Because were already there. Were efficient. And were penalized all the time for our level of efficiency. We want the country to move as fast as possible to that new model. Its saving money. Its better care for the patients. We dont want to lose doctors in the northwest just because they get paid less because theyre more efficient. So we hope that behind the 30 number is incentives that really move people in a you know, some of the previous discussions weve had here, you know, basically youre going to move at glacial pace even though you can say you had 30 in the new system, they would be moving so slowly youre really just continuing to reward bad behavior. There was a secondary goal that i dont think is covered in the article and that we havent had the opportunity to discuss, and that is that any payer so i think we think there are two classes of folks. Folks that are moving at the nonglacial pace, and those will be those moving to full alternative payment models. Then we also set a second goal, and that is about the percentage of any payment that anyone is doing would move to 85 and 90 over time to have any element. So we actually have set up goals that are trying to encourage the speed in a larger group. But accounting for the fact that there are those and this will probably be a conversation in rural areas, and other places where people are slower to move. We look forward to discussing that with you. Thank you, mr. Chairman. Senator brown, youre up. Thank you mr. Chairman. Thank you, madam secretary, for your focus on implementing the Affordable Care act and what its meant to the literally hundreds and hundreds of thousands of people in my state, and your state of west virginia. I want to talk about the Childrens Health insurance program. Ive spoken with chairman hatch about this and Ranking Member wyden. Chairman hatch was one of the small numbers of authors of this bill in 1997. We know what its meant. Uninsured rate among children in 1997 was 14 , today its 7 . We know other things about c. H. I. P. Weve modernized it. It works in its present form very well today. My state its 130,000 children most of them have are sons and daughters of working parents. But they fall in a place that they just werent Getting Health Care because those parents either dont have insurance dont have insurance and dont have the income to make those decisions to send their children to a Family Doctor for Preventive Care and other things. I have here mr. Chairman if i could enter them in the record, im asking unanimous consent to do that. Without objection. Thank you. These are letters from 40 governors, including my republican governor, john kasich, 40 governors express how critical the current c. H. I. P. Program is to their states the need to extend funding now, rather than later. Senator casey and senator stavinau are particularly helpful in this effort. The legislations finished their sessions in the first few months of their year. More than half will have adjourned by june 1st of this year. Congress needs to act swiftly to avoid any disruption in childrens coverage. As you know, this law is authorized up through 2019. The funding runs out in september. Thats the push, and the urgency for state legislators. Just comment on, if you would, the impact on states if we dont fund if we dont extend the funding of the new c. H. I. P. The current c. H. I. P. The way we do it now if we dont extend that funding soon. I would just reflect on in my former role as the head of omb, as one was trying to manage a situation where you didnt have predictability of funding and whether that was in the form of a shutdown or other forms and in terms of trying to manage against that it is very difficult to manage. And especially in the space of health care, where there are contracts and providers that must be paid. The urgency i think which is what youre articulating from a management perspective, for the states, is extremely important. The states, and i think thats why youre reflecting the letters you have in your hand, in terms of the conversations with the states, the states need to have this predictability. It is an important source that they depend on in providing health care for their populations, especially for their vulnerable children. Thank you. There are a few things that this Committee Works on that have a few important major things that have had the history of bipartisanship that c. H. I. P. Has. The 40 of the 50 governors, a number of people here have voted on this legislation. Some have been around as long as i have and voted on it in 1997 a number of them voted for rethorks and they passed this spotty house overwhelmingly. The medicaid primary care parity provision in this years budget. A study published in the new england journal of medicine, its led to the increase of appointments for medicaid patients. Unfortunately, the provision that authorized disparity and payment between medicare and medicaid expired a month and a half or so ago, at the end of 2014. Senator murray and i had the women and children act. We were not able to enact that. Can you comment on the importance of this provision and the president s fy 16 Budget Proposal . We have included it in the president s budget because we think it is important. It comes to one of the issues that we discussed a little bit earlier, which is, this question of provision of primary care. As we expand the number of people who are covered making sure that we translate access to actually care, and Better Health and wellness is what we are aiming to do. We believe this is a provision based on the analytics that we have seen that can help us move forward on making sure there is enough care, and appropriate care. Is there a way to use the success of this provision to help guide future conversations around conversations and policy decisions around medicaid payment reform in the future . I think all of these pieces and parts, whether its the results that we see here in terms of having people become a part of this system of providing that care, and knowing that many people on medicaid have reported they have quality care that is accessible that makes a difference to them that kind of steps in terms of this provision, as well as the kinds of things that mr. Coates was mentioning in terms of some of the reforms were doing. I think its an important program. Its a costeffective program. We need to continue to look for the ways to make it more effective, both in terms of the quality, and the cost. Thank you madam secretary. Thank you, mr. Chairman very much. Thank you senator. Senator heller . Mr. Chairman, thank you. And i appreciate the opportunity to have this discussion. I want to thank also the secretary for being here. But i do want to raise a point of order listening to the discussion that you had with the Ranking Member, and also with senator cornyn. And i guess im a little confused, again, as a newer member of this panel, am i limited in the scope of questioning that i can ask witnesses . No, theres no limitation. There may be some questions raised from time to time but no limitations. It was my understanding that if its a speculative question, based on the Ranking Members comments speculative questions are for the Judiciary Committee or for some other committee other than this . I think these questions were proper. Mr. Chairman, just on this point. I think it is somewhat ironic that senators filed a brief challenging the law on what i considered to be completely unfounded grounds, and then demand that the secretary explain how she plans to avert the disaster that will occur if their brief is successful if they win. Now, we can sit here and debate because im like a lawyer in name only. I was director of the great panthers. I dont pretend to be a good lawyer. But i do think that weve got a huge challenge in terms of getting on top of this budget. The senator from nevada is a thoughtful person. Im really looking forward to working with him in a bipartisan way on these issues. I just hope this morning what acquaint idea that well focus on the topic at hand, which is the budget. We can keep speculating and have this parade of hypotheticals, as the chairman noted we dont bar people from asking questions. But i do think theres a little irony as i noted there. Let me just ask, these questions are legitimate because they affect this department more than any other department. And i was asking whether theres any contingent plans. Mr. Chairman i agree. I understand you know that you may not have any control over this at all. In this administration. Senator heller, ill allow a minute and a half to your thank you. I agree with you. I agree with your questioning. I also agree with senator cornyns questioning. The reason i bring it up is were going to have treasury liu in front of us tomorrow. If economic models and Interest Rates are not all speculative, i just want to make sure that im not limited to the kind of questions that i can ask the treasury secretary. But ill go forward. Madam secretary, i want to talk a little bit about the medicare back stop. You received a letter last week from senator rubio if you recall that particular letter that came to your office. I also sent a letter to your predecessor, the same issues. As youre probably aware of the Budget Proposal, it would reduce the bad debt payment from 65 to 25 . Now, in nevada we have 38 community hospitals. They handle almost 250,000 annual admissions. More than 2. 7 million outpatients just last year. Im particularly concerned for americas, and in particular nevadas rural hospitals many of whom already operate on a very thin margin. In order to provide care to these patients. So i guess given the issue im troubled by the administrations continued effort to significantly cut bad debt payments. Im also concerned this will have a very real impact on nevadas hospitals and our senior population. If you would please could you share your justification for this particular policy . Senator i care deeply about Rural America, and these issues. As you can imagine, every time i have meetings, these are one of the questions i ask. Overall, in the budget, in terms of how we support Rural America in the areas of health care, there are a number of investments, and whether thats the Community Health centers which disproportionately help Rural America, or our investments in Health Care Providers for Rural America, there are a number of things that do that. With regard to this specific question, of this provision, as we work to do something that i think you and others have said as a priority which is entitlements and longterm changes in terms of Structural Reforms to entitlements, so we work on that longterm deficit what weve tried to do is put together a balanced approach that is both has effects on ben fishsaries and providers. When we make the decisions and choices about what we include, we try to do that on an analytical basis. In the private sector, in terms of how they treat this issue. Were making sure were appropriately supporting rural communities. A very important thing of health care in those communities and the economics of that, but this is an issue that is a part of our broader approach to making sure that we are addressing the longterm entitlement issues, which i think we look forward to working with the congress, if there are ideas and approaches and specific policy changes that others believe are better than ours with regard to the package we have we look forward to hearing those specifics. Thanks for the answer. I would suggest that theres probably a real problem in some of the rural hospitals outside of the state of nevada, but i just want to go on record, mr. Chairman, that i do vehemently oppose these cuts. And i dont think its an issue thats going to go away anytime soon. I hope we can continue the conversation. We would welcome the alternatives and ideas about how we should address these longterm entitlements. I have one quick question, and that has to do with the projected savings in your budget. Last year you projected over 414 billion over the next ten years. In savings. This year its been reduced to 250 billion. Can you explain why the proposed savings are so much less this year compared to last year . Two reasons. One is as we go year by year were getting the savings in terms of the previous year. And also because we had proposals in our budget. One of the proposals on the mandatory side, so the number is a net number instead of a gross number, we decided that we would put in place investments. And those investments are mainly in the area of Early Learning and child care. For working americans, and people who are up to about 200 of poverty, its almost 10,000 a year to have your child cared for. And if you have a child thats between 0 and 3, and youre in that income bracket, we believe we want to encourage work and we want to encourage family. And so by helping with this child care issue, thats where the bulk of some of those investments are made. Thank you, senator. Senator bennett . Thank you, mr. Chairman, for holding the hearing. Madam secretary thank you for your responsiveness over the last years. I appreciate very much the focus Precision Medicine has in this budget, and the president s address to the congress. And my home state the university of colorado, has launched a largescale effort last year, across six hospitals including our childrens hospital, around Precision Medicine. I think we ought to do more to encourage the lifesaving therapies, that are important to both patients and broader economy. Senators hatch burr and i worked on the breakthrough therapies in 2012, since 2012 this pathway has now successfully led to 19 new breakthrough approvals. And 55 more in the pathway. So i wonder whether you could talk about why this is receiving the emphasis it is in the budget, and what the nih and fda plan to do to collaborate with the universities and the private sector to help spur the development of these breakthrough therapies, or Precision Medicine. In tems of why and emphasis on it, there is a lot of energy and effort already in the private sector. In terms of the why, we believe it can dramatically change how we provide health care to individuals in this country. The second reason is that we believe that this type of innovation, and this type of cuttingedge research should be here at home. It should be in the United States. And that we should make the commitment, and the funding available to make sure were supporting this research because we believe thats part of keeping our economy and innovation an economy. In regard to how the nih and fda work with the private sector, i want to express appreciation for the support weve received in terms of the fda numbers we were given. You see the 19 the 55 coming. Nih and fda will be working together and with the private sector. It will get the Precision Medicine to work right, that the data and information from those entities in colorado will be incorporated in the thinking. So its going to take close partnerships, the millionperson study were talking about we will be working closely with institutes. And were actually getting the input of how we structure it up front. Organizations like those that you talked about in colorado we look forward to hearing from. You know what, two important points, to quickly respond to that and i have one other question. It proves, i think, to the people around here who say all is lost all the time, we cant improve anything its a disaster, the fda, thats the goto place for people who want to innovate within the agency and outside of the agency. We ought to be doing more of that, when we think about what were going to do going forward. And second as you point out this is about keeping american jobs here and American Innovation here and driving an economy that is actually lifting the middle class. Thats why we got into that work to begin with. Its actually working. So a reminder that sometimes we can actually move beyond rhetoric and accomplish something in a bipartisan way that has meaningful results. Last week senator grassley and i along with a number of our colleagues on the finance committee, Nelson Portman and brown, introduced the ace kids acts of 2015. This bill would improve how medicaid coordinates care for our nations sickest children seeks to reduce the burden on families who often have to travel across state lines for their childrens care. As you know, children who have complex medical conditions make up roughly 6 of the children in medicaid. But account for up to 40 of the programs caused, the issue is especially challenging given medicaid is largely a staterun program and these children often need highly dedicated care in multiple states where certain specialists live. Given hhss recent focus on alternative payment models, moving away from singular service, i wonder if your staff might be able to help work with us to provide the necessary technicologicalal assistance to work through this . Because medicaid is state based, how do we make sure that that care is both quality and affordable across state lines. Thank you. Thank you, mr. Chairman. Thank you, senator. Lets see, whos next here. Senator bennett. Thank you, sir. I appreciate it. Very much. Good to see you again. I certainly enjoyed talking to you yesterday as well. I do appreciate your responsiveness to the questions from senators. You have certainly established a positive reputation as it relates to getting back with us. Its obvious that you care about having a healthy relationship with senators, and i hope my comments do nothing to take away from that. From that. I will say that every dollar that we spend that we do not have is taking money from a youngster, a young person who cannot afford a lobbyist a young person who cannot afford to bear that burden, taking her future earnings without her permission to use today and leaving her with a bill that is utterly broken and a system that is broken as well. When i think about obama care, i think about the fact that it started off in 2009 at a cost of about 900 billion and then it was changed to 1. 8 trillion and then recently it went back down to about 1. 35 trillion to year 2025. And it started with uninsured americans and well still have 121 million americans uninsured after spending 1. 35 trillion or maybe 1. 8 trillion or maybe they will change it again. And at the same time we are squeezing the Healthcare Providers at the place they cannot provide care to the patients that desperately need the assistance. So having a cart on the front end but having no one to take care of you on the back end does not seem like progress and still having 31 million americans uninsures and one of the uninsured and why you have so many questions about what happens in the case because when you look at the actual law itself and the construction of the law from a financial perspective, with 30 or so changes to the law delays to the law we find ourselves unprepared for a future that obviously is coming it seems like to me. A couple of questions and i would like to go back to the king burwell question. Youre a brilliant woman without any question. You served very well and i think i voted for you whenner were up when you were up for omb so i have confidence in your capabilities. I remember the conversation when you were on the met life board of directors. I cannot imagine a member of a board talking to your ceo and asking him a question about the possible scenario that may be a probable scenario that there may be something that happens that will require the company to be prepared for an outcome a legal out come and the answer is i dont plan. I dont see that as a realistic outcome. And the question ive heard over and over again is is there a contingency plan is there a plan . Senator right now in terms of this issue of planning for a hypothetical for which there has not even been oral arguments in from front of the Supreme Court what im spending my time doing is focusing on what i believe im responsible for which is implementing the law that you have given us and that is where im spending my time right now that is focused. You so have no margin at all to spend any time focused on a probable outcome that could impact the Delivery System of healthcare in america you have to plan you have no time for a contingency plan whatsoever. Right now with regard to the issue of a probable outcome as i think i said we believe the position that we hold is a position that both represents the letter of the law, as one and ill let the Justice Department articulate the reasoning around that and we recently have in the brief that we filed with regard to the letter of the law and certainly with the spirit of the law. And the idea that the United StatesCongress Gave tax breaks to people in new york but not people in new jersey or other states. And so we believe that in terms of the issue you use the word possible we believe we are in the position that is a right position. So section 1401 said people may receive a premium tax credit if they enroll in a exchange established by the state under section 1311. You believe there is no likelihood that the actual letters in the law will have weight in the Supreme Court . With regard to the issue of the specific arguments around the letter of the law im not a lawyer and i will defer to my colleagues at the Justice Department with regard to the specifics of that and we have filed a brief. So no contingency plan . As ive said, right now, what im focused on is what is before us now in terms of the most important responsibility to implement the law in the way that serves the consumer and between now and february 15th that is my deep focus. Thank you. Thank you, senator. Senator casey, at last. Mr. Chairman thank you very much. Sect burwell, we are honored youre with us today. Let me say at the outset ive been in State Government and the federal government now for what i guess is about 18 years. And i know competence and integrity when i see it. I think youve demonstrated that in this job and i think youve demonstrated that today. So i want to start with a list and ill try to do these quickly because there is a lot to be positive about. Not just in your statement and in the budget presentation but also in the impact of the aca and other policies. Let me do this quickly and then ill raise a point of contention. But i do want to ask you about medicaid and a couple of questions about medicaid. First of all with regard to the newly ensured since aca, just a Staggering Number of americans now are covered, and i dont have the exact number, but were into the double figure millions and that is significant. Childrens Health Insurance i was heartened and encouraged by the proposal. Just to give you a sense of what my state pennsylvania, has, right now 147,000 as of january, 147,464 children enrolled. Our program is a little more than 20 years old but it is i dont know what we would do without the program so senator brown and others who have raised this issue repeatedly as i have, we are heartened and just hope that your commitment to the Administration Commitment will be honest and the donut hole savings since 2010. Seniors who have to pay out of their pocket when they hit a budget gap, the savings, 11. 5 billion, effecting seniors, eight in ten customers getting coverage for 100 when you factor in the tax credit. National institutes of health your commitment to increase funding for that should be bipartisan here and i hope it will continue to be. Early learning, i dont have time to go into that but a great commitment by the administration. Hospital readmissions going down. Literally saving lives. According to your testimony, if you look at the 20102013 hospital readmission reduction saving 50,000 lives and 12 billion in health spending. Childcare, the commitment there is great. We dont have time to go into that. Head start Early Head Start and Home Visiting rooting out waste and fraud and that is a long list. And i think we should not only celebrate and note those achievements and commitments depending on the one that i itemized but fight hard here to support funding and any other legislation to do that. I want to ask you about medicaid. The way i look at medicaid is its a program but it is really the program for longterm care for seniors, children, and individuals with disabilities. So instead of the program, i try to think about who gets the benefit of a good program. Im opposed to any blocking of medicaid. It is a really bad idea. But worse than that it would be harmful to people. But i wanted to ask you, in light of this debate about what happens to medicaid and what happens to the in our state, by one estimate of a quarter of a million seniors that depend on medicaid for longterm care, what happens to the seniors and the children in this country by one estimate more than 30 million kids if we go in the direction of blockading medicaid. We believe it is harmful to those individuals because one of two things happens. It is either harmful to the individual or the states. If we have an economic downturn or a change in the way the care is provided. Without the flexibility to respond to that, that the beneficiaries, that is where the cuts will go in terms of meeting the numbers. Either that will happen or it will go on to the states Balance Sheet and we believe that is not a good approach to doing this. As you know we are working with states on waivers innovative approaches but believe that is a an approach and the reason we dont like that approach because of the damage it can do to beneficiaries as well as states. I appreciate that and my time is running out. And ill raise two issues and do most of it by way of written followup. And one is childrens hospitals and we have three hospitals childrens