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Sebelius Testifies Before House Subcommittee on FY 2012 HHS Budget Proposal

March 4, 2011—The House Energy and Commerce Subcommittee on Health held a March 3 hearing to examine the president’s proposed FY 2012 Department of Health and Services (HHS) budget [see Washington Highlights, Feb. 18]. Testifying before the subcommittee, HHS Secretary Kathleen Sebelius fielded numerous questions focusing on such topics as the Medicaid maintenance of effort (MOE) requirement, Medicare sustainable growth rate (SGR) formula, workforce issues, the National Institutes of Health (NIH), and fraud and abuse.

With regard to the Medicaid MOE requirement under the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152), Energy and Commerce Committee Chair Fred Upton (R-Mich.) acknowledged the president’s willingness to work with Governors to create a “bipartisan proposal on Medicaid.” However, Chairman Upton said, “If the president wants a bipartisan Medicaid proposal then repealing the MOE is the place to start.” In response, Sec. Sebelius reiterated the president’s “commitment to working with the Governors in a bipartisan way” to address their concerns and suggested that she would be “willing to look" at any Medicaid Block Grant Program proposals that are introduced.   

Sec. Sebelius fielded numerous questions regarding NIH funding in both FY 2011 and FY 2012 [ see Washington Highlights, Feb 18]. In response to a question from Ranking Member Frank Pallone (D-N.J.) on the $1.6 billion to NIH proposed in the Full-Year Continuing Appropriations Act for 2011 (H.R. 1), Sec. Sebelius commented that we need “wise and strategic investments” to keep America at the forefront of biomedical research, and that investments in NIH will help grow jobs and the economy. Rep. Charles Gonzalez (D-Texas) noted the importance of NIH funding to universities and asked the Secretary to clarify the federal role versus the role of the private sector in medical research. Sec. Sebelius responded that the “important partnership” with NIH is “vital to universities” and needs to continue for the U.S. to continue to lead the world in medical research. With respect to NIH funding in FY 2012, Sec. Sebelius stated that the funding increased proposed in the president’s budget “will allow leading scientists to pursue groundbreaking research” and that failure to fund NIH at the full extent would be devastating.

In addition, Sec. Sebelius also received several questions regarding the administration’s proposed elimination of funding for Children’s Hospital Graduate Medical Education (CHGME) in FY 2012. She responded that cuts to CHGME were the result of a “very difficult decision,” and that many groups had raised concerns about the proposal. She also stated that cuts to workforce programs in H.R. 1, as well as de-funding the Affordable Care Act, would “devastate” the workforce.

At the close of the hearing, Subcommittee Vice Chair Michael Burgess (R-Texas) asked the secretary to explain what the administration’s plan was to address the Medicare SGR formula. Sec. Sebelius reiterated the president’s commitment to working with Congress to find a permanent solution. She explained the president’s FY 2012 budget proposal assumes Medicare physician payment reform, but does not identify a comprehensive reform strategy. The secretary added that it is “probably the single most threatening issue to Medicare beneficiaries on the horizon.”


Christiane Mitchell
Senior Director Health Care Affairs
Telephone: 202-828-0461


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