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.
January 20, 2015
1:00 pm
There has been plenty of discussion about the health coverage gap between the states that have expanded Medicaid eligibility and the 23 states that have, thus far, declined to do so. As a Kaiser Family Foundation study last December pointed out, about four million Americans living in states that have not altered their Medicaid thresholds have incomes that are above Medicaid eligibility but below the lower limit for tax credits to use for purchasing insurance in the health exchanges.
What has received less attention is the impact of the Medicaid debate on job creation. An article this week in the Dayton Daily News noted that about 7,000 new positions have been created in hospitals, physicians’ offices and other healthcare facilities in the first full year of Medicaid expansion in Ohio, an increase over the previous year’s job growth in the healthcare sector.
This is consistent with a Missouri study released last year which found that health sector job creation growth rates were significantly higher (2.1 percent versus 0.7 percent) in states that had expanded Medicaid eligibility versus those that haven’t.
The Healthcare Leadership Council has long maintained that expanding Medicaid is not the ideal tool, given its relatively low reimbursement rates and the number of physicians that are not accepting new Medicaid patients, for reducing the uninsured population. Making more individuals eligible for Medicaid, under the parameters of the Affordable Care Act, is preferable, though, to asking healthcare providers to bear larger uncompensated care burdens at a time when they are already absorbing ACA payment cuts.
We continue to urge the Obama Administration to be flexible toward the innovative steps a number of states are taking to expand coverage to more low-income citizens.
July 02, 2014
11:55 am
The White House’s Council of Economic Advisors released a report this week that is clearly intended to intensify the pressure on the 24 states that have, thus far, refused to expand their Medicaid programs, as provided for under the Affordable Care Act. As we recall, the U.S. Supreme Court ruled that the federal government cannot compel states to go along with the Medicaid eligibility expansion and many, predominantly with Republican governors and/or legislatures, have elected to pass.
In its report, the White House’s economic advisors make the point that almost 5.7 million more Americans will have health coverage in 2016 if these currently non-compliant states embrace expansion.
We’ve made clear in this space the Healthcare Leadership Council’s view that Medicaid is not the best option for reducing America’s uninsured rolls. Medicaid’s reimbursement rates for doctors and hospitals, significantly lower than private insurance and even Medicare, underscore the point that coverage does not necessarily equal access. Nonetheless, less-than-ideal coverage is better than no coverage for the millions of Americans who need healthcare but can’t afford to pay the providers who are delivering that care.
But, while it’s easy to blame states for not getting on board, the Administration needs to recognize its own responsibilities in this area.
It is fortuitous timing that the White House report was released in the same week that the state of Indiana submitted its proposal to the Department of Health and Human Services for an expansion of its Healthy Indiana program as an alternative to enlarging traditional Medicaid. As Indiana governor Mike Pence wrote in an op-ed, Healthy Indiana 2.0 is a better fit for the sensibilities of his state in that in that enrollees can take greater control of their own healthcare decisions through contributions to private accounts that are not unlike health savings accounts.
As he put it, “As national leaders in healthcare innovation, Hoosiers understand empowering people to take greater ownership of their healthcare choices is better than government-driven healthcare.” Pence backed up his rhetoric with metrics showing that Healthy Indiana participants use preventive health services at a high rate while making less use of expensive emergency room care.
The Indiana case, as well as the movement toward innovative Medicaid plans in Iowa, Arkansas and other states, emphasizes the argument that flexibility is critical in bringing Medicaid expansion to all 50 states. It’s simply a political reality that many states with conservative-leaning leaders do not like ‘Obamacare,’ don’t necessarily trust the federal government to keep its promises in regard to financial support for Medicaid expansion and are not going to change their current programs.
On the other hand, granting flexibility to make better use of private health plans and to incorporate patient engagement and responsibility can help resolve a situation in which we’re essentially two separate nations when it comes to Medicaid. HHS approving the Indiana proposal would be an excellent step in this necessary direction.
October 28, 2011
9:38 am
As a study published in Health Affairs this week points out, anyone who believes they have a handle on what will happen when Medicaid undergoes an unprecedented expansion this decade is kidding themselves.
The study by a trio of professors at Harvard University’s School of Public Health shows a huge possible variation in the number of low-income Americans who enroll in Medicaid once eligibility is expanded in 2014 to include anyone below 138 percent of the federal poverty level. The expansion, according to the researchers, could be as low as 8.5 million individuals or as high as 22.4 million, with a range of possible federal spending increases from $34 billion to $98 billion annually.
What I find particularly interesting about this study, though, is the projected impact on healthcare utilization. Because Medicaid has lower cost-sharing than private insurance, there is an expected increase in the demand for health services among those who move from private plans to Medicaid once eligibility levels change. Between the larger Medicaid population and this increased utilization, the Harvard researchers say the U.S. will need anywhere from 4,500 to 12,100 additional physicians to care for new Medicaid patients.
Here’s a critical passage in the report:
“These changes may pose major challenges in healthcare access because in recent years an increasing number of physicians have stopped accepting Medicaid patients. The Affordable Care Act does provide enhanced Medicaid reimbursement to primary care clinicians for 2013-2014, but this may not be enough to ensure an adequate supply of providers for new Medicaid patients.”
Some of us have continued to argue that coverage does not necessarily mean access. It is, without question, vitally important to provide coverage for the nation’s uninsured population, but it’s still an open question as to whether Medicaid expansion is the most effective tool for doing so.
October 04, 2011
10:23 am
Yesterday, USA Today devoted its front page to a topic many of us have been discussing intensely for some time – how to address Medicare’s escalating costs.
The newspaper listed five ways to “squeeze” Medicare spending and then discussed the political arguments for and against each. Some, such as gradually raising the Medicare eligibility age from 65 to 67 and requiring higher-income beneficiaries to pay full premiums for their Medicare Part B (physician services) and Part D (prescription drug) coverage are recommendations that the Healthcare Leadership Council has made to the congressional deficit reduction “super committee.”
But, in a number of ways, the USA Today article missed the mark:
• In discussing cutbacks to Medicare providers, including physicians, hospitals and pharmaceutical companies, the newspaper expanded on the likelihood that those health sectors would strenuously argue against any cuts, but there was no reporting on the impact those reductions would have upon beneficiaries.
This is a pet peeve of mine, as I’ve noted previously. Too often, both politicians and commentators speak of the value of cutting providers instead of patients, obscuring the fact that reduced payments to providers has an impact on both the accessibility and quality of healthcare. If, as the Obama Administration has proposed, pharmaceutical companies are required to send over $100 billion in rebates back to the government, can there be any other outcome besides higher prices for consumers and less money available for research and development of new innovative medicines?
Relating to another sector, there was an interesting discussion on the KevinMD blog yesterday that raised legitimate questions over whether cutting physicians’ incomes will make a dent in overall healthcare spending.
• Aside from a quick reference to the controversy over Congressman Paul Ryan’s (R-WI), USA Today quickly dismissed the idea of giving Medicare beneficiaries greater consumer choice among competing health plans, citing one study that showed it would increase out-of-pocket costs.
The concept deserves more consideration than that. If, as the Healthcare Leadership Council and experts like former Clinton budget director Alice Rivlin has proposed, you give beneficiaries the choice of staying in conventional fee-for-service Medicare or moving into a new competitive Medicare Exchange, both health plans and providers would be compelled to find innovative ways to reduce costs while maintaining high quality and value. This is a pro-consumer direction that deserved more than a couple of sentences in a major story on Medicare costs.
• Where was any reference in the USA Today story to medical liability reform? Fixing our nation’s broken medical malpractice system won’t, by itself, fix Medicare’s long-term fiscal problems, but reducing the practice of defensive medicine to protect against exposure to litigation will certainly generate meaningful savings.
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