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Patients Need Both Innovation and Accountability

September 29, 2016
1:42 pm

Let’s begin this post by stipulating the concept behind the creation of the Center for Medicare and Medicaid Innovation (CMMI) is both sound and important.

CMMI was created as part of the Affordable Care Act to test new payment and delivery mechanisms that have the potential to improve patient care while containing costs.  Given the healthcare system’s current movement toward value-based care, and the need to strengthen Medicare’s financial sustainability, having a CMMI to serve as a testing center for new ideas makes sense.

However, as the op-ed below by former Congressional Budget Office director Dan Crippen points out, CMMI has taken actions that go beyond the scope of what anyone would define as a limited demonstration project.  As Mr. Crippen writes, referring to a project affecting payment for drugs administered in a physician’s office, “Untested payment changes for Medicare benefits, especially when mandatory and applied to tens of millions of recipients, should receive much more consideration than a brief comment period before the initiation of the new policy.”

This is an issue about which we’re going to hear a great deal more in the weeks and months ahead.  The Medicare and Medicaid programs, and the millions of Americans they serve, need innovation to bring about care that is both high-quality and cost-efficient, but there also need to be built-in accountability guardrails having to do with the scope of projects and the transparency of decision-making.

Mr. Crippen is absolutely right in describing Patrick Conway, who heads CMMI, as a conscientious, effective public servant.  We look forward to working with him and elected lawmakers in Congress to assure that CMMI fulfills its intended mission in improving healthcare for current and future generations.

Here is the Dan Crippen op-ed:

I have the utmost respect for Patrick Conway, who heads the Center for Medicare and Medicaid Innovation at CMS, the federal agency that runs Medicare and Medicaid. Conway, like thousands of others in and out of government, is looking for ways to improve the health care of our nation.

However, action taken in the closing days of an administration, especially if it supersedes congressional authority and oversight, needs to be carefully examined. Last week, the House Budget Committee held a hearing taking a closer look at this with regard to CMMI and how the Congressional Budget Office evaluates costs associated with it, putting the CBO squarely in the middle of the struggle between the branches.

As recent proposals by CMMI to alter Medicare payments highlight, there are serious problems with the expansive reading of CMMI’s statutory authority. And the result is a significant shift of power from Congress to the executive branch.

The Affordable Care Act, which created CMMI, authorized CMMI to conduct demonstration projects for any part of Medicare and some of Medicaid, with the goal of saving money and improving quality. To conduct these experiments, the ACA allows the Secretary of HHS to waive virtually any part of Medicare and exempt a limited but important number of Medicaid provisions (e.g. the requirement that state Medicaid programs pay actuarially sound rates for managed care).

If HHS determines that a demonstration produces savings (or does not increase costs) and preserves or increases quality, it can expand the policy through rulemaking to the entire Medicare or Medicaid population. The process does not require any congressional approval or assessment, or review of the claims of savings and quality by the CBO or the Government Accountability Office.

With this process, HHS/CMMI can alter benefits and potentially reduce access for beneficiaries, and expose the federal budget to financial risks based on estimates generated solely by the executive branch. Given the uncertainty in savings and the somewhat nebulous definitions of quality in some of these demonstrations, it is not difficult to imagine that the use of this process could vary dramatically with changes of administration.

In a recent example, CMMI has proposed to change the Medicare payment system for drugs that treat diseases such as cancer and rheumatoid arthritis, which are administered in a doctor’s office. The new payments would go into effect on a mandatory basis in roughly half the country, but Medicare payments would be left unchanged in the other half. Payments, benefits, and potentially access to care, would depend on where the Medicare beneficiary lived. This approach is a nationwide policy experiment introduced unilaterally by the executive.

There are many reasons this new policy, and others like it, should receive congressional review before implementation. Untested payment changes for Medicare benefits, especially when mandatory and applied to tens of millions of recipients, should receive much more consideration than a brief public comment period before the initiation of the new policy. Whatever the good intentions, a major and mandatory change in payment is not something (most of) Congress contemplated.  In fact, many members of Congress have publicly expressed concern to HHS regarding this proposal.

To compound the problem, congressional budgetary rules generally impose a “pay-as-you-go” requirement. Since HHS claims the new policy will save money, any legislation to delay or modify CMMI’s proposals would likely be scored by CBO as lost future savings. Therefore, legislation to limit the experiment would have to be offset by cutting spending or raising revenues by an equal amount. Congress would be forced to “pay for” the delay or repeal of untested policy created by the executive branch.

As a former director of the CBO, I know firsthand how difficult it can be to estimate the impacts of regulatory changes. The assessment of new regulations (and scoring of legislation affecting them) is especially difficult — the effects are necessarily prospective and somewhat speculative. As CBO said last year:

(CBO) … expects that only a few (CMMI) models … will reduce program spending. However, CBO cannot predict which models will succeed, and CMMI has not operated long enough to determine its overall track record.

Given this shift in balance of power between the two branches, and the difficulty in measuring the true cost savings from any particular CMMI experiment, Congress should not set precedent by attempting to legislatively offset the cost of delay or repeal of any CMMI proposal, particularly if it has not gone into effect and there is no track record.

Having worked both in the Congress and the White House, I understand the frustrations and tensions between the congressional and executive branches. And at the end of an administration, which I also experienced, there is always unfinished business. As a member of the team that reviewed end-of-term proposals, I can confidently say this CMMI proposal is not one we would have approved. With limited ability for oversight under this framework, Congress should exercise its authority and halt this experiment until it can properly consider the effects of the proposed policy.

Let the Public Option Rest in Peace

August 24, 2016
12:40 pm

Most will remember that one of the most spirited debates during congressional consideration of the Affordable Care Act, back in the early days of the Obama administration, concerned the proposed creation of a government-run health insurance plan that would compete alongside private plans in the new insurance exchanges.  Lawmakers rightly rejected the idea, arguing that it would create a degree of federal involvement in health insurance far exceeding the comfort level of moderates and conservatives, create an uneven and potentially destabilizing playing field in the health coverage marketplace, and cause a displacement of employer-based insurance as a result of federally-set, artificially-low premiums and deductibles.

Even HHS Secretary Kathleen Sebelius said, at the time, that the public option was not “an essential element for reform.”

As we’re witnessing the health insurance exchanges facing some well-publicized difficulties today, we’re hearing more calls from candidates and interest groups to bring back the public option.

We need to give those calls a deaf ear.

No doubt, the next Congress and administration will need to address the state of the Obamacare exchanges, making the right policy decisions to enable health plans to compete without absorbing unsustainable losses.  Forcing those plans to compete with a taxpayer-subsidized insurance alternative will only bring less stability, not more.

And just as important to the long-term sustainability of our healthcare system and accessibility to care for a growing number of patients, the public option is detrimental to physicians and hospitals.  A government-run plan that reimburses for services at Medicare rates will “disrupt the fragile financial system that sustains hospitals today.”

The quotation in the previous paragraph came from a letter jointly written this summer by the American Hospital Association and the Federation of American Hospitals.  Their letter points out that Medicare is paying less than the actual cost of care being delivered to patients.  They note, “adding millions more enrollees whose health care would be reimbursed at Medicare rates would likely threaten access to needed health care services, particularly for those in vulnerable communities.”

They added, “We continue to believe the framework of health care exchanges providing subsidized coverage, combined with expansion of the Medicaid program, was the best means of achieving universal coverage.  The addition of a public option at this time would only introduce greater uncertainty to a health care system that is experiencing rapid transformation.”

We agree.  Let’s strengthen the health insurance exchanges and leave the public option as an interesting chapter in the history of healthcare policy debates.

Campaigns, Honesty and the Future of Medicare

August 17, 2016
10:20 am

It’s like a bad rerun, but one with real consequences.  Every two years, some political candidates and the interest groups that support them decide the best way to boost their share of the 65-and-older vote is to scare these seniors into believing that the candidate on the other side is going to place their Medicare program in grave danger.  This tactic is obviously successful or candidates wouldn’t keep doing it, but its effectiveness doesn’t make it right.

There is no reasonable disagreement that the Medicare status quo is not sustainable.  The Medicare Board of Trustees, in its most recent actuarial projection, said the program will become insolvent in 2028.  We need to discuss solutions to strengthen Medicare.  Campaigns are traditionally the platform through which new ideas can be submitted for public debate and consideration.  That’s not happening, though, when opportunistic groups portray any reform ideas as a weapon that will obliterate grandma’s healthcare.

This is happening already in the 2016 campaign.  In New Hampshire, for example, Senator Kelly Ayotte (R-NH) is being falsely accused by a national labor union of advocating reforms that will cost seniors thousands of dollars.  This isn’t true, and an op-ed I wrote on the subject was published today in the Manchester Union Leader.  I’m sharing it with you below.

Those of us who realize the need for sensible, essential Medicare reform need to speak out against these exercises in political misinformation.  The stakes are high and we need to fight their version of Mediscare horror fiction with the facts.   Here is the text of the Union Leader op-ed:

One of the most tried and true campaign strategies, utilized for decades now, is to scare senior citizens to the polls by convincing them that their Medicare and Social Security are being threatened. Politicians and their allies keep doing this, regardless of the tactic’s moral and ethical implications, because it works. Medicare is such an important lifeline to seniors, they naturally respond if they think they’re about to lose it, or if they believe their care will start costing them more money.

New Hampshire voters are the current targets for Medicare scare tactics. The American Federation of State, County and Municipal Employees labor union (AFSCME) has been airing television ads showing a woman caring for an elderly relative and saying that Sen. Kelly Ayotte wants to turn Medicare into a “voucher program, costing us thousands.” It’s a well-produced piece of television that would give any Medicare beneficiary or caregiver, not armed with facts, reason for concern.

Here’s the problem. This ad specifically, and most of those in its genre, rely on gross distortions and, in many cases, outright untruths to frighten the bejeebers out of its target audience. And people and organizations dedicated to building a stronger Medicare program deplore campaign propaganda like this because it makes it all the more difficult to take action to save a program that has a very short solvency timeframe.

New Hampshire voters should be clear on one thing. Nobody in Congress has proposed changes to Medicare that will cost them thousands of dollars. In fact, just the opposite is true. The nonpartisan Congressional Budget Office has said that the reforms advocated by Sen. Ayotte, and others from both parties, would actually save most seniors money on their Medicare out-of-pocket costs.

When groups like AFSCME use scary terms like “voucher program,” they are actually referring to giving seniors greater power of consumer choice to have the kind of health coverage that meets their specific needs. This works well, for example, in the Medicare Part D prescription drug program, in which seniors choose from among various plans with different premium costs and coverage levels. A recent national survey showed the Part D program enjoying an 88 percent approval rating among its enrollees. And the Medicare Advantage program, which has seen a significant rise in beneficiary participation, also allows seniors a choice of plans that are competing to offer the best value.

Consumer choice is not as ominous a phrase, however, as voucher program.

The larger problem here lies in the fact that campaigns set the stage for future policy making. To advocate no changes to Medicare is tantamount to supporting its demise. Medicare’s actuaries reported this year that the program will become financially insolvent in 2030. AFSCME and others that want to punish proponents of Medicare reforms are essentially saying they’re fine with future generations, and even today’s middle-aged workers, being out of luck when they reach 65 and expect Medicare coverage.

New Hampshire voters, and all of us in this country, for that matter, deserve more honesty and more responsibility in the way campaign rhetoric is carried out. We need a forthright, candid national discussion on the future of Medicare without falsely accusing Kelly Ayotte and others of wanting to bankrupt someone’s grandmother. Even if it has historically worked to scare seniors to the polls, it has never been the right thing to do.

A Decade of Proving Critics Wrong

July 27, 2016
4:31 pm

As it was enacted into law in 2003, the Medicare prescription drug benefit, which would come to be known as Medicare Part D, had no shortage of critics.  A New York Times story cited fears that the program’s private sector-based structure would leave “the elderly exposed to a future of soaring drug costs.”

Others said that insurers would never agree to create drug-only plans and that the marketplace would be bereft of options for seniors.  And then there were the persistent critics who argued that offering seniors a broad range of competitive plan choices, instead of a one-size-fits-all government-run approach, would only confuse and frustrate them.

Now, ten years after Medicare Part D was fully implemented, those arguments have long been put to rest.  Our Medicare Today coalition conducts an annual nationwide survey of seniors to ascertain how well the prescription drug program is working for them.  The results, as has been the case every year, show that this remains an enormously popular program that is changing lives for the better by making prescription medications affordable and accessible.

Here’s what we learned from this year’s Morning Consult survey of approximately 2,000 seniors:

  • 88 percent are satisfied with the Medicare Part D coverage
  • 80 percent say their plan is a good value
  • 92 percent report their plan is convenient to use
  • 84 percent say it is important for them to have a variety of plans from which to choose (the ‘competition will cause confusion’ argument never did hold water and was, quite frankly, demeaning to seniors)

And, as to the concerns expressed over a decade ago regarding ‘soaring’ costs, Medicare Part D’s structure in which plans compete on the basis of value has resulted in average monthly premiums staying relatively stable at just over $30 for several years now.

Unfortunately, years after the original criticisms of Part D have long been vanquished by the program’s indisputable successes, there are still efforts to scramble its existing structure and give the federal government a significantly greater role in pricing and drug accessibility.  We can only hope that policymakers take note of these polling numbers and realize it would make little sense to fundamentally change a program that is not only popular but fulfilling its intended mission.

The Trustees Report and the Need for Action

June 22, 2016
4:56 pm

On a day in which the House Republicans are announcing their alternative health reform plan, House Democrats are staging a sit-in over gun laws, and the presumptive presidential nominees are firing insults at each other, it’s understandable if the annual issuance of the Medicare Board of Trustees report gets a little lost in the mix.

It’s a report quite worthy of attention, though, because its pages contain more than one call to action.

First, the trustees are now projecting that the Medicare program will reach insolvency in 2028, two years earlier than last year’s estimate.  This is not an insignificant change.  Think of the time required to enact comprehensive health reform, from the Nixon Administration’s efforts in the early 70s to the Affordable Care Act signing in 2010, or the decades spent trying to bring a prescription drug benefit to Medicare.   Twelve years may seem like a considerable amount of time to make Medicare financially sustainable and reliable for future generations but, in legislative terms, it’s not long at all.

We need serious discussions on how to modernize and strengthen Medicare.  The successes of the Medicare Advantage and Medicare Part D prescription drug programs provide sound examples lawmakers can use in shaping the future.  Those programs have utilized consumer choice and competition as drivers to provide high-quality care at reasonable costs.  And, in fact, the Congressional Budget Office has concluded that bringing those choice-and-competition qualities to Medicare as a whole would reduce program spending and beneficiary out-of-pocket costs.

The Medicare Trustees report sends a clear signal that this discussion shouldn’t wait.

Another important aspect of the trustees report concerns the Independent Payment Advisory Board (IPAB).  Many expected projected spending levels in this year’s report to trigger IPAB into action.  That wasn’t the case, although that threshold is expected to be reached next year.  Congress shouldn’t wait until then to make this bad idea go away for good.

Over 500 organizations representing patients, healthcare providers and employers have written to Congress already, pointing out that a mechanism which shifts power from elected representatives to unelected appointees would do significant damage to Medicare beneficiaries and the healthcare system as a whole.  By making harsh, arbitrary cuts to Medicare payments to healthcare goods and services instead of focusing on bringing greater value to the program, quality and access would be adversely affected.

No, the Medicare trustees didn’t flip the switch to activate IPAB this year, but it’s an imminent problem and it needs to be addressed sooner rather than later.