<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:30310.wais]
A REVIEW OF THE ADMINISTRATION'S FY2007
HEALTH CARE PRIORITIES
HEARING
BEFORE THE
COMMITTEE ON ENERGY AND
COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
FEBRUARY 15, 2006
Serial No. 109-113
Printed for the use of the Committee on Energy and Commerce
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COMMITTEE ON ENERGY AND COMMERCE
JOE BARTON, Texas, Chairman
RALPH M. HALL, Texas JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida Ranking Member
Vice Chairman HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia FRANK PALLONE, JR., New Jersey
ED WHITFIELD, Kentucky SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia BART GORDON, Tennessee
BARBARA CUBIN, Wyoming BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
HEATHER WILSON, New Mexico BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York
CHARLES W. "CHIP" PICKERING, Mississippi ALBERT R. WYNN, Maryland
Vice Chairman GENE GREEN, Texas
VITO FOSSELLA, New York TED STRICKLAND, Ohio
STEVE BUYER, Indiana DIANA DEGETTE, Colorado
GEORGE RADANOVICH, California LOIS CAPPS, California
CHARLES F. BASS, New Hampshire MIKE DOYLE, Pennsylvania
JOSEPH R. PITTS, Pennsylvania TOM ALLEN, Maine
MARY BONO, California JIM DAVIS, Florida
GREG WALDEN, Oregon JAN SCHAKOWSKY, Illinois
LEE TERRY, Nebraska HILDA L. SOLIS, California
MIKE FERGUSON, New Jersey CHARLES A. GONZALEZ, Texas
MIKE ROGERS, Michigan JAY INSLEE, Washington
C.L. "BUTCH" OTTER, Idaho TAMMY BALDWIN, Wisconsin
SUE MYRICK, North Carolina MIKE ROSS, Arkansas
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
GRESHAM BARRETT, South Carolina
BUD ALBRIGHT, Staff Director
DAVID CAVICKE, General Counsel
REID P. F. STUNTZ, Minority Staff Director and Chief Counsel
CONTENTS
Page
Testimony of:
Leavitt, Hon. Michael O., Secretary , U.S. Department of
Health and Human Services 26
Additional material submitted for the record:
Leavitt, Hon. Michael O., Secretary, U.S. Department of
Health and Human Services, response for the record 102
A REVIEW OF THE ADMINISTRATION'S FY2007
HEALTH CARE PRIORITIES
WEDNESDAY, FEBRUARY 15, 2006
HOUSE OF REPRESENTATIVES,
COMMITTEE ON ENERGY AND COMMERCE,
Washington, DC.
The committee met, pursuant to notice, at 2:00 p.m., in Room
2123 of the Rayburn House Office Building, Hon. Joe Barton
[chairman] presiding.
Members present: Representatives Hall, Bilirakis, Upton,
Stearns, Gillmor, Deal, Whitfield, Norwood, Shimkus, Wilson,
Fossella, Radanovich, Walden, Terry, Ferguson, Otter, Murphy,
Burgess, Blackburn, Dingell, Waxman, Markey, Pallone, Brown,
Rush, Eshoo, Stupak, Engel, Wynn, Strickland, DeGette, Capps,
Allen, Schakowsky, Solis, Gonzalez, Inslee, Baldwin, and Barton.
Staff present: Chuck Clapton, Chief Health Counsel; Melissa
Bartlett, Counsel; Ryan Long, Professional Staff Member; Nandan
Kenkeremath, Counsel; Bill O'Brien, Research Analyst; David
Rosenfeld, Counsel; Brandon Clark, Policy Coordinator; Chad
Grant, Legislative Clerk; John Ford, Minority Counsel; Chris
Knauer, Minority Investigator; Purvee Kempf, Minority Counsel;
Amy Hall, Minority Health Professional Staff Member; Bridgett
Taylor, Minority Health Professional Staff Member; Jessica
McNiece, Minority Research Assistant; and Jonathan Brater,
Minority Staff Assistant.
CHAIRMAN BARTON. The committee will come to order. The
chair recognizes himself for a five minute opening statement and
then we will recognize Mr. Dingell for a five minute opening
statement. Then all the members who wish to make an opening
statement will be recognized for one minute. Let us see as I set the
clock.
Good afternoon, I want to begin by welcoming the Secretary of
Health and Human Services, the Honorable Michael Leavitt, to the
Energy and Commerce Committee. We look forward to working
with you this year and we look forward to hearing from you today
about the Administration's fiscal year 2007 health care priorities
budget. I want to thank you for your assistance in developing the
recent reform package that we put in place for the Medicaid
Program. As a former governor, you understand and appreciate the
need to improve this program.
Through the passage of the Deficit Reduction Act, we are
beginning to sustain Medicaid for those people who most often
need the health care, and to get good health care through good jobs
in a thriving economy instead of a Government welfare program.
Reforms that we have adopted recently are beginning to rescue the
program from the threat of financial collapse that has drug the
program down over the last 10 to 15 years. We look forward to
working with you in the future to implement this program and also
to working with the governors of the 50 States to implement the
program.
I want to highlight some of the changes in the law that has not
yet received the public attention that they deserve. According to
the Congressional Budget Office, 115,000 disabled children
covered by the Family Opportunity Act will receive improved
health care services as a result of the recently passed Deficit
Reduction Act. The new law will provide access to new home and
community based care to 120,000 additional individuals who will
facilitate 100,000 nursing home residents to return to their
communities through the Administration's Money Follows the
Person Administration Program. These are the true results of
Medicaid reform. Better access for better care for those in our
society who need our assistance.
There is still much to do to improve long-term health care
service delivery and financing, as well as to promote Medicaid
managed care. I have received your proposals regarding additional
improvements to the Medicaid program. I look forward to
working with you this year on some of those programs.
This year, the Secretary and the Administration will also begin
to implement the Medicare prescription drug benefit. Making this
program succeed is a high priority of yours; it is a high priority of
this committee that I chair. Since it began, critics have tried to
make patients believe that they are not smart enough to understand
the new Medicare drug benefit, that it would provide inadequate
coverage, and that signing up is not worth their time because it
cannot save them any money. The critics are wrong about this.
They were wrong when they complained about the Medicare
prescription drug card. They were wrong when they said nobody
would offer any insurance plan, and they are wrong now. Some
sense political advantage in condemning the program and others
cannot bring themselves to admit that free markets actually work.
Transparency in competition will drive down prices and provide
lower costs to consumers. Even if the critics do not get it, the
Medicare beneficiaries certainly appear to be getting it. That is
why over 3.6 million Medicare beneficiaries have already signed
up for the new benefit. You told me earlier today that there are
close to 24 million Americans that have been enrolled in the
program through one means or another, and enrollment is
increasing at approximately 250,000 people per week. That
sounds like a success story to me. If you add that to the fact that
the premium which we estimated was going to be $37 a month is
now down to an average of $27 a month, that appears to me again
to be a successful program.
This is a huge undertaking and there are going to be glitches.
My goal is the same as yours, get rid of those glitches. The
committee is going to work closely with you and with Dr. Mark
McClellan at CMS to get these glitches noticed, number one, and
solved, number two. We will have the first of what will probably
be several hearings on that specific topic on March the 1st when
Dr. McClellan is going to testify before the Health Subcommittee.
I expect at that hearing that we will ask him some very direct
questions about where the problems are and what is being done or
has been done to fix those problems.
Another high priority for this committee this year is going to be
the reauthorization of the National Institutes of Health and its
related programs. I want to restate my deep commitment to
reauthorizing the NIH and would ask your assistance in working
out the technical details so that we can enact this long overdue
legislation. In addition, this committee needs to authorize the
Ryan White Care Act. I believe that funding unauthorized
programs is not a responsible practice and I anticipate that the
committee will work to reauthorize that program this year.
I also intend to work with you and your agency on ways to
continue to reform Medicare reimbursement and particularly the
focus on position payment reform. In order to preserve access to
Medicare services for future generations, we must look at how we
are spending our Medicare dollars today and what the incentives
are to our physician community to continue to provide quality
health programs and care for our senior citizens. Another priority
of the committee is going to be to work with you and your agency
on the proposals outlined in the Administration's budget to provide
consumers with greater access to comparative price and quality
data about their health care providers. I could go on but my time
has expired.
Welcome to the committee and we look forward to your
testimony and the questions that follow it as soon as every member
has been given a chance to make an opening statement. With that,
I want to recognize the distinguished Ranking Member of the
committee and Dean of the House that has served the longest
continuous service in the House of Representatives, the Honorable
John Dingell of Michigan.
[The prepared statement of Hon. Joe Barton follows:]
PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN,
COMMITTEE ON ENERGY AND COMMERCE
Good afternoon. Let me begin by welcoming Secretary
Michael Leavitt today to the Energy & Commerce Committee. We
look forward to hearing him testify about the Administration's
Fiscal Year 2007 Health Care Priorities.
First, Mr. Secretary, I want to thank you for your assistance in
developing the important reforms we put into place for the
Medicaid program starting this year. As a former governor
yourself, you understood and appreciated the need to improve this
program. Through passage of the Deficit Reduction Act, we will
sustain Medicaid for those people who often need health care the
most and can afford it the least. I want many more Americans to
get their health care through good jobs in a thriving economy
instead of from a government welfare program, but we will always
need Medicaid to help the poor and disadvantaged. The reforms
we adopted to rescue the program from the threat of financial
collapse are the same ones that Democratic and Republican
governors all requested. I look forward to working with you to see
that the governors get the tools they need to better manage the
program and deliver its benefits to the poor of their states.
I want to briefly highlight at least some of the changes in the
law that have not recently received the public attention that they
deserve. According to the Congressional Budget Office, 115,000
disabled children covered by the Family Opportunity Act will
receive improved health care services. The new law will provide
access to new home and community based care to 120,000
individuals; and it will facilitate 100,000 nursing home residents to
return to their communities through the Administration's Money
Follows the Person Demonstration. These are the true results of
Medicaid reform -better access to better care for those who most
need our assistance.
There is still much to be done to improve long-term care
service delivery and financing as well as to promote Medicaid
managed care. I have received the Administration's proposals
regarding additional improvement to the Medicaid program and I
look forward to working with you this year on them.
This year the Secretary and the Administration also are
required to administer the new Medicare prescription drug benefit.
Making this program succeed is a high priority of yours, and it is a
high priority of mine, too.
Since it began, critics have tried to make patients believe that
they are not smart enough to understand the new Medicare drug
benefit, that it provides inadequate coverage, and that signing up
isn't worth their time because it cannot possible save them a dime.
The critics are simply wrong. They were wrong when they
complained about the Medicare prescription drug card. They were
wrong when they said nobody would offer any insurance plans.
And they are wrong now.
Some sense political advantage in condemning the program,
and others can't bring themselves to admit that free markets,
transparency and competition will drive down prices and provide
lower costs to consumers. Even if the critics don't get it, Medicare
beneficiaries certainly do. That is why over 3.6 Million Medicare
beneficiaries have already signed up for the new benefit. That is
also why the premiums that these beneficiaries are paying have
dropped from the initial estimate of $37 down to an average of $25
per month.
The implementation of this new drug benefit was a huge
undertaking, and it has had its share of glitches. My goal is the
same as yours: Get rid of the glitches. The Committee will work
closely with the Secretary and Dr. Mark McClellan at C-M-S to get
problems noticed, examined and solved, and to do it all sooner
instead of later. We will have the first of what will likely be
several hearings on this topic on March 1st, when Dr. McClellan
will testify before the Health subcommittee. I expect that we ask
him very direct questions about where the problems have been and
what C-M-S is doing to fix them. The Energy & Commerce
Committee and its chairman are committed to doing whatever it
takes to make sure this program provides the benefits that
Medicare beneficiaries expect and deserve.
Another high priority for the Committee will be the
reauthorization of the National Institutes of Health (NIH) and
related programs. I want to restate my deep commitment to
reauthorizing the NIH and would ask for the Secretary's assistance
in working out the technical details so that we can enact this long
overdue legislation. In addition, the authorization for the Ryan
White CARE Act has now lapsed. I believe that funding
unauthorized programs is not a responsible practice, and I
anticipate that the Committee will work to reauthorize these
programs this year.
I also intend to work with you this year on ways to reform
Medicare reimbursement, and particularly focus on physician
payment reform. In order to preserve access to Medicare services
for future generations, we must look at how we are spending our
Medicare dollars today and what are the incentives for providing
quality health care.
Another top priority of the Committee will be to work with you
on the proposals outlined in the Administration's budget to provide
consumers with greater access to comparative price and quality
data about their health care providers. I believe that with the
development of health savings accounts and similar initiatives that
encourage patients to become consumers, we have the potential to
revolutionize the delivery of health care in this country. If these
models are to succeed, however, we absolutely must be able to
give patients the tools that they need to become smarter
consumers.
As Chairman of this committee, I plan to work with President
Bush, Secretary Leavitt, Members of Congress, and our health care
colleagues to work to ensure our citizens continue to have access
to the best health care in the world. Thank you again, Mr.
Secretary, for appearing here today. I look forward to hearing your
testimony.
MR. DINGELL. Thank you, Mr. Chairman.
Good afternoon, Mr. Secretary.
Forty-six million Americans are uninsured. Six million more
Americans have become uninsured since President Bush took
office. The public health infrastructure and all of its programs are
limping. The President's Budget moves us in the wrong direction.
After signing into law reconciliation legislation with $28
billion in cuts to Medicaid over the next ten years, the President
has returned with a fiscal year 2007 budget that makes another $42
billion in cuts to a program that provides health insurance for more
than 58 million Americans. The Congressional Budget Office
already documented that the first round of cuts would cause
thousands to lose coverage each year. These additional cuts will
likely have that same effect on thousands more.
Second, the Administration is proposing billions in tax breaks
to encourage individuals and families to move out of decent
employer-sponsored coverage into high-deductible health plans in
the individual insurance market. For a "mere" $156 billion a year
we will have a program but will erode employer coverage,
discriminate against the sick, provide little benefit to those of
modest means, and increase the deficit.
Third, the Medicare budget again moves in the wrong
direction. The budget fails to include any proposals to fix the
documented problems in the Part D--D for disaster--drug benefit.
The budget also fails to include one dime to address the pending
Medicare payment cuts. According to the American Medical
Association, physicians will see payment cuts totaling $102.5
billion in the next seven years. This has been ignored by the
Administration. Likewise, the budget does not provide any of the
MedPAC recommended cuts to HMO and private plan payments
which alone would save $50 billion over that same time. Instead,
it proposed $105 billion in cuts over the next 10 years to hospitals,
skilled nursing home facilities, and other providers all of which are
vital parts of the Medicare's Fee-for-Service Program that enrolls
the vast majority of seniors today.
The President also proposes another increase in Part B
premium for beneficiaries, the third premium increase brought
forward by Republicans since 2003. The budget also proposes an
automatic cut in provider payments at any time general revenue is
funding more than 45 percent of the program.
Fourth, the Centers for Disease Control and Prevention, the
National Institutes of Health, and the Health Resources and
Services Administration, the Food and Drug Administration, and
other Public Health Services agencies all play an important role in
the protection of public health, yet they get the back of the
Administration's fiscal hand in this budget.
The Food and Drug Administration is supposed to protect us
every day from bad food, unsafe pharmaceuticals, and other
dangers of this sort. The budget does not give us enough to protect
against counterfeit drugs, adulterated food, or unsafe medical
devices. The budget does not do enough to support people
training, equipment, and facilities that we rely on to protect our
homeland from public health emergencies that are caused by man
or nature.
The budget does not do enough to support the discovery of new
and improved treatments and cures for cancer, diabetes, stroke, and
Alzheimer's, and other diseases that afflict so many of our
Americans. In this budget, the National Institutes of Health will
sponsor less research this year than it did last year. Clearly that is
wrong. The community health centers remain under funded, as do
the other health safety net public health programs.
Finally, the Administration is missing in action concerning the
catastrophic healthcare situation facing the greater New Orleans
region still hurting from Hurricane Katrina. Simply put, almost six
months after the storm, with billions appropriated for recovery
efforts, thousands of Americans are now receiving healthcare
services in such facilities as tents and a city zoo. Americans
deserve better from this budget. They expect better. And I hope
we are able to get it for them.
Thank you, Mr. Chairman.
CHAIRMAN BARTON. Thank you, Mr. Dingell.
Mr. Upton from Michigan for one minute as soon as I get the
clock set.
MR. UPTON. Thank you, Mr. Chairman.
I will use my time early here. Thanks for convening today's
hearing, and I welcome the Secretary to be with us for sure.
I have to say that I know that putting together the HHS budget
proposal must be a daunting one and some would say thankless
task with many competing pressures and imperatives facing our
country today and the difficult choices that obviously have to be
made.
There are some very wise investment decisions reflected in the
President's Budget. I was particularly encouraged by the proposal
to provide a $55 million increase in funding for the Office of the
National Coordinator for Health Information Technology to spur
the widespread use of electronic medical records and other forms
of Health IT. I am strongly committed to that goal because of the
promise that Health IT has to substantially improve the quality,
efficiency, and cost effectiveness of our Nation's health care
delivery system. A recent Rand study found the widespread use of
Health IT would save an estimated $168 billion a year, B as in big,
money that can be reinvested to further strengthen our delivery
system.
Obviously, I have some questions about the tough decisions
you had to make related to the NIH budget and CDC budget and I
look forward to your answers this afternoon.
I yield back the balance of my time.
CHAIRMAN BARTON. We thank the gentleman.
The gentleman from California, Mr. Waxman.
MR. WAXMAN. Thank you, Mr. Chairman.
Mr. Secretary, good to see you. Unfortunately, I am not
looking forward to your presentation because I think the budget
that you are presenting to us is not a good budget. After pushing
through policies in the Deficit Reduction bill that took away
protections for seniors and children and people with disabilities all
in the name of helping States meet the financial burden of
Medicaid, now the Administration brings us a budget that shirks
massive cost onto the States. The agenda is clear, push the cost
onto the States and let the States shift them onto the beneficiaries
and once again we ask the least able to bear the burden.
We have 46 million uninsured, yet this budget cuts support for
Medicaid. It undermines the strength of basic Medicare. It fails to
address the difficult problems that have become glaringly apparent
in the Prescription Drug Program. It endorses massive raids on the
public treasury with tax breaks for health savings accounts that
undermine employer base coverage which slashes funds for health
care programs at work. It shortchanges NIH in its life saving
research. It cuts funds for State programs that provide for child
immunizations.
I only have a minute to tell you a few of the things I dislike
about this budget but I am always pleased to see you.
CHAIRMAN BARTON. Thank you.
The Health Subcommittee Chairman, Mr. Deal of Georgia.
MR. DEAL. Thank you, Mr. Chairman.
Mr. Secretary, I want to thank you for your superb service in
helping all of us as we work with the Deficit Reduction Act. You
were exemplary as was your staff. You are the kind of public
servant that I think all of us take pride in acknowledging your
service and it has been a difficult task.
I know that some of the questions today may evolve around the
Medicare Part D and for the benefit of my colleagues, I would
simply point out that we are going to have a full hearing on that
subject on March the 1st. Dr. McClellan is scheduled to testify.
We will also have representatives from the insurance community,
representatives from the pharmacy community, as well as perhaps
representatives from the constituent base itself to testify at that
hearing. And I think that will amplify many of the questions that
perhaps will surface today and we all look forward to that hearing.
Once again, I thank you for being here today and I look
forward to your testimony.
I yield back, Mr. Chairman.
CHAIRMAN BARTON. We thank the gentleman from Georgia.
Does the gentleman from New Jersey wish to make an opening
statement, Mr. Pallone?
MR. PALLONE. Thank you, Mr. Chairman for holding this
hearing.
The priorities laid out in the President's Budget are
exceedingly misguided in my opinion and prove yet again that
when it comes to health care, Republicans still do not get it. The
President's proposal once more puts Medicare and Medicaid on the
chopping block, makes radical changes to our health insurance
market, and eliminates programs that provide critical health
services to those in need. At the same time, the President has
proposed $285 billion in tax cuts that largely benefit the highest of
earners. And make no doubt about it, if enacted, this budget will
leave gaping holes in our Nation's social safety net and endanger
our most vulnerable citizens while further enriching the wealthiest
Americans. Once you break through the President's rhetoric, it
becomes clear that the only health care priority for this
Administration is to divest itself of any responsibility to ensure
every American has access to affordable and quality health care.
Thank you, Mr. Chairman.
CHAIRMAN BARTON. I thank the gentleman from New Jersey.
The Chairman of the Oversight and Investigations
Subcommittee, Mr. Whitfield of Kentucky.
MR. WHITFIELD. Mr. Chairman, I will waive.
CHAIRMAN BARTON. Okay, Mr. Norwood of Georgia.
MR. NORWOOD. Thank you very much, Mr. Chairman, and I
will be very brief.
Secretary Leavitt, we are all very pleased and proud of you and
appreciate all the hard work you have. I believe you have probably
one of right now the hardest jobs in Washington, D.C., between the
Avian Flu and dealing with the Medicaid and Medicare and all that
and I thank you for the way in which you have handled it and
handled yourself. I look forward to your testimony.
CHAIRMAN BARTON. The Ranking Member of the Health
Subcommittee, Mr. Brown of Ohio.
MR. BROWN. Thank you, Mr. Chairman.
Mr. Secretary, I know you have strongly held views and are
exceptionally dedicated to your job. We thank you for that.
I wish I could comment the Administration's stewardship
equally commend over our health care system. First, they write a
prescription drug law that bypassed the popular reliable and
efficient insurance program we call Medicare in favor of complete
and utter chaos. The drug industry wanted private drug plans. The
privatization zealots wanted private drug plans so Medicare
beneficiaries were forced into private drug plans. Medicare
beneficiaries were simply an afterthought. Then the
Administration writes a budget reconciliation bill that takes
medically necessary health care away from the poor, the sick, and
the elderly while preserving billions in overpayments, not just
payments, but overpayments to HMOs. That is not compassion, it
is not conservative, it is negligent and it is fiscally corrupt. Now
the Administration proposes a budget that turns our health care
system into a country club where the healthy and wealthy get tax
breaks, the poor and sick can get in line at the free clinic. Whether
it is the drug bill, the reconciliation package, or the President's
Budget, it is clear that the wellbeing of everyday Americans carries
no weight with Republican leadership.
Mr. Chairman.
CHAIRMAN BARTON. I thank the gentleman.
The chair notes the presence of Dr. Gingrey, a visitor to the
committee and Member of the full House. We welcome him.
The chair asks Mr. Ferguson of New Jersey if he wishes to
make an opening statement.
MR. FERGUSON. I do, thanks, Mr. Chairman.
Mr. Secretary, thank you again for being here. We welcome
you and we certainly appreciate your service. I know how hard
you have worked on these implementation issues with Part D. You
have been traveling the entire country. You have been working
tirelessly and we thank you very much for those efforts.
I have two quick points of interest that I want to just raise. One
is how the budget treats pandemic preparedness. We continue to
see reports of Asia and Europe about the spread of Avian Flu.
Thankfully it has been limited to birds and a few human cases have
been found primarily are people who handle fowl. But I know you
would agree, Mr. Secretary, that it remains a matter of time before
this or some other pandemic strain mutates and it is spread from
person to person. I am very interested and concerned about how
the requested funds will be spent for combating the flu and the
spread of the flu.
I also want to just raise a second issue about a new dual
eligible low income subsidy access problem on the horizon for
Medicare Part D, specifically for people who need vaccines. New
vaccines will now be covered under Part D which may create
problems for the coverage. Given that vaccines are largely
administered in physician's offices and many vaccines need special
storage requirements, beneficiaries in most cases will not be able
to purchase them are regional pharmacies like mostly all other Part
D covered drugs. Currently the guidance given requires the
beneficiaries to pay the charges out of pocket at the physician's
office and then somehow seek reimbursement from their drug plan.
In effect, their co-pay protections are not relevant or workable at
this time.
CHAIRMAN BARTON. The gentleman's time has expired.
MR. FERGUSON. Thank you, Mr. Chairman.
CHAIRMAN BARTON. All right, the gentleman from Illinois,
Mr. Rush.
MR. RUSH. Thank you, Mr. Chairman.
Mr. Chairman, last year's proponents of the budget touted the
cost of Medicaid and other low income programs as "reform."
Last year, I asked the question why is the majority for "reform"
always focused on programs that affect the neediest, most
vulnerable members of our society. No doubt this year with this
budget and the billions of dollars in cuts from Medicaid, Medicare,
and other social programs the Administration will similarly
characterize these funding cuts as "reforms." And so like last year,
I again ask the question, why is it then when it comes to reform,
this Administration always wants to reform safety net programs
and other low income initiatives that protect the poor, the elderly,
the disabled, and our children? Why aren't any reforms directed
towards wasteful programs and initiatives that benefit the wealthy
and the powerful?
Mr. Chairman, I do welcome Secretary Leavitt to this
committee.
CHAIRMAN BARTON. We thank you, Mr. Rush.
The gentleman from Idaho.
MR. OTTER. Mr. Chairman, I waive my time and submit my
statement for the record.
[The prepared statement of Hon. C.L. "Butch" Otter follows:]
THE PREPARED STATEMENT OF THE HON. C.L. "BUTCH" OTTER, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF IDAHO
Thank you, Secretary Leavitt, for joining us today to discuss
the direction of healthcare in this country for the upcoming fiscal
year. I'm glad that we have the opportunity to hear from you about
the priorities that the Administration has set for this year and to
share with you those areas which are particularly important to us.
Idahoans are overwhelmingly concerned with the high cost of
health insurance and rising number of people who do not have
healthcare coverage. This issue invariably comes up nearly every
time I talk with a constituent, whether he or she is a small business
owner, a religious volunteer, a health care worker, or a concerned
parent. They share with me their alarm over the growing cost of
healthcare and their fear that they and those they love will be
unable to afford or choose the care that they need.
Healthcare issues are extremely complex, and the cost of health
insurance plays a major role in the high levels of uninsured in this
country. We must look for innovative solutions to this problem,
and I am pleased at the President's interest in further developing
Health Savings Account choices for Americans. The creation of
tax-free HSAs continues to have a profound impact on our
healthcare industry, allowing Americans to have more control over
their health care and providing coverage to those who might not
otherwise have access to a good insurance policy. As an advocate
of personal responsibility and giving individuals more power to
make the best healthcare choices for themselves, I wholeheartedly
support the expansion of HSAs into government healthcare
programs like Medicare and Medicaid.
In addition, I greatly support the President's proposals aimed at
encouraging individuals to purchase health insurance. As a
businessman, I was able to deduct 100 percent of what it cost me to
provide health insurance for my employees. Yet the law currently
prohibits a single working mother without an employer-sponsored
health plan from doing the same. We need to work to create an
environment in which health insurance is more affordable, and
extending tax benefits to individuals for the purchase of health
insurance or a health savings account is a big step in the right
direction.
Secretary Leavitt, I look forward to hearing about these
proposals in more detail and hope to work with you to ensure that
quality and affordable health coverage options are available to
people in my state.
CHAIRMAN BARTON. All right, the gentleman from Texas, Dr.
Burgess.
MR. BURGESS. Thank you, Mr. Chairman.
I do have a statement I will submit for the record but a few
points I want to make in the minute I have and I agree with you,
Mr. Secretary, these are important investments for the future. I am
a big believer in consumer oriented, consumer directed health
insurance, and I believe there is no greater portability than
allowing someone to own their own policy. But in order for
consumers to make accurate decisions in regard to cost, price, and
quality, we are going to have to increase the transparency in the
medical system in this country. Health information technology,
something that you have championed and I do agree with, it has
taken a long time to get that program up and running and it will
cost significant dollars but I support that effort. I would urge you,
though, we need to keep our best and brightest physicians involved
in the game, particularly in Medicare, if this system is to pay the
dividends we expect it to. The same could be said for pay for
performance. We have got to find a way to keep physicians my
age and your age in the system and providing for our patients.
These are the best trained, the most experienced physicians. They
are leaving in droves right now because of reimbursement.
Finally, I just have to say as far as the Gulf Coast is concerned,
I got a Blackberry earlier today about the reopening of the HCA
Tulane Hospital. Mayor Ray Nagin asked them what was in their
coffee. I do not know what you are taking at Tulane but I want
some of that. Mr. Secretary, it is called the private sector. It is
called American ingenuity and investment and it works every time
it is tried.
CHAIRMAN BARTON. The gentlelady from California, Mrs.
Eshoo.
MS. ESHOO. Thank you, Mr. Chairman. I hope you are taking
good care of yourself.
CHAIRMAN BARTON. I am, I lost about 18 pounds.
MS. ESHOO. Good for you. Well, continue doing that. We
want you to be well and stay well.
CHAIRMAN BARTON. I recommend highly fat-free crackers and
every form of chicken known to man.
MS. ESHOO. Good. That is great.
Well with that, welcome Mr. Secretary. It is good to have you
before the committee today and I am sure that we are going to have
many other discussions as well this year.
First, along with many of my colleagues on the committee, I
have deep concerns about many, many parts of the President's
Budget. I think that there are some opportunities that are really
lost that the President does not speak to but I hope that the
Congress and especially this committee will rise to the occasion
and hopefully with your cooperation on a number of fronts.
One of them, one of the spots in the budget where I do find
some good news is that there is support for personalized medicine
and in the role genetics will play in health care. And to be specific
in that area, the statements of the Administration's policy on S.
306, the Genetic Information Non-Discrimination Act of 2005. To
my colleagues, that passed unanimously in the Senate and the
Administration obviously supports it and I thank you for that, Mr.
Secretary.
I hope that you will be a positive influence--
CHAIRMAN BARTON. The gentlelady's time has expired.
MS. ESHOO. If I might just finish this statement, this sentence.
I hope that you will be a positive influence on members of this
committee to support that legislation, which is H.R. 1227 here in
the House, to accomplish it. Thank you.
CHAIRMAN BARTON. The gentlelady from Tennessee, Mrs.
Blackburn.
MS. BLACKBURN. Thank you, Mr. Chairman.
You know, I think it is unfortunate that some of our colleagues
today are trying to claim that budget challenges are related to tax
reductions from '03 and not out of control or unaccountable
Washington spending. So just for the record, according to the
CBO in fiscal year 2005, the Federal Government received more
revenue than in any other year. Revenue has increased $274
billion from '04 to '05. The tax reductions by this Congress have
not crippled Federal programs; they have indeed provided more
money for Federal programs.
And I do not agree with everything in the President's Budget.
We must continue working to reform and renew some of the
entitlement programs that are restraining and work on restraining
our Federal spending. And I appreciate the budget steps in that
direction and I think it is unfair to the American people to hide the
fact that our existing health and entitlement programs are on a
sustainable path because they are not, they are on an unsustainable
path and I thank the Chairman and welcome the Secretary and look
forward to working with you on the situation.
CHAIRMAN BARTON. I thank the gentlelady.
The gentleman from New York City, Mr. Engel.
MR. ENGEL. Thank you, Mr. Chairman and glad you are
looking so well and you see, you can eat lots of chicken and not
worry about bird flu.
I welcome Mr. Secretary and thank you for coming. I also
want to associate myself with those on this side of the aisle who
are looking at the budget and feel very badly about it. I feel that
we are going in the wrong direction in terms of providing health
care. The uninsured are becoming more and more, and cuts to the
needy and working people are growing with leaps and bounds and
I think this is just a very, very bad direction.
With all due respect to the gentlewoman who just spoke before
me, it is clear to us that the tax cuts are the reason why the poor
have to suffer in terms of getting less and less health care. This
Administration has made its priority the priority for tax cuts and
war and therefore there is nothing left to benefit the American
people in terms of health care, in terms of education, in terms of
childcare, and all the things that the American people know. So I
believe that the priority of the Administration ought to change,
ought to be considered with health care. More for health care and
less for tax cuts. And while the tax cuts are not the source of the
entire problem, it is clear that there is so much more revenue
coming in--
CHAIRMAN BARTON. The gentleman's time has expired.
MR. ENGEL. --therefore we have these widening deficits that
are going sky high and crazy. That has to stop.
Thank you, Mr. Chairman.
CHAIRMAN BARTON. The gentleman from Florida, Mr.
Stearns.
MR. STEARNS. Thank you, Mr. Chairman.
I am delighted to have the Secretary here and we are all
anxious to hear from him.
I appreciate your staff working with my staff over the past few
years on a Cash and Counseling delivery system that we provided
that came from Governor Jeb Bush and is used in Medicaid and we
have incorporated into Medicare to provide beneficiaries with
flexibility and self design of their own personal care. And I am
pleased to see Cash and Counseling provision in major pieces of
legislation this committee has moved, in first the demonstration in
Medicare, and then this year in the Deficit Reduction Act in
Medicaid where we made it a permanent option for Governors.
Mr. Secretary, in the short time I have left, I just want to talk to
you a bit about the NIH budget. I support Chairman Barton's
plans for the committee to reauthorize the NIH to make it flexible
and more accountable for our future needs. I think we all have to
say to ourselves we doubled NIH so I think we better stop just a
second and take a breath and say, "Are Americans getting a good
return on investment here and does the director have the authority
it needs to manage the program as it should be?"
So I just leave you with that thought and I thank you, Mr.
Chairman.
CHAIRMAN BARTON. Thank you.
The gentleman from Texas, Mr. Green.
MR. GREEN. Thank you, Mr. Chairman for you and Mr.
Dingell for holding this hearing on the HHS budget proposal and I
would like to welcome the Secretary.
My concern I guess is the health savings account. It seems like
HHS has worked for only small portion by 46 million uninsured
but they cannot reduce our uninsured significantly. They worked
for a significant segment of our population and I notice in the poll
a week ago that the number one domestic concern people have is
health care.
One program I do agree with the Administration on and I--we
support the Health Community Centers Program. I applaud the
Administration for increasing funding for health centers and have
proven so effective in delivering primary and preventative care to
uninsured and underinsured. I am disappointed that HCAP
Program which helps put together collaboratives to develop these
health centers are again not in the budget but I hope to be able to
work with the Appropriations Committee and the House and
Senate to do that. I am concerned, like a lot of folks are, about the
deep cuts in children's, graduate, and medical education and health
preventions but I am looking forward to working with the
appropriators to restore some of the funding.
But Mr. Secretary, I particularly want to thank you and Dr.
McClellan for coming to Houston shortly after Labor Day. I know
you were there on Labor Day and with the resources from HHS
and the Public Health Service and we had a couple of hundred
thousand folks, evacuees and providing the service and I look
forward to working with you on our uninsured problem.
Thank you, Mr. Chairman.
CHAIRMAN BARTON. Thank you.
The gentleman from Texas, Mr. Hall.
MR. HALL. I was just reading the statement for the first time
that I am going to make here so I will read it the first time, Mike,
to you if you do not mind.
I do thank you for coming. The health care spending, of
course, is one of the really major areas, one of the largest areas of
the Federal budget and it is also the most important to citizens of
our country. The money that we spend directly affects millions of
people and it is important that America remain the leader in health
care research and innovation for years to come. And as we all
know, health care spending is only projected to increase in the
future. There is just no question there is no way around that. We
need to find ways to be fiscally responsible with our health care
spending while delivering better outcomes. I know you are
working toward that too and we have had meetings with you and
you have been very generous with your time with us, and with this
committee. So we are all on one road, and to this end I am very
pleased to see that the President's Budget contains an increase for
health information technology.
There are a lot of inefficiencies in the system that need to be
addressed that more people can be covered with fewer resources.
A recent study by the Rand Corporation estimated that if we did
more to adopt health information technologies then we could save
$77 billion a year and we would also deliver better health
outcomes from reduced areas. As I understand as HHS and
NICHT are partnering to develop common standards to allow
systems to work together seamlessly while protecting patient
privacy.
CHAIRMAN BARTON. The gentleman's time has expired.
MR. HALL. And I applaud these efforts and I yield back my
time.
CHAIRMAN BARTON. The gentleman yields back.
MR. HALL. Good to see you.
CHAIRMAN BARTON. Ms. Capps of California.
MS. DEGETTE. Ms. DeGette. I am going to waive my opening
statement.
CHAIRMAN BARTON. Okay. I was going in order of
appearance and I saw you come in after the gavel. Did you come
in and leave and come back? Okay, then the gentlelady from
Colorado is recognized to waive her opening statement.
MS. DEGETTE. I waive my opening statement.
CHAIRMAN BARTON. All right. The gentlelady is recognized,
Mrs. Capps.
MS. CAPPS. Mr. Chairman, thank you for holding this hearing.
I am going to submit my opening statement for the record and
welcome the Secretary. I look forward to the discussion period.
[The prepared statement of Hon. Lois Capps follows:]
THE PREPARED STATEMENT OF THE LOIS CAPPS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
Thank you Mr. Chairman.
I am glad that we are holding this hearing today in order to
discuss our HHS budget priorities for FY2007.
Unfortunately, though, the President's proposals reflect a lack
of real investment for our nation's true current and future health
needs.
NIH is being level-funded, which is essentially a cut. I worry
about the future of medical research if we cannot even keep up the
pace with today's needs, let alone tomorrow's.
The President proposes cutting cancer research, yet we finally
have evidence that our efforts are working and are beginning to see
a declining death rate for cancer.
How can we justify delivering a setback to those efforts?
Nurse education funding is being level-funded, which is also an
essential cut.
Back in 1974, Congress appropriated the equivalent of 609
million in today's dollars for nurse education programs.
And while the Administration is emphasizing preparedness for
pandemic flu and the threat of bioterrorism, it seems to be ignoring
the fact that nurses are first responders and will be critical to those
efforts.
There simply aren't enough nurses now and there certainly
won't be enough in the future if we cut funding from training and
retention programs.
I hope today we can refocus attention to the true priorities of
our public health infrastructure and ensure that we are doing the
absolute best we can to serve America's health needs.
CHAIRMAN BARTON. All right. Seeing no Republicans, oh,
Mr. Murphy of Pennsylvania, do you wish to make an opening
statement?
MR. MURPHY. Real quick, sir, thank you. All I have is one
minute right?
CHAIRMAN BARTON. Yes, sir, you got one minute.
MR. MURPHY. Mr. Chairman, Mr. Secretary, thank you.
We all know we have one of the best health care systems
available with great dedicated folks, but we also recognize that
some of the issues being presented in the President's Budget is also
looking at some reform. When we talk about making reforms here
with such things as health information technology, working on
community health centers, it is important that we are aware of the
idea that these things can save lives by the thousands and save
money by the tens of billions of dollars. What that really means
we have to stop just focusing upon who is paying and we look at
what we are paying for. And I hope though that some of the issues
being addressed today rather than simply reducing care or having
people talk about reducing care, one of the things that we have
done is I am the co-chairman of the Congressional Health Care
Caucus. It has identified over $300 billion of savings that we can
have in the health care arena with reforms and it is not a matter of
reducing care, it is a matter of doing it better and I certainly hope
today in your comments and your continued commitments, Mr.
Secretary, we will continue on those things together. Thank you
very much.
Thank you, Mr. Chairman.
CHAIRMAN BARTON. Does Mr. Markey wish to make an
opening statement?
MR. MARKEY. I wish to waive.
CHAIRMAN BARTON. Okay. Mr. Allen?
MR. ALLEN. Thank you, Mr. Chairman and welcome Mr.
Secretary.
The Administration's budget continues on a path of
dismantling the health care infrastructure in our country and will
leave more people uninsured and more employers unable to afford
health care coverage for their employees. The Administration
proposes to spend $156 billion over 10 years on a package of
mostly recycled policies that promote health savings accounts and
high deductible health plans. It is an attempt to move people from
shared risk and shared pooling arrangements to fend for
themselves in the more expensive and volatile individual market.
Recent studies indicate that the expansion of HSAs would in
fact increase the number of uninsured and undermine the existing
employer sponsored insurance system. To cut wasteful Federal
spending, this Administration should simply eliminate the well
documented overpayments to Medicare HMO's and insurance
companies and allow the Federal Government to negotiate lower
prices for Medicare prescription drugs. But that agenda I suspect
will have to wait for another Administration.
I thank you for being here.
CHAIRMAN BARTON. Does Mr. Bilirakis wish to make an
opening statement?
MR. BILIRAKIS. No, I will just offer an opening statement into
the record. I waive.
[The prepared statement of Hon. Michael Bilirakis follows:]
THE PREPARED STATEMENT OF THE HON. MICHAEL BILIRAKIS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA
Thank you, Mr. Chairman.
I am pleased that we are here to examine the Administration's
Fiscal Year 2007 budget proposal for the Department of Health
and Human Services.
I am eager to hear your insights, Mr. Secretary, on the health
care provisions in the Administration's budget proposal. I am
especially interested in learning how HHS continues to address
problems experienced by Medicare beneficiaries enrolling in the
prescription drug benefit.
This new benefit represents the most significant change to
Medicare since the program was created. I supported it then, as I
do now, because I believe that it will help provide much needed
assistance to many Medicare beneficiaries, especially the poorest,
sickest, and those with the highest drug costs.
And while those of us who helped create it could reasonably
expect there to be certain administrative and management
challenges associated with its implementation, I must tell you that I
have heard from constituents who have told me that they have had
trouble getting the prescriptions they need.
I am eager to hear what steps HHS has taken to ensure that
seniors who sign-up for prescription drug coverage get the
medicine they need, when they need it, at the proper price. I am
hopeful that the problems about which I have heard are being
addressed so that my constituents can obtain affordable
prescription drugs.
I look forward to working with you, Mr. Secretary, and
members of this Committee as we continue to monitor
implementation of the prescription drug benefit and determine how
to meet the health care needs of the American people now and in
the future.
Thank you, Mr. Chairman.
CHAIRMAN BARTON. Does Mr. Walden wish to make an
opening statement?
MR. WALDEN. Mr. Chairman, I just look forward to hearing
the Secretary's remarks.
CHAIRMAN BARTON. Does Mr. Terry wish to make an opening
statement? He waives, too.
All right, Mr. Gonzalez?
MR. GONZALEZ. Waive opening.
CHAIRMAN BARTON. Mr. Inslee?
MR. INSLEE. Waive opening.
CHAIRMAN BARTON. Ms. Baldwin?
MS. BALDWIN. Thank you, Mr. Chairman and Mr. Secretary.
Our Nation is in the midst of a health care crisis. Forty-six
million Americans are uninsured, an additional 16 million are
underinsured. In aggregate, 62 million Americans have either no
insurance, sporadic coverage, or have insurance coverage that
leaves them exposed to high health care costs. This is
unacceptable. But what is even more unacceptable is that the
President's Budget proposes harsh cuts to both Medicare and
Medicaid, programs that actually do provide affordable
comprehensive health care. And it offers a reform proposal that
will make many Americans worse off.
I want to say just a few words about health savings accounts.
In my opinion, the President is proposing to do to health care what
he proposed last year to do to Social Security and that is moving
from a system whose fundamental philosophy is promoting the
common good--recognizing that we are all Americans and we are
all in this together--to a philosophy of each man, woman, and child
for themselves, sink or swim if you can. We must recommit as a
Nation to a fight for the common good including health care for
every American and I believe this budget brings us further from
that goal.
Mr. Chairman, I yield back, thank you.
CHAIRMAN BARTON. The gentlelady yields back.
Mr. Shimkus?
MR. SHIMKUS. Waive.
CHAIRMAN BARTON. Mr. Stupak?
MR. STUPAK. Thank you, Mr. Chairman.
Mr. Secretary, welcome. Briefly, Mr. Secretary looking
through your testimony you did not say anything about New
Orleans. We were down there the 24th through the 26th of January
and health care is dismal if you can even call it that. What I see in
New Orleans is--and the rest of the Gulf Region--is business as
usual. There does not seem to be any urgency to get health care
moving again in New Orleans. I am looking at a newspaper article
right here from the Times Picayune where people are waiting nine
and a half hours to get into emergency rooms. But in our hearing,
their representatives said that the Secretary had a vision of health
care for New Orleans. Hopefully during your oral testimony you
can tell us what that vision is and what do we do to get medical
profession and medicine and health care delivery being done in
New Orleans in the rest of the Gulf Region and a more aggressive
proactive approach my--Secretary, I think would be helpful down
there.
Thank you, Mr. Chairman.
CHAIRMAN BARTON. I thank the gentleman.
The gentleman from Maryland, Mr. Wynn.
MR. WYNN. Thank you, Mr. Chairman.
Welcome Mr. Secretary. Thank you for your work over the
years. Unfortunately I am a little distressed with this budget. First
of all, I note that you do not have a fix for the problems of the
Medicare Prescription Drug Program. Our seniors are confused,
our seniors are actually losing access because of some of the
problems with this program. I do not see anything to address those
concerns.
The second problem I am concerned with is basically the
severe cut $160 billion of Medicaid and Medicare on top of the 50
that was already put in the Deficit Reduction Act. The problem
being that only shifts the problem down to the States. The States
are already strapped and so I see that as very problematic.
But finally the thing I wanted to express concerns about these
health savings accounts. Over and over people said this so-called
cost sharing does not work for the people who need it the most.
The people who are the working poor, the mother with two kids
who does not have insurance or cannot afford insurance, how is
she going to afford a high deductible? That issue was never
addressed in this proposal and so what you have is less usage
because of these--with these health savings accounts and more
long-term costs.
So I think there are a lot or problems with this budget. I hope
you will be able to address some of these issues in the course of
your testimony.
Thank you.
CHAIRMAN BARTON. I thank the gentleman.
I see no other Member present who has not had an opportunity.
The chair asks unanimous consent that all Members not present
have the requisite number of days to put their opening statement in
the record. Without objection, so ordered.
[Additional statements submitted for the record follow:]
THE PREPARED STATEMENT OF THE HON. BARBARA CUBIN, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF WYOMING
Thank you, Mr. Chairman, for holding this timely hearing. I'd
also like to thank Secretary Leavitt for joining us here today. I
realize what a critical time this is for your agency, and I appreciate
you making it a priority to discuss our budget concerns.
As the Secretary has noted, every program is important to
someone, and difficult choices have to be made when it comes to
distinguishing spending priorities. I am a champion of fiscal
discipline, but I cannot endorse the cuts the President has
recommended to rural health care programs.
Among the cuts to rural grant funding, the President proposes
to eliminate the Rural Hospital Flexibility Grants, the Small
Hospital Improvement Program, and the Rural and Community
Access to Emergency Devices programs. His budget also
eliminates the Rural EMS program and essentially eliminates the
Rural Health Outreach Grant Program. In total, the President has
recommended cutting $133 million in rural health dollars. This is
a humble part of the overall Federal budget, but these funds are
critical to states like Wyoming, and the citizens I represent.
While almost 25% of America's population lives in a rural
area, only 10% of America's physicians serve these areas. The
administration has justified these cuts to programs within the
Office of Rural Health Policy, saying this funding is duplicative.
Today, I hope to hear explanation of what other programs are
supposedly filling this need. I would also appreciate being shown
where rural-serving health entities may find support in the
President's Budget. As a Member of the House Rural Health Care
Coalition, I support programs that aide access to quality health care
for rural America, and I will continue to advocate for the funding
necessary to support these programs.
Again, thank you Chairman for calling this hearing, and I
reserve the balance of my time.
THE PREPARED STATEMENT OF THE HON. HILDA L. SOLIS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
<bullet> Thank you Mr. Chairman and good afternoon Secretary
Leavitt.
<bullet> There is no other issue that is of greater concern to my
constituents in East Los Angeles and the San Gabriel
Valley in Los Angeles County than health care.
<bullet> More than 1 out 3 residents in my district lacks health
insurance.
<bullet> As you know, our state and federal governments play a
critical role in helping to ensure that many low-income
families, particularly the young, the elderly, and the sick,
have some sort of access to medical services.
<bullet> That is why I am so troubled by the President's Budget
proposal, which includes deep cuts to Medicare, Medicaid,
the State Children's Health Insurance Program (SCHIP),
and other vital health programs.
<bullet> At a time when 44 million Americans, including 13 million
Latinos, lack health insurance, we should not be cutting
health programs that benefit families that otherwise will not
have any health care.
<bullet> In fact, a recent study by the Congressional Budget Office
(CBO) of the Medicaid cuts in the reconciliation bill found
that sixty percent of those losing coverage due to new
Medicaid premium charges would be children!
<bullet> Our nation's economic health depends on the good health
of its families.
<bullet> I urge the Administration to reevaluate its budget proposal
and the negative impact it would have on the Latino
community and other communities across this country.
<bullet> Thank you, again, Mr. Secretary, for your presence here
today, and I appreciate your attention to these concerns.
THE PREPARED STATEMENT OF THE HON. TED STRICKLAND, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO
Thank your Mr. Chairman.
Mr. Secretary, I have deep concerns that the President's Budget
we have before us today will do more harm than good to the
American people and their ability to access good quality and
affordable health care. This budget would lead to increases in
Medicare premiums, cut funds for Medicare and Medicaid, and
shift more of the cost of health care onto individual consumers
through health savings plans.
This budget devastates rural health care by zeroing out Rural
Hospital Flex Grants and Rural Access to Emergency Devices, like
defibrillators, and cuts state offices of rural health. Hospitals and
patients in my rural district already face unique challenges, and
this budget puts them at a disadvantage. Also worrisome are this
budget's dangerous health tax proposals, which will create greater
obstacles to affordable health care for the elderly, people who are
already sick, and low-income families. In addition, the President's
proposals to expand health savings accounts provide only meager
hope, at best, to those of modest income.
And, as you know, the recent budget reconciliation bill
included over $50 billion in cuts to Medicare and Medicaid. Now,
the President's Budget seeks to continue down that dangerous path,
threatening the wellbeing of the most vulnerable in our society by
making $160 billion in new cuts to these programs. Unfortunately,
this budget asks states to bear the brunt of these cuts while failing
to take meaningful steps to control rising health care costs.
I strongly oppose these cuts and am hopeful that the members
of this committee can work together to protect these vital
programs.
Thank You. Mr. Secretary, I look forward to your testimony.
THE PREPARED STATEMENT OF THE HON. HEATHER WILSON, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW MEXICO
Thank you, Mr. Chairman, for holding this hearing today to
review the President's Budget for health care. And thank you,
Secretary Leavitt, for being here today.
I am concerned about many areas in this budget, including
Medicare, rural health programs, health professions programs, and
the National Institutes of Health. But let me focus on two areas:
Medicaid and the Indian Health Service.
Last year Congress made changes in Medicaid that achieved
about $7 billion in savings over five years, changes I did not
support. Now the Administration proposes additional Medicaid
changes yielding an addition $13.5 billion in savings over five
years, without making substantial improvements in the program
that would improve people's health. Most of these savings would
come from administrative changes in areas HHS may not have the
authority to change. These changes include reductions in
Disproportionate Share Hospital payments, rehabilitation services,
and school-base health services: changes rejected by Congress last
year. I am concerned of the impact these changes would have on
providers and services to Medicaid beneficiaries.
We must strengthen and improve Medicaid to make it a better
program for low-income children, pregnant women, disabled, and
elderly Americans. These changes simply fall short and could
actually harm access to health care for these populations.
The administration has also chosen to eliminate the Urban
Indian Health Program, an important program within HIS
providing health care to Indian people living in urban areas. In
Albuquerque, the Urban Indian Health Program provides $1.5
million annually in health care services to the 48,000 urban Indians
living in the Albuquerque area. Two non-profit health
organizations, First Nations Community Healthsource and the
Albuquerque Indian Health Service Dental Clinic, receive grants
from this program to provide services.
We already have shortfalls within HIS, particularly for urban
Indians. Only 1% of the $3.1 billion HIS budget is earmarked for
urban Indian health, while 75% of Indians now live in urban areas.
Now the Administration wants to take away that 1%. The Urban
Indian Health Program is important for the health of urban Indians
in Albuquerque and we must work to strengthen health care for
Indians living in urban areas.
Thank you, Mr. Chairman.
CHAIRMAN BARTON. Mr. Secretary, welcome to the
committee. We look forward to hearing your testimony and then
we are going to have some questions. We are going to recognize
you for such time as you may consume. I am going to set the clock
at 10 minutes but take as much time as you wish. Welcome to the
committee.
STATEMENT OF HONORABLE MICHAEL O. LEAVITT,
SECRETARY, U.S. DEPARTMENT OF HEALTH AND
HUMAN SERVICES
SECRETARY LEAVITT. Thank you, Mr. Chairman.
I have submitted a prepared opening statement. I will briefly
summarize and then be eager to get directly to the questions of the
members.
The budget that has been presented to you today is nearly $700
billion. It is roughly broken into two categories; all of you are
familiar with them. One is entitlement programs, that is to say
decisions that we have made as a country to provide health care
and other important human services to those in our Nation who are
poor, elderly, or disabled. And then there is the discretionary
budget. That would be a large group of programs that upon which
you act each year. We will have an opportunity, I am sure, to talk
about both. I will just comment briefly.
Particularly Medicare is of grave certain to me. It currently
occupies nearly 3.4 percent of our gross domestic product. That is
to say one program is 3.4 percent of every dollar that is generated
in our economy and if it is allowed to continue to grow as it is, by
2040 it will be nearly 8 percent of our entire gross domestic
product. Again, unchanged by 2070, and it will be 14 percent of
our gross domestic product. I do not think there is a person in this
room who believes that that can continue as it is. We will not be
competitive as a Nation. The jobs that are underlying our economy
that ultimately generate the tax revenues that make possible for
Medicare to be paid for and to be a commitment that we make as a
Nation will disappear and the equation will no longer work. And I
just want to acknowledge that. We will have some discussion
about things that could be done in the near term and perhaps in the
long-term but it is an important part of our conversation.
I suspect that much of our discussion today will center around
the discretionary budget. If I may acknowledge that the budget
that I am presenting here today is $1.5 billion less than the '06
budget. This is a period of deficit reduction. As many of you
know, much of my public service was spent as a governor of one
of our States. I was governor during the periods of time when we
had tax revenues sufficient to expand programs. I was the
governor during times when we had difficult periods where we had
to reduce our expenditures so as to balance our budget. And while
this is not a balanced budget, it is clearly consistent with the
President's proposal to reduce the deficit by half by 2009. In
doing that, may I just acknowledge that whenever you are doing a
budget and whenever you are reducing deficits you are faced with
choices between very good options. Everything in this option is
good because someone feels passionately about it and because it
represents something that I feel confident and my heart responds to
it in the same way yours does. There will be disagreement today
with the decisions that we have made, I acknowledge that.
My purpose today is to simply outline for you the rationale that
I used and that was used by the Administration to make these
decisions. If you disagree, obviously that will now go into the
legislative process and that opportunity will present itself. I think
it might be valuable rather than try to enumerate each part of this
very large and complex budget if I were to provide you with a
sense of the philosophy that went behind it, the general guidance
that I gave to those who prepared it under my direction. You will
find, for example, in this budget though there are fewer dollars,
you will find new initiatives. You will find initiatives, for
example, on health information technology or what I refer to as
critical path to personalized medicine. You will find new
initiatives on providing our older Americans and disabled
Americans with a choice to have health care in their homes and
you will find new programs on HIV/AIDS. All of these are very
important new programs. You will see a continued commitment
on the part of the President on community health centers. You will
find that we have represented new dollars here for bioterrorism and
for pandemic flu and for certain high demand highly efficient
programs that we felt simply needed to be nurtured even during the
period of deficit reduction. We have chosen to fund those
programs by looking for dollars within the budget that were one
time dollars that may not have been repeated. We have looked for
programs whose purposes might be found in multiple places and
we have looked for ways to tidy that up and to put it under one
program. You will see that we have used carryover funds in
certain situations. You can in times like this sweep the corners and
find ways in which to accomplish more with less. It is a time that
drives efficiency.
I have also said to my colleagues there are a series of principles
that I would like you to follow as you look at each program. It
might be valuable for you to know what those principles are. I will
likely through the course of our discussion today refer to those
principles when I explain to you why I have made a reduction in a
program that you might not agree with. For example, in many
programs, I found that they tend to approach a problem in a very
general way, whereas there is a specific part of the problem that we
could target. In most cases, the principle is let us target the real
problem, and while we might be brilliant at the general distribution
of funds, let everyone get something, let us focus on the real
problem and target funds.
The second principle is in working to prevent as opposed to
simply pay for after people are sick or after some disruptive
damage has been done. You will see an emphasis placed on
prevention in this budget. You will also see me biasing my
judgments toward the direct delivery of services. You will find
places where there may have been a building program before that I
have in this budget suggested we cannot afford this year, but I do
not want to cut direct services and so we have not invested in
infrastructure to the extent that it would have, in fact, compromised
our ability to provide services to people. You will see a bias on
my part with respect to programs that allow markets or individuals
to make choices, whereas government often might make choices
that were less specific to their needs. I believe that markets and
individuals make choices that government-wide programs often do
not and I think they are better choices.
You will see a substantial emphasis here to invest in new
technology. We are going to talk, I think, later I am sure about
some of the places that HHS funds research. Hard choices needed
to be made there and I concluded that if a grant for example had
run its course and if the research had been concluded, that rather
than continue that grant, we ought to emphasize new investigators.
We ought to find new technologies on which we are simply now
just starting so you will see emphasis on investment there.
HHS is a very large department. I have 27 different operating
divisions that report to the Secretary. It is large, as I said $700
billion. Many of those investments tend to be quite stove piped
rather than look across the department where there is something
happening in other operating divisions and they tend to see them as
separate programs. I try to look across the department which
means in some cases you may find a program that has been
eliminated, but it may be quite well funded in another or it may be
that by putting the program together in A and B we can create a
better program. So you will see an approach that will be far more
department wide as opposed to the stove pipe.
You will also see heavy emphasis on my part on accountability
and being able to measure. In my judgment, if I cannot measure its
benefit, there may be some measurement there but it T's it up in
my mind for very heavy scrutiny. And you will find places where
there may have been good being done, but if I cannot measure it in
a time of deficit reduction, I have just concluded that those were
candidates for reduction. So you will see targeting--you will see
prevention orientation, you will see direct services over
infrastructure. And those are the kinds of principles that I used.
Mr. Chairman, that gives you a broad overview of the way I
have approached this budget. Again, I want to acknowledge that
this is a time for deficit reduction. There will be suggestions I
have made that you will not like and I understand that. I am here
to hear your thoughts and give you mine and the legislative process
will then march forward.
Mr. Chairman?
[The prepared statement of Hon. Michael O. Leavitt follows:]
PREPARED STATEMENT OF THE HON. MICHAEL O. LEAVITT,
SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Good afternoon, Mr. Chairman, Representative Dingell, and
Members of the Committee. I am honored to be here today to
present to you the President's FY 2007 budget for the Department
of Health and Human Services (HHS).
Over the past five years, the Department of Health and Human
Services has worked to make America healthier and safer. Today,
we look forward to building on that record of achievement. For
that is what budgets are - investments in the future. The President
and I are setting out a hopeful agenda for the upcoming fiscal year,
one that strengthens America against potential threats, heeds the
call of compassion, follows wise fiscal stewardship and advances
our Nation's health.
In his January 31st State of the Union Address, the President
stressed that keeping America competitive requires us to be good
stewards of tax dollars. I believe that the President's FY 2007
budget takes important strides forward on national priorities while
keeping us on track to cut the deficit in half by 2009. It protects
the health of Americans against the threats of both bioterrorism
and a possible influenza pandemic; provides care for those most in
need; protects life, family and human dignity; enhances the long-
term health of our citizens; and improves the human condition
around the world. I would like to quickly highlight some key
points of this budget.
We are proposing new initiatives, such as expanded Health
Information Technology and domestic HIV/AIDS testing and
treatment that hold the promise for improving health care for all
Americans. We are continuing funding for high-performing
Presidential initiatives, including Health Centers, Access to
Recovery, bioterrorism and pandemic influenza; and we are also
maintaining effective programs such as Indian Health Services,
Head Start, and NIH medical research.
We are a nation at war. That must not be forgotten. We have
seen the harm that can be caused by a single anthrax-laced letter
and we must be ready to respond to a similar emergency - or
something even worse. To this end, the President's Budget calls
for a four percent increase in bioterrorism spending in FY 2007.
That will bring the total budget up to $4.4 billion, an increase of
$178 million over last year's level.
This increase will enable us to accomplish a number of
important tasks. We will improve our medical surge capacity;
increase the medicines and supplies in the Strategic National
Stockpile; support a mass casualty care initiative; and promote the
advanced development of biodefense countermeasures through
NIH to a stage of development so they can be considered for
procurement under Project BioShield.
We must also continue to prepare against a possible pandemic
influenza outbreak. This budget includes a $2.3 billion allowance
for the second year of the President's Pandemic Influenza plan.
These funds will enable us to meet several important goals,
including providing pandemic influenza vaccine to every man,
woman and child within six months of detection of sustained
human-to-human transmission of a bird flu virus; ensuring access
to enough antiviral treatment courses sufficient for 25 percent of
the U.S. population; and enhancing Federal, state and local as well
as international public health infrastructure and preparedness.
The President's FY 2007 budget also provides more than $350
million for important ongoing pandemic influenza activities such
as safeguarding the Nation's food supply (FDA), global disease
surveillance (CDC), and accelerating the development of vaccines,
drugs and diagnostics (NIH).
The budget includes a new initiative of $188 million to fight
HIV/AIDS. These funds support the objective of testing for three
million additional Americans for HIV/AIDS and providing
treatment for those people who are on state waiting lists for AIDS
medicine. This initiative will enhance ongoing efforts through
HHS that total $16.7 billion for HIV/AIDS research, prevention,
and treatment this year.
Last July, the Administration emphasized five key principles
for reauthorization of the Ryan White CARE Act: (1) serve the
neediest first; (2) focus on life-saving and life-extending services;
(3) increase prevention efforts; (4) increase accountability; and (5)
increase flexibility. The President has made fighting the spread of
HIV/AIDS a top priority of his Administration, and he will
continue to work with Congress to encourage prevention, and the
provision of appropriate care and treatment to those suffering from
the disease. The President's FY2007 budget request for the CARE
Act HIV/AIDS activities is $2.16 billion, an increase of $95
million for several elements of the new domestic HIV/AIDS
initiative. The request will support a comprehensive approach to
address the health needs of persons living with HIV/AIDS,
consistent with the reauthorization principles. The budget also
includes a new authority to increase program flexibility by
allowing the Secretary to transfer up to five percent of funding
provided for each Part of the Ryan White CARE Act to any other
Part.
The budget maintains the President's commitment to the
doubling of NIH, and includes important cross-cutting initiatives
that will move us forward in our battle to treat and prevent disease
- $49 million for the Genes, Environment and Health Initiative and
$113 million for the Director's Roadmap. In addition, it contains
an additional $10 million for the Food and Drug Administration to
lead the way forward in the area of personalized medicine and
improved drug safety.
One of the most important themes in our budget is that it
increases funding for initiatives that are designed to enhance the
health of Americans for a long time to come. For instance, the
President's Budget calls for an increase of nearly $60 million in
the Health Information Technology Initiative. Among other
things, these funds support the development of electronic health
records (to help meet President Bush's goal for most Americans to
have interoperable electronic health records by 2014); consumer
empowerment; chronic care management; and Biosurveillance.
The Budget also includes several initiatives to protect life,
family and human dignity. These include, for example, $100
million in competitive matching grants to States for family
formation and healthy marriage activities in TANF. And it
promotes independence and choice for individuals through
vouchers that increase access to substance abuse treatment.
In the area of entitlements programs, I want to begin by
congratulating you and other Members of Congress for having
successfully enacted many needed reforms by passing the Deficit
Reduction Act (DRA). DRA supports our commitment to
sustainable growth rates in our important Medicare and Medicaid
programs. It also strengthens the Child Support Enforcement
program.
The Deficit Reduction Act also achieves the notable
accomplishment of reauthorizing Temporary Assistance for Needy
Families (TANF), which has operated under a series of short-term
extensions since the program expired in September 2002.
Medicaid has a compassionate goal to which we are
committed. Part of our obligation to the beneficiaries of this
program is ensuring it remains available well into the future to
provide the high-quality care they deserve. Last year when I made
my statement before this Committee, I said that the growth in
Medicaid spending is unsustainable. With its action on many of
our proposals from last year in the Deficit Reduction Act, the
Congress has made Medicaid a more sustainable program while
improving care for beneficiaries. The President's Budget
proposals build on the DRA and include a modest number of
legislative proposals which improve care and will save $1.5 billion
over five years in Medicaid and S-CHIP and several administrative
proposals saving $12.2 billion over five years.
This Administration has also pursued a steady course toward
Medicare modernization. In just the past three years, we have
brought Medicare into the 21st century by adding a prescription
drug benefit and offering beneficiaries more health plan choices.
Medicare's new prescription drug benefit provides seniors and
people with disabilities with comprehensive prescription drug
coverage, the most significant improvement to senior health care in
40 years. Millions of seniors and people with disabilities are
already using this benefit to save money, stay healthy, and gain
peace of mind. According to CMS' Office of the Actuary,
Medicare's drug coverage will have significantly lower premiums
and lower costs to federal taxpayers and states, as a result of
stronger than expected competition in the prescription drug market.
Moreover, beneficiary premiums are now expected to average $25
a month - down from the $37 projected in last July's budget
estimates. The Federal government is now projected to spend
about 20 percent less per person in 2006 and, over the next five
years, payments are projected to be more than ten percent lower
than first estimated. So taxpayers will see significant savings.
And state contributions for a portion of Medicare drug costs for
beneficiaries who are in both Medicaid and Medicare will be about
25 percent lower over the next decade. All these savings result
from lower expected costs per beneficiary; projected enrollment in
the drug benefit has not changed significantly.
President Bush proposes total outlays of nearly $700 billion for
Health and Human Services. That is an increase of more than $58
billion from 2006, or more than 9.1 percent.
While overall spending will increase, HHS will also make its
contribution to keeping America competitive. To meet the
President's goal of cutting the deficit in half by 2009, we are
decreasing HHS discretionary spending by about $1.5 billion in the
next fiscal year.
I recognize that every program is important to someone. But
we had to make hard choices about well-intentioned programs. I
understand that reasonable people can come to different
conclusions about which programs are essential and which ones
are not. That has been true with every budget I've ever been
involved with. It remains true today. There is a tendency to
assume that any reduction reflects a lack of caring. But cutting a
program does not imply an absence of compassion. When there are
fewer resources available, someone has to decide that it is better to
do one thing rather than another, or to put more resources toward
one goal instead of another.
Government is very good at working toward some goals, but it
is less efficient at pursuing others. Our budget reflects the areas
that have the highest pay-off potential.
To meet our goals, we have reduced or eliminated funding for
programs whose purposes are duplicative of those addressed in
other agencies. One example of this is Rural Health where we
have proposed to reduce this program in the Health Resources and
Services Administration, given that HHS administers 225 health
and social services programs that provide resources to rural areas.
In addition, the Medicare Modernization Act contained several
provisions to support rural health, including increased spending in
rural America by $25 billion over ten years. For example, it
increases Medicare Critical Access Hospitals (CAH) payments to
101 percent of costs and broadens eligibility criteria for CAHs.
Moreover, recognizing that Congress adopted many of our saving
proposals last year, we are continuing to make performance-based
reductions.
Our programs can work even more effectively than they do
today. We expect to be held accountable for spending the
taxpayers' money more efficiently and effectively every year. To
assist you, the Administration launched ExpectMore.gov, a website
that provides candid information about programs that are
successful and programs that fall short, and in both situations, what
they are doing to improve their performance next year. I
encourage the Members of this Committee and those interested in
our programs to visit ExpectMore.gov, see how we are doing, and
hold us accountable for improving.
President Bush and I believe that America's best days are still
before her. We are confident that we can continue to help
Americans become healthier and more hopeful, live longer and
better lives. Our FY 2007 budget is forward-looking and reflects
that hopeful outlook.
Thank you for the opportunity to testify. I will be happy to
answer your questions.
CHAIRMAN BARTON. Okay, thank you, Mr. Secretary.
Let me reset the clock here quickly. The Chair recognizes
himself for the first five minutes of questions.
The President's Budget for the National Institute of Health is
$28.6 billion, which is basically a freeze over the fiscal year 2006.
As you know, it is a high priority of mine to reauthorize the
National Institutes of Health. It has not been reauthorized in 14
years. In reauthorization, we need to put some reforms in place to
make the institutes more able to address the health care research
needs for our country. What is your view of the need to
reauthorize the programs at NIH?
SECRETARY LEAVITT. Mr. Chairman, we look forward to
working with you on that matter. I would like to tell you that as
that discussion begins, that my time as Secretary has provided me
with some insights I think I would be interested to express. I
mentioned the fact that across HHS is a lot of stove piping. We do
not often look at programs in the context of the larger purpose.
And that is true in a lot of Government agencies and a lot of
Governments. It is in part true at NIH. You will see in this budget
an emphasis on what I refer to in the budget as trans-institute
initiatives. There are certain initiatives that will help every one of
the institutes. For example, an important part of our effort this
year is a human genome and environment study. Nearly all of the
disease specific institutes have at their heart or the heart of their
new science is the human genome and how we can connect what is
going on in the environment with genetics. That is something that
will benefit every one of the centers or institutes. You will also see
what we refer to as road map. Again it is emphasizing the need for
science to be looked at on a multi-jurisdictional way. Medicine in
the future needs to be more personalized, it needs to be more
predictive, it needs to be more preemptive so that we are
emphasizing prevention. And as we begin that discussion, I would
like to suggest that those are important considerations.
CHAIRMAN BARTON. Okay. In the budget reconciliation
package that the President signed last week, we found savings to
offset the proposed, I think it is 4.4 or 4.7 percent cut in physician
reimbursement. That was a one year fix. So we held our
physicians harmless for a year but under the current physician
reimbursement formula, every year that we do not reform the
program for determining how to reimburse our physicians, it
reports these cuts and these cuts are cumulative. What steps do
you feel the President and yourself can make to work with this
committee to reform the reimbursement scheme for our physicians
so that we get something that is fair to them and fair to the
taxpayers that accurately reflects the cost of the physician to
providing health care services for our Medicare beneficiaries?
SECRETARY LEAVITT. Mr. Chairman, this is a perplexing
difficult problem and it is one that is a collision that is going to
occur every year until we come up with a new way of approaching
this. And in my judgment, the best way is for us to begin to assign
a value on performance and not simply quantity. We need to be
focusing on pay for performance where we are rewarding
physicians in a way that acknowledges the value they bring. What
we have seen over time often is that when rates are cut, the
quantity of procedures increases. And that is not going where we
want it to go. Where we want it to go is for us to have lower costs,
fewer medical mistakes, and we want there to be higher quality. A
key to that is having health information technology that allows us
to measure when quality is occurring. You will see in this budget
substantial emphasis on health information technology. Several of
the members mentioned health information technology in their
opening statements. That in my judgment is a critical element not
only to reforming our payment structure but in reaching better
quality as well.
CHAIRMAN BARTON. Well, are you willing to work with the
committee and make it a priority to engage stakeholders, before the
Congress adjourns, to try to come up with a new system?
SECRETARY LEAVITT. Mr. Chairman, yes, in fact, we have a
number of pilots already that we are working to develop
experience in this area. And we think it is crucial that we find new
ways of solving this problem. This will be a perennial collision
until we are done.
CHAIRMAN BARTON. All right, I agree with that.
With that, I recognize the Ranking Member, Mr. Dingell for
five minutes.
MR. DINGELL. Mr. Chairman.
Again, welcome, Mr. Secretary. In December Chairman
Barton wrote you forwarding several follow up questions of mine.
In December, I along with Mr. Stupak, Mr. Brown, and Mr.
Waxman sent you a letter with many key questions about the
catastrophic healthcare crisis in the New Orleans region. Finally,
several Democratic Members and I wrote you after last year's
budgetary hearing asking follow-up questions which were
forwarded to you by Chairman Barton. When will you answer
these letters, Mr. Secretary?
SECRETARY LEAVITT. Mr. Dingell, I had hoped I would have
that letter when I came today. I feel like a student who forgot his
homework.
MR. DINGELL. Three, Mr. Secretary, not one, three.
SECRETARY LEAVITT. Well those letters need to be
thoughtfully considered and within a day or two you will have an
answer. I would like to tell you that that is an area that I do see
tremendous opportunity. Mr. Stupak mentioned it in his opening
statement. I have been in New Orleans a number of times. I am
going again next week. I do believe that there is an opportunity to
replace what was a clearly dysfunctional--
MR. DINGELL. Mr. Secretary, I just want the letter. I have got
other questions I want to ask--
SECRETARY LEAVITT. --talk about the letters.
MR. DINGELL. Mr. Secretary, we are sad. We feel that you are
disregarding your friends up here on the Hill since you were not
being responsive. This is not the kind of person I thought you are.
Maybe it is indifference. It is even possible, although unlikely,
that it is arrogance. When are we going to get a response to these
letters?
SECRETARY LEAVITT. That is, Mr. Dingell, not something I
would want to be tagged with. I think that is a letter I need to
personally deliver to you very soon.
MR. DINGELL. Well I look forward to receiving it. I hope that
we are both alive and in good health when it comes.
Mr. Secretary, yesterday the New York Times featured a story
by Robert Pear detailing private insurance plans, under Part D, that
had been using a variety of tools that are designed to make it
harder for seniors to get their drugs though the plan claims they are
covered. Mr. Secretary, one of the tools that the plans are using is
called prior authorization which requires seniors to get approval
from the plan before they can get their medicine. This is a trick
that has been used throughout the years to prevent people from
getting adequate and proper care that the plan should provide and
that their doctor thinks they happen to need. There are a number of
priority drugs that should be covered at least the cost to one
beneficiary on a plan's formula that are still subject to prior
authorization.
Mr. Secretary, there are a number of drugs that are on the
second level of plan formularies that are subject to prior
authorization. There are a number of prior authorization forms in
total all across the plans. Mr. Pear, in this article had, in just one
plan, 39 prior authorization forms alone. Given that there are some
40 to 50 stand-alone drug plans in each area, that amount could be
significant and it could be an unreasonable amount of paperwork
for everybody concerned. Now this plan referred to with 39 prior
authorization requirements when it was approved to sell coverage
under Part D. Mr. Secretary, what are you going do about this?
You have a mess on your hands. You have a plan that will not
work. What are you going to do?
SECRETARY LEAVITT. Mr. Dingell, for the others who may not
be as familiar with this, we have like any other plan there is a
formulary for every plan. And if--
MR. DINGELL. And some people are getting in the plan
because the drug is on the formulary and then they find out all of a
sudden it ain't.
SECRETARY LEAVITT. And I identified precisely the same
problem that you have spoken to and I have--
MR. DINGELL. What are you going to do about it?
SECRETARY LEAVITT. Well I am going to do something about
it. In fact--
MR. DINGELL. Well I hope you and I are both alive and in
good health when this occurs.
SECRETARY LEAVITT. Well I hope you are still alive by the
30th of March because that is when I intend to have this problem
solved. I have told my colleagues at CMS and I have met with the
insurance plans and we are working toward a standardization of
that process. It is unacceptable in my judgment as well to have
that many forms--
MR. DINGELL. Mr. Secretary, you have got thousands of
people that are walking away, that stand in line for a long time,
without a plan. They do not get their drugs filled. They are
charged more than the plan is supposed to charge. The dentists or
the doctors or the pharmacists do not know what the plan is or
whether these people are covered and they are sent off. You got
people who have heart conditions or other serious conditions that
cannot get their pharmaceuticals because the situation isn't
working. What are you going to do about that?
SECRETARY LEAVITT. Actually, Mr. Dingell, millions of
people are having their prescriptions filled every day.
MR. DINGELL. And millions are not.
SECRETARY LEAVITT. I do not know in the millions there may
be--
MR. DINGELL. The thousands, hundreds of thousands.
SECRETARY LEAVITT. No, there is not even that. The system is
working better every single day. We have worked 46 days under
this implementation. We have 250,000 people a day who are
enrolling. This system is working. By the end of this year, we are
going to have 28 to 30 million people who are participating and...
CHAIRMAN BARTON. Two hundred and fifty thousand a week,
not a day.
SECRETARY LEAVITT. That is what I meant to say, millions of
people--
MR. DINGELL. I hope, Mr. Secretary you are back here
because I do not think you are going to be singing the same song
next year.
Mr. Chairman, thank you.
CHAIRMAN BARTON. Thank you.
MR. DINGELL. Mr. Secretary, thank you.
SECRETARY LEAVITT. Thank you.
CHAIRMAN BARTON. Mr. Hall of Texas.
MR. HALL. Mr. Secretary, the Chairman interrupted me before
I was through reading to you a while ago. I want to get back to the
ovarian cancer problem. You know, within the budget it would
seem that ovarian cancer research was lagging behind. We passed
a resolution to the House last year that pointed out while other
cancer deaths had declined, the same cannot be said of ovarian
cancer. And there was a cut in the ovarian cancer research. I just
want to ask you what is to be done for the decrease for this disease
and how does the Administration propose to advance survivability
rates of this and other diseases with the current rate of funding,
particularly for ovarian cancer. Can you take a good hard look at
that?
SECRETARY LEAVITT. Mr. Hall, I would be very pleased to do
that.
MR. HALL. That is all I ask you to do, be responsive on today.
Thank you and I yield back.
SECRETARY LEAVITT. Thank you.
CHAIRMAN BARTON. Is Mr. Waxman ready?
MR. WAXMAN. Why don't you call Mr. Pallone and I will
have a couple minutes to--
CHAIRMAN BARTON. All right, Mr. Pallone?
MR. PALLONE. Thank you, Mr. Chairman.
Mr. Secretary, I have to say that the system is definitely not
working in my State of New Jersey and we continue to experience
significant problems with implementation of the new Medicare
prescription drug benefit. It continues to take--I mean, basically
the State is continuing to pay the drug bills of many low income
people who have fallen through the cracks of the new program. To
date, New Jersey has paid $113 million in claims for its dual
eligibles and State pharmacy assistance programs or i.e. PAAD as
we call it or approximately $2.6 million a day. Now despite the
incentives from Medicare and Medicaid's efforts to reimburse
States, it remains unclear whether New Jersey will be fully repaid
under the waiver program designed by CMS. Under the program,
CMS will not reimburse New Jersey for its expenditures on behalf
of 125,000 Medicare beneficiaries enrolled in the pharmaceutical
assistance program or those who are eligible for the Part D low
income subsidy. The waiver strictly applies to those low income
seniors who are duly eligible for Medicare and Medicaid.
And a large part of the problem, Mr. Secretary, is that CMS has
yet to confirm to New Jersey which of the 190,000 PAAD
beneficiaries are eligible to the low income subsidy. Presently,
only 4,467 PAAD members were automatically deemed eligible
for a Part D low income subsidy while CMS's record shows
26,676 have enrolled in the slim D or qualified individual
programs. Slim D or qualified individual status should have
automatically deemed all 26,767 as eligible for Part D low income
subsidy in my opinion.
Also, New Jersey has yet to confirm which PAAD
beneficiaries were successfully enrolled in the Part D plan. There
is a lot of misinformation regarding the enrollment of these
beneficiaries into Part D plan. The State currently has no way of
knowing how much was supposed to be covered by either one, the
Part D prescription drug plan, two, the beneficiary I call sharing, or
three, the State through wrap around coverage. So New Jersey in
my opinion should not be penalized for providing coverage in light
of this missing information. CMS should reimburse the State for
part of the cost that was supposed to be paid for by the TDP just
like it is doing for dual eligibles who have their costs covered by
the State. I understand that you had ongoing discussions with
Governor Corzine about this issue but I do not think have come to
any resolution. You can tell me differently. I have a letter here I
would like to give to you if I could, Mr. Chairman from both of our
Senators--
CHAIRMAN BARTON. Without objection.
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
MR. PALLONE. It is our entire New Jersey Congressional
Delegation and it asks you to revise the waiver program to provide
reimbursement for all State pharmacy assistance program claims
that should have been covered by Medicare Part D and this press is
also made the waiver application which they submitted to CMS. I
have two questions. First, can you tell me to what extent the
Administration will reimburse New Jersey and other States for
these costs and why the Bush Administration has resisted
reimbursing States for covering SPAP claims in the first place. It
seems logical to me to the extent that Medicare was responsible for
covering a portion of these claims, the State should be reimbursed
for it. So would you agree with that or, you know, if you could
answer, that is my first question.
SECRETARY LEAVITT. Congressman, as you have indicated I
have been in on-going discussions with Governor Corzine. I spoke
with him last night as late as 9:30 and we have 50 different States
that we are working with. I will suggest to you that we have
struggled to get New Jersey working well for reasons that are not
as clear to me nor them, but we are working on it. And the
important thing is that no one is going without their prescription
drugs. They are getting their drugs when they go to the counter
and we will continue to do that so long as we need to, to make sure
that that happens. Let me be responsive to your specific question.
We are prepared under this demonstration waiver to assure that
New Jersey is reimbursed for anything that a plan would have paid
for either a participant in the program or a participant who should
have been enrolled in this system that was not identified because of
the system problem. They are getting their prescription drugs,
New Jersey will be reimbursed. Now New Jersey and a number of
other States have State prescription drug benefits that are paid for
by State dollars at their choice. We will not be reimbursing them
for moneys that would have been paid under a State program
unless they would have been eligible for Medicare Part B. We do
not have legal authority to do that and it would not seem fair. We
honor the fact that New Jersey and a number of other States have
chosen to pay for parts of prescription drugs that the Federal
program does not and that continues to be their obligation and their
payment requirement.
MR. PALLONE. I have a second question in the letter, Mr.
Chairman. I do not know--let me say the letter requested the
Administration extend the waiver program's end date, which as
you know, is today because the State continues to experience
significant problems with implementing the new program and the
large amount of information that is still missing, it is highly
unlikely that all the problems will be fixed today. So New Jersey
would be forced to either continue to pay for the cost of drugs
which should have been covered on Medicare Part D or let people
go without their medications. And obviously that latter is not an
option. So Mr. Secretary, you realize that the problem still exists,
what steps are you taking to extend the waiver program and
reimburse States for the cost that they incur beyond today?
SECRETARY LEAVITT. It is our judgment that under the waiver
that New Jersey has signed we can take care of their
reimbursement needs and continue to work with them. I think
New Jersey will be reimbursed in the way that you have outlined.
CHAIRMAN BARTON. The gentleman's time has expired.
MR. PALLONE. Okay. I will submit this, Mr. Chairman.
Thank you, Mr. Secretary.
SECRETARY LEAVITT. Thank you.
CHAIRMAN BARTON. The gentleman from Florida, Mr.
Bilirakis.
MR. BILIRAKIS. Thank you, Mr. Chairman.
Mr. Secretary, back in the mid-60's when Medicare was
devised and admittedly it was a plan that was submitted by the
other party, certainly Congressman Dingell's father was a major
part of that procedure with nine of us often times and had a lot of
problems. I do not know the date on the floor of this Part D of
Medicare--we lose an awful lot of the clippings from the
newspapers regarding these problems. And I dare say that if those
who oppose that program and if the media, particularly the
editorial letters who may or may not have opposed that program, if
they had basically slandered it because of the problems, the
complexities, and that not, we probably would not have Medicaid
today. And what is happening with this Part D. So let me ask you,
will every Medicare beneficiary who wishes to enroll in the Part D
plan be able to do so by the May 15 deadline?
SECRETARY LEAVITT. I will resolve this to make certain
everyone has an opportunity. It is a voluntary program. We have
90 days longer. We are hopeful that Members of Congress will
join with us in helping people enroll. We are enrolling about
250,000 a week--
MR. BILIRAKIS. You said 90 days longer--
SECRETARY LEAVITT. No, no, we have roughly 90 days left
between now and the 15th of May.
MR. BILIRAKIS. Okay.
SECRETARY LEAVITT. We feel quite optimistic that it can be
done. If the Congress chooses to extend the period that will be a
policy decision that you will make.
MR. BILIRAKIS. Yeah, if it turns out as a result of information
available to all of us--you and to the Congress--that there are
people out there who have not really decided yet who probably
will want to and whatnot, would you oppose extending the
deadline?
SECRETARY LEAVITT. Well, we will make known to you at the
time any ramifications such a policy change would make. At this
point, we are moving with the assumption that it would be May 15.
We think we can accomplish the task period, but at the end of that
time if you choose to do so, then obviously we will follow along
and do our best to make certain that people are enrolled.
MR. BILIRAKIS. And I realize that we should not even be
talking about doing so this early in the game obviously. But the
point of the matter is that we want to make sure that everybody has
that opportunity and so, HHS would be unbiased and honest in
terms of telling us or sharing with us if there are people out there
that probably would need more time. Is that right?
SECRETARY LEAVITT. Mr. Bilirakis, our shared goal, I think
everyone in this room is to make certain people have prescription
drugs. For the first time in our Nation's history a senior should not
have to worry about having their prescription drug costs wipe out
their savings. We are working very hard to make certain people
have opportunities to purchase a plan and we hope we can all work
together in whatever way is necessary to accomplish that task.
MR. BILIRAKIS. So regarding the budget, NIH budget is at last
year's level, the National Cancer Institute will be reduced by $40
million this year. Comments?
SECRETARY LEAVITT. Well, we are spending $4.8 billion a
year on cancer research, that is up substantially from earlier in
2001 and the whole NIH has been doubled since 1998. We are
committed to continuing to make progress on cancer and believe
we can. Earlier I mentioned the fact that much of our new
investment at NIH is in the area of genetics and the environment.
We are also working with what I call the critical path project which
is to dramatically cut in the amount of time it takes to have a drug
that comes from research able to go from bench to bedside. We
are working to make it more personalized, more preventative, and
more preemptive. All of those are new objectives of NIH and we
are targeting the money in that way. Would it be nice if we were
able to dramatically increase the spending in NIH, yes. And do we
think in future years that will be possible, I do. But this year, we
are doing deficit reduction. We have been able to keep it flat and
that was the judgment we made.
MR. BILIRAKIS. So were the National NCI people, the National
Cancer Institute people coordinated with before you decided to
reduce the project by $40 million?
SECRETARY LEAVITT. Well we have had extensive
conversations with the community. Obviously no one is
enthusiastic about not having a big increase.
MR. BILIRAKIS. Yes.
SECRETARY LEAVITT. And we hope in time that our continued
investment will be possible. Right now we are reducing deficits
and being able to keep it flat was something that was very
important to me and in the sense of being able to not see
substantial cuts, $40 million is a lot of money in specific terms but
in the context of a $30 billion budget at NIH it is relatively--
MR. BILIRAKIS. Many of us are concerned about that and we
thank you, Mr. Chairman.
MR. DEAL. [Presiding] Mr. Waxman?
MR. WAXMAN. Thank you, Mr. Chairman.
Mr. Secretary, just to follow up on Mr. Bilirakis' question, you
hope to put more money into NIH but now we are doing deficit
reduction. The President said he is going to halve the deficit by
2012. Many of us doubt that is going to be possible. Should we
look to 2012 to find more money into the research of NIH and
NCI?
SECRETARY LEAVITT. The good news is, Mr. Waxman, we do
our budgets one year at a time.
MR. WAXMAN. Well especially when you cut back on some of
this research we do not just lose one year but we lose a lot of
research and hope for the future.
Now I want to get back the Medicare drug proposal because I
think the rollout has been an absolute disaster. People were turned
away without their drugs. Pharmacies could not determine a
person's eligibility. Sometimes they waited for hours on the phone
just to try to get through to the plans. People were charged too
much. Many vulnerable Medicaid beneficiaries including people
in nursing homes were assigned a plan randomly and then it turned
out to be inappropriate. Some of these things are implementation
problems and they will get worked out as time goes by but some of
them are really based on the flawed concepts of the bill. There
have been a lot of legislative proposals out there designed to
address some of the most immediate problems. I would like us to
have a fundamental fix where we have a drug benefit as part of
Medicare itself. But since we are not going to get to that, the
budget that is submitted to us has no legislative proposals to
remedy any of the problems which have become so obvious. Is it
your position that this program is working just fine? Do you take
the position that no legislative fixes are necessary to address the
problems we are already facing and the ones that we will obviously
see on May 15 if we do not change the deadline and remove the
penalty?
SECRETARY LEAVITT. Mr. Waxman, we are 46 days into its
implementation, the biggest change in Medicare's history. No
logical person would see a transition that complex and that large
happening without some unexpected problems and we have had
them. We make no excuses. The measure of our success is not
what it looks like after 46 days it is what is going to look like when
it is fully operational.
MR. WAXMAN. You do not see any legislative changes now?
SECRETARY LEAVITT. I do not see any change that I cannot do
regulatorily right now. Now I will tell you that we are already
beginning to look at what I refer to as a Part B 2.0 that is the next
plan year. And I think you will see substantial changes evolving
because the market is evolving. The market has driven the cost
down from about $37 a month to $25.
MR. WAXMAN. Mr. Secretary, I appreciate your conclusion
and I gather that is the statement of the Administration that they
are asking for legislation. If you decide to, we are here and we
certainly want this drug system to work. And I want to give you
an example of a problem that we had come up a number of times
especially at a briefing that I had recently. You have people on
Medicaid who are also on Medicare, they are called dual eligibles.
And they had a program under Medicaid where they were provided
drugs. It was a stable system, they knew what was covered and
their drugs were going to be covered. Now they are shifted over to
Medicare. Yet on Medicaid there was a limit on what the drug
companies could charge. It was the best price because of the
rebates the companies had to provide. Well now that they are
under Medicare there are no rebates. There are no limits. And it
seems to me that what we have had because of this shift is a multi-
billion dollar increase in the money that the drug company is going
to make. Dr. Steven Shandomyer of the University of Minnesota
estimated the drug prices for these dual eligible beneficiaries are
now 20 to 30 percent higher than when they were on the Medicaid.
So it seems to me that we are talking about a windfall some say as
much as $30 billion for drug manufacturers all at the taxpayer's
expense. Can you explain the rational of this to me? It makes no
sense for the Federal Government to be paying millions of dollars
more for drugs they were getting at a discount price prior to
January. What is your response to that?
SECRETARY LEAVITT. Well the prices for pharmaceuticals are
going down, not up and this program is representing a substantial
savings for every senior who enrolls. This is a good deal for
seniors. I mentioned to you--
MR. WAXMAN. Well not for dual eligibles. They are getting
less of a benefit and it is going to cost the taxpayers more money.
SECRETARY LEAVITT. I would disagree with that assumption.
MR. WAXMAN. Well, I am going to take it then that you
disagree with me and I would like you to look at it more carefully.
The last point I want to raise in the few seconds I have left is
that generic drugs play an important role in lowering the prices and
yet we have seen a drastic increase for generic drug applications.
At the same time there has been a dramatic decrease in the number
of people at the FDA to process these drugs and there is a 16
month time lag to review generic applications and then the budget
does not call for an increase in the amount of money for FDA to
ever meet its performance standards. Do you think that there is
any way we can get an increase in the number of staff to address
this backlog or are we going to find ourselves falling further and
further behind in getting generic drugs approved?
SECRETARY LEAVITT. Mr. Waxman, we are in agreement
actually as you know with the need for us to continue to enhance
the approval of generics. We have, in fact, made substantial
increases in years past in our staff and we have been able to
increase dramatically the number of approvals. We do have a
backlog. They tend to be a backlog of applications that are on
medications that there is already one, two, or three in that category
and we are anxious to get to as many different categories as we can
at one time. We share your goal of having more generics. We
think it is an important part of the reason the prescription drugs
costs are coming down.
MR. WAXMAN. So you are prioritizing generics based on the
categories?
SECRETARY LEAVITT. We want to make sure we have generics
in every category. If we have one that is--I am told that if we have
one which there is already three in a category, we are better off
approving one or two that we do not have, where we do not have
approvals than just having a fourth or a fifth added.
MR. DEAL. The gentleman's time has expired.
Mr. Upton?
MR. UPTON. Mr. Chairman. Again, welcome, Mr. Secretary
and I just want to thank you from what I heard from a number of
different answers particularly the answer to Chairman Barton
because I too hear a lot from my providers. My hospitals, my
nursing homes, equipment suppliers, and others all are concerned
about the across the board cuts in inflation updates. That is usually
what they talked about. And I think having a new system put into
place where you are looking at a number of different pilot
programs would solve some perennial problems that need to be
resolved. I look forward to working with you to see that that can
happen in a constructive way.
I want to follow-up just briefly on a question that Mr. Bilirakis
asked. He asked specifically about perhaps extending the deadline
from May 15 for folks to sign up for Part D. You answered it well.
But the question that I have is what about the idea, whereas plans
can change as they provide the medications to the beneficiaries
but, in fact, the beneficiary is not able to change from one plan to
the other. Michigan has, I think, 42 different plans now and
someone's own medication may change, the plan may change, and
as I understand it, they are locked in for a year. Is that right, into
that plan, prescription--more that you are having so many enrollees
sign up virtually every week, hundreds of thousands, millions
across the country. What would be the problem with allowing
folks as plans change, they can change their plan for the
beneficiary, what would be wrong with allowing the beneficiary to
change the plan maybe a limit per year or something along that line
so that they can make better accommodations for their own
personal needs? Would the Administration have any objection to
that if we were able to pursue something like that?
SECRETARY LEAVITT. Mr. Upton, there are very good reasons
that I will enumerate in a moment why it is valuable to have the
capacity for a plan to change their formulary, many of which could
endure to the benefit of a beneficiary. It is important to
acknowledge that this problem is talked a lot about. People worry
that a plan could try to change their formulary. In order to do that,
they have to go through an extensive process that includes the
approval of HHS. Now granted we are only 46 days into this but
we have had exactly zero applications to change formularies and
put another way this is a problem people are concerned about but it
is not happening. On the other hand, there are good reasons. If
there are, let us just assume that a generic drug was approved or
one was clearly it was a drug safety problem. A formulary needs
to be changeable with the process in order to protect the
beneficiary as well as to provide equity for the plan. They cannot
do it without approval. They have to get HHS approval. In order
to have approval, they have to go through an extensive process
including an independent panel, demonstrating that it is in the
interest of the beneficiary. So this is just one of those problems
where people worry about it and I understand that, but it is just not
happening and therefore, I believe it is overstated as a challenge.
MR. UPTON. Well that is good, thank you.
As I mentioned in my opening statement, I talked a little bit
about health information technology and I am very supportive of
the budget you have presented in that regard. I also chair the
technology subcommittee. Are there any statutory changes that we
should be taking a look at to make sure that these budget increases
can be accommodated?
SECRETARY LEAVITT. We are proceeding in the absence of
Health IT bill that is currently being discussed, to develop
standards. If your question is are there things that could help us in
that process legislatively, the answer is yes. But we are making
good progress. We will see by the end of this year substantial
deliveries or deliverables in important areas that will drive this
forward.
MR. UPTON. Well I look forward to working with you and
your department. I appreciate your being here this afternoon and I
yield back the balance of my time. Thank you.
SECRETARY LEAVITT. Thank you.
MR. DEAL. The Chairman yields back.
Mr. Rush is recognized for five minutes.
MR. RUSH. Thank you, Mr. Chairman.
Mr. Secretary and I have got three questions I want to get to
rather quickly. My question number one is would you be in favor
giving all the angst and confusion around signing up for the
Medicare Part D, would you be a supporter of extending the
deadline from May 16 to another date, May 15 to another date?
SECRETARY LEAVITT. As we have spoken earlier, we are
seeing enrollment of more than 250,000 a week. We have 90 days
left. We believe that we can accomplish this task. If in fact
Congress chooses to extend it, obviously we will continue to enroll
people. That is a policy decision that will need to be made by the
Congress. I will say that people need deadlines. If we did it
indefinitely, people will not feel the need to investigate this. Now
that is a decision or a judgment that the Congress will need to
make. I believe by the time we have reached the period of
enrollment, we will have reached our goal of 28 to 30 million in
the first year. This is not an easy population to find at time and I
am sure there will be ongoing enrollment that will be valuable.
MR. RUSH. Well, in light of that, can you or your office
provide some members of this committee on a district by district
basis how many eligible people have already signed up for
Medicare Part B?
SECRETARY LEAVITT. Yes, I expect that we will deliver that
information to you, each of the Members of the Congress some
time next week. It will not only demonstrate how many are
eligible but it will also show how many have actually enrolled.
MR. RUSH. Okay.
SECRETARY LEAVITT. And I hope that information will be of
value.
MR. RUSH. Thank you. In your opening statement, you said
that you had put an emphasis on prevention in this budget and I
appreciate that emphasis and I share your belief that this is cost
effective in the long run. But giving this emphasis on prevention,
can you explain why does the budget, your budget eliminate or
make steep cuts in prevention programs such as the Universal
Need and Learn Program, the Preventative Health Services block
grant, the Community Services block grant, even the Health
Professionals Training Program or scholarships for disadvantaged
students? Can you explain to me why those cuts here are those
preventative in nature?
SECRETARY LEAVITT. Earlier I reflected the fact that during
my period as governor I became quite conscious of the fact that
any time you are dealing with reducing budgets you are dealing
with a conflict between the good programs. And there are many of
those programs that I understand their purpose and I understand
why people feel passionately about them. I laid out a series of
investment principles that talked about things like whether we are
targeting our investments or whether we are going after prevention.
And without responding to all of those, I will tell you that the
reasons that I did it would have been embodied in those principles,
one that you mentioned that would I think bare reflecting on. Also
as governor, I came to understand the value of having the block
grants that the social services or the community services block
grants. At various times during my time as governor I wrote to
Congress to advocate for them. So I find myself as Secretary now
on the other side of the table. Well the governors like those and
they like those because they are very flexible and you can put the
money where you need it. Frankly during many of the years when
most budgets went up, it was times in which the States were
having very difficult times financially. But the States are doing
better right now and we are cutting deficits and I made a decision
that during this period I could not measure the impact they were
having. The States are in better shape financially than we were
and I made a decision to make that as one of my cuts. Now you
may disagree with that judgment but that is the basis on which I
made my decision.
MR. RUSH. So you still characterize this budget as being a pro-
preventative in nature?
SECRETARY LEAVITT. Oh, absolutely. I have made
investments that have focus on these programs and many of the
cuts that you reflect some of them are not in my judgment oriented
to prevention. In some cases, they are oriented toward covering a
large general population but were not targeted, were not
preventative, and I made those judgments.
MR. RUSH. I applaud your increase in the dollars allocated for
community based health clinics. Can you explain to me what is
your vision in regards to community based health clinics? I
understand that you are proposing at least 80 new community
based health clinics?
SECRETARY LEAVITT. We actually--and I share the President's
vision here. I want to see community health centers expanded,
1,200 of them. In fact, this budget has enough for 302 centers to
either expand or to start new ones, 80 of them will be in low
income or in specifically targeted low income counties. I see this
as a way in which we can provide access to the basic health care to
literally millions of people and for that reason we have that is a
good example of the targeted program, one that clearly gives
people a medical home in which they have prevention. That is a
good example of the kind of decision I made based on those
principles.
MR. RUSH. Mr. Chairman, I yield back the five minutes of my
time.
MR. DEAL. The gentleman yields back.
Mr. Secretary, my turn now I suppose. I have a couple of
questions. First of all, we have heard references made on both
sides to situation in the Katrina aftermath and I would like for you
to comment generally on where you think we are in terms of
compensating those pharmacists and other providers who feel that
they have been left out in the process and does this budget include
specific dollars to address that problem and if not what kind of
information can you give us with regard to resolving that question?
SECRETARY LEAVITT. The issues related to Katrina were in
large measure dealt with in our Deficit Reduction Act where as
much as $2 billion was allocated for us to deal with
uncompensated care and in some cases to use whatever was left
over to help rebuild the health infrastructure. Comments have
been made already about the need to do that. I will not repeat
those except to say that we see a grand opportunity. The health
care system there frankly did not function very well before. Now
we see an opportunity to develop an extraordinary health care
system that will show the way for many others in the future.
MR. DEAL. So those funds in the Deficit Reduction Act would
be more than adequate to cover the claims for care that some might
claim are still uncompensated?
SECRETARY LEAVITT. We believe they are.
MR. DEAL. All right, thank you.
As you know, this committee has held two hearings on the
issue of our preparedness for a potential pandemic influenza
outbreak and I want to thank you again for testifying at our hearing
we had back in November. And I know that you have been
working closely on the implementation of the plan itself. We
appropriated money during the last steps for the beginning of that
process and I believe there is money in this proposed budget for
additional funding to go forward with a further preparedness plan.
Would you sort of outline for us what you think the steps we need
to be taking during this next year are and how the funds that you
are requesting would implement those steps?
SECRETARY LEAVITT. As you are aware, the President
requested a $7.1 billion emergency supplemental. The Congress
funded $3.3 billion of that in the course of the last deliberations.
Those dollars are being used for a combination of different efforts.
One would be State and local preparedness. I am in the middle of-
-I am not in the middle I am at the beginning of 50 State summits.
I have been to ten and we have 36 of them either held or being
planned but we will have 50 State summits where we are rallying
local communities, business organizations, community groups,
churches, schools, colleges, to prepare and $350 million will be
used for that. A large measure of it will be used for international
and domestic monitoring so that we are able to bulk up the
capacity we have to gather information about when the disease
strikes and how broad it is. We are also purchasing antivirals. We
will reach by the end of 2006 our targeted 20 million courses in
stockpiles and we are developing jointly with the State's
distribution needs. We are also on the well advanced stages of
developing new technology, cell based technology for vaccines
and additional capacity to manufacture it. As to the next phase, it
is basically a continuation of what we are now doing. We are in
the process of doing RFPs, we have done one RFP for different
manufacturers to help us build capacity and new technology. What
we have now will get us through the first phase of that but we are
confident there will be promising technologies that we will need to
nurture through it. So this gets us into the game but we are clearly
going to need the help of Congress and being able to fulfill that
plan and be able to complete our preparation. I will say, Mr.
Chairman, that when it comes to a pandemic we are overdue and
we are under prepared and there is a lot of work going on right
now but we have still, we are still a long ways from the point of
being able to rest with the assurance that we are ready.
MR. DEAL. Am I correct, though, that there would be other
funds under the Public Health Security Act that could also be used
for some of these purposes that you have outlined?
SECRETARY LEAVITT. Well we clearly recognize that every
part of our public health infrastructure needs to be tuned in a way
that it will meet multiple demands. And so we are working to
create a sense of synergy on what we are doing here with what we
are doing in the other areas of concern such as bioterrorism or any
natural disaster. We are not just using these pandemic funds for
pandemic. We are generally expanding the preparation that is
available to Americans for all natural disasters or all disasters
rather they are manmade or natural.
MR. DEAL. Now in conclusion as one who has just toured the
new facilities of the CDC in our State, I was very impressed with
the improvements and the technology that is going to go forward in
their future efforts there.
Mr. Engel, you are recognized for five minutes.
MR. ENGEL. Yes, thank you, Mr. Chairman and thank you, Mr.
Secretary. It is not easy obviously testifying before the committee
and I want to just again reiterate my disappointment in a lot of the
things that my colleagues have mentioned about the budget but I
welcome you.
I want to first talk to you about a letter that I sent along with
every colleague in New York, Democrat and Republican, all 29 of
us signed a letter to you last October expressing our concerns
about the Ryan White Care Act and funding concerns. We--it is
four months later and we have not received a response to that
letter. I would say respectfully that since every New Yorker again,
Democrat and Republican, signed onto the letter, I think that four
months is really too long to wait for a reply and I would hope that
we could at least get an answer to some of our questions as soon as
possible.
As you know, no State spends more than New York to care for
its residents with HIV and AIDS, over $3 billion last year.
Unfortunately one of the epicenters of the AIDS crisis in the
United States is in New York and we have always viewed this
funding as a partnership between State, cities, and the Federal
Government. And we rose to the occasion bringing the financial
resources to finance HIV services long before the Federal
Government committed substantial resources for HIV. We are
concerned because we think that the intent of the funding and the
way it is going to be done sort of borrowing from Peter to pay Paul
and we feel that reducing the Ryan White resources that State's use
to care for people with HIV and AIDS punishes those States that
have been forthcoming in terms of money and we think that is
really the wrong way to go. People living with AIDS and HIV is
increasing, and the demand for the Care Act services there is no
justification we feel to hurt New York because we have done the
right thing. And would it not make more sense to the Federal
Government to prioritize significant new dollars for HIV/AIDS
care rather than pitting regions against each other in the fight for
dollars. I do not want to go into everything. I do not have the time
that we said in our letter, but it was a very well written thoughtful
letter and I think again the fact that 100 percent of the New York
delegation, you know, it is hard to get 29 members to agree on
anything, but we agreed on this and I would just appreciate, and I
say this not to embarrass you because I know you are obviously
working as hard as you can but we would like an answer to our
letter and I would like you to comment on some of the questions
that I raised.
SECRETARY LEAVITT. Thank you, Congressman. I am
disappointed that your letter has not been responded to and I will
find out why that is.
MR. ENGEL. Thank you.
SECRETARY LEAVITT. I would like to make clear that we are
supportive of the reauthorization of the Ryan White Care Act. As
you are probably aware, we have laid out a series of principles that
we think improve our capacity to respond and we want to serve the
neediest first. We want to focus on the lifesaving and life
extending services. We are interested in increasing our prevention
efforts going again back to prevention. In keeping with that, I
would like to add that in this budget we are proposing a substantial
new initiative that the President has announced that will test an
additional 3 million Americans and will take as many as 4,400
people off a State waiting list. We see that as a significant new
investment in this area, particularly during a time when we are
working so hard to reduce deficits. I mentioned it early today as
one of the new initiatives that we have worked hard to find other
ways and places where we could reduce them in order to fund that.
And so I wanted to mention that given the fact that I am sure there
are a lot of programs that people are unhappy about. I wanted to
make sure I got a chance to mention this one and I am sure would
be favored to you.
MR. ENGEL. I would like to thank you. I have obviously some
more questions which I will submit but they are all stated in the
letter.
I want to talk to you about SAMHSA. There is a SAMHSA
funded Substance Abuse Prevention Program run by Bronx Aid
Services. They came to visit my office in Washington, D.C. Kids
in the Bronx which I represent have the highest rate of substance
abuse in New York City and the program works to increase self
esteem, counseling, and opportunities for these kids. There are
huge cuts to SAMHSA's budget and many programs are receiving
cuts or flat funding this year and again I want to just express my
dismay at getting such large cuts to SAMHSA of this treatment
opportunities for substance abuse and mental health is so
devastating and I am wondering if you could comment on that.
MR. DEAL. This will have to be the gentleman's last question.
SECRETARY LEAVITT. I will just acknowledge that we are
focusing our efforts on the transformation of the SAMHSA which
will allow us to deliver better with the dollars we are investing and
I am quite enthusiastic about this transformation effort and
recognizing the limits of time obviously with that.
MR. ENGEL. All right, thank you, I just wanted to point and I
have no other questions but there is a $71 million dollar cut so we
think that is overboard.
Thank you, Mr. Chairman.
MR. DEAL. The gentleman from Kentucky, Mr. Whitfield.
MR. WHITFIELD. Mr. Chairman, thank you very much and Mr.
Secretary thank you for joining us today. We all appreciate the
great job you are doing a very difficult position.
But first I want to mention a couple of things to you. The first
thing I want to mention to you is that we have heard a lot of
discussion about budget reductions and loss of funds. And the first
thing that I want to talk to you about is an offer that we made to
give you money and you all did not take it. And I want to point
out specifically what I am talking about. Appropriators back in
2001, without any authorization from any authorizing committee,
particularly this one that has exclusive jurisdiction on the issue
relating to prescription drug monitoring programs, started funding
unauthorized programs and over the last three years have received
something like $33 million. This committee unanimously passed a
National Drug Monitoring Bill that was passed on the House floor.
It was passed in the Senate by overwhelming majority. The
President signed it in August. We sent letters to OMB to Josh
Bolton and said because this is a new program at HHS and we
work closely with HHS staff and even prior to your assuming the
responsibilities of Secretary, we worked with Secretary Thompson
who was very supportive of it and we were shocked really that
there was zero dollars in authorized program under HHS to
implement this new program and there was $10 million over
Department of Justice for the old unauthorized program. And I
would just like to urge you to work with us in trying to correct that
error and get it over at HHS where we think it belongs, and after
many hearings on the subject, we found some flaws in the DHA
Program and I would ask you would you be willing to work with
us to get additional money for this program?
SECRETARY LEAVITT. Mr. Whitfield, I am aware of this. And I
am most aware of it because we like the program. I am also
conscious of the fact that there is this ongoing discussion as to
whether or not it ought to be in the Justice Department or at HHS,
and the Chairman has made very clear to me where he thinks my
allegiances ought to be and we just need to work out among the
various committees how best to fund this. We like it, we will be
cooperative, we will do all we can. We need your help as well on--
MR. WHITFIELD. Well when you are saying an ongoing
discussion, who are you referring to?
SECRETARY LEAVITT. Well I recognize there is a little bit of a
jurisdictional discussion going on between the committees of
Congress and also we are very anxious to see the program succeed.
MR. WHITFIELD. Yes. You know our view on this is the
appropriators never had it authorized, not all of us are shocked that
appropriators would do something like that, but this is the
committee with jurisdiction and we did it overwhelmingly, passed
it unanimously, and I know that you are supporting us so hopefully
the Chairman and the rest of us can let our leadership know that we
feel very strongly that the money should be at HHS and not DOJ
so thank you for that.
The second issue I would like to raise, and I am not the only
member of Congress that has been focused on this issue, there are
also a number of Senators as well and we have had discussions
with Dr. McClellan and that relates to the calculation of the
average sales price for prescription medicines under Part B of
Medicare used by oncologists and whether or not service to these
should be included in that calculation. And in the letter that Dr.
McClellan wrote to some groups, he made it very clear that it was
the position of CMS that these service fees, if they are valid
service fees, should not be a part of the calculation of average sales
price. But that has never really been placed into a regulation at
HHS or CMS and I was just curious do you have any thoughts on
that particular matter?
SECRETARY LEAVITT. Your recounting of the history of this is
consistent with my own understanding. It is also my
understanding that the regulations are under consideration
currently and that we are working through that. I think Dr.
McClellan has stated the department's policies clearly as I could.
MR. WHITFIELD. Well I hope that they will take some action
on it. They have been working on it for some time and I do think it
would clarify and even help alleviate a number of problems and
any influence that you might have over there if you agree with us
we would appreciate it.
SECRETARY LEAVITT. Thank you. Well I do not know if I
have influence there, I will test it out.
MR. DEAL. Thank you. And Mr. Whitfield I am going to
weigh in on that, too. We passed a good bill and they are our
friends on appropriations. They need to understand that once we
have done it, that we expect them to receive the wishes of the
authorized program. I will be working with you, Mr. Lewis, Mr.
Rogers, and the ranking members of the minority side to make that
happen.
MR. WHITFIELD. Thank you, Mr. Chairman.
MR. DEAL. Mr. Markey?
MR. MARKEY. Thank you, Mr. Secretary very much for
coming here today.
You have got a very tough job. Donald Rumsfeld says to the
President, I need a massive increase in defense spending, he gets it.
Secretary of Treasury says to the President I need a massive cut in
taxes, he gets it. In line comes health care, you are next, you get to
deal with what is left over and as a result you have to make cuts
and you have to make tough decisions because it is not given in
this Administration the same priority that I am sure you would give
it.
So we have a situation here where you were talking about what
happens if there is, if it is unchecked what happens to the Medicare
budget. What happens to the Medicaid budget in terms of the
percentage of gross domestic product that it will consume in the
years ahead. What is happening in this budget though, Mr.
Secretary, is a cut once again in the NIH research budget including
inflation. And there has been a 9 percent cut in the purchasing
power of NIH over the last three years that is a reduction. Now I
was born in the same month as President Bush and President
Clinton and we are the first baby boomers. And there is going to
be millions and millions coming every year after us and the
estimate is that 16 million of us will have Alzheimer's, 16 million
of us. Now it seems to me that the best cost containment we can
have is if we invest the extra few billions now to find a cure to
work on prevention rather than what is estimated to be a $100
billion a year bill for our baby boomers with Alzheimer's in
nursing homes under Medicaid in a relatively short number of
years. This year it is $20 billion for Medicaid for Alzheimer's
patients. At that time, all the baby boomers are in today's dollars.
In other words, 20 percent of today's defense budget would go just
to one disease, Alzheimer's and Medicaid much less all the other
costs related to Alzheimer's. So Mr. Secretary, do you not think it
makes sense for us to increase NIH research, to increase the
likelihood we find the cure, that we find a preventative way of
avoiding the trillions of dollars which are going to have to be spent
just on the treatment and care for Americans, baby boomers who
have Alzheimer's. That would be one disease would be $150
billion a year every single year, trillions of dollars. Would it not
make sense for us to make that investment today with additional
research and the same way that the preceding generations had 36
years of unchecked increase in NIH research for heart disease and
stroke and for cancer that has actually made it likely that the
average baby boomer sitting here if they are healthy today will live
to 85 to 90. In other words, the cost for Alzheimer's is going to be
explosive because of the success of the preceding generations of
research. So can you explain to me how the White House can give
you a budget but kind of forces you to cut NIH research when I
know you know that the best thing you could do is to engage in
that research in that prevention to avoid the long-term costs which
are hundreds of times higher than any budget saving this year or
next year or the year after.
SECRETARY LEAVITT. Mr. Markey, you pointed out the fact
that Medicare and Medicaid make up a huge portion of our entire
national budget. We often refer to bills as cuts in the proposals we
have made but the reality is we will see dramatic increases both as
a percentage and in real dollars in that area. And the point you
have made is that many of those expenses will be driven by
demographics that are very clearly in front of us and that if we can
find ways of preventing those illnesses that it will ultimately create
somewhere to our benefit. That is a strategy that makes sense. It
is a strategy that we have followed. It is a strategy that I suspect
over time we will continue to follow. This is a year which we are
doing deficit reduction and we have worked hard and fought hard
to be able to protect the integrity of the funding of NIH that we
have--
MR. MARKEY. Well wouldn't you prefer honestly to have to
have $5 billion less in tax breaks for the upper 2 percentile and $5
billion more in research for Alzheimer's and Parkinson's and these
other diseases that are going to hit just about every family in
America in terms of changing and altering the whole history of
those families. Wouldn't it be better now to rather than those tax
cuts to invest in that research and that prevention because of the
payoff we know will come because we have seen it in health, in
heart disease, we have seen it in cancer. Wouldn't it be better for
this generation to make that same investment and to not have those
tax cuts?
SECRETARY LEAVITT. What I feel very good about is that we
are targeting our investments of NIH in a way that will go across
not just Alzheimer's but across all disease categories. That we are
going to be able to begin to explore the value of the human
genome and the environment which I believe will in fact have a
substantial impact on the demographics you have spoken of. It is a
new way of investing our dollars and we are deploring in the
context of our critical path initiative, our road map initiative, and
other efforts to make certain that we are focusing on the--
MR. MARKEY. I know what you are saying, Mr. Secretary, but
after 36 years of NIH budget increases, we now have a 9 percent
cut in purchasing power over a three year period. It cannot have
anything other than a negative long-term impact on the likelihood
that we are going to find a cure for Alzheimer's and Parkinson's
which tragically will probably affect unfortunately about, you
know, a third of the people who are sitting up here today. And I
just think that in the long run whatever tax cuts, you know, the
White House, President Bush, and Vice President Cheney might
want to give to wealthy people has to be dwarfed by the epidemic,
I mean literally an epidemic which is going to hit America in
Alzheimer's and Parkinson's.
SECRETARY LEAVITT. But it is important to remember we are
still investing $645 million a year. It is not as though we are
terminating our investment, $645 million a year is not chump
change, it is a big investment and one that--
MR. MARKEY. But you are cutting the National Institutes of
Aging the baby boomers retiring--
MR. DEAL. The gentleman's time has expired.
The gentleman from Georgia, Mr. Norwood.
MR. NORWOOD. Thank you very much, Mr. Chairman and
Governor, thank you so much for being with us.
Let me just ask a quick question. I know you have only been
here a year and I bet you have figured out already that in this town
everything is measured by how much you spend and if you do not
spend more things are going bad rather than measuring things by
what the results are. We are trying to get to that but most people
still believe if you do not add more money every year then you are
really not doing things. Now the comment was made there would
be 9 percent cut. Is that correct?
SECRETARY LEAVITT. We will continue to see dramatic
increases in investment in all those categories. What we are
talking about is allowing programs to grow more slowly.
MR. NORWOOD. To my knowledge, we have doubled NIH in
the last 10 years, doubled. And all we are really saying as I
understand it is okay one year in order to try to get all this
spending under control they are just simply not going to get an
increase. I hardly think that is the end of the world. Certainly they
ought to be able to manage it so it is not the end of the world. If
they cannot, they need to change the focus at NIH.
SECRETARY LEAVITT. I have learned over time, I have been
through a number of budget years where things were not as good
as others. I have learned over time that it is during these periods
where we find new ways and improved ways to invest and I think
what I pointed out earlier where we are beginning to invest in
trans-institute initiatives that benefit every disease category. It did
not take me a full year to figure out that at NIH there are 27
institutes--
MR. NORWOOD. Right.
SECRETARY LEAVITT. --all of which are devoted to some kind
of disease or a major component of health. Every one of them has
things in common and if we are investing generally in the basic
science of genes and the environment and other things it helps us.
MR. NORWOOD. I have three questions and I will probably
never get to them but I will try. One of the things that has
concerned me in the budget is that we ignore the fact that our
physicians treating Medicare patients are going to get a cut of 4.6
percent and that means we will have to fix it because that is not
just a reasonable thing to do. And then we also ignore the fact that
MedPAC has recommended the 2.8 percent increase, which I
happen to think MedPAC is a pretty darn good outfit. Now my
understanding is, my feeling I guess I should say is, that at least
CMS thinks we are going to solve all this problem by going to pay
for performance and I am just not so sure we are going to solve all
these problems. I understand the goal of pay for performance and I
understand there can be some good things that come out of that,
but a lot of the legislation that we are hearing about or listening to
does not talk necessarily about quality of care but it talks about
efficiency. And I am concerned that if we write that language
wrong, we are going to be actually rewarding our physicians for
providing the cheapest care and not necessarily the best care. Now
I do not believe, and you can correct me, but I do not believe you
would think that physicians ought to be rewarded for providing
cheap care unless there are strong measures at CMS that show that
they are also providing quality care. In other words, it needs to be
quality care for less money for this to work. And if your crew has
any suggestions about legislative language that can assure
efficiency measures that are going to be created out of this, I really
would appreciate it. And I have listened to Dr. McClellan for
hours on end. We have talked about this and the potential
unattended consequences there I think are very, very high, and if
we are going to wait to get to pay for performance before we ever
solve the physician payment formula, we are going to face this
every year. Why don't we face up to the fact that we are losing
docs now because of payment in Medicare and let us give a modest
increase as NIH keeps talking about wanting and everybody else
wants Federal employees wants, give them a modest increase so
we can work this out.
Next question, I just need to go on. What are you going to do,
what is HHS going to do with at least the insurance plans in Part B
that are engaging in inappropriate conduct? And since we have no
patient protections, I am fairly certain we can count on that and
that is going to affect the pharmacists as it today affects the
dentists and the physicians. And I just hope you guys are going to
be ready to get in there and fight for them.
SECRETARY LEAVITT. The plans need to keep their
commitments and if they do not, we have regulatory authority and
we will use it. One example of that, plans are required to have a
24 hour response. There needs to be an adequate or rather let me
restate that. They have a requirement to have a 1-800 response.
We are now inventorying to find if they all do. If they do not, you
can count on the fact that I am going to use the regulatory authority
given to me in the law to assure that they start.
MR. NORWOOD. Well they are already out there telling dual
eligibles oh no, you are not a dual eligible you need to sign up for
this plan. They are doing that now. And in conclusion, I think you
are doing a great job with this. We are 44 days out. Pharmacists
of course are upset and confused and got a cash flow problem. But
to a man when I talk to them or a woman, they tell me this is going
to get better. We think in time this is going to get better and this is
going to work itself out. I think it is, too.
MR. DEAL. The gentleman's time has expired. We appreciate
the comments.
Mr. Green of Texas.
MR. GREEN. Thank you, Mr. Chairman.
And again, thank the patience of the Secretary. We only have
these opportunities maybe a couple times a year so thank you for
listening.
Mr. Secretary, we all know that the President, you and the
President share commitment with members on both sides of the
aisle for a community health center program. I have a health
center in my district, Pasadena Health Centers, one of the 88
HRSA's that announced that it received new access points
beginning last December 1. And I understand the funding date was
pushed back because Congress did not finish the work on
appropriations until late December and yet to date this money has
not been approved and appropriated and has not gone out the door.
Community health centers like Pasadena operate on a very slim
margin. They provide terrific care and are uninsured in our
communities and they count on this grant funding to sustain their
operations. I know you and Dr. Duke at HRSA are committed to
delivering the funding so can you give us a date certain when the
centers may receive this grant funding and more importantly when
this money is delivered will it be retroactive to December 1?
SECRETARY LEAVITT. When I was in Houston and you
mentioned on Labor Day we talked a little bit about community
health centers and the mayor, actually Mayor White at that point
indicated the impact that the evacuees were having on your city.
MR. GREEN. In fact, you actually backdated for those five new
centers in our area.
SECRETARY LEAVITT. Are you talking about those funds or are
we talking about the funds after that point?
MR. GREEN. No, we are talking about the new center funds
that they were supposed to receive December 1 for that
designation.
SECRETARY LEAVITT. I do not know the answer to this. I am
going to have to get back to you.
MR. GREEN. Okay, if you could because I know that center
happens to be in my district and we have four other ones and I am
sure the rest of them around the country are calling their Members
of Congress saying well when are we going to see the money now
that it is February 1. And again, that was Congress's fault because
we did not do it until the reconciliation or they passed the budget.
The next question and again I want to thank you for your
response to Hurricane Katrina at least in my area. Many health
care providers stepped in and took care of the evacuees without
regard to their ability to pay. And when the City of Houston called
to let us know that hurricane survivors were having significant
problems accessing their prescription drugs, our office received an
immediate response from a lot of the large pharmacies, the chain
pharmacies. In fact, it took action within hours to form an
agreement with the State to get evacuees the prescriptions they
needed. And I know you were at the Reliant Park and also at
George R. Brown. I know the First Lady was there and saw these
pharmacies that were set up literally within hours. Despite the
creation of an uncompensated care pool in the Texas Medicare
Labor, these pharmacies have still not been reimbursed for the
prescriptions provided to evacuees. And to make matters worse,
the Texas Medicaid Program has informed the pharmacies that
CMS headquarters directed them to require patient's original zip
code for reimbursement information, and that is extremely difficult
to obtain retroactively, particularly four months later and given the
mobility of the evacuee population. Was it true that CMS directed
State Medicaid programs require this information to the collection
which is overly burdensome in my view, and can you clarify
whether the pharmacies should seek reimbursements from
Medicaid or FEMA as it seems these providers have consistently
received conflicting information. Again, these are the ones set up
under the emergency situation with 200,000 people coming in.
SECRETARY LEAVITT. Congress was responsive to our request
to provide funds and we have, there is not an unlimited number of
funds that were provided and we want to make sure that we are
using them to compensate the right people. We want to make sure
we do not get to a situation where because of poor record keeping
we are paying people for things they did not provide. And so I
suspect that people at CMS have created criteria to try to make
certain we are doing the right things with taxpayer dollars. If it has
become more onerous than it need be then perhaps we need to take
a look at it and I would be happy to ask CMS to do that. I am not
aware of those requirements and this is the first I have heard of it.
MR. GREEN. Then I will probably just follow up with a letter
because the pharmacies actually provided it at those shelters and
again they took the information that they knew they could get at
that time, but the pharmacies are the ones who were not receiving
reimbursement. The prescriptions were filled on an emergency
basis because people showed up without their prescriptions,
without anything, but they did go through the system out there at
the Reliant Stadium and all positions that were literally from all
over and they took down their information and so they were able to
fill pharmaceuticals for them but I will get a letter to you--
SECRETARY LEAVITT. Thank you.
MR. GREEN. --on that so we can do that.
The last question I have in the 18 seconds is the elimination of
health professions grants. It has become clear that in the past
decades we have problem with capacity for providers of primary
health care, and at the same time the budget seeks to stand HHS
programs that direct, in direct care service is given budget cuts in
health profession programs, how can the agency plan, enable, and
secure a primary health care workforce? And again, we are
looking at the health care centers that we are creating all over the
country, community health centers, and is there something we can
make sure that the personnel are there for our community centers?
Thank you, Mr. Chairman.
MR. BILIRAKIS. [Presiding] I thank the gentleman.
The gentlelady from New Mexico, Mrs. Wilson to inquire.
MRS. WILSON. Mr. Chairman, I came in late. I think there
were some other members who--
MR. BILIRAKIS. Well I have been asked to go right on down
the line so I am just following orders.
MRS. WILSON. Thank you, Mr. Chairman, I appreciate that.
Mr. Secretary, thank you for being here today. I have gone
through the budget and there are a number of things, I think that
are going to be issues of continuing concern and discussion, but
one of them I wondered if you could talk about a little bit is the
union Indian program. There is a set aside that urban Indian health
program in the past of 32 million that I think has been eliminated
in this budget proposal. And 75 percent of Indians live in urban
areas and that is only a 1 percent set aside in the Indian health
budget which is now being eliminated. And I wondered if you
could talk about how folks who do not live near the reservation are
going to get their health care.
SECRETARY LEAVITT. I can. This is a good example of a
situation I found where we are funding in one side of HHS
community health centers and in another operating division in
HHS the Indian Health Service we were providing urban clinics for
Native Americans. And so I am just asked a question and I think it
is the right response. Why are we creating separate facilities in the
same department to serve essentially some of the same population.
And so what I have proposed is to combine those in a sense so that
we are serving those populations through our community health
centers. Rather than have two less than ideally developed
facilities, why don't we have one extraordinarily good one and that
is the strategy here.
MRS. WILSON. What does that mean for a member of the
Navajo Nation who is living in Albuquerque, New Mexico and for
the service where they get it, how they are enrolled, whether there
are co pays and so forth, how is this transition going to take place?
SECRETARY LEAVITT. We need to reach out to them and make
certain that they know that health care is available to them and
make certain it is extraordinarily good health care and that it is a
both welcoming environment and in quality. At least by my
assessment it does not make any sense for us to be funding two
facilities and sometimes in the same town and some cases serving
very similar populations when we could have one significantly
better facility if they were combining forces. And I recognize that
there are perhaps cultural reasons that they have chosen to be
served there but I do not think we are doing that entire population
any favors by dividing our capacity to provide care. And so we are
obviously going to have to change a pattern there but it will not
only be more efficient but I think they can get better health care.
MRS. WILSON. Have the tribes been involved in the planning
that has gone into this budget recommendation?
SECRETARY LEAVITT. There has been a lot of discussion about
this through the Indian Health Service. Now, you know, can I
testify today that all of them are crazy about the idea, probably not
because people like to have their own facilities. It will
undoubtedly affect a community of health care providers in a way
but this is efficient. It is a good use of taxpayer funds. And
frankly, it is a better way to serve people because we are going to
provide them with I think superior health care and better facilities
because we are combining them.
MRS. WILSON. And in Albuquerque we have multiple
community health centers and we have the Albuquerque Indian
Hospital and Clinic right next to UNM. I know that this is--have
you worked through, is your intention to close the Indian Health
Centers or is your intention to expand the community health
centers to cover the existing infrastructure for the ISS?
SECRETARY LEAVITT. I hesitate to make a blanket statement on
that matter because I am guessing there will be situations where
both will be true. There will be places where we might be advised
to close one. I suspect there is or there will be. But again the
purpose here is to serve people better and to not duplicate services.
I think this is a very good use of taxpayer funds and it looks after
the way we can best serve people.
MRS. WILSON. I am asked to stay engaged with you on this as
this develops because if it is news to me, I am betting that it is
news to many of the Governors and pueblos who I represent and
there are 48,000 urban Indians in Albuquerque who have had
continual problems with the decline in funding in the Indian Health
Service. And we cannot just say well this it the way we are going
to do it and not plan it.
SECRETARY LEAVITT. A budget is a proposal for discussion
and obviously we will begin that conversation. The extent of
which has happened in Albuquerque I cannot attest to that. I can
tell you we have some of the most compassionate people on the
planet in the Indian Health Service who want very much to serve
the population.
MRS. WILSON. Thank you, Mr. Chairman.
MR. BILIRAKIS. Mr. Stupak?
MR. STUPAK. Thank you, Mr. Chairman.
Mr. Secretary, if I may, let me ask you a few questions about
Accutane and then I want to ask you a little bit Hurricane Katrina
again back in the Gulf Region. Last Friday, Mr. Secretary, the
FDA Advisory Committee met for the second time in two years to
discuss the safety of Accutane. The Advisory Committee was
updated on a new pregnancy risk management program called
ipledge. While I am pleased to see some progress that has been
made to better protect the public from the risk of pregnancy from
Accutane, I have some concerns about the ipledge that I expressed
in written comments to the Advisory Committee. For instance, I
am concerned that the implementation of the program has been
delayed and the Academy of Dermatologists has called for another
delay. The FDA said at the Advisory Committee's hearing after
the Advisory Committee hearing that it would not delay the
implementation. Can you reaffirm that it will not be delayed?
SECRETARY LEAVITT. On August the 12th of 2005, FDA
approved new labeling for Accutane and included a strengthened
risk management program. The sponsors agreed to implement the
risk management program that requires registration in the program
of wholesalers and prescribers and pharmacies and patients who
agreed to specific responsibilities designated to minimize
pregnancy exposures in order to distribute and to prescribe and
dispense them. I am not sure, I am not familiar enough directly
with this to give you the assurance you seek and maybe those who
can and I think this is likely something I need to get back to you
on.
MR. STUPAK. Okay, if you would. Also I have given you a
slide there and also a sort of like a little outline of things that have
happened since February 1, 2001, and it ends at November 21,
2002. And I am pretty concerned that the FDA is failing to protect
the American public from the psychiatric effects of this drug. The
FDA put a new advisory on their website last May after reviewing
a study by Dr. Bremner of Emory University. In fact, that is the
study I just handed you. If you take a look at the study, it says in
the website the FDA says the FDA continues to assess reports of
suicide or suicide attempts. All patients should be observed
carefully. Patients should stop use if the patient has any of the
symptoms. But the Bremner study here shows us there is a 21
percent decrease of brain metabolism in the area of the brain that
mediates depression and in the study by Mr. Bremner 50 percent of
the subjects experienced headaches which were associated with the
decrease in brain function. So you have over 160,000 people
taking Accutane and of that 160,000 if half of them are having
these headaches as the Bremner study shows, that is 80,000 people
who could be experiencing the lack of brain metabolism of this
drug. So my question to you is this. The FDA has received reports
of 282 suicides since as of December 31, 27 suicides alone last
year, and according to the FDA that only represents two or up to as
much as 10 percent of the real number that is out there.
So my question, Mr. Secretary with all these web updates,
which studies, research, tracking and information sharing is going
on between the FDA and National Institutes of Health to ensure
that teenagers and their families are being protected from this drug
other than just posting something on a website.
SECRETARY LEAVITT. Mr. Stupak, that seems like a very good
question. It is not one I am technically capable of answering
today.
MR. STUPAK. If I may, Mr. Chairman, I will put those in the
record. Could you respond back in writing to the committee then?
SECRETARY LEAVITT. I would. And speaking of responding
back in writing, earlier in your opening--
MR. STUPAK. Right.
SECRETARY LEAVITT. You talked about the Katrina letter.
MR. STUPAK. December 15 letter.
SECRETARY LEAVITT. Yes, I spoke to Mr. Dingell and told him
that we had hoped to deliver a response. I have the response now.
I did not an hour ago. I will be delivering this in person to Mr.
Dingell. I just want you to know about it and also Mr. Brown and
it will be responsive.
MR. BILIRAKIS. Without objection that will be made a part of
the record.
[The information follows:]
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
MR. STUPAK. And without objection can that slide and
document I submitted to him be--
MR. BILIRAKIS. Got it.
[The information follows:]
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
MR. STUPAK. Thank you, Mr. Chairman.
Getting back to Katrina and I appreciate the letter a few months
ago. We appreciate it. Again, yesterday the Government Reform
or I should say Mr. Davis released a report: A Failure of Initiative.
And as I said in my opening comments that it seems like now in
New Orleans it is business as usual. And when I read this report of
Mr. Davis he said passivity did the most damage. The failure of
initiative costs lives, prolonged suffering, and left all Americans
justifiably concerned our Government is no better prepared to
protect its people than it was before 9/11 even if we are. So when I
asked you earlier that I would hope that you would become more
aggressive in the health care in New Orleans, we were down there
for three days and they have not been reimbursed since August.
Big Charity has not been reimbursed since August 29 when the
hurricane hit through January and there are some questions like,
"well they have not submitted proper documentation." But if you
do not have power, no computers, you are delivering care,
everybody agrees they are delivering care, they have to be
reimbursed. We have to cut through the red tape and get these
folks some money if they are ever going to provide health care
material. My time is up already. The point is this is being done to
expedite and provide health care down there.
MR. BILIRAKIS. Brief response, please.
SECRETARY LEAVITT. We do not lack aggressiveness on this. I
will be down there again on Tuesday. I was there just a couple of
weeks ago. I think it was one of the great opportunities to
demonstrate not just a renewed health care system but an
exemplary health care system. And I could act philosophic on it
but the time is up and I think in the letter you will see our vision is
real and our commitment is too.
MR. STUPAK. And more than vision we need health care.
What about them there? Their vision may be great but how do you
implement vision if no one is implementing that on the ground?
SECRETARY LEAVITT. I think what you will find is that much
of the health care that is there is being provided by HHS and you
saw uniformed people running all over New Orleans that were
providing it.
MR. BILIRAKIS. Mr. Fossella may inquire.
MR. FOSSELLA. Thank you, Mr. Chairman, thank you, Mr.
Secretary for your patience and the job you do, appreciate it and
appreciate you being here today.
The first question deals with Ryan White funding and I am
going to follow up a little bit to Mr. Engel's question before but a
little more specific. I guess one of the President's principles calls
for the creation, the severity of need for core services index to be
used and the revision of Title 1 and Title 2 funding formulas. The
index as I understand it to include among other measures the
availability of other resources including local, State, and private
resources. It is my understanding that HRSA has formed advisory
panels to help the development of such an index and the panels
have discussed including an end adjustment that factors available
resources in State's capacities to pay for services. New York City
is in New York State and has stepped up to the plate when it comes
to administering the Ryan White from the dedication of significant
resources. Such an index includes an adjustment for available
resources. I guess the question we have then does this create a
disincentive for jurisdictions like New York and will HHS if they
have express that they will not--they have in the past, I believe
pursued policies with inherent disincentives. So are we with this
new sort of proposal creating a disincentive for cities or States like
New York?
SECRETARY LEAVITT. I hope not. I mean, I do not, I have not
thought that through deeply enough and I appreciate you raising it
and I will give it more thought. I will investigate that. I do not
know that I have got a response that would be satisfying to you
because I have not thought it through deeply enough.
MR. FOSSELLA. That is fair enough. And along those lines and
I will follow up on our conversation then because it complements
in a way with the notion of double counting as referred to and we
are just concerned that with New York City, New York State sort
of leading the way, perhaps other municipalities and States around
the country have a lot to learn in administering Ryan White and
servicing those most in need and will be prepared.
SECRETARY LEAVITT. Thank you.
MR. FOSSELLA. A second series of questions just deals with
bioterrorism. As you know, Mr. Secretary, we have a similar
problem with Homeland Security funding. There are two little
pockets of money. One sends money to 50 States and four cities
for detection and monitoring both from CDC and hospital
readiness. And the other is Cities Readiness Initiative or CRI
sends money directly to 23 cities. And the program as you know is
new, it is the first year. Its primary purpose is local planning and
coordination for bioterror preparedness. A concern we have is that
under the first part called CRI, New York City which we believe is
still about the number one threat when it comes to terrorist activity
is 23rd out of 23 cities in terms of per capita. It may be solid in
terms of absolute but it is 23rd of 23. And the second part for
CDC for public health preparedness in terms of hospital
preparedness it ranks respectively 24th of 54 and hospital
preparedness 54 out of 54. I guess my question to you, Mr.
Secretary, is do you believe that we should be moving more
towards a risk based approach when it comes to allocating
bioterrorism formula or is it status quo acceptable?
SECRETARY LEAVITT. I believe that risk based is more
appropriate and we are beginning to tilt our grants in that way.
MR. FOSSELLA. So places like New York City, or wherever
that risk may be, should expect to see an increase in formula at
least on a per capita basis if we move in that direction you think?
SECRETARY LEAVITT. In Government we are masters of
proportionate distribution. We are not as good at risk based. We
need to get better. There are times when proportionate distribution
is appropriate but where we are measuring risk it is my judgment
we ought to be tilting toward risk as opposed to proportion.
MR. FOSSELLA. Well I thank you because I know the House is
on record in moving that direction, the Administration is on record
with both Secretary Chertoff and yourself and we know it is the
other body that seems to be an impediment to this but for the good
I think of the American people who deserve the best when it comes
to this type of funding and I appreciate your efforts in helping us
move in that direction.
I yield back, thank you.
MR. BILIRAKIS. The chair thanks the gentleman.
Ms. DeGette for six minutes.
MS. DEGETTE. Thank you, Mr. Chairman.
And welcome, Mr. Secretary. Along with Mr. Stupak and Ms.
Schakowsky, I was one of the three Democrats on the O&I
Subcommittee who went to New Orleans a couple of weeks ago.
And certainly everybody is concerned about the situation down
there. But we were appalled but what we saw so many months
later. I do not think anybody could agree that we are in good shape
with the health care delivery system in New Orleans and I am sure
you would not think that either. I mean Charity Hospital which is
the safety net hospital remains closed to this date with no clear
reopening date. The have the tents set up in the convention center
which I guess they will be leaving in March. The ambulances do
not have a place to go. There is no level one trauma center. I
guess there is one opening 6 miles or so away soon, but in the
meantime, and even after that opens with the surrounding hospitals
that are open, what we were told is people who need to go to the
emergency room have to wait four to 24 hours to be seen in the
emergency room and it is the type of thing they have got 25
percent of their population back in New Orleans if as is projected
which I think is optimistic but if 65 percent of the population
returns by the fall, we are not going to be just in a delay situation,
we are going to be in a crisis. So kind of based on those
observations, I have some questions for you.
The first question I have, Mr. Secretary, is FEMA is making a
lot of the key decisions regarding the funding of Charity Hospital
and some of the other public hospitals. And so my question is
FEMA regularly briefing HHS and you as to the funding decisions
that are being made with respect to health care?
SECRETARY LEAVITT. We are focused primarily on rebuilding
the system. And the extent of the actual deliberation or briefing
that is going on I cannot personally attest to.
MS. DEGETTE. Would you mind supplementing your
testimony to let me know if there are regular briefings, how often,
and if there are minutes kept at those briefings?
SECRETARY LEAVITT. You may have other things you would
like to outline that I am prepared to answer. Obviously I am not
saying anything, but at some point it might be helpful for you to
for me to outline the process we are going through to help--
MS. DEGETTE. Well let me ask my next question which may
lead to that, because what I saw is that Charity Hospital, which is
operated by Louisiana State University, estimated that it would
cost $257 million to basically redo that facility because the old
hospital was really not in line with modern medicine so they had
this sort of exciting vision but then FEMA under the Stafford Act,
FEMA cannot pay for a brand new hospital if the cost for
rehabilitation of the original hospital is 50 percent or more of the
cost of a new facility. So Charity is sitting here saying we do not
have a dime from FEMA. In the meantime, the private hospitals
are reopening but they are not level one trauma centers and
furthermore, they are not set up to deal with the poor and
uninsured like we have in New Orleans. And so it is like the worst
nightmare of bureaucracy for the Charity Hospital folks because
they have no money from FEMA. The private hospital across the
street is opening up later this month because private insurance
money paid for it. And so my concern is how--I know you have
got a vision and I would like it if you would briefly talk about that
vision but how long is it going to take?
SECRETARY LEAVITT. First, let me say that we are
compensating or will be soon with the dollars that were recently
appropriated the interim health care providing that is going on in
parking lots and in tents--
MS. DEGETTE. Well that is fine but that is not a health care
system. You would agree with that.
SECRETARY LEAVITT. No, it is not. And the second thing I
would say is I ironically was in New Orleans on the week before
the hurricane and I was told by the head of public health there that
if I were to go through an emergency room anywhere in New
Orleans on that day private or public, I would have a 24 hour
waiting system. Reality is that it was a lousy system before and--
MS. DEGETTE. So you can only imagine what it is like now.
SECRETARY LEAVITT. No, I have seen it. I know exactly what
it is and it needs to be improved. The third thing I will point out is
that in best estimates the City of New Orleans will be a different
place and will have different meaning than before. There are a lot
of proprietary interests right now and I do not mean that just to
imply profit and non-profit. I mean to say that there are a lot of
large hospitals and they are not going to need all the large hospitals
they had before and they do not want, we do not want to have a
system that is like they had before where the only place you got
treated was in an emergency room. What we want is a system that
responds where everybody has a medical home where they are able
to get help in community health centers and centers that ultimately
funnel people into a primary care system and where people have
the capacity to get health care when it is needed.
MS. DEGETTE. That is great. When is it going to happen, Mr.
Secretary?
SECRETARY LEAVITT. Well it is going to happen as rapidly as
the local community can rebuild it. We stand ready--
MS. DEGETTE. Well how can they rebuild? I mean Charity
Hospital cannot rebuild under any scenario because they do not
have private insurance like the private hospitals do. They rely on
State and Federal dollars and the Federal Government has not
given them a dime or any indication when they are going to
approve some plan that will give them a dime.
SECRETARY LEAVITT. We obviously need to continue this
conversation. We are paying their Medicare and their Medicaid or
will be paying their Medicare and Medicaid claims. There are
questions in the medical community, the broader medical
communities as to how to reconstruct it. The role of Charity
Hospital is still very much part of discussion there. And that is the
reason there is a delay because they need to have a plan, a
comprehensive plan that will say here is what we want this to look
like. And just going off and building or rebuilding one hospital is
not going to--
MS. DEGETTE. Right, but Mr.--I know my time is up and not
to beg the question but it is like the cart and the horse. They
cannot have a plan if the Federal Government is not working with
them as a partner to let them know how much Federal funding they
are going to have.
SECRETARY LEAVITT. We are working with them every day.
MR. BILIRAKIS. Mr. Terry for six minutes.
MR. TERRY. Thank you.
Thank you, Mr. Secretary for being here and I have a series of
questions regarding Part D dual eligibles long-term health care and
our pharmacists and if that was answered in the ten minutes I had
to excuse myself for another meeting and come back I apologize
but in the old Washington list and if it has been said before it has
not been said by me and therefore you are going to hear it again.
As mentioned to you at another time at least in the State of
Nebraska, I am sure it is similar in other States regarding the
prescription D sign up of dual eligibles there seems to be several
that have been put into a program that did not meet their
prescription needs. That is one issue. I think that one is the
manageable one. The other one is that the State seems to have just
missed many dual eligibles that are in no program and there seems
to be some confusion about the dual eligibles that are in long-term
care facilities that are not being covered or in the alternative if they
were put into a prescription D program, the policy there being sent
rather large bills for their co pay. Sometimes the co-pays being
hundreds of dollars which seems to defy what we passed. So with
that little bit of background, can you explain to me and my
pharmacy and my dual eligible constituents what is being done so
that the States or the Federal Government pays with dispensing
pharmacists and the costs of the drugs that they are observing
themselves which I think is pretty darn heroic of them to do. They
do not have to do that but they are, as well as, the fact that they are
being held responsible for the co pays for these folks. And as I
understand there is a difference between long-term care facility as
well and just your ordinary non long-term health care folks that are
dual eligible. And the other part is there seems to be some
growing fight over dispensing fees and whether or not your
organization, or CMS under your leadership, can get involved and
start resolving some of those dispensing fee issues that they, the
pharmacists are being paid is less than the contracted price or that
they are making a pharmacist submit the claim so many times and
at 10 cents a shot in essence they are eating up their dispensing fee
just in submitting the claim. So if you could answer those three
questions I would sure appreciate it.
SECRETARY LEAVITT. If a person who is a dual eligible walks
into a pharmacy and they do not have a plan or do not think they
know what plan it is and the pharmacist cannot identify where they
are, the pharmacist has the ability to enroll them in a plan on the
spot. And when they enroll in the plan, it is called the Well Point
Plan, they are then eligible to be reimbursed for that drug through
the Well Point Plan and the reconciliation will be made by CMS as
that the pharmacist will get reimbursed. In the case of co-pay, now
I have been in 20 States in the last two weeks. I have been in
pharmacies in most of them. I have stood at the counters, I have
walked through the process with people. I have stood and waited
for the 1-800 line to answer. I think I have got a pretty clear
picture of what is happening. And what I find happening at the
pharmacies is that at the beginning of the day or through the course
of the day a pharmacy may accumulate a handful of prescriptions
that they were not able to reconcile. At the end of the day, they
have to go back and make the calls to Medicare but they ultimately
find or work through the problems. What I am finding is that there
are limited numbers. And it is limited numbers of situations where
people are literally outstanding more than a day or two or three on
a prescription. Now I acknowledge the fact that it has required
additional work for them, and pharmacists have been heroic.
There is little question in my mind that the entire pharmacy
industry is being affected by this, not just Part D, but we are seeing
a dramatic change in the way pharmacies work right now and it has
created the same kind of problem that happened when any market
changes. I do not know if that is responsive to all three of your
questions, but I hope it is responsive to at least two of them.
MR. TERRY. Well it did not hit on the enforcement of
dispensing, but we will get to that on different date or something.
SECRETARY LEAVITT. I can quickly just tell you that with
respect to Medicare Part D, the pharmacies work with their
networks and if there is a cost reimbursement issue it is with the
network, not with CMS.
MR. TERRY. All right, 44 seconds left. Getting back to
payments for those pharmacists that when they had not filled
prescriptions when there was not a plan for a dual eligible, can
they be reimbursed for that or are they going to have to eat those
costs since they did not sign somebody up?
SECRETARY LEAVITT. No, if a person is over 65 and a dual
eligible, they are in a plan. If they are not in a plan they should
have been in a plan and the State--
MR. TERRY. But some are not.
SECRETARY LEAVITT. Well let us work on that together
because there are very few situations that I am aware. I know there
is a solution to it, I just cannot come up with it sitting here.
MR. TERRY. I appreciate that.
I yield back as my time is up.
MR. BILIRAKIS. Ms. Capps for six minutes.
MS. CAPPS. Thank you.
Thank you, Mr. Secretary. I appreciate the opportunity to talk
with you. Back in 1974, Congress appropriated the equivalent of
$609 million in today's dollars for nurse education programs. The
Administration is now emphasizing preparedness for pandemic flu
and a threat of bioterrorism--and earlier this afternoon you
mentioned increased dollars for pandemic flu stockpiling. I want
to talk with you about the people who will be giving those
antivirals. And I also want to talk about the fact that our first
responders in our communities, which nurses are a major player
for a bioterrorist attack or a flu attack are critical to the efforts to
respond to such a situation and I'm thinking about the hurricanes
that affected the gulf coast. Do you think you can--we know who
is in great need and some often in short supply. The disconnect is
the fact that the President's Budget proposes level funding for Title
8 nurse education programs at $150 million. This is $1 million
below fiscal year '05 funding. And yet HHS's own Budget in
Brief quotes the HRSA report which predicts that the nursing
shortage is expected to grow by 229 percent in 2020. Last year,
the shortage of nurses in this country was around 7 percent, which
is close to 150,000 nurses not at their jobs doing work that is
needed for today's health care needs. By 2020, given this scenario,
we will have over 800,000 nurse positions going vacant. That is
without a Katrina, without the surge effect of a bioterrorist or
pandemic flu attack. You said it is only a matter of time. It takes
two to five years to educate and prepare a registered nurse. I am
one, I know. You said yourself in your testimony that a budget is
an investment in the future. Funding for nurse education needs to
be invested now in order to expand the nurse workforce shortage.
That would be to meet today's needs. I want to ask you to respond
to whether or not we have adequate nursing staff levels and
preparation for such to provide the health care that we will surely
need in the event of a disaster.
SECRETARY LEAVITT. Ms. Capps, may I say that I am fully
conscious and agree with you that we have to train more nurses. I
would like to talk about this at two levels. One is the current
budget and then I would like to spend most of my time if I could
talking with you about 800,000 nurses in the existing system may
or may not be even achievable. We need to begin to think about
how we--we need to think about new ways of training nurses to
step outside the traditional method of training where people are
able to--there are a number of different hospitals for example who
have the capacity to train credential nurses within the hospital.
MS. CAPPS. And many of them already do.
SECRETARY LEAVITT. And we need to expand that kind of
thing because it allows us to do it more efficiently, and I think the
argument can be made that it is very high level of quality. We are
focused in this budget on actually targeting the areas where
specific nurses are needed or specific types of nurses and types of
areas we need nurses as opposed to a more generalized approach.
We also recognize the faculty is the big problem.
MS. CAPPS. That is what I am talking about. Nurse education
is what has declined so dramatically in funding.
SECRETARY LEAVITT. So we have chosen to focus our funding
on faculty and not just the broad not--
MS. CAPPS. But I do not see evidence of that.
SECRETARY LEAVITT. As we appropriate the dollars there will
be over $100 million. That is the way we will be targeting our
outlines.
MS. CAPPS. Well nurse education programs are being flat
funded. They are going to be receiving less funding. And another
thing you said is you would want to target them for certain specific
needs but they are needed in every community. And now we have
a model, mostly it is community colleges. I know particularly one
challenge, which is the reimbursement rate for faculty positions
with a master's degree in the community college, are less than
what is provided for a critical care nurse or a public health nurse
within the community system. That is just one challenge but there
are not enough dollars there to do any of the things that you have
talked about.
SECRETARY LEAVITT. Well as you know our method of
funding medical education particularly for nurses comes from a
number of different of sources. For example, our graduate medical
reimbursement is one method. And here--
MS. CAPPS. Is that for nurses or for doctors?
SECRETARY LEAVITT. Well it is primarily for doctors.
MS. CAPPS. Yes.
SECRETARY LEAVITT. It does not--
MS. CAPPS. It is much higher than that for nurses. It is
woefully short in that area, too.
SECRETARY LEAVITT. Your point is a good one and I concur.
What I am suggesting to you is that our effort here is to fund
faculty positions more intensely.
MS. CAPPS. Well whatever model you are using, like some
innovative plan within a hospital, I am open to any ideas but I have
not seen it yet and I am hoping now that my time is just about up
that there would be a way that I can stay in touch with you on this.
I work regularly with schools of nursing and nurse faculty. They
have talked with me individually and professionally within their
groups and this is a crisis, meeting today's needs and we can only
shudder to think of what we will face. You can stockpile all the
antivirus you want but unless you have somebody there to care for
the sick and the dying it is not going to do a lot of good.
SECRETARY LEAVITT. Thank you. I would like to continue the
conversation. There are some areas that I think--
MS. CAPPS. Thank you.
MR. BILIRAKIS. Dr. Burgess for five minutes. Mr. Murphy?
MR. MURPHY. Thank you, I appreciate that.
MR. BILIRAKIS. Mr. Murphy for six minutes.
MR. MURPHY. I have to run out of here. Three things I want to
mention. One Mr. Secretary has to do with the previously
mentioned issues of the cuts in mental health funding and I
recognize there are concerns for overlap but still the areas of
mental illness are I think the funding for them is woefully
inadequate. And as so often happens in Congress and in part
because OMB only scores spending, they do not ever score savings
and we have a warped sense of looking at things. That integrated
health care what we look at how mental health funding and, excuse
me, mental health treatment can save the costs of treating such
things as heart disease, diabetes, lupus, back pain, and so many
things half. I mean they are massive savings. And so I really am
concerned about these cuts and I hope that that is something you
can take back and look at how we can do it better. It is not just a
matter of cutting the funding. It is doing it better, more efficiently,
and looking at integrated care. And I just want to leave that as a
comment.
The second thing I want to talk about with you is community
health centers and you and I talked about this as we were walking
down the hall here. But is legislation going to try and help us get
more doctors in those centers? I think building these centers are a
marvelous aspect, it brings health care to the underinsured and the
uninsured. It helps to reduce the cost of such things as Medicaid
funding by 30 percent, but we do not have enough doctors, nurses,
podiatrists, physiologists, dentists, and we have legislation that
allows doctors to volunteer. As you know that it is--they cannot
because they cannot be covered by insurance at this point. And I
just wanted to give comment on some thought you might have
about helping to move that.
SECRETARY LEAVITT. Well I was surprised that that was the
case in our conversation and I have asked a member of my staff to
help me understand what barriers there would be to changing it. I
am in community health centers all over the country and I see
doctors who are there in one fashion or another and they must be
employed there and not volunteering. We need to enable people
no matter what their capacity to volunteer and I am looking
forward to working with you on this.
MR. MURPHY. I appreciate that. And you understand that if
Dr. Burgess or I wanted to volunteer somewhere we could not do
it, the community health centers would turn us away, but if they
wanted to pay us it would cost even more to have us, so I
appreciate that.
The other thing I wanted to mention is an area that the CDC
has identified as a great concern. Another area where I think
massive cost savings could come if we reward how hospitals and
physicians and clinics can make an improvement. Instead we only
pay for problems if it has to do with infections: pneumonia,
methadone resistance, staph infections, or urinary tract infections.
If a patient is in a hospital or a clinic or nursing home and they
contract one of these, Medicare, Medicaid, other funds, the VA
pays for that. And even if the clinic loses money in the process we
would still pay more, and yet we recognize that some hospitals
have made tremendous advances in reducing infection rates and I
believe we should be doing it and drafting legislation on this is be
able to offer some funding stream to reward them for that. CDC
estimates there are 90,000 deaths a year from infections that occur
in medical settings. And I wonder if you have any thoughts about
this, if this is something the Department of Health has been
looking into that finding a way to work with hospice clinics and
practices to reduce infection rates and how that can save money.
Again, it is one of those things that CDC cannot possibly score
because if we were to say let us pay whatever that fee would be if
you show, if you demonstrate reduced infection rates. And yet it
would save, things like this could save more money than the other
things that we are looking at in terms of--let me just speak to it as a
potential patient, I would like to know that. I would like to know
what the facility I am going into, how its performance has been on
this matter because I think it speaks very much to the quality and
this gets back to the idea of transparency and being able to give a
sense of disclosure as what a facilities results have been.
We ought to be prepared to pay people better who have fewer
infections and it ought to be known to patients if they are in a
facility that has a disproportionately high number. There are some
hospitals I know in my area in Pittsburgh which have really
focused on this, and there are other places around the country
which in essence have been able to reduce some infection rates
post operative where everything is to near zero. It is I think a
massive benefit and one that I would hope that HHS could take a
careful look at. I would love to work with you in terms of crafting
some ways of awarding hospitals. I know one of their concerns is
once they start finding the data and reporting it that someone will
sue them because they are finding these problems and quite frankly
I think it is a greater benefit to our patients if we start seeing how
we can help them so I appreciate that.
SECRETARY LEAVITT. Thank you.
MR. MURPHY. I thank you, Mr. Secretary.
I yield back.
MR. BILIRAKIS. Mr. Allen to inquire.
MR. ALLEN. Thank you.
Thank you, Mr. Secretary for being here. I have a comment I
want to make and then some questions for you. The comment
relates to the opening statement of the gentlelady from Tennessee
who is no longer here but in her opening statement, she said that
tax cuts lead to greater Federal revenues. It is not true. She has
lots of company and many colleagues of mine on the other side of
the aisle routinely say that tax cuts lead to increased Federal
revenues. The President and the Vice President go out and say on
a regular basis tax cuts cause added Federal revenues. It is not
true. Last week Josh Bolton, the head of OMB when pinned down
and he is not easy to pin down, admitted that tax cuts reduce
Federal revenues. But he said there is probably, there is certainly
some stimulative effect to tax cuts properly structured but the net
effect is to reduce Government revenues. And therefore, you said
in your opening this was a time for deficit reduction. It was a time
for tough choices but my only point is to say in these
circumstances, many of us feel it is morally offensive to continue
to promote tax cuts at the upper end of the income scale and to
withdrawal health care services from low and middle income
people. That is the statement.
The question goes like this. The question really relates to how
we can save money because we both agree that we need to find
savings in these programs. I look at the proposals in your budget
and I do not see proposals that will actually reduce the cost of
health care. I see proposals in your budget that shift costs to
States. I see proposals that shift more costs to seniors. I see
proposals that will shift more costs to American families but I do
not see anything in there that will actually reign in health care
costs. It seems to me that the Administration's idea of controlling
costs is simply to pass the buck or the bill to someone else. If this
Administration were really interested in saving money, there are
several proposals that would save money for both the Federal
Government and beneficiaries.
Right now the Medicare Payment Advisory Commission I
think Mr. Miller would refer to it as a pretty darn good outfit and I
agree. MedPAC nominated a number of ways that we could save
money. We were overpaying Medicare HMO's. MedPAC
recommends eliminating the double payments to HMO's for
indirect medical education. Medicare makes direct payments to
teaching hospitals, it does not need to also pay insurance plans for
the same service. MedPAC says that would save $5.5 billion.
Does the Administration's budget include any proposal to
eliminate that wasteful spending?
SECRETARY LEAVITT. Mr. Allen, let me just enumerate a
number of proposals we have that I believe will--
MR. ALLEN. Well can I just get an answer to that question?
Does your, does the President's Budget include any proposal to
eliminate that wasteful spending?
SECRETARY LEAVITT. We do not view that as you have
characterized it. We think it is critical in order to assure that we
have availability of health choices in rural communities all across
America. If it is not used at some point in time, the Congress may
choose to consider it, but at this moment we believe it is necessary.
MR. ALLEN. Okay. MedPAC also recommends eliminating
the slush fund. That is $10 billion at the Administration's
discretion to further increase overpayments to the plans. And
according the CBO that would save $10 billion. Does the
Administration support a proposal to eliminate this overpayment to
plans?
SECRETARY LEAVITT. We believe that the payment structure as
it is currently constituted is necessary in order to assure that we see
a continued availability in every marketplace in those plans. We
think that there is a good reason in the long-term, as well as the
medium term, to create a competitive market that will, in fact,
force the cost of structured health care down as we have seen it in
the prescription drug benefit.
MR. ALLEN. Let me get to my last question. MedPAC--I take
it your answer to both of those questions is no. MedPAC also
recommends fixing the overpayment currently built into the risk
adjustment payments to Medicare HMO's, private plans that are
supposed to get lower payments if they serve healthy and therefore
cheaper beneficiaries and higher payments if they serve sicker and
more expensive beneficiaries. The Reconciliation spending cut bill
that just passed has phased out those extra payments for a few
years but there is still $19 billion in savings on the table for that
recommendation. These are all free recommendations from
MedPAC. I take it that the Administration's proposal does not
include that final savings either. Is that right?
SECRETARY LEAVITT. We very clearly believe that the way to
reduce health care costs, one of them is to have a competitive
marketplace and we believe that is being achieved. One example I
was prepared to cite was the prescription drug benefit where we
have seen the costs go from $37 on average to $25 that will result
in not just beneficiary savings but literally billions of dollars of
taxpayer savings.
MR. ALLEN. Have you seen the study that shows that those
payments are 80 percent higher than the VA pays for the same
drugs?
SECRETARY LEAVITT. I have seen that and they are nowhere
near an apples to apples comparison.
MR. BILIRAKIS. The gentleman's time has expired.
Dr. Burgess to inquire.
MR. BURGESS. Thank you, Mr. Chairman.
Mr. Secretary, you have been here a long time and I appreciate
your indulgence of this committee. I am going to make more of a
statement and there will be embedded within that statement
questions and perhaps just like Mr. Dingell I can get answers from
your office on those questions. I will go back to the point I was
making during my opening statement and it seems like a long time
ago now but the reimbursement for physicians, we have got to
focus on that this year. The Chairman brought it up, Dr. Norwood
brought it up as well. There was not a single day when I was in the
private practice of medicine or during my residency or during
medical school where I woke up and on the way to work that day I
said boy, I hope I can be inefficient and duplicative today. I
always went to work to deliver my best products. So the concept
of pay for performance is something that a lot of physicians look at
with a lot of disdains because we came to work to do our best work
that day anyway and you better pay up for that performance. And
currently we are not being paid. Now you know that I spoke with
everyone that I could find between Christmas and New Years to
beg for administrative relief about the what is euphemistically
called the negative update that physicians got the 1st of January
because although it was a legislative issue and the Deficit
Reduction Act did attend to that, there was a technical glitch that
kept the Deficit Reduction Act from going into and having a
course of law before the 1st of the year.
As a result, there was a negative update to physicians and I
have a sheet of letters from doctors in my district and indeed
around the county who sent me the letters that they are sending to
their patients that I will no longer be able to see you on Medicare
because I can no longer afford this continued string of cuts that is
happening to my reimbursement. As a consequence, we are losing
the doctors who are the peaks of their careers, the doctors who are
the best diagnosticians, the doctors who in fact take the least
amount of money to come to a conclusion and treatment plan for
patients. And that is doctors that are my age. And if we eliminate
them from the playing field, what we are going to have are doctors
who are just out of training who inherently it costs more for them
to deliver their care. Now if you want to structure the pay for
performance system on top of that quandary of physicians, I
submit to you that you are going to be diminishing the value that
you are ultimately going to get from a pay for performance system.
The same would be true of an information technology system.
I know Mr. Murphy wants to put millions and millions of dollars
into information technology. I do, too, but if we do not pay to
keep the doctors in the system who do the best care, then it does
not matter what kind of information system that we have, we are
not going to derive the value that we intend from that.
So again, I think we need to think outside the box. Can we pay
doctors under Part A? I think we should look at that. I think that
is a valid expenditure to make. Should we allow doctors to
balance bill? We have already income related the Part B premium,
why not allow doctors to balance bill? Chairman Barton brought
that up last year during one of our hearings on physician payment.
We have got to come up with a better solution than what we have
been doing because just standing pat we are losing doctors out of
the system.
As far as the issues in the City of New Orleans, I was a part of
that hearing and I have to tell you that it is a stark difference
between what is happening at LSU and what is happening across
the street at Tulane and I eluded to that in my opening statement.
Tulane was up and ready to go. They had stripped all the
sheetrock off the walls, they had reconditioned their electrical
equipment and refurbished their emergency room on the first floor
of the hospital they are ready to go. Now if on your ironic trip to
New Orleans a month or a week before the hurricane hit had you
stopped in Tulane, you would have seen a hospital that was ready
for a disaster. They did not know what was coming. They could
have been the North Ridge Earthquake but it did not matter, they
were ready and they had as a corporation sponsored DMAT teams
so they had people to come and help them when things got tough.
Now during the week of the storm and the flood afterwards they
were in just as bad a shape as everyone else. But in the months
that have followed, they have put a plan in place and yes they have
some insurance money but they have also made a commitment to
invest new capital because they want to be there on the ground
when the city is reborn. Contrast that, and we heard testimony
during the end of our hearing in New Orleans, other hospitals had a
plan but they never intended to use it. And you go to the other
health care facilities and they had a plan that they had purchased
because they are required to under Medicare, but they had never
opened the plan. Their plan remained call 911 if we get into
trouble, and we all know what happened to that system. So all I
would ask is as we funnel millions and millions of dollars into this
recovery process, and I know we must, we do have to look at the
things that went right and how can we capture those best practices
for other parts of the country that may be exposed to other types of
disasters.
Finally, I had an amendment on the Deficit Reduction Act that
would have streamlined the set-up of Federal qualified health
centers in areas that had been impacted by Hurricane Katrina and
their evacuees and that would have included some places in Texas.
For whatever reason, the other side pulled this out at the eleventh
hour in conference committee. I hope you will work with us to
streamline this set-up federally qualified health centers and these
are not poor counties but they are counties that have significant
poor populations. I have some of the highest infant mortality rates
in the country in the City of Fort Worth in some of my zip codes.
We needed a federally qualified health center there before Katrina.
Now that we have so many displaced persons from Katrina, we
need it even more or the numbers are only going to be worse this
year.
Thank you very much for your time.
Thank you, Mr. Chairman.
MR. BILIRAKIS. I thank the Doctor.
Ms. Solis to inquire.
MS. SOLIS. Thank you, how many minutes, sir? I did not have
an opening statement but six minutes?
MR. BILIRAKIS. You were not here, you waived.
MS. SOLIS. Okay. All right, then I will be quick.
Thank you, Mr. Secretary for being here. I think you may be
aware I represent a heavily minority district in California, East Los
Angeles in the San Diego Valley. One in three residents lacks any
form of health care coverage and about a third of our population
are children under the age of six without any form of health care
coverage. In terms of the Latino community though I have some
issues and concerns with respect to how we provide assistance to
cover the 13 million Latinos that are currently uninsured out of the
total 44 million Americans that do not have any health care
coverage. And I say that because I understand that there are some
programs that are currently due to be reduced and these programs
as I understand them have provided how could I say bridging the
gap between communities of color that would perhaps not always
get the fair and same treatment as other communities. And I am
talking in particular about programs like the Office of Minority
Health, the National Center on Minority and Health Disparities,
and the Preventative Health and Health Services block grant racial
and ethnic program known as REACH. I understand that these
programs are due to be cut back. Do you have any response to
that?
SECRETARY LEAVITT. I am not able to respond to each of those
individually. If you--maybe we could get that list and I could do--
MS. SOLIS. I will be happy to turn this over to you so you can
respond.
And the other is that in 1996, illegal immigrant restrictions to
Medicaid and SCHIP where put into place through the welfare
reform package but there was an attempt to try to provide coverage
for the Latino community, vulnerable community, illegal
immigrants, pregnant woman, children through the passage of the
Immigrant Children Health Improvement Act. Will the
Administration's budget address the high number of uninsured
rates in the Latino community and what potential for any efforts
there to provide coverage to this community that receives now
disparate treatment in health care?
SECRETARY LEAVITT. Well we are working with the minority
populations in general. I would suggest that the most significant
one would be the expansion of our community health center
system. We have money in the budget for 302 additional or
expanded services that will bring additional services to literally
millions. A high proportion of those who use those centers tend to
be in the communities that you have described.
MS. SOLIS. One of the concerns I have in my own district is
that as of late in the last two years, LA County our health delivery
system there closed 11 community health centers and I have not
seen any movement on the part of the Federal Government to try to
help provide some assistance there to fill that gap. I would ask that
if there is a way that I could ascertain information as to what your
plans are in that immediate area that you and I know is a high need
locale, if you could provide us with evidence of any attempts or
how we can work with you to see that these qualified health care
clinics are indeed full of, listed in full capacity funding and helping
us bridge that gap.
SECRETARY LEAVITT. You are probably aware that I worked
with Governor Schwarzenegger to develop a waiver specifically
targeted at Los Angeles County, and I am guessing the heart of
your district.
MS. SOLIS. Yes.
SECRETARY LEAVITT. To provide several billion dollars over
the course of years to assure that we are able to provide a medical
home for them and hospital care. This was a specifically targeted
waiver, and that would have expanded dramatically access to
health care. And we are beginning to work to develop a pool that
can in fact be used to give people not just uncompensated care, but
actually access to a health care home, and I believe the number
was a couple of hundred thousand that would be added to the roles
of the insured through this waiver.
MS. SOLIS. I would like to get more detailed information.
And then just lastly in the last two or three months we have
been holding our own town hall meetings and visits with seniors
regarding the prescription program that you all are rolling out and
we have heard from our seniors, particularly Spanish language
Latino elderly that are having problems with interpreters providing
services and the long wait on the telephones. And I am very
discouraged with the response from the Administration. Many of
our constituents do not have access to the Internet. Information
has not been given to them in their language appropriately and
culturally in my opinion and I would hope that you would provide
us with the information on what attempts you are taking to make
sure that that happens. I had a constituent that called me who had
problems getting her heart medication and so I am very, very
concerned and would like to, you know, to get feedback from you.
MR. BILIRAKIS. Response?
SECRETARY LEAVITT. I will provide you, and you will be
provided, along with other Members of Congress next week a list
of statistics on how many people in your district have actually
enrolled and how many are eligible. I will also tell you that we
now have the call wait time on our 1-800 Medicare line down to
under a minute and we are offering Hispanic language choices that
are necessary or needed. So I hope that will meet the needs of
your constituents better.
MS. SOLIS. Thank you.
MR. BILIRAKIS. Mr. Walden to inquire.
MR. WALDEN. Thank you very much, Mr. Chairman.
Mr. Secretary, welcome and thank you for your endurance and
patience and all of us have been able to get up and leave and come
back and you have not moved and I admire that.
SECRETARY LEAVITT. Thank you.
MR. WALDEN. I want to follow up on what Dr. Burgess said
about the reimbursement of physicians and other providers,
especially in rural areas. You know, my district is somewhat like
the State you were governor in and it is very rural, and I have got a
physician out in the far regions of Eastern Oregon who is an
internist who is probably in his 50's. Every time I get out there he
tells me he is the last one in town. He oversees a health clinic that
he helped the community establish that is 60 miles from the little
town he is in, and he is not making any money literally, and cannot
quit, and cannot afford to keep going. And I am just concerned
about the rural safety net, and I think what the Administration has
done on clinics and expanding federally qualified clinics is terrific,
and the Bush Administration will never get the credit that it
deserves in this area, but you all hoped to save one in little old
Fossil, Oregon and helped us establish one elsewhere and I think
they are a real safety net and I congratulate you for that. But this
issue of physician reimbursement is something we all need to work
on in the Congress and the Administration.
SECRETARY LEAVITT. I realize that this is the time for you to
ask the questions, but perhaps you would entertain a question. We
put $25 billion into rural health with the idea of specifically
targeting reimbursement rates in rural America. Has that not had a
positive impact on you?
MR. WALDEN. It is certainly better than not having it, but the
problem is that it is so acute in some of these rural areas I am
finding the same thing Dr. Burgess is. I met with a group of
physicians in Bend, Oregon, which is not exactly a rural area in the
terms of my district, and yet two or one of them have said they are
not taking anymore Medicare patients in their practices because
they cannot afford to. And that is an echo I hear throughout the
district that is a real problem. Now Oregon has got its own set of
issues. In my take we, you know, there is no cap on medical
malpractice and that is a cost driver that is affecting them and how
they practice medicine certainly. But it is still a major issue. I am
one of the co-chairs of the Rural Health Care Caucus, and I
thought what we had done when we passed the Medicare Bill was
a big help and certainly one of the biggest packages to move
forward on rural health care and the Administration supported it,
and I think the add on we did for home health care made a real
difference, but as you know that 5 percent add on expired. And so
we continue to just struggle.
SECRETARY LEAVITT. This is obviously a matter of grave
national focus, it has to be. I hear what you are saying with respect
to physicians who get up in the morning and go to work and what
their reimbursements are and what they would like them to be. On
the other hands, we are looking at a health care system that now
occupies 16 percent of the gross domestic product. Medicare alone
is almost 3.5 percent of the gross domestic product. So we have
got to find some way, and I agree with Dr. Burgess, people do not
get up in the morning and say, you know, I am going to go out
and--
MR. WALDEN. Be inefficient.
SECRETARY LEAVITT. --be inefficient. But they also do not get
up in the morning and go off and say I am going to go off and
resist change.
MR. WALDEN. Yeah.
SECRETARY LEAVITT. But they do. So this is really about
finding ways to implement private practices.
MR. WALDEN. And that is right. I think what you are doing on
expanding community health care centers makes a big difference
for a lot of people who would otherwise when their child is ill they
wait and go to the emergency room. If they can work with a local
clinic, we can all save costs and they can get better health care
quicker before it is an emergency.
I want to go back to Medicare in the literally one minute I have
left because good news is never news. And I recognize when I
hear from my pharmacists and their issues you and I have
discussed, and their issues on the sign up and we are actually going
to host two sign up sessions for people in March in my district in
working with CMS and I thank you for that to help them navigate.
But I am amazed 250,000 Americans a week are signing up. Do
you have any numbers that look at how many people who lacked
coverage, had no prescription drug coverage that now have it as a
result of this plan? Because that was what I used to hear when I
would go to senior centers and I know I heard in this committee
nobody is going to offer a plan and then the drumbeat is there are
too many choices.
SECRETARY LEAVITT. Over time we will find that out, but I
can tell you it is millions that now have coverage that never had it
before. And another figure that is not fully appreciated is the
millions that will keep it who would have lost it. We had very
impressive acceptance among corporate plans and retirement plans
many of whom were dropping prescription drug benefits because
of their expense, and they are now able to keep it. There are
literally millions who have it who did not before. There are
literally millions who are keeping it who would have lost it.
MR. WALDEN. My time has expired. Thank you, Mr.
Chairman. Thank you, Mr. Secretary.
MR. BILIRAKIS. I thank the gentleman.
Mr. Gonzalez for six minutes.
MR. GONZALEZ. Thank you very much, Mr. Chairman.
Mr. Secretary, we may disagree some of us on this side of
where I sit on the aisle with you but it does not mean that we do
not appreciate your service and admire you.
SECRETARY LEAVITT. Thank you, Mr. Gonzalez.
MR. GONZALEZ. The first thing is that we will get a majority
staff report and then we get a minority staff report and you cannot
believe that they are analyzing the same budget. So the first
question is would you agree or disagree with this statement. The
President proposed legislative changes that cut $35.8 billion from
Medicare Fee for Service Program over five years for a total of
$105 billion in Medicare budget cuts over ten years. Yes, sir?
SECRETARY LEAVITT. Would that come from a majority or
minority staff?
MR. GONZALEZ. Well I am not going to tell you but do you
agree that is--
SECRETARY LEAVITT. Well that is not one I am able to give
you a technical response to. If you would like to give it to me I
can make an analysis. Questions like that deserve a very
thoughtful answer.
MR. GONZALEZ. You are starting to sound like Alan
Greenspan.
SECRETARY LEAVITT. That is a real compliment, thank you.
MR. GONZALEZ. It was not meant as a compliment. I served
on Financial Services and we never got an answer from Alan
Greenspan.
SECRETARY LEAVITT. He was very skilled about it.
MR. GONZALEZ. Well he may now, now that he is a private
citizen of sorts. Let me ask you something else that is somewhat
troubling and of course I am reading from the minority analysis.
For the first time, payments to Medicare providers would be
automatically cut in the event general revenues exceed 45 percent
of program funding unless Congress acts with its own proposals to
meet the 45 percent cap. The Medicare Modernization Act
provided that if the 45 percent was exceeded, the trustees would
issue a warning and Congress was supposed to act. But the
Medicare Modernization Act included no automatic cuts. That is
true.
SECRETARY LEAVITT. That is true.
MR. GONZALEZ. Why? Why the changes?
SECRETARY LEAVITT. Well I think it is an acknowledgement
that at some point in time we have to decide how many tax dollars
can go into Medicare and how many dollars can beneficiaries and
others and we just have to decide where the point is that we are
prepared to make the changes. Change is not easy. I indicated
earlier it is now Medicare alone is 3.4 percent of the gross
domestic product. If it goes on until 2040 it becomes 8 percent.
We will not have an economy that will sustain jobs at that point.
And if we do not have sustainable jobs, we have no revenue to
sustain Medicare.
MR. GONZALEZ. Wouldn't it be more appropriate to just not
leave it in the hands of Congress should we reach the trigger or the
threshold? Is it not the responsibility of representatives of the
people to make that determination on how we would address that
shortage? If the trigger is there and we know there is a
consequence, would it not be more appropriate rather than to have
something that is automatic in nature?
SECRETARY LEAVITT. But Congress--the proposal is that the
Congress could. They could implement changes that in fact would
make it unnecessary.
MR. GONZALEZ. Well that leads me to my next question.
Under what we presently have and the threshold is met as opposed
to what you propose and it would pass obviously that it is
automatic what would happen under the two different scenarios
from the 45 percent when the threshold or the trigger is reached
under the present scheme of things if Congress did not do
anything?
SECRETARY LEAVITT. What we do is if Congress does nothing
in the long-term that this system is not sustainable and we end up
with a lot of people who lose whatever they have and that is
unacceptable and we are proposing here is an alternative. If
Congress will not act, then it will take an act of Congress to put
into place this automatic decrease. Congress could very easily
avoid it by taking the steps to do things that were hard. Let us face
it, making any change in Medicare would be hard. So at some
point if Congress is unwilling to do it, then there is at least a
remedy that creates--
MR. GONZALEZ. Then why not have this in all our different
budgets? When we have thresholds and triggers if something
would automatically happen rather than Congress taking the
initiative or being proactive, I mean--
SECRETARY LEAVITT. Well I think that we are in agreement
that Medicare, it sounds as though we are in agreement that
Medicare is unsustainable but we have got the figures of which to
resolve that and this is one idea and I think it is a pretty good one.
MR. GONZALEZ. It is also a question of priorities and not just
un-sustainability so that leads me to the next question then. If we
move forward with real fixes for Medicare, would it not be prudent
to figure out what it is really going to cost to provide health care to
so many Americans in this program? And of course I am leading
right up to the sustainable growth rate. I always forget that.
Sustainable growth rate formula which since 2001 everybody has
been saying we have to change but we are not changing and we
have kind of discussed it. Dr. Burgess had touched on it. Greg
Walden touched on it. Anyone talks about it but we do nothing.
Well there is something out there right now, some legislation by
Clay Shaw. Do you believe that the sustainable growth rate
formula is accurate, fair, and realistically reimburses doctors in this
Nation for their services to Medicare patients.
SECRETARY LEAVITT. I think the system is not a good system.
MR. GONZALEZ. No, I am asking you if this particular formula
that, under which we operate right now. This is what--the doctors
are not going to get any more, any less unless this formula
changes. I mean is it a fair formula, does it realistically reimburse
physicians for their services?
SECRETARY LEAVITT. Congressman, I believe it is a bad
system and by nature one that is not precise, and I believe that we
would be far better off if we could go to a system that would begin
to acknowledge the fact that what we are after here is not quantity,
it is quality. And that if we do not do that we will continue to have
this collision every year. What happens when we cut the rate is
that we just get more procedures and the system continues to
march toward un-sustainability in a different in a different--
MR. GONZALEZ. But it is a flawed formula?
SECRETARY LEAVITT. It is a flawed system.
MR. GONZALEZ. Thank you very much.
MR. BILIRAKIS. Mr. Inslee for six minutes.
MR. INSLEE. Thank you, Mr. Secretary. You said a couple
things in your opening statement that were intriguing to me. When
I asked you about it and you said something to the affect that our
hearts are full of compassion all of us for those who are afflicted
but we hope to help through these programs. You also made
repeated references to the concept that this is a time of deficits so
we had to take that into consideration in our policies. And the
budget in our review has in significant ways cut existing levels of
programs to commit to help the people who are dear and tied to our
compassion one of which that is particularly concerning to me is
our rather wholesale cuts to our Institutes of Health research
budgets which hold such tremendous potential. We cut the Cancer
Institute for $40 million. That is real dollars it is actually more
than in inflation adjusted dollars. I think it is $20 million dollars in
the National Heart, Lung, and Blood Institute. This is very
concerning because I think one of my colleagues said that we
doubled the budget in NIH in the last ten years but we have gone
up about 1,000 percent in our genetic knowledge and the like. We
are just on the cusp of such tremendous advances and yet we are
cutting these budgets at a time of tremendous advancement.
That causes me great concern. And I want to put this in the
context of real people which is two citizens, Washington friends of
mine. One has prostate cancer, a 55-year old guy had original
diagnosis and surgery. He later had some recurrence and now is in
radiation therapy. He will be looking for, I would think he would
say it would make sense to make as much investment as we can in
medical research to treat that disease but we are cutting $40
million of our existing level of research into cancer. Another
friend of mine, he did well in the software business, and in this
budget he is going to get about a $2 to $4 billion dollar tax cut, $2
to $4 billion tax cut. The fist guy with the cancer we will call Fred
with the cancer. He is getting a cut in the promise of his Federal
Government to do something about his potentially life threatening
disease. The other fellow, let us call him William, is getting a tax
benefit of $2 to $4 billion out this budget. How do we possibly say
that, you know, the second guy with the billions is entitled to more
compassion in this time of deficits that the first with cancer?
SECRETARY LEAVITT. Let me reconcile for you the approach
that we are taking with this because I think you yourself made the
point that our genetic knowledge, for example, is expanding and in
many other areas. We are still investing $4.8 billion a year in
cancer research. We are not stopping our research, we are simply
saying $4.8 billion is what we can afford this year. At the same
time, we have an entire group of initiatives that will benefit every
one of the institutes of NIH and at the heart of that is cancer.
Those were valued at several hundred million dollars. So you can
say well we are reducing that by $40 million. What is going on at
the NCI at the same time we are doing joint projects that go across
the entire breadth of NIH that will have substantial benefit to NCI.
You know, let us acknowledge the fact that we are flat funding in
this budget the National Institute of Health.
MR. INSLEE. I think you are not seeing my question. My
question is to compare two individuals in different circumstances,
one with billions of dollars and one with billions of cells that we
are trying to solve cancer of. And my question to you is why is the
first with the billions of dollars in this budget entitled to
compassion by giving them additional tax relief but the second
with cancer is you are entitled to less compassion than we had in
last year's budget because we are cutting the budget or we are
getting dumber in our scientific knowledge and so it does not make
sense to make any more investments, or we think we are maxed
out on the potential human achievement for treatment of cancer.
One of those three, or there is something about the genetic makeup
of the billionaires in our country that exceeds in our compassion
value than those with cancer. Now I would like to know from your
Administration, and you are responsible for my citizens and my
colleagues and my friends' health care, which one of those justifies
this prioritization?
SECRETARY LEAVITT. You are asking me to make a judgment,
a policy judgment on tax policy or something in a debate that
obviously will go on here in Congress. I will add that another
person who got a substantial or will likely get a substantial tax cut
is making a remarkable contribution to science outside of the
National Institutes of Health or in partnership with the National
Institutes of Health. The only effort that is growing in this Nation
is not--on cancer is not what is going on at NIH gratefully. There
are sources coming from lots of places and one of the places are
those who have researchers in this country and make donations and
we make--and in making that donation we give them a tax
deduction which is essentially we are saying you do not have to
pay tax on that money and a good share of it will go into cancer
research.
MR. INSLEE. I want to make sure we understand the tax cuts
you are referring to are not deductions for charitable giving. I am
talking about eliminating the State tax, significant decreases in
marginal rates for dividends and the like, do I hear you are
asserting that the reason that you justify a cut in our Federal
research budget for dealing with cancer is the fact that there are
many generous Americans who are making individual
contributions. Is that the reason for it?
SECRETARY LEAVITT. No, I am simply trying to reconcile the
policy, the value judgment you are asking me to make and that is a
tax issue that will be dealt with--
MR. INSLEE. Well would you if given a chance, would you
advise the President as far as your position that it would make
sense between these two individuals that one fellow perhaps
should get less of a tax cut and the other fellow perhaps should get
better research for his cancer?
SECRETARY LEAVITT. The equity of that is not the subject of
this hearing nor is it in fact that it is a policy judgment that
Congress will need to make.
MR. BILIRAKIS. The gentleman's time has expired.
Ms. Baldwin to inquire.
MS. BALDWIN. Thank you, Mr. Chairman.
And thank you, Mr. Secretary. I have a comment or at least a
question for later evaluation and then a couple of additional
questions. I know you listened attentively to all of our opening
statements and I commented about some of my concerns with
regard to the approach, the ideology behind how savings accounts
versus other approaches we could take to deal with our crisis of the
uninsured. On the way over here today, I was made aware of a
report out of the Center on Budget and Policy Priorities that was
released just today, so I do not expect you have had a chance to
take it in, but it basically looks at the cost and coverage impacts of
the President's Health Insurance Budget proposal, health savings
accounts in particular. And computer modeling reaches an
estimate that the proposals will raise the number of uninsured in
this country when fully implemented by a fairly sizeable number of
600,000 people. Now I feel confident that the Administration
would not be moving this forward had they not reached a different
sort of analysis. But this report certainly embodies my concerns
about this approach. And so at such time that you have had a
chance to look at this and compare that to your own assumptions in
putting together this package, I would be interested in hearing your
evaluation and how many more people you think going ahead with
a health savings account approach will ensure.
Now to my specific questions for now. Secretary Leavitt, in
late August of last year, Dr. Susan Wood at the FDA Commission
for Women's Health and the Director of the Office of Women's
Health resigned over the Administration's refusal to issue a final
decision on the Plan B application. And she said and I quote "I
can no longer serve a staff when scientists and clinical evidence
fully evaluated and recommended for approval by professional
staff here has been overruled." Furthermore, a GAO report
released in November of 2005 concludes that political inference
played a role in the FDA's delay on the Plan B application. I guess
I want to know if you are as concerned as I am about the
possibility or allegations that political ideology is being placed
ahead of Women's Health and Science and an agency within the
Department of Health and Human Services? And additionally,
what are you specifically doing to ensure that scientists in your
agency are not being censored by political appointees as we have
seen in recent allegations in NASA and as we have seen and heard
about in the case of the Plan B situation?
SECRETARY LEAVITT. Let me respond to both of your
questions. First of all, I must say to you you are correct. I cannot
imagine an analysis that would demonstrate that the President's
proposal would have fewer people. It is very clear from the 3
million people that now have health savings accounts that roughly
40 percent of them have never had insurance or did not have
insurance before. The estimate is that you will see as many as 20
million people with health savings accounts by 2010 if the
statistics hold up and there is no reason to think they will not. That
means we will have roughly 8 million people who have insurance,
many of whom do not have it now because of cost considerations.
I could spend more time--
MS. BALDWIN. Right. If I may, I am sure you would not have
gone forward if you did not think there would be a net increase. I
am going to be real interested in a more technical analysis of the
different assumptions you make versus this report. This report that
I have had a chance to scan today does raise the concerns that I
have always had about using this model to address the situation but
I would love to hear you address the question about censorship of
scientists and--
SECRETARY LEAVITT. I am quite aware of the basis on which
those decisions were made. We were presented with a new policy
dilemma involving the use of what is now a prescription drug that
is available today through a prescription to all populations. We
have been asked to break new policy ground that involves splitting
the approval process by age. The decision was made that because
it provided new public policy questions that we needed to seek
additional comment which we have done. The comment period
ended in November and those comments are now being analyzed.
This is a process that is followed in regulatory agencies across the
Government and it is an appropriate one.
MR. BILIRAKIS. The gentlelady's time has expired.
All time has expired. I believe you have a unanimous consent
request?
MR. BURGESS. Yes, Mr. Chairman, I have a unanimous
consent request. I have some data from Texas that shows of the
2.5 million Medicare beneficiaries 500,000 now have prescription
drug coverage that did not have it before January 1 and this was
dated as of January 20 and I just wanted to submit that for the
record.
MR. BILIRAKIS. Without objection that will be the case.
[The information follows:]
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MR. BILIRAKIS. Mr. Secretary, you have been a trooper. What
else can we say? Thank you so very much for your patience and
your consideration and your fairness. Many here have already said
they were going to submit written questions to you. As you know,
we customarily do that so I would ask you of course to respond to
those and others that are submitted by the committee staff over a
period of time. Thank you so very much for being here.
SECRETARY LEAVITT. Thank you, Mr. Chairman.
MR. BILIRAKIS. The hearing is over.
[Whereupon, at 5:28 p.m., the committee was adjourned.]
<GRAPHICS NOT AVAILABLE IN TIFF FORMAT>
RESPONSE FOR THE RECORD BY THE HON. MICHAEL O. LEAVITT,
SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
The Honorable Joseph R. Pitts:
1.)
Question:
Mr. Secretary, the Deficit Reduction Act of 2005 (DRA)
included language to reduce payments for certain imaging services
provided in the physician office setting or at stand-alone imaging
centers. The payment amounts will be reduced to the amount paid
in the hospital outpatient setting. I am told that some codes may be
reduced by over 30 percent - and even some as steeply as 75
percent, such as for vascular imaging using ultrasound. While I
can understand the desire to address differences in payments
between settings, I am concerned that the hospital outpatient value
was settled upon simply because it saved money. Has there been
an analysis of whether or not the outpatient payment amount is
adequate or appropriate?
Answer:
In 2006 Medicare pays a physician $903 for doing an MRI of
the brain or an MRI of the abdomen. Medicare will also pay a
Hospital Outpatient Department (OPD) $506 for the exact same
test. Thus, Medicare is paying almost $400 or 78 percent more for
doing these MRI imaging tests purely depending on whether the
test is performed in an OPD or a physician's office. Similarly,
Medicare will pay 267 percent more for doing an ultrasound
guidance for artery repair in a physician's office than an OPD
($228 vs. $62). These comparisons do not include a physician's
interpretation of the test for which Medicare will pay a separate
fee. There is no consistency in the percentage that the physician
fee schedule exceeds the hospital OPD payment amount. The
percentage difference varies by procedure.
In the context of: (1) significantly larger payments under the
physician fee schedule than the OPD for the same service for
certain imaging services, (2) site neutral payments for the same
service identified by MedPAC as a long term goal under Medicare
fee-for-service payment systems, (3) rapid growth in Medicare
spending for imaging services for several years, (4) MedPAC
raising methodological issues that suggest relative values under the
physician fee schedule for imaging services would be too high,
combined with a lack of procedure and equipment specific
information on alternative equipment utilization assumptions to
use in the practice expense formula to address such issues, section
5102(b) of the Deficit Reduction Act of 2005 establishes a
payment limit for the technical component of imaging services.
The provision requires that Medicare not pay a physician more
than Medicare would pay the OPD for furnishing the same imaging
procedure. A physician's interpretation of the test for which
Medicare will pay a separate fee is not affected by the provision.
This step to level the playing field between physicians' offices
and hospital OPDs only applies to procedures where Medicare
pays more in physicians' offices; the DRA cap provision does not
apply to all imaging procedures furnished in physicians' offices.
In addition, the percent that Medicare payment rates for physicians
exceeds OPDs are not all as large as the examples cited above; in
numerous cases, the differential is 10 to 20 percent. Thus, the
overall impact is not expected to be as dramatic as the example of
some procedures.
The DRA provisions will be implemented through notice and
comment rulemaking. These proposals are expected to be
published this summer and will allow for a 60 day public comment
period. A final rule will be published by November 1, 2006 and
will be effective for services furnished on or after January 1, 2007.
2.)
Question:
As you know, the President's FY2007 budget calls for an
inflationary increase in funding for the medical device user fee
program. This Subcommittee has also shown support for this
program by fully funding the program the last two years. Can you
tell us how the agency is doing in regards to meeting the
performance goals associated with the user fee program with the
funding it has gotten to date?
Answer:
Secretary Thompson's November 14, 2002, letter to Congress
defines the performance objectives FDA is pursuing under
MDUFMA. The commitment letter defines a comprehensive set of
challenging goals and a schedule for meeting them.
FDA's performance to meeting MDUFMA's performance
goals is, to date, consistent with the high expectations established
for the program. We have attached FDA's performance report for
FY 2004. The FY2005 performance report is currently under
review within the administration, and we will forward the report
when it is complete.
To allow FDA time to build its capacity to meet the ultimate
(FY 2007) goals set by MDUFMA, the commitment letter provides
for a phased implementation of goals, with more goals and higher
performance expectations each year. During FY 2005, 18
additional goals went into effect (two of these apply to workloads
handled exclusively by CBER); six more go into effect this year
(FY 2006). During FY 2007, FDA will be responsible for a total
for 77 quantitative goals covering five receipt cohorts. In addition,
FDA is expected to pursue eight additional nonquantifiable
commitments, such as developing an appropriate bundling policy
(where FDA imposes only one fee for two or more closely-related
applications from the same applicant), continuing its efforts to
develop mechanisms for the electronic receipt and review of
applications, and improving the scheduling and timeliness of
preapproval inspections.
Although FDA does not expect to meet every goal specified by
MDUFMA, the trends are promising. FDA is, in general, showing
better performance as it implements new policies and procedures
designed to improve the timeliness of our review processes.
Although it is too soon to know what FDA's final performance
statistics will show - many goals still have applications that remain
open - FDA's performance on applications within more recent
receipt cohorts is better than performance in older cohorts,
showing that the improvements we have been making are
beginning to bear fruit. If you had taken a snapshot of
performance for the FY 2003, FY 2004, and FY 2005 receipt
cohorts on December 31, 2005, you would see that FDA is meeting
or exceeding 19 of the 24 goals in effect, and is not meeting only
two goals; no applications have qualified for the remaining three
goals. Most of these goals still have, or may have, additional FDA
actions, so these results may change, but we are very encouraged
by what we have accomplished so far.
3.)
Question:
During operation of the medical device user fee program, has
the agency been able to determine specific direct and indirect costs
of performing the various types of premarket approval (PMA) and
510(k) device approvals? Will you be able to determine
incremental direct and indirect costs that will be associated with
improving review times under more aggressive performance goals
in future legislation?
Answer:
FDA is engaging with industry and stakeholders as it works on
MDUFMA reauthorization. If the MDUFMA reauthorization
results in changes to the performance goals, we will be able to
estimate direct and indirect costs.
During FY 2005, FDA contracted with Dr. Dale Geiger, a
recognized expert in the field of government cost accounting, to
prepare a report of the costs of FDA medical device review
processes. Dr. Geiger examined FDA medical device reviews
conducted during FY 2003 and FY 2004, including investigational
device exemption applications, premarket approval applications
(PMAs), PMA supplements, biologic licensing applications, BLA
supplements, and 510(k) premarket notifications. Dr. Geiger
examined both direct and indirect costs and this work will assist
FDA with cost analysis in gard to the performance goals resulting
from the MDUFMA reauthorization.
4.)
Question:
What criteria does the agency use to determine the allocation
and priority for the distribution of any increase in staff across FDA
components, including offices, divisions, branches, and districts
resulting from the medical device user fees and related
Congressional appropriations?
Answer:
When MDUFMA was first enacted, FDA developed an internal
plan for the allocation of anticipated resources-both from fees
and from appropriations. In doing this, the agency estimated the
percent of the device review workload that was performed in
CDRH and the percent that was performed in CBER. Those initial
estimates indicated that 83 percent of the device review work in
the two centers was performed in CDRH and 17 percent was
performed in CBER. FDA's initial allocations to the two centers
of the total of increases for device review from both fees and
appropriations were based on these estimates, and allocations
within each center were made by Center management after
assessing where the resources were needed to enhance the device
review process as defined in MDUFMA.
From subsequent data, it is evident that this allocation to
CDRH needs to be increased and the allocation to CBER needs to
be reduced. This is because CBER represents a smaller percent of
the combined device review work between the two centers than
originally estimated. In addition, CBER had a well-developed IT
infrastructure and did not need to spend as much on IT as did
CDRH, so CBER was able to focus more of its resources on
personnel. In future allocations, increases are being given in larger
measure to CDRH.
In addition to the funds allocated to the two centers and to the
Office of Regulatory Affairs (a little over 80 percent of the total of
increased funds), allocations have to be made to accounts that
support the additional FTE in the Centers and ORA. These
planned allocations provide about 7.3 percent of the total increased
funds to the Office of the Commissioner, about 6.2 percent for rent
and rent related costs for housing the additional staff, and about 7.1
percent to the FDA central account, which pays for a variety of
support costs, including the cost of local and long distance phone
services, operation of health units, mail and document storage, and
HHS charges for facilities, human resources, and other employee
support costs.
The Honorable Ed Whitfield
1.)
Question:
The Deficit Reduction Act of 2005 appropriates $2 billion for
use by HHS to pay the uncompensated health care costs of
providers who have delivered care to affected individuals or
evacuees under a Section 1115 project as a result of Hurricane
Katrina. It was Congress' intention that Federal Qualified Health
Centers (FQHCs) and other providers would be eligible to receive
funding under this uncompensated care pool if they provided care
to evacuees of and individuals affected by Hurricane Katrina.
Does HHS intend to ensure that FQHCs are eligible to receive
funding under the uncompensated care pool if they provide care to
evacuees of and individuals affected by Hurricane Katrina?
Answer:
Reimbursement for qualified items and services provided by
Federally Qualified Health Centers (FQHCs) to eligible individuals
will not be prohibited from reimbursement under the
uncompensated care pools (UCCP). Eight states have been
authorized under Hurricane Katrina Multi-State section 1115
demonstrations to reimburse providers that incurred
uncompensated care costs for Katrina evacuees who do not have
other coverage. States have the discretion to reimburse providers,
including FQHCs, in accordance with the state's approved UCC
plan.
The Honorable John Dingell
1. The Budget includes Legislative cuts to Medicaid of $4.9
Billion over five years, and another $12.2 billion in cuts through
regulatory changes, for total gross cuts of $17.2 billion over five
years. These cuts are in addition to $28 billion in cuts to Medicaid
over 10 years in the Republican reconciliation spending cut bill -
the Deficit Reduction Act.
The reconciliation law will result in higher co-payments for
healthcare services for 13 million working families, people with
disabilities, and seniors (including 4.5 million children), higher co-
payments for prescription drugs for 20 million individuals
(including 6.6 million children), the loss of coverage for at least
65,000 people in just one year alone because they cannot afford
higher premiums, and benefit cuts for at least 1.6 million people.
Now the President proposes a new round of cuts to Medicaid --
$42 billion over the next ten years. According to an independent
analysis of your proposals, the primary savings come from shifting
costs to states.
A.)
Question:
Please provide the State-by-State effect of each of the spending
cuts you propose in Medicaid. If you cannot, explain why.
Answer:
The CMS Office of the Actuary does not prepare state-by-state
impact analyses of Budget proposals.
B.)
Question:
The proposal to restrict funding for governmental providers
saved $1.2 billion over five years when it was in last year's budget,
and now saves $3.8 billion in this year's budget. Please state
exactly what has changed in your proposal to make it cut an
additional $2.6 billion over five years. Why do you now think you
can do this policy by regulation, when last year you claimed you
needed legislative authority?
Answer:
The President's FY 2007 Medicaid Budget includes two related
legislative proposals that curb questionable financing practices by
providing a Federal match for only those funds kept by providers
as payment for services (the "net expenditure" proposal) and
limiting reimbursement levels to no more than the cost of
providing services (the "cap at cost" proposal). It is anticipated
that both of these proposals will be implemented through
administrative authority.
Specifically, the Medicaid baseline for the President's FY 2007
Budget (which includes both regulatory and legislative proposals)
only reflects a five year $3.8 billion savings estimate for the "net
expenditure" provision. The additional savings from the "cap at
cost" proposal are not included in the Medicaid Budget baseline.
In other words, a portion of the total savings from the
intergovernmental transfers (IGT) proposal was included in the FY
2007 Budget estimates, but not all the savings that should have
been. The "cap at cost" proposal is estimated to save $1.5 billion
over five years. After accounting for the interactions between the
two proposals' estimates, the total net savings are estimated to be
$5.1 billion over five years. Despite this oversight, the total
savings for these FY 2007 Budget proposals is somewhat less than
the estimate for the FY 2006 Budget proposals because additional
states have eliminated their inappropriate use of financing practices
to maximize federal Medicaid reimbursement in the intervening
year.
This policy will be promulgated by regulation under the
authority of section 1902(a)(30)(A) of the Social Security Act (the
Act), which requires that payments be "consistent with efficiency,
economy and quality of care." This provision of the Act requires
the Secretary to protect against abuses by states and providers.
The taxpayer should not pay more to a public entity than it costs to
deliver the service to a Medicaid beneficiary. Additional authority
to protect the fiscal integrity of the program is also found at
1903(i)(3) and (i)(17).
C.)
Question:
The budget includes a new proposal on school-based
administration and transportation. This proposal is a regulatory
change, not a legislative one, and it saves a considerable amount of
money. Please explain what the Centers for Medicare and
Medicaid Services (CMS) is proposing to change with respect to
services in schools?
Answer:
Appropriate Medicaid services will continue to be reimbursed
as allowed under current law. However, claiming for certain
Medicaid services in school settings has proven to be prone to
abuse and overpayments.
According to section 1903(a)(7) of the Social Security Act (the
Act), for the costs of any activities to be allowable and
reimbursable under Medicaid, these activities must be "found
necessary by the Secretary for the proper and efficient
administration of the plan" (referring to the Medicaid State Plan).
Additional authority derives from section 1902(a)(17) of the Act,
which requires that states take into consideration available
resources. Through the authority of these statutes, the
Administration proposes to prohibit federal reimbursement for
transportation provided by or through schools to providers.
HHS has had long-standing concerns about improper billing by
school districts for administrative costs and transportation
services. Both the Department's Inspector General and the
General Accountability Office (GAO) have identified these
categories of expenses as susceptible to fraud and abuse. GAO
found weak and inconsistent controls over the review and approval
of claims for school-based administrative activities that create an
environment in which inappropriate claims generated excessive
Medicaid reimbursements. Audit findings from states where the
OIG conducted administrative claiming audits have shown
egregious violations. Proper and accurate claiming for
administrative services has not been carried out in compliance with
applicable Medicaid regulations. Overall, the leading conclusions
from these audits are that most states use an improper allocation
methodology and insufficient attention is paid to the details of the
claiming process.
The President's 2007 Budget includes a regulatory proposal
that would prohibit Federal Medicaid reimbursement for Medicaid
administrative activities performed in schools. It additionally
proposes that Federal Medicaid funds will no longer be available to
pay for the transportation to and from school related to medical
services provided through an Individualized Education Program
(IEP) or Individualized Family Service Plan (IFSP).
Schools would continue to be reimbursed for direct Medicaid
services identified in an IEP or IFSP provided to Medicaid eligible
children, such as physical therapy and occupational therapy that
are important to meet the needs of Medicaid-eligible students with
disabilities, as long as the providers meet Medicaid provider
qualifications.
We estimate that these proposals will save $0.6 billion in FY 2007
and $3.6 over five years.
D.)
Question:
Under current law, the Social Security Act at section 1903(c)
reads, "Nothing in this title shall be construed as prohibiting or
restricting, or authorizing the Secretary to prohibit or restrict,
payment under subsection (a) for medical assistance for covered
services furnished to a child with a disability because such services
are included in the child's individualized education program
established pursuant to part B of the Individuals with Disabilities
Education Act or furnished to an infant or toddler with a disability
because such services are included in the child's individualized
family service plan adopted pursuant to part H of such Act." In
light of this language, what is the legal basis for the authority to
terminate Medicaid payment for these services?
Answer:
According to section 1903(a)(7) of the Social Security Act (the
Act), for the costs of any activities to be allowable and
reimbursable under Medicaid, these activities must be "found
necessary by the Secretary for the proper and efficient
administration of the plan" (referring to the Medicaid State Plan).
Additional authority derives from section 1902(a)(17) of the Act,
which requires that states take into consideration available
resources. Through the authority of these statutes, the
Administration proposes to prohibit federal reimbursement for
transportation provided by or through schools to providers.
E.)
Question:
The budget states that CMS will also issue regulations that
restrict the services that States can provide under the category of
rehabilitation services. Please provide further details on the
proposed rules and what services will continue to be permitted.
Also, please cite the statute or regulation that gives you the
authority to make this change. What States will this provision
affect?
Answer:
Rehabilitation services are an optional Medicaid service under
Section 1905(a)(13) of the Social Security Act (Act) and defined at
42 CFR 440.130(d). Rehabilitative services are typically offered
to individuals with special needs or disabilities to help improve
their health and quality of life. Under current practices, states are
billing Medicaid for rehabilitation services that are intrinsic
elements of non-Medicaid programs. For example, CMS has
determined that the costs of therapeutic foster care services,
adoption services, family preservation and family unification
services are being shifted by some states from foster care to
Medicaid. Under the rubric of therapy support services, states are
also shifting costs of non-medical support services and routine
supervision provided by teacher's aides in school settings to
Medicaid. Also, states are claiming for services that are not
rehabilitative, which were previously approved by CMS as
rehabilitation services.
All states provide rehabilitation services as an optional benefit
in Medicaid. States can also provide rehabilitation services
through home and community based services (HCBS) waivers, but
the provision of such services through HCBS waivers would not be
impacted by this proposal.
The FY 2007 Budget proposes to prevent cost shifting by
issuing a regulation that would clearly define allowable services
that may be claimed to Medicaid as rehabilitation services and
exclude payment for rehabilitation services that are intrinsic to
programs other than Medicaid. The regulatory change will also
clarify that Medicaid payments will be available for rehabilitation
services that are intended for the maximum reduction of physical
or mental disability and restoration of an individual to the best
possible functional level.
Through review of State Plan Amendments (SPAs), CMS has
found that, by using overly broad definitions of rehabilitative
services and payment methodologies that are not tied to specific
covered services, states are bundling services together which
Medicaid is not supposed to pay for at all, such as room and board.
CMS has also found that these methods serve to effectively
circumvent the statutory IMD exclusion, and the principle that
Medicaid is the payer of last resort. To address these concerns, we
find authority in a variety of places in title XIX of the Social
Security Act, including sections 1902(a)(4)(A), 1902(a)(30)(A),
section 1903(i)(17), and section 1905(a).
The Administration does not develop state-by-state estimates
on legislative proposals.
F.)
Question:
Given that many States already have preferred drug lists and
requirements that beneficiaries use generic drugs, what new
authority are you proposing to give States?
Answer:
The President's FY 2007 Budget proposal would allow States
to use private sector management techniques to leverage greater
discounts through negotiations with drug manufacturers through
managed formularies.
The Administration is currently developing the specific details
of this proposal.
Formulary Classifications and Coverage:
1.)
Question:
Last June, CMS issued an important clarification of its
guidelines to drug plans submitting bids for the Part D program.
This guidance stated that CMS would require "all or substantially
all" drugs to be covered by the plans in six categories:
antidepressants, antipsychotics, anticonvulsants, anticancer drugs,
immunosuppressants, and drugs for HIV/AIDS. The guidance was
based on the complexity and high cost of the diseases that these
drugs treat, as well as evidence-based practice. Also stated was
CMS's expectation that plans would not use management
techniques such as prior authorization or step therapy for patients
stabilized on crucial drugs in these categories. Since January 1,
2006, however, a widespread problem of plans not fulfilling this
guidance has been reported. Patients who had been stabilized on a
drug from one of these six important categories are being told at
their pharmacy that their drug will not be covered.
A.)
Question:
What enforcement measures will CMS provide to ensure plans
provide access to these vital medications? Has CMS taken any
enforcement action to date against plans that were not complying
with these requirements?
Answer:
Plans are required to meet Part D program and contractual
requirements as a condition of participation. In the formulary area,
CMS has in place a thorough review process for Part D plan
formularies, which must be satisfied before a plan can be approved
to participate in the program. Formularies are reviewed pursuant
to 13 different criteria that ensure beneficiaries have access to the
medicines they need at competitive prices. CMS will continue to
monitor plan formularies throughout a plan year to ensure that
beneficiaries have appropriate access to covered drugs. A plan
found out-of-compliance will be instructed by CMS to
immediately resolve any formulary deficiencies. Plans also have
been advised that failure to satisfactorily comply with Part D
program requirements in 2006 is grounds for non-renewal in 2007.
B.)
Question:
This requirement is only in effect for the first year of the
benefit. Does CMS plan to continue to require plans to cover all or
substantially all drugs in these categories in the future as well?
Answer:
Yes. CMS has issued guidance on drug formulary
requirements for the 2007 contract year. This guidance retains the
requirement that plan sponsors include on their Part D plan
formularies "all or substantially all" drugs in six categories:
antidepressants, antipsychotics, anticonvulsants, anticancer drugs,
immunosuppressants, and drugs for HIV/AIDS.
C.)
Question:
What is CMS's authority to require a 90-day transition period?
Are plans required to follow this CMS guidance or is it optional?
What recourse does CMS have against a plan that does not follow
this requirement?
Answer:
Under 1860D-11(d)(2)(B) of the Social Security Act, CMS has
authority, similar to the Director of OPM with respect to health
benefits, to prescribe reasonable minimum standards for health
plans. Under this authority we have required all Medicare drug
plans to offer enrollees a transition process. CMS has an ongoing
compliance monitoring program in place, and will follow-up with
plans and take enforcement actions if necessary to ensure
compliance with requirements.
2.)
Question:
On February 3, 2006, CMS released guidance on the coverage
of Niacin, stating that beginning June 1, 2006, it would no longer
be covered under the Part D benefit, but until that point, plans that
had advertised covering Niacin must continue to do so. It is my
understanding that the AARP plan was not in compliance with this
CMS directive and was excluding coverage of this medicine.
What actions has the Department of Health and Human Services
(HHS) taken to ensure private plans are following this directive?
What sanctions have been levied against noncompliant plans?
Answer:
CMS has issued more recent policy clarification regarding
prescription Niacin products. This policy clarification supersedes
our February 3, 2006 letter.
The Food and Drug Administration has determined Niaspan
and Niacor to be safe and effective drugs, used therapeutically for
the treatment of dyslipidemia, and that they do not serve as
nutritional supplements or address vitamin deficiency.
Additionally, these products are used at dosages much higher than
appropriate for nutritional supplementation. For these reasons,
CMS has superseded its initial February 3, 2006 letter and
determined that these products should not be considered
prescription vitamins for purposes of Part D coverage. The new
policy guidance does not require plans to add these products to
their formularies for 2006. However, for the 2007 contract year,
prescription Niacin products should be considered for formulary
inclusion similar to all other Part D drugs.
Part D
1.)
Question:
What steps is HHS taking to assist dual eligibles who have
medicines that are not preferred (with respect to cost-sharing)
under their plan's formulary to either appeal so that those
medicines are moved to a preferred tier or to assist the beneficiary
to either (a) move to an alternative but equally effective medicine
or (b) move to a plan with lower out-of-pocket costs?
Answer:
It is important to keep in mind that the cost-sharing structure
for dual eligible beneficiaries is outlined in statute. Therefore, dual
eligible beneficiaries are not subject to specific formulary cost
sharing structures of the various prescription drug plans.
With regard to off-formulary drugs for dual eligibles, CMS has
required Medicare prescription drug plans to establish an
appropriate transition process for new enrollees including full-
benefit dual eligibles who are transitioning to the Medicare benefit
from other prescription drug coverage. CMS believes that a
requirement for an appropriate transition process balances the
protection of certain vulnerable populations with the flexibility
necessary for Medicare prescription drugs plans to develop a
benefit design that promotes beneficiary choice and affordable
access to medically necessary drugs. All plans transition processes
address the plan sponsor's method of educating both beneficiaries
and providers to ensure a safe accommodation of an individual's
medical needs with the plan's formulary.
We understand that many plans have systems in place that
trigger a written notice to the member when a plan provides a
transitional first fill of their prescription. Other plans provide
instructions through their contracted pharmacies. In whatever the
form, we have noted to plans that the instructions to the beneficiary
should:
(1) Explain that the supply is temporary,
(2) Indicate that the member needs to work with the plan and
his or her physician to identify appropriate drug substitutions,
(3) Advise that the member has a right to request a formulary
exception, and
(4) Provide the procedures for requesting such an exception.
Additionally, full benefit dual eligibles have the opportunity to
change plans at anytime. We feel these protections will help
ensure dual eligibles have access to necessary medications under
the new Medicare prescription drug benefit.
The Honorable Elliott Engel:
1.)
Question:
Redistribution of Ryan White Resources: The Administration's
Ryan White reauthorization principles make it evident that there is
momentum toward the redistribution of CARE Act funds. It
appears that the goal of the Administration is to shift funds among
jurisdictions through drastic changes in funding formulas,
restrictions on the use of funds, and the elimination of provisions
that limit the loss of resources to jurisdictions over time. An
examination of the effects of the principles indicates that funds
would be redistributed in a manner that will harm persons living
with HIV and AIDS in many of the States that are impacted most
heavily by the epidemic. What is the rationale for shifting funds
around? We are not faced with a shifting epidemic. Rather, we are
faced with an expanding epidemic. There is not a single
jurisdiction in which this epidemic has stabilized or diminished.
I've heard references to jurisdictions with "older" epidemics and
inferences that an "older" epidemic is somehow more stable. But
the reality is that an older epidemic is likely to be a much more
expensive one to manage. And we know that all jurisdictions are
seeing new infections each year and increasing numbers of persons
with HIV and AIDS requiring a range of services. The state of
emergency associated with this epidemic is not confined to one
region, but continues in heavily impacted States and throughout the
Nation. It would seem that if Ryan White funds are to follow the
epidemic, they must continue to flow to all jurisdictions and be
increased in order to address overall increased need. I've heard
discussion around "reforming" and "modernizing" the CARE Act,
but I hope these are not euphemisms for taking resources away
from some people living with HIV and AIDS in order to shift
funds. Again I would ask, what is the rationale for redistributing
funds, and why do the Administration's principles focus on
shifting badly needed funds around instead of enhancing resources
and services in all jurisdictions?
Answer:
The Administration's Principles and proposal focus on the best
way to distribute the monies already appropriated by Congress and
does not focus on new congressional appropriations. Both the
IOM report "Measuring What Matters" and the recent GAO report,
"Changes Needed to Improve the Distribution of Ryan White
CARE Act and Housing Funds" have concluded that there are
large disparities in per case funding of HIV/AIDS due to multiple
provisions in the Act which result in a distribution of funds among
grantees in a manner that does not reflect the relative distribution
of AIDS cases in these jurisdictions. If additional funding were
made available without removing these provisions, we would not
achieve the goal of redistributing funds more equitably as funds
would flow to the same jurisdictions that have higher per case
funding at the present time.
2.)
Elimination of "Double Counting": I have a few questions
about the Administration's reauthorization principle that calls for
the elimination of so-called "double counting" of AIDS cases
between Title I metropolitan areas and States, which the principle
maintains contributes to an unequal distribution of Federal funds.
a.)
Question:
First, the principle suggests that an equal dollar-per-case
distribution of Ryan White funds can be achieved by adjusting the
Title I and Title II formula awards only, thus disregarding the rest
of the CARE Act, including Title I supplemental awards as well as
Title III, Title IV, and Part F awards. The principle states that its
goal is to count every AIDS case equally and distribute funds in a
fair manner. How can this goal be achieved when the principle
fails to consider funding from all titles of the CARE Act?
Answer:
The 80/20 provision was instituted in the 1996 reauthorization
to adjust for concerns that combined Title I and Title II funds in
states with EMAs caused more funding per AIDS case than states
without EMAs. This provision created a two-part formula for Title
II base funding that takes into account the number of AIDS cases
that reside within the state but outside of any EMA's
jurisdiction. The methodology is as follows: The most recent 10
years of ELCs are calculated for all states and territories. 80% of
the ELCS (award is) are divided among all states and territories
based upon each state's proportion of the total ELCs in all states
and territories. The remaining 20% is based upon each state's
proportion of the total ELCs in all states and territories that are
located outside the EMAs within a state. However, this does result
in the double counting effect. In effect, a portion, but not all of the
cases attributed to an EMA in a state are counted twice in
calculating the Title II base award. Eliminating the "double
counting" phenomenon would mean that the state's base award, in
a state with EMA(s), would be based solely on the ELCs in the
non-EMA area of the state.
The Administration, after much deliberation, has determined
that the Title structure of the Ryan White CARE Act should
remain. The findings of both IOM and GAO are conclusive:
without altering several legislative provisions that create structural
barriers under Titles I and II in the CARE Act, funding per AIDS
case will continue to vary greatly. Because of the current
structural barriers, the CARE Act will be unable to distribute funds
equitably and effectively address unmet need across the country.
Our goal is to distribute CARE Act dollars equitably so that
funding is available to serve individuals living with HIV/AIDS
who cannot afford to pay for the care they need.
b.)
Question:
Second, I have a concern about the impact of this principle on
the jurisdictions with the largest numbers of persons living with
HIV and AIDS. Consistent with its intent - to direct assistance to
the jurisdictions disproportionately affected by the epidemic - the
CARE Act has provided direct funding to metropolitan areas
impacted by the epidemic to ensure a coordinated local response.
At the same time, the CARE Act has recognized the key role of
States -- which administer Medicaid and regulate the health care,
health insurance and other key sectors -- in coordinating a
statewide response, by giving States partial credit for their AIDS
cases in Title I cities. These considerations are equally valid
today. Any application of this principle will lead to a devastating
loss of resources to high-prevalence States. For example,
eliminating the statewide component of the Title II formula would
lead to a loss of about $54 million in the five highest prevalence
States - New York, California, Florida, Texas and New Jersey.
These five States are home to more than half of all Americans
living with AIDS. Six additional jurisdictions would lose more
than half of their Title II base funding for HIV care - the District
of Columbia, Massachusetts, Connecticut, Missouri, Nevada, and
Minnesota. In all, 18 States would lose more than $76 million in
Title II funding. While some areas undeniably need additional
funding, is it reasonable to reduce resources in the jurisdictions
that are hardest hit by the epidemic?
Answer:
The President's Principles call for more equitable distribution
of CARE Act funds, which is paramount in the reauthorization.
Changes in the CARE Act are not intended destabilize services,
but are designed to assure that persons in need of HIV services and
unable to pay for them shall be able to receive those services, both
in urban communities and in rural communities. By maintaining
important provisions in the legislation, such as maintenance of
effort and matching fund requirements, the Administration will
ensure that states continue to contribute state and local funds to
critical HIV/AIDS services to minimize any impact that
redistribution of CARE Act funds might have.
b.)ii.
Question:
How would the Administration propose to address possible
funding reductions in the highest prevalence States? Wouldn't a
more reasonable approach involve increasing resources to address
overall increased need and to assure that all persons living with
HIV and AIDS have access to care?
Answer:
The Administration's Principles related to equity in funding
distribution are based on current funding levels and do not address
additional Congressional appropriations as a means to attain equity
among jurisdictions and States. If additional funding were made
available without removing these provisions, we would not achieve
the goal of redistributing funds more equitably as funds would
flow to the same jurisdictions that have higher per case funding at
the present time.
3.)
Question:
My question on the SNCSI principle relates to the index itself.
The development of a needs-based index is of concern insofar as
data that would be used to make allocation decisions might not be
universally available. For example, one important measure of need
would be HIV cases, but we know that name-based HIV
surveillance data is collected in only 33 states. When data are not
universally available for eventhe most basic measure of need for
HIV services, is it your belief that a meaningful, scientifically
sound, feasible needs-based funding formula is possible at this
time?
Answer:
The Administration's CARE Act reauthorization principles call
for the establishment of objective indicators to determine severity
of need (SON) for funding of core medical services and proposes
that such an index take into account HIV prevalence, poverty rates,
availability of resources including local, state and Federal
programs and support, and private resources. There are
established national data bases from sources including Census,
Labor, CDC, CMS, HRSA that are being examined by HRSA in
response to the IOM report, "Measuring What Matters:
Allocations, Planning, and Quality Assessment for the Ryan White
CARE Act," that may be utilized in the development of a
meaningful and scientifically sound needs-based funding formula.
Insofar as the status of HIV surveillance data collection by all
states, the CARE Act requires that all states have HIV reporting in
place by 2007 to receive formula grants under Titles I and II of the
Act. The fact that the SON index will need to take into account
HIV data means that there will need to be close coordination in the
implementation of both HIV data and the SON index proposals.
b.)
Question:
My question relates to the existing Title I and Title II formulas,
which are based on estimated living AIDS cases involving a
weighted, ten-year case count. The formula does not account for
people living with AIDS diagnosed more than ten years ago, who
are likely to be the persons requiring the most intensive services.
The formula might have been appropriate when the CARE Act was
first authorized, but today, due to successes in terms of treatment,
people with AIDS are living much longer. I know the
Administration's principles support changing the formula to
incorporate a SNCSI, but if a scientifically sound, feasible needs-
based index is not forthcoming, how would the Administration
propose to distribute resources in a manner that considers all
persons living with this disease that need services?
Answer:
The Administration's Principles for reauthorization of the
CARE Act, propose key new provisions that will distribute
resources in a manner that follows the epidemic, including:
? Using HIV Cases in Formula -- Maintain the current
statutory requirement that all states submit HIV data by the
start of fiscal year 2007. Having the full scope of HIV is
critical to successful care and treatment programs that
prevent people from advancing to AIDS.
? Eliminating Double Counting -- Eliminating the double
counting of HIV/AIDS cases between major metropolitan
areas (Title I) and the states (Title II).
? Eliminating Hold-Harmless Provision -- Eliminating
current provisions that entitle cities to be "held harmless"
in funding reductions.
The elimination of these provisions will better target funds to
heavily impacted communities and aid in getting persons with
HIV/AIDS into care earlier in disease progression by assuring
every AIDS case is counted equally and areas get the funding
assistance they need.
c.)
Question:
Still another concern about the SNCSI principle is the proposal
to use HIV incidence - or new cases of HIV per year - as an
indicator of need, when the true indicator of need would be
HIV/AIDS prevalence - the total number of persons living with
HIV and AIDS. Medical advances, reductions in deaths, and new
infections each year result in more and more people living with
this disease. The goal of addressing this epidemic can only be
achieved by recognizing all persons living with HIV and AIDS
who need services. All that said, why propose a formula that fails
to consider all of the individuals we are seeking to serve by
awarding funds based only on new cases of HIV?
Answer:
One variable under consideration for the Severity of Need
Index is HIV prevalence. A number of other data elements from
CDC's HIV/AIDS Reporting System (HARS) will also be
considered in the development of the index. HIV prevalence will
be examined by stage of disease (HIV or AIDS); progression to an
AIDS diagnosis with a year of the HIV diagnosis; AIDS diagnosis
without a previous HIV Diagnosis; HIV prevalence by age,
race/ethnicity, and gender.
d.)
Question:
A final concern about the SNCSI principle is that it cites
significant differences in access to HIV care throughout the
country and recommends a drastic change to the formula for
allocating funds to States and localities. The principle suggests
that differences in Ryan White Title I and Title II funding to States
are responsible for different levels of HIV/AIDS services among
States. I think we can safely say that differences in access to
services are attributable to many factors, including the differences
in resources that States, themselves, provide for the care of persons
with HIV/AIDS as well as the services available through medical
assistance programs. Is it realistic to view a single financing
mechanism - specifically, the CARE Act -- as the means to
equalize these inherent differences?
Answer:
It is not realistic to view a single financing mechanism as a
means to equalize differences in HIV/AIDS resources across the
country. Congress has had an implicit expectation that State and
local governments, other funders, grantees, and subgrantees would
share the financial burden of HIV treatment and support services.
The expectation that States would contribute financially to HIV
services was underscored through the CARE Act State payer of
last resort, maintenance of effort, and matching funds
requirements. While the current economic climate is compounding
the pressure on the federal government, states, and localities to
control health care expenditures, these CARE Act legislative
provisions go far in assuring that all other private and public
financial resources are utilized before CARE Act funds are tapped
for payment of HIV/AIDS care and treatment. Thus provisions in
the CARE Act such as these serve as a means to require states and
localities to maintain existing HIV/AIDS financing resources and
protect critical CARE Act dollars from being used to supplant
other available resources.
4.)
Question:
Seventy-five Percent Set-Aside for Core Medical Services:
One of the Administration's principles calls for the establishment
of core medical services and would impose a requirement to use 75
percent of Ryan White funds for these core medical services. This
requirement is inconsistent with years of publicly funded health
and social services that have recognized the key interplay between
medical care and other services, including but not limited to
adequate nutrition, housing, case management (especially for
persons with complex medical care needs), and outreach and
education to bring people into care and to prevent further
transmission. Recognizing that the CARE Act is but one
component of a wide array of publicly financed health and medical
care programs, and that the CARE Act is intended as payer of last
resort, it would seem more efficient to allow jurisdictions to utilize
funding as appropriate based on local needs and priorities.
Variability among States in terms of populations impacted and
their needs, alternative sources of financing and health coverage,
and a wide array and composition of health and social service
providers suggest that the flexibility that has been a hallmark of the
CARE Act should continue. Perhaps encouraging Medicaid
expansion programs for people with HIV would prove to be more
beneficial than imposing restrictions on CARE Act funds with
regard to core services. The Early Treatment for HIV Act, which I
tried to pass in the Energy and Commerce Medicaid markup comes
to mind as a reasonable means of enhancing access to medical
services. It is not clear that creating parameters regarding
allowable uses of CARE Act funding will result in increased or
enhanced coverage. Finally, it is my understanding that most, if not
all, jurisdictions that receive Ryan White funding do not support
this principle. What is the rationale for or proposed benefit of
imposing this sort of restriction? Is there research to suggest that
imposing this type of requirement will result in better managed
services?
Answer:
Advancements in HIV/AIDS care and treatment mean that
people living with HIV/AIDS are living longer and healthier lives.
Efforts to identify persons earlier in disease progression and bring
them into care also means an increasing numbers of uninsured or
underinsured are dependent on the CARE Act for care and
treatment. In 2004, 71% of CARE Act funding was directed to
health care services and medications. An additional 9% of CARE
Act funding supported case management services. The
establishment of a minimum limit of 75% reflects the amount of
CARE Act resources that will minimally need to continue to meet
this need. HRSA does include housing assistance in its definition
of health related support services. Job assistance services are not
eligible for funding under the CARE Act. We are not aware of any
research that suggests increasing the threshold to 75% will result in
better managed services. It is important that care coordination is
an integral part of core medical services provided under the CARE
Act in order to assure optimum management of patient care and
program services.
a.)
Question:
AIDS Drug Assistance Program (ADAP) I have two questions
about AIDS Drug Assistance Programs. My first question relates
to fiscal year 2006 funding. AIDS Drug Assistance Programs
across the country currently have nearly 1,000 people (954) on
waiting lists. After rescissions, the FY06 budget provides a
negligible $2.2 million appropriation increase nationally for this
vital program that has a historical growth rate of more than $100
million per year. We applaud the President's proposal to add $70
million to the FY 07 budget to address ADAP need. In light of the
President's FY 07 proposal, will the Administration support an
emergency appropriation for ADAPs during FY06 to prevent the
growth of waiting lists, or will people living with HIV/AIDS in
need of medications have to wait another year for relief?
Answer:
The Administration does not plan to seek an emergency
appropriation for ADAP at this time.
b.)
Question:
Second, again, while we applaud the Administration's proposal
to provide $70 million in additional funding to address ADAP
waiting lists, my concern is that limiting the use of the funding to
the elimination of waiting lists does not address the complexity of
the issue. I think we all agree that all Americans should have
access to the medications they need to stay alive. ADAP was
constructed and continues as a payer of last resort, providing
access to costly medications when there is no other source of
coverage or the individual cannot afford to pay for the
medications. Similar to variations in Medicaid, States have
constructed widely varying ADAP programs in terms of eligibility,
formularies, etc. Because Federal funding has not kept pace with
ADAP program growth, some States have waiting lists for
medications. But it is also true that in order to avoid the
development of waiting lists, some States have instituted other cost
containment measures, such as eligibility restrictions and reduced
formularies. The end result is even more variation in access to
care. It seems that providing funding for States that have ADAP
waiting lists, without considering the composition of ADAP
programs and eligibility standards, especially in those States that
have initiated or plan to initiate cost containment measures, will
not be an equitable way in which to address the ADAP crisis.
Instead of limiting the additional ADAP resources to States with
waiting lists, wouldn't it be more beneficial to expand the
eligibility for these funds in order to enhance ADAP resources in
all jurisdictions that are struggling to provide medications to their
residents with HIV and AIDS?
Answer:
The $70 million will be used to help the States end current
ADAP waiting lists and help support care for additional patients.
The funding mechanism is under discussion within the
Department.
6.)
Question:
Elimination of "Hold Harmless" Provisions: The principle that
calls for the elimination of provisions that entitle cities and States
to be held harmless is a major concern. The "hold harmless"
provisions limit the extreme service disruptions that would result
from the precipitous loss of resources to a jurisdiction and give
time for a local response to ensure that no one loses critical
services. It is in light of the Administration's apparent intent to
redistribute CARE Act resources that I raise this concern. The
elimination of the "hold harmless" provisions might be viewed as a
means of fostering shifts in funds to address disparities. However,
these disparities cannot be corrected through major shifts in
resources between states without compromising services for
persons living with HIV and AIDS in jurisdictions that lose
funding. How would the Administration propose to address the
disruption in services that would accompany drastic reductions in
resources in some jurisdictions as a result of the Administration's
principles? And again I have to ask - wouldn't a better approach
be to increase resources to keep pace with the continued growth of
the epidemic and address overall increased need?
Answer:
The Administration is attempting to respond in two ways: 1)
by seeking to increase funding resources for HIV/AIDS care and
treatment as reflected in the President's FY2007 budget; and 2) by
proposing through the Admnistration's Principles the elimination
of structural barriers in the CARE Act to allow better targeting of
these new dollars to respond to the epidemic in our hardest hit
communities.
7.)
Question:
Ryan White CARE Act Feedback Meetings and Alternatives to
Principles Has the Administration considered any alternative
proposals? For example, I understand that the National Alliance of
State and Territorial AIDS Directors, or NASTAD - an
organization that represents State health department HIV/AIDS
program directors - has developed alternative recommendations
for a reauthorized CARE Act. In addition, I understand that a
Ryan White Legislative Group has been established to offer
alternative solutions to reauthorization issues. Has the
Administration considered alternative proposals to address the
need for enhanced resources and resolve variations in access to
care?
Answer:
The Administration began work on CARE Act reauthorization
in January, 2003. Since then, there have been many opportunities
provided by the Administration for HIV/AIDS organizations,
persons affected by HIV/AIDS, and the public to offer comments
and proposals on the reauthorization of the CARE Act. The
Administration has had discussions with key constituent national
groups including National Alliance of State and Territorial AIDS
Directors (NASTAD) and Communities Advocating Emergency
AIDS Relief (CAEAR) to hear their views and alternative
proposals on changes to the CARE Act. In addition, both the
CDC/HRSA Advisory Committee on HIV and STD Prevention
and Treatment (CHAC) and the Presidential Advisory Council on
HIV/AIDS (PACHA) developed reauthorization proposals
resulting from public meetings (which were attended by hundreds
of people representing themselves and many organizations) and
other opportunities to hear constituency groups' views and
proposals on the CARE Act reauthorization. Both the CHAC
recommendations and the PACHA resolution included, among
other proposals, better targeting of CARE Act resources to follow
the epidemic in order to promote equity in the allocation of CARE
Act resources.
8.)
Question:
Restructuring the Ryan White CARE Act While it does not
appear to be among the Administration's principles, I have heard
proposals that call for drastic modifications to the structure of the
CARE Act, including eliminating or collapsing titles. Is it the
Administration's intent to change the basic structure of the CARE
Act in an extreme manner, such as eliminating or collapsing titles?
Answer:
No, the intent of the Administration is not to collapse or
eliminate the CARE Act Titles or the programs funded under the
various Parts and Titles of the CARE Act
Irritable Bowel Syndrome (IBS)
1).
Question:
Secretary Leavitt, I hold great interest in the National Institute
of Diabetes and Digestive and Kidney Diseases' (NIDDK)
research portfolio on Irritable Bowel Syndrome or IBS. Can you
provide the Committee with the level of funding that NIDDK has
dedicated to gastrointestinal functional and motility disorders over
the last five years?
Answer:
The NIDDK supports a broad-based research approach to IBS
that includes fundamental research in gastrointestinal motility,
immunology, and cell biology, and clinical research in patients
with IBS. This research is aimed at understanding the
development of the pathways that control motility mechanisms in
the gut; research on the integration of pain, motility and behavioral
neural circuits, and the relationship of gut inflammation to these
pathways; translational research aimed at moving discoveries in
animal models into studies in humans; and clinical studies.
NIDDK funding for IBS research for fiscal years 2001 through
2005 was: FY 2001, $9.3 million; FY 2002, $10.8 million; FY
2003, $16.5 million; FY 2004, $16.9 million; and FY 2005, $19.4
million.
The Honorable Charles Gonzales
1.)
Question:
Secretary Leavitt, as you know under current law, there is a
problem with the Medicare physician payment system. According
to the American Medical Association, Medicare payments to
doctors are slated to be cut every year for the foreseeable future.
Beginning in 2007 doctors will see a cut of 4.6 percent in their
Medicare payments, and a total cut of 34% over the next nine
years, about $26,000 per physician per year. First, I would note
that the President's Budget includes no proposal to address this
matter. There is language indicating you may wish to address this
issue, but I would like to know - is it correct to state that at this
time the Administration has no proposal, legislative or otherwise,
to fix physician payments?
Answer:
The Deficit Reduction Act (DRA) of 2005 eliminated the
negative physician update that would otherwise have taken place
for 2006. In 2006, the physician community is developing quality
measures that would cover a broad group of physician specialties
and a wide range of clinical areas for physicians to begin reporting
in 2007. We are working closely with the physician community to
develop these evidence-based quality measures. During 2006, we
are conducting a physician voluntary reporting program to allow
physicians to report some existing quality measures and to allow us
to test administrative mechanisms for reporting such measures.
We are also examining the administrative issues that would be
involved with alternative mechanisms to reward physicians who
report information on quality measures. As the year transpires, we
will assess progress in the development of performance measures
for physicians, as well as mechanisms for the reporting of
measures in 2007. This will provide physicians with the
opportunity to report measures first, leading to payment for
reporting and performance on such measures in the future. We
would be happy to work with you and your colleagues on the
physician update issue for 2007 and future years.
2.)
Question:
This is not a new and unexpected problem. Congress has had
to make adjustments to Medicare physician payments over the past
number of years since President Bush has been in office. The
Medicare Payment Advisory Commission (MedPAC) first called
for a new formula in March of 2001- two months after the
beginning of President Bush's first term. How is it that after this
many years of having a problem that is clearly identified and has
been discussed in numerous hearings, letters to the Administration,
public forums and other venues, the Administration still has
absolutely no proposed solution? Can you tell me when the
Administration will have a proposal to address the physician
payment cuts in Medicare
Answer:
The President's Budget indicates support for linking quality to
Medicare payment in a cost neutral manner. Given concerns about
the overall financing of the Medicare program, we do not believe
that providing additional aggregate funding to finance incentive
payments is either supportable or necessary. On the other hand,
we believe that savings from reducing care that is unnecessary or
otherwise inappropriate affords opportunities to fund incentive
payments. We believe we should examine possibilities of
improving care coordination and using some of the savings
generated in one payment system to fund incentives in another, as
long as these reforms do not provide inappropriate incentives not
to furnish necessary care.
The foundation of effective pay-for-performance initiatives is
collaboration with providers and other stakeholders to ensure that
valid quality and efficiency measures are used, that providers are
not being pulled in conflicting directions, and that providers have
support for achieving actual quality improvement. Consequently,
to develop and implement these initiatives, we are collaborating
with a wide range of health care providers, other public agencies,
and private organizations who share our goal of improving quality
and avoiding unnecessary health care costs. CMS is working with
the provider community to identify and test budget-neutral
incentives that will stimulate Medicare providers to improve
performance on quality and efficiency measures.
3.)
Question:
Is this current reimbursement formula for physicians a fair and
realistic reimbursement formula for doctors
Answer:
The current physician payment system focuses on payment for
individual services, but does not provide incentives for physicians
to take into account all of the services furnished to beneficiaries to
treat an episode of care, or furnished during a period of time to
treat chronic disease. This often has the effect of directing more
resources to delivering care that is not of the highest quality (for
example, duplicative tests and services, as well as hospital
admissions or visits to treat potentially avoidable complications).
Conversely, providers who have good ideas and want to take
action to improve quality of care find that Medicare's physician
payment system does not provide them with the resources or the
flexibility needed to do so. As a result, providers are unable to
invest in activities that, properly implemented, have the potential
to improve quality and avoid unnecessary medical costs.
Linking a portion of Medicare payments to valid measures of
quality and effective use of resources would give providers more
direct incentives and financial support to implement the innovative
ideas and approaches that result in improvements in the value of
care that our beneficiaries receive. CMS supports provider
payment reforms that would encourage quality and efficiency, and
discourage increased complications and costs.
4.)
Question:
Secretary Leavitt, I am deeply concerned about the potential
impact of proposed reductions in federal Medicaid spending on
children and on children's hospitals, since Medicaid pays for the
health care of one in four children and nearly half of the patient
care in children's hospitals. CHRISTUS Santa Rosa Children's
Hospital in my district is the largest provider of Medicaid services
in the state of Texas-more than 70% of all of its patients are
covered by Medicaid. Additionally, Texas has the fastest growing
child population in the nation. Please explain to me what the
administration proposes to do to make sure that the $60 billion
reduction in Medicaid spending won't jeopardize the ability of
children to receive the care they need, particularly the sickest
children in the country who rely on children's hospitals.
Answer:
Last year when you addressed this question to me I reported
that the President's FY 2006 Budget had the goal of cutting the
budget deficit in half by 2009. Some of the savings to achieve that
goal were proposed to come out of the budget for Medicaid and
SCHIP-- in fact, the budget proposed $60 billion in savings over
ten years for Medicaid and SCHIP. The net savings for these two
programs, however, was $44.5 billion because the budget also
included $16.5 billion in proposed new spending.
The President's commitment to Medicaid reform proposals
culminated in the Deficit Reduction Act of 2005 (DRA) which
helps to achieve a transformation of Medicaid from a 1960s
welfare program to a 21st century, innovative and adaptable
provider of health care services for a broad spectrum of
Americans. The President's FY 2007 builds on the success of the
DRA by including both legislative and administrative proposals.
Taken together these modest changes would save approximately
$13 billion over five years.
With regard to specific services for children and other
vulnerable populations, the DRA provides that States can choose to
implement benefit flexibilities authorized by a new Section 1937
of the Social Security Act. However, the statute prohibits states
from requiring certain groups of individuals to enroll in benchmark
coverage, such as pregnant women, certain low-income parents,
adults and children with disabilities, dual eligibles, and certain
other aged and disabled individuals in need of long term care or
adults and children with special needs.
Non-disabled children can be offered the benchmark or
benchmark equivalent coverage specified in Section 1937, and for
those children under 19, states will be required to provide wrap-
around coverage consisting of EPSDT services if the benchmark
and/or benchmark equivalent package does not offer these
services. CMS policy is that EPSDT services will remain intact for
children, and CMS will not approve any State plan amendment
submitted under the new section 1937 that does not include the
provision of EPSDT services for children under 19 as defined in
section 1905(r) of the Social Security Act.
5.)
Question:
Secretary Leavitt, you have identified targeted case
management as one area where states should cut their Medicaid
expenditures, yet targeted case management is an extremely
valuable service for many children. For example, a child in foster
care who has asthma, depression from suffering abuse and learning
disabilities may need his caseworker to coordinate treatment with
his teachers, doctors, therapists, foster parents and birth family.
This coordination is not waste, fraud or abuse, and in many states
this targeted case management provides a critical service and a
significant portion of the funds to serve these vulnerable special
needs children. In the face of billions of dollars worth of
additional tax cuts for millionaires, why are you suggesting cutting
this support out from under these children?
Answer:
The Deficit Reduction Act of 2005 (DRA) included a provision
to clarify what is reimbursable under the Medicaid case
management benefit and the targeted case management (TCM)
benefit. The Centers for Medicare and Medicaid Services (CMS)
is currently drafting regulations to implement section 6052 of the
DRA.
The FY 2007 President's Budget proposes to reimburse case
management at the administrative matching rate of 50 percent.
This legislative proposal was in the FY 2006 Budget and the
Administration is proposing it again because there is evidence to
indicate that states have attempted to shift costs associated with
other social service programs to Medicaid. There are instances
where the Medicaid program is being charged improperly for case
management services when another program should maintain
responsibility for payment.
Under the proposal, the match for case management will be the
same as it is for an administrative activity. It does not eliminate
federal financial participation (FFP) for case management services,
nor does it affect Medicaid eligibility for those services or any
other Medicaid services. In addition, the proposal does not affect
the amount of reimbursement that states will receive for Medicaid
services to which an individual may be referred by a case manager.
6.)
Question:
Secretary Leavitt, the budget proposes investing an additional
$1 billion in outreach efforts to enroll eligible children in CHIP.
Yet the budget also proposes freezing SCHIP funding at next
year's level. Given that health care costs continue to rise and that
many states have already cut back on services, reduced eligibility
or increased co-pays because they have the funds to service
children at current levels, isn't it disingenuous at best to spend
money on enrollment without adding funds to actually serve the
children enrolled?
Answer:
The FY 2007 President's budget proposal does not "freeze"
SCHIP funding; it assumes SCHIP will continue at its current
level. We look forward to working with Congress on the
reauthorization of SCHIP.
Approximately $9.5 billion in federal SCHIP allotments is
available to states for FY 2006, not including the FY 2003
redistribution ($171.6 million) or the FY 2006 additional allotment
($280 million) to eliminate funding shortfalls (as appropriated by
the Deficit Reduction Act of 2005).
In addition, there are sufficient funds in SCHIP to meet current
state needs, as well as to cover additional children that would be
enrolled as a result of the comprehensive outreach efforts that the
President has proposed through the "Cover the Kids" campaign.
Therefore, if the President's redistribution and outreach proposals
are passed, we estimate that there will be plenty of funding in the
system to cover these children.
7.)
Question:
Secretary Leavitt, the passage of the Medicare Modernization
Act last Congress created a new program, Part D, to provide
prescription drug benefits for seniors. In regards to Part D benefits
and Preferred Drug lists, what criteria are going to be used to
determine the drugs available for Medicare beneficiaries? Will the
limited Oregon-style evidence-based medicine approach be utilized
or will the more complete EBM system, as originally described, be
the basis for medication reviews? How limited will the drug
formularies be and how will inclusions or exclusions be
determined?
Answer:
The MMA required that CMS develop, in consultation with the
United States Pharmacopoeia (USP), model formulary guidelines
for Part D plans. The USP guidelines identify categories and
classes of drugs, and plan formularies must include at least 2 drugs
per category and class outlined by the USP. For six categories of
drugs of critical concern -- antidepressants, antipsychotics,
anticonvulsants, anticancer drugs, immunosuppressants, and drugs
for HIV/AIDS -- CMS requires plan formularies to cover "all or
substantially all" available drugs.
CMS reviews all Part D plan formularies to ensure that
beneficiaries have access to a broad range of medically appropriate
drugs to treat all disease states. In addition, a plan formulary
design must not discriminate or substantially discourage
enrollment of certain beneficiaries. CMS created rigorous
formulary standards that rely on existing best practices in the
industry to ensure beneficiaries have access to medically necessary
drugs, while offering flexibility for plans to offer benefits in the
most cost efficient manner. Each formulary is reviewed by CMS
pursuant to 13 different criteria:
1. Review of USP categories and classes (USP Model
Guidelines)
2. Comparison with American Hospital Formulary System
categories and classes
3. Two drugs per category and class
4. Review for USP formulary key drug types
5. Review of tier placement for all drugs
6. Review of widely accepted treatment guidelines
7. Review for 6 therapeutic categories or pharmacologic
classes requiring uninterrupted access ("all or substantially
all" requirement)
8. Review for common drugs used by Medicare population
9. Quantity limit review
10. Prior authorization review
11. Step therapy review
12. Insulin supplies and vaccine review
13. Long-term Care accessibility review
Additionally, CMS has provided detailed guidance to plans
regarding the process for making formulary changes within a plan
year.
8.)
Question:
Secretary Leavitt, how does the FY 2006 Health care budget
address reimbursements for acute care health services that are
mandated for hospitals to provide?
Answer:
The Administration recognizes and supports the important part
hospitals play in our health care delivery system through the
federal health care programs that we administer. I believe that the
mandated services you are referring to in your question relate to
those required under the Emergency Medical Treatment and Labor
Act (EMTALA). In 1986, Congress enacted EMTALA to ensure
public access to emergency services regardless of a patient's
ability to pay. The statute imposes specific obligations on hospitals
participating in the Medicare program that offer emergency
services, which include providing a medical screening examination
when a request is made for examination or treatment for an
emergency medical condition, including active labor, regardless of
an individual's ability to pay. Hospitals are then required to
provide stabilizing treatment for patients with emergency medical
conditions. The provisions of EMTALA apply to all individuals
(not just Medicare beneficiaries) who attempt to gain access to a
hospital for emergency care.
Although the President's Budget does not specifically address
reimbursements for acute care health services that hospitals are
mandated to provide under EMTALA, the Centers for Medicare &
Medicaid Services is currently implementing a program that
reimburses certain health care providers for these services. Section
1011 of the Medicare Modernization Act (MMA) set aside $250
million a year for fiscal years 2005 through 2008 to assist
hospitals, physicians, ambulance providers, and Indian Health
Service and Tribal organizations to recoup a portion of their costs
associated with providing emergency services required by
EMTALA. Individuals for which eligible services may be
reimbursed include qualified undocumented immigrants who are
uninsured or cannot afford emergency care. Two-thirds ($167
million) is allotted to all 50 States and the District of Columbia,
based upon their relative percentages of the total number of
undocumented immigrants. The remaining one-third ($83 million)
is allotted to the six States with the largest number of
undocumented immigrant apprehensions. The first and second
rounds of payments to providers under Section 1011 has been
completed and was made for services rendered during the third and
fourth quarters of FY 2005.
9.)
Question:
The President's budget calls for $169 million for Health
Information Technology (HIT), an increase of $58 million over
FY2006. Some may consider this a significant increase. I don't
think it is enough. Any practicing physician will tell you about the
significant inefficiency in our current system of health care with
respect to medical records/health information. I think tremendous
gains in better care and cost savings can be achieved with better
health information infrastructure. And sooner is better than later.
How is the $169 million for HIT going to be used in FY2006? Is
this money going toward demonstration programs and what is the
process by which these demonstration programs are chosen?
Answer:
The FY 2007 budget request includes a total of $116 million
for the Office of the National Coordinator for Health Information
Technology (ONC). In addition to funds requested within ONC,
the FY 2007 request includes $50 million in the Agency for
Healthcare Research Quality to advance the use of health IT to
enhance patient safety. There is also $4 million in the Office of the
Assistant Secretary for Planning and Evaluation for independent
evaluations of EHR adoption and economic factors influencing
health IT implementations in the health sector.
ONC will continue to build upon foundational initiatives
underway through its contractors to develop the long-term capacity
to support widespread adoption of interoperable health IT. Core
activities include
? Developing and harmonizing standards that are required for
health information and data portability, which will include
a process to maintain and update these standards over time;
? Continuing the development of a certification process for
health IT, which will include refinements to existing
certification criteria for inpatient and ambulatory EHRs as
well as new criteria related to the NHIN architecture.
? Continuing the development of production-quality
prototypes for Nationwide Health Information Networks
(NHINs) which will enable secure exchange of electronic
health records (EHR) and other health data;
? Developing personal health record architectures that will be
integrated with the NHIN architecture, which will allow
personal health information data to be controlled by the
consumer and not just by clinicians and providers;
? Evaluating variations in the State laws and organization-
level business policies around privacy and security
practices, including variations in implementations of
HIPAA privacy and security requirements. Lessons will be
incorporated into the NHIN prototypes.
The Honorable Edward J. Markey
Medicare Part D
Looking at the President's Budget, I was surprised that the
President has not proposed any changes to his Medicare
Prescription Drug Program. Clearly we have seen a chaotic
implementation of a confusing and overly complex program.
Seniors have been calling for an easier solution and democrats
have proposed providing seniors with the option of comprehensive
plan that is run by Medicare which offers low cost drugs that have
been negotiated by the Secretary
1.)
Question:
The President says that he wants to offer seniors choices.
Would you support offering seniors the opportunity to choose a
plan that is administered by Medicare?
Answer:
We are very pleased that following the Part D prescription drug
benefit's initial enrollment period, more than 90 percent of people
with Medicare are now receiving coverage for prescription drugs.
Surveys by independent analysts have shown that a majority of
enrolled beneficiaries are satisfied with their coverage and are
saving money on prescription drugs. Ongoing analysis conducted
by CMS continues to show that the Medicare prescription drug
program is providing significant discounts on prescription drugs,
with available savings remaining stable over time. Cost estimates
of the Part D program are much lower than expected, in part
because of aggressive price negotiation. Lower than expected
bids, which were a direct result of price negotiations, have in turn
resulted in lower costs for both beneficiaries (in the form of lower
premiums and better benefits) and taxpayers. The Medicare
prescription drug benefit experience thus far demonstrates that
government price negotiation is unnecessary because competition
is working.
2.)
Question:
When seniors encounter problem getting their prescriptions
filled and they have to call their plan. They are usually either put
on hold (literally for hours), are hung up on or are not able to speak
with an actual person in customer relations to help resolve their
issue. 1-800-MEDICARE has gotten faster, but it can't answer
many specific questions and often tells beneficiaries that they have
to call their plans. Has CMS or HHS done anything to force plans
to reduce the plans' wait times and become more user friendly?
Answer:
We are very serious about overseeing plan call centers and
enforcing their adherence to the requirement that beneficiaries get
the information they need. Medicare beneficiaries should be able
to count on a high level of customer service from their plans. For
this reason, CMS has implemented a broad set of requirements for
plan call centers that reflect the services they should be expected to
provide reliably. CMS has been tracking actual plan performance
and complaints, and we have been taking enforcement actions
when necessary. CMS also has publicly released comparative
information on plan call center performance and complaint rates to
assist beneficiaries in identifying plans with a high level of
customer service.
3.)
Question:
On May 16th will seniors be able to go to the pharmacy and fill
their prescriptions without hassle, or will millions be turned away
once again while the states are left to pick up the tab? What has
been done to ensure that the problems in late December and early
January won't be repeated on May 15th when there will be another
wave of enrollment?
Answer:
CMS has been reaching out to beneficiaries and educating our
partner network about the importance of enrolling in the first half
of the month to maximize chances of a smooth transition to new
Part D coverage. We also have taken steps to improve the
regularity and consistency of data exchanges between plans and
CMS to increase the likelihood that pharmacies will have
enrollment and cost-sharing information available to them when
new enrollees first try to fill a prescription using their new
coverage. These efforts have resulted in significant improvements.
Public Health Service Evaluation Funding Questions:
It is my understanding that after appropriations have been
made, the Secretary reduces funding for some programs and moves
that money to other programs or even other agencies at HHS using
the PHS Evaluation funding system.
1.)
Question:
What is the purpose of PHS Evaluation funding?
Answer:
PHS Evaluation funding supports critical evaluation activities
throughout HHS. These evaluations, and the data collection and
analysis that support them, improve program performance by
ensuring that timely and accurate information is available to
support funding and management decisions. PHS Evaluation
funds finance the entire budget of the Agency for Healthcare
Research and Quality, major data collection activities in the
Centers for Disease Control and Prevention and the Substance
Abuse and Mental Health Services Administration, and other
evaluation and research activities across the Department.
2.)
Question:
What is the legal authority for PHS Evaluation funding?
Answer:
The use of PHS Evaluation funding is authorized by section
241 of the Public Health Service Act. The annual Labor, Health
and Human Services, and Education Appropriation Acts specify
the amount of funding that may be transferred from one program to
another (2.4% for FY 2006 - see Section 207, General Provisions
of P.L. 109-149), and specify, in each agencies' annual
appropriations language, the amounts of PHS Evaluation funding
to be received by specific HHS programs.
3.)
Question:
How much money was been moved within HHS though this
process in the last fiscal year? How much over the last five years?
How much do you anticipate moving in FY 2007?
Answer:
In FY 2005, the last fiscal year for which final data is available,
$827.1 million of PHS Evaluation Funds were utilized by HHS
agencies. For the five years between FY 2001 and FY 2005, a
cumulative total of $2,911.2 million of PHS Evaluation Funds
were utilized. In FY 2007, the President's Budget requests that
$845.3 million of PHS Evaluation Funds be used.
4.)
Question:
What programs within each agency are sources of PHS
Evaluation funding and which programs within each agency are
the "recipients" of PHS Evaluation funding?
Answer:
As for the sources of PHS Evaluation funding, Section 241 of
the Public Health Service Act allows the Secretary of Health and
Human Services to use up to one percent of funds appropriated for
all programs authorized under the Act for evaluation of such
programs. The actual amount to be transferred is also specified in
the annual appropriations bills. The programs of the Food and
Drug Administration and the Indian Health Service, although part
of the Public Health Service, are not authorized by this Act and,
therefore, do not participate in the PHS Evaluation program. Some
of the programs in the other PHS agencies are not financed by the
Public Health Service Act (e.g., the Maternal and Child Health
Block Grant in the Health Resources and Services Administration).
Likewise, these programs also do not participate in the PHS
Evaluation program
Recipient programs, as directed by Congress through the
annual Labor-HHS Appropriations Act, include: the entire Agency
for Healthcare Research and Quality; numerous health surveys and
occupational disease and workplace safety activities within the
Centers for Disease Control and Prevention; health surveys within
the Substance Abuse and Mental Health Services Administration;
research and evaluation conducted by the Assistant Secretary for
Planning and Evaluation in the Office of the Secretary; activities of
the Office of the National Coordinator for Health Care Information
Technology; Ryan White Special Projects of National Significance
within the Health Resources and Services Administration; research
and evaluation activities within the Administration for Children
and Families; the National Library of Medicine's National
Information Center on Health Services Research and Health Care
Technology in the National Institutes of Health; other research and
evaluation activities in the Office of Public Health and Science and
the Office of Public Health Emergency Preparedness in the Office
of the Secretary; and other agency-specific efforts to evaluate the
effectiveness of individual programs.
5.)
Question:
At what point in the budget process are decisions about PHS
Evaluation funding made?
Answer:
Decisions about usage of PHS evaluation funds are made at the
same time in the budget process as decisions about the usage of
appropriated funds. The President's Budget and HHS's
Appropriation Acts specifies how PHS evaluation funds are to be
used.
6.)
Question:
What is the process by which the donor programs and recipient
programs are determined and what the process for determining the
amounts that are either given or received for each program?
Answer:
Recipient programs are identified in HHS's budget submission
to Congress and are ultimately chosen by Congress when it passes
HHS appropriation bills. Donor programs are billed
proportionately to the amount of budget authority each has for
programs authorized by the PHS Act (not counting exclusions).
7.)
Question:
Is comprehensive, understandable information about PHS
Evaluation funding available any public form? If so, where?
Answer:
As required by law, HHS submits an annual report to the
Labor-HHS Appropriations Subcommittees. This report shows the
amount each Agency receives and the amount each agency
donates.
8.)
Question:
Is comprehensive, understandable information about the
various programs affected by PHS Evaluation funding compiled in
any public form? If so, where?
Answer:
The annual report to Congress includes information on the
amounts that each agency donates. Some agencies are routinely
requested by the Appropriations Subcommittees for additional line
item detail in Questions for the Record following budget hearings.
9.)
Question:
If PHS Evaluation funding were reduced or eliminated, what
would the Secretary do with the money? If that is not known, what
process would be used to make those decisions?
Answer:
In FY 2005, each donor agency contributed 2.4% of amounts
appropriated for eligible programs under the PHS Act
authorization and not otherwise excluded. If less PHS Evaluation
funding were allocated by Congress, then the contribution from
these programs would be less than 2.4%, more money would stay
where it was originally appropriated, and less would be transferred
to places where it is used for evaluation activities and the support
of other ongoing programs, as currently directed by Congress.
Avian Flu /pandemic
1.)
Question:
With Katrina, we had a situation where because everyone was
in charge, no one was in charge. I am afraid that we are setting
ourselves up for another case of this with our plans for pandemic
flu. Who is ultimately in charge of pandemic preparations? Are
you in charge, is Dr. Gerberding in charge, is Secretary Chertoff in
charge or does the buck stop with someone else?
Answer:
The Department of Health and Human Services serves as the
Federal Government's primary agency for the public health and
medical preparation and planning for and response to a pandemic.
The Secretary of Health and Human Services will lead Federal
health and medical response efforts, will serve as the primary
Federal spokesperson for pandemic health issues, and coordinate
the actions of other departments and agencies in the overall public
health and medical emergency response efforts. The Secretary of
Homeland Security will provide overall incident management for
the Federal response, and coordinate with HHS and other Federal,
State, and tribal agencies in providing non-medical support. The
Secretary of Homeland Security will also gather and fuse
information in order to provide a "common operational picture" for
the Federal Government.
The National Response Plan (NRP) stipulates mechanisms for
coordination of the Federal response, but sustaining these
mechanisms for several months to over a year will present unique
challenges. While day-to-day situational monitoring would likely
occur through a central operations center, critical decision-making
would be accomplished through an interagency body comprised of
senior decision makers from across the Government. This would
occur through a mechanism such as a joint interagency task force.
These and other considerations applicable to response to a
pandemic will be incorporated in the NRP review process and
inform recommendations on revisions and improvements to the
NRP and associated annexes.
Irrespective of the mechanism used for interagency
coordination, and pursuant to the NRP, policy issues that cannot be
resolved at the department level will be addressed through the
Homeland Security Council/National Security Council-led policy
coordination process.
2.)
Question:
A special interest legal liability exemption rider was inserted
into Department of Defense Appropriations Conference Report at
the last minute. This rider provides virtually unlimited liability
protection to the drug industry and no money for compensation to
victims if you make a declaration that a qualified pandemic or
epidemic product deserves this liability protection. I am concerned
that the term "epidemic product" is overly broad and I would like
to get your opinion on what is covered by this term and how you
plan to use this power to exempt the drug industry from liability.
Answer:
We are very pleased that Congress has provided limited
liability protections in this area. As you know, we have proposed a
dramatic plan to ensure the nation's preparedness against a
possible pandemic influenza that would have devastating effects.
One of the key barriers to our preparedness is the need for a
strong and robust domestic vaccine manufacturing infrastructure
that has the capacity to quickly ramp up production to provide
vaccines for 300 million Americans. Since 1979, the number of
U.S. licensed vaccine manufacturers has declined from 26 to 8.
And for many vaccines, there is no longer a US-based
manufacturer.
One reason for this, along with an uncertain market and other
factors, is the continuous threat of liability facing vaccine
manufacturers. As we developed our plans for pandemic flu, the
vaccine industry made clear to us that there were three barriers that
had to be addressed:
1. The threat of unwarranted liability
2. The lack of a guaranteed purchaser
3. The importance of streamlining regulatory barriers.
With Congress' help, we are now able to address each of these
barriers. We are pleased that Congress has acted to provide limited
liability protections for vaccine manufacturers and providers, with
an exception to allow suits to proceed against companies who act
with willful misconduct. We believe this strikes an appropriate
balance of removing the threat of frivolous and unwarranted tort
suits, while still retaining appropriate access to court remedies.
With respect to our pandemic influenza vaccine contracts, we do
plan to make use of the authorities afforded under the PREP Act.
It seems clear to me that Congress intended to focus this Act on
products to meet the threats of pandemic flu and bioterrorism.
While it is premature to discuss future hypothetical situations, I
assure you we will strive to use this authority in a manner
consistent with good policy and Congressional intent. We are also
pleased that Congress has acted to put in place a structure to ensure
that Americans injured by a vaccine to treat or prevent pandemic
flu are appropriately compensated.
3.)
Question:
Do you think it would be appropriate to use this power to
protect Merck who did not follow up on critical studies that
indicated that Vioxx was linked to heart attacks from liability
claims? Yes or no?
Answer:
We are very pleased that Congress has provided limited
liability protections in this area. As you know, we have proposed a
dramatic plan to ensure the nation's preparedness against a
possible pandemic influenza that would have devastating effects.
One of the key barriers to our preparedness is the need for a
strong and robust domestic vaccine manufacturing infrastructure
that has the capacity to quickly ramp up production to provide
vaccines for 300 million Americans. Since 1979, the number of
U.S. licensed vaccine manufacturers has declined from 26 to 8.
And for many vaccines, there is no longer a US-based
manufacturer.
One reason for this, along with an uncertain market and other
factors, is the continuous threat of liability facing vaccine
manufacturers. As we developed our plans for pandemic flu, the
vaccine industry made clear to us that there were three barriers that
had to be addressed:
1. The threat of unwarranted liability
2. The lack of a guaranteed purchaser
3. The importance of streamlining regulatory barriers.
With Congress' help, we are now able to address each of these
barriers. We are pleased that Congress has acted to provide limited
liability protections for vaccine manufacturers and providers, with
an exception to allow suits to proceed against companies who act
with willful misconduct. We believe this strikes an appropriate
balance of removing the threat of frivolous and unwarranted tort
suits, while still retaining appropriate access to court remedies.
With respect to our pandemic influenza vaccine contracts, we do
plan to make use of the authorities afforded under the PREP Act.
It seems clear to me that Congress intended to focus this Act on
products to meet the threats of pandemic flu and bioterrorism.
While it is premature to discuss future hypothetical situations, I
assure you we will strive to use this authority in a manner
consistent with good policy and Congressional intent. We are also
pleased that Congress has acted to put in place a structure to ensure
that Americans injured by a vaccine to treat or prevent pandemic
flu are appropriately compensated.
4.)
Question:
Do you think it would be appropriate to use this power to
protect GlaxoSmithKline who concealed information showing that
their product Paxil increased the risk of suicidality in children from
liability claims? Yes or no?
Answer:
We are very pleased that Congress has provided limited
liability protections in this area. As you know, we have proposed a
dramatic plan to ensure the nation's preparedness against a
possible pandemic influenza that would have devastating effects.
One of the key barriers to our preparedness is the need for a
strong and robust domestic vaccine manufacturing infrastructure
that has the capacity to quickly ramp up production to provide
vaccines for 300 million Americans. Since 1979, the number of
U.S. licensed vaccine manufacturers has declined from 26 to 8.
And for many vaccines, there is no longer a US-based
manufacturer.
One reason for this, along with an uncertain market and other
factors, is the continuous threat of liability facing vaccine
manufacturers. As we developed our plans for pandemic flu, the
vaccine industry made clear to us that there were three barriers that
had to be addressed:
1. The threat of unwarranted liability
2. The lack of a guaranteed purchaser
3. The importance of streamlining regulatory barriers.
With Congress' help, we are now able to address each of these
barriers. We are pleased that Congress has acted to provide limited
liability protections for vaccine manufacturers and providers, with
an exception to allow suits to proceed against companies who act
with willful misconduct. We believe this strikes an appropriate
balance of removing the threat of frivolous and unwarranted tort
suits, while still retaining appropriate access to court remedies.
With respect to our pandemic influenza vaccine contracts, we do
plan to make use of the authorities afforded under the PREP Act.
It seems clear to me that Congress intended to focus this Act on
products to meet the threats of pandemic flu and bioterrorism.
While it is premature to discuss future hypothetical situations, I
assure you we will strive to use this authority in a manner
consistent with good policy and Congressional intent. We are also
pleased that Congress has acted to put in place a structure to ensure
that Americans injured by a vaccine to treat or prevent pandemic
flu are appropriately compensated.
5.)
Question:
What other "epidemic products" do you think it would be
appropriate to protect from liability?
Answer:
We are very pleased that Congress has provided limited
liability protections in this area. As you know, we have proposed a
dramatic plan to ensure the nation's preparedness against a
possible pandemic influenza that would have devastating effects.
One of the key barriers to our preparedness is the need for a
strong and robust domestic vaccine manufacturing infrastructure
that has the capacity to quickly ramp up production to provide
vaccines for 300 million Americans. Since 1979, the number of
U.S. licensed vaccine manufacturers has declined from 26 to 8.
And for many vaccines, there is no longer a US-based
manufacturer.
One reason for this, along with an uncertain market and other
factors, is the continuous threat of liability facing vaccine
manufacturers. As we developed our plans for pandemic flu, the
vaccine industry made clear to us that there were three barriers that
had to be addressed:
4. The threat of unwarranted liability
5. The lack of a guaranteed purchaser
6. The importance of streamlining regulatory barriers.
With Congress' help, we are now able to address each of these
barriers. We are pleased that Congress has acted to provide limited
liability protections for vaccine manufacturers and providers, with
an exception to allow suits to proceed against companies who act
with willful misconduct. We believe this strikes an appropriate
balance of removing the threat of frivolous and unwarranted tort
suits, while still retaining appropriate access to court remedies.
With respect to our pandemic influenza vaccine contracts, we do
plan to make use of the authorities afforded under the PREP Act.
It seems clear to me that Congress intended to focus this Act on
products to meet the threats of pandemic flu and bioterrorism.
While it is premature to discuss future hypothetical situations, I
assure you we will strive to use this authority in a manner
consistent with good policy and Congressional intent. We are also
pleased that Congress has acted to put in place a structure to ensure
that Americans injured by a vaccine to treat or prevent pandemic
flu are appropriately compensated.
6.)
Question:
The legal liability exemption rider passed last year also created
a compensation fund, but did not provide any money for it. Does
the Administration plan to ask for funds to assure that
compensation funds would be available for those who might be
injured and no longer have recourse to the courts to seek
compensation for damages? If there's no funding, or not enough
funding, in the compensation fund, are the drug companies still
exempted out from legal liability for injuring the public?
Answer:
We are very pleased that Congress has provided limited
liability protections in this area. As you know, we have proposed a
dramatic plan to ensure the nation's preparedness against a
possible pandemic influenza that would have devastating effects.
One of the key barriers to our preparedness is the need for a
strong and robust domestic vaccine manufacturing infrastructure
that has the capacity to quickly ramp up production to provide
vaccines for 300 million Americans. Since 1979, the number of
U.S. licensed vaccine manufacturers has declined from 26 to 8.
And for many vaccines, there is no longer a US-based
manufacturer.
One reason for this, along with an uncertain market and other
factors, is the continuous threat of liability facing vaccine
manufacturers. As we developed our plans for pandemic flu, the
vaccine industry made clear to us that there were three barriers that
had to be addressed:
7. The threat of unwarranted liability
8. The lack of a guaranteed purchaser
9. The importance of streamlining regulatory barriers.
With Congress' help, we are now able to address each of these
barriers. We are pleased that Congress has acted to provide limited
liability protections for vaccine manufacturers and providers, with
an exception to allow suits to proceed against companies who act
with willful misconduct. We believe this strikes an appropriate
balance of removing the threat of frivolous and unwarranted tort
suits, while still retaining appropriate access to court remedies.
With respect to our pandemic influenza vaccine contracts, we do
plan to make use of the authorities afforded under the PREP Act.
It seems clear to me that Congress intended to focus this Act on
products to meet the threats of pandemic flu and bioterrorism.
While it is premature to discuss future hypothetical situations, I
assure you we will strive to use this authority in a manner
consistent with good policy and Congressional intent. We are also
pleased that Congress has acted to put in place a structure to ensure
that Americans injured by a vaccine to treat or prevent pandemic
flu are appropriately compensated.
7.)
Question:
If only some states agree to accept the federal subsidy of 25
percent to stockpile antiviral drugs, how will the U.S. government
ensure that all Americans are equally protected in a pandemic?
Shouldn't this be a federal responsibility, given all the other
responsibilities that are left to the states?
Answer:
Preparedness is a responsibility of all levels of government,
communities, organizations, families, and individuals. The federal
government is taking the primary lead in a variety of areas
including expanding the nation's vaccine production capacity,
procuring and stockpiling antiviral drugs, engaging in international
and domestic surveillance and monitoring, and stockpiling non-
pharmacological interventions (masks, etc..).
Specifically, for antiviral drugs, the federal government is
purchasing the majority of these drugs without any state
contribution. For the remaining 31 million, HHS is providing
equal opportunity and equal access for states to prepare. Whether
states take advantage of this opportunity will depend on their
assessment of their level of preparedness and readiness.
Finally, it is important to note that Tamiflu does not equal
preparedness; rather, it is only one of a number of tools that could
help reduce the human health effects of a pandemic.
9.)
Question
What is the status of contract negotiations for the antiviral
stockpile? By what date does the Administration anticipate
meeting its objective of 81 million courses of antivirals?
Answer:
HHS has ordered 26 million treatment courses of influenza
antivirals. By Decmber 31, 2006, 24 million courses will have
been delivered to the Strategic National Stockpile. By March 31,
2007, an additional 2 million courses will have been delivered.
The pandemic influenza supplemental appropriation in December
2005 provided funding for the majority of these 26 million courses.
The supplemental appropriation also provides funding with
which HHS will establish arrangements for State purchases of 31
million treatment courses. Under these arrangements with antiviral
manufacturers, States will pay 75 percent of the purchase price and
the Federal government will contribute 25 percent. HHS has asked
States to notify us of their intent to purchase the subsidized
antivirals.
HHS' purchase of 26 million courses and the additional State
purchases of 31 million courses are factors that have led antiviral
manufacturers to expand production capacity.
HHS' purchase of another 24 million courses for the SNS
depends on the appropriation of additional funding. HHS
anticipates that for an HHS purchase placed during the first quarter
of Fiscal Year 2007, a substantial portion of the 24 million
additional courses will be available for delivery by the end of
2007. HHS will purchase the balance of the antivirals for delivery
in 2008.
11.)
Question
Containing a pandemic is a global undertaking. Producing
vaccine for all Americans is a worthy goal; but assuring that all
people around the world can be vaccinated may provide additional
protection from a pandemic's health, social, and economic impact.
What would be the incremental cost were the U.S. to establish a
larger goal (perhaps twice the planned 600 million doses) as part of
a commitment by developed countries to contain a pandemic world
wide?
Answer:
The Administration has established a goal to enable the
production of 600 million doses of vaccine within six months of
the emergency of a pandemic influenza virus. Funding requested
by the Administration to date supports the expansion of
manufacturing capacity to produce the necessary levels of
vaccination for the United States. At this time we are unable to
estimate the cost of purchasing the vaccine toward the 600 million
dose goal. The Administration will work with the Congress to
provide the resources necessary to support the purchase these
vaccines.
We appreciate the funding Congress provided for the first year
of our Pandemic Influenza Plan. However, additional funding is
needed in FY 2007 to build on the momentum we have achieved
this year. The FY 2007 budget includes a $2.3 billion allowance
for the second year of our plan. These funds will allow us to more
fully engage vaccine manufacturers and move us closer to
achieving our goal of purchasing enough antivirals to cover 25% of
the population.
We have met with industry about how we will manage the FY
2006 funding, given that we did not receive the advanced
appropriations for FY 2007 and FY 2008. This funding and the
liability protection provided by Congress have been an excellent
first step in engaging industry to develop needed technologies,
build domestic vaccine surge capacity, and increase domestic
antiviral production capacity. We look forward to working with
you to achieve our goals in these areas.
12.)
Question
Will the additional egg-based and the new cell-based
production capacity that the federal government is funding be
available for interpandemic production of flu vaccine?
Answer:
Our plan includes a number of investments for improving
vaccine production capacity. These include expanding:
Egg-based domestic vaccine production: to acquire 20
million additional pre-pandemic vaccine treatment courses and
develop surge capacity to produce approximately 60 million
courses within 6 months of a pandemic outbreak;
Cell-based domestic vaccine production: to develop surge
capacity to produce approximately 240 million courses within
6 months of pandemic outbreak by 2010;
The development of dose-stretching technologies to extend
the vaccine supply; and
The development of commercially-produced vaccine to
protect against multiple strains.
Our FY 2006 supplemental request included $6.7 billion over
three years to meet our pandemic preparedness goals. Congress
provided funding for the first year of this plan. The FY 2007
budget seeks funding for the second year.
Office of Generic Drugs Questions
Generic drugs save consumers billions of dollars each year and
usually cost 60 to 90 percent less than the brand-name version. It is
my understanding that the office of generic drugs has a backlog of
975 generic drug applications.
Question:
Why with a clear demand for more low cost generic drugs, this
record backlog and increased number of applications has the
President's budget asked for essentially flat funding for the Office
of Generic Drugs?
Answer:
FDA understands that Congress and the public are concerned
about the high cost of prescription drug products. Generic drugs
play an important role in granting access to products that will
benefit the health of consumers and the government. Prompt
approval of generic drug product applications, also known as
abbreviated new drug applications (ANDA), is imperative to
making generic products available to American consumers at the
earliest possible date.
FDA believes that making improvements in the process for the
review of generic drug applications offers the best promise for
reducing ANDA review time. With this goal in mind, in fiscal
year (FY) 2005, FDA's Office of Generic Drugs (OGD), focused
on streamlining efforts to improve the efficiency of the ANDA
review process. OGD added chemistry and bioequivalence review
teams and has taken steps to decrease the likelihood that
applications will face multiple review cycles. OGD also instituted
revisions to the review process such as early review of the drug
master file as innovator patient and exclusivity periods come to an
end, cluster reviews of multiple applications, and the early review
of drug dissolution data.
In FY 2006, we will build on these process improvements.
We have begun a major initiative to implement Question-based
Review for assessment of chemistry, manufacturing, and controls
data in ANDAs. This improvement builds on the Quality-by
design and risk-based review initiatives of FDA's Center for Drug
Evaluation and Research. This mechanism of assessment is
consistent with the International Conference on Harmonization
Common Technical Document and will enhance the quality of
evaluation, accelerate the approval of generic drug applications,
and reduce the need for supplemental applications for
manufacturing changes.
FDA's OGD will continue to institute efficiencies in the review
process to accelerate the review and approval of ANDAs. FDA
also will continue to work very closely with the generic
manufacturers and the generic drug trade association to educate the
industry on how to submit applications that can be reviewed more
efficiently and that take advantage of electronic efficiencies that
speed application review. We also will work with new foreign
firms entering the generic drug industry. The Agency recognizes
that it will take time for these new firms to understand the
requirements for generic drug products. In the long term,
however, these efforts should shorten overall approval time and
increase the number of ANDAs approved during the first cycle of
review. In FY 2006, FDA plans to spend $62.8 million relating to
generic drugs and, specifically, $28.3 million in OGD. For FY
2007, FDA has requested $64.6 million relating to generic drugs,
$29 million specifically in OGD.
1.)
Question
Why at a time when we are trying to reduce costs in health
care, are we slowing down the approval of generic drugs?
Answer:
The approvals have continued to increase annually; FY 2003 -
284; FY 2004 - 320; FY 2005 - 361. Further, the average review
time for approval has declined from 22.3 months in 2000 to 19.5
months in 2005 and the median review time has declined from 18.9
months in 2000 to 16.3 months in 2005.
2.)
Question
What percent of the 975 generic drug applications that are in
the backlog are for first in class generics? Backlog as of 1/1/06.
Answer:
We currently do not distinguish "first generic" applications
from other applications. We are presently committed to our long
standing first-in, first-reviewed policy to review applications in
turn. We also note that it is unclear as to what would constitute a
"first in class generic" for this type of request. For example:
1) Is a "first in class generic" only the first ANDA received
referencing a brand product?
2) Would "first in class generics" include all ANDAs received
the first day that any ANDA was received for that reference
product?
3) Would a second generic for a particular reference become
the "first in class generic" if there were deficiencies in the
preceding "first" application?
4) Would only the first ANDA for any drug in a therapeutic
class be the "first in class generic"?
5) Or would an ANDA qualify as a "first in class generic" if it
were the first ANDA for a particular strength or dosage form,
say, even if other ANDAs had already been received for
different strengths or dosage forms of the reference product?
3.)
Question
How much additional funding would the office of generic
drugs need to eliminate this backlog?
Answer:
FDA's present backlog is approximately 1000 applications.
FDA is currently receiving approximately 800 applications per
year and approving about 500. To reduce the current backlog by
one third (about 330 applications) annually over three years, we
would have to approve or tentatively approve 1130 applications
per year. That number includes all of the projected 800
applications that we receive in the fiscal year plus 330 more to
reduce the current backlog. In order to approve or tentatively
approve the approximately 90 applications per month, we would
anticipate needing 70 FTEs for the first year and an additional 40
FTEs in each of the subsequent years, both to avoid having the
backlog redevelop and to address anticipated increases in the
number of ANDAs submitted. It would be necessary to have all of
the FTEs on board at the beginning of each of the fiscal years.
We should also point out that the backlog, as traditionally
defined, includes ANDAs cycling through the Office of Generic
Drugs. For example, if an ANDA is submitted and reviewed, and
there are significant problems with the ANDA, a deficiency letter
is issued to the applicant. The applicant's response, called an
amendment, goes back into the review queue to await review. In
some cases, the applicant does not respond in a timely manner due
to their own resource limitation and priorities. These types of
applications would also be considered to be part of the backlog.
Because of this dependence on applicant responsiveness, it might
not be possible to totally eliminate the backlog.
4.)
Question
On average how long does it take to conduct a first-in-class
review of a generic drug? What is the longest amount of time it has
ever taken? What is the shortest amount of time it has ever taken?
(In both cases, please cite the name of the product and the date
when it was approved.)
Answer:
As noted above, we do not differentiate between first-in-class
ANDA reviews and other ANDA reviews. Review times are
highly dependant on the complexity of the product and the quality
of the application and do not necessarily reflect the resources or
efficiency of the Office of Generic Drugs.
5.)
Question
On average how long after a brand name loses its patent
protection do generics enter the marketplace? What is the longest
amount of time it has ever taken? What is the shortest amount of
time it has ever taken? (In both cases, please cite the name of the
product and the date when it was approved.)
Answer:
The length of time for a generic drug to enter the marketplace
depends on a number of factors, such as the applicant's commercial
interest in the product, the ability of a generic manufacturer to
produce the product, whether an application is ready for approval
after the patent protections ends and if there is any exclusivity for
the product (such as pediatric exclusivity). Even after approval, a
firm may decide for its own business planning not to launch the
product. FDA does not keep records in such a way that we would
be able to readily discern the longest or shortest amount of time it
has taken for a generic to reach the market after the brand name
has lost its patent protections.
6.)
Question
It is my understanding that first-in-class applications must wait
approximately 450 days before its bioequivalence can be
evaluated, approximately 360 days before it gets a clinical review
and approximately 530 days before it is reviewed by a
microbiologist. Are these time periods correct? These seem to be
unacceptably long periods of time. What are the agencies goals
with regard to reducing these backlogs? How much additional
funding and how many additional staff would you need in order to
reduce the time to less than 120 days for each phase? To less than
90 days?
Answer:
As discussed above, the Office of Generic Drugs does not
distinguish between first-in-class applications and other types of
applications. It is true that the wait in the specific disciplines was
at that level on the date the numbers were obtained. However, the
applications do not all wait for that length of time. The chemistry
reviews are the driving force of the review process and are
reviewed according to the first-in, first-reviewed policy. When an
application has been found satisfactory from the chemistry point of
view (assessment of no deficiencies has been endorsed at the team
level), this information is communicated to the other appropriate
review disciplines (e.g., bioequivalence, microbiology). Those
applications found acceptable from the chemistry standpoint are
then moved to the top of the queue in the other disciplines so as not
to hold up an action. Clear, high quality, complete applications are
generally reviewed more easily and efficiently.
The overall goal for OGD is to meet the statutory timeframe
and act on all applications within 180-days. The staffing needed to
meet this goal and to reduce the backlog is discussed in the
response to question 3.
To be able to have all review disciplines begin to review
applications at 120 days, it could require an additional 30%
increase over the figure provided in Question 3 (91, 52, and 52
FTEs in years 1, 2, and 3). To begin review in less than 90 days
could require a 50% increase (105, 60, and 50). Since we have not
contemplated these time frames, these estimates are highly
speculative.
7.)
Question
On average how long does it take to approve a generic drug?
How does this compare to the length of time that is needed to
approve a brand name drug?
Answer:
During 2005 the average approval time for a generic drug was
19.5 months. The average time for NDA priority approvals is 10.1
months and the average time for other NDA approvals is 20.6
months. A comparison of these approval times would be
misplaced because the goal dates for new drug applications are set
by the user fee program and there are far fewer applications for
new drug products.
8.)
Question
On average how much do drug companies make for each
month that generics do not enter the market to compete with their
brand name drug after it goes off patent?
Answer:
One cannot derive a meaningful average because of the product
-specific nature of the potential profit. Further, we generally do
not have access to such information.
Substance Abuse Cuts:
Drug abuse is a huge problem in my district. Educators and
local police are struggling with how to prevent the problem from
spinning out of control. This problem is not limited to my district.
In fact, 23 million Americans struggling with severe substance
abuse nationwide.
1.)
Question
Do you agree that prevention and treatment of substance abuse
is critical to ensuring that people are healthy and productive
members of our society?
Answer:
At the heart of the Administration's success in reducing drug
use is a change in perceptions about the acceptability of using
illicit substances. Education programs and outreach activities,
backed up by scientific studies, have worked to spread the word
that illicit substance use can be harmful to a person's health and
well being, as well as a detriment to society as a whole. Effective
education and prevention programs that focus on risk reduction
and increasing resilience affect the perception of harm associated
with drugs.
Despite all our attempts there are and will be some who will
choose to use illicit drugs and many will become dependent. For
some, early interventions will help them redirect their lives. For
others, treatment will be necessary. The Administration has
adopted a public health understanding of drug use and addiction
and believes that drug use is a treatable disease. Like many other
diseases, it is a relapsing condition that often requires not just the
treatment itself but assistance in finding a job, a stable living
environment and a social life that connects them to the society they
are rejoining. Fortunately there are community-based programs,
including faith-based programs, that are available to help.
2.)
Question
Then why does the President's budget cut $72 million from the
Substance Abuse and Mental Health Services Administration
include cuts to treatment and prevention of substance abuse?
Shouldn't we be increasing our commitment to eradicating drug
abuse?
Answer:
While the $71.6 million reduction in the budget request for
SAMHSA for FY 2007 compared to its FY 2006 appropriation
reflects a decrease of 2.25 percent, the actual decrease in funding
for substance abuse is $35.9 million from FY 2006, which
represents a decline of 1.5%. Despite this decrease, all continuation
grants will be funded under the budget request, and the
Administration is requesting funding for new grants under the
Access to Recovery program that will offer choice to individuals in
need of treatment, expand the array of services to include recovery
and support services, and expand the array of providers to include
new community-based programs, including faith-based programs.
The Administration remains committed to prevention and
treatment.
3.)
Question
Please provide a list of all of the HHS programs that provide
funds to communities to help them address local issues of drug
abuse. Please include programs that fund education, prevention and
treatment.
Answer:
The Administration has requested $2.3 billion for Fiscal Year
2007 to help prevent and treat drug use. These funds will be
available through the following programs:
Substance Abuse Prevention and Treatment Block Grant - FY
2007 request $1,758,591,000. This program distributes funds to
States using a formula stipulated in statute to carry out substance
abuse prevention and treatment activities in the State. Though
there are some requirements that States must meet, States have
tremendous flexibility in how they use the funds to address their
State need. One requirement is that States must use at least 20
percent of their allotment for primary prevention.
Discretionary Grant Portfolio - FY 2007 request for prevention is
$180.6 million and for treatment $375.4 million. These funds are
made available to public and non-profit private entities on a
competitive basis to address drug use. The following are the
primary discretionary grant programs:
Access to Recovery - FY 2007 request $98 million. These grants
are made to States to implement a voucher program for treatment
that offers patients a clear and independent choice on treatment;
expands the array of services, placing emphasis on recovery
services that have been sorely needed in the treatment system; and
expand the array of providers by including new community-based
and faith-based programs to help drug users to recover. This
program also brings accountability into the substance abuse
treatment system. Fourteen States and one American Indian Tribe
received the first cohort of these grants in FY 2004. FY 2007
funds would be used for the next cohort of Access to Recovery
grants, giving the same States and all the other States a chance to
compete for funds.
Strategic Prevention Framework - FY 2007 request $95.4 million.
These grants provide program support to States to implement a
comprehensive substance abuse prevention system in the State that
relies on community involvement. At the end of FY 2006, 40
States and American Indian tribes will have received a grant.
Drug Free Communities - FY 2007 request $80 million (funds for
this program are appropriated to the Office of National Drug
Control Policy). The program is intended to reduce substance
abuse among youth; help community coalitions strengthen
collaboration; enhance intergovernmental collaboration,
cooperation and coordination; enable communities to conduct data-
driven, research-based prevention planning, and provide
communities with technical assistance, guidance, and financial
support.
Screening, Brief Interventions, Referral and Treatment - FY 2007
request $31.2 million. These grants expand and enhance State
substance abuse treatment service systems by:
? expanding the State's continuum of care to include
screening, brief intervention, referral, and brief
treatment (SBIRT) in general medical and other community
settings;
? supporting clinically appropriate treatment services for
nondependent substance users;
? improving linkages among community agencies performing
SBIRT and specialist substance abuse treatment agencies;
and
? identifying systems and policy changes to increase access
to treatment in general and specialist settings.
Targeted Capacity Expansion Grants - FY 2007 request $21
million. The purpose of these grants is to expand and/or enhance
the community's ability to provide a comprehensive, integrated,
and community-based response to a targeted, well-documented
substance abuse treatment capacity problem and/or improve the
quality and intensity of services. For example, a community might
seek a Targeted Capacity Expansion grant to add state-of-the-art
treatment approaches or new services to address emerging trends
or unmet needs.
Grants to Benefit Homeless Individuals - FY 2007 request $34
million The purpose of these grants is to enable communities to
expand and strengthen their treatment services for homeless
individuals with substance abuse disorders, mental illness, or with
co-occurring substance abuse disorders and mental illness.
"Homeless" persons are those who lack a fixed, regular, adequate
nighttime residence, including persons whose primary nighttime
residence is: a supervised public or private shelter designed to
provide temporary living accommodations; a time-limited/
nonpermanent transitional housing arrangement for individuals
engaged in mental health and/or substance abuse treatment; or a
public or private facility not designed for, or ordinarily used as, a
regular sleeping accommodation.
Children and Adolescent Programs - FY 2007 request $20.6
million. Key activities in this category include: State Adolescent
Substance Abuse Treatment Coordination grants, which help build
capacity in States to provide effective, accessible, and affordable
substance abuse treatment for youth and their families; Child and
Adolescent Mental Health and Substance Abuse State
Infrastructure grants, which focus on children, adolescents, and
youth in transition to adulthood with serious emotional
disturbance, substance abuse disorder, or co-occurring disorders,
and their families; and Family Centered Substance Abuse
Treatment Grants for Adolescents and their Families, which
provide services to adolescents and their families/primary
caregivers using previously proven effective practices that are
family centered and increase the likelihood of successful treatment
and reintegration of the adolescents into their communities
following the period of formalized treatment..
Criminal Justice - FY 2007 request $24 million There are several
initiatives related to the criminal justice population. The Family
and Juvenile Treatment Drug Courts (Drug Courts) Grant Program
provides funds to be used by treatment providers and the courts to
provide alcohol and drug treatment, wrap-around services
supporting substance abuse treatment, assessment, case
management, and program coordination to those in need of
treatment drug court services. Grants are also available to expand
and/or enhance substance abuse treatment and related reentry
services in agencies that currently provide supervision of and
services to sentenced juvenile and young adult offenders who are
returning to the community from incarceration for
criminal/juvenile offenses. Because reentry transition must begin
in the correctional or juvenile facility before release, funding may
be used for limited activities in institutional correctional settings in
addition to the expected community-based services.
Pregnant and Postpartum Women - FY 2007 request $3.9 million.
The purpose of these grants is to expand the availability of
comprehensive, high quality residential substance abuse treatment
services for low-income women, age 18 and over, who are
pregnant, postpartum (the period after childbirth up to12 months),
or other parenting women, and their minor children, aged 17 and
under, who have limited access to quality health services.
KI Questions
1.)
The Public Health Security and Bioterrorism Preparedness and
Response Act of 2002 contains an amendment, which I authored,
that requires the President to make available Potassium Iodide, or
KI, for populations within a 20 mile radius around a nuclear power
plant. According to the U.S. Food and Drug Administration, "KI
is a safe and effective means by which to prevent radioiodine
uptake by the thyroid gland, . and thereby obviate the risk of
thyroid cancer in the event of a radiation emergency." KI pills are
available for approximately 18 cents a pill, making them a cheap
and effective way to protect our citizens.
Question:
The guidelines issued August 2005 by HHS for the distribution
and stockpiling of KI appear hostile to the intention of this
provision, and appear to endorse sheltering and evacuation
INSTEAD of KI distribution - rather than embracing KI
distribution as part of an emergency plan that includes sheltering
and evacuation options. Recent evacuations during the Katrina and
Rita Hurricanes suggest that the Department's confidence that
those living nearest to a nuclear facility can be easily evacuated is
wildly optimistic. Even if citizens are able to evacuate, during
their evacuation they will likely be exposed to radioactive iodine
and they can easily be protected from debilitating side effects such
as thyroid cancer by taking KI. Furthermore, the guidelines put the
onus of responsibility for designing a plan for stockpiling and
distribution of KI on State and local governments, rather than
providing these governments with guidance on these procedures.
Given that KI is cheap, easily administered, and highly effective,
why does HHS continue to discount the benefits of KI and not
provide clear guidelines for state and local governments to access,
stockpile, and distribute KI?
Answer:
At the request of the President, HHS is working to make KI
available up to 20 miles from a nuclear power plant. The
guidelines for requesting, stockpiling and distributing KI within
the 11-20 mile radius were published in the Federal Register in
August 2005. We received comments on the guidelines from
many sectors and have been working closely with other
Departments and Agencies, as well as the States and the public to
ensure that input is heard from all parties with concerns. For states
who choose to participate in the program, the guidelines propose a
process similar to that used by the NRC to distribute KI in the 0 -
10 mile zone. As I am sure you know, there is not universal
agreement that KI should be provided beyond the 10 mile EPZ.
The KI guidelines present a balance perspective that addresses
important considerations such as pediatric populations, sheltering-
in-place, evacuation, special circumstances, current NRC
protective action measures and more. The goal of the guidelines is
to allow states to consider what distribution mechanisms,
stockpiling, and utilization options best support their current
planning initiatives. The guidelines have been submitted to OMB
for review for compliance with all statutes, including the
Paperwork Reduction Act, and budgetary considerations. HHS is
eager to receive approval from OMB so we can publish the
guidelines and move forward to provide KI to states that choose to
apply for this program.
HHS has also taken steps to procure and make available
enough pediatric (liquid) KI to protect children within the full 20-
mile radius of a nuclear power plant in those states with approved
KI distribution programs. This liquid form of KI is easier to
administer to small children than the previously available tablet
form. This acquisition was recommended by the interagency
Weapons of Mass Destruction Medical Countermeasures
Subcommittee, approved by the Secretaries of HHS and DHS and
approved by the Office of Management and Budget (OMB), under
delegated authority from the President.
Stem Cell Question
1.)
Question
Last year, when we urged the President to expand his policy on
embryonic stem cell research and provide more funding for this
exciting field of scientific research shows promise for helping treat
and potentially cure juvenile diabetes, Alzheimer's and Parkinson's
diseases, and spinal injuries, the Administration refused. However,
the President said that he was very excited about the potential of
research on stem cells that are found in umbilical cord blood.
However, the President's budget eliminates the Cord Blood Stem
Cell Bank program. Why has the President decided to eliminate
this program? Has the President changed his mind about the
potential of cord blood stem cells?
Answer:
Because a balance of $18 million remains from appropriations
made in FYs 2004, 2005, and 2006, the FY 2007 budget does not
request funding for the National Cord Blood Stem Cell program.
HRSA will use the funds remaining to implement the Cord Blood
Stem Cell program during FY 2006 and FY 2007. Specifically, in
each of these fiscal years, approximately $9 million of the
remaining balance will be used toward the implementation of the
program and the collection of an estimated total 13,800 new cord
blood units. HRSA is committed to working with you as they
begin to implement this important new program.
FDA Labeling
In the preamble of guidance that the FDA recently released on
drug labeling, to the guidance included language that asserted that
FDA decisions should preempt the states. I understand that this
preamble does not have the force of law. But I want to make sure
that I understand the Administration's position on federal
preemption. Do you think that approval by the Food and Drug
administration exempts the drug company from liability? If so, to
what extent should companies be liable for the products they have
on the market?
1.)
Question
Do you believe that people who are injured by drugs that were
approved by the Food and Drug Administration should not have
any recourse? Do you believe that they should not have any
recourse through the state courts?
Answer:
As you know, the President has called for common-sense
medical litigation reform that would allow individuals harmed to
receive fair compensation for their actual losses, but that would put
a stop to the frivolous, out-of-control lawsuits that are driving up
health care costs so dramatically. By reining in non-economic
damages, the legislation will improve access to care, by stabilizing
the malpractice insurance market and encouraging doctors to keep
practicing medicine, in particular treating high risk cases, in their
communities.
Hearing Loss:
In a response to my letter about portable music players and
hearing loss to Dr. James Battey, the director of the National
Institute on Deafness and Other Communication Disorders
(NIDCD) on February 14, 2006, Dr. Battey wrote that significant
progress has been made in hearing research. The first program that
he identified as one of the promising areas of research was the
Newborn Hearing Screening and Early Intervention. The Director
stated, "Results from NIDCD-supported research show that if
children are identified with a hearing impairment by 6 months of
age and then received appropriate intervention, they have
significantly better language development than children whose
impairment was identified after 6 months of age. Without
appropriate and timely identification and intervention, early
childhood hearing impairment interferes with the development of
oral/aural communication, impedes academic performance, and
results in negative long term vocational consequences."
Question
Why when approximately 2-3 out of 1,000 children are born
each day who are deaf or who have a hearing loss significant
enough to potentially affect their speech, language and cognitive
development and NIH identified the importance of newborn
screening does the President's FY07 budget eliminate the
Universal Newborn Hearing Screening/Trauma program?
Answer:
The Universal Newborn Hearing Screening program has
increased the percentage of newborns screened for hearing loss
prior to hospital discharge. In FY 2004, 93.2 percent of newborns
were screened for hearing loss prior to hospital discharge,
exceeding the yearly target. The FY 2007 request continues the
FY 2006 President's Budget policy and provides no funding for
this program. The more flexible MCH Block Grant may address
activities under this authority.
Ryan White:
According to the HHS Budget in Brief, the President's budget
request increases Ryan White funding by $95 million dollars and
directs $70 million to "address the on-going problem of State
waiting lists and provide care and life-saving medications to those
newly diagnosed as a result of increased testing efforts" and directs
the other $25 million to expand outreach efforts by providing new
HIV community action grants to intermediaries including faith and
community based organization, and to provide technical assistance
and sub-awards to grassroots organizations.
1.)
Question
How does the President intend to distribute the $70 million to
the states?
Answer:
The funding mechanism is under discussion within the
Department.
2.)
Question
Will it go to the ADAP program or through the Title II base
grants?
Answer:
To allow maximum flexibility, the $70 million will be
distributed to States. The States will have the option to use these
funds to purchase medications through the State ADAP and to
expand services for people living with HIV disease.
3.)
Question
Will the $25 million go to the Title II or IV programs or will it
be distributed through another program?
Answer:
The President proposed $25 million in the FY 2007 budget is
to expand outreach by providing as many as 25 HIV community
action grants to community and faith-based organizations to
provide technical assistance and sub-awards to grassroots
organizations.
Drug Safety Questions
1.)
Question:
Adderall was approved in 1960, why did it take so long for the
FDA to learn about the full range of potential risks associated with
this product?
Answer:
Twelve reports of sudden death in children were reported to
FDA between 1999 and 2003. The number of deaths reported was
less than the number of sudden deaths that would be expected to
occur in this population without treatment. For this reason, the
FDA decided not to take any further regulatory action at that time.
However, upon review of individual cases, we noted that some of
these deaths occurred in patients with underlying heart defects.
Although this is by no means proof that such patients are at
increased risk from this drug, because these defects themselves
place patients at increased risk of sudden death, we, nevertheless,
decided to change the labeling for Adderall XR in August 2004 to
include a warning that these patients should ordinarily not be
treated with Adderall products.
In February 2005, FDA issued a Public Health Advisory and
information sheets on its website at http://www.fda.gov to provide
up-to-date information about Adderall's safety profile.
2.)
Question:
How long after the FDA became aware of the safety issues
associated with Adderall did it start an investigation?
Answer:
In February 2005, when FDA became aware of Health
Canada's decision to suspend sales of Adderall XR, but not revoke
the approval in Canada, of Adderall XR as a treatment for
Attention Deficit and Hyperactivity Disorder (ADHD), FDA
reviewed the action it had already taken 6 months previously.
Once FDA learned that Health Canada's action was based on
precisely the same information upon which FDA had already
acted, it concluded that no additional labeling changes were
needed, but did decide to issue a PHA to inform the public about
Health Canada's action and to explain that we had already acted
and felt that Adderall and Adderall XR should remain on the
market. It is noteworthy that Health Canada, upon receiving
advice from its own advisory group 6 months later, decided to
return Adderall XR to the Canadian market.
As with any drug, FDA will continue to carefully assess any
new data that emerges which significantly affects the safety profile
of this drug and will take immediate, appropriate action to promote
the public health and make the public aware of its findings.
3.)
Question
Despite the many drug safety issues that have been raised over
the past couple of years, the Office of Drug Safety only received a
$4 million dollar increase. How much of the ODS funding will go
to:
a. studying safety questions that have been raised
about specific drugs?
b. updating the AERS system?
c. Setting up a program to collaborate with CMS?
d. Looking for concerning trends within
epidemiological data?
e. the drug safety oversight board?
f. the Sentinel System?
Answer:
The 07 Drug Safety increase will be applied to the CDER Drug
Safety Program, not specifically to the Office of Drug Safety.
CDER's portion of the 07 Drug Safety Increase totals $3.564
million.
a.) $0.425 million
b.) $2.0 million
c.) $0.250 million - Please note that Line c is redundant to
Line f. According to the FY 07 Congressional Justification
Drug Safety Increase description, "collaboration with CMS
will be known as the Sentinel System".
d.) $0.889 million
e.) We do not anticipate funding the costs of operating our
drug safety oversight board from this funding increase.
f.) Please see note under Line c.
The Honorable Edolphus "Ed" Towns
1.)
Question:
Secretary Leavitt, beginning in 2007 physicians will experience
a significant pay decrease totaling $176.9 billion over the next 7
years. This decline occurs in spite of the fact that physicians are
taking measures to offset these cuts by providing increased
services.
MedPac recommended giving physicians an update to address
the significant Medicare payment cuts that will be made to
physician payments over the next 10 years beginning in 2007.
However, the President's budget does not adequately address the
situation.
Additionally, Dr. Unterrick, a physician from my district
strongly expressed the concern the physicians in my district have
about the cuts to physician payments and their impact on the
delivery of health care on my "News and Views" Television
Program.
What measures are you taking to ensure that physicians who
strongly desire to continue treating their Medicare patients will be
able to do so in lieu of escalating health care costs and declining
physician payments?
Answer:
The current physician payment system focuses on payment for
individual services, but does not provide incentives for physicians
to take into account all of the services furnished to beneficiaries to
treat an episode of care, or furnished during a period of time to
treat chronic disease. This often has the effect of directing more
resources to delivering care that is not of the highest quality (for
example, duplicative tests and services, as well as hospital
admissions or visits to treat potentially avoidable complications).
Conversely, providers who have good ideas and want to take
action to improve quality of care find that Medicare's physician
payment system does not provide them with the resources or the
flexibility needed to do so. As a result, providers are unable to
invest in activities that, properly implemented, have the potential
to improve quality and avoid unnecessary medical costs.
Linking a portion of Medicare payments to valid measures of
quality and effective use of resources would give providers more
direct incentives and financial support to implement the innovative
ideas and approaches that result in improvements in the value of
care that our beneficiaries receive. Provider payment reforms
should encourage quality and efficiency, and discourage increased
complications and costs.
The physician community is developing quality measures that
would cover a broad group of physician specialties and a wide
range of clinical areas for physicians to begin reporting in 2007.
We are working closely with the physician community to develop
these evidence-based quality measures. During 2006, we are
conducting a physician voluntary reporting program to allow
physicians to report some existing quality measures and to allow us
to test administrative mechanisms for reporting such measures.
We are also examining the administrative issues that would be
involved with alternative mechanisms to reward physicians who
report information on quality measures.
2.)
Question:
Secretary Leavitt, I serve a very diverse congressional district,
which is being devastated by the impact of HIV/AIDS.
Fortunately, there are specialty pharmacies in the 10th
congressional district of Brooklyn that are able to cater to those
who are living with HIV/AIDS.
The President's FY 2007 Budget proposes states to exhaust all
other third party sources of payments before paying Medicaid
claims. Presently, states are able to pay claims as received and
then later bill other sources of coverage. I'm concerned that the
proposed policy will result in payment delays for pharmacies, and
may result in reduced willingness of pharmacies to participate in
the Medicaid program, thus reducing access to all beneficiaries and
especially those in my district.
What measures are you taking to address this potential
situation since it could prove fatal to many Brooklynites?
Answer:
Under current law, Medicaid agencies generally reject medical
claims whenever there is another third party that is legally liable to
pay the claims. The claims are returned to the provider instructing
them to bill the third party. This is referred to as "cost avoidance."
There are some exceptions to this rule. Exceptions to this rule are
found in sections 1902(a)(25)(E) and (F) of the Social Security
Act.
The FY 2007 President's Budget proposes administrative
actions to discontinue all waivers of the cost avoidance standard
for pharmacy claims. Without such waivers, states would be
required to deny any pharmacy claim for which there is a liable
third party payer. States will no longer have the option of "pay and
chase," or paying the claim and pursuing payment from a third
party.