Transcripts For CSPAN2 Tonight From Washington 20130301

[inaudible conversations] president Abraham Lincoln once said, the best way to predict your future is to create it. In 2009 we didnt like the future we saw for the Healthcare System based on a feeforservice payment model. Doctors and hospitals being paid nor amount of care delivered instead of how well they delivered care to patients. So in the Affordable Care act we created new and better ways to deliver health care. Save taxpayer dollars and improve patient care, medicare and medicaid in partnership with the private sector, are now working to create the road map for future Healthcare Delivery and were here today to make sure theyre on the right track. Theres a clear slowdown in healthcare spending. But we need to do more and do it faster to change the way medicare and medicaid pay for healthcare. How to boost the countrys economy, we learned from economists the number one way to reduce healthcare spending is to end feeforservice. Everyone agree that feeforservice drives volumes, excesses, and waste. We know this encourages the wrong things. Thats why healthcare reform changed incentives to providers. And medicare and medicaid are testing different programs to determine which work best. In october, medicare rolled out a program with a simple yet revolutionary premise. Medicare is going to pay hospitals to get the job done right the first time. The hospitals are penalized if patients are readmitted too soon after being discharged. Communities from montana to maryland are rising to the challenge. In miss sue los angeles montana, the local earth is partnering with medicare on care transitions. Under the program, patients at reaction of readmission will get extra help making the transmission from the hospital back to the community. Today well hear about data showing significant first step in bending the curve o. Medicare Hospital Readmissions. The raise for medicare babies return though hospital for fremont has fallen by more than a full percent over the past several months, after being firmly stuck for years and decree okayed. Medicare and medicaid implemented a new program in october that pays hospitals more for delivering better care, and penalized them financially for poor outcomes. For those outside of health care, this idea will not sound revolutionary. It makes sense. When you take your car to the repair shop to get the brakes fixed and they brake the were, you shouldnt have to pay for the prone windshield. Starting in october hospitals can be penalize evidence you go in for a heart attack and the hospital gives you a surgical infection, and hospitals can be rewarded for Good Customer Service and patient care. That means fors and nurses share information and tests, explain medications, and develop plan of coordinated care for a patient leaving the hospital. Need to get more value out of each taxpayer dollar spent and help providers coordinate care. Medicare and medicaid need to reimburse hospitals, doctors, and nursing homes, to keep patients healthy. The Accountable Care organizations are starting to make this happen. Medicare almost 300 Accountable Care organizations, including in billings, montana, have teamed up to serve more than four million beneficiaries. In these organizations, doctors, hospitals, and other providers, Work Together to give patients coordinated care. The providers are make talking to each other a priority. And give patients the right care at the right time. Medicaid is also come to the table to provide solutions to the cost challenges facing states. Medicaid byfrizz minnesota bill among the first to be in a program new program. My state of montana started a program to lower diabetes and cardiovascular disease in its medicaid population. The goal is to help participants lose weight and keep it off, which makes. The healthier reduces costs in the Medicaid Program. We need medicare and medicaid to support these state efforts and offer flexibility to test innovative ideas, find out what we can do more. So, listen to president lincoln, and realize we are in charge of creating our future. Let us do more to lower cost and defend medicare and medicaid and create the future of Healthcare Delivery. Thank you, mr. Chairman. Thank you for convening this timely and muchneeded hearing this morning. Now, last week, Time Magazine had an article, in the longest article in the publications history. An exploration of the high cost of medical care in this country and what the costs mean for pensions. There was a fascinating article and got me thinking. Over the last five years we have spent a lot of time here in Congress Talking about health care. And while the affordable carry was signed into law nearly three years ago and was supposed to make healthcare more affordable for patients and consumers. Now, the socalled affordable kerr act did a lot of things but it has done very little to address the Biggest Health concern people have, the actual cost of care. I hope that at some point we can take a serious look at the drivers of healthcare costs in the u. S. I think it would be well work the committees time to do so. Today, however, were here for a different reason. The finance Committee Held a hearing where we heard from provider ands thirdparty payers in the private sector who have come together to do some interesting things. To try to improve care while reducing costs. I believe the private sector can and will make Great Strides in this area, we cannot forget that medicare is the nations largest healthcare payer. That being the case, if were serious about reducing costs, our efforts to encourage innovation must include medicare. Ive been very clear about my opposition to obamacare. My concerns about the adverse impact of this law on family premiums and National Health spending continue to grow with every passing day. However the chairman and i agree that Healthcare Providers and payers of all shapes and sizes need to Work Together to provide patients with highquality, better coordinated care. According to the medicare payment advise commissions most recent report in 2010. Individuals, government, and businesses, spent a total of 2. 6 trillion on health care. Today about 45 of all healthcare spending comes from government. And in 2014, when the medication expansions begin, that share will rise to 50 . The Congressional Budget Office projected by 2021, just eight years from now, spending on medicare and medicaid will grow to 1. 6 trillion. By virtue of the sheer size, medicare has an important influence on the Overall Health care delivery our country, and with the right policies in place, medicare can be a driver of change. Now, that being said, also hope the program can be as nimble for the private sector in making imapproachs. Mr. Blum, i hope you can reassure us that can be, and in addition the rapid edge can of our population, we have to contend with an increasing number of patients with chronic diseases, such as diabetes and Heart Disease. These patients are sicker and more expensive to treat, and while provider ares are doing their best to manage these patients, often times our Healthcare System is not structured for our care to be easily coordinated. Currently we have a system of isolated silos. Patients rev care in a variety of settings, doctors offices, hospitals, nursing homes, et cetera and its not uncommon for a Healthcare Provider to have an incomplete picture of a patients overall care in addition, provider incentives created by potential malpractice liability and patient incentives, created by insurance choice, are not wellaligned to put the proper focus on better results and lower costs. We can certainly continue to think around the edges of delivering care in new ways but providers continue to tell me that fear of lawsuits drives the volume of service, and our feeforservice system former medical defense lawyer might have to say, it was bad back then. 37 more than 37 years ago. Its even worse today. When talking about Delivery System reform, our goal should be to ensure that patients receive the right care in the right place at the right time. Theres an appropriate rule for both the private pairs and the federal government to put pressure on providers to provide better care and Better Health outcomes. I know rome wasnt built in a day but i think we have to move beyond simply reporting what providers are doing, holding them more accountable for healthcare outcomes. In my own home state of utah we are privileged to have some of the best, important efitchet Healthcare Providers in the country, not all providers are created equal. Often the right hand doesnt know what the left hand is doing. Unfortunately the patient is caught in the middle trying to coordinate care. Im anxious to hear from you, mr. Blum, about any progress made towards greater care coordination. We know errors can be avoided when providers focus on plans. Theres been a lot of attention paid the attention from the center for met care and medicaid innovation, also nope as cmmi. Like many of my colleagues i remain concerned that cmmi has an enormous budget and very little accountability. Im hopeful well hold another hearing this spring that focuses on ccmmi and the result of the 7 billion0s taxpayer money given to them to advance cause of Higher Quality and lower cost. Thank you for convening this hearing today. I look forward to hearing from mr. Blum and hopefully he has some good news on bringing down the cost of health care. Thank you, senator. My colleague and friends here, mr. Blum is no stranger to the finances committee. He was on my staff and also the principle advisory for this table on mma not too long ago. Its hard to resist mr. I dont think ive met anybody smarter, certainly glad youre here. As an introduction, Jonathan Blum is acting Principal Deputy administrator and director, center of medicare, centers for medicare and medicaid services. Good to see you. You know the rules here. Your statement will be in the record. Chairman bachus, thank you member hatch, committee members. Thank you for the opportunity to discuss our progress in the Medicare Program and transform the if therey of care in the three years since passage of the Affordable Care act im pleased to report on our progress. We have put in place many new programs and policies following the goals of the Health Reform legislation. For the first time we can say were paying for value, not simply the volume of care. Quality is improving and costs are growing more slowly. Simply put, medicares cost curve has been bent downward. Over the last here to years cms has put in place payment mechanisms to reward hospitals for the overall quality of care. Cms has finalized regulations to define what it means to provide Accountable Care. The socalled acl regulations. We have transformed our physician Payment System to shift its emphasis towards primary Care Services and care coordination. We have established a new center for innovation, which is currently testing more than 35 new programs and is working with over 50,000 Healthcare Providers and over 3700 hospitals. We have shiftedded the Business Model for private plans competing in medicare. Before the Affordable Care acten, plans competed on low premiums and extra benefits. Today they compete on low premiums, extra benefits, and the quality of care they provide their members. Cms has transferred transform our framework to respond to fraud and abuse, to stop fraud before it happens, rather than chasing down providers for payments after they occur. Cms has overhauled the payment model for durable medical supplies and home health care, dramatically lowering spending without compromising quality of care. Over the next self mop months cms will focus on new areas. Were work with hundreds of hospitals and Healthcare Providers to test how to bundle fee force Service Payments together in new ways to figure out the best way to pay for a total episode of care. Well continue to work to implement the value modifier policy to continue to share our physician Payment System, to reward Top Performing physicians and providers. Well continue to partner with states to test ways to best provide and coordinate care, including to vulnerable populations such as the dual eligibles. Given our worked to, we we can now provide this Committee Data that the strategies are working. There are four data points i believe that should give us great optimism. As senator backus said we have more than 250acls operating in the tradition feeforservice program. This tells us that providers, physicians are stepping forward to participate in new payment and delivery models. Data point number two. After more than five years of holding steady, the rates for all cause Hospital Readmissions is starting to trend downward. Point three. 37 of Medicare Beneficiaries who have chosen a private medicare plan are in a forced r5 star plan, 5 star being the highest quality. Up 16 from four years ago. Quality of care is improving. Data point number 5 and most exciting. The rate of growth and per capita medicare spending has been at historic low rates for a three years in a row. This is tremendously exciting to be sure we have more, who to do, it in work to date and the data were seeing should give us great hope we can bring medicare to nonnable financial footing and improve the quality of care. Ill be happy to answer your questions. Thank you, mr. Blum. First, my first question is, youre coordinating with the private sector. Its one thing for medicare and tim has to put together organizations to set up but clearly if this is going to work, been talking with, working with, coordinating with the private sector to get some of the same agreedupon incentives for results. If you could just describe all how successful that has been, and the degree to which youre working with Insurance Companies and providers, et cetera. Theres a couple ways to answer your question, senator. The first is we study very carefully best practices and talk to private payer, state Medicaid Programs so we can repeat or build off of best practices. There are some very exciting programs within private payers to foster medical homes, for example. So we try very hard to understand how the private sector is creating new financial incentives. We also tried to craft our regulations in a way that is open, transparent, to private payers can copy not copy but try to build often the cms medicare experience. For example, we hear from large private health plans theyre working to establish acos for their contracted physicians, built off the regulations cms has finalized. Finally, self of our new innovation models have a allpayer component to it. The pioneer model, for example, in order to get the pioneer contract for the acl pilot, the pioneers had to demonstrate they also had riskbased contracts with private payers to demonstrate theyre not just wok can with the Medicare Program but working in the entire Healthcare System. We have another pilot at the Innovation Center to test how to build primary care medical homes that do have an allpayer concept where the providers who get the contracts from cms have to demonstrate theyre also working with private payers to make sure were all pointing in the same direction. We hear from others theyre building off the valuebased purchasing strategies, so were always trying to learn from betts practices, try to innocent all players to point in the same direction and craft our regulations to serve as models for private payers. A lot of demonstrations going. When am i going to see results . You have demonstrations, i think, aligned with cmmi. Senator hatch referred to it. You mentioned that 250acos. A lot of other demonstrations going on. When are we going to see some results . I think one result were seeing, i believe, is due to a combination of different factors, is the reduction in all cost Hospital Readmissions. When you think about one percentage point being lower than the previous five years, that translates roughly to 20,000 fewer readmissions per month, and i believe that its due to the payment policies, the new innovation model being create. So there is some result elf challenge is how to assign cause and effect. Many of these models were started in the last one or two years. We expect that to fully see results it will take two or three years. Theres upfront costs to providers to Building Models to create the data systems so we need to be cautious looking at firstyear results. Were very much committed to sharing the data we see. My boss, secretary sebelius, is very anxious to see results as well. Any model that is scalable, that can be scaledhas to go through rigorous review of the chief actuary so we will share our learning. And one positive learning is providers are very eager to step up. Were overwhelmed by interest. Theres some due you have a system of interim results . We build every model with the assumption that it can be scaled, and the law requires any model for the Innovation Center in order to be scaled, it has to pass that rigorous review by the chief actuary. So our team developed the data okayabilities and monitoring systems, really with the end point hopefully will be that these models can be brought to scale but they have to first pass the rigorous review. But does it make sense for you to share with us at the appropriate time the interim . We want to keep informed and frankly just keep your feet the fire. Absolutely. Were happy to work with you and your staff to energy out how to best share results and data. And that our commitment to this committee. Case, id like to work out some system where that happens. Absolutely. The results and the data shared. Thank you, senator hatch. Thank you, mr. Chairman. Were grateful for the work you do, mr. Blum. As described in your testimony, each payment Reform Initiative has different incentives or penalties attached to them. Are those proven to be Strong Enough to actually change provider behavior . I think so. Clearly we have to continue to study the trends were seeing, but the trends were seeing are moving in the right direction, and i think one of the exciting trends were seeing is hospitals that traditionally operated within silos are now establishing ties to the community, to post providers, physician networks, and one of the most exciting transformations is what you described, the goal to better integrity the silos of care we have in the traditional feeforservice program. So we need to continue to evaluate whether or not we have as strong incentives but i believe the trends were seeing are due to a combination of payment policies and also the continuous push by the congress and by cms to better integrate care. Delivery system Reform Initiatives underway in which cms has not waved stark or antikickback rules, and if so, what are those initiatives and why are the rules not waived . I have to doublecheck for you, senator. Which demonstrations have waived stark and which have not. The aco program, we worked hard with the oversight agency, the federal trade commission, department of justice to review ways to relax those requirements for the same time, still uphold the oversight principle we haveful we have come into the framework temporarily that will continue to go through review that if we can if providers can demonstrate christian innovation, and working together improves the clinical model, were comfortable in relax some of the requirements. We have the aco regulations, a timelimited period that will continue to monitor whether were seeing any behaviors that are troubling. I think the goal really is not just to look at the payment but the entire Oversight Framework to ensure we can best integrate care for true clinical improvement. I have to get back to you. Wed appreciate if you would. The Patient Protection and Affordable Care act cut 306 billion out of the Medicare Advantage program to create a new entitlement. This is especially concerning since currently more than one in four seniors, including a significant number of lowincome and minority bybeneficiaries, have come to rely on the better benefits, enhanced care coordination and Higher Quality coverage through the Medicare Advantage plan. The combined effect of the sequester ppaca cuts and higher taxes and other harmful new policies will result in at least an 8 cut the Medicare Advantage program for calendar year 2014. I understand that some of the rights and policies announced on february 15th, in advance in the advance notice, are governed by the statute. The cms does have considerable discretion over many of the policies that have been announced. Towards that end i want to clarify what you have Discretionary Authority regarding the rate notice. As we both know cms has History History cloy chosen to base rates on the assumption congress will not patch the scheduled physician payment cuts and therefore payment rates to plans are artificially low. Do you believe that the statute prevents cms from assuming more realistic payment rates, especially given the fact that congress has fixed the scr for the last 11 years . If you can answer that yes or no a simple yes 0 no, id appreciate it. Theres many elements to your question so ill try my best to answer all elements to your question. We have been tremendously pleased to see the dramatic growth in Medicare Beneficiary choosing private plans since passage of the Affordable Care actment beneficiaries in private plans are at an alltime high. A third. At the same time premiums have come down dramatically, 10 , in 2012. Our goal is to do two things at the same time. To ensure beneficiaries have strong choices for plans and at the same time make sure our payments are accurate. Our rate notice that is proposed has proposed some changes to our payment methodol. One of the reasons why the rates are proposed to be lower is the fact that overall medicare spending is lower. So very good news story for the overall Medicare Program. We have also taken out discretion to propose changes to the risk adjustment models we use for plans, and thats an area where cms does have discretion. It is cmss longterm practice not to assume the costs for the sgr fix that always happens after the rates are finalized, to our rate notice. We have received comments for us to take a second look. But i think the best way for us to stabilize the ma program is for a longterm fix to the sgr. My time is up but i have another question on the arbitrary price controls, known as total beneficiary cost thresholds, andry submit that in writing. I hope youll answer that as well. Of course. Thank you. Mr. Blum, one last question and then well have to find a solution here. I understand. Senator. Thank you, chairman, and welcome, mr. Blum. Ive long known of your good work. Let me ask you about your response to the fact that medicare reimbursement varies dramatically across the country, and a number of us i see my colleague, snort cantwell, senator cantwell, focused on the fact our states get clock erred by the federal government for doing a good job. We get penalized for giving good quality and holding costs down, and now were starting a very good model, one we like, the question of a shared savings approach to encentavos incentivize quality, and our concern is what are you going to do to address the fact that lowcost states like ours will be disadvantaged because we start off with the lower reimbursement rate. I agree with you, senator, that feeforService Payments and quality varies dramatically across the country. Some parts of the country operate at very high quality levels at low cost, and i think our overall goal is the goal of the Affordable Care act, is to develop policies that promote more parted of the country, hopefully all parts to operate at the highest quality level at the lowest cost. Total cost of care. But you also see tremendous variation, not just between regions of the country but within regions. You can have the lowest cost part of the country and have dramatically your approach to make sure we dont get penalized is to say that somehow well just use our region as a measuring rod . Because no. Go ahead. Im sorry to cut you off. We just want to know how were nod disadvantaged at the outset. I believe the best payment strategy for the feeforservice program, traditionol feeforservice program is for us to create incentives at the hospital level, the physician practice level to reward highquality care and lowest cost care. Thats why i believe our valuebased purchasing program for hospitals is so important because over time it will reward hospitals not just for better quality of care but lower total costs of care. The value modifier physician propose sal we are working to implement is important to the strategy but the overall goal should be to create the incentive structure not at the regional level but at the provider level, the physician practice level, because even in lowcost regions theres still tremendous variation within that region. I certainly support the goal and where youre trying to go im just not sure were going to get there very fast unless we root out a bakedin discrimination against a lot of parts of the country who are giving good quality and will be panellized. I want to ask you one other question about chronic care, which as you know, is where most of the medicare dollar go, heart, stroke, cancer, diabetes, and it just continues to escalate if you look where medicare was in 1965 when it began, and today. And senator hatch noted it in terms of the article in Time Magazine. Thats where the medicare dollar goes. So i looked at the two models with respect to medicare and medicaid with respect to chronic care, and it looks like yall are working on a very effective model with respect to medicare and the role of the state. The health homes targets coordinated care for those who have these chronic conditions. It doesnt seem to me that medicare is doing that. In fact, medicare has a different name, as you know, but it looks mostly about, like, realigning payments for doctors on primary care. It doesnt put the same focus, and particularly given the growth of medicare as relates to chronic care. I want to shore that up. What else can be done in your view, consistent with the statute or other ideas, to give us a chance to target in on where most of the medicare money goes . We deal with that 70 , and youre a long way to dealing with the demographic tsunami and our big challenges. Thats a great question, senator. The first wave to the Innovation Center was around building the Accountable Care model and strong primary care medical homes within medicare. That was phase one to work with the center for innovation. But were hearing from physician specialty societies, on on comingists that wouldnt to be same is true for cardiology, so i believe that phase two work in the Innovation Center will be to really build upon the shared savings models we have its on in the aco contacts and then to start to channel the energy were hearing from physician specialty societies, private physicians, cardiology, oncology issues and thats the problem for the next wave. My time is up. Senator grassley. You know, mr. Bulge its always blum, its good to see a former finances staffer triumphantly come to the chair youre in. Easier to sit hind than in sit behind than in front of you. Like a lot of my colleagues i have grown to have serious concerns about medicares feeforservice Payment System. Referring to your testimony you outline all the ways medicare is trying to improve care coordination. I appreciate the steps youre making, and those and youre going to continue forward on that. I want to focus on a system that youre stepping away from. So, is there any defense with emphasis upon any any defense for medicare or feeforservice where a provider is paid based on the quantity of Service Provided without any regard for the outcome or quality of care provided or any responsibility to coordinate care with other providers . I believe that we should work and the congress has given us the charge to in the feeforservice system payment should be tied to quality of care outcomes and the total cost of care. Were further long within the hospital Payment System and that Payment System is increasingly tied to the outcomes and the total cost of care, not just the care that is provided within those four walls to the hospital. Over time, cms is authorized and charged to transform all these fee Payment Systems to achieve the same goals. We have to make sure we have the right measures. We have to make sure we dont create. Incentives about disincentives and i agree we need to Work Together, and cms is committed to make sure all our Payment Systems begin to adopt the same principles that congress has authorized for the hospital Payment System. So there isnt any defense of medicare feeforservices anymore. Were working away from it, so theres no defense for it. Thank you very much. Reference to the chart here, since you mentioned coordination between medicare and medicaid, id like to bring up something with you that i discussed with Melanie Bella when she came to testify recently. The chart shows the most expensive Medicare Beneficiariesthepeople with multiple chronic conditions and functional impediments. 57 are eligible for medicare only, 43 are duly eligible. The current duals appear to be giving greater control over acute care for these most expensive beneficiaries. Some rhetorical questions im going to ask you for your comment. Why are we splitting up these two groups . Theyre two groups of similarly situated individuals. All have need for coordinated it care, have multiple conditioned that are expensive. Why do you tell people you have income so you get medicare you dont have enough income so you get solely medicaid. Why is it a good idea to give states control over lowincome beneficiaries . Whoa should lowincome beneficiaries get one of any 50 different models to coordinated nate care their and peel with income get medicare. Id like to know what you think because im very concerned about splitting these individuals the splitting of these individuals makes no sense. Well, as the person who oversees the Medicare Program within cms, i believe that the models were testing to better integrate dual eligibles do not take away any rights or benefits that dueeligible beneficiaries are entitled to in the Medicare Program and the models Melanie Bella is moving to set will strength care, have more oversight and more control. And most dualeligible byriz are in the feeforservice Medicare Program that you described. The care is uncoordinated. The care beneficiarys balanced between different care settings and we want to make sure were using the best of the Medicare Program, the best of the Medicaid Program so, in my view i do not believe the dualeligible dem mop straights are ceding that control to state but is develop allege powerful federal state partnership to take the best programs, better benefits, more coordinated care for these beneficiaries. I think really the goal should be to macsure that the beneficiaries have better care, more coordinated care, and to reduce the duplication that you described during your first question. Thank you, mr. Blum, and thank you, mr. Chairman. Thank you. Senator stabenow. Thank you very much, and welcome, mr. Blum. Its good to have you before the committee. I want toment say what i think is important news, we all know we have many challenges around healthcare costs. Thats been our focus as we look out how we put in place healthcare reform that works for people and also brings down cost and how we actually reduce cost and not just shift it around, which is what the Healthcare System has done. When somebody cant see a doctor, they go to the emergency room, costs more money. How do we make sure were actually not just shifting costs around. But if i understood you right youre saying right now we have 250. Accountable Care Organizations so far. The rate of hospital admission readmissions is going down, quality is going up. Growth per capita costs going down, and the Medicare Advantage program is seeing a 10 premium reduction as well as, ive seen a 28 increase in enrollment. Something like that. So, we know that part of that is bringing down the overpayments in Medicare Advantage, which was significant savings under medicare. I wonder if you cue speak a little bit more to Accountable Care organizations. We have a number of things happening in michigan that have actually very exciting in terms of the possibilities. Detroit Medical Center hat been working with a group called athome support to help the sickest patients get advance support at home and prevent Hospital Readmissions so that if you have example, 87yearold patient with stage four Heart Disease who wakes up in the middle of the night and would normally, if they have concerns go the hospital, emergency room, be in the hospital, come out go to Skilled Nursing facility and so on, all of which cost tens of thousands of dollars and certainly is not the way they would like to spend their time. Under this model the same woman would get at home usss, be able to call the nurse in at the middle of the night, get help and possibly be able to allow that patient to stay home rather than go through everything at the hospital. Could you talk a little bit more about the acos and how you see that expanding and the importance of really making sure those kinds of things are successful . Sure. We have been very surprised and pleased with the response that cms received to the aco program. The program has 250acos and we expect that number to continue to golf program was authorized by congress to have an annual process to allow more organizations. What is really exciting about the aco program theyre being started i by Physician Practices in large part. So its not necessarily just hospitals that are developing acos but physicians, to step forward. We created different tracks. The pioneer model for a the most advanced organization, to show its possible to build more advanced Accountable Care models, and also to teach others coming into the firearm the same time. But to your point, senator, the aco model about making sure care is paid for in knopp facetoface setting, physicians can coordinate care, manage care, build the infrastructure of nurse practitioner, nurse and other Healthcare Professionals to watch patients navigate through the Healthcare System. I think the aco model is one of the most promising models to transform feeforservice to give the incentives for the care coordination and reward providers for the knopp facetoface time with patients that happens. We have nor do but at it certainly an optimistic right now also we get started. I wonder if you might also speak to another type of demonstration project, the strong start initiative, focused on preterm births, basically premature births, that put both moms and babies at risk, and this is included in the Maternity Care home demonstrations and a number of us are working on legislation where we are introducing today called the quality care for moms and babies act to increase quality standards as well. We have three of those projects in michigan. One is run by Meridian Health plan and regence hospital and is focused on being able to reduce premature births, which is costing the country 26 billion a year, not to mention what is happening for the children, and i wonder if you might talk a little bit more about the progress in those kinds of areas and what were learning from preliminary results there. Sure. I think, senator, the goals of the projector reduce the number of preterm births. Thats potentially harmful both for mothers and children. We have just begun this demonstration. Theyre watching the results very carefully. Well be sure to bring information. But really the premise behind the demonstration is to take evidencebased protocols to disseminate those to care providers to create the messages that preterm is potentially harmful in many cases. It will pledge to share results as soon as we receive them, but were very excited about this project. Thank you. I have one question quickly, has to do with delivery of healthcare in rural areas and has to do with the 2009cms ruling or policy, i should say, regarding direct physician supervision of outpatient therapeutic services. Hospitals and rural healthCare Organizations recognize the change as a burdensome and unnecessary policy change but cms characterized the change as a, quote, restatement and clarifies, unquote, of existing policy in place since 2001. And its attempt at enter operation cms determined the policy required a physician privileged by the hospital provide supervision and be physically present in the same job patient departments at all times when historically that has not been the practice. Im concerned that cmss, quote, clarification is instead a significant change in medicare policy that would place considerable burden on hospitals, especially facilities in rural areas, and im also concerned the panel to convene to advise on the issue is not considering input from real critical access hospitals mitchell question is will you agree to return the pre2009 interpretation of this policy . In 2009 youre correct the cms made what we call policy clarifications but the critical access Hospital Community interpreted as fundamental changes. We heard a lot of concerns, a lot of complaints. In 2010, i traveled through north dakota, not south dakota but north dakota to meet first hand with critical access providers, and we heard tremendous concern regarding the challenges that our clarification would provide critical access hospitals. We decided to back down, slow down, create this physician, hospital, Provider Review Panel to determine which diseases do not require supervacation. My understanding its working better from the critical hospitals perspective. Id love to hear your views how to improve that but i believe were address the concerns we heard in 2009 and seeing the hospital care first hand was very helpful to understand how to Work Together with the Hospital Community to solve this issue. Im glad you went out and got some perspective and wed be happy to provide feedback we get from providers in our part of the country. Its a really important issue. Your testimony outlines a lop list of initiatives cms is implementing with the goal of improving Health Outcomes and lower costs. The is if these proposals are going to sufficiently lower healthcare costs for taxpayers and patients, why is the independent payment Advisory Board necessary . Well, the independent board is outside of cms, its my understanding so i cant speak to it directly. What i can say is, from the person operating the Medicare Program, it is tremendously help toll have pressure from congress, from outside boards, to keep spending low, and we work in cms to ensure were building policies to keep spending low, to ensure quality is improving, and having the system of checks is tremendously helpful to ensure that were pushing all of our Payment System in a way to maximize quality and reduce cost of care. Doesnt sound like its all that necessary to accomplish the initiative. Those things that cms is doing on its own. What i would say, senator, is this focus needs to continue. The pressure needs to stay on, and theres multiple ways to receive the pressure, but having the pressure is the best way in my judgment, to continue the focus thats been there the past several years. Last question has to do with Electronic Health records, and the rate at which cms is implementing the stage one in the last six months stage one has implemented. Published a final rule for stage two and already seeking feedback on stage three. There are still a lot of reports out there that question the effectiveness of the vhr adoption, and my question is, do you believe that cms is conducting appropriate data review before accelerating into stage two and stage three to ensure that the program is on the appropriate path towards operatability between unaffiliated Health Systems and providers. A couple ways to answer your question, senator. We are pleased with the rates of adoption of hospitals and Physician Practices, to respond to the new incentives. One of the things we hear from entities participating in our new delivery models, like ac os the model wouldnt be possible but for a strong medical record. So i believe we have to evaluate the impact the ehr program north just the program itself but the total changes were anything the Healthcare Delivery system. So Hospital Readmissions coming downing are thats a sign to me that Healthcare Systems, healthcare silos are now talking to each other better to reduce the lack of care coordination. We are committed to oversee the program. Were happy workive you and your staff to best understand he we can best oversee. Were also concerned about some of the reports that ehrs may lead to inappropriate spending or services. We take that concern very seriously. But we are committed to ensure this Program Continues to expand while plea preserving the entity of the program. Senator cantwell. Thank you for having this hearing and many of the hearings you are having on the subject of the implementation of the Affordable Care act. Think its of the jut moats important given the size and scale and impact to our economy, that the agency is held accountable during the process and i appreciate the reminder mblum used to be a member of the staff here. So maybe he could become an extraordinary emissary to the agency as it relates to communications, because i think there are many things that many members here have shown a level of frustration about on the implement indication of the Affordable Care act. I wanted to follow with my colleagues, senator wyden and grassley about the value index for physician payment. You talked about hospitals, and the physician payment i think mr. Elmendorf said is one of the most costsaving provisions of the bill, and i wanted to get an update on the progress. I actually have three questions. The progress of the value index relate to go physicians and why we dont put out a global rate and if you fall below that, youre rewarded. I if you fall above that your penalized. That might be s some progress on the rebalancing from nursing home care to communitybased care do youve see that as a big cost save center if you could start with those two. Thank you for the questions. I believe the value Motor Vehicler physician payment change authorized in the Affordable Care act has the potential to be one of the most significant changes to the feeforservice Medicare Program. Its also one of the hardest, the hardest policy were working to implement from a couple different perspectives. The challenge is, Medicare Beneficiaries who have many chronic conditions, see many physicians. They can see 12, 15 different decisions in the course of a year. How you can assign the accountability for the patients total care is very challenging when theyre seeing multiple primary care physicians, multiple specialist. So we have chezzing to fan in the value Motor Vehicler by first starting with large physician groups who are over 100 professionals because we have the greatest confidence we can assign value and quality to that large practice. We are very much committed to the policy, committed to the schedule outlined by the congress but this this hardest policy were going to need all the advice from this community, the physician community. But we have started the process that will take effect 2015 but youll see more rulemaking this year to continue that phase. I think it starts in 2013 and not fully implemented until 2017 or something of that nature so. I think we have lots of time. I wanted to did you about the basic health plan. One of the issues here on saving dollars within the medicare budget is because medicare is going to take everything we have just because of the aging population and living longer. So we want photo it we want to get it right in the Affordable Care able of act, we have two provisions. The basic health plans which is annual costs and premiums a lot lower than what they would face on the exchange, and then the population have to see that chart for a second this particular population is a very narrow population on the exchange, but somehow the agency seems to be very anxious, instead of implementing the law in 2014 as called by in the Affordable Care act, seems to be anxious that somehow giving this population just above the medicaid rate a more affordable bin benefit plan as outlined in the first chart as against the interests of the act. A couple of ways to respond, senator. I havent personally worked on this issue so i cant sneak decisionmaking behind it. I do under that has promised to provide you a schedule how we plan to implement this provision but were happy to work with you and to help answer those questions. Well, definitely will not have my support, and im not interested in how she is going to implement the act. Im interested in the commitment to the administration to live up to the way the Affordable Care act says the provisions say it should be implemented, and right now i cant get anybody at cms to own up to the fact that states under the law could receive 95 of the tax credits to provide cheaper care as the first chart showed, to the beneficiaries, instead of making them out of pocket expenses. So, im not interested in having the schedule of what date its going to be implemented. Im interested in the agency making sure it doesnt thwart a more Cost Effective solution to somehow save the exchange when thats really a false issue other any viewpoint. So thank you so much. I understand. Thank you, senator. Thank you, mr. Chairman. Mr. Blum, thank you for being here and thank you for what you do. At it ill presssive you have a threeyear record on the per capita costs of bringing that down. Delivery system reform is clearly the best hope we have of continuing that trend. So, this hearing is particularly important. I want to talk about a recent decision that was made in regard to pediatric dental benefit which is has me concerned. Were at the six year afghanistan of the death of demonte driver, 12yearold who died in my state in regards to dental care that was not available. We have made a lot of progress in the last six years and i really applaud the efforts that have been made. Its my understanding that you are now allowing for a separate deductible on standalone dental plans, and i am concerned that it is similar to policies made decades ago on Mental Health services, which tend to say this is secondclass health care rather than part of the central benefit package, which was our intent in the Affordable Care act. Can you just share with me what leadership will be done at cms to make sure that fact does not take place, that there are reasonable coordination of benefits so that our intent of providing pediatric dental will in fact be a reality . Particularly where the federal government is in the lead on establishing exchanges. I think one of the lessons we learned in the Medicare Program is that when care is siloed or benefits arent fully integrated that can often lead to worse total healthcare consequences. I can pledge to get back to you with direct answers to your questions by i agree with your general principle that when benefit design is broken up and care is not coordinate ited can often lead to bad quality of care. Sory bell happy to provide direct answers to you. I appreciate that. The federal government will be playing a key role in many states in regard to seth up alliance is. We dont have out fliers settlements that would undermine the confidence in the system or the process as a whole so there is a role to play that are settled i think we could do a lot to expedite the process so that we have the uncertainty and the happy to continue but i agree with your statement for the resources being diverted to these efforts and the progress that is being made we would very much appreciate the offices and many of the different healthrelated organizations we are trying to coordinate the efforts being made so if youd keep us informed i would deeply appreciate that. One last question, we all hope that we would have some permanent fix we wouldnt have to deal with it every year and we can get a permanent policy on the cap. In the wisdom of congress, we imposed a new requirement of the much to do it but im concerned what are not we are not setting up another bureaucratic problem for those that rely upon some predictable policy can you share with us how you plan to implement that in a way that might lead to additional problems for the industry providing services. I think whenever we have policies that suspend months and have to be reoffered highest it creates challenges for the providers and for the beneficiaries and the principle should be the beneficiary should know what the benefit levels and the provider should see a predictable payment. I think one of the ways to address the cap long term is to ensure that we pay appropriately for the therapy services. This is an area we see abuse in certain parts of the country we have tried to improve the payment policy to paying for Services Provider of the same time targeting the bad actors certainly dont provide but i think a combination of better payment policy, disappoint approaches and relax the need for congress to continue to have to reauthorize this policy. Thank you. Senator casey. We are grateful for your testimony and presence and Public Service and the ways our office has engaged in that. This is very difficult to tackle these issues that relate to delivering better care at a lower cost. But it seems like you are beginning to unlock that door so to speak. I want to ask you about based on what you know already and i know in some stage as it is still early that you have seen some good results. Is their anything that you have learned or at least began to ascertain about the Delivery System results in medicare that you may be able to apply to medicaid . I think that one of the lessons i have taken is that when providers see complete data to the beneficiaries, it opens up many new opportunity for the better care coordination. And one of the i think the major benefit that the participants have now is the ability not just to see their own claims information but part eight and the Prescription Drug information and that can yield to the clues of the lack of care coordination and beneficiaries falling through the cracks. So i think having that information and having a provider create a Management Structure to see data and understand it and respond to the data is tremendously powerful for the providers that are to persecute theyre telling us that they had no idea that their patients were going to ten different nursing facilities in certain Skilled Nursing facilities have a higher than other readmission rates seeing that data is one of the most powerful changes that is occurring. Your testimony has a lot of analysis and a summary of the way youre doing this. We learn more about it but i was looking in particular on the two pages of your testimony today on page four and page eight the two things that struck me about the whole challenge of reducing the Hospital Readmissions that they have a readmissions by definition they are in some kind of jeopardy. But it also is a huge cost implication. But on page four the Hospital Readmission Program and later in the to save 60,000 lives that just leaps off the page i think for anyone and you do that by millions of presentable hospitals conditions i want to get your sense of how thats going and how successful you are at reducing the Hospital Readmissions because it is self evident that it is both a Better Health outcome for the patient and the family as well as a huge cost saver and. One of the things we have said as one of our primary measures for assessing how successful the payment reform strategy is if. The readmissions and in the last 12 months or so we have started to see a consistent downward trend in that number. And i think that there are many policies that are being deployed, penalties, Technical Assistance in the partnership for patient is, but i think one of the most powerful statements that happened is that the congress acted and said the qualityofcare is not being assessed in the readmission rates which has transformed the Business Model for the Health Care Delivery systems there were too Many Community factors that failed to do this but now i hear that it is possible seeing results in the data we still see tremendous variations across the country and hospital readmission rates there are some parts of the country at a much lower than 17. 8 so i know its possible to drive this effort to draw further the most fundamental change that happened is that congress acted. Thanks very much. Appreciate at thanks for coming to delaware and the time that you spent. I think it was senator hatch that raised the issue of sgr and chongging to fix the problem and i just want you to share with us we hear so much the Health Care Providers without a permanent solution for sgr but the doctors and hospitals were not going to be able to hold the participating healthier system. We have the responsibility to figure this out. What kind of payment policies do you think might be good candidates before replacing the existing Payment System . I believe the annual crisis that is created when we face the physician payment cuts faces tremendous havoc for the physician community, beneficiaries, health plan Payment Systems that are tied to the physician Payment System and it is a tremendous challenge to manage the programs for this continuous cut. I think there are two ways to break down the sgr issue. There is the first issue that we have an artificial baseline in the current lull that continuously assumes a 25 or 28 cut. So, to my analysis, there is no way around the baseline direction that needs to be made to the total Medicare Program that only congress can authorize. At the same time the second issue is not to figure out continuous ways to pay for the physician payment to incentive for the nation to incentive chronic diseases, management to pay for the services that happened outside of the facetoface interaction. We are testing a variety of models and we will continue to expand the focus to figure out how to in sent this care model that i believe we all want to see that substitute for the baseline issue that congress has to authorize. Thank you. As we know, health care in this country half of the cost is obesity. And another one is improving medication adherence. We hear very large numbers on those. How can we help you do a better job and also any comments you care to make in improving the medication adherence and how we can help you do a better job. One of the Things Congress did in the Affordable Care at is many new Preventative Service benefits to the traditional feeforservice program. The annual wellness visit i think is one of the greatest opportunities we have to continue to tie beneficiaries more to the primary source for primary care. There is the program that is the same notion. So i think a continued emphasis on primary care, wellness i think is our best strategy to address of the city. And we are also seeing very promising results in the part deprogram as we create voluntary incentives to better manage polypharmacy management but we are starting to see some signs that better management to Prescription Drugs the overall cost of possible spending and other traditional medical expenditures to better manage and coordinate a Prescription Drug. Delaware is one of the states that has the 10 medicare population has participated in Medicare Advantage to have any good choices i think most people would say and that is true in other states as well how can we expend that in a costefficient way for seniors and all 50 states have meaningful choice between highquality Medicare Advantage and highquality Medicare Advantage plans and traditional medicare . I think sometimes the challenge is to expand the managed care and sometimes the challenges and the payment policy and is due to the provider contract and and the health plans cant establish sufficient networks and they might want to continue. So i dont believe simply paying the plans more what mrs. Early lead to better choices or Higher Quality choices to understand why the health plans cant come into the program but i think that underscores what our strategy has been to make sure that the traditional feeforservice program is as strong as possible to create them that during the best managed care to make sure the program is as strong as possible to in said plans to go to quality to make sure both programs are as strong as possible, so even the beneficiaries dont choose managed care or dont have all the traces the of the parts of the country have they can still receive the same care coordination and good managed care principles that the highquality managed care can provide. Thanks very much. Upwards of 40 to 50 of florida is on Medicare Advantage. Lets talk about that. The Insurance Companies are screaming bloody murder, but shouldnt they have known that the whole idea of the changes in Medicare Advantage is to cut out the 14 percent above that they had over and above medicare feeforservice in the Prescription Drug bill. Estimate the plan averaged subsidies for about 14 greater than feeforservice on average. We estimate today in 2013 the difference now is 4 . To be phased down even further. Many told us and i think told this committee is that 4 percent given the reductions that you have Just Announced or that you are planning to announce . That is the current rate. Its still proposed. But today on average we are paying 4 said the reduction has been taken from 13 down to 4 . At the same time we have seen doubledigit growth in the plans. We have seen doubledigit decreases in the premiums and the quality is improving rican reduce quality and to continue to see growth in the program i believe you are hearing about that and the reasons to that reduction we have proposed rates we are listening to comments but i would go to ensure it remains strong quality continues to improve. Steel enters the question the premiums have come down, the popularity has gone up and therefore the enrollment for the seniors is up because it is more popular. We are now reducing what i call it the subsidy to Insurance Companies over and above what the medicare feeforservice is which is part of the reforms that we are trying to save medicare and Health Care Bill and in part we were going to do that for a quality Rating System called the stars the quality that you have, the more stars you have in your plan seniors are going to be able to walk with their feet because they will choose the better quality plan would in fact is happening. We are seeing deutsch the incentive structures that have been created to be the fourstar and fivestar plans this is happening for two reasons. Theyre doing better if the star rating is going up and if they are at fourstar and fivestar irrespective of the payment changes over time is a Financial Model in the program. So to get more people signing up in their plan, the better quality they are, plus they get a financial incentive from medicare the mire the Insurance Companies screaming bloody murder that we are squeezing out the access to use to have. Some plans havent made the transition to the fivestar and we have to help them continue to make the transformation of our demonstration will continue in 2013, i think those plans that are below fourstar are facing given the proposal and again proposed the greatest payment challenge but i believe the plans that have made the transportation to provide fourstar and fivestar plan can have strong Business Model within the Medicare Program. Your goal to summarize would be that you want to have all plans fourstar and fivestar, and that if Insurance Companies get into that quality level, they will be making money and the Senior Citizen will be very happy and the overall cost of the taxpayer is lower is that the goal of . For every Medicare Beneficiary who chooses the program has the opportunity and seeks a fourstar or fivestar program. Thank you. Thank you, mr. Sherman. Thanks, everyone. You are making progress, thank you very much. If you could get back to us assumed about the internet formation, that would be helpful. Thank you very much. At thursdays White House Briefing spokesman jay carney took questions about current relationship with the press corps and a recent emails between White House National Economic Council director Gene Sperling and general bob woodward. You can see the breeding in its entirety on the web site, cspan. Org. Scaap have you ever spoken psp mckeown expects us to fully explain the policies, to answer questions about his positions, and to make clear when we believe the actual errors are being stated which is what we do come and look, i think as anyone who has on this from either side of the podium can tell you these are about real issues, these are about the concrete effect of policy on peoples lives, on our National Security. On our childrens future, and you know, if everybody involved in these issues feels passionately about them. But we are enormously respectful of the work that you do, that i used to do and we also believe its important for us to make clear when we think as we have in the past somebodys out there getting the facts wrong. When Gene Sperling told bob woodward that he might regret this importing what was intended by that . Dont you think it would be a responsible thing to ask that question in the context of the full email since we know what the full email said, where Gene Sperling in keeping with a demeanor that i have been familiar with for more than 20 years was incredibly respectful, referred to mr. Woodward as his friend and apologized for raising his voice cracked siding can not read those emails and come away with the impression that he was threatening anybody. And i think others have observed. You know, the point though that i wish the reporters would Pay Attention to the policy substance of that email because the point that he was making is the point that ive made and others have made and the president has made that this is really an important policy. And one thing that is absolutely irrefutable was the president from day one of signing the budget control act has been absolutely clear that in dealing with the deficit reduction going forward, and and replacing and eliminating the sequester, she believed we had to have balance. He would have to have your head in the sand not to know that. Everyone has reported it. So i think that is the fact gene was concerned with and we are all concerned with. As you remarked you were in a unique position because youve been on both sides in the relationship. Any regret about the erosion of trust between the sources and the reporters, does it hurt the public . I have seen this play out before in both the white house that ive covered previously. I think that we talk about this in the recent weeks where, you know, the natural adversarial relationship in the press corps and any administration and in the white house means that you appropriately are always demanding more Information Holding our feet to the fire, that is absolutely have it should be. You go out and report everything you can find out what we are doing and what congress is doing and what the agencies are doing, and we get out there and try to explain the president s positions and how his positions are the right positions and contest assertions to the contrary. It was certainly that way when i got here and then covered the Clinton White house and when i discovering the Bush White House and i dont think it is any different now. In fact i would suggest the atmosphere in this room was a lot more intense when i got here in 1993 than it is today. When youre talking about the tone of the email that he felt was respectful less light on twitter, david recently was a Senior Adviser in side of the white house put out a tweet compared to an aging baseball player that lost his talent and belittled him. Do you think that is respectful and something that the white house also supports . The fact of the matter is there was an accusation that she had been threatening and i think as everybody that knows him knows that is hard to believe. So, she has been working on these issues all his life. Hes very passionate about them and he works 20 hours a day often on behalf of the American People and the president to try to advance an economic agenda that helps middle class americans and average americans and he will continue to do that. Look, i have enormous respect for the work that he is famous for. I think a lot of us got into the business in part because we read all of the president s manner and saw the movie above. But, you know, we have a factual disagreement that i think we stand by which is that the president was very clear from the beginning that she would push balanced deficitreduction to read that cannot be a mystery. Thats been in the position since he signed the budget control act and in the position very as republicans adopted in trying to eliminate the sequestered. So zero moving to the goal post isnt familiar its just discriminant about the facts the problem with banning any book is that once you banlon we dont know where it will stop, and that takes us back to the totalitarian states. This has been banned many times especially in the classrooms i think simply because sometimes the parent doesnt understand the novel, they havent read it. There have been cases where School Boards or parents have asked to ban the novel, and it turns out they just havent read it, the words or phrases were here and there. But ive got to say that in every instance where the censorship of the novel has happened, every instance that i know of, the community, the parents, families have gone to the schools and said look, this is our literature, this is the important literature and you cant ban it because you pick a word or two and in every case that i know of, it has been overturned. Transportation officials from the federal highway, motor carrier and Traffic Safety department met thursday to outline their programs priorities for the next year and how the sequestration kutz might impact them. They spoke at the American Association of state highway and transportation officials meeting in washington, d. C. It is one hour and 25 minutes. Thank you for coming out this morning. This is the highlight in my mind of the washington meeting as we get to share our thoughts with our great colleagues in the u. S. D. O. T. So, what im going to do is what we are going to do is quickly introduced the folks up on the stage who dont need introduction to any of you but we are ready to go through the formalities anyway, then we are going to open up to a sort of general question for each of the administrators and then get into some more specific questions and give them what i would really like to do is engage you on the questions for the members of the administration. We are it seems we are always in a critical year, you remember when we were just sort of kicking back with our feet up on the desk . But this is a good one, and we are we had a Great Success last year. To some of us, many of us a surprising success in the passage of the 21 so we actually had some structure for not least two years going forward, and that really did bring some of many of the reforms that we have all been working so hard on and the bad news is as soon as the ink dried what do we do with this and how we implement these, so this is the year of implementation and i hope we hear from each of the administrators what we are going to be doing on the implementation. But also, as we all know, as the funding for the 21 expires in september 2014, we are all gearing up for what replaces it, and so this im hoping that we are going to have some good media discussions about that this year or actually this year in the beginning today. Without further ado, let me first introduce myself if you dont know when the director of the department of transportation in this years aashto president. Im going to start with introductions. To my immediate left, all of us know that the administrator of the federal Highway Administration, victor is someone that has been affiliated with aashto for many years and the former director of the arizona d. O. T. And has actually stood up here. In 06 and 07 as the speech of president. You can do that again today, if you like. [laughter] since joining, aashto members have had opportunities to work with victor and his staff of the initiatives not least of which is his own everyday account program which has i think changed a lot of the dynamic and led to many of the discussions that have become. It focused on the short project delivery something that is important to all of us and of the people that use our Transportation System which is virtually everyone. Its also she is an absolute evangelist for accelerating technology and innovation deployment coming and that is something of that last years president was a highlight of his program and i thought that since i would have an original thought in my head i said we are going to do that again this year. So innovation to the Deployment Technology is critical so thank you for joining us and i look forward to your thoughts. Peter is in the transit administrator and he was appointed the head of the fda and 09 and a prelude to that he served 22 years on the staff including 14 years as a democratic staff director for the transportation subcommittee. If there is anybody in the room that knows what it takes to get these things done and know all of the war is in the battle it is peter. Hes acknowledged expert in the federal budgeting and finance and having that active role in the financing in the last comprehensive Service Transportation reauthorization dating back to the intermodal surface transportation act of 1991. That is a long time ago and i met peter very early in his tenure he came up to rhode island as we were working on getting to the real extension and it was absolutely great faugh we wanted the excuses and thats what we did. Joe, the federal railroad of administration appointed to the head of the fra. What happened in 09 . He began his career in 1976 and the Central Railroad to work numerous positions including as a yard switcher commuter conductor. Did you have one of those have . You still could. In addition to the railroad he served in local politics and 20 years. Thank you for joining us. The federal Motor Carrier Safety Administration joined the federal Motor Carrier Safety Administration and 09 and im going to get that for the rest of you. Prior to that, she successfully led the Maryland Truck Association as the chief executive officer from 03 to 09 in the background and Vehicle Safety goes back even further in the surf is the state of maryland at minister from 97 until 03. Thats great. Thank you for joining us. David strickland in the middle. Actually, okay, she was sworn in at 20 10. [laughter] praia to that late vlore. On the staff of the u. S. Senate committee on commerce and science and transportation at the senior counsel or the senior protection subcommittee and i have to tell you, we have an issue in rhode island we were trying to pass the seat belt law two years ago and david came out and worked with our leadership has again and evangelist to get that done. We did pass the primary but the 11th hour in the senate threw a curveball and it didnt sit well with us. So they put a sunset clause on the wall which expires this june so what we are doing now is working doing absolutely everything we possibly can to get that repeals the and i am confident this will have been so it will not be in vain. Thank you. Last but not least, the National Maritime administration was sworn in in the Maritime Administration june of 2010 at the maritime administrator since being appointed deputy administrator by president obama in 09. Prior to that, he served as the u. S. Department of transportation asking to the drafting for the policy on march 09 until his appointment as the deputy. David spent seven years on capitol hill while working in the u. S. Senator david was engaged in the formulation debate of most major federal transportation Legislature Senior counsel and primary adviser to the u. S. Senator in new jersey putative thank you. Lets give our panel a welcome. [applause] if any of you have been around the last couple of days, i also want to invite all of you to have a relaxed session. There is a theme this year and its going to be relaxed and we will have a little bit of fun with a very heavy issues, policy issues we have, so feel free to engage and i invite all of you to engage in the panel. Im going to start with a softball for each of you and this artifacts as your introduction for the opportunity to talk about your major initiatives for the year and that is i want each of you to talk about what youre policy priorities are for the year and what major regulatory actions to you expect to advance within that feel free to add any of the other initiatives that you have. Let me start here with you and then we will move over on to peter and over to this side. Good morning everyone, thanks for inviting us and joining us here. In terms of what is happening and what is important to us, obviously the highest priority that we have is safety and everything we continue to do will be focus on safety and ensuring that the policies and practices and guidance and everything that we do is focus on safety. When it comes to what is happening as you mentioned it seems like a year ago we were sitting here wondering what is going to happen in the next extension and on and on and on july 6 that changed when youre off and running and so we have been very busy since july 6th satchel evin prior to that weve done a lot of legwork on the potential bill. So the implementation for us is one of the highest priorities. We have a lot of work underway to be officially lot of guidance. We hit the ground running on july 6. We are ready to go with a lot of the draft guidance documents and things like that on october 1st. We actually had our website up and running with a lot of information that was important to all of you here in the audience. So we are going to continue moving forward on the issues. A lot of the rulemaking that is required we are working on that and a lot of reports of congress and new reports we are working on that as well. So far i can tell you when it comes to rulemakings i forget the number of rules we have to implement, but pretty much we are on track with all of them. Is that is going to keep moving forward. The second issue that is very, very important to me is of course innovation. You mentioned the issue of innovation. Innovation is for most important. Its important for us to invade our industry to find new ways of delivering our products faster, smarter, better, and i think that if we can demonstrate to the policy makers folks that actually will at some point in time have to face a funding issue for you to demonstrate to them that we are bringing down to the taxpayers with all of the investments we are making whether it is public transit, railroads, highways and on and on when it comes to innovation i think it is incumbent upon the industry to demonstrate we are experts on what we do and if you give us the opportunity to invest wisely, we will do that and we can do that in innovation and technology. Thanks. Peter. Some of the federal Transit Administration its with the priority on safety coming and we had a major sort of generational break throop and map 21. Many people dont notice the the federal Transit Administration has been prohibited since 1964 from issuing even the most basic common sense Safety Standards of any kind. Safety standards that we couldnt to implement that for federally funded. Thankfully in the leadership of a number of them was on both of the house and the senate we have to save the authority that we are going to employment in the concert with the states and state safety organizations. Were frustrated in our ability to fulfil what we want to do their for the continuing resolution bill that we are currently living on that restrict us from doing activities that were called for on the map 21, so we are certainly hoping the continuing resolution on shackles us from doing that if we are going to have another continued resolution for the remainder of the year but safety is number one and always has been. And since i have many of the representatives and the state in the room, i want to use this opportunity to call your attention if you havent already seen them coming your governors and many of the members of the commissioners of the state transportation departments in the room have received letters both from secretary ray lahood and from myself outlining a number of important things. We now in trying to strengthen our safety have profiles and improve in the valueadded way the safety of the Transit System fund. We actually have the ability to give the states grants to fund the state organizations to what we think they should be at in terms of expertise, adequate staffing. However, that does require an 8020 match and i asked the secretary very early on after it passed to send a letter to the impact of governors that they need to budget for about 20 match. And if that letter hasnt trickled down to you please find me after this meeting. Ive also separately sent out a letter to a number of you in terms of the process that one will follow, and that i think is very important. In the other areas of their priorities for us, here again, we believe the congress did the right thing but we also face certain restrictions and certain frustrations and i am thinking specifically about the new capitol the Investment Program and our hurricanes dnd relief. When it comes to our new starts program, where we put a couple of billion dollars in a year into the expansion of the existing Transit Systems and really to build out of the new Transit Systems its been an extraordinarily successful partnership. Called on us to streamline our process these in a way that frankly was remarkable unanimity between the administration, the house and the senate, democrats and republicans on what needed to be done. We are now putting of regulatory products to implement that. Victor and i just in the last couple of weeks have put out the regulations as it relates to expanding the categorical exclusions and of the list of things that can be done under the categorical exclusion in the streamlining but for emergencies and nonemergency investments. And its been very successful. At the same time, the sequester had been hit as soon as friday would cut over 100 million in the new program and take a very compressed pipeline even further. Similarly, in Hurricane Sandy, obviously Hurricane Sandy represented the largest disaster in the history of the united states. The morning that the disaster hit more than half in america were not available. And even days later after baltimore and d. C. And boston came back online, close to 40 of the transit in america still were not available. Congress has given 10. 9 billion to the rumors and Emergency Relief Program that we proposed from the 21. Obviously when we proposed it, we had no concept that anything along the lines of her cancer in the what hit but congress has provided a 10. 9 billion, hundreds of millions of which would be sequestered on friday to bring to bear on her can sandy relief, so while we are moving out very quickly to put those dollars to work to reimburse the states for the cost theyve already incurred the sequestered on that program is very frustrating. Overlaying all those things is the fact that the administrative budget of the fta is going to be sequestered like victor im not bitter about it. [laughter] it comes from the general fund and the administration trust fund that was bailed out of the general fund. But more importantly, i think what is notable is they are working hard to implement the safety provisions and implement the new 21 requirements and at the same time as i am pushing the staff to do that as quickly as they possibly can i now have to contemplate furlough on the staff for a certain number of days in the year. As of that as though there were opportunity of frustration. Thanks, peter. Thank you, mike. By so many measurements, 2012 last year was one of the greatest years for rail in it was the safest year in the railroad history. Amtrak saw the record writer ship on the performance record in the 40 year history and the intermodal freight traffic surged over 12 Million Units come close to an alltime record with a vote in the california general assembly, the highspeed rail, to render 20mile per hour service is becoming a reality, going to break down this summer. 110mile per hour, that is outside of the northeast corridor, it began operating in the midwest on the short segments at this point between chicago and detroit and chicago and st. Louis and both of those have the majority of the lines operating at those sustained speeds of 110 Miles Per Hour within the next couple of years. We ordered new equipment, new next generation highperformance equipment and in a great part due to the things the states engaged in the section 305 committee initiated the first planning study on the northeast corridor for the substantive investments and the carter of administration and we are able to insure that 100 percent on the highspeed funding was obligated well in advance of our september 30 a statutory deadline. But that is simply a warmup. Simply a warmup for the level of construction that is going to be taking place this year and the work we are going to have to do for the continuous Safety Improvements as well as continuing to advance our high speed and Passenger Rail program while also growing their role in the freight rail has displayed in the meeting the nations mobility needs. As i said, really moving into this coming year, the goal is to ensure the Continuous Improvement of the set a record last year thats never good enough, it is far from good enough and so we will continue to work on advancing the cause of training goals. This Reduction Program is for the freight railroads and look towards very closely with congress and the stakeholders on the reauthorization as we look to three authorized the improvement investment act and the Safety Improvement to develop long term Funding Source for the rail investment on the passenger and freight rail. I know youll want to talk about this a little bit more but the 209 funding, continuing to work with the stakeholders to take a look at how we can provide the transitional assistance. As you know, we did request that in our fiscal year 2013 budget request and also having a seat at the table as math 21 freda positions are implemented while it was silent on their role its a fra perspective that from the leadership down a was very clear that the growing role that the rail is going to have to play in meeting our freight mobility needs. So we look forward to working with our sister agencies on implementing those freight provisions. Anne . Thanks everybody to begin its pleasure to be happier with my colleagues. As all of you heard from the secretary yesterday and each of us clearly from a policy perspective, safety is what drives us. For the federal Motor Carrier Safety Administration, we fraiman our work in the three core parameters. Its raising the bar for safety, raising the safety bar for anyone that wants to come and to the truck and bus interstate operating environment and that means better registration systems and screening at the point of entry. Requiring the folks operating today, buses and trucks across the nations roadways to maintain high standards to continue on operating and ensure they get the worst off the road and keep them off the road and that is a significant challenge. Perhaps best witnessed by one of the core Program Priorities this year which is motor coach safety. Many of you have been implemented in the southwest and the northeast, the southeast or the northwest by a significant bus crash in your jurisdiction or nearby. Those crashes are devastating to all of us because of the devastation that they wreak upon the individuals in those buses. When it comes to Passenger Carriers many dont realize this that out of the 4,000 motor coach across the nation, they are carrying more passenger trips of your than domestic aviation. 700 million passenger trips why 4,000 motor Coach Companies. Those 4,000 motor Coach Companies are in the regulatory scheme that we exercise over 500,000 companies with a pretty small staff. But the fcmsa has amp number of these companies and in some cases we have found even after weve been out there doing a review we miss something and something terrible happened. And while the agency has sort of stretched into every corner of the 40s and in some cases help with those that had a hand in creating those because they were in congress at the time some of the authorities came about, we are finding that we need to change the paradigm of the safety and its witnessed by some of the crashes, the devastating crash as many of us have seen over the past couple of years so we did it with a very broad sweep taking out the 26 Companies Last year. The agency today is taking a much stronger approach to tackle the issue getting the worst operators and the bus industry off the road. Is no small challenge but we are upping the ante on our own investigator training and identify and through the gap analysis what is missing in terms of the current authority, the current structure to truly set one structure for the safety across the nation regardless of what mode of transportation and individuals traveling in. From the program perspective, motor coach safety is a core priority. Also, among the top priority is Driver Safety and driver behavior. Nine out of ten crashes involving a commercial vehicle or something the driver did or failed to do. You know this because you lived in the safety world on a daily basis. One of the challenges that all of us face is how you stop the commercial Motor Vehicle operation from operating on safely ashore officer is uncomfortable putting a large commercial vehicle. Out of the 800,000 officers in the nation we have about 10,000 that are of cmv experts. The other 790,000 have a tremendous opportunity and are very knowledgeable about unsafe driving meter from a speeding, lane changing, aggressive behavior, and what we are doing working closely with the International Association of chiefs of police is training all of the every 800,000 in force officers how to be comfortable pulling over the truck of the operators are operating unsafely because at the end of the day with everything that we are doing, that last person that has an opportunity to prevent a crash from happening is behind the wheel. So those are the two priorities this year. From a regulatory perspective it really feeds into the framework of raising the bar for safety and getting the worst of the worst of the road. We have a rule known as the electronic it used to be called electronic recorders. Many of you have heard of it did now, thanks to the added emphasis its an electronic logging rules and the transitions of the paper looks to an Electronic Service monitoring system. We are certain it will improve compliance across the industry and get at one of the Biggest Challenges for all of us and Transportation Safety which is operator fatigue. A second world also speaks to the priorities is to is actually behind the wheel and its crew getting a drug and alcohol clearinghouse that requires a rule before we can build the system. Deval fortunately gained added strength and will create a Clearing House where the employers can access it the driver has tested positive for drugs or alcohol in the prior in planned status in a different preemployment check it is a resource to make sure that employers know who they are putting behind the wheel of the bus before they do it and in some regards they are vulnerable today because they dont always know and to those states some of you are sure in this room who are operating another tool called an employer notification system that pushes out to the employers that subscribe to your drivers license system if a driver has been convicted of a serious moving violation, been suspended, had any other in pact that addresses their highrisk driving behavior and pushes that information out to an employer right away waiting for that and you will track on the driving record or the report driving infractions. Thats the kind of tool that is vital to ensuring that employers dont put an unsafe driver behind the wheel. That is what youre doing on the drug and alcohol clearinghouse. The last thing i want to mention because this is it is near and dear to those focused on performance based outcomes and performance measurements, the agency is going to complete this year through the proposed rule making the final of the free phase four rollout of the safety accountability program. Its a program that takes on the road section data that many of you accommodate infestations or through your own inspection forces uses the current performance data that is catching but of hickel is doing and had a driver is operating at realtime through the roadside inspections and uses it to do analytical groupings of behavior. The last piece to enable us to actually use the data to reach companies and carrier safety does require a rule and its called the safety determination rule is a complex world and we expect that to be on the street this year as a top priority. One thing i want to address off the top is in 2011 we had another year of role for the highway Traffic Safety fit devotees. And it is a partnership for everybody this year in this room and seeing a little less than 33,000 people die on the roads since 1949, it is 33,000 people as there was on the road in 2011 which means that we all collectively have a tremendous amount of work to do and the focus and specifically Motor Carriers and what victor is working on on the federal highways as a part of the surface mode together. Theres a number of opportunities that we actually pick up and map 21 to address how we move forward in dealing with this overall member. For ntsa specifically, it has consolidated a number of our behavioral programs under one unified Grant Program which would be of great assistance to all of your offices in terms of administrative overhead and other forms issues. While we collapsed these programs in what used to be known as the 405 protection Grant Program. As peter mentioned in the anomalies of the current cr all of the Grant Programs do not have a of an attachment and unless this is fixed in the next after march 27th, we will not be able to actually find seat belts, Impaired Driving and all of the other behavioral brands we work so hard to do so hopefully the anomalies are corrected to get the resources out to all of you so we can begin the safety work we are going to be taking up on the map 21. We definitely need to get that addressed. On the flip side of the issues are the new opportunities for the safety created on that 21. There are two new grant proposals which did not exist before. We have a couple of focuses in 2011. We really do need to realize and recognize what are the core policies a second issue which a number of states will talk about, as we are working so hard to just do things, getting people to understand and recognize the risks and what we have to do. Because what we dont, the very things we are trying to do have to do with people feeling risk and not increasing the problem we look forward to your questions. Thank you, david. Good morning, ron. Thank you so much. I appreciate being here with all at all the great leaders on this panel today. I would like to ask the question pretty briefly. It will enable two thoughts great one is immigration and the other is innovation. There are two things that describe what we are working on in this administration. One of our questions is how do we integrate the national Transportation System. And that provides an excellent opportunity and we certainly appreciate being able to be a part of the council now. It is such an honor to be here with you and here is why it is important. One of the issues that we have been talking about is the expansion of the panel cannot. There is a lot bigger ships we can handle. We can fully the load this community and infrastructure needed to get all that in and out. I know that is an extreme example, and it is a long list. When you think about that, it really poses interesting questions about how our Transportation System, and i mean throughout the entire society is dealing with and needs to change and adapt to the kinds of needs for the 21st century in our system. The other thing that we are continuing to focus on is this program of this information highway. We have talked about this but it wasnt until secretary ray lahood came in and stepped up and said we are going to invest in this program. We are going to designate this around the country and along the water, places where it makes sense to have benefits of doing so. So we have matching ones along the coast. We have invested 130 million in projects around the country. Some of them have started to become a little bit different than just the basic infrastructure project. We have had a lot of handson work trying to get to the parties and multiple jurisdictions together to work for the private sector to develop the new types of services that will benefit the entire region where they operate. Now, the other thing that i would like to mention is innovation. One of the exciting things that is happening in the maritime industry, and i have to tell you that for a long time the level of innovation has probably not been very grade since the shipping container was invented in 1956. A recently we have seen an exciting phenomenon that is the shift to deal with liquefied natural gas. It is one of the cleanest burning fuels in the industry. But the figures are 25 fewer carbon emissions, stock levels caught by this respectively and 50 lower levelers in particular. So that folks are really interested in gaining this, chips are not a huge force to begin with. But when we have spoken with some of our colleagues in Foreign Countries that have looked at those, those who have tried it, they have said if we are going to put a natural gas facility near us, people come out of the woodwork and say, goodness, we are interested in municipalities that have fleets and buses and you name it. There is certainly some real opportunity is on that side. And what we are seeing is very exciting. We are going to be working with the carriers and those to help bring about that change. I would like to jump back to this issue of immigration. Because we have certainly stepped up to the Department Level of Maritime Administration to talk about of the 38 states and the waterways, only eight of you have somebody on staff that can serve this. That is something that you are going to be hearing for a long time to come. With the industry there are great benefits and youll be hearing from us very quickly. That is a great message, david. One of the things that we heard from everybody up there was the secretary from yesterday i would just like to give a shout out to tony, who has been with us for safety for so long, cracking the whip on all of us to make sure that we are stepping up and tony, i believe this is your last washington meeting fries. Thank you for everything you have done to coordinate our efforts. Thank you. [applause] okay. Moving back, im going to talk you about this now. We have all been working together on this performance and what i would like to ask a little bit more specifically about, there are concerns and the focus is starting slowly and whether this debate should be done. What can we do to ensure that the implementation of performance based programming is done appropriately and effectively and we are not jumping the gun. Yet, implementimplement ing in a way that is meaningful and adjustable at times. What are your thoughts on that . When let me begin by saying that, you know, in a performancebased approach, it is really a great policy approach. Going back to the idea that you have to be more transparent. Really be able to demonstrate to the American People that we are making wise investments. Taking this approach, frankly, it is the right way to go. I remember at one of our internal meetings, congress, we think is going to take this approach, but we are not sure. I remember thinking to myself, we have a little system of tracking action and i remember my note to myself was even if congress does not do this, why would we not as an industry want to do this. So i think it is the right approach, given limited resources and the fact that we do need to serve the American People, i think, the best way that we can. Having said that, let me just give you another perspective. You mentioned the importance of really ensuring that we do this thing right. In a meaningful way. One of the big issues is being able to reach out and figure out what is the best approach. We have had a lot of outreach to the stakeholders. But let let me give you the perspective of what we need. We are experts, but when it comes to performancebased and the issues that are in front of us, its going to recall all of us working together. I know we are experts in the field, but i have to tell you that my own experience and going to these meetings, i come in with a certain perspective, and i think i know what direction we are taking ominous. Yet as i have sat in many meetings with a lot of you, people that might not even be here, i have learned a lot. My perspective has actually shifted and has actually shaken up my initial thought process but i think that that is what we as an industry need to be doing. We need to sit down together, we need to be able to move these issues forward in the best and most meaningful way to serve the American People. I think that we will come up with some great processes. What are we actually doing on this performancebased approach . Well, i think that it will help to establish the performance guidelines. It will follow through and actually establish performance targets. It will be an important process and i think that we will learn that maybe some issues that we thought were good things may have to be, you know, modified, you may be even revamped. You never know. Our approach, i think it has been made pretty public in terms of rulemaking that will be required. What we have taken is the issue and put it into what we call three tiers. We do have a timeline for this. We are going to be issuing notices first beginning with safety targets that we are targeting for the Third Quarter of 2013 this year. Followed by the infrastructure condition in the Fourth Quarter of 2013. Been in in the first quarter, we will follow up with Free Movement and system performance. So i think most of you have heard that approach. It is the timeline that we are under. We will be able to meet all of this. A lot of outreach that we must undertake. I am very confident that we can do this in the right way. I do have to say that our executive director along with our staff, they have been working on this for many years. We have been ahead of the curve and jeff has done a great job in moving all of us towards what i think will be a success. I look forward to continuing to work with you. Peter, you mentioned in your opening remarks, but Hurricane Sandy change the world a little bit in many ways. And in many more ways than we have time to talk about. But the recovery assistance act, it doubles the amount of funding. As you mentioned, the fda must administer this. Does this streamlined freeing up staff for a preapproved list of this to change how we do business . I think we are already about the business of changing. Even before some of the additional authorities that were given. But i am glad you integrated this Hurricane Sandy relief experience. Because it is noteworthy. Perhaps the best and most noteworthy change in providing transit emergency relief versus the Fema Authority is we know the transit participants much better than having them introduce themselves only in the aftermath of the disaster. The very importantly, the authorities that we are given allow us to fund returning those transit assets to a state of repair and under the rules of fema, fema was only able to reimburse impacted transit agencies to what i sometimes cynically referred to as returning this to the decrepit condition they were in the day before the disaster. Which is actually how the program works. We literally had some experience as posthurricane katrina in which the bus that got flooded, you need to go out and purchase an eight year old bus. That does not serve the public very well. It does not meet our fundamental goal, and that is to provide reliable transit to the public. Not to mention the fact, that its very difficult to explain. [laughter] if you have all of those things together, the program not only allow us to make investments to return to the condition that we all want them to be in. But it will also allow us to make investments to mitigate the likelihood of a recurrence of a national disaster. The reality is many of the tunnels flooded that caused this transit disaster under Hurricane Sandy had flooded under hurricane irene less than two years earlier. We need to do something about that. It is not wise to the taxpayer to keep reinvesting in the response and recovery without doing our best to make sure that there is not a recurrence. If climate changes are indicating that we need to be even more mindful of this, we now have a program in which to do it. At least in the Hurricane Sandy situation, we have resources to do it. That is a Lesson Learned across the country. None of us know when that next issue is going to happen. It may not be a flood, but, you know, it may be a shaking earth or who knows what it will be. That is true. Joe, you talked about this. As you know, section 209, is scheduled to take place at the beginning of fiscal year 2014. It will have some effect on Passenger Rail service. Does the panel have anything they want to say about operating during this time of transition. Some of the folks in the room may not be familiar with section 209. Could you give a brief summary and then your thoughts on what you can do to help . Those of you that dont know, for those that dont know, section 209 of the improvement act for passengers generates a cautious for service. It actually standardizes the methodology for amtrak corridor service. In the past there were states that were paying for the service in other states were not paying for their service. The prize with the different states were paying were calculated different ways. Its standardizes the cost methodology and then makes sure that it is consistently applied across all of the court or services that are 750 miles or less. That is set to kick in later this fall where the Cost Allocations are transferred to the state. From this perspective, we have looked at a few ways. In both of fiscal year 2012 and 2013 budget requests, we have requested transitional systems that would allow this to be phased in more comfortably for the states to have time to adjust, particularly during this time of tight state budgets. To make sure that there is a smooth transition. So we think that that is important. Obviously the other thing is also making sure that some states do this well. We have been working on seminars and making sure that states view themselves and their role helping states view themselves as discriminating customers, more demanding customers, to make sure that they have the programs in place that they need to more effectively manage to enhance the quality of it and ensure the highest Quality Performance and Customer Service and to do the things that improve the quality of the service, which will reduce those costs. Also helping give the states what they need to review and manage these bills. It is something that was committed to a week or so ago. We have a rule to ensure this happens. It is making sure that the costs are very transparent. That amtrak is providing good information that is clear and well understood by the states and so they understand every component that they are getting. Thank you. This is a little bit of oscar, but we just had a meeting earlier in the week. A few words for the audience on what that ever is. The extent of that effort involved in the northeast corridor, a quick comment on that process . Sure. The northeast Corridor Commission brings together all of the states and stakeholders that are involved with the northeast corridor and all of the operations. For the first time, it pulls everyone together to comprehensively take a look at not only what are the existing needs to ensure that that is brought to a state of good repair, but what will be the future needs, and much of the growth will be in the commute around. So how do we collectively come together and come up with the appropriate vision for that corridor. The important component of that is how we fairly and adequately fund those improvements and that future vision. A lot of the lessons that have been learned by the states and the stakeholders in this section 209 process are being used as a starting point. We Start Talking about the Cost Allocation on the process. Thank you, its a great example. All the federal agencies involved need to recognize that we are all in this together. It is difficult to articulate the funding structure that isnt fair or equitable to all parties. Yet, it has to function more than just inside rhode island. Some of you want to get to boston. [laughter] i dont even know where that is, peter. [laughter] picking up on a bit of a theme, and i remember it being on some phone calls, the state federal industry coordination to something that is unexpected, particularly the coordination and in your view, what steps should we be taking, can we be taking to better equip us to deal with this on a daily basis. I think we are all still learning. But i will say we have to start with ourselves. We have an obligation following our experience with Hurricane Sandy to have an Emergency Response team and ensure right from the getgo, who their role is, whether resources are, and ensuring that we have phone numbers for the team to operate within an online accessible resource for everyone to access were the waivers are, what types exist. What are the contacts for shortage areas and those in industry as well as our state partners. We are very eager to support the work that has been initiated. Our role is a supportive one. In advancing a more level Playing Field when it comes to permitting, one of the challenges that everyone faces on the safety side is that there are some federal standards. But then each statement has its own state requirements. We need to regulatory eyes the ones that we are familiar with. Where the waivers need to be lifted or provided. We talked about this at the national meeting. The concept of incentivizing Something Like this agreement where there are regions, perhaps, of common standards so that when freight is moving across the country, in this case, we have lots of utility vehicles, the standards are not as varied or there is an easier network to tap into. The last core area for that sort of relief is integrating our work with the regional and National Hole authorities. The regional toll authorities on the iron i 94 corridor. That way we have a clear understanding. No one wants to dissuade them. Everyone has their own agreement with the shareholders and the citizens. But we need to recognize what the networking Industry Needs to know to be able to tell the industry when this is allowing a waiver for emergency equipment or supplies. So it is really taking what we did on the fly and standardizing it. More or less creating a structure for that to continue. Thats great. That is good progress. David . Safety and coordination. We have talked about this performance. How are you coordinating with the administration. The other most appropriate for the implementation and the definitions coordination and making sure they are consistent. Okay, well, actually i think it actually consolidates this and those conversations in those terms of trying to find common Performance Measures and goals. We want to help those and the issuance of those grants. It is really a question of how do we achieve when we Work Together. Second, an opportunity that is coming up next week, victor and i will be doing a webinar for a number of our folks and folks across the state i cant number the last time we had the three amigos doing this together. But we have talked about how we can get all of these things coordinated and those to get the resources out in the best way possible. So im very happy with the process. It is definitely ongoing as well. Thank you. I think it is relevant that both victor and i have a performance measure is in the transit section and we are obviously having a rich conversation right now and the melding of the cultures, which i really think is what its supposed to be about in terms of it being an interesting challenge to work on this time schedule that has been laid out and attempt to have a common definition and whether we are easing that and how we should be measuring the same thing. Since we have been measuring it for years, a very different mechanism and how it has been looked at. It is one of the great and rich conversations. Thats great. Thank you. David, turning to you, this may be a surprise to you, but many of the folks in the room, they are very concerned about coordination of federal resource agencies and i would like to ask you how this is engaging. And under the 21 federal agencies to make this process as seamless coordination of it can be. I can imagine with all of the different interests, that is something you cant just click your fingers on. That is absolutely true. It is continually a challenge. We found that since we are not a safety regulator, we do get a number of stakeholders that come to us and talk about other challenges. A little bit more so than they would have the coast guard or somebody else that they may not want to get into some of the details about. But we have worked very well. I would say starting with the tiger Grant Program, which first led to some interesting discussions about if we are going to fund this project and it depends the benefits depend on dredging, maybe we should coordinate these investments across the different agencies. So that led to a formal agreement that the department signed with the army corps a couple of years ago. That has since been escalated for the White House Task force were a number of the Agencies Concerned with infrastructure issues are brought together and we are working together on some exciting policy ideas. We continue to work on the committee for maritime transportation. That is a federal agency that brings the 21 agencies together. That is a big group and a lot of varied interests. So it takes a lot of work to bring folks together and really coordinate policies as best as we can. Last of all, we have also stood up in the advisory committee. This is the Maritime National advisory committee. And that has been the venue for many in the industry and others on maritime issues. It was one of their recommendations that we suggest the maritime coordinator at every state dot that has these types of issues. They have really found some real benefits. Okay. Thank you, david. We have about 20 minutes left. I have some other questions here and we can come back to those. But what id i like to do now is open it out to the floor and get thoughts and questions from the audience. I would like to touch on anything that we can. I would like to have a discussion about the National Freight policy, which sort of touches on all of us. Questions from the audience before i have to call upon someone . I havent had enough coffee today. The state department of transportation, state convinced 13 billion a year in public transportation. We are very much engaged in that agreement. The nexus lies in bus transit. Without an effective highway facility, it doesnt work. What do you see as the future for this and how does it fit within the scheme of funds that are available through this administration . Well, i think the future is very bright. We have been big advocates for it. Pensively because if done correctly, when i say doing this right, im talking about doing it with not just an expression, but a uniquely branded thing where you buy your ticket before boarding so there is no miscommunication. The bus gets a greenlight every time it hits an intersection. You can have remarkable things than building a rail system. I have periodically been criticized for pointing out these cost differentials. It is your manic. That being said, sometimes only a real option will suffice. The challenge that we have when i think about the future, we have generally found that our portion of this through the new program. Congress got many of the policies right as it related to this, but it got the numbers wrong. The new program was expanded to include a number of new activities. They called upon us to streamline the programs to move projects through the pipeline more quickly. We were all in agreement on that. They also expanded this to include core capacity projects where you can make investments with existing Transit Systems to get greater capacity out of them. We think about was the right policy priorities well. And then they shrunk the program. They actually lowered to below funding levels. As we widened it, then we shrunk it, and then by the end of the week, it was like we were going to lose another hundred million dollars. To the extent that it would be hampered, that it would mirror the challenges that we have with overall funding for the new starts program. There are some agencies that are financially strong such that they can fund things through their formulas. Obviously, thankfully, these are not being sequestered. To the extent that we will obviously work with them. Some of the things that we just talked about, we are expanding the number of categorical exclusions, moving the projects along more quickly, i think the future is bright. I think more and more mayors and governors are seeing the benefit of this. I didnt see our friend earlier, oh, there he is. An area in detroit that is in desperate need of transit. It has now turned into the right investment. They have the capacity. It is very affordable. So i think that the future is bright. Okay. Questions . Okay, let me turn back briefly. A large and growing issue. The convergence of demands, service regulations, and the projected increase in freight traffic. What is this doing to deal with these issues and coordinating with others . The simple answer, not enough. There is a current project underway that we have worked on to identify technologies to identify available spaces as a truck is moving down the roadway. Most of you are in regions where there will never be sufficient space. Whether we can identify available or not, in the northeast corridor come in the southeast corridor, a major metropolitan hub. And there is insufficient parking regardless will of what you do to improve availability. The federal Highway Administration is moving ahead with implementing this, which again, i think it improves the overall focus of our Transportation Planning on this. At the end of the day. What drives truck traffic . A question for someone. The demand generally creates things like Distribution Centers. Retailers. I bring that up because we have to, together, and some of you have already been leaders must, but together we must bring new partners to the table on this issue. Drivers are moving our nations warehouses around the country. They arrived at places that are major Distribution Centers. And they need to stage the truck somewhere to drop off or pick up. That staging is rarely planned for when a retailer is recruited to a region or a Distribution Center is. When it comes to ensuring this because the freight is moving 24 7, the person moving that, the person in the office needs to flee. We need to have a place to sleep. Those that are the most demanding or the highest demand of those in key interstate areas, the corporate development, Consumer Shopping and whether local governments will. Those that will generate tax revenue or not perceived to bring inappropriate traffic. I describe that setting to reinforce the fundamental point that we have to be at a table with Economic Development officials. With zoning officials and those local government officials to discuss resolution of the problem. One last point, if you look at any zoning code, if you look at the requirements in a strip mall or a new office, you will always see multiple pages on how much parking must be provided for the users of that facility. If you look at this for a bigbox retailer or Distribution Center, you will see about a half paragraph on Truck Parking and it generally says that you have to have enough room to rotate a truck and move in and out of the distribution facility. We have to incorporate the capacity in the plans for distribution facilities and retailers. Those principles should be incorporated into all the planning. But it means that we need to bring the others but dont feel like they have a reason or a need or an obligation to be in this discussion. Otherwise, it is always between highway officials, and Law Enforcement officials and industry. That is where we cannot get beyond the core capacity of challenges. Did you have another question for me . Continuing the theme, giving us a little bit of information on the status of the study, how do you expect us to use it in the future . The efforts are underway. Last august of 2012, we actually created a policy committee to begin to look at freight issues overall. Obviously this particular issue is going to be a component of that. We have actually undertaken very recently this to get on board, a contractor us with the effort, so that is underway. We fully intend to have this study completed. I believe the deadline is october 2014. I think the issue that we need to keep in mind is that it is an issue that all of us really have to take a good look at. We are talking about safety. We are talking about impact to the infrastructure. Of course, it is an issue of moving freight efficiently. A lot of interest, it is a very controversial topic. A lot of people have very strong interest. We have had an incredible number of meetings with stakeholders and there are some people when it comes to safety, they have a very strong interest and agenda that we must deal with. But that effort is under way and i am comfortable that we will meet the statutory deadline on that. But it will not be easy. It is a very difficult issue and one that i traced back to when i was in arizona. Especially how we deal with it as that as a nation, it will be very important. It is a complex issue. We look forward to working with you on that. Peter . San francisco, new york, boston, there is a lot more than just the big cities. What is your view of small and Rural Communities as more seniors are choosing to age in place. Are there any thoughts on this . Welcome he said this and small cities. There are different applications and different needs. One of the things that we have discovered and Rural America as younger generations have had to gravitate to where the jobs are, rule communities are often occupied by retirees and transit actually holds a very Important Role to play, especially in medical transportation. We dont [inaudible] cant afford to keep the car on the road. Nobody is predicting a period of sustained low gas prices. We need to be mindful of the fact that, you know, i would venture to guess that, you know, part of that was he doesnt talk about much that broke down the fatality rate on the highway thankfully for david was transit roip was at record high the fatalitiesed at the record low. Some people are taking transit instead of the road. They are not all in urban centers. I think thats an important piece of it. Medical transportation is part of it for Rural America. Allowing seniors to age in place and not having to pay higher taxpayer subsidizes through medicaid, medicare and other elements to keep people in residential facilities, its a better outcome from the patient. Its a better outcome for the taxpayer. We need to do more with that. One of my goals really for the second term is to work more closely with the folks at cms and hhs on how we can do it better. Thanks, peter. David, sort of back to you. Let me come back to you. It provides for state behavioral incentive programs. We actually anticipate that two of these, no states actually qualify for. How will you how and if will you redeploy the funds that will not be used as grants if states dont make the necessary legislative changes to qualify. Will it influence your thinking . First, michael. We are still waiting for applications. I know, that a distracter driver applications are due today. I believe the other are going app candidate those are due at the end of the week. The agency has to make that analysis as to whether or not they qualify. So i think its premature at this point. Number one. But number two, even if there is a state or state may not qualify for particular grants and theres resources available. Theres the ability to be able to flex the resources if theres not qualifier to the 402 side of the ledger. In that way, those resources i think cannot be spent in the areas. They can be utilized in the general work that is part of the overall Highway Safety program. It isnt going to be a situation as we saw similar to the primary Safety Program under safety. But on the flip side of that notion, i think we have to recognize the congress in establishing the criteria for the particular Grant Programs. It isnt simply a continue wit to distribute resources. Part of the program under the reauthorization in years past didnt have to complete. One, to be able to create an incentive for a pull to have states undertake the legislative work necessary to make those improvements and overall highway Traffic Safety. The goal is to create, you know, a stretched goal. I think map 21 does as well as other. Lets switch back to the goals. One of them had prepare seat belt laws. We picked up, i think an additional 1 up to 14 seat belts because of the work of the 402. Stretch goals are good. While not every state may not immediately qualify for them. Hopefully there are changes made underway and the states have the pull to be able to use the resources. Thanks, david. We have a couple of minutes left. Any questions from the audience . Any burning issues. Let me theres one over there. Sorry. Yeah. If you can introduce yourself. Sorry. Yeah [inaudible] the department of transportation. The president said that that is for greater [inaudible] better . Okay. The president then steadfast in his support for greater investment transportation infrastructure, and he renewed his call recently for that investment. And the most recent proposal had two elements. One was the money and the other policy which he termed fix first. Having were familiar with. Naturally theres not a lot of optimism that will see the money. My question is related to the policy aspect. Are you spending any time thinking about this policy in any, you know, administrative actions or other activity you can engage in to support this idea . The way the president articulated the policy and have we thought about fulfilling his vision in i would like to put it more in the reverse policy weve been developing on we are pleased to see the hear the president articulate it. We have been working on fix it first for many years. And it was worn out in our budget for the federal Transit Administration early on. We did a record in the federal Transit Administration to identify the backlog for the major rail systems. Which we identified as some 50 billion. One of the senators that wrote a letter to the fta at the time was the junior senator from illinois a guy named president barack obama. It was not developed in the last six months. Secretary lahood instructed me to followup on the study do a broader universe to carry the other rail providers an the bus which we identified the deferred background need of 87 million. But to an adequate level of condition. Thats translated to our budget every year under the Obama Administration that highlighted, map 21 did precisely what we asked to do in the budget. Take the bus Discretionary Program and put to the state of good repair. Formula program, a transited agencies will be giving grants under. They did not increase the funding for state of good repair as aggressively as the Obama Administration sought. But it is the right priority. With at least in the Transit University they did a number of things we asked them to do. Theres a new focus on asset management, transit asset which have been funded with federal funds. There is new formula funding for state of good repair. And then thats the funding that we hope we will get as part of the fix it First Initiative on top of that. Its been a continue yum we have been working on some for time. The other job using this. Fta we are proud of the program where we have built new services. New light rail lines in Police Places like seattle, dallas, dallas operates more light rail than anyone in the united states. The flip side is if we lose two or 3 percent of our ridership in the older systems like new york and boston and chicago and San Francisco and here in washington, d. C. If we lose 2 percent of the ridership because of the state of good repair is not good. The service is not reliable. That people have safety concerns about it, we will more than offset all of the ridership that we will have gained from all of the new projects we have built around the country response if our overall goal is to grow transit ridership for the quality of life and reduction and dependence on foreign oil in order release fewer greenhouse gases. All the goals the president articulated. We cant build new project. We need attend to the condition of our twisting investment, the existing Transit Services all over the company and where the fix it First Initiative game from. Im going ask victor to hold his response until the spring meeting. I have a feeling that administrator would love to be here today. Butlet join me in thanking our panel, our friends, our colleagues here. [applause] [inaudible conversations] coming. On cspan2 the House Armed Services committee exams improvement and security in u. S. Nuclear facilities. Then the state finance committee looks in to implementing changes to the Nations Health care system under the Affordable Care act. Later transportation officials outline their priorities for the coming year. Friday a briefing with republican members of the House Armed Services committee. Theyre speaking to reporters on efforts to avoid the automatic spending cuts known as sequestration. Well be live from the briefing at 10 30 a. M. Eastern on cspan. Wednesday the Supreme Court heard the oral argument. It centers around a law requiring states with a history riff disenfrans cheesing disfranchising minority. Well bring you that friday at 9 00 p. M. Eastern on cspan. At one point he to write a small paragraph that said basically people are asking what happened to charlie. This is after his wife joins him. Its elaine and john. Not charlie and john. Somebody must have said where is charlie . Sign beck wrote about a page and a half people asking what happened to charlie. My lady joined me in seattle. Charlie took a family position. Hes fine. Obviously that never appeared in the book. What they did is the editors went in and i think expunged elaine almost thirty days of elaines presence with john on the west coast. They werent carping out or camps or studying america. They were basically on a vacation. With the truth in travels with charlie that can cant be classified as nonfiction. More with the author of dogging stein beck. Nuclear security of focus of a House Armed Service subcommittee hearing thursday. It the july 2012 breach at the National Security come mention in tennessee. Withins include officials with the military and energy department. This is an hour and 40 minutes. Called to order. I want to say gm and welcome everybody to the hearing at the department of Energy National nuclear administration. Before we get to the hearing i want to the new member to the committee. I want to recognize our Ranking Member my friend and colleague for many years. We look forward to working with closely with him. We carry out the important work. Im not sure theyre here. New to the forces subcommittee on the republican side are mr. Coffman of colorado, mr. Wilson of south carolina, mr. Knew again of florida, and on the democrat side mr. Johnson of georgia, mr. Carson of indiana, and mr. Texas. I look forward to working with all of