captioning performed by vitac there is an ongoing, underlying fraud program, but the new resources and the new tools we have allowed us to for the first time put together some of these technology advances that really have been used by the private sector very effectively for a long time, but missing in our critical healthcare programs. >> in the moments remaining, there are two issues that i would like to work with you and your staff on. one is medicare beneficiaries

are often designated as being in the hospital on outpatient observation status. they could be in the hospital up to three days or whatever under that status. they're not really admitted as an inpatient and this affects when they're sent to a nursing home or put in an ambulance. often they don't really understand what observation status is. you're in a hospital bed, you think you're in the hospital. you think you have full insurance coverage. i would like to work with you on that. >> glad to do that. >> and the other is the important information, hospital compare that is a useful tool for consumers, but there's also the feeling that some of the safety net hospitals for reasons, for example, dealing with non-english speakers that their ratings get lower and that

concern has been brought to me. these are little tweaks that i think we can fix. i want to thank you for the fact that you are working with the states. you are working with members of congress to make this a better bill and a better policy. >> gentle lady's time has expired. gentleman from michigan, mr. rogers, recognized five minutes. >> thank you. thank you for being here. as when working closely my democrat colleagues on the re-authorization bill, i would hope that we could submit some questions for the record that's very important to us. i know it's important to you. >> that would be great. >> we look forward to working with you on that. in the 2013 budget, how many are dedicated and committed to getting this -- the healthcare law up and implemented and coordinated in the states? >> i do have those numbers here, if you could give me just a moment to make sure i give you

the accurate number. we have 210 people in the division that is specifically working on exchanges, health insurance reform and others and we have another about 146 working on the parts of the affordable care act relating to medicare and medicaid and then some department wide folks who have picked up basically some of this effort. so about 800 people throughout cms are actually dedicated to this effort. >> do you expect that number to rise in future budgets just for the implementation and management and regulatory administration of -- >> this is an fy-13 number that we are supporting so it includes any increase that we're seeing right now. a lot of what we're doing right now is covered by the facts that

we have. >> okay. so my concern was when the chairman went through and there's no federal state exchange rule, there's no -- for states, excuse me. there's no federal exchange rule. there's no guidance and rule on what is an accredited health care plan. we have about 18 months, and my concern here is -- i understand what you have been saying, but we have insurance agents who have been a bastion for small business being laid off. as a matter of fact, i had 150 workers at one company, 30 of which were in my district alone. we think there are thousands and thousands across the country because i think the medical loss ratio rule is wrong. we have a very bipartisan effort here to fix it. can you commit to fixing that here today? >> we are following the guidance from the very bipartisan

national association of insurance commissioners. we adopted their rule on the mlr and we intend to stay with their rule. >> so it's okay that we're going to continue to lose these jobs and we're going to lose more tomorrow. these are the very people who are going to try to make some sense out of this massive set of rules that's only going to give them a matter of months before they are fined by the federal government, you understand what i'm concerned about? >> well, i think that there is a slight mischaracterization about our progress on the rules. we do have a proposed rule that is out, has been for months on the framework of the exchange. >> i understand that. >> on medicaid. we have a very detailed -- >> i'll reclaim my time. i heard your answer on that earlier. that does nothing if you're the person who actually has to raise the money, sell the money -- excuse me, sell the product, raise the money, hire the people.

a proposed rule does nothing for certainty for me. nothing. here's i guess my point. it doesn't seem like there's any sense of urgency of what's going to hit the very companies who fight for their very survival and the one sector that was going to be eliminated. by your law and by your rule eliminated the broker agents who said let me help you guide this before you get slapped with a $2800 fine. >> and there's know elimination of those who served as -- >> i'm reclaiming my time -- >> valuable folks -- >> except they're losing their jobs. >> it didn't define the broker and agent -- >> so they're eliminated through the back door. that concerns me. we ought to at least just be frank with each other and admit the fact that the brokers are

going away. yes, the law didn't say you're going away. the impact of this law is they are going away. very, very concerned. let me get to the second part here. i don't have much time left. 30% of doctors according to the ama said they're restricting the number of medicare patients in their practices. to thirds of physicians have looked into opting out of medicare for treating patients. we see this huge cultural shift in the practice of medicine. they're selling to hospitals at an alarming rate. costs go up. they are reducing the number of appointments per week for senior citizens. and they're stopping to take new patients. how are you going to stop this and fix this for the future? this is a disaster for our seniors. i hope it's something you're spending time to get right. >> well, i think the best way to actually make sure that the 97.8% of doctors who currently have contractual arrangements with medicare continue those and it's a long-term discussion and

actual fix of the payment rate, which over the last three years expires a week at a time, a month at a time, a year at a time. the president has proposed in his budget and paid for in his budget a ten-year fix for the sustainable growth rate. that is the biggest issue that i hear day in and day out from physicians, practicing. they don't know if they'll get paid. being a good payment partner for the 48 million americans who rely on medicare benefits i think is the most essential thing. we would love to work with congress and get that done. >> i would agree with you on that. also if you talk to the doctors the medicare healthcare bill has made it impossible for them to survive. >> the medicare health -- >> excuse me, the healthcare law which is why you see this cultural shift in the way medicine is practiced -- >> the gentleman's time -- >> i hope you get a sense on this, because people are impacted on this today.

thank you. i yield back my time. >> the chair recognizes mr. engel for five minutes. >> thank you. madam secretary i want to echo the remarks that mr. waxman made. i think you're doing a fine job as secretary and i want to thank you and my constituents for the good work you do. i am very proud of the fact that my state of new york trains the largest number of medical residents in this country. we have over 15,000 residents developing all kinds of life-saving skills in our state as of 2010 and we train and new york trains the largest number of primary care physicians in the country. given the increasing age of the baby boomer generation, 32 million newly insured americans are projected to enter into the healthcare system over the next few years i'm concerned about the physician shortage that the country is facing. i wanted to echo what mr.

pallone said earlier. i was disappointed to see the president's budget included a 10% direct cut in direct medical education funding and a $177 million cut to children's hospital graduate medical education funding. i think we need to be training more physicians and adequately supporting our teaching hospitals, not cutting their funding as they strive to train more providers. hospitals will already see significant cuts to bad debt and dish payments which disturbed me greatly because we fought for dish payments for new york in the affordable care act. so as a result of hr-3630, the middle class tax relief and job creation act, bad debt cut and dish cuts are there. and i'd ask that be looked at. >> well, i share your feeling that a critical piece of the puzzle for the united states

having better healthcare, better patient care, better health is certainly a robust work force focused on prevention and so we would work with you to make sure that we're using all of the assets, all of the resources to do that. >> on prevention, one of the best parts of the affordable healthcare act i think was the establishment of the prevention in public health fund. i think that should be a priority. and i was also disappointed to see significant reductions were made, including the cdc as part of the budget request. the rationale which was provided was that the preventive fund would help fund these -- the prevention fund would help fund these programs facing cuts, but the point of the prevention fund was to add to the budgets of various public health programs, not to supplant their existing funding.

given the fy-02013 budget request and in light of the fact that the middle class tax relief cut off 5 billion to the prevention fund, i'm concerned we won't be able to fulfill the goals of the fund. can you explain how those at the cdc will be impacted given the payroll tax legislation which is now law? >> well, i think that we are eager to not only have the basic programs of the centers for disease control and prevention continue on, they're vital to states around the country, they're vital to the health of all americans and some of the prevention funding you are correct is paying for those ongoing programs. i would say also there are some innovative and new programs that are showing great promise that also are part of that prevention funding and we are going to --

now that we have an outline for the further reduction of $250 million be working with -- closely with congress to make sure that these initiatives don't take even more disabling cuts. unfortunately at the state level as you know, the states have made some serious reductions in their public health budget. so we are really trying to not only make sure that the national efforts go forward, but that the state workers who are embedded in state departments across this country doing vital public health work are also continued. >> i wanted to quickly mention dental care. in a report the pew center report says that preventable dental conditions were the main cause for over 830,000 emergency room visits in 2009, which is the 16% increase from 2006. and in new york we estimate $32 million was spent treating

children for dental related ailments in emergency rooms in 2008 alone. i introduced hr-16 -- special care dentistry act which requires medicaid programs to provide dental services to blind and disabled beneficiaries. is hhs working to address the shortage of dentists in the urban and rural areas and how can we encourage more dentists to serve children and those on medicaid? >> well, we would be looking forward to working with you on this. it's more challenging than any other provider group. we see a great shortage of dentists who are willing to participate in the medicaid program. we're working actively with states and others to figure out strategies to engage more dentists, but i would say that we would love to have your

strategies, your ideas because it is a challenge in every part of the country, rural and urban, where we see this lack of providers who actually deliver incredibly important health services. >> i will be in touch with your office about this and another bill about mom and babies act. >> the chair recognizes the gentle lady from north carolina for five minutes. >> thank you, mr. chairman. thank you, madam secretary, for being here. i want to go back to the medicaid expansion issue again. i know dr. burgess touched on it, but it will expand to those with income under 32% of the poverty level and that accounts for nearly half of the population under the law. the cbo estimates that by 2022, federal outlays for medicaid are expected to total 605 billion,

more than twice the 2012 amount. obviously, many millions of new people would be covered by medicaid at that point, but it certainly is a pretty disastrous budget outlook. so as you know the president's budget forces about $60 billion of medicaid burden on states. and states already can't afford their medicaid programs. i know the problems we have in north carolina. as long as the administration doesn't allow the states more flexibility and insists on enrolling these millions of new medicaid recipients, how are we going to afford as a country double spending on the program in less than a decade and i don't see that the budget really addresses it this year. >> well, congresswoman, the affordable care act laid out a program as you say that in 2014 regardless of where an

individual lives in the country the medicaid enrollment eligibility will be identical so that individuals up to 133% of poverty will qualify for medicaid, those up to 400% will qualify for tax credits in the exchange program. the vast majority of those new enrollees are paid for by the federal government. they do not add to the state budget. in fact, the first several years it's at 100% federal funding. it decreases over the first ten years so that the highest level of state would be paying for those additional enrollees is a 10% match. the congressional budget office estimated that actual state expenditures on medicaid populations would go down not up.

and states will also be saving what's estimated to be about $80 billion that they're spending on an annual basis right now in uncompensated care. having a payment system under a lot of individuals that come in to community hospitals, or come in to the health system but have no payment strategy whatsoever. >> most of that is paid by us, the federal government, when we pay the hospitals. >> we pay some of it, but i can guarantee you as a former governor states pick that up at the state level. >> right. i yield back. >> let me ask you, because when the president came out and announced the compromise -- >> i'm having trouble -- >> when the president came out and announced the compromise on the contraception a couple of weeks ago, he described he wanted this to be free. i was taken aback by the president's superficial knowledge of health economics.

so have you tried to help educate him when things are free that they're really not free when they have healthcare or medicine stamped on the side of them? you might impose a formulary on all the patients of the country, you have the doctor's time that is still involved with writing the prescription, a doctor is still required to manage that patient. hear about the complications that occur and the doctor has to buy liability insurance. none of that looks free to me, having practiced medicine for 25 years. have you tried to help educate the president on the fact that healthcare is generally not free? >> mr. burgess, i think what the president was referring to and i think he understands the economics of the insurance industry very well is that this

directive, first of all, in the law is to insurers. in an insurance pool there's a balance of risk. what is estimated by actuaries, by federal actuaries, is the provision of contraception to women balanced against unintended or unhealthy pregnancies. that is not loin a no cost but estimated by -- >> why did we have to interfere? obviously it was in the marketplace. i yield back, mr. chairman. >> thanks. i recognize the gentleman from georgia. >> thank you. madam secretary, thank you for being here. ranking member waxman was quoted in the hill newspaper yesterday as saying and this is a quote, i pad is a useful backstop to put

discipline on congress to stop out of control medicare spending. do you agree with that? >> i do. >> because the president believe we need to save the medicare program from bankruptcies like ranking member waxman does? >> i believe the president believes in very strongly and -- >> so -- so my time is limited. yes and no is fine on that. thank you for that. >> i didn't give you an answer. >> -- slogan, we can't wait to highlight congressional inaction really on many issues. tell me this. should we take ranking members waxman's advice and start showing discipline to reform medicare this year or should we tell our seniors to wait until after the next election? yes or no? >> the president's budget has a very positive proposal for

medicare which not only ensures that the 48 million people have the benefits that are committed to them, but that we continue to slow the growth rate which has happened every year. >> well, i understand that. and my time is limited so let me just say this. i asked you the question, does the president think that we need to address this now is -- >> you would ask that you pass the budget, yes, sir. >> the answer is yes. thank you. are you aware that the cms actuary predicts that the medicare program could become bankrupt as early as 2016? >> again, action is required. we are taking that action. we'd ask you to pass the budget which has additional slowdown in the growth rate. as you know the affordable care act added 12 years to the trust fund and we would love to engage in a more comprehensive

discussion as long as we don't blow up the benefits that 48 million people rely on which seems to be the alternative. >> madam secretary, i think i heard you say that the affordable care act according to the medicare trustees adds another 12 years. >> it was according to the congressional budget office. >> according to the cbo, an extra 12 years. well, you know, i think this is possibly based on in part -- in part, madam secretary, with your belief that $500 billion cuts under the affordable care act can be spent twice. and other accounting gimmicks. what do you say this to? >> it was not our number, but the congressional budget office number. and included in the republican proposal that was put forward last year. there seems to be a bipartisan agreement that we should slow

the growth rate of medicare by $500 billion over the next ten years. both republicans and democrats. >> thank you, madam secretary. let me shift to the issue of the individual mandate in december -- december 14, 2010, editorial in "the washington post" you wrote with attorney general holder, and here is what you stated. it is essential that everyone have coverage. imagine what would happen if everyone waited to buy car insurance until after they got in an accident. premiums would skyrocket. in your opinion, if the individual mandate is found to be unconstitutional by the supreme court, would premiums skyrocket or would the cost curve remain unchanged? >> i can't speculate about that, but i'm confident that given the review by the majority of justices who have looked at the bill that the affordable care act will be found constitutional. >> that wasn't my really my question. so in your opinion, is the

individual mandate the linchpin. in the bill? >> i think having everyone included in the insurance market is an essential component. >> so it's insuring that everyone have the coverage and it wouldn't work without having that coverage? >> i didn't say that. i think it's an essential -- >> close enough. let me ask you this question about medicaid. >> could i answer your question or not? >> you did. thank you for -- >> i did not. >> i thank you for your answer. i have only 15 seconds left. but let me address medicaid. this is going back to what representative myrick addressed, but taking a step further. can you assess the impact of the provision requiring states to raise medicare primary care physician rates up to the medicare level in 2013 and '14 with federal funding for states

and doctors especially in 2015 when the requirement and the funding goes away resulting in an inevitable cut to their reimbursement? have you thought about that? >> we would hope that congress would work with us to make sure that that cut does not occur in future budgets. >> mr. chairman, can i just -- mr. chairman -- >> madam secretary, thank you. i yield back. >> i just want to ask, i think that he was asking questions and then not giving the secretary the time to answer them. i know he only has five minutes but i think if she feels that she needs an opportunity to answer the questions. >> you know, i think i need to respond to him, mr. chairman. you make a statement in regard to my approach and mr. pallone, i think you spent 4 1/2 minutes of your five minute allotted time giving a speech. if i ask questions and i want a yes or no answer, i expect a yes or no answer. it's my time.

not hers. she gave her opening five minutes. >> i understand, but if you don't give her an opportunity to answer the question, then you go back and suggest what she said and she disagrees that she said that, i mean, it's really not an opportunity for her to respond. in my opinion. >> chair thanks the gentleman. and recognizes mr. cassidy. >> hello, madam secretary, how are you? >> is that a yes or no question? >> believe me, that's a greeting, not a true inquiry. i can imagine how you are. you said something earlier to ms. myrick that i was intrigued by. you suggested that under the aca that medicaid costs for states will decrease. now, i know i heard that. the reason i find that curious is "the new york times" just had an article speaking about how

medicaid costs have gone from 21% to 23% or 24%. expected to rise further. there is a blog ed watch -- education watch which is, you know, not even part of this fight except they're saying they anticipate continued crowd out of funding for education by the money required for medicaid expenditures. and my own state, even though you speak of the newly eligible having 90% coverage or 100% falling off to 90, louisiana requires the state funds to be required over the aca and we may quibble whether it's $7 billion or $5 billion but it's a significant expense. now i say that in context and if i interrupt i'm not trying to be rude, but we have only limited time. when you mention the aca will save the states money, that seems to be contrary to objective analyses from those

not connected with government. >> well, mr. cassidy, i would love to get you a more detailed answer but i can tell you that part of what is going on is overall medicaid expenditure and state portion of medicaid expenditure. two different numbers. overall medicaid expenditure will go up with a number of newly insured medicaid beneficiaries. what i was referring to the state share of the new -- newly insured -- >> if i may, absolute dollars will increase even if the state's percentage of the spending decreases? >> that's correct.