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Confirmation Hearing for HHS Secretary Tom Price. Aired 10:30- 11a ET

Aired January 24, 2017 - 10:30   ET


SEN. ORRIN HATCH (R), UTAH: 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?



HATCH: Do you know of any reason, personal or otherwise, that would in any way prevent you from fully and honorably fulfilling this -- this responsibility?

PRICE: I do not.

HATCH: Do you agree, without reservation to respond to any reasonable summons to appear and testify before any dully constituted committee of the Congress, if you are confirmed?

PRICE: I look forward to that.

HATCH: Finally, do you commit to provide a prompt response in writing to any questions that may be submitted to you or addressed to you by any senator of this committee?

PRICE: I do.

HATCH: Well, thank you. That -- those -- those are the obligatory questions we really ask of everybody. Let me just go into some questions that I would like to ask of you. OK.

Before we go into the questions, I have a tendency to want to get going a little quicker than I should. Let's turn time over to you, Dr. Price, Congressman Price to state whatever you'd like to state here for the committee this morning.

PRICE: Thank you so much, Chairman Hatch and Ranking Member Wyden and to all the members of this committee for the opportunity to speak with you today and to engage in the discussion about the road ahead for our great nation.

I want to thank Senator Johnny Isakson so much for his incredibly gracious introduction. As he mentioned, we've known each other for 30 years or so. I'm so grateful for his friendship and his kindness, our state is so grateful for his leadership and his service and we're blessed to have it.

I wish also, to especially thank my wife, Betty, of 33 years who joins me here today. Her support and her encouragement and her advice which I will remind you, is always correct and her love that she has given me over those past 33 years -- I'm more grateful for that than I can ever say. Over the past couple of weeks and months, I've met with many of you, individually, and gained a real appreciation for the passion that you all have for the critical work that's done at The Department of Health and Human Services. Please know that I share that passion. Which is why I'm here today and why I honored to have been nominated to serve as the next secretary of Health and Human Services.

We all come to public service in our own unique ways that inform who we are and why we serve. My first professional calling was to care for patients. That experience as a physician, and later as a legislator, has provided me a holistic view of the complex interactions that take place every single day across our communities. And today I hope to share with you how my experience has helped shaped my understanding of, and appreciation for, the Department of Health and Human Services.

From an early age I had an interest in medicine, my earliest memories though were of growing up on a farm in Michigan where I lived until I was five years old, when our family moved to suburban Detroit. I spent most of my formative years being raised by a single mom. Some of my fondest memories as a child were those spent with my grandfather who was a physician. And I would occasionally spend some weekends with him and he would make rounds, which meant that we got in a car and went to peoples' homes and made house calls.

And I'll never forget the warmth and the love with which he was greeted at every single door. Those -- those impressions are seared in my memory. After graduating from medical school from the University of Michigan, I moved to Atlanta which I've called home for nearly 40 years. It's where I met my wife, Betty. It's where we raised our son. I did my residency at Emory University and Grady Memorial Hospital where I would later return in my career to serve as the medical director of the orthopedic clinic.

Throughout my professional career, I cared -- cared for and treated patients from all walks of live, including many, many children. And anyone who has ever had the privilege of treating a child, knows how fulfilling it is to look into the eyes of a mom or a dad and say how we helped heal their son or their daughter. My memories of Grady are filled with the gracious comments of parents and of patients for the team of health care specialists with whom I had the privilege of working.

After 25 years of school and training, I started a solo orthopedic practice. Over the years this practice grew, as Senator Isakson mentioned, and it eventually became one of the largest, non- academic group practices of orthopedics in the country, for which I eventually served as chairman of the board.

During 20 years as a practicing physician, I learned a good bit about not just treating patients, but about the broader health care system and where it intersects with government. A couple of vivid memories stand out.

PRICE: One are the number of times where patients were remarkably angry about the individuals figuratively, not literality, but figuratively standing between themselves and their physician in the clinic room.


Making it so that what the physician was recommending may or may not be possible, whether it was from insurance or regulators or government or the like.

And then there was the day that I remember vividly that -- that -- that I realized there were more people in the office behind the door where we saw patients in the front clinic area trying to fight with insurance and regulators and government than there were in the front of the door actually caring and treating patients. And it became clear to me that our health care system was losing focus on its number one priority, and that is the patient.

As a result, I felt compelled to broaden my role in public service and help solve the issues harming the delivery of medicine, and so I ran for the Georgia State Senate. I found Georgia State Senate to oftentimes be a remarkably bipartisan place, where collegial relationships were the norm. This is the environment in which I learned to legislate, reaching across the isle to get work done.

In Congress, I've been -- I've been fortunate to have been part of a collaboration that broke through party lines as well to solve problems. Just this past Congress, as you'll recall, it was a bipartisan effort that succeeded in ridding Medicare of a broken physician payment system and which has now begun the creation of a system, that if implemented properly, will help ensure that seniors have access to higher quality care.

If confirmed, my obligation will be to carry to the Department of Health and Human Services both an appreciation for the bipartisan team-driven policy making and what has been a lifetime of commitment to improving the health and well-being of the American people. The commitment extends to what I call the six principles of health care; affordability, accessibility, quality, responsiveness, innovation and choices.

But Health and Human Services is more than health care. There are real heroes at this department doing incredible work to keep our food safe, to develop drugs and treatment options driven by scientists conducting truly remarkable research. There are heroes among the talented, dedicated men and women working to provide critical social services, helping families and particularly children have a higher quality of living and the opportunity to rise up and achieve their American dream. The role of the Health and Human Services Department in improving lives means it must carry out its responsibilities with compassion. It also must be efficient and effective and accountable, as well as willing to partner with those in our communities already doing remarkable work.

Across the spectrum of issues and services this department handles, there endures a promise that has been made to the American people and we must strengthen our resolve to keep the promises our society has made to senior citizens and to those most in need of care and support. That means saving and strengthening and securing Medicare for today's beneficiaries and future generations. It means ensuring that our nation's Medicaid population has access to quality care. It means maintaining and expanding America's leading role in medical innovation and the treatment and eradication of disease.

So, I share your passion for these issues, having spent my life in service to them. And yet, there's no doubt that we don't all share the same point of view when it comes to addressing each and every one of these issues. Our approaches to policies may differ, but there -- surely, surely there exists a common commitment to public service and compassion for those that we serve. We all hope to improve the lives of the American people, to help heal individuals and whole communities.

So, with a healthy dose of humility and an appreciation for the scope of the challenges before us, with your assistance and with God's will, we can make it happen. And I look forward to working with you to do just that.

Mr. Chairman, I thank you for the opportunity to be with you today.

HATCH: Well, thank you, Dr. Price. I can't think of anybody who -- who -- who could give a better analysis of why this position is so important to them.

Let me start with this question. The Department of Health and Human Services is one of the largest departments in government and employing, I think, nearly 80,000 employees and encompassing over 100 programs covering a large range of complex and diverse issues. Can -- now, you've described to a degree, but if you could elaborate a little bit more, can you describe how you will prioritize and oversee the large array of issues for which you will be responsible? And tell us, what in your history has prepared you to lead the Department of Health and Human Services, such a multifaceted department?

PRICE: Thank you, Mr. Chairman.

As -- as you and the members know, the mission of the Department of Health and Human Services is to improve the health and the safety and the well-being of the American people. And in order to do that, I'm -- I'm committed to that mission, but in order to do that you've got to put together teams of -- of individuals in each sector of Health and Human Services. In my history, wherever I was, whether it was in my clinical practice or the state legislature or Congress or the work that I did in communities, was just to bring forward the greatest quality of talent that we -- that we could assemble.


PRICE: Second is to understand -- understand the scope and the issues and -- and clearly having the experience both, in the clinical arena, as well as in the legislative arena -- understand the scope and the issues. And then finally, focusing on results.

I think often times we get -- it gets kind of muddy up here in Washington, what we do. We -- we -- we -- name the programs, we -- we -- we -- make certain that the resources are there to be able to provide money for the programs to -- to be run, but often times, I think we drop the ball on whether or not we're actually accomplishing the mission.

Are we truly improving the safe -- health and the safety and the well- being of the American people? So one of the major goals I have is to look at the metrics that we're looking at the department and making certain we're accomplishing that mission and that goal.

HATCH: Thank you.

The Centers for Medicare and Medicaid Innovation, CMMI, has been -- begun numerous initiatives over the past few years, some of which have generated much controversy. Could you tell us your position on the work in CMMI and how it should be -- should or should not be continued in the future?

PRICE: Thank you, Mr. Chairman.

The -- the innovation is so incredibly important to -- to health care and the -- and the vibrant quality of health care that we need to be able to provide to our citizens. Innovation, in fact, is what -- what leads quality health care; it's what expands the ability of health care professionals to be able to treat patients. I'm a strong supporter of innovation and I think one of the -- one of the roles that we, as policy makers, have is to incentivize innovation. The Center for -- for Medicare and Medicaid Innovation is -- is a vehicle that might do just that.

I think, however, that CMMI has gotten off track a bit. I think what it has done is -- is defined areas where it is mandatorily dictating to physicians and other providers in this country, in certain areas, how they must practice. So whether it is a geographic area that includes 67 or 68 areas in our country, that have to perform a certain procedure in a certain way and use a certain implant in a certain way, because the government says they got to, mandatorily without exception. Or whether it's 75 percent of the Part B Medicare drug demo, it's called a demonstration product -- project, which -- which dictates to physicians and other providers what drugs they must -- they must use in an impatient setting.

That to me is no longer a trial. That's no longer an experiment, that's no longer a pilot project to determine whether or not an innovative solution might work. That's changing the way that American medicine is practiced by folks making decisions here in Washington; as opposed to patients and families and doctors making those decisions.

So, strong supporter of innovation; hope that we can move CMMI in a direction that actually makes sense for patients.

HATCH: Well, thank you so much.

Medicare has lost more than $130 billion -- that's with a B -- to improper payments over the past three years. The program also has been above the legal building error rate threshold of 10 percent for the past four years. Given that Medicare trustees have issued grave concerns about looming Medicare insolvency if we stay at the current spending levels.

Will your administration actively champion our Medicare Integrity Program so that we can recover as much -- a much higher percentage of the billions of taxpayer dollars lost each year to billing mistakes, and ensure Medicare will be in place for future American seniors?

And also as a former practicing physician who has experience with Medicare and Medicaid programs, do you have any insights into steps you think should be taken to address the multi-billion dollar problem of waste, fraud and abuse in these programs?

PRICE: Yeah, thanks, Mr. Chairman.

Nobody supports care being billed for that isn't needed or isn't -- hasn't been provided. And this is one of those areas that I think we need to be very, very focused. I'm -- I'm certain that there are some bad actors out there. I think they're a minority, but there's some bad actors out there. And I'm certain that if we were to focus specifically on those bad actors in real time, which is what happens in every other industry in our country that real time information is -- is available and acted upon.

Instead of -- of trying to determine whether every single incident of care is necessary. If we were to focus on those individuals that were the bad actors specifically, then I think we could do a much better job of not just identifying the fraud that exists out there, but ending that fraud.

HATCH: Well, thank you.

Senator Wyden, we'll turn to you now.

SEN. RON WYDEN (D), OREGON: Thank you, Mr. Chairman.

Congressman, I'm gonna start with the trading in health care stocks. Your position is that the trading was legal, because in your view, it complied with House rules. I think there are debatable legal questions, but there are other matters.


Innate Immunotherapeutics is an obscure Australian company -- develops a treatment for immune system disorders and plans to seek FDA approval. Innate's fortunes are affected by congressional action. Today, the total value of your shares exceeds $500,000. Yet, on the Office of Government Ethics Disclosure Form you filed, as a nominee, you significantly undervalued the stock. You failed to include the value of more than 400,000 shares you bought at a significant discount during a private stock sale made available to specially chosen investors around Labor Day.

You also significantly underreported the value of this purchase to the committee. It's worth more than twice what you reported. You heard about the stock from a House colleague who is a board director of this Australian drug company and the largest shareholder. You got in on private placements not available to the public. In these private placements, you bought over 400,000 shares at discounts that were as much as 40 percent cheaper than the price on the Australian stock exchange. And you were sitting, at the time, on committees that have jurisdiction over major health care programs and trade policy.

Yes or no, doesn't this show bad judgment?

PRICE: Well, if what you said was true, it -- it -- it...

WYDEN: You have a paper trail...


WYDEN: Congressman, we have a paper trail for every comment I've made. Yes or no, doesn't this show bad judgment?


WYDEN: Well...

HATCH: Well, let him answer the question too. I mean, you've kind of indicated he did something wrong. Let him explain why it wasn't wrong.

WYDEN: It was -- it was a yes or no.

HATCH: No, I want to have him be able to -- to -- to handle that problem.

PRICE: Maybe it would be helpful if you - - if you laid out the accusation, sir.

WYDEN: Well, you purchased stock in an Australian company through private offerings at discounts not available to the public.

PRICE: If I may, those -- they were available to every single individual that was an investor at the time.

WYDEN: Well, that is not what we learned from company filings. Company filings with the Australia Stock Exchange state that this specific private placement would be made at below market rates. The Treasury Department says it's only offered to sophisticated investors in a non- public manner.

We have a paper trail for every one of the statements that I have gone -- gone into. And trading in stocks while you sit on two committees, introducing legislation that directly impacts the value of the stocks...

PRICE: What legislation would that be, Senator?

WYDEN: We will take you through the various bills, but the reality is this has been cited on a number of occasions.

PRICE: The reality is that everything that I did was ethical, above board, legal and transparent. The reason that you know about these things is because we have made that information available in real time as required by the House Ethics Committee. So there isn't anything that -- that -- that you have -- that you have divulged here that hasn't been public knowledge.

WYDEN: Your stake in Innate is more than five times larger than the figure you reported to ethics officials when you became a nominee.

PRICE: And if you had listened to your committee staff, I believe you would know that our -- our belief is that that was a clerical error at the time that the 278E was filed. We don't know where it happened, whether it was on our end, whether it was on the end of the individuals of OEG. But there was not any -- any malicious...

WYDEN: Congressman, you also reported it in the questionnaire to the committee and you had to revise it yesterday because it was wrong.

PRICE: And the reason for that is because I -- when asked about the value, I thought it meant the value at the time that I purchased the stock, not the value at some nebulous time when we supposedly made a...

WYDEN: I want to get in one other question, if I might. This weekend, the president issued an executive order instructing the department and other agencies to do everything possible to roll back the Affordable Care Act. If confirmed, you'll be the captain of the health team and in charge of implementing the order.

Yes or no, under the executive order, will you commit that no one will be worse off?

PRICE: What I commit to, Senator, is working with you and every single member of Congress to make certain that we have the highest quality health care and that every single American has access to affordable coverage.


WYDEN: That is not what I asked. I asked will you commit that no one will be worse off under the executive order. You ducked the question. Will you guarantee that no one will lose coverage under the executive order?

PRICE: I guarantee you that the individual's that lost coverage under the Affordable Care Act, we will commit to making certain that they don't lose coverage under whatever replacement plan comes forward. That's the commitment that I provide to you.

WYDEN: The question again is, will anyone lose coverage and you answered to something I didn't ask. I'll wrap up this round by saying, will you commit to not implementing the order until the replacement plan is in place? PRICE: As I mentioned Senator, what I commit to you, and what I commit to the American people, is to keep patients at the center of health care. And what that means to me is making certain that every single American has access to affordable health coverage that will provide the highest quality health care that the world can provide.

WYDEN: I'm going to close by way of saying that what the Congressman is saying is that the order could go into effect before there's a replacement plan. And independent experts say, that this is gonna destroy the market on which millions of working families buy health coverage. And on the questions that I ask, will the Congressman commit that nobody will be worse off, nobody will lose coverage, we didn't get an answer.

Thank you Mr. Chairman.

HATCH: Well, how can anybody commit to that?

Let me just say, Dr. Price, you've been accused here of vesting in securities that had a direct effect over in the Congress and you disclosed the wrong value of shares you owned in -- in Innate Immunotherapuetics. Now Dr. Price, let me just say this has a diversified portfolio with Morgan Stanley and a broker directed account.

Correct me if I'm wrong on any of this, Doctor, the portfolio includes both health care and non-health care stocks. His financial adviser designed the portfolio and directed all trades in the account. The adviser's, and not Dr. Price, has the discretion to decide which securities to buy and sell. On March 17th, 2016, in a periodic rebalancing of the portfolio, the financial adviser directed the purchase of 26 shares in Zimmer Biomet, worth under $3,000. The adviser notified Dr. Price of the purchase on April 4th 2016. And Dr. Price disclosed them on his House periodic transaction report on April 15th.

Now Dr. Price began his legislative effort related to the comprehensive joint replacement demonstration project in 2015. With one exception, all of Dr. Price's stocks are held in three broker- directed accounts. Neither he nor his wife direct -- direct or provide input regarding investments in these accounts. Innate Immunotherapeutics is the one exception.

Now, Dr. Price decided to invest in -- I'll just call it out -- hell, based on public information regarding his work on multiple sclerosis treatments as a disease. He has been intimately involved in treating for years. He directed the investments based on his own research in to the company. He invested $10,000 in the company in January 2015 and reported the investments to House ethics in February of that year.

He made an additional investment in September 2016 and also disclosed that investment; he has corrected his styling regarding the value of his shares. He's agreed to divest all shares in the company. I don't know -- is that a correct -- Senator (inaudible).

PRICE: Your information is -- is correct, sir. I -- I -- I just point out that anybody who knows me well, knows that I would never violate their trust. And -- and I know -- I know the -- the environment that we're in here, you mentioned it in your opening statement. But I appreciate you correcting the record.

HATCH: Well, thank you. Let's see...

(UNKNOWN): Mr. Chairman, I've -- just an inquiry. You just consumed about two minutes beyond your opening statement. And in the interest of fair play, is it -- is it appropriate for someone to note that two minutes is also owed to Senator Wyden or somebody on our side?

HATCH: Well, he already did go over two minutes, so that's no...


(UNKNOWN): OK. But in the -- as we go forward in this -- in this process, I'll just ask you to keep that...

HATCH: I'm -- I'm not gonna relinquish my -- my role as chairman.

(UNKNOWN): No, I understand.

HATCH: The correct errors, that are promulgated here, and -- but -- I've always -- I've always been good about giving time that you need.


So I will try to do that, but...

(UNKNOWN): Thank you.

HATCH: ... but I'm also not gonna allow things that are not fault -- that things that are false, to go forward without some sort of comment.

(UNKNOWN): All right.

HATCH: We just can't allow this to happen.

(UNKNOWN): Mr. Chairman, just a unanimous consent request.


(UNKNOWN): Bipartisan disclosure memo I'd like to ask be made a part of the record because it will document what I've stated.

HATCH: Without objection.

Senator Roberts.

SEN. PAT ROBERTS (R), KANSAS: Did you really wink at me and smile? Bless your heart. Thank you.


Good doctor, thank you for coming. I think it's important to make clear right off the bat that even if Congress and the incoming administration were to do nothing, absolutely nothing, amending or repealing parts of the Affordable Care Act, the law's not working.

PRICE: Right.

ROBERTS: It's collapsing. The prices are not affordable, the market's nearly not existent, few options to several states and counties. This year, one out of every three counties in this country only has one insurer offering coverage on the exchange.

What tools do you have, or will you have when you're confirmed, which could be utilized over the next couple of months to provide stability and improve the individual insurance markets, make them more appealing so that insurance carriers will want to come back and provide more coverage options as we transition away from the Affordable Healthcare Act?

PRICE: Well, thank you, Senator. I think it's incredibly important for us to admit here what the American people know, and that -- that is that this law isn't working. Certainly isn't working for the folks in the individual and small group market. You've got premiums that are up significantly. They were supposed to go down by $2,500. Now they're up more than $2,500 on average. You've got deductibles that have escalated to $6,000 to $12,000.

You've got, as you mentioned, states where there -- there's only one provider -- insurance provider, carrier. You've got one third of the counties in this country where there's only one insurance carrier. This is -- may be -- may be working for government, it may be working for insurance companies, but it's not working for patients. And so what we need to do is an effort to try to reconstitute the individual and small group market.

And that begins, I believe, by providing stability in our conversation and in our tone. And one of the goals that I have is to lower the temperature in this debate, is to say to -- to those providing the insurance products across this country. We understand, we hear the challenges that you have.

They're already exiting the market. What we need to do is to say there's -- there's -- there's help on the way to allow us to reconstitute the individual and small group market that allows for folks to gain the kind of coverage that they want for themselves and for their family, not that the government forces them to buy.

That allows them to purchase coverage at a reasonable amount. That makes it so that they don't have deductibles that are out of the -- through the roof, where they don't have the ability to pay the premiums and the deductible as well. So, there's so many things that we ought to be focusing on to make certain, again, that the American people have access to the highest quality care that's affordable for them.

ROBERTS: Doctor, I have 84 critical access hospitals in my state. It's all part of the rural health care delivery system, which is under great stress. As we have seen when I visit with hospital administrators all throughout Kansas, there was a time when I knew every one of them, but they're scratching their heads over regulations coming out of HHS, CMS, it used to be HEW and HICVA (ph) and the story goes on and on. And all the other agencies that you all oversee when you are confirmed.

I mention the meaningful use program for electronic health care records. Doctors used to spend, what, 10 to 15 minutes with patients. It's now down to about two or three and then they have to report immediately on what was going on. The 96 hour rule for critical access hospitals, numerous other documentation requirements. Seems to me there's a lack of understanding of our provider shortages in our rural areas.

We're just hanging on by a thread. And how these one size regulations from Washington simply do not translate to rural Kansas or any other rural area with sparse population. My question is how will you work to ensure an effective but smarter, less burdensome rulemaking process?

PRICE: Well, this is really critical, Senator, because as you mentioned area, in the rural areas, Georgia's the largest state geographically east of the Mississippi and we've got a large rural population.


And critical access hospitals are so important to communities around our state and truly around this nation.