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Continuing Coverage of Senate Hearing to Confirm Tom Price. Aired 12:30-1p ET

Aired January 18, 2017 - 12:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[12:30:00] SEN. BALDWIN: This is about serious impacts for all of America.

Would you agree?

PRICE: I -- I think that the discussion about what our health policy for financing and delivery of health care to the American people is a very, very broad subject and we need to discuss...

BALDWIN: And if you repeal the Affordable Care Act, the impact is not narrowly confined to Medicaid and the individual market. It has impact on every American, Medicare too. Think of accountable care organizations where we're driving so much of our innovation. That's not confined to the individual market, in fact, it -- it impacts Medicare very, very significantly.

So, let me give one example. We in our office, when you visited, and thank you for your visit, we talked about the opioid epidemic. One of the significant issues is access to treatment to overcome an addiction. If the Affordable Care Act is repealed, there will no longer be a mandate for substance abuse treatment being covered. Is that something you agree with?

PRICE: Look, the opioid epidemic is -- is rampant and is harming families and communities all across this nation.

BALDWIN: Would you assure that treatment would be -- substance abuse treatment would be covered under a replacement plan that you would propose to Congress?

PRICE: I think it's absolutely vital that -- that substance abuse and other kinds of things would be able to be treated...

BALDWIN: So you would keep that protection of the Affordable Care Act?

PRICE: That's a legislative decision, but I look forward to working with you to make certain that we're insuring that individuals...

(CROSSTALK)

BALDWIN: ... coverage. I want to make sure I heard the exchange because it sounded to me like you're saying you think insurers are just going to continue to do it, so that there's no need for there to be an actual mandate saying they must. And mind you, with 5.7 million young people between the ages of 18 and

26 on their parent's health insurance, that's 5.7 million people who aren't in the individual market because they're in their first job after high school that doesn't have health insurance or in school with out -- so is it just a -- a wink and a promise or do you support having in law a mandate that 20 -- 18- through 25-year-olds be able to stay on their parent's health insurance?

PRICE: What -- what I have -- as I say, I think it's -- it's been baked into the -- the insurance programs that are out there right now. What -- what I absolutely committed to...

BALDWIN: But they could change their mind at any time.

PRICE: What I'm absolutely committed to is making certain that every single American has access to the kind of coverage that they want and has the financial feasibility to be able to purchase that coverage.

ALEXANDER: Thank you, Senator Baldwin.

Senator Young.

YOUNG: Dr. Price, good to see you here today.

PRICE: Thank you.

YOUNG: I've enjoyed our service together over the last six years in the House of Representatives, particularly the four years we spent on the Ways and Means Committee. And I had an opportunity not just to get to know you personally there, but to observe your -- your quite impressive skill set, your depth of knowledge in the area of health care and health policy, your commitment, more importantly, to seeking alternative perspectives to trying to identify where bipartisan consensus could be realized, and ultimately, forging consensus around some viable solutions.

The one that I find most notable is your success on the sustainable growth rate, which is something the members of this committee are familiar with, but it's a blunt instrument that was in place to control health care costs. And without your leadership over on the House side, I don't think we could have moved towards a more value based purchasing model. So, these are skill sets that will serve you well over at Health and Human Services, no doubt.

One area of the Affordable Care Act, speaking of bipartisanship, that members of my party, of your party have periodically and -- and quite vocally indicated their desire to repeal from time to time has been the Center for Medicare and Medicaid Innovation. And that's perhaps on account on the one-size-fits-all prescriptive and mandatory demonstrations that occurred in recent years, and you've already indicated that you oppose the mandatory nature of demonstration projects.

But I strongly believe, for one, that there's great value in innovating and experimenting across all layers of health care. Further, I think CMMI is and can continue to be a helpful laboratory for health care experimentation with respect to delivery models, payment models and -- and so forth, for Medicare, for Medicaid, for the Children's Health Insurance Program, perhaps other areas. Save taxpayer money, provide greater value, we see what doesn't work, we scale up what does work. For me, it's common sense. This is the way sort of scientists operate is -- is -- is they start with experiments and then they evaluate and then they scale up.

So I'd like to know your intentions, if you have strong convictions in this area. Do you intend to keep this innovation center or perhaps develop a new one, a variant of CMMI? Speak to this, please.

PRICE: Well, I appreciate that. And I -- I'm, as I mentioned, a strong advocate and supporter of innovation at every single level. It's only through innovation that we expand the possibilities for -- for -- especially in the area of health care, for increasing the quality of care.

I'm a strong proponent of innovation. CMMI entity, I believe has great possibility and great promise to be able to do things that will allow us to find ways in which we can -- we can change the -- the payment model, ways in which we're treating disease and -- and the like that will improve to the patient's benefit and I strongly support that. I have adamantly opposed the mandatory nature with which CMMI has approached some specific problems, and let me mention two in particular, if I may.

The first is -- is the -- is the Comprehensive Joint Replacement, the CJR program, which identified from -- from CMMI 67 or 68 geographic areas where if you were a patient and you received a lower extremity joint replacement for a variety of -- of problems, then it was dictated to your doctor what kind of prosthesis, what kind of surgical procedure your doctor could do for you, regardless of what's in your best interests.

Now, they may be aligned, but they may not be aligned, and if they're not aligned, then -- then -- then your physician is incumbent upon doing what the government says to do.

The other area that I think was even more egregious was covering 75 percent of the nation in the Medicare Part B drug demonstration model. In fact, not a demonstration model if it's 75 percent of -- of the -- of the country, and that -- that would stipulate what kind of medications your physicians could use in an inpatient setting in a mandatory way. The -- the -- the problem that I've got with that is that really is an experiment, it's a demonstration to see whether or not it works.

And in every single experiment, health care experiment or medical experiment or scientific experiment that deals with people, real people, we -- we demand, we require that there be informed consent for the patient to participate in that -- in that experiment. And so you say to the patient, we're -- we're trying this to see if it works better. You -- you -- we'd love to have you join us. We think it may inure to your benefit and the benefit of more individuals across this land. But if you -- if you don't want to do that, you don't have to. The federal government doesn't do that. They -- they require

individuals to participate, and often times, I suspect most often, the patient doesn't even know that it's an experiment that's going on. So if either of these models were put in a small area, a pilot project somewhere, and we saw that in fact they worked, then as you say, then you scale them up.

YOUNG: I thank you for the fulsome response and the rationale behind how you've arrived at that position. I look forward to working with you to -- to advance the next model of CMMI, whatever exactly it might look like.

I'd be remiss in my remaining 90 seconds if I didn't mention Indiana's, what we call Healthy Indiana Plan 2.0. Our Vice President- elect Pence showed a lot of leadership here, worked with our incoming CMS Administrator Seema Verma to develop a model for Medicaid, which is unique to the state of Indiana. It encourages recipients of -- of Medicare dollars to get some ownership over their health. It uses private market insurance concepts to prepare Hoosiers for more self- sufficiency.

I -- I happen to believe that it -- it will be replicated in other states if -- if we can accommodate that as -- as we continue to work on -- on new health care legislation. But HIP 2.0 is an important proof of concept that Medicaid can be more efficient than a one-size- fits-all approach, and I just need some assurance from you that you will, your lode star will be state flexibility and innovation in the Medicaid space so we can continue to accommodate plans like HIP 2.0 as opposed to a one-size-fits-all approach.

PRICE: I think you're absolutely right. The -- the Medicaid program is one where the -- where the states know best how to care for in the best way their -- their -- their Medicaid population, and the greatest amount of flexibility that we can give, I think, for states to enact those kinds of programs. What Indiana's done is really a -- a best practice, I think, for many other states to -- to -- to follow. And so I look forward to working with you.

YOUNG: Likewise.

ALEXANDER: Thank you, Senator Young.

Senator Murphy.

MURPHY: Thank you, Mr. Chairman.

Good to see you again, Representative Price.

PRICE: Thank you, Senator (ph).

MURPHY: I hope you can understand our frustration around trying to divine the nature of this replacement plan. We hear you and President Trump praise all of these aspects of the Affordable Care Act, and lay out goals that sound eerily familiar to what we've been living with for the last six years. You've said that you don't want there to be a gap between the repeal

and the replacement; that at least as many people will have coverage with the goal of more people having coverage; sick people won't face discrimination; young adults will get to stay on their plans until age 26.

And yet we don't get any specifics as to how that's going to occur. It seems as if you and the president-elect want to do everything the Affordable Care Act does, but just do it in a totally different way.

And so I'm going to kind of give up on trying to get at the specifics of this secret replacement plan. And maybe ask you about metrics -- about how we will measure whether what you propose as a replacement is meeting your benchmarks. For instance, the number of people covered; the cost of health care to individuals; the amount of money out of pocket that people have to pay.

When you're at the end of your four years, how will you look back on this replacement plan to measure its success? And to the extent you can give me specifics as to how you're going to measure the success of this replacement, I'd appreciate it.

PRICE: Well, I thank you. And you identify some very specific areas that I think we need to be looking from a metrics standpoint.

What -- what is the cost? Is the out-of-pocket cost for individuals higher or lower than it was? Right now, I would suggest that the cost is higher than it was when the program began for many of those individuals in the individual and small group market. They were promised that the premiums would come down. In fact, the premiums have gone up.

They were promised that they'd have access to their doctor. In fact, many of them have not had access to their doctor.

MURPHY: I'm talking about from where we are today. PRICE: So, from where we are today, if you look at the things that many of us believe have been harmed by the Affordable Care Act, I hope that we're able to turn that around and decrease the out-of- pocket costs for individuals; increase choices for individuals; increase access to the doctors and the providers that the patients wants, as opposed to what's happened over the past few years.

MURPHY: Increase the number of people who have insurance.

PRICE: Increase the -- absolutely. We've still -- as I mentioned over here, we still have 20 million individuals without coverage. I think as policy-makers, it's incumbent upon us to say what can we do to increase that coverage. But the goal is to make certain that every single American has that access to coverage that they want for themselves and for their families.

MURPHY: I'll just note that those are two different things -- having coverage and having access to coverage. And I think we've gone around on that a number of times. So, I want to come back to this question of some of the conflict of interest issues that have been raised. And I raise it because I think there's a great concern on behalf of the American people that this whole administration is starting to look like a bit of a get- rich- quick scheme; that we have a president who won't divest himself from his businesses and could potentially get rich off of them.

We had a secretary of education last night who has big investments in the education space; a secretary of labor who could gut work protections and make a lot of money for his industry.

And so I want to walk you through another set of facts, another timeline regarding some of your interactions with the health care industry, and get your reaction to it.

On March 8th, 2016, earlier last year, CMS announced a demonstration project to lower Medicare reimbursements for Part D drugs. That would have decreased incentives for physicians to prescribe expensive brand- name medications, and drug companies that were affected by this immediately organized a resistance campaign.

Two days later, you announced your opposition to this demonstration project. One week later, you invested as much as $90,000 in a total of six pharmaceutical companies -- not five, not seven, six. All six, amazingly, made drugs that would have been impacted by this demonstration project. There are a lot of companies -- drug companies that wouldn't have been affected, but you didn't invest in any of those. You invested in six specific companies that would be harmed by the demonstration project.

You submitted financial disclosures indicating you knew that you owned these stocks. And then two weeks after that, you became the leader in the United States Congress in opposition to this demonstration project. You led a letter with 242 members of Congress opposing that demo. I've led those letters. I know that's not easy. That takes a lot of work to get 242 people to sign on. PRICE: That's good staff work, Senator.

MURPHY: And then guess what? Within two weeks of you taking the lead on opposition to that demonstration project, the stock prices for four of those six companies went up. You didn't have to buy those stocks, knowing that you were going to take a leadership role in the effort to inflate their value.

And so as the American public takes a look at the sequence of events, tell me how it can possibly be OK that you were championing positions on health care issues that have the effect of increasing your own personal wealth? That's a damning timeline, Representative Price.

PRICE: Well, my opposition to having the federal government dictate what drugs are available to patients is longstanding. It goes back years and years. The fact of the matter is I don't know whether you were here before, but the fact of the matter is that I didn't know any of those trades were being made. I have a directed account broker, directed account. All of those trades were made without my knowledge, as is set up. And individuals on this panel have the same kind of accounts.

The reason that you know about them is because I appropriately reported them in an above-board and ethical and appropriate manner as required by the House of Representatives.

MURPHY: But you -- but do you direct your broker around ethical guidelines? Do you tell him, for instance, not to invest in companies that are directly connected to your advocacy? Because it seems like a great deal as a broker. He can just sit back, take a look at...

PRICE: She.

MURPHY: ... the positions that you're taking.

PRICE: She can sit back.

MURPHY: She can sit back, in this case, look at the legislative positions you're taking, and invest in companies that she thinks are going to increase in value based on your legislative activities. And you can claim separation from that because you didn't have a conversation.

PRICE: Well, that's a nefarious arrangement that I'm really astounded by. The fact of the matter is that I have had no conversations with my broker about any political activity at all, other than her -- other than her congratulating me on my election.

MURPHY: But why wouldn't you at least tell her, "Hey, listen, stay clear of any companies that are directly affected by my legislative work"?

PRICE: Because the agreement that we have is that she'd provide a diversified portfolio, which is exactly what virtually everyone of you have in your investment opportunities, and make certain that in order to protect one's assets, that there's a diversified arrangement for purchase of stocks. I knew nothing about those purchases.

MURPHY: But you couldn't have a diversified portfolio while staying clear of the six companies that were directly affected by your work on this issue?

PRICE: As I said, I didn't have any knowledge of those purchases.

MURPHY: Thank you, Mr. Chairman.

ALEXANDER: Thank you, Senator Murphy.

Senator Murkowski?

MURKOWSKI: Thank you, Mr. Chairman.

There is added benefit to being one of the last in the chain here to ask questions, because it certainly gives me a clear idea of where you're coming from, Congressman, on some of these issues that are so important to us. We haven't had as much conversation about the rural aspects of health care which, of course, are very important to me. We had a chance last night to hear from the nominee for education. And I pointed out to her, as I have pointed out to you, that Alaska is a little bit unique. Sometimes it's really unique, and the challenges that we face allow us to be somewhat innovative. But we need some flexibility in order to implement some of the innovations.

I had a chance to sit with a group of Alaskans on Saturday in Anchorage. They were from the -- everyone from the director of the Division of Insurance, to our commissioner of health and social services, a representative of the only provider on the individual market, representatives from small, rural hospitals, doctors. It was representatives from the tribal health organizations.

It was a good mix of individuals. Obviously, we got different views and opinions about where we go with this replacement of the ACA and what that would need to look like to help address the needs and issues in a very rural, very frontier, very high-cost -- the highest- cost insurance, the highest-cost health care costs. We're down to one provider on the individual market. So we've got all the demographics that would tell you that this is -- this is a difficult place to be operating right now.

MURKOWSKI: We, as a state, moved forward with Medicaid expansion a couple of years ago. There's some 27,000 Alaskans that now have coverage that didn't see that before.

There was also good discussion about making sure that we're able to retain the protections for Alaska natives that we saw under the Indian Health Care Reorganization Act that came as part of the ACA, so recognizing that there are certain exemptions that were included as part of the ACA, exemptions for Medicaid cost-sharing provisions, 100 percent federal match for American Indians and Alaskan Native Medicaid enrollees when they receive their care through -- through an IHS facility, including the tribally operating facilities.

Again, we have seen some -- some I think very extraordinary collaboration that has gone on between our -- our entities with -- with our tribes, our tribal health organizations that have allowed for increased efficiency, improved health access. And so a great deal of the discussion was focused on what will happen? What will happen to those who have gained access through Medicaid expansion? And what can we do to ensure that coverage options are provided for those in this -- in this new era of -- of health care reform?

And then a further question to that, is should a block grant approach be considered? What efforts, then, would be made to ensure that this -- this very unique trust responsibility for American Indians and Alaskan Natives are -- are continued to be fulfilled?

These were concerns that were raised in this meeting and -- and folks had hoped that I'd have an opportunity to ask you publicly.

PRICE: Yeah, thanks so much, Senator, I appreciate it. And we had a wonderful discussion about Alaska and I learned -- learned much about -- about your state, your glorious state. The Medicaid system is one that is absolutely imperative and vital for -- for members of our population who -- who receive their care through -- through the Medicaid program. And it's a federal state partnership, as you well know. And it's one that we absolutely must ensure that individuals don't fall through the cracks in whatever transition occurs.

So whether it's retaining the same level of -- of Medicaid participation or whether it's providing an option for something else that allows them coverage that suits their needs, we are -- we are committed and adamant that that coverage be able to be continued. So they have -- they have our assurance that that -- that we will work with you to make certain that that happens.

MURKOWSKI: What about the concerns that were expressed by the tribal health organizations that perhaps, if there is a block grant approach that is utilized, that that could impact some of the -- the assurances and the benefits that the tribal health organizations have seen?

PRICE: Yeah, and -- and this is -- this is in its early stage, obviously. And -- and it's a legislative decision that occurs, it's not a department decision that occurs, a legislative decision. But we would look forward to working with you to, again, ensure the individuals, especially in the Indian Health Service, which have had some real challenges.

And -- and we need to make certain that -- that the metrics, as was mentioned over here, the metrics that we're looking at are actually clinical correlative metrics, that we're looking at what actually makes a difference to the people receiving the care. And -- and it's a -- it's one of those promises that we have, to make certain that the Indian Health Service works. And -- and I think we can do a lot better at that.

MURKOWSKI: Well, I look forward to more conversation on that.

Let me ask about some of the efforts that Alaska has made, I think relatively innovative as we have attempt to stabilize our individual health care market. The state moved forward with some reforms. They created a reinsurance program for high-cost, high-risk individuals. We've submitted a 1332 State Innovation Waiver. And again, all with the hope that we're going to be able to somehow provide for some level of stabilization.

What sort of considerations to federal support for high-risk pools or state-based reinsurance programs would you consider?

PRICE: I think the whole array of -- of opportunities that are available to, again, make certain that nobody falls through the cracks. The 1332 waiver program is one that's just beginning, but it's one that I think holds significant promise in making certain that we're able to ensure that things like reinsurance, things like high- risk pools, make it so that individuals do not lose their opportunity to gain access to the highest quality care.

MURKOWSKI: Good. And then finally, on our -- our small rural hospitals, one of the concerns that I heard repeatedly was the level of regulatory burden that particularly our smaller rural hospitals are -- are just feeling stifled by.

In fact, some of the innovative things that one of our hospitals down on the -- on the Kenai Peninsula is looking at advancing. They kind of feel that they're -- that it's -- it's too risky right now to -- to move forward with any level of innovation that they had hoped to -- to take on because they're facing some of the regulatory burden, but also, the uncertainty that they are in right now.

MURKOWSKI: You can do things administratively early on, should you be confirmed to this position. Have you looked to what regulatory issues could be addressed early on that could help reduce some of the regulatory burden, particularly to some of these small rural hospitals?

PRICE: Not specifically, Senator, but I share with you the concern that you have about the -- the -- the burden of regulatory guidelines and regulatory schemes that come out of Washington, D.C., especially for the rural area.

And it's not just the hospital, it's the providers and the docs who are providing the care. They -- they -- most of the folks in the rural area tend not to have any margin at all to be able to cover the cost of this regulation. And I've heard from more than -- than -- than a few physicians and other providers who because of the regulatory schemes that have come forward, have said they just can't do it anymore. They're having to close their doors.

And -- and -- and Indian Health Services, one of them where -- where -- they're -- they're having a real challenges in terms of being able to provide the services. And so, when that happens, then those individuals have no care and -- and that's unacceptable to me.

MURKOWSKI: Thank you. I look forward to working with you on that.

Thank you.

PRICE: Thank you.

ALEXANDER: Thank you, Senator Murkowski.

I have remaining Senator Warren, Hassan and Kaine on the Democratic side; Senator Scott, Cassidy, Burr and Senator Isakson has three minutes remaining.

Senator Warren.

WARREN: Thank you, Mr. Chairman.

Congressman Price, more than 100 million Americans now receive their healthcare through Medicare and Medicaid programs. These are seniors, people with disabilities, middle-class families who have parents in nursing homes, countless numbers of young children and they all benefit from these programs. So I want to understand the changes to Medicare and Medicaid that you have already proposed.

The budget that you recently authored as chair of the House Budget Committee would have cut spending on Medicare by $449 billion over the next decade. Is that right?

PRICE: I don't have the numbers right in front of me, but what we're trying...

WARREN: I have the numbers.

PRICE: Well, then I assume you're correct.

WARREN: All right.

PRICE: But we're...

WARREN: So you said you'd cut it by 400 -- Medicare -- cut Medicare by $449 billion. Your FY '17 budget proposal also would have cut Medicaid funding that goes to the state governments by more than $1 trillion. Is that correct?

PRICE: I think, Senator, the -- the -- the metrics that we use for the success of these programs...

(CROSSTALK)

WARREN: ... dollars from Medicaid?

PRICE: What we believe is appropriate is to...

WARREN: Do you want me to read you the number out of this?

PRICE: No, I'm sure you're correct. What we believe is appropriate is to make certain that the individuals receiving the care are actually receiving care.

WARREN: I understand why you think you're right to cut it. I'm just asking the question. Did you propose to cut more than $1 trillion out of Medicaid over the next 10 years?

PRICE: You have the numbers before you.

WARREN: Is that a yes?

PRICE: You have the numbers before you.

WARREN: I'll take it as a yes.

So, as I'm sure you're aware, during his campaign for president, President-elect Trump was very clear about his views on Medicare and Medicaid. As Senator Sanders has quoted extensively, "President-elect Trump said I am not going to cut Medicare or Medicaid." Now, when President-elect Trump said I am not going to cut Medicare or Medicaid, do you believe he was telling the truth?

PRICE: I believe so, yes. WARREN: Yeah, OK. Given your record of proposing massive cuts to these programs, along

with several other members of this committee, I sent the president- elect a letter in December asking him to clarify his position and he hasn't responded yet. So I was hoping you could clear this up. Can you guarantee to this committee that you will safeguard President- elect Trump's promise and while you are HHS secretary, you will not use your administrative authority to carry out a single dollar of cuts to Medicare or Medicaid eligibility or benefits?

PRICE: What -- what the questions presumes is that -- that money is the metric. In my belief...

WARREN: I am asking about the money.

PRICE: ... from a scientific standpoint, if patients aren't receiving care, even though we're providing the resources, then it doesn't work for patients.

WARREN: Please, I'm sorry to interrupt, but we're very limited on time. The metric is money. And the quote from the president-elect of the United States was not a long discourse on this. He said he would not cut dollars from this program. So that's the question I'm asking you. Can you assure this committee that you will not cut one dollar from either Medicare or Medicaid, should you be confirmed to this position?

PRICE: Senator, I believe that the metric ought to be the care that the patients are receiving.