15 March 2019 House Energy & Commerce Health Subcommittee holds hearing on HHS FY2020 budget On March 12, 2019, the House Energy and Commerce Health Subcommittee held a hearing entitled, “The Fiscal Year 2020 HHS Budget,” featuring testimony by Health and Human Services (HHS) Secretary Alex Azar on President Trump’s budget request related to the US Department of HHS and its agencies for fiscal year (FY) 2020. Democrats on the committee expressed their concern with the budget’s cuts to Medicaid and Medicare, along with cuts to various mental health programs and institutes within the National Institutes of Health (NIH), and efforts to undermine the Affordable Care Act’s (ACA) patient protections through proposals such as expanded work requirements, increased access to short-term limited duration insurance (STLDI) plans, and restricted access to contraception. While some Republicans on the committee expressed similar concerns regarding funding cuts to the NIH and other areas, most applauded the Administration’s focus on reducing the price of prescription drugs, providing dedicated funding for initiatives such as ending the HIV epidemic and addressing the opioid crisis, promoting consumer- and market-based solutions to health care issues, and providing fiscal discipline. Both Democrats and Republicans questioned Secretary Azar on the issue of child separation and plans to ensure the safety and health of children housed at HHS facilities, as well as expressing concerns with proposals to utilize step therapy and other utilization tactics in Medicare. Secretary Azar said that they tried to set a budget within the caps and be responsible stewards of tax dollars while prioritizing direct service and state flexibility, and also investing in the administration’s priorities – such as opioids, HIV, and childhood cancer – while making necessary but proportional cuts across the agency. The Secretary committed to working with the committee to address their various concerns and work hand-in-hand to advance the budget’s proposals, and ensured cooperation with various oversight and information requests flagged by Democratic committee members. Chairman Frank Pallone (D-NJ): “Under President Trump’s leadership, HHS has played a major role in policies to sabotage the Affordable Care Act, slash funding for Medicaid, restrict access to women’s contraception, and separate families at the border. This is a devastating record for an agency whose mission is to advance the health and well-being of all Americans. The FY 2020 budget continues this sabotage by reviving the failed Graham-Cassidy ACA repeal proposal, which would lead to tens of millions of Americans losing their health insurance and would undermine protections for people with pre-existing conditions. The President’s budget also continues the Administration’s assault on the millions of hardworking families that rely on Medicaid for health insurance – proposing $1.5 trillion in cuts to Medicaid. It also continues the Administration’s illegal efforts to kick vulnerable Americans off Medicaid through work requirements, lock outs, and red tape. This misguided budget also includes over $500 billion in cuts to Medicare, putting health care for our seniors at risk… In addition to explaining the cruel cuts made by this budget, Secretary Azar will need to account for HHS’s role in implementing the Trump Administration’s disgraceful and cruel policy of family separation. This policy has caused so much pain and trauma for thousands of children and it’s clear that children are still wrongly being separated from their parents. Finally, Secretary Azar will also have to answer for HHS’s lack of cooperation with this Committee’s oversight requests… We are requesting important information that is critical to our ability to conduct oversight of this administration. HHS has been largely unresponsive to our requests.” Full Statement. Ranking Member Greg Walden (R-OR): “On a bipartisan basis, this committee has led the way in delivering meaningful health care reforms and policies for the American people. Last year we passed into law the SUPPORT for Patients and Communities Act, the most comprehensive bill to address a single drug crisis in our nation’s history… I would love to hear from you today on the department’s work to combat addiction and how we can continue to be partners in getting help to those in need… We also extended and funded a number of important public health programs, including the longest extension of the Children’s Health Insurance Program (CHIP)—10 years–in history and record funding for community health centers, which are both important for my Oregon district… We also need to continue our work on the cost of health care, from one end of the supply chain to the other. I appreciate your personal interest in moving aggressively to bring down the costs of prescription drugs down for patients… We have more work to do, and I look forward to continuing this committee’s partnership with HHS to rein in excessive costs for health care… I was also encouraged to see a focus in the President’s budget on moving towards value-based care. As a country, we must move into a health care system that pays for value and quality of care, but those changes will require major shifts in policy and reimbursement… The budget also provides new funding dedicated to the President’s goal of ending the HIV epidemic – a goal I think all of us on this committee share.” Full Statement. Alex Azar, Secretary, U.S. Department of Health and Human Services: “Since I testified before this committee in 2018, the HHS team has delivered impressive results. This past year saw HHS, the Department of Labor, and the Department of Treasury open up new affordable health coverage options, at the same time the Affordable Care Act (ACA) exchanges were stabilized, with the national average benchmark premium on HealthCare.gov dropping for the first time ever... Congress worked with the Administration to deliver new resources for fighting the opioid crisis, allowing HHS to make more than $2 billion in opioid-related grants to states, territories, tribes, and local communities in 2018. Prescriptions for medication-assisted treatment options and naloxone are up, while legal opioid prescribing is down. HHS also worked to bring down prescription drug prices, including by setting another record for most generic drug approvals by FDA in a fiscal year and working with Congress to ensure pharmacists can inform Americans about the lowest-cost prescription drug options. The President’s Fiscal Year (FY) 2020 Budget supports HHS’s continued work on these important goals by prioritizing key investments that help advance the Administration’s commitments to improve American health care, address the opioid crisis, lower the cost of drugs, and streamline federal programs, while reforming the Department’s programs to better serve the American people. The Budget proposes $87.1 billion in discretionary budget authority and $1.2 trillion in mandatory funding for HHS… With the largest non-defense discretionary appropriation of any cabinet agency in 2019, HHS must make large reductions in spending in order to stay within Congress’s caps, set a prudent fiscal course, and provide for other national priorities. This budget demonstrates that HHS can prioritize its important work within these constraints, and proposes measures to reform HHS programs while putting Americans’ health first.” Full Testimony. Rep. Anna Eshoo (D-CA) expressed concern over the administration’s efforts to cut premium tax credit funding, allow for the use of tax credits for “junk plans,” and revive the Graham-Cassidy proposal, as well as the refusal of the administration to support the ACA in the Texas lawsuit. She asked about pre-existing condition protections, to which Sec. Azar said 29 million people are priced out of care and access to other plans could help them. Regarding Medicare and Medicaid cuts, he said it is the result of pay cuts to providers and minimizing of abuses that will help consumers and not impact services. Regarding subsidies for “junk plans,” he said those plans are meant for people in transition and they have enhanced the disclosure. Rep. Michael Burgess (R-TX) asked about the 2.5 to 5 million people back in the workforce on employer insurance. Sec. Azar said access to employer health care is a great benefit and they’re trying to expand access to affordable coverage for others as well. When asked about a potential treatment for sickle cell disease, referencing a 60 minutes episode, he said they could be within five years of a cure and want to keep doing great work at the NIH to get there. Regarding the scalability of alternative payment models, Sec. Azar said they are working on models that are scalable and want insight from the Physician-focused Payment Model Technical Advisory Committee (PTAC) on how to do so. He also said he is carrying forward FDA Commissioner Gottlieb’s mission after he leaves. Rep. Frank Pallone (D-NJ) asked about the administration’s decision to not defend the ACA in the Texas vs. US lawsuit, noting that his staff requested comment from HHS multiple times regarding their interaction with the DOJ on the lawsuit. Sec. Azar said he met with their team yesterday to try to answer the requests as quickly as possible, and that staff is producing materials on a rolling basis. He committed to being responsive and said he wants to have a productive relationship with the committee. Rep. Greg Walden (R-OR) applauded the progress on generic drug approvals, to which Sec. Azar said they have shattered monthly and yearly approvals since 2017, resulting in $26 billion in savings for the American people. When asked about changes to Part D regarding protected classes, he said they want to protect beneficiaries while proposing some basic formulary management techniques like step therapy and prior authorization. They discussed the popularity of Medicare Advantage (MA) and how Medicare for All proposals would cause the elimination of those plans and potentially result in higher cost sharing. Rep. G.K. Butterfield (D-NC) said the proposal to block grant Medicaid would bypass Congress and threaten access to care. Sec. Azar said states are able to propose waivers along these lines and they would be assessed with Office of Management and Budget (OMB). When asked about capping Medicaid spending, he said it would depend on the waivers, and also said that the CPI in the budget is part of the savings as it does not keep pace with the cost of health care. Rep. Fred Upton (R-MI) asked for an update on 21st Century Cures, and Sec. Azar said the record number of drug approvals and savings were directly linked. Rep. Upton said he was alarmed by the cuts to the National Cancer Institute (NCI) and other areas of medical research despite the increase to childhood cancer research, and Sec. Azar said there was a proportionate cut that was necessary as one of the largest buckets of spending. He added that they also prioritized opioid funding including an additional $68 million from last year. Regarding the Office of Refugees and Resettlement (ORR), he said they requested $1.3 billion compared with $1 billion in FY 19, including the same $200 million in mandatory contingency funds, adding that the amount of children coming across the border is a huge burden. Rep. Doris Matsui (D-CA) said the budget guts Medicaid, provides less access to care, and targets the most vulnerable in communities by making massive cuts to Medicaid, a vital source of mental health and substance abuse treatment. Sec. Azar agreed that Medicaid is a critical tool to address substance abuse and mental health, stating that the proposed changes focus on those most in need, including a proposal to expand Medicaid to postpartum women suffering from substance abuse disorder (SUD). Rep. Matsui disagreed and also noted her concerns with step therapy. Rep. John Shimkus (R-IL) asked about antibiotic drug resistance. Sec. Azar discussed the Antimicrobial Resistance Challenge at the United Nations and their commitment around appropriate utilization, development, and “parking” of necessary antibiotics. When asked about alternative payment models in the MA world, he said we should think of MA as the leading edge of innovation and fee-for-service should follow, rather than the other way around. He also discussed Stark and anti-kickback laws, saying a revision is necessary for collaboration in the move to value. Rep. Kathy Castor (D-FL) asked why the administration continues to undermine the ACA’s consumer protections through expansion of STLDI and other rules. Sec. Azar said people should be made fully aware those plans allow for that type of discrimination, but that they are more affordable because of it. He added that no one should leave subsidized insurance to buy those plans. Rep. Castor asked why they sidestepped rulemaking with the 36-month extension, to which Sec. Azar said he doesn’t think they did. Rep. Brett Guthrie (R-KY) noted that STLDI plans were available under President Obama, then asked about progress on Comprehensive Opioid Recovery Centers (CORCs) implementation. Sec. Azar said he didn’t know but that all of HHS is engaged in addressing the opioid crisis. When asked about protections for pre-existing conditions, Sec. Azar said the budget mandates they continue with this protection and that the administration approved seven reinsurance waivers to help with pooling for those with expensive conditions. He added that premiums dropped for the first time and there was an increase in the number of plans this year, attributable to administration actions. Regarding Medicare for All bill implications, Sec. Azar said 174 million Americans insured through their employer would not have access to the same health insurance they do today. Rep. Eliot Engel (D-NY) said the tax bill led to exploding deficits and noted his concern with the budget’s 12% cuts to HHS, $1.5 trillion cuts to Medicaid and $500 billion in Medicare over 10 years. He said the HIV funding was modest while there were big cuts to global AIDS programs, along with cuts to other cancer programs, to which Sec. Azar said the cuts were a challenge and they did their best to prioritize. He asked for a guarantee that cutting hospital funding would not lead to more closures, to which Sec. Azar said it was part of the funding for Medicaid under the ACA. Rep. Morgan Griffith (R-VA) asked about the impact of socialized medicine on the number of providers that would leave the field. Sec. Azar said it could result in a two-tiered system where only people with money get access to the best specialists. Rep. Griffith noted his support for telemedicine as a way to increase access in rural areas and his concern with Direct and Indirect Remuneration (DIR) fees and competitive bidding in rural areas. Sec. Azar said they are phasing in the highest cost and volume items for the highest savings potential, adding that changes were made last year to account for rural impact. Rep. John Sarbanes (D-MD) said a big part of the opioid crisis is linked to pharmaceutical marketing, and asked how HHS will hold these companies accountable. Sec. Azar said they are aggressively working on it and that prescribing is down 22%, adding that the Department of Justice (DOJ) is going after those with illegal or unethical practices. When asked about standards of scientific evidence for new drugs, he said they usually do two double blind trials and have substantial evidence, to which Rep. Sarbanes said he is worried they are not rigorous enough regarding what is safe and not, considering what has happened with the opioid crisis. Rep. Gus Bilirakis (R-FL) said Medicare Part D plans compete against each other and come in under budget, noting that 80% of seniors in his district are on Part D or MA plans. When asked about proposals for Medicare to negotiate, Sec. Azar said they wouldn’t be able to get better deals absent creating a single formulary, but that has important implications for beneficiary choice. When asked how Medicare for All would impact these programs, he said they would likely go away and limit the amount of consumer choice and flexibility. Rep. Kurt Schrader (D-OR) expressed concerns with the budget’s cuts to the ACA and Medicaid, but said that there are some good ideas around drug pricing. When asked about the 180-day exclusivity for generics, Sec. Azar said there were five instances a year of blocking competition leading to a 12-month delay on average when companies did not get around to marketing the drug. “Parking” exclusivity, he said, can result from legitimate reasons or a deal with the manufacturer, noting they need to fix the clock issue to start as soon as the drug is available. Rep. Larry Buschon (R-IN) said constituents need relief from high premiums and noted his support for transparency in the 340B program, saying he is concerned with hospitals providing low levels of charity care in the program. Sec. Azar said the Health Resources and Services Administration (HRSA) needs authority for oversight and transparency and it could be useful for 340B hospitals to be mandated to report their savings and their uses. Rep. Ben Ray Lujan (D-NM) asked about the Secretary’s consultations with the DOJ in regards to the Texas ACA lawsuit. Sec. Azar said he is working to provide materials they have regarding analysis on DOJ interactions but that those discussions are highly privileged. Sec. Azar confirmed that he committed to upholding the ACA as part of his confirmation and said he is trying to make it work for the American people, adding that the President will not sign any legislation that does not include pre-existing condition protections. Rep. Susan Brooks (R-IN) asked about the Pandemic and All Hazards Preparedness Act, which has not yet been reauthorized. Sec. Azar said they are committed to protecting Americans along these lines and that the expiration of provisions endangers our security and ability to negotiate with private partners when there is a critical pandemic, including supporting a focus on child trauma. Rep. Joe Kennedy (D-MA) asked about an internal HHS memo on establishing a legal definition of sex, to which Sec. Azar said he is not going to comment but that Obama era regulations need updating after they were ruled invalid. Rep. Kennedy asked about the 20,000 people who lost Medicaid coverage in Arkansas after the imposition of work requirements and the proposal to extend work requirements nationally, to which Sec. Azar said he believes all able-bodied adults should work if they’re receiving this benefit. He added that they do not yet know why people have fallen off and they hope to harmonize the requirements across safety net programs. Rep. Markwayne Mullin (R-OK) said the work requirements only target able-bodied individuals and exempt pregnant women and those with young children, commending the Secretary for letting Arkansas do what they saw fit. He asked about 42 CFR Part 2, which was passed in the House last Congress, and Sec. Azar said he has heard concerns about the inability to see the whole medical picture for people with serious mental illness and addiction. He agreed to work with Congress to help confirm the 42 CFR Part 2 with HIPAA. Rep. Tony Cardenas (D-CA) asked about the policy of separating children from families and how children are protected from ill effects. Sec. Azar said they don’t make those decisions but that the Department of Homeland Security (DHS) turns them over to HHS, adding that they have internal standards once they get the children but would welcome help in ensuring they are improving the quality of care and evaluating mental health issues as best they can, also agreeing to send along information on the topic. Rep. Richard Hudson (R-NC) flagged a letter from him and colleagues regarding e-cigarettes and menthol. Sec. Azar said they are very concerned about the issue and proposals will be sent through the comment process, adding that e-cigarettes can be a helpful tool for adults to quit cigarettes but don’t want them to be an onramp for teenagers. Asked about the proposal for user fees, he said it would enable the FDA to build out a regulatory approval process. He agreed to get back in writing on ensuring access to HIV medications under the proposal to loosen rules around the six protected classes in Medicare. Rep. Peter Welch (D-VT) said he supported the pieces of the budget around drug pricing that would test closed formularies in Medicaid and enable Part D negotiating power for some Part B drugs, as well as opposing tactics to delay competition by manufacturers. Sec. Azar said they propose penalizing pay-for-delay deals and curbing REMS abuses, also cracking down on other manipulation like evergreening. Rep. Welch noted Vermont’s formulary that includes a failsafe when patients need a certain drug, and Sec. Azar said they need to create some power against manufacturers absent a formulary. Rep. Buddy Carter (R-GA) discussed the issue of PBMs as the middle man and abuses of that power, flagging that DIR fees are atrocious and he has heard from many small pharmacists that faced $300,000 or $500,000 a year in claw backs. He asked about the scoring included in the rebate proposal, to which Sec. Azar said many lack dynamic scoring however he believes that it will result in $29 billion in savings, driving down list prices and benefiting citizens. Rep. Carter added that the 340B program needs guardrails and Sec. Azar agreed. Rep. Raul Ruiz (D-CA) said the administration has undermined the ACA and the budget continues to impose barriers, including cutting Medicaid coverage. He asked about the Title X rule, saying it directly hurts health centers in his district that mostly provide prevention services, such as cancer screenings. Sec. Azar agreed that Title X is a critical funding and said they want to ensure its integrity, not having federal money subsidize those services. Rep. Ruiz said the funds do not subsidize abortions and added that the rule creates barriers for needed services. Rep. Greg Gianforte (R-MT) noted how rural Montana struggles with meth and opioid abuse, and asked about the focus on underserved communities through the rural community opioid response. Sec. Azar said the program is vital and 95 awards went to help support those needing additional infrastructure and expansion of medicated assisted treatment. When asked about suicide, Sec. Azar said they invested in suicide prevention and interactive approaches for mental illness. When asked about Health Savings Accounts (HSAs), Sec. Azar noted their proposal to expand access to all plans above 70% in actuarial value and expanded options in rural areas to help meet their needs. He also acknowledged they’re planning on a Food and Drug Administration (FDA) hearing on regulating CBD in April. Rep. Ann Kuster (D-NH) asked about the recent 1332 waiver guidance and need to provide comprehensive and affordable coverage, and asked if they would approve plans that raise costs and reduce coverage for pre-existing conditions. Sec. Azar said all plans would be assessed by HHS and they are trying to make options available to people, including through the new HRA regulation. He said they laid out a different way at looking at the “comprehensiveness” guardrail to allow for more flexibility for states. Rep. Kuster also asked about the $52 million in cuts to SAHMSA mental health programs and $31 million in cuts to other programs. Sec. Azar said there is $1.5 billion of mental health funding within SAHMSA and they could play games along those lines all day. When asked about cuts to the Office of National Drug Control Policy, he said the funding for those grants were moved. Rep. Billy Long (R-MO) said he is thankful for a fiscally responsible budget and asked about their strategy. Sec. Azar said they tried to set a budget within the caps and be responsible stewards of tax dollars while prioritizing direct service and state flexibility, along with other top priorities such as opioids. When asked about community health centers funding expiring on September 30, Sec. Azar said they are vital to SUD care and prevention, adding later that he is passionate about telehealth and wants the department to work on its expansion, as well as increasing the efficiency of the department. Rep. Robin Kelly (D-IL) noted the number of uninsured children has increased under Trump, and asked if they were included in cuts to Medicaid. Sec. Azar said they want to ensure access to Medicaid for low-income children and that the cuts should not impact children, but he has to check on the issue of work requirements. When asked about menthol cigarettes and their impact on African American youth, Sec. Azar said he shares her concern and is moving forward to gather public health information and build out solutions moving forward. Rep. Nanette Diaz Barragan (D-CA) asked about the homestead facility in Florida, and why they are running emergency facilities that are unlicensed when there hasn’t been a surge of children coming across the border. Sec. Azar said that while those facilities do not have to be licensed with the state they do have to follow ORR rules, and said they are in a crisis state. Rep. Diaz Barragan said there are reports of inhumane treatment, to which Sec. Azar disputed, adding that there are a high rate of unsubstantiated claims of abuse. Rep. Lisa Blunt Rochester (D-DE) said that groups such as The American College of Obstetricians and Gynecologists have visited with concerns about the budget, including cuts to the NIH, Medicare and Medicaid, and rollbacks to the ACA. She asked about the rule proposing changes to the formula upon which ACA subsidies are calculated, considerations around auto-enrollment, and enrollment outreach. Sec. Azar said that the new premium indexing could increase premiums for some individuals and said that the enrollment has been fairly consistent, adding that they are relying on private plans to engage in outreach, which he said has been successful. Rep. Bobby Rush (D-IL) noted the issue with STLDI plans and said he heard from one constituent who had their cancer claims denied because he has previous back pain that was related, noting they are not comprehensive but often have aggressive marketing. Sec. Azar said they have enhanced the warnings since the Obama administration. In a second round of questioning, committee members focused on the administration’s “Zero Tolerance” policy and HHS housing of children: Rep. Dianna DeGette (D-CO) asked if Secretary Azar was consulted prior to release of the zero tolerance policy, to which Sec. Azar said he was not, and would have potentially raised child welfare concerns. He said he spoke with the Secretary of Homeland Security and the White House following the announcement and noted that separations have always happened and they try to address concerns with child welfare when there are issues, including local officials prosecuting those cases when they arise. Rep. Brett Guthrie (R-KY) stressed that the decision to separate children is made by DHS and not HHS, asking about ORR’s process of reporting and investigating alleged sexual abuse. Sec. Azar said they take all allegations seriously and there have been 178 allegations of adult on child abuse, which must be reported within in four hours and are sent to a full-time sexual abuse coordinator and they receive reports on the case within 24 hours. He added that he was not aware of any HHS or ORR staff being involved in the allegations, but rather non-profit groups that run the facilities. In the most egregious case, he said, they shut down the facility, pulled children out, and revoked the license to operate. Rep. Janice Schakowsky (D-IL) said there was a tenfold increase in child separation, and Sec. Azar said he was not aware of that. When asked about deciding on the policy, he said he was not made aware before it was issued and he wishes there had been a better knowledge flow, leading them to scramble to try and reunify children with parents after it was implemented. Rep. Schakowsky likened the problem to state-sponsored child abuse and kidnapping, to which Sec. Azar said he will not stop advocating for child welfare. Rep. Greg Walden (R-OR) spoke about how it is not HHS who is making the separation decisions and said that there are 11,000 children in HHS care, seeing around 300 new children a day that are unaccompanied. Sec. Azar said they do as good a job as they can vetting people to place them with including background checks and other investigations, adding that they are provided free health care that includes a mental health screen within 24 hours and vaccinations, along with educational and other services. Rep. Frank Pallone (D-NJ) asked about lessons learned from the family separations policy and said he sent a letter to the HHS on the issue, to which he has received little substance in return. Sec. Azar said he is working on getting back to them and shares his concerns with child welfare. When asked if he would assure wholesale separations never happen again under his watch, Sec. Azar said he will always advocate for child welfare. Rep. Michael Burgess (R-TX) said he went down to one of the facilities with his democratic colleagues along with a separate visit to the Central American countries involved in the crisis, although democrats did not accompany him. He said many families borrow $6,000-$10,000 to make those journeys and asked why we would continue to provide a magnet for those families to send their children across the border. He added that accusations against ORR have been discredited and wildly misrepresented.
Document ID: 2019-0560 | |||||
