The nomination of Seema Verma to the administrator of the Centers for Medicare & Medicaid Services (CMS) came with many of the typical tough questions and a concomitant reluctance to answer directly at times, but Verma's answers often reverted to an emphasis on choice and competition, including on the question of negotiated drug prices.

Sen. Orrin Hatch (R-Utah), chairman of the Senate Finance Committee, commenced the hearing with the remark that "the failings of Obamacare are urgent and must be addressed in short order," noting that another major carrier, Humana, has indicated it will leave the health insurance exchanges next year.

Ranking member Ron Wyden (D-Ore.) made a different case, stating that a rule proposed on Feb. 15 by CMS – which would expand the period for pre-enrollment verification and allow insurers to collect back premiums – sends a message. "The message is insurance companies are back in charge," and patients "will take a back seat," Wyden said.

Wyden inquired as to what sort of administrative changes Verma would consider in getting a handle on costs associated with Medicare Part D, the prescription drug plan, and Verma responded that she would favor policies "that continue to put senior citizens in charge of their health care."

Sen. Debbie Stabenow (D-Mich.) asked Verma about drug price negotiations, and Verma said pharmacy benefits managers already negotiate prices. "I think competition is the key to getting good prices," she said. When asked about whether the so-called Part D donut hole should remain filled, Verma responded, "I support seniors having affordable access to medications."

Sen. Mike Enzi (R-Wyo.) was the only member of the Senate panel to inquire into the competitive bidding program for durable medical equipment (DME), to which Verma replied that the states have different DME delivery systems and patient populations, noting that in many cases, rural DME providers are paid in a manner that is "more appropriate for a provider in an urban area.

"We want to make sure we are not impacting beneficiary access," Verma continued, adding that the task of CMS and the bidding program should be to avoid pushing providers out, and instead should attract more of those providers to the DME program.

Wyden took a shot at Verma's credibility, stating that an issue for him was her consulting work for the state of Indiana. In addition to working as a consultant for the state in an overhaul of its Medicaid program, Verma had contracts with some of the entities doing business with the Indiana Medicaid program, and Wyden said a former Bush administration official had remarked that such an arrangement "clearly should not happen and clearly is improper."

Verma said there was no functional overlap between her company's contract with the states and the work she did on behalf of vendors who had taken out contracts with the state pertaining to the Medicaid program in Indiana. Verma said she had recused her company when there was overlap, but noted also that her company did not negotiate contracts with vendors on behalf of the state. "I think the state has spoken on this," and found no ethical improprieties, Verma said.

Sen. Chuck Grassley (R-Iowa) said he had attempted to obtain documents from CMS late last year and in January regarding Mylan NV and the Epipen controversy, but that he has had no luck with the agency to date. When asked whether the agency would be more cooperative on that point, Verma said "that's a short yes." She said the Epipen issue "is very disturbing," adding that she "would like to review the processes in place" for determining the generic status of a drug to ensure no repeat episodes are in the offing. Mylan recently agreed to a settlement of $465 million with the Department of Justice over the price hikes the company undertook after a rework of the pen's injector design.

Wyden said the definition of the term "nominal [financial] risk" in relation to the Medicare and CHIP Reauthorization Act (MACRA) of 2015 was particularly vexing for rural physician practices, and Verma replied that small providers would require some support from the federal government to participate in the novel payment models outlined in MACRA.

Verma pointed out that even larger practice groups are wary of risk, as the history of the Accountable Care Organization program makes clear, and Wyden responded that those answers came across as support for fee-for-service (FFS) care. Verma stated that she was not suggesting that FFS works better than some of the alternatives, but added that while she supports holding providers accountable for outcomes, "it's another thing altogether to have to accept [financial] risk" for a spate of poor outcomes.