal so we are deeply concerned with all those people that lose coverage and the fact we have seen 300,000 children lose coverage that is totally unacceptable with chain cpi we are very concerned about this and another half a million will lose coverage because of this over half of the children. So its focused on the notion of Financial Security so we should all pull in that direction be deeply concerned. Thank you mister chairman. I apologize it was a here to listen to your testimony but i have read your statement and listening to this discussion my colleagues on the committee know every time i ask a question with healthcare it is always through the lens of what is the impact on the rural areas and areas in my states. So i look at all of this through the perspective we dont want anti competitive provisions. If i only have one clinic or provider how does this work . You spoke to potential effects of the anti competitive provisions. When we are looking at the various proposals we have in front of us i am curious to know whether your review has included situations where you have a community with a single hospital where a single prominent in insurer, who has the most negotiating power cracks how do you determine the in network rate in the area you dont have in Network Providers . With a similar Geographic Area when those were not connected then how do we define this . You have looked at this from a regulators perspective. Do you think it is possible at the National Level to adopt a standard method that can account for the wide discrepancy in differences . Thank you for the question. In the context of surprise billing all three approaches are equal in that first and foremost they protect the consumer from that perspective to validate that position they are not involved. So i applaud that. That is the first order of business and they all do that and after that then it is just a dispute between the insurers and providers that is problematic or we are equally concerned when the Insurance Community is consolidator with the approach using a network guarantee with multiple providers and insurers it might become more difficult. We try to do onesizefitsall that is the most convenient for us back in washington dc we want a standard but in certain places its not possible in your written testimony you provide a couple of different options in order to stay open yet to have adequate staffing one is to make sure the anesthesiologist are willing to work and then they have to ensure their staffing. Last week in tennessee that 107h row hospital close since 2010 where we are going the wrong way in terms of encouraging the rural hospitals to keep the doors open how do you line up your statement there with adequate staffing quick. There is a economic challenge that faces rural hospitals that isnt urban hospitals and that is outside of specific s scenario. Fair enough but talking about billing how does this keep the doors open quick. I should caveat that to say it is conditional on a sufficiently robust area that they can actually do than those will be fundamentally problematic however if there is a concern that there is a decline to exist several hospitals that i certainly hear the concern there is a little bit more direct. My time is expired i listen to others but thank you. Welcome back mister chairman. Thank you to you and senator murray for this package and a university of nevada graduate i appreciate that. I want to add to the rural concerns. What i really want to do section four oh four that authorizes grants to expand the use of telemedicine to increase access to Specialty Services in underserved areas i hear over and over preserving access to quality care is an issue and everybody is underserved in alaska so it is critical to us. And anybody here can chime in that can be used for telemedicine equipment training and program evaluation. So i have a two part question so what else to get the program up in right running so what is reasonable for Telemedicine Program once we get those templates done . That point is incredibly important and as you point out those are true disruptions that allow for high quality settings that is not the old Business Model with four walls that is expensive this is a good example this is a phenomenal example of a program that allows folks in very rural parts of communities to get better care than they were getting it trains the providers it creates a learning community and allows providers to talk to each other and learn so these are critical elements that we can get high quality healthcare to Rural America. And those templates that we could export around the country . Up silly mississippi thats going on in mississippi as well. Much of maine is also front tier working with many rural hospitals in this date we are sensitive to the pressures of those hospitals they are very real and we hear them say they have to charge inflated prices to subsidize the care we are not paying for like maternity or primary care. So we do need to look at direct ways to subsidize the care and not just look at hospitals but also the patients but on the Technical Advisory Committee those that were supported by physicians to transfer that rule care to patients telemedicin telemedicine, these innovations are essential. So how do we consolidate the commonplace of these templates that other places across america can see the challenges they have with a particular disease or area to improve upon how do we put these good examples to export across the community and country . Make congress has answered that question by creating the Innovation Center at cms now they are under way specific to rural hospitals one is a pennsylvania the other started what started with global budgets for rural hospitals dont make them dependent but free up the funds and that should be the platform publicly funded public evaluation dissemination so we need to get those lessons out. And how to potentiate what is happening across the country to export that. I think they have the tools thanks to the congress but to go faster and go better. One thing we cannot lose sight it is exciting because for all of us these innovations will be available to us this is interesting disruption but scope of practice we have to get a handle of think senator murkowski murkowskis he has been a leader to provide new kind did of providers when senator murray was very involved in creating the commission but that needs to be funded to understand those dollars flowing into the workforce because right now we have total misalignment between the federal dollars and the needs of the community. What time is expired. Thank you. Welcome back we appreciate the work of the chair drinking to get us in a good place to go forward so with that discussion of role hospitals looking at a slightly different way the testimony 107 rural hospitals have closed ten last year one last night im sorry to hear we had to close one of Patrick County one in lee county that had been heartbreaking stories about the effect of rural hospital closures one was in southeastern kansas another with the closure in oklahoma. There is a solution. Not a magic one item solution but there is a solution from these communities. Ninetythree of 107 hospitals of those that have not accepted Medicaid Expansion those in virginia they have now accepted Medicaid Expansion but those closed years before the state is that if you accept that we could keep the hospital open. But then can they reopen and there is a possibility but when we have these discussions over rural health that is statistically set of data 93 out of 107 have closed since 2010 and is in this country know i know hospitals dont like medicaid reimbursement rates they like medicare little better but not much but the different is a very significant factor on the bottom line so i will have you speak to this but there are things we should do says the Supreme Court rendered a ruling if people are decrying the community is losing healthcare resource and people are losing access at this community have had their entire life and they have it within their capacity that dramatically affects whether they can stay open but they are choosing not medicaid they are confining them to her it is very likely they will continue to close. I hope one message that we do this from congress with a caboose medicaid past it was an option and not a mandate the last day to embrace medicaid in 1982 was arizona. Seventeen years when they finally embrace medicaid on the Affordable Care act passed arizona was one of the first with two republican houses and republican government because they realized what do they get for being the caboose . They got worse health care for hundreds of thousands of people over 17 years and they would not be the caboose. Now those that dont compete to be the caboose if you want your rural hospitals to have a fighting chance this will help them to close in many interests instances. I totally agree theres a crisis in Rural America with hospitals there is no questions and those to condense on convince those in virginia is one of them trying to get Medicaid Expansion but there is no question when you look at the issue that doesnt mean things like broadband is not important or telemedicine but there is a lot that has to be done there are rural models out there that people need to have coverage. We repeated our loud of questioning. I dont know if the issue has come up previously in a round of questioning but when we look at surprises in alaska as a very high cost 880 percent of communities are not connected by roads we fly to the hospital with air ambulance and medevac and it is not unusual for a medevac to be between 50,100,000. So i do want to ask the question you are from montana. Correct so have you made any progress at one progress in your state to address air ambulance cost within the health plans they are . I know this is a part of what we are dealing with but as we talk about this as cost drivers are trying to see if there are some areas where we have seen some headway. We set reimbursement at 250 percent of met one medical or in Network Route network. The result of that Issue Committee and that did pass within montana required initial payment that is the normal in Network Payment or the negotiated amount because then they could be held harmless but then if the other party whether the air ambulance or the Insurance Company believes it is not a fair amount then they go to arbitration and that seeks to the commissioner insurance. It is working well within the state. All this come from within network except for one but that particular one has closed a couple of their areas but they were not rural so we have not had lost care at all. Images to extend the question extended earlier within the variations of the market of the benchmark and in my view is the most predictable framework so you do believe the benchmark rate based on those negotiated rates accounts for those variations within the rural markets and can you speak more broadly to the impact with providers and insurers quick. We do not support that approach and we do believe that if you set a National Rate it will not acknowledge local conditions over a place like alaska we fear the harm it will do most is to rule america with prices be higher and margins are smaller and the danger something going wrong is far greater and so make sure whatever we do there is no harm to Rural America to get the patient out we agree that the year approaches that arbitration is the best anything with the benchmark rate however described is a benefit to Rural America. I would like to clarify the arbitration system and benchmark system both reference as the benchmark rate so thinking about the benchmark rate to be based on the same thing of the benchmark which is a local rate. And the question that i answered earlier thats why we dont like that rate that is in the bill with the benchmark we think there should be no benchmark but negotiation between the two parties one will been one will lose there isnt a benchmark that is the better approach. To add one thing within montana legislation in 2017 statute that the cases go to arbitration now to the democratic senator. Thank you for the witnesses thank you for working so diligently very quick for each. On the board of eli lilly publicly said he wants to get rid of pdm rebates and what to go directly to the pharmacy and i applaud him for sticking his neck out as a major individual in the Healthcare Industry. The American Hospital association my local hospital embraced something but it was still the charge master being published so with the American Hospital so she should be willing to publish in understandable form and then talking to a lot of people that really know what makes the Current System not work would you be willing to expose thirdparty arrangements between providers and Health Insurance companies that so many people told me that would break the system and then you could cascade into transparency and competition but i know that is a load but give me your quick comment. Charge master is a daunting experience and then to publicize more and more i agree i dont think that something that people need to the degree that we can do it and make that simple enough for people to understand i think thats the way we should go. What about the thirdparty agreements. That one we disagree with. And then to raise concerns but the ability for the two parties to this contract negotiations is important and even the ftc and a robust competitive market. In the market like yours but Miss Mitchell what do you think rex do you see the end of industry is there any chance the industry will start to come around where we dont have to legislate into action . If these worked we would not work on we would not be sitting here everybody deserves the insight about the quality of the outcomes and cost we are all in this together we need a system that is responsive to the American People that presumes transparency and accountability. But the bill that senator murray and i propose requires to give information on the rebates of the system so they understand what they are paying for so with pharmacy benefit meant manager negotiated 400 discount and a 600dollar insulin price they would know instead of 600 it is 200 how will we know the employer will pass that discount onto the patient that has diabetes . But that is an important question many are doing this now they are extending the rebates to their employees they dont actually have the cost information so they use the estimate and rebate off of wildly inflated prices make this more complex and convoluted and looking at this for clear and clear and transparent pricing. This is how it is supposed to work where there is room for lots of contentious discussion and we have it here. So here we can identify Health Care Cost that people pay for out of their own pockets with surprise medical billing and transparency a number of provisions in the bill that would increase transparency in a number of provisions in the bill to increase competition for similars and generic drugs which is 90 percent so those are steps in the right direction i hope we can move ahead next week to vote on this we call this market up and put on the floor and turn this into a law this thorough process hundreds of comments and we have a few things we need to work look at with three dozen proposals equal number of democrats and republicans we are on a good track the hearing record will remain open for five days members may submit Additional Information thank you for being here we are adjourned i had my wrong glasses on. Within ten days the committee is adjourned. [laughter] [inaudible conversations] [inaudible conversations]. 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