tv Politics and Public Policy Today CSPAN May 27, 2016 11:00am-1:01pm EDT
third, the fcc's proposal may signal the end for ad-based discounts on online services. the agency put in its crosshairs free services in exchange for information as well as programs that offer consumers discounts on the broadband service in exchange for consent to use web browsing data to tailor a consumer's ads. i don't see how denying consumers such choices is in their interest. finally, everyone in the online ecosystem should recognize that the fcc's decision to target isps is a calculated political choice. in crafting this online privacy regulation, the agency relied on section 706 of the telecommunications act. under the majority's reading of that section, the agency has a power to take practically any action it believes necessary to break down barriers to broadband deployment and adoption, including regulating edge providers. and to be clear, i don't support the majority's reading. but regulating the privacy market practices of isps and
only isps is like eating half the meal. at some point, the fcc will want to come back to the table. chairman flake, ranking member franken, members of the subcommittee, thank you once again for holding this hearing. looking forward to answering your questions and work with you and your staff in the time to come. >> commissioner pai, thank you. commissioner ramirez. >> chairman flake, ranking member franken and members of the subcommittee, i'm pleased to appear before you today with my colleague commissioner maureen ohlhausen and also alongside chairman wheeler and commissioner pai. today we face new challenges in protecting consumer privacy. with every tap of a smartphone, website search or online post, data is being collected about consumers. while uses of data can offer tremendous benefits to consumers, the increasing ubiquitous collection and use of data is largely invisible and becoming ever more difficult for consumers to control.
studies show that consumers care about privacy and want more control over their personal information. in a recent survey by the pew research center, 91% of those surveyed said that they feel they have lost control over how their personal information is collected and used by companies. i think it's vital that consumers have control over the collection and use of their personal information and that this information is protected appropriately. over the last several decades the ftc has undertaken numerous law enforcement policy and education initiatives to address consumer privacy and ensure that consumer information is adequately protected. the commission has used its primary authority under the ftc act to take enforcement action against companies that have engaged in unfair or deceptive practices involving the privacy and security of consumer information. the ftc also enforces sector-specific statutes that
protect health, credit, financial, and children's information. our enforcement actions address a wide range of practices including deceptive claims about how companies collect, share, and use personal information. the failure to provide reasonable security for consumers' personal information and violations of do not call and other telemarketing rules. our enforcement actions send an important message to companies about the need to protect consumers' privacy and safeguard their data in both the physical and digital worlds. the ftc has also pursued numerous policy initiatives to enhance consumer privacy. for instance, the ftc has hosted workshops to examine the privacy and security implications of emerging technologies and business models, including comprehensive tracking by companies across the internet ecosystem, big data, the internet of things and cross-device tracking.
we've also issued a number of reports recommending best practices that we encourage companies to adopt. much of our policy work today builds on recommendations from the commission's 2012 privacy report, which sets forth key privacy principles that we believe ought to apply across diverse technologies and business models. in that report we urged companies to be more transparent about their collection and use of data, to use privacy by design and implement privacy and security protections at the outset of product development. and to provide consumers with simple and clear ways to exercise choice over the collection and use of their data. the ftc has applied these principles to a broad array of emerging technologies and business practices, including the internet of things, facial recognition, and data brokers' practices. given the breadth of issues the ftc address, we frequently cooperate with other federal and state agencies.
we have an extensive history of cooperation with the federal communications commission, including in connection with the enforcement of the do not call rule and efforts to stop unauthorized charges on mobile phones. in 2014, for example, working closely with the fcc and state authorities, we entered into two important mobile crowding settlements with at&t and t-mobile that resulted in hundreds of millions of dollars in consumer re-dress. last year, we formalized our collaboration with the fcc to formalize a memorandum of understanding to facilitate coordination. and officials announced coordinated studies of security in the ecosystem. in our study we seek to learn how mobile device manufacturers and operating systems provide security updates to address vulnerabilities. the fcc in turn will examine common carriers' policies regarding mobile device security updates. our goal in working together is to use our complementary expertise and authority to protect consumers as effectively
and efficiently as possible, avoid duplication and promote consistency. i commend the fcc for focusing on the important issue of consumer privacy. the ftc is carefully considering the fcc's proposed rules governing the privacy of consumer information collected by broadband internet access service providers, and we do intend to file a comment. in closing i want to reiterate the ftc's commitment to protecting the privacy of consumers' data. we continue to look forward to working with the fcc and the subcommittee on this important issue. thank you. >> thank you, chairman ramirez. commissioner ohlhausen. >> chairman flake, ranking member franken, members of the subcommittee, thank you for this opportunity to appear before you today with my ftc and fcc colleagues. we're here because of a side effect of the fcc's open internet order which reclassified broadband as a common carrier service. the ftc act has a common carrier exception, and the fcc's order thus halted my agency's decades-long bipartisan efforts to protect consumers of internet
service. stepping into the gap the order created the fcc now proposes to regulate broadband isp privacy practices in a manner different from and more restrictive than the privacy framework the ftc has long applied to the entire internet ecosystem, which includes social networks, search engines, ad networks, online retailers, mobile apps, mobile handsets and isps. as our written testimony details, the ftc is the primary u.s. privacy and data protection agency and probably the most active enforcer of privacy laws in the world. we've brought hundreds of privacy and data security related cases in all segments of the internet ecosystem including against isps and large internet companies. in my brief time i want to highlight two qualities of the ftc's privacy approach that make it particularly effective. first the ftc seeks to protect consumers' particular privacy preferences.
in our experience we show that consumers differ in how they weigh privacy concerns about their sensitive and nonsensitive information and other important values such as variety, convenience, and cost. thus it is vital to calibrate opt-in, opt-out requirements to reflect general consumer preferences about particular types of information. so for example, requiring opt-in consent for nonsensitive information when most consumers would prefer a p simple notice or opt-out choice adds cost and inconvenience without benefits for the majority of consumers. to match consumers' privacy preferences the ftc takes a two-tiered approach. in some areas consumer preferences are nearly uniform. for example, consumers generally want to be asked for permission to use their sensitive personally identifiable information such as medical information or real-time location data and information about children.
without consent uses of such sensitive personal information are likely to cause a substantial unavoidable consumer harm that isn't outweighed by benefits to competition or consumers. and thus be unfair under section 5 of the ftc act. therefore the ftc's unfairness authority establishes a privacy baseline for most practices -- for practices that most consumers agree require consent. and accordingly, we've brought cases when companies failed to obtain consent for using consumer sensitive information. for many other data practices such as targeted advertising based on less sensitive information consumer preferences are not uniform. in fact, they vary widely. in these situations companies can and do offer a variety of choices to satisfy these varying precedences. using our deception authority we bring a case when a company makes and then breaks a privacy promise to a consumer that materially affects that consumer's decisions.
this approach promotes an honest marketplace with a wide range of consumer privacy practices. the second quality of the ftc's privacy work that i'd like to highlight is our case by case enforcement. some criticize this approach because we've not established prescriptive rules. but i believe the ftc's leadership is a result and not in spite of our case by case privacy approach. investigating and pursuing hundreds of cases has given the ftc an unparalleled hands-on understanding of privacy problems. our cases test our principles against real facts. our approach allows us to adapt to evolving technologies and changing business models. in our cases we've studied how consumers react to specific privacy promises and practices and in each of our investigations we've evaluated the actual or potential harm to consumers of a company's practices and the benefits if any.
the ftc's privacy framework has been the case for decades. technology neutral approach respects references. thus, i believe our approach provides an excellent model for protecting privacy in the least restrictive or burdensome way. thank you and i look forward to your questionsism >> chairman wheeler, a couple of questions about the scope of the authority. if you can answer yes or no if possible. does the fcc have the authority to enact the rules under section 706 of the 1996 act? >> we are asserting the rules under title two.
section 706 is something we asked questions about in the proceeding itself, but this is a title two proceeding. >> under 706. >> we are asking questions about it. it has a bearing on this. but we are doing this under section 222 of title two. >> does 706 of the act provide the fcc with the authority to impose these rules on edge providers? >> we have said repeatedly we do not believe that or intend to assert jurisdiction over the providers. >> based on your understanding of the position, do you agree? >> i do not. while the intention might be not to apply at this time, the virtual cycle theory that the fcc relied on and in the current
notice, it's elastic enough within the scope of privacy regulations. >> thank you. >> gentlemen, in his testimony, he stated that you testified before congress that because consumers deserve a uniform expectations of privacy that the fcc would not be regulating the edge providers differently than isps. is this proposed rule consistent with that statement? >> as the commissioner reported, i said we will not be regulating edge providers. the expression different from the network is an issue that we are -- today that what is being sought to be done today is to change the nature of the role of
the network to be one that is similar to an edge provider. that's where we draw the line. american consumers for decades have expected that because of an fcc rule that the information they give to the network is their information, not the network's information. and that ought to continue in this environment as well and know we do not intend to regulate the edge. i find myself in a fascinating position with my colleague here that he's now the expansive interpreter of the statute and i'm the conservative interpreter of the statute. we do not intend to regulate the edge. >> do you have any thoughts to that? >> i think the chairman's change
last november was telling. do consumers have a uniform expectation of privacy no matter what they're doing in the online eco system. i agree with the chairman, at the time was yes. that's why the fcc would not adopt a different approach. the fcc's approach from march of this year was dramatically different. singling out isp's for unique and intrusive privacy regulations. i think is obviously a betrayal of the commitment. fundamentally, it doesn't recognize what the white house recognized in the 2012 privacy report when it said it was critical for privacy regulation to be technologically neutral and reflect a consistent set of consumer expectations. >> if i take my phone into my home, say i flown home to air arizona and turn the wireless off i get home and forget to turn wireless back on.
or an hour later, i turn the wireless on so i'm covered by broadband part of the time and edge provider cellular service the other, am i regulated differently depending on when i turn my wireless on and off? commissioner pai? >> certainly the access to information that's both isp's and edge providers would have would vary dramatically. if you took your smartphone home and logged on to your wi-fi network, took it on the road and were connect today a cell tower on the way to the senate. if you're in the senate you're connect today the wi-fi network. ft you went to a coffee shop you may be using multiple isp's over different platforms. the one entity that would have access to the information, it would be the edge provider. i've argued and why president
obama's counsel argued that isp's have a small and diminishing access to information consumers have. >> let me answer your question specifically. you deserve an answer. one, when you turn your phone on to be a phone, it is under the telephone aspects of section 222 of the communications act. and you have privacy rights and expectations. the question is, why is it that the same device in your hand when you then say, okay, i'm going to go to the internet, sorry, all that information doesn't belong to you anymore, it belongs to the network. that's the point that we're getting at here. you are spot on. when you have a device, one function you have privacy protection, the other function you don't. all we're saying is there needs
to be a equivalency between those two. >> thank you, i'll follow up on this in my questions later. i'm out of time. >> yeah. i just want to clarify this, it seems like there may be a different interpretation of your answer. my understanding is that the question you answered in which the commissioner pai quoted you was you were asked that in an ideal world would consumers have uniform expectation of privacy in which you said yes, but immediately after they don't have jurisdiction over edge providers and that they are different from isp's. >> thank you sir, that is correct. you've put it in the full context. >> senator, i have the transcript i'd be happy to enter
into the record. there's no mention about a lack of jurisdiction in response to congressman's long question. >> it's not up to me. >> we're stipulating here that we don't have -- we are not exercising this jurisdiction. >> let me ask about that. this is about the jurisdiction under title ii? >> correct. >> all right. that's the issue here. so let me ask about sort of the distinction here. so basically the argument that you're making commissioner pai and inferring, commissioner ohlhausen that you don't want these privacy safeguards for isp's, or you want lesser safeguards for isp's, or you
want more for edge providers? i'm a little confused about what your goal is here. i think that consumers have basic privacy rights. and which direction are you going here? >> senator, you point out some very interesting points that i think raise -- >> thank you. i always like compliments from the witnesses. >> first of all, is there a consistent approach across the internet. will a consumer who is engaged in something of a seamless transaction who isn't seeing these different parts understand what the privacy protections are for this part of their message or that part if they opt out of targeted advertising, will they still get targeted advertising through their browser or through the site, things like that. there's a value to consistency
having a consistent approach between the ftc and fcc. because the fcc is now overseeing isp's. the second question is, is that line being between in the right place. based on the ftc's long approach in this area. what we've determined is that opt in consent is appropriate and a good idea for sensitive information. but then for non-sensitive information, when used for things like targeted advertising an opt out approach is more consistent with consumer -- >> i understood that from your testimony. >> yes. >> my question is, are you saying that you want -- the question here is because of the way the rule is written now, and it's out for comment, obviously, is that isp's, because they're
common carriers under title ii are regulated the same way phones are. that's what was -- chairman wheeler's testimony. and you're saying and commissioner pai seems to be saying you want this to be consistent. so my question is, do you want the isp's to have less regulation in terms of privacy or do you want the others, the edge providers to have more? >> what i would say is based on the research that we've done and the approaches that we've taken in this area, that it would be a slightly different standard based on the type of information. whether it's -- >> okay i god it -- >> sensitive information or not.
>> let me hear from commissioner pai and i'm sure we'll continue. >> my position is simple. i would association myself with her in full. my goal is to return to the light turn framework the ftc applies over the eco system. the white house said in 2012 the key is to provide a level playing field for companies and a consistent set of expectations for consumers. the economy we have is due in part that we relied exclusively on the privacy expertise of the ftc developed which was tailored to consumer preferences. that's better way to go than the selective approach the fcc is proposing to do. >> so i didn't quite get an answer to my question, but i think that was closer. if i interpreted it right. i'm over my time and we'll come back for another round, i'm sure. thank you, mr. chairman. >> thank you. senator lee.
>> thanks to all of you for being here today. commissioner, i'd like to start with you, the fcc's privacy proposal would leave the regulation of edge providers like google and like yahoo and facebook to your agency. the ftc's approach to privacy monitoring has been in place for years and was applied to isp's before the fcc declared they were common carriers. do you think the ftc's regime has worked to compel providers to protect privacy interests? do you think they've done an adequate job of that? >> i do think the ftc has been very effective. we've had a long history of bipartisan support. we've brought, you know, well over 100 cases in this area. we've put some of the biggest players, you know, under order to the agency. so i think we have, you know, been effective in this space.
>> do you see any reason that isp's in particular need to be or should be held to a higher regulatory standard? as compared to other internet companies that participate in the consumer data market? >> well, going back to our 2012 report, which others have mentioned, what we said in that report is to the extent that large platforms such as isp's. but we included operating systems, browsers and social media, seek to comprehensively track consumers' online activities that might rise heightened privacy concerns. we had a work shop on that issue. i would say it's not unique to isp's. >> okay. okay. you see some distinction there, but not necessarily one that should make a difference? >> right. in my view, it goes back to what type of information do they have about consumers.
is it sensitive information, or is it non-sensitive information and how are they using it. >> right. right. commissioner wheeler, it's been brought to my attention that a letter that was sent to you recently regarding potentially thousands of comments that have been filed with respect to your agency's privacy proposal, that those have been submitted and they appear to be missing from the public document. this letter contends more than 2,200 comments have been submitted since april 26th through your online commenting platform. as of tuesday evening, this docket showed only 26 filings. 26 filings as compared to 2,200 comments submitted. now, i'd like to submit that letter for the record. >> without objection. >> thank you. mr. wheeler, can you explain why these comments have not appeared
on the public docket in a timely manner? >> yes, sir. my understanding is that there are some software glitch with the group that was downloading these documents en masse and there was something in the software that they were using to download that did something strange to our system. but that we are in the process of remedying this so in fact they will be all online. >> just a glitch. it's a glitch that you're working on? >> yes, sir. >> a glitch you're willing to commit to insuring -- to fishing to insure they get posted s? >> yes, sir. >> commissioner wheeler, you have a parallel regulatory action pending as it relates to set top boxes. there google has submitted comments saying the ftc privacy regulations are adequate for personal information in set top
boxes. do you agree with that, if not, why not? >> obviously -- thank you senator -- obviously these are two separate proceedings. what we want to make sure happens is that the requirements in section 631 and 338 which are applied to cable and satellite providers to protect privacy also apply to anyone who is providing a competitive set top box in that we work together with our colleagues at the ftc on an enforcement mechanism for that. to the extent that google believes they should be exempt from that, at least one commissioner disagrees with that. >> okay. and how do you see that playing out? how do you see that -- >> we're develop -- we have the same kind of notice comment proceeding underway right now. >> thank you very much, thank you mr. chairman. >> chairwoman ramirez, had these
regulations that the fcc proposed been in effect during the past couple of decades that the ftc has been regulating privacy, would we see the innovation we've seen in the internet if these more stringent prescriptive rules had been in place? >> it's difficult to answer that question. we're in the process of evaluating the proposed rules that the fcc is considering. what i can tell you is the way we have sought to balance innovation and consumer protection and while there's still questions that we're looking at to whether isp's ought to be treated differently in this particular instance than other companies in the eke syst eco system the framework we've
applyici applies on the information that's being used and the sensitivity of that information and also looking at consumer expectations. >> commissioner pai -- >> if you're working -- >> sure. you bet. after commissioner pai. >> senator, we can't say for sure, but i think it's a fair statement to argue that the internet economy that we have that's the envy of the world is due in part to the fact that the ftc applied a uniform framework, a flexible case by case approach that allowed entrepreneurs to experiment consistent with consumer preferences. i think that's part of the reason why chair woman ramirez pointed out there is cross device tracking that can benefit consumers. you get are watching a show on tv and transition to your mobile
device. that has been healthy for the internet economy. there's how much poorer consumers would be if we had restricted the use of that cross device information. >> thank you. chairman wheeler. >> thank you, mr. chairman. the internet began on a common carrier basis. the internet began the first darpa trials and the early internet itself was all on telephone networks using dial up modems. and those activities were subject to the fcc's privacy protection rules at the very same time the internet went like this. >> commissioner pai? >> if i could point out the early dawn of the commercial internet was not exactly the time we think of as the most robust in terms of entrepreneurship and innovation. the explosion has come with two decades of experience with the
ftc at the helm. some of the people who really pioneered internet access, broadband adoption and the like were not regulated as common carriers. aol for example. that was the gateway to the internet for millions of people. that was an unregulated -- >> but it was over -- aol was delivering over the dial up internet. and if the question -- i think i understood the question to say would the kind of regulation that we are proposing, if it had been proposed -- imposed in the early days of the internet would we have had the growth. i'm saying to you that aol and all of these other services that as commissional pai has just said were the beginning of the internet, take off of the internet all happened on a common carrier network that had privacy expectations. >> well, my concern would be
that i certainly -- i assume that aol, the old service i used to have, that we could very well see the growth. slow growth under this kind of regime. i'm wondering we would see the growth we've seen in the past couple of years and expect to see over the next several years with more innovation possible. commissioner, the ftc, as you mentioned has a long history of deal ing with privacy issues. you went through a lot of process to build these regulations to determine how you would regulate a series of work shops, privacy experts were called in. advocates, industry stake holders and issued a draft staff report. took comments before adopting a final report. this was all in the report of the 2012. the fcc, on the other hand held one workshop a year ago and a year later issued this complex and prm with 500 questions,
tentative conclusions and proposed rules. has the fcc gone through the deliberative process, in your view, that the ftc did in terms of determining how to regulate? >> well, you've mentioned that the process that the ftc has undertaken. it really has been a long time iterative process. actually, our first online privacy workshop was held in 1996. so i think that our approach which has been incremental and technology neutral and as chairwoman ramirez said looked at the type of information and consumer expectations has allowed us to develop our approach in a way that gives us the benefit of flexibility and the understanding, as consumer expectations and technology has changed. the fcc approach, obviously,
they -- this is a follow on to the reclassification that was undertaken in the open internet order. it's been a much more abbreviated process in my understanding. >> right. senator franken. >> okay. so we brought up again, i know that commissioner pai in his opening statements said -- talked about his own opposition to the open internet, the reclassification. and chairman flake asked about the, you know, the innovation on the internet and whether this will slow it down or something. it seems to me that the whole point of what reclassification was was to preserve net neutrality. and that's because every time the fcc had tried to preserve
net neutrality, the circuit court rejected them. and so this seemed to be da-- ai said in my opening statement, the court will be ruling on this. it could be now. or now. or now. or maybe they don't do it on wednesdays. >> tuesdays. >> tuesday and fridays. >> okay. well not now. okay. okay thank you for that. i should have known that. because i went to harvard. are you happy? are you happy? i didn't know it. and i went to harvard. okay. but the point is, is that -- because we talk about 706 that's like preopen internet, right? this order.
so i just want to clarify what we're talking about here. because it seems that now that this is reclassified as a common carrier, this is proposed rule which is a proposed rule. we're getting comments to the rule. the proposed rule on lots of things have changed dramatically. this is a proposed rule. but it seems to me that i don't think that this endangers the growth of the -- innovation on the internet. what would have endangered innovation on the internet would have been to lose net neutrality. that's what millions and
millions of americans wrote into the fcc about. so if you're talking about what consumers want, commissioner ohlha ohlhausen -- which is the proper pronunciation -- then it just seems to me that we need to be talking about what we're talking about here. which is this is reclassified as a common carrier like the phone company. and that means the fcc has the authority to the privacy -- i want to talk maybe about if the fcc and ftc working together. because i believe they have worked together in the past. and i believe the ftc, am i right, chairwoman ramirez, that you've worked with lots of different agencies on ftc and
the fda, right? >> absolutely, senator franken. we have a long history of working very well with a number of different agencies beginning with the fact that we share jurisdiction over competition with the the anti-trust division of the department of justice. we work together with the consumer financial protection bureau. we've worked -- i mentioned in my opening remarks we have an extensive history of working with the fcc including marketing, those are just a few examples. >> this isn't new. you know, because i'm kind of hearing suggestions that the ftc is the prime privacy protection agency and that for this reason we must not take away the authority to regulate broadbrand providers. i'm not suggesting the ftc doesn't play a critical role in protecting consumer privacies.
but i guess chairman wheeler, before my time's up, can you talk about the fcc's history, of protecting consumers' privacy and why in your view the fcc is the appropriate agency to regulate the privacy practices of broadband providers on top of the obvious thing, the common carrier. >> a couple of things, senator. number one, as i said in my statement, we've been in this business for decades. the rule has existed on networks for decades and decades. secondly, the ftc and the fcc as recently as 24 hours ago worked together on a privacy issue. bifurcates exactly the same way we're discussing here. that's the issue of mobile security. because one of the problems with mobile devices is that there
have not been -- there appears to be -- i don't want to judge this, we're inquiring. there has been difficulty in speedily getting to mobile devices the kinds of patches necessary to protect the privacy of consumers' information on those devices. we have jurisdiction over the networks that deliver to the devices. the ftc has jurisdiction over the devises. we worked in tandem. as recently as yesterday we put out a series of inquiries to those who we have responsibility for. they put out a serious of inquiries to those they have responsibility for. they asked the same question. they were done on a coordinated basis with us working together like this. that's not an isolated situation. i think that's the kind of reality we will see going forward. that we are responsible for
networks. and they're responsible for edge providers. >> sounds like a model way for a regulatory agency to work together in tandem. >> just a couple more questions. it's okay. chairwoman ramirez, in your view has the ftc's privacy protection regime over the years been sufficient to effectively protect consumers' rights as it relates to isp's? >> chairman, i think the federal trade commission has done an effective job in addressing consumer privacy and insuring that consumer information is appropriately safe guarded. and i have mentioned at length a number of initiatives and the enforcement work we've done in this area, at the same time, i do think there are certain areas where we could use additional authority. one example is that the
commission has on a unanimous basis called for congress to enact data security legislation because we believe that more needs to be done in that area and that we could use additional tools to address the protection of consumer information. that's one example. i do believe we've been an effective agency when it comes to privacy. >> do you have anything to agreadd? >> i agree. >> how does this continue to change or does it change? >> a good question, it has changed over time. so currently 70% of all internet travel is encrypted. if you go on your laptop and you access your g mail, y. if you do a google search the
isp can see if it's encrypting when you're accessing google. they can't see what search you put in, what product you're looking at and so forth. that's part of the reason why peter swire, the president's former privacy counsel has said isp's have a limited amount of information from consumers. that assumes, of course we're talking about one device. currently the number of internet connected devices in the home is six. it's going to go up to 11 by 2019. multiple devices across multiple network and locations. isp's have a smidgen in comparison to other devices. that's why the online advertising network sees them as a minute player. >> thank you. >> quite a smidgen. if you go back to what i said in my statement, let me just read
what one company says. a combination of information from wireless and wi-fi. we can tell where you're sitting in a room from your wi-fi connection. wi- wifilocations tv viewing, calling and texting records. website browsing and mobile applications uses. every mobile application you use. i respectfully disagree with commissioner pai on the asers that encryption is going to solve everything. first of all, there are about 85% of the top 50 websites that are not encrypted. but even fingerprint they were encrypted. you go to the example that senator franken gave, going to web md. then you go to the next level down in web md, which is information about this cancer or that cancer. you may not be able to see what
is coming out about this cancer, but united statyou know you havb md/prostrate cancer or whatever. then you know you have gone to the other url's. prosta prostatecancer.net whatever the case may be. and you're able to put together a collection of knowledge about the individual which should not be sold by the network. the network is just taking you to get that information. they don't have the right to turn around and say, hey, i've got information on who's got cancer. that's wrong. they can't do it today with a phone call. they shouldn't be able to do it on the internet. >> senator, if i could briefly respond. i'm pleased he has not disputed my assertion there is upward of 70% of all internet traffic which is encrypted. that reflects the bulk of
consumers' use of the internet. secondly, it's important to remember that the multiple contexts and devices matter significantly. example i gave earlier about your smartphone. your isp has insight into your connection as home in that example. google has knowledge about all of that information across all of the different platforms. indeed, given the fact that google encrypts the majority of its traffic from g mail to google searches, google knows what cancer you were looking at. all your isp know giciis you accessed google, the host. whereas the edge provider knows all of the pages you looked at and can tailor its advertising. i'm pleased the chairman has not disputed the fact that the edge providers are the one who are d dominant players in the market, which is online advertising.
that's why former chairman leeb wits has said -- >> when i go to google to find prostate cancer it's a decision i'm making. it's my choice. i don't have that kind of choice on the information i give my network. it's going to take that information regardless. and the network has the right to look at every piece of information. i go to web md and web md collects information on me. i go to weather.com and weather.com collects information on me. i go to facebook and facebook collects information on me. but only one entity connects all of that information that i'm going to all those different sites and can turn around and monetize it.
like i say, we're in favor of them being able to monetize it. they just need to be able to ask the permission of the people whose information it is. the fact that i hire the network to take me to prostate cancer.net does not give them the right to my information. >> one last question. indulge me before i turn back to you, senator franken. various stakeholders have requested the fcc extend the comment period here. on april 29th the chief of the fcc wire line bureau denied these requests in large part because quote, granting an extension is not the norm, unquote. given it to the fcc over a year to notice the proposed rules and the total prm is close to 150 pages long and it asks more than 500 questions of the stakeholders, do you think that extending the notice and comment period would be appropriate and
a fair thing to do chairman wheeler? >> golly, you know, we've been discussing this issue for half a dozen years. you know, commissioner pai and his objection to the open internet objection to the open internet kept talking about it. let's talk about privacy and what the impact is. everybody has been talking about privacy. when the isps appealed our decision and went to the court and asked for a stay, they specifically said in their stay, we need you to stay this because we need there to be certainty on privacy. the court said no, you don't get the stay. we are now providing certainty on privacy like they asked for. i think this has been an ongoing process. it is a filling up record and there will be a voluminous record on this. >> thank you for that.
mr. chairman, i think there are a couple of different responses. first as you pointed out in your question, the fcc opened up this can of worms in february 2015 and took over a year to issue the mprm. i don't think it's too much to ask for a couple extra weeks to allow the stakeholders with hundreds of members who have to be canvassed to weigh in on these many, many questions. there were contdictions that make privacy complicated. this will ask lots and lots of questions. it's extremely important for them to act if it's going to have a full and impartial rule making to act on the basis of a fully developed record. we can't do that if we don't give people time to comment. the second point i would argue, in addition when the term is saying the isp is here and everybody knew this was coming, we knew the door had been opened, but we didn't know how the fcc was going to walk through it. a lot of people, isps in particular, were misled and relied on the chairman's
commitment last november that we will not regulate them any different from edge providers. assuming they have gone ahead with that assumption it's going to be an ftc like framework, they would have been shocked when they saw the 500 questions proposing pervasive and selective regulation. >> thank you. senator franken. >> so that last comment begs my question again that i asked one round ago or two rounds ago. i don't remember. this is for anyone who wants to jump in. i'm still not sure if you want more privacy on edge providers or less on isps. that was kind of my question and i didn't feel i got an answer. help me understand the opt out policy that you mentioned. if the opt out option fkc would
apply to broadband providers means that consumers don't actually get access to the internet -- i mean, is that fair? in other words, if you opt out, you don't get the internet. >> no. not quite. >> not quite? >> this is your right to opt out of the network using information that you can contribute to. >> i got you. >> can i try something on that? with your permission. what we are dealing with here is a reframing -- artful
reframing -- of a historical responsibility through a massive redefinition of what a network does. the debate that is going on here is saying that throughout history the network has delivered to and has not used the information of that delivery process. but now because suddenly we've gone to internet protocol, the internet ought to be the same as the edge. that is a massive redefinition of what a network does. a network delivers to a third party. a network is not that third party. if a network wants to buy that third party, they can operate
that unit as a third party. there has always been this relationship between the networks and their consumers that we respect the information you put because it's your information. we only get it because we have to have it for delivery to the endpoint. this whole thing about equity and oh, my goodness, somebody is going to be advantaged over another, it has always been that way. when i made a phone call to call an order something, back in the days when you ordered from 800 numbers, and i got on the mailing list from whoever it was, that was two me and them. my network delivered me there without taking my information. that's the change that is trying to be perpetrated at this point in time.
it's crucial that we understand that this is a retreat from privacy. this is a retreat from what americans have always expected from their networks. that's what they are trying to do. >> it would be a retreat. >> if we didn't have this. >> what i'm hearing from these two commissioners. because that's -- you know, as chairman -- when i was chairman of this committee looked a lot at things like location privacy. so i think the edge providers should be regulated on privacy. i think it's very, very important, location privacy. we had hearings here on women who had their partners slip in
tracking of their partners. it led to very tragic circumstances where -- what i would like to see, -- i don't understand from you guys whether you want to see, and it sounds like you said yes, you would like less privacy regulation from the edge providers and less for the isps. is that what i'm hearing? >> senator, my position is very simple. i want to return to pre2015 ftc framework that applies to everybody, a light touch, case by case flexible approach. under the administrations. >> but when the isps were saying we want to charge more to
deliver at a higher speed, that was a threat to what the internet had been from the very beginning. that's why the fcc after trying to preserve net neutrality went to what it seemed like the courts were pointing to. i think you are wrong. i just think you are wrong. i want to preserve net neutrality. that's how we got all this innovation and growth. youtube, before youtube, there was google tv or google video. it was not good. so three guys over a pizza shop created google youtube. and a few years later, google bought youtube for a couple billion dollars.
no one would have been able to sample youtube if there was a slow lane and a fast lane. that's what all this innovation came from. we had net neutrality from the beginning of the internet. we had net neutrality from the very beginning of the internet. and you're saying no, we didn't? >> senator, we had no net neutrality regulations until 2015. they were created in the absence of regulations. >> there was not regulations, but there was neutrality. >> if you mean respect free and open internet, i think everybody agrees we should have one. that's one of the reasons if you look at ftc's net neutrality order, isps were acting as gatekeepers.
>> they were threatening to do it. >> i never heard of threats. >> you never heard of any threats. wait a minute. let me get the answer to this. you never heard any isp executive say they were considering doing fast lanes and slow lanes? >> senator, your point is -- >> why don't you answer my question. >> can you read the question? i never heard of any isp executive -- personally, you never read about anything? >> you can't prohibit. that's part of the reason we've seen all this innovation, in the absence of net neutrality. >> wait a minute. the chairman is saying you can't prohibit pay prioritization. >> i can give you the transcript if you like. >> mr. chairman? >> we did prohibit them under
title 2. >> there seems to be a really basic difference of understanding here. i find it very, very, very hard to believe that you never heard about any discussion, and i'm not talking about isp corporate officer talking directly to you. that's not what i'm saying. try it one more time. have you ever heard of isp corporate executives talk about pay prioritization. >> i heard in press reports that there was a concern about isps acting in terms of fast and slow lanes. of course. that's part of what motivated the president to make a pronouncement about title 2 regulation at the fcc. >> of course. you said of course. two minutes ago you said you
never heard of anything. >> your specific question, senator, have you heard an isp executive threaten -- >> no, that wasn't my question. have you ever heard an isp executive -- that's how you're parsing it? you were answering that question so literally -- i don't know whether i said of, or directly had an isp executive say to you, you know, commissioner pai, i'm really thinking of doing this so we can really stuff our pockets. that's not my question. that wasn't my question there was a reason we went to an open internet order and that is to preserve net neutrality. and that's why there were 4 million comments. and to pretend that was not the case before this committee seems
to me to be very disingenuous. mr. chairman, would you like to ask more questions? >> no. i think they have been through enough. i appreciate the testimony. i appreciate what we've heard today. this has been very helpful to us. >> can i put a couple of things into the record, mr. chairman, i'm sorry. >> you bet. >> i have a letter from a number of consumer advocacy organizations in support of the fcc's rule making. i asked consent for them to be entered into record. >> without objection. >> there is a statement for the record from senator leahy. >> without objection. >> thank you very much. >> i want to put in the record a couple of letters regarding the proposed rules from fcc groups that represent large cross-section of technology companies including two letters addressed to fcc asking it follow ftc approach to privacy.
>> i object. will the record note that the commissioner laughed at that. [ laughter ] >> i will say affirmative yes for the record. >> see. see. >> i never knew you had to get a record of people applauding. laughing. >> laughter. there is a difference between laughter and applause. believe me. i know. >> also senator grassley has a statement as well. let the record show i both laughed and applauded at senator franken's jokes over the years. the hearing will remain open for one week. and with the thanks of this committee, this hearing is adjourned.
live coverage of the libertarian convention in orlando, florida. it starts tomorrow night at 8:00 eastern when libertarian presidential candidates hold a debate. and c-span will be live from the convention sunday morning at 9:45 eastern when the party chooses its presidential candidate. libertarians are the only third party on the ballot in all 50 states. tonight on c-span president obama's trip to hiroshima, japan. he said since the atomic bond was dropped to end world war ii, the two countries have formed a bond. here is a portion of what he said. >> the united states and japan forged not only an alliance but a friendship that has won far more for our people than we could ever claim through war. the nations of europe built a
union that replaced battle fields with bonds of commerce and democracy, oppress people and nations one liberation, an international community established institutions and treaties that worked to avoid war and aspired to restrict and rolled back and ultimately eliminate the existence of nuclear weapons. still every act of aggression between nations, every act of terror and corruption and cruelty and oppression that we see around the world shows our work is never done. we may not be able to eliminate man's capacity to do evil, so nations and the alliances we
formed must possess the means to defend our selves. but among those nations like my own that hold nuclear stockpiles, we must have the courage to escape the logic of fear and pursue a world without them. we may not realize this goal in my lifetime, but persistent effort can roll back the possibility of catastrophe. we can chart a course that leads to the destruction of these stockpiles. we can stop the spread to new nations and secure deadly materials from fanatics. and yet that is not enough. for we see around the world today even how the crudest rifles and barrel bombs can serve up violence on a terrible
scale. we must change our mind-set about war itself to prevent conflict through diplomacy and strive to end conflicts after they have begun. to see our growing inner dependence as a cause for peaceful cooperation and not violent competition. to define our nations not by our capacity to destroy but by what we built. and perhaps above all, we must reimagine our connection to one another as members of one human race. >> president obama's trip to hiroshima made him the first u.s. president to visit the site of the world's first atomic bomb attack. after his remarks he met with two survivors.
you can see his entire comments from hiroshima, japan, tonight at 8:00 eastern on c-span. >> this memorial day weekend on american history tv on c-span3, saturday evening at 6:00 eastern on the civil war -- >> sherman could not agree more. by the time he captured atlanta in 1864, his thoughts on the matter had fully matured. once again, a rebel army had been defeated and another major city had fallen and still the confederates would not give up. so rather than continue the futile war against people, he would now wage war against property. >> georgia historical society william gross on william sherman arguing sherman's march to the sea campaign was hard war rather than total war and his targets were carefully selected to diminish southern resolve. take a took with senate majority
leader mitch mcconnell viewing some of the oldest rooms in the capital like republican leader suite, conference room and his private office. >> i had the good fortune to be there in 1963 when martin luther king had the i have a dream speech. i confess i couldn't hear a word. i was here and he was looking on throngs, literally thousands and thousands of people. you knew you were in the presence of something really significant. >> at 8:00 on presidency former aides to lyndon johnson and richard nixon talk about the role of the presidents during the vietnam era. >> lbj anguished about that war every single day, and that is not an overstatement. the daily body counts, the calls either to or from the situation room often at 2:00 or 3:00 in the morning to see if the
carrier pilots had returned. >> historian h.w. brand joined by former lbj aide tom johnson and former nixon aide alexander butterfield to explore the president's during the conflict. on real america, five-part series on the 1975 church committee hearings convened to investigate the intelligence activities of cia, fbi, irs and nsa with testimony by cia director william colby, fbi's james adams, nsa director allen, fbi informants and others. >> we are here to review major findings of fbi domestic intelligence including programs aimed at domestic targets. fbi surveillance of law abiding citizens and groups, political abuses of fbi intelligence and several specific cases of unjustified intelligence
operations. >> for the complete american history tv weekend schedule, go to c-span.org. >> congress passed medicare access and chip reauthorization act last year that changes the way the government reimburses medicare providers. the acting administrator for centers for medicare and medicaid services and before a house panel to discuss the proposed rules. this is about an hour and a half. >> the subcommittee will come to order. good afternoon, everybody. we're going to begin. i'm really excited to finally be having this hearing. when i came to congress back in 2001, the sustainable growth rate or sgr we know it by provision in balanced budget act of '96 was in the process of being implemented.
under this payment formula any yearly increase in beneficiary spending that exceeded growth in gdp could result in negative adjustment for physician payment and medicare. dr. price was really well aware of that. clearly his policy or the math didn't work and for the next 15 years we had almost yearly struggles over what was aptly named the doc fix. 17 fixes later we came in bipartisan fashion with cms technical support to pass the chip reauthorization act of 2015 with nearly 400 votes in the house. this legislation finally put an end to sustainable growth rate so doctors could focus on patient care and not worry about unpredictable patients. we've called this hearing today to take our first blah at the regulations released by cms.
we will look closely how they match up with congressional intent and what our members and cms are hearing from stakeholders as they digest 950 pages of regulations. that's the scope of the hearing to discuss the implementation of this truly historic legislative feat and there's a lot to discuss. i know on a bipartisan basis we'll dive in in a deep way. i'd like to take a moment to encourage members of both sides of the aisle as you hear from stakeholders and constituents regarding concerns or thoughts about the proposed rule, please bring them to the attention of the bipartisan committee staff so we can continue to do robust oversight and keep cms up to date on the information as they formulate their final regulation. the passage of macra last year confirmed our commitment on both sides of the aisle to keep medicare strong for america's seniors.
this is particularly important to me as well as many of you especially after we just celebrated mother's day as both my parents back in my district in ohio depend on this important medicare program. by replacing the way physicians are paid and consolidating the separate quality measurement systems we have taken a great step toward the ultimate goal of fully integrated value-based care through the incentivization of high quality care. now our role as congress to provide oversight in conjunction with cms to provide education how this new life will work for physicians and provider groups. we need to answer how this rule will affect individual and small group providers versus larger groups. how will this rule affect specialty groups versus primary care physicians? how will the timing work for implementation under potentially tight timelines? these are questions i hope to get clarity on today going forward through the implementation process. as we move forward with implementation i want to make sure that we as congress
recognize very important facts regarding the law that we passed. the merit based incentive payment system is created as a budget neutral program, high quality value based care will take effort. but as i said before, such efforts must be recognized within the environmental and timing factors based in reality. additionally, the threshold for providers to qualify as advanced alternative payment models are high and are set in statute. working on a bipartisan basis with stakeholders from every corner of our country and an open dialogue and cooperation from cms will allow us to follow macra into the next generation of value-based health care. now with can go to work. with that i would like to yield to the distinguishing ranking member dr. mcdermott for the purposes of an opening statement. >> thank you, mr. tiberi.
medicare was put in place some 50 years ago, a critical decision was made by the medical association in order to have them join in the effort, they demanded that they be paid their usual and customary fees and we on this committee have been since that time trying to get back the keys to the treasury. this is another effort here. now the proposal by -- the macra rule from cms is really as a result of our efforts as mr. tiberi says after 15 years of realizing what we put in place didn't work. it took us 15 years to figure out we needed to do something different. i hope this is the beginning of a constructive bipartisan conversation about how to advance our shared goal of controlling costs and improving delivery of health care in the country. passing macra was a tremendous bipartisan accomplishment in
that it put an end to a cycle of dysfunction. we had the same thing happen every year, we're going to have a 20% cut in doctor's pay so there would be a big rush around here and we'd put a patch on it then go on for another year and next year it would be a 24% cut in doctors' pay and we put a patch on it. we did that again and again. for years we lurched from crisis to crisis to avoid what were draconian cuts in those physicians payments. we ended up spending more on the temporary delays than it would have cost to do away with isgr in the beginning. last year we put an end to the cycle once and for all by passing mackra. macra is much more than a simple reveal, it's the most significant payment reform medicare program has seen in
years. thanks to macra we've set medicare on a sustainable course that will allow us to pay for value in health care rather than volume. the law modernizes and stream lines physicians' payment. instead of a patchwork of incentives and alternative payment models it consolidates various programs into a single framework, it will allow flexibility for providers, allow them to practice medicine independently while still holding them accountable for providing high quality care. we are still in the early stages of digesting this proposed rule. it's big enough. it will take a while. what we've seen so far is encouraging. the administration has worked to implement the law as intended through a process that is responsive to the needs of the public. the proposed rule is consistent with the goals of macra. it provides flexibility to participate in the merit-based
incentive payment program or alternative payment methods that reward high value care. this will make sure providers do not end up in one size fits all approaches that doesn't make sense for them or their patients. it's the product of an open and transparent process that began months ago through active outreach, consideration of extensive comments and public workshops with stakeholders the agency has heard from a range of view points and the proposal reflects careful consideration of that input. i'm confident the administration will continue to be responsive to the needs of the public as it develops the final rule. this is an ongoing conversation, we still have much more to learn as we work toward our shared goal of making the implementation of this landmark law a success. getting people covered by health care is one thing. controlling the costs is another thing and this is about
controlling the costs and i don't believe we've got our arms around it yet but we're in the process and that's why we welcome you to to make this presentation. thank you. >> thank you, dr. mcdermott. without objection, other members opening statements will be made part of the record. today's witness panel includes one expert and we're lucky to have him. andy slavitt, acting administrator at the centers for medicare and medicaid services along with his colleagues have a daunting task of implementing this very important law. on a personal note thank you for having me at your office yesterday. it was nice to get to know you and members of your team and look forward to continuing dialogue in the future. with that mr. slavitt, please proceed with your testimony, we appreciate you being hear today. >> thank you chairman tiberi and ranking member mcdermott, members of the subcommittee. thank you for the opportunity to discuss cms work to implement the medicare access and chip reauthorization act of 2015. we greatly appreciate your leadership in passing this important law which gives us a unique opportunity to move away
from the annual uncertainty created by the sustainable growth rate to a new system that promotes quality, coordinated care for patients and sets the medicare program on a sustainable path, our number one priority is patient care and thanks to congress macra streamlined the patchwork of programs that currently measure value and quality into a singing -- single framework called the quality payment program where every physician and clinician has the opportunity to be paid more for providing better care for their patients. in recognition of the diversity of physician practices congress created two paths. the first allows physicians and other clinicians the new flexibility to participate in a simplified program with lower reporting burden and new flixability in delivering quality care. it will second path recognizes -- the second path recognizes that physicians and clinicians
who choose to take a further step towards care coordination by participating in more advanced models like medical homes. our goal is to make both of these paths flexible, transparent and simple so physicians can focus on patient care not reporting or score keeping. we've approached the implementation with a belief that physicians know best how to provide high quality care to our beneficiaries, we've taken an unprecedented effort to draft a proposal that is based directly on input from those in the front line of care delivery. we've reached out and listened to over 6,000 stakeholders including state medical societies, physician groups and patient groups to understand how the changes were we're proposing may positively impact care and how to avoid unintended consequences. the feedback we received shaped our proposal in important ways and the dialogue is continuing. based on what we learned our approach to implementation has been guided by three
principles -- first, patients are and must remain the key focus. financial incentives should work in the background to support physician and clinician efforts to provide the highest quality care and create incentives for coordinated care. second, we're focused on adopting approaches that can be driven at the practice level not one size fits all from washington. it will be important to allow physicians to define the measures of care most fitting with their patients. third, we must aim for simplicity in everything we do. physician practices are already busy and we are seeking every opportunity possible to minimize distractions by reducing, automating and streamlining existing programs. among the many places we seek feedback during the comment period, this is among the most important as the burdens on small and rural practices, in particular, have increased over the last several years.
one of the important opportunities will be for physicians to define and propose new payment models so we can create an array of customized approaches that reflects the diversity of care across the country and particularly as it relates to the various specialties that provide care. congress had the foresight to create a formal voice through the physician payment model technical advisory committee. i had the opportunity to meet with them last week and can tell you they are very eager to move forward with their important work and we are eager to work with them. with all the work that went into this proposal, it's critical that we receive direct feedback from physicians and other stakeholders and are undertaking significant outreach efforts. our proposed rule is the first step in the process. we look forward to receiving and reviewing comments to refine and improve our approach. in the month of may alone, we have 35 scheduled events and
listening segs to hear from a wide range of stakeholders, and this outreach will remain an important part of our work. i personally have been meeting regularly with physician groups, including smaller and rural practices, and have spoken to physicians in different parts of the country about their work, the opportunities and challenges they face and what this proposal means for them and their patients. throughout this, i have appreciated the open dialogue with this subcommittee and the larger committee. it's clear to me we share the goals of creating a more sustainable system, smarter system and keeps people healthier. we're striving to do just that in the implementation of macra but it will take broad participation to getting it right. i look forward to hearing your further thoughts and answering your questions. thank you. >> thank you, mr. slavitt. as you know, in my district i represent urban, suburban, rural.
and most of the concerns i've heard with respect to macra and the future implementation of macra is from small and rural providers. so the proposed regulation assigned three levels of risk for entities participating in alternative payment models and what i've not seen are tiers or variabilities in the amount of risk for participation between an individual and small group clinician and large group clinicians. have you heard concern from providers about this? >> i think -- thank you for the question. i think the topic, particularly small practices and making sure they can succeed is of utmost importance. and our data shows that physicians that are in small and solo practices, so long as they report, can do just as well as physicians in larger-sized practices. so we know, however, that there is a burden on us to make the reporting as easy as possible.
we also know there are a number of other steps that we need to be looking for and looking out for to make sure we make things as easy as possible and accommodate smaller practices. so we are looking for additional steps and ideas as people review the rules but i will say people are focusing on technical assistance, providing access through medical home models, opportunities to report in groups and using a reporting process that automatically feeds data, reduces the number of measures and overall lowers the burden for small practices. >> so in a followup to that, in reading through the regulation, there are several areas that seem to allow a little more flexibility for individual and small group practices. can you outline some of the major differences in reporting for individual and small group practices versus the larger
groups that could maybe ease the burden or send that message to the smaller groups that there's sensitivity there? >> sure, absolutely. at the question of the physicians -- we met with a lot of physician groups and small practices in this process. one of their key requests was that if they're already participating in something like a clinical registry or some other way of getting data across, maybe an accountable care organization or clinical registry, that we use the that information rather than requiring them to send them again and our proposal does indeed allow this multiple ways for us to get information. secondly, we're required to measure the cost of care and we are able to do that automatically by getting a claims fee that requires physicians to send us no information whatsoever and there are a number of areas where they need to attest to whether they're doing a certain activity which we think will reduce the burden and we're looking more broadly at the overall
experience for physicians. small physician can report in groups in many categories where they hadn't been able to before and finally i would say there are a large number of physicians who won't have to report at all because they'll be underneath the minimum threshold and congress put forward that if physicians don't see enough medicare patients or enough amount through medicare that they don't have to report at all so all of those things i think are there and, again, we also look for additional steps if there are some we can take. >> just a final thought, i don't mean to put you on the spot on this. but you think there's any more that we can do, those of us on this side of the dais and you and your team at cms, that we could do to ensure that as we lay the foundation for macra going forward and there's
buy-in, complete bye-in from the community, the system is not built with an inherent fairness or fairness issues. again, going back to the rural provider or the two person provider group that has a bunch of angst right now as this has begun to unfold. is there any more we can do or you can do or we can work together on? >> i think it's got to be a vital continuous effort. last week i met with small physician practices from southern arkansas, southern oregon, new jersey. we have a meeting on friday with rural health association at their annual meeting. we went out to kansas city last week to meet with a family practice association and we hear a lot from small physicians who are concerned, and i think particularly concerned, if people in washington are making centralized decisions that are going to impact their quality of care. what they tell us over and over
again, and we need to keep talking to them and getting more feedback, give us the freedom to take care of these patients. we know how to do it, let us define quality and select measures that are right for our practice, give us flexibility and don't make us focus on reporting, let us focus on patient care. it's really critical, i think, as we work together and you hear input that you get this to us and hold us to that standard that physicians across the country are holding us to. >> thank you, sir, with that i recognize dr. mcdermott for five minutes. >> thank you. one of the issues that the question mr. tiberi is raising about small practices leads me to the question of consolidation and driving doctors together in larger and larger groups. the question then comes in my mind -- i practiced both as an individual and in the military and in a group practice so i've
been in all sorts of forums. one of the things that strikes me that is going to be difficult to deal with here is the whole question of what is the best care. if you have a large organization and they have an mri, and they don't want to use it -- or they want to use it, they can crank a lot of people through with an mri for everything, or they can say don't use an mri and there will be patients out there who do not benefit from what they could find. i can give you an example of a young woman, 34 years old, who had pain in her back and was told you're riding a bicycle and there's reasons why, you're young and blah blah blah. at 35 they did an mri and found a tumor in her spine. now if they'd done that, they would have found it five years earler but the organization was
encouraging people not to use. so how are we going to make our judgment about whether we've got quality of care if the major factor is going to be money? i mean, what's built into this to actually look at the quality of care? >> so i think at the heart of the question, the most important thing above all else is making sure patients get high quality care and we do believe that if patients are getting high quality care that's going to lead to better cost control because if someone gets the right surgery, they won't need to have a second surgery. likewise, if somebody as the quality -- is defined as making sure the care is coordinated so if somebody needs to have a follow-up visit or has a prescription or something that -- with an instruction that they understand what that is, it's explained to them and that the system works and supports them. so our job here is to enforce that, number one.
number two, i think our job isn't to define quality here ourselves as much as it is to take the best standards of care that the specialists and the physicians around the country have defined as quality and make sure we keep up with that and that we keep those measures as the things that physicians decide as a group that they should be measured on and those are the things -- and third, as i said earlier, that things differ at the practice level. we believe the practices by and large are the people that know best for what's right with their patients and the dialogue between the patient and if physician so nothing we are doing should be seen to be interfering with that in any way and in fact we ought to be reinforcing those things and i think macra gives us the opportunity to say if you're delivering a better quality care
outcome for your patient, you ought to be rewarded for that. >> you're suggesting the whole question of evidence-based medicine. that is if -- i mean, i've been to the doctor recently and they send out from the university of washington a sheet to me that says, did you have good care? was he polite? was he nicely dressed, blah blah blah. down at the bottom, were you satisfied with your care. for some people if they don't get a prescription or an x-ray or blood test, or they don't get something, the doctor hasn't done anything. so how do you measure, then, the patient who says, well, i wasn't satisfied. i went away and i still -- my sinuses are a mess and he didn't give me ant pockets. how do you deal with that issue in the quality of care? >> i think one of the nice things is -- i'll give you an example. i was sitting down with some physicians from a -- that
are practicing medicine in southern rural arkansas. i referred to them recently. they are in one of these models, medical home model where they have a per member per month payments they get in order to coordinate the care. they have hired care coordinators. what they told me was, the physician i was talking to told me was, now i can get paid to practice medicine the way i'm supposed to practice medicine instead of practicing medicine the right way and getting paid on something completely different. so i think the more we evolve our health care system to a way that reinforce what is physicians know are the right things to do in delivering quality care to patients the better off we're going to be as opposed to a system where if you don't make a cut in someone's skin or give them a prescription or something that they leave the office with, that's not success. >> i have a medical home at the university of washington, thank you. >> thank you, dr. mcdermott, that was really good.
we agree on something. thank you so much. i have 12 different questions i could ask you on 12 different topics, and my mom has one she shared with me last night she would like me to ask you but it doesn't have to do with macra. and i would like to remind members to keep the topic to this important law we passed. with that, mr. johnson is recognized for five minutes. >> thank you, mr. chairman. mr. slavitt, welcome. you've said cms is working to regain the hearts and minds of physicians through implementation of macra, and that's great because many physicians in solo practices have struggled to stay afloat. while there are a lot of good things in the proposed rule, i have one issue i'd like to raise with you. i'm concerned by the estimates in table 64 where cms projects
the greatest negative impact on payments to practices with nine or fewer doctors and the least harm to large systems with 100 or more docs. if cms is trying to win back the hearts and minds of physicians, this proposal falls short since it will continue to push physicians out of their solo or small practices. can you tell me specifically what cms is doing to ensure solo practitioners and small groups can succeed under the mips and participate in alternative payment models by 2019? >> thank you, congressman johnson, for the question and i actually welcome the opportunity to address this table. for anyone who hasn't seen the table, the table is designed to estimate what the impact of these regulations could be on
practices of various size. and the first thing i want to make very clear is that the question of making sure that small groups and solo practitioners can be successful is of utmost importance. i would also indicate, despite what that table shows, our data shows that physicians who are in small and solo practices can do just as well, and actually do do just as well as physicians that are in practices that are larger than that. now, the reason the table looks the way it does is for one simple and important reason, it counts for the fact that in 2014 when the table the data uses, most physicians in small and solo practices, many did not report on their quality. this is important for a couple of reasons. first of all i should say in 2015 and subsequent years the reporting went up. at best this table would be
very, very conservative. of course as i explained to chairman tiberi, reporting is going to get far easier going forward. but it does point to a couple things i think we'd be wise to pay attention to. one, making sure it's as easy as possible for physicians to report. one of the reasons we don't have the hearts and minds of physicians is there's too much paperwork in health care. >> i would agree. >> they need to practice medicine not do paperwork. so there has been a tremendous amount of effort so far and this is just a proposal. so this next period of time for comments are a time when we are hoping people can give us even further ideas and further ways that we can reduce the administrative and reporting burden. but to be very clear, there's absolutely every opportunity and an equal opportunity for small and solo practices to be successful. >> well, thank you. maybe we better indoctrinate the nurses, too. don't they do most of it?
i thank you, mr. chairman, i yield back my time. >> thank you, mr. johnson. >> thank you, mr. chairman, thank you, mr. slavitt for your testimony here today. needily to say, i think congress in passing macra gave you a huge undertaking and with a 900 page rule, i think it's pretty obvious we need to keep the lines of communication going. and hopefully your outreach will continue as it has been not just physicians but patient feedback as well. i know many members have been pushing hard to get a more integrated coordinated health care delivery system. i come from a region in wisconsin that established models of care and has been pushing aggressively in this direction for quite some time. ultimately alternative payment methods so we get quality, value-based, outcome-based reimbursement so that's the directive macra gave you. but a lot of my providers were early stage first generation aco models.
my question is what more can be done in order to provide an on ramp for advanced apm payments to early stage acos? are they going to have to leapfrog and go on to gen 2, gen 3, gen 4? >> you're raising an important question which is where physicians have an opportunity -- as we mention, all physicians in every program will have the opportunity to get rewarded for quality care but where physicians have an opportunity to and have had the opportunity to over the last several years to join with these other physicians in these more coordinated care models, the medical home would be one example. we think those are a good idea if they're right for the physician. if the physicians think they make sense for their parents
-- patients, gives them an opportunity to earn 5% additional bonus on top of what they may be earning in these advance models. so what's the requirement to get access to that bonus and the legislation puts forward a number of requirements and the requirement in a nutshell if i was going to searchify it, there has to be a higher degree of shared accountability for the physician. that shared accountability, shared from physician to patient and minimal sharing of the cost with the medicare program itself. so in other words, in order to qualify for this 5% bonus i think the words in the legislation are there has to be a -- more than a nominal risk so our job in putting this regulation together is the definition of what is nominal risk. we've tried to do that in
as consistent and simple a way as possible but it's one of the areas where we're inviting feedback. all of our models, whatever model we're in, will have to qualify based upon that definition. so even if a physician is in a model that doesn't qualify because there's not a risk, there's still great opportunities and opportunities for them to grow into other models. >> finally, you know, the great cost driver in our society, it's true at the federal level with our budget, state and local for families and business alike, rising health care cost. so with the direction this rule is taking, can we sit here with reasonable confidence that this may ultimately lead to cost savings without jeopardizing the outcome or quality of care that our patients are receiving or will this turn into a lake woe begone situation where everyone is above average, everyone is qualifying for bonus payments and there's no real cost savings at the end of the day?
>> well, i think, first of all, we all are striving for a higher quality health care system, we want our money spent more wisely and we don't want to do in the a way that people feel like they're skimping on their care. we have 10,000 new seniors every day in america. and our jobs are to figure out how to take care of them better for less money and that means taking care of them in lower cost settings, more comfortable settings like their homes rather than institutions like hospitals so those types of in sent is are vital to this program. within the regulation, the pool balances out, so we're going to have to allocate money and have upward and downward adjustments as part of this program in order to be able too meet the sustainability test you talked about. that's nothing new. there are upward and downward adjustment ins programs today. what is new is this will be a simpler more aligned and program that's easier to measure and take tack of. >> great. thank you.
thank you, mr. chairman. >> mr. roskam recognized for five minutes. >> thank you, mr. chairman. mr. chairman, i've got an observation, a point and a nudge. my observation is happening. and yet, here we've got this issue where both sides of the aisle, the white house, everybody came together, wrestled a complicated issue to the ground, came up with a solution, and it doesn't involve snarling at one another on television. it doesn't involve hyperbole and so forth, but there was a very serious effort, and we're on the verge of i think some good things. so, just a little shout out, and that is three cheers for something getting done. and i think there's an encouraging element to that. my point is that debate matters. i would argue that one of the reasons that we were able to have that discussion when speaker boehner and leader pelosi were able to come together, and the two of them
really drove the discussion, it was because it had been well wrestled through in the united states over the past several years that we needed to do something on medicare. and both sides have different views of the world and so forth, but there was, you know, it had become normalized in that sense that these things had to change. so debate does matter, and i think we are better off if our debate doesn't involve snarling at one another, and it's two various points, but debate matters because debate is a prelude to action. margaret thatcher said first you win the debate, then you win the vote. okay, now here's the nudge. and this is the nudge for you, mr. slavitt. one of the things that i think you and i have talked about offline and you've alluded to some of this too a minute ago, there is this tension that's out there, and there's a tension that manifests -- and let me just tell you a quick story. so, i served in the state legislature and we had some education testing issues that came before us.
you know how this works. there's always a new test, there's always a new standard. so i called a friend of mine who's an old friend from high school who is a high school administrator. and i said, give me the straight scoop on these tests. and he said, peter, look, will you just pick a test and stick with it and not change it every four years? and he goes, we're happy to be accountable, but stick with a test, stick with a program. and that deeply resonated with me. so, the tension is that i think health care providers want a standard. they want something that's predictable. but now also, the tension is they don't want something that's declarative and dispositive and can never be revisited, because that's big and that's overwhelming and that's what sgr had -- that's what we had to do for, you know, the doc fix for all those years. that was declarative. it was an overcharacterization, and it failed.
and the proof that it failed was you had to kick -- we all had to kick the can down the road. so my nudge is this. as you are going through and you're figuring this out -- and i really appreciate the disposition and the attitude and the open rule time that you have now and the comments that you're taking in -- if you could really be mindful of those smaller practices that mr. johnson mentioned, the point that mr. mcdermott made, and that is, how is it that a physician that is maybe, you know, stewarding antibiotics correctly or not giving in to patient pressure for a prescription, how is that physician protected? and also, i hadn't thought about it until mr. kind mentioned it, and that is, are the bonus payments, so to speak, are they simply a new floor? and does the average become the expectation? so, all of those -- you know, i'm here and i think that the chairman has set the great tone here, and that is to try for us
to listen and to learn. but as you're navigating through those natural tensions of having something that can be predictable but also maintaining that level of flexibility where it can be revisited and changed i think is the best of both worlds. with that, you don't need to respond. i'll yield back. thank you. >> if you'd like to respond, you may. it's up to you. >> well, we had these conversations, including a little bit yesterday. i think this idea of making sure that people don't feel like the game is changing on them midcourse is critical. so there's enough in this legislation that allows us to tell folks going in, hey, here's how it works in advance. i think there's nothing more frustrating than being told after you took the test how it's being graded. and then i think you make an important point as well, which is how do you trade off making
sure you're predictable with staying current with the state of the art and the state of medicine and what physicians are saying they want. and i think we have a process for that. we take comment on that process. we think it's an effective process. but it's also important that physicians have the flexibility to navigate the process, particularly at different times in their practice. >> thank you. mr. thompson is recognized for five minutes. >> thank you, mr. chairman, for having the hearing today. thank you, sir, for being here. i'm sorry, i had to step out, so i hope i'm not going to be repetitive here. but we're all very, very interested, i think you can tell by the tone of all the questions, that this law works. we have a very vested interest in that, not only as the committee of jurisdiction but also these are the people, providers and patients that we represent at home, and we want to make sure that it works. and so, to that end, i'd like to
hear what the administration's doing to help providers get ready ahead of the 2017 start date and what would you recommend providers be doing to get ready? and is there anything that we, as members of congress, should be doing to help facilitate this transition? >> yeah. thank you. so, i guess maybe i will start to direct that question as if -- what i would say to a physician who is wondering what does this all mean. and it's a conversation that i get to have frequently because i've been having a lot of conversations with physicians. and i think there are probably five things i would say that i would keep in mind as a physician or from, i think, our perspective. number one and most importantly, keep focusing on your patients and on patient care. don't worry about the score-keeping.
it will be our job to put this forward in a way where it becomes easier, and indeed, it will be easier and more streamlined than the processes people have to go through today. so that's the good news and that's the first thing. the second thing is that we have to continue to talk to people and educate people is there opportunity, as the chairman's question implied earlier -- is it because physicians will have the opportunity to decide which measures and which ways of measuring quality they want to be measured on, that at some point they'll be able to think about what those things are and be able to put those into motion, and that's really one of the important early things. i think if there are opportunities to participate in these more advanced models, these care coordination models like medical homes, they should obviously consider those because there are some extra rewards for that. but it won't be until the spring of 2018 that physicians would first need to report on macra.
and so, it's important that they not get too concerned about that. and then the final thing i'd say, and i think we're trying to encourage for everybody is to provide us feedback. during this comment period, we really want physicians to be able to review this. we're setting up a number of sessions. i talked to 3,000 physicians yesterday on a call. we do twice-a-week webinars, to get your questions answered and then give us feedback on how you think this is going to affect your practice. >> and as far as us being able to do anything to help facilitate the transition, any comments for the committee? >> i think the more listening sessions and open forums that there can be with physicians and giving physicians an opportunity not just to hear what's in the rule but to tell us how it's going to impact them. i spoke with one of the members of the subcommittee who asked me to participate in one of those sessions with people in his district.
i think we have a lot of the staff at cms that are available to do phone calls and other things to reach out directly. so let us know what you're hearing from your constituents and our job is to be responsive. >> and so, in my particular case, would you rather do a phone call into the napa valley or would you rather come out and do an in-person? i yield back. [ laughter ] >> maybe a future subcommittee hearing. dr. price, recognized for five minutes. >> thank you, mr. chairman, and thank you, mr. slavitt, for joining us today. i think as has been said, i think we're moving in a better direction, but we still have a long way to go. and if we're going to make it so that physicians can once again be able to care for patients without an inordinate amount of influence or burden from outside, we've got to continue to work through this, and i appreciate your willingness to do so. i've got a couple specific areas, and then i want to tick through.
one is you've got -- moving from meaningful use to aci, or whatever we're going to call it, we've got a 365-day rule. in the past it's always been a 90-day rule, which means that practices have to demonstrate that they comply for a 90-day continuous period within a 365-day period. it only makes sense. nobody is perfect every day. and if they're going to get dinged because they're not able to comply one day or two days or three days, then we've simply got to move to a 90-day, and i hope that you're able to work in that direction. >> so, it's one of the key areas we're inviting comment right now during the comment period. >> good. so, i invite comment as well from folks from whom i have heard. >> okay. >> on the alternative payment models, you've got a lot of folks out there, a lot of docs, guys and gals who have already modified what they're doing. the bundled payments, the bbci programs, the future cjr program. and yet, it appears that those prograha