tv CMS Administrator Nominee Seema Verma Testifies at Confirmation Hearing CSPAN February 17, 2017 11:30am-1:00pm EST
senate. we also heard from democratic senators a short while ago, including the minority leader, chuck schumer. they talked about asking scott pruitt for court ordered emails that were written to fossil fuel companies during his time as an oklahoma attorney general. you can see that news conference online at c-span.org. just search senate democrats. and we'll take you back to the hearing we were showing you with seema verma, nominated by president trump to be the director for centers for medicare and medicaid services. we'll pick it up with questioning from senator hatch, the chairman of the finance committee. chairman hatch: questions to give you. first, is there anything that you are aware of in your background that might present a conflict of interest with the duties of the office to which you have been nominated? ms. verma: consulted with the office of ethics and have indicated any areas where i thought would be an issue and i will be recusing of myself of
any matters that would present any potential conflict. chairman hatch: do you know of any person or any reason, personal or otherwise, that would in any way prevent you om honorably discharging the responsibilities to the office to which you have been nominated? ms. verma: i do not. chairman hatch: do you agree without reservation to respond -- anyreasonable inquiry reasonable summons to appear and testify before any -- nor any duel constituted committee of the congress if you are confirmed? ms. verma: i do not. chairman hatch: you are willing to do that? ms. verma: i am willing to do
that. chairman hatch: ok. finally, do you commit to provide a prompt response in writing to any questions addressed to you by any senator on this committee? ms. verma: i do. chairman hatch: thank you. let me now get into just some questions. i know you are aware of the historic bipartisan medicare access and chip re-authorization called i -- what's macra. among other things the law got rid of the dreaded s.g.r. formula and made improvements to how medicare pays physicians. i'm pleased that our work on the implementation of these changes continues to be bipartisan. both in how republicans and democrats in the congress have worked together and how congress had worked with the obama administration. in fact, the obama administration took great pains to engage physicians and other stakeholders through the initial
implementation phase. it strikes me that this process of consultation early and often should be the rule and not the exception. what is your view on how to gage stakeholders to approve -- to arrive at the best policy decisions for medicare and other c.m.s. programs? ms. verma: thank you, senator. i applaud it, congress' efforts to pass mack a. i think it's an important step forward, not only to providing more stability for providers, but also moving us towards better outcomes. in terms of stakeholders, i think that the most important thing that we can do is engage with stakeholders as quickly as possible on the front end and all the way through the process. understanding stakeholder perspective and what folks are going through on the front end. what their challenges are. as we're developing policies and programs to have that open communication, i think is helpful towards any successful
implementation. it's not a one-time thing. it's not just on the front end. it's all the way through the process. and even after the program's established, it's always important to have that dialogue with stakeholders because they can tell you what's working and what's not working. and when you think of new ideas and you are thinking about implementing them, they can help you figure out whether it's going to work or not. i know i have had that experience in my career and i have always found it very helpful and integral part of success. chairman hatch: as the baby boomer generation ages, the number of persons age 65 and older in the united states is expected to dramatically increase. having an increase in demand for long-term services and support. notably the medicaid is the primary payer of these services. what changes, if any, should be made to meet the expected increase and demand while ensuring the fiscal sustainability of the medicaid
program? ms. verma: i think medicaid is a very important program. it's been the safety net for some many vulnerable citizens. when i think about medicaid program, i think about some of the individuals that i have met. one person in particular i think about is a quad a pliegic. he's on a breathing machine and requires 24-hour care. i think about the mother of a disabled child. this is the face of the medicaid program. as i think about medicaid program and where we're today, i think that we can do better. we have the challenge of making sure that we're providing better care for these individuals. but the program isn't working as well as it can. there is very intractable program. it's inflexible. states are in a situation where they are having to go back and forth doing reams of paperwork, trying to get approvals from the federal government. and at the end of the day are we achieving the outcomes that we want to achieve?
so as i think about the medicaid program, i think there is an opportunity to make that program work better so that we're focusing on improving outcomes for the individuals that are served by the program. chairman hatch: all right. in 2014 i worked closely with senator widen and leaders from the house ways and means committee to enact a bipartisan, bicameral law called the proving medicare transformation or impact act. the impact act serves as a critical building block-to-cheeve future medicare quality measurements and payment reform. specifically the impact act requires that -- it requires the collection of standardized data to have medicare not only compare quality across the different post acute care settings, but also improve hospital and post acute discharge planning. our goal was to produce
data-driven evidence that congress can use to debate the best ways to align medicare post-acute payments that improve patient outcomes and save taxpayer dollars. and our intention is to ensure that we're able to do this type f thing. i want to ensure the beneficiaries are receiving the highest quality post acute care services in the right setting at the right time. now, will you commit to working with me, members of congress, and this committee, and the post acute provider community on the implementation of the impact act? ms. verma: it would be my pleasure to work with the committee, stakeholders, and anyone else that was interested to make that program a success. chairman hatch: thank you. we'll turn to senator wyden. senator wyden: thank you very
much, ms. verma. thank you for your testimony. i want to start with a comment you made that you were committed to coverage, which of course is what this is all about. unfortunately, what i have seen since the beginning of the year has been basically about rolling back coverage. in fact, congressman price sat in your seat a couple weeks ago and refused to commit to making sure that no one would be worse off in terms of coverage. now, the president said in his campaign, quote, we're going to have insurance for everybody. the american people are going to have great health care, much less expensive, and much better. that's what the president said. sterday c.m.s. did the exact opposite. the first rule to come out of the agency, the agency that you would like to head, after secretary price was confirmed,
meant less coverage, higher premiums, and more out-of-pocket costs for working families. how would you square what president trump said in the campaign with what c.m.s. did yesterday? ms. verma: in terms of the rule that you speak of, i have not been involved in the development of that rule out of respect for the committee and for the nomination process. i have not been involved in that. i have not been to c.m.s. i haven't been involved in that and can't vehicle to that. what can i tell you is that i am committed to coverage. i have been fighting on this issue for 20 years. i will continue to do that if i'm confirmed. senator wyden: i just read you quotes it's not like atomic secrets or classified materials. what the president said is very different than what c.m.s. did yesterday. and you read newspapers. you are a pretty informed person. talked about cutting the
enrollment period. i'm looking at the headline, cut the enrollment period in half which really is going to limit our ability to get the very people we need most, the younger, healthier people, one more try. how would you square with the president -- what the president said with what happened yesterday? ms. verma: i think the president and i are both committed to coverage. i cannot speak to the rule. i have not had an opportunity to review that. but again i think the president and i both agree that we need to fight for coverage and make sure that all americans have access to affordable, high quality health care. senator wyden: what troubles me about yesterday is once again insurance companies are coming first and patients come later. tell me one thing you would change to put patients first. ms. verma: one thing that i would do is i think what's very important is that patients be in charge of their health care.
patients get to drive the decisions about their health care. that they get to make the choices about what kind of health care plan works well for them. i think it's important that our quality have access to coverage, to the doctors, to their choice of doctors, and their choice of plan. get us wyden: could you a specific on that? because that's an admirable philosophy, but i still don't know -- yesterday was good for insurance companies. and it was bad for patients. i'd like to have a specific example, and we'll keep the record open, of something you would do to put patients first. and i respect the fact that you have articulated a philosophy, but i really want to know a specific about what you do to put patients first. let's move on with respect to another area of responsibility you'll have and that's prescription drugs and medicare. we all know that these prescription costs are just
clobbering families and seniors and federal government and a whole variety of stakeholders that you refer to. as the administrator of the agency, you are going to have an opportunity to address this problem. the president's been vocal on it. again, give me a specific change to medicare part d that you would suggest to bring costs down. ms. verma: i think that the issue of drug pricing is something that all americans are concerned about. anti-president is concerned about that as well. people want to make sure that when they need the drugs, when they are going through an illness, think about my mom, i think about my neighbor, and when they need the drugs that they need, they want to know that they have access to it and that it's affordable. i think we're all concerned about that specific issue. part d i think has been a good program. it has expanded access to medications for people that didn't have it before. and i think the structure of the
program in terms of how it put senior citizens in charge of their health care, they can go on plan finder, go online -- senator wyden: my time, i voted for part d. still got the welts on my back to show for it. i asked you for specific change going forward that you would do to help seniors and others hold down their costs. as you know, there's discussion of making changes so that medicare could bargain. is there one specific you could give me -- the reason that the medicare question is so important is not only does this affect older people so dramatically, but your experiences on the medicaid side. i respect that. people have different experiences. so i very much would like to hear a specific on this key medicare issue that you would actually be for. ms. verma: i would be for policies that continue to put senior citizens in charge of their health care.
that puts them in the driver's seat of making the decision that is work best for them so that they can figure out what plan covers the medications that they need. what plan is affordable to them. and allows them to make the decisions about their health care and that gives them access to the medications that they need. that doesn't limit that in any way and that is affordable to them. senator wyden: my time is expired. i still didn't get the specific example. i happen to be for a host of things on transparency, on negotiation, on trying to make sure that we squeeze more cost savings out of the middlemen. i'm going to hold the record open, but i have asked you for specifics in two areas -- putting patients first, and how you would hold down the cost of part d. didn't get a ly i didn't specific hold the record open. i think senator grassley, are you going to call out names on your side?
senator grassley: i'm next. senator wyden: that didn't take much time. senator grassley: what aim going to talk to you about is things that have happened. c.m.s. in the past. and hopefully coming from an administration that wants to drain the swamp, i think i would expect changes to be made under your leadership in this agency. and i would suggest that you probably can't do anything about the suggestion i'm going to give you to respond to -- the last question of my colleague. but if you would push doing away with pay for delay programs between brand drugs and generics, it would go a long ways to helping get drugs cheaper. c.m.s. has told me that it does not have much authority to do anything about some frauds committed against its programs even those -- even if those
actions are in c.m.s.'s own words, quote-unquote, a clear violation of the laws. common sense tells me that if it's a clear violation of the law, c.m.s. can do something about t if that's their attitude there, i would ask you to see whether the past interpretation is right by checking that interpretation. but in a january 28 letter to me about the medicare drug rebate program, c.m.s. said it could tell a manufacturer when its drug is misclassified and then quote-unquote, attempt to reach an agreement. in other words, after the money's been stolen from the taxpayers, take some trouble to get it back if you can reach an agreement. but there are a lot of tools that the government has to fight fraud. and the most effective one we have is a false claims act.
since 1987, when i got that law in place, the department of justice has used the false claims act to recover more than from juston just lost the health care fraud alone. but cooperation between the department of justice and health care program administrators is very important in these cases. it seems like c.m.s. could at least picked up the phone and given the department of justice a head up when she's manufacturers refused to cooperate and properly classify their drugs. a pretty simple question, might even be called a softball question, but it's important to mee. would you commit to proactively cooperating with the department of justice and-n fraud cases and to fully supporting the use of the false claims act to combat fraud on government health care
programs? ms. verma: i will absolutely do that. and i applaud your efforts on the false claims act. i think it's been an integral component of preventing fraud and recovering dollars when there is fraud. i thank you for your service and your work on that. senator grassley: next question. in the fall of 2016 and january of 2017 i sent several oversight letters to c.m.s. regarding the steps that it took to hold miland accountable for misclassifying the epipen as a generic under the medicaid drug rebate program. c.m.s. has publicly stated that it, quote, expressly advised myland that their classifications of the epipen for purposes of the medicaid drug rebate program was incorrect, end of quote. however, c.m.s. has failed to fully respond to my oversight requests and refuses to provide
records of communication with mi mylan. c.m.s. has also not been entirely as to what the authority has to do with -- to correct drug misclassifications. because of epipen's misclassification, the government and states are owed hundreds of millions of dollars from mylan, congress, and the american people are owed answers. so if confirmed, would you commit to fully responding to my oversight request and providing the requested records of communication beyond mylan and c.m.s.? i hope that's a short yes. ms. verma: that's a short yes. senator grassley: in light of epipen's misclassification and potentially other drugs that have been misclassified under medicaid, what steps will you take to ensure that drugs are properly classified under medicaid?
ms. verma: i think what happened with the mylan pen and epipen issue is very disturbing. the idea that perhaps medicaid programs, which are struggling to pay for those programs, that they could have potentially received rebates is disturbing to me. so film' confirmed, i would like to review the processes in place there in terms of the classifications. in terms of brand and generic to ensure at that type of thing doesn't happen again. senator grassley: what you just said you want to do i want to do. that's why i want those communication from c.m.s. i hope you'll get them for me. ms. verma: i hope you'll -- i'll be happy to get that to you. senator stabenow: first thing, many questions i have. first regarding medicare. do you believe that medicare programs should negotiate the best price for seniors on medicare? ms. verma: i think we need to do
everything that we can do to make drugs more affordable for seniors. i'm thankful that we have the b.m. -- p.b.m.'s and the part d programs that are performing that negotiation. senator stabenow: do you believe we could get a better price if medicare was negotiating was the v.a. does, as other private entities do to get the best price for seniors? ms. verma: i think that competition is the key to getting good prices. i think -- senator stabenow: is that yes or no? ms. verma: i don't think that's a simple yes or no answer because i think there are many ways to achieve that goal. and the goal is to make sure that we're getting affordable prices for our seniors. if we look at the part d program and the way the p.b.m. has negotiated this, we know that when there is a lot of competition, the price goes down. i think we have to figure out ways and i'm happy to work with you on that, but how we can increase our competitiveness and support the part d program. what i like about the part d program is it puts seniors in
charge of making the decisions about the drugs that they need. using the plan finder tool, it can go in there. they can put the medication -- senator stabenow: i don't have a lot of time. under the repeal of the affordable care act, actually seniors would begin to pay more because the gap in coverage for those who have to use a lot of medicine would appear again. so we have closed that. no gap for seniors. that would reopen. do you support that? as part of the repeal? ms. verma: i think as i said before, i think it's important to help seniors get the most affordable drug prices -- senator stabenow: you support a gap in coverage for seniors under medicare part d? ms. verma: i support seniors having access to affordable medications and the medications that they need that they choose. senator stabenow: let me ask now about -- follow up more on yesterday's decision regarding
c.m.s. one of the things that they decided to do yesterday was to cut in half the open enrollment period for people to be able to get insurance from three months to six weeks. do you support that? ms. verma: i haven't had a chance to review that rule. i was not involved in the development of that. senator stabenow: does that seem like a good idea? ms. verma: i want to review the implications of that. with respect for this process i have not been to h.h.s. have not been to c.m.s., and have not been involved in the development of that rule. i would look forward to reviewing that. and would be happy to report back to -- after i had a chance to review that. senator stabenow: when we look at another really important southwest provisions in the affordable care act, something i call -- important set of provisions in the affordable care act, something i call insurance, has more ability right now to get care that they
are paying for through their insurance. not just the decision of the insurance company. so there are a number of different things that it folks can now count on. one is having an essential set of basic health care services. that are defined. so that when insurance companies are getting -- everybody knows is a basic set of services, a as woman you'll get maternity care. that mental health will be covered the same physical health or substance abuse services. so there is a basic set of services. do you support having that as a basic set of essential services in our health care system? ms. verma: i support americans being in charge of their health care. i support americans being able to decide what benefit package works best for them. i think it's hard to know what works for one person might not work for another person.
i think it's important that people be able to make decision that is work best for them and their families. as a mother of two children, in a family, i know what we're looking for, but what i'm looking for might not work better for another family. so i support americans being in control of their health care and making the decisions that work best for them and their families. senator stabenow: do you believe women should have to pay more to get prenatal care and basic maternity care as coverage, as a rider, extra coverage? ms. verma: i'm a woman so i certainly support women having access to the care that they need. i have two children of my own and i have appreciated -- senator stabenow: should we pay more for health care because we're women? ms. verma: i think that women should be able to make the decisions that work best for them. senator stabenow: if the decision is made by the insurance company what to charge, how do we make that decision prior to the affordable care act, i have said many times, about 70% of the
insurance companies in the private marketplace didn't cover basic maternity care and basically looked at women as being pre-existing condition, being a woman. different kinds of health services that we need weren't provided. weren't viewed as essential services. that's changed now where women have what are basic services for us covered as basic services where we don't have to pay extra as a rider in order to get basic care. so i'm just asking do you think that makes sense? ms. verma: obviously i don't want to see women being discriminated against. i'm am with and i appreciate that. i also think that women have to make the decision that is work best for them and their family. some women might want maternity coverage and some women might not want it, might not choose it, might not feel like they need that. i think it's up to women to make the decision that works best for them and their families. senator stabenow: thank you, mr. chairman.
chairman hatch: as you kimm imagine we're now having two votes. so -- there's nobody here to question. so i think what i'll do is recess for about 15 minutes. sorry to interrupt like this. but that's the life of a u.s. senator. and we sure appreciate you and appreciate your patience. i appreciate the way you are answering these questions straight up. and your expertise really comes through. with that i'll just recess for about 15 minutes. hopefully i can get the second vote and be right back.
>> thank you, mr. chairman. and congratulations on your nomination, ms. verma thank you for paying a courtesy call to my office. we had a very good discussion. you have a very impressive record with regard to medicaid, more especially pushing for greater innovation and flexibility in the program. i must say your opening statement was not only relevant, right on point, but inspiring as well. thank you for that. senator roberts: i think i would speak for all members of the committee. we need to make a copy of her statement available, mr. chairman, virtually every member, maybe test them on it. chairman hatch: i agree with that. senator roberts: as co-chair of the senate world care health
office, i'm concerned how regulations coming out of your agency work or do not work about our small and rural providers and how we harness the delivery models better tailored to their communities and their needs given their low volume of patients and high number of medicare and medicaid patients. i know you're familiar with that with your work in indiana. how do we work to include our small and rural providers and quality improvement programs without disadvantaging them due to the unique populations they serve? secondly, would rural relevant quality measures or different data thresholds be more appropriate to encouraging participation in certain value-based purchasing and/or pay for performance programs? ms. verma: thank you for your question, senator. rural health providers have very unique and special challenges. often they are the only providers in their communities that are providing services, and so when people come to them,
they are dealing with a variety of different health issues. it's not just primary care and preventive care. it could be specialty care. they don't always have access to those services. the challenge for them is even attracting a work force and finding providers to come out to those regions is a challenge and difficult. and because they have those multiple challenges, it's difficult for them when there are lots of rules and regulations coming down from the federal government. . as a small business owner, working with small physician offices, you understand that it's difficult sometimes when they're on the front lines and they're trying to manage such very complex situations, to also deal with rules and regulations is difficult. that being said, we want to assure that all americans have access to high-quality health care. but i think we have to be very careful with our rural providers to make sure that we're not putting additional burdens on them that actually, you know, impact accessibility
to care or quality to care. i think when it comes to rural providers, we need to support them through the process. we need to make sure that they have the appropriate technical assistance to get where they need to be, and understanding that, you know, understanding that the demands that they have on their time might impact their ability to implement those regulations. >> i really appreciate that. i think we have 83, probably more today, critical access hospitals. i know you have the same situation in indiana. thank you for your statement. mr. roberts: as a member of both the health and finance committee, as many of my colleagues are, we often see a disconnect between new and exciting therapies that are proved by the f.d.a. and reimbursement policies from c.m.s. take biosims, for example. last year only one, one bio similar was approved by the f.d.a. c.m.s. proposed and finalized a payment policy that could stifle innovation in this area.
how would you anticipate working with the f.d.a. to ensure c.m.s. is developing the best payment policies for patients and providers in the taxpayers -- and the taxpayer? ms. verma: i think collaboration and coordination is crate cal within h.h.s. i'm -- is critical within h.h.s. i appreciate secretary price and his leadership there. careful coordination and collaboration between similar agencies or sister agencies is important. i think being on the front end and discussing with them, understanding what their intentions are, what's coming down the pipeline, and making sure that c.m.s. is prepared and coordinated with any efforts that the f.d.a. has. mr. roberts: i must tell you that, in the rural health care delivery system in talking to many of my hospital administrators, and rural providers, you're in charge of c.m.s.. the term used a lot in the past has been, it's a mess. i know you're going to fix
that. a -- c.m.s.'s center for consumer information and insurance oversight, societal. that's the new acronym. i was not aware of that. i thought i knew most of them. it has responsibility for developing and implementing policies in rules governing and administrating the marketplace. what role do you see it playing under your leadership? ms. verma: if i'm confirmed as administrator, my job is to implement the law. they're playing with a role with the current law. so i would like to -- look to congress and its efforts around addressing the affordable care act. my assessment of the role will depend on how congress decides what to do with the affordable care act. i make that decision based on the ultimate outcome of congress' decisions around the affordable care act. mr. roberts: i must say, mr. chairman, that i'm impressed
with your statement. i know that we are to have several senators talk about unraveling of obamacare, we had an entire insurance company leave the market. we have another one describing it as a death spiral. i think we need to see a rescue team to make sure that bridge is still there. but build new bridges. i think that would be my take on that. thank you so much for your testimony. and thank you for the leadership that i know you're going to bring to c.m.s. ms. verma: thank you, senator. >> thank you, senator. while we're waiting for other questioners, let me just ask a question. one of the issues this committee has focused on over the past three years is a large backlog of medicare appeals resulting from audits performed by c.m.s. contractors. at the same time, improper payments pose a real threat to the financial well-being of the medicare and medicaid programs. mr. hatch: so what are your views on how to balance the need for robust program
claims y and also accuracy with the need to ensure timely payment to providers without causing them too much undue burden? ms. verma: i think that that's a very important question. fraud and abuse, if i'm confirmed, would be a top priority. that's what i'd call -- should hanging fruit. as we look ated medicare program and assuring its sustainability, over the long term, and given the medicare trustees report, about the future of medicare, and running out of money at some point, we just can't afford to waste a single taxpayer dollar. if i think about fraud and abuse, especially with fraud prevention, looking to have efforts really be on the front end. not waiting to do a pay and then chase, but really on the front end, addressing fraud. so as we're developing programs to make sure that we are
putting those procedures and policies in place, so that we can identify fraud and abuse on the front end. i think the issue that you raise in terms of the backlog and the burden that it puts on providers is something that concerns me. we want to make sure with c.m.s.'s policies that we aren't preventing providers for participating in the program and being active in it. the backlog and things like that have really made it difficult for providers, where they're having to -- they're not getting paid for these types of issues. and so i think it's a balance that we have to strike with billion being aggressive on proud to -- with being aggressive on fraud and abuse, penalty efforts on the bad players without penalizing providers that are trying to do the right thing. mr. hatch: thank you. states are increasingly moving their head cade programs into a managed care delivery system -- medicaid programs into a managed care delivery system. with managed care now representing almost 40% of federal medicaid spending. in the last year, the c.m.s.
released an updated regulatory framework for medicaid, managed care. what if any changes do you believe are important to federal and state oversight of medicaid managed care? ms. verma: i think managed care has been an important opportunity for states. it gives them the ability to set a rate with providers and hold the manage care companies accountable for meeting that financial demand. and it's also an opportunity to set -- to identify goals and outcomes and hold these companies accountable for the care and the outcomes that they serve. that they provide. in terms of the regulatory framework and the managed care rule, i think that we probably need to move to an era where we're holding states accountable for outcomes. but having states having to go through pages and pages of regulation, my question would be for that regulation is, what
does it do to improving health outcomes for the individual? i'm all about wanting to make sure we are being appropriate with our health care dollars and managing resources effectively. but when we look at regulation, is that regulation helping states improve health outcomes? states will spend millions of dollars implementing that particular regulation and i think we have to ask ourselves, what will we achieve? so i think there are some important developments within the managed care regulation. but if i'm confirmed, i'd want to take a look at that to make sure that we are not burdening states with additional regulations. mr. hatch: ok. let me ask you this. your written statement alludes to providers struggling to deal with administrative burdens. while we certainly need providers to be accountable, for the care they provide, and the associated government spending, it is crucial to minimize the regulatory requirements that take time away from treating patients.
we've heard concerns regarding the very specific requirements that are a part of medicare and medicaid electronic health record and the medicare -- medicare and medicaid electronic health record incentive program. we also hear that many other requirements are unneeded or outdated. so how do you think c.m.s. can best go about the important task of reducing unnecessary regulations? ms. verma: i think one of the places to start is by talking to doctors and having open communication and collaboration with physicians. if i'm confirmed that would be a priority for me, to touch base with our providers and understand the issues that are getting in the way of them being able to provide high-quality care to the patients that they serve. i would want to identify the types of regulations and ovisions that are asking
providers perhaps to consider maybe not participating in the program. so i think starting with that open communication and dialogue and working with them to understand what their concerns are. mr. hatch: thank you. i think i'll turn to senator widen for any questions he -- wyden for any questions he has. mr. wyden: thank you very much, mr. chairman. you know, again, i'm just trying to get a sense of how you would approach some of these things. that's why i asked apropos of what c.m.s. did, just one example, specific example, about putting patients first, same thing with respect to medicare part d. this committee, as the chairman touched on, colleagues touched on, both feel -- members feel very strongly about rural practices and rural patients and we feel very strongly about making sure that we get mack
are a right. when i'm home in oregon, i guess geth asked about -- i get asked about two key parts of the new payment system a lot. i get asked about virtual groups and the definition of more than nominal risk. people say, hey, what's this going to mean for the small and rural practice? now, obviously this is not dinner table conversation either. but for the doctors in rural oregon, small practices, they say, this is really going to tell us about whether we're going to get to succeed in this brave new world of payment systems. so tell me a little bit about how you as administrator would look at something like this. senator thune, for example, has also been concerned about the virtual groups.
how would you go about structuring and implementing these virtual groups? ms. verma: i think that small providers, rural providers, in terms of mcra, i think it's going to be a challenge for them. i think it's a worthy goal but we're going to have to be supportive of them through the process of implementing it. in terms of providers staking risk and especially smaller -- taking risk, and especially smaller providers, i think that's a larger mountain to climb. i think they're going to be reluctant to take risk. when they're starting out. many small providers and rural providers don't have large financial reserves that bigger health systems have. in terms of putting them on the hook, a lot of when we think about outcomes, and health outcomes and holding providers accountable for outcomes, a lot of that also depends on patients and i think think being strategies, how we can engage patients to be a part of that equation, so that they have the same investment, they
have some investment to work with their providers towards achieving outcomes. in terms of smaller providers and rural providers taking on risk, i think that's going to be a formidable challenge. mr. wyden: on virtual groups, what is your take on, let's say, the most important thing to make them work? ms. verma: i think that we have to continue to work with them, to understand what their specific concerns are. and try to address it. those are going to be challenges we're going to have to work through with them. what i have found is listening to folks, understanding what they're concerns are, and trying to see to the best of our ability if we can try to ddress those concerns. mr. wyden: about what about the whole question of nominal rissk? i want to keep this open-ended enough so this is not, you know, i want to hear about paragraph three, line two i
just want to get a general ense of how you'd approach it. this is what rural physicians and patients are going to talk to me about. i'm going to have town hall meetings in a couple of days. how about nominal risk? ms. verma: i think that this is the challenge here. i don't know that rural providers and small providers want to take risk at all. when we're designing these programs, we have to keep in mind that -- their specific needs. taking on risk is something that insurance companies have done. some of the larger health care systems have done. if we look at some of the models we know that very few providers, even large health care systems have been comfortable taking on risk. i think this is going to be a considerable challenge for the smaller providers. some of them may or may not want to do that. mr. wyden: when i listen to that it sounds to me a little bit like ms. verma wants to keep fee for service.
ms. verma: ms. verma, you know, i think c for service. there are definitely concerns with fee for service. that is rewarding volume over quality and outcomes. i'm not suggesting that works better. i think there is something to efforts nd i support to increase coordination of care and to hold providers accountable for outcomes. i think, though, in terms of -- there's also holding providers accountable for outcomes and it's another thing altogether to have them accepting risk. mr. wyden: let's do this like we did the other two questions. i would like in writing, because this is so important for rural practices, rural providers, i would like just even one specific that you would pursue to try to address these issues. the reason i'm asking is because it is a big list. there's no question about that.
there is no question that trying to keep a rural practice open is a big lift. but these are the questions that providers are going to to ask me. when they see me, they say, ron, you're on this committee, you deal with these issues, how's the government going to go about doing it? i'll have one additional question later, mr. chairman, but let us add that to the matter of the specifics. both with respect to putting patients first as opposed to insurance companies first, as we heard yesterday. and the pharmaceutical question, where i would like a written answer. i think given the fact that these matters are moving on a fast track, we are going to eed to have your answers certainly within the next three days or so.
ok? i'll have one additional question later, mr. chairman. thank you. mr. hatch: why don't you ask it now? mr. wyden: we only have a couple more minutes on the vote. that's part of the reason we have -- mr. hatch: is this the second? mr. wyden: yes. mr. hatch: we both have to go, don't we? mr. wyden: mr. chairman, if you're willing, we could do the vote -- i have one additional question. i assume you'll want to make a closing statement at the end. and i would like to too. we also have some senators coming back. i think -- [inaudible] we'll come back. mr. hatch: we still have 10 minutes on the vote here. mr. wyden: we'll come back. mr. hatch: ok. let me use a little bit of this 10 minutes and ask another question. there's great provider interest in participating in various medicare projects that change the way payment is made to incentivize providers, change the way that they deliver care. many of these alternative
payment arrangements are being run through the centers for medicare and medicaid innovation center. but others are being conducted independent of it. such as the good portion of the accountable care organization program. while all of these programs evolve some type of formal evaluation, there is understandably great interest in knowing what works and what does not. as soon as possible. what is your view to testing different medicare payment to best and how assess the results? ms. verma: i think a couple things. one, first of all, i would say that i support efforts around innovation. it's important that we're always trying to climb the highest mountain. and that we're never satisfied with where we are. we're always trying to figure out how to do better, how to get better quality care, better health outcomes, improvinged delivery of services. innovation is important. but as we're looking at testing new ideas, i think that
process has to make sure of a couple things. we need to make sure that we're not forcing, not mandating individuals to participate in an experience or -- experiment or some type of a trial that there's not consent around. i think that that's very important. that's what i would say first off. in terms of evaluation, evaluation has to be -- is an important component. obviously that's why we're doing it, to understand whether that can be transferred or whether it can be used for a larger population or for policy of the program. so evaluation is a critical component of that. that needs to be set up on the front end. it needs to be -- before the evaluation goes full scale, i think it should be done on a small population or a small frame first before it's expanded. that evaluation needs to be done on the front end, all the way throughout the process. i think as it's expanded or before it's expanded, those results should be shared with stakeholders. and i hope with members of congress. there should be a discussion
about that before that becomes formal policy. mr. hatch: thank you. let me ask one more question. while we're waiting for some of the senators to get back. then i'm going to have to go vote again. seniors have a choice whether to enroll in the traditional government-run medicare fee for service program, or in an alternative private insurance option called medicare advantage. according to c.m.s., approximately 18.5 million people, roughly 32% of all medicare beneficiaries, are estimated to have signed up for a medicare advantage plan this year. generally medicare advantage plans offer extra benefits such as dental, vision, hearing and wellness or require smaller co-payments or deductibles than traditional medicare. sometimes seniors pay a higher monthly premium to get these extra benefits. but also they have plan
savings. traditional medicare does not limit patients' out of pocket spending for part a and part ber ises -- b services, causing some seniors to buy supplemental coverage called medigap insurance. people who do not have retiree coverage or who cannot afford medigap supplemental insurance find medicare advantage plans offer the extra benefits traditional medicare does not cover. and protect them from higher than expected out-of-pocket spending. i had a lot to do with medicare advantage by the way. i'll tell that you in advance. can you commit to working with this committee and congress to preserve and strengthen this successful medicare advantage program? ms. verma: i can and it would be my pleasure to work with you on that. i think that the medicare part c or medicare advantage has been a great program for seniors. what i like about it is that the offering choices for seniors. they have the ability to figure
out, again, just like in part d, what plan works best for them. the fact that it provides them the opportunity to have additional benefits, vision and dental services, i think is very important. the fact that it just provides more choices for seniors is an important component of the program. i'd be happy to work with you on that. mr. hatch: thank you. i notice that one senator is going to pass. dr. cassidy is here. i'm going to call on him next. en -- i have to have staff follow up on this. thank you for being here. i don't think i'm going to be able to get back. we'll just continue on until we get this hearing over. senator cassidy.
mr. cassidy: thank you. [inaudible] we are both familiar with the data from m.i.t., the national bureau of economic research, that showed the expansion in some states of medicaid expansion, not the expansion, but medicaid expansion, really didn't do much more outcomes. but the healthy indiana plans seems to have had an effect upon outcomes. can you just comment the nature of the structure of giving folks health savings accounts, requiring some info on their part, what that did both for expense, as well as for outcomes? ms. verma: thank you for your question. it's always a pleasure to talk about the healthy indiana plan. i appreciate the opportunity. the healthy indiana plan is about empowering individuals to take ownership for their
health. we believe in the potential of every individual to make decisions about their health care. mr. cassidy: i'm going to interrupt you occasionally. there are some that say that health savings accounts, even pre-funded, are not appropriate for those who are lower income, suggesting they lack the technical ability or the sophistication with which to handle that. but you're suggesting that the healthy indiana program, which i assume was 13% federal poverty level? ms. verma: it starts at the very lowest level of the poverty spectrum. so even people at 0% or people don't have income -- mr. cassidy: they were enrolled in your plan as well? ms. verma: they were enrolled in our plan. just because individuals are poor doesn't mean they're not capable of making decisions. it doesn't mean that they don't want to be able to have choices and that they don't -- that they shouldn't have those choices. they're very capable of making decisions about their health care. just because somebody's poor doesn't mean that they shouldn't have choices. and that they're not capable of making decisions that work best
for them and their families. mr. cassidy: what i found intriguing about your plan, it's my understanding that e.r. visits went down. whereas in other states, when there was an expansion, there was a bump-up in e.r. visits. the healthy indiana plan, e.r. vifments went down. but i think you have data that outcomes improved? unlike the national bureau of economic research, which found that outcomes did not improve. ms. verma: so, the healthy indiana plan, what we've seen is that the individuals that were actively engaged in making contributions to their health savings accounts had better outcomes. they had more primary care, more preventive care. they had lower e.r. use. they were more satisfied with their care. and we also show that they had better adherence to the drug regimens that their doctors prescribed. all across the board. mr. cassidy: some might say that -- [inaudible] -- splitting it between those who make contributions and those that did not, that you ended up with two different populations. that the bill reflected
something underlying. did you find that to be the case? ms. verma: what we found is that the individuals that were actually making the contributions towards their care, they were actually sicker individuals. so they had more complex illnesses. and yet when they were making contributions towards their care, they actually had better health outcomes than individuals that were healthier to start with. mr. cassidy: really? so the folks who were sicker, theoretically left disposable income, they can't work as much, they valued health care more. this reflected in their contribution. but there was a positive correlation between adherence? ms. verma: that's correct. they had better drug adherence, more preventive care. these weren't by small margins, i would add. when we look at primary care and preventive care, these were margins by about 20% for primary care and preventive care. so they were significant differences for individuals. i think what it shows is that we can empower individuals to
take ownership for their health and that people, just because they don't have income, doesn't mean that they're not capable and that they don't want to have choices. we believe in the dignity and the potential for individuals to make decisions and they're happy to do that and they have better outcomes. mr. cassidy: i think the key factor here, they speak of the activated patient. you're use the term empowered. that seems to be the critical factor here. to what degree do we -- the patient engage as a partner in their health, what degree does she participate? both related to each other, but that in turn ends up again, positive outcomes, lower cost. ms. verma: that's what we've seen. even with the healthy indiana plan, if we compare the healthy indiana plan to other states, we've actually been able to do it, it costs less, we've been able to reduce the number of uninsured in our state at higher levels than other states that have run more traditional programs. so we've done it at a lower cost, had better outcomes and reduced the number of uninsured.
mr. cassidy: inevitably there is a federal role in this. is it possible you could reduce the federal role to zero in a plan such as yours, and it still be viable in a state with high poverty rate? ms. verma: in negotiating -- indiana, negotiating the healthy indiana plan and being able to -- the waivers, this is something that governor daniels actually asked the federal government, can we use the healthy indiana plan for the medicaid expansion? and he even asked this before the supreme court decision which made it optional. it took us -- so he wrote that first letter in 2010. it took the federal government almost five years to make a decision about whether the this program could work. -- whether this program could work. that's something we need to look at or that i would hope that congress would want to work on. that type of back and forth -- mr. cassidy: the process can be made for efficient but there's federal dollars. ms. verma: exactly. mr. cassidy: thank you. i yield back. >> thank you. senator nelson. mr. nelson: good morning.
i enjoyed talking to you on the telephone. do you support turning the medicare program into a voucher system? ms. verma: i support the medicaid program -- or the medicare program being there for seniors. people are making contributions into that program. mr. nelson: would that include the voucher system? ms. verma: i think that -- i don't support that. i think what i do support is giving choices to seniors and making sure that that program is in place. what we've seen is i think efforts, i think there's a lot of concern about the future of -- mr. nelson: excuse me for interrupting. i did not understand. the fellow who is not the -- now the secretary of h.h.s. had taken a position as congressman supporting the voucher system. turning medicare into a voucher system. do you support that? ms. verma: let me back up with my answer here.
and try to explain this a little bit more. i think that what i've seen in terms of different types of options that are being discussed around medicare, those are borne out of individuals that want to make sure that that program is around. i want to make sure the program is around for my kids. what we know from the trustees' report -- mr. nelson: to make sure that it would be around, you'd consider alternatives? ms. verma: i think that -- i'm not supportive of that. i think that we need to make -- but we -- but i think it's important that we look for ways of making sure that the program is sustainable for the future. mr. nelson: let me give you one of the alternatives. one of the alternatives is to increase the age from 65 to 67. do you support that? ms. verma: i think ultimately what direction we go into is up to congress. as the administrator of c.m.s., my job would be to carry out whatever congress decides is the best course of action for the medicare program.
i would hope that we would work towards making the program more sustainable, so that it does exist for future generations. and that it's a program that provides high-quality care, accessible care, and gives seniors options. mr. nelson: you don't think you should be involved in policy. you said, leave it up to congress. ms. verma: i think it's the role of the c.m.s. administrator to carry out the laws that are created by congress. mr. nelson: let me ask you, there's another availability that seniors enjoy. which is the doughnut hole was closed. which means that seniors in florida spend about $1,000 less out of their pockets by drugs being reimbursed through medicare. so, in the medicare prescription drug program, now, i know that you just had a question close to this. but what i need to know is, do
you support the provisions in close the that coverage gap to make prescription drugs more affordable? or closing the doughnut hole? yes or no? ms. verma: i support efforts to make the availability of medications affordable and accessible for seniors. i want to make sure that they have choices about the medications that they need and that that coverage is affordable to them. so i support efforts. in terms of -- mr. nelson: let me -- i'm running out of time. i'm just trying to get clear your thinking on this. if a senior, since you support making drugs affordable to seniors, but if a senior had to pay $1,000 more out of their pocket per year for their drugs, is that something that you would support? ms. verma: ultimately what happens with doughnut hole is
really up to congress and how we move forward on this. as the role of the administrator, my job would be to implement the policy or the legislation that is developed by congress. mr. nelson: back to the policy by congress. ok. here's one you may be able to answer. ow about, as you know, on dual eligibles, the federal government gets a discount from the drug companies for the dual eligibles that are eligible as medicaid until they get to 65. then they get their drugs from medicare. but then there is no discount. would you support requiring drug manufacturers to pay drug rebates to medicare for the dual eligibles? ms. verma: as i said before, i support efforts to make drugs more affordable to seniors. i think this is an issue that we're all concerned about. the president's concerned about as well. we need to make it more affordable. i would look forward to working
with congress on strategies that can help it be more affordable, while maintaining accessibility and ensuring that our seniors have access to the drugs that they need. mr. nelson: i'm sorry that you have the constraints put on you so that you can't answer these questions forth rightly. those are the questions that i can tell you senior citizens are begging to hear the answers. because if you had approached this as candidate trump had, saying he was going to protect met care and social security -- medicare and social security and not have any cuts, your answers would be different. and they would be clear. but you've chosen to go the route that you have and i'm sorry that you have those kind of constraints. thank you, mr. chairman. >> thank you, senator nelson. for the benefit of the members of the committee, the order remaining of those who haven't asked questions is isakson,
brown, heller and scott. that's the order we'll go in. unless somebody comes in who isn't on the list. i'll take my time now. first of all, i'll just make a statement. you don't really have to comment unless you want to. words are strange things sometimes. they can be used depending on what you want the ultimate goal to be. mr. isakson: in the veterans administration, and i'm the chairman of the veterans' affairs committee, three years ago, republicans and democrats joined together to create what was known as the choice program in terms of v.a. health care benefits. to try and expedite veterans getting services and to maximize the use of the v.a. and the private sector. in the first year of that program, there were two million more appointments filled through the v.a. than the previous year and all those were because the access to the private sector gave the veterans better access. so the veteran had the choice and used the private sector and the veterans administration to do it. i think that's a good example of where choice made a difference. delivered health care. didn't change the cost. made accessibility better and
made the program work better. so choice is not a bad word. choice can be a very good word and the congress did that three years ago in august and it's been a good program that's worked ever since. are you familiar with that program? ms. verma: i'm not familiar with that program. but i do believe -- i agree with you that choice is critical. when there's choices, then there's competition and we've got folks that are trying to attract our beneficiaries to the system. so choice and competition are very important to driving better quality and outcomes and lower cost. mr. isakson: in georgia 1.9 million georgians on medicaid. 1.4 million of those are children. half of the children born in my state are born with medicaid, medicaid benefits. are you committed as we go through the reforms and the enhancements and the improvements of the program to make sure we keep children foremost in our mind for coverage? ms. verma: i am absolutely. as a mother of two children i certainly understand the importance of health care for children. one of the things i'm reminded of in my work with the medicaid
program and with the chip program, i remember hearing a story about a woman and it was after the chip program had been passed. but she talked about how she had a child, an infant, probably 1 or 2 years old, not infant, 1 years old. she had gone to the doctor and her child had an ear infection and the doctor gave her a prescription just for a simple antibiotic to treat the ear infection and she went home that night and she had a choice to make. as she filled the prescription -- if she filled the prescription, she wouldn't have enough money to pay for meals for the whole family. so she made the painful decision of not filling the prescription and feeding her family for the whole week. what happened to that child is that, because of his untreated ear infection, he ended up losing his hearing and going deaf. i'm always reminded of that story. that child now needs lots of different severs -- services to help him through and that's
something that could have been prevented. the very important that children have access to high-quality services. that's really important. so that we don't have situations like that. mr. isakson: thank you for your answer. are you familiar with the 21st century curious bill that passed? ms. verma: i am. mr. isakson: it's a great piece of legislation. senator warner and i had one of the provisions in that bill, which is very important to us, on home health care. it provided for reimbursement for durable medical equipment under part b, on holt care -- holt holm health care and home infusion through medicare. something we want to make sure we have. under the a.c.a., home health care was almost totally removed from being reimbursed and having had personal experience, i know holt holm health care is the best environment to deliver health care services and the least cost to the government. i hope you'll look closely at that 21st century curious and the home infusion provisions we've put into it. see they get implemented. ms. verma: i'd a be happy to work with you on that -- i'd be
happy to work with you on that. i applaud congress for coming together on a bipartisan basis to pass that law. i think the going to have a tremendous impact on health care of americans. i appreciate your efforts on that. would be happy to work with you. mr. isakson: lastly, just real quickly, when i was in the state legislature, years ago, the biggest thing we fought was a lot of fraud in medicare and medicaid. that's still a problem today. i am very familiar with, from the business i was in, the verification of eligibility is very important to make sure you have minimal fraud and minimal waste. are you committed to using commercial resources that are available in the private sector to verify eligibility where that's important? ms. verma: i am absolutely committed to that. mr. isakson: thank you very much. senator brown, i'm sorry to tell you, but senator menendez slipped in. so he'll be one ahead of you. mr. menendez: thank you, mr. chairman. ms. verma, congratulations on your nomination. one of the successes of the affordable care act was the establishment of a nationwide benefit standard called the
essential health packages, benefits package. one of my amendments to the law, which was adopted by this committee, was to ensure that coverage for behavioral health services like therapies for children with autism are available in every plan purchased through the market place. that's to ensure that a child in georgia or indiana or new jersey has equal coverage and equal access to the care that they need. i've heard from countless families about the anxiety they have over losing access to critical autism services through a change in the essential health benefits that allows insurance companies to deny coverage, which is especially akilet in states that lack a state-based requirement. do you agree that a child's access to insurance that covers a condition like autism should not be based on what state they live in? ms. verma: i appreciate your question. my husband's a child psychiatrist so he deals with
those issues on a day in and day out basis. i certainly understand the concern. i've been adviced by the office of government ethics not to -- advised by the office of government ethics not to participate on issues regarding mental health services because my husband's a psychiatrist. and that it could impact his practice. mr. menendez: autism is not a mental health issue. autism is an illness that we are still trying to develop the essence of its cause. at the end of the day, i use it by way of example. are you suggesting that you cannot tell the committee a simple answer to the question that it shouldn't matter where you live in the nation, that in fact you should have access to the same coverage as any other child? ms. verma: i think all americans should have access to the health care services that they need. however, in the issue that you're asking me to comment, i've been advised by the office of government ethics not to
participate on matters that, because of my relationship, my husband's practice, to not -- mr. menendez: did they define to you the list of thanges fall under this category? ms. verma: he does treat children with autism. they've asked me not to engage in matters that involve his practice. mr. menendez: that's pretty amazing to me. let me ask you this. as you know, congress has to act this year on a package of medicare extenders. which of those medicare policies do you consider to be your top priority? ms. verma: i've not reviewed that particular regulation. but would be happy to review that. if i'm confirmed and work with you on that. mr. menendez: let me just say, medicare is a big part of what c.m.s. deals with. i would have thought that in preparation for this hearing you'd have a sense of, these are extenders that are almost on an annual basis or biannual
of s, but it is heart giving us a sense of what you as the potential administrator would be advocating as it relates to medicare. your role as the c.m.s. administrator is more than just executing simply the laws of the country. which certainly you would. but it is also a policy development, heavy position, that the president and the secretary of health and human services and the congress lies on when drafting laws that ultimately would have impact in your parameter. so you have no idea as to which one you consider the most significant? ms. verma: at this point i would want to review that before i gave you my opinion on that particular area. mr. menendez: during our meeting in my office, you referred several times to
so-called able-bodied beneficiaries, as we were speaking about medicaid. do you believe that low-income and working class individuals who gained access to medicaid thanks to the affordable care act's expansion should be eligible for medicaid? ms. verma: i think that -- mr. menendez: i think that's a simple yes or no. my time is limited. do you believe that they should have access to medicaid eligibility? ms. verma: i think that all americans should have access to high-quality health care services. mr. menendez: that's not an answer or response to my question. i'm asking about medicaid specifically. ms. verma: when i think about the medicaid program, i think about it in two different parts. there's the part of the medicaid program that serves the age and the blind and the disabled. that's a very different population than some of the able-bodied individuals. but at the end of the day, all americans should have access to high-quality, affordable health care coverage. mr. menendez: i will just simply say, unresponsive to my
questions, i can't vote for someone to be the administrator one of the most significant agencies that affect the health care of people in the country if i cannot gleam from you in an open hearing under oath what your answers are to these questions. i have no answers. it's very difficult. very difficult. i have not reflexively been against the president's nominees. i voted for several of them. but you've got to give me more than that. i hope that your responses to written questions will be more enlightening for me. thank you, mr. chairman. ms. cantwell: thank you. ongratulations on your nom nation. when he a great discussion about innovation and the pacific northwest. i wanted to follow up on that. to my colleague's point, there's been a lot of discussion about block granting medicaid. are you in favor of that? ms. verma: i think that the -- when i think about the medicaid program, i will say that the medicaid program as a status quo is not acceptable. i think that we can do a lot
better for the many people that depend on this program. we're talking about disabled individuals, quadriplegics, people that are developally disabled, mentally disabled. and we can do a better job than what we have today in the program. we know that we're not delivering great health outcomes. there's been study after study that shows that even people that don't have medicaid have better health care outcomes. ms. cantwell: do you think there are problems with block granting medicaid? ms. verma: i think that when i look at this, i think we need to think about how we can make this program work better. the status quo is not acceptable. this is the united states of america and we can do better for our vulnerable populations. we can hold states kl cftcable for producing -- accountable for producing better outcome. ms. cantwell: are you endorsing block granting? ms. verma: i'm endorsing the program being changed to make it work better for the citizens that rely on it. ms. cantwell: so you're not endorsing block granting. i'm just trying to understand -- because this is the debate
de jure as far as i'm concerned. i know that several of our colleagues, probably those in the house, are very adamant about this. so i'm just trying to understand where you are on that question. whether you -- you eith railroad for it or against it or have concerns about it or endorse it. it's a spectrum. i'm giving you a little more room than my colleague gave you. ms. verma: i appreciate that. thank you. what i support is the program working better. and whether that's a block grant or a per capita cap, there are many ways that we can get there. but at the end of the day, the program isn't working as it should. when you've got one state spending $4,000, you have another state spending $15,000 for the same population, and can we show that the outcomes are better? can we show that that individual had accessible the high quality care? what we know is going on on the state level is that in terms of accessibility, 1/3 of doctors aren't taking medicaid patients. that means for a disabled person, that when they're sick, they call the doctor and some
of the doctors won't even take them and the doctors that are t.p.a. taking them, that he -- that are taking them, they're having to wait for a long period of time to get care. i think we can do better for these people. i support efforts to get thruss. ms. cantwell: i would say this. this whole notion that captating or block granting, we know what the results of those programs have been. we have numbers here that it's resulted in a 37% cut. if you just extrapolated that out, unless you assume that you have these states who would step up and cover those populations, my colleague, senator hastert, was talking earlier about the increase in population. the increase in population is what's driving the cost. so coming up with a better strategy for that population, like rebalancing that i had a chance to talk to you about, way more cost effective. in our state we saved $2.5 billion by taking people out of nursing home care and putting them into community-based care. but trying to captate or say we're going to block grant it
ends up, you know, if you just said to my state, well, and the state didn't come up with any more funds, if you a applied that same 37%, you'd be cutting over 100,000 people in king county off. or you'd be cutting 43,000 people in spokane off. or i calculated the numbers, again, just in extrapolation of what that 37% reduction, that over block granting programs have received over the last 15 years, it would be like cutting a million people in ohio off of medicaid unless the state came up with more money. so my point about this is, i hope you'll be much moran advocate for the innovation -- more an advocate for the innovation in medicaid. instead of trying to nickel and dime poor people on a co-payment or administrative costs, come up with a strategy like rebalancing that gives people real opportunities to deal with this population, save costs and keep people in a better healthy situation. so that's why i have grave, grave concerns about this
notion of block granting medicaid or the capitation as you mentioned. ms. verma: dry with you. this is what it should be -- i agree with you. this is what it should be about, innovation. what's going on with the medicaid program today is we have a very inflexible system. when states are trying to do creative things, i agree with you in terms of rebalancing incentives and giving medicaid beneficiaries the option of being served in the community, that's something we should support and we should do. but the way the system is set up is that states have to go to the federal government for any routine changes. any time they want to do something innovative and creative, it can take years to get a waiver done. so we need to create a medicaid program that allows states to be innovative and to have that flexibility so that they can focus on producing better outcomes for individuals. i strongly do not want to see anyone not get health services. we're talking about the most disabled and vulnerable people
in our population. we can do better. we can -- we should be able to deliver better outcomes for these individuals and hold states accountable for accessibility and high-quality coverage. this is this isn't about kicking people off the program -- this isn't about kicking people off the program. this should be about improving outcomes. ms. cantwell: we'll have many more chances. my time is expired. innovate, don't capitate. innovate. thank you, mr. chairman. mr. cardin: thank you, mr. chairman. i'm going to follow up on senator cantwell's points because i think the essence of her comments are absolutely accurate. ms. verma, first of all, welcome. you're a product of my state of maryland in education. we're very proud of your accomplishments. it's nice to have your family here. i want to talk about minority health and health disparities in this country. part of the foferede ford was to put a focus -- affordable care act was to put a focus on that. there's a good reason, because historically minorities have been discriminated against in
our health care system. we look at health care results on diabetes, heart disease, hepatitis, hiv-aids, infant mortality and other indicators, and we know we have a problem. we've been making progress on that problem. that's what i want to refer to senator cantwell's point, about resources. resources are important. i wish every policy decision we make in this committee and we make in congress and made at the white house was driven by what is the right policy results. but far too often it's driven by the budget numbers. that's the reality. that's what we deal with. senator cantwell's point is that if you move to a block grant and medicaid program, the odds are it's going to be to fill a budget number, not to fill a policy-driven objective. who is vulnerable? the most vulnerable people in our society. in maryland almost 70% of the medicaid population are from communities of color.
that's in my state of maryland. 70%. so when we expanded the opportunities for medicaid under the affordable care act, it made a big difference. you may be familiar with the greater dayton health center in prince georgia's county. i've been visiting that center for many years. they're now able to provide mental health services and pediatric dental services. and giving access to care in a vulnerable community, because of the expansion of medicaid. if we were to go to a program that's innovative but doesn't have the resources to implement vulnerable people are going to get hurt. so i just want to get your understanding as to the importance of resources. we're not going to approve our health care -- improve our health care system by telling people of means that they can't spend money on health care. they can get the health care that they need. it's the vulnerable population that is going to be challenged.
as tough as budgets are here, budgets in annapolis and other states around the nation are even tougher. medicaid is such a large part of the state budget that when you say, we're going to innovate, but we need to invest to innovate, they don't have the money to invest to innovate. then they have to look at, well, let's eliminate this or the essential benefits that senator menendez was talking about. so, tell me how you're going to advocate for the poor. how you're going to advocate for those who are challenged in our system. i don't know all the answers of the indiana system. we had a chance to talk about it. i applaud you for looking for innovation in your state. but i know that some interpret it to mean that those co-payments that some have to pay, they don't have the resources to pay a, and then if they don't pay, they're newt a system where they're denied certain benefits that they desperately need. i'm interested in how you see
this system being fair to our most vulnerable. ms. verma: first of all, i'd say i have fought fauth for coverage, for better outcomes, for vulnerable populations my entire career. starting with individuals with hisk aids, working with -- h.i.v. and aids, working with low-income mothers. the issues you raised around minority health arenary and dear -- are near and dear to my heart. i'm a minority. there are different cultural norms that impact how the health care is delivered and the advice we give to individuals who are minorities. i certainly understand that. you talked about the healthy indiana plan and making sure people have resources for their health care. we looked at in the healthy indiana plan, it was all about choices. we believe in the individual dignity and the empowerment of individuals to make their choices about their health care. what we found is that when we gave people those choices, they made good choices and they had better health outcomes. we saw emergency room usage go
down. we saw individuals having more imary care and more -- mr. cardin: of course that's what we're seeing under the expansion of medicaid in maryland. with many more people insured. we are seeing much greater -- less use of emergency room care. much more preventive health care. because we now have more people in the medicaid system. that 250,000 more in our state. so, yes, the expansion of third party coverage is critically important. but the quality of third party coverage is also critically important. if you don't have preventive care, if you don't have pediatric dental, we know what happened. we know what happened in our own state of maryland in 2007, with a tragic death. so i appreciate we're looking for innovation. but if you don't have the basic coverage, if you don't have the ability to provide the essential services, it's the vulnerable who are going to suffer. ms. verma: i don't want to see the vulnerable suffer. like i said, i've been working on that particular issue my entire career.
i've done this on the local in l, creating programs marion county for uninsured individuals and i've done it on the state level. if confirmed i will continue that fight. mr. cardin: i thank you. thank you, mr. chairman. mr. brown: thank you, mr. chairman. thank you for your willingness to serve, ms. verma. thank you for come to my office and speaking. i was a little concerned about senator nelson's question about edicare eligibility age. your future boss was not willing to tell the committee he had changed his mind or was .pposed to it and on voucherizing, privatizing medicare. i was concerned when you said the up to congress. of course it is. but i would hope that you would -- i'm not asking this as a question, but i'd hope that you'd look at c.m.s. as a platform to, one, tell your boss, the secretary of h.h.s.,
and your ultimate boss, the president, who said he wouldn't do those things in the campaign, but then he nominates congressman price, but i'd hope you would use that as a platform to stand up against those two things. they are devastating to working class americans. couple of questions. first question is simple. governor kasich recently named a new director for the department of medicaid, former ohio legislator, barbara seres. governor kasich extended medicaid in ohio, 700,000-plus people now have medicaid coverage. ohio's former medicaid director, john mccarthy, had an excellent relationship with c.m.s. my question is, this is an easy one, i'd like to ensure this positive working relationship and i'd like to ask to you commit to sitting down in person with director seres and perhaps if she chooses and you choose, a group of medicaid administrators around the country to discuss my state's and their state's priority -- their states' priorities and concerns when it comes to the medicaid program. i'd like to ask you to do that in the first few months of the job. ms. verma: it would be my
pleasure to do that. i feel strongly about working with states in an open relationship and partnership. mr. brown: thank you. meeting, you spoke glowingly about chip. and what it's done. in 2010, when congress improved chip by streamlining enrollment processes and increasing outreach efforts and other things, we now have 95% of children in america now have affordable, comprehensive health insurance. what's not to love about that? secretary price mentioned in this hearing that he would support an eight-year, eight-year extension of chip. of the current chip program. it's important that when we upgraded chip in 2010, and streamlined it so it's a clean, clean law now, and easily understood, do you agree with secretary price that congress should act quickly to pass an eight-year extension? and -- [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2017] >> you can continue to watch all of this hearing online at cspan.org. just search medicare in the ar