partisan manipulation, this court has said may be fine and constitutional. but the one thing you cannot do is use race as a proxy for politics or political affiliation. you cannot use racial targets that don't have a legitimate justification. they're not tied to current -- >> i thought you agreed with justice breyer. now you're saying you cannot use race as a proxy for political affiliation. but that was his hypothetical. that these people were moved because blacks overwhelmingly vote democrat. >> your honor -- >> you're saying that's bad if that's the reason they move them. i don't think he thinks that's bad. >> i understood justice breyer to be describing a situation in which you're moving people because they're democrats who have voting voting behavior data, you look at data -- >> you're moving them because they're black and you think blacks will overwhelmingly vote democrat. that's why you're moving them. because they're black. because we assume that blacks are overwhelmingly democrats.

>> your honor, in this area the court has said that assumptions like that cannot be the basis of the way district lines are drawn -- >> because time is running out, there is -- in your presentation you're saying we are attack the statewide plan. we are not picking one district or the other. and you have been attacked on that point. the attack is that claims have to be district by district they can't be statewide. so i would like your answer to that question. there hasn't been a claim as far as i know that was statewide. >> your honor, our claim is that the exact same policy was applied in every black majority district which is we will use racial data to repopulate as close as we can possibly do it to the exact same black percentage. that's a policy applied in all

36 districts. >> and how are your clients hurt by that? it seems to me you have to come up with a client in one of the other districts that would have been as you put it more competitive had this packing not occurred. >> your honor -- >> i assume that's the harm that you're allegeingalleging. >> your honor, we -- the record demonstrates that we have plaintiffs or we have members of the adc in many of the black majority districts at issue and that it's sufficient for to us challenge this policy in those districts. >> i thought the record just showed that you named your plaintiffs by county rather than district. >> but many of the districts are wholly contained within the county. they occupy the full -- we demonstrate in our brief the number of senate districts and many house districts. >> in your district by district challenge. it's clean, rise and fall solely on this statewide point you've made?

>> by statewide we simply mean a common policy applied to every district in the state. and mr. chief justice if i may reserve the balance. >> thank you, counsel. >> may it please the court. this court's jurisprudence channels the conversation that we're having today. this court has identified two constitutional claims that could be raised with regard to the use of race in districting. one is intentional dilution of minority votes for the purpose of utilizing their effectiveness. >> you lost on the dilution claim. >> we did. the facts material to the shaw

claim were not in dispute at trial. the question is whether they fall within the predominance of this court's decision. >> did the district court understand you to be asserting a district-specific -- district-specific claims? >> i think we understood it to be challenging each of the districts. >> where do you find that in the opinion of the district court? i thought the district court interpreted you not to be making that claim. >> we advanced evidence as to the motive that was a motive common to all the districts, and then we advanced about particular districts to illustrate how that was played out. but there's no conceptual difference between challenging all 36 districts and challenging all 36 districts. it's the same claim.

>> but you're specific in your proposed findings you dealt specifically with certain districts and not specifically with others. >> the specific information dealt with many of the particular districts but the claim was that all of the districts were the result of a common purpose that in that common purpose race was the predominant and overriding -- >> some of the districts were unchanged. the percentage was exactly the same as it was before. those are the only districts that your clients were from. how have they been harmed? >> our clients -- we have members in all the districts. the theory of harm in the shaw line of cases -- >> was that established in the district court, that you have members in all the districts? >> that was a finding of the district court. the alabama -- because this concerned the black -- >> the finding of the district

court was that you have members -- >> i think it said all or virtually all. but that wasn't -- our standing wasn't in dispute. but the concept of injury in the shaw line of cases is not injury to the individuals who were in the district that become whiter because blacks are moved out. those are the people who don't have standing. in hayes this court made clear it's the individuals in the districts into which blacks are put for the predominant racial purpose of -- for predominant racial purpose. that's the standing doctrine that this court has announced in those cases. predominance involves under this court's -- >> i don't understand what you just said. they have a claim because there are too many blacks in their district? >> no. it's not about the number. the theory of the court in shaw is that if race is the predominant purpose in putting blacks into a district that that

will likely result in representational harm in terms of the way the elected officials will act. and that's been the theory of the shaw claims ever since shaw. >> and you think it's possible for the state to navigate between not enough minority members in the district and too many minority members in the district without taking race into account. >> no, we do not. but shaw doesn't say that taking race into account raises the constitutional question in all cases. particularly in the wake of this court's decision easily, which made it clear, finally resolving issues that had been kicking around for some time. that the fact that race was a factor in drawing a district doesn't trigger -- the majority of the court held there that for shaw purposes to trigger strict scrutiny the plaintiff would have to show that race was the predominant overriding purpose. it was the criteria to which

they couldn't be put aside for any other -- >> so they have to navigate between too many and too few but without race being the predominant consideration. >> if race isn't the predominant purpose and dilution isn't involved then there's no constitutional claim. with regard to section 5 i think it would be helpful to understand what the government's interpretation is and has been for some time about what section 5 requires. this is reflected in the government's brief at 22 and 23 under the 2011 guidelines. the government's view, and this has long been understood is that the black proportion can be reduced to the point where blacks no longer have the ability to elect the candidate of their choice. until you get to that point, changes are not retrogressive. and that's not the way -- >> what do you think -- wellish

it's speculate , it's speculative. but i think if alabama had reduced the number of minority voters in majority-minority districts in any significant way the attorney general would have come down on them like a ton of bricks. >> that is not correct, your honor. >> you did preclude the plan you're challenge today sxwlp he also preclude the 2001 plan which did precisely what you describe. the government's view of this is set out in some great detail in their brief in georgia versus ash krot and in the -- the oral argument of mr. stewart at the time. as they explained then, and this remains their view, and consistent with the way the department has operated, until the numbers can fall until it gets to the point where the ability to elect is in question -- >> can i just go back to your shaw/non-shaw? basically you're saying i don't have a shaw challenge. >> i have a shaw challenge. >> you're claiming it's a shaw

challenge but you don't have to describe the injury it's a ephemeral injury of race played a part in the overall plan. >> the court -- >> without an effect in a particular district. >> no. >> if a particular district -- if it stayed essentially the same, they didn't move the boundaries much. they obviously -- it's an all-white district. if they move the boundaries it wasn't to include more blacks or anything else. it was just because of geographic divisions. so explain to me why you don't have to prove that you were harmed specifically by the application of this policy. >> let me say two things in response to that. first, the theory of shaw is that if black voters are for predominantly racial reason moved into a racial district moved into a district for

predominantly racial reasons that would trigger strict scrutiny. >> but that wasn't true -- >> yes it is, your honor. when one member of this court said the districts hadn't changed, i think what he meant was the black percentage hadn't changed. all of these districts changed. they were underpopulated by on average about 15%. there was an average of 6,000 voters, individuals put in every house district. 20,000 in every senate district. >> now that you're talking about districts, could i come back to the question i had at the beginning so we understand what we have to decide. on page 128 of the joint appendix there's a paragraph from the district court aopinion that explains what the district court understood to be before it on the issue of intentional discrimination. i see nowhere any indication that the district court construed your pleadings and your other submissions to raise a claim about any specific

district. the third point is we construe the filings of the democratic conference plaintiffs as arguing that certain senate districts constitute racial gerrymanders. there's nothing like that with respect to your client. maybe i'm missing something. if that's how the district court understood your position then maybe it was wrong. but that would be the threshold question we'd have to decide wouldn't it be? that if you have to be district specific we would have to say the district court misunderstood the claims that you were asserting. >> i think in the context of the way the case was litigated and tried and the briefs at the time it was everybody understood the plaintiffs were challenging all of the majority black districts. >> the district court understood that? why did it include this paragraph and why did it not go through any districts that it saw you as challenging?

it went through some that it saw the other plaintiffs as challenging. none with respect to you. >> we think in the context this case was litigated there was no conceptual difference between challenging all the 36 districts and challenging 36 individual districts. the reason the opinion reads the way it does is that the state didn't contend and we didn't contend there was different district-specific purposes afoot. the state's account of this, which everyone accepted was that the state had a common purpose in adding those thousands of individuals to each district which was to continue the black percentage as it had been all along. it was a purpose common to all of them. >> and isn't it right that after trial when you submitted proposed findings of fact and conclusions of law in fact you did reference particular districts. you referenced senate district

18, 19 and 20. in another place you talked about all the majority black districts in the state's black belt. and you explained how your theory of the case related to each one of those districts. >> we did. this is somewhat annual gous to the teamsters decision from back in the 1970s, for the government to prove racial discrimination and promotions. the senate made out a pattern practice case by offering evidence that was classwide, that affected all the individual blacks and hispanics and then offered some individual stories. but the claim was for all of the individuals who worked in those facilities. >> to get there we'd have to -- you're talking about -- we construe the plaintiffs as acts that as a whole constitute gerrymandering. we have to say that was wrong get the complaint back, send it

back. so if we have to send it back i guess -- would there be anything wrong with saying this? look, tell the plaintiffs, please to point district by district to the fact that the primary motive here was racial. i don't think that would be too hard. you have loads of evidence on that. now, if the primary is racial, and this is the crucial part they then to justify this have to show that they are making a, and i don't know what word, reasonable attempt. good faith reasonable attempt. some other word. to comply with the old section 5 requirements. with the section 5 requirements. and now they have to do it over again anyway. so they do it over again. in fact, some of the questions suggest that that is what they were trying to do. and you'd have evidence there that says no no, that isn't

what they're trying to do. they didn't even read the guidelines of the attorney general. they didn't even look at what happened in the past. they made no such attempt. would there be -- from your point of view anything wrong with that holding? >> well, your honor, i think with regard to the question of justification, we think it doesn't make any sense in light of this court's decision particularly in shaw 2, to send it back. the court's decision makes clear that there are three parameters to the way you assess this. first, what they did is to be judged by the correct interpretation of the statute, not what they might have thought in good faith it meant. and the word correct is in a number of the shaw decisions. secondly, that the purpose to comply with the correct interpretation has to have been their motive at the time. and secondly at the time, not at trial but back when they did this they had to then in 2012

have had a strong basis in evidence for concluding that not using all these different numbers would have violated the statute. they can't satisfy any of those things. they can't go back -- you can send the case back to district court but you can't send the case back to 2012 and have them change the purpose, change the evidence before them. so unless you're going to change the standard of strict scrutiny this court has applied in shaw and other affirmative action-related cases you could not do that. it's years too late for them to solve those problems. >> i'm still having a psychological problem with your point. there were three reasons. you're saying merely because it was one among the three it necessarily was predominant as to each district created. the example of hypothetical i posited for you was the primary

reason above all others that they said it was 2% district and there may be districts among these 36 that as i indicated had contiguous populations that didn't make a difference about race. so it didn't -- they're not affected by this policy. why should we undo that? >> okay. okay. if i might just answer the one last question. the -- in fact as the analysis of the precinct splitting shows, with perhaps two exceptions there is race-based precinct splitting on the border of every one of the majority black districts in question here. it wasn't a situation where they just took the neighboring districts and they turned out to replicate to be just the ratio that they wanted. it was very very calculated and race-based. >> thank you, counsel.

>> the key point in this case is shaw cases require district-specific analysis. the district court departed from that principle and in our judgment the plaintiffs' main theory also departs from that principle. >> i don't understand why that's so general. i mean what the plaintiffs are saying is yes we have common evidence, not altogether usual in a shaw claim, but here they have evidence. it's a policy statement that retrogression was going to be a very mean priority, i think it was number two, and retrogression was required in a certain way as required the maintenance of black voting population. and that was going to be taken into account in every single majority minority district. now, the fact that there's

evidence, the principal evidence in the case, that relates to every single district and so in a sense the evidence is statewide, does not make it any less a district by district case. >> that may be right, justice kagan, but it also doesn't prove that race predominated in the shaw sense with respect to each specific district. and let me try to explain why. the test under shaw is whether race predominates to the derogation of traditionally criteria. it may be in some districts the effort to maintain the same african-american population resulted in judgments that -- to draw the districts in ways that derogated from traditional district criteria such as compactness and communities of interest. but it may anybody other districts that it didn't and i can provide specific examples of that. >> i guess i would appreciate specific examples because it seems to me as sort of a going in matter that when you say this

is the most important thing except for the reynolds inquiry, this is the most important thing, that necessarily it's going to affect the way you redraw or who you put into the districts. you might not reach the target in every single district. but necessarily you're saying we are prioritizing this race-based thing, criterion in a way that's going to affect every judgment we make. >> but the question under shaw, your honor, as we read the shaw line of cases is whether that is done in derogation of zrigsal districting. >> how can it not be when you have three priorities with three criteria and you say this is the absolute most important criteria? it's just the natural effect of that is going to be to minuteimize another two criteria. >> that's not true. sometimes they'll conflict. sometimes they won't. i think i can give you examples that will illustrate that for

the record. for example, there weren't specific findings about these districts in the district court's opinion. so i'm not trying to say that this is what the district court found. with respect to some districts for example house district 67, the state argues that that was a district in which you were going to have essentially a -- an african-american percentage at the percentage that the district was drawn at no matter how you drew it and that was because the surrounding populations around that district were all of comparable african-american percentages. so whatever choice you made in order to get to the 3-2%, 1% vote threshold was going to involve moving african-americans. and we submit that's not a situation in which race predominated in traditional districting criteria. it's a way in which traditional districting criteria drove the decision. there may however be other districts and senate district 26 is one that comes to mind in which -- where you had this movement of 14500 people in the

district which was in the city of montgomery and the surrounding areas. all but 35 of whom were african-american. and if one looks at that map and actually it's very difficult to discern in the small maps that are in your materials but if you can get a blowup of it what you will see in that map is that the so-called crab clause that the parties describe that extend out from the district capture african-american populations. what they do is carve out the white part of the city of montgomery and attach it by a very narrow land -- >> suppose they did that based on economic data. >> then i think it would not be a problem. >> but it results in the same thing. >> right. but it wouldn't be race predominating over traditional districting criteria. i will go back and pose the question your honor posed earlier about when partisanship can be a justification and when it isn't. i think it's a very technical answer but i think if a state were to move electoral precincts from one district to another, the entire electoral precinct

because there you would have the data on how people voted in this precinct, that would not raise a problem under the shaw analysis because you'd clearly be making a decision for partisan reasons. but when you split a district and you move just based on census block information you don't know how people in the census bloc voted, what you know is their race. at that point if you're using race as a proxy, and i think that's what mr. povis is trying to describe. when you use race as a proxy in that circumstance that would violate what this court has said in all the shaw cases is the constitutional norm at stake here, because you're making an assumption. you're stereotyping in that situation. >> and that's true at the outset if you move them by race in order to increase their capacity to influence districts? >> that's a difficult question your honor. but i think if you're moving people by race in order to ensure that you're not violating the voting rights act, that seems to be -- >> but then it's a one-way

ratchet. >> i don't think it is a one-way ratchet, your honor because you can move in both directions just move precincts and not census blocs. >> you say that the district court in addressing the claim of racial skraer mandgerrymandering on a statewide rather than a district-specific basis. i would assume that was an error on the part of the district court only if a district-specific claim was asserted by the plaintiffs. but you don't address that issue. >> yes i'm happy to address it now. i actually think this is quite a murky question. we agree, your honor is quite right that the district court did appear and jsa 138 is the place where they seemed to assert it's a statewide claim. in some respects you can understand why because the basic theory is that the motive influenced every district and it did adjudeicate the case on that basis. one understanding would be that the proper understanding of shaw

is that claims have to be made on a district-specific basis and that the plaintiffs here didn't propound recognizable claims under shaw and that would be one resolution here. but i have to say the record is somewhat murky on this. judge thompson in dissent did say he thought the claims were district by district specific. justice kagan has identified some information in the record. another option might be to articulate the correct district-specific standard and leave it to the district court to sort out -- >> but you don't deny that a statewide policy can refer to every district or every majority minority district in the state? >> no we don't deny that, but that's not enough -- our point is it's not enough to trigger strict scrutiny. you have to look and see whether it's implemented in a matter that is in der gaigs of traditional districting criteria district by district. >> but again, and i don't want to press it if you've given me your best answer to it. if a policy says we're going to prioritize this particular

criterion, which here was the mistaken understanding of retrogression, if a policy says we're going to prioritize this over everything else, it seems to me that that's pretty good evidence of a violation. >> only if, again -- i guess i am just going to repeat myself. but if it's in derrogation of traditional districting criteria. >> but the policy says it's going to prioritize it over everything else. that means it's going to be in derrogation of traditional districting criteria. sometimes they might fail. sometimes you're not going to be able to prioritize it over everything else. but the indent is still to prioritize it over everything else. >> but the question is -- take a step back because i think it might help to put it in this context. a challenge, shaw challenge is a challenge to a facially neutral government action. the lines on the map are what are being challenged here. that's the government action. those lines are facially neutral. they may in fact reflect a

violation of the constitution under shaw if race predominated in the placement of those lines in derogation of traditional districting criteria, but that's what you've got to prove. and the mere existence of this motive doesn't prove it for each district. and that's our point. if i could, i just would like to raise one point in my remaining time going back to the question of what section 5 of the retrogression required. >> and what effect if any the preclearance may have. >> yes. and the two are related. i think professor povis referred you to this chart. but the key thing is to look at not the difference between 2001 and the current plan but the difference between the 1993 plan and the 2001 plan. the justice department cleared the 2001 plan that alabama submitted. and you will see for every single district listed there with maybe one exception there were significant reductions in the minority percentages in

those districts. alabama knew perfectly well that it was perfectly consistent with its obligations under section 5. >> you asked for a remand. the result of the remand may well be alabama has to redistrict, is that right? >> yes. >> and when they do so that may not be subject to section 5. >> that's certainly correct. >> and that's not a concern for you? >> well, it's not a concern for us. it is what it is mr. chief justice. if on remand the district court concludes that some of these districts violated the constitution then alabama will have to -- will get its first chance to legislate a fix and section 5 won't be a basis for them to take any action. >> thank you, counsel.

>> mr. brasher? >> thank you, mr. chief justice. and may it please the court. i think the court should begin with the district court's fact finding because the district court expressly found race did not predominate and the court can affirm on that baes sxis avoid addressing questions in section 5 le districting that are unlikely to arise again because of the court decision in shelby county. on page 144 of the jurs kixal statement appendix the district court specifically found we did not impose a quota. the court says we imposed no bright line rule. and what the court meant is we preserve the core of existing districts. we followed pre-existing district lines. we followed roads. we followed county lines municipal lines. we met the needs of incumbents, and we preserved communities of interest. the plan that we proposed, the plan that we passed is a status quo plan. the whole point of this plan was to preserve the status quo because the republican party had won a majority in the legislature for the first time in 130 years. >> but the other side says it was impermissible for you to preserve the status quo because the opportunity for minority

voters in the majority minority districts to participate in the electoral process had improved to the extent that maintaining the status quo would be characterized as packing. >> well, actually, if you look at -- well, two responses to that, your honor. the first is that if you look at the amicus brief filed in support of neither party by political scientists they show that black voter turnout and white voter turnout and reg registration actually equalized in 1998. so there actually isn't some difference between the districts in 2010 and the new ones we proposed with respect to those criteria. the second point i guess i would make to that is our redistricting criteria our non-racial redistricting criteria were co-extensive with the objective here to preserve these majority black districts as they have been. and what i mean is the objective of these non-racial redistricting criteria was to preserve the status quo. so i think that's what the united states solicitor general is getting at-s it's difficult

to disentangle the notion that we should preserve the status quo of the majority black districts. >> is it fair to read the pleadings and submissions in this case as saying that the state did not defend this plan on the basis that it was for partisan purposes but that it was to comply with section 5? is that a fair reading a, of the red brief, and b, of what the district court found? >> i don't think it's a fair reading of either, your honor. and this is the reason why. certainly with respect to specific districts here when they were actually challenged we're able to respond and say this was for partisan political reasons. one of those districts, for example, the senate district 11 which was specifically challenged by the alabama democratic conference and the district court held that the changes to that district were based on politics. now, with respect to the plan as a whole our response has always been that there is a lot of factors that went into drawing the plan as a whole and went

into drawing any specific district, and i think it's important here that the plaintiffs have never proposed a redistricting plan that actually meets our race-neutral redistricting criteria, especially the 2% deviation in population that the legislature adopted. i think that's important for three reasons. >> are you really saying that's a plead-in requirement that they have to come in with a plan that meets all the rest of your criteria? >> i do not believe that's a plead-in requirement, i think it's an evidentiary issue and i think the court held that much in cromartie. and i think it's important for three reasons. first, the legislature adopted that 2% deviation to end the previous partisan gerrymander that the democrats adopted in 2001 where they systematically underpopulated majority black districts and overpopulated majority white districts in republican areas of the state. and that's why the plaintiffs brought a partisan gerrymandering claim in the district court below. and the second reason is what i was alluding to earlier. in easley versus cromartie the court held the first step a racial gerrymandering claim is to show there's some conceivable way to do this differently that

creates greater racial balance. and the facts are they never produced a plan that actually does that is a serious problem. and that makes sense because if you want to see if race was predominant in redistricting you take race out and you run it again and see what happens. >> mr. basher, let me just give you some numbers here from some of these districts right? hd-52. you needed to add 1,145 african-americans in order to maintain the percentage of african-american voters, which was your number two criterion. you added 1,143. you missed by two. hd-55 you needed to add 6,981. you added 6,994. sd-23, 15,069. you hit at 15,185. i mean, those numbers speak for themselves, don't they? that in each of these cases you were determined come what may and disregarding other criteria to maintain the black voting age population. >> i don't think that shows that for two reasons. first i agree with the united

states solicitor general that the question here is whether we subordinated race neutral redistricting krierts -- >> that was just a coincidence? >> no. but that goes to my second point-s those house districts that you were reading off are in the city of birmingham. the city of birmingham has over 200,000 people and it's 73% black. >> well, it's 73% and you hit that 73% exactly. >> that's my point. there are at least going to be some of those house districts in birmingham that are 73% black. i don't believe in a place where there's 200,000 people and 73% are black you need to subordinate racial neutral criteria to -- >> i think you kind of do actually. because you're trying to repopulate these districts. and many of these districts, yes, there are many, many, many african-americans. but as you just suggested, there are also white people. and you did it so that you you know, completely replicated the exact percentage figure. >> i'll give you another example of what i mean. house district 67, which we talk about in our briefs, is a single

county district. it's always been a single county district. it's a single county district in our plan and it's a single county district in every plan that the plaintiffs proposed. and it's always going to be 70% black because that county is 70% black. i think the same thing can be said about many of the neighborhoods in birmingham. these neighborhoods are 73% black. and that's how we hit those numbers. and they certainly haven't proven otherwise. i also think that the 2% -- the failure to propose a 2% plan is important because a 10% plan, the plans that they actually have proposed are drastically different from a 2% plan. it's like comparing a plan with 100 districts to one with only 80 districts. their senate districts can vary by 14,000 people and ours can only vary by around 2,000 people. but even though these plans are drastically different with respect to the criteria that the legislature adopted here many of their districts have exactly the same black population percentage as our districts. this is clearest if you look at page 36 of our brief where we lay out the senate districts in their own proposed plans next to the senate districts in our

proposed plan. and you look and you see senate district 18, 19 20. some of the senate districts that justice kagan was talking about earlier are almost exactly the same in all three plans. if you look at senate district 33 it's exactly the same in our plan and in the black caucus's proposed plan. the evidence was that the only way you could draw senate district 33 with a different black population percentage. >> what about senate district 26? >> senate district 26 was above 70% black in the previous plan, and it's above 70% black in our plan and in the black caucus's plan. now, it's not exactly on target. but the plaintiffs testified in this case that the area of montgomery city that we're talking about here is 99% black. and because that was one of the 123459 districts that they actually challenged we have actually good faith credibility determination from the trial court because the drafters actually testified about why they made the changes to senate district 26 that they made. and they said that because of the way populations shifted they had to change in adjoining

districts, senate district 30 which require changes to all the rest of the districts. and that left a county, sort of an orphan county, crenshaw county as a rural county south of montgomery. they explained that what they did is they took part of former senate district 26 took it out to make a way to connect the rural crenshaw county to the rest of senate district 25 which was already predominantly rural. >> solicitor general just said if you look at that district it has a very bizarre shape and the effect of the bizarre shape is to pull in predominantly african-american areas and exclude predominantly white areas. is he correct on that? >> actually, i respectfully disagree with him about that. as you look at the comparison map, it's in the joint appendix on 197. you can see a comparison between a former district and the current district. and what you'll see is up at the right -- i'm sorry. the left part of montgomery county. that's where the former district used to be. it was part of senate district 25 that came into the middle of that district sort of a -- kind

of came in the middle of it. and what the drafters did here is they drew the lines closer to the city of montgomery and they preserved that part of senate district 25 that came in the middle of it. the only thing they did is they took some precincts and some parts of precincts, kind of along those lines, and they moved them from senate district 25 to senate district 26. also just correct something that my friend the solicitor general said. we didn't just move black voters into that district. we also moved hispanic voters into that district. we moved white voters into that district. we made changes -- >> mr. basher, i mean, usually in these cases you're looking at these funny-shaped districts and you're trying to figure out from the shape and from other matters whether race has been used instead of traditional districting criteria. but this is a very sort of sui generis claim because the previous evidence in this case is not all the circumstantial stuff that we usually do. it's a policy statement from the

state that says race, non-retrogression is going to be our principal criteria except for rentals. and then clear testimony from the people who are applying that policy statement that they thought that meant maintaining the black voting age population something which is a mistaken understanding of what retro retrogression entails. but you don't have to look at all the circumstantial evidence about the shape of districts when you have a policy statement from the state saying this is our number one criterion except for reynolds and this is how we understand it, in such a way ha it's going to ensure that a 68% district stays a 68% district and a 52% district stays a 52% district and so on. >> well, just two quick responses to that, justice kagan. the first is that the state is always going to say they're complying with federal law was a top priority because federal law is supreme. so if --

>> this is much more than that. this is very specific. saying where the two legislators principally in charge of this said this is what we understand the requirements are that we're going to maintain the black voting age population in each district. >> that brings me to my second point, which is imagine we had done the same thing the plaintiffs are suggesting and we had hired a political scientist to tell us 55% should be the target. i don't think they can say race predominated in that circumstance. just because we have a different target. they are bringing effectively a circumstantial case here. the fact we said this was our objective under section 5 -- >> justice kagan's question points up the fact that the defenders of this plan did not rely on the fact it was a political gerrymander. and that of course they said they had the 2% goal. the basis was race in order to

comply with section 5. >> my point about that is certainly with respect to specific districts they were based on partisanship. and so had they challenged specific districts, we would have responded in kind with respect to those specific districts. but they naj never challenged specific districts below. and i think to answer justice alito's question to my friends on the other side you should look at document 194 which is the black caucus's post-trial brief. and although they mention an occasional specific district they don't have any evidence -- i guess this goes back to justice kagan's question. this is a circumstantial case because the only evidence -- >> considerable evidence on senate district 26. >> senate district 26 was challenged by the alabama democratic conference, which has now brought a shaw claim with respect to senate district 26. because they specifically challenged that district you actually have like i said a credibility determination by the district court about the testimony with respect to that specific district. >> let me ask you about this section 5 mistake.

isn't it so that both the district court and alabama were laboring under the impression that retrogression meant you have to keep the same numbers? >> the district court made an express fact finding here that our goal was to prevent substantial reductions in black population in pre-existing majority black districts. >> and that's a misunderstanding of what section 5 requires, then the whole thing is infected by that mistake. >> well i disagree with you respectfully about it being a misunderstanding because i think in 2006 congress told us that we could not diminish the ability to elect black voters in pre-existing black districts. my friend the professor testified against the inclusion of that language in congress and he told them if they included that language it would "lock into place" the majority black districts in the south. if you cannot diminish the ability to elect that means that if there's a safe majority black district where there's a 100% chance that black voters can elect their candidates of choice you cannot drop that to where

they simply have a 50 chance or 60% chance. that's what we were setting out to do. this court has said that states get leeway in complying with section 5 and the equal protection clause, that bedo not have to hit things right on the dot. >> mr. basher, i don't understand your response to justice ginsburg. there are different interpretations of what those 2006 amendments mean right? under one interpretation it was a codification of justice souter's opinion so majority minority districts could be transformed into influence districts. on another stricter interpretation perhaps no majority and minority districts had to stay majority minority districts. but in no interpretation does a 76% district have to stay 76% districts when circumstances change and when the ability to elect candidates of one's choice does not require it. >> this is what justice souter said in his disent in georgia v.

ashcroft. if they vote in blocs which it's consistent they do in alabama it will generally reduce the chance that the minority group's favored candidate will be elected. the majority opinion in georgia v. ashcroft agreed with that as well. and the district court in georgia v. ashcroft which i think congress was trying to go back to said if existing opportunities of mrntd voters to exercise their franchise are robust a proposed plan that leaves those voters with merely a reasonable or fair chance of electing a candidate of choice would constant stoout retrogressi no. . the testimony from the plaintiff's own expert that majority minority districts in alabama that are only 55% back would give those voters a reasonable opportunity to elect. >> i want to know what you think about the practicalities of sending this back. assume in the back of any mind just relying on state policy is this. a state legislator gets up and says in our state there's a

history of discrimination against black people there are very few black representatives in this body. i would like to find a way of drawing district lines so that we have a few more. okay? that's the normal way this case comes up. this is an obverse and odd situation. all right? i don't know that that statement should automatically disqualify his plan. maybe we should look a little further into it and see what they actually did. suppose i start there. and then i say, okay you vote receive district by district. i suspect they'll be able to prove that at least in some districts, at least in some the statement of the legislator here did prevail and did make a difference. now, that so they don't have section 5 to rely on as a defense. so i don't know what the defense is possibly going to be. and since we can't even think

what the defense is why don't they redo this plan in the legislature and save everybody the time and trouble? what's your response to that? >> there are a couple of responses. the first is i think -- >> it's a lot of trouble to redo a plan. is it not a lot of trouble? >> it is a lot of trouble. >> so my point of my question is you want to go to that lot of trouble before a lot of extra trouble in court proceedings our want to go to that trouble right off the bat and get it over with? now, i expect you'd have an answer to that and i'm not taking a point of view. i just want to know what your response is. >> to respond to that pointed question, this plan was passed after 21 hearings held throughout the state of alabama. it was passed after extensive legislative negotiations. it was passed in a special session of the alabama legislature that was called for purposes of enacting a redistricting plan. so we do not want to go back through that process. >> of course you don't. but my question is is there going to be a defense left that could stop from you having to go back? >> yes.

i think the united states agrees with me that the question here is whether there was a strong basis in evidence for us to believe at the time that we passed this plan that we had to comply with section 5. and i think we had that defense even if we were litigating district by district. but let me say something -- >> the question is what did it mean to comply with section 5? and that's -- you can say strong yes and -- everybody agrees that that counts. compliance with section 5. strong interest in doing that. but if you think section 5 means you've got to preserve the same numbers and that's not what section 5 means then the whole premise on which the district court based its decision was wrong. >> i don't think so. because i think the district court's decision was premised on the fact that race was not the predominant factor in this plan. but to go to the question about section 5, we adopted a very reasonable section 5 preclearance strategy here. it was the exact same thing that georgia did in 2005 and that congress said in the house report when it reauthorized

section 5 in 2006. >> then it turns out to be wrong, i guess you're still not guilty of using race. you're still trying to comply with section 5. as opposed to being racist right? >> that's exactly right. they did make intentional discrimination claims in the district court -- >> if the district court said that race was not the purpose of this plan, what in the district court's view was the purpose of the plan? >> well i don't think there's a need for a district court to identify any one specific -- >> i'm asking in this case what did they say? wasn't it the assumption that they wanted to assure preclearance under section 5? and for that reason use race. so when you a the district court said, well race was not the purpose, it was close to the purpose because they were trying to use section 5 and use race for that reason. >> it was certainly -- >> that's a very fine distinction. >> well, it was certainly a purpose that went into the

majority black districts but it was not the predominant motive in the way these lines -- >> i understand that. don't you have to use race to comply with section 5? >> that's right. >> is there any way to comply with section 5 without comply with section 5 without using race? >> there is not. >> you don't have to use race in this way mr. brasher. nobody says it requires you to maintain a 78% district and was no longer needed with respect to the group's ability to elect a candidate of choice. >> i respectfully disagree. we followed the same strategy that georgia followed in 2005. congress made a record in 2006 to try to5. part of that record was them saying that georgia's plan from 2005 was a good thing. we did the same thing in this redistricting cycle. we did the same thing that the plaintiffs did when they were in charge of the legislature in 2001. the only difference is they

tried to make targets from the 9183 plan as were 1993 and we tried to keep districts the same from 2010 to 2012. >> can i follow up on justice's explanation. i assume section 5 would not be a consideration so long as a new coverage formula is not adopted by congress. is that correct? >> if a legislature were to pass new plans. >> legislature can do whatever it wants if it relies on partisanship rather than on race. to what degree would or could or would the legislature be justified in doing? to what degree would it be required to take into account the degree if any to which section 2 imposes something like recriigation requirement. >> i don't know how section 2 would apply in this circumstance because by complying with

section 5 here we necessarily complied the section 2 because it is lesser standard. i think the fact that we could have done if the plaintiffs vacated likely to be the same plan. >> if on a do over the objectionive was to produce maximum republican representation in both houses of the legislature and the way in doing that there was a drastic reduction in the number of african-american senators and representatives, would that be a violation of section 2? >> not necessarily. there would be a lot more that would go into that analysis whether that violated section 2 you would have to look to see if they can make a section 2 claim. one of the issues in the case is that this plan gives representation to black voters in alabama. there are about 25% black voting age population in alabama and about 25 majority black

districts -- sorry 25% black districts in the house and 25% in the senate. this plan meets section 2 in that regard in the sense that it gets proportional representation. i do not know what would happen if the plans are vacated. these are very sophisticated parties on the other side of the case with sophisticated counsel. the reason they never proposed a way to do this following criteria is they know the 2% deviation prevents them from gerrymandering districts. the 2% deviation was adopted at the beginning of the redistricting process so the plaintiffs had a year on the committee to come up with it 2% plan. instead they imposed the 10% plans and then a year of litigation to come up with the plan and they didn't do that. that is what the district court was getting at when said this

court said race did not dominate and then the district court suggests this case really is about the 2% population deviation. >> you're suggesting that there is some necessity for a 2% plan but there is no necessity for 2% plan. states have gone up to 10% without getting into trouble with reynolds. that can'tinse late your plan from this kind of challenge can it? >> i think it can and for this reason because we are in charge of adopting our race neutral redistricting criteria. if they want to prove the first step of that and easiest way is to propose some other way of meeting criteria that provides greater racial balance. they haven't proposed any way to do that. and the plans they did propose are very, very similar and many of the majority black districts. not only have they not proposed a 2% plan but they actually the

plans they did propose are not that different. i think at the very least the fact that the plaintiffs never proposed a way to do the redistricting that meets the criteria under scores you cannot find the fact finding was clearly erroneous. i think the court should affirm on that basis. let me address the question of reman for a second. the united states position is internally inconsistent because united states agrees that the population percentages alone in the districts are not sufficient for the plaintiffs to have met the burden of proof to show that race predominated. that is the only evidence introduced. that is why the district court said these are statewide challenges because the only evidence in the record whatever they may have said the only evidence in the record was population statistics. >> you look at the complaint. i look at the complaint and suspect i will find something

about districts. it is certainly true that taking the u.s. point of view it's quite clear to me that the court decided it on the basis of the statewide plan. so if it is wrong then they ought to have the chance to go back and make their claim district by district and have a decision on that basis. >> once again i don't think -- they may have brought claims with respect. i think if you look at the complaint you won't find that. if they did the only evidence that they introduced about the districts are statistics alone and the united states agrees that is insufficient for them to have met the burden of proof. i don't see how you can reverse the fact finding as erroneous given all introduced was statistics. unless the court has any other questions. >> thank you. professor, you have two minutes remaining. >> thank you very much.

>> on that last point, earlier one of the two of you said that if you looked at the division of precincts it was done on the basis of this policy in almost every district. was that shown? >> we introduced all of that precinct splitting information below and in our proposed findings of fact, document 196 some of which is reproduced in one of the briefs. we made exactly this point yes your honor. >> what other besides the statistics, what other evidence did you present? i just want a summary of it from you. >> the key fact we presented that hasn't been discussed here is that the alabama constitution prohibits the splitting of counties. and they say they had a supremacy clause obligation to meet these racial targets.

and that meant they could override the alabama constitution's protection of county boundaries and all other state districting principles. the 2% rule works the same way. if that is actually a federal constitutional requirement they can also override the key protections against gerrymandering, the county boundaries or political subdivision boundaries and it means they can manipulate the county delegations in the alabama legislature by breaking counties into multiple districts and then deciding who runs the county by putting their district in there. now, a second question we answered that i think has been very important in this discussion -- by the way, i don't want to lose track of the fact that the alabama legislature will have to comply with the whole county provisions or at least they can't use the federal to split them.

the way most states do this is they start with redistricting principles and then look to see at the end have we maintained the same number of districts or if they start with a number at the beginning which they are not required to, they ask what's necessary in current conditions to preserve the ability to elect today. that is what alabama did in its 2001 submissions. it actually said the number for the ability to elect was 55% black voting age population in the official submissions to the united states. >> the case is submitted. monday night a look at some of the observances marking the 50th anniversary of the march in selma. we'll show you the selma 50th anniversary commemoration with president obama and georgia congressman john lewis. and then some abc news footage of the march 25, 1965 voting rights rally in montgomery,

alabama. after that president lyndon johnson's speech to congress on voting rights. finally, the selma 50th anniversary commemorative service at brown chapel a.m.e. church. that all begins 8:00 p.m. eastern on c-span 3. next a discussion about medicare and the sustainable growth rate. and then a house hearing on the future of the tsa's pre-check program. after that a pentagon briefing on 21st century deterrence and national threats. the alliance for health reform hosted a discussion about the sustainable growth rate of medicare today with acting deputy director for center of medicare medicaid innovation. congress is currently considering legislation to change the sgr. let's try to get started if

we can. my name is ed howard with the alliance for health reform. i want to welcome you to today's program on behalf our board of directors. the program is on the basics of medicare. it's the third in the series that of the alliance and the kaiser family foundation are conducting. we do this near the beginning of each congress and the recent years and we've done sessions on the affordable care act the last week on medicaid and next wednesday we will be doing the final one in the series on the subject of health care costs. watch your inbox for notices about that if you haven't gotten them already. today we are going to focus on medicare are the largest healthcare program at least in terms of federal cost. and before we go any further i

want to recognize the moderator for today's program, she is the senior vice president of the foundation and the director of the focus program on medicare policy and its project on the medicare future. >> it's a great to be here today and with my friends at the alliance. they do such a great job in putting together these sessions to bring information to you and today for the audience and those watching on c-span. and on behalf of the foundation we want to welcome you all to get your film of medicare this is our medicare 101 and it is an opportunity to get your questions answered and we have a great group of people who will be joining us to answer your questions. we have a lot of ground to cover today which we have gotten very good at doing very quickly. for those of you in the room i'm very pleased to be able to show

you our primer which you all can take home. and for those of you who are watching this will be on our website which you can download at kff.org. you may be hearing a lot about medicare because of what has been going on with the sgr. you may be hearing a lot about medicare because of what has been going on in the budget resolution and we may be talking about that. but we talked about medicare for important reasons. one, it's very important to the lives of the 55 million people it serves mostly seniors but younger people with disabilities. medicare is a very important source of revenue to the nation's hospitals, physicians, home health providers. so i'm sure you hear a lot from those in your boss's districts who come because they care about

medicare, as well. medicare is 14% of the federal budget. when you are working on issues related to the federal budget you are working on medicare. so we are going to get through the a, b, cs and ds of medicare. we will try to demystify some of the acronyms. and we hope this will be helpful to you. before we get to our panel of experts we are especially pleased to be able to show you a very short animated video on the history of medicare and right before we get to this video i just want to acknowledge three people in the room who worked very hard on this video and i hope that you will join me in giving them applause. francis ying over there. [ applause ]

christina swoop right over there. [ applause ] and shannon griffin who is also over there. thank you all for all your heart work on this. i hope you will pretend that we distributed popcorn and we'll dim the lights and watch the video. >> in the depression the elderly were quite dependent on their sons and daughters and they were out of jobs. the principal problem was medical care costs not that people couldn't get good care but they couldn't afford the hospital costs. >> there wasn't much of an argument about the need. the argument was what to do about it.

♪ >> they thought it would help people in the south but only 32 states have adopted it. what we showed clearly was only half had coverage. most of it was very poor coverage. >> older people are three times as often to be hospitalized but their income is less than half that of people under 65. >> one of the methods of imposing socialism is very easy to disguise as a medical program. >> we haven't forgotten. [ applause ]

♪ >> the social security offices were kept open into the evening for people who were still at work. ♪ ♪ >> i would submit legislation shortly to help free the elderly

from the fear of catastrophic illness. ♪ >> we are supposed to represent the people. ♪ ♪ >> one senior's annual drug

costs exceeds $250,000 they fall into the so-call doughnut hole. ♪ >> now that the plan is in place 39 million have signed up for it. drug costs are less than anticipated. [ applause ] >> beginning next year preventive care including annual physicals, wellness exams and tests like mammograms will be free for seniors as well. ♪

♪ ♪

♪ >> a lot of care was given that would never have been given if it hadn't been for medicare. >> thanks again to the folks who put that together. did you get all that because

knowing kaiser there will be a quiz at some point that you will have to take on all of the material. >> actually, there is a quiz on our website. you can take that quiz. >> you will hear a lot more not so much about medicare's history in the next hour and a half but its prentd and its future. we can ask our panel to join us. we want to take full advantage of the folks. they are stars, as well. we want to give you as much chance to ask questions as we possibly can. as i said, we are joined in this effort by the foundation and i just want to say where this

video is not the only high quality resource on medicare and other health policy topics that you can find by going to their website, kff.org. and we have one of the countries experts as a matter of fact right here in the funds senior vice president trisha newman. she can do more than just referee the discussion. a little bit of house keeping. i am happy that the alliance and kaiser are on the house side. we don't get back here very often. i do want to apologize for the sight lines that some of you folks in the corners might have. but it is a limitation if you can't get in the room, then here you are so bear with us and we will try to make the best of the shape of the room, the clarity of the conversation i think will make up for it.

if you are in a twitter mode you can see the hashtag medicare 101. if you need wifi there are instructions on how to connect. i think they are on your table and they are on the screens that you see there, as well. lots of important information in your packets including speaker bigraphical information more extensive than you hear from us. there is a materials list that has everything that's in your kit listed. all of that is on the alliance website at allhealth.org so you can pass it along to some of your colleagues who may not have been able to get here today. speaking of which i should note the presence of c-span if you are watching on c-span and you have access to a computer, as well you can go to allhealth.org and find all of

the speakers' slides and the background material so you can follow along more closely. there will be a video recording of this briefing available on the kaiser website, kff.org probably monday if not tuesday and a transcript a couple of days later on the alliance website at allhealth.org. so two pieces of paper i want to call your attention to, the green question card you can use to ask a question at the appropriate time. there are some microphones that you can use at the far corners of the room to ask your question orally. and then a blue evaluation form that will help us improve these programs for you and get the subjects and speakers and the treatments that you need to do your job. one final thing that all of you don't have in your hand is a

yellow evaluation sheet that is more general about the briefings and activities that the alliance puts on. we want to try to get particularly the opinions of congressional staff. those of you who identified yourself as such when you checked in i hope you got a yellow evaluation form. if you didn't see one of the staff folks and we will get you one. we very much appreciate you filling that out. so enough of the preliminaries. we have a terrific panel. we are going to start with juliet associate director of the program at kaiser, one of the leading analysts of medicare today and of proposals to change it. her task today is to sort of keep it simple, describe the basic structure of the program, who is in it what's covered what's not? how and by whom its paid for and she can do all of that in eight

minutes no problem. thank you very much for being here. >> thank you. it's great to see all of you here to learn about medicare and i have a lot of ground to cover in a short period of time so i will jump right in. i'll start at the beginning. medicare was established 50 years ago to provide health insurance to people age 65 and older back when most seniors had no or inadequate insurance coverage. the program was expanded a few years later to cover people under 65 with permanent disabilities. today medicare covers 55 million people most aged 65 and older but also 9 million people with disabilities under age 65. beneficiaries get the same benefits without regard to income or medical history. medicare covers a comprehensive set of benefits including hospitalizations, physician benefits, post acute care and a prescription drug benefit which is delivered through private

plans and private plans have been playing a larger role in the delivery of medicare benefits in recent years which i will talk about briefly soon. medicare covers a population that is on the whole sicker and has greater health needs than people who are not covered by medicare. for example, nearly half of beneficiaries have four or more chronic conditions and one-third have one or more functional impairments. and many people on medicare live on modest incomes primarily derived from social security. in 2013 half of all beneficiaries had annual income below $23,500 which is equivalent to 200% of poverty in 2015 for an individual. so now let's look at what medicare covers. most people on medicare get their benefits through the traditional medicare program as distinct from the medicare advantage program which i will discuss shortly. in traditional medicare

beneficiaries can see pretty much any provider that participates. coverage of medicare is divided into parts which are funded differently and have different cost structuring. part a is the hospital insurance program which helps pay for hospitalizations and post acute care. in 2015 beneficiaries paid a deductible of about $2,500. most people become entitled to part a after paying payroll taxes for ten years and enrollment is automatic if you are receiving social security when you turn 65. and there are details about financing here but i will come back to that shortly. part b is the supplementary medical insurance program which helps pay for physician visits and other outpatient services. most pay a monthly premium for part b which is about $105 in

2015. this premium is income related meaning people with higher incomes pay a higher part b premium. services are subject to deductible and coinsurance of 20%. enrollment is voluntary but most people who are entitled to part a also enroll in part b. parts c and part d are different from traditional medicare because they involve the delivery of medicare benefits through private plans. part c is known as medicare advantage which is an alternative to traditional medicare where beneficiaries can sign up for a private plan such as hmo or ppo and these plans are paid by medicare to provide enrollees with all part a and part b benefits and provide part d drug benefit and provide extra benefits that medicare does not cover such as vision and dental services. today about 16 million people or

30% of all people on medicare are enrolled in medicare advantage plans. part d is medicare's prescription drug benefit. part d coverage is voluntary meaning people who want the benefit must enroll in a private plan either stand alone prescription drug plan or medicare advantage plan that covers prescription drugs. plans can offer the standard drug benefit which is illustrated on this slide or they can vary the design of the benefit as long as it is at least equal in value. enrollees pay monthly premiums for their plan and pay for their prescription drugs in terms of co payments cht these costs vary from one plan to the next. if you have heard nothing else about part d you probably heard about the part d coverage gap also known as the doughnut hole. as a result of the provision in

the affordable care act the doughnut hole is being phased out and will be phased out completely by 2020. beneficiaries in part d with low incomes get additional assistance with premiums and cost sharing and in total about 7 out of 10 beneficiaries are now enrolled in part d plans. the money to pay for all of these benefits comes from several different sources. part a is funded primarily through pay roll taxes paid by workers and employers while part b and d are financed primarily by general revenues and monthly premiums paid by beneficiaries. part c is not shown here because the medicare advantage program is not financed separately. in 2014 medicare spent about $600 billion on medicare covered benefits. payments to medicare advantage plans and spending on hospital inpatient services for beneficiaries in traditional medicare accounted for about

half of medicare benefit spending while payments for physician services and drug benefit were about 10% each. despite the important benefits that medicare helps pay for there are some missing pieces in its benefit package. traditional medicare doesn't cover vision or dental services or hearing aides and it doesn't pay for most long term services and support such as extended stays in a nursing home. medicare also places no limit on beneficiaries out of pocket spending each year unlike typical private insurance plans. so to help with out of pocket costs and provide benefits that medicare does not cover most beneficiaries have some form of additional or supplemental insurance. a primary source is employer sponsored retiree health benefits. another is private insurance policies which help pay for medicare's deductibles and

coinsurance. and for about 10 million low income people on medicare medicaid pays their premiums and cost sharing. for most of these so-called dual eligible beneficiaries medicaid provides benefits that medicare does not cover notably long term care. even with medicare and supplemental coverage most beneficiaries face substantial out of pocket costs. in 2010 beneficiaries spent close to $5000 on average out of their own pockets both for premiums for medicare and supplemental coverage and for their costs for medical and long term care. so now i'm going to take an abrupt turn and give you a quick overview of major changes to medicare that were included in the affordable care act of 2010. there were benefit improvements including as i mentioned closing the doughnut hole and eliminating cost sharing. there were provisions to improve

quality of care through payment of delivery system reforms and also explicit savings including reduced payments to hospitals and other providers and to medicare advantage plans. and there were new revenues. income related premiums for the part d program and payroll tax increase for people with higher incomes. the congressional budget office estimated that the affordable care act would reduce medicare spending by $428 billion over ten years between 2010 and 2019. so the low is a big deal not just for uninsured but also for medicare. and the program does face pretty big challenges so i think it is clear that medicare will continue to undergo changes in the future perhaps the near future as we are all kind of witnessing with the latest debate over the sgr. medicare represents a growing share of federal budget with aging population.

beneficiaries face rising health care costs and more complex landscape with proliferation of plans. and providers are navigating their way through new payment approaches and these factors could be a springboard for future changes to medicare. with that i turn it over to you, bob. >> let me just say who bob is. dr. robert barrenson is an institute fellow at the urban institute. he was practicing internist for 20 years and helped shape medicare policy from the inside as senior staffer and served on the medicare payment advisory commission. and today we have asked him to describe complicated world of medicare payments. bob, thanks for joining us. >> it's a pleasure to be here. it is a complicated topic. i will try to start with going

over terminology which is some of the terms are used certainly in the media but with serious policy analysts and researchers the -- you going to set the timer for me? i am going to be looking. it's important to understand some of the terminology. important concepts and some of the terms being used in some ways are misleading and i want to point that out. many people will continue to use them but at least it helps to understand what we are talking about. so the first one is fee-for-service. what fee-for-service means is payments are made for each individual service or item provided during an encounter or hospital stay. and actually it's not each service that is provided, it's individual services that

actually are codified. they receive a designated code that they can be billed and paid for. so the classic fee-for-service is the medicare physician fee schedule where you have over 6,000 individual services for which physicians can bill but even there there is a lot of activities that physicians may perform that they don't get paid for because they don't have separate reimbursement or payment code. that is fee-for-service. fee-for-service medicare is a commonly used term to designate the part of medicare that is not medicare advantage. many people just refer to it as fee-for-service medicare. medpack has that, does that and i spent a term on that and was unable to change that. i noticed that kaiser correctly uses the term traditional medicare rather than fee-for-service medicare because as i'm going to point out in more detail in a couple of

minutes most of the payment that traditional medicare uses what it is is the next bullet i have there volume base payment. by volume base payment i mean payments that increase as a function of the number of units of services performed and for which payment is requested. so most traditional medicare payments are, in fact, volume based. i will go over that in more detail, but they are not classically fee-for-service. and in fact there is a different connotation of doing services because you get high volume and doing services because it involved activity for which you may get paid. let me go to the next one. the alternative as it is being

presented in most of the public dialogue around payment and medicare is the alternative to volume based payment is value-based payment. here payments include some level of financial rewards or penalties for measured quality and/or incentives for holding down costs with the view that under volume-based payment the incentive is to generate more volume and get more payment. the idea here is to have some incentives for being more prudent with health care spending. one of the points i want to make and i think it is important is that value-based payments as currently being implemented and will go over a lot of this in uch more detail than i have time are usually placed on top of volume-based payments. it's not an either/or situation for the most part. so what you have is current

payment models which we will talk about and then on top of that some new payment incentive or marginal reward or penalty related to an assessment of value. and then finally, a basic term to get out is what is now generally described or called population-based payment. these are payments that are made to a provider prospectively meaning ahead of time to a provider responsible for a population of individuals irrespective of the actual services provided. that's the key concept. so here the payment goes for caring for an individual for a year usually the payments are made on a monthly basis. and the incentive is completely different on the providers because if they do few services or lots of services they're basically getting the same payment. so that the notion here is the

payment is based on the population for which the provider is responsible. now, there are other terms and now we are getting more concrete about the units of payment which is where all the action is. it can be at the individual service level. in the fee schedule there is actually i don't know what the actual count is. i said 6,000. here i put more than 7,000. there are lots of individual services and the medicare physician fee schedule for individual services that the physicians provide and request payment for. there is a concept called packaging which isn't used very much in general discussion. it's when various services that are performed at the same time are not paid separately but are actually packaged into a single payment. so a simple example would be if you go to a doctor for an office

visit and some of the incidental lab work like urinalysis is not paid separately but part of the payment that goes for the visit. bundled is a term used a lot and there are two different meanings. you can get very confused. i have been very confused about what people are talking about. it is used at the same way packaging is used. a whole bunch of services are bundled together into a single payment. that is the term used a lot in the dialysis where there has been a recent reform that instead of paying separately for the dialysis and then the drugs that the individual receives it's become a bundled payment or a packaged payment, a single payment with the drugs being included in that payment. it changes the incentive for how much drug you provide and that's a reason to package it or bundle it.

the other meaning of bundled means putting different revenue streams together. money that goes to different providers, it can be a hospital and doctor we are now bundling that into a single payment that goes to one of the entities as a bundled payment or it can be -- we will get into the detail. that's the basic concept. it's bundling across providers. an episode is payment for services extending over time. so i'll give you examples. so a case rate is one example of a payment to a hospital. the episode is the hospitalization also called a case rate. instead of paying for each service performed in the hospital or even for each day in the hospital it's a case rate. it's a payment for the episode of the hospitalization and then a bundled episode is when you combine putting it out over time

with putting different providers together into the same payment model. per diem is each day of a hospital stay. you are not paying fee for service for each item but paying a fixed amount for the day in the hospital. diagnosis related groups is the term for the whole system of acute care hospitals of paying case rates and capitation is a common form of population-based payment. we now have bonus and penalties so pay for performance is value-based purchasing. these are marginal payments made up or down based on performance against specific metrics usually quality of care or service use. and then shared savings. we will talk a lot more about some of this stuff where there is an incentive for spending less than a target amount.

if you achieve that the provider and in this case medicare will share in the savings. now, i'm not going to go through any detail. the point is to demonstrate there is a variety of payment methods in traditional medicare. we still have lots of fee schedules but notice that some of the fee schedules have extensive or some packaging. so it's not a payment for an individual item but it's still a payment for services, individual services provided under a fee schedule. but there are per diems. under hospice and psychiatric hospitals there are episodes. in home health we moved to a system in which the home health agency receives payment for 60-day episode of care and not fee for service but 60-day episode and then finally capitation which is the payment to medicare advantage and to

part d plans. it's a fixed amount per month. and their responsible. very quickly raul it is the hhs framework for evolution of payment models. i am going to finish with just two more minutes if i can with what was in this legislation some of you i'm sure were working with it. last year's bill title was a sustainable growth rate repeal of medicare provider payment modernization act. i had to do my slides before a title was put on this year's legislation. this turned out to be the title for title i of that act called the medicare access and chip reauthorization act. the point is there is a repeal of this thing called sustainable growth rate and some notion of provider payment modernization which mostly means physician

payment modernization. briefly the background is that the sustainable growth rate which was enacted in 1997 in the balance budget act wasn't formula which passed an effort to control volume of services which is the concern about a volume-based payment method is that you get a lot of volume. what was called unsustainable growth in medicare part b spending. so spending targets were established and the theory here was if spending exceeded the target the fees would be reduced, individual fees of the 6,000 or 7,000 services so that spending would then revert back to the target that the treasury would not be out of pocket that extra spending. and, in fact since the early 2000s actual spending has mostly exceeded the targets so that

clinicians and i used the term clinicians because the medicare physician fee schedule applies to health professionals other than physicians. they should be subject to reductions. in fact in 2002 they did receive a reduction of a little more than 4.5% and based on that experience the congress decided we can't be cutting physicians fees every year by 4.5% so each year there has been a fix. 17 of them. and that means that instead of reducing the fees which there is a cumulative factor so the fees would not be reduced 4.5% but in the 20% to 30% range we have to do a fix every year. the original theory here behind this was -- i went back to 1989 when this was first talked about this notion of putting a total cap on physician spending and

reducing fees the theory was somehow the profession itself would discipline itself when it was exceeding this target they would establish clinical practice guidelines, self policing mechanisms so that their volume of services would come down. that never happened. and if you think about it and the many people thought about it, it wasn't a very good theory to begin with. now we are at the point and here is my last slide where the bill would repeal the sustainable growth rate specifying fee updates for -- what is called consolidated merit based payment incentive system. under this is an expansion of the concept of pay for performance. as much as 9% down, reduction in payment or increase in payment would be applied to a physician

based on their performance on measures of quality and resource usism so there is a fee schedule which has specified updates but that fee schedule to any physician can be adjusted by their performance. and that is the notion of improving value. and then finally the bill would set up alternative payment systems with 5% additional payment going to those physicians who actively participate with what's called alternative payment methods such as accountable care organizations, patient-centered medical homes, bundled payments if they are shown to be effective. so there is an incentive in here to move away from fee-for-service and in this case it is fee-for-service to alternative payment methods. and that sets up the next discussion. excellent.

pass the clicker to the distinguished doctor. he is the acting deputy director of the center for medicare and medicaid innovation what trisha referred to as cmmi. you have one of the acronym-like things explained. he holds medical and law degrees completing a residency in internal medicine. spent a good deal of career helping respond in the fast changing world of health reform and asked him to bring us up to speed about what they are doing to identify and spread helpful innovation in health care delivery and payment. thanks for being with us. >> thank you so much for having me here today. i want to start first by thanking you for having me here today and it occurs to me that i see a lot of young congressional

staff in the room. probably the most important thing you will learn here today from me is that if you ever want -- you will have fun with this fact in your careers. fact if you want to see a member of the executive branch and squirm a little bit, invite them to the building and put them on c-span and ask them a bunch of questions. that is what you will see over the next ten minutes. this is an overview. i will give it tew you in three parts. parts number one is why this is important and what are the goals let's start with the patient. the way that we pay for health care actually matters. that is my thesis. if you remember nothing else i say today is all in that one sentence. it matters because it signals to the providers and the market what it is we value as a payer,

a society and a nation. fee for service sends one signal to providers that the more you do, the more volume you produce the more we will pay you. and the purpose of cmmi and payment delivery reform is to send a different signal to the market. here is a practice in southeastern pennsylvania. they are a participant in the cmmi model called comprehensive primary care initiative. they do some things that are different than a traditional fee-for-service practice. they provide proactive preventive care to their 19,000 patients. they use clinical decision support. when a patient has a missing lab or screening their electronic medical record alerts the provider. and then they risk stratify their patients to identify patients that are high cost or likely to be high cost and sick. and they take care of those

patients in teams. and the teams include a doctor nurse and a care coordinator. it is a different way of practicing medicine. the question is how do you move from a fee-for-service world to a world that looks more like this where physicians are practicing in teams and providing proactive preventative care. so we are doing three things at a high level. number one, we are trying to change the way we pay providers. through the innovation center testing new models of payment and if they work expanding them nationally. number two, changing the way that providers deliver care. so giving providers the tools that they need to manage population health, to help them learn from one another and to promote patient engagement. and thirdly information. so being transparent about information, getting as much medicare and medicaid data out into the world as possible and

promoting the uptake of electronic health records to make sure that both providers and patients have information they needed to make the right decisions about their care at the right place at the right time. this is a basic taxonomy. i spend most time talking about the first bucket of payments. this is the taxonomy that bob alluded to of how to pay providers. this is my entire world. if you think of it category one is fee-for-service as it existed say 20 years ago. fee-for-service, pure fee-for-service with no link to quality or value. category 2 are fee-for-service payments, pay-for-performance with some link to quality or value. they think of programs like hospital acquired conditions required program or on the physicians side pqrs or physician value modifier.

category 3 are alternative payment models, work of the innovation center. these models are largely built on a fee-for-service architecture. things like accountable care organizations, bundled payments, advanced primary care medical homes. category 4 is the future where payment is no longer tied to the delivery of a particular service but it is tied to taking care of entire populations. these are the goals that secretary burrwell announced this past january 26. really focus on the dark blue circle here on this page. so the dark blue circle is percentage of medicare fee-for-service payments and alternative payment models. in 2011 there were zero. in 2014 at the end of 2014 about 20% of the $362 billion of

medicare fee-for-service payments excluding medicare advantage but numbers are similar. about 20% were alternative payment models. the goal is that by the end of 2016 30% of medicare fee-for-service payments will be in new models that work and 50% by the end of 2018. this is the first time in the history of the medicare program that we have set broad national goals. and what's really critical to understand that it is not just a medicare project. this past wednesday at the white house you may have seen that president obama kicked off something called health care learning and action network where we have convened commercial payers, state medicaid organizations and purchasers to join us in matching or exceeding these national goals. and for the last five years cms through the innovation center has been using a number of strategies to bring the private

sector along in reaching these alternative payment model targets. in a number of models we convene commercial payers and ask them to do models with us. in some of the models like pioneer acl model we give providers the incentives and say we will enter this contract with you but at the end of the second year we want you to enter alternative models. thirdly, we partner with states. states have a lot of power to convene commercial payers and help us achieve these targets. so part two, what are we seeing in terms of results? at a very high level and taking out a little bit of a risk knowing who else is on this panel so we could have a robust debate about this. one fact is absolutely true. over the years 2010 to 2014 we have seen unprecedented slow down in per capita medicare expenditure growth for parts a

and b. the reasons behind this are multi factorial. we think part of the power here is changes in payment and the way we are paying providers. we've seen significant reduction in medicare all cost 30 day hospital readmissions. this means that from 2010 to 2013 about 150,000 fewer medicare patients were readmitted to hospitals. readmissions are a key measure of health care quality. pioneer aco, just by show of hands, how many of you have at least heard of the term accountable care organization in the room? almost everyone in the room. i will give you a 30-second dramatic oversimplification of what an aco is. an aco is a group of providers that get together and they say "we are going to be accountable for these 10000, these 20,000, these 30,000 patients." and this can be in the commercial world or it can be in the medicare world.

now, in the medicare world, what that means is that we look at these ben fish united nationseficiary fisheficiaryiesbeneficiaries, how much they cost over some his for i can period of time, and that's the baseline. then we use some formula to project out what we think they are going to cost over the performance year. that's the benchmark. and an aco contract is basically a deal between the group of providers, the aco, and medicare. and we say if you beat that benchmark, we're share in the savings. if you exceed, that we'll share in the losses. by the way, we're going to measure you on 33 measures of quality and we're going to adjust those payments based on your performance on those measures of quality. so we have results from two years of the pioneer aco program. we're now in the fourth performance year but we have two years of public results. the pioneers beat national benchmarks on 15 out of 15 quality measures for which there are comparable national benchmarks and they beat them on

four out of four patient experience measures for which we have comparable national benchmarks. then they improved by a composite of 13 percentage points in the second year. for two years in a row they generated savings cumulatively of about $184 million and the savings per aco increased from 2.7 million in the fist year to 4.2 million in the second year. so pioneers are organizations that are pretty advanced they're -- they have some experience in bearing risk and quite a bit of experience in delivering care in this new world of delivery system reform. the partnership for patients is part of our pay for performance. partner for patient s iss is where

we asked ceos to reduce patients in hospitals. three numbers over the years 2010 to 201350,000 lives saved, 1.3 million patient harm events avoided and $12 billion in all payer savings. very brief just a couple of seconds on the cms innovation center. this was created by the affordable care act, section 3021, it's one of the most inspired sections of the aca. i love it. it's -- [ laughter ] i would think of it this way. we are scientists so we are testing models. if a model works, we evaluate it. we have 50 ph.d. research level scientists who work with us to evaluate these models. if they improve quality and cost remains neutral or option number two if quality is neutral and cost is reduced or option number three, the one we all hope for, if quality goes up and cost

comes down the secretary of health and human services has the authority to expand these models nationally. their duration and scope. this is a quick overview of our portfolio. we're testing about 25 different models. i could not talk about all of them today but it's in your package. this is a slide that just shows that innovation is happening pretty much everywhere in the country. this is a map that shows where our acos are. so nearly eight million 7.8 million medicare beneficiaries are currently aligned or assigned to acos, we have more than 400 acos operating now. last slide, here's what i think you will see over the next couple years. we are increasingly focused on integrating with the rest of cms, so really important point. cmmi is part of cms, we could not function without the rest of cms. everything we do is to improve the programs the agency runs. we are focused on evaluating

results from our models launching new models to round out the portfolio. you will see a steady drum beat of results over the next few years and expanding models that work. one very last thought. trisha gave you three reasons why medicare is important. i want to add one more that -- to that list. here's reason number four. all of us should we live long enough will become medicare beneficiaries. you could work on many other areas of domestic policy and it would never touch your personal life. but if you live to the age of 65 or become a patient or become disabled god forbid you will become a medicare beneficiary and that's why delivery system reform actually matters. because in the brief time i've been in government i have been admitted to a hospital myself, i've taken my children to see the pediatrician. we will all be patients. so this matters not just as a matter of public policy or to your bosses but to all of us as individuals. so, again, thank you for inviting me here today. i look forward to your

questions. >> thank you very much. our final panelist today is sheila birch. she's a faculty member at the harvard kennedy school. she's affiliated with baker donaldson, a public policy law firm. spent a number of years on the hill as many of you know, most prominently as bob -- senator bob dole's chief of staff. she, too, was a member of med pac and serves on a number of nonprofit corporate boards. sheila is our designated visionary today. she's charged with identifying some of the major challenges facing medicare as it enters its second half century and i'm looking forward to hearing from you. >> thank you very much. i have to admit i've never been called a visionary, but maybe it's my trifocals that are working in my interest. certainly reflecting my age. i want to -- it's a great pleasure to be here again and to be with my colleagues on the panel and to talk about the

medicare program. i'm essentially going to start with juliet left off and try and reflect looking forward on what some of my colleagues have commented on in terms of the challenges facing medicare. but i wanted to begin by underscoring a point that raul made and that is that how we pay, who we pay, what we pay for makes an enormous difference. as we've seen since literally the passage of the program in '65, as medicare goes, so largely goes the health care delivery system. we saw in the how we transitioned the payment for end stage renal disease and where that occurred and really in a great many places medicare has led the way. obviously private sector has an enormous role again, but, again, the policies that we set, the collaboration we've put in place with respect to the private sector will drive our delivery system going forward. again, let me start what juliet began and really talk about sort

of these three sort of groupings of issues, both spending, financing beneficiaries, and providiers and, again reflect a little bit on what we might expect short term and long term in terms of looking at the program going forward. while much has been made about the slowdown in medicare spending, it will continue to be an issue of tremendous concern to your colleagues and to your members. in part, obviously, as you can see from the pie chart that juliet gave us it consumes a big piece of federal outlays and that piece is growing. it is an issue because a portion is financed by payroll taxes and the work force is not expected to keep up with the number and the growth in beneficiaries. by 2030 we're looking at approximately 2.3 workers per retiree. so that essentially is an underpinning of the financing of the program becomes an issue in terms of long-term stability. at issue as well is because of tin creasing percentage of

funding that essentially is required out of general revenues, the other portion of the medicare financing package juliet pointed out leaving far fewer resources available for other federal priorities. again, if you look over time at the changes in social security, medicare and medicaid they become an increasingly huge part of what it is that we spend on the federal side. medicare costs are, in fact slowed down as was pointed out. they're expected to go to 4% from about 2014 to 2023. again, a smaller rate of increase than we have seen in the past certainly from the years i was on the hill and on med pac but at that same time, the gdp is only projected to rise 3.5% and the cpi 2.2. so essentially we continue to see the outpacing of costs generally by health care costs. so, again all of this causes us to continue to concern ourselves with what medicare's spending. and, of course, the demographics are working against us. the baby boomers are arriving

and while many of us are relatively healthy -- notwithstanding my trifocals -- at the outset and arguably less expensive for the near term, that changes. the good news is we are living longer. the bad news is we're more expensive as we get old unless of course, you i love the 95 then you become less expensive or you die. in 2011 the average per capita medicare spending tripled between the ages of 66 and 96. this is not entirely attributable to end-of-life care. i mean, we hear a great deal of what that contributes, but that is, in fact, not the only factor. in many cases, they are individuals who are chronically ill and the management of these patients is enormously important. and, of course there are the shear numbers of those who are going to be eligible. the first baby boomers began to arrive in 2011 when approximately 40 million americans were over the