moment to thank the employees of hhs. thank you. with that, i'm happy to take your questions. >> thank you, ms. burwell. as you know the supreme court will soon decide the legality of regulations from health department insurance subsidies to individuals in states with federal exchanges in the king-burwell case. it is in my opinion that the regulations vie late the constitution.

but we'll find out what the court says soon enough. at yesterday's ways and means hearing, secretary lu refused to say if there's a contingency plan. secretary burwell does the administration have a contingency plan. >> senator right now, the justice department will represent for us in the supreme court is the correct position. we believe that both in terms of the spirit of the law and the intent of congress, as well as the letter of the law. and the justice will make that argument in terms of what we believe and what we see it as happening is the idea that tax credits would be provided by the congress for individuals in say, the sfat of new york but

noot the state of new jersey. >> it would force the states not to have to pay the state exchanges rather than have the federal government do it for them. so it's a big issue. language is unambiguous. do you have a contingency plan? >> right now, february 15th is the end of open enrollment. in terms of providing quality affordable access to health

care, my deep focus is ensuring, as we've seen, and later today we will announce that there are 7.5 million people who have come in through the federal markt place in addition to the 2.4 million. >> and then the answer is no. you toent have a contingency plan. >> right now what i'm focused on is the open enrollment. >> so that means you don't have a contingency plan. i would suggest the administration to get one. just in case. it's something that seems to me you're going to have to have.

>> has your department collaborated with insurers that the subsidies could become illegal? have you made plans there one of our deep focuses has been the consumer. my concern is this issue you height. again, you're planning for anything if the court decides the other way? >> senator, right now, we are focused deeply on those issues that i've arctic lated.

i have to say that the insurers vice president been given any guidance. secretary, the aca appropriated more than $1 bill i don't know. in your may 14th 2014 hearing, i asked you if these states would be required to reimburse the taxpayersment has hhs

rekoerred any of these funds? and do i have your commitment that you will collect from the states the money that was in the opinion of everybody's, misspent. a number of states are taking action. the question of what the federal government can get back is about whether or not in the grant-making that things were done that were not in line with the terms of the grant. right now, our flpt xx general with hhs is looking into these issues to see if there are places where that happened.

>> thank you, mr. secretary. there are lots of issues with respect to the premiums and options. do you have a sense of how many people might be owed a refund and how many people might owe something? >> we do have a sense that over three quarters of the people will just which she can a box. with regard to the other category we don't have a sense

because this is the first time through. >> what are you all doing to make sure that this is consumer friendly for people who are going to have to rustle with these issues? 91% of filers use some software. we've been working with the tax filing organizations, whether that's at the end of the hnr blocks down to the centers that i think many of you all know are those centers that help provide lower income people. so we're in closed communication. secretary lye and i have done calls with the tax preparers.

and we are in consistent communication. we want to make sure that the questions they're getting, we understand so that we can provide help in answering those if we can. >> >>. >> you all run a number of programs that hope to, for the future, address the terms for the chronically ill. when can we expect to see some of those results? i know that you have programs that you would like to see look at a viert of different conditions. and the challenge of course is you've got this horribly, fragmented delivery system.

>> it actually cuts across various parts of the entire department. there's the work that we're doing in wrorking with innovation in that space. we're working through the state innovation model space. we are granting a number of different states and in the medicare space, we're seeing the work that we do in the renovation center to try. i would also mention there's the work that the cdc is doing. some of this work is about prevention. in some of these conditions, it

is about prevention. and cdc plays an important, strong role. >> let me ask you about the initiative and, again, what we are looking at for the future. this is pretty important. this is about adds posht as it gets. if we're going to tap the potential for precision medicine medicare and medicaid and private insurers are going to need to pay for it. i know you're just getting started in this area, but what progress are we making in terms of setting up payment systems.

to make sure you can actually get paid for tests, innovation and these kind of services that really help the question of payments. >> it gets to the announcement that i made last week which, for the first time, that we set a goal for ourselves to change that we are paying in medicare. we've set the goal that we would have alternative payments instead of volume. and by 2018, 50% of thoeds payments. i think that's where we're going to try to brimpk in some of that innovation. the other thing that i think is important is we consider cost in this space in that this type and approach can come for the individual. it may not be as costly as you were stalking about if your earlier question. >> thank you, senator. thank you, secretary, for

appearing. more importantly, i appreciate the free kwent phone calls you give me updates. opportunity was one of 23 ko ops formed under that law. federal government loaned money to them, through cms. as i understand, it played a cig significant rule. it was even more successful than they had anticipated. in the summer it became obvious that the insurance commissioner

that would need additional loans from cms to stay in business. both the iowa insurance commissioner and co-opportunity frequently inquired with cms about their capital position and the need for sebty ahead of open enrollment is it's clear that liquidity crisis was developing. cms co-opportunity was going to be in trouble if it didn't get loans. i'm concerned of cms's role.

there were about $2 billion loaned that depends on the success of the co-ops for the federal government to get its money back. they paid their premiums and expected it to be there. un fortunately, mr. bush is recovering. the bushes have already hit their out-of-pocket maximums for co-opportunity.

they will have to find new coverage and that new company will not recognize that money they've already spent in 2015. the bushes can't afford to pay out-of-pocket premiums for two different plans. i intend to ask you further but what i want to ask you today is what responsibility you think your department, cms, have to the people like bushes. and i think they had about a hundred thousand people that they were doing business with.

the consumer is the number one priority in thinking what authorities we have and what we can do to support all of the families like the family that you have just described. we are focused on the consumer. we are concerned. right now, our focus is deeply on the consumer. so we look forward to working with the state of iowa that has the main authority over this to

figure out ways that we can help those consumers. thank you very much. . thank you very much for the hard work of you and your staff. a complicated important set of issues. i think we first need to underscore the good news. we want to make sure that it's working one job, be able to care for your family they gain access to affordable health care. we know that fewer americans are going into bankruptcy because of medical crises, that's important. tax credits helping people afford coverage, people who have insurance are able to get new opportunities to get preventative care and vaccinations, wellness visits. and, frankly, folks who have been paying into health care for a long tim, they're not getting

what they're paying for. i would say being involved in one of the chief supporters of the affordability tax credit. at the time, the chairman produced me as the chairman of affordability. i would just say for the record, they are working. and, if, in fact, they went away or the entire bill, the law was repealed like we've now seen a

bill produced here in the senate. this would be serious for families, in terms of no longer having access to health care. what i'd like to ask you about is one piece of that to being optional state-by-state which has undermined seniors and families to be able to get affordable health care. and that's medicaid. when we put this together, we assumed that they would be able to get the medicaid that they need, as well as families. in michigan more than 500,0 0

people have enrolled in the healthy michigan plan. i con gratgratulate our governor and others who worked on that. we still have time to go on that. we have 11 states represented in the finance committee that still have got provided access to the expansion of medicaid. i wonder if you might speak to what is happening to families in the cost and even to states and our hospitals. i know in michigan folks were talking about the number of people coming into the emergencienemergency emergency room rather than getting it through a doctor in a way that is better for them and contains cause.

>> i think the impacts have to do both with the vijs as well as economic impacts. in terms of the individual impact terms, yesterday, when we had folks at the white house that had written the president there was a woman who actually went on to the marketplace because she thought she would pay a fee. found out she was in the marketplace but nevada went in. she wound up having a mammogram because it is part of what is cover, found out that she has breast cancer. that's for the individual. the terms to pay for and have health care. economically, what we see is in the states that have expanded

medicaid, it's in a number of states across the country. that has to do with the reduction of indigent share costsment we see an neck doal concerns where more of the care is being paid for. so it's the individual, and then, with regard to the states themselves, they're seeing those benefits. >> it's a rural health issue. generally, in some areas, there is one hospital. not always, but there is the hopt that tends to take care of that indigent care. and we know those are the drekt impacts. the indirect impacts are for everyone else in terms of premiums. when there's less indigent care, there's less pressure on premiums for those who are in an employer-based system. >>. >> thank you.

thank you, mr. chairman. thanks for holding the hearing. i want to thank you, madame secretary, for the great job you do. you're a star. you're a star. health care spending groit has decreased significantly. that's huge in terms of not just health care itself, but our budget. $600 billion less through 2020. uninsured level, lowest in decades. uninsured people in my state of new york, we have really done a good job. i shuts our state. new york state has signed up 2 million people. 80% of those enrolled said they were previously uninsured. so it's great. now, i appreciate the emphasis

you've put on c.h.i.p. i'm mindful of c.h.i.p. all the time. i have two questions for you, gme. i can't even understand your logic here. the president's budget exceeded costs. they want to correct this imbalance by reducing by 10 pnt. that's an enormous cut. $16.3 billion. now, your budget proposal recognizes we have a physician shortage. and we do. if we're going to ensure more people, that's one of the places where aca didn't really do the job it sort adds insult to injury.

they're jus not going to teach as many medical students and make them become doctors if you're going to cut this. not only training doctors, but the best doctors. we don't need a majority of our doctors to have been trained oversees. but that would be a direction in which you're headed. so it seems to me counter productive to atempbt to train more physicians by cutting teaching hospitals that train them. >> with regard to the issue of making sure that we have enough care in the country in the specific dme area, what we're trying to do is make sure that we balance the needs and our proposal also targets funding and additional funding for those that go into primary care and specialties where we have shortages.

additional funds would help do targeted efforts. in terms of some of the things we do do the national health service core is a place where there are large inrestments in the budget. and we've also proposed the extension of the medicaid primary care funding. >> i think you're robbing peter to pay paul. we increase the number of slots and allocated half of that increase to primary care.

it seems to me a much better and tested way to go. having said that i just want you to know i'm vehemently proposed to that proposal. i hope the add plin strags would reconsider. on ebola, i want to thank you. the cdc has done a great job. the number of cases has declined. that didn't just happen by magic. it happened by great work at the federal, state and local levels. in new york our hospitals did an amazing job. 47% of the people who flew in to this country landed at kennedy

airport. so i thank you for that and for the good job you do. but can you just tell us i know we put some money in and i worked very hard to have a provision with the help of many of my colleagues that our hpt e hospitals hospitals in and around the country get reduced. they had to buy equipmented. they had to do training. can you provide us with how you plan to ensure that ebola treatment centers i care is specially about the ones in new york, receive appropriate reimburse. . funds reimbursed, because those will be directly with -- we're working with a contractor that will help us do that reimbursement on hospital-by-hospital basis. in addition, states and communities will receive other parts of funding that are part of the preventive work that they did. . so there are special funds for the treatment hospitals like bellview, which did a tremendous

job in new york, and the others that did treat patients around the country. we look forward to continuing to work, and we're very appreciative of the funds and want to move them as quickly as possible as we can to the treatment hospitals and help those hospitals that got ready and prepared. >> thank you. thank you, mr. chairman. >> thank you. senator roberts? >> well, thank you mr. chairman. and madam secretary. let me echo the sentiments of many members to thank you for the job that you're doing. during your confirmation hearing, we talked a lot about the affordable health care acts. independent payment advisory board, the acronym is ipab. you said, and i'll paraphrase here, that you were hopeful ipab can never be used. it can only be triggered in the window, and it will never be activated. you're hopeful that ipab never gets triggered, and we all agree.

but here we are again with a budget request, where you're acting to expand this authority to find savings. how can you explain how you went from hoping it never had to be used to now doubling down on ipab and expanding the savings it must find. >> with regard to the -- what we are trying to do is get to the core of what ipab was about. which is making sure that we can work together to continue to keep the costs in medicare, and in the entitlement space. and we're working to do that with our proposals. we've seen just in the period from 2010, our medicare spending is $116 billion below what it was predicted to be. and on a go-forward basis, that's why we have the propoals in our budget to keep moving it out. the proposals in our budget extends the trust by five years. our objective is to actually put specific policies that will continue to move out that time frame. we're hopeful we can work with the congress to get those policies enacted, to continue the entitlement savings.

we have some from the last years in terms of what we're seeing. but we want to continue on a path to tight and contained growth with regard to that spending. >> well, i think everybody wants to contain the growth. but i don't want rationing. and i'm very worried about the independent advisory board, the cms innovation center, the preventive services task force and the patient centered outcomes research institute. all well intended. i've labeled them before regulatory apocalypse because of all the rationing. you're depending a lot on something called recovery audit contractor. i must tell you when the contractors ride into town in western kansas, the doors shut, and they hope that no rac person comes to the door. i appreciate that you have included a number of proposals in the budget to help address

the appeals process. because you go into the hospital. you have a choice, either pay the fine and contractors get gold stars, if you have fines, and then you save that savings with regard to medicare. it is also rationed. so here's the point. cms presented a settlement offer, and over 2,000 hospitals entered the process. chief administrative law judge griswold noted that as of july last year, there were 800,000 pending appeals. my question to you, if all of these hospitals would complete the settlement process, how many claims would potentially be cleared from the backlog? are we even making a dent? >> so, the issue is one that i think many of you on the committee know is one i'm deeply concerned about, and which is

why we've reached out and talked about this issue certainly before today. with regard to how many will come through settlement, they all won't be cleared out that way. the strategic approach we're taking is three-fold, to address what i agree is an extremely important issue. and it's an issue about balancing those who are not -- it's about program integrity because there are people who are not doing things that we -- >> i understand that. >> at the same time, the concerns that you've articulated in terms of how it feels and how the process is used. three strategies we're using, first is to use the tools that you articulated. there is funding needed so we can clear out the backlog. and judge griswold and others can process those. it is a specialized person that we need to do that. and then the third is, there are legislative proposals that we believe will extend our ability to both get rid of the backlog and prevent it in the future. and we've had conversations, especially with this committee, and we appreciate those conversations, because we've included the seven proposals in our budget so we could be

specific to work with you all on how we can do that. because to be honest, it's going to take all three for us to get rid of that backlog. >> i appreciate your response. i'm not sure that i'm following you on all the details in terms of the specifics, and would like to do that, and i know you're extremely busy. but we'll make that inquiry. i just have to tell you, that when you have rac contractors racing around to the rural health care delivery system, they're not very welcome. and it seems to me they don't trust the hospital administrator, or the doctors, or the whole delivery system. and in return, these folks don't have any trust in government. and that's not a good thing. so let's work together and see if we can't get a better situation. >> i would like to do that, and follow up with you on this issue. >> thank you, senator. senator cornyn? >> good morning, madam secretary. on december the 17th, a number

of senators sent a letter to you and to secretary lew about the king versus burwell case. i would like to follow up on senator hatch's questions, because you didn't answer a single one of them about contingency plans, and notices to people who might lose their taxpayer subsidies for their health care. and let me just start by asking, has hhs taken steps to inform all current federal exchange enrollees about the king suit, and how a ruling against the administration might affect them? >> we have not, senator. we believe that we are implementing the law as it is intended to be implemented. and as we do that, that is what we're talking about with the consumers entering into it. >> if the administration loses, have you taken steps to advise

federal enrollees about the consequences that may apply to them as a result of the administration losing that lawsuit? >> right now, as i mentioned with the chairman, what we're focused on is what we believe is our responsibility to implement the law as fully as we can, to focus on the consumer experience, to do that, and we're working for that february 15th deadline. >> that's not an answer to my question, madam secretary. you're a highly intelligent, charming person, but you refuse to answer our questions. and that to me doesn't strike me as trying to work with congress, but rather contemptuous of congress' oversight responsibilities. so let me just ask you, if the administration loses the king versus burwell case, do you plan to ask congress for additional legislation? >> with regard to that question, we are not at a stage where even oral arguments have not been made, senator, in terms of the case. >> that's not my question. my question is if you lose, are you going to come to congress and ask for additional legislation? >> with regard to the issue of

legislation, and the affordable care act in its entirety, what we have always said, and what we continue to say is, with regard to things that will improve the act, we're open. whether that's the recent vote for veterans, and i know that members of this committee actually have bills that have to do with our firefighters. and that would make into law what we have done through administrative actions. we will work with congress. does it increase access -- >> madam secretary, you're not answering my question. my question is, if the administration loses the king versus burwell case, do you intend to come to congress and ask for additional legislation to address that decision by the supreme court? >> senator, we believe the position we hold is the correct position. >> my question is, if you lose, if the supreme court disagrees with you, will you come to congress and ask for additional legislation? >> senator, what we know right now is it would be devastating the effect in terms of loss of

premium, loss of individuals. what we're focused on right now, though, is implementing the law that we have before us. that's our focus for now. >> so you're going to ignore the supreme court decision in july? so let me ask you this, since you won't answer my question about a legislative solution, do you believe that your agency has authority to make an administrative fix to the law? >> senator, as i have said, what i have focused on is right now the current implementation of the law. that is a question in terms of -- >> what i'm focusing on is, if the administration loses, and so far you've refused to answer my question, and notwithstanding your earlier statements that you want to cooperate with congress and this committee, and you respect our constitutional oversight responsibilities, what i don't understand is why you continue to refuse to answer the question? so let me ask it again. if the administration loses in the king versus burwell case, do you believe you already have the

authority to make an administrative fix, or will you come to congress and ask for additional legislation? >> senator, i am focused right now on implementation. with regard to those questions, we believe that we are going, as implementing the law, and that the law will stand. >> i'm asking if you're wrong. if the supreme court disagrees with you, and that's -- if five members of the supreme court disagree with you, do you believe you have authority to issue an administrative fix, or do you think you need additional legislation? >> with regard to the answer to that, senator, what i'm saying is what i have been focusing on is implementation, not on that question. >> mr. chairman, secretary burwell's a charming person, and she's obviously intelligent. but these hearings are absolutely no use to us if the witnesses refuse to answer straightforward questions, which this witness has repeatedly done. i'm not sure exactly what the proper solution is, mr. chairman, but i would like to

visit with you about that. because it seems to me that this administration continues to parade witnesses in front of committees like this one, and to deny us a straightforward answer to straightforward questions. and that's just unacceptable. >> well, senator wyden would like to comment on this whole matter. >> mr. chairman, i just want to make clear what i think today is all about. today is about the hhs budget. this multibillion dollar budget that involves millions of americans. that is the topic at hand. and i'm very interested in working with my colleagues on the other side of the aisle on health policy. i've shown that plenty of times, and so have my fellow democrats. but i think the idea this morning that we are going to ask a witness to speculate about a court case, to speculate about

something hypothetical, and in effect have a big debate about something, i think misses the point of the challenge at hand. the challenge at hand is about the budget. and i hope that we can figure out a way over the course of the morning, we have plenty of colleagues who still want to ask questions, to talk about the topic that was scheduled. and that's the budget. and not talk about hypotheticals, about something else. by the way, this is not the department of justice's budget. this is the department of health and human services. and i hope we can stay on the budget and not get into some recitation about a parade of hypotheticals and speculation. >> mr. chairman, if i can just respond to the ranking member. it's the same question you've asked, mr. chairman. and we're not limited as senators to what the topic of the budget is. we can ask questions -- any questions we want about the agency that this witness is responsible for administering.

and to come here and repeatedly refuse to answer the questions is -- strikes me as nothing less than contempt of our oversight responsibility. and it's a very, very serious matter. and i'm just really, frankly, shocked that this witness would take that position. and i just find it unacceptable. >> mr. chairman, just to continue this briefly. to say that this witness is handling this committee with contempt misses what members on both sides of the aisle have been talking about for weeks. this official at hhs has reached out to this committee, the people of this country, in an unprecedented way. and i think arguing that because she won't talk about hypotheticals, speculate about a court case, means that she is handling this congress in contempt, i just think is way off-base. >> well, both senators are entitled to their opinion. let me just ask this question.

have you made any recommendations for the premier department that handles all these matters that are so important to the administration as to how they will handle it if, as senator cornyn has raised, the case goes against the administration, or against the affordable care act is the issue? >> senator, with regard to where i am now on the issues that i'm focusing on, whether it's ebola, or -- >> no, wait, wait, wait. >> i'm focused right now -- >> we got that point. wait a minute. these are not stupid people up here. and you're not stupid either. why don't you just say, that's up to the president and the justice department. and that would get you off the hook it seems to me. it doesn't solve the problem. because you should be recommending what should be done. because that's a serious problem. >> with regard to, as you are clearly articulating, the justice department is the next step. >> why don't you say that. >> what the administration is doing. the justice department will represent us. >> i get tired of bailing out

you democrats all the time. that's supposed to be humorous, i thought i was being quite funny. but i had a sudden sense of humor that sometimes doesn't come across. >> mr. chairman, to wrap this up, i don't think the secretary needs any bailing out. we have something called a judiciary committee, where they can have discussion about speculative matters involving the supreme court. i just hope we can handle the budget today. >> let me just say, i think senator cornyn is certainly within his rights. i think his comments are accurate comments. miss burwell, if she continues to answer that she's not focused on this i understand that. then tell us who is focused on it. because it's an important thing that could just throw you into all kinds of turmoil. and we're concerned about it. and it's a legitimate concern of this committee. to make a long story short, i think senator cornyn raised a very, very important issue, as have i. we'll now go to -- who's next

here? let's go to senator coates. >> well, after that, yeah. first of all, i want to second what our members have said, madam secretary, that your engagement in accessibility has set a new standard. and i think we all appreciate that. i don't know when you sleep, but i know how active you have been, and will continue to be. secondly, though, i want to second what the chairman and senator cornyn and others have said, not to ask you the question again, because i think i know what you're going to say, but to say that we all know that this health care proposal enacted in 2010 has been one of the most impactful pieces of legislation ever enacted by this congress. by any congress. and it affects tens of millions of americans directly, in terms

of their health care. which is -- goes, you know, right to the essence of who we are as human beings. and clearly there is a collision potentially coming with the supreme court decision. it's probably not likely given the president's very clear admonitions about how he won't accept any piece of legislation that modifies this in any significant way through repeal, and the replacement. but there's a potential collision coming, and it would be irresponsible for the administration not to have a plan to address that should the decision not come down the way you would like. i don't have a question here. it was just a statement, affirming that it would cause great chaos. and be totally, i think, irresponsible. somebody ought to be looking at,

what do we do "if," and that's what the question here is. i want to thank you personally for your engagement with our current governor. governor pence, who i was with this morning, wanted me to pass on his thanks also to you. almost two years of engagement over a request for a waiver for the state of indiana. our former governor, governor daniels, put into place something called the healthy indiana plan. it was innovative, it was creative, it has been proven to provide health care for a number of hoosiers. and governor pence wanted to expand that. and there are 350,000 hoosiers that will benefit, at minimum, benefit from your agreement to work with us, and come to a conclusion. there's some really innovative reforms here on traditional medicare. and i think some of them are the first ever. and so i think it's important for our state to be responsible

in playing this out the best we can, to prove that these innovative solutions can be a benefit to all medicare -- excuse me, medicaid recipients. and in that regard, i would just like to have your assessment of some of the first of a kind proposals that you have agreed to, that hopefully will prove their worth, and can be duplicated perhaps in other states, or throughout the system. the co-pays, the patient participation, the patient option to choose a plan that better meets their family needs, the contribution to the so-called power plan, the modification of health savings accounts, and the state's referral process to every individual who applies for job training and job searching, through state sources. it's all combined in this new plan. and we're pretty excited about it. but i'd like to get your

thoughts on it here. i think for the benefit of the members of the committee, and for others who are looking at ways to provide better access, better health care at lower cost. >> i'm pleased that we're able to come to agreement and worked with the governor, and was happy to do that. one of the first things i did when i became secretary is met with the national governors association, and expressed my willingness to work on a state-by-state basis. to use the waiver process to do two things. one is to do agreements that would be on a state-by-state basis, what a state needs in terms of continuation and moving on building the healthy indiana. other states, utah, tennessee, there are other approaches that are important to those states. the second thing is that i think what you're reflecting is, waivers are a means by which we can try, and we can test things to find out if they are things that work, and then move to how we would scale them as a nation if they do work. we're looking forward to working with the governor as he moves to

implement and try to make sure he can implement quickly, as soon as we reached agreement. and we look forward to finding out, what are the kinds of things that we can do better in medicaid as a program. and that effort in the waivers is accompanied and complemented by something that the national governors association asked us to do, which are state innovation model grants. and so at the time that we're trying things, we're also doing innovation in terms of payment models. and helping the states through financing the states to do that. and a number of states have received those. there's a first round and a second round. >> i know our governor and our states and those who participated in this, including the health care providers and their participation, and contributions to the program, we have a lot at stake here. we hope to be able to deliver to you innovative, successful solutions. thank you. >> thank you, senator. senator carden? >> thank you, mr. chairman. thank you, secretary, for your leadership and service to our country in this very important

role under challenging circumstances. i want to talk first about an issue that i'm working with, with senator blunt, regarding community mental health services. there is a challenge for people who are suffering from severe depression, or anxiety disorder, getting the type of help they need in a community setting. they go to their primary care physician, as many of them do, there's lack of capacity in that office to deal with their needs. if they go to an emergency room, that's a very inefficient way, and most likely inadequate to take care of their needs. there have been some demonstration programs dealing with collaborative care model, where the primary care person can get help from a mental health specialist. so that you use better community services to keep people healthy in their community, less costly, better services. there are obstacles under way under medicare and medicaid for this collaborative care model. and i just would welcome your thoughts how we can work

together to try to expand these opportunities, removing those obstacles, and offering incentives for collaborative care model that will provide better services at less costs for people with mental illness. >> the issue of behavioral health and payment for behavioral health is one of the tools that we think we have, and that payment occurs that is equitable for other type of care. it's something we're certainly working on, and would welcome an opportunity to have a conversation with you, having had conversations with senator stabino and senator blunt. as you know and mentioned, we're also focused on how we can do more community-based care. and that actually touches also upon the delivery system reform which we had a little bit of a conversation about earlier, so that we are creating home health systems. and that there is communication between physicians. because that is sometimes one of the missing links in behavioral

health. >> we would be interested as to what you could do under your authority. but if you need congressional help particularly, let us know what obstacles need to be addressed by congress, and how we can expedite the implementation of better collaborative care models in our community. i'd appreciate that. as you know, i have a particular interest in ih funding. i was pleased to see that the president's budget did increase that funding by by $1 billion. i would like to see a larger number. the returns are incredible from what we invest, and i think this is a bipartisan interest. one of the centers, the institute for minority health and health disparities, is one that i take pride in that congress created under the affordable care act. they receive a slight increase from $269 million to $281 million. can you just share with us your commitment to the nih funding,

but specifically, how you see the office for health disparities functioning under your leadership? >> the issue of minority health disparities and it cuts across the entire department. the nih has an important part of that approach. with regard to minority health disparities, they are great in our country. there are a number of ways we believe we should do that. working through nih with regard to how we think about research, and the research on the science that is creating these disparities is how i think about that particular piece, as well as nih's role to make sure we have minorities that are part of the system, both in terms of physicians that are practicing in a clinical setting, but actually their part is more about researchers. and researchers who are part of the process that come from these communities. at the same time we're focused deeply on probably the most important thing we can do to reduce these disparities, is the disparity coverage. that is something i think you

know that we focus on as well. >> absolutely. if you could keep me informed on the progress, not only at the national institute, but also at the different offices for minority health, i would appreciate that. lastly, let me just put on your radar screen, pediatric dental coverage. we've been watching its implementation. frankly, it's been more seamless than what we originally were concerned about. there's more universal policies that are being offered for pediatric than stand-alone. as you know, in maryland, with the loss of the monty driver in 2007, i would urge you to monitor how the private market is working on offering coverage for pediatric dental since it's a required coverage. we want to make sure that in fact it is being taken advantage of by those that have gotten coverage through the exchanges. >> thank you. and we will. i've had the opportunity actually, as i'm out traveling the country, to meet with a

woman who took her child to the dentist for the first time. as part of coverage. >> thank you. thank you, mr. chairman. >> thank you senator. >> thank you, mr. chairman. and secretary burwell, thank you so much. i read a bloomberg article that i'd like to enter into the record. but the headline was, you asked to overhaul medicare payments to hospitals and doctors. that was music to my ears. and then the first paragraph or so said the obama administration makes historic changes to how the u.s. pays its health care bills, aiming to curtail the costly habit of paying hospitals and doctors without regard to quality or effectiveness. and then it goes on to say, quote, we'll tie billions of dollars in payments to how their patients fare, end quote. actually, all that was a quote from that news article i want to enter. first of all, that's music to our ears in the pacific northwest, and any state that is

already making its way down the system of more efficient care that's focused on the patient. the fact that the administration is setting this goal of 30% of traditional medicare payments to alternative payment models by 2016 is just a terrific goal. and 50% by 2018. as you know, we worked very closely on the medicare modifier as a way to make sure that we are focusing on quality, not on quantity. so my question is, in the details of that 30%, one of the things that we've had discussions here is what does the incentive look like. and i want to make sure that we aren't setting a big goal of having 30% shipped over to that, but having the incentives be so small, that we're not really changing behavior. so what kind of -- you know,

people have talked about things, like 4%, or bonus or penalty caps. we want to see good behavior being rewarded and bad behavior being discouraged. so what can you tell me about within the 30%, how aggressive can we be? >> so, i think there are a number of different things that can help us get there. some of those are about incentives. and some are about approaches, bundled payments as a type of approach in terms of how we go about doing it. and there are things like the value-based approach where you are rewarding good behavior, and for those who don't have that behavior, that they will take a hit for doing that. i think that those -- there are tools like that that are being used. we are seeing that the private sector and the providers are moving towards this care, because it is better quality care, and more affordable for them. putting in place incentives. we've received help and support and there's been legislation, about helping us as we're doing accountable care organizations. there are places we may need

additional flexibilities as we learn about what people are reacting to in regard to incentives. the other thing i would say is the pressures in the private sector right now, they're also helping us, because private sector payers are moving in this direction. and whether it's boeing, that is partially in seattle, and how they are negotiating their payments, those examples are making a difference, too. >> you think the incentives could be more than just a few percent? >> i think the question of exactly what numbers depends on which incentives you're using and how. the details matter for a number of the institutions. and so i think it's -- >> what i'm saying is, if by 2016 you can say that 30% of traditional medicare payments are at an alternative model, but they're only shifting 1% or 2%, that's not interesting to us. because we're already there. we're efficient. and we're penalized all the time for our level of efficiency.

we want the country to move as fast as possible to that new model. it's saving money. it's better care for the patients. we don't want to lose doctors in the northwest just because they get paid less, because they're more efficient. so we hope that behind the 30 number is incentives that really move people in a -- you know, some of the previous discussions we've had here, you know, basically you're going to move at glacial pace, even though you can say you had 30% in the new system, they would be moving so slowly, you're really just continuing to reward bad behavior. >> there was a secondary goal that i don't think is covered in the article and that we haven't had the opportunity to discuss, and that is that, any payer -- so i think we think there are two classes of folks. folks that are moving at the nonglacial pace, and those will be those moving to full alternative payment models. then we also set a second goal, and that is about the percentage of any payment that anyone is doing would move to 85% and 90%

over time to have any element. so we actually have set up goals that are trying to encourage the speed in a larger group. but accounting for the fact that there are those, and this will probably be a conversation in rural areas, and other places where people are slower to move. >> we look forward to discussing that with you. thank you, mr. chairman. >> senator brown, you're up. >> thank you, mr. chairman. thank you, madam secretary, for your focus on implementing the affordable care act and what it's meant to the literally hundreds and hundreds of thousands of people, in my state, and your state of west virginia. i want to talk about the children's health insurance program. i've spoken with chairman hatch about this, and ranking member wyden. chairman hatch was one of the small numbers of authors of this bill in 1997. we know what it's meant. uninsured rate among children in 1997 was 14%, today it's 7%. we know other things about c.h.i.p.

we've modernized it. it works in its present form very well today. my state, it's 130,000 children, most of them have -- are sons and daughters of working parents. but they fall in a place that they just weren't getting health care, because those parents either don't have insurance -- don't have insurance and don't have the income to make those decisions to send their children to a family doctor for preventive care and other things. i have here, mr. chairman, if i could enter them in the record, i'm asking unanimous consent to do that. >> without objection. >> thank you. these are letters from 40 governors, including my republican governor, john kasich, 40 governors express how critical the current c.h.i.p. program is to their states, the need to extend funding now, rather than later. senator casey and senator stavinau are particularly

helpful in this effort. the legislations finished their sessions in the first few months of their year. more than half will have adjourned by june 1st of this year. congress needs to act swiftly to avoid any disruption in children's coverage. as you know, this law is authorized up through 2019. the funding runs out in september. that's the push, and the urgency for state legislators. just comment on, if you would, the impact on states if we don't fund -- if we don't extend the funding of the new c.h.i.p., the current c.h.i.p. the way we do it now, if we don't extend that funding soon. >> i would just reflect on in my former role as the head of omb, as one was trying to manage a situation where you didn't have predictability of funding, and whether that was in the form of a shutdown or other forms, and in terms of trying to manage against that, it is very difficult to manage. and especially in the space of

health care, where there are contracts and providers that must be paid. the urgency i think which is what you're articulating from a management perspective, for the states, is extremely important. the states, and i think that's why you're reflecting the letters you have in your hand, in terms of the conversations with the states, the states need to have this predictability. it is an important source that they depend on in providing health care for their populations, especially for their vulnerable children. >> thank you. there are a few things that this committee works on that have -- a few important major things that have had the history of bipartisanship that c.h.i.p. has. the 40 of the 50 governors, a number of people here have voted on this legislation. some have been around as long as i have, and voted on it in 1997, a number of them voted for and they passed this spotty house overwhelmingly. the medicaid primary care parity provision in this year's budget. a study published in the new england journal of medicine, it's led to the increase of

appointments for medicaid patients. unfortunately, the provision that authorized disparity and payment between medicare and medicaid expired a month and a half or so ago, at the end of 2014. senator murray and i had the women and children act. we were not able to enact that. can you comment on the importance of this provision and the president's fy '16 budget proposal? >> we have included it in the president's budget because we think it is important. it comes to one of the issues that we discussed a little bit earlier, which is, this question of provision of primary care. as we expand the number of people who are covered, making sure that we translate access to actually care, and better health and wellness is what we are aiming to do. we believe this is a provision based on the analytics that we have seen that can help us move

forward on making sure there is enough care, and appropriate care. >> is there a way to use the success of this provision to help guide future conversations around conversations and policy decisions around medicaid payment reform in the future? >> i think all of these pieces and parts, whether it's the results that we see here, in terms of having people become a part of this system of providing that care, and knowing that many people on medicaid have reported they have quality care that is accessible that makes a difference to them, that kind of steps in terms of this provision, as well as the kinds of things that mr. coates was mentioning in terms of some of the reforms we're doing. i think it's an important program. it's a cost-effective program. we need to continue to look for the ways to make it more effective, both in terms of the quality, and the cost. >> thank you, madam secretary. thank you, mr. chairman, very much. >> thank you, senator. senator heller? >> mr. chairman, thank you. and i appreciate the opportunity to have this discussion.

i want to thank also the secretary for being here. but i do want to raise a point of order, listening to the discussion that you had with the ranking member, and also with senator cornyn. and i guess i'm a little confused, again, as a newer member of this panel, am i limited in the scope of questioning that i can ask witnesses? >> no, there's no limitation. there may be some questions raised from time to time, but no limitations. >> it was my understanding that if it's a speculative question, based on the ranking member's comments, speculative questions are for the judiciary committee, or for some other committee other than this? >> i think these questions were proper. >> mr. chairman, just on this point. i think it is somewhat ironic that senators filed a brief challenging the law on what i considered to be completely unfounded grounds, and then demand that the secretary explain how she plans to avert the disaster that will occur if their brief is successful if

they win. now, we can sit here and debate, because i'm like a lawyer in name only. i was director of the great panthers. i don't pretend to be a good lawyer. but i do think that we've got a huge challenge in terms of getting on top of this budget. the senator from nevada is a thoughtful person. i'm really looking forward to working with him in a bipartisan way on these issues. i just hope this morning, what acquaint idea that we'll focus on the topic at hand, which is the budget. we can keep speculating and have this parade of hypotheticals, as the chairman noted we don't bar people from asking questions. but i do think there's a little irony as i noted there. >> let me just ask, these questions are legitimate because they affect this department more than any other department. and i was asking whether there's

any contingent plans. >> mr. chairman, i agree. >> i understand, you know, that you may not have any control over this at all. in this administration. senator heller, i'll allow a minute and a half to your -- >> thank you. i agree with you. i agree with your questioning. i also agree with senator cornyn's questioning. the reason i bring it up is we're going to have treasury lew in front of us tomorrow. if economic models and interest rates are not all speculative, i just want to make sure that i'm not limited to the kind of questions that i can ask the treasury secretary. but i'll go forward. madam secretary, i want to talk a little bit about the medicare back stop. you received a letter last week from senator rubio, if you recall that particular letter that came to your office. i also sent a letter to your predecessor, the same issues. as you're probably aware of the budget proposal, it would reduce the bad debt payment from 65% to 25%. now, in nevada, we have 38

community hospitals. they handle almost 250,000 annual admissions. more than 2.7 million outpatients just last year. i'm particularly concerned for america's, and in particular nevada's rural hospitals, many of whom already operate on a very thin margin. in order to provide care to these patients. so i guess given the issue, i'm troubled by the administration's continued effort to significantly cut bad debt payments. i'm also concerned this will have a very real impact on nevada's hospitals and our senior population. if you would, please, could you share your justification for this particular policy? >> senator, i care deeply about rural america, and these issues. as you can imagine, every time i have meetings, these are one of the questions i ask. overall, in the budget, in terms

of how we support rural america in the areas of health care, there are a number of investments, and whether that's the community health centers which disproportionately help rural america, or our investments in health care providers for rural america, there are a number of things that do that. with regard to this specific question, of this provision, as we work to do something that i think you and others have said as a priority, which is entitlements and long-term changes in terms of structural reforms to entitlements, so we work on that long-term deficit, what we've tried to do is put together a balanced approach that is both -- has effects on beneficiaries and providers. when we make the decisions and choices about what we include, we try to do that on an analytical basis. in the private sector, in terms of how they treat this issue. we're making sure we're appropriately supporting rural communities. a very important thing of health care in those communities and

the economics of that, but this is an issue that is a part of our broader approach to making sure that we are addressing the long-term entitlement issues, which i think we look forward to working with the congress, if there are ideas and approaches and specific policy changes that others believe are better than ours with regard to the package we have, we look forward to hearing those specifics. >> thanks for the answer. i would suggest that there's probably a real problem in some of the rural hospitals outside of the state of nevada, but i just want to go on record, mr. chairman, that i do vehemently oppose these cuts. and i don't think it's an issue that's going to go away anytime soon. i hope we can continue the conversation. >> we would welcome the alternatives and ideas about how we should address these long-term entitlements. >> i have one quick question, and that has to do with the projected savings in your budget. last year you projected over $414 billion over the next ten years. in savings. this year it's been reduced to

$250 billion. can you explain why the proposed savings are so much less this year compared to last year? >> two reasons. one is, as we go year by year, we're getting the savings in terms of the previous year. and also because we had proposals in our budget. one of the proposals on the mandatory side, so the number is a net number instead of a gross number, we decided that we would put in place investments. and those investments are mainly in the area of early learning and child care. for working americans, and people who are up to about 200% of poverty, it's almost $10,000 a year to have your child cared for. and if you have a child that's between 0 and 3 and you're in that income bracket, we believe -- we want to encourage work and we want to encourage family. and so by helping with this child care issue, that's where the bulk of some of those investments are made. >> thank you, senator. senator bennett? >> thank you, mr. chairman, for

holding the hearing. madam secretary, thank you for your responsiveness over the last years. i appreciate very much the focus precision medicine has in this budget, and the president's address to the congress. and my home state, the university of colorado, has launched a large-scale effort last year, across six hospitals, including our children's hospital, around precision medicine. i think we ought to do more to encourage the life-saving therapies, that are important to both patients and broader economy. senators hatch, burr and i worked on the break-through therapies in 2012, since 2012 this pathway has now successfully led to 19 new break-through approvals. and 55 more in the pathway. so i wonder whether you could talk about why this is receiving the emphasis it is in the budget, and what the nih and fda plan to do to collaborate with the universities and the private sector to help spur the

development of these break-through therapies, or precision medicine. >> in terms of the why and the emphasis on it there is a lot of energy and effort already in the private sector. in terms of the why, we believe it can dramatically change how we provide health care to individuals in this country. the second reason is that we believe that this type of innovation, and this type of cutting-edge research should be here at home. it should be in the united states. and that we should make the commitment, and the funding available to make sure we're supporting this research, because we believe that's part of keeping our economy and innovation an economy. in regard to how the nih and fda work with the private sector, i want to express appreciation for the support we've received in terms of the fda numbers we were given. you see the 19, the 55 coming. nih and fda will be working

together and with the private sector. it will get the precision medicine to work right, that the data and information from those entities in colorado will be incorporated in the thinking. so it's going to take close partnerships, the million-person study we're talking about, we will be working closely with institutes. and we're actually getting the input of how we structure it up front. organizations like those that you talked about in colorado, we look forward to hearing from. >> you know what, two important points, to quickly respond to that and i have one other question. it proves, i think, to the people around here who say all is lost all the time, we can't improve anything, it's a disaster, the fda, that's the go-to place for people who want to innovate within the agency and outside of the agency. we ought to be doing more of that, when we think about what we're going to do going forward. and second, as you point out, this is about keeping american jobs here and american innovation here and driving an economy that is actually lifting the middle class. that's why we got into that work to begin with.

it's actually working. so a reminder that sometimes we can actually move beyond rhetoric and accomplish something in a bipartisan way that has meaningful results. last week senator grassley and i along with a number of our colleagues on the finance committee, nelson, portman and brown, introduced the ace kids acts of 2015. this bill would improve how medicaid coordinates care for our nation's sickest children, seeks to reduce the burden on families who often have to travel across state lines for their children's care. as you know, children who have complex medical conditions make up roughly 6% of the children in medicaid. but account for up to 40% of the programs caused, the issue is especially challenging given medicaid is largely a state-run program and these children often need highly dedicated care in multiple states where certain specialists live. given hhs' recent focus on

alternative payment models, moving away from singular service, i wonder if your staff might be able to help work with us to provide the necessary technical assistance to work through this? >> we look forward to addressing that issue that i think you are articulating, that because medication is state-based how do we make sure that that care is both quality and affordable across state lines. >> thank you. thank you, mr. chairman. >> thank you, senator. let's see, who's next here. senator bennett. >> thank you, sir. i appreciate it. very much. good to see you again. i certainly enjoyed talking to you yesterday as well. i do appreciate your responsiveness to the questions from senators. you have certainly established a positive reputation as it relates to getting back with us. it's obvious that you care about having a healthy relationship

with senators, and i hope my comments do nothing to take away from that. i will say that every dollar that we spend that we do not have is taking money from a youngster. a young person who cannot afford a lobbyist, a young person who cannot afford to bear that burden, taking her future earnings without her permission to use today and leaving her with a bill that is utterly broken and a system that is broken as well. when i think about obamacare, i think about the fact that it started off in 2009 at a cost of about $900 billion and then it was changed to $1.8 trillion and then recently it went back down to is.1.35 trillion by year 2025. and it started with uninsured americans and we'll still have 121 million americans uninsured after spending $1.35 trillion or maybe $1.8 trillion or maybe

they will change the estimate again. and at the same time we're squeezing the health care providers to a place where they simply cannot afford to provide care to some of the patients who desperately need the assistance. so having a cart on the front end but having no one to take care of you on the back end does not seem like progress and still having 31 million americans uninsured and i think one of the reasons you've had so maniesy questions about what happens in the king versus burwell case when you look at the law from a financial perspective, changes to the laws, delays to the law, we find ourselves unprepared for a future that obviously is coming, it seems like to me. a couple of questions and i would like to go back to the

king/burwell question. you are a brilliant woman, without any question. you've served very well. i think i voted for you when you were up for omb. i have a lot of confidence in your capabilities. i remember the conversation that we had in the office, you were on metlife's board of directors. i cannot imagine a member of a board talking to your ceo and asking him a question about the possible scenario that may be a probable scenario that there may be something that happens that will require the company to be prepared for an outcome, a legal outcome, and the answer is i don't have a plan. i just don't see that as a realistic outcome. and the question i've heard over and over again is simply is there a contingency plan -- not what is the plan -- but is there a plan?

>> senator, with regard -- and i think we've been through right now in terms of this issue of planning for a hypothetical for which there has not even been oral arguments in front of the supreme court, what we are spending and what i am spending my time doing is focusing on what i believe i'm responsible for, which is implementing the law that you all have i have go inus, as i understand it. and that is right now where my time is focused. >> so you have no margin at all to spend any time focused on a probable outcome that could impact the delivery system of health care in america you have no plan -- no time for a contingency plan whatsoever? >> right now with regard to a probable outcome, as i think i have said, we believe the position that we hold is a position that both represents the letter of the law -- and i

will let the justice department articulate the reasoning around that and we recently have in the briefed that we've filed -- with regard to the letter of the law and certainly with the spirit of the law and the idea that the united states congress gave tax breaks to people in new york but not people in new jersey or other states and so we believe that in terms of the each you use, probable, we believe that we are in a position that is the right position. >> so section 1401 of the law specified the people may receive a premium tax credit if they enroll through an exchanged established by the state under section 1311. so you believe there's no likelihood that the actual letters in the law will have weight in the supreme court? >> with regard to the issue of the specific arguments around the letter of the law, i am not a lawyer and i will defer to my colleagues at the justice department with regard to the specifics of that and we have

filed a brief. >> so no contingency plan? >> as i've said, right now what i am focused on is what is before us now in terms of the most important responsibility in a way that serves the consumer and between now and february 15th that is my deep focus. >> thank you senators. senator casey, last. >> thank you, chairman. secretary burwell, we're honored that you're here with us today. let me say at the outset that i've been in state government and the federal government now for what i guess is about 18 years and i know competence and integrity when i see it and i think you've demonstrated that in this job and i think you've demonstrated that today. so i want to start with a list and i'll try to dose these quickly because there's a lot to be positive about not just in your

statement and the budget presentation but also the impact of the aca and other policies. let me do this very quickly. and then i'll raise a point of contention. but i do want to ask you about medicaid, a couple of questions about medicaid. first of all, with regard to the newly insured since aca, just a staggering number of americans now are covered. i don't have the exact number but we're into the double figure millions and that's significant. children's health insurance i was heartened and encouraged by the proposal just to give you a sense of what my state of pennsylvania has right now we've got 147,000 as of this -- as of january. 147,464 children enrolled. our program is a little more than 20 years old but it's -- i don't know what we would do without the program.

so senator brown and other who is have raised this issue repeatedly as i have we were heartened and we just hope that your commitment to it the administration's commitment to it will be shared by people in both parties. i noted that in another document donut hole savings since 2010 meaning seniors who have to pay out of their own pocket when they hit a prescription drug gap, that -- the reversal of that, meaning savings, $11.5 billion affecting more than 8 million seniors. 8 and 10 in the federal marketplace customers getting coverage for 100 bucks when you factor in the tax credit. national institutes of health your commitment to increase funding for that. should be bipartisan here and i hope it will continue to be. early learning, i don't have time to go into that but a great

commitment by the administration. hospital readmissions going down literally saving lives. according to your testimony, if you look at the 2010 to 2013 hospital readmission reduction saving 50,000 lives and child care the commitment there is great. we won't have time to go into that. head start, early start home visiting, that's a long list. and i think we should not only celebrate or note those achievements and commitments, depending on the one that i itemized, but we should fight very hard here to support funding and any other legislation to do that. i wanted to ask you, though, about medicaid. the way i look at medicaid is it's -- it's a program but it's really the program for long-term

care for seniors, children and individuals with disabilities. so instead of thinking of the program, i try to think about who gets the benefit of a great program. i am unopposed to any block granting of medicaid. it's a really bad idea. but, worse than that, it would be harmful to people. i wanted to ask you, in light of this debate about what happens to medicaid what happens to -- in our state an estimate of 250,000 seniors who depend on medicaid for long-term care, what happens to those seniors, what we believe that it's both rm

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